RICHMOND, Ind., Nov. 4, 2019 /PRNewswire/ -- Richmond Mutual
Bancorporation, Inc., a Maryland
corporation (the "Company") (NASDAQ: RMBI), parent company of First
Bank Richmond (the "Bank"), today announced a net loss of
$3.3 million for the third quarter of
2019 compared to net income of $335,000 for the second quarter of 2019 and
$1.6 million for the three months
ended September 30, 2018. The
decrease in earnings in the third quarter of 2019 reflects the
contribution to the First Bank Richmond, Inc. Community Foundation
("Community Foundation" or "Foundation") and corresponding charge
of $6.25 million incurred in the
quarter. This resulted in a basic and diluted loss per share
of $0.26 for the quarter ended
September 30, 2019. Net loss
for the first nine months of 2019 was $1.5
million compared to net income of $4.2 million in the first nine months of
2018. The decrease in the first nine months of 2019 compared
to the same period of 2018 is due to the contribution to the
Foundation as well as the adoption of a nonqualified deferred
compensation plan in the second quarter of 2019 at a cost of
$1.7 million.
Excluding the one-time expenses associated with the Foundation,
net income for the three months ended September 30, 2019 would have been $1.7 million, or $0.14 per diluted share. Excluding the one
times expenses associated with the Foundation and the nonqualified
deferred compensation plan, net income for the nine months ended
September 30, 2019 would have been
$4.7 million. Management believes it
is appropriate to eliminate these one-time charges as they are not
reflective of the Company's ongoing operations and that the
presentation of these adjusted financial measures are more
meaningful to investors in evaluating the financial results of the
Company. See the section entitled "Use of Non-GAAP Financial
Measures" at the end of this release for a reconciliation of net
income.
Effective July 1, 2019, the
Company completed its initial public offering in connection with
the reorganization from a mutual to a stock holding company form of
organization. The Company sold 13,026,625 shares of common
stock at $10.00 per share, for gross
offering proceeds of approximately $130.3
million and contributed 500,000 shares and $1.25 million to the Community Foundation.
President's Comments
Garry Kleer, Chairman, President
and Chief Executive Officer of the Company stated, "We are very
pleased to report our third quarter results, our first quarter as a
public company following our reorganization and listing on the
Nasdaq Capital Market. Our earnings were impacted by the one-time
contribution to our new charitable foundation created as part of
our reorganization to a public company. We are excited about
the impact our foundation can have on the communities we
serve. Our strategy moving forward is to continue to leverage
the capital raised in a safe and disciplined way, allowing for
sustained growth in order to create maximum value for our
shareholders."
Mr. Kleer further stated, "As we disclosed on our prospectus
relating to our initial public offering, we are evaluating options
to terminate our participation in our multiemployer defined benefit
pension plan, which will require us to pay an amount based on the
underfunded status of the plan, referred to as a withdrawal
liability. Our actual termination expense, when termination
of the plan is probable, may be higher or lower than the estimate
provided in our initial public offering depending on a number of
factors, including but not limited to the interest rate environment
and the valuation of plan assets as of the date of
termination."
Balance Sheet Summary
Total assets increased $106.7
million, or 12.6%, to $956.3
million at September 30, 2019
from $849.6 million at December 31, 2018, driven by a $40.0 million, or 6.1%, increase in the loan and
lease portfolio, net of allowance for loan and lease losses, a
$41.5 million, or 28.9%, increase in
investment securities and a $26.4
million, or 176.4%, increase in cash and cash equivalents.
The increase in assets was funded with the proceeds received by the
Company in connection with the initial public offering. Most
of the growth in the loan portfolio occurred in the commercial real
estate and multi-family portfolios.
The allowance for loan and lease losses increased $1.3 million, or 23.1%, to $6.9 million at September
30, 2019 from $5.6 million at
December 31, 2018, primarily as a
result of increased commercial real estate and multi-family loan
activity. At September 30,
2019, the allowance for loan and lease losses totaled 0.98%
of total loans and leases outstanding compared to 0.85% at
December 31, 2018. Net
charge-offs during the first nine months of 2019 were $419,000, or 0.08% of average loans and leases
outstanding compared to $521,000, or
0.09% of average loans and leases outstanding during the first nine
months of 2018.
Total deposits decreased $12.8
million, or 2.1%, to $607.8
million at September 30, 2019
from $620.6 million at December 31, 2018. This decrease in deposits
primarily was due to customer's using their funds on deposit with
the Bank to purchase stock in the Company's initial public
offering. Brokered deposits decreased $58.6 million during the first nine months of
2019. At September 30, 2019, brokered
deposits totaled $65.9 million, or
10.8 % of total deposits, compared to $124.5
million, or 15.0% of total deposits at December 31, 2018. This decrease was partially
offset by an increase in retail certificates of deposit of
$39.8 million from December 31, 2018 to September 30, 2019.
Stockholders' equity totaled $200.4
million at September 30, 2019,
an increase of $114.5 million from
December 31, 2018. The increase in
stockholders' equity was the result of the completion of the
Company's initial public offering and a $4.0
million reduction in accumulated other comprehensive loss,
partially offset by a net loss of $1.5
million. First Bank Richmond's tangible common equity
ratio and its risk-based capital ratios exceeded "well-capitalized"
levels as defined by all regulatory standards as of September 30, 2019.
Income Statement Summary
Net interest income before the provision for loan and lease
losses increased $969,000, or 14.0%,
to $7.9 million in the third quarter
of 2019 compared to $6.9 million in
the third quarter of 2018. Net interest income before
provision for loan and lease losses increased $2.2 million, or 10.8%, to $22.5 million in the first nine months of 2019
compared to $20.3 million in the
first nine months of 2018. These increases primarily were due
to increases in average interest-earning assets during the three
and nine months ended September 30,
2019 compared to the comparable periods in 2018. Net
interest margin was 3.31% for the third quarter of 2019 compared to
3.59% for the third quarter of 2018 and was 3.34% for the nine
months ended September 30, 2019
compared to 3.57% during the same period in 2018.
The provision for loan and lease losses for the three months
ended September 30, 2019 totaled
$705,000, a $255,000, or 56.7%, increase over the
$450,000 recorded in the three months
ended September 30, 2018. The
provision for loan and lease losses for the nine months ended
September 30, 2019 totaled
$1.7 million compared to $1.4 million for the nine months ended
September 30, 2018, a $365,000, or 27.0%, increase. The higher
provisions were due to the overall increase in the size of the loan
portfolio, primarily commercial real estate and construction and
development loans, as well as a reflection of the overall slowing
economy. Net charge-offs during the third quarter of 2019
were $90,000, compared to net
charge-offs of $454,000 in the third
quarter of 2018. Net charge-offs during the first nine months
of 2019 were $419,000, compared to
net charge-offs of $521,000 in the
first nine months of 2018.
Total noninterest income increased $141,000, or 14.0%, to $1.1 million for the three months ended
September 30, 2019, compared to
$1.0 million for the same period in
2018. A gain on sale of securities of $22,000 was recorded for the three months ended
September 30, 2019, compared to no
gain recognized in the same period in 2018. Gain on sale of
loans and leases increased $77,000,
or 49.7%, to $232,000 for the three
months ended September 30, 2019
compared to $155,000 for the three
months ended September 30, 2018 as a
result of an increase in mortgage banking activity during the
period. Other loan fees increased $108,000 during the third quarter of 2019
compared to the third quarter of 2018. Other income decreased
$85,000, or 39.7%, to $129,000 for the three months ended September 30, 2019 compared to $214,000 for the three months ended September 30, 2018.
Total noninterest income increased $205,000, or 7.5%, to $3.0
million for the nine months ended September 30, 2019, compared to $2.7 million for the same period in 2018. The
increase was primarily driven by other loan fees, gains on sale of
securities and gain on sale of loans and leases increasing
$278,000 in the aggregate over the
nine months ended September 2018. These increases were
partially offset by lower service charges on deposit accounts and
other income, which decreased $166,000 compared to the first three quarters of
2018.
Total noninterest expense increased $7.0
million to $12.5 million
during the three months ended September 30,
2019, compared to the same period in 2018. Of the
$7.0 million increase, $6.25 million was attributable to the
contribution to the Foundation. Excluding the expense
associated with the contribution to the Foundation, noninterest
expense increased $769,000 in the
third quarter of 2019 compared to the same period in 2018.
Salaries and employee benefits increased $424,000, or 12.4%, in the third quarter of 2019
compared to the third quarter of 2018 due to merit increases and
higher related benefits. The higher related benefits included
a $135,000 increase in pension
expense and a $121,000 increase
related to our newly implemented Employee Stock Ownership Plan in
the third quarter of 2019 compared to the same period in
2018. The defined benefit plan was frozen effective
October 1, 2019 and we are currently
evaluating options to terminate the plan which will reduce expenses
associated with the pension plan in the future. Data
processing fees increased $97,000
during the three months ended September 30,
2019 compared to September 30,
2018, primarily attributable to higher transaction volume
and additional services utilized from the Company's IT
provider. FDIC assessment expense decreased $148,000 in the third quarter of 2019 compared to
the third quarter of 2018 as the Bank paid no deposit insurance
assessment. This was the result of the Deposit Insurance Fund
("DIF") achieving a specified ratio of eligible deposits and banks
with less than $10 billion in assets
receiving credit for previous assessments paid. The Bank has
$36,000 in small bank credits on
future assessments remaining as of September
30, 2019, which may be recognized in future periods when
allowed for by the FDIC upon insurance fund levels being
maintained. Legal and professional fees increased
$164,000 in the third quarter of 2019
compared to the same period in 2018 primarily as a result of our
reorganization from the mutual to stock holding company form of
organization. Advertising expenses increased $75,000 for the three months ended September 30, 2019 compared to the three months
ended September 30, 2018. Loan
tax and insurance expense also increased $75,000 in the third quarter of 2019 compared to
the same period in 2018.
Total noninterest expense increased $9.4
million, or 57.3%, to $25.9
million during the nine months ended September 30, 2019, compared to the same period
in 2018, which included the $6.25
million charge attributable to the contribution to the
Community Foundation and the $1.7
million charge related to the adoption of a nonqualified
deferred compensation plan during the period. Excluding
the expenses associated with these two non-recurring expenses,
noninterest expense increased $1.5
million during the nine months ended September 30, 2019 compared to the same period in
2018. Salaries and employee benefits increased $2.4 million, or 23.0%, in the first nine months
of 2019 compared to the first nine months of 2018, primarily due to
the adoption of the nonqualified deferred compensation plan in the
second quarter of 2019. Merit increases and higher related
benefits accounted for the remainder of the increase.
Excluding the nonqualified deferred compensation plan expense,
salaries and employee benefits increased $662,000, or 6.4%, in the first nine months of
2019 compared to the same period in 2018. Data processing
fees increased $191,000, while
Federal Deposit Insurance Corporation ("FDIC") assessments
decreased $117,000, or 27.0%, during
the nine months ended September 30,
2019 compared to September 30,
2018. The increase in data processing fees was a result of
higher transaction volume and services while the decrease in FDIC
assessments was attributable to the credit received in the third
quarter of 2019. Legal and professional fees also
increased $388,000 in the first nine
months of 2019 compared to the same period in 2018 for the reasons
discussed above. Loan tax and insurance expense
increased by $28,000 during the nine
months ended September 30, 2019
compared to the same period in 2018 due to a recovery of
$84,000 in property taxes in
2018.
Income tax expense decreased by $1.3
million, during the three months ended September 30, 2019, compared to the same period
in 2018. Income tax expense decreased by $1.6 million during the nine months ended
September 30, 2019, compared to the
same period in 2018. These decreases in income tax expense were due
to pre-tax income decreasing during the 2019 periods compared to
the same periods in 2018. Pre-tax income decreased for the
three and nine months ended September 30,
2019 due to the contribution to the Community Foundation in
the third quarter of 2019 and the adoption of a nonqualified
deferred compensation plan during the second quarter of 2019.
About Richmond Mutual Bancorporation, Inc.
Richmond Mutual Bancorporation, Inc., headquartered in
Richmond, Indiana, is the holding
company for First Bank Richmond, a community-oriented financial
institution offering traditional financial and trust services
within its local communities through its eight locations in
Richmond, Centerville, Cambridge City and Shelbyville, Indiana, its five locations in
Sidney, Piqua and Troy,
Ohio and its loan production office in Columbus, Ohio.
FORWARD-LOOKING STATEMENTS:
This document and other filings by the Company with the
Securities and Exchange Commission (the "SEC"), as
well as press releases or other public or stockholder
communications released by the Company, may contain forward-looking
statements, including, but not limited to, (i) statements
regarding the financial condition, results of operations and
business of the Company, (ii) statements about the Company's
plans, objectives, expectations and intentions and other statements
that are not historical facts and (iii) other statements
identified by the words or phrases "will likely result," "are
expected to," "will continue," "is anticipated," "estimate,"
"project," "intends" or similar expressions that are intended to
identify "forward-looking statements", within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on current beliefs and
expectations of the Company's management and are inherently subject
to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the Company's control. In
addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and
decisions that are subject to change.
The following factors, among others, could cause actual
results to differ materially from the anticipated results or other
expectations expressed in the forward-looking statements: changes
in economic conditions; legislative changes; changes in policies by
regulatory agencies; fluctuations in interest rates; the risks of
lending and investing activities, including changes in the level
and direction of loan delinquencies and write-offs and changes in
estimates of the adequacy of the allowance for loan losses; the
Company's ability to access cost-effective funding; fluctuations in
real estate values and both residential and commercial real estate
market conditions; demand for loans and deposits in the Company's
market area; changes in management's business strategies; changes
in the regulatory and tax environments in which the Company
operates; and other factors set forth in the Company's filings with
the SEC.
The factors listed above could materially affect the
Company's financial performance and could cause the Company's
actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in
any current statements.
The Company does not undertake - and specifically declines
any obligation - to publicly release the result of any revisions
which may be made to any forward-looking statements to reflect
events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events. When
considering forward-looking statements, keep in mind these risks
and uncertainties. Undue reliance should not be placed on any
forward-looking statement, which speaks only as of the date made.
Refer to the Company's periodic and current reports filed with the
SEC for specific risks that could cause actual results to be
significantly different from those expressed or implied by any
forward-looking statements.
Financial
Highlights (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
SELECTED
OPERATIONS DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
$
10,807,090
|
|
$
8,971,447
|
|
$
30,962,488
|
|
$
25,729,537
|
Interest
expense
|
2,897,957
|
|
2,031,418
|
|
8,450,944
|
|
5,428,067
|
|
7,909,133
|
|
6,940,029
|
|
22,511,544
|
|
20,301,470
|
Provision for loan
and lease losses
|
705,000
|
|
450,000
|
|
1,715,000
|
|
1,350,000
|
Net interest income
after provision for loan losses
|
7,204,133
|
|
6,490,029
|
|
20,796,544
|
|
18,951,470
|
Noninterest
income
|
1,147,096
|
|
1,006,267
|
|
2,951,456
|
|
2,746,726
|
Noninterest
expense
|
12,499,764
|
|
5,481,207
|
|
25,908,761
|
|
16,469,492
|
Income before income
tax expense
|
(4,148,535)
|
|
2,015,089
|
|
(2,160,761)
|
|
5,228,704
|
Income tax expense
(benefit)
|
(898,200)
|
|
394,700
|
|
(617,800)
|
|
1,021,300
|
Net income
(loss)
|
(3,250,335)
|
|
1,620,389
|
|
(1,542,961)
|
|
4,207,404
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
12,473,821
|
|
N/A
|
|
12,473,821
|
|
N/A
|
Earnings (Loss) Per
Share for period July 2, 2019 to September 30, 2019
|
|
|
|
|
|
|
|
Basic
|
$
(0.26)
|
|
N/A
|
|
$
(0.26)
|
|
N/A
|
Diluted
|
$
(0.26)
|
|
N/A
|
|
$
(0.26)
|
|
N/A
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
(Unaudited)
|
|
|
SELECTED FINANCIAL
CONDITION DATA:
|
|
|
|
|
|
|
|
Total
assets
|
$
956,220,017
|
|
$
849,618,363
|
Cash and cash
equivalents
|
41,377,246
|
|
14,971,170
|
Investment
securities
|
185,019,031
|
|
143,562,461
|
Loans and leases, net
of allowance for losses
|
694,744,985
|
|
654,755,066
|
Premises and
equipment, net
|
14,014,239
|
|
14,025,476
|
Federal Home Loan
Bank stock
|
7,600,400
|
|
6,560,600
|
Other
assets
|
13,464,116
|
|
15,743,590
|
Deposits
|
607,808,077
|
|
620,636,820
|
Borrowings
|
141,000,000
|
|
136,100,000
|
Total stockholders'
equity
|
200,353,905
|
|
85,832,032
|
|
|
|
|
ASSET QUALITY
RATIOS:
|
|
|
|
|
|
|
|
Allowance for loan
and lease losses to total loans and leases
|
0.98%
|
|
0.85%
|
Allowance for loan
and lease losses to non-performing loans and leases
|
166.90%
|
|
122.40%
|
Nonperforming loans
and leases to total loans and leases
|
0.59%
|
|
0.69%
|
Nonperforming assets
to total assets
|
0.44%
|
|
0.56%
|
Net charge-offs
(annualized) to average loans and leases outstanding
|
0.08%
|
|
0.14%
|
|
|
|
|
Use of Non-GAAP
Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP
RECONCILIATIONS:
|
|
|
|
|
|
($ in thousands,
except EPS, shares)
|
3Q
2019
|
|
Adjustments
|
|
Adjusted 3Q
2019
|
|
|
|
|
|
|
Net interest income
and noninterest income
|
$
9,056
|
|
$
-
|
|
$
9,056
|
Less: Provision for
loan and lease losses
|
(705)
|
|
-
|
|
(705)
|
Less: Noninterest
expenses
|
(12,499)
|
|
6,250
|
|
(6,249)
|
Income (loss) before
income taxes
|
(4,148)
|
|
6,250
|
|
2,102
|
Income taxes
(benefit)
|
(898)
|
|
1,313
|
|
415
|
Net income
(loss)
|
(3,250)
|
|
4,937
|
|
1,687
|
|
|
|
|
|
|
Average Shares
Outstanding
|
12,473,821
|
|
|
|
12,473,821
|
Earnings (Loss)Per
Share for period July 2, 2019 to September 30, 2019
|
|
|
|
|
|
Basic
|
$
(0.26)
|
|
|
|
$
0.14
|
Diluted
|
$
(0.26)
|
|
|
|
$
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands,
except EPS, shares)
|
YTD
|
|
Adjustments
|
|
Adjusted
YTD
|
|
|
|
|
|
|
Net interest income
and noninterest income
|
$
25,463
|
|
$
-
|
|
$
25,463
|
Less: Provision for
loan and lease losses
|
(1,715)
|
|
-
|
|
(1,715)
|
Less: Noninterest
expenses
|
(25,909)
|
|
7,952
|
|
(17,957)
|
Income (loss) before
income taxes
|
(2,161)
|
|
7,952
|
|
5,791
|
Income taxes
(benefit)
|
(618)
|
|
1,754
|
|
1,136
|
Net income
(loss)
|
(1,543)
|
|
6,198
|
|
4,655
|
|
|
|
|
|
|
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SOURCE Richmond Mutual Bancorporation, Inc.