RICHMOND, Ind., April 27, 2020 /PRNewswire/ -- Richmond Mutual
Bancorporation, Inc., a Maryland
corporation (the "Company") (NASDAQ: RMBI), parent company of First
Bank Richmond (the "Bank"), today announced net income of
$2.5 million, or $0.20 diluted earnings per share, for the first
quarter of 2020 compared to net income of $1.4 million for the first quarter of 2019.
There is no comparison of earnings per share to the first quarter
of 2019, as the Company's reorganization from the mutual to stock
form of ownership and related stock offering was not completed
until July 1, 2019.
President's Comments
Garry Kleer, Chairman, President
and Chief Executive Officer, commented, "The first quarter of 2020
was off to a good start with several of the expenses associated
with our initial public offering and benefit plan
restructuring behind us. Then, in early March we shifted our
focus to helping businesses and individuals in our communities
during the ongoing COVID-19 pandemic. We, as a Company, are
doing everything we can for our customers who have applied for
government sponsored loan programs. We have continued our
charitable giving to organizations that are assisting our
communities at this time and particularly those that are focused on
people affected by Covid-19. We have also taken steps to
protect the safety and health of our employees while encouraging
them to continue their community involvement if it can be done in a
safe manner. In this regard, I would like to thank our
employees who have demonstrated their commitment to our communities
by continuing to provide vital banking services and assistance to
our customers from our offices and off-site locations."
"Our capital and liquidity positions remain strong, allowing us
to assist businesses with access to programs like the Paycheck
Protection Program. As always, we will continue to be a
reliable partner to our customers in helping them achieve their
financial goals. Our first quarter results were only slightly
impacted by the COVID-19 pandemic; however, as this pandemic wears
on we anticipate that our future results may be affected in a
number of areas, including asset quality and earnings. The
economic effect of the COVID-19 pandemic is expected to result in
added pressures on asset quality in future quarters which may
require additional provisions. In addition, the reduction in
short-term interest rates by the Federal Reserve was significant
and had an immediate adverse impact on our net interest
margin. We expect additional net interest margin compression
in future quarters as there will be declining interest income on
loans as they reprice in the current interest rate environment,
which may be partially offset by the gradual decline in deposit
interest rates," concluded Kleer.
Our Response to COVID-19 Pandemic
Loan Programs. In response to the current
global situation surrounding the COVID-19 pandemic, the Company is
offering a variety of relief options designed to support our
clients and communities, including participating in the U.S. Small
Business Administration's ("SBA") Paycheck Protection Program
("PPP"). As of April 21, 2020,
we had received, approved and funded PPP applications totaling
$55.6 million, helping 346 small
business customers in the communities we serve.
Loan Modifications. We have received, and
continue to receive, numerous inquiries and requests from borrowers
for some type of payment relief. The primary method of
relief is to allow the borrower up to a 90-day payment
deferment. We have also waived loan late fees and suspended
foreclosure proceedings. We believe the steps we are taking
are necessary to effectively manage our portfolio and assist our
clients through the ongoing uncertainty surrounding the duration,
impact and government response to the COVID-19 pandemic.
Branch Operations and Support Personnel. We
have taken various steps to ensure the safety of our clients and
our personnel by limiting branch activities to appointment only and
use of our drive-up facilities. We also encourage the use of
our digital and electronic banking channels while adjusting for
evolving State and Federal guidelines. Many of our employees
are working remotely or have flexible work schedules, and we have
established protective measures within our offices to help ensure
the safety of those employees who must work on-site. To
facilitate this approach, we allocated additional computer
equipment to staff and enhanced our network capabilities with
several upgrades. The Family First Coronavirus Response Act
also provides additional flexibility to our employees to help
navigate their individual challenges.
Capital Strength. At March 31, 2020 the Company's stockholders' equity
totaled $193.2 million, a
$5.4 million, or 2.9% increase from
year-end 2019. The Company's equity to asset ratio was 19.17% at
March 31, 2020. At March 31, 2020, the Bank's Tier I capital to
total assets was 14.31% and the Bank's capital was well in excess
of all regulatory requirements.
Balance Sheet Summary
Total assets increased $21.6
million, or 2.2%, to $1.0
billion at March 31, 2020,
from $986.0 million at December 31, 2019. The increase was
primarily a result of a $21.8
million, or 8.4% increase in cash and investments. The
increase in cash and investments was funded by a $28.0 million, or 18.2%, increase in FHLB
advances and partially offset by a $12.0
million, or 1.9%, decrease in deposits.
The allowance for loan and lease losses increased $217,000, or 3.1%, to $7.3
million at March 31, 2020 from
$7.1 million at December 31, 2019. At March 31, 2020, the allowance for loan and lease
losses totaled 1.05% of total loans and leases outstanding compared
to 1.02% at December 31, 2019.
Net recoveries during the first three months of 2020 were
$7,000, compared to net charge-offs
of $289,000, or 0.04%, of average
loans and leases outstanding during the first three months of
2019.
As of March 31, 2020, the Company
had evaluated its exposure to potential loan and lease losses
related to the COVID-19 pandemic based on information currently
available. At that time, the Company did not have verifiable
documentation as to the full extent of the impact of the pandemic
on the Company's deposit and loan customers. Management
regularly analyzes conditions within its geographic markets and
evaluates its loan portfolio. Credit metrics are being
reviewed and stress testing is being performed on the loan
portfolio. Potentially higher risk segments of the portfolio,
such as hotels and restaurants, are being closely monitored as are
loan payment deferrals.
Total deposits decreased $12.0
million, or 1.9%, to $605.2
million at March 31, 2020 from
$617.2 million at December 31, 2019. This decrease in deposits
primarily was due to a decline in money market account balances and
brokered deposits. Brokered deposits decreased $8.7 million during the first three months of
2020. At March 31, 2020,
brokered deposits totaled $48.0
million, or 7.9 % of total deposits, compared to
$56.7 million, or 9.2% of total
deposits at December 31, 2019.
Stockholders' equity totaled $193.2
million at March 31, 2020, an
increase of $5.4 million from
December 31, 2019. The increase in
stockholders' equity primarily was the result of net income of
$2.5 million in the first quarter of
2020 and a $2.8 million improvement
in accumulated other comprehensive income.
Income Statement Summary
Net interest income before the provision for loan and lease
losses increased $768,000, or 10.8%,
to $7.9 million in the first quarter
of 2020 compared to $7.1 million in
the first quarter of 2019. This increase was due to an
increase in average interest-earning assets during the first
quarter of 2020 compared to the comparable period in 2019.
The total benefit of this increase in average
interest-earning assets was diminished by the significant reduction
in the targeted Federal Funds Rate since July 2019, including the 150 basis point decrease
in March 2020 in response to the
COVID-19 pandemic.
Interest income increased $695,000, or 7.1%, to $10.5 million during the quarter ended
March 31, 2020, compared to
$9.8 million during the quarter ended
March 31, 2019. Interest income
on loans increased $298,000, or 3.4%,
to $9.1 million for the quarter ended
March 31, 2020, compared to
$8.8 million for the comparable
quarter in 2019, primarily due to a higher average loan balance.
The average outstanding loan balance was $686.2 million for the quarter ended March 31, 2020, compared to $668.2 million for the quarter ended March 31, 2019. The average yield on loans was
5.28% for the quarter ended March 31,
2020, compared to 5.25% for the quarter ended March 31, 2019. Interest income on
investment securities increased $321,000, or 34.1%, to $1.2 million during the quarter ended
March 31, 2020, compared to
$942,000 during the comparable
quarter in 2019. The increase in the interest income on
investment securities was due to higher average balances, partially
offset by a lower weighted average yield. The average balance
of investment securities was $224.3
million for the quarter ended March
31, 2020, compared to $142.6
million for the quarter ended March
31, 2019. The average yield on investment securities was
2.11% for the quarter ended March 31,
2020, compared to 2.38% for the quarter ended March 31, 2019.
Interest expense decreased $73,000, or 2.8%, to $2.6
million for the quarter ended March
31, 2020, compared to the quarter ended March 31, 2019. Interest expense on
deposits decreased $62,000, or 3.3%,
to $1.8 million for the quarter ended
March 31, 2020, compared to a year
ago, primarily as a result of a decrease of $27.0 million, or 4.7%, in the average balance of
interest-bearing deposits to $546.5
million. The weighted average rate paid on
interest-bearing deposits was 1.34% for the quarter ended
March 31, 2020, compared to 1.33% for
the quarter ended March 31,
2019. Interest expense on FHLB borrowings decreased
$11,000, or 1.5%, to $739,000 for the quarter ended March 31, 2020, compared to the prior year, due
to a decrease in the average rate paid on FHLB borrowings.
The weighted average rate paid on FHLB borrowing was 1.80% for the
quarter ended March 31, 2020, a 41
basis point decline from 2.21% for the comparable quarter in
2019.
Net interest margin was 3.32% for the first quarter of 2020
compared to 3.44% for the first quarter of 2019, primarily due to
yields earned on interest-earning assets declining at a faster rate
than interest rates paid on interest-bearing liabilities.
The provision for loan and lease losses for the first three
months of 2020 totaled $210,000, a
$315,000, or 60.0%, decrease compared
to the $525,000 in the same period of
2019. The lower provision was due to the lack of growth in
the loan portfolio, as well as a reflection of the Company's asset
quality. Net recoveries during the first quarter of 2020 were
$7,000, compared to net charge-offs
of $289,000 in the first quarter of
2019. As the COVID-19 pandemic continues, it may exert pressure on
asset quality as 2020 unfolds. As management continues to
monitor the loan portfolio, additional provisions may be
required.
Noninterest income increased $49,000, or 5.4%, to $953,000 for the first quarter of 2020, compared
to $904,000 for the same period in
2019. Gain on sale of loans and leases increased $141,000, or 161.7%, in the first three months of
2020 to $228,000 compared to
$87,000 in the first three months of
2019 as a result of increased mortgage banking activity due to
lower rates. Loan and lease servicing income declined
$179,000 in the first quarter as the
Company recorded an impairment to its mortgage servicing rights of
$114,000 compared to no impairment
recorded in the first quarter of 2019. Other loan fees
declined $72,000, or 46.6%, in the
first quarter of 2020, primarily due to a $47,000 decrease in loan processing fees and a
$24,000 decline in miscellaneous loan
fees recorded in the first quarter as a result of lower commercial
loan originations in the quarter. Other income increased
$78,000, or 61.8% in the first
quarter of 2020 compared to 2019, due to a $33,000, or 33.9%, increase in trust fees earned
in the first quarter of 2020 compared to the same period in
2019.
Noninterest expense decreased $281,000 to $5.5
million during the first quarter of 2020 compared to the
same period in 2019. Salaries and employee benefits declined
$112,000, or 3.2%, in the first
quarter of 2020 compared to the first quarter of 2019. Salary
expenses increased $73,000 while
employee benefit expenses decreased $185,000. The decrease was due to the
$19.3 million accrual of estimated
expenses in connection with the freezing and proposed termination
of our defined benefit plan in December
2019, which resulted in reduced expenses for the first
quarter of 2020. The freezing of the plan is expected to
reduce but not eliminate the ongoing expenses associated with the
defined benefit plan until the plan is terminated. Data
processing expenses increased $63,000, or 15.1%, in the first quarter of 2020
compared to the first quarter of 2019, due to normal price
increases associated with information technology services and
additional digital services offered by the Company. Deposit
insurance expense decreased $79,000,
or 58.5%, in the first quarter of 2020 compared to the first
quarter of 2019, due to the Bank's higher capital ratios resulting
from the Company's injection of capital into the Bank in connection
with our reorganization to a stock holding company and related
stock offering. We also experienced decreases of $55,000 in legal and professional fees and
$95,000 in other expenses during the
first three months of 2020, compared to the first three months of
2019.
Income tax expense increased by $333,000 during the three months ended
March 31, 2020, compared to the same
period in 2019, due to pre-tax income increasing $1.4 million during the first quarter of 2020
compared to the first 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: the
effect of the COVID-19 pandemic, including on the Company's credit
quality and business operations, as well as its impact on general
economic and financial market conditions and other uncertainties
such as the extent and duration of the impact of the pandemic on
public health, the U.S. and global economies, and on consumer and
corporate customers, including economic activity, employment levels
and market liquidity: 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
|
|
March
31,
|
|
2020
|
|
2019
|
|
|
|
|
SELECTED
OPERATIONS DATA:
|
|
|
|
|
|
|
|
Interest
income
|
$
|
10,451,534
|
|
$
|
9,756,897
|
Interest
expense
|
2,564,039
|
|
2,636,962
|
Net
interest income
|
7,887,495
|
|
7,119,935
|
Provision for loan
and lease losses
|
210,000
|
|
525,000
|
Net interest income after provision for loan losses
|
7,677,495
|
|
6,594,935
|
Noninterest
income
|
953,068
|
|
904,455
|
Noninterest
expense
|
5,523,617
|
|
5,805,041
|
Income before income
tax expense
|
3,106,946
|
|
1,694,349
|
Income tax
expense
|
654,800
|
|
322,100
|
Net income
|
$
2,452,146
|
|
$
1,372,249
|
|
|
|
|
Shares
Outstanding
|
13,526,625
|
|
N/A
|
Weighted average
shares outstanding
|
12,467,206
|
|
N/A
|
Earnings Per
Share:
|
|
|
|
Basic
|
$
|
0.20
|
|
$
|
N/A
|
Diluted
|
$
|
0.20
|
|
$
|
N/A
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
|
SELECTED FINANCIAL
CONDITION DATA:
|
|
|
|
|
|
|
|
Total
assets
|
$
|
1,007,615,759
|
|
$
|
986,042,071
|
Cash and cash
equivalents
|
27,455,745
|
|
40,596,877
|
Investment
securities
|
252,661,347
|
|
217,701,245
|
Loans and leases, net
of allowance for losses
|
687,053,651
|
|
687,258,190
|
Premises and
equipment, net
|
14,007,080
|
|
14,087,169
|
Federal Home Loan
Bank stock
|
8,630,800
|
|
7,600,400
|
Other
assets
|
17,807,136
|
|
18,798,190
|
Deposits
|
605,235,378
|
|
617,218,813
|
Borrowings
|
182,000,000
|
|
154,000,000
|
Total stockholders'
equity
|
193,196,254
|
|
187,787,446
|
|
|
|
|
Book value
(GAAP)
|
$
|
193,196,254
|
|
$
|
187,787,446
|
Tangible book value
(non-GAAP)
|
193,196,254
|
|
187,787,446
|
Book value per
share
|
14.28
|
|
13.88
|
Tangible book value
per share
|
14.28
|
|
13.88
|
|
At and For
the
Three Months
Ended
March
31,
|
|
2020
|
|
2019
|
|
|
|
Selected Financial
Ratios and Other Data:
|
|
|
Performance
ratios:
|
|
|
Return on average
assets (annualized)
|
0.98
|
%
|
0.65
|
%
|
Return on average
equity (annualized)
|
5.15
|
%
|
6.36
|
%
|
Yield on
interest-earning assets
|
4.40
|
%
|
4.72
|
%
|
Rate paid on
interest-bearing liabilities
|
1.44
|
%
|
1.49
|
%
|
Average interest rate
spread during the period
|
2.96
|
%
|
3.23
|
%
|
Net interest
margin(1)
|
3.32
|
%
|
3.44
|
%
|
Operating expense to
average total assets
|
2.22
|
%
|
2.70
|
%
|
Average
interest-earning assets to average interest-bearing
liabilities
|
133.79
|
%
|
116.60
|
%
|
Efficiency
ratio(2)
|
62.97
|
%
|
71.21
|
%
|
|
|
|
Asset quality
ratios:
|
|
|
Non-performing assets
to total assets(3)
|
0.43
|
%
|
0.48
|
%
|
Non-performing loans
and leases to total gross loans and leases(4)
|
0.61
|
%
|
0.60
|
%
|
Allowance for loan
and lease losses to non-performing loans and
leases(4)
|
171.23
|
%
|
142.76
|
%
|
Allowance for loan
and lease losses to loans and leases receivable
|
1.05
|
%
|
0.86
|
%
|
Net charge-offs to
average outstanding loans and leases during the period
|
0.00
|
%
|
0.04
|
%
|
|
|
|
Capital
ratios:
|
|
|
Common equity tier 1
capital (to risk weighted assets) (5)
|
18.20
|
%
|
11.59
|
%
|
Tier 1 leverage
(core) capital (to adjusted tangible assets)
(5)
|
14.31
|
%
|
10.04
|
%
|
Tier 1 risk-based
capital (to risk weighted assets) (5)
|
18.20
|
%
|
11.59
|
%
|
Total risk-based
capital (to risk weighted assets) (5)
|
19.14
|
%
|
12.38
|
%
|
Equity to total
assets at end of period
|
19.17
|
%
|
10.10
|
%
|
Average equity to
average assets
|
19.11
|
%
|
10.19
|
%
|
|
|
|
Other
data:
|
|
|
Number of full
service offices
|
12
|
|
12
|
|
Full-time equivalent
employees
|
172
|
|
164
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net interest income
divided by average interest earning assets.
|
|
|
(2)
|
Total other
(non-interest) expenses as a percentage of net interest income and
total other (non-interest) income, excluding net securities
transactions.
|
|
|
(3)
|
Non-performing assets
consist of non-accruing loans and leases, accruing loans and leases
more than 90 days past due and foreclosed assets.
|
|
|
(4)
|
Non-performing loans
and leases consist of non-accruing loans and leases and accruing
loans and leases more than 90 days past due.
|
|
|
(5)
|
Capital ratios are
for First Bank Richmond.
|
View original
content:http://www.prnewswire.com/news-releases/richmond-mutual-bancorporation-inc-announces-first-quarter-2020-financial-results-301047925.html
SOURCE Richmond Mutual Bancorporation, Inc.