RICHMOND, Ind., July 23, 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 second quarter of 2020, which was unchanged from first
quarter of 2020 and up $2.2 million
compared to net income of $335,000
for the second quarter of 2019. Net income was $5.0 million, or $0.40 diluted earnings per share for the first
half of 2020, compared to $1.7
million for the first half of 2019. There is no
comparison of earnings per share to the second quarter or first
half 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, "We hit the ground running
in the second quarter of 2020. The Paycheck Protection
Program kicked off on April
3rd and our employees worked nights and weekends
to process all the applications. As of June 30, 2020, we had received, processed and
funded 465 loans totaling $64.3
million. Deferment requests have declined
significantly as of quarter end; however, we have continued to
receive some requests for additional deferment from borrowers,
especially in the hard-hit restaurant and hotel industries. We
re-opened our main office and branch lobbies on June 8, 2020, with lobby traffic lighter than
normal since re-opening. Our sanitation and disinfecting protocols
remain in place to keep our customers and employees as safe as
possible."
"Our purchase and refinance mortgage volume has been tremendous.
For the quarter, our gain on sale income exceeded the gain on sale
income for all of 2019. We anticipate some further net interest
margin compression in the third and fourth quarters of 2020 as
loans reprice in the current interest rate environment. The
decline in loan income should be partially offset by the gradual
decline in deposit rates. While we increased our provision
for loan and lease losses during the second quarter, there is still
significant uncertainty in the ultimate impact of the COVID-19
pandemic on our borrowers and the performance of our loan and lease
portfolio. Given our very strong capital position, we
approved and paid a 5 cent per share
dividend on June 18, 2020. We
also approved a 5% stock buyback that will begin July 24, 2020. Both these actions
demonstrate our commitment to our shareholders" concluded
Kleer.
Our Response to COVID-19 Pandemic
Loan Programs. During the second quarter of
2020, we continued our participation in the U.S. Small Business
Administration's ("SBA") Paycheck Protection Program ("PPP") to
provide ongoing support to our clients and communities. As of
June 30, 2020, we had funded
$64.3 million of PPP loans.
Loan Modifications. We continue to receive
inquiries and requests from borrowers for some type of payment
relief. The primary method of relief is to allow the borrower
up to a 90-day payment deferment. We also have waived loan
late fees and suspended foreclosure proceedings. We believe
the steps we are taking are necessary to effectively manage our
portfolio and assist our clients through the ongoing uncertainty
surrounding the duration, impact and government response to the
COVID-19 pandemic.
The following table summarizes information relating to loan
deferments at quarter ended June 30,
2020 and March 31, 2020:
|
|
June 30,
2020
|
|
March 31,
2020
|
($ in
thousands)
|
|
Number of
Loans
|
|
Balance
|
|
Number of
Loans
|
|
Balance
|
Commercial
mortgage
|
|
70
|
|
$
|
98,010
|
|
21
|
|
$
|
27,050
|
Commercial and
industrial
|
|
27
|
|
12,692
|
|
10
|
|
1,730
|
Construction and
development
|
|
3
|
|
10,098
|
|
—
|
|
—
|
Multi-Family
|
|
13
|
|
21,197
|
|
5
|
|
4,465
|
Residential
mortgage
|
|
88
|
|
11,198
|
|
8
|
|
1,379
|
Home
equity
|
|
7
|
|
215
|
|
—
|
|
—
|
Direct financing
leases
|
|
507
|
|
21,080
|
|
176
|
|
8,058
|
Consumer
|
|
37
|
|
597
|
|
—
|
|
—
|
Total
Loans
|
|
752
|
|
$
|
175,087
|
|
220
|
|
$
|
42,682
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes information relating to
hospitality loan deferments (which are included in the table above)
at quarter ended June 30, 2020 and
March 31, 2020:
|
|
June 30,
2020
|
|
|
March 31,
2020
|
|
($ in
thousands)
|
|
Number of
Loans
|
|
Balance
|
Percent of
total loans in
category
|
|
|
Number of
Loans
|
|
Balance
|
Percent of
total loans in
category
|
|
Restaurants
|
|
7
|
|
$
|
1,356
|
24.64
|
%
|
|
2
|
|
$
|
410
|
13.23
|
%
|
Hotels
|
|
19
|
|
44,455
|
72.58
|
%
|
|
8
|
|
19,531
|
37.51
|
%
|
Total Loans
|
|
26
|
|
$
|
45,811
|
68.62
|
%
|
|
10
|
|
$
|
19,941
|
36.15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We continue to monitor our loan portfolio and strive to work
with our customers and communities. Certain customers have
requested an additional 90-day deferment. Shown in the
following table is a listing of a second round of deferments
granted as of June 30, 2020, followed
by detailed information on commercial mortgage loans.
($ in
thousands)
|
|
Number of
2nd
Deferrals Granted
|
|
Amount
|
Commercial
mortgage
|
|
4
|
|
$
|
6,208
|
Commercial and
industrial
|
|
–
|
|
–
|
Construction and
development
|
|
–
|
|
–
|
Multi-Family
|
|
–
|
|
–
|
Residential
mortgage
|
|
4
|
|
474
|
Home
equity
|
|
1
|
|
4
|
Direct financing
leases
|
|
20
|
|
1,058
|
Consumer
|
|
2
|
|
9
|
Total
Loans
|
|
31
|
|
$
|
7,753
|
|
|
|
|
|
|
|
|
|
Loan Type
|
|
Amount
|
|
LTV
|
|
CRE -
Non-residential
|
|
$
|
120
|
|
46.7
|
%
|
CRE -
Hotel
|
|
5,338
|
|
54.0
|
%
|
CRE -
Hotel
|
|
694
|
|
79.0
|
%
|
CRE -
Hotel
|
|
56
|
|
26.3
|
%
|
|
|
|
|
|
|
|
Branch Operations and Support Personnel.
Many of our employees continue to work 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. We have also taken steps to resume more normal
branch activities with specific guidelines in place to
ensure the safety of our clients and our personnel. This
includes the installation of counter shields and hand sanitizing
stations, limiting the number of clients in a branch at any one
time, requiring social distancing and the wearing of masks within
the branch, diligent disinfecting of common area high touchpoints
and encouraging the use of our digital and electronic banking
channels. We continuously monitor and conform our practices
based on updates from the Center for Disease Control, World Health
Organization, Financial Regulatory Agencies, and local and state
health departments.
Capital Strength. At June 30, 2020, the Company's stockholders' equity
totaled $196.1 million, an
$8.3 million, or 4.5% increase from
year-end 2019. The Company's equity to asset ratio was 17.20% at
June 30, 2020. At June 30, 2020, the Bank's Tier I capital to total
assets was 13.43% and the Bank's capital was well in excess of all
regulatory requirements.
Second Quarter Performance
Highlights:
- Assets totaled $1.1 billion at
June 30, 2020, compared to
$986,000 at December 31, 2019.
- Loans and leases, net of allowance, totaled $752.9 million at June 30,
2020, compared to $687.1
million at March 31, 2020 and
$687.3 million at December 31, 2019.
- Nonperforming loans and leases totaled $4.3 million or 0.57% of total loans at
June 30, 2020, compared to
$4.3 million or 0.61% of total loans
at March 31, 2020, and $3.8 million or 0.55% of total loans at
December 31, 2019.
- The allowance for loan and lease losses totaled $8.5 million, or 1.12% of total loans and leases
outstanding, at June 30, 2020,
compared to $7.3 million, or 1.05% of
total loans and leases outstanding, at March
31, 2020, and $7.1 million, or
1.02% of total loans and leases outstanding, at December 31, 2019. The provision for losses
totaled $1.3 million for the current
quarter compared to $210,000 in the
preceding quarter and $885 in the
quarter ended December 31, 2019.
- Deposits totaled $739.1 million
at June 30, 2020, compared to
$605.2 million at March 31, 2020 and $617.2
million at December 31, 2019.
At June 30, 2020, noninterest bearing
deposits totaled $89.9 million or
12.2% of total deposits, compared to $62.5
million or 10.3% of total deposits at March 31, 2020 and $60.3
million or 9.8% at December 31,
2019.
- The Bank remains a "well-capitalized" institution for
regulatory capital purposes at June 30,
2020.
- Annualized net interest margin was 3.03% for the current
quarter, compared to 3.32% in the preceding quarter and 3.27% in
the second quarter a year ago.
Balance Sheet Summary
Total assets increased $154.1
million, or 15.6%, to $1.1
billion at June 30, 2020, from
$986.0 million at December 31, 2019. The increase was primarily a
result of a $65.7 million, or 9.6%,
increase in loans and leases, net of allowance, to $752.9 million at June 30,
2020 from $687.3 million at
December 31, 2019, and a $70.0 million, or 172.5%, increase in cash and
cash equivalents to $110.6 million at
June 30, 2020, compared to
$40.6 million at December 31, 2019. The increase in loans
and leases was attributable to PPP loans, which accounted for
$64.3 million of the $65.7 million increase. The increase in
cash and cash equivalents primarily was the result of an increase
in brokered deposits and FHLB borrowings as part of the Company's
strategy to increase liquidity. Investment securities increased
$16.8 million, or 7.7%, from
$217.7 million at December 31, 2019 to $234.5 million at June 30,
2020.
Nonperforming loans and leases, consisting of nonaccrual loans
and leases and accruing loans and leases more than 90 days past
due, totaled $4.3 million or 0.57% of
total loans and leases at June 30,
2020, compared to $4.3 million
or 0.61% of total loans at March 31,
2020, and $3.8 million or
0.55% of total loans and leases at December
31, 2019. Accruing loans past due more than 90 days at
June 30, 2020, totaled $3.3 million, compared to $3.1 million at March 31,
2020, and $2.6 million at
December 31, 2019.
The allowance for loan and lease losses increased $1.4 million, or 20.2%, to $8.5 million at June 30,
2020 from $7.1 million at
December 31, 2019. At
June 30, 2020, the allowance for loan
and lease losses totaled 1.12% of total loans and leases
outstanding compared to 1.02% at December
31, 2019. The allowance for loan and lease losses to
total loans increases 10 basis points if PPP loans, which totaled
$64.3 million at June 30, 2020 and are 100% guaranteed by the SBA,
are excluded from the calculation. Net charge-offs
during the first six months of 2020 were $98,000 or 0.03% of average loans and leases
outstanding, compared to net charge-offs of $329,000, or 0.10% of average loans and leases
outstanding during the first six months of 2019.
Management regularly analyzes conditions within its geographic
markets and evaluates its loan and lease portfolio. The Company
evaluated its exposure to potential loan and lease losses as of
June 30, 2020, which evaluation
included consideration of potential credit losses due to
the deteriorating economic conditions driven by the impact
of the COVID-19 pandemic. The full impact of the
pandemic on the Company's deposit and loan customers is still
unknown. The Company has increased its qualitative factors when
determining the adequacy of its allowance for loan and lease
losses. 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 increased $121.9
million, or 19.8%, to $739.1
million at June 30, 2020 from
$617.2 million at December 31, 2019. This increase in deposits was
primarily due to an increase in brokered deposits (as the Company
sought to increase its liquidity position) and an increase in
demand deposit and savings accounts primarily related to
disbursements of PPP loan funds to borrowers' deposit accounts [as
well as reduced withdrawals reflecting changes in customer spending
habits due to the COVID-19 pandemic]. Brokered deposits
increased $64.1 million to
$120.7 million, or 16.3% of total
deposits, at June 30, 2020, compared
to $56.7 million, or 9.2% of total
deposits, at December 31, 2019.
Demand deposit and savings accounts increased $60.1 million to $395.9
million at June 30, 2020,
compared to $335.8 million at
December 31, 2019. At
June 30, 2020, noninterest bearing
deposits totaled $89.9 million or
12.2% of total deposits, compared to $60.3
million or 9.8% of total deposits at December 31, 2019.
Stockholders' equity totaled $196.1
million at June 30, 2020, an
increase of $8.3 million from
December 31, 2019. The increase in
stockholders' equity primarily was the result of net income of
$5.0 million in the first half of
2020 and a $3.7 million improvement
in accumulated other comprehensive income, partially offset by
$623,000 in dividends paid to
shareholders.
Income Statement Summary
Net interest income before the provision for loan and lease
losses increased $137,000, or 1.7%,
to $8.0 million in the second quarter
of 2020, compared to $7.9 million in
the first quarter of 2020 and increased $542,000, or 7.2%, from $7.5 million in the second quarter of 2019.
The increase primarily was due to an increase in average
interest-earning assets during the second quarter of 2020 compared
to the first quarter of 2020 and 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 $47,000,
or 0.5%, to $10.5 million during the
quarter ended June 30, 2020, compared
to the quarter ended March 31, 2020
and increased $100,000, or 1.0%,
compared to $10.4 million during the
quarter ended June 30, 2019.
Interest income on loans increased $244,000, or 2.7%, to $9.3
million for the quarter ended June
30, 2020, compared to $9.1
million for the first quarter in 2020, and increased
$145,000, or 1.6%, from $9.2 million for the comparable quarter in 2019,
due to higher average loan balances. The average outstanding
loan balances were $747.9 million for
the quarter ended June 30, 2020,
compared to $686.2 million for the
quarter ended March 31, 2020 and
$687.0 million for the quarter ended
June 30, 2019. The average
yield on loans was 4.98% for the quarter ended June 30, 2020, compared to 5.28% and 5.33% for
the quarters ended March 31, 2020 and
June 30, 2019, respectively.
The yield on the loan portfolio was impacted by the PPP loan
activity during the second quarter of 2020 as PPP loans are
originated at an interest rate of 1%, although the effective yield
is slightly higher as a result of the origination fees paid to us
by the SBA. The average yield on PPP loans was 3.22%,
including the recognition of the net deferred fees, resulting in a
negative impact to the net interest margin of 12 basis points
during the quarter ended June 30,
2020.
Interest income on investment securities, including FHLB stock,
decreased $85,000, or 6.7%, to
$1.2 million during the quarter ended
June 30, 2020, compared to
$1.3 million during the quarter ended
March 31, 2020, and increased
$222,000, or 23.2%, from $957,000 during the comparable quarter in
2019. The decrease in interest income on investment
securities, including FHLB stock, from the previous quarter was due
to a decrease in the weighted average yield, while the increase
from the comparable period in 2019 was due to higher average
balances, partially offset by a lower weighted average yield.
The average balance of investment securities, including FHLB stock,
was $256.6 million for the quarter
ended June 30, 2020, compared to
$232.2 million and $157.8 million for the quarters ended
March 31, 2020 and June 30, 2019, respectively. The average
yield on investment securities, including FHLB stock, was 1.84% for
the second quarter of 2020, compared to 2.18% and 2.45% for the
previous quarter of 2020 and the second quarter of 2019,
respectively. Interest income earned on cash and cash
equivalents decreased to $11,000 in
the second quarter of 2020 compared to $125,000 in the first quarter of 2020 and
$278,000 in the comparable quarter of
2019. This was due to the significantly lower yield earned on
funds at the Federal Reserve after the rate reductions experienced
in the second half of 2019 and in March
2020.
Interest expense decreased $89,000, or 3.5%, to $2.5
million for the quarter ended June
30, 2020, compared to $2.6
million the first quarter of 2020, and decreased
$441,000, or 15.1%, from $2.9 million for the quarter ended June 30, 2019. Interest expense on deposits
decreased $120,000, or 6.6%, to
$1.7 million for the quarter ended
June 30, 2020, from $1.8 million in the previous quarter and
decreased $403,000, or 19.1%, from
$2.1 million for the comparable
quarter in 2019. This decrease in interest expense on
deposits from the previous quarter and the comparable quarter in
2019 was attributable to the lower weighted average rate paid on
interest-bearing deposits, partially offset by higher average
deposit balances. The weighted average rate paid on
interest-bearing deposits was 1.13% for the quarter ended
June 30, 2020, compared to 1.34% and
1.40% for the quarters ended March 31,
2020 and June 30, 2019,
respectively. Interest expense on FHLB borrowings increased
$31,000, or 4.2%, to $770,000 for the second quarter of 2020 compared
to $739,000 during the previous
quarter and decreased $38,000, or
4.7%, from $809,000 for the
comparable quarter in 2019. The average balance of FHLB
borrowings totaled $181.8 million
during the quarter ended June 30,
2020, compared to $164.1
million and $147.4 million for
the quarters ended March 31, 2020 and
June 30, 2019, respectively.
The weighted average rate paid on FHLB borrowings was 1.69% for the
quarter ended June 30, 2020, an 11
basis point decline from 1.80% for the first quarter of 2020 and a
51 basis point decline from 2.20% for the comparable quarter in
2019.
Annualized net interest margin was 3.03% for the second quarter
of 2020, compared to 3.32% and 3.27% for the first quarter of 2020
and second quarter of 2019, respectively. The decline in the
net interest margin for the current quarter compared to the prior
quarters primarily was 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 three months
ended June 30, 2020 totaled
$1.3 million, compared to
$210,000 for the quarter ended
March 31, 2020 and $485,000 for the quarter ended June 30, 2019. The increased provision was
primarily due to the continued uncertainty of the economic impact
of the COVID-19 pandemic on the Bank's loan portfolio. Net
charge-offs during the second quarter of 2020 were $106,000, compared to net recoveries of
$7,000 during the first quarter of
2020 and net charge-off of $40,000 in
the second quarter of 2019. As the COVID-19 pandemic
continues, we expect to see continued pressure on asset
quality. As management continues to monitor the loan
portfolio, additional provisions may be required.
Total noninterest income increased $1.1
million, or 118.6%, to $2.1
million for the quarter ended June
30, 2020 compared to $953,000
for the quarter ended March 31, 2019,
and increased $1.2 million, or
131.4%, from $900,000 for the
comparable quarter in 2019. The increase in noninterest
income resulted primarily from the increase in the gain on sale of
loans and leases, which increased $803,000, or 351.9% to $1.0 million during the second quarter of 2020,
compared to $228,200 during the first
quarter of 2020 and increased $907,000, or 734.1%, from $124,000 in the comparable period of 2019 as a
result of increased mortgage banking activity during the current
quarter due to lower rates. Loan and lease servicing income
increased $367,000 to $301,000 for the quarter ended June 30, 2020 compared to a loss of $66,000 for the quarter ended March 31, 2020, and increased $202,000, or 204.5%, from $99,000 for the comparable quarter in 2019.
In the second quarter of 2020, the Company recorded a recovery to
the value of its mortgage servicing rights of $296,000, compared to a $114,000 impairment charge recorded in the first
quarter of 2020, and no impairment recovery or charge recorded in
the second quarter of 2019. Other loan fees increased
$162,000, or 195.2%, to $245,000 in the second quarter of 2020 compared
to the quarter ended March 31, 2020,
and increased $156,000, or 176.8%,
over the comparable quarter in 2019. The increase during the
current quarter compared to the prior quarter was primarily due to
increased letter of credit fees of $55,000 and interest rate modification fees of
$76,000 earned in the second quarter
of 2020. The increase in the second quarter of 2020 compared
to the second quarter of 2019 was attributable to increased letter
of credit fees of $58,000 and loan
processing fees of $75,000.
Service fees on deposit accounts decreased $149,000, or 58.4%, to $106,000 for the quarter ended June 20, 2020, compared to $255,000 the first quarter of 2020, and decreased
$146,000, or 58.1% from $252,000 for the quarter ended June 30, 2019. These decreases in the
second quarter of 2020 were the result of the Company's waiving of
overdraft fees.
Total noninterest expense increased $124,000, or 2.2%, to $5.6
million for the three months ended June 30, 2020 compared to $5.5 million for the first quarter of 2020, and
decreased $2.0 million, or 25.7%,
from $7.6 million for the same period
in 2019. Salaries and employee benefits decreased
$93,000, or 2.8%, to $3.3 million for the quarter ended June 30, 2020, compared to $3.4 million in the first quarter of 2020, and
decreased $2.0 million, or 38.5%,
from $5.3 million for the quarter
ended June 30, 2019. The
decreases from the first quarter of 2020 were primarily due to
decreases in health insurance and ESOP costs. The
$2.0 million decrease from the
comparable quarter in 2019 was primarily attributable to the
$1.7 million pre-tax expense related
to the adoption of a nonqualified deferred compensation plan during
the second quarter of 2019. Excluding this expense, salaries
and employee benefits decreased $369,000, or 10.3%, for the three months ended
June 30, 2020, compared to the three
months ended June 30, 2019.
Data processing expenses decreased $5,000 in the second quarter of 2020 compared to
the first quarter of 2020, and increased $48,000, or 11.3%, compared to the second quarter
of 2019, due to normal price increases associated with information
technology services and additional digital services and products
offered by the Company. Deposit insurance expense increased
$4,000, to $60,000, in the second quarter of 2020 compared
to the first quarter of 2020, and decreased $98,000, or 62.0% compared to the second quarter
of 2019. The decrease from the second quarter of 2019 was 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. Legal and professional fees increased $86,000, or 35.7%, to $327,000 for the quarter ended June 30, 2020 compared to $241,000 for the quarter ended March 31, 2020, and increased $118,000, or 56.4% from $209,000 for the comparable quarter in
2019. The increase in legal and professional fees was due to
the establishment of an out-of-state subsidiary of First Bank for
investment management purposes in the second quarter of 2020.
Income tax expense decreased $22,000 during the three months ended
June 30, 2020, compared to the prior
quarter despite slightly higher pre-tax income due to a lower
effective federal tax rate compared to the prior
quarter. Income tax expense increased
$674,000 during the three months
ended June 30, 2020, compared to the
same period in 2019, primarily due to a $2.8
million increase in pre-tax income. The effective tax rate
for the second quarter of 2020 was 20.2% compared to 21.1% for the
first quarter of 2020 and a 14.3% benefit for the same quarter a
year ago.
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
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED
OPERATIONS DATA:
|
|
June 30,
2020
|
|
March 31,
2020
|
|
June
30,
2019
|
|
|
|
June
30,
2020
|
|
June
30,
2019
|
|
(In thousands, except
for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
10,498
|
|
$
|
10,451
|
|
$
|
10,398
|
|
|
|
$
|
20,950
|
|
$
|
20,155
|
|
Interest
expense
|
|
2,474
|
|
2,564
|
|
2,916
|
|
|
|
5,039
|
|
5,553
|
|
Net
interest income
|
|
8,024
|
|
7,887
|
|
7,482
|
|
|
|
15,911
|
|
14,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
|
1,320
|
|
210
|
|
485
|
|
|
|
1,530
|
|
1,010
|
|
Net interest income
after provision
|
|
6,704
|
|
7,677
|
|
6,997
|
|
|
|
14,381
|
|
13,592
|
|
Noninterest
income
|
|
2,083
|
|
953
|
|
900
|
|
|
|
3,036
|
|
1,804
|
|
Noninterest
expense
|
|
5,648
|
|
5,523
|
|
7,604
|
|
|
|
11,171
|
|
13,409
|
|
Income before income
tax expense
|
|
3,139
|
|
3,107
|
|
293
|
|
|
|
6,246
|
|
1,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
633
|
|
655
|
|
(42)
|
|
|
|
1,287
|
|
280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
2,506
|
|
$
|
2,452
|
|
$
|
335
|
|
|
|
|
$
|
4,959
|
|
$
|
1,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
|
13,527
|
|
13,527
|
|
—
|
|
|
|
13,527
|
|
—
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic(1)
|
|
0.20
|
|
0.20
|
|
N/A
|
|
|
|
0.40
|
|
N/A
|
|
Diluted(1)
|
|
0.20
|
|
0.20
|
|
N/A
|
|
|
|
0.40
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL
CONDITION DATA:
|
June 30,
2020
|
|
March 31,
2020
|
|
December 31,
2019
|
(In thousands,
except for per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
1,140,213
|
|
$
|
1,007,616
|
|
$
|
986,042
|
Cash and cash
equivalents
|
110,606
|
|
27,456
|
|
40,597
|
Investment
securities
|
234,524
|
|
252,661
|
|
217,701
|
Loans and leases, net
of allowance
|
752,923
|
|
687,054
|
|
687,258
|
Premises and
equipment, net
|
14,440
|
|
14,007
|
|
14,087
|
Federal Home Loan
Bank stock
|
9,080
|
|
8,631
|
|
7,600
|
Other
assets
|
18,640
|
|
17,807
|
|
18,798
|
Deposits
|
739,131
|
|
605,235
|
|
617,219
|
Borrowings
|
180,000
|
|
182,000
|
|
154,000
|
Total stockholder's
equity
|
196,136
|
|
193,196
|
|
187,787
|
|
|
|
|
|
|
Book value
(GAAP)
|
$
|
196,136
|
|
$
|
193,196
|
|
$
|
187,787
|
Tangible book value
(non-GAAP)
|
196,136
|
|
193,196
|
|
187,787
|
Book value per
share
|
14.50
|
|
14.28
|
|
13.88
|
Tangible book value
per share
|
14.50
|
|
14.28
|
|
13.88
|
The following table summarizes information relating to our loan
portfolio at June 30, 2020,
March 31, 2020 and December 31, 2019:
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
(In
thousands)
|
|
2020
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Commercial
mortgage
|
$
|
242,036
|
|
$
|
238,878
|
|
$
|
229,410
|
|
Commercial and
industrial
|
|
141,184
|
|
76,002
|
|
84,549
|
|
Construction and
development
|
|
62,372
|
|
58,051
|
|
53,426
|
|
Multi-family
|
|
58,709
|
|
58,101
|
|
66,002
|
|
Residential
mortgage
|
|
126,146
|
|
132,662
|
|
131,294
|
|
Home
equity
|
|
6,522
|
|
6,606
|
|
6,996
|
|
Direct financing
leases
|
|
114,352
|
|
111,691
|
|
109,592
|
|
Consumer
|
|
12,550
|
|
12,828
|
|
13,534
|
|
|
|
|
|
|
|
|
|
Total loans and
leases
|
$
|
763,871
|
|
$
|
694,819
|
|
$
|
694,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes information relating to changes
in deposits at June 30, 2020,
March 31, 2020 and December 31, 2019:
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
(In
thousands)
|
|
2020
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Noninterest-bearing
demand
|
$
|
89,922
|
|
$
|
62,491
|
|
$
|
60,297
|
|
Interest-bearing
demand
|
|
120,643
|
|
106,804
|
|
103,978
|
|
Savings and money
market
|
|
185,365
|
|
162,935
|
|
171,529
|
|
Non-brokered time
deposits
|
|
222,513
|
|
225,047
|
|
224,765
|
|
Brokered time
deposits
|
|
120,688
|
|
47,958
|
|
56,650
|
|
|
|
|
|
|
|
|
|
Total
deposits
|
$
|
739,131
|
|
$
|
605,235
|
|
$
|
617,219
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Average
Balance
Outstanding
|
|
|
|
Interest
Earned/
Paid
|
|
Yield/
Rate
|
|
|
|
Average
Balance
Outstanding
|
|
|
Interest
Earned/
Paid
|
|
Yield/
Rate
|
|
|
|
|
|
(Dollars in
thousands)
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and
leases receivable
|
|
|
$
|
747,865
|
|
|
$
|
9,308
|
|
4.98
|
%
|
|
$
|
687,023
|
|
|
$
|
|
9,163
|
|
5.33
|
%
|
|
Securities
|
|
|
|
247,594
|
|
|
|
1,120
|
|
1.81
|
%
|
|
|
150,640
|
|
|
|
|
867
|
|
2.30
|
%
|
|
FHLB
stock
|
|
|
|
9,035
|
|
|
|
58
|
|
2.57
|
%
|
|
|
7,143
|
|
|
|
|
91
|
|
5.10
|
%
|
|
Cash and cash
equivalents and other
|
|
|
|
54,806
|
|
|
|
11
|
|
0.08
|
%
|
|
|
70,744
|
|
|
|
|
278
|
|
1.57
|
%
|
|
Total
interest-earning assets
|
|
|
|
1,059,300
|
|
|
|
10,497
|
|
3.96
|
%
|
|
|
915,550
|
|
|
|
|
10,399
|
|
4.54
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and
money market accounts
|
|
|
|
183,415
|
|
|
|
253
|
|
0.55
|
%
|
|
|
180,514
|
|
|
|
|
346
|
|
0.77
|
%
|
|
Interest-bearing checking accounts
|
|
|
|
115,091
|
|
|
|
66
|
|
0.23
|
%
|
|
|
102,280
|
|
|
|
|
98
|
|
0.38
|
%
|
|
Certificate
accounts
|
|
|
|
303,805
|
|
|
|
1,385
|
|
1.82
|
%
|
|
|
317,299
|
|
|
|
|
1,663
|
|
2.10
|
%
|
|
Borrowings
|
|
|
|
181,824
|
|
|
|
770
|
|
1.69
|
%
|
|
|
147,375
|
|
|
|
|
809
|
|
2.20
|
%
|
|
Total
interest-bearing liabilities
|
|
|
|
784,135
|
|
|
|
2,474
|
|
1.26
|
%
|
|
|
747,468
|
|
|
|
|
2,916
|
|
1.56
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
|
|
|
$
|
8,023
|
|
|
|
|
|
|
|
|
$
|
|
7,483
|
|
|
|
|
Net earning
assets
|
|
|
$
|
275,165
|
|
|
|
|
|
|
|
|
$
|
168,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate
spread(1)
|
|
|
|
|
|
|
|
|
|
2.70
|
%
|
|
|
|
|
|
|
|
|
|
2.98
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin(2)
|
|
|
|
|
|
|
|
|
|
3.03
|
%
|
|
|
|
|
|
|
|
|
|
3.27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest-earning assets to
average
interest-bearing liabilities
|
|
|
|
135.09
|
%
|
|
|
|
|
|
|
|
|
122.49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net interest rate
spread represents the difference between the weighted average yield
on interest-earning assets and the weighted average rate of
interest-bearing liabilities.
|
(2)
|
Net interest margin
represents net interest income divided by average total
interest-earning assets.
|
|
|
|
Six Months Ended June
30,
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Average
Balance
Outstanding
|
|
Interest
Earned/
Paid
|
|
Yield/
Rate
|
|
|
Average
Balance
Outstanding
|
|
|
Interest
Earned/
Paid
|
|
Yield/
Rate
|
|
|
|
|
|
(Dollars in
thousands)
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and
leases receivable
|
|
|
$
|
692,055
|
|
|
$
|
18,372
|
|
5.31
|
%
|
|
$
|
677,688
|
|
|
$
|
|
17,929
|
|
5.29
|
%
|
|
Securities
|
|
|
|
235,947
|
|
|
|
2,302
|
|
1.95
|
%
|
|
|
146,667
|
|
|
|
|
1,715
|
|
2.34
|
%
|
|
FHLB
stock
|
|
|
|
8,479
|
|
|
|
139
|
|
3.28
|
%
|
|
|
6,916
|
|
|
|
|
183
|
|
5.29
|
%
|
|
Cash and cash
equivalents and other
|
|
|
|
43,541
|
|
|
|
136
|
|
0.62
|
%
|
|
|
40,379
|
|
|
|
|
328
|
|
1.62
|
%
|
|
Total
interest-earning assets
|
|
|
|
980,022
|
|
|
|
20,949
|
|
4.28
|
%
|
|
|
871,650
|
|
|
|
|
20,155
|
|
4.62
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and
money market accounts
|
|
|
|
173,352
|
|
|
|
545
|
|
0.63
|
%
|
|
|
171,736
|
|
|
|
|
628
|
|
0.73
|
%
|
|
Interest-bearing checking accounts
|
|
|
|
109,622
|
|
|
|
148
|
|
0.27
|
%
|
|
|
100,834
|
|
|
|
|
163
|
|
0.32
|
%
|
|
Certificate
accounts
|
|
|
|
291,449
|
|
|
|
2,836
|
|
1.95
|
%
|
|
|
314,309
|
|
|
|
|
3,203
|
|
2.04
|
%
|
|
Borrowings
|
|
|
|
172,945
|
|
|
|
1,510
|
|
1.75
|
%
|
|
|
141,713
|
|
|
|
|
1,559
|
|
2.20
|
%
|
|
Total
interest-bearing liabilities
|
|
|
|
747,368
|
|
|
|
5,039
|
|
1.35
|
%
|
|
|
728,592
|
|
|
|
|
5,553
|
|
1.52
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
|
|
|
$
|
15,910
|
|
|
|
|
|
|
|
|
$
|
|
14,602
|
|
|
|
|
Net earning
assets
|
|
|
$
|
232,654
|
|
|
|
|
|
|
|
|
$
|
143,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate
spread(1)
|
|
|
|
|
|
|
|
|
|
2.93
|
%
|
|
|
|
|
|
|
|
|
|
3.10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin(2)
|
|
|
|
|
|
|
|
|
|
3.25
|
%
|
|
|
|
|
|
|
|
|
|
3.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest-earning assets to
average
interest-bearing liabilities
|
|
|
|
131.13
|
%
|
|
|
|
|
|
|
|
|
119.63
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net interest rate
spread represents the difference between the weighted average yield
on interest-earning assets and the weighted average rate of
interest-bearing liabilities.
|
(2)
|
Net interest margin
represents net interest income divided by average total
interest-earning assets.
|
|
|
|
|
|
|
|
|
|
At and for the
Three Months Ended
|
|
June
30,
|
|
|
March
31,
|
|
|
December
31,
|
|
|
September
30,
|
|
|
June
30,
|
|
|
Selected Financial
Ratios and Other Data:
|
2020
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
|
2019
|
|
|
Performance
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (annualized)
|
0.93
|
|
%
|
0.98
|
|
%
|
(5.17)
|
|
%
|
(1.28)
|
|
%
|
0.14
|
|
%
|
Return on average
equity (annualized)
|
5.15
|
|
%
|
5.15
|
|
%
|
(25.85)
|
|
%
|
(8.92)
|
|
%
|
1.49
|
|
%
|
Yield on
interest-earning assets
|
3.96
|
|
%
|
4.40
|
|
%
|
4.48
|
|
%
|
4.53
|
|
%
|
4.54
|
|
%
|
Rate paid on
interest-bearing liabilities
|
1.26
|
|
%
|
1.44
|
|
%
|
1.53
|
|
%
|
1.62
|
|
%
|
1.56
|
|
%
|
Average interest rate
spread
|
2.70
|
|
%
|
2.96
|
|
%
|
2.95
|
|
%
|
2.91
|
|
%
|
2.98
|
|
%
|
Net interest margin
(annualized)(1)
|
3.03
|
|
%
|
3.32
|
|
%
|
3.33
|
|
%
|
3.31
|
|
%
|
3.27
|
|
%
|
Operating expense to
average total assets
(annualized)
|
2.10
|
|
%
|
2.22
|
|
%
|
10.35
|
|
%
|
4.90
|
|
%
|
3.09
|
|
%
|
Efficiency
ratio(2)
|
55.94
|
|
%
|
62.97
|
|
%
|
286.09
|
|
%
|
138.36
|
|
%
|
91.11
|
|
%
|
Average
interest-earning assets to
average interest-bearing liabilities
|
135.09
|
|
%
|
133.79
|
|
%
|
133.95
|
|
%
|
133.76
|
|
%
|
122.49
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets
to total assets(3)
|
0.38
|
|
%
|
0.43
|
|
%
|
0.39
|
|
%
|
0.44
|
|
%
|
0.39
|
|
%
|
Non-performing loans
and leases to total
gross loans and leases(4)
|
0.57
|
|
%
|
0.61
|
|
%
|
0.55
|
|
%
|
0.59
|
|
%
|
0.60
|
|
%
|
Allowance for loan
and lease losses to
non-performing loans and leases(4)
|
197.47
|
|
%
|
171.23
|
|
%
|
185.97
|
|
%
|
166.90
|
|
%
|
151.94
|
|
%
|
Allowance for loan
and lease losses to
total loans and leases
|
1.12
|
|
%
|
1.05
|
|
%
|
1.02
|
|
%
|
0.98
|
|
%
|
0.90
|
|
%
|
Net charge-offs
(annualized) to average
outstanding loans and leases during the
period
|
0.06
|
|
%
|
0.00
|
|
%
|
0.40
|
|
%
|
0.05
|
|
%
|
0.02
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to total
assets at end of period
|
17.20
|
|
%
|
19.17
|
|
%
|
19.04
|
|
%
|
20.95
|
|
%
|
8.40
|
|
%
|
Average equity to
average assets
|
18.13
|
|
%
|
19.11
|
|
%
|
19.98
|
|
%
|
14.29
|
|
%
|
9.16
|
|
%
|
Common equity tier 1
capital (to risk
weighted assets)(5)
|
18.98
|
|
%
|
18.20
|
|
%
|
18.54
|
|
%
|
20.61
|
|
%
|
11.80
|
|
%
|
Tier 1 leverage
(core) capital (to adjusted
tangible assets)(5)
|
13.43
|
|
%
|
14.31
|
|
%
|
14.56
|
|
%
|
15.71
|
|
%
|
9.33
|
|
%
|
Tier 1 risk-based
capital (to risk weighted
assets)(5)
|
18.98
|
|
%
|
18.20
|
|
%
|
18.54
|
|
%
|
20.61
|
|
%
|
11.80
|
|
%
|
Total risk-based
capital (to risk weighted
assets)(5)
|
20.07
|
|
%
|
19.14
|
|
%
|
19.46
|
|
%
|
21.53
|
|
%
|
12.64
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
full-service offices
|
12
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
Full-time equivalent
employees
|
172
|
|
|
172
|
|
|
166
|
|
|
163
|
|
|
166
|
|
|
|
|
|
|
(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-second-quarter-2020-financial-results-301099150.html
SOURCE Richmond Mutual Bancorporation, Inc.