RICHMOND, Ind., Oct. 22, 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 $0.21 diluted earnings per share, for the third
quarter of 2020, compared to net income of $2.5 million, or $0.20 diluted earnings per share, for the second
quarter of 2020, and a net loss of $3.3
million, or $(0.26) diluted
earnings per share, for the third quarter of 2019. Net income
was $7.5 million, or $0.60 diluted earnings per share for the first
nine months of 2020, compared to a net loss of $1.5 million for the comparable period in
2019. There is no comparison of earnings per share to the
first nine months 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, "During the third quarter
of 2020 we continued to monitor and assist our clients and others
in our communities to provide support during these difficult times.
I would like to thank our employees who have demonstrated their
commitment to our communities by continuing to provide vital
banking services and assistance."
Kleer added, "I am pleased to report that our asset quality
metrics remain strong. Nevertheless, we will continue to
proactively monitor modified loans and other loans we consider at
heightened risk and will continue to revisit our allowance for loan
losses for probable COVID-19 pandemic related credit weakness as
pressure on asset quality in future quarters may require additional
provisions."
Our Response to COVID-19 Pandemic
Loan Programs. During the third 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.
Through the conclusion of the PPP on August
8, 2020, we had funded 482 PPP loans totaling $64.9 million. We began to process
applications for PPP loan forgiveness beginning in the third
quarter of 2020 and will continue working with our clients to
assist them with accessing other borrowing options, including SBA
and other government sponsored lending programs, as appropriate. As
of September 30, 2020, SBA had not
approved any applications filed by the Bank on behalf of its
borrowers for loan forgiveness under the PPP.
Loan Modifications. We offer payment and
financial relief programs for borrowers impacted by COVID-19,
primarily through loan and lease payment deferments of principal
and interest up to 90 days, although requests for payment relief
during the third quarter have significantly declined. We
continue to monitor our loan portfolio and strive to work with our
customers and communities. Deferred loans are re-evaluated at
the end of the initial deferral period and will either return to
the original loan terms or be reassessed at that time to determine
if a further modification should be granted and if a downgrade in
risk rating is appropriate. At September 30, 2020, the number of loans and
leases granted payment deferrals was 70, representing $35.3 million in loans and leases outstanding,
down from 752 loans and leases at June 30,
2020 totaling $175.1
million. We continue to waive certain loan late fees
and have suspended foreclosure proceedings. We believe the
steps we are taking are necessary to effectively manage our
portfolio and assist our clients through the ongoing uncertainty
surrounding the duration, impact and government response to the
COVID-19 pandemic.
The following table summarizes information relating to loan
deferments at quarter ended September 30,
2020 and June 30, 2020:
|
|
September 30,
2020
|
|
June 30,
2020
|
($ in
thousands)
|
|
Number of
Loans
|
|
Balance
|
|
Number of
Loans
|
|
Balance
|
Commercial
mortgage
|
|
24
|
|
$
|
27,767
|
|
70
|
|
$
|
98,010
|
Commercial and
industrial
|
|
2
|
|
788
|
|
27
|
|
12,692
|
Construction and
development
|
|
2
|
|
226
|
|
3
|
|
10,098
|
Multi-Family
|
|
2
|
|
2,105
|
|
13
|
|
21,197
|
Residential
mortgage
|
|
16
|
|
3,347
|
|
88
|
|
11,198
|
Home
equity
|
|
1
|
|
14
|
|
7
|
|
215
|
Direct financing
leases
|
|
23
|
|
1,063
|
|
507
|
|
21,080
|
Consumer
|
|
–
|
|
–
|
|
37
|
|
597
|
Total
Loans
|
|
70
|
|
$
|
35,310
|
|
752
|
|
$
|
175,087
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes information relating to
hospitality loan deferments (which are included in the table above)
at quarter ended September 30, 2020
and June 30, 2020:
|
|
September 30,
2020
|
|
June 30,
2020
|
|
($ in
thousands)
|
|
Number of
Loans
|
|
Balance
|
Percent of
total loans in
category
|
|
Number of
Loans
|
|
Balance
|
Percent of
total loans in
category
|
|
Restaurants
|
|
–
|
|
$
|
–
|
0.00
|
%
|
|
7
|
|
$
|
1,356
|
24.64
|
%
|
Hotels
|
|
13
|
|
24,384
|
38.05
|
%
|
|
19
|
|
44,455
|
72.58
|
%
|
Total
Loans
|
|
13
|
|
$
|
24,384
|
34.83
|
%
|
|
26
|
|
$
|
45,811
|
68.62
|
%
|
Certain customers have requested an additional 90-day
deferment. Shown in the following table is a summary of
currently deferred loans with more than one round of deferments
granted as of September 30, 2020.
($ in
thousands)
|
|
Number of
Loans
|
|
Amount
|
Commercial
mortgage
|
|
14
|
|
$
|
20,459
|
Commercial and
industrial
|
|
2
|
|
788
|
Construction and
development
|
|
–
|
|
–
|
Multi-Family
|
|
2
|
|
2,105
|
Residential
mortgage
|
|
7
|
|
1,303
|
Home
equity
|
|
–
|
|
–
|
Direct financing
leases
|
|
18
|
|
857
|
Consumer
|
|
–
|
|
–
|
Total
Loans
|
|
43
|
|
$
|
25,512
|
|
|
|
|
|
|
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
protect the safety of our clients and our personnel. 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 September 30, 2020, the Company's stockholders'
equity totaled $191.7 million, a
$3.9 million, or 2.1% increase from
year-end 2019. The Company's equity to asset ratio was 18.17% at
September 30, 2020. At September 30, 2020, the Bank's Tier I capital to
total assets was 13.87% and the Bank's capital was well in excess
of all regulatory requirements.
Third Quarter Performance
Highlights:
- Assets totaled $1.1 billion at
September 30, 2020 and June 30, 2020, compared to $986.0 million at December
31, 2019.
- Loans and leases, net of allowance, totaled $750.6 million at September 30, 2020, compared to $752.9 million at June 30,
2020 and $687.3 million at
December 31, 2019.
- Nonperforming loans and leases totaled $3.4 million, or 0.44% of total loans and leases,
at September 30, 2020, compared to
$4.3 million, or 0.57% of total loans
and leases, at June 30, 2020 and
$3.8 million, or 0.55% of total loans
and leases, at December 31,
2019.
- The allowance for loan and lease losses totaled $9.8 million, or 1.29% of total loans and leases
outstanding, at September 30, 2020,
compared to $8.5 million, or 1.12% of
total loans and leases outstanding at June
30, 2020 and $7.1 million, or
1.02% of total loans and leases outstanding, at December 31, 2019. The provision for loan and
leases losses totaled $1.3 million
both in the current quarter and the preceding quarter of 2020,
compared to $705,000 in the quarter
ended September 30, 2019.
- Deposits totaled $663.1 million
at September 30, 2020, compared to
$739.1 million at June 30, 2020 and $617.2
million at December 31, 2019.
At September 30, 2020, noninterest
bearing deposits totaled $88.7
million or 13.4% of total deposits, compared to $89.9 million or 12.2% of total deposits at
June 30, 2020 and $60.3 million or 9.8% of total deposits at
December 31, 2019.
- The Bank remains a "well-capitalized" institution for
regulatory capital purposes at September 30,
2020.
- Annualized net interest margin was 3.18% for the current
quarter, compared to 3.03% in the preceding quarter and 3.31% in
the third quarter a year ago.
Balance Sheet Summary
Total assets increased $68.8
million, or 7.0%, to $1.1
billion at September 30, 2020,
from $986.0 million at December 31, 2019. The increase was primarily a
result of a $63.4 million, or 9.2%,
increase in loans and leases, net of allowance, to $750.6 million at September 30, 2020 from $687.3 million at December
31, 2019, and a $26.5 million,
or 12.2%, increase in investment securities to $244.2 million at September 30, 2020, compared to $217.7 million at December
31, 2019. The increase in loans and leases was
attributable to PPP loans, which totaled $64.9 million at September
30, 2020. Cash and cash equivalents decreased
$23.9 million, or 58.9%, to
$16.7 million at September 30, 2020, from $40.6 million at December
31, 2019.
Nonperforming loans and leases, consisting of nonaccrual loans
and leases and accruing loans and leases more than 90 days past
due, totaled $3.4 million or 0.44% of
total loans and leases at September 30,
2020, compared to $4.3 million
or 0.57% of total loans at June 30,
2020 and $3.8 million or 0.55%
of total loans and leases at December 31,
2019. The decrease in nonperforming loans and leases
was primarily the result of the resolution of a $1.0 million multi-family loan. Accruing
loans past due more than 90 days at September 30, 2020 totaled $2.4 million, compared to $3.3 million at June 30,
2020 and $2.6 million at
December 31, 2019.
The allowance for loan and lease losses increased $1.3 million, or 15.1%, to $9.8 million at September
30, 2020 from $8.5 million at
June 30, 2020, and increased
$2.7 million, or 38.4%, from
$7.1 million at December 31, 2019. At September 30, 2020, the allowance for loan and
lease losses totaled 1.29% of total loans and leases outstanding
compared to 1.12% at June 30, 2020
and 1.02% at December 31, 2019.
The allowance for loan and lease losses to total loans at
September 30, 2020 and June 30, 2020 increased 12 basis points and 10
basis points, respectively, if PPP loans, which totaled
$64.9 million and $64.3 million at September
30, 2020 and June 30, 2020,
respectively, and are 100% guaranteed by the SBA, are excluded from
the calculation. Net charge-offs during the first
nine months of 2020 were $110,000 or
0.02% of average loans and leases outstanding, compared to net
charge-offs of $419,000, or 0.08% of
average loans and leases outstanding during the first nine 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
September 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 not
fully known at this time. 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 decreased $76.1
million, or 10.3%, to $663.1
million at September 30, 2020,
compared to $739.1 million at
June 30, 2020 and increased
$45.8 million, or 7.4%, from
$617.2 million at December 31, 2019. The decrease in deposits from
the linked quarter primarily was due to the utilization of PPP
funds previously deposited by borrowers into their accounts at the
Bank. This increase in deposits at September
30, 2020 compared to December 31,
2019 primarily was due to 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 decreased
$88.3 million to $32.4 million, or 4.9% of total deposits, at
September 30, 2020 compared to
$120.7 million, or 16.3% of total
deposits, at June 30, 2020 and
decreased $24.2 million from
$56.7 million, or 9.2% of total
deposits, at December 31, 2019.
The decrease in brokered deposits was due to increases in retail
deposits and deposits related to PPP loans which reduced the need
for brokered deposits. Demand deposit and savings accounts
increased $71.9 million to
$407.7 million at September 30, 2020, compared to $335.8 million at December
31, 2019. At September
30, 2020, noninterest bearing deposits totaled $88.7 million or 13.4% of total deposits,
compared to $89.9 million or 12.2% of
total deposits at June 30, 2020 and
$60.3 million or 9.8% of total
deposits at December 31, 2019.
Stockholders' equity totaled $191.7
million at September 30, 2020,
a decrease of $4.5 million or 2.3%
from June 30, 2020 and an increase of
$3.9 million or 2.1% from
December 31, 2019. The decrease in
stockholders' equity from the linked quarter primarily was the
result of the repurchase of $6.6
million of Company common stock and the payment of
$605,000 in dividends to Company
stockholders during the current quarter, partially offset by
$2.5 million of net income earned
during the third quarter of 2020. The increase in
stockholders' equity from year end primarily was the result of net
income of $7.5 million in the first
nine months of 2020 and a $3.8
million improvement in accumulated other comprehensive
income, partially offset by the cash dividends paid to shareholders
and $6.6 million in stock repurchases
noted above. During the quarter ended September 30, 2020, the Company repurchased a
total of 582,079 shares of Company common stock at an average price
of $11.37 per share pursuant to the
Company's stock repurchase program announced on July 8, 2020, leaving 94,252 shares available for
future repurchase under the stock repurchase program.
Subsequent to quarter end through October
21, 2020, the Company purchased an additional 63,417 shares,
leaving 30,835 shares available for future repurchase.
Income Statement Summary
Net interest income before the provision for loan and lease
losses increased $251,000, or 3.1%,
to $8.3 million in the third quarter
of 2020, compared to $8.0 million in
the second quarter of 2020 and increased $365,000, or 4.6%, from $7.9 million in the third quarter of 2019.
The increase over the second quarter of 2020 was primarily driven
by a higher net interest margin, partially offset by a decrease in
net earning assets. The increase in the third quarter of 2020
compared to the same period in 2019 was primarily attributable to a
higher level of net interest-earning assets, partially offset by a
decrease in the net interest margin.
Interest income increased $84,000,
or 0.8%, to $10.6 million during the
quarter ended September 30, 2020,
compared to the quarter ended June 30,
2020 and decreased $224,000,
or 2.1%, compared to $10.8 million
during the quarter ended September
30, 2019. Interest income on loans and leases
increased $248,000, or 2.7%, to
$9.6 million for the quarter ended
September 30, 2020, compared to
$9.3 million for the second quarter
of 2020, and increased $238,000, or
2.6%, from $9.3 million for the
comparable quarter in 2019, due to higher average loan and
investment securities balances. The average outstanding loan
and lease balances were $756.3
million for the quarter ended September 30, 2020, compared to $747.9 million for the quarter ended June 30, 2020 and $698.9
million for the quarter ended September 30, 2019. The average yield on
loans was 5.05% for the quarter ended September 30, 2020, compared to 4.98% and 5.33%
for the quarters ended June 30, 2020
and September 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 in
the third quarter of 2020 was 2.70%, including the recognition of
the net deferred fees, resulting in a negative impact to the net
interest margin of 22 basis points during the quarter ended
September 30, 2020. The average yield
on PPP loans in the second quarter of 2020 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 $161,000, or 13.7%, to
$1.0 million during the quarter ended
September 30, 2020, compared to
$1.2 million during the quarter ended
June 30, 2020, and increased
$155,000, or 18.0%, from $862,000 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 $256.2 million for the quarter
ended September 30, 2020, compared to
$256.6 million and $166.3 million for the quarters ended
June 30, 2020 and September 30, 2019, respectively. The
average yield on investment securities, including FHLB stock, was
1.59% for the third quarter of 2020, compared to 1.84% and 2.07%
for the previous quarter of 2020 and the third quarter of 2019,
respectively. Interest income earned on cash and cash
equivalents decreased to $9,000 in
the third quarter of 2020 compared to $11,000 in the second quarter of 2020 and
$627,000 in the comparable quarter of
2019. The decrease in interest income earned on cash and cash
equivalents in the third quarter of 2020 compared to the comparable
quarter of 2019 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, as well as a $61.5
million decline in the average balance of cash and cash
equivalents outstanding during the comparable periods.
Interest expense decreased $166,000, or 6.7%, to $2.3
million for the quarter ended September 30, 2020, compared to $2.5 million the second quarter of 2020, and
decreased $590,000, or 20.3%, from
$2.9 million for the quarter ended
September 30, 2019. Interest
expense on deposits decreased $159,000, or 9.3%, to $1.5
million for the quarter ended September 30, 2020, from $1.7 million in the previous quarter and
decreased $488,000, or 24.0%, from
$2.0 million for the comparable
quarter in 2019. This decrease in interest expense on
deposits from the previous quarter was attributable to the lower
weighted average rate paid on interest-bearing deposits and lower
average deposit balances. The decrease in interest expense on
deposits from 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 1.04% for the quarter ended September 30, 2020, compared to 1.13% and 1.44%
for the quarters ended June 30, 2020
and September 30, 2019,
respectively. Interest expense on FHLB borrowings decreased
$7,000, or 0.9%, to $763,000 for the third quarter of 2020 compared
to $770,000 during the previous
quarter and decreased $102,000, or
11.8%, from $865,000 for the
comparable quarter in 2019. The average balance of FHLB
borrowings totaled $180.9 million
during the quarter ended September 30,
2020, compared to $181.8
million and $147.3 million for
the quarters ended June 30, 2020 and
September 30, 2019,
respectively. The weighted average rate paid on FHLB
borrowings was 1.69% for the quarters ended September 30, 2020 and June 30, 2020, and 2.35% for the comparable
quarter in 2019.
Annualized net interest margin was 3.18% for the third quarter
of 2020, compared to 3.03% and 3.31% for the second quarter of 2020
and third quarter of 2019, respectively. The increase in the
net interest margin for the third quarter of 2020 compared to the
second quarter was due to increased yields on loans and leases, and
FHLB stock along with a seven basis point decline in the rate paid
on interest bearing liabilities. The decline in the net
interest margin for the current quarter compared to the comparable
quarter in 2019 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 both the three
months ended September 30, 2020 and
June 30, 2020 totaled $1.3 million, compared to $705,000 for the quarter ended September 30, 2019. The continued elevated
level of provision for loan and lease losses 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 third quarter of 2020 were $12,000, compared to net charge-offs of
$106,000 during the second quarter of
2020 and net charge-offs of $90,000
in the third 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 $73,000, or 3.5%, to $2.2
million for the quarter ended September 30, 2020 compared to $2.1 million for the quarter ended June 30, 2020, and increased $1.0 million, or 87.9%, from $1.1 million 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 $297,000, or 28.8%, to
$1.3 million during the third quarter
of 2020, compared to $1.0 million
during the second quarter of 2020 and increased $1.1 million, or 473.4%, from $232,000 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
decreased $343,000 to a loss of
$42,000 for the quarter ended
September 30, 2020 compared to income
of $301,000 for the quarter ended
June 30, 2020 and decreased
$110,000 from income of $68,000 for the comparable quarter in 2019.
In the third quarter of 2020, the Company recorded a recovery to
the value of its mortgage servicing rights of $6,000, compared to a $296,000 recovery recorded in the second quarter
of 2020, and no impairment recovery or charge recorded in the third
quarter of 2019. Other loan fees decreased $71,000, or 29.0%, to $174,000 in the third quarter of 2020 compared to
the quarter ended June 30, 2020, and
decreased $37,000, or 17.7%, over the
comparable quarter in 2019. The decrease during the current
quarter compared to the prior quarter was primarily due to letter
of credit fees of $58,000 and
interest rate modification fees of $76,000 that were earned in the second quarter of
2020. The decrease in the third quarter of 2020 compared to
the third quarter of 2019 was attributable to increased loan
processing fees of $80,000, or 96.3%,
offset by decreased miscellaneous loan fees of $118,000, or 91.8%. Service fees on deposit
accounts increased $45,000, or 42.6%,
to $151,000 for the quarter ended
September 30, 2020, compared to
$106,000 for the second quarter of
2020, and decreased $145,000, or
49.1% from $296,000 for the quarter
ended September 30, 2019. The
increase in the third quarter of 2020 was the result of the Company
re-instituting its overdraft fees effective September 1, 2020. The decrease in the
third quarter of 2020 versus the comparable period in 2019 was the
result of the Company's waiving of overdraft fees for the first two
months of the third quarter of 2020, and only re-instituting
overdraft fees in September 2020.
Total noninterest expense increased $337,000, or 6.0%, to $6.0
million for the three months ended September 30, 2020 compared to $5.6 million for the second quarter of 2020, and
decreased $6.5 million, or 52.1%,
from $12.5 million for the same
period in 2019. Salaries and employee benefits increased
$377,000, or 11.5%, to $3.6 million for the quarter ended September 30, 2020, compared to $3.3 million in the second quarter of 2020, and
decreased $193,000, or 5.0%, from
$3.8 million for the quarter ended
September 30, 2019. The
increase from the second quarter of 2020 was primarily due to
increases in retirement costs associated with administrative fees
of the frozen defined benefit plan as well as Pension Benefit
Guarantee Corporation fees, while the decrease from the comparable
period in 2019 was primarily due to lower retirement costs in the
third quarter of 2020 compared to the third quarter of 2019 as a
result of the freezing of the Company's defined benefit plan.
Deposit insurance expense increased $20,000, or 33.3% to $80,000, in the third quarter of 2020 compared to
the second quarter of 2020, and increased $56,000, or 233.6% compared to the third quarter
of 2019 as a result of the Bank having previously utilized all of
its remaining small bank credit awarded by the
FDIC. Advertising expense declined $9,000 or 11.4%, in the third quarter of 2020
compared to the prior quarter, and $127,000 or 64.1% from the comparable quarter of
2019. This reflects a reduction of advertising occurring in
2020. The Company did not record any expense attributable to
the First Bank Richmond Charitable Foundation ("Foundation") in the
third quarter of 2020. In the third quarter of 2019, the
Company incurred a $6.3 million
expense associated with the establishment and funding of the
Foundation.
Income tax expense decreased $19,000 during the three months ended
September 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
$1.5 million during the three months
ended September 30, 2020, compared to
the same period in 2019, primarily due to a $7.3 million increase in pre-tax income. The
effective tax rate for the third quarter of 2020 was 19.5% compared
to 20.2% for the second quarter of 2020 and a 21.7% 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
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
SELECTED
OPERATIONS DATA:
|
|
September 30,
2020
|
|
June 30,
2020
|
|
September 30,
2019
|
|
|
|
September
30,
2020
|
|
September
30,
2019
|
(In thousands, except
for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
10,583
|
|
$
|
10,498
|
|
$
|
10,807
|
|
|
|
$
|
31,533
|
|
$
|
30,962
|
Interest
expense
|
|
2,308
|
|
2,474
|
|
2,898
|
|
|
|
7,347
|
|
8,450
|
Net
interest income
|
|
8,275
|
|
8,024
|
|
7,909
|
|
|
|
24,186
|
|
22,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
|
1,300
|
|
1,320
|
|
705
|
|
|
|
2,830
|
|
1,715
|
Net interest income
after provision
|
|
6,975
|
|
6,704
|
|
7,204
|
|
|
|
21,356
|
|
20,797
|
Noninterest
income
|
|
2,156
|
|
2,083
|
|
1,147
|
|
|
|
5,191
|
|
2,951
|
Noninterest
expense
|
|
5,985
|
|
5,648
|
|
12,500
|
|
|
|
17,156
|
|
25,909
|
Income (loss) before
income tax expense
(benefit)
|
|
3,146
|
|
3,139
|
|
(4,149)
|
|
|
|
9,391
|
|
(2,161)
|
Income tax provision
(benefit)
|
|
614
|
|
633
|
|
(898)
|
|
|
|
1,901
|
|
(618)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
2,532
|
|
$
|
2,506
|
|
$
|
(3,250)
|
|
|
|
$
|
7,490
|
|
$
|
(1,543)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
|
12,945
|
|
13,527
|
|
13,527
|
|
|
|
12,945
|
|
13,527
|
Weighted average
shares outstanding
|
|
12,281
|
|
12,481
|
|
12,474
|
|
|
|
12,409
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic(1)
|
|
0.21
|
|
0.20
|
|
(0.26)
|
|
|
|
0.60
|
|
|
Diluted(1)
|
|
0.21
|
|
0.20
|
|
(0.26)
|
|
|
|
0.60
|
|
|
|
|
(1)
|
Earnings (loss) per
share for the three months ended September 30, 2019 is for
the period from July 2, 2019 to September 30, 2019.
|
SELECTED FINANCIAL
CONDITION DATA:
|
September 30,
2020
|
|
June
30, 2020
|
|
March
31, 2020
|
|
December 31,
2019
|
(In thousands,
except for per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
1,054,890
|
|
$
|
1,140,213
|
|
$
|
1,007,616
|
|
$
|
986,042
|
Cash and cash
equivalents
|
16,698
|
|
110,606
|
|
27,456
|
|
40,597
|
Investment
securities
|
244,164
|
|
234,524
|
|
252,661
|
|
217,701
|
Loans and leases, net
of allowance
|
750,646
|
|
752,923
|
|
687,054
|
|
687,258
|
Premises and
equipment, net
|
14,758
|
|
14,440
|
|
14,007
|
|
14,087
|
Federal Home Loan
Bank stock
|
9,170
|
|
9,080
|
|
8,631
|
|
7,600
|
Other
assets
|
19,454
|
|
18,640
|
|
17,807
|
|
18,798
|
Deposits
|
663,057
|
|
739,131
|
|
605,235
|
|
617,219
|
Borrowings
|
176,000
|
|
180,000
|
|
182,000
|
|
154,000
|
Total stockholder's
equity
|
191,674
|
|
196,136
|
|
193,196
|
|
187,787
|
|
|
|
|
|
|
|
|
Book value
(GAAP)
|
$
|
191,674
|
|
$
|
196,136
|
|
$
|
193,196
|
|
$
|
187,787
|
Tangible book value
(non-GAAP)
|
191,674
|
|
196,136
|
|
193,196
|
|
187,787
|
Book value per
share
|
14.81
|
|
14.50
|
|
14.28
|
|
13.88
|
Tangible book value
per share
|
14.81
|
|
14.50
|
|
14.28
|
|
13.88
|
The following table summarizes information relating to our loan
portfolio at the dates indicated:
|
|
September
30,
|
June
30,
|
March
31,
|
December
31,
|
(In
thousands)
|
|
2020
|
2020
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
|
Commercial
mortgage
|
$
|
245,651
|
|
$
|
242,036
|
|
$
|
238,878
|
|
$
|
229,410
|
|
Commercial and
industrial
|
|
141,142
|
|
141,184
|
|
76,002
|
|
84,549
|
|
Construction and
development
|
|
55,694
|
|
62,372
|
|
58,051
|
|
53,426
|
|
Multi-family
|
|
63,237
|
|
58,709
|
|
58,101
|
|
66,002
|
|
Residential
mortgage
|
|
122,456
|
|
126,146
|
|
132,662
|
|
131,294
|
|
Home
equity
|
|
6,211
|
|
6,522
|
|
6,606
|
|
6,996
|
|
Direct financing
leases
|
|
115,108
|
|
114,352
|
|
111,691
|
|
109,592
|
|
Consumer
|
|
13,101
|
|
12,550
|
|
12,828
|
|
13,534
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and
leases
|
$
|
762,600
|
|
$
|
763,871
|
|
$
|
694,819
|
|
$
|
694,803
|
|
The following table summarizes information relating to changes
in deposits at the dates indicated:
|
September
30,
|
June
30,
|
|
March
31,
|
|
December 31,
|
(In
thousands)
|
|
2020
|
|
2020
|
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
demand
|
$
|
88,714
|
|
$
|
89,922
|
|
$
|
62,491
|
|
60,297
|
Interest-bearing
demand
|
|
126,811
|
|
120,643
|
|
106,804
|
|
103,978
|
Savings and money
market
|
|
192,178
|
|
185,365
|
|
162,935
|
|
171,529
|
Non-brokered time
deposits
|
|
222,946
|
|
222,513
|
|
225,047
|
|
224,765
|
Brokered time
deposits
|
|
32,408
|
|
120,688
|
|
47,958
|
|
56,650
|
|
|
|
|
|
|
|
|
|
Total
deposits
|
$
|
663,057
|
|
$
|
739,131
|
|
$
|
605,235
|
|
617,219
|
|
Three Months Ended
September 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
|
$
|
756,307
|
|
|
$
|
9,557
|
|
5.05
|
%
|
|
$
|
698,924
|
|
|
$
|
|
9,318
|
|
5.33
|
%
|
Securities
|
|
247,113
|
|
|
|
891
|
|
1.44
|
%
|
|
|
158,701
|
|
|
|
|
750
|
|
1.89
|
%
|
FHLB
stock
|
|
9,083
|
|
|
|
126
|
|
5.55
|
%
|
|
|
7,580
|
|
|
|
|
112
|
|
5.91
|
%
|
Cash and cash
equivalents and other
|
|
28,096
|
|
|
|
9
|
|
0.13
|
%
|
|
|
89,550
|
|
|
|
|
627
|
|
2.80
|
%
|
Total
interest-earning assets
|
|
1,040,599
|
|
|
|
10,583
|
|
4.07
|
%
|
|
|
954,755
|
|
|
|
|
10,807
|
|
4.53
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and
money market accounts
|
|
189,848
|
|
|
|
243
|
|
0.51
|
%
|
|
|
163,660
|
|
|
|
|
286
|
|
0.70
|
%
|
Interest-bearing checking accounts
|
|
123,271
|
|
|
|
68
|
|
0.22
|
%
|
|
|
104,951
|
|
|
|
|
115
|
|
0.44
|
%
|
Certificate
accounts
|
|
282,306
|
|
|
|
1,234
|
|
1.75
|
%
|
|
|
297,848
|
|
|
|
|
1,632
|
|
2.19
|
%
|
Borrowings
|
|
180,913
|
|
|
|
763
|
|
1.69
|
%
|
|
|
147,302
|
|
|
|
|
865
|
|
2.35
|
%
|
Total
interest-bearing liabilities
|
|
776,338
|
|
|
|
2,308
|
|
1.19
|
%
|
|
|
713,761
|
|
|
|
|
2,898
|
|
1.62
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
|
$
|
8,275
|
|
|
|
|
|
|
|
|
$
|
|
7,909
|
|
|
|
Net earning
assets
|
$
|
264,261
|
|
|
|
|
|
|
|
|
$
|
240,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate
spread(1)
|
|
|
|
|
|
|
|
2.88
|
%
|
|
|
|
|
|
|
|
|
|
2.91
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin(2)
|
|
|
|
|
|
|
|
3.18
|
%
|
|
|
|
|
|
|
|
|
|
3.31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest-earning assets to
average
interest-bearing liabilities
|
|
134.04
|
%
|
|
|
|
|
|
|
|
|
133.76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net interest rate
spread represents the difference between the weighted average yield
earned on interest-earning assets and the weighted average rate
paid on interest-bearing liabilities.
|
(2)
|
Net interest margin
represents net interest income divided by average total
interest-earning assets.
|
|
Nine Months Ended
September 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
|
$
|
691,890
|
|
|
$
|
27,928
|
|
5.38
|
%
|
|
$
|
684,844
|
|
|
$
|
|
27,247
|
|
5.30
|
%
|
Securities
|
|
239,696
|
|
|
|
3,252
|
|
1.81
|
%
|
|
|
149,064
|
|
|
|
|
2,465
|
|
2.20
|
%
|
FHLB
stock
|
|
8,681
|
|
|
|
207
|
|
3.18
|
%
|
|
|
7,140
|
|
|
|
|
296
|
|
5.53
|
%
|
Cash and cash
equivalents and other
|
|
38,355
|
|
|
|
146
|
|
0.51
|
%
|
|
|
56,949
|
|
|
|
|
954
|
|
2.23
|
%
|
Total
interest-earning assets
|
|
978,622
|
|
|
|
31,533
|
|
4.30
|
%
|
|
|
897,997
|
|
|
|
|
30,962
|
|
4.60
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and
money market accounts
|
|
178,699
|
|
|
|
787
|
|
0.59
|
%
|
|
|
168,800
|
|
|
|
|
914
|
|
0.72
|
%
|
Interest-bearing checking accounts
|
|
114,205
|
|
|
|
216
|
|
0.25
|
%
|
|
|
102,221
|
|
|
|
|
278
|
|
0.36
|
%
|
Certificate
accounts
|
|
288,571
|
|
|
|
4,071
|
|
1.88
|
%
|
|
|
308,976
|
|
|
|
|
4,835
|
|
2.09
|
%
|
Borrowings
|
|
175,620
|
|
|
|
2,273
|
|
1.73
|
%
|
|
|
143,597
|
|
|
|
|
2,424
|
|
2.25
|
%
|
Total
interest-bearing liabilities
|
|
757,095
|
|
|
|
7,347
|
|
1.29
|
%
|
|
|
723,594
|
|
|
|
|
8,451
|
|
1.56
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
|
$
|
24,186
|
|
|
|
|
|
|
|
|
$
|
|
22,511
|
|
|
|
Net earning
assets
|
$
|
221,527
|
|
|
|
|
|
|
|
|
$
|
174,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate
spread(1)
|
|
|
|
|
|
|
|
3.01
|
%
|
|
|
|
|
|
|
|
|
|
3.04
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin(2)
|
|
|
|
|
|
|
|
3.30
|
%
|
|
|
|
|
|
|
|
|
|
3.34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest-earning assets to
average
interest-bearing liabilities
|
|
129.26
|
%
|
|
|
|
|
|
|
|
|
124.10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net interest rate
spread represents the difference between the weighted average yield
earned on interest-earning assets and the weighted average rate
paid on 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
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
March
31,
|
|
|
December
31,
|
|
|
September
30,
|
|
|
Selected Financial
Ratios and Other Data:
|
2020
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
|
Performance
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (annualized)
|
0.92
|
|
%
|
0.93
|
|
%
|
0.98
|
|
%
|
(5.17)
|
|
%
|
(1.28)
|
|
%
|
Return on average
equity (annualized)
|
5.22
|
|
%
|
5.15
|
|
%
|
5.15
|
|
%
|
(25.85)
|
|
%
|
(8.92)
|
|
%
|
Yield on
interest-earning assets
|
4.07
|
|
%
|
3.96
|
|
%
|
4.40
|
|
%
|
4.48
|
|
%
|
4.53
|
|
%
|
Rate paid on
interest-bearing liabilities
|
1.19
|
|
%
|
1.26
|
|
%
|
1.44
|
|
%
|
1.53
|
|
%
|
1.62
|
|
%
|
Average interest rate
spread
|
2.88
|
|
%
|
2.70
|
|
%
|
2.96
|
|
%
|
2.95
|
|
%
|
2.91
|
|
%
|
Net interest margin
(annualized)(1)
|
3.18
|
|
%
|
3.03
|
|
%
|
3.32
|
|
%
|
3.33
|
|
%
|
3.31
|
|
%
|
Operating expense to
average total assets (annualized)
|
2.18
|
|
%
|
2.10
|
|
%
|
2.22
|
|
%
|
10.35
|
|
%
|
4.90
|
|
%
|
Efficiency
ratio(2)
|
58.04
|
|
%
|
55.94
|
|
%
|
62.97
|
|
%
|
286.09
|
|
%
|
138.36
|
|
%
|
Average
interest-earning assets to average interest-bearing
liabilities
|
134.04
|
|
%
|
135.09
|
|
%
|
133.79
|
|
%
|
133.95
|
|
%
|
133.76
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets
to total assets(3)
|
0.32
|
|
%
|
0.38
|
|
%
|
0.43
|
|
%
|
0.39
|
|
%
|
0.44
|
|
%
|
Non-performing loans
and leases to total gross loans and leases(4)
|
0.44
|
|
%
|
0.57
|
|
%
|
0.61
|
|
%
|
0.55
|
|
%
|
0.59
|
|
%
|
Allowance for loan
and lease losses to non-performing loans and
leases(4)
|
290.88
|
|
%
|
197.47
|
|
%
|
171.23
|
|
%
|
185.97
|
|
%
|
166.90
|
|
%
|
Allowance for loan
and lease losses to total loans and leases
|
1.29
|
|
%
|
1.12
|
|
%
|
1.05
|
|
%
|
1.02
|
|
%
|
0.98
|
|
%
|
Net charge-offs
(annualized) to average outstanding loans and leases during the
period
|
0.01
|
|
%
|
0.06
|
|
%
|
0.00
|
|
%
|
0.40
|
|
%
|
0.05
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to total
assets at end of period
|
18.17
|
|
%
|
17.20
|
|
%
|
19.17
|
|
%
|
19.04
|
|
%
|
20.95
|
|
%
|
Average equity to
average assets
|
18.35
|
|
%
|
18.13
|
|
%
|
19.11
|
|
%
|
19.98
|
|
%
|
14.29
|
|
%
|
Common equity tier 1
capital (to risk weighted assets)(5)
|
18.89
|
|
%
|
18.98
|
|
%
|
18.20
|
|
%
|
18.54
|
|
%
|
20.61
|
|
%
|
Tier 1 leverage
(core) capital (to adjusted tangible
assets)(5)
|
13.87
|
|
%
|
13.43
|
|
%
|
14.31
|
|
%
|
14.56
|
|
%
|
15.71
|
|
%
|
Tier 1 risk-based
capital (to risk weighted assets)(5)
|
18.89
|
|
%
|
18.98
|
|
%
|
18.20
|
|
%
|
18.54
|
|
%
|
20.61
|
|
%
|
Total risk-based
capital (to risk weighted assets)(5)
|
20.13
|
|
%
|
20.07
|
|
%
|
19.14
|
|
%
|
19.46
|
|
%
|
21.53
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
full-service offices
|
12
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
Full-time equivalent
employees
|
170
|
|
|
172
|
|
|
172
|
|
|
166
|
|
|
163
|
|
|
|
|
|
|
(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-third-quarter-2020-financial-results-301158404.html
SOURCE Richmond Mutual Bancorporation, Inc.