RICHMOND, Ind., Oct. 19,
2023 /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 $1.9 million, or $0.19 diluted earnings per share, for the third
quarter of 2023, compared to net income of $2.7 million, or $0.26 diluted earnings per share, for the second
quarter of 2023, and net income of $3.2
million, or $0.29 diluted
earnings per share, for the third quarter of 2022.
President's Comments
Garry Kleer, Chairman, President
and Chief Executive Officer, commented, "Our net interest margin
and overall profitability continue to be hampered by the current
interest rate environment as the Federal Reserve's Open Market
Committee raised its targeted federal funds rate an additional 25
basis points in July of 2023, hitting a 17-year high of 5.25-5.50
percent. In contrast, the Fed was holding the federal funds rate at
around zero as recently as the first quarter of 2022. In spite of
the challenges imposed by the current interest rate environment, we
were able to continue growing loans and deposits and maintain
profitability. Furthermore, credit quality remained stable with
nonperforming loans and leases totaling 0.74% of total loans and
leases at September 30, 2023."
Third Quarter Performance Highlights:
- Assets totaled $1.4 billion both
at September 30, 2023 and
June 30, 2023, and totaled
$1.3 billion at December 31, 2022.
- Loans and leases, net of allowance for credit losses, totaled
$1.1 billion at September 30, 2023, compared to $1.0 billion at June 30,
2023, and $961.7 million at
December 31, 2022.
- Nonperforming loans and leases totaled $8.0 million, or 0.74% of total loans and leases,
at September 30, 2023, compared to
$8.5 million, or 0.81% of total loans
and leases, at June 30, 2023, and
$9.2 million, or 0.94% at
December 31, 2022.
- The allowance for credit losses totaled $15.5 million, or 1.43% of total loans and leases
outstanding, at September 30, 2023,
compared to $15.4 million, or 1.45%
of total loans and leases outstanding, at June 30, 2023. The allowance for loan and lease
losses totaled $12.4 million, or
1.27% of total loans and leases outstanding, at December 31, 2022. On January 1, 2023, the Bank adopted the accounting
standard referred to as Current Expected Credit Loss ("CECL"),
which resulted in a one-time adjustment from equity into the
allowance for credit losses and the allowance for off-balance sheet
commitments in the amount of $3.8
million, net of tax.
- The provision for credit losses totaled $50,000 in the quarter ended September 30, 2023, compared to $8,000 in the quarter ended June 30, 2023, and $200,000 in the third quarter of 2022.
- Deposits totaled $1.1 billion at
September 30, 2023, compared to
$1.0 billion at both June 30, 2023 and December
31, 2022. At September 30,
2023, noninterest-bearing deposits totaled $115.6 million, or 11.0% of total deposits,
compared to $104.7 million, or 10.1%
of total deposits at June 30, 2023,
and $106.4 million, or 10.6% of total
deposits at December 31, 2022.
- Stockholders' equity totaled $118.6
million at September 30, 2023,
compared to $130.8 million at
June 30, 2023, and $133.0 million at December
31, 2022. The Company's equity to assets ratio was 8.34% at
September 30, 2023.
- Net interest income decreased $206,000, or 2.2%, to $9.1
million for the three months ended September 30, 2023, compared to net interest
income of $9.3 million for the prior
quarter, and decreased $1.4 million,
or 13.2%, from $10.5 million for the
comparable quarter in 2022.
- Annualized net interest margin was 2.66% for the current
quarter, compared to 2.77% in the preceding quarter and 3.39% the
third quarter a year ago.
- The Company repurchased 148,546 shares of common stock at an
average price of $11.39 per share
during the quarter ended September 30,
2023.
- The Bank's Tier 1 capital to total assets was 10.71%, well in
excess of all regulatory requirements at September 30, 2023.
Income Statement Summary
Net interest income before the provision for credit losses
decreased $206,000, or 2.2%, to
$9.1 million in the third quarter of
2023, compared to $9.3 million in the
second quarter of 2023, and decreased $1.4
million, or 13.2%, from $10.5
million in the third quarter of 2022. The decrease from the
second quarter of 2023 was due to an 18 basis point decrease in the
average interest rate spread, partially offset by a $27.9 million increase in average interest
earning assets. The decrease from the comparable quarter in
2022 was due to a 99 basis point decrease the average interest rate
spread, partially offset by a $134.5
million increase in average interest earning assets.
Since March 2022, in response to
inflation, the Federal Open Market Committee ("FOMC") of the
Federal Reserve System has increased the target range for the
federal funds rate by 500 basis points, including 25 basis points
during the third quarter of 2023, to a range of 5.25% to 5.50%.
While net interest income benefited from the repricing impact of
the higher interest rate environment on earning asset yields, the
benefits were offset by the higher cost of interest-bearing deposit
accounts and borrowings, which tend to be shorter in duration than
our assets and re-price or reset faster than assets.
Interest income increased $1.2
million, or 7.3%, to $17.4
million during the quarter ended September 30, 2023, compared to the quarter ended
June 30, 2023, and increased
$4.2 million, or 32.2%, compared to
the quarter ended September 30,
2022.
Interest income on loans and leases increased $1.2 million, or 8.3%, to $15.3 million for the quarter ended September 30, 2023, compared to $14.1 million in the second quarter of 2023, due
to a $39.9 million increase in the
average balance of loans and leases, and an increase of 23 basis
points to 5.71% in the average yield earned on loans and leases.
Interest income on loans and leases increased $4.0 million, or 35.1%, in the third quarter of
2023 compared to the third quarter of 2022, due to an increase in
the average balance of loans and leases of $160.4 million, and an increase of 73 basis
points in the average yield earned on loans and leases.
Interest income on investment securities, excluding FHLB stock,
decreased $8,000, or 0.4%, to
$1.8 million during the quarter ended
September 30, 2023, compared to the
quarter ended June 30, 2023, and
increased $91,000, or 5.0%, from the
comparable quarter in 2022. The decrease in interest income on
investment securities, excluding FHLB stock, in the third quarter
of 2023 from the second quarter of 2023 was due to a $10.5 million decrease in the average balance,
partially offset by an eight basis point increase in the average
yield earned on investment securities. The increase in interest on
investment securities, excluding FHLB stock, in the third quarter
of 2023 from the third quarter of 2022 was due to a 34 basis point
increase in the average yield earned on investment securities,
partially offset by a $27.7 million
decrease in average balance of investment securities. Dividends on
FHLB stock increased $59,000, or
32.8%, during the quarter ended September
30, 2023 compared to the quarter ended June 30, 2023, and increased $118,000, or 97.5%, compared to the quarter ended
September 30, 2022. Interest income
on cash and cash equivalents decreased $33,000, or 23.8%, during the quarter ended
September 30, 2023, compared to the
quarter ended June 30, 2023, and
increased $66,000, or 187.0%,
compared to the quarter ended September
30, 2022. The decrease in interest income on cash and
cash equivalents in the third quarter of 2023 from the second
quarter of 2023 was due to decrease of $2.3
million in the average balance, along with a 31 basis point
decrease in the average yield. The increase in interest income on
cash and cash equivalents in the third quarter of 2023 from the
third quarter of 2022 was due to a 245 basis point increase in the
average yield and a $649,000 increase
in the average balance of cash and cash equivalents.
Interest expense increased $1.4
million, or 20.3%, to $8.3
million for the quarter ended September 30, 2023, compared to the quarter ended
June 30, 2023, and increased
$5.6 million, or 211.8%, compared to
the quarter ended September 30, 2022.
Interest expense on deposits increased $774,000, or 14.0%, to $6.3 million for the quarter ended September 30, 2023, compared to the previous
quarter and increased $4.5 million,
or 251.2%, from the comparable quarter in 2022. The increase in
interest expense on deposits from the previous quarter was
primarily due to a 34 basis points increase in the average rate
paid on interest-bearing deposits. The increase from the comparable
quarter in 2022 was due to an increase of $103.1 million in average balance of, and a 183
basis point increase in the average rate paid on, interest-bearing
deposits. The average rate paid on interest-bearing deposits was
2.69% for the quarter ended September 30,
2023, compared to 2.35% and 0.86% for the quarters ended
June 30, 2023 and September 30, 2022, respectively.
Interest expense on FHLB borrowings increased $623,000, or 46.3%, to $2.0 million for the third quarter of 2023
compared to the previous quarter and increased $1.1 million, or 129.2%, from the comparable
quarter in 2022 primarily due to increases in the average rate paid
on FHLB borrowings and, to a lesser extent, an increase in the
average balance of outstanding borrowings. The average balance of
FHLB borrowings totaled $224.8
million during the quarter ended September 30, 2023, compared to $197.1 million and $182.5
million for the quarters ended June
30, 2023, and September 30, 2022, respectively. The
average rate paid on FHLB borrowings was 3.50% for the quarter
ended September 30, 2023, 2.73% for
June 30, 2023, and 1.88% for the
third quarter of 2022.
Annualized net interest margin decreased to 2.66% for the third
quarter of 2023, compared to 2.77% for the second quarter of 2023
and 3.39% for the third quarter of 2022. The decrease in the net
interest margin for the third quarter of 2023 compared to the
second quarter of 2023 and the comparable quarter in 2022 was
primarily due to the rate paid on interest-bearing liabilities
increasing faster than the yield on interest-earning
assets.
The provision for credit losses totaled $50,000 for the three months ended September 30, 2023, compared to $8,000 during the quarter ended June 30, 2023 and $200,000 for the quarter ended September 30, 2022. Net charge-offs during the
third quarter of 2023 were $299,000,
compared to net charge-offs of $215,000 during the second quarter of 2023 and
net charge-offs of $25,000 in the
third quarter of 2022. Uncertainties relating to the level of our
allowance for credit losses remains heightened as a result of
continued concern about a potential recession due to inflation,
rising interest rates, stock market volatility and overall
geopolitical tensions.
Noninterest income decreased $20,000, or 1.7%, to $1.2
million for the quarter ended September 30, 2023 compared to the quarter ended
June 30, 2023, and decreased
$25,000, or 2.1%, from the comparable
quarter in 2022. The decrease in noninterest income in the third
quarter of 2023 compared to the second quarter of 2023 primarily
resulted from a decrease in net gains on loan and lease sales,
partially offset by an increase in other income. Net gains on loan
and lease sales decreased $65,000, or
41.9%, to $90,000 for the quarter
ended September 30, 2023 compared to
the previous quarter due to increased mortgage rates causing
decreased mortgage banking activity. Other income increased
$54,000, or 16.5%, to $379,000 for the quarter ended September 30, 2023 compared to the prior quarter
due to fees earned from our participation in a loan hedging program
with a correspondent bank, along with increased wealth management
income. Card fee income decreased $10,000, or 3.1%, to $304,000 for the third quarter of 2023 as
compared to the prior quarter. The decrease in noninterest income
from the comparable quarter in 2022 was due to decreases in loan
and lease servicing fees and net gains on loan and lease sales,
partially offset by increases in other income and service charges
on deposit accounts. Loan and lease servicing fees decreased
$124,000, or 52.8%, to $111,000 for the quarter ended September 30, 2023 as compared to the comparable
quarter in 2022 due to a recovery of $114,000 of mortgage servicing rights recorded in
the third quarter of 2022 and not replicated in the current
quarter. Net gains on loan and lease sales decreased $27,000, or 22.9% during third quarter of 2023
compared to the third quarter of 2022 due to decreased mortgage
banking activity. Other income increased $106,000, or 38.6%, for the third quarter of 2023
compared to the same quarter in 2022 primarily due to a reduction
of letter of credit fees recognized in the third quarter of 2022,
along with increased wealth management income in the third quarter
of 2023. Service fees on deposit accounts increased $15,000, or 5.7%, in the third quarter of 2023
from the comparable quarter in 2022. Card fee income increased
$6,000, or 1.9%, in the third quarter
of 2023 compared to the comparable quarter in 2022.
Total noninterest expense increased $678,000, or 9.2%, to $8.0
million for the three months ended September 30, 2023, compared to the second
quarter of 2023, and increased $291,000, or 3.8%, compared to the same period in
2022. Salaries and employee benefits increased $105,000, or 2.5%, to $4.4
million for the quarter ended September 30, 2023, compared to the second
quarter of 2023, and decreased $333,000, or 7.1%, compared to the quarter ended
September 30, 2022. The increase in
salaries and benefits in the third quarter of 2023 from the second
quarter of 2023 was primarily due to increased group insurance
expenses and retirement plan contributions. The decrease in
salaries and benefits in the third quarter of 2023 compared to the
third quarter of 2022 was primarily due to decreased bonus expense.
Deposit insurance expense increased $88,000, or 45.8%, for the quarter ended
September 30, 2023, compared to the
second quarter of 2023 primarily due to changes in the asset and
deposit mix, and increased $194,000,
or 225.6%, from the comparable quarter in 2022 also primarily due
to a change in the asset and deposit mix. Equipment expenses
increased $9,000 or 3.4%, during the
third quarter of 2023 as compared to the prior quarter, and
decreased $42,000, or 13.4%, compared
to the comparable quarter in 2022. Data processing fees increased
$32,000, or 3.9%, to $854,000 for the quarter ended September 30, 2023 compared to the second quarter
of 2023, and increased $110,000, or
14.8%, compared to the quarter ended September 30, 2022. The increase during the third
quarter of 2023 as compared to the third quarter of 2022 was
primarily due to increased software and online services expenses.
Legal and professional fees increased $172,000, or 48.1%, in the third quarter of 2023
compared to the prior quarter, and increased $152,000, or 40.3%, from the third quarter of
2022. The increase in legal and professional fees in the third
quarter of 2023 from the prior quarter and the comparable quarter
of 2022 was primarily due to increased accounting service expenses
and other professional fees. Other expenses increased $237,000, or 25.8%, in the third quarter of 2023
compared to the prior quarter, and increased $188,000, or 19.5%, compared to the same quarter
of 2022. The increase in other expenses in the third quarter of
2023 compared to the second quarter of 2023 and the third quarter
of 2022 primarily was due to an increase in losses due to
fraud of $95,000 and
$91,000, respectively. The increase
in other expenses in the third quarter of 2023 from the comparable
quarter in 2022 was primarily due to increased credit bureau
expenses of $31,000 and an increase
in losses due to fraud of $91,000.
Income tax expense decreased $201,000 during the three months ended
September 30, 2023 compared to the
quarter ended June 30, 2023, and
decreased $342,000 compared to the
quarter ended September 30, 2022, due
to a lower level of pre-tax income compared to the first quarter of
2023 and the second quarter of 2022. The effective tax rate
for the third quarter of 2023 was 12.3% compared to 15.0% in the
second quarter of 2023, and 16.3% in the third quarter a year ago.
The decrease in the effective tax rate was a result of the use of a
captive insurance company, which allows the Company to assume more
control over insurance risks and resulted in a more tax-effective
structure.
Balance Sheet Summary
Total assets increased $94.3
million, or 7.1%, to $1.4
billion at September 30, 2023
from December 31, 2022. The increase
was primarily the result of a $105.2
million, or 10.9%, increase in loans and leases, net of
allowance for credit losses, to $1.1
billion at September 30, 2023,
partially offset by a decrease of $22.2
million, or 7.6%, in investment securities to $269.4 million at September 30, 2023.
The increase in loans and leases was attributable to an increase
in commercial real estate loans, direct financing leases and
residential mortgage loans of $47.6
million, $21.1 million and
$14.4 million, respectively.
Investment securities decreased primarily due to a $12.6 million mark-to-market adjustment on the
investment portfolio, as well as maturities and principal
repayments on investment securities exceeding purchases of new
securities.
Nonperforming loans and leases, consisting of nonaccrual loans
and leases and accruing loans and leases more than 90 days past
due, totaled $8.0 million, or 0.74%
of total loans and leases, at September 30,
2023, compared to $9.2
million, or 0.94%, at December 31,
2022. Accruing loans past due more than 90 days totaled
$1.6 million at September 30, 2023, compared to $3.2 million at December
31, 2022.
On January 1, 2023, the Bank
adopted the accounting standard referred to as the current expected
credit loss, or CECL. As a result of the change in methodology from
the incurred loss method to the CECL method, on January 1, 2023 the Company recorded a one-time
adjustment from equity into the allowance for credit losses in the
amount of $3.8 million, net of tax.
The allowance for credit losses totaled $15.5 million, or 1.43% of total loans and leases
outstanding at September 30, 2023. At
December 31, 2022, the allowance for
loan and lease losses totaled $12.4
million, or 1.27% of total loans and leases outstanding.
Additionally, as a part of the CECL adoption, the Bank established
an allowance for off-balance sheet commitments. This allowance,
which is reported in other liabilities, totaled $1.7 million at September
30, 2023. Net charge-offs during the first nine months of
2023 were $436,000 compared to net
charge-offs of $152,000 during the
comparable period of 2022.
Management regularly analyzes conditions within its geographic
markets and evaluates its loan and lease portfolio. The Company
evaluated its exposure to potential credit losses as of
September 30, 2023, which evaluation
included consideration of a potential recession due to inflation,
rising interest rates, and stock market volatility. Credit
metrics are being reviewed and stress testing is being performed on
the loan portfolio on an ongoing basis.
Total deposits increased $48.6
million, or 4.8%, to $1.1
billion at September 30, 2023,
compared to December 31, 2022,
primarily due to an increase in brokered time deposits of
$44.4 million and other time deposits
of $37.4 million, partially offset by
a decrease in savings and money market accounts of $31.1 million. Management attributes the shift in
funds to customers taking advantage of higher rates being paid on
time deposits in 2023 as a result of interest rate hikes enacted by
the Federal Reserve. Brokered time deposits totaled $302.3 million, or 28.7% of total deposits, at
September 30, 2023.
Noninterest-bearing demand deposits increased $9.2 million to $115.6
million at September 30, 2023
compared to $106.4 million at
December 31, 2022, and totaled 11.0%
of total deposits at September 30,
2023.
Stockholders' equity totaled $118.6
million at September 30, 2023,
a decrease of $14.3 million, or
10.8%, from December 31, 2022. The
decrease in stockholders' equity primarily was the result of the
repurchase of $5.3 million of Company
common stock, an increase in Accumulated Other Comprehensive Loss
("AOCL") of $10.0 million, the
payment of $4.5 million in dividends
to Company stockholders and the one-time adjustment to retained
earnings of $3.8 million for the
adoption of CECL during the first quarter, partially offset by
$7.5 million in net income. The
increase in AOCL is primarily due to the decline in mark-to-market
values associated with our available-for-sale investment securities
portfolio. At December 31, 2022, the
available for sale portfolio had a net unrealized loss of
$63.0 million compared to a net
unrealized loss of $75.6 million at
September 30, 2023. The AOCL impact
to equity, after tax effecting the unrealized loss, was
$59.7 million at September 30, 2023 compared to $49.8 million at December
31, 2022. This decline in value from December 31, 2022 to September 30, 2023 is due to interest rate
changes and not due to credit quality.
During the quarter ended September 30,
2023, the Company repurchased a total of 148,546 shares of
Company common stock at an average price of $11.39 per share. As of September 30, 2023, the Company had approximately
959,611 shares available for repurchase under its existing stock
repurchase program. Subsequent to quarter end, the Company
repurchased an additional 21,008 shares.
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. 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.
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: potential
adverse impacts to economic conditions in our local market areas,
other markets where the Company has lending relationships, or other
aspects of the Company's business operations or financial markets,
including, without limitation, as a result of employment levels,
labor shortages and the effects of inflation, a potential recession
or slowed economic growth; changes in the interest rate
environment, including the recent increases in the Federal Reserve
benchmark rate and duration at which such increased interest rate
levels are maintained, which could adversely affect our revenues
and expenses, the value of assets and obligations, and the
availability and cost of capital and liquidity; the impact of
continuing high inflation and the current and future monetary
policies of the Federal Reserve in response thereto; the effects of
any federal government shutdown; the impact of bank failures or
adverse developments at other banks and related negative press
about the banking industry in general on investor and depositor
sentiment; 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, including maintaining the
confidence of depositors; 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; disruptions,
security breaches, or other adverse events, failures or
interruptions in, or attacks on, our information technology systems
or on the third-party vendors who perform several of our critical
processing functions; the effects of climate change, severe weather
events, natural disasters, pandemics, epidemics and other public
health crises, acts of war or terrorism, and other external events
on our business; and other factors described in the Company's
latest Annual Report on Form 10-K and Quarterly Reports on Form
10-Q and other reports filed with or furnished to the Securities
and Exchange Commission - that are available on our website at
www.firstbankrichmond.com and on the SEC's website at
www.sec.gov.
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.
|
Financial Highlights
(unaudited)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
SELECTED OPERATIONS
DATA:
|
September
30,
2023
|
|
June 30,
2023
|
|
September
30,
2022
|
|
September
30,
2023
|
|
September
30,
2022
|
|
(In thousands, except
for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
$
17,413
|
|
$
16,223
|
|
$
13,170
|
|
$
48,829
|
|
$
37,560
|
|
Interest
expense
|
8,286
|
|
6,890
|
|
2,657
|
|
20,498
|
|
6,445
|
|
Net interest
income
|
9,127
|
|
9,333
|
|
10,513
|
|
28,331
|
|
31,115
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit
losses(1)
|
50
|
|
8
|
|
200
|
|
228
|
|
600
|
|
Net interest income
after provision for credit losses
|
9,077
|
|
9,325
|
|
10,313
|
|
28,103
|
|
30,515
|
|
Noninterest
income
|
1,159
|
|
1,178
|
|
1,184
|
|
3,433
|
|
3,475
|
|
Noninterest
expense
|
8,013
|
|
7,336
|
|
7,723
|
|
22,710
|
|
22,214
|
|
Income before income
tax expense
|
2,223
|
|
3,167
|
|
3,774
|
|
8,826
|
|
11,776
|
|
Income tax
provision
|
274
|
|
475
|
|
616
|
|
1,281
|
|
2,115
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
1,949
|
|
$
2,692
|
|
$
3,158
|
|
$
7,545
|
|
$
9,661
|
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
11,300
|
|
11,449
|
|
11,802
|
|
11,300
|
|
11,802
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
10,359
|
|
10,403
|
|
10,638
|
|
10,453
|
|
10,815
|
|
Diluted
|
10,382
|
|
10,476
|
|
10,836
|
|
10,514
|
|
11,147
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.19
|
|
$
0.26
|
|
$
0.30
|
|
$
0.72
|
|
$
0.89
|
|
Diluted
|
$
0.19
|
|
$
0.26
|
|
$
0.29
|
|
$
0.72
|
|
$
0.87
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
As a result of the
adoption of CECL on January 1, 2023, the provision for credit
losses calculated prior to that date was determined using the
previously applied
incurred loss methodology rather than the current expected credit
losses methodology, and as a result the amounts are not directly
comparable.
|
|
SELECTED FINANCIAL
CONDITION DATA:
|
September
30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
(In thousands, except
for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
1,422,913
|
|
$
1,409,187
|
|
$
1,362,174
|
|
$
1,328,620
|
|
Cash and cash
equivalents
|
20,652
|
|
17,464
|
|
17,390
|
|
15,922
|
|
Interest-bearing time
deposits
|
245
|
|
490
|
|
490
|
|
490
|
|
Investment
securities
|
269,363
|
|
287,096
|
|
297,498
|
|
291,572
|
|
Loans and leases, net
of allowance for credit losses(1)
|
1,066,892
|
|
1,043,024
|
|
989,117
|
|
961,691
|
|
Loans held for
sale
|
568
|
|
340
|
|
—
|
|
474
|
|
Premises and equipment,
net
|
13,342
|
|
13,539
|
|
13,493
|
|
13,668
|
|
Federal Home Loan Bank
stock
|
11,297
|
|
10,802
|
|
10,082
|
|
9,947
|
|
Other assets
|
40,554
|
|
36,432
|
|
34,104
|
|
34,856
|
|
Deposits
|
1,053,909
|
|
1,039,573
|
|
1,030,034
|
|
1,005,261
|
|
Borrowings
|
238,000
|
|
226,000
|
|
183,500
|
|
180,000
|
|
Total stockholder's
equity
|
118,632
|
|
130,829
|
|
136,146
|
|
132,978
|
|
|
|
|
|
|
|
|
|
Book value
(GAAP)
|
$
118,632
|
|
$
130,829
|
|
$
136,146
|
|
$
132,978
|
|
Tangible book value
(non-GAAP)
|
118,632
|
|
130,829
|
|
136,146
|
|
132,978
|
|
Book value per share
(GAAP)
|
10.50
|
|
11.43
|
|
11.65
|
|
11.28
|
|
Tangible book value per
share (non-GAAP)
|
10.50
|
|
11.43
|
|
11.65
|
|
11.28
|
|
|
|
|
|
|
|
|
|
(1)
|
As a result of the
adoption of CECL on January 1, 2023, the allowance amounts
calculated prior to that date were determined using the previously
applied incurred loss methodology rather than the current expected
credit losses methodology, and as a result the balances are not
directly comparable.
|
The following table summarizes information relating to our loan
and lease portfolio at the dates indicated:
|
(In
thousands)
|
September
30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
Commercial
mortgage
|
$
345,714
|
|
$
341,475
|
|
$
321,314
|
|
$
298,087
|
|
Commercial and
industrial
|
111,450
|
|
114,162
|
|
97,880
|
|
100,420
|
|
Construction and
development
|
140,651
|
|
117,029
|
|
125,521
|
|
139,923
|
|
Multi-family
|
135,409
|
|
141,545
|
|
132,407
|
|
124,914
|
|
Residential
mortgage
|
160,488
|
|
159,753
|
|
152,376
|
|
146,129
|
|
Home equity
|
10,776
|
|
10,492
|
|
10,923
|
|
11,010
|
|
Direct financing
leases
|
154,520
|
|
152,181
|
|
143,281
|
|
133,469
|
|
Consumer
|
24,176
|
|
22,657
|
|
21,604
|
|
21,048
|
|
|
|
|
|
|
|
|
|
Total loans and
leases
|
$
1,083,184
|
|
$
1,059,294
|
|
$
1,005,306
|
|
$
975,000
|
The following table summarizes information relating to our
deposits at the dates indicated:
|
(In
thousands)
|
September
30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
demand
|
$
115,632
|
|
$
104,691
|
|
$
96,827
|
|
$
106,415
|
|
Interest-bearing
demand
|
146,118
|
|
149,770
|
|
148,798
|
|
157,429
|
|
Savings and money
market
|
249,575
|
|
267,624
|
|
275,006
|
|
280,666
|
|
Non-brokered time
deposits
|
240,297
|
|
226,493
|
|
218,262
|
|
202,862
|
|
Brokered time
deposits
|
302,287
|
|
290,995
|
|
291,141
|
|
257,889
|
|
|
|
|
|
|
|
|
|
Total
deposits
|
$
1,053,909
|
|
$
1,039,573
|
|
$
1,030,034
|
|
$
1,005,261
|
Average Balances, Interest and Average Yields/Cost.
The following tables set forth for the periods indicated,
information regarding average balances of assets and liabilities as
well as the total dollar amounts of interest income from average
interest-earning assets and interest expense on average
interest-bearing liabilities, resultant yields, interest rate
spread, net interest margin (otherwise known as net yield on
interest-earning assets), and the ratio of average interest-earning
assets to average interest-bearing liabilities. Average balances
have been calculated using daily balances. Non-accruing loans have
been included in the table as loans carrying a zero yield. Loan
fees are included in interest income on loans and are not
material.
|
Three Months Ended
September 30,
|
|
2023
|
|
2022
|
|
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
|
$ 1,069,049
|
|
$
15,270
|
|
5.71 %
|
|
$
908,621
|
|
$ 11,302
|
|
4.98 %
|
|
Securities
|
283,600
|
|
1,802
|
|
2.54 %
|
|
311,273
|
|
1,711
|
|
2.20 %
|
|
FHLB stock
|
10,923
|
|
239
|
|
8.75 %
|
|
9,795
|
|
121
|
|
4.94 %
|
|
Cash and cash
equivalents and other
|
10,371
|
|
102
|
|
3.93 %
|
|
9,722
|
|
36
|
|
1.48 %
|
|
Total interest-earning
assets
|
1,373,943
|
|
17,413
|
|
5.07 %
|
|
1,239,411
|
|
13,170
|
|
4.25 %
|
|
Non-earning
assets
|
45,175
|
|
|
|
|
|
40,970
|
|
|
|
|
|
Total
assets
|
1,419,118
|
|
|
|
|
|
1,280,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and money
market accounts
|
260,386
|
|
1,184
|
|
1.82 %
|
|
280,799
|
|
569
|
|
0.81 %
|
|
Interest-bearing
checking accounts
|
146,084
|
|
283
|
|
0.77 %
|
|
169,306
|
|
163
|
|
0.39 %
|
|
Certificate
accounts
|
532,721
|
|
4,851
|
|
3.64 %
|
|
385,943
|
|
1,067
|
|
1.11 %
|
|
Borrowings
|
224,750
|
|
1,968
|
|
3.50 %
|
|
182,533
|
|
858
|
|
1.88 %
|
|
Total interest-bearing
liabilities
|
1,163,941
|
|
8,286
|
|
2.85 %
|
|
1,018,581
|
|
2,657
|
|
1.04 %
|
|
Noninterest-bearing
demand deposits
|
112,109
|
|
|
|
|
|
112,558
|
|
|
|
|
|
Other
liabilities
|
13,945
|
|
|
|
|
|
7,863
|
|
|
|
|
|
Stockholders'
equity
|
129,123
|
|
|
|
|
|
141,379
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
1,419,118
|
|
|
|
|
|
1,280,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
$
9,127
|
|
|
|
|
|
$ 10,513
|
|
|
|
Net earning
assets
|
$
210,002
|
|
|
|
|
|
$
220,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate
spread(1)
|
|
|
|
|
2.22 %
|
|
|
|
|
|
3.21 %
|
|
Net interest
margin(2)
|
|
|
|
|
2.66 %
|
|
|
|
|
|
3.39 %
|
|
Average
interest-earning assets to average interest-bearing
liabilities
|
118.04 %
|
|
|
|
|
|
121.68 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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,
|
|
2023
|
|
2022
|
|
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
|
$ 1,027,782
|
|
$
42,562
|
|
5.52 %
|
|
$
878,334
|
|
$ 32,250
|
|
4.90 %
|
|
Securities
|
290,820
|
|
5,408
|
|
2.48 %
|
|
329,185
|
|
4,953
|
|
2.01 %
|
|
FHLB stock
|
10,369
|
|
557
|
|
7.16 %
|
|
9,827
|
|
282
|
|
3.83 %
|
|
Cash and cash
equivalents and other
|
10,877
|
|
302
|
|
3.70 %
|
|
14,527
|
|
75
|
|
0.69 %
|
|
Total interest-earning
assets
|
1,339,848
|
|
48,829
|
|
4.86 %
|
|
1,231,873
|
|
37,560
|
|
4.07 %
|
|
Non-earning
assets
|
44,335
|
|
|
|
|
|
39,571
|
|
|
|
|
|
Total
assets
|
1,384,183
|
|
|
|
|
|
1,271,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and money
market accounts
|
275,936
|
|
3,537
|
|
1.71 %
|
|
280,304
|
|
1,294
|
|
0.62 %
|
|
Interest-bearing
checking accounts
|
148,539
|
|
708
|
|
0.64 %
|
|
168,195
|
|
371
|
|
0.29 %
|
|
Certificate
accounts
|
503,093
|
|
11,644
|
|
3.09 %
|
|
370,249
|
|
2,657
|
|
0.96 %
|
|
Borrowings
|
206,897
|
|
4,609
|
|
2.97 %
|
|
178,762
|
|
2,123
|
|
1.58 %
|
|
Total interest-bearing
liabilities
|
1,134,465
|
|
20,498
|
|
2.41 %
|
|
997,510
|
|
6,445
|
|
0.86 %
|
|
Noninterest-bearing
demand deposits
|
104,260
|
|
|
|
|
|
112,448
|
|
|
|
|
|
Other
liabilities
|
13,757
|
|
|
|
|
|
7,050
|
|
|
|
|
|
Stockholders'
equity
|
131,701
|
|
|
|
|
|
154,436
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
1,384,183
|
|
|
|
|
|
1,271,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
$
28,331
|
|
|
|
|
|
$ 31,115
|
|
|
|
Net earning
assets
|
$
205,383
|
|
|
|
|
|
$
234,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate
spread(1)
|
|
|
|
|
2.45 %
|
|
|
|
|
|
3.21 %
|
|
Net interest
margin(2)
|
|
|
|
|
2.82 %
|
|
|
|
|
|
3.37 %
|
|
Average
interest-earning assets to average interest-bearing
liabilities
|
118.10 %
|
|
|
|
|
|
123.49 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
Selected Financial
Ratios and Other Data:
|
September
30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
September
30,
2022
|
|
Performance
ratios:
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (annualized)
|
0.55 %
|
|
0.77 %
|
|
0.86 %
|
|
1.01 %
|
|
0.99 %
|
|
Return on average
equity (annualized)
|
6.04 %
|
|
8.05 %
|
|
8.78 %
|
|
10.40 %
|
|
8.94 %
|
|
Yield on
interest-earning assets
|
5.07 %
|
|
4.82 %
|
|
4.68 %
|
|
4.52 %
|
|
4.25 %
|
|
Rate paid on
interest-bearing liabilities
|
2.85 %
|
|
2.42 %
|
|
1.94 %
|
|
1.42 %
|
|
1.04 %
|
|
Average interest rate
spread
|
2.22 %
|
|
2.40 %
|
|
2.74 %
|
|
3.10 %
|
|
3.21 %
|
|
Net interest margin
(annualized)(1)
|
2.66 %
|
|
2.77 %
|
|
3.04 %
|
|
3.33 %
|
|
3.39 %
|
|
Operating expense to
average total assets
(annualized)
|
2.26 %
|
|
2.11 %
|
|
2.19 %
|
|
2.43 %
|
|
2.41 %
|
|
Efficiency
ratio(2)
|
77.91 %
|
|
69.79 %
|
|
67.12 %
|
|
66.66 %
|
|
66.03 %
|
|
Average
interest-earning assets to average
interest-bearing liabilities
|
118.04 %
|
|
118.15 %
|
|
118.13 %
|
|
118.97 %
|
|
121.68 %
|
|
Asset quality
ratios:
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets
to total assets(3)
|
0.60 %
|
|
0.62 %
|
|
0.66 %
|
|
0.69 %
|
|
0.67 %
|
|
Non-performing loans
and leases to total gross
loans and leases(4)
|
0.74 %
|
|
0.81 %
|
|
0.86 %
|
|
0.94 %
|
|
0.92 %
|
|
Allowance for credit
losses to non-performing
loans and leases(4)(5)
|
194.70 %
|
|
180.44 %
|
|
179.80 %
|
|
135.28 %
|
|
147.12 %
|
|
Allowance for credit
losses to total loans and
leases(5)
|
1.43 %
|
|
1.45 %
|
|
1.54 %
|
|
1.27 %
|
|
1.35 %
|
|
Net (recoveries)
charge-offs (annualized) to
average outstanding loans and leases during
the period
|
0.11 %
|
|
0.08 %
|
|
(0.03) %
|
|
0.06 %
|
|
0.01 %
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
Equity to total assets
at end of period
|
8.34 %
|
|
9.28 %
|
|
9.99 %
|
|
10.01 %
|
|
9.77 %
|
|
Average equity to
average assets
|
9.10 %
|
|
9.62 %
|
|
9.85 %
|
|
9.70 %
|
|
11.04 %
|
|
Common equity tier 1
capital (to risk weighted
assets)(6)
|
12.48 %
|
|
12.77 %
|
|
13.14 %
|
|
13.23 %
|
|
13.59 %
|
|
Tier 1 leverage (core)
capital (to adjusted
tangible assets)(6)
|
10.71 %
|
|
10.81 %
|
|
10.95 %
|
|
11.20 %
|
|
11.29 %
|
|
Tier 1 risk-based
capital (to risk weighted
assets)(6)
|
12.48 %
|
|
12.77 %
|
|
13.14 %
|
|
13.23 %
|
|
13.59 %
|
|
Total risk-based
capital (to risk weighted
assets)(6)
|
13.73 %
|
|
14.02 %
|
|
14.39 %
|
|
14.31 %
|
|
14.74 %
|
|
Other
data:
|
|
|
|
|
|
|
|
|
|
|
Number of full-service
offices
|
12
|
|
12
|
|
12
|
|
12
|
|
12
|
|
Full-time equivalent
employees
|
176
|
|
183
|
|
181
|
|
181
|
|
184
|
|
(1)
|
Net interest income
divided by average interest-earning assets.
|
|
(2)
|
Total noninterest
expenses as a percentage of net interest income and total
noninterest income.
|
|
(3)
|
Non-performing assets
consist of nonaccrual loans and leases, accruing loans and leases
more than 90 days past due and foreclosed assets.
|
|
(4)
|
Non-performing loans
and leases consist of nonaccrual loans and leases and accruing
loans and leases more than 90 days past due.
|
|
(5)
|
As a result of the
adoption of CECL on January 1, 2023, the allowance for credit
losses calculated prior to that date was determined using the
previously applied
incurred loss methodology rather than the current expected credit
losses methodology, and as a result the balances are not directly
comparable.
|
|
(6)
|
Capital ratios are for
First Bank Richmond.
|
View original
content:https://www.prnewswire.com/news-releases/richmond-mutual-bancorporation-inc-announces-2023-third-quarter-financial-results-301962702.html
SOURCE Richmond Mutual Bancorporation, Inc.