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Richmond Mutual Bancorporation, Inc.

Richmond Mutual Bancorporation, Inc.RMBI決算レポート

Nasdaq · 金融 · 国有商業銀行

Richmond Mutual Bancorporation, Inc. is a U.S.-based bank holding company operating primarily in Indiana. It offers a full range of personal and commercial banking solutions including deposit accounts, mortgage loans, small business lending, and wealth management services, serving local retail consumers and small-to-medium enterprise clients via its regional branch network.

What changed in Richmond Mutual Bancorporation, Inc.'s 10-K — 2024 vs 2025

Top changes in Richmond Mutual Bancorporation, Inc.'s 2025 10-K

405 paragraphs added · 396 removed · 336 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

176 edited+26 added−26 removed237 unchanged
However, regulatory 15 agencies are not directly involved in the process for establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management. Allowance for Credit Losses .
However, regulatory agencies are not directly involved in the process for establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management. 15 Allowance for Credit Losses .
Federal Taxation. Richmond Mutual Bancorporation and First Bank Richmond are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. Our federal and state tax returns have not been audited for the past five years. Method of Accounting.
Richmond Mutual Bancorporation and First Bank Richmond are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. Our federal and state tax returns have not been audited for the past five years. Method of Accounting.
First Bank Richmond’s operations are also subject to state and federal laws applicable to credit and other transactions, such as the: • Truth in Lending Act, which requires lenders to disclose the terms and conditions of consumer credit; • Real Estate Settlement Procedures Act, which requires lenders to disclose the nature and costs of the real estate settlement process and prohibits specific practices, such as kickbacks, and places limitations upon the use of escrow accounts; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; and • Rules and regulations of the various federal and state agencies charged with the responsibility of implementing such federal and state laws.
First Bank Richmond’s operations are also subject to state and federal laws applicable to credit and other transactions, such as the: • Truth in Lending Act, which requires lenders to disclose the terms and conditions of consumer credit; 28 • Real Estate Settlement Procedures Act, which requires lenders to disclose the nature and costs of the real estate settlement process and prohibits specific practices, such as kickbacks, and places limitations upon the use of escrow accounts; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; and • Rules and regulations of the various federal and state agencies charged with the responsibility of implementing such federal and state laws.
Our regulators require that we classify loans and other assets, such as debt and equity securities considered to be of lesser quality, as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.
Classified Assets . Our regulators require that we classify loans and other assets, such as debt and equity securities considered to be of lesser quality, as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.
We conduct our leasing operations through First Federal Leasing, a division of First Bank Richmond. Our lease financing operation consists of direct financing leases which are used by commercial customers to finance purchases such as medical, computer and manufacturing equipment, audio/visual equipment, industrial assets, construction and transportation equipment, and a wide variety of other commercial equipment.
We conduct our leasing operations through First Federal Leasing, a division of First Bank Richmond. Our lease financing operation consists of direct financing leases which are used by commercial customers to finance purchases such as medical, computer and manufacturing equipment, audio/visual equipment, industrial assets, construction and 10 transportation equipment, and a wide variety of other commercial equipment.
We generally file a UCC-1 financing statement on all of our lease transactions to perfect our interest in the equipment, except in the case of (i) titled equipment, where we would require the title in lieu of the UCC financing statement, (ii) 11 transactions under $5,000 or (iii) for equipment with very little value, such as computer software.
We generally file a UCC-1 financing statement on all of our lease transactions to perfect our interest in the equipment, except in the case of (i) titled equipment, where we would require the title in lieu of the UCC financing statement, (ii) transactions under $5,000 or (iii) for equipment with very little value, such as computer software.
In accordance with our loan policy, we regularly review the problem loans in our portfolio to determine whether any loans require classification in accordance with applicable regulations. Loans are listed on the “watch list” initially because of emerging financial weaknesses even though the loan is currently performing as agreed, or if the loan possesses weaknesses although currently performing.
In accordance with our loan policy, we regularly review the problem loans in our portfolio to determine whether any loans require classification in accordance with applicable regulations. Loans are listed on the “watch list” initially because of emerging financial weaknesses even though the loan is currently performing as agreed, or if the loan possesses weaknesses 14 although currently performing.
We face additional competition for deposits from short-term money market funds, brokerage firms, mutual funds and insurance companies. We also compete with financial technology, or fintech companies. Recent technological advances and other changes have allowed parties to affect financial transactions that previously required the involvement of banks.
We face additional competition for deposits from short-term money market funds, brokerage firms, mutual funds and insurance companies. We also compete with financial technology (FinTech) companies. Recent technological advances and other changes have allowed parties to affect financial transactions that previously required the involvement of banks.
See “- Federal Banking Regulation — Capital Requirements” and “- Holding Company Regulation” for restrictions on dividends under federal law. Assessments. As an Indiana state-chartered commercial bank, First Bank Richmond is required to pay to the IDFI a general assessment fee in connection with the regulation and supervision of First Bank Richmond.
See “- Federal Banking Regulation — Capital Requirements” and “- Holding Company Regulation” for restrictions on dividends under federal law. 24 Assessments. As an Indiana state-chartered commercial bank, First Bank Richmond is required to pay to the IDFI a general assessment fee in connection with the regulation and supervision of First Bank Richmond.
Any material increase in the allowance for credit losses may adversely affect our financial condition and results of operations. For additional information regarding our allowance for credit losses, see "Note 5: Loans, Leases and Allowance" of the Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K. 17 Investment Activities General .
Any material increase in the allowance for credit losses may adversely affect our financial condition and results of operations. For additional information regarding our allowance for credit losses, see "Note 5: Loans, Leases and Allowance" of the Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K. Investment Activities General .
In addition to healthy base wages, additional programs include annual bonus opportunities, a Company augmented Employee Stock 31 Ownership Plan, Company matched 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, flexible work schedules, and employee assistance programs.
In addition to healthy base wages, additional programs include annual bonus opportunities, a Company augmented Employee Stock Ownership Plan, Company matched 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, flexible work schedules, and employee assistance programs.
Commercial construction loans are underwritten to either mature, or transition to a traditional amortizing loan, at the completion of the construction phase. The loan-to-value ratio on our commercial construction loans, as established by independent appraisal, typically will not exceed 80% of the appraised value on a completed basis or the cost of completion, whichever is less.
Commercial construction loans are underwritten to either mature, or transition to a traditional amortizing loan, at the completion of the construction phase. The loan-to-value ratio on our commercial construction loans, as established by independent appraisal, typically will not 9 exceed 80% of the appraised value on a completed basis or the cost of completion, whichever is less.
The sale of mortgage loans provides a source of non-interest income through the gain on sale, reduces our interest rate risk, provides a stream of servicing income, enhances liquidity and enables us to originate more loans at our current capital level than if we held the loans in our loan portfolio.
The sale of mortgage loans provides a source of non-interest income through the gain on sale, reduces our interest rate 5 risk, provides a stream of servicing income, enhances liquidity and enables us to originate more loans at our current capital level than if we held the loans in our loan portfolio.
First Insurance Management, Inc. was formed in 2022 as a pooled captive insurance company subsidiary of the Company, incorporated in the State of Nevada, for 23 the purpose of providing additional insurance coverage for the Company and its subsidiaries related to the operations of the Company for which insurance may not be economically feasible.
First Insurance Management, Inc. was formed in 2022 as a pooled captive insurance company subsidiary of the Company, incorporated in the State of Nevada, for the purpose of providing additional insurance coverage for the Company and its subsidiaries related to the operations of the Company for which insurance may not be economically feasible.
First Bank Richmond generates commercial, mortgage and consumer loans and leases and receives deposits from customers located primarily in Wayne and Shelby Counties, in Indiana and Shelby, Miami and Franklin (no deposits) Counties, in Ohio. We sometimes refer to these counties as our primary market area.
First Bank Richmond generates commercial, mortgage and consumer loans and leases and receives deposits from customers located primarily in Wayne and Shelby Counties, in Indiana and Shelby, Miami and Franklin Counties, in Ohio. We sometimes refer to these counties as our primary market area.
The objectives of our investment policy are to provide and maintain liquidity to meet deposit withdrawal and loan funding needs, to help mitigate interest rate and market risk, to diversify our assets, and to maximize the rate of return on invested funds within the context of our interest rate and credit risk objectives.
The objectives of our investment policy are to provide and maintain liquidity to meet deposit withdrawal and loan funding needs, mitigate interest rate and market risk, diversify assets, and maximize the rate of return on invested funds within the context of our interest rate and credit risk objectives.
Section 23B applies to “covered transactions” as well as to certain other transactions and requires that all such transactions be on terms substantially the same, or at least as favorable, to the institution or subsidiary as those provided to a non-affiliate.
Section 23B applies to “covered transactions” as well as to certain other transactions and requires that all such transactions be on terms 26 substantially the same, or at least as favorable, to the institution or subsidiary as those provided to a non-affiliate.
As such, Richmond Mutual Bancorporation is registered with the Federal Reserve Board and is subject to regulations, examinations, supervision and reporting requirements applicable to bank holding companies. In addition, the Federal Reserve Board has enforcement authority over Richmond Mutual Bancorporation and its non-bank subsidiaries.
As such, Richmond Mutual Bancorporation is registered with the Federal Reserve Board and is subject to regulations, examinations, supervision and reporting requirements applicable to bank holding 29 companies. In addition, the Federal Reserve Board has enforcement authority over Richmond Mutual Bancorporation and its non-bank subsidiaries.
A loan or lease may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan or lease is placed on nonaccrual status, unpaid interest credited to income is 13 reversed.
A loan or lease may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan or lease is placed on nonaccrual status, unpaid interest credited to income is reversed.
Commercial and Industrial Lending . We make secured and unsecured commercial and industrial loans, including commercial lines of credit, working capital loans, term loans, equipment financing, acquisition, expansion and development loans, letters of credit and other loan products, principally in our primary market area.
We make secured and unsecured commercial and industrial loans, including commercial lines of credit, working capital loans, term loans, equipment financing, acquisition, expansion and development loans, letters of credit and other loan products, principally in our primary market area.
First Bank Richmond’s board of directors has the responsibility for approving, on an annual basis, specific lending authority for individual officers, combinations of officers, or loan committees. 4 Loan Maturity and Repricing.
First Bank Richmond’s board of directors has the responsibility for approving, on an annual basis, specific lending authority for individual officers, combinations of officers, or loan committees. Loan Maturity and Repricing.
If the home equity loan is for home improvements, the improvements to be made to the property may be considered when calculating the 6 loan to value ratio. If the loan to value ratio on the property is sufficient, regardless of the improvements to be made, the proceeds may be disbursed directly to the borrower.
If the home equity loan is for home improvements, the improvements to be made to the property may be considered when calculating the loan to value ratio. If the loan to value ratio on the property is sufficient, regardless of the improvements to be made, the proceeds may be disbursed directly to the borrower.
In the event a loan is made on property that is not yet approved for the planned development or improvements, there is a 10 risk that necessary approvals will not be granted or will be delayed.
In the event a loan is made on property that is not yet approved for the planned development or improvements, there is a risk that necessary approvals will not be granted or will be delayed.
Information pertaining to us, including SEC filings, can be found by clicking the link on our sites called “About Us,” then scrolling down and clicking on the link called "Investor Relations."
Information pertaining to us, including SEC filings, can be found by clicking the link on our sites called “About Us,” then scrolling down and clicking on the link called "Investor Relations." 32
When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar 7 property and the borrower’s payment history with us and other financial institutions.
When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property and the borrower’s payment history with us and other financial institutions.
The Financial Accounting Standards Board has adopted a new accounting standard for US GAAP that was effective for us beginning in 2023. This standard, referred to as Current Expected Credit Loss, or CECL, requires FDIC-insured 25 institutions and their holding companies (banking organizations) to recognize credit losses expected over the life of certain financial assets.
The Financial Accounting Standards Board adopted a new accounting standard for US GAAP that was effective for us beginning in 2023. This standard, referred to as Current Expected Credit Loss, or CECL, requires FDIC-insured institutions and their holding companies (banking organizations) to recognize credit losses expected over the life of certain financial assets.
The CRA requires the Federal Deposit Insurance Corporation to provide a written evaluation of an institution’s CRA performance utilizing a four-tiered descriptive rating system. First Bank Richmond’s latest Federal Deposit Insurance Corporation CRA rating was “Satisfactory.” On October 24, 2023, the federal banking agencies, including the FDIC, issued a final rule designed to strengthen and modernize regulations implementing the CRA.
The CRA requires the Federal Deposit Insurance Corporation to provide a written evaluation of an institution’s CRA performance utilizing a four-tiered descriptive rating system. First Bank Richmond’s latest Federal Deposit Insurance Corporation CRA rating was “Satisfactory.” On October 24, 2023, the federal banking agencies, including the FDIC, issued a final rule intended to strengthen and modernize regulations implementing the CRA.
The following tables set forth certain information at December 31, 2024 regarding the dollar amount of loans maturing in our portfolio based on their contractual terms to maturity, but does not include scheduled payments or potential prepayments. Loans with scheduled maturities are reported in the maturity category in which the loan is due.
The following tables set forth certain information at December 31, 2025 regarding the dollar amount of loans maturing in our portfolio based on their contractual terms to maturity, but does not include scheduled payments or potential prepayments. Loans with scheduled maturities are reported in the maturity category in which the loan is due.
Our volume of real estate loan originations is influenced significantly by market interest rates, and, accordingly, the volume of our real estate loan originations can vary from period to period.
Our volume of real estate loan originations is influenced significantly by market interest rates, and, accordingly, the volume of our 11 real estate loan originations can vary from period to period.
Our investment securities are usually classified as available-for-sale; however, the purchasing officer has the option, at the time of purchase, to designate individual securities as held-to-maturity, available-for-sale, or trading. In April 2020, First Bank Richmond created a wholly-owned subsidiary, FB Richmond Holdings, Inc.
Our investment securities are usually classified as available-for-sale; however, the purchasing officer has the option, at the time of purchase, to designate individual securities as held-to-maturity, available-for-sale, or trading. In April 2020, First Bank Richmond established a wholly-owned subsidiary, FB Richmond Holdings, Inc.
Kleer brings outstanding leadership skills and a deep understanding of the local banking market and issues facing the banking industry. Bradley M. Glover (age 34). Mr. Glover is currently serving as Senior Vice President and Chief Financial Officer of Richmond Mutual Bancorporation and First Bank Richmond. Mr.
Kleer brings outstanding leadership skills and a deep understanding of the local banking market and issues facing the banking industry. Bradley M. Glover (age 35). Mr. Glover is currently serving as Senior Vice President and Chief Financial Officer of Richmond Mutual Bancorporation and First Bank Richmond. Mr.
Glover holds a BS in Accounting from Ball State University’s Miller College of Business and has been recognized by the Indiana Bankers Association for completion of their Leadership Development Program. In addition to his 13-year career in banking, Mr.
Glover holds a BS in Accounting from Ball State University’s Miller College of Business and has been recognized by the Indiana Bankers Association for completion of their Leadership Development Program. In addition to his 14-year career in banking, Mr.
Our second largest leasing relationship was with a drilled pile foundation company located in Florida consisting of four contracts totaling approximately $938,000 in lease receivables, all of which were performing in accordance with the lease terms. Consumer Lending.
Our second largest leasing relationship was with a drilled pile foundation company located in Florida consisting of four contracts totaling approximately $585,000 in lease receivables, all of which were performing in accordance with the lease terms. Consumer Lending.
As of December 31, 2024, First Insurance Management provided us with various liability and property damage policies for the Company and its related subsidiaries. First Insurance Management is regulated by the State of Nevada Division of Insurance.
As of December 31, 2025, First Insurance Management provided us with various liability and property damage policies for the Company and its related subsidiaries. First Insurance Management is regulated by the State of Nevada Division of Insurance.
First Bank Richmond is subject to Indiana’s financial institutions tax, which is imposed at a flat rate as of December 31, 2024, of 4.9% on “adjusted gross income” apportioned to Indiana.
First Bank Richmond is subject to Indiana’s financial institutions tax, which is imposed at a flat rate as of December 31, 2025, of 4.9% on “adjusted gross income” apportioned to Indiana.
Institutions that are not well capitalized are subject to certain restrictions on brokered deposits and interest rates on deposits. At December 31, 2024, First Bank Richmond met the criteria to be considered "well capitalized." Standards for Safety and Soundness. Federal law requires each federal banking agency to prescribe certain standards for all insured depository institutions.
Institutions that are not well capitalized are subject to certain restrictions on brokered deposits and interest rates on deposits. At December 31, 2025, First Bank Richmond met the criteria to be considered "well capitalized." 25 Standards for Safety and Soundness. Federal law requires each federal banking agency to prescribe certain standards for all insured depository institutions.
FB Richmond Properties, Inc. files a separate federal income tax return. Capital Loss Carryovers. A corporation cannot recognize capital losses in excess of capital gains generated. Generally, a financial institution may carry back capital losses to the preceding three taxable years and forward to the succeeding five taxable years.
FB Richmond Properties, Inc. files a separate federal income tax return. Capital Loss Carryovers. A corporation may not recognize capital losses in excess of capital gains. Generally, a financial institution may carry back capital losses to the preceding three taxable years and forward to the succeeding five taxable years.
We had 25 other commercial and industrial loans with an outstanding balance in excess of $1.0 million at December 31, 2024, all of which were performing in accordance with their repayment terms at that date. Construction and Development Lending. We originate loans to finance the construction of commercial real estate projects, such as multi-family housing, industrial, office and retail centers.
We had 27 other commercial and industrial loans with an outstanding balance in excess of $1.0 million at December 31, 2025, all of which were performing in accordance with their repayment terms at that date. Construction and Development Lending. We originate loans to finance the construction of commercial real estate projects, such as multi-family housing, industrial, office and retail centers.
We had 15 other construction and development loans each with an outstanding balance in excess of $3.0 million at December 31, 2024, all of which were performing in accordance with their repayment terms at that date except for one $4.9 million loan that is subject to litigation between the developer and other parties. Lease Financing.
We had 6 other construction and development loans each with an outstanding balance in excess of $3.0 million at December 31, 2025, all of which were performing in accordance with their repayment terms at that date except for one $4.9 million loan that is subject to litigation between the developer and other parties. Lease Financing.
At December 31, 2024, home equity loans totaled $8.3 million, or 0.7% of our total loan and lease portfolio. Home equity lines of credit may be either fixed- or adjustable-rate and are typically originated in amounts, together with the amount of the existing first mortgage, of up to 89% of the appraised value of the subject property.
At December 31, 2025, home equity loans totaled $8.6 million, or 0.7% of our total loan and lease portfolio. 6 Home equity lines of credit may be either fixed- or adjustable-rate and are typically originated in amounts, together with the amount of the existing first mortgage, of up to 89% of the appraised value of the subject property.
At December 31, 2024, the average loan size of our outstanding multi-family and commercial real estate loans was $1.3 million, and the largest of such loans was a $13.7 million loan secured by a 210,000 square-foot industrial facility located in a Columbus, Ohio suburb. This loan was performing in accordance with its repayment terms at December 31, 2024.
At December 31, 2025, the average loan size of our outstanding multi-family and commercial real estate loans was $1.3 million, and the largest of such loans was a $13.6 million loan secured by a 210,000 square-foot industrial facility located in a Columbus, Ohio suburb. This loan was performing in accordance with its repayment terms at December 31, 2025.
As a Maryland business corporation, Richmond Mutual Bancorporation is required to file an annual report with and pay franchise taxes to the State of Maryland. Employees and Human Capital As of December 31, 2024, we had 173 full-time equivalent employees. Our employees are not represented by any collective bargaining group.
As a Maryland business corporation, Richmond Mutual Bancorporation is required to file an annual report with and pay franchise taxes to the State of Maryland. Employees and Human Capital As of December 31, 2025, we had 180 full-time equivalent employees. Our employees are not represented by any collective bargaining group.
Under these rules, assessment rates for an institution with total assets of less than $10 billion are determined by weighted average CAMELS composite ratings and certain financial ratios, and range from 5 to 32 basis points, subject to certain adjustments. 27 For the fiscal year ended December 31, 2024, First Bank Richmond paid $1.4 million in FDIC premiums.
Under these rules, assessment rates for an institution with total assets of less than $10 billion are determined by weighted average CAMELS composite ratings and certain financial ratios, and range from 5 to 32 basis points, subject to certain adjustments. For the fiscal year ended December 31, 2025, First Bank Richmond paid $1.2 million in FDIC premiums.
At December 31, 2024, First Bank Richmond’s capital exceeded all applicable requirements. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Capital Resources” contained in Part II, Item 7 and “Note 18: Regulatory Capital” in the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Form 10-K.
At December 31, 2025, First Bank Richmond’s capital exceeded all applicable requirements. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Capital Resources” contained in Part II, Item 7 and “Note 19: Regulatory Capital” in the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Form 10-K.
The average balance of our one- to four-family residential loans secured by first mortgages was approximately $144,000 at December 31, 2024. We originate fixed-rate home equity loans and fixed- and variable-rate lines of credit secured either by a first or second lien on the borrower’s primary residence.
The average balance of our one- to four-family residential loans secured by first mortgages was approximately $148,000 at December 31, 2025. We originate fixed-rate home equity loans and fixed- and variable-rate lines of credit secured either by a first or second lien on the borrower’s primary residence.
The average outstanding residential construction loan balance was approximately $289,000 at December 31, 2024. Residential construction loans are made with a maximum loan-to-value ratio of the lower of 80% of the cost or appraised value at completion. Commitments to fund residential construction loans generally are made subject to an appraisal of the property by an independent licensed appraiser.
The average outstanding residential construction loan balance was approximately $295,000 at December 31, 2025. Residential construction loans are made with a maximum loan-to-value ratio of the lower of 80% of the cost or appraised value at completion. Commitments to fund residential construction loans generally are made subject to an appraisal of the property by an independent licensed appraiser.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition at December 31, 2024 Compared to December 31, 2023” contained in Part II, Item 7 of this Form 10-K for additional information regarding changes in our loans, leases, and related allowances. Allocation of Allowance for Credit Losses.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition at December 31, 2025 Compared to December 31, 2024” contained in Part II, Item 7 of this Form 10-K for additional information regarding changes in our loans, leases, and related allowances. Allocation of Allowance for Credit Losses.
First Bank Richmond reviews the cost basis of the FHLB stock for ultimate recoverability regularly. At December 31, 2024, no impairment of the value of the stock has been recognized. As of December 31, 2024, the Bank had $265.0 million of FHLB advances and $10.0 million available on its line of credit with the FHLB. Federal Reserve System.
First Bank Richmond reviews the cost basis of the FHLB stock for ultimate recoverability regularly. At December 31, 2025, no impairment of the value of the stock has been recognized. As of December 31, 2025, the Bank had $240.0 million of FHLB advances and $10.0 million available on its line of credit with the FHLB. Federal Reserve System.
This increase was driven by a $68.8 million increase in our loan and lease portfolio. The growth in the balance of loans and leases primarily occurred in the commercial mortgage and multi-family categories, which is in line with management's strategy to expand these portfolios.
This increase was driven by a $17.9 million increase in our loan and lease portfolio. The growth in the balance of loans and leases primarily occurred in the commercial mortgage and multi-family categories, which is in line with management's strategy to expand these portfolios.
We had 56 other commercial and multi-family real estate loans each with an outstanding balance in excess of $3.0 million at December 31, 2024, all of which were performing in accordance with their repayment terms at December 31, 2024.
We had 60 other commercial and multi-family real estate loans each with an outstanding balance in excess of $3.0 million at December 31, 2025, all of which were performing in accordance with their repayment terms at December 31, 2025.
FB Richmond Holdings has one active subsidiary, FB Richmond Properties, Inc., which is a Delaware corporation holding approximately $113.1 million in loans. Competition We face significant competition within our market both in making loans and leases and attracting deposits.
FB Richmond Holdings has one active subsidiary, FB Richmond Properties, Inc., which is a Delaware corporation holding approximately $102.6 million in loans. Competition We face significant competition within our market both in making loans and leases and attracting deposits.
An additional amount may be loaned, up to 10% of unimpaired capital and surplus, if the loan is secured by readily marketable collateral, which generally does not include real estate. At December 31, 2024, based on the 15% limitation, First Bank Richmond’s loans-to-one-borrower limit was approximately $27.2 million.
An additional amount may be loaned, up to 10% of unimpaired capital and surplus, if the loan is secured by readily marketable collateral, which generally does not include real estate. At December 31, 2025, based on the 15% limitation, First Bank Richmond’s loans-to-one-borrower limit was approximately $28.0 million.
This requires significant judgement to estimate credit losses on a collective pool basis where similar risk characteristics exist, as well as for loans evaluated individually.
This determination requires significant judgment to estimate credit losses on a collective pool basis where similar risk characteristics exist, as well as for loans evaluated individually.
The guidance provides that the strength of an institution’s lending and risk management practices with respect to such concentrations will be taken into account in supervisory guidance on evaluation of capital adequacy. As of December 31, 2024, the Bank’s aggregate recorded loan balances for construction, land development and land loans were 73.1% of total regulatory capital.
The guidance provides that the strength of an institution’s lending and risk management practices with respect to such concentrations will be taken into account in supervisory guidance on evaluation of capital adequacy. As of December 31, 2025, the Bank’s aggregate recorded loan balances for construction, land development and land loans were 38.4% of total regulatory capital.
We conduct our business through 12 full service and one limited-service banking offices, with seven full-service and one limited-service offices located in Indiana and five offices situated in Ohio. Our main full-service banking office and four other branch offices are located in Richmond (Wayne County), Indiana.
We conduct our business through 13 full service and one limited-service banking offices, with seven full-service and one limited-service offices located in Indiana and six offices situated in Ohio. Our main full-service banking office and four other branch offices are located in Richmond (Wayne County), Indiana.
First Bank Richmond has the legal authority to invest in various types of liquid assets, including U.S. Treasury obligations, securities of various government-sponsored enterprises and municipal governments, deposits at the Federal Home Loan Bank of Indianapolis, certificates of deposit of federally insured institutions, investment grade corporate bonds and investment grade marketable equity securities.
First Bank Richmond has the legal authority to invest in a variety of liquid assets, including U.S. Treasury obligations, securities of government-sponsored enterprises, municipal securities, deposits at the Federal Home Loan Bank of 17 Indianapolis, certificates of deposit of federally insured institutions, investment-grade corporate bonds, and investment-grade marketable equity securities.
All FHA, VA and USDA loans we originate are sold on a servicing-released, non-recourse basis in accordance with FHA, VA and USDA guidelines. For the years ended December 31, 2024 and 2023, we sold $25.2 million and $19.7 million of one- to four-family residential real estate loans, respectively.
All FHA, VA and USDA loans we originate are sold on a servicing-released, non-recourse basis in accordance with FHA, VA and USDA guidelines. For the years ended December 31, 2025 and 2024, we sold $17.8 million and $25.2 million of one- to four-family residential real estate loans, respectively.
At December 31, 2024, 51.7% of our one- to four-family residential real estate loans were fixed-rate loans and 48.3% of such loans were adjustable-rate loans. Most of our loans are underwritten using generally-accepted secondary market underwriting guidelines.
We originate both fixed-rate and adjustable-rate one- to four-family residential real estate loans. At December 31, 2025, 51.3% of our one- to four-family residential real estate loans were fixed-rate loans and 48.7% of such loans were adjustable-rate loans. Most of our loans are underwritten using generally-accepted secondary market underwriting guidelines.
The largest employers in Miami County include Upper Valley Medical Center, Clopay Building Products, F&P America, UTC Aerospace Systems, Meijer Distribution Center, ConAgra Foods, American Honda, and Hobart Brothers. The unemployment rate in Miami County was 4.0% in December 2024 compared to 2.8% in December 2023.
The largest employers in Miami County include Upper Valley Medical Center, Clopay Building Products, F&P America, UTC Aerospace Systems, Meijer Distribution Center, ConAgra Foods, American Honda, and Hobart Brothers. The unemployment rate in Miami County was 3.7% in December 2025 compared to 4.0% in December 2024.
At December 31, 2024, on a consolidated basis, we had $1.5 billion in assets, $1.2 billion in loans and leases, net of allowance, $1.1 billion in deposits, and $132.9 million in stockholders’ equity. At December 31, 2024, First Bank Richmond’s total risk-based capital ratio was 14.2%, exceeding the 10.0% requirement for a well-capitalized institution.
At December 31, 2025, on a consolidated basis, we had $1.5 billion in assets, $1.2 billion in loans and leases, net of allowance, $1.1 billion in deposits, and $145.8 million in stockholders’ equity. At December 31, 2025, First Bank Richmond’s total risk-based capital ratio was 14.6%, exceeding the 10.0% requirement for a well-capitalized institution.
These activities provide an additional source of fee income to First Bank Richmond and in 2024 constituted 21.4% of our total non-interest income. Subsidiary and Other Activities At December 31, 2024, Richmond Mutual Bancorporation had two subsidiaries, First Bank Richmond and First Insurance Management, Inc. First Bank Richmond is our wholly owned banking subsidiary.
These activities provide an additional source of fee income to First Bank Richmond and in 2025 constituted 27.3% of our total non-interest income. Subsidiary and Other Activities At December 31, 2025, Richmond Mutual Bancorporation had two subsidiaries, First Bank Richmond and First Insurance Management, Inc. First Bank Richmond is our wholly owned banking subsidiary.
First Bank Richmond provides full banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana, its five full-service offices located in Piqua (2), Sidney (2) and Troy (1), Ohio, and its loan production office in Columbus, Ohio.
First Bank Richmond provides full banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana, and its six full-service offices located in Piqua (2), Sidney (2), Troy (1), and Columbus (1), Ohio.
We also provide trust and wealth management services, including serving as executor and trustee under wills and deeds and as guardian and custodian of employee benefits, and manage private investment accounts for individuals and institutions. Total wealth management assets under management and administration were $193.0 million at December 31, 2024.
We also provide trust and wealth management services, including serving as executor and trustee under wills and deeds and as guardian and custodian of employee benefits, and manage private investment accounts for individuals and institutions. Total wealth management assets under management and administration were $246.3 million at December 31, 2025.
Our largest lending relationship with one borrower at December 31, 2024 was for $22.8 million consisting of four commercial real estate loans secured by properties in the Dayton, Ohio area. All of these loans were performing in accordance with their repayment terms at December 31, 2024.
Our largest lending relationship at December 31, 2025 was with one borrower for $23.5 million consisting of four commercial real estate loans secured by properties in the Dayton, Ohio area. All of these loans were performing in accordance with their repayment terms at December 31, 2025.
Trust services are provided to both individual and corporate customers, including personal trust and agency accounts, and employee benefit plans. We also manage private investment accounts for individuals and institutions. Total wealth management assets under management and administration were $193.0 million at December 31, 2024.
Trust services are provided to both individual and corporate customers, including personal trust and agency accounts, and employee benefit plans. We also manage private investment accounts for individuals and institutions. Total wealth management assets under management and administration were $246.3 million at December 31, 2025.
Sidney is located approximately 35 miles north of Dayton, Ohio and 75 miles west of Columbus, Ohio. Sidney had an estimated population in 2024 of 20,500 with a median household income of approximately $59,600. Manufacturing is the dominant industry among the employee workforce in Shelby County.
Sidney is located approximately 35 miles north of Dayton, Ohio and 75 miles west of Columbus, Ohio. Sidney had an estimated population in 2025 of 20,500 with a median household income of approximately $60,700. Manufacturing is the dominant industry among the employee workforce in Shelby County.
These loans generally include an interest reserve of 1% to 5% of the loan commitment amount. The average outstanding loan size in our commercial construction loan portfolio was approximately $2.4 million at December 31, 2024.
These loans generally include an interest reserve of 1% to 5% of the loan commitment amount. The average outstanding loan size in our commercial construction loan portfolio was approximately $1.7 million at December 31, 2025.
Leading manufacturing employers in Shelby County include Honda of America Manufacturing, Airstream, and Plastipak Packaging. The unemployment rate in Shelby County was 4.0% in December 2024 compared to 2.9% in December 2023. Miami County is located in west central Ohio and is part of the Dayton metropolitan area.
Leading manufacturing employers in Shelby County include Honda of America Manufacturing, Airstream, and Plastipak Packaging. The unemployment rate in Shelby County was 3.6% in December 2025 compared to 4.0% in December 2024. Miami County is located in west central Ohio and is part of the Dayton metropolitan area.
This adjustment increased the allowance from $12.4 million at December 31, 2022 to $15.1 million at January 1, 2023. At December 31, 2024, the allowance for credit losses on loans and leases totaled $15.8 million, or 1.34% of total loans and leases outstanding, compared to $15.7 million, or 1.42% of total loans and leases outstanding at December 31, 2023.
This adjustment increased the allowance from $12.4 million at December 31, 2022 to $15.1 million at January 1, 2023. At December 31, 2025, the allowance for credit losses on loans and leases totaled $16.5 million, or 1.38% of total loans and leases 16 outstanding, compared to $15.8 million, or 1.34% of total loans and leases outstanding at December 31, 2024.
At December 31, 2024, First Bank Richmond complied with these loans-to-one-borrower limitations. At December 31, 2024, First Bank Richmond’s largest aggregate amount of loans to one borrower was $22.8 million. Dividends. Under Indiana law, First Bank Richmond is permitted to declare and pay dividends out of its undivided profits.
At December 31, 2025, First Bank Richmond complied with these loans-to-one-borrower limitations. At December 31, 2025, First Bank Richmond’s largest aggregate amount of loans to one borrower was $23.5 million. Dividends. Under Indiana law, First Bank Richmond is permitted to declare and pay dividends out of its undivided profits.
As of December 31, 2024, approximately 74% of our workforce was female and 26% male, and our average tenure was 10.3 years. As part of our compensation philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees in order to attract and retain superior talent.
As of December 31, 2025, approximately 73.5% of our workforce was female and 26.5% male, and our average tenure was 10.1 years. As part of our compensation philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees in order to attract and retain superior talent.
At December 31, 2024, First Bank Richmond had an active investment subsidiary, FB Richmond Holdings, which is a Nevada corporation that holds substantially all of First Bank Richmond's investment portfolio. As of December 31, 2024, the market value of securities managed was $258.5 million.
At December 31, 2025, First Bank Richmond had an active investment subsidiary, FB Richmond Holdings, which is a Nevada corporation that holds substantially all of First Bank Richmond's investment portfolio. As of December 31, 2025, the market value of securities managed was $254.7 million.
FB Richmond Holdings, Inc., a Nevada corporation, was formed in 2020 as a subsidiary of First Bank Richmond. FB Richmond Holdings holds substantially all of the Bank’s investment portfolio. As of December 31, 2024, the market value of securities held was $258.5 million.
FB Richmond Holdings, Inc., a Nevada corporation, was formed in 2020 as a subsidiary of First Bank Richmond. FB Richmond Holdings holds substantially all of the Bank’s investment portfolio. As of December 31, 2025, the market value of securities held was $254.7 million.
Our largest leasing relationship at that date was with the State of Arkansas which consisted of more than 3,300 leases totaling approximately $9.1 million in lease receivables, all of which were performing in accordance with the lease terms.
Our largest leasing relationship at that date was with the State of Arkansas which consisted of more than 3,200 leases totaling approximately $7.0 million in lease receivables, all of which were performing in accordance with the lease terms.
The Dodd-Frank Act prohibits unfair, deceptive or abusive acts or practices against consumers, which can be enforced by the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation and state Attorneys General. Bank Secrecy Act/Anti Money Laundering Law.
The Dodd-Frank Act prohibits unfair, deceptive or abusive acts or practices against consumers, which can be enforced by the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation and state Attorneys General.
FB Richmond Properties, Inc., a Delaware corporation, was formed in 2020 as a subsidiary of FB Richmond Holdings, Inc. FB Richmond Properties holds certain residential mortgages and commercial real estate loans. As of December 31, 2024, FB Richmond Properties held approximately $113.1 million in residential mortgages and commercial real estate loans.
FB Richmond Properties, Inc., a Delaware corporation, was formed in 2020 as a subsidiary of FB Richmond Holdings, Inc. FB Richmond Properties holds certain residential mortgages and commercial real estate loans. As of December 31, 2025, FB Richmond Properties held approximately $102.6 million in residential mortgages and commercial real estate loans.
The nature of our business requires the use of brokers and third-party originators as it focuses on transactions generally ranging between $2,500 and $250,000 (with an average size of $49,000) with terms of 24 to 72 months, with a weighted average term of 39.0 months as of December 31, 2024.
The nature of our business requires the use of brokers and third-party originators as it focuses on transactions generally ranging between $2,500 and $250,000 (with an average size of $51,000) with terms of 24 to 72 months, and a weighted average term of 38.8 months as of December 31, 2025.
We had $37,000 in foreclosed assets at December 31, 2024. The table below sets forth the amounts and categories of our non-performing assets at the dates indicated.
We had $56,000 in foreclosed assets at December 31, 2025. 13 The table below sets forth the amounts and categories of our non-performing assets at the dates indicated.
At December 31, 2024, $48.7 million or 25.7% of our one- to four-family loan portfolio consisted of jumbo loans. We generally underwrite our one- to four-family loans based on the applicant’s employment and credit history and the appraised value of the subject property.
At December 31, 2025, $45.3 million or 23.7% of our one- to four-family loan portfolio consisted of jumbo loans. We generally underwrite our one- to four-family loans based on the applicant’s employment and credit history and the appraised value of the subject property.
Our risk management profile centers on internally rated “A” quality credits. At December 31, 2024, our direct finance leasing portfolio totaled $148.1 million, or 12.6% of our total loan and lease portfolio, with lease contracts located throughout the United States.
Our risk management profile centers on internally rated “A” quality credits. At December 31, 2025, our direct finance leasing portfolio totaled $145.8 million, or 12.2% of our total loan and lease portfolio, with lease contracts located throughout the United States.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Furthermore, various risks, such as fraudulent 35 diversion of construction funds, mechanics' liens filed by contractors, subcontractors, or suppliers, and potential contractor failures in completing projects, contribute to the complexity and uncertainties associated with construction and development loans.
Furthermore, various risks, such as fraudulent diversion of construction funds, mechanics' liens filed by contractors, subcontractors, or suppliers, and potential contractor 35 failures in completing projects, contribute to the complexity and uncertainties associated with construction and development loans.
Our size makes it more difficult for us to compete. Our asset size makes it more difficult to compete with other financial institutions that are larger and can more easily afford to invest in the marketing and technologies needed to attract and retain customers.
Our size makes it difficult for us to compete. Our asset size makes it difficult to compete with other financial institutions that are larger and can more easily afford to invest in the marketing and technologies needed to attract and retain customers.
As a result, navigating this evolving regulatory and public opinion landscape may require us to balance compliance with regulatory requirements against maintaining investor, customer, and stakeholder trust. 42 There may be future sales of additional common stock or preferred stock or other dilution of our equity, which may adversely affect the market price of our common stock.
As a result, navigating this evolving regulatory and public opinion landscape may require us to balance compliance with regulatory requirements against maintaining investor, customer, and stakeholder trust. There may be future sales of additional common stock or preferred stock or other dilution of our equity, which may adversely affect the market price of our common stock.
In addition, the board has the power, generally without stockholder approval, to set the terms of any such classes or series of preferred stock that may be issued, including voting rights, dividend rights and preferences over the common stock with respect to dividends or upon the liquidation, dissolution or winding-up of our business and other terms.
In addition, the board has the power, generally without stockholder approval, to set the terms of any such classes or series of preferred stock that may be issued, including 42 voting rights, dividend rights and preferences over the common stock with respect to dividends or upon the liquidation, dissolution or winding-up of our business and other terms.
This asymmetry might create the perception of reduced profitability during loan expansion periods due to the immediate recognition of expected credit 41 losses. Conversely, periods with stable or declining loan levels might seem relatively more profitable as income accrues gradually for loans where losses had been previously recognized.
This asymmetry might create the perception of reduced profitability during loan expansion periods due to the immediate recognition of expected credit losses. Conversely, periods with stable or declining loan levels might seem relatively more profitable as income accrues gradually for loans where losses had been previously recognized.
A decline in local economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are geographically diverse. Many of the loans in our portfolio are secured by real estate.
A decline in local economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are geographically more diverse. Many of the loans in our portfolio are secured by real estate.
This risk of loss also includes the potential legal actions that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards or customer attrition due to potential negative publicity.
This risk of loss also includes the potential for legal actions that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards or customer attrition due to potential negative publicity.
Our business operations are significantly influenced by the extensive body of accounting regulations in the United States. Regulatory bodies periodically issue new guidance, altering accounting rules and reporting requirements, which can substantially affect the preparation and reporting of our financial statements. These changes might necessitate retrospective application, potentially leading to restatements of prior period financial statements.
Our business operations are significantly influenced by the extensive body of accounting regulations in the United States. Regulatory bodies periodically issue new guidance, altering accounting rules and reporting requirements, which can substantially affect the preparation and reporting of our financial statements. These changes may necessitate retrospective application, potentially leading to restatements of prior period financial statements.
If our investment in the Federal Home Loan Bank of Indianapolis becomes impaired, our earnings and stockholders’ equity could decrease. At December 31, 2024, we owned $13.9 million in Federal Home Loan Bank (“FHLB”) of Indianapolis stock. We are required to own this stock to be a member of and to obtain advances from the FHLB of Indianapolis.
If our investment in the Federal Home Loan Bank of Indianapolis becomes impaired, our earnings and stockholders’ equity could decrease. At December 31, 2025, we owned $13.9 million in Federal Home Loan Bank (“FHLB”) of Indianapolis stock. We are required to own this stock to be a member of and to obtain advances from the FHLB of Indianapolis.
Declines in market value could result in impairments of these assets, which would lead to accounting charges that could have a material adverse effect on our net income and capital levels. As of December 31, 2024, we had no securities that were deemed impaired.
Declines in market value could result in impairments of these assets, which would lead to accounting charges that could have a material adverse effect on our net income and capital levels. As of December 31, 2025, we had no securities that were deemed impaired.
Investor advocacy groups, investment funds, and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights. Increased ESG-related compliance costs could result in increases to our overall operational costs.
Investor advocacy groups, investment funds, and influential investors are also focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights. ESG-related compliance costs could result in increases to our overall operational costs.
Inadequate reporting of credit quality changes could also result in non-compliance with regulatory requirements, potentially leading to regulatory scrutiny, fines, or other enforcement actions. Moreover, delays or inaccuracies in credit updates could damage our reputation, eroding investor and stakeholder confidence in our risk management practices.
Inadequate reporting of credit quality changes could also result in non-compliance with regulatory requirements, potentially leading to regulatory scrutiny, fines, or other enforcement actions. Moreover, delays or inaccuracies in credit updates could damage our reputation, eroding investor and customer confidence in our risk management practices.
Real estate values are affected by various factors, including economic conditions, governmental rules or policies, natural disasters such as earthquakes, and trade-related pressures that may affect construction costs or materials availability. If we are required to liquidate a significant amount of collateral during a period of reduced real estate values, our financial condition and profitability could be adversely affected.
Real estate values are affected by various factors, including economic conditions, governmental rules or policies, natural disasters, and trade-related pressures that may affect construction costs or availability of materials. If we are required to liquidate a significant amount of collateral during a period of reduced real estate values, our financial condition and profitability could be adversely affected.
Revenue generated from our leasing business accounted for 13.5% and 15.3% of our total revenue for the years ended December 31, 2024 and 2023, respectively. We rely solely on brokers and other third-party originators to generate our lease transactions.
Revenue generated from our leasing business accounted for 13.3% and 13.5% of our total revenue for the years ended December 31, 2025 and 2024, respectively. We rely solely on brokers and other third-party originators to generate our lease transactions.
If hazardous conditions or toxic substances are found on these properties, we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property.
If hazardous conditions or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property.
Failure to properly assess and disclose risks associated with loan participations may further expose us to legal liabilities, including litigation from investors or regulatory agencies alleging mismanagement or inadequate disclosures. At December 31, 2024, we held $104.4 million in loan participations in which we were not the lead lender.
Failure to properly assess and disclose risks associated with loan participations may further expose us to legal liabilities, including litigation from investors or regulatory agencies alleging mismanagement or inadequate disclosures. At December 31, 2025, we held $83.4 million in loan participations in which we were not the lead lender.
One such significant change in 2023 was the implementation of the Current Expected Credit Losses (“CECL”) model, which we adopted on January 1, 2023. Under the CECL model, financial assets carried at amortized cost, such as loans and held-to-maturity debt securities, will be presented at the net amount expected to be collected.
One such recent significant change was the implementation of the Current Expected Credit Losses (“CECL”) model, which we adopted on January 1, 2023. Under the CECL model, financial assets carried at amortized cost, such as loans and held-to-maturity debt securities, are presented at the net amount expected to be collected.
Richmond Mutual Bancorporation will depend primarily upon the proceeds it retained from the initial public offering as well as earnings of First Bank Richmond to provide funds to pay dividends on our common stock. The payment of dividends by First Bank Richmond is also subject to certain regulatory restrictions.
Richmond Mutual Bancorporation depends primarily upon the proceeds it retained from its initial public offering as well as earnings of First Bank Richmond to provide funds to pay dividends on our common stock. The payment of dividends by First Bank Richmond is also subject to certain regulatory restrictions.
Repayment of commercial loans often depends on the cash flow generated by the business or property involved, making them more sensitive to adverse conditions in the real estate market, business climate, or economy. For loans secured by non-owner-occupied properties, repayments rely heavily on tenant rent payments, and downturns in the real estate market or economic conditions heighten repayment risks.
Repayment of commercial loans often depends on the cash flow generated by the business or property involved, making them more sensitive to adverse conditions in the real estate market, business climate, or broader economic environment. For loans secured by non-owner-occupied properties, repayments rely heavily on tenant rent payments, and softening real estate conditions or weaker economic activity heighten repayment risks.
Shifts in interest rates can also impact the average lifespan of loans and mortgage-backed securities. In periods of rising interest rates, the growth rate of interest income from our assets might lag behind the accelerating interest expenses on liabilities. Conversely, declining interest rates can trigger increased loan prepayments and mortgage-backed security redemptions as borrowers seek lower borrowing costs through refinancing.
In periods of rising interest rates, the growth rate of interest income from our assets might lag behind the accelerating interest expenses on liabilities. Conversely, declining interest rates can trigger increased loan prepayments and mortgage-backed security redemptions as borrowers seek lower borrowing costs through refinancing.
This occurrence poses financial risks, particularly for institutions that originate longer-term, fixed-rate mortgage loans. As of December 31, 2024, approximately 38.6% of our loan and lease portfolio consisted of fixed-rate loans and leases, potentially exposing us to these risks.
This occurrence poses financial risks, particularly for institutions that originate longer-term, fixed-rate mortgage loans. As of December 31, 2025, approximately 35.9% of our loan and lease portfolio consisted of fixed-rate loans and leases, potentially exposing us to these risks.
As a result, we cannot assure you that our profitability or the demand for our leasing services from our customers will be maintained at historical levels. Moreover, approximately $51.1 million or 34.4% of our total lease portfolio is to customers located in California, New York, Florida, and Arkansas.
As a result, we cannot assure you that our profitability or the demand for our leasing services from our customers will be maintained at historical levels. Moreover, approximately $55.1 million or 37.7% of our total lease portfolio is to customers located in California, New York, Florida, and Texas.
At December 31, 2024, the book value of our MSRs was $2.0 million. We use a financial model that uses, wherever possible, quoted market prices to value our MSRs. This model is complex and also uses assumptions related to interest and discount rates, prepayment speeds, delinquency and foreclosure rates and ancillary fee income.
At December 31, 2025, the book value of our MSRs was $1.9 million. We utilize a financial model that uses, wherever possible, quoted market prices to value our MSRs. This model is complex and also uses assumptions related to interest and discount rates, prepayment speeds, delinquency and foreclosure rates and ancillary fee income.
In analyzing a debt issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, industry analysts’ reports and, to a lesser extent given the relatively insignificant levels of depreciation in our debt portfolio, spread differentials between the effective rates on instruments in the portfolio compared to risk-free rates.
In analyzing a debt issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, industry analysts’ reports, and spread differentials between the effective rates on instruments in the portfolio compared to risk-free rates.
Recent changes in the regulatory landscape under the new administration have moved toward a reduction in emphasis on certain ESG priorities, particularly around climate change and diversity, equity, and inclusion ("DEI"). This shift is leading to the rollback of regulations that mandate specific disclosures and operational practices in these areas.
Recent changes in the regulatory landscape and shifting federal priorities have moved toward a reduction in emphasis on certain ESG priorities, particularly around climate change and diversity, equity, and inclusion ("DEI"). This shift has led to a rollback of regulations that mandate specific disclosures and operational practices in these areas.
As of December 31, 2024, our deposit composition included $366.8 million in certificates of deposit maturing within one year and $546.7 million in noninterest-bearing, NOW checking, savings, and money market accounts. In a rising rate environment, retaining deposits can become costlier.
As of December 31, 2025, our deposit composition included $411.7 million in certificates of deposit maturing within one year and $563.3 million in noninterest-bearing, NOW checking, savings, and money market accounts. In a rising rate environment, retaining deposits can become costlier.
At December 31, 2024, direct financing leases totaled $148.1 million, or 12.6% of our total loan and lease portfolio. Our direct financing leases, while short term in nature, are inherently risky as they are secured by assets that depreciate rapidly.
At December 31, 2025, direct financing leases totaled $145.8 million, or 12.2% of our total loan and lease portfolio. Our direct financing leases, while short term in nature, are inherently risky as they are secured by assets that depreciate rapidly.
Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks. Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.
Scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks. In recent years, companies have faced scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.
These loans carry credit risks that could adversely affect our financial condition and results of operations. As of December 31, 2024, our portfolio included commercial real estate, multi-family real estate, and commercial and industrial loans totaling $683.9 million, constituting approximately 58.2% of our total loans and leases.
These loans carry credit risks that could adversely affect our financial condition and results of operations. As of December 31, 2025, our portfolio included commercial real estate, multi-family real estate, and commercial and industrial loans totaling $765.7 million, constituting approximately 64.1% of our total loans and leases.
At December 31, 2024, our top 25 brokers/third party originators collectively accounted for 83.6% of our total direct financing lease portfolio, with our largest broker/third party originator accounting for 12.2% of the portfolio.
At December 31, 2025, our top 25 brokers/third party originators collectively accounted for 82.7% of our total direct financing lease portfolio, with our largest broker/third party originator accounting for 12.0% of the portfolio.
A sustained and substantial change in market interest rates could significantly impact our financial condition, liquidity, and operational results. Furthermore, fluctuations in interest rates may adversely affect the valuation of our assets and liabilities, ultimately affecting our earnings. Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations.
A sustained and substantial change in market interest rates could significantly impact our financial condition, liquidity, and operational results. Furthermore, fluctuations in interest rates may adversely affect the valuation of our assets and liabilities, ultimately affecting our earnings.
In addition, many of our commercial real estate loans are not fully amortizing and require large balloon payments upon maturity, which may necessitate the borrower to sell or refinance the property, increasing the risk of default. Commercial business loans typically are made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower.
In addition, many of our commercial real estate loans are not fully amortizing and require large balloon payments upon maturity, which may necessitate the borrower to sell or refinance the property, increasing the risk of default.
These regulations, along with the currently existing tax, accounting, securities, insurance, and monetary laws, regulations, rules, standards, policies, and interpretations control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures. These laws, regulations, rules, standards, policies, and interpretations are constantly evolving and may change significantly over time.
These regulations may sometimes impose significant limitations on our operations. These regulations, along with the currently existing tax, accounting, securities, insurance, and monetary laws, regulations, rules, standards, policies, and interpretations control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures.
We rely on certain external vendors to provide products and services necessary to maintain our day-to-day operations. These third-party vendors are sources of operational and informational security risks to us, including risks associated with operational errors, information system failures, interruptions or breaches and unauthorized disclosures of sensitive or confidential client or customer information.
These third-party vendors are sources of operational and informational security risks to us, including risks associated with operational errors, information system failures, interruptions or breaches and unauthorized disclosures of sensitive or confidential client or customer information.
The core component of our net income is driven by net interest income, which centers on the variance between the interest income accrued from interest-earning assets, such as loans and securities, and the interest expense incurred on interest-bearing liabilities, including deposits and borrowings.
The core component of our net income is driven by net interest income, which centers on the variance between the interest income accrued from interest-earning assets, such as loans and securities, and the interest expense incurred on interest-bearing liabilities, including deposits and borrowings. 33 The yields we earn on our assets and the rates we pay on our liabilities are generally fixed for a contractual period of time.
Speculative construction loans carry additional risks, including the borrower's ability to secure a take-out commitment for a permanent loan. Loans associated with undeveloped land or future construction also present added risks due to the lack of income generation from the property and its potential illiquid nature as collateral.
Loans associated with undeveloped land or future construction also present added risks due to the lack of income generation from the property and its potential illiquid nature as collateral.
During 2024, of our $61.6 million in lease originations, the top five brokers/third party originators accounted for approximately 52.0% of our total volume of lease originations, one of whom accounted for approximately 14.4% of our total volume of lease originations.
During 2025, of our $69.4 million in lease originations, the top five brokers/third party originators accounted for approximately 46.1% of our total volume of lease originations, one of whom accounted for approximately 11.8% of our total volume of lease originations.
Climate change and related legislative and regulatory initiatives may materially affect the Company’s business and results of operations. The effects of climate change continue to raise significant concerns about the state of the environment. However, under the new Trump administration, federal policy may shift to reduce the emphasis on climate change initiatives and environmental regulations.
Climate change and related legislative and regulatory initiatives may materially affect the Company’s business and results of operations. 41 The effects of climate change continue to raise significant concerns about the state of the environment.
Our policies, which require us to perform an environmental review before initiating any foreclosure action on non-residential real property, may not be sufficient to detect all potential environmental hazards.
Our policies, which require us to perform an environmental review before initiating any foreclosure action on non-residential real property, may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on us.
Our commercial loan portfolio, which includes commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, has increased to $816.5 million, or 69.5% of total loans and leases, at December 31, 2024 from $226.9 million, or 48.5% of total loans and leases, at December 31, 2016.
Our commercial loan portfolio, which includes commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, has increased to $837.4 million, or 70.2% of total loans and leases, at December 31, 2025 from $436.3 million, or 58.7% of total loans and leases, at December 31, 2020.
Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans. Adverse economic conditions in our market areas could impact our growth rate, reduce our customers' ability to repay loans, and adversely impact our business, financial condition, and results of operations.
Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans.
The yields we earn on our assets and the rates we pay on our liabilities are generally fixed for a contractual period of time. Like many financial institutions, our liabilities generally have shorter contractual maturities than our assets. This mismatch exposes us to significant earnings volatility as market interest rates fluctuate.
Like many financial institutions, our liabilities generally have shorter contractual maturities than our assets. This mismatch exposes us to significant earnings volatility as market interest rates fluctuate. Shifts in interest rates can also impact the average lifespan of loans and mortgage-backed securities.
A borrower's cash flow can be unpredictable, and collateral securing these loans may fluctuate in value. For loans secured by accounts receivable, repayment is often dependent on the borrower's ability to collect from clients, while other forms of collateral may be difficult to appraise, illiquid, or affected by business success.
For loans secured by accounts receivable, repayment often depends on the borrower's ability to collect from clients, while other forms of collateral may be difficult to appraise, illiquid, or subject to risks tied to the borrower's operating performance.
A deterioration in economic conditions in the market areas we serve, be it due to inflation, a recession, war, geopolitical conflicts, adverse weather conditions, or other factors could result in the following consequences, any of which could have a materially adverse effect on our business, financial condition, or results of operations: • Reduced demand for our products and services, potentially leading to a decline in our overall loans or assets; • Elevated instances of loan delinquencies, problematic assets, and foreclosures; • Reduced values in collateral securing our loans, thereby diminishing borrowing capacities and asset values tied to existing loans; and 33 • Reduced net worth and liquidity of loan guarantors, possibly impairing their ability to meet commitments to us.
Any of these conditions could lead to: • Reduced demand for our products and services, potentially leading to lower loan originations, deposits, and other revenues; • Elevated instances of loan delinquencies, problematic assets, and foreclosures; • Reduced values in collateral securing our loans, thereby diminishing borrowing capacities and asset values tied to existing loans; and • Reduced net worth and liquidity of loan guarantors, possibly impairing their ability to meet commitments to us.
The risk associated with security breaches or disruptions, especially those stemming from cyber-attacks, has become more pronounced due to the increasing sophistication and frequency of global intrusion attempts. Despite our continuous efforts to maintain the security and integrity of our information systems and implement robust risk management strategies, there's an inherent challenge.
The expanding use of cloud services and remote work technologies exposes us to heightened vulnerability to cyber-attacks. The risk associated with security breaches or disruptions, especially those stemming from cyber-attacks, has become more pronounced due to the increasing sophistication and frequency of global intrusion attempts.
Cyber-attacks often evolve at a pace that makes it difficult to proactively anticipate and mitigate them effectively. The dynamic nature of these threats means it's nearly impossible to entirely eliminate the risk. In the unfortunate event of a cyber-attack, delayed identification or response to the breach could significantly worsen its impact on our business, financial standing, and operational integrity.
Despite our continuous efforts to maintain the security and integrity of our information systems and implement robust risk management strategies, there is an inherent challenge. Cyber-attacks often evolve at a pace that makes it difficult to proactively anticipate and mitigate them effectively. The dynamic nature of these threats means it's nearly impossible to entirely eliminate the risk.
This includes disrupting operations, unauthorized access to sensitive information, potential legal violations, increased regulatory scrutiny, civil litigation, resource-intensive efforts to rectify the situation, damage to our reputation, or loss of customers. Any of these scenarios could have a material and adverse effect on our business, financial position, and operational outcomes. 39 Our operations rely on certain external vendors.
The repercussions of a security breach or major disruption to our information systems, as well as those of our customers, merchants, or third-party vendors, can be extensive. This includes disrupting operations, unauthorized access to sensitive information, potential legal violations, increased regulatory scrutiny, civil litigation, resource-intensive efforts to rectify the situation, damage to our reputation, or loss of customers.
However, interest rates do not necessarily move in the same direction or magnitude as the prices of goods and services, creating additional uncertainty in the economic environment. 34 Risks Related to Our Business We have a substantial portfolio of commercial and multi-family real estate, as well as commercial and industrial loans, and intend to continue increasing originations of these loan types.
These factors, individually or in combination, could have a material adverse effect on our business, financial condition, results of operations, and stock price. 34 Risks Related to Our Business We have a substantial portfolio of commercial and multi-family real estate, as well as commercial and industrial loans, and we intend to continue increasing originations of these loan types.
This comprises $126.2 million in commercial construction loans and $6.3 million in residential real estate construction loans, reflecting a substantial increase from the $58.4 million, constituting 7.8% of total loans, reported at December 31, 2020. Engaging in construction lending inherently carries higher credit risk compared to long-term financing for improved, owner-occupied real estate.
As of December 31, 2025, our construction and development loans totaled $71.7 million, accounting for approximately 6.0% of our total loan portfolio. This portfolio is comprised of $65.2 million in commercial construction loans and $6.5 million in residential real estate construction loans, reflecting a substantial increase from the $58.4 million, constituting 7.8% of total loans, reported at December 31, 2020.
The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on us. 40 Regulatory and Accounting Related Risks We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations that could increase our costs of operations.
Regulatory and Accounting Related Risks We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations that could increase our costs of operations. 40 The banking industry is extensively regulated. Federal banking regulations are designed primarily to protect the deposit insurance funds and consumers, not to benefit a company's shareholders.
Loans granted for properties not yet approved for planned development or improvements pose the risk of potential denials or delays in necessary approvals. Additionally, the risk of loss on a construction loan heavily relies on the accuracy of initial property value estimates upon completion compared to the estimated construction costs (inclusive of interest) and other assumptions.
Additionally, the risk of loss on a construction loan heavily relies on the accuracy of initial property value estimates upon completion compared to the estimated construction costs (inclusive of interest) and other assumptions. Inaccurate cost estimates may necessitate additional fund disbursements beyond the committed amount to protect the property's value.
Federal banking regulators also have raised concerns about weaknesses in the commercial real estate market. Failures in our risk management policies and controls could lead to higher delinquencies and losses, adversely affecting our business, financial condition, and results of operations.
Failures in our risk management policies and controls could lead to higher delinquencies and losses, adversely affecting our business, financial condition, and results of operations. We have focused on growing our construction and development loan portfolio in recent years, which adds additional risks to our loan portfolio.
Delays or cost overruns in construction can compound risks, especially when repayments rely on property sales or rentals to third parties, which may not transpire as anticipated. The sale of properties under construction is often challenging and typically requires completion for successful transactions, complicating the handling of problematic construction loans.
Moreover, misjudgment in estimating the completed project's value may result in the borrower holding a property insufficient to fully repay the construction loan upon its sale. Delays or cost overruns in construction can compound risks, especially when repayments rely on property sales or rentals to third parties, which may not transpire as anticipated.
Increases in reserves and charge-offs related to our commercial and industrial loan portfolio could materially impact our business, financial condition, operations, and prospects. In recent years, the commercial real estate market has experienced substantial growth, with increased competition contributing to historically low capitalization rates and rising property values.
Increases in reserves and charge-offs related to our commercial and industrial loan portfolio could materially impact our business, financial condition, operating results, and prospects.
While we maintain specialized cyber insurance coverage, it may not cover every potential breach scenario, leaving certain instances uncovered. The repercussions of a security breach or major disruption to our information systems, as well as those of our customers, merchants, or third-party vendors, can be extensive.
In the unfortunate event of a cyber-attack, delayed identification or response to the breach could significantly worsen its impact on our business, financial standing, and operational integrity. While we maintain specialized cyber insurance coverage, it may not cover every potential breach scenario, leaving certain instances uncovered.
Removed
Broader economic factors such as inflation, unemployment, and money supply fluctuations also may adversely affect our profitability. Trade wars, tariffs, or shifts in trade policies between the United States and other nations could disrupt supply chains, increase costs for businesses, and reduce export opportunities for our customers.
Added
Adverse economic conditions in our market areas, including declining employment, reduced consumer spending, business failures, or adverse weather events, could adversely affect our growth, customers’ ability to repay loans, and, consequently, our business, financial condition, and results of operations.
Removed
These developments may, in turn, negatively impact these businesses and, by extension, our financial condition and results of operations.
Added
Economic conditions in our market area are influenced by broad macroeconomic and policy factors, including inflation or deflation, changes in monetary policy, interest rate volatility, fiscal and trade policies, geopolitical conflicts, market instability, supply-chain disruptions, and adverse weather events. Although inflation has moderated, many borrowers continue to face higher operating costs, including increased costs of materials, goods, and labor.
Removed
Our financial condition and results of operations are affected by credit policies of monetary authorities, particularly the Board of Governors of the Federal Reserve System, or the Federal Reserve. Actions by monetary and fiscal authorities, including the Federal Reserve, could lead to inflation, deflation, or other economic phenomena that could adversely affect our financial performance.
Added
Changes in monetary policy may also affect borrowing behavior, asset values, and credit performance. Trade disputes, tariffs, and shifts in global supply chains may further increase costs for certain commercial borrowers, particularly those dependent on construction materials, raw materials, component parts, or exports.
Removed
Higher U.S. tariffs on imported goods could exacerbate inflationary pressures by increasing the cost of goods and materials for businesses and consumers. This may particularly affect small to medium-sized businesses, as they are less able to leverage economies of scale to mitigate cost pressures compared to larger businesses.
Added
A deterioration in economic conditions in the market areas we serve, whether due to recessionary conditions, inflation or deflation, interest rate volatility, geopolitical conflicts, market instability, adverse weather events, or other factors could have a materially adverse effect on our business, financial condition, or results of operations.
Removed
Consequently, our business clients may experience increased financial strain, reducing their ability to repay loans and adversely impacting our results of operations and financial condition. Furthermore, a prolonged period of inflation could cause wages and other costs to us to increase, which could adversely affect our results of operations and financial condition.
Added
Risks Related to the Proposed Merger with The Farmers Bancorp, Frankfort, Indiana The completion of the merger with The Farmers Bancorp, Frankfort Indiana (“Farmers Bancorp”) is subject to numerous risks and uncertainties that could materially affect our business, financial condition, results of operations, and stock price.
Removed
Virtually all our assets and liabilities are monetary in nature and, as a result, market interest rates tend to have a more significant impact on our performance than general levels of inflation or deflation.
Added
We have entered into a definitive agreement pursuant to which Farmers Bancorp will be merged with and into Richmond Mutual Bancorporation, with Richmond Mutual Bancorporation as the surviving entity.
Removed
However, the economic disruption caused by the COVID-19 pandemic significantly impacted this market. The pandemic also accelerated the adoption of remote work, which has led many companies to re-evaluate their long-term real estate needs.
Added
Promptly thereafter, Farmers Bancorp’s wholly owned bank subsidiary, The Farmers Bank, will be merged with and into First Bank Richmond, the wholly owned bank subsidiary of Richmond Mutual Bancorporation, with First Bank Richmond as the surviving bank. These transactions (collectively, the “merger”), if completed, will substantially increase the size of the Company.
Removed
While some businesses are returning to traditional office environments, others are downsizing or shifting to hybrid models, creating uncertainty in demand for office spaces and other commercial properties. This trend could result in prolonged vacancies, declining rental income, and reduced property values, adversely affecting the performance of our commercial real estate loan portfolio.
Added
Successfully integrating the operations, technologies, systems, personnel, and corporate cultures of the two companies may be complex, time-consuming, and costly. We may not achieve any or all of the anticipated strategic, operational, or financial benefits of the merger, including projected cost savings and revenue synergies.
Removed
We have focused on growing our construction and development loan portfolio in recent years, which adds additional risks to our loan portfolio. As of December 31, 2024, our construction and development loans totaled $132.6 million, accounting for approximately 11.3% of our total loan portfolio.
Added
Disruptions related to integration could result in delays, inefficiencies, or the loss of key personnel, customers, or suppliers, any of which could adversely affect our business. The merger also involves significant financial and accounting risks. The transaction requires valuation of acquired assets and liabilities, recognition of goodwill and other intangible assets, and may result in increased balance sheet complexity.
Removed
Inaccurate cost estimates may necessitate additional fund disbursements beyond the committed amount to protect the property's value. Moreover, misjudgment in estimating the completed project's value may result in the borrower holding a property insufficient to fully repay the construction loan upon its sale.
Added
Future impairment of goodwill, if any, or intangible assets could adversely affect our results of operations. Changes in our capital structure or increased leverage resulting from the transaction could also affect our liquidity, financial condition, and ability to access capital. Completion of the merger is subject to regulatory approvals and other conditions.
Removed
Despite our proactive measures, including encryption, authentication technologies, and extensive education initiatives for both employees and customers, the expanding use of cloud services and remote work technologies exposes us to heightened vulnerability to cyber-attacks.
Added
Failure to obtain or delays in obtaining such approvals could prevent or delay the merger or require us to comply with conditions that could adversely affect the combined company. Litigation or claims arising in connection with the merger could also result in unanticipated costs or obligations.
Removed
The banking industry is extensively regulated. Federal banking regulations are designed primarily to protect the deposit insurance funds and consumers, not to benefit a company's shareholders. These regulations may sometimes impose significant limitations on our operations.
Added
Market and business conditions following the merger may differ from expectations, and the combined company may face increased competition or changes in customer, supplier, or employee relationships. The anticipated benefits of the merger, including cost savings and revenue synergies, may not be realized in full or within the expected timeframe.
Removed
This could include scaling back federal participation in international agreements, such as the Paris Agreement, and reducing regulatory pressures on businesses, including banks, to address climate-related risks. Legislative and regulatory proposals aimed at combating climate change may face greater scrutiny or diminished priority.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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For instance, as part of our risk management framework, we regularly assess phishing threats targeting employees, conduct simulated attack exercises, and 43 implement enhanced endpoint detection solutions. Furthermore, we emphasize the importance of maintaining a collaborative relationship with third-party service providers/vendors. This collaborative approach enhances our risk management capabilities and ensures a shared commitment to maintaining a secure information environment.
For instance, as part of our risk management framework, we regularly assess phishing threats targeting employees, conduct simulated attack exercises, and implement enhanced endpoint detection solutions. Furthermore, we emphasize the importance of maintaining a collaborative relationship with third-party service providers/vendors. This collaborative approach enhances our risk management capabilities and ensures a shared commitment to maintaining a secure information environment.
This collaborative effort is designed to foster complete visibility into the nature and scope of security risks and events, enabling a unified and effective response. In addition to incident response, the Company implements robust data protection measures, including encryption protocols, multi-factor authentication, and data loss prevention controls, to safeguard sensitive information.
This collaborative effort is designed to foster complete visibility into the nature and scope of security risks and events, enabling 43 a unified and effective response. In addition to incident response, the Company implements robust data protection measures, including encryption protocols, multi-factor authentication, and data loss prevention controls, to safeguard sensitive information.
The Board also receives quarterly cybersecurity briefings that include updates on emerging threats, results of cybersecurity risk assessments, and the effectiveness of current controls. These discussions inform strategic decision-making and resource allocation for cybersecurity investments. 44
The Board also receives quarterly cybersecurity briefings that include updates on emerging threats, results of cybersecurity risk assessments, and the effectiveness of current controls. These discussions inform strategic decision-making and resource allocation for cybersecurity investments.
Item 1C. Cybersecurity Risk Management and Strategy The Company's Information Security Program ("ISP") is a robust framework overseen by the Information Technology Board Committee ("ITBC") and the IT Steering Committee ("ITSC"). These committees play a pivotal role in managing technology and cyber risks, ensuring compliance with regulatory requirements, and fostering a controlled risk environment.
Item 1C. Cybersecurity Risk Management and Strategy The Company's Information Security Program ("ISP") is a robust framework overseen by the Information Technology Board Committee ("ITBC") and the IT Steering Committee ("ITSC"). These committees play a pivotal role in managing technology and cyber risks, ensuring compliance with regulatory requirements, and fostering a controlled risk environment. The ITBC and ITSC meet quarterly.
This includes appointing the Information Security Officer ("ISO"), Chief Information Officer ("CIO"), and Chief Compliance Officer ("CCO"). The ISO and CIO roles are filled jointly by one individual, who has been with the organization for 20 years with over 25 years of experience in information technology.
This includes appointing the Information Security Officer ("ISO"), Chief Information Officer ("CIO"), and Chief Compliance Officer ("CCO"). The ISO and CIO roles are filled jointly by one individual, who has been with the organization for 21 years with over 25 years of experience in information technology.
This commitment to ongoing assessment and responsiveness enhances our ability to adapt to emerging threats and maintain a proactive stance in managing risks effectively. The identification of risks is a multifaceted process that involves a range of activities.
In instances where a risk is identified as inadequately controlled, remediation measures are implemented to reduce the risk to an acceptable level. This commitment to ongoing assessment and responsiveness enhances our ability to adapt to emerging threats and maintain a proactive stance in managing risks effectively. The identification of risks is a multifaceted process that involves a range of activities.
The ITBC meets quarterly, while the ITSC meets monthly. Meeting minutes from the ITSC are regularly submitted to the Board for review. These two committees jointly oversee the organization's information technology and cyber risk posture, focusing on the assessment of information and cybersecurity risks.
Meeting minutes from the ITSC are regularly submitted to the Board for review. These two committees jointly oversee the organization's information technology and cyber risk posture, focusing on the assessment of information and cybersecurity risks. Evaluated risks are subject to rigorous controls, ensuring both design and operational effectiveness and adherence to regulatory requirements.
Removed
Evaluated risks are subject to rigorous controls, ensuring both design and operational effectiveness and adherence to regulatory requirements. In instances where a risk is identified as inadequately controlled, remediation measures are implemented to reduce the risk to an acceptable level.

Item 2. Properties

Properties — owned and leased real estate

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We may open additional banking offices to better serve current clients and to attract new clients in subsequent years.
We may open additional banking offices to better serve current clients and to attract new clients in subsequent years. 44
As of December 31, 2024, the net book value of our real properties, including land, was $12.9 million. See also Note 6 in the Notes to Consolidated Financial Statements contained in Item 8 of this report on Form 10-K. In the opinion of management, the facilities are adequate and suitable for our current needs.
As of December 31, 2025, the net book value of our real properties, including land, was $13.4 million. See also Note 7 in the Notes to Consolidated Financial Statements contained in Item 8 of this report on Form 10-K. In the opinion of management, the facilities are adequate and suitable for our current needs.
Item 2. Properties We currently operate out of our corporate headquarters/financial center and 12 full-service offices, all of which are owned by us, and one drive through facility used for existing customer transaction purposes only and one loan production office, both of which are leased.
Item 2. Properties We currently operate out of our corporate headquarters/financial center and 13 full-service offices, 12 of which are owned by us and one of which is leased, as well as one drive through facility used for existing customer transaction purposes, which is also leased.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings We are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at December 31, 2024, we were not involved in any legal proceedings, the outcome of which would be material to our financial condition or results of operations. Item 4.
Item 3. Legal Proceedings We are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at December 31, 2025, we were not involved in any legal proceedings the outcome of which would be material to our financial condition or results of operations. Item 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Our cash dividend payout policy is reviewed regularly by management and the Board of Directors. During the year ended December 31, 2024, the Company paid cash dividends equal to $0.56 per common share.
Our cash dividend payout policy is reviewed regularly by management and the Board of Directors. During the year ended December 31, 2025, the Company paid cash dividends equal to $0.60 per common share.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The common stock of Richmond Mutual Bancorporation is listed on The Nasdaq Capital Market under the symbol "RMBI." There were approximately 434 shareholders of record of our common stock as of March 27, 2025.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The common stock of Richmond Mutual Bancorporation is listed on The Nasdaq Capital Market under the symbol "RMBI." There were approximately 418 shareholders of record of our common stock as of March 23, 2026.
The following table sets forth information with respect to our repurchases of our outstanding common shares during the three months ended December 31, 2024: Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs (1) October 1, 2024 - October 31, 2024 25,696 $ 13.05 25,696 581,106 November 1, 2024 - November 30, 2024 41,729 13.45 41,729 539,377 December 1, 2024 - December 31, 2024 66,433 14.63 66,433 472,944 133,858 $ 13.95 133,858 (1) On June 6, 2023, the Company announced that the Board of Directors approved an amendment to the Company's existing stock repurchase program authorizing the purchase of up to 321,386 shares of the Company's issued and outstanding common stock in addition to the 827,554 shares remaining available for repurchase at that date under the existing program, and extending the stock repurchase program's expiration date to June 6, 2024, unless completed sooner.
The following table sets forth information with respect to our repurchases of our outstanding common shares during the three months ended December 31, 2025: Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs (1) October 1, 2025 - October 31, 2025 — $ — — — November 1, 2025 - November 30, 2025 — — — — December 1, 2025 - December 31, 2025 — — — — — $ — — (1) The Company did not have a publicly announced stock repurchase program in place during the quarter ended December 31, 2025.
Removed
On May 16, 2024, the Company announced that the Board of Directors approved an extension of the Company's existing stock repurchase program, now set to expire on June 6, 2025. Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Other significant sources of pre-tax income are service charges (mostly from service charges 48 on deposit accounts and loan servicing fees), and fees from the sale of residential mortgage loans originated for sale in the secondary market. We may also recognize income from the sale of investment securities.
Other significant sources of pre-tax income are service charges (mostly from service charges on deposit accounts and loan servicing fees), and fees from the sale of residential mortgage loans originated for sale in the secondary market. We may also recognize income from the sale of investment securities.
In order to maintain what we believe to be acceptable levels of net interest income in varying interest rate environments, we actively manage our interest rate risk and assume a moderate amount of interest rate risk consistent with board policies.
To maintain what we believe to be acceptable levels of net interest income in varying interest rate environments, we actively manage our interest rate risk and assume a moderate amount of interest rate risk consistent with board policies.
At December 31, 2024, the Bank’s CET1 capital exceeded the required capital conservation buffer. For a bank holding company with less than $3.0 billion in assets, the capital guidelines apply on a bank only basis and the Federal Reserve Board expects the holding company’s subsidiary banks to be well capitalized under the prompt corrective action regulations.
At December 31, 2025, the Bank’s CET1 capital exceeded the required capital conservation buffer. For a bank holding company with less than $3.0 billion in assets, the capital guidelines apply on a bank only basis and the Federal Reserve Board expects the holding company’s subsidiary banks to be well capitalized under the prompt corrective action regulations.
Based on our current capital allocation objectives for 2025, management does not expect cash expenditures for capital investment in premises and equipment to have a material effect on our liquidity, capital resources or operations. Richmond Mutual Bancorporation is a separate legal entity from First Bank Richmond and must provide for its own liquidity.
Based on our current capital allocation objectives for 2026, management does not expect cash expenditures for capital investment in premises and equipment to have a material effect on our liquidity, capital resources or operations. Richmond Mutual Bancorporation is a separate legal entity from First Bank Richmond and must provide for its own liquidity.
(2) Net interest margin represents net interest income divided by average total interest-earning assets. 57 Rate/Volume Analysis The following schedule presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and that due to the changes in interest rates.
(2) Net interest margin represents net interest income divided by average total interest-earning assets. 58 Rate/Volume Analysis The following schedule presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and that due to the changes in interest rates.
As a result of our efforts to build our management and infrastructure, we believe we are well-positioned to increase the size of our balance sheet without a proportional increase in overhead expense or operating risk. Accordingly, we intend to increase, on a managed basis, our assets and liabilities, particularly loans and deposits. Asset Quality.
As a result of our efforts to build our management and infrastructure, we believe we are well-positioned to increase the size of our balance sheet without a proportional increase in overhead expense or operating risk. Accordingly, we intend to increase, on a managed basis, our assets and liabilities, particularly loans and deposits.
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 December 31, 2024, which evaluation included consideration of a potential recession due to inflation, stock market volatility, and overall geopolitical tensions.
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 December 31, 2025, which evaluation included consideration of a potential recession due to inflation, stock market volatility, and overall geopolitical tensions.
At December 31, 2024, First Bank Richmond’s regulatory capital exceeded the FDIC regulatory requirements, and First Bank Richmond was well-capitalized under regulatory prompt corrective action standards. Consistent with our goals to operate a sound and profitable organization, our policy is for First Bank Richmond to maintain well-capitalized status.
At December 31, 2025, First Bank Richmond’s regulatory capital exceeded the FDIC regulatory requirements, and First Bank Richmond was well-capitalized under regulatory prompt corrective action standards. Consistent with our goals to operate a sound and profitable organization, our policy is for First Bank Richmond to maintain well-capitalized status.
In the ordinary course of business we have entered into contractual obligations and have made other commitments to make future payments. Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2024.
In the ordinary course of business we have entered into contractual obligations and have made other commitments to make future payments. Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2025.
As of December 31, 2024, management is not aware of any events that are reasonably likely to have a material adverse effect on our liquidity, capital resources or operations. In addition, management is not aware of any regulatory recommendations regarding liquidity that would have a material adverse effect on us.
As of December 31, 2025, management is not aware of any events that are reasonably likely to have a material adverse effect on our liquidity, capital resources or operations. In addition, management is not aware of any regulatory recommendations regarding liquidity that would have a material adverse effect on us.
Selected Consolidated Financial and Other Data The Financial Condition Data and Operating Data as of and for the years ended December 31, 2024 and 2023 are derived from the audited financial statements and related notes included elsewhere in this Form 10-K.
Selected Consolidated Financial and Other Data The Financial Condition Data and Operating Data as of and for the years ended December 31, 2025 and 2024 are derived from the audited financial statements and related notes included elsewhere in this Form 10-K.
If Richmond Mutual Bancorporation was subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets, at December 31, 2024, it would have exceeded all regulatory capital requirements.
If Richmond Mutual Bancorporation was subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets, at December 31, 2025, it would have exceeded all regulatory capital requirements.
Determining the appropriateness of the allowance for credit losses is complex and requires judgement by management on future factors that are unknown. We have an established process to determine the adequacy of the allowance for credit losses.
Determining the appropriateness of the allowance for credit losses is complex and requires judgment by management on future factors that are unknown. We have an established process to determine the adequacy of the allowance for credit losses.
The amount of capital investment is influenced by, among other things, current and projected demand for our services and products, cash flow generated by operating activities, cash required for other purposes and regulatory 59 considerations.
The amount of capital investment is influenced by, among other things, current and projected demand for our services and products, cash flow generated by operating activities, cash required for other purposes and regulatory 60 considerations.
(5) Capital ratios are for First Bank Richmond. (6) Tangible book value per share is a non-GAAP measure used by management and others within the financial services industry. Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding. 52 Financial Condition at December 31, 2024 Compared to December 31, 2023 General.
(5) Capital ratios are for First Bank Richmond. (6) Tangible book value per share is a non-GAAP measure used by management and others within the financial services industry. Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding. 53 Financial Condition at December 31, 2025 Compared to December 31, 2024 General.
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. These forward-looking statements are based on our current beliefs and expectations and, by their nature, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control.
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. These statements are based on our current beliefs and expectations and are inherently subject to significant business, economic, competitive, and regulatory uncertainties and contingencies, many of which are beyond our control.
At December 31, 2024, Richmond Mutual Bancorporation, on an unconsolidated basis, had $5.5 million in cash, noninterest-bearing deposits and liquid investments generally available for its cash needs. See also the "Consolidated Statements of Cash Flows" included in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K for further information. Regulatory Capital Requirements.
At December 31, 2025, Richmond Mutual Bancorporation, on an unconsolidated basis, had $3.0 million in cash, noninterest-bearing deposits, and liquid investments generally available for its cash needs. See also the "Consolidated Statements of Cash Flows" included in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K for further information. Regulatory Capital Requirements.
These scenarios are incorporated into our contingency funding plan, which provides the basis for the identification of our liquidity needs. As of December 31, 2024, we had approximately $10.1 million held in an interest-bearing account at the Federal Reserve. We also have the ability to borrow funds as a member of the FHLB.
These scenarios are incorporated into our contingency funding plan, which provides the basis for the identification of our liquidity needs. As of December 31, 2025, we had approximately $21.4 million held in an interest-bearing account at the Federal Reserve. We also have the ability to borrow funds as a member of the FHLB.
The effective tax rate for the year ended 2024 was 13.7% compared to 13.8% in 2023. 56 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.
The effective tax rate for the year ended 2025 was 15.2% compared to 13.7% in 2024. 57 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.
Important factors that could cause our actual results to differ materially from the results anticipated or projected, include, but are not limited to, the following: • adverse impacts to economic conditions in our local market areas and other markets where we have lending relationships; • effects of employment levels, labor shortages and inflation, a recession, or slowed economic growth; • changes in the interest rate environment, including increases or decreases in the Federal Reserve benchmark rate and the duration of such changed levels; • the impact of inflation and the Federal Reserve monetary policies; • effects of any federal government shutdown; • changes in the level and direction of loan or lease delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; • our ability to access cost-effective funding including maintaining the confidence of depositors; • unexpected outflows of uninsured deposits may require us to sell investment securities at a loss; • fluctuations in real estate values, and residential, commercial, and multi-family real estate market conditions; • competitive pressures among depository institutions, including repricing and competitors' pricing initiatives, and their impact on our market position, loan, and deposit products; • our ability to implement and change our business strategies; • competition among depository and other financial institutions and equipment financing companies; • bank failures or other adverse developments at banks and related negative press about the banking industry in general on investor and depositor sentiment; • inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on our loans and leases; • adverse changes in the securities or secondary mortgage markets; • changes in the quality or composition of our loan, lease or investment portfolios; • our ability to keep pace with technological changes, including our ability to identify and address cyber-security risks such as data security breaches, "denial of service" attacks, "hacking" and identity theft, and other attacks on our information technology systems or on our third-party vendors; • results of examinations by regulatory authorities and potential requirements to increase credit loss allowances, write-down assets, reclassify assets, change our regulatory capital position, or affect our liquidity and earnings; 47 • the inability of third-party providers to perform as expected; • our ability to manage market risk, credit risk and operational risk in the current economic environment; • our ability to enter new markets successfully and capitalize on growth opportunities; • our ability to attract and retain key employees; • changes in the financial condition, results of operations or future prospects of issuers of securities that we own; • our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto; • changes in consumer spending, borrowing and savings habits; • changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission ("SEC") or the Public Company Accounting Oversight Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; • legislative or regulatory changes, including changes in banking, securities, tax law, regulatory policies, and principles; • our ability to pay dividends on our common stock; • the potential imposition of new tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors; • other economic, competitive, governmental, regulatory, and technical factors affecting our operations, pricing, products and services; • the effects of climate change, severe weather, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest, and other external events; and • the other risks described elsewhere in this Form 10 K and our other reports filed with and furnished to the U.S.
Important factors that could cause our actual results to differ materially from the results anticipated or projected, include, but are not limited to, the following: • adverse impacts to economic conditions in our local market areas and other markets where we have lending relationships; • effects of employment levels, labor shortages and inflation, a recession, or slowed economic growth; • changes in the interest rate levels and volatility, and the timing and pace of such changes including actions by the Federal Reserve in response thereto; • the impact of inflation and the monetary and fiscal policy responses thereto, and their impact on consumer and business behavior; • the effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; • changes in the level and direction of loan or lease delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; • our ability to access cost-effective funding including maintaining the confidence of depositors; • unexpected outflows of uninsured deposits may require us to sell investment securities at a loss; • fluctuations in real estate values, and residential, commercial, and multi-family real estate market conditions; • competitive pressures among depository institutions, including repricing and competitors' pricing initiatives, and their impact on our market position, loan, and deposit products; • our ability to implement and change our business strategies; • competition among depository and other financial institutions and equipment financing companies; • the impact of bank failures or other adverse developments at banks and related negative publicity about the banking industry in general on investor and depositor sentiment; • inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on our loans and leases; • adverse changes in the securities or secondary mortgage markets; • changes in the quality or composition of our loan, lease or investment portfolios; • our ability to keep pace with technological changes, including our ability to identify and address cyber-security risks such as data security breaches, "denial of service" attacks, "hacking" and identity theft, and other attacks on our information technology systems or on our third-party vendors; • results of examinations by regulatory authorities and potential requirements to increase credit loss allowances, write-down assets, reclassify assets, change our regulatory capital position, or affect our liquidity and earnings; 47 • the inability of third-party providers to perform as expected; • our ability to manage market risk, credit risk and operational risk in the current economic environment; • our ability to enter new markets successfully and capitalize on growth opportunities; • our ability to attract and retain key employees; • changes in the financial condition, results of operations or future prospects of issuers of securities that we own; • our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto; • changes in consumer spending, borrowing and savings habits; • changes in accounting policies and practices, as may be adopted by banking regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission ("SEC") or the Public Company Accounting Oversight Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; • legislative or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; • our ability to pay dividends on our common stock; • our ability to adapt to rapid technological changes, including advancements related to artificial intelligence, digital banking platforms, and cybersecurity; • geopolitical developments and international conflicts, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, commodity prices, or economic activity in specific industry sectors; • other economic, competitive, governmental, regulatory, and technical factors affecting our operations, pricing, products and services; • the effects of climate change, severe weather, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest, and other external events; and • the other risks described elsewhere in this Form 10 K and our other reports filed with and furnished to the U.S.
For the year ended December 31, 2024, we reported net income of $9.4 million, compared with net income of $9.5 million for 2023. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with GAAP. In doing so, we have to make estimates and assumptions.
For the year ended December 31, 2025, we reported net income of $11.6 million, compared with net income of $9.4 million for 2024. 49 Critical Accounting Estimates We prepare our consolidated financial statements in accordance with GAAP. In doing so, we have to make estimates and assumptions.
The Company's allowance for credit losses on unfunded commitments, which is reported in other liabilities on the Condensed Consolidated Balance Sheets, totaled $558,000 and $1.6 million at December 31, 2024 and December 31, 2023, respectively. The decrease in the allowance for credit losses on unfunded commitments was primarily due to lower unfunded loan commitments.
The Company's allowance for credit losses on unfunded commitments, which is reported in other liabilities on the Condensed Consolidated Balance Sheets, totaled $328,000 and $558,000 at December 31, 2025 and December 31, 2024, respectively. The decrease in the allowance for credit losses on unfunded commitments was primarily due to lower unfunded loan commitments.
The decrease in stockholders’ equity primarily was the result of the payment of $5.7 million in dividends to Company stockholders, the repurchase of $5.0 million of Company common stock, and an increase in Accumulated Other Comprehensive Loss ("AOCL") of $2.8 million, partially offset by net income of $9.4 million.
The increase in stockholders’ equity primarily was the result of net income of $11.6 million and an $11.2 million decrease in Accumulated Other Comprehensive Loss ("AOCL"), partially offset by the payment of $5.8 million in dividends to Company stockholders and the repurchase of $5.6 million of Company common stock.
At December 31, 2024, on a consolidated basis, we had $1.5 billion in assets, $1.2 billion in loans, $1.1 billion in deposits, and $132.9 million in stockholders’ equity. First Bank Richmond’s risk-based capital ratio at December 31, 2024 was 14.2%, exceeding the 10.0% requirement for a well-capitalized institution.
At December 31, 2025, on a consolidated basis, we had $1.5 billion in assets, $1.2 billion in loans, $1.1 billion in deposits, and $145.8 million in stockholders’ equity. First Bank Richmond’s risk-based capital ratio at December 31, 2025 was 14.6%, exceeding the 10.0% requirement for a well-capitalized institution.
Assuming continued payment during 2025 at the current dividend rate of $0.14 per share, our average total dividend paid each quarter would be approximately $1.5 million based on the number of our current outstanding shares at December 31, 2024.
Assuming continued payment during 2026 at the current dividend rate of $0.15 per share, our average total dividend paid each quarter would be approximately $1.6 million based on the number of our current outstanding shares at December 31, 2025.
In general, stock repurchase plans allow us to proactively manage our capital position and return excess capital to shareholders. Shares purchased under such plans also provide us with shares of common stock necessary to satisfy obligations related to stock compensation awards.
From time to time, our Board of Directors has authorized stock repurchase plans. In general, stock repurchase plans allow us to proactively manage our capital position and return excess capital to shareholders. Shares purchased under such plans also provide us with shares of common stock necessary to satisfy obligations related to stock compensation awards.
Credit metrics are being reviewed and stress testing is being performed on the loan portfolio on an ongoing basis. Potentially higher risk segments of the portfolio, such as hotels and restaurants, are being closely monitored. Investment Securities. Investment securities decreased $25.9 million, or 9.0%, to $261.7 million at December 31, 2024, from $287.6 million at December 31, 2023.
Credit metrics are being reviewed and stress testing is being performed on the loan portfolio on an ongoing basis. Potentially higher risk segments of the portfolio, such as hotels and restaurants, are being closely monitored. Investment Securities. Investment securities decreased $7.0 million, or 2.7%, to $254.7 million at December 31, 2025, from $261.7 million at December 31, 2024.
The AOCL impact to equity, after tax effecting the unrealized loss, was $45.8 million at December 31, 2024, compared to $43.0 million at December 31, 2023. First Bank Richmond was considered “well-capitalized” as defined by all regulatory standards as of December 31, 2024. 54 Comparison of Results of Operations for the Years Ended December 31, 2024 and 2023 General .
The AOCL impact to equity, after tax effecting the unrealized loss, was $34.6 million at December 31, 2025, compared to $45.8 million at December 31, 2024. First Bank Richmond was considered “well-capitalized” as defined by all regulatory standards as of December 31, 2025. 55 Comparison of Results of Operations for the Years Ended December 31, 2025 and 2024 General .
As of December 31, 2024, based upon available, pledgeable collateral, our total remaining borrowing capacity with the FHLB was approximately $106.9 million. Furthermore, at December 31, 2024, we had approximately $179.7 million in securities that were unencumbered by a pledge and could be used to support additional borrowings through repurchase agreements or the Federal Reserve discount window, as needed.
As of December 31, 2025, based upon available, pledgeable collateral, our total remaining borrowing capacity with the FHLB was approximately $129.2 million. Furthermore, at December 31, 2025, we had approximately $139.8 million in securities that were unencumbered by a pledge and could be used to support additional borrowings through repurchase agreements or the Federal Reserve discount window, as needed.
The allowance for credit losses on loans and leases totaled $15.8 million, or 1.34% of total loans and leases outstanding at December 31, 2024, compared to $15.7 million, or 1.42%, of total loans and leases at December 31, 2023. Net charge-offs during 2024 were $1.5 million, compared to net charge-offs of $678,000 during 2023.
The allowance for credit losses on loans and leases totaled $16.5 million, or 1.38% of total loans and leases outstanding at December 31, 2025, compared to $15.8 million, or 1.34%, of total loans and leases at December 31, 2024. Net charge-offs during 2025 were $1.7 million, compared to net charge-offs of $1.5 million during 2024.
To achieve these goals, we will focus on the following strategies: Lending. We believe that commercial lending offers an opportunity to enhance our profitability while managing credit, interest rate and operational risk. We seek quality commercial loan opportunities in our existing markets and purchase loan participations that complement our existing portfolios.
We believe that commercial lending offers an opportunity to enhance our profitability while managing credit, interest rate and operational risk. We seek quality commercial loan opportunities in our existing markets and purchase loan participations that complement our existing portfolios. We will continue to focus our efforts on our existing markets.
We paid regular quarterly cash dividends of $0.14 per common share during both 2024 and 2023. This equates to a dividend payout ratio of 60.8% in 2024 and 62.4% in 2023.
We paid regular quarterly cash dividends of $0.15 per common share during 2025, compared to $0.14 per common share in 2024. This equates to a dividend payout ratio of 50.4% in 2025 and 60.8% in 2024.
Forward-looking statements are not statements of historical fact, are based on certain assumptions and are generally identified by use of words such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” These forward-looking statements include, but are not limited to: • statements of our goals, intentions and expectations; • statements regarding our business plans, prospects, growth and operating strategies; 46 • statements regarding the quality of our loan and investment portfolios; and • estimates of our risks and future costs and benefits.
These statements are generally identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions, or by future or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” These forward-looking statements include, but are not limited to: • statements of our goals, intentions and expectations; • statements regarding our business plans, prospects, growth and operating strategies; • statements regarding the quality of our loan, lease, and investment portfolios; 46 • statements regarding the expected benefits of proposed transactions, including our proposed merger with Farmers Bancorp; and • estimates of our risks and future costs and benefits.
Total assets increased $44.3 million, or 3.0%, to $1.5 billion at December 31, 2024 from December 31, 2023. The increase was driven by a $68.8 million, or 6.3%, increase in the loan and lease portfolio, net of allowance for credit losses on loans and leases, partially offset by a $25.9 million, or 9.0% decrease in investment securities.
Total assets increased $20.9 million, or 1.4%, to $1.5 billion at December 31, 2025 from December 31, 2024. The increase was driven by a $17.9 million, or 1.5%, increase in the loan and lease portfolio, net of allowance for credit losses on loans and leases, partially offset by a $7.0 million, or 2.7% decrease in investment securities.
These include payments related to (i) long-term borrowings (Note 11: Federal Home Loan Bank Advances), (ii) time deposits with stated maturity dates (Note 10: Deposits) and (iii) commitments to extend credit and standby letters of credit (Note 14: Commitments and Contingent Liabilities).
These include payments related to (i) long-term borrowings (Note 12: Borrowings), (ii) time deposits with stated maturity dates (Note 11: Deposits) and (iii) commitments to extend credit and standby letters of credit (Note 15: Commitments and Contingent Liabilities).
Interest earned on investment securities, excluding FHLB stock, decreased $332,000, or 4.6%, due to an $11.9 million decrease in the average balance of the portfolio. Dividends on FHLB stock increased $381,000, or 44.8%, during 2024 compared to the prior year.
Interest earned on investment securities, excluding FHLB stock, decreased $401,000, or 5.8%, due to an $18.9 million decrease in the average balance of the portfolio. Dividends on FHLB stock increased $4,000 during 2025 compared to the prior year.
Uses of capital during 2024 included $5.7 million of dividends paid on common stock, $5.0 million of stock repurchases, and an increase in AOCL of $2.8 million. The increase in AOCL primarily was due to the reduction in mark-to-market values associated with the Company's available-for-sale investment securities portfolio.
The decrease in AOCL primarily was due to the improvement in mark-to-market values associated with the Company's available-for-sale investment securities portfolio. Uses of capital during 2025 included $5.8 million of dividends paid on common stock and $5.6 million of stock repurchases.
The increase in AOCL was primarily due to reductions in mark-to-market values associated with our available for sale investment securities portfolio, due to increases in market interest rates. At December 31, 2024, the available for sale portfolio had a net unrealized loss of $58.0 million compared to a net unrealized loss of $54.5 million at December 31, 2023.
The decrease in AOCL was primarily due to increases in mark-to-market values associated with our available for sale investment securities portfolio, resulting from a reduction in market rates of interest. At December 31, 2025, the available for sale portfolio had a net unrealized loss of $43.7 million compared to a net unrealized loss of $58.0 million at December 31, 2024.
The repurchase program does not obligate the Company to purchase any particular number of shares. See Part II, Item 5 - "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities." Liquidity. Liquidity measures the ability to meet current and future cash flow needs as they become due.
See Part II, Item 5 - "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities." Liquidity. Liquidity measures the ability to meet current and future cash flow needs as they become due.
Interest earned on loans and leases increased $12.8 million, or 21.8%, due to a $101.5 million increase in the average balance of and a 62 basis point increase in the average yield earned on loans and leases.
Interest earned on loans and leases increased $5.8 million, or 8.1%, due to a $37.9 million increase in the average balance of and a 29 basis point increase in the average yield earned on loans and leases.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Note Regarding Forward-Looking Statements Certain matters in this Form 10-K may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Note Regarding Forward-Looking Statements Certain statements contained in this Form 10-K may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact and are based on certain assumptions and expectations regarding future events.
Actual Minimum for Capital Adequacy Purposes Minimum to be Categorized as "Well-Capitalized" Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio As of December 31, 2024 (Dollars in thousands) Total risk-based capital (to risk weighted assets) $ 181,415 14.2 % $ 102,014 8.0 % $ 127,518 10.0 % Tier 1 risk-based capital (to risk weighted assets) 165,471 13.0 76,511 6.0 102,014 8.0 Common equity tier 1 capital (to risk weighted assets) 165,471 13.0 57,383 4.5 82,887 6.5 Tier 1 leverage (core) capital (to adjusted tangible assets) 165,471 10.7 61,579 4.0 76,974 5.0 As of December 31, 2023 Total risk-based capital (to risk weighted assets) $ 174,938 14.1 % $ 99,247 8.0 % $ 124,059 10.0 % Tier 1 risk-based capital (to risk weighted assets) 159,409 12.8 74,435 6.0 99,247 8.0 Common equity tier 1 capital (to risk weighted assets) 159,409 12.8 55,826 4.5 80,638 6.5 Tier 1 leverage (core) capital (to adjusted tangible assets) 159,409 10.6 59,931 4.0 74,914 5.0 60 Pursuant to the capital regulations of the FDIC and the other federal banking agencies, First Bank Richmond must maintain a capital conservation buffer consisting of additional common equity tier 1 (“CET1”) capital greater than 2.5% of risk-weighted assets above the required minimum levels of risk-based CET1 capital, tier 1 capital and total capital in order to avoid limitations on paying dividends, repurchasing shares, and paying discretionary bonuses.
Actual Minimum for Capital Adequacy Purposes Minimum to be Categorized as "Well-Capitalized" Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio As of December 31, 2025 (Dollars in thousands) Total risk-based capital (to risk weighted assets) $ 186,532 14.6 % $ 101,960 8.0 % $ 127,451 10.0 % Tier 1 risk-based capital (to risk weighted assets) 170,591 13.4 76,470 6.0 101,960 8.0 Common equity tier 1 capital (to risk weighted assets) 170,591 13.4 57,353 4.5 82,843 6.5 Tier 1 leverage (core) capital (to adjusted tangible assets) 170,591 11.0 62,290 4.0 77,862 5.0 As of December 31, 2024 Total risk-based capital (to risk weighted assets) $ 181,415 14.2 % $ 102,014 8.0 % $ 127,518 10.0 % Tier 1 risk-based capital (to risk weighted assets) 165,471 13.0 76,511 6.0 102,014 8.0 Common equity tier 1 capital (to risk weighted assets) 165,471 13.0 57,383 4.5 82,887 6.5 Tier 1 leverage (core) capital (to adjusted tangible assets) 165,471 10.7 61,579 4.0 76,974 5.0 61 Pursuant to the capital regulations of the FDIC and the other federal banking agencies, First Bank Richmond must maintain a capital conservation buffer consisting of additional common equity tier 1 (“CET1”) capital greater than 2.5% of risk-weighted assets above the required minimum levels of risk-based CET1 capital, tier 1 capital and total capital in order to avoid limitations on paying dividends, repurchasing shares, and paying discretionary bonuses.
The amount of dividends, if any, we may pay may be limited as more fully discussed in "Note 18: Regulatory Capital" in the accompanying notes to consolidated financial statements contained in Item 8 of this Form 10-K. 58 Stock Repurchase Plans. From time to time, our Board of Directors has authorized stock repurchase plans.
The amount of dividends, if any, we may pay may be limited as more fully discussed in "Note 18: Dividend and Capital Restrictions" and "Note 19: Regulatory Capital" in the accompanying notes to consolidated financial statements contained in Item 8 of this Form 10-K. 59 Stock Repurchase Plans.
As such, fluctuations in interest rates have a significant impact not only upon our net income but also upon the cash flows related to those assets and liabilities and the market value of our assets and liabilities.
Changes in interest rates are our primary market risk as our balance sheet is almost entirely comprised of interest-earning assets and interest-bearing liabilities. As such, fluctuations in interest rates have a significant impact not only upon our net income but also upon the cash flows related to those assets and liabilities and the market value of our assets and liabilities.
At December 31, 2024 2023 (In thousands) Selected Financial Condition Data: Total assets $ 1,504,875 $ 1,461,024 Loans and leases, net (1) 1,158,879 1,090,073 Securities available for sale, at fair value 258,192 282,688 Investment securities, at amortized cost 3,498 4,950 FHLB stock 13,907 12,647 Deposits 1,093,940 1,041,140 FHLB advances 265,000 271,000 Stockholders’ equity 132,872 134,860 _____________________ (1) Net of allowance for credit losses, loans in process and deferred loan fees. 50 Years Ended December 31, 2024 2023 (In thousands) Selected Operations Data: Total interest income $ 80,526 $ 67,410 Total interest expense 41,819 29,748 Net interest income 38,707 37,662 Provision for credit losses 550 532 Net interest income after provision for credit losses 38,157 37,130 Service charges on deposit accounts 1,239 1,115 Card fee income 1,237 1,259 Loan and lease servicing fees 463 448 Gain on loan and lease sales 555 518 Loss on sales of securities (51) — Other income 1,315 1,271 Total non-interest income 4,758 4,611 Total non-interest expenses 32,052 30,738 Income before provision for income taxes 10,863 11,003 Provision for income taxes 1,486 1,516 Net income $ 9,377 $ 9,487 51 At or For the Years Ended December 31, 2024 2023 Selected Financial Ratios and Other Data: Performance ratios: Return on average assets (ratio of net income to average total assets) 0.63 % 0.68 % Return on average equity (ratio of net income to average equity) 7.03 % 7.36 % Yield on interest-earning assets 5.55 % 4.98 % Rate paid on interest-bearing liabilities 3.37 % 2.59 % Interest rate spread information: Average during period 2.18 % 2.39 % End of period 2.15 % 2.27 % Net interest margin (1) 2.67 % 2.78 % Operating expense to average total assets 2.15 % 2.20 % Average interest-earning assets to average interest-bearing liabilities 116.96 % 117.81 % Efficiency ratio (2) 73.74 % 72.71 % Asset quality ratios: Non-performing assets to total assets (3) 0.45 % 0.56 % Non-performing loans and leases to total gross loans and leases (4) 0.58 % 0.72 % Allowance for credit losses on loans and leases to non-performing loans and leases (4) 232.99 % 195.80 % Allowance for credit losses on loans and leases to total gross loans and leases 1.34 % 1.42 % Net charge-offs to average outstanding loans and leases during the period 0.13 % 0.06 % Capital ratios: Common equity tier 1 capital (to risk weighted assets) (5) 12.98 % 12.85 % Tier 1 leverage (core) capital (to adjusted tangible assets) (5) 10.75 % 10.64 % Tier 1 risk-based capital (to risk weighted assets) (5) 12.98 % 12.85 % Total risk-based capital (to risk weighted assets) (5) 14.23 % 14.10 % Equity to total assets at end of period 8.83 % 9.23 % Average equity to average assets 8.93 % 9.20 % Per share data: Basic earnings per share $ 0.93 $ 0.91 Diluted earnings per share 0.92 0.91 Cash dividends paid 0.56 0.56 Book value at year end 12.29 12.03 Tangible book value at year end (6) 12.29 12.03 Other data: Number of full-service offices 12 12 Full-time equivalent employees 173 176 _____________________ (1) Net interest income divided by average interest earning assets.
At December 31, 2025 2024 (In thousands) Selected Financial Condition Data: Total assets $ 1,525,791 $ 1,504,875 Loans and leases, net (1) 1,176,813 1,158,879 Securities available for sale, at fair value 251,915 258,192 Investment securities, at amortized cost 2,748 3,498 FHLB stock 13,907 13,907 Deposits 1,114,893 1,093,940 FHLB advances 240,000 265,000 Stockholders’ equity 145,781 132,872 _____________________ (1) Net of allowance for credit losses, loans in process and deferred loan fees. 51 Years Ended December 31, 2025 2024 (In thousands) Selected Operations Data: Total interest income $ 85,908 $ 80,526 Total interest expense 42,062 41,819 Net interest income 43,846 38,707 Provision for credit losses 2,153 550 Net interest income after provision for credit losses 41,693 38,157 Service charges on deposit accounts 1,266 1,239 Card fee income 1,317 1,237 Loan and lease servicing fees 681 463 Gain on loan and lease sales 409 555 Loss on sales of securities (156) (51) Other income 1,546 1,315 Total non-interest income 5,063 4,758 Total non-interest expenses 33,103 32,052 Income before provision for income taxes 13,653 10,863 Provision for income taxes 2,076 1,486 Net income $ 11,577 $ 9,377 52 At or For the Years Ended December 31, 2025 2024 Selected Financial Ratios and Other Data: Performance ratios: Return on average assets (ratio of net income to average total assets) 0.76 % 0.63 % Return on average equity (ratio of net income to average equity) 8.57 % 7.03 % Yield on interest-earning assets 5.83 % 5.55 % Rate paid on interest-bearing liabilities 3.34 % 3.37 % Interest rate spread information: Average during period 2.49 % 2.18 % End of period 2.45 % 2.15 % Net interest margin (1) 2.97 % 2.67 % Operating expense to average total assets 2.19 % 2.15 % Average interest-earning assets to average interest-bearing liabilities 117.04 % 116.96 % Efficiency ratio (2) 67.68 % 73.74 % Asset quality ratios: Non-performing assets to total assets (3) 1.14 % 0.45 % Non-performing loans and leases to total gross loans and leases (4) 1.46 % 0.58 % Allowance for credit losses on loans and leases to non-performing loans and leases (4) 94.64 % 232.99 % Allowance for credit losses on loans and leases to total gross loans and leases 1.38 % 1.34 % Net charge-offs to average outstanding loans and leases during the period 0.14 % 0.13 % Capital ratios: Common equity tier 1 capital (to risk weighted assets) (5) 13.38 % 12.98 % Tier 1 leverage (core) capital (to adjusted tangible assets) (5) 10.95 % 10.75 % Tier 1 risk-based capital (to risk weighted assets) (5) 13.38 % 12.98 % Total risk-based capital (to risk weighted assets) (5) 14.64 % 14.23 % Equity to total assets at end of period 9.55 % 8.83 % Average equity to average assets 8.92 % 8.93 % Per share data: Basic earnings per share $ 1.20 $ 0.93 Diluted earnings per share 1.17 0.92 Cash dividends paid 0.60 0.56 Book value at year end 13.88 12.29 Tangible book value at year end (6) 13.88 12.29 Other data: Number of full-service offices 13 12 Full-time equivalent employees 180 173 _____________________ (1) Net interest income divided by average interest earning assets.
Since Richmond Mutual Bancorporation is a holding company and does not conduct operations, its primary sources of liquidity are interest on investment securities purchased with proceeds from our initial public offering, dividends up streamed from First Bank Richmond and borrowings from outside sources.
Since Richmond Mutual Bancorporation is a holding company and does not conduct operations, its primary sources of liquidity are interest on investment securities purchased with proceeds from our initial public offering, dividends upstreamed from First Bank Richmond, and borrowings from outside sources. Banking regulations may limit the amount of dividends that may be paid to us by First Bank Richmond.
Total non-interest expense increased $1.3 million, or 4.3%, to $32.1 million during 2024 compared to 2023, primarily due to increases in salaries and employee benefits, deposit insurance expense, data processing fees, and legal and professional fees, partially offset by decreases in equipment expenses and other expenses.
Total non-interest expense increased $1.1 million, or 3.3%, to $33.1 million during 2025 compared to 2024, primarily due to increases in other expenses, salaries and employee benefits, data processing fees, and net occupancy expenses, partially offset by a decrease in deposit insurance expense.
At December 31, 2024, our commercial loan portfolio, which includes commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, totaled $816.5 million, or 69.5% of total loans and leases, with approximately $236.9 million of these loans, or 20.2% of our total loans and leases, located in the Columbus, Ohio market. Deposit Services.
At December 31, 2025, our commercial loan portfolio, which includes commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, totaled $837.4 million, or 70.2% of total loans and leases, with approximately $223.1 million of these loans, or 18.7% of our total loans and leases, located in the Columbus, Ohio market. Deposit Services.
Total interest income for 2024 increased $13.1 million, or 19.5%, over 2023. The increase primarily was a result of a 57 basis point increase in the average yield on interest earning assets, alongside a $97.0 million increase in the average balance of interest earning assets.
Interest Income . Total interest income for 2025 increased $5.4 million, or 6.7%, over 2024. The increase primarily was a result of a 28 basis point increase in the average yield on interest earning assets, alongside a $22.3 million increase in the average balance of interest earning assets.
Shareholders' equity totaled $132.9 million at December 31, 2024 and $134.9 million at December 31, 2023. In addition to net income of $9.4 million, other sources of capital during 2024 included $661,000 related to the allocation of ESOP shares during the year and $1.5 million related to stock-based compensation.
Shareholders' equity totaled $145.8 million at December 31, 2025 and $132.9 million at December 31, 2024. In addition to net income of $11.6 million, other sources of capital during 2025 included an $11.2 million decrease in AOCL, $738,000 related to the allocation of ESOP shares during the year, and $816,000 related to stock-based compensation.
Banking regulations may limit the amount of dividends that may be paid to us by First Bank Richmond. "Note 18: Regulatory Capital" in the accompanying notes to consolidated financial statements contained in Part II, Item 8 and "How We Are Regulated - Dividends" contained in Part I, Item I of this Form 10-K.
"Note 19: Regulatory Capital" in the accompanying notes to consolidated financial statements contained in Part II, Item 8 and "How We Are Regulated - Dividends" contained in Part I, Item I of this Form 10-K.
We will continue 49 to enhance our offering of retail deposit products to maintain and increase our market share, while continuing to build our product offering of commercial deposit products to strengthen our relationships with our business customers. Core deposits represented 70.1% of our total deposits as of December 31, 2024. Balance Sheet Growth .
We will continue to enhance our offering of retail deposit products to maintain and increase our market share, while continuing to build our product offering of commercial deposit products to strengthen our relationships with our business customers.
The allowance for credit losses on loans and leases as a percentage of the total loan and lease portfolio was 1.34% at year-end 2024, compared to 1.42% at year-end 2023. Net charge-offs in 2024 equaled 0.13% of total average loans and leases outstanding compared to net charge-offs of 0.06% of total average loans and leases outstanding in 2023.
The allowance for credit losses on loans and leases as a percentage of the total loan and lease portfolio was 1.38% at year-end 2025, compared to 1.34% at year-end 2024.
The average rate paid on savings and money market accounts increased 57 basis points to 2.39% from 1.82% in 2023, while the average balance of those accounts increased $11.4 million, or 4.2%, to $285.9 million in 2024 compared to $274.5 million in 2023, resulting in a $1.8 million increase in interest expense.
The average rate paid on savings and money market accounts decreased nine basis points to 2.30% from 2.39% in 2024, while the average balance of those accounts increased $26.3 million, or 9.2%, to $312.3 million in 2025 compared to $285.9 million in 2024, resulting in a $341,000 increase in interest expense.
The decrease was primarily due to maturities and paydowns of securities of $22.1 million, the sale of $6.9 million of available-for-sale securities, and a $3.5 million downward mark-to-market adjustment in the fair value of securities available for sale, partially offset by the purchase of $7.5 million of new securities. Deposits.
The decrease was primarily due to maturities and paydowns of securities of $19.3 million and the sale of $6.8 million of available-for-sale securities, partially offset by a $14.2 million upward mark-to-market adjustment in the fair value of securities available for sale due to a reduction in market rates of interest. Deposits.
At December 31, 2024 2023 Amount Percent Amount Percent (Dollars in thousands) Real estate loans: Residential mortgage (1) $ 172,644 14.69 % $ 162,123 14.65 % Home equity lines of credit 16,826 1.43 10,904 0.99 Multi-family 185,864 15.81 138,757 12.54 Commercial mortgage 371,705 31.63 341,633 30.87 Construction and development 132,570 11.28 157,805 14.26 Total real estate loans 879,609 74.84 811,222 73.31 Consumer loans 21,218 1.81 23,264 2.10 Commercial business loans and leases: Commercial and industrial 126,367 10.75 115,428 10.43 Leases 148,102 12.60 156,598 14.15 Total commercial business loans and leases 274,469 23.35 272,026 24.58 Total loans and leases 1,175,296 100.00 % 1,106,512 100.00 % Less: Deferred fees and discounts 626 776 Allowance for credit losses on loans and leases 15,791 15,663 Total loans and leases, net $ 1,158,879 $ 1,090,073 _____________________ (1) Includes $8.3 million and $6.4 million of loans secured by second mortgages on residential properties at December 31, 2024 and 2023, respectively. 53 Nonperforming loans and leases, consisting of nonaccrual loans and leases and accruing loan and leases more than 90 days past due, totaled $6.8 million, or 0.58% of total loans and leases at December 31, 2024, compared to $8.0 million, or 0.72% of total loans and leases at December 31, 2023.
At December 31, 2025 2024 Amount Percent Amount Percent (Dollars in thousands) Real estate loans: Residential mortgage (1) $ 171,063 14.33 % $ 172,644 14.69 % Home equity lines of credit 20,147 1.69 16,826 1.43 Multi-family 208,894 17.50 185,864 15.81 Commercial mortgage 414,316 34.71 371,705 31.63 Construction and development 71,705 6.01 132,570 11.28 Total real estate loans 886,125 74.23 879,609 74.84 Consumer loans 19,280 1.62 21,218 1.81 Commercial business loans and leases: Commercial and industrial 142,508 11.94 126,367 10.75 Leases 145,806 12.21 148,102 12.60 Total commercial business loans and leases 288,314 24.15 274,469 23.35 Total loans and leases 1,193,719 100.00 % 1,175,296 100.00 % Less: Deferred fees and discounts 440 626 Allowance for credit losses on loans and leases 16,466 15,791 Total loans and leases, net $ 1,176,813 $ 1,158,879 _____________________ (1) Includes $8.6 million and $8.3 million of loans secured by second mortgages on residential properties at December 31, 2025 and 2024, respectively. 54 Nonperforming loans and leases, consisting of nonaccrual loans and leases and accruing loan and leases 90 days or more past due, totaled $17.4 million, or 1.46% of total loans and leases at December 31, 2025, compared to $6.8 million, or 0.58% of total loans and leases at December 31, 2024.
The average balance of interest-bearing checking accounts decreased $6.1 million, or 4.1%, to $141.9 million in 2024 from $148.0 million in 2023, while the average rate paid on interest-bearing checking accounts increased 42 basis points to 1.13% in 2024 from 0.71% in 2023, resulting in a $555,000 increase in interest expense.
The average balance of interest-bearing checking accounts decreased $748,000, or 0.5%, to $141.2 million in 2025 from $141.9 million in 2024, while the average rate paid on interest-bearing checking accounts decreased six basis points to 1.07% in 2025 from 1.13% in 2024, resulting in a $102,000 decrease in interest expense. Net Interest Income .
Loan and lease servicing fees increased $15,000, or 3.4%, to $463,000 in 2024 as compared to 2023, due to increased mortgage originations. Partially offsetting these increases were net losses recognized on the sale of securities available-for-sale of $51,000, compared to no losses or gains recognized in 2023.
Loan and lease servicing fees increased $217,000, or 46.9%, to $681,000 in 2025 as compared to 2024, due to increased fees from the payoff of serviced loans. Partially offsetting these increases were net losses recognized on the sale of securities available-for-sale of $156,000, compared to net losses of $51,000 recognized in 2024.
The increase in loans and leases was primarily funded by a $52.8 million, or 5.1%, increase in deposits. Loans and Leases. Our loan and lease portfolio, net of allowance for credit losses on loans and leases, increased $68.8 million, or 6.3%, to $1.2 billion at December 31, 2024 from $1.1 billion at December 31, 2023.
Our loan and lease portfolio, net of allowance for credit losses on loans and leases, increased $17.9 million, or 1.5%, to $1.2 billion at December 31, 2025 from $1.2 billion at December 31, 2024.
The provision for credit losses reflects the amount required to maintain the allowance for credit losses at an appropriate level based upon management’s evaluation of the adequacy of collective and individual loss reserves. Net charge-offs during 2024 were $1.5 million, compared to net charge-offs of $678,000 in 2023.
The provision for credit losses reflects the amount required to maintain the allowance for credit losses at an appropriate level based upon management’s evaluation of the adequacy of collective and individual loss reserves and reflects higher required reserves driven by the significant increase in nonperforming loans during 2025.
The average rate paid on certificate of deposit accounts increased 89 basis points to 4.18% from 3.29% in 2023, while the average balance of certificate of deposit accounts increased $47.9 million, or 9.4%, to $557.2 million in 2024 compared to $509.3 million in 2023, resulting in a $6.5 million increase in interest expense.
The average balance of certificate of deposit accounts decreased $13.5 million, or 2.4%, to $543.7 million in 2025 from $557.2 million in 2024, while the average rate paid on certificate of deposit accounts decreased three basis points to 4.15% in 2025 from 4.18% in 2024, resulting in a $742,000 decrease in interest expense.
Total deposits increased $52.8 million, or 5.1%, to $1.1 billion at December 31, 2024 compared to December 31, 2023. This increase was primarily due to an increase in savings and money-market accounts of $44.5 million, or 17.3%, as well as an increase in non-brokered time deposits of $40.3 million, or 16.2%.
Total deposits increased $21.0 million, or 1.9%, to $1.1 billion at December 31, 2025 compared to December 31, 2024. This increase was primarily due to increases in retail (non-brokered) time deposits of $26.0 million, or 9.0%, savings and money market accounts of $18.0 million, or 6.0%, and interest-bearing demand deposits of $8.6 million, or 6.3%.
The average yield on FHLB stock during 2024 was 8.89%, up 97 basis points from 7.92% during the prior year, while the average balance of FHLB stock outstanding during 2024 was $13.9 million, up from $10.8 million during 2023. Interest on cash and cash equivalents increased $265,000 due to a 50 basis point increase in the average yield.
The average yield on FHLB stock during 2025 and 2024 was 8.89%, while the average balance of FHLB stock outstanding during 2025 and 2024 was $13.9 million. Interest on cash and cash equivalents decreased $9,000 due to a 74 basis point decrease in the average yield, partially offset by a $3.2 million increase in the average balance. Interest Expense .
Net income totaled $9.4 million for 2024 compared to $9.5 million in 2023, a decrease of $109,000 or 1.2%.
Net income totaled $11.6 million for 2025 compared to $9.4 million in 2024, an increase of $2.2 million or 23.5%.
We also experienced a $10.9 million, or 9.5%, increase in commercial and industrial loans, and a $16.4 million, or 9.5%, increase in residential real estate loans (including home equity lines of credit).
We also experienced a $16.1 million, or 12.8%, increase in commercial and industrial loans, and a $1.7 million, or 0.9%, increase in residential real estate loans (including home equity lines of credit), which was attributable to a $3.3 million increase in home equity lines of credit, partially offset by a $1.6 million decrease in residential mortgage loans.
The majority of the growth occurred in multi-family loans which increased $47.1 million, or 33.9%, to $185.9 million, and in commercial real estate loans which increased $30.1 million, or 8.8%, to $371.7 million at December 31, 2024 compared to the prior year.
The majority of the growth occurred in commercial real estate loans which increased $42.6 million, or 11.5%, to $414.3 million, and in multi-family loans which increased $23.0 million, or 12.4%, to $208.9 million at December 31, 2025 compared to the prior year.
Years Ended December 31, 2024 2023 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 $ 1,145,973 $ 71,596 6.25 % $ 1,044,471 $ 58,794 5.63 % Securities 273,706 6,871 2.51 % 285,600 7,203 2.52 % FHLB stock 13,863 1,232 8.89 % 10,750 851 7.92 % Cash and cash equivalents and other 18,002 827 4.59 % 13,728 562 4.09 % Total interest-earning assets 1,451,544 80,526 5.55 % 1,354,549 67,410 4.98 % Non-earning assets 41,860 45,212 Total assets 1,493,404 1,399,761 Interest-bearing liabilities: Savings and money market accounts 285,946 6,833 2.39 % 274,497 4,989 1.82 % Interest-bearing checking accounts 141,902 1,609 1.13 % 147,964 1,054 0.71 % Certificate accounts 557,216 23,309 4.18 % 509,316 16,767 3.29 % Borrowings 255,969 10,068 3.93 % 218,025 6,938 3.18 % Total interest-bearing liabilities 1,241,033 41,819 3.37 % 1,149,802 29,748 2.59 % Noninterest-bearing demand deposits 105,356 107,192 Other liabilities 13,696 13,924 Stockholders' equity 133,319 128,843 Total liabilities and stockholders' equity 1,493,404 1,399,761 Net interest income $ 38,707 $ 37,662 Net earning assets $ 210,511 $ 204,747 Net interest rate spread (1) 2.18 % 2.39 % Net interest margin (2) 2.67 % 2.78 % Average interest-earning assets to average interest-bearing liabilities 116.96 % 117.81 % _____________________ (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.
Years Ended December 31, 2025 2024 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 $ 1,183,896 $ 77,383 6.54 % $ 1,145,973 $ 71,596 6.25 % Securities 254,838 6,470 2.54 % 273,706 6,871 2.51 % FHLB stock 13,907 1,236 8.89 % 13,863 1,232 8.89 % Cash and cash equivalents and other 21,224 818 3.85 % 18,002 827 4.59 % Total interest-earning assets 1,473,865 85,907 5.83 % 1,451,544 80,526 5.55 % Non-earning assets 39,869 41,860 Total assets 1,513,734 1,493,404 Interest-bearing liabilities: Savings and money market accounts 312,272 7,174 2.30 % 285,946 6,833 2.39 % Interest-bearing checking accounts 141,154 1,507 1.07 % 141,902 1,609 1.13 % Certificate accounts 543,714 22,567 4.15 % 557,216 23,309 4.18 % Borrowings 262,099 10,813 4.13 % 255,969 10,068 3.93 % Total interest-bearing liabilities 1,259,239 42,061 3.34 % 1,241,033 41,819 3.37 % Noninterest-bearing demand deposits 105,426 105,356 Other liabilities 13,971 13,696 Stockholders' equity 135,098 133,319 Total liabilities and stockholders' equity 1,513,734 1,493,404 Net interest income $ 43,846 $ 38,707 Net earning assets $ 214,626 $ 210,511 Net interest rate spread (1) 2.49 % 2.18 % Net interest margin (2) 2.97 % 2.67 % Average interest-earning assets to average interest-bearing liabilities 117.04 % 116.96 % _____________________ (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.
Interest expense on borrowings, consisting solely of FHLB advances, increased $3.1 million, or 45.1%, due to a 75 basis point increase in the average rate paid to 3.93% in 2024 from 3.18% in 2023, and a $37.9 million, or 17.4%, increase in the average balance of borrowings to $256.0 million in 2024 from $218.0 million in 2023.
The average rate paid on borrowings, consisting primarily of FHLB advances, increased 20 basis points to 4.13% from 3.93% in 2024, while the average balance of borrowings increased $6.1 million, or 2.4%, to $262.1 million in 2025 compared to $256.0 million in 2024, resulting in a $745,000 increase in interest expense.
On May 16, 2024, the Company announced that the Board of Directors approved an extension of the Company's existing stock repurchase program, now set to expire on June 6, 2025. As of December 31, 2024, the Company had approximately 472,944 shares available for repurchase under its existing stock repurchase program.
On May 16, 2024, the Company announced that the Board of Directors approved an extension of the Company's existing stock repurchase program, which expired on June 6, 2025. As of December 31, 2025, the Company did not have a publicly announced stock repurchase program in place.
In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.
They are also subject to assumptions regarding future business strategies and decisions that are subject to change.
The decrease in net income was due to a $1.3 million, or 4.3%, increase in non-interest expense, partially offset by a $1.0 million, or 2.8%, increase in net interest income, a $147,000, or 3.2%, increase in non-interest income, and a $30,000, or 1.9%, decrease in income tax expense. Interest Income .
The increase in net income was due to a $5.1 million, or 13.3%, increase in net interest income and a $304,000 increase in noninterest income, partially offset by a $1.6 million, or 291.3%, increase in provision for credit losses, a $1.1 million, or 3.3%, increase in noninterest expense, and a $590,000, or 39.7%, increase in income tax expense.
Net Interest Income . Net interest income before the provision for credit losses increased $1.0 million, or 2.8%, to $38.7 million in 2024 compared to $37.7 million in 2023, primarily due to growth in interest-earning assets, which more than offset the impact of a lower net interest margin.
Net interest income before the provision for credit losses increased $5.1 million, or 13.3%, to $43.8 million in 2025 compared to $38.7 million in 2024, primarily due to a 31 basis point increase in the average interest rate spread, and a $4.1 million increase in average net earning assets.
At December 31, 2024, brokered deposits equaled $257.6 million, or 23.5% of total deposits compared to $268.8 million, or 25.8% of total deposits at December 31, 2023. At December 31, 2024, noninterest-bearing deposits totaled $110.1 million, or 10.1% of total deposits, compared to $114.4 million, or 11.0%, of total deposits at December 31, 2023.
These increases were partially offset by a decrease of $21.6 million, or 8.4%, in brokered time deposits, and a $10.0 million, or 10.0%, decrease in noninterest-bearing demand deposits. At December 31, 2025, brokered deposits equaled $235.9 million, or 21.2% of total deposits compared to $257.6 million, or 23.5% of total deposits at December 31, 2024.
Other income increased $45,000, or 3.5%, to $1.3 million in 2024 as compared to 2023, due to increased wealth management income.
The increase was primarily driven by an increase in other income and loan and lease servicing fees. Other income increased $230,000, or 17.5%, to $1.5 million in 2025 as compared to 2024, due to increased wealth management income.
The increase primarily was the result of an increase in the average rate paid on certificate of deposit accounts, savings and money market accounts, and borrowings and, to a lesser extent, an increase in average balance of certificate of deposit accounts and borrowings.
Total interest expense increased $242,000, or 0.6%, to $42.1 million during 2025 compared to $41.8 million during 2024. The increase primarily was the result of an increase in the average rate paid on borrowings, and an increase in average balance of borrowings and savings and money market accounts.
As of December 31, 2024, approximately $248.1 million of our deposit portfolio, or 22.7% of total deposits, excluding collateralized public deposits, was uninsured. The uninsured amounts are estimated based on the methodologies and assumptions used for First Bank Richmond’s regulatory reporting requirements. Borrowings.
The uninsured amounts are estimated based on the methodologies and assumptions used for First Bank Richmond’s regulatory reporting requirements. Borrowings. Borrowings, consisting primarily of FHLB advances, totaled $252.0 million at December 31, 2025, compared to $265.0 million at December 31, 2024.
Offsetting these increases were a $25.2 million, or 16.0%, decrease in construction and development loans, an $8.5 million, or 5.4%, decrease in direct financing leases, and a $2.0 million, or 8.8%, decrease in consumer loans.
Offsetting these increases were a $60.7 million, or 45.9%, decrease in construction and development loans, a $2.3 million, or 1.6%, decrease in direct financing leases, and a $1.9 million, or 9.1%, decrease in consumer loans. The decrease in construction and development loans was primarily due to completed projects converting to permanent financing.
Income tax expense decreased $30,000 in 2024 compared to 2023. This decrease in income tax expense was primarily due to pretax income decreasing $139,000, or 1.3%.
Income Tax Expense . Income tax expense increased $590,000 in 2025 compared to 2024. This increase in income tax expense was primarily due to pretax income increasing $2.8 million, or 25.7%.
Years Ended December 31, 2024 vs. 2023 Increase/ (decrease) due to Total increase/ (decrease) Volume Rate (In thousands) Interest-earning assets: Loans and leases receivable $ 5,707 $ 7,095 $ 12,802 Securities (305) (27) (332) FHLB stock 247 134 381 Cash and cash equivalents and other 175 90 265 Total interest-earning assets $ 5,824 $ 7,292 $ 13,116 Interest-bearing liabilities: Savings and money market accounts $ 209 $ 1,635 $ 1,844 Interest-bearing checking accounts (43) 598 555 Certificate accounts 1,578 4,964 6,542 Borrowings 1,208 1,922 3,130 Total interest-bearing liabilities $ 2,952 $ 9,119 $ 12,071 Change in net interest income $ 1,045 Capital and Liquidity Capital.
Years Ended December 31, 2025 vs. 2024 Increase/ (decrease) due to Total increase/ (decrease) Volume Rate (In thousands) Interest-earning assets: Loans and leases receivable $ 2,364 $ 3,423 $ 5,787 Securities (478) 77 (401) FHLB stock 4 — 4 Cash and cash equivalents and other 146 (155) (9) Total interest-earning assets $ 2,036 $ 3,345 $ 5,381 Interest-bearing liabilities: Savings and money market accounts $ 616 $ (275) $ 341 Interest-bearing checking accounts (9) (93) (102) Certificate accounts (576) (166) (742) Borrowings 235 510 745 Total interest-bearing liabilities $ 266 $ (24) $ 242 Change in net interest income $ 5,139 Capital and Liquidity Capital.
Data processing fees increased $267,000, or 8.0%, to $3.6 million in 2024 from $3.3 million in 2023, primarily due to increased software and core provider expenses. Legal and professional fees increased $224,000, or 14.0%, to $1.8 million in 2024 from $1.6 million in 2023, primarily due to other professional service expenses related to auditing and internal process enhancements.
Data processing fees increased $174,000, or 4.8%, to $3.8 million in 2025 from $3.6 million in 2024, primarily due to increased software implementation and and technology upgrade expenses. Net occupancy expenses increased $101,000, or 7.4%, to $1.5 million in 2025 from $1.4 million in 2024, primarily due to increased building maintenance expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed12 unchanged
We generally manage our balance sheet based on potential changes to net interest income under various rate scenarios. The EVE ratio is useful in long-term planning; but management gives more weight to changes in net interest income under various rate scenarios. IRR projections are tested annually, and the model is subject to a third-party review annually. 62
We generally manage our balance sheet based on potential changes to net interest income under various rate scenarios. The EVE ratio is useful in long-term planning; but management gives more weight to changes in net interest income under various rate scenarios. IRR projections are tested annually, and the model is subject to a third-party review annually. 63
The table below sets forth, as of December 31, 2024, the estimated changes in our EVE that would result from instantaneous changes in market interest rates. This table assumes an instantaneous uniform change in interest rates at all maturities.
The table below sets forth, as of December 31, 2025, the estimated changes in our EVE that would result from instantaneous changes in market interest rates. This table assumes an instantaneous uniform change in interest rates at all maturities.
The table below sets forth, as of December 31, 2024, the calculation of the estimated changes in our net interest income that results from the designated immediate changes in the United States Treasury yield curve.
The table below sets forth, as of December 31, 2025, the calculation of the estimated changes in our net interest income that results from the designated immediate changes in the United States Treasury yield curve.
Change in Interest Rates (basis points) (1) Net Interest Income Year 1 Forecast Year 1 Change from Level (Dollars in thousands) +300 $ 38,369 (0.86) % +200 38,524 (0.46) +100 38,586 (0.30) Level 38,702 — -100 38,963 0.67 -200 39,248 1.41 -300 39,602 2.33 _________________________ (1) Assumes an immediate uniform change in interest rates at all maturities. 61 Economic Value of Equity.
Change in Interest Rates (basis points) (1) Net Interest Income Year 1 Forecast Year 1 Change from Level (Dollars in thousands) +300 $ 43,245 (12.96) % +200 45,999 (7.42) +100 48,137 (3.12) Level 49,686 — -100 50,225 1.08 -200 51,581 3.81 -300 52,773 6.21 _________________________ (1) Assumes an immediate uniform change in interest rates at all maturities. 62 Economic Value of Equity.
Basis Point (“bp”) Change in Interest Rates (1) Estimated Increase (Decrease) in EVE Estimated EVE (2) Amount Percent (Dollars in thousands) +300 $ 99,472 $ (43,245) (30.30) % +200 115,432 (27,285) (19.12) +100 127,778 (14,939) (10.47) Level 142,717 — — -100 157,523 14,806 10.37 -200 178,450 35,733 25.04 -300 191,163 48,446 33.95 _____________________ (1) Assumes an instantaneous uniform change in interest rates at all maturities.
Basis Point (“bp”) Change in Interest Rates (1) Estimated Increase (Decrease) in EVE Estimated EVE (2) Amount Percent (Dollars in thousands) +300 $ 101,336 $ (51,490) (33.69) % +200 121,856 (30,970) (20.26) +100 138,150 (14,676) (9.60) Level 152,826 — — -100 162,793 9,967 6.52 -200 180,630 27,804 18.19 -300 191,977 39,151 25.62 _____________________ (1) Assumes an instantaneous uniform change in interest rates at all maturities.

Other RMBI 10-K year-over-year comparisons