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What changed in Richmond Mutual Bancorporation, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Richmond Mutual Bancorporation, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+373 added−383 removedSource: 10-K (2025-03-27) vs 10-K (2024-03-29)

Top changes in Richmond Mutual Bancorporation, Inc.'s 2024 10-K

373 paragraphs added · 383 removed · 324 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

169 edited+8 added−13 removed262 unchanged
Biggest changeAt December 31, 2023 2022 Average Balance Outstanding Weighted Average Rate Average Balance Outstanding Weighted Average Rate (Dollars in thousands) Demand deposits: Non-interest bearing $ 107,192 — % $ 111,990 — % Interest bearing 147,964 0.8 165,213 0.3 Savings 119,669 0.5 124,806 0.3 Money market 154,828 2.3 159,919 2.0 Certificate accounts 509,316 3.9 384,038 2.2 Total deposits $ 1,038,969 2.4 % $ 945,966 1.4 % The following table indicates the time deposit accounts classified by rate and maturity at December 31, 2023. 0.00- 1.00% 1.01- 2.00% 2.01- 3.00% 3.01- 4.00% 4.01- 5.00% Over 5.00% Total Percent of Total (Dollars in thousands) Certificate accounts maturing in quarter ending: March 31, 2024 $ 4,665 $ 3,560 $ 5,614 $ 20,213 $ 37,816 $ 25,990 $ 97,858 18.89 % June 30, 2024 10,726 1,756 6,368 1,115 52,390 26,552 98,907 19.09 September 30, 2024 14,527 1,379 3,177 6,618 29,085 34,357 89,143 17.20 December 31, 2024 17,188 1,219 4,831 2,631 35,096 2,718 63,683 12.29 March 31, 2025 5,252 1,087 3,592 25 18,569 14,270 42,795 8.26 June 30, 2025 1,942 316 886 335 6,693 18,734 28,906 5.58 September 30, 2025 5,287 1,047 536 277 3,043 15,145 25,335 4.89 December 31, 2025 14,000 868 823 304 17,993 — 33,988 6.56 March 31, 2026 25 643 84 372 8,965 4,259 14,348 2.77 June 30, 2026 57 499 47 320 — 3,003 3,926 0.76 September 30, 2026 3,413 624 297 201 — 3,000 7,535 1.45 December 31, 2026 596 — 93 69 — — 758 0.15 Thereafter 727 611 289 8,531 803 — 10,961 2.12 Total $ 78,405 $ 13,609 $ 26,637 $ 41,011 $ 210,453 $ 148,028 $ 518,143 100.00 % Percent of total 15.13 % 2.63 % 5.14 % 7.91 % 40.62 % 28.57 % 100.00 % 22 As of December 31, 2023 and 2022, approximately $216.0 million and $219.7 million, respectively, of our deposit portfolio was uninsured.
Biggest changeAt December 31, 2024 2023 Average Balance Outstanding Weighted Average Rate Average Balance Outstanding Weighted Average Rate (Dollars in thousands) Demand deposits: Non-interest bearing $ 105,356 — % $ 107,192 — % Interest bearing 141,902 0.9 147,964 0.8 Savings 116,183 0.8 119,669 0.5 Money market 169,763 3.1 154,828 2.3 Certificate accounts 557,216 4.4 509,316 3.9 Total deposits $ 1,090,420 2.9 % $ 1,038,969 2.4 % The following table indicates the time deposit accounts classified by rate and maturity at December 31, 2024. 0.00- 1.00% 1.01- 2.00% 2.01- 3.00% 3.01- 4.00% 4.01- 5.00% Over 5.00% Total Percent of Total (Dollars in thousands) Certificate accounts maturing in quarter ending: March 31, 2025 $ 5,217 $ 890 $ 3,637 $ 2,994 $ 58,650 $ 34,829 $ 106,217 19.41 % June 30, 2025 1,806 173 806 6,671 50,995 26,903 87,354 15.96 September 30, 2025 5,725 1,781 1,320 7,080 17,464 40,074 73,444 13.42 December 31, 2025 14,021 826 327 6,499 77,399 690 99,762 18.23 March 31, 2026 13 604 243 5,924 80,593 4,267 91,644 16.75 June 30, 2026 38 427 48 2,198 14,126 3,003 19,840 3.63 September 30, 2026 3,474 485 248 896 11,250 3,000 19,353 3.54 December 31, 2026 367 — 79 1,204 5,550 — 7,200 1.32 March 31, 2027 489 — 7 1,298 14,941 — 16,735 3.06 June 30, 2027 160 3 29 1,391 5,000 — 6,583 1.20 September 30, 2027 — 246 31 1,909 — — 2,186 0.40 December 31, 2027 — 25 341 1,836 — — 2,202 0.40 Thereafter 9 155 302 8,056 6,171 — 14,693 2.69 Total $ 31,319 $ 5,615 $ 7,418 $ 47,956 $ 342,139 $ 112,766 $ 547,213 100.00 % Percent of total 5.72 % 1.03 % 1.36 % 8.76 % 62.52 % 20.61 % 100.00 % 22 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.
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 .
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 .
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 23 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 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.
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.
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.
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 institutions and their holding companies (banking organizations) to recognize credit losses expected over the life of certain financial assets.
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.
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.
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.
If a loan deteriorates in asset quality, the classification is changed to “special mention,” 14 “substandard,” “doubtful” or “loss” depending on the circumstances and the evaluation. Generally, loans 90 days or more past due are placed on nonaccrual status and classified “substandard.” Management reviews the status of each loan on our watch list on a quarterly basis.
If a loan deteriorates in asset quality, the classification is changed to “special mention,” “substandard,” “doubtful” or “loss” depending on the circumstances and the evaluation. Generally, loans 90 days or more past due are placed on nonaccrual status and classified “substandard.” Management reviews the status of each loan on our watch list on a quarterly basis.
The new rules require registrants to disclose on Form 8-K any cybersecurity incident they determine to be material and to describe the material aspects of the incident's nature, scope, and timing, as well as its material impact or reasonably 28 likely material impact on the registrant. For information regarding the Company’s cybersecurity risk management, strategy and governance, see “Item 1C.
The new rules require registrants to disclose on Form 8-K any cybersecurity incident they determine to be material and to describe the material aspects of the incident's nature, scope, and timing, as well as its material impact or reasonably likely material impact on the registrant. For information regarding the Company’s cybersecurity risk management, strategy and governance, see “Item 1C.
In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities. 11 Originations, Sales and Purchases of Loans Our loan originations are generated by our loan personnel operating at our office locations.
In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities. Originations, Sales and Purchases of Loans Our loan originations are generated by our loan personnel operating at our office locations.
We sell the majority of the fixed-rate conforming and eligible jumbo one- to four-family residential real estate loans that we originate, generally on a servicing-retained basis, while retaining some non-eligible fixed-rate and adjustable-rate one- to four-family residential real estate loans in order to manage the 12 duration and time to repricing of our loan portfolio.
We sell the majority of the fixed-rate conforming and eligible jumbo one- to four-family residential real estate loans that we originate, generally on a servicing-retained basis, while retaining some non-eligible fixed-rate and adjustable-rate one- to four-family residential real estate loans in order to manage the duration and time to repricing of our loan portfolio.
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.
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.
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.
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.
Weinert has held numerous commercial banking positions, including serving as a senior credit analyst, corporate lending officer, commercial lending division manager, special assets group manager, corporate banking manager and chief commercial credit officer, predominately with the Indiana National Bank in Indiana and its several successor entities through subsequent mergers. Mr.
Weinert has held numerous commercial banking 32 positions, including serving as a senior credit analyst, corporate lending officer, commercial lending division manager, special assets group manager, corporate banking manager and chief commercial credit officer, predominately with the Indiana National Bank in Indiana and its several successor entities through subsequent mergers. Mr.
An Indiana-chartered commercial bank may make a wide variety of mortgage loans including fixed-rate loans, adjustable-rate loans, variable-rate loans, participation loans, graduated payment loans, construction 24 and development loans, condominium and co-operative loans, second mortgage loans and other types of loans that may be made according to applicable regulations.
An Indiana-chartered commercial bank may make a wide variety of mortgage loans including fixed-rate loans, adjustable-rate loans, variable-rate loans, participation loans, graduated payment loans, construction and development loans, condominium and co-operative loans, second mortgage loans and other types of loans that may be made according to applicable regulations.
Assessment rates are applied to an institution's assessment base, which is its average consolidated total assets minus its average tangible equity during the assessment period. 27 The FDIC has authority to increase insurance assessments, and in a banking industry emergency the FDIC may also impose a special assessment.
Assessment rates are applied to an institution's assessment base, which is its average consolidated total assets minus its average tangible equity during the assessment period. The FDIC has authority to increase insurance assessments, and in a banking industry emergency the FDIC may also impose a special assessment.
Upon adoption of CECL, a banking organization must record a one-time adjustment to its credit loss allowances as of the beginning of the fiscal year of adoption equal to the difference, if any, between 25 the amount of credit loss allowances under the former methodology and the amount required under CECL.
Upon adoption of CECL, a banking organization must record a one-time adjustment to its credit loss allowances as of the beginning of the fiscal year of adoption equal to the difference, if any, between the amount of credit loss allowances under the former methodology and the amount required under CECL.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The following tables set forth certain information at December 31, 2023 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, 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.
We generally file a UCC-1 financing statement on all of our lease transaction 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.
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.
There are no arrangements or understandings between the officers and any other person pursuant to which he or she was or is to be selected as an officer. Garry D. Kleer (age 68). Mr. Kleer currently serves as Chairman, President and Chief Executive Officer of Richmond Mutual Bancorporation and as Chairman and Chief Executive Officer of First Bank Richmond. Mr.
There are no arrangements or understandings between the officers and any other person pursuant to which he or she was or is to be selected as an officer. Garry D. Kleer (age 69). Mr. Kleer currently serves as Chairman, President and Chief Executive Officer of Richmond Mutual Bancorporation and as Chairman and Chief Executive Officer of First Bank Richmond. Mr.
At December 31, 2023, our largest nonperforming loan was a $4.9 million nonaccrual commercial construction and development loan that is subject to litigation between the developer and other parties. When we acquire real estate as a result of foreclosure, the real estate is classified as foreclosed assets or Other Real Estate Owned.
At December 31, 2024, our largest nonperforming loan was a $4.9 million nonaccrual commercial construction and development loan that is subject to litigation between the developer and other parties. When we acquire real estate as a result of foreclosure, the real estate is classified as foreclosed assets or Other Real Estate Owned.
Institutions that are not well capitalized are subject to certain restrictions on brokered deposits and interest rates on deposits. At December 31, 2023, 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, 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.
Our commercial construction loans have terms that typically range from one to two years depending on factors such as the type and size of the development and the financial strength of the borrower/guarantor. Commercial construction loans are 9 typically structured with an interest only period during the construction phase.
Our commercial construction loans have terms to maturity that typically range from one to two years depending on factors such as the type and size of the development and the financial strength of the borrower/guarantor. Commercial construction loans are typically structured with an interest only period during the construction phase.
We may be required to purchase additional FHLB stock if we increase borrowings in the future. 18 Portfolio Maturities and Yields. The following table sets forth the weighted average yields of investment securities at various ranges of maturities, excluding Federal Reserve Bank and FHLB stock, at December 31, 2023.
We may be required to purchase additional FHLB stock if we increase borrowings in the future. 18 Portfolio Maturities and Yields. The following table sets forth the weighted average yields of investment securities at various ranges of maturities, excluding Federal Reserve Bank and FHLB stock, at December 31, 2024.
Kleer brings outstanding leadership skills and a deep understanding of the local banking market and issues facing the banking industry. Bradley M. Glover (age 33). 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 34). Mr. Glover is currently serving as Senior Vice President and Chief Financial Officer of Richmond Mutual Bancorporation and First Bank Richmond. Mr.
Weinert holds a BA in Economics from Wabash College and an MBA from Butler University. Paul J. Witte (age 52). Mr. Witte, employed by First Bank Richmond since 1996, was promoted to President/Chief Operating Officer of the Bank in January 2023. Mr.
Weinert holds a BA in Economics from Wabash College and an MBA from Butler University. Paul J. Witte (age 53). Mr. Witte, employed by First Bank Richmond since 1996, was promoted to President/Chief Operating Officer of the Bank in January 2023. Mr.
We also have an available line of credit with the FHLB of Indianapolis totaling $10.0 million. The following table presents the maturity of term borrowings, which consist entirely of FHLB advances, along with associated weighted average rates as of December 31, 2023.
We also have an available line of credit with the FHLB of Indianapolis totaling $10.0 million. The following table presents the maturity of term borrowings, which consist entirely of FHLB advances, along with associated weighted average rates as of December 31, 2024.
All of these loans were performing in accordance with their repayment terms at December 31, 2023. Our lending is subject to written underwriting standards and origination procedures set forth in First Bank Richmond’s loan policy.
All of these loans were performing in accordance with their repayment terms at December 31, 2024. Our lending is subject to written underwriting standards and origination procedures set forth in First Bank Richmond’s loan policy.
FB Richmond Holdings has one active subsidiary, FB Richmond Properties, Inc., which is a Delaware corporation holding approximately $106.1 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 $113.1 million in loans. Competition We face significant competition within our market both in making loans and leases and attracting deposits.
Our largest leasing relationship at that date was with the State of Arkansas which consisted of more than 3,300 leases totaling approximately $9.5 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 3,300 leases totaling approximately $9.1 million in lease receivables, all of which were performing in accordance with the lease terms.
We believe that our 11.3 year average tenure reflects the engagement of our employees in this core talent system tenet. Information about our Executive Officers Officers are elected annually to serve for a one-year term.
We believe that our 10.3 year average tenure reflects the engagement of our employees in this core talent system tenet. Information About Our Executive Officers Officers are elected annually to serve for a one-year term.
At December 31, 2023, the Bank was in compliance with the reserve requirements. The Bank is authorized to borrow from the Federal Reserve Bank "discount window." An eligible institution need not exhaust other sources of funds before going to the discount window, nor are there restrictions on the purposes for which the institution can use primary credit.
At December 31, 2024, the Bank was in compliance with the reserve requirements. 29 The Bank is authorized to borrow from the Federal Reserve Bank "discount window." An eligible institution need not exhaust other sources of funds before going to the discount window, nor are there restrictions on the purposes for which the institution can use primary credit.
As of December 31, 2023, 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, 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.
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, 2023, First Bank Richmond paid $1.1 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. 27 For the fiscal year ended December 31, 2024, First Bank Richmond paid $1.4 million in FDIC premiums.
Glover also serves as a board member of Centerville-Abington Community Dollars for Scholars, and a finance committee member of the Richmond Family YMCA. Dean W. Weinert (age 71). Mr.
Glover also serves as a board member of Centerville-Abington Community Dollars for Scholars, and a finance committee member of the Richmond Family YMCA. Dean W. Weinert (age 72). Mr.
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, 2023, based on the 15% limitation, First Bank Richmond’s loans-to-one-borrower limit was approximately $26.2 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, 2024, based on the 15% limitation, First Bank Richmond’s loans-to-one-borrower limit was approximately $27.2 million.
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 12-year career in 32 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 13-year career in banking, Mr.
Cambridge City is located in the western part of Wayne County approximately 15 miles west of Richmond, and had an estimated population of 1,500 with a median household income of approximately $46,700 in 2023. The workforce in this community is primarily composed of health care and social service workers and employees in the manufacturing sector.
Cambridge City is located in the western part of Wayne County approximately 15 miles west of Richmond, and had an estimated population of 1,600 with a median household income of approximately $46,500 in 2024. The workforce in this community is primarily composed of health care and social service workers and employees in the manufacturing sector.
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. 31 Employees and Human Capital As of December 31, 2023, we had 176 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, 2024, we had 173 full-time equivalent employees. Our employees are not represented by any collective bargaining group.
At December 31, 2023, 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 17: Regulatory Capital” in the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Form 10-K.
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.
The average balance of our one- to four-family residential loans secured by first mortgages was approximately $134,000 at December 31, 2023. 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 $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.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition at December 31, 2023 Compared to December 31, 2022” 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, 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.
First Bank Richmond reviews the cost basis of the FHLB stock for ultimate recoverability regularly. At December 31, 2023, no impairment of the value of the stock has been recognized. As of December 31, 2023, the Bank had $271.0 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, 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.
At that date, FB Richmond Holding managed $287.1 million of our total investment portfolio. We may from time to time invest in “special situation” investments in order to earn profits or to hedge against interest rate risk. These investments may include interest rate swaps and/or interest rate caps.
At that date, FB Richmond Holding managed $258.5 million of our total investment portfolio. We may from time to time invest in “special situation” investments in order to earn profits or to hedge against interest rate risk. These investments may include interest rate swaps and/or interest rate caps.
At December 31, 2023, on a consolidated basis, we had $1.5 billion in assets, $1.1 billion in loans and leases, net of allowance, $1.0 billion in deposits and $134.9 million in stockholders’ equity. At December 31, 2023, First Bank Richmond’s total risk-based capital ratio was 14.1%, exceeding the 10.0% requirement for a well-capitalized institution.
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.
Richmond had an estimated population of 35,600 in 2023 with a median household income of approximately $46,400. It is favorably located with excellent highway access and has over 7.7 million people within a 100-mile radius. Health care and social services are the primary sources of employment, followed by manufacturing and food service.
Richmond had an estimated population of 35,600 in 2024 with a median household income of approximately $46,400. It is favorably located with excellent highway access and has over 7.7 million people within a 100-mile radius. Health care and social services are the primary sources of employment, followed by manufacturing and retail trade.
We had 18 other construction and development loans with an outstanding balance in excess of $3.0 million at December 31, 2023, 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. 10 Lease Financing.
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.
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 2.8% in December 2023 compared to 3.2% in December 2022.
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.
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, 2023, FB Richmond Properties held approximately $106.1 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, 2024, FB Richmond Properties held approximately $113.1 million in residential mortgages and commercial real estate loans.
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 $2.6 million at December 31, 2023.
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.
To the extent such borrowings have different terms to repricing than our deposits, they can change our interest rate risk profile. At December 31, 2023, we had $271.0 million in FHLB advances outstanding. Based on current collateral levels, at December 31, 2023 we could borrow an additional $76.4 million from the FHLB of Indianapolis at prevailing interest rates.
To the extent such borrowings have different terms to repricing than our deposits, they can change our interest rate risk profile. At December 31, 2024, we had $265.0 million in FHLB advances outstanding. Based on current collateral levels, at December 31, 2024 we could borrow an additional $83.4 million from the FHLB of Indianapolis at prevailing interest rates.
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, 2023, the Bank’s aggregate recorded loan balances for construction, land development and land loans were 90.4% 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, 2024, the Bank’s aggregate recorded loan balances for construction, land development and land loans were 73.1% of total regulatory capital.
First Bank Richmond is subject to the USA PATRIOT Act, which gives federal agencies additional powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements.
First Bank Richmond is subject to the Bank Secrecy Act and other anti-money laundering laws and regulations including the USA PATRIOT Act, which gives federal agencies additional powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements.
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, 2023 and 2022, we sold $19.7 million and $28.1 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, 2024 and 2023, we sold $25.2 million and $19.7 million of one- to four-family residential real estate loans, respectively.
Based on the most recent data provided by the FDIC, there are approximately 11 and 18 other commercial banks and savings banks operating in our Indiana and Ohio market areas, respectively. Additionally, there are approximately 14 and seven credit unions operating in these same respective market areas.
Based on the most recent data provided by the FDIC, there are approximately 10 and 12 other commercial banks and savings banks operating in our Indiana and Ohio market areas, respectively. Additionally, there are approximately 10 and seven credit unions operating in these same respective market areas.
At December 31, 2023, home equity loans totaled $6.4 million, or 0.6% 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, 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.
For the year ended December 31, 2023, we reported net income of $9.5 million, compared to net income of $13.0 million for the year ended December 31, 2022. Market Area Our primary market area includes Wayne and Shelby counties in Indiana and Shelby, Miami, and Franklin counties in Ohio.
For the year ended December 31, 2024, we reported net income of $9.4 million, compared to net income of $9.5 million for the year ended December 31, 2023. Market Area Our primary market area includes Wayne and Shelby counties in Indiana and Shelby, Miami, and Franklin counties in Ohio.
Miami County had an estimated population in 2023 of 110,200 with a median household income of approximately $71,500. Within Miami County, we have offices in Troy, which is the county seat and most populous city, and Piqua. Troy is located 19 miles north of Dayton, while Piqua is located 27 miles north of Dayton.
Miami County had an estimated population in 2024 of 109,500 with a median household income of approximately $74,200. Within Miami County, we have offices in Troy, which is the county seat and most populous city, and Piqua. Troy is located 19 miles north of Dayton, while Piqua is located 27 miles north of Dayton.
These activities provide an additional source of fee income to First Bank Richmond and in 2023 constituted 17.2% of our total non-interest income. Subsidiary and Other Activities At December 31, 2023, 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 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.
Centerville had an estimated population of 2,800 with a median household income of approximately $51,100 in 2023. It is a residential suburb to Richmond and home to many antique stores. While Wayne County experienced a 5.0% decline in population from 2010 to 2020, the population in Centerville increased by 3.6% during this period.
Centerville had an estimated population of 2,700 with a median household income of approximately $50,700 in 2024. It is a residential suburb to Richmond and home to many antique stores. While Wayne County experienced a 5.0% decline in population from 2010 to 2020, the population in Centerville increased by 3.6% during this period.
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 $170.4 million at December 31, 2023.
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.
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 $170.4 million at December 31, 2023.
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.
At December 31, 2023, our consumer loan portfolio totaled $23.3 million, or 2.1% of our total loan and lease portfolio, including $1.9 million of unsecured consumer loans. Consumer loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates.
At December 31, 2024, our consumer loan portfolio totaled $21.2 million, or 1.8% of our total loan and lease portfolio, including $1.3 million of unsecured consumer loans. Consumer loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates.
At December 31, 2023, 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, 2023, the market value of securities managed was $287.1 million.
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.
While we have the authority under applicable law to invest in derivative securities, we had no investments in derivative securities at December 31, 2023. We held common stock of the FHLB of Indianapolis in connection with our borrowing activities totaling $12.6 million at December 31, 2023.
While we have the authority under applicable law to invest in derivative securities, we had no investments in derivative securities at December 31, 2024. We held common stock of the FHLB of Indianapolis in connection with our borrowing activities totaling $13.9 million at December 31, 2024.
Shelbyville, which had an estimated population of 19,700 with a median household income of $55,900, is located in central Indiana and within the Indianapolis metropolitan area. Manufacturing, health care, and social services are the largest employment sectors in Shelby County. The unemployment rate in Shelby County was 2.3% in December 2023 compared to 1.9% in December 2022. Ohio.
Shelbyville, which had an estimated population of 19,900 with a median household income of $58,500, is located in central Indiana and within the Indianapolis metropolitan area. Manufacturing, health care, and social services are the largest employment sectors in Shelby County. The unemployment rate in Shelby County was 3.4% in December 2024 compared to 2.3% in December 2023. Ohio.
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, 2023, the market value of securities held was $287.1 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.
For federal income tax purposes, we currently report our income and expenses on the accrual method of accounting and use a tax year ending December 31 for filing its federal income tax returns. Richmond Mutual Bancorporation and First Bank Richmond will file a consolidated federal income tax return. Capital Loss Carryovers.
For federal income tax purposes, we currently report our income and expenses on the accrual method of accounting and use a tax year ending December 31 for filing its federal income tax returns. Richmond Mutual Bancorporation and First Bank Richmond with their respective subsidiaries will file a consolidated federal income tax return.
Troy had an estimated population in 2023 of 26,500 with a median household income of approximately $69,700, while Piqua had a population of 20,400 with a median household income of approximately $55,400. Manufacturing is the leading industry employment sector in Miami County, followed by health care and social services as well as retail trade.
Troy had an estimated population in 2024 of 26,700 with a median household income of approximately $70,500, while Piqua had a population of 20,500 with a median household income of approximately $63,800. Manufacturing is the leading industry employment sector in Miami County, followed by health care and social services as well as retail trade.
At December 31, 2022, First Bank Richmond complied with these loans-to-one-borrower limitations. At December 31, 2023, First Bank Richmond’s largest aggregate amount of loans to one borrower was $19.0 million. Dividends. Under Indiana law, First Bank Richmond is permitted to declare and pay dividends out of its undivided profits.
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.
The unemployment rate in December 2023 was 2.9% in Wayne County, as compared to the national 2 and state unemployment rates of 3.5% and 2.9%, respectively. The top employers in Wayne County include Reid Health, Richmond Community Schools, Belden Wire & Cable, Sugar Creek Brandworthy Food Solutions, Richmond State Hospital, and Primex Plastics Corporation.
The unemployment rate in December 2024 was 4.6% in Wayne County, as compared to the national and state unemployment rates of 4.4% and 4.0%, respectively. The top employers in Wayne County include Reid Health, Richmond Community Schools, Belden Wire & Cable, Sugar Creek Brandworthy Food Solutions, Richmond State Hospital, 2 and Primex Plastics Corporation.
As of December 31, 2023, approximately 73% of our workforce was female and 27% male, and our average tenure was 11.3 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, 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.
Our reliance on brokered deposits may increase our overall cost of funds. At December 31, 2023, our core deposits, which are deposits other than certificates of deposit of $250,000 or more and brokered deposits, totaled $715.3 million, representing 68.7% of total deposits, compared to $702.9 million, representing 69.9% of total deposits, at December 31, 2022.
Our reliance on brokered deposits may increase our overall cost of funds. At December 31, 2024, our core deposits, which are deposits other than certificates of deposit of $250,000 or more and brokered deposits, totaled $767.1 million, representing 70.1% of total deposits, compared to $715.3 million, representing 68.7% of total deposits, at December 31, 2023.
We had $136,000 in foreclosed assets at December 31, 2023. 13 The table below sets forth the amounts and categories of our non-performing assets at the dates indicated.
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.
For the year ended December 31, 2023, First Bank Richmond received a total of $851,000 in dividends from the FHLB. Our required investment in the stock of the FHLB is based on a predetermined formula, carried at cost and evaluated for impairment.
For the year ended December 31, 2024, First Bank Richmond received a total of $1.2 million in dividends from the FHLB. Our required investment in the stock of the FHLB is based on a predetermined formula, carried at cost and evaluated for impairment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA deterioration in economic conditions in the market areas we serve as a result of inflation, a recession, 33 or other factors could result in the following consequences, any of which could have a material adverse effect on our business, financial condition and results of operations: • demand for our products and services may decline; • loan delinquencies, problem assets and foreclosures may increase; • collateral for loans, especially real estate, may decline in value, thereby reducing customers’ future borrowing power, and reducing the value of assets and collateral associated with existing loans; and • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.
Biggest changeA 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.
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. Our operations rely on certain external vendors.
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.
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 39 operational errors, information system failures, interruptions or breaches and unauthorized disclosures of sensitive or confidential client or customer information.
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.
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 35 income generation from the property and its potential illiquid nature as collateral.
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.
As a result, any payment of dividends in the future by Richmond Mutual Bancorporation may depend on First Bank 42 Richmond’s ability to satisfy these regulatory restrictions and its earnings, capital requirements, financial condition and other factors. Item 1B. Unresolved Staff Comments Not applicable.
As a result, any payment of dividends in the future by Richmond Mutual Bancorporation may depend on First Bank Richmond’s ability to satisfy these regulatory restrictions and its earnings, capital requirements, financial condition and other factors. Item 1B. Unresolved Staff Comments Not applicable.
Furthermore, various risks, such as fraudulent 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 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.
If our reputation is negatively affected by the actions of our employees, by our inability to conduct our 38 operations in a manner that is appealing to current or prospective customers, or otherwise, our business and, therefore, our operating results may be materially adversely affected.
If our reputation is negatively affected by the actions of our employees, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, or otherwise, our business and, therefore, our operating results may be materially adversely affected.
Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our 40 allowance for credit losses.
Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for credit losses.
We operate in many different financial service businesses and rely on the ability of our employees and systems to process a significant number of transactions.
We operate in many different financial service businesses and rely on the ability of our employees and systems to process a significant number of 38 transactions.
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, 2023, 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, 2024, we had no securities that were deemed impaired.
One such significant change from 2022 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 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.
A return of recessionary conditions or adverse economic conditions within these market areas may reduce our leasing volume and affect our customers' ability to make lease payments, resulting in higher defaults, which may result in our inability to fully recover our investment in the related equipment and adversely impact our business, financial condition, and results of operations.
Adverse economic conditions within these market areas may reduce our leasing volume and affect 36 our customers' ability to make lease payments, resulting in higher defaults, which may result in our inability to fully recover our investment in the related equipment and adversely impact our business, financial condition, and results of operations.
This comprises $148.5 million in commercial construction loans and $9.3 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.
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.
At December 31, 2023, the book value of our MSRs was $1.9 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, 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.
Revenue generated from our leasing business accounted for 15.3% and 15.4% of our total revenue for the years ended December 31, 2023 and 2022, respectively. We rely solely on brokers and other third-party originators to generate our lease transactions.
Revenue generated from our leasing business accounted for 13.5% 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.
If our investment in the Federal Home Loan Bank of Indianapolis becomes impaired, our earnings and stockholders’ equity could decrease. At December 31, 2023, we owned $12.6 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, 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.
A tightening of credit markets and liquidity risk could impair our ability to fund operations and jeopardize our financial condition. Liquidity is essential to our business. A tightening of the credit markets and the inability to obtain adequate funding to replace deposits and fund continued loan growth may affect asset growth, our earnings capability and capital levels negatively.
A tightening of credit markets and liquidity risk could impair our ability to fund operations and jeopardize our financial condition. Liquidity is essential to the operation of our business. A tightening of the credit markets or the inability to obtain adequate funding to replace deposits and support continued loan growth could negatively impact asset growth, earnings capability, and capital levels.
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. 36 Moreover, approximately $52.4 million or 33.3% 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 $51.1 million or 34.4% of our total lease portfolio is to customers located in California, New York, Florida, and Arkansas.
At December 31, 2023, direct financing leases totaled $156.6 million, or 14.1% 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, 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.
This occurrence poses financial risks, particularly for institutions that originate longer-term, fixed-rate mortgage loans. As of December 31, 2023, approximately 43.9% 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, 2024, approximately 38.6% of our loan and lease portfolio consisted of fixed-rate loans and leases, potentially exposing us to these risks.
Our commercial loan portfolio, which includes commercial and multi-family real estate loans, commercial and industrial loans and construction loans, has increased to $753.6 million, or 68.0% of total loans and leases, at December 31, 2023 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 $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.
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. On January 1, 2023, we adopted the accounting standard referred to as CECL.
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.
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, 2023, our construction and development loans totaled $157.8 million, accounting for approximately 14.2% of our total loan portfolio.
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.
At December 31, 2023, our top 25 brokers/third party originators collectively accounted for 81.7% of our total direct financing lease portfolio, with our largest broker/third party originator accounting for 10.9% of the portfolio.
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.
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.
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.
Moreover, failure to accurately assess and disclose risks associated with loan participations may expose us to legal liabilities, including lawsuits from investors or regulatory agencies alleging inadequate risk management practices and misleading disclosures. At December 31, 2023, we had $93.4 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, 2024, we held $104.4 million in loan participations in which we were not the lead lender.
This stock is not marketable and can only be redeemed by the FHLB of Indianapolis. The most recent stock buyback initiated by the FHLB of Indianapolis was in 2015.
This stock is not marketable and can only be redeemed by the FHLB of Indianapolis.
As a result, it is difficult to predict the future performance of this part of our loan portfolio. These loans may have delinquency or charge-off levels above our historical experience, which could adversely affect our future performance. If we are unable to maintain and grow revenue from our leasing business our future revenue and earnings may be adversely impacted.
As a result, predicting the future performance of this segment of our loan portfolio remains challenging. These loans may experience higher delinquency or charge-off rates compared to our historical averages, which could negatively impact our future performance. If we are unable to maintain and grow revenue from our leasing business our future revenue and earnings may be adversely impacted.
Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets, negative views and expectations about the prospects for the financial services industry or deterioration in credit markets. We use estimates in determining the fair value of certain assets, such as mortgage servicing rights (“MSRs”).
Additionally, our ability to borrow could be affected by factors beyond our control, such as disruptions in the financial markets, negative views about the financial services industry, or deterioration in credit markets. We use estimates in determining the fair value of certain assets, such as mortgage servicing rights (“MSRs”).
During 2023, of our $89.7 million in lease originations, the top five brokers/third party originators accounted for approximately 45.6% of our total volume of lease originations, one of whom accounted for approximately 13.3% of our total volume of lease originations.
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.
Our net income is primarily derived from the excess of net interest income and non-interest income over non-interest expenses, provisions for credit losses, and taxes.
Future changes in interest rates could reduce our profits and affect the value of our assets and liabilities . Our net income is primarily derived from the excess of net interest income and non-interest income over non-interest expenses, provisions for credit losses, and taxes.
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 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.
A return of recessionary conditions or adverse economic conditions in our market areas may reduce our rate of growth, affect 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. 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.
Factors that could detrimentally impact our access to liquidity sources include adverse regulatory action against us, a decrease in the level of our business activity as a result of a downturn in the markets in which our loans are concentrated, or a decrease in the confidence of our depositors in our ability to meet withdrawal demands.
Potential factors that could adversely affect our access to liquidity include adverse regulatory actions, a decrease in our business activity due to a downturn in the markets where our loans are concentrated, or a loss of depositor confidence in our ability to meet withdrawal demands.
Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and our stock price. New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure.
Failure to adapt to or comply with regulatory requirements, or investor or stakeholder expectations and standards, could negatively impact our reputation, ability to do business with certain partners, and our stock price.
Further, the effects of climate change may negatively impact regional and local economic activity, which could lead to an adverse effect on our customers and 41 impact the communities in which we operate. Overall, climate change, its effects and the resulting, unknown impact could have a material adverse effect on our financial condition and results of operations.
Moreover, climate change may adversely affect regional and local economic activity, harming our customers and the communities in which we operate. Regardless of changes in federal policy, the effects of climate change and their unknown long-term impacts could still have a material adverse effect on our financial condition and results of operations.
As of December 31, 2023, our deposit composition included $349.6 million in certificates of deposit maturing within one year and $523.0 million in noninterest-bearing, NOW checking, savings, and money market accounts. In an increasing interest rate environment, retaining these deposits could lead to a higher cost of funds.
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.
We rely on a number of different sources in order to meet our potential liquidity demands. Our primary sources of liquidity are increases in deposit accounts, including brokered deposits, as well as cash flows from loan payments and our securities portfolio.
To meet potential liquidity demands, we rely on several sources. Our primary sources of liquidity include increases in deposit accounts, including brokered deposits, as well as cash flows from loan payments and our securities 37 portfolio. Additionally, borrowings, particularly from the Federal Home Loan Bank and through repurchase agreements, provide us with an important source of funds.
The lack of empirical data surrounding the credit and other financial risks posed by climate change render it difficult, or even impossible, to predict how specifically climate change may impact our financial condition and results of operations; however, the physical effects of climate change may also directly impact us.
The lack of empirical data regarding the financial and credit risks posed by climate change makes it difficult to predict its specific impact on our financial condition and results of operations. However, the physical effects of climate change, such as more frequent and severe weather disasters, could directly affect us.
As of December 31, 2023, our portfolio included commercial real estate, multi-family real estate, and commercial and industrial loans totaling $595.8 million, constituting approximately 53.8% 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, 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.
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. 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.
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.
If lead institutions fail to provide timely updates on changes in credit quality for the underlying loans in our loan participation agreements, it could lead to misstatements in our ACL and potential losses on these loans.
We participate in loan participation agreements in which we are not the lead lender and rely on lead institutions to provide timely and accurate updates on changes in the credit quality of the underlying loans.
A large portion of our commercial loan portfolio is unseasoned, meaning loans were originated recently. Our limited experience with these borrowers does not provide us with a significant payment history pattern with which to judge future collectability. Further, these loans may not have been subjected to unfavorable economic conditions.
A significant portion of this portfolio is composed of unseasoned loans, meaning they were recently originated. Due to our limited history with these borrowers, we lack a comprehensive payment history to effectively assess the likelihood of future collectability. Furthermore, many of these loans have not yet been tested under adverse economic conditions.
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. 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.
Replacing these external vendors could also entail significant delay and expense. We are subject to environmental liability risk associated with lending activities on properties we own.
Investments in cybersecurity, data privacy protections, and employee training are critical to managing these risks. We are subject to environmental liability risk associated with lending activities on properties we own.
Additionally, if insurance obtained by our borrowers is insufficient to cover any losses sustained to the collateral, or if insurance coverage is otherwise unavailable to our borrowers, the collateral securing our loans may be negatively impacted by climate change, natural disasters and related events, which could impact our financial condition and results of operations.
For instance, such events may damage real property securing loans in our portfolio or reduce the value of that collateral. If our borrowers' insurance is insufficient to cover these losses or if insurance becomes unavailable, the value of the collateral securing our loans could be negatively affected, potentially impacting our financial condition and results of operations.
Inadequate disclosure or reporting of credit quality changes by lead institutions may lead to non-compliance with regulatory requirements, exposing us to regulatory scrutiny, fines, or other penalties. Furthermore, misstatements in ACL due to delayed credit updates could damage our reputation and credibility in the market, posing a significant reputational risk.
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.
Borrowings, especially from the Federal Home Loan Bank and repurchase agreements, also provide us with a source of funds to meet liquidity demands. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity.
An inability to raise funds through deposits, borrowings, the sale of loans, or other sources could have a substantial negative effect on our liquidity. Our access to adequate funding, whether through deposits or other means, could be impaired by factors specific to us, or by broader issues affecting the financial services industry or the economy in general.
Additionally, reliance on lead institutions for credit information exposes us to counterparty risk, where financial difficulties or failures on their part could jeopardize our ability to accurately assess and manage risks associated with loan participations.
If these institutions fail to deliver such updates in a timely manner, we may misstate our allowance for credit losses, which could result in unanticipated credit losses. Additionally, our dependence on lead institutions exposes us to counterparty risk, as financial distress or operational failures on their part may impair our ability to assess and manage credit risk effectively.
Risks Related to Our Business We have a substantial amount of commercial and multi-family real estate and commercial and industrial loans, and intend to continue to increase originations of these types of loans. These loans involve credit risks that could adversely affect our financial condition and results of operations.
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.
Furthermore, fluctuations in interest rates may adversely affect the valuation of our assets and liabilities, ultimately affecting our earnings. Inflationary pressures and rising prices may affect our results of operations and financial condition. Inflation has surged markedly since the close of 2021 and continued its ascent throughout 2022, marking the highest levels experienced in over four decades.
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.
Removed
Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans.
Added
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.
Removed
Moreover, a significant decline in general local, regional or national economic conditions caused by inflation, recession, severe weather, natural disasters, widespread disease or pandemics, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, unemployment or other factors beyond our control could further impact these local economic conditions and could further negatively affect the financial results of our banking operations.
Added
These developments may, in turn, negatively impact these businesses and, by extension, our financial condition and results of operations.
Removed
In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance. Future changes in interest rates could reduce our profits and affect the value of our assets and liabilities .
Added
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.
Removed
Should the interest rates associated with our deposits and borrowings increase at a faster pace than the rates received from loans and other investments, our net interest income and overall earnings might be adversely affected. A sustained and substantial change in market interest rates could significantly impact our financial condition, liquidity, and operational results.
Added
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.
Removed
Inflationary pressures persisted at elevated rates through 2023, creating challenges for businesses, particularly small to medium-sized enterprises that lack the scale advantages enjoyed by larger corporations. This discrepancy in leveraging economies of scale may intensify cost pressures for smaller businesses.
Added
If deposit and borrowing rates rise faster than loan and investment yields, our net interest income and overall earnings could decline. Additionally, adjustable-rate residential mortgage loans and home equity lines of credit may face increased default risks in a rising rate environment.
Removed
The heightened inflationary environment could potentially impact our business customers' ability to repay loans, especially among those facing swift deteriorations in financial conditions. Consequently, our operational and financial standings 34 may face adverse effects.
Added
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.
Removed
Moreover, a sustained period of inflation holds the potential to drive up wages and other expenses for the Company, further posing risks to our operational performance and financial health. Considering the continued inflationary landscape and its associated impacts, our business outlook could be significantly affected.
Added
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.
Removed
While these loan types typically offer higher potential profitability compared to residential mortgage loans, they inherently carry heightened sensitivity to regional and local economic conditions, posing challenges in accurately forecasting potential losses. Further, these loans often involve substantial balances granted to individual borrowers or related groups, elevating their risk profile, particularly when considering the complexity of the underlying collateral.
Added
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.
Removed
Commercial and multi-family real estate, as well as commercial and industrial loans, entail higher risk levels compared to our one- to four-family residential real estate loans. The repayment of such loans depends significantly on the effective management and operation of borrowers’ properties or related businesses.
Added
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.
Removed
Factors outside the borrower’s control, including adverse market conditions, economic downturns, supply chain disruptions, or shifts in government regulations, among other factors, can significantly impact the repayment ability of these loans. Recent years have witnessed substantial growth in commercial real estate markets, compounded by intensified competitive pressures that have led to historically low capitalization rates and surging property valuations.
Added
Commercial loans typically involve larger principal amounts than other types of loans, and some of our commercial borrowers have more than one loan outstanding with us. Consequently, an adverse development related to a single commercial loan or credit relationship poses a significantly greater risk of loss compared to one-to-four family residential mortgage loans.
Removed
The economic disruption spurred by the COVID-19 pandemic has particularly affected commercial real estate markets. Additionally, the pandemic has accelerated the adoption of remote work options, potentially influencing the long-term performance of certain office properties within our commercial real estate portfolio.
Added
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.
Removed
Moreover, the federal banking regulatory agencies have raised concerns about vulnerabilities within the current commercial real estate market, recognizing the risks associated with these assets. Unlike residential mortgage loans, commercial and industrial loans may be backed by collateral beyond real estate, such as inventory and accounts receivable.
Added
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.
Removed
The valuation and liquidation of such collateral may pose challenges and are subject to fluctuations in value, especially during defaults. Failures in our risk management policies, procedures, and controls could impede our ability to effectively manage this portfolio, potentially leading to increased delinquencies and higher losses, thereby materially impacting our business, financial condition, and operational performance.
Added
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.
Removed
If the lead institutions on our loan participation agreements do not keep us informed about the changes in credit quality on the underlying loans in a timely manner, this could result in misstatements in our ACL, or possibly losses on these loans.
Added
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.
Removed
Our access to funding sources in amounts adequate to finance our 37 activities or on terms that are acceptable to us could be impaired by factors that affect us specifically, or the financial services industry or economy in general.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRecognizing the interdependence of our practices with service providers and vendors, we actively engage with our partners during the notification and investigation processes following a security incident. 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.
Biggest changeThis includes establishing collaborative partnerships with insurance providers, regulatory agencies, and law enforcement agencies, ensuring a seamless and coordinated approach in the event of a security incident. Recognizing the interdependence of our practices with service providers and vendors, we actively engage with our partners during the notification and investigation processes following a security incident.
The ISO and CIO roles are filled jointly by one individual, who has been with the organization for 19 years with over 25 years of experience in information technology. Our Chief Compliance Officer has been with the organization for over 36 years, with over 15 years of experience in compliance.
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.
The ITBC, which is comprised of several Board members, the CIO, ISO, Chief Executive Officer and Chief Operating Officer, is responsible for establishing and updating the Company's Risk Appetite Statement.
Our governance structure ensures a comprehensive approach to managing cybersecurity risks and threats, aligning with the Board-approved ISP. The ITBC, which is comprised of several Board members, the CIO, ISO, Chief Executive Officer and Chief Operating Officer, is responsible for establishing and updating the Company's Risk Appetite Statement.
Our SIRP is dynamic and adaptable, evolving in tandem with the ever-changing cybersecurity landscape. By regularly updating and refining our response strategies, we remain prepared to confront emerging threats. As of the reporting period, the Company has not experienced any material cybersecurity events or incidents.
By regularly updating and refining our response strategies, we remain prepared to confront emerging threats. The Company also maintains a cyber insurance policy as part of its overall risk management strategy to mitigate financial losses in the event of a cybersecurity incident. As of the reporting period, the Company has not experienced any material cybersecurity events or incidents.
This SIRP serves as a framework for effectively addressing and mitigating security incidents. Within this plan, we integrate accessible resources to fortify our response capabilities. This includes establishing collaborative partnerships with insurance providers, regulatory agencies, and law enforcement agencies, ensuring a seamless and coordinated approach in the event of a security incident.
Moreover, our commitment to robust risk management extends to the maintenance of a comprehensive Security Incident Response Plan ("SIRP"). This SIRP serves as a framework for effectively addressing and mitigating security incidents. Within this plan, we integrate accessible resources to fortify our response capabilities.
The Board's responsibilities include the ongoing administration of the ISP, conducting an annual review, and granting approval. Regular reviews of reports by both the Board and the ITBC, submitted by the ITSC, ensure timely awareness of emerging concerns and facilitate continuous enhancements to our cybersecurity posture.
Regular reviews of reports by both the Board and the ITBC, submitted by the ITSC, ensure timely awareness of emerging concerns and facilitate continuous enhancements to our cybersecurity posture. In addition to governance oversight, the Board designates key roles crucial for effective cybersecurity management.
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. Moreover, our commitment to robust risk management extends to the maintenance of a comprehensive Security Incident Response Plan ("SIRP").
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.
These professionals bring diverse qualifications, certifications, and experience, ensuring a 43 comprehensive approach to our information security initiatives. These qualifications and certifications include Certified Information Security Manager (CISM), Certified Banking Security Manager (CBSM), and Certified Information Security Professional (CISSP). Our governance structure ensures a comprehensive approach to managing cybersecurity risks and threats, aligning with the Board-approved ISP.
Our Chief Compliance Officer has been with the organization for over 37 years, with over 15 years of experience in compliance. These professionals bring diverse qualifications, certifications, and experience, ensuring a comprehensive approach to our information security initiatives. These qualifications and certifications include Certified Information Security Manager (CISM) and Certified Banking Security Manager (CBSM).
Although third-party service providers have encountered cybersecurity events or incidents, these occurrences have not resulted in a material impact on our systems, computing environments, or data. Governance Our Board, supported by the ITBC and the ITSC, actively oversees our processes for management of cybersecurity risks and threats.
Although third-party service providers have encountered cybersecurity events or incidents, these occurrences have not resulted in a material impact on our systems, computing environments, or data. In determining materiality, the Company evaluates factors such as potential financial loss, operational disruptions, regulatory implications, and reputational harm.
Removed
In addition to governance oversight, the Board designates key roles crucial for effective cybersecurity management. This includes appointing the Information Security Officer ("ISO"), Chief Information Officer ("CIO"), and Chief Compliance Officer ("CCO").
Added
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.
Added
To ensure we can keep our operations running smoothly, we maintain and regularly test our business continuity and disaster recovery plans. These measures help minimize disruption and ensure a swift recovery in the event of a cybersecurity incident. Our SIRP is dynamic and adaptable, evolving in tandem with the ever-changing cybersecurity landscape.
Added
The Company remains committed to enhancing its cybersecurity defenses through ongoing risk assessments, investment in technology, and adherence to industry best practices. Governance Our Board, supported by the ITBC and the ITSC, actively oversees our processes for management of cybersecurity risks and threats. The Board's responsibilities include the ongoing administration of the ISP, conducting an annual review, and granting approval.
Added
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

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeAs of December 31, 2023, the net book value of our real properties, including land, was $13.3 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.
Biggest changeAs 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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed0 unchanged
Biggest changeItem 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, 2023, 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.
Biggest changeItem 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.
Mine Safety Disclosures Not applicable. 44 PART II
Mine Safety Disclosures Not applicable. 45 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−0 removed2 unchanged
Biggest changeThe following table sets forth information with respect to our repurchases of our outstanding common shares during the three months ended December 31, 2023: 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, 2023 - October 31, 2023 35,646 $ 10.28 35,646 923,965 November 1, 2023 - November 30, 2023 32,753 10.46 32,753 891,212 December 1, 2023 - December 31, 2023 23,176 11.53 23,176 868,036 91,575 $ 10.66 91,575 (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.
Biggest changeThe 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.
Our cash dividend payout policy is reviewed regularly by management and the Board of Directors. During the year ended December 31, 2023, 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, 2024, the Company paid cash dividends equal to $0.56 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 440 shareholders of record of our common stock as of March 29, 2024.
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.
Added
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

84 edited+8 added−23 removed47 unchanged
Biggest changeImportant factors that could cause our actual results to differ materially from the results anticipated or projected, include, but are not limited to, the following: • potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth; • changes in the interest rate environment, including the recent past increases in the Federal Reserve benchmark rate and duration at which such elevated interest rate levels are maintained, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; • the impact of continuing high inflation and the current and future monetary policies of the Federal Reserve in response thereto; • the effects of any federal government shutdowns; • general economic conditions, either nationally or in our market areas, which are worse than expected; • 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; • fluctuations in real estate values, and residential, commercial and multifamily real estate market conditions; • demand for loans and deposits in our market area; • our ability to implement and change our business strategies; • competition among depository and other financial institutions and equipment financing companies; • 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 loans and leases we have made and make; • 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 the third-party vendors who perform several of our critical processing functions; • 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; 46 • our ability to retain key employees; • our compensation expense associated with equity allocated or awarded to our 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 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 such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and its implementing regulations that adversely affect our business, and the availability of resources to address such changes; • our ability to pay dividends on our common stock; • the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; • other economic, competitive, governmental, regulatory, and technical factors affecting our operations, pricing, products and services; and • the other risks described elsewhere in this Form 10 K and our other reports filed with and furnished to the U.S.
Biggest changeImportant 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.
We believe that maintaining a strong capital position safeguards the long-term interests of First Bank Richmond. 49 Interest Rate Risk Management. 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.
We believe that maintaining a strong capital position safeguards the long-term interests of First Bank Richmond. Interest Rate Risk Management. 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.
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.
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.
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; • statements regarding the quality of our loan and investment portfolios; and 45 • estimates of our risks and future costs and benefits.
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.
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 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 59 considerations.
(2) Net interest margin represents net interest income divided by average total interest-earning assets. 56 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. 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.
Banking regulations may limit the amount of dividends that may be paid to us by First Bank Richmond. "Note 17: 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.
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.
At December 31, 2023, our largest nonperforming loan was a $4.9 million nonaccrual commercial construction and development loan that is currently subject to litigation between the developer and other parties. At the time of origination, this loan had a loan to value ratio of 73%. Allowance for Credit Losses.
At December 31, 2024, our largest nonperforming loan was a $4.9 million nonaccrual commercial construction and development loan that is currently subject to litigation between the developer and other parties. At the time of origination, this loan had a loan to value ratio of 73%. Allowance for Credit Losses.
At December 31, 2023, 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, 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.
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, 2023.
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.
As of December 31, 2023, 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, 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.
Selected Consolidated Financial and Other Data The Financial Condition Data and Operating Data as of and for the years ended December 31, 2023 and 2022 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, 2024 and 2023 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, 2023, 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, 2024, it would have exceeded all regulatory capital requirements.
At December 31, 2023, the Bank’s CET1 capital exceeded the required capital conservation buffer. 59 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, 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.
Based on our current capital allocation objectives for 2024, 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. 58 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 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.
We believe that strong asset quality is a key to long-term financial success. Our strategy for credit risk management focuses on an experienced team of credit professionals, well-defined credit policies and procedures, appropriate loan underwriting criteria and active credit monitoring. Our non-performing loans to total loans ratio was 0.72% at December 31, 2023. Capital Position.
We believe that strong asset quality is a key to long-term financial success. Our strategy for credit risk management focuses on an experienced team of credit professionals, well-defined credit policies and procedures, appropriate loan underwriting criteria and active credit monitoring. Our non-performing loans to total loans ratio was 0.58% at December 31, 2024. Capital Position.
(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. 51 Financial Condition at December 31, 2023 Compared to December 31, 2022 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. 52 Financial Condition at December 31, 2024 Compared to December 31, 2023 General.
The amount of dividends, if any, we may pay may be limited as more fully discussed in "Note 17: Regulatory Capital" in the accompanying notes to consolidated financial statements contained in Item 8 of this Form 10-K. 57 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: 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.
At December 31, 2023, Richmond Mutual Bancorporation, on an unconsolidated basis, had $13.2 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, 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.
Assuming continued payment during 2024 at the current dividend rate of $0.14 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, 2023.
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.
These include payments related to (i) long-term borrowings (Note 10 - Federal Home Loan Bank Advances), (ii) time deposits with stated maturity dates (Note 9 - Deposits) and (iii) commitments to extend credit and standby letters of credit (Note 13 - Commitments and Contingent Liabilities).
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).
At December 31, 2023, on a consolidated basis, we had $ 1.5 billion in assets, $1.1 billion in loans, $1.0 billion in deposits and $134.9 million in stockholders’ equity. First Bank Richmond’s risk-based capital ratio at December 31, 2023 was 14.1%, exceeding the 10.0% requirement for a well-capitalized institution.
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.
These scenarios are incorporated into our contingency funding plan, which provides the basis for the identification of our liquidity needs. As of December 31, 2023, we had approximately $6.7 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, 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.
The AOCL impact to equity, after tax effecting the unrealized loss, was $43.0 million at December 31, 2023, compared to $49.8 million at December 31, 2022. First Bank Richmond was considered “well-capitalized” as defined by all regulatory standards as of December 31, 2023. 53 Comparison of Results of Operations for the Years Ended December 31, 2023 and 2022 General .
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 .
For the year ended December 31, 2023, we reported net income of $9.5 million, compared with net income of $13.0 million for 2022. 47 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, 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.
The allowance for credit losses on loans and leases as a percentage of the total loan and lease portfolio was 1.42% at year-end 2023, compared to 1.27% at year-end 2022. Net charge-offs in 2023 equaled 0.06% of total average loans and leases outstanding compared to net charge-offs of 0.03% of total average loans and leases outstanding in 2022.
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 increase primarily was the result of an increase in the average cost of 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.
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.
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. Core deposits represented 68.7% of our total deposits as of December 31, 2023. Balance Sheet Growth .
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 .
As of December 31, 2023, based upon available, pledgeable collateral, our total remaining borrowing capacity with the FHLB was approximately $86.4 million. Furthermore, at December 31, 2023, we had approximately $147.3 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, 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.
Shareholders' equity totaled $134.9 million at December 31, 2023 and $132.4 million at December 31, 2022. In addition to net income of $9.5 million, other sources of capital during 2023 included $612,000 related to the allocation of ESOP shares during the year, $1.6 million related to stock-based compensation and a decrease in AOCL of $6.7 million.
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.
Total assets increased $133.0 million, or 10.0%, to $1.5 billion at December 31, 2023 from December 31, 2022. The increase was driven by a $128.4 million, or 13.3%, increase in the loan and lease portfolio, net of allowance for credit losses on loans and leases, partially offset by a $3.9 million, or 1.3% decrease in investment securities.
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.
We paid regular quarterly cash dividends of $0.14 per common share during 2023, compared to $0.10 per share during 2022. This equates to a dividend payout ratio of 62.4% in 2023 and 34.0% in 2022.
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.
The average yield on FHLB stock during 2023 was 7.92%, up 387 basis points from 4.05% during the prior year, while the average balance of FHLB stock outstanding during 2023 was $10.8 million, up from $9.9 million during 2022. Interest on cash and cash equivalents increased $409,000 due to a 298 basis point increase in the average yield.
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 decrease was primarily due to maturities and paydowns of securities of $22.5 million, partially offset by a $8.5 million upward mark-to-market adjustment in the fair value of securities available for sale and the purchase of $11.2 million of new securities. Deposits.
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.
Total non-interest expense increased $582,000, or 1.9%, to $30.7 million during 2023 compared to 2022, primarily due to increases in deposit insurance expense, data processing fees, and legal and professional fees, partially offset by decreases in salaries and employee benefits and equipment expenses.
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.
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, 2023 (Dollars in thousands) 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 As of December 31, 2022 Total risk-based capital (to risk weighted assets) $ 164,804 14.3 % $ 92,134 8.0 % $ 115,168 10.0 % Tier 1 risk-based capital (to risk weighted assets) 152,391 13.2 69,101 6.0 92,134 8.0 Common equity tier 1 capital (to risk weighted assets) 152,391 13.2 51,826 4.5 74,859 6.5 Tier 1 leverage (core) capital (to adjusted tangible assets) 152,391 11.2 54,421 4.0 68,026 5.0 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, 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.
The decrease in AOCL is primarily due to the improvement in mark-to-market values associated with our available-for-sale investment securities portfolio. At December 31, 2023, the available for sale portfolio had a net unrealized loss of $54.5 million compared to a net unrealized loss of $63.0 million at December 31, 2022.
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.
At December 31, 2023, our commercial loan portfolio, which includes commercial and multi-family real estate loans, commercial and industrial loans and construction loans, totaled $753.6 million, or 68.0% of total loans and leases, with approximately $253.5 million of these loans, or 33.6% of our total loans and leases, located in the Columbus, Ohio market. Deposit Services.
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.
Liquidity measures the ability to meet current and future cash flow needs as they become due. The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits and to take advantage of interest rate market opportunities.
The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits and to take advantage of interest rate market opportunities.
Uses of capital during 2023 included $5.9 million of dividends paid on common stock and $6.3 million of stock repurchases. 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 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.
While net interest income benefited from the repricing impact of the higher interest rate environment on earning asset yields, the benefits were offset by the higher cost of interest-bearing deposit accounts and borrowings which tend to be shorter in duration than our assets and re-price or reset faster than assets. Provision for Credit Losses .
While interest income benefited from the repricing impact of the higher interest rate environment on earning asset yields earlier in the year, these benefits were offset by the higher cost of interest-bearing deposit accounts and borrowings, which tend to reprice or reset faster than assets.
The decrease in net income was due to a $19.5 million, or 191.1%, increase in interest expense, a $256,000, or 5.3%, decrease in non-interest income and a $583,000, or 1.9%, increase in non-interest expense, partially offset by a $15.6 million, or 30.0%, increase in interest income and a $1.3 million, or 45.5%, decrease in income tax expense. Interest Income .
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 .
Total interest income for 2023 increased $15.6 million or 30.0% over 2022. The increase primarily was a result of an 80 basis point increase in the average yield on interest earning assets, alongside $114.1 million increase in the average balance of interest earning assets.
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.
We also obtain funds by utilizing FHLB advances. Funds not invested in loans generally are invested in investment securities, including mortgage-backed and mortgage-related securities and agency and municipal bonds. Our results of operations are primarily dependent on net interest income.
We also obtain funds by utilizing FHLB advances. Funds not invested in loans generally are invested in investment securities, including mortgage-backed and mortgage-related securities and agency and municipal bonds. Richmond Mutual Bancorporation's primary business activities are currently limited to one significant business segment, which is community banking. Our results of operations are primarily dependent on net interest income.
Interest expense on borrowings, consisting solely of FHLB advances, increased $3.8 million, or 124.4%, due to a 146 basis point increase on the average rate paid to 3.18% in 2023 from 1.72% in 2022, and a $38.1 million, or 21.1%, increase in the average balance of borrowings to $218.0 million in 2023 from $180.0 million in 2022.
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 savings and money market accounts increased 106 basis points to 1.82% from 0.76% in 2022, while the average balance of those accounts decreased $10.2 million, or 3.6%, to $274.5 million in 2023 compared to $284.7 million in 2022, resulting a $2.8 million increase in interest expense.
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.
Interest earned on loans and leases increased $14.2 million, or 31.8%, due to a $146.6 million increase in the average balance of and a 66 basis point increase in the average yield earned on loans and leases.
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.
The average balance of interest-bearing checking accounts decreased $17.2 million, or 10.4%, to $148.0 million in 2023 from $165.2 million in 2022, while the average rate paid on interest-bearing checking accounts increased 39 basis points to 0.71% in 2023 from 0.32% in 2022, resulting in a $520,000 increase in interest expense.
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.
At December 31, 2023 2022 Amount Percent Amount Percent (Dollars in thousands) Real estate loans: Residential mortgage (1) $ 162,123 14.65 % $ 146,129 14.99 % Home equity lines of credit 10,904 0.99 11,010 1.13 Multi-family 138,757 12.54 124,914 12.81 Commercial mortgage 341,633 30.87 298,087 30.57 Construction and development 157,805 14.26 139,923 14.35 Total real estate loans 811,222 73.31 720,063 73.85 Consumer loans 23,264 2.10 21,048 2.16 Commercial business loans and leases: Commercial and industrial 115,428 10.43 100,420 10.30 Leases 156,598 14.15 133,469 13.69 Total commercial business loans and leases 272,026 24.58 233,889 23.99 Total loans and leases 1,106,512 100.00 % 975,000 100.00 % Less: Deferred fees and discounts 776 896 Allowance for credit losses on loans and leases 15,663 12,413 Total loans and leases, net $ 1,090,073 $ 961,691 _____________________ (1) Includes $6.4 million and $4.7 million of loans secured by second mortgages on residential properties at December 31, 2023 and 2022, respectively. 52 Nonperforming loans and leases, consisting of nonaccrual loans and leases and accruing loan and leases more than 90 days past due, totaled $8.0 million, or 0.72% of total loans and leases at December 31, 2023, compared to $9.2 million, or 0.94% of total loans and leases at December 31, 2022.
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.
The decrease in nonperforming loans was primarily attributable to a $1.3 million decrease in commercial and industrial loans, primarily due to one loan of $1.3 million secured by business assets and a second mortgage, previously past due more than 90 days and still accruing that was paid off in 2023.
The decrease in nonperforming loans and leases was primarily attributable to a $1.2 million decrease in commercial and industrial loans, primarily due to one loan of $1.2 million secured by business assets, previously nonaccruing, that was paid off in 2024.
Years Ended December 31, 2023 2022 (In thousands) Selected Operations Data: Total interest income $ 67,410 $ 51,858 Total interest expense 29,748 10,219 Net interest income 37,662 41,639 Provision for credit losses 532 600 Net interest income after provision for credit losses 37,130 41,039 Service charges on deposit accounts 1,115 1,050 Card fee income 1,259 1,210 Loan and lease servicing fees 448 862 Gain on loan and lease sales 518 639 Other income 1,271 1,105 Total non-interest income 4,611 4,866 Total non-interest expenses 30,738 30,157 Income before provision for income taxes 11,003 15,748 Provision for income taxes 1,516 2,783 Net income $ 9,487 $ 12,965 50 At or For the Years Ended December 31, 2023 2022 Selected Financial Ratios and Other Data: Performance ratios: Return on average assets (ratio of net income to average total assets) 0.68 % 1.01 % Return on average equity (ratio of net income to average equity) 7.36 % 8.79 % Yield on interest-earning assets 4.98 % 4.18 % Rate paid on interest-bearing liabilities 2.59 % 1.01 % Interest rate spread information: Average during period 2.39 % 3.17 % End of period 2.27 % 3.09 % Net interest margin (1) 2.78 % 3.36 % Operating expense to average total assets 2.20 % 2.35 % Average interest-earning assets to average interest-bearing liabilities 117.81 % 122.34 % Efficiency ratio (2) 72.71 % 64.85 % Asset quality ratios: Non-performing assets to total assets (3) 0.56 % 0.69 % Non-performing loans and leases to total gross loans and leases (4) 0.72 % 0.94 % Allowance for credit losses on loans and leases to non-performing loans and leases (4) 195.80 % 135.28 % Allowance for credit losses on loans and leases to total gross loans and leases 1.42 % 1.27 % Net charge-offs to average outstanding loans and leases during the period 0.06 % 0.03 % Capital ratios: Common equity tier 1 capital (to risk weighted assets) (5) 12.85 % 13.23 % Tier 1 leverage (core) capital (to adjusted tangible assets) (5) 10.64 % 11.20 % Tier 1 risk-based capital (to risk weighted assets) (5) 12.85 % 13.23 % Total risk-based capital (to risk weighted assets) (5) 14.10 % 14.31 % Equity to total assets at end of period 9.23 % 10.01 % Average equity to average assets 9.20 % 11.51 % Per share data: Basic earnings per share $ 0.91 $ 1.20 Diluted earnings per share 0.91 1.17 Cash dividends paid 0.56 0.40 Book value at year end 12.03 11.28 Tangible book value at year end (6) 12.03 11.28 Other data: Number of full-service offices 12 12 Full-time equivalent employees 176 181 _____________________ (1) Net interest income divided by average interest earning assets.
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.
The average rate paid on certificate of deposit accounts increased 213 basis points to 3.29% from 1.16% in 2022, while the average balance of certificate of deposit accounts increased $125.3 million, or 32.6%, to $509.3 million in 2023 compared to $384.0 million in 2022, resulting a $12.3 million increase in interest expense.
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 increase in stockholders’ equity primarily was the result of net income of $9.5 million and a decrease in Accumulated Other Comprehensive Loss (“AOCL”) of $6.7 million, partially offset by the payment of $5.9 million in dividends to Company stockholders, the repurchase of $6.3 million of Company common stock, and the one-time adjustment to retained earnings of $3.8 million for the adoption of CECL during the first quarter.
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 provision for credit losses in 2023 was $532,000, a $68,000, or 11.3%, decrease compared to $600,000 in 2022. 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.
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.
As of December 31, 2023, the Company had approximately 868,036 shares available for repurchase under its existing stock repurchase program. 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.
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.
Potentially higher risk segments of the portfolio, such as hotels and restaurants, are being closely monitored. Investment Securities. Investment securities decreased $3.9 million, or 1.3%, to $287.6 million at December 31, 2023, from $291.6 million at December 31, 2022.
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.
We also experienced a $13.8 million, or 11.1%, increase in multi-family loans, a $15.9 million, or 10.1%, increase in residential real estate loans (including home equity lines of credit), a $17.9 million, or 12.8%, increase in construction and development loans, a $15.0 million, or 14.9% increase in commercial and industrial loans, and a $2.2 million, or 10.5%, increase in consumer loans.
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).
Non-interest Income . Total non-interest income decreased $256,000, or 5.3%, to $4.6 million for 2023 compared to $4.9 million for 2022.
Non-interest Income . Total non-interest income increased $147,000, or 3.2%, to $4.8 million for 2024 compared to $4.6 million for 2023.
Since March 2022, in response to inflation, the Federal Open Market Committee (“FOMC”) of the Federal Reserve System has increased the target range for the federal funds rate by 500 basis points, including 100 basis points during 2023, to a range of 5.25% to 5.50%.
Between March 2022 and July 2023, in response to elevated inflation, the Federal Open Market Committee (“FOMC”) of the Federal Reserve increased interest rates by a total of 525 basis points, bringing the target range to 5.25% to 5.50%.
Total deposits increased $35.9 million, or 3.6%, to $1.0 billion at December 31, 2023 compared to December 31, 2022. This increase was primarily due to an increase in non-brokered time deposits of $46.4 million, or 22.9%, as well as an increase in brokered time deposits of $10.9 million, or 4.2%.
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%.
Years Ended December 31, 2023 2022 Average Balance Outstanding Interest Earned/ Paid Yield/ Rate Average Balance Outstanding Interest Earned/ Paid Yield/ Rate (Dollars in thousands) Interest-earning assets: Loans and leases receivable $ 1,044,471 $ 58,794 5.63 % $ 897,918 $ 44,594 4.97 % Securities 285,600 7,203 2.52 % 318,917 6,712 2.10 % FHLB stock 10,750 851 7.92 % 9,856 399 4.05 % Cash and cash equivalents and other 13,728 562 4.09 % 13,739 153 1.11 % Total interest-earning assets 1,354,549 67,410 4.98 % 1,240,430 51,858 4.18 % Non-earning assets 45,212 40,659 Total assets 1,399,761 1,281,089 Interest-bearing liabilities: Savings and money market accounts 274,497 4,989 1.82 % 284,725 2,153 0.76 % Interest-bearing checking accounts 147,964 1,054 0.71 % 165,213 534 0.32 % Certificate accounts 509,316 16,767 3.29 % 384,038 4,441 1.16 % Borrowings 218,025 6,938 3.18 % 179,966 3,091 1.72 % Total interest-bearing liabilities 1,149,802 29,748 2.59 % 1,013,942 10,219 1.01 % Noninterest-bearing demand deposits 107,192 111,990 Other liabilities 13,924 7,686 Stockholders' equity 128,843 147,471 Total liabilities and stockholders' equity 1,399,761 1,281,089 Net interest income $ 37,662 $ 41,639 Net earning assets $ 204,747 $ 226,488 Net interest rate spread (1) 2.39 % 3.17 % Net interest margin (2) 2.78 % 3.36 % Average interest-earning assets to average interest-bearing liabilities 117.81 % 122.34 % _____________________ (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, 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.
Net income totaled $9.5 million for 2023 compared to $13.0 million in 2022, a decrease of $3.5 million or 26.8%.
Net income totaled $9.4 million for 2024 compared to $9.5 million in 2023, a decrease of $109,000 or 1.2%.
The decline in the effective tax rate primarily was due to the use of a pooled captive insurance company, which was formed during 2022, that allows the Company to assume more control over insurance risks, as well as tax deductions related to the employee stock ownership plan. 55 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 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.
Our loan and lease portfolio, net of allowance for credit losses on loans and leases, increased $128.4 million, or 13.3%, to $1.1 billion at December 31, 2023 from $961.7 million at December 31, 2022.
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.
The allowance for credit losses on loans and leases totaled $15.7 million, or 1.42% of total loans and leases outstanding at December 31, 2023. At December 31, 2022, prior to the adoption of CECL, the allowance for loan and lease losses totaled $12.4 million, or 1.27% of total loans and leases outstanding.
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.
Interest Expense . Total interest expense increased $19.5 million, or 191.1%, to $29.7 million during 2023 compared to $10.2 million during 2022.
Interest Expense . Total interest expense increased $12.1 million, or 40.6%, to $41.8 million during 2024 compared to $29.7 million during 2023.
These increases were partially offset by a decrease of $23.9 million, or 8.5%, in savings and money market accounts, and a $5.6 million, or 3.6%, decrease in interest-bearing demand deposits.
These increases were partially offset by a decrease of $20.8 million, or 7.8%, in demand deposit accounts, and an $11.3 million, or 4.2%, decrease in brokered time deposits.
Income tax expense decreased $1.3 million in 2023 compared to 2022. This decrease in income tax expense was primarily due to pretax income decreasing $4.7 million, or 30.1%, and a lower effective tax rate in 2023. The effective tax rate for the year ended 2023 was 13.8% compared to 17.7% in 2022.
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%.
Interest earned on investment securities, excluding FHLB stock, increased $491,000, or 7.3%, due to a 42 basis point increase in the average yield, partially offset by a $33.3 million decrease in the average balance of the portfolio. Dividends on FHLB stock increased $452,000, or 113.3%, during 2023 compared to the prior year.
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.
The majority of the growth occurred in commercial real estate loans which increased $43.5 million, or 14.6%, to $341.6 million, and in direct financing leases which increased $23.1 million, or 17.3%, to $156.6 million at December 31, 2023 compared to the prior year.
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.
Data processing fees increased $636,000, or 23.4%, to $3.3 million in 2023 from $2.7 million in 2022, primarily due to increased software and core provider expenses. Legal and professional fees increased $178,000, or 12.5%, to $1.6 million in 2023 from $1.4 in 2022, primarily due to increased accounting services expense.
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.
Stockholders’ equity totaled $134.9 million at December 31, 2023, an increase of $2.5 million, or 1.9%, from December 31, 2022.
Borrowings, consisting solely of FHLB advances, totaled $265.0 million at December 31, 2024, compared to $271.0 million at December 31, 2023. Stockholders’ Equity. Stockholders’ equity totaled $132.9 million at December 31, 2024, a decrease of $2.0 million, or 1.5%, from December 31, 2023.
Management attributes the shift in funds to customers taking advantage of higher rates being paid on time deposits in 2023 as a result of interest rate hikes enacted by the Federal Reserve. At December 31, 2023, brokered deposits equaled $268.8 million, or 25.8% of total deposits compared to $257.9 million, or 25.7% of total deposits at December 31, 2022.
Management attributes the shift in funds from transaction accounts to retail certificates of deposit, which primarily occurred during the first nine months of 2024, to customers taking advantage of higher rates being paid on time deposits as a result of interest rate hikes instituted by the Federal Reserve.
Additionally, as a part of CECL adoption, the Company established an allowance for credit losses on unfunded commitments by recording a one-time adjustment from equity of $1.8 million. This allowance, which is reported in other liabilities on the Condensed Consolidated Balance Sheets, totaled $1.6 million at December 31, 2023.
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.
Salaries and employee benefits decreased $1.0 million, or 5.6%, to $17.4 million in 2023 from $18.5 million in 2022, primarily due to decreased bonus expense. Equipment expenses decreased $141,000, or 11.1%, to $1.1 million in 2023 from $1.3 million in 2022, primarily due to decreased depreciation expenses. Income Tax Expense .
Equipment expenses decreased $201,000, or 17.8%, to $927,000 in 2024 from $1.1 million in 2023, primarily due to reduced depreciation expense. Other expenses decreased $264,000, or 6.7%, to $3.7 million in 2024 from $3.9 million in 2023, primarily due to a decrease in loan closing expenses and reduced losses due to fraud. Income Tax Expense .
At December 31, 2023, noninterest-bearing deposits totaled $114.4 million, or 11.0% of total deposits, compared to $106.4 million, or 10.6%, of total deposits at December 31, 2022. As of December 31, 2023, approximately $216.0 million of our deposit portfolio, or 20.7% of total deposits, excluding collateralized public deposits, was uninsured.
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.
Our net interest margin in 2023 was 2.78%, a decrease of 58 basis points compared to 2022 as a result of a decline in net interest income coupled with an increase in average-interest earning assets during the year.
Our net interest margin in 2024 was 2.67%, a decrease of 11 basis points compared to 2023, as the rate paid on interest-bearing liabilities rose faster than the yield on interest-earning assets.
The Company evaluated its exposure to potential loan and lease losses as of December 31, 2023, which evaluation included consideration of persistent inflation, higher interest rates, a weakened economic growth and unemployment outlook, stock market volatility, and increased geopolitical risk. Credit metrics are being reviewed and stress testing is being performed on the loan portfolio on an ongoing basis.
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.
Net Interest Income . Net interest income before provision for credit losses decreased $4.0 million, or 9.5%, to $37.7 million in 2023 compared to $41.6 million in 2022, primarily due to a 78 basis point decrease in the average interest rate spread.
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.
Deposit insurance expense increased $669,000, or 135.4%, to $1.2 million in 2023 from $494,000 in 2022, due to a change in our asset and deposit mix, as well as an increase in the initial base deposit insurance assessment rate during 2023.
Salaries and employee benefits increased $909,000, or 5.2%, to $18.3 million in 2024 from $17.4 million in 2023, primarily due to higher health insurance and compensation costs. Deposit insurance expense increased $367,000, or 31.6%, to $1.5 million in 2024 from $1.2 million in 2023, due to a change in our asset and deposit mix.

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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
Biggest changeBasis Point (“bp”) Change in Interest Rates (1) Estimated Increase (Decrease) in EVE Estimated EVE (2) Amount Percent (Dollars in thousands) +300 $ 91,055 $ (44,673) (32.91) % +200 108,951 (26,777) (19.73) +100 121,703 (14,025) (10.33) Level 135,728 — — -100 155,610 19,882 14.65 -200 167,204 31,476 23.19 -300 184,073 48,345 35.62 _____________________ (1) Assumes an instantaneous uniform change in interest rates at all maturities.
Biggest changeBasis 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.
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. 61
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
The table below sets forth, as of December 31, 2023, 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 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, 2023, 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, 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.
Change in Interest Rates (basis points) (1) Net Interest Income Year 1 Forecast Year 1 Change from Level (Dollars in thousands) +300 $ 34,771 (2.71) % +200 35,220 (1.46) +100 35,476 (0.74) Level 35,741 — -100 36,513 2.16 -200 37,379 4.58 -300 39,578 10.74 _________________________ (1) Assumes an immediate uniform change in interest rates at all maturities. 60 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 $ 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.

Other RMBI 10-K year-over-year comparisons