Richmond Mutual Bancorporation, Inc. (RMBI) - 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. Richmond Mutual Bancorporation, Inc. is a Maryland corporation and the holding company for First Bank Richmond (operating as First Bank Midwest following a merger completed July 1, 2026). The Company operates as a community bank with branches in Indiana and Ohio, focusing on commercial real estate, commercial and industrial loans, and direct financing leases. The financial statements presented do not include the results of The Farmers Bancorp, which merged into the Company effective July 1, 2026.
Key Financial Metrics
| Metric | Q2 2026 (Three Months) | YTD 2026 (Six Months) | Q2 2025 (Three Months) | YTD 2025 (Six Months) |
|---|---|---|---|---|
| Net Income | $2.23 million | $5.01 million | $2.60 million | $4.57 million |
| Diluted EPS | $0.22 | $0.51 | $0.26 | $0.46 |
| Net Interest Income | $12.07 million | $23.52 million | $10.76 million | $21.02 million |
| Net Interest Margin (NIM) | 3.22% | 3.17% | 2.93% | 2.86% |
| Provision for Credit Losses | $0.82 million | $1.52 million | $0.74 million | $1.48 million |
| Total Assets | $1.55 billion | As of June 30, 2026 | ||
| Total Loans & Leases (Net) | $1.21 billion | As of June 30, 2026 | ||
| Total Deposits | $1.15 billion | As of June 30, 2026 | ||
| Stockholders' Equity | $148.27 million | As of June 30, 2026 | ||
| Cash & Cash Equivalents | $34.72 million | As of June 30, 2026 |
Material Changes vs. Prior Period
- Net Income: Q2 2026 net income decreased 14.4% compared to Q2 2025, primarily due to a $1.9 million increase in non-interest expenses driven by merger-related costs. However, YTD 2026 net income increased 9.7% compared to YTD 2025.
- Net Interest Income: Increased 12.2% in Q2 2026 and 11.9% YTD 2026, driven by higher loan yields (6.55% in Q2 2026 vs. 6.51% in Q2 2025) and a reduction in funding costs (deposit rates fell to 2.82% in Q2 2026 from 3.14% in Q2 2025).
- Non-Interest Expense: Increased 25.4% in Q2 2026 to $10.2 million, largely due to $1.9 million in nonrecurring merger expenses. Excluding these, core expenses were relatively stable or decreased.
- Asset Growth: Total assets increased 1.7% to $1.55 billion from year-end 2025. Loans and leases grew 2.6% to $1.21 billion, while investment securities decreased 2.8% as proceeds were used to fund loan growth.
- Credit Quality: Nonaccrual loans increased to $20.0 million from $13.2 million at year-end 2025, primarily due to the transfer of a $2.4 million multi-family loan and a $3.5 million troubled loan modification. Net charge-offs for the first half of 2026 were $0.90 million.
Guidance, Outlook, and Risks
- Merger Integration: The Company completed its merger with The Farmers Bancorp on July 1, 2026. The combined entity will operate as First Bank Midwest. The financial results for the quarter ended June 30, 2026, do not reflect the acquired assets or liabilities. Management expects the merger to expand market presence and provide operating efficiencies.
- Economic Outlook: Management cites persistent inflation, slowing economic growth, labor market uncertainty, and geopolitical tensions as key risks. These factors may impact borrower performance and credit demand.
- Capital Position: The Bank remains "well-capitalized" under regulatory standards, with a total risk-based capital ratio of 14.24% as of June 30, 2026. The Company paid a quarterly dividend of $0.15 per share and does not currently have an active stock repurchase program.
- Liquidity: Liquidity is considered adequate, with $282.8 million in liquid assets (cash and available-for-sale securities) and $115.0 million in remaining borrowing capacity at the Federal Home Loan Bank.
- Risk Factors: Key risks include interest rate volatility, potential recessionary pressures, credit quality deterioration, and the successful integration of the Farmers Bancorp merger.
Investor Verification Checklist
- Merger Accounting: Verify the final purchase price allocation and goodwill recognition for the Farmers Bancorp merger in the subsequent 10-Q or 10-K, as the accounting was incomplete at the time of this filing.
- Nonaccrual Trends: Monitor the $20.0 million nonaccrual balance, specifically the $3.5 million multi-family loan modified in Q2 2026, to assess potential future charge-offs.
- Merger Expense Impact: Confirm that the $1.9 million in merger expenses is a one-time cost and review future quarters for integration-related costs.
- Deposit Mix: Review the composition of deposits, noting that brokered deposits represent 23.0% of the total, to assess funding stability.
- Unrealized Losses: Note the $44.2 million in gross unrealized losses on available-for-sale securities; verify management's intent to hold these to maturity to avoid realizing losses.