RICHMOND MUTUAL BANCORPORATION, INC. ANNOUNCES 2023 SECOND QUARTER FINANCIAL RESULTS
President's Comments
Garry Kleer, Chairman, President and Chief Executive Officer, commented, "While the interest rate increases by the Federal Reserve have impacted our net interest income and net interest margin, we had another profitable quarter and were able to maintain and even slightly increase our deposits. Non-performing assets have remained stable at very acceptable levels and we have increased our allowance for credit losses due to the implementation of the new accounting standard for current expected credit losses."
Second Quarter Performance Highlights:
- Assets totaled
$1.4 billion $1.3 billion - Loans and leases, net of allowance for credit losses, totaled
$1.0 billion $989.1 million $961.7 million - Nonperforming loans and leases totaled
$8.5 million 0.81% of total loans and leases, at June 30, 2023, compared to$8.6 million 0.86% of total loans and leases, at March 31, 2023, and$9.2 million 0.94% at December 31, 2022. - The allowance for credit losses totaled
$15.4 million 1.45% of total loans and leases outstanding, at June 30, 2023, compared to$15.5 million 1.54% of total loans and leases outstanding, at March 31, 2023. The allowance for loan and lease losses totaled$12.4 million 1.27% of total loans and leases outstanding, at December 31, 2022. On January 1, 2023, the Bank adopted the accounting standard referred to as Current Expected Credit Loss ("CECL"), which resulted in a one-time adjustment from equity into the allowance for credit losses and the allowance for off-balance sheet commitments in the amount of$3.8 million - The provision for credit losses totaled
$8,000 $170,000 $200,000 - Deposits totaled
$1.0 billion $104.7 million 10.1% of total deposits, compared to$96.8 million 9.4% of total deposits at March 31, 2023, and$106.4 million 10.6% of total deposits at December 31, 2022. - Stockholders' equity totaled
$130.8 million $136.1 million $133.0 million 9.28% at June 30, 2023. - Net interest income decreased
$538,000 5.4% , to$9.3 million $9.9 million $1.2 million 11.5% from$10.5 million - Annualized net interest margin was
2.77% for the current quarter, compared to3.04% in the preceding quarter and3.45% the second quarter a year ago. - The Company repurchased 237,072 shares of common stock at an average price of
$10.26 - The Bank's Tier 1 capital to total assets was
10.81% , well in excess of all regulatory requirements at June 30, 2023.
Income Statement Summary
Net interest income before the provision for credit losses decreased
Interest income increased
Interest income on loans and leases increased
Interest income on investment securities, excluding FHLB stock, increased
Interest expense increased
Interest expense on FHLB borrowings increased
Annualized net interest margin decreased to
The provision for credit losses totaled
Noninterest income increased
Total noninterest expense decreased
Income tax expense decreased
Balance Sheet Summary
Total assets increased
The increase in loans and leases was attributable to an increase in commercial real estate loans, direct financing leases and multi-family loans of
Nonperforming loans and leases, consisting of nonaccrual loans and leases and accruing loans and leases more than 90 days past due, totaled
On January 1, 2023, the Bank adopted the accounting standard referred to as the current expected credit loss, or CECL. As a result of the change in methodology from the incurred loss method to the CECL method, on January 1, 2023 the Company recorded a one-time adjustment from equity into the allowance for credit losses in the amount of
Management regularly analyzes conditions within its geographic markets and evaluates its loan and lease portfolio. The Company evaluated its exposure to potential credit losses as of June 30, 2023, which evaluation included consideration of a potential recession due to inflation, rising interest rates, stock market volatility, and the
Total deposits increased
Stockholders' equity totaled
During the quarter ended June 30, 2023, the Company repurchased a total of 237,072 shares of Company common stock at an average price of
About Richmond Mutual Bancorporation, Inc.
Richmond Mutual Bancorporation, Inc., headquartered in
FORWARD-LOOKING STATEMENTS:
This document and other filings by the Company with the Securities and Exchange Commission (the "SEC"), as well as press releases or other public or stockholder communications released by the Company, may contain forward-looking statements, including, but not limited to, (i) statements regarding the financial condition, results of operations and business of the Company, (ii) statements about the Company's plans, objectives, expectations and intentions and other statements that are not historical facts and (iii) other statements identified by the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions that are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current beliefs and expectations of the Company's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. When considering forward-looking statements, keep in mind these risks and uncertainties. Undue reliance should not be placed on any forward-looking statement, which speaks only as of the date made.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth caused by increasing political instability from acts of war including
The factors listed above could materially affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake - and specifically declines any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Financial Highlights (unaudited) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
SELECTED OPERATIONS DATA: | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
(In thousands, except for per share amounts) | |||||||||
Interest income | $ 16,223 | $ 15,193 | $ 12,448 | $ 31,415 | $ 24,390 | ||||
Interest expense | 6,890 | 5,322 | 1,899 | 12,211 | 3,788 | ||||
Net interest income | 9,333 | 9,871 | 10,549 | 19,204 | 20,602 | ||||
Provision for credit losses(1) | 8 | 170 | 200 | 178 | 400 | ||||
Net interest income after provision for credit losses | 9,325 | 9,701 | 10,349 | 19,026 | 20,202 | ||||
Noninterest income | 1,178 | 1,096 | 1,176 | 2,275 | 2,292 | ||||
Noninterest expense | 7,336 | 7,361 | 7,158 | 14,698 | 14,491 | ||||
Income before income tax expense | 3,167 | 3,436 | 4,367 | 6,603 | 8,003 | ||||
Income tax provision | 475 | 532 | 882 | 1,007 | 1,500 | ||||
Net income | $ 2,692 | $ 2,904 | $ 3,485 | $ 5,596 | $ 6,503 | ||||
Shares outstanding | 11,449 | 11,686 | 11,848 | 11,449 | 11,848 | ||||
Average shares outstanding: | |||||||||
Basic | 10,403 | 10,600 | 10,763 | 10,501 | 10,905 | ||||
Diluted | 10,476 | 10,736 | 11,125 | 10,581 | 11,300 | ||||
Earnings per share: | |||||||||
Basic | $ 0.26 | $ 0.27 | $ 0.32 | $ 0.53 | $ 0.60 | ||||
Diluted | $ 0.26 | $ 0.27 | $ 0.31 | $ 0.53 | $ 0.58 | ||||
________________________________________________ | |
(1) | As a result of the adoption of CECL on January 1, 2023, the provision for credit losses calculated prior to that date was determined using the previously applied incurred loss methodology rather than the current expected credit losses methodology, and as a result the amounts are not directly comparable. |
SELECTED FINANCIAL CONDITION DATA: | June 30, | March 31, | December 31, | ||
(In thousands, except for per share amounts) | |||||
Total assets | $ 1,409,187 | $ 1,362,174 | $ 1,328,620 | ||
Cash and cash equivalents | 17,464 | 17,390 | 15,922 | ||
Interest-bearing time deposits | 490 | 490 | 490 | ||
Investment securities | 287,096 | 297,498 | 291,572 | ||
Loans and leases, net of allowance for credit losses(1) | 1,043,024 | 989,117 | 961,691 | ||
Loans held for sale | 340 | — | 474 | ||
Premises and equipment, net | 13,539 | 13,493 | 13,668 | ||
Federal Home Loan Bank stock | 10,802 | 10,082 | 9,947 | ||
Other assets | 36,432 | 34,104 | 34,856 | ||
Deposits | 1,039,573 | 1,030,034 | 1,005,261 | ||
Borrowings | 226,000 | 183,500 | 180,000 | ||
Total stockholder's equity | 130,829 | 136,146 | 132,978 | ||
Book value (GAAP) | $ 130,829 | $ 136,146 | $ 132,978 | ||
Tangible book value (non-GAAP) | 130,829 | 136,146 | 132,978 | ||
Book value per share (GAAP) | 11.43 | 11.65 | 11.28 | ||
Tangible book value per share (non-GAAP) | 11.43 | 11.65 | 11.28 |
________________________________________________ | |
(1) | As a result of the adoption of CECL on January 1, 2023, the allowance amounts calculated prior to that date were determined using the previously applied incurred loss methodology rather than the current expected credit losses methodology, and as a result the balances are not directly comparable. |
The following table summarizes information relating to our loan and lease portfolio at the dates indicated:
(In thousands) | June 30, | March 31, | December 31, | ||
Commercial mortgage | $ 341,475 | $ 321,314 | $ 298,087 | ||
Commercial and industrial | 114,162 | 97,880 | 100,420 | ||
Construction and development | 117,029 | 125,521 | 139,923 | ||
Multi-family | 141,545 | 132,407 | 124,914 | ||
Residential mortgage | 159,753 | 152,376 | 146,129 | ||
Home equity | 10,492 | 10,923 | 11,010 | ||
Direct financing leases | 152,181 | 143,281 | 133,469 | ||
Consumer | 22,657 | 21,604 | 21,048 | ||
Total loans and leases | $ 1,059,294 | $ 1,005,306 | $ 975,000 |
The following table summarizes information relating to our deposits at the dates indicated:
(In thousands) | June 30, | March 31, | December 31, | ||
Noninterest-bearing demand | $ 104,691 | $ 96,827 | $ 106,415 | ||
Interest-bearing demand | 149,770 | 148,798 | 157,429 | ||
Savings and money market | 267,624 | 275,006 | 280,666 | ||
Non-brokered time deposits | 226,493 | 218,262 | 202,862 | ||
Brokered time deposits | 290,995 | 291,141 | 257,889 | ||
Total deposits | $ 1,039,573 | $ 1,030,034 | $ 1,005,261 |
Average Balances, Interest and Average Yields/Cost. The following tables set forth for the periods indicated, information regarding average balances of assets and liabilities as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities, resultant yields, interest rate spread, net interest margin (otherwise known as net yield on interest-earning assets), and the ratio of average interest-earning assets to average interest-bearing liabilities. Average balances have been calculated using daily balances. Non-accruing loans have been included in the table as loans carrying a zero yield. Loan fees are included in interest income on loans and are not material.
Three Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Average | Interest Paid | Yield/ Rate | Average | Interest Paid | Yield/ Rate | ||||||
(Dollars in thousands) | |||||||||||
Interest-earning assets: | |||||||||||
Loans and leases receivable | $ 14,098 | 5.48 % | $ 875,801 | $ 10,682 | 4.88 % | ||||||
Securities | 294,076 | 1,810 | 2.46 % | 323,078 | 1,656 | 2.05 % | |||||
FHLB stock | 10,136 | 180 | 7.10 % | 9,781 | 78 | 3.19 % | |||||
Cash and cash equivalents and other | 12,646 | 135 | 4.24 % | 15,254 | 32 | 0.84 % | |||||
Total interest-earning assets | 1,346,020 | 16,223 | 4.82 % | 1,223,914 | 12,448 | 4.07 % | |||||
Non-earning assets | 43,557 | 41,860 | |||||||||
Total assets | 1,389,577 | 1,265,774 | |||||||||
Interest-bearing liabilities: | |||||||||||
Savings and money market accounts | 288,124 | 1,356 | 1.88 % | 296,224 | 388 | 0.52 % | |||||
Interest-bearing checking accounts | 146,396 | 236 | 0.64 % | 169,618 | 111 | 0.26 % | |||||
Certificate accounts | 507,630 | 3,953 | 3.11 % | 360,498 | 776 | 0.86 % | |||||
Borrowings | 197,137 | 1,345 | 2.73 % | 170,264 | 624 | 1.47 % | |||||
Total interest-bearing liabilities | 1,139,287 | 6,890 | 2.42 % | 996,604 | 1,899 | 0.76 % | |||||
Noninterest-bearing demand deposits | 103,231 | 113,887 | |||||||||
Other liabilities | 13,315 | 8,323 | |||||||||
Stockholders' equity | 133,744 | 146,960 | |||||||||
Total liabilities and stockholders' equity | 1,389,577 | 1,265,774 | |||||||||
Net interest income | $ 9,333 | $ 10,549 | |||||||||
Net earning assets | $ 206,733 | $ 227,310 | |||||||||
Net interest rate spread(1) | 2.40 % | 3.31 % | |||||||||
Net interest margin(2) | 2.77 % | 3.45 % | |||||||||
Average interest-earning assets to average interest-bearing liabilities | 118.15 % | 122.81 % | |||||||||
________________________________________________ | |
(1) | Net interest rate spread represents the difference between the weighted average yield earned on interest-earning assets and the weighted average rate paid on interest bearing liabilities. |
(2) | Net interest margin represents net interest income divided by average total interest-earning assets. |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Average | Interest Paid | Yield/ Rate | Average | Interest Paid | Yield/ Rate | ||||||
(Dollars in thousands) | |||||||||||
Interest-earning assets: | |||||||||||
Loans and leases receivable | $ 27,291 | 5.42 % | $ 862,940 | $ 20,948 | 4.86 % | ||||||
Securities | 294,510 | 3,606 | 2.45 % | 338,289 | 3,242 | 1.92 % | |||||
FHLB stock | 10,087 | 318 | 6.31 % | 9,844 | 161 | 3.27 % | |||||
Cash and cash equivalents and other | 11,114 | 200 | 3.60 % | 16,970 | 39 | 0.46 % | |||||
Total interest-earning assets | 1,322,517 | 31,415 | 4.75 % | 1,228,043 | 24,390 | 3.97 % | |||||
Non-earning assets | 43,909 | 38,818 | |||||||||
Total assets | 1,366,426 | 1,266,861 | |||||||||
Interest-bearing liabilities: | |||||||||||
Savings and money market accounts | 283,840 | 2,353 | 1.66 % | 280,313 | 725 | 0.52 % | |||||
Interest-bearing checking accounts | 149,787 | 425 | 0.57 % | 167,630 | 208 | 0.25 % | |||||
Certificate accounts | 488,034 | 6,792 | 2.78 % | 362,011 | 1,591 | 0.88 % | |||||
Borrowings | 197,823 | 2,641 | 2.67 % | 176,845 | 1,264 | 1.43 % | |||||
Total interest-bearing liabilities | 1,119,484 | 12,211 | 2.18 % | 986,799 | 3,788 | 0.77 % | |||||
Noninterest-bearing demand deposits | 100,271 | 112,393 | |||||||||
Other liabilities | 13,660 | 7,450 | |||||||||
Stockholders' equity | 133,011 | 160,219 | |||||||||
Total liabilities and stockholders' equity | 1,366,426 | 1,266,861 | |||||||||
Net interest income | $ 19,204 | $ 20,602 | |||||||||
Net earning assets | $ 203,033 | $ 241,244 | |||||||||
Net interest rate spread(1) | 2.57 % | 3.20 % | |||||||||
Net interest margin(2) | 2.90 % | 3.36 % | |||||||||
Average interest-earning assets to average interest-bearing liabilities | 118.14 % | 124.45 % | |||||||||
________________________________________________ | |
(1) | Net interest rate spread represents the difference between the weighted average yield earned on interest-earning assets and the weighted average rate paid on interest bearing liabilities. |
(2) | Net interest margin represents net interest income divided by average total interest-earning assets. |
At and for the Three Months Ended | |||||||||
Selected Financial Ratios and Other Data: | June 30, | March 31, | December 31, | September 30, | June 30, | ||||
Performance ratios: | |||||||||
Return on average assets (annualized) | 0.77 % | 0.86 % | 1.01 % | 0.99 % | 1.10 % | ||||
Return on average equity (annualized) | 8.05 % | 8.78 % | 10.40 % | 8.94 % | 9.41 % | ||||
Yield on interest-earning assets | 4.82 % | 4.68 % | 4.52 % | 4.25 % | 4.07 % | ||||
Rate paid on interest-bearing liabilities | 2.42 % | 1.94 % | 1.42 % | 1.04 % | 0.76 % | ||||
Average interest rate spread | 2.40 % | 2.74 % | 3.10 % | 3.21 % | 3.31 % | ||||
Net interest margin (annualized)(1) | 2.77 % | 3.04 % | 3.33 % | 3.39 % | 3.45 % | ||||
Operating expense to average total assets (annualized) | 2.11 % | 2.19 % | 2.43 % | 2.41 % | 2.27 % | ||||
Efficiency ratio(2) | 69.79 % | 67.12 % | 66.66 % | 66.03 % | 61.05 % | ||||
Average interest-earning assets to average interest-bearing liabilities | 118.15 % | 118.13 % | 118.97 % | 121.68 % | 122.81 % | ||||
Asset quality ratios: | |||||||||
Non-performing assets to total assets(3) | 0.62 % | 0.66 % | 0.69 % | 0.67 % | 0.64 % | ||||
Non-performing loans and leases to total gross loans and leases(4) | 0.81 % | 0.86 % | 0.94 % | 0.92 % | 0.89 % | ||||
Allowance for credit losses to non-performing loans and leases(4)(5) | 180.44 % | 179.80 % | 135.28 % | 147.12 % | 153.32 % | ||||
Allowance for credit losses to total loans and leases(5) | 1.45 % | 1.54 % | 1.27 % | 1.35 % | 1.37 % | ||||
Net (recoveries) charge-offs (annualized) to | 0.08 % | (0.03) % | 0.06 % | 0.01 % | 0.06 % | ||||
Capital ratios: | |||||||||
Equity to total assets at end of period | 9.28 % | 9.99 % | 10.01 % | 9.77 % | 10.93 % | ||||
Average equity to average assets | 9.62 % | 9.85 % | 9.70 % | 11.04 % | 11.72 % | ||||
Common equity tier 1 capital (to risk weighted assets)(6) | 12.77 % | 13.14 % | 13.23 % | 13.59 % | 15.55 % | ||||
Tier 1 leverage (core) capital (to adjusted tangible assets)(6) | 10.81 % | 10.95 % | 11.20 % | 11.29 % | 12.74 % | ||||
Tier 1 risk-based capital (to risk weighted assets)(6) | 12.77 % | 13.14 % | 13.23 % | 13.59 % | 15.55 % | ||||
Total risk-based capital (to risk weighted assets)(6) | 14.02 % | 14.39 % | 14.31 % | 14.74 % | 16.72 % | ||||
Other data: | |||||||||
Number of full-service offices | 12 | 12 | 12 | 12 | 12 | ||||
Full-time equivalent employees | 183 | 181 | 181 | 184 | 177 | ||||
(1) | Net interest income divided by average interest-earning assets. |
(2) | Total noninterest expenses as a percentage of net interest income and total noninterest income. |
(3) | Non-performing assets consist of nonaccrual loans and leases, accruing loans and leases more than 90 days past due and foreclosed assets. |
(4) | Non-performing loans and leases consist of nonaccrual loans and leases and accruing loans and leases more than 90 days past due. |
(5) | As a result of the adoption of CECL on January 1, 2023, the allowance for credit losses calculated prior to that date was determined using the previously applied incurred loss methodology rather than the current expected credit losses methodology, and as a result the balances are not directly comparable. |
(6) | Capital ratios are for First Bank Richmond. |
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SOURCE Richmond Mutual Bancorporation, Inc.
