Richmond Mutual Bancorporation(RMBI) - 2020 Q3 - Quarterly Report

Financial Position - As of September 30, 2020, the Company had total assets of $1.1 billion, net loans and leases of $750.6 million, total deposits of $663.1 million, and stockholders' equity of $191.7 million[116]. - Total assets increased by $68.8 million, or 7.0%, to $1.1 billion at September 30, 2020, from $986.0 million at December 31, 2019[139]. - Loans and leases increased by $63.4 million, or 9.2%, to $750.6 million at September 30, 2020, from $687.3 million at December 31, 2019[140]. - Total deposits increased by $45.8 million, or 7.4%, to $663.1 million as of September 30, 2020, compared to $617.2 million at December 31, 2019[146]. - Stockholders' equity totaled $191.7 million at September 30, 2020, an increase of $3.9 million, or 2.1%, from December 31, 2019[148]. Income and Earnings - For the nine months ended September 30, 2020, the Company reported net income of $7.5 million, a significant improvement compared to a net loss of $1.5 million for the same period in 2019[116]. - Net income for the three months ended September 30, 2020, was $2.5 million, a $5.8 million increase from a net loss of $3.3 million for the same period in 2019[149]. - Net income for the nine months ended September 30, 2020 totaled $7.5 million, a $9.0 million increase from a net loss of $1.5 million for the comparable period in 2019[162]. - Non-interest income increased by $2.2 million, or 75.9%, to $5.2 million for the first nine months of 2020 compared to $3.0 million for the same period in 2019[172]. Loan and Lease Performance - The allowance for loan and lease losses increased by $2.7 million, or 38.4%, to $9.8 million at September 30, 2020, from $7.1 million at December 31, 2019[144]. - Nonperforming loans and leases totaled $3.4 million, or 0.45% of total loans and leases at September 30, 2020, compared to $3.8 million, or 0.55% at December 31, 2019[141]. - The allowance for loan and lease losses to non-performing loans and leases was 290.9% at September 30, 2020, compared to 186.0% at December 31, 2019[144]. - The Company funded 482 PPP loans totaling $64.9 million, with an interest rate of 1.0% and a five-year loan term[132]. - As of September 30, 2020, 70 loans and leases aggregating $35.3 million, or 4.7% of total loans and leases, were modified due to COVID-19[134]. Capital and Liquidity - First Bank Richmond's total risk-based capital ratio was 20.1% as of September 30, 2020, exceeding the 10.0% requirement for a well-capitalized institution[116]. - The Company had outstanding loan and lease commitments totaling $154.0 million, including $69.9 million of undisbursed construction and land loans as of September 30, 2020[182]. - The Company had the ability to borrow an additional $56.3 million in FHLB advances based on existing collateral pledged as of September 30, 2020[181]. - At September 30, 2020, the Company had $141.7 million in cash and unpledged available-for-sale investment securities for its cash needs[181]. - Management believes that primary liquidity sources are sufficient in the economic environment created by the COVID-19 pandemic[186]. Interest Income and Expense - Interest income on loans and leases increased by $238,000, or 2.6%, to $9.6 million for the quarter ended September 30, 2020, compared to $9.3 million for the same quarter in 2019[150]. - Interest income increased by $570,000, or 1.8%, to $31.5 million during the nine months ended September 30, 2020, compared to $31.0 million for the same period in 2019[163]. - Interest expense decreased by $1.1 million, or 13.1%, to $7.3 million for the nine months ended September 30, 2020, compared to $8.5 million for the same period in 2019[165]. - The net interest margin (annualized) was 3.18% for the three months ended September 30, 2020, compared to 3.31% for the same period in 2019[153]. Operational Risks and Challenges - The Company expects its net interest income and net interest margin to be adversely affected in 2020 due to the COVID-19 pandemic and a recent 150 basis point reduction in the targeted federal funds rate[115]. - The Company is subject to various risks including changes in economic conditions, competition, and regulatory changes that could impact its operations and financial results[105]. - The Company maintains an allowance for loan and lease losses to cover probable incurred credit losses, which is inherently subjective and requires significant estimates[118].