Richmond Mutual Bancorporation(RMBI) - 2021 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements The company's total assets increased to $1.14 billion, driven by loan and investment growth, with net income slightly rising to $2.6 million amidst ongoing COVID-19 impacts and PPP participation Condensed Consolidated Balance Sheets Total assets grew to $1.14 billion, primarily from increased net loans and investment securities, while deposits significantly rose and stockholders' equity slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Assets | $1,140,906 | $1,084,193 | | Cash and cash equivalents | $65,523 | $48,768 | | Investment securities - available for sale | $258,159 | $244,505 | | Loans and leases, net | $763,731 | $736,400 | | Total Liabilities | $951,386 | $891,480 | | Total deposits | $757,074 | $693,045 | | Federal Home Loan Bank advances | $170,000 | $170,000 | | Total Stockholders' Equity | $189,520 | $192,713 | Condensed Consolidated Statements of Income Net income for Q1 2021 increased to $2.6 million, driven by higher net interest income and non-interest income, partially offset by increased non-interest expenses Condensed Consolidated Statements of Income Highlights (in thousands) | Account | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net Interest Income | $8,763 | $7,887 | | Provision for losses on loans and leases | $400 | $210 | | Non-Interest Income | $1,767 | $953 | | Non-Interest Expenses | $6,978 | $5,524 | | Net Income | $2,562 | $2,452 | | Diluted Earnings Per Share | $0.22 | $0.20 | Condensed Consolidated Statements of Comprehensive Income (Loss) The company reported a comprehensive loss of $1.1 million for Q1 2021, primarily due to a net unrealized loss on available-for-sale securities Comprehensive Income (Loss) Summary (in thousands) | Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net Income | $2,562 | $2,452 | | Other Comprehensive Income (Loss) | $(3,660) | $2,770 | | Comprehensive (Loss) Income | $(1,098) | $5,222 | Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity decreased to $189.5 million, primarily due to other comprehensive loss, stock repurchases, and dividends, partially offset by net income - Key drivers for the change in stockholders' equity in Q1 2021 included net income of $2.6 million, other comprehensive loss of $3.7 million, common stock dividends of $0.8 million, and common stock repurchases of $1.9 million[18] Condensed Consolidated Statements of Cash Flows Cash and cash equivalents increased by $16.8 million in Q1 2021, with financing activities offsetting outflows from operations and investing Net Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2021 | | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,436) | | Net cash used in investing activities | $(42,095) | | Net cash provided by financing activities | $61,286 | | Net Change in Cash and Cash Equivalents | $16,755 | Notes to Condensed Consolidated Financial Statements The notes detail accounting policies, COVID-19 relief impacts including PPP loans and loan modifications, and key financial components like the allowance for loan losses and pension liabilities - Under the CARES Act, the company modified 33 loans totaling $24.6 million as of March 31, 2021, which were not categorized as Troubled Debt Restructurings (TDRs)[31] - The company has originated a total of approximately $100.0 million in Paycheck Protection Program (PPP) loans as of March 31, 2021, with $54.7 million outstanding[32] - The company has frozen its defined benefit pension plan and has accrued $17.5 million for the expected termination expense as of March 31, 2021[106] - Subsequent to the quarter end, through May 14, 2021, the company repurchased an additional 167,193 shares under its stock repurchase program[118] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the 5.2% asset growth driven by loans and deposits, the increase in net income to $2.6 million due to higher net interest income, and ongoing COVID-19 response efforts COVID 19 Response The company actively participated in the PPP, funding $35.2 million in new loans, and continued loan modification programs, with branch operations largely returning to normal - As of March 31, 2021, the company has funded 329 PPP loans totaling $35.2 million under the second PPP program and has a total of 408 PPP loans outstanding totaling $54.7 million[150] Loan Deferments due to COVID-19 (in thousands) | Category | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Number of Loans | 33 | 48 | | Total Balance | $24,582 | $54,665 | | Commercial mortgage | $23,372 | $44,352 | | Hospitality (included above) | $16,350 | $37,431 | Comparison of Financial Condition (at March 31, 2021 and December 31, 2020) Total assets increased by $56.7 million to $1.1 billion, driven by loan and cash growth, while deposits rose significantly and stockholders' equity slightly decreased - Total assets increased by $56.7 million (5.2%) to $1.1 billion at March 31, 2021[154] - Net loans and leases increased by $27.3 million, driven by growth in commercial and industrial loans (including PPP loans), commercial mortgage loans, and construction loans[155] - Nonperforming loans and leases increased to $8.1 million (1.05% of total loans) from $4.8 million (0.64%), primarily due to a single $4.9 million non-accruing commercial real estate loan[156] - Total deposits increased by $64.0 million (9.2%) to $757.1 million, attributed to changes in customer savings habits and government stimulus[161] Comparison of Results of Operations (for the Three Months Ended March 31, 2021 and 2020) Net income for Q1 2021 increased to $2.6 million, driven by an 11.1% rise in net interest income and an 85.4% increase in non-interest income, despite higher non-interest expenses - Net interest income increased 11.1% to $8.8 million in Q1 2021, compared to $7.9 million in Q1 2020[169] - Net interest margin increased to 3.44% for Q1 2021 from 3.32% in Q1 2020. PPP loan activity contributed 17 basis points to the margin in Q1 2021[169] - Non-interest income increased by 85.4% to $1.8 million, primarily due to a $737,000 increase in gain on sale of loans[174] - Non-interest expense increased 26.3% to $7.0 million, largely due to a $1.1 million increase in salaries and employee benefits, which included $508,000 of expenses for equity awards granted in Q4 2020[175] Liquidity and Capital Resources The company maintains strong liquidity with $249.8 million in cash and securities, and is well-capitalized with a total risk-based capital ratio of 20.8%, exceeding regulatory requirements - At March 31, 2021, the Bank had $249.8 million in cash and unpledged available-for-sale investment securities for its cash needs and could borrow an additional $34.2 million in FHLB advances[181] First Bank Richmond Capital Ratios (as of March 31, 2021) | Ratio | Actual | Required to be Well-Capitalized | | :--- | :--- | :--- | | Total risk-based capital | 20.8% | 10.0% | | Tier 1 risk-based capital | 19.5% | 8.0% | | Common equity tier 1 capital | 19.5% | 6.5% | | Tier 1 leverage (core) capital | 14.2% | 5.0% | Item 3. Quantitative and Qualitative Disclosures about Market Risk There have been no material changes in the market risk disclosures from the company's 2020 Annual Report on Form 10-K - There has not been any material change in the market risk disclosures contained in the company's 2020 Form 10-K[194] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[195] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[195] PART II OTHER INFORMATION Item 1. Legal Proceedings The company is not involved in any material legal proceedings beyond routine matters in the ordinary course of business - The company is not involved in any material legal proceedings outside of the ordinary course of business[199] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's 2020 Annual Report on Form 10-K - There have been no material changes in the Risk Factors previously disclosed in the Company's 2020 Form 10-K[200] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 142,764 shares of common stock in Q1 2021 at an average price of $13.58, with 416,585 shares remaining available under the program Share Repurchases for Q1 2021 | Period | Total Shares Purchased | Average Price Paid Per Share (in dollars) | | :--- | :--- | :--- | | January 2021 | 44,491 | $13.63 | | February 2021 | 42,705 | $13.08 | | March 2021 | 55,568 | $13.92 | | Total Q1 2021 | 142,764 | $13.58 | - The stock repurchase program, authorized on October 21, 2020, allows for the repurchase of up to 664,969 shares and will expire on November 16, 2021[205] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities during the period - Nothing to report[203] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[204] Item 5. Other Information The company reports no other information to disclose for the period - Nothing to report[205] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and interactive data files - Exhibits filed include CEO and CFO certifications (Rule 13a-14(a) and Section 1350) and XBRL data files[208]