Richmond Mutual Bancorporation Reports 16.9% Decrease in Net Income for Q1 2025

Richmond Mutual Bancorporation, Inc. reported its financial results for the first quarter of 2025, revealing a net income of $1.97 million, a decrease of 16.9% from $2.37 million in the same period of 2024. The diluted earnings per share for the quarter were $0.20, down from $0.23 a year earlier. The decline in profitability was attributed to a $548,000 increase in the provision for credit losses and a $315,000 rise in noninterest expenses, which were partially offset by a $425,000 increase in net interest income.

Total assets for the company increased by $17.9 million, or 1.2%, to $1.52 billion as of March 31, 2025, compared to $1.50 billion at the end of 2024. This growth was primarily driven by a $17 million increase in loans and leases, net of allowance for credit losses, which rose to $1.18 billion. The increase in loans was largely due to growth in multi-family, commercial real estate, and commercial and industrial loans, although this was partially offset by a decrease in construction and development loans. The allowance for credit losses also saw a rise, increasing to $16.08 million from $15.79 million, reflecting the changing composition of the loan portfolio and updated economic forecasts.

Richmond Mutual Bancorporation's total deposits increased by $11.7 million, or 1.1%, to $1.11 billion, with notable growth in brokered time deposits and interest-bearing demand deposits. However, noninterest-bearing deposits decreased by $6.8 million. The company’s borrowings from the Federal Home Loan Bank rose to $274 million, up from $265 million, to support loan growth. Stockholders' equity decreased by $1.9 million to $130.9 million, influenced by dividend payments and stock repurchases totaling $4.2 million.

In terms of operational metrics, the company reported an increase in interest income, which rose to $20.87 million, a 7% increase from the previous year, driven by higher average loan balances and yields. Interest expense also increased, reflecting competitive pressures on deposit rates, leading to a net interest income of $10.26 million for the quarter. The net interest margin improved to 2.79%, up from 2.74% in the prior year, indicating a favorable shift in asset yields relative to funding costs.

Looking ahead, Richmond Mutual Bancorporation remains focused on its growth markets in Columbus, Cincinnati/Dayton/Springfield, and Indianapolis, with expectations of continued economic challenges due to inflation and geopolitical uncertainties. The company is committed to managing its credit risk and maintaining adequate capital levels, with a total risk-based capital ratio of 14.04%, well above the regulatory requirements. The outlook suggests a cautious approach to provisioning for credit losses, reflecting the potential impact of economic conditions on the loan portfolio.