Richmond Mutual Bancorp reported weaker earnings this fall. Net income slipped to $1.7 million. Diluted earnings per share reached $0.11.
Profit fell from $0.22 in the second quarter. It also fell from $0.36 in 2025. The company filed the results with investors.
The release is dated October 30, 2026. The SEC EDGAR database holds company filings. Its earnings release explains the lower profit.
Credit losses drove the change. A provision for credit losses hit $6.1 million. A provision is money set aside for bad loans.
That reserve was $823,000 in the second quarter. The 2025 reserve was $269,000. The bank wrote off $6.1 million in loans.
A $4.5 million commercial real estate loan took the biggest hit. That loan moved to other real estate owned. Another charge-off involved $803,000.
The bank also saw rising nonperforming loans. The quarter included $3.0 million in merger costs. These costs came from the Farmers Bancorp deal.
The merger closed on July 1, 2026. A bargain purchase gain offset part of the charge. The gain was $1.6 million.
Chairman Garry Kleer said the merger changed the quarter. He pointed to a much larger balance sheet. Net interest income grew after the deal.
He also cited higher expenses and credit costs. Kleer said, “Our third quarter results reflected the impact of our merger.” He stressed community service during integration.
Net interest income jumped to $22.8 million. It rose 89.2% from the second quarter. It rose 102.3% from the 2025 quarter.
Net interest margin reached 3.68%. That is the profit earned on core lending funds. Last quarter, margin was 3.22%.
The 2025 margin was 3.07%. A wider margin helps bank earnings. Total assets reached $2.60 billion.
Assets were $1.55 billion in the second quarter. Loans and leases reached $2.00 billion net. They were $1.21 billion before the merger.
Deposits rose to $2.09 billion. The second quarter figure was $1.15 billion. The merger added deposit customers and loan books.
- Deposits without interest reached $351.4 million.
- That group was 16.9% of all deposits.
- Last quarter, that group was 8.7%.
- Free funding can lower the bank’s cost of money.
- Nonperforming loans reached $32.2 million.
- That was 1.59% of loans and leases.
In the second quarter, they were 1.78%. They were higher than at year-end. The allowance for credit losses grew.
It reached $25.4 million. The allowance covered 1.25% of loans. That is below 1.39% last quarter.
The allowance covers expected loan losses. Shareholder equity rose to $228.9 million. Equity was $148.3 million in the second quarter.
Book value per share was $13.66. It fell from $14.11 at the prior quarter end. The bank’s Tier 1 leverage ratio was 9.99%.
That measures capital against risk-weighted assets. The bank now reports under the Community Bank Leverage Ratio. A ratio above 8.0% meets a key rule.
Richmond Mutual completed its Farmers Bancorp purchase. First Bank Midwest now runs the combined bank. The holding company stays in Richmond, Indiana.
The bank headquarters sits in Frankfort, Indiana. The company trades on Nasdaq under RMBI. Nine-month net income was $6.8 million.
Earnings per share reached $0.56. That compares to $0.82 for 2025. Noninterest income rose to $4.6 million.
The second quarter figure was $1.6 million. The 2025 figure was $1.3 million. Noninterest expense rose to $20.0 million.
The second quarter expense was $10.2 million. The 2025 quarter expense was $8.1 million. Higher expenses came after a big merger.
Investors should watch loan growth next. Fast loan growth can mean more income. Fast loan growth can also bring losses.
A commercial real estate loss shows that risk. The partial charge-off was $4.5 million. The bank moved it from loan book to property.
Watch the allowance for credit losses. A rising allowance may signal more bad loans. A falling allowance ratio may signal weaker reserve.
The dollar reserve grew, but the ratio fell. That pattern can reflect larger, riskier loans. Watch net interest margin each quarter.
A wider margin can support profitability. A narrower margin may pressure earnings. The current margin is solid for a community bank.
Community banks serve local households and small firms. Watch deposit mix and deposit costs. More no-interest deposits can help margins.
They can also change with market rates. Federal Reserve credit data gives useful context. The Fed has studied loan quality in smaller banks.
The FDIC publishes quarterly banking profile reports. Those reports track delinquencies and charge-offs. Bloomberg and Financial Times cover bank earnings too.
Analysts use them to test credit trends. Commercial real estate remains a key risk. Banks must decide whether loans should get modified.
Modifications can delay losses. They can also create long-term uncertainty. A quick charge-off can reduce that uncertainty.
It also hurts earnings in that quarter. Merger integration costs are another issue. They include legal work and systems change.
They include staff training and rebranding. Investors should separate one-time costs. They should track ongoing expense levels.
The $3.0 million merger expense was temporary. The $1.6 million gain was also unusual. A bargain purchase gain can appear in accounting.
It happens when assets exceed assumed liabilities. It can make a hard quarter look better. It does not prove operating strength.
Analysts often exclude these items in models. If you own RMBI, look beyond per share profit. Per share profit fell because losses and costs rose.
Core interest income rose after the merger. That shows the deal brought scale. Scale did not erase loan risk.
Loan underwriting checks borrower repayment risk. It serves towns across Indiana and Ohio. Community relationships matter during loan work.
Loan officers who know borrowers can help. They can spot stress before charge-offs. They can also build new deposit ties.
The market will test management next. Kleer must integrate two bank cultures. He must keep expenses under control.
He must rebuild loan loss reserves. He must defend net interest margin. He must keep deposits stable.
A larger bank can earn more income. It can also lose money faster. The credit problem came late in the quarter.
A $4.5 million loan went nonaccruing. Nonaccruing means the bank stopped counting interest income. The bank charged it off in part.
The bank moved it to real estate owned. That is a visible cleanup step. It may also signal more CRE risk.
CRE means commercial real estate. Investors should expect quarterly review of such loans. The bank remains well capitalized on a leverage basis.
Its 9.99% ratio clears the 8.0% bar. The CBLR framework reduces reporting steps. It does not guarantee loan performance.
Capital is one line. Credit quality is another. Nine-month results still show positive profit.
That is better than a loss quarter. But momentum weakened after the merger. The merger lifted assets and loans.
It also lifted operating complexity. Complexity can increase oversight costs. It can also slow decision making.
The release shows net income fell. The balance sheet grew. Profitability fell because credit costs rose.
Merger accounting added one-time effects. These effects make trends harder to read. For now, the story is a mixed merger year.
Scale gave more net interest income. Risk charges and expenses took it back. Investors need clean quarters ahead.
The bank needs fewer nonperforming loans. Management needs stable margins without one-time items. Analysts need proof loan checks are stronger.
