Richmond Mutual Bancorp Inc (RMBI) Announces Q3 2023 Financial Results Amidst Rising Interest Rates

• In Q3 2023, Richmond Mutual Bancorp Inc (NASDAQ:RMBI) experienced a decrease in net income, which was $1.9 million, compared to $2.7 million in Q2 2023 and $3.2 million in Q3 2022.

• The company’s assets remained stable at $1.4 billion, with loans and leases net of allowance for credit losses totaling $1.1 billion.

• Nonperforming loans and leases accounted for $8.0 million, or 0.74% of total loans and leases, representing a decrease from 0.81% in Q2 2023 and 0.94% at the end of 2022.

• Net interest income decreased by $206,000, or 2.2%, to $9.1 million for Q3 2023, compared to $9.3 million for Q2 2023, and $10.5 million for Q3 2022.

Richmond Mutual Bancorp Inc (NASDAQ:RMBI) released its Q3 2023 earnings report on October 20, 2023. The company reported a net income of $1.9 million, or $0.19 diluted earnings per share, a decrease from $2.7 million, or $0.26 diluted earnings per share, in Q2 2023, and $3.2 million, or $0.29 diluted earnings per share, in Q3 2022.

Performance Amidst Rising Interest Rates

Despite the challenges posed by the current interest rate environment, Richmond Mutual Bancorp Inc (NASDAQ:RMBI) showed resilience in growing loans and deposits and maintaining profitability. The Federal Reserve’s Open Market Committee raised its targeted federal funds rate by an additional 25 basis points in July 2023, reaching a 17-year high of 5.25-5.50 percent. This is in contrast to the period as recent as the first quarter of 2022 when the Fed kept the federal funds rate close to zero.

Financial Highlights

Assets remained stable at $1.4 billion both at the end of Q3 2023 and Q2 2023, and totaled $1.3 billion at the end of 2022. Loans and leases, net of allowance for credit losses, amounted to $1.1 billion at the end of Q3 2023, compared to $1.0 billion at the end of Q2 2023, and $961.7 million at the end of 2022. The total nonperforming loans and leases at the end of Q3 2023 were $8.0 million, representing 0.74% of total loans and leases, as opposed to $8.5 million, representing 0.81% of total loans and leases, at the end of Q2 2023, and $9.2 million, or 0.94% at the end of 2022.

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Income Statement Summary

In Q3 2023, net interest income before the provision for credit losses decreased by $206,000, or 2.2%, to $9.1 million compared to $9.3 million in Q2 2023, and decreased by $1.4 million, or 13.2%, from $10.5 million in Q3 2022. The decrease in Q2 2023 was due to an 18 basis point decrease in the average interest rate spread, partially offset by a $27.9 million increase in average interest-earning assets. The decrease from Q3 2022 was due to a 99 basis point decrease in the average interest rate spread, partially offset by a $134.5 million increase in average interest-earning assets.

Balance Sheet Summary

Total assets increased by $94.3 million, or 7.1%, to $1.4 billion at the end of Q3 2023 compared to the end of 2022. This increase was primarily driven by a $105.2 million, or 10.9%, increase in loans and leases, net of allowance for credit losses, to $1.1 billion at the end of Q3 2023, partially offset by a decrease of $22.2 million, or 7.6%, in investment securities to $269.4 million at the end of Q3 2023.

Despite the decline in net income, Richmond Mutual Bancorp Inc (NASDAQ:RMBI) continues to maintain a stable financial position amid a challenging interest rate environment.

This article first appeared on GuruFocus.