UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ________

Commission file number: 001-38956

RICHMOND MUTUAL BANCORPORATION, INC.

(Exact name of registrant as specified in its charter)

Maryland	36-4926041
(State or other jurisdiction of incorporation of organization)	(I.R.S. Employer Identification No.)

31 North 9th Street, Richmond, Indiana 47374

(Address of principal executive offices; Zip Code)

(765) 962-2581

(Registrant's telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	RMBI	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
Emerging growth company	[X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No [X]

There were 11,065,459 shares of Registrant’s common stock, par value of $0.01 per share, issued and outstanding as of May 14, 2024.

RICHMOND MUTUAL BANCORPORATION, INC. AND SUBSIDIARY

10-Q

TABLE OF CONTENTS

PART I     FINANCIAL INFORMATION
		Page
Item 1.	Condensed Consolidated Balance Sheets at March 31, 2024 (Unaudited) and December 31, 2023	1
	Condensed Consolidated Statements of Income (Unaudited) for the Three Months Ended March 31, 2024 and 2023	2
	Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) for the Three Months Ended March 31, 2024 and 2023	3
	Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) for the Three Months Ended March 31, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2024 and 2023	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4.	Controls and Procedures	36
PART II     OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5	Other Information	38
Item 6.	Exhibits	39
Signatures		40

PART I. FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

Richmond Mutual Bancorporation, Inc.

Condensed Consolidated Balance Sheets

	March 31, 2024		December 31, 2023
	(Unaudited)
Assets
Cash and due from banks	$	8,441,313	$	8,578,489
Interest-earning demand deposits	11,848,901		11,661,636
Cash and cash equivalents	20,290,214		20,240,125
Investment securities - available for sale	276,347,393		282,688,326
Investment securities - held to maturity	4,658,475		4,949,530
Loans held for sale	85,000		793,500
Loans and leases, net of allowance for credit losses of $15,825,126 and $15,663,153, respectively	1,123,194,329		1,090,073,198
Premises and equipment, net	13,212,493		13,311,892
Federal Home Loan Bank stock	13,907,100		12,647,100
Interest receivable	5,988,336		5,843,705
Mortgage-servicing rights	1,945,994		1,945,367
Cash surrender value of life insurance	3,787,292		3,764,929
Other assets	24,254,717		24,766,129
Total assets	$	1,487,671,343	$	1,461,023,801
Liabilities
Noninterest-bearing deposits	$	108,805,348	$	114,376,777
Interest-bearing deposits	960,837,124		926,763,134
Total deposits	1,069,642,472		1,041,139,911
Federal Home Loan Bank advances	273,000,000		271,000,000
Advances by borrowers for taxes and insurance	701,791		588,371
Interest payable	3,864,170		4,396,952
Other liabilities	8,072,193		9,038,991
Total liabilities	1,355,280,626		1,326,164,225
Commitments and Contingent Liabilities	—		—
Stockholders' Equity
Common stock, $0.01 par value
Authorized - 90,000,000 shares
Issued and outstanding - 11,115,887 shares and 11,208,500 shares at March 31, 2024 and December 31, 2023, respectively	111,159		112,085
Additional paid-in capital	100,613,827		101,347,566
Retained earnings	88,834,364		87,902,747
Unearned employee stock ownership plan (ESOP)	(11,273,897)		(11,457,726)
Accumulated other comprehensive loss	(45,894,736)		(43,045,096)
Total stockholders' equity	132,390,717		134,859,576
Total liabilities and stockholders' equity	$	1,487,671,343	$	1,461,023,801

See Notes to Condensed Consolidated Statements.

1

Richmond Mutual Bancorporation, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

	Three Months Ended March 31,
	2024		2023
Interest Income
Loans and leases	$	17,250,722	$	13,193,173
Investment securities	2,120,223		1,934,072
Other	139,248		65,553
Total interest income	19,510,193		15,192,798
Interest Expense
Deposits	7,065,764		4,026,675
Borrowings	2,611,648		1,295,313
Total interest expense	9,677,412		5,321,988
Net Interest Income	9,832,781		9,870,810
Provision for credit losses	183,134		170,106
Net Interest Income After Provision for Credit Losses	9,649,647		9,700,704
Non-interest Income
Service charges on deposit accounts	272,931		280,995
Card fee income	290,186		287,258
Loan and lease servicing fees, including mortgage servicing right impairment	127,242		120,072
Net gains on loan and lease sales	119,317		155,563
Other income	319,259		252,836
Total non-interest income	1,128,935		1,096,724
Non-interest Expenses
Salaries and employee benefits	4,573,707		4,242,028
Net occupancy expenses	344,354		350,822
Equipment expenses	236,216		331,323
Data processing fees	906,791		836,513
Deposit insurance expense	403,000		168,000
Printing and office supplies	34,676		36,271
Legal and professional fees	432,553		310,976
Advertising expense	88,723		88,191
Bank service charges	60,706		48,619
Real estate owned expense	1,326		—
Other expenses	975,454		948,445
Total non-interest expenses	8,057,506		7,361,188
Income Before Income Tax Expense	2,721,076		3,436,240
Provision for income taxes	352,160		532,194
Net Income	$	2,368,916	$	2,904,046
Earnings Per Share
Basic	$	0.23	$	0.27
Diluted	$	0.23	$	0.27

See Notes to Condensed Consolidated Statements.

2

Richmond Mutual Bancorporation, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

	Three Months Ended March 31,
	2024		2023
Net Income	$	2,368,916	$	2,904,046
Other Comprehensive (Loss) Income
Unrealized (loss) gain on available for sale securities, net of tax benefit (expense) of $757,499, and $(1,640,117), respectively	(2,849,640)		6,169,964
Comprehensive (Loss) Income	$	(480,724)	$	9,074,010

See Notes to Condensed Consolidated Statements.

3

Richmond Mutual Bancorporation, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

	Three Months Ended March 31, 2024
	Common Stock			Additional Paid-in Capital		Retained Earnings		Unearned ESOP Shares		Accumulated Other Comprehensive Loss		Total
	Shares Outstanding	Amount
Balances, December 31, 2023	11,208,500	$	112,085	$	101,347,566	$	87,902,747	$	(11,457,726)	$	(43,045,096)	$	134,859,576
Net income	—	—		—		2,368,916		—		—		2,368,916
Other comprehensive loss	—	—		—		—		—		(2,849,640)		(2,849,640)
ESOP shares earned	—	—		(29,661)		—		183,829		—		154,168
Stock based compensation	—	—		367,484		—		—		—		367,484
Common stock dividends ($0.14 per share)	—	—		—		(1,437,299)		—		—		(1,437,299)
Repurchase of common stock	(92,613)	(926)		(1,071,562)		—		—		—		(1,072,488)
Balances, March 31, 2024	11,115,887	$	111,159	$	100,613,827	$	88,834,364	$	(11,273,897)	$	(45,894,736)	$	132,390,717

	Three Months Ended March 31, 2023
	Common Stock			Additional Paid-in Capital		Retained Earnings		Unearned ESOP Shares		Accumulated Other Comprehensive Loss		Total
	Shares Outstanding	Amount
Balances, December 31, 2022	11,784,246	$	117,842	$	106,088,897	$	88,122,052	$	(12,193,043)	$	(49,751,175)	$	132,384,573
Impact of ASU 2016-13 adoption	—	—		—		(3,785,168)		—		—		(3,785,168)
Balances, January 1, 2023	11,784,246	117,842		106,088,897		84,336,884		(12,193,043)		(49,751,175)		128,599,405
Net income	—	—		—		2,904,046		—		—		2,904,046
Other comprehensive income	—	—		—		—		—		6,169,964		6,169,964
ESOP shares earned	—	—		(13,318)		—		183,829		—		170,511
Stock based compensation	—	—		379,408		—		—		—		379,408
Common stock dividends ($0.14 per share)	—	—		—		(1,519,855)		—		—		(1,519,855)
Repurchase of common stock	(98,553)	(985)		(1,149,948)		—		—		—		(1,150,933)
Balances, March 31, 2023	11,685,693	$	116,857	$	105,305,039	$	85,721,075	$	(12,009,214)	$	(43,581,211)	$	135,552,546

See Notes to Condensed Consolidated Statements.

4

Richmond Mutual Bancorporation, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
	2024		2023
Operating Activities
Net income	$	2,368,916	$	2,904,046
Items not requiring (providing) cash
Provision for credit losses	183,134		170,106
Depreciation and amortization	214,846		261,665
Deferred income tax	36,457		(88,482)
Stock based compensation	367,484		379,408
Investment securities amortization, net	265,798		296,954
Net gains on loan and lease sales	(119,317)		(155,563)
Gain on sale of real estate owned	(1,558)		(1,921)
Gain on sale of premises and equipment	—		(1,800)
Accretion of loan origination fees	(160,947)		(283,473)
Amortization of mortgage-servicing rights	43,135		39,558
ESOP shares expense	154,168		170,511
Increase in cash surrender value of life insurance	(22,363)		(21,994)
Loans originated for sale	(6,697,600)		(6,067,122)
Proceeds on loans sold	5,989,100		5,593,422
Net change in
Interest receivable	(144,631)		27,242
Other assets	1,185,192		757,505
Other liabilities	(966,798)		(1,569,371)
Interest payable	(532,782)		1,177,300
Net cash provided by operating activities	2,162,234		3,587,991
Investing Activities
Purchases of securities available for sale	(1,935,953)		(7,097,933)
Proceeds from maturities and paydowns of securities available for sale	4,404,697		7,766,832
Proceeds from maturities and paydowns of securities held to maturity	290,306		918,473
Net change in loans	(31,650,763)		(29,281,218)
Proceeds from sales of real estate owned	48,821		59,386
Purchases of premises and equipment	(115,447)		(86,375)
Proceeds from sale of premises and equipment	—		1,800
Purchase of FHLB stock	(1,260,000)		(134,900)
Net cash used in investing activities	(30,218,339)		(27,853,935)
Financing Activities
Net change in
Demand and savings deposits	(5,097,505)		(23,878,107)
Certificates of deposit	33,600,066		48,651,800
Advances by borrowers for taxes and insurance	113,420		130,648
Proceeds from FHLB advances	58,000,000		179,500,000
Repayment of FHLB advances	(56,000,000)		(176,000,000)
Repurchase of common stock	(1,072,488)		(1,150,933)
Dividends paid	(1,437,299)		(1,519,855)
Net cash provided by financing activities	28,106,194		25,733,553
Net Change in Cash and Cash Equivalents	50,089		1,467,609
Cash and Cash Equivalents, Beginning of Period	20,240,125		15,922,093
Cash and Cash Equivalents, End of Period	$	20,290,214	$	17,389,702
Additional Cash Flows and Supplementary Information
Interest paid	$	10,210,194	$	4,144,688
Transfers from loans to other real estate owned	—		366,508

See Notes to Condensed Consolidated Statements.

5

Richmond Mutual Bancorporation, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Table Dollar Amounts in Thousands, Except Per Share Amounts)

Note 1: Basis of Presentation

The accompanying financial information is unaudited and has been prepared from the consolidated financial statements of Richmond Mutual Bancorporation, Inc., and its wholly owned direct and indirect subsidiaries, First Bank Richmond, First Insurance Management, Inc., FB Richmond Holdings, Inc. and FB Richmond Properties, Inc. References in this document to Richmond Mutual Bancorporation refer to Richmond Mutual Bancorporation, Inc. References to “we,” “us,” and “our” or the “Company” refers to Richmond Mutual Bancorporation and its wholly-owned direct and indirect subsidiaries, First Bank Richmond, First Insurance Management, Inc., FB Richmond Holdings, Inc., and FB Richmond Properties, Inc. unless the context otherwise requires.

First Bank Richmond is an Indiana state-chartered commercial bank headquartered in Richmond, Indiana and the wholly owned banking subsidiary of Richmond Mutual Bancorporation. First Bank Richmond provides full banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana, its five full-service offices located in Piqua (2), Sidney (2) and Troy (1), Ohio, and its loan production office in Columbus, Ohio. Administrative, trust and wealth management services are conducted through First Bank Richmond's Corporate Office/Financial Center located in Richmond, Indiana. As an Indiana-chartered commercial bank, First Bank Richmond is subject to regulation by the Indiana Department of Financial Institutions ("IDFI") and the Federal Deposit Insurance Corporation ("FDIC").

First Insurance Management, Inc., a wholly-owned subsidiary of the Company which was formed and began operations in June 2022, is a Nevada-based captive insurance company that insures against certain risks unique to the operations of the Company and its subsidiaries and for which insurance may not be currently available or economically feasible in today's insurance marketplace. First Insurance Management, Inc. is subject to the regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance.

FB Richmond Holdings, Inc., a wholly-owned subsidiary of First Bank Richmond which was formed and began operations in April 2020, is a Nevada corporation that holds and manages substantially all of First Bank Richmond's investment portfolio. FB Richmond Holdings, Inc. has one active subsidiary, FB Richmond Properties, Inc., a Delaware corporation which holds loans on behalf of the Bank.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or note disclosures necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Form 10-K") filed with the Securities and Exchange Commission (“SEC”) on March 29, 2024 (SEC File No. 001-38956). However, in the opinion of management, all adjustments which are necessary for a fair presentation of the consolidated financial statements have been included. Those adjustments consist only of normal recurring adjustments. The results of operations for the period are not necessarily indicative of the results to be expected for the full year.

Use of Estimates in Preparation of Financial Statements

Financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.

Loans

For all loan classes, the accrual of interest is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection.  Past due status is based on contractual terms of the loan.  For all loan classes, the entire balance of the loan is considered past due if the minimum payment contractually required to be paid is not received by the

6

contractual due date.  For all loan classes, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

The Company charges off residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss.  The Company adheres to timeframes established by applicable regulatory guidance, which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value, less costs to sell when the loan is 120 days past due, charge-off of unsecured open-end loans when the loan is 90 days past due, and charge down to the net realizable value when other secured loans are 90 days past due.  Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

For all classes, all interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income.  The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual.  Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal.  The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.

On occasion, the Company will provide modifications to loans and leases to borrowers experiencing financial difficulty, by providing payment delays, term extensions, or interest-rate reductions. In some cases, combinations of modifications may be made to the same loan or lease. If determined that the value of the modified loan or lease is less than the recorded investment in the loan, a charge-off is recognized to the allowance for credit losses on loans and leases.

Note 2: Accounting Pronouncements

The Jumpstart Our Business Startups Act (the "JOBS Act"), which was enacted in April 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year qualifies as an “emerging growth company.” The Company qualifies as and has elected to be an emerging growth company under the JOBS Act. An emerging growth company may elect to comply with new or amended accounting pronouncements in the same manner as a private company, but must make such election when the company is first required to file a registration statement. Such an election is irrevocable during the period a company is an emerging growth company. The Company has elected to comply with new or amended accounting pronouncements in the same manner as a private company.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU applies to contracts, hedging relationships and other transactions that reference the London Interbank Offer Rate ("LIBOR") or other rate references expected to be discontinued because of reference rate reform. The ASU permits an entity to make necessary modifications to eligible contracts or transactions without requiring contract remeasurement or reassessment of a previous accounting determination. In December of 2022, the FASB issued ASU No. 2022-06 which extended the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The guidance ensures the relief in Topic 848 covers the period of time during which a significant number of modifications may take place and the ASU defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company does not expect the adoption of ASU No. 2020-04 to have a material impact on its consolidated financial statements.

In March 2023, the FASB issued ASU No. 2023-02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. This ASU allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU No. 2023-02 is effective for all public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. The Company adopted this guidance on January 1, 2024. Adoption of ASU 2023-02 did not have a material impact on the Company's consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU established new income tax disclosure requirements and modified existing requirements. The ASU requires additional information be disclosed for specified categories, and reconciling items that meet a certain threshold, within the rate reconciliation on an annual basis. Additionally, this ASU requires information be disclosed on the amount of income taxes paid (net of refunds), disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds) disaggregated by jurisdiction based on a quantitative threshold. ASU No. 2023-09 is effective for all public business entities for

7

annual periods beginning after December 15, 2024. The ASU is effective for the Company beginning January 1, 2025. The Company does not expect the adoption of ASU No. 2023-09 to have a material impact on its consolidated financial statements.

Note 3: Investment Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of investment securities are as follows:

	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale
U.S. treasury securities	$	4,944	$	—	$	28	$	4,916
SBA Pools	5,007		—		577		4,430
Federal agencies	15,000		—		1,977		13,023
State and municipal obligations	167,705		2		30,236		137,471
Mortgage-backed securities - government-sponsored enterprises (GSE) residential	130,285		24		22,666		107,643
Corporate obligations	11,500		—		2,636		8,864
	334,441		26		58,120		276,347
Held to maturity
State and municipal obligations	4,658		12		78		4,592
	4,658		12		78		4,592
Total investment securities	$	339,099	$	38	$	58,198	$	280,939

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale
U.S. treasury securities	$	2,996	$	—	$	20	$	2,976
SBA Pools	5,337		—		565		4,772
Federal agencies	15,000		—		1,847		13,153
State and municipal obligations	169,118		16		27,688		141,446
Mortgage-backed securities - government-sponsored enterprises (GSE) residential	133,223		62		21,804		111,481
Corporate obligations	11,500		—		2,640		8,860
	337,174		78		54,564		282,688
Held to maturity
State and municipal obligations	4,950		13		42		4,921
	4,950		13		42		4,921
Total investment securities	$	342,124	$	91	$	54,606	$	287,609

8

The amortized cost and fair value of investment securities at March 31, 2024, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	6,493	$	6,443	$	1,500	$	1,483
One to five years	25,952		23,894		1,675		1,641
Five to ten years	36,807		32,651		773		785
After ten years	134,904		105,716		710		683
	204,156		168,704		4,658		4,592
Mortgage-backed securities –GSE residential	130,285		107,643		—		—
Totals	$	334,441	$	276,347	$	4,658	$	4,592

Investment securities with a carrying value of $157,728,000 and $162,430,000 were pledged at March 31, 2024 and December 31, 2023, respectively, to secure certain deposits and for other purposes as permitted or required by law.

There were no sales of securities available for sale for the three months ended March 31, 2024 and 2023.

Certain investments in debt securities, as reflected in the table below, are reported in the condensed consolidated financial statements and notes at an amount less than their historical cost.  Total fair value of these investments at March 31, 2024 and December 31, 2023 was $278,077,000 and $279,852,000, respectively, which is approximately 99% and 97% of the Company’s aggregated available for sale and held to maturity investment portfolio at those dates, respectively.  These declines primarily resulted from changes in market interest rates since their purchase.

The Company does not consider available for sale securities with unrealized losses to be experiencing credit losses at March 31, 2024. Management considers it more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost basis, which may be the maturity dates of the securities.

Held to maturity securities are financial assets measured at amortized cost. Held to maturity securities are required to have an established allowance for credit losses that represents the portion of the amortized cost basis of a financial asset that is not expected to be collectable. The Company estimates expected credit losses on a collective basis by security type, with consideration given to historical information, credit ratings, and the statistical probability of future losses.

The Company monitors the credit quality of investment securities held to maturity through the use of credit ratings quarterly. As of March 31, 2024, there was no allowance for credit losses recognized on the Company's securities held to maturity portfolio.

The following table summarizes the amortized cost of held to maturity securities by credit quality indicator as of March 31, 2024:

	State and municipal obligations
AA+	$	1,151
AA-	585
A+	710
BBB+	40
Not rated	2,172
	$	4,658

The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses.

9

The following tables show the Company’s investment securities by gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2024 and December 31, 2023:

Description of Securities	March 31, 2024
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale
U.S. Treasury Securities	$	2,429	$	13	$	2,487	$	15	$	4,916	$	28
SBA Pools	289		—		4,008		577		4,297		577
Federal agencies	—		—		13,023		1,977		13,023		1,977
State and municipal obligations	3,295		17		133,931		30,219		137,226		30,236
Mortgage-backed securities - GSE residential	1,817		13		104,377		22,653		106,194		22,666
Corporate obligations	—		—		8,864		2,636		8,864		2,636
Total available for sale	7,830		43		266,690		58,077		274,520		58,120
Held to maturity
State and municipal obligations	858		8		2,699		70		3,557		78
Total	$	8,688	$	51	$	269,389	$	58,147	$	278,077	$	58,198

Description of Securities	December 31, 2023
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale
U.S. Treasury securities	$	489	$	4	$	2,487	$	16	$	2,976	$	20
SBA Pools	329		—		4,410		565		4,739		565
Federal agencies	—		—		13,153		1,847		13,153		1,847
State and municipal obligations	1,565		21		137,119		27,667		138,684		27,688
Mortgage-backed securities - GSE residential	3,458		139		104,581		21,665		108,039		21,804
Corporate obligations	—		—		8,860		2,640		8,860		2,640
Total available for sale	5,841		164		270,610		54,400		276,451		54,564
Held to maturity
State and municipal obligations	849		3		2,552		39		3,401		42
Total	$	6,690	$	167	$	273,162	$	54,439	$	279,852	$	54,606

Federal Agency Obligations.  The unrealized losses on the Company’s investments in direct obligations of U.S. federal agencies were caused by interest rate changes.  The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments.  The Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity.

SBA Pools and Mortgage-Backed Securities - GSE Residential.  The unrealized losses on the Company’s investment in mortgage-backed securities and SBA pools were caused by interest rate changes and illiquidity.  The Company expects to recover the amortized cost basis over the term of the securities. The decline in fair value is attributable to changes in interest rates and not credit quality. The Company does not intend to sell the securities and it is not more likely than not the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity.

State, Municipal, and Corporate Obligations.  The unrealized losses on the Company’s investments in securities of state, municipal, and corporate obligations were caused by interest rate changes.  The contractual terms of those securities do not

10

permit the issuer to settle the securities at a price less than the amortized cost basis of the investments.  The Company does not intend to sell the securities and it is not more likely than not the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity.

The Company expects the fair value of the securities as described above to recover as the securities approach their maturity or reset date.

Note 4: Loans, Leases and Allowance

The following table shows the composition of the loan and lease portfolio at March 31, 2024 and December 31, 2023:

	March 31, 2024		December 31, 2023
Commercial mortgage	$	338,434	$	341,633
Commercial and industrial	123,661		115,428
Construction and development	165,063		157,805
Multi-family	153,719		138,757
Residential mortgage	171,050		162,123
Home equity lines of credit	12,146		10,904
Direct financing leases	152,468		156,598
Consumer	23,004		23,264
	1,139,545		1,106,512
Less
Allowance for credit losses on loans and leases	15,825		15,663
Deferred loan fees	526		776
	$	1,123,194	$	1,090,073

The Company rates all loans and leases by credit quality using the following designations:

Grade 1 – Exceptional

Exceptional loans and leases are top-quality loans to individuals whose financial credentials are well known to the Company. These loans and leases have excellent sources of repayment, are well documented and/or virtually free of risk (i.e., CD secured loans).

Grade 2 – Quality Loans and Leases

These loans and leases have excellent sources of repayment with no identifiable risk of collection, and they conform in all respects to Company policy and IDFI and FDIC regulations.  Documentation exceptions are minimal or are in the process of being corrected and are not of a type that could subsequently expose the Company to risk of loss.

Grade 3 – Acceptable Loans

This category is for “average” quality loans and leases.  These loans and leases have adequate sources of repayment with little identifiable risk of collection and they conform to Company policy and IDFI/FDIC regulations.

Grade 4 – Acceptable but Monitored

Loans and leases in this category may have a greater than average risk due to financial weakness or uncertainty but do not appear to require classification as special mention or substandard loans.  Loans and leases rated “4” need to be monitored on a regular basis to ascertain that the reasons for placing them in this category do not advance or worsen.

Grade 5 – Special Mention

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Loans and leases in this category have potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in the Company’s credit position at some future date.  Special Mention loans and leases are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.  This special mention rating is designed to identify a specific level of risk and concern about an asset’s quality.  Although a special mention loan or lease has a higher probability of default than a pass rated loan or lease, its default is not imminent.

Grade 6 – Substandard

Loans and leases in this category are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans and leases so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Substandard loans and leases have a high probability of payment default, or they have other well-defined weaknesses.  Such loans and leases have a distinct potential for loss; however, an individual loan’s or lease’s potential for loss does not have to be distinct for the loan or lease to be rated substandard.

The following are examples of situations that might cause a loan or lease to be graded a “6”:

•Cash flow deficiencies (losses) jeopardize future loan or lease payments.

•Sale of non-collateral assets has become a primary source of loan or lease repayment.

•The relationship has deteriorated to the point that sale of collateral is now the Company’s primary source of repayment, unless this was the original source of loan or lease repayment.

•The borrower is bankrupt or for any other reason future repayment is dependent on court action.

Grade 7 – Doubtful

A loan or lease classified as doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable.  A doubtful loan or lease has a high probability of total or substantial loss.  Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Because of high probability of loss, nonaccrual accounting treatment will be required for doubtful loans and leases.

Grade 8 – Loss

Loans and leases classified loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan or lease has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan or lease even though partial recovery may be effected in the future.

No material changes have been made to the risk characteristics discussed above contained in the Company's 2023 Form 10-K.

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The following tables present the credit risk profile of the Company’s loan and lease portfolio based on rating category, payment activity, and origination year as of March 31, 2024 and rating category as of December 31, 2023:

	2024		2023		2022		2021		2020		Prior		Revolving loans amortized cost basis		Total
As of March 31, 2024:
Commercial mortgage
Pass	$	4,094	$	32,554	$	83,880	$	68,696	$	32,560	$	95,083	$	15,987	$	332,854
Special Mention	—		—		—		—		4,814		—		—		4,814
Substandard	—		—		—		246		—		520		—		766
Total Commercial mortgage	4,094		32,554		83,880		68,942		37,374		95,603		15,987		338,434
Current period gross charge-offs	—		—		—		—		—		—		—		—
Commercial and industrial
Pass	10,338		35,863		12,420		12,790		4,085		11,815		31,613		118,924
Substandard	—		—		355		—		—		112		4,270		4,737
Total Commercial and industrial	10,338		35,863		12,775		12,790		4,085		11,927		35,883		123,661
Current period gross charge-offs	—		—		—		—		—		—		—		—
Construction and development
Pass	13,993		29,118		78,358		35,146		3,045		503		—		160,163
Substandard	—		—		—		—		—		4,900		—		4,900
Total Construction and development	13,993		29,118		78,358		35,146		3,045		5,403		—		165,063
Current period gross charge-offs	—		—		—		—		—		—		—		—
Multi-family
Pass	205		3,733		50,088		35,305		6,336		25,479		26,846		147,992
Special Mention	—		—		—		1,538		—		—		4,189		5,727
Total Multi-family	205		3,733		50,088		36,843		6,336		25,479		31,035		153,719
Current period gross charge-offs	—		—		—		—		—		—		—		—
Residential mortgage
Pass	6,162		34,488		31,043		34,687		17,396		43,664		2,207		169,647
Substandard	—		—		—		226		—		1,177		—		1,403
Total Residential mortgage	6,162		34,488		31,043		34,913		17,396		44,841		2,207		171,050
Current period gross charge-offs	—		—		—		—		—		10		—		10
Home equity
Pass	22		—		—		—		—		—		12,124		12,146
Total Home equity lines of credit	22		—		—		—		—		—		12,124		12,146
Current period gross charge-offs	—		—		—		—		—		—		—		—
Direct financing leases
Pass	13,286		70,193		37,682		20,429		8,169		2,115		—		151,874
Substandard	12		261		206		42		36		—		—		557
Doubtful	—		36		—		—		—		1		—		37
Total Direct financing leases	13,298		70,490		37,888		20,471		8,205		2,116		—		152,468
Current period gross charge-offs	—		157		125		70		5		—		—		357
Consumer
Pass	2,396		8,639		7,378		3,328		681		522		—		22,944
Substandard	—		22		37		—		—		1		—		60
Total Consumer	2,396		8,661		7,415		3,328		681		523		—		23,004
Current period gross charge-offs	9		36		17		10		—		—		—		72
Total Loans and Leases	$	50,508	$	214,907	$	301,447	$	212,433	$	77,122	$	185,892	$	97,236	$	1,139,545
Total current period gross charge-offs	$	9	$	193	$	142	$	80	$	5	$	10	$	—	$	439

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	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Total
As of December 31, 2023:
Commercial mortgage
Pass	$	31,795	$	83,567	$	69,863	$	33,226	$	45,746	$	60,563	$	11,495	$	336,255
Special Mention	—		—		—		4,850		—		—		—		4,850
Substandard	—		—		—		—		—		528		—		528
Total Commercial mortgage	31,795		83,567		69,863		38,076		45,746		61,091		11,495		341,633
Current period gross charge-offs	—		—		—		—		—		—		—		—
Commercial and industrial
Pass	38,721		13,509		13,390		4,348		1,727		9,430		30,287		111,412
Substandard	—		—		—		10		—		138		3,868		4,016
Total Commercial and industrial	38,721		13,509		13,390		4,358		1,727		9,568		34,155		115,428
Current period gross charge-offs	—		58		—		—		—		—		—		58
Construction and development
Pass	36,868		81,715		30,383		2,981		111		847		—		152,905
Substandard	—		—		—		—		4,900		—		—		4,900
Total Construction and development	36,868		81,715		30,383		2,981		5,011		847		—		157,805
Current period gross charge-offs	—		—		—		—		—		—		—		—
Multi-family
Pass	4,443		39,271		37,422		6,383		7,291		18,400		25,547		138,757
Total Multi-family	4,443		39,271		37,422		6,383		7,291		18,400		25,547		138,757
Current period gross charge-offs	—		—		—		—		—		—		—		—
Residential mortgage
Pass	31,352		31,447		35,174		17,651		8,812		36,118		216		160,770
Substandard	—		—		—		—		92		1,261		—		1,353
Total Residential mortgage	31,352		31,447		35,174		17,651		8,904		37,379		216		162,123
Current period gross charge-offs	—		—		—		—		—		—		—		—
Home equity
Pass	—		—		282		—		—		—		10,597		10,879
Substandard	—		—		—		—		—		—		25		25
Total Home equity lines of credit	—		—		282		—		—		—		10,622		10,904
Current period gross charge-offs	—		—		—		—		—		—		—		—
Direct financing leases
Pass	76,018		41,838		24,675		10,264		2,895		462		—		156,152
Substandard	80		184		80		21		—		—		—		365
Doubtful	79		—		—		—		2		—		—		81
Total Direct financing leases	76,177		42,022		24,755		10,285		2,897		462		—		156,598
Current period gross charge-offs	105		276		459		85		11		1		—		937
Consumer
Pass	9,775		8,223		3,713		840		358		279		—		23,188
Substandard	35		17		15		—		9		—		—		76
Total Consumer	9,810		8,240		3,728		840		367		279		—		23,264
Current period gross charge-offs	39		69		75		25		7		—		—		215
Total Loans and Leases	$	229,166	$	299,771	$	214,997	$	80,574	$	71,943	$	128,026	$	82,035	$	1,106,512
Total current period gross charge-offs	$	144	$	403	$	534	$	110	$	18	$	1	$	—	$	1,210

For the three months ended March 31, 2024 and December 31, 2023, the Company did not have any revolving loans convert to term loans.

14

The following tables present the Company’s loan and lease portfolio aging analysis of the recorded investment in loans and leases as of March 31, 2024 and December 31, 2023:

	March 31, 2024
	Delinquent Loans and Leases								Current		Total Portfolio Loans and Leases		Total Loans and Leases > 90 Days Accruing
	30-59 Days Past Due		60-89 Days Past Due		90 Days and Over		Total Past Due
Commercial mortgage	$	179	$	—	$	—	$	179	$	338,255	$	338,434	$	—
Commercial and industrial	—		—		15		15		123,646		123,661		15
Construction and development	—		—		4,900		4,900		160,163		165,063		—
Multi-family	446		—		—		446		153,273		153,719		—
Residential mortgage	805		562		1,402		2,769		168,281		171,050		1,302
Home equity	734		—		—		734		11,412		12,146		—
Direct financing leases	612		104		477		1,193		151,275		152,468		477
Consumer	277		207		60		544		22,460		23,004		60
Totals	$	3,053	$	873	$	6,854	$	10,780	$	1,128,765	$	1,139,545	$	1,854

	December 31, 2023
	Delinquent Loans and Leases								Current		Total Portfolio Loans and Leases		Total Loans and Leases > 90 Days Accruing
	30-59 Days Past Due		60-89 Days Past Due		90 Days and Over		Total Past Due
Commercial mortgage	$	—	$	—	$	—	$	—	$	341,633	$	341,633	$	—
Commercial and industrial	136		—		—		136		115,292		115,428		—
Construction and development	—		75		4,900		4,975		152,830		157,805		—
Multi-family	—		—		—		—		138,757		138,757		—
Residential mortgage	688		306		1,379		2,373		159,750		162,123		1,278
Home equity	463		—		25		488		10,416		10,904		25
Direct financing leases	452		236		296		984		155,614		156,598		296
Consumer	292		148		76		516		22,748		23,264		76
Totals	$	2,031	$	765	$	6,676	$	9,472	$	1,097,040	$	1,106,512	$	1,675

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The following table presents information on the Company’s nonaccrual loans and leases at March 31, 2024, and at December 31, 2023:

	March 31, 2024				December 31, 2023
	Nonaccrual loans and leases		Nonaccrual loans and leases without an allowance for credit losses		Nonaccrual loans and leases		Nonaccrual loans and leases without an allowance for credit losses
Commercial and industrial	$	39	$	—	$	1,241	$	1,202
Construction and development	4,900		—		4,900		—
Residential mortgage	100		100		101		101
Direct financing leases	37		37		82		82
Total nonaccrual loans and leases	$	5,076	$	137	$	6,324	$	1,385

During the three months ended March 31, 2024 and December 31, 2023, the Company recognized $1,000 and $42,000 of interest income on nonaccrual loans and leases, respectively.

The following tables present the Company's amortized cost basis of collateral dependent loans, and their respective collateral type, which are individually analyzed to determine expected credit losses as of March 31, 2024 and December 31, 2023:

	March 31, 2024
	Commercial Real Estate		Multi-family Housing		Residential Real Estate		Other		Total		Allowance on Collateral Dependent Loans
Commercial mortgage	$	5,334	$	—	$	—	$	—	$	5,334	$	—
Commercial and industrial	—		—		—		4,271		4,271		—
Construction and development	4,900		—		—		—		4,900		1,000
Multi-family	—		1,538		—		—		1,538		—
Residential mortgage	—		—		151		—		151		—
Total	$	10,234	$	1,538	$	151	$	4,271	$	16,194	$	1,000

	December 31, 2023
	Commercial Real Estate		Residential Real Estate		Other		Total		Allowance on Collateral Dependent Loans
Commercial mortgage	$	5,377	$	—	$	—	$	5,377	$	—
Commercial and industrial	—		—		3,868		3,868		—
Construction and development	4,900		—		—		4,900		1,000
Residential mortgage	—		152		—		152		—
Total	$	10,277	$	152	$	3,868	$	14,297	$	1,000

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Loan Modification Disclosures under ASU 2022-02

In certain situations, the Company may modify the terms of a loan to a borrower experiencing financial difficulty. These modifications may include payment delays, term extensions, or interest-rate reductions. In some cases, combinations of modifications may be made to the same loan. If a determination is made that a modified loan has been deemed uncollectible, the loan (or portion of the loan) is charged-off, reducing the amortized cost basis of the loan and adjusting the allowance for credit losses. During the three months ended March 31, 2024 and 2023, the Company had no new modifications to borrowers experiencing financial difficulty.

There were no modified loans and leases that had a payment default during the three months ended March 31, 2024 and 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

Other Real Estate Owned

At March 31, 2024 and December 31, 2023, the balance of real estate owned included $82,000 and $136,000, respectively, of foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property.  At March 31, 2024 and December 31, 2023, the recorded investment in consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process was $465,000 and $470,000, respectively.

Direct Financing Leases

The following lists the components of the net investment in direct financing leases:

	March 31, 2024		December 31, 2023
Total minimum lease payments to be received	$	173,041	$	177,952
Initial direct costs	9,883		9,702
	182,924		187,654
Less: Unearned income	(30,456)		(31,056)
Net investment in direct finance leases	$	152,468	$	156,598

The following table summarizes the future minimum lease payments receivable subsequent to March 31, 2024:

Remainder of 2024	$	48,968
2025	53,253
2026	38,495
2027	22,658
2028	9,061
Thereafter	606
	$	173,041

Allowance for Credit Losses on Loans and Leases

The allowance for credit losses on loans and leases is established for current expected credit losses on the Company's loan and lease portfolios in accordance with ASC Topic 326. This requires significant judgement to estimate credit losses measured on a collective pool basis when similar risk characteristics exist, and for loans evaluated individually. The Company estimates expected future losses for the loan's entire contractual term, taking into account expected payments when appropriate. The allowance is an estimation based on management's evaluation of expected losses related to the Company's financial assets measured at amortized cost. It considers relevant available information from internal and external sources relating to the

17

historical loss experience, current conditions and reasonable and supportable forecasts for the Company's outstanding loan and lease balances.

The Company utilizes a cash flow ("CF") analysis method of estimating expected losses, which relies on key inputs and assumptions. Significant factors affecting the calculation are the segmenting of loans and leases based upon similar risk characteristics, applied loss rates based upon reasonable and supportable forecasts, and contractual term adjustments, including prepayment and curtailment adjustments. To ensure the allowance is maintained at an adequate level, a detailed analysis is performed on a quarterly basis, with an appropriate provision made to adjust the allowance.

The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses, as it is the Company's policy to write off accrued interest in a timely manner as it is deemed uncollectible by reversing interest income.

The Company categorizes its loan portfolios into eight segments, as discussed above, based on similar risk characteristics. Loans within each segment are collectively evaluated using either a CF methodology or remaining life methodology. When estimating for credit loss, the Company forecasts the first four quarters of the credit loss estimate and reverts to a long-run average of each considered factor. The Company developed its reasonable and supportable forecasts using economic data, such as gross domestic product and unemployment rate.

Qualitative adjustments are applied to each collectively segmented pool to appropriately capture differences in current or expected qualitative risk characteristics. When evaluating the estimation for expected credit losses, the Company evaluates these qualitative adjustments for any changes in:

•lending policies, procedures, and strategies;

•the nature and volume of the loan and lease portfolio;

•international, national, regional, and local conditions;

•the experience, depth, and ability of lending management;

•the volume and severity of past due loans;

•the quality of the loan review system;

•the underlying collateral;

•concentration risk; and

•the effect of other external factors.

The following tables summarizes changes in the allowance for credit losses by segment for the three months ended March 31, 2024 and 2023:

	Balances, December 31, 2023		Provision (reversal) for credit losses		Charge-offs		Recoveries		Balances, March 31, 2024
Commercial mortgage	$	4,655	$	(29)	$	—	$	—	$	4,626
Commercial and industrial	1,281		48		—		61		1,390
Construction and development	3,883		17		—		—		3,900
Multi-family	1,789		117		—		—		1,906
Residential mortgage	1,681		45		(10)		4		1,720
Home equity	102		11		—		—		113
Direct financing leases	1,955		246		(357)		24		1,868
Consumer	317		31		(72)		26		302
Total	$	15,663	$	486	$	(439)	$	115	$	15,825

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	Balances, December 31, 2022		Impact of adopting ASC 326		Balances, January 1, 2023 Post-ASC 326 adoption		Provision (reversal) for credit losses		Charge-offs		Recoveries		Balances, March 31, 2023
Commercial mortgage	$	4,776	$	(395)	$	4,381	$	337	$	—	$	10	$	4,728
Commercial and industrial	1,291		360		1,651		(125)		—		12		1,538
Construction and development	2,855		784		3,639		(164)		—		—		3,475
Multi-family	1,955		(99)		1,856		111		—		—		1,967
Residential mortgage	76		1,439		1,515		71		—		10		1,596
Home equity	23		89		112		—		—		—		112
Direct financing leases	1,196		422		1,618		68		(85)		164		1,765
Consumer	241		64		305		42		(44)		11		314
Total	$	12,413	$	2,664	$	15,077	$	340	$	(129)	$	207	$	15,495

During the first quarter of 2024, the allowance for credit losses on loans and leases increased from $15.7 million at December 31, 2023, to $15.8 million at March 31, 2024. The increase was attributable to additional provisions totaling $486,000 during the first quarter of 2024, partially offset by net charge-offs of $324,000. Multiple loan categories experienced loan growth, while a few declined slightly.

•Commercial Mortgage – allowance decreased due to loan balances decreasing $3.2 million.

•Commercial & Industrial – allowance increased due to loan balances increasing $8.2 million.

•Construction & Development – allowance increased due to loan balances increasing $7.3 million.

•Multi-Family – allowance increased due to balances increasing $15.0 million.

•Residential Mortgage – allowance increased due to balances increasing $8.9 million.

•Home Equity – allowance increased due to balances increasing $1.2 million.

•Direct Financing Leases – allowance decreased due to balances decreasing $4.1 million.

•Consumer – allowance decreased due to balances decreasing $260,000.

Although the Company has a diversified loan and lease portfolio, our commercial loan portfolio, consisting of commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, represents 68.5% and 68.1% of our portfolio as of March 31, 2024 and December 31, 2023, respectively. The allowance for credit losses on loans and leases allocated to the commercial loan portfolio represents 74.7% and 74.1% of our total allowance at March 31, 2024 and December 31, 2023, respectively.

Economic Outlook

Due to the future-focused nature of the calculation for the allowance for credit losses, management must make significant assumptions. Estimating an appropriate allowance requires management to use relevant forward-looking information drawn from reasonable and supportable forecasts. Economic factors are a consequential part of these forecasts, and as such are evaluated periodically for developments that may impact the Company's allowance for credit losses and loan and lease portfolio.

As of March 31, 2024, the primary economic factors affecting the Company's loan portfolio continue to be persistent inflation, higher interest rates, geopolitical risk, mild economic growth, and a weakened employment outlook. These key factors will continue to influence the Company's loan and lease portfolio for the near future. In addition, market liquidity continues to impact the economic environment and could potentially further tighten credit conditions.

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The Company remains committed to three growth market regions: Columbus, Ohio, Dayton/Springfield, Ohio, and Indianapolis, Indiana. These market regions specialize in commercial real estate loans, and their respective forecasts are described below:

•Columbus, Ohio – The market region anticipates stable job growth in 2024, with slight increases projected in certain sectors. Construction activity is showing signs of slowing, as speculative projects are not being pre-leased, prompting greater caution in initiating new developments. The majority of new construction projects are built-to-suit, indicating a softening demand as parties exercise prudence amid economic uncertainties. The region's unemployment rate has seen a slight uptick, aligning with the national average.

•Dayton/Springfield, Ohio – The economic outlook for this region remains stable. With few new projects entering the market and a lack of ongoing construction, the real estate sector appears to be in a holding pattern. However, there is a noticeable trend towards a decrease in the region's vacancy rate, suggesting potential shifts in demand patterns or better utilization of existing properties. Concerns about recession are diminishing, and the economic outlook for 2024 indicates a slow but steady positive trajectory.

The relationship between Wright Patterson Air Force Base (WPAFB) and the local market is deeply interconnected, influencing all aspects of the economy. The future economic prospects of the area are closely tied to WPAFB and the success of the military, federal government, and defense industry. WPAFB is currently unveiling extensive plans to revamp and streamline processes across the Air Force and related sectors. These initiatives have the potential to significantly impact the economic trajectory of the local market.

•Indianapolis, Indiana – Based upon optimistic first quarter 2024 economic results, the market region is expecting continued economic growth in 2024. First quarter results were fueled primarily by an expanding labor market, retail sales growth, and increasing median household incomes.

Future potential economic volatility may have a significant impact on the Company's loan and lease portfolio, specifically the allowance for credit losses. There are a myriad of potential outcomes, and the variances may be significant and unpredictable. As a result, the Company's future estimates may fluctuate for the remainder of 2024.

Allowance for Credit Losses on Unfunded Commitments

The allowance for credit losses on unfunded commitments is included in other liabilities on the Condensed Consolidated Balance Sheets. The estimate of expected losses on unfunded commitments is calculated based on the loss rate for the loan or lease segment in which the loan or lease commitments would be classified if funded, adjusted for the estimate of funding probability. Additional provisions applied to the allowance are recognized in the provision for credit losses on the Condensed Consolidated Statements of Income.

The following table details activity in the allowance for credit losses on unfunded commitments during the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Beginning balance	$	1,642	$	—
Impact of adopting ASC 326	—		2,374
Provision (reversal) for credit losses	(303)		(170)
Ending balance	$	1,339	$	2,204

Note 5: Fair Value of Financial Instruments

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Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1    Quoted prices in active markets for identical assets or liabilities

Level 2    Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3    Unobservable inputs supported by little or no market activity that are significant to the fair value of the assets or liabilities

Recurring Measurements

The following tables present the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2024 and December 31, 2023:

			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2024
Available for sale securities
U.S. Treasury securities	$	4,916	$	4,916	$	—	$	—
SBA Pools	4,430		—		4,430		—
Federal agencies	13,023		—		13,023		—
State and municipal obligations	137,471		—		137,471		—
Mortgage-backed securities - GSE residential	107,643		—		107,643		—
Corporate obligations	8,864		—		8,864		—
	$	276,347	$	4,916	$	271,431	$	—

			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2023
Available for sale securities
U.S. Treasury securities	$	2,976	$	2,976	$	—	$	—
SBA Pools	4,772		—		4,772		—
Federal agencies	13,153		—		13,153		—
State and municipal obligations	141,446		—		141,446		—
Mortgage-backed securities - GSE residential	111,481		—		111,481		—
Corporate obligations	8,860		—		8,860		—
	$	282,688	$	2,976	$	279,712	$	—

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to

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the valuation hierarchy. There have been no significant changes in the valuation techniques during the three months ended March 31, 2024.

Available for Sale Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy, which includes equity securities.  If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include agency securities, obligations of state and political subdivisions, and mortgage-backed securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Nonrecurring Measurements

As of March 31, 2024 and December 31, 2023, there were no assets or liabilities measured at fair value on a nonrecurring basis.

Fair Value of Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments at March 31, 2024 and December 31, 2023:

			Fair Value Measurements Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2024
Financial assets
Cash and cash equivalents	$	20,290	$	20,290	$	—	$	—
Available for sale securities	276,347		4,916		271,431		—
Held to maturity securities	4,658		—		4,592		—
Loans held for sale	85		—		—		85
Loans and leases receivable, net	1,123,194		—		—		1,017,604
FHLB stock	13,907		—		13,907		—
Interest receivable	5,988		—		5,988		—
Financial liabilities
Deposits	1,069,642		—		1,067,407		—
FHLB advances	273,000		—		269,929		—
Interest payable	3,864		—		3,864		—

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			Fair Value Measurements Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2023
Financial assets
Cash and cash equivalents	$	20,240	$	20,240	$	—	$	—
Available for sale securities	282,688		2,976		279,712		—
Held to maturity securities	4,950		—		4,921		—
Loans held for sale	794		—		—		794
Loans and leases receivable, net	1,090,073		—		—		985,976
FHLB stock	12,647		—		12,647		—
Interest receivable	5,844		—		5,844		—
Financial liabilities
Deposits	1,041,140		—		1,038,178		—
FHLB advances	271,000		—		266,885		—
Interest payable	4,397		—		4,397		—

Note 6: Earnings per Share

Basic EPS is computed by dividing net income allocated to common stock by the weighted average number of common shares outstanding during the period which excludes the participating securities. Diluted EPS includes the dilutive effect of additional potential common shares from stock compensation awards, but excludes awards considered participating securities. ESOP shares are not considered outstanding for EPS until they are earned. The following table presents the computation of basic and diluted EPS for the periods indicated:

	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Net income	$	2,369	$	2,904
Shares outstanding for Basic EPS:
Average shares outstanding	11,170,354		11,758,118
Less: average restricted stock award shares not vested	167,158		261,291
Less: average unearned ESOP Shares	842,993		897,098
Shares outstanding for Basic EPS	10,160,203		10,599,729
Additional Dilutive Shares	69,477		136,048
Shares outstanding for Diluted EPS	10,229,680		10,735,777
Basic Earnings Per Share	$	0.23	$	0.27
Diluted Earnings Per Share	$	0.23	$	0.27

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Note 7: Benefit Plans

401(k)

The Company has a retirement savings 401(k) plan, in which substantially all employees may participate. The Company matches employees' contributions at the rate of 50 percent for the first six percent of base salary contributed by participants. The Company’s expense for the plan was $68,000 and $37,000 for the three months ended March 31, 2024 and 2023, respectively.

Employee Stock Ownership Plan

As part of the reorganization and related stock offering, the Company established an Employee Stock Ownership Plan, or ESOP, covering substantially all employees. The ESOP acquired 1,082,130 shares of Company common stock at an average price of $13.59 per share on the open market with funds provided by a loan from the Company. Dividends on unallocated shares used to repay the loan for the Company are recorded as a reduction of the loan or accrued interest, as applicable. Dividends on allocated shares paid to participants are reported as compensation expense.  Unearned ESOP shares which have not yet been allocated to ESOP participants are excluded from the computation of average shares outstanding for earnings per share calculation. Accordingly, 829,616 and 843,142 shares of common stock acquired by the ESOP were shown as a reduction of stockholders’ equity at March 31, 2024 and December 31, 2023, respectively. Shares are released to participants proportionately as the loan is repaid.

ESOP expense for the three months ended March 31, 2024 and 2023 was $154,000 and $171,000, respectively.

	March 31, 2024		December 31, 2023
Earned ESOP shares	252,514		238,988
Unearned ESOP shares	829,616		843,142
Total ESOP shares	1,082,130		1,082,130
Quoted per share price	$	11.12	$	11.51
Fair value of earned shares (in thousands)	$	2,808	$	2,751
Fair value of unearned shares (in thousands)	$	9,225	$	9,705

Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan

On September 15, 2020, the Company's stockholders approved the Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan ("2020 EIP") which provides for the grant to eligible participants of up to (i) 1,352,662 shares of Company common stock to be issued upon the exercise of stock options and stock appreciation rights and (ii) 541,065 shares of Company common stock to participants as restricted stock awards (which may be in the form of shares of common stock or share units giving the participant the right to receive shares of common stock at a specified future date).

Restricted Stock Awards. On October 1, 2020, the Company awarded 449,086 shares of common stock under the 2020 EIP with a grant date fair value of $10.53 per share (total fair value of $4.7 million at issuance) to eligible participants. On April 1, 2021, the Company awarded an additional 4,000 shares of common stock under the 2020 EIP with a grant date fair value of $13.86 (total fair value of $55,000 at issuance) to eligible participants. These awards vest in five equal annual installments with the first vesting occurring on June 30, 2021. Forfeited shares may be awarded to other eligible recipients in future grants until the 2020 EIP terminates in September 2030.

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The following table summarizes the restricted stock award activity in the 2020 EIP during the three months ended March 31, 2024.

	Three Months Ended March 31, 2024
	Number of Restricted Shares	Weighted Average Grant Date Fair Value
Non-vested, beginning of period	167,158	$	10.56
Granted	—	—
Vested	—	—
Forfeited	—	—
Non-vested, March 31, 2024	167,158	10.56

Total compensation cost recognized in the income statement for restricted stock awards during the three months ended March 31, 2024 and 2023 was $219,000 and $227,000, and the related tax benefit recognized was $46,000 and $48,000, respectively. As of March 31, 2024, unrecognized compensation expense related to restricted stock awards was $1.1 million.

Stock Option Plan. On October 1, 2020, the Company awarded options to purchase 1,095,657 of common stock under the 2020 EIP with an exercise price of $10.53 per share, the fair value of a share of the Company's common stock on the date of grant, to eligible participants. On April 1, 2021, the Company awarded options to purchase 8,000 shares of common stock under the 2020 EIP with an exercise price of $13.86 per share, the fair value of a share of the Company's common stock on the date of the grant, to eligible participants. These options awarded vest in five equal annual installments with the first vesting occurring on June 30, 2021. Forfeited options may be awarded to other eligible recipients in future grants until the 2020 EIP terminates in September 2030.

The following table summarizes the stock option activity in the 2020 EIP during the three months ended March 31, 2024.

	Three Months Ended March 31, 2024
	Number of Shares	Weighted-Average Exercise Price
Balance at beginning of period	1,050,961	$	10.56
Granted	—	—
Exercised	—	—
Forfeited/expired	—	—
Balance, March 31, 2024	1,050,961	10.56
Exercisable at end of period	641,969	$	10.55

The fair value of options granted is estimated on the date of the grant using a Black Scholes model with the following assumptions:

	April 1, 2021
Dividend yields	1.90	%
Volatility factors of expected market price of common stock	26.98	%
Risk-free interest rates	1.16	%
Expected life of options	6.1 years

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A summary of the status of the Company stock option shares as of March 31, 2024 is presented below.

	Shares	Weighted Average Grant Date Fair Value
Non-vested, beginning of year	408,992	$	2.91
Vested	—	—
Granted	—	—
Forfeited	—	—
Non-vested, March 31, 2024	408,992	$	2.91

Total compensation cost recognized in the income statement for option-based payment arrangements for the three months ended March 31, 2024 and 2023 was $148,000 and $153,000, and the related tax benefit recognized was $16,000 and $17,000, respectively. As of March 31, 2024, unrecognized compensation expense related to the stock option awards was $742,000.

Note 8: Qualified Affordable Housing Investments

The Company has investments in certain limited partnerships that fund affordable housing projects, which provide the Company with low income housing tax credits ("LIHTC"). At both March 31, 2024 and December 31, 2023, the balance of these investments in LIHTC totaled $1.1 million. These balances are reflected in the other assets line of the Condensed Consolidated Balance Sheet. The assets are amortized as a component of the provision for income taxes.

The following table summarizes the amortization expense and tax credits recognized for the Company's LIHTC investments for the three months ended March 31, 2024 and 2023.

	Three Months Ended March 31,
	2024		2023
Amortization expense	$	44	$	44
Tax credits recognized	47		47

Note 9: Subsequent Event

Subsequent to March 31, 2024 through May 14, 2024, the Company purchased 50,428 shares of the Company's common stock pursuant to the existing stock repurchase program, leaving 724,995 shares available for future repurchase.

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

Management’s discussion and analysis of financial condition of the Richmond Mutual Bancorporation, Inc. (the “Company”) at March 31, 2024, and the consolidated results of operations for the three month period ended March 31, 2024, compared to the same period in 2023, is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto appearing in Part I, Item 1, of this Form 10-Q.

The terms “we,” “our,” “us,” or the “Company” refer to Richmond Mutual Bancorporation, Inc. and its consolidated direct and indirect subsidiaries, including First Bank Richmond, which we sometimes refer to as the “Bank,” unless the context otherwise requires.

Cautionary Note Regarding Forward-Looking Statements

Certain matters in this Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are not statements of historical fact, are based on certain assumptions and are generally identified by use of words such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.”   These forward-looking statements include, but are not limited to:

•statements of our goals, intentions and expectations;

•statements regarding our business plans, prospects, growth and operating strategies;

•statements regarding the quality of our loan and investment portfolios; and

•estimates of our risks and future costs and benefits.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made.  These forward-looking statements are based on our current beliefs and expectations and, by their nature, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

Important factors that could cause our actual results to differ materially from the results anticipated or projected include, but are not limited to, the following:

•potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession, or slowed economic growth;

•changes in the interest rate environment, including the recent increases in the Board of Governors of the Federal Reserve System (the "Federal Reserve") benchmark rate and duration at which such increased interest rate levels are maintained, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity;

•the impact of continuing high inflation and the current and future monetary policies of the Federal Reserve in response thereto;

•the effects of any federal government shutdown;

•general economic conditions, either nationally or in our market areas, that are worse than expected;

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•changes in the level and direction of loan or lease delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses;

•our ability to access cost-effective funding including maintaining the confidence of depositors;

•unexpected outflows of uninsured deposits may require us to sell investment securities at a loss;

•fluctuations in real estate values, and residential, commercial, and multi-family real estate market conditions;

•demand for loans and deposits in our market area;

•our ability to implement and change our business strategies;

•competition among depository and other financial institutions and equipment financing companies;

•the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment;

•inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans and leases we have made and make;

•adverse changes in the securities or secondary mortgage markets;

•changes in the quality or composition of our loan, lease or investment portfolios;

•our ability to keep pace with technological changes, including our ability to identify and address cyber-security risks such as data security breaches, "denial of service" attacks, "hacking" and identity theft, and other attacks on our information technology systems or on the third-party vendors who perform several of our critical processing functions;

•the inability of third-party providers to perform as expected;

•our ability to manage market risk, credit risk and operational risk in the current economic environment;

•our ability to enter new markets successfully and capitalize on growth opportunities;

•our ability to attract and retain key employees;

•our compensation expense associated with equity allocated or awarded to our employees;

•changes in the financial condition, results of operations or future prospects of issuers of securities that we own;

•our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto;

•changes in consumer spending, borrowing and savings habits;

•changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission ("SEC") or the Public Company Accounting Oversight Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods;

•legislative or regulatory changes such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and its implementing regulations that may adversely affect our business, and the availability of resources to address such changes;

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•our ability to pay dividends on our common stock;

•other economic, competitive, governmental, regulatory, and technical factors affecting our operations, pricing, products and services;

•the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest, and other external events on our business; and

•the other risks detailed in this report and from time to time in our other filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”).

We undertake no obligation to publicly update or revise any forward-looking statements included in this report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise.  In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur and you should not put undue reliance on any forward-looking statements.

Overview

The Company, a Maryland corporation, is a bank holding company for its wholly owned subsidiary, First Bank Richmond. Substantially all of the Company's business is conducted through First Bank Richmond. The Company is regulated by the Federal Reserve and the Indiana Department of Financial Institutions ("IDFI"). The Company's corporate office is located at 31 North 9th Street, Richmond, Indiana, and its telephone number is (765) 962-2581.

First Bank Richmond is an Indiana state-chartered commercial bank headquartered in Richmond, Indiana. The Bank was originally established in 1887 as an Indiana state-chartered mutual savings and loan association and in 1935 converted to a federal mutual savings and loan association, operating under the name First Federal Savings and Loan Association of Richmond. In 1993, the Bank converted to a state-chartered mutual savings bank and changed its name to First Bank Richmond, S.B. In 1998, the Bank, in connection with its non-stock mutual holding company reorganization, converted to a national bank charter operating as First Bank Richmond, National Association. In July 2007, Richmond Mutual Bancorporation-Delaware, the Bank’s then current holding company, acquired Mutual Federal Savings Bank headquartered in Sidney, Ohio.  Mutual Federal Savings Bank was operated independently as a separately chartered, wholly owned subsidiary of Richmond Mutual Bancorporation-Delaware until 2016 when it was combined with the bank through an internal merger transaction that consolidated both banks into a single, more efficient commercial bank charter. In 2017, the Bank converted to an Indiana state-chartered commercial bank and changed its name to First Bank Richmond. The former Mutual Federal Savings Bank continues to operate in Ohio under the name Mutual Federal, a division of First Bank Richmond.

First Bank Richmond provides full banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana, its five full-service offices located in Piqua (2), Sidney (2) and Troy (1), Ohio, and its loan production office in Columbus, Ohio. Administrative, trust and wealth management services are conducted through First Bank Richmond’s Corporate Office/Financial Center located in Richmond, Indiana. As an Indiana-chartered commercial bank, First Bank Richmond is subject to regulation by the IDFI and the Federal Deposit Insurance Corporation (“FDIC”).

Our principal business consists of attracting deposits from the general public, as well as brokered deposits, and investing those funds primarily in loans secured by commercial and multi-family real estate, first mortgages on owner-occupied, one- to four-family residences, a variety of consumer loans, direct financing leases and commercial and industrial loans. We also obtain funds by utilizing Federal Home Loan Bank (“FHLB”) advances. Funds not invested in loans generally are invested in investment securities, including mortgage-backed and mortgage-related securities and government sponsored agency and municipal bonds.

First Bank Richmond generates commercial, mortgage and consumer loans and leases and receives deposits from customers located primarily in Wayne and Shelby Counties, in Indiana and Shelby, Miami and Franklin (no deposits) Counties, in Ohio. We sometimes refer to these counties as our primary market area. First Bank Richmond’s loans are generally secured by specific items of collateral including real property, consumer assets and business assets. Our leasing operation consists of direct investments in equipment that we lease (referred to as direct finance leases) to small businesses located throughout the United States. Our lease portfolio consists of various kinds of equipment, generally technology-related, such as computer systems, medical equipment and general manufacturing, industrial, construction and transportation equipment. We seek leasing

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transactions where we believe the equipment leased is integral to the lessee's business. We also provide trust and wealth management services, including serving as executor and trustee under wills and deeds and as guardian and custodian of employee benefits, and manage private investment accounts for individuals and institutions. Total wealth management assets under management and administration were $180.2 million at March 31, 2024.

Our results of operations are primarily dependent on net interest income. Net interest income is the difference between interest income, which is the income that is earned on loans and investments, and interest expense, which is the interest that is paid on deposits and borrowings. Other significant sources of pre-tax income are service charges (mostly from service charges on deposit accounts and loan servicing fees), and fees from sale of residential mortgage loans originated for sale in the secondary market. We also recognize income from the sale of investment securities.

Changes in market interest rates, the slope of the yield curve, and interest we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and shareholders’ equity, usually have the largest impact on changes in our net interest spread, net interest margin and net interest income during a reporting period.

At March 31, 2024, on a consolidated basis, we had $1.5 billion in assets, $1.1 billion in loans and leases, net of allowance, $1.1 billion in deposits and $132.4 million in stockholders’ equity.  At March 31, 2024, First Bank Richmond’s total risk-based capital ratio was 14.1%, exceeding the 10.0% requirement for a well-capitalized institution. For the three months ended March 31, 2024, net income was $2.4 million, compared with net income of $2.9 million for the three months ended March 31, 2023.

Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with GAAP. In doing so, we have to make estimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We have reviewed our critical accounting estimates with the audit committee of our Board of Directors.

There have been no significant changes during the three months ended March 31, 2024 to the critical accounting estimates reported in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K. See "Critical Accounting Estimates" included in Part II, Item 7 of our 2023 Form 10-K for a further discussion of our Critical Accounting Estimates.

Comparison of Financial Condition at March 31, 2024 and December 31, 2023

General.  Total assets increased $26.6 million, or 1.8%, to $1.5 billion at March 31, 2024 from December 31, 2023. The increase was primarily the result of a $33.1 million, or 3.0%, increase in loans and leases, net of allowance for credit losses, to $1.1 billion, partially offset by a $6.6 million, or 2.3%, decrease in investment securities to $281.0 million at March 31, 2024.

Investment Securities. Investment securities available for sale totaled $276.3 million and $282.7 million, while investment securities held to maturity totaled $4.7 million and $4.9 million at March 31, 2024 and December 31, 2023, respectively. The $6.3 million or 2.2% decrease in investment securities available for sale was primarily due to maturities and principal repayments of $4.4 million and a $3.6 million downward mark-to-market adjustment on the investment portfolio. The decrease in investment securities held to maturity was the result of scheduled principal repayments and maturities.

Loans and Leases. Loans and leases, net of allowance for credit losses on loans and leases, increased $33.1 million, or 3.0%, to $1.1 billion at March 31, 2024 from December 31, 2023.  The increase in loans and leases was attributable to an increase in multi-family loans, residential mortgage loans, and commercial and industrial loans of $15.0 million, $8.9 million and $8.2 million, respectively. At March 31, 2024, loans held for sale totaled $85,000, compared to $794,000 at December 31, 2023.

Nonperforming loans and leases, consisting of nonaccrual loans and leases and accruing loans and leases 90 days or more past due, totaled $6.9 million, or 0.61% of total loans and leases at March 31, 2024, compared to $8.0 million or 0.72% of

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total loans and leases at December 31, 2023. Accruing loans and leases past due 90 days or more totaled $1.9 million at March 31, 2024, compared to $1.7 million at December 31, 2023.

Allowance for Credit Losses. The allowance for credit losses on loans and leases increased $162,000, or 1.0%, to $15.8 million at March 31, 2024 from December 31, 2023. At March 31, 2024, the allowance for credit losses on loans and leases totaled 1.39% of total loans and leases outstanding. At December 31, 2023, the allowance for credit losses on loans and leases totaled $15.7 million, or 1.42% of total loans and leases outstanding. Net charge-offs during the first quarter of 2024 were $324,000 compared to net recoveries of $78,000 during the comparable quarter of 2023.

Management regularly analyzes conditions within its geographic markets and evaluates its loan and lease portfolio. The Company evaluated its exposure to potential loan and lease losses as of March 31, 2024, which evaluation included consideration of a potential recession due to inflation, stock market volatility, and overall geopolitical tensions. Credit metrics are being reviewed and stress testing is being performed on the loan portfolio on an ongoing basis. For additional information on the allowance for credit losses, see "Allowance for Credit Losses on Loans and Leases" and "Economic Outlook" in "Note 4 Loans, Leases and Allowance" of the "Notes to Condensed Consolidated Financial Statements" in this report.

Other Assets. Other assets decreased $511,000, or 2.1%, to $24.3 million at March 31, 2024 from $24.8 million at December 31, 2023, primarily due to standard amortization of prepaid assets.

Deposits. Total deposits increased $28.5 million, or 2.7%, to $1.1 billion at March 31, 2024 from December 31, 2023. The increase in deposits primarily was due to an increase in brokered time deposits of $22.5 million and other time deposits of $11.1 million, partially offset by a decrease in demand deposit accounts of $3.9 million. Brokered deposits totaled $291.3 million, or 27.2% of total deposits, at March 31, 2024, compared to $268.8 million, or 25.8% of total deposits, at December 31, 2023. At March 31, 2024, noninterest-bearing deposits totaled $108.8 million, or 10.2% of total deposits, compared to $114.4 million or 11.0% of total deposits at December 31, 2023.

As of March 31, 2024, approximately $206.9 million of our deposit portfolio, or 19.3% of total deposits, excluding collateralized public deposits, was uninsured. The uninsured amounts are estimated based on the methodologies and assumptions used for First Bank Richmond's regulatory reporting requirements.

Borrowings. Total borrowings, consisting solely of FHLB advances, increased $2.0 million to $273.0 million at March 31, 2024, compared to $271.0 million at December 31, 2023, which together with the increase in deposits were used to fund loan growth.

Stockholders’ Equity. Stockholders’ equity totaled $132.4 million at March 31, 2024, a decrease of $2.5 million, or 1.8%, from December 31, 2023.  The decrease in stockholders' equity from year-end 2023 resulted from the repurchase of $1.1 million of Company common stock, an increase in Accumulated Other Comprehensive Loss ("AOCL") of $2.8 million, and the payment of $1.4 million in dividends to Company stockholders, partially offset by $2.4 million in net income. The increase in AOCL is primarily due to the decline in mark-to-market values associated with our available for sale investment securities portfolio. At December 31, 2023, the available for sale portfolio had a net unrealized loss of $54.5 million compared to a net unrealized loss of $58.1 million at March 31, 2024. The AOCL impact to equity, after tax affecting the unrealized loss, was $45.9 million at March 31, 2024 compared to $43.0 million at December 31, 2023. This decline in value from December 31, 2023 to March 31, 2024 was due to interest rate changes, not credit quality. The Company repurchased 92,613 shares of Company common stock at an average price of $11.58 per share for a total of $1.1 million during the first three months of 2024. The Company's equity to asset ratio was 8.90% at March 31, 2024. At March 31, 2024, the Bank's Tier 1 capital to total assets ratio was 10.67% and the Bank's capital was well in excess of all regulatory requirements.

Comparison of Results of Operations for the Three Months Ended March 31, 2024 and 2023.

General. Net income for the three months ended March 31, 2024 was $2.4 million, a $535,000 or 18.4% decrease from net income of $2.9 million for the three months ended March 31, 2023. Diluted earnings per share were $0.23 for the first quarter of 2024, compared to $0.27 diluted earnings per share for the first quarter of 2023. The decrease in net income was the result of a decrease in net interest income of $38,000, and an increase in noninterest expense of $696,000, partially offset by an increase in noninterest income of $32,000 and a decrease in the provision for income taxes of $180,000.

Interest Income.  Interest income increased $4.3 million, or 28.4%, to $19.5 million during the quarter ended March 31, 2024, compared to $15.2 million during the quarter ended March 31, 2023.  Interest income on loans and leases increased $4.1 million, or 30.8%, to $17.3 million for the quarter ended March 31, 2024, from $13.2 million for the comparable quarter in

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2023, due to an increase in the average balance of loans and leases of $141.4 million, and an increase of 77 basis points in the average yield earned on loans and leases.  The average outstanding loan and lease balance was $1.1 billion for the quarter ended March 31, 2024, compared to $984.2 million for the quarter ended March 31, 2023.  The average yield on loans and leases was 6.13% for the quarter ended March 31, 2024, compared to 5.36% for the comparable quarter in 2023.

Interest income on investment securities, excluding FHLB stock, was unchanged from the comparable quarter in 2023. The average yield on investment securities, excluding FHLB stock, was 2.53% for the first quarter of 2024, compared to 2.44% for the first quarter of 2023. The average balance of investment securities, excluding FHLB stock, was $284.0 million for the quarter ended March 31, 2024, compared to $294.9 million for the quarter ended March 31, 2023.

Dividends on FHLB stock increased $186,000, or 134.8%, during the quarter ended March 31, 2024, from the comparable quarter in 2023, resulting in an average yield on FHLB stock of 9.44% for the three months ended March 31, 2024, compared to 5.50% for the three months ended March 31, 2023. Interest income on cash and cash equivalents increased $73,000, or 112.4%, during the quarter ended March 31, 2024, from the comparable quarter in 2023, due to a 126 basis point increase in the average yield and a $4.3 million increase in the average balance of cash and cash equivalents.

Interest Expense. Interest expense increased $4.4 million, or 81.8%, to $9.7 million for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023.  Interest expense on deposits increased $3.0 million, or 75.5%, to $7.1 million for the quarter ended March 31, 2024, from the comparable quarter in 2023. The increase in interest expense on deposits primarily was attributable to a $44.3 million increase in the average balance of, and a 120 basis point increase in the average rate paid on interest-bearing deposits. The average rate paid on interest-bearing deposits was 2.99% for the quarter ended March 31, 2024, compared to 1.79% for the quarter ended March 31, 2023. The average balance of interest-bearing deposits was $945.2 million for the quarter ended March 31, 2024, compared to $900.9 million in the comparable quarter in 2023. Interest expense on FHLB borrowings increased $1.3 million, or 101.6%, to $2.6 million in the first quarter of 2024 compared to $1.3 million for the same quarter in 2023, primarily due to an increase in the average rate paid on FHLB borrowings. The average rate paid on FHLB borrowings was 3.77% for the quarter ended March 31, 2024, compared to 2.61% for the first quarter of 2023. The average balance of FHLB borrowings totaled $277.2 million during the quarter ended March 31, 2024, compared to $198.5 million for the quarter ended March 31, 2023.

Net Interest Income.  Net interest income before the provision for credit losses decreased $38,000, or 0.4%, to $9.8 million for the first quarter of 2024, compared to $9.9 million for the first quarter of 2023. This decrease was due to a 48 basis point decrease in the average interest rate spread, partially offset by a $138.4 million increase in average interest earning assets. Net interest margin (annualized) was 2.74% for the three months ended March 31, 2024, compared to 3.04% for the three months ended March 31, 2023. The decrease in net interest margin was primarily due to the rate paid on interest-bearing liabilities increasing faster than the yield on interest-earning assets.

During the first half of 2023, in response to continuing elevated inflation, the Federal Open Market Committee ("FOMC") of the Federal Reserve System increased the target range for the federal funds rate by 100 basis points, to a range of 5.25% to 5.50%. While net interest income benefited from the repricing impact of the higher interest rate environment on earning asset yields, the benefits were offset by the higher cost of interest-bearing deposit accounts and borrowings, which tend to be shorter in duration than our assets and re-price or reset faster than assets.

Average Balances, Interest and Average Yields/Cost.  The following table sets forth for the periods indicated, information regarding average balances of assets and liabilities as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities, resultant yields, interest rate spread, net interest margin (otherwise known as net yield on interest-earning assets), and the ratio of average interest-earning assets to average interest-bearing liabilities. Average balances have been calculated using daily balances. Non-accruing loans have been included in the table as loans carrying a zero yield. Loan fees are included in interest income on loans and are not material.

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	Three Months Ended March 31,
	2024							2023
	Average Balance Outstanding			Interest Earned/ Paid		Yield/ Rate		Average Balance Outstanding			Interest Earned/ Paid		Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Loans and leases receivable	$	1,125,586		$	17,251	6.13	%	$	984,202		$	13,193	5.36	%
Securities	284,002			1,796		2.53	%	294,947			1,796		2.44	%
FHLB stock	13,730			324		9.44	%	10,038			138		5.50	%
Cash and cash equivalents and other	13,848			139		4.02	%	9,565			66		2.76	%
Total interest-earning assets	1,437,166			19,510		5.43	%	1,298,752			15,193		4.68	%
Non-earning assets	42,052							44,264
Total assets	1,479,218							1,343,016
Interest-bearing liabilities:
Savings and money market accounts	259,198			1,379		2.13	%	279,510			996		1.43	%
Interest-bearing checking accounts	148,126			382		1.03	%	153,216			189		0.49	%
Certificate accounts	537,894			5,304		3.94	%	468,220			2,842		2.43	%
Borrowings	277,220			2,612		3.77	%	198,517			1,295		2.61	%
Total interest-bearing liabilities	1,222,438			9,677		3.17	%	1,099,463			5,322		1.94	%
Noninterest-bearing demand deposits	108,577							97,278
Other liabilities	14,676							14,004
Stockholders' equity	133,527							132,271
Total liabilities and stockholders' equity	1,479,218							1,343,016
Net interest income				$	9,833						$	9,871
Net earning assets	$	214,728						$	199,289
Net interest rate spread(1)						2.26	%						2.74	%
Net interest margin(2)						2.74	%						3.04	%
Average interest-earning assets to average interest-bearing liabilities	117.57		%					118.13		%

_____________

(1)Annualized.  Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(2)Annualized. Net interest margin represents net interest income divided by average total interest-earning assets.

Provision for Credit Losses. The provision for credit losses for the three months ended March 31, 2024 totaled $183,000, compared to $170,000 for the three months ended March 31, 2023, a $13,000 or 7.7% increase. Net charge-offs during the first quarter of 2024 were $324,000 compared to net recoveries of $78,000 in the first quarter of 2023. While we believe the steps we have taken and continue to take are necessary to effectively manage our portfolio, uncertainties relating to the level of our allowance for credit losses remain heightened as a result of continued concern about a potential recession due to inflation, stock market volatility, and overall geopolitical tensions.

Noninterest Income.  Noninterest income increased $32,000 or 2.9%, to $1.1 million for the quarter ended March 31, 2024, compared to the same quarter in 2023.  The increase in noninterest income resulted primarily from an increase in other income and loan and lease servicing fees, partially offset by decreases in net gains on loan and lease sales and service charges on deposit accounts. Other income increased $66,000, or 26.3%, to $319,000 for the quarter ended March 31, 2024, compared to $253,000 for the comparable quarter in 2023 due to increased wealth management income. Loan and lease servicing fees increased $7,000, or 6.0%, for the quarter ended March 31, 2024 compared to the comparable quarter in 2023. Net gains on loan and lease sales decreased $36,000, or 23.3%, compared to the same quarter in 2023, due to decreased mortgage banking activity. Service fees on deposit accounts decreased $8,000, or 2.9%, in the first quarter of 2024 from the comparable quarter in 2023.

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Noninterest Expense.  Noninterest expense increased $696,000, or 9.5%, to $8.1 million for the three months ended March 31, 2024, from $7.4 million for the same period in 2023. Salaries and employee benefits increased $332,000, or 7.8%, to $4.6 million for the quarter ended March 31, 2024, from $4.2 million for the same quarter in 2023. The increase in salaries and benefits was primarily due to increased employee benefits expense. Data processing fees increased $70,000, or 8.4%, to $907,000 in the first quarter of 2024 compared to the same quarter of 2023, primarily due to increased software and core provider expenses. Deposit insurance expense increased $235,000, or 139.9%, from the comparable quarter in 2023 primarily due to a change in the asset and deposit mix.

Income Tax Expense.  The provision for income taxes decreased $180,000 during the three months ended March 31, 2024, compared to the same period in 2023, due to a lower level of pre-tax income. The effective tax rate for the first quarter of 2024 was 12.9% compared to 15.5% for the same quarter a year ago. The decrease in the effective tax rate was a result of the use of a captive insurance company, which allows the Company to assume more control over insurance risks and resulted in a more tax-efficient structure.

Capital and Liquidity

Capital. Shareholders' equity totaled $132.4 million at March 31, 2024 and $134.9 million at December 31, 2023. In addition to net income of $2.4 million, other sources of capital during the first quarter of 2024 included $154,000 related to the allocation of ESOP shares and $367,000 related to stock-based compensation. Uses of capital during the first three months of 2024 included $2.8 million in AOCL, $1.4 million of dividends paid on common stock, and $1.1 million of stock repurchases. The increase in the AOCL component of shareholders' equity was caused by changes to the unrealized gains and losses on available for sale securities.

We paid a regular quarterly dividend of $0.14 per common share during the first quarter of 2024, and regular quarterly dividends of $0.14 per common share during 2023. We currently expect to continue our practice of paying regular quarterly cash dividends on common stock subject to the Board of Directors' discretion to modify or terminate this practice at any time and for any reason without prior notice. Assuming continued payment during 2024 at the current dividend rate of $0.14 per share, our average total dividend paid each quarter would be approximately $1.6 million based on the number of our currently outstanding shares at March 31, 2024.

Stock Repurchase Plans. From time to time, our board of directors has authorized stock repurchase plans. In general, stock-repurchase plans allow us to proactively manage our capital position and return excess capital to shareholders. Shares purchased under such plans also provide us with shares of common stock necessary to satisfy obligations related to stock compensation awards. On June 6, 2023, the Company announced that the Board of Directors approved an amendment to the Company's existing stock repurchase program authorizing the purchase of up to 321,386 shares of the Company's issued and outstanding common stock in addition to the 827,554 shares remaining available for repurchase at that date under the existing program, and extending the stock repurchase program's expiration date to June 6, 2024, unless completed sooner. As of March 31, 2024, the Company had approximately 775,423 shares available for repurchase under its existing stock repurchase program. The repurchase program does not obligate the Company to purchase any particular number of shares. See Part II, Item 2 - "Unregistered Sales of Equity Securities and Use of Proceeds."

Liquidity. Liquidity measures the ability to meet current and future cash flow needs as they become due. The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits and to take advantage of interest rate market opportunities. The ability of a financial institution to meet its current financial obligations is a function of its balance sheet structure, its ability to liquidate assets and its access to alternative sources of funds. The objective of our liquidity management is to manage cash flow and liquidity reserves so that they are adequate to fund our operations and to meet obligations and other commitments on a timely basis and at a reasonable cost. We seek to achieve this objective and ensure that funding needs are met by maintaining an appropriate level of liquid funds through asset/liability management, which includes managing the mix and time to maturity of financial assets and financial liabilities on our balance sheet. Our liquidity position is enhanced by our ability to raise additional funds as needed in the wholesale markets.

Asset liquidity is provided by liquid assets which are readily marketable or pledgeable or which will mature in the near future. Liquid assets generally include cash, interest-bearing deposits in banks, securities available for sale, maturities and cash flow from securities held to maturity, sales of fixed rate residential mortgage loans in the secondary market, and federal funds sold and resell agreements. Liability liquidity generally is provided by access to funding sources which include core deposits and advances from the FHLB and other borrowing relationships with third party financial institutions.

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Our liquidity position is continuously monitored and adjustments are made to the balance between sources and uses of funds as deemed appropriate. Liquidity risk management is an important element in our asset/liability management process. We regularly model liquidity stress scenarios to assess potential liquidity outflows or funding problems resulting from economic disruptions, volatility in the financial markets, unexpected credit events or other significant occurrences deemed problematic by management. These scenarios are incorporated into our contingency funding plan, which provides the basis for the identification of our liquidity needs.

Our liquid assets in the form of cash and cash equivalents and investments available for sale totaled $296.6 million at March 31, 2024. Certificates of deposit that are scheduled to mature in less than one year from March 31, 2024 totaled $325.4 million. Historically, the Bank has been able to retain a significant amount of its deposits as they mature.

As of March 31, 2024, we had approximately $8.1 million held in an interest-bearing account at the Federal Reserve. We also have the ability to borrow funds as a member of the FHLB. As of March 31, 2024, based upon available, pledgeable collateral, our total remaining borrowing capacity with the FHLB was approximately $91.3 million. Furthermore, at March 31, 2024, we had approximately $145.1 million in securities that were unencumbered by a pledge and could be used to support additional borrowings through repurchase agreements or the Federal Reserve discount window, as needed. As of March 31, 2024, management was not aware of any events that are reasonably likely to have a material adverse effect on our liquidity, capital resources or operations. In addition, management is not aware of any regulatory recommendations regarding liquidity that would have a material adverse effect on us.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities for the three months ended March 31, 2024 was $2.2 million, compared to $3.6 million provided by operating activities for the three months ended March 31, 2023. During the three months ended March 31, 2024, net cash used in investing activities was $30.2 million, which consisted primarily of a $31.7 million net change in loans receivable, compared to $27.9 million of cash used in investing activities for the three months ended March 31, 2023. Net cash provided by financing activities for the three months ended March 31, 2024 was $28.1 million, which was comprised primarily of a $28.5 million net change in deposits, compared to $25.7 million provided by financing activities during the three months ended March 31, 2023. Management believes the capital sources are adequate to meet all reasonably foreseeable short-term and long-term cash requirements and there has not been a material change in our liquidity and capital resources since the information disclosed in our 2023 Form 10-K other than set forth above.

Richmond Mutual Bancorporation is a separate legal entity from First Bank Richmond and must provide for its own liquidity. In addition to its own operating expenses, Richmond Mutual Bancorporation is responsible for paying for any stock repurchases, dividends declared to its stockholders and other general corporate expenses. Since Richmond Mutual Bancorporation is a holding company and does not conduct operations, its primary sources of liquidity are interest on investment securities purchased with proceeds from our initial public offering, dividends up-streamed from First Bank Richmond and borrowings from outside sources. Banking regulations may limit the amount of dividends that may be paid to us by First Bank Richmond. At March 31, 2024, Richmond Mutual Bancorporation, on an unconsolidated basis, had $10.1 million in cash, noninterest-bearing deposits and liquid investments generally available for its cash needs.

Regulatory Capital Requirements. First Bank Richmond is subject to minimum capital requirements imposed by the FDIC. The FDIC may require us to have additional capital above the specific regulatory levels if it believes we are subject to increased risk due to asset problems, high interest rate risk and other risks.  At March 31, 2024, First Bank Richmond’s regulatory capital exceeded the FDIC regulatory requirements, and First Bank Richmond was well-capitalized under regulatory prompt corrective action standards. Consistent with our goals to operate a sound and profitable organization, our policy is for First Bank Richmond to maintain well-capitalized status.

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	Actual				Minimum for Capital Adequacy Purposes				Categorized as "Well-Capitalized" Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
As of March 31, 2024
Total risk-based capital (to risk weighted assets)	$	177,662	14.1	%	$	100,494	8.0	%	$	125,617	10.0	%
Tier 1 risk-based capital (to risk weighted assets)	161,942		12.9		75,370		6.0		100,494		8.0
Common equity tier 1 capital (to risk weighted assets)	161,942		12.9		56,528		4.5		81,651		6.5
Tier 1 leverage (core) capital (to adjusted tangible assets)	161,942		10.7		60,726		4.0		75,908		5.0
As of December 31, 2023
Total risk-based capital (to risk weighted assets)	$	174,938	14.1	%	$	99,247	8.0	%	$	124,059	10.0	%
Tier 1 risk-based capital (to risk weighted assets)	159,409		12.8		74,435		6.0		99,247		8.0
Common equity tier 1 capital (to risk weighted assets)	159,409		12.8		55,826		4.5		80,638		6.5
Tier 1 leverage (core) capital (to adjusted tangible assets)	159,409		10.6		59,931		4.0		74,914		5.0

Pursuant to the capital regulations of the FDIC and the other federal banking agencies, First Bank Richmond must maintain a capital conservation buffer consisting of additional common equity tier 1 (“CET1”) capital greater than 2.5% of risk-weighted assets above the required minimum levels of risk-based CET1 capital, tier 1 capital and total capital in order to avoid limitations on paying dividends, repurchasing shares, and paying discretionary bonuses.  At March 31, 2024, the Bank’s CET1 capital exceeded the required capital conservation buffer.

For a bank holding company with less than $3.0 billion in assets, the capital guidelines apply on a bank only basis and the Federal Reserve Board expects the holding company’s subsidiary banks to be well capitalized under the prompt corrective action regulations.  If Richmond Mutual Bancorporation was subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets, at March 31, 2024, it would have exceeded all regulatory capital requirements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

There has not been any material change in the market risk disclosures contained in our 2023 Form 10-K.

ITEM 4.  CONTROLS AND PROCEDURES

(a)     Evaluation of Disclosure Controls and Procedures.

An evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Act”)) as of March 31, 2024, was carried out under the supervision and with the participation of our Chief Executive Officer (principal executive officer), Chief Financial Officer (principal financial officer) and several other members of senior management.  Our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures in effect as of March 31, 2024, were effective.

We do not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all errors and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by override of the control. The design of any control procedure also is

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based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

(b)    Changes in Internal Control Over Financial Reporting.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Act) that occurred during the three months ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at March 31, 2024, we were not involved in any legal proceedings the outcome of which would be material to our financial condition or results of operations.

ITEM 1A.  RISK FACTORS

There have been no material changes in the Risk Factors previously disclosed in Item 1A of the Company's 2023 Form 10-K.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)Not applicable

(b)Not applicable

(c)On June 6, 2023, the Company announced that the Board of Directors approved an amendment to the Company's existing stock repurchase program authorizing the purchase of up to 321,386 shares of the Company's issued and outstanding common stock in addition to the 827,554 shares remaining available for repurchase at that date under the existing program, and extending the stock repurchase program's expiration date to June 6, 2024, unless completed sooner. The following table sets forth information with respect to our repurchases of our outstanding common shares during the three months ended March 31, 2024:

	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs
January 1, 2024 - January 31, 2024	20,505	$	11.31	20,505	847,531
February 1, 2024 - February 28, 2024	22,419	11.22		22,419	825,112
March 1, 2024 - March 31, 2024	49,689	11.86		49,689	775,423
	92,613			92,613

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Nothing to report.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

(a) Nothing to report.

(b) Nothing to report.

(c) Trading Plans. During the three months ended March 31, 2024, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6.  EXHIBITS

Exhibit

3.1	Charter of Richmond Mutual Bancorporation, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (Commission File No. 333-230184))
3.2	Bylaws of Richmond Mutual Bancorporation, Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-1 (Commission File No. 333-230184))
4.0	Form of Common Stock Certificate of Richmond Mutual Bancorporation, Inc. (incorporated by reference to Exhibit 4.0 of the Company’s Registration Statement on Form S-1 (Commission File No. 333-230184))
10.1+	Form of Non-Qualified Deferred Compensation Plan for Garry Kleer (incorporated by reference to Exhibit 10.1 of the Company's Registration Statement on Form S-1 (Commission File No. 333-230184))
10.2+	Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan (included as Appendix A to the Registrant’s definitive proxy statement filed with the SEC on July 28, 2020 (File No. 001-38956) and incorporated herein by reference).
10.3+	Form of Incentive Stock Option Award Agreement under the 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Registration Statement on Form S-8 (Commission File No. 333-248862)).
10.4+	Form of Non-qualified Stock Option Award Agreement under the 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 of the Company’s Registration Statement on Form S-8 (Commission File No. 333-248862)).
10.5+	Form of Restricted Stock Award Agreement under the 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 of the Company’s Registration Statement on Form S-8 (Commission File No. 333-248862)).
31.1	Rule 13a-14(a) Certifications (Chief Executive Officer)
31.2	Rule 13a-14(a) Certifications (Chief Financial Officer)
32.0	Section 1350 Certifications
101.0	The following materials for the quarter ended March 31, 2024, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income, (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

+ Indicates management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	RICHMOND MUTUAL BANCORPORATION, INC.
Date: May 14, 2024	By:	/s/ Garry D. Kleer
		Garry D. Kleer
		Chairman, President and CEO
		(Duly Authorized Officer)
Date: May 14, 2024	By:	/s/ Bradley M. Glover
		Bradley M. Glover
		Senior Vice President and CFO
		(Principal Financial and Accounting Officer)

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