What changed in this filing

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Item 1A. Risk Factors

2026-03-23 compared with 2025-03-27 · 65 added, 57 removed, 255 unchanged (32% of the section changed)

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Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans.

Adverse economic conditions in our market areas could impact our growth rate, reduce our customers' ability to repay loans, and adversely impact our business, financial condition, and results of operations.

Broader economic factors such as inflation, unemployment, and money supply fluctuations also may adversely affect our profitability.

Trade wars, tariffs, or shifts in trade policies between the United States and other nations could disrupt supply chains, increase costs for businesses, and reduce export opportunities for our customers.

These developments may, in turn, negatively impact these businesses and, by extension, our financial condition and results of operations.

A deterioration in economic conditions in the market areas we serve, be it due to inflation, a recession, war, geopolitical conflicts, adverse weather conditions, or other factors could result in the following consequences, any of which could have a materially adverse effect on our business, financial condition, or results of operations:

• Reduced demand for our products and services, potentially leading to a decline in our overall loans or assets;

Adverse economic conditions in our market areas, including declining employment, reduced consumer spending, business failures, or adverse weather events, could adversely affect our growth, customers’ ability to repay loans, and, consequently, our business, financial condition, and results of operations.

Economic conditions in our market area are influenced by broad macroeconomic and policy factors, including inflation or deflation, changes in monetary policy, interest rate volatility, fiscal and trade policies, geopolitical conflicts, market instability, supply-chain disruptions, and adverse weather events.

Although inflation has moderated, many borrowers continue to face higher operating costs, including increased costs of materials, goods, and labor.

Changes in monetary policy may also affect borrowing behavior, asset values, and credit performance.

Trade disputes, tariffs, and shifts in global supply chains may further increase costs for certain commercial borrowers, particularly those dependent on construction materials, raw materials, component parts, or exports.

A deterioration in economic conditions in the market areas we serve, whether due to recessionary conditions, inflation or deflation, interest rate volatility, geopolitical conflicts, market instability, adverse weather events, or other factors could have a materially adverse effect on our business, financial condition, or results of operations.

Any of these conditions could lead to:

• Reduced demand for our products and services, potentially leading to lower loan originations, deposits, and other revenues;

• Elevated instances of loan delinquencies, problematic assets, and foreclosures;

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• Reduced net worth and liquidity of loan guarantors, possibly impairing their ability to meet commitments to us.

A decline in local economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are geographically diverse.

Many of the loans in our portfolio are secured by real estate.

Real estate values are affected by various factors, including economic conditions, governmental rules or policies, natural disasters such as earthquakes, and trade-related pressures that may affect construction costs or materials availability.

Real estate values are affected by various factors, including economic conditions, governmental rules or policies, natural disasters, and trade-related pressures that may affect construction costs or availability of materials.

If we are required to liquidate a significant amount of collateral during a period of reduced real estate values, our financial condition and profitability could be adversely affected.

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Furthermore, fluctuations in interest rates may adversely affect the valuation of our assets and liabilities, ultimately affecting our earnings.

Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations.

Our financial condition and results of operations are affected by credit policies of monetary authorities, particularly the Board of Governors of the Federal Reserve System, or the Federal Reserve.

Actions by monetary and fiscal authorities, including the Federal Reserve, could lead to inflation, deflation, or other economic phenomena that could adversely affect our financial performance.

tariffs on imported goods could exacerbate inflationary pressures by increasing the cost of goods and materials for businesses and consumers.

This may particularly affect small to medium-sized businesses, as they are less able to leverage economies of scale to mitigate cost pressures compared to larger businesses.

Consequently, our business clients may experience increased financial strain, reducing their ability to repay loans and adversely impacting our results of operations and financial condition.

Furthermore, a prolonged period of inflation could cause wages and other costs to us to increase, which could adversely affect our results of operations and financial condition.

Virtually all our assets and liabilities are monetary in nature and, as a result, market interest rates tend to have a more significant impact on our performance than general levels of inflation or deflation.

However, interest rates do not necessarily move in the same direction or magnitude as the prices of goods and services, creating additional uncertainty in the economic environment.

Risks Related to the Proposed Merger with The Farmers Bancorp, Frankfort, Indiana

The completion of the merger with The Farmers Bancorp, Frankfort Indiana (“Farmers Bancorp”) is subject to numerous risks and uncertainties that could materially affect our business, financial condition, results of operations, and stock price.

We have entered into a definitive agreement pursuant to which Farmers Bancorp will be merged with and into Richmond Mutual Bancorporation, with Richmond Mutual Bancorporation as the surviving entity.

Promptly thereafter, Farmers Bancorp’s wholly owned bank subsidiary, The Farmers Bank, will be merged with and into First Bank Richmond, the wholly owned bank subsidiary of Richmond Mutual Bancorporation, with First Bank Richmond as the surviving bank.

These transactions (collectively, the “merger”), if completed, will substantially increase the size of the Company.

Successfully integrating the operations, technologies, systems, personnel, and corporate cultures of the two companies may be complex, time-consuming, and costly.

We may not achieve any or all of the anticipated strategic, operational, or financial benefits of the merger, including projected cost savings and revenue synergies.

Disruptions related to integration could result in delays, inefficiencies, or the loss of key personnel, customers, or suppliers, any of which could adversely affect our business.

The merger also involves significant financial and accounting risks.

The transaction requires valuation of acquired assets and liabilities, recognition of goodwill and other intangible assets, and may result in increased balance sheet complexity.

Future impairment of goodwill, if any, or intangible assets could adversely affect our results of operations.

Changes in our capital structure or increased leverage resulting from the transaction could also affect our liquidity, financial condition, and ability to access capital.

Completion of the merger is subject to regulatory approvals and other conditions.

Failure to obtain or delays in obtaining such approvals could prevent or delay the merger or require us to comply with conditions that could adversely affect the combined company.

Litigation or claims arising in connection with the merger could also result in unanticipated costs or obligations.

Market and business conditions following the merger may differ from expectations, and the combined company may face increased competition or changes in customer, supplier, or employee relationships.

The anticipated benefits of the merger, including cost savings and revenue synergies, may not be realized in full or within the expected timeframe.

These factors, individually or in combination, could have a material adverse effect on our business, financial condition, results of operations, and stock price.

Risks Related to Our Business

We have a substantial portfolio of commercial and multi-family real estate, as well as commercial and industrial loans, and intend to continue increasing originations of these loan types.

We have a substantial portfolio of commercial and multi-family real estate, as well as commercial and industrial loans, and we intend to continue increasing originations of these loan types.

These loans carry credit risks that could adversely affect our financial condition and results of operations.

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Consequently, an adverse development related to a single commercial loan or credit relationship poses a significantly greater risk of loss compared to one-to-four family residential mortgage loans.

Repayment of commercial loans often depends on the cash flow generated by the business or property involved, making them more sensitive to adverse conditions in the real estate market, business climate, or economy.

For loans secured by non-owner-occupied properties, repayments rely heavily on tenant rent payments, and downturns in the real estate market or economic conditions heighten repayment risks.

For loans secured by non-owner-occupied properties, repayments rely heavily on tenant rent payments, and softening real estate conditions or weaker economic activity heighten repayment risks.

In addition, many of our commercial real estate loans are not fully amortizing and require large balloon payments upon maturity, which may necessitate the borrower to sell or refinance the property, increasing the risk of default.

Commercial business loans typically are made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower.

Commercial and industrial loans typically are made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower.

A borrower's cash flow can be unpredictable, and collateral securing these loans may fluctuate in value.

For loans secured by accounts receivable, repayment is often dependent on the borrower's ability to collect from clients, while other forms of collateral may be difficult to appraise, illiquid, or affected by business success.

Increases in reserves and charge-offs related to our commercial and industrial loan portfolio could materially impact our business, financial condition, operations, and prospects.

In recent years, the commercial real estate market has experienced substantial growth, with increased competition contributing to historically low capitalization rates and rising property values.

However, the economic disruption caused by the COVID-19 pandemic significantly impacted this market.

The pandemic also accelerated the adoption of remote work, which has led many companies to re-evaluate their long-term real estate needs.

While some businesses are returning to traditional office environments, others are downsizing or shifting to hybrid models, creating uncertainty in demand for office spaces and other commercial properties.

This trend could result in prolonged vacancies, declining rental income, and reduced property values, adversely affecting the performance of our commercial real estate loan portfolio.

Federal banking regulators also have raised concerns about weaknesses in the commercial real estate market.

For loans secured by accounts receivable, repayment often depends on the borrower's ability to collect from clients, while other forms of collateral may be difficult to appraise, illiquid, or subject to risks tied to the borrower's operating performance.

Increases in reserves and charge-offs related to our commercial and industrial loan portfolio could materially impact our business, financial condition, operating results, and prospects.

In recent years, the commercial real estate market has experienced periods of stabilization, and selective improvement in certain property types and markets have occurred;

however, many segments, particularly office and other properties sensitive to broader economic trends, continue to experience pressure.

Elevated interest rates and shifts in market demand have contributed to elevated vacancies, reduced rental income, and continued valuation risk.

These trends could adversely affect the performance of our commercial real estate loan portfolio and may prompt regulatory scrutiny or heightened supervisory expectations.

Failures in our risk management policies and controls could lead to higher delinquencies and losses, adversely affecting our business, financial condition, and results of operations.

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As of December 31, 2025, our construction and development loans totaled $71.7 million, accounting for approximately 6.0% of our total loan portfolio.

This comprises $126.2 million in commercial construction loans and $6.3 million in residential real estate construction loans, reflecting a substantial increase from the $58.4 million, constituting 7.8% of total loans, reported at December 31, 2020.

This portfolio is comprised of $65.2 million in commercial construction loans and $6.5 million in residential real estate construction loans, reflecting a substantial increase from the $58.4 million, constituting 7.8% of total loans, reported at December 31, 2020.

Engaging in construction lending inherently carries higher credit risk compared to long-term financing for improved, owner-occupied real estate.

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Loans associated with undeveloped land or future construction also present added risks due to the lack of income generation from the property and its potential illiquid nature as collateral.

Furthermore, various risks, such as fraudulent

diversion of construction funds, mechanics' liens filed by contractors, subcontractors, or suppliers, and potential contractor failures in completing projects, contribute to the complexity and uncertainties associated with construction and development loans.

Furthermore, various risks, such as fraudulent diversion of construction funds, mechanics' liens filed by contractors, subcontractors, or suppliers, and potential contractor

failures in completing projects, contribute to the complexity and uncertainties associated with construction and development loans.

Our portfolio of loans with a higher risk of loss is increasing and the unseasoned nature of such loans could lead to misjudgments in collectability, triggering additional provisions or charge-offs, impacting our profits.

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As a result, we cannot assure you that our profitability or the demand for our leasing services from our customers will be maintained at historical levels.

Moreover, approximately $51.1 million or 34.4% of our total lease portfolio is to customers located in California, New York, Florida, and Arkansas.

Moreover, approximately $55.1 million or 37.7% of our total lease portfolio is to customers located in California, New York, Florida, and Texas.

Adverse economic conditions within these market areas may reduce our leasing volume and affect

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Inadequate reporting of credit quality changes could also result in non-compliance with regulatory requirements, potentially leading to regulatory scrutiny, fines, or other enforcement actions.

Moreover, delays or inaccuracies in credit updates could damage our reputation, eroding investor and stakeholder confidence in our risk management practices.

Moreover, delays or inaccuracies in credit updates could damage our reputation, eroding investor and customer confidence in our risk management practices.

Failure to properly assess and disclose risks associated with loan participations may further expose us to legal liabilities, including litigation from investors or regulatory agencies alleging mismanagement or inadequate disclosures.

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Management evaluates securities for impairment on a quarterly basis, with more frequent evaluation for selected issues.

In analyzing a debt issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, industry analysts’ reports and, to a lesser extent given the relatively insignificant levels of depreciation in our debt portfolio, spread differentials between the effective rates on instruments in the portfolio compared to risk-free rates.

In analyzing a debt issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, industry analysts’ reports, and spread differentials between the effective rates on instruments in the portfolio compared to risk-free rates.

In analyzing an equity issuer’s financial condition, management considers industry analysts’ reports, financial performance and projected target prices of investment analysts within a one-year time frame.

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At December 31, 2025, the book value of our MSRs was $1.9 million.

We use a financial model that uses, wherever possible, quoted market prices to value our MSRs.

We utilize a financial model that uses, wherever possible, quoted market prices to value our MSRs.

This model is complex and also uses assumptions related to interest and discount rates, prepayment speeds, delinquency and foreclosure rates and ancillary fee income.

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The FHLB of Indianapolis’ financial condition is linked, in part, to the eleven other members of the FHLB System and to accounting rules and asset quality risks that could materially lower their capital, which would cause our FHLB of Indianapolis stock to be deemed impaired, resulting in a decrease in our earnings and assets.

Our size makes it more difficult for us to compete.

Our asset size makes it more difficult to compete with other financial institutions that are larger and can more easily afford to invest in the marketing and technologies needed to attract and retain customers.

Our size makes it difficult for us to compete.

Our asset size makes it difficult to compete with other financial institutions that are larger and can more easily afford to invest in the marketing and technologies needed to attract and retain customers.

Because our principal source of income is the net interest income we earn on our loans and investments after deducting interest paid on deposits and other sources of funds, our ability to generate the revenues needed to cover our expenses and finance such investments is limited by the size of our loan and investment portfolios.

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Insurance coverage may not be available for such losses, or where available, such losses may exceed insurance limits.

This risk of loss also includes the potential legal actions that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards or customer attrition due to potential negative publicity.

This risk of loss also includes the potential for legal actions that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards or customer attrition due to potential negative publicity.

In the event of a breakdown in our internal control systems, improper operation of systems or improper employee actions, or a breach of our security systems, including if confidential or proprietary information were to be mishandled, misused or lost, we could suffer financial loss, face regulatory action, civil litigation and/or suffer damage to our reputation.

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These threats can stem from multiple sources, ranging from human errors to deliberate acts of malice from internal or external parties, or even unforeseen technological failures.

Despite our proactive measures, including encryption, authentication technologies, and extensive education initiatives for both employees and customers, the expanding use of cloud services and remote work technologies exposes us to heightened vulnerability to cyber-attacks.

The expanding use of cloud services and remote work technologies exposes us to heightened vulnerability to cyber-attacks.

The risk associated with security breaches or disruptions, especially those stemming from cyber-attacks, has become more pronounced due to the increasing sophistication and frequency of global intrusion attempts.

Despite our continuous efforts to maintain the security and integrity of our information systems and implement robust risk management strategies, there's an inherent challenge.

Despite our continuous efforts to maintain the security and integrity of our information systems and implement robust risk management strategies, there is an inherent challenge.

Cyber-attacks often evolve at a pace that makes it difficult to proactively anticipate and mitigate them effectively.

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In doing so, there is a risk that hazardous or toxic substances could be found on these properties.

If hazardous conditions or toxic substances are found on these properties, we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property.

If hazardous conditions or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property.

Environmental laws may require us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell the affected property.

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Regulatory bodies periodically issue new guidance, altering accounting rules and reporting requirements, which can substantially affect the preparation and reporting of our financial statements.

These changes might necessitate retrospective application, potentially leading to restatements of prior period financial statements.

One such significant change in 2023 was the implementation of the Current Expected Credit Losses (“CECL”) model, which we adopted on January 1, 2023.

Under the CECL model, financial assets carried at amortized cost, such as loans and held-to-maturity debt securities, will be presented at the net amount expected to be collected.

These changes may necessitate retrospective application, potentially leading to restatements of prior period financial statements.

One such recent significant change was the implementation of the Current Expected Credit Losses (“CECL”) model, which we adopted on January 1, 2023.

Under the CECL model, financial assets carried at amortized cost, such as loans and held-to-maturity debt securities, are presented at the net amount expected to be collected.

This forward-looking approach in estimating expected credit losses contrasts starkly with the former GAAP's "incurred loss" model, delaying recognition until a loss is probable.

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An additional consequence of CECL is an accounting asymmetry between loan-related income, recognized periodically based on the effective interest method, and credit losses, recognized upfront at origination.

This asymmetry might create the perception of reduced profitability during loan expansion periods due to the immediate recognition of expected credit

This asymmetry might create the perception of reduced profitability during loan expansion periods due to the immediate recognition of expected credit losses.

Conversely, periods with stable or declining loan levels might seem relatively more profitable as income accrues gradually for loans where losses had been previously recognized.

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The effects of climate change continue to raise significant concerns about the state of the environment.

However, under the new Trump administration, federal policy may shift to reduce the emphasis on climate change initiatives and environmental regulations.

This could include scaling back federal participation in international agreements, such as the Paris Agreement, and reducing regulatory pressures on businesses, including banks, to address climate-related risks.

Legislative and regulatory proposals aimed at combating climate change may face greater scrutiny or diminished priority.

Federal and state policy approaches to climate change continue to evolve, and changes in legislative or regulatory priorities could alter the requirements and expectations placed on businesses, including banks, to address climate-related risks.

The lack of empirical data regarding the financial and credit risks posed by climate change makes it difficult to predict its specific impact on our financial condition and results of operations.

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If we cannot raise additional capital when needed, or if the terms of such a capital raise are not advantageous, it may have a material adverse effect on our financial condition, results of operations and prospects.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.

Investor advocacy groups, investment funds, and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights.

Increased ESG-related compliance costs could result in increases to our overall operational costs.

Scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

In recent years, companies have faced scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.

Investor advocacy groups, investment funds, and influential investors are also focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights.

ESG-related compliance costs could result in increases to our overall operational costs.

Failure to adapt to or comply with regulatory requirements, or investor or stakeholder expectations and standards, could negatively impact our reputation, ability to do business with certain partners, and our stock price.

Recent changes in the regulatory landscape under the new administration have moved toward a reduction in emphasis on certain ESG priorities, particularly around climate change and diversity, equity, and inclusion ("DEI").

This shift is leading to the rollback of regulations that mandate specific disclosures and operational practices in these areas.

Recent changes in the regulatory landscape and shifting federal priorities have moved toward a reduction in emphasis on certain ESG priorities, particularly around climate change and diversity, equity, and inclusion ("DEI").

This shift has led to a rollback of regulations that mandate specific disclosures and operational practices in these areas.

However, some stakeholder groups continue to demand greater transparency and action, resulting in a complex and potentially conflicting environment for companies.

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Our board of directors is authorized to allow us to issue additional common stock, as well as classes or series of preferred stock, generally without any action on the part of the stockholders.

In addition, the board has the power, generally without stockholder approval, to set the terms of any such classes or series of preferred stock that may be issued, including voting rights, dividend rights and preferences over the common stock with respect to dividends or upon the liquidation, dissolution or winding-up of our business and other terms.

In addition, the board has the power, generally without stockholder approval, to set the terms of any such classes or series of preferred stock that may be issued, including

voting rights, dividend rights and preferences over the common stock with respect to dividends or upon the liquidation, dissolution or winding-up of our business and other terms.

If we issue preferred stock in the future that has a preference over the common stock with respect to the payment of dividends or upon liquidation, dissolution or winding-up, or if we issue preferred stock with voting rights that dilute the voting power of the common stock, the rights of holders of the common stock or the market value of the common stock could be adversely affected.

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The declaration and payment of future cash dividends will be subject to, among other things, regulatory restrictions, our then current and projected consolidated operating results, financial condition, tax considerations, future growth plans, general economic conditions, and other factors our board of directors deems relevant.

Richmond Mutual Bancorporation will depend primarily upon the proceeds it retained from the initial public offering as well as earnings of First Bank Richmond to provide funds to pay dividends on our common stock.

Richmond Mutual Bancorporation depends primarily upon the proceeds it retained from its initial public offering as well as earnings of First Bank Richmond to provide funds to pay dividends on our common stock.

The payment of dividends by First Bank Richmond is also subject to certain regulatory restrictions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors