What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-13 · 199 added, 85 removed, 757 unchanged (27% of the section changed)

30 unchanged sentences

Authorized - 90,000,000 shares

Issued and outstanding - 12,310,004 shares and 12,400,195 shares at March 31, 2022 and December 31, 2021, respectively

Issued and outstanding - 11,848,113 shares and 12,400,195 shares at June 30, 2022 and December 31, 2021, respectively

118,481 124,002

8 unchanged sentences

Condensed Consolidated Statements of Income

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Interest Income

14 unchanged sentences

Loan and lease servicing fees 178,071 248,738 205,939 143,288

Net gains on securities (includes $ 0 , $ 37,912 , $ 0 , and $ 37,912 , respectively, related to accumulated other comprehensive income reclassifications)

— 37,912 — 37,912

Net gains on loan and lease sales 221,778 569,411 464,764 1,534,228

24 unchanged sentences

Richmond Mutual Bancorporation, Inc.

Condensed Consolidated Statements of Comprehensive Loss

Condensed Consolidated Statements of Comprehensive (Loss) Income

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net Income $ 3,485,342 $ 2,781,347 $ 6,502,934 $ 5,343,833

Other Comprehensive Loss

Unrealized loss on available-for-sale securities, net of tax benefit of $ 6,412,910 , and $ 972,966 , respectively.

Other Comprehensive (Loss) Income

Unrealized (loss) gain on available-for-sale securities, net of tax (benefit) expense of $( 3,695,140 ), $ 437,111 , $( 10,108,049 ), and $( 535,855 ), respectively.

( 13,900,763 ) 1,644,369 ( 38,025,519 ) ( 2,015,837 )

reclassification adjustment for realized gains included in net income, net of tax expense of $ 0 , $ 7,962 , $ 0 , and $ 7,962 , respectively.

— 29,950 — 29,950

Comprehensive Loss $ ( 21,107,164 ) $ ( 1,097,720 )

( 13,900,763 ) 1,614,419 ( 38,025,519 ) ( 2,045,787 )

Comprehensive (Loss) Income $ ( 10,415,421 ) $ 4,395,766 $ ( 31,522,585 ) $ 3,298,046

See Notes to Condensed Consolidated Statements.

1 unchanged sentence

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended June 30, 2022

Common Stock Additional

4 unchanged sentences

Outstanding Amount

Balances, March 31, 2022 12,310,004 $ 123,100 $ 113,263,417 $ 82,037,495 $ ( 12,744,530 ) $ ( 25,336,767 ) $ 157,342,715

Net income — — — 3,485,342 — — 3,485,342

Other comprehensive loss — — — — — ( 13,900,763 ) ( 13,900,763 )

ESOP shares earned — — 23,775 — 183,829 — 207,604

Stock based compensation — — 383,637 — — — 383,637

Common stock dividends ($ 0.10 per share)

— — — ( 1,099,243 ) — — ( 1,099,243 )

Repurchase of common stock ( 461,891 ) ( 4,619 ) ( 7,469,917 ) — — — ( 7,474,536 )

Balances, June 30, 2022 11,848,113 $ 118,481 $ 106,200,912 $ 84,423,594 $ ( 12,560,701 ) $ ( 39,237,530 ) $ 138,944,756

Six Months Ended June 30, 2022

Common Stock Additional

Capital Retained

Earnings Unearned

Shares Accumulated

Comprehensive

Outstanding Amount

Balances, December 31, 2021 12,400,195 $ 124,002 $ 114,339,810 $ 80,157,893 $ ( 12,928,359 ) $ ( 1,212,011 ) $ 180,481,335

6 unchanged sentences

Repurchase of common stock ( 552,082 ) ( 5,521 ) ( 8,968,023 ) — — — ( 8,973,544 )

Balances, June 30, 2022 11,848,113 $ 118,481 $ 106,200,912 $ 84,423,594 $ ( 12,560,701 ) $ ( 39,237,530 ) $ 138,944,756

Three Months Ended June 30, 2021

Common Stock Additional

Capital Retained

Earnings Unearned

Shares Accumulated

Comprehensive

Outstanding Amount

Balances, March 31, 2021 13,050,996 $ 130,510 $ 122,814,920 $ 80,005,652 $ ( 13,479,847 ) $ 48,399 $ 189,519,634

Net income — — — 2,781,347 — — 2,781,347

Other comprehensive income — — — — — 1,614,419 1,614,419

ESOP shares earned — — 6,978 — 183,830 — 190,808

Granting of restricted stock awards 4,000 40 ( 40 ) — — — —

Stock based compensation — — 527,759 — — — 527,759

Common stock dividends ($ 0.57 per share)

— — — ( 6,829,864 ) — — ( 6,829,864 )

Repurchase of common stock ( 370,019 ) ( 3,700 ) ( 5,231,093 ) — — — ( 5,234,793 )

Balances, June 30, 2021 12,684,977 $ 126,850 $ 118,118,524 $ 75,957,135 $ ( 13,296,017 ) $ 1,662,818 $ 182,569,310

Six Months Ended June 30, 2021

Common Stock Additional

8 unchanged sentences

ESOP shares earned — — 5,158 — 368,356 — 373,514

Granting of restricted stock awards 4,000 40 ( 40 ) — — — —

Stock based compensation — — 1,035,383 — — — 1,035,383

2 unchanged sentences

Repurchase of common stock ( 512,783 ) ( 5,128 ) ( 7,168,402 ) — — — ( 7,173,530 )

Balances, March 31, 2021 13,050,996 $ 130,510 $ 122,814,920 $ 80,005,652 $ ( 13,479,847 ) $ 48,399 $ 189,519,634

Balances, June 30, 2021 12,684,977 $ 126,850 $ 118,118,524 $ 75,957,135 $ ( 13,296,017 ) $ 1,662,818 $ 182,569,310

See Notes to Condensed Consolidated Statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

6 unchanged sentences

Investment securities amortization, net 848,253 1,373,219

Investment securities gains — ( 37,912 )

Net gains on loan and lease sales ( 464,764 ) ( 1,534,228 )

15 unchanged sentences

Proceeds from maturities and paydowns of securities available for sale 20,866,136 34,166,612

Proceeds from sales of securities available for sale — 3,980,632

Proceeds from maturities and paydowns of securities held to maturity 891,488 2,365,016

25 unchanged sentences

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 and FB Richmond Holdings, 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 and FB Richmond Holdings, Inc., unless the context otherwise requires.

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 IDFI and the 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.

9 unchanged sentences

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.

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.

7 unchanged sentences

As a result of the spread of COVID-19, economic uncertainties arose which can ultimately affect the financial position, results of operations and cash flows of the Company, as well as the Company's customers.

In response to economic concerns over COVID-19, in March 2020, the Coronavirus Aid, Relief, and Economic

Security Act ("CARES Act") was passed into law by the U.S.

In response to economic concerns over COVID-19, in March 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was passed into law by the U.S.

The CARES Act included relief for individual Americans, health care workers, small businesses and certain industries hit hard by the COVID-19 pandemic.

3 unchanged sentences

The Company has taken advantage of this provision to extend certain payment modifications to loan customers in need.

As of March 31, 2022 the Company had no loans outstanding that were modified under the CARES Act guidance.

As of June 30, 2022 the Company had no loans outstanding that were modified under the CARES Act guidance.

The CARES Act also approved the Paycheck Protection Program ("PPP"), administered by the Small Business Administration ("SBA") with funding provided by financial institutions.

3 unchanged sentences

The Company earns a 1% interest rate on PPP loans, plus a processing fee from the SBA for processing and originating a loan.

The Company originated approximately $ 38.2 million in PPP loans during 2021, of which approximately $ 6.0 million were outstanding at March 31, 2022.

The Company originated $ 38.2 million in PPP loans during 2021, of which $ 3.7 million were outstanding at June 30, 2022.

The Jumpstart Our Business Startups Act (the "JOBS Act"), enacted in April 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets.

8 unchanged sentences

Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.

Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses.

Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit

Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances.

51 unchanged sentences

This ASU contains some technical adjustments related to the fair value disclosure requirements of public companies.

Included in this ASU is the additional disclosure requirement of unrealized gains and losses for the period in recurring level 3 fair value disclosures and the range and weighted average of significant unobservable inputs, among other technical changes.

Included in this ASU is the additional disclosure requirement of unrealized

gains and losses for the period in recurring level 3 fair value disclosures and the range and weighted average of significant unobservable inputs, among other technical changes.

The Company adopted ASU No.

14 unchanged sentences

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

March 31, 2022

June 30, 2022

Available for sale

treasury securities $ 395 $ — $ — $ 395

SBA Pools 7,636 4 456 7,184

21 unchanged sentences

Total investment securities $ 368,113 $ 3,151 $ 4,540 $ 366,724

The amortized cost and fair value of securities at March 31, 2022, by contractual maturity, are shown below.

The amortized cost and fair value of securities at June 30, 2022, 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.

8 unchanged sentences

Totals $ 352,299 $ 302,632 $ 8,144 $ 8,142

Securities with a carrying value of $ 120,074,000 and $ 136,463,000 were pledged at March 31, 2022 and December 31, 2021, 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, 2022 and 2021.

Securities with a carrying value of $ 125,890,000 and $ 136,463,000 were pledged at June 30, 2022 and December 31, 2021, 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 and six months ended June 30, 2022.

Proceeds from sales of securities available for sale for both the three and six months ended June 30, 2021 were $ 3,981,000 .

Gross gains were recognized on the sale of securities available-for-sale for the three and six months ended June 30, 2021 of $ 38,000 .

There were no gross losses recognized on the sale of securities available for sale for the three and six months ended June 30, 2021.

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, 2022 and December 31, 2021 was $ 315,723,000 and $ 223,842,000 , respectively, which is approximately 94 % and 61 % of the Company’s aggregated available-for-sale and held-to-maturity investment portfolio at those dates, respectively.

Total fair value of these investments at June 30, 2022 and December 31, 2021 was $ 297,776,000 and $ 223,842,000 , respectively, which is approximately 96 % and 61 % 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.

1 unchanged sentence

Should the impairment of any other securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following tables show the Company’s investments 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, 2022 and December 31, 2021:

Description of

Securities March 31, 2022

Securities June 30, 2022

Less Than 12 Months 12 Months or More Total

32 unchanged sentences

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.

Because 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, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2022.

SBA Pools and Mortgage-Backed Securities - GSE Residential .

1 unchanged sentence

The Company expects to recover the amortized cost basis over the term of the securities.

Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because 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, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2022.

State, Municipal, and Corporate Obligations.

1 unchanged sentence

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.

Because 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, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2022.

Loans, Leases and Allowance

The following table shows the composition of the loan and lease portfolio at March 31, 2022 and December 31, 2021:

The following table shows the composition of the loan and lease portfolio at June 30, 2022 and December 31, 2021:

2022 December 31,

11 unchanged sentences

$ 891,877 $ 832,846

The following tables present the activity in the allowance for loan and lease losses for the three months ended March 31, 2022 and 2021:

The following tables present the activity in the allowance for loan and lease losses for the three and six months ended June 30, 2022 and 2021:

Balance, beginning of period Provision (credit) for losses Charge-offs Recoveries Balance, end of period

Three Months Ended March 31, 2022:

Three Months Ended June 30, 2022:

Commercial mortgage $ 4,730 $ 40 $ — $ 34 $ 4,804

7 unchanged sentences

Total $ 12,317 $ 200 $ ( 219 ) $ 83 $ 12,381

Six Months Ended June 30, 2022:

Commercial mortgage $ 4,742 $ 21 $ — $ 41 $ 4,804

Commercial and industrial 1,639 ( 172 ) — 37 1,504

Construction and development 2,286 137 — — 2,423

Multi-family 1,875 171 — — 2,046

Residential mortgage 263 ( 86 ) — 19 196

Home equity 29 5 — — 34

Leases 1,079 241 ( 199 ) 18 1,139

Consumer 195 83 ( 54 ) 11 235

Total $ 12,108 $ 400 $ ( 253 ) $ 126 $ 12,381

Balance, beginning of period Provision (credit) for losses Charge-offs Recoveries Balance, end of period

Three Months Ended March 31, 2021:

Three Months Ended June 30, 2021:

Commercial mortgage $ 4,426 $ 160 $ — $ 6 $ 4,592

7 unchanged sentences

Total $ 10,959 $ 530 $ ( 238 ) $ 180 $ 11,431

The following tables present the balance in the allowance for loan and lease losses and the recorded investment in loans and leases based on portfolio segment and impairment method as of March 31, 2022 and December 31, 2021:

Six Months Ended June 30, 2021:

Commercial mortgage $ 4,628 $ ( 48 ) $ — $ 12 $ 4,592

Commercial and industrial 2,270 ( 366 ) ( 3 ) 49 1,950

Construction and development 1,068 866 — — 1,934

Multi-family 1,039 314 — — 1,353

Residential mortgage 324 ( 12 ) — 57 369

Home equity 18 5 — — 23

Leases 1,054 145 ( 365 ) 179 1,013

Consumer 185 26 ( 75 ) 61 197

Total $ 10,586 $ 930 $ ( 443 ) $ 358 $ 11,431

Allowance for loan and lease losses:

Loans and leases:

Individually evaluated for impairment Collectively evaluated for impairment Balance, March 31 Individually evaluated for impairment Collectively evaluated for impairment Balance, March 31

As of March 31, 2022:

Individually evaluated for impairment Collectively evaluated for impairment Balance Individually evaluated for impairment Collectively evaluated for impairment Balance

As of June 30, 2022:

Commercial mortgage $ — $ 4,804 $ 4,804 $ — $ 278,490 $ 278,490

9 unchanged sentences

Loans and leases:

Individually evaluated for impairment Collectively evaluated for impairment Balance, December 31 Individually evaluated for impairment Collectively evaluated for impairment Balance, December 31

Individually evaluated for impairment Collectively evaluated for impairment Balance Individually evaluated for impairment Collectively evaluated for impairment Balance

As of December 31, 2021:

48 unchanged sentences

No material changes have been made to the risk characteristics pertaining to the loan and lease portfolio contained in the Company's 2021 Form 10-K.

The following tables present the credit risk profile of the Company’s loan and lease portfolio based on rating category and payment activity as of March 31, 2022 and December 31, 2021:

The following tables present the credit risk profile of the Company’s loan and lease portfolio based on rating category and payment activity as of June 30, 2022 and December 31, 2021:

Pass Special Mention Substandard Doubtful Loss Total

As of March 31, 2022:

As of June 30, 2022:

Commercial mortgage $ 274,372 $ 4,118 $ — $ — $ — $ 278,490

18 unchanged sentences

Total $ 825,234 $ 12,222 $ 8,453 $ 42 $ — $ 845,951

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, 2022 and December 31, 2021:

March 31, 2022

The following tables present the Company’s loan and lease portfolio aging analysis of the recorded investment in loans and leases as of June 30, 2022 and December 31, 2021:

June 30, 2022

Delinquent Loans and Leases Current Total

27 unchanged sentences

Totals $ 1,161 $ 961 $ 7,360 $ 9,482 $ 836,469 $ 845,951 $ 1,847

The following tables present the Company’s impaired loans and specific valuation allowance at March 31, 2022 and December 31, 2021:

March 31, 2022

The following tables present the Company’s impaired loans and specific valuation allowance at June 30, 2022 and December 31, 2021:

June 30, 2022

Balance Unpaid

1 unchanged sentence

Impaired loans without a specific valuation allowance

Commercial mortgage $ 116 $ 199 $ —

Commercial and industrial $ 367 $ 566 $ —

6 unchanged sentences

Total impaired loans

Commercial mortgage $ 116 $ 199 $ —

Commercial and industrial $ 972 $ 1,213 $ 297

20 unchanged sentences

Total impaired loans $ 6,142 $ 6,567 $ 1,049

The following tables present the Company’s average investment in impaired loans and leases, and interest income recognized for the three months ended March 31, 2022 and 2021:

The following tables present the Company’s average investment in impaired loans and leases, and interest income recognized for the three and six months ended June 30, 2022 and 2021:

Investment in

Loans and Leases Interest

Three Months Ended March 31, 2022:

Three Months Ended June 30, 2022:

Total impaired loans

6 unchanged sentences

Loans and Leases Interest

Three Months Ended March 31, 2021:

Six Months Ended June 30, 2022:

Total impaired loans

4 unchanged sentences

Total impaired loans and leases $ 6,080 $ 26

The following table presents the Company’s nonaccrual loans and leases at March 31, 2022 and December 31, 2021:

Investment in

Loans and Leases Interest

Three Months Ended June 30, 2021:

Total impaired loans

Commercial mortgage $ 138 $ 10

Commercial and industrial 1,041 1

Construction and development 4,900 —

Residential mortgage 178 1

Total impaired loans and leases $ 6,257 $ 12

Investment in

Loans and Leases Interest

Six Months Ended June 30, 2021:

Total impaired loans

Commercial mortgage $ 118 $ 10

Commercial and industrial 1,066 11

Construction and development 3,267 —

Residential mortgage 179 3

Total impaired loans and leases $ 4,630 $ 24

The following table presents the Company’s nonaccrual loans and leases at June 30, 2022 and December 31, 2021:

2022 December 31,

4 unchanged sentences

$ 6,024 $ 6,184

During the three months ended March 31, 2022 and 2021, there were no newly classified TDRs.

For the three months ended March 31, 2022 and 2021, the Company recorded no charge-offs related to TDRs.

As of March 31, 2022 and December 31, 2021, TDRs had a related allowance of $ 48,000 and $ 49,000 , respectively.

During the three months ended March 31, 2022, there were no TDRs for which there was a payment default within the first 12 months of the modification.

During the three and six months ended June 30, 2022 and 2021, there were no newly classified TDRs.

For the three and six months ended June 30, 2022 and 2021, the Company recorded no charge-offs related to TDRs.

As of June 30, 2022 and December 31, 2021, TDRs had a related allowance of $ 47,000 and $ 49,000 , respectively.

During the three and six months ended June 30, 2022, there were no TDRs for which there was a payment default within the first 12 months of the modification.

The CARES Act provided guidance around the modification of loans as a result of the COVID-19 pandemic, which outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs.

3 unchanged sentences

In March 2020, the Company began offering short-term loan modifications to assist borrowers during the COVID-19 pandemic.

As of March 31, 2022, the Company had no loan and lease modifications outstanding related to the COVID-19 pandemic in accordance with the CARES Act.

At March 31, 2022 and December 31, 2021, the balance of real estate owned included $ 86,000 and $ 27,000 , respectively, of foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property.

At March 31, 2022 and December 31, 2021, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceeds were in process was $ 885,000 and $ 885,000 , respectively.

As of June 30, 2022, the Company had no loan and lease modifications outstanding related to the COVID-19 pandemic in accordance with the CARES Act.

At June 30, 2022 and December 31, 2021, the balance of real estate owned included $ 0 and $ 27,000 , respectively, of foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property.

At June 30, 2022 and December 31, 2021, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process was $ 1.1 million and $ 885,000 , respectively.

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

5 unchanged sentences

Net investment in direct finance leases $ 130,859 $ 126,762

There were no leases serviced by the Company for the benefit of others at March 31, 2022 and December 31, 2021.

There were no leases serviced by the Company for the benefit of others at June 30, 2022 and December 31, 2021.

Certain leases have been sold from time to time by the Company with partial recourse.

The Company estimates and records its obligation based upon historical loss percentages.

At both March 31, 2022 and December 31, 2021, the Company did not have any recorded recourse obligations on leases sold.

The following table summarizes the future minimum lease payments receivable subsequent to March 31, 2022:

2022 $ 41,326

At both June 30, 2022 and December 31, 2021, the Company did not have any recorded recourse obligations on leases sold.

The following table summarizes the future minimum lease payments receivable subsequent to June 30, 2022:

Remainder of 2022 $ 28,267

Thereafter 1,909

9 unchanged sentences

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, 2022 and December 31, 2021:

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant

March 31, 2022

June 30, 2022

Available-for-sale securities

Treasury securities $ 395 $ — $ 395 $ —

SBA Pools 7,184 — 7,184 —

18 unchanged sentences

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 the valuation hierarchy.

There have been no significant changes in the valuation techniques during the three months ended March 31, 2022.

There have been no significant changes in the valuation techniques during the six months ended June 30, 2022.

Available-for-Sale Securities

5 unchanged sentences

Nonrecurring Measurements

The following table presents the fair value measurement of assets and liabilities measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2022 and December 31, 2021:

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant

March 31, 2022

June 30, 2022

Impaired loans, collateral dependent $ 308 $ — $ — $ 308

23 unchanged sentences

Unobservable (Level 3) Inputs

The following tables present the fair value measurement of assets recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2022 and December 31, 2021:

Fair Value at March 31,

Fair Value at June 30,

2022 Valuation

8 unchanged sentences

Fair Value of Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments at March 31, 2022 and December 31, 2021:

The following tables present estimated fair values of the Company’s financial instruments at June 30, 2022 and December 31, 2021:

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant

March 31, 2022

June 30, 2022

Financial assets

32 unchanged sentences

The following table presents the computation of basic and diluted EPS for the periods indicated:

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

Net income $ 3,485 $ 2,781

8 unchanged sentences

Diluted Earnings Per Share $ 0.31 $ 0.24

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

Net income $ 6,503 $ 5,344

Shares outstanding for Basic EPS:

Average shares outstanding 12,196,976 13,009,766

average restricted stock award shares not vested 347,914 433,031

average unearned ESOP Shares 944,405 998,511

Shares outstanding for Basic EPS 10,904,657 11,578,224

Additional Dilutive Shares 395,650 212,869

Shares outstanding for Diluted EPS 11,300,307 11,791,093

Basic Earnings Per Share $ 0.60 $ 0.46

Diluted Earnings Per Share $ 0.58 $ 0.45

Benefit Plans

1 unchanged sentence

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 $ 53,000 and $ 52,000 for the three months ended March 31, 2022 and 2021, respectively.

The Company’s expense for the plan was $ 55,000 , $ 108,000 , $ 64,000 , and $ 116,000 for the three and six months ended June 30, 2022 and 2021, respectively.

Employee Stock Ownership Plan

4 unchanged sentences

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, $ 12,744,530 and $ 12,928,359 of common stock acquired by the ESOP was shown as a reduction of stockholders’ equity at March 31, 2022 and December 31, 2021, respectively.

Accordingly, $ 12,560,701 and $ 12,928,359 of common stock acquired by the ESOP was shown as a

reduction of stockholders’ equity at June 30, 2022 and December 31, 2021, respectively.

Shares are released to participants proportionately as the loan is repaid.

ESOP expense for the three months ended March 31, 2022 and 2021 was $ 226,000 and $ 183,000 , respectively.

ESOP expense for the three and six months ended June 30, 2022 and 2021 was $ 208,000 , $ 191,000 , $ 434,000 , and $ 374,000 , respectively.

2022 December 31,

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Forfeited shares may be awarded to other eligible recipients in future grants until the 2020 EIP terminates in September 2030.

The following table summarizes the restricted stock awards activity in the 2020 EIP during the three months ended March 31, 2022.

Three Months Ended March 31, 2022

The following table summarizes the restricted stock awards activity in the 2020 EIP during the six months ended June 30, 2022.

Six Months Ended June 30, 2022

Number of Restricted Shares Weighted Average Grant Date Fair Value

Non-vested, beginning of period 348,395 $ 10.56

Vested ( 87,104 ) 10.56

Forfeited — —

Non-vested, March 31, 2022 348,395 10.56

Total compensation cost recognized in the income statement for restricted stock awards during the three months ended March 31, 2022 was $ 226,000 , and the related tax benefit recognized was $ 48,000 .

As of March 31, 2022, unrecognized compensation expense related to restricted stock awards was $ 3.0 million.

Non-vested, June 30, 2022 261,291 10.56

Total compensation cost recognized in the income statement for restricted stock awards during the three and six months ended June 30, 2022 was $ 229,000 and $ 456,000 , respectively, and the related tax benefit recognized was $ 48,000 and $ 96,000 , respectively.

As of June 30, 2022, unrecognized compensation expense related to restricted stock awards was $ 2.8 million.

Stock Option Plan.

1 unchanged sentence

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.

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, 2022.

Three Months Ended March 31, 2022

The following table summarizes the stock option activity in the 2020 EIP during the six months ended June 30, 2022.

Six Months Ended June 30, 2022

Number of Shares Weighted-Average Exercise Price

2 unchanged sentences

Forfeited/expired — —

Balance, March 31, 2022 1,050,961 10.56

Balance, June 30, 2022 1,050,961 10.56

Exercisable at end of period 413,120 $ 10.56

5 unchanged sentences

Expected life of options 6.1 years

A summary of the status of the Company stock option shares as of March 31, 2022 is presented below.

A summary of the status of the Company stock option shares as of June 30, 2022 is presented below.

Shares Weighted Average Grant Date Fair Value

Non-vested, beginning of year 850,458 $ 2.91

Vested ( 212,617 ) —

Forfeited — —

Non-vested, March 31, 2022 850,458 $ 2.91

Total compensation cost recognized in the income statement for option-based payment arrangements for the three months ended March 31, 2022 was $ 153,000 , and the related tax benefit recognized was $ 17,000 .

As of March 31, 2022, unrecognized compensation expense related to the stock option awards was $ 2.0 million.

Non-vested, June 30, 2022 637,841 $ 2.91

Total compensation cost recognized in the income statement for option-based payment arrangements for the three and six months ended June 30, 2022 was $ 154,000 and $ 307,000 , respectively, and the related tax benefit recognized was $ 17,000 and $ 34,000 , respectively.

As of June 30, 2022, unrecognized compensation expense related to the stock option awards was $ 1.9 million.

Subsequent Event

Subsequent to March 31, 2022 through May 13, 2022 the Company purchased 355,348 shares of the Company's common stock pursuant to the existing stock repurchase program, leaving 554,014 shares available for future repurchase.

Subsequent to June 30, 2022 through August 12, 2022, the Company purchased 32,054 shares of the Company's common stock pursuant to its existing stock repurchase programs, leaving 1,154,209 shares available for future repurchase.

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-Q

Item 1. Financial Statements