What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-09 compared with 2024-05-14 · 183 added, 92 removed, 760 unchanged (27% of the section changed)

30 unchanged sentences

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

Issued and outstanding - 11,018,824 shares and 11,208,500 shares at June 30, 2024 and December 31, 2023, respectively

110,188 112,085

8 unchanged sentences

Condensed Consolidated Statements of Income

Three Months Ended March 31,

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

2024 2023 2024 2023

Interest Income

14 unchanged sentences

Loan and lease servicing fees, including mortgage servicing right impairment 131,712 109,643 258,954 229,715

Net loss on sales of securities (includes $( 62,029 ), $ 0 , $( 62,029 ), and $ 0 , respectively, related to accumulated other comprehensive income reclassifications)

( 62,029 ) — ( 62,029 ) —

Net gains on loan and lease sales 90,321 154,038 209,638 309,601

15 unchanged sentences

Income Before Income Tax Expense 2,365,640 3,167,157 5,086,716 6,603,397

Provision for income taxes 352,160 532,194

Provision for income taxes (includes $ 13,026 , $ 0 , $ 13,026 , and $ 0 , respectively, related to income tax benefit from reclassification of items)

305,061 475,030 657,221 1,007,224

Net Income $ 2,060,579 $ 2,692,127 $ 4,429,495 $ 5,596,173

4 unchanged sentences

Richmond Mutual Bancorporation, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net Income $ 2,060,579 $ 2,692,127 $ 4,429,495 $ 5,596,173

Other Comprehensive (Loss) Income

Other Comprehensive Income (Loss)

Unrealized (loss) gain on available for sale securities, net of tax (benefit) expense of $( 354,927 ), $( 1,227,830 ), $( 1,112,426 ), and $ 412,287 , respectively

( 1,335,202 ) ( 4,618,979 ) ( 4,184,842 ) 1,550,985

Comprehensive (Loss) Income $ ( 480,724 ) $ 9,074,010

reclassification adjustment for realized losses included in net income, net of tax benefit of $ 13,026 , $ 0 , $ 13,026 , and $ 0 , respectively

( 49,003 ) — ( 49,003 ) —

( 1,286,199 ) ( 4,618,979 ) ( 4,135,839 ) 1,550,985

Comprehensive Income (Loss) $ 774,380 $ ( 1,926,852 ) $ 293,656 $ 7,147,158

See Notes to Condensed Consolidated Statements.

1 unchanged sentence

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Common Stock Additional

4 unchanged sentences

Outstanding Amount

Balances, March 31, 2024 11,115,887 $ 111,159 $ 100,613,827 $ 88,834,364 $ ( 11,273,897 ) $ ( 45,894,736 ) $ 132,390,717

Net income — — — 2,060,579 — — 2,060,579

Other comprehensive loss — — — — — ( 1,286,199 ) ( 1,286,199 )

ESOP shares earned — — ( 28,270 ) — 183,829 — 155,559

Forfeiture of restricted stock awards ( 400 ) ( 4 ) 4 — — — —

Stock based compensation — — 363,504 — — — 363,504

Exercise of stock options 652 6 ( 8 ) — — — ( 2 )

Common stock dividends ($ 0.14 per share)

— — — ( 1,437,106 ) — — ( 1,437,106 )

Repurchase of common stock ( 97,315 ) ( 973 ) ( 1,135,825 ) — — — ( 1,136,798 )

Balances, June 30, 2024 11,018,824 $ 110,188 $ 99,813,232 $ 89,457,837 $ ( 11,090,068 ) $ ( 47,180,935 ) $ 131,110,254

Six Months Ended June 30, 2024

Common Stock Additional

Capital Retained

Earnings Unearned

Shares Accumulated

Comprehensive

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

2 unchanged sentences

ESOP shares earned — — ( 57,931 ) — 367,658 — 309,727

Forfeiture of restricted stock awards ( 400 ) ( 4 ) 4 — — — —

Stock based compensation — — 730,989 — — — 730,989

Exercise of stock options 652 6 ( 8 ) — — — ( 2 )

Common stock dividends ($ 0.28 per share)

1 unchanged sentence

Repurchase of common stock ( 189,928 ) ( 1,899 ) ( 2,207,388 ) — — — ( 2,209,287 )

Balances, June 30, 2024 11,018,824 $ 110,188 $ 99,813,232 $ 89,457,837 $ ( 11,090,068 ) $ ( 47,180,935 ) $ 131,110,254

See Notes to Condensed Consolidated Statements.

Richmond Mutual Bancorporation, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended June 30, 2023

Common Stock Additional

Capital Retained

Earnings Unearned

Shares Accumulated

Comprehensive

Outstanding Amount

Balances, March 31, 2023 11,685,693 $ 116,857 $ 105,305,039 $ 85,721,075 $ ( 12,009,214 ) $ ( 43,581,211 ) $ 135,552,546

Three Months Ended March 31, 2023

Net income — — — 2,692,127 — — 2,692,127

Other comprehensive loss — — — — — ( 4,618,979 ) ( 4,618,979 )

ESOP shares earned — — ( 42,880 ) — 183,830 — 140,950

Stock based compensation — — 383,612 — — — 383,612

Common stock dividends ($ 0.14 per share)

— — — ( 1,483,666 ) — — ( 1,483,666 )

Repurchase of common stock ( 237,072 ) ( 2,371 ) ( 2,428,902 ) — — — ( 2,431,273 )

Balances, June 30, 2023 11,448,621 $ 114,486 $ 103,216,869 $ 86,929,536 $ ( 11,825,384 ) $ ( 48,200,190 ) $ 130,235,317

Six Months Ended June 30, 2023

Common Stock Additional

14 unchanged sentences

Repurchase of common stock ( 335,625 ) ( 3,356 ) ( 3,578,851 ) — — — ( 3,582,207 )

Balances, March 31, 2023 11,685,693 $ 116,857 $ 105,305,039 $ 85,721,075 $ ( 12,009,214 ) $ ( 43,581,211 ) $ 135,552,546

Balances, June 30, 2023 11,448,621 $ 114,486 $ 103,216,869 $ 86,929,536 $ ( 11,825,384 ) $ ( 48,200,190 ) $ 130,235,317

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

Net income $ 4,429,495 $ 5,596,173

Items not requiring (providing) cash

Adjustments to reconcile net income to net cash provided by operating activities

Provision for credit losses 453,606 178,316

3 unchanged sentences

Investment securities amortization, net 504,769 580,032

Net loss on sale of investment securities - available for sale

Net gains on loan and lease sales ( 209,638 ) ( 309,601 )

Gain on sale of real estate owned ( 1,558 ) ( 1,921 )

Loss (gain) on sale of real estate owned 4,124 ( 1,921 )

Gain on sale of premises and equipment ( 6,000 ) ( 1,800 )

14 unchanged sentences

Proceeds from maturities and paydowns of securities available for sale 8,418,748 12,038,103

Proceeds from sales of securities available for sale 3,789,203 —

Proceeds from maturities and paydowns of securities held to maturity 290,305 918,473

13 unchanged sentences

Repurchase of common stock ( 2,209,287 ) ( 3,582,207 )

Proceeds from stock option exercises ( 2 ) —

Dividends paid ( 2,874,405 ) ( 3,003,521 )

55 unchanged sentences

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.

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2020-04, Reference Rate Reform (Topic 848):

19 unchanged sentences

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.

2023-09 is effective for all public business entities for

annual periods beginning after December 15, 2024.

disaggregated by jurisdiction based on a quantitative threshold.

2023-09 is effective for all public business entities for annual periods beginning after December 15, 2024.

The ASU is effective for the Company beginning January 1, 2025.

3 unchanged sentences

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

March 31, 2024

June 30, 2024

Available for sale

23 unchanged sentences

Total investment securities $ 342,124 $ 91 $ 54,606 $ 287,609

The amortized cost and fair value of investment securities at March 31, 2024, by contractual maturity, are shown below.

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

8 unchanged sentences

Totals $ 327,061 $ 267,339 $ 4,658 $ 4,569

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.

Investment securities with a carrying value of $ 102,075,000 and $ 162,430,000 were pledged at June 30, 2024 and December 31, 2023, respectively, to secure certain deposits and for other purposes as permitted or required by law.

Proceeds from the sale of securities available for sale for both the three and six months ended June 30, 2024 were $ 3,789,000 .

Gross losses recognized on the sale of securities available for sale for the three and six months ended June 30, 2024 were $ 62,000 , while there were no gross gains recognized during those same periods.

There were no sales of securities available for sale for the three and six months ended June 30, 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.

Total fair value of these investments at June 30, 2024 and December 31, 2023 was $ 269,787,000 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.

The Company does not consider available for sale securities with unrealized losses to be experiencing credit losses at June 30, 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.

3 unchanged sentences

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:

As of June 30, 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 June 30, 2024:

State and municipal obligations

1 unchanged sentence

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

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

Securities June 30, 2024

Less Than 12 Months 12 Months or More Total

47 unchanged sentences

Loans, Leases and Allowance

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

The following table shows the composition of the loan and lease portfolio at June 30, 2024 and December 31, 2023:

2024 December 31,

51 unchanged sentences

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

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:

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 June 30, 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:

As of June 30, 2024:

Commercial mortgage

Pass $ 12,335 $ 40,027 $ 87,838 $ 68,164 $ 32,094 $ 93,760 $ 16,470 $ 350,688

Special Mention — — — — 4,814 — — 4,814

Substandard — — — 242 4,785 535 — 5,562

21 unchanged sentences

Pass — — — — — — 13,629 13,629

Substandard — — — — — — 152 152

Total Home equity lines of credit — — — — — — 13,781 13,781

54 unchanged sentences

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.

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

For the three months ended June 30, 2024 and December 31, 2023, the Company did not have any revolving loans convert to term loans.

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, 2024 and December 31, 2023:

June 30, 2024

Delinquent Loans and Leases Current Total

27 unchanged sentences

Totals $ 2,031 $ 765 $ 6,676 $ 9,472 $ 1,097,040 $ 1,106,512 $ 1,675

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

The following table presents information on the Company’s nonaccrual loans and leases at June 30, 2024, and at December 31, 2023:

2024 December 31,

5 unchanged sentences

Total nonaccrual loans and leases $ 5,051 $ 114 $ 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

During the three months ended June 30, 2024 and December 31, 2023, the Company recognized $ 1,000 and $ 42,000 of interest income on nonaccrual loans and leases, respectively.

June 30, 2024

Commercial Real Estate Multi-family Housing Residential Real Estate Other Total Allowance on Collateral Dependent Loans

17 unchanged sentences

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.

During the three and six months ended June 30, 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 or six months ended June 30, 2024 and 2023, and that were modified in the twelve months prior to that default by 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.

Other real estate owned is included in other assets on the Condensed Consolidated Balance Sheets.

At June 30, 2024 and December 31, 2023, other real estate owned included $ 43,200 and $ 136,000 , respectively, of foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property.

At June 30, 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

6 unchanged sentences

Net investment in direct finance leases $ 148,173 $ 156,598

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

The following table summarizes the future minimum lease payments receivable subsequent to June 30, 2024:

Remainder of 2024 $ 33,487

5 unchanged sentences

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

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

It considers relevant available information from internal and external sources relating to the 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.

17 unchanged sentences

• 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

The following tables summarize changes in the allowance for credit losses by segment for the three and six months ended June 30, 2024 and 2023, respectively:

Balances, March 31, 2024 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, June 30, 2024

Commercial mortgage $ 4,626 $ 155 $ — $ — $ 4,781

7 unchanged sentences

Total $ 15,825 $ 507 $ ( 580 ) $ 130 $ 15,882

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

Balances, December 31, 2023 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, June 30, 2024

Commercial mortgage $ 4,655 $ 126 $ — $ — $ 4,781

7 unchanged sentences

Total $ 15,663 $ 993 $ ( 1,019 ) $ 245 $ 15,882

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.

Balances, March 31, 2023 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, June 30, 2023

Commercial mortgage $ 4,728 $ 232 $ — $ 3 $ 4,963

Commercial and industrial 1,538 74 — 11 1,623

Construction and development 3,475 ( 509 ) — — 2,966

Multi-family 1,967 14 — — 1,981

Residential mortgage 1,596 15 — 12 1,623

Home equity 112 ( 10 ) — — 102

Direct financing leases 1,765 285 ( 281 ) 45 1,814

Consumer 314 10 ( 24 ) 19 319

Total $ 15,495 $ 111 $ ( 305 ) $ 90 $ 15,391

Balances, December 31, 2022 Impact of adopting ASC 326 Balances, January 1, 2023 Post-ASC 326 adoption Provision for (reversal of) credit losses Charge-offs Recoveries Balances, June 30, 2023

Commercial mortgage $ 4,776 $ ( 395 ) $ 4,381 $ 569 $ — $ 13 $ 4,963

Commercial and industrial 1,291 360 1,651 ( 51 ) — 23 1,623

Construction and development 2,855 784 3,639 ( 673 ) — — 2,966

Multi-family 1,955 ( 99 ) 1,856 125 — — 1,981

Residential mortgage 76 1,439 1,515 86 — 22 1,623

Home equity 23 89 112 ( 10 ) — — 102

Direct financing leases 1,196 422 1,618 353 ( 366 ) 209 1,814

Consumer 241 64 305 52 ( 68 ) 30 319

Total $ 12,413 $ 2,664 $ 15,077 $ 451 $ ( 434 ) $ 297 $ 15,391

During the second quarter of 2024, the allowance for credit losses on loans and leases increased from $ 15.8 million at March 31, 2023, to $ 15.9 million at June 30, 2024.

The increase was attributable to additional provisions totaling $ 507,000 during the second quarter of 2024, partially offset by net charge-offs of $ 450,000 .

Multiple loan categories experienced loan growth while a few declined slightly, as compared to prior quarter.

• Commercial Mortgage – allowance increased due to loan balances increasing $ 17.8 million.

• Commercial & Industrial – allowance increased due to loan balances increasing $ 3.5 million.

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

• Construction & Development – allowance decreased due to loan balances decreasing $ 25.5 million.

• Multi-Family – allowance increased due to balances increasing $ 20.5 million.

1 unchanged sentence

• Home Equity – allowance increased due to balances increasing $ 1.6 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.

• Direct Financing Leases – allowance increased while balances decreased $ 4.3 million, due to a higher calculated reserve percentage.

• Consumer – allowance increased slightly, while balances decreased $ 222,000 .

Our commercial loan portfolio, consisting of commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, represented 68.9 % and 68.1 % of our portfolio as of June 30, 2024 and December 31, 2023, respectively.

The allowance for credit losses on loans and leases allocated to the commercial loan portfolio represented 74.1 % of our total allowance at both June 30, 2024 and December 31, 2023.

Economic Outlook

2 unchanged sentences

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.

As of June 30, 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.

15 unchanged sentences

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.

• Indianapolis, Indiana – Based upon optimistic 2024 first half economic results, the market region is expecting continued economic growth in 2024.

First half 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.

5 unchanged sentences

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

The following tables detail activity in the allowance for credit losses on unfunded commitments during the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30,

Beginning balance $ 1,339 $ 2,204

Reversal of credit losses ( 236 ) ( 103 )

Ending balance $ 1,103 $ 2,101

Six Months Ended June 30,

Beginning balance $ 1,642 $ —

Impact of adopting ASC 326 — 2,374

Provision (reversal) for credit losses ( 303 ) ( 170 )

Reversal of credit losses ( 539 ) ( 273 )

Ending balance $ 1,103 $ 2,101

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, 2024 and December 31, 2023:

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant

March 31, 2024

June 30, 2024

Available for sale securities

19 unchanged sentences

$ 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

the valuation hierarchy.

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

There have been no significant changes in the valuation techniques during the six months ended June 30, 2024.

Available for Sale Securities

5 unchanged sentences

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.

As of June 30, 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:

The following tables present estimated fair values of the Company’s financial instruments at June 30, 2024 and December 31, 2023:

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant

March 31, 2024

June 30, 2024

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, 2024 Three Months Ended March 31, 2023

Three Months Ended June 30,

Net income $ 2,061 $ 2,692

8 unchanged sentences

Diluted Earnings Per Share $ 0.20 $ 0.26

Six Months Ended June 30,

Net income $ 4,429 $ 5,596

Shares outstanding for Basic EPS:

Average shares outstanding 11,116,338 11,651,976

average restricted stock award shares not vested 166,570 260,810

average unearned ESOP Shares 836,230 890,298

Shares outstanding for Basic EPS 10,113,538 10,500,868

Additional Dilutive Shares 90,591 80,455

Shares outstanding for Diluted EPS 10,204,129 10,581,323

Basic Earnings Per Share $ 0.44 $ 0.53

Diluted Earnings Per Share $ 0.43 $ 0.53

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 $ 68,000 and $ 37,000 for the three months ended March 31, 2024 and 2023, respectively.

The Company’s expense for the plan was $ 70,000 and $ 138,000 for the three and six months ended June 30, 2024, and $ 66,000 and $ 104,000 for the three and six months ended June 30, 2023, respectively.

Employee Stock Ownership Plan

1 unchanged sentence

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 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.

Accordingly, 816,089 and 843,142 shares of common stock acquired by the ESOP were shown as a reduction of stockholders’ equity at June 30, 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.

ESOP expense was $ 156,000 and $ 310,000 for the three and six months ended June 30, 2024, and was $ 141,000 and $ 311,000 for the three and six months ended June 30, 2023, respectively.

2024 December 31,

14 unchanged sentences

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 award activity in the 2020 EIP during the three months ended March 31, 2024.

Three Months Ended March 31, 2024

The following table summarizes the restricted stock award activity in the 2020 EIP during the six months ended June 30, 2024.

Six Months Ended June 30, 2024

Number of Restricted Shares Weighted Average Grant Date Fair Value

Non-vested, beginning of period 167,158 $ 10.56

Vested ( 83,379 ) 10.55

Forfeited ( 400 ) 13.86

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.

Non-vested, June 30, 2024 83,379 10.55

Total compensation cost recognized in the income statement for restricted stock awards during the three and six months ended June 30, 2024 was $ 217,000 and $ 436,000 , and the related tax benefit recognized was $ 46,000 and $ 92,000 , respectively.

As of June 30, 2024, unrecognized compensation expense related to restricted stock awards was $ 878,000 .

Stock Option Plan.

3 unchanged sentences

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

The following table summarizes the stock option activity in the 2020 EIP during the six months ended June 30, 2024.

Six Months Ended June 30, 2024

Number of Shares Weighted-Average Exercise Price

2 unchanged sentences

Forfeited/expired ( 800 ) 13.86

Balance, March 31, 2024 1,050,961 10.56

Balance, June 30, 2024 1,042,045 10.55

Exercisable at end of period 837,949 $ 10.55

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, 2024 is presented below.

A summary of the status of the Company stock option shares as of June 30, 2024 is presented below.

Shares Weighted Average Grant Date Fair Value

Non-vested, beginning of year 408,992 $ 2.91

Vested ( 204,096 ) 2.91

Forfeited ( 800 ) 3.02

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 .

Non-vested, June 30, 2024 204,096 $ 2.91

Total compensation cost recognized in the income statement for option-based payment arrangements for the three and six months ended June 30, 2024 was $ 147,000 and $ 295,000 , and the related tax benefit recognized was $ 16,000 and $ 32,000 , respectively.

As of June 30, 2024, unrecognized compensation expense related to the stock option awards was $ 592,000 .

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.

The Company has investments in certain limited partnerships that fund affordable housing projects and provide the Company with low income housing tax credits ("LIHTC").

At June 30, 2024 and December 31, 2023, the balance of these investments in LIHTC totaled $ 1.0 million and $ 1.1 million, respectively.

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,

The following table summarizes the amortization expense and tax credits recognized for the Company's LIHTC investments for the three and six months ended June 30, 2024 and 2023.

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

2024 2023 2024 2023

Amortization expense $ 46 $ 50 $ 90 $ 95

1 unchanged sentence

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.

Subsequent to June 30, 2024 through August 9, 2024, the Company purchased 26,917 shares of the Company's common stock pursuant to the existing stock repurchase program, leaving 651,191 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