What changed in this filing

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Item 1. Business

2025-03-27 compared with 2024-03-29 · 103 added, 103 removed, 970 unchanged (18% of the section changed)

15 unchanged sentences

Our corporate office is located at 31 North 9th Street, Richmond, Indiana, and our telephone number is (765) 962-2581.

First Bank Richmond is an Indiana state-chartered commercial bank headquartered in Richmond, Indiana.

The bank was originally established in 1887 as an Indiana state-chartered mutual savings and loan association and in 1935 converted to a federal mutual savings and loan association, operating under the name First Federal Savings and Loan Association of Richmond.

In 1993, the bank converted to a state-chartered mutual savings bank and changed its name to First Bank Richmond, S.B.

In 1998, the bank, in connection with its non-stock mutual holding company reorganization, converted to a national bank charter operating as First Bank Richmond, National Association.

In July 2007, Richmond Mutual Bancorporation-Delaware, the bank’s then current holding company, acquired Mutual Federal Savings Bank headquartered in Sidney, Ohio.

Mutual Federal Savings Bank was operated independently as a separately chartered, wholly owned subsidiary of Richmond Mutual Bancorporation-Delaware until 2016 when it was combined with the bank through an internal merger transaction that consolidated both banks into a single, more efficient commercial bank charter.

In 2017, the bank converted to an Indiana state-chartered commercial bank and changed its name to First Bank Richmond.

The former Mutual Federal Savings Bank continues to operate in Ohio under the name Mutual Federal, a division of First Bank Richmond.

Richmond Mutual Bancorporation-Maryland's primary business activities are currently limited to one significant business segment, which is community banking.

First Bank Richmond, headquartered in Richmond, Indiana, is a state-chartered commercial bank.

Established in 1887 as a mutual savings and loan, it became a federal mutual savings and loan in 1935, operating as First Federal Savings and Loan Association of Richmond.

In 1993, the Bank operated as First Bank Richmond, S.B.

after converting to a state-chartered mutual savings bank.

It transitioned to a national bank charter in 1998 as part of a mutual holding company reorganization.

In 2007, its holding company, Richmond Mutual Bancorporation-Delaware, acquired Mutual Federal Savings Bank in Sidney, Ohio.

Mutual Federal operated independently until 2016, when it merged with First Bank Richmond to streamline operations.

In 2017, the Bank converted to an Indiana state-chartered commercial bank and adopted the name First Bank Richmond, while continuing to operate in Ohio under the name Mutual Federal, a division of First Bank Richmond.

First Bank Richmond provides full banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana, its five full-service offices located in Piqua (2), Sidney (2) and Troy (1), Ohio, and its loan production office in Columbus, Ohio.

1 unchanged sentence

As an Indiana-chartered commercial bank, First Bank Richmond is subject to regulation by the IDFI and the FDIC.

Our principal business consists of attracting deposits from the general public, as well as brokered deposits, and investing those funds primarily in loans secured by commercial and multi-family real estate, first mortgages on owner-occupied, one- to four-family residences, a variety of consumer loans, direct financing leases and commercial and industrial loans.

occupied, one- to four-family residences, a variety of consumer loans, direct financing leases and commercial and industrial loans.

We also obtain funds by utilizing Federal Home Loan Bank (“FHLB”) advances.

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Wayne County had an estimated population in 2024 of 66,400 with a median household income of approximately $56,700.

The unemployment rate in December 2023 was 2.9% in Wayne County, as compared to the national

and state unemployment rates of 3.5% and 2.9%, respectively.

The top employers in Wayne County include Reid Health, Richmond Community Schools, Belden Wire & Cable, Sugar Creek Brandworthy Food Solutions, Richmond State Hospital, and Primex Plastics Corporation.

The unemployment rate in December 2024 was 4.6% in Wayne County, as compared to the national and state unemployment rates of 4.4% and 4.0%, respectively.

The top employers in Wayne County include Reid Health, Richmond Community Schools, Belden Wire & Cable, Sugar Creek Brandworthy Food Solutions, Richmond State Hospital,

and Primex Plastics Corporation.

First Bank Richmond operates seven banking offices in Wayne County, including five in Richmond, which is the largest city in Wayne County.

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It is favorably located with excellent highway access and has over 7.7 million people within a 100-mile radius.

Health care and social services are the primary sources of employment, followed by manufacturing and food service.

Health care and social services are the primary sources of employment, followed by manufacturing and retail trade.

The city is home to a regional hospital, Reid Health, as well as five higher educational institutions:

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Manufacturing is the dominant industry among the employee workforce in Shelby County.

Leading manufacturing employers in Shelby County include Honda of America Manufacturing, Airstream, Plastipak Packaging, and Wilson Health.

The unemployment rate in Shelby County was 2.9% in both December 2023 and 2022.

Leading manufacturing employers in Shelby County include Honda of America Manufacturing, Airstream, and Plastipak Packaging.

The unemployment rate in Shelby County was 4.0% in December 2024 compared to 2.9% in December 2023.

Miami County is located in west central Ohio and is part of the Dayton metropolitan area.

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The Columbus metropolitan area had an estimated population of 2.2 million and ranked as the 32 nd most populous metropolitan area in the United States and the second most populous metropolitan area in Ohio, just behind the Cincinnati metropolitan area and slightly ahead of the Cleveland metropolitan area.

The unemployment rate in December 2023 was 2.7%

for the entire Columbus metropolitan area and 2.7% for Franklin County, compared to 3.1% for the entire Columbus metropolitan area and 3.1% for Franklin County in December 2022.

The unemployment rate in December 2024 was 3.9% for the entire Columbus metropolitan area and 4.0% for Franklin County, compared to 2.7% for the entire Columbus metropolitan area and 2.7% for Franklin County in December 2023.

Lending Activities

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As of December 31, 2024, First Bank Richmond was in compliance with the loans-to-one-borrower limitations.

At December 31, 2023, our largest lending relationship with one borrower was for $19.0 million consisting of three commercial real estate loans secured by properties in the Dayton, Ohio area.

At December 31, 2024, our largest lending relationship with one borrower was for $22.8 million consisting of four commercial real estate loans secured by properties in the Dayton, Ohio area.

All of these loans were performing in accordance with their repayment terms at December 31, 2024.

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Loans that are sold into the secondary market to Fannie Mae or the FHLB of Indianapolis are sold with the servicing retained to maintain the client relationship and to generate non-interest income.

The sale of mortgage loans provides a source of non-interest income through the gain on sale, reduces our interest rate

risk, provides a stream of servicing income, enhances liquidity and enables us to originate more loans at our current capital level than if we held the loans in our loan portfolio.

The sale of mortgage loans provides a source of non-interest income through the gain on sale, reduces our interest rate risk, provides a stream of servicing income, enhances liquidity and enables us to originate more loans at our current capital level than if we held the loans in our loan portfolio.

During the year ended December 31, 2024, we originated $38.1 million one- to four-family fixed-rate mortgage loans and $11.9 million one- to four-family adjustable-rate mortgage (“ARM”) loans, and sold $25.2 million of these loans without recourse to Fannie Mae and the FHLB of Indianapolis.

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Home equity loans originated with a loan to value ratio in excess of 80% are subject to a higher origination fee and higher interest rate than home equity loans with loan to value ratios of 80% or less.

If the home equity loan is for home improvements, the improvements to be made to the property may be considered when calculating the loan to value ratio.

If the home equity loan is for home improvements, the improvements to be made to the property may be considered when calculating the

loan to value ratio.

If the loan to value ratio on the property is sufficient, regardless of the improvements to be made, the proceeds may be disbursed directly to the borrower.

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Of the $189.5 million in one- to four- family loans, including home equity loans and lines of credit, in our portfolio as of December 31, 2024, $12.1 million, or 6.4%, were to borrowers with a credit score under 660.

At December 31, 2024, delinquent subprime loans totaled $1.2 million.

Multi-family and Commercial Real Estate Lending .

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We evaluate the qualifications and financial condition of the borrower, including project-level and global cash flows, credit history and management expertise, as well as the value and condition of the property securing the loan.

When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property and the borrower’s payment history with us and other financial institutions.

When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar

property and the borrower’s payment history with us and other financial institutions.

In evaluating the property securing the loan, the factors we consider include the net operating income of the mortgaged property before debt service and depreciation, the ratio of the loan amount to the appraised value of the mortgaged property and the debt service coverage ratio (the ratio of net operating income to debt service).

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We require property and casualty insurance and also require flood insurance if the property is determined to be in a flood zone area.

In addition, we generally require a Phase I Environmental Audit as a condition of making all multi-family and commercial real estate loans in excess of $1.0 million, which audit is performed by a qualified environmental consulting firm.

In addition, we generally require a Phase I Environmental Audit as a condition of making multi-family and commercial real estate loans in excess of $1.0 million, which audit is performed by a qualified environmental consulting firm.

The Phase I Environmental Audit includes appropriate inquiry into previous ownership and uses of the real estate to satisfactorily comply with the “Innocent Landowner Defense Amendment” to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA).

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For loans less than $1.0 million but greater than $150,000, a full Phase I Environmental Audit is not required, although an environmental investigation is typically performed by qualified bank personnel or a third party to determine if a full Phase I Environmental Audit should be done.

At December 31, 2023, the average loan size of our outstanding multi-family and commercial real estate loans was $1.1 million, and the largest of such loans was an $11.5 million loan secured by a first mortgage on a parking garage and apartment building located in the Columbus, Ohio metropolitan area.

At December 31, 2024, the average loan size of our outstanding multi-family and commercial real estate loans was $1.3 million, and the largest of such loans was a $13.7 million loan secured by a 210,000 square-foot industrial facility located in a Columbus, Ohio suburb.

This loan was performing in accordance with its repayment terms at December 31, 2024.

We had 50 other commercial and multi-family real estate loans with an outstanding balance in excess of $3.0 million at December 31, 2023, all of which were performing in accordance with their repayment terms at December 31, 2023.

Our largest lending relationship with one borrower at December 31, 2023 was for $19.0 million consisting of three commercial real estate loans secured by properties in the Dayton, Ohio area.

All these loans were performing in accordance with their repayment terms at December 31, 2023.

We had 56 other commercial and multi-family real estate loans each with an outstanding balance in excess of $3.0 million at December 31, 2024, all of which were performing in accordance with their repayment terms at December 31, 2024.

Our largest lending relationship with one borrower at December 31, 2024 was for $22.8 million consisting of four commercial real estate loans secured by properties in the Dayton, Ohio area.

All of these loans were performing in accordance with their repayment terms at December 31, 2024.

Multi-family and commercial real estate loans entail greater credit risks compared to one- to four-family residential real estate loans because they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers.

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As a result of these additional complexities, variables and risks, commercial and industrial loans require extensive underwriting and servicing.

At December 31, 2023, the average loan size of our outstanding commercial and industrial loans was $239,000, and our largest outstanding commercial and industrial loan was a capital improvement loan totaling $6.4 million to an equipment holding and leasing company located in Bremen, Ohio secured by a first lien on equipment.

This loan was performing in accordance with its repayment terms at December 31, 2023.

We had 21 other commercial and industrial loans with an outstanding balance in excess of $1.0 million at December 31, 2023, all but two of which were performing in accordance with their repayment terms at that date.

At December 31, 2024, the average loan size of our outstanding commercial and industrial loans was $246,000.

Our largest outstanding commercial and industrial loan at that date was a working capital line of credit totaling $6.4 million, which

was secured by all of the assets of the business and performing in accordance with its repayment terms at December 31, 2024.

We had 25 other commercial and industrial loans with an outstanding balance in excess of $1.0 million at December 31, 2024, all of which were performing in accordance with their repayment terms at that date.

Construction and Development Lending.

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Such loans are independently underwritten according to our policies.

At December 31, 2023, our purchased construction and development loan participations totaled $46.8 million, or 29.6% of our total construction and development loan portfolio, of which $17.6 million involve loans secured by collateral outside of our primary market area.

At December 31, 2024, our purchased construction and development loan participations totaled $28.7 million, or 21.6% of our total construction and development loan portfolio, of which $5.5 million involved loans secured by collateral outside of our primary market area.

Our commercial construction loans are typically made to builders/developers that have an established record of successful project completion and loan repayment.

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General liability, builder’s risk hazard insurance, title insurance, and flood insurance (as applicable, for properties located or to be built in a designated flood hazard area) are also required on all construction and development loans.

Our commercial construction loans have terms that typically range from one to two years depending on factors such as the type and size of the development and the financial strength of the borrower/guarantor.

Commercial construction loans are

typically structured with an interest only period during the construction phase.

Our commercial construction loans have terms to maturity that typically range from one to two years depending on factors such as the type and size of the development and the financial strength of the borrower/guarantor.

Commercial construction loans are typically structured with an interest only period during the construction phase.

Commercial construction loans are underwritten to either mature, or transition to a traditional amortizing loan, at the completion of the construction phase.

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Our residential construction loans generally provide for the payment of interest only during the construction phase, which is typically up to nine months.

We do not make speculative construction loans to a builder for homes that are not pre-sold.

The average outstanding residential construction loan balance was approximately $289,000 at December 31, 2024.

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Construction loans generally involve greater credit risk than long-term financing on improved, owner occupied real estate.

In the event a loan is made on property that is not yet approved for the planned development or improvements, there is a risk that necessary approvals will not be granted or will be delayed.

In the event a loan is made on property that is not yet approved for the planned development or improvements, there is a

risk that necessary approvals will not be granted or will be delayed.

Risk of loss on a construction loan also depends upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions.

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No assurances, however, can be given that these practices will be successful in mitigating the risks of construction and development lending.

At December 31, 2023, our largest construction and land development loan had an outstanding balance of $11.7 million and was secured by a 210,000 square-foot industrial facility located in a Columbus, Ohio suburb.

At December 31, 2024, our largest construction and land development loan had an outstanding balance of $12.1 million and was secured by all business assets, as well as a first mortgage and assignment of rents and leases on a proposed hotel in the Columbus, Ohio area.

At December 31, 2024, this loan was performing according to its repayment terms.

We had 18 other construction and development loans with an outstanding balance in excess of $3.0 million at December 31, 2023, all of which were performing in accordance with their repayment terms at that date except for one $4.9 million loan that is subject to litigation between the developer and other parties.

We had 15 other construction and development loans each with an outstanding balance in excess of $3.0 million at December 31, 2024, all of which were performing in accordance with their repayment terms at that date except for one $4.9 million loan that is subject to litigation between the developer and other parties.

Lease Financing.

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Credit agency reports of the applicant’s credit history supplement the analysis of the applicant’s creditworthiness.

We generally file a UCC-1 financing statement on all of our lease transaction to perfect our interest in the equipment, except in the case of (i) titled equipment, where we would require the title in lieu of the UCC financing statement, (ii) transactions under $5,000 or (iii) for equipment with very little value, such as computer software.

We generally file a UCC-1 financing statement on all of our lease transactions to perfect our interest in the equipment, except in the case of (i) titled equipment, where we would require the title in lieu of the UCC financing statement, (ii)

transactions under $5,000 or (iii) for equipment with very little value, such as computer software.

Perfection gives us a claim to the collateral that is superior to someone that obtains a lien through the judicial process subsequent to the perfection of a security interest.

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However, failure to perfect a security interest risks avoidance of the security interest in bankruptcy or subordination to the claims of third parties.

At December 31, 2023, approximately $52.4 million or 33.3% of the aggregate dollar amount of our lease portfolio was concentrated in four states:

At December 31, 2024, approximately $51.1 million or 34.4% of the aggregate dollar amount of our lease portfolio was secured by property concentrated in four states:

California at 14.3%;

New York at 7.8%;

Florida at 6.2% and Arkansas at 6.2%.

Florida at 6.2%;

and Arkansas at 6.1%.

Our largest leasing relationship at that date was with the State of Arkansas which consisted of more than 3,300 leases totaling approximately $9.1 million in lease receivables, all of which were performing in accordance with the lease terms.

Our second largest leasing relationship was with a drilled pile foundation company located in Florida consisting of three contracts totaling approximately $1.3 million in lease receivables, all of which were performing in accordance with the lease terms.

Our second largest leasing relationship was with a drilled pile foundation company located in Florida consisting of four contracts totaling approximately $938,000 in lease receivables, all of which were performing in accordance with the lease terms.

Consumer Lending.

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During the year ended December 31, 2024, we originated $133.7 million of fixed rate loans and leases and $103.4 million of adjustable-rate loans, compared to $236.3 million of fixed rate loans and leases and $136.6 million of adjustable-rate loans during the year ended December 31, 2023.

The following tables provide information regarding our origination for the periods indicated:

The following tables provide information regarding our originations for the periods indicated:

Fixed Rate Floating or

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(1) Includes $3.0 million of fixed-rate and $260,000 of adjustable-rate loans secured by second mortgages on residential properties.

As reflected in the tables above, loan and lease originations decreased $113.4 million, or 23.3%, to $372.9 million during 2023 compared to $486.3 million during 2022, primarily due to decreases in:

(i) residential mortgage loans as a result of a slowdown in the refinancing and sales of housing in our area due to rising market interest rates;

and (ii) multifamily, commercial real estate, and construction and development loans due to increasing interest rates.

As reflected in the tables above, loan and lease originations decreased $135.8 million, or 36.4%, to $237.1 million during 2024 compared to $372.9 million during 2023, primarily due to higher market interest rates.

We consider our balance sheet as well as market conditions on an ongoing basis in making decisions as to whether to hold residential loans we originate for investment or to sell these loans to investors, choosing the strategy that is most advantageous to us from a profitability and risk management standpoint.

We sell the majority of the fixed-rate conforming and eligible jumbo one- to four-family residential real estate loans that we originate, generally on a servicing-retained basis, while retaining some non-eligible fixed-rate and adjustable-rate one- to four-family residential real estate loans in order to manage the

duration and time to repricing of our loan portfolio.

All FHA, VA and USDA loans we originate are sold on a servicing-released, non-recourse basis in accordance with FHA, VA and USDA guidelines.

For the years ended December 31, 2024 and 2023, we sold $25.2 million and $19.7 million of one- to four-family residential real estate loans, respectively.

During the year ended December 31, 2023, we originated and sold $65,000 of FHA, VA and USDA loans, compared to no FHA, VA or USDA loans originated or sold during the year ended December 31, 2022.

During the year ended December 31, 2024, we did not originate or sell any FHA, VA, or USDA loans, compared to $65,000 of FHA, VA or USDA loans originated or sold during the year ended December 31, 2023.

We recognize, at the time of sale, the cash gain or loss on the sale of the loans based on the difference between the net cash proceeds received and the carrying value of the loans sold.

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At December 31, 2024, we had 43 loans totaling $104.4 million, consisting of $64.6 million of multifamily and commercial real estate loans, $28.7 million of construction and development loans, and $11.1 million of other loans in which we were not the lead lender (of which $26.4 million are for loans secured by collateral located outside of our primary market area).

All of these participation loans were performing in accordance with their original repayment terms at December 31, 2023.

All but one of these participation loans were performing in accordance with their original repayment terms at December 31, 2024.

We also have sold portions of loans we originate that exceeded our loans-to-one borrower legal lending limit or for risk diversification.

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A loan or lease may remain on accrual status if it is in the process of collection and is either guaranteed or well secured.

When a loan or lease is placed on nonaccrual status, unpaid interest credited to income is reversed.

When a loan or lease is placed on nonaccrual status, unpaid interest credited to income is

Interest received on nonaccrual loans and leases generally is applied against principal or interest and is recognized on a cash basis.

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Nonperforming loans and leases totaled $6.8 million, or 0.58% of total loans and leases at December 31, 2024 and $8.0 million, or 0.72% of total loans and leases at December 31, 2023.

The decrease in nonperforming loans was primarily attributable to a $1.0 million decrease in commercial and industrial loans, primarily due to two loans to the same borrower totaling $550,000 and secured by real estate, which were transferred to real estate owned and subsequently sold during 2023.

The decrease in nonperforming loans was primarily attributable to a $1.2 million decrease in commercial and industrial loans, primarily due to one loan of $1.2 million secured by business assets, previously nonaccruing, that was paid off in 2024.

At December 31, 2024, our largest nonperforming loan was a $4.9 million nonaccrual commercial construction and development loan that is subject to litigation between the developer and other parties.

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Consumer 99 76

Commercial and industrial — 1,285

Leases 340 296

Total accruing loans and leases delinquent more than 90 days 1,714 1,675

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Loans are listed on the “watch list” initially because of emerging financial weaknesses even though the loan is currently performing as agreed, or if the loan possesses weaknesses although currently performing.

If a loan deteriorates in asset quality, the classification is changed to “special mention,”

“substandard,” “doubtful” or “loss” depending on the circumstances and the evaluation.

If a loan deteriorates in asset quality, the classification is changed to “special mention,” “substandard,” “doubtful” or “loss” depending on the circumstances and the evaluation.

Generally, loans 90 days or more past due are placed on nonaccrual status and classified “substandard.” Management reviews the status of each loan on our watch list on a quarterly basis.

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As an integral part of their examination process, the IDFI and the FDIC will periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses.

However, regulatory agencies are not directly involved in the process for establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management.

However, regulatory

agencies are not directly involved in the process for establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management.

Allowance for Credit Losses .

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(Dollars in thousands)

Allowance for credit losses on loans and leases to total loans outstanding 1.42 % 1.27 %

Allowance for credit losses on loans and leases to total loans and leases outstanding

1.34 % 1.42 %

Allowance for credit losses on loans and leases $ 15,791 $ 15,663

Total loans outstanding $ 1,106,512 $ 975,000

Nonaccrual loans to total loans outstanding 0.57 % 0.62 %

Nonaccrual loans $ 6,324 $ 6,003

Total loans outstanding $ 1,106,512 $ 975,000

Allowance for credit losses on loans and leases to nonaccrual loans 247.68 % 206.78 %

Total loans and leases outstanding

$ 1,175,296 $ 1,106,512

Nonaccrual loans and leases to total loans and leases outstanding

0.43 % 0.57 %

Nonaccrual loans and leases

$ 5,063 $ 6,324

Total loans and leases outstanding

$ 1,175,296 $ 1,106,512

Allowance for credit losses on loans and leases to nonaccrual loans and leases

311.89 % 247.68 %

Allowance for credit losses on loans and leases $ 15,791 $ 15,663

Nonaccrual loans $ 6,324 $ 6,003

Net charge-offs/(recoveries) during the period to average loans outstanding:

Nonaccrual loans and leases

$ 5,063 $ 6,324

Net charge-offs/(recoveries) during the period to average loans and leases outstanding:

Commercial mortgage — % — %

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Average amount outstanding $ 22,872 $ 22,602

Total loans 0.06 % 0.03 %

Total loans and leases

0.13 % 0.06 %

Net charge-offs/(recoveries) during the period $ 1,506 $ 678

Average amount outstanding $ 1,145,973 $ 1,044,471

At January 1, 2023, the Bank adopted the accounting standard referred to as CECL.

As of January 1, 2023, the Bank adopted the accounting standard referred to as CECL.

As a result of the change in methodology from the incurred loss method to the CECL method, on January 1, 2023 the Company recorded a one-time adjustment from equity into the allowance for credit losses on loans and leases in the amount of $2.0 million, net of tax.

This adjustment increased the allowance from $12.4 million at December 31, 2022 to $15.1 million at January 1, 2023.

At December 31, 2023, the allowance for credit losses on loans and leases totaled $15.7 million, an increase of $586,000 from January 1,

At December 31, 2024, the allowance for credit losses on loans and leases totaled $15.8 million, or 1.34% of total loans and leases outstanding, compared to $15.7 million, or 1.42% of total loans and leases outstanding at December 31, 2023.

This increase was driven by a $68.8 million increase in our loan and lease portfolio.

The growth in the balance of loans and leases primarily occurred in the commercial mortgage and direct financing leases categories, which is in line with management's strategy to expand these portfolios.

The growth in the balance of loans and leases primarily occurred in the commercial mortgage and multi-family categories, which is in line with management's strategy to expand these portfolios.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition at December 31, 2024 Compared to December 31, 2023” contained in Part II, Item 7 of this Form 10-K for additional information regarding changes in our loans, leases, and related allowances.

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We held common stock of the FHLB of Indianapolis in connection with our borrowing activities totaling $13.9 million at December 31, 2024.

For the year ended December 31, 2023, First Bank Richmond received a total of $851,000 in dividends from the FHLB.

For the year ended December 31, 2024, First Bank Richmond received a total of $1.2 million in dividends from the FHLB.

Our required investment in the stock of the FHLB is based on a predetermined formula, carried at cost and evaluated for impairment.

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Percent of total 5.72 % 1.03 % 1.36 % 8.76 % 62.52 % 20.61 % 100.00 %

As of December 31, 2023 and 2022, approximately $216.0 million and $219.7 million, respectively, of our deposit portfolio was uninsured.

As of December 31, 2024, approximately $248.1 million of our deposit portfolio, or 22.7% of total deposits, excluding collateralized public deposits, was uninsured.

The uninsured amounts are estimated based on the methodologies and assumptions used for First Bank Richmond's regulatory reporting requirements.

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2028 16,000 4.02 %

2029 7,000 4.14 %

Thereafter 20,000 0.71 %

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First Insurance Management, Inc.

was formed in 2022 as a pooled captive insurance company subsidiary of the Company, incorporated in the State of Nevada, for the purpose of providing additional insurance coverage for the Company and its subsidiaries related to the operations of the

Company for which insurance may not be economically feasible.

was formed in 2022 as a pooled captive insurance company subsidiary of the Company, incorporated in the State of Nevada, for

the purpose of providing additional insurance coverage for the Company and its subsidiaries related to the operations of the Company for which insurance may not be economically feasible.

As of December 31, 2024, First Insurance Management provided us with various liability and property damage policies for the Company and its related subsidiaries.

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Lending Activities.

and development loans, condominium and co-operative loans, second mortgage loans and other types of loans that may be made according to applicable regulations.

An Indiana-chartered commercial bank may make a wide variety of mortgage loans including fixed-rate loans, adjustable-rate loans, variable-rate loans, participation loans, graduated payment loans, construction and development loans, condominium and co-operative loans, second mortgage loans and other types of loans that may be made according to applicable regulations.

Commercial loans may be made to corporations and other commercial enterprises with or without security.

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The Financial Accounting Standards Board has adopted a new accounting standard for US GAAP that was effective for us beginning in 2023.

This standard, referred to as Current Expected Credit Loss, or CECL, requires FDIC-insured institutions and their holding companies (banking organizations) to recognize credit losses expected over the life of certain financial assets.

This standard, referred to as Current Expected Credit Loss, or CECL, requires FDIC-insured

institutions and their holding companies (banking organizations) to recognize credit losses expected over the life of certain financial assets.

CECL covers a broader range of assets than the former method of recognizing credit losses and generally results in earlier recognition of credit losses.

the amount of credit loss allowances under the former methodology and the amount required under CECL.

Upon adoption of CECL, a banking organization must record a one-time adjustment to its credit loss allowances as of the beginning of the fiscal year of adoption equal to the difference, if any, between the amount of credit loss allowances under the former methodology and the amount required under CECL.

For a banking organization, implementation of CECL generally reduces retained earnings and affects other items in a manner that decreases regulatory capital.

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The changes are designed to encourage banks to expand access to credit, investment and banking services in low- and moderate-income communities, adapt to changes in the banking industry including mobile and internet banking, provide greater clarity and consistency in the application of the CRA regulations and tailor CRA evaluations and data collection to bank size and type.

First Bank Richmond cannot predict the impact the changes to the CRA will have on its operations at this time.

The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.

Consumer Protection and Fair Lending Regulations.

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The Dodd-Frank Act prohibits unfair, deceptive or abusive acts or practices against consumers, which can be enforced by the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation and state Attorneys General.

USA Patriot Act.

First Bank Richmond is subject to the USA PATRIOT Act, which gives federal agencies additional powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements.

Bank Secrecy Act/Anti Money Laundering Law.

First Bank Richmond is subject to the Bank Secrecy Act and other anti-money laundering laws and regulations including the USA PATRIOT Act, which gives federal agencies additional powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements.

The USA PATRIOT Act includes measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies, and imposes affirmative obligations on a broad range of financial institutions, including banks, thrifts, brokers, dealers, credit unions, money transfer agents, and parties registered under the Commodity Exchange Act.

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In July 2023, the SEC adopted rules requiring registrants to disclose material cybersecurity incidents they experience and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy, and governance.

The new rules require registrants to disclose on Form 8-K any cybersecurity incident they determine to be material and to describe the material aspects of the incident's nature, scope, and timing, as well as its material impact or reasonably

likely material impact on the registrant.

For information regarding the Company’s cybersecurity risk management, strategy and governance, see “Item 1C.

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Richmond Mutual Bancorporation is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934.

Emerging Growth Company Status.

The JOBS Act, which was enacted in April 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets.

Under the JOBS Act, a company with total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year qualifies as an “emerging growth company.” Richmond Mutual Bancorporation qualifies as and has elected to be an emerging growth company under the JOBS Act.

An “emerging growth company” may choose not to hold non-binding advisory stockholder votes on annual executive compensation (more frequently referred to as “say-on-pay” votes) or on executive compensation payable in connection with a merger (more frequently referred to as “say-on-golden parachute” votes).

An emerging growth company also is not subject to the requirement that its auditors attest to the effectiveness of the company’s internal control over financial reporting and can

provide scaled disclosure regarding executive compensation.

Richmond Mutual Bancorporation is also not subject to the auditor attestation requirement or additional executive compensation disclosure so long as it remains a “smaller reporting company” under Securities and Exchange Commission regulations.

Finally, an emerging growth company may elect to comply with new or amended accounting pronouncements in the same manner as a private company.

Such an election is irrevocable during the period a company is an emerging growth company.

Richmond Mutual Bancorporation has elected to comply with new or amended accounting pronouncements in the same manner as a private company.

A company loses emerging growth company status on the earlier of:

(i) the last day of the fiscal year of the company during which it had total annual gross revenues of $1.0 billion or more;

(ii) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the company pursuant to an effective registration statement under the Securities Act of 1933;

(iii) the date on which such company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt;

or (iv) the date on which such company is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations.

The following discussion of federal and state taxation is intended only to summarize material income tax matters and is not a comprehensive description of the tax rules applicable to Richmond Mutual Bancorporation and First Bank Richmond.

Federal Taxation.

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For federal income tax purposes, we currently report our income and expenses on the accrual method of accounting and use a tax year ending December 31 for filing its federal income tax returns.

Richmond Mutual Bancorporation and First Bank Richmond will file a consolidated federal income tax return.

Richmond Mutual Bancorporation and First Bank Richmond with their respective subsidiaries will file a consolidated federal income tax return.

FB Richmond Properties, Inc.

files a separate federal income tax return.

Capital Loss Carryovers.

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Corporate Dividends.

Richmond Mutual Bancorporation may generally exclude from its income 100% of dividends received from First Bank Richmond as a member of the same affiliated group of corporations.

Richmond Mutual Bancorporation may generally exclude from its income 100% of dividends received from First Bank Richmond and their respective subsidiaries as members of the same affiliated group of corporations.

State Taxation.

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For Ohio franchise tax purposes, financial institutions are currently taxed at a rate equal to 0.8% of apportioned net capital.

First Bank Richmond also files income tax returns in a number of states where nexus has been established.

Other applicable state taxes include generally applicable sales and use taxes plus real and personal property taxes.

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As part of our compensation philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees in order to attract and retain superior talent.

In addition to healthy base wages, additional programs include annual bonus opportunities, a Company augmented Employee Stock Ownership Plan, Company matched 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, flexible work schedules, and employee assistance programs.

In addition to healthy base wages, additional programs include annual bonus opportunities, a Company augmented Employee Stock

Ownership Plan, Company matched 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, flexible work schedules, and employee assistance programs.

The success of our business is fundamentally connected to the well-being of our people.

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Glover holds a BS in Accounting from Ball State University’s Miller College of Business and has been recognized by the Indiana Bankers Association for completion of their Leadership Development Program.

In addition to his 12-year career in

In addition to his 13-year career in banking, Mr.

Glover also serves as a board member of Centerville-Abington Community Dollars for Scholars, and a finance committee member of the Richmond Family YMCA.

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In addition, over his 45+ year career in banking, Mr.

Weinert has held numerous commercial banking positions, including serving as a senior credit analyst, corporate lending officer, commercial lending division manager, special assets group manager, corporate banking manager and chief commercial credit officer, predominately with the Indiana National Bank in Indiana and its several successor entities through subsequent mergers.

Weinert has held numerous commercial banking

positions, including serving as a senior credit analyst, corporate lending officer, commercial lending division manager, special assets group manager, corporate banking manager and chief commercial credit officer, predominately with the Indiana National Bank in Indiana and its several successor entities through subsequent mergers.

Weinert holds a BA in Economics from Wabash College and an MBA from Butler University.

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He is a graduate of the Graduate School of Banking at the University of Wisconsin-Madison and has attended the Financial Managers School sponsored by the Graduate School of Banking at the University of Wisconsin-Madison.

Witte has been extensively involved in our community, having served on the board of numerous organizations during his tenure.

Our website addresses are www.firstbankrichmond.com and www.mutualfederal.com .

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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 1. Business