RMBI 10-K & 10-Q changes, risk factors and insider trading

Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans. Adverse economic conditions in our market areasareas, including declining employment, reduced consumer spending, business failures, or adverse weather events, could impactadversely affect our growthgrowth, rate, reduce our customers'customers’ ability to repay loans, andand, adversely impactconsequently, our business, financial condition, and results of operations. Broader economic factors such as inflation, unemployment, and money supply fluctuations also may adversely affect our profitability. Trade wars, tariffs, or shifts in trade policies between the United States and other nations could disrupt supply chains, increase costs for businesses, and reduce export opportunities for our customers. These developments may, in turn, negatively impact these businesses and, by extension, our financial condition and results of operations.

A deterioration in economic conditions in the market areas we serve, be itwhether due to inflation,recessionary aconditions, recession,inflation war,or deflation, interest rate volatility, geopolitical conflicts, market instability, adverse weather conditions,events, or other factors could result in the following consequences, any of which could have a materially adverse effect on our business, financial condition, or results of operationsoperations. Any of these conditions could lead to:

•Reduced demand for our products and services, potentially leading to alower declineloan inoriginations, ourdeposits, overalland loansother or assetsrevenues;

A decline in local economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are geographically more diverse. Many of the loans in our portfolio are secured by real estate. Real estate values are affected by various factors, including economic conditions, governmental rules or policies, natural disasters such as earthquakes,disasters, and trade-related pressures that may affect construction costs or materialsavailability availability.of materials. If we are required to liquidate a significant amount of collateral during a period of reduced real estate values, our financial condition and profitability could be adversely affected.

We have a substantial portfolio of commercial and multi-family real estate, as well as commercial and industrial loans, and we intend to continue increasing originations of these loan types. These loans carry credit risks that could adversely affect our financial condition and results of operations.

As of December 31, 2024,2025, our portfolio included commercial real estate, multi-family real estate, and commercial and industrial loans totaling $683.9$765.7 million, constituting approximately 58.2%64.1% of our total loans and leases. Commercial loans typically involve larger principal amounts than other types of loans, and some of our commercial borrowers have more than one loan outstanding with us. Consequently, an adverse development related to a single commercial loan or credit relationship poses a significantly greater risk of loss compared to one-to-four family residential mortgage loans. Repayment of commercial loans often depends on the cash flow generated by the business or property involved, making them more sensitive to adverse conditions in the real estate market, business climate, or economy.broader economic environment. For loans secured by non-owner-occupied properties, repayments rely heavily on tenant rent payments, and downturns in thesoftening real estate marketconditions or weaker economic conditionsactivity heighten repayment risks. In addition, many of our commercial real estate loans are not fully amortizing and require large balloon payments upon maturity, which may necessitate the borrower to sell or refinance the property, increasing the risk of default.

Commercial businessand industrial loans typically are made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. A borrower's cash flow can be unpredictable, and collateral securing these loans may fluctuate in value. For loans secured by accounts receivable, repayment is often dependentdepends on the borrower's ability to collect from clients, while other forms of collateral may be difficult to appraise, illiquid, or affectedsubject byto businessrisks success.tied to the borrower's operating performance. Increases in reserves and charge-offs related to our commercial and industrial loan portfolio could materially impact our business, financial condition, operations,operating results, and prospects.

As of December 31, 2024,2025, our construction and development loans totaled $132.6$71.7 million, accounting for approximately 11.3%6.0% of our total loan portfolio. This comprisesportfolio $126.2is comprised of $65.2 million in commercial construction loans and $6.3$6.5 million in residential real estate construction loans, reflecting a substantial increase from the $58.4 million, constituting 7.8% of total loans, reported at December 31, 2020.

Moreover, approximately $51.1$55.1 million or 34.4%37.7% of our total lease portfolio is to customers located in California, New York, Florida, and Arkansas.Texas. Adverse economic conditions within these market areas may reduce our leasing volume and affect our customers' ability to make lease payments, resulting in higher defaults, which may result in our inability to fully recover our investment in the related equipment and adversely impact our business, financial condition, and results of operations.

We participate in loan participation agreements in which we are not the lead lender and rely on lead institutions to provide timely and accurate updates on changes in the credit quality of the underlying loans. If these institutions fail to deliver such updates in a timely manner, we may misstate our allowance for credit losses, which could result in unanticipated credit losses. Additionally, our dependence on lead institutions exposes us to counterparty risk, as financial distress or operational failures on their part may impair our ability to assess and manage credit risk effectively. Inadequate reporting of credit quality changes could also result in non-compliance with regulatory requirements, potentially leading to regulatory scrutiny, fines, or other enforcement actions. Moreover, delays or inaccuracies in credit updates could damage our reputation, eroding investor and stakeholdercustomer confidence in our risk management practices. Failure to properly assess and disclose risks associated with loan participations may further expose us to legal liabilities, including litigation from investors or regulatory agencies alleging mismanagement or inadequate disclosures. At December 31, 2024,2025, we held $104.4$83.4 million in loan participations in which we were not the lead lender.

Our securities portfolio is impacted by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings. Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand. Management evaluates securities for impairment on a quarterly basis, with more frequent evaluation for selected issues. In analyzing a debt issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, industry analysts’ reportsreports, and, to a lesser extent given the relatively insignificant levels of depreciation in our debt portfolio,and spread differentials between the effective rates on instruments in the portfolio compared to risk-free rates. In analyzing an equity issuer’s financial condition, management considers industry analysts’ reports, financial performance and projected target prices of investment analysts within a one-year time frame. If this evaluation shows impairment to the actual or projected cash flows associated with one or more securities, a potential loss to earnings may occur. Changes in interest rates can also have an adverse effect on our financial condition, as our available-for-sale securities are reported at their estimated fair value, and therefore are impacted by fluctuations in interest rates. We increase or decrease our stockholders’ equity by the amount of change in the estimated fair value of the available-for-sale securities, net of taxes. Declines in market value could result in impairments of these assets, which would lead to accounting charges that could have a material adverse effect on our net income and capital levels. As of December 31, 2024,2025, we had no securities that were deemed impaired.

We sell a portion of our one- to four-family loans in the secondary market. We generally retain the right to service these loans through First Bank Richmond. At December 31, 2024,2025, the book value of our MSRs was $2.0$1.9 million. We useutilize a financial model that uses, wherever possible, quoted market prices to value our MSRs. This model is complex and also uses assumptions related to interest and discount rates, prepayment speeds, delinquency and foreclosure rates and ancillary fee income. Valuations are highly dependent upon the reasonableness of our assumptions and the predictability of the relationships that drive the results of the model. The primary risk associated with MSRs is that they will lose a substantial portion of their value as a result of higher than anticipated prepayments occasioned by declining interest rates. Conversely, these assets generally increase in value in a rising interest rate environment to the extent that prepayments are slower than anticipated. If prepayment speeds increase more than estimated, or delinquency and default levels are higher than anticipated, we may be required to write down the value of our MSRsMSRs, which could have a material adverse effect on our net income and capital levels. We obtain independent valuations quarterly to determine if impairment in the asset exists.

Our size makes it more difficult for us to compete.

Our asset size makes it more difficult to compete with other financial institutions that are larger and can more easily afford to invest in the marketing and technologies needed to attract and retain customers. Because our principal source of income is the net interest income we earn on our loans and investments after deducting interest paid on deposits and other sources of funds, our ability to generate the revenues needed to cover our expenses and finance such investments is limited by the size of our loan and investment portfolios. Accordingly, we are not always able to offer new products and services as quickly as our competitors. Our lower earnings may also make it more difficult to offer competitive salaries and benefits. In addition, our smaller customer base may make it difficult to generate meaningful non-interest income from such activities as securities brokerage or the sale of insurance products. Finally, as a smaller institution, we are disproportionately affected by the continually increasing costs of compliance with new banking and other regulations.

Our business requires us to collect, process, transmit and store significant amounts of confidential information regarding our customers, employees and our own business, operations, plans and business strategies. Our operational and security systems infrastructure, including our computer systems, data management and internal processes, as well as those of third parties, are integral to our performance. Our operational risks include the risk of malfeasance by employees or persons outside our company, errors relating to transaction processing and technology, systems failures or interruptions, breaches of our internal control systems and compliance requirements, and business continuation and disaster recovery. Insurance coverage may not be available for such losses, or where available, such losses may exceed insurance limits. This risk of loss also includes the potential for legal actions that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards or customer attrition due to potential negative publicity.

Our business heavily relies on electronic communication and information systems, serving as the backbone for our operations and storage of sensitive data. Any disruption, failure, or breach in the security of these systems could significantly disrupt our operations. Cybersecurity threats encompass a range of incidents, including unauthorized access attempts, data breaches, computer viruses, and denial-of-service attacks. These events may lead to data theft, misuse, loss, or destruction, compromising confidential customer information, account takeovers, or service unavailability. These threats can stem from multiple sources, ranging from human errors to deliberate acts of malice from internal or external parties, or even unforeseen technological failures. Despite our proactive measures, including encryption, authentication technologies, and extensive education initiatives for both employees and customers, theThe expanding use of cloud services and remote work technologies exposes us to heightened vulnerability to cyber-attacks. The risk associated with security breaches or disruptions, especially those stemming from cyber-attacks, has become more pronounced due to the increasing sophistication and frequency of global intrusion attempts. Despite our continuous efforts to maintain the security and integrity of our information systems and implement robust risk management strategies, there'sthere is an inherent challenge. Cyber-attacks often evolve at a pace that makes it difficult to proactively anticipate and mitigate them effectively. The dynamic nature of these threats means it's nearly impossible to entirely eliminate the risk. In the unfortunate event of a cyber-attack, delayed identification or response to the breach could significantly worsen its impact on our business, financial standing, and operational integrity. While we maintain specialized cyber insurance coverage, it may not cover every potential breach scenario, leaving certain instances uncovered.

A significant portion of our loan portfolio is secured by real estate, and we could become subject to environmental liabilities with respect to one or more of these properties, or with respect to properties that we own in operating our business. During the ordinary course of business, we may foreclose on and take title to properties securing defaulted loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous conditions or toxic substances are found on these properties,found, we may be liable for remediation costs, as well as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property. Environmental laws may require us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. Our policies, which require us to perform an environmental review before initiating any foreclosure action on non-residential real property, may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on us.

Our business operations are significantly influenced by the extensive body of accounting regulations in the United States. Regulatory bodies periodically issue new guidance, altering accounting rules and reporting requirements, which can substantially affect the preparation and reporting of our financial statements. These changes mightmay necessitate retrospective application, potentially leading to restatements of prior period financial statements.

One such recent significant change in 2023 was the implementation of the Current Expected Credit Losses (“CECL”) model, which we adopted on January 1, 2023. Under the CECL model, financial assets carried at amortized cost, such as loans and held-to-maturity debt securities, will beare presented at the net amount expected to be collected. This forward-looking approach in estimating expected credit losses contrasts starkly with the former GAAP's "incurred loss" model, delaying recognition until a loss is probable. CECL mandates considering historical experience, current conditions, and reasonable forecasts affecting collectability, leading to periodic adjustments of financial asset values. However, this forward-looking methodology, reliant on macroeconomic variables, introduces the potential for increased earnings volatility due to unexpected changes in these indicators between periods.

The effects of climate change continue to raise significant concerns about the state of the environment. However,Federal underand the new Trump administration, federalstate policy may shiftapproaches to reduce the emphasis on climate change initiativescontinue to evolve, and environmentalchanges regulations.in Thislegislative or regulatory priorities could include scaling back federal participation in international agreements, such asalter the Paris Agreement,requirements and reducingexpectations regulatory pressuresplaced on businesses, including banks, to address climate-related risks. Legislative and regulatory proposals aimed at combating climate change may face greater scrutiny or diminished priority.

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

CompaniesIn arerecent facingyears, increasingcompanies have faced scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure. Investor advocacy groups, investment funds, and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights. Increased ESG-related compliance costs could result in increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements, or investor or stakeholder expectations and standards, could negatively impact our reputation, ability to do business with certain partners, and our stock price.

Recent changes in the regulatory landscape underand theshifting newfederal administrationpriorities have moved toward a reduction in emphasis on certain ESG priorities, particularly around climate change and diversity, equity, and inclusion ("DEI"). This shift ishas leadingled to thea rollback of regulations that mandate specific disclosures and operational practices in these areas. However, some stakeholder groups continue to demand greater transparency and action, resulting in a complex and potentially conflicting environment for companies. If regulatory enforcement of ESG-related policies becomes less stringent, companies may face reputational risks if their practices are seen as insufficient or inconsistent with broader societal expectations, especially related to DEI and environmental stewardship. As a result, navigating this evolving regulatory and public opinion landscape may require us to balance compliance with regulatory requirements against maintaining investor, customer, and stakeholder trust.

Holders of our common stock are only entitled to receive such dividends as our board of directors may declare out of funds legally available for such payments. The declaration and payment of future cash dividends will be subject to, among other things, regulatory restrictions, our then current and projected consolidated operating results, financial condition, tax considerations, future growth plans, general economic conditions, and other factors our board of directors deems relevant. Richmond Mutual Bancorporation will dependdepends primarily upon the proceeds it retained from theits initial public offering as well as earnings of First Bank Richmond to provide funds to pay dividends on our common stock. The payment of dividends by First Bank Richmond is also subject to certain regulatory restrictions. Federal law generally prohibits a depository institution from making any capital distributions (including payment of a dividend) to its parent holding company if the depository institution would thereafter be or continue to be undercapitalized, and dividends by a depository institution are subject to additional limitations. As a result, any payment of dividends in the future by Richmond Mutual Bancorporation may depend on First Bank Richmond’s ability to satisfy these regulatory restrictions and its earnings, capital requirements, financial condition and other factors.

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

•statements regarding the quality of our loanloan, lease, and investment portfolios; and

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

•changes in the interest rate environment,levels and volatility, and the timing and pace of such changes including increasesactions or decreases inby the Federal Reserve benchmarkin rateresponse and the duration of such changed levelsthereto;

•the impact of inflation and the Federal Reserve monetary policiesand fiscal policy responses thereto, and their impact on consumer and business behavior;

•the effects of anya federal government shutdownshutdown, debt ceiling standoff, or other fiscal policy uncertainty;

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

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

•legislative or regulatory changes, including changesbut not limited to shifts in banking,capital securities,requirements, banking regulation, tax law,laws, regulatoryor policies,consumer andprotection principleslaws;

•geopolitical developments and international conflicts, or the potential imposition of new or increased tariffs or changes to existingand trade policiesrestrictions, thatwhich couldmay affectdisrupt financial markets, global supply chains, commodity prices, or economic activity orin specific industry sectors;

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

Determining the appropriateness of the allowance for credit losses is complex and requires judgementjudgment by management on future factors that are unknown. We have an established process to determine the adequacy of the allowance for credit losses. The determination of the allowance is inherently subjective, as it requires significant estimates, including the amounts and timing of expected future cash flows on similarly-risked loans in their respective segments, the amounts and timing of expected future cash flows on collateral-dependent loans, movement through risk-ratings, economic forecasts, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and other factors, all of which may be susceptible to significant change.

We are a community-oriented financial institution dedicated to serving the needs of customers in our primary market area. Our commitment is to offer a full array of consumer and commercial banking products and services to meet the needs of our customers. We offer mortgage lending products to qualified borrowers to give them the broadest access to home ownership in our markets. We offer commercial lending products and services tailored to complement their businesses. Our goal is to maintain asset quality while continuing to build our strong capital position while looking for growth opportunities in the markets we serve. In furtherance of these objectives, we have entered into a definitive agreement to merge with Farmers Bancorp, which we believe will enhance our scale, expand our market presence, and improve our ability to serve customers across a broader geographic footprint. To achieve these goals, we will focus on the following strategies:

Lending. We believe that commercial lending offers an opportunity to enhance our profitability while managing credit, interest rate and operational risk. We seek quality commercial loan opportunities in our existing markets and purchase loan participations that complement our existing portfolios. We will continue to focus our efforts on our existing marketsmarkets. asIn wellconnection aswith our pending merger, we expect to furtherexpand developour commercial and consumer lending presence into the Columbus,markets Ohioserved marketby throughFarmers ourBancorp loanand productionevaluate office.opportunities to leverage combined lending expertise and customer relationships. We anticipate that the majority of our commercial and multi-family real estate and commercial construction loan originations will range in size from $1.0 million to $8.0 million, while the majority of our commercial and industrial loan originations will range in size from $250,000 to $1.5 million. At December 31, 2024,2025, our commercial loan portfolio, which includes commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, totaled $816.5$837.4 million, or 69.5%70.2% of total loans and leases, with approximately $236.9$223.1 million of these loans, or 20.2%18.7% of our total loans and leases, located in the Columbus, Ohio market.

Deposit Services. Deposits are our primary source of funds for lending and investment. We intend to continue to focus on increasing core deposits (which we define as all deposits except for certificates of deposit of $250,000 or more and brokered certificates of deposit) in our primary market area, with a particular emphasis on noninterest-bearing deposits. We will continue to enhance our offering of retail deposit products to maintain and increase our market share, while continuing to build our product offering of commercial deposit products to strengthen our relationships with our business customers. Following the completion of the pending acquisition, we expect to leverage the combined branch network and customer base to enhance core deposit growth and broaden our funding base. Core deposits represented 70.1%71.3% of our total deposits as of December 31, 2024.2025.

Balance Sheet Growth. As a result of our efforts to build our management and infrastructure, we believe we are well-positioned to increase the size of our balance sheet without a proportional increase in overhead expense or operating risk. Accordingly, we intend to increase, on a managed basis, our assets and liabilities, particularly loans and deposits. The pending merger is expected to accelerate balance sheet growth and provide opportunities for cost efficiencies and operating leverage, subject to regulatory approval and successful integration.

Asset Quality. We believe that strong asset quality is a key to long-term financial success. Our strategy for credit risk management focuses on an experienced team of credit professionals, well-defined credit policies and procedures, appropriate loan underwriting criteria and active credit monitoring. Non-performing loans increased during 2025 compared to the prior year, primarily reflecting stress in certain commercial real estate relationships and the migration of a limited number of commercial credits to nonaccrual status. We are actively monitoring these credits and have taken steps, including enhanced oversight and collection efforts, to address these matters. Our non-performing loans to total loans ratio was 0.58%1.46% at December 31, 2024.2025.

Capital Position. Our policy has always been to protect the safety and soundness of First Bank Richmond through credit and operational risk management, balance sheet strength, and sound operations. The end result of these activities has been a capital ratio in excess of the well-capitalized standards set by our regulators. We believe that maintaining a strong capital position safeguards the long-term interests of First Bank Richmond. We expect to maintain capital levels consistent with "well-capitalized" regulatory standards following the completion of the pending merger.

Interest Rate Risk Management. Changes in interest rates are our primary market risk as our balance sheet is almost entirely comprised of interest-earning assets and interest-bearing liabilities. As such, fluctuations in interest rates have a significant impact not only upon our net income but also upon the cash flows related to those assets and liabilities and the market value of our assets and liabilities. In order toTo maintain what we believe to be acceptable levels of net interest income in varying interest rate environments, we actively manage our interest rate risk and assume a moderate amount of interest rate risk consistent with board policies. We will evaluate the combined balance sheet profile following the completion of the merger to ensure continued alignment with our board-approved interest rate risk parameters.

General. Total assets increased $44.3$20.9 million, or 3.0%,1.4%, to $1.5 billion at December 31, 20242025 from December 31, 2023.2024. The increase was driven by a $68.8$17.9 million, or 6.3%,1.5%, increase in the loan and lease portfolio, net of allowance for credit losses on loans and leases, partially offset by a $25.9$7.0 million, or 9.0%2.7% decrease in investment securities. The increase in loans and leases was primarily funded by a $52.8$21.0 million, or 5.1%,1.9%, increase in deposits, driven largely by growth in core retail deposit categories and a reduction in reliance on brokered deposits.

Loans and Leases. Our loan and lease portfolio, net of allowance for credit losses on loans and leases, increased $68.8$17.9 million, or 6.3%,1.5%, to $1.2 billion at December 31, 20242025 from $1.1$1.2 billion at December 31, 2023.2024. The majority of the growth occurred in multi-family loans which increased $47.1 million, or 33.9%, to $185.9 million, and in commercial real estate loans which increased $30.1$42.6 million, or 8.8%,11.5%, to $371.7$414.3 million, and in multi-family loans which increased $23.0 million, or 12.4%, to $208.9 million at December 31, 20242025 compared to the prior year. We also experienced a $10.9$16.1 million, or 9.5%,12.8%, increase in commercial and industrial loans, and a $16.4$1.7 million, or 9.5%,0.9%, increase in residential real estate loans (including home equity lines of credit)., which was attributable to a $3.3 million increase in home equity lines of credit, partially offset by a $1.6 million decrease in residential mortgage loans. Offsetting these increases were a $25.2$60.7 million, or 16.0%,45.9%, decrease in construction and development loans, ana $8.5$2.3 million, or 5.4%,1.6%, decrease in direct financing leases, and a $2.0$1.9 million, or 8.8%,9.1%, decrease in consumer loans. The decrease in construction and development loans was primarily due to completed projects converting to permanent financing.

Allowance for Credit Losses. On January 1, 2023, the Company 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. The allowance for credit losses on loans and leases totaled $15.8$16.5 million, or 1.34%1.38% of total loans and leases outstanding at December 31, 2024,2025, compared to $15.7$15.8 million, or 1.42%,1.34%, of total loans and leases at December 31, 2023.2024. Net charge-offs during 20242025 were $1.5$1.7 million, compared to net charge-offs of $678,000$1.5 million during 2023.2024. The Company's allowance for credit losses on unfunded commitments, which is reported in other liabilities on the Condensed Consolidated Balance Sheets, totaled $558,000$328,000 and $1.6 million$558,000 at December 31, 20242025 and December 31, 2023,2024, respectively. The decrease in the allowance for credit losses on unfunded commitments was primarily due to lower unfunded loan commitments.

Investment Securities. Investment securities decreased $25.9$7.0 million, or 9.0%,2.7%, to $254.7 million at December 31, 2025, from $261.7 million at December 31, 2024, from $287.6 million at December 31, 2023.2024. The decrease was primarily due to maturities and paydowns of securities of $22.1$19.3 million,million and the sale of $6.9$6.8 million of available-for-sale securities, andpartially offset by a $3.5$14.2 million downwardupward mark-to-market adjustment in the fair value of securities available for sale,sale partiallydue offsetto bya thereduction purchasein market rates of $7.5 million of new securities.interest.

Deposits. Total deposits increased $52.8$21.0 million, or 5.1%,1.9%, to $1.1 billion at December 31, 20242025 compared to December 31, 2023.2024. This increase was primarily due to an increaseincreases in savingsretail and money-market accounts of $44.5 million, or 17.3%, as well as an increase in (non-brokered) time deposits of $40.3$26.0 million, or 16.2%.9.0%, savings and money market accounts of $18.0 million, or 6.0%, and interest-bearing demand deposits of $8.6 million, or 6.3%. These increases were partially offset by a decrease of $20.8$21.6 million, or 7.8%, in demand deposit accounts, and an $11.3 million, or 4.2%, decrease8.4%, in brokered time deposits.deposits, Managementand attributesa the$10.0 shiftmillion, or 10.0%, decrease in fundsnoninterest-bearing fromdemand transaction accounts to retail certificates of deposit, which primarily occurred during the first nine months of 2024, to customers taking advantage of higher rates being paid on time deposits as a result of interest rate hikes instituted by the Federal Reserve.deposits. At December 31, 2024,2025, brokered deposits equaled $235.9 million, or 21.2% of total deposits compared to $257.6 million, or 23.5% of total deposits comparedat toDecember $268.831, 2024. At December 31, 2025, noninterest-bearing deposits totaled $100.1 million, or 25.8%9.0% of total deposits, compared to $110.1 million, or 10.1%, of total deposits at December 31, 2023. At December 31, 2024, noninterest-bearing deposits totaled $110.1 million, or 10.1% of total deposits, compared to $114.4 million, or 11.0%, of total deposits at December 31, 2023.2024.

Borrowings. Borrowings, consisting solelyprimarily of FHLB advances, totaled $252.0 million at December 31, 2025, compared to $265.0 million at December 31, 2024,2024. comparedIn addition to $271.0FHLB advances, other borrowings, consisting entirely of federal funds purchased, totaled $12.0 million at December 31, 2023.2025. There were no federal funds purchased at December 31, 2024.

Stockholders’ Equity. Stockholders’ equity totaled $132.9$145.8 million at December 31, 2024,2025, aan decreaseincrease of $2.0$12.9 million, or 1.5%,9.7%, from December 31, 2023.2024. The decreaseincrease in stockholders’ equity primarily was the result of thenet paymentincome of $5.7$11.6 million in dividends to Company stockholders, the repurchase of $5.0 million of Company common stock, and an increase$11.2 million decrease in Accumulated Other Comprehensive Loss ("AOCL") of $2.8 million,, partially offset by netthe incomepayment of $9.4$5.8 million.million in dividends to Company stockholders and the repurchase of $5.6 million of Company common stock. The increasedecrease in AOCL was primarily due to reductionsincreases in mark-to-market values associated with our available for sale investment securities portfolio, dueresulting tofrom increasesa reduction in market interestrates rates.of interest. At December 31, 2024,2025, the available for sale portfolio had a net unrealized loss of $58.0$43.7 million compared to a net unrealized loss of $54.5$58.0 million at December 31, 2023.2024. The AOCL impact to equity, after tax effecting the unrealized loss, was $34.6 million at December 31, 2025, compared to $45.8 million at December 31, 2024, compared to $43.0 million at December 31, 2023.2024. First Bank Richmond was considered “well-capitalized” as defined by all regulatory standards as of December 31, 2024.2025.

General. Net income totaled $9.4$11.6 million for 20242025 compared to $9.5$9.4 million in 2023,2024, aan decreaseincrease of $109,000$2.2 million or 1.2%.23.5%. The decreaseincrease in net income was due to a $1.3$5.1 million, or 4.3%,13.3%, increase in non-interestnet expense,interest income and a $304,000 increase in noninterest income, partially offset by a $1.0$1.6 million, or 2.8%,291.3%, increase in netprovision interestfor income,credit losses, a $147,000,$1.1 million, or 3.2%,3.3%, increase in non-interestnoninterest income,expense, and a $30,000,$590,000, or 1.9%,39.7%, decreaseincrease in income tax expense.

Interest Income. Total interest income for 20242025 increased $13.1$5.4 million, or 19.5%,6.7%, over 2023.2024. The increase primarily was a result of a 5728 basis point increase in the average yield on interest earning assets, alongside a $97.0$22.3 million increase in the average balance of interest earning assets. Interest earned on loans and leases increased $12.8$5.8 million, or 21.8%,8.1%, due to a $101.5$37.9 million increase in the average balance of and a 6229 basis point increase in the average yield earned on loans and leases. Interest earned on investment securities, excluding FHLB stock, decreased $332,000,$401,000, or 4.6%,5.8%, due to an $11.9$18.9 million decrease in the average balance of the portfolio. Dividends on FHLB stock increased $381,000, or 44.8%,$4,000 during 20242025 compared to the prior year. The average yield on FHLB stock during 2025 and 2024 was 8.89%, up 97 basis points from 7.92% during the prior year, while the average balance of FHLB stock outstanding during 2025 and 2024 was $13.9 million, up from $10.8 million during 2023.million. Interest on cash and cash equivalents increaseddecreased $265,000$9,000 due to a 5074 basis point decrease in the average yield, partially offset by a $3.2 million increase in the average yield.balance.

Interest Expense. Total interest expense increased $12.1 million,$242,000, or 40.6%,0.6%, to $42.1 million during 2025 compared to $41.8 million during 2024 compared to $29.7 million during 2023.2024. The increase primarily was the result of an increase in the average rate paid on certificate of deposit accounts, savingsborrowings, and money market accounts, and borrowings and, to a lesser extent, an increase in average balance of certificate of deposit accountsborrowings and borrowings.savings and money market accounts. The average rate paid on certificateborrowings, consisting primarily of depositFHLB accountsadvances, increased 8920 basis points to 4.18%4.13% from 3.29%3.93% in 2023,2024, while the average balance of certificate of deposit accountsborrowings increased $47.9$6.1 million, or 9.4%,2.4%, to $557.2$262.1 million in 20242025 compared to $509.3$256.0 million in 2023,2024, resulting in a $6.5 million$745,000 increase in interest expense. The average rate paid on savings and money market accounts increaseddecreased 57nine basis points to 2.39%2.30% from 1.82%2.39% in 2023,2024, while the average balance of those accounts increased $11.4$26.3 million, or 4.2%,9.2%, to $312.3 million in 2025 compared to $285.9 million in 2024 compared to $274.5 million in 2023,2024, resulting in a $1.8$341,000 increase in interest expense. The average balance of certificate of deposit accounts decreased $13.5 million, or 2.4%, to $543.7 million increasein 2025 from $557.2 million in 2024, while the average rate paid on certificate of deposit accounts decreased three basis points to 4.15% in 2025 from 4.18% in 2024, resulting in a $742,000 decrease in interest expense. The average balance of interest-bearing checking accounts decreased $6.1 million,$748,000, or 4.1%,0.5%, to $141.2 million in 2025 from $141.9 million in 2024 from $148.0 million in 2023,2024, while the average rate paid on interest-bearing checking accounts increaseddecreased 42six basis points to 1.07% in 2025 from 1.13% in 2024 from 0.71% in 2023,2024, resulting in a $555,000$102,000 increasedecrease in interest expense. Interest expense on borrowings, consisting solely of FHLB advances, increased $3.1 million, or 45.1%, due to a 75 basis point increase in the average rate paid to 3.93% in 2024 from 3.18% in 2023, and a $37.9 million, or 17.4%, increase in the average balance of borrowings to $256.0 million in 2024 from $218.0 million in 2023.

Provision for Credit Losses. The provision for credit losses in 20242025 was $550,000,$2.2 anmillion, $18,000,a $1.6 million, or 3.4%,291.3%, increase compared to $532,000$550,000 in 2023.2024. The provision for credit losses reflects the amount required to maintain the allowance for credit losses at an appropriate level based upon management’s evaluation of the adequacy of collective and individual loss reserves.reserves and reflects higher required reserves driven by the significant increase in nonperforming loans during 2025. Additionally, growth in the commercial real estate, multi-family, and commercial and industrial loan portfolios increased the allowance, as these portfolios generally carry higher reserve requirements relative to other segments. Net charge-offs during 20242025 were $1.5$1.7 million, compared to net charge-offs of $678,000$1.5 million in 2023.2024. The allowance for credit losses on loans and leases as a percentage of the total loan and lease portfolio was 1.38% at year-end 2025, compared to 1.34% at year-end 2024, compared to 1.42% at year-end 2023.2024. Net charge-offs in 20242025 equaled 0.13%0.14% of total average loans and leases outstanding compared to net charge-offs of 0.06%0.13% of total average loans and leases outstanding in 2023.2024.

Non-interest Income. Total non-interest income increased $147,000,$304,000, or 3.2%,6.4%, to $5.1 million for 2025 compared to $4.8 million for 2024 compared to $4.6 million for 2023.2024. The increase was primarily driven by an increase in serviceother charges on deposit accounts of $124,000, or 11.1%, to $1.2 million in 2024 from $1.1 million in 2023, due to higher transaction activityincome and accountloan maintenanceand fees,lease coupledservicing with year-over-year deposit growth.fees. Other income increased $45,000,$230,000, or 3.5%,17.5%, to $1.3$1.5 million in 20242025 as compared to 2023,2024, due to increased wealth management income. Net gains on loan and lease sales increased $37,000, or 7.1%, to $555,000 in 2024 as compared to 2023, due to increased mortgage banking activity resulting from a decrease in market interest rates during the second half of 2024 and improved housing inventory. Loan and lease servicing fees increased $15,000,$217,000, or 3.4%,46.9%, to $463,000$681,000 in 20242025 as compared to 2023,2024, due to increased mortgagefees originations.from the payoff of serviced loans. Partially offsetting these increases were net losses recognized on the sale of securities available-for-sale of $51,000,$156,000, compared to nonet losses orof gains$51,000 recognized in 2023.2024. InNet addition,gains cardon feeloan incomeand lease sales decreased $22,000,$145,000, or 1.7%, due26.2%, to lower contract fees$409,000 in 20242025 as compared to 2023.2024, due to reduced mortgage banking activity.

Management’s discussion and analysis of financial condition of the Richmond Mutual Bancorporation, Inc. (the “Company”) at MarchJune 31,30, 2026, and the consolidated results of operations for the three and six month periods ended MarchJune 31,30, 2026, compared to the same periods in 2025, is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto appearing in Part I, Item 1, of this Form 10-Q.

•ourthe ability to adapt to rapid technological changes, including advancements inrelated to artificial intelligence,intelligence ("AI"), the use of AI models in credit decisioning, customer service, and operations, including risks of model error, bias, regulatory scrutiny under fair lending laws, and third-party AI dependencies, digital banking,banking platforms, and cybersecurity;

Further,In addition, statements about the potential effects of the Company’s proposedcompleted merger with The Farmers Bancorp, Frankfort, Indiana ("Farmers Bancorp") on the Company’s business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factors and future developments which are uncertain, unpredictable and in many cases beyond the Company’s control, including the following:

•the potential that anticipated cost savings, synergies, or revenue enhancements from the merger may not be realized to the extent anticipated, or at all, or may take longer to achieve than expected;

•the ability to successfully integrate the operations, systems, personnel, and technologies post-mergerof the combined company;

•diversion of management’s attention from ongoing operations and strategic initiatives as a result of integration activities;

•other factors detailed in Richmondthe Mutual’sCompany's filings with the SEC.

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

First Bank RichmondMidwest 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. On July 1, 2026, the Company completed its merger with The formerFarmers MutualBancorp, FederalFrankfort, SavingsIndiana ("Farmers Bancorp"), and The Farmers Bank continuesmerged towith operateand ininto OhioFirst Bank Richmond. Following completion of the merger, First Bank Richmond operates under the name Mutual Federal, a division of First Bank Richmond.Midwest.

First Bank RichmondMidwest provides a full range of banking services through its sevenbranch full- and one limited-service offices locatedlocations in Cambridge CityCity, (1),Centerville, CentervilleFishers, (1),Frankfort, RichmondKirklin, (5)Lebanon, Michigantown, Mulberry, Noblesville, Richmond, Rossville, Shelbyville, Sheridan, Tipton, and ShelbyvilleWestfield, (1), IndianaIndiana, and its six full-service offices locatedlocations in PiquaColumbus, (2),Sidney, Sidney (2), Troy (1),Piqua, and Columbus (1),Troy, Ohio. Additionally, the Bank operates a loan production office in Carmel, Indiana. Administrative, trusttrust, and wealth management services are conducted through Firstthe BankBank's Richmond’s Corporate Office/Financial Center located in Richmond, Indiana, as well as its branch located in Frankfort, Indiana. As an Indiana-chartered commercial bank, Firstthe Bank Richmond is subject to regulation by the IDFI and the Federal Deposit Insurance Corporation (“FDIC”).

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

FirstThe Bank Richmond generates commercial, mortgage and consumer loans and leases and gathers deposits primarily within Wayneits andmarket Shelbyareas Counties,in Indiana and Shelby, Miami, and Franklin Counties, Ohio, whichincluding togetherthe comprisescommunities served by its primarybranch marketlocations. area. FirstThe Bank Richmond also operates a nationwide equipment leasing business, focusing on direct financing leases for equipment integral to small and mid-sized business operations, including technology, medical, manufacturing, industrial, construction, and transportation equipment. FirstThe Bank Richmond'sBank's trust and wealth management division provides fiduciary, investment management, and custodial services. Wealth management assets under management and administration totaled $249.9$268.9 million at MarchJune 31,30, 2026.

At MarchJune 31,30, 2026, on a consolidated basis, we had $1.5$1.6 billion in assets, $1.2 billion in loans and leases, net of allowance, $1.1 billion in deposits, and $144.9$148.3 million in stockholders’ equity. At MarchJune 31,30, 2026, Firstthe Bank Richmond’sBank’s total risk-based capital ratio was 14.62%,14.24%, exceeding the 10.0% requirement for a well-capitalized institution. For the threesix months ended MarchJune 31,30, 2026, net income was $2.8$5.0 million, compared with net income of $2.0$4.6 million for the threesix months ended MarchJune 31,30, 2025.

ProposedCompletion of Merger with The Farmers Bancorp, Frankfort, Indiana

On November 11, 2025, the Company entered into an Agreement and Plan of Merger (the “merger agreement”) with Farmers Bancorp, pursuant to which Farmers Bancorp willwas expected to merge with and into the Company, with the Company as the surviving corporation (the “merger”). ImmediatelyOn followingJuly 1, 2026, the merger,Company completed its merger with Farmers Bancorp. Immediately thereafter, The Farmers Bank will mergemerged with and into First Bank Richmond, with First Bank Richmond as the surviving institution.

Under the terms of the merger agreement, holders of Farmers Bancorp common stock will receivereceived 3.40 shares of Company common stock for each share of Farmers Bancorp common stock. The total value of the transaction will fluctuate based on the Company’s stock price prior to closing. Upon completion of the transaction,merger, former Farmers Bancorp shareholders are expected to own approximately 38% of the Company.Company's outstanding common stock. The merger is being accounted for as a business combination under ASC 805, Business Combinations, with the Company as the accounting acquirer.

The combined company will continuecontinues to trade on the Nasdaq Capital Market under the ticker symbol "RMBI." The holding company willcontinues to operate under the name "Richmond Mutual Bancorporation, Inc.," and the combined bank,bank subjectnow to regulatory approval, will operateoperates under the new name "First Bank MidwestMidwest.". The administrative headquarters of the combined company will be locatedremains in Richmond, Indiana, and the administrative headquarters of the combined bank will beis located in Frankfort, Indiana.

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

There have been no significant changes during the threesix months ended MarchJune 31,30, 2026 to the critical accounting estimates reported in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K. The completion of the merger with Farmers Bancorp on July 1, 2026 did not impact the critical accounting estimates used in the preparation of the Company's condensed consolidated financial statements as of and for the six months ended June 30, 2026. See "Critical Accounting Estimates" included in Part II, Item 7 of our 2025 Form 10-K for a further discussion of our Critical Accounting Estimates.

Comparison of Financial Condition at MarchJune 31,30, 2026 and December 31, 2025

General. Total assets decreasedincreased $6.6$26.2 million, or 0.4%,1.7%, to $1.5$1.6 billion at MarchJune 31,30, 2026 from December 31, 2025. The decreaseincrease was primarily the result of aan $6.8 million, or 2.7%, decrease in investment securities, to $247.9 million, and a $2.7 million, or 0.2%, decreaseincrease in loans and leases, net of allowance for credit losses, of $31.0 million, or 2.6%, to $1.2 billion, partially offset by a $1.7$7.0 million, or 5.0%,2.8%, increasedecrease in cashinvestment and cash equivalentssecurities to $34.8$247.6 million.

Investment Securities. Investment securities available for sale totaled $245.5$245.3 million and $251.9 million, while investment securities held to maturity totaled $2.4 million and $2.7 million at MarchJune 31,30, 2026 and December 31, 2025, respectively. The $6.4$6.6 million, or 2.5%,2.6%, decrease in investment securities available for sale was primarily due to $4.0$7.0 million in maturities and principal repayments and a $3.1 million downward mark-to-market adjustment on the investment portfolio,repayments, partially offset by $955,000 in purchases of securities. The $395,000$394,000 decrease in investment securities held to maturity was the result of scheduled principal repayments and maturities. The proceeds received from the maturities and repayments of investment securities were primarily used to fund loan growth consistent with the Company's strategy to prioritize loan growth and deploy liquidity into higher-yielding assets in a moderating interest rate environment.

Loans and Leases. Loans and leases, net of allowance for credit losses on loans and leases, decreasedincreased $2.7$31.0 million, or 0.2%,2.6% from December 31, 2025, to $1.2 billion at MarchJune 31,30, 20262026. fromThe December 31, 2025, resulting from decreasesincrease in residential mortgage, direct financing leases,loans and consumerleases loanswas attributable to increases in commercial and industrial loans, construction and development loans, commercial mortgage loans, and home equity lines of credit of $15.6 million, $14.5 million, $4.8 million, $2.8 million, and $1.1$2.3 million, respectively. These decreasesincreases were partially offset by a $2.7$2.2 million increasedecrease in commercialdirect andfinancing industrialleases, a $1.3 million decrease in consumer loans, a $1.1 million decrease in multi-family loans, and a $2.6$1.0 million increasedecrease in constructionresidential and developmentmortgage loans. At MarchJune 31,30, 2026, there were no loans held for sale totaled $835,000,sale, compared to $828,000 at December 31, 2025.

Nonaccrual loans and leases totaled $15.9$20.0 million at MarchJune 31,30, 2026, compared to $13.2 million at December 31, 2025. The increase was primarily due to onethe transfer of a $2.4 million multi-family loan of $2.4 million, which wasfrom past due 90 days or more and accruing atstatus as of December 31, 2025.2025 to nonaccrual status, and the addition of a $3.5 million multi-family loan that was placed on nonaccrual status during the second quarter of 2026 due to a troubled loan modification. Accruing loans and leases past due 90 days or more totaled $1.7$1.8 million and $4.2 million at MarchJune 31,30, 2026 and December 31, 2025, respectively.respectively, Thewith the decrease in accruing loans past due 90 days or more was primarily due to the transfer of the previously mentionedaforementioned multi-family loan to nonaccrual. Nonperforming loans and leases, consisting of nonaccrual loans and leases and accruing loans and leases 90 days or more past due, totaled $17.6 million, or 1.48% of total loans and leases, at March 31, 2026, compared to $17.4 million, or 1.46% of total loans and leases, at December 31, 2025.status.

Allowance for Credit Losses. The allowance for credit losses on loans and leases increased $274,000,$508,000, or 1.7%,3.1%, to $16.7$17.0 million at MarchJune 31,30, 2026 from December 31, 2025. At MarchJune 31,30, 2026, the allowance for credit losses on loans and leases totaled 1.41%1.39% of total loans and leases outstanding. At December 31, 2025, the allowance for credit losses on loans and leases totaled $16.5 million, or 1.38% of total loans and leases outstanding. Net charge-offs during the first three monthshalf of 2026 totaled $347,000,$904,000 and were primarily attributable to direct financing leases, compared to net charge-offs of $395,000$1.0 million during the first three monthshalf of 2025.

Management regularly analyzes conditions within its geographic markets and evaluates its loan and lease portfolio. The Company evaluated its exposure to potential loan and lease losses as of MarchJune 31,30, 2026, which evaluation included consideration of a potential recession due to inflation, stock market volatility, and overall geopolitical tensions. Credit metrics are being reviewed and stress testing is being performed on the loan portfolio on an ongoing basis. For additional information on the allowance for credit losses, see "Allowance for Credit Losses on Loans and Leases" and "Economic Outlook" in "Note 5: Loans, Leases and Allowance" of the "Notes to Condensed Consolidated Financial Statements" in this report.

Other Assets. Other assets increased $489,000,$533,000, or 2.6%,2.8%, to $19.3$19.4 million at MarchJune 31,30, 2026 from $18.8 million at December 31, 2025. The increase was primarily caused by an increase in the Company's deferredprepaid taxassets, asset,resulting reflectingfrom highernew unrealizedsoftware lossesand inservice the available for sale investment portfolio.implementations.

Deposits. Total deposits decreasedincreased $8.5$31.8 million, or 0.8%,2.8%, to $1.1 billion at MarchJune 31,30, 2026 from December 31, 2025. The decreaseincrease in deposits primarily was due to decreasesincreases in brokered time deposits of $28.3 million and savings and money market accounts of $11.0 million. These increases were partially offset by a decrease in retail (non-brokered) time deposits of $13.9 million, and savings and money market accounts of $3.1 million. These decreases were partially offset by an increase in interest-bearing demand deposits of $8.6$17.8 million. Brokered deposits totaled $236.5$264.3 million, or 21.4%23.0% of total deposits, at MarchJune 31,30, 2026, compared to $235.9 million, or 21.2% of total deposits, at December 31, 2025. At MarchJune 31,30, 2026, noninterest-bearing deposits totaled $99.4$100.1 million, or 9.0%8.7% of total deposits, compared to $100.1 million, or 9.0% of total deposits, at December 31, 2025.

As of MarchJune 31,30, 2026, approximately $247.9$271.6 million of our deposit portfolio, or 22.4%23.7% of total deposits, was uninsured, excluding collateralized public deposits, was uninsured.deposits. The uninsured amounts are estimated based on the methodologies and assumptions used for First Bank Richmond's regulatory reporting requirements.

Stockholders’ Equity. Stockholders’ equity totaled $144.9$148.3 million at MarchJune 31,30, 2026, aan decreaseincrease of $871,000,$2.5 million, or 0.6%,1.7%, from December 31, 2025. The decrease primarily resulted from a $2.5 million increase in accumulatedstockholders' otherequity comprehensivewas lossprimarily asattributable ato resultnet income of a$5.0 reductionmillion, inpartially fairoffset valuesby in the Company's available for sale investment portfolio, and the payment of $1.5$2.9 million in dividends paid to stockholders,Company partially offset by net income of $2.8 million.stockholders.

The available-for-sale portfolio had a net unrealized loss of $46.9$44.0 million at MarchJune 31,30, 2026, compared to $43.7 million at December 31, 2025. The after-tax impact of the AOCL on equity was $37.0$34.7 million at MarchJune 31,30, 2026, compared to $34.6 million at December 31, 2025.

The Company's equity to asset ratio was 9.54%9.55% at MarchJune 31,30, 2026. At MarchJune 31,30, 2026, Firstthe Bank Richmond'sBank's Tier 1 capital to total assets ratio was 11.10%10.90% and its capital was well in excess of all regulatory requirements.

Comparison of Results of Operations for the Three Months Ended MarchJune 31,30, 2026 and 2025.

General. Net income for the three months ended MarchJune 31,30, 2026 was $2.8$2.2 million, ana $817,000$375,000 or 41.5%14.4% increasedecrease from net income of $2.0$2.6 million for the three months ended MarchJune 31,30, 2025. Diluted earnings per share were $0.28$0.22 for the firstsecond quarter of 2026, compared to $0.20$0.26 diluted earnings per share for the firstsecond quarter of 2025. The increasedecrease in net income primarily was the result of an increase in noninterest expense of $2.1 million, primarily due to merger-related expenses, partially offset by an increase in net interest income of $1.2$1.3 million and an increase in noninterest income of $136,000, partially offset by an increase in noninterest expense of $331,000 and income tax expense of $214,000.$500,000.

Interest Income. Interest income increased $294,000,$552,000, or 1.4%,2.6%, to $21.2$21.9 million during the quarter ended MarchJune 31,30, 2026, compared to $20.9$21.3 million during the quarter ended MarchJune 31,30, 2025. The increase was primarily driven by growth inhigher interest income on loans and leases,leases partially offset by a decrease in interest incomeresulting from otherloan earninggrowth assets.and higher yields.

Interest income on loans and leases increased $337,000,$607,000, or 1.8%,3.2%, to $19.1$19.8 million for the quarter ended MarchJune 31,30, 2026, from $18.8$19.2 million for the comparable quarter in 2025. The increase was primarily driven by an increase of $29.8 million in the average balance of loans and leases, and a 10four basis point improvement in the average yield,yield. whichThe average yield on loans and leases rose to 6.46%6.55% from 6.36%,6.51%, as new loans and leases were originated at higher rates than the average yield in the existing loan and lease portfolio and existingsome variable rate loans adjustedrepriced upwardto higher rates during the period dueas toa theresult overallof higheran increase in market interest rate environment. The average outstanding loan and lease balance was relatively stable at approximately $1.2 billion for both periods.rates.

Interest income on investment securities, excluding FHLB stock, decreased $70,000,$31,000, or 4.2%,1.9%, to $1.6 million for the firstsecond quarter of 2026 from the comparable quarter in 2025. The decrease was due to a $5.3$1.1 million decrease in the average balance, primarily as a result of maturities and paydowns on securities, and a sixfour basis point decrease in the average yield earned on investment securities. The average yield on investment securities, excluding FHLB stock, decreased to 2.46%2.52% for the firstsecond quarter of 2026, compared to 2.52%2.56% for the firstsecond quarter of 2025. The average balance of investment securities, excluding FHLB stock, decreased to $256.8$250.6 million for the quarter ended MarchJune 31,30, 2026, compared to $262.1$251.7 million for the quarter ended MarchJune 31,30, 2025.

Dividends on FHLB stock decreased $20,000,$8,000, or 6.4%,2.6%, during the quarter ended MarchJune 31,30, 2026, from the comparable quarter in 2025, resulting in an average yield on FHLB stock of 8.37%8.66% for the three months ended MarchJune 31,30, 2026, compared to 8.95%8.89% for the three months ended MarchJune 31,30, 2025. Interest income on cash and cash equivalents increaseddecreased $47,000,$15,000, or 35.9%,6.3%, to $178,000$228,000 during the quarter ended MarchJune 31,30, 2026 from the comparable quarter in 2025, due to a $6.7 million increase in the average balance of cash and cash equivalents, partially offset by a 2940 basis point decrease in the average yield.

Interest Expense. Interest expense decreased $894,000,$762,000, or 8.4%,7.2%, to $9.7$9.8 million for the quarter ended MarchJune 31,30, 2026, compared to $10.6 million for the quarter ended MarchJune 31,30, 2025. The decrease reflected lower funding costs across both deposit and borrowing categories.

Interest expense on deposits decreased $546,000,$599,000, or 7.0%,7.7%, to $7.3$7.2 million for the quarter ended MarchJune 31,30, 2026, from $7.8 million for the comparable quarter in 2025. The decrease primarily was attributable to a 2832 basis point decrease in the average rate paid on interest-bearing deposits, which fell to 2.89%2.82% from 3.17%.3.14%. The average balance of interest-bearing deposits increased to $1.0 billion from $989.4$995.4 million, partially offsetting the rate-driven reduction in expense.

Interest expense on FHLB borrowings decreased $348,000,$163,000, or 12.6%,5.9%, to $2.4$2.6 million in the firstsecond quarter of 2026 compared to $2.8 million for the same quarter in 2025. The decrease was primarily attributable to aan $33.6$8.5 million reduction in the average balance of FHLB borrowings, which declined to $241.1$253.6 million from $274.7$262.1 million, reflectingand reduceda reliancedecrease onin wholesale funding. Thethe average rate paid on FHLB borrowings wasof relatively12 unchangedbasis atpoints 4.01%,to 4.12%, compared to 4.03%4.24% forin the comparablesecond quarter of 2025.

Net Interest Income. Net interest income before the provision for credit losses increased $1.2$1.3 million, or 11.6%,12.2%, to $11.4$12.1 million for the firstsecond quarter of 2026, compared to $10.3$10.8 million for the firstsecond quarter of 2025. This increase was due to a 32 basis point increase in the average interest rate spread and a $16.0$9.4 million increase in average net earning assets. The improved spread reflects a favorable shift in asset yields as loans and investment securities repriced to or were originated at higher market rates, paired with a decrease in funding costs.

Net interest margin (annualized) was 3.10%3.22% for the three months ended MarchJune 31,30, 2026, compared to 2.79%2.93% for the three months ended MarchJune 31,30, 2025. The increase in net interest margin was attributable to improved asset yields, particularly on loans and leases, paired with a decrease in funding costs. The Federal Open Market Committee maintained the target range at 3.50% to 3.75% through the first quarter of 2026 following rate reductions implemented in late 2025.