Richmond Mutual Bancorp Inc (RMBI) Announces Q3 2023 Financial Results Amidst Rising Interest Rates
Net income for Q3 2023 was $1.9 million, a decrease from $2.7 million in Q2 2023 and $3.2 million in Q3 2022.
Assets remained stable at $1.4 billion, with loans and leases net of allowance for credit losses totaling $1.1 billion.
Nonperforming loans and leases totaled $8.0 million, or 0.74% of total loans and leases, a decrease from 0.81% in Q2 2023 and 0.94% at the end of 2022.
Net interest income decreased by $206,000, or 2.2%, to $9.1 million for Q3 2023, compared to $9.3 million for Q2 2023, and $10.5 million for Q3 2022.
Richmond Mutual Bancorp Inc (NASDAQ:RMBI) released its Q3 2023 earnings report on October 20, 2023. The company reported a net income of $1.9 million, or $0.19 diluted earnings per share, a decrease from $2.7 million, or $0.26 diluted earnings per share, in Q2 2023, and $3.2 million, or $0.29 diluted earnings per share, in Q3 2022.
Performance Amidst Rising Interest Rates
Despite the challenges imposed by the current interest rate environment, Richmond Mutual Bancorp Inc (NASDAQ:RMBI) was able to continue growing loans and deposits and maintain profitability. The Federal Reserve's Open Market Committee raised its targeted federal funds rate an additional 25 basis points in July of 2023, hitting a 17-year high of 5.25-5.50 percent. In contrast, the Fed was holding the federal funds rate at around zero as recently as the first quarter of 2022.
Our net interest margin and overall profitability continue to be hampered by the current interest rate environment... In spite of the challenges imposed by the current interest rate environment, we were able to continue growing loans and deposits and maintain profitability. Furthermore, credit quality remained stable with nonperforming loans and leases totaling 0.74% of total loans and leases at September 30, 2023. - Garry Kleer, Chairman, President and Chief Executive Officer
Financial Highlights
Assets remained stable at $1.4 billion both at the end of Q3 2023 and Q2 2023, and totaled $1.3 billion at the end of 2022. Loans and leases, net of allowance for credit losses, totaled $1.1 billion at the end of Q3 2023, compared to $1.0 billion at the end of Q2 2023, and $961.7 million at the end of 2022. Nonperforming loans and leases totaled $8.0 million, or 0.74% of total loans and leases, at the end of Q3 2023, compared to $8.5 million, or 0.81% of total loans and leases, at the end of Q2 2023, and $9.2 million, or 0.94% at the end of 2022.
Income Statement Summary
Net interest income before the provision for credit losses decreased $206,000, or 2.2%, to $9.1 million in Q3 2023, compared to $9.3 million in Q2 2023, and decreased $1.4 million, or 13.2%, from $10.5 million in Q3 2022. The decrease from Q2 2023 was due to an 18 basis point decrease in the average interest rate spread, partially offset by a $27.9 million increase in average interest earning assets. The decrease from Q3 2022 was due to a 99 basis point decrease in the average interest rate spread, partially offset by a $134.5 million increase in average interest earning assets.
Balance Sheet Summary
Total assets increased $94.3 million, or 7.1%, to $1.4 billion at the end of Q3 2023 from the end of 2022. The increase was primarily the result of a $105.2 million, or 10.9%, increase in loans and leases, net of allowance for credit losses, to $1.1 billion at the end of Q3 2023, partially offset by a decrease of $22.2 million, or 7.6%, in investment securities to $269.4 million at the end of Q3 2023.
Despite the decrease in net income, Richmond Mutual Bancorp Inc (NASDAQ:RMBI) continues to maintain a stable financial position amidst a challenging interest rate environment.
This article first appeared on GuruFocus.
