Richmond Mutual Bancorporation (RMBI) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $2.1 million, down 23.5% year-over-year and from $2.4 million in Q1 2024; six-month net income was $4.4 million, down 20.8%.

• Diluted EPS for Q2 2024 was $0.20 (vs. $0.26 in Q2 2023); six-month diluted EPS was $0.43 (vs. $0.53 in 2023).

• Total assets increased 2.3% to $1.5 billion at June 30, 2024, driven by loan and lease growth, partially offset by a decrease in investment securities.

• Average deposit balances and deposits increased, but net interest margin declined due to higher sensitivity of interest-bearing liabilities to rising rates.

• Loan portfolio performance remained strong, with growth in multi-family, commercial, residential, and C&I loans.

Financial highlights

• Net interest income for Q2 2024 was $9.6 million, up 2.6% year-over-year but down 2.6% sequentially; six-month net interest income was $19.4 million, up 1.1%.

• Net interest margin declined to 2.64% in Q2 2024 (from 2.77% in Q2 2023 and 2.74% in Q1 2024); six-month margin was 2.69%.

• Interest income increased 23.8% in Q2 2024, but interest expense rose 52.5% due to higher deposit and borrowing costs.

• Noninterest expense increased 9.8% year-over-year and 0.6% sequentially, mainly from higher salaries, benefits, and deposit insurance.

• Noninterest income was $1.2 million, up 3.5% sequentially but flat year-over-year.

Outlook and guidance

• Management expects continued economic growth in key markets, but notes persistent inflation, higher rates, and geopolitical risks may impact credit quality and loan demand.

• Management expects continued pressure on net interest margin until the interest rate environment moderates.

• Ongoing monitoring of credit metrics and stress testing of the loan portfolio in light of economic uncertainties.

• Future estimates for credit losses may fluctuate due to potential economic volatility for the remainder of 2024.

• The company plans to continue regular quarterly dividends and has extended its stock repurchase program through June 2025.