Richmond Mutual Bancorporation, Inc. (RMBI)

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

Management’s discussion and analysis of financial condition of the Richmond Mutual Bancorporation, Inc. (the “Company”) at June 30, 2026, and the consolidated results of operations for the three and six month periods ended June 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.

The terms “we,” “our,” “us,” or the “Company” refer to Richmond Mutual Bancorporation, Inc. and its consolidated direct and indirect subsidiaries, including First Bank Richmond, which we sometimes refer to as the “Bank,” unless the context otherwise requires.

Cautionary Note Regarding Forward-Looking Statements

Certain matters in this Form 10-Q 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, are based on certain assumptions and are generally identified by use of words such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.”   These forward-looking statements include, but are not limited to:

•statements of our goals, intentions and expectations;

•statements regarding our business plans, prospects, growth and operating strategies;

•statements regarding the quality of our loan and investment portfolios; and

•estimates of our risks and future costs and benefits.

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, are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

Important factors that could cause our actual results to differ materially from the results anticipated or projected include, but are not limited to, the following:

•adverse impacts to economic conditions in our local market areas and other markets where we have lending relationships;

•effects of employment levels, labor shortages, persistent inflation, recessionary pressures, or slowing economic growth;

•changes in interest rate levels and the duration of such changes, including actions by the Board of Governors of the Federal Reserve System (the "Federal Reserve");

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

•effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty;

•changes in the level and direction of loan or lease delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses;

•our ability to access cost-effective funding including maintaining the confidence of depositors;

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•unexpected outflows of uninsured deposits may require us to sell investment securities at a loss;

•fluctuations in real estate values, and residential, commercial, and multi-family real estate market conditions;

•demand for loans and deposits in our market area;

•our ability to implement and change our business strategies;

•competition among depository and other financial institutions and equipment financing companies;

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

•inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on our loans and leases;

•adverse changes in the securities or secondary mortgage markets;

•changes in the quality or composition of our loan, lease or investment portfolios;

•our ability to keep pace with technological changes, including our ability to identify and address cyber-security risks such as data security breaches, "denial of service" attacks, "hacking" and identity theft, and other attacks on our information technology systems or on our third-party vendors;

•results of examinations by regulatory authorities and potential requirements to increase credit loss allowances, write-down assets, reclassify assets, change our regulatory capital position, or affect our liquidity and earnings;

•the inability of third-party providers to perform as expected;

•our ability to manage market risk, credit risk and operational risk in the current economic environment;

•our ability to enter new markets successfully and capitalize on growth opportunities;

•our ability to attract and retain key employees;

•our compensation expense associated with equity allocated or awarded to our employees;

•changes in the financial condition, results of operations or future prospects of issuers of securities that we own;

•our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto;

•changes in consumer spending, borrowing and savings habits;

•changes in accounting policies and practices, as may be adopted by banking 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;

•legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws;

•our ability to pay dividends on our common stock;

•the ability to adapt to rapid technological changes, including advancements related to artificial intelligence ("AI"), the use of AI models in credit decisioning, customer service, and operations, including risks of model error, bias,

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regulatory scrutiny under fair lending laws, and third-party AI dependencies, digital banking platforms, and cybersecurity;

•risk associated with the evolving regulatory and market environment for digital assets and cryptocurrency, including the potential impact on customer behavior, deposit flows, and our ability to offer or support related products or services;

•geopolitical developments and international conflicts, including but not limited to tensions or instability in Eastern Europe, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, energy prices, or economic activity in specific industry sectors;

•other economic, competitive, governmental, regulatory, and technical factors affecting our operations, pricing, products and services;

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

•the other risks detailed in this report and from time to time in our other filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K").

In addition, statements about the potential effects of the Company’s completed 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 or may take longer to achieve than expected;

•the ability to successfully integrate the operations, systems, personnel, and technologies of the combined company;

•disruption to customer, employee, or vendor relationships, including key community relationships;

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

•lower-than-expected revenues or profitability following the merger;

•higher-than expected transaction or integration costs; and

•other factors detailed in the Company's filings with the SEC.

These forward-looking statements are based on information known to us as of the date of this Form 10-Q and speak only as of that date. We undertake no obligation to publicly update or revise any forward-looking statements included in this report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur and you should not put undue reliance on any forward-looking statements.

Additional factors that may affect our results are discussed under Part II, Item 1A in this document under the heading "Risk Factors."

Overview

The Company, a Maryland corporation, is a bank holding company for its wholly owned subsidiary, First Bank Midwest (formerly First Bank Richmond). Substantially all of the Company's business is conducted through First Bank 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.

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First Bank Midwest 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 Farmers Bancorp, Frankfort, Indiana ("Farmers Bancorp"), and The Farmers Bank merged with and into First Bank Richmond. Following completion of the merger, First Bank Richmond operates under the name First Bank

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Item 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

Certain statements 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 and are based on certain assumptions and expectations regarding future events. These statements are generally identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions, or by future or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” These forward-looking statements include, but are not limited to:

•statements of our goals, intentions and expectations;

•statements regarding our business plans, prospects, growth and operating strategies;

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

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•statements regarding the expected benefits of proposed transactions, including our proposed merger with Farmers Bancorp; and

•estimates of our risks and future costs and benefits.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. These statements are based on our current beliefs and expectations and are inherently subject to significant business, economic, competitive, and regulatory uncertainties and contingencies, many of which are beyond our control. They are also subject to assumptions regarding future business strategies and decisions that are subject to change.

Important factors that could cause our actual results to differ materially from the results anticipated or projected, include, but are not limited to, the following:

•adverse impacts to economic conditions in our local market areas and other markets where we have lending relationships;

•effects of employment levels, labor shortages and inflation, a recession, or slowed economic growth;

•changes in the interest rate levels and volatility, and the timing and pace of such changes including actions by the Federal Reserve in response thereto;

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

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

•changes in the level and direction of loan or lease delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses;

•our ability to access cost-effective funding including maintaining the confidence of depositors;

•unexpected outflows of uninsured deposits may require us to sell investment securities at a loss;

•fluctuations in real estate values, and residential, commercial, and multi-family real estate market conditions;

•competitive pressures among depository institutions, including repricing and competitors' pricing initiatives, and their impact on our market position, loan, and deposit products;

•our ability to implement and change our business strategies;

•competition among depository and other financial institutions and equipment financing companies;

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

•inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on our loans and leases;

•adverse changes in the securities or secondary mortgage markets;

•changes in the quality or composition of our loan, lease or investment portfolios;

•our ability to keep pace with technological changes, including our ability to identify and address cyber-security risks such as data security breaches, "denial of service" attacks, "hacking" and identity theft, and other attacks on our information technology systems or on our third-party vendors;

•results of examinations by regulatory authorities and potential requirements to increase credit loss allowances, write-down assets, reclassify assets, change our regulatory capital position, or affect our liquidity and earnings;

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•the inability of third-party providers to perform as expected;

•our ability to manage market risk, credit risk and operational risk in the current economic environment;

•our ability to enter new markets successfully and capitalize on growth opportunities;

•our ability to attract and retain key employees;

•changes in the financial condition, results of operations or future prospects of issuers of securities that we own;

•our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto;

•changes in consumer spending, borrowing and savings habits;

•changes in accounting policies and practices, as may be adopted by banking 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 but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws;

•our ability to pay dividends on our common stock;

•our ability to adapt to rapid technological changes, including advancements related to artificial intelligence, digital banking platforms, and cybersecurity;

•geopolitical developments and international conflicts, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, commodity prices, or economic activity in specific industry sectors;

•other economic, competitive, governmental, regulatory, and technical factors affecting our operations, pricing, products and services;

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

•the other risks described elsewhere in this Form 10 K and our other reports filed with and furnished to the U.S. Securities and Exchange Commission (“SEC”).

Further, statements regarding the potential effects of the proposed merger with Farmers Bancorp on our business, financial results and condition may also constitute forward-looking statements. Actual results may differ materially due to risks and uncertainties, including:

•events, changes, or circumstances that could give rise to the right of either party to terminate the merger agreement;

•the possibility that the merger may not be completed on the anticipated terms, within the expected timeframe, or at all;

•failure to obtain required regulatory or shareholder approvals, or the imposition of conditions that could adversely affect the combined company or expected benefits;

•challenges in meeting expectations regarding the timing, completion, accounting, and tax treatment of the merger;

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

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•higher-than-expected transaction costs, integration costs, or unexpected events related to the transaction and subsequent integration;

•dilution from the issuance of additional Richmond Mutual common stock in connection with the merger;

•potential litigation or other legal proceedings related to the merger;

•restrictions during the pendency of the transaction that may limit business opportunities or strategic initiatives;

•the ability to successfully integrate operations, systems, personnel, and technologies post-merger;

•disruption to customer, employee, or vendor relationships, including key community relationships;

•diversion of management’s attention from ongoing operations and strategic initiatives;

•lower-than-expected revenues or profitability following the merger;

•changes in credit, capital markets, or economic, political, or regulatory conditions;

•competition from banks and other financial service providers;

•the Company’s, Farmers Bancorp’s or the combined company’s success at managing the risks involved in the foregoing items; and

•other factors detailed in Richmond Mutual’s filings with the SEC.

These forward-looking statements are based on information known to us as of the date of this Form 10-K and speak only as of that date. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances, except as required by law. In light of the risks and uncertainties described above, actual results may differ materially from those expressed or implied in the forward-looking statements.

Additional factors that may affect our results are discussed under Part I, Item 1A in this document under the heading “Risk Factors.”

General

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 first mortgages on owner-occupied, one- to four-family residences, a variety of consumer loans, direct financing leases, commercial and industrial loans, and loans secured by commercial and multi-family real estate. We also obtain funds by utilizing FHLB advances. Funds not invested in loans generally are invested in investment securities, including mortgage-backed and mortgage-related securities and agency and municipal bonds. Richmond Mutual Bancorporation's primary business activities are currently limited to one significant business segment, which is community banking.

Our results of operations are primarily dependent on net interest income. Net interest income is the difference between interest income, which is the income that is earned on loans and investments, and interest expense, which is the interest that is paid on deposits and borrowings. Other significant sources of pre-tax income are service charges (mostly from service charges on deposit accounts and loan servicing fees), and fees from the sale of residential mortgage loans originated for sale in the secondary market. We may also recognize income from the sale of investment securities.

At December 31, 2025, on a consolidated basis, we had $1.5 billion in assets, $1.2 billion in loans, $1.1 billion in deposits, and $145.8 million in stockholders’ equity. First Bank Richmond’s risk-based capital ratio at December 31, 2025 was 14.6%, exceeding the 10.0% requirement for a well-capitalized institution. For the year ended December 31, 2025, we reported net income of $11.6 million, compared with net income of $9.4 million for 2024.

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Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with GAAP. In doing so, we have 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

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