Richmond Mutual Bancorporation reported third-quarter net income of $1.7 million, down from $2.2 million in the second quarter and $3.6 million a year earlier. The quarter was the first to include a full three months of results from Farmers Bancorp, which Richmond Mutual acquired on July 1.
The merger substantially increased net interest income, but higher credit-loss provisions and expenses—including one-time merger costs—more than offset that growth.
Key details
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Earnings fell as credit costs rose. Diluted earnings were 11 cents per share, compared with 22 cents in the second quarter and 36 cents in the third quarter of 2025. For the first nine months of 2026, net income was $6.8 million, or 56 cents per share, versus $8.2 million, or 82 cents per share, in the same period last year.
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The provision for credit losses climbed to $6.1 million. That compared with $823,000 in the prior quarter and $269,000 a year earlier. The increase reflected the need to replenish the allowance after $6.1 million in net charge-offs during the quarter, as well as an increase in non-performing loans.
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Major charge-offs included commercial real estate and business loans. Richmond Mutual partially charged off $4.5 million on a nonaccruing commercial real estate loan, which was transferred to other real estate owned during the quarter. It also charged off $803,000 on a commercial and industrial loan.
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Merger growth lifted interest income. Net interest income rose to $22.8 million, up $10.8 million from the second quarter and $11.6 million from a year earlier. The company’s annualized net interest margin increased to 3.68%, from 3.22% in the prior quarter and 3.07% a year earlier. The CEO attributed the higher income in part to the merger’s expansion of the balance sheet.
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Noninterest income also increased. It was $4.6 million, compared with $1.6 million in the second quarter and $1.3 million a year earlier.
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Expenses rose, including one-time merger costs. Noninterest expense totaled $20.0 million, up from $10.2 million in the second quarter. The third-quarter figure included $3.0 million in nonrecurring merger-related expenses. A preliminary $1.6 million bargain purchase gain from the Farmers Bancorp acquisition partly offset the quarter’s costs.
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The combined bank is operating as First Bank Midwest. The holding company remains Richmond Mutual Bancorporation, trades on Nasdaq under RMBI, and retains its administrative headquarters in Richmond, Indiana. The combined bank is headquartered in Frankfort, Indiana.
What the results show
The merger expanded Richmond Mutual’s operating scale and sharply increased net interest income, but the third quarter’s higher credit-loss provision and expenses outweighed that improvement. Comparisons with periods before July 1 are not on a combined-company basis: those earlier results cover Richmond Mutual alone, while third-quarter 2026 includes Farmers Bancorp’s operations.