Richmond Mutual Bancorporation, Inc. (RMBI): Business Model Canvas [Dec-2025 Updated]

As a seasoned analyst, I know that when a regional bank like Richmond Mutual Bancorporation, Inc. announces a major move, like the November 2025 definitive merger agreement with The Farmers Bancorp, your first question isn't about the press release-it's about the plumbing. Honestly, the core model is classic community banking: focusing on relationship-driven value propositions to generate Net Interest Income, which stood at $11.3 million in Q3 2025, supported by $1.5 billion in total assets. Before we map out the post-merger landscape, let's break down the current operational engine-the key activities, resources, and revenue streams that define Richmond Mutual Bancorporation, Inc. today, so you can properly assess the integration's impact.

Richmond Mutual Bancorporation, Inc. (RMBI) - Canvas Business Model: Key Partnerships

You're looking at the relationships that underpin Richmond Mutual Bancorporation, Inc.'s operations as of late 2025, especially as the company gears up for a major expansion. These aren't just casual connections; they are structural dependencies for funding, growth, and community standing.

Definitive Merger Agreement with The Farmers Bancorp (November 2025)

The most significant partnership development is the definitive merger agreement with The Farmers Bancorp, announced on November 12, 2025. This is a transformational, all-stock transaction valued at approximately $82 million, based on RMBI's closing share price of $13.15 on November 10, 2025. This deal is set to create a premier community bank with $2.6 billion in assets and a network of 24 branches spanning Central and East Central Indiana and Western and Central Ohio. The expected closing is in early Q2 2026, pending regulatory and shareholder approvals. The financial rationale is compelling, projecting an approximate 35% EPS accretion for Richmond Mutual Bancorporation shareholders on a run-rate basis, using annualized results from the three months ended September 30, 2025. Furthermore, Farmers Bancorp shareholders are projected to see dividend per share accretion of approximately 27.5%.

Here's a quick look at the ownership structure post-merger:

This partnership is designed to unlock higher lending limits and allow for broader product offerings, which is a direct response to the need for scale in the current banking environment.

Federal Home Loan Bank (FHLB) for Wholesale Funding and Liquidity Management

Richmond Mutual Bancorporation, Inc. relies on the Federal Home Loan Bank (FHLB) advances as a source of wholesale funding, alongside customer deposits. As of the third quarter of 2025, the reliance on this funding source was quite clear. For the quarter ended September 30, 2025, the average balance of FHLB borrowings stood at $265.8 million. This compares to an average balance of $262.1 million in the preceding quarter (Q2 2025). The cost of this funding, the average rate paid on FHLB borrowings, was 4.16% for Q3 2025.

The use of FHLB advances is a standard liquidity management tool for community banks like First Bank Richmond. You can see the scale of this funding source relative to the balance sheet:

• Total Assets (Q3 2025): $1.5 billion
• Total Deposits (Q3 2025): $1.1 billion
• Average FHLB Borrowings (Q3 2025): $265.8 million

Core Technology Provider for Banking Operations and Digital Services

While a definitive, named core processing vendor contract wasn't explicitly detailed in the latest filings, the strategic direction is clear. The merger announcement explicitly mentions that joining forces will allow the combined entity to invest in technology & innovation and deliver an 'even better experience for our customers.' First Bank Richmond already promotes a 'state-of-the-art Digital Banking experience' featuring mobile check deposit, P2P payments via People Pay, and a partnership with ClickSWITCH for account switching. The partnership here is less about a single vendor name and more about the strategic commitment to technology enhancement, which will involve leveraging scale to adopt more robust digital tools, such as those mentioned in the industry for 2025, like Personal Financial Management tools and Card Control features.

Local Community Organizations for Relationship-Based Banking and Support

Relationship-based banking is cemented through deep community involvement, primarily facilitated by the First Bank Richmond Inc Community Foundation. This foundation is a key partner in supporting the quality of life in the market areas served by the Bank. While the most recent full-year data is from 2024, it shows the scale of commitment:

• First Bank Richmond Inc Community Foundation Total Assets (2024): Over $6.7 million
• Total Awarded by Foundation (2024): $684,673
• Total Donations to Local Non-Profits (2023): More than $674,000

The Foundation's primary focus areas include economic development, education, health & human services, and youth programs. Furthermore, the bank emphasizes employee involvement, with 50% of staff serving on a board or committee in the prior year (2024 data). This level of engagement is defintely a core part of their value proposition to local customers.

Richmond Mutual Bancorporation, Inc. (RMBI) - Canvas Business Model: Key Activities

Generating Net Interest Income (NII) through loan and deposit spread management

The core activity involves managing the spread between interest earned on assets and interest paid on liabilities. For the three months ended March 31, 2025, Net Interest Income reached $10.3 million, a 4.0% increase from the preceding quarter's $9.9 million. The annualized net interest margin for that quarter stood at 2.79%. The average yield earned on the loan and lease portfolio for the first quarter of 2025 was 6.36%. Total Deposits at March 31, 2025, were $1.1 billion.

Underwriting and servicing a $1.2 billion loan and lease portfolio (Q3 2025)

Richmond Mutual Bancorporation, Inc. focuses on originating and managing its credit assets. Loans and leases, net of the allowance for credit losses, totaled $1.2 billion as of March 31, 2025. The interest income generated from this portfolio for the first quarter of 2025 was $18.8 million. The allowance for credit losses on loans and leases was $16.1 million at March 31, 2025, representing 1.35% of total loans and leases outstanding.

Managing a network of 13 branches across Indiana and Ohio

The operational footprint involves managing physical locations to deliver services. Prior to the announced merger, First Bank Richmond operated its network through:

• Eight locations in Indiana (Richmond, Centerville, Cambridge City, Shelbyville).
• Five locations in Ohio (Sidney, Piqua, Troy).
• One loan production office in Columbus, Ohio.

Integrating the operations of the pending Farmers Bancorp merger

A key activity in late 2025 is the integration planning following the November 12, 2025, definitive merger agreement with The Farmers Bancorp. This integration is set to create a combined entity with specific projected characteristics:

• Projected total assets of $2.6 billion.
• A combined network of 24 branches across Indiana and Ohio.
• Expected EPS accretion for Richmond Mutual Bancorporation, Inc. shareholders of approximately 35% on a run-rate basis, using annualized results from the three months ended September 30, 2025.
• The transaction is valued at approximately $82 million.

Richmond Mutual Bancorporation, Inc. (RMBI) - Canvas Business Model: Key Resources

You're looking at the core assets backing Richmond Mutual Bancorporation, Inc. as of late 2025. These are the tangible and intangible foundations that support the business operations.

The balance sheet strength provides a solid base. As of September 30, 2025, Richmond Mutual Bancorporation, Inc. reported total assets of $1.5 billion. This scale is supported by a strong capital position, which is defintely a key resource in banking.

The regulatory capital position is robust, with the Tier 1 capital to total assets ratio standing at 10.85% as of the third quarter of 2025, which is well above regulatory minimums. Also, the equity to assets ratio was reported at 9.18% at that same date.

Here's a quick look at the core balance sheet components as of September 30, 2025, which you should keep in mind for valuation work:

The franchise value is tied to its established brand presence in its operating footprint. These names represent the customer-facing delivery channels:

• The First Bank Richmond brand name
• The Mutual Federal brand name (used for Ohio offices)

The management structure is another critical intangible resource. The leadership team, headed by Chairman, President, and Chief Executive Officer Garry D. Kleer, continues to emphasize a conservative operational philosophy. This focus is evident in the credit quality metrics reported for Q3 2025, showing nonperforming loans and leases at only 0.90% of total loans and leases. The team is also preparing for a transformational merger announced in November 2025, which will combine assets to create a premier $2.6 billion asset community bank.

The operational performance metrics from Q3 2025 further illustrate the resource base:

• Net Income (Q3 2025): $3.6 million
• Diluted Earnings Per Share (Q3 2025): $0.37
• Annualized Net Interest Margin (Q3 2025): 3.07%
• Total Employees: 173

Finance: draft 13-week cash view by Friday.

Richmond Mutual Bancorporation, Inc. (RMBI) - Canvas Business Model: Value Propositions

Richmond Mutual Bancorporation, Inc., through its subsidiary First Bank Richmond, operates as an Indiana state-chartered commercial bank, originally established in 1887 as a mutual savings and loan association.

Community-focused, relationship-driven core banking model

The core value proposition centers on a steady, careful mindset, emphasizing staying close to customers and communities while maintaining a strong balance sheet.

• Headquartered in Richmond, Indiana.
• Operates eight branches in Indiana.
• Operates five branches and one loan production office in Ohio (under the Mutual Federal division).

Full-service banking for individuals and small-to-medium-sized businesses

Richmond Mutual Bancorporation, Inc. offers a full suite of financial products to individuals and small businesses.

• Core deposit services include checking and savings accounts, money market accounts, and certificates of deposit.
• Lending solutions include consumer lending, residential mortgages, and home equity lines of credit.

The company's asset base as of September 30, 2025, was $1.5 billion, with total loans and leases, net of allowance, at $1.2 billion.

Stability and conservative credit quality with low provision for loan losses

The model prioritizes sound credit practices, reflected in capital strength and controlled credit costs.

The provision for credit losses recorded in the third quarter of 2025 was $269,000, a significant decrease from the $745,000 recorded in the preceding quarter.

Enhanced lending limits and broader product offerings post-merger

A definitive merger agreement was announced on November 11, 2025, with The Farmers Bancorp, valued at approximately $82 million.

This transaction is expected to create a premier community bank with the following scale and benefits:

• Combined assets projected to reach $2.6 billion.
• A combined network of 24 branches across Indiana and Ohio.
• Unlocks higher lending limits and broader product offerings for customers.
• Projected to deliver approximately 35% EPS accretion for Richmond Mutual shareholders on a run-rate basis using annualized Q3 2025 results.
• Farmers Bancorp shareholders are projected to see dividend per share accretion of approximately 27.5%.

Following the merger, existing Richmond Mutual Bancorporation, Inc. shareholders are expected to own approximately 62% of the combined company, with Farmers Bancorp shareholders owning approximately 38%.

Richmond Mutual Bancorporation, Inc. (RMBI) - Canvas Business Model: Customer Relationships

Richmond Mutual Bancorporation, Inc., through its primary subsidiary First Bank Richmond, operates with the high-touch, personal service you expect from a community bank, a model that has been in place since the bank's establishment in 1887.

This relationship-centric approach is evidenced by the operational footprint prior to the announced merger. As of late 2025, First Bank Richmond provided full banking services through eight branches located in Indiana and five branches plus one loan production office in Ohio (operating as Mutual Federal).

The Chairman, President, and Chief Executive Officer, Garry Kleer, noted in the second quarter of 2025 that the results reflected the strength of the core banking model, which is built on strong relationships.

For higher-value services, the focus on dedicated client attention is implied by the growth in the commercial sector. The provision for credit losses in the first quarter of 2025 was primarily driven by growth in the commercial loan portfolios, suggesting an active focus on these segments.

The announced transformational strategic merger with The Farmers Bancorp on November 12, 2025, is explicitly aimed at enhancing customer experience. The transaction combines two culturally-aligned banks committed to customers and is expected to unlock higher lending limits and broader product offerings for both companies' customers.

The long-term focus on customer care and community support is a stated priority. Following the third quarter of 2025 results, Mr. Kleer emphasized staying focused on 'taking care of our customers, supporting our communities, and making thoughtful decisions that build long-term value for our shareholders.'

The merger is designed to create a premier community bank with a network of 24 branches across key markets in Central and East Central Indiana as well as Western and Central Ohio, reinforcing the commitment to local presence.

Here's a quick look at the scale of the customer base and asset base as of the third quarter of 2025, which supports the relationship-focused model:

The bank's commitment to its local base is also reflected in its capital structure; Stockholders' equity stood at $140.0 million as of September 30, 2025, resulting in an equity to assets ratio of 9.18%.

The customer relationship strategy involves maintaining a strong balance sheet while growing relationships, as shown by the recent dividend declaration on November 19, 2025, of $0.15 per share.

• Focus on core banking model strength.
• Commitment to community support mentioned by CEO.
• Merger aims to combine two banks committed to customers.
• Post-merger asset size projected to be $2.6 billion.

Richmond Mutual Bancorporation, Inc. (RMBI) - Canvas Business Model: Channels

The physical distribution network for Richmond Mutual Bancorporation, Inc. is anchored by its two primary banking entities, First Bank Richmond and the Mutual Federal division, supplemented by specialized lending and digital access points. As of late 2025, this network is set for expansion following the announced merger with The Farmers Bancorp.

The established physical footprint, prior to the full integration of the merger announced in November 2025, comprised:

• First Bank Richmond branches in Indiana: The bank operates a total of 8 locations across Indiana, serving communities including Richmond, Centerville, Cambridge City, and Shelbyville.
• Mutual Federal division branches and loan office in Ohio: The Ohio operations, under the Mutual Federal division, consist of 5 full-service branches located in Sidney, Piqua, and Troy, plus 1 dedicated loan production office in Columbus, Ohio.

Digital channels provide essential reach beyond the physical footprint. Richmond Mutual Bancorporation, Inc. supports customer interactions through its online and mobile banking platforms, enabling digital transactions for customers whose balances totaled approximately $1.1 billion in deposits as of June 30, 2025.

The composition of these deposits highlights reliance on both traditional and digital interaction points. At the end of the second quarter of 2025, noninterest-bearing deposits, often indicative of active transactional use, accounted for 9.7% of total deposits, equating to approximately $106.7 million based on the June 30, 2025, total deposit figure of $1.1 billion.

Specialized services rely on direct engagement channels. While the specific size of the direct sales force isn't explicitly reported for 2025, the overall organization size, which supports all functions including commercial and wealth management services, is reported in the range of 51-200 Employees. Wealth management services, provided through the Corporate Office/Financial Center in Richmond, Indiana, managed assets totaling $154.4 million as of December 31, 2021, which serves as the latest reported benchmark for that specific service channel.

The company communicates directly with shareholders through declared dividends, such as the cash dividend of $0.15 per share declared in November 2025.

Richmond Mutual Bancorporation, Inc. (RMBI) - Canvas Business Model: Customer Segments

You're looking at the core groups Richmond Mutual Bancorporation, Inc. serves, grounded in their latest reported figures as of late 2025.

Individuals and families in Central/East Central Indiana and Western/Central Ohio

Richmond Mutual Bancorporation, Inc., through First Bank Richmond, focuses its traditional financial services within its local communities. The primary market area includes Wayne and Shelby counties in Indiana, and offices in Centerville, Cambridge City, and Shelbyville, Indiana. In Ohio, service extends through five locations in Sidney, Piqua, and Troy, and a loan production office in Columbus.

• Total assets stood at $1.5 billion as of September 30, 2025.
• Total deposits were $1.1 billion as of September 30, 2025.
• The company announced a transformational strategic merger in November 2025, which, if completed, would create a premier community bank with 24 branches across Central/East Central Indiana and Western Ohio markets.

Small and medium-sized businesses requiring commercial loans and deposits

This segment is served through commercial and industrial loans, as well as commercial real estate loans. The loan portfolio growth reflects the demand from this customer base.

High net worth individuals and corporate customers for trust and wealth management

Richmond Mutual Bancorporation, Inc. provides fee-based financial services, including trust and estate administration, investment management, and private banking services, to both individual and corporate customers.

• Total wealth management assets under management and administration were $193.0 million at December 31, 2024.
• These activities generated 21.4% of total non-interest income in 2024.
• The company has a subsidiary, First Insurance Management, Inc., formed in 2022, for additional insurance coverage.

Retail customers seeking competitive time deposit yields

Retail customers are a key source of funding, with management noting a shift in customer behavior toward time deposits to capture higher rates.

Here's the quick math on deposit composition from recent reports:

The average rate paid on interest-bearing deposits was 2.99% for the quarter ended March 31, 2024. The annualized net interest margin improved to 3.07% for Q3 2025. That margin improvement definitely helps the bottom line.

Finance: draft 13-week cash view by Friday.

Richmond Mutual Bancorporation, Inc. (RMBI) - Canvas Business Model: Cost Structure

You're looking at the core costs driving Richmond Mutual Bancorporation, Inc.'s operations as of late 2025. The structure is what you'd expect for a community bank, heavily weighted toward the cost of funding its balance sheet, plus the overhead to run the branches and systems.

The largest component is definitely the interest expense, which is the cost of the money Richmond Mutual Bancorporation, Inc. uses to fund its lending and investment activities. This is predominantly interest expense on deposits and FHLB borrowings. For the third quarter of 2025, the average rate paid on interest-bearing deposits settled at 3.14%. To give you a sense of the funding mix, as of September 30, 2025, total deposits were $1.1 billion. The cost associated with Federal Home Loan Bank (FHLB) borrowings was also significant; the average rate paid on FHLB borrowings in Q3 2025 was 4.16%. The average balance for FHLB borrowings in that quarter was approximately $265.8 million.

Moving to the non-interest costs, the total for the third quarter of 2025 was reported at $8.1 million. This figure actually represented a slight decrease of 0.3% compared to the second quarter of 2025, showing some expense discipline during the period.

Personnel costs are a major driver within that noninterest expense, covering the staff managing the branch network and corporate functions. While a precise Q3 2025 personnel cost isn't isolated, we know that in Q2 2025, increases were attributed to annual merit increases and higher staffing levels needed to support business growth. For Q3 2025, the detail noted that salaries and benefits were actually down quarter-over-quarter due to lower equity compensation.

Technology and data processing costs are another key area. You should note the impact from the start of the year; Richmond Mutual Bancorporation, Inc. recorded a one-time pre-tax expense of $246,000 in the first quarter of 2025 related to core provider contract negotiations, which reduced diluted EPS by $0.02 for that quarter. This one-time charge was a factor in the Q1 2025 total noninterest expense rising to $8.4 million. By Q2 2025, other expenses specifically decreased from Q1 2025 because of the absence of this one-time charge, as the newly executed agreement was expected to yield long-term cost savings.

Here's a snapshot comparing key cost drivers from the first half of 2025 and the latest Q3 2025 data points we have:

You can see the interest expense on deposits was lower in Q1 2025 than in Q4 2024, but the average rate paid in Q3 2025 was still above the Q1 2025 rate of 3.17%.

• Personnel costs are a variable within the total noninterest expense, influenced by merit increases and staffing needs.
• Technology costs saw a one-off hit in Q1 2025 from the $246,000 core provider negotiation expense.
• Interest expense on deposits is sensitive to the average balance, which decreased by $13.2 million from Q4 2024 to Q1 2025.
• FHLB borrowing costs are sensitive to both balance and rate; the average balance decreased from $274.7 million in Q1 2025 to $262.1 million in Q2 2025.

Finance: draft 13-week cash view by Friday.

Richmond Mutual Bancorporation, Inc. (RMBI) - Canvas Business Model: Revenue Streams

You're looking at the core ways Richmond Mutual Bancorporation, Inc. (RMBI) brings in money, which, as you can see from the Q3 2025 numbers, is still heavily weighted toward traditional banking activities. The primary engine is the spread between what they earn on assets and what they pay for liabilities.

Net Interest Income (NII) is the big story here, showing strong performance driven by an improved net interest margin (NIM) of 3.07% for the third quarter of 2025. This NIM is up from 2.93% in the preceding quarter and 2.60% a year earlier. This favorable repricing environment really helped the bottom line.

The key components of the interest-earning side of the equation for the quarter ended September 30, 2025, look like this:

The interest income generated specifically from the loan and lease portfolio hit $19.7 million for the third quarter of 2025. That figure reflects a 2.6% increase from the second quarter of 2025, thanks to a higher average yield earned on those assets.

Beyond the core lending business, non-interest income contributes, though it remains a smaller piece of the total revenue pie. For Q3 2025, total noninterest income was reported at $1.3 million, which was a 20.2% increase compared to the previous quarter. This revenue stream is made up of several smaller sources, including the fees you mentioned.

Here's a breakdown of the non-interest income elements we can confirm for the period:

• Wealth management income was a key driver, contributing to 'Other income' increasing to $404,000.
• Loan and lease servicing fees saw a notable increase of $42,000, representing a 34.3% jump.
• Service charges on deposit accounts are a component, but the specific Q3 2025 dollar amount isn't explicitly broken out in the latest release summary.

Regarding dividends from the investment portfolio and bank subsidiary activities, the latest reports detail the cash dividend paid to shareholders, which was declared at $0.15 per share on November 19, 2025. The specific revenue line item for dividends received by Richmond Mutual Bancorporation, Inc. from its investments for Q3 2025 is not explicitly itemized in the provided financial highlights, so we focus on the reported income figures.