Richmond Mutual Bancorporation closed the Farmers Bancorp combination on the first day of July and immediately renamed the surviving bank First Bank Midwest. The second-quarter print still describes the standalone Richmond franchise on the eve of that close, so the reported profit is not yet a combined-company run rate. Core spread income improved as deposit costs eased and new loans booked at higher yields. Reported earnings still fell because nearly two million of merger professional fees landed in the quarter and two named multifamily credits migrated onto nonaccrual. The investment debate is whether the larger Indiana and Ohio footprint can turn a cleaner net interest margin into durable earnings power before the credit file and the integration calendar take a larger bite.
The margin story is the one part of the quarter that does not need a footnote. Annualized net interest income as a share of earning assets moved just above three percent, a step up from the prior quarter and from a year earlier when the same ratio still sat below three percent. Deposit costs on interest-bearing balances drifted toward two point eight percent while loan yields moved toward six and a half percent. That mix, not a burst of volume, is what lifted net interest income to just over twelve million. The offset sits in credit and expense. The provision rose, nonperforming loans climbed to just under two percent of the book, and allowance coverage of those loans dropped under eighty percent after a two point four million multifamily credit that was already ninety days past due at year-end and a three point five million multifamily credit that was still current when it was placed on nonaccrual after a troubled modification.
The July close issued about six million new shares at a fixed three and four tenths exchange and left legacy Richmond holders with roughly three fifths of the company. Combined assets were framed at announcement as about two and a half billion across twenty-four branches. Farmers operating results first enter the September quarter, so the next several prints decide whether cost saves and a higher lending limit outweigh a wholesale-heavy deposit mix, a thin noninterest-bearing share near nine percent, and a credit file that has already shown two sizable multifamily problems. The quarterly dividend stayed at fifteen cents. The market now capitalizes the combined firm near two hundred fifty million, close to the top of the past year's range, which leaves little room if integration slips or another commercial real estate credit follows the two already on nonaccrual.