Benefit Plans

12 Months Ended

Dec. 31, 2021

401(k)

The Company has a retirement savings 401(k) plan, in which substantially all employees may participate. The Company matches employees' contributions at the rate of 50 percent for the first 6 percent of base salary contributed by participants. The Company’s expense for the plan was $226,000 and $204,000 for the years ended December 31, 2021 and 2020, respectively.

Pension Plan

The Company participated in the Pentegra Defined Benefit Plan for Financial Institutions (the "Pentegra Plan"), an industry-wide, tax-qualified defined-benefit pension plan during 2021. The Pentegra Plan’s Employer Identification Number is 13-5645888 and the Plan Number is 333. The Pentegra Plan operates as a multi-employer plan for accounting purposes and as a multi-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra Plan. The Pentegra Plan is a single plan under Internal Revenue Code Section 413(c) and, as a result, all of the assets stand behind all of the liabilities.

The risks of participating in a multi-employer plan are different from a single-employer plan in the following aspects:

•Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.

•If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

•If the Company chooses to stop participating in some of its multi-employer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The Pentegra Plan has not required and does not require a financial improvement plan or a rehabilitation plan.

Total contributions by all employer participants in the Pentegra Plan, as reported on Form 5500, totaled $213,914,000 and $237,376,000, respectively, for the plan years ended June 30, 2021 and 2020. The Company’s contributions to the Pentegra Plan totaled $0 and $722,000, respectively, for the years ended December 31, 2021 and 2020. The Company terminated its participation in the Pentegra Plan effective December 23, 2021, and had accrued approximately $17,455,000 for this expense as of December 23, 2021. An additional expense of $665,000 was made in December 2021 in connection with the final termination of the DB Plan.

Employee Stock Ownership Plan

As part of the reorganization and related stock offering, the Company established an Employee Stock Ownership Plan ("ESOP") covering substantially all employees. The ESOP acquired 1,082,130 shares of Company common stock at an average price of $13.59 per share on the open market with funds provided by a loan from the Company. The Company is obligated at the option of each beneficiary to repurchase shares of the ESOP upon the beneficiary’s termination or after retirement. Dividends on unallocated shares used to repay the loan for the Company are recorded as a reduction of the loan or accrued interest, as applicable. Dividends on allocated shares paid to participants are reported as compensation expense. Unearned ESOP shares, which are not vested, are excluded from the computation of average shares outstanding for earnings per share calculation. Accordingly, $12,928,359 and $13,664,373 of common stock acquired by the ESOP was shown as a reduction of stockholders’ equity at December 31, 2021 and December 31, 2020, respectively. Shares are released to participants proportionately as the loan is repaid.

ESOP expense for the years ended December 31, 2021 and 2020 was $796,000 and $648,000, respectively.


	December 31, 2021		December 31, 2020

Earned ESOP shares	130,775		76,669
Unearned ESOP shares	951,355		1,005,461
Total ESOP shares	1,082,130		1,082,130

Quoted per share price	$	16.05	$	13.66
Fair value of earned shares (in thousands)	$	2,099	$	1,047
Fair value of unearned shares (in thousands)	$	15,269	$	13,735

Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan

On September 15, 2020, the Company's stockholders approved the Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan ("2020 EIP") which provides for the grant to eligible participants of up to (i) 1,352,662 shares of Company common stock to be issued upon the exercise of stock options and stock appreciation rights and (ii) 541,065 shares of Company common stock to participants as restricted stock awards (which may be in the form of shares of common stock or share units giving the participant the right to receive shares of common stock at a specified future date).

Restricted Stock Awards. On October 1, 2020, the Company awarded 449,086 shares of common stock under the 2020 EIP with a grant date fair value of $10.53 per share (total fair value of $4.7 million at issuance) to eligible participants. On April 1, 2021, the Company awarded an additional 4,000 shares of common stock under the 2020 EIP with a grant date fair value of $13.86 (total fair value of $55,000 at issuance) to eligible participants. These awards vest in five equal annual installments with the first vesting occurring on June 30, 2021. Forfeited shares may be awarded to other eligible recipients in future grants until the 2020 EIP terminates in September 2030.

The following table summarizes the restricted stock awards activity in the 2020 EIP for the year ended December 31, 2021.


	Year Ended December 31, 2021
	Number of Restricted Shares	Weighted Average Grant Date Fair Value

Non-vested, beginning of year	431,501	$	10.53
Granted	4,000	13.86
Vested	(87,106)	10.56
Forfeited	—	—
Non-vested, end of year	348,395	10.56

Total compensation cost recognized in the income statement for restricted stock awards during 2021 and 2020 was $1,083,000 and $488,000, respectively, and the related tax benefit recognized was $227,000 and $102,000, respectively. As of December 31, 2021, unrecognized compensation expense related to restricted stock awards was $3.2 million.

Stock Option Plan. On October 1, 2020, the Company awarded options to purchase 1,095,657 shares of common stock under the 2020 EIP with an exercise price $10.53 per share, the fair value of a share of the Company's common stock on the date of the grant, to eligible participants. On April 1, 2021, the Company awarded options to purchase 8,000 shares of common stock under the 2020 EIP with an exercise price of $13.86 per share, the fair value of the Company's common stock on the date of the grant, to eligible participants. The options awarded vest in five equal annual installments with the first vesting occurring on June 30, 2021. Forfeited options may be awarded to other eligible recipients in future grants until the 2020 EIP terminates in September 2030. A net-settle stock option exercise may occur by the option holder by withholding the exercise price from the number of shares that would otherwise be delivered upon a cash exercise of the option. The withheld shares are canceled and no longer available for future grant.

The following table summarizes the stock option activity in the 2020 EIP during the year ended December 31, 2021.


	2021
	Number of Shares	Weighted-Average Exercise Price

Balance at beginning of year	1,095,657	$	10.53
Granted	8,000	13.86
Exercised	(52,696)	10.53
Forfeited/expired	—	—
Balance at end of year	1,050,961	10.56
Exercisable at end of year	200,503	$	10.56

The fair value of options granted is estimated on the date of grant using a Black Scholes model with the following assumptions:


	April 1, 2021

Dividend yields	1.90	%
Volatility factors of expected market price of common stock	26.98	%
Risk-free interest rates	1.16	%
Expected life of options	6.1 years

A summary of the status of the Company stock option shares as of December 31, 2021 is presented below.


	Shares	Weighted Average Grant Date Fair Value

Non-vested, beginning of year	1,055,077	$	2.91
Vested	(212,619)	2.91
Granted	8,000	3.02
Forfeited	—	—
Non-vested, end of year	850,458	$	2.91

Total compensation cost recognized in the income statement for option-based payment arrangements during 2021 and 2020 was $728,000 and $323,000, and the related tax benefit recognized was $80,000 and $48,000, respectively. As of December 31, 2021, unrecognized compensation expense related to the stock option awards was $2.2 million.