Arizona Tribune - Rhinebeck Bancorp, Inc. Reports Results for the Quarter and Year Ended December 31, 2025

President and Chief Executive Officer Matthew Smith said, "We are pleased to report a strong turnaround in profitability in 2025, highlighted by full-year net income of $10.0 million and a return on average assets of 0.78%. Our 2025 results reflect disciplined balance sheet management, improved operating efficiency, and margin expansion in a challenging interest rate environment. Net interest margin increased to 3.89% for the year, driven by prudent pricing strategies and stable funding costs, while our efficiency ratio improved meaningfully to 73.12%. Asset quality remains strong, with non-performing assets at just 0.28% of total assets. We enter 2026 with a solid capital position, strong liquidity, and a continued focus on supporting our customers and communities while delivering sustainable value to shareholders."

Income Statement Analysis

Net interest income increased $1.7 million, or 16.3%, to $11.8 million for the three months ended December 31, 2025, from $10.2 million for the three months ended December 31, 2024. Net interest income for the three months ended September 30, 2025 was $12.0 million. The increase over prior year was primarily due to higher yields, higher average balances of interest-earning assets and lower costs on interest-bearing liabilities, partially offset by an increase in the average balance of interest-bearing liabilities. The interest rate spread improved 42 basis points from 2.78% for the three months ended December 31, 2024 to 3.20% for the three months ended December 31, 2025, as asset yields increased while liability costs decreased. For the three months ended December 31, 2025, when compared to the same period in 2024, the average yield of interest-earning assets improved by 30 basis points to 5.79% and the average balance of interest-earning assets increased by $55.8 million, or 4.8%, to $1.21 billion. The balance sheet restructuring in the fourth quarter of 2024 significantly increased the yield on our available-for-sale securities. The average balance of interest-bearing liabilities increased by $50.5 million, or 5.9%, primarily due to a $75.1 million increase in the average balance of interest-bearing deposits (primarily money market accounts and time deposits), partially offset by a $24.6 million decrease in the average balance of FHLB advances, while the cost of interest-bearing liabilities decreased by 12 basis points to 2.59% due to the lower market interest rate environment and less reliance on higher-costing FHLB advances. The net interest margin was 3.87% for the three months ended December 31, 2025, compared to 3.93% for the three months ended September 30, 2025 and 3.50% for the three months ended December 31, 2024.

Year-to-date net interest income increased $8.7 million, or 23.1%, to $46.4 million compared to $37.7 million for the prior year primarily due to higher yields on interest-earning assets and lower costs on interest- bearing liabilities.The interest rate spread increased by 79 basis points, from 2.44% for the year ended December 31, 2024, to 3.23% for 2025, primarily due to favorable asset and liability pricing. For the year ended December 31, 2025, the average balance of interest-earning assets increased by $3.0 million, or 0.3%, to $1.19 billion while the average yieldimproved by 46 basis points to 5.77%, when compared to the year ended December 31, 2024. The balance sheet restructuring in the second half of 2024 significantly increased the yield on our available-for-sale securities. The average balance of interest-bearing liabilities decreased by $4.6 million, or 0.5%, primarily due to a decrease in the average balance of FHLB advances of $42.8 million, partially offset by a $38.7 million increase in the average balance of deposits (primarily money market accounts and time deposits), while the cost of interest-bearing liabilities decreased by 33 basis points to 2.54% due to the lower interest rate environment and less reliance on higher-costing FHLB advances. The net interest margin increased by 72 basis points to 3.89% for the year ended December 31, 2025 from 3.17% for the year ended December 31, 2024.

The provision for credit losses decreased by $878,000, or 63.6%, from $1.4 million for the quarter ended December 31, 2024 to $503,000 for the current quarter primarily due to lower loan balances and a decrease in net charge-offs. The provision for credit losses was $904,000 for the quarter ended September 30, 2025. Net charge-offs decreased by $600,000 from $971,000 for the fourth quarter of 2024 to $371,000 for the fourth quarter of 2025. The decrease was primarily due to a charge-off on a commercial loan of $524,000 in the fourth quarter of 2024.

The provision for credit losses decreased by $1.1 million, or 40.8%, from $2.8 million for the year ended December 31, 2024 to $1.7 million for the year ended December 31, 2025. The decrease in the provision was primarily due to decreases in net charge-offs on indirect automobile loans and commercial loans, partially offset by an increase in commercial real-estate loans. Net charge-offs decreased $462,000, or 19.3%, to $1.9 million for the year ended December 31, 2025 as compared to $2.4 million for the year ended December 31, 2024. The decrease was primarily due to decreased net charge-offs on indirect automobile and commercial loans, partially offset by increased net charge-offs on commercial real estate loans. The percentage of overdue account balances to total loans decreased to 1.52% at December 31, 2025 from 1.71% at December 31, 2024, while non-performing assets decreased $434,000, or 10.5%, to $3.7 million at December 31, 2025.

Non-interest income totaled $1.7 million for the three months ended December 31, 2025, compared to $1.9 million in the third quarter 2025 and a net loss of $2.2 million for the same period in 2024. The prior-year period included a $4.0 million loss on the sale of investment securities related to the Company's balance sheet restructuring. Excluding this loss, non-interest income would have decreased $178,000 from $1.9 million for the three months ended December 31, 2024 to $1.7 million for the current period. This decrease was primarily due to a $261,000 decrease in other non-interest income, particularly in swap income, partially offset by a $40,000, or 10.1%, increase in investment advisory income and a $27,000 increase in gain on sale of loans.

Non-interest income totaled $7.0 million for the year ended December 31, 2025, compared to a net loss of $9.0 million for 2024, representing an increase of $16.0 million. The net loss in 2024 was primarily attributable to a $16.0 million loss on the sale of investment securities in connection with the Company's 2024 balance sheet restructuring. Excluding this loss, non-interest income would have decreased by $86,000, from $7.1 million for the year ended December 31, 2024, to $7.0 million for the year ended December 31, 2025. The decrease in non-interest income reflected a $413,000 decrease in income related to life insurance proceeds recognized during the fourth quarter of 2024, a $22,000 decrease in investment advisory income and an $18,000 decrease on service charges on deposit accounts. These decreases were largely offset by a $223,000, or 18.4%, increase in other non-interest income, primarily due to higher swap income, and a $92,000 increase in gain on the sales of loans.

For the fourth quarter of 2025, non-interest expense rose to $10.1 million, reflecting a $135,000, or 1.4%, increase compared to the same period in 2024. Noninterest expense was $9.7 million in the third quarter of 2025. The increase over the prior year quarter was primarily due to an increase in salaries and employee benefits which rose $343,000, or 6.3%, primarily due to increased incentive compensation and production commissions. Data processing expenses increased $83,000 and marketing expenses increased $62,000. These increases were partially offset by a $211,000 decrease in professional fees and a $126,000 decrease in FDIC deposit insurance.

For the year ended December 31, 2025, non-interest expense totaled $39.0 million, representing an increase of $2.2 million, or 5.9%, compared to $36.8 million in 2024. The increase was driven primarily by higher compensation and operating costs across several categories. Salaries and employee benefits rose $1.2 million, or 6.1%, largely reflecting higher incentive-based compensation, production commissions, and annual merit increases implemented to attract and retain talent. Other non-interest expense increased $629,000, or 9.7%, primarily due to higher retail banking and administrative costs. Marketing expense increased $271,000, or 46.1%, data processing expense rose $145,000, or 7.1%, and occupancy expense increased $91,000, or 2.1%, reflecting higher facilities-related costs. These increases were partially offset by decreases in professional fees of $123,000, or 6.4%, and FDIC deposit insurance and other insurance costs of $63,000, or 5.7%.

Balance Sheet Analysis

Total assets increased by $46.0 million, or 3.7%, to $1.30 billion as of December 31, 2025. Cash and cash equivalents rose by $64.5 million, or 172.1%. Available-for-sale securities increased by $2.3 million, or 1.4%, primarily due to $49.0 million in purchases and a $5.3 million reduction in unrealized losses, partially offset by $52.3 million in paydowns, calls, and maturities. Loans receivable decreased by $18.4 million, or 1.9%, to $953.4 million, primarily reflecting a strategic decrease of $81.9 million in indirect automobile loans, in line with our decision to reduce their share of the portfolio, partially offset by a $52.1 million increase in commercial real estate loans and a $13.4 million increase in residential real estate loans.

Past due loans decreased $2.2 million, or 13.0%, to $14.5 million, or 1.52% of total loans at December 31, 2025, down from $16.7 million, or 1.71% of total loans, at December 31, 2024. The decrease was most notable in indirect automobile loans, reflecting the positive impact of more conservative underwriting standards. The allowance for credit losses was 0.87% of total loans and 225.76% of non-performing loans at December 31, 2025 as compared to 0.88% of total loans and 206.56% of non-performing loans at December 31, 2024. Non-performing assets totaled $3.7 million at December 31, 2025, a decrease of $434,000, or 10.5%, from $4.1 million at December 31, 2024.

Total liabilities increased by $31.0 million, or 2.7%, to $1.16 billion at December 31, 2025. The increase was primarily driven by a $76.6 million, or 7.5%, increase in deposits. The growth in deposits was attributable to an $87.4 million, or 11.2%, increase in interest-bearing deposits, partially offset by a decrease in non-interest-bearing deposits of $10.9 million, or 4.6%. Uninsured deposits were approximately 27.9% and 26.9% of the Bank's total deposits as of December 31, 2025 and December 31, 2024, respectively. The increase in deposits was partially offset by a $44.6 million, or 64.0%, reduction in borrowings as deposit growth allowed for excess cash to be used to pay down debt.

Stockholders' equity increased $15.0 million, or 12.3%, to $136.9 million at December 31, 2025. The increase was primarily due to net income of $10.0 million and a $5.0 million decrease in accumulated other comprehensive loss due to the balance sheet restructuring and the decreased interest rate environment. The Company's ratio of average equity to average assets was 10.09% for the year ended December 31, 2025 and 9.23% for the year ended December 31, 2024.

About Rhinebeck Bancorp

Rhinebeck Bancorp, Inc. is a Maryland corporation organized as the mid-tier holding company of Rhinebeck Bank and is the majority-owned subsidiary of Rhinebeck Bancorp, MHC. The Bank is a New York chartered stock savings bank, which provides a full range of banking and financial services to consumer and commercial customers through its thirteen branches and two representative offices located in Dutchess, Ulster, Orange, and Albany counties in New York State. Financial services including comprehensive brokerage, investment advisory services, financial product sales and employee benefits are offered through Rhinebeck Asset Management, a division of the Bank.

Forward Looking Statements

This press release contains certain forward-looking statements about the Company and the Bank. Forward-looking statements include statements regarding anticipated future events or results and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe", "expect", "anticipate", "estimate", "intend", "predict", "forecast", "improve", "continue", "will", "would", "should", "could", or "may". Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, inflation, changes in the interest rate environment, fluctuations in real estate values, general economic conditions or conditions within the securities markets, potential recessionary conditions, the imposition of tariffs or other domestic or international governmental policies and potential retaliatory responses, the impact of any federal government shutdown, changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio, our ability to access cost-effective funding, changes in asset quality, loan sale volumes, charge-offs and credit loss provisions, changes in economic assumptions that may impact our allowance for credit losses calculation, changes in demand for our products and services, legislative, accounting, tax and regulatory changes, including changes in the monetary and fiscal policies of the Board of Governors of the Federal Reserve System, the effect of our rating under the Community Reinvestment Act, political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, natural disasters, such as earthquakes, drought, pandemics, extreme weather events, or a breach of our operational or security systems or infrastructure, including cyberattacks that could adversely affect the Company's or the Bank's financial condition and results of operations and the business in which the Company and the Bank are engaged.

Accordingly, you should not place undue reliance on forward-looking statements. Rhinebeck Bancorp, Inc. undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

The Company's summary consolidated statements of income and financial condition and other selected financial data follow:

Rhinebeck Bancorp, Inc. and Subsidiary
Consolidated Statements of Income (Unaudited)
(In thousands, except share and per share data)

Rhinebeck Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition (Unaudited)
(In thousands, except share and per share data)

Rhinebeck Bancorp, Inc. and Subsidiary
Average Balance Sheet (Unaudited)
(Dollars in thousands)

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⁽¹⁾ Non-accruing loans are included in the outstanding loan balance. Deferred loan fees included in interest income totaled $36,000 and $16,000 for the three months ended December 31, 2025 and 2024, respectively.
⁽²⁾ Represents the difference between interest earned and interest paid, divided by average total interest-earning assets.
⁽³⁾ Annualized.

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⁽¹⁾ Non-accruing loans are included in the outstanding loan balance. Deferred loan fees included in interest income totaled $218,000 and $60,000 for the year ended December 31, 2025 and 2024, respectively.
⁽²⁾ Represents the difference between interest earned and interest paid, divided by average total interest-earning assets.
⁽³⁾ Annualized.

Rhinebeck Bancorp, Inc. and Subsidiary
Selected Ratios (Unaudited)

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⁽¹⁾ Ratios for the three month periods ended December 31, 2025,September 30, 2025 and December 31, 2024 are annualized.
⁽²⁾ Represents net income divided by average total assets.
⁽³⁾ Represents net income divided by average equity.
⁽⁴⁾ Represents net interest income as a percent of average interest-earning assets.
⁽⁵⁾ Represents average equity divided by average total assets.
⁽⁶⁾ Capital ratios are for Rhinebeck Bank only. Rhinebeck Bancorp, Inc. is not subject to the minimum consolidated capital requirements as a small bank holding company with assets of less than $3.0 billion.
⁽⁷⁾ Represents a non-GAAP financial measure, see table below for a reconciliation of the non-GAAP financial measures.

NON-GAAP FINANCIAL INFORMATION

This release contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). Such non-GAAP financial information includes the following measures: tangible book value per common share, efficiency ratio and earnings per share excluding securities loss. Management uses these non-GAAP measures because we believe that they may provide useful supplemental information for evaluating our operations and performance, as well as in managing and evaluating our business and in discussions about our operations and performance. Management believes these non-GAAP measures may also provide users of our financial information with a meaningful measure for assessing our financial results, as well as a comparison to financial results for prior periods. These non-GAAP measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP and are not necessarily comparable to other similarly titled measures used by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included below. Loss on available-for-sale securities is excluded from the following calculations as management believes that this presentation provides further comparability of net income (loss), earnings (loss) per share and the efficiency ratio and is consistent with industry practice.

Related Links

http://www.Rhinebeckbank.com

SOURCE: Rhinebeck Bancorp, Inc.

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Ch.P.Lewis--AT