POUGHKEEPSIE, NY / ACCESS Newswire / July 24, 2025 / Rhinebeck Bancorp, Inc. (the "Company") (NASDAQ: RBKB), the holding company of Rhinebeck Bank (the "Bank"), reported net income for the three months ended June 30, 2025 of $2.7 million ($0.25 per basic and diluted share), which was $1.8 million, or 179.6%, higher than the comparable prior year period of $975,000 ($0.09 per basic and diluted share). Net income for the six months ended June 30, 2025 of $5.0 million ($0.47 per basic and $0.46 per diluted share) was $2.9 million, or 139.2%, higher than the same period last year.

The increase in net income for the quarter ended June 30, 2025 as compared to the quarter ended June 30, 2024 was primarily due to increases in net interest income and a decrease in the provision for credit losses, partially offset by an increase non-interest expense. The Company's return on average assets and return on average equity were 0.88% and 8.57% for the second quarter of 2025, respectively, as compared to 0.31% and 3.43% for the second quarter of 2024, respectively. The increase in net income for the six months ended June 30, 2025 when compared to the six months ended June 30, 2024 was primarily due to an increase in net interest income, a decrease in the provision for credit losses, and an increase in non-interest income, partially offset by an increase in non-interest expense. The Company's return on average assets and return on average equity were 0.80% and 8.04% for the first six months of 2025, respectively, as compared to 0.32% and 3.67% for the first six months of 2024, respectively.

President and Chief Executive Officer Michael J. Quinn said, "We're very pleased with our performance through the first half of 2025, as net income more than doubled to $5.0 million compared to $2.1 million in the prior year period, our net interest margin expanded to 3.88%, and our return on average equity improved to 8.04%, reflecting strong asset-liability management and disciplined operating execution. We also saw continued improvement in credit quality, with non-performing assets declining 30% and net charge-offs totaling just 0.06% of average loans. With our Tier 1 capital ratio at 12.66% and tangible book value per share rising to $11.40, we remain well-capitalized and confident in our ability to deliver sustainable growth and value for shareholders."

Income Statement Analysis

Net interest income increased $2.4 million, or 27.1%, to $11.5 million for the three months ended June 30, 2025, from $9.0 million for the three months ended June 30, 2024. The increase was primarily due to higher yields on interest earning assets and lower costs on interest bearing liabilities. The interest rate spread improved 100 basis points from 2.33% for the three months ended June 30, 2024 to 3.33% for the three months ended June 30, 2025, as asset yields outpaced liability costs. For the three months ended June 30, 2025, when compared to the three months ended June 30, 2024, the average yield of interest-earning assets improved by 50 basis points to 5.78% while the average balance decreased by $33.3 million, or 2.8%, to $1.16 billion. A 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 $45.7 million, or 5.1%, primarily due to a $61.6 million decrease in the average balance of FHLB advances, while the cost of interest-bearing liabilities decreased by 50 basis points to 2.45% due to the lower market interest rate environment. The net interest margin increased by 93 basis points to 3.97%.

Year-to-date net interest income increased $4.7 million, or 26.2%, to $22.5 million compared to $17.9 million for the prior year six-month period primarily due to higher yields on interest earning assets and lower costs on interest bearing liabilities. The interest rate spread improved by 97 basis points, increasing from 2.26% for the six months ended June 30, 2024, to 3.23% for the same period in 2025, primarily due to more favorable asset pricing relative to liabilities. For the six months ended June 30, 2025, the average balance of interest-earning assets decreased by $37.8 million, or 3.1%, to $1.17 billion while the average yield improved by 56 basis points to 5.75%, when compared to the six months ended June 30, 2024. A 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 $46.0 million, or 5.0%, primarily due to a decrease in the average balance of FHLB advances, while the cost of interest-bearing liabilities decreased by 41 basis points to 2.52% due to the lower interest rate environment. The net interest margin increased by 91 basis points to 3.88% for the six months ended June 30, 2025 from 2.97% for the six months ended June 30, 2024.

The provision for credit losses decreased by $548,000, or 122.6%, from $447,000 for the quarter ended June 30, 2024 to a credit of $101,000 for the current quarter. The decrease in the provision was primarily due to lower loan balances and a decrease in net charge-offs. Net charge-offs decreased $742,000 from $833,000 for the second quarter of 2024 to $91,000 for the second quarter of 2025. The decrease was primarily due to decreased net charge-offs in indirect automobile loans of $397,000 and a second quarter 2024 charge-off on commercial real estate property of $291,000.

Year-to-date, the provision for credit losses decreased by $278,000, or 52.5%, from $530,000 for the six months ended June 30, 2024 to $252,000 for the six months ended June 30, 2025. The decrease in the provision was primarily due to lower loan balances and a decrease in net charge-offs. Net charge-offs decreased $481,000, or 44.5% to $601,000 for the first six months of 2025 as compared to $1.1 million for the first six months of 2024. The decrease was primarily due to decreased net charge-offs in indirect automobile loans of $235,000 as well as the 2024 charge-off in commercial real estate of $291,000. The percentage of overdue account balances to total loans decreased to 1.31% at June 30, 2025 from 1.71% at December 31, 2024, while non-performing assets decreased $1.2 million, or 29.7%, to $2.9 million at June 30, 2025.

Non-interest income totaled $1.6 million for the three months ended June 30, 2025, a decrease of $4,000, or 0.2%, from the comparable period in 2024, due primarily to a decrease of $109,000, or 28.8%, in investment advisory income, resulting from unpredictable economic conditions. This decrease was substantially offset by an increase in other non-interest income of $73,000, or 27.1% as swap income increased and an increase on gains on sales of loans of $34,000 as we sold $2.7 million of residential mortgage loans in the second quarter of 2025 as compared to sales of $1.3 million in the second quarter of 2024.

Non-interest income totaled $3.4 million for the six months ended June 30, 2025, an increase of $157,000, or 4.9%, from the comparable period in 2024, due primarily to an increase of $239,000, or 46.1%, in other non-interest income as swap income increased, partially offset by a decrease in investment advisory income of $154,000 resulting from unpredictable market and economic conditions. Additional increases included a $26,000 gain on sales of loans, a $22,000 increase in service charges on deposit accounts, an $18,000 gain on the disposal of premises and equipment, and a $10,000 increase in the cash surrender value of bank-owned life insurance.

For the second quarter of 2025, non-interest expense rose to $9.7 million, reflecting a $760,000, or 8.5%, increase compared to the same period in 2024. The increase was broad-based, with nearly all major expense categories rising. Salaries and employee benefits rose $330,000, or 6.7%, primarily due to increased production commissions. Other non-interest expense grew by $191,000, or 12.0%, driven primarily by higher retail banking costs. Marketing expense rose by $108,000, or 93.9%, largely due to promotional initiatives associated with the launch of higher-yielding deposit products. Occupancy expense increased by $53,000, or 5.0%, due to higher branch repair costs. Additionally, professional fees, FDIC insurance expense, and data processing fees increased by $34,000, $34,000, and $13,000, respectively.

For the six months ended June 30, 2025, non-interest expense totaled $19.2 million, an increase of $1.4 million, or 7.8%, compared to $17.8 million for the same period in 2024. The increase was primarily due to higher compensation and operating costs across multiple categories. Salaries and employee benefits increased by $472,000, or 4.8%, driven primarily by higher incentive-based compensation and annual merit increases to retain and attract talent. Other non-interest expense increased by $447,000, or 14.3%, primarily due to higher retail banking and administrative costs. Marketing expense increased by $187,000, or 79.2%, related to promotional campaigns for new deposit products. Professional fees rose by $97,000, or 11.1%, reflecting increased consulting and legal services. Additional increases were noted in FDIC deposit insurance and other insurance, which rose $78,000, or 15.2%, and occupancy expense, which increased $71,000, or 3.4%, due to facilities-related costs. Data processing expense also increased by $43,000, or 4.2%.

Balance Sheet Analysis

Total assets increased by $18.5 million, or 1.5%, to $1.27 billion as of June 30, 2025. Cash and cash equivalents rose by $52.1 million, or 139.1%, driven by higher interest bearing deposits and decreases in available for sale securities and loans receivable. Available-for-sale securities declined by $18.6 million, or 11.6%, primarily due to $24.6 million in paydowns, calls, and maturities, partially offset by a $3.3 million reduction in unrealized losses and $2.6 million in purchases. Loans receivable declined by $11.0 million, or 1.1%, to $960.8 million, primarily reflecting a decline of $39.6 million in indirect automobile loans, in line with a strategic decision to reduce their share of the portfolio, partially offset by a $22.9 million increase in commercial real estate loans and a $7.4 million increase in residential real estate loans.

Past due loans decreased $4.1 million, or 24.3%, to $12.6 million, or 1.31% of total loans at June 30, 2024, 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 0.85% of total loans and 283.14% of non-performing loans at June 30, 2025 as compared to 0.88% of total loans and 206.56% of non-performing loans at December 31, 2024. Non-performing assets totaled $2.9 million at June 30, 2025, a decrease of $1.2 million, or 29.7%, from $4.1 million at December 31, 2024.

Total liabilities increased by $11.4 million, or 1.0%, to $1.15 billion at June 30, 2025. The increase was primarily driven by a $50.0 million, or 4.9%, increase in deposits. The growth in deposits was almost entirely attributable to a $48.7 million, or 6.2%, increase in interest-bearing deposits, while non-interest-bearing deposits increased slightly by $1.4 million, or 0.6%. The increase in deposits was primarily due to increases in money market accounts and time certificates of deposit, which reflected the Bank's promotion of higher-yielding products in response to customer demand for better interest rates. Uninsured deposits were approximately 27.8% and 26.9% of the Bank's total deposits as of June 30, 2025 and December 31, 2024, respectively. The increase in deposits was partially offset by a $43.2 million, or 61.9%, reduction in borrowings.

Stockholders' equity increased $7.1 million, or 5.8%, to $129.0 million at June 30, 2025. The increase was primarily due to $5.0 million in net income and a $2.0 million decrease in accumulated other comprehensive loss reflecting the results of the balance sheet restructuring. The Company's ratio of average equity to average assets was 9.99% for the three months ended June 30, 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, 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)

⁽¹⁾ Non-accruing loans are included in the outstanding loan balance. Deferred loan fees included in interest income totaled $86,000 and $16,000 for the three months ended June 30, 2025 and 2024, respectively.
⁽²⁾ Represents the difference between interest earned and interest paid, divided by average total interest earning assets.
⁽³⁾ Annualized.

⁽¹⁾ Non-accruing loans are included in the outstanding loan balance. Deferred loan fees included in interest income totaled $140,000 and $33,000 for the six months ended June 30, 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)

(1) Performance ratios for the three and six month periods ended June 30, 2025 and 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.