Rhinebeck Bancorp(US:RBKB)2025-03-25 20:20Credit Losses and Charge-offs - The allowance for credit losses increased by $415,000, or 5.1%, primarily due to updates in prepayment assumptions and adjustments to qualitative and quantitative factors [111]. - The allowance for credit losses at the end of the period was $8,539,000, compared to $8,124,000 at the end of the previous year [111]. - Net charge-offs for the year ended December 31, 2024 totaled $2.4 million, compared to $2.1 million for the year ended 2023 [113]. - The allowance for credit losses to total loans outstanding at the end of the period was 0.88%, up from 0.81% in the previous year [111]. - The total charge-offs for the year were $4,726,000, compared to $4,475,000 in the previous year [111]. - The allowance for credit losses to non-performing loans at the end of the period was 206.56%, an increase from 194.31% in the previous year [111]. - The company had net recoveries of $2,328,000 for the year ended December 31, 2024, compared to $2,410,000 in the previous year [111]. Investment Portfolio - The investment portfolio had a fair value of $159.9 million as of December 31, 2024, primarily consisting of U.S. Government securities and corporate bonds [117]. - The weighted average yield of investment securities was calculated without tax equivalent adjustments, reflecting the income divided by amortized cost [124]. - The average yield on total securities was 2.98%, with U.S. Treasury securities yielding 3.57% [125]. - The aggregate fair value of FHLB common stock was $4.0 million as of December 31, 2024, based on its par value [122]. Deposits and Accounts - Total deposits as of December 31, 2024, amounted to $1.02 billion, with uninsured deposits estimated at $278.3 million [129]. - The average balance of non-interest-bearing demand accounts was $242.6 million, representing 23.45% of total deposits, while interest-bearing demand accounts averaged $124.1 million at a rate of 0.14% [132]. - Certificates of deposit totaled $339.1 million, with an average rate paid of 4.58%, up from 3.74% in 2023 [132]. - Uninsured deposits after exclusions accounted for 26.4% of total deposits, with a coverage ratio of 227.6% [133]. Employment and Workforce - The company had 157 full-time employees and 11 part-time employees as of December 31, 2024, with an average tenure of 7 years and 8 months [143]. - Approximately 61% of the workforce was female, indicating a commitment to diversity [144]. Regulatory Compliance and Capital Requirements - Rhinebeck Bank exceeded all capital requirements as of December 31, 2024 [169]. - The bank is classified as "well capitalized" with a total risk-based capital ratio of 10.0% or greater [176]. - Rhinebeck Bank is subject to comprehensive regulation by the NYSDFS and the FDIC, ensuring safety and soundness [155]. - The bank's capital standards require a common equity Tier 1 capital ratio of at least 4.5% [166]. - Regulatory relief legislation allows for a community bank leverage ratio of 9% for qualifying institutions [168]. - The bank must obtain regulatory approvals before entering into mergers or acquisitions [164]. - The bank's investment activities are limited to certain types of debt and equity securities [173]. - The bank's lending activities include a variety of mortgage and commercial loans [159]. - The FDIC has the authority to assess civil money penalties and issue cease and desist orders for regulatory violations [165]. - The bank's executive officers and directors are subject to specific regulations regarding loans and credit extensions [162]. - The bank is required to submit a capital restoration plan if classified as undercapitalized, with a guarantee from its holding company equal to the lesser of 5.0% of total assets or the amount necessary to achieve adequately capitalized status [177]. - Transactions with affiliates are limited to 10.0% of the bank's capital stock and surplus for any one affiliate, and 20.0% for all affiliates combined [178]. - Loans to insiders, including executive officers and directors, cannot exceed specified limits and must be made on terms substantially the same as those offered to unaffiliated persons [179]. Deposit Insurance and CRA Ratings - Deposit accounts are insured by the FDIC up to a maximum of $250,000 per depositor per account ownership category [180]. - The FDIC's risk-based assessment system for deposit insurance currently ranges from 2.5 to 32 basis points of total assets less tangible capital for banks with less than $10 billion in assets [182]. - The bank's latest CRA rating was "Needs to Improve," and new regulations will be applicable starting January 1, 2026 [193]. - The bank's most recent rating under New York's community reinvestment law was "Satisfactory" [194]. Holding Company and Dividend Policies - The bank holding company is not subject to holding company capital requirements unless advised by the Federal Reserve Board, as it has less than $3.0 billion in consolidated assets [198]. - A bank holding company must notify the Federal Reserve Board of any purchase or redemption of equity securities if it equals 10% or more of consolidated net worth [199]. - Rhinebeck Bancorp, Inc. may face restrictions on paying dividends due to Federal Reserve Board policies requiring dividends to be paid only from current earnings and consistent with capital needs [200]. - Rhinebeck Bancorp, MHC is unlikely to waive dividends from Rhinebeck Bancorp, Inc. due to Federal Reserve Board restrictions, which may affect public stockholders' interests [202]. - Rhinebeck Bancorp, Inc. raised significantly less capital than expected by selling only a minority of its shares to the public, impacting its ability to pay dividends [203]. - A potential future conversion of Rhinebeck Bancorp, MHC from mutual to capital stock form would require approval from the NYSDFS and the Federal Reserve Board [204]. - Any acquisition of control over Rhinebeck Bancorp, Inc. requires prior non-objection or approval from the Federal Reserve Board, with control defined as owning 25% or more of voting securities [205]. - Rhinebeck Bancorp, MHC and Rhinebeck Bancorp, Inc. must receive approval from NYSDFS before acquiring 10% or more of another banking institution's voting stock [206]. Taxation - Rhinebeck Bancorp, Inc. is subject to federal income taxation and reports income on an accrual basis, with a tax year ending December 31 [211]. - As of December 31, 2024, Rhinebeck Bank had no capital loss carryovers, indicating a stable financial position [212]. - The New York State statutory tax rate is currently 6.5% for general business taxpayers, increasing to 7.25% for those with business income over $5 million [214].