Rhinebeck Bancorp(RBKB) - 2025 Q3 - Quarterly Report

Financial Performance - Net income for the third quarter of 2025 was $2.7 million, compared to a net loss of $8.1 million for the third quarter of 2024, with diluted earnings per share of $0.25 [159] - Non-interest income surged by $11.9 million, or 119.4%, in the third quarter of 2025 compared to the same quarter in 2024 [159] - Net interest income increased by $2.4 million, or 24.5%, to $12.0 million for the three months ended September 30, 2025 [162] - Non-interest expense rose to $9.7 million for the third quarter of 2025, reflecting a $646,000, or 7.1%, increase compared to the same period in 2024 [173] - The provision for income taxes increased by $2.9 million to $648,000 for the three months ended September 30, 2025, compared to a benefit of $2.2 million for the same period in 2024 [175] Asset and Liability Management - Total assets increased by $60.2 million, or 4.8%, to $1.32 billion as of September 30, 2025, primarily due to a $66.0 million increase in cash and cash equivalents, which rose by 176.0% [148] - Total liabilities increased by $49.1 million, or 4.3%, to $1.18 billion at September 30, 2025, primarily due to the increase in total deposits [152] - Stockholders' equity rose by $11.2 million, or 9.2%, to $133.0 million at September 30, 2025, with a book value per share of $11.93 [157] - Total available sources of funds amounted to $707.8 million as of September 30, 2025, including $103.5 million in cash and cash equivalents and $326.7 million in remaining secured borrowing capacity [193] Loan and Deposit Growth - Deposits increased by $95.0 million, or 9.3%, to $1.12 billion at September 30, 2025, driven by a $49.8 million increase in money market accounts and a $43.7 million increase in certificates of deposit [153] - Net loans receivable increased by $5.9 million, or 0.6%, to $977.6 million, reflecting growth in commercial and residential real estate loans [151] Interest Income and Margin - The net interest margin expanded by 68 basis points to 3.93% compared to the same quarter in 2024, driven by higher yields on loans and securities [162] - Interest income rose by $1.8 million, or 11.0%, to $17.8 million for the three months ended September 30, 2025, with an average yield on interest-earning assets increasing by 42 basis points to 5.80% [164] - The interest rate spread improved to 3.27% in Q3 2025 from 2.50% in Q3 2024, indicating better profitability on interest-earning assets [178] Operational Changes - The Bank has partnered with Homestead Funding Corporation to originate residential mortgages, discontinuing direct mortgage origination [144] - The Bank plans to close its Middletown branch effective January 27, 2026, to enhance operational efficiency [145] Credit Losses and Provisions - The allowance for credit losses is based on expected lifetime credit losses, which may differ significantly from actual results due to macroeconomic conditions [147] - The provision for credit losses increased by $15,000, or 1.7%, to $904,000 for the quarter ended September 30, 2025, primarily due to higher loan balances [168] Cash Flow and Investments - Net cash provided by operating activities was $9.0 million for the nine months ended September 30, 2025, compared to $4.9 million for the same period in 2024, reflecting a significant increase [192] - Net cash provided by investing activities totaled $10.7 million in the first nine months of 2025, a decrease from $77.7 million in the prior-year period, primarily due to a $58.6 million sale of securities in 2024 [192] - Cash and cash equivalents increased by $66.0 million during the period to $103.5 million as of September 30, 2025, from a beginning balance of $37.5 million [192] Risk Management and Controls - The company is actively managing interest rate risk through strategies such as originating loans with adjustable rates and promoting core deposit products [185] - There were no changes in the company's internal controls over financial reporting during the quarter ended September 30, 2025, that materially affected internal control [197] - The company is not a party to any pending legal proceedings that would have a material effect on its financial condition, results of operations, or cash flows [199] Inflation Impact - The impact of inflation is reflected in the increased cost of operations, with changes in market interest rates having a greater impact on performance than inflation effects [195]