Rhinebeck Bancorp(US:RBKB)2023-05-11 20:08Financial Performance - Net income for the quarter decreased by $1.3 million, or 61.1%, to $798,000, compared to $2.1 million for the same period in 2022[175]. - Non-interest income for Q1 2023 totaled $1.4 million, a decrease of $335,000 or 19.6% from the prior year, primarily due to a 97.5% drop in gains on sales of mortgage loans[181]. - Net interest income for Q1 2023 was $9.864 million, down from $10.114 million in Q1 2022[186]. - The interest rate spread decreased to 2.65% in Q1 2023 from 3.29% in Q1 2022[186]. - The provision for credit losses increased by $793,000 to $1.0 million, attributed to higher loan balances and economic conditions[179]. Asset and Liability Management - Total assets increased by $15.4 million, or 1.2%, to $1.35 billion at March 31, 2023, compared to $1.34 billion at December 31, 2022[167]. - Net loans receivable rose by $10.4 million, or 1.0%, to $1.00 billion, driven by a $25.8 million increase in the commercial real estate portfolio[170]. - Deposits decreased by $36.4 million, or 3.2%, to $1.09 billion, with interest-bearing accounts down by $22.6 million, or 2.7%[172]. - Stockholders' equity increased by $2.6 million, or 2.4%, to $110.7 million, with a book value per share of $9.81[173]. - The average yield on loans increased by 66 basis points, while the overall average yield of interest-earning assets rose by 104 basis points to 4.75%[177]. Non-Performing Assets and Credit Quality - Non-performing assets rose by $1.1 million, or 25.9%, to $5.6 million at March 31, 2023[170]. - The ratio of average interest-earning assets to average interest-bearing liabilities decreased by 6.2% to 136.11%[176]. Operational Costs and Expenses - Non-interest expense increased to $9.2 million, up $98,000 or 1.1% year-over-year, driven by a 27.6% rise in other non-interest expenses and a 54.9% increase in insurance expenses[182]. - The impact of inflation has increased operational costs, although the primary assets and liabilities are monetary in nature, making interest rate changes more significant[204]. Cash Flow and Financing Activities - Net cash provided by operating activities was $3.1 million for Q1 2023, down from $7.5 million in Q1 2022[198]. - Net cash provided from financing activities was $11.3 million in Q1 2023, compared to $7.1 million in the same period of 2022[199]. - Cash outlays for the purchase of securities decreased from $27.2 million in Q1 2022 to $0 in Q1 2023[199]. - As of March 31, 2023, total available sources of funds amounted to $428,520,000, including cash and cash equivalents of $36,143,000 and unencumbered securities of $136,675,000[200]. Regulatory and Compliance - The company adopted the Current Expected Credit Losses (CECL) accounting standard on January 1, 2023, implementing new internal controls to manage credit loss allowances[206]. - The company has contractual obligations totaling $403,570,000, with $321,728,000 due within one year[202]. - The company has commitments and obligations under off-balance financial instruments and benefit plans, which are not included in the contractual obligations table[201]. - The company is not currently involved in any legal proceedings that would materially affect its financial condition[207]. Market and Economic Conditions - Recent bank industry events have led to decreased confidence among depositors and investors, potentially impacting liquidity and net interest margins[210]. - The net economic value (EVE) decreased by 27.5% to $107.738 million with a 400 basis point increase in interest rates[194].