Rhinebeck Bancorp(RBKB) - 2023 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2023, decreased by $871,000, or 41.3%, to $1.2 million, or $0.11 per diluted share, compared to $2.1 million, or $0.19 per diluted share, for the same period in 2022[173] - Net interest income for the three months ended September 30, 2023, decreased by $1.4 million, or 13.0%, to $9.7 million compared to $11.1 million for the same quarter in 2022[175] - Non-interest income increased by $257,000, or 18.5%, for the three months ended September 30, 2023[173] - Non-interest income for Q3 2023 totaled $1.6 million, an increase of $257,000, or 18.5%, primarily due to a gain on life insurance[186] - Net interest income for the nine months ended September 30, 2023, was $28,822 thousand, down from $32,078 thousand in 2022, a decrease of 10.5%[195] - Non-interest income for the nine months ended September 30, 2023 decreased by $223,000, or 4.8%, to $4.4 million, primarily due to a decrease in net gain on sales of mortgage loans[187] Asset and Liability Management - Total assets decreased by $20.5 million, or 1.5%, to $1.315 billion at September 30, 2023, compared to $1.336 billion at December 31, 2022[163] - Total net loans receivable increased by $9.4 million, or 0.9%, to $1.004 billion at September 30, 2023, with commercial real estate loans increasing by $47.5 million, or 12.8%[166] - Deposits decreased by $47.6 million, or 4.2%, to $1.082 billion at September 30, 2023, with interest-bearing accounts decreasing by $41.0 million, or 4.8%[169] - Stockholders' equity decreased by $1.5 million, or 1.4%, to $106.7 million at September 30, 2023, primarily due to a $3.4 million increase in accumulated other comprehensive loss[172] - Total interest-bearing liabilities increased to $931,178 thousand in 2023 from $841,157 thousand in 2022, an increase of 10.7%[195] Interest Income and Expense - Interest income increased by $3.0 million, or 23.7%, to $15.5 million for Q3 2023 compared to Q3 2022, driven by a rising interest rate environment and an increase in the average balance of loans[177] - Interest expense surged by $4.4 million, or 303.6%, to $5.9 million for Q3 2023, with the average cost of interest-bearing liabilities increasing by 182 basis points to 2.50%[180] - The average yield on loans increased to 5.44% in 2023 from 4.76% in 2022, an increase of 14.3%[195] Credit Losses - The provision for credit losses increased by $365,000 for the three months ended September 30, 2023[173] - The provision for credit losses on loans increased by $365,000 to $910,000 for Q3 2023, attributed to higher loan balances and increased charge-offs[182] Cash Flow and Investments - Net cash provided by operating activities was $6.9 million for the nine months ended September 30, 2023, down from $16.0 million in the same period of 2022[209] - Net cash provided by investing activities was $12.6 million for the nine months ended September 30, 2023, compared to a net cash outflow of $84.3 million in the prior year[209] - Cash outlays for the purchase of securities decreased from $30.2 million in the first nine months of 2022 to $0 in the same period of 2023[209] Regulatory and Operational Considerations - The effective tax rate for Q3 2023 was 21.72%, a slight decrease from 22.02% in Q3 2022, reflecting a decrease in income before income taxes[190] - There were no changes in the company's internal controls over financial reporting that materially affected the company during the quarter ended September 30, 2023[217] - As of the date of the report, the company is not involved in any pending legal proceedings that would materially affect its financial condition[219] Market Conditions - The impact of inflation has increased the cost of operations, but the company's assets and liabilities are primarily monetary, making them more sensitive to changes in market interest rates[215]