Rhinebeck Bancorp, Inc.
For the period ended Sep 30, 2025. Filed Nov 13, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 13, 2025
RBKB$13.24+1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-12.
0001751783-25-000042
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001751783-25-000054
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 59 previous paragraphs and 63 current paragraphs.
27 unchanged; 30 reworded; 6 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 43 previous and 44 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Recent Developments
Current report
In response to shifting industry dynamics, including the rise of digital platforms, online loan originations, and competition from non-bank lenders, the Bank has decided to discontinue originating residential mortgages directly. Instead, the Bank has partnered with Homestead Funding Corporation (“Homestead”), a well-established non-bank lender, to originate mortgages on its behalf. Customers will be referred to Homestead for mortgage originations, after which the Bank will purchase and service loans for those who select its products. Neither the Bank nor Homestead receive any fees or other forms of consideration from the other as a condition of or in exchange for the referral of business. All loans purchased from Homestead are residential real estate loans secured by a first lien mortgage that comply with certain underwriting guidelines, and all rights and title to the loan (including servicing rights) are transferred to the Bank when purchased. The Bank remains committed to adapting to industry changes while maintaining its focus on customer service and community support.
Current report
The Bank has made the decision to close its Middletown branch, effective January 27, 2026, as part of its ongoing strategy to enhance operational efficiency and position the Bank for long-term growth. In preparation for the closure, customer accounts will be transferred to the nearest branch by year-end 2025, with customers being notified by mail and signage posted at the Middletown location. Additionally, beginning January 31, 2026, the Goshen branch will extend its hours to include Saturday service to better accommodate affected customers. The Bank is committed to ensuring a seamless transition for both its customers and employees throughout this process.
Current report
Both the third quarter and nine months of 2024 results reflected a $12.0 million pre-tax loss from the 2024 balance sheet restructuring.
Current report
Non-Interest Income. Non-interest income totaled $1.9 million for the three months ended September 30, 2025, compared to a net loss of $10.0 million for the same period in 2024, representing an increase of $11.9 million. The prior-year period included a $12.0 million loss on the sale of investment securities related to the Company’s balance sheet restructuring. Excluding this loss, non-interest income would have decreased $65,000 from $2.0 million for the three months ended September 30, 2024 to $1.9 million for the current period, primarily due to a $412,000 decrease in income related to life insurance proceeds recognized during the third quarter of 2024. This decrease was substantially offset by a $245,000 increase in other non-interest income, primarily due to higher swap income; a $92,000, or 24.5%, increase in investment advisory income, attributable to higher staffing levels; and a $39,000 increase in gain on sale of loans.
Current report
Non-interest income totaled $5.3 million for the nine months ended September 30, 2025, compared to a net loss of $6.8 million for the same period in 2024, representing an increase of $12.1 million. The net loss in the prior-year period was primarily attributable to a $12.0 million loss on the sale of investment securities in connection with the Company’s 2024 balance sheet restructuring. Excluding this loss, non-interest income would have increased by $92,000, from $5.2 million for the nine months ended September 30, 2024, to $5.3 million for the nine months ended September 30, 2025. The increase in non-interest income reflects a $484,000, or 67.1%, increase in other non-interest income, primarily due to higher swap income, and a $65,000 increase in gain on sales of loans. These increases were largely offset by $412,000 in income related to life insurance proceeds recognized during the third quarter of 2024 and a $62,000 decrease in investment advisory income, primarily due to reduced staffing levels earlier in the year, which have since begun to stabilize.
Removed paragraphs (2)
Previous report
Non-Interest Income. 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 departmental turnover and 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.
Previous report
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 departmental turnover and unpredictable 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.
Reworded paragraphs (30)
Previous wording
Management’s discussion and analysis of financial condition and results of operations at June 30, 2025 and December 31, 2024, and for the three and six months ended June 30, 2025 and 2024, is intended to assist in understanding the financial condition and results of operations of the Company and the Bank. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current wording
Management’s discussion and analysis of financial condition and results of operations at September 30, 2025 and December 31, 2024, and for the three and nine months ended September 30, 2025 and 2024, is intended to assist in understanding the financial condition and results of operations of the Company and the Bank. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
This report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “approximate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “intend,” “predict,” “forecast,” “improve,” “continue,” “will,” “would,” “should,” “could,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to:
Current wording
This report may contain forward-looking statements, which can be identified by the use of words such as “estimate,” “approximate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “intend,” “predict,” “forecast,” “improve,” “continue,” “will,” “would,” “should,” “could,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to:
Previous wording
Total Assets. Total assets increased by $18.5 million, or 1.5%, to $1.27 billion as of June 30, 2025, due primarily to an increase in cash and cash equivalents of $52.1 million, or 139.1%. This increase was partially offset by decreases in available for sale securities which declined by $18.6 million, or 11.6%, and loans receivable, which declined by $11.0 million, or 1.1%, to $960.8 million.
Current wording
Total Assets. Total assets increased by $60.2 million, or 4.8%, to $1.32 billion as of September 30, 2025, due primarily to an increase in cash and cash equivalents of $66.0 million, or 176.0%, and loans receivable, which increased by $5.9 million, or 0.6%, to $977.6 million. This increase was partially offset by decreases in available for sale securities which declined by $11.0 million, or 6.9%, and by a $2.3 million, or 28.9%, decrease in deferred tax assets.
Previous wording
Cash and Cash Equivalents. Cash and cash equivalents increased $52.1 million, or 139.1%, to $89.6 million at June 30, 2025 from $37.5 million at December 31, 2024, primarily due to a $47.2 million, or 258.0%, increase in federal funds sold, as well as increases in deposits held at the FHLB, Federal Reserve Bank of New York and other interest-bearing depository accounts. The increase was primarily driven by higher interest-bearing deposits and decreases in available for sale securities and loans receivable.
Current wording
Cash and Cash Equivalents. Cash and cash equivalents increased $66.0 million, or 176.0%, to $103.5 million at September 30, 2025 from $37.5 million at December 31, 2024, primarily due to a $68.9 million, or 376.2%, increase in federal funds sold, as well as increases in deposits held at the FHLB, FRB and other interest-bearing depository accounts. The increase was primarily driven by deposit growth and proceeds from the decrease in available for sale securities.
Previous wording
Investment Securities Available for Sale. Available for sale securities declined $18.6 million, or 11.6%, to $141.3 million at June 30, 2025 from $159.9 million at December 31, 2024, 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.
Current wording
Investment Securities Available for Sale. Available for sale securities declined $11.0 million, or 6.9%, to $148.9 million at September 30, 2025 from $159.9 million at December 31, 2024, primarily due to $38.7 million in paydowns, calls, and maturities, partially offset by a $23.3 million in purchases and a $4.5 million reduction in unrealized losses.
Previous wording
Net Loans. Net loans receivable decreased $11.0 million, or 1.1%, to $960.8 million at June 30, 2025, compared to $971.8 million at December 31, 2024. This decrease reflects a decrease in consumer loans of $40.0 million, partially offset by growth in our commercial real estate and residential real estate loan portfolios of $22.9 million and $7.4 million, respectively. The decrease in consumer loans was primarily the result of a strategic reduction in indirect automobile loans of $39.6 million. At June 30, 2025, indirect automobile loans were 20.1% of assets, compared to 23.5% at December 31, 2024. The increase in commercial real estate loans was primarily due to a $21.4 million increase in non-residential real estate loans and a $3.4 million increase in multi-family commercial real estate loans, partially offset by a $1.9 million decrease in commercial construction loans. Non-accrual loans decreased by $1.2 million, or 29.7%, from $4.1 million at December 31, 2024 to $2.9 million at June 30, 2025.
Current wording
Net Loans. Net loans receivable increased $5.9 million, or 0.6%, to $977.6 million at September 30, 2025, compared to $971.8 million at December 31, 2024. This increase reflects growth in our commercial real estate and residential real estate loan portfolios of $57.8 million and $12.5 million, respectively, partially offset by a decrease in consumer loans of $62.2 million. The increase in commercial real estate loans was primarily due to a $62.0 million increase in non-residential real estate loans and an $8.1 million increase in multi-family commercial real estate loans, partially offset by a $12.2 million decrease in commercial construction loans. The decrease in consumer loans was primarily the result of a strategic reduction in indirect automobile loans of $61.6 million. At September 30, 2025, indirect automobile loans were 17.8% of assets, compared to 23.5% at December 31, 2024. Non-accrual loans decreased by $389,000, or 9.4%, from $4.1 million at December 31, 2024 to $3.7 million at September 30, 2025.
Previous wording
Total Liabilities. Total liabilities increased $11.4 million, or 1.0%, to $1.15 billion at June 30, 2025. The increase was primarily driven by a $50.0 million increase in total deposits and a $3.3 million increase in mortgagors' escrow accounts, partially offset by a decrease in FHLB advances of $43.2 million, or 61.9%.
Current wording
Total Liabilities. Total liabilities increased $49.1 million, or 4.3%, to $1.18 billion at September 30, 2025. The increase was primarily driven by a $95.0 million increase in total deposits, partially offset by a decrease in FHLB advances of $43.2 million, or 61.9%, and a decrease in mortgagors’ escrow accounts of $5.3 million, or 56.7%.
Previous wording
Deposits. Deposits increased $50.0 million, or 4.9%, to $1.07 billion at June 30, 2025 from $1.02 billion at December 31, 2024. Interest-bearing deposits increased $48.7 million, or 6.2%, while non-interest-bearing deposits increased $1.4 million, or 0.6%. The increase in interest-bearing deposits was primarily due to increases in money market accounts of $31.3 million and in certificates of deposit of $17.9 million, which reflected the Bank’s promotion of higher-yielding products in response to customer demand for better interest rates. These increases were only slightly offset by a decrease in NOW accounts of $1.3 million.
Current wording
Deposits. Deposits increased $95.0 million, or 9.3%, to $1.12 billion at September 30, 2025 from $1.02 billion at December 31, 2024. Interest-bearing deposits increased $80.5 million, or 10.3%, while non-interest-bearing deposits increased $14.6 million, or 6.1%. The increase in interest-bearing deposits was primarily due to increases in money market accounts of $49.8 million and in certificates of deposit of $43.7 million, which reflected the Bank’s promotion of higher-yielding products in response to customer demand for better interest rates. These increases were partially offset by decreases in NOW accounts of $9.7 million and savings accounts of $3.3 million.
Previous wording
We participate in reciprocal deposit programs, obtained through the Certificate Deposit Account Registry Service (CDARS) and IntraFi Cash Service (ICS) networks, that provide access to FDIC-insured deposit products in aggregate amounts exceeding the current limits for depositors. This allows us to maintain deposits that might otherwise be uninsured. Our reciprocal deposits obtained through the CDARS and ICS networks totaled $39.1 million and $38.9 million at June 30, 2025 and December 31, 2024, respectively. We had no brokered deposits at either June 30, 2025 or December 31, 2024.
Current wording
We participate in reciprocal deposit programs, obtained through the Certificate Deposit Account Registry Service (CDARS) and IntraFi Cash Service (ICS) networks, that provide access to FDIC-insured deposit products in aggregate amounts exceeding the current limits for depositors. This allows us to maintain deposits that might otherwise be uninsured. Our reciprocal deposits obtained through the CDARS and ICS networks totaled $37.3 million and $38.9 million at September 30, 2025 and December 31, 2024, respectively. We had no brokered deposits at either September 30, 2025 or December 31, 2024.
Previous wording
Mortgagors’ Escrow Accounts.** **Mortgagors’ escrow accounts increased $3.3 million, or 35.3%, to $12.7 million at June 30, 2025 from $9.4 million at December 31, 2024, primarily due to the timing of property tax and insurance disbursements.
Current wording
Mortgagors’ Escrow Accounts.** **Mortgagors’ escrow accounts decreased $5.3 million, or 56.7%, to $4.1 million at September 30, 2025 from $9.4 million at December 31, 2024, primarily due to the timing of property tax and insurance disbursements.
Previous wording
Advances from the Federal Home Loan Bank. FHLB advances declined $43.2 million, or 61.9%, to $26.6 million at June 30, 2025 from $69.8 million at December 31, 2024. The reduction reflects the Company’s use of excess liquidity from the maturity of securities, lower loan origination activity and increased deposits to pay down borrowings.
Current wording
Advances from the Federal Home Loan Bank. FHLB advances declined $43.2 million, or 61.9%, to $26.6 million at September 30, 2025 from $69.8 million at December 31, 2024. The reduction reflects the Company’s use of excess liquidity from the maturity of securities and increased deposits to pay down borrowings.
Previous wording
Stockholders’ Equity. Stockholders’ equity increased $7.1 million, or 5.8%, to $129.0 million at June 30, 2025 from $121.8 million at December 31, 2024. 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. In the fourth quarter of 2024, the Company sold $92 million of available for sale securities. The Company’s book value per share was $11.61 at June 30, 2025, compared to $10.98 at December 31, 2024. The ratio of stockholders’ equity to total assets increased to 10.12% from 9.70% over the same period. Unearned common stock held by the Bank’s employee stock ownership plan was $2.9 million and $3.1 million at June 30, 2025 and December 31, 2024, respectively.
Current wording
Stockholders’ Equity. Stockholders’ equity increased $11.2 million, or 9.2%, to $133.0 million at September 30, 2025 from $121.8 million at December 31, 2024. The increase was primarily due to $7.7 million in net income and a $3.4 million decrease in accumulated other comprehensive loss reflecting the results of the prior year balance sheet restructuring and the lower interest rate environment. The Company’s book value per share was $11.93 at September 30, 2025, compared to $10.98 at December 31, 2024. The ratio of stockholders’ equity to total assets increased to 10.11% from 9.70% over the same period. Unearned common stock held by the Bank’s employee stock ownership plan was $2.9 million and $3.1 million at September 30, 2025 and December 31, 2024, respectively.
Previous wording
Comparison of Operating Results for the Three and Six Months Ended June 30, 2025 and 2024
Current wording
Comparison of Operating Results for the Three and Nine Months Ended September 30, 2025 and 2024
Previous wording
Net Income. Net income for the second quarter of 2025 was $2.7 million, compared to $975,000 for the second quarter of 2024. Diluted earnings per share were $0.25 for the second quarter of 2025, up from $0.09 for the same quarter of 2024. Interest and dividend income increased $1.1 million, or 6.8%, while interest expense decreased $1.4 million, or 20.7%. The provision for credit losses decreased $548,000, or 122.6%. Non-interest income remained relatively flat decreasing $4,000, or 0.2%, and non-interest expense increased $760,000, or 8.5%. The provision for income taxes increased $480,000, or 170.2%, between the comparable quarters.
Current wording
Net Income. 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. Diluted earnings per share were $0.25 for the third quarter of 2025, compared to a loss per share of $0.75 for the same quarter of 2024. Interest and dividend income increased $1.8 million, or 11.0%, while interest expense decreased $617,000, or 9.7%. The provision for credit losses increased $15,000, or 1.7%. Non-interest income increased $11.9 million, or 119.4%, and non-interest expense increased $646,000, or 7.1%. The provision for income taxes increased $2.9 million between the comparable quarters.
Previous wording
Net income for the first half of 2025 was $5.0 million, compared to $2.1 million for the first half of 2024. Diluted earnings per share were $0.46 for the first six months of 2025, up from $0.19 for the same period of 2024. Interest and dividend income increased $2.2 million, or 6.9%, while interest expense decreased $2.5 million, or 18.8%. The provision for credit losses decreased $278,000, or 52.5%. Non-interest income rose $157,000, or 4.9%, and non-interest expense increased $1.4 million, or 7.8%. The provision for income taxes increased $798,000, or 132.3%, between the comparable periods.
Current wording
Net income for the first nine months of 2025 was $7.7 million, compared to a net loss of $6.0 million for the first nine months of 2024. Diluted earnings per share were $0.70 for the first nine months of 2025, compared to a diluted loss per share of $0.55 for the same period of 2024. Interest and dividend income increased $3.9 million, or 8.3%, while interest expense decreased $3.1 million, or 15.9%. The provision for credit losses decreased $263,000, or 18.5%. Non-interest income increased $12.1 million, or 177.9%, and non-interest expense increased $2.0 million, or 7.6%. The provision for income taxes increased $3.7 million between the comparable periods.
Previous wording
Net Interest Income. Net interest income increased $2.4 million, or 27.1%, to $11.5 million for the three months ended June 30, 2025. The ratio of average interest-earning assets to average interest-bearing liabilities rose 2.4% to 135.11%, while the net interest margin expanded by 93 basis points to 3.97% compared to the same quarter in 2024. The increase in the net interest margin was primarily due to a higher yield on loans and securities, coupled with a decline in the cost of interest-bearing liabilities. 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, reflecting an increase in the yield on assets versus a decrease in the cost of liabilities. The balance sheet restructuring in the second half of 2024 significantly increased the yield on our available for sale securities.
Current wording
Net Interest Income. Net interest income increased $2.4 million, or 24.5%, to $12.0 million for the three months ended September 30, 2025. The ratio of average interest-earning assets to average interest-bearing liabilities rose 0.1% to 135.11%, while the net interest margin expanded by 68 basis points to 3.93% compared to the same quarter in 2024. The increase in the net interest margin was primarily due to a higher yield on loans and securities, coupled with a decline in the cost of interest-bearing liabilities. Interest rate spread improved 77 basis points from 2.50% for the three months ended September 30, 2024 to 3.27% for the three months ended September 30, 2025, reflecting an increase in the yield on assets and a decrease in the cost of liabilities. The balance sheet restructuring in the second half of 2024 significantly increased the yield on our available for sale securities.
Previous wording
Net interest income increased $4.7 million, or 26.2%, to $22.5 million for the six months ended June 30, 2025. The ratio of average interest-earning assets to average interest-bearing liabilities rose 2.0% to 134.55%, while the net interest margin rose by 91 basis points to 3.88% compared to the same period in 2024. The increase in the net interest margin was primarily due to a higher yield on loans and securities, coupled with a decline in the cost of interest-bearing liabilities. Interest rate spread improved 97 basis points from 2.26% for the six months ended June 30, 2024 to 3.23% for the six months ended June 30, 2025, reflecting better pricing on assets versus liabilities. The balance sheet restructuring in the second half of 2024 significantly increased the yield on our available for sale securities.
Current wording
Net interest income increased $7.0 million, or 25.6%, to $34.6 million for the nine months ended September 30, 2025. The ratio of average interest-earning assets to average interest-bearing liabilities rose 1.4% to 134.74%, while the net interest margin rose by 84 basis points to 3.90% compared to the same period in 2024. The increase in the net interest margin was primarily due to a higher yield on loans and securities, coupled with a decline in the cost of interest-bearing liabilities. Interest rate spread improved 91 basis points from 2.34% for the nine months ended September 30, 2024 to 3.25% for the nine months ended September 30, 2025, reflecting better pricing on assets versus liabilities. The balance sheet restructuring in the second half of 2024 significantly increased the yield on our available for sale securities.
Previous wording
Interest income increased $2.2 million, or 6.9%, to $33.4 million for the six months ended June 30, 2025, compared to $31.2 million for the same period in 2024. The increase was primarily due to higher yields on loans and securities, partially offset by a decrease in the average balance of interest-earning assets. The average yield on interest-earning assets increased by 56 basis points to 5.75%, while the average balance of interest-earning assets declined by $37.8 million, or 3.1%, to $1.17 billion. The average yield on loans increased 39 basis points, to 6.16%, and the average yield on available-for-sale securities increased 146 basis points, to 3.31%. The average balance of loans decreased $15.6 million, and the average balance of available-for-sale securities declined $33.7 million, compared to the six months ended June 30, 2024.
Current wording
Interest Income. Interest income increased $1.8 million, or 11.0%, to $17.8 million for the three months ended September 30, 2025, compared to $16.0 million for the same quarter in 2024. The increase was primarily due to higher yields on loans and securities, as well as an increase in the average balance of cash and cash equivalents. The average yield on interest-earning assets increased by 42 basis points to 5.80%, while the average balance of interest-earning assets increased by $30.8 million, or 2.6%, to $1.21 billion. The average yield on loans increased 43 basis points, to 6.38%, and the average yield on available for sale securities increased 93 basis points, to 2.97%. The increase in the average balance of interest earning assets was primarily due to an increase in the average balance of interest bearing depository accounts and federal funds sold, which increased $63.1 million, or 235.5%, and was partially offset by a decrease of $29.7 million in the average balance of available-for-sale securities, when comparing the three months ended September 30, 2025 with the comparable period in 2024. Interest income was also positively impacted by a $394,000 recovery on non-accrual commercial real estate.
Previous wording
Interest Income. Interest income increased $1.1 million, or 6.8%, to $16.8 million for the three months ended June 30, 2025, compared to $15.7 million for the same quarter in 2024. The increase was primarily due to higher yields on loans and securities, partially offset by a decrease in the average balance of interest-earning assets. The average yield on interest-earning assets increased by 50 basis points to 5.78%, while the average balance of interest-earning assets declined by $33.3 million, or 2.8%, to $1.16 billion. The average yield on loans increased 33 basis points, to 6.18%, and the average yield on available for sale securities increased 150 basis points, to 3.37%. The average balance of loans decreased $13.6 million, and the average balance of available-for-sale securities declined $33.6 million, compared to the three months ended June 30, 2024.
Current wording
Interest income increased $3.9 million, or 8.3%, to $51.2 million for the nine months ended September 30, 2025, compared to $47.2 million for the same period in 2024. The increase was primarily due to higher yields on loans and securities, partially offset by a decrease in the average balance of interest-earning assets. The average yield on interest-earning assets increased by 52 basis points to 5.77%, while the average balance of interest-earning assets declined by $14.7 million, or 1.2%, to $1.19 billion. The average yield on loans increased 40 basis points, to 6.23%, and the average yield on available-for-sale securities increased 129 basis points, to 3.20%. The average balance of loans decreased $10.8 million, and the average balance of available-for-sale securities declined $32.3 million, which were partially offset by an increase in the average balance of interest bearing depository accounts of $30.5 million when compared to the nine months ended September 30, 2024. Interest income was also positively impacted by a $394,000 recovery on non-accrual commercial real estate.
Previous wording
Interest Expense. Interest expense decreased $1.4 million, or 20.7%, to $5.3 million for the three months ended June 30, 2025, compared to $6.6 million for the same quarter in 2024. The average cost of interest-bearing liabilities declined by 50 basis points, to 2.45%, reflecting lower funding costs and a favorable shift in funding mix. The average balance of total interest-bearing liabilities decreased $45.7 million, or 5.1%, to $859.9 million, primarily due to a $61.6 million decline in the average balance of Federal Home Loan Bank advances, which fell from $95.3 million to $33.7 million. The average cost of these advances also declined by 103 basis points, from 4.73% to 3.70%.
Current wording
Interest Expense. Interest expense decreased $617,000, or 9.7%, to $5.7 million for the three months ended September 30, 2025, compared to $6.3 million for the same quarter in 2024. The average cost of interest-bearing liabilities declined by 35 basis points, to 2.53%, reflecting lower funding costs and a favorable shift in the funding mix with an increase in deposits and a decrease in borrowings. The average balance of total interest-bearing liabilities increased $22.0 million, or 2.5%, to $898.9 million, primarily due to a $58.7 million increase in the average balance of deposits partially offset by a $38.9 million decline in the average balance of Federal Home Loan Bank advances, which fell from $63.5 million to $26.6 million. The average cost of these advances also declined by 128 basis points, from 4.19% to 2.91% for the third quarter of 2024 and 2025, respectively.
Previous wording
Interest expense decreased $2.5 million, or 18.8%, to $10.9 million for the six months ended June 30, 2025, compared to $13.4 million for the same period in 2024. The average cost of interest-bearing liabilities declined by 41 basis points, to 2.52%, reflecting lower funding costs and a favorable shift in funding mix. The average balance of total interest-bearing liabilities decreased $46.0 million, or 5.0%, to $870.9 million, primarily due to a $54.9 million decline in the average balance of Federal Home Loan Bank advances, which fell from $109.1 million to $54.2 million. The average cost of these advances also declined by 89 basis points, from 4.84% to 3.95%.
Current wording
Interest expense decreased $3.1 million, or 15.9%, to $16.6 million for the nine months ended September 30, 2025, compared to $19.7 million for the same period in 2024. The average cost of interest-bearing liabilities declined by 40 basis points, to 2.52%, reflecting lower funding costs, a favorable shift in the funding mix and a decrease in borrowings. The average balance of total interest-bearing liabilities decreased $23.2 million, or 2.6%, to $880.4 million, primarily due to a $48.9 million decline in the average balance of Federal Home Loan Bank advances, which fell from $93.8 million to $44.9 million. The average cost of these advances also declined by 94 basis points, from 4.69% to 3.75%. The decrease was partially offset by a $26.5 million increase in the average balance of deposits.
Previous wording
Provision for Credit Losses. 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 second quarter 2024 charge-offs on commercial real estate property of $291,000.
Current wording
Provision for Credit Losses. The provision for credit losses increased by $15,000, or 1.7%, from $889,000 for the quarter ended September 30, 2024 to $904,000 for the current quarter. The increase in the provision was primarily due to higher loan balances and an increase in net charge-offs. Net charge-offs increased by $619,000, from $344,000 for the third quarter of 2024 to $963,000 for the third quarter of 2025. The increase was primarily due to a charge-off on commercial real estate property of $629,000 in the third quarter of 2025.
Previous wording
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-offs 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.
Current wording
Year-to-date, the provision for credit losses decreased by $263,000, or 18.5%, from $1.4 million for the nine months ended September 30, 2024 to $1.2 million for the nine months ended September 30, 2025. The decrease in the provision was primarily due to the change in the composition of the loan portfolio as indirect automobile loans decreased, while commercial and commercial real-estate loans increased, offset by an increase in net charge-offs. Net charge-offs increased $137,000, or 9.6%, to $1.6 million for the first nine months of 2025 as compared to $1.4 million for the first nine months of 2024. The increase was primarily due to increased net charge-offs on commercial and commercial real-estate loans, partially offset by decreased net charge-offs on indirect automobile loans and other consumer loans. The percentage of overdue account balances to total loans decreased to 1.31% at September 30, 2025 from 1.71% at December 31, 2024, while non-performing assets decreased $389,000, or 9.4%, to $3.7 million at September 30, 2025.
Previous wording
Non-Interest Expense. 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.
Current wording
Non-Interest Expense. For the third quarter of 2025, non-interest expense rose to $9.7 million, reflecting a $646,000, or 7.1%, increase compared to the same period in 2024. The increase was primarily due to an increase in salaries and employee benefits, which rose $427,000, or 8.5%, primarily due to increased incentive compensation and production commissions. Other non-interest expense grew by $158,000, or 10.2%, driven primarily by higher retail banking costs. Occupancy expense increased by $47,000, or 4.5%, due to higher branch repair costs. Marketing expense rose by $22,000, or 17.1%, largely due to promotional initiatives associated with the launch of higher-yielding deposit products.
Previous wording
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. 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. Additionally, FDIC deposit insurance and other insurance rose $78,000, or 15.2%, and occupancy expense increased $71,000, or 3.4%, due to facilities-related costs. Data processing expense also increased by $43,000, or 4.2%.
Current wording
For the nine months ended September 30, 2025, non-interest expense totaled $28.9 million, an increase of $2.0 million, or 7.6%, compared to $26.9 million for the same period in 2024. The increase was primarily attributable to higher compensation and operating costs across multiple categories. Salaries and employee benefits increased by $899,000, or 6.0%, primarily due to higher incentive-based compensation, production commissions and annual merit increases aimed at retaining and attracting talent. Other non-interest expense rose by $605,000, or 12.9%, largely due to increased retail banking and administrative costs. Marketing expense increased by $209,000, or 57.3%, as a result of promotional campaigns related to new deposit products. Occupancy expense increased by $118,000, or 3.7%, due to higher facilities-related costs. Professional fees increased by $88,000, or 6.4%, reflecting greater use of legal services. FDIC deposit insurance and other insurance increased by $63,000, or 7.8%, and data processing expense rose by $62,000, or 4.1%.
Previous wording
Income Taxes. The provision for income taxes increased $480,000, or 170.2%, totaling $762,000 for the three months ended June 30, 2025, compared to $282,000 for the same period in 2024. The increased income tax provision corresponds to higher pre-tax income during the quarter. The effective tax rate was 21.85% for the three months ended June 30, 2025 as compared to 22.43% for the three months ended June 30, 2024.
Current wording
Income Taxes. The provision for income taxes increased $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. The increased income tax provision corresponds to pre-tax income during the quarter compared to a loss in the third quarter of 2024. The effective tax rate was 19.38% for the three months ended September 30, 2025 as compared to 21.72% for the three months ended September 30, 2024.
Previous wording
The provision for income taxes increased $798,000, or 132.3%, totaling $1.4 million for the six months ended June 30, 2025, compared to $603,000 for the same period in 2024. The increased income tax provision corresponds to higher pre-tax income during the period. The effective tax rate was 21.84% for the six months ended June 30, 2025 as compared to 22.34% for the six months ended June 30, 2024.
Current wording
The provision for income taxes increased $3.7 million to $2.0 million for the nine months ended September 30, 2025, compared to a benefit of $1.6 million for the same period in 2024. The increased income tax provision corresponds to higher pre-tax income during the period compared to a loss for the same nine months in 2024. The effective tax rate was 21.00% for the nine months ended September 30, 2025 as compared to 21.5% for the nine months ended September 30, 2024.
Previous wording
Average Balance Sheets for the Three and Six Months Ended June 30, 2025 and 2024
Current wording
Average Balance Sheets for the Three and Nine Months Ended September 30, 2025 and 2024
Previous wording
As reflected in the Consolidated Statements of Cash Flows, net cash provided by operating activities was $6.7 million for the six months ended June 30, 2025, compared to $8.5 million for the same period in 2024. These amounts differ from our net income because of a variety of cash receipts and disbursements that did not affect net income for the respective periods. Net cash provided by investing activities totaled $35.3 million in the first half of 2025, a decrease from $47.9 million in the prior-year period, driven primarily by a decrease in net loans of $11.7 million in the first six months of 2025 versus a net reduction in loans of $25.3 million in the comparable 2024 period as well as $24.6 million of securities proceeds in the first half of 2025 compared to $17.8 million in the first half of 2024. Cash flows from financing activities reflected a net cash inflow of $10.1 million in the current period, compared to a net cash outflow of $44.1 million in the prior-year period, with the reduced outflows mainly resulting from changes in deposit balances and short-term debt repayments. As a result of these activities, cash and cash equivalents increased by $52.1 million during the period to $89.6 million as of June 30, 2025, from a beginning balance of $37.5 million.
Current wording
As reflected in the Consolidated Statements of Cash Flows, 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. These amounts differ from our net income because of a variety of cash receipts and disbursements that did not affect net income for the respective periods. 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, driven primarily by proceeds from the sale of securities of $58.6 million in the 2024 period due to the balance sheet restructuring and an increase in net loans of $6.4 million in the first nine months of 2025 versus a net reduction in loans of $42.1 million in the comparable 2024 period and $23.2 million of securities purchased in the first nine months of 2025 compared to $56.7 million in the first nine months of 2024. Cash flows from financing activities reflected a net cash inflow of $46.3 million in the current period, compared to a net cash outflow of $58.3 million in the prior-year period, mainly resulting from changes in deposit balances and debt repayments. As a result of these activities, 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.
Previous wording
The Bank has access to a preapproved secured line of credit with the FHLB. At June 30, 2025, the Bank had pledged $466.8 million of assets to the FHLB, which resulted in a secured line of credit of $319.5 million. At June 30, 2025, the Bank had borrowed $26.6 million under this line, with remaining secured borrowing capacity of $292.9 million.
Current wording
The Bank has access to a preapproved secured line of credit with the FHLB. At September 30, 2025, the Bank had pledged $507.6 million of assets to the FHLB, which resulted in a secured line of credit of $353.4 million. At September 30, 2025, the Bank had borrowed $26.6 million under this line, with remaining secured borrowing capacity of $326.7 million.