Rhinebeck Bancorp, Inc.
For the period ended Dec 31, 2025. Filed Mar 13, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 13, 2026
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-K
Period ended 2024-12-31; filed 2025-03-25.
0001751783-25-000012
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-13.
0001751783-26-000005
Item 7. 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 81 previous paragraphs and 75 current paragraphs.
31 unchanged; 33 reworded; 11 added; 16 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 31 previous and 33 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 (11)
Current report
In October 2025, Matthew J. Smith was appointed President and Chief Executive Officer of Rhinebeck Bank and its holding companies, Rhinebeck Bancorp and Rhinebeck Bancorp, MHC, to lead Rhinebeck Bank into its next phase of growth and innovation. Mr. Smith’s executive leadership experience includes overseeing community bank operations, spearheading the implementation of digital banking and banking-as-a-service programs and integrating acquired financial institutions. As we realign our strategies for growth, we intend to continue to operate as a well-capitalized and profitable community bank dedicated to providing exceptional personal service to our individual and business customers. We believe that we have a competitive advantage in the markets we serve because of our knowledge of the local marketplace and our long-standing history of providing superior, relationship-based customer service.
Current report
Our current business strategy includes the following key components, which are designed to improve earnings by expanding our net interest margin, increasing non-interest income and improving efficiency:
Current report
Increasing our commercial real estate loans and commercial business loans involves risk, as described in “Risk Factors—Risks Related to Our Lending Activities—Our emphasis on commercial real estate and commercial business lending involves risks that could adversely affect our financial condition and results of operations” and “—Our non-owner occupied commercial real estate loans may expose us to increased credit risk.”
Current report
We are also developing a full suite of treasury management services for business customers to encourage commercial borrowers to maintain deposit accounts with us and to generate recurring fee income. We view treasury management as a core strategic capability that will support both deposit growth and non-interest income diversification. We may also enter into strategic partnerships, including banking-as-a-service partnerships, to facilitate new account openings and provide a low-cost method to attract and retain core deposits.
Current report
manual workflows, and selective use of advanced analytics to support operational efficiency and decision-making, including potential applications of artificial intelligence products. Management will monitor efficiency metrics relative to our peer institutions and aims to adjust our resource allocation to maintain competitiveness while preserving service quality.
Current report
Critical Accounting Estimates
Current report
Investment Securities Available for Sale.* *Investment securities available for sale increased $2.3 million, or 1.4%, to $162.2 million at December 31, 2025 from $159.9 million at December 31, 2024. The increase was due to $49.0 million in purchases and a $5.3 million reduction in unrealized losses, partially offset by $52.2 million in paydowns, calls, and maturities. The $5.3 million reduction in unrealized losses was primarily due to the balance sheet restructuring in 2024 in which we sold lower-yielding securities and reinvested the proceeds in higher-yielding securities with a shorter duration.
Current report
Deferred Tax Assets. Deferred tax assets decreased $3.2 million, or 39.1%, to $4.9 million at December 31, 2025, primarily due to a decrease in the unrealized loss on available for sale securities resulting from the balance sheet restructuring in 2024. The unrealized loss on available for sale securities, net of taxes, was $6.3 million at December 31, 2025 as compared to $10.5 million at December 31, 2024.
Current report
Non-Interest Income. Non-interest income totaled $7.0 million for the year ended December 31, 2025, compared to a net loss of $9.0 million for 2024, representing an increase of $16.0 million. The net loss in 2024 was primarily attributable to a $16.0 million loss on the sale of investment securities in connection with our 2024 balance sheet restructuring. Excluding this loss, non-interest income would have decreased by $86,000, from $7.1 million for the year ended December 31, 2024, to $7.0 million for the year ended December 31, 2025. The decrease in non-interest income reflected a $413,000 decrease in income related to life insurance proceeds recognized during the fourth quarter of 2024, a $22,000 decrease in investment advisory income and an $18,000 decrease on service charges on deposit accounts. These decreases were largely offset by a $223,000, or 18.4%, increase in other non-interest income, primarily due to higher swap income, and a $92,000 increase in gain on the sales of loans.
Current report
Non-Interest Expense. For the year ended December 31, 2025, non-interest expense totaled $39.0 million, representing an increase of $2.2 million, or 5.9%, compared to $36.8 million in 2024. The increase was driven primarily by higher compensation and operating costs across several categories. Salaries and employee benefits rose $1.2 million, or 6.1%, largely reflecting higher incentive-based compensation, production commissions, and annual merit increases implemented to attract and retain talent. Other non-interest expense increased $629,000, or 9.7%, primarily due to higher retail banking and administrative costs. Marketing expense increased $271,000, or 46.1%, data processing expense rose $145,000, or 7.1%, and occupancy expense increased $91,000, or 2.1%, reflecting higher facilities-related costs. These increases were partially offset by decreases in professional fees of $123,000, or 6.4%, and FDIC deposit insurance and other insurance costs of $63,000, or 5.7%.
Current report
The Bank has access to a preapproved secured line of credit with the FHLB. At December 31, 2025, the Bank had pledged $514.8 million of assets to the FHLB, which resulted in a secured line of credit of $362.3 million. At December 31, 2025, the Bank had borrowed $25.2 million under this line, with remaining secured borrowing capacity of $337.2 million.
Removed paragraphs (16)
Previous report
Based on an extensive review of the current opportunities in our primary market area as well as our resources and capabilities, we are pursuing the following business strategies:
Previous report
Goodwill and Intangible Assets
Previous report
The assets (including identifiable intangible assets) and liabilities acquired in a business combination are recorded at fair value at the date of acquisition. Goodwill is recognized as the excess of the acquisition cost over the fair values of the net assets acquired and is not subsequently amortized. Identifiable intangible assets include customer lists and core deposit intangibles and are being amortized on a straight-line basis over their estimated lives. Goodwill is not amortized, but it is tested at least annually, or more frequently if indicators of impairment are present.
Previous report
Management evaluated goodwill as of October 1, 2024, utilizing various methods including an income approach that incorporated a discounted cash flow model that involved management assumptions based upon future growth and earnings projections. A weighted average of the various methods was calculated to determine the estimated fair value of the reporting unit. The estimated fair value of the reporting unit was then compared to the current carrying value to determine if impairment had occurred. It is our opinion that, as of the measurement date, the aggregate fair value of the reporting unit exceeded the carrying value of the reporting unit. Therefore, management concluded that goodwill was not impaired. Although we believe our assumptions are reasonable, actual results may vary significantly. If for any future period it is determined that there has been impairment in the carrying value of our goodwill balances, the Company will record a charge to earnings, which could have a material adverse effect on net income, but not risk-based capital ratios.
Previous report
Income Taxes
Previous report
We are subject to the income tax laws of the United States, New York State, and the municipalities in which we operate. These tax laws are complex and subject to different interpretations by the taxpayer and the relevant government taxing authorities. We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. See Note 8 to the Consolidated Financial Statements for a further description of our provision and related income tax assets and liabilities.
Previous report
In establishing a provision for income tax expense, we must make judgments and interpretations about the application of these inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income. Disputes over interpretations of the tax laws may be subject to review/adjudication by the court systems of the various tax jurisdictions or may be settled with the taxing authority upon examination or audit.
Previous report
If current available information raises doubt as to the realization of the deferred tax assets, a valuation allowance is established. We consider the determination of this valuation allowance to be a critical accounting policy because of the need to exercise significant judgment in evaluating the amount and timing of recognition of deferred tax liabilities and assets, including projections of future taxable income. These judgments and estimates are reviewed on a continual basis as regulatory and business factors change.
Previous report
A valuation allowance for deferred tax assets may be required if the amount of taxes recoverable through loss carryback declines, or if we project lower levels of future taxable income. Such a valuation allowance would be established through a charge to income tax expense, which would adversely affect our operating results.
Previous report
Although management believes that the judgments and estimates used are reasonable, actual results could differ and we may be exposed to losses or gains that could be material. An unfavorable tax settlement would result in an increase in our effective income tax rate in the period of resolution. A favorable tax settlement would result in a reduction in our effective income tax rate in the period of resolution.
Previous report
Investment Securities Available for Sale.* *Investment securities available for sale decreased $32.0 million, or 16.7%, to $159.9 million at December 31, 2024 from $192.0 million at December 31, 2023. The decrease was due to $75.0 million of sales and $32.1 million of paydowns and maturities, partially offset by purchases of $71.4 million and an unrealized holding gain of $3.7 million. The change in the securities portfolio reflected a balance sheet restructuring in which the Company sold lower-yielding securities and reinvested the proceeds in higher-yielding securities with a shorter duration. In September 2024, the Bank sold $58.6 million of available-for-sale securities. The proceeds from these sales were reinvested into new securities offering yields that were 3.11% higher than those of the securities sold. In December 2024, the Bank sold an additional $16.4 million of available-for-sale securities. The proceeds from these sales were reinvested into new securities offering yields that were 3.06% higher than those of the securities sold. The Company recognized a one-time pre-tax loss of $16.0 million as a result of these transactions.
Previous report
Premises and Equipment. Premises and equipment decreased $3.5 million, or 19.7%, as our former Beacon, New York branch office was closed, and the property sold during the first quarter of 2024 for $2.9 million.
Previous report
Non-Interest Income. Non-interest loss totaled $9.5 million for the year ended December 31, 2024, a decrease of $15.3 million, from non-interest income of $5.8 million in 2023, due primarily to the $16.0 million loss on sale of investment securities resulting from the previously mentioned balance sheet restructuring. The Company recorded an increase of $368,000, or 31.6%, in investment advisory income resulting from the improved market and economic conditions, an increase of $192,000 related to gains on life insurance, an increase of $122,000, or 4.2%, in service charges on deposit accounts, an increase of $86,000, or 12.9%, in the cash surrender value of life insurance, and an increase in the gain on sales of loans of $42,000, partially offset by a decrease of $64,000 on the disposal of premises and equipment.
Previous report
Non-Interest Expense. Non-interest expense totaled $36.8 million for the year ended December 31, 2024, an increase of $419,000, or 1.2%, over 2023. The increase was primarily due to a $913,000 increase in salaries and benefits primarily due to higher production commissions and higher medical insurance costs, an increase of $33,000 in marketing expense and a $26,000 increase in data processing costs. These increases were partially offset by the $375,000 write-down of the Beacon, New York branch in the fourth quarter of 2023, which was sold in the first quarter of 2024. FDIC deposit insurance and other insurance decreased $127,000, or 10.3%, primarily due to a decreased assessment rate while other non-interest expense decreased $61,000 primarily due to decreased lending expenses.
Previous report
In 2024, net interest income increased by $266,000 driven by a $932,000 gain from improved rates, despite a $666,000 loss from declining volumes. Interest income rose by $3.1 million, with rate increases in loans receivable and securities offsetting volume losses. Interest expenses increased by $2.8 million due to higher deposit rates, despite volume declines in deposits and Federal Home Loan Bank advances. Rate improvements were the primary driver of the overall positive impact, outweighing the negative effects of reduced volumes. The net interest rate spread increased 5 basis points to 2.49% for the year ended December 31, 2024 as compared to 2.44% for the year ended December 31, 2023. Net interest margin increased 15 basis points to 3.21% for 2024 from 3.06% for 2023.
Previous report
The Bank has access to a preapproved secured line of credit with the FHLB not to exceed $627.3 million at December 31, 2024. Additional funds available under this line are not included in the table above as we do not consider it to be as readily accessible as the funds above.
Reworded paragraphs (33)
Previous wording
Provision for Credit Losses. The allowance for credit losses is a valuation allowance for the estimated lifetime credit losses. The allowance for credit losses is increased through charges to the provision for credit losses. Loans are charged against the allowance when management believes that the collectability of the principal loan amount is not probable. Recoveries on loans previously charged-off, if any, are credited to the allowance for credit losses when realized.
Current wording
Provision for Credit Losses on loans. The allowance for credit losses is a valuation allowance for the estimated lifetime credit losses. The allowance for credit losses is increased through charges to the provision for credit losses. Loans are charged against the allowance when management believes that the collectability of the principal loan amount is not probable. Recoveries on loans previously charged-off, if any, are credited to the allowance for credit losses when realized.
Previous wording
The following accounting policies materially affect our reported earnings and financial condition and require significant judgments and estimates.
Current wording
The following accounting policy materially affects our reported earnings and financial condition and requires significant judgments and estimates.
Previous wording
The Company’s allowance for credit losses for loans totaled $8.5 million and $8.1 million as of December 31, 2024 and December 31, 2023, respectively. The $415,000 increase in our allowance for credit losses for loans was primarily driven by an increase in our collectively evaluated loans, partially offset by a decrease in the allowance for credit losses on individually analyzed loans.
Current wording
Our allowance for credit losses for loans totaled $8.4 million and $8.5 million as of December 31, 2025 and December 31, 2024, respectively. The $186,000 decrease in our allowance for credit losses for loans was primarily driven by a decrease in our collectively evaluated loans, partially offset by an increase in the allowance for credit losses on individually analyzed loans.
Previous wording
The quantitative component of our allowance for credit losses on collectively evaluated loans, which is largely based on a selection of various economic forecasts, decreased by $151,000 as of December 31, 2024, when compared to December 31, 2023. The decrease was primarily attributable to decreased loan balances of indirect automobile loans and an update to the Loss Driver Analysis that had a favorable impact on the Multifamily Real Estate Loan probability of default (“PD”) and loss given default (“LGD”) factors in the CECL model.
Current wording
The quantitative component of our allowance for credit losses on collectively evaluated loans, which is largely based on a selection of various economic forecasts, decreased by $181,000 as of December 31, 2025, when compared to December 31, 2024. The decrease was primarily attributable to decreased loan balances of indirect automobile loans, partially offset by an update to our loss driver analysis that had an unfavorable impact on the commercial real estate loan probability of default (“PD”) and loss given default (“LGD”) factors in the CECL model.
Previous wording
The qualitative component of our allowance for credit losses (“ACL”), which is largely based on management’s judgment of qualitative loss factors, was relatively unchanged during the first half of 2024, but was adjusted in the second half to account for increased delinquency and higher net charge-offs. The Company’s automobile loan portfolio
Current wording
The qualitative component of our allowance for credit losses (“ACL”), which is largely based on management’s judgment of qualitative loss factors, decreased during 2025 to account for decreased delinquency and lower net charge-
Previous wording
has continued to experience elevated delinquency rates, and this combined with a simultaneous decrease in collateral values, has resulted in increases to forecasted net charge-offs. Moderate qualitative adjustments were made to account for both of these risks. The Company also retained moderated qualitative adjustments related to economic conditions as inflationary pressures and higher interest rates continue to have an adverse effect on both consumers and businesses.
Current wording
offs. A more conservative underwriting approach on our automobile loan portfolio has decreased delinquency rates, and this combined with a simultaneous increase in collateral values, has resulted in decreases to forecasted net charge-offs. Moderate qualitative adjustments were made to account for both of these risks. We also retained moderated qualitative adjustments related to economic conditions as inflationary pressures and higher interest rates continue to have an adverse effect on both consumers and businesses.
Previous wording
The Company’s allowance for credit losses for collectively evaluated loans totaled $8.4 million as of December 31, 2024, which included nearly $4.0 million of allowance related to indirect automobile loans. In comparison, the Company’s allowance related to indirect automobile loans totaled nearly $4.2 million as of December 31, 2023, a reduction of nearly $200,000 from January 1, 2024. The allowance amount attributed to qualitative adjustments at year end for indirect automobile loans was $1.7 million, an increase of approximately $400,000 from January 1, 2024. As previously mentioned, actual as well as forecasted increases in delinquencies and net charge-offs for automobile loans drove management’s increase in qualitative loss factors.
Current wording
Our allowance for credit losses for collectively evaluated loans totaled $7.9 million as of December 31, 2025, which included $2.8 million of allowance related to indirect automobile loans. In comparison, our allowance related to indirect automobile loans totaled nearly $4.0 million as of December 31, 2024, a reduction of nearly $1.2 million. The allowance amount attributed to qualitative adjustments at year end for indirect automobile loans was $1.3 million, a decrease of approximately $410,000 from December 31, 2024. As previously mentioned, actual as well as forecasted decreases in delinquencies and net charge-offs for automobile loans drove management’s decrease in qualitative loss factors.
Previous wording
Our allowance for credit losses for individually analyzed loans is determined using the fair value of the collateral, less estimated selling costs, as applicable. As of December 31, 2024, the Company’s allowance for credit losses on individually analyzed loans decreased $56,000 from December 31, 2023. This decrease was primarily due to a decrease of individually analyzed indirect automobile loans, with additional decreases in commercial and commercial real estate loans also contributing to the overall decrease.
Current wording
Our allowance for credit losses for individually analyzed loans is determined using the fair value of the collateral, less estimated selling costs, as applicable. As of December 31, 2025, our allowance for credit losses on individually analyzed loans increased $262,000 from December 31, 2024. This increase was primarily due to an increase of individually analyzed commercial and indirect automobile loans.
Previous wording
As noted above, we consider a number of variables in our evaluation of the adequacy of the allowance for credit losses. The most significant variables are portfolio growth and any changing historical loss trends within the specific business segments. As of December 31, 2024, the $264,000 decrease in our allowance for credit losses reflected the reduction in indirect automobile loan originations. Based on our model, if all segments of the portfolio grew by an additional 5% on a year-over-year basis, our allowance for credit losses as of December 31, 2024 would have increased by $418,000 to $9.0 million, holding all other variables constant. Conversely, if all segment balances of our loan portfolio had fallen by 5% during the year ended December 31, 2024, our allowance for credit losses would have decreased by $418,000 to $8.1 million, holding all other variables constant.
Current wording
As noted above, we consider a number of variables in our evaluation of the adequacy of the allowance for credit losses. The most significant variables are portfolio growth and any changing historical loss trends within the specific business segments. As of December 31, 2025, $191,000 of the decrease in our allowance for credit losses reflected the reduction in indirect automobile loan originations. Based on our model, if all segments of the portfolio grew by an additional 5% on a year-over-year basis, our allowance for credit losses as of December 31, 2025 would have increased by $395,000 to $8.7 million, holding all other variables constant. Conversely, if all segment balances of our loan portfolio had fallen by 5% during the year ended December 31, 2025, our allowance for credit losses would have decreased by $395,000 to $8.0 million, holding all other variables constant.
Previous wording
Total Assets.* *Total assets were $1.26 billion at December 31, 2024, representing a decrease of $57.4 million, or 4.4%, compared to $1.31 billion at December 31, 2023. The decrease was primarily due to decreases in: (i) net loans receivable of $37.1 million, or 3.7%, (ii) available for sale securities of $32.0 million, or 16.7%, (iii) premises and equipment of $3.5 million, or 19.7%, (iv) Federal Home Loan Bank stock of $2.5 million, or 39.2%, and (v) deferred tax assets of $1.8 million, or 18.3%. The decrease in total assets was partially offset by an increase in cash and cash equivalents of $15.4 million, or 69.4%, and an increase in other assets of $4.3 million, or 22.4%
Current wording
Total Assets.* *Total assets were $1.30 billion at December 31, 2025, representing an increase of $46.0 million, or 3.7%, compared to $1.26 billion at December 31, 2024. The increase was primarily due to increases in: cash and cash equivalents of $64.5 million, or 172.1%, available for sale securities of $2.3 million, or 1.4%, and other assets of $2.1 million, or 9.0%. The increase in total assets was partially offset by decreases in net loans of $18.4 million, or 1.9%, deferred tax assets of $3.2 million, or 39.1%, and FHLB stock of $2.0 million, or 50.6%.
Previous wording
Cash and Cash Equivalents.* *Cash and cash equivalents grew by $15.4 million, or 69.4%, to $37.5 million as of December 31, 2024, compared to $22.1 million at December 31, 2023. This increase was mainly driven by higher deposits at the Federal Reserve Bank of New York and the Federal Home Loan Bank of New York, as cash was generated from proceeds from maturing loans and securities sales.
Current wording
Cash and Cash Equivalents.* *Cash and cash equivalents increased by $64.5 million, or 172.1%, to $102.0 million as of December 31, 2025, compared to $37.5 million as of December 31, 2024. This increase was primarily driven by increases in interest-earning deposits and cash inflows from loan maturities during the year, offset by a decrease in Federal Home Loan Bank advances.
Previous wording
Net Loans.* *Net loans receivable were $971.8 million at December 31, 2024, a decrease of $37.1 million, or 3.7%, as compared to $1.01 billion at December 31, 2023. The decrease was primarily due to a decrease in indirect automobile loans of $98.6 million, or 25.0%, reflecting a strategic decision to decrease that loan portfolio as a percentage of the balance sheet. At December 31, 2024, indirect automobile loans were 23.5% of assets, compared to 30.0% at December 31, 2023. Partially offsetting the decrease in automobile loans were increases in commercial real estate loans of $54.5 million, or 12.7%, and residential real estate loans of $9.4 million, or 12.2%. The increase in commercial real estate loans was primarily due to the closing of three large loans secured by a retail shopping center and two hotels totaling $26.9 million. The increase in residential real estate loans reflected the strategic decision to hold new production in our portfolio instead of selling these loans.
Current wording
Net Loans.* *Net loans receivable were $953.4 million at December 31, 2025, a decrease of $18.4 million, or 1.9%, as compared to $971.8 million at December 31, 2024. The decrease was primarily due to a decrease in indirect automobile loans of $81.9 million, or 27.7%, reflecting a strategic decision to decrease that loan portfolio as a percentage of the balance sheet. At December 31, 2025, indirect automobile loans were 16.4% of assets, compared to 23.5% at December 31, 2024. Partially offsetting the decrease in automobile loans were increases in commercial real estate loans of $52.1 million, or 10.8%, and residential real estate loans of $13.4 million, or 15.5%. The increase in commercial real estate loans was primarily due to four loans totaling $43.3 million secured by a 2-4 family unit, a retail shopping center, a medical building and an auto dealership. The increase in residential real estate loans reflected the strategic decision to hold new production in our portfolio instead of selling these loans.
Previous wording
Allowance for Credit Losses. During the year, the allowance for credit losses increased $415,000, or 5.1%, reflecting an increase of expected losses in our loan portfolio. Non-accrual loans decreased $47,000, or 1.1%, to $4.1 million at December 31, 2024 from $4.2 million at December 31, 2023. Non-performing assets decreased $72,000, or 1.7%. Non-performing assets included $25,000 in other real estate owned as of December 31, 2023. The Company had no other real estate owned as of December 31, 2024. Past due loans decreased $2.5 million, or 12.8%, between December 31, 2023 and December 31, 2024, finishing at $16.7 million, or 1.7%, of total loans, down from $19.2 million, or 1.9%, of total loans at year-end 2023. The decrease was most notable in non-residential commercial real-estate, as a few large loans were brought current and one loan was paid off. Our allowance for credit losses was 0.88% of total loans and 206.56% of non-performing loans at December 31, 2024 as compared to 0.81% of total loans and 194.31% of non-performing loans at December 31, 2023.
Current wording
Allowance for Credit Losses. During the year, the allowance for credit losses decreased $186,000, or 2.2%, reflecting a decrease of expected losses in our loan portfolio due to the decrease in loans, particularly automobile loans that carry a higher general reserve, partially offset by an increase in the allowance for credit losses on individually analyzed loans primarily due to the increase in commercial and industrial loans. Non-accrual loans decreased $434,000, or 10.5%, to $3.7 million at December 31, 2025 from $4.1 million at December 31, 2024. We had no other real estate owned as of December 31, 2025 or 2024. Past due loans decreased $2.2 million, or 13.0%, between December 31, 2024 and December 31, 2025, finishing at $14.5 million, or 1.52%, of total loans, down from $16.7 million, or 1.71%, of total loans at year-end 2024. The decrease was most notable in indirect automobile loans, reflecting the positive impact of more conservative underwriting standards. Our allowance for credit losses was 0.87% of total loans and 225.76% of non-performing loans at December 31, 2025 as compared to 0.88% of total loans and 206.56% of non-performing loans at December 31, 2024.
Previous wording
Federal Home Loan Bank Stock. FHLB stock decreased $2.6 million, or 39.2%, to $4.0 million at December 31, 2024, from $6.5 million at December 31, 2023, primarily due to a reduction in additional shares required to support borrowing activity as advances from the FHLB decreased.
Current wording
Federal Home Loan Bank Stock. FHLB stock decreased $2.0 million, or 50.6%, to $2.0 million at December 31, 2025, from $4.0 million at December 31, 2024, primarily due to a reduction in the shares required to support borrowing activity as advances from the FHLB decreased.
Previous wording
Total Liabilities.* *Total liabilities decreased $65.6 million, or 5.5%, to $1.13 billion at December 31, 2024 from $1.20 billion at December 31, 2023 primarily due to a decrease in advances from the FHLB of $58.3 million, or 45.5% and a decrease in deposits of $9.7 million, or 0.9%, partially offset by an increase in accrued expenses and other liabilities of $2.3 million, or 8.6%.
Current wording
Total Liabilities.* *Total liabilities increased $31.0 million, or 2.7%, to $1.16 billion at December 31, 2025 from $1.13 billion at December 31, 2024 primarily due to an increase in deposits of $76.6 million, partially offset by a decrease in advances from the FHLB of $44.6 million, or 64.0%.
Previous wording
Deposits.* *Deposits decreased $9.7 million, or 0.9%, to $1.02 billion at December 31, 2024 from $1.03 billion at December 31, 2023. Interest bearing accounts increased $1.9 million, or 0.2%, to $782.7 million while non-interest bearing balances decreased $11.7 million, or 4.7%, finishing the year at $238.1 million. The increase in interest bearing accounts represented an increase in time deposits of $19.6 million, or 6.2%, which was offset by a decrease transaction accounts including NOW, savings and money market accounts of $17.6 million, or 3.8%. The continued growth in time deposits was primarily due to depositors seeking higher interest rates, which contributed to the decrease in non-interest bearing and lower interest-bearing deposits.
Current wording
Deposits.* *Deposits increased $76.6 million, or 7.5%, to $1.10 billion at December 31, 2025 from $1.02 billion at December 31, 2024. Interest bearing accounts increased $87.4 million, or 11.2%, to $870.1 million while non-interest bearing balances decreased $10.9 million, or 4.6%, finishing the year at $227.3 million. The increase in interest bearing accounts represented an increase in money market deposits of $53.4 million, or 28.3%, and time deposits of $39.3 million, or 11.6%, which was offset by a decrease in savings accounts of $5.4 million, or 4.1%. The growth in money market accounts and time deposits were primarily due to depositors seeking higher interest rates, which contributed to the decrease in non-interest bearing and lower interest-bearing deposits.
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 $25.4 million and $13.5 million, respectively, at December 31, 2024. At December 31, 2023, we had reciprocal deposits obtained through CDARS and ICS networks of $23.4 million and $16.7 million, respectively. We had no brokered deposits at December 31, 2024 and 2023.
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 $21.9 million and $13.8 million, respectively, at December 31, 2025. At December 31, 2024, we had reciprocal deposits obtained through CDARS and ICS networks of $25.4 million and $13.5 million, respectively. We had no brokered deposits at December 31, 2025 and 2024.
Previous wording
Borrowed Funds.* *Advances from the FHLB decreased $58.3 million, or 45.5%, from $128.1 million at December 31, 2023 to $69.8 million at December 31, 2024 as proceeds from investment sales were used to pay down debt.
Current wording
Borrowed Funds.* *Advances from the FHLB decreased $44.6 million, or 64.0%, from $69.8 million at December 31, 2024 to $25.2 million at December 31, 2025 primarily due to increased cash balances and deposit growth, which were used to reduce outstanding borrowings.
Previous wording
Stockholders’ Equity. Stockholders' equity increased $8.1 million, or 7.2%, to $121.8 million at December 31, 2024. The increase was primarily due to a $16.6 million decrease in accumulated other comprehensive loss reflecting the results of the balance sheet restructuring, which was partially offset by a net loss of $8.6 million. The Company's ratio of average equity to average assets was 9.23% for the year ended December 31, 2024 and 8.19% for the year ended December 31, 2023.
Current wording
Stockholders’ Equity. Stockholders' equity increased $15.0 million, or 12.3%, to $136.9 million at December 31, 2025. The increase was primarily due to net income of $10.0 million and a decrease in accumulated other comprehensive loss of $5.0 reflecting the results of the balance sheet restructuring. Our ratio of average equity to average assets was 10.09% for the year ended December 31, 2025 and 9.23% for the year ended December 31, 2024.
Previous wording
Net Income.* *Net loss for the year ended December 31, 2024 was $8.6 million, compared to net income of $4.4 million for the year ended December 31, 2023, a decrease of $13.0 million, or 296.1%. Diluted loss per share was $0.80 for the year ended December 31, 2024, compared to diluted earnings per share of $0.40 for the year ended December 31, 2023. The decrease in net income for the year ended December 31, 2024 was primarily due to a balance sheet restructuring, which resulted in a $16.0 million loss on sale of securities. Net income was also impacted by an increase in net interest income, an increase in the provision for credit losses and an increase in non-interest expense. Interest and dividend income increased $3.1 million, or 5.1%, interest expense increased $2.8 million, or 12.5%, and the provision for credit losses increased $1.1 million, or 64.5%. Non-interest income decreased $15.3 million, reflecting the loss on securities, while non-interest expenses increased $419,000, or 1.2%, as compared to 2023. Taxes decreased by $3.5 million due to the 2024 net loss, in contrast to the net income in 2023.
Current wording
Net Income.* *Net income for the year ended December 31, 2025 was $10.0 million, compared to net loss of $8.6 million for the year ended December 31, 2024, an increase of $18.7 million. Diluted earnings per share was $0.92 for the year ended December 31, 2025, compared to diluted loss per share of $0.80 for the year ended December 31, 2024. The increase in net income for the year ended December 31, 2025 was primarily due to a balance sheet restructuring in 2024, which resulted in a $16.0 million loss on sale of securities. Net income was also impacted by an increase in net interest income, a decrease in the provision for credit losses and an increase in non-interest expense. Interest and dividend income increased $5.7 million, or 8.9%, interest expense decreased $3.0 million, or 11.9%, and the provision for credit losses decreased $1.1 million, or 40.8%. Non-interest income increased $16.0 million, reflecting the loss on securities in 2024, while non-interest expenses increased $2.2 million, or 5.9%, as compared to 2024. Taxes increased by $5.0 million due to the 2025 net income, in contrast to the net loss in 2024.
Previous wording
Net Interest Income.* *Net interest income increased $266,000, or 0.7%, to $38.2 million for the year ended December 31, 2024, as compared to $38.0 million for the year ended December 31, 2023. The increase was primarily driven by higher yields on interest-earning asset balances, which were partially offset by higher costs on interest-bearing liability balances. The yield on interest earning assets increased 48 basis points to 5.36% in 2024 from 4.88% in 2023, primarily due to the rising interest rate environment in 2024. The costs of interest bearing liabilities increased 43 basis points to 2.87% in 2024 from 2.44% in 2023 driven by increases in general market rates, competitive market forces and a greater percentage of higher-yielding certificates of deposits and FHLB advances. The interest rate spread increased by 5 basis points to 2.49%. The net interest margin was 3.21% for the year ended December 31, 2024 and 3.06% for the year ended December 31, 2023. The ratio of average interest-earning assets to average interest-bearing liabilities decreased 0.9% to 133.68%.
Current wording
Net Interest Income.* *Net interest income increased $8.7 million, or 23.1%, to $46.4 million for the year ended December 31, 2025, as compared to $37.7 million for the year ended December 31, 2024. The increase was primarily driven by higher yields on interest-earning asset balances, lower costs on interest-bearing liability balances, an increase in the average balance of cash and cash equivalents and a decrease in the average balance of Federal Home Loan Bank advances. The yield on interest earning assets increased 46 basis points to 5.77% in 2025 from 5.31% in 2024, primarily due to the balance sheet restructuring and a higher percentage of commercial real estate loans. The costs of interest bearing liabilities decreased 33 basis points to 2.54% in 2025 from 2.87% in 2024 driven by competitive market forces, a declining interest rate environment and a decrease in Federal Home Loan Bank advances. The interest rate spread increased by 79 basis points to 3.23%. The net interest margin was 3.89% for the year ended December 31, 2025 and 3.17% for the year ended December 31, 2024. The ratio of average interest-earning assets to average interest-bearing liabilities increased 0.8% to 134.72%.
Previous wording
Interest Income. *Interest income increased $3.1 million, or 5.1%, to $63.8 million for 2024 from $60.7 million for 2023. The increase resulted primarily from increased asset yields, offset by a decrease in the average balance. The average yield on interest-bearing depository accounts increased to 5.29% for 2024 from 5.19% for 2023. The average yield on loans increased to 5.91% for 2024 from 5.47% in 2023. The average yields on investment securities increased to 2.14% for 2024 from 1.91% for 2023. Average interest earning assets decreased $52.2 million from $1.24 billion for the year ended December 31, 2023 to $1.19 billion for the year ended December 31, 2024. The decrease in average interest earning assets during 2024 compared to 2023 included decreases of $19.3 million in average loan balances and $30.8 million in available for sale securities.
Current wording
Interest Income.* *Interest income increased $5.7 million, or 8.9%, to $68.9 million for 2025 from $63.2 million for 2024. The increase resulted primarily from increased asset yields and an increase in the average balance of cash and cash equivalents. The average yield on loans increased to 6.24% for 2025 from 5.86% in 2024. The average yield on investment securities increased to 3.25% for 2025 from 2.14% for 2024. The average yield on interest-bearing depository accounts decreased to 4.36% for 2025 from 5.29% for 2024. Average interest earning assets increased $3.0 million from $1.190 billion for the year ended December 31, 2024 to $1.193 billion for the year ended December 31, 2025. The increase in average interest earning assets during 2025 compared to 2024 included an increase in interest-bearing depository accounts of $38.8 million, partially offset by decreases of $27.2 million and $6.7 million in available for sale securities and average loan balances, respectively.
Previous wording
Interest Expense.* *Interest expense increased $2.8 million, or 12.5%, to $25.5 million for 2024 from $22.7 million for 2023. This was primarily due to a 43 basis point increase in the overall cost of interest bearing liabilities to 2.87% for 2024 from 2.44% for 2023, partially offset by a decrease in average interest bearing liability balances of $38.3 million, or 4.1%, year over year. The average balance of the total interest-bearing deposits decreased by $23.8 million, while the cost increased 52 basis points. The average balance of FHLB advances decreased $13.5 million, while the cost decreased 24 basis points.
Current wording
Interest Expense.* *Interest expense decreased $3.0 million, or 11.9%, to $22.5 million for 2025 from $25.5 million for 2024. This was primarily due to a 33 basis point decrease in the overall cost of interest bearing liabilities to 2.54% for 2025 from 2.87% for 2024 along with a decrease in average interest bearing liability balances of $4.6 million, or 0.5%, year over year. The average balance of FHLB advances decreased $42.8 million, while the cost decreased 54 basis points. The average balance of the total interest-bearing deposits increased by $38.7 million (primarily in money market accounts and certificates of deposit), while the cost decreased 21 basis points.
Previous wording
Provision for Credit Losses.* *The Company records a provision for credit losses, which is recognized in earnings. The Company adopted the CECL model beginning on January 1, 2023, which requires that we make assumptions of credit quality, macroeconomic factors and conditions, and loan composition which are inherently subjective due to the use of estimates that are susceptible to significant revision as more information becomes available or as future events occur. Although we believe that we use the best information available to establish the allowance for credit losses, based on industry standards and historical experience, future additions to the allowance may be necessary, as a result of changes in economic conditions and other factors. In addition, the FDIC and NYSDFS, as an integral part of their examination process, will periodically review our allowance for credit losses. These agencies may require us to recognize adjustments to the allowance, based on their judgments about information available to them at the time of their examination.
Current wording
Provision for Credit Losses.* *We record a provision for credit losses, which is recognized in earnings. Under the CECL model, we are required to make assumptions of credit quality, macroeconomic factors and conditions, and loan composition. The calculation is inherently subjective due to the use of estimates that are susceptible to significant revision as more information becomes available or as future events occur. Although we believe that we use the best information available to establish the allowance for credit losses, based on industry standards and historical experience, future additions to the allowance may be necessary, as a result of changes in economic conditions and other factors. In addition, the FDIC and NYSDFS, as an integral part of their examination process, will periodically review our allowance for credit losses. These agencies may require us to recognize adjustments to the allowance, based on their judgments about information available to them at the time of their examination.
Previous wording
The Company recorded a provision for credit losses of $2.8 million for the year ended December 31, 2024, an increase of $1.1 million, or 64.5%, as compared to $1.7 million for the year ended December 31, 2023. Of this $1.1 million increase, $1.1 million is related to the provision for credit losses on loans, while the provision for credit losses on unfunded commitments decreased $43,000. The increase to the provision was primarily attributable to higher charge-offs and updates to assumptions on prepayments and other qualitative and quantitative components in our expected credit loss analysis.
Current wording
We recorded a provision for credit losses of $1.7 million for the year ended December 31, 2025, a decrease of $1.1 million, or 40.8%, as compared to $2.8 million for the year ended December 31, 2024. Of this decrease, $1.1 million is related to the provision for credit losses on loans, while the provision for credit losses on unfunded commitments decreased $78,000. The decrease to the provision was primarily attributable to lower net charge-offs and updates to assumptions on prepayments and other qualitative and quantitative components in our expected credit loss analysis.
Previous wording
Net charge-offs increased $333,000, or 16.1%, to $2.4 million for the year ended December 31, 2024. The increase was primarily due to a $291,000 commercial real estate loan charged-off in 2024. Net charge-offs on indirect automobile loans remained relatively stable at $1.4 million in both 2024 and 2023. The percentage of overdue account balances to total loans decreased to 1.71% as of December 31, 2024, from 1.90% as of December 31, 2023 and non-performing assets decreased $72,000, or 1.7%, to $4.1 million at December 31, 2024.
Current wording
Net charge-offs decreased $462,000, or 19.3%, to $1.9 million for the year ended December 31, 2025 as compared to $2.4 million for the year ended December 31, 2024. The decrease was primarily due to decreased net charge-offs on indirect automobile and commercial loans, partially offset by increased net charge-offs on commercial real estate loans. The percentage of overdue account balances to total loans decreased to 1.52% at December 31, 2025 from 1.71% at December 31, 2024, while non-performing assets decreased $434,000, or 10.5%, to $3.7 million at December 31, 2025.
Previous wording
Income Taxes.* *Income tax provision decreased by $3.5 million, or 290.1%, to a net benefit of $2.3 million for the year ended December 31, 2024 as compared to an expense of $1.2 million for the year ended December 31, 2023, primarily due to a pre-tax net loss recorded in 2024. Our effective tax rate for the year ended December 31, 2024 was 21.18% compared to 21.71% in 2023. The statutory tax rate was impacted by the benefits derived mainly from tax-exempt bond income and income received on the bank owned life insurance to arrive at the effective tax rate.
Current wording
Income Taxes.* *Income tax provision increased by $5.0 million to an expense of $2.6 million for the year ended December 31, 2025 as compared to a benefit of $2.3 million for the year ended December 31, 2024, primarily due to pre-tax net income recorded in 2025 as compared to a pre-tax net loss recorded in 2024. Our effective tax rate for the year ended December 31, 2025 was 20.81% compared to 21.18% in 2024. The statutory tax rate was impacted by the benefits derived mainly from tax-exempt bond income and income received on the bank owned life insurance to arrive at the effective tax rate.
Previous wording
The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. The yields set forth below include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income. Loan balances include loans held for sale. Deferred loan fees included in interest income totaled $60,000 and $67,000 for the years ended December 31, 2024 and 2023, respectively.
Current wording
The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. The yields set forth below include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income. Loan balances include loans held for sale. Deferred loan fees included in interest income totaled $218,000 and $60,000 for the years ended December 31, 2025 and 2024, respectively.
Previous wording
The following table presents the effects of changing rates and volumes on our net interest income for the years indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. The Company does not have any excludable out-of-period items or adjustments.
Current wording
The following table presents the effects of changing rates and volumes on our net interest income for the years indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. We do not have any excludable out-of-period items or adjustments.
Previous wording
The table above shows that in the event of an instantaneous 200 basis point increase in interest rates, our EVE would decrease by 11.8%; and in the event of an instantaneous 200 basis point decrease in interest rates, our EVE would decrease by 2.1%. Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The table above assumes that the composition of our interest-sensitive assets and liabilities existing at the date indicated remains constant uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the table provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our EVE and will differ from actual results.
Current wording
The table above shows that in the event of an instantaneous 200 basis point increase in interest rates, our EVE would increase by 2.8% and in the event of an instantaneous 200 basis point decrease in interest rates, our EVE would decrease by 8.4%. Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The table above assumes that the composition of our interest-sensitive assets and liabilities existing at the date indicated remains constant uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the table provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our EVE and will differ from actual results.
Previous wording
We maintain liquid assets at levels we consider adequate to meet both our short-term and long-term liquidity needs. We adjust our liquidity levels to fund deposit outflows, repay our borrowings and to fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives.
Current wording
We maintain liquid assets at levels we consider adequate to meet both our short and long-term liquidity needs. We adjust our liquidity levels to fund deposit outflows, repay our borrowings and to fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives.
Previous wording
As reported in the Consolidated Statements of Cash Flows, our cash flows are classified for financial reporting purposes as operating, investing, or financing cash flows. Net cash provided by operating activities was $8.5 million and $7.0 million for the years ended December 31, 2024 and 2023, respectively. These amounts differ from our net income because of certain cash receipts and disbursements that did not affect net income for the respective periods. Net cash provided by investing activities was $74.7 million in 2024 as compared to $14.7 million in 2023. Net cash provided by investing activities principally reflects our investment security and loan activities in the respective periods. Net cash inflows of $33.4 million for a decrease in loans was the primary contributor to the cash provided by investing activities for the year ended December 31, 2024, as loans increased $16.2 million in 2023. Deposit and borrowing cash flows have traditionally comprised most of our financing activities, which resulted in a net cash outflow $67.9 million in the year ended December 31, 2024, as compared to $31.0 million in fiscal year 2023.
Current wording
As reported in the consolidated statements of cash flows, our cash flows are classified for financial reporting purposes as operating, investing, or financing activities. Net cash provided by operating activities was $11.7 million and $8.5 million for the years ended December 31, 2025 and 2024, respectively. These amounts differ from net income due to certain non-cash items and changes in operating assets and liabilities that did not affect net income during the respective periods. Net cash provided by investing activities was $21.2 million in 2025 compared to $74.7 million in 2024. Investing cash flows primarily reflect activity in the securities portfolio and changes in loan balances. The $16.7 million decrease in loans was a significant contributor to cash provided by investing activities in 2025, while higher securities maturities, calls and purchases drove investing cash flows in 2024. Deposit and borrowing activity continues to comprise the majority of our financing cash flows. Net cash provided by financing activities was $31.6 million in 2025, compared to net cash used of $67.9 million in 2024, primarily reflecting deposit growth partially offset by reductions in short-term borrowings.
Previous wording
The financial statements and related notes of the Company have been prepared in accordance with United States GAAP. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than the effects of inflation.
Current wording
The financial statements and related data presented herein have been prepared in accordance with U.S. GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.
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Previous report — wording carried elsewhere
Significant Accounting Policies, Critical Accounting Estimates