Rhinebeck Bancorp, Inc.
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
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.
Jun 30, 2026 · Filed Aug 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-Q
Period ended 2026-03-31; filed 2026-05-14.
0001751783-26-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001751783-26-000040
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 51 previous paragraphs and 65 current paragraphs.
24 unchanged; 25 reworded; 16 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 39 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 (16)
Current report
Recent Events
Current report
On July 21, 2026, the Company completed its second-step conversion, and became a fully public stock holding company. In connection therewith, the Company sold 8,880,210 shares of common stock at a purchase price of $10.00 per share, generating gross offering proceeds of $88.8 million. Because the offering was oversubscribed, the Company subsequently returned approximately $71.5 million to subscribers at closing.
Current report
Concurrent with the offering, existing public shares of common stock were exchanged for new shares of common stock of the Company at an exchange ratio of 1.3978. Cash was paid in lieu of fractional shares at a rate of $10.00 per share. Upon completion of the offering and share exchange, the Company had 15,635,966 shares of common stock outstanding, and the new shares commenced trading on the Nasdaq Capital Market under the symbol “RBKB” on July 22, 2026.
Current report
This significant capital influx substantially increases our net worth and liquidity position. The net proceeds from the offering will provide additional capital to support future loan growth, expand our branch network, enhance products and services, and fund general corporate purposes. Additionally, because the offering was oversubscribed, the Employee Stock Ownership Plan (ESOP) was unable to purchase shares directly in the offering. The ESOP purchased 355,208 shares at an average cost of $12.28 per share in the open market following the transaction.
Current report
Other Assets. Other assets decreased by $7.2 million, or 28.1%, from $25.5 million at December 31, 2025 to $18.3 million as of June 30, 2026, driven primarily by a $3.0 million reduction in swap collateral, a $1.7 million decrease in the fair value of swaps, and a $1.5 million decline in deferred trustee fees resulting from the retirement of two directors.
Current report
Total Liabilities. Total liabilities increased $165.5 million, or 14.2%, to $1.33 billion at June 30, 2026, primarily driven by a $185.6 million, or 16.9%, increase in deposits which included $156.0 million in stock subscription deposits, and a $3.8 million increase in mortgagors’ escrow accounts. The increases were offset by a reduction in borrowings of $20.0 million, or 79.5%, and a $3.9 million, or 14.0%, decrease in accrued expenses and other liabilities, primarily due to deferred subscription costs and a decrease in the fair value of swaps.
Current report
Net Income. Net income for the second quarter of 2026 was $2.6 million, compared to $2.7 million for the second quarter of 2025. Diluted earnings per share were $0.24 for the second quarter of 2026, compared to $0.25 for the same quarter of 2025. Interest and dividend income increased $258,000, or 1.5%, while interest expense increased $118,000, or 2.2%. The provision for credit losses increased $90,000, or 89.1%. Non-interest income increased $141,000, or 8.8%, and non-interest expense increased $301,000, or 3.1%. The provision for income taxes remained unchanged between the comparable quarters.
Current report
Net interest income increased $297,000, or 1.3%, to $22.8 million for the six months ended June 30, 2026 compared to $22.3 million for the six months ended June 30, 2025. The increase was primarily due to higher interest-earning assets and lower costs on interest-bearing liabilities, offset by a decreased yield on interest-earning assets and an increase in the balance of interest-bearing liabilities. The net interest margin decreased by 11 basis points to 3.77% and the interest rate spread decreased by five basis points from 3.23% for the six months ended June 30, 2025 to 3.18% for the six months ended June 30, 2026. The ratio of average interest-earning assets to average interest-bearing liabilities decreased 1.08% to 133.47%.
Current report
Interest income increased $231,000, or 0.7%, to $33.6 million for the six months ended June 30, 2026. The increase was primarily due to an increase in average balance of interest-earning assets, partially offset by a decrease in the yield on interest-earning assets. 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 $78.0 million, or 236.2%, and was partially offset by a decrease of $39.8 million, or 4.0% in the average balance of loans, when comparing the six months ended June 30, 2026 and 2025. The average yield on interest-earning assets decreased by 19 basis points to 5.56%, while the average balance of interest-earning assets increased by $48.2 million, or 4.1%, to $1.22 billion. The average yield on interest-bearing depository accounts and federal funds sold decreased by 48 basis points, to 3.75%, the average yield on loans decreased two basis points, to 6.14%, while the average yield on available for sale securities increased six basis points, to 3.37%.
Current report
Interest Expense. Interest expense increased $118,000, or 2.2%, to $5.4 million for the three months ended June 30, 2026, compared to $5.3 million for the same quarter in 2025. The average balance of total interest-bearing liabilities increased $68.4 million, or 8.0%, to $928.4 million, primarily due to a $96.8 million increase in the average balance of deposits partially offset by a $28.5 million decrease in the average balance of FHLB advances, which decreased from $33.7 million to $5.2 million. The average cost of interest-bearing liabilities decreased by 13 basis points, to 2.32%, reflecting lower funding costs, primarily due to the receipt of subscription deposits maintained at a low savings rate, and a decrease in borrowings.
Current report
The provision for credit losses decreased by $192,000, or 76.2%, from $252,000 for the six months ended June 30, 2025 to $60,000 for the six months ended June 30, 2026. The decrease in the provision was primarily due to lower loan balances, particularly indirect automobile loans. Net charge-offs increased $49,000, or 8.2% to $650,000 for the first six months of 2026 as compared to $601,000 for the first six months of 2025. The increase was primarily due to increased net charge-offs in indirect automobile loans of $223,000, substantially offset by a decrease of $182,000 in net charge-offs of commercial loans.
Current report
Non-Interest Income. Non-interest income totaled $1.7 million for the three months ended June 30, 2026, an increase of $141,000, or 8.8%, from the comparable period in 2025, due primarily to an increase of $155,000, or 57.6%, in investment advisory fee income offset by a $69,000 decrease in net gain on sale of loans as we discontinued originating residential mortgage loans directly.
Current report
Non-interest income totaled $3.2 million for the six months ended June 30, 2026, a decrease of $144,000, or 4.3%, from the comparable period in 2025, driven primarily by a decrease of $207,000, or 27.3%, in other non-interest income and a $107,000 decrease in net gain on sales of loans. These decreases were partially offset by an increase in investment advisory income of $122,000.
Current report
For the six months ended June 30, 2026, non-interest expense totaled $19.7 million, an increase of $531,000, or** **2.8%, compared to $19.2 million for the same period in 2025. The variance was primarily driven by a $695,000, or 6.7%, increase in salaries and employee benefits, reflecting increased compensation and medical insurance costs, and higher occupancy and data processing expenses, which rose $164,000 and $155,000, respectively. These operational increases were partially offset by a $260,000 decrease in other expenses, a $140,000 decrease in marketing expenses, and a $120,000 decrease in FDIC deposit insurance costs.
Current report
The provision for income taxes decreased $4,000 to $1.4 million for the six months ended June 30, 2026. The effective tax rate was 22.43% for the six months ended June 30, 2026 as compared to 21.84% for the six months ended June 30, 2025.
Current report
On July 21, 2026, the Company completed its second-step conversion and public stock offering, generating approximately $88.8 million in gross proceeds through the sale of 8,880,210 shares at $10.00 per share. This capital infusion significantly enhances the Company’s overall liquidity position and regulatory capital, aligning with our strategic goals to support planned growth, improve stock liquidity, facilitate the ability to pay public stockholder dividends, enhance capital market accessibility, and support future mergers and acquisitions. As of June 30, 2026, these offering proceeds were not reflected in the reported financial statements or liquidity management ratios.
Removed paragraphs (2)
Previous report
Total Liabilities. Total liabilities decreased $18.7 million, or 1.6%, to $1.15 billion at March 31, 2026. The decrease was primarily driven by a decrease in FHLB advances of $20.0 million, or 79.5%, and a decrease in other liabilities of $3.3 million, or 12.0%, partially offset by a $6.2 million increase in total deposits.
Previous report
Non-Interest Income. Non-interest income totaled $1.5 million for the three months ended March 31, 2026, a decrease of $285,000, or 16.3%, from the comparable period in 2025, due primarily to a decrease of $222,000, or 53.4%, in other non-interest income as interest rate swap income decreased. Investment advisory fee income decreased $33,000, net gain on sale of loans decreased $38,000 and service charges on deposit accounts decreased $9,000. These decreases were only slightly offset by a $10,000 increase in the cash surrender value of life insurance and a $7,000 gain on the disposal of premises and equipment.
Reworded paragraphs (25)
Previous wording
Management’s discussion and analysis of financial condition and results of operations at March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 and 2025, 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 June 30, 2026 and December 31, 2025, and for the three and six months ended June 30, 2026 and 2025, 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 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:
Current wording
This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which can be identified by the use of words such as “estimate,” “approximate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “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
Our most significant accounting policies are described in Note 1 to the Consolidated Financial Statements in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 13, 2026 (the “Annual Report on Form 10-K”) Certain of these accounting policies require management to use significant judgment and estimates, which can have a material impact on the carrying value of certain assets and liabilities. We consider these policies to be our critical accounting estimates. The judgment and assumptions made are based upon historical experience, future forecasts, and/or other factors that management believes to be reasonable. Because of the nature of the judgment and assumptions, actual results could differ from estimates, which could have a material effect on our financial condition and results of operations. We consider the allowance for credit losses to be our most critical accounting policy.
Current wording
Our most significant accounting policies are described in Note 1 to the Consolidated Financial Statements in our Annual Report on Form 10-K. Certain of these accounting policies require management to use significant judgment and estimates, which can have a material impact on the carrying value of certain assets and liabilities. We consider these policies to be our critical accounting estimates. The judgment and assumptions made are based upon historical experience, future forecasts, and/or other factors that management believes to be reasonable. Because of the nature of the judgment and assumptions, actual results could differ from estimates, which could have a material effect on our financial condition and results of operations. We consider the allowance for credit losses to be our most critical accounting policy.
Previous wording
The Company's allowance for credit losses is its estimate of credit losses currently expected in the loan portfolio, on unfunded lending commitments, and on its available-for-sale securities portfolio over the expected life of those assets. While these estimates are based on substantive methods for determining the required allowance, actual outcomes may differ significantly from estimated results, especially when determining required allowances for larger, complex commercial credits or unfunded lending commitments to commercial borrowers. Consumer loans, including indirect automobile loans and single family residential real estate, are smaller and generally behave in a similar manner, and loss estimates for these credits are considered more predictable. Additionally, the Company estimates the allowance for credit losses as a calculation of expected lifetime credit losses utilizing a forward-looking forecast of macroeconomic conditions, which may differ significantly from actual results. Further discussion of the methodology used in establishing the allowance is provided in Note 3 to the Notes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the Annual Report on Form 10-K.
Current wording
The Company's allowance for credit losses is its estimate of expected lifetime credit losses currently expected in the loan portfolio, on unfunded lending commitments, and on its available-for-sale securities portfolio over the expected life of those assets. While these estimates are based on substantive methods for determining the required allowance, actual outcomes may differ significantly from estimated results, especially when determining required allowances for larger, complex commercial credits or unfunded lending commitments to commercial borrowers. Consumer loans, including indirect automobile loans and single family residential real estate loans, are smaller and generally behave in a similar manner, and loss estimates for these credits are considered more predictable. Additionally, the allowance for credit losses calculation utilizes a forward-looking forecast of macroeconomic conditions, which may differ significantly from actual results. Further discussion of the methodology used in establishing the allowance is provided in Note 3 to the Notes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the Annual Report on Form 10-K.
Previous wording
Total Assets. Total assets decreased by $16.9 million, or 1.3%, to $1.28 billion as of March 31, 2026, due primarily to a decrease in loans receivable of $16.6 million, or 1.7%, to $936.8 million, a decrease in available for sale securities of $6.0 million, or 3.7%, and a decrease in other assets of $3.7 million, or 14.6%. This decrease was partially offset by an increase in cash and cash equivalents of $10.9 million, or 10.7%.
Current wording
Total Assets. Total assets increased by $168.3 million, or 12.9%, to $1.47 billion as of June 30, 2026, due primarily to an increase in cash and cash equivalents of $202.6 million, or 198.6%, and an increase in available for sale securities of $9.2 million, or 5.7%. This increase was partially offset by a decrease in loans receivable of $34.9 million, or 3.7%, to $918.5 million, and a decrease in other assets of $7.2 million, or 28.1%.
Previous wording
Cash and Cash Equivalents. Cash and cash equivalents increased $10.9 million, or 10.7%, to $112.9 million at March 31, 2026 from $102.0 million at December 31, 2025, primarily due to a $9.0 million, or 10.8%, 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.
Current wording
Cash and Cash Equivalents. Cash and cash equivalents increased $202.6 million, or 198.6%, to $304.6 million at June 30, 2026 from $102.0 million at December 31, 2025, primarily due to $156.0 million in stock subscriptions, 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.
Previous wording
Investment Securities Available for Sale. Available for sale securities declined $6.0 million, or 3.7%, to $156.2 million at March 31, 2026 from $162.2 million at December 31, 2025, primarily due to $6.6 million in paydowns, calls, and maturities and a $507,000 increase in unrealized losses, partially offset by $992,000 in purchases.
Current wording
Investment Securities Available for Sale. Available for sale securities increased $9.2 million, or 5.7%, to $171.4 million at June 30, 2026 from $162.2 million at December 31, 2025, primarily due to $22.4 million in purchases (primarily in U.S. Treasury securities), partially offset by $12.7 million in paydowns, calls, and maturities and a $740,000 increase in unrealized losses.
Previous wording
Net Loans. Net loans receivable decreased $16.6 million, or 1.7%, to $936.8 million at March 31, 2026, compared to $953.4 million at December 31, 2025 reflecting a strategic $17.7 million reduction in indirect automobile loans to reduce this concentration in the portfolio. At March 31, 2026, indirect automobile loans were 15.3% of total assets, compared to 16.4% at December 31, 2025. Non-accrual loans decreased by $235,000, or 6.4%, from $3.7 million at December 31, 2025 to $3.5 million at March 31, 2026.
Current wording
Net Loans. Net loans receivable decreased $34.9 million, or 3.7%, to $918.5 million at June 30, 2026, compared to $953.4 million at December 31, 2025 reflecting a strategic $25.7 million reduction in indirect automobile loans to reduce this concentration in the portfolio. At June 30, 2026, indirect automobile loans were 12.8% of total assets, compared to 16.4% at December 31, 2025. Commercial real estate loans decreased $11.6 million, while residential real estate loans increased $6.7 million. Non-accrual loans decreased by $312,000, or 8.4%, from $3.7 million at December 31, 2025 to $3.4 million at June 30, 2026.
Previous wording
Deposits. Deposits increased $6.2 million, or 0.6%, to $1.10 billion at March 31, 2026. Interest-bearing deposits increased $7.8 million, or 0.9%, while non-interest-bearing deposits decreased $1.6 million, or 0.7%. The increase in interest-bearing deposits was primarily due to increases in certificates of deposit of $6.0 million, NOW accounts of $5.6 million and savings accounts of $3.8 million. These increases were partially offset by a decrease in money market accounts of $7.7 million.
Current wording
Deposits. Deposits increased $185.6 million, or 16.9%, to $1.28 billion at June 30, 2026. Interest-bearing deposits increased $170.1 million, or 19.6%, while non-interest-bearing deposits increased $15.5 million, or 6.8%. The increase in interest-bearing deposits was primarily due to subscription deposits of $156.0 million, of which approximately $71.5 million (including interest) was subsequently returned to subscribers at closing due to oversubscription. This was augmented by increases in certificates of deposit of $7.7 million, NOW accounts of $7.7 million and savings accounts of $5.5 million. These increases were partially offset by a decrease in money market accounts of $6.8 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 $36.4 million and $35.6 million at March 31, 2026 and December 31, 2025, respectively. We had no brokered deposits at either March 31, 2026 or December 31, 2025.
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 $37.6 million and $35.6 million at June 30, 2026 and December 31, 2025, respectively. We had no brokered deposits at either June 30, 2026 or December 31, 2025.
Previous wording
Mortgagors’ Escrow Accounts.** **Mortgagors’ escrow accounts decreased $1.5 million, or 16.1%, to $7.9 million at March 31, 2026, from $9.4 million at December 31, 2025, primarily due to the timing of property tax and insurance disbursements.
Current wording
Mortgagors’ Escrow Accounts.** **Mortgagors’ escrow accounts increased $3.8 million, or 40.5%, to $13.2 million at June 30, 2026, from $9.4 million at December 31, 2025, primarily due to the timing of property tax and insurance disbursements.
Previous wording
Advances from the Federal Home Loan Bank. FHLB advances declined $20.0 million, or 79.5%, to $5.2 million at March 31, 2026 from $25.2 million at December 31, 2025. The reduction reflects the Company’s use of excess liquidity from the maturity of securities and increased deposits to pay down borrowings.
Current wording
Advances from the Federal Home Loan Bank. FHLB advances declined $20.0 million, or 79.5%, to $5.2 million at June 30, 2026 from $25.2 million at December 31, 2025. The reduction reflects the Company’s use of excess liquidity from increased cash balances and increased deposits to pay down borrowings.
Previous wording
Stockholders’ Equity. Stockholders’ equity increased $1.8 million, or 1.3%, to $138.6 million at March 31, 2026 from $136.9 million at December 31, 2025. The increase was primarily due to $2.2 million in net income, partially offset by a $400,000 increase in accumulated other comprehensive loss. The Company’s book value per share was $12.43 at March 31, 2026, compared to $12.28 at December 31, 2025. The ratio of stockholders’ equity to total assets increased to 10.79% from 10.51% over the same period. Unearned common stock held by the Bank’s employee stock ownership plan was $2.8 million at March 31, 2026 and December 31, 2025.
Current wording
Stockholders’ Equity. Stockholders' equity increased $2.8 million, or 2.0%, to $139.6 million at June 30, 2026. The increase was primarily due to $4.8 million in net income partially offset by a $1.8 million repurchase of common stock and a $733,000 increase in the total accumulated other comprehensive loss. The Company’s book value per share was $12.49 at June 30, 2026, compared to $12.28 at December 31, 2025. The ratio of stockholders’ equity to total assets decreased to 9.50% from 10.51% over the same period. Unearned common stock held by the ESOP was $2.7 million at June 30, 2026 and $2.8 million at December 31, 2025.
Previous wording
Comparison of Operating Results for the Three Months Ended March 31, 2026 and 2025
Current wording
Comparison of Operating Results for the Three and Six Months Ended June 30, 2026 and 2025
Previous wording
Net Income. Net income for the first quarter of 2026 was $2.2 million, compared to $2.3 million for the first quarter of 2025. Diluted earnings per share were $0.20 for the first quarter of 2026, compared to $0.21 for the same quarter of 2025. Interest and dividend income decreased $27,000, or 0.2%, while interest expense decreased $184,000, or 3.3%. The provision for credit losses decreased $282,000, or 79.9%. Non-interest income decreased $285,000, or 16.3%, and non-interest expense increased $230,000, or 2.4%. The provision for income taxes decreased $4,000 between the comparable quarters.
Current wording
Net income for the first six months of 2026 was $4.8 million, compared to $5.0 million for the first six months of 2025. Diluted earnings per share were $0.44 for the first half of 2026, compared to $0.46 for the same period of 2025. Interest and dividend income increased $231,000, or 0.7%, while interest expense decreased $66,000, or 0.6%. The provision for credit losses decreased $192,000, or 76.2%. Non-interest income decreased $144,000, or 4.3%, and non-interest expense increased $531,000, or 2.8%. The provision for income taxes decreased $4,000 between the comparable six month periods.
Previous wording
Net Interest Income. Net interest income increased $157,000, or 1.4%, to $11.2 million for the three months ended March 31, 2026 compared to 2025. The increase was primarily due to lower costs on interest-bearing liabilities, partially offset by lower yields on interest-earning assets due to the lower interest rate environment. The net interest margin decreased by two basis points to 3.77% and the interest rate spread improved by two basis points from 3.13% for the three months ended March 31, 2025 to 3.15% for the three months ended March 31, 2026, reflecting slightly better pricing on assets versus liabilities. The ratio of average interest-earning assets to average interest-bearing liabilities declined 12 basis points to 133.88%.
Current wording
Net Interest Income. Net interest income increased $140,000, or 1.2%, to $11.6 million for the three months ended June 30, 2026 compared to 2025. The increase was primarily due to higher interest-earning asset balances and lower costs on interest-bearing liabilities, partially offset by lower yields on interest-earning assets and higher interest-bearing liability balances. The net interest margin decreased by 19 basis points to 3.78% and the interest rate spread decreased by 13 basis points from 3.33% for the three months ended June 30, 2025 to 3.20% for the three months ended June 30, 2026. The ratio of average interest-earning assets to average interest-bearing liabilities decreased 2.05% to 133.06%.
Previous wording
Interest Income. Interest income decreased $27,000, or 0.2%, to $16.6 million for the three months ended March 31, 2026. The decrease was primarily due to a decrease in the yield on interest-earning assets and the decrease in the average balance of loans, offset by an increase in the average balance of cash and cash equivalents. The average yield on interest-earning assets decreased by 12 basis points to 5.59%, while the average balance of interest-earning assets increased by $22.6 million, or 1.9%, to $1.20 billion. The average yield on loans increased 2 basis points, to 6.12%, and the average yield on available for sale securities increased 21 basis points, to 3.46%. 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 $63.2 million, or 222.4%, and was partially offset by a decrease of $42.0 million in the average balance of loans, when comparing the three months ended March 31, 2026 with the comparable period in 2025.
Current wording
Interest Income. Interest income increased $258,000, or 1.5%, to $17.0 million for the three months ended June 30, 2026. The increase was primarily due to an increase in average balance of interest-earning assets, partially offset by a decrease in the yield on interest-earning assets. 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 $92.5 million, or 246.6%, to $130.1 million, and was partially offset by a decrease of $37.5 million, or 3.8% in the average balance of loans when comparing the three months ended June 30, 2026 and 2025. The average yield on interest-earning assets decreased by 26 basis points to 5.52%, while the average balance of interest-earning assets increased by $73.5 million, or 6.3%, to $1.24 billion. The average yield on interest-bearing depository accounts and federal funds sold decreased by 71 basis points, to 3.71%, the average yield on loans decreased two basis points, to 6.16%, and the average yield on available for sale securities decreased nine basis points, to 3.28%.
Previous wording
Interest Expense. Interest expense decreased $184,000, or 3.3%, to $5.4 million for the three months ended March 31, 2026, compared to $5.6 million for the same quarter in 2025. The average cost of interest-bearing liabilities declined by 14 basis points, to 2.44%, 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 $17.7 million, or 2.0%, to $899.8 million, primarily due to a $69.1 million increase in the average balance of deposits partially offset by a $20.0 million decline in the average balance of Federal Home Loan Bank advances, which decreased from $75.0 million to $23.8 million. The average cost of these advances also declined by 127 basis points, from 4.07% to 2.80% for the first quarter of 2025 and 2026, respectively.
Current wording
Interest expense decreased $66,000, or 0.6%, to $10.8 million for the six months ended June 30, 2026, compared to $10.9 million for the same six-month period in 2025. The average cost of interest-bearing liabilities decreased by 14 basis points, to 2.38%, reflecting lower funding costs, a decrease in borrowings and lower market interest rates. The average balance of total interest-bearing liabilities increased $43.1 million, or 5.0%, to $914.1 million, primarily due to an $82.9 million increase in the average balance of deposits partially offset by a $39.8 million decline in the average balance of FHLB advances, which decreased from $54.2 million to $14.4 million. The average cost of these advances also declined by 1.66%, from 3.95% to 2.29% for the first half of 2025 and 2026, respectively.
Previous wording
Provision for Credit Losses. The provision for credit losses decreased by $282,000, or 79.9%, from $353,000 for the quarter ended March 31, 2025 to $71,000 for the current quarter. The decrease in the provision was primarily due to lower loan balances. Net charge-offs increased by $38,000, from $510,000 for the first quarter of 2025 to $548,000 for the first quarter of 2026. The increase was primarily due to increased net charge-offs of $176,000 in indirect automobile loans and a $44,000 increase in consumer loans, substantially offset by decreased net charge-offs of $183,000 in commercial loans.
Current wording
Provision for Credit Losses. The provision for credit losses increased by $90,000, or 89.1%, from a $101,000 credit for the quarter ended June 30, 2025 to an $11,000 credit for the current quarter, driven by a lower amount of automobile loans and low non-performing loan levels. Net charge-offs increased $12,000, from $91,000 for the second quarter of 2025 to $103,000 for the second quarter of 2026. The increase was primarily due to increased net charge-offs of $47,000 in indirect automobile loans, substantially offset by decreased net charge-offs of $36,000 in consumer loans.
Previous wording
Non-Interest Expense. For the first quarter of 2026, non-interest expense totaled $9.7 million, an increase of $230,000, or 2.4%, compared to the same period in 2025. This increase was primarily driven by higher salaries and benefits expense of $399,000, reflecting increased compensation and medical insurance costs, as well as higher occupancy costs of $152,000, due to increased repair expenses and a rise in data processing costs of $84,000. These increases were partially offset by declines in professional fees of $84,000, FDIC insurance expense of $78,000, marketing expenses of $55,000, and amortization of intangible assets of $13,000.
Current wording
Non-Interest Expense. For the three months ended June 30, 2026, non-interest expense totaled $10.0 million, an increase of $301,000, or 3.1%, compared to the same period in 2025. This increase was primarily driven by increases in: salaries and employee benefits of $296,000, professional fees of $144,000, and data processing costs of $71,000. These increases were partially offset by decreases in other non-interest expenses of $85,000, marketing expenses of $85,000, and FDIC deposit insurance and other insurance expenses of $42,000.
Previous wording
Income Taxes. The provision for income taxes decreased $4,000 to $635,000 for the three months ended March 31, 2026, compared to $639,000 for the same period in 2025. The decreased income tax provision corresponds to lower pre-tax income during the quarter compared to the first quarter of 2025. The effective tax rate was 22.27% for the three months ended March 31, 2026 as compared to 21.83% for the three months ended March 31, 2025.
Current wording
Income Taxes. The provision for income taxes remained at $762,000 for the three months ended June 30, 2026 and 2025. The effective tax rate was 22.56% for the three months ended June 30, 2026 as compared to 21.85% for the three months ended June 30, 2025.
Previous wording
Average Balance Sheets for the Three Months Ended March 31, 2026 and 2025
Current wording
Average Balance Sheets for the Three and Six Months Ended June 30, 2026 and 2025
Previous wording
Our primary sources of liquidity are deposits, loan sales, amortization and prepayment of loans and mortgage-backed securities, maturities, sales and calls of investment securities and other short-term investments, earnings, funds provided from operations, as well as access to FHLB advances and other borrowings. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan and security sales and prepayments are greatly influenced by market interest rates, economic conditions, and rates offered by our competition. We set the interest rates on our deposits to maintain a desired level of total deposits.
Current wording
Our primary sources of liquidity are the July 21, 2026 offering proceeds, deposits, amortization and prepayment of loans and mortgage-backed securities, maturities, sales and calls of investment securities and other short-term investments, earnings, funds provided from operations, as well as access to FHLB advances and other borrowings. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan and security sales and prepayments are greatly influenced by market interest rates, economic conditions, and rates offered by our competition. We set the interest rates on our deposits to maintain a desired level of total deposits.
Previous wording
As reflected in the Consolidated Statements of Cash Flows, net cash provided by operating activities was $3.5 million for the three months ended March 31, 2026, compared to $4.3 million for the same period in 2025. 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 $22.9 million in the first three months of 2026, an increase from $13.0 million in the prior-year period, driven primarily a decrease in net loans of $16.6 million in the first three months of 2026 versus a net increase in loans of $5.1 million in the comparable 2025 period and $6.6 million in proceeds from maturities and principal repayments of securities. Cash used in financing activities was $15.5 million for the three months ended March 31, 2026, compared to $4.2 million for the same period in 2025, resulting primarily from changes in deposit balances and debt repayments. As a result of these activities, cash and cash equivalents increased by $10.9 million to $112.9 million as of March 31, 2026, from a beginning balance of $102.0 million.
Current wording
As reflected in the Consolidated Statements of Cash Flows, net cash provided by operating activities was $9.1 million for the six months ended June 30, 2026, compared to $6.7 million for the same period in 2025. 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 $25.6 million in the first six months of 2026, a decrease from $35.3 million in the prior-year period, driven primarily by security purchases and a decrease in net loans. Cash provided by financing activities was $167.9 million for the six months ended June 30, 2026, compared to $10.1 million for the same period in 2025, resulting primarily from the $156.0 million in proceeds from stock subscriptions and changes in deposit balances and debt repayments. As a result of these activities, cash and cash equivalents increased by $202.6 million to $304.6 million as of June 30, 2026, from a beginning balance of $102.0 million.
Previous wording
The Bank has access to a preapproved secured line of credit with the FHLB. At March 31, 2026, the Bank had pledged $523.5 million of assets to the FHLB, which resulted in a secured line of credit of $365.7 million. At March 31, 2026, the Bank had borrowed $5.2 million under this line, with remaining secured borrowing capacity of $360.6 million.
Current wording
The Bank has access to a preapproved secured line of credit with the FHLB. At June 30, 2026, the Bank had pledged $523.3 million of assets to the FHLB, which resulted in a secured line of credit of $365.1 million. At June 30, 2026, the Bank had borrowed $5.2 million under this line, with remaining secured borrowing capacity of $359.9 million.