0001751783-26-000005
SEC filingRhinebeck Bancorp, Inc. reported net income of $10.0 million for FY 2025, a significant improvement from a net loss of $8.6 million in FY 2024. This $18.7 million increase was primarily driven by a $16.0 million reduction in non-interest loss (from a $9.0 million loss to $7.0 million income), largely due to a $16.0 million securities sale loss in 2024, alongside an $8.7 million (23.1%) increase in net interest income to $46.4 million. Key drivers included higher asset yields, lower funding costs, and a $1.1 million (40.8%) decrease in the provision for credit losses to $1.7 million. Total assets grew 3.7% to $1.30 billion, with a $64.5 million increase in cash and cash equivalents offsetting an $18.4 million decrease in net loans. The company's strategic shift towards commercial lending continued, with commercial real estate and business loans comprising 65.4% of the loan portfolio. Capital ratios remained strong, with total capital to risk-weighted assets at 14.40%.
Rhinebeck Bancorp reported a substantial turnaround in FY 2025, with net income of $10.0 million compared to a net loss of $8.6 million in FY 2024. This $18.7 million improvement was driven by multiple factors: net interest income increased $8.7 million (23.1%) to $46.4 million, non-interest income improved by $16.0 million (from a $9.0 million loss to $7.0 million income), and the provision for credit losses decreased $1.1 million (40.8%) to $1.7 million. The 2024 results were significantly impacted by a $16.0 million loss on sale of securities from a balance sheet restructuring. Diluted earnings per share was $0.92 compared to a diluted loss per share of $(0.80). Total assets grew 3.7% to $1.30 billion, with cash and cash equivalents increasing 172.1% to $102.0 million, partially offset by a 1.9% decrease in net loans to $953.4 million.
Interest and dividend income increased 8.9% to $68.9 million, driven by higher yields on interest-earning assets (5.77% vs. 5.31%) and an increase in the average balance of cash and cash equivalents. The average yield on loans increased to 6.24% from 5.86%, while the average yield on investment securities increased to 3.25% from 2.14%. Interest expense decreased 11.9% to $22.5 million due to a 33 basis point reduction in the cost of interest-bearing liabilities (2.54% vs. 2.87%) and a decrease in average FHLB advances. Non-interest income of $7.0 million represented a $16.0 million improvement from the prior year's loss, primarily due to the absence of the $16.0 million securities sale loss recorded in 2024.
Net interest margin expanded significantly to 3.89% from 3.17% in the prior year, while the interest rate spread increased 79 basis points to 3.23%. The efficiency ratio improved to 73.12% from 82.34%, reflecting better operating leverage. Gross margin (net interest income as percentage of total interest income) improved to 67.3% from 59.6%. Operating margin (net income before taxes as percentage of total revenue) was 18.4%. Non-interest expense increased 5.9% to $39.0 million, primarily due to higher compensation ($1.2 million increase), marketing ($271,000 increase), and data processing ($145,000 increase) costs.
Net cash provided by operating activities was $11.7 million, while investing activities provided $21.2 million primarily from a $16.7 million decrease in loans. Financing activities provided $31.6 million, driven by deposit growth. Total liabilities increased 2.7% to $1.16 billion, with deposits growing 7.5% to $1.10 billion. Stockholders' equity increased 12.3% to $136.9 million, supported by net income and a $5.0 million decrease in accumulated other comprehensive loss. The company maintained strong liquidity with $714.2 million in available sources of funds, including $101.9 million in cash and $337.2 million in remaining FHLB borrowing capacity.
The company's business strategy emphasizes relationship-based commercial lending, growing low-cost deposits, investing in technology, and expanding market area through organic growth while considering opportunistic acquisitions. Management intends to continue increasing commercial real estate and business loan originations, which represented 65.4% of the loan portfolio at year-end. The company plans to develop treasury management services and explore private banking offerings. Credit risk management remains foundational, with non-performing assets at 0.28% of total assets. The company faces risks related to its emphasis on commercial lending, economic conditions, interest rate changes, and regulatory compliance. On February 10, 2026, Rhinebeck Bancorp, MHC adopted a Plan of Conversion and Reorganization to convert from the mutual holding company structure to a fully public stock holding company structure.