POUGHKEEPSIE, N.Y.,
Oct. 31, 2019 /PRNewswire/
-- Rhinebeck Bancorp, Inc., (the "Company") (NASDAQ: RBKB),
the holding company of Rhinebeck
Bank (the "Bank"), reported net income for the three months
ended September 30, 2019 of
$2.1 million ($0.20 per basic and diluted share), $127,000, or 6.5%, more than $2.0 million for the comparable prior year
period, and $4.2 million
($0.39 per basic and diluted share)
for the nine months ended September 30,
2019, which is $1.1 million,
or 33.7%, greater than $3.2 million
for the same period last year.
On January 16, 2019, the Company
became the holding company for the Bank when it closed its stock
offering in connection with the completion of the reorganization of
the Bank and Rhinebeck Bancorp, MHC into a two-tier mutual holding
company form of organization. The Company sold 4,787,315
shares of common stock at a price of $10.00 per share, for net proceeds of
$46.0 million, and issued 6,345,975
shares to Rhinebeck Bancorp, MHC. The consolidated financial
results contained herein reflect the consolidated accounts of the
Company and the Bank at and for the three and nine month periods
ended September 30, 2019 and
Rhinebeck Bancorp, MHC and the Bank for the same periods ended
September 30, 2018 and at
December 31, 2018.
Other financial highlights:
- Total assets grew $63.6 million,
or 7.2%, to $946.0 million from
December 31, 2018.
- Net loans increased a total of $80.6
million, or 11.9%, to $759.0
million from year end 2018.
- Total deposit balances were $770.0
million at September 30, 2019,
increasing $85.6 million, or 12.5%,
during the nine months then ended.
- Return on average assets was 0.90% for the three month period
ended September 30, 2019 compared to
0.97% for the corresponding period of 2018. Return on average
assets was 0.63% for the nine month period ended September 30, 2019 compared to 0.55% for the
comparable prior year period.
- Return on average equity was 7.78% for the third quarter 2019
compared to 13.80% for the same period of 2018. Return on average
equity was 5.56% for the nine month period ended September 30, 2019 compared to 7.64% for the same
period of 2018.
Michael J. Quinn, President and
Chief Executive Officer, said: "We are pleased with the progress
made this year in our goals of growing our balance sheet through
growth of both loans and deposits while improving our overall net
income. Additionally, our efforts to improve loan quality and
our efficiency ratio continued during the quarter."
Income Statement Analysis
Net interest income increased $734,000, or 9.5%, to $8.5
million for the three months ended September 30, 2019, from $7.7 million for the three months ended
September 30, 2018. Year to date net
interest income increased $3.1
million, or 14.7%, over the same timeframe in 2018, to
$24.0 million. In both comparable
periods, interest income increases were mostly driven by increasing
originations of higher yielding indirect automobile loans
accompanied by additional production of commercial real estate
loans while increases in deposit pricing and borrowing costs were
primarily driven by competitive market forces and the changing
interest rate environment.
Our net interest margin declined 25 basis points to 3.85% when
comparing between quarters and declined 9 basis points to 3.80%
when looking at the respective nine month periods.
We recorded $450,000 in provision
for loan losses for the third quarter 2019 and $2.0 million for the first nine months of 2019 as
compared to $525,000 and $1.6 million, respectively, for the comparable
prior year periods. Net charge-offs for the quarter
ended September 30, 2019 totaled $405,000, and year to date totaled $753,000, compared to $154,000 and $722,000, for the respective periods in
2018.
Non-interest income totaled $1.5
million for the three months ended September 30, 2019; a decrease of $39,000, or 2.6%, from the comparable period in
the prior year. Year to date 2019, non-interest income
totaled $4.2 million, an increase of
$526,000, or 14.5%. A new
deposit fee schedule, retail operating improvements and significant
growth in investment advisory income at our Rhinebeck Asset
Management ("RAM") division were primary drivers of this outcome.
An other real estate owned ("OREO") write-down that occurred in the
first quarter of 2018, of $387,000,
also improved the nine month period's 2019 comparative
performance.
For the third quarter of 2019, non-interest expenses increased
$359,000 to $6.8 million, over the comparable 2018
period. Salaries and employee benefits increased $343,000, or 9.5%, attributable to annual salary
merit increases, production incentives, employee benefit increases
and additions to staff. The growth of other general operating
expenses was mainly due to increases in overall processing volumes,
the additions of new technologies and equipment, and additional
costs related to our new status as a public company. For the
nine months ended September 30, 2019,
non-interest expenses increased $1.6
million, or 8.1% to $20.8
million, as compared to the first nine months of last
year. Year to date salaries and employee benefits increased
$1.4 million, or 13.3%. In
2019, both comparative periods were positively impacted by a large
reduction in our FDIC assessment and the recovery of foreclosure
expenses of $115,000. Non-recurring
expenses in 2018 for additional funds to prepare a foreclosure
property for sale and an impairment loss of $95,000 related to RAM helped improve comparative
results.
Balance Sheet Analysis
Total assets were $946.0 million
at September 30, 2019, representing
an increase of $63.6 million, or
7.2%, from $882.4 million at
December 31, 2018. Cash and due from
banks decreased $32.2 million during
the period primarily as a result of a return of $41.1 million in unfulfilled offering
subscriptions in January 2019. The
available for sale securities balance increased $14.4 million mostly due to $28.4 million in mortgage-backed securities
purchases partially offset by sales and calls of $5.6 million and principal payments and
maturities of $12.0 million. Net
loans increased $80.6 million, or
11.9%, including an increase of $55.7
million in indirect automobile loan balances due to
production of $160.7 million of those
loans since year end. During the first nine months of this year,
commercial real estate balances increased by $22.6 million or 10.2%.
Past due loans increased $3.8
million, or 30.4%, between year end and September 30, 2019 finishing at 2.1% of total
loans, or $16.2 million. During
the same timeframe non-performing assets rose $2.9 million or 39.7%, to $10.3 million. Our reserve as a percentage of
total gross loans was 1.04% at September 30,
2019.
Premises and equipment increases reflect the recent purchase of
the building in Goshen which
houses our branch operation for $1.8
million.
Total liabilities increased $14.7
million, or 1.8%, to $837.8
million mainly due to an $85.6
million, or 12.5%, increase in deposits, an increase of
$16.3 million in Federal Home Loan
Bank advances, offset by a $5.0
million line of credit pay-down and the release of
$89.0 million in gross subscription
offering proceeds in January
2019.
Stockholders' equity increased $49.0
million to $108.3 million,
primarily due to proceeds from the common stock offering of
$46.0 million. At September 30, 2019, the Company's ratio of
stockholders' equity-to-total assets was 11.4%, compared to 6.7% at
December 31, 2018.
About Rhinebeck Bancorp
Rhinebeck Bancorp, Inc. is a Maryland corporation organized as the mid-tier
holding company of Rhinebeck Bank
and is itself the majority-owned subsidiary of Rhinebeck Bancorp,
MHC. The Bank is a New York
chartered stock savings bank which provides a full range of banking
and financial services to consumer and commercial customers through
its eleven branches and two representative offices located in
Dutchess, Ulster, Orange, and Albany counties in New York State. Financial services
including comprehensive brokerage, investment advisory services,
financial product sales and employee benefits are offered through
Rhinebeck Asset Management, a division of the Bank.
Forward Looking Statements
This press release contains certain forward-looking statements
about the Company and the Bank. Forward-looking statements
include statements regarding anticipated future events or results
and can be identified by the fact that they do not relate strictly
to historical or current facts. They often include words such
as "believe", "expect", "anticipate", "estimate", "intend",
"predict", "forecast", "improve", "continue", "will", "would",
"should", "could", or "may". Forward-looking statements, by
their nature, are subject to risks and uncertainties. Certain
factors that could cause actual results to differ materially from
expected results include increased competitive pressures, changes
in the interest rate environment, general economic conditions or
conditions within the securities markets, and legislative and
regulatory changes that could adversely affect the business in
which the Company and the Bank are engaged. Rhinebeck
Bancorp, Inc. undertakes no obligation to revise these
forward-looking statements or to reflect events or circumstances
after the date of this press release.
The Company's summary consolidated statements of income and
financial condition and other data follow:
Rhinebeck
Bancorp, Inc. and Subsidiary
|
Consolidated
Statements of Comprehensive Income
|
(Dollars in
thousands, except share and per share data)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
Interest and
Dividend Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
10,160
|
|
$
|
8,570
|
|
$
|
28,276
|
|
$
|
22,713
|
|
Interest and dividends
on securities
|
|
|
655
|
|
|
578
|
|
|
1,976
|
|
|
1,762
|
|
Other income
|
|
|
10
|
|
|
5
|
|
|
51
|
|
|
14
|
|
Total interest and
dividend income
|
|
|
10,825
|
|
|
9,153
|
|
|
30,303
|
|
|
24,489
|
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on
deposits
|
|
|
1,957
|
|
|
1,112
|
|
|
4,980
|
|
|
2,927
|
|
Interest expense on
borrowings
|
|
|
404
|
|
|
311
|
|
|
1,368
|
|
|
673
|
|
Total interest
expense
|
|
|
2,361
|
|
|
1,423
|
|
|
6,348
|
|
|
3,600
|
|
Net interest
income
|
|
|
8,464
|
|
|
7,730
|
|
|
23,955
|
|
|
20,889
|
|
Provision for loan
losses
|
|
|
450
|
|
|
525
|
|
|
2,010
|
|
|
1,575
|
|
Net interest income
after provision for loan losses
|
|
|
8,014
|
|
|
7,205
|
|
|
21,945
|
|
|
19,314
|
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
|
|
729
|
|
|
785
|
|
|
2,141
|
|
|
2,030
|
|
Net realized loss on
sales and calls of securities
|
|
|
—
|
|
|
(21)
|
|
|
(40)
|
|
|
(22)
|
|
Net gain on sales of
loans
|
|
|
159
|
|
|
167
|
|
|
367
|
|
|
435
|
|
Increase in cash
surrender value of life insurance
|
|
|
100
|
|
|
101
|
|
|
300
|
|
|
300
|
|
Write-downs of other
real estate owned
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(387)
|
|
Other real estate owned
income
|
|
|
8
|
|
|
11
|
|
|
19
|
|
|
32
|
|
Investment advisory
income
|
|
|
225
|
|
|
225
|
|
|
767
|
|
|
557
|
|
Other
|
|
|
238
|
|
|
230
|
|
|
602
|
|
|
685
|
|
Total noninterest
income
|
|
|
1,459
|
|
|
1,498
|
|
|
4,156
|
|
|
3,630
|
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
|
3,944
|
|
|
3,601
|
|
|
11,915
|
|
|
10,520
|
|
Occupancy
|
|
|
838
|
|
|
818
|
|
|
2,631
|
|
|
2,572
|
|
Data
processing
|
|
|
353
|
|
|
283
|
|
|
1,003
|
|
|
851
|
|
Professional
fees
|
|
|
361
|
|
|
217
|
|
|
987
|
|
|
635
|
|
Marketing
|
|
|
166
|
|
|
148
|
|
|
468
|
|
|
532
|
|
FDIC deposit insurance
and other insurance
|
|
|
29
|
|
|
229
|
|
|
317
|
|
|
608
|
|
Other real estate owned
expense
|
|
|
73
|
|
|
101
|
|
|
111
|
|
|
184
|
|
Amortization of
intangible assets
|
|
|
10
|
|
|
11
|
|
|
32
|
|
|
32
|
|
Impairment loss on
goodwill
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
Other
|
|
|
1,058
|
|
|
1,065
|
|
|
3,334
|
|
|
3,211
|
|
Total noninterest
expense
|
|
|
6,832
|
|
|
6,473
|
|
|
20,798
|
|
|
19,240
|
|
Income before income
taxes
|
|
|
2,641
|
|
|
2,230
|
|
|
5,303
|
|
|
3,704
|
|
Provision for
income taxes
|
|
|
550
|
|
|
266
|
|
|
1,080
|
|
|
545
|
|
Net income
|
|
$
|
2,091
|
|
$
|
1,964
|
|
$
|
4,223
|
|
$
|
3,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.20
|
|
$
|
—
|
|
$
|
0.39
|
|
$
|
—
|
|
Diluted
|
|
$
|
0.20
|
|
$
|
—
|
|
$
|
0.39
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, basic
|
|
|
10,710,500
|
|
|
—
|
|
|
10,705,046
|
|
|
—
|
|
Weighted average
shares outstanding, diluted
|
|
|
10,710,500
|
|
|
—
|
|
|
10,705,046
|
|
|
—
|
|
Rhinebeck
Bancorp, Inc. and Subsidiary
|
Consolidated
Statements of Financial Condition
|
(Dollars in
thousands, except share and per share data)
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
2019
|
|
2018
|
|
|
|
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
18,356
|
|
$
|
50,590
|
|
Available for sale
securities (at fair value)
|
|
|
115,705
|
|
|
101,312
|
|
Loans receivable (net
of allowance for loan losses of $7,903 and $6,646,
respectively)
|
|
|
758,999
|
|
|
678,402
|
|
Federal Home Loan
Bank stock
|
|
|
2,608
|
|
|
1,883
|
|
Accrued interest
receivable
|
|
|
2,793
|
|
|
2,523
|
|
Cash surrender value
of life insurance
|
|
|
18,359
|
|
|
18,018
|
|
Deferred tax assets
(net of valuation allowance of $1,210 and $1,085,
respectively)
|
|
|
2,340
|
|
|
2,934
|
|
Premises and
equipment, net
|
|
|
18,571
|
|
|
17,040
|
|
Other real estate
owned
|
|
|
1,505
|
|
|
1,685
|
|
Goodwill
|
|
|
1,410
|
|
|
1,410
|
|
Intangible assets,
net
|
|
|
252
|
|
|
284
|
|
Other
assets
|
|
|
5,129
|
|
|
6,342
|
|
Total
assets
|
|
$
|
946,027
|
|
$
|
882,423
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
Noninterest
bearing
|
|
$
|
179,924
|
|
$
|
171,829
|
|
Interest
bearing
|
|
|
590,061
|
|
|
512,589
|
|
Total
deposits
|
|
|
769,985
|
|
|
684,418
|
|
|
|
|
|
|
|
|
|
Mortgagors' escrow
accounts
|
|
|
3,693
|
|
|
7,725
|
|
Advances from the
Federal Home Loan Bank
|
|
|
47,936
|
|
|
31,598
|
|
Subordinated
debt
|
|
|
5,155
|
|
|
5,155
|
|
Other
borrowings
|
|
|
—
|
|
|
5,000
|
|
Subscription offering
proceeds
|
|
|
—
|
|
|
79,142
|
|
Accrued expenses and
other liabilities
|
|
|
11,003
|
|
|
10,108
|
|
Total
liabilities
|
|
|
837,772
|
|
|
823,146
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
Common stock (par
value $0.01 per share; 25,000,000 authorized, 11,133,290 issued
and
outstanding)
|
|
|
111
|
|
|
—
|
|
Additional paid-in
capital
|
|
|
45,865
|
|
|
100
|
|
Unallocated common
stock held by the employee stock ownership plan
|
|
|
(4,200)
|
|
|
—
|
|
Retained
earnings
|
|
|
70,412
|
|
|
66,189
|
|
Accumulated other
comprehensive loss:
|
|
|
|
|
|
|
|
Net unrealized loss on
available for sale securities, net of taxes
|
|
|
363
|
|
|
(2,576)
|
|
Defined benefit pension
plan, net of taxes
|
|
|
(4,296)
|
|
|
(4,436)
|
|
Total accumulated
other comprehensive loss
|
|
|
(3,933)
|
|
|
(7,012)
|
|
Total stockholders'
equity
|
|
|
108,255
|
|
|
59,277
|
|
Total liabilities and
stockholders' equity
|
|
$
|
946,027
|
|
$
|
882,423
|
|
Rhinebeck
Bancorp, Inc. and Subsidiary
|
Selected
Ratios
|
|
|
|
Three Months ended
|
|
Nine Months
ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Performance
Ratios (1):
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (2)
|
|
0.90
|
%
|
0.97
|
%
|
0.63
|
%
|
0.55
|
%
|
Return on average
equity (3)
|
|
7.78
|
%
|
13.80
|
%
|
5.56
|
%
|
7.64
|
%
|
Net interest margin
(4)
|
|
3.85
|
%
|
4.10
|
%
|
3.80
|
%
|
3.89
|
%
|
Efficiency ratio
(5)
|
|
68.86
|
%
|
70.15
|
%
|
73.99
|
%
|
78.47
|
%
|
Average
interest-earning assets to average interest-
bearing liabilities
|
|
136.85
|
%
|
133.08
|
%
|
137.37
|
%
|
131.52
|
%
|
Loans to
deposits
|
|
98.33
|
%
|
94.12
|
%
|
98.33
|
%
|
94.12
|
%
|
Equity to assets
(6)
|
|
11.52
|
%
|
7.04
|
%
|
11.34
|
%
|
7.16
|
%
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses as a percent of total loans
|
|
|
|
|
|
1.04
|
%
|
0.97
|
%
|
Allowance for loan
losses as a percent of non-
performing loans
|
|
|
|
|
|
90.08
|
%
|
74.30
|
%
|
Net charge-offs to
average outstanding loans during
the period
|
|
|
|
|
|
0.10
|
%
|
0.12
|
%
|
Non-performing loans
as a percent of total loans
|
|
|
|
|
|
1.16
|
%
|
1.30
|
%
|
Non-performing assets
as a percent of total assets
|
|
|
|
|
|
1.09
|
%
|
1.25
|
%
|
|
|
|
|
|
|
|
|
|
|
Capital
Ratios (7):
|
|
|
|
|
|
|
|
|
|
Tier 1 capital (to
risk-weighted assets)
|
|
|
|
|
|
12.47
|
%
|
9.42
|
%
|
Total capital (to
risk-weighted assets)
|
|
|
|
|
|
13.44
|
%
|
10.31
|
%
|
Common equity Tier 1
capital (to risk-weighted
assets)
|
|
|
|
|
|
12.47
|
%
|
9.42
|
%
|
Tier 1 leverage ratio
(to average total assets)
|
|
|
|
|
|
11.01
|
%
|
8.24
|
%
|
|
(1)
|
Performance ratios
for the three and nine months ended September 30, 2019 and 2018 are
annualized.
|
(2)
|
Represents net income
divided by average total assets.
|
(3)
|
Represents net income
divided by average equity.
|
(4)
|
Represents net
interest income as a percent of average interest-earning
assets.
|
(5)
|
Represents
non-interest expense divided by the sum of net interest income and
non-interest income (Non-GAAP measure).
|
(6)
|
Represents average
equity divided by average total assets.
|
(7)
|
Capital ratios are
for Rhinebeck Bank only. Rhinebeck Bancorp, Inc. is not subject to
the minimum consolidated capital requirements as a small bank
holding company with assets less than $3.0 billion.
|
CONTACT: Michael J. Quinn,
President and Chief Executive Officer, TELEPHONE: (845)
790-1501
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SOURCE Rhinebeck Bancorp, Inc.