United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2021

or

   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from               to               

Commission File No. 001-38779


Rhinebeck Bancorp, Inc.

(Exact name of registrant as specified in its charter)


Maryland

    

83-2117268

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

2 Jefferson Plaza, Poughkeepsie, New York

12601

(Address of Principal Executive Offices)

(Zip Code)

(845) 454-8555

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $0.01 per share

RBKB

The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.

YES         NO  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES         NO  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer  

    

Accelerated filer  

Non-accelerated filer   

Smaller reporting company   

 

Emerging growth company   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES         NO   

As of May 1, 2021, there were 11,133,290 shares of the Registrant’s common stock, par value $0.01 per share, outstanding.


TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

1

Consolidated Statements of Financial Condition at March 31, 2021 and December 31, 2020

1

Consolidated Statements of Income for the three months ended March 31, 2021 and 2020

2

Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020

3

Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2021 and 2020

4

Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020

5

Notes to Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

35

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

45

Item 4.

Controls and Procedures

45

PART II. OTHER INFORMATION

46

Item 1.

Legal Proceedings

46

Item 1A.

Risk Factors

46

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

46

Item 3.

Defaults Upon Senior Securities

46

Item 4.

Mine Safety Disclosures

46

Item 5.

Other Information

46

Item 6.

Exhibits

47

SIGNATURES

48


PART I — FINANCIAL INFORMATION

ITEM 1.

Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands, except share and per share data)

March 31, 

December 31, 

    

2021

    

2020

Assets

Cash and due from banks

$

89,833

$

93,485

Available for sale securities (at fair value)

 

175,460

 

102,933

Loans receivable (net of allowance for loan losses of $11,261 and $11,633, respectively)

 

868,737

 

873,813

Federal Home Loan Bank stock

 

2,143

 

2,787

Accrued interest receivable

 

3,840

 

3,819

Cash surrender value of life insurance

 

18,631

 

18,877

Deferred tax assets (net of valuation allowance of $1,821 and $1,760, respectively)

 

4,122

 

3,703

Premises and equipment, net

 

18,933

 

18,839

Other real estate owned

 

89

 

139

Goodwill

 

2,235

 

1,410

Intangible assets, net

 

515

 

199

Other assets

 

12,500

 

8,825

Total assets

$

1,197,038

$

1,128,829

Liabilities and Stockholders’ Equity

 

  

 

  

Liabilities

 

  

 

  

Deposits

 

  

 

  

Noninterest bearing

$

272,617

$

244,344

Interest bearing

 

735,419

 

685,020

Total deposits

 

1,008,036

 

929,364

Mortgagors’ escrow accounts

 

7,280

 

8,494

Advances from the Federal Home Loan Bank

 

36,468

 

50,674

Subordinated debt

 

5,155

 

5,155

Accrued expenses and other liabilities

 

21,243

 

18,643

Total liabilities

 

1,078,182

 

1,012,330

Stockholders’ Equity

 

  

 

  

Preferred stock (par value $0.01 per share; 5,000,000 authorized, no shares issued)

Common stock (par value $0.01 per share; 25,000,000 authorized, 11,133,290 issued and outstanding)

 

111

 

111

Additional paid-in capital

 

46,188

 

46,038

Unearned common stock held by the employee stock ownership plan ("ESOP")

(3,873)

(3,928)

Retained earnings

 

81,390

 

78,069

Accumulated other comprehensive loss:

 

 

Net unrealized (loss) gain on available for sale securities, net of taxes

 

(177)

 

993

Defined benefit pension plan, net of taxes

 

(4,783)

 

(4,784)

Total accumulated other comprehensive loss

 

(4,960)

 

(3,791)

Total stockholders’ equity

 

118,856

 

116,499

Total liabilities and stockholders’ equity

$

1,197,038

$

1,128,829

See accompanying notes to consolidated financial statements

1


Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except share and per share data)

Three Months Ended March 31, 

    

2021

    

2020

Interest and Dividend Income

Interest and fees on loans

$

10,670

$

10,046

Interest and dividends on securities

 

363

 

683

Other income

 

19

 

11

Total interest and dividend income

 

11,052

 

10,740

Interest Expense

 

  

 

  

Interest expense on deposits

 

1,020

 

2,017

Interest expense on borrowings

 

250

 

402

Total interest expense

 

1,270

 

2,419

Net interest income

 

9,782

 

8,321

(Credit to) provision for loan losses

 

(69)

 

1,200

Net interest income after (credit to) provision for loan losses

 

9,851

 

7,121

Noninterest Income

 

  

 

  

Service charges on deposit accounts

 

609

 

652

Net realized loss on sales and calls of securities

 

 

(29)

Net gain on sales of loans

 

1,059

 

465

Increase in cash surrender value of life insurance

 

94

 

97

Gain on disposal of premises and equipment

 

17

 

Gain on life insurance

 

195

 

Investment advisory income

 

217

 

312

Other

 

50

 

63

Total noninterest income

 

2,241

 

1,560

Noninterest Expense

 

  

 

  

Salaries and employee benefits

 

4,592

 

4,152

Occupancy

 

954

 

850

Data processing

 

395

 

354

Professional fees

 

408

 

322

Marketing

 

88

 

143

FDIC deposit insurance and other insurance

 

171

 

168

Other real estate owned expense

 

1

 

17

Amortization of intangible assets

 

13

 

11

Other

 

1,331

 

1,282

Total noninterest expense

 

7,953

 

7,299

Income before income taxes

 

4,139

 

1,382

Provision for income taxes

 

818

 

307

Net income

$

3,321

$

1,075

Earnings per common share:

Basic

$

0.31

$

0.10

Diluted

$

0.31

$

0.10

Weighted average shares outstanding, basic

10,743,234

10,721,413

Weighted average shares outstanding, diluted

10,875,116

10,721,413

See accompanying notes to consolidated financial statements

2


Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands, except share and per share data)

Three Months Ended March 31, 

    

2021

    

2020

Net Income

$

3,321

$

1,075

Other Comprehensive Income:

 

 

Unrealized holding (losses) gains arising during the period

 

(1,481)

 

3,272

Reclassification adjustment for losses included in net realized loss on sales and calls of securities on the consolidated statements of income

 

 

29

Net unrealized (losses) gains on available for sale securities

 

(1,481)

 

3,301

Tax effect (a)

 

311

 

(694)

Unrealized (losses) gains on available for sale securities, net of tax

 

(1,170)

 

2,607

Defined benefit pension plan:

 

  

 

  

Actuarial (losses) gains arising during the period

 

(89)

 

280

Reclassification adjustment for amortization of net actuarial losses (b)

 

90

 

71

Total

 

1

 

351

Tax effect (c)

 

 

(73)

Defined benefit pension plan gains, net of tax

 

1

 

278

Other comprehensive (loss) income

 

(1,169)

 

2,885

Total Comprehensive Income

$

2,152

$

3,960


(a)

Includes $0 and $6 for the three months ended March 31, 2021 and 2020, respectively, for tax effect of realized losses which are included in the provision for income taxes on the consolidated statements of income.

(b)

Included in other noninterest expense on the consolidated statements of income.

(c)

Includes $19 and $15 for the three months ended March 31, 2021, respectively, for tax effect of amortization of net actuarial loss included in the provision for income taxes on the consolidated statements of income.

See accompanying notes to consolidated financial statements

3


Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(Dollars in thousands, except share and per share data)

Unearned

Accumulated

 

Additional

Common

Other

Common

Paid-in

Stock Held

Retained

Comprehensive

    

Stock

    

Capital

by the ESOP

    

Earnings

    

Loss

    

Total

Balance at December 31, 2019

$

111

$

45,869

$

(4,146)

$

72,152

$

(4,104)

$

109,882

 

  

 

  

 

  

 

  

 

  

 

Net income

 

 

 

 

1,075

 

 

1,075

Other comprehensive income

 

 

 

 

2,885

 

2,885

ESOP shares committed to be allocated

 

 

 

55

 

 

 

55

 

  

 

  

 

  

 

  

 

  

 

Balance at March 31, 2020

$

111

$

45,869

$

(4,091)

$

73,227

$

(1,219)

$

113,897

 

  

 

  

 

  

 

  

 

  

 

Balance at December 31, 2020

$

111

$

46,038

$

(3,928)

$

78,069

$

(3,791)

$

116,499

 

  

 

  

 

  

 

  

 

  

 

Net income

 

 

 

 

3,321

 

 

3,321

Other comprehensive loss

 

 

 

 

 

(1,169)

 

(1,169)

ESOP shares committed to be allocated

(3)

55

52

Share-based compensation expense

 

 

153

 

 

 

 

153

 

  

 

  

 

  

 

  

 

  

 

Balance at March 31, 2021

$

111

$

46,188

$

(3,873)

$

81,390

$

(4,960)

$

118,856

See accompanying notes to consolidated financial statements

4


Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands, except share and per share data)

Three Months Ended March 31, 

    

2021

    

2020

Cash Flows from Operating Activities

Net income

$

3,321

$

1,075

Adjustments to reconcile net income to net cash provided by operating activities:

 

  

 

  

Amortization and accretion of premiums and discounts on investments, net

 

26

 

110

Net realized loss on sales and calls of securities

 

 

29

(Credit to) provision for loan losses

 

(69)

 

1,200

Loans originated for sale

 

(24,437)

 

(15,335)

Proceeds from sale of loans

 

25,788

 

16,850

Net gain on sale of loans

 

(1,059)

 

(254)

Amortization of intangible assets

 

13

 

11

Depreciation and amortization

 

321

 

328

Gain from disposal of premises and equipment

 

(17)

 

Deferred income tax benefit

 

(109)

 

(53)

Increase in cash surrender value of insurance

 

(95)

 

(97)

Increase in accrued interest receivable

 

(21)

 

(199)

Expense of earned ESOP shares

 

52

 

55

Share-based compensation expense

153

Increase in other assets

 

(3,665)

 

(6,008)

Increase in accrued expenses and other liabilities

 

2,421

 

6,047

Net cash provided by operating activities

 

2,623

 

3,759

Cash Flows from Investing Activities

 

  

 

  

Proceeds from sales and calls of securities

 

2,000

 

6,996

Proceeds from maturities and principal repayments of securities

 

12,390

 

6,009

Purchases of securities

 

(88,424)

 

(10,146)

Net sales (purchases) of FHLB Stock

 

644

 

(600)

Net decrease (increase) in loans

 

4,853

 

(19,351)

Purchases of bank premises and equipment

 

(285)

 

(493)

Net proceeds from life insurance

341

Net cash received on acquisition (Note 2)

32,767

Net increase of other real estate owned

 

 

(16)

Proceeds from sale of other real estate owned

 

50

 

51

Net cash used in investing activities

 

(35,664)

 

(17,550)

Cash Flows from Financing Activities

 

  

 

  

Net increase (decrease) in demand deposits, NOW, money market and savings accounts

 

53,343

 

(629)

Net (decrease) increase in time deposits

 

(8,534)

 

11,941

Decrease in mortgagors' escrow accounts

 

(1,214)

 

(1,043)

Net (decrease) increase in short-term debt

 

(12,093)

 

2,861

Net (decrease) increase in long-term debt

 

(2,113)

 

10,479

Net cash provided by financing activities

 

29,389

 

23,609

Net (decrease) increase in cash and due from banks

 

(3,652)

 

9,818

Cash and Due from Banks

 

  

 

  

Beginning balance

 

93,485

 

11,978

Ending balance

$

89,833

$

21,796

Supplemental Disclosures of Cash Flow Information

 

  

 

  

Cash paid for:

 

  

 

  

Cash paid for interest

$

1,275

$

2,445

Cash (benefit) paid for income taxes

$

(3)

$

3

Noncash Investing Activities

 

  

 

  

Fair value of assets acquired

$

1,277

$

Fair value of liabilities assumed

$

(34,044)

$

See accompanying notes to consolidated financial statements

5


Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

1.    Nature of Business and Significant Accounting Policies

The financial statements include accounts of Rhinebeck Bancorp, Inc. (the “Company”), a stock holding company, and its wholly-owned subsidiary, Rhinebeck Bank (the “Bank”), a New York chartered stock savings bank. The primary purpose of the Company is to act as a holding company for the Bank. The Bank provides a full range of banking and financial services to consumer and commercial customers through its thirteen active branches and two representative offices located in Dutchess, Ulster, Orange, and Albany counties. Financial services, including investment advisory and financial product sales, are offered through a division of the Bank doing business as Rhinebeck Asset Management (“RAM”).

The unaudited consolidated financial statements reflect all adjustments, which in the opinion of management, are necessary for a fair presentation of the results of the interim periods and are of a normal and recurring nature. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or for any other period.

The unaudited financial statements and other financial information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements, and related notes, of Rhinebeck Bancorp, Inc. and Rhinebeck Bank at and for the year ended December 31, 2020 contained in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 25, 2021.

For more information regarding the Company’s significant accounting policies, see the Notes to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission. As of March 31, 2021, the critical accounting policies of the Company have not changed materially from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020, with the exception of the addition of the derivative financial instruments.  See Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operation – Critical Accounting Policies.”

Basis of Financial Statements Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the consolidated statements of financial condition and reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of securities and other real estate owned, the evaluation of investment securities for other-than-temporary impairment, the evaluation of goodwill for impairment, the valuation of deferred tax assets and the determination of pension obligations.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

On March 12, 2021, the Company completed a branch purchase and assumption transaction with ConnectOne Bancorp, Inc. Management concluded that the acquisition represented a business combination, which is accounted for using the acquisition method, with the results of operations included in the Company’s consolidated financial statements as of the acquisition date. For additional information, see Note 2.

6


Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

Reclassifications

Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year’s presentation.

COVID-19

Significant progress has been made to combat the outbreak of COVID-19; however, the global pandemic has adversely impacted a broad range of industries in which the Company's customers operate and could still impair their ability to fulfill their financial obligations to the Company. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions.  If there is a resurgence in the virus, the Company could experience further adverse effects on its business, financial condition, results of operations and cash flows. It is not possible to know the full extent of the impact of COVID-19 and the effects it will have on the Company's future operations.

Impact of Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13 on “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This ASU requires credit losses on most financial assets be measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss (“CECL”) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications unless reasonable expectation of a troubled debt restructuring exists) from the date of initial recognition of that instrument. The measurement of expected credit losses is based upon relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. On October 16, 2019, the FASB approved a delay for conversion to the CECL methodology to January 2023 for smaller reporting companies, other public business entities, private companies and non-profits. The Company is currently assessing the effect of ASU No. 2016-13 and has engaged with a software vendor to assist in its efforts.

 

Emerging Growth Company Status

As an emerging growth company, the Company may delay adoption of new or revised financial accounting standards until such date that the standards are required to be adopted by non-issuer companies. If such standards would not apply to non-issuer companies, no deferral would be applicable. The Company is taking advantage of the benefits of the extended transition periods allowed under the Jumpstart Our Business Startups Act.

Accordingly, the Company’s consolidated financial statements may not be comparable to those of public companies that adopt new or revised financial accounting standards as of an earlier date. The effective dates of the recent accounting standards reflect those that relate to non-issuer companies.

7


Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

2.    Acquisition

On October 26, 2020, the Bank entered into a branch purchase and assumption agreement with ConnectOne Bank, the wholly-owned subsidiary of ConnectOne Bancorp, Inc., to acquire two branches located in Orange County, New York, as well as certain deposits and other assets and liabilities. The transaction closed on March 12, 2021 with the transfer of $33,863 of deposits. Management concluded that the acquisition represented a business combination, which is accounted for using the acquisition method, with the results of operations included in the Company’s consolidated financial statements as of the acquisition date.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the March 12, 2021 transaction with ConnectOne, and reflects all adjustments made to the fair value of the opening balance sheet through March 31, 2021:

March 12,

Fair value of consideration transferred, assets acquired and liabilities assumed

2021

Total cash received on acquisition

$

32,767

Assets acquired

Fixed assets

113

Reimbursed expenses

9

Core deposit intangible(1)

330

Total assets acquired

452

Liabilities assumed

Deposits

33,863

Mark-to-market adjustment

181

Total liabilities assumed

34,044

Net liabilities acquired

(33,592)

Goodwill recognized

$

825

______________________________________

(1) The core deposit intangible was determined to have an estimated life of approximately 13 years.

The Company incurred $71 in expenses related to the acquisition during the three months ended March 31, 2021. Acquisition expenses, including professional fees, are included in the total noninterest expense line item in the condensed consolidated statement of income.

8


Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

3.    Investment Securities

The amortized cost, gross unrealized gains and losses and fair values of available for sale securities are as follows:

March 31, 2021

Gross

Gross

Unrealized

Unrealized

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

U.S. Treasury securities

$

45,587

$

$

(288)

$

45,299

U.S. government agency mortgage-backed securities–residential

112,061

1,095

(1,062)

112,094

U.S. government agency securities

 

6,009

 

126

 

(27)

 

6,108

Municipal securities(1)

 

5,507

 

20

 

(47)

 

5,480

Corporate bonds

 

5,900

 

44

 

(44)

 

5,900

Other

 

620

 

 

(41)

 

579

Total

$

175,684

$

1,285

$

(1,509)

$

175,460

    

December 31, 2020

Gross

Gross

Unrealized

Unrealized

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

U.S. government agency mortgage-backed securities–residential

$

88,197

$

1,350

$

(277)

$

89,270

U.S. government agency securities

7,013

 

148

 

 

7,161

Municipal securities(1)

 

1,445

 

31

 

 

1,476

Corporate bonds

4,400

 

49

 

(3)

 

4,446

Other

621

 

 

(41)

 

580

Total

$

101,676

$

1,578

$

(321)

$

102,933


(1)

The issuers of municipal securities are all within New York State.

The following table presents the fair value and unrealized losses of the Company’s available for sale securities with gross unrealized losses aggregated by the length of time the individual securities have been in a continuous unrealized loss position:

March 31, 2021

Less Than 12 Months

12 Months or Longer

Total

Unrealized

Unrealized

Unrealized

    

Fair Value

    

Losses

    

Fair Value

    

Losses

    

Fair Value

    

Losses

U.S. Treasury securities

$

45,299

$

(288)

$

$

$

45,299

$

(288)

U.S. government agency mortgage-backed securities-residential

58,700

(1,059)

115

(3)

58,815

(1,062)

U.S. government agency securities

971

(27)

971

(27)

Municipal Securities

4,172

(47)

4,172

(47)

Corporate Bonds

3,606

(44)

3,606

(44)

Other

522

(41)

522

(41)

Total

$

113,270

$

(1,506)

$

115

$

(3)

$

113,385

$

(1,509)

9


Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

    

December 31, 2020

Less Than 12 Months

12 Months or Longer

Total

Unrealized

Unrealized

Unrealized

    

Fair Value

    

Losses

    

Fair Value

    

Losses

    

Fair Value

    

Losses

U.S. government agency mortgage-backed securities-residential

$

30,243

$

(269)

$

293

$

(8)

$

30,536

$

(277)

Corporate Bonds

747

(3)

747

(3)

Other

522

(41)

522

(41)

Total

$

31,512

$

(313)

$

293

$

(8)

$

31,805

$

(321)

At March 31, 2021, the Company had 89 individual available-for-sale securities in an unrealized loss position with unrealized losses totaling $1,509 with an aggregate depreciation of 1.33% from the Company’s amortized cost.

Management believes that none of the unrealized losses on available for sale securities are other-than-temporary because substantially all of the unrealized losses in the Company’s investment portfolio relate to market interest rate changes on debt and mortgage-backed securities issued either directly by the government or from government sponsored enterprises. The Company does not intend to sell the securities and it is not likely that the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity; therefore, the Company did not consider those investments to be other-than-temporarily impaired at March 31, 2021.

The amortized cost and fair value of available for sale debt securities at March 31, 2021 and December 31, 2020, by contractual maturities, are presented below. Actual maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the securities may be called or repaid without any penalties. Because mortgage-backed securities are not due at a single maturity date, they are not included in the maturity categories in the following maturity summary:

March 31, 2021

December 31, 2020

    

Amortized Cost

    

Fair Value

    

Amortized Cost

    

Fair Value

Maturity:

Within 1 year

$

10,216

$

10,210

$

102

$

102

After 1 but within 5 years

 

34,511

 

34,367

 

2,155

 

2,155

After 5 but within 10 years

 

16,871

 

16,807

 

9,946

 

10,162

After 10 years

 

1,405

 

1,403

 

655

 

664

Total Maturities

 

63,003

 

62,787

 

12,858

 

13,083

Mortgage-backed securities

 

112,061

 

112,094

 

88,197

 

89,270

Other

 

620

 

579

 

621

 

580

Total

$

175,684

$

175,460

$

101,676

$

102,933

At March 31, 2021 and December 31, 2020, available for sale securities with a carrying value of $15,517 and $18,123, respectively, were pledged to secure Federal Home Loan Bank of New York (“FHLB”) borrowings. In addition, at March 31, 2021 and December 31, 2020, $9,646 and $1,059 of available for sale securities were pledged to secure borrowings at the Federal Reserve Bank of New York (“FRB”), respectively.

During the three months ended March 31, 2021, there was $2,000 in proceeds from the sales of available for sale securities with no gross gains or losses realized.  

10


Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

4.    Loans and Allowance for Loan Losses

A summary of the Company’s loan portfolio is as follows:

March 31, 

December 31, 

    

2021

    

2020

Commercial real estate loans:

 

 

  

Construction

$

5,433

$

5,392

Non-residential

 

240,848

 

248,349

Multi-family

 

39,420

 

30,379

Residential real estate loans

 

37,477

 

39,239

Commercial and industrial loans(1)

 

161,908

 

154,016

Consumer loans:

 

  

 

  

Indirect automobile

 

365,741

 

376,260

Home equity

 

13,435

 

14,165

Other consumer

 

8,447

 

8,816

Total gross loans

 

872,709

 

876,616

Net deferred loan costs

 

7,289

 

8,830

Allowance for loan losses

 

(11,261)

 

(11,633)

Total net loans

$

868,737

$

873,813


(1)

Includes $92,080 and $75,366 in U.S. Small Business Administration (“SBA”), paycheck protection program (“PPP”) loans at March 31, 2021 and December 31, 2020, respectively.

At March 31, 2021 and December 31, 2020, the unpaid principal balances of loans held for sale, included in the residential real estate category above, were $2,426 and $2,718, respectively.

The following tables present the classes of the loan portfolio summarized by the pass category and the criticized and classified categories of special mention and substandard within the internal risk system:

March 31, 2021

    

Pass

    

Special Mention

    

Substandard

    

Total

Commercial real estate:

  

  

  

  

Construction

$

5,433

$

$

$

5,433

Non-residential

232,817

5,950

2,081

240,848

Multifamily

 

39,420

 

 

 

39,420

Residential real estate

 

34,893

 

 

2,584

 

37,477

Commercial and industrial

 

155,752

 

5,129

 

1,027

 

161,908

Consumer:

 

 

  

 

  

 

  

Indirect automobile

 

365,329

 

 

412

 

365,741

Home equity

 

13,000

 

 

435

 

13,435

Other consumer

 

8,387

 

 

60

 

8,447

Total

$

855,031

$

11,079

$

6,599

$

872,709

11


Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

    

December 31, 2020

    

Pass

    

Special Mention

    

Substandard

    

Total

Commercial real estate:

  

  

  

  

Construction

$

5,392

$

$

$

5,392

Non-residential

240,778

5,468

2,103

248,349

Multifamily

 

30,379

 

 

 

30,379

Residential real estate

 

36,597

 

 

2,642

 

39,239

Commercial and industrial

 

147,748

 

5,395

 

873

 

154,016

Consumer:

 

  

 

  

 

  

 

  

Indirect automobile

 

375,270

 

 

990

 

376,260

Home equity

 

13,819

 

 

346

 

14,165

Other consumer

 

8,768

 

 

48

 

8,816

Total

$

858,751

$

10,863

$

7,002

$

876,616

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The past due status of all classes of loans is determined based on contractual due dates for loan payments.

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans:

March 31, 2021

Greater Than

30-59 Days

60-89 Days

90 Days Past

Total Loans

    

Current

    

Past Due

    

Past Due

    

Due

    

Receivable

    

Non-accrual

Commercial real estate:

  

  

  

  

  

  

Construction

$

5,433

$

$

$

$

5,433

$

Non-residential

237,088

1,477

357

1,926

240,848

1,926

Multifamily

39,420

39,420

Residential real estate

 

35,472

 

757

 

100

 

1,148

 

37,477

 

2,584

Commercial and industrial

 

161,205

 

1

 

1

 

701

 

161,908

 

870

Consumer:

 

  

 

  

 

 

  

 

  

 

Indirect automobile

 

360,962

 

3,810

600

 

369

 

365,741

 

412

Home equity

 

12,920

 

 

178

 

337

 

13,435

 

435

Other consumer

 

8,330

 

45

 

12

 

60

 

8,447

 

60

Total

$

860,830

$

6,090

$

1,248

$

4,541

$

872,709

$

6,287

12


Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

December 31, 2020

Greater Than

30-59 Days

60-89 Days

90 Days Past

Total Loans

    

Current

    

Past Due

    

Past Due

    

Due

    

Receivable

    

Non-accrual

Commercial real estate:

  

  

  

  

  

  

Construction

$

5,392

$

$

$

$

5,392

$

Non-residential

244,387

1,985

33

1,944

248,349

1,944

Multifamily

30,379

30,379

Residential real estate

 

36,581

 

1,351

 

138

 

1,169

 

39,239

 

2,641

Commercial and industrial

 

151,771

 

1,551

 

511

 

183

 

154,016

 

366

Consumer:

 

  

 

  

 

 

  

 

  

 

Indirect automobile

 

367,929

 

6,321

 

1,063

 

947

 

376,260

 

990

Home equity

 

13,506

 

310

 

101

 

248

 

14,165