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What changed in Rhinebeck Bancorp, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Rhinebeck Bancorp, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+445 added−430 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-25)

Top changes in Rhinebeck Bancorp, Inc.'s 2025 10-K

445 paragraphs added · 430 removed · 316 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

158 edited+39 added−34 removed174 unchanged
Biggest changeThe allowance for credit losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ Percent of Percent of ​ ​ Percent of Percent of ​ ​ ​ ​ ​ Allowance ​ Loans in ​ ​ ​ ​ Allowance ​ Loans in ​ ​ ​ ​ ​ ​ to Total ​ Category to ​ ​ ​ ​ to Total ​ Category to ​ ​ ​ Amount ​ Allowance ​ Total Loans ​ Amount ​ Allowance ​ Total Loans ​ ​ ​ (Dollars in thousands) Residential real estate loans ​ $ 575 6.73 % 8.89 % $ 346 4.26 % 7.66 % Commercial real estate loans ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-residential ​ ​ 2,675 ​ 31.33 ​ 36.00 ​ ​ 2,329 ​ 28.67 ​ 32.17 ​ Multi-family ​ ​ 313 ​ 3.67 ​ 10.77 ​ ​ 387 ​ 4.76 ​ 8.27 ​ Construction ​ ​ — ​ — ​ 2.73 ​ ​ — ​ — ​ 2.00 ​ Commercial loans ​ 684 8.01 9.39 ​ 606 7.46 8.82 ​ Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ Indirect automobile ​ ​ 4,133 ​ 48.40 ​ 30.33 ​ ​ 4,348 ​ 53.52 ​ 39.09 ​ Home equity ​ ​ 84 ​ 0.98 ​ 1.19 ​ ​ 49 ​ 0.60 ​ 1.19 ​ Other consumer ​ ​ 75 ​ 0.88 ​ 0.70 ​ ​ 59 ​ 0.73 ​ 0.80 ​ Total allowance ​ $ 8,539 100.00 % 100.00 % $ 8,124 100.00 % 100.00 % ​ Investment Activities We have legal authority to invest in various types of investment securities and liquid assets, including U.S.
Biggest changeThe allowance for credit losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ ​ 2025 ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ Percent of ​ ​ ​ ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ Percent of ​ ​ ​ ​ ​ ​ ​ ​ Allowance ​ Loans in ​ ​ ​ ​ ​ Allowance ​ Loans in ​ ​ ​ ​ ​ ​ to Total ​ Category to ​ ​ ​ ​ ​ to Total ​ Category to ​ ​ ​ Amount ​ Allowance ​ Total Loans ​ ​ Amount ​ Allowance ​ Total Loans ​ ​ ​ (Dollars in thousands) Commercial real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-residential ​ $ 3,142 ​ 37.61 % 43.61 % ​ $ 2,675 ​ 31.33 % 36.00 % Multi-family ​ ​ 490 ​ 5.87 ​ 11.26 ​ ​ ​ 313 ​ 3.67 ​ 10.77 ​ Construction ​ ​ — ​ — ​ 0.94 ​ ​ ​ — ​ — ​ 2.73 ​ Commercial loans ​ 762 9.12 9.55 ​ ​ 684 8.01 9.39 ​ Residential real estate loans ​ ​ 739 8.85 ​ 10.45 ​ ​ ​ 575 6.73 ​ 8.89 ​ Consumer loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Indirect automobile ​ ​ 3,050 ​ 36.51 ​ 22.31 ​ ​ ​ 4,133 ​ 48.40 ​ 30.33 ​ Home equity ​ ​ 90 ​ 1.08 ​ 1.28 ​ ​ ​ 84 ​ 0.98 ​ 1.19 ​ Other consumer ​ ​ 80 ​ 0.96 ​ 0.60 ​ ​ ​ 75 ​ 0.88 ​ 0.70 ​ Total allowance ​ $ 8,353 100.00 % 100.00 % ​ $ 8,539 100.00 % 100.00 % ​ Investment Activities We have legal authority to invest in various types of investment securities and liquid assets, including U.S.
As required by statute, the federal banking agencies have adopted final regulations and Interagency Guidelines Establishing Standards for Safety and Soundness. The guidelines set forth the safety and soundness standards the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired.
Standards for Safety and Soundness. As required by statute, the federal banking agencies have adopted final regulations and Interagency Guidelines Establishing Standards for Safety and Soundness. The guidelines set forth the safety and soundness standards the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired.
Accordingly, if we engage in a merger or other acquisition, our controls designed to combat money laundering would be considered as part of the application process. We have established policies, procedures and systems designed to comply with the USA PATRIOT Act and other anti-money laundering and anti-terrorist financing statutes and their implementing regulations. Regulation of Brokered Deposits.
Accordingly, if we engage in a merger or other acquisition, our controls designed to combat money laundering would be considered as part of the application process. We have established policies, procedures and systems designed to comply with the BSA, USA PATRIOT Act, and other anti-money laundering and anti-terrorist financing statutes and their implementing regulations. Regulation of Brokered Deposits.
Vendors Single Interest Insurance, which is included on every automobile loan originated, protects the Bank against losses for physical damage to repossessed automobiles. Each dealer submits loan applications directly to us, and the borrower’s creditworthiness is the most important criterion we use in determining whether to approve the loan.
Vendors Single Interest Insurance, which is included on every automobile loan originated, protects us against losses for physical damage to repossessed automobiles. Each dealer submits loan applications directly to us, and the borrower’s creditworthiness is the most important criterion we use in determining whether to approve the loan.
The Change in Bank Control Act and its implementing regulations provide that no person or entity may acquire control of a bank holding company, such as Rhinebeck Bancorp, Inc., without the prior non-objection or approval of the Federal Reserve Board.
Acquisition. The Change in Bank Control Act and its implementing regulations provide that no person or entity may acquire control of a bank holding company, such as Rhinebeck Bancorp, Inc., without the prior non-objection or approval of the Federal Reserve Board.
We seek to meet this competition with convenient branch locations, emphasizing personalized banking and the advantage of local decision-making in our banking businesses. Specifically, we promote and maintain relationships and build customer loyalty within local communities by focusing our marketing and community involvement on the specific needs of individual neighborhoods.
We seek to meet this competition with convenient branch locations and online offerings, emphasizing personalized banking and the advantage of local decision-making in our banking businesses. Specifically, we promote and maintain relationships and build customer loyalty within local communities by focusing our marketing and community involvement on the specific needs of individual neighborhoods.
Management’s Discussion and Analysis of Financial Condition and Results of Operations— Significant Accounting Policies, Critical Accounting Estimates—Allowance for Credit Losses.” ​ Although we believe that we have established the allowance at appropriate levels, future additions may be necessary if economic or other conditions in the future differ from the current environment.
Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Estimates—Allowance for Credit Losses.” ​ Although we believe that we have established the allowance at appropriate levels, future additions may be necessary if economic or other conditions in the future differ from the current environment.
The Bank’s primary business activity is accepting deposits from the general public and using those funds together with borrowings, primarily to originate indirect automobile loans (automobile loans referred to us by automobile dealerships), commercial real estate loans (which includes multi-family real estate loans and commercial construction loans), commercial business loans and one- to four-family residential real estate loans, and to purchase investment securities.
Our primary business activity is accepting deposits from the general public and using those funds together with borrowings, primarily to originate commercial real estate loans (which includes multi-family real estate loans and commercial construction loans), commercial business loans and indirect automobile loans (automobile loans referred to us by automobile dealerships) and to purchase one- to four-family residential real estate loans and investment securities.
At December 31, 2024, this loan was performing according to its original terms. Commercial Construction and Land Development Loans. We originate loans to finance the construction of commercial properties, multi-family projects (including one- to four-family non-owner occupied residential properties) and professional complexes, or to acquire land for development for these purposes.
At December 31, 2025, this loan was performing according to its original terms. Commercial Construction and Land Development Loans. We originate loans to finance the construction of commercial properties, multi-family projects (including one- to four-family non-owner occupied residential properties) and professional complexes, or to acquire land for development for these purposes.
We will also obtain a Phase 1 report if the initial environmental reports indicate that there may be an environmental issue on a property. We require indemnification from our commercial real estate borrowers and/or guarantors for potential exposure to environmental issues. Commercial Business Loans.
We will also obtain a Phase 1 report if the initial environmental reports indicate that there may be an environmental issue on a property. We require indemnification from our commercial real estate borrowers and/or guarantors for potential exposure to environmental issues.
Interest received on non-accrual loans is applied against principal. Generally, residential and consumer loans are restored to accrual status when the obligation is brought current in accordance with the contractual terms for a reasonable period of time and ultimate collectability of total contractual principal and interest is no longer in doubt.
Interest received on non-accrual loans is applied against principal. Generally, loans are restored to accrual status when the obligation is brought current in accordance with the contractual terms for a reasonable period of time and ultimate collectability of total contractual principal and interest is no longer in doubt.
Our most direct competition for deposits has historically come from the numerous financial institutions operating in our market area (including other community and commercial banks and credit unions), many of which are significantly larger than we are and have greater resources.
Our most direct competition for deposits has historically come from the numerous financial institutions operating in our market area (including other community and commercial banks, credit unions and financial technology companies), many of which are significantly larger than we are and have greater resources.
We owned shares of FHLB common stock at December 31, 2024 equal to what we were required to own to maintain our membership in the FHLB system and was necessary to support the balance of our advances. We are required to purchase stock as our outstanding advances increase and sell stock as the size of borrowings decrease.
We owned shares of FHLB common stock at December 31, 2025 equal to what we were required to own to maintain our membership in the FHLB system and was necessary to support the balance of our advances. We are required to purchase stock as our outstanding advances increase and sell stock as the size of borrowings decrease.
She has over 30 years of financial services experience. She began her banking career at Rhinebeck Bank in 1994 as the Vice President of Sales. Age 58. ​ Kevin Nihill became the Chief Financial Officer and Treasurer of Rhinebeck Bank in July 2024. Prior to joining the Bank, Mr.
She has over 30 years of financial services experience. She began her banking career at Rhinebeck Bank in 1994 as the Vice President of Sales. Age 59. ​ Kevin Nihill became the Chief Financial Officer and Treasurer of Rhinebeck Bank in July 2024. Prior to joining the Bank, Mr.
The description is limited to certain material aspects of certain statutes and regulations that are addressed, and is not intended to be a complete list or description of such statutes and regulations and their effects on Rhinebeck Bancorp, Inc., Rhinebeck Bancorp, MHC and Rhinebeck Bank. New York Banking Laws and Supervision Supervision and Enforcement Authority.
The description is limited to certain material aspects of certain statutes and regulations that are addressed, and is not intended to be a complete list or description of such statutes and regulations and their effects on Rhinebeck Bancorp, Inc., Rhinebeck Bancorp, MHC and Rhinebeck Bank. New York Banking Regulation Supervision and Enforcement Authority.
Depending on the size of the loan or other extension of credit, prior approval of the Bank’s Board of Directors (with the interested party, if a director, abstaining from participating directly or indirectly in the voting) may be required. Federal Bank Regulation Supervision and Enforcement Authority.
Depending on the size of the loan or other extension of credit, prior approval of the Bank’s Board of Directors (with the interested party, if a director, abstaining from participating directly or indirectly in the voting) may be required. Federal Banking Regulation Supervision and Enforcement Authority.
Nihill served as Executive Vice President and Chief Financial Officer of St. Mary’s Bank, Manchester, New Hampshire beginning in 2021. Prior to joining St. Mary’s Bank, Mr. Nihill served as Senior Vice President, Treasurer of Berkshire Bank, Pittsfield, Massachusetts. Mr. Nihill is a Chartered Financial Analyst. Age 49. ​ James T.
Nihill served as Executive Vice President and Chief Financial Officer of St. Mary’s Bank, Manchester, New Hampshire beginning in 2021. Prior to joining St. Mary’s Bank, Mr. Nihill served as Senior Vice President, Treasurer of Berkshire Bank, Pittsfield, Massachusetts. Mr. Nihill is a Chartered Financial Analyst. Age 50. ​ James T.
At December 31, 2024, Rhinebeck Bank had no capital loss carryovers. Corporate Dividends. We may generally exclude from our income 100% of dividends received from Rhinebeck Bank as a member of the same affiliated group of corporations. As of December 31, 2024, no dividends had been paid by Rhinebeck Bank. Audit of Tax Returns.
At December 31, 2025, Rhinebeck Bank had no capital loss carryovers. Corporate Dividends. We may generally exclude from our income 100% of dividends received from Rhinebeck Bank as a member of the same affiliated group of corporations. As of December 31, 2025, no dividends had been paid by Rhinebeck Bank. Audit of Tax Returns.
We generally require properties securing these real estate loans to have debt service coverage ratios (the ratio of earnings before interest, taxes, depreciation, and amortization before debt service to debt service) of at least 1.20x. We obtain an environment report on all commercial real estate properties.
We generally require properties securing these real estate loans to have debt service coverage ratios (the ratio of earnings before interest, taxes, depreciation, and amortization before debt service to debt service) of at least 1.20x. We obtain an environmental report on all commercial real estate properties.
No allowance for credit losses for available-for-sale securities was recorded as of December 31, 2024. Portfolio Maturities and Yields. The following table sets forth the stated maturities and weighted average yields of investment securities at December 31, 2024. Weighted average yields are calculated by dividing the income by amortized cost.
No allowance for credit losses for available-for-sale securities was recorded as of December 31, 2025. Portfolio Maturities and Yields. The following table sets forth the stated maturities and weighted average yields of investment securities at December 31, 2025. Weighted average yields are calculated by dividing the income by amortized cost.
The statutory tax rate is currently 6.5% for general business taxpayers, and 7.25% for general business taxpayers with a business income base of more than $5,000,000. An alternative tax of 0.1875% on apportioned capital is imposed to the extent that it exceeds the tax on apportioned income.
The statutory tax rate is currently 6.5% for general business taxpayers, and 7.25% for general business taxpayers with a business income base of more than $5.0 million. An alternative tax of 0.1875% on apportioned capital is imposed to the extent that it exceeds the tax on apportioned income.
Additionally, all of our employees are expected to display and encourage honest, ethical, and respectful conduct in the workplace.
Additionally, all our employees are expected to display and encourage honest, ethical, and respectful conduct in the workplace.
The Company's methodology to estimate the allowance for credit losses has two components: (i) a collective reserve for estimated lifetime expected credit losses for pools of loans that share common risk characteristics and (ii) an individual reserve for loans that do not share common risk characteristics.
Our methodology to estimate the allowance for credit losses has two components: (i) a collective reserve for estimated lifetime expected credit losses for pools of loans that share common risk characteristics and (ii) an individual reserve for loans that do not share common risk characteristics.
For securities that do not meet these criteria, the Company evaluates whether the decline in fair value resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security.
For securities that do not meet these criteria, we evaluate whether the decline in fair value resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security.
Rhinebeck Bank’s most recent rating under New York’s community reinvestment law was “Satisfactory.” Consumer Protection and Fair Lending Regulations. Rhinebeck Bank is subject to a variety of federal and New York statutes and regulations that are intended to protect consumers and prohibit discrimination in the granting of credit.
Rhinebeck Bank’s most recent rating under New York’s community reinvestment law was “Satisfactory.” 28 Table of Contents Consumer Protection and Fair Lending Regulations. Rhinebeck Bank is subject to a variety of federal and New York statutes and regulations that are intended to protect consumers and prohibit discrimination in the granting of credit.
We offer financing to purchase land for development with a maximum loan-to-value ratio of 50%. 8 Table of Contents Before making a commitment to fund a commercial construction loan, we generally require an appraisal of the property by an independent licensed appraiser. The construction phase is carefully monitored to minimize our risk.
We offer financing to purchase land for development with a maximum loan-to-value ratio of 50%. Before making a commitment to fund a commercial construction loan, we generally require an appraisal of the property by an independent licensed appraiser. The construction phase is carefully monitored to minimize our risk.
Write downs of OREO that occur after the initial transfer from the loan portfolio and costs of holding the property are 12 Table of Contents recorded within other operating expenses, except for significant improvements, which are capitalized to the extent that the carrying value does not exceed estimated net realizable value.
Write downs of OREO that occur after the initial transfer from the loan portfolio and costs of holding the property are recorded within other operating expenses, except for significant improvements, which are capitalized to the extent that the carrying value does not exceed estimated net realizable value.
The Bank does not believe that it is taking or is subject to any action, condition or violation that could lead to termination of its deposit insurance. The USA PATRIOT Act.
The Bank does not believe that it is taking or is subject to any action, condition or violation that could lead to termination of its deposit insurance. The Bank Secrecy Act and the USA PATRIOT Act.
The CRA requires the FDIC, in connection with its examination of each state non-member bank, to assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by the institution, including applications to establish branches and acquire other financial institutions.
The CRA requires the FDIC, in connection with its examination of each state nonmember bank, to assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by the institution, including applications to establish branches and acquire other financial institutions.
Separately, any company that acquires control of a bank holding company, as “control” is defined in the federal Bank Holding Company Act and the Federal Reserve Board’s regulations, must receive the prior approval of the Federal Reserve Board and becomes a “bank holding company” subject to examination and regulation by the Federal Reserve Board. New York Holding Company Regulation.
Separately, any company that acquires control of a bank holding company, as “control” is defined in the federal Bank Holding Company Act and the Federal Reserve Board’s regulations, must receive the prior approval of the Federal Reserve Board and becomes a “bank holding company” subject to examination and regulation by the Federal Reserve Board. 30 Table of Contents New York Holding Company Regulation.
These loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest.
These loans often involve the disbursement of substantial funds with repayment substantially dependent on the success 10 Table of Contents of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest.
At December 31, 2024, the Company classified $9.0 million of loans as Substandard, Doubtful or Non-performing, of which $6.8 million were commercial real estate loans, $1.2 million were residential loans, $300,000 were commercial and industrial loans, $590,000 were indirect automobile loans, and $174,000 were home equity loans.
At December 31, 2024, we classified $9.0 million of loans as Substandard, Doubtful or Non-performing, of which $6.8 million were commercial real estate loans, $1.2 million were residential loans, $300,000 were commercial and industrial loans, $590,000 were indirect automobile loans, and $174,000 were home equity loans.
Under the Community Reinvestment Act (“CRA”), as implemented by the FDIC, a state non-member bank has a continuing and affirmative obligation, consistent with its safe and sound operation, to help meet the credit needs of its entire community, including low- and moderate-income neighborhoods.
Under the Community Reinvestment Act (“CRA”), as implemented by the FDIC, a state nonmember bank has a continuing and affirmative obligation, consistent with its safe and sound operation, to help meet the credit needs of its entire community, including low- and moderate-income neighborhoods.
Depending on the individual circumstances, initial charge-offs and subsequent losses on commercial or multi-family real estate loans can be unpredictable and substantial. To monitor cash flows on income properties, we require borrowers and loan guarantors, if any, to provide financial statements on the business operations underlying the commercial and multi-family real estate loans on an ongoing basis.
Depending on the individual circumstances, initial charge-offs and subsequent losses on commercial or multi-family real estate loans can be unpredictable and substantial. 9 Table of Contents To monitor cash flows on income properties, we require borrowers and loan guarantors, if any, to provide financial statements on the business operations underlying the commercial and multi-family real estate loans on an ongoing basis.
Moreover, since Rhinebeck Bancorp, Inc. has sold only a minority of its shares to the public and 28 Table of Contents contributed the remaining shares to Rhinebeck Bancorp, MHC, Rhinebeck Bancorp, Inc. raised significantly less capital than would have been the case if it sold all its shares to the public.
Moreover, since Rhinebeck Bancorp, Inc. has sold only a minority of its shares to the public and contributed the remaining shares to Rhinebeck Bancorp, MHC, Rhinebeck Bancorp, Inc. raised significantly less capital than would have been the case if it sold all its shares to the public.
Commercial real estate loans are generally originated in amounts up to 75% of the appraised value or the purchase price of the property securing the loan, whichever is lower. The Bank selectively offers interest rate swaps for both commercial and multi-family real estate loans. See Note 12 to the Consolidated Financial Statements for additional information.
Commercial real estate loans are generally originated in amounts up to 75% of the appraised value or the purchase price of the property securing the loan, whichever is lower. We selectively offer interest rate swaps for both commercial and multi-family real estate loans. See Note 12 to the consolidated financial statements for additional information.
In addition, 9 Table of Contents vacancies, deferred maintenance, repairs and market stigma can result in prospective buyers expecting sale price concessions to offset their real or perceived economic losses for the time it takes them to return the property to profitability. Direct costs may be required to rehabilitate or prepare the property to be marketed.
In addition, vacancies, deferred maintenance, repairs and market stigma can result in prospective buyers expecting sale price concessions to offset their real or perceived economic losses for the time it takes them to return the property to profitability. Direct costs may be required to rehabilitate or prepare the property to be marketed.
At December 31, 2024, Rhinebeck Bank was classified as a “well capitalized” institution. 24 Table of Contents At each successive lower capital category, an insured depository institution is subject to more restrictions and prohibitions, including restrictions on growth, interest rates paid on deposits, payment of dividends, and acceptance of brokered deposits.
At December 31, 2025, Rhinebeck Bank was classified as a “well capitalized” institution. 25 Table of Contents At each successive lower capital category, an insured depository institution is subject to more restrictions and prohibitions, including restrictions on growth, interest rates paid on deposits, payment of dividends, and acceptance of brokered deposits.
Loan Underwriting Risks Indirect Automobile and Other Consumer Loans. Indirect automobile and other consumer loans entail greater risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as motor vehicles.
Indirect automobile and other consumer loans entail greater risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as motor vehicles.
In addition, the FDIC and the NYDFS, as an integral part of their examination processes, periodically review our allowance for credit losses.
In addition, the FDIC and the NYSDFS, as an integral part of their examination processes, periodically review our allowance for credit losses.
We strive to maintain a safe and healthy workplace, with opportunities for our employees to grow and develop in their careers, supported by advantageous compensation, benefits, health, and welfare programs. 19 Table of Contents ​ As part of our compensation philosophy, we offer market competitive total rewards programs for our employees in order to attract and retain superior talent.
We strive to maintain a safe and healthy workplace, with opportunities for our employees to grow and develop in their careers, supported by advantageous compensation, benefits, health, and welfare programs. ​ As part of our compensation philosophy, we offer market competitive total rewards programs for our employees to attract and retain superior talent.
Additionally, the approval of the NYSDFS is required if the total of all dividends declared in a calendar year would exceed the total of its net profits for that year combined with its retained net profits of the preceding two years.
Additionally, the approval of the NYSDFS is required if the total of all dividends declared in a calendar year would exceed the total of its net profits for that year combined with its retained net profits of the 23 Table of Contents preceding two years.
There is an exception to this approval requirement for well-capitalized bank holding companies that meet certain other conditions. The Federal Reserve Board has issued a policy statement regarding capital distributions, including dividends, by bank holding companies.
There is an exception to this approval requirement for well-capitalized bank holding companies that meet certain other conditions. 29 Table of Contents The Federal Reserve Board has issued a policy statement regarding capital distributions, including dividends, by bank holding companies.
Construction lending involves additional risks when compared to permanent residential or commercial lending because funds are advanced upon the security of the project, which is of uncertain value before its completion.
Construction lending involves additional risks when compared to permanent lending because funds are advanced upon the security of the project, which is of uncertain value before its completion.
Where appropriate, we also require corporate guarantees or personal guarantees. We monitor borrowers’ and guarantors’ financial information on an ongoing basis by requiring periodic financial statement updates. At December 31, 2024, our largest multi-family real estate loan had an outstanding balance of $14.1 million and was secured by an apartment complex located in Poughkeepsie, New York.
Where appropriate, we also require corporate guarantees or personal guarantees. We monitor borrowers’ and guarantors’ financial information on an ongoing basis by requiring periodic financial statement updates. At December 31, 2025, our largest multi-family real estate loan had an outstanding balance of $13.9 million and was secured by an apartment complex located in Poughkeepsie, New York.
In addition, generally during the term of a construction loan, interest may be funded by the lender or disbursed from an interest reserve set aside from the 10 Table of Contents construction loan budget.
In addition, generally during the term of a construction loan, interest may be funded by the lender or disbursed from an interest reserve set aside from the construction loan budget.
Age 43. ​ ​ ​ ​ ​ 21 Table of Contents SUPERVISION AND REGULATION General As a New York-chartered savings bank, Rhinebeck Bank is subject to comprehensive regulation by the NYSDFS, as its chartering agency, and by the FDIC, as its primary federal regulator and its deposit insurer.
Age 50. ​ ​ ​ ​ ​ ​ ​ 22 Table of Contents SUPERVISION AND REGULATION General As a New York-chartered savings bank, Rhinebeck Bank is subject to comprehensive regulation by the NYSDFS, as its chartering agency, and by the FDIC, as its primary federal regulator and its deposit insurer.
Our stock position is reviewed and adjusted weekly by the FHLB. Evaluation of Securities Portfolio. The Company evaluates securities in an unrealized loss position for impairment related to credit losses on at least a quarterly basis.
Our stock position is reviewed and adjusted weekly by the FHLB. Evaluation of Securities Portfolio. We evaluate securities in an unrealized loss position for impairment related to credit losses on at least a quarterly basis.
Rhinebeck Bancorp, Inc. has policies, procedures and systems designed to comply with this Act and its implementing regulations, and we review and document such policies, procedures and systems to ensure continued compliance with this Act and its implementing regulations. ​ 29 Table of Contents FEDERAL AND STATE TAXATION Federal Taxation General.
Rhinebeck Bancorp, Inc. has policies, procedures and systems designed to comply with this Act and its implementing regulations, and we review and document such policies, procedures and systems to ensure continued compliance with this Act and its implementing regulations. ​ FEDERAL AND STATE TAXATION Federal Taxation General.
We believe our commitment to demonstrating our core values, actively prioritizing concern for our employees’ well-being, supporting our employees’ career goals, offering competitive wages and providing valuable fringe benefits aids in retention of our top-performing employees. ​ As of December 31, 2024, we had 157 full-time employees and 11 part-time employees.
We believe our commitment to demonstrating our core values, actively prioritizing concern for our employees’ well-being, supporting our employees’ career goals, offering competitive wages and providing valuable fringe benefits aids in retention of our top-performing employees. ​ As of December 31, 2025, we had 158 full-time employees and seven part-time employees.
The measurement of expected credit losses is applicable to loans receivable and investment securities measured at amortized cost. It also applies to off-balance sheet credit exposures such as loan commitments and unused lines of credit. Loan losses are charged against the allowance for credit losses when the Company believes the uncollectibility of a loan balance is confirmed.
The measurement of expected credit losses is applicable to loans receivable and investment securities measured at amortized cost. It also applies to off-balance sheet credit exposures such as loan commitments and unused lines of credit. Loan losses are charged against the allowance for credit losses when we believe the uncollectability of a loan balance is confirmed.
The term “net profits” is generally defined to mean earnings from current operations, subject to certain adjustments provided for under applicable law. 22 Table of Contents Loans to Directors and Executive Officers.
The term “net profits” is generally defined to mean earnings from current operations, subject to certain adjustments provided for under applicable law. Loans to Directors and Executive Officers.
Allowance for Credit Losses The allowance for credit losses is an estimate of current expected credit losses based on available information relevant to assessing collectability of cash flows over the contractual term of the financial assets necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date.
Allowance for Credit Losses The allowance for credit losses is an estimate at the balance sheet date of current expected credit losses based on available information relevant to assessing collectability of cash flows over the contractual term of the financial assets.
The Investment Committee also reviews and discusses policy changes prior to their presentation to the full board. Our management has the overall responsibility for implementing the investment policy and supervising our investment activities and performance. Management is also responsible for providing regular reports to the Investment Committee.
The Investment Committee also reviews and discusses policy changes prior to their presentation to the full board. Management has the overall responsibility for implementing the investment policy and supervising our investment activities and performance. Management is also responsible for providing regular reports to the Investment Committee. The President and CEO is responsible for the overall supervision of the investment activity.
Approximately 45% of our employees are employed at our banking center and loan production offices, and another 55% are employed at our corporate headquarters. We believe our relationship with our employees to be generally good.
Approximately 44% of our employees are employed at our banking center and loan production offices, and another 56% are employed at our corporate headquarters. We believe our relationship with our employees to be generally good.
However, occasionally we will originate commercial real estate loans on properties located outside our market area based on an established relationship with a strong borrower. As of December 31, 2024, we had four loans located outside of the state of New York totaling $17.5 million.
However, occasionally we will originate commercial real estate loans on properties located outside our market area based on an established relationship with a strong borrower. As of December 31, 2025, we had four loans located outside of New York totaling $17.0 million.
At December 31, 2024, our investment portfolio had a fair value of $159.9 million and consisted primarily of U.S. Government securities, U.S. Government agency securities, including residential and collateralized mortgage-backed securities, municipal securities and corporate bonds in the form of subordinated bank debt.
At December 31, 2025, our investment portfolio had a fair value of $162.2 million and consisted primarily of U.S. Government securities, U.S. Government agency securities, including residential and collateralized mortgage-backed securities, municipal securities and corporate bonds in the form of subordinated bank debt.
At December 31, 2024, each loan in this relationship was performing according to its original repayment terms. Non-Performing Loans and Problem Assets Performance of the loan portfolio is reviewed on a regular basis by Bank management.
At December 31, 2025, each loan in this relationship was performing according to its original repayment terms. 12 Table of Contents Non-Performing Loans and Problem Assets Performance of the loan portfolio is reviewed on a regular basis by management.
Rhinebeck Bank’s federal income tax returns have not been audited in the most recent three-year period. State Taxation Rhinebeck Bancorp, MHC, Rhinebeck Bancorp, Inc. and Rhinebeck Bank report income on a combined fiscal year basis to New York State.
Rhinebeck Bank’s federal income tax returns have not been audited in the most recent three-year period. 31 Table of Contents State Taxation New York State Taxation. Rhinebeck Bancorp and Rhinebeck Bank report income on a combined fiscal year basis to New York State.
We also originate rehabilitation loans, enabling the borrower to partially or totally refurbish an existing structure, which are structured as a construction loan and monitored in the same manner. At December 31, 2024, commercial construction and land development loans totaled $26.6 million, or 2.7% of our total loan portfolio.
We also originate rehabilitation loans, enabling the borrower to partially or totally refurbish an existing structure, which are structured as a construction loan and monitored in the same manner. At December 31, 2025, commercial construction and land development loans totaled $9.0 million, or 0.9% of our total loan portfolio.
In addition, funds are derived from scheduled loan and investment 17 Table of Contents payments, investment maturities, loan sales, loan prepayments, retained earnings and income on earning assets.
In addition, funds are derived from scheduled loan and investment payments, investment maturities, loan sales, loan prepayments, retained earnings and income on earning assets.
If a real estate secured loan is placed on non-accrual status, it could be subject to transfer to other real estate owned (“OREO”) (comprised of properties acquired by or in lieu of foreclosure), of which our credit administration department will pursue the sale of the real estate.
In our collection efforts, we will first attempt to cure any delinquent loan. If a real estate secured loan is placed on non-accrual status, it could be subject to transfer to other real estate owned (“OREO”) (comprised of properties acquired by or in lieu of foreclosure), of which our credit administration department will pursue the sale of the real estate.
The trust preferred securities mature 30 years from the date of issuance and bear interest at a rate equal to the three-month CME term Secured Overnight Financing Rate (“SOFR”) plus 2% and a relative spread adjustment of 0.26%. The interest rate on these securities at December 31, 2024 was 6.78%.
The trust preferred securities mature 30 years from the date of issuance and bear interest at a rate equal to the three-month CME term Secured Overnight 20 Table of Contents Financing Rate plus 2% and a relative spread adjustment of 0.26%. The interest rate on these securities at December 31, 2025 was 6.14%.
Other real estate owned represents property acquired through foreclosure in partial or full satisfaction of loans. The Company had no other real estate owned at December 31, 2024. At December 31, 2023, the Company had $25,000 in other real estate owned. Asset Quality. The table below sets forth the amounts and categories of our non-performing assets at the dates indicated.
Other real estate owned represents property acquired through foreclosure in partial or full satisfaction of loans. We had no other real estate owned at December 31, 2025 or 2024. 13 Table of Contents Asset Quality. The table below sets forth the amounts and categories of our non-performing assets at the dates indicated.
All of these loans are secured by properties located in our primary market area. We also had undrawn amounts on the commercial construction loans totaling $24.6 million at December 31, 2024. Our commercial construction and land development loans are generally structured as two-year interest-only balloon loans.
All these loans are secured by properties located in our primary market area. We also had undrawn amounts on the commercial construction loans totaling $3.1 million at December 31, 2025. 5 Table of Contents Our commercial construction and land development loans are generally structured as two-year interest-only balloon loans.
This statutory prohibition is further implemented through the regulations of the FDIC and, historically, numerous published and unpublished FDIC staff interpretations of the statute and the FDIC’s regulation. On December 15, 2020, the FDIC adopted a final rule substantially amending its brokered deposits regulation. The final rule sought to clarify and modernize the FDIC’s existing regulatory framework for brokered deposits.
This statutory prohibition is further implemented through the regulations of the FDIC and, historically, numerous published and unpublished FDIC staff interpretations of the statute and the FDIC’s regulation. ​ On December 15, 2020, the FDIC adopted a final rule substantially amending its brokered deposits regulation.
At December 31, 2024, the Company had consolidated total assets of $1.26 billion, total deposits of $1.02 billion and stockholders’ equity of $121.8 million. The Company’s executive offices are located at 2 Jefferson Plaza, Poughkeepsie, New York 12601. The telephone number at this address is (845) 454-8555. Our website address is www.Rhinebeckbank.com.
At December 31, 2025, the Company had consolidated total assets of $1.30 billion, total deposits of $1.10 billion and stockholders’ equity of $136.9 million. The Company’s executive offices are located at 2 Jefferson Plaza, Poughkeepsie, New York 12601. The telephone number at this address is (845) 454-8555. Our website address is www.Rhinebeckbank.com.
None of our employees are represented by a collective bargaining agreement. ​ As of December 31, 2024, approximately 61% of our current workforce was female and 39% male. Our average tenure is seven years and eight months. ​ The safety, health and wellness of our employees is a top priority.
None of our employees are represented by a collective bargaining agreement. ​ As of December 31, 2025, approximately 57% of our current workforce was female and 43% male. Our average tenure is seven years and six months. ​ The safety, health and wellness of our employees is a top priority.
At December 31, 2024, $11.7 million of our consumer loans were home equity loans and lines of credit, and $5.7 million of our consumer loans were direct automobile loans. Home equity loans and lines of credit are multi-purpose loans used to finance various home or personal needs, where a one- to four-family primary or secondary residence serves as collateral.
At December 31, 2025, $12.3 million of our consumer loans were home equity loans and lines of credit, and $4.6 million of our consumer loans were direct automobile loans. Home equity loans and lines of credit are multi-purpose loans used to finance various home or personal needs, where a one- to four-family primary or secondary residence serves as collateral.
These updates were made to reflect higher delinquencies and increased charge-offs in our expected credit loss analysis.
These updates were made to reflect fewer delinquencies and decreased charge-offs in our expected credit loss analysis.
All construction projects must be completed in accordance with approved plans and approved by the municipality in which they are located. Loan proceeds are disbursed periodically in increments as construction progresses and as inspections by our approved inspectors warrant. Multi-Family Real Estate Loans.
All construction projects must be completed in accordance with approved plans and approved by the municipality in which they are located. Loan proceeds are disbursed periodically in increments as construction progresses and as inspections by our approved inspectors warrant. Indirect Automobile and Other Consumer Loans.
Non-Residential Commercial Real Estate Loans. At December 31, 2024, non-residential commercial real estate loans were $351.0 million, or 36.0%, of our total loan portfolio. Our commercial real estate loans are generally secured by properties used for business purposes, such as office buildings, industrial facilities and retail facilities.
At December 31, 2025, non-residential commercial real estate loans were $417.8 million, or 43.6%, of our total loan portfolio. Our commercial real estate loans are generally secured by properties used for business purposes, such as office buildings, industrial facilities and retail facilities.
We generally follow the same underwriting guidelines in originating direct (non-dealer) automobile loans. We generally finance up to the full sales price of the vehicle plus sales tax, dealer preparation fees, license fees and title fees, plus the cost of service and warranty contracts (amounts in addition to the sales price are collectively referred to as the “additional vehicle costs”).
We generally finance up to the full sales price of the vehicle plus sales tax, dealer preparation fees, license fees and title fees, plus the cost of service and warranty contracts (amounts in addition to the sales price are collectively referred to as the “additional vehicle costs”).
In addition, as of December 31, 2023, the portion of certificates of deposit in excess of the FDIC insurance limit of $250,000 was $48.6 million.
In addition, as of December 31, 2025, the portion of certificates of deposit in excess of the FDIC insurance limit of $250,000 was $45.9 million.
We acquire our indirect automobile loans from 61 automobile dealerships located in the Hudson Valley region and 30 dealers located in the Albany area, under an arrangement where the dealer receives a flat fee for referring the loan to us, which is known as dealer participation or dealer reserve.
We acquire our indirect automobile loans from 51 automobile dealerships located in the Hudson Valley region and 28 dealers located in the Albany area, under an arrangement where the dealer receives a flat fee for referring the loan to us.
At December 31, 2024, $118.9 million of our commercial real estate portfolio was owner-occupied real estate and $232.1 million was secured by income producing, non-owner occupied real estate. At December 31, 2024, substantially all of our commercial real estate loans were secured by properties located in our market area.
At December 31, 2025, $156.2 million of our commercial real estate portfolio was owner-occupied real estate and $261.6 million was secured by income producing, non-owner occupied real estate. At December 31, 2025, substantially all of our commercial real estate loans were secured by properties located in our market area.
Rhinebeck Bancorp, MHC Rhinebeck Bancorp, MHC, a New York-chartered non-stock corporation, is a mutual holding company that owns 57.1% of the outstanding common stock of Rhinebeck Bancorp, Inc. Rhinebeck Bank Rhinebeck Bank is a New York-chartered stock savings bank that was organized in 1860.
Rhinebeck Bancorp, MHC Rhinebeck Bancorp, MHC, a New York-chartered non-stock corporation, is a mutual holding company that owns 57.0% of the outstanding common stock of Rhinebeck Bancorp, Inc.
We do not offer “interest only” mortgage loans on one- to four-family residential properties or loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan.
Mortgage insurance is obtained only from insurers approved by Freddie Mac or Fannie Mae. ​ We will not purchase “interest only” mortgage loans on one- to four-family residential properties or loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan.
The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements, which includes affiliate deposits and collateralized deposits. ​ The following table summarizes total uninsured deposits based on the same methodologies and assumptions used for the Bank’s regulatory reporting: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 2023 ​ ​ (Dollars in thousands) Uninsured deposits, per regulatory requirements ​ $ 278,329 ​ $ 295,574 Less affiliate deposits ​ (8,728) ​ (9,448) Collateralized deposits ​ — ​ — Uninsured deposits, after exclusions ​ $ 269,601 ​ $ 286,126 ​ ​ ​ ​ ​ ​ ​ Available liquidity (1) ​ $ 613,696 ​ $ 679,393 Uninsured deposits coverage ​ ​ 227.6% ​ ​ 237.4% Uninsured deposits after exclusions as a percent of total deposits ​ ​ 26.4% ​ ​ 27.8% (1) Includes cash and cash equivalents, unencumbered securities, lines of credit and remaining borrowing capacity from the FHLB and FRB. 18 Table of Contents As of December 31, 2024, the aggregate amount of certificates of deposits in denominations greater than $250,000 was $95.6 million.
The uninsured amounts are estimates based on the methodologies and assumptions used for regulatory reporting requirements, which includes affiliate deposits and collateralized deposits. ​ The following table summarizes total uninsured deposits based on the same methodologies and assumptions used for regulatory reporting: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (Dollars in thousands) Uninsured deposits, per regulatory requirements ​ $ 310,010 ​ $ 278,329 Less affiliate deposits ​ (7,939) ​ (8,728) Collateralized deposits ​ — ​ — Uninsured deposits, after exclusions ​ $ 302,071 ​ $ 269,601 ​ ​ ​ ​ ​ ​ ​ Available liquidity (1) ​ $ 714,214 ​ $ 613,696 Uninsured deposits coverage ​ ​ 236.4% ​ ​ 227.6% Uninsured deposits after exclusions as a percent of total deposits ​ ​ 27.5% ​ ​ 26.4% (1) Includes cash and cash equivalents, unencumbered securities, lines of credit and remaining borrowing capacity from the FHLB and Federal Reserve Board. 19 Table of Contents As of December 31, 2025, the aggregate amount of certificates of deposits in denominations greater than $250,000 was $99.2 million.
Additionally, we do not offer “subprime loans” (loans that are made with low down-payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (defined as loans having less than full documentation).
Additionally, we will not purchase “subprime loans” (loans that are made with low down-payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (defined as loans having less than full documentation). 8 Table of Contents We also previously originated loans to finance the construction of one- to four-family residential properties.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur assets decreased $57.4 million, or 4.4%, from $1.31 billion at December 31, 2023 to $1.26 billion at December 31, 2024, primarily due to decreases in loans and available for sale securities. Due to the rebalancing of our portfolio, we expect the size of our balance sheet to stabilize in 2025.
Biggest changeAfter experiencing a decline in total assets, including the intentional decrease in automobile loans and a planned securities portfolio repositioning in 2024, our balance sheet stabilized in 2025 and total assets increased by $46.0 million, or 3.7%, from $1.26 billion at December 31, 2024 to $1.30 billion at December 31, 2025.
Significant deposit withdrawals could materially reduce our liquidity, and, in such an event, we may be required to replace such deposits with higher-costing borrowings. Other primary sources of funds consist of cash flows from operations and sales of investment securities and borrowings from the FHLB of New York and the Federal Reserve.
Significant deposit withdrawals could materially reduce our liquidity, and, in such an event, we may be required to replace such deposits with higher-costing borrowings. Other primary sources of funds consist of cash flows from operations and sales of investment securities and borrowings from the FHLB of New York and the Federal Reserve Board.
Changes in Federal Reserve and other governmental policies, fiscal policy, and our regulatory environment generally are beyond our control, and we are unable to predict what changes may occur or the manner in which any future changes may affect our business, financial condition and results of operations.
Changes in Federal Reserve Board and other governmental policies, fiscal policy, and our regulatory environment generally are beyond our control, and we are unable to predict what changes may occur or the manner in which any future changes may affect our business, financial condition and results of operations.
The allowance for credit losses is dependent on various factors, including credit quality, macroeconomic forecasts and conditions, composition of our loans and securities portfolios, and other management judgements. There can be no assurance that the Company’s allowance for credit losses will be adequate to cover actual losses.
The allowance for credit losses is dependent on various factors, including credit quality, macroeconomic forecasts and conditions, composition of our loans and securities portfolios, and other management judgements. There can be no assurance that our allowance for credit losses will be adequate to cover actual losses.
The application of more stringent capital requirements could, among other things, require us to maintain higher capital levels resulting in lower returns on equity, raise capital and result in regulatory actions if we were to be unable to comply with such requirements.
The application of stringent capital requirements could, among other things, require us to maintain higher capital levels resulting in lower returns on equity, raise capital and result in regulatory actions if we were to be unable to comply with such requirements.
In some cases, we could be required to apply new or revised guidance retroactively. ​ We are subject to more stringent capital requirements, which may adversely impact our return on equity, or constrain us from paying dividends or repurchasing shares.
In some cases, we could be required to apply new or revised guidance retroactively. ​ We are subject to stringent capital requirements, which may adversely impact our return on equity, or constrain us from paying dividends or repurchasing shares.
Any adverse effects from tariffs or a trade war could materially and negatively impact our financial condition, results of operations, and future growth prospects. ​ Interruption of our customers' supply chains could negatively impact their business and operations and impact their ability to repay their loans. ​ Any material interruption in our customers’ supply chains, such as a material interruption of the resources required to conduct their business resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers' supply chains, could have a negative impact on their business and ability to repay their borrowings with us.
Any adverse effects from tariffs or a trade war could materially and negatively impact our financial condition, results of operations, and future growth prospects. 35 Table of Contents ​ Interruption of our customers' supply chains could negatively impact their business and operations and impact their ability to repay their loans. ​ Any material interruption in our customers’ supply chains, such as a material interruption of the resources required to conduct their business resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers' supply chains, could have a negative impact on their business and ability to repay their borrowings with us.
Any damage or failure that causes an interruption in our operations could have a material adverse effect on our financial condition and results of operations.
Any damage or failure that causes an interruption in our operations could have a material adverse effect on our reputation, financial condition and results of operations.
Many of the institutions with which we compete have substantially greater resources and lending limits than we have and may offer services that we do not provide. Our competitors often aggressively price loan and deposit products when they enter into new lines of business or new market areas.
Many of the institutions with which we compete have substantially greater resources, lending limits and efficiencies of scale than we have and may offer services that we do not provide. Our competitors often aggressively price loan and deposit products when they enter into new lines of business or new market areas.
Any change in such regulation and oversight, whether in the form of regulatory policy, new regulations, legislation or supervisory action, may have a material impact on our operations. Further, compliance with such regulation may increase our costs and limit our ability to pursue business opportunities.
Any change in such regulation and oversight, whether in the form of regulatory policy, new regulations, executive orders, legislation or supervisory action, may have a material impact on our operations. Further, compliance with such regulation may increase our costs and limit our ability to pursue business opportunities.
However, our directors do not have significant experience in cybersecurity risk management outside of the Company and therefore, its ability to fulfill its oversight function remains dependent on the input it receives from management and outside consultants.
Our directors do not have significant experience in cybersecurity risk management outside of the Company and therefore, the board’s ability to fulfill its oversight function remains dependent on the input it receives from management and outside consultants.
Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations. 35 Table of Contents Risk Related to our Business Strategy Our long-term business strategy involves moderate growth, and our financial condition and results of operations may be adversely affected if we fail to grow or fail to manage our growth effectively.
Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations. 37 Table of Contents Risk Related to Our Business Strategy Our long-term business strategy involves organic growth, and our financial condition and results of operations may be adversely affected if we fail to grow or fail to manage our growth effectively.
Control shares have limited voting rights. ​ Although these provisions do not preclude a takeover, they may have the effect of discouraging, delaying or deferring a tender offer or takeover attempt that a stockholder might consider in his or her best interest, including those attempts that might result in a premium over the market price for the common stock.
Control shares have limited voting rights. ​ Although these provisions do not preclude a takeover, they may have the effect of discouraging, delaying or deferring a tender offer or takeover attempt that a stockholder might consider in their best interest, including those attempts that might result in a premium over the market price for the common stock.
These estimates and assumptions are based on management’s best estimates and experience at such times and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known.
These estimates and assumptions are based on our best estimates and experience at such times and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known.
We make various assumptions and judgments about the collectability of loans in our portfolio, including the creditworthiness of borrowers and the value of the real estate, automobiles and other assets serving as collateral for the repayment of loans.
We make various assumptions and judgments about the collectability of loans in our portfolio, including the creditworthiness of borrowers, the strength of the economy and the value of the real estate, automobiles and other assets serving as collateral for the repayment of loans.
We rely on our ability to generate deposits and effectively manage the repayment and maturity schedules of our loans to ensure that we have adequate liquidity to fund our operations. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity.
Liquidity is essential to our business. We rely on our ability to generate deposits and effectively manage the repayment and maturity schedules of our loans to ensure that we have adequate liquidity to fund our operations. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity.
Failure to comply with these regulations could result in fines or sanctions, including restrictions on conducting acquisitions or establishing new branches. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in preventing violations of these laws and regulations.
Failure to comply with these regulations could result in fines or 39 Table of Contents sanctions, including restrictions on conducting acquisitions or establishing new branches. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in preventing violations of these laws and regulations.
Our performance largely depends on the talents and efforts of highly skilled individuals who comprise our senior management team. We rely on key personnel to manage and operate our business, including major revenue generating functions such as loan and deposit generation and our wealth management business.
Our performance largely depends on the talents and efforts of highly skilled individuals who comprise our senior management team and top-producing lenders. We rely on key personnel to manage and operate our business, including major revenue generating functions such as loan and deposit generation and our wealth management business.
New laws or changes to existing laws may increase our costs of compliance, could reduce income from certain business initiatives and could restrict our ability to provide certain products and services, which could have a material adverse effect on our business, financial conditions or results of operations.
New laws or changes to existing laws may increase our costs of compliance, could reduce income from certain 42 Table of Contents business initiatives and could restrict our ability to provide certain products and services, which could have a material adverse effect on our business, financial conditions or results of operations.
Automobile loans are inherently risky as they are secured by assets that may be difficult to locate and can depreciate rapidly. In some cases, repossessed collateral for a defaulted automobile loan may not provide an adequate source of repayment for the outstanding loan and the remaining deficiency may not warrant further collection efforts against the borrower.
Automobile loans are inherently risky as they are secured by assets that may be difficult to locate, have high loan-to-value ratios, and can depreciate rapidly. In some cases, repossessed collateral for a defaulted automobile loan may not provide an adequate source of repayment for the outstanding loan and the remaining deficiency may not warrant further collection efforts against the borrower.
Risks Related to Privacy, Security and Technology Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities. ​ We are subject to various privacy, information security and data protection laws, such as the Gramm-Leach-Bliley Act, which, among other things, requires privacy disclosures, and maintenance of a robust security program, which are increasingly subject to change and that could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of consumer or employee information, and some of our current or planned business activities.
Risks Related to Privacy, Security and Technology Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities. ​ We are subject to various privacy, information security and data protection laws, such as the Gramm-Leach-Bliley Act, which, among other things, requires privacy disclosures, and maintenance of a robust security program, which are subject to change and that could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of consumer or employee information, and some of our current or planned business activities, including our expansion of digital and online offerings.
Our inability to successfully implement technological change may adversely impact our business. ​ The financial services industry is continually undergoing rapid technological change with frequent introductions of new, technology-driven products and services which increases efficiency and enables financial institutions to better serve customers and reduce costs.
Technological changes may adversely impact our business. ​ The financial services industry is continually undergoing rapid technological change with frequent introductions of new, technology-driven products and services, which increases efficiency and enables financial institutions to better serve customers and reduce costs.
In determining the adequacy of the allowance for credit losses, we rely on our experience and our evaluation of economic conditions and other qualitative factors. If our assumptions prove to be incorrect, our allowance for credit losses may not be sufficient to cover losses inherent in our loan portfolio, and adjustments may be necessary.
In determining 33 Table of Contents the adequacy of the allowance for credit losses, we rely on our historic loss experience and our evaluation of economic conditions and other qualitative factors. If our assumptions prove to be incorrect, our allowance for credit losses may not be sufficient to cover losses inherent in our loan portfolio, and adjustments may be necessary.
Negative changes in these general business and economic conditions could have the following consequences, any of which could have a materially adverse impact on our business, financial condition and results of operations: ​ ● loan delinquencies, problem assets and foreclosures may increase; ● our allowance for credit losses may increase; ● demand for our products and services may decline possibly resulting in a decrease in our total loans, total deposits, or assets; ● collateral for loans may decline in value, thereby reducing customers’ borrowing power, and reducing the value of assets and collateral associated with existing loans; ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and ● the amount of our low-cost or non-interest bearing deposits may decrease and the composition of our deposits may be adversely affected. ​ Inflation can have an adverse impact on our business and on our customers. ​ Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money.
Negative changes in these general business and economic conditions could have the following consequences, any of which could have a materially adverse impact on our business, financial condition and results of operations: ​ ● loan delinquencies, problem assets and foreclosures may increase; ● our allowance for credit losses may increase; ● demand for our products and services may decline possibly resulting in a decrease in our total loans, total deposits, or assets; ● inflation may accelerate, which may increase our operating costs and also may increase real estate costs and lower customer buying power, thereby reducing loan demand; ● the value of our securities portfolio may decrease; ● collateral for loans may decline in value, thereby reducing customers’ borrowing power, and reducing the value of assets and collateral associated with existing loans; ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and ● the amount of our low-cost or non-interest bearing deposits may decrease and the composition of our deposits may be adversely affected. ​ Inflation can have an adverse impact on our business and on our customers. ​ Inflation risk is the risk that the value of assets or income from investments may decline as inflation reduces the purchasing power of money.
Changes in interest rates also may negatively impact our ability to originate real estate loans, the value of our assets and our ability to realize gains from the sale of our assets, all of which may ultimately affect our earnings. For further discussion of how changes in interest rates could impact us, see “Item 7.
Changes in interest rates also may negatively impact our ability to originate real estate loans, the value of our assets and our ability to realize gains from the sale of our assets, all of which may ultimately affect our earnings. see “Item 7.
Recessionary conditions or adverse economic conditions in our local market areas may reduce our rate of growth, affect our customers' ability to repay loans and adversely impact our business, financial condition, and results of operations. ​ A decline in economic conditions could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could have an adverse effect on our results of operations. ​ General economic conditions, including inflation, unemployment, money supply fluctuations and the shape of the interest rate curve may adversely affect our profitability.
Recessionary conditions or adverse economic conditions in our local market areas may reduce our rate of growth, affect our customers' ability to repay loans and adversely impact our business, financial condition, and results of operations. 34 Table of Contents A decline in economic conditions could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could have an adverse effect on our results of operations. ​ General business, political and economic conditions, including inflation, unemployment, money supply fluctuations, the imposition of tariffs or other domestic or international governmental policies and the shape of the interest rate curve may adversely affect our profitability.
The Board receives an annual information security report from our virtual Chief Information Security Officer and Chief Executive Officer as it relates to cybersecurity and related issues. We also engage outside consultants to support our cybersecurity efforts.
The Board receives an annual information security report from our virtual Chief Information Security Officer and Chief Technology Officer as it relates to cybersecurity and related issues. We also engage outside consultants to support our cybersecurity 43 Table of Contents efforts.
In the event of disruptions in our customers' supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all. ​ ​ Risks Related to Interest Rates ​ Changes in interest rates may reduce our profits.
In the event of disruptions in our customers' supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all.
The loss of key staff may adversely affect our ability to maintain and manage these functions effectively, which could negatively affect our income. In addition, loss of key personnel could result in increased recruiting and hiring expenses, which would reduce our net income.
The loss of key staff may adversely affect our ability to maintain and manage these functions effectively, which could negatively affect our income. In addition, loss of key personnel could result in increased recruiting and hiring expenses, which would reduce our net income. Further, competition for qualified employees and personnel in the banking industry is intense.
If we are not able to increase our lower-cost transactional deposits at a level necessary to fund our asset growth or deposit outflows, we may be forced seek other sources of funds, including certificates of deposit, FHLB advances, brokered deposits and lines of credit to meet the borrowing and deposit withdrawal requirements of our customers, which may be more expensive and have an adverse effect on our net interest margin and profitability.
If we are not able to increase our lower-cost transactional deposits at a level necessary to fund our asset growth or deposit outflows, we may be forced seek other sources of funds, including certificates of deposit, FHLB advances, brokered deposits and lines of credit to meet the borrowing and deposit withdrawal requirements of our customers, which may be more expensive and have an adverse effect on our net interest margin and profitability. ​ A lack of liquidity could adversely affect our financial condition and results of operations and result in regulatory limits being placed on us.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan 31 Table of Contents delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations. ​ Changes to trade policies and tariffs can have an adverse impact on our business and our customers. ​ Changes in trade policies, including the imposition of tariffs or the escalation of a trade war, could negatively impact the economic conditions in the markets we serve.
A deterioration in economic conditions in the United States or our primary market areas could result in increased loan delinquencies and non-performing assets, declines in collateral values, and reduced demand for our products and services, which could materially and adversely affect our business, financial condition, and results of operations. ​ Changes to trade policies and tariffs can have an adverse impact on our business and our customers. ​ Changes in trade policies, including the imposition of tariffs or the escalation of a trade war, could negatively impact the economic conditions in the markets we serve.
Such regulation and supervision govern the activities in which a financial institution and its holding company may engage and are intended primarily for the protection of insurance funds and the depositors and borrowers of Rhinebeck Bank rather than for the protection of our stockholders.
We are subject to extensive regulation, supervision and examination by our banking regulators. Such regulation and supervision govern the activities in which a financial institution and its holding company may engage and are intended primarily for the protection of insurance funds and our depositors and borrowers rather than for the protection of our stockholders.
Business — Loan Underwriting Risks.” ​ Our emphasis on commercial real estate and commercial business lending involves risks that could adversely affect our financial condition and results of operations. We emphasize the originations of commercial real estate and commercial business loans.
Risks Related to Our Lending Activities Our emphasis on commercial real estate and commercial business lending involves risks that could adversely affect our financial condition and results of operations. We emphasize the origination of commercial real estate and commercial business loans.
Our non-owner occupied commercial real estate loans may expose us to increased credit risk. ​ At December 31, 2024, $361.6 million, or 37.1% of our total loan portfolio and 74.9% of our commercial real estate loan portfolio, consisted of loans secured by non-owner occupied commercial real estate loans.
Our non-owner occupied commercial real estate loans may expose us to increased credit risk. ​ At December 31, 2025, $261.6 million, or 27.3% of our total loan portfolio and 48.9% of our commercial real estate loan portfolio, consisted of loans secured by non-owner occupied commercial real estate loans.
Generally, the fair value of fixed-rate securities fluctuates inversely with changes in interest rates. Stockholders' equity, specifically accumulated other comprehensive income (loss), is increased or decreased by the amount of change in the estimated fair value of our securities available for sale, net of deferred income taxes.
Stockholders’ equity, specifically accumulated other comprehensive income (loss), is increased or decreased by the amount of change in the estimated fair value of our securities available for sale, net of deferred income taxes. Increases in interest rates generally decrease the fair value of securities available for sale, which adversely impacts stockholders’ equity.
The fiscal, monetary and regulatory policies of the federal government and its agencies could have an adverse effect on our results of operations. In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the FRB. An important function of the FRB is to regulate the money supply and credit environment.
The fiscal, monetary and regulatory policies of the federal government and its agencies could have an adverse effect on our results of operations. In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve Board.
Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations.
Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. As part of our business strategy, we intend to make significant investments in technology to modernize and improve our product offerings.
Additional risk elements associated with indirect lending include the limited personal contact with the borrower as a result of indirect lending through non-bank channels, namely automobile dealers, and reliance on automobile dealers to comply with fair lending practices. See “Item 1.
Additional risk elements associated with indirect lending include the limited personal contact with the borrower as a result of indirect lending through non-bank channels, namely automobile dealers, and reliance on automobile dealers to comply with fair lending practices. We also rely on dealerships to ensure our security interest in the financed vehicles is perfected. See “Item 1.
At December 31, 2024, $295.7 million, or 30.3% of our total loan portfolio and 23.5% of our total assets, consisted of indirect automobile loans and $5.7 million, or 0.6% of our total loan portfolio, consisted of automobile loans that we also originated directly.
At December 31, 2025, $213.8 million, or 22.3% of our total loan portfolio and 16.4% of our total assets, consisted of indirect automobile loans and $4.6 million, or 0.5% of our total loan portfolio, consisted of automobile loans that we also originated directly.
Depending on industries and markets involved, changes to tax law and increased or reduced public expenditures could affect us directly or the business operations of our customers.
Additionally, Congress and the administration through executive orders controls fiscal policy through decisions on taxation and expenditures. Depending on industries and markets involved, changes to tax law and increased or reduced public expenditures could affect us directly or the business operations of our customers.
At December 31, 2024, our commercial real estate (which includes multi-family real estate loans and commercial construction loans) and commercial business loans totaled $574.1 million, or 58.9% of our loan portfolio.
At December 31, 2025, our commercial real estate (which includes multi-family real estate loans and commercial construction loans) and commercial business loans totaled $626.3 million, or 65.4% of our loan portfolio.
We may not be able to effectively implement new, technology-driven products and services or be successful in marketing these products and services to our customers, which failure could have a material adverse effect on our business, financial condition or results of operations. ​ Risks Related to Our Business and Operations Our cost of operations is high relative to our assets.
We may not be able to effectively implement new, technology-driven products and services, to recoup the costs associated with such improvements, or be successful in marketing these products and services to our customers, which failure could have a material adverse effect on our business, financial condition or results of operations. ​ Implementation of new technology may also heighten our cyber and data security risks.
Although we have policies and procedures to perform an environmental review before initiating any foreclosure on nonresidential real property, these reviews may not be sufficient to detect all potential environmental hazards.
Although we have policies and procedures to perform an environmental review before initiating any foreclosure on nonresidential real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on us.
Strong competition within our market area may reduce our profits and slow growth. We face strong competition in making loans and attracting deposits. Price competition for loans and deposits sometimes requires us to charge lower interest rates on our loans and pay higher interest rates on our deposits, which may reduce our net interest income.
Price competition for loans and deposits sometimes requires us to charge lower interest rates on our loans and pay higher interest rates on our deposits, which may reduce our net interest income.
Our failure to maintain or reduce our operating expenses may reduce our profits. Our non-interest expenses totaled $36.8 million and $36.4 million for the years ended December 31, 2024 and 2023, respectively. Although we have decreased our expenses and have achieved certain efficiencies, our efficiency ratio, comparative to peers, remains high.
Our non-interest expenses totaled $39.0 million and $36.8 million for the years ended December 31, 2025 and 2024, respectively. Although we have achieved certain efficiencies, our efficiency ratio, comparative to peers, remains high. Our efficiency ratio totaled 73.12% and 82.34% for the years ended December 31, 2025 and 2024, respectively.
Furthermore, cyber incidents carry a great risk of injury to 38 Table of Contents our reputation. Finally, depending on the type of incident, banking regulators can impose restrictions on our business and consumer laws may require reimbursement of customer losses.
Finally, depending on the type of incident, banking regulators can impose restrictions on our business and consumer laws may require reimbursement of customer losses.
In addition, advances in computer capabilities, new discoveries in the field of cryptography or other developments could result in a compromise or breach of the algorithms we and our third-party service providers use to encrypt and protect customer transaction data.
In addition, advances in computer capabilities or other developments could result in a compromise or breach of the algorithms we and our third-party service providers use to encrypt and protect customer transaction data. A failure of such security measures could have a material impact on our operations or a material adverse effect on our financial condition and results of operations.
In preparing the periodic reports we are required to file under the Securities Exchange Act of 1934, including our consolidated financial statements, our management is required under applicable rules and regulations to make estimates and assumptions as of specified dates.
Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results. In preparing the periodic reports we file under the Securities Exchange Act of 1934, including our consolidated financial statements, we are required to make estimates and assumptions as of specified dates.
Accordingly, our results of operations depend largely on movements in market interest rates and our ability to manage our interest-rate-sensitive assets and liabilities in response to these movements.
Accordingly, our results of operations depend largely on movements in market interest rates and our ability to manage our interest-rate-sensitive assets and liabilities in response to these movements. Factors such as inflation, recession and instability in financial markets, among other factors beyond our control, may affect interest rates.
Among the instruments used by the FRB to implement these objectives are open market purchases and sales of U.S. Government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits.
An important function of the Federal Reserve Board is to regulate the money supply and credit environment. Among the instruments used by the Federal Reserve Board to implement these objectives are open market purchases and sales of U.S. Government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits.
Under these circumstances, we are subject to reinvestment risk as we may have to reinvest such loan or securities prepayments into lower-yielding assets, which may also negatively impact our income.
Decreases in interest rates can result in increased prepayments of loans and mortgage-related securities, as borrowers refinance to reduce their borrowing costs. Under these circumstances, we are subject to reinvestment risk as we may have to reinvest such loan or securities prepayments into lower-yielding assets, which may also negatively impact our income.
The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on us. 34 Table of Contents ​ Risks Related to Our Funding and Liquidity ​ Our inability to generate core deposits may cause us to rely more heavily on wholesale funding strategies for funding and liquidity needs, which could have an adverse effect on our net interest margin and profitability.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Management of Market Risk.” 36 Table of Contents ​ Risks Related to Our Funding and Liquidity ​ Our inability to generate core deposits may cause us to rely more heavily on wholesale funding strategies for funding and liquidity needs, which could have an adverse effect on our net interest margin and profitability.
Management also cannot predict the extent to which an active public market for our common stock will develop or be sustained in the future. Accordingly, stockholders may not be able to sell their shares of our common stock at the volumes, prices, or times that they desire.
Management also cannot predict the extent to which an active public market for our common stock will develop or be sustained in the future.
Factors such as inflation, recession and instability in financial markets, among other factors beyond our control, may affect interest rates. 32 Table of Contents If interest rates rise, and the interest rates on our deposits increase faster than the interest rates we receive on our loans and investments, our interest rate spread would decrease, which would have a negative effect on our net interest income and profitability.
Conversely, if interest rates rise, and the interest rates on our deposits increase faster than the interest rates we receive on our loans and investments, our interest rate spread would decrease, which would have a negative effect on our net interest income and profitability.
Furthermore, increases in interest rates may adversely affect the ability of borrowers to make loan repayments on adjustable-rate loans, as the interest owed on such loans would increase as interest rates increase. Conversely, decreases in interest rates can result in increased prepayments of loans and mortgage-related securities, as borrowers refinance to reduce their borrowing costs.
Furthermore, increases in interest rates may adversely affect the ability of borrowers to make loan repayments on adjustable-rate loans, as the interest owed on such loans would increase as interest rates increase. Changes in interest rates also affect the value of our interest-earning assets and, in particular, our investment securities portfolio.
A failure of such security measures could have a material impact on the Bank’s operations or a material adverse effect on our financial condition and results of operations. It is possible that we could incur significant costs associated with a breach of our computer systems. While we have cyber liability insurance, there are limitations on coverage.
It is possible that we could incur significant costs associated with a breach of our computer systems. While we have cyber liability insurance, there are limitations on coverage. Furthermore, cyber incidents carry a great risk of injury to our reputation.
Their use also affects interest rates charged on loans or paid on deposits. The FRB’s policies determine in large part the cost of funds for lending and investing and the return earned on those loans and investments, both of which affect our net interest margin.
These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. The Federal Reserve Board’s policies determine in large part the cost of funds for lending and investing and the return earned on those loans and investments, both of which affect our net interest margin.
Changes in market interest rates may also affect the demand for the Company’s products and services, competition for deposits, the secondary mortgage market, and our ability to realize gains from the sale of assets. Changes in interest rates also affect the value of our interest-earning assets and, in particular, our investment securities portfolio.
Changes in market interest rates may also affect the demand for our products and services, and competition for deposits.
In addition, changes in consumer preferences about where they 33 Table of Contents work, live, shop and eat can also impact commercial real estate, which could result in declines in occupancy and declines in property values. Accordingly, any charge-offs may be larger on a per loan basis than those incurred with our residential or consumer loans. See “Item 1.
In addition, changes in consumer preferences about where they work, live, shop and eat can also impact commercial real estate, which could result in declines in occupancy and declines in property values.
Areas requiring significant estimates and assumptions by management include our evaluation of the adequacy of our Allowance for credit losses, the determination of our deferred income taxes, our fair value measurements and our determination of goodwill impairment. Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses.
Areas requiring significant estimates and assumptions by management include our evaluation of the adequacy of our allowance for credit losses, the determination of our deferred income taxes and our determination of goodwill impairment. We may be subject to risks and losses resulting from fraudulent activities that could adversely impact our financial performance and results of operations.
Any substantial or unexpected change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations.
On December 31, 2025, we recorded an accumulated other comprehensive loss, net of tax, of $6.3 million related to net changes in the fair value of our available-for-sale investment securities portfolio. Any substantial or unexpected change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations.
If we do not manage our growth effectively, we may not be able to execute our business plan, which would have an adverse effect on our financial condition and results of operations.
If we fail to grow as expected, or if we are unable to manage growth effectively, we may not be able to execute our business plan, which could adversely affect our financial condition and results of operations. If appropriate opportunities present themselves, we may engage in other business growth initiatives or undertakings.
The monetary policies and regulations of the FRB have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future. 36 Table of Contents Additionally, Congress and the administration through executive orders controls fiscal policy through decisions on taxation and expenditures.
Its policies can also adversely affect borrowers, potentially increasing the risk that they may fail to repay their loans. The monetary policies and regulations of the Federal Reserve Board have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future.
For more information about our market area and the competition we face, see “Item 1. Business — Market Area” and “— Competition.” The value of our goodwill may decline in the future. As of December 31, 2024, we had $2.2 million of goodwill.
For more information about our market area and the competition we face, see “Item 1. Business — Market Area” and “— Competition.” Our cost of operations is high relative to our assets. Our failure to maintain or reduce our operating expenses may reduce our profits.
Our most important source of funds is deposits. Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff. If customers move money out of deposits, we may lose a relatively low-cost source of funds, increasing our funding costs and reducing our net interest income and net income.
Our most important source of funds is deposits. Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff, which are strongly influenced by such external factors as the direction and level of interest rates, local and national economic conditions and the availability and attractiveness of alternative investments.
Our ability to grow successfully will depend on a variety of factors, including our ability to attract and retain experienced bankers, the availability of attractive business opportunities and competition from other financial institutions in our market area.
Achieving our organic growth objectives will depend on several factors, including our ability to attract new customers from competing financial institutions, retain and recruit experienced bankers, identify and pursue attractive lending and deposit-gathering opportunities, and compete effectively within our market area.
We then expect to resume moderate growth in our total assets and deposits going forward, accompanied by relative increases in the scale of our operations. Achieving our growth targets requires us to attract customers that currently bank at other financial institutions in our market.
We expect to continue pursuing sustainable organic growth in total assets and deposits going forward, accompanied by a corresponding increase in the scale and complexity of our operations.
The only matters that public stockholders are able to exercise voting control over include proposals to implement stock-based benefit plans or initiate a “second-step” conversion. 41 Table of Contents The Company’s Articles of Incorporation and Bylaws and Maryland law may discourage a corporate takeover.
Accordingly, stockholders may not be able to sell their shares of our common stock at the volumes, prices, or times that they desire. 44 Table of Contents The Company’s Articles of Incorporation and Bylaws and Maryland law may discourage a corporate takeover.
Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand. ​ Declines in market value may result in impairments of these assets, which may lead to accounting charges that could have a material adverse effect on our net income and stockholders’ equity.
Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand. Generally, the fair value of fixed-rate securities fluctuates inversely with changes in interest rates.
Removed
In the United States, the annual inflation rate peaked at 9.1% in June 2022. By December 31, 2024, it had decreased to 2.9%. The Federal Reserve increased the target federal funds rate to combat inflation.
Added
These loans also expose us to greater credit risk than loans secured by residential real estate because the collateral securing these loans typically cannot be liquidated as easily as residential real estate.
Removed
However, in 2024, the Federal Reserve implemented one 50 basis point and two 25 basis point rate cuts, bringing the target range to 4.25% to 4.50% by December 2024. As inflation increased, the value of our investment securities, particularly those with longer maturities, decreased.
Added
If we foreclose on these loans, our holding period for the collateral typically is longer than for a single or multi-family residential property because there are fewer potential purchasers of the collateral.
Removed
In addition, inflation increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our non-interest expenses.
Added
If loans that are collateralized by commercial real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time we originated the loan, which could cause us to increase our provision for credit losses and adversely affect our operating results and financial condition.
Removed
Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us.
Added
Accordingly, any charge-offs may be larger on a per loan basis than those incurred with our residential or consumer loans. See “Item 1. Business — Loan Underwriting Risks.” Our automobile loan portfolio exposes us to increased credit risks.
Removed
Increases in interest rates generally decrease the fair value of securities available for sale, which adversely impacts stockholders' equity. On December 31, 2024, we recorded other comprehensive losses, net of tax, of $10.5 million related to net changes in unrealized holding losses in our available-for-sale investment securities portfolio.
Added
Furthermore, our consumer lending activities are subject to numerous consumer protection laws and regulations, and the application of various federal and state laws, including bankruptcy and insolvency laws, may limit our ability to recover on such loans.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Management of Market Risk.” Risks Related to our Lending Activities Our automobile lending exposes us to increased credit risks.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis ensures that the highest levels of management are kept abreast of the cybersecurity posture and potential risks facing Rhinebeck Bank.
Biggest changeThe CRO, the CTO and the Information Security Officer also regularly meet with the CEO to update him on any cybersecurity risks and incidents affecting us. This ensures that the highest levels of management are kept abreast of the cybersecurity posture and potential risks facing Rhinebeck Bank.
In the event of a cybersecurity incident, our partnership with DeepSeas Security allows us to be equipped with a well-defined incident response plan that is adequately resourced. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevent future incidents. ​ 44 Table of Contents
In the event of a cybersecurity incident, our partnership with DeepSeas Security allows us to be equipped with a well-defined incident response plan that is adequately resourced. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevent future incidents. ​ 47 Table of Contents
The Board has established oversight mechanisms to ensure effective governance in managing these risks because it recognizes the significance of these threats to our operational integrity, shareholder and customer confidence and reputation. ​ Board of Directors Oversight ​ The Board is responsible for the oversight of cybersecurity risk management and is composed of members with diverse expertise in risk management, technology, and finance, thereby equipping them to manage and prevent cybersecurity risks effectively. ​ Management’s Role in Managing Risk ​ The risk management function is led by the General Counsel and Chief Risk Officer (“CRO”), the SVP, Information Technology, the Information Security Officer, and the virtual Chief Information Security Officer (“vCISO”) employed by DeepSeas Security, a cyber defense services business that partners with customers to reduce cybersecurity risks and the related costs.
The Board has established oversight mechanisms to ensure effective governance in managing these risks because it recognizes the significance of these threats to our operational integrity, shareholder and customer confidence and reputation. ​ Board of Directors Oversight ​ The Board is responsible for the oversight of cybersecurity risk management and is composed of members with diverse expertise in risk management, technology, and finance, thereby equipping them to manage and prevent cybersecurity risks effectively. ​ Management’s Role in Managing Risk ​ The risk management function is led by the Chief Credit and Risk Officer (“CRO”), the Chief Technology Officer (“CTO”), the Information Security Officer, and the virtual Chief Information Security Officer (“vCISO”) employed by DeepSeas Security, a cyber defense services business that partners with customers to reduce cybersecurity risks and the related costs.
We also employ a variety of preventative and detective tools designed to monitor, block, and provide alerts regarding suspicious activity, as well as to report on suspected advanced persistent 42 Table of Contents threats.
We also employ a variety of preventative and detective tools designed to 45 Table of Contents monitor, block, and provide alerts regarding suspicious activity, as well as to report on suspected advanced persistent threats.
These briefings encompass a broad range of topics, including: 43 Table of Contents ​ ● The current cybersecurity landscape and emerging threats; ● The status of ongoing cybersecurity initiatives and strategies; ● Incident reports and issues identified from any cybersecurity events; and ● Compliance with regulatory requirements and industry standards. ● Vulnerability/patch reporting for end points on the Bank’s network ​ In addition to our regularly scheduled Board meetings, the General Counsel and CRO, the SVP, Information Technology, the vCISO and the CEO regularly communicate regarding emerging or potential cybersecurity risks.
These briefings encompass a broad range of topics, including: 46 Table of Contents ​ ● The current cybersecurity landscape and emerging threats; ● The status of ongoing cybersecurity initiatives and strategies; ● Incident reports and issues identified from any cybersecurity events; and ● Compliance with regulatory requirements and industry standards. ● Vulnerability/patch reporting for end points on the Bank’s network ​ In addition to our regularly scheduled Board meetings, the CRO, the CTO, the vCISO and the CEO regularly communicate regarding emerging or potential cybersecurity risks.
This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework. ​ Risk Management Personnel ​ The vCISO and the Information Security Officer directly report to the General Counsel and CRO.
This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework. ​ Risk Management Personnel ​ The vCISO and the Information Security Officer directly report to the CRO. The vCISO, CRO, the CTO, and Information Security Officer meet regularly to discuss both internal and external cybersecurity risks and incidents.
Removed
The vCISO, CRO, the SVP, Information Technology, and Information Security Officer meet regularly to discuss both internal and external cybersecurity risks and incidents. The CRO, the SVP, Information Technology and the Information Security Officer also regularly meet with the CEO to update him on any cybersecurity risks and incidents affecting us.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties At December 31, 2024, we conducted business through our corporate office in Poughkeepsie and 13 other retail banking offices located in Rhinebeck, Fishkill, Goshen, Hopewell Junction, Hyde Park, Kingston, Middletown, Newburgh, Poughkeepsie (three branch offices), Red Hook and Warwick, as well as two representative offices in Montgomery and Albany.
Biggest changeItem 2. Properties At December 31, 2025, we conducted business through our corporate office and 12 retail banking offices located in Rhinebeck, Fishkill, Goshen, Hopewell Junction, Hyde Park, Kingston, Newburgh, Poughkeepsie (three branch offices), Red Hook and Warwick, one representative office in Albany to originate commercial and indirect automobile loans, and one representative office in Poughkeepsie for financial services.
We own six and lease nine properties, and own three other buildings situated on land controlled under long-term leases. At December 31, 2024, the net book value of our land, buildings, furniture, fixtures and equipment was $14.1 million.
We own six and lease nine properties, and own three other buildings situated on land controlled under long-term leases. At December 31, 2025, the net book value of our land, buildings, furniture, fixtures and equipment was $13.6 million.
Removed
In the first quarter of 2024, the Bank sold the Bank’s Beacon branch office in Wappingers Falls, New York, for $2.9 million to Heritage Financial Credit Union, a New York State chartered credit union. The sale included the land and building, including all branch premises and equipment.
Removed
All of the branch accounts were redomiciled to the customer’s nearest branch and all employees were placed in open positions. An impairment expense of $375,000 was taken on the property in December 2023.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAt December 31, 2024, we were not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. Item 4. Mine Safety Disclosures Not applicable. 45 Table of Contents PART II
Biggest changeAt December 31, 2025, we were not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. Item 4. Mine Safety Disclosures Not applicable. 48 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 45 PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 Item 6. [ Reserved] 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 47 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 62
Biggest changeItem 4. Mine Safety Disclosures 48 PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 49 Item 6. [ Reserved] 49 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 50 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 65

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSee “Item1. Business — Waivers of Dividends by Rhinebeck Bancorp, MHC.” In September 2022, the Board approved a stock repurchase plan pursuant to which the Company was authorized to repurchase up to 247,506 shares of its common stock, of which 47,506 shares remain available for repurchase. The repurchase plan has no expiration date.
Biggest changeSee “Item1. Business — Waivers of Dividends by Rhinebeck Bancorp, MHC.” In September 2022, the Board approved a stock repurchase plan pursuant to which the Company was authorized to repurchase up to 247,506 shares of its common stock, of which 39,398 shares remain available for repurchase.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The common stock of the Company is listed on The NASDAQ Capital Market under the symbol “RBKB”. At February 28, 2025, the Company had 332 stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The common stock of the Company is listed on The NASDAQ Capital Market under the symbol “RBKB”. At February 28, 2026, the Company had 302 stockholders of record.
Removed
No shares were repurchased under the stock repurchase plan during the three months ended December 31, 2024. ​ There were no sales of unregistered securities during the quarter ended December 31, 2024. ​
Added
The repurchase plan has no expiration date. ​ In July 2025, the Board approved a stock repurchase plan pursuant to which the Company is authorized to repurchase up to 540,000 shares of its common stock, of which all shares remain available for repurchase. The repurchase plan has no expiration date.
Added
No shares were repurchased under the stock repurchase plan during the three months ended December 31, 2025. ​ The following table provides information regarding repurchases of the Company’s common stock during the quarter ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares ​ Average Price Paid per share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ​ Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2025 ​ - ​ ​ - ​ - ​ - November 1 - 30, 2025 ​ - ​ ​ - ​ - ​ - December 1 - 31, 2025 ​ 8,108 ​ $ 11.76 ​ 8,108 ​ 579,398 Total ​ 8,108 ​ $ 11.76 ​ 8,108 ​ 579,398 ​ There were no sales of unregistered securities during the quarter ended December 31, 2025. ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDeferred loan fees included in interest income totaled $60,000 and $67,000 for the years ended December 31, 2024 and 2023, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2024 ​ 2023 ​ ​ Average Interest and ​ Average Interest and ​ ​ ​ Balance ​ Dividends ​ Yield/Cost ​ Balance ​ Dividends ​ Yield/Cost ​ ​ ​ (Dollars in thousands) Assets: ​ ​ ​ ​ Interest bearing depository accounts ​ $ 21,042 ​ $ 1,113 5.29 % $ 22,612 ​ $ 1,173 5.19 % Loans (1) ​ 987,212 ​ 58,371 5.91 % 1,006,506 ​ 55,077 5.47 % Available for sale securities ​ 177,214 ​ 3,799 2.14 % 208,058 ​ 3,964 1.91 % Other interest-earning assets ​ 4,689 ​ 475 10.13 % 5,223 ​ 445 8.52 % Total interest-earning assets ​ ​ 1,190,157 ​ ​ 63,758 5.36 % ​ 1,242,399 ​ ​ 60,659 4.88 % Non-interest-earning assets ​ 88,221 ​ ​ 90,389 ​ ​ Total assets ​ $ 1,278,378 ​ ​ $ 1,332,788 ​ ​ Liabilities and equity: ​ ​ ​ ​ ​ NOW accounts ​ $ 124,061 ​ $ 175 0.14 % $ 138,515 ​ $ 192 0.14 % Money market accounts ​ 187,615 ​ 4,971 2.65 % 232,666 ​ 6,154 2.64 % Savings accounts ​ 141,189 ​ 511 0.36 % 161,812 ​ 586 0.36 % Certificates of deposit ​ 339,133 ​ 15,528 4.58 % 282,838 ​ 10,574 3.74 % Total interest-bearing deposits ​ 791,998 ​ 21,185 2.67 % 815,831 ​ 17,506 2.15 % Escrow accounts ​ 9,210 ​ 108 1.17 % 10,032 ​ 111 1.11 % Federal Home Loan Bank advances ​ 82,915 ​ 3,787 4.57 % 96,409 ​ 4,634 4.81 % Subordinated debt ​ 5,155 ​ 390 7.57 % 5,155 ​ 381 7.39 % Other interest-bearing liabilities ​ ​ 1,043 ​ ​ 57 ​ 5.47 % ​ 1,146 ​ ​ 62 ​ 5.41 % Total other interest-bearing liabilities ​ 98,323 ​ 4,342 4.42 % 112,742 ​ 5,188 4.60 % Total interest-bearing liabilities ​ ​ 890,321 ​ ​ 25,527 2.87 % ​ 928,573 ​ ​ 22,694 2.44 % Non-interest-bearing deposits ​ 242,603 ​ ​ 268,103 ​ ​ Other non-interest-bearing liabilities ​ 27,515 ​ ​ 26,972 ​ ​ Total liabilities ​ ​ 1,160,439 ​ ​ ​ 1,223,648 ​ ​ Total stockholders’ equity ​ 117,939 ​ ​ 109,140 ​ ​ Total liabilities and stockholders’ equity ​ $ 1,278,378 ​ ​ $ 1,332,788 ​ ​ Net interest income ​ ​ $ 38,231 ​ ​ $ 37,965 ​ Interest rate spread ​ ​ 2.49 % ​ 2.44 % Net interest margin (2) ​ ​ 3.21 % ​ 3.06 % Average interest-earning assets to average interest-bearing liabilities ​ ​ 133.68 % ​ 133.80 % (1) Non-accruing loans are included in the outstanding loan balance.
Biggest changeDeferred loan fees included in interest income totaled $218,000 and $60,000 for the years ended December 31, 2025 and 2024, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ Average ​ ​ ​ Interest and ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Interest and ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance ​ Dividends ​ Yield/Cost ​ Balance ​ Dividends ​ Yield/Cost ​ ​ ​ (Dollars in thousands) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing depository accounts ​ $ 59,805 ​ $ 2,606 4.36 % $ 21,042 ​ $ 1,113 5.29 % Loans (1) ​ 980,540 ​ 61,157 6.24 % 987,212 ​ 57,835 5.86 % Available-for-sale securities ​ 150,063 ​ 4,872 3.25 % 177,214 ​ 3,799 2.14 % Other interest-earning assets ​ 2,784 ​ 238 8.55 % 4,689 ​ 475 10.13 % Total interest-earning assets ​ ​ 1,193,192 ​ ​ 68,873 5.77 % ​ 1,190,157 ​ ​ 63,222 5.31 % Non-interest-earning assets ​ 88,381 ​ ​ ​ ​ 88,221 ​ ​ ​ ​ Total assets ​ $ 1,281,573 ​ ​ ​ ​ $ 1,278,378 ​ ​ ​ ​ Liabilities and equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NOW accounts ​ $ 120,816 ​ $ 245 0.20 % $ 124,061 ​ $ 175 0.14 % Money market accounts ​ 222,719 ​ 5,828 2.62 % 187,615 ​ 4,971 2.65 % Savings accounts ​ 132,153 ​ 520 0.39 % 141,189 ​ 511 0.36 % Certificates of deposit ​ 355,027 ​ 13,814 3.89 % 339,133 ​ 15,528 4.58 % Total interest-bearing deposits ​ 830,715 ​ 20,407 2.46 % 791,998 ​ 21,185 2.67 % Escrow accounts ​ 9,705 ​ 110 1.13 % 9,210 ​ 108 1.17 % Federal Home Loan Bank advances ​ 40,117 ​ 1,616 4.03 % 82,915 ​ 3,787 4.57 % Subordinated debt ​ 5,155 ​ 347 6.73 % 5,155 ​ 390 7.57 % Other interest-bearing liabilities ​ ​ — ​ ​ — ​ — % ​ 1,043 ​ ​ 57 ​ 5.47 % Total other interest-bearing liabilities ​ 54,977 ​ 2,073 3.77 % 98,323 ​ 4,342 4.42 % Total interest-bearing liabilities ​ ​ 885,692 ​ ​ 22,480 2.54 % ​ 890,321 ​ ​ 25,527 2.87 % Non-interest-bearing deposits ​ 236,431 ​ ​ ​ ​ 242,603 ​ ​ ​ ​ Other non-interest-bearing liabilities ​ 30,127 ​ ​ ​ ​ 27,515 ​ ​ ​ ​ Total liabilities ​ ​ 1,152,250 ​ ​ ​ ​ ​ 1,160,439 ​ ​ ​ ​ Total stockholders’ equity ​ 129,323 ​ ​ ​ ​ 117,939 ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ $ 1,281,573 ​ ​ ​ ​ $ 1,278,378 ​ ​ ​ ​ Net interest income ​ ​ ​ $ 46,393 ​ ​ ​ ​ $ 37,695 ​ ​ Interest rate spread ​ ​ ​ ​ 3.23 % ​ ​ ​ 2.44 % Net interest margin (2) ​ ​ ​ ​ 3.89 % ​ ​ ​ 3.17 % Average interest-earning assets to average interest-bearing liabilities ​ ​ ​ ​ 134.72 % ​ ​ ​ 133.68 % (1) Non-accruing loans are included in the outstanding loan balance.
Net interest income is the difference between interest income, which is the income we earn on our loans and investments, and interest expense, which is the interest we pay on our deposits and borrowings. Provision for Credit Losses. The allowance for credit losses is a valuation allowance for the estimated lifetime credit losses.
Net interest income is the difference between interest income, which is the income we earn on our loans and investments, and interest expense, which is the interest we pay on our deposits and borrowings. Provision for Credit Losses on loans. The allowance for credit losses is a valuation allowance for the estimated lifetime credit losses.
We intend to continue to increase our originations of these types of loans in our primary market area and may consider hiring additional lenders as well as originating loans secured by properties located in areas that are contiguous to our current market area.
We intend to continue to increase originations of these types of loans in our primary market area and may consider hiring additional lenders as well as originating loans secured by properties located in areas that are contiguous to our current market area.
Liquidity Management We maintain liquid assets at levels we consider adequate to meet both our short-term and long-term liquidity needs. We adjust our liquidity levels to fund deposit outflows, repay our borrowings and to fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives.
Liquidity Management We maintain liquid assets at levels we consider adequate to meet both our short and long-term liquidity needs. We adjust our liquidity levels to fund deposit outflows, repay our borrowings and to fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives.
(2) Represents the difference between interest earned and interest paid, divided by average total interest earning assets. ​ ​ 58 Table of Contents Rate/Volume Analysis ​ The following table presents the effects of changing rates and volumes on our net interest income for the years indicated.
(2) Represents the difference between interest earned and interest paid, divided by average total interest earning assets. ​ ​ 61 Table of Contents Rate/Volume Analysis ​ The following table presents the effects of changing rates and volumes on our net interest income for the years indicated.
By following these strategies, we believe that we can be better positioned to react to changes in market interest rates. 59 Table of Contents Net Economic Value Simulation. We analyze our sensitivity to changes in interest rates through a net economic value of equity (“EVE”) model.
By following these strategies, we believe that we can be better positioned to react to changes in market interest rates. 62 Table of Contents Net Economic Value Simulation. We analyze our sensitivity to changes in interest rates through a net economic value of equity (“EVE”) model.
We currently calculate EVE under the assumptions that interest rates increase 100 to 400 basis points from current market rates and that interest rates decrease from 100 to 400 basis points from current market rates. The following table presents the estimated changes in our EVE that would result from changes in market interest rates at December 31, 2024.
We currently calculate EVE under the assumptions that interest rates increase 100 to 400 basis points from current market rates and that interest rates decrease from 100 to 400 basis points from current market rates. The following table presents the estimated changes in our EVE that would result from changes in market interest rates at December 31, 2025.
We believe that commercial real estate, multi-family real estate and commercial business lending offer opportunities to invest in our community, increase the overall yield earned on our loan portfolio and manage interest rate risk.
We believe that commercial real estate and commercial business lending offer opportunities to invest in our community, increase the overall yield earned on our loan portfolio and manage interest rate risk.
The $415,000 increase in our allowance for credit losses for loans was primarily driven by an increase in our collectively evaluated loans, partially offset by a decrease in the allowance for credit losses on individually analyzed loans.
The $186,000 decrease in our allowance for credit losses for loans was primarily driven by a decrease in our collectively evaluated loans, partially offset by an increase in the allowance for credit losses on individually analyzed loans.
The statutory tax rate was impacted by the benefits derived mainly from tax-exempt bond income and income received on the bank owned life insurance to arrive at the effective tax rate. ​ 57 Table of Contents Average Balance Sheets for the Years Ended December 31, 2024 and 2023 The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated.
The statutory tax rate was impacted by the benefits derived mainly from tax-exempt bond income and income received on the bank owned life insurance to arrive at the effective tax rate. ​ ​ 60 Table of Contents Average Balance Sheets for the Years Ended December 31, 2025 and 2024 The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated.
We set the interest rates on our deposits in an attempt to maintain a desired level of total deposits. 60 Table of Contents As reported in the Consolidated Statements of Cash Flows, our cash flows are classified for financial reporting purposes as operating, investing, or financing cash flows.
We set the interest rates on our deposits in an attempt to maintain a desired level of total deposits. 63 Table of Contents As reported in the consolidated statements of cash flows, our cash flows are classified for financial reporting purposes as operating, investing, or financing activities.
As previously mentioned, actual as well as forecasted increases in delinquencies and net charge-offs for automobile loans drove management’s increase in qualitative loss factors. ​ Our allowance for credit losses for individually analyzed loans is determined using the fair value of the collateral, less estimated selling costs, as applicable.
As previously mentioned, actual as well as forecasted decreases in delinquencies and net charge-offs for automobile loans drove management’s decrease in qualitative loss factors. ​ Our allowance for credit losses for individually analyzed loans is determined using the fair value of the collateral, less estimated selling costs, as applicable.
The most significant variables are portfolio growth and any changing historical loss trends within the specific business segments. As of December 31, 2024, the $264,000 decrease in our allowance for credit losses reflected the reduction in indirect automobile loan originations.
The most significant variables are portfolio growth and any changing historical loss trends within the specific business segments. As of December 31, 2025, $191,000 of the decrease in our allowance for credit losses reflected the reduction in indirect automobile loan originations.
Conversely, if all segment balances of our loan portfolio had fallen by 5% during the year ended December 31, 2024, our allowance for credit losses would have decreased by $418,000 to $8.1 million, holding all other variables constant. ​ The above hypothetical sensitivity calculation reflect the sensitivity of the allowance but lacks other qualitative adjustments that are part of the quarterly reserving process.
Conversely, if all segment balances of our loan portfolio had fallen by 5% during the year ended December 31, 2025, our allowance for credit losses would have decreased by $395,000 to $8.0 million, holding all other variables constant. ​ The above hypothetical sensitivity calculation reflect the sensitivity of the allowance but lacks other qualitative adjustments that are part of the quarterly reserving process.
The quantitative component of our allowance for credit losses on collectively evaluated loans, which is largely based on a selection of various economic forecasts, decreased by $151,000 as of December 31, 2024, when compared to December 31, 2023.
The quantitative component of our allowance for credit losses on collectively evaluated loans, which is largely based on a selection of various economic forecasts, decreased by $181,000 as of December 31, 2025, when compared to December 31, 2024.
The following accounting policies materially affect our reported earnings and financial condition and require significant judgments and estimates. ​ Allowance for Credit Losses ​ The allowance for credit losses is an estimate of current expected credit losses considering available information relevant to assessing collectability of cash flows over the contractual term of the financial assets necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date.
The following accounting policy materially affects our reported earnings and financial condition and requires significant judgments and estimates. ​ Allowance for Credit Losses ​ The allowance for credit losses is an estimate of current expected credit losses considering available information relevant to assessing collectability of cash flows over the contractual term of the financial assets necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date.
The estimation methodologies for credit losses on unfunded lending-related commitments are similar to the process for estimating credit losses for loans, although with the addition of a probability of draw estimate that is applied to each loan portfolio segment. ​ The Company’s allowance for credit losses for loans totaled $8.5 million and $8.1 million as of December 31, 2024 and December 31, 2023, respectively.
The estimation methodologies for credit losses on unfunded lending-related commitments are similar to the process for estimating credit losses for loans, although with the addition of a probability of draw estimate that is applied to each loan portfolio segment. ​ Our allowance for credit losses for loans totaled $8.4 million and $8.5 million as of December 31, 2025 and December 31, 2024, respectively.
Of this $1.1 million increase, $1.1 million is related to the provision for credit losses on loans, while the provision for credit losses on unfunded commitments decreased $43,000.
Of this decrease, $1.1 million is related to the provision for credit losses on loans, while the provision for credit losses on unfunded commitments decreased $78,000.
Based on our model, if all segments of the portfolio grew by an additional 5% on a year-over-year basis, our allowance for credit losses as of December 31, 2024 would have increased by $418,000 to $9.0 million, holding all other variables constant.
Based on our model, if all segments of the portfolio grew by an additional 5% on a year-over-year basis, our allowance for credit losses as of December 31, 2025 would have increased by $395,000 to $8.7 million, holding all other variables constant.
These agencies may require us to recognize adjustments to the allowance, based on their judgments about information available to them at the time of their examination. ​ The Company recorded a provision for credit losses of $2.8 million for the year ended December 31, 2024, an increase of $1.1 million, or 64.5%, as compared to $1.7 million for the year ended December 31, 2023.
These agencies may require us to recognize adjustments to the allowance, based on their judgments about information available to them at the time of their examination. ​ We recorded a provision for credit losses of $1.7 million for the year ended December 31, 2025, a decrease of $1.1 million, or 40.8%, as compared to $2.8 million for the year ended December 31, 2024.
Our allowance for credit losses was 0.88% of total loans and 206.56% of non-performing loans at December 31, 2024 as compared to 0.81% of total loans and 194.31% of non-performing loans at December 31, 2023. Federal Home Loan Bank Stock.
Our allowance for credit losses was 0.87% of total loans and 225.76% of non-performing loans at December 31, 2025 as compared to 0.88% of total loans and 206.56% of non-performing loans at December 31, 2024. Federal Home Loan Bank Stock.
Our reciprocal deposits obtained through the CDARS and ICS networks totaled $25.4 million and $13.5 million, respectively, at December 31, 2024. At December 31, 2023, we had reciprocal deposits obtained through CDARS and ICS networks of $23.4 million and $16.7 million, respectively. We had no brokered deposits at December 31, 2024 and 2023. ​ Borrowed Funds.
Our reciprocal deposits obtained through the CDARS and ICS networks totaled $21.9 million and $13.8 million, respectively, at December 31, 2025. At December 31, 2024, we had reciprocal deposits obtained through CDARS and ICS networks of $25.4 million and $13.5 million, respectively. We had no brokered deposits at December 31, 2025 and 2024. ​ Borrowed Funds.
Our effective tax rate for the year ended December 31, 2024 was 21.18% compared to 21.71% in 2023.
Our effective tax rate for the year ended December 31, 2025 was 20.81% compared to 21.18% in 2024.
The continued growth in time deposits was primarily due to depositors seeking higher interest rates, which contributed to the decrease in non-interest bearing and lower interest-bearing deposits.
The growth in money market accounts and time deposits were primarily due to depositors seeking higher interest rates, which contributed to the decrease in non-interest bearing and lower interest-bearing deposits.
Income tax provision decreased by $3.5 million, or 290.1%, to a net benefit of $2.3 million for the year ended December 31, 2024 as compared to an expense of $1.2 million for the year ended December 31, 2023, primarily due to a pre-tax net loss recorded in 2024.
Income tax provision increased by $5.0 million to an expense of $2.6 million for the year ended December 31, 2025 as compared to a benefit of $2.3 million for the year ended December 31, 2024, primarily due to pre-tax net income recorded in 2025 as compared to a pre-tax net loss recorded in 2024.
(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. ​ 53 Table of Contents Comparison of Financial Condition at December 31, 2024 and December 31, 2024 Total Assets.
(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.
For 2024, we did not engage in any off-balance-sheet transactions other than loan origination commitments and standby letters of credit in the normal course of our lending activities. 61 Table of Contents Impact of Inflation and Changing Prices The financial statements and related notes of the Company have been prepared in accordance with United States GAAP.
For 2025, we did not engage in any off-balance-sheet transactions other than loan origination commitments and standby letters of credit in the normal course of our lending activities. 64 Table of Contents Impact of Inflation and Changing Prices The financial statements and related data presented herein have been prepared in accordance with U.S.
The Company's ratio of average equity to average assets was 9.23% for the year ended December 31, 2024 and 8.19% for the year ended December 31, 2023. ​ Comparison of Operating Results for the Years Ended December 31, 2024 and December 31, 2023 Net Income.
Our ratio of average equity to average assets was 10.09% for the year ended December 31, 2025 and 9.23% for the year ended December 31, 2024. ​ Comparison of Operating Results for the Years Ended December 31, 2025 and December 31, 2024 Net Income.
The Company adopted the CECL model beginning on January 1, 2023, which requires that we make assumptions of credit quality, macroeconomic factors and conditions, and loan composition which are inherently subjective due to the use of estimates that are susceptible to significant revision as more information becomes available or as future events occur.
Under the CECL model, we are required to make assumptions of credit quality, macroeconomic factors and conditions, and loan composition. The calculation is inherently subjective due to the use of estimates that are susceptible to significant revision as more information becomes available or as future events occur.
In comparison, the Company’s allowance related to indirect automobile loans totaled nearly $4.2 million as of December 31, 2023, a reduction of nearly $200,000 from January 1, 2024. The allowance amount attributed to qualitative adjustments at year end for indirect automobile loans was $1.7 million, an increase of approximately $400,000 from January 1, 2024.
In comparison, our allowance related to indirect automobile loans totaled nearly $4.0 million as of December 31, 2024, a reduction of nearly $1.2 million. The allowance amount attributed to qualitative adjustments at year end for indirect automobile loans was $1.3 million, a decrease of approximately $410,000 from December 31, 2024.
The increase to the provision was primarily attributable to higher charge-offs and updates to assumptions on prepayments and other qualitative and quantitative components in our expected credit loss analysis. ​ Net charge-offs increased $333,000, or 16.1%, to $2.4 million for the year ended December 31, 2024.
The decrease to the provision was primarily attributable to lower net charge-offs and updates to assumptions on prepayments and other qualitative and quantitative components in our expected credit loss analysis. ​ Net charge-offs decreased $462,000, or 19.3%, to $1.9 million for the year ended December 31, 2025 as compared to $2.4 million for the year ended December 31, 2024.
The decrease was primarily attributable to decreased loan balances of indirect automobile loans and an update to the Loss Driver Analysis that had a favorable impact on the Multifamily Real Estate Loan probability of default (“PD”) and loss given default (“LGD”) factors in the CECL model. ​ The qualitative component of our allowance for credit losses (“ACL”), which is largely based on management’s judgment of qualitative loss factors, was relatively unchanged during the first half of 2024, but was adjusted in the second half to account for increased delinquency and higher net charge-offs.
The decrease was primarily attributable to decreased loan balances of indirect automobile loans, partially offset by an update to our loss driver analysis that had an unfavorable impact on the commercial real estate loan probability of default (“PD”) and loss given default (“LGD”) factors in the CECL model. ​ The qualitative component of our allowance for credit losses (“ACL”), which is largely based on management’s judgment of qualitative loss factors, decreased during 2025 to account for decreased delinquency and lower net charge- 53 Table of Contents offs.
FHLB stock decreased $2.6 million, or 39.2%, to $4.0 million at December 31, 2024, from $6.5 million at December 31, 2023, primarily due to a reduction in additional shares required to support borrowing activity as advances from the FHLB decreased. Premises and Equipment .
FHLB stock decreased $2.0 million, or 50.6%, to $2.0 million at December 31, 2025, from $4.0 million at December 31, 2024, primarily due to a reduction in the shares required to support borrowing activity as advances from the FHLB decreased. Deferred Tax Assets.
The net interest margin was 3.21% for the year ended December 31, 2024 and 3.06% for the year ended December 31, 2023. The ratio of average interest-earning assets to average interest-bearing liabilities decreased 0.9% to 133.68%. ​ 55 Table of Contents Interest Income. Interest income increased $3.1 million, or 5.1%, to $63.8 million for 2024 from $60.7 million for 2023.
The net interest margin was 3.89% for the year ended December 31, 2025 and 3.17% for the year ended December 31, 2024. The ratio of average interest-earning assets to average interest-bearing liabilities increased 0.8% to 134.72%. ​ 58 Table of Contents Interest Income. Interest income increased $5.7 million, or 8.9%, to $68.9 million for 2025 from $63.2 million for 2024.
The Company also retained moderated qualitative adjustments related to economic conditions as inflationary pressures and higher interest rates continue to have an adverse effect on both consumers and businesses. ​ The following table shows the change in the ACL for collectively evaluated loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ December 31, 2023 ​ Increase/(Decrease) ​ ​ (In thousands) Commercial real estate: ​ ​ ​ Construction ​ $ — ​ $ — ​ $ — Non-residential ​ $ 2,675 ​ $ 2,313 ​ $ 362 Multifamily ​ $ 313 ​ $ 387 ​ $ (74) Residential real estate ​ $ 575 ​ $ 346 ​ $ 229 Commercial and industrial ​ $ 664 ​ $ 574 ​ $ 90 Consumer: ​ ​ ​ ​ ​ Indirect automobile ​ $ 3,994 ​ $ 4,182 ​ $ (188) Home equity ​ $ 84 ​ $ 48 ​ $ 36 Other consumer ​ $ 75 ​ $ 58 ​ $ 17 Total ​ $ 8,380 ​ $ 7,908 ​ $ 472 ​ The Company’s allowance for credit losses for collectively evaluated loans totaled $8.4 million as of December 31, 2024, which included nearly $4.0 million of allowance related to indirect automobile loans.
We also retained moderated qualitative adjustments related to economic conditions as inflationary pressures and higher interest rates continue to have an adverse effect on both consumers and businesses. ​ The following table shows the change in the ACL for collectively evaluated loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ December 31, 2024 ​ Increase/(Decrease) ​ ​ (In thousands) Commercial real estate: ​ ​ ​ ​ ​ ​ Construction ​ $ — ​ $ — ​ $ — Non-residential ​ $ 3,142 ​ $ 2,675 ​ $ 467 Multifamily ​ $ 490 ​ $ 313 ​ $ 177 Commercial and industrial ​ $ 580 ​ $ 664 ​ $ (84) Residential real estate ​ $ 740 ​ $ 575 ​ $ 165 Consumer: ​ ​ ​ ​ ​ ​ Indirect automobile ​ $ 2,824 ​ $ 3,994 ​ $ (1,170) Home equity ​ $ 90 ​ $ 84 ​ $ 6 Other consumer ​ $ 66 ​ $ 75 ​ $ (9) Total ​ $ 7,932 ​ $ 8,380 ​ $ (448) ​ Our allowance for credit losses for collectively evaluated loans totaled $7.9 million as of December 31, 2025, which included $2.8 million of allowance related to indirect automobile loans.
Deposits. Deposits decreased $9.7 million, or 0.9%, to $1.02 billion at December 31, 2024 from $1.03 billion at December 31, 2023. Interest bearing accounts increased $1.9 million, or 0.2%, to $782.7 million while non-interest bearing balances decreased $11.7 million, or 4.7%, finishing the year at $238.1 million.
Deposits increased $76.6 million, or 7.5%, to $1.10 billion at December 31, 2025 from $1.02 billion at December 31, 2024. Interest bearing accounts increased $87.4 million, or 11.2%, to $870.1 million while non-interest bearing balances decreased $10.9 million, or 4.6%, finishing the year at $227.3 million.
The percentage of overdue account balances to total loans decreased to 1.71% as of December 31, 2024, from 1.90% as of December 31, 2023 and non-performing assets decreased $72,000, or 1.7%, to $4.1 million at December 31, 2024. ​ Non-Interest Income.
The percentage of overdue account balances to total loans decreased to 1.52% at December 31, 2025 from 1.71% at December 31, 2024, while non-performing assets decreased $434,000, or 10.5%, to $3.7 million at December 31, 2025. ​ Non-Interest Income.
The amount of the obligations presented in the table reflect principal amounts only and exclude the amount of interest we are obligated to pay. Also excluded from the table are a number of obligations to be settled in cash.
The following table summarizes our main contractual obligations and other commitments to make future payments as of December 31, 2025. The amount of the obligations presented in the table reflect principal amounts only and exclude the amount of interest we are obligated to pay. Also excluded from the table are a number of obligations to be settled in cash.
The increase in interest bearing accounts represented an increase in time deposits of $19.6 million, or 6.2%, which was offset by a decrease transaction accounts including NOW, savings and money market accounts of $17.6 million, or 3.8%.
The increase in interest bearing accounts represented an increase in money market deposits of $53.4 million, or 28.3%, and time deposits of $39.3 million, or 11.6%, which was offset by a decrease in savings accounts of $5.4 million, or 4.1%.
Net cash provided by operating activities was $8.5 million and $7.0 million for the years ended December 31, 2024 and 2023, respectively. These amounts differ from our net income because of certain cash receipts and disbursements that did not affect net income for the respective periods.
Net cash provided by operating activities was $11.7 million and $8.5 million for the years ended December 31, 2025 and 2024, respectively. These amounts differ from net income due to certain non-cash items and changes in operating assets and liabilities that did not affect net income during the respective periods.
The increase was primarily due to a $16.6 million decrease in accumulated other comprehensive loss reflecting the results of the balance sheet restructuring, which was partially offset by a net loss of $8.6 million.
The increase was primarily due to net income of $10.0 million and a decrease in accumulated other comprehensive loss of $5.0 reflecting the results of the balance sheet restructuring.
GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature.
GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating costs.
The Company’s automobile loan portfolio 49 Table of Contents has continued to experience elevated delinquency rates, and this combined with a simultaneous decrease in collateral values, has resulted in increases to forecasted net charge-offs. Moderate qualitative adjustments were made to account for both of these risks.
A more conservative underwriting approach on our automobile loan portfolio has decreased delinquency rates, and this combined with a simultaneous increase in collateral values, has resulted in decreases to forecasted net charge-offs. Moderate qualitative adjustments were made to account for both of these risks.
Total liabilities decreased $65.6 million, or 5.5%, to $1.13 billion at December 31, 2024 from $1.20 billion at December 31, 2023 primarily due to a decrease in advances from the FHLB of $58.3 million, or 45.5% and a decrease in deposits of $9.7 million, or 0.9%, partially offset by an increase in accrued expenses and other liabilities of $2.3 million, or 8.6%.
Total liabilities increased $31.0 million, or 2.7%, to $1.16 billion at December 31, 2025 from $1.13 billion at December 31, 2024 primarily due to an increase in deposits of $76.6 million, partially offset by a decrease in advances from the FHLB of $44.6 million, or 64.0%. Deposits.
At December 31, 2024, we had the following main sources of availability of liquid funds and borrowings: ​ ​ ​ ​ (In thousands) Total Available liquid funds: ​ ​ Cash and cash equivalents ​ $ 37,484 Unencumbered securities ​ ​ 64,002 Availability of borrowings: ​ ​ ​ Zions Bank line of credit ​ ​ 10,000 Pacific Coast Bankers Bank line of credit ​ ​ 50,000 FHLB secured line of credit ​ ​ 236,637 FRB secured line of credit ​ ​ 215,573 Total available sources of funds ​ $ 613,696 ​ The Bank has access to a preapproved secured line of credit with the FHLB not to exceed $627.3 million at December 31, 2024.
At December 31, 2025, we had the following main sources of availability of liquid funds and borrowings: ​ ​ ​ ​ (In thousands) ​ ​ ​ Total Available liquid funds: ​ ​ ​ Cash and cash equivalents ​ $ 101,986 Unencumbered securities ​ ​ 59,424 Availability of borrowings: ​ ​ ​ Zions Bank line of credit ​ ​ 10,000 Pacific Coast Bankers Bank line of credit ​ ​ 50,000 FHLB secured line of credit ​ ​ 337,158 FRB secured line of credit ​ ​ 155,646 Total available sources of funds ​ $ 714,214 ​ The Bank has access to a preapproved secured line of credit with the FHLB.
This decrease was primarily due to a decrease of individually analyzed indirect automobile loans, with additional decreases in commercial and commercial real estate loans also contributing to the overall decrease. ​ As noted above, we consider a number of variables in our evaluation of the adequacy of the allowance for credit losses.
As of December 31, 2025, our allowance for credit losses on individually analyzed loans increased $262,000 from December 31, 2024. This increase was primarily due to an increase of individually analyzed commercial and indirect automobile loans. ​ As noted above, we consider a number of variables in our evaluation of the adequacy of the allowance for credit losses.
A favorable tax settlement would result in a reduction in our effective income tax rate in the period of resolution. ​ 51 Table of Contents Selected Financial Data The following selected consolidated financial data sets forth certain financial highlights of the Company and should be read in conjunction with the audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ 2024 2023 ​ ​ (In thousands) Selected Financial Condition Data: ​ ​ ​ ​ ​ ​ Total assets ​ $ 1,255,765 ​ $ 1,313,202 Cash and cash equivalents ​ 37,484 ​ 22,129 Securities available-for-sale ​ 159,947 ​ 191,985 Loans receivable, net ​ 971,779 ​ 1,008,851 Bank owned life insurance ​ 30,193 ​ 30,031 Goodwill and other intangibles ​ 2,401 ​ 2,481 ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ 1,133,932 ​ 1,199,517 Deposits ​ 1,020,783 ​ 1,030,503 Federal Home Loan Bank advances ​ 69,773 ​ 128,064 Subordinated debt ​ 5,155 ​ 5,155 ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity ​ $ 121,833 ​ $ 113,685 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2024 2023 ​ ​ (In thousands, except per share data) Selected Operating Data: ​ ​ ​ ​ ​ ​ Interest and dividend income ​ $ 63,758 ​ $ 60,659 Interest expense ​ 25,527 ​ 22,694 Net interest income ​ 38,231 ​ 37,965 Provision for credit losses ​ 2,800 ​ 1,702 Net interest income after provision for credit losses ​ 35,431 ​ 36,263 Non-interest income ​ (9,520) ​ 5,780 Non-interest expense ​ 36,848 ​ 36,429 (Loss) income before income tax expense ​ (10,937) ​ 5,614 Income tax (benefit) expense ​ (2,317) ​ 1,219 Net (loss) income ​ $ (8,620) ​ $ 4,395 (Loss) earnings per share (diluted) ​ $ (0.80) ​ $ 0.40 ​ 52 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ At or For the Year Ended December 31, ​ 2024 2023 Performance Ratios: (Loss) return on average assets (1) (0.67) % 0.33 % (Loss) return on average equity (2) (7.31) % 4.03 % Interest rate spread (3) 2.49 % 2.44 % Net interest margin (4) 3.21 % 3.06 % Efficiency ratio (5) 82.34 % 83.28 % Average interest-earning assets to average interest-bearing liabilities 133.68 % 133.80 % Total gross loans to total assets 77.64 % 76.80 % Equity to assets (6) 9.23 % 8.19 % ​ ​ ​ ​ ​ ​ Capital Ratios (7) : Tier 1 capital (to adjusted total assets) 10.07 % 10.10 % Tier I capital (to risk-weighted assets) 11.81 % 11.96 % Total capital (to risk-weighted assets) 12.63 % 12.70 % Common equity Tier 1 capital (to risk-weighted assets) 11.81 % 11.96 % ​ ​ ​ ​ ​ ​ Asset Quality Ratios: Allowance for credit losses as a percent of total loans 0.88 % 0.81 % Allowance for credit losses as a percent of non-performing loans 206.56 % 194.31 % Net charge-offs to average outstanding loans (0.24) % (0.21) % Non-performing loans as a percent of total loans 0.42 % 0.41 % Non-performing assets as a percent of total assets 0.33 % 0.32 % ​ ​ ​ ​ ​ ​ Other Data: Book value per common share ​ $ 10.98 ​ $ 10.27 ​ Number of offices 15 16 (1) Represents net income divided by average total assets.
As such, this does not necessarily reflect the nature and extent of future changes in the allowance for reasons including increases or decreases in qualitative adjustments, changes in the risk profile of the portfolio, changes in the macroeconomic scenario and/or the range of scenarios under management consideration. ​ ​ 54 Table of Contents Selected Financial Data The following selected consolidated financial data sets forth certain financial highlights of the Company and should be read in conjunction with the audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (In thousands) Selected Financial Condition Data: ​ ​ ​ ​ ​ ​ Total assets ​ $ 1,301,766 ​ $ 1,255,765 Cash and cash equivalents ​ 101,986 ​ 37,484 Securities available-for-sale ​ 162,203 ​ 159,947 Loans receivable, net ​ 953,385 ​ 971,779 Bank owned life insurance ​ 30,996 ​ 30,193 Goodwill and other intangibles ​ 2,341 ​ 2,401 ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ 1,164,914 ​ 1,133,932 Deposits ​ 1,097,340 ​ 1,020,783 Federal Home Loan Bank advances ​ 25,153 ​ 69,773 Subordinated debt ​ 5,155 ​ 5,155 ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity ​ $ 136,852 ​ $ 121,833 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (In thousands, except per share data) Selected Operating Data: ​ ​ ​ ​ ​ ​ Interest and dividend income ​ $ 68,873 ​ $ 63,222 Interest expense ​ 22,480 ​ 25,527 Net interest income ​ 46,393 ​ 37,695 Provision for credit losses ​ 1,659 ​ 2,800 Net interest income after provision for credit losses ​ 44,734 ​ 34,895 Non-interest income (loss) ​ 6,971 ​ (8,984) Non-interest expense ​ 39,020 ​ 36,848 Income (loss) before income tax expense ​ 12,685 ​ (10,937) Income tax expense (benefit) ​ 2,640 ​ (2,317) Net income (loss) ​ $ 10,045 ​ $ (8,620) Earnings (loss) per share (diluted) ​ $ 0.92 ​ $ (0.80) ​ 55 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ At or For the Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Performance Ratios: ​ ​ Return (loss) on average assets (1) 0.78 % (0.67) % Return (loss) on average equity (2) 7.77 % (7.31) % Interest rate spread (3) 3.23 % 2.44 % Net interest margin (4) 3.89 % 3.17 % Efficiency ratio (5) 73.12 % 82.34 % Average interest-earning assets to average interest-bearing liabilities 134.72 % 133.68 % Total loans to total assets 73.61 % 77.64 % Equity to assets (6) 10.09 % 9.23 % ​ ​ ​ ​ ​ ​ Capital Ratios (7) : ​ ​ Total capital (to risk-weighted assets) 14.40 % 12.63 % Tier I capital (to risk-weighted assets) 13.57 % 11.81 % Common equity Tier 1 capital (to risk-weighted assets) 13.57 % 11.81 % Tier 1 capital (to adjusted total assets) 10.62 % 10.07 % ​ ​ ​ ​ ​ ​ Asset Quality Ratios: ​ ​ Allowance for credit losses as a percent of total loans 0.87 % 0.88 % Allowance for credit losses as a percent of non-performing loans 225.76 % 206.56 % Net charge-offs to average outstanding loans 0.20 % 0.24 % Non-performing loans as a percent of total loans 0.39 % 0.42 % Non-performing assets as a percent of total assets 0.28 % 0.33 % ​ ​ ​ ​ ​ ​ Other Data: ​ ​ Book value per common share ​ $ 12.28 ​ $ 10.98 ​ Number of offices (8) 15 15 (1) Represents net income divided by average total assets.
Non-accrual loans decreased $47,000, or 1.1%, to $4.1 million at December 31, 2024 from $4.2 million at December 31, 2023. Non-performing assets decreased $72,000, or 1.7%. Non-performing assets included $25,000 in other real estate owned as of December 31, 2023. The Company had no other real estate owned as of December 31, 2024.
Non-accrual loans decreased $434,000, or 10.5%, to $3.7 million at December 31, 2025 from $4.1 million at December 31, 2024. We had no other real estate owned as of December 31, 2025 or 2024.
Diluted loss per share was $0.80 for the year ended December 31, 2024, compared to diluted earnings per share of $0.40 for the year ended December 31, 2023. The decrease in net income for the year ended December 31, 2024 was primarily due to a balance sheet restructuring, which resulted in a $16.0 million loss on sale of securities.
The increase in net income for the year ended December 31, 2025 was primarily due to a balance sheet restructuring in 2024, which resulted in a $16.0 million loss on sale of securities. Net income was also impacted by an increase in net interest income, a decrease in the provision for credit losses and an increase in non-interest expense.
The decrease was primarily due to a decrease in indirect automobile loans of $98.6 million, or 25.0%, reflecting a strategic decision to decrease that loan portfolio as a percentage of the balance sheet. At December 31, 2024, indirect automobile loans were 23.5% of assets, compared to 30.0% at December 31, 2023.
Net loans receivable were $953.4 million at December 31, 2025, a decrease of $18.4 million, or 1.9%, as compared to $971.8 million at December 31, 2024. The decrease was primarily due to a decrease in indirect automobile loans of $81.9 million, or 27.7%, reflecting a strategic decision to decrease that loan portfolio as a percentage of the balance sheet.
These excluded items are reflected in our consolidated balance sheet and include deposits with no stated maturity, trade payables, and accrued interest payable. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 (In thousands) Total One Year or Less After One but within Five Years After 5 Years Payments Due: ​ ​ ​ ​ ​ ​ ​ ​ Federal Home Loan Bank advances ​ $ 69,773 ​ $ 46,450 ​ $ 23,323 ​ $ — Operating lease agreements ​ ​ 10,443 ​ ​ 757 ​ ​ 2,872 ​ ​ 6,814 Subordinated debt ​ ​ 5,155 ​ ​ — ​ ​ — ​ ​ 5,155 Time deposits with stated maturity dates ​ ​ 337,639 ​ ​ 288,303 ​ ​ 49,336 ​ ​ — Total contractual obligations ​ $ 423,010 ​ $ 335,510 ​ $ 75,531 ​ $ 11,969 ​ Off-Balance Sheet Arrangements.
These excluded items are reflected in our consolidated balance sheet and include deposits with no stated maturity, trade payables, and accrued interest payable. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 (In thousands) ​ ​ ​ Total ​ ​ ​ One Year or Less ​ ​ ​ After One but within Five Years ​ ​ ​ After 5 Years Payments Due: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal Home Loan Bank advances ​ $ 25,153 ​ $ 1,614 ​ $ 23,539 ​ $ — Operating lease agreements ​ ​ 8,739 ​ ​ 692 ​ ​ 2,550 ​ ​ 5,497 Subordinated debt ​ ​ 5,155 ​ ​ — ​ ​ — ​ ​ 5,155 Time deposits with stated maturity dates ​ ​ 376,940 ​ ​ 335,787 ​ ​ 41,153 ​ ​ — Total contractual obligations ​ $ 415,987 ​ $ 338,093 ​ $ 67,242 ​ $ 10,652 ​ Off-Balance Sheet Arrangements.
Non-interest loss totaled $9.5 million for the year ended December 31, 2024, a decrease of $15.3 million, from non-interest income of $5.8 million in 2023, due primarily to the $16.0 million loss on sale of investment securities resulting from the previously mentioned balance sheet restructuring.
Non-interest income totaled $7.0 million for the year ended December 31, 2025, compared to a net loss of $9.0 million for 2024, representing an increase of $16.0 million. The net loss in 2024 was primarily attributable to a $16.0 million loss on the sale of investment securities in connection with our 2024 balance sheet restructuring.
The average balance of the total interest-bearing deposits decreased by $23.8 million, while the cost increased 52 basis points. The average balance of FHLB advances decreased $13.5 million, while the cost decreased 24 basis points. Provision for Credit Losses. The Company records a provision for credit losses, which is recognized in earnings.
The average balance of the total interest-bearing deposits increased by $38.7 million (primarily in money market accounts and certificates of deposit), while the cost decreased 21 basis points. Provision for Credit Losses. We record a provision for credit losses, which is recognized in earnings.
This was primarily due to a 43 basis point increase in the overall cost of interest bearing liabilities to 2.87% for 2024 from 2.44% for 2023, partially offset by a decrease in average interest bearing liability balances of $38.3 million, or 4.1%, year over year.
This was primarily due to a 33 basis point decrease in the overall cost of interest bearing liabilities to 2.54% for 2025 from 2.87% for 2024 along with a decrease in average interest bearing liability balances of $4.6 million, or 0.5%, year over year. The average balance of FHLB advances decreased $42.8 million, while the cost decreased 54 basis points.
Investment securities available for sale decreased $32.0 million, or 16.7%, to $159.9 million at December 31, 2024 from $192.0 million at December 31, 2023. The decrease was due to $75.0 million of sales and $32.1 million of paydowns and maturities, partially offset by purchases of $71.4 million and an unrealized holding gain of $3.7 million.
Investment Securities Available for Sale. Investment securities available for sale increased $2.3 million, or 1.4%, to $162.2 million at December 31, 2025 from $159.9 million at December 31, 2024. The increase was due to $49.0 million in purchases and a $5.3 million reduction in unrealized losses, partially offset by $52.2 million in paydowns, calls, and maturities.
Non-interest income decreased $15.3 million, reflecting the loss on securities, while non-interest expenses increased $419,000, or 1.2%, as compared to 2023. Taxes decreased by $3.5 million due to the 2024 net loss, in contrast to the net income in 2023. ​ Net Interest Income.
Interest and dividend income increased $5.7 million, or 8.9%, interest expense decreased $3.0 million, or 11.9%, and the provision for credit losses decreased $1.1 million, or 40.8%. Non-interest income increased $16.0 million, reflecting the loss on securities in 2024, while non-interest expenses increased $2.2 million, or 5.9%, as compared to 2024.
The decrease in average interest earning assets during 2024 compared to 2023 included decreases of $19.3 million in average loan balances and $30.8 million in available for sale securities. Interest Expense. Interest expense increased $2.8 million, or 12.5%, to $25.5 million for 2024 from $22.7 million for 2023.
The increase in average interest earning assets during 2025 compared to 2024 included an increase in interest-bearing depository accounts of $38.8 million, partially offset by decreases of $27.2 million and $6.7 million in available for sale securities and average loan balances, respectively. Interest Expense.
Net loss for the year ended December 31, 2024 was $8.6 million, compared to net income of $4.4 million for the year ended December 31, 2023, a decrease of $13.0 million, or 296.1%.
Net income for the year ended December 31, 2025 was $10.0 million, compared to net loss of $8.6 million for the year ended December 31, 2024, an increase of $18.7 million. Diluted earnings per share was $0.92 for the year ended December 31, 2025, compared to diluted loss per share of $0.80 for the year ended December 31, 2024.
The costs of interest bearing liabilities increased 43 basis points to 2.87% in 2024 from 2.44% in 2023 driven by increases in general market rates, competitive market forces and a greater percentage of higher-yielding certificates of deposits and FHLB advances. The interest rate spread increased by 5 basis points to 2.49%.
The costs of interest bearing liabilities decreased 33 basis points to 2.54% in 2025 from 2.87% in 2024 driven by competitive market forces, a declining interest rate environment and a decrease in Federal Home Loan Bank advances. The interest rate spread increased by 79 basis points to 3.23%.
All estimated changes presented in the table are within the policy limits approved by our Board of Directors. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Economic Value as a ​ ​ Net Economic Value ​ ​ Percentage of Assets ​ Dollar Dollar Percent ​ EVE Percent Basis Point Change in Interest Rates ​ Amount ​ Change ​ Change ​ ​ Ratio ​ Change ​ ​ (Dollars in thousands) ​ ​ ​ ​ ​ 400 ​ $ 133,642 ​ $ (39,731) (22.9) % ​ 11.64 % (16.80) % 300 ​ 143,022 ​ (30,351) (17.5) % ​ 12.24 % (12.56) % 200 ​ 152,913 ​ (20,460) (11.8) % ​ 12.84 % (8.25) % 100 ​ 163,272 ​ (10,101) (5.8) % ​ 13.44 % (3.94) % 0 ​ 173,373 ​ — — % ​ 13.99 % — % (100) ​ ​ 174,142 ​ ​ 769 0.4 % ​ 13.79 % (1.49) % (200) ​ ​ 169,738 ​ ​ (3,635) ​ (2.1) % ​ 13.19 % (5.75) % (300) ​ ​ 157,999 ​ ​ (15,374) ​ (8.9) % ​ 12.06 % (13.81) % (400) ​ ​ 138,693 ​ ​ (34,680) (20.0) % ​ 10.39 % (25.78) % ​ The table above shows that in the event of an instantaneous 200 basis point increase in interest rates, our EVE would decrease by 11.8%; and in the event of an instantaneous 200 basis point decrease in interest rates, our EVE would decrease by 2.1%.
All estimated changes presented in the table are within the policy limits approved by our board of directors. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Economic Value as a ​ ​ Net Economic Value ​ ​ Percentage of Assets ​ ​ ​ ​ Dollar ​ ​ ​ Dollar ​ ​ ​ Percent ​ ​ ​ ​ EVE ​ ​ ​ Percent Basis Point Change in Interest Rates ​ Amount ​ Change ​ Change ​ ​ Ratio ​ Change ​ ​ (Dollars in thousands) ​ ​ ​ ​ ​ 400 ​ $ 192,105 ​ $ 6,666 3.6 % ​ 15.87 % 10.6 % 300 ​ 191,657 ​ 6,218 3.4 % ​ 15.59 % 8.7 % 200 ​ 190,620 ​ 5,181 2.8 % ​ 15.25 % 6.3 % 100 ​ 188,716 ​ 3,277 1.8 % ​ 14.85 % 3.5 % 0 ​ 185,439 ​ — — % ​ 14.34 % — % (100) ​ ​ 179,879 ​ ​ (5,560) (3.0) % ​ 13.69 % (4.6) % (200) ​ ​ 169,813 ​ ​ (15,626) ​ (8.4) % ​ 12.71 % (11.4) % (300) ​ ​ 154,136 ​ ​ (31,303) ​ (16.9) % ​ 11.36 % (20.8) % (400) ​ ​ 136,930 ​ ​ (48,509) (26.2) % ​ 9.88 % (31.1) % ​ The table above shows that in the event of an instantaneous 200 basis point increase in interest rates, our EVE would increase by 2.8% and in the event of an instantaneous 200 basis point decrease in interest rates, our EVE would decrease by 8.4%.
The change in the securities portfolio reflected a balance sheet restructuring in which the Company sold lower-yielding securities and reinvested the proceeds in higher-yielding securities with a shorter duration. In September 2024, the Bank sold $58.6 million of available-for-sale securities.
The $5.3 million reduction in unrealized losses was primarily due to the balance sheet restructuring in 2024 in which we sold lower-yielding securities and reinvested the proceeds in higher-yielding securities with a shorter duration. Net Loans.
Past due loans decreased $2.5 million, or 12.8%, between December 31, 2023 and December 31, 2024, finishing at $16.7 million, or 1.7%, of total loans, down from $19.2 million, or 1.9%, of total loans at year-end 2023. The decrease was most notable in non-residential commercial real-estate, as a few large loans were brought current and one loan was paid off.
Past due loans decreased $2.2 million, or 13.0%, between December 31, 2024 and December 31, 2025, finishing at $14.5 million, or 1.52%, of total loans, down from $16.7 million, or 1.71%, of total loans at year-end 2024. The decrease was most notable in indirect automobile loans, reflecting the positive impact of more conservative underwriting standards.
The average yields on investment securities increased to 2.14% for 2024 from 1.91% for 2023. Average interest earning assets decreased $52.2 million from $1.24 billion for the year ended December 31, 2023 to $1.19 billion for the year ended December 31, 2024.
The average yield on interest-bearing depository accounts decreased to 4.36% for 2025 from 5.29% for 2024. Average interest earning assets increased $3.0 million from $1.190 billion for the year ended December 31, 2024 to $1.193 billion for the year ended December 31, 2025.
The decrease in total assets was partially offset by an increase in cash and cash equivalents of $15.4 million, or 69.4%, and an increase in other assets of $4.3 million, or 22.4% Cash and Cash Equivalents.
The increase in total assets was partially offset by decreases in net loans of $18.4 million, or 1.9%, deferred tax assets of $3.2 million, or 39.1%, and FHLB stock of $2.0 million, or 50.6%. Cash and Cash Equivalents.
Net cash provided by investing activities was $74.7 million in 2024 as compared to $14.7 million in 2023. Net cash provided by investing activities principally reflects our investment security and loan activities in the respective periods.
Net cash provided by investing activities was $21.2 million in 2025 compared to $74.7 million in 2024. Investing cash flows primarily reflect activity in the securities portfolio and changes in loan balances.
Non-interest expense totaled $36.8 million for the year ended December 31, 2024, an increase of $419,000, or 1.2%, over 2023. The increase was primarily due to a $913,000 increase in salaries and benefits primarily due to higher production commissions and higher medical insurance costs, an increase of $33,000 in marketing expense and a $26,000 increase in data processing costs.
For the year ended December 31, 2025, non-interest expense totaled $39.0 million, representing an increase of $2.2 million, or 5.9%, compared to $36.8 million in 2024. The increase was driven primarily by higher compensation and operating costs across several categories.
The increase in residential real estate loans reflected the strategic decision to hold new production in our portfolio instead of selling these loans. Allowance for Credit Losses. During the year, the allowance for credit losses increased $415,000, or 5.1%, reflecting an increase of expected losses in our loan portfolio.
The increase in commercial real estate loans was primarily due to four loans totaling $43.3 million secured by a 2-4 family unit, a retail shopping center, a medical building and an auto dealership. The increase in residential real estate loans reflected the strategic decision to hold new production in our portfolio instead of selling these loans. Allowance for Credit Losses.
The Company does not have any excludable out-of-period items or adjustments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 ​ ​ ​ ​ Compared to Year Ended ​ ​ ​ ​ December 31, 2023 ​ ​ ​ ​ Increase (Decrease) ​ ​ ​ ​ Due to ​ ​ ​ Volume Rate Net Interest income: ​ ​ ​ ​ Interest bearing depository accounts ​ ​ $ (83) ​ $ 23 ​ $ (60) ​ Loans receivable ​ ​ (1,072) ​ 4,366 ​ 3,294 ​ Available for sale securities ​ ​ (627) ​ 463 ​ (164) ​ Other interest-earning assets ​ ​ (48) ​ 77 ​ 29 ​ Total interest-earning assets ​ ​ (1,830) ​ 4,929 ​ 3,099 ​ Interest expense: ​ ​ ​ ​ ​ Deposits ​ ​ (524) ​ 4,204 ​ 3,680 ​ Escrow accounts ​ ​ (9) ​ 6 ​ (3) ​ Federal Home Loan Bank advances ​ ​ (625) ​ (223) ​ (848) ​ Subordinated debt ​ ​ — ​ 9 ​ 9 ​ Other interest-bearing liabilities ​ ​ (6) ​ 1 ​ (5) ​ Total interest-bearing liabilities ​ ​ (1,164) ​ 3,997 ​ 2,833 ​ Net (decrease) increase in net interest income ​ ​ $ (666) ​ $ 932 ​ $ 266 ​ ​ In 2024, net interest income increased by $266,000 driven by a $932,000 gain from improved rates, despite a $666,000 loss from declining volumes.
We do not have any excludable out-of-period items or adjustments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2025 ​ ​ ​ ​ Compared to Year Ended ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Increase (Decrease) ​ ​ ​ ​ Due to ​ ​ ​ ​ ​ ​ Volume ​ ​ ​ Rate ​ ​ ​ Net ​ ​ ​ Interest income: ​ ​ ​ ​ ​ ​ ​ Interest bearing depository accounts ​ ​ $ 1,721 ​ $ (228) ​ $ 1,493 ​ Loans receivable ​ ​ (393) ​ 3,715 ​ 3,322 ​ Available for sale securities ​ ​ (651) ​ 1,723 ​ 1,072 ​ Other interest-earning assets ​ ​ (171) ​ (65) ​ (236) ​ Total interest-earning assets ​ ​ 506 ​ 5,145 ​ 5,651 ​ Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ ​ 1,004 ​ (1,782) ​ (778) ​ Escrow accounts ​ ​ 5 ​ (4) ​ 1 ​ Federal Home Loan Bank advances ​ ​ (1,767) ​ (404) ​ (2,171) ​ Subordinated debt ​ ​ — ​ (43) ​ (43) ​ Other interest-bearing liabilities ​ ​ (28) ​ (28) ​ (56) ​ Total interest-bearing liabilities ​ ​ (786) ​ (2,261) ​ (3,047) ​ Net increase in net interest income ​ ​ $ 1,292 ​ $ 7,406 ​ $ 8,698 ​ ​ Management of Market Risk General.
The yield on interest earning assets increased 48 basis points to 5.36% in 2024 from 4.88% in 2023, primarily due to the rising interest rate environment in 2024.
The yield on interest earning assets increased 46 basis points to 5.77% in 2025 from 5.31% in 2024, primarily due to the balance sheet restructuring and a higher percentage of commercial real estate loans.
The increase was primarily due to a $291,000 commercial real estate loan charged-off in 2024. Net charge-offs on indirect automobile loans remained relatively stable at $1.4 million in both 2024 and 2023.
The decrease was primarily due to decreased net charge-offs on indirect automobile and commercial loans, partially offset by increased net charge-offs on commercial real estate loans.
The increase resulted primarily from increased asset yields, offset by a decrease in the average balance. The average yield on interest-bearing depository accounts increased to 5.29% for 2024 from 5.19% for 2023. The average yield on loans increased to 5.91% for 2024 from 5.47% in 2023.
The increase resulted primarily from increased asset yields and an increase in the average balance of cash and cash equivalents. The average yield on loans increased to 6.24% for 2025 from 5.86% in 2024. The average yield on investment securities increased to 3.25% for 2025 from 2.14% for 2024.
A valuation allowance, if needed, reduces deferred tax assets to the amounts expected to be realized. ​ 47 Table of Contents Business Strategy Based on an extensive review of the current opportunities in our primary market area as well as our resources and capabilities, we are pursuing the following business strategies: ● Prudent management of our indirect automobile loan portfolio.
A valuation allowance, if needed, reduces deferred tax assets to the amounts expected to be realized. ​ 50 Table of Contents Business Strategy ​ In October 2025, Matthew J.
As a result, changes in market interest rates have a greater impact on performance than the effects of inflation. ​ ​
Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation.
Our indirect automobile loan portfolio totaled $295.7 million, or 30.3% of our total loan portfolio and 23.5% of total assets, at December 31, 2024 as compared to $394.2 million, or 39.1% of our total loan portfolio and 30.0% of total assets, at December 31, 2023. ● Focus on commercial real estate, multi-family real estate and commercial business lending.
Our commercial real estate loan portfolio (which includes multi-family real estate and commercial construction loans) and commercial business loan portfolio have grown from $223.0 million and $83.2 million, or 32.9% and 12.2% of our total loan portfolio, respectively, at December 31, 2019 to $534.7 million and $91.5 million, or 55.8% and 9.5% of our total loan portfolio, respectively, at December 31, 2025.
Advances from the FHLB decreased $58.3 million, or 45.5%, from $128.1 million at December 31, 2023 to $69.8 million at December 31, 2024 as proceeds from investment sales were used to pay down debt. Stockholders’ Equity. Stockholders' equity increased $8.1 million, or 7.2%, to $121.8 million at December 31, 2024.
Advances from the FHLB decreased $44.6 million, or 64.0%, from $69.8 million at December 31, 2024 to $25.2 million at December 31, 2025 primarily due to increased cash balances and deposit growth, which were used to reduce outstanding borrowings. Stockholders’ Equity. Stockholders' equity increased $15.0 million, or 12.3%, to $136.9 million at December 31, 2025.
The decrease was primarily due to decreases in: (i) net loans receivable of $37.1 million, or 3.7%, (ii) available for sale securities of $32.0 million, or 16.7%, (iii) premises and equipment of $3.5 million, or 19.7%, (iv) Federal Home Loan Bank stock of $2.5 million, or 39.2%, and (v) deferred tax assets of $1.8 million, or 18.3%.
The increase was primarily due to increases in: cash and cash equivalents of $64.5 million, or 172.1%, available for sale securities of $2.3 million, or 1.4%, and other assets of $2.1 million, or 9.0%.
Net interest income increased $266,000, or 0.7%, to $38.2 million for the year ended December 31, 2024, as compared to $38.0 million for the year ended December 31, 2023. The increase was primarily driven by higher yields on interest-earning asset balances, which were partially offset by higher costs on interest-bearing liability balances.
Taxes increased by $5.0 million due to the 2025 net income, in contrast to the net loss in 2024. ​ Net Interest Income. Net interest income increased $8.7 million, or 23.1%, to $46.4 million for the year ended December 31, 2025, as compared to $37.7 million for the year ended December 31, 2024.
Removed
We originate automobile loans through a network of 91 automobile dealerships (61 in the Hudson Valley region and 30 in Albany, New York).
Added
Smith was appointed President and Chief Executive Officer of Rhinebeck Bank and its holding companies, Rhinebeck Bancorp and Rhinebeck Bancorp, MHC, to lead Rhinebeck Bank into its next phase of growth and innovation. Mr. Smith’s executive leadership experience includes overseeing community bank operations, spearheading the implementation of digital banking and banking-as-a-service programs and integrating acquired financial institutions.
Removed
Over the past three years, we have actively decreased our indirect automobile loan portfolio by decreasing loan originations through increased pricing and conservative underwriting criteria, and we plan to continue this strategy to further reduce exposure while focusing on higher-yielding opportunities within our portfolio.

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