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What changed in Orange County Bancorp, Inc. /DE/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Orange County Bancorp, Inc. /DE/'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.

+361 added−325 removedSource: 10-K (2026-03-16) vs 10-K (2025-03-17)

Top changes in Orange County Bancorp, Inc. /DE/'s 2025 10-K

361 paragraphs added · 325 removed · 303 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

105 edited+9 added−9 removed181 unchanged
Biggest changeFor example, a risk weight of 0% is assigned to cash and U.S. government securities, a risk weight of 50% is generally assigned to prudently underwritten first lien one-to four-family residential mortgages, a risk weight of 100% is assigned to commercial and consumer loans, a risk weight of 150% is assigned to certain past due loans or are on non-accrual status and a risk weight of between 0% to 600% is assigned to permissible equity interests, depending on certain specified factors. 19 Table of Contents In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.
Biggest changeFor example, a risk weight of 0% is assigned to cash and U.S. government securities, a risk weight of 50% is generally assigned to prudently underwritten first lien one-to four-family residential mortgages, a risk weight of 100% is assigned to commercial and consumer loans, a risk weight of 150% is assigned to certain past due loans or are on non-accrual status and a risk weight of between 0% to 600% is assigned to permissible equity interests, depending on certain specified factors.
Other Regulations The Bank’s operations are also subject to federal laws applicable to credit transactions, such as: • The Truth-In-Lending Act, and Regulation Z promulgated thereunder, governing disclosures of credit terms to consumer borrowers; • The Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one-to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; 24 Table of Contents • The Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • The Equal Credit Opportunity Act and other fair lending laws, prohibiting discrimination on the basis of race, religion, sex and other prohibited factors in extending credit; • The Fair Credit Reporting Act, governing the use of credit reports on consumers and the provision of information to credit reporting agencies; • Unfair or Deceptive Acts or Practices laws and regulations; • The Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and • The rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
Other Regulations The Bank’s operations are also subject to federal laws applicable to credit transactions, such as: • The Truth-In-Lending Act, and Regulation Z promulgated thereunder, governing disclosures of credit terms to consumer borrowers; 24 Table of Contents • The Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one-to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; • The Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • The Equal Credit Opportunity Act and other fair lending laws, prohibiting discrimination on the basis of race, religion, sex and other prohibited factors in extending credit; • The Fair Credit Reporting Act, governing the use of credit reports on consumers and the provision of information to credit reporting agencies; • Unfair or Deceptive Acts or Practices laws and regulations; • The Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and • The rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
The Company’s main office is located at 212 Dolson Avenue, Middletown, New York 10940. By combining the high-level personal service and relationship-based focus of a community bank with the extensive suite of financial products and services offered by our larger competitors, we believe we can capitalize on the substantial growth opportunities available in our market areas.
The Company’s main office is located at 212 Dolson Avenue, Middletown, New York 10940. By combining the high-level personal service and relationship-based focus of a community bank with the extensive suite of financial products, technology, and services offered by our larger competitors, we believe we can capitalize on the substantial growth opportunities available in our market areas.
We also offer a variety of deposit accounts to businesses and consumers, including checking accounts and a full line of municipal banking accounts. These activities, together with our 16 branch offices and one loan production office, generate a stable source of low-cost core deposits and a diverse loan portfolio with attractive risk-adjusted yields.
We also offer a variety of deposit accounts to businesses and consumers, including checking accounts and a full line of municipal banking accounts. These activities, together with our 16 branch offices and one loan production office, continue to generate a stable source of low-cost core deposits and a diverse loan portfolio with attractive risk-adjusted yields.
We also believe our senior management’s availability for consultation on a daily basis offers customers a quicker response time on loan applications and other transactions, as well as greater confidence that these transactions will close, than competitors, whose decisions, in some cases, are being made in distant headquarters.
We also believe our senior management’s availability for meetings and consultation on a daily basis offers customers a quicker response time on loan applications and other transactions, as well as greater confidence that these transactions will close, than competitors, whose decisions, in some cases, are being made in distant headquarters.
We view all of our recent and expected openings and locations as natural and logical extensions for the Bank and consistent with our geographic footprint. Our operating markets have demographic, economic and competitive dynamics that we believe are favorable to continued execution of our strategic plan: Orange County.
We view all of our recent openings and locations as natural and logical extensions for the Bank and consistent with our geographic footprint. Our operating markets have demographic, economic and competitive dynamics that we believe are favorable to continued execution of our strategic plan: Orange County.
In evaluating each potential loan relationship, we adhere to a disciplined underwriting evaluation process including but not limited to the following: • understanding the borrower’s financial condition and ability to repay the loan; • determining whether the borrower is a capable manager; • understanding the specific purpose of the loan; • verifying that the primary, secondary and tertiary sources of repayment are adequate in relation to the amount and structure of the loan; • assessing the economic environment in which the loan would be granted; and • ensuring that each loan is properly documented with perfected liens on collateral.
In evaluating each potential loan relationship, we adhere to a disciplined underwriting evaluation process including but not limited to the following: • understanding the borrower’s financial condition and ability to repay the loan; • determining whether the borrower is a capable manager and operator of the business; • understanding the specific purpose of the loan; • verifying that the primary, secondary and tertiary sources of repayment are adequate in relation to the amount and structure of the loan; • assessing the economic environment in which the loan would be granted; and • ensuring that each loan is properly documented with perfected liens on collateral.
State member banks deemed by the FRB to be “critically undercapitalized” also may not make any payment of principal or interest on certain subordinated debt, extend credit for a highly leveraged transaction, or enter into any material transactions outside the 20 Table of Contents ordinary course of business after 60 days of obtaining such status, and are subject to the appointment of a receiver or conservator within 270 days after obtaining such status. ​ Dividends Under federal and state law and applicable regulations, a state member bank may generally declare a dividend, without approval from the NYSDFS or FRB, in an amount equal to its year-to-date net income plus the prior two years’ net income that is still available for dividend.
State member banks deemed by the FRB to be “critically undercapitalized” also may not make any payment of principal or interest on certain subordinated debt, extend credit for a highly leveraged transaction, or enter into any material transactions outside the ordinary course of business after 60 days of obtaining such status, and are subject to the appointment of a receiver or conservator within 270 days after obtaining such status. ​ Dividends Under federal and state law and applicable regulations, a state member bank may generally declare a dividend, without approval from the NYSDFS or FRB, in an amount equal to its year-to-date net income plus the prior two years’ net income that is still available for dividend.
Through its wholly owned subsidiaries, Orange Bank & Trust Company, a New York state-chartered trust company (the “Bank”) and Hudson Valley Investment Advisors, Inc., a registered investment advisor (“HVIA”), the Company offers full- service commercial and consumer banking products and services and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments and individuals in the Lower Hudson Valley region, the New York metropolitan area and nearby markets in Connecticut and New Jersey.
Through its wholly owned subsidiaries, Orange Bank & Trust Company, a New York state-chartered trust company (the “Bank”) and Orange Investment Advisors, Inc., a registered investment advisor (“OIA”), the Company offers full- service commercial and consumer banking products and services and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments and individuals in the Lower Hudson Valley region, the New York metropolitan area and nearby markets in Connecticut and New Jersey.
This concierge-level service integrates and leverages all four of the Company’s core businesses — deposits, loans, asset management (through our investment adviser subsidiary HVIA) and trust and estate services — to provide dedicated, personalized attention to clients with larger, more complex banking needs who engage in significant business with us. 6 Table of Contents Trust & Wealth Management.
This concierge-level service integrates and leverages all four of the Company’s core businesses — deposits, loans, asset management (through our investment adviser subsidiary OIA) and trust and estate services — to provide dedicated, personalized attention to clients with larger, more complex banking needs who engage in significant business with us. 6 Table of Contents Trust & Wealth Management.
Wealth Management Business Segment Through HVIA and Orange Bank & Trust Company’s trust department, we offer a range of trust services, including managing customer investments, serving as custodian of customer assets, and providing fiduciary services including serving as trustee and personal representative of estates. Our clients include individuals, trusts, businesses, employer-sponsored retirement plans and charitable organizations.
Wealth Management Business Segment Through OIA and Orange Bank & Trust Company’s trust department, we offer a range of trust services, including managing customer investments, serving as custodian of customer assets, and providing fiduciary services including serving as trustee and personal representative of estates. Our clients include individuals, trusts, businesses, employer-sponsored retirement plans and charitable organizations.
We offer asset management, financial planning and wealth management services through our wholly owned subsidiary, HVIA, an SEC registered investment advisor, which we acquired in November 2012. HVIA manages investments for institutional and high-net-worth individuals, which includes endowments, pension plans and not for profits, as well as sub-advisory investments.
We offer asset management, financial planning and wealth management services through our wholly owned subsidiary, OIA, an SEC registered investment advisor, which we acquired in November 2012. OIA manages investments for institutional and high-net-worth individuals, which includes endowments, pension plans and not for profits, as well as sub-advisory investments.
Investment Advisory Regulations We offer wealth management and investment advisory services through HVIA, a wholly owned subsidiary of the Company. HVIA is a registered investment advisor under the Investment Advisors Act of 1940, as amended, and as such, is supervised by the SEC. HVIA is also subject to various other federal laws and state licensing and/or registration requirements.
Investment Advisory Regulations We offer wealth management and investment advisory services through OIA, a wholly owned subsidiary of the Company. OIA is a registered investment advisor under the Investment Advisors Act of 1940, as amended, and as such, is supervised by the SEC. OIA is also subject to various other federal laws and state licensing and/or registration requirements.
Specifically, the CRE Guidance provides that a bank has a concentration in CRE lending if (1) total reported loans for construction, land development, and other land represent 100% or more of total risk-based capital; or (2) total reported loans secured by multi-family properties, non-farm non-residential properties (excluding those that are owner-occupied), and loans for construction, land development, and other land represent 300% or more of total risk-based capital and the bank’s commercial real estate loan portfolio has 18 Table of Contents increased 50% or more during the prior 36 months.
Specifically, the CRE Guidance provides that a bank has a concentration in CRE lending if (1) total reported loans for construction, land development, and other land represent 100% or more of total risk-based capital; or (2) total reported loans secured by multi-family properties, non-farm non-residential properties (excluding those that are owner-occupied), and loans for construction, land development, and other land represent 300% or more of total risk-based capital and the bank’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months.
However, the ability to attract and maintain deposits and the rates paid on these deposits has been and will continue to be significantly affected by market conditions. Borrowings We maintain diverse funding sources including borrowing lines at the FHLB, two commercial banks and the Federal Reserve Bank discount window.
However, the ability to attract and maintain deposits and the rates paid on these deposits has been and will continue to be significantly affected by market conditions. Borrowings We maintain diverse funding sources including borrowing lines at the FHLB, two commercial banks and the Federal Reserve Bank.
Management regularly reviews the status of the watch list and classified assets portfolio as well as the larger credits in the portfolio. 14 Table of Contents On January 1, 2023, the Company adopted ASU 2016-13 (Topic 326), which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit.
Management regularly reviews the status of the watch list and classified assets portfolio as well as the larger credits in the portfolio. On January 1, 2023, the Company adopted ASU 2016-13 (Topic 326), which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit.
That vision continues to drive the Company today, as we serve customers in Orange, Rockland, and Westchester Counties and the Bronx through a network of 16 branches, one loan production office and approximately 225 employees.
That vision continues to drive the Company today, as we serve customers in Orange, Rockland, and Westchester Counties and the Bronx through a network of 16 branches, one loan production office and approximately 235 employees.
As a member, we are required to own capital stock in the FHLB and are authorized to apply for advances on the security of such stock and certain of our whole first mortgage loans and 16 Table of Contents other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to creditworthiness have been met.
As a member, we are required to own capital stock in the FHLB and are authorized to apply for advances on the security of such stock and certain of our whole first mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to creditworthiness have been met.
Aggregate loans by a bank to its insiders and insiders’ related interests may not exceed 15% of the bank’s unimpaired capital and unimpaired surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all 21 Table of Contents of the extensions of credit outstanding to all of these persons would exceed the bank’s unimpaired capital and unimpaired surplus.
Aggregate loans by a bank to its insiders and insiders’ related interests may not exceed 15% of the bank’s unimpaired capital and unimpaired surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all of the extensions of credit outstanding to all of these persons would exceed the bank’s unimpaired capital and unimpaired surplus.
The flow of deposits is influenced significantly by general economic conditions, changes in money market and other prevailing interest rates and competition. The variety of deposit accounts offered allows us to be competitive in obtaining funds and responding to changes in consumer demand. Based on experience, we believe that our deposits are relatively stable.
The flow of deposits is influenced significantly by general economic conditions, changes in money market and other prevailing interest rates and competition. The variety of deposit accounts offered allows us to be competitive in obtaining funds and responding to changes in consumer demand. Based on experience, we believe that our deposits are 16 Table of Contents relatively stable.
Tier 2 capital primarily includes capital instruments and related surplus meeting specified requirements and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt. Also included in Tier 2 capital is the allowance for loan losses limited to a maximum of 1.25% of risk-weighted assets.
Tier 2 capital primarily includes capital instruments and related surplus meeting specified requirements and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory 19 Table of Contents convertible securities, intermediate preferred stock and subordinated debt. Also included in Tier 2 capital is the allowance for loan losses limited to a maximum of 1.25% of risk-weighted assets.
Significant penalties and fines, as well as other supervisory orders may be imposed on a financial institution for non-compliance with these requirements. In addition, for financial institutions engaging in a merger transaction, federal bank regulatory agencies must consider the effectiveness of the financial institution’s efforts to combat money laundering activities.
Significant penalties and fines, as well as other supervisory orders may be imposed on a financial institution for non-compliance with these requirements. In addition, for financial institutions engaging in a merger transaction, federal bank regulatory agencies must consider the effectiveness of the financial 23 Table of Contents institution’s efforts to combat money laundering activities.
These policies must establish loan portfolio diversification standards, prudent underwriting standards (including loan-to-value limits) that are clear and measurable, loan administration procedures, and documentation, approval and reporting requirements. The real estate lending policies must reflect consideration of the federal bank regulators’ Interagency Guidelines for Real Estate Lending Policies that have been adopted.
These policies must establish loan 18 Table of Contents portfolio diversification standards, prudent underwriting standards (including loan-to-value limits) that are clear and measurable, loan administration procedures, and documentation, approval and reporting requirements. The real estate lending policies must reflect consideration of the federal bank regulators’ Interagency Guidelines for Real Estate Lending Policies that have been adopted.
The Bank was classified as well capitalized at December 31, 2024. ​ State member banks that have insufficient capital are subject to certain mandatory and discretionary supervisory measures.
The Bank was classified as well capitalized at December 31, 2025. ​ State member banks that have insufficient capital are subject to certain mandatory and discretionary supervisory measures.
The Bank has adopted policies and procedures to comply with these requirements. Privacy and Cybersecurity Laws 23 Table of Contents The Bank is subject to a variety of federal and state privacy laws, which govern the collection, safeguarding, sharing and use of customer information, and require that financial institutions have in place policies regarding information privacy and security.
The Bank has adopted policies and procedures to comply with these requirements. Privacy and Cybersecurity Laws The Bank is subject to a variety of federal and state privacy laws, which govern the collection, safeguarding, sharing and use of customer information, and require that financial institutions have in place policies regarding information privacy and security.
We believe the local economies in our geographic footprint offer us significant growth opportunities we can capitalize on through our focus on personalized service, and our ability to realize greater economies of scale than smaller community banks. Leverage our Relationships and Service Capabilities to Drive Organic Growth.
We believe the local economies in our geographic footprint offer us significant growth opportunities we can capitalize on through our focus on personalized service, and our ability to realize greater economies of scale than smaller community banks. 8 Table of Contents Leverage our Relationships and Service Capabilities to Drive Organic Growth.
We generally require borrowers to obtain an attorney’s title opinion or title insurance, and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. We have not engaged in sub-prime residential mortgage originations. Home Equity Lending.
We generally require borrowers to obtain an attorney’s title opinion or title 12 Table of Contents insurance, and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. We have not engaged in sub-prime residential mortgage originations. Home Equity Lending.
This limit may be increased by an additional 10% for loans secured by readily marketable collateral having a market value, as determined by reliable and continuously available price quotations, at least equal to the amount of funds outstanding.
This limit may be increased by an additional 10% for loans secured by readily marketable collateral having a market value, as determined by reliable and continuously available price quotations, at least equal to the amount of funds 14 Table of Contents outstanding.
All such transactions are required to be on terms and conditions that are consistent with safe and sound banking practices and no transaction may involve the acquisition of any “low quality asset” from an affiliate unless certain conditions are satisfied.
All such transactions are required to be on terms and conditions that are consistent with safe and sound banking practices and no transaction may involve the acquisition of any “low quality asset” from an 21 Table of Contents affiliate unless certain conditions are satisfied.
The CRA does not establish specific lending requirements or programs for financial institutions, nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community.
The CRA does not establish specific lending requirements or programs for financial institutions, nor does it limit an institution’s 22 Table of Contents discretion to develop the types of products and services that it believes are best suited to its particular community.
Some of the important highlights of our recent history include: • In 2012, the Company acquired HVIA, a registered investment advisor. • In 2018, the Company completed a private placement of its common stock raising $16.0 million in gross proceeds. • In 2020, the Company completed a private placement of subordinated debt of $20.0 million. • In August 2021, the Company completed an initial public offering (“IPO”) of its common stock resulting in gross proceeds of $38.5 million.
Some of the important highlights of our recent history include: • In 2012, the Company acquired HVIA, a registered investment advisor, now known as OIA. • In 2018, the Company completed a private placement of its common stock raising $16.0 million in gross proceeds. • In 2020, the Company completed a private placement of subordinated debt of $20.0 million. • In August 2021, the Company completed an initial public offering (“IPO”) of its common stock resulting in gross proceeds of $38.5 million.
With a population estimated as of July 1, 2024 at 411,767 and a median household income of $96,497 as of the same date, the local economy is distinct and remains somewhat insulated from economic activity in New York City and Westchester County, and includes a growing number of service, warehousing, and logistical businesses.
With a population estimated as of July 1, 2024 at 411,767 and a median household income of $97,178 as of the same date, the local economy is distinct and remains somewhat insulated from economic activity in New York City and Westchester County, and includes a growing number of service, warehousing, and logistical businesses.
With a median household income of $49,036 estimated as of July 1, 2024, the Bronx remains home to a significant number of health care & social assistance businesses and non-profit organizations. A persistent need for housing in the region generates constant growth through demand for construction lending and refinancing activity.
With a median household income of $48,676 estimated as of July 1, 2024, the Bronx remains home to a significant number of health care & social assistance businesses and non-profit organizations. A persistent need for housing in the region generates constant growth through demand for construction lending and refinancing activity.
The 17 Table of Contents regulatory structure gives the regulatory agencies extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes.
The regulatory structure gives the regulatory agencies extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes.
The Company continues to enjoy particularly strong growth in its newer markets of Rockland and Westchester Counties, which offer significant growth potential as a function of market size and demographics, while Orange County continues to represent approximately 40% of the Bank’s deposits as of December 31, 2024. Private Banking .
The Company continues to enjoy particularly strong growth in its newer markets of Rockland and Westchester Counties, which offer significant growth potential as a function of market size and demographics, while Orange County continues to represent approximately 42% of the Bank’s deposits as of December 31, 2025. Private Banking .
Like our core banking business, our trust and advisory services have also achieved significant recent milestones, with combined assets under management (AUM) in the two groups aggregating $1.8 billion at December 31, 2024, in spite of very competitive market conditions.
Like our core banking business, our trust and advisory services have also achieved significant recent milestones, with combined assets under management (AUM) in the two groups aggregating $1.9 billion at December 31, 2025, in spite of very competitive market conditions.
The Bank did not elect into the CBLR framework and at December 31, 2024, the Bank’s capital exceeded all applicable requirements.
The Bank did not elect into the CBLR framework and at December 31, 2025, the Bank’s capital exceeded all applicable requirements.
The Bank’s capital conservation buffer was greater than 2.5% of risk-weighted assets at December 31, 2024.
The Bank’s capital conservation buffer was greater than 2.5% of risk-weighted assets at December 31, 2025.
This was formalized with the opening of new branch locations in Westchester and Rockland Counties in 2015 and has since driven meaningful market share growth in these markets.
This was formalized with the opening of new 7 Table of Contents branch locations in Westchester and Rockland Counties in 2015 and has since driven meaningful market share growth in these markets.
Recent developments in the region include significant population growth during the COVID 19 pandemic as professionals relocated away from urban markets. Westchester and Rockland Counties. Westchester and Rockland serve as our primary growth markets, and we believe their combination of size, attractive demographics, strong growth characteristics, and economic diversity provide significant opportunities to grow our business.
The region had significant population growth during the COVID 19 pandemic as professionals relocated away from urban markets. Westchester and Rockland Counties. Westchester and Rockland serve as our primary growth markets, and we believe their combination of size, attractive demographics, strong growth characteristics, and economic diversity provide significant opportunities to grow our business.
We generally do not sell loans and did not sell any loans during the years ended December 31, 2024 or 2023. ​ 13 Table of Contents Credit Risk Management We control credit risk both through disciplined underwriting of each transaction, as well as active credit management processes and procedures to manage risk and minimize loss throughout the life of a transaction.
We generally do not sell loans and did not sell any loans during the years ended December 31, 2025 or 2024. Credit Risk Management We control credit risk both through disciplined underwriting of each transaction, as well as active credit management processes and procedures to manage risk and minimize loss throughout the life of a transaction.
To qualify for this additional 10% the Bank must perfect a security interest in the collateral and the collateral must have a market value at all times of at least 100% of the loan amount that exceeds the 15% general limit. At December 31, 2024, our regulatory limit on loans-to-one borrower was approximately $43.0 million. Ongoing Credit Risk Management.
To qualify for this additional 10% the Bank must perfect a security interest in the collateral and the collateral must have a market value at all times of at least 100% of the loan amount that exceeds the 15% general limit. At December 31, 2025, our regulatory limit on loans-to-one borrower was approximately $55.2 million. Ongoing Credit Risk Management.
Loan Approval Authority . Our lending activities follow written, non-discriminatory, underwriting standards and loan origination procedures established by our Board of Directors and management. The approval of two out of three of the Chief Executive Officer, the Chief Lending Officer or the Executive Vice President-Rockland Regional President is generally required for lending relationships up to $1.0 million.
Loan Approval Authority . Our lending activities follow written, non-discriminatory, underwriting standards and loan origination procedures established by our Board of Directors and management. The approval of two out of three of the Chief Executive Officer, the Chief Lending Officer or the Chief Credit Officer is generally required for lending relationships up to $1.0 million.
We also evaluate the borrower’s business and industry as well as the economic conditions affecting that business. 11 Table of Contents Commercial and industrial loans generally have a greater credit risk than one- to four-family mortgage loans.
We also evaluate the borrower’s business and industry as well as the economic conditions affecting that business. Commercial and industrial loans generally have a greater credit risk than one- to four-family mortgage loans.
At December 31, 2024, we had $1.8 billion of assets under management in a fiduciary, custodial or agency capacity for customers. These assets are not assets of Orange Bank & Trust Company or HVIA and therefore are not included in the consolidated balance sheets included in the Annual Report on Form 10-K.
At December 31, 2025, we had $1.9 billion of assets under management in a fiduciary, custodial or agency capacity for customers. These assets are not assets of Orange Bank & Trust Company or OIA and therefore are not included in the consolidated balance sheets included in the Annual Report on Form 10-K.
This has evolved in intervening years, most explicitly in a name change to Orange Bank & Trust Company in 2016, and trust services remain a vital and vibrant part of our business today.
This has evolved through the years, most explicitly in a name change to Orange Bank & Trust Company in 2016, and trust services remain a vital part of our business today.
Derive Further Loan Growth Through Differentiated Service. We have consistently demonstrated our ability to generate robust loan growth and capture additional share in our operating markets. We have been able to do so based on strong client relationships and focused business development efforts.
We have consistently demonstrated our ability to generate robust loan growth and capture additional share in our operating markets. We have been able to do so based on strong client relationships and focused business development efforts.
As of December 31, 2024, we had $1.4 billion in total commercial real estate loans, representing approximately 75.0% of total loans. We originate loans to finance commercial real estate, primarily secured by commercial retail space, multifamily properties, office buildings and warehouses in our primary lending market.
As of December 31, 2025, we had $1.5 billion in total commercial real estate loans, representing approximately 75.9% of total loans. We originate loans to finance commercial real estate, primarily secured by commercial retail space, multifamily properties, office buildings and warehouses in our primary lending market.
Personnel As of December 31, 2024, we had 225 full-time equivalent employees at Orange County Bancorp, Orange Bank & Trust Company and HVIA, none of whom are represented by a collective bargaining unit. We believe we have a good working relationship with our employees.
Personnel As of December 31, 2025, we had 235 full-time equivalent employees at Orange County Bancorp, Orange Bank & Trust Company and OIA, none of whom are represented by a collective bargaining unit. We believe we have a good working relationship with our employees.
As we have successfully done with our banking business, we intend to continue the expansion of HVIA’s services into Westchester and Rockland Counties. Additionally, private banking, continued to grow in 2024 and now supports approximately 759 clients (an increase from 625 clients in 2023) to fully leverage the resources and capabilities of our platform.
As we have successfully done with our banking business, we intend to continue the expansion of OIA’s services into Westchester, Bronx, and Rockland Counties. Additionally, private banking, continued to grow in 2025 and now supports approximately 740 clients (an increase from 625 clients in 2023) to fully leverage the resources and capabilities of our platform.
Commercial real estate construction loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions and uncertainties of construction costs. Residential Real Estate Lending . As of December 31, 2024, we had $75.0 million in total residential real estate loans, representing 4.1% of total loans.
Commercial real estate construction loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions and uncertainties of construction costs. Residential Real Estate Lending . As of December 31, 2025, we had $65.3 million in total residential real estate loans, representing 3.4% of total loans.
Subsidiaries Orange Bank & Trust Company and HVIA are the only subsidiaries of Orange County Bancorp and there are no subsidiaries of Orange Bank & Trust Company and HVIA. SUPERVISION AND REGULATION General The Bank is a trust company organized under the laws of the state of New York.
Subsidiaries Orange Bank & Trust Company and OIA are the only subsidiaries of Orange County Bancorp and there are no subsidiaries of Orange Bank & Trust Company and OIA. ​ 17 Table of Contents SUPERVISION AND REGULATION General The Bank is a trust company organized under the laws of the state of New York.
Westchester and Rockland Counties are large, wealthy markets with median household incomes of $118,411 and $110,631, respectively and a combined population of approximately 1,354,591, all estimated as of July 1, 2024.
Westchester and Rockland Counties are large, wealthy markets with median household incomes of $118,976 and $109,959, respectively and a combined population of approximately 1,354,591, all estimated as of July 1, 2024.
We opened a branch office in Nanuet, located in Rockland County, during the third quarter of 2021 and we entered the Yonkers market with a Westchester County branch location during the first quarter of 2024.
We opened a branch office in Nanuet, located in Rockland County, during the third quarter of 2021 and we entered the Yonkers market with a Westchester County branch location during the first quarter of 2024. A second full-service office was opened in the Bronx during the third quarter of 2025.
Deposits from municipalities totaled $281.8 million, or 13.1%, of our total deposits at December 31, 2024. Continue to Build Fee-Based Business. We have built a strong foundation of fee-based revenue through our trust services and wealth management businesses.
Deposits from municipalities totaled $233.3 million, or 10.1%, of our total deposits at December 31, 2025. Continue to Build Fee-Based Business. We have built a strong foundation of fee-based revenue through our trust services and wealth management businesses.
We believe that there may be significant cross-selling opportunities with our high-net-worth and business clients through this platform. Our History Born of the vision of 14 founders, the Bank opened for business in May 1892 as Orange County Trust and Safe Deposit Company.
We continue to believe that there are significant cross-selling opportunities within our high-net-worth and business client segments through this platform. Our History Born of the vision of 14 founders, the Bank opened for business in May 1892 as Orange County Trust and Safe Deposit Company.
As of December 31, 2024, we had $17.4 million in total home equity loans, representing less than 1% of total loans. We originate home equity lines of credit and closed-end loans. These loans are generally secured by properties located in, or provided to customers who reside in, our primary market area.
As of December 31, 2025, we had $22.6 million in total home equity loans, representing 1.2% of total loans. We originate home equity lines of credit and closed-end loans. These loans are generally secured by properties located in, or provided to customers who reside in, our primary market area.
Terms of construction loans depend on the specifics of the project such as the estimated time for completion, the planned construction costs and the prospective appraised value of those projects. At December 31, 2024, we have made commitments of $165.1 million of which $101.9 million has been drawn by our commercial real estate construction borrowers.
Terms of construction loans depend on the specifics of the project such as the estimated time for completion, the planned construction costs and the prospective appraised value of those projects. At December 31, 2025, we have made commitments of $135.2 million of which $99.3 million has been drawn by our commercial real estate construction borrowers.
These categories total over 53% of the total loan portfolio.
These categories total over 56% of the total loan portfolio.
In underwriting home equity lines and loans, a thorough analysis of the borrower’s financial ability to repay the loan as agreed is performed. The ability to repay is determined by the borrower’s employment history, current financial conditions, and credit background.
In underwriting home equity lines and loans, a thorough analysis of the borrower’s financial ability to repay the loan as agreed is performed. The ability to repay is determined by the borrower’s employment history, current financial conditions, and credit background. The analysis is based primarily on the customer’s ability to repay and secondarily on the collateral or security.
Our core competencies include familiarity with our clients and providing the highest quality services and solutions, enabling us to attract business customers across our traditional and expanded geographic 8 Table of Contents footprint. The objective is to be a trusted advisor to our clients as they build their businesses with our resources, support and advice.
Our core competencies include familiarity with our clients and providing the highest quality services and solutions, enabling us to attract business customers across our traditional and expanded geographic footprint. The objective is to be a trusted advisor to our clients as they build their businesses with our resources, support and advice. Derive Further Loan Growth Through Differentiated Service.
At December 31, 2024, our core deposits (which includes all deposits except for certificates of deposit) totaled $1.9 billion, or 89.7% of our total deposits, and our cost of funds on this stable funding source was 1.04% anchored by our noninterest bearing demand deposits which represented 30.2% of total deposits at December 31, 2024.
At December 31, 2025, our core deposits (which includes all deposits except for certificates of deposit) totaled $2.2 billion, or 93.1% of our total deposits, and our cost of funds on this stable funding source was 1.00% anchored by our noninterest bearing demand deposits which represented 31.4% of total deposits at December 31, 2025.
We follow our customary loan underwriting and approval policies specific to these purchased loans. Historically, we had purchased such loans under two programs. The first is a direct purchase with no guarantee (the “Direct Purchase Loans”), in which the loans are purchased at par with a put-back provision to the originator in the event of nonperformance.
Historically, we had purchased such loans under two programs. The first is a direct purchase with no guarantee (the “Direct Purchase Loans”), in which the loans are purchased at par with a put-back provision to the originator in the event of nonperformance.
As of December 31, 2024, we had $512.2 million of available borrowing capacity with the FHLB. On that date, we had $123.5 million in advances outstanding from the FHLB. The other borrowing lines are maintained primarily for contingency funding sources and had no amounts outstanding at December 31, 2024.
As of December 31, 2025, we had $652.7 million of available borrowing capacity with the FHLB. On that date, we had $10.0 million in advances outstanding from the FHLB. The other borrowing lines are maintained primarily for contingency funding sources and had no amounts outstanding at December 31, 2025.
As of December 31, 2024, we had $81.0 million in commercial real estate construction loans, representing 4.5% of total loans. We engage in commercial real estate construction lending, primarily for projects located within our primary lending market.
As of December 31, 2025, we had $99.3 million in commercial real estate construction loans, representing 5.1% of total loans. We engage in commercial real estate construction lending, primarily for projects located within our primary lending market.
Additionally, by continuing to broaden our suite of business services, from sophisticated cash management to enhanced commercial lending, loans and deposits grew to $1.8 billion and $2.2 billion at year end 2024, up 3.9% and 5.6%, respectively, over year end 2023.
Additionally, by continuing to broaden our suite of business services, from sophisticated cash management to enhanced commercial lending, loans and deposits grew to $2.0 billion and $2.3 billion at year end 2025, up 7.4% and 7.3%, respectively, over year end 2024.
The exploration of new locations and opportunities for expansion will remain a key initiative within the Company’s growth strategy. 9 Table of Contents Engage in Opportunistic M&A. We continue to remain focused on organic growth in our geographic markets and have no current plans or arrangements for acquisitions.
The exploration of new locations and opportunities for expansion will remain a key initiative within the Company’s growth strategy. Engage in Opportunistic M&A. We continue to remain focused on organic growth in our geographic markets and have no current plans or arrangements for acquisitions. We may, however, evaluate acquisitions that we believe could produce attractive returns for our stockholders.
HVIA and Orange Bank & Trust Company’s trust department collectively had 40 full-time equivalent employees as of December 31, 2024 and revenue of $12.3 million or approximately 8.6% of our total revenues in 2024. Investments Our board of directors is responsible for approving and overseeing our investment policy.
OIA and Orange Bank & Trust Company’s trust department collectively had 33 full-time equivalent employees as of December 31, 2025 and revenue of $14.1 million or approximately 8.9% of our total revenues in 2025. Investments Our board of directors is responsible for approving and overseeing our investment policy.
HVIA is in the process of expanding its product capabilities and expanding third party product distribution. In recent years, we have grown the Orange Wealth Management initiative, which combines services offered by HVIA, our private bank and trust department in a coordinated strategy for growth.
OIA continues to focus on expanding its product capabilities and expanding third party product distribution. In recent years, we have experienced strong growth in the Orange Wealth Management initiative, which combines services offered by OIA, our private bank and trust department in a coordinated strategy for growth.
Under the prompt corrective action requirements, insured depository institutions are required to meet the following in order to qualify as “well capitalized:” (1) a common equity Tier 1 risk-based capital ratio of 6.5%; (2) a Tier 1 risk-based capital ratio of 8%; (3) a total risk-based capital ratio of 10% and (4) a Tier 1 leverage ratio of 5%.
For these purposes, the statute establishes five capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. 20 Table of Contents Under the prompt corrective action requirements, insured depository institutions are required to meet the following in order to qualify as “well capitalized:” (1) a common equity Tier 1 risk-based capital ratio of 6.5%; (2) a Tier 1 risk-based capital ratio of 8%; (3) a total risk-based capital ratio of 10% and (4) a Tier 1 leverage ratio of 5%.
Most business lines of credit are written on demand and may be renewed annually. When making commercial and industrial loans, we consider the financial statements of the borrower, our lending history with the borrower, the debt service capabilities and global cash flows of the borrower and other guarantors, and the value of the collateral, including accounts receivable, inventory and equipment.
When making commercial and industrial loans, we consider the financial statements of the borrower, our lending history with the borrower, the debt service capabilities and global cash flows of the borrower and other guarantors, and the value of the collateral, including accounts receivable, inventory and equipment.
We have approximately $180.0 million of brokered deposits at December 31, 2024. Our CDARS and ICS deposits totaled $99.4 million at December 31, 2024. We actively seek to obtain municipal deposits. At December 31, 2024, municipal deposits totaled $281.8 million or 13.1% of our total deposits. We have developed a program for the retention and management of municipal deposits.
We have approximately $125.0 million of brokered deposits at December 31, 2025. Our CDARS and ICS deposits totaled $101.8 million at December 31, 2025. We actively seek to obtain municipal deposits. At December 31, 2025, municipal deposits totaled $233.3 million or 10.1% of our total deposits. We have developed a program for the retention and management of municipal deposits.
We also may purchase whole loans from other lenders. Beginning in 2018, we have purchased commercial and industrial loans made to medical professionals throughout the U.S. such as to doctors, dentists, accountants, and attorneys secured by a blanket lien on their business assets from a national provider of such loans.
Beginning in 2018, we have purchased commercial and industrial loans made to medical professionals throughout the U.S. such as to doctors, dentists, accountants, and attorneys secured by a blanket lien on their business assets from a national provider of such loans. We follow our customary loan underwriting and approval policies specific to these purchased loans.
While Orange County remains our home, ongoing investments in Rockland, Westchester and Bronx Counties continue to be significant drivers of our growth and profitability. Most recently, we entered the Yonkers market with a Westchester County branch location during the first quarter of 2024.
Strategic Expansion . While Orange County remains our home, ongoing investments in Rockland, Westchester and Bronx Counties continue to be significant drivers of our growth and profitability. Most recently, we strengthened our position with a second location within the Bronx market during the third quarter of 2025.
These loans are generally secured by properties located in, or made to customers who reside in, our primary market area. In underwriting one- to four-family residential real estate loans, we evaluate both the borrower’s ability to make monthly payments and the value of the property securing the loan. Properties securing real estate loans we make are appraised by independent appraisers.
In underwriting one- to four-family residential real estate loans, we evaluate both the borrower’s ability to make monthly payments and the value of the property securing the loan. Properties securing real estate loans we make are appraised by independent appraisers.
Consumer loans may entail greater credit risk than residential real estate loans particularly in the case of consumer loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment.
The ability to repay is determined by the borrower’s employment history, current financial condition, and credit background. Consumer loans may entail greater credit risk than residential real estate loans particularly in the case of consumer loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment.
As of December 31, 2024, the Company’s assets, loans, deposits and stockholders’ equity totaled $2.5 billion, $1.8 billion, $2.2 billion and $185.5 million, respectively. Orange Bank & Trust Company’s trust department and HVIA had a combined $1.8 billion in assets under management at December 31, 2024.
As of December 31, 2025, the Company’s assets, loans, deposits and stockholders’ equity totaled $2.7 billion, $2.0 billion, $2.3 billion and $284.4 million, respectively. Orange Bank & Trust Company’s trust department and OIA had a combined $1.9 billion in assets under management at December 31, 2025.
Core deposits (deposits excluding time deposits) comprise 89.7% of our total funding, with a low cost of 1.04% at and for the year ended December 31, 2024.
Core deposits (deposits excluding time deposits) comprise 93.1% of our total funding, with a low cost of 1.00% for the year ended December 31, 2025.
Borrowings represent an alternative funding source, accordingly, we utilize advances from the FHLB to supplement our supply of investable funds. The FHLB functions as a central reserve bank providing credit for its member financial institutions.
At the Federal Reserve Bank, we have collateral pledged lines through their Discount Window and the Borrower-in-Custody program. Borrowings represent an alternative funding source, accordingly, we utilize advances from the FHLB to supplement our supply of investable funds. The FHLB functions as a central reserve bank providing credit for its member financial institutions.
As of December 31, 2024, the outstanding balances of our loan participations totaled $93.3 million, of which $83.9 million were commercial real estate loans, $7.4 million were commercial real estate construction loans, and $2.0 million were commercial and industrial loans.
As of December 31, 2025, the outstanding balances of our loan participations totaled $85.8 million, of which $71.7 million were commercial real estate loans, $2.4 million were commercial real estate construction loans, and $11.7 million were commercial and industrial loans.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeConcerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts. Consumers and businesses also may change their behavior on their own as a result of these concerns.
Biggest changeSocietal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers. Concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts.
Furthermore, 29 Table of Contents our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses could have a negative impact on their ability to repay their loans with us.
Furthermore, our customers are also affected by inflation and 29 Table of Contents the rising costs of goods and services used in their households and businesses could have a negative impact on their ability to repay their loans with us.
As a result, if you acquire our common stock, you could lose some or all of your investment. ​ ​ Item 1B. Unresolved Staff Comments Not applicable. ​ 44 Table of Contents
As a result, if you acquire our common stock, you could lose some or all of your investment. ​ ​ 44 Table of Contents Item 1B. Unresolved Staff Comments Not applicable. ​
We have purchased loans primarily to the medical industry that are secured by UCC blanket liens on all business assets and are distributed throughout the United States. These loan purchases may have a higher risk of loss than loans we originate because they are located outside of our primary market area.
We have purchased loans primarily extended to the medical industry that are secured by UCC blanket liens on all business assets and are distributed throughout the United States. These loan purchases may have a higher risk of loss than loans we originate because they are located outside of our primary market area.
Future declines in the real estate values in the New York City metropolitan area and in Orange, Westchester and Rockland Counties and surrounding markets could significantly impair the value of the particular collateral securing our loans and our ability to sell the collateral upon foreclosure for an amount necessary to satisfy the borrower’s obligations to us.
Future declines in the real estate values in the New York City metropolitan area and in Orange, Westchester, Bronx, and Rockland Counties and surrounding markets could significantly impair the value of the particular collateral securing our loans and our ability to sell the collateral upon foreclosure for an amount necessary to satisfy the borrower’s obligations to us.
These provisions, and the corporate and banking laws and regulations applicable to us: • enable our board of directors to increase the size of the board and fill the vacancies created by the increase; • provide for the division of the board of directors into three staggered classes so that it would require replacing more than one class of directors to gain control of the board of directors; • provide that directors may only be removed for cause and by a majority of the votes entitled to be cast; 43 Table of Contents • enable our board of directors to amend our Bylaws without shareholder approval, subject, however, to the general right of shareholders to change such action in accordance with pertinent sections of the Bylaws and Delaware General Corporation Law; • require advance notice and certain ownership requirements for director nominations; • require advance notice for shareholder proposals; • require the request of record holders of at least 25% of the outstanding shares of our capital stock entitled to vote at a meeting to call a special shareholders’ meeting; • require a supermajority vote of the shareholders to approve a merger with a person owning 10% or more of the Company’s common stock, unless such merger is approved by a supermajority of unaffiliated members of the board of directors; and • require prior regulatory application and approval of any transaction involving control of our organization.
These provisions, and the corporate and banking laws and regulations applicable to us: • enable our board of directors to increase the size of the board and fill the vacancies created by the increase; • provide for the division of the board of directors into three staggered classes so that it would require replacing more than one class of directors to gain control of the board of directors; • provide that directors may only be removed for cause and by a majority of the votes entitled to be cast; • enable our board of directors to amend our Bylaws without shareholder approval, subject, however, to the general right of shareholders to change such action in accordance with pertinent sections of the Bylaws and Delaware General Corporation Law; • require advance notice and certain ownership requirements for director nominations; • require advance notice for shareholder proposals; • require the request of record holders of at least 25% of the outstanding shares of our capital stock entitled to vote at a meeting to call a special shareholders’ meeting; • require a supermajority vote of the shareholders to approve a merger with a person owning 10% or more of the Company’s common stock, unless such merger is approved by a supermajority of unaffiliated members of the board of directors; and • require prior regulatory application and approval of any transaction involving control of our organization.
Risks Related to Economic Conditions A substantial portion of our business is in the New York City Metropolitan area and in Orange, Westchester and Rockland Counties in New York and, therefore, our business is particularly vulnerable to an economic downturn in our primary market area.
Risks Related to Economic Conditions A substantial portion of our business is in the New York City Metropolitan area and in Orange, Westchester, Bronx, and Rockland Counties in New York and, therefore, our business is particularly vulnerable to an economic downturn in our primary market area.
These factors include, among other things: • general economic conditions and overall market fluctuations; • actual or anticipated fluctuations in our quarterly or annual operating results; • changes in accounting standards, policies, guidance, interpretations or principles; 41 Table of Contents • the public reaction to our press releases, our other public announcements and our filings with the SEC; • changes in financial estimates and recommendations by securities analysts following our stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and stock price performance of other comparable companies; • the trading volume of our common stock; • new technology used, or services offered, by competitors; and • changes in business, legal or regulatory conditions, or other developments affecting the financial services industry, participants in our industry, and publicity regarding our business or any of our significant customers or competitors.
These factors include, among other things: • general economic conditions and overall market fluctuations; • actual or anticipated fluctuations in our quarterly or annual operating results; • changes in accounting standards, policies, guidance, interpretations or principles; • the public reaction to our press releases, our other public announcements and our filings with the SEC; • changes in financial estimates and recommendations by securities analysts following our stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and stock price performance of other comparable companies; • the trading volume of our common stock; • new technology used, or services offered, by competitors; and • changes in business, legal or regulatory conditions, or other developments affecting the financial services industry, participants in our industry, and publicity regarding our business or any of our significant customers or competitors.
We may not be successful in retaining our key employees, and the unexpected loss of services of one or more of our key personnel at Orange Bank & Trust Company or HVIA could have a material adverse effect on our business because of their skills, knowledge of our primary markets, years of industry experience and the difficulty of promptly finding qualified replacement personnel.
We may not be successful in retaining our key employees, and the unexpected loss of services of one or more of our key personnel at Orange Bank & Trust Company or OIA could have a material adverse effect on our business because of their skills, knowledge of our primary markets, years of industry experience and the difficulty of promptly finding qualified replacement personnel.
Our success depends in large part on the performance of our key personnel at Orange Bank & Trust Company and HVIA, as well as on our ability to attract, motivate and retain highly qualified senior and middle management and other skilled employees.
Our success depends in large part on the performance of our key personnel at Orange Bank & Trust Company and OIA, as well as on our ability to attract, motivate and retain highly qualified senior and middle management and other skilled employees.
The monetary policies of the FRB may be affected by certain policy initiatives of the new administration, which has announced tariffs on certain U.S. trading partners (and has indicated additional tariffs and retaliatory tariffs against U.S. trading partners may be announced in the future) and has implemented stricter immigration policies.
The monetary policies of the FRB may be affected by certain policy initiatives of the current administration, which has announced tariffs on certain U.S. trading partners (and has indicated additional tariffs and retaliatory tariffs against U.S. trading partners may be announced in the future) and has implemented stricter immigration policies.
The extent and timing of the new administration’s policy changes and their impact on the policies of the FRB, as well as our business and financial results, are uncertain at this time. Other Risks Related to Our Business Liquidity is essential to our businesses.
The extent and timing of the current administration’s policy changes and their impact on the policies of the FRB, as well as our business and financial results, are uncertain at this time. Other Risks Related to Our Business Liquidity is essential to our businesses.
Significant adverse changes in the economy or 30 Table of Contents local market conditions in which our commercial lending customers operate could cause rapid declines in loan collectability and the values associated with general business assets, resulting in inadequate collateral coverage that may expose us to credit losses and could adversely affect our business, financial condition and results of operations.
Significant adverse changes in the economy or local market conditions in which our commercial lending customers operate could cause rapid declines in loan collectability and the values associated with general business assets, resulting in inadequate collateral coverage that may expose us to credit losses and could adversely affect our business, financial condition and results of operations.
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. During 2024, inflation in the United States experienced a slight decrease as compared to 2023.
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. During 2025, inflation in the United States experienced a slight decrease as compared to 2024.
At December 31, 2024, we had one loan participation which was delinquent 60 days or more. If our underwriting of these participation loans is not sufficient, our non-performing loans may increase, and our earnings may decrease.
At December 31, 2025, we had one loan participation which was delinquent 60 days or more. If our underwriting of these participation loans is not sufficient, our non-performing loans may increase, and our earnings may decrease.
Our wealth management operations with HVIA and our trust and administration services provided through the Bank’s trust services department present special risks not borne by institutions that focus exclusively on other traditional retail and commercial banking products.
Our wealth management operations with OIA and our trust and administration services provided through the Bank’s trust services department present special risks not borne by institutions that focus exclusively on other traditional retail and commercial banking products.
If the services of any of our key personnel should become unavailable for any reason, we may not be able to identify and hire qualified persons on terms acceptable to us, or at all, which could have a material adverse effect on our business, financial condition, results of operations and future prospects.
If the services of any of our key personnel should become unavailable for any reason, we may not be able to identify and hire 37 Table of Contents qualified persons on terms acceptable to us, or at all, which could have a material adverse effect on our business, financial condition, results of operations and future prospects.
The financial services market, including banking services, is increasingly affected by advances in technology, including developments in: • Telecommunications; • Data processing; • Automation; • Internet-based banking, including personal computers, mobile phones and tablets; • Debit cards and so-called “smart cards”; • Remote deposit capture; • Artificial Intelligence; • Cryptocurrency; and • Use of Blockchain. ​ Our ability to compete successfully in the future will depend, to a certain extent, on whether we can anticipate and respond to technological changes.
The financial services market, including banking services, is increasingly affected by advances in technology, including developments in: • Telecommunications; • Data processing; • Automation; • Internet-based banking, including personal computers, mobile phones and tablets; • Debit cards and so-called “smart cards”; • Remote deposit capture; 41 Table of Contents • Artificial Intelligence; • Stablecoin; • Cryptocurrency; and • Use of Blockchain. ​ Our ability to compete successfully in the future will depend, to a certain extent, on whether we can anticipate and respond to technological changes.
In such events, our cost of funds may increase, thereby reducing our net interest income, or we may need to sell a portion of our investment and/or loan portfolio, which, depending upon market conditions, could result in us realizing a loss. Legal and regulatory proceedings and related matters could adversely affect us.
In such events, our cost of funds may 40 Table of Contents increase, thereby reducing our net interest income, or we may need to sell a portion of our investment and/or loan portfolio, which, depending upon market conditions, could result in us realizing a loss. Legal and regulatory proceedings and related matters could adversely affect us.
Further, the repayment of commercial and industrial loans is dependent upon the degree of success of the borrower’s underlying business. The collateral securing such loans may decline in value more rapidly than we anticipate, or may be difficult to market, sell or appraise, exposing us to increased credit risk.
Further, the repayment of commercial and industrial loans is dependent upon the degree of success of the borrower’s underlying business. The collateral securing such loans may decline in value more rapidly than we anticipate, or may be 30 Table of Contents difficult to market, sell or appraise, exposing us to increased credit risk.
The application of such stringent capital requirements could, among other things, result in lower returns on equity, requiring the raising of additional capital, and resulting in 38 Table of Contents regulatory actions constraining us from paying dividends or repurchasing shares if we are unable to comply with such requirements.
The application of such stringent capital requirements could, among other things, result in lower returns on equity, requiring the raising of additional capital, and resulting in regulatory actions constraining us from paying dividends or repurchasing shares if we are unable to comply with such requirements.
A successful challenge to an institution’s performance under the CRA or fair lending laws and regulations could result in a wide variety of sanctions, including paying damages and civil money penalties, injunctive relief, imposition of restrictions on merger and acquisition activity and restrictions on expansion activity.
A successful challenge to an institution’s performance under the CRA or fair lending laws and regulations could result in a wide variety of sanctions, including paying damages and civil money penalties, injunctive relief, imposition of restrictions on merger and acquisition activity and restrictions on expansion 39 Table of Contents activity.
This influence may also have the effect of delaying or preventing changes of control or changes in management, or limiting the ability of our other stockholders to approve transactions that they may deem to be in the best interests of our Company. Our common stock is subordinate to our existing and future indebtedness.
This influence may also have the effect of delaying or preventing changes of control or changes in 43 Table of Contents management, or limiting the ability of our other stockholders to approve transactions that they may deem to be in the best interests of our Company. Our common stock is subordinate to our existing and future indebtedness.
In addition, HVIA competes with a multitude of investment companies, from online providers to similarly structured investment advisors. Many competitors have substantially greater resources than we do.
In addition, OIA competes with a multitude of investment companies, from online providers to similarly structured investment advisors. Many competitors have substantially greater resources than we do.
We primarily serve individuals, businesses and municipalities located in the New York City metropolitan area and in Orange, Westchester and Rockland Counties, New York. As of December 31, 2024, most of our loan portfolio was secured by real estate and other assets located in these areas in New York.
We primarily serve individuals, businesses and municipalities located in the New York City metropolitan area and in Orange, Westchester, Bronx, and Rockland Counties, New York. As of December 31, 2025, most of our loan portfolio was secured by real estate and other assets located in these areas in New York.
If our underwriting of these purchased loans is not sufficient, our non-performing loans may increase and our earnings may decrease. Risks Related to Wealth Management Involvement in wealth management creates risks associated with the industry. At December 31, 2024, we had approximately $1.8 billion in assets under management.
If our underwriting of these purchased loans is not sufficient, our non-performing loans may increase and our earnings may decrease. Risks Related to Wealth Management Involvement in wealth management creates risks associated with the industry. At December 31, 2025, we had approximately $1.9 billion in assets under management.
Risks Related to Deposits We accept deposits that do not have a fixed term and which may be withdrawn by the customer at any time for any reason. At December 31, 2024, we had $1.9 billion of deposit liabilities that have no maturity and, therefore, may be withdrawn by the depositor at any time.
Risks Related to Deposits We accept deposits that do not have a fixed term and which may be withdrawn by the customer at any time for any reason. At December 31, 2025, we had $2.2 billion of deposit liabilities that have no maturity and, therefore, may be withdrawn by the depositor at any time.
With instability in the rate environment, the value of our investment securities, particularly those with longer maturities, could decrease, although this effect can be less pronounced for floating rate instruments. In addition, potential inflation increases the cost of goods and services in our business operations, such as electricity and other utilities, which increases our noninterest expenses.
Accordingly, the value of our investment securities, particularly those with longer maturities, could decrease if rates rise, although this effect can be less pronounced for floating rate instruments. In addition, potential inflation increases the cost of goods and services in our business operations, such as electricity and other utilities, which increases our noninterest expenses.
Commercial real estate loans represent 422% of our risk-based capital at December 31, 2024 and the outstanding balance of our commercial real estate loan portfolio has increased by 76% during the 36 months preceding December 31, 2024. In December 2015, the Agencies released a new statement on prudent risk management for commercial real estate lending (the “2015 Statement”).
Commercial real estate loans represent 370% of our risk-based capital at December 31, 2025 and the outstanding balance of our commercial real estate loan portfolio has increased by 44% during the 36 months preceding December 31, 2025. In December 2015, the Agencies released a new statement on prudent risk management for commercial real estate lending (the “2015 Statement”).
Our earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies. The policies of the FRB impact us significantly. The FRB regulates the supply of money and credit in the United States.
Our earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies. The policies of the FRB represent significant potential impact for us. The FRB regulates the supply of money and credit in the United States.
Our directors and executive officers, as a group, beneficially owned approximately 9.14% of our outstanding shares of common stock as of December 31, 2024. To our knowledge, although there is no written agreement between members of the Morrison family to act in concert, relatives of director William D. Morrison and William D.
Our directors and executive officers, as a group, beneficially owned approximately 8.0% of our outstanding shares of common stock as of December 31, 2025. To our knowledge, although there is no written agreement between members of the Morrison family to act in concert, relatives of director William D. Morrison and William D.
Accordingly, we could suffer losses if we fail to properly anticipate and manage these risks. ​ 37 Table of Contents Risks Related to Competitive Matters We may be unable to successfully compete with others for business. The area in which we operate is a highly competitive banking market.
Accordingly, we could suffer losses if we fail to properly anticipate and manage these risks. Risks Related to Competitive Matters We may be unable to successfully compete with others for business. The area in which we operate remains a highly competitive banking market.
We have a significant number of loans secured by real estate, and a downturn in the local real estate market could negatively impact our profitability. At December 31, 2024, approximately $1.4 billion, or 79.5%, of our total loan portfolio was secured by commercial real estate, including construction, almost all of which is located in our primary lending market.
We have a significant number of loans secured by real estate, and a downturn in the local real estate market could negatively impact our profitability. At December 31, 2025, approximately $1.6 billion, or 81.0%, of our total loan portfolio was secured by commercial real estate, including construction, almost all of which is located in our primary lending market.
Its policies directly and indirectly influence the rate of interest earned on loans and paid on borrowings and interest-bearing deposits and can also affect the value of financial instruments we hold. Those policies determine to a significant extent our cost of funds for lending and investing.
Its policies directly and indirectly influence the rate of interest earned on loans and paid on borrowings and interest-bearing deposits and can also affect the value of financial instruments we hold. Those policies determine to a significant extent our cost of funds for lending and investing. Changes in those policies are beyond our control and are difficult to predict.
Municipal deposits are a significant source of funds for our lending and investment activities. At December 31, 2024, $281.8 million, or 13.1% of our total deposits, consisted of municipal deposits from local government entities such as county, village and town governments, school districts, fire departments and other municipalities, which are collateralized by investment securities.
Municipal deposits are a significant source of funds for our lending and investment activities. At December 31, 2025, $233.3 million, or 10.1% of our total deposits, consisted of municipal deposits from local government entities such as county, village and town governments, school districts, fire departments and other municipalities, which are collateralized by investment securities.
In addition, our emphasis on loan growth and on increasing our portfolios of commercial real estate and commercial and industrial loans, as well as any future credit deterioration, could require us to increase our allowance for credit losses in the future. At December 31, 2024, our allowance for credit losses was 1.44% of total loans and 414.0% of nonperforming loans.
In addition, our emphasis on loan growth and on increasing our portfolios of commercial real estate and commercial and industrial loans, as well as any future credit deterioration, could require us to increase our allowance for credit losses in the future. At December 31, 2025, our allowance for credit losses was 1.45% of total loans and 254.6% of nonperforming loans.
In addition, the shares of common stock rank junior to the noteholders of the $20.0 million in subordinated debt that we issued in September 2020.
In addition, the shares of common stock rank junior to the noteholders of the $25.0 million in subordinated debt that we issued in September 2025.
Such regulation, supervision and examination govern the activities in which we may engage, and are intended primarily for the protection of the deposit insurance fund and our depositors and not for the protection of our stockholders.
We are subject to extensive regulation, supervision and examination by the FRB and the NYSDFS. Such regulation, supervision and examination govern the activities in which we may engage, and are intended primarily for the protection of the deposit insurance fund and our depositors and not for the protection of our stockholders.
These loans are also limited to our geographic lending market and are generally secured by blanket UCC liens.
These loans are also limited to our geographic lending market and are generally 31 Table of Contents secured by blanket UCC liens.
A large portion of our loan portfolio is comprised of commercial and industrial loans secured by receivables, inventory, equipment or other commercial collateral, the deterioration in value of which could increase the potential for future losses. At December 31, 2024, $242.4 million, or 13.4% of our total loan portfolio, consisted of commercial and industrial loans.
A large portion of our loan portfolio is comprised of commercial and industrial loans secured by receivables, inventory, equipment or other commercial collateral, the deterioration in value of which could increase the potential for future losses. At December 31, 2025, $249.6 million, or 12.8% of our total loan portfolio, consisted of commercial and industrial loans.
Such changes could also affect (i) demand for our products and services and price competition, in turn affecting our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities; (iii) the average duration of our mortgage-backed securities portfolio and other interest-earning assets; (iv) levels of defaults on loans; and (v) loan prepayments. 34 Table of Contents During 2024, the FRB reduced interest rates in response to economic indicators.
Such changes could also affect (i) demand for our products and services and price competition, in turn affecting our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities; (iii) the average duration of our mortgage-backed securities portfolio and other interest-earning assets; (iv) levels of defaults on loans; and (v) loan prepayments. 34 Table of Contents During 2025, the FRB reduced interest rates in response to economic indicators, mainly associated with a weaker labor market and unemployment trends rather than recessionary concerns.
At December 31, 2024, our purchased commercial and industrial loans totaled $48.6 million, or 2.7% of our loan portfolio and 20.1% of our commercial and industrial loan portfolio, none of which were delinquent 60 days or more. During the year ended December 31, 2024, we did not purchase any loans from the partially guaranteed consumer loan program.
At December 31, 2025, our purchased commercial and industrial loans totaled $11.0 million, or 0.6% of our loan portfolio and 4.4% of our commercial and industrial loan portfolio, none of which were delinquent 60 days or more. During the year ended December 31, 2025, we did not purchase any loans from the partially guaranteed consumer loan program.
Changes in those policies are beyond our control and are difficult to predict. 39 Table of Contents FRB policies can also affect our borrowers, potentially increasing the risk that they may fail to repay their loans. For example, a tightening of the money supply by the FRB could reduce the demand for a borrower’s products and services.
FRB policies can also affect our borrowers, potentially increasing the risk that they may fail to repay their loans. For example, a tightening of the money supply by the FRB could reduce the demand for a borrower’s products and services.
We and our customers will need to respond to new laws and regulations as well as consumer and business preferences resulting from climate change concerns. We and our customers may face cost increases, asset value reductions and operating process changes.
Consumers and businesses also may change their behavior on their own as a result of these concerns. We and our customers will need to respond to new laws and regulations as well as consumer and business preferences resulting from climate change concerns. We and our customers may face cost increases, asset value reductions and operating process changes.
At December 31, 2024, our non-performing assets, which consist of non-performing loans and other real estate owned, were $6.3 million, or 0.25% of total assets.
At December 31, 2025, our non-performing assets, which consist of non-performing loans and other real estate owned, were $11.1 million, or 0.42% of total assets.
Morrison beneficially owned collectively approximately 25.6% of our outstanding shares of common stock as of December 31, 2024. William D. Morrison beneficially owned approximately 1.0% of our outstanding shares of common stock as of December 31, 2024.
Morrison beneficially owned collectively approximately 19.0% of our outstanding shares of common stock as of December 31, 2025. William D. Morrison beneficially owned approximately 0.9% of our outstanding shares of common stock as of December 31, 2025.
At December 31, 2024, our commercial real estate loans totaled $1.4 billion, or 79.5%, of our total loan portfolio. Our commercial real estate loans expose us to greater risk of nonpayment and loss than one- to four-family family residential mortgage loans because repayment of the loans often depends on the successful operation and income stream of the borrowers.
Our commercial real estate loans expose us to greater risk of nonpayment and loss than one- to four-family family residential mortgage loans because repayment of the loans often depends on the successful operation and income stream of the borrowers.
At December 31, 2024, commercial real estate loan participations, including construction, 31 Table of Contents for which we were not the lead lender totaled $91.3 million, or 6.7% of our commercial real estate loan portfolio, including commercial and industrial loan participations for which we were not the lead lender totaled $2.0 million, or 0.83% of our commercial and industrial loan portfolio.
At December 31, 2025, commercial real estate loan participations, including construction, for which we were not the lead lender totaled $74.1 million, or 4.8% of our commercial real estate loan portfolio, including commercial and industrial loan participations for which we were not the lead lender totaled $11.7 million, or 4.7% of our commercial and industrial loan portfolio.
Our policies, which require us to perform an environmental review before initiating any foreclosure action on non-residential real property, may not be sufficient to detect all potential environmental hazards.
Our policies, which require us to perform an environmental review before initiating any foreclosure action on non-residential real property, 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.
A public trading market having the desired characteristics of depth, liquidity and orderliness depends upon the presence in the marketplace of willing buyers and sellers of our common stock at any given time, which presence is dependent upon the individual decisions of investors, over which we have no control.
A public trading market having the desired characteristics of depth, liquidity and orderliness depends upon the presence in the marketplace of willing buyers and sellers of our common stock at any given time, which presence is dependent upon the individual decisions of investors, over which we have no control. 42 Table of Contents The reduced disclosures and relief from certain other significant disclosure requirements that are available to emerging growth companies may make our common stock less attractive to investors.
The FRB has indicated a cautious approach in 2025 in order to control inflation. Rate cuts are anticipated but not certain. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected.
If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected.
Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services than we can as well as better pricing for those products and services, as well as better pricing for those products and services than we can.
Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services than we can as well as better pricing for those products and services, as well as better pricing for those products and services than we can. ​ ​ 38 Table of Contents Risk Related to Laws and Regulations We operate in a highly regulated environment and may be adversely affected by changes in federal, state and local laws and regulations.
If, as a result, some investors find our common stock less attractive, there may be a less active trading market for our common stock, which could result in a reduction and greater volatility in the price of our common stock. ​ 42 Table of Contents Our dividend policy may change without notice and any payment of dividends in the future is subject to the discretion of our Board of Directors.
If, as a result, some investors find our common stock less attractive, there may be a less active trading market for our common stock, which could result in a reduction and greater volatility in the price of our common stock.
However, the existence of cyber-attacks or security breaches at third parties with access to our data, such as vendors, may not be disclosed to us in a timely manner. We rely heavily on our executive management team and other key employees for our successful operation, and we could be adversely affected by the unexpected loss of their services.
However, the existence of cyber-attacks or security breaches at third parties with access to our data, such as vendors, may not be disclosed to us in a timely manner. The development and use of artificial intelligence (“AI”) presents risks and challenges that may adversely impact our business.
The holders of our common stock will receive cash dividends if and when declared by our board of directors out of legally available funds. Although we have paid a cash dividend for at least 40 consecutive years, we have no obligation to continue paying dividends.
Although we have paid a cash dividend for at least 40 consecutive years, we have no obligation to continue paying dividends.
Accordingly, the FRB lowered the federal funds rate by half of a percentage point in September 2024, the first cut since 2020, followed by a quarter point in November 2024 and then again in December 2024. The FRB has indicated its intention to maintain its effort to combat inflation.
The FRB lowered the federal funds rate by a quarter of a percentage point in September 2025, October 2025 and again in December 2025. Although the FRB has indicated its outlook for growth is relatively stable, the uncertainty about growth remains high.
Removed
Risk Related to Laws and Regulations We operate in a highly regulated environment and may be adversely affected by changes in federal, state and local laws and regulations. We are subject to extensive regulation, supervision and examination by the FRB and the NYSDFS.
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At December 31, 2025, our commercial real estate loans, including construction loans, totaled $1.6 billion, or 81.0%, of our total loan portfolio.
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The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on us. ​ ​ 40 Table of Contents Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers.
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The FRB has indicated a steady approach in 2026 as market conditions appear to be stabilizing. Rates are expected to remain stable but not certain.
Removed
The reduced disclosures and relief from certain other significant disclosure requirements that are available to emerging growth companies may make our common stock less attractive to investors.
Added
We or our third-party vendors, clients or counterparties may develop or incorporate AI technology in certain business processes, services or products. The development and use of AI presents a number of risks and challenges to our business.
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The legal and regulatory environment relating to AI is uncertain and rapidly evolving, and includes regulatory schemes targeted specifically at AI as well as provisions in intellectual property, privacy, consumer protection, employment and other laws applicable to the use of AI.
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These evolving laws and regulations could require changes in our implementation of AI technology and increase our compliance costs and the risk of non-compliance.
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AI models, particularly generative AI models, may produce output or take action that is incorrect, that result in the release of private, confidential or proprietary information, that reflect biases included in the data on which they are trained, infringe on the intellectual property rights of others or that is otherwise harmful.
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In addition, the complexity of many AI models makes it challenging to understand why they are generating particular outputs.
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This limited transparency increases the challenges associated with assessing the proper operation of AI models, understanding and monitoring the capabilities of the AI models, reducing erroneous output, eliminating bias and complying with regulations that require documentation or explanation of the basis on which decisions are made.
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Further, we may rely on AI models developed by third parties, and would be dependent in part on the manner in which those third parties develop, train and deploy their models, including risks arising from the inclusion of any unauthorized material in the training data for their models, the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models and other matters over which we may have limited visibility.
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Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures. We are also exposed to risks arising from the use of AI technologies by bad actors to commit fraud and misappropriate funds and to facilitate cyberattacks.
Added
Generative AI, if used to perpetrate fraud or launch cyberattacks, could create panic at a particular financial institution or securities exchange, which could pose a threat to financial stability. We rely heavily on our executive management team and other key employees for our successful operation, and we could be adversely affected by the unexpected loss of their services.
Added
Our dividend policy may change without notice and any payment of dividends in the future is subject to the discretion of our Board of Directors. The holders of our common stock will receive cash dividends if and when declared by our board of directors out of legally available funds.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe specific experience of management who oversee cybersecurity are as follows: • Chief Information Officer (“CIO”) – The CIO has over 15 years of industry experience and has facilitated the management of information security programs at financial institutions during his entire career. • Chief Information Security Officer (“CISO”) - The CISO has over 25 years of broad technology and cyber experience and maintains the following certifications: Certified Information Systems Auditor (“CISA”), Certified Information Systems Security Professional (“CISSP”), and Certified Information Security Manager (“CISM”). • Chief Operating Officer (“COO”) – The COO’s career has been primarily in bank operations and has participated in end-to-end implementations and upgrades of core banking technology, from vendor selection to managing implementation, to leading enhancement and efficiency initiatives throughout the life of the application. • Chief Risk Officer (“CRO”) – The CRO oversees entity-wide risk management, including cybersecurity related risk. 45 Table of Contents • Information Technology Officer (“ITO”) – The ITO has over 25 years of IT experience and is a technology subject matter expert as well as over 8 years of IT leadership at the Company with over 20 years of financial services experience.
Biggest changeThe specific experience of management who oversee cybersecurity are as follows: • Chief Information Officer (“CIO”) – The CIO has over 25 years of industry experience and has facilitated the management of information security programs at financial institutions during his entire career. • Information Security Officer (“ISO”) - The ISO has over 25 years of broad technology and cyber experience and maintains the following certifications: Certified Information Systems Auditor (“CISA”), Certified Information Systems Security Professional (“CISSP”), and Certified Information Security Manager (“CISM”). • Chief Operating Officer (“COO”) – The COO has over 25 years of experience primarily in bank operations and has participated in end-to-end implementations and upgrades of core banking technology, from vendor 45 Table of Contents selection to managing implementation, to leading enhancement and efficiency initiatives throughout the life of the application. • Chief Risk Officer (“CRO”) – The CRO oversees entity-wide risk management, including cybersecurity related risk.
In addition to the directors, TC meetings typically include the Chief Information Officer, the Information Technology Officer, the Chief Information Security Officer, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, and the Chief Risk Officer.
In addition to the directors, TC meetings typically include the Chief Information Officer, the Information Security Officer, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, and the Chief Risk Officer.
The CMC meetings typically include various department heads from within the organization, but the primary members of the CMC include the following: • Information Technology Officer, (Chairperson) • Virtual Chief Information Security Officer • Bank Secrecy Officer • Compliance Officer The Cybersecurity Management Committee operates in connection with the Bank’s Technology Committee (the “Tech Committee” or “TC”).
The CMC meetings typically include various department heads from within the organization, but the primary members of the CMC include the following: • Chief Information Officer, (Chairperson) • Information Security Officer • Chief Operating Officer • Director of Compliance • Chief Risk Officer The Cybersecurity Management Committee operates in connection with the Bank’s Technology Committee (the “Tech Committee” or “TC”).
The ITO has been responsible for technology strategy, enterprise program management, and IT service management. In order to ensure that cybersecurity risk management is integrated into the Company’s overall risk management plans , systems and processes, management provides regular reporting to the Board Audit and Risk Committee at least quarterly .
In order to ensure that cybersecurity risk management is integrated into the Company’s overall risk management plans , systems and processes, management provides regular reporting to the Board Audit and Risk Committee at least quarterly .

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease eleven branch offices located in Middletown, Goshen, Cortlandt Manor, White Plains, Mamaroneck, New City, Mt. Pleasant, Mount Vernon, Bronx, Nanuet, and Yonkers, New York. The branches are leased under agreements that may be renewed for various periods. In addition, HVIA operates from leased offices located in Goshen, New York.
Biggest changePleasant, Mount Vernon, Bronx (2), Nanuet, and Yonkers, New York. The branches are leased under agreements that may be renewed for various periods. In addition, OIA operates from leased offices located in Goshen, New York. At December 31, 2025, the total net book value of our leasehold improvements, furniture, fixtures and equipment was approximately $15.5 million. ​
Item 2. Properties We operate from our main office and 15 branch offices. We own our main office in Middletown, New York, and four branch offices which are located at Trust Way in Middletown as well as in Chester, in Newburgh and in Montgomery, New York.
Item 2. Properties We operate from our main office and 15 branch offices. We own our main office and three branch offices in Middletown, NY as well as locations in Chester, in Newburgh and in Montgomery, New York. We lease twelve branch offices located in Middletown, Goshen, Cortlandt Manor, White Plains, Mamaroneck, New City, Mt.
Removed
At December 31, 2024, the total net book value of our leasehold improvements, furniture, fixtures and equipment was approximately $15.8 million. ​ ​ ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe lawsuit requests damages and demands repurchase by the lead lender of the participated loan amount in accordance with the rights available under the terms of the participation agreement. As of December 31, 2024, the Bank remains as plaintiff in this litigation. ​ 46 Table of Contents Item 4.
Biggest changeThe lawsuit requests damages and demands repurchase by the lead lender of the participated loan amount in accordance with the rights available under the terms of the participation agreement. As of December 31, 2025, the Bank remains as plaintiff in this litigation. ​ Item 4. Mine Safety Disclosures Not applicable. ​ 46 Table of Contents PART II
Item 3. Legal Proceedings From time to time, we are a party to various litigation matters incidental to the conduct of our business. As of December 31, 2024, we do not believe that any currently pending legal proceedings will have a material adverse effect on our business, financial condition or results of operations.
Item 3. Legal Proceedings From time to time, we are a party to various litigation matters incidental to the conduct of our business. As of December 31, 2025, we do not believe that any currently pending legal proceedings will have a material adverse effect on our business, financial condition or results of operations.
Removed
Mine Safety Disclosures Not applicable. ​ 47 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSee “Item 1 Business — Supervision and Regulation — Holding Company Regulation.” Because we are a bank holding company, we are dependent upon the payment of dividends by Orange Bank & Trust Company and HVIA to us as our principal source of funds to pay dividends in the future, if any, and to make other payments.
Biggest changeSee “Item 1 Business — Supervision and Regulation — Holding Company Regulation.” 47 Table of Contents Because we are a bank holding company, we are dependent upon the payment of dividends by Orange Bank & Trust Company and OIA to us as our principal source of funds to pay dividends in the future, if any, and to make other payments.
Any future determination to pay cash dividends on our common stock will be made by our board of directors and will depend on a number of factors, including: • our historical and projected financial condition, liquidity and results of operations; • our capital levels and regulatory requirements; • statutory and regulatory prohibitions and other limitations; • any contractual restriction on our ability to pay cash dividends, including pursuant to the terms of any of our credit agreements or other borrowing arrangements; • our business strategy; • tax considerations; • any acquisitions or potential acquisitions that we may assess; • general economic conditions; and • other factors deemed relevant by our board of directors.
Any future determination to pay cash dividends on our common stock will be made by our board of directors and will continue to depend on a number of factors, including: • our historical and projected financial condition, liquidity and results of operations; • our capital levels and regulatory requirements; • statutory and regulatory prohibitions and other limitations; • any contractual restriction on our ability to pay cash dividends, including pursuant to the terms of any of our credit agreements or other borrowing arrangements; • our business strategy; • tax considerations; • any acquisitions or potential acquisitions that we may assess; • general economic conditions; and • other factors deemed relevant by our board of directors.
See “Item 1 Business — Supervision and Regulation — Bank Regulation — Dividends.” To pay a cash dividend, a state member bank must also maintain an adequate capital conservation buffer under the capital rules described in “Item 1 Business — Supervision and Regulation — Bank Regulation — Capitalization.” There were no sales of unregistered securities or repurchases of shares of common stock during the quarter ended December 31, 2024. ​ Item 6.
See “Item 1 Business — Supervision and Regulation — Bank Regulation — Dividends.” To pay a cash dividend, a state member bank must also maintain an adequate capital conservation buffer under the capital rules described in “Item 1 Business — Supervision and Regulation — Bank Regulation — Capitalization.” There were no sales of unregistered equity securities or repurchases of shares of common stock during the quarter ended December 31, 2025. ​ Item 6.
In addition, as a 48 Table of Contents depository institution the deposits of which are insured by the FDIC, Orange Bank & Trust Company may not pay dividends or distribute any of its capital assets while it remains in default on any assessment due to the FDIC or if in the FDIC’s opinion, the payment of dividends would constitute an unsafe or unsound practice.
In addition, as a depository institution the deposits of which are insured by the FDIC, Orange Bank & Trust Company may not pay dividends or distribute any of its capital assets while it remains in default on any assessment due to the FDIC or if in the FDIC’s opinion, the payment of dividends would constitute an unsafe or unsound practice.
Subject to prior approval from our board of directors and regulatory restrictions, we intend to continue the payment of a cash dividend of $0.13 per share on a quarterly basis to holders of our common stock.
Subject to prior approval from our board of directors and regulatory restrictions, we intend to continue the payment of a cash dividend of $0.18 per share on a quarterly basis to holders of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The common stock of Orange County Bancorp, Inc. has been listed on The Nasdaq Capital Market under the symbol “OBT” since August 5, 2021. At March 10, 2025, Orange County Bancorp, Inc. had approximately 204 stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The common stock of Orange County Bancorp, Inc. has been listed on The Nasdaq Capital Market under the symbol “OBT” since August 5, 2021. At March 10, 2026, Orange County Bancorp, Inc. had approximately 205 stockholders of record.
Rese rved ​ ​ 49 Table of Contents
Rese rved ​ ​ 48 Table of Contents

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 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 ​ 69 ​ ​ ​ Item 8. Financial Statements and Supplementary Data ​ 71 ​ ​ ​
Biggest changeItem 6. Reserved ​ 48 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 49 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ 69 ​ ​ ​ Item 8. Financial Statements and Supplementary Data ​ 72 ​ ​ ​

Item 7. Management's Discussion & Analysis

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

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Biggest changeDeferred loan fees totaled $4.9 million for each of the years ended December 31, 2024 and 2023, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2024 ​ 2023 ​ Average ​ ​ ​ Average ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ Average ​ Outstanding ​ ​ ​ ​ Average ​ ​ Balance ​ Interest ​ Yield/Rate ​ Balance ​ Interest ​ Yield/Rate ​ (Dollars in thousands) ​ Interest-earning assets: ​ ​ ​ ​ ​ ​ Loans (excluding PPP loans) ​ $ 1,760,057 ​ $ 106,022 6.01 % $ 1,683,232 ​ $ 96,236 5.72 % PPP loans ​ 192 ​ 8 4.16 % 1,133 ​ 28 2.47 % Investment securities available for sale ​ 467,145 ​ 13,255 2.83 % 503,410 ​ 14,055 2.79 % Cash and due from banks and other ​ 153,634 ​ 7,221 4.69 % 142,003 ​ 6,498 4.58 % Restricted stock ​ 8,218 ​ 721 8.75 % 11,561 ​ 953 8.24 % Total interest-earning assets ​ 2,389,246 ​ 127,227 5.31 % 2,341,339 ​ 117,770 5.03 % Noninterest-earning assets ​ 95,597 ​ ​ ​ 96,259 ​ ​ Total assets ​ $ 2,484,843 ​ ​ ​ ​ $ 2,437,598 ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ Interest-bearing demand deposits ​ $ 366,103 ​ $ 1,751 0.48 % $ 331,056 ​ $ 1,284 0.39 % Money market deposits ​ 670,231 ​ 15,199 2.26 % 617,345 ​ 9,429 1.53 % Savings deposits ​ 254,098 ​ 3,525 1.38 % 245,663 ​ 2,413 0.98 % Certificates of deposit ​ 168,202 ​ 7,399 4.39 % 165,239 ​ 6,393 3.87 % Total interest-bearing deposits ​ 1,458,634 ​ 27,874 1.91 % 1,359,303 ​ 19,519 1.44 % FHLB Advances and other borrowings ​ 126,149 ​ 6,666 5.27 % 170,371 ​ 8,938 5.25 % Subordinated notes ​ 19,553 ​ 921 4.70 % 19,481 ​ 922 4.73 % Total interest-bearing liabilities ​ 1,604,336 ​ 35,461 2.20 % 1,549,155 ​ 29,379 1.90 % Noninterest-bearing demand deposits ​ 675,983 ​ ​ ​ ​ 717,689 ​ ​ ​ Other noninterest-bearing liabilities ​ 26,440 ​ ​ ​ ​ 23,338 ​ ​ Total liabilities ​ 2,306,759 ​ ​ ​ ​ 2,290,182 ​ ​ Total stockholders’ equity ​ 178,084 ​ ​ ​ ​ 147,416 ​ ​ Total liabilities and stockholders’ equity ​ $ 2,484,843 ​ ​ ​ ​ $ 2,437,598 ​ ​ Net interest income ​ ​ ​ ​ $ 91,766 ​ ​ $ 88,391 ​ Net interest rate spread (1) ​ ​ ​ 3.11 % ​ ​ 3.13 % Net interest-earning assets (2) ​ $ 784,910 ​ ​ $ 792,184 ​ ​ Net interest margin (3) ​ ​ ​ 3.83 % ​ 3.78 % Average interest-earning assets to interest-bearing liabilities ​ ​ ​ ​ ​ ​ 148.9 % ​ ​ ​ ​ 151.1 % (1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
Biggest changeDeferred loan fees totaled $4.8 million and $4.9 million for each of the years ended December 31, 2025 and 2024, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2025 ​ 2024 ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ Average ​ Outstanding ​ ​ ​ ​ Average ​ ​ Balance ​ Interest ​ Yield/Rate ​ Balance ​ Interest ​ Yield/Rate ​ (Dollars in thousands) ​ Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans (excluding PPP loans) ​ $ 1,895,818 ​ $ 115,785 6.11 % $ 1,760,057 ​ $ 106,022 6.01 % PPP loans ​ 146 ​ 12 8.22 % 192 ​ 8 4.16 % Investment securities available for sale ​ 427,998 ​ 12,213 2.85 % 467,145 ​ 13,255 2.83 % Cash and due from banks and other ​ 157,961 ​ 6,424 4.07 % 153,634 ​ 7,221 4.69 % Restricted stock ​ 6,938 ​ 548 7.90 % 8,218 ​ 721 8.75 % Total interest-earning assets ​ 2,488,861 ​ 134,982 5.42 % 2,389,246 ​ 127,227 5.31 % Noninterest-earning assets ​ 103,142 ​ ​ ​ ​ 95,597 ​ ​ ​ ​ Total assets ​ $ 2,592,003 ​ ​ ​ ​ ​ $ 2,484,843 ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing demand deposits ​ $ 401,856 ​ $ 2,244 0.56 % $ 366,103 ​ $ 1,751 0.48 % Money market deposits ​ 687,865 ​ 14,314 2.08 % 670,231 ​ 15,199 2.26 % Savings deposits ​ 311,195 ​ 4,419 1.42 % 254,098 ​ 3,525 1.38 % Certificates of deposit ​ 162,991 ​ 6,256 3.84 % 168,202 ​ 7,399 4.39 % Total interest-bearing deposits ​ 1,563,907 ​ 27,233 1.74 % 1,458,634 ​ 27,874 1.91 % FHLB Advances and other borrowings ​ 49,584 ​ 2,186 4.41 % 126,149 ​ 6,666 5.27 % Subordinated notes ​ 21,064 ​ 1,507 7.15 % 19,553 ​ 921 4.70 % Total interest-bearing liabilities ​ 1,634,555 ​ 30,926 1.89 % 1,604,336 ​ 35,461 2.20 % Noninterest-bearing demand deposits ​ 691,456 ​ ​ ​ ​ ​ 675,983 ​ ​ ​ ​ Other noninterest-bearing liabilities ​ 29,422 ​ ​ ​ ​ ​ 26,440 ​ ​ ​ ​ Total liabilities ​ 2,355,433 ​ ​ ​ ​ ​ 2,306,759 ​ ​ ​ ​ Total stockholders’ equity ​ 236,570 ​ ​ ​ ​ ​ 178,084 ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ $ 2,592,003 ​ ​ ​ ​ ​ $ 2,484,843 ​ ​ ​ ​ Net interest income ​ ​ ​ ​ $ 104,056 ​ ​ ​ ​ $ 91,766 ​ ​ Net interest rate spread (1) ​ ​ ​ ​ ​ 3.53 % ​ ​ ​ ​ 3.11 % Net interest-earning assets (2) ​ $ 854,306 ​ ​ ​ ​ $ 784,910 ​ ​ ​ ​ Net interest margin (3) ​ ​ ​ ​ ​ 4.18 % ​ ​ ​ 3.83 % Average interest-earning assets to interest-bearing liabilities ​ ​ ​ ​ ​ ​ 152.3 % ​ ​ ​ ​ 148.9 % (1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
Through our wholly owned subsidiaries, Orange Bank & Trust Company and Hudson Valley Investment Advisors, Inc., we offer full-service commercial and consumer banking products and services and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments and affluent individuals in the Lower Hudson Valley region, the New York metropolitan area and nearby markets in Connecticut and New Jersey.
Through our wholly owned subsidiaries, Orange Bank & Trust Company and Orange Investment Advisors, Inc., we offer full-service commercial and consumer banking products and services and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments and affluent individuals in the Lower Hudson Valley region, the New York metropolitan area and nearby markets in Connecticut and New Jersey.
On January 1, 2023, the Company adopted ASU 2016-13 (Topic 326), which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit. The allowance for credit losses is a valuation allowance for management’s estimate of expected credit losses in the loan portfolio.
On January 1, 2023, the Company adopted ASU 2016-13 (Topic 326), which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit. The allowance for credit losses is a valuation allowance for management’s estimate of expected credit losses in the loan portfolio.
Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance via a quantitative analysis which considers available information from internal and external sources related to past loan loss and prepayment experience and current conditions, as well as the incorporation of reasonable and supportable forecasts.
Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance via a quantitative analysis which considers available information from internal and external sources related to past loan loss and prepayment experience and current conditions, as well as the incorporation of reasonable and supportable forecasts.
Management evaluates a variety of factors including available published economic information in arriving at its forecast. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate.
Management evaluates a variety of factors including available published economic information in arriving at its forecast. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate.
Also included in the allowance for credit losses are qualitative reserves that are expected, but, in management’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above.
Also included in the allowance for credit losses are qualitative reserves that are expected, but, in management’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above.
Factors may include changes in lending policies and procedures, size and composition of the portfolio, experience and depth of management and the effect of external factors such as competition, legal and regulatory requirements, among others. The allowance is available for any loan that, in management’s judgment, should be charged off.
Factors may include changes in lending policies and procedures, size and composition of the portfolio, experience and depth of management and the effect of external factors such as competition, legal and regulatory requirements, among others. The allowance is available for any loan that, in management’s judgment, should be charged off.
The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all 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 do general levels of inflation.
The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all 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 the impact of general levels of inflation.
Financial Position and Results of Operations of our Wealth Management Business Segment We conduct our business through two business segments: (1) our banking business segment, which involves the delivery of loan and deposit products to our customers through Orange Bank & Trust Company that provides revenues in our banking business segment; and (2) our wealth management business segment, which includes asset management and trust services to individuals and institutions through HVIA and Orange Bank & Trust Company that provides trust and investment management fee income in our wealth management business segment.
Financial Position and Results of Operations of our Wealth Management Business Segment We conduct our business through two business segments: (1) our banking business segment, which involves the delivery of loan and deposit products to our customers through Orange Bank & Trust Company that provides revenues in our banking business segment; and (2) our wealth management business segment, which includes asset management and trust services to individuals and institutions through OIA and Orange Bank & Trust Company that provides trust and investment management fee income in our wealth management business segment.
From time to time, as part of our loss mitigation strategy, we may renegotiate loan terms based on certain economic and legal reasons related to the borrower’s financial situation. There were no loans modified due to financial difficulties during the year ended December 31, 2024 and during the year ended December 31, 2023. Classified Assets.
From time to time, as part of our loss mitigation strategy, we may renegotiate loan terms based on certain economic and legal reasons related to the borrower’s financial situation. There were no loans modified due to financial difficulties during the year ended December 31, 2025 and during the year ended December 31, 2024. Classified Assets.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2024 and 2023 should be read in conjunction with our audited consolidated financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2025 and 2024 should be read in conjunction with our audited consolidated financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K.
Interest income on restructured loans is accrued after the borrower demonstrates the ability to pay under the restructured terms through a sustained period of repayment performance, which is generally six consecutive months. 55 Table of Contents The following table sets forth information regarding our non-performing assets.
Interest income on restructured loans is accrued after the borrower demonstrates the ability to pay under the restructured terms through a sustained period of repayment performance, which is generally six consecutive months. 54 Table of Contents The following table sets forth information regarding our non-performing assets.
See Note 13 to the Notes to the Consolidated Audited Financial Statements appearing elsewhere in this Annual Report on Form 10-K for actual and required capital amounts and ratios at December 31, 2024 and December 31, 2023. Off-Balance Sheet Arrangements Off-Balance Sheet Arrangements .
See Note 13 to the Notes to the Consolidated Audited Financial Statements appearing elsewhere in this Annual Report on Form 10-K for actual and required capital amounts and ratios at December 31, 2025 and December 31, 2024. Off-Balance Sheet Arrangements Off-Balance Sheet Arrangements .
(3) Net interest margin represents net interest income divided by average total interest-earning assets. ​ 62 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rate/Volume Analysis The following table presents the dollar amount of changes in interest income and interest expense for major components of interest earning assets and interest-bearing liabilities for the years indicated.
(3) Net interest margin represents net interest income divided by average total interest-earning assets. ​ 61 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rate/Volume Analysis The following table presents the dollar amount of changes in interest income and interest expense for major components of interest earning assets and interest-bearing liabilities for the years indicated.
The increase in the average balance of loans was primarily due to our continued investment in commercial real estate, construction, and commercial and industrial loans, whereas the increase in average yield on loans was driven by a disciplined pricing approach within the market for new loan originations.
The increase in the average balance of loans was primarily due to our continued investment in commercial real estate, construction, and commercial and industrial loans, while the increase in average yield on loans was driven by a disciplined pricing approach within the market for new loan originations.
We are subject to various regulatory capital requirements administered by the FRB and New York State Department of Financial Services. At December 31, 2024 and December 31, 2023, we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines.
We are subject to various regulatory capital requirements administered by the FRB and New York State Department of Financial Services. At December 31, 2025 and December 31, 2024, we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines.
Future adjustments to the provision for credit losses and allowance for credit losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company’s control. 52 Table of Contents Discussion and Analysis of Financial Condition Summary Financial Condition .
Future adjustments to the provision for credit losses and allowance for credit losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company’s control. 51 Table of Contents Discussion and Analysis of Financial Condition Summary Financial Condition .
Management believes that the most critical accounting estimate, which involves the most complex or subjective decisions or assessments, is as follows: 51 Table of Contents Allowance for Credit Losses.
Management believes that the most critical accounting estimate, which involves the most complex or subjective decisions or assessments, is as follows: 50 Table of Contents Allowance for Credit Losses.
The allowance is limited to the amount by which the security’s amortized cost basis exceeds the fair value. An impairment that has not been recorded through an allowance for credit losses shall be recorded through other comprehensive income, net of applicable taxes.
An impairment related to credit factors would be recorded through an allowance for credit losses. The allowance is limited to the amount by which the security’s amortized cost basis exceeds the fair value. An impairment that has not been recorded through an allowance for credit losses shall be recorded through other comprehensive income, net of applicable taxes.
Primarily all of the investment securities are backed by loans guaranteed by either U.S. government agencies or U.S government-sponsored entities, and management believes that default is highly unlikely 59 Table of Contents given the lack of historical credit losses and governmental backing.
Primarily all of the investment securities are backed by loans guaranteed by either U.S. government agencies or U.S government-sponsored entities, and management believes that default is highly unlikely given the lack of historical credit losses and governmental backing.
In addition, noninterest income is also impacted by net gains on the sale of investment securities, service charges on deposit accounts, earnings on bank owned life insurance and other fee income consisting primarily of debit card fee income, checkbook fees and rebates and safe deposit box rental income. 50 Table of Contents Noninterest Expense .
In addition, noninterest income is also impacted by net gains on the sale of investment securities or other assets, service charges on deposit accounts, earnings on bank owned life insurance and other fee income consisting primarily of debit card fee income, checkbook fees and rebates and safe deposit box rental income. 49 Table of Contents Noninterest Expense .
The decrease in interest expense on borrowed funds was primarily due to reduced Federal Home Loan Bank advances as a result of increased deposit levels during the year which supported loan growth.
The decrease in interest expense on borrowed funds was primarily due to the continued reduction of Federal Home Loan Bank advances as a result of increased deposit levels during the year which supported loan growth.
Noninterest income is also a contributor to our net income. Noninterest income consists primarily of our investment advisory income and trust income generated by HVIA and our trust department.
Noninterest income is also a contributor to our net income. Noninterest income consists primarily of our investment advisory income and trust income generated by OIA and our trust department.
Based on our deposit retention experience 68 Table of Contents and growth in 2024, current pricing strategy and regulatory restrictions, we anticipate that a substantial portion of maturing time deposits will be retained, and that we can supplement our funding with borrowings in the event that we allow these deposits to run off at maturity. Capital Resources.
Based on our deposit retention experience and growth in 2025, current pricing strategy and regulatory restrictions, we anticipate that a substantial portion of maturing time deposits will be retained and renewed, and that we can supplement our funding with borrowings in the event that we allow these deposits to run off at maturity. Capital Resources.
Interest rates experienced some volatility during 2024. Based on our asset sensitivity, a steepened yield curve and higher interest rates generally could have a beneficial impact on our net interest income. Conversely, a flat yield curve at lower rates would be expected to have an adverse impact on our net interest income. Noninterest Income .
Interest rates experienced some volatility and pressure during 2025. Based on our asset sensitivity, a steepened yield curve and higher interest rates generally could have a beneficial impact on our net interest income. Conversely, a downward yield curve at lower rates would be expected to have an adverse impact on our net interest income. Noninterest Income .
Net cash used in investing activities, which consists primarily of disbursements for loan originations and the purchase of securities, offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on securities, was $29.4 million and $144.9 million for the year ended December 31, 2024 and the year ended December 31, 2023, respectively.
Net cash used in investing activities, which consists primarily of disbursements for loan originations and the purchase of securities, offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on securities, was $74.2 million and $29.4 million for the year ended December 31, 2025 and the year ended December 31, 2024, respectively.
Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. ​
Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. ​ ​ 68 Table of Contents
We have the capacity to borrow up to $512.2 million from the Federal Home Loan Bank of New York at December 31, 2024. In September 2020, we issued $20.0 million in aggregate principal amount of fixed to floating subordinated notes (the “2020 Notes”) to certain institutional investors.
We have the capacity to borrow up to $652.7 million from the Federal Home Loan Bank of New York at December 31, 2025. In September 2020, we issued $20.0 million in aggregate principal amount of fixed to floating subordinated notes (the “2020 Notes”) to certain institutional investors.
We held approximately $180.0 million in brokered deposits (excluding reciprocal deposits obtained through the Certificate Deposit Account Registry Service (CDARS) and Insured Cash Sweep (ICS) networks) at December 31, 2024 and $172.4 million in brokered deposits at December 31, 2023.
We held approximately $125.0 million in brokered deposits (excluding reciprocal deposits obtained through the Certificate Deposit Account Registry Service (CDARS) and Insured Cash Sweep (ICS) networks) at December 31, 2025 and $180.0 million in brokered deposits at December 31, 2024.
We also have a borrowing agreement with Atlantic Community Bankers Bank (“ACBB”) to provide short-term borrowings of $2.5 million at December 31, 2024. There were no outstanding borrowings with ACBB at December 31, 2024. Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities.
We also have a borrowing agreement with Atlantic Community Bankers Bank (“ACBB”) to provide short-term borrowings of $5.0 million at December 31, 2025. There were no outstanding borrowings with ACBB at December 31, 2025. 67 Table of Contents Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities.
Our most liquid assets are cash and due from banks. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At December 31, 2024 and December 31, 2023, cash and due from banks totaled $150.3 million and $147.4 million, respectively.
Our most liquid assets are cash and due from banks. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At December 31, 2025 and December 31, 2024, cash and due from banks totaled $204.2 million and $150.3 million, respectively.
We can elect to sell or repurchase this funding as reciprocal deposits from other IntraFi Network banks depending on our funding needs. At December 31, 2024, we had a total of $99.4 million of IntraFi Network deposits, all of which were repurchased as reciprocal deposits from the IntraFi Network.
We can elect to sell or repurchase this funding as reciprocal deposits from other IntraFi Network banks depending on our funding needs. At December 31, 2025, we had a total of $101.8 million of IntraFi Network deposits, all of which were repurchased as reciprocal deposits from the IntraFi Network.
We also offer private banking services through Orange Bank & Trust Private Banking, a division of Orange Bank & Trust Company, and provide trust and wealth management services through Orange Bank & Trust Company’s trust services department and HVIA, which combined has $1.8 billion in assets under management at December 31, 2024.
We also offer private banking services through Orange Bank & Trust Private Banking, a division of Orange Bank & Trust Company, and provide trust and wealth management services through Orange Bank & Trust Company’s trust services department and OIA, which combined has $1.9 billion in assets under management at December 31, 2025.
During 2024, investment securities decreased by $46.2 million, or 9.4%. This decrease represents management’s continued focus on increased liquidity as the maturities of securities were primarily used to enhance the Bank’s cash position and pay down borrowings. Cash and due from banks.
During 2025, investment securities decreased by $24.4 million, or 5.5%. This decrease represents management’s continued focus on increased liquidity as the maturities of securities were primarily used to enhance the Bank’s cash position and pay-down borrowings. Cash and due from banks.
We designated $20.9 million of our assets at December 31, 2024 as special mention compared to $32.8 million designated as special mention at December 31, 2023. Allowance for Credit Losses Please see “— Critical Accounting Estimates — Allowance for Credit Losses” for additional discussion.
We designated $58.4 million of our assets at December 31, 2025 as special mention compared to $20.9 million designated as special mention at December 31, 2024. Allowance for Credit Losses Please see “— Critical Accounting Estimates — Allowance for Credit Losses” for additional discussion.
At December 31, 2023, we had $409.5 million in loan commitments outstanding. We also had $17.3 million in standby letters of credit at December 31, 2023. For further information, see Note 16 to the Notes to the Consolidated Audited Financial Statements appearing elsewhere in this Annual Report on Form 10-K.
At December 31, 2024, we had $390.6 million in loan commitments outstanding. We also had $15.5 million in standby letters of credit at December 31, 2024. For further information, see Note 16 to the Notes to the Consolidated Audited Financial Statements appearing elsewhere in this Annual Report on Form 10-K.
The market value of assets under management and/or administration at December 31, 2024 and 2023 was approximately $1.8 billion at December 31, 2024, and $1.6 billion at December 31, 2023. This includes assets held at both Orange Bank & Trust Company and HVIA at December 31, 2024 and 2023, respectively.
The market value of assets under management and/or administration at December 31, 2025 and 2024 was approximately $1.9 billion at December 31, 2025, and $1.8 billion at December 31, 2024. This includes assets held at both Orange Bank & Trust Company and OIA at December 31, 2025 and 2024, respectively.
Our exposure to credit loss is represented by the contractual amount of the instruments. We use the same credit policies in making commitments as we do for on-balance sheet instruments. At December 31, 2024, we had $390.6 million in loan commitments outstanding. We also had $15.5 million in standby letters of credit at December 31, 2024.
Our exposure to credit loss is represented by the contractual amount of the instruments. We use the same credit policies in making commitments as we do for on-balance sheet instruments. At December 31, 2025, we had $424.3 million in loan commitments outstanding. We also had $18.6 million in standby letters of credit at December 31, 2025.
As of December 31, 2024, and December 31, 2023, the aggregate amount of uninsured deposits (deposits in amounts greater than or equal to $250,000, which is the maximum amount for federal deposit insurance) was $1.1 billion and $1.0 billion, respectively. In addition, as of December 31, 2024, the aggregate amount of all our uninsured certificates of deposit was $11.6 million.
As of December 31, 2025, and December 31, 2024, the aggregate amount of uninsured deposits (deposits in amounts greater than or equal to $250,000, which is the maximum amount for federal deposit insurance) was $1.3 billion and $1.1 billion, respectively. In addition, as of December 31, 2025, the aggregate amount of all our uninsured certificates of deposit was $10.5 million.
At December 31, 2024, total certificates of deposit were $221.0 million or 10.3% of total deposits. We continue to participate in the IntraFi Network, allowing us to provide access to multi-million-dollar FDIC deposit insurance protection on deposits for customers, businesses and public entities.
At December 31, 2025, total certificates of deposit were $159.0 million or 6.9% of total deposits. We continue to participate in the IntraFi Network, allowing us to provide access to multi-million-dollar FDIC deposit insurance protection on deposits for customers, businesses and public entities.
Interest income on loans increased by $9.8 million, or 10.2%, to $106.0 million during the year ended December 31, 2024 from $96.2 million during the year ended December 31, 2023.
Interest income on loans increased by $9.8 million, or 9.2%, to $115.8 million during the year ended December 31, 2025 from $106.0 million during the year ended December 31, 2024.
Interest expense on Federal Home Loan Bank borrowings decreased to $6.7 million for the year ended December 31, 2024 as compared to $8.9 million for the year ended December 31, 2023.
Interest expense on Federal Home Loan Bank borrowings decreased to $2.2 million for the year ended December 31, 2025 as compared to $6.7 million for the year ended December 31, 2024.
Supporting the increase in interest income was an increase in the average yield on interest earning assets of 28 basis points to 5.31% during the year ended December 31, 2024 from 5.03% for the year ended December 31, 2023.
Supporting the increase in interest income was an increase in the average yield on interest earning assets of 11 basis points to 5.42% during the year ended December 31, 2025 from 5.31% for the year ended December 31, 2024.
Income Tax Expense. We recorded an income tax expense of $6.9 million for the year ended December 31, 2024, reflecting an effective tax rate of 19.9%. For the year ended December 31, 2023, we recorded an income tax expense of $7.7 million, reflecting an effective tax rate of 20.6%.
Income Tax Expense. We recorded an income tax expense of $9.9 million for the year ended December 31, 2025, reflecting an effective tax rate of 19.3%. For the year ended December 31, 2024, we recorded an income tax expense of $6.9 million, reflecting an effective tax rate of 19.9%.
The 2020 Notes are non-callable for five years, have a stated maturity of September 30, 2030, and bear interest at a fixed rate of 4.25% per year until September 30, 2025.
The 2020 Notes were non-callable for five years, had a stated maturity of September 30, 2030, and a fixed interest rate of 4.25% per year until September 30, 2025.
Average balances for cash and due from banks increased to $153.6 million for the year ended December 31, 2024 from $142.0 million for the year ended December 31, 2023, representing an increase of $11.6 million, or 8.2%. Interest Expense.
Average balances for cash and due from banks increased to $158.0 million for the year ended December 31, 2025 from $153.6 million for the year ended December 31, 2024, representing an increase of $4.3 million, or 2.8%. Interest Expense.
We designate an asset as “special mention” if the asset has a potential weakness that warrants management’s close attention. 56 Table of Contents The following table summarizes classified assets of all portfolio types at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ At December 31, ​ 2024 ​ 2023 ​ ​ (Dollars in thousands) Classification of Assets: ​ ​ ​ ​ ​ ​ Substandard ​ $ 43,981 ​ $ 19,615 Doubtful ​ — ​ — Loss ​ — ​ — Total Classified Assets ​ $ 43,981 ​ $ 19,615 Special Mention ​ $ 20,851 ​ $ 32,804 ​ On the basis of management’s review of our assets, we classified $44.0 million of our assets at December 31, 2024 as substandard compared to $19.6 million at December 31, 2023.
We designate an asset as “special mention” if the asset has a potential weakness that warrants management’s close attention. 55 Table of Contents The following table summarizes classified assets of all portfolio types at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ At December 31, ​ ​ ​ ​ 2025 ​ 2024 ​ ​ (Dollars in thousands) Classification of Assets: ​ ​ ​ ​ ​ ​ Substandard ​ $ 73,706 ​ $ 43,981 Doubtful ​ — ​ — Loss ​ — ​ — Total Classified Assets ​ $ 73,706 ​ $ 43,981 Special Mention ​ $ 58,422 ​ $ 20,851 ​ On the basis of management’s review of our assets, we classified $73.7 million of our assets at December 31, 2025 as substandard compared to $44.0 million at December 31, 2024.
Interest income on investment securities decreased by $800 thousand, or 5.7%, to $13.3 million during the year ended December 31, 2024 from $14.1 million during the year ended December 31, 2023. The decrease in interest income on securities was due to a decrease in the average balance of securities, partially offset by an increase in the average yield on securities.
Interest income on investment securities decreased by $1.1 million, or 7.9%, to $12.2 million during the year ended December 31, 2025 from $13.3 million during the year ended December 31, 2024. The decrease in interest income on securities was due to a decrease in the average balance of securities, partially offset by an increase in the average yield on securities.
The average balance of interest-bearing deposits increased by $99.3 million, or 7.3%, to $1.5 billion for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to increases in the average balances of all deposit categories.
The average balance of interest-bearing deposits increased by $105.3 million, or 7.2%, to $1.6 billion for the year ended December 31, 2025 compared to $1.5 billion for the year ended December 31, 2024 due to increases in the average balances of all deposit categories, except certificates of deposit.
The following table sets forth our loan delinquencies, including non-accrual loans, by type and amount at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ ​ 2024 ​ 2023 ​ ​ 30 – 59 ​ 60 – 89 ​ 90 Days ​ 30 – 59 ​ 60 – 89 ​ 90 Days ​ ​ Days ​ Days ​ or More ​ Days ​ Days ​ or More ​ Past Due Past Due Past Due Past Due Past Due Past Due ​ (In thousands) Commercial and industrial ​ $ — ​ $ 128 ​ $ 150 ​ $ 229 ​ $ — ​ $ 327 Commercial real estate ​ 141 ​ 398 ​ 6,000 ​ 20 ​ — ​ 300 Commercial real estate construction ​ — ​ — ​ — ​ — ​ — ​ — Residential real estate ​ 294 ​ — ​ — ​ — ​ — ​ 1,167 Home equity ​ — ​ — ​ — ​ — ​ — ​ — Consumer ​ — ​ — ​ — ​ — ​ — ​ — Total ​ $ 435 ​ $ 526 ​ $ 6,150 ​ $ 249 ​ $ — ​ $ 1,794 ​ 54 Table of Contents The following table sets forth our loan delinquencies, including non-accrual loans, at the dates indicated as a percentage of loans for the corresponding types. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ ​ ​ 2024 ​ ​ 2023 ​ ​ ​ 30 – 59 ​ 60 – 89 ​ 90 Days ​ ​ 30 – 59 ​ 60 – 89 ​ 90 Days ​ ​ ​ Days ​ Days ​ or More ​ ​ Days ​ Days ​ or More ​ ​ Past Due Past Due Past Due ​ Past Due Past Due Past Due Commercial and industrial — % 0.05 % 0.06 % ​ 0.08 % — % 0.12 % Commercial real estate 0.01 % 0.03 % 0.44 % ​ 0.00 % — % 0.02 % Commercial real estate construction — — — ​ — — — Residential real estate 0.39 % — — % ​ — % — 1.49 % Home equity — — — ​ — — % — % Consumer — % — % — % ​ — % — % — % Total 0.02 % 0.03 % 0.34 % ​ 0.01 % — % 0.10 % ​ Non-performing Assets Management reviews a loan for individual evaluation when it is non-performing or when it is probable at least a portion of the loan will not be collected in accordance with the original terms due to a deterioration in the financial condition of the borrower or the value of the underlying collateral if the loan is collateral dependent.
The following table sets forth our loan delinquencies, including non-accrual loans, by type and amount at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ ​ 2025 ​ 2024 ​ ​ 30 – 59 ​ 60 – 89 ​ 90 Days ​ 30 – 59 ​ 60 – 89 ​ 90 Days ​ ​ Days ​ Days ​ or More ​ Days ​ Days ​ or More ​ ​ ​ ​ Past Due ​ ​ ​ Past Due ​ ​ ​ Past Due ​ ​ ​ Past Due ​ ​ ​ Past Due ​ ​ ​ Past Due ​ (In thousands) Commercial and industrial ​ $ 744 ​ $ 77 ​ $ 1,518 ​ $ — ​ $ 128 ​ $ 150 Commercial real estate ​ — ​ — ​ 8,414 ​ 141 ​ 398 ​ 6,000 Commercial real estate construction ​ — ​ — ​ — ​ — ​ — ​ — Residential real estate ​ — ​ — ​ 1 ​ 294 ​ — ​ — Home equity ​ — ​ — ​ 616 ​ — ​ — ​ — Consumer ​ — ​ — ​ — ​ — ​ — ​ — Total ​ $ 744 ​ $ 77 ​ $ 10,549 ​ $ 435 ​ $ 526 ​ $ 6,150 ​ 53 Table of Contents The following table sets forth our loan delinquencies, including non-accrual loans, at the dates indicated as a percentage of loans for the corresponding types. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ ​ ​ 2025 ​ ​ 2024 ​ ​ ​ 30 – 59 ​ 60 – 89 ​ 90 Days ​ ​ 30 – 59 ​ 60 – 89 ​ 90 Days ​ ​ ​ Days ​ Days ​ or More ​ ​ Days ​ Days ​ or More ​ ​ ​ ​ ​ Past Due ​ ​ ​ Past Due ​ ​ ​ Past Due ​ ​ ​ ​ Past Due ​ ​ ​ Past Due ​ ​ ​ Past Due ​ ​ ​ Commercial and industrial 0.30 % 0.03 % 0.61 % ​ — % 0.05 % 0.06 % Commercial real estate — % — % 0.57 % ​ 0.01 % 0.03 % 0.44 % Commercial real estate construction — % — % — % ​ — % — % — % Residential real estate — % — % 0.00 % ​ 0.39 % — % — % Home equity — % — % 2.72 % ​ — % — % — % Consumer — % — % — % ​ — % — % — % Total 0.04 % 0.00 % 0.54 % ​ 0.02 % 0.03 % 0.34 % ​ Non-performing Assets Management reviews a loan individually when it is non-performing or when it is probable at least a portion of the loan will not be collected in accordance with the original terms due to a deterioration in the financial condition of the borrower or the value of the underlying collateral if the loan is collateral dependent.
We had no other real estate owned at December 31, 2024 or 2023, respectively. Non-performing assets increased $1.9 million, or 42.3%, to $6.3 million, or 0.25% of total assets, at December 31, 2024 from $4.4 million, or 0.18% of total assets, at December 31, 2023.
We had no other real estate owned at December 31, 2025 or 2024, respectively. Non-performing assets increased $4.8 million, or 76.7%, to $11.1 million, or 0.42% of total assets, at December 31, 2025 from $6.3 million, or 0.25% of total assets, at December 31, 2024.
Net cash used by financing activities, consisting of activity in deposit accounts and borrowings, was $2.2 million for the year ended December 31, 2024 and net cash provided by financing activities for the year ended December 31, 2023, was $161.7 million. We are committed to maintaining a strong liquidity position. We monitor our liquidity position daily.
Net cash from financing activities, consisting of activity in deposit accounts, borrowings, capital and debt issuances was $84.2 million for the year ended December 31, 2025 and net cash used by financing activities for the year ended December 31, 2024, was $2.2 million. We are committed to maintaining a strong liquidity position. We monitor our liquidity position daily.
Net interest income increased $3.4 million, or 3.8%, to $91.8 million for the year ended December 31, 2024 from $88.4 million for the year ended December 31, 2023 due primarily to an increase in net interest margin.
Net interest income increased $12.3 million, or 13.4%, to $104.1 million for the year ended December 31, 2025 from $91.8 million for the year ended December 31, 2024 due primarily to an increase in net interest margin.
Our primary sources of funds consist of deposit inflows, loan repayments and maturities and sales of securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.
The average balance of loans (excluding PPP loans) increased by $76.8 million, or 4.6%, to $1.8 billion for the year ended December 31, 2024 compared to $1.7 billion for the year ended December 31, 2023.
The average balance of loans (excluding PPP loans) increased by $135.8 million, or 7.7%, to $1.9 billion for the year ended December 31, 2025 compared to $1.8 billion for the year ended December 31, 2024.
This increase was the result of an increase in our average interest-earning assets which increased by $47.9 million, or 2.1%, to $2.4 billion for the year ended December 31, 2024 compared to $2.3 billion for the year ended December 31, 2023.
This increase was the result of an increase in our average interest-earning assets which increased by $99.6 million, or 4.2%, to $2.5 billion for the year ended December 31, 2025 compared to $2.4 billion for the year ended December 31, 2024.
The average balance of securities decreased by $36.3 million, or 7.2%, to $467.1 million for the year ended December 31, 2024 compared to $503.4 million for the year ended December 31, 2023. The decrease in the average balance of securities was due to maturity and amortization of lower yielding securities during 2024 as compared to 2023.
The average balance of securities decreased by $39.2 million, or 8.4%, to $428.0 million for the year ended December 31, 2025 compared to $467.1 million for the year ended December 31, 2024. The decrease in the average balance of securities was due to maturity and amortization of lower yielding securities during 2025 as compared to 2024.
Net cash provided by operating activities was $34.6 million and $44.5 million for the year ended December 31, 2024 and the year ended December 31, 2023, respectively.
Net cash provided by operating activities was $43.9 million and $34.6 million for the year ended December 31, 2025 and the year ended December 31, 2024, respectively.
The average rate paid on interest-bearing liabilities increased 30 basis points to 2.20% during the year ended December 31, 2024 from 1.90% for the year ended December 31, 2023.
The average rate paid on interest-bearing liabilities decreased 31 basis points to 1.89% during the year ended December 31, 2025 from 2.20% for the year ended December 31, 2024.
Our total assets were $2.5 billion at December 31, 2024, an increase of $24.5 million from December 31, 2023. The increase was primarily due to increased net loan growth of approximately $67.8 million, or 3.9%, during the year. The increase in assets also included an increase in cash and due from banks of $3.0 million, or 2.0%.
Our total assets were $2.7 billion at December 31, 2025, an increase of $149.5 million from December 31, 2024. The increase was primarily due to increased net loan growth of approximately $132.3 million, or 7.4%, during the year. The increase in assets also included an increase in cash and due from banks of $53.9 million, or 35.9%.
Interest bearing demand deposits increased $26.2 million in 2024 due to certain seasonality of municipal deposit relationships, as well as the impact of attorney trust account growth during the year. At December 31, 2024, our core deposits (which includes all deposits except for certificates of deposit) totaled $1.9 billion, or 89.7% of our total deposits.
Interest bearing demand deposits increased $88.5 million in 2025 due to certain seasonality of municipal deposit relationships combined with the impact of attorney trust account growth during the year. At December 31, 2025, our core deposits (which includes all deposits except for certificates of deposit) totaled $2.2 billion, or 93.1% of our total deposits.
From September 30, 2025 to the maturity date or early redemption date, the interest rate will reset quarterly to a level equal to the current three-month SOFR plus 413 basis points, payable quarterly in arrears. Stockholders’ Equity Total stockholders’ equity increased $20.2 million, or 12.2%, to $185.5 million at December 31, 2024, from $165.4 million at December 31, 2023.
From September 30, 2030 to the maturity date or early redemption date, the interest rate will reset quarterly to a level equal to the then current three-month SOFR plus 320.5 basis points, payable quarterly in arrears. Stockholders’ Equity Total stockholders’ equity increased $98.8 million, or 53.3%, to $284.4 million at December 31, 2025, from $185.5 million at December 31, 2024.
The average balances are daily averages and, for loans, include both performing and nonperforming balances. Interest income on loans includes the effects of discount 61 Table of Contents accretion and net deferred loan origination costs accounted for as yield adjustments.
No tax equivalent yield adjustments have been made as the effects would be immaterial. The average balances are daily averages and, for loans, include both performing and nonperforming balances. Interest income on loans includes the effects of discount 60 Table of Contents accretion and net deferred loan origination costs accounted for as yield adjustments.
Non-performing loans aggregated approximately $6.3 million at December 31, 2024 as compared to $4.4 million at December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ At December 31, ​ ​ 2024 2023 ​ ​ (Dollars in thousands) Non-accrual loans: ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 293 ​ $ 556 ​ Commercial real estate ​ 6,000 ​ 2,692 ​ Commercial real estate construction ​ — ​ — ​ Residential real estate ​ 6 ​ 1,179 ​ Home equity ​ — ​ — ​ Consumer ​ — ​ — ​ Total non-accrual loans ​ 6,299 ​ 4,427 ​ Accruing loans 90 days or more past due: ​ ​ ​ Commercial and industrial ​ — ​ — ​ Commercial real estate ​ — ​ — ​ Commercial real estate construction ​ — ​ — ​ Residential real estate ​ — ​ — ​ Home equity ​ — ​ — ​ Consumer ​ — ​ — ​ Total accruing loans 90 days or more past due ​ — ​ — ​ Total non-performing loans ​ 6,299 ​ 4,427 ​ Other real estate owned ​ — ​ — ​ Other non-performing assets ​ — ​ — ​ Total non-performing assets ​ $ 6,299 ​ $ 4,427 ​ Ratios: ​ ​ ​ Total non-performing loans to total loans ​ 0.35 % 0.25 % Total non-performing loans to total assets ​ 0.25 % 0.18 % Total non-performing assets to total assets ​ 0.25 % 0.18 % ​ Non-performing loans at December 31, 2024 totaled $6.3 million and consisted mainly of $6.0 million related to commercial real estate loans and $293 thousand of commercial and industrial loans as well as $6 thousand of residential real estate loans.
Non-performing loans aggregated approximately $11.1 million at December 31, 2025 as compared to $6.3 million at December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ At December 31, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ (Dollars in thousands) Non-accrual loans: ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 1,577 ​ $ 293 ​ Commercial real estate ​ 8,690 ​ 6,000 ​ Commercial real estate construction ​ — ​ — ​ Residential real estate ​ 1 ​ 6 ​ Home equity ​ 844 ​ — ​ Consumer ​ — ​ — ​ Total non-accrual loans ​ 11,112 ​ 6,299 ​ Accruing loans 90 days or more past due: ​ ​ ​ ​ ​ Commercial and industrial ​ 18 ​ — ​ Commercial real estate ​ — ​ — ​ Commercial real estate construction ​ — ​ — ​ Residential real estate ​ — ​ — ​ Home equity ​ — ​ — ​ Consumer ​ — ​ — ​ Total accruing loans 90 days or more past due ​ 18 ​ — ​ Total non-performing loans ​ 11,130 ​ 6,299 ​ Other real estate owned ​ — ​ — ​ Other non-performing assets ​ — ​ — ​ Total non-performing assets ​ $ 11,130 ​ $ 6,299 ​ Ratios: ​ ​ ​ ​ ​ Total non-performing loans to total loans ​ 0.57 % 0.35 % Total non-performing loans to total assets ​ 0.42 % 0.25 % Total non-performing assets to total assets ​ 0.42 % 0.25 % ​ Non-performing loans at December 31, 2025 totaled $11.1 million and consisted mainly of $8.7 million related to commercial real estate loans and $1.6 million of commercial and industrial loans as well as $844 thousand associated with home equity loans.
Commercial real estate loans increased $102.7 million, or 8.2%, to $1.4 billion at December 31, 2024 from $1.3 billion at December 31, 2023 primarily as a result of continued loan demand by our commercial real estate customers and developers, along with our strategy to expand commercial real estate lending in our market area.
Commercial real estate loans increased $118.0 million, or 8.7%, to $1.5 billion at December 31, 2025 from $1.4 billion at December 31, 2024 primarily as a result of continued loan demand by our commercial real estate customers, along with our strategy of continued expansion within commercial real estate lending in our market area.
The average yield on loans increased by 29 basis points from 5.72% for the year ended December 31, 2023 to 6.01% for the year ended December 31, 2024.
The average yield on loans increased by 10 basis points from 6.01% for the year ended December 31, 2024 to 6.11% for the year ended December 31, 2025.
The average yield on securities increased by four basis points from 2.79% for the year ended December 31, 2023 to 2.83% for the year ended December 31, 2024. The increase in the average yield on securities resulted from higher-yielding securities purchased during a period of increasing market interest rates combined with the maturity of lower-yielding investment securities during 2024.
The average yield on securities increased by two basis points from 2.83% for the year ended December 31, 2024 to 2.85% for the year ended December 31, 2025. The increase in the average yield on securities resulted from higher-yielding securities purchased combined with the maturity of lower-yielding investment securities during 2025.
The average balance of Federal Home Loan Bank advances decreased from $170.4 million for the year ended December 31, 2023 to an average balance of $126.1 million for the year ended December 31, 2024.
The average balance of Federal Home Loan Bank advances decreased from $126.2 million for the year ended December 31, 2024 to an average balance of $49.6 million for the year ended December 31, 2025.
Future adjustments to the provision for credit losses and allowance for credit losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company’s control. 57 Table of Contents The following table sets forth activity in our allowance for credit losses for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or for the Year Ended ​ ​ ​ December 31, ​ ​ 2024 2023 ​ ​ (Dollars in thousands) Balance at beginning of year ​ $ 25,182 ​ $ 21,832 ​ Adoption of ASC 326 ​ ​ — ​ ​ 1,483 ​ Charge-offs: ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ 10 ​ 1,569 Commercial real estate ​ 8,685 ​ — Commercial real estate construction ​ — ​ — Residential real estate ​ 94 ​ — Home equity ​ 33 ​ — Consumer ​ 1 ​ 37 PPP loans ​ — ​ — Total charge-offs ​ 8,823 ​ 1,606 Recoveries: ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ 53 ​ 75 Commercial real estate ​ — ​ 173 Commercial real estate construction ​ — ​ — Residential real estate ​ — ​ — Home equity ​ — ​ — Consumer ​ 79 ​ 211 Total recoveries ​ 132 ​ 459 Net charge-offs (recoveries) ​ 8,691 ​ 1,147 Provision for credit losses ​ 9,586 ​ 3,014 Balance at end of year ​ $ 26,077 ​ $ 25,182 ​ Ratios: ​ ​ ​ ​ ​ ​ ​ Net charge-offs to average loans outstanding ​ 0.49 % 0.07 % Allowance for credit losses to non-performing loans at end of year ​ 413.99 % 568.83 % Allowance for credit losses to total loans at end of year ​ 1.44 % 1.44 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents the summary of net charge-offs (recovery) to average loans outstanding by loan type for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ Net charge-offs to average loans outstanding ​ ​ 0.49% ​ ​ 0.07% Broken down by loan type as follows, excluding PPP: ​ ​ ​ ​ ​ ​ Commercial and Industrial ​ 0.00% ​ 0.09% Commercial real estate ​ 0.48% ​ 0.00% Commercial real estate construction ​ 0.00% ​ 0.00% Residential real estate ​ 0.01% ​ 0.00% Home equity ​ 0.00% ​ 0.00% Consumer ​ 0.00% ​ -0.01% ​ The allowance for credit losses increased by $895 thousand, or 3.6%, to $26.1 million, or 1.44% of total loans at December 31, 2024 from $25.2 million, or 1.44% of total loans, at December 31, 2023.
Future adjustments to the provision for credit losses and allowance for credit losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company’s control. 56 Table of Contents The following table sets forth activity in our allowance for credit losses for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or for the Year Ended ​ ​ ​ December 31, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ (Dollars in thousands) Balance at beginning of year ​ $ 26,077 ​ $ 25,182 ​ Charge-offs: ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ 6,022 ​ 10 Commercial real estate ​ 100 ​ 8,685 Commercial real estate construction ​ — ​ — Residential real estate ​ 16 ​ 94 Home equity ​ — ​ 33 Consumer ​ 5 ​ 1 PPP loans ​ — ​ — Total charge-offs ​ 6,143 ​ 8,823 Recoveries: ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ 442 ​ 53 Commercial real estate ​ — ​ — Commercial real estate construction ​ 76 ​ — Residential real estate ​ — ​ — Home equity ​ — ​ — Consumer ​ 41 ​ 79 Total recoveries ​ 559 ​ 132 Net charge-offs (recoveries) ​ 5,584 ​ 8,691 Provision for credit losses ​ 7,842 ​ 9,586 Balance at end of period ​ $ 28,335 ​ $ 26,077 ​ Ratios: ​ ​ ​ ​ ​ ​ ​ Net charge-offs to average loans outstanding ​ 0.29 % 0.49 % Allowance for credit losses to non-performing loans at end of period ​ 254.58 % 413.99 % Allowance for credit losses to total loans at end of period ​ 1.45 % 1.44 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents the summary of net charge-offs (recovery) to average loans outstanding by loan type for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ Net charge-offs to average loans outstanding ​ ​ 0.29% ​ ​ 0.49% Broken down by loan type as follows, excluding PPP: ​ ​ ​ ​ ​ ​ Commercial and Industrial ​ 0.30% ​ 0.00% Commercial real estate ​ 0.01% ​ 0.48% Commercial real estate construction ​ -0.01% ​ 0.00% Residential real estate ​ 0.00% ​ 0.01% Home equity ​ 0.00% ​ 0.00% Consumer ​ -0.01% ​ 0.00% ​ The allowance for credit losses increased by $2.3 million, or 8.7%, to $28.3 million, or 1.45% of total loans at December 31, 2025 from $26.1 million, or 1.44% of total loans, at December 31, 2024.
Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $443.8 million at December 31, 2024 and $490.0 million at December 31, 2023. Certificates of deposit due within one year of December 31, 2024 totaled $216.8 million, or 98.1% of total certificates of deposit.
Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $419.4 million at December 31, 2025 and $443.8 million at December 31, 2024. Certificates of deposit due within one year of December 31, 2025 totaled $148.8 million, or 93.6% of total certificates of deposit.
Interest income on cash and due from banks and other increased $723 thousand, or 11.1%, to $7.2 million for the year ended December 31, 2024 from $6.5 million for the year ended December 31, 2023.
Interest income on cash and due from banks and other decreased $797 thousand, or 11.0%, to $6.4 million for the year ended December 31, 2025 from $7.2 million for the year ended December 31, 2024.
The increase in interest income from cash and due from banks and other was attributable to an increase in the average yield earned on cash and due from banks combined with increased average balances during the year.
The decrease in interest income from cash and due from banks and other was attributable to a decrease in the average yield earned on cash and due from banks offset by a slight increase in average balances during the year.
The average balance of interest-bearing liabilities increased by $55.2 million, or 3.6%, to $1.6 billion for the year ended December 31, 2024 compared to $1.5 billion for the year ended December 31, 2023. 64 Table of Contents Interest expense on interest-bearing deposits increased by $8.4 million, or 42.8%, to $27.9 million during the year ended December 31, 2024 from $19.5 million during the year ended December 31, 2023.
The average balance of interest-bearing liabilities increased by $30.2 million, or 1.9%, to approximately $1.6 billion for the year ended December 31, 2025 compared to the year ended December 31, 2024. 63 Table of Contents Interest expense on interest-bearing deposits decreased by $641 thousand, or 2.3%, to $27.2 million during the year ended December 31, 2025 from $27.9 million during the year ended December 31, 2024.
Net interest rate spread decreased by two basis points to 3.11% for the year ended December 31, 2024 from 3.13% for the year ended December 31, 2023, reflecting a 30 basis points increase in the average rate paid on interest-bearing liabilities, partially offset by a 28 basis points increase in the average yield on interest-earning assets. Provision for Credit Losses.
Net interest rate spread increased by 42 basis points to 3.53% for the year ended December 31, 2025 from 3.11% for the year ended December 31, 2024, reflecting a 31 basis points decrease in the average rate paid on interest-bearing liabilities, and an 11 basis points increase in the average yield on interest-earning assets. Provision for Credit Losses.
The Company also evaluated available for sale debt securities that are in an unrealized loss position as of December 31, 2024 and determined that the declines in fair value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors. No provision was recorded for the year ended December 31, 2024.
Management believes that the unrealized losses on these securities are a function of changes in market interest rates and credit spreads, not changes in credit quality. 58 Table of Contents The Company also evaluated available for sale debt securities that are in an unrealized loss position as of December 31, 2025 and determined that the declines in fair value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors.
The following table sets forth the maturity of these uninsured certificates of deposit as of December 31, 2024. ​ ​ ​ ​ ​ ​ At December 31, 2024 ​ (In thousands) Maturing period: ​ ​ ​ Three months or less ​ $ 8,106 Over three months through six months ​ 1,253 Over six months through twelve months ​ 1,667 Over twelve months ​ 571 Total ​ $ 11,597 ​ ​ 60 Table of Contents Borrowings Our borrowings consist of both short-term and long-term borrowings and provide us with one of our sources of funding.
The following table sets forth the maturity of these uninsured certificates of deposit as of December 31, 2025. ​ ​ ​ ​ ​ ​ At December 31, 2025 ​ ​ ​ ​ (In thousands) Maturing period: ​ ​ ​ Three months or less ​ $ 678 Over three months through six months ​ 844 Over six months through twelve months ​ 2,535 Over twelve months ​ 6,477 Total ​ $ 10,534 ​ ​ 59 Table of Contents Borrowings Our borrowings consist of both short-term and long-term borrowings and provide us with one of our sources of funding.
Our reciprocal deposits obtained through the CDARS and ICS networks totaled $6.9 million and $92.5 million, respectively, at December 31, 2024.
Our reciprocal deposits obtained through the CDARS and ICS networks totaled $5.8 million and $96.0 million, respectively, at December 31, 2025.
As of December 31, 2024, our assets, loans, deposits and stockholders’ equity totaled $2.5 billion, $1.8 billion, $2.2 billion and $185.5 million, respectively. Key Factors Affecting Our Business Net Interest Income .
As of December 31, 2025, our assets, loans, deposits and stockholders’ equity totaled $2.7 billion, $2.0 billion, $2.3 billion and $284.4 million, respectively. Key Factors Affecting Our Business Net Interest Income .
Although customer deposits remain our preferred source of funds, maintaining back up sources of liquidity is part of our prudent liquidity risk management practices. We have the ability to borrow from the Federal Home Loan Bank of New York. At December 31, 2024, we had $123.5 million in advances and the ability to borrow up to an additional $398.7 million.
Although customer deposits remain our preferred source of funds, maintaining back up sources of liquidity is part of our prudent liquidity risk management practices. We have the ability to borrow from the Federal Home Loan Bank of New York (“FHLBNY”).
Interest income increased $9.5 million, or 8.0%, to $127.2 million for the year ended December 31, 2024 from $117.8 million for the year ended December 31, 2023.
Interest income increased $7.8 million, or 6.1%, to $135.0 million for the year ended December 31, 2025 from $127.2 million for the year ended December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk Not required to provide the information related to this item. ​ ​ 69 Table of Contents ​ REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ Stockholders and Board of Directors of Orange County Bancorp, Inc.
Biggest changeThe Management Loan Committee, consisting of the President and Chief Executive Officer, Chief Financial Officer, Chief Credit Officer, Chief Risk Officer, Chief Loan Officer, EVP-Strategic Lending, and the SVP-Commercial Lending, implements the Board-approved loan policy. ​ ​ ​ ​ ​ ​ 70 Table of Contents ​ REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ Stockholders and Board of Directors of Orange County Bancorp, Inc.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management.
(the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements").
(the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements").
We believe that our audits provide a reasonable basis for our opinion. ​ ​ /s/ Crowe LLP ​ ​ We have served as the Company's auditor since 2018. ​ Livingston, New Jersey March 17, 2025 ​ 70 Table of Contents ​
We believe that our audits provide a reasonable basis for our opinion. ​ ​ /s/ Crowe LLP ​ ​ We have served as the Company's auditor since 2018. ​ Livingston, New Jersey March 16, 2026 ​ 71 Table of Contents ​
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk Management of Market Risk General. The principal objective of our asset and liability management function is to evaluate the interest rate risk within the balance sheet and pursue a controlled assumption of interest rate risk while maximizing net income and preserving adequate levels of liquidity and capital.
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The board of directors of our Bank has oversight of our asset and liability management function, which is managed by our Asset/Liability Management Committee and our Finance Committee. Our Asset/Liability Management Committee meets regularly to review, among other things, the sensitivity of our assets and liabilities to market interest rate changes, local and national market conditions and market interest rates.
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That group also reviews our liquidity, capital, deposit mix, loan mix and investment positions. As a financial institution, our primary component of market risk is interest rate volatility.
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Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the fair value of all interest-earning assets and interest-bearing liabilities, other than those that have a short term to maturity. Interest rate risk is the potential of economic losses due to future interest rate changes.
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These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair values. The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income.
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We manage our exposure to interest rates primarily by structuring our balance sheet in the ordinary course of business. We do not typically enter into derivative contracts for the purpose of managing interest rate risk, but we may do so in the future.
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Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets. Net Interest Income Simulation. We use an interest rate risk simulation model to test the interest rate sensitivity of net interest income and the balance sheet.
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Instantaneous parallel rate shift scenarios are modeled and utilized to evaluate risk and establish exposure limits for acceptable changes in net interest margin.
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These scenarios, known as rate shocks, simulate an instantaneous change in interest rates and use various assumptions, including, but not limited to, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment and replacement of asset and liability cash flows.
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The following table presents the estimated changes in our net interest income, calculated on a bank-only basis, which would result from changes in market interest rates over a twelve month period as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Interest Rates ​ Net Interest Income Change ​ Year 1 Change ​ (basis points) (1) ​ Year 1 Forecast ​ from Level ​ ​ ​ (Dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ +200 ​ $ 4,810 ​ ​ 4.41 % +100 ​ $ 2,606 ​ 2.39 % — ​ $ — ​ ​ — % -100 ​ $ (2,951) ​ (2.71) % -200 ​ $ (5,840) ​ (5.36) % ​ ​ This analysis assumes an instantaneous and parallel rate shock across the entire yield curve for the scenarios indicated.
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Economic Value of Equity Simulation. We also analyze our sensitivity to changes in interest rates through an economic value of equity ("EVE") model. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet contracts.
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EVE attempts to quantify our economic value using a discounted cash flow methodology. We estimate what 69 Table of Contents our EVE would be as of a specific date. We then calculate what EVE would be as of the same date throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve.
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We currently calculate EVE under the assumptions that interest rates increase 100, 200, and 300 basis points from current market rates, and under the assumption that interest rates decrease 100, 200, and 300 basis points from current market rates.
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The following table presents the estimated changes in our EVE, calculated on a bank-only basis, that would result from changes in market interest rates as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2025 ​ ​ ​ ​ ​ Estimated Increase (Decrease) ​ ​ ​ ​ ​ ​ in EVE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated ​ ​ ​ ​ ​ Change in Interest Rates (basis points) ​ ​ ​ EVE ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ (Dollars in thousands) +300 ​ 702,220 ​ 43,052 6.53 % +200 ​ 690,555 ​ 31,387 4.76 % +100 ​ 679,865 ​ 20,697 3.14 % — ​ 659,168 ​ — — % -100 ​ 628,072 ​ (31,096) (4.72) % -200 ​ ​ 585,191 ​ ​ (73,977) ​ (11.22) % -300 ​ ​ 531,536 ​ ​ (127,632) ​ (19.36) % ​ This analysis assumes an instantaneous and parallel rate shock across the entire yield curve for the scenarios indicated.
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Many assumptions are used to calculate the impact of interest rate fluctuations. Actual results may be significantly different than our projections due to several factors, including the timing and frequency of rate changes, market conditions and the shape of the yield curve.
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The computations of interest rate risk shown above do not include actions that our management may undertake to manage the risks in response to anticipated changes in interest rates, and actual results may also differ due to any actions taken in response to the changing rates.
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Credit Risk The Company manages credit risk consistent with state and federal laws governing the making of loans through written policies and procedures; loan review to identify loan problems at the earliest possible time; collection procedures (including subsequent to a loan being charged off); an adequate allowance for credit losses; and continuing education and training to ensure lending expertise.
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Diversification by loan product is maintained through offering commercial loans, one-to-four family mortgages, and a full range of consumer loans. The Company monitors its loan portfolio prudently. The Director’s Loan Committee of the Company’s board of directors is designated to receive required loan reports, oversee loan policy, and approve loans above authorized individual and Management Loan Committee lending limits.

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