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Rhinebeck Bancorp, Inc. Reports Results for the Second Quarter and Six Months Ended June 30, 2019

POUGHKEEPSIE, N.Y., July 26, 2019 /PRNewswire/ -- Rhinebeck Bancorp, Inc., (the "Company") (RBKB), the holding company of Rhinebeck Bank (the "Bank"), reported net income for the three and six months ended June 30, 2019 of $1.2 million ($0.11 per basic and diluted share), $642,000, or 110.9%, more than the comparable prior year period, and $2.1 million ($0.20 per basic and diluted share), which is $937,000, or 78.4%, greater than the same period last year. 

(PRNewsfoto/Rhinebeck Bank)

On January 16, 2019, the Company became the holding company for the Bank when it closed its stock offering in connection with the completion of the reorganization of the Bank and Rhinebeck Bancorp, MHC into a two-tier mutual holding company form of organization.  The Company sold 4,787,315 shares of common stock at a price of $10.00 per share, for net proceeds of $46.0 million, and issued 6,345,975 shares to Rhinebeck Bancorp, MHC.  The consolidated financial results contained herein reflect the consolidated accounts of the Company and the Bank at and for the three and six month periods ended June 30, 2019 and Rhinebeck Bancorp, MHC and the Bank for the same periods ended June 30, 2018 and at December 31, 2018.

Other financial highlights:

  • Total assets grew $30.7 million, or 3.5%, to $913.1 million from the year ended December 31, 2018.
  • Net loans increased a total of $58.9 million, or 8.7%, to $737.3 million from year end 2018.
  • Total deposit balances were $716.9 million at June 30, 2019, increasing $32.4 million, or 4.5%, during the six months then ended.
  • Return on average assets was 0.54% for the three month period compared to 0.30% for the corresponding period of 2018. Return on average assets was 0.49% for the six month period compared to 0.32% for the comparable prior year period.
  • Return on average equity was 4.71% for the second quarter compared to 4.23% for the same period of 2018. Return on average equity was 4.34% for the six month period compared to 4.41% for 2018.

Michael J. Quinn, President and Chief Executive Officer, said: "We are pleased with the success of our strategy undertaken to expand our portfolio of indirect automobile loans and the positive overall impacts on both assets and income.  Efforts to expand our market presence improve and expand our technology platform and offerings, manage our interest rate risks, improve loan quality, and control our loan delinquencies continued during the quarter."

Income Statement Analysis

Compared to the second quarter of 2018, net interest income increased $1.2 million, or 17.1%, to $7.9 million. Our net interest margin decreased from 3.80% to 3.75%, while the ratio of average interest-earning assets to average interest-bearing liabilities improved 4.9% to 136.5%. Year to date net interest income increased $2.3 million, or 17.7%, over 2018, to $15.5 million.  Overall there was a 1 basis point decline in net interest margin to 3.77%, when comparing the six month periods, while the ratio of average interest-earning assets to average interest-bearing liabilities improved 5.3% to 137.7%.  In both comparable periods, interest income increases were mostly driven by increasing originations of higher yielding indirect automobile loans accompanied by additional production of commercial real estate loans.

Non-interest income totaled $1.4 million for the three months; an increase of $549,000, or 62.2%, compared to $883,000 in the prior year.  A new deposit fee schedule and retail operating improvements, increased sales of residential mortgage loans, and significant growth in investment advisory income at our Rhinebeck Asset Management ("RAM") division were primary drivers of this outcome. For the six months ended June 30, 2019, non-interest income totaled $2.7 million, an increase of $565,000, or 26.5%.  An other real estate owned ("OREO") write-down that occurred in the first quarter of 2018, for $387,000, improved both periods' 2019 comparative performances.

For the second quarter, non-interest expenses increased $649,000 to $7.0 million, over the comparable 2018 period. Salaries and employee benefits increased $530,000, or 15.4%, attributable to annual salary merit increases, production incentives, employee benefit increases and additions to staff.  The growth of other general operating expenses was mainly due to increases in overall processing volumes, the additions of new technologies and equipment, and additional costs related to our new status as a public company.  For the six months ended, non-interest expenses increased $1.2 million to $14.0 million, or 9.4%, as compared to the first half of last year.  Year to date salaries and employee benefits increased $1.1 million, or 15.2%.  Both comparative periods were positively impacted by a large reduction in our FDIC assessment, decreased OREO expense (as we spent additional funds to prepare a foreclosure property for sale in 2018), and an impairment loss on goodwill in the amount of $95,000 relating to RAM that was recognized in the first quarter of 2018.

We recorded $780,000 in provision for loan losses for the second quarter and $1.6 million for the first six months as compared to $525,000 and $1.1 million, respectively, for the comparable prior year periods.  Net charge-offs for the quarter ended totaled $105,000, and year to date totaled $348,000, compared to $206,000 and $568,000, for the respective periods in 2018. 

Balance Sheet Analysis

Total assets were $913.1 million at June 30, 2019, representing an increase of $30.7 million, or 3.5%, from December 31, 2018. Net loans increased $58.9 million, or 8.7%, including an increase of $41.2 million in indirect automobile loan balances due to production of $108.4 million of those loans since year end. During the first six months of this year commercial real estate balances improved by $16.1 million or 7.2%. The available for sale securities balance increased $10.1 million mostly due to $18.0 million in purchases.  Cash and due from banks decreased $38.6 million during the period primarily as a result of a return of $41.1 million in unfulfilled offering subscriptions.

Overdue loans decreased $878,000, or 9.9%, between year end and June 30, 2019 finishing at 1.1% of total loans, or $8.0 million.  During the same timeframe non-performing assets rose $371,000 or 5.0%, to $7.7 million. Our reserve as a percentage of total gross loans was 1.1% at June 30, 2018.

Total liabilities decreased $15.6 million, or 1.9%, to $807.5 million mainly due to the release of $88.9 million in gross subscription offering proceeds and a $5.0 million line of credit pay-down, offset by an increase of $32.9 million in Federal Home Loan Bank advances and a $32.4 million, or 4.5%, increase in deposits.

Stockholders' equity increased $46.3 million to $105.6 million, primarily due to proceeds from the common stock offering of $46.0 million. At June 30, 2019, the Company's ratio of stockholders' equity-to-total assets was 11.6%, compared to 6.7% at December 31, 2018.

About Rhinebeck Bancorp

Rhinebeck Bancorp, Inc. is a Maryland corporation organized as the mid-tier holding company of Rhinebeck Bank and is itself the majority-owned subsidiary of Rhinebeck Bancorp, MHC.  The Bank is a New York chartered stock savings bank which provides a full range of banking and financial services to consumer and commercial customers through its eleven branches and two representative offices located in Dutchess, Ulster, Orange, and Albany counties in New York State.  Financial services including comprehensive brokerage, investment advisory services, financial product sales and employee benefits are offered through Rhinebeck Asset Management, a division of the Bank.

Forward Looking Statements

This press release contains certain forward-looking statements about the Company and the Bank.  Forward-looking statements include statements regarding anticipated future events or results and can be identified by the fact that they do not relate strictly to historical or current facts.  They often include words such as "believe", "expect", "anticipate", "estimate",  "intend", "predict", "forecast", "improve", "continue", "will", "would", "should", "could", or "may".  Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.  Rhinebeck Bancorp, Inc. undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

The Company's summary consolidated statements of income and financial condition and other data follow:

 

Rhinebeck Bancorp, Inc and Subsidiary






Consolidated Statements of Income                                                  






(dollars in thousands except per share data)








 Three Months Ended June 30, 


 Six Months Ended June 30, 




2019


2018


2019


2018




(unaudited)


(unaudited)


Interest and Dividend Income










Interest and fees on loans


$         9,401


$         7,393


$       18,116


$        14,143


Interest and dividends on securities


713


585


1,321


1,184


Other income


7


4


41


9


Total interest and dividend income


10,121


7,982


19,478


15,336


Interest Expense










Interest expense on deposits


1,641


986


3,023


1,815


Interest expense on borrowings 


558


229


964


362


Total interest expense


2,199


1,215


3,987


2,177


Net interest income


7,922


6,767


15,491


13,159


Provision for loan losses 


780


525


1,560


1,050


Net interest income after provision 










for loan losses


7,142


6,242


13,931


12,109












Noninterest Income










Service charges on deposit accounts


714


651


1,412


1,245


Net realized loss on sales and calls of securities

(40)


-


(40)


(1)


Net gain on sales of loans 


152


121


208


268


Increase in cash surrender value of life insurance 

99


100


199


199


Write-downs of other real estate owned


-


(387)


-


(387)


Other real estate owned income


-


10


11


21


Investment advisory income


329


183


542


332


Other


178


205


365


455


Total noninterest income


1,432


883


2,697


2,132












Noninterest Expense










Salaries and employee benefits 


3,964


3,434


7,971


6,919


Occupancy 


898


852


1,793


1,754


Data processing


343


293


650


568


Professional fees


355


224


626


418


Advertising


147


204


302


384


FDIC deposit insurance and other insurance


142


204


288


379


Other real estate owned expense


(1)


25


38


83


Amortization of intangible assets


10


11


21


21


Impairment loss on goodwill


-


95


-


95


Other


1,190


1,057


2,277


2,146


Total noninterest expense


7,048


6,399


13,966


12,767


Income before income taxes


1,526


726


2,662


1,474


Provision for income taxes


305


147


530


279












Net income


$         1,221


$            579


$         2,132


$          1,195








Earnings per common share:










Basic


$           0.11


$                 -


$           0.20


$                 -


Diluted


$           0.11


$                 -


$           0.20


$                 -












Weighted average shares outstanding 


10,705,047


-


10,702,320


-












 

Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statement of Financial Condition                                                           

(dollars in thousands except per share data)








June 30,


December 31,



2019


2018

Assets


(unaudited)



Cash and due from banks 


$   11,969


$          50,590

Available for sale securities (at fair value) 


111,398


101,312

Loans receivable (net of allowance for loan losses of $7,858 and $6,646,





 respectively)


737,293


678,402

Federal Home Loan Bank stock 


3,355


1,883

Accrued interest receivable


2,874


2,523

Cash surrender value of life insurance 


18,218


18,018

Deferred tax assets (net of valuation allowance of $1,190 and $1,085,





  respectively)


2,488


2,934

Premises and equipment, net 


16,846


17,040

Other real estate owned


1,578


1,685

Goodwill


1,410


1,410

Intangible assets, net


262


284

Other assets


5,393


6,342






Total assets


$ 913,084


$        882,423

Liabilities and Stockholders' Equity





Liabilities





Deposits 





Noninterest bearing


$ 152,705


$        171,829

Interest bearing


564,153


512,589

Total deposits


716,858


684,418






Mortgagors' escrow accounts


10,400


7,725

Advances from the Federal Home Loan Bank 


64,541


31,598

Subordinated debt 


5,155


5,155

Other borrowings


-


5,000

Subscription offering proceeds


-


79,142

Accrued expenses and other liabilities 


10,573


10,108

Total liabilities


807,527


823,146






Stockholders' Equity 





Preferred stock (par value $0.01 per share; 5,000,000 authorized, 0 issued)


-


-

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


111


-

Additional paid-in capital


45,844


100

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


(4,364)


-

Retained earnings


68,321


66,189

Accumulated other comprehensive loss:





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


(12)


(2,576)

Defined benefit pension plan, net of taxes 


(4,343)


(4,436)

Total accumulated other comprehensive loss


(4,355)


(7,012)

Total stockholders' equity


105,557


59,277






Total liabilities and stockholders' equity


$ 913,084


$        882,423

 

Rhinebeck Bancorp, Inc and Subsidiary







Selected Ratios




















Three Months ended June 30,


Six Months ended June 30, 


Years ended




2019

2018


2019

2018


2018

2017


Performance Ratios(1):


(unaudited)

(unaudited)
















Return on average assets (2) 


0.54%

0.30%


0.49%

0.32%


0.55%

0.41%


Return on average equity(3) 


4.71%

4.23%


4.34%

4.41%


7.82%

5.45%


Net interest margin (4) 


3.75%

3.80%


3.77%

3.78%


3.87%

3.68%


Efficiency ratio(5) 


75.35%

83.65%


76.79%

83.49%


77.76%

77.02%


Average interest-earning assets to











    average interest-bearing liabilities 


136.49%

130.17%


137.65%

130.69%


132.42%

131.69%


Loans to deposits 


102.65%

93.17%


102.65%

93.17%


98.92%

87.12%


Equity to assets(6) 


11.54%

7.14%


11.24%

7.23%


7.07%

7.60%













Asset Quality Ratios:











Allowance for loan losses as a percent











   of total loans 





1.07%

0.96%


0.98%

0.96%


Allowance for loan losses as a percent











   of non-performing loans 





127.77%

59.51%


117.17%

58.28%


Net charge-offs to average outstanding











   loans during the period 





0.05%

0.10%


0.15%

0.24%


Non-performing loans as a percent











   of total loans 





0.84%

1.61%


0.84%

1.65%


Non-performing assets as a percent











   of total assets 





0.85%

1.49%


0.83%

1.56%













Capital Ratios(7):











Tier 1 capital (to average total assets) 





11.04%

8.33%


8.80%

8.57%


Tier 1 capital (to risk-weighted assets) 





12.62%

9.62%


10.16%

10.54%


Total capital (to risk-weighted assets) 





13.62%

10.50%


11.07%

11.45%


Common equity Tier 1 capital (to risk-weighted assets) 



12.62%

9.62%


10.16%

10.54%














(1) Performance ratios for the three and six months ended June 30, 2019 and 2018 are annualized.








(2) Represents net income divided by average total assets.










(3) Represents net income divided by average equity.










(4) Represents net interest income as a percent of average interest-earning assets.








(5) Represents non-interest expense divided by the sum of net interest income and non-interest income.








(6) Represents average equity divided by average total assets.









(7) Captial ratios are for Rhinebeck Bank only. Rhinebeck Bancorp, Inc. is not subject to the minimun consiolidated capital requirements as a small bank
holding company with assets less than $3.0 billion.













CONTACT: Michael J. Quinn, President and Chief Executive Officer
TELEPHONE: (845) 790-1501

 

Cision

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