Business Context and Reporting Period
Rhinebeck Bancorp, Inc. (NASDAQ: RBKB) is a Maryland corporation and the holding company for Rhinebeck Bank, a New York-chartered stock savings bank. The Company operates as a community bank serving Dutchess, Orange, Ulster, and Albany Counties in the Hudson Valley region of New York. This summary covers the fiscal year ended December 31, 2025.
Key operational developments include the appointment of Matthew J. Smith as President and CEO in October 2025 and the adoption of a "second-step conversion" plan on February 10, 2026, to convert the mutual holding company structure to a fully public stock holding company structure.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Assets | $1.30 billion | $1.26 billion |
| Total Deposits | $1.10 billion | $1.02 billion |
| Net Loans (Gross) | $958.2 million | $974.9 million |
| Net Interest Income | $46.4 million | $37.7 million |
| Net Income (Loss) | $10.0 million | $(8.6) million |
| Diluted EPS | $0.92 | $(0.80) |
| Return on Average Assets | 0.78% | (0.67)% |
| Return on Average Equity | 7.77% | (7.31)% |
| Net Interest Margin | 3.89% | 3.17% |
| Efficiency Ratio | 73.12% | 82.34% |
| Allowance for Credit Losses | $8.4 million | $8.5 million |
| Non-Performing Assets | $3.7 million (0.28% of assets) | $4.1 million (0.33% of assets) |
Material Changes vs. Prior Period
- Profitability Turnaround: The Company returned to profitability with $10.0 million in net income, reversing an $8.6 million loss in 2024. The 2024 loss was significantly impacted by a $16.0 million realized loss on the sale of securities during a balance sheet restructuring.
- Net Interest Income Growth: Net interest income increased 23.1% to $46.4 million, driven by higher yields on interest-earning assets (up 46 basis points to 5.77%) and lower costs on interest-bearing liabilities (down 33 basis points to 2.54%).
- Loan Portfolio Shift: Total loans decreased 1.9% to $958.2 million. This was primarily due to a strategic reduction in the indirect automobile loan portfolio, which decreased $81.9 million (27.7%). This reduction was offset by growth in commercial real estate loans ($52.1 million increase) and residential real estate loans ($13.4 million increase).
- Deposit Growth: Total deposits increased 7.5% to $1.10 billion, driven by growth in money market accounts and certificates of deposit as customers sought higher interest rates.
- Asset Quality Improvement: Non-performing loans decreased to $3.7 million (0.39% of total loans) from $4.1 million in 2024. Net charge-offs declined 19.3% to $1.9 million.
Guidance, Outlook, and Risks
Management Commentary and Strategy: Management is focused on organic growth, emphasizing relationship-based commercial lending and expanding low-cost core deposits. The Company is investing in technology to improve efficiency and customer experience. In Q4 2025, the Company discontinued direct origination of residential mortgage loans, entering a correspondent lending relationship with a third-party non-bank lender to purchase and service loans instead.
Key Risks and Contingencies:
- Commercial Real Estate Concentration: Commercial real estate and commercial business loans comprise 65.4% of the loan portfolio. These loans carry higher risk due to dependency on property cash flows and sensitivity to local economic conditions.
- Interest Rate Risk: The Company is asset-sensitive; rising rates generally benefit net interest income, but the fair value of the investment securities portfolio is negatively impacted by rate increases. As of year-end, the Company recorded an accumulated other comprehensive loss of $6.3 million related to securities.
- Second-Step Conversion: The proposed conversion to a fully public stock holding company requires regulatory and depositor approval. Uncertainty regarding the timing and terms of this transaction exists.
- Cybersecurity: The Company faces ongoing risks related to cyberattacks and data breaches, which could result in financial loss and reputational damage.
Investor Verification Checklist
- Second-Step Conversion Status: Verify the progress of the regulatory approvals (NYSDFS and Federal Reserve Board) and the outcome of the depositor/stockholder vote for the conversion plan adopted in February 2026.
- Commercial Real Estate Exposure: Review the specific composition of the $534.7 million commercial real estate portfolio, particularly the $261.6 million in non-owner-occupied loans, to assess sensitivity to local economic downturns.
- Automobile Loan Strategy: Confirm the continued execution of the strategy to reduce the indirect automobile loan portfolio and the impact on overall yield and credit quality.
- Dividend Policy: Note that the Company currently does not anticipate paying dividends due to Federal Reserve Board restrictions on mutual holding companies waiving dividends, pending the completion of the second-step conversion.
- Capital Ratios: Verify that the Bank remains "well capitalized" under regulatory frameworks, with a Total Capital ratio of 14.40% and Tier 1 Leverage ratio of 10.62% as of year-end 2025.