POUGHKEEPSIE, N.Y.,
Feb. 7, 2020 /PRNewswire/
-- Rhinebeck Bancorp, Inc., (the "Company") (NASDAQ: RBKB),
the holding company of Rhinebeck
Bank (the "Bank"), reported net income for the three months
ended December 31, 2019 of
$1.7 million ($0.16 per basic and diluted common share),
$542,000, or 45.2%, more than the
$1.2 million reported for the
comparable prior year period, and $6.0
million ($0.56 per basic and
diluted common share) for the year-ended December 31, 2019, which was $1.6 million, or 36.9%, greater than the
$4.4 million for last year.
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 twelve month periods
ended December 31, 2019 and Rhinebeck
Bancorp, MHC and the Bank at and for the same periods ended
December 31, 2018.
Other financial highlights:
- Total assets grew $91.5 million,
or 10.4%, to $973.9 million at
December 31, 2019 from December 31, 2018.
- Net loans increased a total of $115.1
million, or 17.0%, to $793.5
million at December 31, 2019
from year-end 2018.
- Total deposit balances were $773.3
million at December 31, 2019,
increasing $88.9 million, or 13.0%,
from December 31, 2018.
- Return on average assets was 0.72% for the fourth quarter ended
December 31, 2019 compared to 0.56%
for the corresponding period of 2018. Return on average assets was
0.65% for the year-ended December 31,
2019 compared to 0.55% for 2018.
- Return on average equity was 6.32% for the fourth quarter of
2019 compared to 8.31% for the same period of 2018. Return on
average equity was 5.73% for the year-ended December 31, 2019 compared to 7.82% for
2018.
- Our efficiency ratio improved 3.8%, falling to 72.98% for the
fourth quarter of 2019 from 75.84% in the same quarter of 2018.
Year over year the ratio improved 5.2% falling to 73.73% for
2019.
Michael J. Quinn, President and
Chief Executive Officer, said: "In a year that presented a much
different interest rate environment than initially expected, we
made substantial progress in meeting our growth goals for the Bank
while improving our profitability and efficiency. Our loan
growth, deposit growth, and improvement in profitability are the
result of great efforts by our staff to execute our strategic
plan."
Income Statement Analysis
Net interest income increased $771,000, or 10.3%, to $8.3 million for the quarter ended December 31, 2019, from $7.5 million for the quarter ended December 31, 2018. Our full year net interest
income increased $3.8 million, or
13.5%, over 2018, to $32.2 million.
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. This additional revenue was offset by increases
in deposit pricing and borrowing costs that were primarily driven
by competitive market forces and the changing interest rate
environment.
Our net interest margin declined 15 basis points to 3.65%
compared to the prior year quarter and declined 11 basis points to
3.76% compared to the prior year.
We recorded a provision for loan losses of $450,000 for the fourth quarter 2019 and
$2.5 million for the 2019 year as
compared to $525,000 and $2.1 million, respectively, for the comparable
prior year periods. Net charge-offs for the quarter
ended December 31, 2019 totaled $2.4
million, and for the year totaled $3.2 million, compared to $189,000 and $911,000, for the respective periods in 2018. Two
larger commercial real estate loans became impaired and were
partially charged off in the fourth quarter of 2019.
Non-interest income totaled $1.5
million for the three months ended December 31, 2019; a decrease of $77,000, or 5.0%, from the comparable period in
the prior year. Both service charges on deposit accounts and
investment advisory income decreased quarter over quarter but
increased year over year. Non-interest income totaled $5.6 million for 2019, an increase of
$449,000, or 8.7% from 2018. A
new deposit fee schedule, retail operating improvements and growth
in investment advisory income at our Rhinebeck Asset Management
("RAM") division were primary drivers of this outcome. An other
real estate owned write-down that occurred in the first quarter of
2018, of $387,000, also improved the
2019 comparative performance.
For the fourth quarter of 2019, non-interest expenses increased
$247,000 to $7.1 million, or 3.6%, over the comparable 2018
period. Salaries and employee benefits increased $97,000, or 2.5%, attributable to annual salary
merit increases, production incentives, employee benefit increases
and additions to staff. The growth of other non-interest
expense 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
year-ended December 31, 2019,
non-interest expenses increased $1.8
million, or 6.9% to $27.9
million, as compared to December
31, 2018. Year over year, salaries and employee
benefits increased $1.5 million, or
10.4%. In 2019, both comparative periods were positively
impacted by a large reduction in our FDIC assessment. Non-recurring
expenses in 2018 for additional funds to prepare a foreclosure
property for sale and an impairment loss of $95,000 related to RAM goodwill helped improve
comparative results in 2019.
Balance Sheet Analysis
Total assets were $973.9 million
at December 31, 2019, representing an
increase of $91.5 million, or 10.4%,
from $882.4 million at December 31, 2018. Cash and due from banks
decreased $38.6 million during the
year primarily as a result of a return of $41.1 million in unfulfilled stock offering
subscriptions in January 2019. The
available for sale securities balance increased $13.5 million mostly due to $38.7 million in mortgage-backed securities
purchases, $2.3 million in bank
subordinated debt purchases, and a $3.0
million reduction in the portfolio's unrealized loss during
the 2019 period, partially offset by sales and calls of
$12.0 million and principal payments
and maturities of $18.3 million. Net
loans increased $115.1 million, or
17.0%, including an increase of $65.2
million in indirect automobile loan balances due to
production of $202.3 million of those
loans during 2019. Commercial real estate balances increased by
$45.5 million or 20.4% in 2019.
Past due loans increased $5.2
million, or 41.7%, between December
31, 2018 and December 31, 2019
finishing at 2.2% of total loans, or $17.6
million, increasing from 1.8% at year-end 2018. During
the same timeframe, non-performing assets rose $3.0 million or 40.5%, to $10.3 million. Our reserve as a percentage of
total gross loans was 0.75% at December 31,
2019 as compared to 0.98% at December
31, 2018, primarily due to prior year favorable loss
experience.
Premises and equipment increases reflect the recent purchase of
the building which houses our branch in Goshen, New York for $1.8 million.
During 2019, total liabilities increased $40.9 million, or 5.0%, to $864.1 million mainly due to an $88.9 million, or 13.0%, increase in deposits,
primarily certificates of deposit, and an increase of $34.7 million in Federal Home Loan Bank advances,
offset by a $5.0 million line of
credit pay-down and the release of $88.9
million in gross subscription offering proceeds in
January 2019.
Stockholders' equity increased $50.6
million to $109.9 million at
December 31, 2019, primarily due to
the net proceeds from the common stock offering of $46.0 million. At December
31, 2019, the Company's ratio of stockholders'
equity-to-total assets was 11.3%, 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. Accordingly, you
should not place undue reliance on forward-looking statements.
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 selected financial data follow:
Rhinebeck
Bancorp, Inc. and Subsidiary Consolidated Statements of
Comprehensive Income
(Dollars in thousands, except share and per share data)
|
|
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Three Months Ended
December 31,
|
|
Years Ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
(unaudited)
|
Interest and
Dividend Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
9,979
|
|
$
|
8,601
|
|
$
|
38,255
|
|
$
|
31,314
|
Interest and dividends
on securities
|
|
|
695
|
|
|
593
|
|
|
2,671
|
|
|
2,355
|
Other income
|
|
|
9
|
|
|
47
|
|
|
60
|
|
|
61
|
Total interest and
dividend income
|
|
|
10,683
|
|
|
9,241
|
|
|
40,986
|
|
|
33,730
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on
deposits
|
|
|
2,009
|
|
|
1,276
|
|
|
6,989
|
|
|
4,203
|
Interest expense on
borrowings
|
|
|
382
|
|
|
444
|
|
|
1,750
|
|
|
1,117
|
Total interest
expense
|
|
|
2,391
|
|
|
1,720
|
|
|
8,739
|
|
|
5,320
|
Net interest
income
|
|
|
8,292
|
|
|
7,521
|
|
|
32,247
|
|
|
28,410
|
Provision for loan
losses
|
|
|
450
|
|
|
525
|
|
|
2,460
|
|
|
2,100
|
Net interest income
after provision for loan losses
|
|
|
7,842
|
|
|
6,996
|
|
|
29,787
|
|
|
26,310
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
|
|
683
|
|
|
776
|
|
|
2,824
|
|
|
2,806
|
Net realized loss on
sales and calls of securities
|
|
|
(29)
|
|
|
—
|
|
|
(69)
|
|
|
(22)
|
Net gain on sales of
loans
|
|
|
252
|
|
|
186
|
|
|
619
|
|
|
621
|
Increase in cash
surrender value of life insurance
|
|
|
98
|
|
|
101
|
|
|
398
|
|
|
401
|
Write-downs of other
real estate owned
|
|
|
—
|
|
|
—
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|
|
—
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|
|
(387)
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Other real estate owned
income
|
|
|
9
|
|
|
10
|
|
|
28
|
|
|
42
|
Gain on disposal of
premises and equipment
|
|
|
—
|
|
|
16
|
|
|
—
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|
|
16
|
Investment advisory
income
|
|
|
177
|
|
|
252
|
|
|
944
|
|
|
809
|
Other
|
|
|
284
|
|
|
210
|
|
|
886
|
|
|
895
|
Total noninterest
income
|
|
|
1,474
|
|
|
1,551
|
|
|
5,630
|
|
|
5,181
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
|
3,961
|
|
|
3,864
|
|
|
15,876
|
|
|
14,384
|
Occupancy
|
|
|
859
|
|
|
833
|
|
|
3,490
|
|
|
3,405
|
Data
processing
|
|
|
337
|
|
|
311
|
|
|
1,340
|
|
|
1,162
|
Professional
fees
|
|
|
399
|
|
|
298
|
|
|
1,386
|
|
|
933
|
Marketing
|
|
|
198
|
|
|
192
|
|
|
666
|
|
|
724
|
FDIC deposit insurance
and other insurance
|
|
|
161
|
|
|
237
|
|
|
478
|
|
|
845
|
Other real estate owned
expense
|
|
|
12
|
|
|
2
|
|
|
123
|
|
|
186
|
Amortization of
intangible assets
|
|
|
10
|
|
|
10
|
|
|
42
|
|
|
42
|
Impairment loss on
goodwill
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
Other
|
|
|
1,190
|
|
|
1,133
|
|
|
4,524
|
|
|
4,344
|
Total noninterest
expense
|
|
|
7,127
|
|
|
6,880
|
|
|
27,925
|
|
|
26,120
|
Income before income
taxes
|
|
|
2,189
|
|
|
1,667
|
|
|
7,492
|
|
|
5,371
|
Provision for
income taxes
|
|
|
449
|
|
|
469
|
|
|
1,529
|
|
|
1,014
|
Net income
|
|
$
|
1,740
|
|
$
|
1,198
|
|
$
|
5,963
|
|
$
|
4,357
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Earnings per common
share:
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Basic
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|
$
|
0.16
|
|
$
|
—
|
|
$
|
0.56
|
|
$
|
—
|
Diluted
|
|
$
|
0.16
|
|
$
|
—
|
|
$
|
0.56
|
|
$
|
—
|
|
|
|
|
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Weighted average
shares outstanding, basic
|
|
|
10,715,956
|
|
|
—
|
|
|
10,707,776
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|
|
—
|
Weighted average
shares outstanding, diluted
|
|
|
10,715,956
|
|
|
—
|
|
|
10,707,776
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|
|
—
|
Rhinebeck
Bancorp, Inc. and Subsidiary Consolidated Statements of
Financial Condition
(Dollars in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
2019
|
|
2018
|
|
|
(unaudited)
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
11,978
|
|
$
|
50,590
|
Available for sale
securities (at fair value)
|
|
|
114,832
|
|
|
101,312
|
Loans receivable (net
of allowance for loan losses of $5,954 and $6,646,
respectively)
|
|
|
793,471
|
|
|
678,402
|
Federal Home Loan
Bank stock
|
|
|
3,435
|
|
|
1,883
|
Accrued interest
receivable
|
|
|
2,903
|
|
|
2,523
|
Cash surrender value
of life insurance
|
|
|
18,457
|
|
|
18,018
|
Deferred tax assets
(net of valuation allowance of $1,202 and $1,085,
respectively)
|
|
|
2,255
|
|
|
2,934
|
Premises and
equipment, net
|
|
|
18,338
|
|
|
17,040
|
Other real estate
owned
|
|
|
1,417
|
|
|
1,685
|
Goodwill
|
|
|
1,410
|
|
|
1,410
|
Intangible assets,
net
|
|
|
241
|
|
|
284
|
Other
assets
|
|
|
5,209
|
|
|
6,342
|
Total
assets
|
|
$
|
973,946
|
|
$
|
882,423
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
Noninterest
bearing
|
|
$
|
179,236
|
|
$
|
171,829
|
Interest
bearing
|
|
|
594,107
|
|
|
512,589
|
Total
deposits
|
|
|
773,343
|
|
|
684,418
|
|
|
|
|
|
|
|
Mortgagors' escrow
accounts
|
|
|
8,106
|
|
|
7,725
|
Advances from the
Federal Home Loan Bank
|
|
|
66,304
|
|
|
31,598
|
Subordinated
debt
|
|
|
5,155
|
|
|
5,155
|
Other
borrowings
|
|
|
—
|
|
|
5,000
|
Subscription offering
proceeds
|
|
|
—
|
|
|
79,142
|
Accrued expenses and
other liabilities
|
|
|
11,156
|
|
|
10,108
|
Total
liabilities
|
|
|
864,064
|
|
|
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
|
|
|
45,869
|
|
|
100
|
Unallocated common
stock held by the employee stock ownership plan
|
|
|
(4,146)
|
|
|
—
|
Retained
earnings
|
|
|
72,152
|
|
|
66,189
|
Accumulated other
comprehensive loss:
|
|
|
|
|
|
|
Net unrealized loss on
available for sale securities, net of taxes
|
|
|
(195)
|
|
|
(2,576)
|
Defined benefit pension
plan, net of taxes
|
|
|
(3,909)
|
|
|
(4,436)
|
Total accumulated
other comprehensive loss
|
|
|
(4,104)
|
|
|
(7,012)
|
Total stockholders'
equity
|
|
|
109,882
|
|
|
59,277
|
Total liabilities and
stockholders' equity
|
|
$
|
973,946
|
|
$
|
882,423
|
Rhinebeck
Bancorp, Inc. and Subsidiary Selected Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended
|
|
Year
ended
|
|
|
|
December
30,
|
|
December
30,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Performance
Ratios (1):
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (2)
|
|
0.72
|
%
|
0.56
|
%
|
0.65
|
%
|
0.55
|
%
|
Return on average
equity (3)
|
|
6.32
|
%
|
8.31
|
%
|
5.73
|
%
|
7.82
|
%
|
Net interest margin
(4)
|
|
3.65
|
%
|
3.80
|
%
|
3.76
|
%
|
3.87
|
%
|
Efficiency ratio
(5)
|
|
72.98
|
%
|
75.84
|
%
|
73.73
|
%
|
77.76
|
%
|
Average
interest-earning assets to average interest-bearing
liabilities
|
|
137.49
|
%
|
134.92
|
%
|
137.50
|
%
|
132.42
|
%
|
Total gross loans to
total deposits
|
|
102.09
|
%
|
98.92
|
%
|
102.09
|
%
|
98.92
|
%
|
Average equity to
average assets (6)
|
|
11.43
|
%
|
6.80
|
%
|
11.42
|
%
|
7.07
|
%
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses as a percent of total gross loans
|
|
|
|
|
|
0.75
|
%
|
0.98
|
%
|
Allowance for loan
losses as a percent of non-performing loans
|
|
|
|
|
|
66.74
|
%
|
117.17
|
%
|
Net charge-offs to
average outstanding loans during the period
|
|
|
|
|
|
0.43
|
%
|
0.15
|
%
|
Non-performing loans
as a percent of total gross loans
|
|
|
|
|
|
1.13
|
%
|
0.84
|
%
|
Non-performing assets
as a percent of total assets
|
|
|
|
|
|
1.06
|
%
|
0.83
|
%
|
|
|
|
|
|
|
|
|
|
|
Capital
Ratios (7):
|
|
|
|
|
|
|
|
|
|
Tier 1 capital (to
risk-weighted assets)
|
|
|
|
|
|
12.13
|
%
|
10.16
|
%
|
Total capital (to
risk-weighted assets)
|
|
|
|
|
|
12.83
|
%
|
11.07
|
%
|
Common equity Tier 1
capital (to risk-weighted assets)
|
|
|
|
|
|
12.13
|
%
|
10.16
|
%
|
Tier 1 leverage ratio
(to average total assets)
|
|
|
|
|
|
10.84
|
%
|
8.80
|
%
|
|
|
(1)
|
Performance ratios
for the three months ended December 31, 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 (Non-GAAP measure).
|
(6)
|
Represents average
equity divided by average total assets.
|
(7)
|
Capital ratios are
for Rhinebeck Bank only. Rhinebeck Bancorp, Inc. is not subject to
the minimum consolidated capital requirements as a small bank
holding company with assets less than $3.0 billion.
|
CONTACT: Michael J. Quinn, President and Chief Executive
Officer
TELEPHONE: (845) 790-1501
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SOURCE Rhinebeck Bancorp, Inc.