Rhinebeck Bancorp (RBKB) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $975,000 ($0.09 per diluted share), down 31.9% year-over-year; six-month net income was $2.1 million ($0.19 per diluted share), down 6.0%.

• Decline in net income was driven by higher provision for credit losses and lower net interest income, partially offset by higher non-interest income and lower non-interest expense.

• Total assets decreased 2.8% to $1.28 billion at June 30, 2024, due to declines in loans and securities, partially offset by higher cash balances.

• Strategic reduction in indirect automobile loans and a branch sale contributed to asset and expense changes.

• Tangible book value per share rose to $10.27, up 8.5% from June 30, 2023.

Financial highlights

• Net interest income for Q2 2024 decreased 1.8% year-over-year to $9.1 million; for six months, down 5.9% to $18.0 million.

• Interest and dividend income rose 5.6% in Q2 and 6.3% for six months, but interest expense increased 17.7% and 28.9%, respectively.

• Provision for credit losses rose sharply in Q2 to $447,000 from a credit of $452,000 last year; six-month provision decreased 5.7% to $530,000.

• Non-interest income increased 11.5% in Q2 and 10.5% for six months, mainly from investment advisory fees.

• Non-interest expense declined 3.7% in Q2 and 3.6% for six months, reflecting workforce reductions and lower professional fees.

Outlook and guidance

• Management continues to focus on managing interest rate risk, liquidity, pricing, and expense control.

• The company expects continued pressure on net interest margin due to deposit mix shifts and rate environment.

• Strategic reduction in indirect automobile lending and ongoing efforts to optimize asset and liability mix.