Orange County Bancorp, Inc 8-K, filed Aug 1, 2022
Orange County Bancorp, Inc. (OBT)
8-K
2022-08-01
For: 2022-08-01
View Original
Added on
April 10, 2026
About this 8-K
Orange County Bancorp, Inc filed this 8-K on August 1, 2022.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 1, 2022
(Exact Name of Registrant as Specified in Charter)
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(State or Other Jurisdiction)
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(Commission File No.)
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(I.R.S. Employer
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of Incorporation)
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Identification No.)
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant's telephone number, including area code: (845 ) 341-5000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or
Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On August 1, 2022, Orange County Bancorp, Inc. (the “Company”) issued a press release reporting its financial results at and for the three
and six months ended June 30, 2022.
A copy of the press release is attached as Exhibit 99.1 to this report and is being furnished to the Securities and Exchange Commission and
shall not be deemed filed for any purpose.
Item 9.01 Financial Statements and Exhibits
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(a)
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Financial statements of businesses acquired. None.
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(b)
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Pro forma financial information. None.
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(c)
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Shell company transactions: None.
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(d)
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Exhibits.
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104
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Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized.
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ORANGE COUNTY BANCORP, INC.
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DATE: August 1, 2022
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By:
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/s/ Michael Lesler |
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Michael Lesler
Senior Vice President, Chief Accounting Officer and Controller
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Orange County Bancorp, Inc. Announces Second Quarter Results:
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•
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Total Assets increased $250 million, or 11.7%, to $2.4 billion at June 30, 2022 from $2.1 billion at December 31, 2021
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•
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Total Loans grew $180 million, or 13.9%, to $1.5 billion at June 30, 2022 from $1.3 billion at December 31, 2021
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•
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Total Deposits reached $2.2 billion at June 30, 2022, as compared to $1.9 billion at December 31, 2021, representing an increase of $289 million, or
15.1%
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•
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Net Income for Q2 2022 was $2.1 million, a decrease of $3.1 million, or 59.4%, from net income of $5.2 million for Q2 2021, due to an increase in
the provision for loan losses
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•
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Provision for Loan Losses of $5.5 million for Q2 2022 increased from $809 thousand in Q2 2021 due to two impaired loan relationships within the
syndicated loan segment and growth in the loan portfolio
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Annualized return on average assets of 0.65% for the six months ended June 30, 2022 declined 0.44% versus the same period in 2021
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Annualized return on average equity of 8.84% for the six months ended June 30, 2022 declined 6.11% versus the same period in 2021
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•
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Trust and asset advisory business revenue remained level at approximately $4.7 million for the six months ended June 30, 2022, as compared to the
same period in 2021
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MIDDLETOWN, N.Y., August 1, 2022
– Orange County Bancorp, Inc. (the “Company” - Nasdaq: OBT), parent company of Orange Bank & Trust Co. (the “Bank”) and Hudson Valley Investment Advisors, Inc. (“HVIA”), today announced net income of $2.1 million, or $0.38 per basic and diluted
share, for the three months ended June 30, 2022. This compares with net income of $5.2 million, or $1.16 per basic and diluted share, for the three months ended June 30, 2021. The decrease in net income was primarily due to a $4.7 million increase
in provision for loan losses for the three months ended June 30, 2022 as compared to the same period in 2021 resulting from two impaired loan relationships within the syndicated loan portfolio.
Tangible book value per share decreased $6.55, or 21.0%, from $31.18 at December 31, 2021, to $24.63 at June 30, 2022 (see also
“Non-GAAP Financial Measure” section on page 6 for reconciliation). Book value per share declined $6.57, or 20.3%, from $32.43 at December 31, 2021 to $25.86 at June 30, 2022. These decreases were primarily driven by changes in market value
associated with the available-for-sale investment portfolio, which was directly impacted by rising interest rates. The Bank maintains its entire investment portfolio within the available-for-sale category.
“Despite a second Federal Reserve rate increase during the quarter, in its effort to quell inflation, our regional economy remains
strong,” said Company President and CEO Michael Gilfeather. “And though our strategic focus on business banking provides a stable platform for growth, it can’t insulate us fully from the volatility caused by rapidly changing interest rate policy and
other market dynamics. As illustration of this, while our core growth story remains intact, management determined that certain syndicated loan relationships were impaired during the quarter. This combined with the Bank’s continued strong loan growth
required a quarterly loan loss provision of $5.5 million, which was up from $809 thousand during the same quarter last year, and was significantly higher than the normal loan loss provision which we would typically reserve
against the Bank’s loan production. This charge directly impacted our quarterly earnings of $2.1 million, or $0.38 per share.
Meanwhile, loan and deposit growth continued at a near record pace. Average loans net of PPP of $1.4 billion during the quarter, was
up 20.4% over the same period last year. We finished the quarter with a total loan portfolio of $1.5 billion, up $180 million, or 13.9%, over year end 2021. Average demand deposits and money market accounts rose 18.6%, to $1.1 billion, versus the
same period last year. And, total deposits of $2.2 billion at quarter end is up nearly $300 million, or 15.1%, year to date.
Total interest income rose $2.8 million, or 18.0%, to $18.5 million for the three months ended June 30, 2022, compared to $15.7
million for the three months ended June 30, 2021. Net interest income grew $2.9 million, or 19.7%, to $17.5 million, versus $14.6 million during the same period in 2021. As reported last quarter, we held $350 million in funds at the Fed in
anticipation of higher rates and were able to deploy these during the quarter in new loans and investments which contributed to our increase in net interest income. These strategies allowed net interest margin to reach 3.14% for the three months
ended June 30, 2022 as compared to 3.09% for the same period in 2021.
Wealth Management revenue, which includes our Trust and Asset Management businesses, was essentially flat year-over-year at $4.7
million through the first six months of 2022. During the same period, assets-under-management for the Trust and Asset Management group rose slightly, ending the quarter at $1.07 billion. Given negative debt and equity market performance through the
first half of 2022, these results are better than expected, and reflect the group’s cautious, client-centric approach to investment management.
Though the challenging rate and investing environment which began this year continued through Q2, regional economic conditions remain
strong. As a result, we continued to identify compelling opportunities for loan growth and the deployment of lower yielding funds. This resulted in significant loan growth and investment during the quarter, even as we continued to attract low cost
deposits. Beyond the increased provision on loans, we enjoyed a strong and productive quarter.
Our focus, therefore, remains on disciplined growth, maintenance of a risk posture exceeding that required by regulators, and
creation of a work environment that attracts and retains superior talent. To that end I would like to congratulate Jonathan Rouis on his appointment as our new Board Chairman. Jonathan has been on the Board and instrumental in helping guide the
Bank’s growth since 2018. I look forward to his leadership as Chairman. I also want to thank Lou Heimbach for his many years of leadership as Board Chair. Throughout his tenure, he ensured the Board was a committed partner with management,
including with the new growth strategy we embarked on in 2014. Lou will remain on the Board, so we will continue to benefit from his extensive institutional knowledge and perspective.
And, finally, I want to thank our employees. Each day they work long hours to meet the demands of our clients, while trying to
protect and maximize results for the Bank and its shareholders. While quarterly earnings are important, it is sustainable, long-term growth we strive for, and I believe we have the team in place to deliver on that goal.”
2
Second Quarter and First Half 2022 Financial Review
Net Income
Net income for the second quarter of 2022 was $2.1 million, a decrease of approximately $3.0 million, or 58.8%, versus net income of
approximately $5.1 million for the second quarter of 2021. The decrease was due primarily to an increased provision for loan losses associated with credit issues with syndicated loans within the C&I portfolio and strong loan growth during the
quarter. Net income for the six months ended June 30, 2022 was $7.4 million, as compared to $10.2 million for the same period in 2021. The overall decrease was related to the increased loan loss provision recorded in Q2.
Net Interest Income
For the three months ended June 30, 2022, net interest income increased $2.9 million, or 19.7%, to $17.5 million, versus $14.6 million
during the same period in 2021. For the six months ended June 30, 2022, net interest income increased $5.5 million, or 19.3%, over the first half of 2021. These increases absorbed a significant decline in interest income from PPP loans recognized
during the prior year.
Total interest income rose $2.8 million, or 18.0%, to $18.5 million for the three months ended June 30, 2022, compared to $15.7 million
for the three months ended June 30, 2021. The increase in interest income was primarily due to increased interest and fees associated with loan growth, as well as an increase of approximately 102.1% in interest income associated with higher levels
of investment securities. The securities-related increase reflects management’s continued focus on deploying excess liquidity to realize incremental investment earnings. For the six months ended June 30, 2022, total interest income rose $5.3
million, or 17.8%, to $35.8 million, as compared to $30.4 million for the six months ended June 30, 2021.
Total interest expense decreased $51 thousand in the second quarter of 2022, to $975 thousand, as compared to $1.0 million in the
second quarter of 2021. The decrease was driven by a reduction in deposit interest expense associated with time deposits. The control of interest expense remains a priority for management in 2022 as significant additional rate increases are
anticipated. During the six months ended June 30, 2022, total interest expense decreased $142 thousand, or 6.9%, to $1.9 million, as compared to $2.1 million for the six months ended June 30, 2021.
Provision for Loan Losses
The Company recognized a provision for loan losses of $5.5 million for the three months ended June 30, 2022, compared to $809 thousand
for the three months ended June 30, 2021. The increased provision reflects the recognition of impairments within the syndicated loan portfolio as well as continued growth of the loan portfolio. Syndicated loans represent approximately 4.5% of total
loans at June 30, 2022. The allowance for loan losses to total loans was 1.61% as of June 30, 2022, an increase of 24 basis points, or 17.5%, versus 1.37% as of December 31, 2021. For the six months ended June 30, 2022, the provision for loan losses
totaled $6.4 million as compared to $875 thousand for the six months ended June 30, 2021.
3
Non-Interest Income
Non-interest income remained stable at $3.0 million for second quarter 2022 and 2021, respectively. With assets-under-management of
approximately $1.1 billion at June 30, 2022, non-interest income continues to be supported by success of the Bank’s trust operations and HVIA asset management activities. Additionally, the Company experienced increased earnings from the BOLI
investment during the quarter. For the six months ended June 30, 2022, non-interest income increased approximately $63 thousand, to $6.0 million, as compared to $5.9 million for the six months ended June 30, 2021.
Non-Interest Expense
Non-interest expense was $12.5 million for the second quarter of 2022, reflecting an increase of approximately $2.1 million, or 19.8%,
as compared to $10.4 million for the same period in 2021. The increase in non-interest expense for the current three-month period was due to continued investment in overall company growth, including increases in compensation and benefit costs,
occupancy costs, information technology, and deposit insurance. The second quarter also included the full impact of costs associated with our two newest locations, Bronx and Nanuet, NY. Our efficiency ratio was 60.85% for the three months ended
June 30, 2022, from 58.90% for the same period in 2021. For the six months ended June 30, 2022, our efficiency ratio was 60.98% as compared to 57.01% for the same period in 2021.
Income Tax Expense
Our provision for income taxes for the three months ended June 30, 2022 was approximately $400 thousand, compared to approximately
$1.3 million for the same period in 2021. The decrease for the current period was due to a decrease in income before income taxes during the quarter. Our effective tax rate for the three-month period ended June 30, 2022 was 15.9%, as compared to
19.5% for the same period in 2021. For the six months ended June 30, 2022, our provision for income taxes was $1.7 million, as compared to $2.5 million for the six months ended June 30, 2021. Our effective tax rate for the six-month period ended
June 30, 2022 was 18.3%, as compared to 19.5% for the same period in 2021. The reduction in effective tax rates on the 2022 second quarter and six month period is due to the increase in proportion of non-taxable revenue (tax-exempt interest income
and earnings on bank owned life insurance) compared with total pre-tax income.
4
Financial Condition
Total consolidated assets increased $249.5 million, or 11.6%, from $2.1 billion at December 31, 2021 to $2.4 billion at June 30, 2022.
The increase was driven by growth in loans, and investment securities.
Total cash and due from banks decreased from $306.2 million at December 31, 2021, to $271.5 million at June 30, 2022, a decrease of
approximately $34.7 million, or 11.3%. This decrease resulted primarily from increases in loan growth and management focus on deploying excess cash into investments and enhancing incremental yield.
Total investment securities rose $97.7 million, or 20.9%, from $467.0 million at December 31, 2021 to $564.7 million at June 30, 2022.
The increase was due to purchases of investment securities, offset by an increase in unrealized losses on investment securities since December 31, 2021 as well as paydowns and maturities during the period.
Total loans increased $180.3 million, or 14.0%, from $1.29 billion at December 31, 2021 to $1.47 billion at June 30, 2022. The
increase was due primarily to $133.3 million of commercial real estate loan growth and $41.2 million of commercial real estate construction loan growth. PPP loans fell $29.1 million, to $9.0 million at June 30, 2022 from $38.1 million at December
31, 2021. Most of the remaining PPP loan balance is subject to SBA loan forgiveness.
Total deposits grew $289.1 million, to $2.2 billion, at June 30, 2022, from $1.9 billion at December 31, 2021. This increase continues
to be driven by continued success in business account development combined with attorney trust deposit growth and increased deposit levels for local municipal accounts. At June 30, 2022, 53.1% of total deposits were demand deposit accounts (including
NOW accounts).
Stockholders’ equity experienced a decrease of approximately $37.1 million, to $145.7 million, at June 30, 2022, from $182.8 million
at December 31, 2021. The decrease was primarily due to a $42.3 million increase in unrealized losses on the market value of investment securities recognized within the Company’s equity as accumulated other comprehensive income (loss) (“AOCI”), net
of taxes, as a result of the increase in market interest rates. Offsetting the AOCI fluctuation, the Bank recognized an increase in retained earnings of approximately $5.2 million associated with earnings during the six months ended June 30, 2022,
net of dividends paid.
At June 30, 2022, the Bank maintained capital ratios in excess of regulatory standards for well capitalized institutions. The Bank’s
Tier 1 capital to average assets ratio was 8.09%, both common equity and Tier 1 capital to risk weighted assets were 11.85%, and total capital to risk weighted assets was 13.10%. These ratios included contributions of approximately $27.5 million of
capital at the Bank level representing roughly half of net proceeds from the Company’s public offering of common stock during 2021.
Loan Quality
At June 30, 2022, the Bank had total non-performing loans of $20.4 million, or 1.39% of total loans, which included $3.5 million of
Troubled Debt Restructured Loans (“TDRs”). The latter represents 0.23% of total loans and was relatively level as compared with $3.6 million at December 31, 2021. Accruing loans delinquent greater than 90 days were $1.6 million as of June 30, 2022,
as compared to $1.4 million at December 31, 2021.
5
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Non-GAAP Financial Measure Reconciliation
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The following table reconciles, as of the dates set forth below, stockholders’ equity (on a GAAP basis) to tangible equity and total assets (on a
GAAP basis) to tangible assets and calculates our tangible book value per share.
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June 30, 2022
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December 31, 2021
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(Dollars in thousands except for share data)
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Tangible Common Equity:
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Total stockholders’ equity
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$ 145,723
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$ 182,836
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Adjustments:
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Goodwill
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(5,359)
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(5,359)
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Other intangible assets
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(1,535)
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(1,678)
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Tangible common equity
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$ 138,829
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$ 175,799
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Common shares outstanding
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5,635,519
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5,637,376
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Book value per common share
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$ 25.86
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$ 32.43
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Tangible book value per common share
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$ 24.63
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$ 31.18
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Tangible Assets
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Total assets
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$ 2,392,049
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$ 2,142,583
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Adjustments:
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Goodwill
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(5,359)
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(5,359)
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Other intangible assets
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(1,535)
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(1,678)
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Tangible assets
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$ 2,385,155
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$ 2,135,546
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Tangible common equity to tangible assets
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5.82%
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8.23%
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About Orange County Bancorp, Inc.
Orange County Bancorp, Inc. is the parent company of Orange Bank & Trust Company and Hudson Valley Investment Advisors, Inc.
Orange Bank & Trust Company is an independent bank that began with the vision of 14 founders over 125 years ago. It has grown through innovation and an unwavering commitment to its community and business clientele to more than $2.0 billion in
total assets. Hudson Valley Investment Advisors, Inc. is a Registered Investment Advisor in Goshen, NY. It was founded in 1996 and acquired by the Company in 2012.
6
Forward Looking Statements
Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as “may,” “will,” “believe,” “expect,”
“estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the real
estate and economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, inflation, changes in government regulations affecting financial
institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources
of liquidity. Further, given its ongoing and dynamic nature, it is difficult to predict what the continuing effects of the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic
disruption may, among other effects, continue to result in a material adverse change for the demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch disruptions, unavailability of
personnel and increased cybersecurity risks as employees work remotely.
The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the
date made. The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements
expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions that may be made to any forward looking statements to reflect
events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
For further information:
Robert L. Peacock
SEVP Chief Financial Officer
rpeacock@orangebanktrust.com
Phone: (845) 341-5005
7
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ORANGE COUNTY BANCORP, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
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(UNAUDITED)
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(Dollar Amounts in thousands except per share data)
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June 30, 2022
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December 31, 2021
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ASSETS
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Cash and due from banks
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$ 271,445
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$ 306,179
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Investment securities - available-for-sale
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561,663
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464,797
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Restricted investment in bank stocks
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3,063
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2,217
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Loans
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1,471,728
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1,291,428
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Allowance for loan losses
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(23,642)
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(17,661)
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Loans, net
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1,448,086
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1,273,767
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Premises and equipment, net
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14,279
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14,601
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Accrued interest receivable
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6,947
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6,643
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Bank owned life insurance
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39,982
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39,513
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Goodwill
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5,359
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5,359
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Intangible assets
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1,535
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1,678
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Other assets
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39,690
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27,829
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TOTAL ASSETS
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$ 2,392,049
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$ 2,142,583
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposits:
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Noninterest bearing
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$ 791,778
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701,645
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Interest bearing
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1,411,670
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1,212,739
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Total deposits
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2,203,448
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1,914,384
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Note payable
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3,000
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3,000
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Subordinated notes, net of issuance costs
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19,413
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19,376
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Accrued expenses and other liabilities
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20,465
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22,987
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TOTAL LIABILITIES
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2,246,326
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1,959,747
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STOCKHOLDERS' EQUITY
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Common stock, $0.50 par value; 15,000,000 shares authorized;
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5,683,304 issued; 5,635,519 and 5,637,376 outstanding,
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at June 30 and December 31, 2021, respectively
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2,842
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2,842
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Surplus
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119,946
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119,825
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Retained Earnings
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70,131
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64,941
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Accumulated other comprehensive income (loss), net of taxes
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(45,761)
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(3,443)
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Treasury stock, at cost; 47,785 and 45,928 shares at June 30,
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2022 and December 31, 2021, respectively
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(1,435)
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(1,329)
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TOTAL STOCKHOLDERS' EQUITY
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145,723
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182,836
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ 2,392,049
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$ 2,142,583
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8
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ORANGE COUNTY BANCORP, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
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(UNAUDITED)
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(Dollar Amounts in thousands except per share data)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2022
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2021
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2022
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2021
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INTEREST INCOME
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Interest and fees on loans
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$ 15,200
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$ 14,033
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$ 30,206
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$ 27,261
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Interest on investment securities:
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Taxable
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2,249
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1,156
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3,887
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2,284
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Tax exempt
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553
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408
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1,034
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771
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Interest on Federal funds sold and other
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482
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61
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627
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104
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||||||||||
|
TOTAL INTEREST INCOME
|
18,484
|
15,658
|
35,754
|
30,420
|
||||||||||
|
INTEREST EXPENSE
|
||||||||||||||
|
Savings and NOW accounts
|
651
|
617
|
1,221
|
1,209
|
||||||||||
|
Time deposits
|
51
|
137
|
139
|
295
|
||||||||||
|
Note payable
|
42
|
42
|
84
|
84
|
||||||||||
|
Subordinated notes
|
231
|
230
|
462
|
460
|
||||||||||
|
TOTAL INTEREST EXPENSE
|
975
|
1,026
|
1,906
|
2,048
|
||||||||||
|
NET INTEREST INCOME
|
17,509
|
14,632
|
33,848
|
28,372
|
||||||||||
|
Provision for loan losses
|
5,510
|
809
|
6,433
|
875
|
||||||||||
|
NET INTEREST INCOME AFTER
|
||||||||||||||
|
PROVISION FOR LOAN LOSSES
|
11,999
|
13,823
|
27,415
|
27,497
|
||||||||||
|
NONINTEREST INCOME
|
||||||||||||||
|
Service charges on deposit accounts
|
161
|
158
|
329
|
333
|
||||||||||
|
Trust income
|
1,223
|
1,184
|
2,393
|
2,307
|
||||||||||
|
Investment advisory income
|
1,099
|
1,235
|
2,300
|
2,411
|
||||||||||
|
Earnings on bank owned life insurance
|
236
|
173
|
469
|
345
|
||||||||||
|
Other
|
258
|
278
|
491
|
523
|
||||||||||
|
TOTAL NONINTEREST INCOME
|
2,977
|
3,028
|
5,982
|
5,919
|
||||||||||
|
NONINTEREST EXPENSE
|
||||||||||||||
|
Salaries
|
5,499
|
4,726
|
10,768
|
9,273
|
||||||||||
|
Employee benefits
|
1,301
|
876
|
2,702
|
2,002
|
||||||||||
|
Occupancy expense
|
1,105
|
967
|
2,328
|
1,932
|
||||||||||
|
Professional fees
|
1,240
|
1,023
|
2,094
|
1,930
|
||||||||||
|
Directors' fees and expenses
|
233
|
252
|
578
|
494
|
||||||||||
|
Computer software expense
|
1,238
|
1,032
|
2,353
|
2,090
|
||||||||||
|
FDIC assessment
|
313
|
267
|
622
|
555
|
||||||||||
|
Advertising expenses
|
564
|
285
|
1,405
|
568
|
||||||||||
|
Advisor expenses related to trust income
|
20
|
140
|
158
|
261
|
||||||||||
|
Telephone expenses
|
138
|
136
|
313
|
270
|
||||||||||
|
Intangible amortization
|
71
|
71
|
143
|
143
|
||||||||||
|
Other
|
744
|
626
|
823
|
1,198
|
||||||||||
|
TOTAL NONINTEREST EXPENSE
|
12,466
|
10,401
|
24,287
|
20,716
|
||||||||||
|
Income before income taxes
|
2,510
|
6,450
|
9,110
|
12,700
|
||||||||||
|
Provision for income taxes
|
400
|
1,257
|
1,670
|
2,482
|
||||||||||
|
NET INCOME
|
$ 2,110
|
$ 5,193
|
$ 7,440
|
$ 10,218
|
||||||||||
|
Basic and diluted earnings per share
|
$ 0.38
|
$ 1.16
|
$ 1.32
|
$ 2.28
|
||||||||||
|
Weighted average shares outstanding
|
5,618,826
|
4,488,602
|
5,618,232
|
4,485,886
|
||||||||||
9
|
ORANGE COUNTY BANCORP, INC.
|
|||||||||||
|
NET INTEREST MARGIN ANALYSIS
|
|||||||||||
|
(UNAUDITED)
|
|||||||||||
|
(Dollar Amounts in thousands)
|
|||||||||||
|
Three Months Ended June 30,
|
|||||||||||
|
2022
|
2021
|
||||||||||
|
Average Balance
|
Interest
|
Average Rate
|
Average Balance
|
Interest
|
Average Rate
|
||||||
|
Assets:
|
|||||||||||
|
Loans Receivable (net of PPP)
|
$ 1,382,733
|
$ 14,964
|
4.34%
|
$ 1,148,215
|
$ 12,883
|
4.50%
|
|||||
|
PPP Loans
|
9,847
|
236
|
9.61%
|
119,463
|
1,150
|
3.86%
|
|||||
|
Investment securities
|
518,192
|
2,758
|
2.13%
|
361,541
|
1,541
|
1.71%
|
|||||
|
Due from banks
|
320,303
|
482
|
0.60%
|
270,259
|
61
|
0.09%
|
|||||
|
Other
|
3,057
|
44
|
5.77%
|
2,038
|
23
|
4.53%
|
|||||
|
Total interest earning assets
|
2,234,132
|
18,484
|
3.32%
|
1,901,516
|
15,658
|
3.30%
|
|||||
|
Non-interest earning assets
|
92,336
|
81,249
|
|||||||||
|
Total assets
|
$ 2,326,468
|
$ 1,982,765
|
|||||||||
|
Liabilities and equity:
|
|||||||||||
|
Interest-bearing demand accounts
|
$ 366,455
|
$ 96
|
0.11%
|
$ 276,609
|
$ 84
|
0.12%
|
|||||
|
Money market accounts
|
705,486
|
469
|
0.27%
|
627,289
|
478
|
0.31%
|
|||||
|
Savings accounts
|
229,915
|
86
|
0.15%
|
183,867
|
55
|
0.12%
|
|||||
|
Certificates of deposit
|
74,371
|
51
|
0.28%
|
88,537
|
137
|
0.62%
|
|||||
|
Total interest-bearing deposits
|
1,376,227
|
702
|
0.20%
|
1,176,302
|
754
|
0.26%
|
|||||
|
FHLB Advances and other borrowings
|
3
|
-
|
1.59%
|
3
|
-
|
0.27%
|
|||||
|
Note payable
|
3,000
|
42
|
5.62%
|
3,000
|
42
|
5.62%
|
|||||
|
Subordinated notes
|
19,402
|
231
|
4.78%
|
19,348
|
230
|
4.77%
|
|||||
|
Total interest bearing liabilities
|
1,398,632
|
975
|
0.28%
|
1,198,653
|
1,026
|
0.34%
|
|||||
|
Non-interest bearing demand accounts
|
751,511
|
627,806
|
|||||||||
|
Other non-interest bearing liabilities
|
19,332
|
17,563
|
|||||||||
|
Total liabilities
|
2,169,475
|
1,844,022
|
|||||||||
|
Total shareholders' equity
|
156,993
|
138,743
|
|||||||||
|
Total liabilities and shareholders' equity
|
$ 2,326,468
|
$ 1,982,765
|
|||||||||
|
Net interest income
|
$ 17,509
|
$ 14,632
|
|||||||||
|
Interest rate spread 1
|
3.04%
|
2.96%
|
|||||||||
|
Net interest margin 2
|
3.14%
|
3.09%
|
|||||||||
|
Average interest earning assets to interest-bearing liabilities
|
159.7%
|
158.6%
|
|||||||||
|
Notes:
|
|||||||||||
|
1 The Interest rate spread is the difference between the yield on average interest-earning assets and the cost of average
interest-bearing liabilities
|
|||||||||||
|
2 Net interest margin is the annualized net interest income divided by average interest-earning assets
|
|||||||||||
10
|
ORANGE COUNTY BANCORP, INC.
|
|||||||||||
|
NET INTEREST MARGIN ANALYSIS
|
|||||||||||
|
(UNAUDITED)
|
|||||||||||
|
(Dollar Amounts in thousands)
|
|||||||||||
|
Six Months Ended June 30,
|
|||||||||||
|
2022
|
2021
|
||||||||||
|
Average Balance
|
Interest
|
Average Rate
|
Average Balance
|
Interest
|
Average Rate
|
||||||
|
Assets:
|
|||||||||||
|
Loans Receivable (net of PPP)
|
$ 1,324,604
|
$ 29,365
|
4.47%
|
$ 1,116,706
|
$ 24,886
|
4.49%
|
|||||
|
PPP Loans
|
16,520
|
841
|
10.27%
|
107,040
|
2,375
|
4.47%
|
|||||
|
Investment securities
|
496,725
|
4,845
|
1.97%
|
351,169
|
3,013
|
1.73%
|
|||||
|
Due from banks
|
351,394
|
627
|
0.36%
|
224,083
|
104
|
0.09%
|
|||||
|
Other
|
2,740
|
76
|
5.59%
|
1,780
|
42
|
4.76%
|
|||||
|
Total interest earning assets
|
2,191,983
|
35,754
|
3.29%
|
1,800,778
|
30,420
|
3.41%
|
|||||
|
Non-interest earning assets
|
89,017
|
81,459
|
|||||||||
|
Total assets
|
$ 2,281,000
|
$ 1,882,237
|
|||||||||
|
Liabilities and equity:
|
|||||||||||
|
Interest-bearing demand accounts
|
$ 361,804
|
$ 183
|
0.10%
|
$ 269,626
|
$ 165
|
0.12%
|
|||||
|
Money market accounts
|
677,607
|
880
|
0.26%
|
583,535
|
939
|
0.33%
|
|||||
|
Savings accounts
|
220,453
|
158
|
0.14%
|
171,449
|
105
|
0.12%
|
|||||
|
Certificates of deposit
|
77,195
|
139
|
0.36%
|
89,660
|
295
|
0.67%
|
|||||
|
Total interest-bearing deposits
|
1,337,059
|
1,360
|
0.21%
|
1,114,270
|
1,504
|
0.27%
|
|||||
|
FHLB Advances and other borrowings
|
1
|
0
|
0.40%
|
1
|
0
|
0.40%
|
|||||
|
Note payable
|
3,000
|
84
|
5.65%
|
3,000
|
84
|
5.66%
|
|||||
|
Subordinated notes
|
19,392
|
462
|
4.80%
|
19,668
|
460
|
4.73%
|
|||||
|
Total interest bearing liabilities
|
1,359,452
|
1,906
|
0.28%
|
1,136,939
|
2,048
|
0.36%
|
|||||
|
Non-interest bearing demand accounts
|
732,615
|
590,332
|
|||||||||
|
Other non-interest bearing liabilities
|
20,696
|
18,306
|
|||||||||
|
Total liabilities
|
2,112,763
|
1,745,577
|
|||||||||
|
Total shareholders' equity
|
168,237
|
136,660
|
|||||||||
|
Total liabilities and shareholders' equity
|
$ 2,281,000
|
$ 1,882,237
|
|||||||||
|
Net interest income
|
$ 33,848
|
$ 28,372
|
|||||||||
|
Interest rate spread 1
|
3.01%
|
3.04%
|
|||||||||
|
Net interest margin 2
|
3.11%
|
3.18%
|
|||||||||
|
Average interest earning assets to interest-bearing liabilities
|
161.2%
|
158.4%
|
|||||||||
|
Notes:
|
|||||||||||
|
1 The Interest rate spread is the difference between the yield on average interest-earning assets and the cost of average
interest-bearing liabilities
|
|||||||||||
|
2 Net interest margin is the annualized net interest income divided by average interest-earning assets
|
|||||||||||
11
|
ORANGE COUNTY BANCORP, INC.
|
|||||||||||||||
|
SELECTED RATIOS AND OTHER DATA
|
|||||||||||||||
|
(UNAUDITED)
|
|||||||||||||||
|
Three Months Ended
June 30, (1)
|
Six Months Ended
June 30,
|
||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
||||||||||||
|
Performance Ratios:
|
|||||||||||||||
|
Return on average assets (1)
|
0.36%
|
1.05%
|
0.65%
|
1.09%
|
|||||||||||
|
Return on average equity (1)
|
5.38%
|
14.97%
|
8.84%
|
14.95%
|
|||||||||||
|
Interest rate spread (2)
|
3.04%
|
2.96%
|
3.01%
|
3.04%
|
|||||||||||
|
Net interest margin (3)
|
3.14%
|
3.09%
|
3.11%
|
3.18%
|
|||||||||||
|
Dividend payout ratio (4)
|
53.26%
|
17.29%
|
30.21%
|
17.56%
|
|||||||||||
|
Non-interest income to average total assets
|
0.51%
|
0.61%
|
0.52%
|
0.63%
|
|||||||||||
|
Non-interest expenses to average total assets
|
2.14%
|
2.10%
|
2.13%
|
2.20%
|
|||||||||||
|
Average interest-earning assets to average interest-bearing liabilities
|
159.74%
|
158.64%
|
161.24%
|
158.39%
|
|||||||||||
|
At
June 30, 2022
|
At
December 31, 2021
|
||||||||||||||
|
Asset Quality Ratios:
|
|||||||||||||||
|
Non-performing assets to total assets
|
0.85%
|
0.28%
|
|||||||||||||
|
Non-performing loans to total loans
|
1.39%
|
0.46%
|
|||||||||||||
|
Allowance for loan losses to non-performing loans
|
115.64%
|
296.67%
|
|||||||||||||
|
Allowance for loan losses to total loans
|
1.61%
|
1.37%
|
|||||||||||||
|
Capital Ratios (5):
|
|||||||||||||||
|
Total capital (to risk-weighted assets)
|
13.17%
|
14.12%
|
|||||||||||||
|
Tier 1 capital (to risk-weighted assets)
|
11.92%
|
12.87%
|
|||||||||||||
|
Common equity tier 1 capital (to risk-weighted assets)
|
11.92%
|
12.87%
|
|||||||||||||
|
Tier 1 capital (to average assets)
|
8.09%
|
8.15%
|
|||||||||||||
|
Notes:
|
|||||||||||||||
|
(1)
|
Annualized for the three and six month periods ended June 30, 2022 and 2021, respectively.
|
||||||||||||||
|
(2)
|
Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing
liabilities for the periods.
|
||||||||||||||
|
(3)
|
The net interest margin represents net interest income as a percent of average interest-earning assets for the periods.
|
||||||||||||||
|
(4)
|
The dividend payout ratio represents dividends paid per share divided by net income per share.
|
||||||||||||||
|
(5)
|
Ratios are for the Bank only.
|
||||||||||||||
12
|
ORANGE COUNTY BANCORP, INC.
|
||||||||||||||
|
SELECTED OPERATING DATA
|
||||||||||||||
|
(UNAUDITED)
|
||||||||||||||
|
(Dollar Amounts in thousands except per share data)
|
||||||||||||||
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||
|
Interest income
|
$ 18,484
|
$ 15,658
|
$ 35,754
|
$ 30,420
|
||||||||||
|
Interest expense
|
975
|
1,026
|
1,906
|
2,048
|
||||||||||
|
Net interest income
|
17,509
|
14,632
|
33,848
|
28,372
|
||||||||||
|
Provision for loan losses
|
5,510
|
809
|
6,433
|
875
|
||||||||||
|
Net interest income after provision for loan losses
|
11,999
|
13,823
|
27,415
|
27,497
|
||||||||||
|
Noninterest income
|
2,977
|
3,028
|
5,982
|
5,919
|
||||||||||
|
Noninterest expenses
|
12,466
|
10,401
|
24,287
|
20,716
|
||||||||||
|
Income before income taxes
|
2,510
|
6,450
|
9,110
|
12,700
|
||||||||||
|
Provision for income taxes
|
400
|
1,257
|
1,670
|
2,482
|
||||||||||
|
Net income
|
$ 2,110
|
$ 5,193
|
$ 7,440
|
$ 10,218
|
||||||||||
|
Basic and diluted earnings per share
|
$ 0.38
|
$ 1.16
|
$ 1.32
|
$ 2.28
|
||||||||||
|
Weighted average common shares outstanding
|
5,618,826
|
4,488,602
|
5,618,232
|
4,485,886
|
||||||||||
|
At
|
At
|
|||||||||||||
|
June 30, 2022
|
June 30, 2021
|
|||||||||||||
|
Book value per share
|
$ 25.86
|
$ 31.39
|
||||||||||||
|
Net tangible book value per share (1)
|
$ 24.63
|
$ 29.79
|
||||||||||||
|
Outstanding common shares
|
5,635,519
|
4,488,437
|
||||||||||||
|
Notes:
|
||||||||||||||
|
(1) Net tangible book value represents the amount of total tangible assets reduced by our total liabilities. Tangible assets are calculated by
reducing total assets, as defined by GAAP, by $5,359 in goodwill and $1,535, and $1,821 in other intangible assets for June 30, 2022 and June 30, 2021, respectively.
|
||||||||||||||
13
|
ORANGE COUNTY BANCORP, INC.
|
||||||||||||||
|
LOAN COMPOSITION
|
||||||||||||||
|
(UNAUDITED)
|
||||||||||||||
|
(Dollar Amounts in thousands)
|
||||||||||||||
|
At June 30,2022
|
At December 31, 2021
|
|||||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||
|
Commercial and industrial (a)
|
$ 273,464
|
18.58%
|
$ 268,508
|
20.79%
|
||||||||||
|
Commercial real estate
|
986,032
|
67.00%
|
852,707
|
66.03%
|
||||||||||
|
Commercial real estate construction
|
113,475
|
7.71%
|
72,250
|
5.59%
|
||||||||||
|
Residential real estate
|
68,529
|
4.66%
|
65,248
|
5.05%
|
||||||||||
|
Home equity
|
12,782
|
0.87%
|
13,638
|
1.06%
|
||||||||||
|
Consumer
|
17,446
|
1.19%
|
19,077
|
1.48%
|
||||||||||
|
Total loans
|
1,471,728
|
100.00%
|
1,291,428
|
100.00%
|
||||||||||
|
Allowance for loan losses
|
23,642
|
17,661
|
||||||||||||
|
Total loans, net
|
$ 1,448,086
|
$ 1,273,767
|
||||||||||||
|
(a) - Includes PPP loans of:
|
$ 9,042
|
$ 38,114
|
||||||||||||
|
ORANGE COUNTY BANCORP, INC.
|
||||||||||||||||||
|
DEPOSITS BY ACCOUNT TYPE
|
||||||||||||||||||
|
(UNAUDITED)
|
||||||||||||||||||
|
(Dollar Amounts in thousands)
|
||||||||||||||||||
|
At June 30, 2022
|
At December 31, 2021
|
|||||||||||||||||
|
Amount
|
Percent
|
Average Rate
|
Amount
|
Percent
|
Average Rate
|
|||||||||||||
|
Noninterest-bearing demand accounts
|
$ 791,778
|
35.93%
|
0.00%
|
$ 701,645
|
36.65%
|
0.00%
|
||||||||||||
|
Interest bearing demand accounts
|
378,859
|
17.19%
|
0.11%
|
301,596
|
15.75%
|
0.11%
|
||||||||||||
|
Money market accounts
|
718,538
|
32.61%
|
0.32%
|
615,111
|
32.14%
|
0.26%
|
||||||||||||
|
Savings accounts
|
241,233
|
10.95%
|
0.19%
|
213,592
|
11.16%
|
0.14%
|
||||||||||||
|
Certificates of Deposit
|
73,040
|
3.31%
|
0.28%
|
82,440
|
4.31%
|
0.46%
|
||||||||||||
|
Total
|
$ 2,203,448
|
100.00%
|
0.16%
|
$ 1,914,384
|
100.00%
|
0.14%
|
||||||||||||
14
|
ORANGE COUNTY BANCORP, INC.
|
|||||||||||
|
NON-PERFORMING ASSETS
|
|||||||||||
|
(UNAUDITED)
|
|||||||||||
|
(Dollar Amounts in thousands)
|
|||||||||||
|
June 30, 2022
|
December 31, 2021
|
||||||||||
|
Non-accrual loans:
|
|||||||||||
|
Commercial and industrial
|
$ 14,167
|
$ -
|
|||||||||
|
Commercial real estate
|
4,055
|
3,928
|
|||||||||
|
Commercial real estate construction
|
-
|
-
|
|||||||||
|
Residential real estate
|
601
|
578
|
|||||||||
|
Home equity
|
55
|
50
|
|||||||||
|
Consumer
|
-
|
4
|
|||||||||
|
Total non-accrual loans 1
|
18,878
|
4,560
|
|||||||||
|
Accruing loans 90 days or more past due:
|
|||||||||||
|
Commercial and industrial
|
1,114
|
720
|
|||||||||
|
Commercial real estate
|
-
|
465
|
|||||||||
|
Commercial real estate construction
|
-
|
-
|
|||||||||
|
Residential real estate
|
-
|
-
|
|||||||||
|
Home equity
|
-
|
-
|
|||||||||
|
Consumer
|
453
|
208
|
|||||||||
|
Total loans 90 days or more past due
|
1,567
|
1,393
|
|||||||||
|
Total non-performing loans
|
20,445
|
5,953
|
|||||||||
|
Other real estate owned
|
-
|
-
|
|||||||||
|
Other non-performing assets
|
-
|
-
|
|||||||||
|
Total non-performing assets
|
$ 20,445
|
$ 5,953
|
|||||||||
|
Ratios:
|
|||||||||||
|
Total non-performing loans to total loans
|
1.39%
|
0.46%
|
|||||||||
|
Total non-performing loans to total assets
|
0.85%
|
0.28%
|
|||||||||
|
Total non-performing assets to total assets
|
0.85%
|
0.28%
|
|||||||||
|
Notes:
|
|||||||||||
|
1 - Includes non-accruing TDRs:
|
$ 3,430
|
$ 3,570
|
|||||||||
15