OC
Orange County Bancorp, Inc. /DE/ (OBT)·Q1 2025 Earnings Summary
Executive Summary
- Q1 2025 delivered an EPS of $0.77, a beat versus Wall Street ($0.67), driven by higher net interest income, lower borrowing costs, and stronger fee income; revenue also modestly beat consensus ($27.0M vs $27.8M actual).* The year-over-year decline in EPS was entirely due to a non-recurring $1.9M recovery in Q1 2024 (~$0.17 per share) absent this quarter .*
- Balance sheet strength and funding mix improved: deposits rose $128.3M (+6.0%) to $2.282B; FHLB short-term borrowings fell to $20.5M from $113.5M in Q4; net interest margin expanded to 3.95% (+31 bps YoY) .
- Wealth Management momentum continued: trust and advisory income increased 19.2% YoY to $3.4M; AUM/AUA ended Q1 at $1.740B, down 2.4% QoQ on market movements but with stronger fee generation .
- Management highlighted macro uncertainty and tariff policy volatility but reiterated disciplined underwriting, deposit cost management (cost of deposits 1.29% in Q1 vs 1.34% in Q1 2024), and confidence in client-led growth opportunities .
- Near-term stock catalysts: sustainable NIM expansion, deposit inflows and lower reliance on wholesale borrowing, plus recurring fee growth in wealth; risks include credit normalization and operating expense growth .
What Went Well and What Went Wrong
What Went Well
- Net interest margin expanded to 3.95% (+31 bps YoY), reflecting improved funding mix and deposit cost discipline; total interest expense fell $1.2M YoY, with FHLB borrowing costs down sharply . CEO: “solid growth in net interest income and noninterest income and a meaningful reduction in our provision for credit losses” .
- Deposits rose $128.3M (+6.0%) QoQ to $2.282B, enabling paydown of short-term FHLB borrowings to $20.5M; deposit composition healthy with 45.4% demand accounts and uninsured deposits stable at ~39% .
- Wealth Management fee engine: trust and advisory income up 19.2% YoY to $3.4M, supporting diversified revenue; segment realignment to “Orange Wealth Management” announced in January to enhance integrated client coverage .
What Went Wrong
- Reported net income declined 6.3% YoY to $8.704M due to the prior year’s non-recurring $1.9M investment recovery; excluding that, earnings would have exceeded Q1 2024 .
- Noninterest expense rose 7.7% YoY to $16.494M as the company continues investing in compensation, occupancy, and IT; efficiency ratio remained elevated at 58.9% (vs 60.5% prior year) .
- AUM/AUA decreased 2.4% QoQ to $1.740B on market effects; non-performing loans remained ~$6.2M (0.33% of total loans), indicating continued credit normalization from late-2024 issues (albeit stable QoQ) .
Financial Results
Segment and Fee Detail
Key Balance Sheet & Credit KPIs
Consensus vs Actual (S&P Global)
Guidance Changes
Earnings Call Themes & Trends
No Q1 2025 earnings call transcript was available despite targeted searches; analysis below relies on press releases (Q3 2024, Q4 2024, Q1 2025) .
Management Commentary
- CEO Michael Gilfeather on macro and performance: “Despite this unexpected shift, I am pleased to announce Orange Bank posted another excellent quarterly performance… Excluding last year’s one-time gain, earnings for Q1 2025 would have exceeded Q1 2024.”
- On deposit strategy and NIM: “Growth in deposits remains a priority… Our cost of deposits for the first quarter of 2025 was 1.29%, down compared to 1.34% for the first quarter of 2024… net interest margin… 3.95%.”
- On Wealth Management: “Trust and investment advisory income rose $553 thousand, or 19.2%, to $3.4 million… This division… provides the Bank an important, diversified source of revenue.”
Q&A Highlights
No Q1 2025 earnings call transcript or Q&A was found; no additional guidance clarifications beyond press release disclosures .
Estimates Context
- EPS beat: $0.77 actual vs $0.67 consensus (+$0.10); revenue beat: $27.782M actual vs $27.0M consensus.* This reflects stronger net interest income and fee growth with reduced borrowing costs .*
- Prior quarters for context: Q4 2024 EPS missed ($0.63 vs $0.7025); Q3 2024 EPS missed substantially ($0.285 vs $0.7525) due to elevated provision on a specific CRE participation.* Revenue in Q4 beat while Q3 missed.* Estimates were based on limited coverage (2 EPS estimates; 1 revenue estimate in Q4/Q1), implying potential volatility in estimate dispersion.* Note: Values retrieved from S&P Global.*
Key Takeaways for Investors
- Funding mix and NIM tailwinds: deposit inflows and lower short-term borrowings support NIM expansion (3.95%) and lower interest expense; watch for continued deposit cost discipline as rates evolve .
- Earnings normalization: absent last year’s $1.9M one-time recovery, underlying earnings growth is positive; continued momentum hinges on credit stability and operating efficiency .
- Fee diversification: Wealth Management fees up ~19% YoY; organizational realignment (Orange Wealth Management) and leadership promotions should sustain cross-sell and wallet share gains .
- Credit watch items: NPLs steady at ~0.33% of loans; monitor resolution of legacy CRE participation issues and allowance trajectory (ACL/loans 1.42%) .
- Liquidity strength: robust unused FHLB capacity ($524.6M), Fed collateral ($91M), and manageable brokered deposit usage ($220M) provide flexibility for growth and contingency .
- Shareholder returns: dividend maintained at $0.13 per share in Q1 and May declarations; evaluate payout sustainability alongside growth investments .
- Near-term positioning: With consensus beats on EPS and revenue*, improving NIM, and cleaner credit trends, shares may benefit from continued operating leverage; risk factors include macro/tariff volatility and expense growth .*
References: Q1 2025 8-K press release and exhibits ; Q1 press release full text and tables ; Q4 2024 press release ; Q3 2024 press release ; Strategic realignment and promotions ; Dividend announcements . S&P Global consensus and actuals used in Estimates Context table.*