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Orange County Bancorp, Inc. /DE/ (OBT)·Q2 2025 Earnings Summary

Executive Summary

  • Record quarter: Net income $10.5M and EPS $0.87, up 27.4% YoY; NIM expanded to 4.06% and efficiency ratio improved to 51.6% .
  • Strong organic deposit growth (+$123.4M YTD to $2.3B) enabled paydown of FHLB borrowings (-$92.5M YTD) and reduced interest expense; average cost of deposits was 1.30% .
  • Noninterest income surged on one-time items (branch sale gain $3.635M and BOLI $2.4M) partially offset by tactical securities loss ($0.727M); wealth management income rose 14.8% to $3.4M .
  • Consensus beat: EPS $0.87 vs $0.75* and revenue $30.343M* vs $28.0M*; drivers were higher net interest income and fee income, plus lower borrowing costs . Values retrieved from S&P Global.
  • Capital raise: $46.0M gross offering (including overallotment) strengthened equity and flexibility for growth; tangible book per share rose to $18.45 .

What Went Well and What Went Wrong

What Went Well

  • “Nearly every segment of the Bank turned in strong financial performance” with net income up $2.3M YoY to $10.5M and EPS $0.87; NIM remained “impressive” at 4.06% .
  • Organic deposits (+$123.4M YTD) replaced $74M higher-cost brokered deposits; deposit cost was 1.30% and interest expense fell, supporting net interest income growth to $25.1M .
  • Wealth Management momentum: trust and advisory income increased 14.8% to $3.4M; AUM/AUA reached $1.828B (+2.5% vs YE24) .

What Went Wrong

  • Higher provision for credit losses ($2.1M) driven by a specific non-accrual loan; non-performing loans rose to $11.7M (0.61% of loans), up from $6.3M at YE24 .
  • Noninterest expense increased 8.2% YoY to $16.8M on occupancy, IT, and professional fees, though efficiency ratio improved YoY; sequentially, expenses were flat-ish vs Q1 .
  • Securities repositioning: realized loss of $0.727M to upgrade yields; while strategic, it reduced noninterest income in the quarter .

Financial Results

Core P&L and Margins

MetricQ2 2024Q4 2024Q1 2025Q2 2025
EPS ($)$0.73 $0.63 $0.77 $0.87
Net Income ($M)$8.213 $7.164 $8.704 $10.461
Interest Income ($M)$32.512 $32.206 $31.907 $33.224
Net Interest Income ($M)$24.119 $23.078 $23.628 $25.140
Provision for Credit Losses ($M)$2.210 $(0.051) $0.202 $2.113
Noninterest Income ($M)$3.807 $4.305 $4.356 $7.316
Noninterest Expense ($M)$15.487 $18.466 $16.494 $16.754
Net Interest Margin (%)4.10% 3.78% 3.95% 4.06%
Efficiency Ratio (%)55.5% 67.4% 58.9% 51.6%

Consensus vs Actual (SPGI-defined revenue)

MetricConsensus Q2 2025Actual Q2 2025
EPS ($)0.75*0.87
Revenue ($M)28.0*30.343*
Values retrieved from S&P Global.

Segment/Noninterest Income Detail

Component ($M)Q2 2024Q1 2025Q2 2025
Service charges0.232 0.290 0.334
Trust income1.309 1.674 1.573
Investment advisory income1.650 1.766 1.823
BOLI earnings0.270 0.259 0.234
Gain on sale of assets——3.635
Investment securities gains (losses)——(0.727)
Other0.346 0.367 0.444
Total Noninterest Income3.807 4.356 7.316

Balance Sheet and KPIs

KPIQ4 2024Q1 2025Q2 2025
Total Loans ($B)$1.816 $1.854 $1.918
Total Deposits ($B)$2.153 $2.282 $2.277
FHLB short-term borrowings ($M)$113.5 $20.5 $21.0
Allowance for credit losses to loans (%)1.44% 1.42% 1.48%
Non-performing loans ($M)$6.299 $6.205 $11.714
NPLs/Total Loans (%)0.35% 0.33% 0.61%
Net interest margin (%)3.78% 3.95% 4.06%
Cost of deposits (%)1.31% 1.29% 1.30%
CET1/Tier 1 capital to RWA (%)14.12% 14.16% 16.36%
Book value per share ($)$16.35 $17.69 $18.90

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal financial guidanceFY/Q3Not providedNot providedMaintained (no formal guidance)
Dividend per share ($)Q2 pay date Jun 16, 2025$0.13 (declared May 16, 2025)Paid Jun 16; next declared Aug 27 for Sep 16Maintained dividend cadence
Capital actionsQ2 2025—Public offering priced at $23.25, $40.0M gross; overallotment added ~$5.7M netRaised capital

Earnings Call Themes & Trends

(Note: Q2 2025 earnings call transcript was not available; themes reflect management’s press releases.)

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Tariffs/macro backdropFocus on credit reserves; non-performing participation loan charges “Uncertainty and market volatility stemming from… tariff policy” “Despite uncertainty surrounding tariff policy” loan demand remains strong Persistent uncertainty; operational resilience
Deposit strategy/cost1.31% cost; deposit growth +$114.6M in 2024 Cost 1.29%; +$128.3M deposits in Q1 Cost 1.30%; +$123.4M YTD; replaced $74M brokered Continued low-cost growth
Net interest marginFY NIM 3.83% NIM 3.95% NIM 4.06% Improving
Wealth ManagementAUM/AUA $1.783B; quarterly income $3.3M Quarterly income $3.4M Quarterly income $3.4M; AUM/AUA $1.828B Growing fees/AUM
Credit quality/NPLsNPLs $6.3M; reserves steady at 1.44% NPLs $6.2M; ACL 1.42% NPLs $11.7M; ACL 1.48%; specific non-accrual reserves Deterioration in Q2
Liquidity/borrowingsFHLB short-term $113.5M YE24 FHLB short-term $20.5M FHLB short-term $21.0M; unused capacity $541.8M Improved funding mix

Management Commentary

  • “Orange County Bank had a very productive and successful second quarter… yielding $10.5 million of net income… These results include several one-time gains but also reflect continued strength” — Michael Gilfeather, President & CEO .
  • “Deposit growth… enabled us to replace $74 million of higher cost brokered deposits with lower cost Bank client funds. Our cost of deposits… was 1.30%.… For the three months ended June 30, 2025, our net interest margin stood at an impressive 4.06%.” .
  • “We… completed a $46 million follow-on common stock offering… strengthening our financial position and giving us the flexibility to continue to expand our lending business” .

Q&A Highlights

  • Earnings call transcript for Q2 2025 was not available via our document tools; no Q&A themes could be validated. We reviewed full press releases and the 8‑K Exhibit 99.1 instead .

Estimates Context

  • EPS beat: $0.87 actual vs $0.75* consensus; beat of ~$0.12, driven by higher net interest income, fee income, and lower borrowing costs, partially offset by increased provision for credit losses . Values retrieved from S&P Global.
  • Revenue beat: $30.343M* actual vs $28.0M* consensus; beat of ~$2.34M*, supported by one-time gains (branch sale $3.635M; BOLI $2.4M) and continued fee growth . Values retrieved from S&P Global.
  • With stronger NIM (4.06%) and efficiency (51.6%), near-term estimate revisions likely move higher for net interest income and fee income; watch for adjustments to credit cost assumptions given NPL uptick .

Key Takeaways for Investors

  • Execution on core banking model is evident: NIM expanded to 4.06% with low-cost deposits (1.30%) and reduced borrowing reliance, producing record EPS and net income .
  • Fee diversification is working: wealth management income up 14.8% to $3.4M; sustained AUM/AUA growth to $1.828B reduces earnings volatility .
  • Credit risk needs monitoring: NPLs rose to $11.7M (0.61% of loans) and provision remained elevated; assess trajectory into H2 and any resolution progress on specific non-accruals .
  • Capital strengthened: ~$46M offering boosts equity, raises capital ratios (CET1/Tier1 to 16.36% RWA), supports prudent loan growth and liquidity flexibility .
  • One-time items inflated noninterest income this quarter (branch sale, BOLI) and a tactical securities loss offset part of the gain; normalize for run-rate analysis .
  • Dividend policy maintained at $0.13/share with regular cadence; supports total return while growth investments continue .
  • Near-term trading: positive skew from consensus beat and margin strength; medium-term thesis hinges on maintaining low deposit costs, disciplined credit, and leveraging wealth management fees .

Values retrieved from S&P Global.