Orange County Bancorp, Inc. /DE/ (OBT)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 delivered record profitability amid expanding net interest margin and lower funding costs: Net income was $10.0M ($0.75 EPS), up 211.5% YoY; NIM rose 45 bps YoY to 4.26% and 20 bps sequentially .
• EPS and “Revenue” both exceeded Wall Street consensus for Q3; OBT beat EPS ($0.75 vs $0.69*) and revenue ($29.86M* vs $27.75M*) on strong loan yields and deposit cost reductions; analyst coverage remains limited (2 estimates for EPS) [Values retrieved from S&P Global].
• Balance-sheet momentum persisted: loans +$119.9M YTD to $1.94B, deposits +$125.5M YTD to $2.28B; brokered CDs cut to $80.0M, helping reduce deposit cost to 1.13% .
• Noninterest income benefited from discrete items (BOLI death benefit ~$1.2M; insurance claim ~$0.93M); efficiency improved to 49.9%, despite higher operating investment .
• Strategic updates: Bronx branch opening and wealth rebrand to Orange Investment Advisors reinforce growth and cross-sell, with trust/advisory income +13.3% YoY to $3.5M in Q3 .

What Went Well and What Went Wrong

What Went Well

• Net interest margin expansion and deposit cost control: “For the quarter, our cost of deposits stood at 1.13%, down 17 bps QoQ… Given the decrease in deposit costs and increase in our average yield on loans, the positive impact on NIM isn’t surprising” (NIM 4.26%) .
• Wealth management growth and brand cohesion: Trust and investment advisory income rose to $3.5M (+13.3% YoY); HVIA rebranded as Orange Investment Advisors to strengthen unified client experience .
• Balance-sheet optimization: Replacement of $28M of high-cost brokered deposits with lower-cost organic funds and significant reduction of FHLB short-term borrowings to $22.5M from $113.5M at year-end .

What Went Wrong

• Nonperforming loans rose: NPLs increased to $12.2M (0.63% of loans) vs $6.3M at 12/31/24; Q3 provision for credit losses was $3.9M (vs $7.2M Q3’24), including a charge-off of a participation loan .
• Elevated operating investment: Noninterest expense increased to $16.8M (+5.6% YoY), reflecting ongoing growth initiatives (salaries/benefits, IT, FDIC); effective tax rate rose to 23.0% .
• Discrete items impacted comparability: Q3 recognized ~$1.2M BOLI death benefit and ~$0.93M insurance proceeds; YTD included ~$3.6M additional BOLI and ~$1.2M gain on branch sale offset by ~$0.57M securities repositioning loss .

Financial Results

Earnings vs Estimates

“Revenue” vs Estimates (SPGI definition)

Values retrieved from S&P Global.

Margin and Efficiency

Income Statement Highlights

Segment Breakdown (Wealth)

KPIs

Guidance Changes

Note: Management did not issue formal numerical guidance for revenue/margins/OpEx; tone emphasized deposit cost management, prudent underwriting, and NIM resilience in a lower-rate backdrop .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was available in our document set; themes reflect management commentary from press releases.

Management Commentary

• “Business momentum we saw through the first half of the year continued into Q3… earnings of over $10 million for the quarter, with every segment of the bank contributing strong performance.” — Michael Gilfeather, President & CEO .
• “Our cost of deposits stood at 1.13%, down 17 basis points… Given the decrease in deposit costs and increase in our average yield on loans, the positive impact on Net Interest Margin isn’t surprising.” .
• “We continue to exercise prudent underwriting standards in the face of uncertain political, geopolitical, tariff, and interest rate policy risks.” .
• “We formally changed the name of our registered investment advisor to Orange Investment Advisors” to reflect commitment to wealth management diversification .

Q&A Highlights

• No Q3 2025 earnings call transcript was available; therefore, Q&A details and any guidance clarifications cannot be assessed from primary sources in this set.

Estimates Context

• OBT beat EPS and revenue consensus in Q3 2025 and in both prior quarters. Limited coverage (EPS estimates count: 2 in Q3) suggests modest Street scrutiny; beats were driven by NIM expansion and lower deposit costs alongside loan growth.
• EPS consensus and “Revenue” consensus/actual values used above are from S&P Global; beats are likely to prompt upward revisions to NIM assumptions and noninterest income trajectory given recurring fee growth (trust/advisory), while discrete items should be normalized in forward models.
  Values retrieved from S&P Global.

Key Takeaways for Investors

• Deposit cost tailwinds and asset yield strength are expanding NIM, supporting earnings durability even as the Fed transitions to a lower-rate regime .
• Balance-sheet quality remains sound but bears watching: NPLs ticked higher; management is provisioning and maintaining allowance coverage (ACL/loans 1.51%) .
• Wealth management is a growing ancillary engine (trust/advisory $3.5M, AUM/AUA ~$1.90B), aided by branding integration to Orange Investment Advisors — expect stable fee contributions and cross-sell .
• Strategic funding actions (brokered down to $80M; FHLB ST borrowings ~$22.5M) reduce interest expense and improve flexibility; efficiency ratio improved to 49.9% .
• Discrete gains (BOLI, insurance proceeds, branch sale) boosted noninterest income; normalize these in forward estimates but retain positive view on core fee growth .
• Dividend continuity ($0.13 in Q3) underscores capital strength; bank capital ratios remain well above “well-capitalized” thresholds .
• Near-term trading: focus on NIM and deposit cost trajectory vs rate path; medium-term thesis: regional-commercial strategy, disciplined underwriting, and diversified revenues underpin multi-quarter earnings resilience .