Executive Summary

Q2 2025 delivered a sharp earnings inflection: net income rose to $2.7M ($0.25 diluted EPS), up 179.6% YoY, driven by higher net interest income and a credit provision reversal; NIM expanded to 3.97% and ROA/ROE improved materially .
Balance sheet repositioning executed in late 2024 continued to flow through results: higher asset yields, lower borrowing costs, and reduced FHLB advances supported spread/NIM expansion; deposits rose $50.0M QoQ while borrowings fell $43.2M .
Credit quality improved with net charge-offs down to $91K and non-performing assets down ~30% to $2.9M; ACL coverage of NPLs increased to 283% .
Expenses rose 8.5% YoY on higher commissions, retail banking, and marketing tied to deposit product promotions; efficiency ratio nevertheless improved to ~74% in Q2 .
Potential stock reaction catalysts: visible NIM/ROA/ROE trajectory, deposit growth with stable uninsured deposit share (~27.8%), and improved credit metrics; watch near-term expense discipline and sustainability of margin tailwinds .

What Went Well and What Went Wrong

What Went Well
- Net interest margin expansion to 3.97% and spread to 3.33% on improved asset yields and lower liability costs; net interest income +27.1% YoY to $11.5M .
- Credit metrics improved: provision was a credit of $101K; net charge-offs fell to $91K; NPAs declined 29.7% to $2.9M; NPL ratio at 0.30% .
- Management execution: “net income more than doubled… net interest margin expanded to 3.88%… ROAE 8.04%… non-performing assets declining 30%… Tier 1 capital 12.66%… TBVPS $11.40” — CEO Michael J. Quinn .
What Went Wrong
- Non-interest expense climbed 8.5% YoY to $9.7M, led by salaries/benefits (+$330K), retail banking (+$191K), and marketing (+$108K) .
- Investment advisory income dropped $109K (-28.8%) QoQ amid “unpredictable economic conditions,” modestly offset by swap and gain-on-sale income .
- Loans contracted $11.0M QoQ as indirect auto continued to be reduced (-$39.6M), partially offset by CRE (+$22.9M) and residential (+$7.4M) growth; overall average interest-earning assets declined .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total interest & dividend income ($USD)	$16.307M	$16.638M	$16.755M
Net interest income ($USD)	$10.499M	$11.037M	$11.492M
Total non-interest income ($USD)	$(2.512)M (incl. securities loss)	$1.751M	$1.602M
Net income ($USD)	$(2.654)M	$2.288M	$2.726M
Diluted EPS ($)	$(0.25)	$0.21	$0.25
Net interest margin (%)	3.61%	3.79%	3.97%
ROA (%)	(0.85)%	0.73%	0.88%
ROE (%)	(8.60)%	7.49%	8.57%
Efficiency ratio (%)	82.64% (ex-securities loss)	74.35% (ex-securities loss)	74.13%

Income Mix	Q4 2024	Q1 2025	Q2 2025
Service charges on deposit accounts ($USD)	$0.750M	$0.773M	$0.728M
Investment advisory income ($USD)	$0.398M	$0.336M	$0.269M
Gain on sales of loans ($USD)	$0.029M	$0.038M	$0.069M
Increase in CSV of BOLI ($USD)	$0.187M	$0.188M	$0.194M

Balance Sheet KPIs	Q4 2024	Q1 2025	Q2 2025
Total assets ($USD)	$1.256B	$1.256B	$1.274B
Loans receivable, net ($USD)	$971.8M	$976.5M	$960.8M
Total deposits ($USD)	$1.0208B	$1.0342B	$1.0708B
FHLB advances ($USD)	$69.8M	$53.9M	$26.6M
Uninsured deposits (% of total)	26.9%	27.8%	27.8%
Tier 1 capital ratio (%)	11.81%	12.10%	12.66%
Tangible BVPS ($)	$10.75	$11.14	$11.40

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue / EPS	FY/Q2 2025	Not provided	Not provided	Maintained (no formal guidance)
NIM / Spread	FY/Q2 2025	Qualitative improvement post-restructure	Continuing improvement evidenced (NIM 3.97%, spread 3.33%)	Confirmed qualitative trajectory
OpEx	FY/Q2 2025	Not provided	Elevated due to commissions, marketing, retail banking	N/A (no formal guidance)
Tax rate	FY/Q2 2025	Not provided	Not provided	N/A
Capital / Dividends	FY/Q2 2025	Not provided	Tier 1 12.66%; no dividend commentary	N/A

Earnings Call Themes & Trends

Note: An earnings call transcript for Q2 2025 was not available; themes reflect press releases and filings.

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Balance sheet restructuring	Executed in Q4; securities losses of $4.0M in Q4 (and $16.0M FY) to reinvest in higher-yield/shorter duration; NIM uplift began	Restructuring benefits sustained: higher asset yields, lower borrowing costs; NIM 3.97%	Improving
Deposit mix & promotions	Shift to higher-yield time/MM; marketing spend rising	Deposits +$50.0M QoQ; interest-bearing +$48.7M; marketing +$108K YoY	Expanding deposits; higher promo spend
Credit quality	Q4 charge-off in CRE; overdue accounts down; ACL coverage up	Provision credit; net charge-offs $91K; NPAs down to $2.9M; NPL 0.30%	Improving
Indirect auto portfolio	Strategic reduction (Q4-Q1)	Further reduced by $39.6M; CRE +$22.9M; residential +$7.4M	Continuing de-risking
Capital ratios	Tier 1 11.81% (Q4), 12.10% (Q1)	Tier 1 12.66%; TBVPS up	Strengthening
Operating efficiency	Efficiency ratio improved (ex-securities loss) in Q4/Q1	Efficiency ratio 74.13% despite higher OpEx	Improving

Management Commentary

“We’re very pleased with our performance through the first half of 2025, as net income more than doubled to $5.0 million… our net interest margin expanded to 3.88%, and our return on average equity improved to 8.04%… non-performing assets declining 30%… Tier 1 capital ratio at 12.66% and tangible book value per share rising to $11.40” — Michael J. Quinn, President & CEO .
“We’re very pleased with our first quarter results… positive impact of the balance sheet restructuring… spread up from 2.19% to 3.13%, NIM increased from 2.90% to 3.79%… foundation for continued growth” — Michael J. Quinn .
“We restructured our balance sheet by selling a substantial portion of our available-for-sale securities… reinvested into higher-yielding and shorter duration assets… already begun contributing to an improvement in our net interest margin” — Michael J. Quinn (Q4 release) .

Q&A Highlights

No earnings call transcript or Q&A content was available for Q2 2025. We searched company filings and investor relations and did not find a call transcript for the period .

Estimates Context

S&P Global consensus coverage appears limited; we did not find a Q2 2025 EPS consensus or number of estimates for RBKB via S&P Global. Revenue consensus was not presented; comparison to Street estimates is therefore unavailable for this quarter. Values retrieved from S&P Global.*

Metric vs Estimates (Q2 2025)	Consensus	Actual
EPS ($)	N/A*	$0.25
Revenue ($USD)	N/A*	$16.755M (Total interest & dividend income)

*Values retrieved from S&P Global.

Key Takeaways for Investors

Margin tailwind intact: NIM reached 3.97% with 100 bps spread improvement YoY; continued benefit from late-2024 balance sheet repositioning should support near-term earnings momentum .
Quality up, risk down: Credit provision flipped to a credit; net charge-offs dropped sharply; NPL/NPAs declined; indirect auto exposure reduced materially while CRE and residential grew — positive for risk-adjusted returns .
Funding mix improved: Deposits +$50M QoQ (mostly interest-bearing); FHLB advances reduced by ~$43M; uninsured deposits stable at ~28% — lowers funding risk and enhances NIM durability .
Cost vigilance needed: Broad-based OpEx increases (commissions, retail, marketing) could cap operating leverage; monitor trajectory of expense growth vs. NII expansion .
Capital and TBVPS rising: Tier 1 capital 12.66% and TBVPS $11.40 provide cushion and optionality; equity up $7.1M QoQ on earnings and AOCI recovery .
Near-term trading lens: Positive narrative on margins/credit/deposits is supportive; watch sustainability of asset yield advantage and competitive deposit pricing pressures given higher marketing spend .
Medium-term thesis: If restructuring benefits persist and loan mix continues de-risking, RBKB can compound ROE and TBVPS from a stronger capital base; Street coverage is thin, suggesting potential for underappreciated improvements .

Additional Relevant Q2 2025 Press Releases

Board retirement: Rhinebeck Bank announced the retirement of Frederick Battenfeld from the Board on June 11, 2025 .
Q2 earnings press release (company website copy): July 24, 2025 .
Investor Relations press release index (for verification): .

Prior Two Quarters for Trend Analysis

Q1 2025: Net income $2.3M ($0.21 diluted EPS); NIM 3.79%; ROA 0.73%; ROE 7.49%; deposits +$13.5M QoQ; FHLB advances down $15.9M; NPAs down to $3.5M .
Q4 2024: Net loss $(2.654)M due to $4.0M securities loss; NIM 3.61% with clear improvement vs prior year; deposits $1.021B; FHLB advances $69.8M; TBVPS $10.75 .

Non-GAAP notes: Efficiency ratio is presented excluding securities losses in Q4 2024 and Q1 2025; “tangible book value per common share” is non-GAAP with reconciliations provided in releases .

Rhinebeck Bancorp, Inc. (RBKB)·Q2 2025 Earnings Summary