Rhinebeck Bancorp, Inc.

Table of Contents

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2025

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File No. 001-38779

Rhinebeck Bancorp, Inc.

(Exact name of registrant as specified in its charter)


Maryland		83-2117268
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

2 Jefferson Plaza, Poughkeepsie, New York		12601
(Address of Principal Executive Offices)		(Zip Code)

(845) 454-8555

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	RBKB	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)


Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of May 1, 2025, there were 11,098,404 shares of the Registrant’s common stock, par value $0.01 per share, outstanding.

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TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1

	Consolidated Statements of Financial Condition at March 31, 2025 and December 31, 2024	1

	Consolidated Statements of Income for the Three Months Ended March 31, 2025 and 2024	2

	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2025 and 2024	3

	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024	4

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46

Item 4.	Controls and Procedures	46

PART II. OTHER INFORMATION		47

Item 1.	Legal Proceedings	47

Item 1A.	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	47

Item 3.	Defaults Upon Senior Securities	47

Item 4.	Mine Safety Disclosures	47

Item 5.	Other Information	47

Item 6.	Exhibits	48

	SIGNATURES	49

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PART I — FINANCIAL INFORMATION

ITEM 1.

Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Financial Condition (Unaudited)

(In thousands, except share and per share data)


	March 31,		December 31,
	2025		2024
Assets
Cash and due from banks	$	23,194	$	18,561
Federal funds sold		26,759		18,309
Interest bearing depository accounts		564		614
Total cash and cash equivalents		50,517		37,484

Available for sale securities (at fair value)		144,872		159,947
Loans receivable (net of allowance for credit losses of $8,406 and $8,539, respectively)		976,502		971,779
Federal Home Loan Bank stock		3,245		3,960
Accrued interest receivable		4,632		4,435
Cash surrender value of life insurance		30,381		30,193
Deferred tax assets (net of valuation allowance of $1,211 and $1,336, respectively)		7,201		8,114
Premises and equipment, net		13,903		14,105
Goodwill		2,235		2,235
Intangible assets, net		146		166
Other assets		22,290		23,347
Total assets	$	1,255,924	$	1,255,765
Liabilities and Stockholders’ Equity
Liabilities
Deposits
Non-interest bearing	$	237,952	$	238,126
Interest bearing		796,289		782,657
Total deposits		1,034,241		1,020,783

Mortgagors’ escrow accounts		7,626		9,425
Advances from the Federal Home Loan Bank		53,873		69,773
Subordinated debt		5,155		5,155
Accrued expenses and other liabilities		29,054		28,796
Total liabilities		1,129,949		1,133,932

Stockholders’ Equity
Preferred stock (par value $0.01 per share; 5,000,000 authorized, no shares issued)		—		—
Common stock (par value $0.01; authorized 25,000,000; issued and outstanding 11,094,828 at March 31, 2025 and December 31, 2024)		111		111
Additional paid-in capital		45,955		45,946
Unearned common stock held by the employee stock ownership plan		(3,000)		(3,055)
Retained earnings		94,054		91,766
Accumulated other comprehensive loss:
Net unrealized loss on available for sale securities, net of taxes		(8,690)		(10,480)
Defined benefit pension plan, net of taxes		(2,455)		(2,455)
Total accumulated other comprehensive loss		(11,145)		(12,935)
Total stockholders’ equity		125,975		121,833
Total liabilities and stockholders’ equity	$	1,255,924	$	1,255,765

See accompanying notes to consolidated financial statements

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Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Income (Unaudited)

(In thousands, except share and per share data)


	Three Months Ended March 31,
	2025		2024
Interest and Dividend Income
Interest and fees on loans	$	15,008	$	14,297
Interest and dividends on securities		1,351		1,037
Other income		279		217
Total interest and dividend income		16,638		15,551
Interest Expense
Interest expense on deposits		4,762		5,134
Interest expense on borrowings		839		1,605
Total interest expense		5,601		6,739
Net interest income		11,037		8,812
Provision for Credit Losses		353		83
Net interest income after provision for credit losses		10,684		8,729
Non-interest Income
Service charges on deposit accounts		773		743
Net gain on sales of loans		38		46
Increase in cash surrender value of life insurance		188		184
Net gain from sale of other real estate owned		—		4
Net loss on disposal of premises and equipment		—		(18)
Investment advisory income		336		381
Other		416		250
Total non-interest income		1,751		1,590
Non-interest Expense
Salaries and employee benefits		5,134		4,992
Occupancy		1,071		1,053
Data processing		525		495
Professional fees		477		414
Marketing		200		121
FDIC deposit insurance and other insurance		297		253
Amortization of intangible assets		20		21
Other		1,784		1,528
Total non-interest expense		9,508		8,877
Net income before income taxes		2,927		1,442
Net Provision for Income Taxes		639		321
Net income	$	2,288	$	1,121

Earnings per common share:
Basic	$	0.21	$	0.10
Diluted	$	0.21	$	0.10

Weighted average shares outstanding, basic		10,777,044		10,748,006
Weighted average shares outstanding, diluted		10,923,364		10,844,287

See accompanying notes to consolidated financial statements

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Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands, except share and per share data)


	Three Months Ended March 31,
	2025		2024
Net Income	$	2,288	$	1,121
Other Comprehensive Income
Unrealized holding gains (losses) arising during the period		2,266		(734)
Net unrealized gains (losses) on available for sale securities		2,266		(734)
Tax effect		(476)		154
Unrealized gains (losses) on available for sale securities, net of tax		1,790		(580)
Other comprehensive income (loss):		1,790		(580)
Total Comprehensive Income	$	4,078	$	541

See accompanying notes to consolidated financial statements

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Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(In thousands, except share and per share data)


					Unearned				Accumulated
			Additional		Common				Other
	Common		Paid-in		Stock Held		Retained		Comprehensive
	Stock		Capital		by the ESOP		Earnings		Loss		Total
Balance at December 31, 2023	$	111	$	45,959	$	(3,273)	$	100,386	$	(29,498)	$	113,685

Net income		—		—		—		1,121		—		1,121
Other comprehensive loss		—		—		—		—		(580)		(580)
ESOP shares committed to be allocated		—		(8)		54		—		—		46
Balance at March 31, 2024	$	111	$	45,951	$	(3,219)	$	101,507	$	(30,078)	$	114,272


Balance at December 31, 2024	$	111	$	45,946	$	(3,055)	$	91,766	$	(12,935)	$	121,833

Net income		—		—		—		2,288		—		2,288
Other comprehensive income		—		—		—		—		1,790		1,790
ESOP shares committed to be allocated		—		—		55		—		—		55
Share-based compensation expense		—		9		—		—		—		9
Balance at March 31, 2025	$	111	$	45,955	$	(3,000)	$	94,054	$	(11,145)	$	125,975

See accompanying notes to consolidated financial statements

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Rhinebeck Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows (Unaudited)

(In thousands, except share and per share data)


	Three Months Ended March 31,
	2025		2024
Cash Flows from Operating Activities
Net income	$	2,288	$	1,121
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and accretion of premiums and discounts on investments, net		(97)		61
Net realized gain on sale of other real estate owned		—		(4)
Provision for credit losses		353		83
Loans originated for sale		(385)		(1,957)
Proceeds from sale of loans		423		2,017
Net gain on sale of loans		(38)		(46)
Amortization of intangible assets		20		21
Depreciation and amortization		318		344
Net loss from disposal of premises and equipment		—		18
Deferred income tax benefit		437		20
Increase in cash surrender value of insurance		(188)		(184)
Net (increase) decrease in accrued interest receivable		(197)		5
Expense of earned ESOP shares		55		46
Share-based compensation expense		9		—
Net decrease (increase) in other assets		1,057		(5,492)
Net increase in accrued expenses and other liabilities		258		447
Net cash provided by (used in) operating activities		4,313		(3,500)
Cash Flows from Investing Activities
Proceeds from maturities and principal repayments of securities		18,069		8,545
Purchases of securities		(631)		—
Net purchases of FHLB Stock		715		900
Net (increase) decrease in loans		(5,076)		15,408
Purchases of bank premises and equipment		(116)		(244)
Proceeds from disposal of premises and equipment		—		2,857
Proceeds from sale of other real estate owned		—		29
Net cash provided by investing activities		12,961		27,495
Cash Flows from Financing Activities
Net increase (decrease) in demand deposits, NOW, money market and savings accounts		21,745		(8,403)
Net (decrease) increase in time deposits		(8,287)		14,924
Net decrease in mortgagors' escrow accounts		(1,799)		(1,973)
Net decrease in short-term debt		(15,900)		(20,000)
Net cash used in financing activities		(4,241)		(15,452)
Net increase in cash and cash equivalents		13,033		8,543
Cash and Cash Equivalents
Beginning balance		37,484		22,129
Ending balance	$	50,517	$	30,672
Supplemental Disclosures of Cash Flow Information
Cash paid for:
Interest	$	5,743	$	6,547
Income taxes	$	105	$	108

See accompanying notes to consolidated financial statements

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

1. Nature of Business and Significant Accounting Policies

The financial statements include the accounts of Rhinebeck Bancorp, Inc. (the “Company”), a stock holding company, and its wholly-owned subsidiary, Rhinebeck Bank (the “Bank”), a New York chartered stock savings bank. The primary purpose of the Company is to act as a holding company for the Bank. The Bank provides a full range of banking and financial services to consumer and commercial customers through its thirteen branches and two representative offices located in Dutchess, Ulster, Orange, and Albany counties. Financial services, including investment advisory and financial product sales, are offered through a division of the Bank doing business as Rhinebeck Asset Management.

The unaudited consolidated financial statements reflect all adjustments, which in the opinion of management are necessary for a fair presentation of the results of the interim periods and are of a normal and recurring nature. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or for any other period.

The unaudited financial statements and other financial information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements, and related notes, of the Company at and for the year ended December 31, 2024 contained in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 25, 2025 (the “Annual Report on Form 10-K”).

For more information regarding the Company’s significant accounting policies, see the Notes to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K. As of March 31, 2025, the critical accounting policies of the Company have not changed materially from those disclosed in the Annual Report on Form 10-K. See Note 1 of the Consolidated Financial Statements– Nature of Business and Significant Accounting Policies.

Basis of Financial Statements Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the consolidated statements of financial condition and reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses (“ACL”), the evaluation of goodwill for impairment and the valuation of deferred tax assets.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain amounts in the prior year consolidated financial statements may be reclassified as required to conform to the current year’s presentation. These reclassifications have no effect on our previously reported net income or shareholders’ equity. From and after January 1, 2025, the Company reclassified swap income in its consolidated financial statements. In the consolidated statements of income as of March 31, 2024, $84 previously included in “Interest and Fees on Loans” was reclassified to “Other non-interest income.” These amounts were reclassified to conform to the current year’s presentation.

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

Impact of Recent Accounting Pronouncements

In October 2023, the FASB issued ASU 2023-06, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. In annual periods, this requires disclosure of an entity’s accounting policy related to the entity’s presentation of cash flows associated with derivative instruments and the related gains and losses in the statement of cash flows. This also requires disclosure of the methods used in the diluted earnings per share computation for each dilutive security and clarifies that certain disclosures should be made during interim periods. The effective dates of ASU 2023-06 will be the date on which the SEC’s removal of that related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is evaluating the impact of this ASU but does not expect it to have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740), Improvements to Income Tax Disclosures.” The amendments in ASU 2023-09 require greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. The ASU indicates that all entities will apply its guidance prospectively with an option for retroactive application to each period in the financial statements. The guidance will be effective for fiscal years beginning after December 15, 2024, and for interim periods for fiscal years beginning after December 15, 2025, with an allowance for early adoption. The Company is evaluating the impact of this ASU but does not expect it to have a material impact on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures”, which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The ASU requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense captions. The guidance will be effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Upon adoption, ASU 2024-03 may be applied prospectively or retrospectively. The Company is evaluating the impact of this ASU but does not expect it to have a material impact on the Company’s consolidated financial statements.

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

2. Investment Securities

The amortized cost, gross unrealized gains and losses and fair values of available for sale securities are as follows:


	March 31, 2025
			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury securities	$	14,972	$	59	$	(93)	$	14,938
U.S. government agency mortgage-backed securities–residential		101,481		10		(8,822)		92,669
U.S. government agency securities		22,006		—		(605)		21,401
Municipal securities⁽¹⁾		2,716		—		(194)		2,522
Corporate bonds		14,054		—		(1,232)		12,822
Other		642		—		(122)		520
Total	$	155,871	$	69	$	(11,068)	$	144,872


	December 31, 2024
			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury securities	$	29,841	$	6	$	(154)	$	29,693
U.S. government agency mortgage-backed securities–residential		103,948		—		(10,456)		93,492
U.S. government agency securities		22,010		—		(844)		21,166
Municipal securities⁽¹⁾		2,717		—		(224)		2,493
Corporate bonds		14,054		—		(1,471)		12,583
Other		642		—		(122)		520
Total	$	173,212	$	6	$	(13,271)	$	159,947

⁽¹⁾	The issuers of municipal securities are all within New York State.

The following tables present the fair value and unrealized losses of the Company’s available for sale securities with gross unrealized losses aggregated by the length of time the individual securities have been in a continuous unrealized

loss position:


	March 31, 2025
	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Treasury securities	$	5,010	$	(9)	$	4,914	$	(84)	$	9,924	$	(93)
U.S. government agency mortgage-backed securities-residential		39,800		(528)		48,330		(8,294)		88,130		(8,822)
U.S. government agency securities		—		—		21,401		(605)		21,401		(605)
Municipal securities		—		—		2,423		(194)		2,423		(194)
Corporate bonds		—		—		12,822		(1,232)		12,822		(1,232)
Other		—		—		497		(122)		497		(122)
Total	$	44,810	$	(537)	$	90,387	$	(10,531)	$	135,197	$	(11,068)

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)


	December 31, 2024
	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Treasury securities	$	9,957	$	(22)	$	4,866	$	(132)	$	14,823	$	(154)
U.S. government agency mortgage-backed securities-residential		44,577		(1,074)		48,915		(9,382)		93,492		(10,456)
U.S. government agency securities		—		—		21,166		(844)		21,166		(844)
Municipal securities		—		—		2,493		(224)		2,493		(224)
Corporate bonds		—		—		12,583		(1,471)		12,583		(1,471)
Other		—		—		497		(122)		497		(122)
Total	$	54,534	$	(1,096)	$	90,520	$	(12,175)	$	145,054	$	(13,271)

At March 31, 2025, the Company had 170 individual available for sale securities in an unrealized loss position with unrealized losses totaling $11,068 with an aggregate depreciation of 7.10% from the Company’s amortized cost.

The Company evaluates securities in an unrealized loss position for impairment related to credit losses on at least a quarterly basis. Securities in unrealized loss positions are first assessed as to whether we intend to sell, or if it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If one of the criteria is met, the security’s amortized cost basis is written down to fair value through current earnings. For securities that do not meet these criteria, the Company evaluates whether the decline in fair value resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Unrealized losses on asset-backed securities, state and municipal securities, and corporate bonds have not been recognized into income because the issuers are of high credit quality, we do not intend to sell and it is likely that we will not be required to sell the securities prior to their anticipated recovery. The decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the securities. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available for sale securities was recorded as of March 31, 2025.

Federal agency obligations, residential mortgage-backed pass-through securities and commercial mortgage-backed pass-through securities are issued by U.S. Government agencies and U.S. Government sponsored enterprises. Although a government guarantee exists on these investments, these entities are not legally backed by the full faith and credit of the federal government. Nonetheless, at this time we do not foresee any set of circumstances in which the government would not fund its commitments on these investments.

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

The amortized cost and fair value of available for sale debt securities at March 31, 2025 and December 31, 2024, by contractual maturities, are presented below. Actual maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the securities may be called or repaid without any penalties. Because mortgage-backed securities are not due at a single maturity date, they are not included in the maturity categories in the following maturity summary:


	March 31, 2025				December 31, 2024
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturity:
Within 1 year	$	20,518	$	20,282	$	34,394	$	34,056
After 1 but within 5 years		19,903		19,392		20,901		20,113
After 5 but within 10 years		13,327		12,009		13,327		11,766
After 10 years		—		—		—		—
Total Maturities		53,748		51,683		68,622		65,935
Mortgage-backed securities		101,481		92,669		103,948		93,492
Other		642		520		642		520
Total	$	155,871	$	144,872	$	173,212	$	159,947

At March 31, 2025 and December 31, 2024, available for sale securities with a carrying value of $91,301 and $101,395, respectively, were pledged to secure Federal Home Loan Bank of New York (“FHLB”) borrowings. In addition, at March 31, 2025 and December 31, 2024, $942 and $937 of available for sale securities were pledged to secure borrowings at the Federal Reserve Bank of New York (“FRB”), respectively.

During the three months ended March 31, 2025, there were no sales of available for sale securities and no realized gains or losses.

The Company elected not to measure an allowance for credit losses for accrued interest receivable, because a timely write-off policy exists. A security is placed on non-accrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a security placed on non-accrual status is reversed against interest income. There were no securities on non-accrual status and therefore there was no accrued interest related to securities reversed against interest income for the periods ended March 31, 2025 or December 31, 2024. Total accrued interest receivable on available for sale securities totaled $648 and $498 at March 31, 2025 and December 31, 2024, respectively, and was reported in accrued interest receivable on the consolidated statements of financial condition of this Form 10-Q.

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

3. Loans and Allowance for Credit Losses

A summary of the Company’s loan portfolio is as follows:


	March 31,		December 31,
	2025		2024
Commercial real estate loans:
Construction	$	24,618	$	26,611
Non-residential		367,522		350,962
Multi-family		108,373		105,030
Residential real estate loans		90,982		86,651
Commercial and industrial loans		91,957		91,517
Consumer loans:
Indirect automobile		277,922		295,669
Home equity		11,782		11,656
Other consumer		6,746		6,830
Total gross loans		979,902		974,926
Dealer reserves		5,006		5,392
Allowance for credit losses		(8,406)		(8,539)
Total net loans	$	976,502	$	971,779

There were no unpaid principal balances of loans held for sale, which would have been included in the residential real estate category above, at either March 31, 2025 or December 31, 2024.

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans:


	March 31, 2025
							Greater Than
			30-59 Days		60-89 Days		90 Days Past		Total Loans
	Current		Past Due		Past Due		Due		Receivable		Non-accrual
Commercial real estate:
Construction	$	24,618	$	—	$	—	$	—	$	24,618	$	—
Non-residential		365,714		122		—		1,686		367,522		1,687
Multifamily		108,354		—		19		—		108,373		—
Residential real estate		89,492		1,438		—		52		90,982		1,004
Commercial and industrial		91,233		475		102		147		91,957		147
Consumer:
Indirect automobile		268,793		7,338		1,163		628		277,922		645
Home equity		11,627		126		—		29		11,782		29
Other consumer		6,518		196		32		—		6,746		—
Total	$	966,349	$	9,695	$	1,316	$	2,542	$	979,902	$	3,512

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)


	December 31, 2024
							Greater Than
			30-59 Days		60-89 Days		90 Days Past		Total Loans
	Current		Past Due		Past Due		Due		Receivable		Non-accrual
Commercial real estate:
Construction	$	26,611	$	—	$	—	$	—	$	26,611	$	—
Non-residential		348,220		873		—		1,869		350,962		1,869
Multifamily		105,008		22		—		—		105,030		—
Residential real estate		85,961		604		—		86		86,651		1,182
Commercial and industrial		91,090		57		159		211		91,517		319
Consumer:
Indirect automobile		283,458		10,062		1,593		556		295,669		590
Home equity		11,173		153		156		174		11,656		174
Other consumer		6,689		121		20		—		6,830		—
Total	$	958,210	$	11,892	$	1,928	$	2,896	$	974,926	$	4,134

All of our non-accrual loans are individually analyzed for credit loss. The Company has one individually analyzed home equity loan of $98 that was accruing interest at March 31, 2025.

The following table presents the Company’s amortized cost basis of non-accrual loans for which there is no related ACL:


	March 31, 2025		December 31, 2024
Commercial real estate:
Non-residential	$	1,686	$	1,869
Residential real estate		1,004		1,182
Commercial and industrial		126		299
Consumer:
Indirect automobile		131		131
Home equity		29		174
Total	$	2,976	$	3,655

The following table presents the Company’s amortized cost basis of only those non-accrual loans with a related ACL:


	March 31, 2025				December 31, 2024
	Non-accrual loans		Related ACL		Non-accrual loans		Related ACL
Commercial real estate:
Non-residential	$	1	$	1	$	—	$	—
Commercial and industrial		21		19		20		20
Consumer:
Indirect automobile		514		164		459		139
Total	$	536	$	184	$	479	$	159

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

During the three months ended March 31, 2025, $19 in accrued interest was reversed for non-accrual loans. Total accrued interest receivable associated with loans totaled $3,985 and $3,937 at March 31, 2025 and December 31, 2024, respectively, and was reported in accrued interest receivable on the consolidated statements of financial condition.

The Company has transferred a portion of its originated commercial real estate loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying statements of financial condition. The Company and participating lenders share ratably in any gains or losses that may result from a loan’s performance under its contractual terms. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At March 31, 2025 and December 31, 2024, the Company was servicing loans for participants aggregating $50,634 and $54,390, respectively.

Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $0 and $37 at March 31, 2025 and December 31, 2024, respectively, and are all individually analyzed for credit loss.

The Company services certain loans that it has sold to third parties. The aggregate balances of loans serviced for others were $261,419 and $266,547 as of March 31, 2025 and December 31, 2024, respectively. Included in these are loans serviced for the Federal Home Loan Mortgage Corporation with recourse provisions, whereby the Company is obligated to bear all costs when a default, including foreclosure, occurs. At March 31, 2025 and December 31, 2024, the maximum contingent liability associated with loans sold with recourse was $0 and $805, respectively, which is not recorded in the consolidated financial statements. Losses are borne in priority order by the borrower, private mortgage insurance and the Company. The Company has never repurchased any loans or incurred any losses under these recourse provisions.

The balances of capitalized servicing rights included in other assets at March 31, 2025 and December 31, 2024 were $1,503 and $1,592, respectively. Fair value exceeds carrying value, and thus, no impairment charges related to servicing rights were recognized during the three months ended March 31, 2025 or the year ended December 31, 2024.

Activity in the Company’s ACL for loans for the three months ended March 31, 2025 is summarized in the table below.


	Commercial				Commercial
	Real Estate		Residential		and Industrial		Indirect		Consumer		Totals

	Three months ended March 31, 2025
Allowance for credit losses:
Beginning balance	$	2,988	$	575	$	684	$	4,133	$	159	$	8,539
Provision for (reversal of) credit losses		61		37		161		136		(18)		377
Loans charged-off		—		—		(175)		(784)		—		(959)
Recoveries		—		—		3		426		20		449
Ending balance	$	3,049	$	612	$	673	$	3,911	$	161	$	8,406

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

Activity in the Company’s ACL for loans for the three months ended March 31, 2024 is summarized in the tables below.


	Commercial		Residential		Commercial
	Real Estate		Real Estate		and Industrial			Indirect	Consumer		Totals

	Three months ended March 31, 2024
Allowance for credit losses:
Beginning balance	$	2,716	$	346	$	606	$	4,348	$	108	$	8,124
Provision for (reversal of) credit losses		323		9		(7)		(238)		12		99
Loans charged-off		—		—		(34)		(895)		(32)		(961)
Recoveries		—		—		1		699		11		711
Ending balance	$	3,039	$	355	$	566	$	3,914	$	99	$	7,973

The Company has also recorded an ACL for unfunded commitments, which was recorded in other liabilities. The provision for unfunded commitments is recorded within the provision for credit losses on the Company’s income statement. Activity in the Company’s ACL for unfunded commitments for the three months ended March 31, 2025 and 2024 is summarized in the tables below.


	Commercial				Commercial
	Real Estate		Residential		and Industrial		Indirect		Consumer		Totals

	Three months ended March 31, 2025
Allowance for credit losses:
Beginning balance	$	119	$	1	$	104	$	—	$	20	$	244
(Reversal of) provision for credit losses		(27)		4		(1)		—		—		(24)
Ending balance	$	92	$	5	$	103	$	—	$	20	$	220


	Commercial				Commercial
	Real Estate		Residential		and Industrial		Indirect		Consumer		Totals

	Three months ended March 31, 2024
Allowance for credit losses:
Beginning balance	$	172	$	—	$	72	$	—	$	13	$	257
Reversal of credit losses		(14)		—		(1)		—		(1)		(16)
Ending balance	$	158	$	—	$	71	$	—	$	12	$	241

The following table summarizes the provision for credit losses for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024
Provision for credit losses - loans	$	377	$	99
Reversal of credit losses - unfunded commitments		(24)		(16)
Provision for credit losses	$	353	$	83

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

In the normal course of business, the Company grants loans to officers, directors and other related parties. Balances and activity of such loans during the periods presented were not material.

On an annual basis, or more often if needed, the Company formally reviews the ratings on all commercial real estate, multifamily, construction and commercial loans. To assist in the review process, the Company engages an independent third-party to review a significant portion of loans within these segments. Consumer loans are rated as performing or non-performing based on payment status in accordance with regulatory retail credit guidance. Management uses the results of these reviews as part of its annual review process. In addition, management utilizes delinquency reports, the watch list and other loan reports to monitor credit quality of other loan segments.

Credit Quality Indicators. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on all loans at origination and is updated on a quarterly basis for loans risk rated Watch, Special Mention, Substandard, or Doubtful.

The Company uses the following definitions for risk ratings:

Watch – Loans classified as watch exhibit weaknesses that require more than usual monitoring. Issues may include deteriorating financial condition, payments made after due date but within 30 days, adverse industry conditions or management problems.

Special Mention – Loans classified as special mention exhibit signs of further deterioration but still generally make payments within 30 days. This is a transitional rating and loans should typically not be rated Special Mention for more than 12 months.

Substandard – Loans classified as substandard possess weaknesses that jeopardize the ultimate collection of the principal and interest outstanding. These loans exhibit continued financial losses, ongoing delinquency, overall poor financial condition, and/or insufficient collateral. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as non-performing have all the weaknesses of substandard loans, and have deteriorated to the level that there is a high probability of substantial loss.

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered Pass rated loans.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

The following table presents the credit risk profile of the Company’s loan portfolio (excluding loans in process) based on rating category, as well as gross write-offs for the three months ended March 31, 2025, and by fiscal year of origination as of March 31, 2025.


													Revolving
	Loans by Origination Year												Loans
	2024		2023		2022		2021		2020		Prior		Amortized Cost		Total
Commercial construction
Pass	$	-	$	-	$	-	$	-	$	-	$	200	$	-	$	200
Watch	$	-	$	9,418	$	15,000	$	-	$	-	$	-	$	-	$	24,418
Total commercial construction		-		9,418		15,000		-		-		200		-		24,618

Commercial non-residential
Pass	$	83,338	$	45,513	$	36,718	$	37,183	$	26,800	$	24,789	$	-	$	254,341
Watch		41,688		8,485		18,282		19,980		7,298		932		-		96,665
Special mention		6,017		-		-		2,988		861		-		-		9,866
Substandard		3,838		-		-		2,812		-		-		-		6,650
Total commercial non-residential		134,881		53,998		55,000		62,963		34,959		25,721		-		367,522

Multifamily
Pass	$	7,263	$	745	$	1,391	$	18,305	$	34,383	$	4,106	$	-	$	66,193
Watch		9,696		5,666		10,229		10,960		5,629		-		-		42,180
Total multifamily		16,959		6,411		11,620		29,265		40,012		4,106		-		108,373

Residential
Performing	$	16,889	$	15,437	$	26,565	$	23,385	$	2,002	$	5,700	$	-	$	89,978
Non-performing		1,004		-		-		-		-		-		-		1,004
Total residential		17,893		15,437		26,565		23,385		2,002		5,700		-		90,982

Commercial and industrial
Pass	$	1,478	$	12,116	$	9,133	$	16,645	$	7,172	$	1,184	$	18,692	$	66,420
Watch		1,292		2,921		707		5,432		211		2,638		11,192		24,393
Special mention		97		-		-		496		129		-		250		972
Substandard		95		-		-		-		38		-		39		172
Doubtful		-		-		-		-		-		-		-		-
Total commercial and industrial		2,962		15,037		9,840		22,573		7,550		3,822		30,173		91,957
Current-period gross write-offs		10		-		-		-		-		165		-		175

Indirect automobile
Performing	$	15,718	$	50,478	$	65,612	$	92,181	$	35,933	$	17,355	$	-	$	277,277
Non-performing		78		106		132		168		161		-		-		645
Total indirect automobile		15,796		50,584		65,744		92,349		36,094		17,355		-		277,922
Current-period gross write-offs		109		149		260		203		45		18		-		784

Home equity
Performing	$	3,557	$	339	$	-	$	-	$	-	$	87	$	7,770	$	11,753
Non-performing		29		-		-		-		-		-		-		29
Total home equity		3,586		339		-		-		-		87		7,770		11,782

Other consumer
Performing	$	212	$	2,264	$	1,529	$	1,574	$	315	$	629	$	223	$	6,746
Total other consumer		212		2,264		1,529		1,574		315		629		223		6,746
Current-period gross write-offs		-		-		-		-		-		-		-		-

Total Loans
Pass/performing	$	128,455	$	126,892	$	140,948	$	189,273	$	106,605	$	54,050	$	26,685	$	772,908
Watch		52,676		26,490		44,218		36,372		13,138		3,570		11,192		187,656
Special mention		6,114		-		0		3,484		990		0		250		10,838
Substandard		3,933		-		-		2,812		38		0		39		6,822
Non-performing		1,111		106		132		168		161		0		-		1,678
Total Loans	$	192,289	$	153,488	$	185,298	$	232,109	$	120,932	$	57,620	$	38,166	$	979,902
Total Current-period gross write-offs	$	119	$	149	$	260	$	203	$	45	$	183	$	-	$	959

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

The following table presents the credit risk profile of the Company’s loan portfolio (excluding loans in process) based on rating category, as well as gross write-offs for the year ended December 31, 2024, and by fiscal year of origination as of December 31, 2024.


													Revolving
	Loans by Origination Year												Loans
	2024		2023		2022		2021		2020		Prior		Amortized Cost		Total
Commercial construction
Watch	$	6,509	$	17,261	$	2,841	$	-	$	-	$	-	$	-	$	26,611
Total commercial construction		6,509		17,261		2,841		-		-		-		-		26,611

Commercial non-residential
Pass	$	46,429	$	36,900	$	47,082	$	27,329	$	16,104	$	69,260	$	-	$	243,104
Watch		8,515		14,336		16,201		7,341		10,952		33,799		-		91,144
Special mention		-		-		3,009		873		322		5,745		-		9,949
Substandard		-		-		2,834		-		-		3,931		-		6,765
Total commercial non-residential		54,944		51,236		69,126		35,543		27,378		112,735		-		350,962
Current-period gross write-offs		-		-		-		-		-		291		-		291

Multifamily
Pass	$	-	$	1,398	$	18,410	$	28,939	$	2,034	$	5,296	$	-	$	56,077
Watch		5,673		10,235		11,027		11,863		-		10,155		-		48,953
Total multifamily		5,673		11,633		29,437		40,802		2,034		15,451		-		105,030

Residential
Performing	$	15,456	$	26,755	$	23,922	$	2,032	$	2,638	$	14,666	$	-	$	85,469
Non-performing		-		-		-		-		-		1,182		-		1,182
Total residential		15,456		26,755		23,922		2,032		2,638		15,848		-		86,651

Commercial and industrial
Pass	$	13,386	$	9,810	$	19,044	$	7,944	$	650	$	957	$	17,303	$	69,094
Watch		3,269		745		5,667		191		365		1,081		10,004		21,322
Special mention		-		-		506		191		98		6		-		801
Substandard		-		-		-		-		-		103		38		141
Doubtful		-		-		-		-		-		159		-		159
Total commercial and industrial		16,655		10,555		25,217		8,326		1,113		2,306		27,345		91,517
Current-period gross write-offs		-		40		-		7		-		561		-		608

Indirect automobile
Performing	$	54,048	$	72,083	$	104,879	$	42,286	$	15,440	$	6,343	$	-	$	295,079
Non-performing		46		78		182		187		62		35		-		590
Total indirect automobile		54,094		72,161		105,061		42,473		15,502		6,378		-		295,669
Current-period gross write-offs		171		812		1,533		665		256		189		-		3,626

Home equity
Performing	$	341	$	-	$	-	$	-	$	-	$	3,684	$	7,457	$	11,482
Non-performing		-		-		-		-		-		174		-		174
Total home equity		341		-		-		-		-		3,858		7,457		11,656

Other consumer
Performing	$	2,581	$	1,703	$	1,829	$	400	$	89	$	11	$	217	$	6,830
Total other consumer		2,581		1,703		1,829		400		89		11		217		6,830
Current-period gross write-offs		12		82		73		6		24		4		-		201

Total Loans
Pass/performing	$	132,241	$	148,649	$	215,166	$	108,930	$	36,955	$	100,217	$	24,977	$	767,135
Watch		23,966		42,577		35,736		19,395		11,317		45,035		10,004		188,030
Special mention		0		-		3,515		1,064		420		5,751		-		10,750
Substandard		-		-		2,834		-		0		4,034		38		6,906
Doubtful		-		-		-		-		-		159		-		159
Non-performing		46		78		182		187		62		1,391		-		1,946
Total Loans	$	156,253	$	191,304	$	257,433	$	129,576	$	48,754	$	156,587	$	35,019	$	974,926
Total Current-period gross write-offs	$	183	$	934	$	1,606	$	678	$	280	$	1,045	$	-	$	4,726

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

4. Goodwill and Intangible Assets

The Company evaluates goodwill annually in the fourth quarter of the fiscal year or more often if events occur or circumstances change that indicate an impairment may exist. Management has determined that no write-down was required for the first three months of 2025 or 2024.

The changes in the carrying value of the customer list and core deposit intangibles, net of accumulated amortization and impairment, are as follows:


	Three months ended March 31, 2025
	2025		2024
Beginning balance	$	166	$	246
Amortization		(20)		(21)

Ending balance	$	146	$	225

Core deposit intangibles represent the estimated fair value of acquired customer deposit relationships on the date of acquisition and are amortized over their estimated useful lives. Purchased customer accounts primarily consist of records and files that contain information about investment holdings. The values assigned to customer lists and core deposit intangibles are based upon the application of the income approach. The Company recognized $20 and $21 of amortization expense related to its intangible assets for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the future amortization expense for amortizable intangible assets for the years ended December 31, was as follows:


2025	$	40
2026		29
2027		21
2028		16
2029		13
Thereafter		27
Total	$	146

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

5. Deposits

Deposits balances are summarized as follows:


	March 31,		December 31,
	2025		2024
Non-interest bearing demand deposits	$	237,952	$	238,126
Interest bearing accounts:
NOW⁽¹⁾		117,616		123,466
Savings		135,303		132,648
Money market		214,018		188,904
Time certificates of deposit		329,352		337,639
Total interest bearing accounts		796,289		782,657
Total deposits	$	1,034,241	$	1,020,783

(1)

Negotiable order of withdrawal

The Company participates in a reciprocal deposit program with other financial institutions that provides access to Federal Deposit Insurance Corporation (“FDIC”) insurance for deposit products with aggregate amounts exceeding the current limits for depositors. At March 31, 2025 and December 31, 2024, total reciprocal deposits were $33,601 and $38,909, respectively. Included in time certificates of deposit at March 31, 2025 and December 31, 2024 were reciprocal deposits totaling $18,907 and $25,427, respectively, with original maturities of one to three years. Reciprocal deposits included in money market accounts totaled $14,693 and $13,482 at March 31, 2025 and December 31, 2024, respectively.

The Company had no brokered deposits at either March 31, 2025 or December 31, 2024. Time certificates of deposit in denominations of $250 or greater were $93,813 and $95,591 as of March 31, 2025 and December 31, 2024, respectively.

Contractual maturities of time certificates of deposit at March 31, 2025 are summarized below:


	March 31,
	2025
Within 1 year	$	263,132
1 – 2 years		62,870
2 – 3 years		559
3 – 4 years		1,203
4 – 5 years		1,588
Total	$	329,352

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

6. Long-Term Debt and FHLB Stock

FHLB Borrowings and Stock

The Bank is a member of the FHLB. Borrowings under this line require collateralization through the pledge of specific loans and securities. The Bank has access to a preapproved secured line of credit with the FHLB which was not to exceed $627,847 and $627,265 at March 31, 2025 and December 31, 2024, respectively. At March 31, 2025, the Bank had pledged $482,080 of assets to the FHLB, which resulted in a secured line of credit of $331,939. At March 31, 2025 and December 31, 2024, the Company had outstanding overnight line of credit balances with the FHLB of $24,100 and $0, respectively. The overnight interest rate was 4.56% at March 31, 2025. These borrowings mature the following business day. The Company also had structured borrowings of $29,773. The outstanding principal amounts and the related terms and rates at March 31, 2025 were as follows:


Term	Principal		Maturity	Rate		Due in one year		Long term
Fixed medium-term	$	722	October 31, 2025	4.87	%	$	722	$	—
Fixed medium-term		5,000	November 3, 2025	4.87	%		5,000		—
Fixed medium-term		728	December 5, 2025	4.34	%		728		—
Fixed medium-term		1,233	September 21, 2026	5.20	%		—		1,233
Fixed medium-term		381	November 9, 2026	5.04	%		—		381
Fixed medium-term		969	May 3, 2027	4.99	%		—		969
Fixed medium-term		740	June 21, 2027	4.73	%		—		740
Fixed medium-term		20,000	May 2, 2028	3.88	%		—		20,000
Total	$	29,773	Weighted Average Rate	4.21	%	$	6,450	$	23,323

The Bank is required to maintain an investment in FHLB capital stock, as collateral, in an amount equal to a certain percentage of its outstanding debt. FHLB stock is considered restricted stock and is carried at cost. The Bank evaluates FHLB stock for impairment based on the ultimate recovery ability of the cost. No impairment was recognized at either March 31, 2025 or December 31, 2024.

Subordinated Debt

In addition to the Bank, the Company has one other wholly-owned subsidiary, RSB Capital Trust I (the “Trust”). In 2005, the Trust issued $5,000 of pooled trust preferred securities in a private placement and issued 155 shares of common stock at $1 par value per share, to the Company. The Trust, which has no independent assets or operations, was formed in 2005 for the sole purpose of issuing trust preferred securities and investing the proceeds in an equivalent amount of junior subordinated debentures. The proceeds from the issuance of the trust preferred securities were down-streamed to the Bank and are currently considered Tier 1 capital for purposes of determining the Bank’s capital ratios. The duration of the Trust is 30 years.

The subordinated debt securities of $5,155 are unsecured obligations of the Company and are subordinate and junior in right of payment to all present and future senior indebtedness of the Company. The Company has entered into a guarantee, which together with its obligations under the subordinated debt securities and the declaration of trust governing the Trust, including its obligations to pay costs, expenses, debts and liabilities, provides a full and unconditional guarantee of amounts on the capital securities. The rate on the subordinated debentures, which bear interest at the three-month term Secured Overnight Financing Rate (“SOFR”) plus 2% and a relative spread adjustment of 0.26%, was 6.59% and 7.78% at March 31, 2025 and December 31, 2024, respectively. The subordinated debentures mature on May 23, 2035.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

Other Borrowings

The Bank has an unsecured, uncommitted $10,000 line of credit with Zions Bank. There were no advances outstanding under this line of credit at either March 31, 2025 or December 31, 2024.

The Bank also has an unsecured, uncommitted $50,000 line of credit with Pacific Coast Bankers Bank. There were no advances outstanding under this line of credit at either March 31, 2025 or December 31, 2024.

7. Employee Benefits

Pension Plan

The Bank maintains a noncontributory defined benefit pension plan covering substantially all of its employees 21 years of age or older who had completed at least one year of service as of June 30, 2012, the effective date on which the Board of Directors of the Bank voted to freeze the defined benefit plan.

The following table sets forth the plan’s funded status and amounts recognized in the Company’s consolidated statements of financial condition:


	March 31,		December 31,
	2025		2024
Projected and accumulated benefit obligation	$	(16,807)	$	(16,652)
Plan assets at fair value		18,057		17,916
Funded status included in accrued expenses and other liabilities	$	1,250	$	1,264

The net periodic pension cost and amounts recognized in other expense are as follows:


	Three months ended March 31,
	2025		2024
Interest cost	$	222	$	213
Expected return on plan assets		(245)		(249)
Amortization of unrecognized loss		37		74
Net periodic cost	$	14	$	38

The expected long-term rate of return on plan assets has been determined by applying historical average investment returns from published indexes relating to the current allocation of assets in the plan. Plan assets are invested in pooled separate accounts consisting of underlying investments in nine diversified investment funds.

As of March 31, 2025, the investment funds included five equity funds and three fixed income bond funds, each with its own investment objectives, investment strategies and risks, as detailed in the Company’s investment policy statement. The Company determines the appropriate strategic asset allocation versus plan liabilities, as governed by the investment policy statement.

The assets of the plan are invested under the supervision of the Company’s investment committee in accordance with the investment policy statement. The investment options of the plan are chosen in a manner consistent with generally accepted standards of fiduciary responsibility. The investment performance of the Company’s individual investment managers, with the assistance of the Company’s investment consultant, is monitored on a quarterly basis and is reviewed at least annually relative to the objectives and guidelines as stated in the Company’s investment policy statement.

The Company did not contribute to the plan in the first three months of 2025 or 2024.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

The fair value of the Company’s pension plan assets, by fair value hierarchy, are as follows:


	March 31, 2025
	Level 1		Level 2		Level 3		Total
Assets:
Investment in separate accounts
Fixed income	$	12,662	$	—	$	—	$	12,662
Equity		5,395		—		—		5,395
Total assets at fair value	$	18,057	$	—	$	—	$	18,057


	December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Investment in separate accounts
Fixed income	$	12,489	$	—	$	—	$	12,489
Equity		5,427		—		—		5,427
Total assets at fair value	$	17,916	$	—	$	—	$	17,916

The pooled separate accounts are valued at the net asset per unit, based on either the observable net asset value of the underlying investment or the net asset value of the underlying pool of securities. Net asset value is based on the value of the underlying assets owned by the fund, minus its liabilities and then divided by the number of shares outstanding.

For a detailed disclosure on the Bank’s pension and employee benefits plans, please refer to Note 9 of the Company’s Consolidated Financial Statements for the year ended December 31, 2024 included in the Annual Report on Form 10-K.

Defined Contribution Plan

The Bank sponsors a 401(k) defined contribution plan. Participants are permitted, in accordance with the provisions of Section 401(k) of the Internal Revenue Code, to contribute up to 25% of their earnings (as defined) into the plan with the Bank matching up to 6%, subject to Internal Revenue Service limitations. The Bank’s contributions charged to operations amounted to $280 and $269 for the three months ended March 31, 2025 and 2024, respectively.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

Deferred Compensation Arrangements

Directors’ Plan, (formerly the “Trustees Plan”)

The Bank’s Deferred Compensation Plan for Fees of Directors, as amended and restated effective January 1, 2005 (the “Directors’ Plan”), covers directors who elect to defer receipt of all or a portion of their fees until separation from service. Upon resignation, retirement, or death, the participant’s total deferred compensation, including earnings thereon, will be paid out. At March 31, 2025 and December 31, 2024, total amounts due to participants of $3,885 and $3,804, respectively, were included in accrued expenses and other liabilities. Total expenses related to the Directors’ Plan were $87 and $63 for the three months ended March 31, 2025 and 2024, respectively, which were included in other non-interest expense in the consolidated statements of income.

Executive Long-Term Incentive and Retention Plan

The Bank maintains an Executive Long-Term Incentive and Retention Plan (the “Executive Plan”). Participation in the Executive Plan is limited to officers of the Company designated as participants by the Board of Directors. Under the Executive Plan, the Board of Directors may grant annual incentive awards equal to a percentage of a participant’s base salary at the rate in effect on the last day of the Executive Plan year, as determined by the Board of Directors based on the attainment of criteria established annually by the Board of Directors. Incentive awards under the Executive Plan are credited to the participant’s incentive benefit account as of the last day of the Executive Plan year to which the award relates and earn interest at a rate determined annually by the Board of Directors. Participants vest in their benefit accounts in accordance with the vesting schedule approved by the Board of Directors, which ranges from one to five years of service. At March 31, 2025 and December 31, 2024, $1,699 and $1,653, respectively, was included in accrued expenses and other liabilities, which represents the cumulative amounts deferred and earnings thereon. The Company recognized expenses of $190 and $60 for the three months ended March 31, 2025 and 2024, respectively, related to this plan, which are included in salaries and employee benefits expense and other non-interest expense in the consolidated statements of income.

Group Term Replacement Plan

Under the terms of the “Group Term Replacement Plan,” the Company provides postretirement life insurance benefits to certain officers. The liability related to these postretirement benefits is accrued over the individual participants’ service period and aggregated $1,723 and $1,711 at March 31, 2025 and December 31, 2024, respectively. The Company recognized expenses of $12 and $13 for the three months ended March 31, 2025 and 2024, respectively, related to this plan, which are included in salaries and employee benefits expense in the consolidated statements of income.

Other Director and Officer Postretirement Benefits

The Company has individual fee continuation agreements with certain directors and a supplemental retirement agreement with an executive officer, each of which provide fixed postretirement benefits to be paid to the directors or the officer, or their beneficiaries, for periods ranging from 15 to 20 years. In addition, the Company has agreements with certain directors which provide certain postretirement life insurance benefits. The liability related to these postretirement benefits is accrued over the individual participants’ service period and aggregated $2,124 and $2,113 at March 31, 2025 and December 31, 2024, respectively. The Company recognized expenses of $28 and $14 for the three months ended March 31, 2025 and 2024, respectively, related to these benefits, which are included in other non-interest expenses in the consolidated statements of income.

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

Employee Stock Ownership Plan

On January 1, 2019, the Bank established an Employee Stock Ownership Plan (“ESOP”) to provide Company stock to eligible employees. The plan is a tax-qualified retirement plan for the benefit of Bank employees. On January 16, 2019, the Company granted a loan to the ESOP to purchase 436,425 shares of the Company’s common stock at a price of $10.00 per share. The loan obtained by the ESOP from the Company is payable annually over 20 years at a rate per annum equal to the Prime Rate, reset annually on January 1st (7.50% at January 1, 2025). Loan payments are funded by cash contributions from the Bank. The loan is secured by the shares purchased, which are held in a suspense account for allocation among participants as the loan is repaid. The balance of the ESOP loan at March 31, 2025 was $3,484. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The number of shares committed to be released annually is 21,821 through 2039.

Shares held by the ESOP include the following:


	March 31,	December 31,
	2025	2024
Allocated	130,926	109,105
Committed to be allocated	5,454	21,821
Unallocated	300,045	305,499
Paid out to participants	(23,622)	(23,622)
Total shares	412,803	412,803

The fair value of unallocated shares was $2,952 at March 31, 2025.

Total compensation expense recognized in connection with the ESOP for the three months ended March 31, 2025 and 2024 was $55 and $46, respectively.

Share-Based Compensation Plan

On May 26, 2020, stockholders of the Company approved the 2020 Equity Incentive Plan (the “EIP”). The EIP authorizes the issuance to participants of up to 763,743 shares of Rhinebeck Bancorp common stock pursuant to grants of incentive and non-qualified stock options, restricted stock awards and restricted stock units. Of this number, the maximum number of shares of Rhinebeck Bancorp common stock that may be issued under the EIP pursuant to the exercise of stock options is 545,531 shares, and the maximum number of shares of Rhinebeck Bancorp common stock that may be issued as restricted stock awards or restricted stock units is 218,212 shares. These amounts represented 4.90% and 1.96%, respectively, of the number of shares of common stock issued in the stock offering of Rhinebeck Bancorp.

Pursuant to the terms of the EIP, on August 25, 2020, the Board of Directors granted restricted stock and stock options to employees and directors. All of these awards vested annually over a three-year period from the date of the grant and the term of each option is ten years. As of March 31, 2025, there were 105,146 stock options and 34,778 restricted stock awards that remained available for future grants.

The fair value of each option granted under the EIP is estimated on the date of grant using the Black-Scholes Option-Pricing Model. The expected volatility is based on the historical volatility of a peer group of comparable SEC-reporting bank holding companies. The dividend yield assumption is based on the Company’s expectation of dividend payouts. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the date of grant. The Company has elected to recognize forfeitures as they occur.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

A summary of options under the 2020 EIP as of March 31, 2025 is presented below:


		Weighted -		Weighted-Average
	Number of	Average		Remaining Contractual
	Shares	Exercise Price		Term (in Years)
Options outstanding at beginning of year	412,930	$	6.62	5.23
Options outstanding at March 31, 2025	412,930	$	6.62	4.80
Options exercisable at March 31, 2025	412,930	$	6.62	4.80

At March 31, 2025, the aggregate intrinsic value of the stock options outstanding, which fluctuates based on changes in the fair market value of the Company’s stock, was $1,330. The aggregate intrinsic value represents the total pre-tax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of period and the weighted-average exercise price, multiplied by the number of shares) that would have been issued had all option holders exercised their options on March 31, 2025.

The following table summarizes the Company’s restricted stock activity for the three months ended March 31, 2025:


			Weighted-Average
	Number		Grant Date
	of Shares		Fair Value per Share
Non-vested restricted stock at beginning of year	15,000	$	7.94
Non-vested restricted stock at March 31, 2025	15,000	$	7.94

As of March 31, 2025, there was $90 of unrecognized compensation cost related to the nonvested restricted stock awards granted under the 2020 EIP. The cost is expected to be recognized over a remaining period of 2.27 years.

For the three months ended March 31, 2025 and 2024, share-based compensation of options and restricted stock under the plan totaled $9 and $0, respectively.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

8. Leases

As of March 31, 2025, the Company leased real estate for seven branch offices and two administrative offices under various lease agreements. One lease is classified as a short-term lease, while the remaining leases are classified as operating leases.

The calculated amount of the right-of-use assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present the value of the minimum lease payments. The Company’s leases have maturities which range from 2026 to 2048, some of which include lessee options to extend the lease term. If the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. The weighted average remaining life of the lease terms for these leases was 15.6 years and 15.7 years as of March 31, 2025 and December 31, 2024, respectively. As most of our leases do not provide an implicit rate, the Company used its incremental borrowing rate, the rate of interest to borrow on a collateralized basis for a similar term, at each lease commencement date. The weighted average discount rate for operating leases as of March 31, 2025 and December 31, 2024 was 3.92% and 3.91%, respectively.

The components of lease cost (included in occupancy expense on the Consolidated Statements of Income) for the three months ended March 31, 2025 and 2024 were as follows:


	Three Months Ended March 31,
	2025		2024
Lease cost:
Operating lease cost	$	200	$	182
Short-term lease cost		5		—
Total lease cost	$	205	$	182

The right-of-use asset, included in other assets, was $7,179 and $7,307 and the corresponding lease liability, included in accrued expenses and other liabilities, was $7,273 and $7,386 as of March 31, 2025 and December 31, 2024, respectively.

Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2025 were as follows:


Years ending December 31:
2025	$	572
2026		745
2027		705
2028		708
2029		714
Thereafter		6,814
Total future minimum lease payments		10,258
Amounts representing interest		(2,985)
Present Value of Net Future Minimum Lease Payments	$	7,273

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

9. Commitments and Contingencies and Derivatives

Legal Matters

The Company is involved in various legal proceedings which have arisen in the normal course of business. Management believes that resolution of these matters will not have a material effect on the Company’s financial condition or results of operations.

Employment Agreements

The Company has entered into employment agreements with certain officers. The agreements provide for base salaries and incentive compensation based on performance criteria outlined in the agreements. The agreements also provide for insurance and various other benefits.

Financial Instruments with Off-Balance-Sheet Risk

In the normal course of business, the Company is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include standby letters of credit and commitments to extend credit, which include new loan commitments, undisbursed portions of construction loans and other lines of credit and loans sold with recourse. We are obligated under a recourse provision associated with certain first mortgage renovation loans sold in the secondary market to bear all costs when a default, including a foreclosure, occurs. These financial instruments involve, to varying degrees, elements of interest rate risk in excess of the amounts recognized in the statements of financial condition. The contractual amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

Financial instruments whose contract amounts represent off-balance sheet credit risk are as follows:


	March 31,		December 31,
	2025		2024
Commitments to extend credit summarized as follows:
Future loan commitments	$	4,910	$	5,556
Undisbursed construction loans		19,426		23,617
Undisbursed home equity lines of credit		10,026		10,357
Undisbursed commercial and other line of credit		77,458		79,107
Standby letters of credit		4,492		3,022
Credit card lines		3,495		2,701
Loans sold with recourse		—		805
Total	$	119,807	$	125,165

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Since these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon an extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include residential and commercial property, deposits and securities.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

Interest Rate Swaps

The Company enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate loan agreement to a fixed-rate loan agreement. Under these agreements, the Company simultaneously enters into a variable-rate loan and an interest rate swap agreement with a customer. The Company then enters into a corresponding and offsetting swap agreement with a third party to hedge the exposure created by the customer agreements. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC Topic 815, Derivatives and Hedging, and are marked to market through earnings. The fair values of the swaps are recorded as both an asset and a liability, in other assets and other liabilities, respectively, in equal amounts for these transactions. The accrued interest receivable and payable of $129 and $152 related to our swaps is recorded in other assets and other liabilities as of March 31, 2025 and December 31, 2024, respectively.

Summary information regarding these derivatives is presented below:


	March 31,			December 31,
	2025			2024
Notational amount	$	184,654		$	151,867
Fair value	$	6,931		$	6,458
Weighted average pay rates		5.66	%		5.48	%
Weighted average receive rates		6.37	%		6.67	%
Weighted average maturity (in years)		6.65			7.45

Number of Contracts		30			24

In addition, as of March 31, 2025, the Company has one forward rate swap with a notional value of $12,938 and a fair value of $245 with an effective date of September 2, 2025. This forward swap has a fixed weighted average pay rate of 6.49% and the related weighted average adjustable receive rate will be determined at the time the forward swap becomes effective. As of December 31, 2024, there were three forward swaps with a notional value of $19,161, a fair value of $285 and a fixed average pay rate of 6.28%.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

10. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items, as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the tables below) of total, common equity Tier 1 and additional Tier I capital (as defined in 12 C.F.R. § 324.20) to risk-weighted assets and of Tier I capital to average assets. Management believes, as of March 31, 2025 and December 31, 2024, that the Bank met all capital adequacy requirements to which they are subject.

The most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, common equity Tier 1, Tier I risk-based and Tier I leverage ratios as set forth in the table below. There are no conditions or events since then which management believes have changed the Bank’s category.

The Bank’s actual capital amounts and ratios were:


									To be Well Capitalized under
					For Capital Adequacy				Prompt Corrective Action
	Actual				Purposes				Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio

	March 31, 2025
Rhinebeck Bank
Total capital (to risk-weighted assets)	$	138,522	12.91	%	$	85,858	8.00	%	$	107,322	10.00	%
Tier 1 capital (to risk-weighted assets)		129,897	12.10	%		64,393	6.00	%		85,858	8.00	%
Common equity tier one capital (to risk weighted assets)		129,897	12.10	%		48,295	4.50	%		69,759	6.50	%
Tier 1 capital (to average assets)		129,897	10.17	%		51,095	4.00	%		63,868	5.00	%


	December 31, 2024
Rhinebeck Bank
Total capital (to risk-weighted assets)	$	135,450	12.63	%	$	85,821	8.00	%	$	107,276	10.00	%
Tier 1 capital (to risk-weighted assets)		126,668	11.81	%		64,366	6.00	%		85,821	8.00	%
Common equity tier one capital (to risk weighted assets)		126,668	11.81	%		48,274	4.50	%		69,729	6.50	%
Tier 1 capital (to average assets)		126,668	10.07	%		50,292	4.00	%		62,865	5.00	%

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

11. Fair Value

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. A description of the valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial and non-financial instruments not recorded at fair value, is set forth below.

Cash and Cash Equivalents

The carrying amount is a reasonable estimate of fair value.

Available for Sale Securities

Where quoted prices are available in an active market for identical securities, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include marketable equity securities and U.S. Treasury obligations. If quoted prices are not available, then fair values are estimated by using pricing models (i.e., matrix pricing) or quoted prices of securities with similar characteristics and are classified within Level 2 of the valuation hierarchy. Examples of such instruments include government agency bonds, mortgage-backed securities and municipal bonds. Level 3 securities include securities for which significant unobservable inputs are utilized. Available for sale securities are recorded at fair value on a recurring basis.

FHLB Stock

The carrying value of FHLB stock approximates fair value based on the redemption provisions of the FHLB.

Loans

Loans receivable are carried at cost. For variable rate loans, which reprice frequently, carrying values are a reasonable estimate of fair values adjusted for credit losses inherent in the portfolios. The fair value of fixed rate loans is estimated by discounting the future cash flows using the year end rates, estimated using local market data, at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, adjusted for credit losses inherent in the portfolios. The Company does not record loans at fair value on a recurring basis. However, from time to time, nonrecurring fair value adjustments to collateral-dependent individually analyzed loans are recorded to reflect partial write-downs based on the observable market price or current appraised value of collateral.

Other Real Estate Owned

Other real estate owned represents real estate acquired through foreclosure and is carried at fair value less estimated selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. These assets are included as Level 3 fair values, based upon the lowest level of input that is utilized in the fair value measurements.

Accrued Interest

The carrying amounts of accrued interest approximate fair value.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

Mortgage Servicing Rights

The fair value of mortgage servicing rights is based on a valuation model that calculates the present value of estimated future net servicing income. Mortgage servicing rights are carried at the lower of amortized cost or estimated fair value and are included in other assets on the consolidated statements of financial condition.

Deposits

Deposit liabilities are carried at cost. The fair value of NOW, savings and money market deposits is the amount payable on demand at the reporting date. The fair value of time certificates of deposit is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities estimated using local market data to a schedule of aggregated expected maturities on such deposits.

Mortgagors’ Escrow Accounts

The fair value is estimated using a discounted cash flow calculation that applies interest rates currently being offered on deposited escrow accounts of similarly expected maturities.

Advances from the FHLB

The fair value of the advances is estimated using a discounted cash flow calculation that applies current FHLB interest rates for advances of similar maturity to a schedule of maturities of such advances.

Subordinated Debt

Based on the floating rate characteristic of these instruments, the carrying value is considered to approximate fair value.

Off-Balance-Sheet Instruments

Fair values for off-balance-sheet lending commitments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standings. Such amounts are not significant.

Loan Level Interest Rate Swaps

The fair value is based on settlement values adjusted for credit risks associated with the counterparties and the Company and observable market interest rate curves.

Table of Contents

Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

The following tables detail the assets that are carried at fair value on a recurring basis as of the periods shown and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:


			Quoted Prices in
			Active Markets		Significant		Significant
			for Identical		Observable		Unobservable
	Balance		Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)

	March 31, 2025
Assets:
U.S. Treasury securities	$	14,938	$	14,938	$	—	$	—
U.S. government agency mortgage-backed securities-residential		92,669		—		92,669		—
U.S. government agency securities		21,401		—		21,401		—
Municipal securities		2,522		—		2,422		100
Corporate bonds		12,822		—		12,822		—
Other		520		—		520		—
Total available for sale securities		144,872		14,938		129,834		100
Loan level interest rate swaps		7,176		—		7,176		—
Total assets	$	152,048	$	14,938	$	137,010	$	100
Liabilities:
Loan level interest rate swaps	$	7,176	$	—	$	7,176	$	—
Total liabilities	$	7,176	$	—	$	7,176	$	—


	December 31, 2024
Assets:
U.S. Treasury securities	$	29,693	$	29,693	$	—	$	—
U.S. government agency mortgage-backed securities – residential		93,492		—		93,492		—
U.S. government agency securities		21,166		—		21,166		—
Municipal securities		2,493		—		2,393		100
Corporate bonds		12,583		—		12,583		—
Other		520		—		520		—
Total available for sale securities		159,947		29,693		130,154		100
Loan level interest rate swaps		6,743		—		6,743		—
Total assets	$	166,690	$	29,693	$	136,897	$	100
Liabilities:
Loan level interest rate swaps	$	6,743	$	—	$	6,743	$	—
Total liabilities	$	6,743	$	—	$	6,743	$	—

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

The following tables detail the assets carried at fair value and measured at fair value on a nonrecurring basis as of March 31, 2025 and December 31, 2024, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:


			Quoted Prices in
			Active Markets		Significant		Significant
			for Identical		Observable		Unobservable
	Balance		Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)

	March 31, 2025
Individually analyzed loans, with specific reserves	$	352	$	—	$	—	$	352
Total	$	352	$	—	$	—	$	352


	December 31, 2024
Individually analyzed loans, with specific reserves	$	320	$	—	$	—	$	320
Total	$	320	$	—	$	—	$	320

Loans that were individually analyzed using the fair value of the collateral had recorded investments of $536 and $479 with valuation allowances of $184 and $159 and fair values of $352 and $320 at March 31, 2025 and December 31, 2024, respectively. The valuation allowance represents specific allocations to the allowance for credit losses.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value:


	Quantitative Information About Level 3 Fair Value Measurements
	Fair Value		Valuation		Unobservable		Range
	Estimate		Techniques		Input		(Weighted Average)

	March 31, 2025
Individually analyzed loans, with specific reserves	$	352	Appraisal of collateral	⁽¹⁾	Liquidation expenses	⁽³⁾	0% to 8%
					Appraisal adjustments	⁽²⁾	0% to 20%

	December 31, 2024
Individually analyzed loans, with specific reserves	$	320	Appraisal of collateral	⁽¹⁾	Liquidation expenses	⁽³⁾	0% to 8%
					Appraisal adjustments	⁽²⁾	0% to 20%

(1)	Fair value is generally through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable.

(2)	Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraised value.

(3)	Estimated costs to sell.

The estimated fair value amounts for 2025 and 2024 have been measured as of their respective reporting dates and have not been reevaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than amounts reported at each year-end.

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

The information presented should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

As of the following dates, the carrying value and fair values of the Company’s financial instruments were:


			Fair Value Measurements at
			March 31, 2025 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	50,517	$	50,517	$	—	$	—	$	50,517
Available for sale securities		144,872		14,938		129,834		100		144,872
Loan level interest rate swaps		7,176		—		7,176		—		7,176
FHLB stock		3,245		—		3,245		—		3,245
Loans, net		976,502		—		—		960,797		960,797
Accrued interest receivable		4,632		—		4,632		—		4,632
Mortgage servicing rights		1,503		—		—		4,146		4,146
Financial Liabilities:
Deposits	$	1,034,241	$	—	$	978,854	$	—	$	978,854
Mortgagors' escrow accounts		7,626		—		7,626		—		7,626
FHLB advances		53,873		—		53,513		—		53,513
Subordinated debt		5,155		—		5,155		—		5,155
Loan level interest rate swaps		7,176		—		7,176		—		7,176
Accrued interest payable		802		—		802		—		802


			Fair Value Measurements at
			December 31, 2024 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	37,484	$	37,484	$	—	$	—	$	37,484
Available for sale securities		159,947		29,693		130,154		100		159,947
Loan level interest rate swaps		6,743		—		6,743		—		6,743
FHLB stock		3,960		—		3,960		—		3,960
Loans, net		971,779		—		—		955,123		955,123
Accrued interest receivable		4,435		—		4,435		—		4,435
Mortgage servicing rights		1,592		—		—		4,370		4,370
Financial Liabilities:
Deposits	$	1,020,783	$	—	$	968,878	$	—	$	968,878
Mortgagors' escrow accounts		9,425		—		9,425		—		9,425
FHLB advances		69,773		—		69,071		—		69,071
Subordinated debt		5,155		—		5,155		—		5,155
Loan level interest rate swaps		6,743		—		6,743		—		6,743
Accrued interest payable		943		—		943		—		943

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

12. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss at March 31, 2025 and December 31, 2024 were as follows:


	March 31,		December 31,
	2025		2024
Securities available for sale:
Net unrealized loss on securities available for sale	$	(11,000)	$	(13,266)
Related deferred tax⁽¹⁾		2,310		2,786
Net accumulated other comprehensive loss		(8,690)		(10,480)
Defined benefit pension plan:
Unrecognized net actuarial loss and prior service cost		(3,108)		(3,108)
Related deferred tax⁽¹⁾		653		653
Net accumulated other comprehensive loss		(2,455)		(2,455)
Total accumulated other comprehensive loss	$	(11,145)	$	(12,935)

(1) Related deferred tax is calculated using an income tax rate of 21.0%.

13. Segment Reporting

The Company is a bank holding company, whose principal activity is the ownership and management of its wholly-owned subsidiary, Rhinebeck Bank. As a community-focused financial institution, the Company’s operations primarily involve offering loan and deposit products and providing financial advisory services to customers. Since management evaluates performance and makes strategic decisions based on a single, integrated banking operation, the Company is considered to have one reportable segment for financial reporting purposes.

Management makes operating decisions and assesses performance based on an ongoing review of these banking operations, The accounting policies of the banking operations segment are the same as those described in the summary of significant accounting policies. The Company's reportable segment is determined by the Chief Executive Officer, who serves as the chief operating decision maker (“CODM”). The CODM assesses the Company's products and services, which primarily consist of banking operations, and evaluates performance based on financial data provided.

Interest income from loans and other earning assets, and income from fee-based businesses provide banking operation revenue. Interest expense on deposits and other sources of funding, provisions for credit losses, and operating expenses, primarily salaries and employee benefits, occupancy, furniture and equipment, and data processing and communications, provide the significant expenses of banking operations. The Company currently operates as a single-segment and all operations are domestic.

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Rhinebeck Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands, except share and per share data)

14. Earnings Per Share

Basic earnings per share represent income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed in a manner similar to that of basic earnings per share except that the weighted-average number of common shares outstanding is increased to include the number of incremental shares (computed using the treasury method) that would have been outstanding if all potentially dilutive common stock equivalents (such as options) were issued during the period. There were no anti-dilutive options for the three months ended March 31, 2025 or 2024. Unearned ESOP shares are not deemed outstanding for earnings per share calculations.


	Three Months Ended March 31,
	2025		2024
Net (loss) income applicable to common stock	$	2,288	$	1,121

Average number of common shares outstanding		11,079,828		11,072,607
Less: Average unearned ESOP shares		302,784		324,601
Average number of common shares outstanding used to calculate basic earnings per common share		10,777,044		10,748,006
Additional common stock equivalents (nonvested stock) used to calculate diluted earnings per share		5,532		—
Additional common stock equivalents (stock options) used to calculate diluted earnings per share		140,788		96,281
Weighted-average common shares and common stock equivalents used to calculate diluted earnings per share		10,923,364		10,844,287

Earnings (loss) per Common share:
Basic	$	0.21	$	0.10
Diluted ⁽¹⁾	$	0.21	$	0.10

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Management’s discussion and analysis of financial condition and results of operations at March 31, 2025 and December 31, 2024, and for the three months ended March 31, 2025 and 2024, is intended to assist in understanding the financial condition and results of operations of the Company and the Bank. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “approximate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “intend,” “predict,” “forecast,” “improve,” “continue,” “will,” “would,” “should,” “could,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to:

statements of our goals, intentions and expectations;

statements regarding our business plans, prospects, growth and operating strategies, and financial condition and results of operation;

statements regarding the quality of our loan and investment portfolios; and

estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Forward-looking statements, by their nature, are subject to risks and uncertainties.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

●

general economic conditions, either nationally or in our market area, including potential recessionary conditions or slowed economic growth caused by supply chain disruption or otherwise;

●

changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio;

●

changes in the level and direction of loan delinquencies and charge-offs and changes in estimates or methodology in the calculation of the allowance for credit losses;

●

our ability to access cost-effective funding;

●

fluctuations in real estate values and both residential and commercial real estate market conditions;

●

demand for loans and deposits in our market area;

●

our ability to implement our business strategies;

●

the effect of our rating under the Community Reinvestment Act;

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●

our ability to manage or reduce expenses;

●

competition among depository and other financial institutions;

●

inflation and changes in market interest rates that affect our margins and yields, the fair value of financial instruments, our volume of loan originations and loan sales, or the level of defaults, losses and prepayments on loans, whether held in portfolio or sold in the secondary market;

●

adverse changes in the securities markets;

●

changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, Federal Deposit Insurance Corporation premiums and capital requirements, and changes in the monetary and fiscal policies of the Board of Governors of the Federal Reserve System;

●

the imposition of tariffs or other domestic or international governmental policies;

●

negative financial impact from potential supervisory action, regulatory penalties and/or settlements;

●

our ability to manage interest rate risk, market risk, credit risk and operational risk;

●

our ability to enter new markets successfully and capitalize on growth opportunities;

●

our ability to successfully integrate into our operations any assets, liabilities or systems we may acquire, as well as new management personnel or customers, and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto;

●

changes in consumer spending, borrowing and savings habits;

●

the current or anticipated impact of military conflict, terrorism or other geopolitical events;

●

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

●

our ability to retain key employees;

●

a failure in or breach of our operational or security systems or infrastructure, including cyberattacks;

●

system failures or cybersecurity threats against our informational technology and those of our third-party providers and vendors;

●

the failure to maintain current technologies and to successfully implement future information technology enhancements;

●

our compensation expense associated with equity allocated or awarded to our employees;

●

changes in the financial condition, results of operations or prospects of issuers of securities that we own; and

●

conditions relating to the Coronavirus pandemic, or other public health emergencies.

Additional factors that may affect our results are discussed in our Annual Report on Form 10-K under the heading “Risk Factors.” Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Accordingly, you should not place undue reliance on such statements.

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Critical Accounting Policies

Our most significant accounting policies are described in Note 1 to the consolidated financial statements. Certain of these accounting policies require management to use significant judgment and estimates, which can have a material impact on the carrying value of certain assets and liabilities. We consider these policies to be our critical accounting estimates. The judgment and assumptions made are based upon historical experience, future forecasts, and/or other factors that management believes to be reasonable. Because of the nature of the judgment and assumptions, actual results could differ from estimates, which could have a material effect on our financial condition and results of operations. We consider the allowance for credit losses to be our most critical accounting policy.

Allowance for Credit Losses

The Company's allowance for credit losses is its estimate of credit losses currently expected in the loan portfolio, on unfunded lending commitments, and on its available-for-sale securities portfolio over the expected life of those assets. While these estimates are based on substantive methods for determining the required allowance, actual outcomes may differ significantly from estimated results, especially when determining required allowances for larger, complex commercial credits or unfunded lending commitments to commercial borrowers. Consumer loans, including indirect automobile loans and single family residential real estate, are smaller and generally behave in a similar manner, and loss estimates for these credits are considered more predictable. Additionally, the Company estimates the allowance for credit losses as a calculation of expected lifetime credit losses utilizing a forward-looking forecast of macroeconomic conditions, which may differ significantly from actual results. Further discussion of the methodology used in establishing the allowance is provided in Note 3 to the Notes to the Consolidated Financial Statements included in this Form 10-Q and in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 25, 2025.

Comparison of Financial Condition at March 31, 2025 and December 31, 2024

Total Assets. Total assets remained relatively stable at $1.26 billion at both March 31, 2025 and December 31, 2024, reflecting a minimal increase of $159,000. While several asset categories fluctuated during the period, the most notable changes included a $13.0 million increase in cash and cash equivalents and a $15.1 million decrease in available-for-sale securities. Net loans receivable increased by $4.7 million, or 0.5%, to $976.5 million and other assets decreased $1.1 million, or 4.5%.

Cash and Cash Equivalents. Cash and cash equivalents increased $13.0 million, or 34.8%, to $50.5 million at March 31, 2025 from $37.5 million at December 31, 2024 primarily due to an $8.5 million, or 46.2%, increase in federal funds sold, as well as increases in deposits held at the FHLB, Federal Reserve Bank of New York and other interest-bearing depository accounts with proceeds resulting from principal payments and maturities of investment securities.

Investment Securities Available for Sale. Available-for-sale securities declined $15.1 million, or 9.4%, to $144.9 million at March 31, 2025 from $159.9 million at December 31, 2024, primarily due to paydowns, calls and maturities of $18.1 million, partially offset by a decrease in the unrealized loss of $2.3 million and purchases of $631,000.

Net Loans. Net loans receivable increased $4.7 million, or 0.5%, to $976.5 million at March 31, 2025, compared to $971.8 million at December 31, 2024. This increase reflects growth in our commercial and residential real estate loan portfolios of $17.9 million and $4.3 million, respectively, partially offset by a $17.7 million decrease in consumer loans. The increase in commercial real estate loans was primarily due to a $16.6 million increase in non-residential real estate loans and a $3.4 million increase in multi-family commercial real estate loans, partially offset by a $2.0 million decrease in commercial construction loans. The decrease in consumer loans is the result of a strategic reduction in indirect automobile loans of $17.7 million. At March 31, 2025, indirect automobile loans were 22.1% of assets, compared to 23.5% at December 31, 2024. Non-accrual loans decreased by $622,000, or 15.0%, between December 31, 2024 and March 31, 2025.

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Total Liabilities. Total liabilities decreased $4.0 million, or 0.4%, to $1.13 billion at March 31, 2025. The reduction was primarily driven by a $15.9 million decrease in FHLB advances and a $1.8 million decline in mortgagors' escrow accounts, partially offset by a $13.5 million increase in total deposits.

Deposits. Deposits increased $13.5 million, or 1.3%, to $1.03 billion at March 31, 2025 from $1.02 billion at December 31, 2024. Interest-bearing deposits increased $13.6 million, or 1.7%, while non-interest-bearing deposits decreased by $174,000. The increase in savings of $2.7 million and in money market accounts of $25.1 million reflected the Bank’s promotion of higher-yielding products in response to customer demand for better interest rates. These increases were partially offset by decreases in NOW accounts and certificates of deposit of $5.9 million and $8.3 million, respectively.

We participate in reciprocal deposit programs, obtained through the Certificate Deposit Account Registry Service (CDARS) and IntraFi Cash Service (ICS) networks, that provide access to FDIC-insured deposit products in aggregate amounts exceeding the current limits for depositors. This allows us to maintain deposits that might otherwise be uninsured. Our reciprocal deposits obtained through the CDARS and ICS networks totaled $33.6 million and $38.9 million at March 31, 2025 and December 31, 2024, respectively. We had no brokered deposits at either March 31, 2025 or December 31, 2024.

Mortgagors’ escrow accounts. Mortgagors’ escrow accounts decreased $1.8 million, or 19.1%, to $7.6 million at March 31, 2025 from $9.4 million at December 31, 2024, primarily due to the timing of property tax and insurance disbursements.

Advances from the Federal Home Loan Bank. FHLB advances declined $15.9 million, or 22.8%, to $53.9 million at March 31, 2025 from $69.8 million at December 31, 2024. The reduction reflects the Company’s use of excess liquidity from the maturity of securities, lower loan origination activity and increased deposits to pay down borrowings.

Stockholders’ Equity. Stockholders’ equity increased $4.1 million, or 3.4%, to $126.0 million at March 31, 2025 from $121.8 million at December 31, 2024. The increase was primarily due to $2.3 million in net income and a $1.8 million decrease in accumulated other comprehensive loss reflecting the results of the balance sheet restructuring. The Company’s book value per share was $11.35 at March 31, 2025, compared to $10.98 at December 31, 2024. The ratio of stockholders’ equity to total assets increased to 10.0% from 9.7% over the same period. Unearned common stock held by the Bank’s employee stock ownership plan was $3.0 million and $3.1 million at March 31, 2025 and December 31, 2024, respectively.

Comparison of Operating Results for the Three Months Ended March 31, 2025 and 2024

Net Income. Net income for the first quarter of 2025 was $2.3 million, compared to $1.1 million for the first quarter of 2024. Diluted earnings per share were $0.21 for the first quarter of 2025, up from $0.10 for the same quarter a year ago. Interest and dividend income increased $1.1 million, or 7.0%, while interest expense decreased $1.1 million, or 16.9%. The provision for credit losses increased $270,000, or 325.3%. Non-interest income rose $161,000, or 10.1%, and non-interest expense increased $631,000, or 7.1%. Provision for income taxes increased $318,000, or 99.1%, between the comparable quarters.

Net Interest Income. Net interest income increased $2.2 million, or 25.2%, to $11.0 million for the three months ended March 31, 2025. The ratio of average interest-earning assets to average interest-bearing liabilities rose 2 percentage points to 134.00%, while the net interest margin expanded by 89 basis points to 3.79% compared to the same quarter in 2024. The increase in the net interest margin was primarily due to a higher yield on loans and securities, coupled with a decline in the cost of interest-bearing liabilities. Interest rate spread improved 94 basis points from 2.19% for the three months ended March 31, 2024 to 3.13% for the three months ended March 31, 2025, reflecting better pricing on assets versus liabilities. A balance sheet restructuring in the second half of 2024 significantly increased the yield on our available for sale securities.

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Interest Income. Interest income increased $1.1 million, or 7.0%, to $16.6 million for the three months ended March 31, 2025, compared to $15.6 million for the same period in 2024. The increase was primarily due to higher yields on loans and securities, partially offset by a decrease in the average balance of interest-earning assets. The average yield on interest-earning assets increased by 60 basis points to 5.71%, while the average balance of interest-earning assets declined by $42.2 million, or 3.4%, to $1.18 billion. The average yield on loans increased 44 basis points, to 6.14%, and the average yield on available-for-sale securities increased 142 basis points, to 3.25%. The average balance of loans decreased $17.6 million, and the average balance of available-for-sale securities declined $33.7 million, compared to the three months ended March 31, 2024.

Interest Expense. Interest expense decreased $1.1 million, or 16.9%, to $5.6 million for the three months ended March 31, 2025, compared to $6.7 million for the same period in 2024. The average cost of interest-bearing liabilities declined by 34 basis points, to 2.58%, reflecting lower funding costs and a favorable shift in funding mix, despite the ongoing elevated interest rate environment. The average balance of total interest-bearing liabilities decreased $46.2 million, or 5.0%, to $882.1 million, primarily due to a $48.0 million decline in the average balance of Federal Home Loan Bank advances, which fell from $123.0 million to $75.0 million. The average cost of these advances also declined by 86 basis points, from 4.93% to 4.07%.

Provision for Credit Losses. The provision for credit losses on loans increased $270,000, or 325.3%, to $353,000 for the three months ended March 31, 2025, compared to $83,000 for the same period in 2024. The increase was primarily attributable to increased loan production and increased charge-offs during the quarter.

Net charge-offs increased $260,000, or 104.0%, from $250,000 for the first quarter of 2024 to $510,000 for the first quarter of 2025. The increase was primarily due to increased net charge-offs of $162,000 and $139,000 in indirect automobile loans and commercial loans, respectively. The percentage of overdue account balances to total loans decreased to 1.38% as of March 31, 2025 from 1.71% as of December 31, 2024, while non-performing assets decreased $622,000, or 15.0%, to $3.5 million at March 31, 2025.

Non-Interest Income. Non-interest income totaled $1.8 million for the three months ended March 31, 2025, an increase of $161,000, or 10.1%, from the comparable period in 2024, due primarily to an increase of $166,000, or 66.4%, in other non-interest income as swap income increased. Service charges on deposit accounts also increased by $30,000, or 4.0%, as deposits increased. These increases were partially offset by a decrease in investment advisory income of $45,000, or 11.8%, resulting from a decline in assets under management due to unpredictable economic and market conditions. Gains on sales of loans also decreased $8,000 as we sold $385,000 of residential mortgage loans in the first quarter of 2025 as compared to sales of $2.0 million in the first quarter of 2024.

Non-Interest Expense. For the first quarter of 2025, non-interest expense rose to $9.5 million, reflecting a $631,000, or 7.1%, increase compared to the same period in 2024. The increase was broad-based, with almost all major expense categories rising. Other non-interest expense grew by $256,000, or 16.8%, driven by higher retail banking costs. Salaries and benefits rose $142,000, primarily due to increased production commissions. Marketing expense rose by $79,000, or 65.3%, largely due to promotional initiatives associated with the launch of higher-yielding deposit products. Additionally, professional fees, FDIC insurance expense, and data processing fees increased by $63,000, $44,000, and $30,000, respectively.

Income Taxes. The provision for income taxes increased $318,000, or 99.1%, totaling $639,000 for the three months ended March 31, 2025, compared to $321,000 for the same period in 2024. The increased income tax provision corresponds to higher pre-tax income during the quarter. The effective tax rate was 21.83% for the three months ended March 31, 2025 as compared to 22.26% for the three months ended March 31, 2024.

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Average Balance Sheets for the Three Months Ended March 31, 2025 and 2024

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. All average balances are daily average balances, the yields set forth below include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income (dollars in thousands).


	For the Three Months Ended March 31,
	2025						2024
	Average		Interest and				Average		Interest and
	Balance		Dividends		Yield/Cost⁽³⁾		Balance		Dividends		Yield/Cost⁽³⁾
Assets:
Interest bearing depository accounts and federal funds sold	$	28,428	$	279	3.98	%	$	17,274	$	217	5.05	%
Loans⁽¹⁾		992,023		15,008	6.14	%		1,009,612		14,297	5.70	%
Available for sale securities		157,219		1,261	3.25	%		190,900		870	1.83	%
Other interest-earning assets		4,349		90	8.39	%		6,441		167	10.43	%
Total interest-earning assets		1,182,019		16,638	5.71	%		1,224,227		15,551	5.11	%
Non-interest-earning assets		87,097						88,866
Total assets	$	1,269,116					$	1,313,093
Liabilities and equity:
NOW accounts	$	126,085	$	53	0.17	%	$	123,779	$	42	0.14	%
Money market accounts		206,019		1,235	2.43	%		188,896		1,259	2.68	%
Savings accounts		132,949		124	0.38	%		147,116		132	0.36	%
Certificates of deposit		329,337		3,330	4.10	%		333,342		3,681	4.44	%
Total interest-bearing deposits		794,390		4,742	2.42	%		793,133		5,114	2.59	%
Escrow accounts		7,575		21	1.12	%		7,017		20	1.15	%
Federal Home Loan Bank advances		74,963		752	4.07	%		122,993		1,507	4.93	%
Subordinated debt		5,155		86	6.77	%		5,155		98	7.65	%
Total other interest-bearing liabilities		87,693		859	3.97	%		135,165		1,625	4.84	%
Total interest-bearing liabilities		882,083		5,601	2.58	%		928,298		6,739	2.92	%
Non-interest-bearing deposits		234,295						243,017
Other non-interest-bearing liabilities		28,802						26,620
Total liabilities		1,145,180						1,197,935
Total stockholders’ equity		123,936						115,158
Total liabilities and stockholders’ equity	$	1,269,116					$	1,313,093
Net interest income			$	11,037					$	8,812
Interest rate spread					3.13	%					2.19	%
Net interest margin⁽²⁾					3.79	%					2.90	%
Average interest-earning assets to average interest-bearing liabilities					134.00	%					131.88	%

⁽¹⁾	Non-accruing loans are included in the outstanding loan balance. Deferred loan fees included in interest income totaled $53,000 and $17,000 for the three months ended March 31, 2025 and 2024, respectively.

⁽²⁾	Represents the difference between interest earned and interest paid, divided by average total interest earning assets.

⁽³⁾	Annualized.

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Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the period indicated (in thousands). The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the rate and volume columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. The Company did not have any excludable out-of-period items or adjustments.


	Three Months Ended March 31, 2025
	Compared to Three Months Ended
	March 31, 2024
	Increase (Decrease)
	Due to
	Volume		Rate		Net
Interest income:
Interest bearing depository accounts	$	117	$	(55)	$	62
Loans receivable		(254)		965		711
Available for sale securities		(176)		567		391
Other interest-earning assets		(47)		(30)		(77)
Total interest-earning assets		(360)		1,447		1,087
Interest expense:
Deposits		8		(381)		(373)
Escrow accounts		2		(1)		1
Federal Home Loan Bank advances		(515)		(239)		(754)
Subordinated debt		—		(12)		(12)
Total interest-bearing liabilities		(505)		(633)		(1,138)
Net increase in net interest income	$	145	$	2,080	$	2,225

Management of Market Risk

General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of loans and securities, have longer maturities than our liabilities, consisting primarily of deposits and Federal Home Loan Bank advances. As a result, a principal part of our business strategy is to manage our exposure to changes in market interest rates. Accordingly, the Board of Directors maintains a management-level Asset/Liability Management Committee (the “ALCO”), which takes primary responsibility for reviewing the Company’s asset/liability management process and related procedures, establishing and monitoring reporting systems and ascertaining that established asset/liability strategies are being maintained. On at least a quarterly basis, the ALCO reviews and reports to the Board asset/liability management outcomes from various modeling scenarios. The ALCO also implements any changes in strategies and reviews the performance of any specific asset/liability management actions that have been implemented.

We manage our interest rate risk to minimize the exposure of our earnings and capital to changes in market interest rates. We have implemented the following strategies to manage our interest rate risk: originating loans with adjustable interest rates or with shorter terms, promoting core deposit products, and adjusting the interest rates and maturities of funding sources, as necessary. By following these strategies, we believe that we are better positioned to react to changes in market interest rates.

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Net Economic Value Simulation. We analyze the Bank’s sensitivity to changes in interest rates through a net economic value of equity (“EVE”) model. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet contracts. The EVE ratio represents the dollar amount of our EVE divided by the present value of our total assets for a given interest rate scenario. EVE attempts to quantify our economic value using a discounted cash flow methodology while the EVE ratio reflects that value as a form of capital ratio. We estimate what our EVE would be at a specific date. We then forecast what the EVE might be at the same date throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve. We currently calculate the EVE under scenarios where interest rates increase 100, 200, 300 and 400 basis points from current market rates and where interest rates decrease 100, 200, 300 and 400 basis points from current market rates.

The following table presents the estimated changes in the Bank’s EVE that would result from changes in market interest rates at March 31, 2025 (dollars in thousands).


							Net Economic Value as a
	Net Economic Value						Percentage of Assets
	Dollar		Dollar		Percent		EVE		Percent
Basis Point Change in Interest Rates	Amount		Change		Change		Ratio		Change

	(Dollars in thousands)
400	$	141,790	$	(36,568)	(20.5)	%	12.35	%	(14.1)	%
300		150,430		(27,928)	(15.7)	%	12.87	%	(10.5)	%
200		159,586		(18,772)	(10.5)	%	13.40	%	(6.9)	%
100		168,993		(9,365)	(5.3)	%	13.91	%	(3.3)	%
0		178,358		—	—	%	14.38	%	—	%
(100)		176,313		(2,045)	(1.1)	%	13.95	%	(3.1)	%
(200)		168,956		(9,402)	(5.3)	%	13.12	%	(8.8)	%
(300)		152,680		(25,678)	(14.4)	%	11.64	%	(19.1)	%
(400)		129,687		(48,671)	(27.3)	%	9.67	%	(32.8)	%

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The above table assumes that the composition of our interest-sensitive assets and liabilities existing at the date indicated remains constant uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the table provides an indication of our interest rate risk exposure at a point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our EVE and will likely differ from actual results.

Liquidity Management

We maintain liquid assets at levels we consider adequate to meet both our short-term and long-term liquidity needs. We adjust our liquidity levels to fund deposit outflows, repay our borrowings and to fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives.

Our primary sources of liquidity are deposits, loan sales, amortization and prepayment of loans and mortgage-backed securities, maturities, sales and calls of investment securities and other short-term investments, earnings, funds provided from operations, as well as access to FHLB advances and other borrowings. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan and security sales and prepayments are greatly influenced by market interest rates, economic conditions, and rates offered by our competition. We set the interest rates on our deposits to maintain a desired level of total deposits.

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As reflected in the Consolidated Statements of Cash Flows, net cash provided by operating activities was $4.3 million for the three months ended March 31, 2025, compared to net cash used of $3.5 million for the same period in 2024. The increase was primarily attributable to a prior year $5.0 million U.S. Treasury bond that matured on March 31, 2024 and was awaiting settlement. Net cash provided by investing activities totaled $13.0 million in the first quarter of 2025, a decrease from $27.5 million in the prior-year period, driven primarily by net loan growth of $5.1 million in the first three months of 2025 versus a net reduction in loans of $15.4 million in the comparable 2024 period as well as $18.1 million of securities proceeds in the first quarter of 2025 compared to $8.4 million in the first quarter of 2024. Cash flows from financing activities reflected a net use of $4.2 million in the current quarter, compared to $15.5 million used in the prior-year period, with the reduced outflows mainly resulting from changes in deposit balances and short-term debt repayments. As a result of these activities, cash and cash equivalents increased by $13.0 million during the quarter to $50.5 million as of March 31, 2025, from a beginning balance of $37.5 million.

At March 31, 2025, we had the following main sources of availability of liquid funds and borrowings:


(In thousands)	Total
Available liquid funds:
Cash and cash equivalents	$	50,517
Unencumbered securities		57,987
Availability of borrowings:
Zions Bank line of credit		10,000
Pacific Coast Bankers Bank line of credit		50,000
FHLB secured line of credit		278,066
FRB secured line of credit		202,590
Total available sources of funds	$	649,160

The Bank has access to a preapproved secured line of credit with the FHLB. At March 31, 2025, the Bank had pledged $482.0 million of assets to the FHLB, which resulted in a secured line of credit of $331.9 million. At March 31, 2025, the Bank had borrowed $53.9 million under this line, with remaining secured borrowing capacity of $278.1 million.

We also have commitments and obligations under our post-retirement plan and other benefit plans and our off-balance sheet financial instruments, as described in Note 7 and Note 9 to the consolidated financial statements.

Impact of Inflation and Changing Prices

The financial statements and related notes of the Company have been prepared in accordance with GAAP. GAAP generally requires the measurement of financial condition and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than the effects of inflation.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

For information regarding market risk, see “Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operation - Management of Market Risk.”

Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2025. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

There were no changes in the Company’s internal controls over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are periodically involved in legal proceedings, such as employment-related claims against us, claims to enforce liens, foreclosure or condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans, and other issues incidental to our business. As of the date of this Quarterly Report on Form 10-Q, we are not a party to any pending legal proceedings that we believe would have a material effect on our financial condition, results of operations or cash flows.

Item 1A. Risk Factors

In addition to the other information contained in this Quarterly Report on Form 10-Q, the following risk factor represents a material update and addition to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

If we do not successfully manage the transition associated with the retirement of our Chief Executive Officer (“CEO”), it could be viewed negatively by our customers and shareholders and could have an adverse impact on our business.

On March 21, 2025, Michael J. Quinn announced his intention to retire as the Company’s CEO and as a member of the Board effective on the earlier of December 31, 2025 or when a successor is found to ensure an orderly transition. The Board of Directors of the Bank has formed a Search Committee to find a successor to Mr. Quinn. Leadership transitions can be difficult and may present challenges, including potential disruption to our operations and relationships with customers, regulators, vendors, and employees. If the CEO transition is not effectively managed, or if we are unable to identify and secure a qualified successor in a timely manner, our ability to execute our strategic initiatives and meet our financial and operational goals could be negatively impacted. Additionally, uncertainty surrounding the transition may affect employee morale and retention, and could hinder our ability to attract and hire key personnel.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

In September 2022, the Board approved a stock repurchase plan pursuant to which the Company is authorized to repurchase up to 247,506 shares of its common stock, of which 47,506 shares remain available for repurchase. The repurchase plan has no expiration date. No shares were repurchased under the stock repurchase plan during the three months ended March 31, 2025.

There were no sales of unregistered securities during the quarter ended March 31, 2025.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(c) Director and Section 16 Officer Rule 10b5-1 Trading Arrangements

During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits


3.1	Articles of Incorporation of Rhinebeck Bancorp, Inc. (Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of Rhinebeck Bancorp, Inc. (File no. 333-227266), originally filed with the Securities and Exchange Commission on September 10, 2018.)

3.2	Bylaws of Rhinebeck Bancorp, Inc. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Rhinebeck Bancorp, Inc. (File no. 001-38779), filed with the Securities and Exchange Commission on September 27, 2019.)

4.0	Form of Common Stock Certificate of Rhinebeck Bancorp, Inc. (Incorporated by reference to Exhibit 4 to the Registration Statement on Form S-1 of Rhinebeck Bancorp, Inc. (File no. 333-227266), originally filed with the Securities and Exchange Commission on September 10, 2018.)

10.1	Retirement Separation Agreement dated effective as of March 21, 2025, by and among Rhinebeck Bancorp, Inc., Rhinebeck Bank, and Michael J. Quinn, (Incorporated by reference to Rhinebeck Bancorp, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 21, 2025)

31.1	Certification required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.0	The following materials for the period ended March 31, 2025, formatted in inline XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements

104.0	The cover page from Rhinebeck Bancorp’s Form 10-Q for the quarterly period ended March 31, 2025, formatted in inline XBRL (contained in Exhibit 101.0)

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	RHINEBECK BANCORP, INC.

Date: May 13, 2025		/s/ Michael J. Quinn
		Michael J. Quinn President and Chief Executive Officer

Date: May 13, 2025		/s/ Kevin Nihill
		Kevin Nihill Chief Financial Officer