Shares of Rhinebeck Bancorp, Inc. (RBKB Quick QuoteRBKB - Free Report) have gained 0.9% since the company reported earnings for the quarter ended Sept. 30, 2026, against the S&P 500 Index’s 2.8% loss over the same period. Over the past month, the stock lost 2.2%, outperforming the broader index, which fell 3.4%.

Rhinebeck Bancorp’s Earnings Snapshot

Rhinebeck Bancorp reported third-quarter 2026 net income of $3.2 million, up 16.9% from $2.7 million in the year-ago quarter. Earnings per share increased 16.7% to 21 cents from 18 cents a year earlier. Net interest income rose 8.1% year over year to $13 million from $12 million. Non-interest income increased 6.5% to $2.1 million.

RBKB operates through its banking subsidiary, Rhinebeck Bank, providing consumer and commercial banking, lending, treasury management and investment advisory services. Separate segment-level financial results were not disclosed.

RBKB's Interest Income and Margins

Net interest income growth was primarily driven by higher interest-earning asset balances and lower funding costs, partially offset by declining asset yields.

Average interest-earning assets increased 12.2% year over year to $1.36 billion, supported by higher cash balances and available-for-sale securities. However, average loan balances declined $40.4 million.

Net interest margin contracted 14 basis points to 3.79% from 3.93% in the prior-year quarter. The interest rate spread narrowed to 3.03% from 3.27%, reflecting a larger concentration of lower-yielding liquid assets following deposit growth and the capital raise.

The average cost of interest-bearing liabilities declined to 2.40% from 2.53%, benefiting from lower-cost deposits and reduced Federal Home Loan Bank advances.

Rhinebeck Bancorp’s Expenses and Efficiency

Non-interest expenses increased 5.9% year over year to $10.3 million from $9.7 million. Higher salaries and employee benefits, particularly medical costs, alongside increased data processing expenses and professional fees, contributed to the increase.

However, the efficiency ratio improved to 68.37% from 69.61% a year earlier, indicating improved operating efficiency despite higher expenses.

Return on average assets improved to 0.86% in the third quarter of 2026 from 0.82% in the year-ago quarter. However, return on average equity declined to 6.01% from 8.18%, primarily reflecting the increase in average equity following the second-step conversion and related stock offering.

Non-interest income benefited from a gain on life insurance and increased deposit service charges, partially offset by lower swap-related income and reduced gains on loan sales.

RBKB discontinued directly originating residential mortgage loans, contributing to a decline in gains on loan sales during the quarter. This change affected fee-based income despite stronger deposit service charges and the gain on life insurance.

RBKB's Asset Quality

The provision for credit losses declined 13.9% year over year to $0.8 million from $0.9 million. Quarterly net charge-offs decreased to $0.2 million from $0.9 million, primarily reflecting improvements in commercial real estate and indirect automobile lending.

Past-due loans decreased 28.2% to $10.4 million as of Sept. 30, 2026, from $14.5 million as of Dec. 31, 2025.

However, non-performing assets increased 16.2% to $4.3 million as of Sept. 30, 2026, highlighting lingering credit-quality concerns.

Rhinebeck Bancorp’s Balance Sheet

Total assets increased to $1.51 billion as of Sept. 30, 2026, from $1.30 billion as of Dec. 31, 2025.

Total deposits grew to $1.24 billion as of Sept. 30, 2026, from $1.09 billion as of Dec. 31, 2025, supported by increases in interest-bearing and non-interest-bearing deposits. Meanwhile, net loans receivable decreased to $944.5 million from $953.4 million during the same period as Rhinebeck Bancorp continued reducing its indirect automobile loan exposure.

RBKB’s loan portfolio continued shifting toward relationship-based lending. Indirect automobile loans declined $34.5 million, while commercial real estate loans decreased $2.3 million. These reductions were partially offset by increases of $24.8 million in residential real estate loans and $3.6 million in commercial and industrial loans, reflecting Rhinebeck Bancorp’s focus on expanding its commercial banking franchise.

Available-for-sale securities increased 73.6% from year-end 2025, supported by purchases funded through deposit growth and proceeds from the stock offering. However, RBKB recorded a $5 million increase in unrealized losses on securities, highlighting continued pressure on its investment portfolio.

Rhinebeck Bank's Tier 1 risk-based capital ratio improved to 18.04% from 13.08% in the year-ago period, while its total risk-based capital ratio increased to 18.84% from 13.88%. The stronger capital position provides additional capacity to support future lending activities and strategic expansion.

Stockholders' equity increased to $220.8 million as of Sept. 30, 2026, primarily benefiting from the capital raised through the second-step conversion.

RBKB's Management Commentary

President and CEO Matthew Smith emphasized stronger profitability, disciplined funding management and improving credit performance.

Management intends to deploy the newly raised capital toward expanding commercial banking operations, strengthening customer relationships and developing digital banking capabilities.

RBKB also aims to diversify funding sources and improve long-term operating performance. However, no specific quantitative earnings or revenue guidance was provided.

Rhinebeck Bancorp’s Other Developments

On July 21, 2026, Rhinebeck Bancorp completed its second-step mutual-to-stock conversion. The transaction included a public offering of 8.9 million shares at $10 per share, generating gross proceeds of $88.8 million.

The conversion eliminated the former mutual holding company structure and strengthened RBKB’s capital position, providing additional financial flexibility to support its strategic growth initiatives.