EX-99.1 2 ex99-1_8k050124.htm PRESS RELEASE DATED MAY 1, 2024
EXHIBIT 99.1


FOR IMMEDIATE RELEASE

Orange County Bancorp, Inc. Announces Record First Quarter Earnings:
Highlights include -
•
Net Income of $9.3 million for the three months ended March 31, 2024 increased $6.1 million, or 187.6%, as compared to $3.2 million for the three months ended March 31, 2023
•
Total Deposits grew $110.7 million, or 5.4%, reaching $2.2 billion at March 31, 2024 as compared to $2.0 billion at December 31, 2023.
•
Net interest margin of 3.64% for the quarter ended March 31, 2024 decreased 14 basis points, or 3.7%, versus 3.78% for the quarter ended March 31, 2023
•
Trust and investment advisory income rose $513 thousand, or 21.6%, to $2.9 million, for the quarter ended March 31, 2024 from $2.4 million for the quarter ended March 31, 2023.
•
Total Loans of $1.7 billion at March 31, 2024 were relatively unchanged from year-end 2023
•
Book value per share increased $0.55, or 1.9%, reaching $29.81 at March 31, 2024 as compared to $29.26 at December 31, 2023

MIDDLETOWN, N.Y., May 1, 2024 – Orange County Bancorp, Inc. (the “Company” - Nasdaq: OBT), parent company of Orange Bank & Trust Co. (the “Bank”) and Hudson Valley Investment Advisors, Inc. (“HVIA”), today announced net income of $9.3 million, or $1.65 per basic and diluted share, for the quarter ended March 31, 2024.  This represents a $6.1 million, or 187.6%, increase in net income as compared to $3.2 million, or $0.57 per basic and diluted share, for the quarter ended March 31, 2023.  The increase in earnings was the result of continued growth in net interest income, managed operating expenses, and a reduction in expense related to provision for credit losses, as well as the recovery of $1.9 million from the sale of Signature Bank subordinated debt previously written off.  The quarter also included an increase in non-interest income of approximately 16.3%, or $516 thousand, to $3.7 million for the quarter ended March 31, 2024 as compared to $3.2 million for the quarter ended March 31, 2023.
Book value per share rose $0.55, or 1.9%, from $29.26 at December 31, 2023 to $29.81 at March 31, 2024. Tangible book value per share also increased $0.56, or 2.0%, from $28.12 at December 31, 2023 to $28.68 at March 31, 2024 (see “Non-GAAP Financial Measure Reconciliation” below for additional detail). These increases were the result of earnings growth during the quarter offset by an increase in unrealized losses in the investment portfolio attributed to interest rate changes during the first quarter of 2024.
“Though now a full year into a very dynamic and challenging interest rate environment, I am pleased to report the Bank continues to perform well, producing yet another record quarterly result,” said Orange Bank President and CEO Michael Gilfeather. “While optimism remains for the Federal Reserve to begin reducing interest rates later this year, we are assuming a more conservative posture which we believe will benefit the Bank regardless of the rate environment.  In Q1 2024, the Bank earned $9.3 million versus $3.2 million in the same quarter last year.  Contributing to these earnings was a $1.9 million recovery on an investment position in Signature Bank subordinated debt which we wrote off in Q1 2023 following that institution’s failure.  It was a conservative approach to managing a risk, which has now resulted in the benefit to earnings of a recovery.
1

Q1 2024 also saw a resurgence of deposit growth, with total deposits increasing $110.7 million, or 5.4%, to $2.2 billion at  March 31, 2024, versus $2.0 billion at December 31, 2023.  The increase was primarily the result of growth in lower cost core deposits.  The combined growth of core and brokered deposits helped pay down a significant portion of our more expensive FHLBNY credit line.  FHLBNY borrowings, short term, at quarter end stood at $28 million, down from $224.5 million at year end 2023.  Overall, our average cost of deposits remained relatively low at 1.34%.  While today’s higher interest rate environment will continue to pressure deposit rates and margins, we believe active management and strategic execution will enable us to continue to mitigate these pressures.  Moreover, through our relationship banking and tight management of net interest margin, we can continue to be a leading performer within the industry.
In addition to active risk and cost management, we continue to carefully manage loan origination, which largely offset loan repayments during the quarter.  This enabled us to replace older, lower rate loans with new vintage and higher rate product.  In addition to the growth of lower cost deposits, managing our loan portfolio in this manner has allowed us to temper the margin compression that has impacted the entire banking industry.  This resulted in our net interest margin decreasing only 14 basis points, to 3.64% when compared to the same quarter last year and 8 basis points versus the fourth quarter 2023.  Our loan portfolio stood at $1.7 billion as of March 31, 2024.
Our Wealth Management division also enjoyed a terrific quarter.  Trust and investment advisory income rose $513 thousand, or 21.6%, to $2.9 million for the quarter ended March 31, 2024, from $2.4 million for the quarter ended March 31, 2023.  This growth was split almost equally between new asset and new client acquisition as well as market performance.  As part of non-interest income, Wealth Management provides the Bank an ancillary source of revenue while providing clients with additional value-added resources.  The latter ties directly into our trusted advisor strategy, helping create deeper, longer lasting relationships between Orange Bank and its clients.

I am proud of our team’s ability to execute across our platform in a challenging rate environment, with record results for the quarter all the more impressive.  Our unwavering commitment to clients, familiarity with the markets we serve, and focus on cost management and execution allow us to remain nimble in the face of uncertainty and continue to effectively manage margins and generate profitability.  This is a tribute to our employees, and I thank them and our clients and shareholders for their ongoing trust, support, and business.”
2

First Quarter 2024 Financial Review
Net Income
Net income for the first quarter of 2024 was $9.3 million, an increase of $6.1 million, or 187.6%, from net income of $3.2 million for the first quarter of 2023. This increase represents a combination of higher net interest income and increased noninterest income versus the same quarter last year.  In addition, net income for the first quarter of 2024 was positively impacted by a net credit related to the provision for credit losses as a result of a recovery associated with the write-off of Signature Bank subordinated debt during the first quarter of 2023.
Net Interest Income
For the three months ended March 31, 2024, net interest income rose $462 thousand, or 2.2%, to $21.6 million versus $21.1 million during the same period last year.  Coupled with an increase in total interest income of $4.7 million, total interest expense increased $4.3 million due to higher deposit and borrowing costs in the current period.
Total interest income rose $4.7 million, or 17.9%, to $31.1 million for the three months ended March 31, 2024, compared to $26.4 million for the three months ended March 31, 2023.  The increase reflected 17.3% growth in interest and fees associated with loans, a 5.0% increase in income from taxable investment securities, and a 94.1% increase in income related to fed funds interest and balances held at correspondent banks.
Total interest expense increased $4.3 million during the first quarter of 2024, to $9.5 million, as compared to $5.2 million in the first quarter of 2023. The increase represented the continued impact of rising interest rates on customer deposits as well as higher cost associated with FHLB borrowings and brokered deposits as alternate sources of funding.  Interest expense associated with savings and NOW accounts totaled $4.6 million during the first quarter of 2024 as compared to $2.4 million during the first quarter of 2023.  Interest expense from FHLB advances and borrowings during the current quarter totaled $2.3 million as compared to $2.1 million during the first quarter of 2023.  Interest expense related to brokered deposits totaled $2.3 million during the first quarter of 2024 as compared to $387 thousand during the first quarter of 2023.
Provision for Credit Losses
As of January 1, 2023, the Company adopted the current expected credit losses methodology (“CECL”) accounting standard, which includes loans individually evaluated, as well as loans evaluated on a pooled basis to assess the adequacy of the allowance for credit losses. The Bank seeks to estimate lifetime losses in its loan and investment portfolio by using expected discounted cash flows and supplemental qualitative considerations, including relevant economic considerations, portfolio concentrations, and other external factors, as well as evaluating investment securities held by the Bank.
3
The Company recognized a net credit related to the provision for credit losses of $1.6 million for the three months ended March 31, 2024, as compared to a provision of $6.4 million for the three months ended March 31, 2023.  This decrease includes the recognition of a $1.9 million recovery associated with the write-off of Signature Bank subordinated debt during 2023 as well as the impact of the methodology associated with estimated lifetime losses and loans outstanding at the end of the quarter.  The recovery was received as proceeds from the sale of the subordinated debt securities and as part of that transaction, management evaluated the need for an Allowance for Credit Losses (“ACL”) associated with investment securities.  The evaluation determined that an ACL was not required for the portfolio and, accordingly, the amount was reversed from the provision and reduced the ACL on investment securities to zero.  The 2023 provision includes the effect of a $5 million reserve associated with the write-off of an investment in Signature Bank subordinated debt.  The allowance for credit losses to total loans was 1.47% as of March 31, 2024 versus 1.44% as of December 31, 2023.  No additional reserves for investment securities were recorded during 2023.
Non-Interest Income
Non-interest income rose $516 thousand, or 16.3%, to $3.7 million for the three months ended March 31, 2024 as compared to $3.2 million for the three months ended March 31, 2023.  This growth was related to increased fee income within each of the Company’s fee income categories, including investment advisory, trust, and service charges on deposit accounts.
Non-Interest Expense
Non-interest expense was $15.3 million for the first quarter of 2024, reflecting an increase of $1.3 million, or 9.1%, as compared to $14.0 million for the same period in 2023.  The increase in non-interest expense for the three-month period continues to reflect the Company’s investment in growth. This investment consists primarily of increases in compensation, occupancy, information technology, and deposit insurance costs. Our efficiency ratio increased to 60.5% for the three months ended March 31, 2024, from 57.7% for the same period in 2023.
Income Tax Expense
Provision for income taxes for the three months ended March 31, 2024 was $2.3 million, compared to $696 thousand for the same period in 2023.  The increase was directly related to provisions associated with the Company’s increased earnings for the quarter.  Our effective tax rate for the three-month period ended March 31, 2024 was 20.0%, as compared to 17.7% for the same period in 2023.
4
Financial Condition
Total consolidated assets decreased slightly by $33.0 million, or 1.3%, and remained relatively level at $2.5 billion at December 31, 2023 and March 31, 2024.  The decrease reflected a slight contraction in loans and cash during the first quarter of 2024.
Total cash and due from banks decreased from $147.4 million at December 31, 2023, to $144.7 million at March 31, 2024, a decrease of approximately $2.7 million, or 1.8%. This decrease resulted primarily from increases in deposit balances and a decrease in borrowings.
Total investment securities fell $22.7 million, or 4.5%, from $504.5 million at December 31, 2023 to $481.8 million at March 31, 2024. The decrease was driven primarily by investment maturities during the first three months of 2024.
Total loans decreased $14.5 million, or 0.83%, to $1.7 billion at March 31, 2024.  The decrease was due primarily to payoff of approximately $13.5 million related to commercial and industrial loans.
Total deposits increased $110.7 million, to $2.2 billion at March 31, 2024 from approximately $2.0 billion at December 31, 2023.  This increase was due primarily to $67.9 million of growth in interest bearing demand deposits; $68.9 million increase in money market accounts; $15.8 million growth in savings accounts; and $22.1 million increase in time deposits mainly associated with brokered deposits which the Bank utilized to increase cash balances and reduce borrowings during the first quarter.  The increases in deposits were offset by a $63.3 million decrease in noninterest-bearing demand accounts during the quarter.  Deposit composition at March 31, 2024 included 46.9% in demand deposit accounts (including NOW accounts) as a percentage of total deposits.  Uninsured deposits, net of fully collateralized municipal relationships, remain stable and represent approximately 37% of total deposits at March 31, 2024 and at December 31, 2023.
FHLBNY short-term borrowings were $28.0 million at March 31, 2024 down from $224.5 million at December 31, 2023.  The decrease in borrowings was driven mainly by increased deposits which outpaced loan growth during the quarter and allowed for paydowns of borrowings while maintaining consistent levels of cash at March 31, 2024.
Stockholders’ equity increased $3.3 million, or 2.0%, to $168.7 million at March 31, 2024 from $165.4 million at December 31, 2023. The increase was due primarily to $9.3 million of net income during first quarter 2024 partially offset by an increase in unrealized losses of approximately $5.0 million on the market value of investment securities within the Company’s equity as accumulated other comprehensive income (loss) (“AOCI”), net of taxes.
At March 31, 2024, the Bank maintained capital ratios in excess of regulatory standards for well capitalized institutions. The Bank’s Tier 1 capital-to-average-assets ratio was 9.72%, both common equity and Tier 1 capital-to-risk-weighted-assets were 13.49%, and total-capital-to-risk-weighted-assets was 14.74%.

5
Wealth Management
At March 31, 2024, our Wealth Management Division, which includes trust and investment advisory, totaled $1.7 billion in assets under management or advisory as compared to $1.6 billion at December 31, 2023, reflecting an increase of 5.9%.  Trust and investment advisory income for the quarter ended March 31, 2024 totaled $2.9 million and represented an increase of 21.6%, or $513 thousand, as compared to $2.4 million for the quarter ended March 31, 2023.

The breakdown of trust and investment advisory assets as of March 31, 2024 and December 31, 2023, respectively, is as follows:

ORANGE COUNTY BANCORP, INC.
SUMMARY OF AUM/AUA
(UNAUDITED)
(Dollar Amounts in thousands)
         
At March 31, 2024
  
At December 31, 2023
         
Amount
  
Percent
  
Amount
  
Percent
 Investment Assets Under Management & Advisory
  
 $      989,950
  
59.16%
  
 $      909,384
  
57.56%
 Trust Asset Under Administration & Management
  
         683,408
  
40.84%
  
         670,515
  
42.44%
 Total
        
 $   1,673,358
  
100.00%
  
 $   1,579,899
  
100.00%
                       
Loan Quality
At March 31, 2024, the Bank had total non-performing loans of $5.8 million, or 0.33% of total loans.  Total non-accrual loans represented approximately $5.8 million of loans at March 31, 2024, compared to $4.4 million at December 31, 2023.
Liquidity
Management believes the Bank has the necessary liquidity to meet normal business needs.  The Bank uses a variety of resources to manage its liquidity position.  These include short term investments, cash from lending and investing activities, core-deposit growth, and non-core funding sources, such as time deposits exceeding $250,000, brokered deposits, FHLBNY advances, and other borrowings.  As of March 31, 2024, the Bank’s cash and due from banks totaled $144.7 million.  The Bank maintains an investment portfolio of securities available for sale, comprised mainly of US Government agency and treasury securities, Small Business Administration loan pools, mortgage-backed securities, and municipal bonds.  Although the portfolio generates interest income for the Bank, it also serves as an available source of liquidity and funding.  As of March 31, 2024, the Bank’s investment in securities available for sale was $476.1 million, of which $111.3 million was not pledged as collateral.  Additionally as of March 31, 2024, the Bank’s overnight advance line capacity at the Federal Home Loan Bank of New York was $622.4 million, of which $108.0 million was used to collateralize municipal deposits and $38.0 million was utilized for overnight and long term FHLBNY advances.  As of March 31, 2024, the Bank’s unused borrowing capacity at the FHLBNY was $476.4 million. The Bank also maintains additional borrowing capacity of $25 million with other correspondent banks.  Additional funding is available to the Bank through the discount window lending by the Federal Reserve.  At March 31, 2024, the Bank utilized $50 million of funding through the Bank Term Funding Program from the Federal Reserve under a one-year facility.
The Bank also considers brokered deposits an element of its deposit strategy.  As of March 31, 2024, the Bank had brokered deposit arrangements with various terms totaling $207.1 million.
6
Non-GAAP Financial Measure Reconciliations
      
The following table reconciles, as of the dates set forth below, stockholders’ equity (on a GAAP basis) to tangible equity and total assets (on a GAAP basis) to tangible assets and calculates our tangible book value per share.
               
         
March 31, 2024
  
December 31, 2023
         
(Dollars in thousands except for share data)
Tangible Common Equity:
            
Total stockholders’ equity
    
 $                   168,668
  
 $                 165,376
Adjustments:
            
Goodwill
        
                         (5,359)
  
                      (5,359)
Other intangible assets
      
                         (1,035)
  
                      (1,107)
Tangible common equity
      
 $                   162,274
  
 $                 158,910
Common shares outstanding
    
                   5,657,458
  
                 5,651,311
Book value per common share
    
 $                       29.81
  
 $                     29.26
Tangible book value per common share
    
 $                       28.68
  
 $                     28.12
               
Tangible Assets
            
Total assets
        
 $                2,452,513
  
 $              2,485,468
Adjustments:
            
Goodwill
        
                         (5,359)
  
                      (5,359)
Other intangible assets
      
                         (1,035)
  
                      (1,107)
Tangible assets
      
 $                2,446,119
  
 $              2,479,002
Tangible common equity to tangible assets
  
6.63%
  
6.41%
               

7

About Orange County Bancorp, Inc.
Orange County Bancorp, Inc. is the parent company of Orange Bank & Trust Company and Hudson Valley Investment Advisors, Inc. Orange Bank & Trust Company is an independent bank that began with the vision of 14 founders over 125 years ago. It has grown through innovation and an unwavering commitment to its community and business clientele to approximately $2.5 billion in total assets. Hudson Valley Investment Advisors, Inc. is a Registered Investment Advisor in Goshen, NY. It was founded in 1996 and acquired by the Company in 2012.
Forward Looking Statements
Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, inflation, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, increased levels of loan delinquencies, problem assets and foreclosures, credit risk management, asset-liability management, cybersecurity risks, geopolitical conflicts, public health issues, the financial and securities markets and the availability of and costs associated with sources of liquidity.
The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions that may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

For further information:
Michael Lesler
EVP & Chief Financial Officer
mlesler@orangebanktrust.com
Phone: (845) 341-5111


8
ORANGE COUNTY BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(UNAUDITED)
(Dollar Amounts in thousands except per share data)
                       
                 
March 31, 2024
  
December 31, 2023
                       
   
ASSETS
                
                       
Cash and due from banks
        
 $                  144,726
  
 $                  147,383
Investment securities - available-for-sale
    
                     476,077
  
                     489,948
(Amortized cost $553,727 at March 31, 2024 and $560,994 at December 31, 2023)
Restricted investment in bank stocks
      
                         5,711
  
                       14,525
Loans
          
                  1,732,550
  
                  1,747,062
Allowance for credit losses
      
                      (25,473)
  
                      (25,182)
 
Loans, net
          
                  1,707,077
  
                  1,721,880
                       
Premises and equipment, net
      
                       16,019
  
                       16,160
Accrued interest receivable
        
                       10,135
  
                         5,934
Bank owned life insurance
        
                       41,689
  
                       41,447
Goodwill
          
                         5,359
  
                         5,359
Intangible assets
          
                         1,035
  
                         1,107
Other assets
          
                       44,685
  
                       41,725
                       
   
TOTAL ASSETS
        
 $               2,452,513
  
 $               2,485,468
                       
   
LIABILITIES AND STOCKHOLDERS' EQUITY
        
                       
Deposits:
                
 
Noninterest bearing
        
 $                  635,952
  
 $                  699,203
 
Interest bearing
        
                  1,513,479
  
                  1,339,546
   
Total deposits
        
                  2,149,431
  
                  2,038,749
                       
FHLB advances, short term
      
                       28,000
  
                     224,500
FHLB advances, long term
        
                       10,000
  
                       10,000
BTFP borrowing
        
                       50,000
  
                               -
Subordinated notes, net of issuance costs
    
                       19,538
  
                       19,520
Accrued expenses and other liabilities
      
                       26,876
  
                       27,323
                       
   
TOTAL LIABILITIES
        
                  2,283,845
  
                  2,320,092
                       
   
STOCKHOLDERS' EQUITY
            
                       
Common stock, $0.50 par value; 15,000,000 shares authorized;
    
 
5,683,304 issued; 5,657,458 and 5,651,311 outstanding,
    
 
at March 31, 2024 and December 31, 2023, respectively
                         2,842
  
                         2,842
Surplus
          
                     120,525
  
                     120,392
Retained Earnings
        
                     115,351
  
                     107,361
Accumulated other comprehensive income (loss), net of taxes
                      (69,092)
  
                      (64,108)
Treasury stock, at cost; 25,846 and 31,993 shares at March 31,
    
 
2024 and December 31, 2023, respectively
    
                           (958)
  
                        (1,111)
   
TOTAL STOCKHOLDERS' EQUITY
    
                     168,668
  
                     165,376
                       
   
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 $               2,452,513
  
 $               2,485,468
                       
                       

9
ORANGE COUNTY BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Dollar Amounts in thousands except per share data)
               
For Three Months Ended March 31,
               
2024
  
2023
  
INTEREST INCOME
            
 
Interest and fees on loans
 $                   25,614
  
 $                     21,836
  
 
Interest on investment securities:
      
   
Taxable
        
                       3,226
  
                         3,073
  
   
Tax exempt
      
                          568
  
                            597
  
 
Interest on Federal funds sold and other
                       1,665
  
                            858
  
                       
   
TOTAL INTEREST INCOME
                      31,073
  
                        26,364
  
                       
INTEREST EXPENSE
            
 
Savings and NOW accounts
                       4,577
  
                         2,430
  
 
Time deposits
      
                       2,414
  
                            459
  
 
FHLB advances and borrowings
                       2,251
  
                         2,105
  
 
Note payable
      
                            -
  
                              -
  
 
Subordinated notes
      
                          230
  
                            231
  
   
TOTAL INTEREST EXPENSE
                       9,472
  
                         5,225
  
                       
   
NET INTEREST INCOME
                      21,601
  
                        21,139
  
                       
Provision for credit losses
    
                      (1,640)
  
                         6,355
  
   
NET INTEREST INCOME AFTER
      
     
PROVISION FOR CREDIT LOSSES
                      23,241
  
                        14,784
  
                       
NONINTEREST INCOME
            
 
Service charges on deposit accounts
                          235
  
                            174
  
 
Trust income
      
                       1,312
  
                         1,176
  
 
Investment advisory income
                       1,575
  
                         1,198
  
 
Investment securities gains(losses)
                            -
  
                            107
  
 
Earnings on bank owned life insurance
                          241
  
                            238
  
 
Other
        
                          323
  
                            277
  
   
TOTAL NONINTEREST INCOME
                       3,686
  
                         3,170
  
                       
NONINTEREST EXPENSE
          
 
Salaries
        
                       6,738
  
                         6,254
  
 
Employee benefits
      
                       2,122
  
                         1,867
  
 
Occupancy expense
    
                       1,161
  
                         1,254
  
 
Professional fees
      
                       1,436
  
                         1,048
  
 
Directors' fees and expenses
                          322
  
                            230
  
 
Computer software expense
                       1,235
  
                         1,223
  
 
FDIC assessment
      
                          418
  
                            330
  
 
Advertising expenses
    
                          364
  
                            276
  
 
Advisor expenses related to trust income
                            33
  
                              29
  
 
Telephone expenses
    
                          187
  
                            169
  
 
Intangible amortization
    
                            71
  
                              71
  
 
Other
        
                       1,223
  
                         1,277
  
   
TOTAL NONINTEREST EXPENSE
                      15,310
  
                        14,028
  
                       
 
Income before income taxes
                      11,617
  
                         3,926
  
                       
Provision for income taxes
    
                       2,327
  
                            696
  
   
NET INCOME
      
 $                     9,290
  
 $                       3,230
  
                       
Basic and diluted earnings per share
 $                      1.65
  
 $                        0.57
  
                       
Weighted average shares outstanding
                 5,634,937
  
                   5,625,660
  
10

ORANGE COUNTY BANCORP, INC.
NET INTEREST MARGIN ANALYSIS
(UNAUDITED)
(Dollar Amounts in thousands)
                       
 
Three Months Ended March 31,
 
2024
          
2023
        
 
Average Balance
Interest
  
Average Rate
Average Balance
Interest
  
Average Rate
Assets:
                      
Loans Receivable (net of PPP)
 $    1,738,199
  
 $  25,611
  
5.91%
  
 $ 1,619,240
  
 $  21,824
  
5.47%
PPP Loans
                 209
  
              3
  
5.76%
  
           1,713
  
            12
  
2.84%
Investment securities
          481,530
  
       3,432
  
2.86%
  
       530,762
  
       3,568
  
2.73%
Due from banks
          149,596
  
       1,665
  
4.46%
  
       102,097
  
          858
  
3.41%
Other
            10,894
  
          362
  
13.33%
  
         11,652
  
          102
  
3.55%
Total interest earning assets
       2,380,428
  
     31,073
  
5.24%
  
    2,265,464
  
     26,364
  
4.72%
Non-interest earning assets
            94,647
          
         95,583
        
  Total assets
 $    2,475,075
          
 $ 2,361,047
        
                       
Liabilities and equity:
                      
Interest-bearing demand accounts
 $       360,287
  
 $       437
  
0.49%
  
 $    321,224
  
 $       242
  
0.31%
Money market accounts
          620,028
  
       3,355
  
2.17%
  
       605,968
  
       1,673
  
1.12%
Savings accounts
          235,829
  
          785
  
1.34%
  
       257,971
  
          515
  
0.81%
Certificates of deposit
          209,642
  
       2,414
  
4.62%
  
         95,550
  
          459
  
1.95%
  Total interest-bearing deposits
       1,425,786
  
       6,991
  
1.97%
  
    1,280,713
  
       2,889
  
0.91%
FHLB Advances and other borrowings
          167,484
  
       2,251
  
5.39%
  
       177,933
  
       2,106
  
4.80%
Note payable
                   -
  
            -
  
0.00%
  
                -
  
            -
  
0.00%
Subordinated notes
            19,526
  
          230
  
4.72%
  
         19,454
  
          231
  
4.82%
  Total interest bearing liabilities
       1,612,796
  
       9,472
  
2.36%
  
    1,478,100
  
       5,226
  
1.43%
Non-interest bearing demand accounts
          668,439
          
       713,717
        
Other non-interest bearing liabilities
            28,446
          
         25,115
        
  Total liabilities
       2,309,681
          
    2,216,932
        
  Total shareholders' equity
          165,394
          
       144,115
        
  Total liabilities and shareholders' equity
 $    2,475,075
          
 $ 2,361,047
        
                       
Net interest income
    
 $  21,601
          
 $  21,138
    
Interest rate spread 1
        
2.88%
          
3.29%
Net interest margin 2
        
3.64%
          
3.78%
Average interest earning assets to interest-bearing liabilities
147.6%
          
153.3%
        
                       
Notes:
                      
1 The Interest rate spread is the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities
2 Net interest margin is the annualized net interest income divided by average interest-earning assets
    

11
ORANGE COUNTY BANCORP, INC.
SELECTED RATIOS AND OTHER DATA
(UNAUDITED)
               
Three Months Ended   March 31,
  
               
2024
  
2023
    
Performance Ratios:
                
Return on average assets (1)
      
1.50%
  
0.55%
    
Return on average equity (1)
      
22.47%
  
8.97%
    
Interest rate spread (2)
      
2.88%
  
3.29%
    
Net interest margin (3)
      
3.64%
  
3.78%
    
Dividend payout ratio (4)
      
13.95%
  
40.06%
    
Non-interest income to average total assets
0.15%
  
0.13%
    
Non-interest expenses to average total assets
0.62%
  
0.59%
    
Average interest-earning assets to average interest-bearing liabilities
147.60%
  
153.27%
    
                         
                         
                         
Asset Quality Ratios:
                
Non-performing assets to total assets
    
0.24%
  
0.32%
    
Non-performing loans to total loans
    
0.33%
  
0.48%
    
Allowance for credit losses to non-performing loans
440.86%
  
315.0%
    
Allowance for credit losses to total loans
  
1.47%
  
1.51%
    
                         
Capital Ratios (5):
                  
Total capital (to risk-weighted assets)
    
14.74%
  
13.61%
    
Tier 1 capital (to risk-weighted assets)
    
13.49%
  
12.35%
    
Common equity tier 1 capital (to risk-weighted assets)
13.49%
  
12.35%
    
Tier 1 capital (to average assets)
    
9.72%
  
9.07%
    
                         
Notes:
                    
(1) 
  
Annualized for the three month periods ended March 31, 2024 and 2023, respectively.
(2) 
  
Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the periods.
(3) 
  
The net interest margin represents net interest income as a percent of average interest-earning assets for the periods.
(4) 
  
The dividend payout ratio represents dividends paid per share divided by net income per share.
(5) 
  
Ratios are for the Bank only.
              
12
ORANGE COUNTY BANCORP, INC.
SELECTED OPERATING DATA
(UNAUDITED)
(Dollar Amounts in thousands except per share data)
               
Three Months Ended March 31,
  
               
2024
  
2023
  
Interest income
        
 $                     31,073
  
 $                     26,364
  
Interest expense
      
                          9,472
  
                          5,225
  
Net interest income
      
                        21,601
  
                        21,139
  
Provision for credit losses
      
                        (1,640)
  
                          6,355
  
Net interest income after provision for credit losses
                        23,241
  
                        14,784
  
Noninterest income
      
                          3,686
  
                          3,170
  
Noninterest expenses
      
                        15,310
  
                        14,028
  
Income before income taxes
    
                        11,617
  
                          3,926
  
Provision for income taxes
      
                          2,327
  
                             696
  
Net income
        
 $                       9,290
  
 $                       3,230
  
                       
Basic and diluted earnings per share
    
 $                         1.65
  
 $                         0.57
  
Weighted average common shares outstanding
                   5,634,937
  
                   5,625,660
  
                       
               
 At
  
 At
  
               
March 31, 2024
  
December 31, 2023
  
Book value per share
      
 $                       29.81
  
 $                       29.26
  
Net tangible book value per share (1)
  
 $                       28.68
  
 $                       28.12
  
Outstanding common shares
    
                   5,657,458
  
                   5,651,311
  
                       
Notes:
                
(1)      Net tangible book value represents the amount of total tangible assets reduced by our total liabilities. Tangible assets are calculated by reducing total assets, as defined by GAAP, by $5,359 in goodwill and $1,035, and $1,107 in other intangible assets for March 31, 2024 and December 31, 2023, respectively.

13
ORANGE COUNTY BANCORP, INC.
LOAN COMPOSITION
(UNAUDITED)
(Dollar Amounts in thousands)
               
At March 31, 2024
  
At December 31, 2023
               
Amount
  
Percent
  
Amount
  
Percent
 Commercial and industrial (a)
 $                  260,021
  
15.01%
  
 $                  273,562
  
15.66%
 Commercial real estate
    
                  1,261,860
  
72.83%
  
                  1,259,356
  
72.08%
 Commercial real estate construction
                       84,005
  
4.85%
  
                       85,725
  
4.91%
 Residential real estate
    
                       78,923
  
4.56%
  
                       78,321
  
4.48%
 Home equity
      
                       13,322
  
0.77%
  
                       13,546
  
0.78%
 Consumer
        
                       34,419
  
1.99%
  
                       36,552
  
2.09%
 Total loans
        
                  1,732,550
  
100.00%
  
                  1,747,062
  
100.00%
 Allowance for loan losses
  
                       25,473
      
                       25,182
    
 Total loans, net
      
 $               1,707,077
      
 $               1,721,880
    
                             
 (a) - Includes PPP loans of:
  
 $                         204
      
 $                         215
    
ORANGE COUNTY BANCORP, INC.
DEPOSITS BY ACCOUNT TYPE
(UNAUDITED)
(Dollar Amounts in thousands)
               
At March 31, 2024
  
At December 31, 2023
     Amount    Percent    Average Rate    Amount    Percent    Average Rate
 Noninterest-bearing demand accounts
  
 $              635,952
  
29.59%
  
0.00%
  
 $     699,203
  
34.30%
  
0.00%
 Interest bearing demand accounts
    
                 372,757
  
17.34%
  
0.47%
  
        304,892
  
14.95%
  
0.49%
 Money market accounts
      
                 653,115
  
30.39%
  
2.23%
  
        584,976
  
28.69%
  
2.04%
 Savings accounts
        
                 243,976
  
11.35%
  
1.30%
  
        228,161
  
11.19%
  
1.19%
 Certificates of Deposit
      
                 243,631
  
11.33%
  
4.62%
  
        221,517
  
10.87%
  
4.57%
 Total
        
 $           2,149,431
  
100.00%
  
1.43%
  
 $  2,038,749
  
100.00%
  
1.29%
                                     

14
ORANGE COUNTY BANCORP, INC.
NON-PERFORMING ASSETS
(UNAUDITED)
(Dollar Amounts in thousands)
                       
                 
March 31, 2024
  
December 31, 2023
                       
Non-accrual loans:
              
Commercial and industrial
        
 $                     2,515
  
 $                       556
Commercial real estate
        
                       2,655
  
                       2,692
Commercial real estate construction
      
                            -
  
                            -
Residential real estate
        
                          589
  
                       1,179
Home equity
          
                            -
  
                            -
Consumer
          
                            -
  
                            -
  Total non-accrual loans
        
                       5,759
  
                       4,427
Accruing loans 90 days or more past due:
          
Commercial and industrial
        
                            -
  
                            -
Commercial real estate
        
                            19
  
                            -
Commercial real estate construction
      
                            -
  
                            -
Residential real estate
        
                            -
  
                            -
Home equity
          
                            -
  
                            -
Consumer
          
                            -
  
                            -
  Total loans 90 days or more past due
      
                            19
  
                            -
Total non-performing loans
        
                       5,778
  
                       4,427
Other real estate owned
        
                            -
  
                            -
Other non-performing assets
      
                            -
  
                            -
Total non-performing assets
        
 $                     5,778
  
 $                     4,427
                       
Ratios:
                
Total non-performing loans to total loans
    
0.33%
  
0.25%
Total non-performing loans to total assets
    
0.24%
  
0.18%
Total non-performing assets to total assets
    
0.24%
  
0.18%
                       
Notes:
                
1 - Includes non-accruing TDRs:
      
 $                     2,355
  
 $                     2,391
15