Rhinebeck's Net Interest Income Growth Accelerates

The Tip Desk · October 29, 2026 · 3 min read

Net interest income rose 8.1% to $13.0 million in the third quarter as the July conversion lifted equity to $220.8 million.

Rhinebeck Bancorp, Inc. (RBKB), the holding company of Rhinebeck Bank, reported net income of $3.2 million, or $0.21 a share, for the three months ended September 30, 2026, up 17.0% from $2.7 million, or $0.18 a share, a year earlier.

The company said the increase was primarily due to higher net interest income, offset by an increase in non-interest expense. Return on average assets was 0.86% and return on average equity was 6.01%.

Net interest income rose 8.1% year over year to $13.0 million, reversing a 1.2% year-over-year increase in the second quarter. Average interest-earning assets increased 12.2% to $1.36 billion, with average cash and cash equivalents up $110.0 million and available-for-sale securities up $79.7 million, while average loans fell $40.4 million. The company said the increases reflected cash from the stock offering and deposit growth, a portion of which was used to purchase securities.

The net interest margin compressed 14 basis points year over year to 3.79%, after a 2 basis points year-over-year decline to 3.77% in the first quarter. The company attributed the larger drop in part to a higher concentration of lower-yielding liquid assets after the capital raise and deposit growth. The average yield on interest-earning assets fell 37 basis points to 5.43% on a higher mix of lower-yielding assets. The cost of interest-bearing liabilities declined 13 basis points to 2.40% as FHLB advances fell and lower-cost deposits grew.

On July 21, 2026, the former mutual holding company parent completed a second-step conversion. The company sold 8,880,210 shares at $10.00 a share for gross proceeds of $88.8 million. Stockholders’ equity rose to $220.8 million from $136.9 million at December 31, 2025. The tangible common equity to tangible assets ratio was 14.48% for the nine months ended September 30, 2026, versus 10.35% at year-end 2025.

Total deposits increased $147.0 million, or 13.4%, from December 31, 2025, including $31.1 million of non-interest-bearing growth. Loans receivable declined $8.9 million, or 0.9%, to $944.5 million from year-end 2025. Indirect automobile loans fell $34.5 million and commercial real estate loans fell $2.3 million, offset by $24.8 million of residential real estate growth and $3.6 million of commercial and industrial growth.

Net charge-offs fell to $211,000 from $963,000 a year earlier, driven by $629,000 lower commercial real estate charge-offs and $95,000 lower indirect auto charge-offs. The provision for credit losses decreased 13.9% year over year to $778,000. Past-due loans declined 28.2% from year-end 2025 to $10.4 million, or 1.10% of loans. Non-performing assets rose $600,000, or 16.2%, to $4.3 million.

Non-interest income increased 6.5% year over year to $2.1 million, including a $318,000 gain on life insurance and $50,000 higher deposit service charges, offset by $123,000 lower other income on swap income and $89,000 lower net gain on loan sales after the bank stopped originating residential mortgages directly. Non-interest expense rose 6.0% year over year to $10.3 million, led by $314,000 higher salaries and benefits, $184,000 higher other expense, $102,000 higher data processing, and $74,000 higher professional fees. The efficiency ratio improved to 68.37% from 69.61% a year earlier.

President and Chief Executive Officer Matthew Smith said the company is focused on deploying the capital raised in the conversion to expand its commercial banking franchise, deepen existing client relationships, and develop new digital banking capabilities.