POUGHKEEPSIE, NY - Rhinebeck Bancorp, Inc. (NASDAQ:RBKB), the parent company of Rhinebeck Bank, has sold $71 million of its available-for-sale securities as part of a strategic balance sheet repositioning. The transaction, which took place in September 2024, involved reinvesting the proceeds into new securities with yields 3.11% higher than those sold.
The bank's president and CEO, Michael J. Quinn, stated that this move is intended to provide long-term benefits to the company, its shareholders, and customers by capitalizing on market conditions to secure higher yields. The restructuring is expected to increase the bank's earnings per share by $0.12 and its net interest margin by 0.17% over the next year, starting in the fourth quarter of 2024.
The securities that were sold had a yield of 1.11% and an average life of approximately 5.8 years. The new investments have a yield of 4.22% with a weighted average life of 2.7 years. Despite recognizing a one-time pre-tax loss of $12.0 million from the sale, Rhinebeck Bank maintains a strong capital position and robust liquidity metrics, including over $40 million in cash and cash equivalents, and an unused secured line of credit of over $200 million with the Federal Home Loan Bank of New York.
Rhinebeck Bancorp, Inc. is a financial services provider operating through Rhinebeck Bank and its thirteen branches and two representative offices in New York State. The bank offers a full range of banking services as well as brokerage, investment advisory services, and financial products through Rhinebeck Asset Management.
This news is based on a press release statement from Rhinebeck Bancorp, Inc. The company cautions that the press release contains forward-looking statements that are subject to risks and uncertainties and that actual results could differ materially from those anticipated.
In other recent news, Rhinebeck Bancorp has made notable changes in its executive leadership. The Maryland-based institution announced the non-renewal of contracts for President and CEO Michael J. Quinn, and Jamie J. Bloom, EVP, COO & Chief Banking Officer. This decision, effective as of December 31, 2026, is part of a shift in corporate strategy to standardize employment contracts, unrelated to the performance of these executives.
In a parallel development, Rhinebeck Bancorp has appointed Kevin Nihill as the new Chief Financial Officer, succeeding Michael McDermott. Nihill, with over 20 years of experience in banking and corporate finance, previously served as Executive Vice President and Chief Financial Officer at St. Mary's Bank and Senior Vice President, Treasurer at Berkshire Bank. His duties at Rhinebeck Bancorp will encompass overseeing financial operations, such as reporting, regulatory compliance, tax duties, and budgeting.
These recent developments reflect Rhinebeck Bancorp's commitment to leadership excellence and strategic business objectives.
InvestingPro Insights
Rhinebeck Bancorp's recent strategic move to reposition its balance sheet aligns with several key financial indicators highlighted by InvestingPro. The company's stock has shown significant momentum, with InvestingPro Tips noting a "Significant return over the last week" and "Strong return over the last three months." This positive trend is further supported by the data showing a 9.72% 1-week price total return and an impressive 18.31% 3-month price total return as of the latest available data.
The bank's decision to sell lower-yielding securities and reinvest in higher-yielding assets is particularly noteworthy given that Rhinebeck Bancorp is "Trading near 52-week high," according to InvestingPro Tips. This strategic move could potentially enhance the company's profitability, which is crucial as the company is already "Profitable over the last twelve months."
InvestingPro Data reveals a P/E Ratio of 23.22, suggesting that investors are willing to pay a premium for the company's earnings. This could be attributed to the market's positive outlook on the bank's recent strategic decisions and potential for improved future performance.
It's worth noting that Rhinebeck Bancorp "Does not pay a dividend to shareholders," as per InvestingPro Tips. This policy allows the company to reinvest its earnings into growth initiatives, such as the recent balance sheet restructuring, which aims to improve long-term shareholder value.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Rhinebeck Bancorp, providing deeper insights into the company's financial health and market position.
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