Orange County Bancorp (OBT) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $8.2 million ($1.46 per share), down 9.6% from Q2 2023, mainly due to higher provision for credit losses and non-interest expense, despite growth in net interest and non-interest income.

• First half 2024 net income rose 42.1% year-over-year to $17.5 million ($3.10 per share), driven by higher net interest income and a recovery on previously written-off securities.

• Total assets were $2.5 billion at June 30, 2024, with loans at $1.7 billion, deposits at $2.2 billion, and stockholders' equity at $177.5 million.

• Wealth management assets under management increased to $1.7 billion from $1.4 billion year-over-year.

Financial highlights

• Net interest income for Q2 2024 increased 6.7% year-over-year to $24.1 million; net interest margin rose to 4.10% from 3.81%.

• Interest income grew 9.3% to $32.5 million for Q2 2024, while interest expense rose 17.6% to $8.4 million.

• Noninterest income increased 15.9% to $3.8 million in Q2 2024, led by trust and investment advisory fees.

• Noninterest expense rose 7.2% to $15.5 million in Q2 2024, mainly due to higher salaries, benefits, IT, and deposit insurance costs.

• Book value per share rose 7.1% to $31.35 at June 30, 2024; tangible book value per share up 7.5% to $30.23.

Outlook and guidance

• Management anticipates continued elevated interest rates and competitive pressure on net interest margins.

• Focus remains on moderating loan growth, growing core deposits, and replacing expensive borrowings with lower-cost funding.

• Regional loan demand is strong, but origination is being slowed due to Federal Reserve policy uncertainty and industry volatility.

• Liquidity remains strong, with sufficient funds expected to meet current funding commitments.

• No material changes to risk factors or forward-looking statements since the last annual report.