Orange County Bancorp, Inc. (OBT), a leading community bank and wealth management firm in the Lower Hudson Valley region, has reported its financial results for the first quarter of 2024, showcasing strong performance across key metrics.
Financials
For the quarter ended March 31, 2024, the company reported net income of $9.29 million, or $1.65 per diluted share, compared to $3.23 million, or $0.57 per diluted share, in the same period of the previous year. This represents a significant year-over-year increase of 187.6% in net income. The company's annual net income for the fiscal year 2023 was $29.48 million.
The company's total revenue for the first quarter of 2024 reached $34.76 million, up from $29.53 million in the same quarter of 2023, reflecting a 17.9% increase. For the full fiscal year 2023, the company reported annual revenue of $131.19 million.
Orange County Bancorp's net interest income for the first quarter of 2024 was $21.60 million, compared to $21.14 million in the same period of the previous year, representing a 2.2% increase. This growth was primarily driven by a 5.1% increase in the average balance of interest-earning assets, which reached $2.38 billion in Q1 2024, up from $2.27 billion in Q1 2023. The company's annual operating cash flow for the fiscal year 2023 was $44.50 million, while its annual free cash flow was $40.96 million.
The company's net interest margin (NIM) for the first quarter of 2024 was 3.64%, compared to 3.78% in the same period of the previous year. The decrease in NIM was primarily due to the higher interest rate environment and its impact on funding and deposit costs.
Orange County Bancorp's provision for credit losses was a net credit of $1.64 million in the first quarter of 2024, compared to a provision of $6.36 million in the same period of 2023. This significant decrease was mainly due to the recovery of $1.9 million related to the previously written-off Signature Bank subordinated debt.
Noninterest income increased by 16.3% to $3.69 million in the first quarter of 2024, compared to $3.17 million in the same period of the previous year. This growth was primarily driven by a 21.6% increase in the company's Wealth Management division revenues, which include trust and asset management services.
Noninterest expense increased by 9.1% to $15.31 million in the first quarter of 2024, compared to $14.03 million in the same period of 2023. This increase was mainly due to continued investment in the company's growth, including higher salaries, benefits, professional fees, and deposit insurance costs.
The company's efficiency ratio, which measures the ratio of noninterest expense to net interest income plus noninterest income, was 60.5% in the first quarter of 2024, compared to 57.7% in the same period of the previous year.
Balance Sheet
As of March 31, 2024, Orange County Bancorp's total assets stood at $2.45 billion, compared to $2.49 billion as of December 31, 2023, a decrease of 1.3%. This decrease was primarily driven by a $14.8 million, or 0.9%, reduction in net loans, as well as a $13.9 million, or 2.8%, decrease in investment securities.
The company's loan portfolio remained well-diversified, with commercial real estate loans accounting for 72.8% of total loans, followed by commercial and industrial loans at 15.0%, residential real estate loans at 4.6%, and consumer loans at 2.0% as of March 31, 2024.
Orange County Bancorp's total deposits increased by 5.4% to $2.15 billion as of March 31, 2024, compared to $2.04 billion as of December 31, 2023. This growth was primarily driven by a $67.9 million, or 22.3%, increase in interest-bearing demand deposits and a $68.1 million, or 11.6%, increase in money market deposits.
Asset Quality and Capital Position
The company's asset quality remained strong, with non-performing assets (NPAs) at $5.78 million, or 0.24% of total assets, as of March 31, 2024, compared to $4.43 million, or 0.18% of total assets, as of December 31, 2023. The increase in NPAs was primarily due to a $2.0 million increase in non-accrual commercial and industrial loans.
Orange County Bancorp's capital position remained robust, with a total risk-based capital ratio of 14.74% and a Tier 1 leverage ratio of 9.72% as of March 31, 2024, well above the regulatory requirements for a "well-capitalized" institution.
Outlook
Looking ahead, the company has not provided any specific financial guidance for the remainder of 2024. However, management has expressed confidence in the company's ability to navigate the current economic environment and continue delivering strong results for its shareholders.
Conclusion
In conclusion, Orange County Bancorp's solid first-quarter 2024 performance, characterized by significant growth in net income, revenue, and a strong balance sheet, positions the company well to capitalize on the opportunities in its market area and create long-term value for its shareholders.