-- Net Income increased $13.7 million, or 49.3%, to $41.6 million for the
year ended December 31, 2025, from $27.9 million for the year ended
December 31, 2024
-- Net Interest Margin grew 35 basis points to 4.18% for the year ended
December 31, 2025, from 3.83% for the year ended December 31, 2024
-- Net Interest Margin also grew 66 basis points to 4.44% for the quarter
ended December 31, 2025, from 3.78% for the quarter ended December 31,
2024
-- Total Loans increased $134.5 million, or 7.4%, to $2.0 billion at
December 31, 2025 as compared to $1.8 billion at December 31, 2024
-- Total Deposits increased $157.0 million, or 7.3%, to $2.3 billion at
December 31, 2025, from $2.2 billion at year-end 2024
-- Book value per share grew $4.92, or 30.1%, to $21.27 at December 31,
2025, from $16.35 at December 31, 2024
-- Trust and investment advisory income rose $1.9 million, or 15.2%, to
$14.1 million for the year ended December 31, 2025, as compared to $12.3
million for the year ended December 31, 2024
MIDDLETOWN, N.Y., Feb. 04, 2026 (GLOBE NEWSWIRE) -- Orange County Bancorp, Inc. (the "Company" - Nasdaq: OBT), parent company of Orange Bank & Trust Co. (the "Bank") and Orange Investment Advisors, Inc. ("OIA"), today announced net income of $12.4 million, or $0.93 per basic and diluted share, for the three months ended December 31, 2025. This compares with net income of $7.2 million, or $0.63 per basic and diluted share, for the three months ended December 31, 2024. The increase in earnings per share, basic and diluted, was due primarily to increases in net interest income and total noninterest income as well as a reduction in noninterest expense offset by an increase in provision for credit losses during the current period. For the twelve months ended December 31, 2025, net income was $41.6 million, or $3.33 per basic and diluted share, as compared to $27.9 million, or $2.47 per basic and diluted share, for the twelve months ended December 31, 2024.
Book value per share grew $4.92, or 30.1%, from $16.35 at December 31, 2024 to $21.27 at December 31, 2025. Tangible book value per share increased $5.03, or 31.8%, from $15.80 at December 31, 2024 to $20.83 at December 31, 2025 (see "Non-GAAP Financial Measure Reconciliation" below for additional detail). These increases were due to earnings growth during the twelve months ended December 31, 2025 and a reduction of unrealized losses in the available for sale securities ("AFS") portfolio coupled with net proceeds of approximately $43 million from completion of a follow-on common stock offering during the second quarter of 2025.
"I am pleased to announce momentum we saw through the first three quarters of 2025 continued through year end," said Orange County Bancorp President and CEO Michael Gilfeather, "resulting in record earnings of $12.4 million, or $0.93 per basic and diluted share, and $41.6 million, or $3.33 per basic and diluted share, for the fourth quarter and full year, respectively. These figures represent a $5.3 million, or 73.5%, increase in net income over the same quarter last year and $2.4 million, or 24.1%, increase over $10.0 million of net income last quarter. I am equally pleased they represent material contributions from every division of the Bank.
Total loans grew $14.6 million during the fourth quarter, and a solid $134.5 million, or 7.4%, for the full year as we continued to prudently manage credit in today's interest rate environment. This increased our loan portfolio from $1.8 billion at the end of 2024 to $2.0 billion at year end 2025, a figure we aspired to just a handful of years ago. Loan growth was supported by strong economic activity in the region in which we operate, but remains subject to market volatility and broad macro and geopolitical risks. As such, we continue to employ cautious underwriting standards with new loans. The average yield on our loan portfolio was 6.24% and 6.11% for the fourth quarter and full year 2025, respectively, up 28 basis points, or 4.7%, and 10 basis points, or 1.7%, respectively from the same periods last year.
Deposit growth, specifically its composition and cost, was even more impressive. Total deposits grew $31.5 million, or 1.4%, for the fourth quarter, and $157.0 million, or 7.3%, for the full year, respectively, to $2.3 billion at December 31, 2025. The majority of this came in the form of lower cost deposits, as we focused internal efforts on organic deposit growth and sought to reduce our use of brokered funding. Our average cost of deposits for fourth quarter 2025 was 1.11%, down 19 basis points, or 14.6%, from fourth quarter 2024 and full year 2025 average cost of deposits was down 10 basis points, or 7.6%, versus full year 2024.
Not surprisingly, our continued loan and deposit growth and improved funding mix combined to bolster net interest margin for both the full year and fourth quarter. Net interest margin of 4.18% for the year ended December 31, 2025 increased 35 basis points, or 9.1%, over the prior year, while the 4.44% margin for the current quarter represents an 18 basis points, or 4.2% increase and 66 basis point, or 17.5%, increase over the prior quarter and the same quarter last year, respectively.
Wealth Management, which includes our trust and investment advisory businesses, also maintained its growth with a healthy contribution to our income. For the year and quarter ended December 31, 2025, trust and investment advisory income rose $1.9 million, or 15.2%, to $14.1 million and $451 thousand, or 13.7%, to $3.7 million as compared to the same periods the prior year, respectively. While growth in AUM stemmed in part from favorable equity market returns, focused efforts in our private bank initiative also continued to attract new customers and assets. I have repeatedly referred to wealth management as a highly valued component of our long-term strategy. We will continue to support its growth through services that enable us to capture an even greater share of our clients' business and investment assets over time.
Though unsurprised by record earnings given years of planning and investment, I continue to be impressed by the power of our regional bank strategy to drive performance over time. And while realistic about risks and uncertainty confronting our industry, we continue to believe our seasoned and experienced team's deep client relationships and ability to adapt as challenges -- and opportunities -- present themselves, remain key to our long-term success. This gives me pride in our most recent results and even greater confidence in our future. As always, I thank our committed employees and our customers and shareholders for their continued confidence and support."
Fourth Quarter and Fiscal Year 2025 Financial Review
Net Income
Net income for the fourth quarter of 2025 was $12.4 million, an increase of $5.3 million, or 73.5%, from net income of $7.2 million for the fourth quarter of 2024. The increase represents a combination of increased net interest income and noninterest income as well as a reduction in noninterest expense offset by an increased provision for credit losses over the same quarter last year. Net income for the twelve months ended December 31, 2025 was $41.6 million, as compared to $27.9 million for the same period in 2024. The increase reflects the continued effect of net interest income growth combined with increased non-interest income as well as a reduced provision for credit losses during 2025 as compared to the prior year. The improvement in the provision for credit losses during 2025 as compared to 2024 was the result of lower specific reserves associated with nonperforming loans. The increase in non-interest income includes the recognition of a gain associated with the sale of a branch location coupled with a Bank Owned Life Insurance gain related to policy proceeds from a death benefit.
Net Interest Income
For the three months ended December 31, 2025, net interest income rose $5.3 million, or 22.8%, to $28.3 million, versus $23.1 million during the same period last year. The increase was driven primarily by a $3.3 million increase in interest and fees on loans during the current period. For the twelve months ended December 31, 2025, net interest income reached $104.1 million, representing an increase of $12.3 million, or 13.4%, over the twelve months ended December 31, 2024.
Total interest income rose $3.1 million, or 9.7%, to $35.3 million for the three months ended December 31, 2025, compared to $32.2 million for the three months ended December 31, 2024. The increase reflected a 12.0% growth in interest and fees associated with loans and a 2.1% increase in interest on Federal Funds Sold and other assets. For the twelve months ended December 31, 2025, total interest income rose $7.8 million, or 6.1%, to $135.0 million as compared to $127.2 million for the twelve months ended December 31, 2024.
Total interest expense decreased $2.2 million during the fourth quarter of 2025, to $7.0 million, as compared to $9.1 million during the fourth quarter of 2024. The decrease was primarily due to the continued reduction of interest costs associated with lower FHLB advances and borrowings as well as brokered deposits due to increased customer deposit levels during the quarter. Interest expense associated with FHLB advances drawn and other borrowings during the current quarter totaled $264 thousand as compared to $1.9 million during the fourth quarter of 2024. Interest expense related to time deposits totaled $958 thousand during the fourth quarter of 2025 as compared to $1.7 million during fourth quarter 2024. During the twelve months ended December 31, 2025, total interest expense fell $4.5 million, to $30.9 million, as compared to $35.5 million for the same period last year.
Provision for Credit Losses
The Company recognized a provision for credit losses of $1.6 million for the three months ended December 31, 2025, as compared to a net recovery of $51 thousand for the three months ended December 31, 2024. The current quarter provision included a charge-off of certain commercial and industrial loans and specific reserves associated with certain non-accrual loans as well as loan growth during the quarter. The 2024 recovery was due primarily to slower loan growth during the 2024 fourth quarter combined with the effect of lower reserves associated with certain types of loans closed during fourth quarter 2024. The allowance for credit losses to total loans was 1.45% as of December 31, 2025 versus 1.44% as of December 31, 2024. For the twelve months ended December 31, 2025, the provision for credit losses for loans totaled $7.8 million as compared to $9.6 million for the twelve months ended December 31, 2024. The twelve months ended December 31, 2024 did include a credit provision associated with the recovery of $1.9 million related to Signature Bank subordinated debt which was previously written off. No reserves for investment securities were recorded during the twelve months of 2025 or 2024.
Noninterest Income
Noninterest income rose $383 thousand, or 8.9%, to $4.7 million for the three months ended December 31, 2025 as compared to $4.3 million for the three months ended December 31, 2024. The growth included increased fee income in each of the Company's fee income categories, including investment advisory income, trust income, and service charges on deposit accounts. For the twelve months ended December 31, 2025, noninterest income increased $7.2 million, to $23.2 million, as compared to $16.0 million for the twelve months ended December 31, 2024. The twelve month period in 2025 also included BOLI proceeds of $3.6 million and $932 thousand of insurance proceeds related to a claim for a previous fraudulent incident as well as a $1.2 million gain related to the sale of a branch location, partially offset by a $568 thousand loss connected to a $15 million repositioning of our investment securities portfolio.
Noninterest Expense
Noninterest expense was $17.8 million for the fourth quarter of 2025, reflecting a decrease of $655 thousand, or 3.6%, as compared to $18.5 million for the same period in 2024. The decrease in noninterest expense for the current three-month period was mainly due to expenses in fourth quarter 2024 related to a fraudulent incident at one of our branches as well as costs associated with litigation related to a nonperforming loan participation. Our efficiency ratio improved to 53.9% for the three months ended December 31, 2025 from 67.4% for the same period in 2024. For the twelve months ended December 31, 2025, our efficiency ratio also improved to 53.4% from 60.5% for the same period in 2024. Noninterest expense for the twelve months ended December 31, 2025 reached $67.9 million, reflecting a $2.7 million increase over noninterest expense of $65.2 million for the twelve months ended December 31, 2024. The Company continues to invest in growth, primarily within salaries and benefits, occupancy costs, information technology, deposit insurance, and other operating expenses.
Income Tax Expense
Provision for income taxes for the three months ended December 31, 2025 was $1.2 million, as compared to $1.8 million for the same period in 2024. The reduction in tax expense during the fourth quarter of 2025 was related to timing items adjusted for year end estimates. For the twelve months ended December 31, 2025, the provision for income taxes was $9.9 million, as compared to $6.9 million for the twelve months ended December 31, 2024. The increase for the twelve month period of 2025 was due to higher income before income taxes. Our effective tax rate for the three-month period ended December 31, 2025 was 9.0%, as compared to 20.1% for the same period in 2024. Our effective tax rate for the twelve-month period ended December 31, 2025 was 19.3%, as compared to 19.9% for the same period in 2024.
Financial Condition
Total consolidated assets increased $149.5 million, or approximately 6.0%, during 2025 to $2.7 billion at December 31, 2025. Growth of the balance sheet included increases in cash, loans, and deposits offset by paydowns of borrowings during the current twelve-month period.
Total cash and due from banks increased from $150.3 million at December 31, 2024, to $204.2 million at December 31, 2025, an increase of approximately $53.9 million, or 35.9%. This increase resulted primarily from increases in deposit balances and managed loan growth which elevated cash levels while reducing short-term borrowings.
Total investment securities decreased $28.2 million, or 6.2%, from $453.5 million at December 31, 2024 to $425.3 million at December 31, 2025. The decrease continues to be driven primarily by investment maturities and paydowns during the twelve months of 2025.
Total loans increased $134.5 million, or 7.4%, from $1.8 billion at December 31, 2024 to $2.0 billion at December 31, 2025. The increase was primarily driven by an increase of $118.0 million related to commercial real estate loans, $18.3 million increase in commercial real estate construction loans, and a $7.2 million increase in commercial and industrial loans as well as a $5.3 million increase in home equity loans offset by decreases in the residential real estate and consumer loan categories during 2025.
Total deposits increased $157.0 million, reaching $2.3 billion at December 31, 2025, from $2.2 billion at December 31, 2024. This increase was due primarily to $74.5 million of growth in non-interest bearing demand accounts, an $88.5 million increase in interest bearing demand accounts, and an $88.4 million increase in savings accounts. The increases in deposit accounts were offset by a $32.4 million decrease in money market accounts as well as a $62.0 million decrease in certificates of deposit, mainly associated with brokered deposits utilized by the Bank for short term funding purposes. Deposit composition at December 31, 2025 included 49.6% in demand deposit accounts (including NOW accounts) as a percentage of total deposits. Uninsured deposits, net of fully collateralized municipal relationships, remained stable and represented approximately 46% of total deposits at December 31, 2025, as compared to 39% of total deposits at December 31, 2024.
Total FHLBNY borrowings decreased by $113.5 million, or 91.9%, to $10.0 million as of December 31, 2025, as compared to $123.5 million at December 31, 2024. The decrease in borrowings was driven by increased deposits which outpaced loan growth in 2025 and allowed for paydown of borrowings while maintaining strong levels of cash at December 31, 2025. The decrease in borrowings reflects a strategic focus on actively managing liquidity sources and opportunities to reduce funding costs.
Stockholders' equity increased approximately $98.8 million during 2025, reaching $284.4 million at December 31, 2025 from $185.5 million at December 31, 2024. The increase was due to the combination of a common stock offering which netted approximately $43 million, earnings of $41.6 million, and a decrease in unrealized losses of $19.9 million on the market value of investment securities within the Company's equity as accumulated other comprehensive income (loss) ("AOCI"), net of taxes.
At December 31, 2025, 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 12.67%, both common equity and Tier 1 capital to risk weighted assets were 17.33%, and total capital to risk weighted assets was 18.58%.
Wealth Management
At December 31, 2025, our Wealth Management Division, which includes trust and investment advisory, held $1.9 billion in assets under management or advisory, as compared to $1.8 billion at December 31, 2024, a 5.9% increase. Trust and investment advisory income for the year ended December 31, 2025 reached $14.1 million, representing an increase of 15.2%, or $1.9 million, as compared to $12.2 million for the year ended December 31, 2024.
The breakdown of trust and investment advisory assets as of December 31, 2025 and December 31, 2024, respectively, is as follows:
ORANGE COUNTY BANCORP, INC.
SUMMARY OF AUM/AUA
(UNAUDITED)
(Dollar Amounts in thousands)
-------------------------------------------------------------------
At December 31, 2025 At December 31, 2024
---------------------- ----------------------
Amount Percent Amount Percent
---------- ---------- ---------- ----------
Investment Assets
Under Management &
Advisory $1,184,317 62.73% $1,105,143 61.99%
Trust Asset Under
Administration &
Management 703,544 37.27% 677,723 38.01%
Total $1,887,861 100.00% $1,782,866 100.00%
========= ====== ========= ======
Loan Quality
At December 31, 2025, the Bank had total non-performing loans of $11.1 million, or 0.57% of total loans. Total non-accrual loans represented $11.1 million of loans as of December 31, 2025, compared to $6.3 million at December 31, 2024. The increase in non-accrual loans continues to represent several different loans which experienced payment disruption during 2025 and remain non-performing and in non-accrual status at year end.
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