Key Highlights

  • Earnings per share of USD 0.93 rose 24.2% and beat the USD 0.82 consensus estimate in a record third quarter.
  • Net income climbed 24.6% to USD 12.5 million as net interest income increased USD 2.9 million to USD 29.9 million.
  • Net interest margin widened 19 basis points to 4.45% while the average cost of deposits fell to 0.96%.
  • Book value per share rose 8.3% to USD 23.04, and deposits grew USD 56.0 million to USD 2.4 billion.

Orange County Bancorp, Inc. (NASDAQ:OBT), the parent of Orange Bank & Trust Co., reported record third-quarter 2026 net income of USD 12.5 million, up 24.6% from USD 10.0 million. Diluted EPS of USD 0.93 rose from USD 0.75 and topped a consensus estimate of USD 0.82. Revenue, measured as net interest income of USD 29.9 million plus noninterest income of USD 5.4 million, came to USD 35.3 million, above a consensus estimate of USD 33.50 million.

Chief executive Michael Gilfeather described it as the third straight quarter of record earnings in 2026, led by loan and deposit growth and a wider net interest margin. For the nine months, net income reached USD 37.4 million, or USD 2.80 per share, against USD 29.2 million, or USD 2.39 per share, a year earlier. The nine-month tax rate of 13.8% reflected the reversal of a deferred tax valuation allowance in the second quarter.

Margin, Credit and Expense Detail

Net interest income rose 11.0%, helped by USD 31.2 million of loan growth in the quarter and a USD 1.3 million drop in interest expense. Loan yields averaged 6.19%, and total loans including those held for sale were USD 2.0 billion. The average cost of deposits was 0.96%, down from 1.12% a year earlier, and the bank reported no brokered deposit arrangements at quarter end. Provision for credit losses fell to USD 809 thousand from USD 3.9 million, and the allowance stood at 1.38% of loans against 1.45% at year-end.

Non-accrual loans rose to USD 19.1 million from USD 11.1 million at year-end, mostly tied to a commercial real estate participation loan affected by a parent-company bankruptcy, and non-performing loans were 0.98% of total loans. Noninterest income fell 20.8% to USD 5.4 million because the prior-year quarter included USD 1.2 million of life insurance proceeds. Noninterest expense rose 2.3% to USD 17.2 million, and the efficiency ratio improved to 48.8% from 49.9%. The effective tax rate was 27.6% compared with 23.0%.

Balance Sheet, Wealth and Portfolio Moves

Stockholders' equity increased 8.7% to USD 309.0 million, and the bank's Tier 1 capital to average assets ratio was 13.19%. Savings and money market balances grew USD 165.1 million since year-end, while certificates of deposit fell USD 126.3 million. Wealth management income was USD 4.0 million, up 12.6%, though assets under management or advisory declined 13.0% to USD 1.6 billion from year-end.

The company sold USD 18.4 million of home equity loans in the quarter and holds about USD 42.6 million of residential real estate loans for sale, net of a USD 4.5 million valuation allowance. It restated a goal of exiting residential loans by year-end. The release carried no numerical earnings guidance.

Factors to Watch

Four items stand out. Net interest margin is first, at 4.45% against 4.26% a year earlier, with deposit costs at 0.96%. Credit is second: USD 19.1 million of non-accrual loans, up from USD 11.1 million at year-end, against a 1.38% allowance. The residential exit is third, with USD 42.6 million still held for sale and a year-end goal. Wealth is fourth, where USD 1.6 billion of assets and USD 4.0 million of quarterly income remain below management's long-term goal.