WE'RE OFF TO A
STRONG START AND LAUNCHING A NEW NAME.
THIS IS THE NEXT LEVEL OF RELATIONSHIP BANKING. O R A N G E C O U N T Y B A N C O R P, I N C . JUNE 30, 2016 STATEMENT
PRESIDENT'S MESSAGE
To Our Stockholders, Customers and Friends:
Orange County Bancorp, Inc. (the “Company”) is pleased to present its unaudited
consolidated financial statements, as of and for the period ended June 30, 2016. This report includes the financial information of OCBI’s two wholly owned subsidiaries, Orange County Trust Company (the “Bank”) and Hudson Valley Investment Advisors, Inc. (“HVIA”). CONSOLIDATED UNAUDITED FINANCIAL RESULTS Six Months Ended June 30, 2016 and 2015
(dollars in thousands)
2016
(dollars in thousands)
2015
2016 vs. 2015 Percent Change
Total Assets
$899,165
$758,728
19%
Total Loans
$495,980
$335,858
48%
Total Securities
$307,357
$327,887
-6%
Total Deposits
$707,724
$572,510
24%
$1,479
$(753)
296%
Net Income
In the Company’s 2015 Annual Report,
we stated our commitment to build on investments we made during the year. This is bearing fruit, as results for the first half of 2016 are significantly improved over our 2015 numbers for the same period, especially net income, which is up nearly 300%. This improvement is due primarily to significant growth in our loan portfolio and core deposits, which accelerated an increase in net income, as we intended, with our targeted investments in people and bricks & mortar. continued...
Michael Gilfeather, President & CEO 3
PRESIDENT'S MESSAGE
ORANGE COUNTY TRUST COMPANY
The topic of “low interest rates” has
and fees are up substantially in the group and
dominated discussions regarding the business
Ms. Maloney now has three other trust
operations of community banks since the
professionals working exclusively on this line
financial crisis. Despite this, the Bank continues
of business.
to source loans and make other investments that generate a healthy spread over interest expenses
Reflecting our broader geographical
and other ordinary business expenses.
footprint, the Bank has formally changed its name
The Bank is dedicated to remaining
news for a 124-year-old institution, but only the
independent. The most effective way to do so is
“second” name change since the Bank opened its
through growth and, in the first half of 2016 and
doors in 1892. The tradition and heritage of sound
continuing through to date; the Bank grew on
community banking that originated with Orange
several fronts. Regulatory approval was obtained
County Safe Deposit & Trust Company and
for two new branches in Westchester County;
through to Orange County Trust Company will
Mamaroneck and Mount Pleasant. In addition,
continue in strong and true measure at Orange
we are scouting for a site in Mount Vernon
Bank & Trust Company. The name has changed;
to establish yet another business-friendly
the service, people and commitment have not.
branch. To support our business banking culture, the Bank launched a full suite of cash management/treasury products for businesses, professionals, entrepreneurs, municipalities and nonprofit institutions.
The Trust Department, Orange County’s
original business, plays a significant, yet still growing role in the Bank’s success. Kathryn Maloney, recruited as the new head of our Trust Department in 2015, has been hard at work expanding the Bank’s trust business with an emphasis on Special Needs Trusts. New business
4
to Orange Bank & Trust Company. This is big
PRESIDENT'S MESSAGE
Hortense Garvin Business Banker, White Plains Branch
HUDSON VALLEY INVESTMENT ADVISORS, INC.
Gus Scacco joined HVIA as President
& CEO just over a year ago. In that time, Gus has instilled a highly disciplined investing approach for the firm’s clients, upgraded trading systems,
and
greatly
improved
financial
reporting and client statement interface capabilities. Together, these changes have resulted in greater cost efficiencies, ease of use and a better overall customer experience. The firm is also developing a broader range of investment products for clients, including ones specifically targeted to the needs of our growing Trust Department customers. As of June 30, 2016, HVIA managed client assets totaling $665 million.
teams of the Bank and HVIA work hard to deliver on our global commitment to the enterprise.
We are a community organization and
our direct involvement in improving the lives of our constituents; shareholders, customers/ clients, employees and the community-at-large is both meaningful and something to which we consider ourselves duty bound.
Please contact me with any questions
or comments and thank you again for your confidence and support. Sincerely,
Maintaining the ability to deliver value
to our shareholders is my most important job.
Michael Gilfeather
The Company’s directors and management
President & CEO 5
CONSOLIDATED STATEMENTS OF CONDITION June 30, 2016 and 2015 (Unaudited) 2016
2015
Cash and due from banks
$37,233
$33,226
Investment securities - available-for-sale
307,357
327,887
(in thousands except for share and per share data)
ASSETS
Restricted investment in bank stocks Loans Allowance for loan losses LOANS, NET Premises and equipment Other real estate owned Accrued interest receivable Cash surrender value of bank-owned life insurance
4,145
3,818
495,980
335,858
(6,625)
(4,754)
489,355
331,104
14,351
13,856
-
1,510
3,207
2,897
25,369
24,643
Goodwill
5,359
5,359
Intangible assets
3,249
3,534
Other assets
9,540
10,894
$899,165
$758,728
Non-interest bearing
$138,174
$103,795
Interest bearing
569,550
468,715
TOTAL DEPOSITS
707,724
572,510
78,190
73,238
TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY DEPOSITS:
Long-term debt Accrued expenses and other liabilities TOTAL LIABILITIES
16,447
18,870
802,361
664,618
STOCKHOLDERS' EQUITY Common stock, $0.50 par value; 5,000,000 and 2,000,000 shares authorized; 1,993,438 and 1,994,875 issued; 1,956,770 and 1,954,956 oustanding at June 30, 2016 and 2015 respectively
997
998
Surplus
70,415
70,593
Undivided profits
27,017
28,171
(121)
(3,902)
Treasury stock, at cost; 36,668 and 42,019 shares at June 30, 2016 and 2015, respectively
(1,504)
(1,750)
TOTAL STOCKHOLDERS’ EQUITY
96,804
94,110
$899,165
$758,728
Accumulated other comprehensive income, net of taxes
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
6
CONSOLIDATED STATEMENTS OF INCOME Six Months Ended June 30, 2016 and 2015 (Unaudited) 2016
2015
$10,715
$8,209
2,523
2,625
1,199
1,473
36
16
14,473
12,323
Interest on savings and NOW accounts
246
262
Interest on time deposits
407
271
-
1
(in thousands except for share and per share data)
INTEREST INCOME: Interest and fees on loans Interest on investment securities: Taxable Tax exempt Interest on Federal funds sold and other TOTAL INTEREST INCOME
INTEREST EXPENSE:
Interest on short-term borrowings Interest on long-term debt
1,366
1,524
TOTAL INTEREST EXPENSE
2,019
2,058
12,454
10,265
539
2,734
11,915
7,531
454
535
2,800
2,558
154
640
NET INTEREST INCOME Provision for loan losses NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
OTHER OPERATING INCOME: Service charges on deposit accounts Trust & investment division income Investment security gains, net Earnings on bank-owned life insurance
363
361
Other
354
314
4,125
4,408
6,035
5,764
Employee benefits
1,929
1,989
Occupancy expense
1,168
1,109
Furniture and equipment expense
305
243
Professional fees
964
861
Directors’ fees and expenses
377
357
TOTAL OTHER OPERATING INCOME
OTHER OPERATING EXPENSES: Salaries
Advertising expenses
365
321
Computer software expense
633
315
FDIC assessment
363
308
-
571
1,919
1,413
Net expenses from foreclosed assets Other TOTAL OTHER OPERATING EXPENSES Income (loss) before income taxes Provison for income taxes NET INCOME (LOSS) Basic earnings (loss) per share Weighted average shares outstanding
14,058
13,251
1,982
(1,312)
503
(559)
$1,479
$(753)
$0.76
$(0.38)
1,955,581
1,957,455 7
OR A NG E COUNT Y BAN CO RP, INC. A ND OR A NG E COUNT Y T RUS T CO MPANY BOA R D OF DIRECTO RS Louis Heimbach, Chairman David A. Dewilde Michael Gilfeather Paul T. McDermott William D. Morrison Susan Metzger Virginia Rizzo Richard Rowley Terry R. Saturno
OR A NG E COUNT Y BAN CO RP, INC. Michael Gilfeather, President & CEO
OR A NG E COUNT Y T RUS T CO MPAN Y Michael Gilfeather, President & CEO
H U DSON VA LLEY INV EST MEN T ADVIS O RS, IN C. Gus Scacco, CEO & Chief Investment Officer
H U DSON VA LLEY INV EST MEN T ADVIS O RS, IN C. BOA R D OF DIRECTO RS Lou Heimbach, Chairman Michael Gilfeather Thomas Guarino Peter Larkin Michael Markhoff Jonathan Rouis Gus Scacco
O R A N G E C O U N T Y B A N C O R P, I N C . ORANGEBANKTRUST.COM