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At the outset of the pandemic, management identified certain industries, including hospitality, healthcare, and retail, it viewed as most susceptible to stress from a prolonged economic slowdown.  Notwithstanding perceived industry risks, portfolio concentration and exposure across these segments is modest. Notably, Lodging and Food Services, which broadly reflect our exposure to hotels, food and beverage, constitute $44.9 million, or 3.5%, of our loan portfolio. At quarter end, these categories accounted for 61.1% of our total $12.4 million of loans on payment deferral.

Management continues to evaluate performance trends across industry groups to assess underlying business and liquidity risks due to the economic impacts of COVID-19. While the Bank has continued to provide relief from debt service through forbearance agreements, its focus has shifted toward the resumption of loan payments, as management believes clients in need of deferral have largely been accommodated at this time. Most borrowers requesting deferral early in the cycle resumed scheduled repayment of their loan obligations at the end of their initial 90-day deferral period. Deferred loans at June 30, 2021 were $12.4 million, or 1.0%, of our portfolio, compared with $48.8 million, or 4.2%, of our loan portfolio at December 31, 2020.

About Orange County Bancorp, Inc.

Orange County Bancorp, Inc. is the parent company of Orange Bank & Trust Company and Hudson Valley Investment Advisors, Inc. Orange Bank & Trust Company is an independent bank that began with the vision of 14 founders over 125 years ago. It has grown through ongoing innovation and an unwavering commitment to its community and business clientele to more than $2.0 billion in total assets. Hudson Valley Investment Advisors, Inc. is a Registered Investment Advisor in Goshen, NY. It was founded in 1996 and was acquired by the Company in 2012.

Forward Looking Statements

Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity. Further, given its ongoing and dynamic nature, it is difficult to predict what the continuing effects of the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, continue to result in a material adverse change for the demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch disruptions, unavailability of personnel and increased cybersecurity risks as employees work remotely.

The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions that may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

For further information:

Robert L. Peacock

EVP Chief Financial Officer

rpeacock@orangebanktrust.com

Phone: (845) 341-5005

ORANGE COUNTY BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(UNAUDITED)
(Dollar Amounts in thousands except per share data)
		June 30, 2021				December 31, 2020
ASSETS
Cash and due from banks		$	322,919			$	121,232
Investment securities - available-for-sale			377,738				330,105
Restricted investment in bank stocks			2,109				1,449
Loans			1,286,885				1,152,738
Allowance for loan losses			(17,049	)			(16,172	)
Loans, net			1,269,836				1,136,566
Net Premises and equipment			14,124				14,017
Accrued interest receivable			7,090				6,295
Bank owned life insurance			29,064				28,520
Goodwill			5,359				5,359
Intangible assets			1,821				1,963
Other assets			22,172				19,430
TOTAL ASSETS		$	2,052,232			$	1,664,936
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest bearing		$	652,767			$	521,093
Interest bearing			1,218,898				968,201
Total deposits			1,871,665				1,489,294
Note payable			3,000				3,000
Subordinated notes, net of issuance costs			19,358				19,323
Accrued expenses and other liabilities			17,298				17,896
TOTAL LIABILITIES			1,911,321				1,529,513
STOCKHOLDERS' EQUITY
Common stock, $0.50 par value; 15,000,000 shares authorized;
4,533,304 issued; 4,488,437 and 4,483,102 outstanding,
at June 30, 2021 and December 31, 2020, respectively			2,266				2,266
Surplus			84,936				85,111
Retained Earnings			56,118				47,683
Accumulated other comprehensive income (loss), net of taxes			(1,116	)			1,819
Treasury stock, at cost; 44,867 and 50,202 shares at June 30,
2021 and December 31, 2020, respectively			(1,293	)			(1,456	)
TOTAL STOCKHOLDERS' EQUITY			140,911				135,423
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,052,232			$	1,664,936

Note:  There were minor changes made to the previously reported December 31, 2020 balance sheet related to corrections for the treatment of deferred costs on loans.

ORANGE COUNTY BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Dollar Amounts in thousands except per share data)
		Three Months Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020
INTEREST INCOME
Interest and fees on loans		$	14,033			$	11,444			$	27,261			$	22,446
Interest on investment securities:
Taxable			1,156				1,223				2,284				2,558
Tax exempt			408				233				771				359
Interest on Federal funds sold and other			61				28				104				208
TOTAL INTEREST INCOME			15,658				12,928				30,420				25,571
INTEREST EXPENSE
Interest on savings and NOW accounts			617				851				1,209				1,807
Interest on time deposits			137				254				295				535
Interest on FHLB advances			-				-				-				10
Interest on note payable			42				42				84				84
Interest on subordinated notes			230				-				460				-
TOTAL INTEREST EXPENSE			1,026				1,147				2,048				2,436
NET INTEREST INCOME			14,632				11,781				28,372				23,135
Provision for loan losses			809				1,310				875				2,510
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES			13,823				10,471				27,497				20,625
NONINTEREST INCOME
Service charges on deposit accounts			158				117				333				325
Trust income			1,184				918				2,307				1,956
Investment advisory income			1,235				997				2,411				1,898
Investment securities gains(losses)			-				586				-				586
Earnings on bank owned life insurance			173				182				345				347
Other			278				206				523				435
TOTAL NONINTEREST INCOME			3,028				3,006				5,919				5,547
NONINTEREST EXPENSE
Salaries			4,726				4,634				9,273				8,819
Employee benefits			876				1,105				2,002				2,254
Occupancy expense			967				934				1,932				1,872
Professional fees			1,023				1,004				1,930				1,575
Directors' fees and expenses			252				276				494				569
Computer software expense			1,032				920				2,090				1,714
FDIC assessment			267				197				555				366
Advertising expenses			285				338				568				651
Advisor expenses related to trust income			140				88				261				243
Telephone expenses			136				140				270				269
Intangible amortization			71				71				143				143
Other			626				197				1,198				1,020
TOTAL NONINTEREST EXPENSE			10,401				9,904				20,716				19,495
Income before income taxes			6,450				3,573				12,700				6,677
Provision for income taxes			1,257				695				2,482				1,323
NET INCOME		$	5,193			$	2,878			$	10,218			$	5,354
Basic and diluted earnings per share		$	1.16			$	0.64			$	2.28			$	1.19
Weighted average shares outstanding			4,488,602				4,514,345				4,485,886				4,512,382

Note:  There were minor changes made to the previously reported June 30, 2020 income statement periods related to corrections for the treatment of deferred costs on loans.

ORANGE COUNTY BANCORP, INC.
NET INTEREST MARGIN ANALYSIS
(UNAUDITED)
(Dollar Amounts in thousands)
		Three Months Ended June 30,
		2021												2020
		Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate
Assets:
Loans Receivable (net of PPP)		$	1,148,215			$	12,883				4.50	%		$	938,942			$	11,003				4.71	%
PPP Loans			119,463				1,150				3.86	%			67,879				441				2.61	%
Investment securities			361,541				1,541				1.71	%			276,908				1,439				2.09	%
Due from banks			270,259				61				0.09	%			132,991				28				0.08	%
Other			2,038				23				4.53	%			1,446				17				4.73	%
Total interest earning assets			1,901,516				15,658				3.30	%			1,418,166				12,928				3.67	%
Non-interest earning assets			81,249												72,429
Total assets		$	1,982,765												1,490,595
Liabilities and equity:
Interest-bearing demand accounts		$	276,609			$	84				0.12	%		$	203,334			$	102				0.20	%
Money market accounts			627,289				478				0.31	%			464,021				681				0.59	%
Savings accounts			183,867				55				0.12	%			128,487				68				0.21	%
Certificates of deposit			88,537				137				0.62	%			89,830				254				1.14	%
Total interest-bearing deposits			1,176,302				754				0.26	%			885,672				1,105				0.50	%
FHLB Advances and other borrowings			3				0				0.27	%			-				-				0.00	%
Note payable			3,000				42				5.62	%			3,000				42				5.63	%
Subordinated notes			19,348				230				4.77	%			-				-				0.00	%
Total interest bearing liabilities			1,198,653				1,026				0.34	%			888,672				1,147				0.52	%
Non-interest bearing demand accounts			627,806												456,931
Other non-interest bearing liabilities			17,563												16,210
Total liabilities			1,844,022												1,361,813
Total shareholders' equity			138,744												128,782
Total liabilities and shareholders' equity		$	1,982,766												1,490,595
Net interest income						$	14,632											$	11,781
Interest rate spread 1											2.96	%											3.15	%
Net interest margin 2											3.09	%											3.34	%
Average interest earning assets to interest-bearing liabilities			158.6	%											159.6	%
Notes:
1 The Interest rate spread is the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities
2 Net interest margin is the annualized net interest income divided by average interest-earning assets