UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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| Item 7.01 | Regulation FD Disclosure |
On May 4, 2022, Orange County Bancorp, Inc. (the “Company”), parent company of Orange Bank & Trust Company and Hudson Valley Investment Advisors, made available and distributed to analysts and prospective investors a slide presentation. The slide presentation will be reviewed with certain analysts and certain institutional investors at meetings scheduled on May 4, 2022 and May 5, 2022. The presentation materials include information regarding the Company’s operating and growth strategies and financial performance. The slide presentation is furnished in this Current Report on Form 8-K, pursuant to this Item 7.01, as Exhibit 99.1, and is incorporated herein by reference.
This Current Report and the information included below and furnished as exhibits hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing. The furnishing of the information in this Current Report is not intended to, and does not, constitute a determination or admission by the Company that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company or any of its affiliates.
| Item 9.01 | Financial Statements and Exhibits |
| (a) | Financial statements of businesses acquired. None. | ||
| (b) | Pro forma financial information. None. | ||
| (c) | Shell company transactions: None. | ||
| (d) | Exhibits. | ||
| 99.1 | Presentation Materials of Orange County Bancorp, Inc. | ||
| 104 | Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL) | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| ORANGE COUNTY BANCORP, INC. | ||
| DATE: May 4, 2022 | By: | /s/ Robert Peacock |
| Robert Peacock | ||
| Senior Executive Vice President and Chief Financial Officer | ||
Exhibit 99.1
May 2022
Forward Looking Statements Forward - Looking Statements This presentation contains, and future oral and written statements by us and our management may contain, 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. These forward - looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of our beliefs concerning future events, bu siness plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward - looking statements include without limitat ion, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words suc h a s “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We ca uti on that the forward - looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties tha t a re subject to change based on factors which are, in many instances, beyond our control. Such forward - looking statements are based on various assumptions (some of which may be beyond our control) and are subject to risks and uncertainties, which change overtime, and other factors which could cause actual result s t o differ materially from those currently anticipated. New risks and uncertainties may emerge from time to time, and it is not possible for us to predict their occurre nce or how they will affect us. If one or more of the factors affecting our forward - looking information and statements proves incorrect, then our actual results, performa nce or achievements could differ materially from those expressed in, or implied by, forward - looking information and statements contained in this presentation. Th erefore, we caution you not to place undue reliance on our forward - looking information and statements. We disclaim any duty to revise or update the forward - looking s tatements, whether written or oral, to reflect actual results or changes in the factors affecting the forward - looking statements, except as specifically required by law. Industry Information This presentation includes statistical and other industry and market data that we obtained from government reports and other thi rd - party sources. Our internal data, estimates, and forecasts are based on information obtained from government reports, trade and business organizations and othe r c ontacts in the markets in which we operate and our management’s understanding of industry conditions. Although we believe that this information (including th e i ndustry publications and third party research, surveys, and studies) is accurate and reliable, we have not independently verified such information. In addit ion , estimates, forecasts and assumptions are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. Finally, forward - looking informati on obtained from these sources is subject to the same qualifications and the additional uncertainties regarding the other forward - looking statements in this presentation . Non - GAAP Financial Measures We present tangible shareholders’ equity to tangible assets and efficiency ratios to help us describe our operating performance. Our presentation of these non - GAAP measures is intended as a supplemental measure of our performance that is not required by, or presented in accordance wi th, U.S. generally accepted accounting principles (“GAAP”). These non - GAAP measures should not be considered as an alternative to performance measures deriv ed in accordance with U.S. GAAP. Our presentation of these non - GAAP measures should not be construed to imply that our future results will be unaffected by these items. See the appendix to this presentation for a reconciliation of these non - GAAP measures to the most directly comparable GAAP financial measures . March 31, 2022 Numbers contained in this presentation for the quarter ended March 31, 2022 are unaudited. As a result, subsequent information may cause a change in certain accounting estimates and other financial information, including the Company’s allowance for loan losses, fair values, and inc ome taxes. 2
Franchise Overview 3 1) See Slide 15 for non - GAAP reconciliation information. 2) Bank - level regulatory data. 3) There are 3 branches located in Middletown. Background ▪ Bank was established in 1892 and has operated successfully for over 130 years ▪ Successfully completed IPO and NASDAQ listing on August 9, 2021 ▪ Headquartered in Middletown, NY ▪ Premier business bank in the Hudson Valley region, operating in diverse and stable markets ▪ Highly attractive core deposit franchise ▪ Full service commercial bank with focus on small to medium sized businesses ▪ Diverse, high - margin private banking and trust/wealth management service offerings Financial Snapshot as of and for the Three Months Ended March 31, 2022 Strong Banking Institution with Established Presence in Stable Markets Company Background and Financial Snapshot Geographic Presence 2022Q1 $2.3B TOTAL ASSETS 2022Q1 $ 1.3B TOTAL NET LOANS 2022Q1 $2.1B TOTAL DEPOSITS 2022Q1 $1.3B AUM Existing Branch (15 ) (3) Headquarters Market Footprint NIM 3.08% ROAA 0.95% ROAE 11.87% Efficiency Ratio 61.11% TCE/TA 1 6.93% Tier 1 Leverage 2 8.03% Tier 1 Capital Ratio 2 12.40% Total Capital Ratio 2 13.65% MRQ NCOs / Average Loans 0.01% NPAs / Assets 0.30% Loan Loss Reserves / Gross Loans 1.38% YTD Profitability Regulatory Capital Asset Quality 3
Structure & Scope Balanced, Client - Driven Business Model 4 Business Banking Private Banking Orange Wealth Management • 15 branches • Focus on small to medium sized businesses in the communities served • Seasoned lenders with significant regional and industry expertise • Comprehensive product offering • Full treasury management suite Key Financials $ 1.3 billion loans $2.1 billion deposits • Launched in mid 2017 • Division of Orange Bank & Trust • Client - driven service linking our four primary product areas 1) Cash Management / Treasury 2) Loans (Commercial and/or Residential) 3) Trust, Estate and Custody Services 4) Investment Advisory Services (through HVIA) Approximately 426 Clients • Subsidiary of Orange County Bancorp, Inc. • Acquired in late 2012 from Sterling Bancorp • SEC registered Investment Advisor $ 1.3 billion AUM • Founding division of the Bank • Traditional trust & administration services to local clients • Niche focus on Special Needs Trust and Guardianship services Note: Key financials are as of March 31, 2022. Client - Driven Service Unifies Three Unique Product Areas
Franchise Scarcity Value in Highly Attractive Markets 5 Attractive Demographics in a Large, Growing Addressable Market Median Household Income ($000) Source: FDIC, S&P Global Market Intelligence. Note : FIDC deposit data as of June 30, 2021. 1) Defined as Lower Hudson Valley region, includes Orange, Westchester, and Rockland counties. $101 $112 $108 $80 $72 $0 $30 $60 $90 $120 Westchester, NY Rockland, NY State of NY U.S. Overall OBT Growth Markets Orange County Westchester & Rockland Counties Bronx County • Attractive and stable market • 60 miles from New York City • 130 - year - operating history in the region • Strong foundation for growth and low - cost deposit funding • Recent COVID - 19 related population growth • Primary OBT growth markets • Large, economically diverse and affluent markets • U nbalanced M arket : large regional/national banks, few small community banks • Reputation as leading local bank for small business • Significant long - term growth opportunity relative to current market share • Densely populated area with approximately 1.4 million residents • Diversified economy typical of most urban population centers • Persistent need for housing in the region generates constant growth through demand for construction lending and refinancing activity $63 $84 $104 $140 $150 $282 $560 $691 $750 $1,880 $4,982 $6,138 $8,057 $15,110 $26,013 Rhinebeck Bancorp Sunnyside Bancorp First Federal Savings Salisbury Bancorp Berkshire Bancorp Wallkill Valley Northeast Community Walden PCSB Orange County Bancorp Wells Fargo Toronto-Dominion Citigroup Webster Financial JPMorgan Chase Largest Locally Headquartered Bank in the Lower Hudson Valley 1 Deposits in the Market ($ in millions) 1 2 3 4 5 13 17 18 1 9 24 28 29 30 32 33 Rank
Business Strategy 6 Note: Financial data as of March 31, 2022. Leverage Relationships to Drive Organic Growth Derive Loan Growth Through Differentiated Service Continue to Grow Core Deposit Franchise Continue to Build Fee - Based Business Capitalize on Market Disruption Strategic Expansion • The Bank’s historical success has been closely tied to that of its clients and the communities it serves • Seek trusted advisor role with clients as they build their businesses with the Bank’s resources and support • Majority of loan growth comes from existing clients and referrals • Direct access to senior management offers customers quicker response time on loan applications and other transactions • Differentiated level of service provides a pricing advantage, often resulting in higher loan rates • Core deposits comprise 95.3% of total funding, attributed to the Bank’s long - standing relationships with clients • C ash management has helped the Bank expand depth and efficiency of deposit product offerings • By broadening its suite of business services in 2022, deposits and loans grew 28.5 % and 12.0% respectively during 2021 and 8 .3% and 3 .3% for the 1 st quarter of 2022. • Exploration of new opportunities for expansion remains a key initiative • Ongoing investments in Rockland, Westchester and Bronx Counties continue to be significant drivers of growth & profitability • L ower Hudson Valley market has experienced significant consolidation with the sales/mergers of The Westchester Bank, Sterling National Bank, Hudson Valley Bank, Hometown Bank and Greater Hudson Bank • M&A consolidation presents opportunities to hire seasoned bankers positioned to thrive under the Bank’s personalized, customer - centric business model • Having recently reached $ 1.3 billion in combined AUM as of 2022Q1, the Bank’s trust and advisory services provide a strong foundation of fee - based revenue • Company intends to expand HVIA’s services into Westchester and Rockland counties • Private Banking service enables approximately 426 clients to leverage the resources of the platform Engage in Opportunistic M&A • Strategic opportunities to produce attractive returns for stockholders may be evaluated • Opportunities could include fee - based business, whole bank or branch acquisitions that would improve market position in geographies with attractive demographics
$738 $892 $1,083 $1,253 $1,322 2018 2019 2020 2021 2022Q1 $109 $122 $135 $183 $165 2018 2019 2020 2021 2022Q1 $905 $1,083 $1,489 $1,914 $2,074 2018 2019 2020 2021 2022Q1 $1,066 $1,230 $1,665 $2,142 $2,021 2018 2019 2020 2021 2022Q1 Consistent History of Growth 7 Current Success is Attributed to Disciplined Organic Growth Gross Loans Ex. PPP ($M) Total Assets ($M) Consolidated Equity ($M) Total Deposits ($M)
3.71 3.88 3.36 3.15 3.08 3.36 3.33 3.09 3.15 3.17 2018 2019 2020 2021 YTD 2022 OBT Local Peers $35.9 $43.3 $48.7 $60.5 $16.3 $10.0 $9.8 $11.4 $12.1 $3.0 $45.9 $53.1 $60.1 $72.6 $19.3 2018 2019 2020 2021 YTD 2022 Net Interest Income Noninterest Income 0.73% 0.97% 0.76% 1.02% 0.95% 8.18% 9.94% 9.02% 12.08% 11.87% 2018 2019 2020 2021 YTD 2022 ROAA ROAE $7.6 $11.5 $11.7 $21.3 $5.3 2018 2019 2020 2021 YTD 2022 Strong and Consistent Historical Profitability 8 Net Interest Margin (%) Net Income ($M) Pre - Provision Net Revenue ($M) ROAA and ROAE (%) Success Maintaining Strong Profitabilit y Metrics (YTD for the 3 months ended 3/31/2022) 1 Source: S&P Global Market Intelligence. 1) Local Peers include NASDAQ, NYSE, NYSEAM, and OTC - traded U.S. banks and thrifts in the NYC MSA with most recent quarter total assets under $50 billion, excluding merger targets and mutuals. 2) 2022Q1 shown for OBT. Most recent quarter reported shown for peers. 2
Loan Composition 9 Note: Financial data as of March 31, 2022. 1) CRE Loans as a % of Total Risked - Based Capital; Bank - level regulatory data. 2) Excluding PPP loans. CRE 65% C&I 19% CRE Construction 8% Residential RE 5% Home Equity 1% Consumer 1% PPP 1% Total Loans: $ 1.3 Billion 375% CRE Concentration 1 4.61% Yield on Loans 2 Highly Diversified Portfolio with Conservative Concentrations ▪ Strong asset quality, historically managed well through cycles ▪ Majority of lending occurs within market ▪ ~$12.7M PPP loans Loan Portfolio Commentary 0.19% 0.18% 0.15% 0.28% 0.30% 2018 2019 2020 2021 2022Q1 0.05% 0.07% 0.15% 0.07% 0.01% 2018 2019 2020 2021 YTD 2022 NPAs / Assets (%) Net Charge - off (NCOs) / Average Loans (%) 4.86% 4.98% 4.72% 4.51% 4.61% 2018 2019 2020 2021 2022Q1 Historical Yield on Loans 2 Orange 24% Westchester 25% Other NY Counties 14% Rockland 8% Bronx 9% CT & Other 9% New Jersey 8% Manhattan 3% Composition by Geography Total Loans: $ 1.3 Billion
0.14% 0.13% 0.24% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% Avg. Fed Funds Rate OBT Local Peers Leading Core Deposit Franchise Areas of Focus • Keys to Success x Dedicated Deposit Relationship managers x Investment into Treasury / Cash management product suite • Escrow x Attractable DDA capture • Municipal Deposits x Competitive products and niche focus x Focused on local opportunities x Long - term relationships 10 Cost of Total Deposits During ’15 – ’19 Rate Cycle 1 Source: S&P Global Market Intelligence, FDIC. Note: FDIC deposit data as of 6/30/2021. Financial data as of March 31, 2022. 1) Cost of total deposits calculated using total annualized deposit interest expense and average total deposits in the given per iod. 2) Deposit beta is calculated as the change in the bank’s deposit costs as a percentage of the change in the Fed Fund Rate, measured fro m 2 015Q1 to 2019Q1. 3) Local Peers include NASDAQ, NYSE, NYSEAM, and OTC - traded U.S. banks and thrifts in the NYC MSA with most recent quarter total as sets under $50 billion, excluding merger targets and mutuals. MRQ cost of total deposits used for 2022Q1 for local peers. Through - the - Cycle Deposit Beta 2 : OCBI: 5.4% Local Peers 3 : 25.8% 96.4% Core Deposits 35.8% Non - Interest Bearing 13bps Q1 2022 Cost of Deposits Stable and Low Cost Core Funding Base Non - time Interest Bearing 60% Noninterest Bearing 36% Retail Time 3% Wholesale Time 1% Total Deposits: $ 2 .1 Billion Composition by Geography Orange 51% Westchester 39% Rockland 7% Bronx 3% 49.1% Transaction Accounts Total Deposits: $2.1 Billion
First Quarter 2022 Highlights & Below Peer Valuation 11 ▪ Significant organic growth continues ― QoQ gross loan growth ex. PPP was 21.8% (annualized) ― Deposit inflows continue ▪ Solid profitability metrics ― Annualized ROAA and ROAE of 0.95% and 11.89% ▪ Credit quality remains strong ― Net charge - offs in the quarter were 1bp (annualized) ― There were no COVID - 19 loan deferrals by year - end 2021 ― Reserve levels of 1.39% of gross loans ex. PPP ▪ IPO completed on August 9, 2021 ― Raised gross proceeds of $38.5 million Undervalued relative to comparable banks Source: S&P Global Market Intelligence. Note: Market data as of 4 /25/2022. 1) High Growth Peers include NASDAQ , NYSE , and NYSEAM traded U.S. banks and thrifts with total assets between $1 and $4 billion as of 2021Q4, with 2021 Total Loan (ex. PPP) growth of greater than 15%, excluding merger targets and mutuals. Long - term average shown for a 5 year period. 2) See Slide 15 for non - GAAP reconciliation information. Price / Tangible Book Value per Share (2) 1.25x 1.33x 1.35x 1.10x 1.15x 1.20x 1.25x 1.30x 1.35x 1.40x OBT High Growth Peers Current High Growth Peers Long-Term Average
Strong, Low Cost Deposit Base: 36% Noninterest bearing, 13bps Total Cost 1 Highly Attractive Market Geography and Scarcity Value of Franchise Complementary Offerings in Private Banking and Trust & Wealth Businesses Demonstrated Loan Growth Driven by Differentiated Service Strong and Experienced Management Team Investment Highlights 12 Successful and Ongoing Expansion of Market Footprint Ability to Take Advantage of M&A Driven Market Disintermediation Consistent and Attractive Performance 1) For the quarter ended March 31, 2022.
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14 Michael J. Gilfeather President & Chief Executive Officer Robert Peacock Senior Executive Vice President Chief Financial Officer Michael Coulter Executive Vice President Chief Lending Officer Joseph A. Ruhl Executive Vice President Regional President – Westchester Greg Sousa Executive Vice President Chief Commercial Banking Officer Pam Jones Senior Vice President Human Resources Director Mike Listner Senior Vice President Chief Credit Officer Frank Skuthan Senior Vice President Trust Services Director ANTHONY PILI Senior Vice President Director of Cash Management Elizabeth Jones Senior Vice President Chief Operating Officer DAVID DINEEN Senior Vice President Director of Wealth Services Senior Leadership Team
Non - GAAP Reconciliation 15 Dollar Values in Thousands As of the Year Ended December 31, 3 months Ended, 2018 2019 2020 2021 3/31/2022 Total Common Equity 109,279 122,063 135,423 182,836 164,549 Goodwill 5,359 5,359 5,359 5,359 5,359 Other Intangibles 2,535 2,249 1,963 1,678 1,606 Less: Total Intangible Assets 7,894 7,608 7,322 7,037 6,965 Tangible Common Equity 101,385 114,455 128,101 175,799 157,584 Tangible Book Value per Share $22.52 $25.41 $28.57 $31.18 $27.97 Total Assets 1,064,873 1,228,430 1,664,936 2,142,583 2,281,063 Goodwill 5,359 5,359 5,359 5,359 5,359 Other Intangibles 2,535 2,249 1,963 1,678 1,606 Less: Total Intangible Assets 7,894 7,608 7,322 7,037 6,965 Tangible Assets 1,056,979 1,220,822 1,657,614 2,135,546 2,274,098 Tangible Common Equity / Tangible Assets 9.59% 9.38% 7.73% 8.23% 6.93% GAAP-based Efficiency Ratio 74.65% 68.73% 66.87% 59.11% 57.38% Net Interest Income 35,912 43,281 48,739 60,461 16,339 Noninterest Income 10,019 9,814 11,423 12,102 3,005 Less: Net Gains on Sale of Securities - (219) 804 - - Adjusted Revenue 45,931 53,314 59,358 72,563 19,344 Total Noninterest Expense 34,286 36,491 40,231 43,458 11,821 Efficiency Ratio, Adjusted 74.65% 68.45% 67.78% 59.89% 61.11%