Orange County Bancorp (OBT -4.52%), a banking and financial services company serving businesses and individuals across New York’s Hudson Valley and beyond, released its results for Q2 2025 on July 30, 2025. The most notable news is that EPS for the period came in at $0.87, beating analyst expectations by 16.1% (GAAP). Net income grew 27.4% to $10.5 million in Q2 2025. However, revenue (GAAP) fell short of forecasts, totaling $25.1 million compared to the expected $29.4 million. The quarter saw strong growth in core deposits and continued loan expansion, but also experienced a sharp jump in nonperforming loans and benefited from notable one-time gains in noninterest income. Overall, the results show robust profit growth, while highlighting areas for ongoing attention.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.87 | $0.75 | $0.73 | 19.2% |
| Net Income (GAAP) | $10.5 million | $8.2 million | 28.0% | |
| Net Interest Income | $25.1 million | $24.1 million | 4.1% | |
| Non-interest Income | $7.3 million | $3.8 million | 92.2% | |
| Trust and Investment Advisory Income | $3.4 million | $3.0 million | 13.3% | |
| Book Value per Share | $18.90 | $16.35* | 15.6% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Key Success Factors
Orange County Bancorp provides community-focused banking, lending, and wealth management. Its core business includes gathering deposits from local businesses and individuals, funding loans—especially for commercial real estate and small businesses—and offering trust and investment advisory services.
In recent years, it has focused on growing its base of core deposits, managing credit risk in its sizable portfolio of commercial real estate loans, and expanding its footprint in demographically attractive counties. Another priority is the diversification of income streams through wealth management and fee-based services. These factors play a central role in sustaining profitability and funding continued loan growth.
Quarter Highlights: Financial and Operational Developments
During the period, net interest income—the money the bank earns on loans minus what it pays on deposits—climbed 4.2% year over year in Q2 2025. This came despite the revenue figure missing expectations, as the net interest margin remained steady at 4.06%. Management attributed this stability to disciplined deposit pricing, with the cost of deposits lingering at 1.30%. Deposits rose $123.4 million to $2.3 billion as of June 30, 2025, allowing the bank to reduce borrowing and replace more expensive brokered funds with low-cost client deposits.
On the loan side, total loans grew 5.6% to $1.9 billion as of June 30, 2025, driven largely by commercial real estate and construction lending. Loans for commercial real estate increased by $72.4 million and construction by $30.5 million from December 31, 2024 to June 30, 2025. Nonperforming loans—the portion not earning interest—rose to $11.7 million, or 0.61% of total loans, more than doubling from the end of last year. Most of this increase came within commercial real estate lending.
Noninterest income, which includes fees and other sources outside of core lending, surged 92.2% year over year in Q2 2025 (GAAP). Over half of this spike in non-interest income was due to nonrecurring events: a $1.2 million branch sale and $2.4 million in proceeds from bank-owned life insurance policies. Excluding these, underlying fee revenue from trust and investment advisory services still grew nearly 15% in Q2 2025. Wealth management assets under oversight climbed to $1.83 billion, up 2.5% from the start of the year as of June 30, 2025. This steady fee growth is in line with management’s strategy to diversify revenue and offer more services to business clients and high-net-worth households.
The efficiency ratio (which compares costs to revenue) improved to 51.6% in Q2 2025 from 55.5% in Q2 2024, signalling progress in operating discipline. In addition, following a $46 million common stock offering in Q2 2025, capital ratios are stronger. This capital infusion provides greater flexibility for further organic growth and supports ongoing expansion activities in Westchester and Rockland counties.
Looking Ahead: Management Guidance and Investor Focus
Management did not provide explicit financial guidance for the next quarter or full fiscal 2025. In prepared remarks, leadership highlighted the company’s strengthened position following the recent capital raise and its intent to pursue expansion and organic loan growth, all while maintaining risk discipline.
For the quarters ahead, investors may want to watch loan growth in commercial real estate and related credit quality metrics. The recent uptick in nonperforming loans could signal a trend if not contained. It will also be important to track the underlying—that is, recurring—fee income trajectory as one-time gains normalize, and to monitor the proportion of uninsured deposits, which stood at 43% at quarter-end.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
