Rhinebeck Bancorp, Inc. (RBKB) stock intrinsic value fair value estimate & owner earnings analysis

Rhinebeck Bancorp is the holding company for Rhinebeck Bank, a community bank in New York's Hudson Valley. It operates a corporate office and 12 branches in Dutchess, Orange and Ulster Counties, plus a representative office in Albany County that originates indirect auto and commercial loans. It holds about 10.4% of Dutchess County deposits, fourth among 15 institutions there. Earnings come mainly from the spread between interest on loans and securities and the cost of deposits, plus modest fee and mortgage-banking income. How we measured earning power. We started from operating cash flow, then removed the swings caused by changes in other assets, other liabilities, accrued interest and loans held for sale, deducted share-based and ESOP compensation as a real cost, and deducted only the maintenance portion of capital spending. Per share, the resulting owner earnings were $0.67 (2019), $1.02 (2020), $0.79 (2021), $0.80 (2022), $0.62 (2023), $0.67 (2024) and $1.25 (2025). We anchor on the median of all seven years, $0.79 per share. That window is appropriate because the seven years span a pandemic credit-loss year, the 2022-2023 deposit-cost squeeze and the recovery. One accounting point matters: the cash-flow method adds back the provision for credit losses (about $1.7 million in 2025) because it is not a cash outlay. Actual loan losses are realized elsewhere, so we treat credit risk in the bear case rather than adjusting the level. Growth check. Owner earnings per share rose about 87% in 2025 ($0.67 to $1.25). We do not extend that into the future: about $2.5 million of it was a working-capital reversal, and the 2024 base year was depressed by a $16.0 million loss on securities sales. Year 1 growth in every case starts at zero from the anchor, below the trailing actual. Net income of $10.0 million in 2025 (about $0.92 per share) and $4.8 million in the first half of 2026 (net interest income of $22.8 million against $22.5 million a year earlier) show the higher 2025 earnings base has held, but a single strong year does not move our median anchor. Base case: $13.20 per share. Owner earnings stay at $0.79 per share and the deposit franchise keeps producing that amount, worth about $13.20 at a 6% discount rate. Over 2019-2024 per-share owner earnings did not grow ($0.67 in both 2019 and 2024), so we credit no growth. Retained earnings, new branches, loan-market expansion and margin improvement are left out because the record does not show them lifting per-share earnings. For context, stockholders' equity was $136.9 million at the end of 2025. Bear case: $6.70 per share. Net interest income fell from $41.8 million in 2022 to $38.0 million in 2023 and $37.7 million in 2024 when deposit costs rose, and owner earnings dropped to $0.62 in 2023. We assume a repeat, with earnings at $0.55 per share for ten years and then eroding 5% a year. A pandemic-type credit event is also visible in the record: the provision for loan losses was $7.1 million in 2020. The bank's lending is concentrated in four New York counties with no offsetting geographic diversity. Bull case: $17.50 per share. Earnings hold at about $1.05 per share, close to the $1.02 achieved in 2020 and below the 2025 figure, because the 2025 rebound in net interest income persists. We do not add growth because none is evidenced in per-share results. What the shares appear to be worth. The three cases span $6.70 to $17.50, with $13.20 as the central estimate. Because the downside is sensitive to deposit costs and credit losses at a small single-region bank, a large discount to the central estimate is warranted, and the margin-of-safety price is $7.40. What would make this wrong. The value would be too low if the higher 2025-2026 earnings prove durable, since 2025 net income was about $0.92 per share against our $0.79 anchor. It would be too high if a regional credit downturn or another rise in deposit costs arrives, or if the bank books another large securities-sale loss like the $16.0 million one in 2024. The figures rest on the company's audited annual reports through fiscal 2025 and its 2026 second-quarter report; no management guidance, analyst estimates or other outside sources were used.