Greene County Bancorp, Inc. (the “Company”) (NASDAQ: GCBC), the holding company for The Bank of Greene County and its subsidiary Greene County Commercial Bank, today reported net income for the quarter ended September 30, 2009, which is the first quarter of the Company’s fiscal year ending June 30, 2010. Net income for the quarter ended September 30, 2009 amounted to $1.2 million or $0.29 per basic and diluted share as compared to $809,000 or $0.20 per basic and diluted share for the quarter ended September 30, 2008, an increase of $375,000, or 46.4%.
Donald E. Gibson, President and CEO, said “In addition to solid quarterly earnings we are pleased to report that the Company has been named to the Sandler O’Neill, Class of 2009 Small Cap-All Stars List. The objective of the Sm-All Stars is to identify the top performing small-cap banks and thrifts in the nation. Selection is based on growth, profitability, credit quality, and capital strength. Greene County Bancorp was one of only 30 selected for the 2009 Sm-All Stars list.”
The most significant contributor to the improved earnings was higher net interest income, which increased $520,000 or 14.0% over the same quarter the prior year. Net interest income increased to $4.2 million for the quarter ended September 30, 2009 as compared to $3.7 million for the quarter ended September 30, 2008. This was primarily the result of a $69.3 million increase in average earning assets from $373.5 million for the quarter ended September 30, 2008 to $442.8 million for the quarter ended September 30, 2009 and a 57 basis points decrease in the rates paid on average interest bearing liabilities from 2.05% to 1.48%, for the quarters ended September 30, 2008 and 2009, respectively. This was partially offset by a 60 basis points decrease in the yield on interest earning assets from 5.71% to 5.11% for the quarters ended September 30, 2008 and 2009 respectively, which led to a decrease in both the net interest rate spread and net interest margin when comparing these periods. Net interest rate spread decreased 3 basis points to 3.63% for the quarter ended September 30, 2009 as compared to 3.66% for the quarter ended September 30, 2008. Net interest margin decreased 15 basis points to 3.83% for the quarter ended September 30, 2009 as compared to 3.98% for the quarter ended September 30, 2008.
Due to the worsening economic climate, management continues to closely monitor asset quality and adjust the level of the allowance for loan losses when necessary. The provision for loan losses amounted to $248,000 and $195,000 for the quarters ended September 30, 2009 and 2008, respectively, an increase of $53,000 or 27.2%. Contributing to the increased provision was continued growth in the loan portfolio, and an increase in nonperforming assets. Nonperforming assets amounted to $4.1 million and $2.0 million at September 30, 2009 and 2008, respectively, an increase of $2.1 million. Of this increase, $1.1 million was in residential mortgage loans, and $1.1 million were in commercial real estate loans. Home equity loans and non-mortgage loans declined slightly when comparing the quarters ended September 30, 2009 and 2008. The allowance for loan losses to total loans receivable has increased to 1.30% as of September 30, 2009 as compared to 0.78% as of September 30, 2008.
Noninterest income also contributed to enhanced earnings in the quarter ended September 30, 2009 by increasing $157,000 or 15.0% over the same quarter in the prior year. Noninterest income increased to $1.2 million for the quarter ended September 30, 2009 as compared to $1.0 million for the quarter ended September 30, 2008. The majority of the increase in noninterest income was the result of an other-than-temporary impairment charge recorded during the quarter ended September 30, 2008 of $221,000 ($135,000 net of tax) on a Lehman Brothers debt security held by the Company. There was no other-than-temporary impairment charge recorded during the quarter ended September 30, 2009.
Noninterest expense was flat when comparing the quarters ended September 30, 2009 and 2008 at $3.4 million. During the quarter ended September 30, 2008, the Company accrued $351,000 toward the expected future termination of its currently frozen defined benefit plan. The defined benefit pension plan was transferred to a single-employer plan from the previously existing multi-employer plan during the fourth quarter of the fiscal year ended June 30, 2009. As a result, pension expense decreased by $288,000 for the quarter ended September 30, 2009 when compared to the quarter ended September 30, 2008. Offsetting this decrease was additional expenses such as FDIC insurance premiums, compensation and depreciation. FDIC insurance premiums increased $117,000 to $135,000 for the quarter ended September 30, 2009 as compared to $18,000 for the quarter ended September 30, 2008 as a result of both higher deposit balances and an increase in the rates assessed against the deposits. Compensation and depreciation increased due to the opening of the new Ravena branch in January 2009. Also included in noninterest expense for the quarter ended September 30, 2009 was a realized loss of $8,000 on the sale of foreclosed real estate. As of September 30, 2009, the Company held no foreclosed real estate.
Total assets grew $11.2 million or 2.4% to $471.7 million at September 30, 2009 as compared to $460.5 million at June 30, 2009. Loans increased $8.4 million or 3.1% to $279.4 million at September 30, 2009 as compared to $271.0 million at June 30, 2009. Securities held to maturity increased $2.5 million to $65.8 million at September 30, 2009 as compared to $63.3 million at June 30, 2009. Funding the growth in assets was primarily deposit growth of $10.7 million, or 2.7% to $409.4 million at September 30, 2009 as compared to $398.7 million at June 30, 2009. Total shareholders’ equity amounted to $41.6 million at September 30, 2009, or 8.8% of total assets.
Headquartered in Catskill, New York, the Company provides full-service community-based banking in its ten branch offices located in Greene, Columbia and Albany Counties. Customers are offered 24-hour services through ATM network systems, an automated telephone banking system and Internet Banking through its web site at http://www.tbogc.com.
This press release contains statements about future events that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, general economic conditions, changes in interest rates, regulatory considerations, competition, technological developments, retention and recruitment of qualified personnel, and market acceptance of the Company’s pricing, products and services.
|At or For the Three|
|Months Ended September 30,|
|Dollars In thousands, except share and per share data||2009||2008|
|Net interest income||4,239||3,719|
|Provision for loan losses||248||195|
|Income before taxes||1,810||1,210|
|Weighted average shares outstanding||4,105,312||4,096,149|
|Weighted average diluted shares outstanding||4,132,766||4,119,313|
|Dividends declared per share 1||$0.17||$0.17|
Selected Financial Ratios
|Return on average assets||1.02||%||0.82||%|
|Return on average equity||11.59||%||8.87||%|
|Net interest rate spread||3.63||%||3.66||%|
|Net interest margin||3.83||%||3.98||%|
|Non-performing assets to total assets||0.87||%||0.45||%|
|Non-performing loans to total loans||1.49||%||0.78||%|
|Allowance for loan losses to non-performing loans||88.24||%||100.61||%|
|Allowance for loan losses to total loans||1.30||%||0.78||%|
|Shareholders’ equity to total assets||8.83||%||8.37||%|
|Dividend payout ratio1||58.62||%||85.00||%|
|Book value per share||$10.14||$8.97|
1 Greene County Bancorp, MHC, the owner of 53.5% of the shares of common stock issued by the Company, waived its right to receive the dividends on such shares. No adjustment has been made to account for this waiver. Dividend payout ratio represents on an annualized basis the ratio of dividends per share divided by basic earnings per share.
|As of September 30, 2009||As of June 30, 2009|
|Dollars In thousands|
|Total cash and cash equivalents||$15,142||$9,443|
|Long term certificate of deposit||1,000||1,000|
|Securities- available for sale, at fair value||93,450||98,271|
|Securities- held to maturity, at amortized cost||65,777||63,336|
|Federal Home Loan Bank stock, at cost||1,495||1,495|
|Gross loans receivable||279,441||271,001|
|Less: Allowance for loan losses||(3,632||)||(3,420||)|
|Unearned origination fees and costs, net||355||321|
|Net loans receivable||276,164||267,902|
|Premises and equipment||15,125||15,274|
|Accrued interest receivable||2,569||2,448|
|Prepaid expenses and other assets||993||1,152|
|Foreclosed real estate||---||215|
|Liabilities and shareholders’ equity|
|Noninterest bearing deposits||$38,544||$39,772|
|Interest bearing deposits||370,827||358,957|
|FHLB borrowings, long term||19,000||19,000|
|Accrued expenses and other liabilities||1,710||2,543|
|Total shareholders’ equity||41,634||40,264|
|Total liabilities and shareholders’ equity||$471,715||$460,536|
|Common shares outstanding||4,105,312||4,105,312|