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 nine months and quarter ended March 31, 2011. Net income for the nine months ended March 31, 2011 amounted to $3.9 million or $0.95 per basic share and $0.94 per diluted share as compared to $3.6 million or $0.88 per basic and diluted share for the nine months ended March 31, 2010, an increase of $289,000, or 8.0%. Net income for the quarters ended March 31, 2011 and 2010 amounted to $1.2 million or $0.30 per basic share and diluted share.
Donald E. Gibson, President & CEO stated, “In addition to strong quarterly earnings, we are pleased to report The Bank of Greene County has been ranked as one of the safest banks in our nation, according to Seifried & Brew, LLC., a community bank risk management firm. The ranking recognizes and honors those community banks whose policies and practices reflect the highest level of safety and soundness.”
The most significant factor contributing to the higher earnings was higher net interest income. Net interest income increased $1.4 million to $14.6 million for the nine months ended March 31, 2011 compared to $13.2 million for the nine months ended March 31, 2010 and increased $306,000 to $4.9 million for the quarter ended March 31, 2011 compared to $4.6 million for the quarter ended March 31, 2010. Net interest spread decreased 2 basis points to 3.70% for the nine months ended March 31, 2011 from 3.72% for the nine months ended March 31, 2010, and decreased 29 basis points to 3.61% for the quarter ended March 31, 2011 from 3.90% for the quarter ended March 31, 2010. Net interest margin decreased 6 basis points to 3.86% for the nine months ended March 31, 2011 from 3.92% for the nine months ended March 31, 2010, and decreased 34 basis points to 3.75% for the quarter ended March 31, 2011 as compared to 4.09% for the quarter ended March 31, 2010. The increase in average balances of loans and securities, along with a decrease in rates paid on deposit accounts, which was partially offset by the decrease in yield earned on loans and securities, primarily led to an increase in net interest income when comparing the nine months and quarters ended March 31, 2011 and 2010.
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 $1.2 million and $1.0 million for the nine months ended March 31, 2011 and 2010, respectively, an increase of $195,000 or 19.8%. The provision for loan losses amounted to $343,000 and $307,000 for the quarters ended March 31, 2011 and 2010, respectively, an increase of $36,000, or 11.7%. The increase in the level of provision was partially a result of the shift to a greater level of commercial loans, and an increase in the amount of nonperforming assets. The commercial real estate and commercial loan portfolio has grown as a percent of total loans from 24.8% at March 31, 2010 to 27.0% at March 31, 2011. Generally, commercial loans are considered to have greater credit risk, and require a higher level of allowance for loan loss. Nonperforming assets amounted to $6.9 million and $3.2 million at March 31, 2011 and 2010, respectively, an increase of $3.7 million or 115.6%. Of this increase, $1.3 million was in residential mortgage loans, $1.2 million was in commercial real estate loans, and $453,000 was in multi-family loans. Foreclosed assets increased $563,000 from March 31, 2010 to March 31, 2011. Net charge-offs amounted to $327,000 and $539,000 for the nine months ended March 31, 2011 and 2010, respectively. The increase in the level of nonperforming assets reflected the decline in the overall economy. As a result, the level of allowance for loan losses to total loans receivable increased to 1.62% as of March 31, 2011 as compared to 1.33% as of March 31, 2010. At March 31, 2011, nonperforming assets were 1.23% of total assets and nonperforming loans were 2.14% of total loans. The Company has not been an originator of “no documentation” mortgage loans and the loan portfolio does not include any mortgage loans that the Company classifies as sub-prime.
Noninterest income increased $39,000, and $16,000 when comparing the nine months and quarters ended March 31, 2011 and 2010, respectively. Noninterest income amounted to $3.6 million and $1.1 million for the nine months and quarter ended March 31, 2011, respectively. The Company recorded a net gain on sale of investments during the nine months and quarter ended March 31, 2011 totaling $233,000 and $21,000, respectively and a net loss on sale of investments during the nine months ended March 31, 2010 totaling $5,000. Excluding these items, noninterest income decreased $199,000 when comparing the nine months ended March 31, 2011 and 2010, and $5,000 when comparing the quarters ended March 31, 2011 and 2010. These decreases were primarily the result of lower service charges on deposit accounts, primarily NSF fees, which decreased $372,000 and $39,000 for the nine months and quarters ended March 31, 2011 and 2010, respectively, resulting from changes implemented related to the Company’s overdraft protection program.. Debit card fees increased $141,000 and $49,000 when comparing the nine months and quarters ended March 31, 2011 and 2010, respectively, as a result of a higher volume of transactions due to growth in the number of checking accounts with debit cards.
Noninterest expense increased $845,000 or 8.3% to $11.1 million for the nine months ended March 31, 2011 as compared to $10.2 million for the nine months ended March 31, 2010. Noninterest expense increased $285,000 or 8.1% to $3.8 million for the quarter ended March 31, 2011 as compared to $3.5 million for the quarter ended March 31, 2010. The increases for both the nine months and the quarter ended March 31, 2011 were primarily the result of an increase in salaries and benefits as well as higher advertising and promotional expenses due to the opening of the new Germantown branch in October 2010.
Total assets grew $65.1 million or 13.1% to $560.4 million at March 31, 2011 as compared to $495.3 million at June 30, 2010. Securities classified as both available for sale and held to maturity increased $45.3 million to $212.6 million at March 31, 2011 as compared to $167.3 million at June 30, 2010. Net loans increased $1.1 million or 0.4% to $296.7 million at March 31, 2011 as compared to $295.6 million at June 30, 2010. Funding the growth in assets in the nine months ended March 31, 2011 were increased deposits of $77.1 million to $498.8 million. This increase was primarily the result of an increase of $63.4 million in balances at the Company’s commercial bank subsidiary due primarily to the annual collection of taxes by several local school districts. The growth in deposits also was utilized to reduce borrowings, which decreased $14.1 million when comparing March 31, 2011 and June 30, 2010. Total shareholders’ equity amounted to $46.7 million at March 31, 2011, or 8.3% of total assets.
Headquartered in Catskill, New York, the Company provides full-service community-based banking in its twelve 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 Nine||At or for the Three|
|Months Ended March 31,||Months Ended March 31,|
|Dollars In thousands, |
except share and per share data
|Net interest income||14,612||13,201||4,920||4,614|
|Provision for loan losses||1,179||984||343||307|
|Income before taxes||5,935||5,525||1,863||1,862|
diluted shares outstanding
|Dividends declared per share 2||$0.725||$0.510||$0.175||$0.170|
Selected Financial Ratios
|Return on average assets||0.99%||1.03%||0.91%||1.03%|
|Return on average equity||11.40%||11.53%||10.71%||11.40%|
|Net interest rate spread||3.70%||3.72%||3.61%||3.90%|
|Net interest margin||3.86%||3.92%||3.75%||4.09%|
to total assets
to total loans
Allowance for loan losses to
Allowance for loan losses to
|Shareholders’ equity to total assets||8.34%||9.08%|
|Dividend payout ratio2||76.32%||57.95%|
|Book value per share||$11.27||$10.56|
Noninterest expense divided by the sum of net interest income and noninterest income.
Greene County Bancorp, MHC, the owner of 56.0% of the shares issued by the Company, waived its right to receive the dividends. No adjustment has been made to account for this waiver. Dividends per share for the nine months and quarter ended March 31, 2011 include a special dividend of $0.20 per share paid on December 15, 2010.
|As of March 31, 2011||As of June 30, 2010|
|Dollars In thousands, except share data|
|Total cash and cash equivalents||$28,596||$9,643|
|Long term certificate of deposit||---||1,000|
|Securities- available for sale, at fair value||94,938||89,805|
|Securities- held to maturity, at amortized cost||117,634||77,520|
|Federal Home Loan Bank stock, at cost||1,232||1,866|
|Gross loans receivable||301,071||299,200|
|Less: Allowance for loan losses||(4,876)||(4,024)|
|Unearned origination fees and costs, net||456||406|
|Net loans receivable||296,651||295,582|
|Premises and equipment||15,515||14,804|
|Accrued interest receivable||2,828||2,731|
|Prepaid expenses and other assets||2,487||2,372|
|Liabilities and shareholders’ equity|
|Noninterest bearing deposits||$48,959||$44,239|
|Interest bearing deposits||449,890||377,493|
|Borrowings from FHLB, short term||---||9,100|
|Borrowings from FHLB, long term||12,000||17,000|
|Accrued expenses and other liabilities||2,864||2,988|
|Total shareholders’ equity||46,731||44,503|
|Total liabilities and shareholders’ equity||$560,444||$495,323|
|Common shares outstanding||4,145,828||4,118,912|