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, 2009. Net income for the nine months ended March 31, 2009 amounted to $3.0 million or $0.73 per basic and diluted share as compared to $1.9 million or $0.45 per basic and diluted share for the nine months ended March 31, 2008, an increase of $1.1 million, or 57.9%. Net income for the quarter ended March 31, 2009 amounted to $1.2 million or $0.28 per basic and diluted share as compared to $684,000 or $0.17 per basic and $0.16 per diluted share for the quarter ended March 31, 2008, an increase of $472,000, or 69.0%.
Donald E. Gibson, President and CEO stated, “We are pleased to report strong earnings for the quarter especially when one considers the many financial challenges confronting our national, state and local economies.”
The most significant factor contributing to the improved earnings was higher net interest income, which increased to $11.6 million for the nine months ended March 31, 2009 as compared to $8.7 million for the nine months ended March 31, 2008, an increase of $2.9 million or 33.3%. Net interest income increased to $3.9 million for the quarter ended March 31, 2009 as compared to $3.2 million for the quarter ended March 31, 2008, an increase of $764,000 million or 23.9%. Net interest rate spread increased 48 basis points to 3.56% for the nine months ended March 31, 2009 as compared to 3.08% for the nine ended March 31, 2008. Net interest rate spread increased 16 basis points to 3.47% for the quarter ended March 31, 2009 as compared to 3.31% for the quarter ended March 31, 2008. Net interest margin increased 26 basis points to 3.84% for the nine months ended March 31, 2009 as compared to 3.58% for the nine months ended March 31, 2008. Net interest margin decreased one basis point to 3.73% for the quarter ended March 31, 2009 as compared to 3.74% for the quarter ended March 31, 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 $1.8 million and $449,000 for the nine months ended March 31, 2009 and 2008, respectively, an increase of $1.3 million or 289.5%. The provision for loan losses amounted to $1.2 million and $171,000 for the quarters ended March 31, 2009 and 2008, respectively, an increase of $1.0 million. Contributing to the increased provision was continued growth in the loan portfolio, and an increase in the amount of loan charge-offs. Net charge-offs amounted to $372,000 and $132,000 for the nine months ended March 31, 2009 and 2008, respectively, an increase of $240,000. The increase in the level of charge-offs reflected the decline in the overall economy. As a result, the level of allowance for loan losses to total loans receivable has been increased to 1.23% as of March 31, 2009 as compared to 0.78% as of March 31, 2008.
Noninterest income increased to approximately $4.9 million for the nine months ended March 31, 2009 compared to $3.4 million for the nine months ended March 31, 2008, an increase of $1.5 million. Noninterest income increased to $2.7 million for the quarter ended March 31, 2009 compared to $1.1 million for the quarter ended March 31, 2008, an increase of $1.6 million. Noninterest income for the nine months and quarter ended March 31, 2009 reflected a one time cash payment of approximately $1.7 million ($1.0 million net of tax) received from TransFirst LLC. This payment was the result of The Bank of Greene County transferring its merchant bank card processing business to TransFirst LLC. Also reflected in noninterest income for the nine months ended March 31, 2009 was an impairment charge of $220,000 ($135,000 net of tax) related to the other-than-temporary impairment of a Lehman Brothers Holdings, Inc. debt security held by the Company.
Noninterest expense increased $1.0 million or 11.1% to $10.0 million for the nine months ended March 31, 2009 as compared to $9.0 million for the nine months ended March 31, 2008. Noninterest expense increased $305,000 or 9.5% to $3.5 million for the quarter ended March 31, 2009 as compared to $3.2 million for the quarter ended March 31, 2008. The Company allocated $351,000 toward the expected future termination of its currently frozen defined benefit plan during the nine months ended March 31, 2009. Most recently, the Company has decided not to terminate the current defined benefit plan, but instead will modify the plan, moving it out of the existing multi-employer plan. The Company has recognized approximately $58,000 in professional expenses during the quarter and fiscal year to date ended March 31, 2009 related to this modification. It is expected that this modification will be completed within the fourth quarter of fiscal 2009. Additional expenses such as compensation and depreciation due to the new Chatham branch which opened in January 2008, and the new Ravena branch which opened in January 2009, also contributed to the higher noninterest expense.
Total assets grew $79.0 million or 20.8% to $458.6 million at March 31, 2009 as compared to $379.6 million at June 30, 2008. Securities classified as available for sale and classified as held to maturity increased $39.3 million in the aggregate to $151.4 million at March 31, 2009 as compared to $112.1 million at June 30, 2008. Loans increased $27.3 million or 11.4% to $267.4 million at March 31, 2009 as compared to $240.1 million at June 30, 2008. Funding the growth in assets was deposit growth of $76.7 million, or 23.9%, to $398.1 million at March 31, 2009 as compared to $321.4 million at June 30, 2008. The Company continues to develop new relationships with local municipalities including school districts to use the services of Greene County Commercial Bank. The level of deposits held by such public entities can be cyclical and fluctuate significantly from quarter to quarter and are significantly dependent on and affected by tax collection periods or special projects such as new buildings or renovations. These types of local municipal entities are also required to have certain forms of collateral pledged for amounts deposited over the FDIC insurance limits.
The Company’s capital ratios remain strong with total shareholders’ equity of $39.1 million at March 31, 2009, or 8.5% of total assets. The capital ratios of the bank significantly exceeded the “well capitalized” regulatory standard with a Tier 1 capital ratio of 7.69% and total risk-based capital ratio of 16.04%. Given the Company’s strong financial and liquidity positions, management determined that participation in the Troubled Asset Relief Program (TARP) Capital Purchase Program (CPP) was not warranted. Consequently, the Company elected to withdraw its application for participation in this program.
Headquartered in Catskill, New York, the Company provides full-service community-based banking in its eleven branch offices located in Greene, Columbia and Albany Counties. On January 12, 2009, the Company opened its newest branch, located on Route 9W in Ravena in southern Albany County.
Customers are offered 24-hour services through ATM network systems, an automated telephone banking system and Internet Banking through its web site at http://www.tbogc.com.
This press release contains statements about future events that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, general economic conditions, changes in interest rates, regulatory considerations, competition, technological developments, retention and recruitment of qualified personnel, and market acceptance of the Company’s pricing, products and services.
|At or for the Nine||At or for the Three|
|Months Ended March 31,||Months Ended March 31,|
|Dollars In thousands, |
except share and per share data
|Net interest income||11,640||8,742||3,944||3,180|
|Provision for loan losses||1,764||449||1,151||171|
|Income before taxes||4,811||2,660||2,012||974|
diluted shares outstanding
|Dividends declared per share 1||$||0.51||$||0.54||$||0.17||$||0.15|
|Selected Financial Ratios|
|Return on average assets||0.94||%||0.72||%||1.04||%||0.75||%|
|Return on average equity||10.69||%||6.93||%||11.98||%||7.46||%|
|Net interest rate spread||3.56||%||3.08||%||3.47||%||3.31||%|
|Net interest margin||3.84||%||3.58||%||3.73||%||3.74||%|
to total assets
to total loans
Allowance for loan losses to
Allowance for loan losses to
|Shareholders’ equity to total assets||8.52||%||9.70||%|
|Dividend payout ratio1||69.86||%||120.00||%|
|Book value per share||$||9.52||$||8.98|
1 Greene County Bancorp, MHC, the owner of 53.5% of the shares issued by the Company, waived its right to receive the dividends. No adjustment has been made to account for this waiver. It should be noted effective December 1, 2007, the Company changed to a quarterly rather than semi-annual dividend.
|As of March 31, 2009||As of June 30, 2008|
|Dollars In thousands, except share data|
|Total cash and cash equivalents||$||21,440||$||8,662|
|Long term certificate of deposit||1,000||1,000|
|Securities- available for sale, at fair value||101,822||96,692|
|Securities- held to maturity, at amortized cost||49,605||15,457|
|Federal Home Loan Bank stock, at cost||1,341||1,386|
|Gross loans receivable||267,388||240,146|
|Less: Allowance for loan losses||(3,280||)||(1,888||)|
|Unearned origination fees and costs, net||330||182|
|Net loans receivable||264,438||238,440|
|Premises and equipment||15,604||15,108|
|Accrued interest receivable||2,610||2,139|
|Prepaid expenses and other assets||627||724|
|Foreclosed real estate||100||---|
|Liabilities and shareholders’ equity|
|Noninterest bearing deposits||$||36,704||$||41,798|
|Interest bearing deposits||361,426||279,633|
|Borrowings from FHLB, short term||---||1,000|
|Borrowings from FHLB, long term||19,000||19,000|
|Accrued expenses and other liabilities||2,363||1,910|
|Total shareholders’ equity||39,094||36,267|
|Total liabilities and shareholders’ equity||$||458,587||$||379,608|
|Common shares outstanding||4,105,312||4,095,528|