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 year and quarter ended June 30, 2009. Net income for the year ended June 30, 2009 amounted to $4.1 million or $1.00 per basic and $0.99 per diluted share as compared to $2.7 million or $0.66 per basic and $0.65 diluted share for the year ended June 30, 2008, an increase of $1.4 million, or 51.9%. Net income for the quarter ended June 30, 2009 amounted to $1.1 million or $0.26 per basic and diluted share as compared to $841,000 or $0.21 per basic and $0.20 per diluted share for the quarter ended June 30, 2008, an increase of $247,000, or 29.4%.
Donald E. Gibson, President & CEO stated: “In this very difficult economic environment we are pleased to report that Greene County Bancorp had a very solid year. Thanks to the extra efforts of our dedicated team and support from our Board of Directors, fiscal year 2009 results were highlighted with record earnings along with strong growth in loans, deposits and capital.”
The most significant factor contributing to the improved earnings was higher net interest income, which increased to $15.7 million for the year ended June 30, 2009 as compared to $12.2 million for the year ended June 30, 2008, an increase of $3.5 million or 28.7%. Net interest income increased to $4.1 million for the quarter ended June 30, 2009 as compared to $3.4 million for the quarter ended June 30, 2008, an increase of $642,000 or 18.6%. Net interest income for the quarter and fiscal year ended June 30, 2009 was affected by the increase in the volume of loans and securities complemented by the decrease in rates paid on deposit accounts. Total average earning assets increased $78.8 million to $413.8 million for the fiscal year ended June 30, 2009 compared to the fiscal year ended June 30, 2008. Total average earning assets increased $77.0 million to $441.6 million for the quarter ended June 30, 2009 compared to the quarter ended June 30, 2008. Net interest rate spread increased 36 basis points to 3.54% for the year ended June 30, 2009 as compared to 3.18% for the year ended June 30, 2008. Net interest rate spread increased 5 basis points to 3.48% for the quarter ended June 30, 2009 as compared to 3.43% for the quarter ended June 30, 2008. Net interest margin increased 16 basis points to 3.80% for the year ended June 30, 2009 as compared to 3.64% for the year ended June 30, 2008. Net interest margin decreased 8 basis points to 3.70% for the quarter ended June 30, 2009 as compared to 3.78% for the quarter ended June 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 $2.0 million and $581,000 for the year ended June 30, 2009 and 2008, respectively, an increase of $1.4 million or 247.3%. The provision for loan losses amounted to $254,000 and $132,000 for the quarters ended June 30, 2009 and 2008, respectively, an increase of $122,000. Contributing to the increased provision was continued growth in the loan portfolio, an increase in nonperforming assets, and an increase in the amount of loan charge-offs. Nonperforming assets amounted to $2.9 million and $1.9 million at June 30, 2009 and 2008, respectively, an increase of $1.0 million. Net charge-offs amounted to $486,000 and $179,000 at June 30, 2009 and 2008, respectively, an increase of $307,000. The increase in the level of charge-offs and nonperforming assets 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 1.26% as of June 30, 2009 as compared to 0.79% as of June 30, 2008.
Noninterest income increased to approximately $6.1 million for the year ended June 30, 2009 compared to $4.6 million for the year ended June 30, 2008, an increase of $1.5 million. Noninterest income was flat at $1.2 million when comparing the quarters ended June 30, 2009 and 2008. Noninterest income for the year ended June 30, 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 year ended June 30, 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 $1.3 million or 10.6% to $13.6 million for the year ended June 30, 2009 as compared to $12.3 million for the year ended June 30, 2008. Noninterest expense increased $292,000 or 8.9% to $3.6 million for the quarter ended June 30, 2009 as compared to $3.3 million for the quarter ended June 30, 2008. The most significant increase in noninterest expense was in FDIC insurance premiums. During the quarter ended June 30, 2009, the FDIC imposed a special assessment on all insured financial institutions equal to five cents on the insured Bank’s assets less Tier 1 capital as of June 30, 2009 to be paid on September 30, 2009. As a result of this special assessment, along with increases in premium rates and a $77.3 million increase in deposit balances during fiscal 2009, FDIC insurance expense totaled $670,000 for the year ended June 30, 2009 compared to $52,000 for the year ended June 30, 2008. FDIC insurance expense totaled $539,000 and $14,000 for the quarters ended June 30, 2009 and 2008, respectively. Salaries and employee benefits increased $328,000 to $6.9 million for the year ended June 30, 2009 as compared to $6.6 million for the year ended June 30, 2008 and were primarily related to compensation expense related to the 2008 Stock Option Plan, bonuses and an increase in the number of employees as a result of the opening of new branches. Salaries and employee benefits decreased $422,000 to $1.4 million for the quarter ended June 30, 2009 as compared to $1.8 million for the quarter ended June 30, 2008. This primarily was a result of modifying the defined benefit pension plan to a single-employer plan from the existing multi-employer plan, which resulted in a reduction of pension expense by $308,000.
Total assets grew $80.9 million or 21.3% to $460.5 million at June 30, 2009 as compared to $379.6 million at June 30, 2008. Securities classified as available for sale and classified as held to maturity increased $49.5 million in the aggregate to $161.6 million at June 30, 2009 as compared to $112.1 million at June 30, 2008. Loans increased $29.5 million or 12.4% to $267.9 million at June 30, 2009 as compared to $238.4 million at June 30, 2008. This growth was primarily in residential and commercial real estate and business loans. Funding the growth in assets was deposit growth of $77.3 million, or 24.1%, to $398.7 million at June 30, 2009 as compared to $321.4 million at June 30, 2008. Of the $77.3 million growth in deposits, $41.9 million was in new municipal deposits at the Greene County Commercial Bank, and $35.4 million was in personal interest-bearing checking accounts, savings and time deposits, which grew by $10.8 million, $9.8 million and $15.1 million, respectively.
The Company’s capital ratios remain strong with total shareholders’ equity of $40.3 million at June 30, 2009, or 8.7% of total assets. The capital ratios of the bank significantly exceeded the “well capitalized” regulatory standard. 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||At or for the|
|Year Ended June 30,||Three Months Ended June 30,|
|Dollars In thousands, |
except share and per share data
|Net interest income||15,730||12,190||4,090||3,448|
|Provision for loan losses||2,018||581||254||132|
|Income before taxes||6,252||3,885||1,441||1,225|
diluted shares outstanding
|Dividends declared per share 1||$0.68||$0.70||$0.17||$0.16|
Selected Financial Ratios
|Return on average assets||0.94||%||0.76||%||0.94||%||0.87||%|
|Return on average equity||10.77||%||7.52||%||10.99||%||9.23||%|
|Net interest rate spread||3.54||%||3.18||%||3.48||%||3.43||%|
|Net interest margin||3.80||%||3.64||%||3.70||%||3.78||%|
to total assets
to total loans
Allowance for loan losses to
Allowance for loan losses to
|Shareholders’ equity to total assets||8.74||%||9.55||%|
|Dividend payout ratio1||68.00||%||106.06||%|
|Actual dividends paid to net income||29.94||%||47.10||%|
|Book value per share||$9.81||$8.87|
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 June 30, 2009||As of June 30, 2008|
|Dollars In thousands, except share data|
|Total cash and cash equivalents||$9,443||$8,662|
|Long term certificate of deposit||1,000||1,000|
|Securities- available for sale, at fair value||98,271||96,692|
|Securities- held to maturity, at amortized cost||63,336||15,457|
|Federal Home Loan Bank stock, at cost||1,495||1,386|
|Gross loans receivable||271,001||240,146|
|Less: Allowance for loan losses||(3,420||)||(1,888||)|
|Unearned origination fees and costs, net||321||182|
|Net loans receivable||267,902||238,440|
|Premises and equipment||15,274||15,108|
|Accrued interest receivable||2,448||2,139|
|Prepaid expenses and other assets||1,152||724|
|Foreclosed real estate||215||---|
|Liabilities and shareholders’ equity|
|Noninterest bearing deposits||$39,772||$41,798|
|Interest bearing deposits||358,957||279,633|
|Borrowings from FHLB, short term||---||1,000|
|Borrowings from FHLB, long term||19,000||19,000|
|Accrued expenses and other liabilities||2,543||1,910|
|Total shareholders’ equity||40,264||36,267|
|Total liabilities and shareholders’ equity||$460,536||$379,608|
|Common shares outstanding||4,105,312||4,095,528|