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Greene County Bancorp, Inc. - Reports Record Quarterly Earnings

Stocks in this article: GCBC

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, 2011, which is the first quarter of the Company’s fiscal year ending June 30, 2012. Net income for the quarter ended September 30, 2011 amounted to $1.5 million or $0.36 per basic and diluted share as compared to $1.3 million or $0.32 per basic and diluted share for the quarter ended September 30, 2010, an increase of $185,000, or 14.0%.

Donald E. Gibson, President and CEO stated; “I am proud to report record quarterly earnings that were driven by solid performance throughout the Company. Our long term investments in people, new branches, new products and technology continue to help us grow – and grow more efficiently – significantly contributing to the bottom line.”

Selected highlights for the quarter ended September 30, 2011 were as follows:

  • Net interest income increased $402,000 to $5.2 million for the quarter ended September 30, 2011 as compared to $4.8 million for the quarter ended September 30, 2010. This increase was the result of continued growth in earning assets which grew $49.6 million and a 26 basis point decrease in the rates paid on average interest bearing liabilities when comparing the quarters ended September 30, 2011 and 2010.
  • Net interest spread decreased 4 basis points to 3.83% as compared to 3.87% when comparing the quarters ended September 30, 2011 and 2010, respectively. Net interest margin decreased 8 basis points to 3.96% as compared to 4.04% when comparing these same periods. This narrowing of the spread and margin were primarily due to the growth in deposits being invested mainly in securities which carry much lower yields than loans.
  • Provision for loan loss increased $121,000 or 34.3% to $474,000 for the quarter ended September 30, 2011 as compared to $353,000 for the quarter ended September 30, 2010. During the quarter ended September 30, 2011, the Company added to its provision for loan loss as a result of its assessment of the impact on the loan portfolio for potential losses resulting from the recent destruction caused by Hurricane Irene. The increase was also due to the continued increases in nonperforming assets and loan charge-offs.
  • The allowance for loan losses totaled $5.5 million at September 30, 2011 which increased $1.2 million from $4.3 million at September 30, 2010. The level of allowance for loan losses to total loans receivable increased to 1.75% at September 30, 2011 as compared to 1.43% at September 30, 2010.
  • Net charge-offs increased to $90,000 for the quarter ended September 30, 2011 from $39,000 for the quarter ended September 30, 2010, an increase of $51,000.
  • Nonperforming assets increased to $7.5 million at September 30, 2011 from $5.2 million at September 30, 2010, an increase of $2.3 million. This growth has been the result of adverse changes within the economy and increases in local unemployment compounded by the extended length of time required to complete the foreclosure process in New York State.
  • Noninterest income increased $114,000 or 10.4% to $1.2 million for the quarter ended September 30, 2011 as compared to $1.1 million for the quarter ended September 30, 2010, primarily due to an increase in service charges on deposit accounts and debit card fees resulting from continued growth in the number of deposits accounts.
  • Noninterest expense increased $130,000 or 3.7% when comparing the quarters ended September 30, 2011 and 2010 at $3.6 million and $3.5 million, respectively. This increase was primarily the result of higher compensation costs of $90,000, higher costs associated with debit cards of $80,000, as well as the recognition of losses on the sale of foreclosed real estate in the amount of $50,000, which were partially offset by lower FDIC insurance premiums of $53,000. The decrease in FDIC insurance premiums was the result of regulatory changes in the method of calculating the premiums.
  • Total assets grew $8.9 million or 1.6% to $556.4 million at September 30, 2011 as compared to $547.5 million at June 30, 2011.
  • Securities available for sale and securities held to maturity amounted to $202.8 million, or 36.4% of assets, at September 30, 2011 as compared to $214.3 million, or 39.1% of assets at June 30, 2011, a decrease of $11.5 million or 5.4%
  • Net loans grew by $6.0 million or 2.0% to $307.0 million at September 30, 2011 as compared to $301.0 million at June 30, 2011. The increase in loans was primarily in nonresidential real estate and commercial installment loans, which generally carry higher yields than residential real estate loans.
  • Deposits increased to $492.0 million at September 30, 2011 from $469.9 million at June 30, 2011, an increase of $22.1 million, or 4.7%. This increase was primarily the result of an increase of $18.8 million in balances at the Company’s Commercial Bank subsidiary due primarily to the annual collection of taxes by several local school districts.
  • As a result of the increase in deposits, the Company repaid its overnight borrowings with the Federal Home Loan Bank. Borrowings decreased $14.3 million from $26.3 million at June 30, 2011 to $12.0 million at September 30, 2011.
  • Total shareholders’ equity amounted to $49.5 million at September 30, 2011, or 8.9% 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

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 2011   2010
Interest income $6,205   $5,976
Interest expense 1,006 1,179
Net interest income 5,199 4,797
Provision for loan losses 474 353
Noninterest income 1,214 1,100
Noninterest expense 3,658 3,528
Income before taxes 2,281 2,016
Tax provision 772 692
Net income $1,509 $1,324
Basic EPS $0.36 $0.32
Weighted average shares outstanding 4,145,828 4,121,299
Diluted EPS $0.36 $0.32
Weighted average diluted shares outstanding 4,190,151 4,152,082
Dividends declared per share 2 $0.175 $0.175

Selected Financial Ratios

Return on average assets 1.10% 1.07%
Return on average equity 12.41% 11.70%
Net interest rate spread 3.83% 3.87%
Net interest margin 3.96% 4.04%
Efficiency ratio 1 57.04% 59.83%
Non-performing assets to total assets 1.35% 0.98%
Non-performing loans to total loans 2.37% 1.67%
Allowance for loan losses to non-performing loans 75.05% 86.99%
Allowance for loan losses to total loans 1.75% 1.43%
Shareholders’ equity to total assets 8.90% 8.68%
Dividend payout ratio 2 48.61% 54.47%
Book value per share $11.94 $11.14

1 Noninterest expense divided by the sum of net interest income and noninterest income.

2 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.


As of September 30, 2011

  As of June 30, 2011
Dollars In thousands  
Total cash and cash equivalents $25,177 $9,966
Securities- available for sale, at fair value 80,673 90,117
Securities- held to maturity, at amortized cost 122,085 124,177
Federal Home Loan Bank stock, at cost 1,273 1,916
Gross loans receivable 312,024 305,620
Less: Allowance for loan losses (5,453) (5,069)
Unearned origination fees and costs, net 399   495
Net loans receivable 306,970 301,046
Premises and equipment 15,244 15,407
Accrued interest receivable 2,740 2,716
Foreclosed real estate 243 443
Prepaid expenses and other assets 1,980   1,737
Total assets $556,385   $547,525
Liabilities and shareholders’ equity
Noninterest bearing deposits $50,740 $49,313
Interest bearing deposits 441,254   420,584
Total deposits 491,994 469,897
Borrowings from FHLB, short term --- 14,300
FHLB borrowings, long term 12,000 12,000
Accrued expenses and other liabilities 2,882   3,247
Total liabilities 506,876 499,444
Total shareholders’ equity 49,509   48,081
Total liabilities and shareholders’ equity $556,385   $547,525
Common shares outstanding 4,145,828 4,145,828
Treasury shares 159,842 159,842

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