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 fiscal year and quarter ended June 30, 2012.
Net income increased $539,000, or 10.2%, to $5.8 million, or $1.40 per basic and $1.39 per diluted share, for the year ended June 30, 2012, from net income of $5.3 million, or $1.28 per basic and $1.27 per diluted share, for the year ended June 30, 2011, and net income decreased $33,000, or 2.4%, to $1.3 million, or $0.32 per basic and diluted share, for the quarter ended June 30, 2012 from $1.4 million, or $0.33 per basic and diluted share, for the quarter ended June 30, 2011.
Donald E. Gibson, President & CEO stated: “I am very pleased to report for the fourth consecutive fiscal year we have achieved record earnings. In addition, all three of our primary lines of business - retail, commercial and municipal banking - achieved record asset levels.”
Selected highlights for the fiscal year and quarter ended June 30, 2012 are as follows:
- Net interest income increased $1.1 million to $20.8 million for the year ended June 30, 2012 from $19.7 million for the year ended June 30, 2011, and increased $73,000 to $5.2 million for the quarter ended June 30, 2012 from $5.1 million for the quarter ended June 30, 2011. The increase resulted primarily from an increase in the average balances of loans and securities, along with a decrease in rates paid on deposit accounts when comparing the periods.
- Net interest rate spread increased 2 basis points to 3.72% for the year ended June 30, 2012 from 3.70% for the year ended June 30, 2011, and decreased 11 basis points to 3.57% for the quarter ended June 30, 2012 from 3.68% for the quarter ended June 30, 2011. Net interest margin decreased 1 basis point to 3.84% for the year ended June 30, 2012 from 3.85% for the year ended June 30, 2011, and decreased 15 basis points to 3.67% for the quarter ended June 30, 2012 compared to 3.82% for the quarter ended June 30, 2011. Despite the positive effects on net interest income from increased volume and lower cost of funds, declines in the yields on interest-earning assets resulted in net interest spread and net interest margin being relatively flat when comparing the years ended June 30, 2012 and 2011 respectively, and has resulted in a decline in the net interest spread and net interest margin when comparing the quarters ended June 30, 2012 and 2011, respectively. Although the Company has benefited from re-pricing its interest-bearing liabilities in the continuing historically low interest rate environment, the Company’s average interest rates earned on loans and investments have similarly continued to re-price into lower yields.
- The provision for loan losses totaled $1.8 million and $1.6 million for the year ended June 30, 2012 and 2011, respectively, an increase of $156,000, or 9.6%. The provision for loan losses totaled $347,000 and $449,000 for the quarters ended June 30, 2012 and 2011, respectively. The allowance for loan losses totaled $6.2 million at June 30, 2012 compared to $5.1 million at June 30, 2011. The level of allowance for loan losses to total loans receivable increased to 1.86% at June 30, 2012 from 1.66% at June 30, 2011.
- Net charge-offs totaled $676,000 and $583,000 for the year ended June 30, 2012 and 2011, respectively, an increase of $93,000.
- Nonperforming loans increased by $723,000, or 11.5%, to $7.0 million at June 30, 2012 from $6.3 million at June 30, 2011. This growth has resulted from adverse changes in the economy and increases in local unemployment, which were compounded by the extended length of time required to complete foreclosures in New York State.
- Noninterest income increased $57,000 and $21,000 when comparing the years and quarters ended June 30, 2012 and 2011, respectively. Noninterest income totaled $4.9 million and $1.3 million for the year and quarter ended June 30, 2012, respectively. The Company recorded a net gain on sale of investments during the year ended June 30, 2012 of $11,000, as compared to a net gain on sale of investments during the year ended June 30, 2011 of $233,000. Additionally, the Company recognized a write-down of an other-than-temporary impairment of securities of $25,000 during the year and quarter ended June 30, 2012, as compared to a write-down of $2,000 during the year and quarter ended June 30, 2011. Excluding these items, noninterest income increased $302,000 and $44,000 when comparing the years and quarters ended June 30, 2012 and 2011, respectively. These increases resulted primarily from higher service charges on deposit accounts and higher debit card fees due to growth in the number of deposit accounts.
- Noninterest expense increased $459,000 and $373,000 when comparing the years and quarters ended June 30, 2012 and 2011, respectively. These increases resulted primarily from expenses recognized on the defined benefit pension plan of $178,000 and the payment of a prepayment penalty on a term borrowing with the FHLB of $135,000 during the year and quarter ended June 30, 2012. Also contributing to the increased expenses was an increase in equipment and furniture expenses, service and data processing fees, and computer software, supplies and support expenses. These increases were partially offset by decreases in FDIC insurance premiums of $247,000 and $10,000 when comparing the years and quarters ended June 30, 2012 and 2011, respectively. The decrease in FDIC insurance premiums was the result of regulatory changes in the method of calculating the premiums.
- Total assets of the Company were $590.7 million at June 30, 2012 compared to $547.5 million at June 30, 2011, an increase of $43.2 million, or 7.9%.
- Securities available for sale and held to maturity totaled $233.9 million, or 39.6% of assets, at June 30, 2012, as compared to $214.3 million, or 39.1% of assets, at June 30, 2011, an increase of $19.6 million. The growth in the securities portfolio reflects the success of the Company in attracting core deposits in excess of the growth rate of loans.
- Net loans grew by $25.7 million, or 8.5%, to $326.7 million at June 30, 2012 compared to $301.0 million at June 30, 2011. Real estate loans increased $26.6 million, or 10.3%, between June 30, 2012 and 2011, with an $11.8 million increase in residential mortgage loans and a $16.9 million increase in nonresidential real estate loans, which was partially offset by a $1.5 million decrease in construction and land loans and a $526,000 decrease in multifamily loans. Commercial installment loans increased $2.9 million which was offset by a $2.8 million decrease in home equity loans.
- Total deposits increased to $511.9 million at June 30, 2012 from $469.9 million at June 30, 2011, an increase of $42.0 million, or 8.9%. This growth is attributable an increase in core deposits in both retail and commercial deposits at The Bank of Greene County primarily in our newer market areas, as well as continued growth in core deposits at Greene County Commercial Bank.
- Long-term borrowings with the Federal Home Loan Bank decreased $5.0 million to $7.0 million at June 30, 2012 as a result of the maturity of $3.0 million and the prepayment of $2.0 million of this debt during the year ended June 30, 2012. Overnight borrowings with the Federal Home Loan Bank were $14.0 million at June 30, 2012 compared to $14.3 million at June 30, 2011.
- Total shareholders’ equity was $52.7 million at June 30, 2012, or 8.9% of total assets, an increase of $4.6 million from total equity of $48.0 million at June 30, 2011.
|At or for the Year||At or for the Three|
|Ended June 30,||Months Ended June 30,|
| Dollars In thousands,
except share and per share data
|Net interest income||20,758||19,713||5,174||5,101|
|Provision for loan losses||1,784||1,628||347||449|
|Income before taxes||8,510||8,023||1,911||2,088|
| Weighted average
| Weighted average
diluted shares outstanding
|Dividends declared per share 2||$0.700||$0.900||$0.175||$0.175|
Selected Financial Ratios
|Return on average assets||1.04%||0.99%||0.92%||0.99%|
|Return on average equity||11.55%||11.45%||10.27%||11.60%|
|Net interest rate spread||3.72%||3.70%||3.57%||3.68%|
|Net interest margin||3.84%||3.85%||3.67%||3.82%|
|Efficiency ratio 1||59.80%||60.62%||64.86%||59.93%|
| Non-performing assets
to total assets
| Non-performing loans
to net loans
| Allowance for loan losses to
| Allowance for loan losses to
|Shareholders’ equity to total assets||8.92%||8.78%|
|Dividend payout ratio 2||50.00%||70.31%|
|Book value per share||$12.59||$11.60|
1 Noninterest expense divided by the sum of net interest income and noninterest income.
2 Greene County Bancorp, MHC, the owner of 55.1% of the shares outstanding 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 year ended June 30, 2011 include a special dividend of $0.20 per share paid on December 15, 2010.
|As of June 30, 2012||As of June 30, 2011|
|Dollars In thousands|
|Total cash and cash equivalents||$7,742||$9,966|
|Securities- available for sale, at fair value||87,528||90,117|
|Securities- held to maturity, at amortized cost||146,389||124,177|
|Federal Home Loan Bank stock, at cost||1,744||1,916|
|Gross loans receivable||332,450||305,620|
|Less: Allowance for loan losses||(6,177||)||(5,069||)|
|Unearned origination fees and costs, net||478||495|
|Net loans receivable||326,751||301,046|
|Premises and equipment||14,899||15,407|
|Accrued interest receivable||2,688||2,716|
|Foreclosed real estate||260||443|
|Prepaid expenses and other assets||2,655||1,737|
|Liabilities and shareholders’ equity|
|Noninterest bearing deposits||$52,783||$49,313|
|Interest bearing deposits||459,154||420,584|
|Borrowings from FHLB, short term||14,000||14,300|
|FHLB borrowings, long term||7,000||12,000|
|Accrued expenses and other liabilities||5,055||3,247|
|Total shareholders’ equity||52,664||48,081|
|Total liabilities and shareholders’ equity||$590,656||$547,525|
|Common shares outstanding||4,182,671||4,145,828|
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