- Net interest income increased $485,000 to $21.2 million for the year ended June 30, 2013 compared to $20.8 million for the year ended June 30, 2012, and was flat at $5.2 million for the quarters ended June 30, 2013 and 2012. The annual increase in net interest income was the result of growth in the average balances of interest earning assets complemented by a decrease in the average cost of our interest bearing deposits, which was partially offset by a decrease in the yield on interest earning assets. As interest rates remain low, the impact from a declining yield on interest earning assets is expected to continue to have a negative effect on net interest income as can be seen by the lack of growth when comparing the quarters ended June 30, 2013 and 2012, respectively.
- Net interest rate spread decreased 26 basis points to 3.46% for the year ended June 30, 2013 as compared to 3.72% for the year ended June 30, 2012. Net interest margin decreased 30 basis points to 3.54% for the year ended June 30, 2013 as compared to 3.84% for the year ended June 30, 2012. Net interest rate spread decreased 30 basis points to 3.27% for the quarter ended June 30, 2013 as compared to 3.57% for the quarter ended June 30, 2012. Net interest margin decreased 33 basis points to 3.34% for the quarter ended June 30, 2013 compared to 3.67% for the quarter ended June 30, 2012. Despite increased net interest income from increased volume of loans and securities and a lower cost of funds, declines in the yields on interest-earning assets resulted in our net interest spread and net interest margin decreasing when comparing the three months and year ended June 30, 2013 and 2012, respectively. Although the Company has benefited from re-pricing its interest-bearing liabilities in the continuing historically low interest rate environment, the average interest rates earned on our loans and investments have similarly continued to re-price into lower yields.
- The provision for loan losses amounted to $1.7 million and $1.8 million for the years ended June 30, 2013 and 2012, respectively. The provision for loan losses amounted to $430,000 and $347,000 for the quarters ended June 30, 2013 and 2012, respectively. The increase was a result of a higher level of net charge-offs when comparing the fiscal years ended June 30, 2013 and 2012. The level of allowance for loan losses to total loans receivable increased to 1.92% at June 30, 2013 compared to 1.86% at June 30, 2012.
- Net charge-offs amounted to $883,000 and $676,000 for the years ended June 30, 2013 and 2012, respectively, an increase of $207,000.
- Nonperforming loans amounted to $6.9 million at June 30, 2013 and $7.0 million at June 30, 2012. Nonperforming loans remain high compared to historical levels as a result of adverse changes in the economy and local unemployment, which have been compounded by the extended length of time required to complete foreclosures in New York State. At June 30, 2013, nonperforming assets were 1.13% of total assets and nonperforming loans were 1.92% of net loans.
- Noninterest income increased $145,000 and decreased $28,000 when comparing the years and quarters ended June 30, 2013 and 2012, respectively. Noninterest income amounted to $5.0 million and $1.3 million for the year and quarter ended June 30, 2013, respectively. The increase for the year ended June 30, 2013 was primarily the result of higher service charges on deposit accounts due to growth in the number of deposit accounts, as well as an increase in fees earned through investment services.
- Noninterest expense increased $135,000 and decreased $83,000 when comparing the years and quarters ended June 30, 2013 and 2012, respectively. The increase in noninterest expense was primarily the result of a $288,000 increase in medical expense related to the change to a self-funded health insurance plan, and was partially offset by decreases in occupancy, equipment and furniture expenses and legal and professional fees of $19,000, $84,000 and $104,000, respectively. The decreases in occupancy, equipment and furniture expenses are due to a decrease in depreciation expense resulting from assets becoming fully depreciated during the period. The decrease in legal and professional fees was primarily the result of lower costs associated with loans in the process of foreclosure. These same categories decreased when comparing the quarters ended June 30, 2013 and 2012, respectively. Also, during the years ended June 30, 2013, and 2012, respectively, the Company prepaid $6.0 million and $2.0 million in long term borrowings and recognized prepayment penalties of $155,000 and $135,000, respectively.
- Total assets of the Company were $633.6 million at June 30, 2013 as compared to $590.7 million at June 30, 2012, an increase of $42.9 million, or 7.3%.
- Securities available-for-sale and held-to-maturity increased $12.3 million, or 5.3%, to $246.2 million at June 30, 2013 as compared to $233.9 million at June 30, 2012.
- Net loans receivable increased to $359.4 million at June 30, 2013 from $326.8 million at June 30, 2012, an increase of $32.6 million, or 10.0%. The loan growth experienced during the year primarily consisted of $10.7 million in nonresidential real estate loans, $19.1 million in residential mortgage loans, $2.0 million in construction loans, and $4.0 million in non-mortgage loans, and was partially offset by a $2.4 million decrease in home equity loans and a $863,000 increase in the allowance for loan losses. We believe that the continued low interest rate environment and strong customer satisfaction from personal service continued to enhance loan growth.
- Total deposits increased to $558.4 million at June 30, 2013 from $511.9 million at June 30, 2012, an increase of $46.5 million, or 9.1%. This increase was primarily the result of an increase of $23.8 million in balances at Greene County Commercial Bank due primarily to the annual collection of taxes by several local municipalities.
- Total borrowings from the Federal Home Loan Bank (“FHLB”) decreased $6.4 million to $14.6 million at June 30, 2013 compared to $21.0 million at June 30, 2012. Borrowings from overnight advances decreased $3.4 million to $10.6 million at June 30, 2013 from $14.0 million at June 30, 2012. These short term advances were utilized to fund growth in interest-earning assets. Term borrowings decreased $3.0 million to $4.0 million at June 30, 2013 from $7.0 million at June 30, 2012 as a result of repayments at maturity of $1.0 million and prepayments of $6.0 million, partially offset by new advances of $4.0 million.
- Shareholders’ equity increased to $56.1 million at June 30, 2013 from $52.7 million at June 30, 2012, as net income of $6.4 million was partially offset by dividends declared and paid of $2.1 million, and a $923,000 decrease in accumulated other comprehensive income.
|At or for the||At or for the Three|
|Year Ended June 30,||Months Ended June 30,|
|Dollars In thousands, except share and per share data|
|Net interest income||21,243||20,758||5,177||5,174|
|Provision for loan losses||1,746||1,784||430||347|
|Income before taxes||9,043||8,510||1,942||1,911|
|Weighted average shares outstanding||4,187,340||4,156,481||4,192,254||4,173,109|
|Weighted average diluted shares outstanding||4,225,963||4,197,060||4,229,369||4,210,135|
|Dividends declared per share 1||$0.70||$0.70||$0.175||$0.175|
|Selected Financial Ratios|
|Return on average assets 2||1.03%||1.04%||0.88%||0.92%|
|Return on average equity 2||11.66%||11.55%||9.99%||10.27%|
|Net interest rate spread 2||3.46%||3.72%||3.27%||3.57%|
|Net interest margin 2||3.54%||3.84%||3.34%||3.67%|
|Efficiency ratio 3||58.88%||59.80%||63.26%||64.86%|
|Non-performing assets to total assets||1.13%||1.23%|
|Non-performing loans to net loans||1.92%||2.15%|
|Allowance for loan losses to non-performing loans||102.25%||88.03%|
|Allowance for loan losses to total loans||1.92%||1.86%|
|Shareholders’ equity to total assets||8.86%||8.92%|
|Dividend payout ratio 3||46.05%||50.00%|
|Book value per share||$13.38||$12.59|
|As of June 30, 2013||As of June 30, 2012|
|Dollars In thousands|
|Total cash and cash equivalents||$6,222||$7,742|
|Long term certificate of deposit||250||---|
|Securities- available for sale, at fair value||69,644||87,528|
|Securities- held to maturity, at amortized cost||176,519||146,389|
|Federal Home Loan Bank stock, at cost||1,388||1,744|
|Gross loans receivable||365,839||332,450|
|Less: Allowance for loan losses||(7,040)||(6,177)|
|Unearned origination fees and costs, net||627||478|
|Net loans receivable||359,426||326,751|
|Premises and equipment||14,349||14,899|
|Accrued interest receivable||2,663||2,688|
|Foreclosed real estate||296||260|
|Prepaid expenses and other assets||2,848||2,655|
|Liabilities and shareholders’ equity|
|Noninterest bearing deposits||$57,926||$52,783|
|Interest bearing deposits||500,513||459,154|
|Borrowings from FHLB, short term||10,600||14,000|
|Borrowings from FHLB, long term||4,000||7,000|
|Accrued expenses and other liabilities||4,458||5,055|
|Total shareholders’ equity||56,108||52,664|
|Total liabilities and shareholders’ equity||$633,605||$590,656|
|Common shares outstanding||4,192,654||4,182,671|