Net Interest Income and Margin
- Net interest income increased $1.2 million to $7.7 million for the three months ended December 31, 2016 from $6.5 million for the three months ended December 31, 2015. Net interest income increased $2.0 million to $14.8 million for the six months ended December 31, 2016 from $12.8 million for the six months ended December 31, 2015. These increases in net interest income were primarily the result of the growth in the average interest-earning asset balances.
- Net interest spread increased six basis points to 3.44% for the three months ended December 31, 2016 compared to 3.38% for the three months ended December 31, 2015. Net interest spread decreased three basis points to 3.35% for the six months ended December 31, 2016 compared to 3.38% for the six months ended December 31, 2015.
- Net interest margin increased five basis points to 3.50% for the three months ended December 31, 2016 compared to 3.45% for the three months ended December 31, 2015. Net interest margin decreased three basis points to 3.42% for the six months ended December 31, 2016 compared to 3.45% for the six months ended December 31, 2015.
- Net interest income on a taxable-equivalent basis includes the additional amount of interest income that would have been earned if the Company's investment in tax-exempt securities and loans had been subject to federal and New York State income taxes yielding the same after-tax income. Tax equivalent net interest margin was 3.75% and 3.70% for the three months ended December 31, 2016 and 2015, respectively. Tax equivalent net interest margin was 3.67% and 3.69% for the six months ended December 31, 2016 and 2015, respectively.
- Provision for loan losses amounted to $586,000 and $343,000 for the three months ended December 31, 2016 and 2015, respectively. The provision for loan losses amounted to $1.1 million and $717,000 for the six months ended December 31, 2016 and 2015, respectively. Allowance for loan losses to total loans receivable decreased to 1.73% as of December 31, 2016 as compared to 1.79% as of June 30, 2016.
- Net charge-offs amounted to $141,000 and $198,000 for the three months ended December 31, 2016 and 2015, respectively, and amounted to $193,000 and $248,000 for the six months ended December 31, 2016 and 2015, respectively.
- Nonperforming loans amounted to $3.8 million and $3.4 million at December 31, 2016 and June 30, 2016, respectively. At December 31, 2016, nonperforming assets were 0.45% of total assets and nonperforming loans were 0.65% of net loans.
- Noninterest income increased $81,000, or 5.3%, to $1.6 million for the three months ended December 31, 2016 as compared to $1.5 million for the three months ended December 31, 2015. Noninterest income increased $146,000, or 4.8%, to $3.2 million for the six months ended December 31, 2016 as compared to $3.0 million for the six months ended December 31, 2015. These increases are primarily due to increases in debit card fees and service charges on deposit accounts resulting from continued growth in the number of checking accounts with debit cards. These increases are partially offset by decreases in investment services commission income and check fee income which is included in other operating income.
- Noninterest expense increased $108,000, or 2.3%, to $4.8 million for the three months ended December 31, 2016 as compared to $4.7 million for the three months ended December 31, 2015. Noninterest expense increased $304,000, or 3.3%, to $9.5 million for the six months ended December 31, 2016 as compared to $9.2 million for the six months ended December 31, 2015. These increases in noninterest expense are primarily the result of an increase in salaries and employee benefits expenses, resulting from additional staffing within our lending department and customer service center, and increased computer software, supplies and support expense, resulting from changing the Company's online banking platform to a new vendor, providing greater functionality for customers. Partially offsetting the aforementioned increases were decreases in legal and professional fees and lower expenses related to foreclosed real estate included in other expenses.
- Provision for income taxes directly reflects the expected tax associated with the pre-tax income generated for the given year and certain regulatory requirements. The effective tax rate was 26.3% and 25.7% for the three and six months ended December 31, 2016, respectively compared to 23.1% and 23.2% for the three and six months ended December 31, 2015. The effective tax rate is impacted by the benefits derived from tax-exempt bond and loan income, the Company's real estate investment trust subsidiary income, as well as the tax benefits derived from premiums paid to the Company's pooled captive insurance subsidiary. Growth in taxable loan income has exceeded growth in income from these tax exempt sources, which has led to the increases in the effective tax rates for both the three and six months ended December 31, 2016.
- Total assets of the Company were $932.0 million at December 31, 2016 as compared to $868.8 million at June 30, 2016, an increase of $63.2 million, or 7.3%.
- Securities available-for-sale and held-to-maturity decreased $8.4 million, or 2.8%, to $296.7 million at December 31, 2016 as compared to $305.1 million at June 30, 2016. Securities purchases totaled $47.3 million during the six months ended December 31, 2016 and consisted of $45.3 million of state and political subdivision securities, and $2.0 million of U.S. government sponsored enterprises securities. Principal pay-downs and maturities during the six months amounted to $53.9 million, of which $11.0 million were mortgage-backed securities, $41.6 million were state and political subdivision securities, and $1.3 million were corporate debt securities.
- Net loans receivable increased $68.5 million, or 13.1%, to $591.3 million at December 31, 2016 from $522.8 million at June 30, 2016. The loan growth experienced during the six month period consisted primarily of $53.6 million in commercial real estate loans, $5.5 million in commercial construction loans, $7.5 million in commercial loans, and $3.4 million in residential real estate loans. Balances within all other loan categories were relatively flat when comparing December 31, 2016 and June 30, 2016.
- Total deposits increased to $775.1 million at December 31, 2016 from $738.9 million at June 30, 2016, an increase of $36.2 million, or 4.9%. Noninterest-bearing deposits increased $703,000, or 0.8%, NOW deposits increased $25.2 million, or 8.1%, money market deposits increased $3.0 million, or 2.7%, and savings deposits increased $8.3 million, or 4.7% when comparing December 31, 2016 and June 30, 2016. These increases were partially offset by a decrease in certificates of deposit of $1.0 million, or 2.0%, when comparing December 31, 2016 and June 30, 2016. These increases were the result of a $13.9 million increase in municipal deposits at Greene County Commercial Bank, primarily from continued growth in new account relationships as well as tax collection. Included within certificates of deposits at December 31, 2016 and June 30, 2016 were $10.0 million in brokered certificates of deposit.
- Borrowings for the Company amounted to $45.7 million of overnight and $22.5 million of long-term borrowings, with the Federal Home Loan Bank of New York at December 31, 2016, compared to $26.1 million of overnight borrowings and $20.3 million of term borrowings at June 30, 2016. The Company also had a $100,000 outstanding balance on its line of credit with Atlantic Community Bankers Bank at December 31, 2016. There was no balance outstanding on this line of credit at June 30, 2016.
- Shareholders' equity increased to $78.4 million at December 31, 2016 from $74.3 million at June 30, 2016, as net income of $5.4 million was partially offset by an $833,000 increase in other accumulated comprehensive loss and dividends declared and paid of $742,000. Other changes in equity, an increase of $220,000, were the result of options exercised with the Company's 2008 Stock Option Plan.
In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules. The Company has provided in this news release supplemental disclosures for the calculation of net interest margin utilizing a fully taxable-equivalent adjustment. Management believes that the non-GAAP financial measures disclosed by the Company from time to time are useful in evaluating the Company's performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Our non-GAAP financial measures may differ from similar measures presented by other companies. See the reconciliation of GAAP to non-GAAP measures in the section "Select Financial Ratios."Greene County Bancorp, Inc. Consolidated Statements of Income (Unaudited)
|At or for the Three||At or for the Six|
|Months Ended December 31,||Months Ended December 31,|
|Dollars in thousands, except share and per share data||2016||2015||2016||2015|
|Net interest income||7,731||6,510||14,818||12,759|
|Provision for loan losses||586||343||1,129||717|
|Income before taxes||3,969||3,018||7,308||5,819|
|Weighted average shares outstanding||8,491,929||8,451,848||8,487,554||8,449,080|
|Weighted average diluted shares outstanding||8,509,316||8,502,966||8,503,913||8,500,912|
|Dividends declared per share 4||$||0.095||$||0.0925||$||0.190||$||0.185|
|Selected Financial Ratios|
|Return on average assets 1||1.30||%||1.20||%||1.23||%||1.18||%|
|Return on average equity 1||15.15||%||13.32||%||14.25||%||13.01||%|
|Net interest rate spread 1||3.44||%||3.38||%||3.35||%||3.38||%|
|Net interest margin 1||3.50||%||3.45||%||3.42||%||3.45||%|
|Fully taxable-equivalent net interest margin 2||3.75||%||3.70||%||3.67||%||3.69||%|
|Efficiency ratio 3||51.25||%||58.20||%||53.07||%||58.56||%|
|Non-performing assets to total assets||0.45||%||0.50||%|
|Non-performing loans to net loans||0.65||%||0.77||%|
|Allowance for loan losses to non-performing loans||272.30||%||232.73||%|
|Allowance for loan losses to total loans||1.73||%||1.77||%|
|Shareholders' equity to total assets||8.41||%||8.88||%|
|Dividend payout ratio 4||29.69||%||34.91||%|
|Actual dividends paid to net income 5||13.66||%||16.00||%|
|Book value per share||$||9.22||$||8.37|
|Non-GAAP reconciliation - Fully taxable equivalent net interest margin|
|For the three months ended||For the six months ended|
|(Dollars in thousands)||12/31/2016||12/31/2015||12/31/2016||12/31/2015|
|Net interest income (GAAP)||$||7,731||$||6,510||$||14,818||$||12,759|
|Net interest income (fully taxable-equivalent basis)||$||8,268||$||6,981||$||15,875||$||13,663|
|Average interest-earning assets||$||882,482||$||754,770||$||865,510||$||739,869|
|Net interest margin (fully taxable-equivalent basis)||3.75||%||3.70||%||3.67||%||3.69||%|
|As ofDecember 31, 2016||As ofJune 30, 2016|
|(Dollars In thousands)|
|Total cash and cash equivalents||$||15,575||$||15,895|
|Long term certificate of deposit||2,145||2,210|
|Securities- available for sale, at fair value||85,710||100,123|
|Securities- held to maturity, at amortized cost||210,983||204,935|
|Federal Home Loan Bank stock, at cost||3,730||2,752|
|Gross loans receivable||600,882||531,290|
|Less: Allowance for loan losses||(10,421||)||(9,485||)|
|Unearned origination fees and costs, net||866||959|
|Net loans receivable||591,327||522,764|
|Premises and equipment||13,928||14,176|
|Accrued interest receivable||3,790||3,610|
|Foreclosed real estate||338||370|
|Prepaid expenses and other assets||4,455||1,946|
|Liabilities and shareholders' equity|
|Noninterest bearing deposits||$||88,957||$||88,254|
|Interest bearing deposits||686,108||650,633|
|Borrowings from FHLB, short term||45,700||26,100|
|Borrowings from other banks, short term||100||-|
|Borrowings from FHLB, long term||22,450||20,300|
|Accrued expenses and other liabilities||10,287||9,193|
|Total shareholders' equity||78,379||74,301|
|Total liabilities and shareholders' equity||$||931,981||$||868,781|
|Common shares outstanding||8,502,614||8,475,614|
For Further Information Contact:Donald E. GibsonPresident & CEO(518) firstname.lastname@example.orgMichelle M. Plummer, CPAEVP, COO & CFO(518) email@example.com