Net Interest Income and Margin
- Net interest income increased $1.1 million to $8.2 million for the quarter ended September 30, 2017 from $7.1 million for the quarter ended September 30, 2016. The growth in average loan and securities balances led to an increase in net interest income when comparing the quarters ended September 30, 2017 and 2016, and was complemented by an increase in net interest spread and net interest margin.
- Net interest rate spread increased one basis point to 3.27% as compared to 3.26% when comparing the quarters ended September 30, 2017 and 2016, respectively.
- Net interest margin increased one basis point to 3.35% for the quarter ended September 30, 2017 as compared to 3.34% for the quarter ended September 30, 2016.
- 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 3.62% and 3.59% for the quarters ended September 30, 2017 and 2016, respectively.
- Provision for loan losses amounted to $347,000 and $543,000 for the quarters ended September 30, 2017 and 2016, respectively. The level of provision was higher for the quarter ended September 30, 2016 as the result of stronger growth in commercial real estate and commercial loans as compared to the quarter ended September 30, 2017. Allowance for loan losses to total loans receivable were 1.71% at September 30, 2017, and 1.74% at June 30, 2017, and 1.79% at September 30, 2016.
- Net charge-offs amounted to $271,000 and $52,000 for the quarters ended September 30, 2017 and 2016, respectively, an increase of $219,000. This increase in charge-off activity was primarily within the commercial loan and residential real estate portfolios.
- Nonperforming loans amounted to $3.4 million and $3.6 million at September 30, 2017 and June 30, 2017, respectively. At September 30, 2017 and June 30, 2017, respectively, nonperforming assets to total assets were 0.40% and 0.45%, and nonperforming loans to net loans were 0.53% and 0.58%. At September 30, 2016, nonperforming assets to total assets were 0.51% and nonperforming loans to net loans were 0.78%.
- Noninterest income increased $191,000, or 12.3%, and totaled $1.7 million and $1.5 million for the quarters ended September 30, 2017 and 2016, primarily due to increases in service charges and debit card fees resulting from continued growth in the number of checking accounts with debit cards, and increases in loan fee income which is included in other operating income.
- Noninterest expense increased $139,000, or 2.9%, to $4.9 million for the quarter ended September 30, 2017 as compared to $4.8 million for the quarter ended September 30, 2016. This increase was primarily due to an increase in salaries and employee benefits expenses, resulting from additional staffing for a new branch scheduled to open in the second quarter of fiscal 2018. Staffing was also increased within our lending department and customer service center. The increase is also due to higher service and data processing fees resulting from costs associated with offering more services to customers through online banking. Partially offsetting the aforementioned increases were decreases in advertising and promotional fees, occupancy expense, FDIC insurance premiums, and other operating 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 25.7% for the quarter ended September 30, 2017, compared to 24.9% for the quarter ended September 30, 2016. 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.
- Total assets of the Company were $1.0 billion at September 30, 2017 as compared to $982.3 million at June 30, 2017, an increase of $55.4 million, or 5.6%.
- Securities available-for-sale and held-to-maturity increased $11.2 million, or 3.6%, to $326.5 million at September 30, 2017 as compared to $315.3 million at June 30, 2017. Securities purchases totaled $39.2 million during the quarter ended September 30, 2017 and consisted of $35.7 million of state and political subdivision securities and $3.5 million of mortgage-backed securities. Principal pay-downs and maturities during the quarter amounted to $28.1 million, of which $6.4 million were mortgage-backed securities, $500,000 were corporate debt securities, and $21.2 million were state and political subdivision securities.
- Net loans receivable increased $14.2 million, or 2.3%, to $638.4 million at September 30, 2017 from $624.2 million at June 30, 2017. The loan growth experienced during the quarter consisted primarily of $3.5 million in commercial real estate loans, $2.7 million in commercial construction loans, $5.1 million in commercial loans and $2.2 million in residential real estate loans.
- Total deposits increased to $917.6 million at September 30, 2017 from $859.5 million at June 30, 2017, an increase of $58.1 million, or 6.8%. Noninterest-bearing deposits increased $7.9 million, or 8.2%, NOW deposits increased $66.6 million, or 17.0%, and money market deposits increased $2.3 million, or 1.9%, when comparing September 30, 2017 and June 30, 2017. These increases were partially offset by decreases of savings deposits of $3.6 million, or 1.8%, and certificates of deposit of $15.2 million, or 28.2%, when comparing September 30, 2017 and June 30, 2017. These increases were the result of a $62.9 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 June 30, 2017 were $15.0 million in brokered certificates of deposit. These brokered certificates of deposit matured during the quarter ended September 30, 2017 and were not renewed.
- Borrowings for the Company amounted to $700,000 of line of credit advances and $20.2 million of term borrowings, with the Federal Home Loan Bank of New York at September 30, 2017, compared to $6.9 million of overnight borrowings and $22.7 million of term borrowings at June 30, 2017.
- Shareholders' equity increased to $86.9 million at September 30, 2017 from $83.5 million at June 30, 2017, as net income of $3.5 million and a $235,000 decrease in other accumulated comprehensive loss were partially offset by dividends declared and paid of $379,000. Other changes in equity, an increase of $6,000, were the result of options exercised with the Company's 2008 Stock Option Plan.
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.
|Greene County Bancorp, Inc.|
|Consolidated Statements of Income (Unaudited)|
|At or for the Quarter|
|Ended September 30,|
|(Dollars in thousands, except per share data)||2017||2016|
|Net interest income||8,170||7,087|
|Provision for loan losses||347||543|
|Income before taxes||4,670||3,339|
|Weighted average shares outstanding||8,502,734||8,483,179|
|Weighted average diluted shares outstanding||8,531,242||8,497,669|
|Dividends declared per share||$0.0975||$0.0950|
|Selected Financial Ratios|
|Return on average assets 1||1.40||%||1.16||%|
|Return on average equity 1||16.33||13.32|
|Net interest rate spread 1||3.27||3.26|
|Net interest margin 1||3.35||3.34|
|Fully taxable-equivalent net interest margin 2||3.62||3.59|
|Efficiency ratio 3||49.37||55.05|
|Non-performing assets to total assets||0.40||0.51|
|Non-performing loans to net loans||0.53||0.78|
|Allowance for loan losses to non-performing loans||328.54||232.11|
|Allowance for loan losses to total loans||1.71||1.79|
|Shareholders' equity to total assets||8.37||8.56|
|Dividend payout ratio 4||23.78||31.67|
|Actual dividends paid to net income 5||10.92||14.72|
|Book value per share||$10.21||$9.00|
|For the quarters ended September 30,|
|(Dollars in thousands)||2017||2016|
|Net interest income (GAAP)||$8,170||$7,087|
|Net interest income (fully taxable-equivalent basis)||$8,817||$7,607|
|Average interest-earning assets||$975,036||$848,536|
|Net interest margin (fully taxable-equivalent basis)||3.62%||3.59%|
|Greene County Bancorp, Inc.|
|Consolidated Statements of Financial Condition (Unaudited)|
|As ofSeptember 30, 2017||As ofJune 30, 2017|
|(Dollars In thousands, except share data)|
|Total cash and cash equivalents||$46,419||$16,277|
|Long term certificate of deposit||2,145||2,145|
|Securities- available for sale, at fair value||100,809||91,483|
|Securities- held to maturity, at amortized cost||225,694||223,830|
|Federal Home Loan Bank stock, at cost||1,575||2,131|
|Gross loans receivable||648,693||634,331|
|Less: Allowance for loan losses||(11,098||)||(11,022||)|
|Unearned origination fees and costs, net||851||878|
|Net loans receivable||638,446||624,187|
|Premises and equipment||13,559||13,615|
|Accrued interest receivable||4,374||4,033|
|Foreclosed real estate||752||799|
|Prepaid expenses and other assets||3,874||3,791|
|Liabilities and shareholders' equity|
|Noninterest bearing deposits||$103,819||$95,929|
|Interest bearing deposits||813,750||763,606|
|Borrowings from FHLB, short term||-||6,900|
|Borrowings from other banks, short term||700||-|
|Borrowings from FHLB, long term||20,150||22,650|
|Accrued expenses and other liabilities||12,373||9,685|
|Total shareholders' equity||86,855||83,521|
|Total liabilities and shareholders' equity||$1,037,647||$982,291|
|Common shares outstanding||8,503,614||8,502,614|
For Further Information Contact:Donald E. GibsonPresident & CEO(518) firstname.lastname@example.orgMichelle M. Plummer, CPAEVP, COO & CFO(518) email@example.com