CATSKILL, N.Y., April 22, 2016 (GLOBE NEWSWIRE) -- 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 nine and three months ended March 31, 2016, which is the third quarter of the Company’s fiscal year ending June 30, 2016. Net income for the nine and three months ended March 31, 2016 was $6.6 million, or $0.78 per basic and diluted share, and $2.2 million, or $0.26 per basic and $0.25 per diluted share, respectively, as compared to $5.4 million, or $0.64 per basic and $0.63 per diluted share, and $1.8 million, or $0.21 per basic and diluted share, for the nine and three months ended March 31, 2015, respectively. Earnings per share have been restated for prior periods as a result of a 2-for-1 stock split which was paid on March 15, 2016 as if the new shares had been issued and outstanding at the same time as the original shares. Net income increased $1.2 million, or 22.2%, when comparing the nine months ended March 31, 2016 and 2015, and increased $377,000, or 21.1%, when comparing the three months ended March 31, 2016 and 2015.
Donald Gibson, President & CEO stated: “I am pleased to report another very solid quarter. Highlighting the quarter was our Company’s balance sheet growth, reaching several new milestones. For the first time in our Company’s history we surpassed $850 million in assets, $500 million in gross loans, and $750 million in total deposits.”
On April 11, 2016, for the fifth consecutive year, Greene County Bancorp, Inc. was recognized by investment banking firm KBW for our exceptional 10-year track record. This year only 18 U.S. banking institutions made the honor roll. To be eligible for the KBW Bank Honor Roll, banks must be publicly traded institutions with more than $500 million in assets, and meet the following conditions (excluding extraordinary items):
1) No annual loss in net income per share reported over the past 10 years;
2) 2015 annual net income per share equal to or greater than the peak net income per share reported over the past 10 years; and
3) Consecutive increases in net income per share since 2009.
Selected highlights for the nine and three months ended March 31, 2016 are as follows:
Net Interest Income and Margin
- Net interest income increased $2.0 million to $19.4 million for the nine months ended March 31, 2016 from $17.4 million for the nine months ended March 31, 2015. Net interest income increased $723,000 to $6.6 million for the three months ended March 31, 2016 from $5.9 million for the three months ended March 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 and margin decreased 3 basis points to 3.33% and 3.40%, respectively, for the nine months ended March 31, 2016 compared to 3.36% and 3.43%, respectively, for the nine months ended March 31, 2015. Net interest spread and margin decreased 8 basis points to 3.24% and 3.31%, respectively, for the three months ended March 31, 2016 compared to 3.32% and 3.39%, respectively, for the three months ended March 31, 2015. The decrease in spread and margin is due to a change in the mix of interest-earning assets, with growth in tax-exempt securities, as well as the promotion of lower rate mortgage loans (both residential and commercial) with a term of 10 to 15 years.
- 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 3.65% and 3.56% for the nine and three months ended March 31, 2016 compared to 3.65% and 3.61% for the nine and three months ended March 31, 2015.
Asset Quality and Loan Loss Provision
- The provision for loan losses amounted to $1.1 million for the nine months ended March 31, 2016 and 2015. The provision for loan losses amounted to $421,000 and $416,000 for the three months ended March 31, 2016 and 2015, respectively. Allowance for loan losses to total loans receivable decreased to 1.79% as of March 31, 2016 as compared to 1.81% as of June 30, 2015.
- Net charge-offs amounted to $292,000 and $727,000 for the nine months ended March 31, 2016 and 2015, respectively, and amounted to $44,000 and $388,000 for the three months ended March 31, 2016 and 2015, respectively. Net charge-offs have declined as a result of continued improvement in the level of nonperforming loans.
- Nonperforming loans amounted to $3.7 million and $4.7 million at March 31, 2016 and June 30, 2015, respectively. At March 31, 2016, nonperforming assets were 0.48% of total assets and nonperforming loans were 0.76% of net loans.
Noninterest Income and Noninterest Expense
- Noninterest income increased $226,000, or 5.4%, to $4.4 million for the nine months ended March 31, 2016 as compared to $4.2 million for the nine months ended March 31, 2015. Noninterest income increased $111,000, or 8.9%, to $1.4 million for the three months ended March 31, 2016 as compared to $1.3 million for the three months ended March 31, 2015. These increases were 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, as well as an increase in other operating income which was primarily the result of income generated by Greene Risk Management, Inc., a captive insurance subsidiary established on December 28, 2014.
- Noninterest expense increased $768,000, or 5.8%, to $14.0 million for the nine months ended March 31, 2016 as compared to $13.2 million for the nine months ended March 31, 2015. Noninterest expense increased $294,000, or 6.6%, to $4.7 million for the three months ended March 31, 2016 as compared to $4.5 million for the three months ended March 31, 2015. Salaries and employee benefits expenses increased $478,000 and $297,000 when comparing the nine and three months ended March 31, 2016 and 2015, respectively, primarily due to the opening of a new branch in Kingston during the third quarter of fiscal 2015, as well as additional staffing within our lending department and customer service center. Service and data processing fees also increased $145,000 and $69,000 when comparing the nine and three months ended March 31, 2016 and 2015, respectively, as a result of an upgrade to a new online banking platform during the second quarter of fiscal 2016. Legal and professional fees increased $6,000 and $61,000 when comparing the nine and three months ended March 31, 2016 and 2015, respectively, as a result of audit fees related to Greene Risk Management, Inc. which was formed in December 2014, as well as incurring other consulting fees. Partially offsetting these increases was a decrease in occupancy expense of $47,000 and $75,000 when comparing the nine and three months ended March 31, 2016 and 2015, respectively, which was primarily due to lower fuel prices and lower snow removal costs as a result of a mild winter season. Additionally, other noninterest expense increased $247,000 when comparing the nine months ended March 31, 2016 and 2015 due to an increase in other expenses which included costs related to foreclosed real estate (primarily real estate taxes) as well as write-downs of several of the properties within foreclosed real estate based on pending sales or a decrease in the list price. Other noninterest expense decreased $47,000 when comparing the three months ended March 31, 2016 and 2015 due to a decrease in other expenses related to foreclosed real estate costs.
Income Taxes
- The effective tax rate was 23.1% and 22.9% for the nine and three months ended March 31, 2016, compared to 25.5% and 21.4% for the nine and three months ended March 31, 2015. The effective tax rate has continued to decline as a result of increased income derived from tax-exempt bonds and loans as well as continued loan growth within the Company’s real estate investment trust subsidiary. Also contributing to the lower effective income tax rate is the tax benefits derived from the Company’s pooled captive insurance company, as premium income received by the pooled captive insurance company is exempt from income taxes. The premiums paid to the pooled captive insurance company by the Company and its banking subsidiaries are tax deductible.
Balance Sheet Summary
- Total assets of the Company were $851.4 million at March 31, 2016 as compared to $738.6 million at June 30, 2015, an increase of $112.8 million, or 15.3%.
- Securities available-for-sale and held-to-maturity amounted to $294.8 million, or 34.6% of assets, at March 31, 2016 as compared to $255.0 million, or 34.5% of assets, at June 30, 2015, an increase of $39.8 million, or 15.6%.
- Net loans receivable increased $49.6 million, or 11.2%, to $493.1 million at March 31, 2016 from $443.5 million at June 30, 2015. The loan growth experienced during the nine months consisted primarily of $33.9 million in commercial real estate loans, $5.7 million in residential real estate loans, $4.9 million in construction loans, and $6.2 million in commercial loans.
- Total deposits increased $127.6 million, or 20.5%, to $750.3 million at March 31, 2016 from $622.7 million at June 30, 2015. This increase was the result of growth in new account relationships primarily from our newest branch location in Kingston and within our commercial bank subsidiary, Greene County Commercial Bank, as well as tax collection receipts deposited by our existing municipal depositors.
- The Company had $20.3 million of long-term borrowings, with the Federal Home Loan Bank at March 31, 2016 compared to $22.9 million of short-term borrowings and $18.8 million of long-term borrowings at June 30, 2015.
- Total shareholders’ equity increased $6.1 million to $73.0 million, or 8.6% of total assets, at March 31, 2016, from total equity of $66.9 million, or 9.1% of total assets, at June 30, 2015.
Greene County Bancorp, Inc. is the direct and indirect holding company, respectively, of The Bank of Greene County, a federally chartered savings bank, and Greene County Commercial Bank, a New York-chartered commercial bank, headquartered in Catskill, New York. Our primary market area is the Hudson Valley in New York State. For more information on Greene County Bancorp, Inc., visit www.tbogc.com.
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. 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 Quarterly Information."
Greene County Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
Dollars in thousands, except per share data
| At or for the Nine | At or for the Three | |||||||||||
| Months Ended March 31, | Months Ended March 31, | |||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||
| Interest income | $ | 21,262 | $ | 19,115 | $ | 7,263 | $ | 6,467 | ||||
| Interest expense | 1,892 | 1,704 | 652 | 579 | ||||||||
| Net interest income | 19,370 | 17,411 | 6,611 | 5,888 | ||||||||
| Provision for loan losses | 1,138 | 1,132 | 421 | 416 | ||||||||
| Noninterest income | 4,386 | 4,160 | 1,362 | 1,251 | ||||||||
| Noninterest expense | 13,995 | 13,227 | 4,748 | 4,454 | ||||||||
| Income before taxes | 8,623 | 7,212 | 2,804 | 2,269 | ||||||||
| Tax provision | 1,992 | 1,842 | 643 | 485 | ||||||||
| Net Income | $ | 6,631 | $ | 5,370 | $ | 2,161 | $ | 1,784 | ||||
| Basic EPS6 | $ | 0.78 | $ | 0.64 | $ | 0.26 | $ | 0.21 | ||||
| Weighted average shares outstanding6 | 8,454,147 | 8,434,894 | 8,464,392 | 8,441,880 | ||||||||
| Diluted EPS6 | $ | 0.78 | $ | 0.63 | $ | 0.25 | $ | 0.21 | ||||
| Weighted average diluted shares outstanding6 | 8,469,732 | 8,496,114 | 8,484,209 | 8,501,046 | ||||||||
| Dividends declared per share 6 | $ | 0.2775 | $ | 0.27 | $ | 0.0925 | $ | 0.09 | ||||
| Selected Financial Ratios | ||||||||||||
| Return on average assets1 | 1.14 | % | 1.03 | % | 1.05 | % | 1.00 | % | ||||
| Return on average equity1 | 12.68 | % | 11.27 | % | 12.03 | % | 10.97 | % | ||||
| Net interest rate spread1 | 3.33 | % | 3.36 | % | 3.24 | % | 3.32 | % | ||||
| Net interest margin1 | 3.40 | % | 3.43 | % | 3.31 | % | 3.39 | % | ||||
| Fully taxable-equivalent net interest margin2 | 3.65 | % | 3.65 | % | 3.56 | % | 3.61 | % | ||||
| Efficiency ratio3 | 58.91 | % | 61.32 | % | 59.55 | % | 62.39 | % | ||||
| Non-performing assets to total assets | 0.48 | % | 0.93 | % | ||||||||
| Non-performing loans to net loans | 0.76 | % | 1.34 | % | ||||||||
| Allowance for loan losses to non-performing loans | 239.94 | % | 134.04 | % | ||||||||
| Allowance for loan losses to total loans | 1.79 | % | 1.77 | % | ||||||||
| Shareholders’ equity to total assets | 8.57 | % | 8.97 | % | ||||||||
| Dividend payout ratio4 | 35.58 | % | 42.52 | % | ||||||||
| Actual dividends paid to net income5 | 16.15 | % | 27.06 | % | ||||||||
| Book value per share6 | $ | 8.61 | $ | 7.80 | ||||||||
1 Ratios are annualized when necessary.
2 Interest income calculated on a taxable-equivalent basis includes the additional 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. The rate used for this adjustment was approximately 34% for federal income taxes and 3.63% for New York State income taxes for all periods presented. The following table summarizes the adjustments made to arrive at the fully taxable-equivalent net interest margin.
| For the nine months ended March 31, | For the three months ended March 31, | |||||||||||
| (Dollars in thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||
| Net interest income (GAAP) | $ | 19,370 | $ | 17,411 | $ | 6,611 | $ | 5,888 | ||||
| Tax-equivalent adjustment | 1,398 | 1,120 | 494 | 388 | ||||||||
| Net interest income (fully taxable-equivalent basis) | $ | 20,768 | $ | 18,531 | $ | 7,105 | $ | 6,276 | ||||
| Average interest-earning assets | $ | 759,470 | $ | 677,781 | $ | 799,099 | $ | 694,937 | ||||
| Net interest margin (fully taxable-equivalent basis) | 3.65 | % | 3.65 | % | 3.56 | % | 3.61 | % | ||||
3 The efficiency ratio has been calculated as noninterest expense divided by the sum of net interest income and noninterest income.
4 The dividend payout ratio has been calculated based on the dividends declared per share divided by basic earnings per share. No adjustments have been made to account for dividends waived by Greene County Bancorp, MHC (“MHC”), the owner of 54.4% of the Company’s shares outstanding.
5 Dividends declared divided by net income. The MHC waived its right to receive dividends declared during the nine months ended March 31, 2016 and for the six months ended December, 31 2014. Dividends were paid to the MHC during the three months ended March 31, 2015.
6 On February 17, 2016, the Company announced that its Board of Directors has declared a two-for-one stock split on the Company’s common stock. The stock split was paid on March 15, 2016 to stockholders of record as of March 7, 2016. Shares and per share data have been restated in all periods presented as if the new shares had been issued and outstanding at the same time as the original shares.
Greene County Bancorp, Inc.
Consolidated Statements of Financial Condition (Unaudited)
Dollars in thousands
| At March 31, 2016 | At June 30, 2015 | |||||||
| Assets | ||||||||
| Total cash and cash equivalents | $ | 39,136 | $ | 15,538 | ||||
| Long term certificate of deposit | 2,210 | 1,230 | ||||||
| Securities- available for sale, at fair value | 103,246 | 86,034 | ||||||
| Securities- held to maturity, at amortized cost | 191,576 | 169,000 | ||||||
| Federal Home Loan Bank stock, at cost | 1,531 | 2,494 | ||||||
| Gross loans receivable | 501,182 | 450,755 | ||||||
| Less: Allowance for loan losses | (8,988 | ) | (8,142 | ) | ||||
| Unearned origination fees and costs, net | 937 | 883 | ||||||
| Net loans receivable | 493,131 | 443,496 | ||||||
| Premises and equipment | 14,225 | 14,515 | ||||||
| Accrued interest receivable | 3,649 | 3,026 | ||||||
| Foreclosed real estate | 370 | 847 | ||||||
| Prepaid expenses and other assets | 2,311 | 2,467 | ||||||
| Total assets | $ | 851,385 | $ | 738,647 | ||||
| Liabilities and shareholders’ equity | ||||||||
| Noninterest bearing deposits | $ | 84,688 | $ | 73,359 | ||||
| Interest bearing deposits | 665,621 | 549,358 | ||||||
| Total deposits | 750,309 | 622,717 | ||||||
| Borrowings from FHLB, short term | - | 22,900 | ||||||
| Borrowings from FHLB, long term | 20,300 | 18,800 | ||||||
| Accrued expenses and other liabilities | 7,791 | 7,310 | ||||||
| Total liabilities | 778,400 | 671,727 | ||||||
| Total shareholders’ equity | 72,985 | 66,920 | ||||||
| Total liabilities and shareholders’ equity | $ | 851,385 | $ | 738,647 | ||||
| Common shares outstanding1 | 8,474,414 | 8,444,714 | ||||||
| Treasury shares1 | 136,926 | 166,626 | ||||||
1 On February 17, 2016, the Company announced that its Board of Directors has declared a two-for-one stock split on the Company’s common stock. The stock split was paid on March 15, 2016 to stockholders of record as of March 7, 2016. Shares data has been restated in all periods presented as if the new shares had been issued and outstanding at the same time as the original shares.