Greene County Bancorp, Inc. Reports Record Earnings for Quarter Ended September 30, 2012

  Greene County Bancorp, Inc. Reports Record Earnings for Quarter Ended
  September 30, 2012

Business Wire

CATSKILL, N.Y. -- October 24, 2012

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 quarter ended September 30,
2012, which is the first quarter of the Company’s fiscal year ending June 30,
2013.

Net income increased $255,000, or 16.9%, to $1.8 million, or $0.42 per basic
and diluted share, for the quarter ended September 30, 2012, from net income
of $1.5 million, or $0.36 per basic and diluted share, for the quarter ended
September 30, 2011.

Donald E. Gibson, President & CEO stated: “I am pleased to report record
quarterly earnings for the period ending on September 30, 2012. The strong
results reflect the benefits in our strategy of making long term investments
in people, upgraded facilities, new products and technology, all of which have
made us more efficient.”

Selected highlights for the quarter ended September 30, 2012 are as follows:

  *Net interest income increased $193,000 to $5.4 million for the quarter
    ended September 30, 2012 from $5.2 million for the quarter ended September
    30, 2011. The increase in average loan balances, partially offset by the
    narrowing of the net interest spread and margin, led to an increase in net
    interest income when compared to the quarters ended September 30, 2012 and
    2011.
  *Net interest spread decreased 13 basis points to 3.70% for the quarter
    ended September 30, 2012 from 3.83% for the quarter ended September 30,
    2011. Net interest margin decreased 16 basis points to 3.80% for the
    quarter ended September 30, 2012, compared to 3.96% for the quarter ended
    September 30, 2011. Despite the positive effects on net interest income
    from increased volume and a lower cost of funds, declines in the yields on
    interest-earning assets resulted in our net interest spread and net
    interest margin narrowing when comparing the quarters ended September 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 average interest rates earned on our
    loans and investments have similarly continued to re-price into lower
    yields.
  *The provision for loan losses totaled $444,000 and $474,000 for the
    quarters ended September 30, 2012 and 2011, respectively. The allowance
    for loan losses totaled $6.5 million at September 30, 2012 compared to
    $6.2 million at June 30, 2012, and $5.5 million at September 30, 2011. The
    level of the allowance for loan losses to total loans receivable increased
    to 1.91% at September 30, 2012 from 1.86% at June 30, 2012, and 1.75% at
    September 30, 2011.
  *Net charge-offs totaled $85,000 and $90,000 for the quarters ended
    September 30, 2012 and 2011, respectively, a decrease of $5,000.
  *Nonperforming loans decreased by $127,000, or 1.8%, to $6.9 million at
    September 30, 2012 from $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.
  *Noninterest income increased $65,000, or 5.4%, to $1.3 million for the
    quarter ended September 30, 2012 from $1.2 million for the quarter ended
    September 30, 2011, which was primarily due to an increase in service
    charges on deposits resulting from continued growth in the number of
    deposit accounts.
  *Noninterest expense was flat when comparing the quarters ended September
    30, 2012 and 2011 at $3.7 million for both periods. However, salaries and
    employee benefits increased $66,000, advertising increased $53,000, and
    service and data processing fees increased $26,000. These increases were
    offset by a $25,000 decrease in legal and professional fees, a $15,000
    decrease in FDIC insurance premiums, and a $92,000 decrease in other
    expenses. Included in the decreases in other expenses were a $54,000
    decrease in debit card expenses and a $41,000 decrease in net foreclosed
    real estate expenses.
  *Total assets of the Company were $600.9 million at September 30, 2012
    compared to $590.7 million at June 30, 2012, an increase of $10.2 million,
    or 1.7%.
  *Securities available for sale and held to maturity totaled $220.8 million,
    or 36.7% of assets, at September 30, 2012 as compared to $233.9 million,
    or 39.6% of assets, at June 30, 2012, a decrease of $13.1 million or 5.6%.
  *Net loans grew by $9.2 million, or 2.8%, to $336.0 million at September
    30, 2012 compared to $326.8 million at June 30, 2012. The loan growth
    experienced during the quarter primarily consisted of $2.4 million in
    nonresidential real estate loans, $4.5 million in residential mortgage
    loans, $561,000 in home equity loans, $1.3 million in construction loans,
    and $580,000 in consumer and commercial loans, and was partially offset by
    a $359,000 increase in the allowance for loan losses.
  *Total deposits increased $24.2 million, or 4.7% to $536.1 million at
    September 30, 2012 from $511.9 million at June 30, 2012. This increase was
    primarily the result of a $32.6 million increase in balances at the
    Company’s Commercial Bank subsidiary due primarily to the annual
    collection of taxes by several local school districts.
  *The Company had no overnight borrowings with the Federal Home Loan Bank at
    September 30, 2012 compared to $14.0 million of such borrowings at June
    30, 2012.
  *Total shareholders’ equity increased $1.2 million to $53.9 million, or
    9.0% of total assets, at September 30, 2012, from total equity of $52.7
    million, or 8.9% of total assets, at June 30, 2012.

Headquartered in Catskill, New York, the Company provides full-service
community-based banking through its twelve branch offices located in Greene,
Columbia and Albany Counties. Customers are offered 24-hour services through
ATM network systems, an automated telephone banking system and Internet
Banking through its web site at http://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.

                                       At or for the Quarter
                                         Ended September 30,
                                         2012       2011
In thousands,
                                                   
except share and per share data
Interest income                          $6,131      $6,205
Interest expense                         739         1,006
Net interest income                      5,392       5,199
Provision for loan losses                444         474
Noninterest income                       1,279       1,214
Noninterest expense                      3,673       3,658
Income before taxes                      2,554       2,281
Tax provision                            790         772
Net Income                               $1,764      $1,509
                                                     
Basic EPS                                $0.42       $0.36
Weighted average
                                         4,183,932   4,145,828
shares outstanding
                                                     
Diluted EPS                              $0.42       $0.36
Weighted average
                                         4,221,451   4,190,151
diluted shares outstanding
                                                     
Dividends declared per share ^2          $0.175      $0.175
                                                     
Selected Financial Ratios
Return on average assets                 1.20%       1.10%
Return on average equity                 13.28%      12.41%
Net interest rate spread                 3.70%       3.83%
Net interest margin                      3.80%       3.96%
Efficiency ratio^1                       55.06%      57.04%
Non-performing assets
                                         1.18%       1.35%
to total assets
Non-performing loans
                                         2.05%       2.37%
to net loans
Allowance for loan losses to
                                         94.86%      75.05%
non-performing loans
Allowance for loan losses to
                                         1.91%       1.75%
total loans
Shareholders’ equity to total assets     8.96%       8.90%
Dividend payout ratio^2                  41.67%      48.61%
Book value per share                     $12.87      $11.94

^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 during the quarter
ended September 30, 2011, no adjustment has been made to account for this
waiver. During the quarter ended September 30, 2012, Greene County Bancorp,
MHC (”MHC”) did not receive permission to waive dividends. The Federal Reserve
Bank has adopted interim final regulations that impose significant conditions
and restrictions on the ability of mutual holding companies to waive the
receipt of dividends from their subsidiaries the MHC did not obtain the
non-objection of the Federal Reserve Board to waive the receipt of its
dividends on the Company’s common stock.

                                            As of                As of
                                                             
                                            September 30, 2012   June 30, 2012
Dollars (In thousands)
Assets
Total cash and cash equivalents             $22,919              $7,742
Securities- available for sale, at fair     81,824               87,528
value
Securities- held to maturity, at            138,970              146,389
amortized cost
Federal Home Loan Bank stock, at cost       1,114                1,744
                                                                 
Gross loans receivable                      342,023              332,450
Less: Allowance for loan losses             (6,536)              (6,177)
Unearned origination fees and costs,        525                  478
net
Net loans receivable                        336,012              326,751
                                                                 
Premises and equipment                      14,750               14,899
Accrued interest receivable                 2,836                2,688
Foreclosed real estate                      200                  260
Prepaid expenses and other assets           2,307                2,655
Total assets                                $600,932             $590,656
                                                                 
Liabilities and shareholders’ equity
Noninterest bearing deposits                $48,993              $52,783
Interest bearing deposits                   487,150              459,154
Total deposits                              536,143              511,937
                                                                 
Borrowings from FHLB, short term            ---                  14,000
Borrowings from FHLB, long term             7,000                7,000
Accrued expenses and other liabilities      3,920                5,055
Total liabilities                           547,063              537,992
Total shareholders’ equity                  53,869               52,664
Total liabilities and shareholders’         $600,932             $590,656
equity
Common shares outstanding                   4,184,671            4,182,671
Treasury shares                             120,999              122,999

Contact:

Greene County Bancorp, Inc.
Donald E. Gibson, 518-943-2600
President & CEO
donaldg@tbogc.com
or
Michelle M. Plummer, CPA
EVP, COO & CFO
518-943-2600
michellep@tbogc.com
 
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