Greene County Bancorp, Inc. - Reports Record Earnings for Fiscal Year Ended June 30, 2013

  Greene County Bancorp, Inc. - Reports Record Earnings for Fiscal Year Ended
  June 30, 2013

Business Wire

CATSKILL, N.Y. -- July 24, 2013

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 fiscal year and quarter
ended June 30, 2013. For the year ended June 30, 2013, net income totaled $6.4
million, or $1.52 per basic and $1.51 per diluted share, representing an
increase of $541,000, or 9.3%, as compared to net income of $5.8 million, or
$1.40 per basic and $1.39 per diluted share, for the year ended June 30, 2012.
For the quarter ended June 30, 2013, net income totaled $1.4 million, or $0.33
per basic and diluted share, representing an increase of $58,000, or 4.3%, as
compared to $1.3 million, or $0.32 per basic and diluted share, for the
quarter ended June 30, 2012.

Donald E. Gibson, President & CEO stated: “I am pleased to report continued
solid and consistent performance. For the fifth consecutive fiscal year we
have achieved record earnings. In addition, for the fourth consecutive year,
American Banker magazine (formerly USBanker) ranked us among the Top 200
Community Banks with less than $2 billion in assets (at December 31, 2012) by
average return on equity for the three years ended December 31, 2010, 2011 and
2012.”

Selected highlights for the year and quarter ended June 30, 2013 are as
follows:

  *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.

Headquartered in Catskill, New York, the Company provides full-service
community-based banking in its twelve branch offices located in the Hudson
Valley Region. Customers are offered 24-hour services through ATM network
systems, an automated telephone banking system and Mobile & 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          At or for the Three
                                 Year Ended June 30,     Months Ended June 30,
                                 2013       2012       2013       2012
Dollars In thousands,
                                                                  
except share and per share
data
Interest income                  $24,060     $24,341     $5,837      $5,979
Interest expense                 2,817       3,583       660         805
Net interest income              21,243      20,758      5,177       5,174
Provision for loan losses        1,746       1,784       430         347
Noninterest income               4,995       4,850       1,279       1,251
Noninterest expense              15,449      15,314      4,084       4,167
Income before taxes              9,043       8,510       1,942       1,911
Tax provision                    2,672       2,680       541         568
Net Income                       $6,371      $5,830      $1,401      $1,343
                                                                     
Basic EPS                        $1.52       $1.40       $0.33       $0.32
Weighted average
                                 4,187,340   4,156,481   4,192,254   4,173,109
shares outstanding
                                                                     
Diluted EPS                      $1.51       $1.39       $0.33       $0.32
Weighted average
                                 4,225,963   4,197,060   4,229,369   4,210,135
diluted shares outstanding
                                                                     
Dividends declared per share     $0.70       $0.70       $0.175      $0.175
^1
                                                                     
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
                                 1.13%       1.23%
to total assets
Non-performing loans
                                 1.92%       2.15%
to net loans
Allowance for loan losses to
                                 102.25%     88.03%
non-performing loans
Allowance for loan losses to
                                 1.92%       1.86%
total loans
Shareholders’ equity to total    8.86%       8.92%
assets
Dividend payout ratio^3          46.05%      50.00%
Book value per share             $13.38      $12.59

^1 Greene County Bancorp, MHC (the “MHC”), the owner of 55.0% of the shares
outstanding by the Company, waived its right to receive the dividends during
the year ended June 30, 2012, and no adjustment has been made to account for
this waiver. The MHC waived its right to receive the dividend declared during
the quarters ended March 31, 2013 and June 30, 2013, and no adjustment has
been made to account for this waiver. However, the MHC was not permitted to
waive its receipt of dividends declared during the quarters ended September
30, 2012 and December 31, 2012 because it did not yet have the non-objection
from the Federal Reserve Board for such waiver.

^2 Ratios are annualized when necessary.

^3 Noninterest expense divided by the sum of net interest income and
noninterest income.

                                  As of June 30, 2013   As of June 30, 2012
Dollars In thousands                                    
Assets
Total cash and cash equivalents    $6,222                  $7,742
Long term certificate of deposit   250                     ---
Securities- available for sale,    69,644                  87,528
at fair value
Securities- held to maturity, at   176,519                 146,389
amortized cost
Federal Home Loan Bank stock, at   1,388                   1,744
cost
                                                           
Gross loans receivable             365,839                 332,450
Less: Allowance for loan losses    (7,040)                 (6,177)
Unearned origination fees and      627                   478
costs, net
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         2,848                 2,655
assets
Total assets                       $633,605              $590,656
                                                           
Liabilities and shareholders’
equity
Noninterest bearing deposits       $57,926                 $52,783
Interest bearing deposits          500,513               459,154
Total deposits                     558,439                 511,937
                                                           
Borrowings from FHLB, short term   10,600                  14,000
Borrowings from FHLB, long term    4,000                   7,000
Accrued expenses and other         4,458                 5,055
liabilities
Total liabilities                  577,497                 537,992
Total shareholders’ equity         56,108                52,664
Total liabilities and              $633,605              $590,656
shareholders’ equity
Common shares outstanding          4,192,654               4,182,671
Treasury shares                    113,016                 122,999

Contact:

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