Greene County Bancorp, Inc. Reports Earnings for Quarter Ended September 30, 2013

  Greene County Bancorp, Inc. Reports Earnings for Quarter Ended September 30,
  2013

Business Wire

CATSKILL, N.Y. -- October 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 quarter ended September 30, 2013,
which is the first quarter of the Company’s fiscal year ending June 30, 2014.
Net income for each of the quarters ended September 30, 2013 and 2012 was $1.8
million. Earnings per share was $0.42 per basic and $0.41 per diluted share,
for the quarter ended September 30, 2013, and $0.42 per basic and diluted
share, for the quarter ended September 30, 2012.

Donald E. Gibson, President & CEO stated: “We are pleased that our financial
performance has remained strong. As expected, this economic environment with
historically low interest rates has caused margin compression both at our Bank
and industry wide. To help offset this economic environment we remain focused
on our long-term strategy of building local customer relationships. Our
experience has proven this strategy provides core deposit and loan growth,
which in turn provides the best option for building long-term value for both
our community and shareholders.”

Selected highlights for the quarter ended September 30, 2013 are as follows:

  *Net interest income decreased $144,000 to $5.2 million for the quarter
    ended September 30, 2013 from $5.4 million for the quarter ended September
    30, 2012. The narrowing of the net interest spread and margin, partially
    offset by an increase in average interest-earning assets, led to a
    decrease in net interest income when comparing the quarters ended
    September 30, 2013 and 2012.
  *Net interest spread decreased 38 basis points to 3.32% as compared to
    3.70% when comparing the quarters ended September 30, 2013 and 2012,
    respectively. Net interest margin decreased 41 basis points to 3.39% for
    the quarter ended September 30, 2013 as compared to 3.80% for the quarter
    ended September 30, 2012. 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, 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 $313,000 and $444,000 for the
    quarters ended September 30, 2013 and 2012, respectively. The level of
    allowance for loan losses to total loans receivable has decreased to 1.85%
    as of September 30, 2013 as compared to 1.92% as of June 30, 2013.
  *Net charge-offs amounted to $325,000 and $85,000 for the quarters ended
    September 30, 2013 and 2012, respectively, an increase of $240,000.
  *Nonperforming loans amounted to $8.0 million and $6.9 million at September
    30, 2013 and June 30, 2013, respectively. 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 $71,000, or 5.6%, to $1.4 million for the
    quarter ended September 30, 2013 as compared to $1.3 million for the
    quarter ended September 30, 2012, primarily due to an increase in debit
    card fees resulting from continued growth in the number of checking
    accounts with debit cards.
  *Noninterest expense increased $139,000 or 3.8%, when comparing the
    quarters ended September 30, 2013 and 2012 at $3.8 million and $3.7
    million, respectively. The increase was primarily due to an increase in
    salaries and employee benefits of $121,000 resulting from an increase in
    expenses recognized for the Company’s phantom stock option plan as well as
    other employee benefits.
  *Total assets of the Company were $650.5 million at September 30, 2013 as
    compared to $633.6 million at June 30, 2013, an increase of $16.9 million,
    or 2.7%.
  *Securities available for sale and held to maturity amounted to $240.0
    million, or 36.9% of assets, at September 30, 2013 as compared to $246.2
    million, or 38.9% of assets, at June 30, 2013, a decrease of $6.2 million,
    or 2.5%.
  *Net loans grew by $14.7 million, or 4.1%, to $374.1 million at September
    30, 2013 as compared to $359.4 million at June 30, 2013. The loan growth
    experienced during the quarter primarily consisted of $4.8 million in
    nonresidential real estate loans, $9.9 million in residential mortgage
    loans, $507,000 in home equity loans, and $642,000 in non-mortgage loans,
    and was partially offset by a $490,000 decrease in construction loans, and
    a $754,000 decrease in multi-family mortgage loans.
  *Total deposits increased to $580.5 million at September 30, 2013 from
    $558.4 million at June 30, 2013, an increase of $22.1 million, or 4.0%.
    This increase was primarily the result of an increase of $22.1 million in
    balances at the Greene County Commercial Bank due primarily to the annual
    collection of taxes by several local school districts.
  *The Company had $3.5 million of overnight borrowings, and $5.0 million of
    term borrowings, with the Federal Home Loan Bank at September 30, 2013
    compared to $10.6 million of overnight borrowings and $4.0 million of term
    borrowings at June 30, 2013.
  *Total shareholders’ equity increased $904,000 to $57.0 million, or 8.8% of
    total assets, at September 30, 2013, from total equity of $56.1 million,
    or 8.9% of total assets, at June 30, 2013.

Greene County Bancorp, Inc. is the direct and indirect holding company,
respectively, for 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 Region of 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.

                                                  At or for the Quarter
                                                   Ended September 30,
                                                   2013          2012
(In thousands, except share and per share data)                 
Interest income                                    $5,826          $6,131
Interest expense                                   578             739
Net interest income                                5,248           5,392
Provision for loan losses                          313             444
Noninterest income                                 1,350           1,279
Noninterest expense                                3,812           3,673
Income before taxes                                2,473           2,554
Tax provision                                      719             790
Net Income                                         $1,754          $1,764
                                                                   
Basic EPS                                          $0.42           $0.42
Weighted average shares outstanding                4,194,714       4,183,932
Diluted EPS                                        $0.41           $0.42
Weighted average diluted shares outstanding        4,234,845       4,221,451
Dividends declared per share ^2                    $0.175          $0.175
                                                                   
Selected Financial Ratios
Return on average assets                           1.10      %     1.20      %
Return on average equity                           12.43     %     13.28     %
Net interest rate spread                           3.32      %     3.70      %
Net interest margin                                3.39      %     3.80      %
Efficiency ratio^1                                 57.78     %     55.06     %
Non-performing assets to total assets              1.26      %     1.18      %
Non-performing loans to net loans                  2.13      %     2.05      %
Allowance for loan losses to non-performing        88.10     %     94.86     %
loans
Allowance for loan losses to total loans           1.85      %     1.91      %
Shareholders’ equity to total assets               8.76      %     8.96      %
Dividend payout ratio^2                            41.67     %     41.67     %
Book value per share                               $13.57          $12.87
                                                                             

^1 Noninterest expense divided by the sum of net interest income and
noninterest income.

^2 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 54.9% of the Company’s shares outstanding. The MHC
waived its right to receive dividends declared during the quarter ended
September 30, 2013, but did not waive its right to receive dividends declared
during the quarter ended September 30, 2012.


                                          As of                  As of
                                                             
                                          September 30, 2013     June 30, 2013
(Dollars In thousands)
Assets
Total cash and cash equivalents           $14,831                $6,222
Long term certificate of deposit          250                    250
Securities- available for sale, at fair   66,118                 69,644
value
Securities- held to maturity, at          173,848                176,519
amortized cost
Federal Home Loan Bank stock, at cost     1,113                  1,388
                                                                 
Gross loans receivable                    380,430                365,839
Less: Allowance for loan losses           (7,028        )        (7,040     )
Unearned origination fees and costs,      736                   627        
net
Net loans receivable                      374,138                359,426
                                                                 
Premises and equipment                    14,245                 14,349
Accrued interest receivable               2,870                  2,663
Foreclosed real estate                    196                    296
Prepaid expenses and other assets         2,857                 2,848      
Total assets                              $650,466              $633,605   
                                                                 
Liabilities and shareholders’ equity
Noninterest bearing deposits              $58,846                $57,926
Interest bearing deposits                 521,636               500,513    
Total deposits                            580,482                558,439
                                                                 
Borrowings from FHLB, short term          3,500                  10,600
Borrowings from FHLB, long term           5,000                  4,000
Accrued expenses and other liabilities    4,472                 4,458      
Total liabilities                         593,454                577,497
Total shareholders’ equity                57,012                56,108     
Total liabilities and shareholders’       $650,466              $633,605   
equity
Common shares outstanding                 4,199,904              4,192,654
Treasury shares                           105,766                113,016

Contact:

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