Greene County Bancorp, Inc. Reports Net Income for the Quarter Ended September 30, 2020 and Opens Full Service Branch on Wol...
October 23 2020 - 8:39AM
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
three months ended September 30, 2020, which is the first quarter
of the Company’s fiscal year ending June 30, 2021. Net
income for the three months ended September 30, 2020 and 2019 was
$4.9 million. Earnings per share were $0.57 per basic and diluted
share for the three months ended September 30, 2020 and 2019.
Donald Gibson, President & CEO stated; “I am
pleased to report another very solid quarter. Net income for the
quarter ended September 30, 2020 increased slightly even after the
Company increased its provision for loan loss by $750,000 as a
result of the COVID-19 pandemic. In addition to the solid
performance, we successfully opened a new branch office located at
103 Wolf Road in Albany County, NY. This newest branch location
provides our Bank direct access to the heart of the Capital
District Marketplace. We believe this access will provide us with a
great opportunity to increase the business in all three of our
primary business lines, retail, commercial and municipal.”
Total consolidated assets for the Company were
$1.8 billion at September 30, 2020, primarily consisting of $659.8
million of total securities available-for-sale and held-to-maturity
and $1.0 billion of net loans. Consolidated deposits totaled $1.6
billion at September 30, 2020, consisting of retail, business and
municipal banking relationships. With the opening of the newest
branch located at 103 Wolf Road, in Albany County, NY, The Bank of
Greene County operates 17 full-service banking offices, with
operations and lending centers located in the Capital District and
Hudson Valley Regions of New York State.
The novel strain of coronavirus (“COVID-19”)
continues to impact business throughout the country and in our
financial markets. With the continued uncertainty regarding the
duration of the pandemic and effectiveness of containment
strategies, the overall impact to the Company’s financial position
cannot be determined at this time. However, the Company continues
to maintain strong asset quality, capital and liquidity. Management
believes it is still well positioned to withstand the financial
impact from this health crisis and continues to stand by and work
hand in hand with local businesses to be stronger than ever.
Depending upon the duration of the COVID-19
pandemic and the adequacy of strategies put in place by local and
federal governments, borrowers may not have the ability to repay
their debt and may ultimately result in losses to the Company.
Management continues to closely monitor credit relationships,
particularly those on payment deferral or are currently adversely
classified. As discussed under Asset Quality and Loan Loss
Provision below, the Company has continued to increase its
allowance for loan losses during the three months ended September
30, 2020 and believes that total reserves are adequate.
Selected highlights for the three months ended
September 30, 2020 are as follows:
Net Interest Income and Margin
- Net interest
income increased $1.3 million to $11.8 million for the
three months ended September 30, 2020 from $10.5 million for the
three months ended September 30, 2019. The increase in net interest
income was primarily the result of the growth in the average
balance of interest-earnings assets, which increased $408.5 million
when comparing the three months ended September 30, 2020 and 2019,
offset by decreases in interest rates on interest-earning assets,
which decreased 77 basis points when comparing the three months
ended September 30, 2020 and 2019, respectively. Of the $408.5
million increase in average interest-earning assets, average loan
balances increased $225.3 million and the yield on loans decreased
72 basis points when comparing the three months ended September 30,
2020 and 2019. Average securities increased $201.0 million and the
yield on securities decreased 76 basis points when comparing the
three months ended September 30, 2020 and 2019. Included in
interest-earning assets at September 30, 2020, are $100.5 million
of SBA Paycheck Protection Program (PPP) loans at a rate of
1.00%. Cost of interest-bearing liabilities decreased
36 basis points when comparing the three months ended September 30,
2020 and 2019, respectively The decrease in cost of
interest-bearing liabilities was offset by growth in the average
balance of interest-bearing liabilities of $349.3 million, most
notably due to an increase in NOW deposits of $296.2 million, an
increase in average savings and money market deposits of $48.7
million, and an increase in borrowings of $6.2 million when
comparing the three months ended September 30, 2020 and 2019,
respectively. The interest rate on borrowings increased 98 basis
points when comparing the three months ended September 30, 2020 and
2019. The increase in interest rate on borrowings is due to the
Company entering into Subordinated Note Purchase Agreements
discussed within the borrowings section below. Yields on
interest-earning assets and costs of interest bearing liabilities
continue to decline as a result of the low interest rate
environment brought on by Federal Reserve Board interest rate
decreases during fiscal 2020.
- Net interest
rate spread and
margin both decreased when comparing the three months
ended September 30, 2020 and 2019. Net interest rate spread
decreased 41 basis points to 2.72% as compared to 3.13% when
comparing the three months ended September 30, 2020 and 2019,
respectively. Net interest margin decreased 47 basis points to
2.79% for the three months ended September 30, 2020 as compared to
3.26% for the three months ended September 30, 2019. Decreases in
net interest rate spread and margin resulted primarily from lower
yields on loans and securities as a result of the low interest rate
environment, partially offset by growth in average loans and
securities balances.
- 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 2.98% and 3.44% for
the three months ended September 30, 2020 and 2019,
respectively.
Asset Quality and Loan Loss Provision
- Provision
for loan losses amounted to $1.2 million and $551,000 for
the three months ended September 30, 2020 and 2019, respectively.
The increase in provision for loan loss was due to the impact of
the COVID-19 pandemic as well as growth in gross loans and an
increase in loans adversely classified. During fiscal 2020, the
Company instituted a loan deferment program whereby short-term (3-6
months) deferral of principal and/or interest payments had been
provided. At September 30, 2020, the Company still had $67.4
million or 201 loans on payment deferral as a result of the
pandemic, which is down from $193.5 million or 706 loans at June
30, 2020. Management continues to monitor these loans, however, it
remains uncertain that all of these loans will continue to perform
as agreed once they reach the end of the deferral period. As a
result, the Company increased the provision for loan loss for the
three months ended September 30, 2020. Loans classified as
substandard or special mention totaled $38.9 million at September
30, 2020, compared to $32.8 million at June 30, 2020, an increase
of $6.1 million. The increase in classified loans is
due to a deterioration of borrowers’ cash flow in their most recent
financial statements. These loans are performing as of
September 30, 2020. Reserves on loans classified as substandard or
special mention totaled $3.9 million at September 30, 2020 compared
to $2.4 million at June 30, 2020, an increase of $1.5 million which
is attributable to the increase in classified loans. No
loans were classified as doubtful or loss at September 30, 2020 or
June 30, 2020. Allowance for loan losses to total loans receivable
was 1.68% at September 30, 2020, and 1.62% at June 30,
2020. Total loans receivable included $100.5 million
and $99.8 million of SBA Paycheck Protection Program (PPP) loans at
September 30, 2020 and June 30, 2020, respectively. Excluding these
SBA guaranteed loans, the allowance for loan losses to total loans
receivable would have been 1.85% and 1.80% at September 30, 2020
and June 30, 2020, respectively.
- Net charge-offs
amounted to $38,000 and $307,000 for the three months ended
September 30, 2020 and 2019, respectively, a decrease of $269,000.
The decrease in charge-off activity was primarily within the
consumer and commercial loan portfolios.
- Nonperforming
loans amounted to $4.3 million and $4.1 million at
September 30, 2020 and June 30, 2020, respectively. At September
30, 2020 and June 30, 2020, respectively, nonperforming assets were
0.24% of total assets. Nonperforming loans were 0.42% and 0.41% of
net loans at September 30, 2020 and June 30, 2020, respectively. At
September 30, 2019, nonperforming assets to total assets were 0.27%
and nonperforming loans to net loans were 0.44%.
Noninterest Income and Noninterest Expense
- Noninterest income
decreased $188,000, or 8.3%, and totaled $2.1 million and $2.3
million for the three months ended September 30, 2020 and 2019,
respectively. The decrease was primarily due to decreases in
service charges on deposit accounts offset by an increase in debit
card fees resulting from continued growth in the number of checking
accounts with debit cards.
- Noninterest
expense increased $711,000 or 11.1%, to $7.1 million for
the three months ended September 30, 2020 as compared to $6.4
million for the three months ended September 30, 2019. The
increases during the three months ended September 30, 2020 were
primarily due to an increase in salaries and employee benefits
expenses resulting from additional staffing for a new branch
located in Albany, New York, which opened in September 2020 and
increases in FDIC insurance premiums. The lower FDIC
insurance premiums for the three months ended September 30, 2019,
was a result of a credit received totaling $108,000.
Income Taxes
- 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 11.7%
for the three months ended September 30, 2020, compared to 16.1%
for the three months ended September 30, 2019. The statutory 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 to arrive at the
effective tax rate.
Balance Sheet Summary
- Total assets of
the Company were $1.8 billion at September 30, 2020 and $1.7
billion at June 30, 2020, an increase of $122.3 million, or
7.3%.
- Securities
available-for-sale and held-to-maturity increased $49.4
million, or 8.1%, to $659.8 million at September 30, 2020 as
compared to $610.4 million at June 30, 2020. This increase was the
result of an increase in municipal deposits and the need to
collateralize the uninsured portion of these deposits. Securities
purchases totaled $132.7 million during the three months ended
September 30, 2020 and consisted of $93.8 million of state and
political subdivision securities and $34.1 million of
mortgage-backed securities, $2.5 million of corporate securities,
and $2.3 million of other securities. Principal pay-downs and
maturities during the three months amounted to $82.4 million,
primarily consisting of $14.7 million of mortgage-backed
securities, $65.3 million of state and political subdivision
securities, and $1.3 million of other securities.
- Net loans
receivable increased $35.3 million, or 3.5%, to $1.0
billion at September 30, 2020 from $993.5 million at June 30, 2020.
Of the $1.0 billion in net loans receivable at September 30, 2020,
$100.5 million were SBA Paycheck Protection Program loans. The loan
growth experienced during the three months consisted primarily of
$34.2 million in commercial real estate loans and $10.2 million in
residential real estate loans. This growth was partially offset by
a $2.1 million decrease in residential construction and land loans,
$3.7 million decrease in commercial construction loans, $1.4
million decrease in home equity loans and $1.2 million increase in
allowance for loan losses.
- Deposits totaled
$1.6 billion at September 30, 2020 and $1.5 billion at June 30,
2020, an increase of $117.9 million, or 7.9%. Noninterest-bearing
deposits increased $17.5 million, or 12.7%, NOW deposits increased
$103.0 million, or 10.8%, and savings deposits increased $2.2
million, or 0.9%, when comparing September 30, 2020 and June 30,
2020. These increases were offset by a decrease in money market
deposits of $4.3 million, or 3.2%, and a decrease in certificates
of deposits of $442,000, or 1.2%, when comparing September 30, 2020
and June 30, 2020. Typically deposits increase during the first
quarter of the Company’s fiscal year as a result of an increase in
municipal deposits at Greene County Commercial Bank, primarily from
tax collection, and new account relationships.
- Borrowings for the
Company amounted to $25.7 million at September 30, 2020 compared to
$25.5 million at June 30, 2020, an increase of
$249,000. At September 30, 2020, borrowing consisted of
$6.1 million in term advances with the Federal Home Loan Bank of
New York (“FHLB”), and $19.6 million of Fixed-to-Floating Rate
Subordinated Notes. During the three months ended
September 30, 2020, the Company repaid $10.9 million of Paycheck
Protection Plan Lending Facility “(PPPLF”) proceeds, $7.0 million
of short-term borrowings with Atlantic Central Bankers Bank and
$1.5 million of term debt with the FHLB. The Company entered into
Subordinated Note Purchase Agreements on September 17, 2020, issued
at 4.75% Fixed-to-Floating Rate due September 15, 2030, in the
aggregate principal amount of $20.0 million. These notes are
callable on September 15, 2025.
- Shareholders’
equity increased to $133.0 million at September 30, 2020
from $128.8 million at June 30, 2020, resulting primarily from net
income of $4.9 million, partially offset by dividends declared and
paid of $468,000 and an increase in other accumulated comprehensive
loss of $190,000.
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, both
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, financial and regulatory changes related to the
COVID-19 pandemic, 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.
The Company has also provided in this news release supplemental
disclosures for the calculation of the allowance for loan loss to
gross loans, adjusted to exclude SBA Paycheck Protection Program
loans. 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 Financial Ratios."
Greene County Bancorp, Inc.Consolidated
Statements of Income, and Selected Financial
Ratios (Unaudited)
|
At or for the three months |
|
Ended September 30, |
(Dollars in thousands, except per share data) |
|
2020 |
|
|
2019 |
|
Interest income |
$13,338 |
|
$12,608 |
|
Interest expense |
|
1,522 |
|
|
2,108 |
|
Net interest income |
|
11,816 |
|
|
10,500 |
|
Provision for loan losses |
|
1,243 |
|
|
551 |
|
Noninterest income |
|
2,078 |
|
|
2,266 |
|
Noninterest expense |
|
7,133 |
|
|
6,422 |
|
Income before taxes |
|
5,518 |
|
|
5,793 |
|
Tax provision |
|
643 |
|
|
930 |
|
Net Income |
$4,875 |
|
$4,863 |
|
|
|
|
Basic EPS |
$0.57 |
|
$0.57 |
|
Weighted average shares
outstanding |
|
8,513,414 |
|
|
8,537,814 |
|
Diluted EPS |
$0.57 |
|
$0.57 |
|
Weighted average diluted shares
outstanding |
|
8,513,414 |
|
|
8,537,814 |
|
Dividends declared per share |
$0.12 |
|
$0.11 |
|
|
|
|
Selected Financial
Ratios |
|
|
Return on average assets1 |
|
1.14 |
% |
|
1.49 |
% |
Return on average equity1 |
|
14.89 |
|
|
17.00 |
|
Net interest rate spread1 |
|
2.72 |
|
|
3.13 |
|
Net interest margin1 |
|
2.79 |
|
|
3.26 |
|
Fully taxable-equivalent net
interest margin2 |
|
2.98 |
|
|
3.44 |
|
Efficiency ratio3 |
|
51.34 |
|
|
50.31 |
|
Non-performing assets to total
assets |
|
0.24 |
|
|
0.27 |
|
Non-performing loans to net
loans |
|
0.42 |
|
|
0.44 |
|
Allowance for loan losses to
non-performing loans |
|
404.69 |
|
|
381.71 |
|
Allowance for loan losses to
total loans |
|
1.68 |
|
|
1.64 |
|
Shareholders’ equity to total
assets |
|
7.39 |
|
|
8.27 |
|
Dividend payout ratio4 |
|
21.05 |
|
|
19.30 |
|
Actual dividends paid to net
income5 |
|
9.60 |
|
|
8.88 |
|
Book value per share |
$15.62 |
|
$13.65 |
|
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 21%
for federal income taxes and 3.98% for New York State income taxes
for the period ended September 30, 2020 and 2019. The following
table summarizes the adjustments made to arrive at the fully
taxable-equivalent net interest margin.
|
For the three months ended September 30, |
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
Net interest income
(GAAP) |
$11,816 |
|
$10,500 |
|
Tax-equivalent adjustment |
|
812 |
|
|
571 |
|
Net interest income (fully
taxable-equivalent basis) |
$12,628 |
|
$11,071 |
|
|
|
|
Average interest-earning
assets |
$1,695,482 |
|
$1,286,966 |
|
Net interest margin (fully
taxable-equivalent basis) |
|
2.98 |
% |
|
3.44 |
% |
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 Company’s
majority shareholder, owning 54.1% of the shares outstanding. 5
Dividends declared divided by net income. The MHC waived its right
to receive dividends declared during the three months ended
September 30, 2020. The MHC’s ability to waive the receipt of
dividends is dependent upon annual approval of its members as well
as receiving the non-objection of the Federal Reserve Board.
The above information is preliminary and based on the Company’s
data available at the time of presentation.Greene County
Bancorp, Inc.Consolidated Statements of Financial
Condition (Unaudited)
|
AtSeptember 30, 2020 |
|
AtJune 30, 2020 |
(Dollars In thousands, except
share data) |
|
|
|
Assets |
|
|
|
Total cash and cash equivalents |
$76,167 |
|
|
$40,463 |
|
Long term certificate of deposit |
|
4,094 |
|
|
|
4,070 |
|
Securities- available for sale,
at fair value |
|
269,670 |
|
|
|
226,709 |
|
Securities- held to maturity, at
amortized cost |
|
390,107 |
|
|
|
383,657 |
|
Equity securities, at fair
value |
|
273 |
|
|
|
267 |
|
Federal Home Loan Bank stock, at
cost |
|
1,158 |
|
|
|
1,226 |
|
|
|
|
|
Gross loans receivable |
|
1,049,113 |
|
|
|
1,012,660 |
|
Less: Allowance for loan
losses |
|
(17,596) |
|
|
|
(16,391) |
|
Unearned origination fees and costs, net |
|
(2,735) |
|
|
|
(2,747) |
|
Net loans receivable |
|
1,028,782 |
|
|
|
993,522 |
|
|
|
|
|
Premises and equipment |
|
14,097 |
|
|
|
13,658 |
|
Accrued interest receivable |
|
8,395 |
|
|
|
8,207 |
|
Prepaid expenses and other
assets |
|
6,397 |
|
|
|
5,024 |
|
Total assets |
$1,799,140 |
|
|
$1,676,803 |
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
Noninterest bearing deposits |
$155,669 |
|
|
$138,187 |
|
Interest bearing deposits |
|
1,463,324 |
|
|
|
1,362,888 |
|
Total deposits |
|
1,618,993 |
|
|
|
1,501,075 |
|
|
|
|
|
Borrowings from other banks,
short-term |
|
- |
|
|
|
17,884 |
|
Borrowings from FHLB, long
term |
|
6,100 |
|
|
|
7,600 |
|
Subordinated notes payable |
|
19,633 |
|
|
|
- |
|
Accrued expenses and other
liabilities |
|
21,392 |
|
|
|
21,439 |
|
Total liabilities |
|
1,666,118 |
|
|
|
1,547,998 |
|
Total shareholders’ equity |
|
133,022 |
|
|
|
128,805 |
|
Total liabilities and shareholders’ equity |
$1,799,140 |
|
|
$1,676,803 |
|
Common shares outstanding |
|
8,513,414 |
|
|
|
8,513,414 |
|
Treasury shares |
|
97,926 |
|
|
|
97,926 |
|
The above information is preliminary and based on the Company’s
data available at the time of presentation.
For Further Information
Contact:Donald E. GibsonPresident & CEO(518)
943-2600donaldg@tbogc.com
Michelle M. Plummer, CPA, CGMAEVP, COO &
CFO(518) 943-2600michellep@tbogc.com
Greene County Bancorp (NASDAQ:GCBC)
Historical Stock Chart
From Apr 2024 to May 2024
Greene County Bancorp (NASDAQ:GCBC)
Historical Stock Chart
From May 2023 to May 2024