GOUVERNEUR, N.Y., Jan. 30 /PRNewswire-FirstCall/ -- Gouverneur Bancorp, Inc. (OTC:GOVB) (BULLETIN BOARD: GOVB) (the "Company") the parent holding company for Gouverneur Savings and Loan Association (the "Bank"), today announced the results for the first quarter of fiscal year 2009 ended December 31, 2008. For the three months ended December 31, 2008 the Company reported net income of $351,000, or $0.15 per diluted share, representing an increase of $112,000, or 46.9%, over last year's net income of $239,000, or $0.10 per diluted share. The annualized return on average assets and the return on average equity increased to 1.00% and 6.72% for the three months ended December 31, 2008 from 0.72% and 4.64%, respectively, for the three months ended December 31, 2007. Total assets increased by $2.6 million, or 1.9% from $136.7 million to $139.3 million during the first three months of fiscal 2009, with net loans increasing $3.0 million, or 2.7%, to reach $113.5 million over the same period. Commenting on the quarter's results, Mr. Richard F. Bennett, the Company's President and Chief Executive Officer, said, "Short-term interest rates have been cut to historic lows by the Federal Reserve. This has lowered our cost of funds as borrowing rates and CD rates have adjusted downward more quickly than have our loan rates. However, with the Federal government trying to force mortgage rates lower in order to stimulate the housing market, it is unclear what impact this will have on banks, such as ours, which hold mortgages to term. We will probably not be able to offer rates at the levels being discussed which are lower than any long range funding options available to us. For that reason, the results of the first quarter are probably not typical of what we can expect for the entire year. Although interest rate spread has improved, it will continue to be pressured by falling loan rates and a possible decline in loan balances if we are unable to compete with market rates." Net interest income increased by $129,000, or 12.4%, from $1,040,000 for the quarter ended December 31, 2007 to $1,169,000 for the quarter ended December 31, 2008. Interest income decreased $49,000, or 2.4%, while interest expense decreased $178,000, or 18.3% over the same period. Non-interest income decreased $19,000, or 11.9% to $140,000 for the quarter ended December 31, 2008 compared to $159,000 for the quarter ended December 31, 2007. A decrease in the market value of the underlying plan assets in the deferred directors' fees plan in this year's quarter reduced non-interest income by $64,000, but was partially offset by a $26,000 increase in service charges and a $19,000 increase in other non-interest income. Non-interest expense decreased by $61,000 from the first quarter of fiscal 2008 to the first quarter of fiscal 2009 as a decrease in the market value of the underlying plan assets in the deferred directors' fees plan in this year's quarter reduced non-interest expense by $64,000. Non-accrual loans were $753,000 at December 31, 2008, compared to $1,108,000 at September 30, 2008. There was no loan loss provision and net charge-offs were $12,000 for the quarter ended December 31, 2008. The allowance for loan losses was $849,000, or 0.75% of total gross loans outstanding at December 31, 2008 as compared to $861,000, or 0.78% at September 30, 2008. Deposits decreased $0.1 million, or 0.1%, to $85.2 million at December 31, 2008 from $85.3 million at September 30, 2008. Advances from the Federal Home Loan Bank of New York ("FHLB") increased from $27.8 million at September 30, 2008 to $29.5 million at December 31, 2008. Shareholders' equity was $21.2 million at December 31, 2008, an increase of 2.4% over the September 30, 2007 balance of $20.7 million. The book value of Gouverneur Bancorp, Inc. was $9.26 per common share based on 2,288,994 shares outstanding at December 31, 2008. The Company, which is headquartered in Gouverneur, New York, is the holding company for Gouverneur Savings and Loan Association. Founded in 1892, the Bank is a federally chartered savings and loan association offering a variety of banking products and services to individuals and businesses in its primary market area in southern St. Lawrence and northern Lewis and Jefferson Counties in New York State. Statements in this news release contain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs of management as well as assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. These risks and uncertainties include among others, the impact of changes in market interest rates and general economic conditions, changes in government regulations, changes in accounting principles and the quality or composition of the loan and investment portfolios. Therefore, actual future results may differ significantly from results discussed in the forward-looking statements due to a number of factors, which include, but are not limited to, factors discussed in the documents filed by the Company with the Securities and Exchange Commission from time to time. For more information, contact Robert J. Twyman, Vice President and Chief Financial Officer at (315) 287-2600. DATASOURCE: Gouverneur Bancorp, Inc. CONTACT: Robert J. Twyman, Vice President and Chief Financial Officer, +1-315-287-2600 Web Site: http://www.gouverneurbank.com/

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