GREENE COUNTY BANCORP INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 27, 2015

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8-K - GREENE COUNTY BANCORP, INC 8-K 1-23-2015 - GREENE COUNTY BANCORP INCform8k.htm
EXHIBIT 99.1

FOR IMMEDIATE RELEASE
Date: January 23, 2015
For Further Information Contact:
Donald E. Gibson
President & CEO
(518) 943-2600
donaldg@tbogc.com

Michelle M. Plummer, CPA
EVP, COO & CFO
(518) 943-2600
michellep@tbogc.com

Greene County Bancorp, Inc. Reports Record Net Income For The Six Months Ended December 31, 2014

Catskill, N.Y. -- (BUSINESS WIRE) – January 23, 2015 -- 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 six and three months ended December 31, 2014, which is the second quarter of the Company’s fiscal year ending June 30, 2015. Net income for the six and three months ended December 31, 2014 was $3.6 million, or $0.85 per basic and $0.84 per diluted share, and $1.8 million, or $0.43 per basic and diluted share, respectively, as compared to $3.5 million, or $0.83 per basic and $0.82 per diluted share, and $1.7 million, or $0.41 per basic and diluted share, for the six and three months ended December 31, 2013, respectively. Net income increased $107,000, or 3.1% when comparing the six months ended December 31, 2014 and 2013, and increased $86,000, or 5.0% when comparing the three months ended December 31, 2014 and 2013.

Donald Gibson, President & CEO stated; “I am pleased to report record net income for the six months ended December 31, 2014. The continuation of historically low interest rates continues to pose a major challenge to both our bank and the entire banking industry. Strategically, in order to counter this low rate environment, we have remained 100% focused on growing our local loan portfolio. As a result, our loan portfolio, which historically earns a higher yield than our investment portfolio, now represents a larger percentage of our assets. This has enabled us to increase both spread and margin by four basis points when comparing the three months ended December 31, 2014 and 2013, respectively.”

Selected highlights for the six and three months ended December 31, 2014 are as follows:

· Net interest income increased $906,000 to $11.5 million for the six months ended December 31, 2014 from $10.6 million for the six months ended December 31, 2013. Net interest income increased $475,000 to $5.8 million for the three months ended December 31, 2014 from $5.4 million for the three months ended December 31, 2013. This increase resulted from an increase in our net interest spread and margin along with an increase in average loan balances.
· Net interest spread increased 5 basis points to 3.37% as compared to 3.32% when comparing the six months ended December 31, 2014 and 2013, respectively. Net interest margin increased 5 basis points to 3.44% for the six months ended December 31, 2014 as compared to 3.39% for the six months ended December 31, 2013. Net interest spread increased 4 basis points to 3.36% as compared to 3.32% when comparing the three months ended December 31, 2014 and 2013, respectively. Net interest margin increased 4 basis points to 3.43% for the three months ended December 31, 2014 as compared to 3.39% for the three months ended December 31, 2013.
· The provision for loan losses amounted to $716,000 and $821,000 for the six months ended December 31, 2014 and 2013, respectively, and was $305,000 and $508,000 for the three months ended December 31, 2014 and 2013, respectively. The level of allowance for loan losses to total loans receivable decreased to 1.81% as of December 31, 2014 as compared to 1.83% as of June 30, 2014.
 
· Net charge-offs amounted to $339,000 and $690,000 for the six months ended December 31, 2014 and 2013, respectively, and amounted to $229,000 and $365,000 for the three months ended December 31, 2014 and 2013, respectively.
· Nonperforming loans amounted to $6.3 million and $6.2 million at December 31, 2014 and June 30, 2014, respectively.
· Noninterest income increased $243,000, or 9.1%, to $2.9 million for the six months ended December 31, 2014 as compared to $2.7 million for the six months ended December 31, 2013, primarily due to an increase in service charges on deposits and debit card fees resulting from continued growth in the number of checking accounts with debit cards, as well as an increase in fees collected on loans which are included in other operating income. Noninterest income increased $124,000, or 9.4%, to $1.4 million for the three months ended December 31, 2014 as compared to $1.3 million for the three months ended December 31, 2013.
· Noninterest expense increased $1.2 million, or 16.0%, to $8.8 million for the six months ended December 31, 2014 as compared to $7.6 million for the six months ended December 31, 2013. Noninterest expense increased $745,000, or 19.9%, to $4.5 million for the three months ended December 31, 2014 as compared to $3.8 million for the three months ended December 31, 2013. The increase was primarily due to increases in salaries and employee benefits, service and data processing fees, computer software, supplies and support, and legal and professional fees.
· The increase in salaries and employees benefits was in part due to normal increases in salaries as well as an increase in the number of employees when comparing the six and three months ended December 31, 2014 and 2013 as well as to an increase in medical insurance expenses.
· The increase in service and data processing fees were the result of higher debit card processing fees. During the six and three months ended December 31, 2013, the Company had paid reduced fees as a result of renegotiation of the contract between the Company and its vendor. These incentives have since expired, resulting in the higher fees paid during the six and three months ended December 31, 2014.
· The increase in computer software, supplies and support was the result of a fee paid to one of the Company’s vendors related to the renegotiation of the contract for support services during the quarter ended September 30, 2014.
· The increase in legal and professional fees was primarily due to the Company incurring $155,000 of expenses related to the formation of a pooled captive insurance company which was established in the quarter ended December 31, 2014. This newly formed company, Greene Risk Management, Inc. was formed as a subsidiary of Greene County Bancorp, Inc. to provide additional insurance coverage for the Company and its subsidiaries related to the operations of the Company for which insurance may not be economically feasible.
· Included in other expenses were write-downs on foreclosed real estate in the amount of $99,000 for the six and three months ended December 31, 2014. These write-downs were the result of either obtaining updated appraisals on the properties or the acceptance of an offer to purchase the property at a value lower than the recorded fair value.
· The Company’s effective tax rate was 27.5% and 27.1% for the six and three months ended December 31, 2014, compared to 29.0% and 28.9% for the six and three months ended December 31, 2013. The effective tax rate has continued to decline as a result of purchases of tax-exempt bonds and loans as well as continued loan growth within the Company’s real estate investment trust subsidiary. We anticipate that the establishment of the Company’s pooled captive insurance company will also contribute to a lower effective federal income tax rate in future periods, as premium income, up to $1.2 million, received by the pooled captive insurance company is exempt from income taxes. The premiums paid to the pooled captive insurance company by the Company and its banking subsidiaries are tax deductible.
 
· Total assets of the Company were $712.4 million at December 31, 2014 as compared to $674.2 million at June 30, 2014, an increase of $38.2 million, or 5.7%.
· Securities available for sale and held to maturity amounted to $250.1 million, or 35.1% of assets, at December 31, 2014 as compared to $238.1 million, or 35.3% of assets, at June 30, 2014, an increase of $12.0 million, or 5.0%.
· Net loans receivable increased $23.4 million, or 5.9%, to $422.7 million, or 59.3% of assets, at December 31, 2014 from $399.3 million, or 59.2% of assets, at June 30, 2014. The loan growth experienced during the six month period consisted primarily of $13.2 million in commercial real estate loans, $4.8 million in commercial construction loans, $397,000 in multi-family mortgage loans, $494,000 in home equity loans, and $5.6 million in commercial loans, and was partially offset by a $611,000 decrease in residential mortgage loans, and a $377,000 increase in the allowance for loan losses.
· Total deposits decreased $6.4 million, or 1.1% to $583.2 million at December 31, 2014 from $589.6 million at June 30, 2014, due to normal seasonal fluctuations.
· The Company had $43.5 million of short term borrowings, and $15.5 million of long-term borrowings, with the Federal Home Loan Bank at December 31, 2014 compared to $3.2 million of short term borrowings and $14.5 million of long-term borrowings at June 30, 2014.
· Total shareholders’ equity increased $3.3 million to $64.5 million, or 9.1% of total assets, at December 31, 2014, from total equity of $61.2 million, or 9.1% of total assets, at June 30, 2014.

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 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, 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.
(END)
 

   
At or for the Six
    
At or for the Three
  
   
Months Ended December 31,
    
Months Ended December 31,
  
   
2014
    
2013
    
2014
    
2013
  
Dollars In thousands,
except share and per share data
                
Interest income
  
$
12,648
    
$
11,777
    
$
6,407
    
$
5,951
  
Interest expense
    
1,125
      
1,160
      
563
      
582
  
Net interest income
    
11,523
      
10,617
      
5,844
      
5,369
  
Provision for loan losses
    
716
      
821
      
305
      
508
  
Noninterest income
    
2,909
      
2,666
      
1,440
      
1,316
  
Noninterest expense
    
8,773
      
7,563
      
4,496
      
3,751
  
Income before taxes
    
4,943
      
4,899
      
2,483
      
2,426
  
Tax provision
    
1,357
      
1,420
      
672
      
701
  
Net Income
  
$
3,586
    
$
3,479
    
$
1,811
    
$
1,725
  
                                 
Basic EPS
  
$
0.85
    
$
0.83
    
$
0.43
    
$
0.41
  
Weighted average shares outstanding
    
4,215,738
      
4,199,349
      
4,217,118
      
4,203,985
  
                                 
Diluted EPS
  
$
0.84
    
$
0.82
    
$
0.43
    
$
0.41
  
Weighted average diluted shares outstanding
    
4,246,793
      
4,237,766
      
4,248,175
      
4,240,216
  
                                 
Dividends declared per share 3
  
$
0.36
    
$
0.35
    
$
0.18
    
$
0.175
  
                                 
Selected Financial Ratios
                                
Return on average assets1
    
1.05
%
    
1.08
%
    
1.04
%
    
1.06
%
Return on average equity1
    
11.43
%
    
12.20
%
    
11.39
%
    
11.97
%
Net interest rate spread1
    
3.37
%
    
3.32
%
    
3.36
%
    
3.32
%
Net interest margin1
    
3.44
%
    
3.39
%
    
3.43
%
    
3.39
%
Efficiency ratio2
    
60.79
%
    
56.94
%
    
61.72
%
    
56.11
%
Non-performing assets to total assets
    
0.96
%
    
1.05
%
                
Non-performing loans to net loans
    
1.49
%
    
1.62
%
                
Allowance for loan losses to non-performing loans
    
123.98
%
    
114.70
%
                
Allowance for loan losses to total loans
    
1.81
%
    
1.82
%
                
Shareholders’ equity to total assets
    
9.05
%
    
8.95
%
                
Dividend payout ratio3
    
42.35
%
    
42.17
%
                
Actual dividends paid to net income4
    
19.33
%
    
19.20
%
                
Book value per share
  
$
15.28
    
$
13.88
                  

1 Ratios are annualized when necessary.
2 Noninterest expense divided by the sum of net interest income and noninterest income.
3 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 54.6% of the Company’s shares outstanding.
4 Dividends declared divided by net income. The MHC waived its right to receive dividends declared during the six months ended December 31, 2014 and 2013.
 

   
As of
December 31, 2014
    
As of
June 30, 2014
  
(Dollars In thousands)
        
Assets
        
Total cash and cash equivalents
  
$
14,869
    
$
13,809
  
Long term certificate of deposit
    
250
      
250
  
Securities- available for sale, at fair value
    
69,071
      
56,151
  
Securities- held to maturity, at amortized cost
    
181,065
      
181,946
  
Federal Home Loan Bank stock, at cost
    
3,230
      
1,561
  
                 
Gross loans receivable
    
429,628
      
405,841
  
Less:  Allowance for loan losses
    
(7,796
)
    
(7,419
)
   Unearned origination fees and costs, net
    
884
      
887
  
Net loans receivable
    
422,716
      
399,309
  
                 
Premises and equipment
    
14,355
      
14,307
  
Accrued interest receivable
    
2,937
      
2,710
  
Foreclosed real estate
    
581
      
473
  
Prepaid expenses and other assets
    
3,348
      
3,645
  
Total assets
  
$
712,422
    
$
674,161
  
                 
Liabilities and shareholders’ equity
                
Noninterest bearing deposits
  
$
66,348
    
$
67,446
  
Interest bearing deposits
    
516,833
      
522,128
  
Total deposits
    
583,181
      
589,574
  
                 
Borrowings from FHLB, short term
    
43,500
      
3,150
  
Borrowings from FHLB, long term
    
15,500
      
14,500
  
Accrued expenses and other liabilities
    
5,777
      
5,737
  
Total liabilities
    
647,958
      
612,961
  
Total shareholders’ equity
    
64,464
      
61,200
  
Total liabilities and shareholders’ equity
  
$
712,422
    
$
674,161
  
Common shares outstanding
    
4,218,857
      
4,213,757
  
Treasury shares
    
86,813
      
91,913
  

 

GREENE COUNTY BANCORP INC Reports