EX-99.1 2 ex99_1.htm EXHIBIT 99.1
EXHIBIT  99.1

FOR IMMEDIATE RELEASE
 
Date: January 22, 2016
 
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 24.7% Increase in Net Income For The Six Months
Ended December 31, 2015

Catskill, N.Y. -- (BUSINESS WIRE) – January 22, 2016 -- 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, 2015, which is the second quarter of the Company’s fiscal year ending June 30, 2016.  Net income for the six and three months ended December 31, 2015 was $4.5 million, or $1.06 per basic and $1.05 per diluted share, and $2.3 million, or $0.55 per basic and diluted share, respectively, as compared to $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, for the six and three months ended December 31, 2014, respectively.  Net income increased $884,000, or 24.7%, when comparing the six months ended December 31, 2015 and 2014, and increased $509,000, or 28.1%, when comparing the three months ended December 31, 2015 and 2014.

Donald Gibson, President & CEO stated: “It is my pleasure to report record net income for the six months ended December 31, 2015. I believe our continued success is a testimony to our community banking model. In contrast to large banks, our strategy has been, and continues to be, 100% focused and dedicated to supporting our hometown markets.”

Selected highlights for the six and three months ended December 31, 2015 are as follows:

Net Interest Income and Margin
· Net interest income increased $1.3 million to $12.8 million for the six months ended December 31, 2015 from $11.5 million for the six months ended December 31, 2014. Net interest income increased $666,000 to $6.5 million for the three months ended December 31, 2015 from $5.8 million for the three months ended December 31, 2014.  These increases in net interest income were primarily the result of the growth in the average interest-earning asset balances.
· Net interest spread and margin increased one basis point to 3.38% and 3.45%, respectively, for the six months ended December 31, 2015, compared to 3.37% and 3.44%, respectively, for the six months ended December 31, 2014.  Net interest spread and margin increased two basis points to 3.38% and 3.45%, respectively, for the three months ended December 31, 2015, compared to 3.36% and 3.43%, respectively, for the three months ended December 31, 2014.
· 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 3.69% and 3.70% for the six and three months ended December 31, 2015, compared to 3.66% and 3.65% for the six and three months ended December 31, 2014.
 Asset Quality and Loan Loss Provision
· The provision for loan losses amounted to $717,000 and $716,000 for the six months ended December 31, 2015 and 2014, respectively. The provision for loan losses amounted to $343,000 and $305,000 for the three months ended December 31, 2015 and 2014, respectively.  Allowance for loan losses to total loans receivable decreased to 1.77% as of December 31, 2015 as compared to 1.81% as of June 30, 2015.
 
· Net charge-offs amounted to $248,000 and $339,000 for the six months ended December 31, 2015 and 2014, respectively, and amounted to $198,000 and $229,000 for the three months ended December 31, 2015 and 2014, respectively.
· Nonperforming loans amounted to $3.7 million and $4.7 million at December 31, 2015 and June 30, 2015, respectively.  At December 31, 2015, nonperforming assets were 0.50% of total assets and nonperforming loans were 0.77% of net loans.
Noninterest Income and Noninterest Expense
· Noninterest income increased $115,000, or 4.0%, to $3.0 million for the six months ended December 31, 2015 as compared to $2.9 million for the six months ended December 31, 2014. Noninterest income increased $138,000, or 9.6%, to $1.6 million for the three months ended December 31, 2015 as compared to $1.4 million for the three months ended December 31, 2014, primarily due to an increase in debit card fees and service charges on deposit accounts resulting from continued growth in the number of checking accounts with debit cards.  The increase in other operating income was primarily the result of income generated by Greene Risk Management, Inc., a captive insurance subsidiary established on December 28, 2014.
· Noninterest expense increased $474,000, or 5.4%, to $9.2 million for the six months ended December 31, 2015 as compared to $8.8 million for the six months ended December 31, 2014. Noninterest expense increased $231,000, or 5.1%, to $4.7 million for the three months ended December 31, 2015 as compared to $4.5 million for the three months ended December 31, 2014. The increase in noninterest expense is primarily the result of an increase in other expense which included costs related to foreclosed real estate (primarily real estate taxes) as well as write-downs of several of the properties within foreclosed real estate based on pending sales or a decrease in the list price.  Salaries and employee benefits expense also increased and was primarily due to the opening of our Kingston branch during the third quarter of fiscal 2015, as well as increases in staffing within our Lending Center and Customer Service Center.  Partially offsetting the aforementioned increases were decreases in computer software, supplies and support. During the six months ended December 31, 2014, a one-time fee was paid to one of the Company’s vendors related to the renegotiation of the contract for support services.  Legal and professional fees also decreased when comparing the six and three months ended December 31, 2015 and 2014.  During the six and three months ended December 31, 2014, the Company incurred one-time legal and professional fees associated with the creation of its newly formed captive insurance subsidiary, Greene Risk Management, Inc.
Income Taxes
· The effective tax rate was 23.2% and 23.1% for the six and three months ended December 31, 2015, compared to 27.5% and 27.1% for the six and three months ended December 31, 2014.  The effective tax rate has continued to decline as a result of increased income derived from tax-exempt bonds and loans as well as continued loan growth within the Company’s real estate investment trust subsidiary.  Also contributing to the lower effective income tax rate is the tax benefits derived from the Company’s pooled captive insurance company, as premium income 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.
Balance Sheet Summary
· Total assets of the Company were $796.8 million at December 31, 2015 as compared to $738.6 million at June 30, 2015, an increase of $58.2 million, or 7.9%.
· Securities available-for-sale and held-to-maturity amounted to $271.1 million, or 34.0% of assets, at December 31, 2015 as compared to $255.0 million, or 34.5% of assets, at June 30, 2015, an increase of $16.1 million, or 6.3%.
· Net loans increased $34.7 million, or 7.8%, to $478.2 million at December 31, 2015 as compared to $443.5 million at June 30, 2015. The loan growth experienced during the six months consisted primarily of $20.8 million in commercial real estate loans, $3.1 million in residential real estate loans, $5.4 million in construction loans, and $5.6 million in commercial loans.
· Total deposits increased $46.5 million, or 7.5%, to $669.2 million at December 31, 2015 from $622.7 million at June 30, 2015.
· The Company had $27.8 million of short-term borrowings, and $20.3 million of long-term borrowings, with the Federal Home Loan Bank at December 31, 2015 compared to $22.9 million of short term borrowings and $18.8 million of long-term borrowings at June 30, 2015.
· Total shareholders’ equity increased $3.9 million to $70.8 million, or 8.9% of total assets, at December 31, 2015, from total equity of $66.9 million, or 9.1% of total assets, at June 30, 2015.
 
Greene County Bancorp, Inc. is the direct and indirect holding company, respectively, of 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. 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.  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 Quarterly Information."

 (END)
 
Greene County Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
Dollars in thousands, except share and per share data
   
At or for the Six
Months Ended December 31,
    
At or for the Three
Months Ended December 31,
  
   
2015
    
2014
    
2015
    
2014
  
Interest income
  
$
13,999
    
$
12,648
    
$
7,136
    
$
6,407
  
Interest expense
    
1,240
      
1,125
      
626
      
563
  
Net interest income
    
12,759
      
11,523
      
6,510
      
5,844
  
Provision for loan losses
    
717
      
716
      
343
      
305
  
Noninterest income
    
3,024
      
2,909
      
1,578
      
1,440
  
Noninterest expense
    
9,247
      
8,773
      
4,727
      
4,496
  
Income before taxes
    
5,819
      
4,943
      
3,018
      
2,483
  
Tax provision
    
1,349
      
1,357
      
698
      
672
  
Net Income
  
$
4,470
    
$
3,586
    
$
2,320
    
$
1,811
  
                                 
Basic EPS
  
$
1.06
    
$
0.85
    
$
0.55
    
$
0.43
  
Weighted average shares outstanding
    
4,224,540
      
4,215,738
      
4,225,924
      
4,217,118
  
Diluted EPS
  
$
1.05
    
$
0.84
    
$
0.55
    
$
0.43
  
Weighted average diluted shares outstanding
    
4,250,456
      
4,246,793
      
4,251,483
      
4,248,175
  
Dividends declared per share 4
  
$
0.37
    
$
0.36
    
$
0.185
    
$
0.18
  
                                 
Selected Financial Ratios
                                
Return on average assets1
    
1.18
%
    
1.05
%
    
1.20
%
    
1.04
%
Return on average equity1
    
13.01
%
    
11.43
%
    
13.32
%
    
11.39
%
Net interest rate spread1
    
3.38
%
    
3.37
%
    
3.38
%
    
3.36
%
Net interest margin1
    
3.45
%
    
3.44
%
    
3.45
%
    
3.43
%
Fully taxable-equivalent net interest margin2
    
3.69
%
    
3.66
%
    
3.70
%
    
3.65
%
Efficiency ratio3
    
58.59
%
    
60.79
%
    
58.44
%
    
61.72
%
Non-performing assets to total assets
    
0.50
%
    
0.96
%
                
Non-performing loans to net loans
    
0.77
%
    
1.49
%
                
Allowance for loan losses to non-performing loans
    
232.73
%
    
123.98
%
                
Allowance for loan losses to total loans
    
1.77
%
    
1.81
%
                
Shareholders’ equity to total assets
    
8.88
%
    
9.05
%
                
Dividend payout ratio4
    
34.91
%
    
42.35
%
                
Actual dividends paid to net income5
    
16.00
%
    
19.33
%
                
Book value per share
  
$
16.73
    
$
15.28
                  

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 approximately 34% for federal income taxes and 3.63% for New York State income taxes for all periods presented.  The following table summarizes the adjustments made to arrive at the fully taxable-equivalent net interest margin.

   
For the six months ended
    
For the three months ended
  
(Dollars in thousands)
  
12/31/2015
    
12/31/2014
    
12/31/2015
    
12/31/2014
  
Net interest income (GAAP)
  
$
12,759
    
$
11,523
    
$
6,510
    
$
5,844
  
Tax-equivalent adjustment
    
904
      
732
      
471
      
375
  
Net interest income (fully taxable-equivalent basis)
  
$
13,663
    
$
12,255
    
$
6,981
    
$
6,219
  
                                 
Average interest-earning assets
  
$
739,869
    
$
669,381
    
$
754,770
    
$
681,696
  
Net interest margin (fully taxable-equivalent basis)
    
3.69
%
    
3.66
%
    
3.70
%
    
3.65
%

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 owner of 54.5% of the Company’s shares outstanding.
5 Dividends declared divided by net income.  The MHC waived its right to receive dividends declared during the six months ended December 31, 2015 and 2014.
 
Consolidated Statements of Financial Condition (Unaudited)
Dollars in thousands
   
As of
December 31, 2015
    
As of
June 30, 2015
  
Assets
        
Total cash and cash equivalents
  
$
22,088
    
$
15,538
  
Long term certificate of deposit
    
1,230
      
1,230
  
Securities- available for sale, at fair value
    
93,582
      
86,034
  
Securities- held to maturity, at amortized cost
    
177,554
      
169,000
  
Federal Home Loan Bank stock, at cost
    
2,782
      
2,494
  
                 
Gross loans receivable
    
485,928
      
450,755
  
Less:   Allowance for loan losses
    
(8,611
)
    
(8,142
)
Unearned origination fees and costs, net
    
887
      
883
  
Net loans receivable
    
478,204
      
443,496
  
                 
Premises and equipment
    
14,340
      
14,515
  
Accrued interest receivable
    
3,258
      
3,026
  
Foreclosed real estate
    
304
      
847
  
Prepaid expenses and other assets
    
3,464
      
2,467
  
Total assets
  
$
796,806
    
$
738,647
  
                 
Liabilities and shareholders’ equity
                
Noninterest bearing deposits
  
$
77,784
    
$
73,359
  
Interest bearing deposits
    
591,405
      
549,358
  
Total deposits
    
669,189
      
622,717
  
                 
Borrowings from FHLB, short term
    
27,800
      
22,900
  
Borrowings from FHLB, long term
    
20,300
      
18,800
  
Accrued expenses and other liabilities
    
8,767
      
7,310
  
Total liabilities
    
726,056
      
671,727
  
Total shareholders’ equity
    
70,750
      
66,920
  
Total liabilities and shareholders’ equity
  
$
796,806
    
$
738,647
  
Common shares outstanding
    
4,228,957
      
4,222,357
  
Treasury shares
    
76,713
      
83,313