Greene County Bancorp, Inc. — Form 10-Q Summary
Reporting period: The filing covers the quarter ended March 31, 2015, and the nine months ended March 31, 2015, compared with the same periods in 2014. The request metadata says “2014 Q3,” but the filing itself is for fiscal 2015 Q3. Financial statements are unaudited.
Financial performance and position
| Metric | Period/current value | Comparable value |
|---|---|---|
| Net income | Nine months: $5.37 million; quarter: $1.78 million | Nine months: $4.98 million; quarter: $1.50 million |
| Diluted EPS | Nine months: $1.26; quarter: $0.42 | Nine months: $1.17; quarter: $0.35 |
| Net interest income | Nine months: $17.41 million; quarter: $5.89 million | Nine months: $15.97 million; quarter: $5.35 million |
| Net interest margin | Nine months: 3.43%; quarter: 3.39% | Nine months: 3.38%; quarter: 3.32% |
| Provision for loan losses | Nine months: $1.13 million; quarter: $416,000 | Nine months: $1.11 million; quarter: $288,000 |
| Net loans | March 31: $435.3 million | June 30, 2014: $399.3 million |
| Total deposits | March 31: $644.8 million | June 30, 2014: $589.6 million |
| Cash and cash equivalents | March 31: $24.8 million | June 30, 2014: $13.8 million |
| Total assets / shareholders’ equity | $734.0 million / $65.9 million | June 30, 2014: $674.2 million / $61.2 million |
| FHLB borrowings | $17.3 million; no short-term borrowings | June 30, 2014: $17.7 million total |
| Operating cash flow | Nine months: $8.7 million | 2014 nine months: $7.2 million |
For the nine months, interest income rose 7.9% and interest expense declined 3.2%, supporting 9.0% growth in net interest income. Noninterest income increased 6.3%, while noninterest expense rose 11.7% to $13.2 million. Quarterly net income increased 19.3% year over year. Equity was 8.97% of period-end assets; the banks met applicable regulatory capital requirements.
Material changes and asset quality
- Assets grew 8.9% from June 30, 2014. Net loans increased 9.0%, led by nonresidential real estate, construction, and commercial lending.
- Deposits increased 9.4%, primarily because of municipal deposits associated with tax collections and state funding. Municipal deposits were 32.6% of total deposits and may fluctuate seasonally.
- Nonperforming loans were $5.8 million, down from $6.2 million at June 30, 2014; nonperforming assets were $6.8 million, up from $6.6 million. Nonperforming assets were 0.93% of assets.
- The allowance for loan losses was $7.8 million, or 1.77% of gross loans, versus $7.4 million, or 1.83%, at June 30, 2014. Nine-month net charge-offs were $727,000, down from $808,000.
- Nonaccrual loans were $5.4 million; $1.6 million were in foreclosure. Management noted New York foreclosure procedures can take more than two years.
Outlook, risks, and unusual items
- No specific earnings or revenue guidance was provided. Management said higher long-term rates could slow new lending and refinancing; it also highlighted sensitivity to interest rates, credit quality, real estate values, deposit flows, competition, and economic conditions.
- Management expected available cash, securities, and borrowing capacity to be sufficient for current loan commitments. Commitments totaled $43.7 million.
- The company increased long-term FHLB funding to help manage exposure to rising rates. The $17.3 million of advances had a 1.48% weighted-average rate and 42-month weighted-average maturity; available FHLB funding was reported at $168.2 million.
- Noninterest costs increased partly because of a new branch, relocation of lending operations, higher processing and technology costs, and implementation costs for Greene Risk Management, a pooled captive insurance subsidiary formed in December 2014. Foreclosed-real-estate write-downs were $109,000 for the nine months.
- Management reported no securities other-than-temporary impairment and no securities sales during the periods. Unrealized losses were attributed to interest rates and wider credit spreads.
- A $0.18-per-share dividend was declared for the quarter ended March 31, 2015, payable in May. The MHC intended to waive receipt of that dividend, subject to applicable approvals.
Important facts for investors to verify
- Confirm the reporting-period discrepancy between the request metadata and the filing’s March 31, 2015 period.
- Track municipal deposit concentration and seasonality, and whether deposit growth persists outside tax-collection periods.
- Monitor commercial and nonresidential real estate loan growth, nonaccruals, foreclosures, charge-offs, and allowance adequacy.
- Assess whether rising operating expenses and the new captive insurance subsidiary affect future profitability.
- Review the company’s interest-rate exposure, borrowing strategy, and liquidity under changing rates and deposit conditions.