EXHIBIT  99.1
 

FOR RELEASE

Date: April 24, 2018
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 High Net Income for the Three and Nine Months Ended March 31, 2018, and Branch Expansion in Ulster County

Catskill, N.Y. – April 24, 2018- 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 and nine months ended March 31, 2018, which is the third quarter of the Company’s fiscal year ending June 30, 2018.  Net income for the three and nine months ended March 31, 2018 was $3.7 million, or $0.43 per basic and diluted share, and $10.8 million, or $1.27 per basic and $1.26 per diluted share, respectively, as compared to $2.9 million, or $0.34 per basic and diluted share, and $8.3 million, or $0.98 per basic and diluted share, for the three and nine months ended March 31, 2017, respectively.  Net income increased $780,000, or 26.9%, when comparing the three months ended March 31, 2018 and 2017, and increased $2.5 million, or 29.5%, when comparing the nine months ended March 31, 2018 and 2017.

Donald Gibson, President & CEO, stated, “I am pleased to report record high net income for both the three and nine months ended March 31, 2018, combined with new record high assets, deposits, loans and capital for the same period. In addition to solid financial performance, we recently announced plans for further geographic expansion in Ulster County, with plans to open a new branch office in Woodstock, NY. This is a very exciting announcement as this will be our Bank’s second branch located in Ulster County. We are opening the branch due to overwhelming customer demand. While the bank has not set a definite date for the branch opening, it is our intention to immediately proceed with the design and renovations. We have targeted the fourth quarter of 2018 for the grand opening.”

          Gibson continued, “On April 23, 2018, for the seventh consecutive year, Greene County Bancorp, Inc. was recognized by banking firm KBW as one of only 16 U. S. banking institutions to be named to its coveted ‘Bank Honor Roll’ of superior performers. Honor Roll winners are publicly traded banking institutions with more than $500 million in assets that consistently reported increases in earnings per share over the last eight years since the 2009 financial crisis.”

Selected highlights for the three and nine months ended March 31, 2018 are as follows:

Net Interest Income and Margin
·
Net interest income increased $1.2 million to $8.8 million for the three months ended March 31, 2018 from $7.6 million for the three months ended March 31, 2017. Net interest income increased $3.1 million to $25.5 million for the nine months ended March 31, 2018 from $22.4 million for the nine months ended March 31, 2017.  These increases in net interest income were primarily the result of the growth in the average balance of interest-earning assets.
 

·
Net interest spread and margin decreased nine basis points to 3.17% and 3.24%, respectively, for the three months ended March 31, 2018 compared to 3.26% and 3.33%, respectively, for the three months ended March 31, 2017. Net interest spread and margin decreased 10 basis points to 3.22% and 3.29%, respectively for the nine months ended March 31, 2018 compared to 3.32% and 3.39%, respectively, for the nine months ended March 31, 2017.
·
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 3.45% and 3.58% for the three months ended March 31, 2018 and 2017, respectively. Tax equivalent net interest margin was 3.50% and 3.64% for the nine months ended March 31, 2018 and 2017, respectively.  Tax equivalent net interest margin for the three and nine months ended March 31, 2018 have been adjusted to reflect the Federal blended statutory tax rate applicable to our fiscal year 2018 of 28.1% resulting from the Tax Cuts and Jobs Act (“TCJA”).  As a result of utilizing this lower statutory tax rate for the periods ended March 31, 2018, the tax equivalent net interest margin decreased six and five basis points for the three and nine months ended March 31, 2018, respectively.

Asset Quality and Loan Loss Provision
·
Provision for loan losses amounted to $345,000 and $343,000 for the three months ended March 31, 2018 and 2017, respectively. The provision for loan losses amounted to $1.0 million and $1.5 million for the nine months ended March 31, 2018 and 2017, respectively. The decrease in the provision for loan loss for the period is the result of slower growth in average loan balances. Net loans grew $54.3 million during the nine months ended March 31, 2018 compared to $83.9 million for the nine months ended March 31, 2017. Allowance for loan losses to total loans receivable decreased to 1.69% as of March 31, 2018 as compared to 1.74% as of June 30, 2017, and 1.74% as of March 31, 2017.
·
Net charge-offs amounted to $75,000 and $43,000 for the three months ended March 31, 2018 and 2017, respectively, and amounted to $444,000 and $236,000 for the nine months ended March 31, 2018 and 2017, respectively. The increase in net charges-offs for the nine months is due to the charge-off of two commercial loans during the period.  There were no commercial loan charge-offs during the nine months ended March 31, 2017.
·
Nonperforming loans amounted to $3.5 million and $3.6 million at March 31, 2018 and June 30, 2017, respectively. At March 31, 2018 and June 30, 2017, respectively, nonperforming assets to total assets were 0.32% and 0.45% and nonperforming loans to net loans were 0.52% and 0.58%.  At March 31, 2017, nonperforming assets to total assets were 0.40% and nonperforming loans to net loans were 0.60%.

Noninterest Income and Noninterest Expense
·
Noninterest income increased $277,000, or 17.5%, to $1.9 million for the three months ended March 31, 2018 as compared to $1.6 million for the three months ended March 31, 2017.  Noninterest income increased $743,000, or 15.7%, to $5.5 million for the nine months ended March 31, 2018 as compared to $4.7 million for the nine months ended March 31, 2017. These increases are primarily due to increases in debit card fees and service charges on deposit accounts resulting from continued growth in the number of checking accounts with debit cards, as well as increased monthly or transactional service charges on deposit accounts.
·
Noninterest expense increased $759,000, or 15.1%, to $5.8 million for the three months ended March 31, 2018 as compared to $5.0 million for the three months ended March 31, 2017. Noninterest expense increased $1.4 million, or 9.8%, to $16.0 million for the nine months ended March 31, 2018 as compared to $14.6 million for the nine months ended March 31, 2017. These increases in noninterest expense are primarily the result of an increase in salaries and employee benefits expenses, resulting from additional staffing to support the Bank’s growth.  New positions were added within the Bank’s lending department, customer service center, investment center and for the Bank’s new branch in Copake, New York. The increase is also due to higher service and data processing fees resulting from costs associated with offering more services to customers through online banking.
 

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 19.9% and 22.6% for the three and nine months ended March 31, 2018, respectively compared to 24.6% and 25.3% for the three and nine months ended March 31, 2017.   The decrease in the effective tax rate for the three and nine months ended March 31, 2018 is primarily the result of the impact of the enactment of the TCJA in December 2017.  The TCJA permanently reduces the maximum corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017.  The lower corporate income tax rate means that deferred tax assets and liabilities that will be deductible or taxable in the future would need to be computed at the new tax rate.  Additionally, fiscal year-end taxpayers such as Greene County Bancorp, Inc. are required to utilize a “blended rate” in calculating the effective tax rate for the fiscal year based on a ratio utilizing the number of days at the 35% tax rate and the number of days at the 21% tax rate.  Greene County Bancorp, Inc.’s statutory blended rate for fiscal 2018 is approximately 28%.  The Company recognized $251,000 an income tax benefit for the three months ended December 31, 2017 as a result of the TCJA.  The statutory rate is also 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 benefit 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 $1.2 billion at March 31, 2018 as compared to $982.3 million at June 30, 2017, an increase of $191.5 million, or 19.5%.  This growth is the result of the continued expansion within our existing markets, across all three of our primary banking lines - retail, commercial, and municipal.
·
Securities available-for-sale and held-to-maturity increased $79.8 million, or 25.3%, to $395.1 million at March 31, 2018 as compared to $315.3 million at June 30, 2017.  Securities purchases totaled $146.2 million during the nine months ended March 31, 2018 and consisted of $98.8 million of state and political subdivision securities, $40.8 million of mortgage backed securities, $4.2 million of U.S. government sponsored enterprises securities, $1.5 million of corporate debt securities, and $890,000 of other securities. Principal pay-downs and maturities during the nine months amounted to $65.0 million, of which $12.2 million were mortgage-backed securities, $50.3 million were state and political subdivision securities, and $2.5 million were corporate debt securities.
·
Net loans receivable increased $54.3 million, or 8.7%, to $678.5 million at March 31, 2018 from $624.2 million at June 30, 2017.  The loan growth experienced during the nine-month period consisted primarily of $21.5 million in commercial real estate loans, $17.2 million in commercial loans, $5.0 million in multi-family real estate loans, $8.0 million in residential real estate loans, and $3.1 million in construction loans.  The Company continues to focus on generating commercial real estate and commercial loans within its market area.
·
Total deposits increased to $1.1 billion at March 31, 2018 from $859.5 million at June 30, 2017, an increase of $192.7 million, or 22.4%. This increase was the result of a $146.7 million increase in municipal deposits at Greene County Commercial Bank, primarily from continued growth in new account relationships as well as tax collection. NOW deposits increased $170.7 million, or 43.5%, money market deposits increased $22.6 million, or 18.8%, savings deposits increased $11.2 million, or 5.7% and noninterest-bearing deposits increased $4.8 million, or 5.0% when comparing March 31, 2018 and June 30, 2017. These increases were partially offset by a decrease in certificates of deposit of $16.6 million, or 30.8%, when comparing March 31, 2018 and June 30, 2017. Included within certificates of deposits at June 30, 2017 were $15.0 million, in brokered certificates of deposit. There were no brokered deposits at March 31, 2018.
·
Borrowings amounted to $18.2 million of long-term borrowings, with the Federal Home Loan Bank of New York, at March 31, 2018, compared to $6.9 million of overnight borrowings and $22.7 million of term borrowings at June 30, 2017.
·
Shareholders’ equity increased to $92.7 million at March 31, 2018 from $83.5 million at June 30, 2017, as net income of $10.8 million was partially offset by dividends declared and paid of $1.1 million, and a $907,000 increase in accumulated other comprehensive loss. Other changes in equity, an increase of $150,000, were the result of options exercised with the Company’s 2008 Stock Option Plan.

During the three months ended March 31, 2018, $259,000 in accumulated other comprehensive income was reclassified to retained earnings, which represents the stranded credit resulting from the change in Federal tax rates upon the enactment of the TCJA and its impact on deferred taxes associated with items reported in accumulated other comprehensive income.  This adjustment is the result of the Company adopting the amendments to the Financial Accounting Standards Board’s Accounting Standard Update (ASU 2018-02) “Income Statement-Reporting Comprehensive Income (Topic 220)” issued in February 2018.
 

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, 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 Financial Ratios."
 
(END)
 

Greene County Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
 
   
At or for the Three Months
Ended March 31,
   
At or for the Nine Months
Ended March 31,
 
Dollars in thousands, except share and per share data
 
2018
   
2017
   
2018
   
2017
 
Interest income
 
$
9,876
   
$
8,411
   
$
28,385
   
$
24,709
 
Interest expense
   
1,016
     
784
     
2,895
     
2,264
 
Net interest income
   
8,860
     
7,627
     
25,490
     
22,445
 
Provision for loan losses
   
345
     
343
     
1,044
     
1,472
 
Noninterest income
   
1,859
     
1,582
     
5,486
     
4,743
 
Noninterest expense
   
5,782
     
5,023
     
15,987
     
14,565
 
Income before taxes
   
4,592
     
3,843
     
13,945
     
11,151
 
Tax provision
   
915
     
946
     
3,156
     
2,821
 
Net Income
 
$
3,677
   
$
2,897
   
$
10,789
   
$
8,330
 
                                 
Basic EPS
 
$
0.43
   
$
0.34
   
$
1.27
   
$
0.98
 
Weighted average shares outstanding
   
8,517,614
     
8,502,614
     
8,508,103
     
8,492,501
 
Diluted EPS
 
$
0.43
   
$
0.34
   
$
1.26
   
$
0.98
 
Weighted average diluted shares outstanding
   
8,536,407
     
8,519,376
     
8,533,850
     
8,509,752
 
Dividends declared per share 4
 
$
0.0975
   
$
0.0950
   
$
0.2925
   
$
0.2850
 
                                 
Selected Financial Ratios
                               
Return on average assets1
   
1.32
%
   
1.24
%
   
1.37
%
   
1.23
%
Return on average equity1
   
16.17
%
   
14.56
%
   
16.36
%
   
14.36
%
Net interest rate spread1
   
3.17
%
   
3.26
%
   
3.22
%
   
3.32
%
Net interest margin1
   
3.24
%
   
3.33
%
   
3.29
%
   
3.39
%
Fully taxable-equivalent net interest margin2
   
3.45
%
   
3.58
%
   
3.50
%
   
3.64
%
Efficiency ratio3
   
53.94
%
   
54.54
%
   
51.61
%
   
53.57
%
Non-performing assets to total assets
                   
0.32
%
   
0.40
%
Non-performing loans to net loans
                   
0.52
%
   
0.60
%
Allowance for loan losses to non-performing loans
                   
328.58
%
   
293.81
%
Allowance for loan losses to total loans
                   
1.69
%
   
1.74
%
Shareholders’ equity to total assets
                   
7.89
%
   
8.45
%
Dividend payout ratio4
                   
23.03
%
   
29.08
%
Actual dividends paid to net income5
                   
10.61
%
   
13.35
%
Book value per share
                 
$
10.87
   
$
9.52
 

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 28.1% and 34% for federal income taxes and 3.62% and 3.32% for New York State income taxes for the three and nine months ended March 31, 2018 and 2017, respectively.

Non-GAAP reconciliation – Fully taxable equivalent net interest margin
 
   
For the three months ended March 31,
   
For the nine months ended March 31,
 
(Dollars in thousands)
 
2018
   
2017
   
2018
   
2017
 
Net interest income (GAAP)
 
$
8,860
   
$
7,627
   
$
25,490
   
$
22,445
 
Tax-equivalent adjustment
   
558
     
565
     
1,595
     
1,622
 
Net interest income (fully taxable-equivalent basis)
 
$
9,418
   
$
8,192
   
$
27,085
   
$
24,067
 
                                 
Average interest-earning assets
 
$
1,093,356
   
$
915,483
   
$
1,031,765
   
$
881,924
 
Net interest margin (fully taxable-equivalent basis)
   
3.45
%
   
3.58
%
   
3.50
%
   
3.64
%

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 54.1% of the Company’s shares outstanding.
5 Dividends declared divided by net income.  The MHC waived its right to receive dividends declared during the nine months ended March 31, 2018 and 2017.
 

Greene County Bancorp, Inc.
Consolidated Statements of Financial Condition (Unaudited)
 
   
As of
March 31, 2018
   
As of
June 30, 2017
 
(Dollars In thousands)
           
Assets
           
Total cash and cash equivalents
 
$
74,604
   
$
16,277
 
Long term certificate of deposit
   
2,385
     
2,145
 
Securities- available for sale, at fair value
   
117,627
     
91,483
 
Securities- held to maturity, at amortized cost
   
277,432
     
223,830
 
Federal Home Loan Bank stock, at cost
   
1,485
     
2,131
 
                 
Gross loans receivable
   
689,370
     
634,331
 
Less:  Allowance for loan losses
   
(11,622
)
   
(11,022
)
Unearned origination fees and costs, net
   
747
     
878
 
Net loans receivable
   
678,495
     
624,187
 
                 
Premises and equipment
   
13,361
     
13,615
 
Accrued interest receivable
   
5,079
     
4,033
 
Foreclosed real estate
   
208
     
799
 
Prepaid expenses and other assets
   
3,112
     
3,791
 
Total assets
 
$
1,173,788
   
$
982,291
 
                 
Liabilities and shareholders’ equity
               
Noninterest bearing deposits
 
$
100,729
   
$
95,929
 
Interest bearing deposits
   
951,518
     
763,606
 
Total deposits
   
1,052,247
     
859,535
 
                 
Borrowings from FHLB, short term
   
-
     
6,900
 
Borrowings from FHLB, long term
   
18,150
     
22,650
 
Accrued expenses and other liabilities
   
10,724
     
9,685
 
Total liabilities
   
1,081,121
     
898,770
 
Total shareholders’ equity
   
92,667
     
83,521
 
Total liabilities and shareholders’ equity
 
$
1,173,788
   
$
982,291
 
Common shares outstanding
   
8,526,614
     
8,502,614
 
Treasury shares
   
84,726
     
108,726
 
 
 


The following information was filed by Greene County Bancorp Inc (GCBC) on Tuesday, April 24, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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