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Date: October 23, 2019
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For Further Information Contact:
Donald E. Gibson
President & CEO
(518) 943-2600
donaldg@tbogc.com
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Michelle M. Plummer, CPA
EVP, COO & CFO
(518) 943-2600
michellep@tbogc.com
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Net interest income increased $843,000 to $10.5 million for the three months ended September 30, 2019 from $9.7 million for the three months ended September 30, 2018. The increase in average
loan and securities balances had the greatest impact on net interest income when comparing the three months ended September 30, 2019 and 2018, which was complemented by an increase in the yield on interest-earning assets during the
September 30, 2019 quarter. Average loan balances increased $79.4 million and the yield on loans increased 10 basis points when comparing the three months ended September 30, 2019 and 2018. Average securities increased $42.7 million
and the yield on such securities increased five basis points when comparing the three months ended September 30, 2019 and 2018. The increase in interest income was partially offset by an increase in interest expense primarily the
result of increases in the rates paid on interest-bearing liabilities, most notably NOW deposit accounts. The average balance of NOW deposits grew by $188.9 million, and the rate paid on these accounts increased by 41 basis points
when comparing the three months ended September 30, 2019 and 2018. This growth in higher costing deposits was the result of promotions within the Company’s newer markets targeting new business, municipal and retail customers.
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Net interest rate spread and margin both decreased when comparing the three months ended September 30, 2019 and 2018. Net interest spread decreased 18 basis points to 3.13% as compared to
3.31% when comparing the three months ended September 30, 2019 and 2018, respectively. Net interest margin decreased 15 basis points to 3.26% for the three months ended September 30, 2019 as compared to 3.41% for the three months
ended September 30, 2018. The higher cost of interest-bearing liabilities, partially offset by growth in average loan and securities balances, led to the decrease in spread and margin when comparing the three months ended September
30, 2019 and 2018.
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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 3.44% and 3.57% for the three months ended September 30, 2019 and 2018, respectively.
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Provision for loan losses amounted to $551,000 and $354,000 for the three months ended September 30, 2019 and 2018, respectively. This increase was due to the growth in gross loans, an
increase in charge-off activity, as well as an increase in loans adversely classified. Loans classified as substandard or special mention totaled $22.7 million at September 30, 2019, compared to $17.1 million at June 30, 2019, an
increase of $5.6 million. During the three months ended September 30, 2019, the Company downgraded a construction loan to special mention as a result of project cost overruns and several delinquent payments. At September 30, 2019,
this loan was performing. Management continues to monitor this loan relationship closely. Reserves on loans classified as substandard or special mention totaled $1.9 million at September 30, 2019 compared to $1.5 million at June 30,
2019, an increase of $362,000. No loans were classified as doubtful or loss at September 30, 2019 or June 30, 2019. Allowance for loan losses to total loans receivable was 1.64% at September 30, 2019, and 1.65% at June 30, 2019.
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Net charge-offs amounted to $307,000 and $70,000 for the three months ended September 30, 2019 and 2018, respectively, an increase of $237,000. This increase in charge-off activity was
primarily within the commercial loan and residential real estate portfolios.
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Nonperforming loans amounted to $3.5 million and $3.6 million at September 30, 2019 and June 30, 2019, respectively. At September 30, 2019 and June 30, 2019, respectively, nonperforming
assets were 0.27% and 0.29% of total assets, and nonperforming loans were 0.44% and 0.46% of net loans. At September 30, 2018, nonperforming assets to total assets were 0.29% and nonperforming loans to net loans were 0.47%.
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Noninterest income increased $214,000, or 10.4%, and totaled $2.3 million and $2.1 million for the three months ended September 30, 2019 and 2018. This increase was 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. Investment services income also increased during the period due to higher sales volume of
investment products.
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Noninterest expense increased $461,000 or 7.7%, to $6.4 million for the three months ended September 30, 2019 as compared to $6.0 million for the three months ended September 30, 2018. This
increase was primarily due to an increase in salaries and employee benefits expenses, resulting from additional staffing for the addition of a new branch located in Woodstock, New York during the three months ended September 30, 2018
and the addition of a new branch located in Kinderhook-Valatie, New York during the three months ended September 30, 2019. As the Company continues to grow, staffing was also increased to support the growth. New positions were added
to several departments including, lending, customer service, municipal banking, corporate cash management, BSA & operational support, and investment center. This increase was partially offset by a decrease in FDIC insurance
premiums. In January 2019, the FDIC provided notification to the Company that a credit in the amount of $177,144 was calculated for The Bank of Greene County, and a credit in the amount of $91,090 was calculated for Greene County
Commercial Bank, based on a change in assessments under FDIC regulations resulting from the Deposit Insurance Fund Reserve Ratio reaching 1.36%. The Deposit Insurance Fund reserve ratio was above 1.38% as of June 30, 2019, and
therefore, the FDIC offset regular deposit insurance assessments with credits on the September 2019 invoice. The Company received a credit totaling $108,000 during the three months ended September 30, 2019. This credit was applied
against FDIC insurance premiums expense.
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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
16.1% for the three months ended September 30, 2019, compared to 18.8% for the three months ended September 30, 2018. The statutory tax rate is 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 benefits derived from premiums paid to the Company’s pooled captive insurance subsidiary to arrive at the effective tax rate.
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Total assets of the Company were $1.4 billion at September 30, 2019 and $1.3 billion at June 30, 2019, an increase of $140.3 million, or 11.0%.
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Securities available-for-sale and held-to-maturity increased $36.9 million, or 8.6%, to $463.8 million at September 30, 2019 as compared to $426.9 million at June 30, 2019. This increase was
the result of an increase in municipal deposits and the need to collateralize the uninsured portion of these deposits. Securities purchases totaled $90.3 million during the three months ended September 30, 2019 and consisted of $64.3
million of state and political subdivision securities and $22.1 million of mortgage-backed securities, $3.0 million of corporate securities, and $875,000 of other securities. Principal pay-downs and maturities during the three months
amounted to $52.9 million, of which $8.6 million were mortgage-backed securities, $36.1 million were state and political subdivision securities, and $8.2 million were U.S. government sponsored enterprises.
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Net loans receivable increased $19.8 million, or 2.5%, to $805.5 million at September 30, 2019 from $785.7 million at June 30, 2019. The loan growth experienced during the three months
consisted primarily of $12.4 million in commercial construction loans, $2.5 million in commercial real estate loans, $4.1 million in commercial loans, $915,000 in residential construction and land loans, and $429,000 in multi-family
real estate loans. This growth was partially offset by a $557,000 decrease in residential real estate loans, and $244,000 increase in allowance for loan losses.
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Deposits totaled $1.3 billion at September 30, 2019 and $1.1 billion at June 30, 2019, an increase of $142.6 million, or 12.7%. Noninterest-bearing deposits increased $8.0 million, or 7.4%,
and NOW deposits increased $144.6 million, or 22.3%, and certificates of deposits increased $401,000, when comparing September 30, 2019 and June 30, 2019. These increases were offset by a decrease in money market deposits of $4.1
million, or 3.6%, and a decrease in savings deposits of $6.4 million, or 3.0%, when comparing September 30, 2019 and June 30, 2019. Typically deposits increase during the first quarter of the Company’s fiscal year as a result of an
increase in municipal deposits at Greene County Commercial Bank, primarily from tax collection, and new account relationships.
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Borrowings for the Company amounted to $13.6 million of term borrowings, with the Federal Home Loan Bank of New York, at September 30, 2019, compared to $8.0 million of overnight borrowings
and $13.6 million of term borrowings, with the Federal Home Loan Bank of New York, at June 30, 2019.
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Shareholders’ equity increased to $116.5 million at September 30, 2019 from $112.4 million at June 30, 2019, resulting primarily from net income of $4.9 million, partially offset by dividends
declared and paid of $432,000 and an increase in other accumulated comprehensive loss of $271,000. On September 17, 2019, the Board of Directors of the Company adopted a stock repurchase program. Under the repurchase program, the
Company may repurchase up to 200,000 shares of its common stock. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders,
subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. At September 30, 2019, no shares have been repurchased.
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At or for the three months
Ended September 30,
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(Dollars in thousands, except per share data)
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2019
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2018
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||||||
Interest income
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$
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12,608
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$
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10,997
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Interest expense
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2,108
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1,340
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Net interest income
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10,500
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9,657
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Provision for loan losses
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551
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354
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Noninterest income
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2,266
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2,052
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Noninterest expense
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6,422
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5,961
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Income before taxes
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5,793
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5,394
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Tax provision
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930
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1,014
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Net Income
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$
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4,863
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$
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4,380
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Basic EPS
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$
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0.57
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$
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0.51
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Weighted average shares outstanding
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8,537,814
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8,537,814
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Diluted EPS
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$
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0.57
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$
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0.51
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Weighted average diluted shares outstanding
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8,537,814
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8,537,814
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Dividends declared per share
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$
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0.11
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$
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0.10
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Selected Financial Ratios
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Return on average assets1
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1.49
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%
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1.52
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%
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Return on average equity1
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17.00
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17.92
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Net interest rate spread1
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3.13
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3.31
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Net interest margin1
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3.26
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3.41
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Fully taxable-equivalent net interest margin2
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3.44
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3.57
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Efficiency ratio3
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50.31
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50.91
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Non-performing assets to total assets
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0.27
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0.29
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Non-performing loans to net loans
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0.44
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0.47
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Allowance for loan losses to non-performing loans
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381.71
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363.39
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Allowance for loan losses to total loans
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1.64
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1.67
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Shareholders’ equity to total assets
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8.27
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8.39
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Dividend payout ratio4
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19.30
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19.61
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Actual dividends paid to net income5
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8.88
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19.50
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Book value per share
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$
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13.65
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$
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11.67
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For the three months ended September 30,
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(Dollars in thousands)
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2019
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2018
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Net interest income (GAAP)
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$
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10,500
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$
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9,657
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Tax-equivalent adjustment
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571
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473
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Net interest income (fully taxable-equivalent basis)
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$
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11,071
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$
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10,130
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Average interest-earning assets
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$
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1,286,966
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$
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1,134,102
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Net interest margin (fully taxable-equivalent basis)
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3.44
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%
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3.57
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%
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At
September 30, 2019
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At
June 30, 2019
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(Dollars In thousands, except share data)
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Assets
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||||||||
Total cash and cash equivalents
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$
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110,852
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$
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29,538
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Long term certificate of deposit
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3,626
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2,875
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Securities- available for sale, at fair value
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159,263
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122,728
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Securities- held to maturity, at amortized cost
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304,582
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304,208
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Equity securities, at fair value
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251
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253
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Federal Home Loan Bank stock, at cost
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1,399
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1,759
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Gross loans receivable
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818,176
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798,105
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Less: Allowance for loan losses
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(13,444
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)
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(13,200
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)
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Unearned origination fees and costs, net
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807
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833
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Net loans receivable
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805,539
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785,738
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Premises and equipment
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13,336
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13,255
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Accrued interest receivable
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5,970
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5,853
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Foreclosed real estate
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303
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53
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Prepaid expenses and other assets
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4,599
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3,202
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Total assets
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$
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1,409,720
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$
|
1,269,462
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Liabilities and shareholders’ equity
|
||||||||
Noninterest bearing deposits
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$
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115,474
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$
|
107,469
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Interest bearing deposits
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1,147,736
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1,013,100
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Total deposits
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1,263,210
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1,120,569
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Borrowings from FHLB, short term
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-
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8,000
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Borrowings from FHLB, long term
|
13,600
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13,600
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Accrued expenses and other liabilities
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16,381
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14,924
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Total liabilities
|
1,293,191
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1,157,093
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Total shareholders’ equity
|
116,529
|
112,369
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Total liabilities and shareholders’ equity
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$
|
1,409,720
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$
|
1,269,462
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Common shares outstanding
|
8,537,814
|
8,537,814
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Treasury shares
|
73,526
|
73,526
|
Please wait while we load the requested 10-Q report or click the link below:
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Compare this 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were removed , added and changed by Greene County Bancorp Inc.
Greene County Bancorp Inc's Definitive Proxy Statement (Form DEF 14A) filed after their 2019 10-K Annual Report includes:
Rating
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The allowance for loan losses is increased by a provision for loan losses (which results in a charge to expense) and recoveries of loans previously charged off and is reduced by charge-offs.
To operate successfully, the Company must manage various types of risk, including but not limited to, market or interest rate risk, credit risk, transaction risk, liquidity risk, security risk, strategic risk, reputation risk and compliance risk.
A significant decline in home values, however, in the Company's markets could have a negative effect on the consolidated results of operations, as any such decline in home values would likely lead to a decrease in residential real estate loans and new home equity loan originations and increased delinquencies and defaults in both the consumer home equity loan and the residential real estate loan portfolios and result in increased losses in these portfolios.
ALLOWANCE FOR LOAN LOSSES The allowance for loan losses is established through a provision for loan losses based on management's evaluation of the risk inherent in the loan portfolio, the composition of the loan portfolio, specific impaired loans and current economic conditions.
Under the repurchase program, the Company may repurchase up to 200,000 shares of its common stock.
As illustrated in the rate/volume...Read more
The increase in average loan...Read more
Investment services income also increased...Read more
CASH AND CASH EQUIVALENTS Total...Read more
Factors that could affect actual...Read more
Interest expense also increased $91,000...Read more
The $130.6 million of irrevocable...Read more
Scheduled maturities of long-term borrowings...Read more
Net interest margin decreased 15...Read more
Increases in the rate paid...Read more
The statutory tax rate is...Read more
At September 30, 2019, 59.7%...Read more
This increase was primarily due...Read more
This credit was applied against...Read more
Repurchases will be made at...Read more
LOANS Net loans receivable increased...Read more
The maximum amount of funding...Read more
There were no short-term or...Read more
Generally, management places loans on...Read more
We believe that the continued...Read more
The effective tax rate was...Read more
These factors should be considered...Read more
Average assets increased $155.3 million,...Read more
Financial institutions like the Company...Read more
Comparison of Financial Condition at...Read more
Greene County Bancorp, Inc.'s primary...Read more
The $13.6 million consisted of...Read more
Analysis of Nonaccrual Loans and...Read more
SECURITIES Securities available-for-sale and held-to-maturity...Read more
This adjustment is considered helpful...Read more
The loan growth experienced during...Read more
NONINTEREST INCOME Noninterest income increased...Read more
Material Contracts, Statements, Certifications & more
Greene County Bancorp Inc provided additional information to their SEC Filing as exhibits
Ticker: GCBC
CIK: 1070524
Form Type: 10-Q Quarterly Report
Accession Number: 0001140361-19-020109
Submitted to the SEC: Fri Nov 08 2019 6:56:52 AM EST
Accepted by the SEC: Fri Nov 08 2019
Period: Monday, September 30, 2019
Industry: Savings Institutions Not Federally Chartered