Greene County Bancorp Inc (GCBC) SEC Filing 10-Q Quarterly Report for the period ending Thursday, September 30, 2021

FOR RELEASE

Greene County Bancorp, Inc. Reports 45% Increase in Net Income for the Quarter

Ended September 30, 2021, and is Selected for the Piper Sandler Sm-All Stars Class of 2021

Catskill, N.Y. – October 22, 2021- 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 quarter ended September 30, 2021, which is the first quarter of the Company’s fiscal year ending June 30, 2022.  Net income for the three months ended September 30, 2021 was $7.1 million, or $0.84 per basic and diluted share, as compared to $4.9 million, or $0.57 per basic and diluted share, for the quarter ended September 30, 2020.  Net income increased $2.2 million, or 45.9%, when comparing the quarters ended September 30, 2021 and 2020.

Donald Gibson, President & CEO stated: “I am proud of our strong performance in what has continued to be a very difficult rate environment. I am also proud to be recognized by Piper Sandler, as a member of their Sm-all Stars Class of 2021, the Greene County Bancorp, Inc. is the only bank in the country to have achieved five consecutive years on their prestigious list. In order to earn Sm-All Star status, companies needed to have a market cap below $2.5 billion, and clear numerous hurdles related to growth, profitability, credit quality, and capital strength. Piper Sandler’s objective is to identify the top performing small-cap banks and thrifts in the country.”

Total consolidated assets for the Company were $2.3 billion at September 30, 2021, primarily consisting of $1.1 billion of net loans and $988.3 million of total securities available-for-sale and held-to-maturity. Consolidated deposits totaled $2.1 billion at September 30, 2021, consisting of retail, business and municipal banking relationships.

The Company continues to closely monitor the impact of the coronavirus pandemic (“COVID-19”) on our business and results of operations.  The Company continues to maintain strong asset quality, capital and liquidity and believes it is still well positioned to withstand the continued financial impact from the pandemic.

Depending upon the duration of the COVID-19 pandemic and the adequacy of strategies in place by local and federal governments, borrowers may not have the ability to repay their debts which may ultimately result in losses to the Company.  Management continues to closely monitor credit relationships, particularly those on payment deferral or adversely classified. As discussed under Asset Quality and Loan Loss Provision below, the Company has maintained its allowance for loan losses during the three months ended September 30, 2021 and believes that total reserves are adequate.

Selected highlights for the three months ended September 30, 2021 are as follows:

Average loan balances increased $74.8 million and the yield on loans increased 41 basis points when comparing the three months ended September 30, 2021 and 2020.  Included in interest-earning assets at September 30, 2021 were $37.4 million of SBA Paycheck Protection Program (PPP) loans at a rate of 1.00%.  The increase in yields on loans was further supported by $1.5 million in SBA PPP fee income for the three months ended September 30, 2021, which was realized through a deferred origination fee and recognized within interest income. Average securities increased $304.6 million, and the yield on such securities decreased 47 basis points when comparing the three months ended September 30, 2021 and 2020.  Average interest-bearing bank balances and federal funds increased $81.4 million, and the yield increased three basis points when comparing the three months ended September 30, 2021 and 2020.

Cost of interest-bearing liabilities decreased 17 basis points when comparing the three months ended September 30, 2021 and 2020.  The cost of NOW deposits decreased 23 basis points, the cost of savings and money market deposits decreased 14 basis points, and the cost of certificates of deposit decreased 33 basis points when comparing the three months ended September 30, 2021 and 2020.  The decrease in cost of interest-bearing liabilities was offset by growth in the average balance of interest-bearing liabilities of $446.9 million, most notably due to an increase in NOW deposits of $370.7 million, an increase in average savings and money market deposits of $69.2 million, and an increase in borrowings of $7.6 million when comparing the three months ended September 30, 2021 and 2020. The cost of borrowings increased 265 basis points when comparing the three months ended September 30, 2021 and 2020.  The increase in cost of borrowings was due to the Company entering into Subordinated Note Purchase Agreements in September 2021 and 2020.  Yields on interest-earning assets and costs of interest-bearing deposits continue to decline as a result of the current low interest rate environment, and the Federal Reserve Board stance to continue the low interest rate environment to support an economic recovery as the pandemic crisis is contained.

Greene County Bancorp, Inc. is the direct and indirect holding company, 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 Region and Capital District Region 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, financial and regulatory changes related to the COVID-19 pandemic, 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.  The Company has also provided in this news release supplemental disclosures for the calculation of the allowance for loan loss to gross loans, adjusted to exclude SBA Paycheck Protection Program loans. 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."

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Greene County Bancorp, Inc.

Consolidated Statements of Income, and Selected Financial Ratios (Unaudited)

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 21% for federal income taxes for the periods ended September 30, 2021 and 2020, 4.44% and 3.98% for New York State income taxes for the periods ended September 30, 2021 and 2020, respectively. The following table summarizes the adjustments made to arrive at the fully taxable-equivalent net interest margins.

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 Company’s majority shareholder, owning 54.1% of the shares outstanding.

⁵ Dividends declared divided by net income.  The MHC waived its right to receive dividends declared during the three months ended March 31, 2020; June 30, 2020; September 30, 2020; December 31, 2020; June 30, 2021; and September 30, 2021. Dividends declared during the three months ended December 31, 2019 and March 31, 2021 were paid to the MHC. The MHC’s ability to waive the receipt of dividends is dependent upon annual approval of its members as well as receiving the non-objection of the Federal Reserve Board.

The above information is preliminary and based on the Company’s data available at the time of presentation.

Greene County Bancorp, Inc.

Consolidated Statements of Financial Condition (Unaudited)

The above information is preliminary and based on the Company’s data available at the time of presentation.

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