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(a)
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Not Applicable.
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(b)
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Not Applicable.
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(c)
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Not Applicable.
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(d)
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Exhibits.
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Exhibit No.
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Description
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·
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Net interest income increased $340,000 to $10.8 million for the six months ended December 31, 2012 compared to $10.4 million for the six months ended December 31, 2011 and increased $147,000 to $5.4 million for the quarter ended December 31, 2012 compared to $5.2 million for the quarter ended December 31, 2011. The increase in average balances of loans and securities, along with a decrease in rates paid on deposit accounts, primarily led to an increase in net interest income when comparing the six months and quarters ended December 31, 2012 and 2011.
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·
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Net interest rate spread decreased 21 basis points to 3.58% for the six months ended December 31, 2012 from 3.79% for the six months ended December 31, 2011, and decreased 29 basis points to 3.47% for the three months ended December 31, 2012 from 3.76% for the three months ended December 31, 2011. Net interest margin decreased 25 basis points to 3.67% for the six months ended December 31, 2012 from 3.92% for the six months ended December 31, 2011, and decreased 33 basis points to 3.55% for the quarter ended December 31, 2012 as compared to 3.88% for the quarter ended December 31, 2011. Despite increased net interest income from increased volume of loans and securities and a lower cost of funds, declines in the yields on interest-earning assets resulted in our net interest spread and net interest margin decreasing when comparing the three and six months ended December 31, 2012 and 2011, respectively. Although the Company has benefited from re-pricing its interest-bearing liabilities in the continuing historically low interest rate environment, the average interest rates earned on our loans and investments have similarly continued to re-price into lower yields.
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·
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The provision for loan losses amounted to $985,000 and $896,000 for the six months ended December 31, 2012 and 2011, respectively, an increase of $89,000 or 9.9%. The provision for loan losses amounted to $541,000 and $422,000 for the quarters ended December 31, 2012 and 2011, respectively. The allowance for loan losses totaled $6.8 million at December 31, 2012 compared to $6.2 million at June 30, 2012 and $5.6 million at December 31, 2011. The level of allowance for loan losses to total loans receivable increased to 1.91% at December 31, 2012 compared to 1.86% at June 30, 2012, and 1.77% at December 31, 2011.
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·
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Net charge-offs amounted to $398,000 and $348,000 for the six months ended December 31, 2012 and 2011, respectively, an increase of $50,000.
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·
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Nonperforming loans amounted to $7.1 million and $7.0 million at December 31, 2012 and June 30, 2012, respectively, an increase of $58,000 or 0.8%. Nonperforming loans remain high compared to historical levels as a result of adverse changes in the economy and local unemployment, which have been compounded by the extended length of time required to complete foreclosures in New York State. At December 31, 2012, nonperforming assets were 1.16% of total assets and nonperforming loans were 2.04% of net loans.
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·
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Noninterest income increased $153,000 and $88,000 when comparing the six months and quarters ended December 31, 2012 and 2011, respectively. Noninterest income amounted to $2.6 million and $1.3 million for the six months and quarter ended December 31, 2012, respectively. These increases were primarily the result of higher service charges on deposit accounts due to growth in the number of deposit accounts, as well as an increase in fees earned through investment services.
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·
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Noninterest expense decreased $7,000 and $22,000 when comparing the six months and quarters ended December 31, 2012 and 2011, respectively. These decreases were primarily due to a decrease in legal and professional fees, equipment and furniture expense, occupancy expense, and other expenses. The decrease in legal and professional fees of $68,000 and $43,000 when comparing the six months and quarters ended December 31, 2012 and 2011, respectively, were the result of lower costs for legal services related to loans in process of foreclosure and consulting services related to the implementation of strategic objectives. The decrease in equipment and furniture expense was the result of lower depreciation as assets previously capitalized have become fully depreciated. The decrease in other expenses was the result of the recognition of a loss on foreclosed assets of $27,700 and $131,500 for the six months ended December 31, 2012 and 2011, respectively. Partially offsetting these decreases were increases in salaries and employee benefits, service and data processing fees, and advertising and promotion. The increase in salaries and employee benefits of $129,000 and $63,000 when comparing the six months and three months ended December 31, 2012 and 2011, respectively, was primarily the result of an increase in the number of employees. Included in the increases in service and data processing fees of $39,000 and $13,000 when comparing the six months and three months ended December 31, 2012 and 2011, respectively, were increased costs associated with the increase in the number of accounts with a debit card.
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·
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Total assets of the Company were $624.5 million at December 31, 2012 as compared to $590.7 million at June 30, 2012, an increase of $33.8 million, or 5.7%.
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·
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Securities available for sale and held to maturity amounted to $245.4 million, or 39.3% of assets, at December 31, 2012 as compared to $233.9 million, or 39.6% of assets, at June 30, 2012, an increase of $11.5 million or 4.9%.
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·
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Net loans grew by $20.7 million or 6.3% to $347.5 million at December 31, 2012 as compared to $326.8 million at June 30, 2012. The loan growth experienced during the six months primarily consisted of $5.5 million in nonresidential real estate loans, $11.5 million in residential mortgage loans, $2.3 million in construction loans, $111,000 in multi-family mortgage loans and $2.0 million in non-mortgage loans, and was partially offset by a $587,000 increase in the allowance for loan loss. The continued low interest rate environment and strong customer satisfaction from personal service continued to enhance loan growth.
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·
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Total deposits increased to $545.7 million at December 31, 2012 from $511.9 million at June 30, 2012, an increase of $33.8 million, or 6.6%. This increase was partially the result of an increase of $13.5 million in balances at the Greene County Commercial Bank due primarily to the annual collection of taxes by several local school districts.
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·
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Borrowings decreased $700,000 from $21.0 million at June 30, 2012 to $20.3 million at December 31, 2012. During the quarter and six months ended December 31, 2012, the Company prepaid $1.0 million in long term borrowings and recognized a prepayment penalty of $43,000.
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·
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Total shareholders’ equity increased $1.9 million to $54.6 million at December 31, 2012, or 8.7% of total assets, from $52.7 million at June 30, 2012 primarily resulting from $3.4 million in net income for the six-month period less the payment of $1.5 million in dividends during the period.
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At or for the Six
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At or for the Three
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|||||||||||||||
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Months Ended December 31,
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Months Ended December 31,
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|||||||||||||||
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2012
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2011
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2012
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2011
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|||||||||||||
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Dollars In thousands,
except share and per share data
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||||||||||||||||
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Interest income
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$ | 12,238 | $ | 12,363 | $ | 6,107 | $ | 6,158 | ||||||||
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Interest expense
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1,476 | 1,941 | 737 | 935 | ||||||||||||
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Net interest income
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10,762 | 10,422 | 5,370 | 5,223 | ||||||||||||
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Provision for loan losses
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985 | 896 | 541 | 422 | ||||||||||||
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Noninterest income
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2,575 | 2,422 | 1,296 | 1,208 | ||||||||||||
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Noninterest expense
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7,419 | 7,426 | 3,746 | 3,768 | ||||||||||||
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Income before taxes
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4,933 | 4,522 | 2,379 | 2,241 | ||||||||||||
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Tax provision
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1,500 | 1,518 | 710 | 746 | ||||||||||||
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Net Income
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$ | 3,433 | $ | 3,004 | $ | 1,669 | $ | 1,495 | ||||||||
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Basic EPS
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$ | 0.82 | $ | 0.72 | $ | 0.40 | $ | 0.36 | ||||||||
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Weighted average
shares outstanding
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4,184,747 | 4,146,965 | 4,185,562 | 4,148,102 | ||||||||||||
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Diluted EPS
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$ | 0.81 | $ | 0.72 | $ | 0.39 | $ | 0.36 | ||||||||
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Weighted average
diluted shares outstanding
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4,223,329 | 4,190,187 | 4,225,746 | 4,190,211 | ||||||||||||
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Dividends declared per share 3
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$ | 0.350 | $ | 0.350 | $ | 0.175 | $ | 0.175 | ||||||||
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Selected Financial Ratios
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||||||||||||||||
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Return on average assets1
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1.13 | % | 1.09 | % | 1.07 | % | 1.07 | % | ||||||||
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Return on average equity1
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12.79 | % | 12.20 | % | 12.30 | % | 11.98 | % | ||||||||
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Net interest rate spread1
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3.58 | % | 3.79 | % | 3.47 | % | 3.76 | % | ||||||||
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Net interest margin1
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3.67 | % | 3.92 | % | 3.55 | % | 3.88 | % | ||||||||
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Efficiency ratio2
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55.63 | % | 57.82 | % | 56.20 | % | 58.59 | % | ||||||||
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Non-performing assets
to total assets
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1.16 | % | 1.35 | % | ||||||||||||
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Non-performing loans
to net loans
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2.04 | % | 2.31 | % | ||||||||||||
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Allowance for loan losses to
non-performing loans
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95.60 | % | 77.83 | % | ||||||||||||
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Allowance for loan losses to
total loans
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1.91 | % | 1.77 | % | ||||||||||||
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Shareholders’ equity to total assets
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8.75 | % | 9.05 | % | ||||||||||||
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Dividend payout ratio3
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42.68 | % | 48.61 | % | ||||||||||||
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Book value per share
|
$ | 13.05 | $ | 12.20 | ||||||||||||
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As of December 31, 2012
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As of June 30, 2012
|
|||||||
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Dollars In thousands
|
||||||||
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Assets
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||||||||
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Total cash and cash equivalents
|
$ | 10,430 | $ | 7,742 | ||||
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Long term certificate of deposit
|
250 | --- | ||||||
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Securities- available for sale, at fair value
|
77,987 | 87,528 | ||||||
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Securities- held to maturity, at amortized cost
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167,449 | 146,389 | ||||||
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Federal Home Loan Bank stock, at cost
|
1,713 | 1,744 | ||||||
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Gross loans receivable
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353,712 | 332,450 | ||||||
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Less: Allowance for loan losses
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(6,764 | ) | (6,177 | ) | ||||
|
Unearned origination fees and costs, net
|
599 | 478 | ||||||
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Net loans receivable
|
347,547 | 326,751 | ||||||
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Premises and equipment
|
14,605 | 14,899 | ||||||
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Accrued interest receivable
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2,747 | 2,688 | ||||||
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Foreclosed real estate
|
140 | 260 | ||||||
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Prepaid expenses and other assets
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1,680 | 2,655 | ||||||
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Total assets
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$ | 624,548 | $ | 590,656 | ||||
|
Liabilities and shareholders’ equity
|
||||||||
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Noninterest bearing deposits
|
$ | 54,298 | $ | 52,783 | ||||
|
Interest bearing deposits
|
491,392 | 459,154 | ||||||
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Total deposits
|
545,690 | 511,937 | ||||||
|
Borrowings from FHLB, short term
|
14,300 | 14,000 | ||||||
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Borrowings from FHLB, long term
|
6,000 | 7,000 | ||||||
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Accrued expenses and other liabilities
|
3,931 | 5,055 | ||||||
|
Total liabilities
|
569,921 | 537,992 | ||||||
|
Total shareholders’ equity
|
54,627 | 52,664 | ||||||
|
Total liabilities and shareholders’ equity
|
$ | 624,548 | $ | 590,656 | ||||
|
Common shares outstanding
|
4,185,671 | 4,182,671 | ||||||
|
Treasury shares
|
119,999 | 122,999 | ||||||