Highlights:
- Net Income:
$21.2 million for the nine months endedMarch 31, 2022 - Total Assets:
$2.5 billion atMarch 31, 2022 - Return on Average Assets: 1.21% for the nine months ended
March 31, 2022 - Return on Average Equity: 18.09% for the nine months ended
March 31, 2022
Total consolidated assets for the Company were
Selected highlights for the three and nine months ended
Net Interest Income and Margin
- Net interest income increased
$517,000 to$14.1 million for the three months endedMarch 31, 2022 from$13.6 million for the three months endedMarch 31, 2021 . Net interest income increased$3.9 million to$42.9 million for the nine months endedMarch 31, 2022 from$39.0 million for the nine months endedMarch 31, 2021 . The increase in net interest income was primarily the result of the growth in the average balance of interest-earning assets, which increased$369.6 million and$420.4 million when comparing the three and nine months endedMarch 31, 2022 and 2021, offset by a decrease in the average interest rate on interest-earning assets, which decreased 39 and 36 basis points when comparing the three and nine months endedMarch 31, 2022 and 2021, respectively.
Average loan balances increased$88.6 million and$81.6 million and the yield on loans decreased 45 and 10 basis points for the three and nine months endedMarch 31, 2022 and 2021, respectively. Included in interest-earning assets atMarch 31, 2022 , are$6.7 million of SBA Paycheck Protection Program (PPP) loans at a rate of 1.00%. The yield on loans was supported by$366,000 and$2.8 million in SBA PPP fee income for the three and nine months endedMarch 31, 2022 , which was realized through a deferred origination fee and recognized within interest income. Average securities increased$320.4 million and$315.7 million , and the yield on such securities decreased 17 and 31 basis points when comparing the three and nine months endedMarch 31, 2022 and 2021, as the yield on securities purchased are lower than securities maturing during the period. Average interest-bearing bank balances and federal funds decreased$39.6 million and increased$23.2 million , and the yields increased 6 and 5 basis points when comparing the three and nine months endedMarch 31, 2022 and 2021, respectively.
Cost of interest-bearing liabilities decreased 5 and 9 basis points when comparing the three and nine months endedMarch 31, 2022 and 2021, respectively. The cost of NOW deposits decreased 7 and 13 basis points, the cost of savings and money market deposits decreased 8 and 9 basis points, and the cost of certificates of deposit decreased 22 and 27 basis points when comparing the three and nine months endingMarch 31, 2022 , and 2021, respectively. The decrease in cost of interest-bearing liabilities was offset by growth in the average balance of interest-bearing liabilities of$347.0 million and$404.5 million when comparing the three and nine months endedMarch 31, 2022 and 2021, respectively. The increase resulted most notably due to an increase in average NOW deposits of$259.4 million and$319.5 million , an increase in average savings and money market deposits of$59.7 million and$65.8 million , and an increase in average borrowings of$28.1 million and$19.6 million when comparing the three and nine months endedMarch 31, 2022 and 2021, respectively, due to the continued focus on new municipal and large commercial cash management customers. The cost on borrowings decreased 110 and increased 21 basis points when comparing the three and nine months endedMarch 31, 2022 and 2021. The change in cost of borrowings was due to the Company entering into Subordinated Note Purchase Agreements inSeptember 2021 andSeptember 2020 . Yields on interest-earning assets and costs of interest-bearing deposits continued to decline during the quarter endedMarch 31, 2021 , but is expected to stabilize as theFederal Reserve Board started to raise rates during the current quarter.
- Net interest rate spread and margin both decreased when comparing the three and nine months ended
March 31, 2022 and 2021. Net interest rate spread decreased 34 basis points to 2.38% for the three months endedMarch 31, 2022 compared to 2.72% for the three months endedMarch 31, 2021 . Net interest rate spread decreased 27 basis points to 2.51% for the nine months endedMarch 31, 2022 compared to 2.78% for the nine months endedMarch 31, 2021 . Net interest margin decreased 35 basis points and 30 basis points to 2.41% and 2.54%, respectively, for the three and nine months endedMarch 31, 2022 compared to 2.76% and 2.84%, respectively, for the three and nine months endedMarch 31, 2021 . Decreases in net interest rate spread and net interest margin resulted primarily from lower-yielding securities and loans offset by lower rates on deposits as well as growth in loan and securities balances. - 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 2.56% and 2.91% for the three months endedMarch 31, 2022 and 2021, respectively, and was 2.69% and 3.00% for the nine months endedMarch 31, 2022 and 2021, respectively.
Asset Quality and Loan Loss Provision
- Provision for loan losses amounted to
$163,000 and$1.4 million for the three months endedMarch 31, 2022 and 2021, and to$2.4 million and$3.9 million for the nine months endedMarch 31, 2022 and 2021, respectively. The provision for loan losses for the three months endedMarch 31, 2021 and for the nine months endedMarch 31, 2022 and 2021 was due to the impact of the COVID-19 pandemic as well as growth in gross loans and an increase in loans adversely classified. The Company instituted a loan deferral program in response to the COVID-19 pandemic whereby deferral of principal and/or interest payments have been provided and correspond to the length of the National Emergency as defined under the CARES Act and extended under the Consolidated Appropriations Act which was signed into law onDecember 27, 2020 . AtMarch 31, 2022 , the Company had zero loans on payment deferral compared to eight loans aggregating$8.0 million as ofJune 30, 2021 . Loans classified as substandard or special mention totaled$50.0 million atMarch 31, 2022 , compared to$49.7 million atJune 30, 2021 , an increase of$300,000 , and compared to$43.0 million atMarch 31, 2021 , an increase of$7.0 million . Loans classified as substandard or special mention slightly increased as compared toJune 30, 2021 but remained elevated compared toMarch 31, 2021 , due to insufficient cash flows and revenues related to the COVID-19 pandemic. As a result, reserves on loans classified as substandard or special mention totaled$9.6 million atMarch 31, 2022 compared to$7.8 million atJune 30, 2021 , an increase of$1.8 million . No loans were classified as doubtful or loss atMarch 31, 2022 orJune 30, 2021 . Allowance for loan losses to total loans receivable was 1.88% atMarch 31, 2022 compared to 1.77% atJune 30, 2021 . Total loans receivable included$6.7 million and$67.4 million of SBA Paycheck Protection Program (PPP) loans atMarch 31, 2022 andJune 30, 2021 , respectively. Excluding these SBA guaranteed loans, the allowance for loan losses to total loans receivable would have been 1.89% atMarch 31, 2022 andJune 30, 2021 , respectively. - Net charge-offs amounted to
$108,000 and$36,000 for the three months endedMarch 31, 2022 and 2021, respectively, an increase of$72,000 . Net charge-offs totaled$360,000 and$662,000 for the nine months endedMarch 31, 2022 and 2021, respectively. The primary net charge off activity was a commercial loan charge off that occurred during the quarter endedDecember 31, 2020 . - Nonperforming loans amounted to
$3.9 million and$2.3 million atMarch 31, 2022 andJune 30, 2021 , respectively. The increase in nonperforming loans during the period was primarily due to$2.6 million of loans placed into nonperforming status due to delinquency,$920,000 in loan repayments, and$134,000 in charge-offs. AtMarch 31, 2022 nonperforming assets were 0.16% of total assets compared to 0.11% atJune 30, 2021 . Nonperforming loans were 0.34% and 0.21% of net loans atMarch 31, 2022 andJune 30, 2021 , respectively.
Noninterest Income and Noninterest Expense
- Noninterest income increased
$544,000 , or 23.0%, to$2.9 million for the three months endedMarch 31, 2022 compared to$2.4 million for the three months endedMarch 31, 2021 . Noninterest income increased$2.2 million , or 32.8%, to$9.1 million for the nine months endedMarch 31, 2022 compared to$6.8 million for the nine months endedMarch 31, 2021 . The increase was primarily due to an increase in debit card fees resulting from continued growth in the number of checking accounts with debit cards, the income from bank owned life insurance, and increases in service charges on deposit accounts. - Noninterest expense decreased
$53,000 , or 0.6%, to$8.3 million for the three months endedMarch 31, 2022 compared to$8.4 million for the three months endedMarch 31, 2021 . Noninterest expense increased$1.6 million , or 6.8%, to$24.6 million for the nine months endedMarch 31, 2022 , compared to$23.0 million for the nine months endedMarch 31, 2021 . The increase in noninterest expense during the nine months endedMarch 31, 2022 was primarily due to an increase in salaries and employee benefits expense resulting from creating new positions during the previous fiscal year. The new positions were required to support growth in the bank’s lending department, customer service center and finance department. There was also an increase in computer software and professional fees during the current period.
Income Taxes
- Provision for income taxes reflects the expected tax associated with the pre-tax income generated for the given year and certain regulatory requirements. The effective tax rate was 15.6% and 15.2% for the three and nine months ended
March 31, 2022 and 14.2% and 13.4% for the three and nine months endedMarch 31, 2021 , respectively. 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, income received on the bank owned life insurance, 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. The increase in the current quarter was attributable to the increase in income before taxes forMarch 31, 2022 compared toMarch 31, 2021 .
Balance Sheet Summary
- Total assets of the Company were
$2.5 billion atMarch 31, 2022 and$2.2 billion atJune 30, 2021 , an increase of$321.4 million , or 14.6%. - Securities available-for-sale and held-to-maturity increased
$253.4 million , or 28.5%, to$1.1 billion atMarch 31, 2022 as compared to$887.8 million atJune 30, 2021 . This increase was the result of utilizing excess cash on hand due to an increase in deposits. Securities purchases totaled$510.5 million during the nine months endedMarch 31, 2022 and consisted of$360.3 million of state and political subdivision securities,$106.1 million of mortgage-backed securities,$22.9 million of corporate securities,$18.2 million ofUS Treasury securities, and$3.0 million of collateralized mortgage obligations. Principal pay-downs and maturities during the nine months amounted to$237.9 million , primarily consisting of$32.4 million of mortgage-backed securities,$203.8 million of state and political subdivision securities, and$1.7 million of collateralized mortgage obligations. - Net loans receivable increased
$47.6 million , or 4.4%, to$1.1 billion atMarch 31, 2022 from$1.1 billion atJune 30, 2021 . The loan growth experienced during the nine months consisted primarily of$62.7 million in commercial real estate loans,$14.5 million in commercial construction loans,$17.0 million in residential real estate loans,$3.8 million in residential construction,$9.1 million in multi-family loans, and a$2.6 million net decrease in deferred fees due to the forgiveness of SBA PPP loans. This growth was partially offset by a$60.0 million decrease in commercial loans, driven by the decrease in SBA PPP loans, and a$2.1 million dollar increase in allowance for loan losses. SBA PPP loans decreased$60.7 million to$6.7 million atMarch 31, 2022 from$67.4 million atJune 30, 2021 , due to the receipt of forgiveness proceeds. - Deposits totaled
$2.3 billion atMarch 31, 2022 and$2.0 billion atJune 30, 2021 , an increase of$286.8 million , or 14.3%. Noninterest-bearing deposits increased$13.9 million , or 8.0%, NOW deposits increased$228.8 million , or 17.0%, savings deposits increased$31.9 million , or 10.6%, and money market deposits increased 12.8 million, or 8.7% when comparingMarch 31, 2022 andJune 30, 2021 . These increases were offset by a decrease in certificates of deposits of$693,000 , or 2.0%, when comparingMarch 31, 2022 andJune 30, 2021 . Deposits continued to increase during the nine months endedMarch 31, 2022 as a result of an increase in new account relationships, including new corporate cash management deposit relationships, and an increase in municipal deposits atGreene County Commercial Bank , primarily fromNew York State funding and tax collection. - Borrowings of the Company amounted to
$49.3 million atMarch 31, 2022 compared to$22.6 million atJune 30, 2021 , an increase of$26.7 million . AtMarch 31, 2022 , borrowings consisted of$49.3 million of Fixed-to-Floating Rate Subordinated Notes. During the nine months endedMarch 31, 2022 , the Company repaid$3.0 million of short-term borrowings withAtlantic Central Bankers Bank . The Company entered into Subordinated Note Purchase Agreements onSeptember 15, 2021 , issued at 3.00% Fixed-to-Floating Rate, dueSeptember 15, 2031 , in the aggregate principal amount of$30.0 million . These notes are callable onSeptember 15, 2026 . - Shareholders’ equity increased to
$156.9 million atMarch 31, 2022 from$149.6 million atJune 30, 2021 , resulting primarily from net income of$21.2 million , partially offset by dividends declared and paid of$1.5 million and an increase in other accumulated comprehensive loss of$12.3 million .
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, 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. The extent to which the COVID-19 pandemic impacts the Company, results of operations and the Company’s customers will depend on future developments, which are uncertain and unknown, including the duration of the pandemic, and variants of COVID-19.
In addition to presenting information in conformity with accounting principles generally accepted in
Consolidated Statements of Income, and Selected Financial Ratios (Unaudited) | ||||||||||||
At or for the Three Months | At or for the Nine Months | |||||||||||
Ended | Ended | |||||||||||
Dollars in thousands, except share and per share data | 2022 | 2021 | 2022 | 2021 | ||||||||
Interest income | $ | 15,305 | $ | 14,788 | $ | 46,729 | $ | 43,075 | ||||
Interest expense | 1,218 | 1,218 | 3,790 | 4,080 | ||||||||
Net interest income | 14,087 | 13,570 | 42,939 | 38,995 | ||||||||
Provision for loan losses | 163 | 1,434 | 2,431 | 3,939 | ||||||||
Noninterest income | 2,905 | 2,361 | 9,072 | 6,833 | ||||||||
Noninterest expense | 8,314 | 8,367 | 24,612 | 23,040 | ||||||||
Income before taxes | 8,515 | 6,130 | 24,968 | 18,849 | ||||||||
Tax provision | 1,327 | 872 | 3,789 | 2,521 | ||||||||
Net income | $ | 7,188 | $ | 5,258 | $ | 21,179 | $ | 16,328 | ||||
Basic and diluted EPS | $ | 0.84 | $ | 0.62 | $ | 2.49 | $ | 1.92 | ||||
Weighted average shares outstanding | 8,513,414 | 8,513,414 | 8,513,414 | 8,513,414 | ||||||||
Dividends declared per share4 | $ | 0.13 | $ | 0.12 | $ | 0.39 | $ | 0.36 | ||||
Selected Financial Ratios | ||||||||||||
Return on average assets1 | 1.19 | % | 1.04 | % | 1.21 | % | 1.17 | % | ||||
Return on average equity1 | 18.10 | % | 15.13 | % | 18.09 | % | 16.12 | % | ||||
Net interest rate spread1 | 2.38 | % | 2.72 | % | 2.51 | % | 2.78 | % | ||||
Net interest margin1 | 2.41 | % | 2.76 | % | 2.54 | % | 2.84 | % | ||||
Fully taxable-equivalent net interest margin2 | 2.56 | % | 2.91 | % | 2.69 | % | 3.00 | % | ||||
Efficiency ratio3 | 48.93 | % | 52.52 | % | 47.32 | % | 50.27 | % | ||||
Non-performing assets to total assets | 0.16 | % | 0.13 | % | ||||||||
Non-performing loans to net loans | 0.34 | % | 0.25 | % | ||||||||
Allowance for loan losses to non-performing loans | 562.46 | % | 737.73 | % | ||||||||
Allowance for loan losses to total loans | 1.88 | % | 1.80 | % | ||||||||
Shareholders’ equity to total assets | 6.22 | % | 6.49 | % | ||||||||
Dividend payout ratio4 | 15.66 | % | 18.75 | % | ||||||||
Actual dividends paid to net income5 | 7.21 | % | 12.02 | % | ||||||||
Book value per share | $ | 18.43 | $ | 16.34 |
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
For the three months ended | For the nine months ended | |||||||||||
(Dollars in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||
Net interest income (GAAP) | $ | 14,087 | $ | 13,570 | $ | 42,939 | $ | 38,995 | ||||
Tax-equivalent adjustment | 865 | 751 | 2,440 | 2,207 | ||||||||
Net interest income (fully taxable-equivalent basis) | $ | 14,952 | $ | 14,321 | $ | 45,379 | $ | 41,202 | ||||
Average interest-earning assets | $ | 2,336,019 | $ | 1,966,451 | $ | 2,252,913 | $ | 1,832,465 | ||||
Net interest margin (fully taxable-equivalent basis) | 2.56 | % | 2.91 | % | 2.69 | % | 3.00 | % |
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
5 Dividends declared divided by net income. The MHC waived its right to receive dividends declared during the three months ended;
The above information is preliminary and based on the Company’s data available at the time of presentation.
Consolidated Statements of Financial Condition (Unaudited) | |||||||
At | At | ||||||
(Dollars In thousands, except share data) | |||||||
Assets | |||||||
Total cash and cash equivalents | $ | 150,615 | $ | 149,775 | |||
Long term certificate of deposit | 4,112 | 4,553 | |||||
Securities- available for sale, at fair value | 411,442 | 390,890 | |||||
Securities- held to maturity, at amortized cost | 729,739 | 496,914 | |||||
Equity securities, at fair value | 296 | 307 | |||||
1,091 | 1,091 | ||||||
Gross loans receivable | 1,155,399 | 1,108,408 | |||||
Less: Allowance for loan losses | (21,739 | ) | (19,668 | ) | |||
Unearned origination fees and costs, net | (140 | ) | (2,793 | ) | |||
Net loans receivable | 1,133,520 | 1,085,947 | |||||
Premises and equipment | 14,273 | 14,137 | |||||
Bank owned life insurance | 53,364 | 40,425 | |||||
Accrued interest receivable | 9,495 | 7,781 | |||||
Foreclosed real estate | 68 | 64 | |||||
Prepaid expenses and other assets | 13,674 | 8,451 | |||||
Total assets | $ | 2,521,689 | $ | 2,200,335 | |||
Liabilities and shareholders’ equity | |||||||
Noninterest bearing deposits | $ | 188,043 | $ | 174,114 | |||
Interest bearing deposits | 2,103,827 | 1,830,994 | |||||
Total deposits | 2,291,870 | 2,005,108 | |||||
Borrowings from other banks, short-term | - | 3,000 | |||||
Subordinated notes payable | 49,263 | 19,644 | |||||
Accrued expenses and other liabilities | 23,624 | 22,999 | |||||
Total liabilities | 2,364,757 | 2,050,751 | |||||
Total shareholders’ equity | 156,932 | 149,584 | |||||
Total liabilities and shareholders’ equity | $ | 2,521,689 | $ | 2,200,335 | |||
Common shares outstanding | 8,513,414 | 8,513,414 | |||||
97,926 | 97,926 |
The above information is preliminary and based on the Company’s data available at the time of presentation.
For Further Information Contact:
President & CEO
(518) 943-2600
donaldg@tbogc.com
SEVP, COO & CFO
(518) 943-2600
michellep@tbogc.com
Source:
2022 GlobeNewswire, Inc., source