| · | Net interest income increased $1.3 million to $12.8 million for the six months ended December 31, 2015 from $11.5 million for the six months ended December 31, 2014. Net interest income increased $666,000 to $6.5 million for the three months ended December 31, 2015 from $5.8 million for the three months ended December 31, 2014. These increases in net interest income were primarily the result of the growth in the average interest-earning asset balances. |
| · | Net interest spread and margin increased one basis point to 3.38% and 3.45%, respectively, for the six months ended December 31, 2015, compared to 3.37% and 3.44%, respectively, for the six months ended December 31, 2014. Net interest spread and margin increased two basis points to 3.38% and 3.45%, respectively, for the three months ended December 31, 2015, compared to 3.36% and 3.43%, respectively, for the three months ended December 31, 2014. |
| · | 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 3.69% and 3.70% for the six and three months ended December 31, 2015, compared to 3.66% and 3.65% for the six and three months ended December 31, 2014. |
| · | The provision for loan losses amounted to $717,000 and $716,000 for the six months ended December 31, 2015 and 2014, respectively. The provision for loan losses amounted to $343,000 and $305,000 for the three months ended December 31, 2015 and 2014, respectively. Allowance for loan losses to total loans receivable decreased to 1.77% as of December 31, 2015 as compared to 1.81% as of June 30, 2015. |
| · | Net charge-offs amounted to $248,000 and $339,000 for the six months ended December 31, 2015 and 2014, respectively, and amounted to $198,000 and $229,000 for the three months ended December 31, 2015 and 2014, respectively. |
| · | Nonperforming loans amounted to $3.7 million and $4.7 million at December 31, 2015 and June 30, 2015, respectively. At December 31, 2015, nonperforming assets were 0.50% of total assets and nonperforming loans were 0.77% of net loans. |
| · | Noninterest income increased $115,000, or 4.0%, to $3.0 million for the six months ended December 31, 2015 as compared to $2.9 million for the six months ended December 31, 2014. Noninterest income increased $138,000, or 9.6%, to $1.6 million for the three months ended December 31, 2015 as compared to $1.4 million for the three months ended December 31, 2014, primarily due to an increase in debit card fees and service charges on deposit accounts resulting from continued growth in the number of checking accounts with debit cards. The increase in other operating income was primarily the result of income generated by Greene Risk Management, Inc., a captive insurance subsidiary established on December 28, 2014. |
| · | Noninterest expense increased $474,000, or 5.4%, to $9.2 million for the six months ended December 31, 2015 as compared to $8.8 million for the six months ended December 31, 2014. Noninterest expense increased $231,000, or 5.1%, to $4.7 million for the three months ended December 31, 2015 as compared to $4.5 million for the three months ended December 31, 2014. The increase in noninterest expense is primarily the result of an increase in other expense which included costs related to foreclosed real estate (primarily real estate taxes) as well as write-downs of several of the properties within foreclosed real estate based on pending sales or a decrease in the list price. Salaries and employee benefits expense also increased and was primarily due to the opening of our Kingston branch during the third quarter of fiscal 2015, as well as increases in staffing within our Lending Center and Customer Service Center. Partially offsetting the aforementioned increases were decreases in computer software, supplies and support. During the six months ended December 31, 2014, a one-time fee was paid to one of the Company’s vendors related to the renegotiation of the contract for support services. Legal and professional fees also decreased when comparing the six and three months ended December 31, 2015 and 2014. During the six and three months ended December 31, 2014, the Company incurred one-time legal and professional fees associated with the creation of its newly formed captive insurance subsidiary, Greene Risk Management, Inc. |
| · | The effective tax rate was 23.2% and 23.1% for the six and three months ended December 31, 2015, compared to 27.5% and 27.1% for the six and three months ended December 31, 2014. The effective tax rate has continued to decline as a result of increased income derived from tax-exempt bonds and loans as well as continued loan growth within the Company’s real estate investment trust subsidiary. Also contributing to the lower effective income tax rate is the tax benefits derived from the Company’s pooled captive insurance company, as premium income received by the pooled captive insurance company is exempt from income taxes. The premiums paid to the pooled captive insurance company by the Company and its banking subsidiaries are tax deductible. |
| · | Total assets of the Company were $796.8 million at December 31, 2015 as compared to $738.6 million at June 30, 2015, an increase of $58.2 million, or 7.9%. |
| · | Securities available-for-sale and held-to-maturity amounted to $271.1 million, or 34.0% of assets, at December 31, 2015 as compared to $255.0 million, or 34.5% of assets, at June 30, 2015, an increase of $16.1 million, or 6.3%. |
| · | Net loans increased $34.7 million, or 7.8%, to $478.2 million at December 31, 2015 as compared to $443.5 million at June 30, 2015. The loan growth experienced during the six months consisted primarily of $20.8 million in commercial real estate loans, $3.1 million in residential real estate loans, $5.4 million in construction loans, and $5.6 million in commercial loans. |
| · | Total deposits increased $46.5 million, or 7.5%, to $669.2 million at December 31, 2015 from $622.7 million at June 30, 2015. |
| · | The Company had $27.8 million of short-term borrowings, and $20.3 million of long-term borrowings, with the Federal Home Loan Bank at December 31, 2015 compared to $22.9 million of short term borrowings and $18.8 million of long-term borrowings at June 30, 2015. |
| · | Total shareholders’ equity increased $3.9 million to $70.8 million, or 8.9% of total assets, at December 31, 2015, from total equity of $66.9 million, or 9.1% of total assets, at June 30, 2015. |
At or for the Six Months Ended December 31, | At or for the Three Months Ended December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Interest income | $ | 13,999 | $ | 12,648 | $ | 7,136 | $ | 6,407 | ||||||||
| Interest expense | 1,240 | 1,125 | 626 | 563 | ||||||||||||
| Net interest income | 12,759 | 11,523 | 6,510 | 5,844 | ||||||||||||
| Provision for loan losses | 717 | 716 | 343 | 305 | ||||||||||||
| Noninterest income | 3,024 | 2,909 | 1,578 | 1,440 | ||||||||||||
| Noninterest expense | 9,247 | 8,773 | 4,727 | 4,496 | ||||||||||||
| Income before taxes | 5,819 | 4,943 | 3,018 | 2,483 | ||||||||||||
| Tax provision | 1,349 | 1,357 | 698 | 672 | ||||||||||||
| Net Income | $ | 4,470 | $ | 3,586 | $ | 2,320 | $ | 1,811 | ||||||||
| Basic EPS | $ | 1.06 | $ | 0.85 | $ | 0.55 | $ | 0.43 | ||||||||
| Weighted average shares outstanding | 4,224,540 | 4,215,738 | 4,225,924 | 4,217,118 | ||||||||||||
| Diluted EPS | $ | 1.05 | $ | 0.84 | $ | 0.55 | $ | 0.43 | ||||||||
| Weighted average diluted shares outstanding | 4,250,456 | 4,246,793 | 4,251,483 | 4,248,175 | ||||||||||||
Dividends declared per share 4 | $ | 0.37 | $ | 0.36 | $ | 0.185 | $ | 0.18 | ||||||||
Selected Financial Ratios | ||||||||||||||||
Return on average assets1 | 1.18 | % | 1.05 | % | 1.20 | % | 1.04 | % | ||||||||
Return on average equity1 | 13.01 | % | 11.43 | % | 13.32 | % | 11.39 | % | ||||||||
Net interest rate spread1 | 3.38 | % | 3.37 | % | 3.38 | % | 3.36 | % | ||||||||
Net interest margin1 | 3.45 | % | 3.44 | % | 3.45 | % | 3.43 | % | ||||||||
Fully taxable-equivalent net interest margin2 | 3.69 | % | 3.66 | % | 3.70 | % | 3.65 | % | ||||||||
Efficiency ratio3 | 58.59 | % | 60.79 | % | 58.44 | % | 61.72 | % | ||||||||
| Non-performing assets to total assets | 0.50 | % | 0.96 | % | ||||||||||||
| Non-performing loans to net loans | 0.77 | % | 1.49 | % | ||||||||||||
| Allowance for loan losses to non-performing loans | 232.73 | % | 123.98 | % | ||||||||||||
| Allowance for loan losses to total loans | 1.77 | % | 1.81 | % | ||||||||||||
| Shareholders’ equity to total assets | 8.88 | % | 9.05 | % | ||||||||||||
Dividend payout ratio4 | 34.91 | % | 42.35 | % | ||||||||||||
Actual dividends paid to net income5 | 16.00 | % | 19.33 | % | ||||||||||||
| Book value per share | $ | 16.73 | $ | 15.28 | ||||||||||||
| For the six months ended | For the three months ended | |||||||||||||||
| (Dollars in thousands) | 12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | ||||||||||||
| Net interest income (GAAP) | $ | 12,759 | $ | 11,523 | $ | 6,510 | $ | 5,844 | ||||||||
| Tax-equivalent adjustment | 904 | 732 | 471 | 375 | ||||||||||||
| Net interest income (fully taxable-equivalent basis) | $ | 13,663 | $ | 12,255 | $ | 6,981 | $ | 6,219 | ||||||||
| Average interest-earning assets | $ | 739,869 | $ | 669,381 | $ | 754,770 | $ | 681,696 | ||||||||
| Net interest margin (fully taxable-equivalent basis) | 3.69 | % | 3.66 | % | 3.70 | % | 3.65 | % | ||||||||
As of December 31, 2015 | As of June 30, 2015 | |||||||
| Assets | ||||||||
| Total cash and cash equivalents | $ | 22,088 | $ | 15,538 | ||||
| Long term certificate of deposit | 1,230 | 1,230 | ||||||
| Securities- available for sale, at fair value | 93,582 | 86,034 | ||||||
| Securities- held to maturity, at amortized cost | 177,554 | 169,000 | ||||||
| Federal Home Loan Bank stock, at cost | 2,782 | 2,494 | ||||||
| Gross loans receivable | 485,928 | 450,755 | ||||||
| Less: Allowance for loan losses | (8,611 | ) | (8,142 | ) | ||||
| Unearned origination fees and costs, net | 887 | 883 | ||||||
| Net loans receivable | 478,204 | 443,496 | ||||||
| Premises and equipment | 14,340 | 14,515 | ||||||
| Accrued interest receivable | 3,258 | 3,026 | ||||||
| Foreclosed real estate | 304 | 847 | ||||||
| Prepaid expenses and other assets | 3,464 | 2,467 | ||||||
| Total assets | $ | 796,806 | $ | 738,647 | ||||
| Liabilities and shareholders’ equity | ||||||||
| Noninterest bearing deposits | $ | 77,784 | $ | 73,359 | ||||
| Interest bearing deposits | 591,405 | 549,358 | ||||||
| Total deposits | 669,189 | 622,717 | ||||||
| Borrowings from FHLB, short term | 27,800 | 22,900 | ||||||
| Borrowings from FHLB, long term | 20,300 | 18,800 | ||||||
| Accrued expenses and other liabilities | 8,767 | 7,310 | ||||||
| Total liabilities | 726,056 | 671,727 | ||||||
| Total shareholders’ equity | 70,750 | 66,920 | ||||||
| Total liabilities and shareholders’ equity | $ | 796,806 | $ | 738,647 | ||||
| Common shares outstanding | 4,228,957 | 4,222,357 | ||||||
| Treasury shares | 76,713 | 83,313 | ||||||
