Exhibit 99.1
Gouverneur Bancorp Announces 2007 Third
Quarter and Nine Months Results
Gouverneur, New York, July 31, 2007: Gouverneur Bancorp, Inc. (AMEX: GOV) (the
"Company") and its subsidiary, Gouverneur Savings and Loan Association (the
"Bank"), today announced the results for the third quarter and nine months ended
June 30, 2007.
For the three months ended June 30, 2007, the Company reported net income of
$268,000, or $0.12 per diluted share, representing an increase of $59,000, or
28.2% over last year's net income of $209,000, or $0.09 per diluted share. The
annualized return on average assets and average equity for the three months
ended June 30, 2007 was 0.81% and 5.29% respectively, compared to 0.67% and
4.33% for the three months ended June 30, 2006.
For the nine months ended June 30, 2007, the Company reported net income of
$667,000, or $0.29 per diluted share, representing a decrease of $223,000, or
25.1% over last year's net income of $890,000, or $0.39 per diluted share. The
annualized return on average assets and average equity for the nine months ended
June 30, 2007 was 0.68% and 4.43% respectively, compared to 0.96% and 6.22% for
the same period last year.
Since September 30, 2006, total assets grew $2.5 million, or 1.9%, from $130.1
million to $132.6 million at June 30, 2007, while net loans increased $947,000,
or 0.9%, from $105.6 million to $106.6 million over the same period.
Deposits increased $2.5 million, or 3.4%, from $72.5 million at September 30,
2006 to $75.0 million at June 30, 2007. Brokered CDs accounted for $1.5 million
of the increase in deposits. Advances from the Federal Home Loan Bank of New
York ("FHLB") decreased from $35.3 million at September 30, 2006 to $34.6
million at June 30, 2007.
Shareholders' equity was $20.4 million at June 30, 2007, an increase of 2.5%
over the September 30, 2006 balance of $19.9 million. The book value of
Gouverneur Bancorp, Inc. was $8.88 per common share based on 2,300,059 shares
outstanding at June 30, 2007. The company paid a semi-annual cash dividend of
$0.16 per share to public shareholders on March 31, 2007. Cambray Mutual Holding
Company, Gouverneur Bancorp Inc.'s parent mutual holding company and holder of
57.0% of the Company's issued and outstanding stock, waived its right to receive
that dividend.
Commenting on the year's results, Mr. Bennett said, "Interest rate spread, the
difference between the average rate we earn on our interest-earning assets and
the cost of our interest-bearing liabilities, continues to decrease even though
the Federal Reserve has paused raising short-term interest rates. The cost of
deposits and borrowed funds continues to edge upward as maturities price higher.
We are pleased that our net interest income has only decreased $71,000 during
the first nine months of the 2007 fiscal year as compared to the first nine
months of the 2006 fiscal year. Since net interest margin decreased only $13,000
for the three months ended June 30, 2007, the rising cost of interest-bearing
liabilities appears to be slowing. The growth in the balance sheet over the past
several years, namely in loan growth, has helped to offset the effect of reduced
interest margins. However, we have recently noticed a new wave of aggressive
deposit pricing as financial institutions compete for the limited pool of
available deposits. If this trend continues we could see additional margin
deterioration."
Mr. Bennett continued, "We have adjusted our mortgage and other loan rates
higher, but it will take time for the changes to affect the spread. In the
meantime, we must continue to improve our non-interest income and control our
expenses. It is not clear at this time if or when the Fed will act to reduce
interest rates. The market is still anticipating that it will happen as
indicated by the inverted Treasury interest rate curve."
The Company, which is headquartered in Gouverneur, New York, is the holding
company for Gouverneur Savings and Loan Association. Founded in 1892, the Bank
is a federally chartered savings and loan association offering a variety of
banking products and services to individuals and businesses in its primary
market area in southern St. Lawrence and northern Lewis and Jefferson Counties
in New York State.
Statements in this news release contain forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995. These
statements are based on the beliefs of management as well as assumptions made
using information currently available to management. Since these statements
reflect the views of management concerning future events, these statements
involve risks, uncertainties and assumptions. These risks and uncertainties
include among others, the impact of changes in market interest rates and general
economic conditions, changes in government regulations, changes in accounting
principles and the quality or composition of the loan and investment portfolios.
Therefore, actual future results may differ significantly from results discussed
in the forward-looking statements due to a number of factors, which include, but
are not limited to, factors discussed in the documents filed by the Company with
the Securities and Exchange Commission from time to time.
For more information, contact Robert J. Twyman, Vice President and Chief
Financial Officer at (315) 287-2600.