Greene nty Bancorp(GCBC) - 2025 Q4 - Annual Results

Earnings Release Overview Greene County Bancorp, Inc. achieved record financial performance for FY2025 and Q4, marked by significant net income growth and strategic expansion Headline and Key Financial Results Greene County Bancorp, Inc. achieved record net income of $31.1 million for FY2025, a 25.7% increase, with Q4 net income rising 38.6% to $9.3 million | Metric | Q4 FY2025 | Q4 FY2024 | YoY Change (%) | FY2025 | FY2024 | YoY Change (%) | | :--------------------- | :-------- | :-------- | :------------- | :------- | :------- | :------------- | | Net Income | $9.3M | $6.7M | 38.6% | $31.1M | $24.8M | 25.7% | | Basic & Diluted EPS | $0.55 | $0.40 | 37.5% | $1.83 | $1.45 | 26.2% | CEO Statement and Strategic Highlights CEO Donald Gibson emphasized the company's consistent record earnings, strategic expansion into Saratoga County, and recognition as a top commercial mortgage lender - Achieved record high net income for the fiscal year ended June 30, 2025, marking 16 years of record earnings out of the past 17[2] - Announced plans to expand into Saratoga County with a new branch, extending geographic footprint from five to six counties within New York State[2] - Recognized by the Albany Business Review as one of the Capital Region's 11 fastest-growing large companies (revenue exceeding $100.0 million) and ranked as the number one commercial mortgage lender in New York's Capital Region for 2024 commercial loan volume[2] Financial Highlights Summary The company reached record highs in total assets ($3.0 billion), net loans ($1.6 billion), and net income ($31.1 million) for FY2025, alongside strong ROAA and ROAE | Metric | Value at June 30, 2025 | | :-------------------------- | :--------------------- | | Net Income (FY) | $31.1 million (record high) | | Total Assets | $3.0 billion (record high) | | Net Loans | $1.6 billion (record high) | | Total Deposits | $2.6 billion | | Return on Average Assets (FY) | 1.10% | | Return on Average Equity (FY) | 14.08% | Financial Performance Analysis This section analyzes the company's financial performance, covering net interest income, credit quality, noninterest income and expense, and income taxes Net Interest Income and Margin Net interest income significantly increased for Q4 and FY2025, driven by higher asset balances, improved yields, and strategic deposit rate management, enhancing net interest margin | Metric | Q4 FY2025 | Q4 FY2024 | YoY Change | FY2025 | FY2024 | YoY Change | | :---------------- | :-------- | :-------- | :--------- | :------- | :------- | :--------- | | Net Interest Income | $16.7M | $12.9M | +$3.8M | $60.1M | $51.0M | +$9.1M | | Metric | Q4 FY2025 | Q4 FY2024 | YoY Change (bps) | FY2025 | FY2024 | YoY Change (bps) | | :------------------ | :-------- | :-------- | :--------------- | :------- | :------- | :--------------- | | Net Interest Rate Spread | 2.14% | 1.72% | +42 | 1.97% | 1.75% | +22 | | Net Interest Margin | 2.37% | 1.97% | +40 | 2.19% | 1.98% | +21 | - Increase in net interest income was due to an increase in the average balance of interest-earning assets ($219.0 million for Q4, $170.7 million for FY) and increased interest rates on interest-earning assets (16 basis points for Q4, 26 basis points for FY)[6] - The Company implemented a strategic reduction in deposit rates during FY2025, aligning with the Federal Reserve's rate cuts[7] Credit Quality and Provision for Credit Losses Q4 FY2025 saw a benefit for credit losses due to improved qualitative factors, while overall credit quality improved with reduced nonperforming assets and loans | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :------------------------ | :-------- | :-------- | :------- | :------- | | Provision for Credit Losses | ($880,000) | ($151,000) | $1.3M | $766,000 | | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------------- | :-------------- | :-------------- | | Nonperforming assets to total assets | 0.10% | 0.13% | | Nonperforming loans to net loans | 0.19% | 0.25% | | Allowance for credit losses on loans to total loans | 1.24% | 1.28% | | Net charge-offs on loans (FY) | $349,000 | $1.4M | - The benefit for credit losses in Q4 FY2025 was primarily attributable to an improvement in qualitative factors assessments on loans[9] - Loans classified as substandard and special mention decreased by $3.2 million to $45.4 million at June 30, 2025[9] Noninterest Income and Noninterest Expense Noninterest income increased due to swap contracts and tax credits, while noninterest expense rose from higher salaries, data processing, and unfunded commitment allowances | Metric | Q4 FY2025 | Q4 FY2024 | YoY Change | FY2025 | FY2024 | YoY Change | | :---------------- | :-------- | :-------- | :--------- | :------- | :------- | :--------- | | Noninterest Income | $3.8M | $3.7M | +$46,000 | $15.2M | $13.9M | +$1.3M | | Noninterest Expense | $10.4M | $9.9M | +$497,000 | $39.4M | $37.3M | +$2.1M | - FY2025 noninterest income increase was primarily due to a $610,000 Employee Retention Tax Credit, a $528,000 increase in fee income from customer interest rate swap contracts, and $363,000 from bank owned life insurance[13] - FY2025 noninterest expense increase was mainly driven by a $579,000 increase in salaries and employee benefit costs, a $544,000 increase in service and data processing fees, and a $796,000 increase in the allowance for credit losses on unfunded commitments[13] Income Taxes The effective tax rate increased for Q4 and FY2025, driven by higher pre-tax income and a reduced proportion of tax-exempt income | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------- | :-------- | :-------- | :------- | :------- | | Effective Tax Rate | 14.8% | 1.4% | 10.2% | 7.6% | - The increase in the effective tax rate is primarily due to higher pre-tax income and a lower mix of tax-exempt income from municipal bonds, tax advantage loans, and bank owned life insurance in proportion to pre-tax income[11] Balance Sheet Overview This section outlines the company's balance sheet, detailing changes in assets, liabilities, and shareholders' equity as of June 30, 2025 Assets Total assets reached a record $3.0 billion at June 30, 2025, a 7.6% increase, primarily driven by growth in net loans and held-to-maturity securities | Metric | June 30, 2025 | June 30, 2024 | YoY Change | YoY Change (%) | | :------------------------------------ | :-------------- | :-------------- | :--------- | :------------- | | Total Assets | $3.0B | $2.8B | +$214.8M | 7.6% | | Net Loans Receivable | $1.6B | $1.5B | +$127.0M | 8.6% | | Securities available-for-sale and held-to-maturity | $1.1B | $1.0B | +$91.9M | 8.8% | - Loan growth during FY2025 consisted primarily of $117.9 million in commercial real estate loans, $5.5 million in commercial loans, and $4.9 million in home equity loans[16] - Securities purchases totaled $444.2 million during FY2025, primarily state and political subdivision securities ($308.5 million)[14] Liabilities and Shareholders' Equity Total deposits grew 10.5% to $2.6 billion, borrowings decreased, and shareholders' equity increased 16.0% due to net income and reduced AOCI | Metric | June 30, 2025 | June 30, 2024 | YoY Change | YoY Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | :------------- | | Total Deposits | $2.6B | $2.4B | +$250.6M | 10.5% |\ | Borrowings | $128.1M | $199.1M | -$71.0M | -35.7% |\ | Shareholders' Equity | $238.8M | $206.0M | +$32.8M | 16.0% | - NOW deposits increased by $192.6 million (10.9%) and certificates of deposits increased by $89.7 million (64.8%) year-over-year[16] - Shareholders' equity increased primarily from net income of $31.1 million and a decrease in accumulated other comprehensive loss of $6.2 million, partially offset by dividends declared and paid of $4.5 million[16] Corporate Information This section covers Greene County Bancorp, Inc.'s corporate structure, market presence, and important disclaimers on forward-looking statements and non-GAAP measures Corporate Overview Greene County Bancorp, Inc. is the holding company for its banking subsidiaries, providing community-based services across New York's Hudson Valley and Capital Region - Greene County Bancorp, Inc. is the holding company for the Bank of Greene County and its subsidiary Greene County Commercial Bank[15] - The Company is the leading provider of community-based banking services throughout the Hudson Valley and Capital Region of New York State[15] - Greene County Bancorp, Inc. (GCBC) is publicly traded on the Nasdaq Capital Market[15] Forward-Looking Statements This section cautions that the release contains forward-looking statements, subject to various risks and uncertainties, and the company disclaims any update obligation - The release contains forward-looking statements, identified by terms like 'believe,' 'expect,' 'anticipate,' and 'intend,' which involve known and unknown risks and uncertainties[17] - Factors that may cause actual results to differ materially include local, regional, national, and international economic conditions, financial and regulatory changes, interest rates, competition, and technological developments[17] - The Company cautions readers not to place undue reliance on forward-looking statements and disclaims any obligation to publicly release revisions unless required by law[18][19] Non-GAAP Measures The release includes non-GAAP measures like fully taxable-equivalent net interest margin, which management deems useful supplemental information, not a GAAP substitute - The news release contains non-GAAP financial measures, including fully taxable-equivalent net interest margin and pre-provision net income[20][21] - Management believes these non-GAAP measures are useful in evaluating the Company's performance and should be considered supplemental, not a substitute for GAAP[21] Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements, including income statements, balance sheets, and non-GAAP reconciliations Consolidated Statements of Income, and Selected Financial Ratios This section provides unaudited consolidated statements of income and key financial ratios for Q4 and FY2025 and 2024, detailing income components and performance metrics | Dollars in thousands, except share and per share data | 2025 (3 Months) | 2024 (3 Months) | 2025 (Years) | 2024 (Years) | | :---------------------------------------------------- | :-------------- | :-------------- | :----------- | :----------- | | Interest income | $30,739 | $27,328 | $117,705 | $103,664 | | Interest expense | 14,033 | 14,471 | 57,584 | 52,685 | | Net interest income | 16,706 | 12,857 | 60,121 | 50,979 | | Provision for credit losses | (880) | (151) | 1,316 | 766 | | Noninterest income | 3,765 | 3,719 | 15,233 | 13,908 | | Noninterest expense | 10,394 | 9,897 | 39,372 | 37,302 | | Income before taxes | 10,957 | 6,830 | 34,666 | 26,819 | | Tax provision | 1,624 | 98 | 3,528 | 2,050 | | Net income | $9,333 | $6,732 | $31,138 | $24,769 | | Basic and diluted EPS | $0.55 | $0.40 | $1.83 | $1.45 | | Dividends declared per share | $0.09 | $0.08 | $0.36 | $0.32 | | Selected Financial Ratios | 2025 (3 Months) | 2024 (3 Months) | 2025 (Years) | 2024 (Years) | | :-------------------------------------- | :-------------- | :-------------- | :----------- | :----------- | | Return on average assets | 1.28% | 1.00% | 1.10% | 0.93% | | Return on average equity | 15.98% | 13.36% | 14.08% | 12.87% | | Net interest rate spread | 2.14% | 1.72% | 1.97% | 1.75% | | Net interest margin | 2.37% | 1.97% | 2.19% | 1.98% | | Fully taxable-equivalent net interest margin | 2.67% | 2.24% | 2.47% | 2.25% | | Efficiency ratio | 50.77% | 59.71% | 52.25% | 57.49% | | Non-performing assets to total assets | | | 0.10% | 0.13% | | Non-performing loans to net loans | | | 0.19% | 0.25% | | Allowance for credit losses on loans to non-performing loans | | | 658.37% | 516.20% | | Allowance for credit losses on loans to total loans | | | 1.24% | 1.28% | | Shareholders' equity to total assets | | | 7.85% | 7.29% | | Dividend payout ratio | | | 19.67% | 22.07% | | Actual dividends paid to net income | | | 14.37% | 13.08% | | Book value per share | | | $14.03 | $12.10 | Consolidated Statements of Financial Condition This section presents the unaudited consolidated balance sheets as of June 30, 2025, and 2024, detailing assets, liabilities, and shareholders' equity | Dollars In thousands, except share data | June 30, 2025 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------ | | Assets | | | | Total cash and cash equivalents | $183,078 | $190,395 | | Securities available-for-sale, at fair value | 356,062 | 350,001 | | Securities held-to-maturity, at amortized cost, net of allowance for credit losses | 776,147 | 690,354 | | Net loans receivable | 1,607,260 | 1,480,229 | | Total assets | $3,040,609 | $2,825,788 | | Liabilities and shareholders' equity | | | | Total deposits | $2,639,835 | $2,389,222 | | Borrowings, short-term | 74,000 | 115,300 | | Borrowings, long-term | 4,189 | 34,156 | | Subordinated notes payable, net | 49,867 | 49,681 | | Total liabilities | 2,801,772 | 2,619,788 | | Total shareholders' equity | 238,837 | 206,000 | | Total liabilities and shareholders' equity | $3,040,609 | $2,825,788 | Non-GAAP to GAAP Reconciliations This section provides detailed reconciliations for non-GAAP financial measures, including fully taxable-equivalent net interest margins and pre-provision net income | (Dollars in thousands) | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :------------------------------------------ | :-------- | :-------- | :------- | :------- | | Net interest income (GAAP) | $16,706 | $12,857 | $60,121 | $50,979 | | Tax-equivalent adjustment | 2,130 | 1,740 | 7,679 | 6,791 | | Net interest income-fully taxable-equivalent basis (non-GAAP) | $18,836 | $14,597 | $67,800 | $57,770 | | Net interest margin-fully taxable-equivalent basis (non-GAAP) | 2.67% | 2.24% | 2.47% | 2.25% | | (Dollars in thousands) | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------------------- | :-------- | :-------- | :------- | :------- | | Net income (GAAP) | $9,333 | $6,732 | $31,138 | $24,769 | | Provision for credit losses | (880) | (151) | 1,316 | 766 | | Pre-provision net income (non-GAAP) | $8,453 | $6,581 | $32,454 | $25,535 |