Greene nty Bancorp(GCBC) - 2026 Q1 - Quarterly Results

Earnings Release Summary Greene County Bancorp, Inc. reported strong Q1 fiscal year 2026 financial results, achieving record net income, total assets, loans, deposits, and equity, alongside strategic expansion Q1 Fiscal Year 2026 Financial Results Greene County Bancorp, Inc. reported a significant increase in net income for the first quarter of fiscal year 2026, driven by strong operational performance. Net income rose by 41.7% year-over-year, reaching $8.9 million, with basic and diluted EPS at $0.52 Net Income and EPS (Three Months Ended September 30) | Metric | Sep 30, 2025 | Sep 30, 2024 | Change ($) | Change (%) | | :---------------------- | :----------- | :----------- | :--------- | :--------- | | Net Income | $8.9 million | $6.3 million | $2.6 million | 41.7% | | Basic and Diluted EPS | $0.52 | $0.37 | - | - | CEO Commentary & Strategic Highlights The CEO highlighted a historical net income record of over $18.2 million in the prior six-month period and announced record highs in total assets, loans, deposits, and equity. The company also finalized expansion plans into Saratoga County with a new Clifton Park office opening - The Company achieved a historical net income record of over $18.2 million in the prior six-month period, reflecting powerful performance and consistent growth[2] - Record highs were reached in total assets, loans, deposits, and equity during the quarter ended September 30, 2025, underscoring balance sheet strength and business model resilience[2] - Expansion plans into Saratoga County were finalized, with a grand opening for the new Clifton Park office scheduled for October 25, 2025, marking entry into a vibrant New York State market[2] Key Financial Metrics The company reported record highs in total assets, net loans, and total deposits, alongside strong profitability ratios for the quarter ended September 30, 2025 Key Financial Metrics (as of/for Three Months Ended September 30, 2025) | Metric | Value | | :------------------------- | :------------- | | Net Income | $8.9 million | | Total Assets | $3.1 billion | | Net Loans | $1.6 billion | | Total Deposits | $2.7 billion | | Return on Average Assets | 1.21% | | Return on Average Equity | 14.59% | Detailed Financial Performance This section details the company's financial performance, highlighting significant increases in pre-provision net income and net interest income, stable credit quality, and changes in noninterest income and expenses Pre-provision Net Income Pre-provision net income significantly increased by 46.9% year-over-year, reaching $10.1 million, reflecting effective balance sheet management and a higher net interest margin Pre-provision Net Income (Three Months Ended September 30) | Metric | Sep 30, 2025 | Sep 30, 2024 | Change ($) | Change (%) | | :----------------------- | :----------- | :----------- | :--------- | :--------- | | Pre-provision Net Income | $10.1 million | $6.9 million | $3.2 million | 46.9% | - The Company strategically managed its balance sheet by focusing on higher-yielding loans and securities and lowering deposit rates to align with Federal Reserve interest rate cuts, resulting in a higher net interest margin[5] Net Interest Income and Margin Net interest income increased substantially due to growth in interest-earning assets and higher yields, coupled with a reduction in rates paid on interest-bearing liabilities. This led to a significant improvement in both net interest rate spread and net interest margin Net Interest Income and Margin (Three Months Ended September 30) | Metric | Sep 30, 2025 | Sep 30, 2024 | Change ($) | Change (bps) | | :------------------------------- | :----------- | :----------- | :--------- | :----------- | | Net Interest Income | $17.5 million | $13.1 million | $4.4 million | - | | Net Interest Rate Spread | 2.25% | 1.76% | - | 49 bps | | Net Interest Margin | 2.48% | 2.03% | - | 45 bps | | Fully Taxable-Equivalent Net Interest Margin | 2.79% | 2.29% | - | 50 bps | - The increase in net interest income was driven by a $239.8 million increase in average interest-earning assets and an 18 basis point increase in interest rates on these assets, alongside a 31 basis point decrease in rates paid on interest-bearing liabilities[6] - The Company implemented a strategic reduction in deposit rates, aligning with Federal Reserve rate cuts, while repricing assets into the higher interest rate environment[7] Credit Quality and Provision for Credit Losses The provision for credit losses increased due to higher loan volume and specific reserve adjustments, while overall credit quality remained stable with a decrease in substandard and special mention loans and no material charge-offs Credit Quality Metrics (Three Months Ended September 30) | Metric | Sep 30, 2025 | Sep 30, 2024 | Change ($) | | :----------------------------------------- | :----------- | :----------- | :--------- | | Provision for Credit Losses | $1.3 million | $634,000 | $666,000 | | Net Charge-offs on Loans | $60,000 | $114,000 | -$54,000 | Credit Quality Ratios (as of Period End) | Metric | Sep 30, 2025 | Jun 30, 2025 | | :----------------------------------------- | :----------- | :----------- | | Allowance for Credit Losses on Loans to Total Loans Receivable | 1.27% | 1.24% | | Nonperforming Assets to Total Assets | 0.12% | 0.10% | | Nonperforming Loans to Net Loans | 0.22% | 0.19% | - Loans classified as substandard and special mention decreased by $1.9 million to $43.5 million at September 30, 2025, with $40.0 million performing[11] Noninterest Income and Noninterest Expense Noninterest income increased due to higher customer interest rate swap contracts and service fees, while noninterest expense also rose, primarily driven by increased salaries and employee benefits to support growth, partially offset by a decrease in unfunded commitment expense Noninterest Income and Expense (Three Months Ended September 30) | Metric | Sep 30, 2025 | Sep 30, 2024 | Change ($) | Change (%) | | :----------------- | :----------- | :----------- | :--------- | :--------- | | Noninterest Income | $4.0 million | $3.7 million | $249,000 | 6.7% | | Noninterest Expense | $10.1 million | $9.6 million | $511,000 | 5.4% | - The increase in noninterest income was primarily due to a $170,000 increase in income from customer interest rate swap contracts and an $81,000 increase in customer service fees[11] - Noninterest expense growth was mainly attributed to a $278,000 increase in salaries and employee benefits for new positions supporting growth, and a $250,000 charitable donation, partially offset by a $547,000 decrease in unfunded commitment expense[11] Income Taxes The effective tax rate increased significantly to 12.9% from 6.4% year-over-year, primarily due to higher pre-tax income and a lower proportion of tax-exempt income Effective Tax Rate (Three Months Ended September 30) | Metric | Sep 30, 2025 | Sep 30, 2024 | | :----------------- | :----------- | :----------- | | Effective Tax Rate | 12.9% | 6.4% | - The increase in the effective tax rate was 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[12] Balance Sheet Summary The balance sheet reflects modest asset growth, increased loans and deposits, a significant reduction in borrowings, and a healthy increase in shareholders' equity Total Assets and Cash Equivalents Total assets grew modestly to $3.1 billion, while cash and cash equivalents decreased, reflecting continued strong capital and liquidity positions Total Assets and Cash Equivalents (as of Period End) | Metric | Sep 30, 2025 | Jun 30, 2025 | Change ($) | Change (%) | | :------------------------- | :----------- | :----------- | :--------- | :--------- | | Total Assets | $3.1 billion | $3.0 billion | $17.9 million | 0.6% | | Total Cash and Cash Equivalents | $154.6 million | $183.1 million | -$28.5 million | -15.6% | - The Company maintained strong capital and liquidity positions as of September 30, 2025[13] Securities Securities available-for-sale and held-to-maturity increased slightly, with significant purchases of state and political subdivision securities, partially offset by principal pay-downs and maturities Securities (as of Period End) | Metric | Sep 30, 2025 | Jun 30, 2025 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Securities AFS and HTM | $1.1 billion | $1.1 billion | $5.0 million | 0.4% | - Securities purchases totaled $93.3 million during the quarter, primarily consisting of $82.2 million in state and political subdivision securities[13] - Principal pay-downs and maturities amounted to $90.1 million, primarily from state and political subdivision securities[13] Net Loans Receivable Net loans receivable experienced solid growth, primarily driven by commercial real estate and commercial loans, leading to an increase in the allowance for credit losses Net Loans Receivable and Allowance for Credit Losses (as of Period End) | Metric | Sep 30, 2025 | Jun 30, 2025 | Change ($) | Change (%) | | :----------------------------------------- | :----------- | :----------- | :--------- | :--------- | | Net Loans Receivable | $1.65 billion | $1.61 billion | $42.3 million | 2.6% | | Allowance for Credit Losses on Loans | $21.3 million | $20.1 million | $1.1 million | 5.7% | - Loan growth was primarily in commercial real estate loans ($32.3 million), commercial loans ($9.2 million), and home equity loans ($3.1 million)[13] - The increase in the allowance for credit losses was mainly attributable to increased loan volume and a higher quantitative modeling reserve for the commercial real estate segment[13] Deposits and Borrowings Total deposits increased, with significant growth in NOW and noninterest-bearing deposits, while borrowings decreased substantially due to a reduction in short-term borrowings Deposits and Borrowings (as of Period End) | Metric | Sep 30, 2025 | Jun 30, 2025 | Change ($) | Change (%) | | :------------------------- | :----------- | :----------- | :--------- | :--------- | | Total Deposits | $2.7 billion | $2.6 billion | $83.4 million | 3.2% | | Borrowings | $54.1 million | $128.1 million | -$74.0 million | -57.8% | - NOW deposits increased by $96.1 million (4.9%) and noninterest-bearing deposits increased by $12.7 million (11.5%)[13] - The decrease in borrowings was primarily due to the elimination of $74.0 million in short-term borrowings[13] Shareholders' Equity Shareholders' equity increased to $248.2 million, primarily driven by net income and a decrease in accumulated other comprehensive loss, partially offset by dividends paid Shareholders' Equity (as of Period End) | Metric | Sep 30, 2025 | Jun 30, 2025 | Change ($) | | :------------------- | :----------- | :----------- | :--------- | | Shareholders' Equity | $248.2 million | $238.8 million | $9.4 million | - The increase in shareholders' equity resulted primarily from $8.9 million in net income and a $1.3 million decrease in accumulated other comprehensive loss, partially offset by $781,000 in dividends declared and paid[14] Corporate Overview This section provides an overview of Greene County Bancorp, Inc., its subsidiaries, and its role as a community-based banking service provider in New York State Company Overview Greene County Bancorp, Inc. serves as the holding company for the Bank of Greene County and Greene County Commercial Bank, providing community-based banking services across the Hudson Valley and Capital Region of New York State - 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 a leading provider of community-based banking services throughout the Hudson Valley and Capital Region of New York State, serving individuals, businesses, municipalities, and other institutions[15] - Greene County Bancorp, Inc. (GCBC) is publicly traded on the Nasdaq Capital Market and is committed to economic development and quality of life in its communities[15] Disclosures This section outlines important disclosures regarding forward-looking statements and the use of non-GAAP financial measures in the report Forward-Looking Statements This section contains standard cautionary language regarding forward-looking statements, emphasizing that actual results may differ materially due to various known and unknown risks and uncertainties beyond the Company's control, and disclaims any obligation to update these statements - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated[16] - Factors that may cause differences include general economic conditions, financial and regulatory changes, interest rate fluctuations, competition, technological developments, and customer behavior[16] - 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[17][18] Non-GAAP Measures The report includes non-GAAP financial measures, such as fully taxable-equivalent net interest margin and pre-provision net income, which management believes are useful supplemental tools for evaluating performance, but should not be considered substitutes for GAAP measures - The news release contains non-GAAP financial measures, including fully taxable-equivalent net interest margin and pre-provision net income, which are commonly utilized by financial institutions[19][20] - Management believes these non-GAAP measures are useful in evaluating the Company's performance and provide an alternative view of income generation, but are supplemental and not superior to GAAP information[5][20] - Reconciliations of non-GAAP to GAAP measures are provided on page 9 of the report[20] Consolidated Financial Statements and Reconciliations This section presents the Company's consolidated statements of income and financial condition, along with reconciliations of non-GAAP to GAAP financial measures Consolidated Statements of Income The consolidated statements of income present the Company's revenues, expenses, and net income for the three months ended September 30, 2025 and 2024, along with key financial ratios Consolidated Statements of Income (Three Months Ended September 30, Dollars in thousands) | Metric | 2025 | 2024 | | :---------------------- | :------ | :------ | | Interest income | $31,623 | $27,769 | | Interest expense | 14,103 | 14,633 | | Net interest income | 17,520 | 13,136 | | Provision for credit losses | 1,257 | 634 | | Noninterest income | 3,986 | 3,737 | | Noninterest expense | 10,061 | 9,550 | | Income before taxes | 10,188 | 6,689 | | Tax provision | 1,318 | 428 | | Net income | $8,870 | $6,261 | | Basic and diluted EPS | $0.52 | $0.37 | Selected Financial Ratios (Three Months Ended September 30) | Ratio | 2025 | 2024 | | :---------------------------------------- | :------ | :------ | | Return on average assets | 1.21% | 0.93% | | Return on average equity | 14.59% | 11.86% | | Net interest rate spread | 2.25% | 1.76% | | Net interest margin | 2.48% | 2.03% | | Fully taxable-equivalent net interest margin | 2.79% | 2.29% | | Efficiency ratio | 46.78% | 56.60% | | Non-performing assets to total assets | 0.12% | 0.13% | | Non-performing loans to net loans | 0.22% | 0.25% | | Allowance for credit losses on loans to non-performing loans | 597.92% | 542.39% | | Allowance for credit losses on loans to total loans | 1.27% | 1.32% | | Shareholders' equity to total assets | 8.11% | 7.52% | | Dividend payout ratio | 19.23% | 24.32% | | Actual dividends paid to net income | 8.80% | 24.48% | | Book value per share | $14.58 | $12.70 | Consolidated Statements of Financial Condition The consolidated statements of financial condition provide a snapshot of the Company's assets, liabilities, and shareholders' equity as of September 30, 2025, and June 30, 2025 Consolidated Statements of Financial Condition (as of, Dollars in thousands) | Asset/Liability Category | Sep 30, 2025 | Jun 30, 2025 | | :--------------------------------- | :----------- | :----------- | | Assets: | | | | Total cash and cash equivalents | $154,567 | $183,078 | | Securities available-for-sale | 350,073 | 356,062 | | Securities held-to-maturity | 787,132 | 776,147 | | Net loans receivable | 1,649,555 | 1,607,260 | | Total assets | $3,058,545 | $3,040,609 | | Liabilities: | | | | Total deposits | $2,723,187 | $2,639,835 | | Borrowings, short-term | - | 74,000 | | Borrowings, long-term | 4,189 | 4,189 | | Subordinated notes payable, net | 49,904 | 49,867 | | Total liabilities | 2,810,369 | 2,801,772 | | Shareholders' Equity: | | | | Total shareholders' equity | $248,176 | $238,837 | | Total liabilities and shareholders' equity | $3,058,545 | $3,040,609 | Non-GAAP to GAAP Reconciliations This section provides reconciliations for non-GAAP financial measures, specifically the fully taxable-equivalent net interest margin and pre-provision net income, to their most directly comparable GAAP measures Non-GAAP to GAAP Reconciliations: Fully Taxable-Equivalent Net Interest Margins (Three Months Ended September 30, Dollars in thousands) | Metric | 2025 | 2024 | | :----------------------------------------- | :------ | :------ | | Net interest income (GAAP) | $17,520 | $13,136 | | Tax-equivalent adjustment | 2,225 | 1,713 | | Net interest income-fully taxable-equivalent basis (non-GAAP) | $19,745 | $14,849 | | Average interest-earning assets (GAAP) | $2,829,350 | $2,589,580 | | Net interest margin-fully taxable-equivalent basis (non-GAAP) | 2.79% | 2.29% | Non-GAAP to GAAP Reconciliations: Pre-provision Net Income (Three Months Ended September 30, Dollars in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :------ | :------ | | Net income (GAAP) | $8,870 | $6,261 | | Provision for credit losses | 1,257 | 634 | | Pre-provision net income (non-GAAP) | $10,127 | $6,895 |