
PART I. FINANCIAL INFORMATION Financial Statements (unaudited) The unaudited financial statements detail the company's financial position, operations, and cash flows, reflecting asset and net income growth - On March 23, 2023, the Company executed a 2-for-1 stock split through a stock dividend, with all share and per-share data retroactively adjusted to reflect this split21 Consolidated Statements of Financial Condition Total assets grew 6.1% to $2.73 billion, driven by a 12.9% increase in net loans receivable to $1.39 billion Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Total Assets | $2,729,101 | $2,571,740 | | Net loans receivable | $1,388,321 | $1,229,355 | | Total securities (AFS & HTM) | $1,053,847 | $1,169,914 | | Total cash and cash equivalents | $178,322 | $69,009 | | Total Liabilities | $2,550,423 | $2,414,026 | | Total deposits | $2,472,323 | $2,212,604 | | Borrowings from FHLB, short-term | $- | $123,700 | | Total Shareholders' Equity | $178,678 | $157,714 | Consolidated Statements of Income Net income for Q3 fiscal 2023 increased 12.6% to $8.1 million, with nine-month net income growing 14.9% to $24.3 million Key Performance Indicators (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $15,226 | $14,087 | $46,983 | $42,939 | | Provision for Loan Losses | $(944) | $163 | $(1,199) | $2,431 | | Net Income | $8,091 | $7,188 | $24,325 | $21,179 | | Diluted EPS | $0.48 | $0.42 | $1.43 | $1.24 | Consolidated Statements of Comprehensive Income Comprehensive income reached $11.0 million for Q3 fiscal 2023, a significant improvement from a $2.5 million loss, driven by unrealized gains on securities Comprehensive Income (Loss) (in thousands) | Component | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $8,091 | $7,188 | $24,325 | $21,179 | | Other Comprehensive Income (Loss), net | $2,927 | $(9,732) | $(1,716) | $(12,304) | | Comprehensive Income (Loss) | $11,018 | $(2,544) | $22,609 | $8,875 | Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity increased to $178.7 million by March 31, 2023, driven by $24.3 million in net income, offset by dividends and other comprehensive loss Changes in Shareholders' Equity (Nine Months Ended Mar 31, 2023, in thousands) | Component | Amount | | :--- | :--- | | Balance at June 30, 2022 | $157,714 | | Net Income | $24,325 | | Dividends declared | $(1,645) | | Other comprehensive loss, net of taxes | $(1,716) | | Balance at March 31, 2023 | $178,678 | Consolidated Statements of Cash Flows Cash and equivalents increased by $109.3 million, primarily from $134.4 million in financing activities, offset by $42.8 million used in investing activities Cash Flow Summary (Nine Months Ended Mar 31, 2023 vs 2022, in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $17,728 | $21,147 | | Net cash used in investing activities | $(42,789) | $(332,043) | | Net cash provided by financing activities | $134,374 | $311,736 | | Net increase in cash and cash equivalents | $109,313 | $840 | Notes to Consolidated Financial Statements Notes detail accounting policies, securities and loan portfolios, credit quality, fair value, a settled lawsuit, and preparation for CECL adoption - The company's securities portfolio at March 31, 2023, had gross unrealized losses of $81.7 million, primarily due to increased interest rates, though management does not consider them other-than-temporarily impaired273135 - The loan portfolio is primarily composed of commercial real estate (49.9%) and residential real estate (26.6%), with nonaccrual loans decreasing to $4.7 million at March 31, 2023, from $6.3 million at June 30, 20224051128 - The company settled a putative class action complaint related to overdraft fees for $1.15 million, which was reserved in the quarter ended December 31, 2022106 - The company will adopt the new Current Expected Credit Loss (CECL) standard (ASU 2016-13) for the fiscal year beginning July 1, 2023, which is expected to significantly impact the allowance for credit losses methodology8788 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong performance to net interest income growth, improved credit quality, robust liquidity, and strong capital Comparison of Financial Condition Total assets grew 6.1% to $2.7 billion, driven by a $159.0 million increase in net loans, funded by a $259.7 million rise in deposits - Net loans receivable increased by $159.0 million (12.9%) to $1.4 billion, with significant growth in commercial real estate ($107.1 million) and commercial construction ($25.1 million) loans121127 - Total deposits increased by $259.7 million (11.7%) to $2.5 billion, largely due to growth in NOW accounts and brokered certificates of deposit, used to enhance liquidity138 - Shareholders' equity increased to $178.7 million, with book value per share rising to $10.49 from $9.26 at June 30, 2022146150 Results of Operations Net income for the nine months increased 14.9% to $24.3 million, driven by a $4.1 million rise in net interest income Net Income and ROA/ROE (Annualized) | Metric | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | | Net Income | $24.3 million | $21.2 million | | Return on Average Assets | 1.26% | 1.21% | | Return on Average Equity | 19.51% | 18.09% | - Net interest income for the nine months ended March 31, 2023 increased by $4.1 million, primarily due to a $6.2 million increase from higher asset volume, which offset a $2.2 million decrease from rate/spread compression161167 - Interest expense for the nine months increased by $10.3 million (272.5%), driven by higher rates paid on NOW deposits and increased borrowing levels165 - Noninterest expense for the nine months increased by $4.0 million (16.2%), primarily due to a $2.0 million increase in salaries and benefits and a $1.6 million increase in legal and professional fees, which included a $1.2 million litigation reserve176 Asset Quality Asset quality improved significantly, with nonperforming assets decreasing to $5.2 million and a $1.2 million provision for loan loss benefit recorded Asset Quality Metrics | Metric | March 31, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Nonperforming Assets | $5,154 thousand | $6,385 thousand | | Nonperforming Assets / Total Assets | 0.19% | 0.25% | | Allowance for Loan Losses / Total Loans | 1.50% | 1.82% | | Allowance for Loan Losses / Nonperforming Loans | 450.87% | 562.46% | - The provision for loan losses was a benefit of $1.2 million for the nine months ended March 31, 2023, compared to an expense of $2.4 million in the prior year period, reflecting a decrease in adversely classified loans172 - The decrease in nonperforming loans was primarily due to $1.3 million in loan repayments and $508,000 in charge-offs or transfers to foreclosed real estate174 Liquidity and Capital Resources The company maintained strong liquidity with $178.3 million in cash and equivalents, increased brokered deposits, and exceeded all regulatory capital requirements - The company enhanced its liquidity position in response to market turmoil, increasing cash and equivalents to $178.3 million and utilizing brokered deposits178182 - The company has access to the Federal Reserve's Bank Term Funding Program (BTFP) but had not requested funding as of March 31, 2023179 The Bank of Greene County Capital Ratios (Actual vs. Well-Capitalized) | Ratio | Actual (Mar 31, 2023) | Well-Capitalized Requirement | | :--- | :--- | :--- | | Total risk-based capital | 16.3% | 10.0% | | Tier 1 risk-based capital | 15.1% | 8.0% | | Common equity tier 1 capital | 15.1% | 6.5% | | Tier 1 leverage ratio | 8.7% | 5.0% | Quantitative and Qualitative Disclosures About Market Risk This disclosure is not required for smaller reporting companies, thus no information is provided - Item 3 is not applicable as the company is a smaller reporting company188 Controls and Procedures Management, including the CEO and CFO, concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of the end of the reporting period189 - No changes in internal control over financial reporting occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls190 PART II. OTHER INFORMATION Legal Proceedings The company settled a class action lawsuit concerning overdraft fees for $1.15 million, with the settlement pending court approval - A class action complaint regarding overdraft fees was filed against the Bank, with parties entering into a settlement agreement for $1,150,000 plus forgiveness of certain fees, which the company had already reserved for106191 Risk Factors This disclosure is not required for smaller reporting companies, thus no information is provided - Item 1A is not applicable as the company is a smaller reporting company192 Unregistered Sales of Equity Securities and Use of Proceeds The company has a stock repurchase program authorizing up to 400,000 shares, with no repurchases made during the quarter - The Company has a stock repurchase program authorizing up to 400,000 shares, with no shares repurchased during the quarter ended March 31, 2023195 Other Items (3, 4, 5, 6) Items 3 and 4 are not applicable; Item 5 notes no material changes to director nomination procedures; Item 6 lists filed exhibits - Items 3 and 4 are not applicable; Item 6 lists filed exhibits, including CEO/CFO certifications195