10-Q 1 brhc20052750_10q.htm 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT

Commission File Number:  0-25165

graphic

GREENE COUNTY BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)

United States
  
14-1809721
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification Number)

302 Main Street, Catskill, New York
  
12414
(Address of principal executive office)
  
(Zip code)

Registrant’s telephone number, including area code: (518) 943-2600

Securities registered pursuant to Section 12(b) of the Act:

Title of class
Trading symbol
Name of exchange on which registered
Common Stock, $0.10 par value
GCBC
The Nasdaq Stock Market

Securities Registered Pursuant to Section 12(g) of the Act:
None
(Title of Class)

Check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    YES ☒          NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES ☒          NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   ☐
Accelerated filer   ☐
Emerging Growth Company   ☐
Non-accelerated filer   ☒
Smaller reporting company   ☒
  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).YES ☐ NO ☒

As of May 10, 2023, the registrant had 17,026,828 shares of common stock outstanding at $0.10 par value per share.

GREENE COUNTY BANCORP, INC.

INDEX

PART I.
FINANCIAL INFORMATION
  
   
Page
Item 1.
Financial Statements (unaudited)
  
 
3
 
4
 
5
 
6
 
7
 
8-30
     
Item 2.
31-47
     
Item 3.
47
     
Item 4.
47
     
PART II.
 48
     
Item 1.
48
     
Item 1A.
48
     
Item 2.
48
     
Item 3.
48
     
Item 4.
48
     
Item 5.
48
     
Item 6.
48
     
 
49

2
Greene County Bancorp, Inc.
Consolidated Statements of Financial Condition
At March 31, 2023 and June 30, 2022
(Unaudited)
(In thousands, except share and per share amounts)

ASSETS
  
March 31, 2023
    
June 30, 2022
  
Total cash and cash equivalents
  

178,322
      
69,009
  
                 
Long-term certificates of deposit
    
4,581
      
4,107
  
Securities available-for-sale, at fair value
    
316,864
      
408,062
  
Securities held-to-maturity, at amortized cost (fair value $685,893 at March 31, 2023; $710,453 at June 30, 2022)
    
736,983
      
761,852
  
Equity securities, at fair value
    
295
      
273
  
Federal Home Loan Bank stock, at cost
    
1,461
      
6,803
  
                 
Loans
    
1,409,447
      
1,251,987
  
Allowance for loan losses
    
(21,155
)
    
(22,761
)
Unearned origination fees and costs, net
    
29
      
129
  
Net loans receivable
    
1,388,321
      
1,229,355
  
                 
Premises and equipment, net
    
14,532
      
14,362
  
Bank-owned life insurance
    
54,714
      
53,695
  
Accrued interest receivable
    
13,992
      
8,917
  
Foreclosed real estate
    
462
      
68
  
Prepaid expenses and other assets
    
18,574
      
15,237
  
Total assets
  
$
2,729,101
    
$
2,571,740
  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Noninterest-bearing deposits
  
$
164,532
    
$
187,697
  
Interest-bearing deposits
    
2,307,791
      
2,024,907
  
Total deposits
    
2,472,323
      
2,212,604
  
                 
Borrowings from Federal Home Loan Bank, short-term    
-
      
123,700
  
Subordinated notes payable, net
    
49,449
      
49,310
  
Accrued expenses and other liabilities
    
28,651
      
28,412
  
Total liabilities
    
2,550,423
      
2,414,026
  
                 
SHAREHOLDERS’ EQUITY
                
Preferred stock, Authorized - 1,000,000 shares; Issued - None
    
-
      
-
  
Common stock, par value $0.10 per share; Authorized - 36,000,000 shares; Issued – 17,222,680 shares at March 31, 2023 and June 30, 2022; Outstanding – 17,026,828 shares at March 31, 2023, and June 30, 2022
    
1,722
      
1,722
  
Additional paid-in capital
    
10,156
      
10,156
  
Retained earnings
    
187,807
      
165,127
  
Accumulated other comprehensive loss
    
(20,099
)
    
(18,383
)
Treasury stock, at cost 195,852 shares at March 31, 2023, and June 30, 2022
    
(908
)
    
(908
)
Total shareholders’ equity
    
178,678
      
157,714
  
Total liabilities and shareholders’ equity
  
$
2,729,101
    
$
2,571,740
  

See notes to consolidated financial statements

3

Greene County Bancorp, Inc.
Consolidated Statements of Income
For the Three and Nine Months Ended March 31, 2023 and 2022
(Unaudited)
(In thousands, except share and per share amounts)

   
For the three months ended
March 31,
    
For the nine months ended
March 31,
  
   
2023
    
2022
    
2023
    
2022
  
Interest income:
                        
Loans
  
$
15,676
    
$
11,236
    
$
43,859
    
$
35,293
  
Investment securities - taxable
    
722
      
386
      
2,076
      
1,059
  
Mortgage-backed securities
    
1,422
      
1,278
      
4,276
      
3,547
  
Investment securities - tax exempt
    
3,836
      
2,372
      
10,417
      
6,716
  
Interest-bearing deposits and federal funds sold
    
277
      
33
      
473
      
114
  
Total interest income
    
21,933
      
15,305
      
61,101
      
46,729
  
                                 
Interest expense:
                                
Interest on deposits
    
5,559
      
748
      
11,307
      
2,445
  
Interest on borrowings
    
1,148
      
470
      
2,811
      
1,345
  
Total interest expense
    
6,707
      
1,218
      
14,118
      
3,790
  
                                 
Net interest income
    
15,226
      
14,087
      
46,983
      
42,939
  
Provision for loan losses
    
(944
)
    
163
      
(1,199
)
    
2,431
  
Net interest income after provision for loan losses
    
16,170
      
13,924
      
48,182
      
40,508
  
                                 
Noninterest income:
                                
Service charges on deposit accounts
    
1,132
      
1,052
      
3,583
      
3,279
  
Debit card fees
    
1,082
      
1,024
      
3,362
      
3,214
  
Investment services
    
213
      
216
      
591
      
707
  
E-commerce fees
    
26
      
23
      
81
      
83
  
Bank-owned life insurance
    
340
      
323
      
1,020
      
939
  
Net loss on sale of available-for-sale securities
     -       -
       (251 )     -  
Other operating income
    
266
      
267
      
666
      
850
  
Total noninterest income
    
3,059
      
2,905
      
9,052
      
9,072
  
                                 
Noninterest expense:
                                
Salaries and employee benefits
    
6,193
      
5,332
      
17,070
      
15,103
  
Occupancy expense
    
617
      
549
      
1,654
      
1,627
  
Equipment and furniture expense
    
150
      
186
      
529
      
573
  
Service and data processing fees
    
674
      
649
      
2,040
      
1,937
  
Computer software, supplies and support
    
407
      
356
      
1,157
      
1,128
  
Advertising and promotion
    
115
      
146
      
336
      
345
  
FDIC insurance premiums
    
191
      
225
      
638
      
646
  
Legal and professional fees
    
507
      
258
      
2,655
      
1,075
  
Other
    
1,002
      
613
      
2,525
      
2,178
  
Total noninterest expense
    
9,856
      
8,314
      
28,604
      
24,612
  
                                 
Income before provision for income taxes
    
9,373
      
8,515
      
28,630
      
24,968
  
Provision for income taxes
    
1,282
      
1,327
      
4,305
      
3,789
  
Net income
  
$
8,091
    
$
7,188
    
$
24,325
    
$
21,179
  
                                 
Basic and diluted earnings per share
  
$
0.48
    
$
0.42
     $ 1.43     $ 1.24  
Basic and diluted average shares outstanding
    
17,026,828
      
17,026,828
      
17,026,828
      
17,026,828
  
Dividends per share
  
$
0.070
     $ 0.065     $ 0.210    
$
0.195
  

See notes to consolidated financial statements

4
Greene County Bancorp, Inc.
Consolidated Statements of Comprehensive Income
For the Three and Nine Months Ended March 31, 2023 and 2022
(Unaudited)
(In thousands)

   
For the three months ended
March 31,
    
For the nine months ended
March 31,
  
   
2023
    
2022
    
2023
    
2022
  
Net Income
  
$
8,091
    
$
7,188
    
$
24,325
    
$
21,179
  
Other comprehensive income (loss):
                                
Unrealized holding gains (losses) on available-for-sale securities, gross
    
3,994
      
(13,281
)
    
(2,593
)
    
(16,791
)
Tax effect
    
1,067
      
(3,549
)
    
(693
)
    
(4,487
)
Unrealized holding gains (losses) on available-for-sale securities, net
     2,927       (9,732 )     (1,900 )     (12,304 )
                                 
Reclassification adjustment for loss on sale of available-for-sale securities realized in net income, gross
     -       -       251       -  
Tax effect
     -       -       67       -  
Reclassification adjustment for loss on sale of available-for-sale securities realized in net income, net
     -       -       184       -  
                                 
Total other comprehensive income (loss), net of taxes
    
2,927
      
(9,732
)
    
(1,716
)
    
(12,304
)
                                 
Comprehensive income (loss)
  
$
11,018
    
$
(2,544
)
  
$
22,609
    
$
8,875
  

See notes to consolidated financial statements.

5
Greene County Bancorp, Inc.
Consolidated Statements of Changes in Shareholders’ Equity
For the Three Months Ended March 31, 2023 and 2022
(Unaudited)
(In thousands)

   
Common
Stock
    
Additional
Paid-In
Capital
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
Loss
    
Treasury
Stock
    
Total
Shareholders’
Equity
  
Balance at December 31, 2021
  
$
1,722
    
$
10,156
    
$
152,746
     $ (3,733 )  
$
(908
)
  
$
159,983
  
Dividends declared
    
     
     
(507
)
    
     
     
(507
)
Net income
    
     
     
7,188
      
     
     
7,188
  
Other comprehensive loss, net of taxes
    
     
     
     
(9,732
)
    
      (9,732 )
Balance at March 31, 2022
  
$
1,722
    
$
10,156
    
$
159,427
    
$
(13,465
)
  
$
(908
)
  
$
156,932
  
                                     
   
Common
Stock
    
Additional
Paid-In
Capital
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
Loss
    
Treasury
Stock
    
Total
Shareholders’
Equity
  
Balance at December 31, 2022
  
$
1,722
    
$
10,156
    
$
180,263
    
$
(23,026
)
  
$
(908
)
  
$
168,207
  
Dividends declared
                    
(547
)
                    
(547
)
Net income
                    
8,091
                      
8,091
  
Other comprehensive income, net of taxes
                             2,927            
2,927
Balance at March 31, 2023
  
$
1,722
    
$
10,156
    
$
187,807
    
$
(20,099
)
  
$
(908
)
  
$
178,678
  

Greene County Bancorp, Inc.
Consolidated Statements of Changes in Shareholders’ Equity
For the Nine Months Ended March 31, 2023 and 2022
(Unaudited)
(In thousands)

   
Common
Stock
    
Additional
Paid-In
Capital
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
Loss
    
Treasury
Stock
    
Total
Shareholders’
Equity
  
Balance at June 30, 2021
  
$
1,722
    
$
10,156
     $ 139,775    
$
(1,161
)
  
$
(908
)
  
$
149,584
  
Dividends declared
    
     
     
(1,527
)
    
     
     
(1,527
)
Net income
    
     
     
21,179
      
     
     
21,179
  
Other comprehensive loss, net of taxes
    
     
     
     
(12,304
)
    
     
(12,304
)
Balance at March 31, 2022
  
$
1,722
    
$
10,156
    
$
159,427
    
$
(13,465
)
  
$
(908
)
  
$
156,932
  
                                     
   
Common
Stock
    
Additional
Paid-In
Capital
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
Loss
    
Treasury
Stock
    
Total
Shareholders’
Equity
  
Balance at June 30, 2022  
$
1,722
    
$
10,156
    
$
165,127
    
$
(18,383
)
  
$
(908
)
  
$
157,714
  
Dividends declared
    
     
     
(1,645
)
    
     
     
(1,645
)
Net income
    
     
     
24,325
      
     
     
24,325
  
Other comprehensive loss, net of taxes
    
     
     
     
(1,716
)
    
     
(1,716
)
Balance at March 31, 2023
  
$
1,722
    
$
10,156
    
$
187,807
    
$
(20,099
)
  
$
(908
)
  
$
178,678
  

See notes to consolidated financial statements.

6
Greene County Bancorp, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended March 31, 2023 and 2022
(Unaudited)
(In thousands)
    2023
     2022
  
Cash flows from operating activities:
            
Net Income
  
$
24,325
    
$
21,179
  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation
    
647
      
622
  
Deferred income tax expense (benefit)
    
146
      
(60
)
Net amortization of investment premiums and discounts
    
1,951
      
2,523
  
Net amortization (accretion) of deferred loan costs and fees
    
197
      
(2,934
)
Amortization of subordinated debt issuance costs
    
139
      
118
  
Provision for loan losses
    
(1,199
)
    
2,431
  
Bank-owned life insurance income
    
(1,020
)
    
(939
)
Net loss on sale of available-for-sale securities
     251       -  
Net (gain) loss on equity securities
    
(22
)
    
11
  
Net loss (gain) on sale of foreclosed real estate
     5       (39 )
Net decrease in accrued income taxes
    
(2,089
)
    
(303
)
Net increase in accrued interest receivable
    
(5,075
)
    
(1,714
)
Net increase in prepaid expenses and other assets
    
(767
)
    
(373
)
Net increase in accrued expense and other liabilities
    
239
      
625
  
Net cash provided by operating activities
    
17,728
      
21,147
  
                 
Cash flows from investing activities:
                
Securities available-for-sale:
                
Proceeds from maturities
    
180,225
      
172,614
  
Proceeds from sale of securities
     1,675
       -
  
Purchases of securities
    
(104,456
)
    
(229,025
)
Proceeds from principal payments on securities
    
10,446
      
17,828
  
Securities held-to-maturity:
                
Proceeds from maturities
    
49,576
      
31,102
  
Purchases of securities
    
(42,060
)
    
(281,518
)
Proceeds from principal payments on securities
    
16,133
      
16,324
  
Net redemption of Federal Home Loan Bank Stock
    
5,342
      
-
  
Purchase of long-term certificates of deposit
     (1,225 )     -
  
Maturity of long-term certificates of deposit
    
735
      
425
  
Purchase of bank-owned life insurance
    
-
      
(12,000
)
Net increase in loans receivable
    
(158,426
)
    
(47,110
)
Proceeds from sale of foreclosed real estate
     63       75  
Purchases of premises and equipment
    
(817
)
    
(758
)
Net cash used in investing activities
    
(42,789
)
    
(332,043
)
                 
Cash flows from financing activities
                
Net decrease in short-term FHLB advances
     (123,700 )     -  
Net decrease in short-term advances other banks
    
-
      
(3,000
)
Proceeds from subordinated notes payable
    
-
      
29,501
  
Payment of cash dividends
    
(1,645
)
    
(1,527
)
Net increase in deposits
    
259,719
      
286,762
  
Net cash provided by financing activities
    
134,374
      
311,736
  
                 
Net decrease in cash and cash equivalents
    
109,313
      
840
  
Cash and cash equivalents at beginning of period
    
69,009
      
149,775
  
Cash and cash equivalents at end of period
  
$
178,322
    
$
150,615
  
                 
Non-cash investing activities:
                
    Foreclosed loans transferred to foreclosed real estate
   $ 462     $ 40  
Cash paid during period for:
                
Interest
  
$
14,415
    
$
4,002
  
Income taxes
  
$
6,248
    
$
4,152
  

See notes to consolidated financial statements

7
Greene County Bancorp, Inc.
Notes to Consolidated Financial Statements
At and for the Three and Nine Months Ended March 31, 2023 and 2022

(1)          Basis of Presentation

Within the accompanying unaudited consolidated statements of financial condition, and related notes to the consolidated financial statements, June 30, 2022 data were derived from the audited consolidated financial statements of Greene County Bancorp, Inc. (the “Company”) and its wholly owned subsidiaries, The Bank of Greene County (the “Bank”) and Greene Risk Management, Inc., and the Bank’s wholly owned subsidiaries, Greene County Commercial Bank (the “Commercial Bank”) and Greene Property Holdings, Ltd. The consolidated financial statements at and for the three and nine months ended March 31, 2023 and 2022 are unaudited.

On March 23, 2023, the Company effected a 2-for-1 stock split in the form of a stock dividend on its outstanding shares of common stock. All share and per share data throughout this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the stock split. The shares of common stock retain a par value of $0.10 per share. Accordingly, an amount equal to the par value of the increased shares resulting from the stock split was reclassified from “Additional paid-in capital” to “Common stock”.

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  To the extent that information and notes required by GAAP for complete financial statements are contained in or are consistent with the audited financial statements incorporated by reference to Greene County Bancorp, Inc.’s Annual Report on Form 10-K for the year ended June 30, 2022, such information and notes have not been duplicated herein. In the opinion of management, all adjustments (consisting of only normal recurring items) necessary for a fair presentation of the financial position and results of operations and cash flows at and for the periods presented have been included. The Company had no material reclassifications from amounts in the prior year’s consolidated financial statements to conform to the current year’s presentation.  All material inter-company accounts and transactions have been eliminated in the consolidation. The results of operations and other data for the three and nine months ended March 31, 2023 are not necessarily indicative of results that may be expected for the entire fiscal year ending June 30, 2023. These consolidated financial statements consider events that occurred through the date the consolidated financial statements were issued and should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K.

(2)          Nature of Operations

The Company’s primary business is the ownership and operation of its subsidiaries. At March 31, 2023, the Bank has 17 full-service banking offices, an operations center, customer call center and lending center located in its market area consisting of the Hudson Valley and Capital District Regions of New York State.  The Bank is primarily engaged in the business of attracting deposits from the general public in the Bank’s market area, and investing such deposits, together with other sources of funds, in loans and investment securities. The Commercial Bank’s primary business is to attract deposits from, and provide banking services to, local municipalities. Greene Property Holdings, Ltd. was formed as a New York corporation that has elected under the Internal Revenue Code to be a real estate investment trust.  Currently, certain mortgages and loan notes held by the Bank are transferred and beneficially owned by Greene Property Holdings, Ltd.  The Bank continues to service these loans.  Greene Risk Management, Inc. was formed in December 2014 as a pooled captive insurance company subsidiary of the Company, incorporated in the State of Nevada.  The purpose of this company is to provide additional insurance coverage for the Company and its subsidiaries related to the operations of the Company for which insurance may not be economically feasible.

(3)          Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could materially differ from those estimates.  Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and the assessment of other-than-temporary security impairment.

While management uses available information to recognize losses on loans, future additions to the allowance for loan losses (the “Allowance”) may be necessary, based on changes in economic conditions, asset quality or other factors.  In addition, various regulatory authorities, as an integral part of their examination process, periodically review the Allowance.  Such authorities may require the Company to recognize additions to the Allowance based on their judgments of information available to them at the time of their examination.

8
The Company makes an assessment to determine whether there have been any events or economic circumstances to indicate that a security on which there is an unrealized loss is impaired on an other-than-temporary basis.  The Company considers many factors including the severity and duration of the impairment; the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value; recent events specific to the issuer or industry; and for debt securities, intent to sell the security, whether it is more likely than not we will be required to sell the security before recovery, whether loss is expected, external credit ratings and recent downgrades.  Securities on which there is an unrealized loss that is deemed to be other-than-temporary are written down to fair value through earnings.

(4)          Securities

Securities at March 31, 2023 consisted of the following:

(In thousands)
  
Amortized Cost
    
Gross Unrealized
Gains
    
Gross Unrealized
Losses
    
Estimated
Fair Value
  
Securities available-for-sale:
                        
U.S. government sponsored enterprises
  
$
13,058
    
$
-
    
$
2,054
    
$
11,004
  
U.S. treasury securities
    
18,377
      
-
      
1,712
      
16,665
  
State and political subdivisions
    
171,980
      
635
      
22
      
172,593
  
Mortgage-backed securities-residential
    
30,335
      
-
      
3,801
      
26,534
  
Mortgage-backed securities-multi-family
    
91,113
      
-
      
17,500
      
73,613
  
Corporate debt securities
    
17,906
      
-
      
1,451
      
16,455
  
Total securities available-for-sale
    
342,769
      
635
      
26,540
      
316,864
  
Securities held-to-maturity:
                                
U.S. treasury securities
     33,684       -       2,071       31,613  
State and political subdivisions
    
484,093
      
4,081
      
29,051
      
459,123
  
Mortgage-backed securities-residential
    
38,417
      
-
      
3,089
      
35,328
  
Mortgage-backed securities-multi-family
    
159,113
      
-
      
18,286
      
140,827
  
Corporate debt securities
    
21,637
      
-
      
2,674
      
18,963
  
Other securities
    
39
      
-
      
-
      
39
  
Total securities held-to-maturity
    
736,983
      
4,081
      
55,171
      
685,893
  
Total securities
  
$
1,079,752
    
$
4,716
    
$
81,711
    
$
1,002,757
  

Securities at June 30, 2022 consisted of the following:

(In thousands)
  
Amortized Cost
    
Gross Unrealized
Gains
    
Gross Unrealized
Losses
    
Estimated
Fair Value
  
Securities available-for-sale:
                        
U.S. government sponsored enterprises
  
$
13,066
    
$
-
    
$
1,747
    
$
11,319
  
U.S. treasury securities     20,158       -       1,731       18,427  
State and political subdivisions
    
247,978
      
374
      
276
      
248,076
  
Mortgage-backed securities-residential
    
33,186
      
-
      
3,289
      
29,897
  
Mortgage-backed securities-multi-family
    
99,353
      
-
      
15,644