10q10k10q10k.net

What changed in GREENE COUNTY BANCORP INC's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of GREENE COUNTY BANCORP INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+173 added−168 removedSource: 10-K (2023-09-08) vs 10-K (2022-09-09)

Top changes in GREENE COUNTY BANCORP INC's 2023 10-K

173 paragraphs added · 168 removed · 132 edited across 5 sections

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeAt June 30, 2022, The Bank of Greene County conducted its business through 17 full-service banking offices. The Company owns nine branch offices and lease eight branch offices located within Greene, Columbia, Albany and Ulster Counties. Greene County Commercial Bank conducts its business through the branch offices of The Bank of Greene County.
Biggest changeAt June 30, 2023, The Bank of Greene County conducted its business through 18 full-service banking offices. The Company owns nine branch offices and lease nine branch offices located within Greene, Columbia, Albany, Ulster and Rensselaer Counties of New York State. Greene County Commercial Bank conducts its business through the branch offices of The Bank of Greene County.
In the opinion of management, the physical properties of our holding company and our various subsidiaries are suitable and adequate. For more information on our properties, see Notes 1, 5 and 14 set forth in Part II, Item 8 Financial Statements and Supplementary Data, of this Report.
In the opinion of management, the physical properties of our holding company and our various subsidiaries are suitable and adequate. For more information on our properties, see Notes 1, 5 and 14 set forth in Part II, Item 8 Financial Statements and Supplementary Data, of this Annual Report. 21 Index

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+3 added−1 removed0 unchanged
Biggest changeITEM 3. Legal Proceedings Greene County Bancorp, Inc. and its subsidiaries are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business that, in the aggregate, involve amounts that are believed by management to be immaterial to the consolidated financial condition and consolidated results of operations of Greene County Bancorp, Inc.
Biggest changeITEM 3. Legal Proceedings Except as noted below, the Company, including its subsidiaries, are not currently the subject of any material pending legal proceedings, other than ordinary routine litigation occurring in the normal course of their business.
Removed
ITEM 4. Mine Safety Disclosures Not applicable. PART II
Added
On an ongoing basis, the Company is often the subject of, or a party to, various legal claims by other parties against the Company, by the Company against other parties, or involving the Company, which arise in the normal course of business.
Added
Except as noted below, the various pending legal claims against the Company will not, in the opinion of management based upon consultation with counsel, result in any material liability.
Added
See Note 13 – Commitments and Contingent Liabilities to the Notes to the audited financial statements for a description of a current lawsuit in which the Company has been named a party. ITEM 4. Mine Safety Disclosures Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−0 removed3 unchanged
Biggest changeTherefore, its ability to waive its right to receive dividends beyond this date cannot be reasonably determined at this time. On September 17, 2019, the Board of Directors of the Company adopted a stock repurchase program. Under the repurchase program, the Company is authorized to repurchase up to 200,000 shares of its common stock.
Biggest changeTherefore, its ability to waive its right to receive dividends beyond this date cannot be reasonably determined at this time. 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.
The MHC received the approval of its members (depositors of The Bank of Greene County) and the non-objection of the Federal Reserve Bank of Philadelphia, to waive the MHC’s receipt of quarterly cash dividends aggregating up to $0.60 per share to be declared by the Company for the four quarters ending March 31, 2023.
The MHC received the approval of its members (depositors of The Bank of Greene County) and the non-objection of the Federal Reserve Bank of Philadelphia, to waive the MHC’s receipt of quarterly cash dividends aggregating up to $0.30 per share to be declared by the Company for the four quarters ending March 31, 2023.
Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. At June 30, 2022, the Company had repurchased 24,400 shares.
Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. At June 30, 2023, the Company had repurchased 48,800 shares.
Consequently, shareholders other than the MHC held 3,904,150 shares. 22 Index Payment of dividends on the Company’s common stock is subject to determination and declaration by the Board of Directors and depends upon a number of factors, including capital requirements, regulatory limitations on the payment of dividends, the Company’s results of operations, financial condition, tax considerations and general economic conditions.
Consequently, shareholders other than the MHC held 7,808,300 shares. Payment of dividends on the Company’s common stock is subject to determination and declaration by the Board of Directors and depends upon a number of factors, including capital requirements, regulatory limitations on the payment of dividends, the Company’s results of operations, financial condition, tax considerations and general economic conditions.
As of September 8, 2022 the Company had 440 stockholders of record (excluding the number of persons or entities holding stock in street name through various brokerage firms) and 8,513,414 shares outstanding. As of such date, Greene County Bancorp, MHC (the “MHC”), the Company’s mutual holding company, held 4,609,264 shares of common stock, or 54.1% of total shares outstanding.
As of September 7, 2023 the Company had 435 stockholders of record (excluding the number of persons or entities holding stock in street name through various brokerage firms) and 17,026,828 shares outstanding. As of such date, Greene County Bancorp, MHC (the “MHC”), the Company’s mutual holding company, held 9,218,528 shares of common stock, or 54.1% of total shares outstanding.
There were no repurchases during the fiscal year ended June 30, 2022. ITEM 6. [Reserved]
There were no repurchases during the fiscal year ended June 30, 2023.
Added
All share and per share data throughout this Annual Report on Form 10-K have been retroactively adjusted to reflect the stock split. On September 17, 2019, the Board of Directors of the Company adopted a stock repurchase program. Under the repurchase program, the Company is authorized to repurchase up to 400,000 shares of its common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

113 edited+35 added−34 removed55 unchanged
Biggest changeDeposits increased during the year ended June 30, 2022 as a result of an increase in new account relationships and stimulus funds deposited across all three of our primary business lines, retail, commercial and municipal. 32 Index At June 30, 2022 2021 2020 (Dollars in thousands) Amount Percent Amount Percent Amount Percent Transaction and savings deposits: Noninterest-bearing deposits $ 187,697 8.5 % $ 174,114 8.7 % $ 138,187 9.2 % Certificates of deposit 40,801 1.8 34,791 1.7 35,625 2.4 Savings deposits 343,731 15.5 301,050 15.0 241,371 16.1 Money market deposits 157,623 7.1 145,832 7.3 133,970 8.9 NOW deposits 1,482,752 67.0 1,349,321 67.3 951,922 63.4 Total deposits $ 2,212,604 100.0 % $ 2,005,108 100.0 % $ 1,501,075 100.0 % The following table summarizes total uninsured deposits based on the same methodologies and assumptions used for the bank regulatory reporting: At June 30, (Dollars in thousands) 2022 2021 2020 Estimated amount of uninsured deposits $ 328,352 $ 278,632 $ 172,852 The following table presents the maturity distribution of certificates of deposits of $250,000 or more: (Dollars in thousands) At June 30, 2022 Portion of certificates of deposits in excess of insurance limits $ 3,385 Certificates of deposits otherwise uninsured with a maturity of: Within three months $ 1,401 After three but within six months 300 After six but within twelve months 301 Over twelve months 1,383 The amount of certificates of deposit by time remaining to maturity as of June 30, 2022 is set forth in Part II, Item 8 Financial Statements and Supplemental Data, Note 6, Deposits of this Report.
Biggest changeAt June 30, 2023 2022 2021 (Dollars in thousands) Amount Percent Amount Percent Amount Percent Transaction and savings deposits: Noninterest-bearing deposits $ 159,039 6.5 % $ 187,697 8.5 % $ 174,114 8.7 % Certificates of deposit 128,077 5.3 40,801 1.8 34,791 1.7 Savings deposits 299,038 12.3 343,731 15.5 301,050 15.0 Money market deposits 115,029 4.7 157,623 7.1 145,832 7.3 NOW deposits 1,735,978 71.2 1,482,752 67.0 1,349,321 67.3 Total deposits $ 2,437,161 100.0 % $ 2,212,604 100.0 % $ 2,005,108 100.0 % The following table summarizes total uninsured deposits based on the same methodologies and assumptions used for the Bank’s regulatory reporting: At June 30, (Dollars in thousands) 2023 2022 2021 Estimated amount of uninsured for Bank of Greene County $ 368,566 $ 328,352 $ 278,632 Estimated amount of uninsured for Greene County Commercial Bank 1 $ 941,634 $ 858,015 $ 769,247 1 All of Greene County Commercial Bank deposits in excess of FDIC insurance limits are fully collateralized.
Assets that do not currently expose the insured financial institutions to sufficient risk to warrant classification in one of the aforementioned categories but otherwise possess weaknesses are designated “Special Mention.” For further discussion regarding how management determines when a loan should be classified, see Part II, Item 8 Financial Statements and Supplemental Data, Note 4, Loans of this Report.
Assets that do not currently expose the insured financial institutions to sufficient risk to warrant classification in one of the aforementioned categories but otherwise possess weaknesses are designated “Special Mention.” For further discussion regarding how management determines when a loan should be classified, see Part II, Item 8 Financial Statements and Supplemental Data, Note 4, Loans of this Annual Report.
Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services. 40 Index IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS Recent accounting pronouncements which may impact the Company’s financial statements are discussed within Part II, Item 8 Financial Statements and Supplementary Data, Note 1 Summary of significant accounting policies of this Report.
Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services. 40 Index IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS Recent accounting pronouncements which may impact the Company’s financial statements are discussed within Part II, Item 8 Financial Statements and Supplementary Data, Note 1 Summary of significant accounting policies of this Annual Report.
Mortgage-backed securities and asset-backed securities held within the portfolio do not contain sub-prime loans and are not exposed to the credit risk associated with such lending. Investment Maturity Schedule The following table set forth information with regard to contractual maturities of debt securities shown in amortized cost ($) and weighted average yield (%) at June 30, 2022.
Mortgage-backed securities and asset-backed securities held within the portfolio do not contain sub-prime loans and are not exposed to the credit risk associated with such lending. Investment Maturity Schedule The following table set forth information with regard to contractual maturities of debt securities shown in amortized cost ($) and weighted average yield (%) at June 30, 2023.
The MHC’s ability to waive the receipt of dividends is dependent upon annual approval of its members as well as receiving the non-objection of the Federal Reserve Board. 34 Index Comparison of Operating Results for the Years Ended June 30, 2022 and 2021 Average Balance Sheet The following table sets forth certain information relating to the Company for the years ended June 30, 2022 and 2021.
The MHC’s ability to waive the receipt of dividends is dependent upon annual approval of its members as well as receiving the non-objection of the Federal Reserve Board. 34 Index Comparison of Operating Results for the Years Ended June 30, 2023 and 2022 Average Balance Sheet The following table sets forth certain information relating to the Company for the years ended June 30, 2023 and 2022.
The RPAs participations-ins are spread out over four financial institution counterparties and terms range between 5 to 14 years. Capital Resources. The Company and the Bank considers current needs and future growth, with the sources of capital being the retention of earnings, less dividends paid, and proceeds from the issuance of subordinated debt.
The RPAs participations-ins are spread out over four financial institution counterparties and terms range between 4 to 14 years. Capital Resources. The Company and the Bank considers current needs and future growth, with the sources of capital being the retention of earnings, less dividends paid, and proceeds from the issuance of subordinated debt.
These activities were funded primarily through deposit growth, and principal payments on loans and securities and borrowings. Loan sales did not provide an additional source of liquidity during the years ended June 30, 2022 and 2021, as the Company originated loans for retention in its portfolio.
These activities were funded primarily through deposit growth, and principal payments on loans and securities, and borrowings. Loan sales did not provide an additional source of liquidity during the years ended June 30, 2023 and 2022, as the Company originated loans for retention in its portfolio.
The Company evaluates nonaccrual loans that are over $250 thousand and all trouble debt restructured loans individually for impairment, if it is probable that the Company will not be able to collect scheduled payments of principal and interest when due, according to the contractual terms of the loan agreements.
The Company evaluates nonaccrual loans that are over $250,000 and all trouble debt restructured loans individually for impairment, if it is probable that the Company will not be able to collect scheduled payments of principal and interest when due, according to the contractual terms of the loan agreements.
RPAs where the Company acts as the lead bank are referred to as “participations-out,” in reference to the credit risk associated with the customer derivatives being transferred out of the Company. Participations-out generally occur concurrently with the sale of new customer derivatives. The Company had no participations-out at June 30, 2022 or 2021.
RPAs where the Company acts as the lead bank are referred to as “participations-out,” in reference to the credit risk associated with the customer derivatives being transferred out of the Company. Participations-out generally occur concurrently with the sale of new customer derivatives. The Company had no participations-out at June 30, 2023 or 2022.
Treasury and the Federal Reserve, (f) changes in the quality or composition of Greene County Bancorp, Inc.’s loan and investment portfolios, (g) deposit flows, (h) competition, and (i) demand for financial services in Greene County Bancorp, Inc.’s market area.
Treasury and the Federal Reserve, (g) changes in the quality or composition of Greene County Bancorp, Inc.’s loan and investment portfolios, (h) deposit flows, (i) competition, and (j) demand for financial services in Greene County Bancorp, Inc.’s market area.
At June 30, 2022 and 2021, The Bank of Greene County and Greene County Commercial Bank exceeded all of their regulatory capital requirements, as illustrated in Part II, Item 8 Financial Statements and Supplementary Data Note 17. Regulatory Matters of this Report. Shareholders’ equity represented 6.1% and 6.8% of total consolidated assets at June 30, 2022 and 2021, respectively.
At June 30, 2023 and 2022, The Bank of Greene County and Greene County Commercial Bank exceeded all of their regulatory capital requirements, as illustrated in Part II, Item 8 Financial Statements and Supplementary Data Note 17. Regulatory Matters of this Annual Report. Shareholders’ equity represented 6.8% and 6.1% of total consolidated assets at June 30, 2023 and 2022, respectively.
These loans will be returned to accrual status once they have demonstrated a history of timely payments. For additional details on impaired loans, see the table in Part II, Item 8 Financial Statements and Supplemental Data, Note 4, Loans of this Report.
These loans will be returned to accrual status once they have demonstrated a history of timely payments. 29 Index For additional details on impaired loans, see the table in Part II, Item 8 Financial Statements and Supplemental Data, Note 4, Loans of this Annual Report.
The MHC waived its right to receive dividends declared during the three months ended; September 30, 2020; December 31, 2020; June 30, 2021; September 30, 2021; December 31, 2021 and March 31, 2022. Dividends declared during the three months ended March 31, 2021 and June 30, 2022 were paid to the MHC.
The MHC waived its right to receive dividends declared during the three months ended, September 30, 2021, December 31, 2021, March 31, 2022, September 30, 2022, December 31, 2022, March 31, 2023 and June 30, 2023. Dividends declared during the three months ended June 30, 2022 were paid to the MHC.
The rate used for this adjustment was approximately 21% for federal income taxes for the periods ended June 30, 2022 and 2021, and 4.44% for New York State income taxes for the periods ended June 30, 2022 and 2021.
The rate used for this adjustment was approximately 21% for federal income taxes for the periods ended June 30, 2023 and 2022, and 4.44% for New York State income taxes for the periods ended June 30, 2023 and 2022.
At June 30, 2022, The Bank of Greene County operated 17 full-service branches, an administration office, a customer call center, a lending center, and an operations center in New York’s Hudson Valley Region. In June 2004, Greene County Commercial Bank (“Commercial Bank”) was opened for the limited purpose of providing financial services to local municipalities.
At June 30, 2023, The Bank of Greene County operated 18 full-service branches, an administration office, a customer call center, a lending center, and an operations center in New York’s Hudson Valley Region. In June 2004, Greene County Commercial Bank (“Commercial Bank”) was opened for the limited purpose of providing financial services to local municipalities.
LIQUIDITY AND CAPITAL RESOURCES Liquidity resources. The Company’s primary sources of funds are deposits and proceeds from principal and interest payments on loans and securities, as well as lines of credit and term borrowing facilities available through the Federal Home Loan Bank as needed.
The Company’s primary sources of funds are deposits and proceeds from principal and interest payments on loans and securities, as well as lines of credit and term borrowing facilities available through the Federal Home Loan Bank as needed.
At June 30, 2022 and June 30, 2021, respectively, nonperforming assets were 0.25% and 0.11% of total assets, and nonperforming loans were 0.50% and 0.21% of net loans, with deterioration split primarily in residential real estate loans and commercial loans, year over year.
At June 30, 2023 and June 30, 2022, respectively, nonperforming assets were 0.21% and 0.25% of total assets, and nonperforming loans were 0.39% and 0.50% of net loans, with deterioration split primarily in residential real estate loans and commercial loans, year over year.
Certificates of deposit scheduled to mature in one year or less from June 30, 2022 totaled $26.8 million. Based upon the Company’s experience and its current pricing strategy, management believes that a significant portion of such deposits will remain with the Company.
Certificates of deposit scheduled to mature in one year or less from June 30, 2023 totaled $116.0 million. Based upon the Company’s experience and its current pricing strategy, management believes that a significant portion of such deposits will remain with the Company.
Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. There was no credit exposure associated with risk participations-ins as of June 30, 2022 due to the recent rise in interest rate and was $7.2 million at June 30, 2021.
Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. There was no credit exposure associated with risk participations-ins as of June 30, 2023 and June 30, 2022 due to the rise in interest rate.
Other comprehensive loss increased during the year due to the change in the market value of securities available for sale . On September 17, 2019, the Board of Directors of the Company adopted a stock repurchase program. Under the repurchase program, the Company may repurchase up to 200,000 shares of its common stock.
Other comprehensive loss increased during the year due to the change in market values of securities available for sale, resulting from the increases in market interest rates . On September 17, 2019, the Board of Directors of the Company adopted a stock repurchase program. Under the repurchase program, the Company may repurchase up to 200,000 shares of its common stock.
As the above table shows, net interest income for the fiscal year ended June 30, 2022 has been affected most significantly by the increase in volume of loans and securities, partially offset by an increase in volume of interest-bearing liabilities and a decrease in rate on interest-earning assets.
As the above table shows, net interest income for the fiscal year ended June 30, 2023 has been affected most significantly by the increase in volume of loans and securities and the increase in rate on all interest-earning assets. This was partially offset by an increase in volume and rate of interest-bearing liabilities.
Factors that could affect actual results include but are not limited to: (a) changes in general market interest rates, (b) general economic conditions, (c) economic or policy changes related to the COVID-19 pandemic, (d) legislative and regulatory changes, (e) monetary and fiscal policies of the U.S.
Factors that could affect actual results include but are not limited to: (a) changes in general market interest rates, (b) general economic conditions, (c) economic or policy changes related to the COVID-19 pandemic, (d) continued period of high inflation could adversely impact customers, (e) legislative and regulatory changes, (f) monetary and fiscal policies of the U.S.
The Company’s primary investing activities are the origination of residential and commercial real estate mortgage loans, other consumer and commercial loans, and the purchase of securities. Loan originations exceeded repayments by $143.4 million and $92.9 million and purchases of securities totaled $669.2 million and $626.6 million for the years ended June 30, 2022 and 2021, respectively.
The Company’s primary investing activities are the origination of residential and commercial real estate mortgage loans, other consumer and commercial loans, and the purchase of securities. Loan originations exceeded repayments by $157.9 million and $143.4 million and purchases of securities totaled $212.0 million and $669.2 million for the years ended June 30, 2023 and 2022, respectively.
At June 30, 2022, approximately 56.4% of the loan portfolio was adjustable rate, of which a large portion is tied to the Prime Rate. Interest income earned on securities (excluding FHLB stock) increased to $16.1 million for the year ended June 30, 2022 as compared to $12.9 million for the year ended June 30, 2021.
At June 30, 2023, approximately 58.4% of the loan portfolio was adjustable rate, of which a large portion is tied to the Prime Rate. Interest income earned on securities (excluding FHLB stock) increased to $22.8 million for the year ended June 30, 2023 as compared to $16.1 million for the year ended June 30, 2022.
Lines of credit with no specified maturity date are included in the category “Within 1 Year.” Home equity loans are included within consumer loan portfolio below.
Lines of credit with no specified maturity date are included in the category “1 Year or Less.” Home equity loans are included within consumer loan portfolio below.
The Company holds 63.4% of its securities portfolio at June 30, 2022 in state and political subdivision securities to take advantage of tax savings and to promote the Company’s participation in the communities in which it operates.
The Company holds 61.2% of its securities portfolio at June 30, 2023 in state and political subdivision securities to take advantage of tax savings and to promote the Company’s participation in the communities in which it operates.
At June 30, 2022 2021 2020 2019 2018 Percent Percent Percent Percent Percent of loans of loans of loans of loans of loans in each in each in each in each in each Amount of category Amount of category Amount of category Amount of category Amount of category loan loss to total loan loss to total loan loss to total loan loss to total loan loss to total (Dollars in thousands) allowance loans allowance loans allowance loans allowance loans allowance loans Residential real estate $ 2,373 28.8 % $ 2,012 29.3 % $ 2,091 27.6 % $ 2,026 33.6 % $ 2,116 35.8 % Residential construction and land 141 1.2 106 0.9 141 1.2 87 0.9 114 1.4 Multi-family 119 5.1 186 3.8 176 2.5 180 3.1 162 2.1 Commercial real estate 16,221 47.6 13,049 42.7 8,634 37.6 7,110 41.3 5,979 39.6 Commercial construction 1,114 6.7 1,535 5.7 2,053 7.4 872 4.5 950 5.5 Home equity 89 1.4 165 1.6 295 2.2 314 2.9 317 3.1 Consumer installment 349 0.4 267 0.5 197 0.5 250 0.7 224 0.7 Commercial loans 2,355 8.8 2,348 15.5 2,804 21.0 2,361 13.0 2,128 11.8 Unallocated - - - - - - - - 34 - Totals $ 22,761 100.0 % $ 19,668 100.0 % $ 16,391 100.0 % $ 13,200 100.0 % $ 12,024 100.0 % For further discussion and detail regarding the Allowance for Loan Loss, please refer to Part II, Item 8 Financial Statements and Supplemental Data, Note 4 Loans of this Report .
At June 30, 2023 2022 2021 2020 2019 (Dollars in thousands) Amount of loan loss allowance Percent of loans in each category to total loans Amount of loan loss allowance Percent of loans in each category to total loans Amount of loan loss allowance Percent of loans in each category to total loans Amount of loan loss allowance Percent of loans in each category to total loans Amount of loan loss allowance Percent of loans in each category to total loans Residential real estate $ 2,613 26.4 % $ 2,373 28.8 % $ 2,012 29.3 % $ 2,091 27.6 % $ 2,026 33.6 % Residential construction and land 181 1.4 141 1.2 106 0.9 141 1.2 87 0.9 Multi-family 197 4.7 119 5.1 186 3.8 176 2.5 180 3.1 Commercial real estate 13,020 49.2 16,221 47.6 13,049 42.7 8,634 37.6 7,110 41.3 Commercial construction 1,622 8.7 1,114 6.7 1,535 5.7 2,053 7.4 872 4.5 Home equity 46 1.6 89 1.4 165 1.6 295 2.2 314 2.9 Consumer installment 332 0.3 349 0.4 267 0.5 197 0.5 250 0.7 Commercial loans 3,201 7.7 2,355 8.8 2,348 15.5 2,804 21.0 2,361 13.0 Unallocated - - - - - - - - - - Totals $ 21,212 100.0 % $ 22,761 100.0 % $ 19,668 100.0 % $ 16,391 100.0 % $ 13,200 100.0 % For further discussion and detail regarding the Allowance for Loan Loss, please refer to Part II, Item 8 Financial Statements and Supplemental Data, Note 4 Loans of this Annual Report .
No adjustments have been made for dividends waived by Greene County Bancorp, MHC (“MHC”), the owner of 54.1% of the Company’s shares outstanding. 2 Dividends declared divided by net income.
No adjustments have been made to account for dividends waived by Greene County Bancorp, MHC (“MHC”), the Company’s majority shareholder, owning 54.1% of the shares outstanding. 2 Dividends declared divided by net income.
At June 30, 2022 2021 2020 2019 2018 (Dollars in thousands) Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Residential real estate $ 360,824 28.82 % $ 325,167 29.34 % $ 279,332 27.58 % $ 267,802 33.55 % $ 255,848 35.75 % Residential construction and land 15,298 1.22 10,185 0.92 11,847 1.17 7,462 0.93 9,951 1.39 Multi-family 63,822 5.10 41,951 3.78 25,104 2.48 24,592 3.08 14,961 2.09 Commercial real estate 595,635 47.57 472,887 42.66 381,415 37.67 329,668 41.31 283,935 39.68 Commercial construction 83,748 6.69 62,763 5.66 74,920 7.40 36,361 4.56 39,366 5.50 Home equity 17,877 1.43 18,285 1.65 22,106 2.18 23,185 2.91 21,919 3.06 Consumer installment (1) 4,512 0.36 4,942 0.45 4,817 0.48 5,481 0.69 5,017 0.70 Commercial loans 110,271 8.81 172,228 15.54 213,119 21.04 103,554 12.97 84,644 11.83 Total gross loans $ 1,251,987 100.00 % $ 1,108,408 100.00 % $ 1,012,6 60 100.00 % $ 798,105 100.00 % $ 715,641 100.00 % (1) Includes direct automobile loans (on both new and used automobiles) and personal loans. 27 Index Loan Maturity Schedule and Interest Rate Sensitivity The following table sets forth certain information as of June 30, 2022 regarding the amount of loans maturing or re-pricing in the Company's portfolio.
At June 30, 2023 2022 2021 2020 2019 (Dollars in thousands) Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Residential real estate $ 372,443 26.44 % $ 360,824 28.82 % $ 325,167 29.34 % $ 279,332 27.58 % $ 267,802 33.55 % Residential construction and land 19,072 1.35 15,298 1.22 10,185 0.92 11,847 1.17 7,462 0.93 Multi-family 66,496 4.72 63,822 5.10 41,951 3.78 25,104 2.48 24,592 3.08 Commercial real estate 693,436 49.22 595,635 47.57 472,887 42.66 381,415 37.67 329,668 41.31 Commercial construction 121,958 8.66 83,748 6.69 62,763 5.66 74,920 7.40 36,361 4.56 Home equity 22,752 1.61 17,877 1.43 18,285 1.65 22,106 2.18 23,185 2.91 Consumer installment (1) 4,612 0.33 4,512 0.36 4,942 0.45 4,817 0.48 5,481 0.69 Commercial loans 108,022 7.67 110,271 8.81 172,228 15.54 213,119 21.04 103,554 12.97 Total gross loans $ 1,408,791 100.00 % $ 1,251,987 100.00 % $ 1,108,408 100.00 % $ 1,012,6 60 100.00 % $ 798,105 100.00 % (1) Includes direct automobile loans (on both new and used automobiles) and personal loans. 27 Index Loan Maturity Schedule and Interest Rate Sensitivity The following table sets forth certain information as of June 30, 2023 regarding the amount of loans maturing or re-pricing in the Company’s portfolio.
As of June 30, 2022, the Company had repurchased a total of 24,400 shares of the 200,000 shares authorized by the repurchase program. The Company did not repurchase any shares during the year ended June 30, 2022.
As of June 30, 2023, the Company had repurchased a total of 48,800 shares of the 400,000 shares authorized by the repurchase program. The Company did not repurchase any shares during the year ended June 30, 2023.
The allowance for loan losses is increased by a provision for loan losses (which results in a charge to expense) and recoveries of loans previously charged-off and is reduced by charge-offs. Loans classified as substandard or special mention totaled $52.1 million at June 30, 2022 compared to $49.7 million at June 30, 2021, an increase of $2.4 million.
The allowance for loan losses is increased by a provision for loan losses (which results in a charge to expense) and recoveries of loans previously charged-off and is reduced by charge-offs. Loans classified as substandard or special mention totaled $41.9 million at June 30, 2023 compared to $52.1 million at June 30, 2022, a decrease of $10.2 million.
Interest income earned on federal funds and interest-earning deposits amounted to $157,000 for the year ended June 30, 2022 as compared to $81,000 for the year ended June 30, 2021.
Interest income earned on federal funds and interest-earning deposits amounted to $1.6 million for the year ended June 30, 2023 as compared to $157,000 for the year ended June 30, 2022.
The levels of these assets are dependent on the Company’s operating, financing, lending and investing activities during any given period. At June 30, 2022, cash and cash equivalents totaled $69.0 million, or 2.7% of total assets.
The levels of these assets are dependent on the Company’s operating, financing, lending and investing activities during any given period. At June 30, 2023, cash and cash equivalents totaled $196.4 million, or 7.3% of total assets.
The amount of funds available to the Company through the FHLB line of credit is reduced by any letters of credit outstanding. There were no municipal letters of credit outstanding at June 30, 2022.
The amount of funds available to the Company through the FHLB line of credit is reduced by any letters of credit outstanding. There were $110.0 million in municipal letters of credit outstanding at June 30, 2023.
Selected Equity Data: At June 30, 2022 2021 Shareholders’ equity to total assets, at end of period 6.13 % 6.80 % Book value per share $ 18.53 $ 17.57 Closing market price of common stock $ 45.29 $ 28.12 For the years ended June 30, 2022 2021 Average shareholders’ equity to average assets 6.60 % 7.12 % Dividend payout ratio 1 15.81 % 17.08 % Actual dividends paid to net income 2 9.41 % 10.15 % 1 The dividend payout ratio has been calculated based on the dividends declared per share divided by basic earnings per share.
Selected Equity Data: At June 30, 2023 2022 Shareholders’ equity to total assets, at end of period 6.79 % 6.13 % Book value per share 1 $ 10.76 $ 9.26 Closing market price of common stock 1 $ 29.80 $ 22.65 For the years ended June 30, 2023 2022 Average shareholders’ equity to average assets 6.58 % 6.60 % Dividend payout ratio 1 15.47 % 15.85 % Actual dividends paid to net income 2 7.12 % 9.41 % 1 The dividend payout ratio has been calculated based on the dividends declared per share divided by basic earnings per share.
Impaired loans include loans that have been modified in a troubled debt restructuring and are performing under the modified terms and have therefore been returned to performing status. 29 Index Residential real estate impaired loans amounted to $2.9 million as of June 20, 2022, as compared to $1.1 million as of June 30, 2021, an increase of $1.8 million.
Impaired loans include loans that have been modified in a troubled debt restructuring and are performing under the modified terms and have therefore been returned to performing status. Commercial real estate impaired loans amounted to $5.3 million as of June 30, 2023, as compared to $3.8 million as of June 30, 2022, an increase of $1.5 million.
On September 15, 2021, the Company entered into Subordinated Note Purchase Agreements with 18 qualified institutional investors, issued at 3.00% Fixed-to-Floating Rate due September 15, 2031, in the aggregate principal amount of $30.0 million, carried net of issuance costs of $499,000 amortized over a period of 60 months. These notes are callable on September 15, 2026.
At June 30, 2023, there were $19.8 million of Subordinated Note Purchases Agreements outstanding, net of issuance costs. 33 Index On September 15, 2021, the Company entered into Subordinated Note Purchase Agreements with 18 qualified institutional investors, issued at 3.00% Fixed-to-Floating Rate due September 15, 2031, in the aggregate principal amount of $30.0 million, carried net of issuance costs of $499,000 amortized over a period of 60 months.
Deposits grew $207.5 million, or 10.4%, to $2.2 billion at June 30, 2022 as compared to $2.0 billion at June 30, 2021. Total shareholders’ equity amounted to $157.7 million and $149.6 million at June 30, 2022 and 2021, respectively, or 6.1% and 6.8% of total assets, respectively.
Deposits grew $224.6 million, or 10.1%, to $2.4 billion at June 30, 2023 as compared to $2.2 billion at June 30, 2022. Total shareholders’ equity amounted to $183.3 million and $157.7 million at June 30, 2023 and 2022, respectively, or 6.8% and 6.1% of total assets, respectively.
The average rate paid on savings and money market accounts decreased 8 basis points to 0.16% for the year ended June 30, 2022 as compared to 0.24% for the year ended June 30, 2021.
The average rate paid on savings and money market accounts increased 4 basis points to 0.20% for the year ended June 30, 2023 as compared to 0.16% for the year ended June 30, 2022.
Total average interest-bearing liabilities increased to $2.0 billion for the year ended June 30, 2022 as compared to $1.6 billion for the year ended June 30, 2021, an increase of $382.6 million, or 23.7%. Much of this increase related to NOW accounts, primarily resulting from growth in new deposit relationships within our retail, commercial and municipal lines of business.
Total average interest-bearing liabilities increased to $2.2 billion for the year ended June 30, 2023 as compared to $2.0 billion for the year ended June 30, 2022, an increase of $213.9 million, or 10.7%. The majority of the increase related to NOW accounts, primarily resulting from growth in new deposit relationships within our business and municipal accounts.
Analysis of allowance for loan losses activity At or for the Years Ended June 30, (Dollars in thousands) 2022 2021 2020 2019 2018 Balance at the beginning of the period $ 19,668 $ 16,391 $ 13,200 $ 12,024 $ 11,022 Charge-offs: Residential real estate 27 26 102 287 141 Commercial real estate - - - 74 - Consumer installment 454 309 459 374 318 Commercial loans 112 500 335 51 159 Total loans charged off 593 835 896 786 618 Recoveries: Residential real estate 13 13 16 13 - Consumer installment 115 124 130 137 85 Commercial loans 280 1 36 153 5 Total recoveries 408 138 182 303 90 Net charge-offs 185 697 714 483 528 Provisions charged to operations 3,278 3,974 3,905 1,659 1,530 Balance at the end of the period $ 22,761 $ 19,668 $ 16,391 $ 13,200 $ 12,024 Allowance for loan losses to total loans receivable 1.82 % 1.77 % 1.62 % 1.65 % 1.68 % Residential real estate net charge-offs to average loans outstanding 0.00 % 0.00 % 0.01 % 0.04 % 0.02 % Commercial real estate net charge-offs to average loans outstanding - - - 0.01 % - Consumer installment net charge-offs to average loans outstanding 0.03 % 0.02 % 0.04 % 0.03 % 0.04 % Commercial loans net charge-offs to average loans outstanding (0.01 %) 0.05 % 0.03 % (0.01 %) 0.02 % Net charge-offs to average loans outstanding 0.02 % 0.07 % 0.08 % 0.06 % 0.08 % Net charge-offs to average assets 0.01 % 0.04 % 0.05 % 0.04 % 0.05 % 31 Index Allocation of Allowance for Loan Losses The following table sets forth the allocation of the allowance for loan losses by loan category at the dates indicated.
We have not originated “no documentation” mortgage loans and our loan portfolio does not include any mortgage loans that we classify as sub-prime. 30 Index Analysis of allowance for loan losses activity At or for the Years Ended June 30, (Dollars in thousands) 2023 2022 2021 2020 2019 Balance at the beginning of the period $ 22,761 $ 19,668 $ 16,391 $ 13,200 $ 12,024 Charge-offs: Residential real estate - 27 26 102 287 Commercial real estate 9 - - - 74 Consumer installment 535 454 309 459 374 Commercial loans 120 112 500 335 51 Total loans charged off 664 593 835 896 786 Recoveries: Residential real estate 6 13 13 16 13 Commercial real estate 4 - - - - Consumer installment 141 115 124 130 137 Commercial loans 35 280 1 36 153 Total recoveries 186 408 138 182 303 Net charge-offs 478 185 697 714 483 Provisions (benefit) charged to operations (1,071 ) 3,278 3,974 3,905 1,659 Balance at the end of the period $ 21,212 $ 22,761 $ 19,668 $ 16,391 $ 13,200 Allowance for loan losses to total loans receivable 1.51 % 1.82 % 1.77 % 1.62 % 1.65 % Residential real estate net charge-offs to average loans outstanding 0.00 % 0.00 % 0.00 % 0.01 % 0.04 % Commercial real estate net charge-offs to average loans outstanding 0.00 % - - - 0.01 % Consumer installment net charge-offs to average loans outstanding 0.03 % 0.03 % 0.02 % 0.04 % 0.03 % Commercial loans net charge-offs to average loans outstanding 0.01 % (0.01 %) 0.05 % 0.03 % (0.01 %) Net charge-offs to average loans outstanding 0.04 % 0.02 % 0.07 % 0.08 % 0.06 % Net charge-offs to average assets 0.02 % 0.01 % 0.04 % 0.05 % 0.04 % 31 Index Allocation of Allowance for Loan Losses The following table sets forth the allocation of the allowance for loan losses by loan category at the dates indicated.
The yield earned on such assets decreased 31 basis points to 2.77% for the year ended June 30, 2022 as compared to 3.08% for the year ended June 30, 2021. Interest income earned on loans increased to $47.1 million for the year ended June 30, 2022 as compared to $45.3 million for the year ended June 30, 2021.
The yield earned on such assets increased 62 basis points to 3.39% for the year ended June 30, 2023 as compared to 2.77% for the year ended June 30, 2022. Interest income earned on loans increased to $60.0 million for the year ended June 30, 2023 as compared to $47.1 million for the year ended June 30, 2022.
The increase in residential real estate impaired loans was the result of nine relationships continuing to deteriorate and moving into nonaccrual status, and therefore classified as impaired. The average recorded investment of these new impaired loans was $193,000 as of June 30, 2022.
The increase in commercial real estate impaired loans was the result of four relationships continuing to deteriorate and moving into nonaccrual status, and therefore classified as impaired. The average recorded investment of these new impaired loans was $1.0 million as of June 30, 2023.
These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements, since results in future periods may differ materially from those currently expected because of various risks and uncertainties. 23 Index Selected Financial Data At or for the year ended June 30, (Dollars in thousands, except per share amounts) 2022 2021 2020 SELECTED FINANCIAL CONDITION DATA: Total assets $ 2,571,740 $ 2,200,335 $ 1,676,803 Loans receivable, net 1,229,355 1,085,947 993,522 Securities available-for-sale 408,062 390,890 226,709 Securities held-to-maturity 761,852 496,914 383,657 Equity securities 273 307 267 Deposits 2,212,604 2,005,108 1,501,075 Borrowings 123,700 3,000 25,484 Shareholders' equity 157,714 149,584 128,805 AVERAGE BALANCES: Total assets 2,366,070 1,931,589 1,470,870 Interest-earning assets 2,291,448 1,892,650 1,450,398 Loans receivable, net 1,123,201 1,042,280 861,322 Securities 1,066,189 751,690 528,131 Deposits 2,134,584 1,750,733 1,318,027 Borrowings 51,193 22,386 15,300 Shareholders' equity 156,098 137,511 120,387 SELECTED OPERATIONS DATA: Total interest income 63,444 58,328 53,314 Total interest expense 5,439 5,183 8,481 Net interest income 58,005 53,145 44,833 Provision for loan losses 3,278 3,974 3,905 Net interest income after provision for loan losses 54,727 49,171 40,928 Total noninterest income 12,137 9,667 8,650 Total noninterest expense 33,959 31,223 27,822 Income before provision for income taxes 32,905 27,615 21,756 Provision for income taxes 4,919 3,673 3,029 Net income 27,986 23,942 18,727 FINANCIAL RATIOS: Return on average assets 1 1.18 % 1.24 % 1.27 % Return on average shareholders’ equity 2 17.93 17.41 15.56 Noninterest expenses to average total assets 1.44 1.62 1.89 Average interest-earning assets to average interest-bearing liabilities 114.57 117.01 118.84 Net interest rate spread 3 2.50 2.76 2.98 Net interest margin 4 2.53 2.81 3.09 Efficiency ratio 5 48.41 49.71 52.02 Shareholders’ equity to total assets, at end of period 6.13 6.80 7.68 Average shareholders’ equity to average assets 6.60 7.12 8.18 Dividend payout ratio 6 15.81 17.08 20.00 Actual dividends declared to net income 7 9.41 10.15 11.95 Nonperforming assets to total assets, at end of period 0.25 0.11 0.24 Nonperforming loans to net loans, at end of period 0.51 0.21 0.41 Allowance for loan losses to nonperforming loans 360.31 854.76 402.04 Allowance for loan losses to total loans receivable 1.82 1.77 1.62 Book value per share 8 $ 18.53 $ 17.57 $ 15.13 Basic earnings per share 3.29 2.81 2.20 Diluted earnings per share 3.29 2.81 2.20 OTHER DATA: Closing market price of common stock $ 45.29 $ 28.12 $ 22.30 Number of full-service offices 17 17 16 Number of full-time equivalent employees 198 186 182 1 Ratio of net income to average total assets. 2 Ratio of net income to average shareholders’ equity. 3 The difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. 4 Net interest income as a percentage of average interest-earning assets. 5 Noninterest expense divided by the sum of net interest income and noninterest income. 6 Dividends per share divided by basic earnings per share.
These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements, since results in future periods may differ materially from those currently expected because of various risks and uncertainties. 23 Index Selected Financial Data At or for the year ended June 30, (Dollars in thousands, except per share amounts) 2023 2022 2021 SELECTED FINANCIAL CONDITION DATA: Total assets $ 2,698,283 $ 2,571,740 $ 2,200,335 Loans receivable, net 1,387,654 1,229,355 1,085,947 Securities available-for-sale 281,133 408,062 390,890 Securities held-to-maturity 726,363 761,852 496,914 Equity securities 306 273 307 Deposits 2,437,161 2,212,604 2,005,108 Borrowings - 123,700 3,000 Shareholders’ equity 183,283 157,714 149,584 AVERAGE BALANCES: Total assets 2,580,849 2,366,070 1,931,589 Interest-earning assets 2,495,653 2,291,448 1,892,650 Loans receivable, net 1,349,538 1,123,201 1,042,280 Securities 1,086,294 1,066,189 751,690 Deposits 2,302,167 2,134,584 1,750,733 Borrowings 82,816 51,193 22,386 Shareholders’ equity 169,837 156,098 137,511 SELECTED OPERATIONS DATA: Total interest income 84,625 63,444 58,328 Total interest expense 23,407 5,439 5,183 Net interest income 61,218 58,005 53,145 Provision (benefit) for loan losses (1,071 ) 3,278 3,974 Net interest income after provision for loan losses 62,289 54,727 49,171 Total noninterest income 12,146 12,137 9,667 Total noninterest expense 38,608 33,959 31,223 Income before provision for income taxes 35,827 32,905 27,615 Provision for income taxes 5,042 4,919 3,673 Net income 30,785 27,986 23,942 FINANCIAL RATIOS: Return on average assets 1 1.19 % 1.18 % 1.24 % Return on average shareholders’ equity 2 18.13 17.93 17.41 Noninterest expenses to average total assets 1.50 1.44 1.62 Average interest-earning assets to average interest-bearing liabilities 112.73 114.57 117.01 Net interest rate spread 3 2.33 2.50 2.76 Net interest margin 4 2.45 2.53 2.81 Efficiency ratio 5 52.63 48.41 49.71 Shareholders’ equity to total assets, at end of period 6.79 6.13 6.80 Average shareholders’ equity to average assets 6.58 6.60 7.12 Dividend payout ratio 6 15.47 15.85 17.02 Actual dividends declared to net income 7 7.12 9.41 10.15 Nonperforming assets to total assets, at end of period 0.21 0.25 0.11 Nonperforming loans to net loans, at end of period 0.39 0.51 0.21 Allowance for loan losses to nonperforming loans 388.64 360.31 854.76 Allowance for loan losses to total loans receivable 1.51 1.82 1.77 Book value per share 8 $ 10.76 $ 9.26 $ 8.79 Basic earnings per share 1.81 1.64 1.41 Diluted earnings per share 1.81 1.64 1.41 OTHER DATA: Closing market price of common stock $ 29.80 $ 22.65 $ 14.06 Number of full-service offices 18 17 17 Number of full-time equivalent employees 206 198 186 1 Ratio of net income to average total assets. 2 Ratio of net income to average shareholders’ equity. 3 The difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. 4 Net interest income as a percentage of average interest-earning assets. 5 Noninterest expense divided by the sum of net interest income and noninterest income. 6 Dividends per share divided by basic earnings per share.
SHAREHOLDERS’ EQUITY Shareholders’ equity increased to $157.7 million at June 30, 2022 from $149.6 million at June 30, 2021, resulting primarily from net income of $28.0 million partially offset by dividends declared and paid of $2.6 million and increase in other comprehensive loss, net of taxes of $17.2 million.
SHAREHOLDERS’ EQUITY Shareholders’ equity increased to $183.3 million at June 30, 2023 from $157.7 million at June 30, 2022, resulting primarily from net income of $30.8 million, partially offset by dividends declared and paid of $2.2 million and an increase in accumulated other comprehensive loss of $3.0 million.
The average balance of savings and money market accounts increased by $64.2 million to $467.5 million for the year ended June 30, 2022 as compared to $403.4 million for the year ended June 30, 2021.
The average balance of savings and money market accounts decreased by $2.5 million to $465.0 million for the year ended June 30, 2023 as compared to $467.5 million for the year ended June 30, 2022.
Interest expense on borrowings amounted to $2.0 million for the year ended June 30, 2022 as compared to $962,000 for the year ended June 30, 2021, as the average balance of borrowings increased $28.8 million to $51.2 million for the year ended June 30, 2022 as compared to $22.4 million for the year ended June 30, 2021.
Interest expense on borrowings amounted to $3.4 million for the year ended June 30, 2023 as compared to $2.0 million for the year ended June 30, 2022, as the average balance of borrowings increased $31.6 million to $82.8 million for the year ended June 30, 2023 as compared to $51.2 million for the year ended June 30, 2022.
Reserves on these loans totaled $9.6 million at June 30, 2022 compared to $7.8 million at June 30, 2021, an increase of $1.8 million. No loans were classified as doubtful or loss at June 30, 2022 or 2021. Allowance for loan losses to total loans receivable was 1.82% at June 30, 2022, and 1.77% at June 30, 2021.
Reserves on these loans totaled $5.2 million at June 30, 2023 compared to $9.6 million at June 30, 2022, a decrease of $4.4 million. No loans were classified as doubtful or loss at June 30, 2023 or 2022. Allowance for loan losses to total loans receivable was 1.51% at June 30, 2023, and 1.82% at June 30, 2022.
The average rate paid on NOW accounts decreased 8 basis points to 0.17% for the year ended June 30, 2022 as compared to 0.25% for the year ended June 30, 2021.
The average rate paid on NOW accounts increased 93 basis points to 1.10% for the year ended June 30, 2023 as compared to 0.17% for the year ended June 30, 2022.
Analysis of Nonaccrual Loans, Nonperforming Assets and Restructured Loans The table below details additional information related to nonaccrual loans for the periods indicated: At June 30, (Dollars in thousands) 2022 2021 2020 2019 2018 Nonaccrual loans: Residential real estate $ 2,948 $ 1,324 $ 2,513 $ 2,474 $ 1,778 Residential construction and land 1 - - - - Multi-family - - 151 - - Commercial real estate 1,269 444 781 598 1,147 Commercial construction - - - - - Home equity 188 237 319 452 298 Consumer installment 7 - - 6 18 Commercial 1,904 296 313 108 276 Total nonaccrual loans 6,317 2,301 4,077 3,638 3,517 Accruing loans delinquent 90 days or more: Residential real estate - - - - 62 Total accruing loans delinquent 90 days or more - - - - 62 Foreclosed real estate: Residential real estate 68 64 - 53 119 Total foreclosed real estate 68 64 - 53 119 Total nonperforming assets $ 6,385 $ 2,365 $ 4,077 $ 3,691 $ 3,698 Troubled debt restructuring: Nonperforming (included above) $ 2,707 $ 354 $ 304 $ 531 $ 774 Performing (accruing and excluded above) 2,336 5,050 909 1,368 1,557 Nonaccrual loans to total loans 0.50 % 0.21 % 0.40 % 0.46 % 0.49 % Nonperforming loans to total loans 0.50 % 0.21 % 0.40 % 0.46 % 0.50 % Nonperforming assets to total assets 0.25 % 0.11 % 0.24 % 0.29 % 0.32 % Allowance for loan losses to nonperforming loans 360.31 % 854.76 % 402.04 % 362.84 % 335.96 % Allowance for loan losses to nonaccrual loans 360.31 % 854.76 % 402.04 % 362.84 % 341.88 % Nonperforming assets amounted to $6.4 million at June 30, 2022 and $2.4 million at June 30, 2021, respectively.
For further discussion and detail regarding impaired loans please refer to Part II, Item 8 Financial Statements and Supplemental Data, Note 4 Loans of this Annual Report . 28 Index Analysis of Nonaccrual Loans, Nonperforming Assets and Restructured Loans The table below details additional information related to nonaccrual loans for the periods indicated: At June 30, (Dollars in thousands) 2023 2022 2021 2020 2019 Nonaccrual loans: Residential real estate $ 2,747 $ 2,948 $ 1,324 $ 2,513 $ 2,474 Residential construction and land - 1 - - - Multi-family - - - 151 - Commercial real estate 1,318 1,269 444 781 598 Commercial construction - - - - - Home equity 54 188 237 319 452 Consumer installment 63 7 - - 6 Commercial 1,276 1,904 296 313 108 Total nonaccrual loans 5,458 6,317 2,301 4,077 3,638 Foreclosed real estate: Residential real estate - 68 64 - 53 Commercial loans 302 - - - - Total foreclosed real estate 302 68 64 - 53 Total nonperforming assets $ 5,760 $ 6,385 $ 2,365 $ 4,077 $ 3,691 Troubled debt restructuring: Nonperforming (included above) $ 2,691 $ 2,707 $ 354 $ 304 $ 531 Performing (accruing and excluded above) 2,805 2,336 5,050 909 1,368 Nonaccrual loans to total loans 0.39 % 0.50 % 0.21 % 0.40 % 0.46 % Nonperforming loans to total loans 0.39 % 0.50 % 0.21 % 0.40 % 0.46 % Nonperforming assets to total assets 0.21 % 0.25 % 0.11 % 0.24 % 0.29 % Allowance for loan losses to nonperforming loans 388.64 % 360.31 % 854.76 % 402.04 % 362.84 % Allowance for loan losses to nonaccrual loans 388.64 % 360.31 % 854.76 % 402.04 % 362.84 % Nonperforming assets amounted to $5.8 million at June 30, 2023 and $6.4 million at June 30, 2022, respectively.
During the year ended June 30, 2022 the Company further downgraded commercial real estate and residential real estate loans from pass and special mention to substandard due to deterioration in borrower cash flows, delinquent payments and further financial deterioration or not improving financial performance.
During the year ended June 30, 2023, the Company upgraded commercial real estate and residential real estate loans from substandard and special mention to pass due to improvements seen in borrower cash flows and financial performance.
Average loans outstanding increased $83.8 million, or 7.9%, to $1.1 billion for the year ended June 30, 2022 as compared to $1.1 billion for the year ended June 30, 2021. The yield on such loans decreased 15 basis points to 4.12% for the year ended June 30, 2022 as compared to 4.27% for the year ended June 30, 2021.
Average loans outstanding increased $227.3 million, or 19.9%, to $1.4 billion for the year ended June 30, 2023 as compared to $1.1 billion for the year ended June 30, 2022. The yield on such loans increased 26 basis points to 4.38% for the year ended June 30, 2023 as compared to 4.12% for the year ended June 30, 2022.
The liquidity position can be significantly impacted on a daily basis by funding needs associated with Greene County Commercial Bank. These funding needs are also impacted by the collection of taxes and state aid for the municipalities using the services of Greene County Commercial Bank.
These funding needs are also impacted by the collection of taxes and state aid for the municipalities using the services of Greene County Commercial Bank.
In the event the Company requires funds beyond its ability to generate them internally, additional sources of funds are available through the use of FHLB advance programs made available to The Bank of Greene County.
In the event the Company requires funds beyond its ability to generate them internally, additional sources of funds are available through the use of FHLB advance programs made available to The Bank of Greene County. During the year ended June 30, 2023, The Bank of Greene County’s maximum borrowing from the FHLB reached $136.0 million.
At June 30, 2022, liquidity measures were as follows: Cash equivalents/(deposits plus short term borrowings) 2.95 % (Cash equivalents plus unpledged securities)/(deposits plus short term borrowings) 10.99 % (Cash equivalents plus unpledged securities plus additional borrowing capacity)/(deposits plus short term borrowings) 23.18 % Off-balance sheet arrangements.
At June 30, 2023, liquidity measures were as follows: Cash equivalents/(deposits plus short term borrowings) 8.06 % (Cash equivalents plus unpledged securities)/(deposits plus short term borrowings) 8.33 % (Cash equivalents plus unpledged securities plus additional borrowing capacity)/(deposits plus short term borrowings) 23.34 % 39 Index Off-balance sheet arrangements.
The average yield on such securities-taxable decreased 9 basis points to 1.59% for the year ended June 30, 2022 as compared to 1.68% for the year ended June 30, 2021.
The average yield on securities taxable increased 44 basis points to 2.03% for the year ended June 30, 2023 as compared to 1.59% for the year ended June 30, 2022.
Noninterest-bearing deposits increased $13.6 million, or 7.8%, NOW deposits increased $133.4 million, or 9.9%, money market deposits increased $11.8 million, or 8.1%, savings deposits increased $42.7 million, or 14.2% and certificates of deposits increased $6.0 million, or 17.3% when comparing June 30, 2022 and June 30, 2021.
NOW deposits increased $253.2 million, or 17.1%, certificates of deposits increased $87.3 million, or 213.9%, noninterest-bearing deposits decreased $28.6 million, or 15.3%, savings deposits decreased $44.7 million, or 13.0%, money market deposits decreased $42.6 million, or 27.0%, when comparing June 30, 2023 and June 30, 2022.
This was offset by upgrading commercial construction loans from special mention and substandard to pass and upgrading commercial loans from substandard to pass, because of improvements in borrower cash flows and financial performance. Management continues to monitor classified loan relationships closely.
This was offset by downgrades in commercial loans from pass to special mention and special mention to substandard, due to deterioration in borrower cash flows, delinquent payments and further financial deterioration or not improving financial performance. Management continues to monitor classified loan relationships closely.
Fiscal Years Ended June 30, 2022 2021 (Dollars in thousands) Average Outstanding Balance Interest Earned/ Paid Average Yield/ Rate Average Outstanding Balance Interest Earned/ Paid Average Yield/ Rate Interest-earning Assets: Loans receivable 1 $ 1,144,308 $ 47,125 4.12 % $ 1,060,471 $ 45,275 4.27 % Securities non-taxable 652,468 9,517 1.46 455,684 7,953 1.75 Securities taxable 413,721 6,595 1.59 296,006 4,958 1.68 Interest-earning bank balances and federal funds 79,489 157 0.20 79,345 81 0.10 FHLB stock 1,462 50 3.42 1,144 61 5.33 Total interest-earning assets 2,291,448 63,444 2.77 % 1,892,650 58,328 3.08 % Cash and due from banks 13,474 12,526 Allowance for loan losses (21,107 ) (18,191 ) Other noninterest-earning assets 82,255 44,604 Total assets $ 2,366,070 $ 1,931,589 Interest-Bearing Liabilities: Savings and money market deposits $ 467,543 $ 759 0.16 % $ 403,360 $ 952 0.24 % NOW deposits 1,446,381 2,434 0.17 1,156,672 2,895 0.25 Certificates of deposit 34,948 283 0.81 35,044 374 1.07 Borrowings 51,193 1,963 3.83 22,386 962 4.30 Total interest-bearing liabilities 2,000,065 5,439 0.27 % 1,617,462 5,183 0.32 % Noninterest-bearing deposits 185,712 155,657 Other noninterest-bearing liabilities 24,195 20,959 Shareholders' equity 156,098 137,511 Total liabilities and equity $ 2,366,070 $ 1,931,589 Net interest income $ 58,005 $ 53,145 Net interest rate spread 2.50 % 2.76 % Net earnings assets $ 291,383 $ 275,188 Net interest margin 2.53 % 2.81 % Average interest-earning assets to average interest-bearing liabilities 114.57 % 117.01 % 1 Calculated net of deferred loan fees and costs, loan discounts, and loans in process. 35 Index Taxable-equivalent net interest income and net interest margin For the year ended June 30, (Dollars in thousands) 2022 2021 Net interest income (GAAP) $ 58,005 $ 53,145 Tax-equivalent adjustment (1) 3,670 3,032 Net interest income (fully taxable-equivalent) $ 61,675 $ 56,177 Average interest-earning assets $ 2,291,448 $ 1,892,650 Net interest margin (fully taxable-equivalent) 2.69 % 2.97 % (1) Net interest income on a taxable-equivalent basis includes the additional amount of interest income that would have been earned if the Company’s investment in tax-exempt securities and loans had been subject to federal and New York State income taxes yielding the same after-tax income.
Fiscal Years Ended June 30, 2023 2022 (Dollars in thousands) Average Outstanding Balance Interest Earned/ Paid Average Yield/ Rate Average Outstanding Balance Interest Earned/ Paid Average Yield/ Rate Interest-earning Assets: Loans receivable 1 $ 1,371,653 $ 60,049 4.38 % $ 1,144,308 $ 47,125 4.12 % Securities non-taxable 672,877 14,385 2.14 652,468 9,517 1.46 Securities taxable 413,417 8,384 2.03 413,721 6,595 1.59 Interest-earning bank balances and federal funds 34,816 1,592 4.57 79,489 157 0.20 FHLB stock 2,890 215 7.44 1,462 50 3.42 Total interest-earning assets 2,495,653 84,625 3.39 % 2,291,448 63,444 2.77 % Cash and due from banks 12,684 13,474 Allowance for loan losses (22,115 ) (21,107 ) Other noninterest-earning assets 94,627 82,255 Total assets $ 2,580,849 $ 2,366,070 Interest-Bearing Liabilities: Savings and money market deposits $ 464,988 $ 929 0.20 % $ 467,543 $ 759 0.16 % NOW deposits 1,596,832 17,516 1.10 1,446,381 2,434 0.17 Certificates of deposit 69,279 1,610 2.32 34,948 283 0.81 Borrowings 82,816 3,352 4.05 51,193 1,963 3.83 Total interest-bearing liabilities 2,213,915 23,407 1.06 % 2,000,065 5,439 0.27 % Noninterest-bearing deposits 171,068 185,712 Other noninterest-bearing liabilities 26,029 24,195 Shareholders’ equity 169,837 156,098 Total liabilities and equity $ 2,580,849 $ 2,366,070 Net interest income $ 61,218 $ 58,005 Net interest rate spread 2.33 % 2.50 % Net earnings assets $ 281,738 $ 291,383 Net interest margin 2.45 % 2.53 % Average interest-earning assets to average interest-bearing liabilities 112.73 % 114.57 % 1 Calculated net of deferred loan fees and costs, loan discounts, and loans in process. 35 Index Taxable-equivalent net interest income and net interest margin For the year ended June 30, (Dollars in thousands) 2023 2022 Net interest income (GAAP) $ 61,218 $ 58,005 Tax-equivalent adjustment (1) 5,258 3,670 Net interest income (fully taxable-equivalent) $ 66,476 $ 61,675 Average interest-earning assets $ 2,495,653 $ 2,291,448 Net interest margin (fully taxable-equivalent) 2.66 % 2.69 % (1) Net interest income on a taxable-equivalent basis includes the additional amount of interest income that would have been earned if the Company’s investment in tax-exempt securities and loans had been subject to federal and New York State income taxes yielding the same after-tax income.
When a loan is determined to be impaired, the measurement of the loan is based on present value of estimated future cash flows, except that all collateral-dependent loans are measured for impairment based on the fair value of the collateral. 28 Index Generally, management places loans on nonaccrual status once the loans have become 90 days or more delinquent or sooner if there is a significant reason for management to believe the collectability is questionable and, therefore, interest on the loan will no longer be recognized on an accrual basis.
Generally, management places loans on nonaccrual status once the loans have become 90 days or more delinquent or sooner if there is a significant reason for management to believe the collectability is questionable and, therefore, interest on the loan will no longer be recognized on an accrual basis.
Interest income is derived from loans, securities and other interest-earning assets. Total average interest-earning assets increased to $2.3 billion for the year ended June 30, 2022 as compared to $1.9 billion for the year ended June 30, 2021, an increase of $398.8 million, or 21.1%.
Total average interest-earning assets increased to $2.5 billion for the year ended June 30, 2023 as compared to $2.3 billion for the year ended June 30, 2022, an increase of $204.2 million, or 8.9%.
The statutory tax rate is impacted by the benefits derived from tax-exempt bond and loan income, the Company’s real estate investment trust subsidiary income, income received on the bank owned life insurance, as well as the tax benefits derived from premiums paid to the Company’s pooled captive insurance subsidiary to arrive at the effective tax rate.
The effective tax rate was 14.1% and 14.9% for the years ended June 30, 2023 and 2022, respectively. The statutory tax rate is impacted by the benefits derived from tax-exempt bond and loan income, the Company’s real estate investment trust subsidiary income and income received on the bank owned life insurance to arrive at the effective tax rate.
Interest expense paid on savings and money market accounts amounted to $759,000 for the year ended June 30, 2022 as compared to $952,000 for the year ended June 30, 2021, a decrease of $193,000, or 20.3%.
Interest expense paid on savings and money market accounts amounted to $929,000 for the year ended June 30, 2023 as compared to $759,000 for the year ended June 30, 2022, an increase of $170,000, or 22.4%.
Interest expense paid on NOW accounts amounted to $2.4 million for the year ended June 30, 2022 as compared to $2.9 million for the year ended June 30, 2021, a decrease of $461,000 or 15.9%.
Interest expense paid on NOW accounts amounted to $17.5 million for the year ended June 30, 2023 as compared to $2.4 million for the year ended June 30, 2022, an increase of $15.1 million.
The Company continues to experience loan growth as a result of continued growth in its customer base and its relationships with other financial institutions in originating loan participations. The Company continues to use a conservative underwriting policy in regard to all loan originations, and does not engage in sub-prime lending or other exotic loan products.
The Company continues to use a conservative underwriting policy in regard to all loan originations, and does not engage in sub-prime lending or other exotic loan products.
At June 30, 2022, there were three residential real estate loans totaling $426,000 and one commercial real estate loan totaling $102,000 in the process of foreclosure. Included in nonaccrual loans were $4.4 million of loans which were less than 90 days past due at June 30, 2022, but have a recent history of delinquency greater than 90 days past due.
Included in nonaccrual loans were $4.4 million of loans which were less than 90 days past due at June 30, 2022, but have a recent history of delinquency greater than 90 days past due.
Principal pay-downs and maturities during the year amounted to $359.7 million, primarily consisting of $60.2 million of mortgage-backed securities, $297.2 million of state and political subdivision securities, $2.3 million of collateralized mortgage obligations.
Principal pay-downs and maturities during the year ended June 30, 2023 amounted to $365.6 million, primarily consisting of $333.2 million of state and political subdivision securities, and $29.3 million of mortgage-backed securities.
The increase in net income was primarily the result of increases of $4.9 million in net interest income, $2.5 million in noninterest income and a decrease of $696,000 in provision for loan losses partially offset by an increase of $2.7 million in noninterest expense and $1.2 million in provision for income taxes.
The increase in net income was primarily the result of increases of $3.2 million in net interest income and a decrease of $4.3 million in provision for loan losses partially offset by an increase of $4.6 million in noninterest expense. The provision for income taxes and noninterest income remained the same when comparing year end June 30, 2023 and 2022.
The increase in net interest income resulted from growth in interest-earning assets offset by the decrease in rates when comparing the years ended June 30, 2022 and 2021. Growth in interest-earning assets was within both investment securities and loans. Growth in loans was primarily in commercial real estate mortgages and residential mortgages.
Growth in interest-earning assets was within both investment securities and loans. Growth in loans was primarily in commercial real estate mortgages, commercial constructions loans and residential mortgages. Net interest rate spread and margin both decreased when comparing the year ended June 30, 2023 and 2022.
Net interest rate spread decreased 26 basis points to 2.50% for the fiscal year ended June 30, 2022 as compared to 2.76% for the fiscal year ended June 30, 2021.
Net interest rate spread decreased 17 basis points to 2.33% for the year ended June 30, 2023 compared to 2.50% for the year ended June 30, 2022. Net interest margin decreased 8 basis points to 2.45% for the year ended June 30, 2023 compared to 2.53% for the year ended June 30, 2022.
The Company believes its current capital is adequate to support ongoing operations. As a result of the significant growth in assets, the Company contributed $7.0 million of additional capital to The Bank of Greene County during the fiscal year ended June 30, 2022.
The Company believes its current capital is adequate to support ongoing operations. As a result of the consistent earnings throughout the fiscal year, the Company did not push down any additional capital to The Bank of Greene County during the fiscal year ended June 30, 2023.
Total impaired loans amounted to $10.8 million at June 30, 2022 compared to $6.3 million at June 30, 2021, an increase of $4.5 million, or 71.1%.
Total impaired loans amounted to $10.3 million at June 30, 2023 compared to $10.8 million at June 30, 2022, a decrease of $500,000, or 4.3%.
Years Ended June 30, 2022 versus 2021 2021 versus 2020 Increase/(Decrease) Total Increase/(Decrease) Total Due To Increase/ Due To Increase/ (In thousands) Volume Rate (Decrease) Volume Rate (Decrease) Interest-earning Assets: Loans receivable, net 1 $ 3,484 $ (1,634 ) $ 1,850 $ 7,938 $ (1,822 ) $ 6,116 Securities non-taxable 3,040 (1,476 ) 1,564 2,627 (1,749 ) 878 Securities taxable 1,884 (247 ) 1,637 2,034 (3,442 ) (1,408 ) Interest-earning bank balances and federal funds - 76 76 274 (815 ) (541 ) FHLB stock 14 (25 ) (11 ) (15 ) (16 ) (31 ) Total interest-earning assets 8,422 (3,306 ) 5,116 12,858 (7,844 ) 5,014 Interest-Bearing Liabilities: Savings and money market deposits 146 (339 ) (193 ) 224 (620 ) (396 ) NOW deposits 610 (1,071 ) (461 ) 1,881 (5,400 ) (3,519 ) Certificates of deposit (1 ) (90 ) (91 ) (15 ) (90 ) (105 ) Borrowings 1,117 (116 ) 1,001 152 570 722 Total interest-bearing liabilities 1,872 (1,616 ) 256 2,242 (5,540 ) (3,298 ) Net change in net interest income $ 6,550 $ (1,690 ) $ 4,860 $ 10,616 $ (2,304 ) $ 8,312 1 Calculated net of deferred loan fees, loan discounts, and loans in process.
Years Ended June 30, 2023 versus 2022 2022 versus 2021 Increase/(Decrease) Due To Total Increase/ Increase/(Decrease) Due To Total Increase/ (In thousands) Volume Rate (Decrease) Volume Rate (Decrease) Interest-earning Assets: Loans receivable, net 1 $ 9,808 $ 3,116 $ 12,924 $ 3,484 $ (1,634 ) $ 1,850 Securities non-taxable 306 4,562 4,868 3,040 (1,476 ) 1,564 Securities taxable (5 ) 1,794 1,789 1,884 (247 ) 1,637 Interest-earning bank balances and federal funds (138 ) 1,573 1,435 - 76 76 FHLB stock 75 90 165 14 (25 ) (11 ) Total interest-earning assets 10,046 11,135 21,181 8,422 (3,306 ) 5,116 Interest-Bearing Liabilities: Savings and money market deposits (4 ) 174 170 146 (339 ) (193 ) NOW deposits 281 14,801 15,082 610 (1,071 ) (461 ) Certificates of deposit 458 869 1,327 (1 ) (90 ) (91 ) Borrowings 1,271 118 1,389 1,117 (116 ) 1,001 Total interest-bearing liabilities 2,006 15,962 17,968 1,872 (1,616 ) 256 Net change in net interest income $ 8,040 $ (4,827 ) $ 3,213 $ 6,550 $ (1,690 ) $ 4,860 1 Calculated net of deferred loan fees, loan discounts, and loans in process.
Net interest rate spread and margin both decreased when comparing the years ended June 30, 2022 and 2021. Net interest rate spread decreased 26 basis points to 2.50% for the year ended June 30, 2022 compared to 2.76% for the year ended June 30, 2021.
Net interest rate spread decreased 17 basis points to 2.33% for the year ended June 30, 2023 compared to 2.50% for the year ended June 30, 2022. Net interest margin decreased 8 basis points to 2.45% for the year ended June 30, 2023 compared to 2.53% for the year ended June 30, 2022.
This was partially offset by a decrease in the pension liability of $404,000 when comparing the year ended June 30, 2022 to June 30, 2021. For further information regarding these changes, see Part II, Item 8 Financial Statements and Supplemental Data, Note 9 Employee Benefits Plans and Note 10 Stock-Based Compensation of this Report .
For further information regarding these changes, see Part II, Item 8 Financial Statements and Supplemental Data, Note 9 Employee Benefits Plans and Note 10 Stock-Based Compensation of this Annual Report .
The average yield on such securities-non taxable decreased 29 basis points to 1.46% for the year ended June 30, 2022 as compared to 1.75% for the year ended June 30, 2021.
The average balance of securities remained at $1.1 billion for the year ended June 30, 2023 and 2022. The average yield on securities non-taxable increased 68 basis points to 2.14% for the year ended June 30, 2023 as compared to 1.46% for the year ended June 30, 2022.
Purchases totaled $1.3 million during the year ended June 30, 2021, consisting primarily of building improvements and equipment for a new branch located in Albany, New York, equipment for disaster recovery and new ATMs. Depreciation for the year ended June 30, 2022 totaled $826,000, compared to $775,000 for the year ended June 30, 2021.
Purchases totaled $1.1 million during the year ended June 30, 2022, consisting primarily of building improvements, IT equipment and new ATMs. Depreciation for the year ended June 30, 2023 totaled $871,000, compared to $826,000 for the year ended June 30, 2022. There were no disposals of premises and equipment during the fiscal years ended June 30, 2023 and 2022.
The average rate paid on certificates of deposit decreased 26 basis points to 0.81% for the year ended June 30, 2022 as compared to 1.07% for the year ended June 30, 2021. The average balance on certificates of deposit was $35.0 million at both the year ended June 30, 2022 and June 30, 2021.
The average rate paid on certificates of deposit increased 151 basis points to 2.32% for the year ended June 30, 2023 as compared to 0.81% for the year ended June 30, 2022.
Any subsequent write-down of FRE is charged against earnings. There were $68,000 in FRE assets at June 30, 2022. At June 30, 2021, there were $64,000 in FRE assets. DEPOSITS Deposits totaled $2.2 billion at June 30, 2022 and $2.0 billion at June 30, 2021, an increase of $207.5 million, or 10.4%.
At June 30, 2022, there were $68,000 in FRE assets. 32 Index DEPOSITS Deposits totaled $2.4 billion at June 30, 2023 and $2.2 billion at June 30, 2022, an increase of $224.6 million, or 10.1%.
These loans will be returned to accrual status once they have demonstrated a history of timely payments. Loans on nonaccrual status totaled $2.3 million at June 30, 2021 of which $260,000 were in the process of foreclosure.
Included in nonaccrual loans were $3.1 million of loans which were less than 90 days past due at June 30, 2023, but have a recent history of delinquency greater than 90 days past due. These loans will be returned to accrual status once they have demonstrated a history of timely payments.

… 102 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+2 added−1 removed26 unchanged
Biggest changeEVE sensitivity will continue to increase further if rates continue to rise and loans and investments lose value. The Company’s EVE modeling projects that the EVE will decrease in instantaneous rate shocks and as of the reporting date, the +200 bp and +300 bp is outside of the Company’s policy limits.
Biggest changeThe Company’s EVE modeling projects that as of the reporting date and in response to an instantaneous rate increase of +200 bp and +300 bp, the EVE is outside of the Company’s policy limits.
The information set forth below is based on data that included all financial instruments as of June 30, 2022. Assumptions made by the Company relate to interest rates, loan prepayment rates, core deposit duration, and the market values of certain assets and liabilities under the various interest rate scenarios.
The information set forth below is based on data that included all financial instruments as of June 30, 2023. Assumptions made by the Company relate to interest rates, loan prepayment rates, core deposit duration, and the market values of certain assets and liabilities under the various interest rate scenarios.
Actual maturity dates were used for fixed rate loans and certificate accounts. Securities were scheduled at either maturity date or next scheduled call date based upon judgment of whether the particular security would be called based upon the current interest rate environment, as it existed on June 30, 2022.
Actual maturity dates were used for fixed rate loans and certificate accounts. Securities were scheduled at either maturity date or next scheduled call date based upon judgment of whether the particular security would be called based upon the current interest rate environment, as it existed on June 30, 2023.
By incorporating the Company’s financial projections into the analysis, the Company can better understand the impact that the implementation of those plans would have on its overall interest rate risk, and thereby better manage its interest rate risk position. 41 Index EVE Analysis.
By incorporating the Company’s financial projections into the analysis, the Company can better understand the impact that the implementation of those plans would have on its overall interest rate risk, and thereby better manage its interest rate risk position. EVE Analysis.
The noninterest-bearing category does not use a decay assumption, and the 24 month FHLB advance rate was used as the discount rate. The EVE at “Par” represents the difference between The Company’s estimated value of assets and value of liabilities assuming no change in interest rates. The following sets forth The Company’s EVE as of June 30, 2022.
The noninterest-bearing category does not use a decay assumption, and the 24 month FHLB advance rate was used as the discount rate. The EVE at “Par” represents the difference between the Company’s estimated value of assets and value of liabilities assuming no change in interest rates. 41 Index The following sets forth the Company’s EVE as of June 30, 2023.
Finally, the ability of many borrowers to service their adjustable-rate loans may decrease in the event of an interest rate increase. 43 Index
Finally, the ability of many borrowers to service their adjustable-rate loans may decrease in the event of an interest rate increase. 42 Index
For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates.
Certain shortcomings are inherent in this method of analysis. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates.
In the current rising interest rate environment, EVE sensitivity has increased across the industry, as the loans and investments were being priced during a historically low rate environment and as the Federal Reserve’s monetary policy is to raise interest rates in response to the inflationary pressure, the loans and investments will lose value and move out the sensitivity curve.
In the current rising interest rate environment, EVE sensitivity has increased across the industry, as loans and investments were originated and purchased during the historically low rate environment. As the Federal Reserve’s monetary policy has been to raise interest rates in response to the inflationary pressure, the loans and investments have lost market value.
At June 30, 2022, The Company’s cumulative one-year and three-year gap positions, the difference between the amount of interest-earning assets maturing or repricing within one year and three years and interest-bearing liabilities maturing or repricing within one year and three years, as a percentage of total interest-earning assets were positive 15.73% and 8.35% respectively. 42 Index Certain shortcomings are inherent in this method of analysis.
At June 30, 2023, the Company’s cumulative one-year and three-year gap positions, the difference between the amount of interest-earning assets maturing or repricing within one year and three years and interest-bearing liabilities maturing or repricing within one year and three years, as a percentage of total interest-earning assets were positive 16.29% and 7.75% respectively.
Changes in Market Interest Rates (Basis Points) (Dollars in thousands) Company EVE $ Change From Par % Change From Par EVE Ratio 1 Change 2 +300 bp $ 181,627 $ (114,526 ) (38.67 )% 7.96 % (386 )bps +200 bp 215,285 (80,868 ) (27.31 ) 9.16 (266 ) +100 bp 256,523 (39,630 ) (13.38 10.57 (125 ) PAR 296,153 - - 11.82 - -100 bp 333,656 37,503 12.66 12.89 107 1 Calculated as the estimated EVE divided by the present value of total assets. 2 Calculated as the excess (deficiency) of the EVE ratio assuming the indicated change in interest rates over the estimated EVE ratio assuming no change in interest rates.
Changes in Market Interest Rates (Basis Points) (Dollars in thousands) Company EVE $ Change From Par % Change From Par EVE Ratio 1 Change 2 +300 bp $ 169,423 $ (107,872 ) (38.90 )% 7.15 % (357 ) bps +200 bp 201,050 (76,245 ) (27.50 ) 8.25 (247 ) +100 bp 239,443 (37,852 ) (13.65 ) 9.54 (118 ) PAR 277,295 - - 10.72 - -100 bp 313,201 35,906 12.95 11.73 101 1 Calculated as the estimated EVE divided by the present value of total assets. 2 Calculated as the excess (deficiency) of the EVE ratio assuming the indicated change in interest rates over the estimated EVE ratio assuming no change in interest rates.
Removed
This was due to the seasonality of the Company’s deposit outflows, which resulted in the Company increasing the overnight borrowings as of the reporting date. Should the ratios remain outside of the Company’s policy as of the next reporting date, the Company will take direct actions to correct the policy exceptions.
Added
EVE sensitivity will continue to increase if rates continue to rise resulting in loans and investments losing further market value. As investments and loans mature, and the funds are reinvested at higher interest rates, the EVE sensitivity should improve.
Added
This contemplates an instantaneous rate shock, and would result from the increase in interest rates and the impact it has on the assets and the short-term nature of the Company’s liabilities. Management will continue to monitor the EVE sensitivity and has taken corrective action by purchasing short-term investments over the fiscal year 2023, which improved the ratios.

Other GCBC 10-K year-over-year comparisons