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What changed in GREENE COUNTY BANCORP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GREENE COUNTY BANCORP INC's 2023 and 2024 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 2024 report.

+268 added−207 removedSource: 10-K (2024-09-06) vs 10-K (2023-09-08)

Top changes in GREENE COUNTY BANCORP INC's 2024 10-K

268 paragraphs added · 207 removed · 155 edited across 5 sections

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. Properties Greene County Bancorp, Inc. and The Bank of Greene County maintain their executive offices at the Administration Center, 302 Main Street, Catskill, New York. The Bank of Greene County also has an operations center, customer call center and a lending center located in Catskill, New York.
Biggest changeITEM 2. Properties Greene County Bancorp, Inc. and The Bank of Greene County maintain their executive offices at the Administration Center, 302 Main Street, Catskill, New York. The Bank of Greene County has a lending center, operations center, customer call center, and wealth management center, located in Catskill, New York, and a lending center located in Albany, New York.
At 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.
At June 30, 2024, 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 Annual Report. 21 Index
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 15 set forth in Part II, Item 8 Financial Statements and Supplementary Data, of this Annual Report.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn 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.
Biggest changeOn 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. ITEM 4. Mine Safety Disclosures Not applicable. PART II
ITEM 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.
ITEM 3. Legal Proceedings 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
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.
Removed
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

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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.
Biggest changeTherefore, its ability to waive its right to receive dividends beyond this date cannot be reasonably determined at this time. 23 Index 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.
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.
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, 2024, the Company had repurchased 48,800 shares.
ITEM 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Greene County Bancorp, Inc.’s (the Company’s) common stock is listed on the NASDAQ Capital Market under the symbol “GCBC”.
ITEM 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Greene County Bancorp, Inc.’s (the “Company’s”) common stock is listed on the NASDAQ Capital Market under the symbol “GCBC”.
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.
As of September 5, 2024 the Company had 422 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.
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.
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 $0.46 per share to be declared by the Company for the four quarters ending June 30, 2024.
There were no repurchases during the fiscal year ended June 30, 2023.
There were no repurchases during the fiscal year ended June 30, 2024. ITEM 6. [Reserved]
Removed
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

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Biggest changeThese 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.
Biggest changeThese 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. 24 Index Selected Financial Data At or for the years ended June 30, (Dollars in thousands, except per share amounts) 2024 2023 2022 SELECTED FINANCIAL CONDITION DATA: Total assets $ 2,825,788 $ 2,698,283 $ 2,571,740 Loans receivable, net of allowance for credit loss on loans 1,480,229 1,387,654 1,229,355 Securities available-for-sale, at fair value 350,001 281,133 408,062 Securities held-to-maturity, at amortized cost, net of allowance for credit losses of $483 at June 30, 2024 (9) 690,354 726,363 761,852 Equity securities 328 306 273 Deposits 2,389,222 2,437,161 2,212,604 Borrowings 149,456 - 123,700 Shareholders' equity 206,000 183,283 157,714 AVERAGE BALANCES: Total assets 2,660,947 2,580,849 2,366,070 Interest-earning assets 2,568,756 2,495,653 2,291,448 Loans receivable, net of allowance for credit loss on loans 1,435,122 1,349,538 1,123,201 Securities, net of allowance for credit loss on securities 1,037,023 1,086,294 1,066,189 Deposits 2,366,053 2,302,167 2,134,584 Borrowings 72,726 82,816 51,193 Shareholders' equity 192,515 169,837 156,098 SELECTED OPERATIONS DATA: Total interest income 103,664 84,625 63,444 Total interest expense 52,685 23,407 5,439 Net interest income 50,979 61,218 58,005 Provision (benefit) for credit losses (9) 766 (1,071 ) 3,278 Net interest income after provision for credit losses (9) 50,213 62,289 54,727 Total noninterest income 13,908 12,146 12,137 Total noninterest expense 37,302 38,608 33,959 Income before provision for income taxes 26,819 35,827 32,905 Provision for income taxes 2,050 5,042 4,919 Net income 24,769 30,785 27,986 FINANCIAL RATIOS: Return on average assets (1) 0.93 % 1.19 % 1.18 % Return on average shareholders’ equity (2) 12.87 18.13 17.93 Noninterest expenses to average total assets 1.40 1.50 1.44 Average interest-earning assets to average interest-bearing liabilities 111.77 112.73 114.57 Net interest rate spread (3) 1.75 2.33 2.50 Net interest margin (4) 1.98 2.45 2.53 Efficiency ratio (5) 57.49 52.63 48.41 Shareholders’ equity to total assets, at end of period 7.29 6.79 6.13 Average shareholders’ equity to average assets 7.23 6.58 6.60 Dividend payout ratio (6) 22.07 15.47 15.85 Actual dividends declared to net income (7) 13.08 7.12 9.41 Non-performing assets to total assets, at end of period 0.13 0.21 0.25 Non-performing loans to net loans, at end of period 0.25 0.39 0.51 Allowance for credit losses on loans to non-performing loans (9) 516.20 388.64 360.31 Allowance for credit losses on loans to total loans receivable (9) 1.28 1.51 1.82 Book value per share (8) $ 12.10 $ 10.76 $ 9.26 Basic earnings per share 1.45 1.81 1.64 Diluted earnings per share 1.45 1.81 1.64 OTHER DATA: Closing market price of common stock $ 33.71 $ 29.80 $ 22.65 Number of full-service offices 18 18 17 Number of full-time equivalent employees 200 206 198 (1) Ratio of net income to average total assets.
Loan Portfolio Composition Set forth below is selected information concerning the composition of the Company’s loan portfolio in dollar amounts and in percentages (before deductions for deferred fees and costs, unearned discounts and allowances for losses) as of the dates indicated.
Set forth below is selected information concerning the composition of the Company’s loan portfolio in dollar amounts and in percentages (before deductions for deferred fees and costs, unearned discounts and allowances for losses) as of the dates indicated.
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 ($) and weighted average yield (%) at June 30, 2023.
Mortgage-backed securities and asset-backed securities held within the portfolio do not contain sub-prime loans and are not exposed to the credit risk associated with such lending. Investment Maturity Schedule The following table set forth information with regard to contractual maturities of debt securities shown in amortized cost ($) and weighted average yield (%) at June 30, 2024.
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.
Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services. 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.
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.
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, 2024 and 2023, as the Company originated loans for retention in its portfolio.
RPAs where the Company acts as the participating bank are referred to as “participations-in,” in reference to the credit risk associated with the counterparty’s derivatives being assumed by the Company. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap.
RPAs in which the Company acts as the participating bank are referred to as “participations-in,” in reference to the credit risk associated with the counterparty’s derivatives being assumed by the Company. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap.
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.
Included in non-accrual 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.
Results of operations are also affected by the Company’s provision for loan losses, noninterest income and noninterest expense. Noninterest income consists primarily of fees and service charges. The Company’s noninterest expense consists principally of compensation and employee benefits, occupancy, equipment and data processing, and other operating expenses.
Results of operations are also affected by the Company’s provision for credit losses, noninterest income and noninterest expense. Noninterest income consists primarily of fees and service charges. The Company’s noninterest expense consists principally of compensation and employee benefits, occupancy, equipment and data processing, and other operating expenses.
For the years indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, are expressed both in dollars and rates. No tax equivalent adjustments were made. Average balances are based on daily averages. Average loan balances include nonperforming loans.
For the years indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, are expressed both in dollars and rates. No tax equivalent adjustments were made. Average balances are based on daily averages. Average loan balances include non-performing loans.
These forward-looking statements, which are included in this annual report, describe future plans or strategies and include Greene County Bancorp, Inc.’s expectations of future financial results. The words “believe,” “expect,” “anticipate,” “project,” and similar expressions identify forward-looking statements.
These forward-looking statements, which are included in this annual report, describe future plans or strategies and include Greene County Bancorp, Inc.’s expectations of future financial results. The words “believe,” “may,” “will,” “intend,” “expect,” “anticipate,” “project,” and similar expressions identify forward-looking statements.
The Company charges loans off against the allowance for loan losses when it becomes evident that a loan cannot be collected within a reasonable amount of time or that it will cost the Company more than it will receive, and all possible avenues of repayment have been analyzed, including the potential of future cash flow, the value of the underlying collateral, and strength of any guarantors or co-borrowers.
The Company charges loans off against the ACL when it becomes evident that a loan cannot be collected within a reasonable amount of time or that it will cost the Company more than it will receive, and all possible avenues of repayment have been analyzed, including the potential of future cash flow, the value of the underlying collateral, and strength of any guarantors or co-borrowers.
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 MHC waived its right to receive dividends declared during the three months ended, September 30, 2022, December 31, 2022, March 31, 2023, June 30, 2023, December 31, 2023, March 31, 2024 and June 30, 2024. Dividends declared during the three months ended September 30, 2023 were paid to the MHC.
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 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. 41 Index Comparison of Operating Results for the Years Ended June 30, 2024 and 2023 Average Balance Sheet The following table sets forth certain information relating to the Company for the years ended June 30, 2024 and 2023.
Policies also exist with respect to the rating of loans, determination of when loans should be placed on a nonperforming status and the factors to be considered in establishing the Company’s allowance for loan losses. Management also considers credit risk when evaluating potential and current holdings of securities. Credit risk is a critical component in evaluating corporate debt securities.
Policies also exist with respect to the rating of loans, determination of when loans should be placed on a non-performing status and the factors to be considered in establishing the Company’s allowance for credit losses. Management also considers credit risk when evaluating potential and current holdings of securities. Credit risk is a critical component in evaluating corporate debt securities.
The Company has an Irrevocable Letter of Credit Reimbursement Agreement with the FHLB, whereby upon The Bank of Greene County’s request, on behalf of Greene County Commercial Bank, an irrevocable letter of credit is issued to secure municipal transactional deposit accounts. These letters of credit are secured by residential and commercial real estate mortgage loans.
The Company has an Irrevocable Letter of Credit Reimbursement Agreement with the FHLB, whereby upon The Bank of Greene County’s request, on behalf of Greene County Commercial Bank, an irrevocable letter of credit is issued to secure municipal transactional deposit accounts above the FDIC insured limit. These letters of credit are secured by residential and commercial real estate mortgage loans.
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.
As the above table shows, net interest income for the fiscal year ended June 30, 2024 has been affected most significantly by the increase in the volume of loans and the increase in rates on all interest-earning assets. This was partially offset by an increase in volume and rate of interest-bearing liabilities.
The loan yields include net amortization of certain deferred fees and costs that are considered adjustments to yields.
The loan yields are calculated net amortization of certain deferred fees and costs that are considered adjustments to yields.
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.
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, 2024, The Bank of Greene County’s maximum borrowing from the FHLB reached $372.1 million.
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.
Certificates of deposit scheduled to mature in one year or less from June 30, 2024 totaled $127.8 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.
For additional details relating to the allocation of the provision for loan losses, see Part II, Item 8 Financial Statements and Supplemental Data, Note 4, Loans of this report.
For additional details relating to the allocation of the provision for credit losses, see Part II, Item 8 Financial Statements and Supplemental Data, Note 4, Loans and Allowance for Credit Losses on Loans of this report.
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.
At June 30, 2024 and 2023, 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 18. Regulatory Matters of this Annual Report. Shareholders’ equity represented 7.3% and 6.8% of total consolidated assets at June 30, 2024 and 2023, respectively.
The Commercial Bank is a subsidiary of The Bank of Greene County, and is a New York State-chartered commercial bank. In June 2011, 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.
In June 2011, 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. Greene Properties Holding, Ltd. is a subsidiary of The Bank of Greene County.
Loans on nonaccrual status totaled $5.5 million at June 30, 2023 of which $2.0 million were in the process of foreclosure. At June 30, 2023, there were three residential real estate loans totaling $625,000 and two commercial real estate loans totaling $1.4 million in the process of foreclosure.
Loans on non-accrual status totaled $5.5 million at June 30, 2023 of which $2.0 million were in the process of foreclosure at that date. At June 30, 2023, there were three residential real estate loans totaling $625,000 and two commercial real estate loan totaling $1.4 million in the process of foreclosure.
In efforts to enhance strong levels of liquidity and to fund strong loan demand, the Bank and Commercial Bank (the “Banks”) accept brokered certificates of deposits, generally in denominations of less than $250,000, from national brokerage networks, including through IntraFi’s one-way CDARS and ICS products.
In efforts to enhance strong levels of liquidity and to fund strong loan demand, the Bank and Commercial Bank (the “Banks”) accept brokered deposits, generally in denominations of less than $250,000, from national brokerage networks, custodial deposit networks or through IntraFi’s one-way CDARS and ICS products, including IntraFi’s Insured Network Deposits (“IND”).
As of the year ended June 30, 2023, there were no borrowings outstanding with the FHLB. The liquidity position can be significantly impacted on a daily basis by funding needs associated with Greene County Commercial Bank.
As of the year ended June 30, 2024, there were $199.1 million of borrowings outstanding with the FHLB. The liquidity position can be significantly impacted on a daily basis by funding needs associated with Greene County Commercial Bank.
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 levels of these assets are dependent on the Company’s operating, financing, lending and investing activities during any given period. At June 30, 2024, cash and cash equivalents totaled $190.4 million, or 6.7% of total assets.
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.
Treasury and the Federal Reserve, (j) changes in the quality or composition of Greene County Bancorp, Inc.’s loan and investment portfolios, (k) deposit flows, (l) competition, and (m) demand for financial services in Greene County Bancorp, Inc.’s market area.
Greene Properties Holding, Ltd. is a subsidiary of The Bank of Greene County. Certain mortgages and notes held by The Bank of Greene County were transferred to and are beneficially owned by Greene Property Holdings, Ltd. The Bank of Greene County continues to service these loans.
Certain mortgages and notes held by The Bank of Greene County were transferred to and are beneficially owned by Greene Property Holdings, Ltd. The Bank of Greene County continues to service these loans.
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.
The Company holds 59.7% of its securities portfolio at June 30, 2024 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 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.
The amount of funds available to the Company through the FHLB line of credit is reduced by any letters of credit outstanding. There were $90.0 million in municipal letters of credit outstanding at June 30, 2024. Capital Resources.
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.
The rate used for this adjustment was 21% for federal income taxes, and 4.44% for New York State income taxes for the years ended June 30, 2024 and 2023.
The increase in average loan balances had the greatest impact on interest income when comparing the years ended June 30, 2023 and 2022. Interest income is derived from loans, securities and other interest-earning assets.
The increase in rate on interest-earning assets had the greatest impact on interest income when comparing the years ended June 30, 2024 and 2023. Interest income is derived from loans, securities and other interest-earning assets.
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.
The average balance of securities remained at $1.1 billion for the years ended June 30, 2024 and 2023. The average yield on securities non-taxable increased 65 basis points to 2.79% for the year ended June 30, 2024 as compared to 2.14% for the year ended June 30, 2023.
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.
The average rate paid on savings and money market accounts increased 19 basis points to 0.39% for the year ended June 30, 2024 as compared to 0.20% for the year ended June 30, 2023.
Interest expense paid on certificates of deposit amounted to $1.6 million for the year ended June 30, 2023 as compared to $283,000 for the year ended June 30, 2022, an increase of $1.3 million.
Interest expense paid on certificates of deposit amounted to $4.6 million for the year ended June 30, 2024 as compared to $1.6 million for the year ended June 30, 2023, an increase of $3.0 million.
Results of operations are also significantly affected by general economic and competitive conditions, changes in interest rates, as well as government policies and actions of regulatory authorities. Additionally, future changes in applicable law, regulations or government policies may materially affect the Company. Critical Accounting Policies The Company’s critical accounting policies relate to the allowance for loan losses.
Results of operations are also significantly affected by general economic and competitive conditions, changes in interest rates, as well as government policies and actions of regulatory authorities. Additionally, future changes in applicable law, regulations or government policies may materially affect the Company.
These notes are callable on September 15, 2026. At June 30, 2023, there were $29.7 million of these Subordinated Note Purchases Agreements outstanding, net of issuance costs. The Company’s borrowing agreements are discussed further within Part II, Item 8 Financial Statements and Supplemental Data, Note 7 Borrowings of this Annual Report.
At June 30, 2024, there were $29.8 million of these Subordinated Note Purchases Agreements outstanding, net of issuance costs. The Company’s borrowing agreements and additional borrowing capacity are discussed further within Part II, Item 8 Financial Statements and Supplemental Data, Note 7 Borrowings of this Annual Report.
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.
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 $90.7 million and $157.9 million and purchases of securities totaled $329.6 million and $212.0 million for the years ended June 30, 2024 and 2023, respectively.
The increase in rate on interest-bearing liabilities had the greatest impact on interest expense when comparing the years ended June 30, 2023 and 2022. The rate paid on interest-bearing liabilities increased 79 basis points to 1.06% for the year ended June 30, 2023 compared to 0.27% for the year ended June 30, 2022.
The increase in rate on interest-bearing liabilities had the greatest impact on interest expense when comparing the years ended June 30, 2024 and 2023. The rate paid on interest-bearing liabilities increased 123 basis points to 2.29% for the year ended June 30, 2024 compared to 1.06% for the year ended June 30, 2023.
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.
At June 30, 2024, approximately 61.6% 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 $27.9 million for the year ended June 30, 2024 as compared to $22.8 million for the year ended June 30, 2023.
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.
Total average interest-bearing liabilities increased to $2.3 billion for the year ended June 30, 2024 as compared to $2.2 billion for the year ended June 30, 2023, an increase of $84.4 million, or 3.8%. The majority of the increase related to NOW accounts, primarily resulting from growth in new deposit relationships within our business and municipal accounts.
The Company has purchased municipal securities as part of its strategy based on the fact that such securities can offer a higher tax-equivalent yield than other similar investments. 25 Index FINANCIAL OVERVIEW Net income for the year ended June 30, 2023 amounted to $30.8 million, or $1.81 per basic and diluted share, as compared to $28.0 million, or $1.64 per basic and diluted share, for the year ended June 30, 2022, an increase of $2.8 million, or 10.0%.
The Company has purchased municipal securities as part of its strategy based on the fact that such securities can offer a higher tax-equivalent yield than other similar investments. 27 Index FINANCIAL OVERVIEW Net income for the year ended June 30, 2024 amounted to $24.8 million, or $1.45 per basic and diluted share, as compared to $30.8 million, or $1.81 per basic and diluted share, for the year ended June 30, 2023, a decrease of $6.0 million, or 19.5%.
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.
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 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.
At June 30, 2023 2022 2021 2020 (Dollars in thousands) 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 % Residential construction and land 19,072 1.35 15,298 1.22 10,185 0.92 11,847 1.17 Multi-family 66,496 4.72 63,822 5.10 41,951 3.78 25,104 2.48 Commercial real estate 693,436 49.22 595,635 47.57 472,887 42.66 381,415 37.67 Commercial construction 121,958 8.66 83,748 6.69 62,763 5.66 74,920 7.40 Home equity 22,752 1.61 17,877 1.43 18,285 1.65 22,106 2.18 Consumer installment (1) 4,612 0.33 4,512 0.36 4,942 0.45 4,817 0.48 Commercial loans 108,022 7.67 110,271 8.81 172,228 15.54 213,119 21.04 Total gross loans (2) $ 1,408,791 100.00 % $ 1,251,987 100.00 % $ 1,108,408 100.00 % $ 1,012,6 60 100.00 % (1) Includes direct automobile loans (on both new and used automobiles) and personal loans.
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%.
Total average interest-earning assets increased to $2.6 billion for the year ended June 30, 2024 as compared to $2.5 billion for the year ended June 30, 2023, an increase of $73.1 million, or 2.9%.
The level of cash and cash equivalents is a function of the daily account clearing needs and deposit levels as well as activities associated with securities transactions and loan funding. All of these items can cause cash levels to fluctuate significantly on a daily basis.
The level of cash and cash equivalents is a function of the daily account clearing needs and deposit levels as well as activities associated with securities transactions and loan funding. All of these items can cause cash levels to fluctuate significantly on a daily basis. As of June 30, 2024, the Company believes it has maintained a strong liquidity position.
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.
Interest expense paid on NOW accounts amounted to $43.6 million for the year ended June 30, 2024 as compared to $17.5 million for the year ended June 30, 2023, an increase of $26.1 million.
The average rate paid on borrowings increased 22 basis points to 4.05% from 3.83% during the period. 37 Index PROVISION FOR LOAN LOSSES Management continues to closely monitor asset quality and adjust the level of the allowance for loan losses when necessary.
The average rate paid on borrowings increased 4 basis points to 4.09% from 4.05% during the period. 44 Index PROVISION FOR CREDIT LOSSES Management continues to closely monitor asset quality and adjust the level of the allowance for credit losses.
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.
The average yield on securities taxable increased 50 basis points to 2.53% for the year ended June 30, 2024 as compared to 2.03% for the year ended June 30, 2023.
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.
At or for the years ended June 30, (Dollars in thousands) 2023 2022 2021 2020 Balance at the beginning of the period $ 22,761 $ 19,668 $ 16,391 $ 13,200 Charge-offs: Residential real estate - 27 26 102 Commercial real estate 9 - - - Consumer installment 535 454 309 459 Commercial loans 120 112 500 335 Total loans charged off 664 593 835 896 Recoveries: Residential real estate 6 13 13 16 Commercial real estate 4 - - - Consumer installment 141 115 124 130 Commercial loans 35 280 1 36 Total recoveries 186 408 138 182 Net charge-offs 478 185 697 714 Provisions (benefit) charged to operations (1,071 ) 3,278 3,974 3,905 Balance at the end of the period $ 21,212 $ 22,761 $ 19,668 $ 16,391 Allowance for loan losses to total loans receivable 1.51 % 1.82 % 1.77 % 1.62 % Residential real estate net charge-offs to average loans outstanding 0.00 % 0.00 % 0.00 % 0.01 % Commercial real estate net charge-offs to average loans outstanding 0.00 % - - - Consumer installment net charge-offs to average loans outstanding 0.03 % 0.03 % 0.02 % 0.04 % Commercial loans net charge-offs to average loans outstanding 0.01 % (0.01 %) 0.05 % 0.03 % Net charge-offs to average loans outstanding 0.04 % 0.02 % 0.07 % 0.08 % Net charge-offs to average assets 0.02 % 0.01 % 0.04 % 0.05 % Allocation of Allowance for Credit Losses The following table sets forth the allocation of the allowance for credit losses by loan category at June 30, 2024.
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.
The average rate paid on certificates of deposit increased 172 basis points to 4.04% for the year ended June 30, 2024 as compared to 2.32% for the year ended June 30, 2023.
The amount recognized for the provision for loan losses is determined by management based on its ongoing analysis of the adequacy of the allowance for loan losses. Provision for loan losses amounted to a benefit of $1.1 million and a charge of $3.3 million for the years ended June 30, 2023 and 2022, respectively.
The amount recognized for the provision for credit losses is determined by management based on its ongoing analysis of the adequacy of the allowance for credit losses. Provision for credit losses on loans amounted to a charge of $786,000 for the year ended June 30, 2024 and a benefit of $1.1 million for the year ended June 30, 2023.
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.
The Company did not repurchase any shares during the year ended June 30, 2024. 40 Index Selected Equity Data: At June 30, 2024 2023 Shareholders’ equity to total assets, at end of period 7.29 % 6.79 % Book value per share (1) $ 12.10 $ 10.76 Closing market price of common stock (1) $ 33.71 $ 29.80 For the years ended June 30, 2024 2023 Average shareholders’ equity to average assets 7.23 % 6.58 % Dividend payout ratio (1) 22.07 % 15.47 % Actual dividends paid to net income (2) 13.08 % 7.12 % (1) The dividend payout ratio has been calculated based on the dividends declared per share divided by basic earnings per share.
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.
The average rate paid on NOW accounts increased 141 basis points to 2.51% for the year ended June 30, 2024 as compared to 1.10% for the year ended June 30, 2023.
PREMISES AND EQUIPMENT Premises and equipment amounted to $15.0 million and $14.4 million at June 30, 2023 and 2022, respectively.
PREMISES AND EQUIPMENT Premises and equipment amounted to $15.6 million and $15.0 million at June 30, 2024 and 2023, respectively.
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.
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.
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.
The average balance of savings and money market accounts decreased by $91.3 million to $373.7 million for the year ended June 30, 2024 as compared to $465.0 million for the year ended June 30, 2023.
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.
Factors that could affect actual results include but are not limited to: (a) changes in general market general interest rates, (b) changes in general economic conditions, (c) credit risk, (d) continued period of high inflation could adversely impact customers, (e) cybersecurity risks, (f) bank failures, (g) changes in general business and economic trends, (h) legislative and regulatory changes, (i) monetary and fiscal policies of the U.S.
The following table presents the maturity distribution of certificates of deposits of $250,000 or more: (Dollars in thousands) At June 30, 2023 Portion of certificates of deposits in excess of insurance limits $ 20,244 Certificates of deposits otherwise uninsured with a maturity of: Within three months $ 14,056 After three but within six months 2,387 After six but within twelve months - Over twelve months 3,801 The amount of certificates of deposit by time remaining to maturity as of June 30, 2023 is set forth in Part II, Item 8 Financial Statements and Supplemental Data, Note 6, Deposits of this Annual Report.
The Company continually monitors the level and composition of uninsured deposits. 39 Index The following table presents the maturity distribution of certificates of deposits of $250,000 or more: (Dollars in thousands) At June 30, 2024 Portion of certificates of deposits in excess of insurance limits $ 38,396 Certificates of deposits otherwise uninsured with a maturity of: Within three months $ 7,863 After three but within six months 13,471 After six but within twelve months 915 Over twelve months 3,397 The amount of certificates of deposit by time remaining to maturity as of June 30, 2024 is set forth in Part II, Item 8 Financial Statements and Supplemental Data, Note 6, Deposits of this Annual Report.
The average balance of NOW accounts increased $150.5 million to $1.6 billion for the year ended June 30, 2023 as compared to $1.4 billion for the year ended June 30, 2022.
The average balance of NOW accounts increased $140.3 million to $1.7 billion for the year ended June 30, 2024 as compared to $1.6 billion for the year ended June 30, 2023.
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.
Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. The credit exposure associated with risk participations-ins was $276,000 and zero as of June 30, 2024 and June 30, 2023, respectively.
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.
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 years ended June 30, 2024 and June 30, 2023.
Comparison of Financial Condition as of June 30, 2023 and 2022 CASH AND CASH EQUIVALENTS Total cash and cash equivalents increased $127.4 million to $196.4 million at June 30, 2023 from $69.0 million at June 30, 2022.
Comparison of Financial Condition as of June 30, 2024 and 2023 CASH AND CASH EQUIVALENTS Total cash and cash equivalents decreased $6.0 million to $190.4 million at June 30, 2024 from $196.4 million at June 30, 2023.
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 yield earned on such assets increased 65 basis points to 4.04% for the year ended June 30, 2024 as compared to 3.39% for the year ended June 30, 2023. Interest income earned on loans increased to $71.5 million for the year ended June 30, 2024 as compared to $60.0 million for the year ended June 30, 2023.
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 savings and money market accounts amounted to $1.5 million for the year ended June 30, 2024 as compared to $929,000 for the year ended June 30, 2023, an increase of $537,000, or 19.6%.
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 .
(Dollars in thousands) At June 30, 2023 2022 2021 2020 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 % Residential construction and land 181 1.4 141 1.2 106 0.9 141 1.2 Multi-family 197 4.7 119 5.1 186 3.8 176 2.5 Commercial real estate 13,020 49.2 16,221 47.6 13,049 42.7 8,634 37.6 Commercial construction 1,622 8.7 1,114 6.7 1,535 5.7 2,053 7.4 Home equity 46 1.6 89 1.4 165 1.6 295 2.2 Consumer installment 332 0.3 349 0.4 267 0.5 197 0.5 Commercial loans 3,201 7.7 2,355 8.8 2,348 15.5 2,804 21.0 Unallocated - - - - - - - - Totals $ 21,212 100.0 % $ 22,761 100.0 % $ 19,668 100.0 % $ 16,391 100.0 % The allowance for credit losses on unfunded commitments The allowance for credit losses on unfunded commitments represents the amount held against credit exposures that are not represented on the consolidate balance sheets.
Updated appraisals are obtained on loans when there is a reason to believe that there has been a change in the borrower’s ability to repay the loan principal and interest, generally, when a loan is in a delinquent status. Additionally, if an existing loan is to be modified or refinanced, generally, an appraisal is ordered to ensure continued collateral adequacy.
Updated appraisals are obtained on loans when there is a reason to believe that there has been a change in the borrower’s ability to repay the loan principal and interest, generally, when a loan is in a delinquent status.
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.
During the year ended June 30, 2024, the Company downgraded 12 commercial and commercial real estate relationships from special mention to substandard, and downgraded 14 commercial and commercial real estate relationships from pass to special mention, due to the deterioration in the borrower cash flows and financial performance.
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.
As of June 30, 2024, the Company had repurchased a total of 48,000 shares of the 400,000 shares authorized by the repurchase program.
The average balance on certificates increased $34.3 million to $69.3 million for the year ended June 30, 2023 as compared to $35.0 million for the year ended June 30, 2022.
The average balance on certificates increased $45.4 million to $114.7 million for the year ended June 30, 2024 as compared to $69.3 million for the year ended June 30, 2023.
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.
Interest expense on borrowings amounted to $3.0 million for the year ended June 30, 2024 as compared to $3.4 million for the year ended June 30, 2023, as the average balance of borrowings decreased $10.1 million to $72.7 million for the year ended June 30, 2024 as compared to $82.8 million for the year ended June 30, 2023.
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.
Average loans outstanding increased $83.6 million, or 6.1%, to $1.5 billion for the year ended June 30, 2024 as compared to $1.4 billion for the year ended June 30, 2023. The yield on such loans increased 54 basis points to 4.92% for the year ended June 30, 2024 as compared to 4.38% for the year ended June 30, 2023.
Dividends on FHLB stock increased to $215,000 for the year ended June 30, 2023 as compared to $50,000 for the year ended June 30, 2022. INTEREST EXPENSE Interest expense for the year ended June 30, 2023 amounted to $23.4 million as compared to $5.4 million for the year ended June 30, 2022, an increase of $18.0 million.
Dividends on FHLB stock decreased to $195,000 for the year ended June 30, 2024 as compared to $215,000 for the year ended June 30, 2023. INTEREST EXPENSE Interest expense for the year ended June 30, 2024 amounted to $52.7 million as compared to $23.4 million for the year ended June 30, 2023, an increase of $29.3 million.
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.
At June 30, 2024, liquidity measures were as follows: Cash equivalents/(deposits plus short term borrowings) 7.50 % (Cash equivalents plus unpledged securities)/(deposits plus short term borrowings) 8.43 % (Cash equivalents plus unpledged securities plus additional borrowing capacity)/(deposits plus short term borrowings) 19.04 % Off-balance sheet arrangements.
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.
Interest income earned on federal funds and interest-bearing bank balances amounted to $4.0 million for the year ended June 30, 2024 as compared to $1.6 million for the year ended June 30, 2023.
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.
Growth in interest-earning assets was due to interest bearing bank balances and loans. Growth in loans was primarily in residential and commercial real estate. Net interest rate spread and margin both decreased when comparing the years ended June 30, 2024 and 2023.
Loans on nonaccrual status totaled $6.3 million at June 30, 2022 of which $528,000 were in the process of foreclosure. 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.
Loans on non-accrual status totaled $3.7 million at June 30, 2024 of which there were four residential real estate loans totaling $686,000 and three commercial real estate loans totaling $1.6 million in the process of foreclosure.
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.
SHAREHOLDERS’ EQUITY Shareholders’ equity increased to $206.0 million at June 30, 2024 from $183.3 million at June 30, 2023, resulting primarily from net income of $24.8 million and a decrease in accumulated other comprehensive loss of $1.7 million, partially offset by dividends declared and paid of $3.2 million and the day-one CECL adoption impact of $510,000.
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.
Net interest rate spread decreased 58 basis points to 1.75% for the year ended June 30, 2024, compared to 2.33% for the year ended June 30, 2023. Net interest margin decreased 47 basis points to 1.98% for the year ended June 30, 2024, compared to 2.45% for the year ended June 30, 2023.
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.
Net interest rate spread decreased 58 basis points to 1.75% for the year ended June 30, 2024 compared to 2.33% for the year ended June 30, 2023. Net interest margin decreased 47 basis points to 1.98% for the year ended June 30, 2024 compared to 2.45% for the year ended June 30, 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeChanges 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.
Biggest changeChanges in Market Interest Rates (Basis Points) (Dollars in thousands) Company EVE $ Change from par % Change from par EVE Ratio (1) Change (2) +300 bp $ 208,413 $ (89,336 ) (30.00 )% 8.25 % (264 )bp +200 bp 240,142 (57,607 ) (19.35 ) 9.27 (162 ) +100 bp 271,966 (25,783 ) (8.66 ) 10.22 (67 ) PAR 297,749 - - 10.89 - -100 bp 316,184 18,435 6.19 11.26 37 -200 bp 332,390 34,641 11.63 11.54 65 (1) Calculated as the estimated EVE divided by the present value of total assets.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk While the Company’s loan portfolio is subject to risks associated with the local economy, the Company’s most significant form of market risk is interest rate risk because most of the Company’s assets and liabilities are sensitive to changes in interest rates.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk. While the Company’s loan portfolio is subject to risks associated with the local economy, the Company’s most significant form of market risk is interest rate risk because most of the Company’s assets and liabilities are sensitive to changes in market prices and interest rates.
The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring a company’s interest rate sensitivity “gap.” An asset or liability is deemed to be interest rate sensitive within a specific time period if it will mature or reprice within that time period.
Gap Analysis. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring a company’s interest rate sensitivity “gap.” An asset or liability is deemed to be interest rate sensitive within a specific time period if it will mature or reprice within that time period.
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.
The information set forth below is based on data that included all financial instruments as of June 30, 2024. 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, 2023.
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, 2024.
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.
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. 48 Index The following sets forth the Company’s EVE as of June 30, 2024.
Finally, the ability of many borrowers to service their adjustable-rate loans may decrease in the event of an interest rate increase. 42 Index
Finally, the ability of many borrowers to service their adjustable-rate loans may decrease in the event of an interest rate increase. 49 Index
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.
EVE sensitivity may continue to increase if rates were to 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.
In recent years, the Company has followed the following strategies to manage interest rate risk: (i) maintaining a high level of liquid interest-earning assets such as short-term interest-earning deposits and various investment securities; (ii) maintaining a high concentration of less interest-rate sensitive and lower-costing core deposits; (iii) originating consumer installment loans that have up to five-year terms but that have significantly shorter average lives due to early prepayments; (iv) originating adjustable-rate commercial real estate mortgage loans and commercial loans; and (v) where possible, matching the funding requirements for fixed-rate residential mortgages with lower-costing core deposits.
Factors beyond management’s control, such as market interest rates and competition, also have an impact on interest income and interest expense. 47 Index In recent years, the Company has followed the following strategies to manage interest rate risk: (i) maintaining a high level of liquid interest-earning assets such as short-term interest-earning deposits and various investment securities; (ii) maintaining a high concentration of less interest-rate sensitive and lower-costing core deposits; (iii) originating consumer installment loans that have up to five-year terms but that have significantly shorter average lives due to early prepayments; (iv) originating adjustable-rate commercial real estate mortgage loans and commercial loans; and (v) where possible, matching the funding requirements for fixed-rate residential mortgages with lower-costing core deposits.
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.
At June 30, 2024, 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 16.03% and 10.69% respectively.
Due to the complex nature and additional risk often associated with derivative hedging transactions, such as counterparty risk, it is the Company’s policy to continue its strategy of mitigating interest rate risk through balance sheet composition.
The Company generally does not engage in any balance sheet derivative-based hedging transactions, such as balance sheet interest rate swaps and caps. Due to the complex nature and additional risk often associated with derivative hedging transactions, such as counterparty risk, it is the Company’s policy to continue its strategy of mitigating interest rate risk through balance sheet composition.
Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in EVE require the making of certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. Gap Analysis.
Management will continue to monitor the EVE sensitivity and take corrective action, when applicable. Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in EVE require the making of certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates.
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.
In the current higher interest rate environment, EVE sensitivity has increased across the industry, as loans and investments were originated and purchased during the historically low rate environment and, as a result the loans and investments have lost market value.
The Company’s assets consist primarily of mortgage loans, which have longer maturities than the Company’s liabilities, which consist primarily of deposits. The Company does not engage in any derivative-based hedging transactions, such as interest rate swaps and caps.
Market risk is the risk of loss from adverse changes in market prices and rates. Interest rate risk is the exposure to adverse changes in the net income of the Company as a result of changes in interest rates. The Company’s assets consist primarily of mortgage loans, which have longer maturities than the Company’s liabilities, which consist primarily of deposits.
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.
The Company’s EVE modeling projects that as of the reporting date and in response to instantaneous rate increases and decreases, the EVE remains within the Company’s policy limits. This contemplates instantaneous rate shocks, 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.
These standard interest rate risk measures are described more fully below. Factors beyond management’s control, such as market interest rates and competition, also have an impact on interest income and interest expense.
These standard interest rate risk measures are described more fully below.
Removed
The 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.
Added
(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.

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