Highlights:
- Net Income:
$18.0 million for the nine months endedMarch 31, 2024 - Total Assets:
$2.9 billion atMarch 31, 2024 , a new record high - Net Loans:
$1.5 billion atMarch 31, 2024 , a new record high - Return on Average Assets: 0.91% for the nine months ended
March 31, 2024 - Return on Average Equity: 12.69% for the nine months ended
March 31, 2024
To enhance our strategy highlighted above, on
Total consolidated assets for the Company were
Pre-provision for credit losses net income was
Selected highlights for the three and nine months ended
Net Interest Income and Margin
- Net interest income decreased
$2.9 million to$12.3 million for the three months endedMarch 31, 2024 from$15.2 million for the three months endedMarch 31, 2023 . Net interest income decreased$8.9 million to$38.1 million for the nine months endedMarch 31, 2024 from$47.0 million for the nine months endedMarch 31, 2023 . The decrease in net interest income was due to an increase in the average balance of interest-bearing liabilities, which increased$89.5 million and$85.6 million when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively, and increases in rates paid on interest-bearing liabilities, which increased 118 and 137 basis points when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively. The decrease in net interest income was partially offset by increases in the average balance of interest-earning assets, which increased$80.5 million and$76.5 million when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively, and increases in interest rates on interest-earning assets, which increased 53 and 69 basis points when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively.
Average loan balances increased$66.7 million and$88.2 million and the yield on loans increased 44 and 58 basis points when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively. Average securities decreased$34.0 million and$68.9 million and the yield on such securities increased 18 and 61 basis points when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively. Average interest-bearing bank balances and federal funds increased$49.3 million and$58.3 million and the yield decreased 46 basis points and increased 118 basis points when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively.
The cost of NOW deposits increased 132 and 162 basis points, the cost of certificates of deposit increased 208 and 216 basis points, and the cost of savings and money market deposits increased 27 and 18 basis points when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively. The increase in the cost of interest-bearing liabilities was partly due to growth in the average balances of interest-bearing liabilities of$89.5 million and$85.6 million when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively. This was due to an increase in NOW deposits of$134.0 million and$164.8 million and an increase in average certificates of deposits of$73.2 million and$48.1 million , partially offset by a decrease in average savings and money market deposits of$95.1 million and$102.0 million and a decrease in average borrowings of$22.6 million and$25.4 million when comparing the three and nine months endedMarch 31, 2024 and 2023, respectively. Yields on interest-earning assets and costs of interest-bearing deposits increased for the three and nine months endedMarch 31, 2024 , as the Company continues to reprice assets and deposits into the higher interest rate environment. The Company determines interest rates offered on deposit accounts based on current and future economic conditions, competition, liquidity needs and the asset-liability position of the Company, while growing the retention of relationships.
- Net interest rate spread and margin both decreased when comparing the three and nine months ended
March 31, 2024 and 2023. Net interest rate spread decreased 65 and 68 basis points to 1.66% and 1.75% for the three and nine months endedMarch 31, 2024 , as compared to 2.31% and 2.43% for the three and nine months endedMarch 31, 2023 , respectively. Net interest margin decreased 53 and 54 basis points to 1.90% and 1.99% for the three and nine months endedMarch 31, 2024 , as compared to 2.43% and 2.53% for the three and nine months endedMarch 31, 2023 , respectively. The decrease was due to the higher interest rate environment, which caused competitive pressure to increase rates paid on deposits, resulting in higher interest expense. This was partially offset by increases in interest income on loans and securities, as they reprice at higher yields and the interest rates earned on new balances were higher than the low levels from the prior period. - 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. Tax equivalent net interest margin was 2.20% and 2.66% for the three months endedMarch 31, 2024 and 2023, respectively, and was 2.25% and 2.73% for the nine months endedMarch 31, 2024 and 2023, respectively.
CECL Adoption
- The Company adopted the Current Expected Credit Loss (CECL) accounting standard effective
July 1, 2023 . As a result of the day-one CECL adjustment, the Company recognized a$1.3 million decrease to the allowance for credit losses on loans, a$503,000 increase to the allowance for credit losses on investment securities held-to-maturity, a$1.5 million increase to the reserve for unfunded loan commitments, and a$510,000 decrease to retained earnings, net of$186,000 in deferred income taxes, compared to fiscal year endJune 30, 2023 .
Credit Quality and Provision for Credit Losses on Loans
- Provision for credit losses on loans amounted to
$277,000 for the three months endedMarch 31, 2024 and a benefit of$944,000 for the three month endedMarch 31, 2023 . Provision for credit losses on loans amounted to$922,000 for the nine months endedMarch 31, 2024 and a benefit of$1.2 million for the nine months endedMarch 31, 2023 . The loan provision for the nine months endedMarch 31, 2024 was primarily due to the growth in gross loans, offset by improvements in the economic forecasts. The allowance for credit losses on loans to total loans receivable was 1.38% atMarch 31, 2024 compared to 1.51% atJune 30, 2023 and 1.42% at day-one CECL adoption (July 1 , 2023). - Loans classified as substandard and special mention totaled
$51.6 million atMarch 31, 2024 and$41.9 million atJune 30, 2023 , an increase of$9.7 million . There were no loans classified as doubtful or loss atMarch 31, 2024 orJune 30, 2023 . - Net charge-offs on loans amounted to
$204,000 and$190,000 for the three months endedMarch 31, 2024 and 2023, respectively, an increase of$14,000 . Net charge-offs on loans totaled$420,000 and$407,000 for the nine months endedMarch 31, 2024 and 2023, respectively. There were no significant charge offs in any loan segment during the three and nine months endedMarch 31, 2024 . - Nonperforming loans amounted to
$5.6 million atMarch 31, 2024 and$5.5 million atJune 30, 2023 . The activity in nonperforming loans during the period included$482,000 in loan repayments,$93,000 in loans returning to performing status,$182,000 in charge-offs or transfers to foreclosed, and$940,000 of loans placed into nonperforming status. AtMarch 31, 2024 andJune 30, 2023 , nonperforming assets were 0.21% of total assets. Nonperforming loans were 0.39% of net loans atMarch 31, 2024 andJune 30, 2023 .
Noninterest Income and Noninterest Expense
- Noninterest income increased
$353,000 , or 11.5%, to$3.4 million for the three months endedMarch 31, 2024 compared to$3.1 million for the three months endedMarch 31, 2023 . Noninterest income increased$1.1 million , or 12.6%, to$10.2 million for the nine months endedMarch 31, 2024 compared to$9.1 million for the nine months endedMarch 31, 2023 . The increase during the three and nine months endedMarch 31, 2024 was primarily due to an increase in fee income earned on customer interest rate swap contracts and income from bank owned life insurance. - Noninterest expense decreased
$622,000 , or 6.3%, to$9.2 million for the three months endedMarch 31, 2024 compared to$9.9 million for the three months endedMarch 31, 2023 . Noninterest expense decreased$1.2 million , or 4.2%, to$27.4 million for the nine months endedMarch 31, 2024 , compared to$28.6 million for the nine months endedMarch 31, 2023 . The decrease during the three and nine months endedMarch 31, 2024 was primarily due to a decrease in legal and professional fees, and a benefit from reducing the reserve for unfunded loan commitments included in other expense, as compared to the three and nine months endedMarch 31, 2023 . This was partially offset by the increase inFDIC insurance premiums as compared to the three and nine months endedMarch 31, 2023 .
Income Taxes
- Provision for income taxes reflects the expected tax associated with the pre-tax income generated for the given period and certain regulatory requirements. The effective tax rate was 5.2% and 9.8% for the three and nine months ended
March 31, 2024 and 13.7% and 15.0% for the three and nine months endedMarch 31, 2023 . 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 decrease in the current quarter’s effective tax rate primarily reflected a higher mix of tax-exempt income from municipal bonds, tax advantage loans and bank-owned life insurance in proportion to pre-tax income.
Balance Sheet Summary
- Total assets of the Company were
$2.9 billion atMarch 31, 2024 and$2.7 billion atJune 30, 2023 , an increase of$173.2 million , or 6.4%. - Total cash and cash equivalents for the Company were
$255.8 million atMarch 31, 2024 and$196.4 million atJune 30, 2023 . The Company has continued to maintain strong capital and liquidity positions as ofMarch 31, 2024 . - Securities available-for-sale and held-to-maturity for the Company were
$1.0 billion atMarch 31, 2024 andJune 30, 2023 . Securities purchases totaled$194.5 million during the nine months endedMarch 31, 2024 and consisted primarily of$158.4 million of state and political subdivision securities,$26.5 million ofU.S. Treasury securities,$6.0 million of mortgage-backed securities and$3.6 million of corporate debt securities. Principal pay-downs and maturities during the nine months endedMarch 31, 2024 amounted to$156.4 million , primarily consisting of$141.1 million of state and political subdivision securities,$2.0 million of collateralized mortgage obligations, and$13.3 million of mortgage-backed securities. - Net loans receivable increased
$69.6 million , or 5.0%, to$1.5 billion atMarch 31, 2024 from$1.4 billion atJune 30, 2023 . The loan growth experienced during the nine months consisted primarily of$42.4 million in commercial real estate loans,$20.6 million in residential real estate loans, and$4.8 million in home equity loans. - Deposits totaled
$2.6 billion atMarch 31, 2024 and$2.4 billion atJune 30, 2023 , an increase of$119.9 million , or 4.9%. NOW deposits increased$194.4 million , or 11.2% and money market deposits increased$1.0 million , or 0.9%, when comparingMarch 31, 2024 andJune 30, 2023 . Savings deposits decreased$43.3 million , or 14.5%, noninterest-bearing deposits decreased$27.6 million , or 17.3%, and certificates of deposits decreased$4.6 million , or 3.6%, when comparingMarch 31, 2024 andJune 30, 2023 . As ofMarch 31, 2024 , the brokered deposit balance amounted to$120.0 million , which was included in NOW deposits. As ofJune 30, 2023 , the brokered deposit balance amounted to$60.0 million , which was included in certificates of deposits. The Company maintains an increased level of brokered deposits from several available sources as an alternative to borrowed funds, and uses the funds to support loan growth, overall liquidity and a higher cash position. - Borrowings for the Company amounted to
$85.8 million atMarch 31, 2024 compared to$49.5 million atJune 30, 2023 , an increase of$36.3 million . AtMarch 31, 2024 , borrowings included$49.6 million of Fixed-to-Floating Rate Subordinated Notes,$27.0 million in the Bank Term Funding Program with theFederal Reserve Bank , and$9.2 million of long-term borrowings with the FHLB. - Shareholders’ equity increased to
$199.2 million atMarch 31, 2024 from$183.3 million atJune 30, 2023 , resulting primarily from net income of$18.0 million and a decrease in accumulated other comprehensive loss of$991,000 , partially offset by dividends declared and paid of$2.6 million and the day-one CECL adoption impact of$510,000 .
This press release contains statements about future events that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, general economic conditions, financial and regulatory changes, changes in interest rates, regulatory considerations, competition, technological developments, retention and recruitment of qualified personnel, and market acceptance of the Company’s pricing, products and services.
Non-GAAP Financial Measures
In addition to presenting information in conformity with accounting principles generally accepted in
Consolidated Statements of Income, and Selected Financial Ratios (Unaudited)
At or for the Three Months | At or for the Nine Months | |||||||||||
Ended | Ended | |||||||||||
Dollars in thousands, except share and per share data | 2024 | 2023 | 2024 | 2023 | ||||||||
Interest income | ||||||||||||
Interest expense | 13,776 | 6,707 | 38,214 | 14,118 | ||||||||
Net interest income | 12,295 | 15,226 | 38,122 | 46,983 | ||||||||
Provision for credit losses6 | 290 | (944 | ) | 917 | (1,199 | ) | ||||||
Noninterest income | 3,412 | 3,059 | 10,189 | 9,052 | ||||||||
Noninterest expense | 9,234 | 9,856 | 27,405 | 28,604 | ||||||||
Income before taxes | 6,183 | 9,373 | 19,989 | 28,630 | ||||||||
Tax provision | 322 | 1,282 | 1,952 | 4,305 | ||||||||
Net income | ||||||||||||
Basic and diluted EPS | ||||||||||||
Weighted average shares outstanding | 17,026,828 | 17,026,828 | 17,026,828 | 17,026,828 | ||||||||
Dividends declared per share 4 | ||||||||||||
Selected Financial Ratios | ||||||||||||
Return on average assets1 | 0.88 | % | 1.25 | % | 0.91 | % | 1.26 | % | ||||
Return on average equity1 | 11.92 | % | 18.61 | % | 12.69 | % | 19.51 | % | ||||
Net interest rate spread1 | 1.66 | % | 2.31 | % | 1.75 | % | 2.43 | % | ||||
Net interest margin1 | 1.90 | % | 2.43 | % | 1.99 | % | 2.53 | % | ||||
Fully taxable-equivalent net interest margin2 | 2.20 | % | 2.66 | % | 2.25 | % | 2.73 | % | ||||
Efficiency ratio3 | 58.79 | % | 53.90 | % | 56.73 | % | 51.05 | % | ||||
Non-performing assets to total assets | 0.21 | % | 0.19 | % | ||||||||
Non-performing loans to net loans | 0.39 | % | 0.34 | % | ||||||||
Allowance for credit losses on loans to non-performing loans6 | 361.45 | % | 450.87 | % | ||||||||
Allowance for credit losses on loans to total loans6 | 1.38 | % | 1.50 | % | ||||||||
Shareholders’ equity to total assets | 6.94 | % | 6.55 | % | ||||||||
Dividend payout ratio4 | 22.64 | % | 14.69 | % | ||||||||
Actual dividends paid to net income5 | 14.50 | % | 6.76 | % | ||||||||
Book value per share | ||||||||||||
1 Ratios are annualized when necessary.
2 Interest income calculated on a taxable-equivalent basis includes the additional interest income that would have been earned if the Company’s investment in tax-exempt securities and loans had been subject to federal and
For the three months ended | For the nine months ended | |||||||||||
(Dollars in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||
Net interest income (GAAP) | ||||||||||||
Tax-equivalent adjustment | 1,897 | 1,400 | 5,051 | 3,808 | ||||||||
Net interest income (fully taxable-equivalent basis) | ||||||||||||
Average interest-earning assets | ||||||||||||
Net interest margin (fully taxable-equivalent basis) | 2.20 | % | 2.66 | % | 2.25 | % | 2.73 | % | ||||
3 The efficiency ratio has been calculated as noninterest expense divided by the sum of net interest income and noninterest income.
4 The dividend payout ratio has been calculated based on the dividends declared per share divided by basic earnings per share. No adjustments have been made to account for dividends waived by
5 Dividends declared divided by net income. The MHC waived its right to receive dividends declared during the three months
6 The Company adopted the CECL accounting standard effective
The above information is preliminary and based on the Company’s data available at the time of presentation.
Consolidated Statements of Financial Condition (Unaudited)
At | At | ||||||
(Dollars In thousands, except share data) | |||||||
Assets | |||||||
Cash and due from banks | |||||||
Interest-bearing deposits | 244,589 | 181,140 | |||||
Total cash and cash equivalents | 255,823 | 196,445 | |||||
Long term certificate of deposit | 3,083 | 4,576 | |||||
Securities available-for-sale, at fair value | 345,519 | 281,133 | |||||
Securities held-to-maturity, at amortized cost, net of | |||||||
allowance for credit losses of | 700,371 | 726,363 | |||||
Equity securities, at fair value | 343 | 306 | |||||
2,219 | 1,682 | ||||||
Loans receivable | 1,477,635 | 1,408,866 | |||||
Less: Allowance for credit losses on loans6 | (20,382 | ) | (21,212 | ) | |||
Net loans receivable | 1,457,253 | 1,387,654 | |||||
Premises and equipment | 15,651 | 15,028 | |||||
Bank owned life insurance | 56,618 | 55,063 | |||||
Accrued interest receivable | 16,762 | 12,249 | |||||
Foreclosed real estate | 302 | 302 | |||||
Prepaid expenses and other assets | 17,567 | 17,482 | |||||
Total assets | |||||||
Liabilities and shareholders’ equity | |||||||
Noninterest bearing deposits | |||||||
Interest bearing deposits | 2,425,655 | 2,278,122 | |||||
Total deposits | 2,557,107 | 2,437,161 | |||||
Borrowings, short-term | 2,000 | - | |||||
Borrowings, long-term | 34,156 | - | |||||
Subordinated notes payable | 49,635 | 49,495 | |||||
Accrued expenses and other liabilities | 29,428 | 28,344 | |||||
Total liabilities | 2,672,326 | 2,515,000 | |||||
Total shareholders’ equity | 199,185 | 183,283 | |||||
Total liabilities and shareholders’ equity | |||||||
Common shares outstanding | 17,026,828 | 17,026,828 | |||||
195,852 | 195,852 | ||||||
6 The Company adopted the CECL accounting standard effective
The above information is preliminary and based on the Company’s data available at the time of presentation.
For Further Information Contact:
President & CEO
(518) 943-2600
donaldg@tbogc.com
SEVP, COO & CFO
(518) 943-2600
michellep@tbogc.com
Source:
2024 GlobeNewswire, Inc., source