United States
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0-25165
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14-1809721
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(State or Other Jurisdiction
of Incorporation)
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(Commission File No.)
Identification No.)
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(I.R.S. Employer
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302 Main Street, Catskill NY
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12414
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number, including area code: | (518) 943-2600 |
☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of class | Trading symbol | Name of exchange on which registered |
Common Stock, $0.10 par value |
GCBC |
The Nasdaq Stock Market |
Item 2.02 |
Results of Operations and Financial Condition
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Item 9.01.
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Financial Statements and Exhibits
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Exhibit No.
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Description
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Press release dated October 24, 2023
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Exhibit Number
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Description | |
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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GREENE COUNTY BANCORP, INC.
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DATE: October 24, 2023
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By:
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/s/ Donald E. Gibson |
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Donald E. Gibson
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President and Chief Executive Officer
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Net Income: $6.5 million for the three months ended September 30, 2023
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Total Assets: $2.7 billion at September 30, 2023
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Net Loans: $1.43 billion at September 30, 2023, a new record high
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Return on Average Assets: 0.99% for the three months ended September 30, 2023
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Return on Average Equity: 14.09% for the three months ended September 30, 2023
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Net interest income decreased $2.4 million to $13.4 million for the three months ended
September 30, 2023 from $15.8 million for the three months ended September 30, 2022. The decrease in net interest income was due to an increase in the average balance of interest-bearing liabilities, which increased $89.7 million when
comparing the three months ended September 30, 2023 and 2022, and increases in rates paid on interest-bearing liabilities, which increased 148 basis points when comparing the three months ended September 30, 2023 and 2022. The decrease in net
interest income was partially offset by increases in the average balance of interest-earning assets, which increased $80.4 million when comparing the three months ended September 30, 2023 and 2022, and increases in interest rates on
interest-earning assets, which increased 85 basis points when comparing the three months ended September 30, 2023 and 2022.
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Net interest rate spread and margin both decreased when comparing the three months ended
September 30, 2023 and 2022. Net interest rate spread decreased 63 basis points to 1.89% for the three months ended September 30, 2023 compared to 2.52% for the three months ended September 30, 2022. Net interest margin decreased 46 basis
points to 2.12%, for the three months ended September 30, 2023 compared to 2.58% for the three months ended September 30, 2022. The decrease during the current quarter was due to the higher interest rate environment, which resulted in higher
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 historic low levels from the prior period.
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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 2.37% and
2.76% for the three months ended September 30, 2023 and 2022.
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During the quarter ended September 30, 2023, the Company’s first quarter of fiscal 2024, 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 end June 30, 2023.
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Provision for credit losses amounted to $457,000 for the three months ended September 30,
2023. The provision for credit losses on loans amounted to $462,000 for the three months ended September 30, 2023, compared to a benefit of $499,000 for the three months ended September 30, 2022. The loan provision for the three months ended
September 30, 2023 was primarily due to the growth in gross loans and increases in the qualitative factor adjustments. The allowance for credit losses on loans to total loans receivable was 1.40% at September 30, 2023 compared to 1.51% at
June 30, 2023 and 1.42% at day-one CECL adoption (July 1, 2023).
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Loans classified as substandard or special mention totaled $43.8 million at September 30,
2023 and $41.9 million at June 30, 2023, an increase of $1.9 million. There were no loans classified as doubtful or loss at September 30, 2023 or June 30, 2023.
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Net charge-offs amounted to $93,000 and $115,000 for the three months ended September 30,
2023 and 2022, respectively, a decrease of $22,000. There were no significant charge offs in any loan segment during the three months ended September 30, 2023.
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Nonperforming loans amounted to $5.5 million at September 30, 2023 and June 30, 2023. The
activity in nonperforming loans during the period included $87,000 in loan repayments, $19,000 in loans returning to performing status, $3,000 in charge-offs or transfers to foreclosed, and $138,000 of loans placed into nonperforming status.
At September 30, 2023, nonperforming assets were 0.22% of total assets compared to 0.21% at June 30, 2023. Nonperforming loans were 0.38% and 0.39% of net loans at September 30, 2023 and June 30, 2023, respectively.
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Noninterest income increased $201,000, or 6.5%, to $3.3 million for the three months ended
September 30, 2023 compared to $3.1 million for the three months ended September 30, 2022. The increase for the three month period was primarily due to an increase in investment service income and fee income earned on customer interest rate
swap contracts, as well as income from bank owned life insurance.
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Noninterest expense remained unchanged at $8.8 million for the three months ended September
30, 2023 and September 30, 2022. During the three months ended September 30, 2023, there was an increase in computer software and supplies of $130,000 due to the Company purchasing new equipment to upgrade our IT infrastructure, which was
partially offset by a decrease in service and data processing fees paid, as compared to the three months ended September 30, 2022.
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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 13.0% for the three months ended September 30, 2023 and 15.0% for the three months ended September 30, 2022. 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 was the result of an increase in tax-exempt income proportional to total income.
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Total assets of the Company remained unchanged at $2.7 billion at September 30, 2023 and at
June 30, 2023.
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Total cash and cash equivalents for the Company were $130.3 million at September 30, 2023
and $196.4 million at June 30, 2023. The Company held excess cash balances for both quarter ends in response to the recent industry turmoil and has continued to maintain strong capital and liquidity positions as of September 30, 2023.
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Securities available-for-sale and held-to-maturity remained unchanged at $1.0 billion at
September 30, 2023 and at June 30, 2023. Securities purchases totaled $85.0 million during the three months ended September 30, 2023 and consisted primarily of $84.3 million of state and political subdivision securities. Principal pay-downs
and maturities during the three months ended September 30, 2023 amounted to $66.1 million, primarily consisting of $61.5 million of state and political subdivision securities, and $3.8 million of mortgage-backed securities.
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Net loans receivable increased $40.4 million, or 2.9%, to $1.43 billion at September 30, 2023
from $1.39 billion at June 30, 2023. The loan growth experienced during the three months consisted primarily of $27.9 million in commercial real estate loans, $6.7 million in residential real estate loans, $2.6 million in home equity loans
and $2.3 million in commercial loans.
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Deposits totaled $2.4 billion at both September 30, 2023 and at June 30, 2023. NOW deposits
increased $28.4 million, or 1.6%, and noninterest-bearing deposits increased $7.0 million, or 4.4%, when comparing September 30, 2023 and June 30, 2023. Certificates
of deposits decreased $16.3 million, or 12.7%, money market deposits decreased $14.1 million, or 12.3%, and savings deposits decreased $21.7 million, or 7.2%, when comparing September 30, 2023 and June 30, 2023. As of September 30, 2023, the overall brokered deposit balance amounted to $62.7 million, which included $15.0 million of NOW deposits in the form of IntraFi Insured Network Deposits
and $47.7 million of certificates of deposits in the form of brokered certificates of deposits. As of June 30, 2023, the overall brokered deposits balance amounted to $60.0 million of brokered certificates of deposits. The Company
maintained the increased level of brokered deposits to support overall liquidity and a higher cash position.
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Borrowings for the Company amounted to $49.5 million of Fixed-to-Floating Rate Subordinated
Notes and $4.4 million of long-term borrowings with the Federal Home Loan Bank of New York at September 30, 2023 compared to $49.5 million of Fixed-to-Floating Rate Subordinated Notes at June 30, 2023, an increase of $4.4 million.
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Shareholders’ equity increased to $184.2 million at September 30, 2023 from $183.3 million at
June 30, 2023, resulting primarily from net income of $6.5 million, partially offset by dividends declared and paid of $1.4 million, an increase in accumulated other comprehensive loss of $3.7 million and the day-one CECL adoption impact of
$510,000.
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At or for the Three Months
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Ended September 30,
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Dollars in thousands, except share and per share data
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2023
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2022
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Interest income
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$
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24,672
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$
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18,640
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Interest expense
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11,233
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2,806
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Net interest income
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13,439
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15,834
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Provision for credit losses6
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457
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(499
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)
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Noninterest income
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3,299
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3,098
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Noninterest expense
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8,845
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8,797
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Income before taxes
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7,436
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10,634
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Tax provision
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967
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1,598
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Net Income
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$
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6,469
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$
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9,036
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Basic and diluted EPS
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$
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0.38
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$
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0.53
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Weighted average shares outstanding
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17,026,828
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17,026,828
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Dividends declared per share4
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$
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0.08
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$
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0.07
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Selected Financial Ratios
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Return on average assets1
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0.99
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%
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1.43
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%
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Return on average equity1
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14.09
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%
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22.55
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%
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Net interest rate spread1
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1.89
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%
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2.52
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%
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Net interest margin1
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2.12
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%
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2.58
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%
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Fully taxable-equivalent net interest margin2
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2.37
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%
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2.76
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%
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Efficiency ratio3
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52.84
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%
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46.47
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%
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Non-performing assets to total assets
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0.22
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%
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0.21
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%
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Non-performing loans to net loans
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0.38
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%
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0.41
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%
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Allowance for credit losses on loans to non-performing loans6
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369.10
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%
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407.79
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%
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Allowance for credit losses on loans to total loans6
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1.40
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%
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1.64
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%
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Shareholders’ equity to total assets
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6.85
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%
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6.18
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%
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Dividend payout ratio4
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21.05
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%
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13.21
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%
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Actual dividends paid to net income5
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21.05
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%
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6.04
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%
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Book value per share
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$
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10.82
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$
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9.37
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For the three months ended September 30,
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(Dollars in thousands)
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2023
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2022
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Net interest income (GAAP)
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$
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13,439
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$
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15,834
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Tax-equivalent adjustment
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1,563
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1,125
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Net interest income (fully taxable-equivalent basis)
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$
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15,002
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$
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16,959
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Average interest-earning assets
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$
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2,534,918
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$
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2,454,479
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Net interest margin (fully taxable-equivalent basis)
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2.37
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%
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2.76
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%
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At
September 30, 2023
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At
June 30, 2023
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(Dollars In thousands, except share data)
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Assets
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Cash and due from banks
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$
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23,454
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$
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15,305
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Interest-bearing deposits
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106,799
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181,140
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Total cash and cash equivalents
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130,253
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196,445
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Long term certificate of deposit
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4,070
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4,576
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Securities- available for sale, at fair value
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308,716
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281,133
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Securities- held to maturity, at amortized cost, net of allowance for credit losses of $498 at September 30, 20236
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711,716
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726,363
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Equity securities, at fair value
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299
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306
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Federal Home Loan Bank stock, at cost
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1,979
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1,682
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Gross loans receivable
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1,448,402
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1,408,791
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Less: Allowance for credit losses on loans6
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(20,249
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)
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(21,212
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)
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Unearned origination fees and costs, net
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(62
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)
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75
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Net loans receivable
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1,428,091
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1,387,654
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Premises and equipment
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15,282
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15,028
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Bank owned life insurance
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55,425
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55,063
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Accrued interest receivable
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13,761
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12,249
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Foreclosed real estate
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302
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302
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Prepaid expenses and other assets
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18,301
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17,482
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Total assets
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$
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2,688,195
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$
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2,698,283
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Liabilities and shareholders’ equity
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Noninterest bearing deposits
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$
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166,054
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$
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159,039
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Interest bearing deposits
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2,254,427
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2,278,122
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Total deposits
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2,420,481
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2,437,161
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Borrowings from FHLB, long-term
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4,374
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-
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Subordinated notes payable
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49,542
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49,495
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Accrued expenses and other liabilities
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29,630
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28,344
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Total liabilities
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2,504,027
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2,515,000
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Total shareholders’ equity
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184,168
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183,283
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Total liabilities and shareholders’ equity
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$
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2,688,195
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$
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2,698,283
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Common shares outstanding
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17,026,828
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17,026,828
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Treasury shares
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195,852
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195,852
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