GOUVERNEUR, N.Y., Dec. 07, 2018 (GLOBE NEWSWIRE) — Charles C. Van Vleet Jr., President and Chief Executive Officer of Gouverneur Bancorp, Inc. (OTC Pink: GOVB) (the “Company”) holding company for Gouverneur Savings and Loan Association (the “Bank”), announced today results for its fiscal year ended September 30, 2018.
Total Revenue (net interest income plus non-interest income) for fiscal year 2018 was $6.84 million, an increase of $276,000 over the 2017 fiscal year-end total of $6.57 million. The Bank remains well-capitalized with a core capital ratio of 22.71%, an increase of 1.49% from 2017.
Net income for the fiscal year ended September 30, 2018 decreased 10.56% to $1.19 million, or $0.54 per diluted share, compared to $1.33 million, or $0.60 per diluted share, in fiscal 2017. The earnings resulted in a return on average assets of 0.91%, a decrease from 0.98% in fiscal 2017, while the return on average equity decreased to 3.97% for the year ended September 30, 2018, from 4.46% for the year ended September 30, 2017.
In fiscal 2018, interest income on loans decreased $165,000 from $5.18 million at September 30, 2017 to $5.02 million at September 30, 2018. Total interest income decreased $285,000, or 4.74%, from $6.01 million to $5.73 million.
Interest expense on deposits increased $12,000, from $256,000 at September 30, 2017 to $268,000 at September 30, 2018. Interest expense incurred on borrowings from the Federal Home Loan Bank, $202,000 at the end of fiscal 2017, increased $70,000, to $272,000 at the end of fiscal 2018, resulting in a total interest expense increase of $516,000.
Interest spread, the difference between the rate earned on interest-earning assets and the rate paid on interest-bearing liabilities, was 4.27% in fiscal 2018 and 4.30% in fiscal 2017.
Non-interest income increased $498,000, from $1,134,000 in fiscal year 2017 to $1,632,000 in fiscal 2018. An increase in unrealized gains on swap agreements of $618,000 was the primary contributor to the increase.
Total non-interest expense decreased $72,000 from $4.78 million at the end of September 2017 to $4.71 million at the end of September 2018. Salary and employee benefits expense decreased modestly from the 2017 level due to staffing transitions and lowered health insurance costs. Directors’ fees increased due to a change in the retirement plan provisions, and data processing increased with new anti-money laundering regulatory requirements. The increase in building, occupancy and equipment was due in part to the cost of parking lot snow removal and maintenance over the winter months.
The components of non-interest expense are presented in the following table:
|For the year ended
|Salaries and employee benefits||$||2,675||$||2,717|
|Building, occupancy and equipment||569||559|
|Other operating expense||970||1,048|
Commenting on the results for the year, Mr. Van Vleet said, “We are pleased with our results for the 2018 fiscal year as Gouverneur Savings and Loan continued to perform well among its peer group. The Bank has maintained its record of strong earnings while expenses continued to be well managed.
“The Bank began entering into interest rate swap contracts in 2015 as a means of hedging the cost of certain borrowings and to increase the interest rate sensitivity of certain assets. As of the end of fiscal 2018, the mark to market gain on the Bank’s swap position is $747,000. While the initial locked in pay-fixed rate on the swaps created an adverse effect on net interest costs, the more recent increases in long- and short- term interest rates have resulted in a more favorable outcome that is expected to continue as LIBOR, the driver of the variable rate payment to the Bank, is forecasted for further increases.”
Net loans decreased $4.02 million, or 4.04%, from $99.65 million to $95.63 million over the same period. The Bank made a $65,000 provision for loan losses in fiscal 2018, a decrease from the $120,000 provision made in the 2017 fiscal year. Non-performing assets were $2.01 million at September 30, 2018, compared to $2.42 million at September 30, 2017. Net charge-offs, currently $175,000, increased for the fiscal year ended September 30, 2018. The allowance for loan losses was $776,000 or 0.81% of total loans outstanding at September 30, 2018 as compared to $886,000 or 0.89% at September 30, 2017.
Deposits increased $947,000, or 1.13%, to $84.62 million at September 30, 2018 from $83.67 million at September 30, 2017. The Bank currently holds no brokered deposits. Advances from the FHLB decreased $4.75 million, from $16.75 million to $12.00 million over the same period as the need for the Company to fund its loan portfolio with low-cost FHLB borrowings decreased.
Total assets decreased by $4.43 million, or 3.25%, from $136.26 million at September 30, 2017 to $131.83 million at September 30, 2018. Asset composition includes non-performing assets of 1.53% of total assets, a decrease from the 2017 figure of 1.77%.
Shareholders’ equity was $29.98 million at September 30, 2018, representing an increase of 0.45% from the September 30, 2017 balance of $29.84 million. The Company’s book value was $13.77 per common share based on 2,176,908 shares issued and outstanding at September 30, 2018 versus $13.71 on an equal amount of shares issued and outstanding on September 30, 2017. The Company paid cash dividends totaling $0.34 per share to all public holders of our stock, during the fiscal year ending September 30, 2018. Cambray Mutual Holding Company, our majority shareholder, waived its right to payment of dividends through a November 2017 vote by its shareholders.
The Company, which is headquartered in Gouverneur, New York, is the holding company for Gouverneur Savings and Loan Association. Founded in 1892, the Bank is a New York State chartered savings and loan association offering a variety of banking products and services to individuals and businesses in its primary market area in St. Lawrence, Lewis and Jefferson Counties in New York State.
Statements in this news release contain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs of management as well as assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. These risks and uncertainties include among others, the impact of changes in market interest rates and general economic conditions, changes in government regulations, changes in accounting principles and the quality or composition of the loan and investment portfolios. Therefore, actual future results may differ significantly from results discussed in the forward-looking statements.
For more information, contact Charles C. Van Vleet Jr., President and Chief Executive Officer at (315) 287-2600.