Gouverneur Bancorp Announces Fiscal 2011 Results

Nov 29, 2011, 08:00 ET from Gouverneur Bancorp, Inc.

GOUVERNEUR, N.Y., Nov. 29, 2011 /PRNewswire/ -- Charles C. Van Vleet Jr., President and Chief Executive Officer of Gouverneur Bancorp, Inc. (OTC Bulletin Board: GOVB) (the "Company") holding company for Gouverneur Savings and Loan Association (the "Bank"), announced today results for its fiscal year ended September 30, 2011.

Net income for the fiscal year ended September 30, 2011 increased 12.45% to $1,870,000, or $0.83 per diluted share, compared to $1,663,000, or $0.74 per diluted share, in fiscal 2010.  The return on average assets and average equity increased to 1.26% and 7.92%, respectively, for the year ended September 30, 2011 from 1.14% and 7.46%, respectively, for the year ended September 30, 2010.  Total assets grew by $2.9 million, or 1.97%, from $146.9 million at September 30, 2010 to $149.8 million at September 30, 2011, while net loans increased $1.9 million, or 1.66%, from $114.4 million to $116.3 million over the same period.

Commenting on the results for the year, Mr. Van Vleet said, "We are pleased with our results for the 2011 fiscal year.  The Bank continues to be profitable, has sound credit quality, and has shown modest growth in the loan portfolio.  We continue to operate as a community bank by serving the needs of our local customers.  Being a community bank and working with the people of the surrounding communities in this economic downturn has been a benefit for all.  Unfortunately, the decision made by General Motors in mid- 2009 to reduce dealer franchises by 42% resulted in a substantial 2011 Bank loan write-off of a former GM dealership.  However, the Bank was able to anticipate this event and increase its allowance for loan losses throughout the fiscal year to minimize the impact of the write-off.  We continue to evaluate the Bank's position closely as the uncertain economic outlook continues and the regulatory environment continues to evolve."

Gouverneur Savings and Loan remains well-capitalized with a core capital ratio of 16.20%, an increase of 0.60% from 2010. Strong asset composition with non-performing assets represented 1.65% of total assets, slightly higher than last year's 1.13%. 

In fiscal 2011, interest income decreased $96,000, or 1.19%, from $8,034,000 to $7,938,000, while interest expense decreased $436,000, or 20.63%, from $2,113,000 to $1,677,000.  Interest spread, the difference between the rate earned on interest-earning assets and the rate paid on interest-bearing liabilities, was 4.36% in fiscal 2011 and 4.11% in fiscal 2010.

Non-interest income decreased $31,000 from $924,000 in fiscal year 2010 to $893,000 in fiscal 2011.  Decreases in service charge income and the value of the underlying investments in the deferred directors fees plan contributed to the reduction.

Although non-performing loans increased in fiscal 2011, the quality of our loan portfolio has remained strong.  Net loans grew $1.7 million in fiscal 2011 as compared to growth of $0.3 million in fiscal 2010.  We made a $410,000 provision for loan losses in fiscal 2011 and a $205,000 provision in the 2010 fiscal year. Non-performing loans were $1,939,000 at September 30, 2011, compared to $1,140,000 at September 30, 2010.  Net charge-offs were $550,000 for the year ended September 30, 2011.  The allowance for loan losses was $709,000, or 0.61% of total loans outstanding at September 30, 2011 as compared to $849,000, or 0.74% at September 30, 2010.

The components of non-interest expense are presented in the following table:


For the year ended


September 30,






(In thousands)

Salaries and employee benefits

$ 2,144


$ 2,213

Directors' fees




Building, occupancy and equipment








Other operating expense




     Non interest expense

$ 3,946


$ 4,148

Salaries and employee benefits expense fell below the 2010 level primarily due to the retirement and final salary and benefit distribution to several key employees in 2010.  Equipment costs increased with the replacement of two ATM machines, one each in the Gouverneur and Alex Bay branches, totaling $44,000.  The decrease in other operating expense resulted primarily from a decrease in the values of the underlying investments in the deferred directors fees plan and decreased loss on real estate owned of $65,000 and $23,000 respectively.

Deposits decreased $0.3 million, or 0.33%, to $91.6 million at September 30, 2011 from $91.9 million at September 30, 2010.  Brokered deposits and securities sold under agreements to repurchase with the Federal Home Loan Bank of New York ("FHLB")  remain at $1.0 million and $3.0 million, respectively. Advances from the FHLB increased $1.7 million from $25.0 million to $26.7 million over the same period as the Company utilized low-cost FHLB borrowings to fund the increase in its loan portfolio.

Shareholders' equity was $24.2 million at September 30, 2011, representing an increase of 5.6% over the September 30, 2010 balance of $22.9 million.  The Company's book value was $10.82 per common share based on 2,240,464 shares issued and outstanding at September 30, 2011 versus $10.22 on 2,246,946 shares issued and outstanding on September 30, 2010.  The Company paid cash dividends totaling $0.34 per share to all public holders of our stock, while Cambray Mutual Holding Company, our majority shareholder, waived its right to receive partial dividends totaling $221,000 during the fiscal year ending September 30, 2011.

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 federally chartered savings and loan association offering a variety of banking products and services to individuals and businesses in its primary market area in southern St. Lawrence and northern 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. 

SOURCE Gouverneur Bancorp, Inc.