Gouverneur Bancorp Announces Fiscal 2012 Results

Nov 21, 2012, 12:29 ET from Gouverneur Bancorp, Inc.

GOUVERNEUR, N.Y., Nov. 21, 2012 /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, 2012.

Net income for the fiscal year ended September 30, 2012 increased 4.01% to $1,945,000, or $0.87 per diluted share, compared to $1,870,000, or $0.83 per diluted share, in fiscal 2011.  The return on average assets and average equity increased to 1.33% while the return on average equity decreased to 7.80% for the year ended September 30, 2012 from 1.26% and 7.92%, respectively, for the year ended September 30, 2011.  Total assets decreased by $3.3 million, or 2.22%, from $149.8 million at September 30, 2011 to $146.5 million at September 30, 2012.  Net loans decreased $2.9 million, or 2.53%, from $116.3 million to $113.4 million over the same period.

Commenting on the results for the year, Mr. Van Vleet said, "We are pleased with our results for the 2012 fiscal year.  The Bank continues to be profitable and have sound credit quality.  The Bank was able to hold down operational and interest expenses to more than offset the reduction in earnings due to declining margins.  Management anticipates margins to continue to shrink over the coming year. The Bank is incurring additional expense due to the increasing regulatory oversight of the Office of the Comptroller of the Currency and the Federal Reserve."

"We will continue to closely monitor and evaluate the Bank's financial position as the current economic environment continues to be uncertain."

"I encourage you to write to your congressional lawmakers on the importance of the community bank and request relief for community banks such as Gouverneur Savings & Loan from the unnecessary regulatory burden enacted due to Wall Street bank failures."

The Bank remains well-capitalized with a core capital ratio of 16.81%, an increase of 0.61% from 2011. Strong asset composition with non-performing assets represented 1.28% of total assets, a decrease from the 2011 figure of 1.65%. 

In fiscal 2012, interest income decreased $340,000, or 4.28%, from $7,938,000 to $7,598,000, while interest expense decreased $451,000, or 26.89%, from $1,677,000 to $1,226,000.  Interest spread, the difference between the rate earned on interest-earning assets and the rate paid on interest-bearing liabilities, was 4.54% in fiscal 2012 and 4.36% in fiscal 2011.

Non-interest income increased $61,000 from $893,000 in fiscal year 2011 to $954,000 in fiscal 2012.  Increases in ATM card income and the value of the underlying investments in the deferred director's fees plan contributed to the increase.

Non-performing loans decreased in fiscal 2012 and the quality of our loan portfolio remains strong.  Net loans decreased $2.9 million in fiscal 2012 as compared to an increase of $1.9 million in fiscal 2011.  We made a $315,000 provision for loan losses in fiscal 2012 and a $410,000 provision in the 2011 fiscal year. Non-performing loans were $1,723,000 at September 30, 2012, compared to $1,939,000 at September 30, 2011.  Net charge-offs were $39,000 for the year ended September 30, 2012.  The allowance for loan losses was $943,000 or 0.83% of total loans outstanding at September 30, 2012 as compared to $709,000 or 0.61% at September 30, 2011.

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

For the year ended

September 30,



(In thousands)

Salaries and employee benefits

$ 2,270

$ 2,144

Directors' fees



Data processing



Professional fees



Other operating expense



     Non interest expense

$ 4,139

$ 3,946

Salary expense increased from the 2011 level due in part to the addition of a full-time information technology technician and annual salary adjustments.  Employee benefits increased 15% primarily due to health insurance cost increases.  The increase in professional fees was due in part to the consulting expense involved in completing a new 3-year business plan.

Deposits decreased $1.0 million, or 1.10%, to $90.6 million at September 30, 2012 from $91.6 million at September 30, 2011.  Securities sold under agreements to repurchase with the Federal Home Loan Bank of New York ("FHLB") remain at $3.0 million.  The Bank currently holds no brokered deposits. Advances from the FHLB decreased $4.4 million from $29.7 million to $25.3 million over the same period as the need for the Company to utilize low-cost FHLB borrowings to fund its loan portfolio decreased.

Shareholders' equity was $25.6 million at September 30, 2012, representing an increase of 5.7% over the September 30, 2011 balance of $24.2 million.  The Company's book value was $11.46 per common share based on 2,234,148 shares issued and outstanding at September 30, 2012 versus $10.82 on 2,240,464 shares issued and outstanding on September 30, 2011.  The Company paid cash dividends totaling $0.34 per share to all public holders of our stock, including Cambray Mutual Holding Company, our majority shareholder, during the fiscal year ending September 30, 2012.

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.