GOVB Gouverneur Bancorp Inc MD (QB)

GOUVERNEUR, N.Y., Dec. 2, 2014 /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, 2014.

Net income for the fiscal year ended September 30, 2014 decreased 10.10% to $1.73 million, or $0.78 per diluted share, compared to $1.92 million, or $0.86 per diluted share, in fiscal 2013.  The return on average assets decreased to 1.21% from 1.33% in fiscal 2013 while the return on average equity decreased to 6.48% for the year ended September 30, 2014, from 7.48% for the year ended September 30, 2013.  Total assets increased by $1.20 million, or 0.81%, from $144 million at September 30, 2013 to $145.2 million at September 30, 2014.  Net loans increased $36 thousand, or 0.03%, from $110.27 million to $110.31 million over the same period.

Commenting on the results for the year, Mr. Van Vleet said, "We are pleased with our results for the 2014 fiscal year.  The Bank continues to be profitable and maintains a loan portfolio with sound credit quality. Margins remain strong as compared to peer averages although, as expected, margins declined over the past year. We anticipate margins will continue to shrink for the next twelve month period.  Effective December 31, 2013 the Bank converted from a Federal to State form of charter as one means of controlling regulatory expenses.  We will continue to explore other alternative options for cost control in the upcoming year."

The Bank remains well-capitalized with a core capital ratio of 18.45%, an increase of 0.86% from 2013. Its strong asset composition includes non-performing assets of only 2.65% of total assets, a slight increase from the 2013 figure of 2.06%. 

In fiscal 2014, interest income decreased $427,000, or 6.02%, from $7,094,000 to $6,667,000, while interest expense decreased $170,000, or 18.10%, from $939,000 to $769,000.  Interest spread, the difference between the rate earned on interest-earning assets and the rate paid on interest-bearing liabilities, was 4.30% in fiscal 2014 and 4.47% in fiscal 2013.

Non-interest income decreased $186,000, from $1,135,000 in fiscal year 2013 to $949,000 in fiscal 2014.  Decreases in the earnings on the deferred fees plan and gain on the sale of securities contributed to the decrease.

Although non-performing loans increased in fiscal 2014, the quality of our loan portfolio remains strong.  Net loans increased $36 thousand in fiscal 2014 as compared to a decrease of $3.1 million in fiscal 2013.  We made an $80,000 provision for loan losses in fiscal 2014 and a $100,000 provision in the 2013 fiscal year. Non-performing assets were $3,854,000 at September 30, 2014, compared to $2,967,000 at September 30, 2013.  Net charge-offs were $85,000 for the year ended September 30, 2014.  The allowance for loan losses was $1,020,000 or 0.92% of total loans outstanding at September 30, 2014 as compared to $1,024,000 or 0.93% at September 30, 2013.

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

Salary and employee benefits expense increased from the 2013 level due to annual salary adjustments, health insurance cost increases and increases in supplemental retirement and deferred compensation expenses.  The increase in building expense was due in part to additional parking lot maintenance during the harsh winter months and the decrease in other operating expense included a reduction in foreclosed asset expense and professional fees.

Deposits decreased $10.3 million, or 10.79%, to $85.1 million at September 30, 2014 from $95.4 million at September 30, 2013. The Bank currently holds no brokered deposits. Advances from the FHLB increased $8.9 million from $18.4 million to $27.3 million over the same period as the need for the Company to utilize low-cost FHLB borrowings to fund its loan portfolio increased as deposits decreased.

Shareholders' equity was $27.6 million at September 30, 2014, representing an increase of 8.07% over the September 30, 2013 balance of $25.5 million.  The Company's book value was $12.41 per common share based on 2,223,931 shares issued and outstanding at September 30, 2014 versus $11.45 on 2,229,230 shares issued and outstanding on September 30, 2013.  The Company paid cash dividends totaling $0.34 per share to all public holders of our stock, during the fiscal year ending September 30, 2014.   Cambray Mutual Holding Company, our majority shareholder, waived its right to payment of dividends through a November 2013 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 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. 

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SOURCE Gouverneur Bancorp, Inc.