GOVB Gouverneur Bancorp Inc MD (QB)

GOUVERNEUR, N.Y., Dec. 5, 2013 /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, 2013.

Net income for the fiscal year ended September 30, 2013 decreased 1.23% to $1,921,000, or $0.86 per diluted share, compared to $1,945,000, or $0.87 per diluted share, in fiscal 2012.  The return on average assets remained at 1.33% while the return on average equity decreased to 7.48% for the year ended September 30, 2013, from 7.80% for the year ended September 30, 2012.  Total assets decreased by $2.4 million, or 1.67%, from $146.5 million at September 30, 2012 to $144.0 million at September 30, 2013.  Net loans decreased $3.1 million, or 2.73%, from $113.4 million to $110.3 million over the same period.

Commenting on the results for the year, Mr. Van Vleet said, "We are pleased with our results for the 2013 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 and continue to shrink in the current low interest rate environment.  Bank regulatory expenses continue to grow as additional requirements are issued. The Bank will closely monitor and evaluate its financial position and explore alternative options for cost control."

The Bank remains well-capitalized with a core capital ratio of 17.59%, an increase of 0.78% from 2012. Strong asset composition with non-performing assets represented 2.06% of total assets, a decrease from the 2012 figure of 2.45%. 

In fiscal 2013, interest income decreased $504,000, or 6.63%, from $7,598,000 to $7,094,000, while interest expense decreased $287,000, or 23.41%, from $1,226,000 to $939,000.  Interest spread, the difference between the rate earned on interest-earning assets and the rate paid on interest-bearing liabilities, was 4.47% in fiscal 2013 and 4.54% in fiscal 2012.

Non-interest income increased $181,000, from $954,000 in fiscal year 2012 to $1,135,000 in fiscal 2013.  Increases in non-sufficient funds charges and a gain on the sale of securities contributed to the increase.

Non-performing loans decreased in fiscal 2013 and the quality of our loan portfolio remains strong.  Net loans decreased $3.1 million in fiscal 2013 as compared to a decrease of $2.9 million in fiscal 2012.  We made a $100,000 provision for loan losses in fiscal 2013 and a $315,000 provision in the 2012 fiscal year. Non-performing assets were $2,967,000 at September 30, 2013, compared to $3,592,000 at September 30, 2012.  Net charge-offs were $16,000 for the year ended September 30, 2013.  The allowance for loan losses was $1,024,000 or 0.93% of total loans outstanding at September 30, 2013 as compared to $943,000 or 0.83% at September 30, 2012.

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

Salary and employee benefits expense increased from the 2012 level due to annual salary adjustments, health insurance cost increases and increases in supplemental retirement and deferred compensation expenses.  The increase in professional fees was due in part to an increase in compliance auditing expense and legal expenses related to the anticipated bank charter conversion.

Deposits increased $4.8 million, or 5.29%, to $95.4 million at September 30, 2013 from $90.6 million at September 30, 2012.  Securities sold under agreements to repurchase with the Federal Home Loan Bank of New York ("FHLB), $3.0 million at September 30, 2012, were restructured into a fixed borrowing, eliminating the need for pledged collateral.  The Bank currently holds no brokered deposits. Advances from the FHLB decreased $7.0 million from $25.4 million to $18.4 million over the same period as the need for the Company to utilize low-cost FHLB borrowings to fund its loan portfolio decreased as deposits increased.

Shareholders' equity was $25.5 million at September 30, 2013, representing a decrease of 0.30% over the September 30, 2012 balance of $25.6 million.  The Company's book value was $11.45 per common share based on 2,229,230 shares issued and outstanding at September 30, 2013 versus $11.46 on 2,234,148 shares issued and outstanding on September 30, 2012.  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, 2013.

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.