SOURCE: Greater Hudson Bank

Greater Hudson Bank

January 21, 2015 15:42 ET

Greater Hudson Bank, N.A. Reports Increased Earnings for the Twelve Months Ended December 31, 2014

Net Income of $2.7 Million for the Year; Investment Portfolio Increases 24.2% for the Year; Deposit Increases of 18.6% for the Year; Loan Portfolio Increases 16.3% for the Year

MIDDLETOWN, NY--(Marketwired - January 21, 2015) - Greater Hudson Bank, N.A. (the "Bank") (OTCQX: GHDS), with assets of $394.4 million, today reported net income of $432,000 or $0.04 per common share for the fourth quarter of 2014 compared to $369,000 or $0.04 per common share for the 2013 fourth quarter. For the twelve months ended December 31, 2014, net income was $2.659 million, or $0.27 per common share, compared to $1.540 million, or $0.15 per common share, for the twelve month period ending December 31, 2013. This marks the sixth straight year of profitable operations for the Hudson Valley, N.Y. based Bank.

Return on average common stockholders' equity was 4.14 percent and 6.51 percent for the three and twelve months ended December 31, 2014 compared to 3.70 percent and 3.89 percent for the three and twelve months ended December 31, 2013, respectively.

Edward T. Lutz, President and CEO stated: "We are pleased to report sustained progress in the Bank's operating results as we continue to strive to make Greater Hudson the bank of choice in our core markets of Rockland, Orange and Westchester counties. Our emphasis on access to decision makers and provision of high quality and efficient service has had the desired effect as we continue to add customers to our already strong base of business clientele. We continue to see new and desirable business opportunities and expect to continue expanding our business."

Financial highlights as of December 31, 2014 compared to December 31, 2013 are as follows:

  • Total assets increased $58.6 million, or 17.4 percent, to $394.4 million.
  • Loans, net of unearned income, increased $36.0 million, or 16.3 percent, to $256.7 million.
  • Investments increased $22.0 million, or 24.2 percent, to $113.1 million.
  • Deposits increased $49.7 million, or 18.6 percent, to $317.0 million.

Performance highlights for the three months ended December 31, 2014 compared to the December 31, 2013 period are as follows:

  • Net interest income increased $390,000, or 12.9 percent, to $3.4 million.
  • Non-interest expense decreased $370,000, or 15.1 percent, to $2.1 million.
  • Non-interest income decreased $51,000, or 29.7 percent, to $121,000.
  • Gains on securities transactions increased $172,000.
  • Provision for loan losses decreased $10,000.
  • Provision for income taxes increased $828,000 to $1.0 million.

Performance highlights for the twelve months ended December 31, 2014 compared to the December 31, 2013 period are as follows:

  • Net interest income increased $1.2 million, or 10.5 percent, to $12.8 million.
  • Non-interest expense increased $496,000, or 5.9 percent, to $9.0 million.
  • Non-interest income decreased $88,000, or 15.7 percent, to $472,000.
  • Gains on securities transactions increased $681,000 to $716,000.
  • Provision for loan losses decreased $1.4 million.
  • Provision for income taxes increased $1.5 million to $2.4 million.

"The Greater Hudson Board is pleased that the strategic direction adopted in late 2013 is continuing to be fruitful," stated Kenneth J. Torsoe, chairman of the board. Mr. Torsoe further stated that, "We are pleased to report that earnings expanded very nicely as compared to 2013 as we were able to resolve one large non-performing loan and sustain a solid expansion in our operating results. This occurred despite the valuation allowance recorded against the Bank's New York State deferred tax asset. Our GREATER team of bankers continues to capably serve existing customers and win new clientele for the Bank through diligence, dedication and hard work. The Bank's entire staff should be congratulated for their efforts."

EARNINGS

    
*Results UnauditedThree months Ended
 Twelve months Ended
 December 31,
 December 31,
 (in thousands, except ratios)  
SUMMARY OF OPERATIONS DATA:2014 2013 2014 2013
Net interest income$3,405 $3,015 $12,766 $11,550
Provision for loan losses148 158 (48) 1,302
Noninterest income121 172 472 560
Net gains on securities transactions172 - 716 35
Noninterest Expense2,087 2,457 8,950 8,454
Income before income taxes1,463 572 5,052 2,389
Provision for income taxes1,031 203 2,393 849
Net income$432 $369 $2,659 $1,540
Efficiency Ratio59.2% 77.1% 67.6% 69.8%
        
AVERAGE BALANCE SHEET DATA:2014 2013 2014 2013
Earning Assets$369,766 $306,114 $351,724 $301,324
Total Interest Bearing Liabilities302,649 248,031 288,292 246,441
Net interest spread3.55% 3.79% 3.57% 3.77%
Net interest margin3.68% 3.94% 3.63% 3.83%
        

Results for the three and twelve months ended December 31, 2014 were adversely impacted by a $427,000 valuation allowance recorded against the Bank's New York State deferred tax asset. The valuation allowance arose as a result of changes in the New York State Tax Law enacted in 2014. Based on the changes to the New York State Tax Law, starting in 2015, the Bank does not expect to be taxable for state purposes as a result of the benefit of deductions for lending in the state of New York.

As a result of the increase in income before income taxes and the valuation allowance recorded against the Bank's New York State deferred tax asset, the provision for income taxes increased $828,000 for the fourth quarter of 2014 and $1.5 million for the year compared to the prior year three and twelve month periods, respectively.

The increase in net income for the three months ended December 31, 2014 compared to the three months ended December 31, 2013, is primarily attributable to an increase in net interest income of $390,000 and decreases in non-interest expenditures of $370,000, combined with security gains of $172,000. The increase in net interest income was driven by the growth in the loan portfolio and decreases to non-interest expense resulted primarily from reductions in marketing expenses, salary and commission expenses, and unfunded commitments.

Net income for the twelve months ended December 31, 2014 increased $1.1 million compared to the twelve months ended December 31, 2013. An increase in net interest income of $1.2 million combined with the reduction in the provision for loan losses of $1.4 million and an increase in security gains of $681,000 attributed to the rise in net income. This increase in net income was offset by the increase to the provision for income taxes of $1.5 million and increases in non-interest expenses of $496,000 primarily related to increases in salary, occupancy, FDIC and legal expenditures, and loan expenses. The Bank's marketing expense and reserve for unfunded commitments also declined year-over-year.

BALANCE SHEET & CREDIT QUALITY

SELECTED BALANCE SHEET DATA - Unaudited
(in thousands, except ratios) Dec. 31,  Dec. 31,
  2014  2013
Total Investments $ 113,104  $ 91,080
Loans, net of unearned income 256,745  220,742
Allowance for loan losses 3,306  3,861
Total assets 394,367  335,787
Total deposits 316,976  267,245
Borrowings 32,313  27,667
Nonperforming assets 2,986  3,666
Allowance for loan losses to total net loans 1.29%  1.75%
Nonperforming assets to total assets 0.76%  1.09%
    

The Bank increased loans, net of unearned income, by $36.0 million and investments by $22.0 million as of December 31, 2014 compared to December 31, 2013. These increases were primarily funded by an increase in deposits of $49.7 million and borrowings of $4.6 million.

Nonperforming assets decreased to just under $3.0 million as of December 31, 2014 from $3.7 million as of December 31, 2013. The Bank continues to actively attempt to remediate and closely monitor the limited loan relationships that comprise the Bank's remaining non-performing asset balance.

CAPITAL

  
EQUITY - Unaudited As of
(in thousands, except ratios) December 31,
  2014  2013
Tier 1 Capital $ 41,333  $ 39,146
Total Stockholders' Equity $ 41,532  38,975
Book value per common share 4.14  3.89
Tier 1 Leverage Ratio 10.6%  12.2%
    

At December 31, 2014, the Bank had $41.5 million in stockholders' equity. The Bank's leverage ratio was 10.6 percent at December 31, 2014 compared to 12.2 percent at December 31, 2013. The Bank continues to be considered a well-capitalized institution under current Federal regulatory guidelines.

Greater Hudson Bank, N.A. founded in 2002, is headquartered in Middletown, New York. The Bank has 5 branches which are located in Middletown, Warwick and Monroe, Orange County, New York, Bardonia, Rockland County, New York, and White Plains, Westchester County, New York. The Bank is chartered by the Office of the Comptroller of the Currency and its deposits are insured by the Federal Deposit Insurance Corporation. Further information can be found on the Bank's website at www.GreaterHudsonBank.com.

Forward-Looking Statements: This Press Release may contain certain statements which are not historical facts or which concern the Bank's future operations or economic performance and which are to be considered forward-looking statements. Any such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Bank cautions that all forward-looking statements involve risk and uncertainties, and that actual results may differ from those indicated in the forward-looking statements as a result of various factors, such as changing economic and competitive conditions and other risk and uncertainties. In addition, any statements in this news release regarding historical stock price performance are not indicative of or guarantees of future price performance.

Contact Information

  • Contact:
    Jenet Ferris
    (845) 367-4998