Greene County Bancorp, Inc. operates as the holding company for The Bank of Greene County that provides a variety of financial services to meet the needs of the communities it serves. The company operates as a subsidiary of Greene County Bancorp, MHC.
The bank’s principal business consists of attracting retail deposits from the general public in the areas surrounding its branches and investing those deposits, together with funds generated from operations and borrowings, primarily in residential...
Greene County Bancorp, Inc. operates as the holding company for The Bank of Greene County that provides a variety of financial services to meet the needs of the communities it serves. The company operates as a subsidiary of Greene County Bancorp, MHC.
The bank’s principal business consists of attracting retail deposits from the general public in the areas surrounding its branches and investing those deposits, together with funds generated from operations and borrowings, primarily in residential mortgage loans, commercial real estate mortgage loans, consumer loans, home equity loans and commercial business loans. In addition, the bank invests a significant portion of its assets in state and political subdivision securities and mortgage-backed securities. The bank’s revenues are derived principally from the interest on its residential and commercial real estate mortgages, and to a lesser extent, from interest on consumer and commercial loans and other types of securities, as well as from servicing fees and service charges and other fees collected on its deposit accounts, debit card fee income, and bank owned life insurance income. The bank offers investment alternatives for customers, which also contributes to its revenues through Osaic Institutions, Inc., which allows it to rebrand these alternative investment services as Greene Investment Services. The bank’s primary sources of funds are deposits, borrowings from the Federal Home Loan Bank of New York (FHLB), and principal and interest payments on loans and securities.
Greene County Commercial Bank
The Bank of Greene County operates a limited-purpose subsidiary, Greene County Commercial Bank (the Commercial Bank). Greene County Commercial Bank has the power to receive deposits only to the extent of accepting for deposit the funds of the United States and the state of New York and their respective agents, authorities and instrumentalities, and local governments as defined in Section 10(a)(1) of the New York General Municipal Law.
Greene Property Holdings, Ltd.
The Bank of Greene County also operates a real estate investment trust, Greene Property Holdings, Ltd. Greene Property Holdings, Ltd. was formed as a New York corporation that elected under the Internal Revenue Code to be taxed as a real estate investment trust. The Bank of Greene County transferred beneficial ownership of certain mortgages and notes to Greene Property Holdings, Ltd. in exchange for 100% of the common stock of Greene Property Holdings, Ltd. The Bank of Greene County continues to service these mortgage customers pursuant to a management and servicing agreement with Greene Property Holdings, Ltd.
Market Area
The company is a community bank offering a variety of financial services to meet the needs of the communities it serves. The company operates full-service banking offices, lending centers, an operations center, customer call center and a wealth management center, located in its market area consisting of the Hudson Valley and Capital District Regions of New York State. The primary market area the company serves is the Greene, Columbia, Albany, Ulster and Rensselaer Counties of New York State.
Lending Activities
The principal lending activity of the company is the origination, for retention in its portfolio, of fixed-rate and adjustable-rate mortgage loans collateralized by residential and commercial real estate primarily located within its primary market area. The company also originates home equity loans, line of credit products, consumer loans and commercial business loans, and has increased its focus on all aspects of commercial lending.
The company continues to utilize high quality underwriting standards in originating real estate loans. The company originates both fixed and adjustable rate loans for commercial, residential and consumer lending with 10, 15, and 20 year terms. The only type of 30 year term loans offered, is the bank’s first time homebuyer program, which offers a fixed rate loan, with a 30 year amortization.
Residential, Construction and Land Loans: The company's primary consumer lending activity is the origination of owner occupied residential mortgage loans collateralized by property located in the company’s primary market area. Residential mortgage loans refer to loans collateralized by one to four-family residences, both owner and non-owner occupied. Multi-family loans collateralized by 5 units or more, such as apartment buildings are originated through the commercial loan platform. The company originates residential mortgage loans with a maximum loan-to-value ratio of 85%, except for the first time homebuyer program which allows for a loan-to-value ratio of up to 90%. The company generally requires fire and casualty insurance, the establishment of a mortgage escrow account for the payment of real estate taxes, and hazard and flood insurance. The company requires title insurance on most loans for the construction or purchase of residential properties collateralizing real estate loans made by the company.
The company offers residential mortgage loans with fixed and adjustable interest rates. The company's adjustable-rate mortgage (ARM) loans provide for maximum rate adjustments of 150 basis points per year and 600 basis points over the term of the loan. Generally, the company's ARM loans adjust annually after the initial fixed rate portion expires. After origination, the interest rate on such ARM loans is reset based upon a contractual spread or margin above the average yield on one-year United States Treasury securities, adjusted to a constant maturity, as published weekly by the Federal Reserve Board. The company offers home equity line of credit ARM loans, with initial interest rates that are below market, referred to as introductory rates, however, in underwriting such loans, borrowers qualified at the full index rate.
The company’s willingness and capacity to originate and hold in portfolio shorter-term fixed-rate residential mortgage loans has enabled it to expand customer relationships, where borrowers have generally preferred fixed-rate mortgage loans. The company's residential mortgage loans are generally originated by its loan representatives operating in its Bank offices through their contacts with existing or past loan customers, depositors of the company, attorneys and accountants who refer loan applications from the general public, and local realtors. The company has loan originators who call upon customers during non-banking hours and at locations convenient to the customer.
The company originates construction-to-permanent loans to homeowners for the purpose of construction of primary and secondary residences. The company issues a commitment and has one closing which encompasses both the construction phase and permanent financing. The company also offers loans collateralized by undeveloped land. The company offers and originates non-owner occupied 1-4 family loans through the residential mortgage department. These loans are generally located in the company’s primary market area.
Commercial Real Estate Mortgages: Multi-family, mixed-use properties, industrial-warehouse and other commercial properties collateralize the commercial real estate portfolio. The company originates fixed and adjustable rate commercial real estate mortgage loans with standard terms ranging between 5 to 20 years. The company generally requires personal guarantees on all commercial real estate mortgages, unless the properties are fully stabilized with strong cash flow coverage and collateral position.
The company may require an environmental site assessment to be performed by an independent professional for commercial real estate mortgage loans. It is also the company’s policy to require hazard insurance on all commercial real estate mortgage loans. In addition, the company may require borrowers to make payments to a mortgage escrow account for the payment of property taxes and flood insurance when applicable. Any exceptions to the company’s loan policies must be made in accordance with the limitations set out in each policy. Commercial real estate mortgage loans often involve large loan balances to single borrowers or groups of related borrowers.
Consumer Loans: The company’s consumer loans consist of direct loans on new and used automobiles, personal loans (either secured or unsecured), home equity loans, and other consumer installment loans (consisting of passbook loans, unsecured home improvement loans, recreational vehicle loans, and deposit account overdrafts). Consumer loans (other than home equity loans and deposit account overdrafts) are originated at fixed rates with terms to maturity of one to five years.
Consumer loans generally have shorter terms and higher interest rates than residential mortgage loans. In addition, consumer loans expand the products and services offered by the company to better meet the financial services needs of its customers.
The company offers fixed and adjustable rate home equity loans that are collateralized by the borrower’s residence. Home equity loans are generally underwritten with terms not to exceed 25 years and with a loan to value ratio of 85% when combined with the principal balance of the existing first mortgage loan, when the company holds the first mortgage. The company appraises the property collateralizing the loan at the time of the loan application in order to determine the value of the property collateralizing the home equity loans.
Commercial Loans: The company also originates commercial loans with terms of up to 20 years at fixed and adjustable rates. The company generally requires annual financial statements, tax returns and personal guarantees from the commercial borrowers. The company also generally requires an appraisal of any real estate that collateralizes the loan. The company’s commercial loan portfolio includes loans collateralized by inventory, business assets, fire trucks, other equipment, or real estate.
Securities Activities
The company’s policies generally limit securities investments to the U.S. government and securities of government sponsored enterprises, federal funds sold, municipal bonds, corporate debt obligations, subordinated debt of banks and certain mutual funds. In addition, the company’s policies permit investments in mortgage-backed securities, including securities issued and guaranteed by Fannie Mae, Freddie Mac, and GNMA, and collateralized mortgage obligations issued by these entities.
As of June 30, 2024, all mortgage-backed securities including collateralized mortgage obligations were securities of government sponsored enterprises, and no private-label mortgage-backed securities or collateralized mortgage obligations were held in the securities portfolio. The company's investment in state and political subdivisions securities, generally are municipal obligations that are general obligations supported by the taxing authority of the issuer, and in some cases are insured. The obligations issued by school districts are supported by state aid. Primarily, these investments are issued by municipalities within New York State.
Deposits
The company offers a variety of deposit accounts with a range of interest rates and terms. The company’s deposit accounts consist of savings, NOW accounts, money market accounts, certificates of deposit, noninterest-bearing checking accounts and Individual Retirement Accounts (IRAs). The company uses traditional means of advertising its deposit products, including radio, television, print and social media. While the company accepts certificates of deposit in excess of $250,000.
Regulation
The company is a non-diversified savings and loan holding company within the meaning of the Home Owners’ Loan Act. As such, Greene County Bancorp, MHC and Greene County Bancorp, Inc. are registered with the FRB and are subject to FRB regulations, supervision and reporting requirements.
The company’s two banking subsidiaries are The Bank of Greene County, which is a federally chartered savings bank; and Greene County Commercial Bank, which is a New York-chartered bank. The Federal Deposit Insurance Corporation (FDIC) through the Deposit Insurance Fund (DIF) insures their deposit accounts up to applicable limits. The Bank of Greene County and Greene County Commercial Bank are subject to extensive regulation by the Office of the Comptroller of the Currency (OCC) and the New York State Department of Financial Services (the ‘Department’), respectively, as their chartering agencies, and by the FDIC, as their deposit insurer. The Bank of Greene County and Greene County Commercial Bank are required to file reports with, and is periodically examined by the OCC and the Department, respectively, as well as the FDIC concerning their activities and financial condition, and must obtain regulatory approvals prior to entering into certain transactions, including, but not limited to, mergers with or acquisitions of other banking institutions. The Bank of Greene County is a member of the FHLB of New York and is subject to certain regulations by the Federal Home Loan Bank System. Both Greene County Bancorp, Inc. and Greene County Bancorp, MHC, as savings and loan holding companies, are subject to regulation and examination by the Federal Reserve Board (FRB) and are required to file reports with the FRB.
As a federal savings association, the bank must satisfy the qualified thrift lender, or ‘QTL’, requirement by meeting one of two tests: the Home Owners’ Loan Act (HOLA) QTL test or the Internal Revenue Service (IRS) Domestic Building and Loan Association (DBLA) test.
The bank received a satisfactory Community Reinvestment Act rating in its most recent examination. The bank is subject to FDIC regulations regarding the privacy protection provisions of the Gramm-Leach-Bliley Act.
In additional to the provisions in the Gramm-Leach-Bliley Act relating to data security, the company and its subsidiaries are subject to many federal and state laws, regulations and regulatory interpretations which impose standards and requirements related to cybersecurity.
The bank’s deposits are insured by the Deposit Insurance Fund, as administered by the Federal Deposit Insurance Corporation, up to the maximum amount permitted by law.
The bank’s authority to extend credit to its directors, executive officers and 10% shareholders, as well as to entities controlled by such persons, is governed by the requirements of Sections 22(g) and 22(h) of the FRA and Regulation O of the Federal Reserve Board.
The bank is a member of the Federal Home Loan Bank System.
The bank’s operations are also subject to federal laws applicable to credit transactions, such as the Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; Truth in Savings Act; and rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
The operations of the bank also are subject to the Right to Financial Privacy Act; Electronic Funds Transfer Act and Regulation E promulgated thereunder; Check Clearing for the 21st Century Act (also known as ‘Check 21’); the USA PATRIOT Act; and the Gramm-Leach-Bliley Act.
The company’s commercial bank subsidiary, Greene County Commercial Bank, derives its authority primarily from the applicable provisions of the New York Banking Law and the regulations adopted under that law.
The company’s common stock is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934. The company is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934.
The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The company has policies, procedures and systems designed to comply with these regulations, and the company reviews and documents such policies, procedures and systems to ensure continued compliance with these regulations.
History
Greene County Bancorp, Inc. was founded in 1889.
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