Executive Summary

Q2 FY2025 delivered stronger profitability: Net income rose to $7.49 million and EPS to $0.44, up 31% YoY, with net interest margin improving to 2.04% and efficiency ratio to 52.3% .
Balance sheet reached new records: Total assets $2.97B, net loans $1.53B, deposits $2.47B; securities AFS+HTM reached ~$1.15B as the bank continued to deploy into higher-yielding municipal and agency securities .
Credit quality remained solid though watchlist loans increased: NPLs rose modestly to $4.1M (0.26% of net loans) and substandard/special mention loans totaled $54.2M (mostly performing), while the ACL/loans held at 1.30% .
Dividend maintained: $0.09 quarterly (annualized $0.36); MHC will waive dividends through Sep 2025 per regulatory non-objection, supporting capital retention .
Consensus estimates from S&P Global were unavailable; therefore beat/miss versus Street cannot be determined for Q2 [GetEstimates error – SPGI daily limit exceeded].

What Went Well and What Went Wrong

What Went Well

Net income and EPS increased 31% YoY, driven by higher net interest income and margin expansion as assets repriced at higher yields and deposit pricing was strategically reduced in line with Fed rate cuts .
Net interest margin/o spread improved YoY: NIM to 2.04% (+10 bps YoY) and spread to 1.80% (+10 bps), with tax-equivalent NIM up to 2.31% reflecting a richer mix of tax-advantaged securities and loans .
Operating efficiency improved: Efficiency ratio fell to 52.31% (vs 58.78% prior year), while noninterest income grew 11.4% YoY on swaps fees and loan fees; BOLI income supported six-month growth .

What Went Wrong

Nonperforming loans increased to $4.1M and loans classified as substandard/special mention rose to $54.2M, largely from a downgrade of one commercial relationship, though $49.8M of these were still performing .
Provision for credit losses increased YoY; note a discrepancy: narrative cites $505k loan provision vs the income statement’s $478k total provision—likely due to classification across loan, securities, and unfunded commitments reserves .
Deposit mix showed declines in noninterest-bearing and money market balances QoQ, offset by growth in NOW and CDs, raising funding costs even as management executes strategic rate reductions .

Financial Results

Quarterly progression (oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Interest income ($USD Thousands)	$27,328	$27,769	$29,418
Interest expense ($USD Thousands)	$14,471	$14,633	$15,350
Net interest income ($USD Thousands)	$12,857	$13,136	$14,068
Provision for credit losses ($USD Thousands)	$(151)	$634	$478
Noninterest income ($USD Thousands)	$3,719	$3,737	$3,875
Noninterest expense ($USD Thousands)	$9,897	$9,550	$9,386
Income before taxes ($USD Thousands)	$6,830	$6,689	$8,079
Tax provision ($USD Thousands)	$98	$428	$589
Net income ($USD Thousands)	$6,732	$6,261	$7,490
EPS ($USD)	$0.40	$0.37	$0.44
Net interest margin (%)	1.97%	2.03%	2.04%
Net interest rate spread (%)	1.72%	1.76%	1.80%
Efficiency ratio (%)	59.71%	56.60%	52.31%
ROAA (%)	1.00%	0.93%	1.05%
ROAE (%)	13.36%	11.86%	13.84%

Year-over-year comparison for the quarter

Metric	Q2 2024	Q2 2025
Interest income ($USD Thousands)	$25,593	$29,418
Interest expense ($USD Thousands)	$13,205	$15,350
Net interest income ($USD Thousands)	$12,388	$14,068
Provision for credit losses ($USD Thousands)	$170	$478
Noninterest income ($USD Thousands)	$3,478	$3,875
Noninterest expense ($USD Thousands)	$9,326	$9,386
Income before taxes ($USD Thousands)	$6,370	$8,079
Tax provision ($USD Thousands)	$663	$589
Net income ($USD Thousands)	$5,707	$7,490
EPS ($USD)	$0.34	$0.44
Net interest margin (%)	1.94%	2.04%
Efficiency ratio (%)	58.78%	52.31%

KPIs and Credit Quality

Metric	Q4 2024	Q1 2025	Q2 2025
Total assets ($USD Millions)	$2,825.8	$2,874.6	$2,965.8
Net loans ($USD Millions)	$1,480.2	$1,481.4	$1,531.2
AFS securities ($USD Millions)	$350.0	$364.5	$374.5
HTM securities ($USD Millions)	$690.4	$701.9	$770.9
Total deposits ($USD Millions)	$2,389.2	$2,485.9	$2,467.3
Noninterest-bearing deposits ($USD Millions)	$125.4	$132.9	$112.5
Interest-bearing deposits ($USD Millions)	$2,263.8	$2,353.0	$2,354.8
Short-term borrowings ($USD Millions)	$115.3	$63.0	$194.1
Long-term borrowings ($USD Millions)	$34.2	$29.8	$7.0
Subordinated notes ($USD Millions)	$49.7	$49.7	$49.8
Shareholders’ equity ($USD Millions)	$206.0	$216.3	$218.4
NPLs ($USD Millions)	$3.7	$3.6	$4.1
NPLs / net loans (%)	0.25%	0.25%	0.26%
ACL / loans (%)	1.28%	1.32%	1.30%
ACL / NPLs (%)	516.20%	542.39%	497.93%
Substandard + special mention ($USD Millions)	$48.6	$59.0	$54.2

Loan growth contributions (6 months ended Dec 31, 2024)

Category	Growth ($USD Millions)
Commercial real estate loans	$46.4
Home equity loans	$2.6
Commercial loans	$1.6
Residential real estate loans	$1.4

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share (quarterly)	Q2 FY2025	$0.09	$0.09	Maintained
MHC dividend waiver	Through Sep 30, 2025	Waiver in prior quarters; Fed non-objection pending	Waiver confirmed up to $0.48/share over four quarters ending Sep, 2025	Maintained/extended

Note: No quantitative revenue/margin/OpEx/Tax guidance provided in press materials; management referenced continued monitoring of Fed policy and deposit pricing strategy rather than formal guidance .

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 FY2025; themes below reflect management commentary from press releases.

Topic	Previous Mentions (Q4 FY2024 & Q1 FY2025)	Current Period (Q2 FY2025)	Trend
Net interest margin management	Q4: Margin pressure from higher deposit costs; tactical deposit rate setting; tax-equivalent NIM 2.24% . Q1: NIM 2.03%; assets repriced faster than deposits; tax-equivalent NIM 2.29% .	NIM 2.04%; spread +10 bps YoY; tax-equivalent NIM 2.31%; deposit rates reduced in line with Fed cuts .	Improving
Deposit mix/competition	Q4: Core deposits stable excluding brokered; noninterest-bearing down YoY . Q1: Deposits +$96.7M QoQ; NOW and CDs up; MM/savings down .	Deposits +$78.0M vs Jun; NOW and CDs up; noninterest-bearing down; MM down .	Mix shifting to interest-bearing
Securities portfolio deployment	Q4: $329.6M annual purchases; mix toward municipals, Treasuries, MBS . Q1: $115.2M quarterly purchases; continued municipals/Treasuries .	$274.2M purchases in 6 months; $167.9M municipals; $72.4M MBS; $24.7M Treasuries .	Active deployment
Credit quality/watchlist	Q4: NPLs $3.7M; ACL/loans 1.28%; one commercial charge-off fully reserved . Q1: Substandard/special mention $59.0M; mostly performing .	Substandard/special mention $54.2M (mostly performing); NPLs $4.1M; ACL/loans 1.30% .	Stable with modest uptick
Tax rate drivers	Q4: Effective tax rate down on historic preservation credits and tax-exempt mix . Q1: Effective tax rate 6.4% (vs 13% prior year) on tax-advantaged income .	Effective tax rate 7.3% (vs 10.4% prior year) on higher tax-exempt mix and solar credits .	Sustained lower effective rate

Management Commentary

“I am pleased to report another excellent quarter of financial performance. Net income was $7.5 million… an increase of $1.8 million, or 31.2% as compared to… 2023. Second fiscal quarter results reflect solid performance across our key segments.” — Donald Gibson, President & CEO .
Balance-sheet strategy: “The Company strategically managed their balance sheet by focusing on higher-yielding loans and securities, and lowering deposit rates to align with the Federal Reserve’s recent interest rate cuts. This resulted in a higher net interest margin…” .
Ongoing stance: “The Company will continue to monitor the Federal Reserve and interest rates paid on deposits, while maintaining our long-term customer relationships.” .

Q&A Highlights

No Q2 FY2025 earnings call transcript was available; no Q&A content to report [ListDocuments returned 0 for earnings-call-transcript].

Estimates Context

S&P Global consensus for Q2 FY2025 EPS and revenue was unavailable at time of retrieval due to SPGI daily limit; therefore, beat/miss vs Street cannot be assessed for this quarter. Values could not be retrieved from S&P Global.
Investors should rely on reported results and underlying trends (NIM, efficiency, credit quality) pending updated consensus coverage.

Key Takeaways for Investors

Margin stabilization is material: NIM improved to 2.04% and spread to 1.80%; coupled with efficiency gains to 52.3%, this drove EPS to $0.44 and net income to $7.49M (+31% YoY) .
Active securities deployment and asset repricing underpin earnings momentum (tax-equivalent NIM 2.31%), with deposits repriced lower in line with Fed shifts—an important lever if rate cuts continue .
Credit remains sound albeit watchlist loans elevated: NPLs at 0.26% of net loans and ACL/loans at 1.30% provide coverage; monitor the substandard/special mention bucket and any migration from performing status .
Funding mix/watch: Noninterest-bearing balances declined while CDs and NOW rose; continued discipline on deposit pricing will be pivotal for sustaining margin gains .
Dividend maintained with MHC waiver through Sep 2025—supports capital while delivering a modest payout; no formal financial guidance provided .
Near-term trading: Positive catalyst from margin/efficiency improvement and record assets; watch for further rate developments and deposit competition; lack of Street consensus could reduce headline beat/miss volatility.
Medium-term: Earnings trajectory hinges on credit stability, deposit costs, and continued asset deployment into tax-advantaged/high-yield instruments; balance-sheet growth suggests scalable operating leverage if funding costs are contained .

GREENE COUNTY BANCORP INC (GCBC)·Q2 2025 Earnings Summary