MIDDLETOWN, N.Y.--(BUSINESS WIRE)-- Greater Hudson Bank, N.A. (the “Bank”) (OTCQB: GHDS), with assets of $282.7 million, today reported net income for the three months ended March 31, 2011 of $438,000 or $0.04 per common share, compared to $159,000 or $0.02 per common share for the three months ended March 31, 2010, an increase of $279,000 or 175.8 percent. Return on average common stockholders’ equity was 5.30 percent for the first quarter of 2011. The increase in earnings was achieved despite the fact that the Bank incurred a provision for income taxes of $281,000 in the first quarter of 2011, while the Bank had no provision for income taxes in the first quarter of 2010 due to the reversal of a portion of the valuation allowance related to deferred tax assets from net operating losses from previous years in 2010.

“We are pleased to report that the Bank has continued to show growth and a positive return for our shareholders in the first quarter of the year,” commented Kenneth J. Torsoe, chairman of the board of directors of Greater Hudson Bank. “The Bank’s customers and the local communities have demonstrated a continued trust and confidence in the Bank, which have been invaluable and gratifying reasons for the Bank’s sustained success and profitability,” explained Mr. Torsoe.

Financial highlights as of and for the three months ended March 31, 2011 compared to the March 31, 2010 period are as follows:

• Total assets increased $62.3 million, or 28.2 percent, to $282.7 million.
• Net loans increased $28.3 million, or 26.8 percent, to $134.2 million.
• Investments increased $26.4 million, or 28.8 percent, to $118.2 million.
• Deposits increased $54.7 million, or 29.5 percent, to $240.1 million.
• Net interest income increased $0.7 million, or 39.2 percent, to $2.3 million.
• Provision for loan losses decreased $63,000, or 29.0 percent, to $154,000.
• Non-interest expense increased $174,000, or 13.2 percent, to $1.5 million.

Eric J. Wiggins, president and CEO of Greater Hudson Bank commented, “Our loan portfolio grew substantially from the first quarter of 2010 to the first quarter of 2011 as we continue to provide credit in our local markets. Net interest income, our primary source of income, also grew significantly as we continued to increase our earning assets and saw improvements in our cost of funds. Our balance sheet remains solid with a high a level of liquidity, sound asset quality and very strong capital ratios. While the economic recovery has been slower than we had hoped, Greater Hudson continues to be well positioned to meet the needs of local businesses and consumers now and as conditions improve.”

Net interest income increased $0.7 million, or 39.2 percent to $2.3 million for the first quarter of 2011 compared to the first quarter of 2010. The increase was achieved primarily due to an increase in the Bank’s net interest margin of five basis points to 3.73 percent as well as an increase in average earning assets of $67.4 million to $247.8 million at March 31, 2011 compared to March 31, 2010. Net interest income was partially offset by the increase in average interest bearing liabilities of $64.1 million to $216.6 million at March 31, 2011 compared to March 31, 2010.

The provision for credit losses decreased $63,000 for the 2011 first quarter compared to the 2010 first quarter due to the overall improvement in the credit quality of the loan portfolio as nonperforming loans decreased. The decrease in the provision was partially offset by the increase in net loans outstanding since March 31, 2010.

Non-interest expense increased $174,000 for the first quarter of 2011 compared to the prior year period. The increase was driven by an overall increase in operations as a result of the Bank’s growth, which was partially offset by a decrease in expenses related to maintaining the Bank’s other real estate owned.

Provision for income taxes increased $281,000 as a result of the change in the Bank’s tax position and effective tax rate of approximately 39.1 percent compared to no provision for income taxes for the three months ended March 31, 2010 as a result of the reversal of a portion of the valuation allowance related to deferred tax assets from net operating losses from previous years.

The Bank increased loans, net of unearned income and the investment portfolio $28.4 million and $26.4 million, respectively, in the 2011 first quarter compared to the prior year period. The increases in both the loan and investment portfolios were funded by the $54.7 million, or 29.5 percent increase in deposits to $240.1 million at March 31, 2011 compared to March 31, 2010.

Nonperforming assets continue to decrease over the past year from $1.3 million in March of 2010 to $0.8 million in March of 2011. As a result, the Bank’s nonperforming assets to total assets ratio has decreased from 0.58 percent to 0.30 percent over the past year.

At March 31, 2011, the Bank had $33.1 million in stockholders' equity. As of March 31, 2011, the Bank's leverage ratio was 12.00 percent and Tier I risk based capital and total risk based capital ratios were 16.7 percent and 17.8 percent, respectively. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal regulatory requirements.

Greater Hudson Bank’s annual Stockholder’s Meeting will be held Thursday, May 26, 2011 at 10:00 a.m. at the Salvation Army Conference Center in West Nyack, NY. All shareholders and interested parties are invited to attend.

Greater Hudson Bank, N.A founded in 2002, is headquartered in Middletown, New York and was the first community bank chartered in Orange County, New York in over fifty years. The Bank has 4 branches which are located in Middletown and Warwick, 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:

Elser & Aucone
Jon Lieb, 212-867-3300

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