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Gouverneur Bancorp Inc Reports Operating Results (10-Q)

August 03, 2010 | About:
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10qk

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Gouverneur Bancorp Inc (GOV) filed Quarterly Report for the period ended 2010-06-30.

Gouverneur Bancorp Inc has a market cap of $885.8 million; its shares were traded at around $28.34 with a P/E ratio of 13.1 and P/S ratio of 11.2. The dividend yield of Gouverneur Bancorp Inc stocks is 5.8%.

Highlight of Business Operations:

As of June 30, 2010, we own 41 properties, located in 20 states and the District of Columbia, that contain approximately 4.9 million rentable square feet, of which 96.1% is leased to the U.S. Government and five state governments. The U.S. Government and five state governments are responsible for 94.6% and 95.9% of our rental income as of June 30, 2010 and 2009, respectively.

As of June 30, 2010, 99.7% of our rentable square feet was leased, compared to 99.3% leased as of June 30, 2009. Occupancy data as of June 30, 2010 and 2009 is as follows (square feet in thousands):

(1) The year of lease expiration is pursuant to current contract terms. Some government tenants have the right to vacate their space before the stated expirations of their leases. As of June 30, 2010, U.S. Government tenants occupying approximately 12.9% of our rentable square feet, representing approximately 10.5% of our rental income as of June 30, 2010, have exercisable rights to terminate their leases before the stated expirations. Also in 2010, 2011, 2012, 2014, 2016 and 2019, early termination rights become exercisable by other U.S. Government tenants who occupy approximately 5.2%, 2.0%, 2.6%, 2.9%, 3.6% and 1.7%, respectively, of our rentable square feet and are responsible for approximately 4.3%, 3.3%, 2.2%, 3.3%, 4.1% and 3.2%, respectively, of our rental income as of June 30, 2010. In addition, three of our state government tenants have exercisable rights to terminate their leases if these states do not appropriate rent amounts in their respective budgets. These three tenants occupy approximately 5.3% of our rentable square feet, representing approximately 6.4% of our rental income as of June 30, 2010. No termination rights have been exercised by our tenants during the past three years.

In April 2010, we acquired two office properties for an aggregate purchase price of $31,000, excluding acquisition costs. One of our April acquisitions was an office property located in Burlington, VT with 26,609 rentable square feet. This property is 100% leased to the U.S. Government and occupied by the Office of Security and Integrity. The purchase price was $9,700, excluding acquisition costs. Our second April acquisition is an office property located in Detroit, MI with 55,966 rentable square feet. This property is 100% leased to the U.S. Government and occupied by the U.S. Citizenship and Immigration Service. The purchase price was $21,300, excluding acquisition costs.

In July 2010, we entered into two purchase and sale agreements for an aggregate purchase price of $64,500, excluding acquisition costs. The first of these properties is an office property located in Trenton, NJ with 266,995 rentable square feet. This property is 96% leased to 15 tenants. The State of New Jersey leases 65% of the property and the space is occupied by the New Jersey Department of the Treasury. The U.S. Government also leases 10% of this property and the space is occupied by the Department of Justice and the Internal Revenue Service. The purchase price is $45,000, excluding acquisition costs. This pending acquisition is subject to our satisfactory completion of diligence and other customary conditions; accordingly, we can provide no assurance that we will acquire this property.

We have a $250,000 secured revolving credit facility that is available for acquisitions, working capital and general business purposes. In February 2010, our property in Buffalo, NY was released as collateral for our facility. As a result of this release, as of June 30, 2010, the facility is secured by 28 of our properties. In March 2010, we amended our secured revolving credit facility to eliminate a provision in the definition of LIBOR Rate that established a LIBOR Floor of 2.0% per annum. After the elimination of the LIBOR Floor, interest under our secured revolving credit facility is generally set at LIBOR plus a spread which varies depending on the amount of our debt leverage. The weighted average annual interest rate for our secured revolving credit facility was 3.76% and 4.75% for the three and six months ended June 30, 2010, respectively. As of June 30, 2010, we had $82,000 drawn and $168,000 available to be drawn under our secured revolving credit facility. The maturity of our secured revolving credit facility is April 24, 2012. Subject to meeting certain conditions and upon payment of a fee, we may extend the maturity date of our secured revolving credit facility by one year.

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