Elmira Savings Bank Reports Third Quarter Earnings

ELMIRA, N.Y., Oct. 19, 2017 (GLOBE NEWSWIRE) — Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $1,215,000 and $3,402,000 for the three and nine months ended September 30, 2017 compared to $1,202,000 and $3,295,000 for the same periods in 2016.
  • Diluted earnings per share were $.30 per share and $.88 per share for the three and nine months ended September 30, 2017 compared to $.36 per share and $.96 per share for the same periods in 2016.
  • Return on average assets was .84% and .80% for the three and nine months ended September 30, 2017 compared to .84% and .78% for the same periods in 2016.
  • Return on average equity was 7.32% and 7.34% for the three and nine months ended September 30, 2017 compared to 8.54% and 7.89% for the same periods in 2016.

“We are pleased with the year-over-year improvement in earnings, highlighted by an increase in our net interest margin which has risen by 11 basis points year-to-year to 3.31% through 2017,” said Thomas M. Carr, President and CEO.

Net Income

Net income totaled $3,402,000 for the nine months ended September 30, 2017, an increase of $107,000 or 3% from the $3,295,000 of net income recorded for the same period in 2016.  This increase was the net result of a decrease in noninterest expense of $345,000 and an increase in net interest income of $41,000, offset by a decrease in noninterest income of $266,000, an increase in the provision for loan losses of $3,000, and an increase in tax expense of $10,000.

Net income totaled $1,215,000 for the three months ended September 30, 2017, an increase of $13,000 or 1% from the $1,202,000 recorded for the same period in 2016.  This increase was the net result of a decrease in noninterest expense of $216,000 and a decrease in tax expense of $84,000, offset by a decrease in noninterest income of $90,000, a decrease in net interest income of $164,000, and an increase in the provision for loan losses of $33,000.

Basic and diluted earnings per share for the nine months ended September 30, 2017 were $.89 per share and $.88 per share compared to $.96 per share for both for the same period in 2016.  Basic and diluted earnings per share for the three months ended September 30, 2017 were both $.30 per share compared to $.36 per share for both for the same period in 2016.

Net Interest Margin

The net interest margin for the nine months ended September 30, 2017 was 3.31% compared to 3.20% for the same period in 2016.  The yield on average earning assets was 4.12% for the nine months ended September 30, 2017 compared to 4.06% for the same period in 2016.  The average cost of interest-bearing liabilities was .94% for the nine months ended September 30, 2017 compared to 1.01% for the same period in 2016.

The net interest margin for the three months ended September 30, 2017 was 3.27% compared to 3.24% for the same period in 2016.  The average yield on earning assets was 4.09% for the three months ended September 30, 2017 compared to 4.04% for the same period in 2016.  The average cost of interest-bearing liabilities was 0.96% for both the three months ended September 30, 2017 and 2016.

Assets

Total assets decreased $8.4 million or 1.5% to $565.0 million at September 30, 2017 compared to $573.5 million at December 31, 2016.  Loans, including loans held for sale, decreased 2.1% to $449.8 million at September 30, 2017 compared to December 31, 2016.  The available-for-sale investment portfolio decreased $6.4 million from December 31, 2016 to September 30, 2017.

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to 0.84% at September 30, 2017 from 1.11% at December 31, 2016.  Net loan charge-offs to average loans for the nine months ended September 30, 2017 of 0.03% decreased from 0.04% for the nine months ended September 30, 2016.  The allowance for loan losses was 0.98% of total loans at September 30, 2017 and 0.94% of total loans at December 31, 2016.

Liabilities

Deposits total $454.8 million at September 30, 2017, a decrease of $14.7 million or 3.1%.  The $14.7 million decrease consists of a $15.7 million decrease in time deposits, a $3.7 million decrease in money market accounts, and a $2.4 million decrease in savings accounts, partially offset by a $1.8 million increase in interest bearing transaction accounts and a $5.3 million increase in noninterest bearing accounts.  Borrowed funds decreased by $5.0 million or 11.9%.

Shareholders’ Equity

Shareholders’ equity increased $9.9 million to $65.6 million at September 30, 2017 compared to December 31, 2016.  The increase in shareholders’ equity includes the impact of the gross $9.5 million received from the private placement of 548,430 common shares in April 2017.  The current level of shareholders’ equity equates to a book value per share of $16.84 at September 30, 2017, compared to $16.74 at December 31, 2016.  Dividends paid to common shareholders were $0.23 and $0.70 for the three and nine months ended September 30, 2017 and were $0.23 and $0.69 for the three and nine months ended September 30, 2016.

Elmira Savings Bank, with $565.0 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a state-chartered bank with six offices in Chemung County, NY; three offices in Tompkins County, NY; two offices in Steuben County, NY; one office in Cayuga County, NY; one office in Schuyler County, NY; and a loan center in Broome County, NY.

Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that involve the risks and uncertainties, including the timely availability and acceptance of Bank products, the impact of competitive products and pricing, the management of growth, and other risks detailed from time to time in the Bank’s regulatory reports.

             
ELMIRA SAVINGS BANK
CONSOLIDATED BALANCE SHEET
(unaudited)
                 
(in thousands, except for share and per share data)   September 30,   December 31,    
          2017       2016     % Change
ASSETS                
                 
Cash and due from banks     $ 28,253     $ 24,195     16.8 %
Federal funds sold and other short-term investments     97       99     -2.0 %
Total cash and cash equivalents       28,350       24,294     16.7 %
                 
Securities available for sale, at fair value     26,182       32,581     -19.6 %
Securities held to maturity – fair value $8,306            
at September 30, 2017 and $8,679 at December 31, 2016   8,160       8,519     -4.2 %
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost   10,169       9,811     3.6 %
                 
Loans held for sale       1,909       3,597     -46.9 %
                 
Loans receivable         447,933       455,931     -1.8 %
Less: Allowance for loan losses       4,390       4,263     3.0 %
Net loans         443,543       451,668     -1.8 %
                 
Premises and equipment, net       16,486       12,634     30.5 %
Bank-owned life insurance       13,888       13,592     2.2 %
Accrued interest receivable       1,074       1,552     -30.8 %
Intangible assets, net       4       20     -80.0 %
Goodwill         12,320       12,320     0.0 %
Other assets         2,957       2,862     3.3 %
Total assets       $ 565,042     $ 573,450     -1.5 %
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY            
                 
Deposits       $ 454,826     $ 469,547     -3.1 %
Borrowings         37,000       42,000     -11.9 %
Other liabilities         7,626       6,180     23.4 %
Total liabilities         499,452       517,727     -3.5 %
                 
Shareholders’ equity:              
Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares          
authorized; 10,000 shares issued at September 30, 2017 and at December 31, 2016   9,700       9,700     0.0 %
Common stock, $1 par value; authorized 5,000,000 shares; 3,408,875 shares          
issued at September 30, 2017 and 2,844,670 shares issued at December 31, 2016   3,409       2,845     19.8 %
Additional paid-in capital       50,185       41,644     20.5 %
Retained earnings       4,976       4,407     12.9 %
Treasury stock, at cost – 93,883 shares at September 30, 2017          
and 98,118 shares at December 31, 2016     (2,802 )     (2,907 )   -3.6 %
Accumulated other comprehensive income     70       (19 )   -468.4 %
Total Elmira Savings Bank shareholders’ equity     65,538       55,670     17.7 %
Noncontrolling interest       52       53     -1.9 %
Total shareholders’ equity       65,590       55,723     17.7 %
Total liabilities and shareholders’ equity   $ 565,042     $ 573,450     -1.5 %
                 

ELMIRA SAVINGS BANK
CONSOLIDATED  STATEMENT OF INCOME 
(unaudited)
                         
    Three Months Ended   Nine Months Ended 
    September 30,   September 30,
(in thousands, except for per share data)     2017     2016   % Change     2017     2016   % Change
                         
Interest and dividend income:                        
Interest and fees on loans   $ 4,695   $ 4,832   -2.8 %   $ 14,219   $ 14,305   -0.6 %
Interest and dividends on securities                        
Taxable     240     231   3.9 %     712     758   -6.1 %
Non-taxable     136     203   -33.0 %     481     627   -23.3 %
Total interest and dividend income     5,071     5,266   -3.7 %     15,412     15,690   -1.8 %
                         
Interest expense:                        
Interest on deposits     757     785   -3.6 %     2,207     2,282   -3.3 %
Interest on borrowings     267     270   -1.1 %     799     1,043   -23.4 %
Total interest expense     1,024     1,055   -2.9 %     3,006     3,325   -9.6 %
Net interest income     4,047     4,211   -3.9 %     12,406     12,365   0.3 %
Provision for loan losses     120     87   37.9 %     315     312   1.0 %
Net interest income after provision for loan losses     3,927     4,124   -4.8 %     12,091     12,053   0.3 %
                         
Noninterest income:                        
Service fees     393     387   1.6 %     1,133     1,089   4.0 %
Gain on sale of loans held for sale     906     1,019   -11.1 %     2,175     2,290   -5.0 %
Gain on sale of securities                     180   -100.0 %
Other service fees     192     190   1.1 %     554     556   -0.4 %
Earnings on bank-owned life insurance     106     99   7.1 %     297     304   -2.3 %
Other     29     21   38.1 %     80     86   -7.0 %
Total noninterest income     1,626     1,716   -5.2 %     4,239     4,505   -5.9 %
                         
Noninterest expense:                        
Salaries and benefits     2,080     2,087   -0.3 %     5,941     5,983   -0.7 %
Net occupancy     351     353   -0.6 %     1,123     1,075   4.5 %
Equipment     317     310   2.3 %     935     886   5.5 %
Marketing and public relations     186     186   0.0 %     593     579   2.4 %
Professional fees     156     148   5.4 %     508     522   -2.7 %
Other     670     892   -24.9 %     2,269     2,669   -15.0 %
Total noninterest expense     3,760     3,976   -5.4 %     11,369     11,714   -2.9 %
Income before income taxes     1,793     1,864   -3.8 %     4,961     4,844   2.4 %
Income taxes     578     662   -12.7 %     1,559     1,549   0.6 %
Net income     1,215     1,202   1.1 %     3,402     3,295   3.2 %
Less: Net income attributable to noncontrolling interest                        
                         
Net income attributable to Elmira Savings Bank     1,215     1,202   1.1 %     3,402     3,295   3.2 %
                         
Dividend on preferred stock     225     225   0.0 %     675     675   0.0 %
Income available to common shareholders   $ 990   $ 977   1.3 %   $ 2,727   $ 2,620   4.1 %
                         
                         
Basic earnings per share   $ 0.30   $ 0.36   -16.7 %   $ 0.89   $ 0.96   -7.3 %
                         
Diluted earnings per share   $ 0.30   $ 0.36   -16.7 %   $ 0.88   $ 0.96   -8.3 %
                         
Weighted average shares outstanding – basic     3,298,023     2,724,160   21.1 %     3,065,817     2,719,216   12.7 %
                         
Weighted average shares outstanding – diluted     3,311,904     2,740,734   20.8 %     3,081,839     2,736,262   12.6 %
                         
Dividends per share   $ 0.23   $ 0.23   0.0 %   $ 0.70   $ 0.69   1.4 %
                         

ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                           
(Dollars in Thousands) For the Three Months Ended  
  September 30, 2017     September 30, 2016  
ASSETS: Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans $ 446,853   $ 4,695   4.17 % $ 464,996   $ 4,832   4.13 %
Short-term investments   414     1   1.52       483       0.20  
Securities   45,092     375   3.31       52,542     434   3.30  
Total interest-earning assets   492,359     5,071   4.09       518,021     5,266   4.04  
                           
Noninterest-earning assets   79,619               53,323          
                           
TOTAL ASSETS $ 571,978             $ 571,344          
                           
LIABILITIES AND SHAREHOLDERS’ EQUITY                          
Interest-bearing deposits $ 381,146   $ 757   0.79     $ 394,097   $ 785   0.79  
Borrowings   41,130     267   2.54       42,249     270   2.50  
Total interest-bearing liabilities   422,276     1,024   0.96       436,346     1,055   0.96  
                           
Noninterest-bearing liabilities   83,854               79,033          
Shareholders’ equity   65,848               55,965          
                           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 571,978             $ 571,344          
Interest rate spread         3.13 %           3.08 %
Net interest income/margin     $ 4,047   3.27 %       $ 4,211   3.24 %
                           

ELMIRA SAVINGS BANK      
AVERAGE BALANCES AND INTEREST RATES      
                               
(Dollars in Thousands) For the Nine Months Ended      
  September 30, 2017     September 30, 2016      
ASSETS: Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate      
Loans $   450,234   $   14,219     4.20 % $   458,862   $   14,305     4.15 %  
Short-term investments     894       5     0.69         518       1     0.19      
Securities     47,284       1,188     3.35         55,116       1,384     3.35      
Total interest-earning assets     498,412       15,412     4.12         514,496       15,690     4.06      
                               
Noninterest-earning assets     68,250                 51,701              
                               
TOTAL ASSETS $   566,662             $   566,197              
                               
LIABILITIES AND SHAREHOLDERS’ EQUITY                              
Interest-bearing deposits $   382,608   $   2,207     0.77     $   384,271   $   2,282     0.79      
Borrowings     41,775       799     2.52         51,068       1,043     2.68      
Total interest-bearing liabilities     424,383       3,006     0.94         435,339       3,325     1.01      
                               
Noninterest-bearing liabilities     80,315                 75,195              
Shareholders’ equity     61,964                 55,663              
                               
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $   566,662             $   566,197              
Interest rate spread           3.18 %             3.05 %    
Net interest income/margin     $   12,406     3.31 %       $   12,365     3.20 %    
                               

      Quarter Ended
                             
(Dollars in Thousands, Except Per Share Data)   9/30/2017     6/30/2017     3/31/2017     12/31/2016     9/30/2016
                             
Operating Data                            
                               
  Net income $ 1,215   $ 1,108   $ 1,079   $ 1,042   $ 1,202
  Net interest income   4,047     4,186     4,173     4,155     4,211
  Provision for loan losses   120     155     40     175     87
  Net security gains                  
  Non-interest income, ex. Net security gains   1,626     1,352     1,261     1,395     1,716
  Non-interest expense   3,760     3,781     3,828     3,888     3,976
                             
Performance Statistics                            
                               
  Net interest margin   3.27%     3.36%     3.32%     3.23%     3.24%
  Annualized return on average assets   0.84%     0.79%     0.78%     0.73%     0.84%
  Annualized return on average equity   7.32%     7.01%     7.74%     7.38%     8.54%
  Annualized net loan charge-offs to avg loans   0.03%     0.13%     0.01%     0.20%     0.05%
  Net charge-offs (recoveries)   28     144     16     231     53
  Efficiency ratio   66.3%     68.3%     70.4%     70.1%     67.1%
                             
Per Share Data                            
                               
  Basic earnings per share $ 0.30   $ 0.28   $ 0.31   $ 0.30   $ 0.36
  Diluted earnings per share   0.30     0.28     0.31     0.30     0.36
  Dividend declared per share   0.23     0.23     0.23     0.23     0.23
  Book value   16.84     16.77     16.82     16.74     16.80
  Common stock price:                            
    High   21.10     21.75     21.75     22.25     21.50
    Low   19.80     19.65     20.28     18.50     18.85
    Close   20.10     20.30     21.60     20.45     19.91
  Weighted average common shares:                            
    Basic   3,298     3,154     2,739     2,731     2,724
    Fully diluted   3,312     3,170     2,757     2,750     2,741
  End-of-period common shares:                            
    Issued   3,409     3,405     2,850     2,845     2,839
    Treasury   94     94     94     98     98
                                 
                                 
Financial Condition Data:                            
General                            
  Total assets $ 565,042   $ 574,332   $ 556,644   $ 573,450   $ 567,450
  Loans, net   443,543     448,024     446,223     451,668     455,251
  Intangibles   12,324     12,329     12,334     12,340     12,349
  Total deposits   454,826     460,140     450,376     469,547     463,414
                                 
    Noninterest-bearing   75,625     77,027     71,870     70,330     72,102
                                 
    Savings   68,253     70,668     70,300     70,621     69,019
    NOW   87,612     86,896     86,633     85,822     86,787
    Money Market   25,184     24,859     27,697     28,889     25,715
    Time deposits   198,152     200,690     193,876     213,885     209,791
    Total interest-bearing deposits   379,201     383,113     378,506     399,217     391,312
                               
  Shareholders’ equity   65,590     65,280     56,103     55,723     55,792
                             
Asset Quality                            
                               
  Non-performing assets $ 3,793   $ 3,494   $ 4,234   $ 5,289   $ 5,345
  Non-performing assets to total assets   0.67%     0.61%     0.76%     0.92%     0.94%
  Allowance for loan losses   4,390     4,298     4,287     4,263     4,319
  Allowance for loan losses to total loans   0.98%     0.95%     0.95%     0.94%     0.94%
  Allowance for loan losses to                            
    non-performing loans   118.46%     129.15%     105.93%     84.80%     85.00%
  Non-performing loans to total loans   0.84%     0.74%     0.91%     1.11%     1.12%
                             
Capitalization                            
                               
  Shareholders’ equity to total assets   11.61%     11.37%     10.08%     9.72%     9.83%
                               

For further information contact:
Thomas M. Carr, President & CEO
Elmira Savings Bank
333 East Water Street
Elmira, New York  14901
(607) 735-8660
tcarr@elmirasavingsbank.com