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CST: 19/09/2019 00:08:53   

Elmira Savings Bank Reports 2018 Earnings

238 Days ago

ELMIRA, N.Y., Jan. 23, 2019 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $935,000 and $4,239,000 for the three and twelve months ended December 31, 2018 compared to $1,449,000 and $4,851,000 for the same periods in 2017.
  • Diluted earnings per share were $.27 per share and $1.22 per share for the three and twelve months ended December 31, 2018 compared to $.37 per share and $1.22 per share for the same periods in 2017. 
  • Return on average assets was .65% and .75% for the three and twelve months ended December 31, 2018 compared to 1.03% and .86% for the same periods in 2017.
  • Return on average equity was 6.39% and 7.36% for the three and twelve months ended December 31, 2018 compared to 9.04% and 7.78% for the same periods in 2017.

“We are pleased with the solid growth in loans and deposits in 2018,” said Thomas M. Carr, President and CEO. He continued, “Growing the balance sheet while maintaining our net interest margin has been a key focus of the bank in 2018.  Our earnings per share has remained at $1.22 per share in 2018 despite lower earnings due to our capital restructuring in 2017.”
  
Net Income

Net income totaled $4,239,000 for the twelve months ended December 31, 2018, a decrease of $612,000 or 13% from the $4,851,000 of net income recorded for the same period in 2017.  This decrease was the net result of an increase in income tax expense of $638,000 and a decrease in noninterest income of $919,000, offset by an increase in net interest income of $22,000, a decrease in the provision for loan losses of $528,000, and a decrease in noninterest expense of $395,000.

Net income totaled $935,000 for the three months ended December 31, 2018, a decrease of $514,000 or 36% from the $1,449,000 recorded for the same period in 2017.  This decrease was the net result of an increase in income tax expense of $1.4 million and a decrease in noninterest income of $74,000, offset by a decrease in noninterest expense of $477,000, an increase in net interest income of $83,000, and a decrease in the provision for loan losses of $430,000.

The enactment of the Tax Cuts and Jobs Act (“the Act”) on December 22, 2017 reduced the federal corporate tax rate starting in 2018 from 34% to 21%.  As a result of the enactment of the Act, the Bank was required under Generally Accepted Accounting Principles (“GAAP”) to adjust its net deferred tax liability in 2017 for the tax rate change.  This adjustment resulted in a $1.2 million reduction in income tax expense for both the three and twelve months ended December 31, 2017.

Basic and diluted earnings per share for the twelve months ended both December 31, 2018 and December 31, 2017 were $1.22 and $1.21 per share.  Basic and diluted earnings per share for the three months ended December 31, 2018 were both $.27 per share compared to $.37 per share for both for the same period in 2017.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2018 was 3.31% compared to 3.32% for the same period in 2017.  The yield on average earning assets was 4.20% for the twelve months ended December 31, 2018 compared to 4.12% for the same period in 2017.  The average cost of interest-bearing liabilities was 1.06% for the twelve months ended December 31, 2018 compared to .94% for the same period in 2017.

The net interest margin for the three months ended December 31, 2018 was 3.26% compared to 3.31% for the same period in 2017.  The average yield on earning assets was 4.25% for the three months ended December 31, 2018 compared to 4.10% for the same period in 2017.  The average cost of interest-bearing liabilities was 1.17% for the three months ended December 31, 2018 and 0.95% for the same period in 2017.

Assets

Total assets increased $35.5 million or 6.4% to $590.0 million at December 31, 2018 compared to $554.6 million at December 31, 2017.  Cash and cash equivalents increased by $11.6 million or 147% to $19.5 million at December 31, 2018 compared to $7.9 million at December 31, 2017.  Loans, including loans held for sale, increased 5.0% to $483.7 million at December 31, 2018 compared to December 31, 2017.  The available-for-sale investment portfolio increased $995,000 from December 31, 2017 to December 31, 2018.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 0.94% at December 31, 2018 from 0.64% at December 31, 2017.  Net loan charge-offs to average loans for the twelve months ended December 31, 2018 of 0.10% decreased from 0.16% for the twelve months ended December 31, 2017.  The allowance for loan losses was 0.91% of total loans at December 31, 2018 and 0.97% of total loans at December 31, 2017.

Liabilities

Deposits total $491.5 million at December 31, 2018, an increase of $34.8 million or 7.6%.  The $34.8 million increase consists of a $24.4 million increase in time deposits, a $7.6 million increase in noninterest bearing accounts, a $5.1 million increase in savings accounts, and a $2.9 million increase in interest bearing transaction accounts, partially offset by a $5.3 million decrease in money market accounts.  Borrowed funds decreased by $4.0 million or 11.4%.

Shareholders’ Equity

Shareholders’ equity increased $1.3 million to $57.9 million at December 31, 2018 compared to December 31, 2017.  The current level of shareholders’ equity equates to a book value per share of $16.52 at December 31, 2018, compared to $16.26 at December 31, 2017.  Dividends paid for common shareholders were $0.23 and $0.91 for the three and twelve months ended December 31, 2018 and $0.22 and $0.88 for the same periods 2017, after adjusting for the 5% stock dividend paid on June 15, 2018.  As a result of the repurchase of all outstanding preferred shares in December 2017, there were no dividends paid for preferred shares for the three or twelve months ended December 31, 2018 versus $170,000 and $845,000 paid in preferred dividends for the same periods in 2018.

Elmira Savings Bank, with $590.0 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; 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)   December 31,   December 31,    
          2018       2017     % Change
ASSETS                
                 
Cash and due from banks     $ 19,429     $ 7,800     149.1 %
Federal funds sold and other short-term investments     94       97     -3.1 %
Total cash and cash equivalents       19,523       7,897     147.2 %
                 
Securities available for sale, at fair value     25,051       24,056     4.1 %
Securities held to maturity - fair value $7,638            
at December 31, 2018 and $8,186 at December 31, 2017   7,518       8,039     -6.5 %
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost   9,462       10,221     -7.4 %
                 
Loans held for sale       1,392       1,999     -30.4 %
                 
Loans receivable         482,272       458,629     5.2 %
Less: Allowance for loan losses       4,372       4,442     -1.6 %
Net loans         477,900       454,187     5.2 %
                 
Premises and equipment, net       16,846       16,772     0.4 %
Bank-owned life insurance       14,444       13,982     3.3 %
Accrued interest receivable       1,566       1,497     4.6 %
Goodwill         12,320       12,320     0.0 %
Other assets         4,018       3,590     11.9 %
Total assets       $ 590,040     $ 554,560     6.4 %
                 
LIABILITIES AND SHAREHOLDERS' EQUITY            
                 
Deposits       $ 491,517     $ 456,762     7.6 %
Borrowings         31,000       35,000     -11.4 %
Other liabilities         9,574       6,117     56.5 %
Total liabilities         532,091       497,879     6.9 %
                 
Shareholders' equity:              
Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares        
authorized; 10,000 shares issued at December 31, 2018 and at December 31, 2017   9,700       9,700     0.0 %
Common stock, $1 par value; authorized 5,000,000 shares; 3,597,605 shares          
issued at December 31, 2018 and 3,410,622 shares issued at December 31, 2017   3,598       3,411     5.5 %
Additional paid-in capital       53,784       50,258     7.0 %
Retained earnings       3,176       5,493     -42.2 %
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares          
at December 31, 2018 and December 31, 2017     (12,202 )     (12,202 )   0.0 %
Accumulated other comprehensive loss     (158 )     (31 )   409.7 %
Total Elmira Savings Bank shareholders' equity     57,898       56,629     2.2 %
Noncontrolling interest       51       52     -1.9 %
Total shareholders' equity       57,949       56,681     2.2 %
Total liabilities and shareholders' equity   $ 590,040     $ 554,560     6.4 %
                 


ELMIRA SAVINGS BANK
CONSOLIDATED  STATEMENT OF INCOME
(unaudited)
                         
    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
(in thousands, except for per share data)     2018     2017     % Change     2018     2017   % Change
                         
Interest and dividend income:                        
Interest and fees on loans   $ 5,091   $ 4,752     7.1 %   $ 19,569   $ 18,971   3.2 %
Interest and dividends on securities                        
Taxable     295     253     16.6 %     1,037     965   7.5 %
Non-taxable     116     129     -10.1 %     472     610   -22.6 %
Total interest and dividend income     5,502     5,134     7.2 %     21,078     20,546   2.6 %
                         
Interest expense:                        
Interest on deposits     1,056     744     41.9 %     3,565     2,951   20.8 %
Interest on borrowings     221     248     -10.9 %     943     1,047   -9.9 %
Total interest expense     1,277     992     28.7 %     4,508     3,998   12.8 %
Net interest income     4,225     4,142     2.0 %     16,570     16,548   0.1 %
Provision for loan losses     150     580     -74.1 %     367     895   -59.0 %
Net interest income after provision for loan losses     4,075     3,562     14.4 %     16,203     15,653   3.5 %
                         
Noninterest income:                        
Service fees     371     352     5.4 %     1,456     1,485   -2.0 %
Gain on sale of loans held for sale     410     526     -22.1 %     1,588     2,701   -41.2 %
Other service fees     198     184     7.6 %     813     739   10.0 %
Earnings on bank-owned life insurance     95     94     1.1 %     384     390   -1.5 %
Other     50     42     19.0 %     277     122   127.0 %
Total noninterest income     1,124     1,198     -6.2 %     4,518     5,437   -16.9 %
                         
Noninterest expense:                        
Salaries and benefits     2,168     2,242     -3.3 %     8,088     8,183   -1.2 %
Net occupancy     400     376     6.4 %     1,596     1,499   6.5 %
Equipment     360     343     5.0 %     1,392     1,278   8.9 %
Marketing and public relations     90     291     -69.1 %     736     884   -16.7 %
Professional fees     141     212     -33.5 %     541     720   -24.9 %
Other     879     1,051     -16.4 %     3,136     3,320   -5.5 %
Total noninterest expense     4,038     4,515     -10.6 %     15,489     15,884   -2.5 %
Income before income taxes     1,161     245     373.9 %     5,232     5,206   0.5 %
Income taxes     221     (1,209 )   -118.3 %     988     350   182.3 %
Net income     940     1,454     -35.4 %     4,244     4,856   -12.6 %
Less: Net income attributable to noncontrolling interest     5     5     -       5     5   -  
                         
Net income attibutable to Elmira Savings Bank     935     1,449     -35.5 %     4,239     4,851   -12.6 %
                         
Dividend on preferred stock     -     170     -100.0 %     -     845   -100.0 %
Income available to common shareholders   $ 935   $ 1,279     -26.9 %   $ 4,239   $ 4,006   5.8 %
                         
                         
Basic earnings per share   $ 0.27   $ 0.37     -27.0 %   $ 1.22   $ 1.22   0.0 %
                         
Diluted earnings per share   $ 0.27   $ 0.37     -27.0 %   $ 1.21   $ 1.21   0.0 %
                         
Weighted average shares outstanding - basic     3,486,535     3,467,468     0.5 %     3,479,916     3,281,706   6.0 %
                         
Weighted average shares outstanding - diluted     3,499,475     3,481,925     0.5 %     3,494,218     3,297,938   6.0 %
                         
Dividends per share   $ 0.23   $ 0.22     4.5 %   $ 0.91   $ 0.88   3.4 %
                         
Share and per share data has been restated to reflect the 5% stock dividend paid on June 15, 2018.


ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                           
(Dollars in Thousands) For the Three Months Ended  
  December 31, 2018     December 31, 2017  
ASSETS: Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans $ 472,389   $ 5,091   4.28 %   $ 452,863   $ 4,752   4.17 %
Short-term investments   520     3   2.20       1,248     4   1.10  
Securities   41,536     408   3.91       43,565     378   3.46  
Total interest-earning assets   514,445     5,502   4.25       497,676     5,134   4.10  
                           
Noninterest-earning assets   57,902               60,203          
                           
TOTAL ASSETS $ 572,347             $ 557,879          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $ 400,138   $ 1,056   1.05     $ 377,628   $ 744   0.78  
Borrowings   31,095     221   2.79       35,615     248   2.72  
Total interest-bearing liabilities   431,233     1,277   1.17       413,243     992   0.95  
                           
Noninterest-bearing liabilities   83,083               81,024          
Shareholders' equity   58,031               63,612          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 572,347             $ 557,879          
Interest rate spread         3.08 %           3.15 %
Net interest income/margin     $ 4,225   3.26 %       $ 4,142   3.31 %
                           


ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                           
(Dollars in Thousands) For the Twelve Months Ended  
  December 31, 2018     December 31, 2017  
ASSETS: Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans $ 458,691   $ 19,569   4.25 %   $ 450,896   $ 18,971   4.20 %
Short-term investments   478     8   1.65       496     8   1.63  
Securities   40,693     1,501   3.68       46,347     1,567   3.38  
Total interest-earning assets   499,862     21,078   4.20       497,739     20,546   4.12  
                           
Noninterest-earning assets   62,926               66,709          
                           
TOTAL ASSETS $ 562,788             $ 564,448          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $ 390,407   $ 3,565   0.91     $ 381,353   $ 2,951   0.77  
Borrowings   33,491     943   2.78       40,222     1,047   2.57  
Total interest-bearing liabilities   423,898     4,508   1.06       421,575     3,998   0.94  
                           
Noninterest-bearing liabilities   81,287               80,494          
Shareholders' equity   57,603               62,379          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 562,788             $ 564,448          
Interest rate spread         3.14 %           3.18 %
Net interest income/margin     $ 16,570   3.31 %       $ 16,548   3.32 %
                           


          Quarter Ended
(Dollars in Thousands, Except Per Share Data)   12/31/2018     9/30/2018     6/30/2018     3/31/2018     12/31/2017    
                       
Operating Data                      
                       
  Net income $ 935   $ 1,010   $ 1,163   $ 1,131   $ 1,449    
  Net interest income   4,225     4,090     4,080     4,175     4,142    
  Provision for loan losses   150     150     25     42     580    
  Non-interest income, ex. Net security gains   1,124     1,154     1,130     1,110     1,198    
  Non-interest expense   4,038     3,891     3,732     3,828     4,515    
                       
Performance Statistics                      
                       
  Net interest margin   3.26%     3.26%     3.32%     3.38%     3.31%    
  Annualized return on average assets   0.65%     0.71%     0.83%     0.83%     1.03%    
  Annualized return on average equity   6.39%     6.94%     8.11%     8.03%     9.04%    
  Annualized net loan charge-offs to avg loans   0.17%     0.08%     0.09%     0.05%     0.46%    
  Net charge-offs   199     91     96     51     528    
  Efficiency ratio   75.5%     74.2%     71.6%     72.4%     84.6%    
                       
Per Share Data                      
                       
  Basic earnings per share $ 0.27   $ 0.29   $ 0.33   $ 0.32   $ 0.37    
  Diluted earnings per share   0.27     0.29     0.33     0.32     0.37    
  Dividend declared per share   0.23     0.23     0.23     0.22     0.22    
  Book value   16.52     16.42     16.36     16.27     16.26    
  Common stock price:                      
    High   20.47     21.00     20.60     19.95     19.90    
    Low   15.77     20.10     19.29     19.19     18.00    
    Close   17.45     20.40     20.43     19.52     19.48    
  Weighted average common shares:                      
    Basic   3,487     3,481     3,477     3,474     3,467    
    Fully diluted   3,499     3,497     3,491     3,489     3,482    
  End-of-period common shares:                      
    Issued   3,598     3,593     3,593     3,591     3,582    
    Treasury   94     94     94     94     94    
                           
    Share and per share data has been restated to reflect the 5% stock dividend paid on June 15, 2018.      
                           
Financial Condition Data:                      
General                      
  Total assets $ 590,040   $ 570,785   $ 562,924   $ 553,259   $ 554,560    
  Loans, net   477,900     462,713     448,690     447,131     454,187    
  Intangibles   12,320     12,320     12,320     12,320     12,320    
  Total deposits   491,517     474,449     468,293     456,322     456,762    
    Noninterest-bearing   81,690     78,324     76,880     73,540     74,072    
    Savings   75,483     71,748     73,200     70,574     70,339    
    NOW   89,666     89,835     87,402     86,205     86,799    
    Money Market   20,087     18,910     21,934     22,928     25,363    
    Time deposits   224,591     215,632     208,877     203,075     200,189    
    Total interest-bearing deposits   409,827     396,125     391,413     382,782     382,690    
  Shareholders' equity   57,949     57,512     57,299     56,887     56,681    
                       
Asset Quality                      
                       
  Non-performing assets $ 4,649   $ 4,520   $ 4,560   $ 3,181   $ 2,933    
  Non-performing assets to total assets   0.79%     0.79%     0.81%     0.57%     0.53%    
  Allowance for loan losses   4,372     4,421     4,362     4,433     4,442    
  Allowance for loan losses to total loans   0.91%     0.95%     0.96%     0.98%     0.97%    
  Allowance for loan losses to                      
    non-performing loans   97.16%     100.00%     99.18%     142.59%     153.97%    
  Non-performing loans to total loans   0.94%     0.96%     0.98%     0.70%     0.64%    
                       
Capitalization                      
                       
  Shareholders' equity to total assets   9.82%     10.08%     10.18%     10.28%     10.22%    
                           

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

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