Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $927,000 for the three months ended March 31, 2019 compared to $1,131,000 for the same period in 2018.
  • Diluted earnings per share were $.26 per share for the three months ended March 31, 2019 compared to $.32 per share for the same period in 2018. 
  • Return on average assets was .64% for the three months ended March 31, 2019 and .83% for the same period in 2018.
  • Return on average equity was 6.41% for the three months ended March 31, 2019 compared to 8.03% for the same period in 2018.
  • Loans receivable of $489.2 million were up 8.3% over the same period in 2018, and are up 1.4% compared to December 31, 2018.
  • Total deposits of $503.1 million reflect an increase of 10.3% over the same period last year, and are up 2.4% from December 31, 2018.

“Net income is lower year to year due to lower revenue and higher provision expense.  We are pleased with the continued growth in deposits across all the market areas our branches are located” said Thomas M. Carr, President and CEO.  Carr continued, “we were pleased to increase loans by 1.4% and deposits by 2.4% during the first quarter.”

Net Income

Net income totaled $927,000 for the three months ended March 31, 2019, a decrease of $204,000 or 18.0% from the $1,131,000 recorded for the same period in 2018.  This decrease was the net result of a decrease in noninterest income of $125,000, a decrease in net interest income of $75,000, an increase in the provision for loan losses of $90,000, and an increase in noninterest expense of $26,000, offset by a decrease in tax expense of $112,000.

Basic and diluted earnings per share for the three months ended March 31, 2019 were $.27 and $.26 per share compared to $.33 and $.32 per share for the same period in 2018.  Per share data has been restated to reflect the 5% stock dividend paid on June 15, 2018.

Net Interest Margin

The net interest margin for the three months ended March 31, 2019 was 3.13% compared to 3.38% for the first quarter of 2018.  The yield on average earning assets was 4.27% for the three months ended March 31, 2019 compared to 4.19% for the same period in 2018.  The average cost of interest-bearing liabilities was 1.34% for the three months ended March 31, 2019 compared to .96% for the three months ended March 31, 2018.

Assets

Total assets increased $6.6 million or 1.1% to $596.6 million at March 31, 2019 compared to $590.0 million at December 31, 2018.  Loans receivable increased 1.4% to $489.2 million at March 31, 2019 compared to December 31, 2018.  The available-for-sale investment portfolio decreased $393,000 from December 31, 2018 to March 31, 2019, and cash and cash equivalents decreased by $1.1 million from December 31, 2018 to March 31, 2019.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 1.01% at March 31, 2019 and .94% at December 31, 2018.  Net loan charge-offs to average loans for the three months ended March 31, 2019 was .10% and .05% for the three months ended March 31, 2018.  The allowance for loan losses was .90% of total loans at March 31, 2019 and .91% at December 31, 2018.

Liabilities

Deposits totaled $503.1 million at March 31, 2019, an increase of $11.6 million or 2.4% from the December 31, 2018 total of $491.5 million.  Borrowed funds decreased by $2.0 million from December 31, 2018 to $29.0 million.

Shareholders’ Equity

Shareholders’ equity increased $282,000 to $58.2 million at March 31, 2019 compared to December 31, 2018. The current level of shareholders’ equity equates to a book value per share of $16.59 at March 31, 2019, compared to $16.52 at December 31, 2018.  Dividends paid to common shareholders were $0.23 for the three months ended March 31, 2018 and $.22 for the three months ended March 31, 2018.    

Elmira Savings Bank, with $596.6 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)   March 31,   December 31,      
        2019   2018   % Change  
ASSETS                  
                   
Cash and due from banks     $   18,347     $   19,429     -5.6 %
Federal funds sold and other short-term investments       93         94     -1.1 %
Total cash and cash equivalents         18,440         19,523     -5.5 %
                   
Securities available for sale, at fair value       24,658         25,051     -1.6 %
Securities held to maturity - fair value $7,565              
at March 31, 2019, and $7,638 at December 31, 2018       7,439         7,518     -1.1 %
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost     9,380         9,462     -0.9 %
                   
Loans held for sale         843         1,392     -39.4 %
                   
Loans receivable           489,167         482,272     1.4 %
Less: Allowance for loan losses         4,387         4,372     0.3 %
Net loans           484,780         477,900     1.4 %
                   
Premises and equipment, net         18,963         16,846     12.6 %
Bank-owned life insurance         14,536         14,444     0.6 %
Accrued interest receivable         1,622         1,566     3.6 %
Goodwill           12,320         12,320     0.0 %
Other assets           3,632         4,018     -9.6 %
Total assets       $   596,613     $   590,040     1.1 %
                   
LIABILITIES AND SHAREHOLDERS' EQUITY              
                   
Deposits       $   503,089     $   491,517     2.4 %
Borrowings           29,000         31,000     -6.5 %
Other liabilities           6,293         9,574     -34.3 %
Total liabilities           538,382         532,091     1.2 %
                   
Shareholders' equity:                
Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares            
authorized; 10,000 shares issued at March 31, 2019 and at December 31, 2018     9,700         9,700     0.0 %
Common stock, $1 par value; 5,000,000 shares authorized; 3,601,136 shares             
issued at March 31, 2019 and 3,597,605 shares issued at December 31, 2018     3,601         3,598     0.1 %
Additional paid-in capital         53,839         53,784     0.1 %
Retained earnings         3,296         3,176     3.8 %
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares            
at March 31, 2019 and December 31, 2018       (12,202 )       (12,202 )   0.0 %
Accumulated other comprehensive loss       (53 )       (158 )   -66.5 %
Total Elmira Savings Bank shareholders' equity       58,181         57,898     0.5 %
Noncontrolling interest         50         51     -2.0 %
Total shareholders' equity         58,231         57,949     0.5 %
Total liabilities and shareholders' equity   $   596,613     $   590,040     1.1 %
                   

 

ELMIRA SAVINGS BANK  
CONSOLIDATED STATEMENT OF INCOME   
(unaudited)  
               
    Three Months Ended      
    March 31,      
(in thousands, except for per share data)   2019   2018   % Change  
               
Interest and dividend income:               
Interest and fees on loans   $   5,183   $   4,796   8.1 %
Interest and dividends on securities              
Taxable       273       252   8.3 %
Non-taxable       115       120   -4.2 %
Total interest and dividend income       5,571       5,168   7.8 %
               
Interest expense:              
Interest on deposits       1,261       750   68.1 %
Interest on borrowings       210       243   -13.6 %
Total interest expense       1,471       993   48.1 %
Net interest income       4,100       4,175   -1.8 %
Provision for loan losses       132       42   214.3 %
Net interest income after provision for loan losses       3,968       4,133   -4.0 %
               
Noninterest income:              
Service fees       356       388   -8.2 %
Gain on sale of loans held for sale       289       378   -23.5 %
Other service fees       202       193   4.7 %
Earnings on bank-owned life insurance        92       90   2.2 %
Other       46       61   -24.6 %
Total noninterest income       985       1,110   -11.3 %
               
Noninterest expense:              
Salaries and benefits       2,020       1,947   3.7 %
Net occupancy       445       429   3.7 %
Equipment       363       337   7.7 %
Marketing and public relations       246       221   11.3 %
Professional fees       138       177   -22.0 %
Other       642       717   -10.5 %
Total noninterest expense       3,854       3,828   0.7 %
Income before income taxes       1,099       1,415   -22.3 %
Income taxes       172       284   -39.4 %
Net income       927       1,131   -18.0 %
Less: Net income attributable to noncontrolling interest       -       -     -  
               
Net income attributable to Elmira Savings Bank     927     1,131   -18.0 %
               
Dividend on preferred stock       -       -     -  
Income available to common shareholders   $   927   $   1,131   -18.0 %
               
               
Basic earnings per share   $   0.27   $   0.33   -18.2 %
               
Diluted earnings per share   $   0.26   $   0.32   -18.8 %
               
Weighted average shares outstanding - basic       3,491,821       3,474,449   0.5 %
               
Weighted average shares outstanding - diluted       3,501,037       3,488,857   0.3 %
               
Dividends per share   $   0.23   $   0.22   4.5 %
               
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  
  March 31, 2019     March 31, 2018  
ASSETS: Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans $ 481,954   $ 5,183   4.32 %   $ 453,362   $ 4,796   4.25 %
Short-term investments     479       2   1.88         433       2   1.33  
Securities     41,727       386   3.72         41,519       370   3.59  
Total interest-earning assets     524,160       5,571   4.27         495,314       5,168   4.19  
                           
Noninterest-earning assets     61,310                 57,887          
                           
TOTAL ASSETS $   585,470             $   553,201          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $   415,680   $   1,261   1.23     $   381,823   $   750   0.80  
Borrowings     29,755       210   2.82         35,515       243   2.73  
Total interest-bearing liabilities     445,435       1,471   1.34         417,338       993   0.96  
                           
Noninterest-bearing liabilities     81,406                 78,744          
Shareholders' equity     58,629                 57,119          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $   585,470             $   553,201          
Interest rate spread         2.93 %           3.23 %
Net interest income/margin     $   4,100   3.13 %       $   4,175   3.38 %
                           

 

          Quarter Ended  
                       
(Dollars in Thousands, Except Per Share Data)   3/31/2019     12/31/2018     9/30/2018     6/30/2018     3/31/2018    
                                 
Operating Data                                
                                 
  Net income $   927   $   935   $   1,010   $   1,163   $   1,131    
  Net interest income     4,100       4,225       4,090       4,080       4,175    
  Provision for loan losses     132       150       150       25       42    
  Non-interest income, ex. Net security gains     985       1,124       1,154       1,130       1,110    
  Non-interest expense     3,854       4,038       3,891       3,732       3,828    
                       
Performance Statistics                      
                       
  Net interest margin   3.13 %   3.26 %   3.26 %   3.32 %   3.38 %  
  Annualized return on average assets   0.64 %   0.65 %   0.71 %   0.83 %   0.83 %  
  Annualized return on average equity   6.41 %   6.39 %   6.94 %   8.11 %   8.03 %  
  Annualized net loan charge-offs to avg loans   0.10 %   0.17 %   0.08 %   0.09 %   0.05 %  
  Net charge-offs     117       199       91       96       51    
  Efficiency ratio   75.8 %   75.5 %   74.2 %   71.6 %   72.4 %  
                       
Per Share Data                      
                       
  Basic earnings per share $   0.27   $   0.27   $   0.29   $   0.33   $   0.33    
  Diluted earnings per share     0.26       0.27       0.29       0.33       0.32    
  Dividend declared per share     0.23       0.23       0.23       0.23       0.22    
  Book value     16.59       16.52       16.42       16.36       16.27    
  Common stock price:                      
    High      19.09       20.47       21.00       20.60       19.95    
    Low     16.32       15.77       20.10       19.29       19.19    
    Close     16.75       17.45       20.40       20.43       19.52    
  Weighted average common shares:                      
    Basic      3,492       3,487       3,481       3,477       3,474    
    Fully diluted     3,501       3,499       3,497       3,491       3,489    
  End-of-period common shares:                      
    Issued     3,601       3,598       3,593       3,593       3,591    
    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 $   596,613   $   590,040   $   570,785   $   562,924   $   553,259    
  Loans, net     484,780       477,900       462,713       448,690       447,131    
  Intangibles     12,320       12,320       12,320       12,320       12,320    
  Total deposits     503,089       491,517       474,449       468,293       456,322    
                                     
    Noninterest-bearing     76,414       81,690       78,324       76,880       73,540    
                                     
    Savings     71,642       75,483       71,748       73,200       70,574    
    NOW     85,808       89,666       89,835       87,402       86,205    
    Money Market     19,405       20,087       18,910       21,934       22,928    
    Time deposits     249,820       224,591       215,632       208,877       203,075    
    Total interest-bearing deposits     426,675       409,827       396,125       391,413       382,782    
                                   
  Shareholders' equity     58,231       57,949       57,512       57,299       56,887    
                                   
Asset Quality                      
                       
  Non-performing assets $   5,081   $   4,649   $   4,520   $   4,560   $   3,181    
  Non-performing assets to total assets   0.85 %   0.79 %   0.79 %   0.81 %   0.57 %  
  Allowance for loan losses     4,387       4,372       4,421       4,362       4,433    
  Allowance for loan losses to total loans   0.90 %   0.91 %   0.95 %   0.96 %   0.98 %  
  Allowance for loan losses to                       
    non-performing loans   89.71 %   97.16 %   100.00 %   99.18 %   142.59 %  
  Non-performing loans to total loans   1.01 %   0.94 %   0.96 %   0.98 %   0.70 %  
                       
Capitalization                      
                       
  Shareholders' equity to total assets   9.76 %   9.82 %   10.08 %   10.18 %   10.28 %  
                           

For further information contact:Thomas M. Carr, President & CEOElmira Savings Bank333 East Water StreetElmira, New York  14901(607) 735-8660tcarr@elmirasavingsbank.com

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