Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $909,000 and $1,927,000 for the three and six months ended June 30, 2020 compared to $718,000 and $1,645,000 for the same periods in 2019.
  • Diluted earnings per share were $.26 per share and $.55 per share for the three and six months ended June 30, 2020 compared to $.21 per share and $.47 per share for the same periods in 2019. 
  • Return on average assets was .57% and .62% for the three and six months ended June 30, 2020 compared to .47% and .56% for the three and six months ended June 30, 2019.
  • Return on average equity was 6.12% and 6.52% for the three and six months ended June 30, 2020 compared to 4.92% and 5.66% for the same periods in 2019.

"We continue to be concerned about the impact the economic shutdown and subsequent staged reopening due to the COVID-19 pandemic is having on local economies. Our region has been fortunate to have not yet experienced the widespread health crisis like other areas of the state and country," said Thomas M Carr, President and CEO.  Carr continued, "We are focused on continuing to provide credit and financial services needed in the communities we serve, balancing those efforts with prudent safety measures to minimize potential COVID health risks to our customers and staff.”

Net Income

Net income totaled $1,927,000 for the six months ended June 30, 2020, an increase of $282,000 or 17% from the $1,645,000 of net income recorded for the same period in 2019.  This increase was the net result of an increase in noninterest income of $786,000 and an increase in net interest income of $221,000, offset by an increase in the provision for loan losses of $331,000, an increase in noninterest expense of $216,000, and an increase in tax expense of $178,000.

Net income totaled $909,000 for the three months ended June 30, 2020, an increase of $191,000 or 27% from the $718,000 recorded for the same period in 2019.  This increase was the net result of an increase in noninterest income of $630,000, an increase in net interest income of $40,000, and a decrease in noninterest expense of $13,000, offset by an increase in the provision for loan losses of $413,000 and an increase in tax expense of $79,000.

The increase in noninterest income for both the three and six months ended June 30, 2020 is primarily due to increases in the gain on sale of loans, reflecting higher levels of residential mortgages originated for sale to the secondary markets compared to the same periods in 2019.

For both the three and six months ended June 30, 2020, the increases in the provision for loan losses reflect management’s consideration of the uncertainty of ongoing economic conditions resulting from the COVID-19 pandemic and associated economic slowdown. 

Basic and diluted earnings per share for the six months ended June 30, 2020 were both $.55 per share compared to $.47 per share for both for the same period in 2019.  Basic and diluted earnings per share for the three months ended June 30, 2020 were both $.26 per share compared to $.21 per share for both for the same period in 2019.

Net Interest Margin

The net interest margin for the six months ended June 30, 2020 was 3.07% compared to 3.10% for the same period in 2019.  The yield on average earning assets was 4.24% for the six months ended June 30, 2020 compared to 4.31% for the same period in 2019.  The average cost of interest-bearing liabilities was 1.38% for the six months ended June 30, 2020 compared to 1.42% for the same period in 2019.

The net interest margin for the three months ended June 30, 2020 was 2.98% compared to 3.06% for the same period in 2019.  The average yield on earning assets was 4.11% for the three months ended June 30, 2020 compared to 4.36% for the same period in 2019.  The average cost of interest-bearing liabilities was 1.32% for the three months ended June 30, 2020 compared to 1.50% for the same period in 2019.

Assets

Total assets increased $69.0 million or 11.4% to $675.9 million at June 30, 2020 compared to $606.8 million at December 31, 2019.  Loans, including loans held for sale, increased 1.4% to $527.6 million at June 30, 2020 compared to December 31, 2019.  The available-for-sale investment portfolio decreased $4.8 million from December 31, 2019 to June 30, 2020. Total cash and cash equivalents were $79.6 million at June 30, 2020, an increase of $67.5 million from December 31, 2019 when cash totaled $12.0 million.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 1.02% at June 30, 2020 and 0.82% at December 31, 2019.  Net loan charge-offs to average loans for the six months ended June 30, 2020 was 0.09% for both the six months ended June 30, 2020 and June 30, 2019.  The allowance for loan losses was 0.96% of total loans at June 30, 2020 and 0.88% of total loans at December 31, 2019.

Liabilities

Deposits total $551.2 million at June 30, 2020, an increase of $39.0 million or 7.6% from the December 31, 2019 total of $512.2 million.  Borrowed funds totaled $56.9 million as of June 30, 2020, an increase of $27.9 million from December 31, 2019 when borrowed funds totaled $29.0 million.

Shareholders’ Equity

Shareholders’ equity increased $885,000 to $59.5 million at June 30, 2020 compared to December 31, 2019.  The current level of shareholders’ equity equates to a book value per share of $16.87 at June 30, 2020, compared to $16.67 at December 31, 2019.  Dividends paid for common shareholders were $0.15 and $0.38 for the three and six months ended June 30, 2020 and $0.23 and $0.46 for the three and six months ended June 30, 2019.  

Elmira Savings Bank, with $675.9 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a state-chartered bank with five 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.

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

ELMIRA SAVINGS BANK
CONSOLIDATED BALANCE SHEET
(unaudited)
           
(in thousands, except for share and per share data) June 30,   December 31,    
    2020       2019     % Change
ASSETS          
           
Cash and due from banks $ 79,470     $ 11,954     564.8 %
Federal funds sold and other short-term investments   89       92     -3.3 %
Total cash and cash equivalents   79,559       12,046     560.5 %
           
Securities available for sale, at fair value   6,962       11,802     -41.0 %
Securities held to maturity - fair value $7,428 at June 30, 2020, and $7,233 at December 31, 2019   6,783       7,018     -3.3 %
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost   9,893       9,944     -0.5 %
           
Loans held for sale   3,919       1,354     189.4 %
           
Loans receivable   523,723       518,871     0.9 %
Less: Allowance for loan losses   5,025       4,576     9.8 %
Net loans   518,698       514,295     0.9 %
           
Premises and equipment, net   15,953       16,210     -1.6 %
Bank-owned life insurance   15,204       14,919     1.9 %
Accrued interest receivable   1,761       1,625     8.4 %
Goodwill   12,320       12,320     0.0 %
Other assets   4,810       5,296     -9.2 %
Total assets $ 675,862     $ 606,829     11.4 %
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
Deposits $ 551,225     $ 512,215     7.6 %
Borrowings   56,896       29,000     96.2 %
Other liabilities   8,245       7,003     17.7 %
Total liabilities   616,366       548,218     12.4 %
           
Shareholders' equity:          
Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares authorized; 10,000 shares issued and none outstanding at June 30, 2020 and at December 31, 2019   9,700       9,700     0.0 %
Common stock, $1 par value; authorized 5,000,000 shares; 3,616,770 shares issued and 3,522,887 outstanding at June 30, 2020 and 3,606,089 shares issued and 3,512,206 outstanding at December 31, 2019   3,617       3,606     0.3 %
Additional paid-in capital   54,140       53,993     0.3 %
Retained earnings   4,022       3,432     17.2 %
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares at June 30, 2020 and December 31, 2019   (12,202 )     (12,202 )   0.0 %
Accumulated other comprehensive income   169       32     428.1 %
Total Elmira Savings Bank shareholders' equity   59,446       58,561     1.5 %
Noncontrolling interest   50       50     0.0 %
Total shareholders' equity   59,496       58,611     1.5 %
Total liabilities and shareholders' equity $ 675,862     $ 606,829     11.4 %
           
ELMIRA SAVINGS BANK
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
                         
    Three Months Ended   Six Months Ended
    June 30,   June 30,
(in thousands, except for per share data)   2020   2019   % Change   2020   2019   % Change
                         
Interest and dividend income:                        
Interest and fees on loans   $ 5,451   $ 5,464   -0.2 %   $ 11,073   $ 10,647   4.0 %
Interest and dividends on securities                        
Taxable     177     252   -29.8 %     390     525   -25.7 %
Non-taxable     72     109   -33.9 %     154     224   -31.3 %
Total interest and dividend income     5,700     5,825   -2.1 %     11,617     11,396   1.9 %
                         
Interest expense:                        
Interest on deposits     1,342     1,519   -11.7 %     2,759     2,780   -0.8 %
Interest on borrowings     221     209   5.7 %     440     419   5.0 %
Total interest expense     1,563     1,728   -9.5 %     3,199     3,199   0.0 %
Net interest income     4,137     4,097   1.0 %     8,418     8,197   2.7 %
Provision for loan losses     575     162   254.9 %     625     294   112.6 %
Net interest income after provision for loan losses     3,562     3,935   -9.5 %     7,793     7,903   -1.4 %
                         
Noninterest income:                        
Service fees     255     345   -26.1 %     586     701   -16.4 %
Gain on sale of loans held for sale     1,192     425   180.5 %     1,629     714   128.2 %
Other service fees     181     212   -14.6 %     394     414   -4.8 %
Earnings on bank-owned life insurance     97     94   3.2 %     195     186   4.8 %
Other     31     50   -38.0 %     93     96   -3.1 %
Total noninterest income     1,756     1,126   56.0 %     2,897     2,111   37.2 %
                         
Noninterest expense:                        
Salaries and benefits     2,070     2,105   -1.7 %     4,214     4,125   2.2 %
Net occupancy     435     375   16.0 %     829     820   1.1 %
Equipment     385     401   -4.0 %     785     764   2.7 %
Marketing and public relations     146     253   -42.3 %     323     499   -35.3 %
Professional fees     149     133   12.0 %     315     271   16.2 %
Other     1,008     939   7.3 %     1,810     1,581   14.5 %
Total noninterest expense     4,193     4,206   -0.3 %     8,276     8,060   2.7 %
Income before income taxes     1,125     855   31.6 %     2,414     1,954   23.5 %
Income taxes     216     137   57.7 %     487     309   57.6 %
Net income     909     718   26.6 %     1,927     1,645   17.1 %
Less: Net income attributable to noncontrolling interest     -     -   -       -     -   -  
                         
Net income attributable to Elmira Savings Bank     909     718   26.6 %     1,927     1,645   17.1 %
                         
Dividend on preferred stock     -     -   -       -     -   -  
Income available to common shareholders   $ 909   $ 718   26.6 %   $ 1,927   $ 1,645   17.1 %
                         
                         
Basic earnings per share   $ 0.26   $ 0.21   23.8 %   $ 0.55   $ 0.47   17.0 %
                         
Diluted earnings per share   $ 0.26   $ 0.21   23.8 %   $ 0.55   $ 0.47   17.0 %
                         
Weighted average shares outstanding - basic     3,507,136     3,493,298   0.4 %     3,505,240     3,492,571   0.4 %
                         
Weighted average shares outstanding - diluted     3,507,136     3,499,335   0.2 %     3,506,864     3,500,198   0.2 %
                         
Dividends per share   $ 0.15   $ 0.23   -34.8 %   $ 0.38   $ 0.46   -17.4 %
                         

ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                           
(Dollars in Thousands) For the Three Months Ended  
  June 30, 2020     June 30, 2019  
ASSETS: Average Balance Interest   Average Rate   Average Balance Interest   Average Rate  
Loans $ 528,659   $ 5,451   4.12 %   $ 492,985   $ 5,464   4.42 %
Short-term investments   1,328     -   0.02       513     3   2.11  
Securities   24,909     249   4.01       39,985     358   3.59  
Total interest-earning assets   554,896     5,700   4.11       533,483     5,825   4.36  
                           
Noninterest-earning assets   92,109               72,842          
                           
TOTAL ASSETS $ 647,005             $ 606,325          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $ 431,681   $ 1,342   1.25     $ 431,816   $ 1,519   1.41  
Borrowings   43,583     221   2.01       29,000     209   2.85  
Total interest-bearing liabilities   475,264     1,563   1.32       460,816     1,728   1.50  
                           
Noninterest-bearing liabilities   111,950               86,960          
Shareholders' equity   59,790               58,549          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 647,004             $ 606,325          
Interest rate spread         2.79 %           2.86 %
Net interest income/margin     $ 4,137   2.98 %       $ 4,097   3.06 %
                           

ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                           
(Dollars in Thousands) For the Six Months Ended  
  June 30, 2020     June 30, 2019  
ASSETS: Average Balance Interest   Average Rate   Average Balance Interest   Average Rate  
Loans $ 520,069   $ 11,073   4.25 %   $ 487,500   $ 10,647   4.37 %
Short-term investments   1,037     1   0.27       496     5   2.00  
Securities   26,364     543   4.12       40,851     744   3.66  
Total interest-earning assets   547,470     11,617   4.24       528,847     11,396   4.31  
                           
Noninterest-earning assets   75,922               67,108          
                           
TOTAL ASSETS $ 623,392             $ 595,955          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $ 426,337   $ 2,759   1.30     $ 423,792   $ 2,780   1.32  
Borrowings   37,669     440   2.31       29,376     419   2.83  
Total interest-bearing liabilities   464,006     3,199   1.38       453,168     3,199   1.42  
                           
Noninterest-bearing liabilities   99,925               84,198          
Shareholders' equity   59,461               58,589          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 623,392             $ 595,955          
Interest rate spread         2.86 %           2.89 %
Net interest income/margin     $ 8,418   3.07 %       $ 8,197   3.10 %
                           
  Quarter Ended
(Dollars in Thousands, Except Per Share Data)   6/30/2020     3/31/2020     12/31/2019     9/30/2019     6/30/2019  
Operating Data                    
Net income $ 909   $ 1,018   $ 940   $ 901   $ 718  
Net interest income   4,137     4,281     4,159     4,072     4,097  
Provision for loan losses   575     50     200     250     162  
Net security gains   -     -     -     90     -  
Non-interest income, ex. Net security gains   1,756     1,141     1,358     1,214     1,126  
Non-interest expense   4,193     4,083     4,174     4,043     4,206  
Performance Statistics                    
Net interest margin   2.98 %   3.16 %   3.01 %   2.97 %   3.06 %
Annualized return on average assets   0.57 %   0.68 %   0.61 %   0.58 %   0.47 %
Annualized return on average equity   6.12 %   6.93 %   6.33 %   6.07 %   4.92 %
Annualized net loan charge-offs to avg loans   0.09 %   0.05 %   0.14 %   0.11 %   0.09 %
Net charge-offs   116     60     183     135     105  
Efficiency ratio   71.1 %   75.3 %   75.7 %   75.2 %   80.5 %
Per Share Data                    
Basic earnings per share $ 0.26   $ 0.29   $ 0.27   $ 0.26   $ 0.21  
Diluted earnings per share   0.26     0.29     0.27     0.26     0.21  
Dividend declared per share   0.15     0.23     0.23     0.23     0.23  
Book value   16.87     16.77     16.67     16.62     16.60  
Common stock price:                    
High   13.39     17.40     15.99     16.40     17.40  
Low   10.49     11.50     13.97     13.97     15.69  
Close   11.00     11.50     15.10     14.07     16.05  
Weighted average common shares:                    
Basic   3,507     3,503     3,499     3,496     3,493  
Fully diluted   3,507     3,507     3,501     3,499     3,499  
End-of-period common shares:                    
Issued   3,617     3,611     3,606     3,606     3,605  
Treasury   94     94     94     94     94  
                     
                     
Financial Condition Data:                    
General                    
Total assets $ 675,862   $ 598,017   $ 606,829   $ 615,601   $ 610,398  
Loans, net   518,698     506,076     514,295     511,750     496,149  
Intangibles   12,320     12,320     12,320     12,320     12,320  
Total deposits   551,225     501,760     512,215     520,030     516,327  
Noninterest-bearing   109,985     83,431     81,934     82,613     81,249  
Savings   79,150     72,174     70,358     69,186     71,100  
NOW   91,166     83,323     88,126     84,207     85,130  
Money Market   28,467     20,306     24,724     21,555     19,925  
Time deposits   242,457     242,526     247,073     262,469     258,923  
Total interest-bearing deposits   441,240     418,329     430,281     437,417     435,078  
Shareholders' equity   59,496     59,044     58,611     58,422     58,357  
Asset Quality                    
Non-performing assets $ 5,578   $ 4,686   $ 4,723   $ 4,923   $ 4,996  
Non-performing assets to total assets   0.83 %   0.78 %   0.78 %   0.80 %   0.82 %
Allowance for loan losses   5,025     4,566     4,576     4,559     4,444  
Allowance for loan losses to total loans   0.96 %   0.89 %   0.88 %   0.88 %   0.89 %
Allowance for loan losses to non-performing loans   95.28 %   105.43 %   108.51 %   96.43 %   93.55 %
Non-performing loans to total loans   1.02 %   0.86 %   0.82 %   0.92 %   0.96 %
Capitalization                    
Shareholders' equity to total assets   8.80 %   9.87 %   9.66 %   9.49 %   9.56 %
                     
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