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Elmira Savings Bank Reports 2017 Earnings

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ELMIRA, N.Y., Jan. 24, 2018 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $1,449,000 and $4,851,000 for the three and twelve months ended December 31, 2017 compared to $1,042,000 and $4,337,000 for the same periods in 2016.
  • Diluted earnings per share were $.39 per share and $1.28 per share for the three and twelve months ended December 31, 2017 compared to $.30 per share and $1.26 per share for the same periods in 2016. 
  • Return on average assets was 1.03% and .86% for the three and twelve months ended December 31, 2017 compared to .73% and .76% for the same periods in 2016.
  • Return on average equity was 9.04% and 7.78% for the three and twelve months ended December 31, 2017 compared to 7.38% and 7.77% for the same periods in 2016.

"We are pleased to report an increase in earnings year-to-year. Our net interest margin increased by 11 basis points to 3.32% and we significantly improved our asset quality. The recently signed tax bill has provided an immediate benefit to the bank and will provide a benefit going forward," said Thomas M. Carr, President and CEO. He continued, "The repurchase in December of all our preferred shares at $9.4 million will, in future periods, reduce our preferred dividends and increase our earnings to common shareholders."

Net Income

Net income totaled $4,851,000 for the twelve months ended December 31, 2017, an increase of $514,000 or 12% from the $4,337,000 of net income recorded for the same period in 2016. This increase was the net result of a decrease in income tax expense of $1.6 million and an increase in net interest income of $28,000, offset by decrease in noninterest income of $463,000, an increase in the provision for loan losses of $408,000, and an increase in noninterest expense of $282,000.

Net income totaled $1,449,000 for the three months ended December 31, 2017, an increase of $407,000 or 39% from the $1,042,000 recorded for the same period in 2016. This increase was the net result of a decrease in income tax expense of $1.6 million, offset by a decrease in noninterest income of $197,000, an increase in noninterest expense of $627,000, a decrease in net interest income of $13,000, and an increase in the provision for loan losses of $405,000.

The enactment of the Tax Cuts and Jobs Act ("the Act") on December 22, 2017 reduces 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 December 31, 2017 were $1.28 per share for both compared to $1.26 per share and $1.25 per share for the same period in 2016. Basic and diluted earnings per share for the three months ended December 31, 2017 were both $.39 per share compared to $.30 per share for both for the same period in 2016.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2017 was 3.32% compared to 3.21% for the same period in 2016. The yield on average earning assets was 4.12% for the twelve months ended December 31, 2017 compared to 4.05% for the same period in 2016. The average cost of interest-bearing liabilities was .94% for the twelve months ended December 31, 2017 compared to 1.00% for the same period in 2016.

The net interest margin for the three months ended December 31, 2017 was 3.31% compared to 3.23% for the same period in 2016. The average yield on earning assets was 4.10% for the three months ended December 31, 2017 compared to 4.04% for the same period in 2016. The average cost of interest-bearing liabilities was 0.95% for both the three months ended December 31, 2017 and 2016.

Assets

Total assets decreased $18.9 million or 3.3% to $554.6 million at December 31, 2017 compared to $573.5 million at December 31, 2016. Cash and cash equivalents decreased by $16.4 million or 67.5% to $7.9 million at December 31, 2017 compared to $24.3 million at December 31, 2016. Loans, including loans held for sale, increased 0.2% to $460.6 million at December 31, 2017 compared to December 31, 2016. The available-for-sale investment portfolio decreased $8.5 million from December 31, 2016 to December 31, 2017.

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to 0.64% at December 31, 2017 from 1.11% at December 31, 2016. Net loan charge-offs to average loans for the twelve months ended December 31, 2017 of 0.16% increased from 0.08% for the twelve months ended December 31, 2016. The allowance for loan losses was 0.97% of total loans at December 31, 2017 and 0.94% of total loans at December 31, 2016.

Liabilities

Deposits total $456.8 million at December 31, 2017, a decrease of $12.8 million or 2.7%. The $12.8 million decrease consists of a $13.7 million decrease in time deposits, a $3.5 million decrease in money market accounts, and a $282,000 decrease in savings accounts, partially offset by a $1.0 million increase in interest bearing transaction accounts and a $3.7 million increase in noninterest bearing accounts. Borrowed funds decreased by $7.0 million or 16.7%.

Shareholders' Equity

Shareholders' equity increased $1.0 million to $56.7 million at December 31, 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, as well as the repurchase of all 10,000 outstanding preferred shares for $9.4 million in December 2017. The preferred shares had been paying a quarterly dividend at an annual rate of 8.998%, which amounted to $900,000 in dividends paid out annually on preferred shares. The current level of shareholders' equity equates to a book value per share of $17.07 at December 31, 2017, compared to $16.74 at December 31, 2016. Dividends paid to common shareholders were $0.23 and $0.93 for the three and twelve months ended December 31, 2017 and were $0.23 and $0.92 for the three and twelve months ended December 31, 2016.

Elmira Savings Bank, with $554.6 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)   December 31,   December 31,      
        2017
  2016
  % Change  
ASSETS                  
                   
Cash and due from banks     $ 7,800     $ 24,195     -67.8 %  
Federal funds sold and other short-term investments   97       99     -2.0 %  
Total cash and cash equivalents       7,897       24,294     -67.5 %  
                   
Securities available for sale, at fair value     24,056       32,581     -26.2 %  
Securities held to maturity - fair value $8,186              
at December 31, 2017 and $8,679 at December 31, 2016   8,039       8,519     -5.6 %  
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost   10,221       9,811     4.2 %  
                   
Loans held for sale       1,999       3,597     -44.4 %  
                   
Loans receivable       458,629       455,931     0.6 %  
Less: Allowance for loan losses       4,442       4,263     4.2 %  
Net loans         454,187       451,668     0.6 %  
                   
Premises and equipment, net       16,772       12,634     32.8 %  
Bank-owned life insurance       13,982       13,592     2.9 %  
Accrued interest receivable       1,497       1,552     -3.5 %  
Intangible assets, net       -       20     -100.0 %  
Goodwill         12,320       12,320     0.0 %  
Other assets         3,590       2,862     25.4 %  
Total assets       $ 554,560     $ 573,450     -3.3 %  
                   
LIABILITIES AND SHAREHOLDERS' EQUITY              
                   
Deposits       $ 456,762     $ 469,547     -2.7 %  
Borrowings         35,000       42,000     -16.7 %  
Other liabilities         6,117       6,180     -1.0 %  
Total liabilities         497,879       517,727     -3.8 %  
                   
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, 2017 and at December 31, 2016   9,700       9,700     0.0 %  
Common stock, $1 par value; authorized 5,000,000 shares; 3,410,622 shares            
issued at December 31, 2017 and 2,844,670 shares issued at December 31, 2016   3,411       2,845     19.9 %  
Additional paid-in capital       50,258       41,644     20.7 %  
Retained earnings       5,493       4,407     24.6 %  
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares            
at December 31, 2017 and 98,118 common shares at December 31, 2016   (12,202 )     (2,907 )   319.7 %  
Accumulated other comprehensive loss     (31 )     (19 )   63.2 %  
Total Elmira Savings Bank shareholders' equity     56,629       55,670     1.7 %  
Noncontrolling interest       52       53     -1.9 %  
Total shareholders' equity       56,681       55,723     1.7 %  
Total liabilities and shareholders' equity   $ 554,560     $ 573,450     -3.3 %  
                   
                   

 

   
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)   2017
  2016
  % Change   2017   2016   % Change  
                           
Interest and dividend income:                          
Interest and fees on loans   $ 4,752     $ 4,751     0.0 %   $ 18,971   $ 19,056   -0.4 %  
Interest and dividends on securities                          
Taxable     253       242     4.5 %     965     1,000   -3.5 %  
Non-taxable     129       205     -37.1 %     610     832   -26.7 %  
Total interest and dividend income     5,134       5,198     -1.2 %     20,546     20,888   -1.6 %  
                           
Interest expense:                          
Interest on deposits     744       773     -3.8 %     2,951     3,055   -3.4 %  
Interest on borrowings     248       270     -8.1 %     1,047     1,313   -20.3 %  
Total interest expense     992       1,043     -4.9 %     3,998     4,368   -8.5 %  
Net interest income     4,142       4,155     -0.3 %     16,548     16,520   0.2 %  
Provision for loan losses     580       175     231.4 %     895     487   83.8 %  
Net interest income after provision for loan losses     3,562       3,980     -10.5 %     15,653     16,033   -2.4 %  
                           
Noninterest income:                          
Service fees     352       331     6.3 %     1,485     1,420   4.6 %  
Gain on sale of loans held for sale     526       771     -31.8 %     2,701     3,061   -11.8 %  
Gain on sale of securities     -       -     -       -     180   -100.0 %  
Other service fees     184       172     7.0 %     739     728   1.5 %  
Earnings on bank-owned life insurance     94       99     -5.1 %     390     403   -3.2 %  
Other     42       22     90.9 %     122     108   13.0 %  
Total noninterest income     1,198       1,395     -14.1 %     5,437     5,900   -7.8 %  
                           
Noninterest expense:                          
Salaries and benefits     2,242       1,944     15.3 %     8,183     7,927   3.2 %  
Net occupancy     376       341     10.3 %     1,499     1,416   5.9 %  
Equipment     343       314     9.2 %     1,278     1,200   6.5 %  
Marketing and public relations     291       215     35.3 %     884     794   11.3 %  
Professional fees     212       (5 )   -4340.0 %     720     517   39.3 %  
Other     1,051       1,079     -2.6 %     3,320     3,748   -11.4 %  
Total noninterest expense     4,515       3,888     16.1 %     15,884     15,602   1.8 %  
Income before income taxes     245       1,487     -83.5 %     5,206     6,331   -17.8 %  
Income taxes     (1,209 )     440     -374.8 %     350     1,989   -82.4 %  
Net income     1,454       1,047     38.9 %     4,856     4,342   11.8 %  
Less: Net income attributable to noncontrolling interest     5       5     -       5     5   -    
                           
Net income attributable to Elmira Savings Bank     1,449       1,042     39.1 %     4,851     4,337   11.9 %  
                           
Dividend on preferred stock     170       225     -24.4 %     845     900   -6.1 %  
Income available to common shareholders   $ 1,279     $ 817     56.5 %   $ 4,006   $ 3,437   16.6 %  
                           
                           
Basic earnings per share   $ 0.39     $ 0.30     30.0 %   $ 1.28   $ 1.26   1.6 %  
                           
Diluted earnings per share   $ 0.39     $ 0.30     30.0 %   $ 1.28   $ 1.25   2.4 %  
                           
Weighted average shares outstanding - basic     3,302,350       2,731,266     20.9 %     3,125,434     2,722,243   14.8 %  
                           
Weighted average shares outstanding - diluted     3,316,119       2,749,828     20.6 %     3,140,893     2,739,668   14.6 %  
                           
Dividends per share   $ 0.23     $ 0.23     0.0 %   $ 0.93   $ 0.92   1.1 %  
                           
                           

 

   
ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
(unaudited)  
                           
(Dollars in Thousands) For the Three Months Ended  
  December 31, 2017     December 31, 2016  
ASSETS: Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans $ 452,863   $ 4,752   4.17 %   $ 458,772   $ 4,751   4.12 %
Short-term investments   1,248     4   1.10       789     -   0.17  
Securities   43,565     378   3.46       52,464     447   3.39  
Total interest-earning assets   497,676     5,134   4.10       512,025     5,198   4.04  
                           
Noninterest-earning assets   60,203               58,067          
                           
TOTAL ASSETS $ 557,879             $ 570,092          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $ 377,628   $ 744   0.78     $ 394,401   $ 773   0.78  
Borrowings   35,615     248   2.72       42,000     270   2.51  
Total interest-bearing liabilities   413,243     992   0.95       436,401     1,043   0.95  
                           
Noninterest-bearing liabilities   81,024               77,531          
Shareholders' equity   63,612               56,160          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 557,879             $ 570,092          
Interest rate spread         3.15 %           3.09 %
Net interest income/margin     $ 4,142   3.31 %       $ 4,155   3.23 %
                           
                           

 

   
ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
(unaudited)  
                           
(Dollars in Thousands) For the Twelve Months Ended  
  December 31, 2017     December 31, 2016  
ASSETS: Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans $ 450,896   $ 18,971   4.20 %   $ 458,840   $ 19,056   4.14 %
Short-term investments   496     8   1.63       586     1   0.18  
Securities   46,347     1,567   3.38       54,449     1,831   3.36  
Total interest-earning assets   497,739     20,546   4.12       513,875     20,888   4.05  
                           
Noninterest-earning assets   66,709               53,301          
                           
TOTAL ASSETS $ 564,448             $ 567,176          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $ 381,353   $ 2,951   0.77     $ 386,818   $ 3,055   0.79  
Borrowings   40,222     1,047   2.57       48,788     1,313   2.65  
Total interest-bearing liabilities   421,575     3,998   0.94       435,606     4,368   1.00  
                           
Noninterest-bearing liabilities   80,494               75,782          
Shareholders' equity   62,379               55,788          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 564,448             $ 567,176          
Interest rate spread         3.18 %           3.05 %
Net interest income/margin     $ 16,548   3.32 %       $ 16,520   3.21 %
                           
                           

 

       
      Quarter Ended (unaudited)
       
(Dollars in Thousands, Except Per Share Data)   12/31/2017   9/30/2017   6/30/2017   3/31/2017   12/31/2016
Operating Data                    
Net income $ 1,449   $ 1,215   $ 1,108   $ 1,079   $ 1,042  
Net interest income   4,142     4,047     4,186     4,173     4,155  
Provision for loan losses   580     120     155     40     175  
Net security gains   -     -     -     -     -  
Non-interest income, ex. Net security gains   1,198     1,626     1,352     1,261     1,395  
Non-interest expense   4,515     3,760     3,781     3,828     3,888  
Performance Statistics                    
Net interest margin   3.31 %   3.27 %   3.36 %   3.32 %   3.23 %
Annualized return on average assets   1.03 %   0.84 %   0.79 %   0.78 %   0.73 %
Annualized return on average equity   9.04 %   7.32 %   7.01 %   7.74 %   7.38 %
Annualized net loan charge-offs to avg loans   0.46 %   0.03 %   0.13 %   0.01 %   0.20 %
Net charge-offs   528     28     144     16     231  
Efficiency ratio   84.6 %   66.3 %   68.3 %   70.4 %   70.1 %
Per Share Data                    
Basic earnings per share $ 0.39   $ 0.30   $ 0.28   $ 0.31   $ 0.30  
Diluted earnings per share   0.39     0.30     0.28     0.31     0.30  
Dividend declared per share   0.23     0.23     0.23     0.23     0.23  
Book value   17.07     16.84     16.77     16.82     16.74  
Common stock price:                    
High   20.90     21.10     21.75     21.75     22.25  
Low   18.90     19.80     19.65     20.28     18.50  
Close   20.45     20.10     20.30     21.60     20.45  
Weighted average common shares:                    
Basic   3,302     3,298     3,154     2,739     2,731  
Fully diluted   3,316     3,312     3,170     2,757     2,750  
End-of-period common shares:                    
Issued   3,411     3,409     3,405     2,850     2,845  
Treasury   94     94     94     94     98  
                     
                     
Financial Condition Data:                    
General                    
Total assets $ 554,560   $ 565,042   $ 574,332   $ 556,644   $ 573,450  
Loans, net   454,187     443,543     448,024     446,223     451,668  
Intangibles   12,320     12,324     12,329     12,334     12,340  
Total deposits   456,762     454,826     460,140     450,376     469,547  
Noninterest-bearing   74,072     75,625     77,027     71,870     70,330  
Savings   70,339     68,253     70,668     70,300     70,621  
NOW   86,799     87,612     86,896     86,633     85,822  
Money Market   25,363     25,184     24,859     27,697     28,889  
Time deposits   200,189     198,152     200,690     193,876     213,885  
Total interest-bearing deposits   382,690     379,201     383,113     378,506     399,217  
Shareholders' equity   56,681     65,590     65,280     56,103     55,723  
Asset Quality                    
Non-performing assets $ 2,933   $ 3,793   $ 3,494   $ 4,234   $ 5,289  
Non-performing assets to total assets   0.53 %   0.67 %   0.61 %   0.76 %   0.92 %
Allowance for loan losses   4,442     4,390     4,298     4,287     4,263  
Allowance for loan losses to total loans   0.97 %   0.98 %   0.95 %   0.95 %   0.94 %
Allowance for loan losses to                    
non-performing loans   153.97 %   118.46 %   129.15 %   105.93 %   84.80 %
Non-performing loans to total loans   0.64 %   0.84 %   0.74 %   0.91 %   1.11 %
Capitalization                    
Shareholders' equity to total assets   10.22 %   11.61 %   11.37 %   10.08 %   9.72 %
                               

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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