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Elmira Savings Bank Reports Second Quarter Earnings

ELMIRA, N.Y., July 19, 2017 (GLOBE NEWSWIRE) --

Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $1,108,000 and $2,187,000 for the three and six months ended June 30, 2017 compared to $1,057,000 and $2,093,000 for the same periods in 2016.

  • Diluted earnings per share were $.28 per share and $.59 per share for the three and six months ended June 30, 2017 compared to $.30 per share and $.60 per share for the same periods in 2016.

  • Return on average assets was .79% and .78% for the three and six months ended June 30, 2017 compared to .73% for both of the same periods in 2016.

  • Return on average equity was 7.01% and 7.35% for the three and six months ended June 30, 2017 compared to 7.65% and 7.58% 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 16 basis points year-to-year to 3.34% for the first half of 2017,” said Thomas M. Carr, President and CEO. Carr continued, “In addition to the second quarter earnings improvement, we are also pleased to have successfully completed the capital raise and recently opened our new branch office in Ithaca.”

Net Income

Net income totaled $2,187,000 for the six months ended June 30, 2017, an increase of $94,000 or 5% from the $2,093,000 of net income recorded for the same period in 2016. This increase was the net result of an increase in net interest income of $205,000, a decrease in noninterest expense of $129,000, and a decrease in the provision for loan losses of $30,000, offset by a decrease in noninterest income of $176,000 and an increase in tax expense of $94,000.

Net income totaled $1,108,000 for the three months ended June 30, 2017, an increase of $51,000 or 5% from the $1,057,000 recorded for the same period in 2016. This increase was the net result of an increase in net interest income of $132,000 and a decrease in noninterest expense of $110,000, offset by a decrease in noninterest income of $86,000, an increase in the provision for loan losses of $70,000, and an increase in tax expense of $35,000.

Basic and diluted earnings per share for the six months ended June 30, 2017 were both $.59 per share compared to $.60 per share for both for the same period in 2016. Basic and diluted earnings per share for the three months ended June 30, 2017 were both $.28 per share compared to $.31 per share and $.30 per share for the same period in 2016.

The decrease in earnings per share and return on average equity for both the three and six months ending June 30, 2017 versus the same periods in 2016, despite the higher levels of net income for 2017, reflects the impact of the private placement of 548,430 common shares in April 2017.

Net Interest Margin

The net interest margin for the six months ended June 30, 2017 was 3.34% compared to 3.18% for the same period in 2016. The yield on average earning assets was 4.13% for the six months ended June 30, 2017 compared to 4.07% for the same period in 2016. The average cost of interest-bearing liabilities was .94% for the six months ended June 30, 2017 compared to 1.04% for the same period in 2016.

The net interest margin for the three months ended June 30, 2017 was 3.36% compared to 3.17% for the same period in 2016. The average yield on earning assets was 4.15% for the three months ended June 30, 2017 compared to 4.06% for the same period in 2016. The average cost of interest-bearing liabilities was .94% for the three months ended June 30, 2017 compared to 1.04% for the same period in 2016.

Assets

Total assets increased $882,000 or 0.2% to $574.3 million at June 30, 2017 compared to $573.5 million at December 31, 2016. Loans, including loans held for sale, decreased 0.7% to $456.5 million at June 30, 2017 compared to December 31, 2016. The available-for-sale investment portfolio decreased $5.2 million from December 31, 2016 to June 30, 2017.

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to 0.74% at June 30, 2017 from 1.11% at December 31, 2016. Net loan charge-offs to average loans for the six months ended June 30, 2017 of 0.07% increased from 0.04% for the six months ended June 30, 2016. The allowance for loan losses was 0.95% of total loans at June 30, 2017 and 0.94% of total loans at December 31, 2016.

Liabilities

Deposits total $460.1 million at June 30, 2017, a decrease of $9.4 million or 2.0%. The $9.4 million decrease consists of a $13.2 million decrease in time deposits and a $4.0 million decrease in money market accounts, offset by an increase in interest bearing transaction accounts of $1.1 million, a $47,000 increase in savings accounts, and a $6.7 million increase in noninterest-bearing accounts. Borrowed funds remained unchanged from December 31, 2016 at $42.0 million.

Shareholders’ Equity

Shareholders’ equity increased $9.6 million to $65.2 million at June 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 $16.77 at June 30, 2017, compared to $16.74 at December 31, 2015. Dividends declared and paid for common shareholders were $0.23 and $0.46 for the three and six months ended for both June 30, 2017 and 2016.

Elmira Savings Bank, with $574.3 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) June 30, December 31,
2017 2016 % Change
ASSETS
Cash and due from banks $ 31,542 $ 24,195 30.4%
Federal funds sold and other short-term investments 98 99 -1.0%
Total cash and cash equivalents 31,640 24,294 30.2%
Securities available for sale, at fair value 27,383 32,581 -16.0%
Securities held to maturity - fair value $8,389
at June 30, 2017 and $8,679 at December 31, 2016 8,245 8,519 -3.2%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost 9,954 9,811 1.5%
Loans held for sale 4,172 3,597 16.0%
Loans receivable 452,322 455,931 -0.8%
Less: Allowance for loan losses 4,298 4,263 0.8%
Net loans 448,024 451,668 -0.8%
Premises and equipment, net 15,248 12,634 20.7%
Bank-owned life insurance 13,783 13,592 1.4%
Accrued interest receivable 990 1,552 -36.2%
Intangible assets, net 9 20 -55.0%
Goodwill 12,320 12,320 0.0%
Other assets 2,564 2,862 -10.4%
Total assets $ 574,332 $ 573,450 0.2%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 460,140 $ 469,547 -2.0%
Borrowings 42,000 42,000 0.0%
Other liabilities 6,912 6,180 11.8%
Total liabilities 509,052 517,727 -1.7%
Shareholders' equity:
Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares
authorized; 10,000 shares issued at June 30, 2017 and at December 31, 2016 9,700 9,700 0.0%
Common stock, $1 par value; authorized 5,000,000 shares; 3,404,925 shares
issued at June 30, 2017 and 2,844,670 shares issued at December 31, 2016 3,405 2,845 19.7%
Additional paid-in capital 50,080 41,644 20.3%
Retained earnings 4,749 4,407 7.8%
Treasury stock, at cost - 93,883 shares at June 30, 2017
and 98,118 shares at December 31, 2016 (2,802) (2,907) -3.6%
Accumulated other comprehensive income 96 (19) -605.3%
Total Elmira Savings Bank shareholders' equity 65,228 55,670 17.2%
Noncontrolling interest 52 53 -1.9%
Total shareholders' equity 65,280 55,723 17.2%
Total liabilities and shareholders' equity $ 574,332 $ 573,450 0.2%

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) 2017 2016 % Change 2017 2016 % Change
Interest and dividend income:
Interest and fees on loans $ 4,789 $ 4,744 0.9% $ 9,524 $ 9,473 0.5%
Interest and dividends on securities
Taxable 228 242 -5.8% 472 527 -10.4%
Non-taxable 156 205 -23.9% 345 424 -18.6%
Total interest and dividend income 5,173 5,191 -0.3% 10,341 10,424 -0.8%
Interest expense:
Interest on deposits 720 763 -5.6% 1,450 1,497 -3.1%
Interest on borrowings 267 374 -28.6% 532 773 -31.2%
Total interest expense 987 1,137 -13.2% 1,982 2,270 -12.7%
Net interest income 4,186 4,054 3.3% 8,359 8,154 2.5%
Provision for loan losses 155 85 82.4% 195 225 -13.3%
Net interest income after provision for loan losses 4,031 3,969 1.6% 8,164 7,929 3.0%
Noninterest income:
Service fees 361 354 2.0% 740 702 5.4%
Gain on sale of loans held for sale 686 749 -8.4% 1,269 1,271 -0.2%
Gain on sale of securities - - - - 180 -100.0%
Other service fees 186 186 0.0% 362 366 -1.1%
Earnings on bank-owned life insurance 95 108 -12.0% 191 205 -6.8%
Other 24 41 -41.5% 51 65 -21.5%
Total noninterest income 1,352 1,438 -6.0% 2,613 2,789 -6.3%
Noninterest expense:
Salaries and benefits 1,902 1,969 -3.4% 3,861 3,896 -0.9%
Net occupancy 360 353 2.0% 772 722 6.9%
Equipment 306 301 1.7% 618 576 7.3%
Marketing and public relations 207 192 7.8% 407 393 3.6%
Professional fees 184 194 -5.2% 352 374 -5.9%
Other 822 882 -6.8% 1,599 1,777 -10.0%
Total noninterest expense 3,781 3,891 -2.8% 7,609 7,738 -1.7%
Income before income taxes 1,602 1,516 5.7% 3,168 2,980 6.3%
Income taxes 494 459 7.6% 981 887 10.6%
Net income 1,108 1,057 4.8% 2,187 2,093 4.5%
Less: Net income attributable to noncontrolling interest - - - - - -
Net income attibutable to Elmira Savings Bank 1,108 1,057 4.8% 2,187 2,093 4.5%
Dividend on preferred stock 225 225 0.0% 450 450 0.0%
Income available to common shareholders $ 883 $ 832 6.1% $ 1,737 $ 1,643 5.7%
Basic earnings per share $ 0.28 $ 0.31 -9.7% $ 0.59 $ 0.60 -1.7%
Diluted earnings per share $ 0.28 $ 0.30 -6.7% $ 0.59 $ 0.60 -1.7%
Weighted average shares outstanding - basic 3,154,094 2,717,506 16.1% 2,947,828 2,716,710 8.5%
Weighted average shares outstanding - diluted 3,170,013 2,734,970 15.9% 2,964,920 2,733,992 8.4%
Dividends per share $ 0.24 $ 0.23 4.3% $ 0.47 $ 0.46 2.2%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)For the Three Months Ended
June 30, 2017 June 30, 2016
ASSETS:Average Balance Interest Average Rate Average Balance Interest Average Rate
Loans$ 450,724 $ 4,789 4.24%$ 457,695 $ 4,744 4.15%
Short-term investments 459 1 0.81 691 - 0.20
Securities 47,115 383 3.25 53,202 447 3.36
Total interest-earning assets 498,298 5,173 4.15 511,588 5,191 4.06
Noninterest-earning assets 65,224 53,756
TOTAL ASSETS$ 563,522 $ 565,344
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits$ 378,473 $ 720 0.76 $ 384,003 $ 763 0.80
Borrowings 42,000 267 2.52 52,055 374 2.84
Total interest-bearing liabilities 420,473 987 0.94 436,058 1,137 1.04
Noninterest-bearing liabilities 79,670 73,662
Shareholders' equity 63,379 55,624
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$ 563,522 $ 565,344
Interest rate spread 3.21% 3.02%
Net interest income/margin $ 4,186 3.36% $ 4,054 3.17%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)For the Six Months Ended
June 30, 2017 June 30, 2016
ASSETS:Average Balance Interest Average Rate Average Balance Interest Average Rate
Loans$ 451,952 $ 9,524 4.22%$ 455,762 $ 9,473 4.16%
Short-term investments 1,153 3 0.53 536 - 0.19
Securities 48,399 814 3.37 56,416 951 3.37
Total interest-earning assets 501,504 10,341 4.13 512,714 10,424 4.07
Noninterest-earning assets 62,457 50,882
TOTAL ASSETS$ 563,961 $ 563,596
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits$ 383,352 $ 1,450 0.76 $ 379,304 $ 1,497 0.79
Borrowings 42,102 532 2.51 55,526 773 2.76
Total interest-bearing liabilities 425,454 1,982 0.94 434,830 2,270 1.04
Noninterest-bearing liabilities 78,517 73,255
Shareholders' equity 59,990 55,511
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$ 563,961 $ 563,596
Interest rate spread 3.19% 3.03%
Net interest income/margin $ 8,359 3.34% $ 8,154 3.18%

Quarter Ended
(Dollars in Thousands, Except Per Share Data) 6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Operating Data
Net income$ 1,108 $ 1,079 $ 1,042 $ 1,202 $ 1,057
Net interest income 4,186 4,173 4,155 4,211 4,054
Provision for loan losses 155 40 175 87 85
Net security gains - - - - -
Non-interest income, ex. Net security gains 1,352 1,261 1,395 1,716 1,438
Non-interest expense 3,781 3,828 3,888 3,976 3,891
Performance Statistics
Net interest margin 3.36% 3.32% 3.23% 3.24% 3.17%
Annualized return on average assets 0.79% 0.78% 0.73% 0.84% 0.75%
Annualized return on average equity 7.01% 7.74% 7.38% 8.54% 7.65%
Annualized net loan charge-offs to avg loans 0.13% 0.01% 0.20% 0.05% 0.01%
Net charge-offs (recoveries) 144 16 231 53 14
Efficiency ratio 68.3% 70.4% 70.1% 67.1% 70.8%
Per Share Data
Basic earnings per share$ 0.28 $ 0.31 $ 0.30 $ 0.36 $ 0.31
Diluted earnings per share 0.28 0.31 0.30 0.36 0.30
Dividend declared per share 0.23 0.23 0.23 0.23 0.23
Book value 16.77 16.82 16.74 16.80 16.69
Common stock price:
High 21.75 21.75 22.25 21.50 20.10
Low 19.65 20.28 18.50 18.85 18.06
Close 20.30 21.60 20.45 19.91 19.66
Weighted average common shares:
Basic 3,154 2,739 2,731 2,724 2,718
Fully diluted 3,170 2,757 2,750 2,741 2,735
End-of-period common shares:
Issued 3,405 2,850 2,845 2,839 2,832
Treasury 94 94 98 98 98
Financial Condition Data:
General
Total assets$ 574,332 $ 556,644 $ 573,450 $ 567,450 $ 574,721
Loans, net 448,024 446,223 451,668 455,251 463,104
Intangibles 12,329 12,334 12,340 12,349 12,360
Total deposits 460,140 450,376 469,547 463,414 470,462
Noninterest-bearing 77,027 71,870 70,330 72,102 70,803
Savings 70,668 70,300 70,621 69,019 69,159
NOW 86,896 86,633 85,822 86,787 121,875
Money Market 24,859 27,697 28,889 25,715 25,172
Time deposits 200,690 193,876 213,885 209,791 183,453
Total interest-bearing deposits 383,113 378,506 399,217 391,312 399,659
Shareholders' equity 65,280 56,103 55,723 55,792 55,382
Asset Quality
Non-performing assets$ 3,494 $ 4,234 $ 5,289 $ 5,345 $ 5,622
Non-performing assets to total assets 0.61% 0.76% 0.92% 0.94% 0.98%
Allowance for loan losses 4,298 4,287 4,263 4,319 4,285
Allowance for loan losses to total loans 0.95% 0.95% 0.94% 0.94% 0.92%
Allowance for loan losses to
non-performing loans 129.15% 105.93% 84.80% 85.00% 80.41%
Non-performing loans to total loans 0.74% 0.91% 1.11% 1.12% 1.15%
Capitalization
Shareholders' equity to total assets 11.37% 10.08% 9.72% 9.83% 9.64%

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

Source:Elmira Savings Bank