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Elmira Savings Bank Reports 2017 Earnings

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

Source: Elmira Savings Bank NY (The)