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