Elmira Savings Bank Reports Third Quarter Earnings


ELMIRA, NY--(Marketwired - Oct 23, 2013) - Elmira Savings Bank (NASDAQ: ESBK)

Highlights

  • Net income was $1,369,000 and $3,935,000 for the three and nine months ended September 30, 2013 compared to $1,398,000 and $3,914,000 for the same periods in 2012.

  • Diluted earnings per share were $.44 per share and $1.20 per share for the three and nine months ended September 30, 2013 compared to $.41 per share and $1.14 per share for the same periods in 2012. These represent increases of 7.3% and 5.3% for the three and nine months ended September 30, 2013 compared to the same periods in 2012.

  • Return on average assets was 1.05% and 1.01% for the three and nine months ended September 30, 2013 compared to 1.04% and .99% for the same periods in 2012.

  • Return on average equity was 9.55% and 8.75% for the three and nine months ended September 30, 2013 compared to 8.39% and 7.95% for the same periods in 2012.

"We are pleased to report strong operating results for the first nine months of 2013. Our redemption of $10.5 million of preferred stock at the end of first quarter of 2013, combined with increased earnings has resulted in an increase of earnings per share by 5% for the first nine months of 2013 compared to the same period in 2012," said Thomas M. Carr, President and COO. 

Net Income

Net income totaled $3,935,000 for the nine months ended September 30, 2013, an increase of $21,000 or 1% from the $3,914,000 of net income recorded for the same period in 2012. This increase of $21,000 was the net result of a reduction in tax expense of $773,000 and a reduction in the provision for loan losses of $106,000, offset by a decline in net interest income of $69,000, a decrease in noninterest income of $143,000, and an increase in noninterest expense of $646,000.

Net income totaled $1,369,000 for the three months ended September 30, 2013, a decrease of $29,000 or 2% from the $1,398,000 recorded for the same period in 2012. This decrease was the net result of a reduction in tax expense of $313,000 and a reduction in the provision for loan losses of $104,000, offset by a decline in noninterest income and net interest income of $249,000 and $40,000, respectively, and an increase of $157,000 in noninterest expense.

Basic and diluted earnings per share for the nine months ended September 30, 2013 were $1.26 per share and $1.20 per share compared to $1.19 per share and $1.14 per share for the same period in 2012. Basic and diluted earnings per share for the three months ended September 30, 2013 were $.46 per share and $.44 per share compared to $.44 per share and $.41 per share for the same period in 2012.

Net Interest Margin

The net interest margin for the nine months ended September 30, 2013 was 3.26% compared to 3.37% for the same period in 2012. The yield on average earning assets was 4.39% for the nine months ended September 30, 2013 compared to 4.70% for the same period in 2012. The average cost of interest-bearing liabilities was 1.32% for the nine months ended September 30, 2013 compared to 1.50% for the same period in 2012.

The net interest margin for the three months ended September 30, 2013 was 3.23% compared to 3.32% for the same period in 2012. The average yield on earning assets was 4.34% for the three months ended September 30, 2013 compared to 4.56% for the same period in 2012. The average cost of interest-bearing liabilities was 1.31% for the three months ended September 30, 2013 compared to 1.41% for the same period in 2012.

Assets

Total assets decreased $17.2 million or 3% to $519.7 million at September 30, 2013 compared to $536.9 million at December 31, 2012. Loans receivable increased 2% to $385.1 million at September 30, 2013 compared to December 31, 2012. The available-for-sale investment portfolio decreased $7.6 million from December 31, 2012 to September 30, 2013.

"During the first nine months of 2013, our loan originations have remained strong. We are excited about expanding our mortgage origination operation into Broome County, New York, with the opening of our loan production office on the Vestal Parkway," said Thomas M. Carr, President and COO. 

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to .86% at September 30, 2013 from 1.02% at December 31, 2012. Net loan charge-offs to average loans for the nine months ended September 30, 2013 remained low at 0.08%, consistent with the nine month period ended September 30, 2012 when net recoveries totaled $9,000. The allowance for loan losses was 0.99% of total loans at September 30, 2013 and December 31, 2012.

Liabilities

Deposits totaled $396.6 million at September 30, 2013, a decrease of $13.0 million or 3%. The $13.0 million decrease primarily consists of a $14.1 million decrease in time deposits and a $4.1 million decrease in NOW accounts, partially offset by a $2.3 million increase in money market accounts. Borrowed funds increased by $6.0 million or 11%.

Shareholders' Equity

Shareholders' equity decreased $9.6 million to $57.3 million at September 30, 2013 compared to December 31, 2012. The decrease in shareholders' equity is attributable to the Bank redeeming $10.5 million of preferred stock issued to the United States Treasury Department through the Small Business Lending Fund. The current level of shareholders' equity equates to a book value per share of $18.29 at September 30, 2013, compared to $18.50 at December 31, 2012. Dividends paid to common shareholders were $0.23 and $0.69 for the three and nine months ended September 30, 2013 compared to $0.22 and $0.64 for the same periods in 2012, representing increases of 4.5% for the three month period and 7.8% for the nine month period. 

Elmira Savings Bank, with $519.7 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 and a loan center in Tompkins County, NY; two offices in Steuben County, NY; one office in Cayuga County, NY; one office in Schuyler County; a loan center in Cortland County, NY; 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)   September 30,     December 31,        
    2013     2012     % Change  
ASSETS                      
                       
Cash and due from banks   $ 20,333     $ 39,641     -48.7 %
Federal funds sold and other short-term investments     590       684     -13.7 %
  Total cash and cash equivalents     20,923       40,325     -48.1 %
                       
Securities available for sale, at fair value     59,309       66,875     -11.3 %
Securities held to maturity - fair value $7,775 at September 30, 2013, and $5,853 at December 31, 2012    
7,601
     
5,521
   
37.7
%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost     10,280       9,178     12.0 %
                       
Loans held for sale     2,682       3,167     -15.3 %
                       
Loans receivable     385,117       378,108     1.9 %
Less: Allowance for loan losses     3,819       3,740     2.1 %
  Net loans     381,298       374,368     1.9 %
                       
Premises and equipment, net     8,311       7,947     4.6 %
Bank-owned life insurance     12,295       11,988     2.6 %
Accrued interest receivable     1,552       1,529     1.5 %
Intangible assets, net     235       316     -25.6 %
Goodwill     12,320       12,320     0.0 %
Other assets     2,941       3,402     -13.6 %
  Total assets   $ 519,747     $ 536,936     -3.2 %
                       
LIABILITIES AND SHAREHOLDERS' EQUITY                      
                       
Deposits   $ 396,600     $ 409,565     -3.2 %
Borrowings     60,000       54,000     11.1 %
Other liabilities     5,857       6,462     -9.4 %
  Total liabilities     462,457       470,027     -1.6 %
                       
Shareholders' equity:                      
Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares authorized; 13,515 shares issued at September 30, 2013 and at 24,063 shares issued at December 31, 2012    

13,215
     

23,763
   

-44.4
%
Common stock, $1 par value; authorized 5,000,000 shares; 2,522,872 shares issued at September 30, 2013 and 2,454,840 shares issued at December 31, 2012    
2,523
     
2,455
   
2.8
%
Additional paid-in capital     41,709       41,448     0.6 %
Retained earnings     2,208       868     154.4 %
Treasury stock, at cost - 116,268 shares at September 30, 2013 and 125,865 shares at December 31, 2012    
(3,327
)    
(3,548
)  
-6.2
%
Accumulated other comprehensive income     906       1,872     -51.6 %
  Total Elmira Savings Bank shareholders' equity     57,234       66,858     -14.4 %
Noncontrolling interest     56       51     9.8 %
  Total shareholders' equity     57,290       66,909     -14.4 %
  Total liabilities and shareholders' equity   $ 519,747     $ 536,936     -3.2 %
   
   
   
ELMIRA SAVINGS BANK  
CONSOLIDATED STATEMENT OF INCOME  
(unaudited)  
                             
(in thousands, except for per share data)   Three Months Ended     Nine Months Ended  
  September 30,     September 30,  
  2013   2012   % Change     2013   2012   % Change  
                                     
Interest and Dividend Income:                                    
  Interest and fees on loans   $ 4,461   $ 4,551   -2.0 %   $ 13,324   $ 13,645   -2.4 %
  Interest and dividends on securities                                    
    Taxable     419     507   -17.4 %     1,290     1,635   -21.1 %
    Non-taxable     196     179   9.5 %     572     576   -0.7 %
    Total interest and dividend income     5,076     5,237   -3.1 %     15,186     15,856   -4.2 %
                                     
Interest Expense:                                    
  Interest on deposits     805     938   -14.2 %     2,443     2,809   -13.0 %
  Interest expense on borrowings     501     489   2.5 %     1,462     1,697   -13.8 %
    Total interest expense     1,306     1,427   -8.5 %     3,905     4,506   -13.3 %
Net interest income     3,770     3,810   -1.0 %     11,281     11,350   -0.6 %
Provision for loan losses     50     154   -67.5 %     315     421   -25.2 %
Net interest income after provision for loan losses     3,720     3,656   1.8 %     10,966     10,929   0.3 %
                                     
Noninterest Income:                                    
  Service fees     353     307   15.0 %     998     945   5.6 %
  Net gain on sale of loans     817     1,072   -23.8 %     2,471     2,608   -5.3 %
  Gain on sale of securities     -     -   -       61     75   -18.7 %
  Other service fees     160     195   -17.9 %     486     512   -5.1 %
  Earnings on bank-owned life insurance     126     125   0.8 %     307     293   4.8 %
  Other     18     24   -25.0 %     55     88   -37.5 %
    Total noninterest income     1,474     1,723   -14.5 %     4,378     4,521   -3.2 %
                                     
Noninterest Expense:                                    
  Salaries and benefits     1,837     1,643   11.8 %     5,444     4,967   9.6 %
  Net occupancy     296     270   9.6 %     939     856   9.7 %
  Equipment     255     243   4.9 %     767     689   11.3 %
  Marketing and public relations     182     249   -26.9 %     533     545   -2.2 %
  Professional fees     168     144   16.7 %     544     496   9.7 %
  Other     690     722   -4.4 %     2,062     2,090   -1.3 %
    Total noninterest expense     3,428     3,271   4.8 %     10,289     9,643   6.7 %
Income before income taxes     1,766     2,108   -16.2 %     5,055     5,807   -12.9 %
Income taxes     397     710   -44.1 %     1,120     1,893   -40.8 %
Net income     1,369     1,398   -2.1 %     3,935     3,914   0.5 %
Less: Net income attributable to noncontrolling interest     -     -   -       -     -   -  
                                     
Net income attibutable to Elmira Savings Bank     1,369     1,398   -2.1 %     3,935     3,914   0.5 %
                                     
Dividend on preferred stock     268     405   -33.8 %     938     1,203   -22.0 %
Income available to common shareholders   $ 1,101   $ 993   10.9 %   $ 2,997   $ 2,711   10.5 %
                                     
                                     
Basic earnings per share   $ 0.46   $ 0.44   4.5 %   $ 1.26   $ 1.19   5.9 %
                                     
Diluted earnings per share   $ 0.44   $ 0.41   7.3 %   $ 1.20   $ 1.14   5.3 %
                                     
Weighted average shares outstanding - basic     2,387,156     2,279,794   4.7 %     2,369,962     2,269,547   4.4 %
                                     
Weighted average shares outstanding - diluted     2,494,943     2,395,579   4.1 %     2,488,271     2,371,702   4.9 %
                                     
Dividends per share   $ 0.23   $ 0.22   4.5 %   $ 0.69   $ 0.64   7.8 %
                                     

Per share data has been restated to reflect the 5% stock dividend paid on December 28, 2012.

   
   
   
ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
   
(Dollars in Thousands)   For the Three Months Ended  
    September 30, 2013     September 30, 2012  
ASSETS:   Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans   $ 386,316   $ 4,461   4.59 %   $ 371,475   $ 4,551   4.88 %
Short-term investments     2,179     -   0.04       1,610     -   0.07  
Securities     76,809     615   3.20       84,322     686   3.25  
Total interest-earning assets     465,304     5,076   4.34       457,407     5,237   4.56  
                                     
Noninterest-earning assets     53,038                 73,740            
                                     
TOTAL ASSETS   $ 518,342               $ 531,147            
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
Interest-bearing deposits   $ 336,967   $ 805   0.95     $ 347,397   $ 938   1.07  
Borrowings     56,565     501   3.47       54,217     489   3.53  
Total interest-bearing liabilities     393,532     1,306   1.31       401,614     1,427   1.41  
                                     
Noninterest-bearing liabilities     67,929                 63,444            
Shareholders' equity     56,881                 66,089            
                                     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 518,342               $ 531,147            
Interest rate spread               3.03 %               3.15 %
Net interest income/margin         $ 3,770   3.23 %         $ 3,810   3.32 %
   
   
   
ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                             
(Dollars in Thousands)   For the Nine Months Ended  
    September 30, 2013     September 30, 2012  
ASSETS:   Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans   $ 380,661   $ 13,324   4.67 %   $ 358,605   $ 13,645   5.07 %
Short-term investments     2,216     1   0.04       1,270     -   0.08  
Securities     78,616     1,861   3.16       89,748     2,211   3.29  
Total interest-earning assets     461,493     15,186   4.39       449,623     15,856   4.70  
                                     
Noninterest-earning assets     58,878                 74,606            
                                     
TOTAL ASSETS   $ 520,371               $ 524,229            
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
Interest-bearing deposits   $ 338,940   $ 2,443   0.96     $ 338,096   $ 2,809   1.11  
Borrowings     55,063     1,462   3.50       61,511     1,697   3.62  
Total interest-bearing liabilities     394,003     3,905   1.32       399,607     4,506   1.50  
                                     
Noninterest-bearing liabilities     66,238                 59,066            
Shareholders' equity     60,130                 65,556            
                                     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 520,371               $ 524,229            
Interest rate spread               3.07 %               3.20 %
Net interest income/margin         $ 11,281   3.26 %         $ 11,350   3.37 %
   
   
   
    Quarter Ended  
(Dollars in Thousands, Except Per Share Data)   9/30/2013     6/30/2013     3/31/2013     12/31/2012     9/30/2012  
Operating Data                                      
  Net income   $ 1,369     1,374     $ 1,192     $ 1,299     $ 1,398  
  Net interest income     3,770     3,712       3,799       3,739       3,810  
  Provision for loan losses     50     85       180       42       154  
  Net security gains     -     -       61       -       -  
  Non-interest income, ex. Net security gains     1,474     1,419       1,424       1,529       1,723  
  Non-interest expense     3,428     3,485       3,376       3,301       3,271  
Performance Statistics                                      
  Net interest margin     3.23 %   3.24 %     3.32 %     3.25 %     3.32 %
  Annualized return on average assets     1.05 %   1.07 %     0.91 %     0.97 %     1.04 %
  Annualized return on average equity     9.55 %   9.67 %     7.26 %     7.72 %     8.39 %
  Annualized net loan charge-offs to avg loans     0.04 %   0.00 %     0.21 %     0.03 %     -0.02 %
  Net charge-offs (recoveries)     40     -       196       31       (19 )
  Efficiency ratio     65.4 %   67.9 %     63.9 %     62.7 %     59.1 %
Per Share Data                                      
  Basic earnings per share   $ 0.46     0.46     $ 0.34     $ 0.39     $ 0.44  
  Diluted earnings per share     0.44     0.44       0.32       0.37       0.42  
  Dividend declared per share     0.23     0.23       0.23       0.22       0.22  
  Book value     18.29     18.10       18.13       18.50       18.52  
  Common stock price:                                      
    High     25.00     26.32       25.35       23.65       19.04  
    Low     21.23     20.00       22.74       18.48       17.50  
    Close     24.28     21.55       25.35       22.74       18.86  
  Weighted average common shares:                                      
    Basic     2,387     2,382       2,335       2,297       2,280  
    Fully diluted     2,495     2,492       2,471       2,424       2,396  
  End-of-period common shares:                                      
    Issued     2,523     2,519       2,510       2,455       2,438  
    Treasury     116     116       116       126       126  
                                       
Share and per share data has been restated to reflect the 5% stock dividend paid on December 28, 2012.  
                                       
Financial Condition Data:                                      
General                                      
  Total assets   $ 519,747     516,137     $ 510,915     $ 536,936     $ 534,159  
  Loans, net     381,298     380,252       370,753       374,368       369,851  
  Intangibles     12,555     12,582       12,609       12,636       12,667  
  Total deposits     396,600     396,993       395,091       409,565       406,216  
    Noninterest-bearing     62,616     61,018       58,118       61,444       58,760  
    Savings     60,710     61,918       60,177       59,034       56,115  
    NOW     72,076     71,894       71,472       76,133       73,079  
    Money Market     22,465     20,826       19,222       20,131       23,082  
    Time deposits     178,733     181,337       186,102       192,823       195,180  
    Total interest-bearing deposits     333,984     335,975       336,973       348,121       347,456  
  Shareholders' equity     57,290     56,745       56,677       66,609       66,543  
Asset Quality                                      
  Non-performing assets   $ 3,302     3,575     $ 3,826     $ 3,986     $ 3,980  
  Non-performing assets to total assets     0.64 %   0.69 %     0.75 %     0.74 %     0.75 %
  Allowance for loan losses     3,819     3,809       3,724       3,740       3,729  
  Allowance for loan losses to total loans     0.99 %   0.99 %     0.99 %     0.99 %     1.00 %
  Allowance for loan losses to non-performing loans     115.66 %   106.55 %     100.95 %     96.87 %     97.29 %
  Non-performing loans to total loans     0.86 %   0.93 %     0.99 %     1.02 %     1.03 %
Capitalization                                      
  Shareholders' equity to total assets     11.02 %   10.99 %     11.09 %     12.41 %     12.46 %
                                         

Contact Information:

For further information contact:
Thomas M. Carr
President & COO
Elmira Savings Bank
333 East Water Street
Elmira, New York 14901
(607) 735-8660