ISLANDIA, NY--(Marketwire - Jan 19, 2012) - Empire National Bank (
- Core Earnings for the quarter ended December 31, 2011 of $635 thousand, an increase from $109 thousand for the quarter ended December 31, 2010. Core earnings are measured as pre-tax income excluding any gains or losses on the sale of investment securities and a one-time accelerated depreciation expense associated with the conversion of the bank's online banking platform.
- Core Earnings for the year ended December 31, 2011 of $1.9 million, an increase from $159 thousand for the year ended December 31, 2010.
- Net Income for the quarter ended December 31, 2011 of $1.4 million, an increase of $265 thousand from $1.2 million for the quarter ended December 31, 2010.
- Net Income for the year ended December 31, 2011 of $4.6 million, an increase of $2.7 million from $1.9 million for the year ended December 31, 2010.
- Total Assets of $340.3 million at December 31, 2011, an increase of $11.5 million, or 3.5%, compared to the prior year end.
- Total Loans outstanding of $212.9 million at December 31, 2011, a decrease of $5.6 million, or 2.6%, compared to the prior year end.
- Strong Asset Quality, with an allowance for loan losses comprising 1.98% of total loans at December 31, 2011, and total non-performing loans comprising 1.03% of total loans at December 31, 2011 as compared to 1.02% at December 31, 2010.
- "Well Capitalized" regulatory capital levels, as of December 31, 2011
- Tier 1 leverage capital ratio of 10.79%
- Tier 1 risk-based capital ratio of 15.34%
- Total risk-based capital ratio of 16.60%
- Book Value Per Share of $8.60, as of December 31, 2011, a 20.9% increase as compared to the prior year-end.
Douglas C. Manditch, Chairman and Chief Executive Officer stated, "We are very pleased with the bank's financial results for 2011. While we had a substantial increase in net income from the previous year, we are particularly proud of our continued growth in core earnings. Additionally, asset quality remains strong at year end, reflective of our diligent management of the commercial loan portfolio based upon prudent credit guidelines."
"Our bank is positioned well with strong capital levels, strong asset quality and a desire to continue supporting Long Island businesses with their financing needs. We have significant additional lending capacity available to support healthy small to mid-sized businesses in our market, and we look forward to pursuing local lending opportunities in 2012," Manditch added.
Earnings
Net income was $4.6 million, or $1.09 per share, for the year ended 2011, compared to $1.9 million, or $0.46 per share for the year ended 2010, an increase of $2.7 million and $0.63 per share, respectively. The increase in net income is primarily attributable to an increase in net interest income of $1.0 million, an increase in net securities gains of $333 thousand, a $719 thousand tax benefit associated with the partial reversal of our deferred tax asset valuation allowance coupled with a decrease in the bank's provision for loan losses of $772 thousand. Total other expenses increased by $249 thousand to $11.0 million for the year ended 2011.
The increase in net interest income of $1.0 million in 2011, as compared to 2010, is primarily attributable to an increase in the average balance of interest earning assets of $30.9 million, primarily in the securities portfolio. The bank's net interest margin was 3.82% for the year ended December 31, 2011, a decrease of 3 basis points from the same period in 2010, due to a decrease in the bank's yield on interest bearing assets of 23 basis points from 4.84% to 4.61% in 2011, which was partially offset by a decrease in the bank's cost of interest bearing liabilities of 23 basis points from 1.24% to 1.01% in 2011.
The bank's efficiency ratio decreased by 6.4% from 92.0% to 86.1% as the bank maintained its high quality of service for an increasing number of customers. "We continue to improve the efficiencies with which we deliver personalized customer service and the quality of our banking products. In the first half of 2012 we expect to complete the conversion of our online banking system to a more user-friendly platform for both businesses and consumers," remarked Thomas Buonaiuto, President and Chief Operating Officer.
Balance Sheet and Asset Quality
Total assets were $340.3 million at December 31, 2011, reflecting a $11.5 million increase from the prior year end. The growth in total assets was primarily attributable to an increase of $21.8 million in securities available for sale to $114.5 million at December 31, 2011. Total loans decreased by $5.6 million to $212.9 million at December 31, 2011. The average balance of loans increased by $4.1 million, from $211.7 million for the year ended December 31, 2010 to $215.8 million in 2011. The decrease in loans at year-end was driven by historically low utilization rates on revolving credit facilities and weak demand as borrowers remain cautious about current and future economic conditions. Securities available for sale increased as a result of management's intent to maximize total earning assets while diversifying its asset mix.
The bank's non-performing assets continue to consist solely of two restructured loans. One of these loans, valued at $2.1 million has resumed making normal monthly payments. The other loan, valued at $56 thousand continues to make payments under restructured terms. The bank's non-performing loans were 1.03% of total loans at December 31, 2011. The bank's asset quality ratios have consistently compared well with peers. The bank maintained $4.2 million in its allowance for loan losses at December 31, 2011, which, as a result of the decrease in loans at year-end, represented an increase to 1.98% of total loans from 1.96% as of the prior quarter-end.
Total deposits increased in 2011 by $12.8 million, or 5.1%, from $252.2 million to $265.0 million as deposits outpaced our loan growth. At December 31, 2011, the bank's loan to deposit ratio was 80.3%. Demand deposits, which represent a valuable funding source, increased 20.5% from $38.0 million in 2010 to $45.8 million in 2011. Average demand deposits increased $7.8 million or 19.8%, from $39.3 million in 2010 to $47.1 million in 2011. Significant increases in deposit growth and market share occurred in all three of the bank's branch locations: Islandia, Shirley and Port Jefferson Station. Savings, NOW and money market deposits increased $2.6 million, or 2.1%, to $126.3 million at December 31, 2011. Certificates of deposit of $100,000 or more decreased by $290 thousand, while other time deposits increased by $2.8 million.
Stockholders' equity grew from $30.0 million to $37.4 million during 2011. The net increase was the result of net income of $4.6 million, an increase in accumulated other comprehensive income of $2 million, which reflects the increase in the unrealized gain in the securities portfolio at December 31, 2011 and the injection of $579 thousand of new capital in connection with the bank's current offering of common stock. At December 31, 2011, the bank was 'well capitalized' as defined by OCC regulation, with leverage, Tier 1 risk-based and total risk-based capital ratios of 10.79%, 15.34% and 16.60%, respectively.
Opportunities and Challenges
"Our business model is very straightforward, and we believe that it has proven quite effective. We focus on providing the highest quality of customer service, with a sense of urgency. With over 140,000 businesses on Long Island, we believe that our focus and dedication to quality service will enable us to increase our market share and retain our customers at a high percentage," commented Thomas M. Buonaiuto, President and Chief Operating Officer.
| Balance Sheet (unaudited) | |||||||||
| (dollars in thousands, except share and per share amounts) | |||||||||
| December 31, | December 31, | ||||||||
| 2011 | 2010 | ||||||||
| ASSETS | |||||||||
| Cash and cash equivalents | $ | 4,388 | $ | 7,853 | |||||
| Securities available for sale, at fair value | 114,502 | 92,696 | |||||||
| Securities, restricted | 3,002 | 3,263 | |||||||
| Loans, net | 208,660 | 214,272 | |||||||
| Premises and equipment, net | 6,850 | 7,590 | |||||||
| Other assets and accrued interest receivable | 2,921 | 3,128 | |||||||
| Total Assets | $ | 340,323 | $ | 328,802 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Demand Deposits | $ | 45,765 | $ | 38,024 | |||||
| Savings, N.O.W. and money market deposits | 126,335 | 123,727 | |||||||
| Certificates of deposit of $100,000 or more and other time deposits | 92,920 | 90,439 | |||||||
| Total Deposits | 265,020 | 252,190 | |||||||
| Short-term borrowings | 34,449 | 44,381 | |||||||
| Other liabilities and accrued expenses | 3,422 | 2,266 | |||||||
| Total Liabilities | 302,891 | 298,837 | |||||||
| Total Stockholders' Equity | 37,432 | 29,965 | |||||||
| Total Liabilities and Stockholders' Equity | $ | 340,323 | $ | 328,802 | |||||
| Selected Financial Data (unaudited) | |||||||||
| Asset Quality | |||||||||
| Allowance for Loan Losses to Total Loans | 1.98 | % | 1.93 | % | |||||
| Non-performing Loans to Total Loans | 1.03 | % | 1.02 | % | |||||
| Non-performing Loans to Total Assets | 0.65 | % | 0.68 | % | |||||
| Capital Ratios (unaudited) | |||||||||
| Tier 1 Leverage Ratio | 10.79 | % | 9.47 | % | |||||
| Tier 1 Risk-Based Capital Ratio | 15.34 | % | 13.31 | % | |||||
| Total Risk-Based Capital Ratio | 16.60 | % | 14.56 | % | |||||
| Book Value per share | $ | 8.60 | $ | 7.11 | |||||
| Statements of Operations (unaudited) | |||||||||||||||||
| (In thousands, except share and per share amounts) | |||||||||||||||||
| For the three months ended | For the year ended | ||||||||||||||||
| December 31, | December 31, | December 31, | December 31, | ||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Interest income | $ | 3,905 | $ | 3,623 | $ | 14,765 | $ | 13,999 | |||||||||
| Interest expense | 644 | 677 | 2,516 | 2,844 | |||||||||||||
| Net interest income | 3,261 | 2,946 | 12,249 | 11,155 | |||||||||||||
| Provision for loan losses | - | 164 | - | 772 | |||||||||||||
| Net interest income after provision for loan losses | 3,261 | 2,782 | 12,249 | 10,383 | |||||||||||||
| Net securities gains | 186 | 1,054 | 2,119 | 1,786 | |||||||||||||
| Other income | 141 | 133 | 511 | 516 | |||||||||||||
| Other expense | 2,879 | 2,806 | 10,989 | 10,740 | |||||||||||||
| Income before income taxes | 709 | 1,163 | 3,890 | 1,945 | |||||||||||||
| Income tax benefit | 719 | - | 719 | - | |||||||||||||
| Net Income | $ | 1,428 | $ | 1,163 | $ | 4,609 | $ | 1,945 | |||||||||
| Basic earnings per share | $ | 0.34 | $ | 0.28 | $ | 1.09 | $ | 0.46 | |||||||||
| Diluted earnings per share | $ | 0.34 | $ | 0.28 | $ | 1.09 | $ | 0.46 | |||||||||
| Selected Financial Data (unaudited) | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Return on Average Assets | 1.67 | % | 1.40 | % | 1.39 | % | 0.64 | % | |||||||||
| Return on Average Equity | 15.81 | % | 14.28 | % | 13.92 | % | 6.33 | % | |||||||||
| Net Interest Margin | 3.95 | % | 3.70 | % | 3.82 | % | 3.85 | % | |||||||||
| Efficiency Ratio | 84.62 | % | 91.17 | % | 86.12 | % | 92.02 | % | |||||||||
| Core Earnings | $ | 635 | $ | 109 | $ | 1,883 | $ | 159 | |||||||||
About Empire National Bank
Empire National Bank specializes in serving the financial needs of small and medium sized businesses, professionals, nonprofit organizations, real estate investors, and consumers. The Bank has three banking offices located in Islandia, Shirley and Port Jefferson Station. Our bankers take pride in understanding the needs of each and every customer so the bank can deliver the highest quality service with a sense of urgency.
This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate" or "continue," or comparable terminology, are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within Empire National Bank's control. The forward looking statements included in this report are made only as of the date of this report. We have no intention, and do not assume any obligation, to update these forward looking statements.
Contact Information:
Contact:
William Franz
VP, Director of Marketing & Investor Relations
(631) 348-4444