Elmira Savings Bank Reports First Quarter Earnings

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News Desk 2018

Apr 25, 2017 at 4:00 PM 31

Elmira Savings Bank Reports First Quarter Earnings

ELMIRA, N.Y., April 25, 2017 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ: ESBK )

Highlights

Net income was $1,079,000 for the three months ended March 31, 2017 compared to $1,036,000 for the same period in 2016.

Diluted earnings per share were $.31 per share for the three months ended March 31, 2017 compared to $.30 per share for the same period in 2016.

Return on average assets was .78% for the three months ended March 31, 2017 and .74% for the same period in 2016.

Return on average equity was 7.74% for the three months ended March 31, 2017 compared to 7.52% for the same period in 2016.

“We are pleased with our year-over-year improvement in earnings, increasing our return on equity ratio and earnings per share,” said Thomas M. Carr, President and CEO. Carr continued, “This earnings improvement was highlighted by an increase in our net interest margin which has risen by 13 basis points year-to-year to 3.32% for the first quarter of 2017.”

Net Income

Net income totaled $1,079,000 for the three months ended March 31, 2017, an increase of $43,000 or 4.2% from the $1,036,000 recorded for the same period in 2016. This increase was the net result of an increase in net interest income of $73,000, a decrease in noninterest expense of $19,000, and a decrease in the provision for loan losses of $100,000, offset by a decrease in noninterest income of $90,000 and an increase in tax expense of $59,000.

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

Net Interest Margin

The net interest margin for the three months ended March 31, 2017 was 3.32% compared to 3.19% for the first quarter of 2016. The yield on average earning assets was 4.11% for the three months ended March 31, 2017 compared to 4.07% for the same period in 2016. The average cost of interest-bearing liabilities was .93% for the three months ended March 31, 2017 compared to 1.04% for the three months ended March 31, 2016.

Assets

Total assets decreased $16.8 million or 2.9% to $556.6 million at March 31, 2017 compared to $573.5 million at December 31, 2016. Loans receivable decreased 1.2% to $450.5 million at March 31, 2017 compared to December 31, 2016. The available-for-sale investment portfolio decreased $2.1 million from December 31, 2016 to March 31, 2017, and cash and cash equivalents decreased by $7.7 million from December 31, 2016 to March 31, 2017.

Nonperforming Loans

Our nonperforming loans to total loans ratio was .91% at March 31, 2017 and 1.10% at December 31, 2016. Net loan charge-offs to average loans for the three months ended March 31, 2017 of .01% decreased from .07% for the three months ended March 31, 2016. The allowance for loan losses was .95% of total loans at March 31, 2017 and .94% at December 31, 2016.

Liabilities

Deposits totaled $450.4 million at March 31, 2017, a decrease of $19.2 million or 4.1% from the December 31, 2016 total of $469.5 million. Borrowed funds remained unchanged from December 31, 2016 at $42.0 million.

Shareholders’ Equity

Shareholders’ equity increased $380,000 to $56.1 million at March 31, 2017 compared to December 31, 2016. The current level of shareholders’ equity equates to a book value per share of $16.82 at March 31, 2017, compared to $16.74 at December 31, 2016. Dividends paid to common shareholders were $0.23 for the three months ended both March 31, 2017 and 2016.

Elmira Savings Bank, with $556.6 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 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; 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)	March 31,			December 31,
		2017			2016		% Change
ASSETS

Cash and due from banks	$	16,462		$	24,195		-32.0	%
Federal funds sold and other short-term investments		98			99		-1.0	%
Total cash and cash equivalents		16,560			24,294		-31.8	%

Securities available for sale, at fair value		30,468			32,581		-6.5	%
Securities held to maturity - fair value $8,515
at March 31, 2017 and $8,679 at December 31, 2016		8,374			8,519		-1.7	%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost		9,689			9,811		-1.2	%

Loans held for sale		1,186			3,597		-67.0	%

Loans receivable		450,510			455,931		-1.2	%
Less: Allowance for loan losses		4,287			4,263		0.6	%
Net loans		446,223			451,668		-1.2	%

Premises and equipment, net		14,349			12,634		13.6	%
Bank-owned life insurance		13,688			13,592		0.7	%
Accrued interest receivable		1,057			1,552		-31.9	%
Intangible assets, net		14			20		-30.0	%
Goodwill		12,320			12,320		0.0	%
Other assets		2,716			2,862		-5.1	%
Total assets	$	556,644		$	573,450		-2.9	%

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits	$	450,376		$	469,547		-4.1	%
Borrowings		42,000			42,000		0.0	%
Other liabilities		8,165			6,180		32.1	%
Total liabilities		500,541			517,727		-3.3	%

Shareholders' equity:
Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares
authorized; 10,000 shares issued at March 31, 2017 and at December 31, 2016		9,700			9,700		0.0	%
Common stock, $1 par value; authorized 5,000,000 shares; 2,849,813 shares
issued at March 31, 2017 and 2,844,670 shares issued at December 31, 2016		2,850			2,845		0.2	%
Additional paid-in capital		41,677			41,644		0.1	%
Retained earnings		4,627			4,407		5.0	%
Treasury stock, at cost - 93,883 shares at March 31, 2017
and 98,118 shares at December 31, 2016		(2,802	)		(2,907	)	-3.6	%
Accumulated other comprehensive loss		(1	)		(19	)	-94.7	%
Total Elmira Savings Bank shareholders' equity		56,051			55,670		0.7	%
Noncontrolling interest		52			53		-1.9	%
Total shareholders' equity		56,103			55,723		0.7	%
Total liabilities and shareholders' equity	$	556,644		$	573,450		-2.9	%

ELMIRA SAVINGS BANK
CONSOLIDATED STATEMENT OF INCOME
(unaudited)

	Three Months Ended
	March 31,
(in thousands, except for per share data)		2017		2016	% Change

Interest and dividend income:
Interest and fees on loans	$	4,735	$	4,729	0.1	%
Interest and dividends on securities
Taxable		244		285	-14.4	%
Non-taxable		189		219	-13.7	%
Total interest and dividend income		5,168		5,233	-1.2	%

Interest expense:
Interest on deposits		730		734	-0.5	%
Interest on borrowings		265		399	-33.6	%
Total interest expense		995		1,133	-12.2	%
Net interest income		4,173		4,100	1.8	%
Provision for loan losses		40		140	-71.4	%
Net interest income after provision for loan losses		4,133		3,960	4.4	%

Noninterest income:
Service fees		379		348	8.9	%
Gain on sale of loans held for sale		583		522	11.7	%
Gain on sale of securities		-		180	-100.0	%
Other service fees		176		180	-2.2	%
Earnings on bank-owned life insurance		96		97	-1.0	%
Other		27		24	12.5	%
Total noninterest income		1,261		1,351	-6.7	%

Noninterest expense:
Salaries and benefits		1,959		1,927	1.7	%
Net occupancy		412		369	11.7	%
Equipment		312		275	13.5	%
Marketing and public relations		200		201	-0.5	%
Professional fees		168		180	-6.7	%
Other		777		895	-13.2	%
Total noninterest expense		3,828		3,847	-0.5	%
Income before income taxes		1,566		1,464	7.0	%
Income taxes		487		428	13.8	%
Net income		1,079		1,036	4.2	%
Less: Net income attributable to noncontrolling interest		-		-	-

Net income attributable to Elmira Savings Bank		1,079		1,036	4.2	%

Dividend on preferred stock		225		225	0.0	%
Income available to common shareholders	$	854	$	811	5.3	%


Basic earnings per share	$	0.31	$	0.30	3.3	%

Diluted earnings per share	$	0.31	$	0.30	3.3	%

Weighted average shares outstanding - basic		2,739,157		2,715,915	0.9	%

Weighted average shares outstanding - diluted		2,757,422		2,733,014	0.9	%

Dividends per share	$	0.23	$	0.23	0.0	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES

(Dollars in Thousands)	For the Three Months Ended
	March 31, 2017						March 31, 2016
ASSETS:	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
Loans receivable	$	453,195	$	4,735	4.20	%	$	453,828	$	4,729	4.17	%
Federal funds sold and other short-term investments		1,887		2	0.45			381		-	0.16
Securities		49,696		431	3.48			59,630		504	3.38
Total interest-earning assets		504,778		5,168	4.11			513,839		5,233	4.07

Noninterest-earning assets		59,626						48,009

TOTAL ASSETS	$	564,404					$	561,848

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits	$	388,286	$	730	0.76		$	374,605	$	734	0.79
Borrowings		42,205		265	2.51			58,997		399	2.68
Total interest-bearing liabilities		430,491		995	0.93			433,602		1,133	1.04

Noninterest-bearing liabilities		77,351						72,848
Shareholders' equity		56,562						55,398

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	564,404					$	561,848
Interest rate spread					3.18	%					3.03	%
Net interest income/margin			$	4,173	3.32	%			$	4,100	3.19	%

				Quarter Ended
(Dollars in Thousands, Except Per Share Data)				3/31/2017			12/31/2016			9/30/2016			6/30/2016			3/31/2016
Operating Data
	Net income		$	1,079		$	1,042		$	1,202		$	1,057		$	1,036
	Net interest income			4,173			4,155			4,211			4,054			4,100
	Provision for loan losses			40			175			87			85			140
	Net security gains			-			-			-			-			180
	Non-interest income, ex. Net security gains			1,261			1,395			1,716			1,438			1,171
	Non-interest expense			3,828			3,888			3,976			3,891			3,847
Performance Statistics
	Net interest margin			3.32	%		3.23	%		3.24	%		3.17	%		3.19	%
	Annualized return on average assets			0.78	%		0.73	%		0.84	%		0.75	%		0.74	%
	Annualized return on average equity			7.74	%		7.38	%		8.54	%		7.65	%		7.52	%
	Annualized net loan charge-offs to avg loans			0.01	%		0.20	%		0.05	%		0.01	%		0.07	%
	Net charge-offs			16			231			53			14			74
	Efficiency ratio			70.4	%		70.1	%		67.1	%		70.8	%		70.6	%
Per Share Data
	Basic earnings per share		$	0.31		$	0.30		$	0.36		$	0.31		$	0.30
	Diluted earnings per share			0.31			0.30			0.36			0.30			0.30
	Dividend declared per share			0.23			0.23			0.23			0.23			0.23
	Book value			16.82			16.74			16.80			16.69			16.59
	Common stock price:
		High		21.75			22.25			21.50			20.10			20.55
		Low		20.28			18.50			18.85			18.06			16.83
		Close		21.60			20.45			19.91			19.66			18.01
	Weighted average common shares:
		Basic		2,739			2,731			2,724			2,718			2,716
		Fully diluted		2,757			2,750			2,741			2,735			2,733
	End-of-period common shares:
		Issued		2,850			2,845			2,839			2,832			2,828
		Treasury		94			98			98			98			98


Financial Condition Data:
General
	Total assets		$	556,644		$	573,450		$	567,450		$	574,721		$	560,020
	Loans, net			446,223			451,668			455,251			463,104			452,718
	Intangibles			12,334			12,340			12,349			12,360			12,371
	Total deposits			450,376			469,547			463,414			470,462			443,552
		Noninterest-bearing		71,870			70,330			72,102			70,803			65,165
		Savings		70,300			70,621			69,019			69,159			67,295
		NOW		86,633			85,822			86,787			121,875			105,094
		Money Market		27,697			28,889			25,715			25,172			25,281
		Time deposits		193,876			213,885			209,791			183,453			180,717
		Total interest-bearing deposits		378,506			399,217			391,312			399,659			378,387
	Shareholders' equity			56,103			55,723			55,792			55,382			55,039
Asset Quality
	Non-performing assets		$	4,234		$	5,289		$	5,345		$	5,622		$	5,328
	Non-performing assets to total assets			0.76	%		0.92	%		0.94	%		0.98	%		0.95	%
	Allowance for loan losses			4,287			4,263			4,319			4,285			4,214
	Allowance for loan losses to total loans			0.95	%		0.94	%		0.94	%		0.92	%		0.92	%
	Allowance for loan losses to
		non-performing loans		105.93	%		84.80	%		85.00	%		80.41	%		83.69	%
	Non-performing loans to total loans			0.91	%		1.11	%		1.12	%		1.15	%		1.10	%
Capitalization
	Shareholders' equity to total assets			10.08	%		9.72	%		9.83	%		9.64	%		9.83	%

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

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