ISLANDIA, NY--(Marketwired - Jul 25, 2013) - Empire National Bank (
- Total assets of $454.6 million, a $32.9 million, or 7.8%, increase from June 30, 2012
- Total loans of $254.6 million, a $22.9 million, or 9.9%, increase from June 30, 2012
- Demand deposits of $164.4 million, a $1.7 million, or 1.0%, increase from June 30, 2012
- Earnings before income taxes for the quarter (excluding the impact of net gains on sales of investment securities) ended June 30, 2013 of $564 thousand; an increase of $188 thousand, or 50.0%, over the quarter ended June 30, 2012
- Earnings before income taxes for the six months (excluding the impact of net gains on sales of investment securities) ended June 30, 2013 of $1.0 million; an increase of $285 thousand, or 39.0%, over the six months ended June 30, 2012
- Net income for the quarter ended June 30, 2013 of $312 thousand
- Net income for the six months ended June 30, 2013 of $563 thousand
- Solid asset quality with a ratio of non-performing loans to total loans of 1.00%
- "Well capitalized" regulatory capital levels, as of June 30, 2013:
- Tier 1 leverage capital ratio of 9.41%
- Tier 1 risk-based capital ratio of 13.93%
- Total risk-based capital ratio of 15.18%
Douglas C. Manditch, Chairman and Chief Executive Officer stated, "We are pleased with our recent spike in loan originations, increase in low-cost funding, solid asset quality and well capitalized position. Our business and personal demand deposits grew by 9.3% to approximately $70 million as compared to the same period in the prior year. We are optimistic about our continued growth opportunities for 2013 and beyond as we prepare to open our new branch office in Nassau County, located at 170 Old Country Road in Mineola. We also expect to complete our holding company reorganization in the coming months, which was approved overwhelmingly by our shareholders at our 2013 annual meeting."
Earnings for the Second Quarter Ended June 30, 2013
Net income was $312 thousand, or $0.07 per share, for the second quarter of 2013, compared to $2.7 million, or $0.63 per share, for the second quarter of 2012, representing a decrease of $2.4 million, or $0.56 per share. This reduction in net income is largely attributable to the decrease of approximately $1.2 million in net gains on sales of securities as compared to the same period last year. Additionally, tax benefits recognized during the second quarter of 2012, as compared to the provision for income taxes during the second quarter of 2013, reduced net income by approximately $1.5 million.
As compared to the second quarter of 2012, total other income decreased approximately $1.0 million, net interest income decreased by $55 thousand, and total other expenses decreased by approximately $128 thousand. The decrease in total other income was attributable to the decrease in net securities gains of $1.2 million for the second quarter of 2013 as compared to the second quarter of 2012. Net interest income decreased $55 thousand reflecting the impact of lower asset yields partially offset by the growth in our average loan and securities portfolio. Total interest income decreased $193 thousand partially offset by the decrease in total interest expense of $138 thousand. Average earning assets increased to $423.9 million as of June 30, 2013, an increase of $35.8 million or 9.2%. The bank's net interest margin was 3.27% for the quarter ended June 30, 2013. The decrease in other expenses was largely attributable to reduced expenses relative to our FDIC insurance. No provision for loan losses was recorded in the second quarter of 2013 or 2012.
Earnings for the Six Months Ended June 30, 2013
Net income for the six months ended June 30, 2013 was $563 thousand, or $0.13 per share, compared to $3.1 million, or $0.71 per share, for the six months ended June 30, 2012, a decrease of $2.5 million and $0.58 per share, respectively. As previously noted, this reduction in net income was largely attributable to the decrease of approximately $1.2 million in net gains on sales of securities over the first six months of the year as compared to the same period last year. Tax benefits recognized in the first six months of 2012 as compared to the provision for income taxes, equal to 44.8% of income before taxes in the first six months of 2013, resulted in a reduction to net income of approximately $1.7 million.
As compared to the first six months of 2012, total other income decreased approximately $931 thousand, net interest income increased by $246 thousand, and total other expenses increased by approximately $188 thousand. The decrease in total other income was attributable to the decrease in net securities gains of $1.2 million for the first six months of 2013 as compared to the first six months of 2012. Partially offsetting this reduction was approximately $176 thousand in professional practice revenues recognized in the first six months of 2013. For the six months ended June 30, 2013, the bank's net interest income was approximately $7.0 million, an increase of $246 thousand, or 3.7%, as compared to net interest income of approximately $6.7 million for the six months ended June 30, 2012. Net interest income reflects the growth in average volume of loans and investment securities partially offset by the impact of lower asset yields in the current year. Total interest income decreased $98 thousand offset by the decrease in total interest expense of $344 thousand. Average earning assets increased to $426.2 million as of June 30, 2013, an increase of $59.8 million, or 16.3%. The bank's net interest margin was 3.29% for the six months ended June 30, 2013 as compared to 3.68% for the first six months of 2012. The increase in other expenses resulted primarily from expenses associated with expansion into new markets and services. Salaries and benefits increased $158 thousand, or 5.3%, over the first six months of the prior year as the bank staffed to meet these new demands. Costs relative to servicing our professional practice clients also increased in the current year. No provision for loan losses was recorded in the first six months of 2013 or 2012. Our effective income tax rate for the six months ended June 30, 2013 was approximately 44.8%, which reflects our blended federal and state income tax rates.
Balance Sheet and Asset Quality
Total assets were $454.6 million at June 30, 2013, an increase of $32.9 million year-over-year, or 7.8%, which was primarily attributable to an increase in securities available for sale of $37.9 million, or 27.2%, and an increase in outstanding loan balances of $22.9 million, or 9.9%. Management remains confident in our asset quality. The bank's ratio of non-performing loans to total loans remains at 1.00% as of June 30, 2013 with the allowance for loan losses at 1.67% of total loans.
Total deposits were $370.9 million at June 30, 2013, a year-over-year decrease of $6.4 million, or 1.7%. Demand deposits increased $1.7 million, or 1.0%, year-over-year. Average demand deposits for the first six months of 2013 totaled $165.9 million, as compared to average demand deposits of $94.1 million over the same period in 2012.
Stockholders' equity decreased from $41.3 million to $37.7 million from June 30, 2012 to June 30, 2013, primarily as a result of a decrease in accumulated comprehensive income caused by the increase in interest rates. At June 30, 2013, the bank was "well capitalized" as defined by OCC regulation, with leverage, Tier 1 risk-based and total risk-based capital ratios of 9.41%, 13.93% and 15.18%, respectively.
Opportunities and Challenges
"The recent steepening of the yield curve, combined with our increased sales efforts, has sparked an increase in our loan pipeline. We have indicated that our goal is to apply a balanced approach to managing the bank; albeit challenging times from an interest rate perspective, we believe that the steepening of the yield curve will have a positive impact as we continue to grow our balance sheet," commented Thomas M. Buonaiuto, President and Chief Operating Officer.
| Balance Sheet (unaudited) | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| June 30, | March 31, | December 31, | June 30, | ||||||||||||||
| 2013 | 2013 | 2012 | 2012 | ||||||||||||||
| ASSETS | |||||||||||||||||
| Total cash and cash equivalents | $ | 8,574 | $ | 4,723 | $ | 4,908 | $ | 42,158 | |||||||||
| Securities available for sale, at fair value | 177,011 | 186,245 | 180,202 | 139,092 | |||||||||||||
| Securities held to maturity | 300 | 300 | - | ||||||||||||||
| Securities, restricted | 3,909 | 3,122 | 3,183 | 1,697 | |||||||||||||
| Loans, net | 250,349 | 235,727 | 239,211 | 227,529 | |||||||||||||
| Premises and equipment, net | 6,569 | 6,268 | 6,412 | 6,732 | |||||||||||||
| Other assets and accrued interest receivable | 7,884 | 5,182 | 4,483 | 4,524 | |||||||||||||
| Total Assets | $ | 454,596 | $ | 441,567 | $ | 438,399 | $ | 421,732 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||
| Demand Deposits | $ | 164,387 | $ | 164,810 | $ | 172,165 | $ | 162,659 | |||||||||
| Savings, N.O.W. and money market deposits | 144,070 | 142,253 | 129,451 | 137,484 | |||||||||||||
| Certificates of deposit of $100,000 or more and other time deposits | 62,428 | 61,033 | 61,742 | 77,111 | |||||||||||||
| Total Deposits | $ | 370,885 | $ | 368,096 | $ | 363,358 | $ | 377,254 | |||||||||
| Short-term borrowings | 43,083 | 29,065 | 30,109 | - | |||||||||||||
| Other liabilities and accrued expenses | 2,968 | 2,776 | 2,716 | 3,146 | |||||||||||||
| Total Liabilities | $ | 416,936 | $ | 399,937 | $ | 396,183 | $ | 380,400 | |||||||||
| Total Stockholders' Equity | 37,660 | 41,630 | 42,216 | 41,332 | |||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 454,596 | $ | 441,567 | $ | 438,399 | $ | 421,732 | |||||||||
| Selected Financial Data (unaudited) | |||||||||||||||||
| Allowance for Loan Losses to Total Loans | 1.67 | % | 1.77 | % | 1.84 | % | 1.81 | % | |||||||||
| Non-performing Loans to Total Loans | 1.00 | % | 1.08 | % | 1.09 | % | 0.95 | % | |||||||||
| Non-performing Assets to Total Assets | 0.56 | % | 0.59 | % | 0.61 | % | 0.52 | % | |||||||||
| Capital Ratios (unaudited) | |||||||||||||||||
| Tier 1 Leverage Ratio | 9.41 | % | 9.25 | % | 9.52 | % | 9.84 | % | |||||||||
| Tier 1 Risk-Based Capital Ratio | 13.93 | % | 14.83 | % | 14.65 | % | 14.41 | % | |||||||||
| Total Risk-Based Capital Ratio | 15.18 | % | 16.09 | % | 15.90 | % | 15.66 | % | |||||||||
| Book Value per Share | $ | 8.60 | $ | 9.50 | $ | 9.64 | $ | 9.44 | |||||||||
| Statement of Operations (unaudited) | ||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| For the three months ended | For the six months ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| Interest income | $ | 3,896 | $ | 3,943 | $ | 4,089 | $ | 7,838 | $ | 7,936 | ||||||||||
| Interest expense | 436 | 444 | 574 | 880 | 1,224 | |||||||||||||||
| Net interest income | $ | 3,460 | $ | 3,499 | $ | 3,515 | $ | 6,958 | $ | 6,712 | ||||||||||
| Provision for loan losses | - | - | - | - | - | |||||||||||||||
| Net interest income after provision for loan losses | 3,460 | 3,499 | 3,515 | 6,958 | 6,712 | |||||||||||||||
| Net securities (losses) gains | 4 | 0 | 1,162 | 4 | 1,162 | |||||||||||||||
| Other income | 263 | 266 | 152 | 530 | 303 | |||||||||||||||
| Other expense | 3,163 | 3,310 | 3,291 | 6,472 | 6,284 | |||||||||||||||
| Income before income taxes | 564 | 455 | 1,538 | 1,020 | 1,893 | |||||||||||||||
| Income tax (expense) benefit | (252 | ) | (204 | ) | 1,208 | (457 | ) | 1,208 | ||||||||||||
| Net income | $ | 312 | $ | 251 | $ | 2,746 | $ | 563 | $ | 3,101 | ||||||||||
| Basic earnings per share | $ | 0.07 | $ | 0.06 | $ | 0.63 | $ | 0.13 | $ | 0.71 | ||||||||||
| Diluted earnings per share | $ | 0.07 | $ | 0.06 | $ | 0.63 | $ | 0.13 | $ | 0.71 | ||||||||||
| Selected Financial Data (unaudited) | ||||||||||||||||||||
| Return on Average Assets | 0.29 | % | 0.23 | % | 2.74 | % | 0.26 | % | 1.64 | % | ||||||||||
| Return on Average Equity | 3.00 | % | 2.42 | % | 27.53 | % | 2.71 | % | 15.93 | % | ||||||||||
| Net Interest Margin | 3.27 | % | 3.31 | % | 3.64 | % | 3.29 | % | 3.68 | % | ||||||||||
| Efficiency Ratio | 84.94 | % | 87.91 | % | 89.79 | % | 86.43 | % | 89.58 | % | ||||||||||
About Empire National Bank
Empire National Bank is a Long Island-based independent bank that specializes in serving the financial needs of small and medium sized businesses, professionals, nonprofit organizations, real estate investors, and consumers. The bank has four banking offices located in Islandia, Shirley, Port Jefferson Station and Mineola, New York. Our bankers take pride in understanding the needs of each 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 press release are made only as of the date of this press release. We have no intention, and do not assume any obligation, to update these forward looking statements.
Contact: William Franz VP, Director of Marketing & Investor Relations (631) 348-4444
