Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $1,284,000 and $4,159,000 for the three and twelve months ended December 31, 2020 compared to $940,000 and $3,486,000 for the same periods in 2019.
  • Diluted earnings per share were $.37 per share and $1.19 per share for the three and twelve months ended December 31, 2020 compared to $.27 per share and $1.00 per share for the same periods in 2019.  
  • Return on average assets was .78% and .64% for the three and twelve months ended December 31, 2020 compared to .61% and .57% for the three and twelve months ended December 31, 2019.
  • Return on average equity was 8.40% and 6.94% for the three and twelve months ended December 31, 2020 compared to 6.33% and 5.93% for the same periods in 2019.

"We are pleased to report an increase in earnings year-to-year, while at the same time having increased our loan loss reserves largely in response to the economic uncertainty resulting from the ongoing pandemic,” said Thomas M Carr, President and CEO.  Carr continued, "We continue to be concerned about the economic impact in our region from the pandemic, but we are dedicated to continuing to provide the financial services needed in the communities we serve, balancing those efforts with prudent safety measures to minimize potential COVID health risks to our customers and staff.”

Net Income

Net income totaled $4,159,000 for the twelve months ended December 31, 2020, an increase of $673,000 or 19% from the $3,486,000 of net income recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $2,486,000 and an increase in net interest income of $152,000, offset by an increase in the provision for loan losses of $706,000, an increase in noninterest expense of $855,000, and an increase in tax expense of $404,000.

Net income totaled $1,284,000 for the three months ended December 31, 2020, an increase of $344,000 or 37% from the $940,000 recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $1,148,000 and an increase in net interest income of $151,000, offset by an increase in noninterest expense of $599,000, an increase in the provision for loan losses of $175,000, and an increase in tax expense of $181,000.

The increase in noninterest income for both the three and twelve months ended December 31, 2020 is primarily due to increases in the gain on sale of loans, reflecting higher levels of residential mortgages originated for sale to the secondary markets compared to the same periods in 2019. The increase in noninterest expense for both the three and twelve months ended December 31, 2020 reflects higher levels of salaries and benefits and other expense. The higher levels of salaries and benefits and other expense for both the three and twelve months ended December 31, 2020 are in part related to higher levels of residential mortgage originations in 2020. For the twelve months ended December 31, 2020 the increase in other expense also includes the impact of a one-time FDIC small bank assessment credit of $143,000 recognized in 2019.

For both the three and twelve months ended December 31, 2020, the increases in the provision for loan losses reflect management’s consideration of the uncertainty of ongoing economic conditions resulting from the COVID-19 pandemic and associated economic slowdown.

Basic and diluted earnings per share for the twelve months ended December 31, 2020 were both $1.19 per share compared to $1.00 per share for both for the same period in 2019. Basic and diluted earnings per share for the three months ended December 31, 2020 were both $.37 per share compared to $.27 per share for both for the same period in 2019.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2020 was 3.06% compared to 3.04% for the same period in 2019. The yield on average earning assets was 4.13% for the twelve months ended December 31, 2020 compared to 4.31% for the same period in 2019. The average cost of interest-bearing liabilities was 1.23% for the twelve months ended December 31, 2020 compared to 1.48% for the same period in 2019.

The net interest margin for the three months ended December 31, 2020 was 3.24% compared to 3.01% for the same period in 2019. The average yield on earning assets was 4.13% for the three months ended December 31, 2020 compared to 4.30% for the same period in 2019. The average cost of interest-bearing liabilities was 0.97% for the three months ended December 31, 2020 compared to 1.54% for the same period in 2019.

Assets

Total assets increased $37.8 million or 6.2% to $644.6 million at December 31, 2020 compared to $606.8 million at December 31, 2019. Loans, including loans held for sale, decreased 6% to $489.2 million at December 31, 2020 compared to December 31, 2019. The available-for-sale investment portfolio decreased $5.7 million from December 31, 2019 to December 31, 2020. Total cash and cash equivalents were $89.2 million at December 31, 2020, an increase of $77.2 million from December 31, 2019 when cash totaled $12.0 million. The $77.2 million increase in cash resulted primarily from a $31.0 million decrease in loans, including loans held for sale, and an increase of $34.8 million in deposits.

Nonperforming Loans

The nonperforming loans to total loans ratio was 1.07% at December 31, 2020 and 0.82% at December 31, 2019. Net loan charge-offs to average loans for the twelve months ended December 31, 2020 was 0.05% and was 0.11% for the twelve months ended December 31, 2019. The allowance for loan losses was 1.19% of total loans at December 31, 2020 and 0.88% of total loans at December 31, 2019.

Liabilities

Deposits totaled $547.0 million at December 31, 2020, an increase of $34.8 million or 6.8% from the December 31, 2019 total of $512.2 million. The $34.8 million increase in deposits consists of a $27.4 million increase in noninterest bearing accounts, a $12.2 million increase in savings accounts, a $12.2 million increase in interest bearing transaction accounts, and an $11.2 million increase in money market accounts, partially offset by a $28.2 million decrease in time deposits. Borrowed funds totaled $29.0 million as of December 31, 2020 and December 31, 2019.

Shareholders’ Equity

Shareholders’ equity increased $2,150,000 to $60.8 million at December 31, 2020 compared to December 31, 2019. The current level of shareholders’ equity equates to a book value per share of $17.23 at December 31, 2020, compared to $16.67 at December 31, 2019. Dividends paid for common shareholders were $0.15 and $0.68 for the three and twelve months ended December 31, 2020 and $0.23 and $0.92 for the three and twelve months ended December 31, 2019.

Elmira Savings Bank, with $644.6 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a state-chartered bank with five 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,    
    2020       2019     % Change
ASSETS          
           
Cash and due from banks $ 89,099     $ 11,954     645.3 %
Federal funds sold and other short-term investments   88       92     -4.3 %
  Total cash and cash equivalents   89,187       12,046     640.4 %
           
Securities available for sale, at fair value   6,125       11,802     -48.1 %
Securities held to maturity - fair value $7,211          
  at December 31, 2020 and $7,209 at December 31, 2019   6,597       6,994     -5.7 %
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost   9,054       9,944     -9.0 %
           
Loans held for sale   5,408       1,354     299.4 %
           
Loans receivable   483,768       518,871     -6.8 %
Less: Allowance for loan losses   5,755       4,576     25.8 %
  Net loans   478,013       514,295     -7.1 %
           
Premises and equipment, net   15,876       16,210     -2.1 %
Bank-owned life insurance   15,410       14,919     3.3 %
Accrued interest receivable   1,564       1,625     -3.8 %
Goodwill   12,320       12,320     0.0 %
Other assets   5,033       5,320     -5.4 %
  Total assets $ 644,587     $ 606,829     6.2 %
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
Deposits $ 547,021     $ 512,215     6.8 %
Borrowings   29,000       29,000     0.0 %
Other liabilities   7,805       7,003     11.5 %
  Total liabilities   583,826       548,218     6.5 %
           
Shareholders' equity:          
Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares authorized;          
  10,000 shares issued and none outstanding at December 31, 2020 and at December 31, 2019   9,700       9,700     0.0 %
Common stock, $1 par value; authorized 5,000,000 shares; 3,616,770 shares issued and 3,522,887 oustanding        
  at December 31, 2020 and 3,606,089 shares issued and 3,512,206 outstanding at December 31, 2019   3,617       3,606     0.3 %
Additional paid-in capital   54,255       53,993     0.5 %
Retained earnings   5,197       3,432     51.4 %
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares          
  at December 31, 2020 and December 31, 2019   (12,202 )     (12,202 )   0.0 %
Accumulated other comprehensive income   144       32     350.0 %
  Total Elmira Savings Bank shareholders' equity   60,711       58,561     3.7 %
Noncontrolling interest   50       50     0.0 %
  Total shareholders' equity   60,761       58,611     3.7 %
  Total liabilities and shareholders' equity $ 644,587     $ 606,829     6.2 %
           
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)     2020     2019   % Change     2020     2019   % Change
                         
Interest and dividend income:                        
  Interest and fees on loans   $ 5,262   $ 5,642   -6.7 %   $ 21,475   $ 21,857   -1.7 %
  Interest and dividends on securities                        
     Taxable     155     218   -28.9 %     708     977   -27.5 %
     Non-taxable     71     96   -26.0 %     297     427   -30.4 %
    Total interest and dividend income     5,488     5,956   -7.9 %     22,480     23,261   -3.4 %
                         
Interest expense:                        
  Interest on deposits     968     1,585   -38.9 %     5,018     5,992   -16.3 %
  Interest on borrowings     210     212   -0.9 %     882     841   4.9 %
    Total interest expense     1,178     1,797   -34.4 %     5,900     6,833   -13.7 %
Net interest income     4,310     4,159   3.6 %     16,580     16,428   0.9 %
Provision for loan losses     375     200   87.5 %     1,450     744   94.9 %
Net interest income after provision for loan losses     3,935     3,959   -0.6 %     15,130     15,684   -3.5 %
                         
Noninterest income:                        
  Service fees     292     345   -15.4 %     1,163     1,399   -16.9 %
  Gain on sale of loans held for sale     1,820     662   174.9 %     4,577     1,790   155.7 %
  Gain on sale of securities     -     -   -       -     90   -  
  Other service fees     203     201   1.0 %     793     822   -3.5 %
  Earnings on bank-owned life insurance     104     101   3.0 %     402     385   4.4 %
  Other     85     47   80.9 %     284     247   15.0 %
    Total noninterest income     2,504     1,356   84.7 %     7,219     4,733   52.5 %
                         
Noninterest expense:                        
  Salaries and benefits     2,515     2,154   16.8 %     8,965     8,537   5.0 %
  Net occupancy     396     363   9.1 %     1,613     1,562   3.3 %
  Equipment     476     372   28.0 %     1,669     1,517   10.0 %
  Marketing and public relations     168     272   -38.2 %     693     1,060   -34.6 %
  Professional fees     195     213   -8.5 %     653     574   13.8 %
  Other     1,021     798   27.9 %     3,499     2,987   17.1 %
    Total noninterest expense     4,771     4,172   14.4 %     17,092     16,237   5.3 %
Income before income taxes     1,668     1,143   45.9 %     5,257     4,180   25.8 %
Income taxes     379     198   91.4 %     1,093     689   58.6 %
Net income     1,289     945   36.4 %     4,164     3,491   19.3 %
Less: Net income attributable to noncontrolling interest     5     5   -       5     5   -  
                         
Net income attibutable to Elmira Savings Bank     1,284     940   36.6 %     4,159     3,486   19.3 %
                         
Dividend on preferred stock     -     -   -       -     -   -  
Income available to common shareholders   $ 1,284   $ 940   36.6 %   $ 4,159   $ 3,486   19.3 %
                         
                         
Basic earnings per share   $ 0.37   $ 0.27   37.0 %   $ 1.19   $ 1.00   19.0 %
                         
Diluted earnings per share   $ 0.37   $ 0.27   37.0 %   $ 1.19   $ 1.00   19.0 %
                         
Weighted average shares outstanding - basic     3,511,688     3,498,955   0.4 %     3,507,910     3,495,089   0.4 %
                         
Weighted average shares outstanding - diluted     3,511,688     3,501,487   0.3 %     3,508,722     3,500,123   0.2 %
                         
Dividends per share   $ 0.15   $ 0.23   -34.8 %   $ 0.68   $ 0.92   -26.1 %
                         
ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                           
(Dollars in Thousands) For the Three Months Ended  
  December 31, 2020     December 31, 2019  
ASSETS: Average Balance Interest   Average Rate     Average Balance Interest   Average Rate
Loans $ 503,332   $ 5,262   4.15 %   $ 518,297   $ 5,642   4.32 %
Short-term investments   2,348     -   0.04       730     3   1.64  
Securities   22,177     226   4.04       30,290     311   4.09  
Total interest-earning assets   527,857     5,488   4.13       549,317     5,956   4.30  
                           
Noninterest-earning assets   130,513               65,253          
                           
TOTAL ASSETS $ 658,370             $ 614,570          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $ 437,689   $ 968   0.88     $ 434,491   $ 1,585   1.45  
Borrowings   43,831     210   1.87       29,000     212   2.85  
Total interest-bearing liabilities   481,520     1,178   0.97       463,491     1,797   1.54  
                           
Noninterest-bearing liabilities   116,069               92,138          
Shareholders' equity   60,781               58,941          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 658,370             $ 614,570          
Interest rate spread         3.16 %           2.76 %
Net interest income/margin     $ 4,310   3.24 %       $ 4,159   3.01 %
                           
ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                           
(Dollars in Thousands) For the Twelve Months Ended  
  December 31, 2020     December 31, 2019  
ASSETS: Average Balance Interest   Average Rate   Average Balance Interest   Average Rate  
Loans $ 516,170   $ 21,475   4.14 %   $ 500,066   $ 21,857   4.36 %
Short-term investments   1,422     2   0.12       604     12   1.93  
Securities   24,490     1,003   4.09       37,183     1,392   3.74  
Total interest-earning assets   542,082     22,480   4.13       537,853     23,261   4.31  
                           
Noninterest-earning assets   104,926               68,787          
                           
TOTAL ASSETS $ 647,008             $ 606,640          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $ 434,495   $ 5,018   1.15     $ 430,831   $ 5,992   1.39  
Borrowings   43,964     882   1.97       29,186     841   2.84  
Total interest-bearing liabilities   478,459     5,900   1.23       460,017     6,833   1.48  
                           
Noninterest-bearing liabilities   108,595               87,883          
Shareholders' equity   59,954               58,740          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 647,008             $ 606,640          
Interest rate spread         2.90 %           2.83 %
Net interest income/margin     $ 16,580   3.06 %       $ 16,428   3.04 %
                           
         Quarter Ended
(Dollars in Thousands, Except Per Share Data)   12/31/2020   9/30/2020   6/30/2020   3/31/2020   12/31/2019
Operating Data                    
  Net income $ 1,284   $ 948   $ 909   $ 1,018   $ 940  
  Net interest income   4,310     3,852     4,137     4,281     4,159  
  Provision for loan losses   375     450     575     50     200  
  Non-interest income   2,504     1,928     1,648     1,139     1,356  
  Non-interest expense   4,771     4,155     4,085     4,081     4,172  
Performance Statistics                    
  Net interest margin   3.24 %   2.81 %   2.98 %   3.16 %   3.01 %
  Annualized return on average assets   0.78 %   0.55 %   0.57 %   0.68 %   0.61 %
  Annualized return on average equity   8.40 %   6.27 %   6.12 %   6.93 %   6.33 %
  Annualized net loan charge-offs to avg loans   0.03 %   0.04 %   0.09 %   0.05 %   0.14 %
  Net charge-offs   38     57     116     60     183  
  Efficiency ratio   70.0 %   71.9 %   70.6 %   75.3 %   75.6 %
Per Share Data                    
  Basic earnings per share $ 0.37   $ 0.27   $ 0.26   $ 0.29   $ 0.27  
  Diluted earnings per share   0.37     0.27     0.26     0.29     0.27  
  Dividend declared per share   0.15     0.15     0.15     0.23     0.23  
  Book value   17.23     17.01     16.87     16.77     16.67  
  Common stock price:                    
    High   13.25     11.18     13.39     17.40     15.99  
    Low   10.44     10.30     10.49     11.50     13.97  
    Close   11.50     11.02     11.00     11.50     15.10  
  Weighted average common shares:                    
    Basic   3,512     3,509     3,507     3,503     3,499  
    Fully diluted   3,512     3,509     3,507     3,507     3,501  
  End-of-period common shares:                    
    Issued   3,617     3,617     3,617     3,611     3,606  
    Treasury   94     94     94     94     94  
                         
                         
Financial Condition Data:                    
General                    
  Total assets $ 644,587   $ 674,032   $ 675,862   $ 598,017   $ 606,829  
  Loans, net   478,013     504,946     518,698     506,076     514,295  
  Intangibles   12,320     12,320     12,320     12,320     12,320  
  Total deposits   547,021     551,350     551,225     501,760     512,215  
    Noninterest-bearing   109,346     107,423     109,985     83,431     81,934  
    Savings   82,573     79,492     79,150     72,174     70,358  
    NOW   100,293     98,464     91,166     83,323     88,126  
    Money Market   35,920     34,375     28,467     20,306     24,724  
    Time deposits   218,889     231,596     242,457     242,526     247,073  
    Total interest-bearing deposits   437,675     443,927     441,240     418,329     430,281  
  Shareholders' equity   60,761     59,960     59,496     59,044     58,611  
Asset Quality                    
  Non-performing assets $ 5,304   $ 5,507   $ 5,578   $ 4,686   $ 4,723  
  Non-performing assets to total assets   0.82 %   0.82 %   0.83 %   0.78 %   0.78 %
  Allowance for loan losses   5,755     5,418     5,025     4,566     4,576  
  Allowance for loan losses to total loans   1.19 %   1.06 %   0.96 %   0.89 %   0.88 %
  Allowance for loan losses to                    
    non-performing loans   112.67 %   104.11 %   95.28 %   105.43 %   108.51 %
  Non-performing loans to total loans   1.07 %   1.03 %   1.02 %   0.86 %   0.82 %
Capitalization                    
  Shareholders' equity to total assets   9.43 %   8.90 %   8.80 %   9.87 %   9.66 %
                         

For further information contact:Thomas M. Carr, President & CEOElmira Savings Bank333 East Water StreetElmira, New York 14901(607) 735-8660tcarr@elmirasavingsbank.com

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