Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $1,204,000 for the three months ended March 31, 2021 compared to $1,018,000 for the same period in 2020.
  • Diluted earnings per share were $.34 per share for the three months ended March 31, 2021 compared to $.29 per share for the same period in 2020.
  • Return on average assets was .75% for the three months ended March 31, 2021 and .68% for the same period in 2020.
  • Return on average equity was 7.93% for the three months ended March 31, 2021 compared to 6.93% for the same period in 2020.

“We are pleased to report an increase in first quarter net income year-to-year, while at the same time continuing to increase our loan loss reserves in response to the continuing 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 $1,204,000 for the three months ended March 31, 2021, an increase of $186,000 or 18.3% from the $1,018,000 recorded for the same period in 2020. This increase was the net result of an increase in net interest income of $240,000 and an increase in noninterest income of $786,000, offset by an increase in the provision for loan losses of $100,000, an increase in noninterest expense of $619,000, and an increase in tax expense of $121,000.

Basic and diluted earnings per share for the three months ended March 31, 2021 were both $.34 per share compared to $.29 per share for both for the same period in 2020.

The increase in noninterest income for the three months ended March 31, 2021 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 period in 2020. The increase in noninterest expense for the three months ended March 31, 2021 reflects higher levels of salaries and benefits, occupancy expense, and other expense. The higher levels of salaries and benefits and other expense for the three months ended March 31, 2021 are in part related to higher levels of residential mortgage originations and earnings in 2021. The increase in occupancy expense relates primarily to non-recurring costs for property maintenance projects.

For the three months ended March 31, 2021, the increase in the provision for loan losses reflects management’s consideration of the uncertainty of ongoing economic conditions resulting from the COVID-19 pandemic and associated economic slowdown.

Net Interest Margin

The net interest margin for the three months ended March 31, 2021 was 3.57% compared to 3.16% for the first quarter of 2020. The yield on average earning assets was 4.29% for the three months ended March 31, 2021 compared to 4.38% for the same period in 2020. The average cost of interest-bearing liabilities was 0.79% for the three months ended March 31, 2021 compared to 1.45% for the three months ended March 31, 2020.

Assets

Total assets increased $14.7 million or 2.3% to $659.3 million at March 31, 2021 compared to $644.6 million at December 31, 2020. Loans receivable decreased 0.3% to $482.2 million at March 31, 2021 compared to December 31, 2020. The available-for-sale investment portfolio decreased $521,000 from December 31, 2020 to March 31, 2021, and cash and cash equivalents increased by $19.1 million from December 31, 2020 to March 31, 2021. The $19.1 million increase in cash resulted primarily from a $3.4 million decrease in loans, including loans held for sale, and an increase of $15.9 million in deposits.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 1.13% at March 31, 2021 and 1.07% at December 31, 2020. Net loan charge-offs to average loans for the three months ended March 31, 2021 was .03% and .05% for the three months ended March 31, 2020. The allowance for loan losses was 1.22% of total loans at March 31, 2021 and 1.19% at December 31, 2020.

Liabilities

Deposits totaled $562.9 million at March 31, 2021, an increase of $15.9 million or 2.9% from the December 31, 2020 total of $547.0 million. Borrowed funds decreased by $3.0 million from December 31, 2020 to $26.0 million at March 31, 2021.

Shareholders’ Equity

Shareholders’ equity increased $701,000 to $61.5 million at March 31, 2021 compared to December 31, 2020. The current level of shareholders’ equity equates to a book value per share of $17.34 at March 31, 2021, compared to $17.23 at December 31, 2020. Dividends paid to common shareholders were $0.15 for the three months ended March 31, 2021 and $0.23 for the same period in 2020.

Elmira Savings Bank, with $659.3 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)   March 31,   December 31,    
          2021       2020     % Change
ASSETS                
                 
Cash and due from banks     $ 107,955     $ 88,536     21.9 %
Federal funds sold and other short-term investments   359       651     -44.9 %
Total cash and cash equivalents       108,314       89,187     21.4 %
                 
Securities available for sale, at fair value     5,604       6,125     -8.5 %
Securities held to maturity - fair value $6,798            
at March 31, 2021, and $7,211 at December 31, 2020   6,537       6,597     -0.9 %
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost   8,596       9,054     -5.1 %
                 
Loans held for sale       3,574       5,408     -33.9 %
                 
Loans receivable       482,248       483,768     -0.3 %
Less: Allowance for loan losses       5,865       5,755     1.9 %
Net loans         476,383       478,013     -0.3 %
                 
Premises and equipment, net       15,719       15,876     -1.0 %
Bank-owned life insurance       15,512       15,410     0.7 %
Accrued interest receivable       1,487       1,564     -4.9 %
Goodwill         12,320       12,320     0.0 %
Other assets         5,287       5,033     5.0 %
Total assets       $ 659,333     $ 644,587     2.3 %
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY            
                 
Deposits       $ 562,893     $ 547,021     2.9 %
Borrowings         26,000       29,000     -10.3 %
Other liabilities         8,978       7,805     15.0 %
Total liabilities       597,871       583,826     2.4 %
                 
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 March 31, 2021 and at December 31, 2020   9,700       9,700     0.0 %
Common stock, $1 par value; authorized 5,000,000 shares; 3,636,137 shares issued and 3,542,254 outstanding        
at March 31, 2021 and 3,616,770 shares issued and 3,522,887 outstanding at December 31, 2020   3,636       3,617     0.5 %
Additional paid-in capital       54,281       54,255     0.0 %
Retained earnings       5,869       5,197     12.9 %
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares          
at March 31, 2021 and December 31, 2020     (12,202 )     (12,202 )   0.0 %
Accumulated other comprehensive income     128       144     -11.1 %
Total Elmira Savings Bank shareholders’ equity     61,412       60,711     1.2 %
Noncontrolling interest       50       50     0.0 %
Total shareholders’ equity       61,462       60,761     1.2 %
Total liabilities and shareholders’ equity   $ 659,333     $ 644,587     2.3 %

ELMIRA SAVINGS BANK
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
             
    Three Months Ended
    March 31,
(in thousands, except for per share data)   2021   2020   % Change
             
Interest and dividend income:            
Interest and fees on loans   $ 5,212   $ 5,622   -7.3 %
Interest and dividends on securities            
Taxable     143     213   -32.9 %
Non-taxable     69     82   -15.9 %
Total interest and dividend income     5,424     5,917   -8.3 %
             
Interest expense:            
Interest on deposits     725     1,417   -48.8 %
Interest on borrowings     178     219   -18.7 %
Total interest expense     903     1,636   -44.8 %
Net interest income     4,521     4,281   5.6 %
Provision for loan losses     150     50   200.0 %
Net interest income after provision for loan losses     4,371     4,231   3.3 %
             
Noninterest income:            
Service fees     308     331   -6.9 %
Gain on sale of loans held for sale     1,211     435   178.4 %
Other service fees     210     188   11.7 %
Earnings on bank-owned life insurance     101     98   3.1 %
Other     95     87   9.2 %
Total noninterest income     1,925     1,139   69.0 %
             
Noninterest expense:            
Salaries and benefits     2,307     2,144   7.6 %
Net occupancy     626     394   58.9 %
Equipment     442     400   10.5 %
Marketing and public relations     241     177   36.2 %
Professional fees     147     166   -11.4 %
Other     937     800   17.1 %
Total noninterest expense     4,700     4,081   15.2 %
Income before income taxes     1,596     1,289   23.8 %
Income taxes     392     271   44.6 %
Net income     1,204     1,018   18.3 %
Less: Net income attributable to noncontrolling interest     -     -   -  
             
Net income attributable to Elmira Savings Bank   $ 1,204   $ 1,018   18.3 %
             
             
Basic earnings per share   $ 0.34   $ 0.29   17.2 %
             
Diluted earnings per share   $ 0.34   $ 0.29   17.2 %
             
Weighted average shares outstanding - basic     3,514,650     3,503,344   0.3 %
             
Weighted average shares outstanding - diluted     3,515,256     3,506,591   0.2 %
             
Dividends per share   $ 0.15   $ 0.23   -34.8 %

ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                           
(Dollars in Thousands) For the Three Months Ended  
  March 31, 2021     March 31, 2020  
ASSETS: Average Balance Interest   Average Rate     Average Balance Interest   Average Rate
Loans $ 485,646   $ 5,212   4.31 %   $ 511,479   $ 5,622   4.39 %
Short-term investments   617     -   0.02       747     1   0.70  
Securities   21,267     212   4.01       27,819     294   4.23  
Total interest-earning assets   507,530     5,424   4.29       540,045     5,917   4.38  
                           
Noninterest-earning assets   140,728               59,734          
                           
TOTAL ASSETS $ 648,258             $ 599,779          
                           
LIABILITIES AND SHAREHOLDERS’ EQUITY                          
Interest-bearing deposits $ 436,731   $ 725   0.67     $ 420,993   $ 1,417   1.35  
Borrowings   26,933     178   2.65       31,755     219   2.73  
Total interest-bearing liabilities   463,664     903   0.79       452,748     1,636   1.45  
                           
Noninterest-bearing liabilities   123,014               87,899          
Shareholders’ equity   61,580               59,132          
                           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 648,258             $ 599,779          
Interest rate spread         3.50 %           2.93 %
Net interest income/margin     $ 4,521   3.57 %       $ 4,281   3.16 %

          Quarter Ended
(Dollars in Thousands, Except Per Share Data)   3/31/2021   12/31/2020   9/30/2020   6/30/2020   3/31/2020
                     
Operating Data                    
                     
  Net income $ 1,204   $ 1,284   $ 948   $ 909   $ 1,018  
  Net interest income   4,521     4,310     3,852     4,137     4,281  
  Provision for loan losses   150     375     450     575     50  
  Non-interest income   1,925     2,504     1,928     1,648     1,139  
  Non-interest expense   4,700     4,771     4,155     4,085     4,081  
                                 
Performance Statistics                    
                                 
  Net interest margin   3.57 %   3.24 %   2.81 %   2.98 %   3.16 %
  Annualized return on average assets   0.75 %   0.78 %   0.55 %   0.57 %   0.68 %
  Annualized return on average equity   7.93 %   8.40 %   6.27 %   6.12 %   6.93 %
  Annualized net loan charge-offs to avg loans   0.03 %   0.03 %   0.04 %   0.09 %   0.05 %
  Net charge-offs   40     38     57     116     60  
  Efficiency ratio   72.9 %   70.0 %   71.9 %   70.6 %   75.3 %
                     
Per Share Data                    
                     
  Basic earnings per share $ 0.34   $ 0.37   $ 0.27   $ 0.26   $ 0.29  
  Diluted earnings per share   0.34     0.37     0.27     0.26     0.29  
  Dividend declared per share   0.15     0.15     0.15     0.15     0.23  
  Book value   17.34     17.23     17.01     16.87     16.77  
  Common stock price:                    
    High   16.00     13.25     11.18     13.39     17.40  
    Low   11.41     10.44     10.30     10.49     11.50  
    Close   13.50     11.50     11.02     11.00     11.50  
  Weighted average common shares:                    
    Basic   3,515     3,512     3,509     3,507     3,503  
    Fully diluted   3,515     3,512     3,509     3,507     3,507  
  End-of-period common shares:                    
    Issued   3,636     3,617     3,617     3,617     3,611  
    Treasury   94     94     94     94     94  
                         
                         
Financial Condition Data:                    
General                    
  Total assets $ 659,333   $ 644,587   $ 674,032   $ 675,862   $ 598,017  
  Loans, net   476,383     478,013     504,946     518,698     506,076  
  Intangibles   12,320     12,320     12,320     12,320     12,320  
  Total deposits   562,893     547,021     551,350     551,225     501,760  
                                 
    Noninterest-bearing   121,101     109,346     107,423     109,985     83,431  
                                   
    Savings   87,228     82,573     79,492     79,150     72,174  
    NOW   111,414     100,293     98,464     91,166     83,323  
    Money Market   35,011     35,920     34,375     28,467     20,306  
    Time deposits   208,139     218,889     231,596     242,457     242,526  
    Total interest-bearing deposits   441,792     437,675     443,927     441,240     418,329  
                                   
  Shareholders’ equity   61,462     60,761     59,960     59,496     59,044  
                                 
Asset Quality                    
                     
  Non-performing assets $ 5,602   $ 5,304   $ 5,507   $ 5,578   $ 4,686  
  Non-performing assets to total assets   0.85 %   0.82 %   0.82 %   0.83 %   0.78 %
  Allowance for loan losses   5,865     5,755     5,418     5,025     4,566  
  Allowance for loan losses to total loans   1.22 %   1.19 %   1.06 %   0.96 %   0.89 %
  Allowance for loan losses to                    
    non-performing loans   108.63 %   112.67 %   104.11 %   95.28 %   105.43 %
  Non-performing loans to total loans   1.13 %   1.07 %   1.03 %   1.02 %   0.86 %
                                 
Capitalization                    
                     
  Shareholders’ equity to total assets   9.32 %   9.43 %   8.90 %   8.80 %   9.87 %

 

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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