Elmira Savings Bank Reports Third Quarter Earnings

ELMIRA, N.Y., Oct. 21, 2020 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ:ESBK)

Highlights

• Net income was $948,000 and $2,875,000 for the three and nine months ended September 30, 2020 compared to $901,000 and $2,546,000 for the same periods in 2019.
  
  
• Diluted earnings per share were $.27 per share and $.82 per share for the three and nine months ended September 30, 2020 compared to $.26 per share and $.73 per share for the same periods in 2019.
  
  
• Return on average assets was .55% and .60% for the three and nine months ended September 30, 2020 compared to .58% and .56% for the three and nine months ended September 30, 2019.
  
  
• Return on average equity was 6.27% and 6.44% for the three and nine months ended September 30, 2020 compared to 6.08% and 5.80% for the same periods in 2019.
  

"We continue to be concerned about the economic impact the pandemic is having in our region," said Thomas M Carr, President and CEO.  Carr continued, "We are focused on 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 $2,875,000 for the nine months ended September 30, 2020, an increase of $329,000 or 13% from the $2,546,000 of net income recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $1,603,000 and an increase in net interest income of $1,000, offset by an increase in the provision for loan losses of $531,000, an increase in noninterest expense of $521,000, and an increase in tax expense of $223,000.

Net income totaled $948,000 for the three months ended September 30, 2020, an increase of $47,000 or 5% from the $901,000 recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $817,000, offset by a decrease in net interest income of $220,000, an increase in noninterest expense of $305,000, an increase in the provision for loan losses of $200,000, and an increase in tax expense of $45,000.

The increase in noninterest income for both the three and nine months ended September 30, 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 nine months ended September 30, 2020 reflects higher levels of other expense. The higher levels of other expense for both the three and nine months ended September 30, 2020 are in part related to higher levels of residential mortgage originations in 2020 and also includes the impact of a one-time FDIC small bank assessment credit of $143,000 recognized during the third quarter of 2019.

For both the three and nine months ended September 30, 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 nine months ended September 30, 2020 were both $.82 per share compared to $.73 per share for both for the same period in 2019. Basic and diluted earnings per share for the three months ended September 30, 2020 were both $.27 per share compared to $.26 per share for both for the same period in 2019.

Net Interest Margin

The net interest margin for the nine months ended September 30, 2020 was 2.98% compared to 3.05% for the same period in 2019. The yield on average earning assets was 4.13% for the nine months ended September 30, 2020 compared to 4.31% for the same period in 2019. The average cost of interest-bearing liabilities was 1.32% for the nine months ended September 30, 2020 compared to 1.46% for the same period in 2019.

The net interest margin for the three months ended September 30, 2020 was 2.81% compared to 2.97% for the same period in 2019. The average yield on earning assets was 3.91% for the three months ended September 30, 2020 compared to 4.31% for the same period in 2019. The average cost of interest-bearing liabilities was 1.20% for the three months ended September 30, 2020 compared to 1.55% for the same period in 2019.

Assets

Total assets increased $67.2 million or 11.1% to $674.0 million at September 30, 2020 compared to $606.8 million at December 31, 2019. Loans, including loans held for sale, increased 0.1% to $520.9 million at September 30, 2020 compared to December 31, 2019. The available-for-sale investment portfolio decreased $5.3 million from December 31, 2019 to September 30, 2020. Total cash and cash equivalents were $85.4 million at September 30, 2020, an increase of $73.4 million from December 31, 2019 when cash totaled $12.0 million.

Nonperforming Loans

The nonperforming loans to total loans ratio was 1.03% at September 30, 2020 and 0.82% at December 31, 2019. Net loan charge-offs to average loans for the nine months ended September 30, 2020 was 0.06% and was 0.10% for the nine months ended September 30, 2019. The allowance for loan losses was 1.06% of total loans at September 30, 2020 and 0.88% of total loans at December 31, 2019.

Liabilities

Deposits totaled $551.3 million at September 30, 2020, an increase of $39.1 million or 7.6% from the December 31, 2019 total of $512.2 million. Borrowed funds totaled $54.9 million as of September 30, 2020, an increase of $25.9 million from December 31, 2019 when borrowed funds totaled $29.0 million.

Shareholders’ Equity

Shareholders’ equity increased $1,349,000 to $60.0 million at September 30, 2020 compared to December 31, 2019. The current level of shareholders’ equity equates to a book value per share of $17.01 at September 30, 2020, compared to $16.67 at December 31, 2019. Dividends paid for common shareholders were $0.15 and $0.53 for the three and nine months ended September 30, 2020 and $0.23 and $0.69 for the three and nine months ended September 30, 2019.

Elmira Savings Bank, with $674.0 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.

For further information contact:
Thomas M. Carr, President & CEO
Elmira Savings Bank
333 East Water Street
Elmira, New York 14901
[phone]
[e-mail]

ELMIRA SAVINGS BANK
CONSOLIDATED BALANCE SHEET
(unaudited)
(in thousands, except for share and per share data)	September 30,				December 31,
		2020				2019			% Change
ASSETS
Cash and due from banks	$	85,381			$	11,954			614.2	%
Federal funds sold and other short-term investments		88				92			-4.3	%
Total cash and cash equivalents		85,469				12,046			609.5	%
Securities available for sale, at fair value		6,456				11,802			-45.3	%
Securities held to maturity - fair value $7,348
at September 30, 2020 and $7,233 at December 31, 2019		6,716				7,018			-4.3	%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost		9,417				9,944			-5.3	%
Loans held for sale		10,489				1,354			674.7	%
Loans receivable		510,364				518,871			-1.6	%
Less: Allowance for loan losses		5,418				4,576			18.4	%
Net loans		504,946				514,295			-1.8	%
Premises and equipment, net		16,030				16,210			-1.1	%
Bank-owned life insurance		15,307				14,919			2.6	%
Accrued interest receivable		1,675				1,625			3.1	%
Goodwill		12,320				12,320			0.0	%
Other assets		5,207				5,296			-1.7	%
Total assets	$	674,032			$	606,829			11.1	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits	$	551,350			$	512,215			7.6	%
Borrowings		54,896				29,000			89.3	%
Other liabilities		7,826				7,003			11.8	%
Total liabilities		614,072				548,218			12.0	%
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 September 30, 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 September 30, 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		54,197				53,993			0.4	%
Retained earnings		4,441				3,432			29.4	%
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares
at September 30, 2020 and December 31, 2019		(12,202	)			(12,202	)		0.0	%
Accumulated other comprehensive income		157				32			390.6	%
Total Elmira Savings Bank shareholders' equity		59,910				58,561			2.3	%
Noncontrolling interest		50				50			0.0	%
Total shareholders' equity		59,960				58,611			2.3	%
Total liabilities and shareholders' equity	$	674,032			$	606,829			11.1	%

ELMIRA SAVINGS BANK
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
		Three Months Ended									Nine Months Ended
		September 30,									September 30,
(in thousands, except for per share data)		2020			2019			% Change			2020			2019			% Change
Interest and dividend income:
Interest and fees on loans		$	5,140		$	5,568		-7.7	%		$	16,213		$	16,215		-0.0	%
Interest and dividends on securities
Taxable			163			234		-30.3	%			553			759		-27.1	%
Non-taxable			72			107		-32.7	%			226			331		-31.7	%
Total interest and dividend income			5,375			5,909		-9.0	%			16,992			17,305		-1.8	%
Interest expense:
Interest on deposits			1,291			1,627		-20.7	%			4,050			4,407		-8.1	%
Interest on borrowings			232			210		10.5	%			672			629		6.8	%
Total interest expense			1,523			1,837		-17.1	%			4,722			5,036		-6.2	%
Net interest income			3,852			4,072		-5.4	%			12,270			12,269		0.0	%
Provision for loan losses			450			250		80.0	%			1,075			544		97.6	%
Net interest income after provision for loan losses			3,402			3,822		-11.0	%			11,195			11,725		-4.5	%
Noninterest income:
Service fees			285			353		-19.3	%			871			1,054		-17.4	%
Gain on sale of loans held for sale			1,431			452		216.6	%			3,060			1,166		162.4	%
Gain on sale of securities			-			90		-				-			90		-
Other service fees			254			250		1.6	%			648			664		-2.4	%
Earnings on bank-owned life insurance			103			98		5.1	%			298			284		4.9	%
Other			48			61		-21.3	%			141			157		-10.2	%
Total noninterest income			2,121			1,304		62.7	%			5,018			3,415		46.9	%
Noninterest expense:
Salaries and benefits			2,236			2,258		-1.0	%			6,450			6,383		1.0	%
Net occupancy			388			379		2.4	%			1,217			1,199		1.5	%
Equipment			408			381		7.1	%			1,193			1,145		4.2	%
Marketing and public relations			202			289		-30.1	%			525			788		-33.4	%
Professional fees			143			90		58.9	%			458			361		26.9	%
Other			971			646		50.3	%			2,781			2,227		24.9	%
Total noninterest expense			4,348			4,043		7.5	%			12,624			12,103		4.3	%
Income before income taxes			1,175			1,083		8.5	%			3,589			3,037		18.2	%
Income taxes			227			182		24.7	%			714			491		45.4	%
Net income			948			901		5.2	%			2,875			2,546		12.9	%
Less: Net income attributable to noncontrolling interest			-			-		-				-			-		-
Net income attibutable to Elmira Savings Bank			948			901		5.2	%			2,875			2,546		12.9	%
Dividend on preferred stock			-			-		-				-			-		-
Income available to common shareholders		$	948		$	901		5.2	%		$	2,875		$	2,546		12.9	%
Basic earnings per share		$	0.27		$	0.26		3.8	%		$	0.82		$	0.73		12.3	%
Diluted earnings per share		$	0.27		$	0.26		3.8	%		$	0.82		$	0.73		12.3	%
Weighted average shares outstanding - basic			3,509,421			3,496,195		0.4	%			3,506,646			3,493,945		0.4	%
Weighted average shares outstanding - diluted			3,509,421			3,498,545		0.3	%			3,507,728			3,499,813		0.2	%
Dividends per share		$	0.15		$	0.23		-34.8	%		$	0.53		$	0.69		-23.2	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)	For the Three Months Ended
	September 30, 2020									September 30, 2019
ASSETS:	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans	$	521,294		$	5,140		3.92	%		$	506,556		$	5,568		4.36	%
Short-term investments		1,257			-		0.05				689			4		2.15
Securities		23,170			235		4.08				36,861			337		3.63
Total interest-earning assets		545,721			5,375		3.91				544,106			5,909		4.31
Noninterest-earning assets		136,645									75,625
TOTAL ASSETS	$	682,366								$	619,731
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits	$	447,441		$	1,291		1.15			$	441,020		$	1,627		1.46
Borrowings		56,548			232		1.61				29,000			210		2.85
Total interest-bearing liabilities		503,989			1,523		1.20				470,020			1,837		1.55
Noninterest-bearing liabilities		118,276									90,876
Shareholders' equity		60,101									58,835
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	682,366								$	619,731
Interest rate spread							2.71	%								2.76	%
Net interest income/margin				$	3,852		2.81	%					$	4,072		2.97	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)	For the Nine Months Ended
	September 30, 2020									September 30, 2019
ASSETS:	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans	$	520,481		$	16,213		4.14	%		$	493,922		$	16,215		4.37	%
Short-term investments		1,111			2		0.18				562			9		2.06
Securities		25,291			777		4.10				39,506			1,081		3.65
Total interest-earning assets		546,883			16,992		4.13				533,990			17,305		4.31
Noninterest-earning assets		96,310									69,978
TOTAL ASSETS	$	643,193								$	603,968
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits	$	433,423		$	4,050		1.25			$	429,598		$	4,407		1.37
Borrowings		44,008			672		2.01				29,249			629		2.84
Total interest-bearing liabilities		477,431			4,722		1.32				458,847			5,036		1.46
Noninterest-bearing liabilities		106,086									86,449
Shareholders' equity		59,676									58,672
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	643,193								$	603,968
Interest rate spread							2.81	%								2.85	%
Net interest income/margin				$	12,270		2.98	%					$	12,269		3.05	%

						Quarter Ended
(Dollars in Thousands, Except Per Share Data)				9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019
Operating Data
	Net income		$	948		$	909		$	1,018		$	940		$	901
	Net interest income			3,852			4,137			4,281			4,159			4,072
	Provision for loan losses			450			575			50			200			250
	Net security gains			-			-			-			-			90
	Non-interest income, ex. Net security gains			2,121			1,756			1,141			1,358			1,214
	Non-interest expense			4,348			4,193			4,083			4,174			4,043
Performance Statistics
	Net interest margin			2.81	%		2.98	%		3.16	%		3.01	%		2.97	%
	Annualized return on average assets			0.55	%		0.57	%		0.68	%		0.61	%		0.58	%
	Annualized return on average equity			6.27	%		6.12	%		6.93	%		6.33	%		6.07	%
	Annualized net loan charge-offs to avg loans			0.04	%		0.09	%		0.05	%		0.14	%		0.11	%
	Net charge-offs			57			116			60			183			135
	Efficiency ratio			72.8	%		71.1	%		75.3	%		75.7	%		75.2	%
Per Share Data
	Basic earnings per share		$	0.27		$	0.26		$	0.29		$	0.27		$	0.26
	Diluted earnings per share			0.27			0.26			0.29			0.27			0.26
	Dividend declared per share			0.15			0.15			0.23			0.23			0.23
	Book value			17.01			16.87			16.77			16.67			16.62
	Common stock price:
		High		11.18			13.39			17.40			15.99			16.40
		Low		10.30			10.49			11.50			13.97			13.97
		Close		11.02			11.00			11.50			15.10			14.07
	Weighted average common shares:
		Basic		3,509			3,507			3,503			3,499			3,496
		Fully diluted		3,509			3,507			3,507			3,501			3,499
	End-of-period common shares:
		Issued		3,617			3,617			3,611			3,606			3,606
		Treasury		94			94			94			94			94
Financial Condition Data:
General
	Total assets		$	674,032		$	675,862		$	598,017		$	606,829		$	615,601
	Loans, net			504,946			518,698			506,076			514,295			511,750
	Intangibles			12,320			12,320			12,320			12,320			12,320
	Total deposits			551,350			551,225			501,760			512,215			520,030
		Noninterest-bearing		107,423			109,985			83,431			81,934			82,613
		Savings		79,492			79,150			72,174			70,358			69,186
		NOW		98,464			91,166			83,323			88,126			84,207
		Money Market		34,375			28,467			20,306			24,724			21,555
		Time deposits		231,596			242,457			242,526			247,073			262,469
		Total interest-bearing deposits		443,927			441,240			418,329			430,281			437,417
	Shareholders' equity			59,960			59,496			59,044			58,611			58,422
Asset Quality
	Non-performing assets		$	5,507		$	5,578		$	4,686		$	4,723		$	4,923
	Non-performing assets to total assets			0.82	%		0.83	%		0.78	%		0.78	%		0.80	%
	Allowance for loan losses			5,418			5,025			4,566			4,576			4,559
	Allowance for loan losses to total loans			1.06	%		0.96	%		0.89	%		0.88	%		0.88	%
	Allowance for loan losses to
		non-performing loans		104.11	%		95.28	%		105.43	%		108.51	%		96.43	%
	Non-performing loans to total loans			1.03	%		1.02	%		0.86	%		0.82	%		0.92	%
Capitalization
	Shareholders' equity to total assets			8.90	%		8.80	%		9.87	%		9.66	%		9.49	%