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Elmira Savings Bank Reports Second Quarter Earnings

ELMIRA, N.Y., July 18, 2018 (GLOBE NEWSWIRE) — Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $1,163,000 and $2,294,000 for the three and six months ended June 30, 2018 compared to $1,108,000 and $2,187,000 for the same periods in 2017.
  • Diluted earnings per share were $.33 per share and $.66 per share for the three and six months ended June 30, 2018 compared to $.27 per share and $.56 per share for the same periods in 2017. 
  • Return on average assets was .83% for both the three and six months ended June 30, 2018 compared to .79% and .78% for the same periods in 2017.
  • Return on average equity was 8.11% and 8.07% for the three and six months ended June 30, 2018 compared to 7.01% and 7.35% for the same periods in 2017.

“The increase in net income combined with the effect of our capital restructuring last year has improved diluted earnings per share by 18% for the first half of 2018 compared to the same period one year ago,” said Thomas M. Carr, President and CEO. 

Net Income

Net income totaled $2,294,000 for the six months ended June 30, 2018, an increase of $107,000 or 5% from the $2,187,000 of net income recorded for the same period in 2017.  This increase was the net result of a decrease in noninterest expense of $49,000, a decrease in the provision for loan losses of $128,000, and a decrease in tax expense of $407,000, offset by a decrease in noninterest income of $373,000 and a decrease in net interest income of $104,000.

Net income totaled $1,163,000 for the three months ended June 30, 2018, an increase of $55,000 or 5% from the $1,108,000 recorded for the same period in 2017.  This increase was the net result of a decrease in noninterest expense of $49,000, a decrease in the provision for loan losses of $130,000, and a decrease in tax expense of $204,000, offset by a decrease in noninterest income of $222,000 and a decrease in net interest income of $106,000.

Basic and diluted earnings per share for the six months ended June 30, 2018 were both $.66 per share compared to $.56 per share for both for the same period in 2017.  Basic and diluted earnings per share for the three months ended June 30, 2018 were both $.33 per share compared to $.27 per share for both for the same period in 2017.  Per share data has been restated to reflect the 5% stock dividend paid on June 15, 2018.

Net Interest Margin

The net interest margin for the six months ended June 30, 2018 was 3.35% compared to 3.34% for the same period in 2017.  The yield on average earning assets was 4.19% for the six months ended June 30, 2018 compared to 4.13% for the same period in 2017.  The average cost of interest-bearing liabilities was .99% for the six months ended June 30, 2018 compared to .94% for the same period in 2017.

The net interest margin for the three months ended June 30, 2018 was 3.32% compared to 3.36% for the same period in 2017.  The average yield on earning assets was 4.19% for the three months ended June 30, 2018 compared to 4.15% for the same period in 2017.  The average cost of interest-bearing liabilities was 1.01% for the three months ended June 30, 2018 compared to .94% for the same period in 2017.

Assets

Total assets increased $8.4 million or 1.5% to $562.9 million at June 30, 2018 compared to $554.6 million at December 31, 2017.  Loans, including loans held for sale, decreased 1.4% to $454.3 million at June 30, 2018 compared to December 31, 2017.  The available-for-sale investment portfolio decreased $1.7 million from December 31, 2017 to June 30, 2018.

Nonperforming Loans

Our nonperforming loans to total loans ratio has increased to 0.98% at June 30, 2018 from .64% at December 31, 2017.  Net loan charge-offs to average loans for the six months ended June 30, 2018 of 0.07% was the same as the six months ended June 30, 2017.  The allowance for loan losses was 0.96% of total loans at June 30, 2018 and 0.97% of total loans at December 31, 2017.

Liabilities

Deposits total $468.3 million at June 30, 2018, an increase of $11.5 million or 2.5%.  The $11.5 million increase consists of an $8.7 million increase in time deposits, a $2.9 million increase in savings accounts, a $2.8 million increase in noninterest-bearing accounts, and a $603,000 increase in interest bearing transaction accounts, offset by a $3.4 million decrease in money market accounts.  Borrowed funds totaled at $33.0 million as of June 30, 2018, a decrease of $2.0 million from December 31, 2017.

Shareholders’ Equity

Shareholders’ equity increased $618,000 to $57.3 million at June 30, 2018 compared to December 31, 2017.  The current level of shareholders’ equity equates to a book value per share of $16.36 at June 30, 2018, compared to $16.26 at December 31, 2017.  Dividends paid for common shareholders were $0.23 and $0.45 for the three and six months ended for both June 30, 2018 and 2017.  As a result of the repurchase of all outstanding preferred shares in December 2017, there were no dividends paid for preferred shares for the three or six months ended June 30, 2018 versus $225,000 and $450,000 paid in preferred dividends for the same periods in 2017.

Elmira Savings Bank, with $562.9 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 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)   June 30,   December 31,      
          2018       2017     % Change  
ASSETS                  
                   
Cash and due from banks     $   25,178     $   7,800     222.8 %  
Federal funds sold and other short-term investments       95         97     -2.1 %  
Total cash and cash equivalents         25,273         7,897     220.0 %  
                   
Securities available for sale, at fair value       22,375         24,056     -7.0 %  
Securities held to maturity – fair value $7,992              
at June 30, 2018, and $8,186 at December 31, 2017       7,773         8,039     -3.3 %  
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost     9,632         10,221     -5.8 %  
                   
Loans held for sale         1,256         1,999     -37.2 %  
                   
Loans receivable         453,052       458,629     -1.2 %  
Less: Allowance for loan losses       4,362       4,442     -1.8 %  
Net loans         448,690       454,187     -1.2 %  
                   
Premises and equipment, net       16,722       16,772     -0.3 %  
Bank-owned life insurance       14,253       13,982     1.9 %  
Accrued interest receivable       1,043       1,497     -30.3 %  
Goodwill         12,320       12,320     0.0 %  
Other assets         3,587       3,590     -0.1 %  
Total assets       $ 562,924     $ 554,560     1.5 %  
                   
LIABILITIES AND SHAREHOLDERS’ EQUITY              
                   
Deposits       $ 468,293     $ 456,762     2.5 %  
Borrowings         33,000       35,000     -5.7 %  
Other liabilities         4,332       6,117     -29.2 %  
Total liabilities         505,625       497,879     1.6 %  
                   
Shareholders’ equity:                
Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares            
authorized; 10,000 shares issued at June 30, 2018 and at December 31, 2017   9,700       9,700     0.0 %  
Common stock, $1 par value; 5,000,000 shares authorized; 3,593,223 shares            
issued at June 30, 2018 and 3,410,622 shares issued at December 31, 2017   3,593       3,411     5.3 %  
Additional paid-in capital       53,599       50,258     6.6 %  
Retained earnings       2,842       5,493     -48.3 %  
Treasury stock, at cost – 93,883 common shares and 10,000 preferred shares            
at June 30, 2018 and December 31, 2017     (12,202 )     (12,202 )   0.0 %  
Accumulated other comprehensive loss     (284 )     (31 )   816.1 %  
Total Elmira Savings Bank shareholders’ equity     57,248       56,629     1.1 %  
Noncontrolling interest       51       52     -1.9 %  
Total shareholders’ equity       57,299       56,681     1.1 %  
Total liabilities and shareholders’ equity   $ 562,924     $ 554,560     1.5 %  
                   
       

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ELMIRA SAVINGS BANK    
CONSOLIDATED  STATEMENT OF INCOME     
(unaudited)    
                             
    Three Months Ended   Six Months Ended    
    June 30,   June 30,    
(in thousands, except for per share data)     2018     2017   % Change     2018     2017   % Change    
                             
Interest and dividend income:                            
Interest and fees on loans   $ 4,786   $ 4,789   -0.1 %   $ 9,582   $ 9,524   0.6 %    
Interest and dividends on securities                            
Taxable     244     228   7.0 %     496     472   5.1