Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $1,511,000 and $4,117,000 for the three and nine months ended September 30, 2021 compared to $948,000 and $2,875,000 for the same periods in 2020.
  • Diluted earnings per share were $.43 per share and $1.17 per share for the three and nine months ended September 30, 2021 compared to $.27 per share and $.82 per share for the same periods in 2020.  
  • Return on average assets was .92% and .85% for the three and nine months ended September 30, 2021 compared to .55% and .60% for the three and nine months ended September 30, 2020.
  • Return on average equity was 9.49% and 8.83% for the three and nine months ended September 30, 2021 compared to 6.27% and 6.44% for the same periods in 2020.

"We are pleased with the improvement in core earnings and asset quality," said Thomas M Carr, President and CEO.  Carr continued, “We are focused on serving our customers and anticipate a successful transition to Community Bank, N.A. during the first quarter of 2022.”

Net Income

Net income totaled $4,117,000 for the nine months ended September 30, 2021, an increase of $1,242,000 or 43% from the $2,875,000 of net income recorded for the same period in 2020. This increase was the net result of an increase in noninterest income of $121,000, an increase in net interest income of $1,299,000, and a decrease in the provision for loan losses of $925,000, offset by an increase in noninterest expense of $590,000 and an increase in tax expense of $513,000.

Net income totaled $1,511,000 for the three months ended September 30, 2021, an increase of $563,000 or 59% from the $948,000 recorded for the same period in 2020. This increase was the net result of an increase in net interest income of $856,000 and a decrease in the provision for loan losses of $450,000, offset by an increase in noninterest expense of $152,000, a decrease in noninterest income of $364,000, and an increase in tax expense of $227,000.

Basic and diluted earnings per share for the nine months ended September 30, 2021 were both $1.17 per share compared to $.82 per share for both for the same period in 2020. Basic and diluted earnings per share for the three months ended September 30, 2021 were both $.43 per share compared to $.27 per share for both for the same period in 2020.

Net Interest Margin

The net interest margin for the nine months ended September 30, 2021 was 3.62% compared to 2.98% for the same period in 2020. The yield on average earning assets was 4.20% for the nine months ended September 30, 2021 compared to 4.13% for the same period in 2020. The average cost of interest-bearing liabilities was 0.62% for the nine months ended September 30, 2021 compared to 1.32% for the same period in 2020.

The net interest margin for the three months ended September 30, 2021 was 3.81% compared to 2.81% for the same period in 2020. The average yield on earning assets was 4.24% for the three months ended September 30, 2021 compared to 3.91% for the same period in 2020. The average cost of interest-bearing liabilities was 0.46% for the three months ended September 30, 2021 compared to 1.20% for the same period in 2020.

Assets

Total assets decreased $991,000 or 0.2% to $643.6 million at September 30, 2021 compared to $644.6 million at December 31, 2020. Loans, including loans held for sale, decreased 4.4% to $467.6 million at September 30, 2021 compared to December 31, 2020. The available-for-sale investment portfolio decreased $1.5 million from December 31, 2020 to September 30, 2021. Total cash and cash equivalents were $111.6 million at September 30, 2021, an increase of $22.4 million from December 31, 2020 when cash totaled $89.2 million.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 0.70% at September 30, 2021 and 1.07% at December 31, 2020. Net loan charge-offs to average loans for the nine months ended September 30, 2021 was 0.08% compared to 0.06% for the nine months ended September 30, 2020. The allowance for loan losses was 1.21% of total loans at September 30, 2021 and 1.19% of total loans at December 31, 2020.

Liabilities

Deposits total $544.8 million at September 30, 2021, a decrease of $2.3 million or 0.4% from the December 31, 2020 total of $547.0 million. Borrowed funds totaled $24.0 million as of September 30, 2021, a decrease of $5.0 million from December 31, 2020 when borrowed funds totaled $29.0 million.

Shareholders’ Equity

Shareholders’ equity increased $2,635,000 to $63.4 million at September 30, 2021 compared to December 31, 2020. The current level of shareholders’ equity equates to a book value per share of $17.86 at September 30, 2021, compared to $17.23 at December 31, 2020. Dividends paid for common shareholders were $0.15 and $0.45 for the three and nine months ended September 30, 2021 and $0.15 and $0.53 for the three and nine months ended September 30, 2020.

Elmira Savings Bank, with $643.6 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)   September 30,   December 31,      
      2021       2020     % Change  
ASSETS              
               
Cash and due from banks   $ 111,114     $ 88,536     25.5 %  
Federal funds sold and other short-term investments   492       651     -24.4 %  
Total cash and cash equivalents     111,606       89,187     25.1 %  
               
Securities available for sale, at fair value     4,631       6,125     -24.4 %  
Securities held to maturity - fair value $6,448              
at September 30, 2021, and $7,211 at December 31, 2020   6,219       6,597     -5.7 %  
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost   8,220       9,054     -9.2 %  
               
Loans held for sale     3,298       5,408     -39.0 %  
               
Loans receivable     464,258       483,768     -4.0 %  
Less: Allowance for loan losses     5,627       5,755     -2.2 %  
Net loans     458,631       478,013     -4.1 %  
               
Premises and equipment, net     15,704       15,876     -1.1 %  
Bank-owned life insurance     15,807       15,410     2.6 %  
Accrued interest receivable     1,391       1,564     -11.1 %  
Goodwill     12,320       12,320     0.0 %  
Other assets     5,769       5,033     14.6 %  
Total assets   $ 643,596     $ 644,587     -0.2 %  
               
LIABILITIES AND SHAREHOLDERS' EQUITY              
               
Deposits   $ 544,763     $ 547,021     -0.4 %  
Borrowings     24,000       29,000     -17.2 %  
Other liabilities     11,437       7,805     46.5 %  
Total liabilities     580,200       583,826     -0.6 %  
               
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, 2021 and at December 31, 2020   9,700       9,700     0.0 %  
Common stock, $1 par value; authorized 5,000,000 shares; 3,641,487 shares issued and 3,547,604 outstanding          
at September 30, 2021 and 3,616,770 shares issued and 3,522,887 outstanding at December 31, 2020   3,641       3,617     0.7 %  
Additional paid-in capital     54,376       54,255     0.2 %  
Retained earnings     7,718       5,197     48.5 %  
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares            
at September 30, 2021 and December 31, 2020     (12,202 )     (12,202 )   0.0 %  
Accumulated other comprehensive income     113       144     -21.5 %  
Total Elmira Savings Bank shareholders' equity     63,346       60,711     4.3 %  
Noncontrolling interest     50       50     0.0 %  
Total shareholders' equity     63,396       60,761     4.3 %  
Total liabilities and shareholders' equity   $ 643,596     $ 644,587     -0.2 %  
               
ELMIRA SAVINGS BANK  
CONSOLIDATED STATEMENT OF INCOME  
(unaudited)  
                           
    Three Months Ended   Nine Months  
    September 30,   Ended September 30,  
(in thousands, except for per share data)     2021       2020     % Change     2021       2020     % Change  
                           
Interest and dividend income:                          
Interest and fees on loans   $ 5,054     $ 5,140     -1.7 %   $ 15,127     $ 16,213     -6.7 %  
Interest and dividends on securities                          
Taxable     125       163     -23.3 %     398       553     -28.0 %  
Non-taxable     66       72     -8.3 %     202       226     -10.6 %  
Total interest and dividend income     5,245       5,375     -2.4 %     15,727       16,992     -7.4 %  
                           
Interest expense:                          
Interest on deposits     363       1,291     -71.9 %     1,632       4,050     -59.7 %  
Interest on borrowings     174       232     -25.0 %     526       672     -21.7 %  
Total interest expense     537       1,523     -64.7 %     2,158       4,722     -54.3 %  
Net interest income     4,708       3,852     22.2 %     13,569       12,270     10.6 %  
Provision for loan losses     -       450     -100.0 %     150       1,075     -86.0 %  
Net interest income after provision for loan losses     4,708       3,402     38.4 %     13,419       11,195     19.9 %  
                           
Noninterest income:                          
Service fees     308       285     8.1 %     920       871     5.6 %  
Gain on sale of loans held for sale     854       1,238     -31.0 %     2,708       2,757     -1.8 %  
Other service fees     237       216     9.7 %     677       590     14.7 %  
Earnings on bank-owned life insurance     107       103     3.9 %     307       298     3.0 %  
Other     58       86     -32.6 %     224       199     12.6 %  
Total noninterest income     1,564       1,928     -18.9 %     4,836       4,715     2.6 %  
                           
Noninterest expense:                          
Salaries and benefits     2,228       2,236     -0.4 %     6,687       6,450     3.7 %  
Net occupancy     172       388     -55.7 %     1,175       1,217     -3.5 %  
Equipment     384       408     -5.9 %     1,210       1,193     1.4 %  
Marketing and public relations     254       202     25.7 %     662       525     26.1 %  
Professional fees     490       143     242.7 %     794       458     73.4 %  
Other     779       778     0.1 %     2,383       2,478     -3.8 %  
Total noninterest expense     4,307       4,155     3.7 %     12,911       12,321     4.8 %  
Income before income taxes     1,965       1,175     67.2 %     5,344       3,589     48.9 %  
Income taxes     454       227     100.0 %     1,227       714     71.8 %  
Net income     1,511       948     59.4 %     4,117       2,875     43.2 %  
Less: Net income attributable to noncontrolling interest     -       -     -       -       -     -    
                           
Net income attributable to Elmira Savings Bank   $ 1,511     $ 948     59.4 %   $ 4,117     $ 2,875     43.2 %  
                           
                           
Basic earnings per share   $ 0.43     $ 0.27     59.3 %   $ 1.17     $ 0.82     42.7 %  
                           
Diluted earnings per share   $ 0.43     $ 0.27     59.3 %   $ 1.17     $ 0.82     42.7 %  
                           
Weighted average shares outstanding - basic     3,522,400       3,509,421     0.4 %     3,518,775       3,506,646     0.3 %  
                           
Weighted average shares outstanding - diluted     3,523,526       3,509,421     0.4 %     3,519,663       3,507,728     0.3 %  
                           
Dividends per share   $ 0.15     $ 0.15     0.0 %   $ 0.45     $ 0.53     -15.1 %  
                           
ELMIRA SAVINGS BANK    
AVERAGE BALANCES AND INTEREST RATES    
                             
(Dollars in Thousands) For the Three Months Ended    
  September 30, 2021     September 30, 2020    
ASSETS:   Average Balance       Interest     Average Rate       Average Balance       Interest     Average Rate    
Loans $ 470,777     $ 5,054     4.26 %   $ 521,294     $ 5,140     3.92 %  
Short-term investments   674       -     0.04       1,257       -     0.05    
Securities   19,434       191     3.91       23,170       235     4.08    
Total interest-earning assets   490,885       5,245     4.24       545,721       5,375     3.91    
                             
Noninterest-earning assets   160,254                 136,645              
                             
TOTAL ASSETS $ 651,139               $ 682,366              
                             
LIABILITIES AND SHAREHOLDERS' EQUITY                            
Interest-bearing deposits $ 430,078     $ 363     0.33     $ 447,441     $ 1,291     1.15    
Borrowings   25,848       174     2.64       56,548       232     1.61    
Total interest-bearing liabilities   455,926       537     0.46       503,989       1,523     1.20    
                             
Noninterest-bearing liabilities   132,024                 118,276              
Shareholders' equity   63,189                 60,101              
                             
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 651,139               $ 682,366              
Interest rate spread         3.78 %           2.71 %  
Net interest income/margin     $ 4,708     3.81 %       $ 3,852     2.81 %  
                             
ELMIRA SAVINGS BANK    
AVERAGE BALANCES AND INTEREST RATES    
                             
(Dollars in Thousands) For the Nine Months Ended    
  September 30, 2021     September 30, 2020    
ASSETS:   Average Balance       Interest     Average Rate       Average Balance       Interest     Average Rate    
Loans $ 477,894     $ 15,127     4.21 %   $ 520,481     $ 16,213     4.14 %  
Short-term investments   573       -     0.03       1,111       2     0.18    
Securities   20,296       600     3.95       25,291       777     4.10    
Total interest-earning assets   498,763       15,727     4.20       546,883       16,992     4.13    
                             
Noninterest-earning assets   152,323                 96,310              
                             
TOTAL ASSETS $ 651,086               $ 643,193              
                             
LIABILITIES AND SHAREHOLDERS' EQUITY                            
Interest-bearing deposits $ 434,307     $ 1,632     0.50     $ 433,423     $ 4,050     1.25    
Borrowings   26,256       526     2.64       44,008       672     2.01    
Total interest-bearing liabilities   460,563       2,158     0.62       477,431       4,722     1.32    
                             
Noninterest-bearing liabilities   128,161                 106,086              
Shareholders' equity   62,362                 59,676              
                             
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 651,086               $ 643,193              
Interest rate spread         3.58 %           2.81 %  
Net interest income/margin     $ 13,569     3.62 %       $ 12,270     2.98 %  
                             
      Quarter Ended
(Dollars in Thousands, Except Per Share Data)   9/30/2021   6/30/2021 3/31/2021 12/31/2020 9/30/2020  
Operating Data                      
  Net income $ 1,511   $ 1,402   $ 1,204   $ 1,284   $ 948    
  Net interest income   4,708     4,340     4,521     4,310     3,852    
  Provision for loan losses   -     -     150     375     450    
  Net security gains   -     -     -     -     -    
  Non-interest income, ex. Net security gains   1,564     1,347     1,925     2,504     1,928    
  Non-interest expense   4,307     3,904     4,700     4,771     4,155    
Performance Statistics                      
  Net interest margin   3.81 %   3.48 %   3.57 %   3.24 %   2.81 %  
  Annualized return on average assets   0.92 %   0.86 %   0.75 %   0.78 %   0.55 %  
  Annualized return on average equity   9.49 %   9.03 %   7.93 %   8.40 %   6.27 %  
  Annualized net loan charge-offs to avg loans   0.14 %   0.06 %   0.03 %   0.03 %   0.04 %  
  Net charge-offs   164     74     40     38     57    
  Efficiency ratio   68.7 %   68.6 %   72.9 %   70.0 %   71.9 %  
Per Share Data                      
  Basic earnings per share $ 0.43   $ 0.40   $ 0.34   $ 0.37   $ 0.27    
  Diluted earnings per share   0.43     0.40     0.34     0.37     0.27    
  Dividend declared per share   0.15     0.15     0.15     0.15     0.15    
  Book value   17.86     17.57     17.34     17.23     17.01    
  Common stock price:                      
    High   14.75     15.05     15.96     13.25     11.18    
    Low   12.80     13.23     11.48     10.44     10.30    
    Close   13.34     14.31     13.50     11.50     11.02    
  Weighted average common shares:                      
    Basic   3,522     3,519     3,515     3,512     3,509    
    Fully diluted   3,524     3,520     3,515     3,512     3,509    
  End-of-period common shares:                      
    Issued   3,641     3,641     3,636     3,617     3,617    
    Treasury   94     94     94     94     94    
                           
                           
Financial Condition Data:                      
General                      
  Total assets $ 643,596   $ 648,686   $ 659,333   $ 644,587   $ 674,032    
  Loans, net   458,631     465,271     476,383     478,013     504,946    
  Intangibles   12,320     12,320     12,320     12,320     12,320    
  Total deposits   544,763     551,245     562,893     547,021     551,350    
    Noninterest-bearing   118,511     121,534     121,101     109,346     107,423    
    Savings   95,299     93,351     87,228     82,573     79,492    
    NOW   114,514     111,343     111,414     100,293     98,464    
    Money Market   36,577     32,624     35,011     35,920     34,375    
    Time deposits   179,862     192,393     208,139     218,889     231,596    
    Total interest-bearing deposits   426,252     429,711     441,792     437,675     443,927    
  Shareholders' equity   63,396     62,375     61,462     60,761     59,960    
Asset Quality                      
  Non-performing assets $ 3,645   $ 5,023   $ 5,602   $ 5,304   $ 5,507    
  Non-performing assets to total assets   0.57 %   0.77 %   0.85 %   0.82 %   0.82 %  
  Allowance for loan losses   5,627     5,791     5,865     5,755     5,418    
  Allowance for loan losses to total loans   1.21 %   1.23 %   1.22 %   1.19 %   1.06 %  
  Allowance for loan losses to                      
    non-performing loans   175.95 %   116.12 %   108.63 %   112.67 %   104.11 %  
  Non-performing loans to total loans   0.70 %   1.07 %   1.13 %   1.07 %   1.03 %  
Capitalization                      
  Shareholders' equity to total assets   9.85 %   9.62 %   9.32 %   9.43 %   8.90 %  

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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