Elmira Savings Bank Reports 2015 Earnings

ELMIRA, NY--(Marketwired - Jan 27, 2016) - Elmira Savings Bank (NASDAQ: ESBK)

Highlights

• Net income was $1,036,000 and $4,122,000 for the three and twelve months ended December 31, 2015 compared to $1,031,000 and $3,665,000 for the same periods in 2014.
  
  
• Diluted earnings per share were $.30 per share and $1.17 per share for the three and twelve months ended December 31, 2015 compared to $.29 per share and $.99 per share for the same periods in 2014. 
  
  
• Return on average assets (annualized) was .73% for both the three and twelve months ended December 31, 2015 compared to .76% and .70% for the same periods in 2014.
  
  
• Return on average equity (annualized) was 7.46% and 7.43% for the three and twelve months ended December 31, 2015 compared to 7.34% and 6.60% for the same periods in 2014.
  
  

Net Income

Net income totaled $1,036,000 for the three months ended December 31, 2015, an increase of $5,000 or 0.5% from the $1,031,000 recorded for the same period in 2014. This increase was the net result of an increase in noninterest income of $343,000, an increase in net interest income of $110,000 and a decrease in income tax expense of $54,000, offset by an increase in the provision for loan losses of $130,000 and an increase in noninterest expense of $371,000.

Net income totaled $4,122,000 for the twelve months ended December 31, 2015, an increase of $457,000 or 12.5% from the $3,665,000 of net income recorded for the same period in 2014. This increase was the net result of an increase in noninterest income of $633,000 and an increase in net interest income of $222,000, offset by an increase in the provision for loan losses of $223,000, an increase in noninterest expense of $90,000, and an increase in income tax expense of $85,000.

"The year 2015 was a successful one for the company. We expanded into Watkins Glen with our 13^th full-service branch. We achieved a 12% increase in earnings, supported by 8% growth in the loan portfolio and 4% growth in the deposit base," said Thomas M. Carr, President and CEO. Carr continued, "We also had significant accomplishments in improving our internal processes and systems, with an emphasis on becoming more focused on organic growth."

Basic and diluted earnings per share for the twelve months ended December 31, 2015 were $1.19 per share and $1.17 per share compared to $1.03 per share and $.99 per share for the same periods in 2014. Both basic and diluted earnings per share for the three months ended December 31, 2015 were $.30 per share compared to $.30 per share and $.29 per share for the same periods in 2014.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2015 was 3.07% compared to 3.23% for the same period in 2014. The yield on average earning assets was 4.06% for the twelve months ended December 31, 2015 compared to 4.24% for the same period in 2014. The average cost of interest-bearing liabilities was 1.16% for the twelve months ended December 31, 2015 compared to 1.21% for the same period in 2014.

The net interest margin for the three months ended December 31, 2015 was 3.19% compared to 3.24% for the same period in 2014. The average yield on earning assets was 4.09% for the three months ended December 31, 2015 compared to 4.23% for the same period in 2014. The average cost of interest-bearing liabilities was 1.07% for the three months ended December 31, 2015 compared to 1.18% for the same period in 2014.

Assets

Total assets increased $15.4 million or 2.8% to $561.3 million at December 31, 2015 compared to $546.0 million at December 31, 2014. Loans receivable increased 8.2% to $451.4 million at December 31, 2015 compared to December 31, 2014. The available-for-sale investment portfolio decreased $22.9 million from December 31, 2014 to December 31, 2015.

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to 1.05% at December 31, 2015 from 1.13% at December 31, 2014. Net loan charge-offs to average loans for the twelve months ended December 31, 2015 of 0.11% increased from 0.07% for the twelve months ended December 31, 2014. The allowance for loan losses was 0.92% of total loans at December 31, 2015 and 0.95% of total loans at December 31, 2014.

Liabilities

Deposits total $440.5 million at December 31, 2015, an increase of $17.9 million or 4.2%. The $17.9 million increase consists of an $8.2 million increase in interest-bearing transaction accounts, a $4.9 million increase in noninterest-bearing accounts, a $2.9 million increase in money market accounts, a $1.6 million increase in savings accounts, and a $.3 million increase in time deposits. Borrowed funds decreased by $2.5 million or 4.0%.

Shareholders' Equity

Shareholders' equity decreased $0.7 million to $54.8 million at December 31, 2015 compared to December 31, 2014. The decrease is primarily the result of the repurchase of a warrant in May 2015 that had been issued to the United States Treasury Department at a purchase price of $1.5 million. The current level of shareholders' equity equates to a book value per share of $16.53 at December 31, 2015, compared to $16.91 at December 31, 2014. Dividends paid to common shareholders were $0.23 and $0.92 for the three and twelve months ended for both December 31, 2015 and 2014.

Elmira Savings Bank, with $561.3 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 and a loan center in Tompkins County, NY; two offices in Steuben County, NY; one office in Cayuga County, NY; one office in Schuyler County; a loan center in Cortland County, NY; 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,
			2015				2014				% Change
ASSETS
Cash and due from banks			$	5,352			$	7,959			-32.8	%
Federal funds sold and other short-term investments				102				606			-83.2	%
	Total cash and cash equivalents			5,454				8,565			-36.3	%
Securities available for sale, at fair value				42,709				65,624			-34.9	%
Securities held to maturity - fair value $9,010 at December 31, 2015, and $7,641 at December 31, 2014				9,003				7,389			21.8	%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost				11,108				11,182			-0.7	%
Loans held for sale				3,630				787			361.2	%
Loans receivable				451,368				417,359			8.1	%
Less: Allowance for loan losses				4,148				3,974			4.4	%
	Net loans			447,220				413,385			8.2	%
Premises and equipment, net				12,130				9,475			28.0	%
Bank-owned life insurance				13,188				12,790			3.1	%
Accrued interest receivable				1,541				1,566			-1.6	%
Intangible assets, net				61				125			-51.2	%
Goodwill				12,320				12,320			-
Other assets				2,980				2,761			7.9	%
	Total assets		$	561,344			$	545,969			2.8	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits			$	440,472			$	422,561			4.2	%
Borrowings				59,525				62,000			-4.0	%
Other liabilities				6,576				5,915			11.2	%
	Total liabilities			506,573				490,476			3.3	%
Shareholders' equity:
Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares authorized; 10,000 shares issued at December 31, 2015 and at December 31, 2014				9,700				9,700			-
Common stock, $1 par value; authorized 5,000,000 shares; 2,820,745 shares issued at December 31, 2015 and 2,809,364 shares issued at December 31, 2014				2,821				2,809			0.4	%
Additional paid-in capital				41,243				42,365			-2.6	%
Retained earnings				3,488				2,769			26.0	%
Treasury stock, at cost - 98,118 shares at December 31, 2015 and 104,418 shares at December 31, 2014				(2,907	)			(3,053	)		-4.8	%
Accumulated other comprehensive income				373				849			-56.1	%
	Total Elmira Savings Bank shareholders' equity			54,718				55,439			-1.3	%
Noncontrolling interest				53				54			-1.9	%
	Total shareholders' equity			54,771				55,493			-1.3	%
	Total liabilities and shareholders' equity		$	561,344			$	545,969			2.8	%

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)				2015			2014			% Change			2015			2014			% Change
Interest and dividend income:
	Interest and fees on loans			$	4,762		$	4,598		3.6	%		$	18,418		$	17,709		4.0	%
	Interest and dividends on securities
		Taxable			304			390		-22.1	%			1,367			1,659		-17.6	%
		Non-taxable			240			270		-11.1	%			949			899		5.6	%
		Total interest and dividend income			5,306			5,258		0.9	%			20,734			20,267		2.3	%
Interest expense:
	Interest on deposits				762			746		2.1	%			3,016			2,986		1.0	%
	Interest on borrowings				416			494		-15.8	%			2,084			1,869		11.5	%
		Total interest expense			1,178			1,240		-5.0	%			5,100			4,855		5.0	%
Net interest income					4,128			4,018		2.7	%			15,634			15,412		1.4	%
Provision for loan losses					270			140		92.9	%			630			407		54.8	%
Net interest income after provision for loan losses					3,858			3,878		-0.5	%			15,004			15,005		0.0	%
Noninterest income:
	Service fees				372			363		2.5	%			1,471			1,437		2.4	%
	Gain on sale of loans held for sale				701			357		96.4	%			2,382			1,633		45.9	%
	Gain on sale of securities				-			-		-				284			422		-32.7	%
	Other service fees				184			177		4.0	%			716			687		4.2	%
	Earnings on bank-owned life insurance				100			96		4.2	%			398			404		-1.5	%
	Other				25			46		-45.7	%			140			175		-20.0	%
		Total noninterest income			1,382			1,039		33.0	%			5,391			4,758		13.3	%
Noninterest expense:
	Salaries and benefits				1,917			1,609		19.1	%			7,324			7,692		-4.8	%
	Net occupancy				337			352		-4.3	%			1,383			1,416		-2.3	%
	Equipment				281			249		12.9	%			1,061			1,012		4.8	%
	Marketing and public relations				197			270		-27.0	%			832			884		-5.9	%
	Professional fees				145			167		-13.2	%			773			690		12.0	%
	Other				900			759		18.6	%			3,220			2,809		14.6	%
		Total noninterest expense			3,777			3,406		10.9	%			14,593			14,503		0.6	%
Income before income taxes					1,463			1,511		-3.2	%			5,802			5,260		10.3	%
Income taxes					422			476		-11.3	%			1,675			1,590		5.3	%
Net income					1,041			1,035		0.6	%			4,127			3,670		12.5	%
Less: Net income attributable to noncontrolling interest					5			5		-				5			5		-
Net income attibutable to Elmira Savings Bank					1,036			1,031		0.5	%			4,122			3,665		12.5	%
Dividend on preferred stock					225			225		0.0	%			900			900		0.0	%
Income available to common shareholders				$	811		$	805		0.7	%		$	3,222		$	2,765		16.5	%
Basic earnings per share				$	0.30		$	0.30		0.0	%		$	1.19		$	1.03		15.5	%
Diluted earnings per share				$	0.30		$	0.29		3.4	%		$	1.17		$	0.99		18.2	%
Weighted average shares outstanding - basic					2,712,052			2,692,833		0.7	%			2,707,491			2,677,252		1.1	%
Weighted average shares outstanding - diluted					2,731,078			2,807,591		-2.7	%			2,762,332			2,799,670		-1.3	%
Dividends per share				$	0.23		$	0.23		0.0	%		$	0.92		$	0.92		0.0	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)		For the Twelve Months Ended
		December 31, 2015									December 31, 2014
ASSETS:		Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans		$	433,397		$	18,418		4.24	%		$	398,416		$	17,709		4.44	%
Short-term investments			847			-		0.03				1,069			1		0.02
Securities			75,228			2,316		3.08				77,349			2,557		3.31
Total interest-earning assets			509,472			20,734		4.06				476,834			20,267		4.24
Noninterest-earning assets			54,990									44,418
TOTAL ASSETS		$	564,462								$	521,252
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits		$	365,142		$	3,016		0.83			$	339,720		$	2,986		0.88
Borrowings			70,773			2,084		2.90				60,263			1,869		3.06
Total interest-bearing liabilities			435,915			5,100		1.16				399,983			4,855		1.21
Noninterest-bearing liabilities			73,103									65,727
Shareholders' equity			55,444									55,542
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	564,462								$	521,252
Interest rate spread								2.90	%								3.03	%
Net interest income/margin					$	15,634		3.07	%					$	15,412		3.23	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)		For the Three Months Ended
		December 31, 2015									December 31, 2014
ASSETS:		Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans		$	447,731		$	4,762		4.23	%		$	413,733		$	4,598		4.42	%
Short-term investments			177			-		0.10				1,318			-		0.02
Securities			67,996			544		3.19				79,810			660		3.30
Total interest-earning assets			515,904			5,306		4.09				494,861			5,258		4.23
Noninterest-earning assets			47,119									45,947
TOTAL ASSETS		$	563,023								$	540,808
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits		$	369,180		$	762		0.82			$	348,115		$	746		0.85
Borrowings			64,134			416		2.54				68,105			494		2.85
Total interest-bearing liabilities			433,314			1,178		1.07				416,220			1,240		1.18
Noninterest-bearing liabilities			74,581									68,841
Shareholders' equity			55,128									55,747
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	563,023								$	540,808
Interest rate spread								3.02	%								3.05	%
Net interest income/margin					$	4,128		3.19	%					$	4,018		3.24	%

				Quarter Ended
(Dollars in Thousands, Except Per Share Data)				12/31/2015				9/30/2015				6/30/2015				3/31/2015				12/31/2014
Operating Data
	Net income			$	1,036			$	1,057			$	1,019			$	1,010			$	1,031
	Net interest income				4,128				3,852				3,829				3,825				4,018
	Provision for loan losses				270				170				140				50				140
	Net security gains				-				-				80				204				-
	Non-interest income, ex. Net security gains				1,382				1,539				1,155				1,031				1,039
	Non-interest expense				3,777				3,725				3,522				3,569				3,406
Performance Statistics
	Net interest margin				3.19	%			2.97	%			3.04	%			3.07	%			3.24	%
	Annualized return on average assets				0.73	%			0.73	%			0.72	%			0.74	%			0.76	%
	Annualized return on average equity				7.46	%			7.60	%			7.39	%			7.29	%			7.37	%
	Annualized net loan charge-offs to avg loans				0.18	%			0.10	%			0.11	%			0.02	%			0.09	%
	Net charge-offs (recoveries)				204				117				114				21				94
	Efficiency ratio				68.5	%			69.1	%			69.5	%			70.5	%			67.4	%
Per Share Data
	Basic earnings per share			$	0.30			$	0.31			$	0.29			$	0.29			$	0.30
	Diluted earnings per share				0.30				0.30				0.29				0.28				0.29
	Dividend declared per share				0.23				0.23				0.23				0.23				0.23
	Book value				16.53				16.49				16.34				16.96				16.91
	Common stock price:
		High			21.13				20.81				20.82				23.00				23.00
		Low			18.41				19.05				19.43				19.99				20.50
		Close			19.88				19.20				20.09				20.40				23.00
	Weighted average common shares:
		Basic			2,712				2,710				2,707				2,701				2,693
		Fully diluted			2,731				2,730				2,776				2,812				2,808
	End-of-period common shares:
		Issued			2,821				2,821				2,821				2,813				2,809
		Treasury			98				98				98				98				104
Financial Condition Data:
General
	Total assets			$	561,344			$	566,228			$	572,890			$	562,185			$	545,969
	Loans, net				447,220				438,777				431,993				416,235				413,385
	Intangibles				12,381				12,396				12,412				12,428				12,445
	Total deposits				440,472				442,046				437,663				426,075				422,561
		Noninterest-bearing			66,964				72,293				68,707				64,442				62,019
		Savings			66,914				64,421				64,758				63,776				65,287
		NOW			87,083				85,136				86,835				78,169				78,920
		Money Market			23,382				19,912				20,678				22,112				20,512
		Time deposits			196,129				200,284				196,685				197,576				195,823
		Total interest-bearing deposits			373,508				369,753				368,956				361,633				360,542
	Shareholders' equity				54,771				54,657				54,233				55,818				55,493
Asset Quality
	Non-performing assets			$	4,943			$	4,545			$	4,430			$	4,790			$	4,699
	Non-performing assets to total assets				0.88	%			0.80	%			0.77	%			0.85	%			0.86	%
	Allowance for loan losses				4,148				4,082				4,028				4,002				3,974
	Allowance for loan losses to total loans				0.92	%			0.92	%			0.92	%			0.95	%			0.95	%
	Allowance for loan losses to non-performing loans				87.66	%			91.20	%			91.75	%			83.55	%			84.57	%
	Non-performing loans to total loans				1.05	%			1.01	%			1.01	%			1.14	%			1.13	%
Capitalization
	Shareholders' equity to total assets				9.76	%			9.65	%			9.47	%			9.93	%			10.16	%