Elmira Savings Bank Reports First Quarter Earnings

ELMIRA, NY--(Marketwired - Apr 26, 2016) -  Elmira Savings Bank (NASDAQ: ESBK)

Highlights

• Net income was $1,036,000 for the three months ended March 31, 2016 compared to $1,010,000 for the same period in 2015.
  
  
• Diluted earnings per share were $.30 per share for the three months ended March 31, 2016 compared to $.28 per share for the same period in 2015. 
  
  
• Return on average assets was .74% for the three months ended March 31, 2016 and for the same period in 2015.
  
  
• Return on average equity was 7.52% for the three months ended March 31, 2016 compared to 7.29% for the same period in 2015.
  
  

"We are pleased with the year-over-year improvement in first quarter earnings, due in part to an increase in our net interest margin," said Thomas M. Carr, President and CEO. Carr continued, "We also experienced a 29% increase in residential mortgage originations resulting in an increase of $168,000 in gain on sale of mortgages from last year."

Net Income

Net income totaled $1,036,000 for the three months ended March 31, 2016, an increase of $26,000 or 2.6% from the $1,010,000 recorded for the same period in 2015. This increase was the net result of an increase in net interest income of $275,000, an increase in noninterest income of $116,000, and a reduction in tax expense of $3,000, offset by an increase in noninterest expense of $278,000 and an increase in the provision for loan losses of $90,000.

Basic and diluted earnings per share for the three months ended March 31, 2016 were both $.30 per share compared to $.29 per share and $.28 per share for the same period in 2015.

Net Interest Margin

The net interest margin for the three months ended March 31, 2016 was 3.19% compared to 3.07% for the first quarter of 2015. The yield on average earning assets was 4.07% for the three months ended March 31, 2016 compared to 4.09% for the same period in 2015. The average cost of interest-bearing liabilities was 1.04% for the three months ended March 31, 2016 compared to 1.19% for the three months ended March 31, 2015.

Assets

Total assets decreased $1.3 million or 0.2% to $560.0 million at March 31, 2016 compared to $561.3 million at December 31, 2015. Loans receivable increased 1.2% to $456.9 million at March 31, 2016 compared to December 31, 2015. The available-for-sale investment portfolio decreased $5.2 million from December 31, 2015 to March 31, 2016.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 1.10% at March 31, 2016 and 1.05% at December 31, 2015. Net loan charge-offs to average loans for the three months ended March 31, 2016 of .07% increased from .02% for the three months ended March 31, 2015. The allowance for loan losses was .92% of total loans at March 31, 2016 and .92% at December 31, 2015.

Liabilities

Deposits totaled $443.6 million at March 31, 2016, an increase of $3.1 million or .7% from the December 31, 2015 total of $440.5 million. Borrowed funds decreased by $3.2 million or 5.4%.

Shareholders' Equity

Shareholders' equity increased $268,000 to $55.0 million at March 31, 2016 compared to December 31, 2015. The current level of shareholders' equity equates to a book value per share of $16.59 at March 31, 2016, compared to $16.53 at December 31, 2015. Dividends paid to common shareholders were $0.23 for the three months ended both March 31, 2016 and 2015. 

Elmira Savings Bank, with $560.0 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)			March 31,				December 31,
			2016				2015				% Change
ASSETS
Cash and due from banks			$	5,631			$	5,352			5.2	%
Federal funds sold and other short-term investments				101				102			-1.0	%
Total cash and cash equivalents				5,732				5,454			5.1	%
Securities available for sale, at fair value				37,492				42,709			-12.2	%
Securities held to maturity - fair value $9,201 at March 31, 2016 and $9,010 at December 31, 2015				8,910				9,003			-1.0	%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost				10,879				11,108			-2.1	%
Loans held for sale				2,033				3,630			-44.0	%
Loans receivable				456,932				451,368			1.2	%
Less: Allowance for loan losses				4,214				4,148			1.6	%
	Net loans			452,718				447,220			1.2	%
Premises and equipment, net				12,086				12,130			-0.4	%
Bank-owned life insurance				13,285				13,188			0.7	%
Accrued interest receivable				1,610				1,541			4.5	%
Intangible assets, net				51				61			-16.4	%
Goodwill				12,320				12,320			0.0	%
Other assets				2,904				2,980			-2.6	%
	Total assets		$	560,020			$	561,344			-0.2	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits			$	443,552			$	440,472			0.7	%
Borrowings				56,300				59,525			-5.4	%
Other liabilities				5,129				6,576			-22.0	%
	Total liabilities			504,981				506,573			-0.3	%
Shareholders' equity:
Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares authorized; 10,000 shares issued at March 31, 2016 and at December 31, 2015				9,700				9,700			0.0	%
Common stock, $1 par value; authorized 5,000,000 shares; 2,827,804 shares issued at March 31, 2016 and 2,820,745 shares issued at December 31, 2015				2,828				2,821			0.2	%
Additional paid-in capital				41,328				41,243			0.2	%
Retained earnings				3,672				3,488			5.3	%
Treasury stock, at cost - 98,118 shares at March 31, 2016 and at December 31, 2015				(2,907	)			(2,907	)		0.0	%
Accumulated other comprehensive income				365				373			-2.1	%
	Total Elmira Savings Bank shareholders' equity			54,986				54,718			0.5	%
Noncontrolling interest				53				53			0.0	%
	Total shareholders' equity			55,039				54,771			0.5	%
	Total liabilities and shareholders' equity		$	560,020			$	561,344			-0.2	%

ELMIRA SAVINGS BANK
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
				Three Months Ended
				March 31,
(in thousands, except for per share data)				2016			2015			% Change
Interest and dividend income:
	Interest and fees on loans			$	4,729		$	4,462		6.0	%
	Interest and dividends on securities
		Taxable			285			402		-29.1	%
		Non-taxable			219			231		-5.2	%
		Total interest and dividend income			5,233			5,095		2.7	%
Interest expense:
	Interest on deposits				734			727		1.0	%
	Interest on borrowings				399			543		-26.5	%
		Total interest expense			1,133			1,270		-10.8	%
Net interest income					4,100			3,825		7.2	%
Provision for loan losses					140			50		180.0	%
Net interest income after provision for loan losses					3,960			3,775		4.9	%
Noninterest income:
	Service fees				348			355		-2.0	%
	Gain on sale of loans held for sale				522			354		47.5	%
	Gain on sale of securities				180			204		-11.8	%
	Other service fees				180			169		6.5	%
	Earnings on bank-owned life insurance				97			94		3.2	%
	Other				24			59		-59.3	%
		Total noninterest income			1,351			1,235		9.4	%
Noninterest expense:
	Salaries and benefits				1,927			1,794		7.4	%
	Net occupancy				369			392		-5.9	%
	Equipment				275			254		8.3	%
	Marketing and public relations				201			211		-4.7	%
	Professional fees				180			180		0.0	%
	Other				895			738		21.3	%
		Total noninterest expense			3,847			3,569		7.8	%
Income before income taxes					1,464			1,441		1.6	%
Income taxes					428			431		-0.7	%
Net income					1,036			1,010		2.6	%
Less: Net income attributable to noncontrolling interest					-			-		-
Net income attibutable to Elmira Savings Bank					1,036			1,010		2.6	%
Dividend on preferred stock					225			225		0.0	%
Income available to common shareholders				$	811		$	785		3.3	%
Basic earnings per share				$	0.30		$	0.29		3.4	%
Diluted earnings per share				$	0.30		$	0.28		7.1	%
Weighted average shares outstanding - basic					2,715,915			2,700,542		0.6	%
Weighted average shares outstanding - diluted					2,733,014			2,811,600		-2.8	%
Dividends per share				$	0.23		$	0.23		0.0	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)	For the Three Months Ended
	March 31, 2016									March 31, 2015
ASSETS:	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans	$	453,828		$	4,729		4.17	%		$	417,480		$	4,462		4.29	%
Short-term investments		381			-		0.16				1,510			1		0.03
Securities		59,630			504		3.38				81,785			632		3.10
Total interest-earning assets		513,839			5,233		4.07				500,775			5,095		4.09
Noninterest-earning assets		48,009									54,161
TOTAL ASSETS	$	561,848								$	554,936
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits	$	374,605		$	734		0.79			$	358,257		$	727		0.82
Borrowings		58,997			399		2.68				71,822			543		3.02
Total interest-bearing liabilities		433,602			1,133		1.04				430,079			1,270		1.19
Noninterest-bearing liabilities		72,848									68,726
Shareholders' equity		55,398									56,131
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	561,848								$	554,936
Interest rate spread							3.03	%								2.90	%
Net interest income/margin				$	4,100		3.19	%					$	3,825		3.07	%

								Quarter Ended
(Dollars in Thousands, Except Per Share Data)				3/31/2016				12/31/2015				9/30/2015				6/30/2015				3/31/2015
Operating Data
	Net income			$	1,036			$	1,036			$	1,057			$	1,019			$	1,010
	Net interest income				4,100				4,128				3,852				3,829				3,825
	Provision for loan losses				140				270				170				140				50
	Net security gains				180				-				-				80				204
	Non-interest income, ex. Net security gains				1,171				1,382				1,539				1,155				1,031
	Non-interest expense				3,847				3,777				3,725				3,522				3,569
Performance Statistics
	Net interest margin				3.19	%			3.19	%			2.97	%			3.04	%			3.07	%
	Annualized return on average assets				0.74	%			0.73	%			0.73	%			0.72	%			0.74	%
	Annualized return on average equity				7.52	%			7.46	%			7.60	%			7.39	%			7.29	%
	Annualized net loan charge-offs to avg loans				0.07	%			0.18	%			0.10	%			0.11	%			0.02	%
	Net charge-offs (recoveries)				74				204				117				114				21
	Efficiency ratio				70.6	%			68.5	%			69.1	%			69.5	%			70.5	%
Per Share Data
	Basic earnings per share			$	0.30			$	0.30			$	0.31			$	0.29			$	0.29
	Diluted earnings per share				0.30				0.30				0.30				0.29				0.28
	Dividend declared per share				0.23				0.23				0.23				0.23				0.23
	Book value				16.59				16.53				16.49				16.34				16.96
	Common stock price:
		High			20.55				21.13				20.81				20.82				23.00
		Low			16.83				18.41				19.05				19.43				19.99
		Close			18.01				19.88				19.20				20.09				20.40
	Weighted average common shares:
		Basic			2,716				2,712				2,710				2,707				2,701
		Fully diluted			2,733				2,731				2,730				2,776				2,812
	End-of-period common shares:
		Issued			2,828				2,821				2,821				2,821				2,813
		Treasury			98				98				98				98				98
Financial Condition Data:
General
	Total assets			$	560,020			$	561,344			$	566,228			$	572,890			$	562,185
	Loans, net				452,718				447,220				438,777				431,993				416,235
	Intangibles				12,371				12,381				12,396				12,412				12,428
	Total deposits				443,552				440,472				442,046				437,663				426,075
		Noninterest-bearing			65,165				66,964				72,293				68,707				64,442
		Savings			67,295				66,914				64,421				64,758				63,776
		NOW			105,094				87,083				85,136				86,835				78,169
		Money Market			25,281				23,382				19,912				20,678				22,112
		Time deposits			180,717				196,129				200,284				196,685				197,576
		Total interest-bearing deposits			378,387				373,508				369,753				368,956				361,633
	Shareholders' equity				55,039				54,771				54,657				54,233				55,818
Asset Quality
	Non-performing assets			$	5,328			$	4,943			$	4,545			$	4,430			$	4,790
	Non-performing assets to total assets				0.95	%			0.88	%			0.80	%			0.77	%			0.85	%
	Allowance for loan losses				4,214				4,148				4,082				4,028				4,002
	Allowance for loan losses to total loans				0.92	%			0.92	%			0.92	%			0.92	%			0.95	%
	Allowance for loan losses to non-performing loans				83.69	%			87.66	%			91.20	%			91.75	%			83.55	%
	Non-performing loans to total loans				1.10	%			1.05	%			1.01	%			1.01	%			1.14	%
Capitalization
	Shareholders' equity to total assets				9.83	%			9.76	%			9.65	%			9.47	%			9.93	%