ISLANDIA, NY--(Marketwired - Oct 29, 2013) - Empire Bancorp, Inc., the holding company for Empire National Bank (
- Total assets of $470.1 million, a $31.7 million, or 7.2%, increase from December 31, 2012
- Total loans of $272.1 million, a $28.4 million, or 11.7%, increase from December 31, 2012
- Solid asset quality with a ratio of non-performing loans to total loans of 0.90%
- Net income for the quarter ended September 30, 2013 of $362 thousand; an increase of $217 thousand or 150.0%, over the quarter ended September 30, 2012
- Net income for the nine months ended September 30, 2013 of $925 thousand
- Earnings before income taxes for the nine months (excluding the impact of net gains on sales of investment securities) ended September 30, 2013 of $1.7 million; an increase of $746 thousand, or 81.6%, over the nine months ended September 30, 2012
- "Well capitalized" regulatory capital levels, as of September 30, 2013:
- Tier 1 leverage capital ratio of 8.85%
- Tier 1 risk-based capital ratio of 13.54%
- Total risk-based capital ratio of 14.79%
Douglas C. Manditch, Chairman and Chief Executive Officer, stated "We are pleased with the significant increase in net income for the third quarter as compared to the period last year. We are also pleased with the overall progress of the institution, and the continued high level of asset quality. We have experienced a significant increase in our loan pipeline since February 2012, when The Office of the Comptroller of the Currency lifted a two year ban on our solicitation of loan activity. In addition, we have made investments in additional staff for our recently opened Mineola branch, our first in Nassau County, and the expansion of our loan department. We also continue to make significant investments in our electronic services and earlier this month introduced our 24 hour call center, providing a higher level of personalized customer care for our clients. We also have completed our reorganization into a holding company structure, which was approved by our shareholders in May of this year."
Earnings for the Third Quarter Ended September 30, 2013
Net income was $362 thousand, or $0.08 per share, for the third quarter of 2013, compared to $145 thousand, or $0.03 per share, for the third quarter of 2012, representing an increase of $217 thousand, or $0.05 per share. This increase in net income is largely attributable to the an increase in net interest income of $252 thousand and a decrease in the provision for loan losses of approximately $285 thousand, partially offset by increases in total other expenses of $177 thousand as compared to the same period last year. Earnings before income taxes increased $369 thousand, or 134.2%, to $644 thousand as compared to the same quarter last year.
As compared to the third quarter of 2012, other income increased $103 thousand to $249 thousand. Professional practice revenues totaled $69 thousand of that increase. No gains or losses on sales of investment securities were taken in the third quarter of 2013 as compared to a net gain of $94 thousand recognized on sales on investment securities in the third quarter of 2012. The net interest income increase of $252 thousand reflects the impact of the growth in our average loan and securities portfolio, partially offset by lower asset yields. The bank's net interest margin was 3.22% for the quarter ended September 30, 2013. The increase in other expenses of approximately $177 thousand was due largely to costs associated with the bank's branch expansion into Nassau County with the opening of its Mineola branch office, and the implementation of director fees paid in 2013, based upon participation in board and committee meetings. During the quarter, declines in the bank's FDIC insurance expense partially offset these increases.
Earnings for the Nine Months Ended September 30, 2013
Net income for the nine months ended September 30, 2013 was $925 thousand compared to $3.2 million for the nine months ended September 30, 2012, a decrease of $2.3 million. This reduction in net income was largely attributable to the decrease of approximately $1.3 million in net gains on sales of securities for the nine months ended September 30, 2013 as compared to the same period last year. Tax benefits recognized for the nine months ended September 30, 2012 as compared to the provision for income taxes for the same period in 2013, resulted in a reduction to net income of approximately $1.8 million in 2013.
As compared to the nine months ended September 30, 2012, other income increased approximately $326 thousand, or 72.3%, net interest income increased by $499 thousand, or 4.9%, and total other expenses increased by approximately $364 thousand, or 3.9%. Gains on sales of investment securities decreased approximately $1.3 million. Professional practice revenue, recognized for the first time in 2013, was approximately $244 thousand. For the nine months ended September 30, 2013, the bank's net interest income was approximately $10.6 million, an increase of $499 thousand, or 4.9%. Net interest income reflects the growth in average volume of loans and investment securities partially offset by the impact of lower asset yields in the current year. The bank's net interest margin was 3.27% for the nine months ended September 30, 2013 as compared to 3.57% for the first nine months of 2012. The increase in other expenses resulted primarily from expenses associated with expansion into new markets and services. Salaries and benefits increased $239 thousand, or 5.3%, over the first nine months of the prior year as the bank staffed to meet these new demands. Costs relative to servicing the bank's professional practice clients also increased in the current year. No provision for loan losses was recorded in the nine months ended September 30, 2013, as compared to $285 thousand in the same period of 2012. The bank's effective income tax rate for the nine months ended September 30, 2013 was approximately 44.4%, which reflects its blended federal and state income tax rates.
Balance Sheet and Asset Quality
Total assets were $470.1 million at September 30, 2013, an increase of $31.7 million, or 7.2%, from December 31, 2012, which was primarily attributable to an increase in outstanding loan balances of $28.4 million, or 11.7%. Management remains confident in the credit quality of the bank's assets. The bank's ratio of non-performing loans to total loans declined to 0.90% as of September 30, 2013 with the allowance for loan losses at 1.56% of total loans.
Total deposits were $372.3 million at September 30, 2013, an increase of $8.9 million, or 2.4%. Average demand deposits for the first nine months of 2013 totaled $166.1 million, as compared to average demand deposits of $119.2 million over the same period in 2012, representing an increase of $46.9 million, or 39.4%.
Stockholders' equity decreased from $42.2 million to $39.2 million from December 31, 2012 to September 30, 2013, primarily reflecting a decrease in accumulated comprehensive income as a result of the impact of an increase in interest rates on the market value of the bank's investment securities portfolio. At September 30, 2013, the bank was "well capitalized" as defined by OCC regulation, with leverage, Tier 1 risk-based and total risk-based capital ratios of 8.85%, 13.54% and 14.79%, respectively.
Opportunities and Challenges
"We remain concerned with interest rate risk, which requires our constant balance sheet management and possible adjustment in asset mix, with our primary objective to obtain increased long term revenue growth when market conditions allow. Our stable approach to managing the bank has resulted in the growth of our loan portfolio, while maintaining solid asset quality. Our progress is expected to positively impact our margins, our bottom line and ultimately long-term value to our shareholders," commented Thomas M. Buonaiuto, President and Chief Operating Officer.
| Balance Sheet (unaudited) | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| September 30, | June 30, | December 31, | September 30, | ||||||||||||||
| 2013 | 2013 | 2012 | 2012 | ||||||||||||||
| ASSETS | |||||||||||||||||
| Total cash and cash equivalents | $ | 8,454 | $ | 8,574 | $ | 4,908 | $ | 44,470 | |||||||||
| Securities available for sale, at fair value | 175,224 | 177,011 | 180,202 | 143,589 | |||||||||||||
| Securities held to maturity | 300 | 300 | - | - | |||||||||||||
| Securities, restricted | 4,340 | 3,909 | 3,183 | 1,788 | |||||||||||||
| Loans, net | 267,816 | 250,349 | 239,211 | 237,730 | |||||||||||||
| Premises and equipment, net | 6,688 | 6,569 | 6,412 | 6,612 | |||||||||||||
| Other assets and accrued interest receivable | 7,275 | 7,884 | 4,483 | 3,813 | |||||||||||||
| Total Assets | $ | 470,097 | $ | 454,596 | $ | 438,399 | $ | 438,002 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||
| Demand Deposits | $ | 165,566 | $ | 164,387 | $ | 172,165 | $ | 171,625 | |||||||||
| Savings, N.O.W. and money market deposits | 139,301 | 144,070 | 129,451 | 147,367 | |||||||||||||
| Certificates of deposit of $100,000 or more and other time deposits | 67,435 | 62,428 | 61,742 | 69,589 | |||||||||||||
| Total Deposits | $ | 372,302 | $ | 370,885 | $ | 363,358 | $ | 388,581 | |||||||||
| Short-term borrowings | 55,320 | 43,083 | 30,109 | - | |||||||||||||
| Other liabilities and accrued expenses | 3,251 | 2,968 | 2,716 | 6,758 | |||||||||||||
| Total Liabilities | $ | 430,873 | $ | 416,936 | $ | 396,183 | $ | 395,339 | |||||||||
| Total Stockholders' Equity | 39,224 | 37,660 | 42,216 | 42,663 | |||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 470,097 | $ | 454,596 | $ | 438,399 | $ | 438,002 | |||||||||
| Selected Financial Data (unaudited) | |||||||||||||||||
| Allowance for Loan Losses to Total Loans | 1.56 | % | 1.67 | % | 1.84 | % | 1.85 | % | |||||||||
| Non-performing Loans to Total Loans | 0.90 | % | 1.00 | % | 1.09 | % | 1.24 | % | |||||||||
| Non-performing Assets to Total Assets | 0.52 | % | 0.56 | % | 0.61 | % | 0.69 | % | |||||||||
| Capital Ratios (unaudited) | |||||||||||||||||
| Tier 1 Leverage Ratio | 8.85 | % | 9.41 | % | 9.52 | % | 9.42 | % | |||||||||
| Tier 1 Risk-Based Capital Ratio | 13.54 | % | 13.93 | % | 14.65 | % | 14.49 | % | |||||||||
| Total Risk-Based Capital Ratio | 14.79 | % | 15.18 | % | 15.90 | % | 15.74 | % | |||||||||
| Book Value per Share | $ | 8.96 | $ | 8.60 | $ | 9.64 | $ | 9.74 | |||||||||
| Statement of Operations (unaudited) | ||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||
| 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||
| Interest income | $ | 4,119 | $ | 3,896 | $ | 3,989 | $ | 11,958 | $ | 11,926 | ||||||||
| Interest expense | 450 | 436 | 572 | 1,329 | 1,796 | |||||||||||||
| Net interest income | $ | 3,669 | $ | 3,460 | $ | 3,417 | $ | 10,629 | $ | 10,130 | ||||||||
| Provision for loan losses | - | - | 285 | - | 285 | |||||||||||||
| Net interest income after provision for loan losses | 3,669 | 3,460 | 3,132 | 10,629 | 9,845 | |||||||||||||
| Net securities (losses) gains | - | 4 | 94 | 4 | 1,256 | |||||||||||||
| Other income | 249 | 263 | 146 | 777 | 451 | |||||||||||||
| Other expense | 3,274 | 3,163 | 3,097 | 9,746 | 9,382 | |||||||||||||
| Income before income taxes | 644 | 564 | 275 | 1,664 | 2,170 | |||||||||||||
| Income tax (expense) benefit | (282 | ) | (252 | ) | (130 | ) | (739 | ) | 1,078 | |||||||||
| Net income | $ | 362 | $ | 312 | $ | 145 | $ | 925 | $ | 3,248 | ||||||||
| Basic earnings per share | $ | 0.08 | $ | 0.07 | $ | 0.03 | $ | 0.21 | $ | 0.74 | ||||||||
| Diluted earnings per share | $ | 0.08 | $ | 0.07 | $ | 0.03 | $ | 0.21 | $ | 0.74 | ||||||||
| Selected Financial Data (unaudited) | ||||||||||||||||||
| Return on Average Assets | 0.31 | % | 0.29 | % | 0.14 | % | 0.28 | % | 1.09 | % | ||||||||
| Return on Average Equity | 3.80 | % | 3.00 | % | 1.39 | % | 3.05 | % | 10.81 | % | ||||||||
| Net Interest Margin | 3.22 | % | 3.27 | % | 3.36 | % | 3.27 | % | 3.57 | % | ||||||||
| Efficiency Ratio | 83.55 | % | 84.94 | % | 86.88 | % | 85.44 | % | 88.67 | % | ||||||||
About Empire Bancorp, Inc.
Empire Bancorp, Inc. is a bank holding company for Empire National Bank, a Long Island-based independent bank that specializes in serving the financial needs of small and medium sized businesses, professionals, nonprofit organizations, real estate investors, and consumers. The bank has four banking offices located in Islandia, Shirley, Port Jefferson Station and Mineola, New York. Our bankers take pride in understanding the needs of each customer so the bank can deliver the highest quality service with a sense of urgency.
This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate" or "continue," or comparable terminology, are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within Empire National Bank's control. The forward looking statements included in this press release are made only as of the date of this press release. We have no intention, and do not assume any obligation, to update these forward looking statements.
Contact Information:
Contact:
William Franz
VP, Director of Marketing & Investor Relations
(631) 348-4444