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Elmira Savings Bank Reports 2012 Earnings

ELMIRA, NY--(Marketwire - Jan 23, 2013) - Elmira Savings Bank ( NASDAQ : ESBK )

Highlights

  • Net income increased to $1,299,000 and $5,213,000 for the three and twelve months ended December 31, 2012 compared to $1,291,000 and $5,029,000 for the same periods in 2011.

  • Diluted earnings per share were $.37 per share and $1.51 per share for the three and twelve months ended December 31, 2012 compared to $.38 per share and $1.41 per share for the same period in 2011.

  • Return on average assets was .97% and .99% for the three and twelve months ended December 31, 2012 compared to .99% and 1.00% for the same period in 2011.

  • Return on average equity was 7.72% and 7.89% for the three and twelve months ended December 31, 2012 compared to 7.94% and 8.40% for the same periods in 2011.

  • Noninterest income increased to $1,529,000 and $6,050,000 for the three and twelve months ended December 31, 2012 compared to $1,382,000 and $4,727,000 for the same periods in 2011. These represent increases of 10.6% and 28.0% for the three and twelve months ended December 31, 2012 compared to the same periods in 2011.

  • Loans receivable were $378,108,000 at December 31, 2012, an increase of $32,126,000 or 9.3% from December 31, 2011. Deposits were $409,565,000 at December 31, 2012, an increase of $27,836,000 or 7.3% from December 31, 2011.

"We are pleased to be able to provide this report of strong 2012 operating results. We achieved record earnings, had solid loan growth, and maintained our strong asset quality," said Michael P. Hosey, President and Chief Executive Officer. Hosey continued, "In addition, we increased our cash dividend, issued a stock dividend, and witnessed our share price increase during the year. We appreciate our loyal shareholders and are proud to provide them with these results." 

Net Income

Net income totaled $5,213,000 for the twelve months ended December 31, 2012, an increase of $184,000 or 3.7% from the $5,029,000 of net income recorded for the same period in 2011. This increase of $184,000 was primarily the net result of an increase in noninterest income of $1,323,000, offset by a decline in net interest income of $461,000, and an increase in noninterest expense of $742,000.

Net income totaled $1,299,000 for the three months ended December 31, 2012, an increase of $8,000 or 0.6% from the $1,291,000 recorded for the same period in 2011. This modest increase was the result of an increase in noninterest income of $147,000, a reduction in the provision for loan losses of $99,000, partially offset by a decline in net interest income of $106,000, and an increase of $135,000 in noninterest expense.

Basic and diluted earnings per share for the twelve months ended December 31, 2012 were $1.58 per share and $1.51 per share compared to $1.45 per share and $1.41 per share for the same period in 2011. Basic and diluted earnings per share for the three months ended December 31, 2012 were $.39 per share and $.37 per share compared to $.39 per share and $.38 per share for the same period in 2011.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2012 was 3.34% compared to 3.51% for the same period in 2011. The yield on average earning assets was 4.64% for the twelve months ended December 31, 2012 compared to 4.98% for the same period in 2011. The average cost of interest-bearing liabilities was 1.47% for the twelve months ended December 31, 2012 compared to 1.67% for the same period in 2011.

The net interest margin for the three months ended December 31, 2012 was 3.25% compared to 3.45% for the same period in 2011. The average yield on earning assets was 4.45% for the three months ended December 31, 2012 compared to 4.87% for the same period in 2011. The average cost of interest-bearing liabilities was 1.37% for the three months ended December 31, 2012 compared to 1.60% for the same period in 2011.

"Our mortgage originations exceeded $160 million for the year. This provided the Bank with historic levels of noninterest income and loan growth that allowed us to avoid unattractive investment alternatives. In addition, we replaced borrowed funds with deposit growth in an attempt to protect our net interest margin," said Michael P. Hosey, President and Chief Executive Officer.

Assets

Total assets increased $13.5 million or 2.6% to $536.9 million at December 31, 2012 compared to $523.4 million at December 31, 2011. Loans receivable increased 9.3% to $378.1 million at December 31, 2012 compared to December 31, 2011. The available-for-sale investment portfolio decreased $19.7 million from December 31, 2011 to December 31, 2012.

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to 1.02% at December 31, 2012 from 1.06% at December 31, 2011. Net loan charge-offs to average loans for the twelve months ended December 31, 2012 of 0.01% decreased from 0.09% for the twelve months ended December 31, 2011. The allowance for loan losses increased to 0.99% of total loans at December 31, 2012 from 0.95% of total loans at December 31, 2011.

Liabilities

Deposits total $409.6 million at December 31, 2012, an increase of $27.8 million or 7.3%. The $27.8 million increases primarily consists of an $8.8 million increase in noninterest-bearing deposits, a $7.8 million increase in NOW accounts, and a $7.4 million increase in time deposits. Borrowed funds declined by $16.0 million or 22.9%.

Shareholders' Equity

Shareholders' equity increased $2.0 million to $66.6 million at December 31, 2012 compared to December 31, 2011. The current level of shareholders' equity equates to a book value per share of $18.50 at December 31, 2012, compared to $17.92 at December 31, 2011. Dividends paid to common shareholders were $0.22 and $0.84 for the three and twelve months ended December 31, 2012 compared to $0.19 and $0.71 for the same periods in 2011, representing increases of 15.8% and 18.3%, respectively. Additionally, a 5% stock dividend was paid to common shareholders on December 28, 2012.

Elmira Savings Bank, with $536.9 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 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; and a loan center in Cortland 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,  
    2012     2011     % Change  
ASSETS                      
                       
Cash and due from banks   $ 39,641     $ 47,456     -16.5 %
Federal funds sold and other short-term investments     684       740     -7.6 %
  Total cash and cash equivalents     40,325       48,196     -16.3 %
                       
Securities available for sale, at fair value     66,875       86,536     -22.7 %
Securities held to maturity - fair value $5,853 at December 31, 2012, and $4,923 at December 31, 2011     5,521       4,621     19.5 %
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost     9,178       5,295     73.3 %
                       
Loans held for sale     3,167       2,842     11.4 %
                       
Loans receivable     378,108       345,982     9.3 %
Less: Allowance for loan losses     3,740       3,299     13.4 %
  Net loans     374,368       342,683     9.2 %
                       
Premises and equipment, net     7,947       5,392     47.4 %
Bank-owned life insurance     11,988       10,100     18.7 %
Accrued interest receivable     1,529       1,615     -5.3 %
Intangible assets, net     316       444     -28.8 %
Goodwill     12,320       12,320     0.0 %
Other real estate owned     125       202     -38.1 %
Other assets     3,277       3,112     5.3 %
  Total assets   $ 536,936     $ 523,358     2.6 %
                       
LIABILITIES AND SHAREHOLDERS' EQUITY                      
                       
Deposits   $ 409,565     $ 381,729     7.3 %
Borrowings     54,000       70,019     -22.9 %
Other liabilities     6,462       6,995     -7.6 %
  Total liabilities     470,027       458,743     2.5 %
                       
Shareholders' equity:                      
Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares authorized; 24,063 shares issued at December 31, 2012 and at December 31, 2011     23,763       23,763     0.0 %
Common stock, $1 par value; authorized 5,000,000 shares; 2,454,840 shares issued at December 31, 2012 and 2,292,656 shares issued at December 31, 2011     2,455       2,293     7.1 %
Additional paid-in capital     41,448       38,402     7.9 %
Retained earnings     868       1,735     -50.0 %
Treasury stock, at cost - 125,865 shares at December 31, 2012 and December 31, 2011     (3,548 )     (3,548 )   0.0 %
Accumulated other comprehensive income     1,872       1,918     -2.4 %
  Total Elmira Savings Bank shareholders' equity     66,858       64,563     3.6 %
Noncontrolling interest     51       52     -1.9 %
  Total shareholders' equity     66,909       64,615     3.6 %
  Total liabilities and shareholders' equity   $ 536,936     $ 523,358     2.6 %
                       
                       
   
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)   2012   2011   % Change     2012   2011   % Change  
                                     
Interest and Dividend Income:                                    
  Interest and fees on loans   $ 4,469   $ 4,670   -4.3 %   $ 18,114   $ 18,140   -0.1 %
  Interest and dividends on securities                                    
    Taxable     476     578   -17.6 %     2,111     3,140   -32.8 %
    Non-taxable     184     202   -8.9 %     760     820   -7.3 %
    Total interest and dividend income     5,129     5,450   -5.9 %     20,985     22,100   -5.0 %
                                     
Interest Expense:                                    
  Interest on deposits     903     952   -5.1 %     3,712     3,850   -3.6 %
  Interest expense on borrowings     487     653   -25.4 %     2,184     2,700   -19.1 %
    Total interest expense     1,390     1,605   -13.4 %     5,896     6,550   -10.0 %
Net interest income     3,739     3,845   -2.8 %     15,089     15,550   -3.0 %
Provision for loan losses     42     141   -70.2 %     463     668   -30.7 %
Net interest income after provision for loan losses     3,697     3,704   -0.2 %     14,626     14,882   -1.7 %
                                     
Noninterest Income:                                    
  Service fees     297     231   28.6 %     1,242     1,236   0.5 %
  Net gain on sale of loans     953     733   30.0 %     3,561     1,836   94.0 %
  Net gain on sale of securities     -     152   -100.0 %     75     448   -83.3 %
  Other service fees     165     159   3.8 %     677     634   6.8 %
  Earnings on bank-owned life insurance     95     84   13.1 %     388     369   5.1 %
  Other     19     23   -17.4 %     107     204   -47.5 %
    Total noninterest income     1,529     1,382   10.6 %     6,050     4,727   28.0 %
                                     
Noninterest Expense:                                    
  Salaries and benefits     1,803     1,698   6.2 %     6,770     6,491   4.3 %
  Net occupancy     274     269   1.9 %     1,130     1,154   -2.1 %
  Equipment     257     215   19.5 %     946     854   10.8 %
  Regulatory assessments     61     106   -42.5 %     360     462   -22.1 %
  Marketing and public relations     177     236   -25.0 %     722     636   13.5 %
  Professional fees     147     114   28.9 %     643     513   25.3 %
  Other     582     528   10.2 %     2,373     2,092   13.4 %
    Total noninterest expense     3,301     3,166   4.3 %     12,944     12,202   6.1 %
Income before income taxes     1,925     1,920   0.3 %     7,732     7,407   4.4 %
Income taxes     621     624   -0.5 %     2,514     2,373   5.9 %
Net income     1,304     1,296   0.6 %     5,218     5,034   3.7 %
Less: Net income attributable to noncontrolling interest     5     5   0.0 %     5     5   0.0 %
                                     
Net income attibutable to Elmira Savings Bank     1,299     1,291   0.6 %     5,213     5,029   3.7 %
                                     
Dividend on preferred stock     406     406   0.0 %     1,609     1,512   6.4 %
Accretion of preferred stock discount     -     -   -       -     252   -100.0 %
Income available to common shareholders   $ 893   $ 885   0.9 %   $ 3,604   $ 3,265   10.4 %
                                     
                                     
Basic earnings per share   $ 0.39   $ 0.39   0.0 %   $ 1.58   $ 1.45   9.0 %
                                     
Diluted earnings per share   $ 0.37   $ 0.38   -2.6 %   $ 1.51   $ 1.41   7.1 %
                                     
Weighted average shares outstanding - basic     2,297,324     2,260,193   1.6 %     2,277,545     2,253,452   1.1 %
                                     
Weighted average shares outstanding - diluted     2,423,915     2,331,189   4.0 %     2,389,217     2,315,109   3.2 %
                                     
Dividends per share   $ 0.22   $ 0.19   15.8 %   $ 0.84   $ 0.71   18.3 %
                                     
                                     
Per share data has been restated to reflect the 5% stock dividend paid on December 28, 2012.  
   
   
   
ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                             
(Dollars in Thousands)   For the Three Months Ended  
    December 31, 2012     December 31, 2011  
ASSETS:   Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans   $ 376,032   $ 4,469   4.73 %   $ 343,570   $ 4,670   5.41 %
Short-term investments     1,669     -   -       1,035     -   -  
Securities     80,965     660   3.26       100,922     780   3.09  
Total interest-earning assets     458,666     5,129   4.45       445,527     5,450   4.87  
                                     
Noninterest-earning assets     73,992                 71,353            
                                     
TOTAL ASSETS   $ 532,658               $ 516,880            
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
Interest-bearing deposits   $ 346,611   $ 903   1.04     $ 325,389   $ 952   1.16  
Borrowings     54,000     487   3.53       70,031     653   3.64  
Total interest-bearing liabilities     400,611     1,390   1.37       395,420     1,605   1.60  
                                     
Noninterest-bearing liabilities     65,302                 56,966            
Shareholders' equity     66,745                 64,494            
                                     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 532,658               $ 516,880            
Interest rate spread               3.08 %               3.27 %
Net interest income/margin         $ 3,739   3.25 %         $ 3,845   3.45 %
                                     
   
   
ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                             
(Dollars in Thousands)   For the Twelve Months Ended  
    December 31, 2012     December 31, 2011  
ASSETS:   Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans   $ 362,986   $ 18,114   4.99 %   $ 325,172   $ 18,140   5.58 %
Short-term investments     1,371     -   -       1,084     -   -  
Securities     87,539     2,871   3.28       117,305     3,960   3.38  
Total interest-earning assets     451,896     20,985   4.64       443,561     22,100   4.98  
                                     
Noninterest-earning assets     74,451                 59,638            
                                     
TOTAL ASSETS   $ 526,347               $ 503,199            
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
Interest-bearing deposits   $ 340,236   $ 3,712   1.09     $ 320,227   $ 3,850   1.20  
Borrowings     59,623     2,184   3.66       72,563     2,700   3.72  
Total interest-bearing liabilities     399,859     5,896   1.47       392,790     6,550   1.67  
                                     
Noninterest-bearing liabilities     60,633                 50,535            
Shareholders' equity     65,855                 59,874            
                                     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 526,347               $ 503,199            
Interest rate spread               3.17 %               3.31 %
Net interest income/margin         $ 15,089   3.34 %         $ 15,550   3.51 %
                                     
     
     
  Quarter Ended  
(Dollars in Thousands, Except Per Share Data) 12/31/2012   9/30/2012   6/30/2012   3/31/2012   12/31/2011  
                               
Operating Data                              
                               
  Net income $ 1,299   $ 1,398   $ 1,358   $ 1,158   $ 1,291  
  Net interest income   3,739     3,810     3,772     3,768     3,835  
  Provision for loan losses   42     154     142     125     141  
  Net security gains   -     -     75     -     152  
  Non-interest income, ex. Net security gains   1,529     1,723     1,473     1,250     1,230  
  Non-interest expense   3,301     3,271     3,157     3,215     3,166  
                               
Performance Statistics                              
                               
  Net interest margin   3.25 %   3.32 %   3.37 %   3.40 %   3.45 %
  Annualized return on average assets   0.97 %   1.04 %   1.04 %   0.90 %   0.99 %
  Annualized return on average equity   7.72 %   8.39 %   8.33 %   7.12 %   7.94 %
  Annualized net loan charge-offs to avg loans   0.03 %   -0.02 %   0.02 %   -0.01 %   0.07 %
  Net charge-offs (recoveries)   31     (19 )   20     (10 )   59  
  Efficiency ratio   62.7 %   59.1 %   59.3 %   64.1 %   60.7 %
                               
Per Share Data                              
                               
  Basic earnings per share $ 0.39   $ 0.44   $ 0.42   $ 0.33   $ 0.39  
  Diluted earnings per share   0.37     0.42     0.40     0.32     0.38  
  Dividend declared per share   0.22     0.22     0.21     0.21     0.19  
  Book value   18.50     18.52     18.22     18.06     17.92  
  Common stock price:                              
    High   23.65     19.04     20.46     20.82     16.19  
    Low   18.48     17.50     16.83     15.45     13.05  
    Close   22.74     18.86     18.36     18.81     15.60  
  Weighted average common shares:                              
    Basic   2,297     2,280     2,269     2,263     2,260  
    Fully diluted   2,424     2,396     2,383     2,353     2,331  
  End-of-period common shares:                              
    Issued   2,455     2,438     2,425     2,407     2,407  
    Treasury   126     126     126     126     126  
                               
Share and per share data has been restated to reflect the 5% stock dividend paid on December 28, 2012.        
                               
Financial Condition Data:                              
General                              
  Total assets $ 536,936   $ 534,159   $ 530,646   $ 519,618   $ 523,358  
  Loans, net   374,368     369,851     358,756     346,144     342,683  
  Intangibles   12,636     12,667     12,699     12,732     12,764  
  Total deposits   409,565     406,216     397,972     383,314     381,729  
                                   
    Noninterest-bearing   61,444     58,760     55,269     50,113     52,641  
                                   
    Savings   59,034     56,115     56,332     54,936     54,558  
    NOW   76,133     73,079     73,431     70,068     68,307  
    Money Market   20,131     23,082     19,272     18,890     20,766  
    Time deposits   192,823     195,180     193,668     189,307     185,457  
    Total interest-bearing deposits   348,121     347,456     342,703     333,201     329,088  
                                 
  Shareholders' equity   66,609     66,543     65,621     64,944     64,615  
                               
Asset Quality                              
                               
  Non-performing assets $ 3,986   $ 3,980   $ 3,829   $ 3,764   $ 3,896  
  Non-performing assets to total assets   0.74 %   0.75 %   0.72 %   0.72 %   0.74 %
  Allowance for loan losses   3,740     3,729     3,556     3,434     3,299  
  Allowance for loan losses to total loans   0.99 %   1.00 %   0.98 %   0.98 %   0.95 %
  Allowance for loan losses to total loans non-performing loans   96.87 %   97.29 %   96.57 %   94.26 %   89.83 %
  Non-performing loans to total loans   1.02 %   1.03 %   1.02 %   1.05 %   1.06 %
                               
Capitalization                              
                               
  Shareholders' equity to total assets   12.41 %   12.46 %   12.37 %   12.50 %   12.35 %