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Elmira Savings Bank Reports Increase in Quarterly Earnings

ELMIRA, NY--(Marketwired - Oct 21, 2015) - Elmira Savings Bank (NASDAQ: ESBK)

Highlights

  • Net income was $1,057,000 and $3,086,000 for the three and nine months ended September 30, 2015 compared to $475,000 and $2,634,000 for the same periods in 2014.

  • Diluted earnings per share were $.30 per share and $.87 per share for the three and nine months ended September 30, 2015 compared to $.09 per share and $.70 per share for the same periods in 2014.

  • Return on average assets was .73% for both the three and nine months ended September 30, 2015 compared to .36% and .68% for the same periods in 2014.

  • Return on average equity was 7.60% and 7.43% for the three and nine months ended September 30, 2015 compared to 3.36% and 6.35% for the same periods in 2014.

"We are pleased with the increase in core earnings supported by loan and deposit growth," said Thomas M. Carr, President and CEO. "During the quarter we experienced strong mortgage originations and are pleased with our reception in the Watkins Glen market," continued Mr. Carr.

Net Income

Net income totaled $3,086,000 for the nine months ended September 30, 2015, an increase of $452,000 or 17% from the $2,634,000 of net income recorded for the same period in 2014. This increase was the net result of an increase in noninterest income of $291,000, an increase in net interest income of $112,000, and a decrease in noninterest expense of $281,000, offset by an increase in the provision for loan losses of $93,000 and an increase in tax expense of $139,000.

Net income totaled $1,057,000 for the three months ended September 30, 2015, an increase of $582,000 or 123% from the $475,000 recorded for the same period in 2014. This increase was the net result of a decrease in noninterest expense of $465,000, an increase in noninterest income of $384,000, and an increase in net interest income of $50,000, offset by an increase in tax expense of $285,000 and an increase in the provision for loan losses of $32,000.

The decrease in noninterest expense for both the three and nine months ended September 30, 2015 versus the same periods in 2014 includes the impact of $820,000 of one-time expense recognized in the third quarter of 2014. This one-time expense was for the estimated value of an executive retirement compensation agreement.

Net income of $1,057,000 for the current quarter ended September 30, 2015 increased $38,000 or 4% from net income for the preceding quarter ended June 30, 2015.

Basic and diluted earnings per share for the nine months ended September 30, 2015 were $.89 per share and $.87 per share compared to $.73 per share and $.70 per share for the same period in 2014. Basic and diluted earnings per share for the three months ended September 30, 2015 were $.31 per share and $.30 per share compared to $.09 per share for both basic and diluted earnings per share for the same period in 2014.

Net Interest Margin

The net interest margin for the nine months ended September 30, 2015 was 3.03% compared to 3.23% for the same period in 2014. The yield on average earning assets was 4.05% for the nine months ended September 30, 2015 compared to 4.25% for the same period in 2014. The average cost of interest-bearing liabilities was 1.19% for the nine months ended September 30, 2015 compared to 1.22% for the same period in 2014.

The net interest margin for the three months ended September 30, 2015 was 2.97% compared to 3.18% for the same period in 2014. The average yield on earning assets was 4.00% for the three months ended September 30, 2015 compared to 4.19% for the same period in 2014. The average cost of interest-bearing liabilities was 1.20% for the three months ended September 30, 2015 compared to 1.21% for the same period in 2014.

Assets

Total assets increased $20.3 million or 3.7% to $566.2 million at September 30, 2015 compared to $546.0 million at December 31, 2014. Loans, including loans held for sale, increased 6.7% to $446.2 million at September 30, 2015 compared to December 31, 2014. The available-for-sale investment portfolio decreased $15.1 million from December 31, 2014 to September 30, 2015.

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to 1.01% at September 30, 2015 from 1.13% at December 31, 2014. Net loan charge-offs to average loans for the nine months ended September 30, 2015 of 0.08% increased from 0.06% for the nine months ended September 30, 2014. The allowance for loan losses was 0.92% of total loans at September 30, 2015 and 0.95% of total loans at December 31, 2014.

Liabilities

Deposits total $442.0 million at September 30, 2015, an increase of $19.5 million or 4.6%. The $19.5 million increase consists of a $6.2 million increase in interest-bearing transaction accounts, a $10.3 million increase in noninterest-bearing accounts, and a $4.5 million increase in time deposits, partially offset by a $0.9 million decrease in savings accounts and a $0.6 million decrease in money market accounts. Borrowed funds increased by $1.0 million or 1.6%.

Shareholders' Equity

Shareholders' equity decreased $0.8 million to $54.7 million at September 30, 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 $16.49 at September 30, 2015, compared to $16.91 at December 31, 2014. Dividends paid to common shareholders were $0.23 and $0.69 for the three and nine months ended for both September 30, 2015 and 2014.

Elmira Savings Bank, with $566.2 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)

September 30,

December 31,

2015

2014

% Change

ASSETS

Cash and due from banks

$

12,916

$

7,959

62.3

%

Federal funds sold and other short-term investments

102

606

-83.2

%

Total cash and cash equivalents

13,018

8,565

52.0

%

Securities available for sale, at fair value

50,509

65,624

-23.0

%

Securities held to maturity - fair value $9,315 at September 30, 2015, and $7,641 at December 31, 2014

9,132

7,389

23.6

%

Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost

11,073

11,182

-1.0

%

Loans held for sale

3,344

787

324.9

%

Loans receivable

442,859

417,359

6.1

%

Less: Allowance for loan losses

4,082

3,974

2.7

%

Net loans

438,777

413,385

6.1

%

Premises and equipment, net

10,487

9,475

10.7

%

Bank-owned life insurance

13,089

12,790

2.3

%

Accrued interest receivable

1,640

1,566

4.7

%

Intangible assets, net

76

125

-39.2

%

Goodwill

12,320

12,320

-

Other assets

2,763

2,761

0.1

%

Total assets

$

566,228

$

545,969

3.7

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits

$

442,046

$

422,561

4.6

%

Borrowings

63,000

62,000

1.6

%

Other liabilities

6,525

5,915

10.3

%

Total liabilities

511,571

490,476

4.3

%

Shareholders' equity:

Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares authorized; 10,000 shares issued at September 30, 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 September 30, 2015 and 2,809,364 shares issued at December 31, 2014

2,821

2,809

0.4

%

Additional paid-in capital

41,191

42,365

-2.8

%

Retained earnings

3,303

2,769

19.3

%

Treasury stock, at cost - 98,118 shares at September 30, 2015 and 104,418 shares at December 31, 2014

(2,907

)

(3,053

)

-4.8

%

Accumulated other comprehensive income

496

849

-41.6

%

Total Elmira Savings Bank shareholders' equity

54,604

55,439

-1.5

%

Noncontrolling interest

53

54

-1.9

%

Total shareholders' equity

54,657

55,493

-1.5

%

Total liabilities and shareholders' equity

$

566,228

$

545,969

3.7

%

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)

2015

2014

% Change

2015

2014

% Change

Interest and dividend income:

Interest and fees on loans

$

4,624

$

4,412

4.8

%

$

13,656

$

13,111

4.2

%

Interest and dividends on securities

Taxable

331

393

-15.8

%

1,063

1,269

-16.2

%

Non-taxable

245

221

10.9

%

709

629

12.7

%

Total interest and dividend income

5,200

5,026

3.5

%

15,428

15,009

2.8

%

Interest expense:

Interest on deposits

786

753

4.4

%

2,254

2,240

0.6

%

Interest on borrowings

562

471

19.3

%

1,668

1,375

21.3

%

Total interest expense

1,348

1,224

10.1

%

3,922

3,615

8.5

%

Net interest income

3,852

3,802

1.3

%

11,506

11,394

1.0

%

Provision for loan losses

170

138

23.2

%

360

267

34.8

%

Net interest income after provision for loan losses

3,682

3,664

0.5

%

11,146

11,127

0.2

%

Noninterest income:

Service fees

376

380

-1.1

%

1,099

1,074

2.3

%

Gain on sale of loans held for sale

870

483

80.1

%

1,681

1,276

31.7

%

Gain on sale of securities

-

-

-

284

421

-32.5

%

Other service fees

174

170

2.4

%

532

510

4.3

%

Earnings on bank-owned life insurance

98

86

14.0

%

298

308

-3.2

%

Other

21

36

-41.7

%

115

129

-10.7

%

Total noninterest income

1,539

1,155

33.2

%

4,009

3,718

7.8

%

Noninterest expense:

Salaries and benefits

1,862

2,512

-25.9

%

5,407

6,083

-11.1

%

Net occupancy

319

317

0.6

%

1,046

1,064

-1.7

%

Equipment

272

263

3.4

%

780

763

2.2

%

Marketing and public relations

209

210

-0.5

%

635

614

3.4

%

Professional fees

225

167

34.7

%

628

523

20.1

%

Other

838

721

16.2

%

2,320

2,050

13.2

%

Total noninterest expense

3,725

4,190

-11.1

%

10,816

11,097

-2.5

%

Income before income taxes

1,496

629

137.8

%

4,339

3,748

15.8

%

Income taxes

439

154

185.1

%

1,253

1,114

12.5

%

Net income

1,057

475

122.5

%

3,086

2,634

17.2

%

Less: Net income attributable to noncontrolling interest

-

-

-

-

-

-

Net income attibutable to Elmira Savings Bank

1,057

475

122.5

%

3,086

2,634

17.2

%

Dividend on preferred stock

225

225

-

675

675

-

Income available to common shareholders

$

832

$

250

232.8

%

$

2,411

$

1,959

23.1

%

Basic earnings per share

$

0.31

$

0.09

244.4

%

$

0.89

$

0.73

21.9

%

Diluted earnings per share

$

0.30

$

0.09

233.3

%

$

0.87

$

0.70

24.3

%

Weighted average shares outstanding - basic

2,710,219

2,684,475

1.0

%

2,705,958

2,672,010

1.3

%

Weighted average shares outstanding - diluted

2,730,365

2,802,609

-2.6

%

2,772,737

2,796,982

-0.9

%

Dividends per share

$

0.23

$

0.23

-

$

0.69

$

0.69

-

ELMIRA SAVINGS BANK

AVERAGE BALANCES AND INTEREST RATES

(Dollars in Thousands)

For the Nine Months Ended

September 30, 2015

September 30, 2014

ASSETS:

Average Balance

Interest

Average Rate

Average Balance

Interest

Average Rate

Loans

$

428,567

$

13,656

4.25

%

$

393,254

$

13,111

4.44

%

Short-term investments

1,072

-

0.03

985

1

0.02

Securities

77,665

1,772

3.04

76,520

1,897

3.31

Total interest-earning assets

507,304

15,428

4.05

470,759

15,009

4.25

Noninterest-earning assets

57,643

43,903

TOTAL ASSETS

$

564,947

$

514,662

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits

$

363,781

$

2,254

0.83

$

336,891

$

2,240

0.89

Borrowings

73,011

1,668

3.01

57,620

1,375

3.14

Total interest-bearing liabilities

436,792

3,922

1.19

394,511

3,615

1.22

Noninterest-bearing liabilities

72,604

64,677

Shareholders' equity

55,551

55,474

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

564,947

$

514,662

Interest rate spread

2.86

%

3.03

%

Net interest income/margin

$

11,506

3.03

%

$

11,394

3.23

%

ELMIRA SAVINGS BANK

AVERAGE BALANCES AND INTEREST RATES

(Dollars in Thousands)

For the Three Months Ended

September 30, 2015

September 30, 2014

ASSETS:

Average Balance

Interest

Average Rate

Average Balance

Interest

Average Rate

Loans

$

440,467

$

4,624

4.17

%

$

400,745

$

4,412

4.38

%

Short-term investments

675

-

0.03

901

-

0.02

Securities

76,319

576

3.01

75,821

614

3.24

Total interest-earning assets

517,461

5,200

4.00

477,467

5,026

4.19

Noninterest-earning assets

57,683

44,325

TOTAL ASSETS

$

575,144

$

521,792

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits

$

371,492

$

786

0.84

$

339,126

$

753

0.88

Borrowings

73,196

562

3.00

58,563

471

3.15

Total interest-bearing liabilities

444,688

1,348

1.20

397,689

1,224

1.21

Noninterest-bearing liabilities

75,287

68,062

Shareholders' equity

55,169

56,041

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

575,144

$

521,792

Interest rate spread

2.80

%

2.98

%

Net interest income/margin

$

3,852

2.97

%

$

3,802

3.18

%

Quarter Ended

(Dollars in Thousands, Except Per Share Data)

9/30/2015

6/30/2015

3/31/2015

12/31/2014

9/30/2014

Operating Data

Net income

$

1,057

$

1,019

$

1,010

$

1,031

$

475

Net interest income

3,852

3,829

3,825

4,018

3,802

Provision for loan losses

170

140

50

140

138

Net security gains

-

80

204

-

-

Non-interest income, ex. Net security gains

1,539

1,155

1,031

1,039

1,155

Non-interest expense

3,725

3,522

3,569

3,406

4,190

Performance Statistics

Net interest margin

2.97

%

3.04

%

3.07

%

3.24

%

3.18

%

Annualized return on average assets

0.73

%

0.72

%

0.74

%

0.76

%

0.36

%

Annualized return on average equity

7.60

%

7.39

%

7.29

%

7.37

%

3.36

%

Annualized net loan charge-offs to avg loans

0.10

%

0.11

%

0.02

%

0.09

%

-0.01

%

Net charge-offs (recoveries)

117

114

21

94

(7

)

Efficiency ratio

69.1

%

69.5

%

70.5

%

67.4

%

84.5

%

Per Share Data

Basic earnings per share

$

0.31

$

0.29

$

0.29

$

0.30

$

0.09

Diluted earnings per share

0.30

0.29

0.28

0.29

0.09

Dividend declared per share

0.23

0.23

0.23

0.23

0.23

Book value

16.49

16.34

16.96

16.91

16.76

Common stock price:

High

20.81

20.82

23.00

23.00

24.54

Low

19.05

19.43

19.99

20.50

20.16

Close

19.20

20.09

20.40

23.00

22.25

Weighted average common shares:

Basic

2,710

2,707

2,701

2,693

2,684

Fully diluted

2,730

2,776

2,812

2,808

2,803

End-of-period common shares:

Issued

2,821

2,821

2,813

2,809

2,809

Treasury

98

98

98

104

104

Financial Condition Data:

General

Total assets

$

566,228

$

572,890

$

562,185

$

545,969

$

533,726

Loans, net

438,777

431,993

416,235

413,385

406,168

Intangibles

12,396

12,412

12,428

12,445

12,464

Total deposits

442,046

437,663

426,075

422,561

405,681

Noninterest-bearing

72,293

68,707

64,442

62,019

68,871

Savings

64,421

64,758

63,776

65,287

62,898

NOW

85,136

86,835

78,169

78,920

75,246

Money Market

19,912

20,678

22,112

20,512

21,498

Time deposits

200,284

196,685

197,576

195,823

177,168

Total interest-bearing deposits

369,753

368,956

361,633

360,542

336,810

Shareholders' equity

54,657

54,233

55,818

55,493

55,088

Asset Quality

Non-performing assets

$

4,545

$

4,430

$

4,790

$

4,699

$

4,575

Non-performing assets to total assets

0.80

%

0.77

%

0.85

%

0.86

%

0.86

%

Allowance for loan losses

4,082

4,028

4,002

3,974

3,928

Allowance for loan losses to total loans

0.92

%

0.92

%

0.95

%

0.95

%

0.96

%

Allowance for loan losses to non-performing loans

91.20

%

91.75

%

83.55

%

84.57

%

88.61

%

Non-performing loans to total loans

1.01

%

1.01

%

1.14

%

1.13

%

1.08

%

Capitalization

Shareholders' equity to total assets

9.65

%

9.47

%

9.93

%

10.16

%

10.32

%