Elmira Savings Bank Reports 2020 Earnings

Rhea-AI Summary

Elmira Savings Bank (NASDAQ:ESBK) reported a net income of $1,284,000 for Q4 2020, reflecting a 37% year-on-year increase, and a total of $4,159,000 for 2020, up 19% from 2019. Diluted earnings per share were $0.37 and $1.19 for Q4 and 2020, respectively. Key metrics include a return on average assets of 0.78% and a net interest margin of 3.06%. Total assets rose by 6.2% to $644.6 million, while loans decreased 6% to $489.2 million. Deposits increased 6.8% to $547.0 million.

Positive

• Net income increased by $673,000 or 19% in 2020 compared to 2019.
• Diluted EPS rose to $1.19 for the year, up from $1.00 in 2019.
• Total assets grew by $37.8 million or 6.2% year-over-year.
• The bank's return on average equity improved to 8.40% in Q4 2020.

Negative

• Loans decreased by 6% to $489.2 million compared to 2019.
• The provision for loan losses increased by $706,000 for 2020.

NEW YORK, Jan. 27, 2021 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ:ESBK)

Highlights

• Net income was $1,284,000 and $4,159,000 for the three and twelve months ended December 31, 2020 compared to $940,000 and $3,486,000 for the same periods in 2019.
  
  
• Diluted earnings per share were $.37 per share and $1.19 per share for the three and twelve months ended December 31, 2020 compared to $.27 per share and $1.00 per share for the same periods in 2019.  
  
  
• Return on average assets was .78% and .64% for the three and twelve months ended December 31, 2020 compared to .61% and .57% for the three and twelve months ended December 31, 2019.
  
  
• Return on average equity was 8.40% and 6.94% for the three and twelve months ended December 31, 2020 compared to 6.33% and 5.93% for the same periods in 2019.
  

"We are pleased to report an increase in earnings year-to-year, while at the same time having increased our loan loss reserves largely in response to the economic uncertainty resulting from the ongoing pandemic,” said Thomas M Carr, President and CEO.  Carr continued, "We continue to be concerned about the economic impact in our region from the pandemic, but we are dedicated to continuing to provide the financial services needed in the communities we serve, balancing those efforts with prudent safety measures to minimize potential COVID health risks to our customers and staff.”

Net Income

Net income totaled $4,159,000 for the twelve months ended December 31, 2020, an increase of $673,000 or 19% from the $3,486,000 of net income recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $2,486,000 and an increase in net interest income of $152,000, offset by an increase in the provision for loan losses of $706,000, an increase in noninterest expense of $855,000, and an increase in tax expense of $404,000.

Net income totaled $1,284,000 for the three months ended December 31, 2020, an increase of $344,000 or 37% from the $940,000 recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $1,148,000 and an increase in net interest income of $151,000, offset by an increase in noninterest expense of $599,000, an increase in the provision for loan losses of $175,000, and an increase in tax expense of $181,000.

The increase in noninterest income for both the three and twelve months ended December 31, 2020 is primarily due to increases in the gain on sale of loans, reflecting higher levels of residential mortgages originated for sale to the secondary markets compared to the same periods in 2019. The increase in noninterest expense for both the three and twelve months ended December 31, 2020 reflects higher levels of salaries and benefits and other expense. The higher levels of salaries and benefits and other expense for both the three and twelve months ended December 31, 2020 are in part related to higher levels of residential mortgage originations in 2020. For the twelve months ended December 31, 2020 the increase in other expense also includes the impact of a one-time FDIC small bank assessment credit of $143,000 recognized in 2019.

For both the three and twelve months ended December 31, 2020, the increases in the provision for loan losses reflect management’s consideration of the uncertainty of ongoing economic conditions resulting from the COVID-19 pandemic and associated economic slowdown.

Basic and diluted earnings per share for the twelve months ended December 31, 2020 were both $1.19 per share compared to $1.00 per share for both for the same period in 2019. Basic and diluted earnings per share for the three months ended December 31, 2020 were both $.37 per share compared to $.27 per share for both for the same period in 2019.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2020 was 3.06% compared to 3.04% for the same period in 2019. The yield on average earning assets was 4.13% for the twelve months ended December 31, 2020 compared to 4.31% for the same period in 2019. The average cost of interest-bearing liabilities was 1.23% for the twelve months ended December 31, 2020 compared to 1.48% for the same period in 2019.

The net interest margin for the three months ended December 31, 2020 was 3.24% compared to 3.01% for the same period in 2019. The average yield on earning assets was 4.13% for the three months ended December 31, 2020 compared to 4.30% for the same period in 2019. The average cost of interest-bearing liabilities was 0.97% for the three months ended December 31, 2020 compared to 1.54% for the same period in 2019.

Assets

Total assets increased $37.8 million or 6.2% to $644.6 million at December 31, 2020 compared to $606.8 million at December 31, 2019. Loans, including loans held for sale, decreased 6% to $489.2 million at December 31, 2020 compared to December 31, 2019. The available-for-sale investment portfolio decreased $5.7 million from December 31, 2019 to December 31, 2020. Total cash and cash equivalents were $89.2 million at December 31, 2020, an increase of $77.2 million from December 31, 2019 when cash totaled $12.0 million. The $77.2 million increase in cash resulted primarily from a $31.0 million decrease in loans, including loans held for sale, and an increase of $34.8 million in deposits.

Nonperforming Loans

The nonperforming loans to total loans ratio was 1.07% at December 31, 2020 and 0.82% at December 31, 2019. Net loan charge-offs to average loans for the twelve months ended December 31, 2020 was 0.05% and was 0.11% for the twelve months ended December 31, 2019. The allowance for loan losses was 1.19% of total loans at December 31, 2020 and 0.88% of total loans at December 31, 2019.

Liabilities

Deposits totaled $547.0 million at December 31, 2020, an increase of $34.8 million or 6.8% from the December 31, 2019 total of $512.2 million. The $34.8 million increase in deposits consists of a $27.4 million increase in noninterest bearing accounts, a $12.2 million increase in savings accounts, a $12.2 million increase in interest bearing transaction accounts, and an $11.2 million increase in money market accounts, partially offset by a $28.2 million decrease in time deposits. Borrowed funds totaled $29.0 million as of December 31, 2020 and December 31, 2019.

Shareholders’ Equity

Shareholders’ equity increased $2,150,000 to $60.8 million at December 31, 2020 compared to December 31, 2019. The current level of shareholders’ equity equates to a book value per share of $17.23 at December 31, 2020, compared to $16.67 at December 31, 2019. Dividends paid for common shareholders were $0.15 and $0.68 for the three and twelve months ended December 31, 2020 and $0.23 and $0.92 for the three and twelve months ended December 31, 2019.

Elmira Savings Bank, with $644.6 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a state-chartered bank with five offices in Chemung County, NY; three offices 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 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,
		2020				2019			% Change
ASSETS
Cash and due from banks	$	89,099			$	11,954			645.3	%
Federal funds sold and other short-term investments		88				92			-4.3	%
Total cash and cash equivalents		89,187				12,046			640.4	%
Securities available for sale, at fair value		6,125				11,802			-48.1	%
Securities held to maturity - fair value $7,211
at December 31, 2020 and $7,209 at December 31, 2019		6,597				6,994			-5.7	%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost		9,054				9,944			-9.0	%
Loans held for sale		5,408				1,354			299.4	%
Loans receivable		483,768				518,871			-6.8	%
Less: Allowance for loan losses		5,755				4,576			25.8	%
Net loans		478,013				514,295			-7.1	%
Premises and equipment, net		15,876				16,210			-2.1	%
Bank-owned life insurance		15,410				14,919			3.3	%
Accrued interest receivable		1,564				1,625			-3.8	%
Goodwill		12,320				12,320			0.0	%
Other assets		5,033				5,320			-5.4	%
Total assets	$	644,587			$	606,829			6.2	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits	$	547,021			$	512,215			6.8	%
Borrowings		29,000				29,000			0.0	%
Other liabilities		7,805				7,003			11.5	%
Total liabilities		583,826				548,218			6.5	%
Shareholders' equity:
Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares authorized;
10,000 shares issued and none outstanding at December 31, 2020 and at December 31, 2019		9,700				9,700			0.0	%
Common stock, $1 par value; authorized 5,000,000 shares; 3,616,770 shares issued and 3,522,887 oustanding
at December 31, 2020 and 3,606,089 shares issued and 3,512,206 outstanding at December 31, 2019		3,617				3,606			0.3	%
Additional paid-in capital		54,255				53,993			0.5	%
Retained earnings		5,197				3,432			51.4	%
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares
at December 31, 2020 and December 31, 2019		(12,202	)			(12,202	)		0.0	%
Accumulated other comprehensive income		144				32			350.0	%
Total Elmira Savings Bank shareholders' equity		60,711				58,561			3.7	%
Noncontrolling interest		50				50			0.0	%
Total shareholders' equity		60,761				58,611			3.7	%
Total liabilities and shareholders' equity	$	644,587			$	606,829			6.2	%

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)			2020			2019		% Change				2020			2019		% Change
Interest and dividend income:
Interest and fees on loans		$	5,262		$	5,642		-6.7	%		$	21,475		$	21,857		-1.7	%
Interest and dividends on securities
Taxable			155			218		-28.9	%			708			977		-27.5	%
Non-taxable			71			96		-26.0	%			297			427		-30.4	%
Total interest and dividend income			5,488			5,956		-7.9	%			22,480			23,261		-3.4	%
Interest expense:
Interest on deposits			968			1,585		-38.9	%			5,018			5,992		-16.3	%
Interest on borrowings			210			212		-0.9	%			882			841		4.9	%
Total interest expense			1,178			1,797		-34.4	%			5,900			6,833		-13.7	%
Net interest income			4,310			4,159		3.6	%			16,580			16,428		0.9	%
Provision for loan losses			375			200		87.5	%			1,450			744		94.9	%
Net interest income after provision for loan losses			3,935			3,959		-0.6	%			15,130			15,684		-3.5	%
Noninterest income:
Service fees			292			345		-15.4	%			1,163			1,399		-16.9	%
Gain on sale of loans held for sale			1,820			662		174.9	%			4,577			1,790		155.7	%
Gain on sale of securities			-			-		-				-			90		-
Other service fees			203			201		1.0	%			793			822		-3.5	%
Earnings on bank-owned life insurance			104			101		3.0	%			402			385		4.4	%
Other			85			47		80.9	%			284			247		15.0	%
Total noninterest income			2,504			1,356		84.7	%			7,219			4,733		52.5	%
Noninterest expense:
Salaries and benefits			2,515			2,154		16.8	%			8,965			8,537		5.0	%
Net occupancy			396			363		9.1	%			1,613			1,562		3.3	%
Equipment			476			372		28.0	%			1,669			1,517		10.0	%
Marketing and public relations			168			272		-38.2	%			693			1,060		-34.6	%
Professional fees			195			213		-8.5	%			653			574		13.8	%
Other			1,021			798		27.9	%			3,499			2,987		17.1	%
Total noninterest expense			4,771			4,172		14.4	%			17,092			16,237		5.3	%
Income before income taxes			1,668			1,143		45.9	%			5,257			4,180		25.8	%
Income taxes			379			198		91.4	%			1,093			689		58.6	%
Net income			1,289			945		36.4	%			4,164			3,491		19.3	%
Less: Net income attributable to noncontrolling interest			5			5		-				5			5		-
Net income attibutable to Elmira Savings Bank			1,284			940		36.6	%			4,159			3,486		19.3	%
Dividend on preferred stock			-			-		-				-			-		-
Income available to common shareholders		$	1,284		$	940		36.6	%		$	4,159		$	3,486		19.3	%
Basic earnings per share		$	0.37		$	0.27		37.0	%		$	1.19		$	1.00		19.0	%
Diluted earnings per share		$	0.37		$	0.27		37.0	%		$	1.19		$	1.00		19.0	%
Weighted average shares outstanding - basic			3,511,688			3,498,955		0.4	%			3,507,910			3,495,089		0.4	%
Weighted average shares outstanding - diluted			3,511,688			3,501,487		0.3	%			3,508,722			3,500,123		0.2	%
Dividends per share		$	0.15		$	0.23		-34.8	%		$	0.68		$	0.92		-26.1	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)	For the Three Months Ended
	December 31, 2020									December 31, 2019
ASSETS:	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans	$	503,332		$	5,262		4.15	%		$	518,297		$	5,642		4.32	%
Short-term investments		2,348			-		0.04				730			3		1.64
Securities		22,177			226		4.04				30,290			311		4.09
Total interest-earning assets		527,857			5,488		4.13				549,317			5,956		4.30
Noninterest-earning assets		130,513									65,253
TOTAL ASSETS	$	658,370								$	614,570
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits	$	437,689		$	968		0.88			$	434,491		$	1,585		1.45
Borrowings		43,831			210		1.87				29,000			212		2.85
Total interest-bearing liabilities		481,520			1,178		0.97				463,491			1,797		1.54
Noninterest-bearing liabilities		116,069									92,138
Shareholders' equity		60,781									58,941
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	658,370								$	614,570
Interest rate spread							3.16	%								2.76	%
Net interest income/margin				$	4,310		3.24	%					$	4,159		3.01	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)	For the Twelve Months Ended
	December 31, 2020									December 31, 2019
ASSETS:	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans	$	516,170		$	21,475		4.14	%		$	500,066		$	21,857		4.36	%
Short-term investments		1,422			2		0.12				604			12		1.93
Securities		24,490			1,003		4.09				37,183			1,392		3.74
Total interest-earning assets		542,082			22,480		4.13				537,853			23,261		4.31
Noninterest-earning assets		104,926									68,787
TOTAL ASSETS	$	647,008								$	606,640
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits	$	434,495		$	5,018		1.15			$	430,831		$	5,992		1.39
Borrowings		43,964			882		1.97				29,186			841		2.84
Total interest-bearing liabilities		478,459			5,900		1.23				460,017			6,833		1.48
Noninterest-bearing liabilities		108,595									87,883
Shareholders' equity		59,954									58,740
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	647,008								$	606,640
Interest rate spread							2.90	%								2.83	%
Net interest income/margin				$	16,580		3.06	%					$	16,428		3.04	%

				Quarter Ended
(Dollars in Thousands, Except Per Share Data)				12/31/2020			9/30/2020			6/30/2020			3/31/2020			12/31/2019
Operating Data
	Net income		$	1,284		$	948		$	909		$	1,018		$	940
	Net interest income			4,310			3,852			4,137			4,281			4,159
	Provision for loan losses			375			450			575			50			200
	Non-interest income			2,504			1,928			1,648			1,139			1,356
	Non-interest expense			4,771			4,155			4,085			4,081			4,172
Performance Statistics
	Net interest margin			3.24	%		2.81	%		2.98	%		3.16	%		3.01	%
	Annualized return on average assets			0.78	%		0.55	%		0.57	%		0.68	%		0.61	%
	Annualized return on average equity			8.40	%		6.27	%		6.12	%		6.93	%		6.33	%
	Annualized net loan charge-offs to avg loans			0.03	%		0.04	%		0.09	%		0.05	%		0.14	%
	Net charge-offs			38			57			116			60			183
	Efficiency ratio			70.0	%		71.9	%		70.6	%		75.3	%		75.6	%
Per Share Data
	Basic earnings per share		$	0.37		$	0.27		$	0.26		$	0.29		$	0.27
	Diluted earnings per share			0.37			0.27			0.26			0.29			0.27
	Dividend declared per share			0.15			0.15			0.15			0.23			0.23
	Book value			17.23			17.01			16.87			16.77			16.67
	Common stock price:
		High		13.25			11.18			13.39			17.40			15.99
		Low		10.44			10.30			10.49			11.50			13.97
		Close		11.50			11.02			11.00			11.50			15.10
	Weighted average common shares:
		Basic		3,512			3,509			3,507			3,503			3,499
		Fully diluted		3,512			3,509			3,507			3,507			3,501
	End-of-period common shares:
		Issued		3,617			3,617			3,617			3,611			3,606
		Treasury		94			94			94			94			94
Financial Condition Data:
General
	Total assets		$	644,587		$	674,032		$	675,862		$	598,017		$	606,829
	Loans, net			478,013			504,946			518,698			506,076			514,295
	Intangibles			12,320			12,320			12,320			12,320			12,320
	Total deposits			547,021			551,350			551,225			501,760			512,215
		Noninterest-bearing		109,346			107,423			109,985			83,431			81,934
		Savings		82,573			79,492			79,150			72,174			70,358
		NOW		100,293			98,464			91,166			83,323			88,126
		Money Market		35,920			34,375			28,467			20,306			24,724
		Time deposits		218,889			231,596			242,457			242,526			247,073
		Total interest-bearing deposits		437,675			443,927			441,240			418,329			430,281
	Shareholders' equity			60,761			59,960			59,496			59,044			58,611
Asset Quality
	Non-performing assets		$	5,304		$	5,507		$	5,578		$	4,686		$	4,723
	Non-performing assets to total assets			0.82	%		0.82	%		0.83	%		0.78	%		0.78	%
	Allowance for loan losses			5,755			5,418			5,025			4,566			4,576
	Allowance for loan losses to total loans			1.19	%		1.06	%		0.96	%		0.89	%		0.88	%
	Allowance for loan losses to
		non-performing loans		112.67	%		104.11	%		95.28	%		105.43	%		108.51	%
	Non-performing loans to total loans			1.07	%		1.03	%		1.02	%		0.86	%		0.82	%
Capitalization
	Shareholders' equity to total assets			9.43	%		8.90	%		8.80	%		9.87	%		9.66	%

For further information contact:
Thomas M. Carr, President & CEO
Elmira Savings Bank
333 East Water Street
Elmira, New York 14901
(607) 735-8660
tcarr@elmirasavingsbank.com

FAQ

What was Elmira Savings Bank's net income for the fourth quarter of 2020?

Elmira Savings Bank's net income for Q4 2020 was $1,284,000.

How did diluted earnings per share change for Elmira Savings Bank in 2020?

Diluted earnings per share increased to $1.19 in 2020, up from $1.00 in 2019.

What was the net interest margin for Elmira Savings Bank for the year ending December 31, 2020?

The net interest margin for the year ended December 31, 2020 was 3.06%.

How much did total assets increase for Elmira Savings Bank in 2020?

Total assets increased by $37.8 million or 6.2% to $644.6 million at the end of 2020.

Did Elmira Savings Bank increase its loan loss reserves in 2020?

Yes, the bank increased its loan loss reserves due to economic uncertainties from the COVID-19 pandemic.