ES Bancshares, Inc. Announces Fourth Quarter 2024 Results; Continues Trend of Net Interest Margin Expansion and Asset Quality

Rhea-AI Summary

ES Bancshares (OTCQX: ESBS) reported Q4 2024 net income of $466,000 ($0.03 per diluted share), compared to $582,000 ($0.08 per diluted share) in Q3 2024. The company's net interest margin improved to 2.50% from 2.30% in the previous quarter.

Total assets were $636.6 million as of December 31, 2024, a slight decrease of 0.3% year-over-year. Loans receivable decreased 0.8% from December 31, 2023. Nonperforming assets increased to $5.3 million (0.84% of total assets) from $1.4 million year-over-year, primarily due to two loans placed on non-accrual status.

The company replaced $56 million of higher-cost wholesale funding with lower-cost organic deposits in 2024. Total revenues for Q4 2024 were $8.4 million, showing consecutive quarterly growth. The bank maintained strong capital ratios, with a Tier 1 leverage ratio of 9.31% and total capital ratio of 14.93%.

Positive

• Net interest margin expanded to 2.50% from 2.30% quarter-over-quarter
• Total revenues increased for second consecutive quarter to $8.4 million
• Successfully replaced $56 million of higher-cost funding with lower-cost deposits
• Operating expenses decreased 7.1% year-over-year due to cost-cutting program
• Strong capital ratios maintained above 'well-capitalized' thresholds

Negative

• Net income decreased to $466,000 in Q4 2024 from $582,000 in Q3 2024
• Nonperforming assets increased to $5.3 million from $1.4 million year-over-year
• Annual net income declined to $1.1 million in 2024 from $1.5 million in 2023
• Net interest income decreased 11% year-over-year
• Total assets decreased by 0.3% year-over-year

STATEN ISLAND, N.Y., Jan. 29, 2025 (GLOBE NEWSWIRE) -- ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today reported net income of $466 thousand, or $0.03 per diluted common share, for the quarter ended December 31, 2024, compared to a net income of $582 thousand or $0.08 per diluted common share for the quarter ended September 30, 2024.

Key Quarterly Financial Data										2024 Highlights
Performance Metrics		4Q24			3Q24			4Q23		•The Cost of Funds for the three months ended December 31, 2024, improved to 3.02% from 3.02% in the prior linked quarter. •For 3 months ended December 31, 2024, the Company’s net interest margin increased to 2.50% compared to 2.30% for the 3 months ended September 30, 2024. •The Company sold $3 million in SBA 7a loan during the quarter, resulting in a gain on loan sale. •The Company has replaced $56 million of higher-costing wholesale funding with lower cost organic deposits over the nine-months in 2024. •Total Revenues for the quarter ended December 31, 2024, totaled $8.4 million increasing for a second consecutive quarter.
Return on average assets (%)		0.29			0.36			0.05
Return on average equity (%)		3.94			4.98			0.73
Return on average tangible equity (%)		3.99			5.04			0.74
Net interest margin (%)		2.50			2.30			2.28
Income Statement (a)		4Q24			3Q24			4Q23
Net interest income	$	3,876		$	3,567		$	3,454
Non-interest income	$	372		$	609		$	322
Net income	$	466		$	582		$	84
Earnings per diluted common share	$	0.03		$	0.08		$	0.01
Balance Sheet (a)		4Q24			3Q24			4Q23
Average total loans	$	566,031		$	566,031		$	569,515
Average total deposits	$	512,120		$	512,120		$	470,394
Book value per share	$	6.89		$	6.85		$	6.83
Tangible book value per share	$	6.81		$	6.77		$	6.74
(a) In thousands except for per share amounts

Phil Guarnieri, Director, and Chief Executive Officer of ES Bancshares said, “We ended 2024 with positive trends over the last two quarters. The downward turn in interest rates has bolstered our net interest income. The Company’s net interest margin increased by twenty basis points, demonstrating growth for the past three quarters. This coupled with our cost containment program has bolstered our core earnings. The Company’s balance sheet and capital position remain a strength for our Company.”

Selected Balance Sheet Information:

December 31, 2024 vs. December 31, 2023

As of December 31, 2024, total assets were $636.6 million, a decrease of $2.1 million, or 0.3%, as compared to total assets of $638.7 million on December 31, 2023. The decrease can be attributed to a slightly smaller loan portfolio.

Loans receivable, net of Allowance for Credit Losses on Loans totaled $559.3 million, a decrease of 0.8% from December 31, 2023. As of December 31, 2024, the Allowance for Credit Losses on Loans as a percentage of gross loans was 0.91%.

Nonperforming assets, which includes nonaccrual loans and foreclosed real estate were $5.3 million or 0.84% of total assets, as of December 31, 2024, increasing from $1.4 million or 0.22% of total assets at December 31, 2023. The ratio of nonaccrual loans to loans receivable was 0.94%, as of December 31, 2024, and 0.22% for December 31, 2023. The increase from December 31, 2023, was primarily due to one Commercial Real Estate and one 1-4 family investor loan being placed on non-accrual status. Both loans are deemed to be well collateralized and in total amount to $4.0 million.

Total liabilities decreased $3.8 million to $589.1 million at December 31, 2024 from $592.9 million at December 31, 2023. The decrease can be attributed to repayments of brokered deposits and Federal Home Loan (FHLB) borrowings partially offset by growth in core deposits. The growth in deposits was driven by an increase in interest-bearing, non-maturity deposit accounts, as well as interest-bearing deposits.

As of December 31, 2024, the Bank's Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 9.31%, 13.68%, 13.68% and 14.93%, respectively, all in excess of the ratios required to be deemed "well-capitalized." During the Fourth quarter 2024 the Company did not repurchase shares under its stock repurchase program. Book value per common share was $6.89 at December 31, 2024 compared to $6.83 at December 31, 2023. Tangible common book value per share (which represents common equity less goodwill, divided by the number of shares outstanding) was $6.81 at December 31, 2024 compared to $6.74 at December 31, 2023.

Financial Performance Overview:

Three Months Ended December 31, 2024, vs. September 30, 2024

For the three months ended December 31, 2024, the Company net income totaled $466 thousand compared to a net income of $582 thousand for the three months ended September 30, 2024. The decrease can be attributed to lower non-interest income and non-interest expense, partially offset by higher net interest income quarter over quarter.

Net interest income for the three months ended December 31, 2024, increased $309 thousand, to $3.9 million from $3.6 million at three months ended September 30, 2024. The Company’s net interest margin widened by nine basis points to 2.50% for the three months ended December 31, 2024, as compared to 2.30% for the three months ended September 30, 2024. The increase in margin can be attributed to a reduction in the Company’s average cost for its interest-bearing liabilities.

There was a $2 thousand provision for credit losses taken for the three months ended December 31, 2024, compared to a reversal for credit losses of $38 thousand for the three months ended September 30, 2024.

Non-interest income decreased $237 thousand, to $372 thousand for the three months ended December 31, 2024, compared with non-interest income of $609 thousand for the three months ended September 30, 2024. The majority of the decrease can be attributed to lower service charges and fees and no gain on extinguishment of the Company’s subordinated debt, partially offset by the gain on loan sales.

Non-interest expenses totaled $3.6 million for the three months ended December 31, 2024, compared to $3.4 million for the three months ended September 30, 2024. The largest fluctuations quarter over quarter were due to a $154 thousand increase in other expenses, due to a lack of a recovery of collection expenses that we realized in the September 2024 quarter, an increase in employment search fees, and other expenses. The $92 thousand increase in professional fees, due to higher legal and consulting fees as compared to the quarter ended September 30, 2024.

Twelve months ended December 31, 2024 vs. December 31, 2023

For the twelve months ended December 31, 2024, net income totaled $1.1 million in comparison to $1.5 million for the twelve months ended December 31, 2023. The decrease can mainly be attributed to higher costs paid on deposits which increased $5.1 million year over year.

Net interest income for the twelve months ended December 31, 2024, decreased 11% or $1.8 million, to $14.1 million from $15.9 million at December 31, 2023. The decrease can be attributed to increased interest expense for deposits, partially offset by increased interest income earned on the loan portfolio.

Provision for credit losses totaled $12 thousand for the twelve months ended December 31, 2024, compared to a $20 thousand provision for the twelve months ended December 31, 2023.

Non-interest income totaled $1.2 million for the twelve months ended December 31, 2024, compared with noninterest income of $758 thousand for the twelve months ended December 31, 2023. The increase can be attributed to the gain recorded on extinguishment of sub-debt which is partially offset by decreased in gain on sale of loans period over period.

Operating expenses totaled $14.0 million for the twelve months ended December 31, 2024, compared to $15.0 million for the twelve months ended December 31, 2023, or a decrease of 7.1%. The decrease in non-interest expense can be attributed to initiatives taking effect from the cost-cutting program launched in 2024.

About ES Bancshares Inc.
ES Bancshares, Inc. (the “Company”) is incorporated under Maryland law and serves as the holding company for Empire State Bank (the “Bank”). The Company is subject to regulation by the Board of Governors of the Federal Reserve System while the Bank is primarily subject to regulation and supervision by the New York State Department of Financial Services. Currently, the Company does not transact any material business other than through the Bank, its subsidiary.

The Bank was organized under federal law in 2004 as a national bank regulated by the Office of the Comptroller of the Currency. The Bank's deposits are insured up to legal limits by the FDIC. In March 2009, the Bank converted its charter to a New York State commercial bank charter. The Bank’s principal business is attracting commercial and retail deposits in New York and investing those deposits primarily in loans, consisting of commercial real estate loans, and other commercial loans including SBA and mortgage loans secured by one-to-four-family residences. In addition, the Bank invests in mortgage-backed securities, securities issued by the U.S. Government and agencies thereof, corporate securities and other investments permitted by applicable law and regulations.

We operate from our five Banking Center locations, a Loan Production Office and our Corporate Headquarters located in Staten Island, New York. The Company’s website address is www.esbna.com. The Company’s annual report, quarterly earnings releases and all press releases are available free of charge through its website, as soon as reasonably practicable.

Forward-Looking Statements

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 release 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 ES Bancshares, Inc’s. control. The forward-looking statements included in this release are made only as of the date of this release. We have no intention, and do not assume any obligation, to update these forward-looking statements.

Investor Contact:
Peggy Edwards, Corporate Secretary
(845) 451-7825

ES Bancshares, Inc.
Consolidated Statements of Financial Condition
(in thousands)
		December 31,			December 31,
		2024			2023
		|----(unaudited)----|
Assets
Cash and cash equivalents	$	26,713			32,728
Securities, net		22,336			15,220
Loans receivable, net:
Real estate mortgage loans		545,569			551,124
Commercial and Lines of Credit		14,418			13,301
Home Equity and Consumer Loans		398			349
Deferred costs		4,084			4,233
Allowance for Loan Credit Losses		(5,137	)		(5,086	)
Total loans receivable, net		559,330			563,920
Accrued interest receivable		2,628			2,625
Investment in restricted stock, at cost		4,335			5,191
Goodwill		581			581
Bank premises and equipment, net		4,845			5,600
Repossessed assets		-			-
Right of use lease assets		5,894			6,415
Bank Owned Life Insurance		5,489			5,341
Other Assets		4,471			1,129
Total Assets	$	636,622			638,750
Liabilities & Stockholders' Equity
Non-Interest-Bearing Deposits		133,268			109,065
Interest-Bearing Deposits		359,816			328,479
Brokered Deposits		20,750			56,581
Total Deposits		513,834			494,125
Bond Issue, net of costs		11,787			13,708
Borrowed Money		50,084			70,805
Lease Liability		6,172			6,672
Other Liabilities		7,195			7,578
Total Liabilities		589,071			592,888
Stockholders' equity		47,551			45,862
Total liabilities and stockholders' equity	$	636,622			638,750

	ES Bancshares, Inc.
	Consolidated Statements of Income
	(in thousands)
	Three Months Ended										Twelve Months Ended
	December 31, 2024		September 30, 2024				December 31, 2023				December 31, 2024		December 31, 2023
	|--------------(unaudited)--------------|										|----(unaudited)----|
Interest income
Loans	$	7,405	$	7,315			$	7,059			$	29,273	$	26,343
Securities		224		218				110				678		446
Other interest-earning assets		373		428				278				1,624		1,418
Total Interest Income		8,002		7,961				7,447				31,576		28,207
Interest expense
Deposits		3,436		3,674				2,945				14,531		9,052
Borrowings		690		720				1,048				2,950		3,268
Total Interest Expense		4,126		4,394				3,993				17,482		12,320
Net Interest Income		3,876		3,567				3,454				14,094		15,887
(Rev)Prov for Credit Losses		2		(38	)			(83	)			12		20
Net Interest Income after (Rev)Prov for Credit Losses		3,874		3,605				3,537				14,082		15,867
Non-interest income
Service charges and fees		192		264				254				828		762
Gain on loan sales		139		-				30				140		168
Gain on extinguishment of Sub-debt		-		245				-				245		-
Other		42		100				38				314		149
Total non-interest income		372		609				322				1,527		1,080
Non-interest expenses
Compensation and benefits		1,662		1,719				1,745				6,830		7,408
Occupancy and equipment		618		618				646				2,509		2,656
Data processing service fees		295		315				357				1,253		1,396
Professional fees		247		155				357				808		1,104
FDIC & NYS Banking Assessments		132		100				88				428		272
Advertising		64		84				101				308		406
Insurance		56		55				51				208		190
Other		518		365				405				1,622		1,603
Total non-interest expense		3,592		3,411				3,750				13,966		15,035
Income prior to tax expense		654		803				109				1,643		1,912
Income taxes		188		221				25				539		440
Net Income	$	466	$	582			$	84			$	1,104	$	1,472

	ES Bancshares, Inc.
	Average Balance Sheet Data
	For the Three Months Ended (dollars in thousands)
	December 31, 2024						September 30, 2024						June 30, 2024
	Avg Bal		Interest		Average		Avg Bal		Interest		Average		Avg Bal		Interest		Average
	Rolling		Rolling				Rolling		Rolling				Rolling		Rolling
Assets	3 Mos.		3 Mos.		Yield/Cost		3 Mos.		3 Mos.		Yield/Cost		3 Mos.		3 Mos.		Yield/Cost
Interest-earning assets:
Loans receivable	$	564,745	$	7,405	5.24	%	$	566,031	$	7,315	5.17	%	$	569,515	$	7,059	4.96	%
Investment securities		22,898		224	3.91	%		22,480		218	3.87	%		15,957		110	2.75	%
Other interest-earning assets		31,135		373	4.69	%		31,656		428	5.29	%		20,128		278	5.40	%
Total interest-earning assets		618,778		8,002	5.17	%		620,167		7,961	5.13	%		605,600		7,447	4.92	%
Non-interest earning assets		18,048						17,919						16,840
Total assets	$	636,826					$	638,086					$	622,440
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing checking	$	32,800	$	27	0.33	%	$	33,512	$	55	0.65	%	$	25,368	$	23	0.36	%
Savings accounts		217,746		1,695	3.09	%		200,248		1,728	3.42	%		123,641		884	2.84	%
Certificates of deposit		166,368		1,714	4.09	%		173,577		1,891	4.32	%		207,091		2,037	3.90	%
Total interest-bearing deposits		416,914		3,436	3.27	%		407,337		3,674	3.58	%		356,101		2,945	3.28	%
Borrowings		50,189		499	3.94	%		52,984		519	3.89	%		76,844		827	4.27	%
Subordinated debenture		11,784		191	6.43	%		13,726		201	5.81	%		13,705		221	6.41	%
Total interest-bearing liabilities		478,887		4,126	3.42	%		474,047		4,394	3.68	%		446,649		3,993	3.55	%
Non-interest-bearing demand deposits		96,011						104,782						114,293
Other liabilities		14,580						13,045						15,803
Total non-interest-bearing liabilities		110,591						117,827						130,096
Stockholders' equity		47,347						46,211						45,695
Total liabilities and stockholders' equity	$	636,826					$	638,086					$	622,440
Net interest income			$	3,874					$	3,567					$	3,454
Average interest rate spread					1.75	%					1.46	%					1.37	%
Net interest margin					2.50	%					2.30	%					2.28	%

Five Quarter Performance Ratio Highlights		Three Months Ended
		December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Performance Ratios (%) - annualized
Return(loss) on Average Assets			0.29			0.36			0.10			(0.07	)		0.05
Return(loss) on Average Equity			3.94			4.98			1.37			(0.90	)		0.73
Return(loss) on Average Tangible Equity			3.99			5.04			1.38			(0.91	)		0.74
Efficiency Ratio			84.58			81.70			92.86			101.08			99.31
Yields / Costs (%)
Average Yield - Interest Earning Assets			5.17			5.13			5.16			5.03			4.92
Average Cost - Interest-bearing Liabilities			3.42			3.69			3.86			3.82			3.55
Net Interest Margin			2.50			2.30			2.21			2.12			2.28
Capital Ratios (%)
Equity / Assets			7.47			7.44			7.12			7.34			7.18
Tangible Equity / Assets			7.38			7.36			7.03			7.26			7.09
Tier I leverage ratio (a)			9.31			9.18			9.30			9.52			9.45
Common equity Tier I capital ratio (a)			13.68			13.67			13.81			13.63			13.60
Tier 1 Risk-based capital ratio (a)			13.68			13.67			13.81			13.63			13.60
Total Risk-based capital ratio (a)			14.93			14.92			15.06			14.88			14.85
Stock Valuation
Book Value		$	6.89		$	6.85		$	6.74		$	6.75		$	6.83
Tangible Book Value		$	6.81		$	6.77		$	6.65		$	6.67		$	6.74
Shares Outstanding (b)			6,900			6,878			6,884			6,834			6,714
Asset Quality (%)
ACL / Total Loans			0.91			0.90			0.90			0.89			0.89
Non Performing Loans / Total Loans			0.94			0.91			0.22			0.24			0.22
Non Performing Assets / Total Assets			0.84			0.81			0.19			0.21			0.22
(a) Ratios at Bank level                            (b) Shares information presented in thousands

FAQ

What was ES Bancshares (ESBS) Q4 2024 net income and EPS?

ES Bancshares reported Q4 2024 net income of $466,000, or $0.03 per diluted share.

How did ESBS net interest margin change in Q4 2024?

ESBS net interest margin increased to 2.50% in Q4 2024 from 2.30% in Q3 2024.

What was ESBS's nonperforming assets ratio as of December 31, 2024?

Nonperforming assets were $5.3 million or 0.84% of total assets as of December 31, 2024.

How much higher-cost funding did ESBS replace with lower-cost deposits in 2024?

ESBS replaced $56 million of higher-cost wholesale funding with lower-cost organic deposits in 2024.

What were ESBS's key capital ratios as of December 31, 2024?

As of December 31, 2024, ESBS's Tier 1 capital leverage ratio was 9.31% and total capital ratio was 14.93%.