ES Bancshares, Inc. Reports $0.13 EPS for the Quarter Ended December 31, 2022 and EPS of $0.79 for the Year Ended 2022; Improves Tangible Book Value to $6.47; Maintains Strong Asset Quality

Rhea-AI Summary

ES Bancshares reported a net income of $843 thousand, or $0.13 per share, for Q4 2022. Key metrics include net revenues of $4.8 million, driven by $4.4 million in net interest income, and a 20% annual increase in average loans. Total assets rose to $588 million, marking a record high. The company recognized a $100 thousand provision for loan losses, contrasting with no provisions in the prior quarter. Despite rising funding costs, the net interest margin remained stable at 3.26%. Noninterest income increased to $357 thousand due to higher loan fees. ES Bancshares maintains a solid capital position, with key ratios exceeding regulatory requirements.

Positive

• Net income of $843 thousand for Q4 2022.
• Total assets reached $588 million, the highest since inception.
• Loans receivable increased by $84.5 million, or 20%, year-over-year.
• Non-interest income rose to $357 thousand, attributed to increased loan fees.
• Total deposits grew by $16.1 million or 3.7% year-over-year.

Negative

• Net income decreased by $29 thousand from Q3 2022, partially due to loan loss provisions.
• Return on average assets dropped to 0.60% from 1.05% year-over-year.
• Net interest margin decreased by one basis point to 3.26%.

STATEN ISLAND, N.Y., Jan. 31, 2023 (GLOBE NEWSWIRE) -- ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today announced net income of $843 thousand, or $0.13 per share for the quarter ended December 31, 2022.  

Key Financial Data										4Q22 Highlights
Profitability Metrics	4Q22			3Q22			4Q21			• Net Revenues of $4.8 million including $4.4 million of net interest income and $357 thousand of non-interest income • Net Income of $843 thousand and earnings per common share of $0.13 • Average loans increased 8.5% quarter-over-quarter with average total deposits increasing by 2.9% since prior quarter. • During the quarter ended December 31, 2022, Empire State Bank recorded a provision for loan losses of $100 thousand compared to prior quarter which no provision or benefit was recorded. The increase was driven by the increase in total loans period over period. • Total assets grew to $588 million the largest since inception of the Company in 2006.
Return on average assets (%)		0.60	%		0.65	%		1.05	%
Return on average common equity (%)		7.71	%		8.12	%		13.85	%
Return on tangible common equity (%)		7.82	%		8.23	%		14.06	%
Net interest margin (%)		3.26	%		3.27	%		3.83	%
Income Statement (a)	4Q22			3Q22			4Q21
Net interest income	$	4,404		$	4,242		$	5,259
Non-interest income	$	357		$	266		$	409
Net income	$	843		$	872		$	1,340
Earnings per share- Basic	$	0.13		$	0.13		$	0.20
Earnings per share- Diluted	$	0.12		$	0.13		$	0.19
Balance Sheet (a)	4Q22			3Q22			4Q21
Average total loans	$	494,728		$	456,085		$	429,896
Average total deposits	$	443,988		$	431,600		$	424,228
Book value per share	$	6.55		$	6.47		$	5.90
Tangible book value per share	$	6.47		$	6.39		$	5.82
(a) In thousands except for per share amounts

Phil Guarnieri, Chief Executive Officer and Director of ES Bancshares, Inc. commented on the quarter stating, “We close out 2022 with healthy asset growth over the quarter and 20% loan growth year over year. This loan growth has exceeded the levels we saw at the height of the PPP program and will generate future value for years to come. Like most in the industry the Company saw pressure on the cost of funding, derived from the rapidly increasing interest rate environment, but the Company was able to maintain its net interest margin. With that said we are confident in our ability to execute our strategic plan in 2023.” Mr. Guarnieri went on to further state, “2022 was a record year for ESBS as we benefited from organic core business development which led to disciplined asset growth.”

Tom Sperzel, President, Chief Operating Officer and Director of ES Bancshares, Inc. added, “I am optimistic that with our strong underwriting standards, the local deposit market and our capital position, the balance sheet is set up to accommodate anticipated interest rate scenarios.”

Selected Balance Sheet Information
As of December 31, 2022, total assets were $587.9 million, an increase of $72.5 million, or 14.1%, as compared to total assets of $515.3 million on December 31, 2021. Loans receivable, net of allowance totaled $506.7 million, an increase of $84.5 million or 20% from December 31, 2021. The increase in loans receivable, net was attributable to higher loan originations fueled by the Bank’s investor residential product.

Asset quality remains strong with the allowance for loan loss representing 1.14% of the total loan portfolio at December 31, 2022, compared to 1.37% at December 31, 2021. Nonperforming assets, which includes nonaccrual loans and repossessed assets were $1.3 million or 0.25% of total assets, as of December 31, 2022, improving from $1.9 million or 0.38% of total assets of December 31, 2021. The ratio of nonaccrual loans to loans receivable was 0.28% and 0.45%, as of December 31, 2022, and 2021, respectively.

Total deposits increased $16.1 million, or 3.7% to $449.8 million as of December 31, 2022, when compared to December 31, 2021. This annual deposit growth is inclusive of the June 2022 sale of $67 million in deposits in conjunction with the sale of our Newburgh office, consistent with our business plan to centralize the Company’s retail market to Staten Island and the Brooklyn markets.

As of December 31, 2022, the Bank's Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 10.11%, 14.26%, 14.26% and 15.51%, respectively, all in excess of the ratios required to be deemed "well-capitalized." As of December 31, 2022, ES Bancshares return on average equity and return on tangible equity was 7.71% and 7.82% respectively. Goodwill was $581 thousand as of December 31, 2022, and December 31, 2021.

Financial Performance Overview:
For the three months ended December 31, 2022, net income totaled $843 thousand, which reflects a decrease of $29 thousand, in comparison to $872 thousand for the three months ended September 30, 2022. The decrease resulted primarily from a provision for loan loss entry.

Net interest income for the three months ended December 31, 2022, increased $162 thousand to $4.40 million from $4.24 million at September 30, 2022. The Company’s net interest margin remained relatively unchanged, decreasing by one basis point to 3.26% for the three months ended December 31, 2022, as compared to 3.27% for the three months ended September 30, 2022. The decrease can be attributed to increased cost of funds.

There was a $100 thousand provision for loan losses entry for the three months ended December 31, 2022, compared to no entry for the three months ended September 30, 2022. Net recoveries for the three months ended December 31, 2022, totaled $1 thousand. The increase was driven by the increase in total loans period over period.

Non-interest income increased $91 thousand, to $357 thousand for the three months ended December 31, 2022, compared with non-interest income of $266 thousand for the three months ended September 30, 2022. The increase is a result from increased loan fees received.

Non-interest expense totaled $3.49 million for the three months ended December 31, 2022, compared to $3.38 million for the three months ended September 30, 2022, or an increase of 3.3%. The increase in non-interest expense can be attributed to normalized Marketing and NYS Banking & FDIC assessment fees offset by against improved Occupancy and equipment expense.

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 (the “FRB”) 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 (OCC). 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 (“MBS”), 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, two Loan Production offices 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 Statement of Financial Condition (in thousands)
		December 31, 2022		September 30, 2022			December 31, 2021
		(unaudited)		(unaudited)			(Audited)
Assets
Cash and cash equivalents	$	38,115		30,481			59,078
Securities		16,042		32,622			11,192
Loans receivable, net:
Real estate mortgage loans		494,064		459,916			378,126
Commercial and Lines of Credit		14,110		14,484			41,879
Construction Loans		-		-			560
Home Equity and Consumer Loans		466		668			5,187
Deferred costs		3,953		3,828			2,353
Allowance for loan losses		(5,860	)	(5,760	)		(5,869	)
Total loans receivable, net		506,732		473,136			422,236
Investment in restricted stock, at cost		4,779		3,432			2,502
Bank premises and equipment, net		6,209		5,776			6,427
Accrued interest receivable		2,020		1,975			1,827
Goodwill		581		581			581
Repossessed assets		-		117			-
Bank Owned Life Insurance		5,202		5,168			5,067
Other Assets		8,175		8,132			6,408
Total Assets	$	587,855		561,420			515,318
Liabilities & Stockholders' Equity
Non-Interest-Bearing Deposits		132,997		150,677			149,769
Interest-Bearing Deposits		276,174		263,217			273,876
Brokered Deposits		40,627		39,051			10,040
Total Deposits		449,798		452,945			433,685
Bond Issue, net of costs		13,666		13,658			13,627
Borrowed Money		64,900		35,000			15,169
Other Liabilities		15,490		16,665			13,590
Total Liabilities		543,854		518,268			476,071
Stockholders' equity		44,001		43,152			39,247
Total liabilities and stockholders' equity	$	587,855		561,420			515,318

	ES Bancshares, Inc. Consolidated Statement of Income (in thousands)
	Three Months Ended													Years Ended
	December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022				December 31, 2022				December 31, 2021
	(unaudited)			(unaudited)			(unaudited)			(unaudited)				(unaudited)				(Audited)
Interest income
Loans	$	5,652		$	4,943		$	4,672		$	4,771			$	20,038			$	20,148
Securities		137			172			163			91				563				151
Other interest-earning assets		228			164			157			64				613				262
Total Interest Income		6,017			5,279			4,992			4,926				21,214				20,561
Interest expense
Deposits		1,068			643			347			294				2,352				1,342
Borrowings		545			394			274			271				1,484				1,338
Total Interest Expense		1,613			1,037			621			565				3,836				2,680
Net Interest Income		4,404			4,242			4,371			4,361				17,378				17,881
Provision/(Benefit) for Loan Losses		99			-			(65	)		(113	)			(79		)		670
Net Interest Income after Pro/(Benefit) for Loan Losses		4,305			4,242			4,436			4,474				17,457				17,211
Non-interest income
Deposit service charges		91			84			88			84				347				464
Loan fee income		146			83			76			141				446				372
Gain on Loan Sales		-			-			-			241				241				343
Gain on Branch Sale		-			-			1,782			-				1,782				-
Other		120			99			97			38				354				85
Total non-interest income		357			266			2,043			504					3,170			1,264
Non-interest expenses
Compensation and benefits		1,881			1,826			1,839			1,721				7,267				6,570
Occupancy and equipment		554			722			666			689				2,631				2,448
Data processing service fees		386			345			262			260				1,253				913
Marketing		77			(35	)		100			108				250				228
Professional fees		179			194			205			255				833				672
NYS Banking & FDIC Assess		56			14			73			82				225				306
Printing & Office Supplies		68			45			29			44				186				156
Insurance		53			53			32			38				176				138
Other		238			217			280			275				1,010				1,133
Total non-interest expense		3,492			3,381			3,486			3,472				13,831				12,564
Income prior to tax expense		1,170			1,127			2,993			1,506				6,796				5,911
Income taxes		327			255			639			326				1,547				1,285
Net Income	$	843		$	872		$	2,354		$	1,180			$	5,249			$	4,626

	For the Three Months Ended (dollars in thousands)
	December 31, 2022								September 30, 2022								December 31, 2021
	Avg Bal Rolling 3 Mos.			Interest Rolling 3 Mos.			Average Yield/ Cost		Avg Bal Rolling 3 Mos.			Interest Rolling 3 Mos.			Average Yield/ Cost		Avg Bal Rolling 3 Mos.			Interest Rolling 3 Mos.			Average Yield/ Cost
Assets
Interest-earning assets:
Loans receivable	$	494,728		$	5,652		4.57	%	$	456,085		$	4,943		4.33	%	$	429,896		$	5,135		4.78	%
Investment securities		22,678			137		2.42	%		33,194			172		2.07	%		8,568			63		2.93	%
Interest-bearing deposits		19,536			162		3.32	%		27,240			114		1.68	%		48,757			27		0.22	%
Restricted investment in bank stock		3,652			66		7.20	%		1,691			50		11.78	%		2,664			34		5.11	%
Total interest-earning assets		540,594			6,017		4.45	%		518,210			5,279		4.07	%		489,885			5,259		4.29	%
Non-interest earning assets		17,871								19,798								19,123
Total assets	$	558,465							$	538,008							$	509,008
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing checking	$	32,065		$	35		0.44	%	$	32,736		$	34		0.41	%	$	35,051		$	33		0.38	%
Money market accounts		7,201			4		0.25	%		6,589			3		0.20	%		10,579			5		0.19	%
Savings accounts		108,170			221		0.81	%		134,132			180		0.53	%		164,896			122		0.29	%
Certificates of deposit		155,086			808		2.07	%		117,679			426		1.44	%		73,457			110		0.60	%
Total interest-bearing deposits		302,522			1,068		1.40	%		291,136			643		0.88	%		283,983			270		0.38	%
Borrowings		40,980			324		3.14	%		35,000			173		1.96	%		19,988			76		1.51	%
Subordinated debenture		13,663			221		6.42	%		13,655			221		6.42	%		13,627			221		6.43	%
Total interest-bearing liabilities		357,165			1,613		1.79	%		339,791			1,037		1.21	%		317,598			567		0.71	%
Non-interest-bearing demand deposits		141,466								140,464								140,244
Other liabilities		16,121								14,803								12,469
Total non-interest-bearing liabilities		157,587								155,267								152,713
Stockholders' equity		43,713								42,950								38,697
Total liabilities and stockholders' equity	$	558,465							$	538,008							$	509,008
Net interest income				$	4,404							$	4,242							$	4,691
Average interest rate spread							2.66	%							2.86	%							3.58	%
Net interest margin							3.26	%							3.27	%							3.83	%

Five Quarter Performance Ratio Highlights		Three Months Ended
		December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021
Income Statement
	Return on Average Assets		0.60	%		0.65	%		1.73	%		0.90	%		1.04	%
	Return on Average Equity		7.71	%		8.12	%		22.83	%		11.78	%		13.82	%
	Return on Average Tangible Equity		7.82	%		8.23	%		23.15	%		11.96	%		14.03	%
	Efficiency Ratio		54.79	%		60.97	%		52.56	%		68.27	%		62.17	%
Yields / Costs
	Average Yield - Interest Earning Assets		4.45	%		4.07	%		3.82	%		3.95	%		4.29	%
	Cost of Funds		1.79	%		1.21	%		0.73	%		0.69	%		0.71	%
	Net Interest Margin		3.26	%		3.27	%		3.34	%		3.47	%		3.83	%
Capital Ratios
	Equity / Assets		7.48	%		7.68	%		7.85	%		7.43	%		7.62	%
	Tangible Equity / Assets		7.39	%		7.59	%		7.75	%		7.33	%		7.50	%
	Tier 1 leverage ratio (a)		10.1	%		10.3	%		9.9	%		10.0	%		9.9	%
	Common equity Tier I capital ratio (a)		14.3	%		14.7	%		15.8	%		15.5	%		15.5	%
	Tier 1 Risk-based capital ratio (a)		14.3	%		14.7	%		15.8	%		15.5	%		15.5	%
	Total Risk-based capital ratio (a)		15.5	%		16.0	%		17.0	%		16.8	%		16.7	%
Stock Valuation
	Book Value	$	6.55		$	6.47		$	6.37		$	6.04		$	5.90
	Tangible Book Value	$	6.47		$	6.39		$	6.28		$	5.96		$	5.82
	Shares Outstanding (b)		6,714			6,666			6,663			6,663			6,648
Asset Quality
	ALLL / Total Loans		1.14	%		1.20	%		1.37	%		1.38	%		1.37	%
	Non-Performing Loans / Total Loans		0.28	%		0.34	%		0.38	%		0.42	%		0.45	%
	Non-Performing Assets / Total Assets		0.25	%		0.31	%		0.37	%		0.39	%		0.38	%
	(a) Ratios at Bank level (b) Shares outstanding presented in thousands

FAQ

What was ES Bancshares' net income for Q4 2022?

ES Bancshares reported a net income of $843 thousand for Q4 2022.

How did total assets change for ES Bancshares in Q4 2022?

Total assets increased to $588 million as of December 31, 2022.

What were the earnings per share for ES Bancshares in Q4 2022?

Earnings per share for Q4 2022 were $0.13.

What was the provision for loan losses recorded by ES Bancshares in Q4 2022?

ES Bancshares recorded a provision for loan losses of $100 thousand in Q4 2022.

How did non-interest income perform for ES Bancshares in Q4 2022?

Non-interest income increased to $357 thousand in Q4 2022.