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Elmira Savings Bank Reports Third Quarter Earnings

ELMIRA, NY -- (Marketwired) -- 10/23/13 -- Elmira Savings Bank (NASDAQ: ESBK)

Highlights

  • Net income was $1,369,000 and $3,935,000 for the three and nine months ended September 30, 2013 compared to $1,398,000 and $3,914,000 for the same periods in 2012.

  • Diluted earnings per share were $.44 per share and $1.20 per share for the three and nine months ended September 30, 2013 compared to $.41 per share and $1.14 per share for the same periods in 2012. These represent increases of 7.3% and 5.3% for the three and nine months ended September 30, 2013 compared to the same periods in 2012.

  • Return on average assets was 1.05% and 1.01% for the three and nine months ended September 30, 2013 compared to 1.04% and .99% for the same periods in 2012.

  • Return on average equity was 9.55% and 8.75% for the three and nine months ended September 30, 2013 compared to 8.39% and 7.95% for the same periods in 2012.

"We are pleased to report strong operating results for the first nine months of 2013. Our redemption of $10.5 million of preferred stock at the end of first quarter of 2013, combined with increased earnings has resulted in an increase of earnings per share by 5% for the first nine months of 2013 compared to the same period in 2012," said Thomas M. Carr, President and COO.

Net Income

Net income totaled $3,935,000 for the nine months ended September 30, 2013, an increase of $21,000 or 1% from the $3,914,000 of net income recorded for the same period in 2012. This increase of $21,000 was the net result of a reduction in tax expense of $773,000 and a reduction in the provision for loan losses of $106,000, offset by a decline in net interest income of $69,000, a decrease in noninterest income of $143,000, and an increase in noninterest expense of $646,000.

Net income totaled $1,369,000 for the three months ended September 30, 2013, a decrease of $29,000 or 2% from the $1,398,000 recorded for the same period in 2012. This decrease was the net result of a reduction in tax expense of $313,000 and a reduction in the provision for loan losses of $104,000, offset by a decline in noninterest income and net interest income of $249,000 and $40,000, respectively, and an increase of $157,000 in noninterest expense.

Basic and diluted earnings per share for the nine months ended September 30, 2013 were $1.26 per share and $1.20 per share compared to $1.19 per share and $1.14 per share for the same period in 2012. Basic and diluted earnings per share for the three months ended September 30, 2013 were $.46 per share and $.44 per share compared to $.44 per share and $.41 per share for the same period in 2012.

Net Interest Margin

The net interest margin for the nine months ended September 30, 2013 was 3.26% compared to 3.37% for the same period in 2012. The yield on average earning assets was 4.39% for the nine months ended September 30, 2013 compared to 4.70% for the same period in 2012. The average cost of interest-bearing liabilities was 1.32% for the nine months ended September 30, 2013 compared to 1.50% for the same period in 2012.

The net interest margin for the three months ended September 30, 2013 was 3.23% compared to 3.32% for the same period in 2012. The average yield on earning assets was 4.34% for the three months ended September 30, 2013 compared to 4.56% for the same period in 2012. The average cost of interest-bearing liabilities was 1.31% for the three months ended September 30, 2013 compared to 1.41% for the same period in 2012.

Assets

Total assets decreased $17.2 million or 3% to $519.7 million at September 30, 2013 compared to $536.9 million at December 31, 2012. Loans receivable increased 2% to $385.1 million at September 30, 2013 compared to December 31, 2012. The available-for-sale investment portfolio decreased $7.6 million from December 31, 2012 to September 30, 2013.

"During the first nine months of 2013, our loan originations have remained strong. We are excited about expanding our mortgage origination operation into Broome County, New York, with the opening of our loan production office on the Vestal Parkway," said Thomas M. Carr, President and COO.

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to .86% at September 30, 2013 from 1.02% at December 31, 2012. Net loan charge-offs to average loans for the nine months ended September 30, 2013 remained low at 0.08%, consistent with the nine month period ended September 30, 2012 when net recoveries totaled $9,000. The allowance for loan losses was 0.99% of total loans at September 30, 2013 and December 31, 2012.

Liabilities

Deposits totaled $396.6 million at September 30, 2013, a decrease of $13.0 million or 3%. The $13.0 million decrease primarily consists of a $14.1 million decrease in time deposits and a $4.1 million decrease in NOW accounts, partially offset by a $2.3 million increase in money market accounts. Borrowed funds increased by $6.0 million or 11%.

Shareholders' Equity

Shareholders' equity decreased $9.6 million to $57.3 million at September 30, 2013 compared to December 31, 2012. The decrease in shareholders' equity is attributable to the Bank redeeming $10.5 million of preferred stock issued to the United States Treasury Department through the Small Business Lending Fund. The current level of shareholders' equity equates to a book value per share of $18.29 at September 30, 2013, compared to $18.50 at December 31, 2012. Dividends paid to common shareholders were $0.23 and $0.69 for the three and nine months ended September 30, 2013 compared to $0.22 and $0.64 for the same periods in 2012, representing increases of 4.5% for the three month period and 7.8% for the nine month period.

Elmira Savings Bank, with $519.7 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,
                                      -------------  ------------  --------
                                           2013          2012      % Change
                                      -------------  ------------  --------
ASSETS

Cash and due from banks               $      20,333  $     39,641     -48.7%
Federal funds sold and other short-
 term investments                               590           684     -13.7%
                                      -------------  ------------  --------
  Total cash and cash equivalents            20,923        40,325     -48.1%

Securities available for sale, at
 fair value                                  59,309        66,875     -11.3%
Securities held to maturity - fair
 value $7,775 at September 30, 2013,
 and $5,853 at December 31, 2012              7,601         5,521      37.7%
Federal Reserve and Federal Home Loan
 Bank (FHLB) stock, at cost                  10,280         9,178      12.0%

Loans held for sale                           2,682         3,167     -15.3%

Loans receivable                            385,117       378,108       1.9%
Less: Allowance for loan losses               3,819         3,740       2.1%
                                      -------------  ------------  --------
  Net loans                                 381,298       374,368       1.9%

Premises and equipment, net                   8,311         7,947       4.6%
Bank-owned life insurance                    12,295        11,988       2.6%
Accrued interest receivable                   1,552         1,529       1.5%
Intangible assets, net                          235           316     -25.6%
Goodwill                                     12,320        12,320       0.0%
Other assets                                  2,941         3,402     -13.6%
                                      -------------  ------------  --------
  Total assets                        $     519,747  $    536,936      -3.2%
                                      =============  ============  ========

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                              $     396,600  $    409,565      -3.2%
Borrowings                                   60,000        54,000      11.1%
Other liabilities                             5,857         6,462      -9.4%
                                      -------------  ------------  --------
  Total liabilities                         462,457       470,027      -1.6%
                                      -------------  ------------  --------

Shareholders' equity:
Preferred stock, $1,000 liquidation
 value per issued share; 5,000,000
 shares authorized; 13,515 shares
 issued at September 30, 2013 and at
 24,063 shares issued at December 31,
 2012                                        13,215        23,763     -44.4%
Common stock, $1 par value;
 authorized 5,000,000 shares;
 2,522,872 shares issued at September
 30, 2013 and 2,454,840 shares issued
 at December 31, 2012                         2,523         2,455       2.8%
Additional paid-in capital                   41,709        41,448       0.6%
Retained earnings                             2,208           868     154.4%
Treasury stock, at cost - 116,268
 shares at September 30, 2013 and
 125,865 shares at December 31, 2012         (3,327)       (3,548)     -6.2%
Accumulated other comprehensive
 income                                         906         1,872     -51.6%
                                      -------------  ------------  --------
  Total Elmira Savings Bank
   shareholders' equity                      57,234        66,858     -14.4%
Noncontrolling interest                          56            51       9.8%
                                      -------------  ------------  --------
  Total shareholders' equity                 57,290        66,909     -14.4%
                                      -------------  ------------  --------
  Total liabilities and shareholders'
   equity                             $     519,747  $    536,936      -3.2%
                                      =============  ============  ========



                            ELMIRA SAVINGS BANK
                      CONSOLIDATED STATEMENT OF INCOME
                                (unaudited)

                      Three Months Ended             Nine Months Ended
                         September 30,                 September 30,
(in thousands,   ----------------------------  ----------------------------
 except for per                           %                             %
 share data)        2013       2012    Change     2013       2012    Change
                 ---------- ---------- ------  ---------- ---------- ------

Interest and
 Dividend
 Income:
  Interest and
   fees on loans $    4,461 $    4,551   -2.0% $   13,324 $   13,645   -2.4%
  Interest and
   dividends on
   securities
    Taxable             419        507  -17.4%      1,290      1,635  -21.1%
    Non-taxable         196        179    9.5%        572        576   -0.7%
                 ---------- ---------- ------  ---------- ---------- ------
    Total
     interest
     and
     dividend
     income           5,076      5,237   -3.1%     15,186     15,856   -4.2%
                 ---------- ---------- ------  ---------- ---------- ------

Interest
 Expense:
  Interest on
   deposits             805        938  -14.2%      2,443      2,809  -13.0%
  Interest
   expense on
   borrowings           501        489    2.5%      1,462      1,697  -13.8%
                 ---------- ---------- ------  ---------- ---------- ------
    Total
     interest
     expense          1,306      1,427   -8.5%      3,905      4,506  -13.3%
                 ---------- ---------- ------  ---------- ---------- ------
Net interest
 income               3,770      3,810   -1.0%     11,281     11,350   -0.6%
Provision for
 loan losses             50        154  -67.5%        315        421  -25.2%
                 ---------- ---------- ------  ---------- ---------- ------
Net interest
 income after
 provision for
 loan losses          3,720      3,656    1.8%     10,966     10,929    0.3%
                 ---------- ---------- ------  ---------- ---------- ------

Noninterest
 Income:
  Service fees          353        307   15.0%        998        945    5.6%
  Net gain on
   sale of loans        817      1,072  -23.8%      2,471      2,608   -5.3%
  Gain on sale
   of securities          -          -      -          61         75  -18.7%
  Other service
   fees                 160        195  -17.9%        486        512   -5.1%
  Earnings on
   bank-owned
   life
   insurance            126        125    0.8%        307        293    4.8%
  Other                  18         24  -25.0%         55         88  -37.5%
                 ---------- ---------- ------  ---------- ---------- ------
    Total
     noninterest
     income           1,474      1,723  -14.5%      4,378      4,521   -3.2%
                 ---------- ---------- ------  ---------- ---------- ------

Noninterest
 Expense:
  Salaries and
   benefits           1,837      1,643   11.8%      5,444      4,967    9.6%
  Net occupancy         296        270    9.6%        939        856    9.7%
  Equipment             255        243    4.9%        767        689   11.3%
  Marketing and
   public
   relations            182        249  -26.9%        533        545   -2.2%
  Professional
   fees                 168        144   16.7%        544        496    9.7%
  Other                 690        722   -4.4%      2,062      2,090   -1.3%
                 ---------- ---------- ------  ---------- ---------- ------
    Total
     noninterest
     expense          3,428      3,271    4.8%     10,289      9,643    6.7%
                 ---------- ---------- ------  ---------- ---------- ------
Income before
 income taxes         1,766      2,108  -16.2%      5,055      5,807  -12.9%
Income taxes            397        710  -44.1%      1,120      1,893  -40.8%
                 ---------- ---------- ------  ---------- ---------- ------
Net income            1,369      1,398   -2.1%      3,935      3,914    0.5%
Less: Net income
 attributable to
 noncontrolling
 interest                 -          -      -           -          -      -
                 ---------- ---------- ------  ---------- ---------- ------

Net income
 attibutable to
 Elmira Savings
 Bank                 1,369      1,398   -2.1%      3,935      3,914    0.5%

Dividend on
 preferred stock        268        405  -33.8%        938      1,203  -22.0%
                 ---------- ---------- ------  ---------- ---------- ------
Income available
 to common
 shareholders    $    1,101 $      993   10.9% $    2,997 $    2,711   10.5%
                 ========== ========== ======  ========== ========== ======


Basic earnings
 per share       $     0.46 $     0.44    4.5% $     1.26 $     1.19    5.9%
                 ========== ========== ======  ========== ========== ======

Diluted earnings
 per share       $     0.44 $     0.41    7.3% $     1.20 $     1.14    5.3%
                 ========== ========== ======  ========== ========== ======

Weighted average
 shares
 outstanding -
 basic            2,387,156  2,279,794    4.7%  2,369,962  2,269,547    4.4%
                 ========== ========== ======  ========== ========== ======

Weighted average
 shares
 outstanding -
 diluted          2,494,943  2,395,579    4.1%  2,488,271  2,371,702    4.9%
                 ========== ========== ======  ========== ========== ======

Dividends per
 share           $     0.23 $     0.22    4.5% $     0.69 $     0.64    7.8%
                 ========== ========== ======  ========== ========== ======

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
                       ----------------------------------------------------
                           September 30, 2013         September 30, 2012
                       -------------------------  -------------------------
                        Average          Average   Average          Average
ASSETS:                 Balance Interest   Rate    Balance Interest   Rate
                       -------- -------- -------  -------- -------- -------
Loans                  $386,316 $  4,461    4.59% $371,475 $  4,551    4.88%
Short-term investments    2,179        -    0.04     1,610        -    0.07
Securities               76,809      615    3.20    84,322      686    3.25
                       -------- -------- -------  -------- -------- -------
Total interest-earning
 assets                 465,304    5,076    4.34   457,407    5,237    4.56
                       -------- -------- -------  -------- -------- -------

Noninterest-earning
 assets                  53,038                     73,740
                       --------                   --------

TOTAL ASSETS           $518,342                   $531,147
                       ========                   ========

LIABILITIES AND
 SHAREHOLDERS' EQUITY
Interest-bearing
 deposits              $336,967 $    805    0.95  $347,397 $    938    1.07
Borrowings               56,565      501    3.47    54,217      489    3.53
                       -------- -------- -------  -------- -------- -------
Total interest-bearing
 liabilities            393,532    1,306    1.31   401,614    1,427    1.41
                       -------- -------- -------  -------- -------- -------

Noninterest-bearing
 liabilities             67,929                     63,444
Shareholders' equity     56,881                     66,089
                       --------                   --------

TOTAL LIABILITIES AND
 SHAREHOLDERS' EQUITY  $518,342                   $531,147
                       ========                   ========
Interest rate spread                        3.03%                      3.15%
                                         =======                    =======
Net interest
 income/margin                  $  3,770    3.23%          $  3,810    3.32%
                                ======== =======           ======== =======



                            ELMIRA SAVINGS BANK
                    AVERAGE BALANCES AND INTEREST RATES

(Dollars in Thousands)               For the Nine Months Ended
                       ----------------------------------------------------
                           September 30, 2013         September 30, 2012
                       -------------------------  -------------------------
                        Average          Average   Average          Average
ASSETS:                 Balance Interest   Rate    Balance Interest   Rate
                       -------- -------- -------  -------- -------- -------
Loans                  $380,661 $ 13,324    4.67% $358,605 $ 13,645    5.07%
Short-term investments    2,216        1    0.04     1,270        -    0.08
Securities               78,616    1,861    3.16    89,748    2,211    3.29
                       -------- -------- -------  -------- -------- -------
Total interest-earning
 assets                 461,493   15,186    4.39   449,623   15,856    4.70
                       -------- -------- -------  -------- -------- -------

Noninterest-earning
 assets                  58,878                     74,606
                       --------                   --------

TOTAL ASSETS           $520,371                   $524,229
                       ========                   ========

LIABILITIES AND
 SHAREHOLDERS' EQUITY
Interest-bearing
 deposits              $338,940 $  2,443    0.96  $338,096 $  2,809    1.11
Borrowings               55,063    1,462    3.50    61,511    1,697    3.62
                       -------- -------- -------  -------- -------- -------
Total interest-bearing
 liabilities            394,003    3,905    1.32   399,607    4,506    1.50
                       -------- -------- -------  -------- -------- -------

Noninterest-bearing
 liabilities             66,238                     59,066
Shareholders' equity     60,130                     65,556
                       --------                   --------

TOTAL LIABILITIES AND
 SHAREHOLDERS' EQUITY  $520,371                   $524,229
                       ========                   ========
Interest rate spread                        3.07%                      3.20%
                                         =======                    =======
Net interest
 income/margin                  $ 11,281    3.26%          $ 11,350    3.37%
                                ======== =======           ======== =======



(Dollars in                               Quarter Ended
 Thousands, Except
 Per Share Data)     9/30/2013  6/30/2013  3/31/2013  12/31/2012  9/30/2012
                     ---------  ---------  ---------  ----------  ---------
Operating Data
  Net income         $   1,369      1,374  $   1,192  $    1,299  $   1,398
  Net interest
   income                3,770      3,712      3,799       3,739      3,810
  Provision for loan
   losses                   50         85        180          42        154
  Net security gains         -          -         61           -          -
  Non-interest
   income, ex. Net
   security gains        1,474      1,419      1,424       1,529      1,723
  Non-interest
   expense               3,428      3,485      3,376       3,301      3,271
Performance
 Statistics
  Net interest
   margin                 3.23%      3.24%      3.32%       3.25%      3.32%
  Annualized return
   on average assets      1.05%      1.07%      0.91%       0.97%      1.04%
  Annualized return
   on average equity      9.55%      9.67%      7.26%       7.72%      8.39%
  Annualized net
   loan charge-offs
   to avg loans           0.04%      0.00%      0.21%       0.03%     -0.02%
  Net charge-offs
   (recoveries)             40          -        196          31        (19)
  Efficiency ratio        65.4%      67.9%      63.9%       62.7%      59.1%
Per Share Data
  Basic earnings per
   share             $    0.46       0.46  $    0.34  $     0.39  $    0.44
  Diluted earnings
   per share              0.44       0.44       0.32        0.37       0.42
  Dividend declared
   per share              0.23       0.23       0.23        0.22       0.22
  Book value             18.29      18.10      18.13       18.50      18.52
  Common stock
   price:
    High                 25.00      26.32      25.35       23.65      19.04
    Low                  21.23      20.00      22.74       18.48      17.50
    Close                24.28      21.55      25.35       22.74      18.86
  Weighted average
   common shares:
    Basic                2,387      2,382      2,335       2,297      2,280
    Fully diluted        2,495      2,492      2,471       2,424      2,396
  End-of-period
   common shares:
    Issued               2,523      2,519      2,510       2,455      2,438
    Treasury               116        116        116         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       $ 519,747    516,137  $ 510,915  $  536,936  $ 534,159
  Loans, net           381,298    380,252    370,753     374,368    369,851
  Intangibles           12,555     12,582     12,609      12,636     12,667
  Total deposits       396,600    396,993    395,091     409,565    406,216
    Noninterest-
     bearing            62,616     61,018     58,118      61,444     58,760
    Savings             60,710     61,918     60,177      59,034     56,115
    NOW                 72,076     71,894     71,472      76,133     73,079
    Money Market        22,465     20,826     19,222      20,131     23,082
    Time deposits      178,733    181,337    186,102     192,823    195,180
    Total interest-
     bearing
     deposits          333,984    335,975    336,973     348,121    347,456
  Shareholders'
   equity               57,290     56,745     56,677      66,609     66,543
Asset Quality
  Non-performing
   assets            $   3,302      3,575  $   3,826  $    3,986  $   3,980
  Non-performing
   assets to total
   assets                 0.64%      0.69%      0.75%       0.74%      0.75%
  Allowance for loan
   losses                3,819      3,809      3,724       3,740      3,729
  Allowance for loan
   losses to total
   loans                  0.99%      0.99%      0.99%       0.99%      1.00%
  Allowance for loan
   losses to non-
   performing loans     115.66%    106.55%    100.95%      96.87%     97.29%
  Non-performing
   loans to total
   loans                  0.86%      0.93%      0.99%       1.02%      1.03%
Capitalization
  Shareholders'
   equity to total
   assets                11.02%     10.99%     11.09%      12.41%     12.46%

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For further information contact:
Thomas M. Carr
President & COO
Elmira Savings Bank
333 East Water Street
Elmira, New York 14901
(607) 735-8660
Email Contact

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