Elmira Savings Bank Reports First Quarter Earnings

ELMIRA, NY--(Marketwired - Apr 23, 2013) - Elmira Savings Bank (NASDAQ: ESBK)

Highlights

• Net income increased to $1,192,000 for the three months ended March 31, 2013 compared to $1,158,000 for the same period in 2012.
  
  
• Diluted earnings per share were $.32 per share for the three months ended March 31, 2013, the same as the same period in 2012.
  
  
• Return on average assets was .91% for the three months ended March 31, 2013 compared to .90% for the same period in 2012.
  
  
• Return on average equity was 7.26% for the three months ended March 31, 2013 compared to 7.12% for the same period in 2012.
  
  
• Noninterest income increased to $1,485,000 for the three months ended March 31, 2013 compared to $1,250,000 for the same period in 2012. This represents an increase of 19% for the three months ended March 31, 2013.
  
  

"We are pleased to have a strong start to 2013," said Michael P. Hosey, President and Chief Executive Officer. Hosey continued, "During the first quarter, our loan volume has remained strong and we expanded our geographic footprint with our expansion into Erwin, NY, in January." 

Net Income

Net income totaled $1,192,000 for the three months ended March 31, 2013, an increase of $34,000 or 3% from the $1,158,000 recorded for the same period in 2012. This modest increase was the result of an increase in noninterest income of $235,000 partially offset by an increase of $161,000 in noninterest expense.

Basic and diluted earnings per share for the three months ended March 31, 2013 were $.32 per share, the same as the first quarter of 2012.

Net Interest Margin

The net interest margin for the three months ended March 31, 2013 was 3.32% compared to 3.40% for the first quarter of 2012. The yield on average earning assets was 4.46% for the three months ended March 31, 2013 compared to 4.83% for the same period in 2012. The average cost of interest-bearing liabilities was 1.32% for the three months ended March 31, 2013 compared to 1.59% for the three months ended March 31, 2012.

Assets

Total assets decreased $26.0 million or 5% to $510.9 million at March 31, 2013 compared to $536.9 million at December 31, 2012. Loans receivable decreased 1% to $374.5 million at March 31, 2013 compared to December 31, 2012. The available-for-sale investment portfolio decreased $4.0 million from December 31, 2012 to March 31, 2013.

"At the end of the first quarter, the Bank redeemed $10.5 million of preferred stock. Despite the reduction in capital, the Bank continues to maintain strong capital ratios. The redemption will reduce our preferred dividends and help to increase our earnings per common shareholder in future periods," said Michael P. Hosey, President and CEO. Hosey continued, "The first quarter also evidenced depositors using excess funds to extinguish debt or reenter the equity markets."

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to .99% at March 31, 2013 from 1.02% at December 31, 2012. Net loan charge-offs to average loans for the three months ended March 31, 2013 of .21% increased from .01% for the twelve months ended December 31, 2012. The allowance for loan losses was .99% of total loans at March 31, 2013 and at December 31, 2012.

Liabilities

Deposits total $395.1 million at March 31, 2013, a decrease of $14.5 million or 3.5%.

Shareholders' Equity

Shareholders' equity decreased $10.2 million to $56.7 million at March 31, 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 $18.13 at March 31, 2013, compared to $18.50 at December 31, 2012. Dividends paid to common shareholders were $0.23 for the three months ended March 31, 2013 compared to $0.21 for the same period in 2012. 

Elmira Savings Bank, with $510.9 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; and a loan center in Cortland 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)			March 31,				December 31,
			2013				2012				% Change
ASSETS
Cash and due from banks			$	20,664			$	39,641			-47.9	%
Federal funds sold and other short-term investments				524				684			-23.4	%
	Total cash and cash equivalents			21,188				40,325			-47.5	%
Securities available for sale, at fair value				62,891				66,875			-6.0	%
Securities held to maturity - fair value $6,334 at March 31, 2013, and $5,853 at December 31, 2012				6,002				5,521			8.7	%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost				9,679				9,178			5.5	%
Loans held for sale				2,471				3,167			-22.0	%
Loans receivable				374,477				378,108			-1.0	%
Less: Allowance for loan losses				3,724				3,740			-0.4	%
	Net loans			370,753				374,368			-1.0	%
Premises and equipment, net				8,043				7,947			1.2	%
Bank-owned life insurance				12,078				11,988			0.8	%
Accrued interest receivable				1,575				1,529			3.0	%
Intangible assets, net				289				316			-8.5	%
Goodwill				12,320				12,320			0.0	%
Other real estate owned				137				125			9.6	%
Other assets				3,489				3,277			6.5	%
	Total assets		$	510,915			$	536,936			-4.8	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits			$	395,091			$	409,565			-3.5	%
Borrowings				54,000				54,000			0.0	%
Other liabilities				5,147				6,462			-20.3	%
	Total liabilities			454,238				470,027			-3.4	%
Shareholders' equity:
Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares authorized; 13,515 shares issued at March 31, 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; 2,509,865 shares issued at March 31, 2013 and 2,454,840 shares issued at December 31, 2012				2,510				2,455			2.2	%
Additional paid-in capital				41,470				41,448			0.1	%
Retained earnings				1,109				868			27.8	%
Treasury stock, at cost - 116,268 shares at March 31, 2013 and 125,865 shares at December 31, 2012				(3,327	)			(3,548	)		-6.2	%
Accumulated other comprehensive income				1,644				1,872			-12.2	%
	Total Elmira Savings Bank shareholders' equity			56,621				66,858			-15.3	%
Noncontrolling interest				56				51			9.8	%
	Total shareholders' equity			56,677				66,909			-15.3	%
	Total liabilities and shareholders' equity		$	510,915			$	536,936			-4.8	%

ELMIRA SAVINGS BANK
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
				Three Months Ended
				March 31,
(in thousands, except for per share data)				2013			2012			% Change
Interest and Dividend Income:
	Interest and fees on loans			$	4,473		$	4,574		-2.2	%
	Interest and dividends on securities
		Taxable			447			575		-22.3	%
		Non-taxable			185			200		-7.5	%
		Total interest and dividend income			5,105			5,349		-4.6	%
Interest Expense:
	Interest on deposits				829			947		-12.5	%
	Interest expense on borrowings				477			634		-24.8	%
		Total interest expense			1,306			1,581		-17.4	%
Net interest income					3,799			3,768		0.8	%
Provision for loan losses					180			125		44.0	%
Net interest income after provision for loan losses					3,619			3,643		-0.7	%
Noninterest Income:
	Service fees				316			322		-1.9	%
	Net gain on sale of loans				848			656		29.3	%
	Net gain on sale of securities				61			-
	Other service fees				154			164		-6.1	%
	Earnings on bank-owned life insurance				90			82		9.8	%
	Other				16			26		-38.5	%
		Total noninterest income			1,485			1,250		18.8	%
Noninterest Expense:
	Salaries and benefits				1,821			1,652		10.2	%
	Net occupancy				325			302		7.6	%
	Equipment				259			217		19.4	%
	Regulatory assessments				105			100		5.0	%
	Marketing and public relations				147			146		0.7	%
	Professional fees				169			184		-8.2	%
	Other				550			614		-10.4	%
		Total noninterest expense			3,376			3,215		5.0	%
Income before income taxes					1,728			1,678		3.0	%
Income taxes					536			520		3.1	%
Net income					1,192			1,158		2.9	%
Less: Net income attributable to noncontrolling interest					-			-
Net income attibutable to Elmira Savings Bank					1,192			1,158		2.9	%
Dividend on preferred stock					401			395		1.5	%
Income available to common shareholders				$	791		$	763		3.7	%
Basic earnings per share				$	0.34		$	0.34		0.0	%
Diluted earnings per share				$	0.32		$	0.32		0.0	%
Weighted average shares outstanding - basic					2,334,550			2,262,917		3.2	%
Weighted average shares outstanding - diluted					2,471,344			2,353,433		5.0	%
Dividends per share				$	0.23		$	0.21		9.5	%
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
		March 31, 2013									March 31, 2012
ASSETS:		Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans		$	376,910		$	4,473		4.77	%		$	347,897		$	4,574		5.26	%
Short-term investments			2,595			-		0.04				898			-		0.03
Securities			80,592			632		3.15				94,392			775		3.28
Total interest-earning assets			460,097			5,105		4.46				443,187			5,349		4.83
Noninterest-earning assets			70,022									75,746
TOTAL ASSETS		$	530,119								$	518,933
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits		$	343,753		$	829		0.98			$	328,886		$	947		1.17
Borrowings			54,000			477		3.53				68,584			634		3.66
Total interest-bearing liabilities			397,753			1,306		1.32				397,470			1,581		1.59
Noninterest-bearing liabilities			65,747									56,263
Shareholders' equity			66,619									65,200
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	530,119								$	518,933
Interest rate spread								3.14	%								3.24	%
Net interest income/margin					$	3,799		3.32	%					$	3,768		3.40	%

								Quarter Ended
(Dollars in Thousands, Except Per Share Data)				3/31/2013				12/31/2012				9/30/2012				6/30/2012				3/31/2012
Operating Data
	Net income			$	1,192			$	1,299			$	1,398			$	1,358			$ 1,158
	Net interest income				3,799				3,739				3,810				3,772			3,768
	Provision for loan losses				180				42				154				142			125
	Net security gains				61				-				-				75			-
	Non-interest income, ex. Net security gains				1,424				1,529				1,723				1,473			1,250
	Non-interest expense				3,376				3,301				3,271				3,157			3,215
Performance Statistics
	Net interest margin				3.32	%			3.25	%			3.32	%			3.37	%		3.40%
	Annualized return on average assets				0.91	%			0.97	%			1.04	%			1.04	%		0.90%
	Annualized return on average equity				7.26	%			7.72	%			8.39	%			8.33	%		7.12%
	Annualized net loan charge-offs to avg loans				0.21	%			0.03	%			-0.02	%			0.02	%		-0.01%
	Net charge-offs (recoveries)				196				31				(19	)			20			(10)
	Efficiency ratio				63.9	%			62.7	%			59.1	%			59.3	%		64.1%
Per Share Data
	Basic earnings per share			$	0.34			$	0.39			$	0.44			$	0.42			$ 0.33
	Diluted earnings per share				0.32				0.37				0.42				0.40			0.32
	Dividend declared per share				0.23				0.22				0.22				0.21			0.21
	Book value				18.13				18.50				18.52				18.22			18.06
	Common stock price:
		High			25.35				23.65				19.04				20.46			20.82
		Low			22.74				18.48				17.50				16.83			15.45
		Close			25.35				22.74				18.86				18.36			18.81
	Weighted average common shares:
		Basic			2,335				2,297				2,280				2,269			2,263
		Fully diluted			2,471				2,424				2,396				2,383			2,353
	End-of-period common shares:
		Issued			2,510				2,455				2,438				2,425			2,407
		Treasury			116				126				126				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			$	510,915			$	536,936			$	534,159			$	530,646			$ 519,618
	Loans, net				370,753				374,368				369,851				358,756			346,144
	Intangibles				12,609				12,636				12,667				12,699			12,732
	Total deposits				395,091				409,565				406,216				397,972			383,314
		Noninterest-bearing			58,118				61,444				58,760				55,269			50,113
		Savings			60,177				59,034				56,115				56,332			54,936
		NOW			71,472				76,133				73,079				73,431			70,068
		Money Market			19,222				20,131				23,082				19,272			18,890
		Time deposits			186,102				192,823				195,180				193,668			189,307
		Total interest-bearing deposits			336,973				348,121				347,456				342,703			333,201
	Shareholders' equity				56,677				66,609				66,543				65,621			64,944
Asset Quality
	Non-performing assets			$	3,826			$	3,986			$	3,980			$	3,829			$ 3,764
	Non-performing assets to total assets				0.75	%			0.74	%			0.75	%			0.72	%		0.72%
	Allowance for loan losses				3,724				3,740				3,729				3,556			3,434
	Allowance for loan losses to total loans				0.99	%			0.99	%			1.00	%			0.98	%		0.98%
	Allowance for loan losses to total loans non-performing loans				100.95	%			96.87	%			97.29	%			96.57	%		94.26%
	Non-performing loans to total loans				0.99	%			1.02	%			1.03	%			1.02	%		1.05%
Capitalization
	Shareholders' equity to total assets				11.09	%			12.41	%			12.46	%			12.37	%		12.50%