Elmira Savings Bank Reports 2016 Earnings

NEW YORK, NY--(Marketwired - Jan 25, 2017) - Elmira Savings Bank (NASDAQ: ESBK)

Highlights

• Net income was $1,042,000 and $4,337,000 for the three and twelve months ended December 31, 2016 compared to $1,036,000 and $4,122,000 for the same periods in 2015.
  
  
• Diluted earnings per share were $.30 per share and $1.25 per share for the three and twelve months ended December 31, 2016 compared to $.30 per share and $1.17 per share for the same periods in 2015.
  
  
• Return on average assets (annualized) was .73% and .76% for the three and twelve months ended December 31, 2016 compared to .73% for both of the same periods in 2015.
  
  
• Return on average equity (annualized) was 7.38% and 7.77% for the three and twelve months ended December 31, 2016 compared to 7.46% and 7.43% for the same periods in 2015.
  
  

Net Income

Net income totaled $1,042,000 for the three months ended December 31, 2016, an increase of $6,000 or 0.6% from the $1,036,000 recorded for the same period in 2015. This increase was the net result of a decrease in the provision for loan losses of $95,000, an increase in net interest income of $27,000, and an increase in noninterest income of $13,000, offset by an increase in noninterest expense of $111,000 and an increase in income tax expense of $18,000.

Net income totaled $4,337,000 for the twelve months ended December 31, 2016, an increase of $215,000 or 5.2% from the $4,122,000 of net income recorded for the same period in 2015. This increase was the net result of an increase in net interest income of $886,000, an increase in noninterest income of $509,000, and a decrease in the provision for loan losses of $143,000, offset by an increase in noninterest expense of $1.0 million and an increase in income tax expense of $314,000.

"The company has continued to make progress in 2016. Year over year, we have increased our noninterest income by 9%, our net interest income by 6%, and have expanded our net interest margin by 5%" said Thomas M. Carr, President and CEO. Carr continued, "We are pleased with the increase in core earnings supported by strong mortgage loan origination volume and a 7% growth in deposits."

Basic and diluted earnings per share for the twelve months ended December 31, 2016 were $1.26 per share and $1.25 per share compared to $1.19 per share and $1.17 per share for the same period in 2015. Both basic and diluted earnings per share for the three months ended December 31, 2016 were $.30 per share and $.30 per share for both basic and diluted earnings per share for the same period in 2015.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2016 was 3.21% compared to 3.07% for the same period in 2015. The yield on average earning assets was 4.05% for the twelve months ended December 31, 2016 compared to 4.06% for the same period in 2015. The average cost of interest-bearing liabilities was 1.00% for the twelve months ended December 31, 2016 compared to 1.16% for the same period in 2015.

The net interest margin for the three months ended December 31, 2016 was 3.23% compared to 3.19% for the same period in 2015. The average yield on earning assets was 4.04% for the three months ended December 31, 2016 compared to 4.09% for the same period in 2015. The average cost of interest-bearing liabilities was 0.95% for the three months ended December 31, 2016 compared to 1.07% for the same period in 2015.

Assets

Total assets increased $12.1 million or 2.2% to $573.5 million at December 31, 2016 compared to $561.3 million at December 31, 2015. Loans receivable increased 1.0% to $455.9 million at December 31, 2016 compared to December 31, 2015. The available-for-sale investment portfolio decreased $10.1 million from December 31, 2015 to December 31, 2016.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 1.11% at December 31, 2016 compared to 1.05% at December 31, 2015. Net loan charge-offs to average loans for the twelve months ended December 31, 2016 of 0.08% decreased from 0.11% for the twelve months ended December 31, 2015. The allowance for loan losses was 0.94% of total loans at December 31, 2016 and 0.92% of total loans at December 31, 2015.

Liabilities

Deposits total $469.5 million at December 31, 2016, an increase of $29.1 million or 6.6%. The $29.1 million increase consists of a $17.8 million increase in time deposits, a $5.5 million increase in money market accounts, a $3.7 million increase in savings accounts, and a $3.4 million increase in noninterest-bearing accounts, offset by a $1.3 million decrease in interest-bearing transaction accounts. Borrowed funds decreased by $17.5 million or 29.4%.

Shareholders' Equity

Shareholders' equity increased $1.0 million to $55.7 million at December 31, 2016 compared to December 31, 2015. The current level of shareholders' equity equates to a book value per share of $16.74 at December 31, 2016, compared to $16.53 at December 31, 2015. Dividends paid to common shareholders were $0.23 and $0.92 for the three and twelve months ended both December 31, 2016 and 2015.

Elmira Savings Bank, with $573.5 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 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,
			2016				2015				% Change
ASSETS
Cash and due from banks			$	24,195			$	5,352			352.1	%
Federal funds sold and other short-term investments				99				102			-2.9	%
	Total cash and cash equivalents			24,294				5,454			345.4	%
Securities available for sale, at fair value				32,581				42,709			-23.7	%
Securities held to maturity - fair value $8,679 at December 31, 2016 and $9,010 at December 31, 2015				8,519				9,003			-5.4	%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost				9,811				11,108			-11.7	%
Loans held for sale				3,597				3,630			-0.9	%
Loans receivable				455,931				451,368			1.0	%
Less: Allowance for loan losses				4,263				4,148			2.8	%
	Net loans			451,668				447,220			1.0	%
Premises and equipment, net				12,634				12,130			4.2	%
Bank-owned life insurance				13,592				13,188			3.1	%
Accrued interest receivable				1,552				1,541			0.7	%
Intangible assets, net				20				61			-67.2	%
Goodwill				12,320				12,320			0.0	%
Other assets				2,862				2,980			-4.0	%
	Total assets		$	573,450			$	561,344			2.2	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits			$	469,547			$	440,472			6.6	%
Borrowings				42,000				59,525			-29.4	%
Other liabilities				6,180				6,576			-6.0	%
	Total liabilities			517,727				506,573			2.2	%
Shareholders' equity:
Preferred stock, $1,000 liquidation value per issued share; 5,000,000 shares authorized; 10,000 shares issued at December 31, 2016 and at December 31, 2015				9,700				9,700			0.0	%
Common stock, $1 par value; authorized 5,000,000 shares; 2,844,670 shares issued at December 31, 2016 and 2,820,745 shares issued at December 31, 2015				2,845				2,821			0.9	%
Additional paid-in capital				41,644				41,243			1.0	%
Retained earnings				4,407				3,488			26.3	%
Treasury stock, at cost - 98,118 shares at December 31, 2016 and December 31, 2015				(2,907	)			(2,907	)		0.0	%
Accumulated other comprehensive income				(19	)			373			-105.1	%
	Total Elmira Savings Bank shareholders' equity			55,670				54,718			1.7	%
Noncontrolling interest				53				53			0.0	%
	Total shareholders' equity			55,723				54,771			1.7	%
	Total liabilities and shareholders' equity		$	573,450			$	561,344			2.2	%

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)				2016				2015			% Change			2016			2015			% Change
Interest and dividend income:
	Interest and fees on loans			$	4,751			$	4,762		-0.2	%		$	19,056		$	18,418		3.5	%
	Interest and dividends on securities
		Taxable			242				304		-20.4	%			1,000			1,367		-26.8	%
		Non-taxable			205				240		-14.6	%			832			949		-12.3	%
		Total interest and dividend income			5,198				5,306		-2.0	%			20,888			20,734		0.7	%
Interest expense:
	Interest on deposits				773				762		1.4	%			3,055			3,016		1.3	%
	Interest on borrowings				270				416		-35.1	%			1,313			2,084		-37.0	%
		Total interest expense			1,043				1,178		-11.5	%			4,368			5,100		-14.4	%
Net interest income					4,155				4,128		0.7	%			16,520			15,634		5.7	%
Provision for loan losses					175				270		-35.2	%			487			630		-22.7	%
Net interest income after provision for loan losses					3,980				3,858		3.2	%			16,033			15,004		6.9	%
Noninterest income:
	Service fees				331				372		-11.0	%			1,420			1,471		-3.5	%
	Gain on sale of loans held for sale				771				701		10.0	%			3,061			2,382		28.5	%
	Gain on sale of securities				-				-		-				180			284		-36.6	%
	Other service fees				172				184		-6.5	%			728			716		1.7	%
	Earnings on bank-owned life insurance				99				100		-1.0	%			403			398		1.3	%
	Other				22				25		-12.0	%			108			140		-22.9	%
		Total noninterest income			1,395				1,382		0.9	%			5,900			5,391		9.4	%
Noninterest expense:
	Salaries and benefits				1,944				1,917		1.4	%			7,927			7,324		8.2	%
	Net occupancy				341				337		1.2	%			1,416			1,383		2.4	%
	Equipment				314				281		11.7	%			1,200			1,061		13.1	%
	Marketing and public relations				215				197		9.1	%			794			832		-4.6	%
	Professional fees				(5	)			145		-103.4	%			517			773		-33.1	%
	Other				1,079				900		19.9	%			3,748			3,220		16.4	%
		Total noninterest expense			3,888				3,777		2.9	%			15,602			14,593		6.9	%
Income before income taxes					1,487				1,463		1.6	%			6,331			5,802		9.1	%
Income taxes					440				422		4.3	%			1,989			1,675		18.7	%
Net income					1,047				1,041		0.6	%			4,342			4,127		5.2	%
Less: Net income attributable to noncontrolling interest					5				5		0.0	%			5			5		0.0	%
Net income attibutable to Elmira Savings Bank					1,042				1,036		0.6	%			4,337			4,122		5.2	%
Dividend on preferred stock					225				225		0.0	%			900			900		0.0	%
Income available to common shareholders				$	817			$	811		0.7	%		$	3,437		$	3,222		6.7	%
Basic earnings per share				$	0.30			$	0.30		0.0	%		$	1.26		$	1.19		5.9	%
Diluted earnings per share				$	0.30			$	0.30		0.0	%		$	1.25		$	1.17		6.8	%
Weighted average shares outstanding - basic					2,731,266				2,712,052		0.7	%			2,772,243			2,707,491		2.4	%
Weighted average shares outstanding - diluted					2,749,828				2,731,078		0.7	%			2,739,668			2,762,332		-0.8	%
Dividends per share				$	0.23			$	0.23		0.0	%		$	0.92		$	0.92		0.0	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)		For the Three Months Ended
		December 31, 2016									December 31, 2015
ASSETS:		Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans		$	458,772		$	4,751		4.12	%		$	447,731		$	4,762		4.23	%
Short-term investments			789			-		0.17				177			-		0.10
Securities			52,464			447		3.39				67,996			544		3.19
Total interest-earning assets			512,025			5,198		4.04				515,904			5,306		4.09
Noninterest-earning assets			58,067									47,119
TOTAL ASSETS		$	570,092								$	563,023
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits		$	394,401		$	773		0.78			$	369,180		$	762		0.82
Borrowings			42,000			270		2.51				64,134			416		2.54
Total interest-bearing liabilities			436,401			1,043		0.95				433,314			1,178		1.07
Noninterest-bearing liabilities			77,531									74,581
Shareholders' equity			56,160									55,128
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	570,092								$	563,023
Interest rate spread								3.09	%								3.02	%
Net interest income/margin					$	4,155		3.23	%					$	4,128		3.19	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)		For the Twelve Months Ended
		December 31, 2016									December 31, 2015
ASSETS:		Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Loans		$	458,840		$	19,056		4.14	%		$	433,397		$	18,418		4.24	%
Short-term investments			586			1		0.18				847			-		0.03
Securities			54,449			1,831		3.36				75,228			2,316		3.08
Total interest-earning assets			513,875			20,888		4.05				509,472			20,734		4.06
Noninterest-earning assets			53,301									54,990
TOTAL ASSETS		$	567,176								$	564,462
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits		$	386,818		$	3,055		0.79			$	365,142		$	3,016		0.83
Borrowings			48,788			1,313		2.65				70,773			2,084		2.90
Total interest-bearing liabilities			435,606			4,368		1.00				435,915			5,100		1.16
Noninterest-bearing liabilities			75,782									73,103
Shareholders' equity			55,788									55,444
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	567,176								$	564,462
Interest rate spread								3.05	%								2.90	%
Net interest income/margin					$	16,520		3.21	%					$	15,634		3.07	%

			Quarter Ended
(Dollars in Thousands, Except Per Share Data)			12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Operating Data
	Net income		$	1,042		$	1,202		$	1,057		$	1,036		$	1,036
	Net interest income			4,155			4,211			4,054			4,100			4,128
	Provision for loan losses			175			87			85			140			270
	Net security gains			-			-			-			180			-
	Non-interest income, ex. Net security gains			1,395			1,716			1,438			1,171			1,382
	Non-interest expense			3,888			3,976			3,891			3,847			3,777
Performance Statistics
	Net interest margin			3.23	%		3.24	%		3.17	%		3.19	%		3.19	%
	Annualized return on average assets			0.73	%		0.84	%		0.75	%		0.74	%		0.73	%
	Annualized return on average equity			7.38	%		8.54	%		7.65	%		7.52	%		7.46	%
	Annualized net loan charge-offs to avg loans			0.20	%		0.05	%		0.01	%		0.07	%		0.18	%
	Net charge-offs (recoveries)			231			53			14			74			204
	Efficiency ratio			70.1	%		67.1	%		70.8	%		70.6	%		68.5	%
Per Share Data
	Basic earnings per share		$	0.30		$	0.36		$	0.31		$	0.30		$	0.30
	Diluted earnings per share			0.30			0.36			0.30			0.30			0.30
	Dividend declared per share			0.23			0.23			0.23			0.23			0.23
	Book value			16.74			16.80			16.69			16.59			16.53
	Common stock price:
		High		22.25			21.50			20.10			20.55			21.13
		Low		18.50			18.85			18.06			16.83			18.41
		Close		20.45			19.91			19.66			18.01			19.88
	Weighted average common shares:
		Basic		2,731			2,724			2,718			2,716			2,712
		Fully diluted		2,750			2,741			2,735			2,733			2,731
	End-of-period common shares:
		Issued		2,845			2,839			2,832			2,828			2,821
		Treasury		98			98			98			98			98
Financial Condition Data:
General
	Total assets		$	573,450		$	567,450		$	574,721		$	560,020		$	561,344
	Loans, net			451,668			455,251			463,104			452,718			447,220
	Intangibles			12,340			12,349			12,360			12,371			12,381
	Total deposits			469,547			463,414			470,462			443,552			440,472
		Noninterest-bearing		70,330			72,102			70,803			65,165			66,964
		Savings		70,621			69,019			69,159			67,295			66,914
		NOW		85,822			86,787			121,875			105,094			87,083
		Money Market		28,889			25,715			25,172			25,281			23,382
		Time deposits		213,885			209,791			183,453			180,717			196,129
		Total interest-bearing deposits		399,217			391,312			399,659			378,387			373,508
	Shareholders' equity			55,723			55,792			55,382			55,039			54,771
Asset Quality
	Non-performing assets		$	5,289		$	5,345		$	5,622		$	5,328		$	4,943
	Non-performing assets to total assets			0.92	%		0.94	%		0.98	%		0.95	%		0.88	%
	Allowance for loan losses			4,263			4,319			4,285			4,214			4,148
	Allowance for loan losses to total loans			0.94	%		0.94	%		0.92	%		0.92	%		0.92	%
	Allowance for loan losses to non-performing loans			84.80	%		85.00	%		80.41	%		83.69	%		87.66	%
	Non-performing loans to total loans			1.11	%		1.12	%		1.15	%		1.10	%		1.05	%
Capitalization
	Shareholders' equity to total assets			9.72	%		9.83	%		9.64	%		9.83	%		9.76	%