GlobeNewswire Inc | Jan 27, 2021 03:03PM EST

January 27, 2021

NEW YORK, Jan. 27, 2021 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ:ESBK)

Highlights

-- Net income was $1,284,000 and $4,159,000 for the three and twelve months ended December 31, 2020 compared to $940,000 and $3,486,000 for the same periods in 2019. -- Diluted earnings per share were $.37 per share and $1.19 per share for the three and twelve months ended December 31, 2020 compared to $.27 per share and $1.00 per share for the same periods in 2019. -- Return on average assets was .78% and .64% for the three and twelve months ended December 31, 2020 compared to .61% and .57% for the three and twelve months ended December 31, 2019. -- Return on average equity was 8.40% and 6.94% for the three and twelve months ended December 31, 2020 compared to 6.33% and 5.93% for the same periods in 2019.

"We are pleased to report an increase in earnings year-to-year, while at the same time having increased our loan loss reserves largely in response to the economic uncertainty resulting from the ongoing pandemic, said Thomas M Carr, President and CEO. Carr continued, "We continue to be concerned about the economic impact in our region from the pandemic, but we are dedicated to continuing to provide the financial services needed in the communities we serve, balancing those efforts with prudent safety measures to minimize potential COVID health risks to our customers and staff.

Net Income

Net income totaled $4,159,000 for the twelve months ended December 31, 2020, an increase of $673,000 or 19% from the $3,486,000 of net income recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $2,486,000 and an increase in net interest income of $152,000, offset by an increase in the provision for loan losses of $706,000, an increase in noninterest expense of $855,000, and an increase in tax expense of $404,000.

Net income totaled $1,284,000 for the three months ended December 31, 2020, an increase of $344,000 or 37% from the $940,000 recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $1,148,000 and an increase in net interest income of $151,000, offset by an increase in noninterest expense of $599,000, an increase in the provision for loan losses of $175,000, and an increase in tax expense of $181,000.

The increase in noninterest income for both the three and twelve months ended December 31, 2020 is primarily due to increases in the gain on sale of loans, reflecting higher levels of residential mortgages originated for sale to the secondary markets compared to the same periods in 2019. The increase in noninterest expense for both the three and twelve months ended December 31, 2020 reflects higher levels of salaries and benefits and other expense. The higher levels of salaries and benefits and other expense for both the three and twelve months ended December 31, 2020 are in part related to higher levels of residential mortgage originations in 2020. For the twelve months ended December 31, 2020 the increase in other expense also includes the impact of a one-time FDIC small bank assessment credit of $143,000 recognized in 2019.

For both the three and twelve months ended December 31, 2020, the increases in the provision for loan losses reflect managements consideration of the uncertainty of ongoing economic conditions resulting from the COVID-19 pandemic and associated economic slowdown.

Basic and diluted earnings per share for the twelve months ended December 31, 2020 were both $1.19 per share compared to $1.00 per share for both for the same period in 2019. Basic and diluted earnings per share for the three months ended December 31, 2020 were both $.37 per share compared to $.27 per share for both for the same period in 2019.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2020 was 3.06% compared to 3.04% for the same period in 2019. The yield on average earning assets was 4.13% for the twelve months ended December 31, 2020 compared to 4.31% for the same period in 2019. The average cost of interest-bearing liabilities was 1.23% for the twelve months ended December 31, 2020 compared to 1.48% for the same period in 2019.

The net interest margin for the three months ended December 31, 2020 was 3.24% compared to 3.01% for the same period in 2019. The average yield on earning assets was 4.13% for the three months ended December 31, 2020 compared to 4.30% for the same period in 2019. The average cost of interest-bearing liabilities was 0.97% for the three months ended December 31, 2020 compared to 1.54% for the same period in 2019.

Assets

Total assets increased $37.8 million or 6.2% to $644.6 million at December 31, 2020 compared to $606.8 million at December 31, 2019. Loans, including loans held for sale, decreased 6% to $489.2 million at December 31, 2020 compared to December 31, 2019. The available-for-sale investment portfolio decreased $5.7 million from December 31, 2019 to December 31, 2020. Total cash and cash equivalents were $89.2 million at December 31, 2020, an increase of $77.2 million from December 31, 2019 when cash totaled $12.0 million. The $77.2 million increase in cash resulted primarily from a $31.0 million decrease in loans, including loans held for sale, and an increase of $34.8 million in deposits.

Nonperforming Loans

The nonperforming loans to total loans ratio was 1.07% at December 31, 2020 and 0.82% at December 31, 2019. Net loan charge-offs to average loans for the twelve months ended December 31, 2020 was 0.05% and was 0.11% for the twelve months ended December 31, 2019. The allowance for loan losses was 1.19% of total loans at December 31, 2020 and 0.88% of total loans at December 31, 2019.

Liabilities

Deposits totaled $547.0 million at December 31, 2020, an increase of $34.8 million or 6.8% from the December 31, 2019 total of $512.2 million. The $34.8 million increase in deposits consists of a $27.4 million increase in noninterest bearing accounts, a $12.2 million increase in savings accounts, a $12.2 million increase in interest bearing transaction accounts, and an $11.2 million increase in money market accounts, partially offset by a $28.2 million decrease in time deposits. Borrowed funds totaled $29.0 million as of December 31, 2020 and December 31, 2019.

Shareholders Equity

Shareholders equity increased $2,150,000 to $60.8 million at December 31, 2020 compared to December 31, 2019. The current level of shareholders equity equates to a book value per share of $17.23 at December 31, 2020, compared to $16.67 at December 31, 2019. Dividends paid for common shareholders were $0.15 and $0.68 for the three and twelve months ended December 31, 2020 and $0.23 and $0.92 for the three and twelve months ended December 31, 2019.

Elmira Savings Bank, with $644.6 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a state-chartered bank with five offices in Chemung County, NY; three offices 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 Banks regulatory reports.

ELMIRA SAVINGS BANKCONSOLIDATED BALANCE SHEET(unaudited) (in thousands, except for share and December 31, December 31, per share data) 2020 2019 % ChangeASSETS Cash and due from banks $ 89,099 $ 11,954 645.3 %Federal funds sold and other 88 92 -4.3 %short-term investmentsTotal cash and cash equivalents 89,187 12,046 640.4 % Securities available for sale, at 6,125 11,802 -48.1 %fair valueSecurities held to maturity - fair value $7,211at December 31, 2020 and $7,209 6,597 6,994 -5.7 %at December 31, 2019Federal Reserve and Federal Home Loan 9,054 9,944 -9.0 %Bank (FHLB) stock, at cost Loans held for sale 5,408 1,354 299.4 % Loans receivable 483,768 518,871 -6.8 %Less: Allowance for loan losses 5,755 4,576 25.8 %Net loans 478,013 514,295 -7.1 % Premises and equipment, net 15,876 16,210 -2.1 %Bank-owned life insurance 15,410 14,919 3.3 %Accrued interest receivable 1,564 1,625 -3.8 %Goodwill 12,320 12,320 0.0 %Other assets 5,033 5,320 -5.4 %Total assets $ 644,587 $ 606,829 6.2 % LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $ 547,021 $ 512,215 6.8 %Borrowings 29,000 29,000 0.0 %Other liabilities 7,805 7,003 11.5 %Total liabilities 583,826 548,218 6.5 % Shareholders' equity: Preferred stock, $1 par value; $1,000liquidation value per issued share; 5,000,000 shares authorized;10,000 shares issued and noneoutstanding at December 31, 2020 and 9,700 9,700 0.0 %at December 31, 2019Common stock, $1 par value; authorized 5,000,000shares; 3,616,770 shares issued and 3,522,887 oustandingat December 31, 2020 and3,606,089 shares issued and 3,512,206 3,617 3,606 0.3 %outstanding at December 31, 2019Additional paid-in capital 54,255 53,993 0.5 %Retained earnings 5,197 3,432 51.4 %Treasury stock, at cost - 93,883common shares and 10,000 preferred sharesat December 31, 2020 and December (12,202 ) (12,202 ) 0.0 %31, 2019Accumulated other comprehensive 144 32 350.0 %incomeTotal Elmira Savings Bank 60,711 58,561 3.7 %shareholders' equityNoncontrolling interest 50 50 0.0 %Total shareholders' equity 60,761 58,611 3.7 %Total liabilities and $ 644,587 $ 606,829 6.2 %shareholders' equity

ELMIRA SAVINGS BANKCONSOLIDATED STATEMENT OF INCOME(unaudited) Three Months Ended Twelve Months Ended December 31, December 31,(in thousands, except 2020 2019 % Change 2020 2019 % Changefor per share data) Interest and dividend income:Interest and fees $ 5,262 $ 5,642 -6.7 % $ 21,475 $ 21,857 -1.7 %on loansInterest anddividends on securitiesTaxable 155 218 -28.9 % 708 977 -27.5 %Non-taxable 71 96 -26.0 % 297 427 -30.4 %Totalinterest and dividend 5,488 5,956 -7.9 % 22,480 23,261 -3.4 %income Interest expense: Interest on 968 1,585 -38.9 % 5,018 5,992 -16.3 %depositsInterest on 210 212 -0.9 % 882 841 4.9 %borrowingsTotal 1,178 1,797 -34.4 % 5,900 6,833 -13.7 %interest expenseNet interest income 4,310 4,159 3.6 % 16,580 16,428 0.9 %Provision for loan 375 200 87.5 % 1,450 744 94.9 %lossesNet interest incomeafter provision for 3,935 3,959 -0.6 % 15,130 15,684 -3.5 %loan losses Noninterest income: Service fees 292 345 -15.4 % 1,163 1,399 -16.9 %Gain on sale of 1,820 662 174.9 % 4,577 1,790 155.7 %loans held for saleGain on sale of - - - - 90 - securitiesOther service 203 201 1.0 % 793 822 -3.5 %feesEarnings onbank-owned life 104 101 3.0 % 402 385 4.4 %insuranceOther 85 47 80.9 % 284 247 15.0 %Total 2,504 1,356 84.7 % 7,219 4,733 52.5 %noninterest income Noninterest expense: Salaries and 2,515 2,154 16.8 % 8,965 8,537 5.0 %benefitsNet occupancy 396 363 9.1 % 1,613 1,562 3.3 %Equipment 476 372 28.0 % 1,669 1,517 10.0 %Marketing and 168 272 -38.2 % 693 1,060 -34.6 %public relationsProfessional fees 195 213 -8.5 % 653 574 13.8 %Other 1,021 798 27.9 % 3,499 2,987 17.1 %Total 4,771 4,172 14.4 % 17,092 16,237 5.3 %noninterest expenseIncome before income 1,668 1,143 45.9 % 5,257 4,180 25.8 %taxesIncome taxes 379 198 91.4 % 1,093 689 58.6 %Net income 1,289 945 36.4 % 4,164 3,491 19.3 %Less: Net incomeattributable to 5 5 - 5 5 - noncontrollinginterest Net incomeattibutable to Elmira 1,284 940 36.6 % 4,159 3,486 19.3 %Savings Bank Dividend on preferred - - - - - - stockIncome available to $ 1,284 $ 940 36.6 % $ 4,159 $ 3,486 19.3 %common shareholders Basic earnings per $ 0.37 $ 0.27 37.0 % $ 1.19 $ 1.00 19.0 %share Diluted earnings per $ 0.37 $ 0.27 37.0 % $ 1.19 $ 1.00 19.0 %share Weighted averageshares outstanding - 3,511,688 3,498,955 0.4 % 3,507,910 3,495,089 0.4 %basic Weighted averageshares outstanding - 3,511,688 3,501,487 0.3 % 3,508,722 3,500,123 0.2 %diluted Dividends per share $ 0.15 $ 0.23 -34.8 % $ 0.68 $ 0.92 -26.1 %

ELMIRA SAVINGS BANK AVERAGE BALANCES AND INTEREST RATES (Dollars in For the Three Months Ended Thousands) December 31, 2020 December 31, 2019 ASSETS: Average Interest Average Average Interest Average Balance Rate Balance RateLoans $ 503,332 $ 5,262 4.15 % $ 518,297 $ 5,642 4.32 %Short-term 2,348 - 0.04 730 3 1.64 investmentsSecurities 22,177 226 4.04 30,290 311 4.09 Totalinterest-earning 527,857 5,488 4.13 549,317 5,956 4.30 assets Noninterest-earning 130,513 65,253 assets TOTAL ASSETS $ 658,370 $ 614,570 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest-bearing $ 437,689 $ 968 0.88 $ 434,491 $ 1,585 1.45 depositsBorrowings 43,831 210 1.87 29,000 212 2.85 Totalinterest-bearing 481,520 1,178 0.97 463,491 1,797 1.54 liabilities Noninterest-bearing 116,069 92,138 liabilitiesShareholders' 60,781 58,941 equity TOTAL LIABILITIESAND SHAREHOLDERS' $ 658,370 $ 614,570 EQUITYInterest rate 3.16 % 2.76 %spreadNet interest income $ 4,310 3.24 % $ 4,159 3.01 %/margin

ELMIRA SAVINGS BANK AVERAGE BALANCES AND INTEREST RATES (Dollars in For the Twelve Months Ended Thousands) December 31, 2020 December 31, 2019 ASSETS: Average Interest Average Average Interest Average Balance Rate Balance RateLoans $ 516,170 $ 21,475 4.14 % $ 500,066 $ 21,857 4.36 %Short-term 1,422 2 0.12 604 12 1.93 investmentsSecurities 24,490 1,003 4.09 37,183 1,392 3.74 Totalinterest-earning 542,082 22,480 4.13 537,853 23,261 4.31 assets Noninterest-earning 104,926 68,787 assets TOTAL ASSETS $ 647,008 $ 606,640 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest-bearing $ 434,495 $ 5,018 1.15 $ 430,831 $ 5,992 1.39 depositsBorrowings 43,964 882 1.97 29,186 841 2.84 Totalinterest-bearing 478,459 5,900 1.23 460,017 6,833 1.48 liabilities Noninterest-bearing 108,595 87,883 liabilitiesShareholders' 59,954 58,740 equity TOTAL LIABILITIESAND SHAREHOLDERS' $ 647,008 $ 606,640 EQUITYInterest rate 2.90 % 2.83 %spreadNet interest income $ 16,580 3.06 % $ 16,428 3.04 %/margin

Quarter Ended(Dollars in Thousands, 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019Except Per Share Data)Operating Data Net income $ 1,284 $ 948 $ 909 $ 1,018 $ 940 Net interest income 4,310 3,852 4,137 4,281 4,159 Provision for loan 375 450 575 50 200 losses Non-interest income 2,504 1,928 1,648 1,139 1,356 Non-interest expense 4,771 4,155 4,085 4,081 4,172 Performance Statistics Net interest margin 3.24 % 2.81 % 2.98 % 3.16 % 3.01 % Annualized return on 0.78 % 0.55 % 0.57 % 0.68 % 0.61 % average assets Annualized return on 8.40 % 6.27 % 6.12 % 6.93 % 6.33 % average equity Annualized net loan charge-offs to avg 0.03 % 0.04 % 0.09 % 0.05 % 0.14 % loans Net charge-offs 38 57 116 60 183 Efficiency ratio 70.0 % 71.9 % 70.6 % 75.3 % 75.6 %Per Share Data Basic earnings per $ 0.37 $ 0.27 $ 0.26 $ 0.29 $ 0.27 share Diluted earnings per 0.37 0.27 0.26 0.29 0.27 share Dividend declared per 0.15 0.15 0.15 0.23 0.23 share Book value 17.23 17.01 16.87 16.77 16.67 Common stock price: High 13.25 11.18 13.39 17.40 15.99 Low 10.44 10.30 10.49 11.50 13.97 Close 11.50 11.02 11.00 11.50 15.10 Weighted average common shares: Basic 3,512 3,509 3,507 3,503 3,499 Fully diluted 3,512 3,509 3,507 3,507 3,501 End-of-period common shares: Issued 3,617 3,617 3,617 3,611 3,606 Treasury 94 94 94 94 94 Financial Condition Data: General Total assets $ 644,587 $ 674,032 $ 675,862 $ 598,017 $ 606,829 Loans, net 478,013 504,946 518,698 506,076 514,295 Intangibles 12,320 12,320 12,320 12,320 12,320 Total deposits 547,021 551,350 551,225 501,760 512,215 Noninterest-bearing 109,346 107,423 109,985 83,431 81,934 Savings 82,573 79,492 79,150 72,174 70,358 NOW 100,293 98,464 91,166 83,323 88,126 Money Market 35,920 34,375 28,467 20,306 24,724 Time deposits 218,889 231,596 242,457 242,526 247,073 Total interest-bearing 437,675 443,927 441,240 418,329 430,281 deposits Shareholders' equity 60,761 59,960 59,496 59,044 58,611 Asset Quality Non-performing assets $ 5,304 $ 5,507 $ 5,578 $ 4,686 $ 4,723 Non-performing assets 0.82 % 0.82 % 0.83 % 0.78 % 0.78 % to total assets Allowance for loan 5,755 5,418 5,025 4,566 4,576 losses Allowance for loan 1.19 % 1.06 % 0.96 % 0.89 % 0.88 % losses to total loans Allowance for loan losses to non-performing 112.67 % 104.11 % 95.28 % 105.43 % 108.51 % loans Non-performing loans 1.07 % 1.03 % 1.02 % 0.86 % 0.82 % to total loansCapitalization Shareholders' equity 9.43 % 8.90 % 8.80 % 9.87 % 9.66 % to total assets

For further information contact:Thomas M. Carr, President & CEOElmira Savings Bank333 East Water StreetElmira, New York 14901(607) 735-8660tcarr@elmirasavingsbank.com