GlobeNewswire Inc | Jan 26, 2022 12:07PM EST

January 26, 2022

ELMIRA, N.Y., Jan. 26, 2022 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ:ESBK)

Highlights

-- Net income was $1,102,000 and $5,219,000 for the three and twelve months ended December 31, 2021 compared to $1,284,000 and $4,159,000 for the same periods in 2020. -- Diluted earnings per share were $.31 per share and $1.48 per share for the three and twelve months ended December 31, 2021 compared to $.37 per share and $1.19 per share for the same periods in 2020. -- Return on average assets was .69% and .81% for the three and twelve months ended December 31, 2021 compared to .78% and .64% for the three and twelve months ended December 31, 2020. -- Return on average equity was 6.82% and 8.31% for the three and twelve months ended December 31, 2021 compared to 8.40% and 6.94% for the same periods in 2020.

"We are pleased to report an increase in earnings year-to-year, highlighted by residential mortgage originations exceeding $145 million."said Thomas M Carr, President and CEO. Carr continued, The merger and integration with Community Bank, N.A, overwhelmingly approved by our shareholders in December, is expected to occur in the second quarter of 2022, instead of the first quarter as had been originally announced.

Net Income

Net income totaled $5,219,000 for the twelve months ended December 31, 2021, an increase of $1,060,000 or 26% from the $4,159,000 of net income recorded for the same period in 2020. This increase was the net result of an increase in net interest income of $1,426,000 and a decrease in the provision for loan losses of $1,300,000, offset by a decrease in noninterest income of $1,225,000, an increase in noninterest expense of $6,000, and an increase in tax expense of $435,000.

Net income totaled $1,102,000 for the three months ended December 31, 2021, a decrease of $182,000 or 14% from the $1,284,000 recorded for the same period in 2020. This decrease was the net result of a decrease in noninterest income of $1,346,000, offset by an increase in net interest income of $127,000, a decrease in noninterest expense of $584,000, a decrease in the provision for loan losses of $375,000, and a decrease in tax expense of $78,000.

The decrease in noninterest income for both the three and twelve months ended December 31, 2021 is primarily due to decreases in the gain on sale of loans, reflecting lower levels of residential mortgages originated for sale to the secondary markets compared to the same periods in 2020.

For both the three and twelve months ended December 31, 2021, the decreases in the provision for loan losses reflect the higher provisions in 2020 that resulted from managements consideration of the uncertainty of ongoing economic conditions resulting from the COVID-19 pandemic and associated economic slowdown during that time. Management did not determine it necessary to continue a similar level of provisions for loan losses in 2021, as the allowance for loan losses was determined to already be at adequate levels during 2021.

Basic and diluted earnings per share for the twelve months ended December 31, 2021 were both $1.48 per share compared to $1.19 per share for both for the same period in 2020. Basic and diluted earnings per share for the three months ended December 31, 2021 were both $.31 per share compared to $.37 per share for both for the same period in 2020.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2021 was 3.64% compared to 3.06% for the same period in 2020. The yield on average earning assets was 4.15% for the twelve months ended December 31, 2021 compared to 4.13% for the same period in 2020. The average cost of interest-bearing liabilities was 0.56% for the twelve months ended December 31, 2021 compared to 1.23% for the same period in 2020.

The net interest margin for the three months ended December 31, 2021 was 3.65% compared to 3.24% for the same period in 2020. The average yield on earning assets was 4.00% for the three months ended December 31, 2021 compared to 4.13% for the same period in 2020. The average cost of interest-bearing liabilities was 0.38% for the three months ended December 31, 2021 compared to 0.97% for the same period in 2020.

Assets

Total assets decreased $12.4 million or 1.9% to $632.2 million at December 31, 2021 compared to $644.6 million at December 31, 2020. Loans, including loans held for sale, decreased 5% to $466.6 million at December 31, 2021 compared to December 31, 2020. The available-for-sale investment portfolio decreased $2.0 million from December 31, 2020 to December 31, 2021. Total cash and cash equivalents were $101.8 million at December 31, 2021, an increase of $12.6 million from December 31, 2020 when cash totaled $89.2 million.

Nonperforming Loans

The nonperforming loans to total loans ratio was 0.70% at December 31, 2021 and 1.07% at December 31, 2020. Net loan charge-offs to average loans for the twelve months ended December 31, 2021 was 0.06% and was 0.05% for the twelve months ended December 31, 2020. The allowance for loan losses was 1.21% of total loans at December 31, 2021 and 1.19% of total loans at December 31, 2020.

Liabilities

Deposits totaled $541.0 million at December 31, 2021, a decrease of $6.0 million or 1.1% from the December 31, 2020 total of $547.0 million. The $6.0 million decrease in deposits consists of a $12.9 million increase in noninterest bearing accounts, a $14.9 million increase in savings accounts, and a $12.2 million increase in interest bearing transaction accounts, offset by a $1.3 million decrease in money market accounts and an $18.9 million decrease in time deposits. Borrowed funds totaled $22.0 million as of December 31, 2021 and $29.0 million at December 31, 2020.

Shareholders Equity

Shareholders equity increased $3,216,000 to $64.0 million at December 31, 2021 compared to December 31, 2020. The current level of shareholders equity equates to a book value per share of $18.02 at December 31, 2021, compared to $17.23 at December 31, 2020. Dividends paid for common shareholders were $0.15 and $0.60 for the three and twelve months ended December 31, 2021 and $0.15 and $0.68 for the three and twelve months ended December 31, 2020.

Elmira Savings Bank, with $632.2 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.

On October 4, 2021, Elmira Savings Bank, in a joint press release with Community Bank System, Inc. (NYSE:CBU), announced that it had entered into a definitive agreement to be acquired by Community Bank Systems bank subsidiary, Community Bank, N.A. for approximately $82.8 million in cash. Community Bank System, with reported assets of over $15.3 billion, is headquartered in DeWitt, New York and is among the countrys 125 largest banking institutions. On December 14, 2021, at a Special Shareholders Meeting the shareholders of Elmira Savings Bank approved the merger with more than 98% of the votes cast in favor of the merger.

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.

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

ELMIRA SAVINGS BANKCONSOLIDATED BALANCE SHEET(unaudited) (in thousands, except for share and December 31, December 31, per share data) 2021 2020 % ChangeASSETS Cash and due from banks $ 99,785 $ 88,536 12.7 %Federal funds sold and other 2,058 651 216.1 %short-term investmentsTotal cash and cash equivalents 101,843 89,187 14.2 % Securities available for sale, at 4,109 6,125 -32.9 %fair valueSecurities held to maturity - fair value $6,315at December 31, 2021 and $7,211 at 6,080 6,597 -7.8 %December 31, 2020Federal Reserve and Federal Home Loan 8,087 9,054 -10.7 %Bank (FHLB) stock, at cost Loans held for sale 2,374 5,408 -56.1 % Loans receivable 464,246 483,768 -4.0 %Less: Allowance for loan losses 5,620 5,755 -2.3 %Net loans 458,626 478,013 -4.1 % Premises and equipment, net 15,558 15,876 -2.0 %Bank-owned life insurance 15,914 15,410 3.3 %Accrued interest receivable 1,380 1,564 -11.8 %Goodwill 12,320 12,320 0.0 %Other assets 5,941 5,033 18.0 %Total assets $ 632,232 $ 644,587 -1.9 % LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $ 540,999 $ 547,021 -1.1 %Borrowings 22,000 29,000 -24.1 %Other liabilities 5,256 7,805 -32.7 %Total liabilities 568,255 583,826 -2.7 % 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, 2021 and 9,700 9,700 0.0 %at December 31, 2020Common stock, $1 par value; authorized 5,000,000shares; 3,641,487 shares issued and 3,547,604 outstandingat December 31, 2021 and 3,616,770shares issued and 3,641 3,617 0.7 %3,522,887outstanding at December31, 2020Additional paid-in capital 54,421 54,255 0.3 %Retained earnings 8,288 5,197 59.5 %Treasury stock, at cost - 93,883common shares and 10,000 preferred sharesat December 31, 2021 and December 31, (12,202 ) (12,202 ) 0.0 %2020Accumulated other comprehensive 79 144 -45.1 %incomeTotal Elmira Savings Bank 63,927 60,711 5.3 %shareholders' equityNoncontrolling interest 50 50 0.0 %Total shareholders' equity 63,977 60,761 5.3 %Total liabilities and shareholders' $ 632,232 $ 644,587 -1.9 %equity

ELMIRA SAVINGS BANKCONSOLIDATED STATEMENT OF INCOME(unaudited) Three Months Ended Twelve Months Ended December 31, December 31,(in thousands,except for per share 2021 2020 % Change 2021 2020 % Changedata) Interest and dividend income:Interest and fees on $ 4,683 $ 5,262 -11.0 % $ 19,810 $ 21,475 -7.8 %loansInterest anddividends on securitiesTaxable 117 155 -24.5 % 515 708 -27.3 %Non-taxable 64 71 -9.9 % 266 297 -10.4 %Total interest and 4,864 5,488 -11.4 % 20,591 22,480 -8.4 %dividend income Interest expense: Interest on deposits 281 968 -71.0 % 1,913 5,018 -61.9 %Interest on 146 210 -30.5 % 672 882 -23.8 %borrowingsTotal interest 427 1,178 -63.8 % 2,585 5,900 -56.2 %expenseNet interest income 4,437 4,310 2.9 % 18,006 16,580 8.6 %Provision for loan - 375 -100.0 % 150 1,450 -89.7 %lossesNet interest incomeafter provision for 4,437 3,935 12.8 % 17,856 15,130 18.0 %loan losses Noninterest income: Service fees 317 292 8.6 % 1,237 1,163 6.4 %Gain on sale of 491 1,820 -73.0 % 3,199 4,577 -30.1 %loans held for saleOther service fees 215 203 5.9 % 892 793 12.5 %Earnings onbank-owned life 108 104 3.8 % 415 402 3.2 %insuranceOther 27 85 -68.2 % 251 284 -11.6 %Total noninterest 1,158 2,504 -53.8 % 5,994 7,219 -17.0 %income Noninterest expense: Salaries and 2,422 2,515 -3.7 % 9,109 8,965 1.6 %benefitsNet occupancy 387 396 -2.3 % 1,562 1,613 -3.2 %Equipment 436 476 -8.4 % 1,646 1,669 -1.4 %Other 942 1,384 -31.9 % 4,781 4,845 -1.3 %Total noninterest 4,187 4,771 -12.2 % 17,098 17,092 0.0 %expenseIncome before income 1,408 1,668 -15.6 % 6,752 5,257 28.4 %taxesIncome taxes 301 379 -20.6 % 1,528 1,093 39.8 %Net income 1,107 1,289 -14.1 % 5,224 4,164 25.5 %Less: Net incomeattributable to 5 5 - 5 5 - noncontrollinginterest Netincomeattributable 1,102 1,284 -14.2 % 5,219 4,159 25.5 %to Elmira SavingsBank Dividend on - - - - - - preferred stockIncome available to $ 1,102 $ 1,284 -14.2 % $ 5,219 $ 4,159 25.5 %common shareholders Basic earnings per $ 0.31 $ 0.37 -16.2 % $ 1.48 $ 1.19 24.4 %share Diluted earnings per $ 0.31 $ 0.37 -16.2 % $ 1.48 $ 1.19 24.4 %share Weighted averageshares outstanding - 3,525,536 3,511,688 0.4 % 3,520,476 3,507,910 0.4 %basic Weighted averageshares outstanding - 3,553,083 3,511,688 1.2 % 3,528,029 3,508,722 0.6 %diluted Dividends per share $ 0.15 $ 0.15 0.0 % $ 0.60 $ 0.68 -11.8 %

ELMIRA SAVINGS BANKAVERAGE BALANCES AND INTEREST RATES (Dollars in For the Three Months Ended Thousands) December 31, 2021 December 31, 2020 ASSETS: Average Interest Average Average Interest Average Balance Rate Balance RateLoans $ 463,287 $ 4,683 4.01 % $ 503,332 $ 5,262 4.15 %Short-term 1,247 - 0.03 2,348 - 0.04 investmentsSecurities 18,611 181 3.86 22,177 226 4.04 Totalinterest-earning 483,145 4,864 4.00 527,857 5,488 4.13 assets Noninterest-earning 151,017 130,513 assets TOTAL ASSETS $ 634,162 $ 658,370 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest-bearing $ 422,200 $ 281 0.26 $ 437,689 $ 968 0.88 depositsBorrowings 22,391 146 2.55 43,831 210 1.87 Totalinterest-bearing 444,591 427 0.38 481,520 1,178 0.97 liabilities Noninterest-bearing 125,459 116,069 liabilitiesShareholders' 64,112 60,781 equity TOTAL LIABILITIESAND SHAREHOLDERS' $ 634,162 $ 658,370 EQUITYInterest rate 3.62 % 3.16 %spreadNet interest income $ 4,437 3.65 % $ 4,310 3.24 %/margin

ELMIRA SAVINGS BANK AVERAGE BALANCES AND INTEREST RATES (Dollars in For the Twelve Months Ended Thousands) December 31, 2021 December 31, 2020 ASSETS: Average Interest Average Average Interest Average Balance Rate Balance RateLoans $ 474,212 $ 19,810 4.16 % $ 516,170 $ 21,475 4.14 %Short-term 743 - 0.03 1,422 2 0.12 investmentsSecurities 19,871 781 3.93 24,490 1,003 4.09 Totalinterest-earning 494,826 20,591 4.15 542,082 22,480 4.13 assets Noninterest-earning 151,993 104,926 assets TOTAL ASSETS $ 646,819 $ 647,008 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest-bearing $ 431,255 $ 1,913 0.44 $ 434,495 $ 5,018 1.15 depositsBorrowings 25,282 672 2.62 43,964 882 1.97 Totalinterest-bearing 456,537 2,585 0.56 478,459 5,900 1.23 liabilities Noninterest-bearing 127,479 108,595 liabilitiesShareholders' 62,803 59,954 equity TOTAL LIABILITIESAND SHAREHOLDERS' $ 646,819 $ 647,008 EQUITYInterest rate 3.58 % 2.90 %spreadNet interest income $ 18,006 3.64 % $ 16,580 3.06 %/margin

Quarter Ended(Dollars in Thousands, 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020Except Per Share Data)Operating Data Net income $ 1,102 $ 1,511 $ 1,402 $ 1,204 $ 1,284 Net interest income 4,437 4,708 4,340 4,521 4,310 Provision for loan - - - 150 375 losses Non-interest income, 1,158 1,564 1,347 1,925 2,504 ex. Net security gains Non-interest expense 4,187 4,307 3,904 4,700 4,771 Performance Statistics Net interest margin 3.65 % 3.81 % 3.48 % 3.57 % 3.24 % Annualized return on 0.69 % 0.92 % 0.86 % 0.75 % 0.78 % average assets Annualized return on 6.82 % 9.49 % 9.03 % 7.93 % 8.40 % average equity Annualized net loan charge-offs to avg 0.01 % 0.14 % 0.06 % 0.03 % 0.03 % loans Net charge-offs 7 164 74 40 38 Efficiency ratio 74.8 % 68.7 % 68.6 % 72.9 % 70.0 % Per Share Data Basic earnings per $ 0.31 $ 0.43 $ 0.40 $ 0.34 $ 0.37 share Diluted earnings per 0.31 0.43 0.40 0.34 0.37 share Dividend declared per 0.15 0.15 0.15 0.15 0.15 share Book value 18.02 17.86 17.57 17.34 17.23 Common stock price: High 23.22 14.75 15.05 15.96 13.25 Low 13.50 12.80 13.23 11.48 10.44 Close 22.84 13.34 14.31 13.50 11.50 Weighted average common shares: Basic 3,526 3,522 3,519 3,515 3,512 Fully diluted 3,553 3,524 3,520 3,515 3,512 End-of-period common shares: Issued 3,641 3,641 3,641 3,636 3,617 Treasury 94 94 94 94 94 Financial Condition Data: General Total assets $ 632,232 $ 643,596 $ 648,686 $ 659,333 $ 644,587 Loans, net 458,626 458,631 465,271 476,383 478,013 Intangibles 12,320 12,320 12,320 12,320 12,320 Total deposits 540,999 544,763 551,245 562,893 547,021 Noninterest-bearing 122,268 118,511 121,534 121,101 109,346 Savings 97,479 95,299 93,351 87,228 82,573 NOW 112,519 114,514 111,343 111,414 100,293 Money Market 34,626 36,577 32,624 35,011 35,920 Time deposits 174,107 179,862 192,393 208,139 218,889 Total interest-bearing 418,731 426,252 429,711 441,792 437,675 deposits Shareholders' equity 63,977 63,396 62,375 61,462 60,761 Asset Quality Non-performing assets $ 3,675 $ 3,645 $ 5,023 $ 5,602 $ 5,304 Non-performing assets 0.58 % 0.57 % 0.77 % 0.85 % 0.82 % to total assets Allowance for loan 5,620 5,627 5,791 5,865 5,755 losses Allowance for loan 1.21 % 1.21 % 1.23 % 1.22 % 1.19 % losses to total loans Allowance for loan losses to non-performing 174.37 % 175.95 % 116.12 % 108.63 % 112.67 % loans Non-performing loans 0.70 % 0.70 % 1.07 % 1.13 % 1.07 % to total loans Capitalization Shareholders' equity 10.12 % 9.85 % 9.62 % 9.32 % 9.43 % to total assets