GlobeNewswire Inc | Oct 21, 2020 01:08PM EDT

October 21, 2020

ELMIRA, N.Y., Oct. 21, 2020 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ:ESBK)

Highlights

-- Net income was $948,000 and $2,875,000 for the three and nine months ended September 30, 2020 compared to $901,000 and $2,546,000 for the same periods in 2019. -- Diluted earnings per share were $.27 per share and $.82 per share for the three and nine months ended September 30, 2020 compared to $.26 per share and $.73 per share for the same periods in 2019. -- Return on average assets was .55% and .60% for the three and nine months ended September 30, 2020 compared to .58% and .56% for the three and nine months ended September 30, 2019. -- Return on average equity was 6.27% and 6.44% for the three and nine months ended September 30, 2020 compared to 6.08% and 5.80% for the same periods in 2019.

"We continue to be concerned about the economic impact the pandemic is having in our region,"said Thomas M Carr, President and CEO. Carr continued, "We are focused on 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 $2,875,000 for the nine months ended September 30, 2020, an increase of $329,000 or 13% from the $2,546,000 of net income recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $1,603,000 and an increase in net interest income of $1,000, offset by an increase in the provision for loan losses of $531,000, an increase in noninterest expense of $521,000, and an increase in tax expense of $223,000.

Net income totaled $948,000 for the three months ended September 30, 2020, an increase of $47,000 or 5% from the $901,000 recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $817,000, offset by a decrease in net interest income of $220,000, an increase in noninterest expense of $305,000, an increase in the provision for loan losses of $200,000, and an increase in tax expense of $45,000.

The increase in noninterest income for both the three and nine months ended September 30, 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 nine months ended September 30, 2020 reflects higher levels of other expense. The higher levels of other expense for both the three and nine months ended September 30, 2020 are in part related to higher levels of residential mortgage originations in 2020 and also includes the impact of a one-time FDIC small bank assessment credit of $143,000 recognized during the third quarter of 2019.

For both the three and nine months ended September 30, 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 nine months ended September 30, 2020 were both $.82 per share compared to $.73 per share for both for the same period in 2019. Basic and diluted earnings per share for the three months ended September 30, 2020 were both $.27 per share compared to $.26 per share for both for the same period in 2019.

Net Interest Margin

The net interest margin for the nine months ended September 30, 2020 was 2.98% compared to 3.05% for the same period in 2019. The yield on average earning assets was 4.13% for the nine months ended September 30, 2020 compared to 4.31% for the same period in 2019. The average cost of interest-bearing liabilities was 1.32% for the nine months ended September 30, 2020 compared to 1.46% for the same period in 2019.

The net interest margin for the three months ended September 30, 2020 was 2.81% compared to 2.97% for the same period in 2019. The average yield on earning assets was 3.91% for the three months ended September 30, 2020 compared to 4.31% for the same period in 2019. The average cost of interest-bearing liabilities was 1.20% for the three months ended September 30, 2020 compared to 1.55% for the same period in 2019.

Assets

Total assets increased $67.2 million or 11.1% to $674.0 million at September 30, 2020 compared to $606.8 million at December 31, 2019. Loans, including loans held for sale, increased 0.1% to $520.9 million at September 30, 2020 compared to December 31, 2019. The available-for-sale investment portfolio decreased $5.3 million from December 31, 2019 to September 30, 2020. Total cash and cash equivalents were $85.4 million at September 30, 2020, an increase of $73.4 million from December 31, 2019 when cash totaled $12.0 million.

Nonperforming Loans

The nonperforming loans to total loans ratio was 1.03% at September 30, 2020 and 0.82% at December 31, 2019. Net loan charge-offs to average loans for the nine months ended September 30, 2020 was 0.06% and was 0.10% for the nine months ended September 30, 2019. The allowance for loan losses was 1.06% of total loans at September 30, 2020 and 0.88% of total loans at December 31, 2019.

Liabilities

Deposits totaled $551.3 million at September 30, 2020, an increase of $39.1 million or 7.6% from the December 31, 2019 total of $512.2 million. Borrowed funds totaled $54.9 million as of September 30, 2020, an increase of $25.9 million from December 31, 2019 when borrowed funds totaled $29.0 million.

Shareholders Equity

Shareholders equity increased $1,349,000 to $60.0 million at September 30, 2020 compared to December 31, 2019. The current level of shareholders equity equates to a book value per share of $17.01 at September 30, 2020, compared to $16.67 at December 31, 2019. Dividends paid for common shareholders were $0.15 and $0.53 for the three and nine months ended September 30, 2020 and $0.23 and $0.69 for the three and nine months ended September 30, 2019.

Elmira Savings Bank, with $674.0 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.

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 September 30, December 31, per share data) 2020 2019 % ChangeASSETS Cash and due from banks $ 85,381 $ 11,954 614.2 %Federal funds sold and other 88 92 -4.3 %short-term investmentsTotal cash and cash equivalents 85,469 12,046 609.5 % Securities available for sale, at 6,456 11,802 -45.3 %fair valueSecurities held to maturity - fair value $7,348at September 30, 2020 and $7,233 6,716 7,018 -4.3 %at December 31, 2019Federal Reserve and Federal Home Loan 9,417 9,944 -5.3 %Bank (FHLB) stock, at cost Loans held for sale 10,489 1,354 674.7 % Loans receivable 510,364 518,871 -1.6 %Less: Allowance for loan losses 5,418 4,576 18.4 %Net loans 504,946 514,295 -1.8 % Premises and equipment, net 16,030 16,210 -1.1 %Bank-owned life insurance 15,307 14,919 2.6 %Accrued interest receivable 1,675 1,625 3.1 %Goodwill 12,320 12,320 0.0 %Other assets 5,207 5,296 -1.7 %Total assets $ 674,032 $ 606,829 11.1 % LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $ 551,350 $ 512,215 7.6 %Borrowings 54,896 29,000 89.3 %Other liabilities 7,826 7,003 11.8 %Total liabilities 614,072 548,218 12.0 % 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 September 30, 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 September 30, 2020 and3,606,089 shares issued and 3,512,206 3,617 3,606 0.3 %outstanding at December 31, 2019Additional paid-in capital 54,197 53,993 0.4 %Retained earnings 4,441 3,432 29.4 %Treasury stock, at cost - 93,883common shares and 10,000 preferred sharesat September 30, 2020 and (12,202 ) (12,202 ) 0.0 %December 31, 2019Accumulated other comprehensive 157 32 390.6 %incomeTotal Elmira Savings Bank 59,910 58,561 2.3 %shareholders' equityNoncontrolling interest 50 50 0.0 %Total shareholders' equity 59,960 58,611 2.3 %Total liabilities and $ 674,032 $ 606,829 11.1 %shareholders' equity

ELMIRA SAVINGS BANKCONSOLIDATED STATEMENT OF INCOME(unaudited) Three Months Ended Nine Months Ended September 30, September 30,(in thousands, except 2020 2019 % Change 2020 2019 % Changefor per share data) Interest and dividend income:Interest and fees $ 5,140 $ 5,568 -7.7 % $ 16,213 $ 16,215 -0.0 %on loansInterest anddividends on securitiesTaxable 163 234 -30.3 % 553 759 -27.1 %Non-taxable 72 107 -32.7 % 226 331 -31.7 %Totalinterest and dividend 5,375 5,909 -9.0 % 16,992 17,305 -1.8 %income Interest expense: Interest on 1,291 1,627 -20.7 % 4,050 4,407 -8.1 %depositsInterest on 232 210 10.5 % 672 629 6.8 %borrowingsTotal 1,523 1,837 -17.1 % 4,722 5,036 -6.2 %interest expenseNet interest income 3,852 4,072 -5.4 % 12,270 12,269 0.0 %Provision for loan 450 250 80.0 % 1,075 544 97.6 %lossesNet interest incomeafter provision for 3,402 3,822 -11.0 % 11,195 11,725 -4.5 %loan losses Noninterest income: Service fees 285 353 -19.3 % 871 1,054 -17.4 %Gain on sale of 1,431 452 216.6 % 3,060 1,166 162.4 %loans held for saleGain on sale of - 90 - - 90 - securitiesOther service 254 250 1.6 % 648 664 -2.4 %feesEarnings onbank-owned life 103 98 5.1 % 298 284 4.9 %insuranceOther 48 61 -21.3 % 141 157 -10.2 %Total 2,121 1,304 62.7 % 5,018 3,415 46.9 %noninterest income Noninterest expense: Salaries and 2,236 2,258 -1.0 % 6,450 6,383 1.0 %benefitsNet occupancy 388 379 2.4 % 1,217 1,199 1.5 %Equipment 408 381 7.1 % 1,193 1,145 4.2 %Marketing and 202 289 -30.1 % 525 788 -33.4 %public relationsProfessional fees 143 90 58.9 % 458 361 26.9 %Other 971 646 50.3 % 2,781 2,227 24.9 %Total 4,348 4,043 7.5 % 12,624 12,103 4.3 %noninterest expenseIncome before income 1,175 1,083 8.5 % 3,589 3,037 18.2 %taxesIncome taxes 227 182 24.7 % 714 491 45.4 %Net income 948 901 5.2 % 2,875 2,546 12.9 %Less: Net incomeattributable to - - - - - - noncontrollinginterest Net incomeattibutable to Elmira 948 901 5.2 % 2,875 2,546 12.9 %Savings Bank Dividend on preferred - - - - - - stockIncome available to $ 948 $ 901 5.2 % $ 2,875 $ 2,546 12.9 %common shareholders Basic earnings per $ 0.27 $ 0.26 3.8 % $ 0.82 $ 0.73 12.3 %share Diluted earnings per $ 0.27 $ 0.26 3.8 % $ 0.82 $ 0.73 12.3 %share Weighted averageshares outstanding - 3,509,421 3,496,195 0.4 % 3,506,646 3,493,945 0.4 %basic Weighted averageshares outstanding - 3,509,421 3,498,545 0.3 % 3,507,728 3,499,813 0.2 %diluted Dividends per share $ 0.15 $ 0.23 -34.8 % $ 0.53 $ 0.69 -23.2 %

ELMIRA SAVINGS BANK AVERAGE BALANCES AND INTEREST RATES (Dollars in For the Three Months Ended Thousands) September 30, 2020 September 30, 2019 ASSETS: Average Interest Average Average Interest Average Balance Rate Balance RateLoans $ 521,294 $ 5,140 3.92 % $ 506,556 $ 5,568 4.36 %Short-term 1,257 - 0.05 689 4 2.15 investmentsSecurities 23,170 235 4.08 36,861 337 3.63 Totalinterest-earning 545,721 5,375 3.91 544,106 5,909 4.31 assets Noninterest-earning 136,645 75,625 assets TOTAL ASSETS $ 682,366 $ 619,731 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest-bearing $ 447,441 $ 1,291 1.15 $ 441,020 $ 1,627 1.46 depositsBorrowings 56,548 232 1.61 29,000 210 2.85 Totalinterest-bearing 503,989 1,523 1.20 470,020 1,837 1.55 liabilities Noninterest-bearing 118,276 90,876 liabilitiesShareholders' 60,101 58,835 equity TOTAL LIABILITIESAND SHAREHOLDERS' $ 682,366 $ 619,731 EQUITYInterest rate 2.71 % 2.76 %spreadNet interest income $ 3,852 2.81 % $ 4,072 2.97 %/margin

ELMIRA SAVINGS BANK AVERAGE BALANCES AND INTEREST RATES (Dollars in For the Nine Months Ended Thousands) September 30, 2020 September 30, 2019 ASSETS: Average Interest Average Average Interest Average Balance Rate Balance RateLoans $ 520,481 $ 16,213 4.14 % $ 493,922 $ 16,215 4.37 %Short-term 1,111 2 0.18 562 9 2.06 investmentsSecurities 25,291 777 4.10 39,506 1,081 3.65 Totalinterest-earning 546,883 16,992 4.13 533,990 17,305 4.31 assets Noninterest-earning 96,310 69,978 assets TOTAL ASSETS $ 643,193 $ 603,968 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest-bearing $ 433,423 $ 4,050 1.25 $ 429,598 $ 4,407 1.37 depositsBorrowings 44,008 672 2.01 29,249 629 2.84 Totalinterest-bearing 477,431 4,722 1.32 458,847 5,036 1.46 liabilities Noninterest-bearing 106,086 86,449 liabilitiesShareholders' 59,676 58,672 equity TOTAL LIABILITIESAND SHAREHOLDERS' $ 643,193 $ 603,968 EQUITYInterest rate 2.81 % 2.85 %spreadNet interest income $ 12,270 2.98 % $ 12,269 3.05 %/margin

Quarter Ended(Dollars in Thousands, 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019Except Per Share Data)Operating Data Net income $ 948 $ 909 $ 1,018 $ 940 $ 901 Net interest income 3,852 4,137 4,281 4,159 4,072 Provision for loan 450 575 50 200 250 losses Net security gains - - - - 90 Non-interest income, 2,121 1,756 1,141 1,358 1,214 ex. Net security gains Non-interest expense 4,348 4,193 4,083 4,174 4,043 Performance Statistics Net interest margin 2.81 % 2.98 % 3.16 % 3.01 % 2.97 % Annualized return on 0.55 % 0.57 % 0.68 % 0.61 % 0.58 % average assets Annualized return on 6.27 % 6.12 % 6.93 % 6.33 % 6.07 % average equity Annualized net loan 0.04 % 0.09 % 0.05 % 0.14 % 0.11 % charge-offs to avg loans Net charge-offs 57 116 60 183 135 Efficiency ratio 72.8 % 71.1 % 75.3 % 75.7 % 75.2 %Per Share Data Basic earnings per $ 0.27 $ 0.26 $ 0.29 $ 0.27 $ 0.26 share Diluted earnings per 0.27 0.26 0.29 0.27 0.26 share Dividend declared per 0.15 0.15 0.23 0.23 0.23 share Book value 17.01 16.87 16.77 16.67 16.62 Common stock price: High 11.18 13.39 17.40 15.99 16.40 Low 10.30 10.49 11.50 13.97 13.97 Close 11.02 11.00 11.50 15.10 14.07 Weighted average common shares: Basic 3,509 3,507 3,503 3,499 3,496 Fully diluted 3,509 3,507 3,507 3,501 3,499 End-of-period common shares: Issued 3,617 3,617 3,611 3,606 3,606 Treasury 94 94 94 94 94 Financial Condition Data: General Total assets $ 674,032 $ 675,862 $ 598,017 $ 606,829 $ 615,601 Loans, net 504,946 518,698 506,076 514,295 511,750 Intangibles 12,320 12,320 12,320 12,320 12,320 Total deposits 551,350 551,225 501,760 512,215 520,030 Noninterest-bearing 107,423 109,985 83,431 81,934 82,613 Savings 79,492 79,150 72,174 70,358 69,186 NOW 98,464 91,166 83,323 88,126 84,207 Money Market 34,375 28,467 20,306 24,724 21,555 Time deposits 231,596 242,457 242,526 247,073 262,469 Total interest-bearing 443,927 441,240 418,329 430,281 437,417 deposits Shareholders' equity 59,960 59,496 59,044 58,611 58,422 Asset Quality Non-performing assets $ 5,507 $ 5,578 $ 4,686 $ 4,723 $ 4,923 Non-performing assets 0.82 % 0.83 % 0.78 % 0.78 % 0.80 % to total assets Allowance for loan 5,418 5,025 4,566 4,576 4,559 losses Allowance for loan 1.06 % 0.96 % 0.89 % 0.88 % 0.88 % losses to total loans Allowance for loan losses to non-performing 104.11 % 95.28 % 105.43 % 108.51 % 96.43 % loans Non-performing loans 1.03 % 1.02 % 0.86 % 0.82 % 0.92 % to total loansCapitalization Shareholders' equity 8.90 % 8.80 % 9.87 % 9.66 % 9.49 % to total assets