GlobeNewswire Inc | Jul 22, 2020 04:00PM EDT

July 22, 2020

ELMIRA, N.Y., July 22, 2020 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ:ESBK)

Highlights

-- Net income was $909,000 and $1,927,000 for the three and six months ended June 30, 2020 compared to $718,000 and $1,645,000 for the same periods in 2019.

-- Diluted earnings per share were $.26 per share and $.55 per share for the three and six months ended June 30, 2020 compared to $.21 per share and $.47 per share for the same periods in 2019.

-- Return on average assets was .57% and .62% for the three and six months ended June 30, 2020 compared to .47% and .56% for the three and six months ended June 30, 2019.

-- Return on average equity was 6.12% and 6.52% for the three and six months ended June 30, 2020 compared to 4.92% and 5.66% for the same periods in 2019.

"We continue to be concerned about the impact the economic shutdownand subsequent staged reopening due tothe COVID-19 pandemic is having on local economies.Our region has beenfortunate tohave not yet experienced the widespread health crisis like other areas of the state and country,"said Thomas M Carr, President and CEO. Carr continued, "We are focused on continuing to provide credit and 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 $1,927,000 for the six months ended June 30, 2020, an increase of $282,000 or 17% from the $1,645,000 of net income recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $786,000 and an increase in net interest income of $221,000, offset by an increase in the provision for loan losses of $331,000, an increase in noninterest expense of $216,000, and an increase in tax expense of $178,000.

Net income totaled $909,000 for the three months ended June 30, 2020, an increase of $191,000 or 27% from the $718,000 recorded for the same period in 2019. This increase was the net result of an increase in noninterest income of $630,000, an increase in net interest income of $40,000, and a decrease in noninterest expense of $13,000, offset by an increase in the provision for loan losses of $413,000 and an increase in tax expense of $79,000.

The increase in noninterest income for both the three and six months ended June 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.

For both the three and six months ended June 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 six months ended June 30, 2020 were both $.55 per share compared to $.47 per share for both for the same period in 2019. Basic and diluted earnings per share for the three months ended June 30, 2020 were both $.26 per share compared to $.21 per share for both for the same period in 2019.

Net Interest Margin

The net interest margin for the six months ended June 30, 2020 was 3.07% compared to 3.10% for the same period in 2019. The yield on average earning assets was 4.24% for the six months ended June 30, 2020 compared to 4.31% for the same period in 2019. The average cost of interest-bearing liabilities was 1.38% for the six months ended June 30, 2020 compared to 1.42% for the same period in 2019.

The net interest margin for the three months ended June 30, 2020 was 2.98% compared to 3.06% for the same period in 2019. The average yield on earning assets was 4.11% for the three months ended June 30, 2020 compared to 4.36% for the same period in 2019. The average cost of interest-bearing liabilities was 1.32% for the three months ended June 30, 2020 compared to 1.50% for the same period in 2019.

Assets

Total assets increased $69.0 million or 11.4% to $675.9 million at June 30, 2020 compared to $606.8 million at December 31, 2019. Loans, including loans held for sale, increased 1.4% to $527.6 million at June 30, 2020 compared to December 31, 2019. The available-for-sale investment portfolio decreased $4.8 million from December 31, 2019 to June 30, 2020. Total cash and cash equivalents were $79.6 million at June 30, 2020, an increase of $67.5 million from December 31, 2019 when cash totaled $12.0 million.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 1.02% at June 30, 2020 and 0.82% at December 31, 2019. Net loan charge-offs to average loans for the six months ended June 30, 2020 was 0.09% for both the six months ended June 30, 2020 and June 30, 2019. The allowance for loan losses was 0.96% of total loans at June 30, 2020 and 0.88% of total loans at December 31, 2019.

Liabilities

Deposits total $551.2 million at June 30, 2020, an increase of $39.0 million or 7.6% from the December 31, 2019 total of $512.2 million. Borrowed funds totaled $56.9 million as of June 30, 2020, an increase of $27.9 million from December 31, 2019 when borrowed funds totaled $29.0 million.

Shareholders Equity

Shareholders equity increased $885,000 to $59.5 million at June 30, 2020 compared to December 31, 2019. The current level of shareholders equity equates to a book value per share of $16.87 at June 30, 2020, compared to $16.67 at December 31, 2019. Dividends paid for common shareholders were $0.15 and $0.38 for the three and six months ended June 30, 2020 and $0.23 and $0.46 for the three and six months ended June 30, 2019.

Elmira Savings Bank, with $675.9 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 June 30, December 31, per share data) 2020 2019 % ChangeASSETS Cash and due from banks $ 79,470 $ 11,954 564.8 %Federal funds sold and other 89 92 -3.3 %short-term investmentsTotal cash and cash equivalents 79,559 12,046 560.5 % Securities available for sale, at 6,962 11,802 -41.0 %fair valueSecurities held to maturity - fairvalue $7,428 at June 30, 2020, and 6,783 7,018 -3.3 %$7,233 at December 31, 2019Federal Reserve and Federal Home Loan 9,893 9,944 -0.5 %Bank (FHLB) stock, at cost Loans held for sale 3,919 1,354 189.4 % Loans receivable 523,723 518,871 0.9 %Less: Allowance for loan losses 5,025 4,576 9.8 %Net loans 518,698 514,295 0.9 % Premises and equipment, net 15,953 16,210 -1.6 %Bank-owned life insurance 15,204 14,919 1.9 %Accrued interest receivable 1,761 1,625 8.4 %Goodwill 12,320 12,320 0.0 %Other assets 4,810 5,296 -9.2 %Total assets $ 675,862 $ 606,829 11.4 % LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $ 551,225 $ 512,215 7.6 %Borrowings 56,896 29,000 96.2 %Other liabilities 8,245 7,003 17.7 %Total liabilities 616,366 548,218 12.4 % Shareholders' equity: Preferred stock, $1 par value; $1,000liquidation value per issued share;5,000,000 shares authorized; 10,000 9,700 9,700 0.0 %shares issued and none outstanding atJune 30, 2020 and at December 31,2019Common stock, $1 par value;authorized 5,000,000 shares;3,616,770 shares issued and 3,522,887 3,617 3,606 0.3 %outstanding at June 30, 2020 and3,606,089 shares issued and 3,512,206outstanding at December 31, 2019Additional paid-in capital 54,140 53,993 0.3 %Retained earnings 4,022 3,432 17.2 %Treasury stock, at cost - 93,883common shares and 10,000 preferred (12,202 ) (12,202 ) 0.0 %shares at June 30, 2020 and December31, 2019Accumulated other comprehensive 169 32 428.1 %incomeTotal Elmira Savings Bank 59,446 58,561 1.5 %shareholders' equityNoncontrolling interest 50 50 0.0 %Total shareholders' equity 59,496 58,611 1.5 %Total liabilities and shareholders' $ 675,862 $ 606,829 11.4 %equity

ELMIRA SAVINGS BANKCONSOLIDATED STATEMENT OF INCOME(unaudited) Three Months Ended Six Months Ended June 30, June 30,(in thousands,except for per 2020 2019 % Change 2020 2019 % Changeshare data) Interest anddividend income:Interest and $ 5,451 $ 5,464 -0.2 % $ 11,073 $ 10,647 4.0 %fees on loansInterest anddividends on securitiesTaxable 177 252 -29.8 % 390 525 -25.7 %Non-taxable 72 109 -33.9 % 154 224 -31.3 %Total interestand dividend 5,700 5,825 -2.1 % 11,617 11,396 1.9 %income Interest expense:Interest on 1,342 1,519 -11.7 % 2,759 2,780 -0.8 %depositsInterest on 221 209 5.7 % 440 419 5.0 %borrowingsTotal interest 1,563 1,728 -9.5 % 3,199 3,199 0.0 %expenseNet interest 4,137 4,097 1.0 % 8,418 8,197 2.7 %incomeProvision for 575 162 254.9 % 625 294 112.6 %loan lossesNet interestincome after 3,562 3,935 -9.5 % 7,793 7,903 -1.4 %provision forloan losses Noninterest income:Service fees 255 345 -26.1 % 586 701 -16.4 %Gain on saleof loans held 1,192 425 180.5 % 1,629 714 128.2 %for saleOther service 181 212 -14.6 % 394 414 -4.8 %feesEarnings onbank-owned 97 94 3.2 % 195 186 4.8 %life insuranceOther 31 50 -38.0 % 93 96 -3.1 %Totalnoninterest 1,756 1,126 56.0 % 2,897 2,111 37.2 %income Noninterest expense:Salaries and 2,070 2,105 -1.7 % 4,214 4,125 2.2 %benefitsNet occupancy 435 375 16.0 % 829 820 1.1 %Equipment 385 401 -4.0 % 785 764 2.7 %Marketing andpublic 146 253 -42.3 % 323 499 -35.3 %relationsProfessional 149 133 12.0 % 315 271 16.2 %feesOther 1,008 939 7.3 % 1,810 1,581 14.5 %Totalnoninterest 4,193 4,206 -0.3 % 8,276 8,060 2.7 %expenseIncome before 1,125 855 31.6 % 2,414 1,954 23.5 %income taxesIncome taxes 216 137 57.7 % 487 309 57.6 %Net income 909 718 26.6 % 1,927 1,645 17.1 %Less: Netincomeattributable - - - - - - tononcontrollinginterest Net incomeattributable 909 718 26.6 % 1,927 1,645 17.1 %to ElmiraSavings Bank Dividend onpreferred - - - - - - stockIncomeavailable to $ 909 $ 718 26.6 % $ 1,927 $ 1,645 17.1 %commonshareholders Basic earnings $ 0.26 $ 0.21 23.8 % $ 0.55 $ 0.47 17.0 %per share Dilutedearnings per $ 0.26 $ 0.21 23.8 % $ 0.55 $ 0.47 17.0 %share Weightedaverage shares 3,507,136 3,493,298 0.4 % 3,505,240 3,492,571 0.4 %outstanding -basic Weightedaverage shares 3,507,136 3,499,335 0.2 % 3,506,864 3,500,198 0.2 %outstanding -diluted Dividends per $ 0.15 $ 0.23 -34.8 % $ 0.38 $ 0.46 -17.4 %share

ELMIRA SAVINGS BANK AVERAGE BALANCES AND INTEREST RATES (Dollars in For the Three Months Ended Thousands) June 30, 2020 June 30, 2019 ASSETS: Average Interest Average Average Interest Average Balance Rate Balance RateLoans $ 528,659 $ 5,451 4.12 % $ 492,985 $ 5,464 4.42 %Short-term 1,328 - 0.02 513 3 2.11 investmentsSecurities 24,909 249 4.01 39,985 358 3.59 Totalinterest-earning 554,896 5,700 4.11 533,483 5,825 4.36 assets Noninterest-earning 92,109 72,842 assets TOTAL ASSETS $ 647,005 $ 606,325 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest-bearing $ 431,681 $ 1,342 1.25 $ 431,816 $ 1,519 1.41 depositsBorrowings 43,583 221 2.01 29,000 209 2.85 Totalinterest-bearing 475,264 1,563 1.32 460,816 1,728 1.50 liabilities Noninterest-bearing 111,950 86,960 liabilitiesShareholders' 59,790 58,549 equity TOTAL LIABILITIESAND SHAREHOLDERS' $ 647,004 $ 606,325 EQUITYInterest rate 2.79 % 2.86 %spreadNet interest income $ 4,137 2.98 % $ 4,097 3.06 %/margin

ELMIRA SAVINGS BANK AVERAGE BALANCES AND INTEREST RATES (Dollars in For the Six Months Ended Thousands) June 30, 2020 June 30, 2019 ASSETS: Average Interest Average Average Interest Average Balance Rate Balance RateLoans $ 520,069 $ 11,073 4.25 % $ 487,500 $ 10,647 4.37 %Short-term 1,037 1 0.27 496 5 2.00 investmentsSecurities 26,364 543 4.12 40,851 744 3.66 Totalinterest-earning 547,470 11,617 4.24 528,847 11,396 4.31 assets Noninterest-earning 75,922 67,108 assets TOTAL ASSETS $ 623,392 $ 595,955 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest-bearing $ 426,337 $ 2,759 1.30 $ 423,792 $ 2,780 1.32 depositsBorrowings 37,669 440 2.31 29,376 419 2.83 Totalinterest-bearing 464,006 3,199 1.38 453,168 3,199 1.42 liabilities Noninterest-bearing 99,925 84,198 liabilitiesShareholders' 59,461 58,589 equity TOTAL LIABILITIESAND SHAREHOLDERS' $ 623,392 $ 595,955 EQUITYInterest rate 2.86 % 2.89 %spreadNet interest income $ 8,418 3.07 % $ 8,197 3.10 %/margin

Quarter Ended(Dollars in 6/30/ 3/31/ 12/31/ 9/30/ 6/30/Thousands, Except 2020 2020 2019 2019 2019 Per Share Data)Operating Data Net income $ 909 $ 1,018 $ 940 $ 901 $ 718 Net interest income 4,137 4,281 4,159 4,072 4,097 Provision for loan 575 50 200 250 162 lossesNet security gains - - - 90 - Non-interest income,ex. Net security 1,756 1,141 1,358 1,214 1,126 gainsNon-interest expense 4,193 4,083 4,174 4,043 4,206 Performance StatisticsNet interest margin 2.98 % 3.16 % 3.01 % 2.97 % 3.06 %Annualized return on 0.57 % 0.68 % 0.61 % 0.58 % 0.47 %average assetsAnnualized return on 6.12 % 6.93 % 6.33 % 6.07 % 4.92 %average equityAnnualized net loancharge-offs to avg 0.09 % 0.05 % 0.14 % 0.11 % 0.09 %loansNet charge-offs 116 60 183 135 105 Efficiency ratio 71.1 % 75.3 % 75.7 % 75.2 % 80.5 %Per Share Data Basic earnings per $ 0.26 $ 0.29 $ 0.27 $ 0.26 $ 0.21 shareDiluted earnings per 0.26 0.29 0.27 0.26 0.21 shareDividend declared 0.15 0.23 0.23 0.23 0.23 per shareBook value 16.87 16.77 16.67 16.62 16.60 Common stock price: High 13.39 17.40 15.99 16.40 17.40 Low 10.49 11.50 13.97 13.97 15.69 Close 11.00 11.50 15.10 14.07 16.05 Weighted average common shares:Basic 3,507 3,503 3,499 3,496 3,493 Fully diluted 3,507 3,507 3,501 3,499 3,499 End-of-period common shares:Issued 3,617 3,611 3,606 3,606 3,605 Treasury 94 94 94 94 94 Financial Condition Data:General Total assets $ 675,862 $ 598,017 $ 606,829 $ 615,601 $ 610,398 Loans, net 518,698 506,076 514,295 511,750 496,149 Intangibles 12,320 12,320 12,320 12,320 12,320 Total deposits 551,225 501,760 512,215 520,030 516,327 Noninterest-bearing 109,985 83,431 81,934 82,613 81,249 Savings 79,150 72,174 70,358 69,186 71,100 NOW 91,166 83,323 88,126 84,207 85,130 Money Market 28,467 20,306 24,724 21,555 19,925 Time deposits 242,457 242,526 247,073 262,469 258,923 Totalinterest-bearing 441,240 418,329 430,281 437,417 435,078 depositsShareholders' equity 59,496 59,044 58,611 58,422 58,357 Asset Quality Non-performing $ 5,578 $ 4,686 $ 4,723 $ 4,923 $ 4,996 assetsNon-performingassets to total 0.83 % 0.78 % 0.78 % 0.80 % 0.82 %assetsAllowance for loan 5,025 4,566 4,576 4,559 4,444 lossesAllowance for loanlosses to total 0.96 % 0.89 % 0.88 % 0.88 % 0.89 %loansAllowance for loanlosses to 95.28 % 105.43 % 108.51 % 96.43 % 93.55 %non-performing loansNon-performing loans 1.02 % 0.86 % 0.82 % 0.92 % 0.96 %to total loansCapitalization Shareholders' equity 8.80 % 9.87 % 9.66 % 9.49 % 9.56 %to total assets