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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Elmira Savings Bank Reports 2019 Earnings

January 29, 2020 GMT

ELMIRA, N.Y., Jan. 29, 2020 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ:ESBK)

Highlights

-- Net income was $940,000 and $3,486,000 for the three and twelve months ended December 31, 2019 compared to $935,000 and $4,239,000 for the same periods in 2018.

-- Diluted earnings per share were $.27 per share and $1.00 per share for the three and twelve months ended December 31, 2019 compared to $.27 per share and $1.21 per share for the same periods in 2018.

-- Return on average assets was .61% and .57% for the three and twelve months ended December 31, 2019 compared to .65% and .75% for the same periods in 2018.

-- Return on average equity was 6.33% and 5.93% for the three and twelve months ended December 31, 2019 compared to 6.39% and 7.36% for the same periods in 2018.

“We are pleased with our loan and deposit growth in 2019 and continue to focus on improving profitability,” said Thomas M. Carr, President and CEO. Net Income

Net income totaled $3,486,000 for the twelve months ended December 31, 2019, a decrease of $753,000 or 17.8% from the $4,239,000 of net income recorded for the same period in 2018. This decrease was the net result of an increase in noninterest expense of $788,000, an increase in the provision for loan losses of $377,000, and a decrease in net interest income of $142,000, offset by an increase in noninterest income of $255,000 and a decrease in income tax expense of $299,000.

Net income totaled $940,000 for the three months ended December 31, 2019, an increase of $5,000 or .5% from the $935,000 recorded for the same period in 2018. This increase was the net result of an increase in noninterest income of $234,000 and a decrease in income tax expense of $23,000, offset by an increase in noninterest expense of $136,000, a decrease in net interest income of $66,000, and an increase in the provision for loan losses of $50,000.

Basic and diluted earnings per share for the twelve months ended December 31, 2019 were both $1.00 per share. Basic and diluted earnings per share for the twelve months ended December 31, 2018 were $1.22 and $1.21 per share. Basic and diluted earnings per share for the three months ended December 31, 2019 and 2018 were both $.27 per share.

Net Interest Margin

The net interest margin for the twelve months ended December 31, 2019 was 3.04% compared to 3.31% for the same period in 2018. The yield on average earning assets was 4.31% for the twelve months ended December 31, 2019 compared to 4.20% for the same period in 2018. The average cost of interest-bearing liabilities was 1.48% for the twelve months ended December 31, 2019 compared to 1.06% for the same period in 2018.

The net interest margin for the three months ended December 31, 2019 was 3.01% compared to 3.26% for the same period in 2018. The average yield on earning assets was 4.30% for the three months ended December 31, 2019 compared to 4.25% for the same period in 2018. The average cost of interest-bearing liabilities was 1.54% for the three months ended December 31, 2019 and 1.17% for the same period in 2018.

Assets

Total assets increased $16.8 million or 2.8% to $606.8 million at December 31, 2019 compared to $590.0 million at December 31, 2018. Cash and cash equivalents decreased by $7.5 million or 38.3% to $12.0 million at December 31, 2019 compared to $19.5 million at December 31, 2018. Loans, including loans held for sale, increased 7.6% to $520.2 million at December 31, 2019 compared to December 31, 2018. The available-for-sale investment portfolio decreased $13.2 million from December 31, 2018 to December 31, 2019.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 0.82% at December 31, 2019 from 0.94% at December 31, 2018. Net loan charge-offs to average loans for the twelve months ended December 31, 2019 of 0.11% increased from 0.10% for the twelve months ended December 31, 2018. The allowance for loan losses was 0.88% of total loans at December 31, 2019 and 0.91% of total loans at December 31, 2018.

Liabilities

Deposits total $512.2 million at December 31, 2019, an increase of $20.7 million or 4.2%. The $20.7 million increase consists of a $22.5 million increase in time deposits, a $4.6 million increase in money market accounts, and a $244,000 increase in noninterest bearing accounts, partially offset by a $5.1 million decrease in savings accounts and a $1.5 million decrease in interest bearing transaction accounts. Borrowed funds decreased by $2.0 million or 6.5%.

Shareholders’ Equity

Shareholders’ equity increased $662,000 to $58.6 million at December 31, 2019 compared to December 31, 2018. The current level of shareholders’ equity equates to a book value per share of $16.67 at December 31, 2019, compared to $16.52 at December 31, 2018. Dividends paid for common shareholders were $0.23 and $0.92 for the three and twelve months ended December 31, 2019 and $0.23 and $0.91 for the same periods 2018, after adjusting for the 5% stock dividend paid on June 15, 2018.

Elmira Savings Bank, with $606.8 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 Bank’s regulatory reports.

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

ELMIRA SAVINGS BANK CONSOLIDATED BALANCE SHEET (unaudited) (in thousands, except for share and per share data) December December 31, 31, 2019 2018 % Change - ------- - - ------- - -------- ASSETS Cash and due from banks $ 11,954 $ 19,429 -38.5 % Federal funds sold and other short-term investments 92 94 -2.1 % - ------- - - ------- - ------ - Total cash and cash equivalents 12,046 19,523 -38.3 % Securities available for sale, at fair value 11,802 25,051 -52.9 % Securities held to maturity - fair value $7,233 at December 31, 2019 and $7,638 at December 31, 2018 7,018 7,518 -6.7 % Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost 9,944 9,462 5.1 % Loans held for sale 1,354 1,392 -2.7 % Loans receivable 518,871 482,272 7.6 % Less: Allowance for loan losses 4,576 4,372 4.7 % - ------- - - ------- - ------ - Net loans 514,295 477,900 7.6 % Premises and equipment, net 16,210 16,846 -3.8 % Bank-owned life insurance 14,919 14,444 3.3 % Accrued interest receivable 1,625 1,566 3.8 % Goodwill 12,320 12,320 0.0 % Other assets 5,296 4,018 31.8 % Total assets $ 606,829 $ 590,040 2.8 % - ------- - - ------- - ------ - LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits $ 512,215 $ 491,517 4.2 % Borrowings 29,000 31,000 -6.5 % Other liabilities 7,003 9,574 -26.9 % Total liabilities 548,218 532,091 3.0 % - ------- - - ------- - ------ - Shareholders’ equity: Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares authorized; 10,000 shares issued at December 31, 2019 and at December 31, 9,700 9,700 0.0 % 2018 Common stock, $1 par value; authorized 5,000,000 shares; 3,606,089 shares issued at December 31, 2019 and 3,597,605 shares issued at December 31, 3,606 3,598 0.2 % 2018 Additional paid-in capital 53,993 53,784 0.4 % Retained earnings 3,432 3,176 8.1 % Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares at December 31, 2019 and December 31, 2018 (12,202 ) (12,202 ) 0.0 % Accumulated other comprehensive income (loss) 32 (158 ) -120.3 % Total Elmira Savings Bank shareholders’ equity 58,561 57,898 1.1 % Noncontrolling interest 50 51 -2.0 % Total shareholders’ equity 58,611 57,949 1.1 % - ------- - - ------- - ------ - Total liabilities and shareholders’ equity $ 606,829 $ 590,040 2.8 % - ------- - - ------- - ------ -

ELMIRA SAVINGS BANK CONSOLIDATED STATEMENT OF INCOME (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, --------------------------------- --------------------------------- (in thousands, except for per share 2019 2018 % 2019 2018 % data) Change Change - --------- - --------- ------- - --------- - --------- ------- Interest and dividend income: Interest and fees on loans $ 5,642 $ 5,091 10.8 % $ 21,857 $ 19,569 11.7 % Interest and dividends on securities Taxable 218 295 -26.1 % 977 1,037 -5.8 % Non-taxable 96 116 -17.2 % 427 472 -9.5 % - --------- - --------- ----- - - --------- - --------- ----- - Total interest and dividend income 5,956 5,502 8.3 % 23,261 21,078 10.4 % - --------- - --------- ----- - - --------- - --------- ----- - Interest expense: Interest on deposits 1,585 1,056 50.1 % 5,992 3,565 68.1 % Interest on borrowings 212 221 -4.1 % 841 943 -10.8 % - --------- - --------- ----- - - --------- - --------- ----- - Total interest expense 1,797 1,277 40.7 % 6,833 4,508 51.6 % - --------- - --------- ----- - - --------- - --------- ----- - Net interest income 4,159 4,225 -1.6 % 16,428 16,570 -0.9 % Provision for loan losses 200 150 33.3 % 744 367 102.7 % - --------- - --------- ----- - - --------- - --------- ----- - Net interest income after provision 3,959 4,075 -2.8 % 15,684 16,203 -3.2 % for loan losses - --------- - --------- ----- - - --------- - --------- ----- - Noninterest income: Service fees 345 371 -7.0 % 1,399 1,456 -3.9 % Gain on sale of loans held for sale 664 410 62.0 % 1,830 1,588 15.2 % Gain on sale of securities - - - 90 - - Other service fees 201 198 1.5 % 865 813 6.4 % Earnings on bank-owned life 101 95 6.3 % 385 384 0.3 % insurance Other 47 50 -6.0 % 204 277 -26.4 % - --------- - --------- ----- - - --------- - --------- ----- - Total noninterest income 1,358 1,124 20.8 % 4,773 4,518 5.6 % - --------- - --------- ----- - - --------- - --------- ----- - Noninterest expense: Salaries and benefits 2,154 2,168 -0.6 % 8,537 8,088 5.6 % Net occupancy 363 400 -9.3 % 1,562 1,596 -2.1 % Equipment 372 360 3.3 % 1,517 1,392 9.0 % Marketing and public relations 272 90 202.2 % 1,060 736 44.0 % Professional fees 213 141 51.1 % 574 541 6.1 % Other 800 879 -9.0 % 3,027 3,136 -3.5 % - --------- - --------- ----- - - --------- - --------- ----- - Total noninterest expense 4,174 4,038 3.4 % 16,277 15,489 5.1 % - --------- - --------- ----- - - --------- - --------- ----- - Income before income taxes 1,143 1,161 -1.6 % 4,180 5,232 -20.1 % Income taxes 198 221 -10.4 % 689 988 -30.3 % - --------- - --------- ----- - - --------- - --------- ----- - Net income 945 940 0.5 % 3,491 4,244 -17.7 % Less: Net income attributable to 5 5 - 5 5 - noncontrolling interest - --------- - --------- ----- - - --------- - --------- ----- - Net income attributable to Elmira 940 935 0.5 % 3,486 4,239 -17.8 % Savings Bank Dividend on preferred stock - - - - - - - --------- - --------- ----- - - --------- - --------- ----- - Income available to common $ 940 $ 935 0.5 % $ 3,486 $ 4,239 -17.8 % shareholders - --------- - --------- ----- - - --------- - --------- ----- - Basic earnings per share $ 0.27 $ 0.27 0.0 % $ 1.00 $ 1.22 -18.0 % - --------- - --------- ----- - - --------- - --------- ----- - Diluted earnings per share $ 0.27 $ 0.27 0.0 % $ 1.00 $ 1.21 -17.4 % - --------- - --------- ----- - - --------- - --------- ----- - Weighted average shares outstanding 3,498,955 3,486,535 0.4 % 3,495,089 3,479,916 0.4 % - basic - --------- - --------- ----- - - --------- - --------- ----- - Weighted average shares outstanding 3,501,487 3,499,475 0.1 % 3,500,123 3,494,218 0.2 % - diluted - --------- - --------- ----- - - --------- - --------- ----- - Dividends per share $ 0.23 $ 0.23 0.0 % $ 0.92 $ 0.91 1.1 % - --------- - --------- ----- - - --------- - --------- ----- - Share and per share data has been restated to reflect the 5% stock dividend paid on June 15, 2018.

ELMIRA SAVINGS BANK AVERAGE BALANCES AND INTEREST RATES (Dollars in Thousands) For the Three Months Ended -------------------------------------------------------------------- December 31, 2019 December 31, 2018 -------------------------------- -------------------------------- - ASSETS: Average Interest Average Rate Average Interest Average Rate Balance Balance --------- ------- ------------ - --------- ------- ------------ - Loans $ 518,297 $ 5,642 4.32 % $ 472,389 $ 5,091 4.28 % Short-term investments 730 3 1.64 520 3 2.20 Securities 30,290 311 4.09 41,536 408 3.91 Total interest-earning assets 549,317 5,956 4.30 514,445 5,502 4.25 - ------- - ----- ------------ - - ------- - ----- ------------ - Noninterest-earning assets 65,253 57,902 - ------- - ------- TOTAL ASSETS $ 614,570 $ 572,347 - ------- - ------- LIABILITIES AND SHAREHOLDERS’ EQUITY Interest-bearing deposits $ 434,491 $ 1,585 1.45 $ 400,138 $ 1,056 1.05 Borrowings 29,000 212 2.85 31,095 221 2.79 Total interest-bearing liabilities 463,491 1,797 1.54 431,233 1,277 1.17 - ------- - ----- ------------ - - ------- - ----- ------------ - Noninterest-bearing liabilities 92,138 83,083 Shareholders’ equity 58,941 58,031 - ------- - ------- TOTAL LIABILITIES AND SHAREHOLDERS’ $ 614,570 $ 572,347 EQUITY - ------- - ------- Interest rate spread 2.76 % 3.08 % ------------ - ------------ - Net interest income/margin $ 4,159 3.01 % $ 4,225 3.26 % - ----- ------------ - - ----- ------------ -

ELMIRA SAVINGS BANK AVERAGE BALANCES AND INTEREST RATES (Dollars in Thousands) For the Twelve Months Ended ---------------------------------------------------------------------- December 31, 2019 December 31, 2018 --------------------------------- --------------------------------- - ASSETS: Average Interest Average Rate Average Interest Average Rate Balance Balance --------- -------- ------------ - --------- -------- ------------ - Loans $ 500,066 $ 21,857 4.36 % $ 458,691 $ 19,569 4.25 % Short-term investments 604 12 1.93 478 8 1.65 Securities 37,183 1,392 3.74 40,693 1,501 3.68 Total interest-earning assets 537,853 23,261 4.31 499,862 21,078 4.20 - ------- - ------ ------------ - - ------- - ------ ------------ - Noninterest-earning assets 68,787 62,926 - ------- - ------- TOTAL ASSETS $ 606,640 $ 562,788 - ------- - ------- LIABILITIES AND SHAREHOLDERS’ EQUITY Interest-bearing deposits $ 430,831 $ 5,992 1.39 $ 390,407 $ 3,565 0.91 Borrowings 29,186 841 2.84 33,491 943 2.78 Total interest-bearing liabilities 460,017 6,833 1.48 423,898 4,508 1.06 - ------- - ------ ------------ - - ------- - ------ ------------ - Noninterest-bearing liabilities 87,883 81,287 Shareholders’ equity 58,740 57,603 - ------- - ------- TOTAL LIABILITIES AND SHAREHOLDERS’ $ 606,640 $ 562,788 EQUITY - ------- - ------- Interest rate spread 2.83 % 3.14 % ------------ - ------------ - Net interest income/margin $ 16,428 3.04 % $ 16,570 3.31 % - ------ ------------ - - ------ ------------ -

Quarter Ended (Dollars in Thousands, Except Per 12/31/2019 9/30/2019 6/30/2019 3/31/2019 12/31/2018 Share Data) Operating Data Net income $ 940 $ 901 $ 718 $ 927 $ 935 Net interest income 4,159 4,072 4,097 4,100 4,225 Provision for loan losses 200 250 162 132 150 Net security gains - 90 - - - Non-interest income, ex. Net 1,358 1,214 1,126 985 1,124 security gains Non-interest expense 4,174 4,043 4,206 3,854 4,038 Performance Statistics Net interest margin 3.01 % 2.97 % 3.06 % 3.13 % 3.26 % Annualized return on average 0.61 % 0.58 % 0.47 % 0.64 % 0.65 % assets Annualized return on average 6.33 % 6.07 % 4.92 % 6.41 % 6.39 % equity Annualized net loan charge-offs 0.14 % 0.11 % 0.09 % 0.10 % 0.17 % to avg loans Net charge-offs 183 135 105 117 199 Efficiency ratio 75.7 % 75.2 % 80.5 % 75.8 % 75.5 % Per Share Data Basic earnings per share $ 0.27 $ 0.26 $ 0.21 $ 0.27 $ 0.27 Diluted earnings per share 0.27 0.26 0.21 0.26 0.27 Dividend declared per share 0.23 0.23 0.23 0.23 0.23 Book value 16.67 16.62 16.60 16.59 16.52 Common stock price: High 15.99 16.40 17.40 19.09 20.47 Low 13.97 13.97 15.69 16.32 15.77 Close 15.10 14.07 16.05 16.75 17.45 Weighted average common shares: Basic 3,499 3,496 3,493 3,492 3,487 Fully diluted 3,501 3,499 3,499 3,501 3,499 End-of-period common shares: Issued 3,606 3,606 3,605 3,601 3,598 Treasury 94 94 94 94 94 Financial Condition Data: General Total assets $ 606,829 $ 615,601 $ 610,398 $ 596,613 $ 590,040 Loans, net 514,295 511,750 496,149 484,780 477,900 Intangibles 12,320 12,320 12,320 12,320 12,320 Total deposits 512,215 520,030 516,327 503,089 491,517 Noninterest-bearing 81,934 82,613 81,249 76,414 81,690 Savings 70,358 69,186 71,100 71,642 75,483 NOW 88,126 84,207 85,130 85,808 89,666 Money Market 24,724 21,555 19,925 19,405 20,087 Time deposits 247,073 262,469 258,923 249,820 224,591 Total interest-bearing deposits 430,281 437,417 435,078 426,675 409,827 Shareholders’ equity 58,611 58,422 58,357 58,231 57,949 Asset Quality Non-performing assets $ 4,723 $ 4,923 $ 4,996 $ 5,081 $ 4,649 Non-performing assets to total 0.78 % 0.80 % 0.82 % 0.85 % 0.79 % assets Allowance for loan losses 4,576 4,559 4,444 4,387 4,372 Allowance for loan losses to 0.88 % 0.88 % 0.89 % 0.90 % 0.91 % total loans Allowance for loan losses to non-performing loans 108.51 % 96.43 % 93.55 % 89.71 % 97.16 % Non-performing loans to total 0.82 % 0.92 % 0.96 % 1.01 % 0.94 % loans Capitalization Shareholders’ equity to total 9.66 % 9.49 % 9.56 % 9.76 % 9.82 % assets