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Elmira Savings Bank Reports First Quarter Earnings


April 22, 2014 - Elmira, NY

Elmira Savings Bank (NASDAQ: ESBK)

Highlights

  • Net income was $1,060,000 for the three months ended March 31, 2014 compared to $1,192,000 for the same period in 2013. Income available to common shareholders after dividends on preferred stock increased 5.6% to $835,000 for the three months ended March 31, 2014 compared to $791,000 for the same period in 2013.

  • Diluted earnings per share was $.30 per share for the three months ended March 31, 2014 compared to $.29 per share for the same period in 2013. This represents an increase of 3.4% for the three months ended March 31, 2014 compared to the same period in 2013.

  • Return on average assets was .84% for the three months ended March 31, 2014 compared to .91% for the same period in 2013.

  • Return on average equity was 7.82% for the three months ended March 31, 2014 compared to 7.26% for the same period in 2013.

"We are pleased to report a 5.6% increase in income available to common shareholders for the first quarter of 2014, compared to the same period in 2013, despite slightly lower net income," said Thomas M. Carr, President and Chief Operating Officer. Carr continued, "Our decision to retire preferred shares in 2013 has greatly reduced our level of preferred dividend payments, benefiting our common shareholders who were also rewarded with a $.23, or 4% annualized, common dividend in the first quarter."

Net Income

Net income totaled $1,060,000 for the three months ended March 31, 2014, a decrease of $132,000 or 11.1% from the $1,192,000 recorded for the same period in 2013. This decrease was the net result of a decline in noninterest income of $196,000 and an increase in noninterest expense of $187,000, partially offset by an increase of $74,000 in net interest income, a reduction in the provision for loan losses of $126,000, and a reduction in tax expense of $51,000.

Basic and diluted earnings per share for the three months ended March 31, 2014 were $.31 per share and $.30 per share compared to $.31 per share and $.29 per share for the same period in 2013.

Net Interest Margin

The net interest margin for the three months ended March 31, 2014 was 3.31% compared to 3.32% for the first quarter of 2013. The yield on average earning assets was 4.34% for the three months ended March 31, 2014 compared to 4.46% for the same period in 2013. The average cost of interest-bearing liabilities was 1.22% for the three months ended March 31, 2014 compared to 1.32% for the three months ended March 31, 2013.

Assets

Total assets decreased $387,000 or 0.1% to $513.9 million at March 31, 2014 compared to $514.3 million at December 31, 2013. Loans receivable increased 0.8% to $392.1 million at March 31, 2014 compared to December 31, 2013. The available-for-sale investment portfolio decreased $5.8 million from December 31, 2013 to March 31, 2014.

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to .82% at March 31, 2014 from .90% at December 31, 2013. Net loan charge-offs to average loans for the three months ended March 31, 2014 of .04% decreased from .06% for the twelve months ended December 31, 2013. The allowance for loan losses was .98% of total loans at March 31, 2014 and .99% at December 31, 2013.

Liabilities

Deposits totaled $395.0 million at March 31, 2014, reflecting a decrease of $2.8 million or .7%. Borrowed funds increased by $3.3 million or 5.8%.

Shareholders' Equity

Shareholders' equity increased $738,000 to $54.8 million at March 31, 2014 compared to December 31, 2013. The current level of shareholders' equity equates to a book value per share of $16.78 at March 31, 2014, compared to $16.64 at December 31, 2013. Dividends paid to common shareholders were $0.23 for the three months ended March 31, 2014 compared to $0.21 for the same period in 2013, representing an increase of 9.5%.

Elmira Savings Bank, with $513.9 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a state-chartered bank with six offices in Chemung County, NY; three offices and a loan center 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 Cortland County, NY; 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.




ELMIRA SAVINGS BANK
CONSOLIDATED BALANCE SHEET
(unaudited)

(in thousands, except for share and per
share data) March 31, December 31,
---------- ------------ --------
2014 2013 % Change
---------- ------------ --------
ASSETS

Cash and due from banks $ 9,379 $ 7,077 32.5%
Federal funds sold and other short-term
investments 530 564 -6.0%
---------- ------------ --------
Total cash and cash equivalents 9,909 7,641 29.7%

Securities available for sale, at fair
value 57,688 63,464 -9.1%
Securities held to maturity - fair value
$8,235 at March 31, 2014, and $8,302 at
December 31, 2013 7,742 7,805 -0.8%
Federal Reserve and Federal Home Loan
Bank (FHLB) stock, at cost 10,433 10,417 0.2%

Loans held for sale 1,291 1,847 -30.1%

Loans receivable 392,146 389,129 0.8%
Less: Allowance for loan losses 3,851 3,834 0.4%
---------- ------------ --------
Net loans 388,295 385,295 0.8%

Premises and equipment, net 9,202 8,620 6.8%
Bank-owned life Insurance 12,477 12,387 0.7%
Accrued interest receivable 1,520 1,454 4.5%
Intangible assets, net 188 210 -10.5%
Goodwill 12,320 12,320 0.0%
Other assets 2,873 2,865 0.3%
---------- ------------ --------
Total assets $ 513,938 $ 514,325 -0.1%
========== ============ ========

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits $ 394,951 $ 397,733 -0.7%
Borrowings 59,800 56,500 5.8%
Other liabilities 4,424 6,067 -27.1%
---------- ------------ --------
Total liabilities 459,175 460,300 -0.2%
---------- ------------ --------

Shareholders' equity:
Preferred stock, $1,000 liquidation
value per issued share; 5,000,000
shares authorized; 10,000 shares issued
at March 31, 2014 and at December 31,
2013 9,700 9,700 0.0%
Common stock, $1 par value; authorized
5,000,000 shares; 2,786,504 shares
issued at March 31, 2014 and 2,776,240
shares issued at December 31, 2013 2,787 2,776 0.4%
Additional paid-in capital 41,896 41,693 0.5%
Retained earnings 2,703 2,485 8.8%
Treasury stock, at cost - 104,418 shares
at March 31, 2014 and 116,268 shares at
December 31, 2013 (3,053) (3,327) -8.2%
Accumulated other comprehensive income 676 644 5.0%
---------- ------------ --------
Total Elmira Savings Bank
shareholders' equity 54,709 53,971 1.4%
Noncontrolling interest 54 54 0.0%
---------- ------------ --------
Total shareholders' equity 54,763 54,025 1.4%
---------- ------------ --------
Total liabilities and shareholders'
equity $ 513,938 $ 514,325 -0.1%
========== ============ ========



ELMIRA SAVINGS BANK
CONSOLIDATED STATEMENT OF INCOME
(unaudited)

Three Months Ended
March 31,
----------------------- ----------
(in thousands, except for per share
data) 2014 2013 % Change
----------- ----------- ----------

Interest and dividend income:
Interest and fees on loans $ 4,397 $ 4,473 -1.7%
Interest and dividends on securities
Taxable 464 447 3.8%
Non-taxable 204 185 10.3%
----------- ----------- ----------
Total interest and dividend income 5,065 5,105 -0.8%
----------- ----------- ----------

Interest expense:
Interest on deposits 742 829 -10.5%
Interest on borrowings 450 477 -5.7%
----------- ----------- ----------
Total interest expense 1,192 1,306 -8.7%
----------- ----------- ----------
Net interest income 3,873 3,799 1.9%
Provision for loan losses 54 180 -70.0%
----------- ----------- ----------
Net interest income after provision for
loan losses 3,819 3,619 5.5%
----------- ----------- ----------

Noninterest income:
Service fees 329 316 4.1%
Gain on sale of loans held for sale 448 848 -47.2%
Gain on sale of securities 216 61 254.1%
Other service fees 164 154 6.5%
Earnings on bank-owned life Insurance 91 90 1.1%
Other 41 16 156.3%
----------- ----------- ----------
Total noninterest income 1,289 1,485 -13.2%
----------- ----------- ----------

Noninterest expense:
Salaries and benefits 1,839 1,821 1.0%
Net occupancy 416 325 28.0%
Equipment 250 259 -3.5%
Marketing and public relations 200 147 36.1%
Professional fees 161 169 -4.7%
Other 697 655 6.4%
----------- ----------- ----------
Total noninterest expense 3,563 3,376 5.5%
----------- ----------- ----------
Income before income taxes 1,545 1,728 -10.6%
Income taxes 485 536 -9.5%
----------- ----------- ----------
Net income 1,060 1,192 -11.1%
Less: Net income attributable to
noncontrolling interest - - -
----------- ----------- ----------

Net income attibutable to Elmira Savings
Bank 1,060 1,192 -11.1%

Dividend on preferred stock 225 401 -43.9%
----------- ----------- ----------
Income available to common shareholders $ 835 $ 791 5.6%
=========== =========== ==========


Basic earnings per share $ 0.31 $ 0.31 0.0%
=========== =========== ==========

Diluted earnings per share $ 0.30 $ 0.29 3.4%
=========== =========== ==========

Weighted average shares outstanding -
basic 2,657,141 2,568,005 3.5%
=========== =========== ==========

Weighted average shares outstanding -
diluted 2,789,840 2,718,478 2.6%
=========== =========== ==========

Dividends per share $ 0.23 $ 0.21 9.5%
=========== =========== ==========


Per share data has been restated to reflect the 10% stock dividend paid on
December 27, 2013.



ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES

(Dollars in
Thousands) For the Three Months Ended
------------------------------------------------------
March 31, 2014 March 31, 2013
-------------------------- --------------------------
Average Average Average Average
ASSETS: Balance Interest Rate Balance Interest Rate
--------- -------- ------- --------- -------- -------
Loans $ 388,765 $ 4,397 4.54% $ 376,910 $ 4,473 4.77%
Short-term
investments 510 1 0.04 2,595 - 0.04
Securities 79,547 667 3.37 80,592 632 3.15
--------- -------- ------- --------- -------- -------
Total interest-
earning assets 468,822 5,065 4.34 460,097 5,105 4.46
--------- -------- ------- --------- -------- -------

Noninterest-earning
assets 42,488 70,022
--------- ---------

TOTAL ASSETS $ 511,310 $ 530,119
========= =========

LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
deposits $ 335,489 $ 742 0.90 $ 343,753 $ 829 0.98
Borrowings 58,413 450 3.08 54,000 477 3.53
--------- -------- ------- --------- -------- -------
Total interest-
bearing liabilities 393,902 1,192 1.22 397,753 1,306 1.32
--------- -------- ------- --------- -------- -------

Noninterest-bearing
liabilities 62,456 65,747
Shareholders' equity 54,952 66,619
--------- ---------

TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY $ 511,310 $ 530,119
========= =========
Interest rate spread 3.12% 3.14%
======= =======
Net interest
income/margin $ 3,873 3.31% $ 3,799 3.32%
======== ======= ======== =======



Quarter Ended
(Dollars in
Thousands, Except
Per Share Data) 3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
--------- ---------- --------- --------- ---------
Operating Data

Net income $ 1,060 $ 1,119 $ 1,369 $ 1,374 $ 1,192
Net interest income 3,873 3,772 3,770 3,712 3,799
Provision for loan
losses 54 - 50 85 180
Net security gains 216 - - - 61
Non-interest
income, ex. Net
security gains 1,073 1,179 1,474 1,419 1,424
Non-interest
expense 3,563 3,573 3,428 3,485 3,376

Performance
Statistics

Net interest margin 3.31% 3.22% 3.23% 3.24% 3.32%
Annualized return
on average assets 0.84% 0.85% 1.05% 1.07% 0.91%
Annualized return
on average equity 7.82% 7.75% 9.55% 9.67% 7.26%
Annualized net loan
charge-offs to avg
loans 0.04% -0.02% 0.04% 0.00% 0.21%
Net charge-offs
(recoveries) 38 (15) 40 - 196
Efficiency ratio 69.0% 72.2% 65.4% 67.9% 63.9%

Per Share Data

Basic earnings per
share $ 0.31 $ 0.32 $ 0.42 $ 0.42 $ 0.31
Diluted earnings
per share 0.30 0.30 0.40 0.40 0.29
Dividend declared
per share 0.23 0.21 0.21 0.21 0.21
Book value 16.78 16.64 16.62 16.44 16.47
Common stock price:
High 26.97 28.45 22.73 23.93 23.05
Low 22.25 20.15 19.30 18.18 20.67
Close 24.49 25.20 22.07 19.59 23.05
Weighted average
common shares:
Basic 2,657 2,639 2,626 2,620 2,569
Fully diluted 2,790 2,764 2,745 2,741 2,718
End-of-period
common shares:
Issued 2,787 2,776 2,775 2,771 2,761
Treasury 104 116 116 116 116

Share and per share data has been restated to reflect the 10% stock
dividend paid on December 27, 2013.

Financial Condition Data:
General
Total assets $ 513,938 $ 514,325 $ 519,747 $ 516,137 $ 510,915
Loans, net 388,295 385,295 381,298 380,252 370,753
Intangibles 12,508 12,530 12,555 12,582 12,609
Total deposits 394,951 397,733 396,600 396,993 395,091

Noninterest-
bearing 57,059 59,886 62,616 61,018 58,118

Savings 61,655 60,924 60,710 61,918 60,177
NOW 75,789 77,736 72,076 71,894 71,472
Money Market 21,540 21,130 22,465 20,826 19,222
Time deposits 178,908 178,057 178,733 181,337 186,102
Total interest-
bearing deposits 337,892 337,847 333,984 335,975 336,973

Shareholders'
equity 54,763 54,025 57,290 56,745 56,677

Asset Quality

Non-performing
assets $ 3,368 $ 3,592 $ 3,302 $ 3,575 $ 3,826
Non-performing
assets to total
assets 0.66% 0.70% 0.64% 0.69% 0.75%
Allowance for loan
losses 3,851 3,834 3,819 3,809 3,724
Allowance for loan
losses to total
loans 0.98% 0.99% 0.99% 0.99% 0.99%
Allowance for loan
losses to non-
performing loans 119.23% 109.73% 115.66% 106.55% 100.95%
Non-performing
loans to total
loans 0.82% 0.90% 0.86% 0.93% 0.99%

Capitalization

Shareholders'
equity to total
assets 10.66% 10.50% 11.02% 10.99% 11.09%

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For further information contact:
Thomas M. Carr
President & COO
Elmira Savings Bank
333 East Water Street
Elmira, New York 14901
(607) 735-8660
Email Contact

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