Elmira Savings Bank : Reports 1st Quarter Earnings

NEWS RELEASE

For further information contact: Thomas M. Carr, President & CEO Elmira Savings Bank

333 East Water Street Elmira, New York 14901 [phone]

Elmira, New York, April 27, 2021 --- Elmira Savings Bank (NASDAQ:ESBK)

Elmira Savings Bank Reports First Quarter Earnings

Highlights

• Net income was $1,204,000 for the three months ended March 31, 2021 compared to $1,018,000 for the same period in 2020.
• Diluted earnings per share were $.34 per share for the three months ended March 31, 2021 compared to $.29 per share for the same period in 2020.
• Return on average assets was .75% for the three months ended March 31, 2021 and .68% for the same period in 2020.
• Return on average equity was 7.93% for the three months ended March 31, 2021 compared to 6.93% for the same period in 2020.

"We are pleased to report an increase in first quarter net income year-to-year, while at the same time continuing to increase our loan loss reserves in response to the continuing economic uncertainty resulting from the ongoing pandemic," said Thomas M Carr, President and CEO. Carr continued, "We continue to be concerned about the economic impact in our region from the pandemic, but we are dedicated to 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 $1,204,000 for the three months ended March 31, 2021, an increase of $186,000 or 18.3% from the $1,018,000 recorded for the same period in 2020. This increase was the net result of an increase in net interest income of $240,000 and an increase in noninterest income of $786,000, offset by an increase in the provision for loan losses of $100,000, an increase in noninterest expense of $619,000, and an increase in tax expense of $121,000.

Basic and diluted earnings per share for the three months ended March 31, 2021 were both $.34 per share compared to $.29 per share for both for the same period in 2020.

The increase in noninterest income for the three months ended March 31, 2021 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 period in 2020. The increase in noninterest expense for the three months ended March 31, 2021 reflects higher levels of salaries and benefits, occupancy expense, and other expense. The higher levels of salaries and benefits and other expense for the three months ended March 31, 2021 are in part related to higher levels of residential mortgage originations and earnings in 2021. The increase in occupancy expense relates primarily to non-recurring costs for property maintenance projects.

For the three months ended March 31, 2021, the increase in the provision for loan losses reflects management's consideration of the uncertainty of ongoing economic conditions resulting from the COVID- 19 pandemic and associated economic slowdown.

Net Interest Margin

The net interest margin for the three months ended March 31, 2021 was 3.57% compared to 3.16% for the first quarter of 2020. The yield on average earning assets was 4.29% for the three months ended March 31, 2021 compared to 4.38% for the same period in 2020. The average cost of interest-bearing liabilities was 0.79% for the three months ended March 31, 2021 compared to 1.45% for the three months ended March 31, 2020.

Assets

Total assets increased $14.7 million or 2.3% to $659.3 million at March 31, 2021 compared to $644.6 million at December 31, 2020. Loans receivable decreased 0.3% to $482.2 million at March 31, 2021 compared to December 31, 2020. The available-for-sale investment portfolio decreased $521,000 from December 31, 2020 to March 31, 2021, and cash and cash equivalents increased by $19.1 million from December 31, 2020 to March 31, 2021. The $19.1 million increase in cash resulted primarily from a $3.4 million decrease in loans, including loans held for sale, and an increase of $15.9 million in deposits.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 1.13% at March 31, 2021 and 1.07% at December 31, 2020. Net loan charge-offs to average loans for the three months ended March 31, 2021 was .03% and .05% for the three months ended March 31, 2020. The allowance for loan losses was 1.22% of total loans at March 31, 2021 and 1.19% at December 31, 2020.

Liabilities

Deposits totaled $562.9 million at March 31, 2021, an increase of $15.9 million or 2.9% from the December 31, 2020 total of $547.0 million. Borrowed funds decreased by $3.0 million from December 31, 2020 to $26.0 million at March 31, 2021.

Shareholders' Equity

Shareholders' equity increased $701,000 to $61.5 million at March 31, 2021 compared to December 31, 2020. The current level of shareholders' equity equates to a book value per share of $17.34 at March 31, 2021, compared to $17.23 at December 31, 2020. Dividends paid to common shareholders were $0.15 for the three months ended March 31, 2021 and $0.23 for the same period in 2020.

Elmira Savings Bank, with $659.3 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.