STATEN ISLAND, N.Y., Jan. 30, 2024 (GLOBE NEWSWIRE) — ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today announced financial results for the fourth quarter of 2023. The Company’s net income was $84 thousand or $0.01 per diluted share for the fourth quarter of 2023, compared to net income of $133 thousand or $0.02 per diluted share for the third quarter of 2023.
| Key Quarterly Financial Data | 2023 Annual Highlights | ||||||||||
| Profitability Metrics | 4Q23 | 3Q23 | 4Q22 | ||||||||
| Return on average assets (%) | 0.05 | % | 0.09 | % | 0.60 | % | • Net Income of $1.5 million and earnings per diluted share of $0.22. | ||||
| Return on average common equity (%) | 0.73 | % | 1.17 | % | 7.71 | % | |||||
| Return on tangible common equity (%) | 0.74 | % | 1.18 | % | 7.82 | % | |||||
| Net interest margin (%) | 2.28 | % | 2.67 | % | 3.26 | % | • Average loans increased 15.1% year-over-year with average total deposits increasing by 5.9% within the same period. | ||||
| Income Statement (a) | 4Q23 | 3Q23 | 4Q22 | ||||||||
| Net interest income | $ | 3,454 | $ | 3,977 | $ | 4,404 | • Net interest margin of 2.67% narrowed from 3.34% year-over-year as increases to the rates paid on interest-bearing liabilities outpaced the rise in yields of interest-earning assets | ||||
| Non-interest income | $ | 322 | $ | 256 | $ | 357 | |||||
| Net income | $ | 84 | $ | 133 | $ | 843 | |||||
| Earnings per share- Basic | $ | 0.01 | $ | 0.02 | $ | 0.13 | • Non-Performing Loans / Total Loans and the Company’s ratio of Non-Performing Assets / Total Assets each improved to 0.22% at December 31, 2023 | ||||
| Earnings per share- Diluted | $ | 0.01 | $ | 0.02 | $ | 0.12 | |||||
| Balance Sheet (a) | 4Q23 | 3Q23 | 4Q22 | ||||||||
| Average total loans | $ | 569,515 | $ | 555,919 | $ | 494,728 | |||||
| Average total deposits | $ | 470,394 | $ | 487,816 | $ | 43,988 | |||||
| Book value per share | $ | 6.83 | $ | 6.79 | $ | 6.55 | |||||
| Tangible book value per share | $ | 6.74 | $ | 6.71 | $ | 6.47 | |||||
| (a) In thousands except for per share amounts | |||||||||||
“While our recent returns have been impacted by the current interest rate environment, we are dedicated to analyzing, adapting, and implementing strategies that will ensure a positive trajectory for our Company. We continue to be focused on providing increased value to shareholders in the future,” said Phil Guarnieri, Director and Chief Executive Officer of ES Bancshares.
Mr. Guarnieri also stated “Looking ahead I am optimistic about the Bank’s early success seen in the fourth quarter, regarding the reduction of operating expenses and the new customer relationship wins, since the launch of our low-cost deposit gathering program. These endeavors combined with the improvements seen in the fourth quarter asset quality ratios, present a promising future for ESBS.”
Selected Balance Sheet Information:
December 31, 2023 vs. December 31, 2022
As of December 31, 2023, total assets were $639.0 million, an increase of $51.1 million, or 8.7%, as compared to total assets of $587.9 million on December 31, 2022. The increase can be attributed to loan portfolio growth primarily, funded by deposit inflows.
Loans receivable, net of Allowance for Credit Losses on Loans totaled $563.9 million, an increase of $57.2 million from December 31, 2022. As of December 31, 2023, the Allowance for Credit Losses on Loans as a percentage of gross loans was 0.89%.
Nonperforming assets, which includes nonaccrual loans and foreclosed real estate were $1.4 million or 0.22% of total assets, as of December 31, 2023, decreasing from $1.5 million or 0.25% of total assets at December 31, 2022. The ratio of nonaccrual loans to loans receivable was 0.22% and 0.28%, as of December 31, 2023, and December 31, 2022, respectively.
Total liabilities increased $49.3 million to $593.1 from $543.8 million. The majority of the increase can be attributed to deposit inflows with overall deposits growing $44.3 million, or 9.9% to $494.1 million as of December 31, 2023, compared to $449.8 million at December 31, 2022. The growth in deposits was driven by an increase in Interest-bearing deposits. Federal Home Loan Bank (“FHLB”) borrowings increased by $5.9 million or 9.1% to $70.8 million at December 31, 2023. Borrowed funds represented 11.1% of total assets at December 31, 2023, an increase of 0.1% from December 31, 2022.
As of December 31, 2023, the Bank’s Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 9.45%, 13.60%, 13.60% and 14.85%, respectively, all in excess of the ratios required to be deemed "well-capitalized." During 2023 the Company did not repurchase shares under its stock repurchase program. Book value per common share was $6.83 at December 31, 2023 compared to $6.55 at December 31, 2022. Tangible common book value per share (which represents common equity less goodwill, divided by the number of shares outstanding) was $6.74 at December 31, 2023 compared to $6.47 at December 31, 2022.
Financial Performance Overview:
Three Months Ended December 31, 2023 vs. September 30, 2023
For the three months ended December 31, 2023, net income totaled $84 thousand compared to $133 thousand for the three months ended September 30, 2023. The decrease can be attributed to a softer margin quarter over quarter.
Net interest income for the three months ended December 30, 2023, decreased $524 thousand, to $3.5 million from $4.0 million at three months ended September 30, 2023. The Company’s net interest margin compacted, decreasing by thirty-nine basis points to 2.28% for the three months ended December 31, 2023, as compared to 2.67% for the three months ended September 30, 2023. The contraction can be attributed to increased pricing pressures for retail deposits and increased average balance associated with FHLB borrowings.
There was a reversal of credit losses of $83 thousand taken back in for the three months ended December 31, 2023, compared to $86 thousand provision for credit losses entry for the three months ended September 30, 2023.
Non-interest income increased $66 thousand, to $322 thousand for the three months ended December 31, 2023, compared with non-interest income of $256 thousand for the three months ended September 30, 2023. The increase is a result from increased loan charges and fees earned quarter over quarter.
Non-interest expense totaled $3.8 million for the three months ended December 30, 2023, compared to $4.0 million for the three months ended September 30, 2023, or a decrease of 5.7%. The decrease in non-interest expense can be attributed to cost cutting initiatives. In addition, certain expenses associated with negotiated buyouts and accelerations for certain software providers that were expensed in the third quarter did not re-occur in the fourth quarter of 2023.
Year ended December 31, 2023 vs. December 31, 2022
For the year ended December 31, 2023, net income totaled $1.5 million a decrease of $3.8 million in comparison to $5.3 million for the year ended December 31, 2022. The decrease can mainly be attributed increased interest expense costs and a branch sale that occurred in the second quarter of 2022, that did not re-occur in 2023.
Net interest income for the year ended December 31, 2023, decreased $1.5 million, to $15.9 million from $17.4 million at December 31, 2022. The decrease aligns with the compression seen in the net interest margin driven by an unfavorable deposit composition shift and increased average borrowings year over year.
The Company recorded an $20 thousand provision for credit losses for the year ended December 31, 2023, compared to a $79 thousand reversal for the year ended December 31, 2022.
Non-interest income totaled $1.1 million for the year ended December 31, 2023, compared with non-interest income of $3.2 million for the year ended December 31, 2022. The decrease can be attributed to the aforementioned branch sale.
Non-interest expense totaled $15.0 million for the year ended months ended December 31, 2023, compared to $13.8 million for the year ended December 31, 2022, or an increase of $1.2 million or 8.7%. The ratio of non-interest expense to average assets was 2.43% for the year ended December 31, 2023, compared to 2.54% for the year ended December 31, 2022.
About ES Bancshares Inc.
ES Bancshares, Inc. (the “Company”) is incorporated under Maryland law and serves as the holding company for Empire State Bank (the “Bank”). The Company is subject to regulation by the Board of Governors of the Federal Reserve System (the “FRB”) while the Bank is primarily subject to regulation and supervision by the New York State Department of Financial Services. Currently, the Company does not transact any material business other than through the Bank, its subsidiary.
The Bank was organized under federal law in 2004 as a national bank regulated by the Office of the Comptroller of the Currency (OCC). The Bank’s deposits are insured up to legal limits by the FDIC. In March 2009, the Bank converted its charter to a New York State commercial bank charter. The Bank’s principal business is attracting commercial and retail deposits in New York and investing those deposits primarily in loans, consisting of commercial real estate loans, and other commercial loans including SBA and mortgage loans secured by one-to-four-family residences. In addition, the Bank invests in mortgage-backed securities (“MBS”), securities issued by the U.S. Government and agencies thereof, corporate securities and other investments permitted by applicable law and regulations.
We operate from our five Banking Center locations, a Loan Production Office and our Corporate Headquarters located in Staten Island, New York. The Company’s website address is www.esbna.com. The Company’s annual report, quarterly earnings releases and all press releases are available free of charge through its website, as soon as reasonably practicable.
Forward-Looking Statements
This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology, are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within ES Bancshares, Inc’s. control. The forward-looking statements included in this release are made only as of the date of this release. We have no intention, and do not assume any obligation, to update these forward-looking statements.
Investor Contact:
Peggy Edwards, Corporate Secretary
(845) 451-7825
| ES Bancshares, Inc. | ||||||||
| Consolidated Statements of Financial Condition | ||||||||
| (in thousands) | ||||||||
| December 31, | September 30, | December 31, | ||||||
| 2023 | 2023 | 2022 | ||||||
| |—-(unaudited)—-| | ||||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 32,728 | 29,439 | 38,115 | ||||
| Securities | 15,220 | 15,143 | 16,042 | |||||
| Loans receivable, net: | ||||||||
| Real estate mortgage loans | 551,124 | 543,852 | 493,768 | |||||
| Commercial and Lines of Credit | 13,107 | 14,322 | 14,344 | |||||
| Home Equity and Consumer Loans | 349 | 348 | 718 | |||||
| Deferred costs | 4,427 | 4,362 | 3,762 | |||||
| Allowance for Loan Credit Losses (a) | (5,086 | ) | (5,028 | ) | (5,860 | ) | ||
| Total loans receivable, net | 563,921 | 557,856 | 506,732 | |||||
| Investment in restricted stock, at cost | 5,191 | 5,782 | 4,779 | |||||
| Bank premises and equipment, net | 5,600 | 5,608 | 6,209 | |||||
| Accrued interest receivable | 2,625 | 2,533 | 2,020 | |||||
| Goodwill | 581 | 581 | 581 | |||||
| Repossessed assets | – | 164 | – | |||||
| Bank Owned Life Insurance | 5,341 | 5,305 | 5,202 | |||||
| Other Assets | 7,780 | 7,905 | 8,175 | |||||
| Total Assets | $ | 638,987 | 630,316 | 587,855 | ||||
| Liabilities & Stockholders’ Equity | ||||||||
| Non-Interest-Bearing Deposits | 109,065 | 125,562 | 129,641 | |||||
| Interest-Bearing Deposits | 328,479 | 302,509 | 279,530 | |||||
| Brokered Deposits | 56,581 | 42,873 | 40,627 | |||||
| Total Deposits | 494,125 | 470,944 | 449,798 | |||||
| Borrowed Money | 70,805 | 83,980 | 64,900 | |||||
| Bond Issue, net of costs | 13,708 | 13,701 | 13,666 | |||||
| Other Liabilities | 14,487 | 16,085 | 15,490 | |||||
| Total Liabilities | 593,125 | 584,710 | 543,854 | |||||
| Stockholders’ equity | 45,862 | 45,606 | 44,001 | |||||
| Total liabilities and stockholders’ equity | $ | 638,987 | 630,316 | 587,855 | ||||
| (a) The Company adopted ASC 326- Current Expected Credit Losses (CECL) effective 1/1/2023 resulting in a recapture of reserve through Retained Earnings |
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| ES Bancshares, Inc. | |||||||||||||||||
| Consolidated Statements of Income | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Three Months Ended | Years Ended | ||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||
| |————–(unaudited)————–| | |—(unaudited)—| | ||||||||||||||||
| Interest income | |||||||||||||||||
| Loans | $ | 7,059 | $ | 6,715 | $ | 5,652 | $ | 26,343 | $ | 20,038 | |||||||
| Securities | 110 | 111 | 137 | 446 | 563 | ||||||||||||
| Other interest-earning assets | 278 | 319 | 228 | 1,418 | 613 | ||||||||||||
| Total Interest Income | 7,447 | 7,145 | 6,017 | 28,207 | 21,214 | ||||||||||||
| Interest expense | |||||||||||||||||
| Deposits | 2,945 | 2,459 | 1,068 | 9,052 | 2,352 | ||||||||||||
| Borrowings | 1,048 | 710 | 545 | 3,268 | 1,484 | ||||||||||||
| Total Interest Expense | 3,993 | 3,169 | 1,613 | 12,320 | 3,836 | ||||||||||||
| Net Interest Income | 3,454 | 3,977 | 4,404 | 15,887 | 17,378 | ||||||||||||
| (Reversal of)Prov for Credit Losses | (83 | ) | 86 | 99 | 20 | (79 | ) | ||||||||||
| Net Interest Income after (Revrsl)Prov for Credit Losses | 3,537 | 3,891 | 4,305 | 15,867 | 17,457 | ||||||||||||
| Non-interest income | |||||||||||||||||
| Service charges and fees | 254 | 205 | 237 | 762 | 793 | ||||||||||||
| Gain on loan sales | 30 | 12 | – | 168 | 241 | ||||||||||||
| Gain on sale of repossessed assets | – | – | – | – | 206 | ||||||||||||
| Gain on sale of banking center | – | – | – | – | 1,782 | ||||||||||||
| Other | 38 | 39 | 120 | 149 | 148 | ||||||||||||
| Total non-interest income | 322 | 256 | 357 | 1,080 | 3,170 | ||||||||||||
| Non-interest expenses | |||||||||||||||||
| Compensation and benefits | 1,745 | 1,856 | 1,881 | 7,408 | 7,267 | ||||||||||||
| Occupancy and equipment | 646 | 729 | 554 | 2,656 | 2,631 | ||||||||||||
| Data processing service fees | 357 | 397 | 386 | 1,396 | 1,181 | ||||||||||||
| Professional fees | 357 | 315 | 179 | 1,104 | 833 | ||||||||||||
| FDIC & NYS Banking Assessments | 88 | 71 | 56 | 272 | 225 | ||||||||||||
| Advertising | 101 | 107 | 77 | 406 | 250 | ||||||||||||
| Insurance | 51 | 54 | 53 | 190 | 176 | ||||||||||||
| Printing & Office Supplies | 27 | 31 | 68 | 154 | 186 | ||||||||||||
| Other | 378 | 415 | 238 | 1,449 | 1,082 | ||||||||||||
| Total non-interest expense | 3,750 | 3,975 | 3,492 | 15,035 | 13,831 | ||||||||||||
| Income prior to tax expense | 109 | 172 | 1,170 | 1,912 | 6,796 | ||||||||||||
| Income taxes | 25 | 39 | 327 | 440 | 1,547 | ||||||||||||
| Net Income | $ | 84 | $ | 133 | $ | 843 | $ | 1,472 | $ | 5,249 | |||||||
| ES Bancshares, Inc. | ||||||||||||||||||||||||||||
| Average Balance Sheet Data | ||||||||||||||||||||||||||||
| For the Three Months Ended (dollars in thousands) | ||||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||
| Avg Bal | Interest | Avg Bal | Interest | Avg Bal | Interest | |||||||||||||||||||||||
| Rolling | Rolling | Average | Rolling | Rolling | Average | Rolling | Rolling | Average | ||||||||||||||||||||
| Assets | 3 Mos. | 3 Mos. | Yield/Cost | 3 Mos. | 3 Mos. | Yield/Cost | 3 Mos. | 3 Mos. | Yield/Cost | |||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||
| Loans receivable | $ | 569,515 | $ | 7,059 | 4.96 | % | $ | 555,919 | $ | 6,715 | 4.83 | % | $ | 494,728 | $ | 5,652 | 4.57 | % | ||||||||||
| Investment securities | 15,957 | 110 | 2.75 | % | 16,151 | 111 | 2.75 | % | 22,678 | 137 | 2.42 | % | ||||||||||||||||
| Interest bearing deposits | 14,716 | 154 | 4.09 | % | 20,260 | 231 | 4.56 | % | 19,536 | 162 | 3.32 | % | ||||||||||||||||
| Restricted investment in bank stock | 5,412 | 124 | 9.18 | % | 4,273 | 88 | 8.24 | % | 3,652 | 66 | 7.20 | % | ||||||||||||||||
| Total interest-earning assets | 605,600 | 7,447 | 4.92 | % | 596,602 | 7,145 | 4.79 | % | 540,594 | 6,017 | 4.45 | % | ||||||||||||||||
| Non-interest earning assets | 16,840 | 17,371 | 17,871 | |||||||||||||||||||||||||
| Total assets | $ | 622,440 | $ | 613,973 | $ | 558,465 | ||||||||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||
| Interest-bearing checking | $ | 25,368 | $ | 23 | 0.36 | % | $ | 29,162 | $ | 28 | 0.38 | % | $ | 32,065 | $ | 35 | 0.44 | % | ||||||||||
| Money market accounts | 2,651 | 3 | 0.38 | % | 4,060 | 4 | 0.42 | % | 7,201 | 4 | 0.25 | % | ||||||||||||||||
| Savings accounts | 120,990 | 881 | 2.89 | % | 117,790 | 532 | 1.79 | % | 108,170 | 221 | 0.81 | % | ||||||||||||||||
| Certificates of deposit | 207,091 | 2,037 | 3.90 | % | 212,094 | 1,895 | 3.54 | % | 155,086 | 808 | 2.07 | % | ||||||||||||||||
| Total interest-bearing deposits | 356,101 | 2,945 | 3.28 | % | 363,105 | 2,459 | 2.69 | % | 302,522 | 1,068 | 1.40 | % | ||||||||||||||||
| Borrowings | 76,844 | 827 | 4.27 | % | 51,557 | 488 | 3.76 | % | 40,980 | 324 | 3.14 | % | ||||||||||||||||
| Subordinated debenture | 13,705 | 221 | 6.40 | % | 13,695 | 222 | 6.41 | % | 13,663 | 221 | 6.42 | % | ||||||||||||||||
| Total interest-bearing liabilities | 446,649 | 3,993 | 3.55 | % | 428,357 | 3,168 | 2.93 | % | 357,165 | 1,613 | 1.79 | % | ||||||||||||||||
| Non-interest-bearing demand deposits | 114,293 | 124,711 | 141,466 | |||||||||||||||||||||||||
| Other liabilities | 15,803 | 15,348 | 16,121 | |||||||||||||||||||||||||
| Total non-interest-bearing liabilities | 130,096 | 140,059 | 157,587 | |||||||||||||||||||||||||
| Stockholders’ equity | 45,695 | 45,557 | 43,713 | |||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 622,440 | $ | 613,973 | $ | 558,465 | ||||||||||||||||||||||
| Net interest income | $ | 3,454 | $ | 3,977 | $ | 4,404 | ||||||||||||||||||||||
| Average interest rate spread | 1.37 | % | 1.86 | % | 2.66 | % | ||||||||||||||||||||||
| Net interest margin | 2.28 | % | 2.67 | % | 3.26 | % | ||||||||||||||||||||||
| Five Quarter Performance Ratio Highlights |
Three Months Ended | ||||||||||||||
| December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||
| Income Statement | |||||||||||||||
| Return on Average Assets | 0.05 | % | 0.09 | % | 0.42 | % | 0.40 | % | 0.60 | % | |||||
| Return on Average Equity | 0.73 | % | 1.17 | % | 5.81 | % | 5.40 | % | 7.71 | % | |||||
| Return on Average Tangible Equity | 0.74 | % | 1.18 | % | 5.89 | % | 5.47 | % | 7.82 | % | |||||
| Efficiency Ratio | 99.31 | % | 93.89 | % | 80.86 | % | 82.42 | % | 75.03 | % | |||||
| Yields / Costs | |||||||||||||||
| Average Yield – Interest Earning Assets | 4.92 | % | 4.79 | % | 4.70 | % | 4.54 | % | 4.45 | % | |||||
| Cost of Funds | 3.55 | % | 2.93 | % | 2.53 | % | 2.38 | % | 1.79 | % | |||||
| Net Interest Margin | 2.28 | % | 2.67 | % | 2.86 | % | 2.89 | % | 3.26 | % | |||||
| Capital Ratios | |||||||||||||||
| Equity / Assets | 7.18 | % | 7.24 | % | 7.24 | % | 7.01 | % | 7.48 | % | |||||
| Tangible Equity / Assets | 7.09 | % | 7.15 | % | 7.15 | % | 6.92 | % | 7.39 | % | |||||
| Tier I leverage ratio (a) | 9.45 | % | 9.54 | % | 9.40 | % | 9.65 | % | 10.11 | % | |||||
| Common equity Tier I capital ratio (a) | 13.60 | % | 13.47 | % | 13.67 | % | 13.87 | % | 14.26 | % | |||||
| Tier 1 Risk-based capital ratio (a) | 13.60 | % | 13.47 | % | 13.67 | % | 13.87 | % | 14.26 | % | |||||
| Total Risk-based capital ratio (a) | 14.85 | % | 14.63 | % | 14.92 | % | 15.12 | % | 15.51 | % | |||||
| Stock Valuation | |||||||||||||||
| Book Value | $ | 6.83 | $ | 6.79 | $ | 6.77 | $ | 6.67 | $ | 6.55 | |||||
| Tangible Book Value | $ | 6.74 | $ | 6.71 | $ | 6.68 | $ | 6.59 | $ | 6.47 | |||||
| Shares Outstanding (b) | 6,714 | 6,714 | 6,714 | 6,714 | 6,714 | ||||||||||
| Asset Quality | |||||||||||||||
| ACL / Total Loans | 0.89 | % | 0.89 | % | 0.89 | % | 0.90 | % | 1.14 | % | |||||
| Non Performing Loans / Total Loans | 0.22 | % | 0.25 | % | 0.25 | % | 0.17 | % | 0.28 | % | |||||
| Non Performing Assets / Total Assets | 0.22 | % | 0.25 | % | 0.25 | % | 0.19 | % | 0.25 | % | |||||
| (a) Ratios at Bank level (b) Shares information presented in thousands | |||||||||||||||
