STATEN ISLAND, N.Y., Jan. 31, 2023 (GLOBE NEWSWIRE) — ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today announced net income of $843 thousand, or $0.13 per share for the quarter ended December 31, 2022.
| Key Financial Data | 4Q22 Highlights | |||||||||
| Profitability Metrics | 4Q22 | 3Q22 | 4Q21 | • Net Revenues of $4.8 million including $4.4 million of net interest income and $357 thousand of non-interest income
• Net Income of $843 thousand and earnings per common share of $0.13 • Average loans increased 8.5% quarter-over-quarter with average total deposits increasing by 2.9% since prior quarter. • During the quarter ended December 31, 2022, Empire State Bank recorded a provision for loan losses of $100 thousand compared to prior quarter which no provision or benefit was recorded. The increase was driven by the increase in total loans period over period. • Total assets grew to $588 million the largest since inception of the Company in 2006. |
||||||
| Return on average assets (%) | 0.60 | % | 0.65 | % | 1.05 | % | ||||
| Return on average common equity (%) | 7.71 | % | 8.12 | % | 13.85 | % | ||||
| Return on tangible common equity (%) | 7.82 | % | 8.23 | % | 14.06 | % | ||||
| Net interest margin (%) | 3.26 | % | 3.27 | % | 3.83 | % | ||||
| Income Statement (a) | 4Q22 | 3Q22 | 4Q21 | |||||||
| Net interest income | $ | 4,404 | $ | 4,242 | $ | 5,259 | ||||
| Non-interest income | $ | 357 | $ | 266 | $ | 409 | ||||
| Net income | $ | 843 | $ | 872 | $ | 1,340 | ||||
| Earnings per share- Basic | $ | 0.13 | $ | 0.13 | $ | 0.20 | ||||
| Earnings per share- Diluted | $ | 0.12 | $ | 0.13 | $ | 0.19 | ||||
| Balance Sheet (a) | 4Q22 | 3Q22 | 4Q21 | |||||||
| Average total loans | $ | 494,728 | $ | 456,085 | $ | 429,896 | ||||
| Average total deposits | $ | 443,988 | $ | 431,600 | $ | 424,228 | ||||
| Book value per share | $ | 6.55 | $ | 6.47 | $ | 5.90 | ||||
| Tangible book value per share | $ | 6.47 | $ | 6.39 | $ | 5.82 | ||||
| (a) In thousands except for per share amounts | ||||||||||
Phil Guarnieri, Chief Executive Officer and Director of ES Bancshares, Inc. commented on the quarter stating, “We close out 2022 with healthy asset growth over the quarter and 20% loan growth year over year. This loan growth has exceeded the levels we saw at the height of the PPP program and will generate future value for years to come. Like most in the industry the Company saw pressure on the cost of funding, derived from the rapidly increasing interest rate environment, but the Company was able to maintain its net interest margin. With that said we are confident in our ability to execute our strategic plan in 2023.” Mr. Guarnieri went on to further state, “2022 was a record year for ESBS as we benefited from organic core business development which led to disciplined asset growth.”
Tom Sperzel, President, Chief Operating Officer and Director of ES Bancshares, Inc. added, “I am optimistic that with our strong underwriting standards, the local deposit market and our capital position, the balance sheet is set up to accommodate anticipated interest rate scenarios.”
Selected Balance Sheet Information
As of December 31, 2022, total assets were $587.9 million, an increase of $72.5 million, or 14.1%, as compared to total assets of $515.3 million on December 31, 2021. Loans receivable, net of allowance totaled $506.7 million, an increase of $84.5 million or 20% from December 31, 2021. The increase in loans receivable, net was attributable to higher loan originations fueled by the Bank’s investor residential product.
Asset quality remains strong with the allowance for loan loss representing 1.14% of the total loan portfolio at December 31, 2022, compared to 1.37% at December 31, 2021. Nonperforming assets, which includes nonaccrual loans and repossessed assets were $1.3 million or 0.25% of total assets, as of December 31, 2022, improving from $1.9 million or 0.38% of total assets of December 31, 2021. The ratio of nonaccrual loans to loans receivable was 0.28% and 0.45%, as of December 31, 2022, and 2021, respectively.
Total deposits increased $16.1 million, or 3.7% to $449.8 million as of December 31, 2022, when compared to December 31, 2021. This annual deposit growth is inclusive of the June 2022 sale of $67 million in deposits in conjunction with the sale of our Newburgh office, consistent with our business plan to centralize the Company’s retail market to Staten Island and the Brooklyn markets.
As of December 31, 2022, the Bank’s Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 10.11%, 14.26%, 14.26% and 15.51%, respectively, all in excess of the ratios required to be deemed "well-capitalized." As of December 31, 2022, ES Bancshares return on average equity and return on tangible equity was 7.71% and 7.82% respectively. Goodwill was $581 thousand as of December 31, 2022, and December 31, 2021.
Financial Performance Overview:
For the three months ended December 31, 2022, net income totaled $843 thousand, which reflects a decrease of $29 thousand, in comparison to $872 thousand for the three months ended September 30, 2022. The decrease resulted primarily from a provision for loan loss entry.
Net interest income for the three months ended December 31, 2022, increased $162 thousand to $4.40 million from $4.24 million at September 30, 2022. The Company’s net interest margin remained relatively unchanged, decreasing by one basis point to 3.26% for the three months ended December 31, 2022, as compared to 3.27% for the three months ended September 30, 2022. The decrease can be attributed to increased cost of funds.
There was a $100 thousand provision for loan losses entry for the three months ended December 31, 2022, compared to no entry for the three months ended September 30, 2022. Net recoveries for the three months ended December 31, 2022, totaled $1 thousand. The increase was driven by the increase in total loans period over period.
Non-interest income increased $91 thousand, to $357 thousand for the three months ended December 31, 2022, compared with non-interest income of $266 thousand for the three months ended September 30, 2022. The increase is a result from increased loan fees received.
Non-interest expense totaled $3.49 million for the three months ended December 31, 2022, compared to $3.38 million for the three months ended September 30, 2022, or an increase of 3.3%. The increase in non-interest expense can be attributed to normalized Marketing and NYS Banking & FDIC assessment fees offset by against improved Occupancy and equipment expense.
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, two Loan Production offices 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 Statement of Financial Condition (in thousands) |
||||||||
| December 31, 2022 |
September 30, 2022 |
December 31, 2021 |
||||||
| (unaudited) | (unaudited) | (Audited) | ||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 38,115 | 30,481 | 59,078 | ||||
| Securities | 16,042 | 32,622 | 11,192 | |||||
| Loans receivable, net: | ||||||||
| Real estate mortgage loans | 494,064 | 459,916 | 378,126 | |||||
| Commercial and Lines of Credit | 14,110 | 14,484 | 41,879 | |||||
| Construction Loans | – | – | 560 | |||||
| Home Equity and Consumer Loans | 466 | 668 | 5,187 | |||||
| Deferred costs | 3,953 | 3,828 | 2,353 | |||||
| Allowance for loan losses | (5,860 | ) | (5,760 | ) | (5,869 | ) | ||
| Total loans receivable, net | 506,732 | 473,136 | 422,236 | |||||
| Investment in restricted stock, at cost | 4,779 | 3,432 | 2,502 | |||||
| Bank premises and equipment, net | 6,209 | 5,776 | 6,427 | |||||
| Accrued interest receivable | 2,020 | 1,975 | 1,827 | |||||
| Goodwill | 581 | 581 | 581 | |||||
| Repossessed assets | – | 117 | – | |||||
| Bank Owned Life Insurance | 5,202 | 5,168 | 5,067 | |||||
| Other Assets | 8,175 | 8,132 | 6,408 | |||||
| Total Assets | $ | 587,855 | 561,420 | 515,318 | ||||
| Liabilities & Stockholders’ Equity | ||||||||
| Non-Interest-Bearing Deposits | 132,997 | 150,677 | 149,769 | |||||
| Interest-Bearing Deposits | 276,174 | 263,217 | 273,876 | |||||
| Brokered Deposits | 40,627 | 39,051 | 10,040 | |||||
| Total Deposits | 449,798 | 452,945 | 433,685 | |||||
| Bond Issue, net of costs | 13,666 | 13,658 | 13,627 | |||||
| Borrowed Money | 64,900 | 35,000 | 15,169 | |||||
| Other Liabilities | 15,490 | 16,665 | 13,590 | |||||
| Total Liabilities | 543,854 | 518,268 | 476,071 | |||||
| Stockholders’ equity | 44,001 | 43,152 | 39,247 | |||||
| Total liabilities and stockholders’ equity | $ | 587,855 | 561,420 | 515,318 | ||||
| ES Bancshares, Inc. Consolidated Statement of Income (in thousands) |
||||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||||
| December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
March 31, 2022 |
December 31, 2022 |
December 31, 2021 |
|||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (Audited) | |||||||||||||||
| Interest income | ||||||||||||||||||||
| Loans | $ | 5,652 | $ | 4,943 | $ | 4,672 | $ | 4,771 | $ | 20,038 | $ | 20,148 | ||||||||
| Securities | 137 | 172 | 163 | 91 | 563 | 151 | ||||||||||||||
| Other interest-earning assets | 228 | 164 | 157 | 64 | 613 | 262 | ||||||||||||||
| Total Interest Income | 6,017 | 5,279 | 4,992 | 4,926 | 21,214 | 20,561 | ||||||||||||||
| Interest expense | ||||||||||||||||||||
| Deposits | 1,068 | 643 | 347 | 294 | 2,352 | 1,342 | ||||||||||||||
| Borrowings | 545 | 394 | 274 | 271 | 1,484 | 1,338 | ||||||||||||||
| Total Interest Expense | 1,613 | 1,037 | 621 | 565 | 3,836 | 2,680 | ||||||||||||||
| Net Interest Income | 4,404 | 4,242 | 4,371 | 4,361 | 17,378 | 17,881 | ||||||||||||||
| Provision/(Benefit) for Loan Losses | 99 | – | (65 | ) | (113 | ) | (79 | ) | 670 | |||||||||||
| Net Interest Income after Pro/(Benefit) for Loan Losses | 4,305 | 4,242 | 4,436 | 4,474 | 17,457 | 17,211 | ||||||||||||||
| Non-interest income | ||||||||||||||||||||
| Deposit service charges | 91 | 84 | 88 | 84 | 347 | 464 | ||||||||||||||
| Loan fee income | 146 | 83 | 76 | 141 | 446 | 372 | ||||||||||||||
| Gain on Loan Sales | – | – | – | 241 | 241 | 343 | ||||||||||||||
| Gain on Branch Sale | – | – | 1,782 | – | 1,782 | – | ||||||||||||||
| Other | 120 | 99 | 97 | 38 | 354 | 85 | ||||||||||||||
| Total non-interest income | 357 | 266 | 2,043 | 504 | 3,170 | 1,264 | ||||||||||||||
| Non-interest expenses | ||||||||||||||||||||
| Compensation and benefits | 1,881 | 1,826 | 1,839 | 1,721 | 7,267 | 6,570 | ||||||||||||||
| Occupancy and equipment | 554 | 722 | 666 | 689 | 2,631 | 2,448 | ||||||||||||||
| Data processing service fees | 386 | 345 | 262 | 260 | 1,253 | 913 | ||||||||||||||
| Marketing | 77 | (35 | ) | 100 | 108 | 250 | 228 | |||||||||||||
| Professional fees | 179 | 194 | 205 | 255 | 833 | 672 | ||||||||||||||
| NYS Banking & FDIC Assess | 56 | 14 | 73 | 82 | 225 | 306 | ||||||||||||||
| Printing & Office Supplies | 68 | 45 | 29 | 44 | 186 | 156 | ||||||||||||||
| Insurance | 53 | 53 | 32 | 38 | 176 | 138 | ||||||||||||||
| Other | 238 | 217 | 280 | 275 | 1,010 | 1,133 | ||||||||||||||
| Total non-interest expense | 3,492 | 3,381 | 3,486 | 3,472 | 13,831 | 12,564 | ||||||||||||||
| Income prior to tax expense | 1,170 | 1,127 | 2,993 | 1,506 | 6,796 | 5,911 | ||||||||||||||
| Income taxes | 327 | 255 | 639 | 326 | 1,547 | 1,285 | ||||||||||||||
| Net Income | $ | 843 | $ | 872 | $ | 2,354 | $ | 1,180 | $ | 5,249 | $ | 4,626 | ||||||||
| For the Three Months Ended (dollars in thousands) | ||||||||||||||||||||||||
| December 31, 2022 | September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
| Avg Bal Rolling 3 Mos. |
Interest Rolling 3 Mos. |
Average Yield/ Cost |
Avg Bal Rolling 3 Mos. |
Interest Rolling 3 Mos. |
Average Yield/ Cost |
Avg Bal Rolling 3 Mos. |
Interest Rolling 3 Mos. |
Average Yield/ Cost |
||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||
| Loans receivable | $ | 494,728 | $ | 5,652 | 4.57 | % | $ | 456,085 | $ | 4,943 | 4.33 | % | $ | 429,896 | $ | 5,135 | 4.78 | % | ||||||
| Investment securities | 22,678 | 137 | 2.42 | % | 33,194 | 172 | 2.07 | % | 8,568 | 63 | 2.93 | % | ||||||||||||
| Interest-bearing deposits | 19,536 | 162 | 3.32 | % | 27,240 | 114 | 1.68 | % | 48,757 | 27 | 0.22 | % | ||||||||||||
| Restricted investment in bank stock | 3,652 | 66 | 7.20 | % | 1,691 | 50 | 11.78 | % | 2,664 | 34 | 5.11 | % | ||||||||||||
| Total interest-earning assets | 540,594 | 6,017 | 4.45 | % | 518,210 | 5,279 | 4.07 | % | 489,885 | 5,259 | 4.29 | % | ||||||||||||
| Non-interest earning assets | 17,871 | 19,798 | 19,123 | |||||||||||||||||||||
| Total assets | $ | 558,465 | $ | 538,008 | $ | 509,008 | ||||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing checking | $ | 32,065 | $ | 35 | 0.44 | % | $ | 32,736 | $ | 34 | 0.41 | % | $ | 35,051 | $ | 33 | 0.38 | % | ||||||
| Money market accounts | 7,201 | 4 | 0.25 | % | 6,589 | 3 | 0.20 | % | 10,579 | 5 | 0.19 | % | ||||||||||||
| Savings accounts | 108,170 | 221 | 0.81 | % | 134,132 | 180 | 0.53 | % | 164,896 | 122 | 0.29 | % | ||||||||||||
| Certificates of deposit | 155,086 | 808 | 2.07 | % | 117,679 | 426 | 1.44 | % | 73,457 | 110 | 0.60 | % | ||||||||||||
| Total interest-bearing deposits | 302,522 | 1,068 | 1.40 | % | 291,136 | 643 | 0.88 | % | 283,983 | 270 | 0.38 | % | ||||||||||||
| Borrowings | 40,980 | 324 | 3.14 | % | 35,000 | 173 | 1.96 | % | 19,988 | 76 | 1.51 | % | ||||||||||||
| Subordinated debenture | 13,663 | 221 | 6.42 | % | 13,655 | 221 | 6.42 | % | 13,627 | 221 | 6.43 | % | ||||||||||||
| Total interest-bearing liabilities | 357,165 | 1,613 | 1.79 | % | 339,791 | 1,037 | 1.21 | % | 317,598 | 567 | 0.71 | % | ||||||||||||
| Non-interest-bearing demand deposits | 141,466 | 140,464 | 140,244 | |||||||||||||||||||||
| Other liabilities | 16,121 | 14,803 | 12,469 | |||||||||||||||||||||
| Total non-interest-bearing liabilities | 157,587 | 155,267 | 152,713 | |||||||||||||||||||||
| Stockholders’ equity | 43,713 | 42,950 | 38,697 | |||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 558,465 | $ | 538,008 | $ | 509,008 | ||||||||||||||||||
| Net interest income | $ | 4,404 | $ | 4,242 | $ | 4,691 | ||||||||||||||||||
| Average interest rate spread | 2.66 | % | 2.86 | % | 3.58 | % | ||||||||||||||||||
| Net interest margin | 3.26 | % | 3.27 | % | 3.83 | % | ||||||||||||||||||
| Five Quarter Performance Ratio Highlights |
Three Months Ended | |||||||||||||||
| December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
March 31, 2022 |
December 31, 2021 |
||||||||||||
| Income Statement | ||||||||||||||||
| Return on Average Assets | 0.60 | % | 0.65 | % | 1.73 | % | 0.90 | % | 1.04 | % | ||||||
| Return on Average Equity | 7.71 | % | 8.12 | % | 22.83 | % | 11.78 | % | 13.82 | % | ||||||
| Return on Average Tangible Equity | 7.82 | % | 8.23 | % | 23.15 | % | 11.96 | % | 14.03 | % | ||||||
| Efficiency Ratio | 54.79 | % | 60.97 | % | 52.56 | % | 68.27 | % | 62.17 | % | ||||||
| Yields / Costs | ||||||||||||||||
| Average Yield – Interest Earning Assets | 4.45 | % | 4.07 | % | 3.82 | % | 3.95 | % | 4.29 | % | ||||||
| Cost of Funds | 1.79 | % | 1.21 | % | 0.73 | % | 0.69 | % | 0.71 | % | ||||||
| Net Interest Margin | 3.26 | % | 3.27 | % | 3.34 | % | 3.47 | % | 3.83 | % | ||||||
| Capital Ratios | ||||||||||||||||
| Equity / Assets | 7.48 | % | 7.68 | % | 7.85 | % | 7.43 | % | 7.62 | % | ||||||
| Tangible Equity / Assets | 7.39 | % | 7.59 | % | 7.75 | % | 7.33 | % | 7.50 | % | ||||||
| Tier 1 leverage ratio (a) | 10.1 | % | 10.3 | % | 9.9 | % | 10.0 | % | 9.9 | % | ||||||
| Common equity Tier I capital ratio (a) | 14.3 | % | 14.7 | % | 15.8 | % | 15.5 | % | 15.5 | % | ||||||
| Tier 1 Risk-based capital ratio (a) | 14.3 | % | 14.7 | % | 15.8 | % | 15.5 | % | 15.5 | % | ||||||
| Total Risk-based capital ratio (a) | 15.5 | % | 16.0 | % | 17.0 | % | 16.8 | % | 16.7 | % | ||||||
| Stock Valuation | ||||||||||||||||
| Book Value | $ | 6.55 | $ | 6.47 | $ | 6.37 | $ | 6.04 | $ | 5.90 | ||||||
| Tangible Book Value | $ | 6.47 | $ | 6.39 | $ | 6.28 | $ | 5.96 | $ | 5.82 | ||||||
| Shares Outstanding (b) | 6,714 | 6,666 | 6,663 | 6,663 | 6,648 | |||||||||||
| Asset Quality | ||||||||||||||||
| ALLL / Total Loans | 1.14 | % | 1.20 | % | 1.37 | % | 1.38 | % | 1.37 | % | ||||||
| Non-Performing Loans / Total Loans | 0.28 | % | 0.34 | % | 0.38 | % | 0.42 | % | 0.45 | % | ||||||
| Non-Performing Assets / Total Assets | 0.25 | % | 0.31 | % | 0.37 | % | 0.39 | % | 0.38 | % | ||||||
| (a) Ratios at Bank level (b) Shares outstanding presented in thousands |
||||||||||||||||
