ISLANDIA, N.Y., Jan. 21, 2011 /PRNewswire/ -- Empire National Bank (OTBQB: EMPK), today announced fourth quarter and year end results for 2010. Highlights for the quarter and the year include:
-- Net Income of $1.9 million or $0.46 per share for the year ended December 31, 2010. -- A $7.4 million increase in annual net income from a loss of $5.5 million for the year ended December 31, 2009. -- Net Income of $1.2 million or $0.28 per share for the three months ended December 31, 2010. -- A $3.0 million increase in quarterly net income from a loss of $1.8 million for the three months ended December 31, 2009. -- Fourth consecutive quarter of net income. -- Total Assets of $328.1 million at December 31, 2010, an increase of $76.3 million, or 30.3%, compared to the prior year end. -- Total Loans outstanding of $218.5 million at December 31, 2010, an increase of $15.3 million, or 7.5%, compared to the prior year end. -- Strong Asset Quality: -- Allowance for Loan Losses at 1.93% of total loans. -- Non-performing loans at 1.02% of total loans, as compared to 1.19% at December 31, 2009. -- Well Capitalized at year end -- Tier 1 Leverage Capital of 9.47% -- Tier 1 Risk-Based Capital of 13.35% -- Total Risk-Based Capital of 14.61%
Douglas C. Manditch, Chairman and Chief Executive Officer stated, "As we near our third anniversary, we are very pleased with the performance of the bank. The current economy has brought challenges to many Long Island businesses, as it has done so nationally. We are proud of our asset growth, strong asset quality and profitability in 2010, despite the economic challenges." Mr. Manditch further stated, "Our business model is simple, yet effective. We are a company focused on customer service, building relationships one customer at a time, and our performance through year end reflects the success of our model."
"Furthermore, our credit quality remains strong. As of December 31, 2010, we had one non-performing loan in the amount $2.2 million that has been restructured and is well-collateralized, and one other 60 day past due loan totaling $60,000. Our capital remains strong with ratios that are in excess of the regulatory definition of a 'well capitalized' institution. Our liquidity, as measured by our net funding availability as a percentage of total earning assets, of 41.58% provides us the flexibility of mitigating any significant fluctuations in our funding needs."
Earnings
Net income was $1.9 million, or $0.46 per share, for the year ended 2010, compared to a loss of $5.5 million for the year ended 2009, an increase of $7.4 million. The increase in net income is primarily attributable to an increase in net interest income of $4.7 million and an increase in net securities gains of $1.7 million, coupled with a decrease in the bank's provision for loan losses of $2.0 million. Total other expenses increased by $1.0 million to $10.7 million for the year ended 2010.
The increase in net interest income of $4.7 million is primarily attributable to an increase in the average balance of interest earning assets of $124.9 million. The bank's net interest margin was 3.85% for the year ended December 31, 2010, a decrease of 12 basis points from the same period in 2009, due to a decrease in the bank's yield on interest bearing assets of 33 basis points from 5.17% to 4.84% in 2010, which was partially offset by a decrease in the bank's cost of interest bearing liabilities of 41 basis points from 1.65% to 1.24% in 2010. The decrease in average yield was due primarily to an increase in the relative amount of investment securities, as a percentage of the bank's total interest earning assets.
The net securities gains of $1.8 million in 2010 reflect management's continued assessment of market opportunities within the securities portfolio to increase capital while enhancing future earnings of the bank. The decrease in the provision for loan losses in 2010 compared to 2009 of $2.0 million reflects the slower loan growth experienced in 2010, as compared to 2009, combined with the continued strength and performance of the loan portfolio. The allowance for loan losses was 1.93% of total loans at December 31, 2010.
The bank's efficiency ratio decreased by 48.3% from 140.4% to 92.0% as the bank maintained its high quality of service for an increasing number of customers with the same complement of staff. "With our technology and staff investments made during our de novo years, we are confident that we can continue to grow the bank without any substantial increase in our operating expenses," remarked Thomas Buonaiuto, President and Chief Operating Officer.
Balance Sheet and Asset Quality
Total assets were $328.1 million at December 31, 2010, reflecting a $76.3 million increase from the prior year end. The growth in total assets was primarily attributable to an increase of $58.7 million in securities available for sale to $92.7 million at December 31, 2010. Loans increased by $15.3 million to $218.5 million at December 31, 2010. The lower level of loan growth during 2010 as compared to 2009 was a result of several factors, including the need for the bank to maintain higher levels of capital in proportion to total loans. Furthermore, loan demand remained weak as potential borrowers continued to remain cautious about current economic conditions and the quality of loan requests decreased. The increase in the securities available for sale reflected management's intent to maximize total earning assets, while diversifying its asset mix.
Non-performing assets declined $0.2 million from the prior year to $2.2 million at December 31, 2010. As of December 31, 2010, the bank had one non-performing loan that had been restructured and was well-collateralized and one other 60 day past due loan totaling $60,000. Non-performing loans, at 1.02% of total loans, remain below that of the bank's peers. The bank increased its allowance for loan losses during 2010 by $0.7 million, from $3.5 million to $4.2 million, which increased the allowance to 1.93% of total loans at December 31, 2010 from the prior year of 1.70%.
Total deposits increased in 2010 by $50.8 million, or 25.2%, from $201.4 million to $252.2 million as deposits significantly outpaced our loan growth. At December 31, 2010, the bank's loan to deposit ratio was 86.6%. Demand deposits, which represent a valuable funding source, increased 19.9% from $31.7 million to $38.0 million. Average demand deposits increased $11.0 million or 38.9%, from $28.3 million in 2009 to $39.3 million in 2010. Significant increases in deposit growth and market share occurred in all three of the bank's branch locations: Islandia, Shirley and Port Jefferson Station. Savings, NOW and money market deposits increased $32.3 million, or 35.3%, to $123.7 million at December 31, 2010. Certificates of deposit of $100,000 or more decreased by $2.0 million, while other time deposits increased by $14.1 million.
Stockholders' equity grew from $29.0 million to $30.0 million during 2010. The net increase was the result of net income of $1.9 million offset by a decrease in accumulated other comprehensive income of $1.2 million, which reflects the unrealized loss in the securities portfolio at December 31, 2010. At December 31, 2010, the bank was 'well capitalized' as defined by OCC regulation, with leverage, Tier 1 risk-based and total risk-based capital ratios of 9.47%, 13.35% and 14.61%, respectively.
Opportunities and Challenges
In 2010, the bank continued to refine its business model and build upon its primary core competency of serving the financial needs of small and medium sized businesses, professionals, nonprofit organizations, real estate investors, and consumers. With thousands of small to medium-sized businesses in its geographic footprint, the bank will continue to offer the community, banking products and services shaped by emerging ideas and technologies, combined with time-honored values of trust and integrity; to provide the highest quality service with a sense of urgency.
On October 21, 2010, the bank entered into a formal agreement with the Office of the Comptroller of the Currency, which was disclosed within the bank's Form 10-Q for the quarter ended September 30, 2010. As of this date, the bank believes the necessary actions have been taken to address the matters outlined in the agreement.
Balance Sheet (unaudited) (dollars in thousands) December 31, December 31, 2010 2009 ------------- ------------- ASSETS Cash and cash equivalents $7,853 $4,396 Securities available for sale, at fair value 92,696 33,975 Securities, restricted 3,263 1,781 Loans 218,488 203,202 Less: Allowance for loan losses (4,216) (3,465) ------ ------ Loans, net 214,272 199,737 Premises and equipment, net 7,590 8,235 Other assets and accrued interest receivable 2,385 3,675 ----- ----- Total Assets $328,059 $251,799 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits $38,024 $31,677 Savings, N.O.W. and money market deposits 123,727 91,407 Certificate of deposit of $100,000 or more 35,296 37,261 Other time deposits 55,143 41,036 ------ ------ Total deposits 252,190 201,381 Short-term borrowings 44,381 18,375 Other liabilities and accrued expenses 1,523 3,055 ----- ----- Total Liabilities 298,094 222,811 Total Stockholders' Equity 29,965 28,988 ------ ------ Total Liabilities and Stockholders' Equity $328,059 $251,799 ======== ======== December 31, ------------ 2010 2009 ---- ---- Selected Financial Data (unaudited) Asset Quality Allowance for Loan Losses to Total Loans 1.93% 1.70% Non-Performing Loans to Total Loans 1.02% 1.19% Non-Performing Loans to Total Assets 0.68% 0.96% Capital Ratios Tier 1 Leverage Ratio 9.47% 12.22% Tier 1 Risk-Based Capital Ratio 13.35% 12.62% Total Risk-Based Capital Ratio 14.61% 13.87% Statement of Operations (unaudited) (dollars in thousands, except per share data) For the three months ended December 31, ------------ 2010 2009 ---- ---- Interest income $3,623 $2,929 Interest expense 677 676 --- --- Net interest income 2,946 2,253 Provision for loan loss 164 1,753 --- ----- Net interest income after provision for loan losses 2,782 500 Other income 1,187 138 Other expenses 2,806 2,421 ----- ----- Net income (loss) $1,163 $(1,783) ====== ======= Basic earnings (loss) per share $0.28 $(0.45) Diluted earnings (loss) per share $0.28 $(0.45) Selected Financial Data (unaudited) Return on Average Total Assets 1.40% (2.99)% Return on Average Stockholders' Equity 14.28% (25.19)% Net Interest Margin 3.70% 4.01% For the year ended December 31, ------------ 2010 2009 ---- ---- Interest income $13,999 $8,513 Interest expense 2,844 1,981 ----- ----- Net interest income 11,155 6,532 Provision for loan loss 772 2,824 --- ----- Net interest income after provision for loan losses 10,383 3,708 Other income 2,302 467 Other expenses 10,740 9,706 ------ ----- Net income (loss) $1,945 $(5,531) ====== ======= Basic earnings (loss) per share $0.46 $(1.47) Diluted earnings (loss) per share $0.46 $(1.47) Selected Financial Data (unaudited) Return on Average Total Assets 0.64% (3.10)% Return on Average Stockholders' Equity 6.33% (20.02)% Net Interest Margin 3.85% 3.97% About Empire National Bank
Empire National Bank specializes in serving the financial needs of small and medium sized businesses, professionals, nonprofit organizations, real estate investors, and consumers. The Bank has three banking offices located in Islandia, Shirley and Port Jefferson Station. Our bankers take pride in understanding the needs of each and every customer so the bank can deliver the highest quality service with a sense of urgency.
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 report 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 Empire National Bank's control. The forward looking statements included in this report are made only as of the date of this report. We have no intention, and do not assume any obligation, to update these forward looking statements.
Empire National Bank
CONTACT: William Franz - VP, Director of Marketing & Investor Relations,
+1-631-348-4444
Web Site: http://www.empirenb.com/
