ISLANDIA, NY -- (Marketwire) -- 04/20/11 -- Empire National Bank (OTCQB: EMPK) today announced its operating results for the first quarter of 2011. Highlights for the quarter include:
- Net income increased 282%, or $288 thousand, year-over-year to $390 thousand, or $0.09 per share, for the quarter ended March 31, 2011
- Net interest income of $2.9 million, a year-over-year increase of 21.8% from the first quarter of 2010
- Demand deposits of $42.4 million, a $2.9 million, or 7.3%, increase from March 31, 2010; and a $4.4 million, or 11.6% increase from December 31, 2010
- Average demand deposits increased $9.3 million, or 27.8%, from first quarter 2010 to 2011
- Strong liquidity with $101.4 million in cash and available for sale securities and a loan to deposit ratio of 82.45%
- Solid asset quality with an allowance for loan and lease losses of 1.95% of total loans and non-performing loans to total loans of 1.04%
- Return on average assets of 0.49%
- Return on average equity of 5.18%
- Capital strength with Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of 9.70%, 13.42% and 14.68%, respectively
- Efficiency ratio of 87.08%, which represents an improvement of 4.5% from 91.17% at December 31, 2010, and of 8.82% from 95.9% at March 31, 2010
Douglas C. Manditch, Chairman and Chief Executive Officer, stated, "As we celebrate our third anniversary, we take great pride in our accomplishments to date. Our first quarter 2011 results reflect core earnings, from which we will continue to build." Mr. Manditch further stated, "We continue to focus on the growth of our retail deposit base, which we expect will provide an efficient source of funding for future asset growth."
Earnings
Net income was $390 thousand, or $0.09 per share, for the first quarter of 2011; compared to $102 thousand for the first quarter of 2010, an increase of $288 thousand. The increase in net income was primarily attributable to an increase in net interest income of $406 thousand, coupled with no additional provision for loan losses in the first quarter due to a decrease in loans and the overall performance of the loan portfolio. On a linked quarter basis (first quarter 2011 vs. fourth quarter 2010), net income was down $773 thousand, reflective of security gains of $1.1 million realized in the fourth quarter of 2010. There were no security sales in the first quarter of 2011.
The increase in net interest income of $406 thousand year-over-year was primarily attributable to an increase in the average balance of interest earning assets of $56.5 million. The bank's net interest margin was 3.75% for the quarter ended March 31, 2011, a decrease of 18 basis points from the same period in 2010, due to a decrease in the bank's yield on interest earning assets of 52 basis points from 5.08% to 4.56%, which was partially offset by a decrease in the bank's cost of interest bearing liabilities of 41 basis points to 1.03% in the first quarter of 2011. The decrease in the average yield on interest earning assets was primarily due to the increased growth in securities available for sale as a percentage of average earning assets, as compared to loans over the same period.
The bank's efficiency ratio improved by 4.5% from 91.17% at December 31, 2010 to 87.08% at March 31, 2011, due to continued revenue growth and expense management, while continuing the bank's mission to deliver the highest quality of service to its customers.
Balance Sheet and Asset Quality
Total assets were $329.9 million at March 31, 2011, reflecting a $1.1 million increase from December 31, 2010. The growth in total assets was due to an $8.8 million increase in securities available for sale which was partially offset by a decrease in outstanding loan balances of $2.5 million. The decrease was attributable to loan payoffs during the first quarter and weak loan demand due, in large part, to the current economy. Total assets increased $43.4 million year-over-year, or 15.1%, attributable to loan growth of $6.7 million and an increase in securities available for sale of $42.8 million, or 72.9%.
Non-performing assets were $2.2 million at December 31, 2010 and March 31, 2011. As of March 31, 2011, the Bank had two non-performing loans that had been restructured and are presently paying as agreed under the restructured terms. Non-performing loans, at 1.04% of total loans, remain below that of the bank's peers. The allowance for loan losses to total loans was 1.95% at March 31, 2011, as compared to 1.71% at March 31, 2010.
Total deposits were $262.0 million at March 31, 2011, a year-over-year increase of $10.6 million, or 4.2%. On a linked quarter basis, total deposits increased by $9.8 million, or 3.9%. Demand deposits increased $2.9 million, or 7.3%, year-over-year and $4.4 million, or 11.6%, on a linked quarter basis to $42.4 million at March 31, 2011. Savings, NOW and money market deposits increased year-over-year by $2.2 million, or 1.6%, and $14.0 million, or 11.3%, on a linked quarter basis to $137.7 million at March 31, 2011.
Stockholders' equity grew from $29.2 million to $30.5 million from March 31, 2010 to March 31, 2011. At March 31, 2011, the bank was "well capitalized" as defined by OCC regulation, with leverage, Tier 1 risk-based and total risk-based capital ratios of 9.70%, 13.42% and 14.68%, respectively.
Opportunities and Challenges
"As we complete the first quarter of 2011, the economy continues to be a challenge for businesses in our region. We continue to believe that emphasizing adherence to prudent underwriting standards over loan growth is in the best long term interest of our shareholders."
"In addition, our focus on consistent core deposit growth through our existing branch network has proved beneficial during this low interest rate environment, and we expect that it will prove even more beneficial if and when interest rates begin to rise. We are pleased with the deposit growth of our three branches, and foresee continued steady growth as we continue to execute our mission of excellent customer service delivered with a sense of urgency," remarked Thomas Buonaiuto, President and Chief Operating Officer.
Balance Sheet (unaudited)
(dollars in thousands)
March 31, December 31, March 31,
2011 2010 2010
------------- ------------- -------------
ASSETS
Cash and cash equivalents $ 2,997 $ 7,853 $ 5,810
Securities available for sale,
at fair value 101,458 92,696 58,745
Securities, restricted 2,698 3,263 1,031
Loans, net 211,811 214,272 205,765
Premises and equipment, net 7,415 7,590 8,070
Other assets and accrued
interest receivable 3,489 3,128 7,086
------------- ------------- -------------
Total Assets $ 329,868 $ 328,802 $ 286,507
============= ============= =============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Demand Deposits $ 42,372 $ 38,024 $ 39,470
Savings, N.O.W. and money
market deposits 137,725 123,727 135,474
Certificates of deposit of
$100,000 or more and other
time deposits
81,901 90,439 76,499
------------- ------------- -------------
Total deposits 261,998 252,190 251,443
------------- ------------- -------------
Short-term borrowings 32,220 44,381 -
Other liabilities and accrued
expenses 5,102 2,266 5,864
------------- ------------- -------------
Total Liabilities 299,320 298,837 257,307
------------- ------------- -------------
Total Stockholders' Equity 30,548 29,965 29,200
------------- ------------- -------------
Total Liabilities and
Stockholders' Equity $ 329,868 $ 328,802 $ 286,507
============= ============= =============
Selected Financial Data
(unaudited)
Asset Quality
Allowance for Loan Losses to
Total Loans 1.95% 1.93% 1.71%
Non-performing Loans to Total
Loans 1.04% 1.02% 1.09%
Non-performing Loans to Total
Assets 0.68% 0.68% 0.80%
Capital Ratios
Tier 1 Leverage Ratio 9.70% 9.47% 10.63%
Tier 1 Risk-Based Capital Ratio 13.42% 13.31% 12.13%
Total Risk-Based Capital Ratio 14.68% 14.56% 13.38%
Statement of Operations
(unaudited)
(dollars in thousands, except
per share data)
For the three months ended
-------------------------------------------
March 31, December 31, March 31,
2011 2010 2010
------------- ------------- -------------
Interest income $ 3,529 $ 3,623 $ 3,222
Interest expense 630 677 729
------------- ------------- -------------
Net interest income 2,899 2,946 2,493
Provision for loan losses - 164 112
------------- ------------- -------------
Net interest income after
provision for loan losses 2,899 2,782 2,381
Net securities gains - 1,054 106
Other income 118 133 144
Other expense 2,627 2,806 2,529
------------- ------------- -------------
Net income $ 390 $ 1,163 $ 102
============= ============= =============
Basic earnings per share $ 0.09 $ 0.28 $ 0.02
Diluted earnings per share $ 0.09 $ 0.28 $ 0.02
Selected Financial Data
(unaudited)
Return on Average Assets 0.49% 1.40% 0.15%
Return on Average Equity 5.18% 14.28% 1.41%
Net Interest Margin 3.75% 3.70% 3.93%
Efficiency Ratio 87.08% 91.17% 95.90%
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.
Contact:
William Franz
VP, Director of Marketing & Investor Relations
(631) 348-4444
