STATEN ISLAND, N.Y., April 30, 2024 (GLOBE NEWSWIRE) -- ES Bancshares, Inc. (OTCQX: ESBS) (the "Company") the holding company for Empire State Bank, (the "Bank") today reported a net loss of $103 thousand, or $0.02 per diluted common share, for the quarter ended March 31, 2024 compared to net income of $84 thousand or $0.01 per diluted common share for the quarter ended December 31, 2023.
| Key Quarterly Financial Data | 2024 Highlights | ||||||||||||
| Performance Metrics | 1Q24 | 4Q23 | 1Q23 | •Non-interest expenses decreased $295 thousand or 8% quarter over quarter. •Average deposits grew 3.4%, while the Company's average loan balance remained stable quarter over quarter. • Net interest margin for the first quarter of 2.12% narrowed from 2.28% as increases to the rates paid on interest-bearing liabilities outpaced the rise in yields of interest-earning assets •Non-Performing Loans / Total Loans and the Company's ratio of Non-Performing Assets / Total Assets remains favorable at 0.24% and 0.21% respectively. | |||||||||
| (Loss) return on average assets (%) | (0.07 | ) | 0.05 | 0.09 | |||||||||
| (Loss) return on average equity (%) | (0.90 | ) | 0.73 | 1.17 | |||||||||
| (Loss) return on average tangible equity (%) | (0.91 | ) | 0.74 | 1.18 | |||||||||
| Net interest margin (%) | 2.12 | 2.28 | 2.67 | ||||||||||
| Income Statement (a) | 1Q24 | 4Q23 | 1Q23 | ||||||||||
| Net interest income | $ | 3,203 | $ | 3,454 | $ | 3,977 | |||||||
| Non-interest income | $ | 215 | $ | 322 | $ | 256 | |||||||
| Net (loss) income | $ | (103 | ) | $ | 84 | $ | 133 | ||||||
| (Loss) earnings per diluted common share | $ | (0.02 | ) | $ | 0.01 | $ | 0.02 | ||||||
| Balance Sheet (a) | 1Q24 | 4Q23 | 1Q23 | ||||||||||
| Average total loans | $ | 567,526 | $ | 569,515 | $ | 555,919 | |||||||
| Average total deposits | $ | 486,323 | $ | 470,394 | $ | 487,816 | |||||||
| Book value per share | $ | 6.75 | $ | 6.83 | $ | 6.79 | |||||||
| Tangible book value per share | $ | 6.67 | $ | 6.74 | $ | 6.71 | |||||||
| (a) In thousands except for per share amounts | |||||||||||||
"Despite the continued challenging interest environment, through the Bank's core product offerings, the Company was able to grow average deposits during the first three months of 2024. The deposit inflows and asset amortization were partially utilized to repay wholesale funding, with borrowed money down 21% and brokered deposit funding down 8% from December 31, 2023. This funding management is expected to continue as the Company aggressively looks to reduce its cost of funds," said Phil Guarnieri, Director, and Chief Executive Officer of ES Bancshares.
Mr. Guarnieri also stated, "In addition to maintaining strong capital and asset quality ratios quarter over quarter, the Company's previously announced cost-cutting initiative has gotten off to a strong start, with expenses down $295 thousand in linked quarters. These cost savings helped offset some of the pressure seen during the quarter on net interest income. Further, during the quarter multiple directors exercised options expanding the internal ownership while supporting ESBS during this tenuous economic time."
Selected Balance Sheet Information:
March 31, 2024 vs. December 31, 2023
As of March 31, 2024, total assets were $628.6 million, a decrease of $10.1 million, or 1.6%, as compared to total assets of $638.7 million on December 31, 2023. The decrease can be attributed to less cash held quarter over quarter, as during the first quarter of 2024 the funds were utilized to repay Federal Home Loan Bank (FHLB) borrowings.
Loans receivable, net of Allowance for Credit Losses on Loans totaled $560.4 million, a decrease of $3.5 million or 0.6% from December 31, 2023. As of March 31, 2024, 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 $1.3 million or 0.21% of total assets, as of March 31, 2024, decreasing from $1.4 million or 0.22% of total assets at December 31, 2023. The ratio of nonaccrual loans to loans receivable was 0.24% and 0.22%, as of March 31, 2024, and December 31, 2023, respectively.
Total liabilities decreased $10.4 million to $582.5 from $592.9 million. The majority of the decrease can be attributed to a 21% decrease quarter over quarter in FHLB borrowings, partially offset by core deposit inflows. The growth in deposits was driven by an increase in interest-bearing non-maturity deposit accounts.
As of March 31, 2024, the Bank's Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 9.52%, 13.58%, 13.58% and 14.83%, respectively, all in excess of the ratios required to be deemed "well-capitalized." During the first quarter 2024 the Company did not repurchase shares under its stock repurchase program. Book value per common share was $6.75 at March 31, 2024 compared to $6.83 at December 31, 2023. Tangible common book value per share (which represents common equity less goodwill, divided by the number of shares outstanding) was $6.67 at March 31, 2024 compared to $6.74 at December 31, 2023. The majority of the decrease can be attributed to exercises of 120,000 options by multiple directors during the quarter.
Financial Performance Overview:
Three Months Ended March 31, 2024 vs. December 31, 2023
For the three months ended March 31, 2024, the Company saw a net loss totaling $103 thousand compared to net income of $84 thousand for the three months ended December 31, 2023. The decrease can be attributed to a softer margin quarter over quarter.
Net interest income for the three months ended March 31, 2024, decreased $251 thousand, to $3.2 million from $3.5 million at three months ended December 31, 2023. The Company's net interest margin compacted, decreasing by sixteen basis points to 2.12% for the three months ended March 31, 2024, as compared to 2.28% for the three months ended December 31, 2023. The contraction can be attributed to increased costs for the Bank's retail deposits, mainly within Savings accounts and partially offset by the decrease in the average balance of FHLB borrowings.
There was a provision for credit losses of $39 thousand taken back in for the three months ended March 31, 2024, compared to $83 thousand reversal of credit losses for the three months ended December 31, 2023.
Non-interest income decreased $107 thousand, to $215 thousand for the three months ended March 31, 2024, compared with non-interest income of $322 thousand for the three months ended December 31, 2023. The decrease can be attributed to less loan charges and fees earned quarter over quarter.
Non-interest expenses totaled $3.5 million for the three months ended December 31, 2023, compared to $3.8 million for the three months ended December 31, 2023, or a decrease of 7.9%. The decrease in non-interest expense can be attributed to initiatives taking effect from the cost-cutting program previously announced.
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 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. 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, 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) | ||||||||
| March 31, | December 31, | March 31, | ||||||
| 2024 | 2023 | 2023 | ||||||
| |----(unaudited)----| | |----(unaudited)----| | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 27,392 | 32,728 | 57,827 | ||||
| Securities, net | 13,013 | 15,220 | 15,629 | |||||
| Loans receivable, net: | ||||||||
| Real estate mortgage loans | 548,462 | 551,124 | 521,696 | |||||
| Commercial and Lines of Credit | 12,359 | 13,301 | 17,018 | |||||
| Home Equity and Consumer Loans | 397 | 349 | 358 | |||||
| Deferred costs | 4,245 | 4,233 | 4,213 | |||||
| Allowance for Loan Credit Losses | (5,054 | ) | (5,086 | ) | (4,882 | ) | ||
| Total loans receivable, net | 560,410 | 563,920 | 538,403 | |||||
| Accrued interest receivable | 2,652 | 2,625 | 2,338 | |||||
| Investment in restricted stock, at cost | 4,509 | 5,191 | 5,368 | |||||
| Goodwill | 581 | 581 | 581 | |||||
| Bank premises and equipment, net | 5,381 | 5,600 | 6,037 | |||||
| Repossessed assets | - | - | 164 | |||||
| Right of use lease assets | 6,202 | 6,415 | 6,666 | |||||
| Bank Owned Life Insurance | 5,376 | 5,341 | 5,236 | |||||
| Other Assets | 3,118 | 1,129 | 1,178 | |||||
| Total Assets | $ | 628,634 | 638,750 | 639,427 | ||||
| Liabilities & Stockholders' Equity | ||||||||
| Non-Interest-Bearing Deposits | 100,880 | 109,065 | 135,680 | |||||
| Interest-Bearing Deposits | 343,311 | 328,479 | 311,800 | |||||
| Brokered Deposits | 52,000 | 56,581 | 39,504 | |||||
| Total Deposits | 496,191 | 494,125 | 486,984 | |||||
| Bond Issue, net of costs | 13,720 | 13,708 | 13,678 | |||||
| Borrowed Money | 55,628 | 70,805 | 78,000 | |||||
| Lease Liability | 6,464 | 6,672 | 6,893 | |||||
| Other Liabilities | 16,942 | 7,578 | 9,061 | |||||
| Total Liabilities | 582,480 | 592,888 | 594,616 | |||||
| Stockholders' equity | 46,154 | 45,862 | 44,811 | |||||
| Total liabilities and stockholders' equity | $ | 628,634 | 638,750 | 639,427 | ||||
| ES Bancshares, Inc. | ||||||||||
| Consolidated Statements of Income | ||||||||||
| (in thousands) | ||||||||||
| Three Months Ended | ||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||
| |--------------(unaudited)--------------| | ||||||||||
| Interest income | ||||||||||
| Loans | $ | 7,208 | $ | 7,059 | $ | 6,064 | ||||
| Securities | 115 | 110 | 113 | |||||||
| Other interest-earning assets | 263 | 278 | 367 | |||||||
| Total Interest Income | 7,586 | 7,447 | 6,544 | |||||||
| Interest expense | ||||||||||
| Deposits | 3,585 | 2,945 | 1,616 | |||||||
| Borrowings | 798 | 1,048 | 768 | |||||||
| Total Interest Expense | 4,383 | 3,993 | 2,384 | |||||||
| Net Interest Income | 3,203 | 3,454 | 4,160 | |||||||
| Prov for(Reversal of) Credit Losses | 39 | (83 | ) | (17 | ) | |||||
| Net Interest Income after Prov for (Revrsl) Credit Losses | 3,164 | 3,537 | 4,177 | |||||||
| Non-interest income | ||||||||||
| Service charges and fees | 172 | 254 | 137 | |||||||
| Gain on loan sales | 1 | 30 | - | |||||||
| Other | 42 | 38 | 37 | |||||||
| Total non-interest income | 215 | 322 | 174 | |||||||
| Non-interest expenses | ||||||||||
| Compensation and benefits | 1,721 | 1,745 | 1,855 | |||||||
| Occupancy and equipment | 668 | 646 | 641 | |||||||
| Data processing service fees | 326 | 357 | 302 | |||||||
| Professional fees | 181 | 357 | 219 | |||||||
| FDIC & NYS Banking Assessments | 97 | 88 | 55 | |||||||
| Advertising | 75 | 101 | 99 | |||||||
| Insurance | 50 | 51 | 45 | |||||||
| Other | 337 | 405 | 356 | |||||||
| Total non-interest expense | 3,455 | 3,750 | 3,572 | |||||||
| (Loss) income prior to tax expense | (76 | ) | 109 | 778 | ||||||
| Income taxes | 27 | 25 | 179 | |||||||
| Net (Loss) income | $ | (103 | ) | $ | 84 | $ | 599 | |||
| ES Bancshares, Inc. | ||||||||||||||||||||||||
| Average Balance Sheet Data | ||||||||||||||||||||||||
| For the Three Months Ended (dollars in thousands) | ||||||||||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||||||||||||||||
| Avg Bal | Interest | Average | Avg Bal | Interest | Average | Avg Bal | Interest | Average | ||||||||||||||||
| Rolling | Rolling | Rolling | Rolling | Rolling | Rolling | |||||||||||||||||||
| Assets | 3 Mos. | 3 Mos. | Yield/Cost | 3 Mos. | 3 Mos. | Yield/Cost | 3 Mos. | 3 Mos. | Yield/Cost | |||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||
| Loans receivable | $ | 567,526 | $ | 7,208 | 5.08 | % | $ | 569,515 | $ | 7,059 | 4.96 | % | $ | 529,041 | $ | 6,064 | 4.58 | % | ||||||
| Investment securities | 15,814 | 115 | 2.90 | % | 15,957 | 110 | 2.75 | % | 15,979 | 113 | 2.83 | % | ||||||||||||
| Other interest-earning assets | 19,828 | 263 | 5.25 | % | 20,128 | 278 | 5.40 | % | 31,460 | 367 | 4.67 | % | ||||||||||||
| Total interest-earning assets | 603,168 | 7,586 | 5.03 | % | 605,600 | 7,447 | 4.92 | % | 576,480 | 6,544 | 4.54 | % | ||||||||||||
| Non-interest earning assets | 16,812 | 16,840 | 17,355 | |||||||||||||||||||||
| Total assets | $ | 619,980 | $ | 622,440 | $ | 593,835 | ||||||||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing checking | $ | 30,943 | $ | 26 | 0.34 | % | $ | 25,368 | $ | 23 | 0.36 | % | $ | 30,193 | $ | 34 | 0.46 | % | ||||||
| Savings accounts | 153,609 | 1,413 | 3.69 | % | 123,641 | 884 | 2.84 | % | 116,789 | 323 | 1.12 | % | ||||||||||||
| Certificates of deposit | 201,926 | 2,146 | 4.26 | % | 207,091 | 2,037 | 3.90 | % | 190,984 | 1,259 | 2.67 | % | ||||||||||||
| Total interest-bearing deposits | 386,479 | 3,585 | 3.72 | % | 356,101 | 2,945 | 3.28 | % | 337,966 | 1,616 | 1.94 | % | ||||||||||||
| Borrowings | 59,541 | 576 | 3.88 | % | 76,844 | 827 | 4.27 | % | 55,415 | 547 | 4.00 | % | ||||||||||||
| Subordinated debenture | 13,714 | 221 | 6.47 | % | 13,705 | 221 | 6.40 | % | 13,672 | 221 | 6.56 | % | ||||||||||||
| Total interest-bearing liabilities | 459,734 | 4,383 | 3.82 | % | 446,649 | 3,993 | 3.55 | % | 407,053 | 2,384 | 2.38 | % | ||||||||||||
| Non-interest-bearing demand deposits | 99,844 | 114,293 | 127,843 | |||||||||||||||||||||
| Other liabilities | 14,396 | 15,803 | 14,617 | |||||||||||||||||||||
| Total non-interest-bearing liabilities | 114,240 | 130,096 | 142,460 | |||||||||||||||||||||
| Stockholders' equity | 46,005 | 45,695 | 44,322 | |||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 619,980 | $ | 622,440 | $ | 593,835 | ||||||||||||||||||
| Net interest income | $ | 3,203 | $ | 3,454 | $ | 4,160 | ||||||||||||||||||
| Average interest rate spread | 1.21 | % | 1.37 | % | 2.17 | % | ||||||||||||||||||
| Net interest margin | 2.12 | % | 2.28 | % | 2.89 | % | ||||||||||||||||||
| Five Quarter Performance Ratio Highlights | Three Months Ended | |||||||||||||||
| March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||||
| Income Statement (%) | ||||||||||||||||
| (Loss) return on Average Assets | (0.07 | ) | 0.05 | 0.09 | 0.42 | 0.40 | ||||||||||
| (Loss) return on Average Equity | (0.90 | ) | 0.73 | 1.17 | 5.81 | 5.40 | ||||||||||
| (Loss) return on Average Tangible Equity | (0.91 | ) | 0.74 | 1.18 | 5.89 | 5.47 | ||||||||||
| Efficiency Ratio | 101.08 | 99.31 | 93.89 | 80.86 | 82.42 | |||||||||||
| Yields / Costs (%) | ||||||||||||||||
| Average Yield - Interest Earning Assets | 5.03 | 4.92 | 4.79 | 4.70 | 4.54 | |||||||||||
| Cost of Funds | 3.82 | 3.55 | 2.93 | 2.53 | 2.38 | |||||||||||
| Net Interest Margin | 2.12 | 2.28 | 2.67 | 2.86 | 2.89 | |||||||||||
| Capital Ratios (%) | ||||||||||||||||
| Equity / Assets | 7.34 | 7.18 | 7.24 | 7.24 | 7.01 | |||||||||||
| Tangible Equity / Assets | 7.26 | 7.09 | 7.15 | 7.15 | 6.92 | |||||||||||
| Tier I leverage ratio (a) | 9.52 | 9.45 | 9.54 | 9.40 | 9.65 | |||||||||||
| Common equity Tier I capital ratio (a) | 13.63 | 13.60 | 13.47 | 13.67 | 13.87 | |||||||||||
| Tier 1 Risk-based capital ratio (a) | 13.63 | 13.60 | 13.47 | 13.67 | 13.87 | |||||||||||
| Total Risk-based capital ratio (a) | 14.88 | 14.85 | 14.63 | 14.92 | 15.12 | |||||||||||
| Stock Valuation | ||||||||||||||||
| Book Value | $ | 6.75 | $ | 6.83 | $ | 6.79 | $ | 6.77 | $ | 6.67 | ||||||
| Tangible Book Value | $ | 6.67 | $ | 6.74 | $ | 6.71 | $ | 6.68 | $ | 6.59 | ||||||
| Shares Outstanding (b) | 6,834 | 6,714 | 6,714 | 6,714 | 6,714 | |||||||||||
| Asset Quality (%) | ||||||||||||||||
| ACL / Total Loans | 0.89 | 0.89 | 0.89 | 0.89 | 0.90 | |||||||||||
| Non Performing Loans / Total Loans | 0.24 | 0.22 | 0.25 | 0.25 | 0.17 | |||||||||||
| Non Performing Assets / Total Assets | 0.21 | 0.22 | 0.25 | 0.25 | 0.19 | |||||||||||
| (a) Ratios at Bank level (b) Shares information presented in thousands | ||||||||||||||||
