Archive for November 2018

Press Release – ES Bancshares, Inc. reports robust loan and deposit growth for the nine months ended September 30, 2018

Loans increased $64.8 million, or 25.2%, to $321.6 million at September 30, 2018 compared to $256.8 million at December 31, 2017.

Deposits increased $73.8 million, or 34.0% to $291.0 million at September 30, 2018 compared to $217.2 million at December 31, 2017.

Tangible book value per share increases to $5.07, or $0.13 per share, from December 31, 2017. 

NEWBURGH, N.Y., Nov. 20, 2018 (GLOBE NEWSWIRE) — ES Bancshares, Inc. (OTC: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today announced net income of $171 thousand, or $0.04 per common share for the quarter ended September 30, 2018, as compared to $235 thousand, or $0.07 per common share for the quarter ended September 30, 2017.  The decrease in net income was primarily due to a $710 thousand provision for loan loss for the quarter ended September 30, 2018 compared to $172 thousand for the comparable 2017 period.  Further, increases in non-interest expense largely resulting from the addition of two new branches in 2018 also contributed to the decrease.

Net interest income increased $650 thousand, or 31.1% to $2.7 million quarter over quarter.  The increase in net interest income was largely due to a $80.3 million or 33.3% increase in loans receivable to $321.6 million as of September 30, 2018 compared to $241.3 million as of September 30, 2017.   

Net income for the nine months ended September 30, 2018 was $518 thousand, or $0.13 per share compared to $1.1 million thousand, or $0.33 per share for the period ended September 30, 2017.  The decrease in net income was primarily due to a one-time non-recurring $1.8 million gain on the sale of a branch in the nine month period ended September 30, 2017.  This was partially offset by changes in non-interest expense, largely resulting from the addition of two new branches in 2018, and income taxes.

Net interest income increased $1.2 million, or 18.8% to $7.5 million.  The increase in net interest income was largely due to a $80.3 million or 33.3% increase in loans receivable to $321.6 million as of September 30, 2018 compared to $241.3 million as of September 30, 2017.   

The Bank also reported strong deposit growth over the twelve month period ending September 30, 2018.  Total deposits have grown $84.4 million or 40.8% to $291.0 million at September 30, 2018.

Chief Executive Officer Philip Guarnieri stated that, “We are pleased with the growth that the Bank has experienced in the past year, and the improvement to net interest income despite higher deposit rates.”  Mr. Guarnieri also commented on the Bank’s two new branches that opened in the quarter.  He further stated that, “Management is now focused on deepening customer relationships within the Brooklyn and Staten Island markets.”  He continued by stating, “ …that the two new branches have attracted over $20 million in new deposits, with over $7 million, or $37%, in non-interest bearing checking accounts.”

President and Chief Operating Officer Thomas Sperzel commented that “Management is excited about the opening of the new branches in Brooklyn and Staten Island, NY.”  He continued by stating that, “the Bank held grand opening celebrations in each community and received an excellent turnout from both our new and existing customers.”

FINANCIAL HIGHLIGHTS

  • Net income of $171 thousand for the quarter ended September 30, 2018 compared to $235 thousand for the comparable period in 2017, representing a decrease of $64 thousand, or 27%.
  • Net income of $518 thousand for the year to date ended September 30, 2018 compared to $1.1 million for the comparable period in 2017, representing a decrease of $582 thousand, or 53%.
  • Net income before taxes of $54 thousand for the quarter ended September 30, 2018 compared to $400 thousand for the comparable period in 2017, representing a decrease of $346 thousand, or 86%.
  • Net income before taxes of $718 thousand for the year to date ended September 30, 2018 compared to $1.87 million for the comparable period in 2017, representing a decrease of $1.15 million, or 61%.  The decrease in net income noted above was primarily due to a one-time non-recurring $1.8 million gain on the sale of a branch in the nine month period ended September 30, 2017.
  • Net interest income of $2.74 million for the quarter ended September 30, 2018 compared to $2.09 million for the comparable period in 2017, representing an increase of $650 thousand, or 31%.
  • Net margin of 3.22% for the quarter ended September 30, 2018 compared to 3.27% for the comparable period in 2017, representing a decrease of 5 bps, or 1.5%.

Comparison of Financial Condition at September 30, 2018 and December 31, 2017

Total assets at September 30, 2018, amounted to $366.0 million, representing an increase of $77.4 million, or 26.8%, from $288.6 million at December 31, 2017. This increase partially resulted from net increase in loans receivable, net, of $64.9 million and in total securities of $8.4 million.

Loans receivable, net, increased $65.0 million, or 25.6%, to $318.8 million at September 30, 2018 from $253.8 million at December 31, 2017. Commercial loans and commercial lines of credit decreased $2.2 million, or 7.8%, from $28.3 million to $26.1 million. Commercial and multifamily real estate loans increased $22.3 million, or 13.9%, from $159.7 million to $182.0 million. Home equity and consumer loans increased $262 thousand to $4.5 million at September 30, 2018. Residential real estate mortgage loans increased $43.8 million, or 70.4%, from $62.2 million to $106.0 million. Management continues to emphasize the origination of high quality loans for retention in the loan portfolio.

Deposits increased by $73.8 million to $291.0 million at September 30, 2018 from $217.2 million at December 31, 2017. Interest bearing deposits increased $61.4 million and non-interest bearing deposits increased $12.4 million. Over this nine month period the net deposit activity consisted mainly of increases in certificates of deposit of $46.4 million, DDA and NOW accounts of $12.5 million, savings accounts of $9.6 million, and money market accounts of $5.3 million.

Borrowings increased by $1.0 million to $49.5 million at September 30, 2018 from $48.52 million at December 31, 2017.

Stockholders’ equity increased by $491 thousand to $20.1 million at September 30, 2018, from $19.7 million at December 31, 2017. The increase was primarily attributable to a $557 thousand increase in retained earnings; partially offset by a decrease in accumulated other comprehensive income of $84 thousand. The ratio of stockholders’ equity to total assets decreased to 5.5% at September 30, 2018 from 6.8% at December 31, 2017. Book value per share increased to $5.22 at September 30, 2018, from $5.10 at December 31, 2017.

ES BANCSHARES, INC.              
STATEMENTS OF CONDITION            
(In Thousands)              
(Unaudited)              
               
               
  9/30/2018   6/30/2018   3/31/2018   12/31/2017
ASSETS              
Cash and cash equivalents: $ 17,903     $ 17,295     $ 14,591     $ 15,745  
               
Securities – Available For Sale   6,085       6,200       6,271       4,397  
Securities – Held To Maturity   11,895       12,416       4,881       5,146  
Total Securities   17,980       18,616       11,152       9,543  
               
Loans   321,596       297,018       279,090       256,819  
Less:  allowance for loan losses   (2,833 )     (3,561 )     (3,268 )     (2,982 )
Loans, net   318,763       293,457       275,822       253,837  
               
Premises and equipment, net   4,154       3,157       3,017       2,963  
Other assets   7,205       7,018       7,188       6,532  
Total Assets $ 366,005     $ 339,543     $ 311,770     $ 288,620  
               
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Deposits:              
Demand and NOW deposit accounts $ 93,257     $ 92,957     $ 75,565     $ 80,725  
Money market accounts   26,009       12,223       14,022       16,446  
Savings accounts   70,937       69,938       62,510       65,625  
Certificates of deposit   100,855       92,798       77,183       54,422  
Total Deposits   291,058       267,916       229,280       217,218  
               
Borrowings   49,500       47,500       59,000       48,500  
Other Liabilities   5,264       4,130       3,597       3,210  
Total Liabilities   345,822       319,546       291,877       268,928  
               
Total Shareholders’ Equity   20,183       19,997       19,893       19,692  
Total Liabilities and Shareholders’ Equity $ 366,005     $ 339,543     $ 311,770     $ 288,620  
               

Results of Operations for the Quarters Ended September 30, 2018 and September 30, 2017

General.  For the quarter ended September 30, 2018, the Company recognized net income of $171 thousand, or $0.04 per basic and diluted share, as compared to net income of $235 thousand, or $0.07 per basic and diluted share, for the quarter ended September 30, 2017.

Interest Income.  Interest income increased to $3.81 million for the quarter ended September 30, 2018 compared to $2.69 million for the quarter ended September 30, 2017.

The average balance of the loan portfolio increased to $306.8 million for the quarter ended September 30, 2018 from $253.3 million for the quarter ended September 30, 2017 while the average yield increased to 4.64% for the quarter ended September 30, 2018 from 4.35% for the quarter ended September 30, 2017. The average balance and yield of the Bank’s investment securities for the quarter ended September 30, 2018 was $18.4 million and 3.15%, respectively, as compared to an average balance of $10.1 million and a yield of 3.01% for the comparable quarter ended one-year earlier. 

Interest Expense.  Total interest expense for the quarter ended September 30, 2018, increased by $463 thousand to $1.07 million from $607 thousand for the prior year period.  Average balances of total interest-bearing liabilities increased $58.5 million to $238.6 million for the quarter ended September 30, 2018, from $180.1 million for the quarter ended September 30, 2017. The average cost for those liabilities increased to 1.79% from 1.34% for the same respective period one year earlier.

The average balances of the Bank’s certificates of deposit portfolio increased to $42.4 million at an average cost of 1.96% over the quarter ended September 30, 2018, from $53.7 million at an average cost of 1.39% over the same quarter ended one-year earlier. Regular savings account average balances increased to $75.3 million, from $57.7 million for the quarter ended September 30, 2017. These had an average cost of 1.49% for the quarter ended September 30, 2018 compared to an average cost of 1.07% for the quarter ended September 30, 2017.  

Average money market account balances decreased $7.1 million to $11.7 million at an average cost of 0.41% for the quarter ended September 30, 2018, from $18.8 million at an average cost of 0.42% for the quarter ended September 30, 2017. 

For the quarter ended September 30, 2018, the average balance of the Company’s borrowed funds was $42.3 million with an average cost of 2.72%, as compared to $36.3 million and an average cost of 2.50% for the quarter ended September 30, 2017.

Net Interest Income.  Net interest income increased $650 thousand from $2.09 million for the quarter ended September 30, 2017, to $2.74 million for the quarter ended September 30, 2018.  Our average interest rate spread decreased to 2.70% for the quarter ended September 30, 2018, from 2.88% for the quarter ended September 30, 2017, while our net interest margin decreased to 3.22% from 3.27%, over the same respective periods.

Provision for Loan Losses.  For the quarter ended September 30, 2018, management recorded a $710 thousand provision for loan losses.  Comparatively, there was $173 thousand provision for loan loss for the quarter ended September 30, 2017. The Bank charged-off $1.4 million of taxi medallion loans during the quarter and provided additional reserves to replenish the allowance for loan losses.

The Bank continues to evaluate the collateral values of the taxi medallion loan portfolio.   Recent medallion transfer prices and a discounted cash flow model valuation output further supported by recent industry valuation trends were weighted to derive an estimated fair value of $250,000 as of September 30, 2018.     

As of September 30, 2018, the Taxi Medallion portfolio equaled $3.1 million, representing 1.0% of the Bank’s total loan portfolio. 

Non-Interest Income.  Non-interest income for the quarter ended September 30, 2018 increased $55 thousand to $258 thousand as compared to $203 thousand for the quarter ended September 30, 2017. This increase primarily resulted in deposit account service charges increased $46 thousand.

Non-Interest Expense.  Non-interest expense for the quarter ended September 30, 2018 increased $514 thousand when compared to the same quarter in 2017. This increase primarily results from net increases of $310 thousand in compensation and benefits, other expenses of $98 thousand and $80 thousand in occupancy and equipment.

Income Tax Expense.  Income tax expense was had a credit balance of $117 thousand for the quarter ended September 30, 2018 as compared to $165 thousand for the quarter ended September 30, 2017.  This was largely due to the income tax adjustment created by the charge-off of taxi medallion loans.

Results of Operations for the Nine Months Ended September 30, 2018 and September 30, 2017

General.  For the nine months ended September 30, 2018, the Company recognized net income of $518 thousand, or $0.13 per basic and diluted share, as compared to net income of $1.10 million, or $0.33 per basic and diluted share, for the nine months ended September 30, 2017. 

Interest Income.  Interest income increased by $2.43 million, from $7.87 million to $10.3 million, for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.  This increase was primarily attributable to a net increase in loans of $2.2 million.

The average balance of the loan portfolio increased to $286.3 million for the nine months ended September 30, 2018 from $225.4 million for the nine months ended September 30, 2017, while the average yield increased to 4.51% from 4.42% for the nine months ended September 30, 2018 and September 30, 2017. The average balance and yield of the Bank’s investment securities for the nine months ended September 30, 2018, was $14.6 million and 3.09%, respectively, as compared to an average balance of $10.6 million and a yield of 3.10% for the comparable nine month period one-year earlier. 

Interest Expense.  Total interest expense for the nine months ended September 30, 2018, increased by $1.3 million, from $1.6 million to $2.9 million, when compared to the prior year period. Average balances of total interest-bearing liabilities increased $52.6 million to $224.6 million for the nine months ended September 30, 2018, from $172.0 million for the nine months ended September 30, 2017. The average cost for those liabilities increased to 1.52% from 1.22% for the same respective period one year earlier reflecting.

The average balances of the Bank’s certificates of deposit portfolio increased to $82.6 million at an average cost of 1.85% over the nine months ended September 30, 2018, from $55.3 million at an average cost of 1.32% over the same period one-year earlier. Regular savings account average balances increased by $18.1 million to $69.4 million. These had an average cost of 1.38% for the nine months ended September 30, 2018 compared to an average cost of 1.01% for the nine months ended September 30, 2017.

Money market account average balances decreased by $12.2 million to $12.7 million. These had an average cost of 0.41% for the nine months ended September 30, 2018 compared to an average cost of 0.45% for the nine months ended September 30, 2017.   
For the nine months ended September 30, 2018, the average balance of the Company’s borrowed funds was $47.4 million and its average cost was 1.72%, as compared to $23.9 million and an average cost of 2.81% for the nine months ended September 30, 2017.

Net Interest Income.  Net interest income was approximately $7.5 million for the nine months ended September 30, 2018, as compared to $6.3 million for the same period in the prior year.  Our interest rate spread decreased to 2.75% for the nine months ended September 30, 2018, from 3.03% for the nine months ended September 30, 2017, while our net interest margin decreased to 3.22% from 3.40%, over the same respective periods.

Provision for Loan Losses.  For the nine months ended September 30, 2018, management recorded a $1.3 million provision for loan losses. Comparatively, the provision was $1.5 million for the nine months ended September 30, 2017. The Bank charged-off $1.4 million of taxi medallion loans during the quarter and provided additional reserves to replenish the allowance for loan losses.

The Bank continues to evaluate the collateral values of the taxi medallion loan portfolio.   Recent medallion transfer prices and a discounted cash flow model valuation output further supported by recent industry valuation trends were weighted to derive an estimated fair value of $250,000 as of September 30, 2018.     

As of September 30, 2018, the Taxi Medallion portfolio equaled $3.1 million, representing 1.0% of the Bank’s total loan portfolio. 

Management records loan loss provision to reflect the overall growth in the portfolio as well as the evaluated risk in the portfolio. The provision recorded during the period was done so in conjunction with the Bank’s allowance for loan loss methodology. It is calculated using a historical charge-off basis as well as other qualitative factors which reflect management’s overall perceived risk in the portfolio.

Non-Interest Income.  Non-interest income for the nine months ended September 30, 2018 decreased $1.7 million to approximately $852 thousand as compared to $2.6 million for the nine months ended September 30, 2017. This decrease was primarily the result of a net decrease in gain on branch sale of $1.7 million, partially offset by a net increase in deposit account service charges of $78 thousand.

Non-Interest Expense.  Non-interest expense for the nine months ended September 30, 2018 increased $784 thousand when compared to the same period in 2018. This net increase was primarily attributable to net increases in compensation and benefits expense of $529 thousand, and other expense of $200 thousand.

Income Tax Expense.  Income tax expense was $200 thousand for the nine months ended September 30, 2018 as compared to $765 thousand for the nine months ended September 30, 2017.

ES BANCSHARES, INC.              
STATEMENTS OF INCOME              
(In Thousands)              
(Unaudited)              
               
  Quarter to 
Date
  Quarter to 
Date
  Year to 
Date
  Year to 
Date
  9/30/2018   9//30/2017   9/30/2018   9/30/2017
               
Total interest income $ 3,808     $ 2,692   $ 10,334   $ 7,868  
Total interest expense   1,073       607     2,855     1,574  
Net interest income   2,735       2,085     7,479     6,294  
Provision for loan losses   710       173     1,340     1,493  
               
Net interest income after              
provision for loan loss   2,025       1,912     6,139     4,801  
               
Total non-interest income   258       203     852     2,555  
               
Compensation and benefits   1,280       970     3,497     2,968  
Occupancy and equipment   311       231     851     747  
Professional fees   47       103     310     439  
Data processing service fees   118       108     321     328  
NYS Banking & FDIC Assessment   91       49     210     165  
Other operating expenses   382       254     1,084     842  
Total non-interest expense   2,229       1,715     6,273     5,489  
               
Net Income Before Taxes   54       400     718     1,867  
               
Provision for income taxes   (117 )     165     200     765  
Net income   171       235     518     1,102  
               
  Quarter 
Ended
  Quarter 
Ended
  Quarter 
Ended
  Quarter 
Ended
  9/30/2018   6/30/2018   3/31/2018   12/31/2017
               
Total interest income $ 3,808     $ 3,411   $ 3,115   $ 2,884  
Total interest expense   1,073       1,011     771     639  
Net interest income   2,735       2,400     2,344     2,245  
Provision for loan losses   710       325     305     490  
               
Net interest income after              
provision for loan loss   2,025       2,075     2,039     1,755  
               
Total non-interest income   258       299     295     383  
               
Compensation and benefits   1,280       1,178     1,039     969  
Occupancy and equipment   311       280     260     240  
Professional fees   47       130     133     80  
Data processing service fees   118       103     100     99  
NYS Banking & FDIC Assessment   91       64     55     51  
Other operating expenses   382       379     323     294  
Total non-interest expense   2,229       2,134     1,910     1,733  
               
Net Income Before Taxes   54       240     424     405  
               
Provision for income taxes   (117 )     136     181     521  
Net income   171       104     243     (116 )
               
Basic Earnings per Share $ 0.04     $ 0.03   $ 0.06   $ (0.03 )
               
ES BANCSHARES, INC.              
OTHER FINANCIAL MEASURES            
(In Thousands)              
(Unaudited)              
  Quarter 
Ended
  Quarter 
Ended
  Quarter 
Ended
  Quarter 
Ended
  9/30/2018   6/30/2018   3/31/2018   12/31/2017
Asset Quality              
Allowance for Loan Losses $ 2,833     $ 3,561     $ 3,268     $ 2,982  
Nonperforming Loans / Total Loans   1.0%       0.9%       1.1%       1.2%  
Nonperforming Assets / Total Assets   1.0%       0.9%       1.1%       1.2%  
ALLL / Nonperforming Loans   84.7%       137.8%       110.0%       101.0%  
ALLL / Loans, Gross   0.9%       1.2%       1.2%       1.2%  
               
Capital              
Shares Issue – Basic   3,868,084       3,868,084       3,868,084       3,864,888  
Book Value per Share $ 5.22     $ 5.17     $ 5.14     $ 5.10  
Tangible Book Value per Share $ 5.07     $ 5.02     $ 4.99     $ 4.94  
Tier 1 Capital Ratio   7.83%       8.21%       9.05%       9.45%  
Tier 1 Risk Based Capital Ratio   10.24%       10.84%       11.40%       11.90%  
Total Risk Based Capital Ratio   11.49%       12.09%       12.65%       13.15%  
               
               
  Quarter 
Ended
  Quarter 
Ended
  Quarter 
Ended
  Quarter 
Ended
  9/30/2018   6/30/2018   3/31/2018   12/31/2017
Profitability              
Yield on Average Earning Assets   4.49%       4.24%       4.31%       4.27%  
Cost of Avg. Interest Bearing Liabilities   1.79%       1.76%       1.52%       1.35%  
Net Spread   2.70%       2.47%       2.79%       2.91%  
Net Margin   3.22%       2.98%       3.25%       3.32%  
               

This release may contain certain forward-looking statements within the 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 the control of ES Bancshares, Inc. 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 State Bank Celebrates Its Grand Opening & Ribbon Cutting at Victory Boulevard, Staten Island

Empire State Bank Celebrates Its Grand Opening & Ribbon Cutting at Victory Boulevard with Guest Appearance by Joe Piscopo

Victory Boulevard residents have a new community bank to explore. Empire State Bank welcomed the public to the Grand Opening and Ribbon Cutting and of their newest Banking Center in Staten Island located at 1698 Victory Boulevard, Staten Island/NY 10314. Guests had an inside look at the Bank’s modern design and explore how the new space will bring the Empire experience to Victory Boulevard residents. More than 100 influential members of the Victory Boulevard community gathered inside and outside the new 1,500 square-foot building to mark the momentous occasion. Among those in attendance were Senator Lanza; Congressman Dan Donovan; City Councilman Joe Borelli; Minority Leader Steve Matteo; Republican Vito Fosella, Public Administrator Anthony Catalano; Chairman of the Richmond County Republican Committee Branden Lantry and Ralph Porzio.  Following the ribbon cutting, Empire State Bank presented a $2,500 check donation to Anthony Campitello, President of the Victory Boulevard Merchants Association. 

The event continued with guest appearance by Joe Piscopo, Radio Talk Show Host, for a meet and greet as well as photos. The newest location introduces a new modern design and service to banking. The modern experience begins before the front doors.  A vibrant acrylic wall extends from the left of the building toward the entrance of the Bank. This outdoor space is a key design element which illuminates the ATM and night depository during the evening. Take a step inside of the 1,500 square foot Bank and you will notice a spacious gathering lounge with a large TV, free Wi-Fi, charging station, coffee, tea and locally baked cookies.

Empire State Bank has re-imagined the future of banking, introducing technology to enhance customer experiences and service. Philip Guarnieri, CEO of Empire State Bank noted that “Empire State Bank is dedicated to the community. While most banks focus on technology and convenience, we believe in implementing technology in combination with personal service to connect with our neighbors and support our community.” The Banking Center is equipped with Pods, which are a combination of counters and Automated Teller Machines in place of teller stations where customers are greeted by a Service Associate to assist with your financial needs all in one place, including; making deposits, opening accounts, enrolling in Mobile and Online Banking. While the spacious Banking Center provides service and all-inclusive personal banking, Empire State Bank has designated Hotels, which are private rooms that provide space where you can get answers to your financial matters. Thomas Sperzel, President and COO commented, “Please visit our new Banking Centers and see a nontraditional way of banking, as we continue to provide exceptional customer service.”

Empire State Bank has been providing customers with the utmost level of service, expertise and technology for your business and personal needs. Esmeralda Xheleshi, AVP/Marketing Director noted that that digital content is “largest platform we’ve added to provide educational resources and highlight how we help the community.”

Empire State Bank provides a complete product line including, Free Checking – for Business and Personal, Free Mobile Banking with Mobile Check Deposit, Online Banking with Bill Pay, 24-hour ATM, Remote Deposit Capture Service, Cash Management, Business Loans, Commercial Real Estate Financing and a Night Depository.

Empire State Bank is a member of the FDIC and is an Equal Housing/Equal Opportunity Lender.