STATEN ISLAND, N.Y., May 01, 2023 (GLOBE NEWSWIRE) -- ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today announced financial results for the first quarter of 2023. The Company’s net income was $599 thousand or $0.09 per diluted share for the first quarter of 2023, compared to net income of $843 thousand or $0.12 per diluted share for the fourth quarter of 2022.

Key Financial Data         1Q23 Highlights 
Profitability Metrics1Q23 4Q22 1Q22 • Net Revenues of $4.3 million including $4.2 million of net interest income and $174 thousand of non-interest income 

• Net Income of $599 thousand and earnings per common share of $0.09 

• Average loans increased 6.9% quarter-over-quarter with average total deposits increasing by 4.9% since prior quarter. 

• Uninsured deposits were $108 million, or 22% of total deposits, at the end of the first quarter. As of March 31, 2023, the Company had $70 million of borrowing capacity.

 • Total assets grew to $639 million an increase of $51 million.         		 
Return on average assets (%) 0.40%  0.60% 0.90% 
Return on average common equity (%) 5.40%  7.64% 11.78% 
Return on tangible common equity (%) 5.47%  7.74% 11.96% 
Net interest margin (%) 2.89%  3.26% 3.47% 
     
Income Statement (a)1Q23 4Q22 1Q22 
Net interest income$4,159 $4,404 4,361 
Non-interest income$174 $357 504 
Net income$599 $843 1,180 
Earnings per share- Basic$0.09 $0.13 0.18 
Earnings per share- Diluted$0.09 $0.12 0.17 
     
Balance Sheet (a)1Q23 4Q22 1Q22 
Average total loans$529,041 $494,728 414,336 
Average total deposits$465,809 $443,988 449,034 
Book value per share$6.67 $6.55 6.04 
Tangible book value per share$6.59 $6.47 5.96 
(a) In thousands except for per share amounts 

Phil Guarnieri, Chief Executive Officer and Director of ES Bancshares, Inc. commented on the quarter stating, “The first quarter of 2023 was a challenging environment for the financial sector with rates continuing to increase and market fears of a banking crisis. At the same time ESBS continued to demonstrate its strength as a Community Bank leaning on its relationship-oriented business model with loan growth of 6% and deposit inflows of 8%. Continuing strong results should allow for us to compound book value and build for long term success.

While we saw improved asset quality ratios and controlled expenses during the quarter, the strong core organic results were offset by higher-than-expected funding costs resulting in a net revenue decrease. As we progress through the year, we will look to continue to reduce high-cost funding only improving the positioning of the institution for uncertain headwinds.

Tom Sperzel, President, Chief Operating Officer and Director of ES Bancshares, Inc. added, “The conservative balance sheet and prudent risk management processes of the Company have allowed for continued execution of the Company’s strategic plan.”

Selected Balance Sheet Information:
As of March 31, 2023, total assets were $639.4 million, an increase of $51.5 million, or 9%, as compared to total assets of $587.9 million on December 31, 2022. The increase can be attributed to growth of the loan portfolio and an increased cash position which stemmed from deposit inflows and increased Federal Home Loan Bank (FHLB) borrowings.

Loans receivable, net of allowance for credit losses totaled $538.4 million, an increase of $31.7 million or 6% from December 31, 2022, due to loan originations. The Company adopted the CECL methodology for calculating credit losses effective January 1, 2023. The adoption resulted in an increase of $137 thousand to retained earnings. As of March 31, 2023, the Allowance for Credit Losses as a percentage of gross loans was 0.90%.

Nonperforming assets, which includes nonaccrual loans and repossessed assets were $1.2 million or 0.19% of total assets, as of March 31, 2023, improving from $1.3 million or 0.25% of total assets at December 31, 2022. The ratio of nonaccrual loans to loans receivable was 0.17% and 0.28%, as of March 31, 2023, and December 31, 2022, respectively.

Total liabilities increased $50.7 million to $594.6 from $543.9 million, due to an increase in funding across deposits and FHLB advances. Deposits increased $37.2 million, or 8% to $487.0 million as of March 31, 2023, when compared to December 31, 2022. The increase in deposits aided in reducing the loans-to-deposit ratio to 111.6%, down from 114.0%. FHLB advances increased $13.1 million to increase cash liquidity.

As of March 31, 2023, the Bank's Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 9.65%, 13.87%, 13.87% and 15.12%, respectively, all in excess of the ratios required to be deemed "well-capitalized." As of March 31, 2023, ES Bancshares return on average equity and return on tangible equity was 5.40% and 5.47% respectively compared to 7.71% and 7.82% for the quarter ending December 31, 2022. Goodwill was $581 thousand as of March 31, 2023, and December 31, 2022.

Financial Performance Overview:
For the three months ended March 31, 2023, net income totaled $599 thousand, which reflects a decrease of $244 thousand, in comparison to $843 thousand for the three months ended December 31, 2022. The decrease can be attributed to increased cost of funding.

Net interest income for the three months ended March 31, 2023, decreased $245 thousand, to $4.2 million from $4.4 million at December 31, 2022. The Company’s net interest margin decreased by 37 basis points to 2.89% for the three months ended March 31, 2023, as compared to 3.26% for the three months ended December 31, 2022. The decrease can be attributed to increased cost of funds as a result of higher levels of FHLB advances and interest-bearing deposits, in a rising rate environment.

There was a $17 thousand benefit for loan credit losses entry for the three months ended March 31, 2023, compared to $99 thousand provision entry for the three months ended December 31, 2022. Net charge offs for the three months ended March 31, 2023, totaled $239 thousand.

Non-interest income decreased $183 thousand, to $174 thousand for the three months ended March 31, 2023, compared with non-interest income of $357 thousand for the three months ended December 31, 2022. The decrease can be attributed to less loan fees collected and a fourth quarter 2022 sale of a repossessed asset which did not reoccur in the first quarter of 2023.

Non-interest expense totaled $3.6 million for the three months ended March 31, 2023, compared to $3.5 million for the three months ended December 31, 2022, or an increase of 2.3%. The increase in non-interest expense can be attributed to increased occupancy and equipment expenses and increased professional fees offset by decreased data processing service fees.

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)
  March 31,
2023		December 31,
2022		 March 31,
2022
  (unaudited)(unaudited) (Audited)
Assets     
Cash and cash equivalents$57,827 38,115  87,394 
Securities 15,629 16,042  17,064 
Loans receivable, net:     
Real estate mortgage loans 521,696 494,064  382,333 
Commercial and Lines of Credit 17,018 14,110  28,701 
Construction Loans - -  600 
Home Equity and Consumer Loans 358 465  3,600 
Deferred costs 4,213 3,953  2,811 
Allowance for Loan Credit Losses (4,882)(5,860) (5,758)
Total loans receivable, net 538,403 506,732  412,287 
Investment in restricted stock, at cost 5,368 4,779  2,505 
Bank premises and equipment, net 6,037 6,209  6,763 
Accrued interest receivable 2,338 2,020  1,755 
Goodwill 581 581  581 
Repossessed assets 164 -  352 
Bank Owned Life Insurance 5,236 5,202  5,101 
Other Assets 7,844 8,175  8,286 
Total Assets$639,427 587,855  542,088 
      
Liabilities & Stockholders' Equity     
Non-Interest-Bearing Deposits 135,680 132,997  143,004 
Interest-Bearing Deposits 311,800 276,174  294,074 
Brokered Deposits 39,504 40,627  19,749 
Total Deposits 486,984 449,798  456,827 
Bond Issue, net of costs 13,678 13,666  13,637 
Borrowed Money 78,000 64,900  15,000 
Other Liabilities 15,954 15,490  16,346 
Total Liabilities 594,616 543,854  501,810 
Stockholders' equity 44,811 44,001  40,278 
Total liabilities and stockholders' equity$639,427 587,855  542,088 


 ES Bancshares, Inc.
Consolidated Statement of Income
(in thousands)

 Three Months Ended
 March 31,
2023		December 31,
2022		 March 31,
2022
 (unaudited)(unaudited) (unaudited)
Interest income    
Loans$6,064 $5,652 $4,771 
Securities 113  137  91 
Other interest-earning assets 367  228  64 
Total Interest Income 6,544  6,017  4,926 
Interest expense    
Deposits 1,616  1,068  294 
Borrowings 768  545  271 
Total Interest Expense 2,384  1,613  565 
Net Interest Income 4,160  4,404  4,361 
(Benefit)/Provision for Loan Credit Losses (17) 99  (113)
Net Interest Income after (Benefit)/Pro for Loan Losses 4,177  4,305  4,474 
Non-interest income    
Deposit service charges 80  91  84 
Loan fee income 57  146  141 
Gain on Loan Sales -  -  241 
Other 37  120  38 
Total non-interest income 174  357  504 
Non-interest expenses    
Compensation and benefits 1,855  1,881  1,721 
Occupancy and equipment 641  554  689 
Data processing service fees 302  386  260 
Marketing 99  77  108 
Professional fees 219  179  255 
NYS Banking & FDIC Assessments 55  56  82 
Printing & Office Supplies 57  68  44 
Insurance 45  53  38 
Other 299  238  275 
Total non-interest expense 3,572  3,492  3,472 
Income prior to tax expense 778  1,170  1,506 
Income taxes 179  327  326 
Net Income$599 $843 $1,180 


 For the Three Months Ended (dollars in thousands)
 March 31, 2023December 31, 2022March 31, 2022
 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$529,041$6,0644.58%$494,728$5,6524.57%$417,386$4,7714.57%
Investment securities 15,979 1132.83% 22,678 1372.42% 12,574 912.90%
Interest-bearing deposits 27,170 2874.23% 19,536 1623.32% 66,837 320.19%
Restricted investment in bank stock 4,290 807.46% 3,652 667.20% 2,452 325.26%
Total interest-earning assets 576,480 6,5444.54% 540,594 6,017
4.45% 499,250 4,9263.95%
Non-interest earning assets 17,355   17,871   19,334  
Total assets$593,835  $558,465  $518,584  
Liabilities and Stockholders' Equity         
Interest-bearing liabilities:         
Interest-bearing checking$30,193$340.46%$32,065$350.44%$31,583$300.39%
Money market accounts 5,794 30.21% 7,201 40.25% 9,415 40.19%
Savings accounts 110,995 3201.17% 108,170 2210.81% 167,118 1180.29%
Certificates of deposit 190,984 1,2592.67% 155,086 8082.07% 88,816 1420.65%
Total interest-bearing deposits 337,966 1,6161.94% 302,522 1,0681.40% 296,932 2940.40%
Borrowings 55,415 5474.00% 40,980 3243.14% 15,116 501.35%
Subordinated debenture 13,672 2216.56% 13,663 2216.42% 13,632 2216.56%
Total interest-bearing liabilities 407,053 2,3842.38% 357,165 1,6131.79% 325,680 5650.70%
Non-interest-bearing demand deposits 127,843   141,466   139,583  
Other liabilities 14,617   16,121   15,235  
Total non-interest-bearing liabilities 142,460   157,587   154,818  
Stockholders' equity 44,322   43,713   38,086  
Total liabilities and stockholders' equity$593,835  $558,465  $518,584  
Net interest income $4,160  $4,404  $4,361 
Average interest rate spread  2.17%  2.66%  3.24%
Net interest margin  2.89%  3.26%  3.49%
          


Five Quarter
Performance Ratio Highlights

Three Months Ended
March 31,
2023		December 31,
2022		September 30,
2022		June 30,
2022		March 31,
2022
Income Statement     
 Return on Average Assets 0.40% 0.60% 0.65% 1.73% 0.90%
 Return on Average Equity 5.40% 7.71% 8.12% 22.83% 11.78%
 Return on Average Tangible Equity 5.47% 7.82% 8.23% 23.15% 11.96%
 Efficiency Ratio 53.18% 54.78% 60.97% 52.56% 68.27%
Yields / Costs     
 Average Yield - Interest Earning Assets 4.54% 4.45% 4.07% 3.82% 3.95%
 Cost of Funds 2.38% 1.79% 1.21% 0.73% 0.69%
 Net Interest Margin 2.89% 3.26% 3.27% 3.34% 3.47%
Capital Ratios     
 Equity / Assets 7.01% 7.48% 7.68% 7.85% 7.43%
 Tangible Equity / Assets 6.92% 7.39% 7.59% 7.75% 7.33%
 Tier 1 leverage ratio (a) 9.65% 10.11% 10.3% 9.9% 10.0%
 Common equity Tier I capital ratio (a) 13.87% 14.26% 14.7% 15.8% 15.5%
 Tier 1 Risk-based capital ratio (a) 13.87% 14.26% 14.7% 15.8% 15.5%
 Total Risk-based capital ratio (a) 15.12% 15.51% 16.0% 17.0% 16.8%
Stock Valuation     
 Book Value$6.67 $6.55 $6.47 $6.37 $6.04 
 Tangible Book Value$6.59 $6.47 $6.39 $6.28 $5.96 
 Shares Outstanding (b) 6,714  6,714  6,666  6,663  6,663 
Asset Quality     
 ALLL / Total Loans 0.90% 1.14% 1.20% 1.37% 1.38%
 Non-Performing Loans / Total Loans 0.17% 0.28% 0.34% 0.38% 0.42%
 Non-Performing Assets / Total Assets 0.19% 0.25% 0.31% 0.37% 0.39%
       
 (a) Ratios at Bank level                   (b) Shares outstanding presented in thousands   

 


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Source: ES Bancshares, Inc.

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