STATEN ISLAND, N.Y., Jan. 30, 2024 (GLOBE NEWSWIRE) -- ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today announced financial results for the fourth quarter of 2023. The Company’s net income was $84 thousand or $0.01 per diluted share for the fourth quarter of 2023, compared to net income of $133 thousand or $0.02 per diluted share for the third quarter of 2023.

Key Quarterly Financial Data2023 Annual Highlights
Profitability Metrics 4Q23  3Q23  4Q22   
Return on average assets (%) 0.05% 0.09% 0.60%  • Net Income of $1.5 million and earnings per diluted share of $0.22.
Return on average common equity (%) 0.73% 1.17% 7.71% 
Return on tangible common equity (%) 0.74% 1.18% 7.82%  
Net interest margin (%) 2.28% 2.67% 3.26% • Average loans increased 15.1% year-over-year with average total deposits increasing by 5.9% within the same period.
           
Income Statement (a) 4Q23  3Q23  4Q22   
Net interest income$3,454 $3,977 $4,404   • Net interest margin of 2.67% narrowed from 3.34% year-over-year as increases to the rates paid on interest-bearing liabilities outpaced the rise in yields of interest-earning assets  
Non-interest income$322 $256 $357  
Net income$84 $133 $843   
Earnings per share- Basic$0.01 $0.02 $0.13   • Non-Performing Loans / Total Loans and the Company’s ratio of Non-Performing Assets / Total Assets each improved to 0.22% at December 31, 2023 
Earnings per share- Diluted$0.01 $0.02 $0.12  
            
Balance Sheet (a) 4Q23  3Q23  4Q22   
Average total loans$569,515 $555,919 $494,728   
Average total deposits$470,394 $487,816 $43,988   
Book value per share$6.83 $6.79 $6.55   
Tangible book value per share$6.74 $6.71 $6.47   
(a) In thousands except for per share amounts
 

“While our recent returns have been impacted by the current interest rate environment, we are dedicated to analyzing, adapting, and implementing strategies that will ensure a positive trajectory for our Company. We continue to be focused on providing increased value to shareholders in the future,” said Phil Guarnieri, Director and Chief Executive Officer of ES Bancshares.

Mr. Guarnieri also stated “Looking ahead I am optimistic about the Bank’s early success seen in the fourth quarter, regarding the reduction of operating expenses and the new customer relationship wins, since the launch of our low-cost deposit gathering program. These endeavors combined with the improvements seen in the fourth quarter asset quality ratios, present a promising future for ESBS.”

Selected Balance Sheet Information:

December 31, 2023 vs. December 31, 2022

As of December 31, 2023, total assets were $639.0 million, an increase of $51.1 million, or 8.7%, as compared to total assets of $587.9 million on December 31, 2022. The increase can be attributed to loan portfolio growth primarily, funded by deposit inflows.

Loans receivable, net of Allowance for Credit Losses on Loans totaled $563.9 million, an increase of $57.2 million from December 31, 2022. As of December 31, 2023, 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 $1.4 million or 0.22% of total assets, as of December 31, 2023, decreasing from $1.5 million or 0.25% of total assets at December 31, 2022. The ratio of nonaccrual loans to loans receivable was 0.22% and 0.28%, as of December 31, 2023, and December 31, 2022, respectively.

Total liabilities increased $49.3 million to $593.1 from $543.8 million. The majority of the increase can be attributed to deposit inflows with overall deposits growing $44.3 million, or 9.9% to $494.1 million as of December 31, 2023, compared to $449.8 million at December 31, 2022. The growth in deposits was driven by an increase in Interest-bearing deposits. Federal Home Loan Bank (“FHLB”) borrowings increased by $5.9 million or 9.1% to $70.8 million at December 31, 2023. Borrowed funds represented 11.1% of total assets at December 31, 2023, an increase of 0.1% from December 31, 2022.

As of December 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 9.45%, 13.60%, 13.60% and 14.85%, respectively, all in excess of the ratios required to be deemed "well-capitalized." During 2023 the Company did not repurchase shares under its stock repurchase program. Book value per common share was $6.83 at December 31, 2023 compared to $6.55 at December 31, 2022. Tangible common book value per share (which represents common equity less goodwill, divided by the number of shares outstanding) was $6.74 at December 31, 2023 compared to $6.47 at December 31, 2022.

Financial Performance Overview:

Three Months Ended December 31, 2023 vs. September 30, 2023

For the three months ended December 31, 2023, net income totaled $84 thousand compared to $133 thousand for the three months ended September 30, 2023. The decrease can be attributed to a softer margin quarter over quarter.

Net interest income for the three months ended December 30, 2023, decreased $524 thousand, to $3.5 million from $4.0 million at three months ended September 30, 2023. The Company’s net interest margin compacted, decreasing by thirty-nine basis points to 2.28% for the three months ended December 31, 2023, as compared to 2.67% for the three months ended September 30, 2023. The contraction can be attributed to increased pricing pressures for retail deposits and increased average balance associated with FHLB borrowings.

There was a reversal of credit losses of $83 thousand taken back in for the three months ended December 31, 2023, compared to $86 thousand provision for credit losses entry for the three months ended September 30, 2023.

Non-interest income increased $66 thousand, to $322 thousand for the three months ended December 31, 2023, compared with non-interest income of $256 thousand for the three months ended September 30, 2023. The increase is a result from increased loan charges and fees earned quarter over quarter.

Non-interest expense totaled $3.8 million for the three months ended December 30, 2023, compared to $4.0 million for the three months ended September 30, 2023, or a decrease of 5.7%. The decrease in non-interest expense can be attributed to cost cutting initiatives. In addition, certain expenses associated with negotiated buyouts and accelerations for certain software providers that were expensed in the third quarter did not re-occur in the fourth quarter of 2023.

Year ended December 31, 2023 vs. December 31, 2022

For the year ended December 31, 2023, net income totaled $1.5 million a decrease of $3.8 million in comparison to $5.3 million for the year ended December 31, 2022. The decrease can mainly be attributed increased interest expense costs and a branch sale that occurred in the second quarter of 2022, that did not re-occur in 2023.

Net interest income for the year ended December 31, 2023, decreased $1.5 million, to $15.9 million from $17.4 million at December 31, 2022. The decrease aligns with the compression seen in the net interest margin driven by an unfavorable deposit composition shift and increased average borrowings year over year.

The Company recorded an $20 thousand provision for credit losses for the year ended December 31, 2023, compared to a $79 thousand reversal for the year ended December 31, 2022.

Non-interest income totaled $1.1 million for the year ended December 31, 2023, compared with non-interest income of $3.2 million for the year ended December 31, 2022. The decrease can be attributed to the aforementioned branch sale.

Non-interest expense totaled $15.0 million for the year ended months ended December 31, 2023, compared to $13.8 million for the year ended December 31, 2022, or an increase of $1.2 million or 8.7%. The ratio of non-interest expense to average assets was 2.43% for the year ended December 31, 2023, compared to 2.54% for the year ended December 31, 2022.

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, 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)
  December 31,September 30, December 31,
  202320232022
  |----(unaudited)----|  
Assets     
Cash and cash equivalents$32,728 29,439  38,115 
Securities 15,220 15,143  16,042 
Loans receivable, net:     
Real estate mortgage loans 551,124 543,852  493,768 
Commercial and Lines of Credit 13,107 14,322  14,344 
Home Equity and Consumer Loans349 348  718 
Deferred costs 4,427 4,362  3,762 
Allowance for Loan Credit Losses (a)(5,086)(5,028) (5,860)
Total loans receivable, net 563,921 557,856  506,732 
Investment in restricted stock, at cost 5,191 5,782  4,779 
Bank premises and equipment, net 5,600 5,608  6,209 
Accrued interest receivable 2,625 2,533  2,020 
Goodwill 581 581  581 
Repossessed assets - 164  - 
Bank Owned Life Insurance 5,341 5,305  5,202 
Other Assets 7,780 7,905  8,175 
Total Assets$638,987 630,316  587,855 
      
Liabilities & Stockholders' Equity     
Non-Interest-Bearing Deposits 109,065 125,562  129,641 
Interest-Bearing Deposits 328,479 302,509  279,530 
Brokered Deposits 56,581 42,873  40,627 
Total Deposits 494,125 470,944  449,798 
Borrowed Money 70,805 83,980  64,900 
Bond Issue, net of costs 13,708 13,701  13,666 
Other Liabilities 14,487 16,085  15,490 
Total Liabilities 593,125 584,710  543,854 
Stockholders' equity 45,862 45,606  44,001 
Total liabilities and stockholders' equity$638,987 630,316  587,855 
(a) The Company adopted ASC 326- Current Expected Credit Losses (CECL) effective 1/1/2023 resulting in a recapture of reserve through Retained Earnings
         


 ES Bancshares, Inc.
 Consolidated Statements of Income
 (in thousands)
 Three Months Ended Years Ended
 December 31, 2023September 30, 2023 December 31, 2022 December 31, 2023December 31, 2022
 |--------------(unaudited)--------------| |---(unaudited)---|   
Interest income       
Loans$7,059 $6,715  $5,652  $26,343 $20,038 
Securities 110  111   137   446  563 
Other interest-earning assets 278  319   228   1,418  613 
Total Interest Income 7,447  7,145   6,017   28,207  21,214 
Interest expense       
Deposits 2,945  2,459   1,068   9,052  2,352 
Borrowings 1,048  710   545   3,268  1,484 
Total Interest Expense 3,993  3,169   1,613   12,320  3,836 
Net Interest Income 3,454  3,977   4,404   15,887  17,378 
(Reversal of)Prov for Credit Losses (83) 86   99   20  (79)
Net Interest Income after (Revrsl)Prov for Credit Losses 3,537  3,891   4,305   15,867  17,457 
Non-interest income       
Service charges and fees 254  205   237   762  793 
Gain on loan sales 30  12   -   168  241 
Gain on sale of repossessed assets -  -   -   -  206 
Gain on sale of banking center -  -   -   -  1,782 
Other 38  39   120   149  148 
Total non-interest income 322  256   357   1,080  3,170 
Non-interest expenses       
Compensation and benefits 1,745  1,856   1,881   7,408  7,267 
Occupancy and equipment 646  729   554   2,656  2,631 
Data processing service fees 357  397   386   1,396  1,181 
Professional fees 357  315   179   1,104  833 
FDIC & NYS Banking Assessments 88  71   56   272  225 
Advertising 101  107   77   406  250 
Insurance 51  54   53   190  176 
Printing & Office Supplies 27  31   68   154  186 
Other 378  415   238   1,449  1,082 
Total non-interest expense 3,750  3,975   3,492   15,035  13,831 
          Income prior to tax expense 109  172   1,170   1,912  6,796 
Income taxes 25  39   327   440  1,547 
          Net Income$84 $133  $843  $1,472 $5,249 
        


  ES Bancshares, Inc.
  Average Balance Sheet Data
  For the Three Months Ended (dollars in thousands)
  December 31, 2023September 30, 2023December 31, 2022
  Avg BalInterest   Avg BalInterest   Avg BalInterest   
  RollingRolling AverageRollingRolling AverageRollingRolling Average
Assets 3 Mos.3 Mos.Yield/Cost3 Mos.3 Mos.Yield/Cost3 Mos.3 Mos.Yield/Cost
Interest-earning assets:          
Loans receivable $569,515 $7,059  4.96%$555,919 $6,715  4.83%$494,728 $5,652  4.57%
Investment securities  15,957  110  2.75% 16,151  111  2.75% 22,678  137  2.42%
Interest bearing deposits  14,716  154  4.09% 20,260  231  4.56% 19,536  162  3.32%
Restricted investment in bank stock  5,412  124  9.18% 4,273  88  8.24% 3,652  66  7.20%
Total interest-earning assets  605,600  7,447  4.92% 596,602  7,145  4.79% 540,594  6,017  4.45%
Non-interest earning assets  16,840    17,371    17,871   
Total assets $622,440   $613,973   $558,465   
Liabilities and Stockholders' Equity          
Interest-bearing liabilities:          
Interest-bearing checking $25,368 $23  0.36%$29,162 $28  0.38%$32,065 $35  0.44%
Money market accounts  2,651  3  0.38% 4,060  4  0.42% 7,201  4  0.25%
Savings accounts  120,990  881  2.89% 117,790  532  1.79% 108,170  221  0.81%
Certificates of deposit  207,091  2,037  3.90% 212,094  1,895  3.54% 155,086  808  2.07%
Total interest-bearing deposits  356,101  2,945  3.28% 363,105  2,459  2.69% 302,522  1,068  1.40%
Borrowings  76,844  827  4.27% 51,557  488  3.76% 40,980  324  3.14%
Subordinated debenture  13,705  221  6.40% 13,695  222  6.41% 13,663  221  6.42%
Total interest-bearing liabilities  446,649  3,993  3.55% 428,357  3,168  2.93% 357,165  1,613  1.79%
Non-interest-bearing demand deposits  114,293    124,711    141,466   
Other liabilities  15,803    15,348    16,121   
Total non-interest-bearing liabilities  130,096    140,059    157,587   
Stockholders' equity  45,695    45,557    43,713   
Total liabilities and stockholders' equity $622,440   $613,973   $558,465   
Net interest income  $3,454   $3,977   $4,404  
Average interest rate spread    1.37%   1.86%   2.66%
Net interest margin    2.28%   2.67%   3.26%
           
           


Five Quarter
Performance Ratio Highlights		Three Months Ended
December 31, 2023September 30, 2023June 30, 2023March 31, 2023December 31, 2022
Income Statement               
Return on Average Assets 0.05% 0.09% 0.42% 0.40% 0.60%
Return on Average Equity 0.73% 1.17% 5.81% 5.40% 7.71%
Return on Average Tangible Equity 0.74% 1.18% 5.89% 5.47% 7.82%
Efficiency Ratio 99.31% 93.89% 80.86% 82.42% 75.03%
Yields / Costs     
Average Yield - Interest Earning Assets 4.92% 4.79% 4.70% 4.54% 4.45%
Cost of Funds 3.55% 2.93% 2.53% 2.38% 1.79%
Net Interest Margin 2.28% 2.67% 2.86% 2.89% 3.26%
Capital Ratios     
Equity / Assets 7.18% 7.24% 7.24% 7.01% 7.48%
Tangible Equity / Assets 7.09% 7.15% 7.15% 6.92% 7.39%
Tier I leverage ratio (a) 9.45% 9.54% 9.40% 9.65% 10.11%
Common equity Tier I capital ratio (a) 13.60% 13.47% 13.67% 13.87% 14.26%
Tier 1 Risk-based capital ratio (a) 13.60% 13.47% 13.67% 13.87% 14.26%
Total Risk-based capital ratio (a) 14.85% 14.63% 14.92% 15.12% 15.51%
Stock Valuation     
Book Value$6.83 $6.79 $6.77 $6.67 $6.55 
Tangible Book Value$6.74 $6.71 $6.68 $6.59 $6.47 
Shares Outstanding (b) 6,714  6,714  6,714  6,714  6,714 
Asset Quality     
ACL / Total Loans 0.89% 0.89% 0.89% 0.90% 1.14%
Non Performing Loans / Total Loans 0.22% 0.25% 0.25% 0.17% 0.28%
Non Performing Assets / Total Assets 0.22% 0.25% 0.25% 0.19% 0.25%
      
(a) Ratios at Bank level      (b) Shares information presented in thousands
      

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Source: ES Bancshares, Inc.

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