STATEN ISLAND, N.Y., Nov. 18, 2022 (GLOBE NEWSWIRE) -- ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today announced net income of $872 thousand, or $0.13 per diluted common share for the quarter ended September 30, 2022. 


Key Financial Data 3Q22 Highlights
Profitability Metrics3Q222Q223Q21 
Return on average assets (%) 0.65% 1.73% 0.95%• Net Revenues of $4.5 million including $4.2 million of net interest income and $266 thousand of non-interest income   
Return on average common equity (%) 8.12% 22.83% 12.98%
Return on tangible common equity (%) 8.23% 23.15% 13.18%• Net Income of $872 thousand and diluted earnings per common share of $0.13  
Net interest margin (%) 3.27% 3.34% 3.63%
    
Income Statement (a)3Q222Q223Q21• Average loans increased 8% quarter-over-quarter with average total deposits decreasing of 6% since prior quarter. The decrease can be attributed to the sale of the Newburgh branch location that completed late during 2Q.   
Net interest income$4,242 $4,371 $4,532 
Non-interest income$266 $2,043 $478 
Net income$872 $2,354 $1,217 
Diluted earnings per common share$0.13 $0.35 $0.18 
    • ES Bancshares reports 11.3% asset growth during the quarter. 
Balance Sheet (a)3Q222Q223Q21
Average total loans$456,085 $423,431 $439,967 • Core conversion was successfully completed during the 3Q   
Average total deposits$431,600 $460,624 $425,553 
Book value per common share$6.47 $6.37 $5.71 
(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 organic growth we have demonstrated continues, producing another quarter of solid financial performance for ES Bancshares. The Company saw strong loan growth during the quarter while increasing the non-interest-bearing deposit relationships by 15% comparably. Further, I am proud of the results seen in our Brooklyn locations as we continue to enhance our franchise in an extremely competitive market. In addition, our commitment to the local marketplace and relationships with small businesses was supported by 27% quarter over quarter growth, within our attorney escrow deposit products.

With the rapidly changing environment we remain encouraged by our strong asset quality and our consistent underwriting principles. Both of which have been pillars of the Company driving solid performance the past years. These same principles will allow the organization to weather the uncertain economic times and any change in the business cycle.”

Tom Sperzel, President, Chief Operating Officer and Director of ES Bancshares, Inc. added, “We are pleased to be able to grow the balance sheet while preserving NIM and controlling overhead, thus maintaining a strong level of core earnings.”

Phil Guarnieri further stated, “We are excited for the strong momentum across our Company as we look to close out 2022 with record earnings and core growth.”

Selected Balance sheet Information
As of September 30, 2022, total assets were $561.8 million, an increase of $46.1 million, or 8.9%, as compared to total assets of $515.7 million on December 31, 2021. Loans receivable totaled $478.9 million, an increase of $50.8 million from December 31, 2021. The increase in loans receivable was attributable to higher loan originations fueled by organic deposit growth.

Asset quality remains strong with the allowance for loan loss remaining relatively unchanged from prior quarter. The allowance for loan losses represented 1.20%, 1.37%, and 1.33% of loans receivable as of September 30, 2022, December 31, 2021, and September 30, 2021, respectively.

Nonperforming assets, which includes nonaccrual loans and repossessed assets were $1.7 million as of September 30, 2022, $1.9 million as of December 31, 2021, and $2.0 million as of September 30, 2021. Nonperforming assets as a percentage of total assets were 0.31% as of September 30, 2022, 0.38% as of December 31, 2021, and 0.39% as of September 30, 2021. The ratio of nonaccrual loans to loans receivable was 0.34%, 0.38% and 0.43%, as of September 30, 2022, December 31, 2021, and September 30, 2021, respectively.

Total deposits increased $54.9 million, or 13.8% to $452.9 million as of September 30, 2022, from $398.0 million on June 30, 2022, and $19.3 million or 4.4% from December 31, 2021. The increase quarter over quarter reflects strong adherence to management’s strategic plan seeing growth in deposits from the Bank’s retail locations supplemented, in part, by brokered deposits.

As of September 30, 2022, the Bank's Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 10.33%, 14.71%, 14.71% and 15.96%, respectively, all in excess of the ratios required to be deemed "well-capitalized." As of September 30, 2022, ES Bancshares, return on average equity and return on tangible equity was 8.12% and 8.23% respectively. Goodwill was $581 thousand as of September 30, 2022, and December 31, 2021.

Financial Performance Overview:
For the three months ended September 30, 2022, net income totaled $872 thousand, which reflects a decrease of $1.5 million, in comparison to $2.4 million for the three months ended June 30, 2022. During the second quarter on June 24, 2022, the Bank sold its Newburgh branch location resulting in one-time income of $1,782.

Net interest income for the three months ended September 30, 2022, decreased by $129 thousand to $4.24 million from $4.37 million at June 30, 2022. The Company’s net interest margin tightened by seven basis points, decreasing to 3.27% for the three months ended September 30, 2022, as compared to 3.34% for the three months ended June 30, 2022. The decrease can be attributed to increased cost of funds and less Paycheck Protection Program income earned. During the third quarter, PPP income was $83 thousand, a decrease of $156 thousand from $239 thousand collected in the second quarter of 2022.

There was a $4 thousand provision for loan losses for the three months ended September 30, 2022, compared to a benefit for loan losses of $65 thousand for the three months ended June 30, 2022. Net recoveries for the three months ended September 30, 2022 totaled $4 thousand.

Non-interest income decreased $1.8 million, to $266 thousand for the three months ended September 30, 2022, compared with non-interest income of $2.0 million for the three months ended June 30, 2022. The decrease is a result from the gain on sale associated with the abovementioned branch sale.

Non-interest expense totaled $3.38 million for the three months ended September 30, 2022, compared to $3.49 million for the three months ended June 30, 2022, or a decrease of 3%. The decrease in non-interest expense can be attributed to reduced operating costs and improved NYS Banking & FDIC assessment costs.

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 administrative headquarters in Staten Island, New York, and other administrative offices throughout the state along with business derived from our five Banking Center locations and two loan production offices. 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 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 ES Bancshares, Inc’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.

Investor Contact:
Peggy Edwards, Corporate Secretary
(845) 451-7825

ES Bancshares, Inc.
Consolidated Statement of Financial Condition
(in thousands)
       
  September 30,
2022		 June 30,
2022		 December 31,
2021
  (unaudited) (unaudited) (audited)
Assets      
Cash and cash equivalents$30,481  27,221  59,078 
Securities 32,622  33,258  11,192 
Loans receivable, net:      
Real estate mortgage loans 459,916  400,502  378,126 
Commercial and Lines of Credit 14,484  16,725  41,879 
Construction Loans -  600  560 
Home Equity and Consumer Loans 668  2,983  5,187 
Deferred costs 3,828  3,269  2,353 
Allowance for loan losses (5,760) (5,756) (5,869)
Total loans receivable, net 473,136  418,323  422,236 
Investment in restricted stock, at cost 3,432  3,433  2,502 
Bank premises and equipment, net 5,776  5,628  6,427 
Accrued interest receivable 1,975  1,685  1,827 
Goodwill 581  581  581 
Repossessed assets 117  235  - 
Bank Owned Life Insurance 5,168  5,134  5,067 
Other Assets 8,474  9,219  6,781 
Total Assets$561,762  504,717  515,691 
       
Liabilities & Stockholders' Equity      
Non-Interest-Bearing Deposits 150,677  131,481  149,769 
Interest-Bearing Deposits 263,217  246,827  273,876 
Brokered Deposits 39,051  19,727  10,040 
Total Deposits 452,945  398,035  433,685 
Bond Issue 14,000  14,000  14,000 
Borrowed Money 35,000  35,000  15,169 
Other Liabilities 16,665  15,229  13,590 
Total Liabilities 518,610  462,264  476,444 
Stockholders' equity 43,152  42,453  39,247 
Total liabilities and stockholders' equity$561,762  504,717  515,691 


    ES Bancshares, Inc.
Consolidated Statement of Income
(in thousands)
  Three Months Ended Nine Months Ended
  September 30,
2022		 June 30,
2022		 March 31,
2022		 September 30,
2022		 September 30,
2021
  (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Interest income         
Loans$4,943  4,672  4,771 $14,386  15,012
Securities 172  163  91  426  88
Other interest-earning assets 164  157  64  385  202
Total Interest Income 5,279  4,992  4,926  15,197  15,302
Interest expense        
Deposits 643  347  294  1,284  1,072
Borrowings 394  274  271  939  1,041
Total Interest Expense 1,037  621  565  2,223  2,113
Net Interest Income 4,242  4,371  4,361  12,974  13,189
(Benefit)/Prov for Loan Losses -  (65) (113) (178) 590
Net Interest Income after (Benefit)/Prov for Loan Losses
 4,242  4,436  4,474  13,152  12,599
               
Non-interest income            
Deposit service charges 84  88  84  256  338
Loan fee income 83  76  141  300  221
Gain on Loan Sales -  -  241  241  248
Gain on Branch Sale -  1,782  -  1,782  -
Other 99  97  38  234  48
Total non-interest income 266  2,043  504  2,813  855
Non-interest expenses          
Compensation and benefits 1,826  1,839  1,721  5,386  4,838
Occupancy and equipment 722  666  689  2,077  1,807
Data processing service fees 345  262  260  867  625
Marketing (35) 100  108  173  205
Professional fees 194  205  255  654  498
NYS & FDIC Assessments14  73  82  169  227
Printing & Office Supplies 45  29  44  118  112
Insurance 53  32  38  123  100
Other 217  280  275  772  844
Total non-interest expense 3,381  3,486  3,472  10,339  9,256
           Income prior to tax expense1,127  2,993  1,506  5,626  4,198
Income taxes 255  639  326  1,220  912
Net Income$872  2,354  1,180 $4,406  3,286


 For the Three Months Ended (dollars in thousands)
 September 30, 2022June 30, 2022September 30, 2021
 Avg BalInterestAverage Yield/ Cost

Avg BalInterestAverage Yield/Cost

Avg BalInterestAverage Yield/Cost

 Rolling 3 Mos.Rolling 3 Mos.Rolling 3 Mos.Rolling 3 Mos.Rolling 3 Mos.Rolling 3 Mos.
Assets         
Interest-earning assets:         
Loans receivable$456,085$4,9434.33%$423,431$4,6724.41%$439,967$   5,0344.58%
Investment securities 33,194 1722.07% 30,733 1632.12% 4,688 312.64%
FF sold & interest-bearing deposits 27,240 1141.68% 66,337 1220.73% 47,495 290.24%
Restricted investment in bank stock 1,691 5011.78% 2,512 355.61% 2,676 355.22%
Total interest-earning assets 518,209 5,2794.07% 523,014 4,9923.82% 494,826 5,1294.15%
Non-interest earning assets 19,798   22,566   17,595  
Total assets$538,007  $545,580  $512,421  
Liabilities and Stockholders' Equity         
Interest-bearing liabilities:         
Interest-bearing checking$32,736$340.41%$33,728$340.40%$27,577$300.43%
Money market accounts 6,589 30.20% 8,539 40.19% 10,226 50.19%
Savings accounts 134,132 1800.53% 171,387 1330.31% 179,428 1430.32%
Certificates of deposit 117,679 4261.44% 98,101 1760.72% 71,674 1170.65%
Total interest-bearing deposits 291,136 6430.88% 311,755 3470.45% 288,905 2950.41%
Borrowings 35,000 1731.96% 15,667 531.38% 24,624 811.31%
Subordinated debenture 13,655 2216.42% 13,644 2216.41% 13,613 2216.43%
Total interest-bearing liabilities 339,791 1,0371.21% 341,066 6210.73% 327,142 5970.72%
Non-interest-bearing demand deposits 140,464     148,869     136,648    
Other liabilities 14,803   14,395   11,127  
Total non-interest-bearing liabilities 155,267   163,264   147,775  
Stockholders' equity 42,950   41,250   37,504  
      Total liabilities and stockholders' equity$538,007  $545,580  $512,421  
Net interest income $4,242  $4,371  $4,532 
Average interest rate spread  2.86%  3.09%  3.43%
Net interest margin  3.27%  3.34%  3.63%
          
Ratio of average interest-earning assets to average interest-bearing liabilities  152.51%  153.35%  151.26%
          


Five Quarter
Performance Ratio Highlights

Three Months Ended
September 30,
2022		June 30,
2022		March 31,
2022		December 31, 2021September 30, 2021
Income Statement     
 Return on Average Assets 0.65% 1.73% 0.90% 1.04% 0.95%
 Return on Average Equity 8.12% 22.83% 11.78% 13.82% 12.98%
 Return on Average Tangible Equity 8.23% 23.15% 11.96% 14.03% 13.18%
 Efficiency Ratio 60.97% 52.56% 68.27% 62.17% 64.53%
Yields / Costs     
 Average Yield - Interest Earning Assets 4.07% 3.82% 3.95% 4.29% 4.15%
 Cost of Funds 1.21% 0.73% 0.69% 0.71% 0.72%
 Net Interest Margin 3.27% 3.34% 3.47% 3.80% 3.63%
Capital Ratios     
 Equity / Assets 7.68% 7.85% 7.43% 7.61% 7.52%
 Tangible Equity / Assets 7.59% 7.75% 7.33% 7.51% 7.42%
 Tier I leverage ratio (a) 10.3% 9.9% 10.0% 9.9% 9.6%
 Common equity Tier I capital ratio (a) 14.7% 15.8% 15.5% 15.5% 15.6%
 Tier 1 Risk-based capital ratio (a) 14.7% 15.8% 15.5% 15.5% 15.6%
 Total Risk-based capital ratio (a) 16.0% 17.0% 16.8% 16.7% 16.9%
Stock Valuation     
 Book Value$     6.47 $6.37 $6.04 $5.90 $5.71 
 Tangible Book Value$6.39 $6.28 $5.96 $5.82 $5.62 
 Diluted EPS$0.13 $0.35 $0.18 $0.20 $0.18 
 Shares Outstanding (b) 6,666  6,663  6,663  6,648  6,648 
Key Ratios     
 ALLL / Total Loans 1.20% 1.37% 1.38% 1.37% 1.33%
 Non-Performing Loans / Total Loans 0.34% 0.38% 0.42% 0.45% 0.43%
 Non-Performing Assets / Total Assets 0.31% 0.37% 0.39% 0.38% 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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