RERELEASE- ES Bancshares, Inc. Reports Loan Growth of 13% Funded by Deposit Growth of 14%, for the Quarter Ended September 30, 2022; Posts $0.13 Quarterly EPS Increasing Year-to-Date EPS to $0.66; Increases Tangible Book Value to $6.39


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 Metrics 3Q22 2Q22 3Q21  
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) 3Q22 2Q22 3Q21 • 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) 3Q22 2Q22 3Q21
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 Assessments 14     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 expense 1,127     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, 2022 June 30, 2022 September 30, 2021
  Avg Bal Interest Average Yield/ Cost Avg Bal Interest Average Yield/Cost Avg Bal Interest Average 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 $ 4,943 4.33 % $ 423,431 $ 4,672 4.41 % $ 439,967 $    5,034 4.58 %
Investment securities   33,194   172 2.07 %   30,733   163 2.12 %   4,688   31 2.64 %
FF sold & interest-bearing deposits   27,240   114 1.68 %   66,337   122 0.73 %   47,495   29 0.24 %
Restricted investment in bank stock   1,691   50 11.78 %   2,512   35 5.61 %   2,676   35 5.22 %
Total interest-earning assets   518,209   5,279 4.07 %   523,014   4,992 3.82 %   494,826   5,129 4.15 %
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 $ 34 0.41 % $ 33,728 $ 34 0.40 % $ 27,577 $ 30 0.43 %
Money market accounts   6,589   3 0.20 %   8,539   4 0.19 %   10,226   5 0.19 %
Savings accounts   134,132   180 0.53 %   171,387   133 0.31 %   179,428   143 0.32 %
Certificates of deposit   117,679   426 1.44 %   98,101   176 0.72 %   71,674   117 0.65 %
Total interest-bearing deposits   291,136   643 0.88 %   311,755   347 0.45 %   288,905   295 0.41 %
Borrowings   35,000   173 1.96 %   15,667   53 1.38 %   24,624   81 1.31 %
Subordinated debenture   13,655   221 6.42 %   13,644   221 6.41 %   13,613   221 6.43 %
Total interest-bearing liabilities   339,791   1,037 1.21 %   341,066   621 0.73 %   327,142   597 0.72 %
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, 2021 September 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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Sales 2021 18,5 M

Net income 2021 4,63 M

Net cash 2021 24,2 M

P/E ratio 2021 7,76x
Yield 2021
Capitalization 28,7 M
28,7 M
EV / Sales 2020 5,12x
EV / Sales 2021 0,56x
Nbr of Employees 37
Free-Float 100%

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