ES Bancshares, Inc. Announces Fourth Quarter 2024 Results; Continues Trend of Net Interest Margin Expansion and Asset Quality
STATEN ISLAND, N.Y., Jan. 29, 2025 (GLOBE NEWSWIRE) — ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today reported net income of $466 thousand, or $0.03 per diluted common share, for the quarter ended December 31, 2024, compared to a net income of $582 thousand or $0.08 per diluted common share for the quarter ended September 30, 2024.
| Key Quarterly Financial Data | 2024 Highlights | |||||||||
| Performance Metrics | 4Q24 | 3Q24 | 4Q23 | •The Cost of Funds for the three months ended December 31, 2024, improved to 3.02% from 3.02% in the prior linked quarter. •For 3 months ended December 31, 2024, the Company’s net interest margin increased to 2.50% compared to 2.30% for the 3 months ended September 30, 2024. •The Company sold $3 million in SBA 7a loan during the quarter, resulting in a gain on loan sale. •The Company has replaced $56 million of higher-costing wholesale funding with lower cost organic deposits over the nine-months in 2024. •Total Revenues for the quarter ended December 31, 2024, totaled $8.4 million increasing for a second consecutive quarter. | ||||||
| Return on average assets (%) | 0.29 | 0.36 | 0.05 | |||||||
| Return on average equity (%) | 3.94 | 4.98 | 0.73 | |||||||
| Return on average tangible equity (%) | 3.99 | 5.04 | 0.74 | |||||||
| Net interest margin (%) | 2.50 | 2.30 | 2.28 | |||||||
| Income Statement (a) | 4Q24 | 3Q24 | 4Q23 | |||||||
| Net interest income | $ | 3,876 | $ | 3,567 | $ | 3,454 | ||||
| Non-interest income | $ | 372 | $ | 609 | $ | 322 | ||||
| Net income | $ | 466 | $ | 582 | $ | 84 | ||||
| Earnings per diluted common share | $ | 0.03 | $ | 0.08 | $ | 0.01 | ||||
| Balance Sheet (a) | 4Q24 | 3Q24 | 4Q23 | |||||||
| Average total loans | $ | 566,031 | $ | 566,031 | $ | 569,515 | ||||
| Average total deposits | $ | 512,120 | $ | 512,120 | $ | 470,394 | ||||
| Book value per share | $ | 6.89 | $ | 6.85 | $ | 6.83 | ||||
| Tangible book value per share | $ | 6.81 | $ | 6.77 | $ | 6.74 | ||||
| (a) In thousands except for per share amounts | ||||||||||
Phil Guarnieri, Director, and Chief Executive Officer of ES Bancshares said, “We ended 2024 with positive trends over the last two quarters. The downward turn in interest rates has bolstered our net interest income. The Company’s net interest margin increased by twenty basis points, demonstrating growth for the past three quarters. This coupled with our cost containment program has bolstered our core earnings. The Company’s balance sheet and capital position remain a strength for our Company.”
Selected Balance Sheet Information:
December 31, 2024 vs. December 31, 2023
As of December 31, 2024, total assets were $636.6 million, a decrease of $2.1 million, or 0.3%, as compared to total assets of $638.7 million on December 31, 2023. The decrease can be attributed to a slightly smaller loan portfolio.
Loans receivable, net of Allowance for Credit Losses on Loans totaled $559.3 million, a decrease of 0.8% from December 31, 2023. As of December 31, 2024, the Allowance for Credit Losses on Loans as a percentage of gross loans was 0.91%.
Nonperforming assets, which includes nonaccrual loans and foreclosed real estate were $5.3 million or 0.84% of total assets, as of December 31, 2024, increasing from $1.4 million or 0.22% of total assets at December 31, 2023. The ratio of nonaccrual loans to loans receivable was 0.94%, as of December 31, 2024, and 0.22% for December 31, 2023. The increase from December 31, 2023, was primarily due to one Commercial Real Estate and one 1-4 family investor loan being placed on non-accrual status. Both loans are deemed to be well collateralized and in total amount to $4.0 million.
Total liabilities decreased $3.8 million to $589.1 million at December 31, 2024 from $592.9 million at December 31, 2023. The decrease can be attributed to repayments of brokered deposits and Federal Home Loan (FHLB) borrowings partially offset by growth in core deposits. The growth in deposits was driven by an increase in interest-bearing, non-maturity deposit accounts, as well as interest-bearing deposits.
As of December 31, 2024, the Bank’s Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 9.31%, 13.68%, 13.68% and 14.93%, respectively, all in excess of the ratios required to be deemed “well-capitalized.” During the Fourth quarter 2024 the Company did not repurchase shares under its stock repurchase program. Book value per common share was $6.89 at December 31, 2024 compared to $6.83 at December 31, 2023. Tangible common book value per share (which represents common equity less goodwill, divided by the number of shares outstanding) was $6.81 at December 31, 2024 compared to $6.74 at December 31, 2023.
Financial Performance Overview:
Three Months Ended December 31, 2024, vs. September 30, 2024
For the three months ended December 31, 2024, the Company net income totaled $466 thousand compared to a net income of $582 thousand for the three months ended September 30, 2024. The decrease can be attributed to lower non-interest income and non-interest expense, partially offset by higher net interest income quarter over quarter.
Net interest income for the three months ended December 31, 2024, increased $309 thousand, to $3.9 million from $3.6 million at three months ended September 30, 2024. The Company’s net interest margin widened by nine basis points to 2.50% for the three months ended December 31, 2024, as compared to 2.30% for the three months ended September 30, 2024. The increase in margin can be attributed to a reduction in the Company’s average cost for its interest-bearing liabilities.
There was a $2 thousand provision for credit losses taken for the three months ended December 31, 2024, compared to a reversal for credit losses of $38 thousand for the three months ended September 30, 2024.
Non-interest income decreased $237 thousand, to $372 thousand for the three months ended December 31, 2024, compared with non-interest income of $609 thousand for the three months ended September 30, 2024. The majority of the decrease can be attributed to lower service charges and fees and no gain on extinguishment of the Company’s subordinated debt, partially offset by the gain on loan sales.
Non-interest expenses totaled $3.6 million for the three months ended December 31, 2024, compared to $3.4 million for the three months ended September 30, 2024. The largest fluctuations quarter over quarter were due to a $154 thousand increase in other expenses, due to a lack of a recovery of collection expenses that we realized in the September 2024 quarter, an increase in employment search fees, and other expenses. The $92 thousand increase in professional fees, due to higher legal and consulting fees as compared to the quarter ended September 30, 2024.
Twelve months ended December 31, 2024 vs. December 31, 2023
For the twelve months ended December 31, 2024, net income totaled $1.1 million in comparison to $1.5 million for the twelve months ended December 31, 2023. The decrease can mainly be attributed to higher costs paid on deposits which increased $5.1 million year over year.
Net interest income for the twelve months ended December 31, 2024, decreased 11% or $1.8 million, to $14.1 million from $15.9 million at December 31, 2023. The decrease can be attributed to increased interest expense for deposits, partially offset by increased interest income earned on the loan portfolio.
Provision for credit losses totaled $12 thousand for the twelve months ended December 31, 2024, compared to a $20 thousand provision for the twelve months ended December 31, 2023.
Non-interest income totaled $1.2 million for the twelve months ended December 31, 2024, compared with noninterest income of $758 thousand for the twelve months ended December 31, 2023. The increase can be attributed to the gain recorded on extinguishment of sub-debt which is partially offset by decreased in gain on sale of loans period over period.
Operating expenses totaled $14.0 million for the twelve months ended December 31, 2024, compared to $15.0 million for the twelve months ended December 31, 2023, or a decrease of 7.1%. The decrease in non-interest expense can be attributed to initiatives taking effect from the cost-cutting program launched in 2024.
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 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. 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, 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, | December 31, | |||||
| 2024 | 2023 | |||||
| |—-(unaudited)—-| | ||||||
| Assets | ||||||
| Cash and cash equivalents | $ | 26,713 | 32,728 | |||
| Securities, net | 22,336 | 15,220 | ||||
| Loans receivable, net: | ||||||
| Real estate mortgage loans | 545,569 | 551,124 | ||||
| Commercial and Lines of Credit | 14,418 | 13,301 | ||||
| Home Equity and Consumer Loans | 398 | 349 | ||||
| Deferred costs | 4,084 | 4,233 | ||||
| Allowance for Loan Credit Losses | (5,137 | ) | (5,086 | ) | ||
| Total loans receivable, net | 559,330 | 563,920 | ||||
| Accrued interest receivable | 2,628 | 2,625 | ||||
| Investment in restricted stock, at cost | 4,335 | 5,191 | ||||
| Goodwill | 581 | 581 | ||||
| Bank premises and equipment, net | 4,845 | 5,600 | ||||
| Repossessed assets | – | – | ||||
| Right of use lease assets | 5,894 | 6,415 | ||||
| Bank Owned Life Insurance | 5,489 | 5,341 | ||||
| Other Assets | 4,471 | 1,129 | ||||
| Total Assets | $ | 636,622 | 638,750 | |||
| Liabilities & Stockholders’ Equity | ||||||
| Non-Interest-Bearing Deposits | 133,268 | 109,065 | ||||
| Interest-Bearing Deposits | 359,816 | 328,479 | ||||
| Brokered Deposits | 20,750 | 56,581 | ||||
| Total Deposits | 513,834 | 494,125 | ||||
| Bond Issue, net of costs | 11,787 | 13,708 | ||||
| Borrowed Money | 50,084 | 70,805 | ||||
| Lease Liability | 6,172 | 6,672 | ||||
| Other Liabilities | 7,195 | 7,578 | ||||
| Total Liabilities | 589,071 | 592,888 | ||||
| Stockholders’ equity | 47,551 | 45,862 | ||||
| Total liabilities and stockholders’ equity | $ | 636,622 | 638,750 | |||
| ES Bancshares, Inc. | ||||||||||||||
| Consolidated Statements of Income | ||||||||||||||
| (in thousands) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| December 31, 2024 | September 30, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||
| |————–(unaudited)————–| | |—-(unaudited)—-| | |||||||||||||
| Interest income | ||||||||||||||
| Loans | $ | 7,405 | $ | 7,315 | $ | 7,059 | $ | 29,273 | $ | 26,343 | ||||
| Securities | 224 | 218 | 110 | 678 | 446 | |||||||||
| Other interest-earning assets | 373 | 428 | 278 | 1,624 | 1,418 | |||||||||
| Total Interest Income | 8,002 | 7,961 | 7,447 | 31,576 | 28,207 | |||||||||
| Interest expense | ||||||||||||||
| Deposits | 3,436 | 3,674 | 2,945 | 14,531 | 9,052 | |||||||||
| Borrowings | 690 | 720 | 1,048 | 2,950 | 3,268 | |||||||||
| Total Interest Expense | 4,126 | 4,394 | 3,993 | 17,482 | 12,320 | |||||||||
| Net Interest Income | 3,876 | 3,567 | 3,454 | 14,094 | 15,887 | |||||||||
| (Rev)Prov for Credit Losses | 2 | (38 | ) | (83 | ) | 12 | 20 | |||||||
| Net Interest Income after (Rev)Prov for Credit Losses | 3,874 | 3,605 | 3,537 | 14,082 | 15,867 | |||||||||
| Non-interest income | ||||||||||||||
| Service charges and fees | 192 | 264 | 254 | 828 | 762 | |||||||||
| Gain on loan sales | 139 | – | 30 | 140 | 168 | |||||||||
| Gain on extinguishment of Sub-debt | – | 245 | – | 245 | – | |||||||||
| Other | 42 | 100 | 38 | 314 | 149 | |||||||||
| Total non-interest income | 372 | 609 | 322 | 1,527 | 1,080 | |||||||||
| Non-interest expenses | ||||||||||||||
| Compensation and benefits | 1,662 | 1,719 | 1,745 | 6,830 | 7,408 | |||||||||
| Occupancy and equipment | 618 | 618 | 646 | 2,509 | 2,656 | |||||||||
| Data processing service fees | 295 | 315 | 357 | 1,253 | 1,396 | |||||||||
| Professional fees | 247 | 155 | 357 | 808 | 1,104 | |||||||||
| FDIC & NYS Banking Assessments | 132 | 100 | 88 | 428 | 272 | |||||||||
| Advertising | 64 | 84 | 101 | 308 | 406 | |||||||||
| Insurance | 56 | 55 | 51 | 208 | 190 | |||||||||
| Other | 518 | 365 | 405 | 1,622 | 1,603 | |||||||||
| Total non-interest expense | 3,592 | 3,411 | 3,750 | 13,966 | 15,035 | |||||||||
| Income prior to tax expense | 654 | 803 | 109 | 1,643 | 1,912 | |||||||||
| Income taxes | 188 | 221 | 25 | 539 | 440 | |||||||||
| Net Income | $ | 466 | $ | 582 | $ | 84 | $ | 1,104 | $ | 1,472 | ||||
| ES Bancshares, Inc. | ||||||||||||||||||
| Average Balance Sheet Data | ||||||||||||||||||
| For the Three Months Ended (dollars in thousands) | ||||||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30, 2024 | ||||||||||||||||
| Avg Bal | Interest | Average | Avg Bal | Interest | Average | Avg Bal | Interest | Average | ||||||||||
| Rolling | Rolling | Rolling | Rolling | Rolling | Rolling | |||||||||||||
| Assets | 3 Mos. | 3 Mos. | Yield/Cost | 3 Mos. | 3 Mos. | Yield/Cost | 3 Mos. | 3 Mos. | Yield/Cost | |||||||||
| Interest-earning assets: | ||||||||||||||||||
| Loans receivable | $ | 564,745 | $ | 7,405 | 5.24 | % | $ | 566,031 | $ | 7,315 | 5.17 | % | $ | 569,515 | $ | 7,059 | 4.96 | % |
| Investment securities | 22,898 | 224 | 3.91 | % | 22,480 | 218 | 3.87 | % | 15,957 | 110 | 2.75 | % | ||||||
| Other interest-earning assets | 31,135 | 373 | 4.69 | % | 31,656 | 428 | 5.29 | % | 20,128 | 278 | 5.40 | % | ||||||
| Total interest-earning assets | 618,778 | 8,002 | 5.17 | % | 620,167 | 7,961 | 5.13 | % | 605,600 | 7,447 | 4.92 | % | ||||||
| Non-interest earning assets | 18,048 | 17,919 | 16,840 | |||||||||||||||
| Total assets | $ | 636,826 | $ | 638,086 | $ | 622,440 | ||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Interest-bearing checking | $ | 32,800 | $ | 27 | 0.33 | % | $ | 33,512 | $ | 55 | 0.65 | % | $ | 25,368 | $ | 23 | 0.36 | % |
| Savings accounts | 217,746 | 1,695 | 3.09 | % | 200,248 | 1,728 | 3.42 | % | 123,641 | 884 | 2.84 | % | ||||||
| Certificates of deposit | 166,368 | 1,714 | 4.09 | % | 173,577 | 1,891 | 4.32 | % | 207,091 | 2,037 | 3.90 | % | ||||||
| Total interest-bearing deposits | 416,914 | 3,436 | 3.27 | % | 407,337 | 3,674 | 3.58 | % | 356,101 | 2,945 | 3.28 | % | ||||||
| Borrowings | 50,189 | 499 | 3.94 | % | 52,984 | 519 | 3.89 | % | 76,844 | 827 | 4.27 | % | ||||||
| Subordinated debenture | 11,784 | 191 | 6.43 | % | 13,726 | 201 | 5.81 | % | 13,705 | 221 | 6.41 | % | ||||||
| Total interest-bearing liabilities | 478,887 | 4,126 | 3.42 | % | 474,047 | 4,394 | 3.68 | % | 446,649 | 3,993 | 3.55 | % | ||||||
| Non-interest-bearing demand deposits | 96,011 | 104,782 | 114,293 | |||||||||||||||
| Other liabilities | 14,580 | 13,045 | 15,803 | |||||||||||||||
| Total non-interest-bearing liabilities | 110,591 | 117,827 | 130,096 | |||||||||||||||
| Stockholders’ equity | 47,347 | 46,211 | 45,695 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 636,826 | $ | 638,086 | $ | 622,440 | ||||||||||||
| Net interest income | $ | 3,874 | $ | 3,567 | $ | 3,454 | ||||||||||||
| Average interest rate spread | 1.75 | % | 1.46 | % | 1.37 | % | ||||||||||||
| Net interest margin | 2.50 | % | 2.30 | % | 2.28 | % | ||||||||||||
| Five Quarter Performance Ratio Highlights | Three Months Ended | |||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||
| Performance Ratios (%) – annualized | ||||||||||||||||
| Return(loss) on Average Assets | 0.29 | 0.36 | 0.10 | (0.07 | ) | 0.05 | ||||||||||
| Return(loss) on Average Equity | 3.94 | 4.98 | 1.37 | (0.90 | ) | 0.73 | ||||||||||
| Return(loss) on Average Tangible Equity | 3.99 | 5.04 | 1.38 | (0.91 | ) | 0.74 | ||||||||||
| Efficiency Ratio | 84.58 | 81.70 | 92.86 | 101.08 | 99.31 | |||||||||||
| Yields / Costs (%) | ||||||||||||||||
| Average Yield – Interest Earning Assets | 5.17 | 5.13 | 5.16 | 5.03 | 4.92 | |||||||||||
| Average Cost – Interest-bearing Liabilities | 3.42 | 3.69 | 3.86 | 3.82 | 3.55 | |||||||||||
| Net Interest Margin | 2.50 | 2.30 | 2.21 | 2.12 | 2.28 | |||||||||||
| Capital Ratios (%) | ||||||||||||||||
| Equity / Assets | 7.47 | 7.44 | 7.12 | 7.34 | 7.18 | |||||||||||
| Tangible Equity / Assets | 7.38 | 7.36 | 7.03 | 7.26 | 7.09 | |||||||||||
| Tier I leverage ratio (a) | 9.31 | 9.18 | 9.30 | 9.52 | 9.45 | |||||||||||
| Common equity Tier I capital ratio (a) | 13.68 | 13.67 | 13.81 | 13.63 | 13.60 | |||||||||||
| Tier 1 Risk-based capital ratio (a) | 13.68 | 13.67 | 13.81 | 13.63 | 13.60 | |||||||||||
| Total Risk-based capital ratio (a) | 14.93 | 14.92 | 15.06 | 14.88 | 14.85 | |||||||||||
| Stock Valuation | ||||||||||||||||
| Book Value | $ | 6.89 | $ | 6.85 | $ | 6.74 | $ | 6.75 | $ | 6.83 | ||||||
| Tangible Book Value | $ | 6.81 | $ | 6.77 | $ | 6.65 | $ | 6.67 | $ | 6.74 | ||||||
| Shares Outstanding (b) | 6,900 | 6,878 | 6,884 | 6,834 | 6,714 | |||||||||||
| Asset Quality (%) | ||||||||||||||||
| ACL / Total Loans | 0.91 | 0.90 | 0.90 | 0.89 | 0.89 | |||||||||||
| Non Performing Loans / Total Loans | 0.94 | 0.91 | 0.22 | 0.24 | 0.22 | |||||||||||
| Non Performing Assets / Total Assets | 0.84 | 0.81 | 0.19 | 0.21 | 0.22 | |||||||||||
| (a) Ratios at Bank level (b) Shares information presented in thousands | ||||||||||||||||
