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 
                                              --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 
Performance                                   second consecutive 
Metrics           4Q24      3Q24      4Q23    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.

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