Elmira Savings Bank fourth-quarter profit edges up

ELMIRA — Elmira Savings Bank (NASDAQ: ESBK) reported that its fourth-quarter net income inched up less than 1 percent as rising noninterest income and falling net interest income largely offset each other.

The bank generated net income of $1.299 million in the fourth quarter, a 0.6 percent increase from $1.291 million in the same period a year ago. Diluted earnings per share in the fourth quarter dipped to 38 cents from 39 cents in the fourth quarter of 2011.

For the full-year 2012, Elmira Savings Bank produced net income of $5.21 million, up 3.7 percent from $5.03 million in 2011. Diluted earnings per share in 2012 totaled $1.51, compared to $1.41 in the prior year.

“We are pleased to be able to provide this report of strong 2012 operating results. We achieved record earnings, had solid loan growth, and maintained our strong asset quality,” Michael P. Hosey, president and CEO, said in the earnings news release.

In the fourth quarter, Elmira Savings Bank posted an increase in noninterest income of $147,000 and a drop in its provision for loan losses of $99,000. That was partially offset by a decline in net interest income of $106,000 and an increase of $135,000 in noninterest expenses, the bank said.

The narrowing of market interest-rate spreads is pinching net interest income at Elmira Savings Banks and many other banks.

The net interest margin at Elmira Savings narrowed to 3.25 percent in the fourth quarter from 3.45 percent in the year-ago period. The fourth-quarter average yield on earning assets at the bank slipped to 4.45 percent from 4.87 percent in the same period in 2011.

Credit quality at Elmira Savings Bank has improved as the bank’s ratio of nonperforming loans to total loans fell to 1.02 percent at the end of 2012 from 1.06 percent at the close of 2011. Loans receivable increased by more than 9 percent in the last year to $378 million. Deposits rose by more than 7 percent to $410 million in the same time period.

Elmira Savings Bank reported total assets of $537 million at the end of 2012, up almost 3 percent, from $523 million a year ago.

Elmira Savings Bank (www.elmirasavingsbank.com) is a state-chartered bank headquartered in 333 E. Water St., Elmira, with six branches in Chemung County, three offices and a loan center in Tompkins County, one branch in Steuben County, one office in Cayuga County, one branch in Schuyler County, and a loan center in Cortland County.

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