|By Marketwired .||
|January 30, 2013 02:39 PM EST||
ISLANDIA, NY -- (Marketwire) -- 01/30/13 -- Empire National Bank (OTCQB: EMPK), today announced fourth quarter and year end results for 2012. Highlights for the quarter and the year include:
- Total assets of $438.4 million at December 31, 2012, an increase of $98.7 million, or 29.0%, compared to the prior year end.
- Total loans outstanding of $243.7 million at December 31, 2012, an increase of $30.8 million, or 14.5%, compared to the prior year end.
- Investment securities available for sale of $180.2 million at December 31, 2012, an increase of $65.7 million, or 57.4%, increase from December 31, 2011.
- Demand deposits of $172.2 million at December 31, 2012, an increase of $126.4 million, or 276%, increase from December 31, 2011.
- Net income for the year ended December 31, 2012 of $3.6 million, a decrease of $1.0 million from $4.6 million for the year ended December 31, 2011.
- Net income for the quarter ended December 31, 2012 of $376 thousand, a decrease of $1.0 million from $1.4 million for the quarter ended December 31, 2011.
- Strong asset quality, with an allowance for loan losses comprising 1.84% of total loans at December 31, 2012, and total non-performing loans comprising 1.09% of total loans at December 31, 2012.
- "Well Capitalized" regulatory capital levels, as of December 31, 2012
- Tier 1 leverage capital ratio of 9.52%
- Tier 1 risk-based capital ratio of 14.65%
- Total risk-based capital ratio of 15.90%
- Increasing book value per share of $9.64, as of December 31, 2012, an increase of 12.1% increase as compared to the prior year-end.
Douglas C. Manditch, Chairman and Chief Executive Officer stated, "As we approach our five year anniversary in February, we are pleased with the continued growth of the bank. Our core focus on customer service has benefited us. Satisfied customers continue to introduce our team to new relationships -- many of which have played a large part in our significant demand deposit and loan growth in 2012. As we begin 2013, we are excited to be expanding our footprint with the addition of our Mineola branch, which will be located at 170 Old Country Road. We expect to be open in the spring."
Earnings for the Fourth Quarter Ended December 31, 2012
Net Income was $376 thousand, or $0.09 per share, for the fourth quarter of 2012, compared to $1.4 million for the fourth quarter of 2011, a decrease of $1.0 million and $0.26 per share, respectively. Tax benefits recognized in the fourth quarter of 2011 as compared to the provision for income taxes in the fourth quarter of 2012 resulted in a reduction to net income of approximately $725 thousand. As compared to the fourth quarter of 2011, net securities gains decreased by $106 thousand, net interest income increased by $36 thousand, and other expenses increased by approximately $270 thousand. The increase in other expenses was primarily due to costs attributable to our focus on providing financial products and services targeted to professional practices. The increase in the net interest income of $36 thousand was primarily due to a decrease in interest expense of $172 thousand which was partially offset by a decrease in interest income of $136. The bank's net interest margin was 3.23% for the fourth quarter ended December 31, 2012.
Earnings for the Full Year Ended December 31, 2012
Net income was $3.6 million, or $0.83 per share, for the year ended 2012, compared to $4.6 million, or $1.09 per share for the year ended 2011, a decrease of $1.0 million and $0.26 per share, respectively. The decrease in net income was primarily attributable to an increase in other expenses of $1.5 million, a decrease in net securities gains of $783 thousand, an increase in provision of loan losses of $285 thousand; partially offset by an increase in net interest income of $1.2 million. The increase in other expenses resulted primarily from expenses associated with expansion into new markets and services. Salaries and benefits increased $644 thousand or 12.0% over the prior year as the bank staffed to meet these new demands. Costs relative to servicing our professional practice clients also increased in the current year. The increase in net interest income of $1.2 million in 2012, as compared to 2011, was primarily attributable to an increase in the average balance of interest earning assets of $65.6 million. The bank's net interest margin was 3.48% for the year ended December 31, 2012, a decrease of 34 basis points from the same period in 2011. The bank's yield on interest bearing assets decreased 54 basis points from 4.61% to 4.07% in 2012 and was partially offset by a decrease in the bank's cost and volume of interest bearing liabilities of two basis points from 1.01% to 0.99%.
Balance Sheet and Asset Quality
Total assets were $438.4 million at December 31, 2012, reflecting a $98.7 million increase from the prior year end. The growth in total assets was primarily attributable to an increase of $65.7 million in securities available for sale to $180.2 million at December 31, 2012. Securities available for sale increased as a result of management's intent to maximize total earning assets while diversifying its asset mix. Total loans increased by $30.8 million to $243.7 million at December 31, 2012.
At December 31, 2012, the bank's ratio of non-performing loans to total loans was 1.09% and its ratio of non-performing assets to total assets was 0.61%, remaining below those of the bank's peers. The allowance for loan losses to total loans was 1.84% at December 31, 2012 as compared to 1.98% at December 31, 2011.
Total deposits increased in 2012 by $98.4 million, or 37.1%, from $265.0 million to $363.4 million as deposits outpaced loan growth. At December 31, 2012, the bank's loan to deposit ratio was 67.0%. Demand deposits, which represent a valuable funding source, increased 276.0% from $45.8 million in 2011 to $172.2 million in 2012. Average demand deposits increased $85.2 million, or 181.0%, from $47.1 million in 2011 to $132.3 million in 2012. The material increase in demand deposits was attributable primarily to the bank's commitment and focus to providing financial service products and services targeted to professional practices. Notwithstanding the demand deposit growth attributable to professional practices, the bank also experienced significant growth in business banking demand deposits. Savings, NOW and money market deposits increased $3.2 million, or 2.5%, to $129.5 million at December 31, 2012, while higher cost deposits such as certificates of deposit of $100,000 or more and other time deposits decreased by $11.8 million and $19.4 million, respectively.
Stockholders' equity grew from $37.4 million to $42.2 million during 2012. The net increase was the result of net income of $3.6 million, and an increase in accumulated other comprehensive income of $733 thousand, which reflected the increase in the unrealized gain in the securities portfolio at December 31, 2012. At December 31, 2012, the bank was 'well capitalized' as defined by OCC regulation, with leverage, Tier 1 risk-based and total risk-based capital ratios of 9.52%, 14.65% and 15.90%, respectively.
Opportunities and Challenges
"Although the current economy and fiscal policies continue to pose challenges to privately owned small to mid-sized businesses, our team is committed to serving the financial needs of these businesses as they strive to grow. We have plenty of capacity to deploy funds into commercial loans to support the Long Island economy. Albeit challenging times, we are focused on positioning the bank for future growth and capitalizing on opportunities as they appear. Our Mineola branch will offer more convenience for our Nassau county customer base, while creating new customer relationships in the Nassau county market," commented Thomas M. Buonaiuto, President and Chief Operating Officer.
Balance Sheet (unaudited) (dollars in thousands) December 31, December 31, 2012 2011 ------------- ------------- ASSETS Total cash and due from banks $ 4,908 $ 4,388 Securities available for sale, at fair value 180,202 114,502 Securities, restricted 3,183 3,002 Loans, net 239,211 208,660 Premises and equipment, net 6,412 6,850 Other assets and accrued interest receivable 4,483 2,331 ------------- ------------- Total Assets $ 438,399 $ 339,733 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Demand Deposits $ 172,165 $ 45,765 Savings, N.O.W. and money market deposits 129,451 126,335 Certificates of deposit of $100,000 or more and other time deposits 61,742 92,920 ------------- ------------- Total Deposits $ 363,358 265,020 Short-term borrowings 30,109 34,449 Other liabilities and accrued expenses 2,716 2,832 ------------- ------------- Total Liabilities 396,183 302,301 ------------- ------------- Total Stockholders' Equity 42,216 37,432 ------------- ------------- Total Liabilities and Stockholders' Equity $ 438,399 339,733 ============= ============= Selected Financial Data (unaudited) Allowance for Loan Losses to Total Loans 1.84% 1.98% Non-performing Loans to Total Loans 1.09% 1.03% Non-performing Assets to Total Assets 0.61% 0.65% Capital Ratios (unaudited) Tier 1 Leverage Ratio 9.52% 10.80% Tier 1 Risk-Based Capital Ratio 14.65% 15.36% Total Risk-Based Capital Ratio 15.90% 16.62% Book Value per Share $ 9.64 $ 8.60 Statement of Operations (unaudited) (dollars in thousands, except per share data) For the three months ended For the year ended December September December December December 31, 2012 30, 2012 31, 2011 31, 2012 31, 2011 Interest income $ 3,769 $ 3,989 $ 3,905 $ 15,696 $ 14,765 Interest expense 472 572 644 2,268 2,516 Net interest income $ 3,297 $ 3,417 $ 3,261 $ 13,428 $ 12,249 Provision for loan losses - 285 - 285 - Net interest income after provision for loan losses 3,297 3,132 3,261 13,143 12,249 Net securities (losses) gains 80 94 186 1,336 2,119 Other income 154 146 141 605 511 Other expense 3,149 3,097 2,879 12,532 10,989 Income before income taxes 382 275 709 2,552 3,890 Income tax (expense) benefit (6) (130) 719 1,072 719 Net income $ 376 $ 145 $ 1,428 $ 3,624 $ 4,609 Basic earnings per share $ 0.09 $ 0.03 $ 0.34 $ 0.83 $ 1.09 Diluted earnings per share $ 0.09 $ 0.03 $ 0.34 $ 0.83 $ 1.09 Selected Financial Data (unaudited) Return on Average Assets 0.35% 0.14% 1.67% 0.90% 1.39% Return on Average Equity 3.53% 1.39% 15.81% 8.90% 13.92% Net Interest Margin 3.23% 3.36% 3.95% 3.48% 3.82% Efficiency Ratio 91.25% 86.88% 84.62% 89.30% 86.12%
About Empire National Bank
Empire National Bank specializes in serving the financial needs of privately owned small to mid-sized businesses, professionals, nonprofit organizations, real estate investors, and consumers. The Bank has three banking offices located in Islandia, Shirley and Port Jefferson Station. Our bankers take pride in understanding the needs of each and every customer so the bank can deliver the highest quality service with a sense of urgency.
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 Empire National Bank'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.
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