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ISLANDIA, NY--(Marketwired - Jan 27, 2016) - Empire Bancorp, Inc. (
Douglas C. Manditch, Chairman and Chief Executive Officer stated, "Tactical initiatives in 2015 for continued growth resulted in a closing balance sheet with assets totaling approximately $629.1 million. Last summer's opening of our loan and deposit production office in Manhattan fostered new customer relationships that contributed to upticks in both loans and deposits. Average loans increased 23.7% with concerted increases in multifamily lending including one to four family properties, commercial and industrial loans, and private banking loans. Asset quality ratios improved over the year with non-performing loans at 12 basis points of year-end loans, and non-performing assets at 9 basis points of year-end assets. We remain steadfast to sustained, yet prudent, asset growth."
"Net income growth of $690 thousand or 37.4% resulted primarily from higher net interest income of approximately $3 million. Considerable prepayment revenues continued into the fourth quarter as record real estate values in New York City triggered loan repayments ahead of contractual terms. Active solicitation of municipal deposits in the latter half of the year helped reduce our cost of funds and contributed to total deposits growth by $122.9 million during 2015. Consistent with our significant loan growth, we increased our loan loss provision by $624 thousand over the prior year."
Earnings for the Fourth Quarter Ended December 31, 2015
Net income was $657 thousand, or $0.10 per diluted share, for the fourth quarter of 2015, compared to $119 thousand, or $0.02 per diluted share, for the fourth quarter of 2014, representing an increase of $538 thousand, or 452.1%.
Net interest income increased $673 thousand, or 15.4%, as compared to the same period last year as average interest earning assets increased to $596.7 million as of December 31, 2015, an increase of $120.0 million or 25.2%. Net interest margin was 3.36% for the three months ended December 31, 2015, a decrease from 3.64% for the three months ended December 31, 2014. The yield on interest earning assets for the fourth quarter of 2015 averaged 3.69%, as compared to 3.96% for the fourth quarter of 2014. The decrease was primarily attributable to a lower average yield on both loans and securities. The cost of interest bearing liabilities averaged 0.58% for the fourth quarter of 2015, a decrease from 0.60% for the fourth quarter of 2014. During the fourth quarter the Company increased its holdings in investment securities, funded by an increase in deposits funding as well as the proceeds from the issuance of subordinated debentures. Based upon growth and composition of the loan portfolio, a provision of $250 thousand was recorded for the fourth quarter of 2015, up from $48 thousand for the fourth quarter of 2014.
Total other income increased $38 thousand, or 18.6%, largely from increased professional practice revenues, partially offset by a decline in customer related fees. Total other expenses increased approximately $349 thousand, or 9.5%, as compared to the same period in 2014. The increase was primarily attributable to an increase in salaries and employee benefits expense of $293 thousand, or 16.2%, over the fourth quarter of 2014, due to base salary increases and the hiring of new employees to support growth and strategic plans. Net occupancy and equipment costs increased $63 thousand, or 10.7%, primarily resulting from the increased foot print of the bank's main office lease and the opening of a loan and deposit production office in Manhattan. Software services decreased $81 thousand, or 18.9%, largely from a reduction in negotiated contract services. Increase in other expenses also reflected the New York State and New York City capital based taxes introduced in 2015, which replaced the Company's New York State and New York City income tax liability.
Earnings for the Year Ended December 31, 2015
Net income was $2.5 million, or $0.37 per diluted share, for the year ended December 31, 2015, compared to $1.8 million, or $0.41 per diluted share, for the year ended December 31, 2014, an increase of $690 thousand or 37.4%.
Net interest income increased $3.0 million, or 17.5%, over the same period in 2014 as average interest earning assets increased to $528.6 million as of December 31, 2015, an increase of $53.1 million or 11.2%. Net interest margin was 3.75% for the year, an increase from 3.55% for the year ended December 31, 2014. The yield on interest earning assets for the year averaged 4.07%, as compared to an average of 3.90% for the year ended December 31, 2014. The increase in yield on earning assets was primarily attributable to a greater percentage of loans as compared to investment securities in the asset mix, partially offset by a lower average yield on loans. The impact of the prepayment fees on loan payoffs, which increased by $1.4 million in 2015 compared to 2014, helped offset the lower loan yields. The cost of interest bearing liabilities averaged 0.60% for the year ended 2015, a decrease from an average of 0.66% for year ended December 31, 2014. Based upon the growth and composition of the loan portfolio, a provision of $867 thousand was recorded for the year ended 2015 as compared to $243 thousand for year ended 2014.
Total other income increased $70 thousand, or 7.0%, largely from increased collection of loan fees associated with loan payoffs and an increase in professional practice revenue, offset by a decline in customer related fees. Total other expenses increased approximately $2.2 million, or 15.7%, as compared to the same period in 2014. The increase was primarily attributable to an increase in salaries and employee benefits expense of $1.4 million, or 20.6%, over the year ended 2014, which was largely due to base salary increases and new employees hired to support growth and strategic plans. Net occupancy and equipment costs increased $237.0 thousand, or 10.1%, primarily resulting from the expenses associated with the expansion of office space in the bank's main office and the opening of a loan and deposit production office in Manhattan. Professional fees increased by $95 thousand, or 16.9%, principally as a result of additional services associated with the Company's strategic growth. Increases in other operating expenses reflected both New York State and New York City capital based taxes. The combined effective tax rate for 2015 decreased to 35.9% from 51.8% for the year ended December 31, 2014.
Balance Sheet and Asset Quality
Total assets were $629.1 million at December 31, 2015, an increase of $121.0 million, or 23.8%, over December 31, 2014, which was attributable to an increase in outstanding total loan balances of $82.1 million, or 21.6%, and an increase of $50.4 million, or 50.1%, in securities available for sale. Management remains confident in the credit quality of the Company's assets. The Company's ratio of non-performing loans to total loans improved to 0.12% as of December 31, 2015 from 0.31% at December 31, 2014. The allowance for loan losses totaled 1.14% of total loans as of December 31, 2015.
Total deposits were $518.0 million at December 31, 2015, an increase of $122.9 million, or 31.1%, over December 31, 2014. Demand deposits year over year were relatively flat. Savings, NOW and money market deposits increased $144.3 million, or 101.4%, from December 31, 2014 to a total of $286.6 million at December 31, 2015. The growth in these deposits was driven in large part by new municipal banking relationships.
Certificates of deposit of $100,000 or more and other time deposits, which represent the Company's highest cost deposits, decreased by $21.4 million, or 33.7%, over December 31, 2014. Short-term borrowings, which primarily represent Federal Home Loan borrowing, decreased by $20.0 million, or 43.4%, compared to outstanding balances of $46.1 million at December 31, 2014. During the fourth quarter, the Company completed a private placement of $15,250,000 in aggregate principal amount of subordinated debentures.
Stockholders' equity increased to $64.2 million at December 31, 2015 from $62.4 million at December 31, 2014, as a result of operating earnings offset by increases in the net unrealized loss on available for sale securities, net of taxes. During 2015, the Company converted all of its issued and outstanding Series A preferred stock for an equivalent number of shares of the Company's non-voting common stock. At December 31, 2015, the bank was "well capitalized" as defined by OCC regulation, with tier 1 leverage, common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratios of 12.22%, 16.83%, 16.83% and 18.01% respectively.
Opportunities and Challenges
"During 2015 we both realigned our internal teams and recruited specific personnel to advance our business development efforts here on Long Island and in New York City. Our organization is well situated to benefit from future opportunities as we test new markets. Our back office operations are appropriately staffed, and our customer service team continues to expand our professional network. We continually assess our product offerings, the pricing of our loan and deposit products, and our technologies to best serve our growing customer base," commented Thomas M. Buonaiuto, President and Chief Operating Officer.
|Consolidated Statements of Condition (unaudited)|
|(dollars in thousands)|
|December 31,||December 31,|
|Total cash and cash equivalents||$||5,621||$||17,985|
|Securities available for sale, at fair value||151,043||100,617|
|Premises and equipment, net||6,687||5,989|
|Other assets and accrued interest receivable||5,558||4,317|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Savings, N.O.W. and money market deposits||286,635||142,286|
|Certificates of deposit of $100,000 or more and other time deposits||42,198||63,635|
|Subordinated debentures, net||14,697||-|
|Other liabilities and accrued expenses||6,185||4,418|
|Total Stockholders' Equity||64,154||62,421|
|Total Liabilities and Stockholders' Equity||$||629,133||$||508,069|
|Selected Financial Data (unaudited)|
|Allowance for Loan Losses to Total Loans||1.14||%||1.17||%|
|Non-performing Loans to Total Loans||0.12||%||0.31||%|
|Non-performing Assets to Total Assets||0.09||%||0.23||%|
|Capital Ratios (unaudited) (1)(2)|
|Tier 1 Leverage Ratio||12.22||%||12.65||%|
|Common Equity Tier 1 Risk-Based Capital Ratio||16.83||%||N/A|
|Tier 1 Risk-Based Capital Ratio||16.83||%||16.02||%|
|Total Risk-Based Capital Ratio||18.01||%||17.17||%|
|Book Value per Share, as converted (3)||$||9.32||$||9.07|
|(1) Regulatory capital ratios presented on bank-only basis.|
|(2) Capital ratios at December 31, 2015 are calculated under Basel III guidelines.|
|(3) For the year ended December 31, 2014 book value, as converted, treats the Series A preferred stock as having been converted into common stock because it has been structured as a nonvoting common stock equivalent.|
|Consolidated Statements of Operations (unaudited)|
|(dollars in thousands, except per share data)|
|For the three months ended||For the year ended|
|December 31,||September 30,||December 31,||December 31,||December 31,|
|Net interest income||$||5,048||$||5,117||$||4,375||$||19,815||$||16,863|
|Provision for loan losses||250||260||48||867||243|
|Net interest income after provision for loan losses||4,798||4,857||4,327||18,948||16,620|
|Net securities gains (losses)||-||-||23||(71||)||27|
|Income before income taxes||1,028||974||891||3,955||3,828|
|Basic earnings per share||$||0.10||$||0.10||$||0.03||$||0.42||$||0.42|
|Diluted earnings per share||$||0.10||$||0.09||$||0.02||$||0.37||$||0.41|
|Weighted average common shares outstanding (1)||6,879,970||6,063,054||4,569,848||6,100,689||4,427,830|
|Weighted average common and common|
|equivalent shares outstanding (1)||6,890,323||6,882,015||4,569,848||6,879,970||4,469,011|
|Selected Financial Data (unaudited)|
|Return on Average Assets||0.43||%||0.44||%||0.10||%||0.47||%||0.38||%|
|Return on Average Equity||4.03||%||3.88||%||1.08||%||3.98||%||4.43||%|
|Net Interest Margin||3.36||%||3.75||%||3.64||%||3.75||%||3.55||%|
|(1) During the third quarter of 2015, the Company converted all of its issued and outstanding Series A preferred stock for an equivalent number of shares of the Company's non-voting common stock.|
About Empire Bancorp, Inc.
Empire Bancorp, Inc. is a bank holding company for Empire National Bank, a Long Island-based independent bank that specializes in serving the financial needs of small and medium sized businesses, professionals, nonprofit organizations, real estate investors, and consumers. The bank has four full-service banking offices located in Islandia, Shirley, Port Jefferson Station and Mineola, New York, and a loan and deposit production office located in Manhattan, New York. Our bankers take pride in understanding the needs of each 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 press 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 the control of the Company. The forward-looking statements included in this press release are made only as of the date of this press release. The Company has no intention, and does not assume any obligation, to update these forward- looking statements.
VP, Director of Marketing & Investor Relations