For Immediate Release
Contact: Anthony P. Costa
Chief Executive Officer
Chairman of the Board
ES Bancshares, Inc.
(845) 451-7801
ES BANCSHARES, INC. ANNOUNCES 2007 SECOND
QUARTER AND FIRST SIX-MONTH RESULTS
Newburgh, New York, September 7, 2007 - ES Bancshares, Inc. (the "Company")
(OTCBB: ESBS), the holding company for Empire State Bank (the "Bank"), today
reported the results of its operation for the second quarter and first six
months of 2007. For the quarter ended June 30, 2007, the Company posted a net
loss of $132,000 or ($0.08) per diluted share, compared to a net loss of
$298,000, or ($0.17) per diluted share, for the quarter ended June 30, 2006. For
the six months ended June 30, 2007, the net loss was $327,000, or ($0.19) per
diluted share, compared to a net loss of $663,000, or ($0.39) per diluted share,
for the six months ended June 30, 2006.
Commenting on the Company's results, Anthony P. Costa, Chairman of the Board and
Chief Executive Officer, stated, "The improvement in our financial performance
this reporting period is very encouraging and reflective of the increased market
receptivity among both consumers and businesses to Empire's style of
community-focused and relationship-oriented banking model. We are pleased with
our overall performance for the second quarter of 2007, as our investments in
growing the Company continue to bear fruit and generate increasing revenues in
all our core business lines. The quality and upward trajectory of our current
revenue streams, combined with our keen focus on intelligent cost management
practices, underscores the solid foundation we have built to fuel continued
growth of our business."
Financial Condition
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At June 30, 2007, the Company's assets totaled $99.1 million, which included net
loans of $69.4 million and total securities of $7.7 million, comprised primarily
of U.S. government sponsored agency notes and Ginnie Mae mortgage backed
securities. The increase in total assets of $6.1 million, or 6.6%, from December
31, 2006 resulted predominantly from the growth in total loans, net, which
increased $8.2 million, or 13.4%. That growth included increases of $2.2 million
in commercial loans and commercial lines of credit, $3.0 million in commercial
real estate loans, $0.7 million in home equity and consumer loans and $2.2
million in construction loans.
The increase in total loans was funded by a $6.1 million, or 7.5% increase in
total deposits from $81.5 million at December 31, 2006 to $87.6 million at June
30, 2007 and a reduction in securities available for sale.
Net Interest Income
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Net interest income for the quarter and six-month period ended June 30, 2007
increased by $157,000, or 30.8%, to $666,000 and by $310,000, or 31.9%, to
$1,283,000, respectively, as compared to the comparable quarter and six-month
period ended June 30, 2006. These higher earnings were primarily attributable to
the expansion in both the Company's loan and deposit customer portfolios, with
loans representing a greater share of the Company's asset mix.
Interest Income
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Total interest income for the quarter and six-month period ended June 30, 2007
increased by $517,000, or 49.6%, to $1.6 million, and by $1.2 million, or 62.4%,
to $3.1 million, respectively, as compared to the comparable quarter and
six-month period ended one year earlier. These increases were primarily due to
the Company's increased commercial loan volume resulting from its successful
attraction of an expanding base of business customers.
Interest Expense
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Interest expense for the second quarter and six-month period ended June 30, 2007
increased by $360,000, or 67.5%, to $893,000, and by $863,000, or 95.1%, to $1.8
million, respectively, as compared to the comparable periods in 2006. These
increases were principally due to increases in short-term interest rates and
higher average balances in the Company's portfolio of interest-bearing deposits.
Non-Interest Income
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For the quarter and six-month period ended June 30, 2007, non-interest income
increased by $64,000, or 83.1%, to $141,000, and by $85,000, or 53.5%, to
$244,000 as compared to the same quarter and six-month period ended the prior
year. These increases in income were primarily attributable to higher levels of
service charges and loan origination fees resulting from the Company's expanding
customer base, partially offset by reduced net gains on the sale of real estate
mortgage loans held for sale.
Non-Interest Expense
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Non-interest expense totaled $934,000 for the quarter ended June 30, 2007, which
represented an increase of $68,000, or 7.9% from $866,000 for the quarter ended
June 30, 2006. For the six-month period ended June 30, 2007, non-interest
expense increased $100,000, or 5.7%, to $1.8 million as compared to the first
six months of 2006.
These increases were attributable to the investment in staff compensation
programs and other initiatives and activities attendant to support the Company's
ongoing operation and overall growth, including data processing services,
advertising, shareholder communications and costs associated with the
introduction of the Bank's new Online Banking Service.
Asset Quality
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Asset quality remains sound, reflecting the Company's diligent focus on
originating high quality loan relationships with targeted businesses and
consumers in the communities it serves. Despite the continual expansion of its
loan portfolio, the Company has not had any non-performing loans or assets since
it commenced operation. Management will continue to apply prudent risk
management and quality underwriting standards as it pursues continued growth in
its diverse credit portfolios.
Capital Ratios
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The Company's capital ratios are not significantly different than those for the
Bank and exceed all regulatory requirements at June 30, 2007. Empire State
Bank's Tier I leverage, Tier I risk-weighted and total risk-weighted capital
ratios were 10.3%, 13.2% and 14.0%, respectively, at June 30, 2007. Each of
these ratios is in excess of the regulatory guidelines for a "well capitalized"
institution, the highest regulatory capital category.
About Empire State Bank
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Empire State Bank, N.A. is a nationally chartered stock commercial bank that was
founded in 2004. The Bank operates as a community-oriented institution offering
a broad array of financial services to meet the needs of the communities it
serves. The Bank is headquartered in the town of Newburgh in Orange County, New
York and operates an additional branch in the city of New Paltz, Ulster County,
New York, and two loan production offices, one in the New York City borough of
Staten Island, New York, and one in the village of Lynbrook in Nassau County,
New York. The Bank's deposits are insured up to the maximum allowable amount by
the Bank Insurance Fund of the FDIC. For more information, visit the Bank's
website at www.esbna.com.
This press release contains forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These
statements refer to future events or our future financial performance. We have
attempted to identify forward-looking statements by terminology including
"anticipates," "believes," "can," "continue," "could," "estimates," "expects,"
"intends," "may," "plans," "potential," "predicts," "should" or "will" or the
negative of these terms or other comparable terminology. These statements are
only predictions and involve known and unknown risks, uncertainties and other
factors that may cause our or the banking industry's actual results, level of
activity, performance or achievements to be materially different from any future
results, level of activity, performance or achievements expressed or implied by
these forward-looking statements. Factors that may cause actual results to
differ materially from those contemplated by such forward-looking statements
include, but are not limited to, material adverse changes in the Company's
operations or earnings, or a decline in the economy in the New York Metropolitan
area. Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.