Updated: May 27
"Elmira Savings Bank, a steady dividend earner that could be a nice add on to your portfolio”
Stable dividend for the last 5 years ($.23 per share, quarterly) .
Yields over 7%.
This is a steady income earner but not a growth story.
By: Allan R Kirby
Name: Elmira Savings Bank
Total Assets: $598.0 million
Summary of Elmira Stock (ESBK)
Market Cap: 53.8 Million.
Dividend quarterly (.23)
Dividend Yearly (.92)
Last dividend increase: $.01 2012
Average Daily Volume: Low: just 3,579
Net Interest Margin (NIM): 3.16% (about average)
Great buying opportunity
This is a financial stock that has easily delivered profits over the last five years. In fact when looking at Q4 earnings over a four year period, earnings were in a very close range, between $5.34 million to $5.52 million. The results shows the bank is neither growing or losing business but is consistent with its earnings. Elmira has, however, seen its earnings per share decrease from an average of .39 per Q4 quarter to .27. This can be attributed to the increased number of shares outstanding 548,430 common shares, April 2017, due to private placement.
We find this is a nice small community bank that has served its community all the way back to the 1800's, it has solid, consistent earnings with an incredible dividend yield of 7.35%. Looking at its most recent quarterly results, we liked what Thomas M. Carr, President and CEO had to say:
“We are pleased with the improvement in net income during the first quarter. We are concerned about the current COVID-19 pandemic and the impact it is having on our economy, but feel fortunate that our market areas have not yet experienced the widespread health crisis, like other areas of the state”
Although COVID-19 should have affected Elmera, it produced a higher than expected income when compared to the same period last year, this was nice to see. From the quarterly highlights we see that: 1. Net income was $1,018,000 for the three months ended March 31, 2020 compared to $927,000 for the same period in 2019.
2. Diluted earnings per share were $.29 per share for the three months ended March 31, 2020 compared to $.26 per share for the same period in 2019.
3. Return on average assets was .68% for the three months ended March 31, 2020 and .64% for the same period in 2019.
4. Return on average equity was 6.93% for the three months ended March 31, 2020 compared to 6.41% for the same period in 2019. (source: GlobeNewswire).
Overall this is a great income generating bank that will likely to continue to produce relatively solid profits over the long term. In the short term however there could be bumps ahead which could affect Elmera's ability to continue to pay its dividend. However, with a book value per share of $16.77 and a current share price of $12.75, the stock has priced in most of the bad news. Even with Covid 19 we still believe this is a moderately undervalued stock. This could be a nice add on to your portfolio, take a look and decide yourself.
About Elmira Savings Bank
Elmira community bank was founded back in 1869 and is currently headquartered in Elmira, New York and has a total of 13 locations. As stated on their website Elmira community bank is an independent bank serving consumers and businesses in and around Chemung, Schuyler, Steuben, Cayuga, Cortland, Tompkins, and Broome Counties, New York.
Investor Relations: Here
Lines of Business:
Retail Banking Business Banking Consumer and Business Loans
Bank size: Small Community Bank
Elmira community bank has just 13 location in the north west part of New York state, it opened a new branch back in 2015 in Watkins Glen, NY. No additional mergers, acquisitions or branch openings have occurred since the new branch opening. This makes Elmira Savings Bank a steady Small Community bank but not a growth story.
Disclosure: mysmallbank.com nor the author received any compensation from the mentioned security for this article. The article is our opinion only and is written to help readers learn more about community bank stocks. Consider this as basic information only and utilize professional services and additional sources before making an investment decision.