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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
______________
Date of Report (Date of earliest event
reported): October
17, 2023
ENB Financial Corp
(Exact name of Registrant as specified in its charter)
Pennsylvania |
|
000-53297 |
|
51-0661129 |
(State or other
jurisdiction of
incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification No.) |
31 E. Main St., Ephrata, PA |
|
17522-0457 |
(Address of principal executive offices) |
|
(Zip Code) |
(717) 733-4181
(Registrant’s telephone number, including area
code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
None |
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N/A |
|
N/A |
Indicate by check mark whether the Registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the Registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
CURRENT REPORT ON FORM 8-K
|
Item 2.02 |
Results of Operations and Financial Condition |
The Registrant
issued a press release regarding earnings for the third quarter of 2023 on October 17, 2023 attached as Exhibit 99 and incorporated herein
by reference.
The information
furnished under this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99, shall not be deemed “filed” for purposes
of the Securities Exchange Act of 1934, as amended.
|
Item 9.01 |
Financial Statements and Exhibits |
The following
exhibits are filed in this Current Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
ENB FINANCIAL CORP |
|
(Registrant) |
|
|
|
|
|
|
|
|
|
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|
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Dated: October 18, 2023 |
By: |
/s/ Rachel G. Bitner |
|
|
Rachel G. Bitner |
|
|
Treasurer |
|
|
(Principal Financial Officer) |
![](https://www.sec.gov/Archives/edgar/data/1437479/000117494723001209/image_003.jpg)
FOR IMMEDIATE RELEASE |
Contact: |
Rachel Bitner |
|
Phone: |
717-733-4181 |
ENB Financial
Corp Reports Third Quarter 2023 Results
(October 17, 2023) -- Ephrata, PA –
ENB Financial Corp (OTCQX: ENBP), the bank holding company for Ephrata National Bank, reports net income for the third quarter of 2023
of $3,613,000, a $396,000, or 9.9% decrease, from the $4,009,000 earned during the third quarter of 2022. Net income for the nine months
ended Sepember 30, 2023, was $7,851,000, a $1,907,000, or 19.5% decrease, from the $9,758,000 earned for the nine months ended September
30, 2022. Basic and diluted earnings per share for the third quarter of 2023 and 2022 were $0.64 and $0.71, respectively and year-to-date
earnings per share were $1.39 in 2023 compared to $1.74 in 2022.
The Corporation’s earnings were negatively
impacted by several factors through the third quarter 2023 including higher interest expense and higher operating expenses as detailed
in the paragraphs that follow. These negative trends were partially offset by higher interest and dividend income and a release of the
provision for credit losses that occurred in the third quarter of 2023.
The Corporation’s net interest income
(NII) decreased by $231,000, or 1.7% for the quarter, and increased by $4,535,000, or 12.5% for the nine months ended September 30, 2023,
compared to the same periods in 2022. The decrease in NII for the quarter primarily resulted from an increase in interest expense on deposits
and borrowings of $5,296,000, or 382.9%, compared to the third quarter of 2022. The increase in NII for the nine month period was due
to an increase in interest income on loans of $15,183,000, or 51.7%, compared to the same period in 2022, and an increase in interest
income on securities of $1,746,000, or 18.8%, compared to the same period in 2022. Conversely, interest expense on deposits and borrowings
increased by $13,165,000 or 461.8%, for nine months ended September 30, 2023, compared to the same period in the prior year due to the
rapid market rate increases causing pressure on deposit retention and rates.
The Corporation recorded a release of the
provision for credit losses of $504,000 for the third quarter of 2023, compared to a provision expense of $550,000 for the third quarter
of 2022. For the year-to-date period, provision expense was $1,568,000, an increase of $268,000, or 20.6%, compared to provision expense
of $1,300,000 recorded for the nine months ended September 30, 2022. The Corporation adopted ASU 2016-13 Financial Instruments –
Credit Losses: Measurement of Credit Losses on Financial Instruments as of January 1, 2023. This required standard implements
a methodology that reflects credit losses that are expected to occur over the remaining life of the financial asset. This new current
expected credit loss model (CECL) is based on possible economic scenarios as well as qualitative factors specific to the Corporation.
During 2023, there was a significant change in the forward credit outlook due to a high interest rate environment and the Corporation
also grew its loan portfolio by $144.5 million during the first nine months of 2023. Both of these factors resulted in higher levels of
required allowance. However, during the third quarter, slightly improved economic factors resulted in a decrease in the allowance requirement
enabling the Corporation to release provision expense for the quarter. The allowance as a percentage of total loans was 1.22% as of September
30, 2023, and 1.27% as of September 30, 2022.
( more )
ENB FINANCIAL CORP
Other income increased by $375,000, or 11.8%
for the three months ended September 30, 2023, and decreased $1,244,000, or 12.6%, for the nine months ended September 30, 2023, compared
to the same periods in the prior year. The increase for the quarter was primary due to an increase in service fees. The decrease for the
year-to-date period was primarily due to an increase in losses on securities sold and a lower level of gains on mortgages sold. The Corporation
sold investment securities to fund higher yielding loan growth during 2023 which resulted in realized losses of $1,364,000 for the year-to-date
period. Management has concluded that the unrealized losses on the available-for-sale debt securities are all driven by the higher interest
rate environment and has not recorded a provision for expected credit losses. Additionally, the Corporation recorded unrealized losses
on the Corporation’s bank stock portfolio of $405,000 for the nine months ended September 30, 2023. Combined, losses on securities
transactions increased by $112,000 for the quarter and $1,779,000 for the year-to-date period in 2023 compared to the prior year. Gains
on the sale of mortgages declined by $743,000, or 59.5% for the nine months ended September 30, 2023, compared to the same period in the
prior year.
Total operating expenses increased by $1,520,000,
or 13.2%, and $5,001,000 or 14.9%, for the three and nine months ended September 30, 2023, compared to the same periods in 2022. Salary
and benefit expenses, which make up the largest portion of operating expenses, increased by $743,000, or 11.2%, and $2,880,000, or 14.5%
for the three and nine months ended September 30, 2023, compared to the same periods in 2022, due to the competitive labor market, increased
healthcare costs, and the cost to hire and retain qualified talent. Other operating expenses outside of salaries and benefits increased
primarily due to increases related to technology investments, marketing, and network fees.
The Corporation’s annualized return
on average assets (ROA) and return on average stockholders’ equity (ROE) for the third quarter of 2023 decreased to 0.75% and 13.68%,
respectively, from 0.89% and 15.63% for the third quarter of 2022. For the nine months ended September 30, 2023, the Corporation’s
annualized ROA was 0.56%, compared to 0.75% in 2022, while the ROE was 10.11%, compared to 11.49% in 2022.
As of September 30, 2023, the Corporation
had total assets of $1.91 billion, up 4.6%; total loans of $1.34 billion, up 19.8%; total deposits of $1.66 billion, up 1.8%; and total
stockholders’ equity of $97.5 million, up 13.2%, from balances at September 30, 2022.
ENB Financial Corp, headquartered in Ephrata, PA,
is the bank holding company for its wholly-owned subsidiary Ephrata National Bank. Ephrata National Bank operates from thirteen full-service
locations in Lancaster County, southeastern Lebanon County, and southern Berks County, Pennsylvania, with the headquarters located at
31 E. Main Street, Ephrata, PA. Ephrata National Bank has been serving the community since 1881. For more information about ENB Financial
Corp, visit the Corporation’s web site at www.enbfc.com.
Notice Regarding Forward Looking Statements
This news release may constitute forward-looking statements for purposes
of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown
risk, uncertainties and other factors which may cause the actual results of ENB Financial Corp to be materially different from future
results expressed or implied by such forward-looking statements. These forward-looking statements can be identified by use of terminology
such as “expect”, “plan”, “anticipate”, “believe”, “estimate”, and similar
words that are intended to identify such forward-looking statements. These forward-looking statements are based on management’s
current expectations, assumptions, estimates, and projections about the Corporation, the financial services industry, and the economy.
The Private Securities Reform Act of 1995 provides safe harbor in the event the projected future operations are not met. There are a number
of future factors such as changes in fiscal or monetary policy, or changes in the economic climate that will influence the Corporation’s
future operations. These factors are difficult to predict with regard to how likely and to what degree or significance that they would
occur. Actual results may differ materially from what may have been forecasted in the forward-looking statements. We are not obligated
to publicly update any forward-looking statements to reflect the effects of subsequent events.
ENB FINANCIAL CORP
SUMMARY CONSOLIDATED FINANCIAL INFORMATION (Unaudited)
(in thousands, except per share and percentage
data)
| |
September 30, | |
% |
Balance Sheet | |
2023 | |
2022 | |
Change |
| |
| |
| |
|
Securities | |
$ | 447,193 | | |
$ | 568,597 | | |
| -21.4% | |
Total loans | |
| 1,335,597 | | |
| 1,114,504 | | |
| 19.8% | |
Allowance for credit losses | |
| 16,349 | | |
| 14,150 | | |
| 15.5% | |
Total assets | |
| 1,908,547 | | |
| 1,824,304 | | |
| 4.6% | |
Deposits | |
| 1,660,990 | | |
| 1,631,849 | | |
| 1.8% | |
Total borrowings | |
| 138,044 | | |
| 98,562 | | |
| 40.1% | |
Stockholders' equity | |
| 97,502 | | |
| 86,155 | | |
| 13.2% | |
| |
| | | |
| | | |
| | |
| |
Three Months Ended | |
Nine Months Ended |
Income Statement | |
September 30, | |
September 30, |
| |
2023 | |
2022 | |
2023 | |
2022 |
| |
| |
| |
| |
|
Net interest income | |
$ | 13,358 | | |
$ | 13,589 | | |
$ | 40,819 | | |
$ | 36,284 | |
(Release) provision for credit losses | |
| (504 | ) | |
| 550 | | |
| 1,568 | | |
| 1,300 | |
Noninterest income | |
| 3,555 | | |
| 3,180 | | |
| 8,631 | | |
| 9,875 | |
Noninterest expense | |
| 13,033 | | |
| 11,513 | | |
| 38,599 | | |
| 33,598 | |
Income before taxes | |
| 4,384 | | |
| 4,706 | | |
| 9,283 | | |
| 11,261 | |
Provision for income taxes | |
| 771 | | |
| 697 | | |
| 1,432 | | |
| 1,503 | |
Net Income | |
| 3,613 | | |
| 4,009 | | |
| 7,851 | | |
| 9,758 | |
| |
| | | |
| | | |
| | | |
| | |
Per Share Data | |
| | | |
| | | |
| | | |
| | |
Earnings per share | |
| 0.64 | | |
| 0.71 | | |
| 1.39 | | |
| 1.74 | |
Dividends per share | |
| 0.17 | | |
| 0.17 | | |
| 0.51 | | |
| 0.51 | |
| |
| | | |
| | | |
| | | |
| | |
Earnings Ratios | |
| | | |
| | | |
| | | |
| | |
Return on average assets (ROA) | |
| 0.75% | | |
| 0.89% | | |
| 0.56% | | |
| 0.75% | |
Return on average stockholders equity (ROE) | |
| 13.68% | | |
| 15.63% | | |
| 10.11% | | |
| 11.49% | |
Net Interest margin | |
| 2.90% | | |
| 3.19% | | |
| 2.99% | | |
| 2.96% | |
Efficency ratio | |
| 75.9% | | |
| 67.4% | | |
| 74.6% | | |
| 71.4% | |
(end)
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