Embassy Bancorp, Inc. [EMYB] Filings

10-Q 1 emyb-20230630x10q.htm 10-Q emyb-20230630x10q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023 OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________________ TO __________________

Commission file number 000-53528


Embassy Bancorp, Inc.
(Exact name of registrant as specified in its charter)

Pennsylvania	26-3339011
(State of incorporation)	(I.R.S. Employer Identification No.)

One Hundred Gateway Drive, Suite 100 Bethlehem, PA	18017
(Address of principal executive offices)	(Zip Code)

(610) 882-8800
(Registrant’s Telephone Number)

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ¨	Accelerated Filer ¨
Non-Accelerated Filer 	Smaller Reporting Company
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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 or the Exchange Act.) Yes ¨ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date:


COMMON STOCK
Number of shares outstanding as of August 4, 2023	($1.00 Par Value)	7,603,164
	(Title Class)	(Outstanding Shares)

Embassy Bancorp, Inc.

Table of Contents


Part I – Financial Information	3

Item 1 – Financial Statements
Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Income (Unaudited)	4
Consolidated Statements of ComprehensiveIncome (Loss) (Unaudited)	5
Consolidated Statements of Stockholders’ Equity (Unaudited)	6
Consolidated Statements of Cash Flows (Unaudited)	8
Notes to Consolidated Financial Statements (Unaudited)	9

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3 – Quantitative and Qualitative Disclosures About Market Risk	42

Item 4 – Controls and Procedures	42

Part II - Other Information	43

Item 1 - Legal Proceedings	43

Item 1A - Risk Factors	43

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3 - Defaults Upon Senior Securities	43

Item 4 – Mine Safety Disclosures	43

Item 5 - Other Information	43

Item 6 - Exhibits	44

Signatures	45

‎

Embassy Bancorp, Inc.

Part I – Financial Information

Item 1 – Financial Statements

Consolidated Balance Sheets (Current Period Unaudited)



	June 30,		December 31,
ASSETS	2023		2022

	(In Thousands, Except Share Data)
Cash and due from banks	$	18,319	$	21,927
Interest bearing demand deposits with banks		55,421		44,368
Federal funds sold		1,000		1,000
Cash and Cash Equivalents		74,740		67,295
Securities available for sale		315,239		316,992
Restricted investment in bank stock		2,933		995
Loans receivable, net of allowance for credit losses of $12,748 in 2023; $12,449 in 2022		1,230,694		1,196,164
Paycheck Protection Program loans receivable		6		286
Premises and equipment, net of accumulated depreciation		3,836		3,843
Bank owned life insurance		25,966		25,603
Accrued interest receivable		2,858		2,926
Other assets		25,548		26,123
Total Assets	$	1,681,820	$	1,640,227
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	342,765	$	381,811
Interest bearing		1,162,265		1,139,296
Total Deposits		1,505,030		1,521,107
Securities sold under agreements to repurchase		10,517		13,384
Short-term borrowings		46,875		-
Accrued interest payable		4,809		986
Other liabilities		19,558		16,474
Total Liabilities		1,586,789		1,551,951
Stockholders' Equity:
Common stock, $1 par value; authorized 20,000,000 shares;
2023 issued 7,755,958 shares; outstanding 7,603,164 shares;
2022 issued 7,739,785 shares; outstanding 7,586,991 shares;		7,756		7,740
Surplus		28,061		27,627
Retained earnings		110,196		106,551
Accumulated other comprehensive loss		(48,447)		(51,107)
Treasury stock, at cost: 152,794 shares at June 30, 2023 and
December 31, 2022, respectively		(2,535)		(2,535)
Total Stockholders' Equity		95,031		88,276
Total Liabilities and Stockholders' Equity	$	1,681,820	$	1,640,227

See notes to consolidated financial statements (unaudited).

‎

Embassy Bancorp, Inc.

Consolidated Statements of Income (Unaudited)



	Three Months Ended June 30,				Six Months Ended June 30,

	2023		2022		2023			2022

	(In Thousands, Except Per Share Data)

INTEREST INCOME
Loans, including fees	$	11,964	$	10,165	$	23,366	$	19,944
Paycheck Protection Program loans, including fees		-		7		1		181
Securities, taxable		1,559		1,502		3,102		2,793
Securities, non-taxable		305		302		610		584
Short-term investments, including federal funds sold		329		218		799		281
Total Interest Income		14,157		12,194		27,878		23,783
INTEREST EXPENSE
Deposits		4,054		886		6,868		1,761
Securities sold under agreements to repurchase and federal
funds purchased		86		2		143		4
Short-term borrowings		7		-		7		-
Long-term borrowings		-		-		-		19
Total Interest Expense		4,147		888		7,018		1,784
Net Interest Income		10,010		11,306		20,860		21,999
PROVISION FOR CREDIT LOSSES		110		350		110		350
Net Interest Income after ‎ Provision for Credit Losses		9,900		10,956		20,750		21,649
OTHER NON-INTEREST INCOME
Merchant and credit card processing fees		94		93		182		179
Debit card interchange fees		232		230		449		433
Other service fees		157		142		310		254
Bank owned life insurance		192		(139)		392		230
Total Other Non-Interest Income		675		326		1,333		1,096
OTHER NON-INTEREST EXPENSES
Salaries and employee benefits		3,592		3,329		7,318		6,585
Occupancy and equipment		949		928		1,936		1,889
Data processing		759		898		1,530		1,738
Advertising and promotion		280		205		567		351
Professional fees		261		231		499		440
FDIC insurance		200		102		377		231
Loan & real estate		45		47		97		120
Charitable contributions		290		290		513		515
Other		486		518		893		995
Total Other Non-Interest Expenses		6,862		6,548		13,730		12,864

Income Before Income Taxes		3,713		4,734		8,353		9,881
INCOME TAX EXPENSE		666		963		1,519		1,909
Net Income	$	3,047	$	3,771	$	6,834	$	7,972

BASIC EARNINGS PER SHARE	$	0.40	$	0.50	$	0.90	$	1.06

DILUTED EARNINGS PER SHARE	$	0.40	$	0.50	$	0.90	$	1.05

DIVIDENDS PER SHARE	$	0.40	$	0.35	$	0.40	$	0.35

See notes to consolidated financial statements (unaudited).
‎

Embassy Bancorp, Inc.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)



	Three Months Ended June 30,
	2023			2022

		(In Thousands)
Net Income	$		3,047	$		3,771
Change in Accumulated Other Comprehensive Loss:
Unrealized holding loss on securities available for sale		(881)			(21,920)
Less: reclassification adjustment for realized gains		-			-
		(881)			(21,920)
Income tax effect		185			4,604

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