ESB FINANCIAL CORP - 10-Q Quarterly Report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For Quarter Ended: March 31, 2004

Commission File Number: 0-19345

ESB FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)


Pennsylvania		25-1659846
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

600 Lawrence Avenue, Ellwood City, PA		16117
(Address of principal executive offices)		(Zip Code)

(724) 758-5584

(Registrant’s telephone number, including area code)

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 such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

Number of shares of common stock outstanding as of April 30, 2004: 10,807,073 shares

ESB FINANCIAL CORPORATION

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Statements of Financial Condition as of March 31, 2004 (Unaudited) and December 31, 2003	1

	Consolidated Statements of Operations for the three months ended March 31, 2004 and 2003 (Unaudited)	2

	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2004 (Unaudited)	3

	Consolidated Statements of Cash Flows for the three months ended March 31, 2004 and 2003 (Unaudited)	4

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25

Item 4.	Controls and Procedures	25

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	26

Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	26

Item 3.	Defaults Upon Senior Securities	26

Item 4.	Submission of Matters to a Vote of Security Holders	26

Item 5.	Other Information	26

Item 6.	Exhibits and Reports on Form 8-K	26

	Signatures	27

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ESB Financial Corporation and Subsidiaries

Consolidated Statements of Financial Condition

As of March 31, 2004 (Unaudited) and December 31, 2003

(Dollar amounts in thousands)


	March 31, 2004 (Unaudited)			December 31, 2003
Assets
Cash on hand and in banks	$	6,840		$	6,351
Interest-earning deposits		6,063			7,472
Federal funds sold		5,182			1,507
Securities available for sale; cost of $906,014 and $914,459		925,506			928,936
Loans receivable, net of allowance for loan losses of $4,067 and $4,062		331,286			322,454
Accrued interest receivable		7,022			7,630
Federal Home Loan Bank (FHLB) stock		31,752			30,678
Premises and equipment, net		9,507			9,476
Real estate acquired through foreclosure, net		1,129			1,164
Real estate held for investment		10,948			11,429
Goodwill		7,127			7,127
Intangible Assets		619			705
Prepaid expenses and other assets		4,308			6,206
Bank owned life insurance		24,879			24,645

Total assets	$	1,372,168		$	1,365,780

Liabilities and Stockholders’ Equity
Liabilities:
Deposits	$	583,241		$	603,046
FHLB advances		607,622			570,240
Repurchase agreements		37,000			47,000
Other borrowings		15,155			62
Junior subordinated notes		15,155			35,187
Advance payments by borrowers for taxes and insurance		1,608			1,837
Accrued expenses and other liabilities		11,209			11,537

Total liabilities		1,270,990			1,268,909

Stockholders’ Equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued
Common stock, $.01 par value, 30,000,000 shares authorized;		—			—
10,930,305 and 10,930,393 shares issued;
10,809,882 and 10,785,399 shares outstanding		109			109
Additional paid-in capital		60,291			60,202
Treasury stock, at cost; 120,423 and 144,994 shares		(1,757	)		(2,083	)
Unearned Employee Stock Ownership Plan (ESOP) shares		(6,254	)		(6,504	)
Unvested shares held by Management Recognition Plan (MRP)		(189	)		(196	)
Retained earnings		36,458			35,879
Accumulated other comprehensive income, net		12,520			9,464

Total stockholders’ equity		101,178			96,871

Total liabilities and stockholders’ equity	$	1,372,168		$	1,365,780

See accompanying notes to consolidated financial statements.

ESB Financial Corporation and Subsidiaries

Consolidated Statements of Operations

For the three months ended March 31, 2004 and 2003 (Unaudited)

(Dollar amounts in thousands, except share data)


	Three Months Ended March 31,
	2004		2003
Interest income:
Loans receivable	$	5,053	$	5,774
Taxable securities available for sale		8,862		9,536
Tax free securities available for sale		1,192		1,171
FHLB stock		77		241
Deposits with banks and federal funds sold		16		26

Total interest income		15,200		16,748

Interest expense:
Deposits		2,713		3,691
Borrowed funds		5,762		6,795
Guaranteed preferred beneficial interest in subordinated debt		254		557

Total interest expense		8,729		11,043

Net interest income		6,471		5,705
Provision for (recovery of) loan losses		19		(182	)

Net interest income after provision for (recovery of) loan losses		6,452		5,887

Noninterest income:
Fees and service charges		434		244
Net gain on sale of loans		13		116
Increase of cash surrender value of bank owned life insurance		234		256
Net realized gain on sales of securities available for sale		943		435
Income from real estate joint ventures		345		320
Other		93		186

Total noninterest income		2,062		1,557

Noninterest expense:
Compensation and employee benefits		2,823		2,671
Premises and equipment		438		448
Federal deposit insurance premiums		23		25
Data processing		394		327
Amortization of intangible assets		43		51
Minority Interest		140		127
Loss on early extinguishment of debt		844		—
Other		850		874

Total noninterest expense		5,555		4,523

Income before provision for income taxes		2,959		2,921
Provision for income taxes		521		557

Net income	$	2,438	$	2,364

Net income per share:
Basic	$	0.24	$	0.23
Diluted	$	0.23	$	0.22
Cash dividends declared per share	$	0.10	$	0.08
Weighted average shares outstanding		10,218,532		10,165,063
Weighted average shares and share equivalents outstanding		10,670,413		10,645,468

See accompanying notes to consolidated financial statements.

ESB Financial Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2004 (Unaudited)

(Dollar amounts in thousands)


	Common stock		Additional paid-in capital		Treasury stock			Unearned ESOP shares			Unvested MRP shares			Retained earnings			Accumulated other comprehensive income net of tax			Total stockholders’ equity
Balance at December 31, 2003	$	109	$	60,202	$	(2,083	)	$	(6,504	)	$	(196	)	$	35,879		$	9,464		$	96,871
Comprehensive results:
Net income		—		—		—			—			—			2,438			—			2,438
Other comprehensive results, net		—		—		—			—			—			—			3,670			3,670
Reclassification adjustment		—		—		—			—			—			—			(614	)		(614	)

Total comprehensive results		—		—		—			—			—			2,438			3,056			5,494
Cash dividends at $0.10 per share		—		—		—			—			—			(1,022	)		—			(1,022	)
Purchase of treasury stock, at cost (53,821 shares)		—		—		(765	)		—			—			—			—			(765	)
Reissuance of treasury stock for stock option exercises		—		—		1,091			—			—			(837	)		—			254
Principal payments on ESOP debt		—		89		—			250			—			—			—			339
Accrued compensation expense MRP		—		—		—			—			7			—			—			7

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