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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: September 30, 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 Exchange Act Rule 12b-2)    Yes  x    No  ¨

 

Number of shares of common stock outstanding as of October 31, 2004:

 

Common Stock, $0.01 par value

  

10,707,269 shares

(Class)   (Outstanding)

 

 

Table of Contents

ESB FINANCIAL CORPORATION

 

TABLE OF CONTENTS

 

 

     PART I - FINANCIAL INFORMATION     
Item 1.    Financial Statements     
     Consolidated Statements of Financial Condition as of September 30, 2004 and December 31, 2003 (Unaudited)    1
     Consolidated Statements of Operations for the three and nine months ended September 30, 2004 and 2003 (Unaudited)    2
     Consolidated Statement of Changes in Stockholders’ Equity For the nine months ended September 30, 2004 (Unaudited)    3
     Consolidated Statements of Cash Flows for the nine months ended September 30, 2004 and 2003 (Unaudited)    4
     Notes to Unaudited Consolidated Financial Statements    6
Item 2.    Management’s Discussion and Analysis of Results of Operations and Financial Condition    18
Item 3.    Quantitative and Qualitative Disclosures about Market Risk    32
Item 4.    Controls and Procedures    32
PART II - OTHER INFORMATION
Item 1.    Legal Proceedings    33
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds    33
Item 3.    Defaults Upon Senior Securities    33
Item 4.    Submission of Matters to a Vote of Security Holders    33
Item 5.    Other Information    33
Item 6.    Exhibits    34
     Signatures    35

Table of Contents

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

ESB Financial Corporation and Subsidiaries

Consolidated Statements of Financial Condition

As of September 30, 2004 (Unaudited) and December 31, 2003

(Dollar amounts in thousands)

 

    

September 30, 2004

(Unaudited)

     December 31, 2003
  
Assets                 

Cash on hand and in banks

    $ 6,428     $ 6,351  

Interest-earning deposits

      8,365       7,472  

Federal funds sold

      1,360       1,507  
    
 

Cash and cash equivalents

      16,153       15,330  

Securities available for sale; cost of $919,017 and $914,459

      930,161       928,936  

Loans receivable, net of allowance for loan losses of $4,068 and $4,062

      341,672       322,454  

Accrued interest receivable

      7,223       7,630  

Federal Home Loan Bank (FHLB) stock

      31,486       30,678  

Premises and equipment, net

      9,751       9,476  

Real estate acquired through foreclosure, net

      1,443       1,164  

Real estate held for investment

      10,725       11,429  

Goodwill

      7,127       7,127  

Intangible assets

      523       705  

Prepaid expenses and other assets

      7,097       6,206  

Bank owned life insurance

      25,347       24,645  
    
 

Total assets

    $ 1,388,708     $ 1,365,780  
    
 
Liabilities and Stockholders’ Equity                 

Liabilities:

                 

Deposits

    $ 575,441     $ 603,046  

FHLB advances

      616,525       570,240  

Repurchase agreements

      57,000       47,000  

Other borrowings

      15,069       62  

Junior subordinated notes

      15,193       35,187  

Advance payments by borrowers for taxes and insurance

      893       1,837  

Accrued expenses and other liabilities

      10,820       11,537  
    
 

Total liabilities

      1,290,941       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;

      109       109  

10,930,298 and 10,930,393 shares issued;

                 

10,710,020 and 10,785,399 shares outstanding

                 

Additional paid-in capital

      60,841       60,202  

Treasury stock, at cost; 220,278 and 144,994 shares

      (3,019 )     (2,083 )

Unearned Employee Stock Ownership Plan (ESOP) shares

      (5,761 )     (6,504 )

Unvested shares held by Management Recognition Plan (MRP)

      (355 )     (196 )

Retained earnings

      39,100       35,879  

Accumulated other comprehensive income, net

      6,852       9,464  
    
 

Total stockholders’ equity

      97,767       96,871  
    
 

Total liabilities and stockholders’ equity

    $ 1,388,708     $ 1,365,780  
    
 

 

See accompanying notes to unaudited consolidated financial statements.

 

1

Table of Contents

ESB Financial Corporation and Subsidiaries

Consolidated Statements of Operations

For the three and nine months ended September 30, 2004 and 2003 (Unaudited)

(Dollar amounts in thousands, except share data)

 

     Three Months Ended
September 30,
    

Nine Months Ended

September 30,

  
     2004
    2003
     2004
    2003
  

Interest income:

                               

Loans receivable

    $ 5,060    $ 5,223     $ 15,220    $ 16,492  

Taxable securities available for sale

      8,671      8,178       25,896      26,673  

Tax-exempt securities available for sale

      1,282      1,075       3,702      3,351  

FHLB stock

      108      153       293      562  

Interest-earning deposits and federal funds sold

      22      18       51      61  
    
  
 
  

Total interest income

      15,143      14,647       45,162      47,139  
    
  
 
  

Interest expense:

                               

Deposits

      2,732      3,086       8,101      10,213  

Borrowed funds

      6,110      6,095       17,632      19,612  

Junior subordinated notes and guaranteed preferred beneficial interest in subordinated debt

      200      574       637      1,715  
    
  
 
  

Total interest expense

      9,042      9,755       26,370      31,540  
    
  
 
  

Net interest income

      6,101      4,892       18,792      15,599  

Provision for (recovery of) loan losses

      57      (237 )     298      (267 )
    
  
 
  

Net interest income after provision for (recovery of) loan losses

      6,044      5,129       18,494      15,866  
    
  
 
  

Noninterest income:

                               

Fees and service charges

      551      564       1,750      1,225  

Net gain on sale of loans

      7      153       40      425  

Increase of cash surrender value of bank owned life insurance

      237      230       702      719  

Net realized gain on sale of securities available for sale

      —        460       943      1,226  

Income from real estate joint ventures

      642      815       1,472      1,906  

Other

      125      155       350      443  
    
  
 
  

Total noninterest income

      1,562      2,377       5,257      5,944  
    
  
 
  

Noninterest expense:

                               

Compensation and employee benefits

      2,855      2,812       8,589      8,309  

Premises and equipment

      497      433       1,380      1,321  

Federal deposit insurance premiums

      21      24       67      73  

Data processing

      393      358       1,176      1,022  

Amortization of intangible assets

      43      51       129      154  

Minority interest

      267      369       585      830  

Loss on early extinguishment of debt

      —        —         844      215  

Other

      725      816       2,394      2,409  
    
  
 
  

Total noninterest expense

      4,801      4,863       15,164      14,333  
    
  
 
  

Income before income taxes

      2,805      2,643       8,587      7,477  

Provision for income taxes

      205      478       1,187      1,278  
    
  
 
  

Net income

    $ 2,600    $ 2,165     $ 7,400    $ 6,199  
    
  
 
  

Net income per share

                               

Basic

    $ 0.26    $ 0.21     $ 0.73    $ 0.61  

Diluted

    $ 0.25    $ 0.20     $ 0.70    $ 0.58  

Cash dividends declared per share

    $ 0.10    $ 0.10     $ 0.30    $ 0.30  

Weighted average shares outstanding

      10,154,736      10,156,814       10,195,370      10,181,395  

Weighted average shares and share equivalents outstanding

      10,496,428      10,662,533       10,582,279      10,700,670  

 

See accompanying notes to unaudited consolidated financial statements.

 

2

Table of Contents

ESB Financial Corporation and Subsidiaries

Consolidated Statement of Changes in Stockholders’ Equity

For the nine months ended September 30, 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