Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ESSA Bancorp, Inc. | d497525d8k.htm |
 |
 Certain
statements
contained
herein
are
“forward-looking
statements”
within
the
meaning
of
Section
27A
of
the
Securities
Act
of
1933
and
Section
21E
of
the
Securities
Exchange
Act
of
1934. Such forward-looking statements may be identified by reference to a future
period or periods, or by the use of forward-looking terminology, such as
“may”, “will”, “believe”, “expect”,
“estimate”, “anticipate”, “continue”, or similar terms or variations on those terms, or
the negative of those terms. Forward-looking statements are subject to numerous
risks and uncertainties, including, but not limited to, those related to the economic
environment, particularly in the market areas in which ESSA Bancorp, Inc. (the
“Company”) operates, competitive products and pricing, fiscal and monetary
policies of the U.S. Government, changes in government regulations affecting financial
institutions, including regulatory fees and capital requirements, changes in prevailing
interest rates, acquisitions and the integration of acquired
businesses, credit risk management, asset-liability management, the financial and
securities markets and the availability of and costs associated with sources of
liquidity. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made.
The Company wishes to advise readers that the factors listed above could affect the
company’s financial performance and could cause the Company’s actual results
for future periods to differ materially from any opinions or statements expressed with
respect to future periods in any current statements. The Company does not undertake and
specifically declines any obligation to publicly release the result of any revisions which may
be made to any forward-looking statements to reflect events or circumstances after
the date of such statements or to reflect the occurrence of anticipated or
unanticipated event. Forward Looking Statements |
 ESSA
Bancorp 2012 In Review
Focusing on First Bank Acquisition as a Public Company
•
First Star Bank acquisition, which closed July 31, 2012, greatly
expanded scope & reach in the Lehigh Valley with 9 new branches
•
Total assets increased 30% to approximately $1.4 billion in 2012
compared to $1.1 billion in 2011
•
Loans increased 29% to approximately $950 million in 2012
compared to $738 million in 2011
o
Originated $157 million in loans
o
Modified additional $70 million in loans
•
Deposits increased 56% to approximately $996 million in 2012
compared to $638 million in 2011 |
 We continue
to closely monitor risk management parameters in this challenging economic
environment. •
Credit Quality –
o
Utilize our time honored underwriting guidelines
o
Work with customers needing assistance
•
Interest Rate Risk –
Limit exposure to long-term, fixed rate credits
in anticipation of interest rates rising
•
Capital Management
o
Dividends –
We continue to distribute quarterly dividends to
our stockholders (our 19
th
consecutive dividend was paid on
12/31/12).
o
Stock Repurchases –
ESSA has completed four stock
repurchase programs and has started a fifth buyback for
another 10% of our shares, or 1.3 million
o
Mergers & Acquisitions |
 Upon the
acquisition of First Star Bank, management moved quickly to integrate the operation
with ESSA. •
Immediately began to upgrade branch facilities internally and
externally
o
New ESSA technology
o
New ESSA signage
o
ESSA marketing materials -
enhancing our visibility and creating
a more welcoming environment for customers and employees
o
Integration of systems to build efficiencies
•
The acquisition of First Star was immediately beneficial to ESSA’s
financial outlook
o
Lower dilution than anticipated, decreasing the payback period
to less than 2 years
o
Reduced First Star’s expenses by over 30%
o
Retired high interest junior subordinated and FHLB debt that we
expect will generate meaningful savings for the combined
company going forward |
 Total Assets (in
$ thousands) 993,482
1,042,119
1,071,997
1,097,480
1,418,786
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
9/30/08
9/30/09
9/30/10
9/30/11
9/30/12 |
 Total Loans (in
$ thousands) 706,890
733,580
730,842
738,619
950,355
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
9/30/08
9/30/09
9/30/10
9/30/11
9/30/12 |
 Commercial &
Municipal Loans (in $ thousands) 81,355
84,340
94,488
119,997
206,746
0
50,000
100,000
150,000
200,000
250,000
9/30/08
9/30/09
9/30/10
9/30/11
9/30/12 |
 Total Deposits
(in $ thousands) 370,529
408,855
540,410
637,924
995,634
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
9/30/08
9/30/09
9/30/10
9/30/11
9/30/12 |
 Net Income (in
$ thousands) The Bank’s earnings in 2012 reflect expenses related to the
acquisition and also payoff of wholesale borrowings. These borrowings were
paid off when the Federal Reserve Bank announced
details
of
their
third
quantitative
easing
program,
or
QE3,
in
September
2012;
signaling that lower interest rates would continue for an extended period of time.
The acquisition expenses were well within what we anticipated and are detailed in our
regulatory reporting and shareholder communications. |
 Stockholders’
Equity (in $ thousands)
200.1
185.5
171.6
161.7
175.4
0
50
100
150
200
250
2008
2009
2010
2011
2012 |
 Total Stock
Return Performance Source: SNL Financial LC, Charlottesville, NC
|
 Stock Price
Performance Source: SNL Financial LC, Charlottesville, NC
|
 ESSA
Institutional Shareholder Activity 2012 ESSA became a growth and accelerated earnings
story •
Even
with
change
in
orientation
from
a
“value
play”
to
a
long-term
“growth play,”
stock price kept pace with bank index
•
New growth investors have bought into the stock
•
Many committed value investors maintained positions in ESSA
•
Some value and deep value investors exited as ESSA no longer met
investing model
•
Net-net, buys and sells balanced out
•
Ended FY 1Q 2013 with more institutional shareholders and a more
diverse institutional shareholder mix than ever
•
Daily trading volume/liquidity very strong |
 The
Right
Way
to
Bank
encompasses
all
aspects
of
ESSA’s
culture.
By
continually
doing the “right thing”
again and again, we remain a relevant, strong financial
institution that will weather the challenges of our industry.
•
We remain a Safe, Sound, and Secure Institution
We are well capitalized -
Tier 1 Capital Leverage Ratio of 11.1%
Non-performing assets/assets 1.92%
Low Texas Ratio of 16.47% (MRQ)
•
We are well positioned to enhance the Bank’s value
Our asset growth is generating higher revenues, accounting for an
increase in earnings per share
Geographic growth into the Lehigh Valley presents new opportunities
Offering a full range of retail and business products/services
Traditional Banking Products & Services
Asset Management & Trust Services
Investment Services
Advisory Services
Talented team of employees provide high level of personal service,
attention, and professionalism
Investment in systems to support a larger entity |