|By Marketwired .||
|January 23, 2013 04:30 PM EST||
STROUDSBURG, PA -- (Marketwire) -- 01/23/13 -- ESSA Bancorp, Inc. (NASDAQ: ESSA), the holding company for ESSA Bank & Trust, today announced its operating results for its fiscal first quarter 2013. The Company reported net income of $2.9 million, or $0.24 per diluted share, for the three months ended December 31, 2012, compared with net income of $886,000, or $0.08 per diluted share, for the corresponding 2011 period.
The Company completed its acquisition of First Star Bancorp, Inc. on July 31, 2012. The results for the quarter ended December 31, 2012, reflect the effects of a larger company in fiscal first quarter 2013 compared to the company in fiscal first quarter 2012. Additionally, the quarter ended December 31, 2012, includes the recapture of approximately $973,000, before tax, of previous fair value adjustments on loans acquired as part of the First Star acquisition, as well as increased gains on the sale of fixed-rate long-term loans of $334,000 before tax.
Gary S. Olson, President and CEO, commented: "In our first full quarter as a combined entity, we operated with an increased base of earning assets and an enhanced presence throughout Pennsylvania's Lehigh Valley. Our earnings were consistent with anticipated results, with the positive addition of the recapture of interest income from the loans we acquired from First Star in 2012. We have made a good start in leveraging the strengths of a significantly larger institution."
As examples of the Bank's increased scale, Mr. Olson noted that assets in fiscal first quarter 2013 were $1.4 billion, compared with $1.1 billion in first quarter 2012. Loans receivable after loss allowance in fiscal first quarter 2013 were $940.3 million, compared with $742.1 million in fiscal first quarter 2012. Total deposits increased to $967.9 million in fiscal first quarter 2013, compared with $640.3 million in fiscal first quarter 2012.
"We continue to see evidence that the acquired assets are of strong quality," said Olson. "We feel asset and customer retention rates are high, and we have had excellent interaction with First Star customers on both the retail and commercial sides of our business.
"Developing a positive corporate culture following an acquisition is critical to our success. Employees have shown excitement about new opportunities, and have been instrumental in facilitating the transition. I think this spirit and attitude is evidenced by very high customer retention levels in the months following the acquisition's closing. I have had many informal meetings with employees and managers, and have been impressed with the quality and sincerity of their ideas and contributions. ESSA Bank & Trust is the largest locally based community bank in the region. I believe our employees are committed to making ESSA the clear banking choice for individuals and businesses in the region.
"For several years, our theme has been 'The Right Way to Bank.' We believe the best way for a community bank to retain and win banking business is with an enthusiastic, experienced team providing financial solutions and a great experience for customers and the community.
"We are beginning to see the financial benefits of eliminating First Star's high-rate debt instruments, reducing First Star expenses, consolidating back-office operations, as well as ESSA's prepayment of $37 million of its own higher rate borrowings in fiscal 2012. With more efficient operations and lower debt obligations, ESSA is well positioned to focus on growth opportunities."
Income Statement Demonstrates Stability, Growth Opportunities
Net interest income increased $4.0 million, or 59.8%, to $10.7 million for the three months ended December 31, 2012, from $6.7 million for the comparable period in the prior year fiscal quarter, primarily reflecting $2.9 million growth in interest income, and a decrease in interest expense from other borrowings of $1.2 million. Interest income increased primarily as a result of the growth of the company's loan portfolio in fiscal first quarter 2013 compared with fiscal first quarter 2012.
Interest income for the fiscal first quarter 2013 also includes the recapture of approximately $500,000, before tax, of a previously recorded fair value adjustment to a loan acquired as part of the First Star acquisition. This loan was fully repaid in the first quarter. An additional $473,000, before tax, was recaptured during the quarter related to similar loans that were partially repaid.
Interest expense decreased primarily as a result of a decrease in interest rates and a decrease in higher rate borrowings for the three months ended December 31, 2012 compared with the three months ended December 31, 2011. The company's interest rate spread was 3.14% for the three months ended December 31, 2012 and 2.30% for the prior year's first quarter. Net interest margin was 3.26% in fiscal first quarter 2013, compared with 2.57% in fiscal first quarter 2012.
Olson stated: "Acquiring First Star bolstered interest income, and we believe we have an excellent platform for building our commercial and lending businesses that should contribute to our future growth. A key initiative is to grow both business and retail checking in our served markets throughout the coming year. A critical component of this will be to expand relationships with both retail customers and businesses.
"We have maintained our banking leadership role in Monroe County, as a major lending source, and have the most deposits of any bank serving the county. However, this area was hard-hit by the recession and has struggled to recover. Our loan and deposit base in this market remains reasonably stable, but does not offer immediate opportunities for market growth as mortgage lending and business lending have been scarce. We have a solid and stable customer base in a market that has supported ESSA for 97 years, and we'll continue to seek out every opportunity to serve Monroe County and support its recovery and growth."
The provision for loan losses increased $500,000, or 100.0%, to $1,000,000 for the three months ended December 31, 2012, from $500,000 for the comparable period in 2011. In evaluating the level of the allowance for loan losses, management considers historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect a borrower's ability to repay, the estimated value of any underlying collateral, peer group information, and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are subject to interpretation and revision as more information becomes available or as future events occur. The provision for loan losses was in response to this evaluation.
Noninterest income increased $502,000, or 32.9%, to $2.0 million for the three months ended December 31, 2012, compared with the three months ended December 31, 2011, primarily reflecting an increase in the gain on sale of loans of $334,000. As part of its interest rate risk management strategy, the Company sold $11.5 million of long-term, fixed-rate mortgage loans during the quarter ended December 31, 2012. There were no loans sold during the comparable 2011 period.
"Although these loans are currently generating attractive returns in a low-interest rate environment, and they are good quality credits, we determined that since the Federal Reserve continues to keep long-term rates low, loans at these rates could have a negative impact on the Bank's margins once rates begin to rise," said Olson. "We anticipate selling more of these long-term loans during the next several quarters to further reduce our interest rate risk."
Noninterest expense increased to $7.5 million or 12.7%, for the three months ended December 31, 2012, from $6.7 million for the comparable period in 2011, reflecting increases in compensation and employee benefits of $620,000, occupancy and equipment of $193,000, data processing of $181,000 and amortization of intangible assets of $169,000. These increases were partially offset by decreases in professional fees of $178,000 and a decrease in the cost to liquidate foreclosed real estate of $293,000.
The increases in noninterest expenses were due primarily to the larger organization in fiscal first quarter 2013 compared with fiscal first quarter 2012. Management notes the Company is on-track to achieve a 30% cost savings in First Star's operations. The decrease in professional fees was due primarily to merger-related legal fees. There was a gain on the sales of foreclosed real estate of $226,000 for the quarter ended December 31, 2012, compared with a loss of $67,000 for the comparable period in 2011.
Balance Sheet, Asset Quality and Capital Adequacy
Total assets decreased $13.1 million, or 0.9%, to $1.41 billion at December 31, 2012, compared to $1.42 billion at September 30, 2012, although up significantly compared with pre-merger total assets. Increases in cash and cash equivalents of $4.4 million and investment securities of $1.9 million at December 31, 2012, compared with September 30, 2012, were offset by decreases in total loans receivable of $8.0 million, regulatory stock of $2.9 million and other assets of $8.5 million.
Total deposits decreased $27.7 million, or 2.8%, to $967.9 million at December 31, 2012, from $995.6 million at September 30, 2012. The primary reason for the decrease in deposits was a decrease in higher-rate certificates of deposit of $22.1 million, which the Company did not renew. Borrowings increased $9.2 million to $244.0 million from $234.7 million during the same period.
Stockholders' equity increased $1.9 million, or 1.1%, to $177.3 million at December 31, 2012, from $175.4 million at September 30, 2012. The increase was due primarily to an increase in retained earnings of $2.3 million. The Company's tier 1 leverage ratio was 12.38% at December 31, 2012.
Nonperforming assets totaled $28.5 million, or 2.03%, of total assets at December 31, 2012, compared with $27.2 million, or 1.92%, of total assets at September 30, 2012. The increase in nonperforming assets of $1.3 million at December 31, 2012 compared to September 30, 2012 was due primarily to an increase in non-performing residential mortgage loans of $1.3 million. The Company made a provision for loan losses of $1,000,000 for the three months ended December 31, 2012, compared with a provision of $500,000 for the comparable three-month period in 2011. The allowance for loan losses was $7.6 million, or 0.80%, of loans outstanding at December 31, 2012, compared to $7.3 million, or 0.76%, of loans outstanding at September 30, 2012.
"We continue to be satisfied with the quality of our loan portfolio," explained Olson. "We maintain very strict credit quality policies, and are comfortable with our current loan loss allowance and asset quality ratios. Due to a slowly recovering economy, we will continue to carefully monitor asset quality metrics and will continue to work diligently to reduce non-performing loans."
Olson concluded: "We believe economic conditions in the Lehigh Valley, particularly Bethlehem and Allentown, have not only stabilized, but are showing encouraging signs of strength and revitalization that we believe can generate lending and banking relationship opportunities. We also provide a full range of asset management, business services and employee benefits consulting capabilities, which we believe gives us a competitive advantage in winning customers' financial services business."
ESSA Bank & Trust, a wholly-owned subsidiary of ESSA Bancorp, Inc., has total assets of over $1.4 billion and is the leading service-oriented financial institution headquartered in the Greater Pocono, Pennsylvania region. The Bank maintains its corporate headquarters in downtown Stroudsburg, Pennsylvania and has 26 community offices throughout the Greater Pocono and Lehigh Valley areas in Pennsylvania. In addition to being one of the region's largest mortgage lenders, ESSA Bank & Trust offers a full range of retail, commercial financial services, and financial advisory and asset management capabilities. ESSA Bancorp, Inc. stock trades on The NASDAQ Global Market(SM) under the symbol "ESSA."
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 the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including compliance costs 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, that 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 events.
FINANCIAL TABLES FOLLOW
ESSA BANCORP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET (UNAUDITED) December 31, September 30, 2012 2012 ------------- ------------- (dollars in thousands) ASSETS Cash and due from banks $ 12,443 $ 11,034 Interest-bearing deposits with other institutions 7,474 4,516 ------------- ------------- Total cash and cash equivalents 19,917 15,550 Certificates of deposit 1,766 1,266 Investment securities available for sale 331,525 329,585 Loans receivable held for sale 2,096 346 Loans receivable (net of allowance for loan losses of $7,555 and $7,302) 940,275 950,009 Regulatory stock, at cost 19,054 21,914 Premises and equipment, net 16,100 16,170 Bank-owned life insurance 28,075 27,848 Foreclosed real estate 2,503 2,998 Intangible assets, net 3,207 3,457 Goodwill 8,541 8,541 Deferred income taxes 11,359 11,336 Other assets 21,224 29,766 ------------- ------------- TOTAL ASSETS $ 1,405,642 $ 1,418,786 ============= ============= LIABILITIES Deposits $ 967,892 $ 995,634 Short-term borrowings 84,500 43,281 Other borrowings 159,460 191,460 Advances by borrowers for taxes and insurance 6,943 3,432 Other liabilities 9,500 9,568 ------------- ------------- TOTAL LIABILITIES 1,228,295 1,243,375 ------------- ------------- STOCKHOLDERS' EQUITY Common stock 181 181 Additional paid in capital 181,748 181,220 Unallocated common stock held by the Employee Stock Ownership Plan (10,872) (10,985) Retained earnings 67,455 65,181 Treasury stock, at cost (62,353) (61,944) Accumulated other comprehensive income 1,188 1,758 ------------- ------------- TOTAL STOCKHOLDERS' EQUITY 177,347 175,411 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,405,642 $ 1,418,786 ============= ============= ESSA BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) For the Three Months Ended December 31 ----------------------------- (dollars in thousands) 2012 2011 ------------- -------------- INTEREST INCOME Loans receivable $ 12,237 $ 9,341 Investment securities: Taxable 1,630 1,638 Exempt from federal income tax 54 48 Other investment income 29 2 ------------- -------------- Total interest income 13,950 11,029 ------------- -------------- INTEREST EXPENSE Deposits 1,971 1,911 Short-term borrowings 36 5 Other borrowings 1,224 2,405 ------------- -------------- Total interest expense 3,231 4,321 ------------- -------------- NET INTEREST INCOME 10,719 6,708 Provision for loan losses 1,000 500 ------------- -------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 9,719 6,208 ------------- -------------- NONINTEREST INCOME Service fees on deposit accounts 807 727 Services charges and fees on loans 229 184 Trust and investment fees 215 215 Gain on sale of investments, net 30 - Gain on sale of loans, net 334 - Earnings on Bank-owned life insurance 226 198 Insurance commissions 175 191 Other 10 9 ------------- -------------- Total noninterest income 2,026 1,524 ------------- -------------- NONINTEREST EXPENSE Compensation and employee benefits 4,556 3,936 Occupancy and equipment 949 756 Professional fees 312 490 Data processing 663 482 Advertising 110 86 Federal Deposit Insurance Corporation (FDIC) Premiums 185 162 Loss (Gain) on foreclosed real estate (226) 67 Amortization of intangible assets 250 81 Other 706 602 ------------- -------------- Total noninterest expense 7,505 6,662 ------------- -------------- Income before income taxes 4,240 1,070 Income taxes 1,361 184 ------------- -------------- NET INCOME $ 2,879 $ 886 ============= ============== Earnings per share Basic $ 0.24 $ 0.08 Diluted 0.24 0.08 At and for the Three Months Ended December 31, ---------------------------- 2012 2011 ------------- ------------- (dollars in thousands) CONSOLIDATED AVERAGE BALANCES: Total assets $ 1,398,734 $ 1,091,756 Total interest-earning assets 1,304,096 1,037,175 Total interest-bearing liabilities 1,157,020 887,040 Total stockholders' equity 177,337 161,880 PER COMMON SHARE DATA: Average shares outstanding - basic 12,088,125 10,807,598 Average shares outstanding - diluted 12,088,125 10,807,598 Book value shares 13,191,008 12,109,622 Net interest rate spread 3.14% 2.30% Net interest margin 3.26% 2.57%
The release of Kibana 4.x has had an impact on monitoring and other related activities. In this post we’re going to get specific and show you how to add Node.js monitoring to the Kibana 4 server app. Why Node.js? Because Kibana 4 now comes with a little Node.js server app that sits between the Kibana UI and the […]
May. 28, 2015 10:00 PM EDT Reads: 1,139
Virtualization is everywhere. Enormous and highly profitable companies have been built on nothing but virtualization. And nowhere has virtualization made more of an impact than in Cloud Computing, the rampant and unprecedented adoption of which has been the direct result of the wide availability of virtualization software and techniques that enabled it. But does the cloud actually require virtualization?
May. 28, 2015 09:00 PM EDT Reads: 2,337
There’s a lot of discussion around managing outages in production via the likes of DevOps principles and the corresponding software development lifecycles that does enable higher quality output from development, however, one cannot lay all blame for “bugs” and failures at the feet of those responsible for coding and development. As developers incorporate features and benefits of these paradigm shift, there is a learning curve and a point of not-knowing-what-is-not-known. Sometimes, the only way ...
May. 28, 2015 09:00 PM EDT Reads: 1,936
Right off the bat, Newman advises that we should "think of microservices as a specific approach for SOA in the same way that XP or Scrum are specific approaches for Agile Software development". These analogies are very interesting because my expectation was that microservices is a pattern. So I might infer that microservices is a set of process techniques as opposed to an architectural approach. Yet in the book, Newman clearly includes some elements of concept model and architecture as well as p...
May. 28, 2015 07:00 PM EDT Reads: 3,961
I’ve been thinking a bit about microservices (μServices) recently. My immediate reaction is to think: “Isn’t this just yet another new term for the same stuff, Web Services->SOA->APIs->Microservices?” Followed shortly by the thought, “well yes it is, but there are some important differences/distinguishing factors.” Microservices is an evolutionary paradigm born out of the need for simplicity (i.e., get away from the ESB) and alignment with agile (think DevOps) and scalable (think Containerizati...
May. 28, 2015 07:00 PM EDT Reads: 1,765
How can you compare one technology or tool to its competitors? Usually, there is no objective comparison available. So how do you know which is better? Eclipse or IntelliJ IDEA? Java EE or Spring? C# or Java? All you can usually find is a holy war and biased comparisons on vendor sites. But luckily, sometimes, you can find a fair comparison. How does this come to be? By having it co-authored by the stakeholders. The binary repository comparison matrix is one of those rare resources. It is edite...
May. 28, 2015 05:00 PM EDT Reads: 2,136
As the world moves from DevOps to NoOps, application deployment to the cloud ought to become a lot simpler. However, applications have been architected with a much tighter coupling than it needs to be which makes deployment in different environments and migration between them harder. The microservices architecture, which is the basis of many new age distributed systems such as OpenStack, Netflix and so on is at the heart of CloudFoundry – a complete developer-oriented Platform as a Service (PaaS...
May. 28, 2015 05:00 PM EDT Reads: 2,155
T-Mobile has been transforming the wireless industry with its “Uncarrier” initiatives. Today as T-Mobile’s IT organization works to transform itself in a like manner, technical foundations built over the last couple of years are now key to their drive for more Agile delivery practices. In his session at DevOps Summit, Martin Krienke, Sr Development Manager at T-Mobile, will discuss where they started their Continuous Delivery journey, where they are today, and where they are going in an effort ...
May. 28, 2015 04:45 PM EDT Reads: 2,352
There is no question that the cloud is where businesses want to host data. Until recently hypervisor virtualization was the most widely used method in cloud computing. Recently virtual containers have been gaining in popularity, and for good reason. In the debate between virtual machines and containers, the latter have been seen as the new kid on the block – and like other emerging technology have had some initial shortcomings. However, the container space has evolved drastically since coming on...
May. 28, 2015 03:30 PM EDT Reads: 2,256
The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential. The DevOps Summit at Cloud Expo – to be held June 3-5, 2015, at the Javits Center in New York City – will expand the DevOps community, enable a wide...
May. 28, 2015 03:00 PM EDT Reads: 2,870
Cloud Expo, Inc. has announced today that Andi Mann returns to DevOps Summit 2015 as Conference Chair. The 4th International DevOps Summit will take place on June 9-11, 2015, at the Javits Center in New York City. "DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great team at ...
May. 28, 2015 02:00 PM EDT Reads: 2,420
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
May. 28, 2015 01:30 PM EDT Reads: 1,221
Enterprises are fast realizing the importance of integrating SaaS/Cloud applications, API and on-premises data and processes, to unleash hidden value. This webinar explores how managers can use a Microservice-centric approach to aggressively tackle the unexpected new integration challenges posed by proliferation of cloud, mobile, social and big data projects. Industry analyst and SOA expert Jason Bloomberg will strip away the hype from microservices, and clearly identify their advantages and d...
May. 28, 2015 12:30 PM EDT Reads: 2,649
SYS-CON Events announced today that MetraTech, now part of Ericsson, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Ericsson is the driving force behind the Networked Society- a world leader in communications infrastructure, software and services. Some 40% of the world’s mobile traffic runs through networks Ericsson has supplied, serving more than 2.5 billion subscribers.
May. 28, 2015 12:00 PM EDT Reads: 2,361
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
May. 28, 2015 12:00 PM EDT Reads: 2,550
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York City, NY. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption...
May. 28, 2015 11:30 AM EDT Reads: 1,142
SYS-CON Events announced today that EnterpriseDB (EDB), the leading worldwide provider of enterprise-class Postgres products and database compatibility solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. EDB is the largest provider of Postgres software and services that provides enterprise-class performance and scalability and the open source freedom to divert budget from more costly traditiona...
May. 28, 2015 11:00 AM EDT Reads: 2,177
Do you think development teams really update those BMC Remedy tickets with all the changes contained in a release? They don't. Most of them just "check the box" and move on. They rose a Risk Level that won't raise questions from the Change Control managers and they work around the checks and balances. The alternative is to stop and wait for a department that still thinks releases are rare events. When a release happens every day there's just not enough time for people to attend CAB meeting...
May. 28, 2015 10:45 AM EDT Reads: 1,960
I read an insightful article this morning from Bernard Golden on DZone discussing the DevOps conundrum facing many enterprises today – is it better to build your own DevOps tools or go commercial? For Golden, the question arose from his observations at a number of DevOps Days events he has attended, where typically the audience is composed of startup professionals: “I have to say, though, that a typical feature of most presentations is a recitation of the various open source products and compo...
May. 28, 2015 10:00 AM EDT Reads: 1,378
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the...
May. 28, 2015 10:00 AM EDT Reads: 4,799