Profile: ESB Financial Corp (ESBF.OQ)
7 Mar 2014
ESB Financial Corporation is a thrift holding company that provides a range of retail and commercial financial products and services to customers in Western Pennsylvania through its wholly owned subsidiary bank, ESB Bank (the Bank). The Company is also the parent company of ESB Capital Trust II (the Trust II), ESB Statutory Trust III (the Trust III) and ESB Capital Trust IV (the Trust IV). The Bank operates two wholly owned subsidiaries: AMSCO, Inc., which engages in the management of certain real estate development partnerships on behalf of the Company and ESB Financial Services, Inc., which holds loans and other investments. The Bank is a financial intermediary whose principal business consists of attracting deposits from the general public and investing such deposits in real estate loans secured by liens on residential and commercial properties, consumer loans, commercial business loans, securities and interest-earning deposits. In addition, the Company utilizes borrowed funds, primarily advances from the Federal Home Loan Bank (FHLB) of Pittsburgh and repurchase agreements, to fund the Company’s investing activities.
As of December 31, 2011, the Company’s net loans receivable amounted to $648.9 million or 33% of the Company’s total assets. Loans secured by real estate amounted to $491.2 million or 73.3% of total loans receivable. Consumer loans and commercial business loans amounted to $128.8 million or 19.2% and $50.3 million or 7.5%, respectively, of the Company’s total loan portfolio. The Company’s lending activities are conducted through the Bank. The Company’s loan origination activities have involved the origination of single-family residential loans and multi-family residential mortgage loans, primarily secured by properties in the Company’s market area. The Company also offers construction loans, commercial real estate loans, commercial business loans and a range of consumer loans and indirect automobile loans. The Company originates loans secured by residential and commercial real estate, as well as consumer and commercial business loans in its lending area, which includes Western Pennsylvania. As of December 31, 2011, $5.2 million or 0.87% of the Company’s total loans receivable consisted of whole loans and participation interests in loans purchased from other financial institutions.
The Company’s residential non-construction real estate loans are originated under terms, conditions and documentation requirements, which permit their sale in the secondary market. As of December 31, 2010, $314.1 million or 47.8% of the total loan portfolio consisted of single-family residential mortgage loans. In addition to standard fixed rate mortgage loans, the Company offers adjustable rate mortgage loans (ARMs) with 30-year terms, on which the interest rate adjusts based upon changes in various indices, which reflect market rates of interest. The Company also offers three, five and seven-year ARM loan products with margins and caps similar to the one-year ARM product whose interest rates are fixed for the first three, five or seven years after the origination date and then reprice periodically based upon an appropriate index. The Company also grants loans to borrowers, including developers and construction contractors, for the construction of speculative homes and owner-occupied single-family dwellings in the Company’s market area.
The Company originates commercial real estate and multi-family residential mortgage loans and has in its portfolio both whole loans and participation interests. As of December 31, 2011, the Company had $115.8 million, or 17.2% of the total loan portfolio, invested in mortgages secured by commercial real estate and multi-family residential properties. The commercial real estate loans in the Company’s portfolio are secured by apartment buildings, office buildings, small retail shopping centers and other income-producing properties in the Company’s market area. As of December 31, 2011, the Company’s consumer loan portfolio totaled $128.8 million or 19.2% of its total loan portfolio. The Company offers a variety of consumer loans, including loans secured by deposit accounts,automobile loans, home equity loans, and secured and unsecured personal loans. As of December 31, 2011, $72.5 million or 56.3% of the Company’s consumer loan portfolio was made up of home equity loans. As of December 31, 2011, $47 million or 36.5% of the Company’s consumer loan portfolio was made up of indirect automobile and recreational vehicle loans. As of December 31, 2011, commercial business loans amounted to $50.3 million or 7.5% of the Company’s total loan portfolio. The Company services all loans it has originated for its portfolio. As of December 31, 2011, the Company had $10.2 million in loans serviced for third-party investors.
The Company’s investment activities involve investment in types of investment securities, including United States Treasury obligations and securities of various federal agencies, certificates of deposit at insured banks and savings institutions, commercial paper, corporate debt securities, tax-exempt obligations (including primarily municipal obligations of state and local governments), mutual funds and federal funds. The Company also maintains a portfolio of mortgage-backed securities, which are insured or guaranteed by Federal Home Loan Mortgage Corporation (FHLMC), the Federal National Mortgage Association (FNMA) and the Government National Mortgage Association (GNMA).
Sources of Funds
The Company’s sources of funds for its lending and investment activities are deposits, principal and interest payments on loans and mortgage-backed securities, interest on securities and interest-bearing deposits, advances from the Federal Home Loan Bank (FHLB) of Pittsburgh and repurchase agreement borrowings. The Company offers a range of deposit accounts with a range of interest rates and terms. The primary types of deposit accounts are regular savings, checking and money market accounts and certificate accounts. While deposits are the preferred source of funds for the Company’s lending and investment activities and general business purposes, the Company also borrows funds from the FHLB of Pittsburgh and through repurchase agreements with third parties. As of December 31, 2011, the Company had outstanding advances with the FHLB of $207.4 million.
ESB Financial Corp
600 Lawrence Avenue
ELLWOOD CITY PA 16117