Profile: ESSA Bancorp Inc (ESSA.OQ)
29 Aug 2014
ESSA Bancorp, Inc. is a stock holding company of ESSA Bank & Trust (the Bank). ESSA Bancorp, Inc. owns 100% of the outstanding shares of common stock of ESSA Bank & Trust. ESSA Bancorp, Inc. is engaged in the business of holding the common stock of ESSA Bank & Trust. As of September 30, 2010, ESSA Bancorp, Inc. had assets of $1.1 billion, deposits of $540.4 million and stockholders’ equity of $171.6 million. ESSA Bank & Trust’s business consists of accepting deposits from the general public and investing those deposits, together with funds generated from operations and borrowings; in residential first mortgage loans, including construction mortgage loans; commercial real estate loans; home equity loans and lines of credit; commercial and consumer loans. It offers a range of deposit accounts, including checking, savings and certificates of deposits. It also offers asset management and trust services. It offers investment services through its relationship with PRIMEVEST Financial Services, Inc., a third party broker/dealer and investment advisor. As of September 30, 2010, its 17 full-service banking offices consisted of 13 offices in Monroe County, two offices in Lehigh County, and two offices in Northampton County, Pennsylvania. Its primary market for deposits is concentrated around the areas where its full-service banking offices are located. In July 2012, it acquired First Star Bancorp, Inc. the parent company of First Star Bank. In January 2014, Essa Bancorp Inc, the holding company for ESSA Bank & Trust completed its acquisition of a branch facility and customer deposits and loans from First National Community Bank, the subsidiary of First National Community Bancorp, Inc. In April 2014, ESSA Bancorp Inc completed the acquisition of Franklin Security Bancorp, Inc and its wholly owned subsidiary, Franklin Security Bank.
The Bank’s lending activity has been the origination of first mortgage loans for the purchase, construction or refinancing of one- to four-family residential real property. As of September 30, 2010, these loans amounted at $78.1 million, or 10.6% of its total loan portfolio. As of September 30, 2010, one- to four-family residential real estate mortgage loans represented $596.2 million, or 80.8%, of its loan portfolio. As of September 30, 2010, home equity loans and lines of credit totaled $43.5 million, or 5.9% of its loan portfolio. As of September 30, 2010, commercial loans totaled $16.6 million, or 2.2% of its loan portfolio and construction first mortgage loans totaled $1.3 million, or 0.2% of the total loan portfolio. As of September 30, 2010, approximately $596.2 million, or 80.8% of its loan portfolio, consisted of one- to four-family residential loans.
In home equity loans and lines of credit the Bank’s properties include primary and vacation homes in northeastern Pennsylvania, with the majority of loans being originated in Monroe County. As of September 30, 2010, the maximum combined loan-to-value originated was70-80%, depending on the collateral and the holder of the first mortgage. As of September 30, 2010, $78.1 million, or 10.6% of its total loan portfolio consisted of commercial real estate loans. Commercial real estate loans are secured by office buildings, mixed-use properties and other commercial properties. As of September 30, 2010, it had 290 commercial real estate loans with an outstanding balance of $78.1 million. As of September 30, 2010, $1.3 million, or 0.2%, of its total loan portfolio consisted of first mortgage construction loans. Its first mortgage construction loans are for the construction of residential properties. It offers fixed and adjustable-rate residential first mortgage construction loans. First mortgage construction loans are structured for permanent mortgage financing once the construction is completed. The Bank offers a range of loans that are either unsecured or secured by property other than real estate. These loans include loans secured by deposits, personal loans and automobile loans. As of September 30, 2010, these other loans totaled $2.5 million, or 0.3% of the total loan portfolio.
The Bank invests in debt securities issued by the United States Government and the United States agencies, municipal bonds, and corporate debt obligations, as well as investments in the Federal Home Loan Bank Pittsburgh (FHLB) and, to other equity securities. Securities in these categories are classified as investment securities for financial reporting purposes. It invests in mortgage-backed securities issued or sponsored by Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and Government National Mortgage Association (GNMA). As of September 30, 2010, its mortgage-backed securities portfolio had a fair value of $187.3 million, consisting of Freddie Mac, Fannie Mae and GNMA mortgage-backed securities. Its investment securities portfolio contains unrealized losses on securities, including mortgage-related instruments issued or backed by the full faith and credit of the United States government.
Sources of Funds
Deposits, borrowings, repayments and prepayments of loans and securities, proceeds from maturing securities and cash flows from operations are the sources of the Bank’s funds for use in lending, investing and for other general purposes. It offers a range of deposit accounts with a range of interest rates and terms. Its deposit accounts consist of savings accounts, negotiable order of withdrawal (NOW) accounts, checking accounts, money market accounts, club accounts, certificates of deposit and IRAs and other qualified plan accounts. It provides commercial checking accounts for businesses. As of September 30, 2010, its deposits totaled $540.4 million. As of September 30, 2010, interest-bearing NOW, savings and club and money market deposits totaled $248.9 million. As of September 30, 2010, it had a total of $261.1 million in certificates of deposit and non-interest-bearing demand deposits totaled $30.4 million. As of September 30, 2010, it had a total of $70.6 million of brokered certificates of deposits. Its brokered certificates of deposits range from one- to six-year terms, and are purchased only through pre-approved brokers. Its short-term borrowings consist of Federal Home Loan Bank and Federal Reserve Bank advances.
ESSA Bank & Trust has two wholly owned subsidiaries, ESSACOR, Inc. and Pocono Investment Company. As of September 30, 2010, ESSACOR, Inc. is inactive. Pocono Investment Company is an investment company subsidiary to hold and manage certain investments of ESSA Bank & Trust.
ESSA Bancorp Inc
200 Palmer Street, Monroe
P.O. Box L
STROUDSBURG PA 18360