ESSA Bancorp, Inc. Announces Fiscal 2021 Fourth Quarter, Twelve Months Ended September 30, 2021 Financial Results
ESSA Bancorp, Inc. (NASDAQ:ESSA) reported a net income of $3.9 million, or $0.40 per diluted share, for Q4 2021, a 5.3% increase from Q4 2020. For the fiscal year, net income rose 13.9% to $16.4 million, or $1.65 per diluted share. The bank improved its net interest income after loan loss provisions to $13.5 million in Q4, up from $11.3 million the previous year, aided by lower interest expenses. Total deposits increased to $1.64 billion, and total stockholders' equity grew to $201.8 million. The company maintained a strong allowance for loan losses at 1.33% of total loans.
- Net income increased 13.9% to $16.4 million for fiscal year 2021.
- Earnings per share rose 5.3% in Q4, reaching $0.40.
- Net interest income after provision for loan losses increased to $13.5 million in Q4 2021.
- Total deposits grew 6% to $1.64 billion.
- Total stockholders' equity increased by $10.4 million to $201.8 million.
- Total net loans decreased to $1.34 billion from $1.42 billion year-over-year.
- Interest income declined to $58.7 million for the twelve months ended September 30, 2021.
- Noninterest income decreased to $11.5 million for fiscal 2021.
STROUDSBURG, PA / ACCESSWIRE / October 27, 2021 / ESSA Bancorp, Inc. (the "Company") (NASDAQ:ESSA), the holding company for ESSA Bank & Trust (the "Bank"), a
Net income was
Gary S. Olson, President and CEO, commented: "Earnings growth, strong and improving asset quality, and increased shareholder value highlighted the Company's annual and fourth quarter financial performance. Our earnings per share for the fourth quarter increased
"Conditions during the past year have challenged us to enhance our digital customer communication and service capabilities while maintaining the personalized community bank service that has long characterized ESSA. We believe our fiscal 2021 financial performance reflects success in providing superior service and operational strength."
"Improving asset quality has enabled the Company to reduce its provision for loan losses compared to the prior year. Levels of loans in forbearance due to the Pandemic declined significantly at September 30, 2021 compared with a year earlier."
"Our participation in the Paycheck Protection Program (PPP) played a critical role in helping hundreds of businesses. While the execution and administration of the program required considerable time and energy, we used the opportunity to enhance relationships with commercial clients. We have had the opportunity to prove the value of ESSA's electronic cash management services and full-service banking capabilities to help customers effectively manage their finances and maintain their financial health."
"As PPP winds down and economic and public health recovery continues throughout our served communities, we are working with customers to prepare for more normalized operating conditions and growth opportunities. We have a robust commercial loan pipeline. Commercial real estate and construction lending, which has been active throughout the pandemic period, continues to demonstrate strength. Strong residential mortgage loan originations reflected active homebuying in our served markets."
"The signs of economic and health recovery throughout our region are encouraging. We remain prudent and vigilant as the nation continues transitioning to more normalized conditions. We are maintaining a strong allowance for loan losses to account for remaining risks and uncertainties, although to-date, strong asset quality has characterized the loan portfolio."
"We have entered our new fiscal year with confidence that the Company is positioned for growth, prepared to respond to challenges, and will continue to build value for customers and shareholders."
FISCAL FOURTH QUARTER, TWELVE MONTHS 2021 HIGHLIGHTS
- Net interest income after provision for loan losses increased to
$13.5 million in the quarter ended September 30, 2021, compared with$11.3 million in the same period of 2020, primarily reflecting stable interest income from loans, the positive impact of sharply reduced interest expense and a lower provision for loan losses. For the twelve months ended September 30, 2021, net interest income after provision for loan losses rose to$50.2 million from$44.9 million in the comparable period of 2020. - Quarterly interest expense declined to
$910,000 from$2.9 million a year earlier, reflecting repriced deposits in a low interest rate environment, reduced higher-cost borrowings, and active balance sheet management. The Company's cost of interest-bearing liabilities declined to0.27% in the fiscal fourth quarter of 2021 from0.77% a year earlier. For the year ended September 30, 2021, interest expense declined to$5.8 million from$15.9 million a year earlier. - The net interest margin improved to
3.14% in the fourth quarter of 2021 compared with2.64% a year earlier, and the net interest rate spread increased to3.08% compared with2.48% a year earlier. For the twelve months of 2021, the net interest margin was2.96% compared with2.68% for the comparable period of fiscal 2020, and the net interest rate spread increased to2.86% compared with2.49% for the twelve months of fiscal 2020. Excluding PPP loans and fees, the net interest margin and spread for the fourth quarter of 2021 were3.02% and2.97% , respectively. For the 2021 fiscal year, the net interest margin and spread, excluding PPP loans and fees were2.89% and2.81% respectively. - Total net loans at September 30, 2021 were
$1.34 billion compared with$1.42 billion at September 30, 2020, primarily reflecting commercial real estate growth offset by sales of$67.5 million of residential mortgage loans during the fiscal year,$54.1 million in forgiveness of PPP loans and$25.9 million of continuing run-off of indirect auto loans being phased out. - Lending activity was highlighted by
16.0% growth in commercial real estate loans to$591.1 million at September 30, 2021 from$509.6 million at September 30, 2020. - Asset quality remained strong, with a ratio of nonperforming assets to total assets of
0.88% at September 30, 2021. Acknowledging continuing economic risks and uncertainties related to COVID-19 and the Delta variant, the Company maintained strong reserves. The allowance for loan losses to total loans was1.33% and the allowance for loan losses to nonperforming loans was113.84% . - Total deposits increased to
$1.64 billion at September 30, 2021 from$1.54 billion at September 30, 2020, reflecting growth in lower-cost core deposits (demand, savings and money market accounts), which comprised87.2% of total deposits at September 30, 2021. The increase reflected increases in commercial deposits, including PPP and stimulus funds not deployed, and retail demand deposits. - The Bank continued to demonstrate financial strength with a Tier 1 leverage ratio of
10.05% at September 30, 2021, exceeding regulatory standards for a well-capitalized institution. - Total stockholders' equity increased to
$201.8 million at September 30, 2021 compared with$191.4 million at September 30, 2020 and tangible book value per share at September 30, 2021 increased to$17.92 , or10.2% compared to$16.26 at September 30, 2020. In fiscal 2021, total dividends per share increased to$0.47 from$0.44 a year earlier
Fiscal Fourth Quarter, Twelve Months 2021 Income Statement Review
Total interest income was
Total interest income was
Interest expense was
For the twelve months of 2021, interest expense declined to
Net interest income for the three months ended September 30, 2021 was
For the twelve months of 2021, net interest income was
Net interest income after provision for loan losses in the three months of fiscal 2021 reflected a lower provision for loan losses, primarily due to improving credit quality and a net charge-off/(recovery) of (
Noninterest income was
Noninterest income was
Noninterest expense was
In fiscal 2021, noninterest expense was
Balance Sheet, Asset Quality and Capital Adequacy Review
Total assets were
Total net loans were
Commercial real estate loans were
Loans remaining in forbearance at September 30, 2021 included
Total deposits were
Nonperforming assets were
For the three months ended September 30, 2021, the Company's return on average assets and return on average equity were
The Bank continued to demonstrate financial strength with a Tier 1 leverage ratio of
Total stockholders' equity increased
About the Company: ESSA Bancorp, Inc. is the holding company for its wholly owned subsidiary, ESSA Bank & Trust, which was formed in 1916. Headquartered in Stroudsburg, Pennsylvania, the Company has total assets of
Forward-Looking Statements
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, and the Risk Factors disclosed in our annual and quarterly reports. In addition, the COVID-19 pandemic continues to have an adverse impact on the Company, its customers and the communities it serves. The adverse effect of the COVID-19 pandemic on the Company, its customers and the communities where it operates will continue to adversely affect the Company's business, results of operations and financial condition for an indefinite period of time.
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 FOLOW
| ESSA BANCORP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET (UNAUDITED) | |||||||||
| September 30, | September 30, | ||||||||
| 2021 | 2020 | ||||||||
| (dollars in thousands) | |||||||||
ASSETS | |||||||||
Cash and due from banks | $ | 146,841 | $ | 101,447 | |||||
Interest-bearing deposits with other institutions | 12,105 | 54,470 | |||||||
Total cash and cash equivalents | 158,946 | 155,917 | |||||||
Investment securities available for sale, at fair value | 240,581 | 212,484 | |||||||
Investment securities held to maturity, at amortized cost | 21,483 | - | |||||||
Loans receivable (net of allowance for loan losses | |||||||||
of | 1,340,853 | 1,417,974 | |||||||
Loans, held for sale | 381 | 208 | |||||||
Regulatory stock, at cost | 4,651 | 7,344 | |||||||
Premises and equipment, net | 13,605 | 14,230 | |||||||
Bank-owned life insurance | 37,481 | 40,546 | |||||||
Foreclosed real estate | 461 | 269 | |||||||
Intangible assets, net | 520 | 791 | |||||||
Goodwill | 13,801 | 13,801 | |||||||
Deferred income taxes | 4,613 | 5,993 | |||||||
Other assets | 24,060 | 23,958 | |||||||
TOTAL ASSETS | $ | 1,861,436 | $ | 1,893,515 | |||||
LIABILITIES | |||||||||
Deposits | $ | 1,636,115 | $ | 1,543,696 | |||||
Short-term borrowings | - | 111,713 | |||||||
Other borrowings | - | 14,164 | |||||||
Advances by borrowers for taxes and insurance | 4,949 | 7,858 | |||||||
Other liabilities | 18,550 | 24,687 | |||||||
TOTAL LIABILITIES | 1,659,614 | 1,702,118 | |||||||
STOCKHOLDERS' EQUITY | |||||||||
Common stock | 181 | 181 | |||||||
Additional paid-in capital | 181,659 | 181,487 | |||||||
Unallocated common stock held by the | |||||||||
Employee Stock Ownership Plan ("ESOP") | (6,915 | ) | (7,350 | ) | |||||
Retained earnings | 124,342 | 112,612 | |||||||
Treasury stock, at cost | (98,127 | ) | (91,477 | ) | |||||
Accumulated other comprehensive income (loss) | 682 | (4,056 | ) | ||||||
TOTAL STOCKHOLDERS' EQUITY | 201,822 | 191,397 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,861,436 | $ | 1,893,515 | |||||
| ESSA BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) | |||||||||||||||
| Three months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
INTEREST INCOME | |||||||||||||||
Loans receivable, including fees | $ | 13,651 | $ | 13,710 | $ | 54,459 | $ | 55,668 | |||||||
Investment securities: | |||||||||||||||
Taxable | 911 | 1,411 | 3,684 | 7,081 | |||||||||||
Exempt from federal income tax | 35 | 40 | 156 | 181 | |||||||||||
Other investment income | 112 | 201 | 388 | 1,142 | |||||||||||
Total interest income | 14,709 | 15,362 | 58,687 | 64,072 | |||||||||||
INTEREST EXPENSE | |||||||||||||||
Deposits | 910 | 1,756 | 5,522 | 10,528 | |||||||||||
Short-term borrowings | - | 672 | 209 | 2,254 | |||||||||||
Other borrowings | - | 485 | 62 | 3,083 | |||||||||||
Total interest expense | 910 | 2,913 | 5,793 | 15,865 | |||||||||||
NET INTEREST INCOME | 13,799 | 12,449 | 52,894 | 48,207 | |||||||||||
Provision for loan losses | 300 | 1,100 | 2,700 | 3,275 | |||||||||||
NET INTEREST INCOME AFTER PROVISION | |||||||||||||||
FOR LOAN LOSSES | 13,499 | 11,349 | 50,194 | 44,932 | |||||||||||
NONINTEREST INCOME | |||||||||||||||
Service fees on deposit accounts | 783 | 758 | 3,088 | 2,921 | |||||||||||
Services charges and fees on loans | 498 | 404 | 1,865 | 1,389 | |||||||||||
Loan swap fees | 30 | 94 | 652 | 1,294 | |||||||||||
Unrealized gains (losses) on equity securities | - | (5 | ) | 15 | (8 | ) | |||||||||
Trust and investment fees | 456 | 335 | 1,530 | 1,380 | |||||||||||
Gain on sale of investments, net | 1 | 2,546 | 460 | 2,927 | |||||||||||
Gain on sale of loans, net | 437 | 676 | 2,174 | 1,467 | |||||||||||
Earnings on bank-owned life insurance | 129 | 235 | 854 | 944 | |||||||||||
Insurance commissions | 151 | 188 | 643 | 829 | |||||||||||
Other | 65 | 10 | 212 | 112 | |||||||||||
Total noninterest income | 2,550 | 5,241 | 11,493 | 13,255 | |||||||||||
NONINTEREST EXPENSE | |||||||||||||||
Compensation and employee benefits | 6,820 | 5,909 | 25,903 | 23,938 | |||||||||||
Occupancy and equipment | 1,155 | 1,106 | 4,412 | 4,275 | |||||||||||
Professional fees | 544 | 477 | 2,127 | 1,926 | |||||||||||
Data processing | 1,046 | 958 | 4,436 | 4,173 | |||||||||||
Advertising | 165 | 133 | 636 | 481 | |||||||||||
Federal Deposit Insurance Corporation ("FDIC") | |||||||||||||||
premiums | 250 | 228 | 1,084 | 720 | |||||||||||
(Gain) loss on foreclosed real estate | (53 | ) | (130 | ) | (692 | ) | (69 | ) | |||||||
Amortization of intangible assets | 67 | 68 | 271 | 276 | |||||||||||
Prepayment penalty on FHLB Advances | - | 2,504 | 254 | 2,504 | |||||||||||
Other | 1,165 | 618 | 3,359 | 2,364 | |||||||||||
Total noninterest expense | 11,159 | 11,871 | 41,790 | 40,588 | |||||||||||
Income before income taxes | 4,890 | 4,719 | 19,897 | 17,599 | |||||||||||
Income taxes | 967 | 897 | 3,473 | 3,183 | |||||||||||
NET INCOME | $ | 3,923 | $ | 3,822 | $ | 16,424 | $ | 14,416 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.40 | $ | 0.38 | $ | 1.65 | $ | 1.39 | |||||||
Diluted | $ | 0.40 | $ | 0.38 | $ | 1.65 | $ | 1.39 | |||||||
Dividends per share | $ | 0.12 | $ | 0.11 | $ | 0.47 | $ | 0.44 | |||||||
| For the Three Months | For the Twelve Months | |||||||||||||||
| Ended September 30, | Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||
CONSOLIDATED AVERAGE BALANCES: | ||||||||||||||||
Total assets | $ | 1,831,798 | $ | 1,969,616 | $ | 1,885,708 | $ | 1,897,667 | ||||||||
Total interest-earning assets | 1,743,440 | 1,873,972 | 1,788,361 | 1,797,198 | ||||||||||||
Total interest-bearing liabilities | 1,328,624 | 1,493,389 | 1,392,587 | 1,466,640 | ||||||||||||
Total stockholders' equity | 200,893 | 195,290 | 198,275 | 194,103 | ||||||||||||
PER COMMON SHARE DATA: | ||||||||||||||||
Average shares outstanding - basic | 9,737,685 | 10,159,246 | 9,945,528 | 10,347,483 | ||||||||||||
Average shares outstanding - diluted | 9,738,696 | 10,159,246 | 9,947,504 | 10,347,483 | ||||||||||||
Book value shares | 10,461,443 | 10,876,869 | 10,461,443 | 10,876,869 | ||||||||||||
Net interest rate spread: | ||||||||||||||||
Net interest margin: | ||||||||||||||||
Contact: Gary S. Olson, President & CEO
Corporate Office: 200 Palmer Street
Stroudsburg, Pennsylvania 18360
Telephone: (570) 421-0531
SOURCE: ESSA Bancorp Inc.
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