8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 29, 2015

ESSA Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

Pennsylvania	001-33384	20-8023072
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)
200 Palmer Street, Stroudsburg, Pennsylvania		18360
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (570) 421-0531

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operation and Financial Condition.

On July 29, 2015, ESSA Bancorp, Inc. (the “Company”) issued a press release reporting its financial results for the period ended June 30, 2015.

A copy of the press release announcing the results is attached as Exhibit 99.1. The information in the preceding Item, as well as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Businesses Acquired. Not applicable.

(b) Pro Forma Financial Information. Not applicable.

(c) Shell Company Transactions. Not applicable.

(d) Exhibits.

Exhibit No.	Description
99.1	Press release issued by the Company on July 29, 2015 announcing its financial results for the period ended June 30, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	ESSA BANCORP, INC.
DATE: July 30, 2015	By:	/s/ Gary S. Olson
		Gary S. Olson, President and
		Chief Executive Officer

EX-99.1

Exhibit 99.1

Date:	July 29, 2015
Contact:	Gary S. Olson, President & CEO
Corporate Office:	200 Palmer Street
	Stroudsburg, Pennsylvania 18360
Telephone:	(570) 421-0531

ESSA BANCORP, INC. ANNOUNCES FISCAL THIRD QUARTER FINANCIAL RESULTS

Stroudsburg, Pennsylvania, July 29, 2015 — ESSA Bancorp, Inc. (the “Company”) (NASDAQ Global Market^SM: ESSA) today reported net income of $2.5 million, or $0.23 per diluted share, for the quarter ended June 30, 2015, compared with net income of $2.6 million, or $0.24 per diluted share, for the same quarter, last year. Net income for the first nine months of fiscal 2015 increased to $7.5 million, or $0.71 per diluted share, compared with net income of $6.1 million, or $0.56 per diluted share, for the nine months of fiscal 2014. Year-over-year comparisons reflect the acquisition of Franklin Security Bancorp in April 2014.

The Company is the holding company for ESSA Bank & Trust, a $1.6 billion asset institution, which provides full service retail and commercial banking, financial, and investment services from 26 locations in eastern Pennsylvania.

THIRD QUARTER HIGHLIGHTS

• Disciplined loan growth. Total loans increased 1.3% (not annualized) on a sequential quarter basis, and 3.2% (not annualized) during the nine months ended June 30, 2015. Loan growth was driven primarily by increases in commercial and indirect auto loans.

• Net interest income remained steady. Net interest income was approximately $11.0 million for the second consecutive quarter despite continued net interest margin compression. The net interest margin was 2.96% for the quarter ending June 30, 2015, compared with 3.03% for the quarter ended March 31, 2015 and 3.09% for the quarter ending June 30, 2014.

• Asset quality improved. Non-performing assets declined to $23.4 million, or 1.46% of total assets, as of June 30, 2015 from $24.7 million, or 1.56% of total assets as of March 31, 2015.

• Capital management. A quarterly cash dividend of $0.09 per share was paid on June 30, 2015. During the June 2015 quarter, the Company repurchased 36,900 shares at an average price of $12.85. Tangible book value per share increased to $13.94 at June 30, 2015, from $13.34 at September 30, 2014.

• Previously announced acquisition. Subsequent to the third fiscal quarter, the Company announced a definitive agreement on July 29, 2015 to purchase Eagle National Bancorp (“ENB”) in an all-cash transaction. ENB had total assets of $175.7 million, total loans of $125.1 million, and total deposits of $148.7 million as of June 30, 2015.

Gary S. Olson, President and CEO, commented: “Our third quarter results reflect our ability to deliver consistent results despite the earnings challenges presented by continued low interest rates. As we expand into faster-growing markets, we remain focused on loan growth, asset quality, and controlled operating expenses while our efforts to build commercial relationships continue to gain traction.”

Corporate Center: 200 Palmer Street PO Box L Stroudsburg, PA 18360-0160 570-421-0531 Fax: 570-421-7158

As noted when our merger with Eagle National Bancorp was first announced, “We are excited to have this opportunity to expand our market share and establish a commercial presence in an attractive suburban Philadelphia market.”

Income Statement Review

Net interest income decreased $86,000, or 0.8%, to $11.0 million for the three months ended June 30, 2015, from $11.1 million for the comparable period in 2014. Net interest income increased $3.5 million, or 12.0%, to $33.1 million for the nine months ended June 30, 2015, from $29.5 million for the comparable period in 2014, reflecting increases in the Company’s loan portfolio.

Interest expense decreased $171,000 for the nine months ended June 30, 2015 compared to the comparable period in 2014, while interest income increased $3.4 million on growing loan volume. Increases in interest income from indirect auto loans, commercial loans and investment securities helped offset a decrease in interest income from mortgage loans.

The Company’s net interest rate spread was 2.90% for the three months ended June 30, 2015, down from 3.02% for the comparable 2014 period. The Company’s net interest rate spread rose to 2.93% for the nine months ended June 30, 2015 compared to 2.91% for the nine months ended June 30, 2014. Net interest margin was unchanged at 2.99% for the nine months ended June 30, 2015 and 2014.

The Company’s provision for loan losses increased to $525,000 for the three months ended June 30, 2015, compared with $500,000 for the three months ended June 30, 2014. The Company’s provision for loan losses decreased to $1.5 million for the nine months ended June 30, 2015, compared with $2.0 million for the nine months ended June 30, 2014. Net loan charge-offs in fiscal third quarter 2015 were $425,000 compared to $326,000 in fiscal third quarter 2014. Net loan charge-offs for the nine months ended June 30, 2015 were $1.4 million compared to $1.2 million in the 2014 period.

Noninterest income decreased 7.2% to $1.9 million for the three months ended June 30, 2015, compared with $2.1 million for the three months ended June 30, 2014 due principally to declines in trust and investment fees, gain on acquisition, and other income which were partially offset by an increase in gain on sale of investments, net. Noninterest income increased 3.4% to $5.7 million for the nine months ended June 30, 2015, compared with the nine months ended June 30, 2014. The increase was due primarily to increases in service fees and charges related to loans and gain on sale of investments offset in part by a decline in gain on acquisition.

Noninterest expense was $9.4 million for the three months ended June 30, 2015 compared with $9.1 million for the comparable period in 2014. Noninterest expense was $27.4 million for the nine months ended June 30, 2015 compared with $24.7 million for the comparable period in 2014. Increases in expenses primarily reflect additional facilities and costs related to the Franklin Security Bank acquisition.

Balance Sheet, Asset Quality and Capital Adequacy

Total assets were $1.60 billion at June 30, 2015 compared with $1.57 billion at September 30, 2014. Total loans receivable, net of allowance for loan losses, were $1.09 billion at June 30, 2015 compared to $1.06 billion at September 30, 2014.

Total deposits decreased $58.3 million, or 5.1%, to $1.08 billion at June 30, 2015, from $1.13 billion at September 30, 2014. Decreases in interest bearing demand deposits, money market and certificate of deposit accounts were partially offset by increases in non-interest bearing demand and savings and club accounts. During the same period, borrowings increased $70.3 million, reflecting the Company’s ability to obtain borrowed funds at what management believes represent attractive rates.

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Nonperforming assets totaled $23.4 million, or 1.46%, of total assets at June 30, 2015, compared with $25.0 million, or 1.59%, of total assets at September 30, 2014, and $26.2 million, or 1.68% of total assets a year earlier. The decrease in nonperforming assets of $1.6 million at June 30, 2015 compared to September 30, 2014 was due primarily to decreases in non-performing commercial mortgages and foreclosed real estate.

The Company’s provision for loan losses was $525,000 for the three-month period ended June 30, 2015, compared with a provision of $500,000 for the comparable period in 2014, primarily reflecting continued disciplined credit and underwriting standards. The allowance for loan losses was $8.8 million, or 0.80%, of loans outstanding at June 30, 2015, compared to $8.6 million, or 0.81%, of loans outstanding at September 30, 2014.

The Bank continued to demonstrate financial strength, with a tier 1 leverage ratio of 10.02%, exceeding accepted regulatory standards for a well-capitalized institution. The Company maintained a tangible equity to total assets ratio of 9.85%.

Stockholders’ equity increased $4.0 million to $171.3 million at June 30, 2015, from $167.3 million at September 30, 2014. During the three months ended June 30, 2015, the Company repurchased 36,900 shares at an average cost of $12.85 per share. Tangible book value per share at June 30, 2015 increased to $13.94 compared with $13.34 at September 30, 2014.

For the fiscal third quarter of 2015, the Company’s return on average assets and return on average equity were 0.62% and 5.67%, compared with 0.68% and 6.17%,respectively, in the corresponding period of fiscal 2014.

ESSA Bank & Trust, a wholly-owned subsidiary of ESSA Bancorp, Inc., has total assets of $1.60 billion and is the leading service-oriented financial institution headquartered in Stroudsburg, Pennsylvania. ESSA Bank & Trust maintains its corporate headquarters in Stroudsburg, Pennsylvania and has 26 community offices throughout the Greater Pocono, Lehigh Valley, and Scranton/Wilkes-Barre areas in Pennsylvania. In addition to being one of the region’s largest mortgage lenders, ESSA Bank & Trust offers a full range of consumer and commercial banking products and services, employee benefit solutions, Trust & Asset management, and brokerage services. ESSA Bancorp, Inc. stock trades on The NASDAQ Global Select Market (SM) under the symbol “ESSA”.

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.

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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

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ESSA BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

	June 30, 2015			September 30, 2014
	(dollars in thousands)
ASSETS
Cash and due from banks	$	16,017		$	20,884
Interest-bearing deposits with other institutions		1,675			1,417
Total cash and cash equivalents		17,692			22,301
Certificates of deposit		1,750			1,767
Investment securities available for sale		381,375			383,078
Loans receivable (net of allowance for loan losses of $8,767 and $8,634)		1,092,527			1,058,267
Regulatory stock, at cost		14,537			14,284
Premises and equipment, net		16,655			16,957
Bank-owned life insurance		30,421			29,720
Foreclosed real estate		2,595			2,759
Intangible assets, net		1,910			2,396
Goodwill		10,259			10,259
Deferred income taxes		11,045			12,027
Other assets		18,058			21,000
TOTAL ASSETS	$	1,598,824		$	1,574,815
LIABILITIES
Deposits	$	1,075,553		$	1,133,889
Short-term borrowings		120,856			108,020
Other borrowings		208,805			151,300
Advances by borrowers for taxes and insurance		11,617			4,093
Other liabilities		10,666			10,204
TOTAL LIABILITIES		1,427,497			1,407,506
STOCKHOLDERS’ EQUITY
Common stock		181			181
Additional paid in capital		182,358			182,486
Unallocated common stock held by the Employee Stock Ownership Plan		(9,740	)		(10,079	)
Retained earnings		82,289			77,413
Treasury stock, at cost		(82,105	)		(80,113	)
Accumulated other comprehensive loss		(1,656	)		(2,579	)
TOTAL STOCKHOLDERS’ EQUITY		171,327			167,309
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,598,824		$	1,574,815

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ESSA BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

	For the Three Months Ended June 30					For the Nine Months Ended June 30
	2015		2014			2015			2014
	(dollars in thousands)
INTEREST INCOME
Loans receivable	$	11,398	$	11,807		$	33,947		$	32,173
Investment securities:
Taxable		1,741		1,632			5,429			4,682
Exempt from federal income tax		248		173			721			318
Other investment income		181		173			759			317
Total interest income		13,568		13,785			40,856			37,490
INTEREST EXPENSE
Deposits		1,800		2,015			5,643			5,909
Short-term borrowings		118		54			324			104
Other borrowings		639		619			1,826			1,951
Total interest expense		2,557		2,688			7,793			7,964
NET INTEREST INCOME		11,011		11,097			33,063			29,526
Provision for loan losses		525		500			1,500			2,000
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		10,486		10,597			31,563			27,526
NONINTEREST INCOME
Service fees on deposit accounts		842		828			2,426			2,342
Services charges and fees on loans		274		283			863			572
Trust and investment fees		218		260			660			701
Gain (loss) on sale of investments, net		194		(10	)		398			226
Earnings on Bank-owned life insurance		231		234			701			687
Insurance commissions		183		205			582			625
Gain on acquisition		—		241			—			241
Other		6		59			33			85
Total noninterest income		1,948		2,100			5,663			5,479
NONINTEREST EXPENSE
Compensation and employee benefits		5,213		4,912			15,559			13,577
Occupancy and equipment		996		1,051			3,111			3,034
Professional fees		517		441			1,438			1,348
Data processing		861		977			2,566			2,426
Advertising		373		243			725			463
Federal Deposit Insurance Corporation Premiums		269		266			850			730
Loss (Gain) on foreclosed real estate		8		(65	)		(167	)		(116	)
Merger related costs		—		176			—			522
Amortization of intangible assets		156		282			485			756
Other		966		812			2,856			1,987
Total noninterest expense		9,359		9,095			27,423			24,727
Income before income taxes		3,075		3,602			9,803			8,278
Income taxes		618		976			2,318			2,146
Net Income	$	2,457	$	2,626		$	7,485		$	6,132

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	For the Three Months Ended June 30				For the Nine Months Ended June 30
	2015		2014		2015		2014
Earnings per share:
Basic	$	0.24	$	0.24	$	0.72	$	0.56
Diluted	$	0.23	$	0.24	$	0.71	$	0.56

	For the Three Month Ended June 30,						For the Nine Month Ended June 30,
	2015			2014			2015			2014
	(dollars in thousands)						(dollars in thousands)
CONSOLIDATED AVERAGE BALANCES:
Total assets	$	1,587,965		$	1,546,622		$	1,576,752		$	1,421,091
Total interest-earning assets		1,489,831			1,442,235			1,476,752			1,321,142
Total interest-bearing liabilities		1,292,034			1,290,266			1,302,249			1,173,645
Total stockholders’ equity		173,678			170,265			171,905			168,977
PER COMMON SHARE DATA:
Average shares outstanding - basic		10,431,461			10,837,592			10,464,084			10,864,362
Average shares outstanding - diluted		10,565,123			10,837,592			10,533,704			10,864,362
Book value shares		11,419,321			11,823,878			11,419,321			11,823,878
Net interest rate spread		2.90	%		3.02	%		2.93	%		2.91	%
Net interest margin		2.96	%		3.09	%		2.99	%		2.99	%

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