ESSA Bancorp Inc. (ESSA, Financial) filed Annual Report for the period ended 2012-09-30.
Essa Bancorp Inc has a market cap of $120.7 million; its shares were traded at around $10.15 with a P/E ratio of 26.4 and P/S ratio of 3.2. The dividend yield of Essa Bancorp Inc stocks is 2%.
Interest Income. Interest income decreased $2.1 million or 4.2% to $47.2 million for fiscal year 2011 from $49.3 million for fiscal year 2010. The decrease resulted from a 37 basis point decrease in the overall yield on interest earning assets to 4.54% for fiscal year 2011 from 4.91% for fiscal year 2010 which decreased interest income by $4.7 million. This decrease was partially offset by a $35.4 million increase in average interest earning assets which had the effect of increasing interest income by $2.6 million. The average balance of loans during 2011 increased $12.2 million over the average balance during 2010, along with decreases in the average balance of investment securities of $2.0 million and increases in mortgage-backed securities of $24.6 million. In addition, average FHLB stock decreased $2.1 million and the average balance of other interest earning assets increased $2.7 million. The primary reason for the increase in mortgage backed securities was the investment of deposit and loan proceeds in excess of those needed to fund loan growth. As a member of the FHLB system, the Bank maintains an investment in the capital stock of the FHLB in an amount not less than 45 basis points of the outstanding FHLB member asset value plus 4.6% of its outstanding FHLB borrowings, as calculated throughout the year. On December 23, 2008, the FHLB notified its members, including the Company, that it was suspending the payment of dividends on its capital stock and the repurchase of excess capital stock until further notice. The FHLB began repurchasing capital stock in February 2011. The increase in average other interest earning assets was the result of an increase in the average balance of interest earning deposits held by the Company in its FHLB demand account of $2.7 million. The average yield on loans decreased to 5.2% for the fiscal year 2011, from 5.51% for the fiscal year 2010. The average yields on investment securities decreased to 2.56% from 2.72% and the average yields on mortgage backed securities decreased to 3.36% from 3.97% for the 2011 and 2010 periods, respectively.
Provision for Loan Losses. The Company establishes provisions for loan losses, which are charged to earnings, at a level necessary to absorb known and inherent losses that are both probable and reasonably estimable at the date of the financial statements. 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 the borrowers 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 susceptible to significant revision as more information becomes available or as future events occur. After an evaluation of these factors, the Company made a provision of $2.1 million for fiscal year 2011 compared to a $2.2 million provision for the 2010 fiscal year. At September 30, 2011, the Company had 52 commercial loan relationships whose loans were judged by management to be impaired. Of these 52 relationships, five commercial real estate relationships with combined outstanding loans of $2.4 million had an allocation of the allowance for loan loss amounting to $466,000. Three commercial business relationships with combined loans of $265,000 had an allocation of the allowance for loan loss amounting to $101,000. These specific allowance allocations were also considered in the Companys evaluation for its provision for loan losses for the fiscal year ended September 30, 2011. The allowance for loan losses was $8.2 million or 1.09% of loans outstanding at September 30, 2011, compared to $7.4 million, or 1.01% of loans outstanding at September 30, 2010.
Non-Interest Income. Non-interest income decreased $383,000 or 5.7%, to $6.3 million for the year ended September 30, 2011, from $6.7 million for the comparable 2010 period. The decrease was primarily due to decreases in gain on sale of investments, net of $442,000 and gains on sales of loans net of $351,000 for fiscal 2011 compared to fiscal 2010. These decreases were offset, in part, by an increase in insurance commissions of $361,000.
As reported in the Consolidated Statements of Cash Flows, our cash flows are classified for financial reporting purposes as operating, investing or financing cash flows. Net cash provided by operating activities was $5.3 million, $10.2 million and $7.4 million for the years ended September 30, 2012, 2011 and 2010, respectively. These amounts differ from our net income because of a variety of cash receipts and disbursements that did not affect net income for the respective periods. Net cash provided by/(used) in investing activities was $75.4 million, $4.1 million and $(38.7) million in fiscal years 2012, 2011 and 2010, respectively, principally reflecting our loan and investment security activities in the respective periods along with our acquisition of First Star Bank in 2012. Investment security cash flows had the most significant effect, as net cash utilized in purchases amounted to $92.0 million, $96.8 million and $143.0 million in the years ended September 30, 2012, 2011 and 2010, respectively. Cash proceeds from principal repayments, maturities and sales of investment securities amounted to $117.5 million, $120.9 million and $112.0 million in the years ended September 30, 2012, 2011 and 2010, respectively. Deposit and borrowing cash flows have traditionally comprised most of our financing activities which resulted in net cash (used)/provided of $(106.9) million in fiscal year 2012, $16.5 million in fiscal year 2011 and $23.6 million in fiscal year 2010. In addition, during fiscal 2011 we used $16.9 million and in fiscal 2010 we used $17.0 million to repurchase our stock as part of previously disclosed stock repurchase plans.
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Essa Bancorp Inc has a market cap of $120.7 million; its shares were traded at around $10.15 with a P/E ratio of 26.4 and P/S ratio of 3.2. The dividend yield of Essa Bancorp Inc stocks is 2%.
Highlight of Business Operations:
Interest Income. Interest income decreased $2.0 million or 4.2% to $45.2 million for fiscal year 2012 from $47.2 million for fiscal year 2011. The decrease resulted from a 41 basis point decrease in the overall yield on interest earning assets to 4.13% for fiscal year 2012 from 4.54% for fiscal year 2011 which decreased interest income by $4.1 million. This decrease was partially offset by a $55.2 million increase in average interest earning assets which had the effect of increasing interest income by $2.1 million. The increase in average interest earning assets during 2012 compared to 2011 included increases in average loans of $34.7 million, average investments of $18.2 million and average other interest earning assets of $6.6 million. These increases were partially offset by decreases in average mortgage-backed securities of $2.2 million and regulatory stock of $2.1 million. The average yield on loans decreased to 4.90% for the fiscal year 2012, from 5.2% for the fiscal year 2011. The average yields on investment securities decreased to 2.13% from 2.56% and the average yields on mortgage backed securities decreased to 2.61% from 3.36% for the 2012 and 2011 periods, respectively.Interest Income. Interest income decreased $2.1 million or 4.2% to $47.2 million for fiscal year 2011 from $49.3 million for fiscal year 2010. The decrease resulted from a 37 basis point decrease in the overall yield on interest earning assets to 4.54% for fiscal year 2011 from 4.91% for fiscal year 2010 which decreased interest income by $4.7 million. This decrease was partially offset by a $35.4 million increase in average interest earning assets which had the effect of increasing interest income by $2.6 million. The average balance of loans during 2011 increased $12.2 million over the average balance during 2010, along with decreases in the average balance of investment securities of $2.0 million and increases in mortgage-backed securities of $24.6 million. In addition, average FHLB stock decreased $2.1 million and the average balance of other interest earning assets increased $2.7 million. The primary reason for the increase in mortgage backed securities was the investment of deposit and loan proceeds in excess of those needed to fund loan growth. As a member of the FHLB system, the Bank maintains an investment in the capital stock of the FHLB in an amount not less than 45 basis points of the outstanding FHLB member asset value plus 4.6% of its outstanding FHLB borrowings, as calculated throughout the year. On December 23, 2008, the FHLB notified its members, including the Company, that it was suspending the payment of dividends on its capital stock and the repurchase of excess capital stock until further notice. The FHLB began repurchasing capital stock in February 2011. The increase in average other interest earning assets was the result of an increase in the average balance of interest earning deposits held by the Company in its FHLB demand account of $2.7 million. The average yield on loans decreased to 5.2% for the fiscal year 2011, from 5.51% for the fiscal year 2010. The average yields on investment securities decreased to 2.56% from 2.72% and the average yields on mortgage backed securities decreased to 3.36% from 3.97% for the 2011 and 2010 periods, respectively.
Provision for Loan Losses. The Company establishes provisions for loan losses, which are charged to earnings, at a level necessary to absorb known and inherent losses that are both probable and reasonably estimable at the date of the financial statements. 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 the borrowers 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 susceptible to significant revision as more information becomes available or as future events occur. After an evaluation of these factors, the Company made a provision of $2.1 million for fiscal year 2011 compared to a $2.2 million provision for the 2010 fiscal year. At September 30, 2011, the Company had 52 commercial loan relationships whose loans were judged by management to be impaired. Of these 52 relationships, five commercial real estate relationships with combined outstanding loans of $2.4 million had an allocation of the allowance for loan loss amounting to $466,000. Three commercial business relationships with combined loans of $265,000 had an allocation of the allowance for loan loss amounting to $101,000. These specific allowance allocations were also considered in the Companys evaluation for its provision for loan losses for the fiscal year ended September 30, 2011. The allowance for loan losses was $8.2 million or 1.09% of loans outstanding at September 30, 2011, compared to $7.4 million, or 1.01% of loans outstanding at September 30, 2010.
Non-Interest Income. Non-interest income decreased $383,000 or 5.7%, to $6.3 million for the year ended September 30, 2011, from $6.7 million for the comparable 2010 period. The decrease was primarily due to decreases in gain on sale of investments, net of $442,000 and gains on sales of loans net of $351,000 for fiscal 2011 compared to fiscal 2010. These decreases were offset, in part, by an increase in insurance commissions of $361,000.
As reported in the Consolidated Statements of Cash Flows, our cash flows are classified for financial reporting purposes as operating, investing or financing cash flows. Net cash provided by operating activities was $5.3 million, $10.2 million and $7.4 million for the years ended September 30, 2012, 2011 and 2010, respectively. These amounts differ from our net income because of a variety of cash receipts and disbursements that did not affect net income for the respective periods. Net cash provided by/(used) in investing activities was $75.4 million, $4.1 million and $(38.7) million in fiscal years 2012, 2011 and 2010, respectively, principally reflecting our loan and investment security activities in the respective periods along with our acquisition of First Star Bank in 2012. Investment security cash flows had the most significant effect, as net cash utilized in purchases amounted to $92.0 million, $96.8 million and $143.0 million in the years ended September 30, 2012, 2011 and 2010, respectively. Cash proceeds from principal repayments, maturities and sales of investment securities amounted to $117.5 million, $120.9 million and $112.0 million in the years ended September 30, 2012, 2011 and 2010, respectively. Deposit and borrowing cash flows have traditionally comprised most of our financing activities which resulted in net cash (used)/provided of $(106.9) million in fiscal year 2012, $16.5 million in fiscal year 2011 and $23.6 million in fiscal year 2010. In addition, during fiscal 2011 we used $16.9 million and in fiscal 2010 we used $17.0 million to repurchase our stock as part of previously disclosed stock repurchase plans.
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