ESSA Bancorp (ESSA) 8-K/A Unaudited Pro Forma Combined Condensed Consolidated Financial Information Relating to the First Star Acquisition

Exhibit 99.1

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION RELATING TO THE FIRST STAR ACQUISITION

The unaudited pro forma combined condensed consolidated financial information has been prepared using the acquisition method of accounting, giving effect to ESSA Bancorp’s merger with First Star. The unaudited pro forma combined condensed consolidated statement of financial condition combines the historical financial information of ESSA Bancorp and First Star as of June 30, 2012, and assumes that the proposed merger was completed on that date. The unaudited pro forma combined condensed consolidated statements of operations give effect to the proposed First Star merger as if it had been completed at the beginning of that period. The unaudited pro forma combined condensed consolidated financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations or financial condition had the merger been completed on the dates described above, nor is it necessarily indicative of the results of operations in future periods or the future financial position of the combined entities. For the unaudited pro forma combined condensed consolidated financial information as of and for the year ended September 30, 2011 and as of and for the three month period ended December 31, 2011, please see the 424(b)(3) prospectus filed by ESSA Bancorp, Inc. with the Securities and Exchange Commission on April 23, 2012.

The unaudited pro forma balance sheet, stockholders’ equity and net income are qualified by the statements set forth under this caption and should not be considered indicative of the market value of ESSA Bancorp common stock or the actual or future results of operations of ESSA Bancorp for any period. Actual results may be materially different than the pro forma information presented.

ESSA BANCORP, INC. AND SUBSIDIARY

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

JUNE 30, 2012

	ESSA Bancorp, Inc. Historical			First Star Bancorp, Inc. Historical			Mark to Market Adjustments			Merger and Consolidating Adjustments			Pro Forma Combined
	(dollars in thousands)
ASSETS
Cash and due from banks	$	8,624		$	49,820								$	58,444
Interest-bearing deposits with other institutions		14,160			9,400						(12,305	) A		11,255
Total cash and cash equivalents		22,784			59,220									69,699
Certificates of deposit		—			1,293									1,293
Investment securities available for sale		276,496			118,594			(3,140	) F					391,950
Loans receivable, net		741,200			217,567			(4,551	) B					954,216
Federal Home Loan Bank stock		14,474			9,690									24,164
Premises and equipment		11,453			2,868			2,028	I					16,349
Bank-owned life insurance		23,844			3,764									27,608
Foreclosed real estate		1,769			385			(367	) G					1,787
Intangible assets, net		1,582			—			1,218	C					2,800
Goodwill		413			—			7,481	K					7,894
Other assets		19,048			13,396			999	J					33,443
TOTAL ASSETS	$	1,113,063		$	426,777			3,668			(12,305	)	$	1,531,203
LIABILITIES
Deposits	$	688,897		$	332,991			2,264	D				$	1,024,152
Short-term borrowings		11,000			—									11,000
Other borrowings		234,410			48,988			4,703	E					288,101
Advances by borrowers for taxes and insurance		6,942			4,302									11,244
Convertible subordinated debentures		—			—			0						—
Junior subordinated debentures		—			8,248			348	H					8,596
Other liabilities		8,140			3,990									12,130
TOTAL LIABILITIES		949,389			398,519									1,355,223
Commitment and contingencies (Notes 12 and 13)		—			—									—
STOCKHOLDERS’ EQUITY
Preferred stock		—			5,680			(5,680	) A					—
Common stock		170			1,200			(1,200	) A		12	A		182
Additional paid-in capital		168,389			12,953			(12,953	) A		12,294	A		180,683
Unallocated common stock held by the Employee Stock Ownership Plan (“ESOP”)		(11,098	)		—									(11,098	)
Retained earnings		67,910			13,014			(13,014	) A					67,910
Treasury stock, at cost		(61,944	)		(384	)		384	A					(61,944	)
Accumulated other comprehensive income (loss)		247			(4,205	)		4,205	A					247
TOTAL STOCKHOLDERS’ EQUITY		163,674			28,258			(20,943	)		12,306			175,980
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,113,063		$	426,777								$	1,531,203

ESSA BANCORP, INC. AND SUBSIDIARY

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE NINE MONTHS ENDED JUNE 30, 2012

	ESSA Bancorp, Inc. Historical		First Star Bancorp, Inc. Historical			Pro Forma Acquisition Adjustments			Pro Forma Combined
	(dollars in thousands)
INTEREST INCOME
Loans receivable	$	27,366	$	8,790		$	362	M	$	36,518
Investment securities:
Taxable		4,902		2,058			—			6,960
Exempt from federal income tax		158		—			—			158
Other investment income		13		3			—			16
Total interest income		32,439		10,851			362			43,652
INTEREST EXPENSE
Deposits		5,527		2,607			(698	) N		7,436
Short-term borrowings		18		—			—			18
Junior subordinated debentures				653						653
Other borrowings		6,679		2,041			—			8,720
Total interest expense		12,224		5,301			(698	)		16,827
NET INTEREST INCOME		20,215		5,550			1,060			26,825
Provision for loan losses		1,750		—			—			1,750
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		18,465		5,550			1,060			25,075
NONINTEREST INCOME
Service fees on deposit accounts		2,058		242			—			2,300
Services charges and fees on loans		550		151			—			701
Trust and investment fees		684		—			—			684
Impairment loss on securities		—		(2,090	)		—			(2,090	)
Gain on sale of investments, net		147		—			—			147
Gain on sale of loans, net		27		—			—			27
Earnings on bank-owned life insurance		588		—			—			588
Insurance commissions		563		—			—			563
Other		25		645			—			670
Total noninterest income		4,642		(1,052	)		—			3,590
NONINTEREST EXPENSE
Compensation and employee benefits		11,804		3,042			—			14,846
Occupancy and equipment		2,288		803			—			3,091
Professional fees		1,083		242			—			1,325
Data processing		1,512		260			—			1,772
Advertising		263		80			—			343
Federal Deposit Insurance Corporation (“FDIC”) premiums		497		377			—			874
Loss on foreclosed real estate		90		(335	)		—			(245	)
Amortization of intangible assets		243		—			—			243
Amortization of core deposit intangible		—		—			198	L		198
Other		2,282		767			—			3,049
Total noninterest expense		20,062		5,236			198			25,496
Income before income taxes		3,045		(738	)		862			3,169
Income taxes		706		(295	)		293			704
NET INCOME	$	2,339	$	(443	)	$	569		$	2,465

There are no anticipated cost savings from the merger reflected in the pro forma statements of operations.

NOTES TO THE UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION

A Represents the purchase price of $24.611 million based on the exchange ratio of 1.0665 shares of ESSA Bancorp, Inc. common stock for one share of FSB common stock resulting in the issuance of 1,152,195 shares at the closing price of $10.68 and the disbursement of $12.305 million in cash.

B Represents a $6.649 million fair market value adjustment to the loan portfolio net of the reversal of $2.098 allowance for loan losses.

C Represents the fair value of the core deposit intangible created associated with the deposit liabilities assumed, estimated at approximately 1.02% of core deposits. Such intangible is anticipated to be amortized over a period of nine years using the double declining balance method.

D Represents the fair value adjustment to time deposit liabilities assumed based on the difference between the cash flows using contractual interest rates compared to the cash flows using market interest rates.

E Represents the fair value adjustment to borrowings based on prepayment quotes from the FHLB.

F Represents the fair value adjustment to investment securities in excess of FSB’s estimate.

G Represents the fair value adjustment to Foreclosed Real Estate.

H Represents the fair value adjustment to Junior Subordinated Debt based on prepayment quotes.

I Represents the fair value adjustment to bank owned buildings based on appraisals.

J Represents adjustments to deferred tax assets.

K Calculation of Goodwill:

Purchase price			$	24,611
FSB equity at 6/30/12	28,258
Adjustments:
Investment securities	(3,140	)
Loan portfolio	(4,551	)
Premises	2,028
Foreclosed Real Estate	(367	)
Time deposits	(2,264	)
Borrowings	(4,703	)
Junior Subordinated Debentures	(348	)
Core deposit intangible created	1,218
Reduce purchased deferred taxes	(3,424	)
Related deferred taxes	4,423
Adjusted equity				17,130
Goodwill			$	7,481

L Amortization of core deposit intangible.

M Represents nine months of second year of net accretion of loan FMV adjustments.

N Represents nine months of second year of FMV adjustments to time deposits.