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P R E S S R E L E A S E
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| RELEASE DATE: | | CONTACT: |
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| January 28, 2010 | | CHARLES P. EVANOSKI |
| | | GROUP SENIOR VICE PRESIDENT |
| | | CHIEF FINANCIAL OFFICER |
| | | (724) 758-5584 |
FOR IMMEDIATE RELEASE
ESB FINANCIAL CORPORATION ANNOUNCES
RECORD EARNINGS FOR 2009 YEAR END
Ellwood City, Pennsylvania, January 28, 2010 – ESB Financial Corporation (NASDAQ: ESBF), the parent company of ESB Bank, today announced earnings of $1.00 per diluted share on net income of $12.0 million for the year ended December 31, 2009, which represents an 19.1% increase in net income per diluted share as compared to earnings of $0.84 per diluted share on net income of $10.2 million for the year ended December 31, 2008. The Company’s return on average assets and average equity were 0.61% and 7.66%, respectively, for the year ended December 31, 2009 and 0.53% and 7.88%, respectively, for the year ended December 31, 2008.
For the three months ended December 31, 2009, the Company announced earnings of $0.20 per diluted share on net income of $2.3 million, which represents a 25.0% increase in net income per diluted share as compared to earnings of $0.16 per diluted share on net income of $2.0 million for the quarter ended December 31, 2008. The Company’s annualized return on average assets and average equity were 0.48% and 5.55%, respectively, for the quarter ended December 31, 2009 and 0.40% and 6.16%, respectively, for the quarter ended December 31, 2008.
Income for the year ended December 31, 2009 was negatively affected by the Federal Deposit Insurance Corporation’s (“FDIC”) decision to establish a special assessment of five basis points on all FDIC-insured financial institutions. The assessment was based on total assets minus Tier 1 capital as of June 30, 2009. The special assessment of $891,000 was collected on September 30, 2009 and recorded in the second quarter of 2009. Operating earnings without the effect of the special assessment would have been $1.05 per diluted share on net income of $12.6 million for the year ended December 31, 2009, a 25.0% increase in diluted earnings per share as compared to the same period in the prior year.
Commenting on the quarter and year end results, Charlotte A. Zuschlag, President and Chief Executive Officer of the Company, stated, “The Board of Directors, senior management and I are pleased with the record earnings for the year ended December 31, 2009. During this challenging time for the banking industry, our philosophy has been to manage the interest rate margin without compromising asset quality or future earnings potential while continuing to offer quality products to our customers.” Ms. Zuschlag continued by noting that “it is exciting to see the results of these efforts reflected in our earnings, which increased substantially over the prior year, our strong interest rate margin, which increased 39 basis points since last year, our solid asset quality and our ability to increase our deposit base by $67.0 million, or 7.6%, since December 31, 2008.” Additionally, Ms. Zuschlag concluded by stating, “Management will continue to strive to pursue growth opportunities that will provide a sound investment return to our shareholders.”
Press Release
Page 2 of 4
January 28, 2010
Consolidated net income for the year ended December 31, 2009 increased $1.8 million or 17.6% to $12.0 million from $10.2 million as compared to the year ended December 31, 2008. This net increase was a result of decreases in interest expense, provision for loan losses and noncontrolling interest of $10.8 million, $494,000 and $556,000, respectively, partially offset by decreases to interest income and noninterest income of $3.8 million and $1.7 million, respectively and increases to noninterest expense and income taxes of $3.7 million and $834,000, respectively.
Consolidated net income for the quarter ended December 31, 2009 increased $373,000 to $2.3 million from $2.0 million, as compared to the quarter ended December 31, 2008. This net increase was a result of decreases in interest expense, provision for loan losses and noncontrolling interest of $3.5 million, $326,000 and $603,000, respectively, partially offset by decreases to interest income and noninterest income of $1.7 million and $1.1 million, respectively and increases to noninterest expense and income taxes of $991,000 and $198,000, respectively.
The declines to interest expense for the quarter and year to date were primarily due to increases in the core deposits as a result of the Company’s ongoing campaign to increase commercial, public and personal checking accounts. The Company was able to replace higher priced borrowings with these lower rate deposits which contributed to the decline in the cost of funds for the year of 64 basis points to 3.03% at December 31, 2009 from 3.67% at December 31, 2008.
The decrease to noninterest income for the quarter and year ended December 31, 2009 was primarily due to write downs of land acquisition and development costs as well as unit construction costs of approximately $2.5 million at two of the Company’s joint ventures. Additionally, the Company had impairment charges during the quarter of approximately $10,000 on one of its equity investments in small banks that had experienced a decline in their market value for the last several quarters as well as an impairment charge of approximately $144,000 on a $2.5 million collateralized debt obligation that is comprised of sixteen financial institutions. Offsetting the impairment charges, the Company recorded an increase for the quarter in the market value of its interest rate caps of approximately $120,000. The increase to noninterest expense was primarily related to increases in compensation and employee benefits and the aforementioned federal deposit insurance premiums of $452,000 and $408,000 for the quarter ended December 31, 2009 and $1.1 million and $2.4 million, respectively, for the year ended December 31, 2009.
The Company’s consolidated total assets decreased $16.2 million, or 0.8%, to $2.0 billion at December 31, 2009, from $2.0 billion at December 31, 2008. Securities increased $10.1 million, or 0.9%, to $1.1 billion and net loans receivable decreased $20.0 million, or 2.9%, to $671.4 million. Total liabilities decreased $37.8 million, or 2.1%, to $1.8 billion at December 31, 2009. Borrowed funds decreased $103.3 million, or 11.1%, to $829.6 million while total deposits increased $67.0 million, or 7.6%, to $944.3 million at December 31, 2009.
Total stockholders’ equity was $164.8 million or 8.41% of total assets, and book value per share was $13.70 at December 31, 2009 compared to $143.1 million or 7.24% of total assets, and book value per share of $11.74 at December 31, 2008.
The Company also announced that its annual meeting of stockholders will be held on Wednesday, April 21, 2010 at 4:00 p.m. at the Connoquenessing Country Club in Ellwood City, Pennsylvania.
ESB Financial Corporation is the parent holding company of ESB Bank, and offers a wide variety of financial products and services through 23 offices in the contiguous counties of Allegheny, Lawrence, Beaver and Butler in Pennsylvania. The common stock of the Company is traded on The NASDAQ Stock Market under the symbol “ESBF”. We make available on our web site, which is located at http://www.esbbank.com, our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, on the date which we electronically file these reports with the Securities and Exchange Commission. Investors are encouraged to access these reports and the other information about our business and operations on our web site.
