Mail-Stop 4561
December 29, 2006
(Via facsimile and U.S. Mail)
Mr. Gary S. Olson
President and Chief Executive Officer
Essa Bancorp, Inc.
200 Palmer Street
Stroudsburg, Pennsylvania 18360
Re: Essa Bancorp, Inc.
Registration Statement on Form S-1
Filed December 7, 2006
File Number 333-139157
Dear Mr. Olson:
We have reviewed your Form S-1 and have the following
comments.
Where indicated, we think you should revise your documents in
response to these comments. If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information we may have additional comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects. We welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
* * * * *
Form S-1
Summary
Essa Bank & Trust, page 1
1. Revise the first paragraph to disclose the total equity at
September 30, 2006.
Business Strategy, page 2
2. Revise the penultimate bullet on page 3 ("Expanding our banking
franchise...") to indicate whether or not you have any plans,
arrangements or understandings to make any acquisitions. In
addition,
for the branch opening in 2007, indicate the total estimated cost,
amounts already expensed and the anticipated source of the
funding.
After-Market Stock Price Performance ...., page 7
3. Revise the first full paragraph on page 8 to briefly discuss
what
the analysis yielded, e.g., that the valuation was consistent with
the comparables.
Benefits to Management and Potential....., page 12
4. Noting the statement that you reserve the right to make open
market purchases to fund the ESOP, revise to provide the
circumstances that might give rise to open market purchases.
5. Revise to also briefly discuss the other benefits to management
and directors resulting from the transaction, i.e., those benefits
disclosed on pages 95-102. In this regard, benefits such as new
employment agreements, change in control agreements, supplemental
retirement plans should be disclosed and the benefits quantified.
The Contribution of Shares to the Charitable Foundation ..., page
22
6. Revise to disclose the net income for the last full fiscal
year.
In addition, if a loss is expected for fiscal 2007 as a result of
the
charitable expenses and the expenses associated with the stock
option
and retention and recognition plans, add a risk factor disclosing
such anticipated result.
Our Stock Based Benefit Plans ..., page 22
7. Revise to add a new first paragraph and disclose therein the
anticipated annual expense or range of expense resulting from all
three benefit plans discussed herein.
The Implementation of Stock-Based ....., page 24
8. Revise to clarify whether you are referring to both the
retention
and option plans. In this regard, we note the captions speaks to
plural plans yet the first sentence uses a singular tense.
Other risks
9. Revise to add a risk factor for the increasing leverage of the
company. In this regard, we note that capital as a percentage of
assets has been decreasing for the last five years. In addition,
disclose the effect the offering (at the midpoint) would have on
the
leverage of the company based on your anticipated use of proceeds.
10. Add a risk factor addressing liquidity noting that Ryan Beck
intends to make a market but does not guarantee such action and no
assurance can be given that a liquid market will develop for the
common stock.
Comparison of Valuation and Pro Forma..., page 40
11. With a view towards revised disclosure, supplementally provide
the staff with a reconciliation of the first 2 amounts presented ,
$93,500 and $112,625. In this regard, start with the $112,625
estimated stock offering amount and subtract foundation deductions
by
category to arrive at the $93,500. Similarly, provide the same
analysis for the pro forma stockholders equity numbers, $138,760
and
$155,248.
Loan Approval Procedures and Authority, page 65
12. Revise to name by titles or otherwise identify those members
of
the Management and Director Loan committees.
Supplemental Retirement Plan, page 99
13. Revise to include a table similar to the one presented above
for
the regular pension plan.
Community Offering, page 113
14. Revise to indicate whom will conduct the community offering
and
what , if any, compensation will be paid in addition to the 1%
sales
fee paid to RBCO. In addition, advise the staff how the offering
will
be made known to the community.
Syndicated Community Offering, page 114
15. Revise to indicate if any compensation will be paid in
addition
to the 1% sales fee paid to RBCO.
16. Noting the disclosures in the last paragraph of this section,
revise to add a risk factor with a caption similar to, "We may
take
other actions to meet the minimum required sales of shares if we
cannot find enough purchasers in the community" and include the
narrative from the last paragraph of this section. In addition,
indicate that a post-effective amendment will be filed to explain
the
other actions that are taken to meet the minimum.
Material Income Tax Consequences, page 124
17. Revise to either delete the last paragraph on page 125 or
revise
to indicate the summary of the opinion on state taxes and file the
opinion as an exhibit.
Structure of the Charitable Foundation, page 127
18. Revise to disclose whether or not Bank or Company employees
who
work on foundation matters or are employed by the foundation will
receive salaries or other benefits in addition to those received
from
the Bank and Company. If so, disclose how the pay and benefits
will
be determined.
Restrictions on Acquisition of Essa..., page 130
19. Noting the restrictions presented, revise the Summary or add a
risk factor and disclose therein the material restrictions
discussed
herein.
Experts, page 138
20. We note that Beard Miller Company reported on your financial
statements for the fiscal year ended September 30, 2004 and S.R.
Snodgrass reported on your financial statements for the fiscal
years
ended September 30, 2005 and 2006. Based on the October 24, 2004
audit report date for Beard Miller Company`s report it appears
that
the change in accountants occurred during your two most recent
fiscal
years. Please provide all of the disclosure required by Item 304
of
Regulation S-K, including filing as Exhibit 16 a letter from Beard
Miller Company stating whether it agrees with your disclosure made
in
response to Item 304(a) of Regulation S-K. Refer to Item 11(i) of
Form S-1.
Where you can find...., page 138
21. With regard to the last paragraph on page 139, revise to
indicate
registration under 12(g), not 12(b).
Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies, page F-7
22. We note that you have recognized gains on sales of loans
during
your two most recent fiscal years. Please revise to disclose the
following regarding your loan sales:
* your related accounting policies;
* the types of loans you typically sell;
* when the decision to sell is typically made for these loans,
such
as when originated or after certain events or circumstances occur;
and
* the nature of any continuing involvement in the sold loans.
Exhibits 10.6 through 10.9
23. Revise to add the Exhibit 1 referred to in paragraph IV. A of
each agreement and refile as exhibits.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert this action as defense in any
proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective responsibilities under the Securities Act of 1933 and
the
Securities Exchange Act of 1934 as they relate to the proposed
public
offering of the securities specified in the above
registration statement. We will act on the request and, pursuant
to
delegated authority, grant acceleration of the effective date.
We direct your attention to Rule 461 regarding requesting
acceleration of a registration statement. Please allow adequate
time
after the filing of any amendment for further review before
submitting a request for acceleration. Please provide this
request
at least two business days in advance of the requested effective
date.
Direct any questions on accounting matters to John Spitz at
202-551-3484, or to Joyce Sweeney, at 202-551-3449. Please direct
any other questions to Michael R. Clampitt at 202-551-3434, or to
me
at 202-551-3491.
Sincerely,
Todd Schiffman
Assistant Director
Financial Services Group
(by facsimile)
Marc P. Levy, Esq.
Luse Gorman Pomerenk & Schick, P.C.
5335 Wisconsin Avenue,N.W., Suite 400
Washington, DC 20015
Fax number 202-362-2902
Mr. Gary S. Olson
Essa Bancorp, Inc.
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