EXHIBIT 99
==============================================================================
P R E S S R E L E A S E
==============================================================================
RELEASE DATE: CONTACT:
- ------------- --------
October 19, 2004 CHARLES P. EVANOSKI
GROUP SENIOR VICE PRESIDENT
CHIEF FINANCIAL OFFICER
(724) 758-5584
FOR IMMEDIATE RELEASE
---------------------
ESB FINANCIAL CORPORATION REPORTS
THIRD QUARTER 2004 EARNINGS
Ellwood City, Pennsylvania, October 19, 2004 - ESB Financial Corporation
(Nasdaq: ESBF), the parent company of ESB Bank, today announced earnings for
the quarter ended September 30, 2004 of $0.25 per diluted share on net income
of $2.6 million, which represents a 25.0% increase in net income per diluted
share as compared to earnings of $0.20 per diluted share on net income of $2.2
million for the quarter ended September 30, 2003. The Company's annualized
return on average assets and average equity were 0.75% and 11.02%,
respectively, for the quarter ended September 30, 2004, compared to 0.64% and
9.33%, respectively, for the quarter ended September 30, 2003.
For the nine month period ended September 30, 2004, the Company realized
earnings of $0.70 per diluted share on net income of $7.4 million, which
represents a 20.7% increase in net income per diluted share as compared to
earnings of $0.58 per diluted share on net income of $6.2 million for the same
period in the prior year. The Company's annualized return on average assets
and average equity were 0.72% and 10.32%, respectively, for the nine month
period ended September 30, 2004, compared to 0.61% and 8.44%, respectively,
for the nine months ended September 30, 2003.
In announcing the results of operations for the quarter and the nine months
ended September 30, 2004, Charlotte A. Zuschlag, President and Chief Executive
Officer of the Company and the Bank, stated, "We are pleased with the third
quarter and year to date results and the performance of our net interest
margin which has improved by 20% or greater for the quarter and year to date
ended September 30, 2004 as compared to the same periods in the prior year.
Our improved margin is due in part to our decision to restructure and call a
significant portion of the Company's fixed rate trust preferred securities in
the first quarter of 2004 and a decline in repayments and amortization of
premiums on our investment portfolio. The Company remains focused on improving
net interest and non-interest income, while pursuing strategies to grow
including the recent announcement to acquire PHSB Financial Corporation, the
holding company for Peoples Home Savings Bank, headquartered in Beaver Falls,
Pennsylvania."
Press Release
Page 2 of 4
October 19, 2004
Consolidated net income increased $435,000, or 20.1%, to $2.6 million for the
quarter ended September 30, 2004, compared to $2.2 million for the same period
in the prior year. This increase was the result of an increase in net
interest income, after the provision for loan losses, of $915,000 and decreases
in non-interest expense of $62,000 and provision for income taxes of $273,000,
partially offset by a decrease in non-interest income of $815,000. Net
interest income increased in the third quarter primarily due to lower interest
expense on deposits and borrowings and, to a lesser extent, an increase in
interest income from securities. Included in the decrease of non-interest
income were decreases in fees from the sale of loans, gains on the sale of
available for sale securities and income from joint ventures of $146,000,
$460,000 and $173,000, respectively. The decrease to provision for income
taxes of approximately $273,000, is related to tax benefits recognized by the
Company in the third quarter as a result of amended tax returns that were
filed on behalf of the Company. The decrease to the provision lowered the
Company's effective tax rate to 7.3% from 17.7% for the quarter ended
September 30, 2004. Without the effect of the tax benefits the Company would
have had earnings of $0.22 per diluted share on net income of $2.3 million for
the quarter ended September 30, 2004 or an increase of 10.0% over the same
period in the prior year.
Consolidated net income for the nine month period ended September 30, 2004,
as compared to the nine month period ended September 30, 2003, increased $1.2
million, or 19.4%, to $7.4 million from $6.2 million. This increase was
primarily the result of an increase in net interest income, after the
provision for loan losses, of $2.6 million and a decrease in provision for
income taxes of $91,000, partially offset by a decrease in non-interest income
of $687,000 and an increase in non-interest expense $831,000, respectively.
The increase in net interest income after the provision for loan losses for
the period ended September 30, 2004 was primarily the result of decreases in
interest expense on deposits and borrowings, partially offset by declines in
interest income from loans and securities and an increase in provision for
loan losses of $565,000. The decrease in interest expense was enhanced by the
call of a significant portion of the Company's trust preferred securities
early in the first quarter of 2004. Included in the increase to non-interest
expense was a charge of approximately $844,000 for the deferred debt issuance
costs associated with the redemption of a portion of the Company's
subordinated debt in connection with the call of the trust preferred
securities. The decrease to provision for income taxes of approximately
$91,000 is related to tax benefits recognized by the Company in the third
quarter as a result of amended tax returns that were filed on behalf of the
Company. The decrease to the provision lowered the Company's effective tax
rate to 13.8% from 17.2% for the period ended September 30, 2004. Without the
effect of the tax benefits the Company would have had earnings of $0.67 per
diluted share on net income of $7.1 million for the period ended September 30,
2004 or an increase of 15.5% over the same period in the prior year.
The Company's total assets increased by $22.9 million, or 1.7%, to $1.4
billion at September 30, 2004. This increase resulted primarily from increases
in cash and cash equivalents, securities, loans receivable, Federal Home Loan
Bank Stock, prepaid expenses and other assets and bank owned life insurance
of $824,000, or 5.4%, $1.2 million, or 0.13%, $19.2 million, or 6.0%, $808,000,
or 2.6%, $893,000, or 14.4%, and $702,000, or 2.9%, respectively. The Company's
total liabilities increased by $22.0 million, or 1.7%, to $1.3 billion at
September 30, 2004. The increase in total liabilities was primarily the
result of an increase in borrowed funds of $51.3 million, or 7.9%, partially
offset by a decrease in deposits of $27.6 million, or 4.6%. Total stockholders'
equity increased $896,000, or 0.9%, to $97.8 million at September 30, 2004,
from $96.9 million at December 31, 2003. The increase to stockholders' equity
was the result of increases in retained earnings and additional paid in
capital of $3.2 million and $639,000, respectively, and a decrease to unearned
employee stock ownership plan of $743,000, partially offset by increases in
treasury stock and unvested shares held by management recognition plan of
$936,000 and
Press Release
Page 3 of 4
October 19, 2004
$159,000, respectively, and a decrease in accumulated other comprehensive
income of $2.6 million. The decrease to accumulated other comprehensive income
was a result of the market value adjustment to the Company's investment
securities available for sale portfolio. Average stockholders' equity to
average assets was 6.97%, and book value per share was $9.13 at September 30,
2004 compared to 7.22% and $8.98 at December 31, 2003.
ESB Financial Corporation is the parent holding company of ESB Bank, and offers
a wide variety of financial products and services through 17 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.
This news release contains certain forward-looking statements with respect to
the financial condition, results of operations and business of the Company.
Forward-looking statements are subject to various factors which could cause
actual results to differ materially from these estimates. These factors
include, but are not limited to, changes in general economic conditions,
interest rates, deposit flows, loan demand, competition, legislation or
regulation and accounting principles, policies or guidelines, as well as other
economic, competitive, governmental, regulatory and accounting and
technological factors affecting the Company's operations.
Press Release
Page 4 of 4
October 19, 2004
ESB FINANCIAL CORPORATION AND SUBSIDIARIES
Financial Highlights
(Dollars in Thousands - Except Per Share Amounts)
OPERATIONS DATA:
Three Months Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
------- -------- ------- --------
<s> <c> <c> <c> <c>
Interest income $15,143 $14,648 $45,162 $47,139
Interest expense 9,042 9,756 26,370 31,540
------- -------- ------- --------
Net interest income 6,101 4,892 18,792 15,599
Provision for (recovery of) loan losse 57 (237) 298 (267)
------- -------- ------- --------
Net interest income after provision for
(recovery of) loan losses 6,044 5,129 18,494 15,866
Noninterest income 1,562 2,377 5,257 5,944
Noninterest expense 4,801 4,863 15,164 14,333
------- -------- ------- --------
Income before provision
for income taxes 2,805 2,643 8,587 7,477
Provision for income taxes 205 478 1,187 1,278
------- -------- ------- --------
Net income $ 2,600 $ 2,165 $ 7,400 $ 6,199
======= ======== ======= ========
Net income per share:
Basic $0.26 $0.21 $0.73 $0.61
Diluted $0.25 $0.20 $0.70 $0.58
Annualized return on average assets 0.75% 0.64% 0.72% 0.61%
Annualized return on average equity 11.02% 9.33% 10.32% 8.44%
FINANCIAL CONDITION DATA:
As of:
September 30, December 31,
2004 2003
---- ----
<s> <c> <c>
Total assets $1,388,708 $1,365,780
Cash and cash equivalents 16,154 15,330
Total investment securities 930,161 928,936
Loans receivable, net 341,671 322,454
Customer deposits 575,441 603,046
Borrowed funds (includes subordinated debt) 703,787 652,489
Stockholders' equity 97,767 96,871
Book value per share $9.13 $8.98
Average equity to average assets 6.97% 7.22%
Allowance for loan losses to loans receivable 1.10% 1.17%
Non-performing assets to total assets 0.22% 0.22%