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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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July 19, 2005 CHARLES P. EVANOSKI
GROUP SENIOR VICE PRESIDENT
CHIEF FINANCIAL OFFICER
(724) 758-5584
FOR IMMEDIATE RELEASE
_____________________
ESB FINANCIAL CORPORATION REPORTS
SECOND QUARTER 2005 EARNINGS
Ellwood City, Pennsylvania, July 19, 2005 - ESB Financial
Corporation (Nasdaq: ESBF), the parent company of ESB Bank,
today announced earnings for the quarter ended June 30, 2005
of $0.24 per diluted share on net income of $3.2 million,
which represents a 9.1% increase in net income per diluted
share as compared to earnings of $0.22 per diluted share on
net income of $2.4 million for the quarter ended June 30,
2004. The Company's annualized return on average assets and
average equity were 0.71% and 9.51%, respectively, for the
quarter ended June 30, 2005, compared to 0.69% and 10.25%,
respectively, for the quarter ended June 30, 2004.
For the six month period ended June 30, 2005, the Company
realized earnings of $0.48 per diluted share on net income of
$6.1 million, which represents a 6.7% increase in net income
per diluted share as compared to earnings of $0.45 per diluted
share on net income of $4.8 million for the same period in the
prior year. The Company's annualized return on average assets
and average equity were 0.72% and 9.68%, respectively, for the
six-month period ended June 30, 2005, compared to 0.70% and
9.98%, respectively, for the six months ended June 30, 2004.
In announcing the results of operations for the quarter and
the six months ended June 30, 2005, Charlotte A. Zuschlag,
President and Chief Executive Officer of the Company and the
Bank, stated, "We are pleased with the second quarter and year
to date results and the continued improvement in our net
interest margin over last year. Our improved margin is due in
part to our commitment to growth, both internally and through
acquisitions. The Company remains focused on improving net
interest and non-interest income, while pursuing strategies to
grow and provide a sound investment return to our
shareholders. This focus is exemplified this year with the
efforts of the Company's management and employees to
coordinate and complete the successful integration of PHSB
Financial Corporation's operations, which was acquired on
February 11, 2005, into the operations of ESB Financial
Corporation".
Press Release
Page 2 of 4
July 19, 2005
Consolidated net income increased $855,000, or 36.2%, to $3.2
million for the quarter ended June 30, 2005, compared to $2.4
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 $2.2 million, a slight
increase in non-interest income of $76,000 and a decrease to
the provision for loan losses of $203,000, partially offset by
increases in non-interest expense and provision for income
taxes of $1.3 million and $146,000, respectively. Net interest
income increased in the second quarter primarily due to an
increase in interest income from loans and securities,
partially offset by an increase in interest expense on
deposits and borrowings. Non-interest income and non-interest
expense were affected by increases due primarily to the
acquisition of PHSB Financial Corporation's (PHSB) operations.
Included in the increase in non-interest income was an
increase in fees and service charges of $110,000, partially
offset by decreases in other non-interest income of $34,000.
The increase in fees and service charges, of $110,000, was
offset by a decrease in prepayment fees on loans of $217,000,
related to the prepayment of two commercial loans in the
second quarter of 2004. Included in the increase of non-
interest expense were increases in compensation and employee
benefits, premises and equipment, data processing expense and
other expense of $366,000, $205,000, $93,000 and $333,000,
respectively. Other non-interest expense was additionally
affected by an increase in the amortization of the core
deposit intangible recorded with the acquisition of PHSB of
$195,000.
Consolidated net income for the six month period ended June
30, 2005, as compared to the six month period ended June 30,
2004, increased $1.3 million, or 26.6%, to $6.1 million from
$4.8 million. This increase was primarily the result of an
increase in net interest income, after the provision for loan
losses, of $3.2 million, offset by a decrease in non-interest
income of $640,000 and increases in non-interest expense and
provision for income taxes of $1.0 million and $222,000,
respectively. The increase in net interest income after the
provision for loan losses for the period ended June 30, 2005
was primarily the result of increases in interest income from
loans and securities and a decrease in the provision for loan
losses, partially offset by increases in interest expense on
deposits and borrowings. The decrease in non-interest income
was primarily the result of decrease in gains on sales of
securities and joint venture income of $943,000 and $132,000,
respectively, partially offset by increase in fees and service
charges and other income of $323,000 and $142,000. Included
in the increase to non-interest expense were increases in
compensation and employee benefits, premises and equipment,
data processing, amortization of core deposit intangible and
other expenses of $608,000, $337,000, $121,000, $296,000 and
$452,000, respectively. Partially offsetting the increase was
a decrease of $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 in 2004.
The Company's total assets increased by $437.7 million, or
31.4%, to $1.8 billion at June 30, 2005. This increase was
primarily the result of the acquisition of PHSB during the
first quarter. Through this merger, the Company acquired
$331.0 million in assets, $146.0 million in loans and $231.0
million in deposits. The $437.7 million increase in assets
resulted primarily from increases in loans receivable of
$154.9 million, or 45.1%, to $498.4 million, securities of
$197.4 million, or 21.2%, to $1.1 billion along with a $34.6
million increase in goodwill from the acquisition. The
Company's total liabilities increased by $399.3 million, or
30.8%, to $1.7 billion at June 30, 2005. This increase in
total liabilities was primarily the result of an increase in
deposits of $232.3 million, or 40.0%, to $812.7 million along
with an increase in borrowed funds of $142.3 million, or
17.7%, to $707.9 million. Total stockholders' equity
increased $38.4 million, or 39.3%, to $136.2 million at June
30, 2005, from $97.8 million at December 31, 2004. The
increase to stockholders' equity was primarily the result of
common stock (and the related paid-in capital) issued in
connection with the acquisition of PHSB in the amount of $39.5
million, partially offset by a decrease in accumulated other
comprehensive income (loss) of $1.7 million. Average
stockholders' equity to average assets was 7.43%, and book
value per share was $10.20 at June 30, 2005 compared to 6.99%
and $9.16 at December 31, 2004.
Press Release
Page 3 of 4
July 19, 2005
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.
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
July 19, 2005
ESB FINANCIAL CORPORATION AND SUBSIDIARIES
Financial Highlights
(Dollars in Thousands - Except Per Share Amounts)
OPERATIONS DATA:
Three Months Six Months
Ended June 30, Ended June 30,
2005 2004 2005 2004
______ ______ ______ ______
Interest income $ 20,356 $ 14,819 $ 38,077 $ 30,019
Interest expense 12,162 8,598 22,443 17,328
_______ ________ _______ ________
Net interest income 8,194 6,221 15,634 12,691
Provision for loan losses 18 221 2 240
Net interest income after provision _______ ________ _______ ________
for loan losses 8,176 6,000 15,632 12,451
Noninterest income 1,710 1,634 3,056 3,696
Noninterest expense 6,062 4,811 11,406 10,365
Income before provision _______ ________ _______ ________
for income taxes 3,824 2,823 7,282 5,782
Provision for income taxes 607 461 1,204 982
_______ ________ _______ ________
Net income $ 3,217 $ 2,362 $ 6,078 $ 4,800
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Net income per share:
Basic $0.25 $0.23 $0.49 $0.47
Diluted $0.24 $0.22 $0.48 $0.45
Annualized return on average assets 0.71% 0.69% 0.72% 0.70%
Annualized return on average equity 9.51% 10.25% 9.68% 9.98%
Interest rate margin 2.17% 2.14% 2.20% 2.18%
FINANCIAL CONDITION DATA:
As of:
June 30, December 31,
2005 2004
____ ____
Total assets $ 1,832,225 $ 1,394,515
Cash and cash equivalents 46,293 17,703
Total investment securities 1,127,180 929,794
Loans receivable, net 498,398 343,524
Customer deposits 812,674 580,346
Borrowed funds (includes subordinated debt) 845,119 702,773
Stockholders' equity 136,193 97,801
Book value per share $10.20 $9.16
Average equity to average assets 7.43% 6.99%
Allowance for loan losses to loans receivable 1.00% 1.06%