ESSA Bancorp, Inc. (the “Company”) (NASDAQ Global Market SM “ESSA”) the holding company for ESSA Bank & Trust (the “Bank”) today announced its operating results for the three months ended December 31, 2010. The Company reported net income of $1.0 million, or $0.09 per diluted share, for the three months ended December 31, 2010, as compared to net income of $794,000, or $0.06 per diluted share, for the corresponding 2009 period. Net income of $794,000 for the three months ending December 31, 2009, included a pre-tax write-down of $1.2 million in the value of the Company’s foreclosed real estate portfolio.
Gary S. Olson, President and Chief Executive Officer commented, “We are pleased that our efforts to restructure our liabilities have contributed to an improvement, over the prior quarter, in our net interest margin. However, continued elevated levels of unemployment, a weak housing market and lower reinvestment rates, while they persist, will continue to put pressure on our operating results. The current economy also continues to put pressure on our credit quality. Our nonperforming loans, while very manageable, increased again this quarter. Despite this, we are confident in our underwriting standards and have continued to lend money to qualified borrowers. Our loan portfolio increased approximately $17.0 million this quarter. Our capital remains well above both regulatory requirements and that of our peers. We will continue to work toward managing through the current economic environment and to position the Company to grow and prosper as the economy improves.”
Net Interest Income:
Net interest income decreased $153,000, or 2.1%, to $7.1 million for the three months ended December 31, 2010, from $7.3 million for the comparable period in 2009. The decrease was primarily attributable to a decrease in the Company’s average net earning assets of $16.6 million, and a decrease in the Company’s interest rate spread to 2.44% for the three months ended December 31, 2010, from 2.45% for the comparable period in 2009.