ESSA Bancorp(US:ESSA)2025-05-09 19:58Financial Position - Total assets decreased by $20.1 million, or 0.9%, to $2.2 billion at March 31, 2025, primarily due to decreases in cash and cash equivalents and investment securities [117]. - Total cash and cash equivalents decreased by $19.0 million, or 39.2%, to $29.6 million at March 31, 2025 [118]. - Net loans increased by $12.8 million, or 0.7%, to $1.76 billion at March 31, 2025, with residential loans increasing by $13.2 million [119]. - Deposits increased by $60.7 million, or 3.7%, to $1.69 billion at March 31, 2025, driven by increases in certificates of deposit and money market accounts [125]. - Stockholders' equity increased by $6.1 million, or 2.6%, to $236.5 million at March 31, 2025, primarily due to net income of $6.7 million [127]. - Investment securities available for sale decreased by $5.9 million, or 2.8%, to $209.9 million at March 31, 2025 [122]. - Short-term borrowings decreased to $200.7 million at March 31, 2025, from $280.0 million at September 30, 2024 [126]. Income and Expenses - Net income decreased by $1.8 million, or 40.0%, to $2.7 million for the three months ended March 31, 2025, compared to $4.6 million for the same period in 2024, primarily due to merger-related costs and increased non-interest expenses [134]. - Net interest income decreased by $644,000, or 4.3%, to $14.2 million for the three months ended March 31, 2025, compared to $14.9 million for the same period in 2024 [135]. - Non-interest income increased by 0.7% to $2.0 million for the three months ended March 31, 2025, compared to the same period in 2024 [139]. - Non-interest expense increased by $1.1 million, or 9.3%, to $12.8 million for the three months ended March 31, 2025, primarily due to merger-related costs [140]. - Net income decreased by $2.2 million, or 24.8%, to $6.7 million for the six months ended March 31, 2025, compared to $8.9 million for the same period in 2024 [142]. - Non-interest income increased by 2.8% to $4.1 million for the six months ended March 31, 2025, compared to $4.0 million for the same period in 2024 [147]. - Non-interest expense increased by $1.2 million, or 5.0%, to $24.7 million for the six months ended March 31, 2025, primarily due to merger-related costs and increased compensation [148]. Interest and Yield - The interest rate spread for the three months ended March 31, 2025, was 2.21% compared to 2.37% for the same period in 2024 [130]. - The net interest margin for the three months ended March 31, 2025, was 2.78%, down from 2.87% in the prior year [130]. - Total interest income was $25.6 million for the three months ended March 31, 2025, reflecting an increase in yield on average interest-earning assets from 4.95% to 5.01% [136]. - Interest expense increased to $11.4 million for the quarter ended March 31, 2025, compared to $10.8 million for the same period in 2024, with the cost of interest-bearing liabilities rising to 2.80% [137]. - Total interest income for the six months ended March 31, 2025, was $52.0 million, reflecting an increase in yield on average interest-earning assets from 4.92% to 5.01% [144]. Asset Quality - Non-performing assets decreased by $481,000 from September 30, 2024, to March 31, 2025, totaling $11.74 million [152]. - The ratio of non-performing loans to total loans improved to 0.46% as of March 31, 2025, down from 0.51% [152]. - The allowance for credit losses (ACL) is measured based on the evaluation of the loan portfolio's risk characteristics and current economic conditions [158]. Merger and Market Risk - The merger with CNB Financial Corporation is expected to close in the second half of 2025, with each share of ESSA common stock converting to 0.8547 shares of CNB common stock [116]. - Interest rate risk is the most significant market risk, with management actively monitoring and managing this exposure [166]. - There have been no material changes in interest rate risk since September 30, 2024 [167].