UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
 
Washington, D.C.  20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
 
Date of Report (Date of earliest event reported)
October 21, 2014
 
 
ESB Financial Corporation
(Exact name of registrant as specified in its charter)
 
 
Pennsylvania
0-19345
25-1659846
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
 
 
600 Lawrence Avenue, Ellwood City, Pennsylvania
16117
(Address of principal executive offices)
(Zip Code)
 
 
Registrant's telephone number, including area code
(724) 758-5584
 
 
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
 
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
 
[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
Item 2.02          Results of Operations and Financial Condition
 
On October 21, 2014 ESB Financial Corporation issued a press release announcing its results of operations for the three months and nine months ended September 30, 2014.  A copy of the press release is included as Exhibit 99 and is incorporated herein by reference.
 
 
Item 9.01           Financial Statements and Exhibits
 
(a)           Not applicable.
 
(b)           Not applicable.
 
(c)           The following exhibit is included with this Report:
 
Exhibit No.                   Description
 
 
99
Press Release, dated October 21, 2014
 
 
This information, including the press release filed as Exhibit 99, shall not be deemed to be filed” for purposes of Section 18 of the Securities Exchange Act of 1934 nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2
 
 
 
SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
ESB FINANCIAL CORPORATION
     
     
 
By:
/s/ Charlotte A. Zuschlag
   
Name:  Charlotte A. Zuschlag
   
Title: President and Chief Executive Officer
 
 
Date: October 21, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
pr.htm
 
EXHIBIT 99
 
 
 
 
 
 
 
 
 
 
 
 P R E S S   R E L E A S E
 
 
RELEASE DATE:    CONTACT:
   
October 21, 2014  CHARLES P. EVANOSKI
  GROUP SENIOR VICE PRESIDENT
  CHIEF FINANCIAL OFFICER
  (724) 758-5584
   
 
 
FOR IMMEDIATE RELEASE
 
ESB FINANCIAL CORPORATION ANNOUNCES
INCREASED THIRD QUARTER EARNINGS
 
 
Ellwood City, Pennsylvania, October 21, 2014 – ESB Financial Corporation (Nasdaq: ESBF), the parent company of ESB Bank, today announced earnings for the quarter ended September 30, 2014 of $0.26 per diluted share on net income of $4.6 million compared to earnings of $0.23 per diluted share on net income of $4.0 million for the quarter ended September 30, 2013, a 13.0% increase in net income per diluted share. The Company’s annualized return on average assets and average equity were 0.94% and 8.97%, respectively, for the quarter ended September 30, 2014, compared to 0.84% and 8.69%, respectively, for the quarter ended September 30, 2013.
 
For the nine month period ended September 30, 2014, the Company realized earnings of $0.77 per diluted share on net income of $13.6 million as compared to earnings of $0.66 per diluted share on net income of $11.6 million for the same period in the prior year, a 16.7% increase in net income per diluted share.  The Company’s annualized return on average assets and average equity were 0.93% and 9.11%, respectively, for the nine months ended September 30, 2014, compared to 0.81% and 8.10%, respectively, for the nine months ended September 30, 2013.
 
Charlotte A. Zuschlag, President and Chief Executive Officer of the Company, stated, “The Board of Directors, senior management and I are pleased with the earnings for the quarter and nine month period ended September 30, 2014. We have been successful and prudent in managing our net interest rate margin during this difficult interest rate environment while protecting our asset quality and our future earnings potential. We continue to experience growth in our core deposits which assists in reducing our cost of funds. Our deposits have grown $114.0 million, or 9.3%, since December 31, 2013. This growth has allowed us to decrease our wholesale borrowings and manage our cost of funds which has declined 26 basis points since December 31, 2013.”  Ms. Zuschlag continued by stating, “Management will continue to strive to pursue opportunities that will provide a sound investment return to our shareholders.” She added, “Our philosophy is to continue to manage the net interest margin without compromising asset quality or future earnings potential while continuing to offer quality products to our customers.”
 
 
 
 
 
 
Press Release
Page 2 of 4
October 21, 2014
 
Consolidated net income increased $614,000, or 15.5%, to $4.6 million for the quarter ended September 30, 2014, compared to $4.0 million for the same period in the prior year.  This increase was primarily the result of an increase in net interest income of $1.1 million and a decrease in net income attributable to noncontrolling interest of $182,000, partially offset by a decrease in noninterest income of $125,000 and increases in noninterest expense and provision for taxes of $207,000 and $362,000, respectively. The increase in net interest income for the period ended September 30, 2014 was primarily the result of a decrease in interest expense of $1.0 million, as well as an increase in interest income of $102,000.
 
Consolidated net income for the nine month period ended September 30, 2014, as compared to the nine month period ended September 30, 2013 increased $2.1 million, or 17.9%, to $13.6 million compared to $11.6 million for the same period in the prior year. This increase was primarily the result of an increase in net interest income of $3.6 million and decreases in provision for loan losses and net income attributable to noncontrolling interest of $165,000 and $368,000, respectively, partially offset by a decrease in noninterest income of $770,000 and increases in noninterest expense and provision for taxes of $442,000 and $857,000, respectively.  The increase in net interest income for the period ended September 30, 2014 was primarily the result of a decrease in interest expense of $3.4 million, as well as an increase in interest income of $162,000.
 
Noninterest income for the quarter ended September 30, 2014, as compared to September 30, 2013 decreased  by $125,000, or 7.73%, primarily due to decreases in income from real estate joint ventures and other income of $177,000, or 52.8%, and $89,000, or 34.5%,  partially offset by an increase in net realized gain on derivatives between the periods of $209,000, or 125.9%.  Noninterest expense for the quarter ended September 30, 2014, as compared to the quarter ended September 30, 2013, increased by $207,000, or 2.8%, primarily due to increases in compensation and employee benefits of $188,000.
 
Noninterest income for the nine month period ended September 30, 2014, as compared to the nine months ended September 30, 2013, decreased by $770,000, or 14.2%. The decrease was primarily the result of a decrease in net realized gain on the sale of securities of $237,000, as well as a decrease in the fair value of the Company’s interest rate caps of approximately $448,000 when compared to the nine month period ended September 30, 2013. Additionally the Company incurred impairment losses on investment securities of $193,000 for the nine months ended September 30, 2014.
 
Noninterest expense for the nine month period ended September 30, 2014, as compared to the nine months ended September 30, 2013, increased by $442,000, or 2.0%, primarily due to increases in compensation and employee benefits of $649,000, which was partially offset by decreases in premises and equipment, federal deposit insurance premiums, data processing and amortization of intangible asset of $79,000, $68,000, $38,000, and $45,000, respectively.
 
The Company’s total assets increased by $38.5 million, or 2.0%, during the nine month period ended September 30, 2014 to $1.95 billion. This increase resulted primarily from increases to cash and cash equivalents, securities available for sale, loans receivable, real estate acquired through foreclosure (REO) and securities receivable of $5.5 million, or 33.9%, $31.5 million, or 3.0%, $10.8 million, or 1.6%, $192,000, or 9.7% and $145,000, or 22.2%, respectively.  These increases were partially offset by decreases in FHLB Stock, premises and equipment, real estate held for investment, intangible assets, bank owned life insurance and prepaid expenses and other assets of  $2.2 million, or 14.3%, $499,000, or 3.8%, $2.4 million, or 30.9%, $90,000, or 70.9%,  $211,000, or 0.7%, and $4.3 million, or 32.7%, respectively. Total non-performing assets increased slightly to $10.9 million at September 30, 2014 compared to $10.8 million at December 31, 2013 and non-performing assets to total assets were 0.56% at September 30, 2014 and December 31, 2013.  The increase in non-performing assets of approximately $150,000, or 1.4%, was primarily the result of increases in REO, repossessed vehicles and troubled debt restructuring of $192,000, $62,000 and $69,000, respectively, partially offset by a decrease in nonperforming loans of $173,000.  The Company’s total liabilities increased $19.1 million, or 1.1%, to $1.74 billion at September 30, 2014 from $1.72 billion at December 31, 2013. This increase resulted primarily from increases to deposits and accrued expenses and other liabilities of $114.0 million, or 9.3%, and $1.5 million, or 8.6%, respectively, these increases were partially offset by decreases to borrowed funds, advance payments by borrowers for taxes and insurance and accounts payable for land development of $94.9 million, or 19.9%, $1.1 million, or 41.8%, and $361,000, or 26.1%, respectively.  Total stockholders’ equity increased $19.4 million, or 10.4%, to $205.2 million at September 30, 2014 from $185.8 million at December 31, 2013. The increase to stockholders’ equity was primarily the result of increases in additional paid in capital, retained earnings and accumulated other comprehensive income (AOCI) of $209,000, or 0.2%, $8.2 million, or 8.4%, and $9.5 million, or 204.8%, partially offset by decreases in decreases in treasury stock and unearned employee stock ownership plan of $834,000, or 4.8%, and $730,000, or 34.4%, respectively.  The increase to AOCI is a reflection of an increase of $8.9 million in unrealized gain on securities as a result of a decrease of approximately 54 basis points in the rate on ten year Treasury securities for the nine months ended September 30, 2014.   Average stockholders’ equity to average assets was 10.23%, and book value per share was $11.53 at September 30, 2014 compared to 9.96% and $10.48, respectively, at December 31, 2013.
 
 
 
 
Press Release
Page 3 of 4
October 21, 2014
 
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 website, 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 website.
 
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 21, 2014
 
 
ESB FINANCIAL CORPORATION AND SUBSIDIARIES
  
Financial Highlights
  
(Dollars in Thousands - Except Per Share Amounts)
(unaudited)
  
 
                         
OPERATIONS DATA:
                        
   
Three Months
    
Nine Months
  
   
Ended September 30,
    
Ended September 30,
  
   
2014
    
2013
    
2014
    
2013
  
                         
Interest income
   $ 16,180     $ 16,078     $ 48,674     $ 48,512  
Interest expense
     4,222       5,246       13,477       16,915  
                                 
Net interest income
     11,958       10,832       35,197       31,597  
Provision for loan losses
     75       75       135       300  
Net interest income after provision for
                                
loan losses
     11,883       10,757       35,062       31,297  
Noninterest income
     1,492       1,617       4,657       5,427  
Noninterest expense
     7,707       7,500       22,609       22,167  
Income before provision
                                
for income taxes
     5,668       4,874       17,110       14,557  
Provision for income taxes
     1,125       763       3,387       2,530  
                                 
Net income
     4,543       4,111       13,723       12,027  
Less: Net (loss) income attributable to noncontrolling interest
     (42 )     140       98       466  
Net income attributable to ESB Financial Corporation
   $ 4,585     $ 3,971     $ 13,625     $ 11,561  
                                 
                                 
Net income per share:
                                
Basic
   $ 0.26     $ 0.23     $ 0.77     $ 0.67  
Diluted
   $ 0.26     $ 0.23     $ 0.77     $ 0.66  
                                 
Net interest margin
     2.85 %     2.69 %     2.80 %     2.62 %
Annualized return on average assets
     0.94 %     0.84 %     0.93 %     0.81 %
Annualized return on average equity
     8.97 %     8.69 %     9.11 %     8.10 %
                                 
                                 
FINANCIAL CONDITION DATA:
                                
                   
As of:
          
                   
09/30/14
    
12/31/13
  
                                 
Total assets
                   $ 1,945,398     $ 1,906,917  
Cash and cash equivalents
                     21,714       16,214  
Total investment securities
                     1,094,549       1,063,016  
Loans receivable, net
                     706,469       695,636  
Customer deposits
                     1,336,747       1,222,767  
Borrowed funds (includes subordinated debt)
                     382,336       477,227  
Stockholders' equity
                     205,236       185,843  
Book value per share
                   $ 11.53     $ 10.48  
                                 
Average equity to average assets
                     10.23 %     9.96 %
Allowance for loan losses to total loans
                     0.93 %     0.95 %
Non-performing assets to total assets
                     0.56 %     0.56 %
Non-performing loans to total loans
                     1.19 %     1.22 %