Essa Bancorp Inc. Annual Report 2016

FY2016 Annual Report · Essa Bancorp Inc.

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Fellow Shareholders:

It is a rare privilege for any company to celebrate 100 years of operation.
In November 2016, ESSA Bancorp, Inc. marked the centennial of East
Stroudsburg Building & Loan Association opening its doors to the community.
Our executive team was at the Nasdaq Stock Market on November 16, 2016
to ring the closing bell to celebrate this milestone. It was nearly a decade
earlier that we rang the Nasdaq bell in April 2007 to mark ESSA Bancorp, Inc.
becoming a publicly traded company.

During the past several years, the Company completed acquisitions that
have enabled ESSA to greatly expand its market scope. From its legacy core
market in the Poconos, the Company has expanded into the Lehigh Valley,
Scranton/Wilkes-Barre, and suburban Philadelphia markets. The acquisition
of Eagle National Bank (“ENB”), a business-focused institution serving
suburban Philadelphia, closed early in fi scal 2016 and has been fully
integrated into ESSA’s operations.

Gary S. Olson, President and CEO

In 2016, we focused on solidifying our gains and market position following
four years of acquisitions. Our goals included generating quality earnings from a larger
franchise through loan growth while maintaining asset quality, taking advantage of our
opportunities by making selective investments in people and operations, positioning for
continued growth, and generating value for shareholders.

In the fi scal year ended September 30, 2016, ESSA Bancorp reported net income of $7.7
million or $0.73 per diluted share, compared to $9.8 million or $0.93 per diluted share in
fi scal 2015. The Company closed the year with $1.77 billion in assets, $1.22 billion in net
loans, and deposits of $1.21 billion. The year-over-year decline in earnings refl ected the
impact of a prolonged and fl attening yield curve. As a result, our net interest margin was
reduced by 7 basis points to 2.89% from 2.96% in fi scal 2015.

Even as we committed a portion of revenue to positioning for the future, we were pleased
to deliver increased value to shareholders. Total stockholders’ equity rose to $176.3 million
in fi scal 2016 from $171.3 million a year earlier. Retained earnings increased to $87.6 million
from $83.7 million, and tangible book value per share increased to $14.05 compared with
$14.03 a year earlier.

We also provided value to shareholders by paying quarterly cash dividends. Our fourth
quarter 2016 dividend represented the 35th consecutive quarterly cash dividend paid
by ESSA to its shareholders.

Earnings reﬂ ected a year-over-year $4.2 million rise
in total interest income to a Company record
$58.4 million in ﬁ scal 2016.

FINANCIAL PERFORMANCE
REFLECTS GROWTH,
INVESTMENT

Earnings refl ected a year-over-year $4.2
million rise in total interest income to a
Company record $58.4 million in fi scal 2016
from $54.2 million a year earlier. Diligent
interest expense management and growth
in low-cost core demand deposits to 58% of
total deposits from 46% of total deposits the
year before contributed to relatively slower
expansion of total interest expense, which
was $11.4 million in fi scal 2016 compared
with $10.4 million in fi scal 2015.

Net interest income increased to $46.9
million in fi scal 2016 from $43.8 million
in fi scal 2015. We were pleased that
despite continuing pressure on margins,
a low-interest rate environment, and stable
but soft economic conditions throughout
our markets, we grew net interest income
through a combination of greater total
interest income and careful interest
rate management. Noninterest income
increased by $887 thousand from fi scal
2015, primarily refl ecting increased
fee income and gains from opportunistic
investment portfolio management.

We were pleased that the Company’s
interest income growth refl ected the
positives resulting from loans acquired in
the ENB transaction, and the record $275
million in loans booked during fi scal 2016.
Particularly encouraging was the income
generated from expanded commercial
lending activity and solid performance
by indirect auto lending. Going forward,
these banking sectors provide our greatest
growth and revenue opportunities.

Following several years of steady year-
over-year earnings growth, our net income
in fi scal 2016 refl ected approximately
$6 million of higher noninterest expense
compared with the previous year. Some
of this increase refl ects higher occupancy
and equipment costs related to the ENB
acquisition. The increase also refl ected new
team members from the ENB acquisition,
and investment in new and current team
members who we expect to drive revenue.

A FOCUS ON EFFICIENCY,
PRODUCTIVITY

Noninterest expense refl ected both
investment in our future and expense
management. As in past years, we kept a
close eye on the productivity of every facility
and took advantage of the opportunity to
make operations more effi cient and eff ective.
The Company closed fi ve branch locations
in fi scal 2016, including one acquired in
the ENB transaction, consolidating their
operations into other ESSA locations, and
relocated a branch to improve visibility
in the market.

We believe physical locations are vitally
important, especially for a community
bank focused on service, and we are
always looking for the opportunity to
maximize the productivity and value of our
branches. Technology has supported branch
effi ciency through enhanced processing
capabilities and communication between
locations and throughout our operation.
Electronic banking services and business
online banking, increasingly used by
customers for many transactions, have
enabled us to trim some facilities and still
provide excellent customer support.

NOVEMBER 1, 1916

ESSA Bank & Trust founded
by John Gish and other
local businessmen at
93 Crystal Street in
East Stroudsburg
(above)

1933
Total assets reach
$250,000

1941
Company name becomes
East Stroudsburg Savings,
Building & Loan Association

1949
Total assets reach $1 million

1956

Board minutes with John Gish’s
original signature

1966
ESSA celebrates its 50th anniversary;
Company moves to new headquarters at
75 Washington Street in East Stroudsburg
(below)

In 2016, we enhanced our electronic
banking capabilities, particularly for
business customers; expanded our scope
of web-based banking services; and
introduced a new and robust website.
Of course, security remains a top priority.
Staying current with the latest encryption,
anti-hacking, and system monitoring
capabilities is critical.

reinforce our brand and the message of
Banking Confi dently with ESSA. Conveying
that message to the community is vitally
important as we compete for customers
and credits. Positioning ESSA as the premier
resource for fi nancial solutions, service,
and support is an important component
in making our case for being a one-stop
resource for customers.

BALANCE SHEET REFLECTS
GROWTH, QUALITY

Loans receivable, net of allowance for loan
losses, were $1.22 billion at September 30,
2016 compared with $1.10 billion at
September 30, 2015. Loan growth primarily
refl ected the acquisition of ENB, and

took place halfway through the fi scal year.
ESSA’s commercial real estate portfolio
increased to $288.4 million at fi scal year-end
2016 from $200.0 million a year earlier, while
commercial and industrial loans increased
to $40.0 million at fi scal year-end 2016 from
$34.3 million the previous year.

Some of our production gains in commercial
lending were off set by customer payoff s of
loans. We are confi dent that most of these
were not because customers went elsewhere
to borrow, but because they pulled back
on plans to deploy more capital in their
businesses. This refl ects the continuing
mood of caution throughout the business
community. We believe that steady
economic improvement in our markets;

Facilities, systems, and superior products are
supporting our culture of service delivered
by an experienced, dedicated team of
bankers. Fiscal 2016 expenses refl ect the
investment in proven performers, both new
hires and those already with the Company.
The success of our commercial banking
teams in our served markets, particularly in
the Lehigh Valley, drove the decision to
expand our commercial banking team.

During the year, six experienced commercial
banking experts joined the ESSA team,
enhancing our capabilities in lending,
relationship management, small business
lending, loan portfolio management,
and corporate cash management services.
In July 2016, we welcomed Stephen H.
Patterson, a 30-year veteran of the banking
industry with a strong background in
commercial lending, to lead ESSA’s
consumer and commercial initiatives as
Senior Vice President and Chief Lending
Offi cer. This newly created position at ESSA
refl ects the importance we place on
building a strong, coordinated lending
outreach across all markets. We also
expanded our indirect auto lending team,
and gave increased responsibility to several
top-performing individuals in commercial

and indirect auto lending.

The Company increased spending

on advertising and marketing to

We continue to build on a tradition of leadership by
offering superior products and services and providing
integrated ﬁ nancial solutions to customers.

expansion of the Company’s indirect auto
lending business, which increased 19%
to $193.1 million at September 30, 2016
from $162.2 million at September 30, 2015.
Residential mortgage loans declined
year-over-year as the housing market
throughout our markets continued to
refl ect softness in demand and pricing.

Commercial loan growth partially refl ected
the addition of loans from organic growth
and the ENB acquisition: ESSA closed a
record $102.5 million of commercial real
estate and commercial and industrial loans
during the year. This only partially refl ected
the production power of an expanded
commercial lending team, much of which

potential changes to the corporate tax
structure; and the hard work and dedication
of our banking team to identify new
opportunities in business banking, indirect
auto lending, and retail lending will support
overall growth.

Commercial lending opens the door to
our broad array of business products and
services. We remain focused on building
and expanding relationships with our
business clients via new deposits, fee-based
accounts such as treasury management and
merchant services, investment services,
and advisory services such as employee
benefi ts consulting and management.
ESSA’s strength is exceeding the customized

personal service expected of a community
bank and off ering the robust products and
capabilities of a larger institution.

As we pursue growth, maintaining the
quality of our loan portfolio is paramount.
Through prudent asset management
practices and disciplined risk management
underwriting practices in retail, consumer,
and commercial lending, we maintained
low ratios of nonperforming assets and net
loan charge-off s—consistent with previous
years. Nonperforming assets were 1.24% of
total assets at September 30, 2016 and net
charge-off s as a percent of total average
loans were 0.20% in fi scal 2016. Sound asset
quality has enabled us to maximize the
value of the revenue we generate.

The Company’s value also refl ected its
capital strength, including capital ratios that
exceeded accepted regulatory standards for
a well-capitalized institution. The Company’s
tangible equity to tangible assets ratio was
9.11% at September 30, 2016.

OUTLOOK

The coming year off ers the opportunity to
demonstrate value to all of our constituents.
We continue to build on a tradition of
leadership by off ering superior products
and services and providing integrated
fi nancial solutions to customers. We believe
we have developed the products and built
a team capable of delivering results that
will put us on track for earnings growth.

Entering the new fi scal year, we face the
challenges of margin pressure, low interest
rates, and an optimistic but cautious attitude
among consumers and businesses. The
potential for some relief on the interest rate
front and possible changes to the corporate
tax structure would be welcome, but the key

to success lies squarely with our ability to
grow market share, earn new customers,
and retain quality credits. We welcome that
opportunity, and we fi rmly believe in the
ability of our team to generate results.

From its modest beginnings in East
Stroudsburg, ESSA Bank & Trust has grown
to a $1.77 billion asset institution, ranking
ESSA Bancorp by asset size among the top
15 publicly traded fi nancial institutions
based in Pennsylvania. During the past
several years, we have spoken about
transformation, and ESSA has completed
the transformation from a retail-focused
thrift serving one market to a commercial
and retail savings bank providing lending,
deposit, brokerage, insurance, employee
benefi t, and asset management and trust
services throughout Eastern Pennsylvania.
Through the years, our guiding principles
have remained steadfast: succeeding
through safe, sound, and stable operation;
maintaining uncompromising dedication
to customer satisfaction; hiring, retaining,
and recognizing talented employees;
building the Company’s value; and giving
back to the community through charitable,
civic, and service contributions.

We appreciate the loyalty and support
of you, our valued shareholders. We are
committed to work diligently alongside
our directors and banking professionals as
stewards of your investment in ESSA Bancorp.

Sincerely,

Gary S. Olson, President and CEO

1970
ESSA merges with Commonwealth
Building & Loan Association

1971
ESSA merges with Keystone Building
& Loan Association; Company name
becomes East Stroudsburg Savings
Association; total assets reach $20 million

1978
First branch offi ce opens inside the
Stroud Mall in Stroudsburg

1983-1997
Locations added in Brodheadsville,
Stroudsburg, Mount Pocono,
Marshalls Creek,
Tannersville (Weis
Markets), and Bushkill

1984
Total assets reach
$100 million

1985
Corporate headquarters move to
744 Main Street in Stroudsburg (above)

1986
Annual net income reaches $1 million

Consolidated Financial Highlights

The following information is derived from the audited Consolidated Financial Statements of ESSA Bancorp, Inc. For additional information,
reference is made to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated
Financial Statements of ESSA Bancorp, Inc. and related notes included in Form 10-K as fi led with the Securities and Exchange Commission.

Selected Balance Sheet Data (Years ended September 30; data in thousands)

2016

2015

2014

2013

2012

Total assets

$1,772,479

$1,606,544

$1,574,815

$1,372,315

$1,418,786

Investment securities:
Available for sale

Loans, net

Deposits

Borrowed funds

Equity

390,410

1,219,213

1,214,820

360,061

176,344

379,407

383,078

315,622

329,585

1,102,118

1,058,267

928,230

950,355

1,096,754

1,133,889

1,041,059

995,634

320,440

259,320

152,260

234,741

171,280

167,309

166,446

175,411

Selected Operations Data (Years ended September 30; data in thousands)

Net interest income

Provisions for loan
losses

Net interest income
after provisions for
loan losses

Noninterest income

Noninterest expense

Income tax expense

Net income

Earnings per share:

Basic

Diluted

2016

$46,935

2,550

44,385

8,783

42,858

2,583

$7,727

$0.74

$0.73

2015

2014

2013

2012

$43,789

$40,149

$39,845

$29,068

2,075

2,350

3,750

2,550

41,714

37,799

36,095

26,518

7,896

7,407

8,024

6,735

36,865

33,811

32,462

33,005

2,954

2,891

2,834

$9,791

$8,504

$8,823

$0.94

$0.93

$0.79

$0.76

Selected Other Data (Years ended September 30)

Return on average assets

Return on average equity

Interest rate spread(1)

Net interest margin(2)

Net charge-offs as a
percent of total loans

Tier 1 core capital (to
adjusted tangible assets)

2016

0.45%

4.40%

2.81%

2.89%

0.20%

8.76%

2015

0.62%

5.68%

2.89%

2.96%

2014

0.59%

5.01%

2.89%

2.97%

2013

0.64%

5.12%

2.97%

3.08%

0.16%

0.17%

0.32%

0.36%

10.03%

10.04%

11.03%

11.08%

(1) The interest rate spread represents the diff erence between the weighted-average yield on a fully tax-equivalent basis on interest-earning assets and
the weighted-average cost of interest-bearing liabilities for the year.

(2) The net interest margin represents net interest income on a fully tax-equivalent basis as a percent of average interest-earning assets for the year.

$215

$0.02

2012

0.02%

0.13%

2.42%

2.65%

Stock Price & Market Capitalization

E
C
R
P

K
C
O
T
S

$21.00

$18.00

$15.00

$12.00

$9.00

$190,000,000

$170,000,000

$150,000,000

$130,000,000

$110,000,000

N
O

I
T
A
Z
I
L
A
T
I

P
A
C

T
E
K
R
A
M

2012

2013

2014

2015

2016

(Years ended September 30)

Dividends per Share

Earnings per Share (Diluted)

$0.50

$0.40

$0.30

$0.20

$0.10

$0.34 $0.36

$0.26

$0.20 $0.20

2012 2013 2014

2015 2016

(Years ended September 30)

$1.00

$0.80

$0.60

$0.40

$0.20

Tangible Book Value (Per Share)

$12.99

$13.34

$12.35

$14.03

$14.05

$15

$12

2012

2013

2014

2015

2016

(Years ended September 30)

$0.93

$0.76

$0.79

$0.73

$0.02

2012 2013 2014

2015 2016

(Years ended September 30)

2003

1996
First Company website launched
at essabank.com

1998
Brodheadsville Weis Markets branch
opens; Asset Management & Trust Division
added; ESSA Foundation formed

1999-2001
Three additional Weis Market locations
open in East Stroudsburg, Stroudsburg,
and Pen Argyl

2000
Previous President and CEO W. Jack
Wallie retires; Gary Olson named new
President and CEO

2002
Blakeslee branch opens; ESSA introduces
internet banking

Construction of new corporate
headquarters in Stroudsburg completed;
total assets reach $500 million

2004
Company name changes to
ESSA Bank & Trust

Consolidated Financial Highlights (cont’d)

Net Income (in Thousands)

Net Interest Margin

$9,791

$8,823

$8,504

$7,727

$10,000

$8,000

$6,000

$4,000

$2,000

$215

2012 2013 2014

2015 2016

(Years ended September 30)

3.08% 2.97% 2.96% 2.89%

2.65%

2012 2013 2014

2015 2016

(Years ended September 30)

Return on Average Equity

Revenue* (in Thousands)

5.68%

5.12%

5.01%

4.40%

0.13%

2012 2013 2014

2015 2016

(Years ended September 30)

$80,000

$60,000

$40,000

$20,000

8
1
7
,
5
5
$

5
8
6
,
1
5
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9
6
8
,
7
4
$

6
5
5
,
7
4
$

3
0
8
,
5
3
$

2012 2013 2014

2015 2016

(Years ended September 30)

*Net interest income plus noninterest income.

Deposits (in Thousands)

Stockholders’ Equity (in Thousands)

$1,500,000

$1,200,000

$900,000

$600,000

$300,000

0
2
8
,
4
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2
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$200,000

$160,000

$120,000

$80,000

$40,000

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2012 2013 2014

2015 2016

(Years ended September 30)

2012 2013 2014

2015 2016

(Years ended September 30)

2006
ESSA Bancorp, Inc., the holding company
for ESSA Bank & Trust, formed

2007

Shares of ESSA Bancorp’s
common stock begin
trading on the Nasdaq
Stock Market;
Tannersville branch
opens

Total Assets (in Thousands)

$2,000,000

$1,600,000

$1,200,000

$800,000

$400,000

9
7
4
,
2
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2012 2013 2014

2015 2016

(Years ended September 30)

2008
Total assets reach $1 billion

2010
Branches open in Mountainhome,
Bethlehem (Weis Markets), Allentown
(Weis Markets), and Schnecksville
(Weis Markets)

2011
Lehigh Valley expansion continues
with the opening of Bethlehem office;
ESSA Advisory Services formed

2012
ESSA acquires First Star Bancorp,
Inc., adding nine branches throughout
the Lehigh Valley (Bethlehem branch
shown below); total assets reach
$1.5 billion

Total Loans (in Thousands)

$1,400,000

$1,200,000

$900,000

$600,000

$300,000

9
6
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,
8
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2012 2013 2014

2015 2016

(Years ended September 30)

NPLs & Charge-Offs

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2012

2013

2014

2015

2016

(Years ended September 30)

0.5%

0.4%

0.3%

0.2%

0.1%

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A

Executive Personnel

BOARD OF DIRECTORS & GENERAL COUNSEL

William A. Viechnicki, D.D.S.
Chairman of the Board
Orthodontist

Robert C. Selig, Jr.
Vice Chairman of the Board
President – Selig Construction Company

Joseph S. Durkin
Executive Vice President – Reilly Associates

Frederick E. Kutteroff
President – Keystone Savings Bank (retired)

John E. Burrus
Director Emeritus

Timothy S. Fallon
CEO – PBS 39

Christine D. Gordon, Esq.
Deputy Chief Compliance Offi cer –
Olympus Corporation of the Americas

Gary S. Olson
President & CEO – ESSA Bank & Trust

Brian T. Regan, CPA
Shareholder – Regan, Levin, Bloss,
Brown & Savchak, P.C.

Daniel J. Henning
President – A.C. Henning Enterprises, Inc.

Elizabeth Bensinger Weekes, Esq.
Partner – Bensinger & Weekes, PA

John S. Schoonover, Jr.
Director Emeritus

William P. Douglass
Director Emeritus

James V. Fareri, Esq.
General Counsel

Gary S. Olson
President & CEO

Allan A. Muto
Executive Vice President & CFO

Charles D. Hangen
Senior Vice President & COO

ESSA Bancorp, Inc.
200 Palmer Street
Stroudsburg, PA 18360

Mailing Address
P.O. Box L
Stroudsburg, PA 18360

OFFICERS

Stephen H. Patterson
Senior Vice President & CLO

Thomas J. Grayuski
Vice President, Human Resources Division

Diane K. Reimer
Senior Vice President,
Administrative/Operations Division

V. Gail Bryant
Senior Vice President,
Retail Banking Division

James R. Gillen
Vice President, Strategic Planning

Suzie T. Farley
Vice President, Corporate Secretary,
Investor & Community Relations

CORPORATE HEADQUARTERS

Auditors
S.R. Snodgrass, P.C.
2100 Corporate Drive, Suite 400
Wexford, PA 15090

General Counsel
Newman, Williams, Mishkin,
Corveleyn, Wolfe & Fareri, P.C.
712 Monroe Street
Stroudsburg, PA 18360

100 YEARS OF SERVICE,
GROWTH, AND INNOVATION

ESSA Bank & Trust was established in 1916
when John Gish and other local businessmen
founded the East Stroudsburg Building &
Loan Association. In 1941 the Company
was renamed the East Stroudsburg Savings,
Building & Loan Association and subsequently
changed again in 1971 to East Stroudsburg
Savings Association after the acquisition
of two local thrifts, Commonwealth Building
& Loan Association and Keystone Building &
Loan Association. ESSA operated with one
office until 1978, when its first branch office
opened in the Stroud Mall. For decades, most
of ESSA’s business was tied to mortgages,
initially focusing on loans for primary
residences, then adding loans for vacation
homes. In the 1970s and 1980s Monroe
County became one of the fastest-growing
counties in Pennsylvania, and hence, the
demand for mortgages fueled ESSA’s growth.

Responding to this growth, ESSA expanded
its capabilities as a hometown bank. From
1983 through 2002, ESSA opened branch
locations throughout Monroe County, grew
its employee base, and expanded its physical
presence and delivery channels to include
in-store branches, ATMs, and telephone and
internet banking. Products and services grew
as well to include checking, money market
accounts, IRA’s, and home equity loans.

In 1998, in accordance with our Guiding
Principles, the ESSA Foundation (later
renamed the ESSA Bank & Trust Foundation)
was formed to fund the needs of civic and
charitable organizations in Monroe County.
That year, ESSA also added its Asset
Management & Trust Division. In 2003,
the Company completed construction
of its new corporate headquarters in
downtown Stroudsburg, and reached
a milestone $500 million in assets.

Early in the new millennium, ESSA began to
offer business banking products and services.
This led to a more focused effort on business
banking which required additional resources.
To sustain this growth, ESSA Bank & Trust
converted from a mutual to a publicly traded
company in 2007. The IPO raised $160 million
in capital with proceeds leveraged to fund
balance sheet growth, acquire other banks/
branches, fund our charitable foundation
and employee ESOP plan, and other
general purposes.

Assets topped $1 billion in 2009, and in
the next three years ESSA added business
banking capabilities and a variety of financial
products and services, including employee
benefits and insurance counseling through
ESSA Advisory Services, cash management,
and electronic banking services. In 2012, ESSA
expanded its Lehigh Valley presence with the
acquisition of First Star Bancorp, Inc.

With the 2014 acquisition of Franklin Security
Bancorp, Inc., ESSA entered the Scranton/
Wilkes-Barre market, expanded its commercial
banking capabilities, and entered the indirect
auto lending business. Also in 2014, ESSA
purchased deposits, loans, and a branch
facility from FNCB.

In the first quarter of fiscal 2016, ESSA closed
its acquisition of Eagle National Bancorp.
This acquisition further increased ESSA’s
commercial lending portfolio and gave
ESSA an entry into the suburban
Philadelphia market.

With locations in eight counties and clients
throughout Eastern Pennsylvania, ESSA’s
geographic market coverage and broad
range of financial, investment, and insurance
products represents a long and prosperous
journey. As markets and opportunities have
grown and changed, so has ESSA, positioning
the Company for an exciting future.

2014
ESSA purchases the deposits, loans,
and branch facility in Marshalls Creek
from First National Community Bank

ESSA acquires Franklin Security
Bancorp, Inc., with two
branches serving
Scranton (shown)
and Wilkes-Barre

2015
ESSA acquires Eagle National Bancorp,
Inc., adding five branches in the western
suburbs of Philadelphia; total assets
reach $1.8 billion

2016
ESSA opens a Philadelphia regional office
in Plymouth Meeting

NOVEMBER 1, 2016
ESSA Bank & Trust celebrates its
100th anniversary

ESSA rings the closing bell at the Nasdaq
Stock Market on November 16, 2016

ESSA Locations by Region

1. Corporate Center
200 Palmer Street
P.O. Box L
Stroudsburg, PA 18360

380

611

191

115

209

191

209

611

512

191

309

115

309

476

380

191

611

940

POCONOS
3. Brodheadsville
1881 Route 209
Brodheadsville, PA 18322

4. Brodheadsville
Weis Markets
924 Weir Lake Road
Brodheadsville, PA 18322

5. East Stroudsburg –
Eagle Valley
Weis Markets
695 North Courtland Street
East Stroudsburg, PA 18301

6. East Stroudsburg
75 Washington Street
East Stroudsburg, PA 18301

7. Marshalls Creek
5120 Milford Road
East Stroudsburg, PA 18302

8. Stroud Township
Weis Markets
1070 North Ninth Street
Stroudsburg, PA 18360

9. Stroudsburg
744 Main Street
Stroudsburg, PA 18360

10. Tannersville
2826 Route 611
Tannersville, PA 18372

SCRANTON/WILKES-BARRE
11. Blakeslee
249 Route 940
Blakeslee, PA 18610

14. Scranton
300 Mulberry Street
Scranton, PA 18503

15. Wilkes-Barre
1065 Highway 315
Wilkes-Barre, PA 18702

12. Mount Pocono
Weis Markets
3236 Route 940
Mount Pocono, PA 18344

13. Mountainhome
975 Route 390
Cresco, PA 18326

2. Philadelphia Regional Office
450 Plymouth Road
Suite 101
Plymouth Meeting, PA 19462

611

422

476

276

202

611

PHILADELPHIA REGION
24. Devon
227 West Lancaster Avenue
Devon, PA 19333

26. Lansdowne
48 West Marshall Road
Lansdowne, PA 19050

25. Haverford
354 West Lancaster Avenue
Haverford, PA 19041

27. Upper Darby
8045 West Chester Pike
Upper Darby, PA 19082

476

309

100

209

LEHIGH VALLEY
16. Alburtis
11 North Main Street
Alburtis, PA 18011

17. Allentown
471 West Wabash Street
Allentown, PA 18103

18. Bath
358 South Walnut Street
Bath, PA 18014

20. Nazareth
14 South Main Street
Nazareth, PA 18064

21. New Tripoli
6302 Route 309
New Tripoli, PA 18066

22. Palmer
2415 Park Avenue
Easton, PA 18045

19. Bethlehem
418 West Broad Street
Bethlehem, PA 18018

23. Wind Gap
1430 Jacobsburg Road
Wind Gap, PA 18091

ADDITIONAL
SERVICES

Asset Management & Trust Services
744 Main Street, Suite 3A
Stroudsburg, PA 18360

ESSA Advisory Services
414 West Broad Street
Bethlehem, PA 18018

ESSA Investment Services*
746 Main Street
Stroudsburg, PA 18360

*A Cetera Investment Services, LLC Program

Mission Statement

ESSA Bank & Trust will be the leading service-oriented

community fi nancial institution off ering a full

range of fi nancial products to Greater Eastern

OUR GUIDING PRINCIPLES

Pennsylvania area customers. We will ensure

There are fi ve Guiding Principles on which our

our long-term prosperity by providing

Mission Statement is based:

products and service in a manner

consistent with high standards of

quality, on a profi table basis, at the

fairest price, in order to create

the best possible value for our

We believe in long-term success, operating as a safe, sound,

and stable institution. Long-term success is dependent upon

profi ts, but never will profi t-seeking compromise our mission.

We believe in satisfying the wants and needs of our customers.

Satisfaction is dependent upon a continual improvement of our

service, products, systems, and operations.

customers. They will be delivered

We believe our employees are our most valuable asset. Our employees

through distribution systems

staff ed and supported by

customer-driven, friendly,

productive employees with

will be provided with a work environment that is “the best in town.”

We believe our decisions should enhance ESSA’s value. Enhanced value is

achieved through quality earnings, growth, and strong management practices.

We believe in supporting our community through employee volunteering

and charitable giving to improve the quality of life. The ESSA Bank & Trust

a high degree of integrity.

Foundation has been established to support this principle.

ESSA CODE OF ETHICS AND
CONFLICT OF INTEREST POLICY

No profession or industry has maintained higher standards of conduct nor provided

greater public service than the community banking industry.

The ESSA Bancorp, Inc. Board of Directors has approved an Insider Code of Ethics

and Confl ict of Interest policy. This policy provides Directors and employees with

specifi c guidance promoting honest and ethical conduct and deterring wrongdoing.

Our policy may be found on our website at essabank.com.

Corporate Information

STOCK LISTING
ESSA Bancorp, Inc. common stock is listed
on the NASDAQ Global MarketSM under the
symbol “ESSA.”

INTERNET INFORMATION
ESSA Bancorp, Inc. fi nancial reports and
information about the products and services
of its wholly owned subsidiary, ESSA Bank &
Trust, are available at essabank.com.

FINANCIAL INFORMATION
We are subject to the informational
requirements of the Securities Exchange
Act of 1934. Therefore, we fi le annual,
quarterly, and current reports as well as
proxy materials with the Securities and
Exchange Commission (SEC). You can
obtain copies of these and other fi lings,
including exhibits, electronically at the
SEC’s website at sec.gov or through the
ESSA website at essabank.com
by clicking on the Investor Relations link.
Copies of our Annual Report and Form
10-K may also be obtained by contacting
Investor Relations at (570) 422-0182 or
via email at sfarley@essabank.com.

CORPORATE GOVERNANCE
Information about our Board and its
committees and about corporate
governance at ESSA is available in the
Governance Documents section of the
Investor Relations link on the ESSA
website at essabank.com. Shareholders
who would like to request printed copies
of the Code of Ethics or the charters
of our Board’s Nominating and Corporate
Governance, Audit, and Compensation
committees (all of which are posted on
the ESSA website through the Investor
Relations link) may do so by sending
their requests in writing to Suzie Farley,
Vice President, Corporate Secretary,
Investor and Community Relations, at
corporate headquarters at P.O. Box L,
Stroudsburg, PA 18360.

INQUIRIES
Individual investors should contact Suzie
Farley, Vice President, Corporate Secretary,
Investor and Community Relations,
at (570) 422-0182 or via email at
sfarley@essabank.com.

Analysts and institutional investors
should contact Allan Muto, Executive

Vice President and CFO, at (570) 422-0181
or via email at amuto@essabank.com.

News media representatives and others
seeking general information should contact
James Gillen, Vice President, Strategic
Planning, at (570) 420-5189 or via email
at jgillen@essabank.com.

ANNUAL SHAREHOLDERS’ MEETING
All shareholders are invited to attend
the ESSA Bancorp, Inc. annual meeting
on Thursday, March 2, 2017, at 10 a.m.
The meeting will be held at:
Northampton Community College,
Monroe Campus
2411 Route 715
Tannersville, PA 18372

REGISTRAR & TRANSFER AGENT
Computershare, Inc.
P.O. Box 30170
College Station, TX 77842
800-368-5948

SPECIAL COUNSEL
Luse Gorman, PC
5335 Wisconsin Avenue, N.W., Suite 780
Washington, DC 20015

FORWARD-LOOKING STATEMENTS
Certain statements contained in this Annual Report are “forward-looking statements” within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identiﬁed by reference to a future
period or periods, or by use of forward-looking terminology, such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,”
“project,” and other similar words and expressions. Our forward-looking statements are subject to numerous risks and uncertainties, including,
but not limited to, those related to the economic environment, particularly in the market areas in which the Company operates, competitive
products and pricing, ﬁscal and monetary policies of the U.S. Government, changes in government regulations aff ecting ﬁnancial institutions,
legal developments, technological advances, changes in prevailing interest rates, acquisitions and the integration of acquired businesses,
credit risk management, asset-liability management, the ﬁnancial and securities markets, and the availability of and costs associated with
sources of liquidity.

Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. The Company wishes
to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company
wishes to advise readers that the factors listed above could aff ect the Company’s ﬁnancial performance and could cause the Company’s
actual results for future periods to diff er materially from any opinions or statements expressed with respect to future periods in any current
statements. The Company does not undertake and speciﬁcally declines any obligation to publicly release the result of any revisions, which
may be made to any forward-looking statements to reﬂect events or circumstances after the date of such statements or to reﬂect the
occurrence of anticipated or unanticipated events. We provide greater detail regarding these factors in our Form 10-K for the year ended
September 30, 2016, including the Risk Factors section. Our forward-looking statements may also be subject to other risks and uncertainties,
including those discussed elsewhere in this Annual Report or in our ﬁlings with the SEC, accessible on the SEC’s website at sec.gov or
through the Investor Relations link on our corporate website at essabank.com.

Equal Opportunity Lender • Member FDIC

essabank.com