Essa Bancorp Inc.
Annual Report 2018

Plain-text annual report

The Path to Performance 2018 Annual Report ESSA Tower 6 branch and business center in downtown Allentown. Photo courtesy of City Center Allentown. Fellow Shareholders: In recent years, ESSA Bancorp, Inc. has embarked on a course to transform itself from a thrift operating primarily in Monroe County into a diversiÿed community bank with a commercial focus spanning a larger geography in Eastern Pennsylvania. This led us to acquiring three ÿnancial institutions in other markets over the past ÿve years. This past year we used our strategic planning process to continue our development toward becoming a high-performing diversiÿed community bank. The plan focused on regionalizing our banking teams, making operational enhancements to support productivity, analyzing facilities and business lines to maximize e°ciency, and implementing new technologies to support decision-making. Ultimately, building shareholder value through improved earnings is our foremost goal. In ÿscal 2018, ESSA’s ÿnancial results supported our belief that our strategy and actions have set us on a path to better performance. If we look at income before taxes, the Company had a much stronger year in ÿscal 2018 compared to ÿscal 2017. Income before income taxes increased 36.6% to $12.2 million for the year ended September 30, 2018 compared to $8.9 million for the year ended September 30, 2017. Net income for the year ended September 30, 2018 was negatively impacted by a one-time charge to income tax expense of $3.7 million recorded in the Company’s ÿrst ÿscal quarter. This was due to the reduction in the carrying value of the Company’s deferred tax assets, which resulted from the reduction in the federal corporate income tax rate under the Tax Cuts and Jobs Act of 2017. Our net income decreased from $7.3 million, or $0.69 per diluted share for ÿscal 2017 to $6.5 million, or $0.60 per diluted share for the year ended September 30, 2018. Again, if we eliminate income taxes from the year-over- year comparison, growth and increased e°ciencies were the primary drivers of the Company’s success during ÿscal 2018. Total loans originated during ÿscal 2018 were $433.6 million, a record year. Net loan growth of 5.5% was the primary reason our net interest income increased by $2.7 million or 6.0% in ÿscal 2018 compared to ÿscal 2017. The Company’s e°ciency ratio improved to 71.11% for ÿscal 2018 from 77.14% for ÿscal 2017 or by 7.8%. During the year ended September 30, 2018 the Company closed its remaining three supermarket branches, restructured several retail departments, sold two unused properties, and developed and implemented a cost accounting system with the goal of improving management’s analytical capabilities. As a result, total noninterest expense declined by $1.6 million or 3.8% for ÿscal 2018 compared to ÿscal 2017. Accelerating Interest Income Total interest income in ÿscal 2018 rose to $64.5 million from $58.3 million a year earlier, which directly re˛ected our emphasis on loan growth as the primary driver of revenue growth. Net interest income in ÿscal 2018 increased to $48.2 million, up 6.0% from $45.5 million in ÿscal 2017. Net interest income after provision for loan losses was $44.2 million in ÿscal 2018 compared to $42.2 million in ÿscal 2017. The net interest margin was 2.85% for the 12 months ended September 30, 2018 compared with 2.77% for the 12 months ended September 30, 2017. The net interest spread was 2.71% for the ÿscal year ended September 30, 2018 compared to a net interest rate spread of 2.69% for the ÿscal year ended September 20, 2017. 1 Asset Growth Led by Commercial Banking While the Company demonstrated a year-over-year 5.5% growth in net loans, total commercial loans (commercial and industrial, commercial real estate, and government) grew by 28%. Commercial loans increased to $539.4 million at September 30, 2018 compared to $420.5 million a year earlier. The Company’s loan portfolio composition re˛ected this growth, with all commercial loans comprising 41% of total loans in ÿscal 2018, compared to 34% in ÿscal 2017. Our progress toward moving the asset mix to a ratio of two-thirds commercial/ one-third consumer is consistent with our goal of becoming a diversiÿed community bank with a commercial focus. The key to commercial lending growth was reorganizing our bankers by regions. The commercial banking team focused on quality loan production, acquiring new customers, and strong client retention. Commercial real estate (CRE) activity led the way, with $416.6 million in loans at September 30, 2018, up 31% from $318.3 million at September 30, 2017. Commercial and industrial loans (C&I) increased to $49.5 million during the same period, up 12% from $44.1 million a year earlier. In ÿscal 2018, the Company produced $433.6 million in total loans, which was a Company-record number, and closed a record 293 commercial loans totaling $296 million. As we added new lending relationships and focused on retaining clients through superior service, our team has sought out opportunities to expand relationships with commercial clients, providing deposit products, a wide array of treasury management services, employee beneÿts, and investment capabilities. Going forward, we expect new analytical tools will support the goal of expanding relationships with commercial lending clients. Gary S. Olson, President & CEO We used our strategic planning process to continue our development toward becoming a high-performing diversifed community bank. 2 Asset Quality Maintaining asset quality through disciplined loan underwriting and credit quality standards is of critical importance to ESSA. Safe, stable operation is one of the guiding principles of our mission statement. As we continue to grow, ensuring the proÿtability and quality of assets provides assurance that our growth and risk appetite is sustainable. The performance of our loan portfolio in 2018 continued to re˛ect attention to quality, with nonperforming assets of $11.7 million, or 0.64% of total assets at September 30, 2018, improving from $15.7 million, or 0.88% of total assets at September 30, 2017. Net loan charge-o˝s were $1.7 million in ÿscal 2018, down from $3.0 million in ÿscal 2017. Based on continuing asset quality and prudent reserving, the allowance for loan losses to total loans at ÿscal year-end 2018 increased to 0.89% from 0.75% at ÿscal year-end 2017. Growing Core Deposits to Fund Lending An expanding base of core deposits (demand, savings and money market accounts) has been a critical component of our strategic plan, providing the most attractively priced source of funding for lending. These deposits comprised nearly 61% of total deposits at September 30, 2018, representing the Company’s highest-ever level of core deposits. Total deposits increased 5% in 2018 from a year earlier. Although deposit growth enabled us to reduce borrowings by $13 million in 2018, loan growth still required borrowed funds, which have become costlier as short-term interest rates have risen. The most e˝ective means for generating funds and maintaining sound margins on loans will be to keep growing the Company’s core demand deposits—a high priority in the coming year. We made further investments in human capital, creating a Retail Sales Manager position. This position will provide training and sales and service leadership. The primary focus will be to build core deposits, improve the customer experience, and drive more revenue through our 21-branch retail bank network. Operational Effciency, Accelerated Productivity Our strategic plan targeted improved operational e°ciency, focusing resources and expenditures on lines of business that provide the best opportunity to meet stringent goals for productivity and proÿtability. Early in ÿscal 2018, we completed an organizational realignment that has proven its value in supporting e°cient and productive operation, providing clear lines of reporting and more direct management of an expanded and geographically diverse banking team. We formalized our three operating regions: the Lehigh Valley region, Northern region (Poconos and Scranton/Wilkes-Barre), and Philadelphia region. Fiscal 2018 was the ÿrst full year of operation for this three-region structure organized under three new regional presidents. Managing compensation and employee beneÿt costs and overall operating expenses, new and more productive regional o°ces, and savings related to closing the Company’s remaining grocery store branch locations and winding down the indirect auto lending business all contributed to the reduction in total noninterest expense during ÿscal 2018 compared to ÿscal 2017. We anticipate further improvement with our continued focus on managing expenses. 3 The quality, skill, and dedication of employees is the most important driver of growth. Employee-related costs are, by far, the most signiÿcant part of the Company’s expenses. Organizational adjustments, a new reporting structure that mirrors our business activities, clear standards for job expectations, and compensation linked to performance are giving our team members clear direction, supporting a productive and satisfying work experience. Systems, Processes to Enhance Performance During the past year, the Company implemented several processes to enhance analysis and ÿnancial modeling that are improving our ability to analyze performance and maintain an optimal asset and liability mix. We continue to move ESSA’s balance sheet to be more consistent with a high-performing ÿnancial institution. Our new cost accounting system allows us access to ÿnancial data that helps management initiate strategic plans and validate the results of these plans along with other ongoing operations. We also implemented systems to utilize the extensive amounts of data we generate to better serve customers and identify product and service opportunities. Notable among our new capabilities is a sophisticated Marketing Customer Information File (MCIF) system that enables us to unlock the value of the vast amounts of data ESSA generates on a daily basis. As we access the capabilities of MCIF, we expect to gain a clearer understanding of customer activity, use of products and services, and opportunities to proactively o˝er speciÿc ÿnancial solutions to commercial and retail customers. We have already seen positive results from initial implementation, and look forward to taking full advantage of these systems and processes in 2019 and beyond. Path to Performance: 2019 Outlook We are enthusiastic about the gains made throughout ÿscal 2018. We believe the Company is well positioned to continue growing and improving in the coming year. We have set higher standards for ÿnancial performance in ÿscal 2019. Our focus on commercial banking will continue, and while we plan to continue appropriate investment in people, technology, and facilities, we will not lose our focus on serving customers as e°ciently as possible. We look forward to continuing our transformative path, delivering superior service and products to customers, serving the community, being a great place to work, and building the Company’s long-term value for shareholders. Sincerely, Sincerely, Gary S. Olson, President & CEO Gary S. Olson, President & CEO As we continue to grow, ensuring the proftability and quality of assets provides assurance that our growth and risk appetite is sustainable. 4 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 ÿled with the Securities and Exchange Commission. Selected Balance Sheet Data (Years ended September 30; data in thousands) 2018 2017 2016 2015 2014 Total assets $1,833,790 $1,785,218 $1,772,479 $1,606,544 $1,574,815 Investment securities: Available for sale Loans, net Deposits 371,438 390,452 390,410 379,407 383,078 1,305,071 1,236,681 1,219,213 1,102,118 1,058,267 1,336,855 1,274,861 1,214,820 1,096,754 1,133,889 Borrowed funds 298,496 311,614 360,061 320,440 259,320 Equity 179,186 182,727 176,344 171,280 167,309 Selected Operations Data (Years ended September 30; data in thousands) 2018 2017 2016 2015 2014 Net interest income $48,235 $45,519 $46,935 $43,789 $40,149 Provisions for loan losses 4,000 3,350 2,550 2,075 2,350 Net interest income after provisions for loan losses Noninterest income Noninterest expense Income before income tax expense 44,235 42,169 44,385 41,714 37,799 7,813 39,853 8,199 8,783 7,896 41,438 42,858 36,865 7,407 33,811 12,195 8,930 10,310 12,745 11,395 Income tax expense 5,664 1,591 2,583 2,954 2,891 Net income $6,531 $7,339 $7,727 $9,791 $8,504 Earnings per share: Basic Diluted $0.60 $0.60 $0.69 $0.69 $0.74 $0.73 $0.94 $0.93 $0.79 $0.79 Selected Other Data (Years ended September 30) Return on average assets Return on average equity Interest rate spread(1) Net interest margin(2) Non-performing assets as a percentage of total assets Tier 1 core capital (to adjusted tangible assets) 2018 0.36% 3.61% 2.71% 2.85% 2017 0.42% 4.11% 2.69% 2.77% 2016 0.45% 4.40% 2.81% 2.89% 2015 0.62% 5.68% 2.89% 2.96% 2014 0.59% 5.01% 2.89% 2.97% 0.64% 0.88% 1.24% 1.41% 1.58% 9.28% 9.19% 8.76% 10.03% 10.04% (1) The interest rate spread represents the difference 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. 5 Stock Price & Market Capitalization $24.00 $21.00 $18.00 E C R P I $15.00 K C O T S $12.00 $9.00 0 2014 2015 2016 2017 2018 (Years ended September 30) $210,000,000 $190,000,000 $170,000,000 $150,000,000 $130,000,000 $110,000,000 0 N O I T A Z I L A T I P A C T E K R A M Dividends per Share Earnings per Share (Diluted) $1.00 $0.80 $0.60 $0.40 $0.20 0 $0.93 $0.79 $0.73 $0.69 $0.60 2014 2015 2016 2017 2018 (Years ended September 30) $0.34 $0.36 $0.36 $0.36* $0.26 $0.50 $0.40 $0.30 $0.20 $0.10 0 2014 2015 2016 2017 2018 (Years ended September 30) *Increased to $0.40 1st Quarter 2019. Tangible Book Value (Per Share) $15 $12 $9 $6 $3 0 $14.03 $14.05 $14.41 $13.92 $13.34 2014 2015 2016 2017 2018 (Years ended September 30) 6 Consolidated Financial Highlights (cont’d) Net Income (in Thousands) Deposits (in Thousands) 1 9 7 , 9 $ 4 0 5 , 8 $ 7 2 7 , 7 $ 9 3 3 , 7 $ 1 3 5 , 6 $ $10,000 $8,000 $6,000 $4,000 $2,000 0 $1,500,000 $1,200,000 $900,000 $600,000 $300,000 0 1 6 8 , 4 7 2 , 1 $ 5 5 8 , 6 3 3 , 1 $ 0 2 8 , 4 1 2 , 1 $ 9 8 8 , 3 3 1 , 1 $ 4 5 7 , 6 9 0 , 1 $ 2014 2015 2016 2017 2018 (Years ended September 30) 2014 2015 2016 2017 2018 (Years ended September 30) Return on Average Equity Net Interest Margin 5.68% 5.01% 4.40% 4.11% 3.61% 8% 6% 4% 2% 0 5% 4% 3% 2% 1% 0 2.97% 2.96% 2.89% 2.77% 2.85% 2014 2015 2016 2017 2018 (Years ended September 30) 2014 2015 2016 2017 2018 (Years ended September 30) 7 Revenue* (in Thousands) $80,000 $60,000 $40,000 $20,000 0 5 8 6 , 1 5 $ 6 5 5 , 7 4 $ 8 1 7 , 5 5 $ 8 1 7 , 3 5 $ 8 4 0 , 6 5 $ 2014 2015 2016 2017 2018 (Years ended September 30) *Net interest income plus noninterest income. Stockholders’ Equity (in Thousands) $200,000 $160,000 $120,000 $80,000 $40,000 0 9 0 3 , 7 6 1 $ 0 8 2 , 1 7 1 $ 4 4 3 , 6 7 1 $ 7 2 7 , 2 8 1 $ 6 8 1 , 9 7 1 $ 2014 2015 2016 2017 2018 (Years ended September 30) 8 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 Timothy S. Fallon CEO – PBS 39 Christine D. Gordon, Esq. Deputy Chief Compliance O˜cer – Olympus Corporation of the Americas Daniel J. Henning President – A.C. Henning Enterprises, Inc. Philip H. Hosbach IV Vice President, Global Public A°airs for Vaccines – Sanoÿ Pasteur (retired) Frederick E. Kuttero˜ President – Keystone Savings Bank (retired) Gary S. Olson President & CEO – ESSA Bank & Trust Brian T. Regan, CPA Shareholder – Regan, Levin, Bloss, Brown & Savchak, P.C. Elizabeth Bensinger Weekes, Esq. Partner – Bensinger & Weekes, PA John E. Burrus Director Emeritus William P. Douglass Director Emeritus John S. Schoonover, Jr. Director Emeritus James V. Fareri, Esq. General Counsel OFFICERS Gary S. Olson President & CEO Allan A. Muto Executive Vice President & CFO Robert L. Selitto Vice President & Controller Charles D. Hangen Executive Vice President & COO Peter A. Gray Executive Vice President & CBO ESSA Bancorp, Inc. 200 Palmer Street Stroudsburg, PA 18360 Mailing Address P.O. Box L Stroudsburg, PA 18360 Diane K. Reimer Senior Vice President, Administrative/Operations Division Stephanie Le˜erson Corporate Secretary, Investor & Community Relations Thomas J. Grayuski Senior Vice President, Human Resources Division CORPORATE HEADQUARTERS Auditors S.R. Snodgrass, P.C. 2009 Mackenzie Way, Suite 340 Cranberry Township, PA16066 General Counsel Newman, Williams, Mishkin, Corveleyn, Wolfe & Fareri, P.C. 712 Monroe Street Stroudsburg, PA 18360 9 The Path to Performance 2017 OCT — — Implemented new cost accounting and proÿtability system Implemented MCIF system to better understand customer data — Rationalized our retail network and closed remaining supermarket branches DEC — Consolidated from four to three regions — Reorganized leadership team and lines of business to better serve customers 2018 JUL — Discontinued indirect auto lending and have exited that line of business — Authorized share repurchase program AUG — — Relocated Allentown branch and o°ce to Tower 6 in the Neighborhood Improvement Zone in downtown Allentown Reduced our overall corporate real estate to improve e°ciency Photo courtesy of City Center Allentown. 10 ESSA Locations by Region 1. Corporate Center 200 Palmer Street P.O. Box L Stroudsburg, PA 18360 11 191 84 309 11 12 81 309 115 476 380 191 611 10 402 209 191 6 8 33 5 7 1 9 940 80 115 4 209 191 80 NORTHERN REGION 4. Brodheadsville 1881 Route 209 Brodheadsville, PA 18322 5. East Stroudsburg 75 Washington Street East Stroudsburg, PA 18301 6. Marshalls Creek 5120 Milford Road East Stroudsburg, PA 18302 7. Stroudsburg 744 Main Street Stroudsburg, PA 18360 8. Tannersville 2826 Route 611 Tannersville, PA 18372 9. Blakeslee 249 Route 940 Blakeslee, PA 18610 10. Mountainhome 975 Route 390 Cresco, PA 18326 11. Scranton 300 Mulberry Street Scranton, PA 18503 12. Wilkes-Barre 1065 Highway 315 Wilkes-Barre, PA 18702 11 2. Lehigh Valley Regional O˜ce 190 Brodhead Road Suite 200 Bethlehem, PA 18017 3. Philadelphia Regional O˜ce 450 Plymouth Road Suite 101 Plymouth Meeting, PA 19462 20 33 17 611 19 512 15 2 22 16 14 78 611 422 476 3 276 276 202 21 76 1 22 24 23 13 1 476 476 309 18 78 100 13 LEHIGH VALLEY REGION PHILADELPHIA REGION 13. Alburtis 11 North Main Street Alburtis, PA 18011 17. Nazareth 14 South Main Street Nazareth, PA 18064 14. Allentown 600 Hamilton Street, Suite 100 Allentown, PA 18101 18. New Tripoli 6302 Route 309 New Tripoli, PA 18066 15. Bath 358 South Walnut Street Bath, PA 18014 16. Bethlehem 418 West Broad Street Bethlehem, PA 18018 19. Palmer 2415 Park Avenue Easton, PA 18045 20. Wind Gap 1430 Jacobsburg Road Wind Gap, PA 18091 21. Devon 227 West Lancaster Avenue Devon, PA 19333 23. Lansdowne 48 West Marshall Road Lansdowne, PA 19050 22. Haverford 354 West Lancaster Avenue Haverford, PA 19041 24. Upper Darby 8045 West Chester Pike Upper Darby, PA 19082 ADDITIONAL SERVICES Asset Management & Trust Services 744 Main Street, Suite 3A Stroudsburg, PA 18360 ESSA Advisory Services 190 Brodhead Road, Suite 200 Bethlehem, PA 18017 ESSA Investment Services* 746 Main Street Stroudsburg, PA 18360 *A Cetera Investment Services, LLC Program 12 OUR GUIDING PRINCIPLES There are ÿve Guiding Principles on which our Mission Statement is based: We believe in long-term success, operating as a safe, sound, and stable institution. Long-term success is dependent upon proÿts, but never will proÿt-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. We believe our employees are our most valuable asset. Our employees will be provided with a work environment which 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 Foundation has been established to support this principle. ESSA CODE OF ETHICS & CONFLICT OF INTEREST POLICY The ESSA Bancorp, Inc. Board of Directors has approved an Insider Code of Ethics and Con˛ict of Interest policy. This policy provides Directors and employees with speciÿc guidance promoting honest and ethical conduct and deterring wrongdoing. Our policy may be found on our website at essabank.com. Mission Statement ESSA Bank & Trust will be the leading service-oriented community ÿnancial institution o°ering a full range of ÿnancial products to greater Eastern Pennsylvania customers. We will ensure our long-term prosperity by providing products and service in a manner consistent with high standards of quality, on a proÿtable basis, at the fairest price, in order to create the best possible value for our customers. They will be delivered through distribution systems sta°ed and supported by customer-driven, friendly, productive employees with a high degree of integrity. 13 Corporate Information STOCK LISTING CORPORATE GOVERNANCE ESSA Bancorp, Inc. common stock is listed on the NASDAQ Global MarketSM under the symbol “ESSA.” INTERNET INFORMATION ESSA Bancorp, Inc. ÿnancial 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 ÿle 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 ÿlings, 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 sle˛erson@essabank.com. FORWARD-LOOKING STATEMENTS essabank.com . Shareholders who I nformation 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 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 Stephanie Le˝erson, Corporate Secretary, Investor and Community Relations, at corporate headquarters at P.O. Box L, Stroudsburg, PA 18360. INQUIRIES Individual investors should contact Stephanie Le˝erson, Corporate Secretary, Investor and Community Relations, at 570-422-0182 or via email at sle˛erson@essabank.com. News media representatives and others seeking general information should contact Peter A. Gray, Executive Vice President, CBO, at 570-422-0198 or via email at pgray@essabank.com. ANNUAL SHAREHOLDERS’ MEETING All eligible shareholders are invited to attend the ESSA Bancorp, Inc. annual meeting on Thursday, February 28, 2019, 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 505000 Louisville, KY 40233-5000 800-368-5948 computershare.com/investor Analysts and institutional investors should contact Allan Muto, Executive Vice President and CFO, at 570-422-0181 or via email at amuto@essabank.com. SPECIAL COUNSEL Luse Gorman, PC 5335 Wisconsin Avenue, N.W., Suite 780 Washington, DC 20015 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 identifed 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, fscal and monetary policies of the U.S. Government, changes in government regulations a˝ecting fnancial institutions, legal developments, technological advances, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the fnancial 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 does not undertake and specifcally declines any obligation to publicly release the result of any revisions, which may be made to any forward-looking statements to refect events or circumstances after the date of such statements or to refect the occurrence of anticipated or unanticipated events. The Company wishes to advise readers that the factors listed above could a˝ect the Company’s fnancial performance and could cause the Company’s actual results for future periods to di˝er materially from any opinions or statements expressed with respect to future periods in any current statements. We provide greater detail regarding these factors in our Form 10-K for the year ended September 30, 2018, 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 flings 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. 14 Equal Opportunity Lender • Member FDIC ©2019 ESSA Bancorp, Inc. essabank.com 

Continue reading text version or see original annual report in PDF format above