ESB Financial Corporation Announces Earnings for Fourth Quarter and 2005 Year End.ELLWOOD CITY Ellwood City, industrial borough (1990 pop. 8,894), Beaver and Lawrence counties, W central Pa., near the Ohio line; inc. 1892. It has many metal-product plants. Coal mines are in the area. , Pa. -- ESB (Enterprise Services Bus) A message broker that supports Web services. See message broker, messaging middleware and Web services. Financial Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ESBF), the parent company of ESB Bank, today announced earnings of $0.71 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share on net income of $9.18 million for the year ended December December: see month. 31, 2005, compared to earnings of $0.94 per diluted share on net income of $9.99 million for the year ended December 31, 2004. The Company's return on average assets and average equity were 0.52% and 7.16%, respectively, for the year ended December 31, 2005. For the three months ended December 31, 2005, the Company announced earnings of $0.02 per diluted share on net income of $209,000, compared to earnings of $0.25 per diluted share on net income of $2.59 million for the quarter ended December 31, 2004. During the quarter ended December 31, 2005, the Company restructured a portion of its securities portfolios to reduce the prepayment risk Prepayment Risk The uncertainty related to unscheduled prepayment in excess of scheduled principal repayment. Notes: This risk is generally associated with mortgage securities. associated with these securities. In connection with the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , the Company incurred a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss of approximately $2.99 million, or an after tax loss of approximately $1.98 million or $0.15 per diluted share. The Company's annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average assets and average equity were 0.05% and 0.66%, respectively, for the quarter ended December 31, 2005. Commenting on the quarter and year end results, Charlotte A. Zuschlag, President and Chief Executive Officer of the Company and the Bank, stated, "The interest rate environment and the continued flattening of the yield curve Flattening of the yield curve A change in the yield curve when the spread between the yield on long-term and short-term Treasuries has decreased. Compare steepening of the yield curve and butterfly shift. made 2005 a very challenging year. The Company remains focused on improving net interest and noninterest income, while pursuing strategies to grow and provide a sound investment return to our shareholders. One such strategy to improve the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. profitability of the Company and maximize long-term value for our stockholders was management's ability to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the current interest rate environment and positively restructure its securities portfolio. While the current quarter and year to date earnings were adversely impacted, the sale of these lower coupon securities should improve our interest rate margin and earnings going forward. Additionally, the Company's focus is exemplified this year with the efforts of the Company's management and employees to coordinate and complete the successful integration of PHSB PHSB Public Health Service Bureau PHSB Preserve Historic Sleeping Bear Financial Corporation (PHSB), which was acquired on February 11, 2005, into the operations of ESB Financial Corporation." Consolidated net income for the year ended December 31, 2005 decreased $811,000 or 8.1% to $9.18 million from $9.99 million, as compared to the year ended December 31, 2004. This net decrease was a result of a decrease in non-interest income of $3.82 million and increases in non-interest expense of $2.96 million, partially offset by an increase in net interest income of $4.94 million after the increase to provision for loan losses of $362,000 and a decrease in the provision for income taxes of $1.02 million. The $3.82 million decrease to noninterest income was primarily due to a decrease to the gain on the sale of securities available for sale of approximately $3.86 million, primarily as a result of the securities restructuring, as well as a decline in the income generated by the Company's real estate joint ventures of approximately $1.22 million. Declines in these areas were partially offset by an increase in fees and service charges of approximately $1.1 million. The $2.96 million increase in noninterest expense was primarily related to increases to compensation and employee benefits, premises and equipment, amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a and other expenses of approximately $1.17 million, $737,000, $690,000, $361,000 and $1.29 million, respectively. Other noninterest expense was affected by an increase in the amortization of the core deposit intangible recorded in connection with the acquisition of PHSB of $719,000. Partially offsetting these increases were decreases to the loss on early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt and minority interest of approximately $844,000 and $605,000, respectively. Noninterest income and noninterest expense were affected by increases due primarily to the acquisition of PHSB's operations. Consolidated net income for the quarter ended December 31, 2005 decreased $2.38 million or 91.9% to $209,000 from $2.59 million, as compared to the quarter ended December 31, 2004. This net decrease was a result of a decrease in non-interest income of $3.37 million and an increase in non-interest expense of $869,000, partially offset by an increase in net interest income of $276,000 after the increase to provision for loan losses of $590,000. The $3.37 million decrease to noninterest income was primarily due to a decrease in the gain on the sale of securities available for sale of approximately $3.04 million, primarily as a result of the securities restructuring, as well as a decline in the income generated by the Company's real estate joint ventures of approximately $786,000. The declines in these areas were partially offset by an increase in fees and service charges of approximately $409,000. The $869,000 increase in noninterest expense was primarily related to increases associated with the compensation and employee benefits, premises and equipment, data processing and other expenses of $146,000, $249,000, $116,000 and $544,000, respectively. Other noninterest expense was affected by an increase in the amortization of the core deposit intangible recorded in connection with the acquisition of PHSB of $203,000. Partially offsetting these increases was a decrease to minority interest of approximately $400,000. Noninterest income and noninterest expense were affected by increases due primarily to the acquisition of PHSB's operations. The Company's consolidated total assets increased $458.3 million or 32.9% to $1.85 billion at December 31, 2005, from $1.39 billion at December 31, 2004. Securities increased $187.3 million or 20.1% to $1.12 billion and net loans receivable increased $196.8 million or 57.3% to $540.3 million. Total deposits increased $254.2 million or 43.8% to $834.5 million and borrowed funds increased $166.5 million or 23.69% to $869.2 million, as compared to December 31, 2004. Total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was $126.9 million or 6.85% of total assets, and book value per share was $9.58 at December 31, 2005 compared to $97.8 million or 7.01% of total assets, and book value per share of $9.16 at December 31, 2004. The Company also announced that its annual meeting of stockholders will be held on Wednesday, April 19, 2006 at 4:00 p.m. at the Connoquenessing Country Club in Ellwood City, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York . 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 Adjacent or touching. Contrast with fragmentation. See contiguous file. counties of Allegheny, Lawrence, Beaver beaver, either of two large aquatic rodents, Castor fiber and Castor canadensis, known for their engineering feats. They were once widespread in N and central Eurasia except E Siberia, and in North America from the arctic tree line to the S United and Butler in Pennsylvania. The common stock of the Company is traded on The NASDAQ Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol "ESBF". We make available on our web site, which is located at http://www.esbbank.com, our annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , quarterly reports on Form 10-Q Form 10-Q See 10-Q. and current reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 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 web site.
ESB FINANCIAL CORPORATION AND SUBSIDIARIES
--------------------------------------------
Financial Highlights
(Dollars in Thousands - Except Per Share Amounts)
OPERATIONS DATA:
----------------
Year Ended Three Months
December 31, Ended December 31,
2005 2004 2005 2004
-------- -------- ----------- -----------
Interest income $80,353 $60,798 $21,515 $15,637
Interest expense 49,823 35,569 14,210 9,198
-------- -------- ----------- -----------
Net interest income 30,530 25,229 7,305 6,439
Provision for (recovery of)
loan losses 568 206 499 (91)
-------- -------- ----------- -----------
Net interest income after
provision for (recovery
of) loan losses 29,962 25,023 6,806 6,530
Noninterest income 3,142 6,960 (1,671) 1,700
Noninterest expense 23,115 20,157 5,859 4,990
-------- -------- ----------- -----------
Income before provision for
income taxes 9,989 11,826 (724) 3,240
Provision for (recovery of)
income taxes 810 1,836 (933) 649
-------- -------- ----------- -----------
Net income $9,179 $9,990 $209 $2,591
======== ======== =========== ===========
Earnings per share:
Basic $0.73 $0.98 $0.02 $0.25
Diluted $0.71 $0.94 $0.02 $0.25
Annualized return on
average assets 0.52% 0.73% 0.05% 0.75%
Annualized return on
average equity 7.16% 10.38% 0.66% 10.57%
FINANCIAL CONDITION DATA:
-------------------------
12/31/05 12/31/04
----------- -----------
Total assets $1,852,779 $1,394,515
Cash and cash equivalents 28,215 17,703
Total investment securities 1,117,063 929,794
Loans receivable, net 540,277 343,524
Customer deposits 834,530 580,346
Borrowed funds (includes
subordinated debt) 869,242 702,773
Stockholders' equity 126,877 97,801
Book value per share $9.58 $9.16
Average equity to average
assets 7.28% 6.99%
Allowance for loan losses
to loans receivable 0.86% 1.06%
Non-performing assets to
total assets 0.27% 0.26%
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