ESSA Bancorp (ESSA) investor relations material

Executive summary

• Net income for the quarter was $4.0 million, down 8.8% year-over-year, mainly due to higher non-interest expense and lower net interest income.

• Total assets were $2.2 billion at December 31, 2024, up 0.4% sequentially, driven by higher cash and loans.

• Deposit growth was strong, rising to $1.70 billion, with core deposits comprising 62% of the total.

• The planned merger with CNB Financial Corporation is expected to close in the second half of 2025 and generate long-term shareholder value.

• Asset quality remained robust, with nonperforming assets at 0.54% of total assets and a net recovery of $37,000 in charge-offs.

Financial highlights

• Net interest income decreased 4.8% year-over-year to $14.1 million; net interest margin was 2.68%–2.69%, down from 2.79% a year ago.

• Total interest income rose to $26.4 million, while interest expense increased to $12.2 million, reflecting higher rates and deposit repricing.

• Noninterest income grew to $2.1 million, with gains in loan swap and trust fees offsetting lower deposit service charges and loan sale gains.

• Noninterest expense was flat at $11.9 million, with higher compensation and data processing costs offset by lower real estate and other expenses.

• Allowance for credit losses was $15.1 million (0.85% of loans), with a $607,000 release in the quarter.

Outlook and guidance

• The merger with CNB Financial is subject to regulatory and shareholder approval, with closing anticipated in the second half of 2025.

• Management expects continued business uncertainties and operational restrictions until the merger is completed.

• Management aims to maintain operational excellence, expense management, and prudent growth during the merger process.