Executive Summary

Q1 FY2025 net income was $3.96M and diluted EPS $0.41, down 9% YoY and 7% QoQ; net interest margin compressed to 2.68% (vs 2.79% in Q1 FY2024 and 2.79% in Q4 FY2024) as deposit repricing lifted funding costs despite lower borrowings .
Total deposits rose to $1.70B (from $1.63B in Q4), with core deposits at 62% and a $67.0M increase in brokered CDs; asset quality remained strong (NPAs/Assets 0.54%, ACL/Loans 0.85%) .
Management highlighted stable margin YoY, strong credit management, and a continued focus on operational excellence; merger with CNB Financial announced Jan 10, 2025 (ESSA holders to receive 0.8547 CNB shares; implied value ~$21.10/share) as a key medium-term catalyst .
No formal quantitative guidance was issued; dividend was maintained at $0.15/share in the quarter .

What Went Well and What Went Wrong

What Went Well

Deposit growth (+$70.9M QoQ to $1.70B) with stable core mix at 62%; uninsured deposits 27% and ~$160.2M fully collateralized municipal deposits, supporting liquidity .
Asset quality and capital remained strong: NPAs/Assets 0.54%, ACL/Loans 0.85%, Tier 1 capital ratio 10.0%; net recoveries of $37K in the quarter .
Management executed on loan pipeline and deposit retention; CEO emphasized “strong, steady earnings” and “stable” net interest margin YoY despite a flat yield curve .

What Went Wrong

Margin and earnings pressure: NIM fell to 2.68% (vs 2.79% YoY/QoQ); net interest income before credit release declined to $14.14M (vs $14.86M YoY and $14.40M QoQ) as deposit and borrowing costs rose .
Interest expense increased 9% YoY to $12.23M despite lower total borrowings QoQ, underscoring continued funding cost pressure from deposit repricing .
EPS declined to $0.41 from $0.45 YoY and $0.44 QoQ; ROAA/ROAE eased to 0.71%/6.72% vs 0.77%/7.28% in Q4 and 0.77%/7.86% YoY .

Financial Results

Core P&L and Profitability (oldest → newest)

Metric	Q3 FY2024	Q4 FY2024	Q1 FY2025
Total Interest Income ($USD Millions)	$25.662	$26.055	$26.372
Interest Expense ($USD Millions)	$11.497	$11.659	$12.228
Net Interest Income ($USD Millions)	$14.165	$14.396	$14.144
Release/(Provision) for Credit Losses ($USD Millions)	$0.347 release	$0.120 release	$0.607 release
Noninterest Income ($USD Millions)	$2.119	$2.120	$2.058
Noninterest Expense ($USD Millions)	$11.808	$11.502	$11.934
Net Income ($USD Millions)	$3.914	$4.179	$3.956
Diluted EPS ($)	$0.41	$0.44	$0.41
Net Interest Margin (%)	2.77%	2.79%	2.68%
ROAA (%)	0.72%	0.77%	0.71%
ROAE (%)	6.96%	7.28%	6.72%

YoY Comparisons (Q1 FY2025 vs Q1 FY2024)

Metric	Q1 FY2024	Q1 FY2025	YoY Change
Total Interest Income ($USD Millions)	$26.090	$26.372	+$0.282
Interest Expense ($USD Millions)	$11.226	$12.228	+$1.002
Net Interest Income ($USD Millions)	$14.864	$14.144	-$0.720
Noninterest Income ($USD Millions)	$1.961	$2.058	+$0.097
Noninterest Expense ($USD Millions)	$11.857	$11.934	+$0.077
Net Income ($USD Millions)	$4.337	$3.956	-$0.381
Diluted EPS ($)	$0.45	$0.41	-$0.04
Net Interest Margin (%)	2.79%	2.68%	-11 bps
Yield on Avg Interest-Earning Assets (%)	4.89%	5.01%	+12 bps
Cost of Interest-Bearing Liabilities (%)	2.59%	2.88%	+29 bps

Balance Sheet Trends and Composition

Metric	Q3 FY2024	Q4 FY2024	Q1 FY2025
Total Assets ($USD Millions)	$2,233.6	$2,187.7	$2,196.1
Total Net Loans ($USD Millions)	$1,708.6	$1,744.3	$1,756.2
Total Deposits ($USD Millions)	$1,554.3	$1,629.1	$1,699.982
Short-term Borrowings ($USD Millions)	$396.458	$280.000	$215.000
Other Borrowings ($USD Millions)	$10.000	$10.000	$10.000
Total Stockholders’ Equity ($USD Millions)	$225.5	$230.4	$234.2
Tier 1 Capital Ratio (%)	9.8%	10.01%	10.0%
Tangible Book Value/Share ($)	$20.89	$21.40	$21.70

Loan Portfolio Breakdown ($USD Millions)

Category	Q3 FY2024	Q4 FY2024	Q1 FY2025
Residential Real Estate	$713.4	$721.5	$731.0
Commercial Real Estate	$847.6	$884.6	$875.6
Commercial & Industrial	$47.7	$36.8	$45.5
States & Political Subdivisions	$48.1	$48.6	$48.5
Consumer	$50.0	$51.3	$52.3

Deposit Mix ($USD Millions and %)

Category	Q3 FY2024	Q4 FY2024	Q1 FY2025
Noninterest-bearing Demand	$261.3	$256.6	$255.5
Interest-bearing Demand	$290.6	$312.7	$277.9
Money Market	$287.3	$334.6	$375.1
Certificates of Deposit	$564.5	$582.1	$649.6
Total Deposits	$1,554.3	$1,629.1	$1,699.982
Core Deposits (% of Total)	64%	64.3%	62%
Uninsured Deposits (% of Total)	26%	30%	27%
Brokered CDs (Change/Level)	+$29.1M increase	$252.0M level	+$67.0M increase

KPIs: Credit Quality, Capital and Value

KPI	Q3 FY2024	Q4 FY2024	Q1 FY2025
NPAs / Total Assets (%)	0.56%	0.58%	0.54%
ACL / Total Loans (%)	0.89%	0.87%	0.85%
Net Charge-offs (Quarter)	+$137K recovery YTD	n/a	+$37K recovery
Tier 1 Capital Ratio (%)	9.8%	10.01%	10.0%
Tangible Book Value/Share ($)	$20.89	$21.40	$21.70

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue/Expense/Margins	FY2025/Q2	Not provided	Not provided	Maintained (no formal guidance)
Dividend per Share	Quarterly	$0.15 (Q3/Q4 FY2024)	$0.15 (Q1 FY2025)	Maintained
Strategic Transaction	2025 Timeline	n/a	Merger with CNB expected to close Q3 2025, subject to approvals	New (announced)

Earnings Call Themes & Trends

Note: No Q1 FY2025 earnings call transcript was available in our document catalog; themes reflect management press releases.

Topic	Previous Mentions (Q3 & Q4 FY2024)	Current Period (Q1 FY2025)	Trend
Funding costs & NIM	Margin pressure from high-rate environment; NIM 2.77–2.80%; focus on rate adjustments and deposit generation	NIM 2.68%; “flat yield curve pressure” but margin “remained stable vs year earlier”	Continued pressure
Deposit strategy	Selective rate adjustments; maintain desirable loan-to-deposit ratio	Deposits up to $1.70B; core 62%; brokered CDs +$67.0M	Growth with higher-cost mix
Asset quality	Strong NPAs/Assets ~0.56–0.58%; ACL/Loans improving; releases of credit losses	NPAs/Assets 0.54%; ACL/Loans 0.85%; $607K release	Stable/Improving
Capital & book value	Strong Tier 1; TBV/share rising (to $21.40)	Tier 1 10.0%; TBV/share $21.70	Improving
Strategic outlook	Positive economic trends; rate declines could help in FY2025	CNB merger expected to generate long-term value; operational excellence focus	Transformational

Management Commentary

“In fiscal first quarter 2025, the Company continued to generate strong, steady earnings… even in a higher interest rate environment… We demonstrated year-over-year growth in … loan portfolios. Our focus on generating and retaining deposits was reflected in solid deposit growth.” — Gary S. Olson, President & CEO .
“We anticipate ESSA Bancorp, Inc.’s recently announced planned merger with CNB Financial Corporation will generate significant long-term value for shareholders… we expect to maintain the keen focus on operational excellence, expense management, superior service, and prudent growth.” — Gary S. Olson .
Prior quarter tone: “Managing interest expense… was a significant challenge… prompt adjustments to rates on loans contributed to expanded interest income… helped mitigate margin compression.” — Gary S. Olson (Q4 FY2024) .

Q&A Highlights

No Q1 FY2025 earnings call transcript was available. Clarifications from the press release:

Credit loss release ($607K) was “primarily driven by a decrease in expected losses in the loan portfolio, including unfunded commitments” .
Deposits increased with a mix shift to CDs and brokered CDs (+$67.0M), while short-term borrowings fell to $215.0M, indicating funding mix repositioning .

Estimates Context

Wall Street consensus (S&P Global) for Q1 FY2025 EPS and revenue was unavailable for ESSA using our S&P Global connection; as a result, estimate-based beat/miss analysis cannot be performed for this quarter.*
Given the observed NIM compression (2.68%) and higher cost of interest-bearing liabilities (2.88%), forward estimates—where available—may need to reflect continued funding cost pressure until deposit mix normalizes .
*Estimates unavailable via S&P Global at this time.

Key Takeaways for Investors

Earnings resilient but pressured: EPS $0.41 and net income $3.96M; NIM compressed to 2.68% as funding costs rose despite lower borrowings .
Strong deposit growth with higher-cost components: total deposits +$70.9M QoQ to $1.70B; brokered CDs +$67.0M—watch funding cost trajectory and potential margin impact .
Credit quality remains a pillar: NPAs/Assets 0.54%, ACL/Loans 0.85%; $607K release supports bottom line while signaling stable credit outlook .
Capital and shareholder value strengthening: Tier 1 10.0%; TBV/share $21.70; stockholders’ equity up to $234.2M—provides buffer against rate/funding volatility .
Strategic catalyst: CNB merger terms (0.8547 CNB shares per ESSA share; ~$21.10 per ESSA share implied) and expected Q3 2025 close introduce medium-term re-rating potential and integration execution risk .
Near-term focus: monitor deposit mix (core 62%), brokered CD usage, and cost of interest-bearing liabilities (2.88%); sustained improvement could stabilize NIM .
Dividend stability continues: $0.15/share maintained—income support while merger progresses .

ESSA Bancorp, Inc. (ESSA)·Q1 2025 Earnings Summary