- ESSA Bancorp (ESSA, Financial) reports Q2 2025 net income of $2.7 million, down from $4.6 million year-over-year.
- Net interest margin contracts to 2.78%, reflecting increased competition and deposit costs.
- The bank maintains a robust Tier 1 capital ratio of 10.3% despite earnings pressures.
ESSA Bancorp, Inc. (ESSA) reported its financial results for the fiscal second quarter ended March 31, 2025, with a net income of $2.7 million, or $0.29 per diluted share, down from $4.6 million, or $0.48 per diluted share, in the same period of 2024. The decline in net income is partly attributed to $1.0 million in pre-tax merger-related costs associated with the pending CNB Financial merger.
The company's total interest income for the quarter was $25.6 million, while its net interest margin contracted to 2.78% from 2.87% in the previous year, indicating increased competition and rising costs of deposits outpacing asset yields. Total interest expense rose to $11.4 million from $10.8 million in Q2 2024, driven by higher deposit rates.
On a brighter note, ESSA Bancorp maintained a solid balance sheet with total net loans increasing to $1.76 billion, and nonperforming assets representing just 0.54% of total assets, improved from 0.56%. Furthermore, the bank's Tier 1 capital ratio stands at a strong 10.3%, surpassing regulatory requirements.
Capital adequacy remains robust, with tangible book value per share rising to $21.93 from $21.40 at the end of September 2024. The pending merger with CNB Financial has cleared a significant hurdle with shareholder approval, setting the stage for strategic growth and integration.
