Under the terms of the merger agreement, stockholders of ENB will receive approximately $24.7 million, or $5.80 per share. Pending the satisfaction of customary closing conditions, including the receipt of all regulatory approvals and the approval of ENB stockholders, the transaction is expected to close in the fourth quarter of 2015.

The merger is expected to be immediately accretive to ESSA Bancorp’s earnings upon closing.

Eagle National Bank operates five full-service banking facilities in Montgomery, Chester, and Delaware counties spanning the western suburbs of Philadelphia. As of June 30, 2015, Eagle National Bank reported assets of $175.7 million, total loans of $125.1 million, and total deposits of $148.7 million.

Transaction Highlights

Cash purchase price of $5.80 per share.
Deal value of $25.3 million based on 4,250,820 ENB shares outstanding and the cost of cashing out ENB’s outstanding in the money stock options.
Transaction value equates to 109% of ENB tangible book value as of June 30, 2015.
Improves return on assets and return on equity measures.
Immediately accretive to earnings excluding transaction-related expenses.
Cost saves in the range of 36% of ENB’s operating expenses expected to be realized within the first year following the transaction.
Tangible book value dilution of 3.8% is projected based on current market conditions.
Earn-back period is projected to be 3 years.
Pro-forma tangible capital-to-tangible assets of 8.9%.

Key reasons for the transaction

Expands footprint into western suburbs of Philadelphia, three of the seven most populated Pennsylvania counties and among the faster growing markets within the state.
Leverage ENB’s strong commercial real estate and commercial lending platform:
Favorable demographic and economic markets
Newly hired commercial lending team gaining traction
Larger loan to one-borrower limit should provide access to more lending opportunities
SBA preferred lender
Opportunity to capitalize on ENB’s utilization of the Physician’s National Bank division to market the Bank’s products and services to physicians and other health care professionals.
Introduction of fee-generating services (employee benefits, trust operations, retail brokerage) not currently available through ENB.
Strong net interest margin of 3.65%.
ENB maintains a strong low cost core deposit base:
25% non-interest bearing accounts
Low level of certificates of deposit (28%)
38 basis points cost of funds

Gary S. Olson, President and CEO of ESSA Bancorp, commented: "We are delighted to have this opportunity to partner with Eagle National Bank, as this transaction provides a platform for us to expand our presence into the suburban Philadelphia market."

Mr. Olson added, "This acquisition creates a commercial presence in attractive suburban locations. We believe our relationship banking model, broad menu of business and consumer banking products and services creates tremendous opportunity. We have faith in our model of delivering the right advice in a professional and timely manner. Eagle National Bank’s clients can continue to bank confidently in the future as a result."

Gene C. Maffey, ENB’s Chairman, President and CEO, stated, "We are extremely excited about this transaction as we believe our Eagle National Bank’s customers and shareholders will benefit greatly from this combination. With ESSA’s breadth of products and services, we believe this transaction will enable us to become the bank of choice in our communities by enhancing our ability to serve the needs of our clients." Mr. Maffey added, "We look forward to being part of an organization whose commitment to the community and community banking mirrors our own."