UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2007
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to ________________________
Commission file number 000-33384
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A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
ESSA Bank & Trust
401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
ESSA Bancorp, Inc.
200 Palmer Street
Stroudsburg, PA 18360
REQUIRED INFORMATION
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(a) The ESSA Bank 401(k) Plan (the "Plan") is subject to the Employee
Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of
requirements of Items 1-3 of Form 11-K, the financial statements and
supplemental schedule of the Plan for the fiscal year ended December 31,
2007, which have been prepared in accordance with the financial reporting
requirements of ERISA, are filed as a part of this Form 11-K report.
ESSA BANK & TRUST 401(k) PLAN
STROUDSBURG, PENNSYLVANIA
AUDIT REPORT
DECEMBER 31, 2007
ESSA BANK & TRUST 401(k) PLAN
DECEMBER 31, 2007
Page
Number
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Report of Independent Registered Public Accounting Firm 1
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 6
Supplemental Information 7
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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Trustees of ESSA Bank & Trust 401(k) Plan
Stroudsburg, Pennsylvania
We have audited the accompanying statement of net assets available for benefits
of ESSA Bank & Trust 401(k) Plan (the "Plan") as of December 31, 2007 and 2006,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 2007. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of ESSA Bank &
Trust 401(k) Plan as of December 31, 2007 and 2006, and the changes in net
assets available for benefits for the year ended December 31, 2007, in
conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2007, is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the United States
Department of Labor Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The supplemental schedule is
the responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ S. R. Snodgrass, A.C.
Wexford, PA
June 27, 2008
ESSA BANK & TRUST 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
2007 2006
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ASSETS
Investments, at fair value $ 5,711,475 $ 4,413,114
Contributions:
Employer contribution receivable 7,596 4,161
Employees contribution receivable 15,919 466
Employee rollover contribution receivable - 44,980
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Total contributions 23,515 49,607
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Net assets available for benefits $ 5,734,990 $ 4,462,721
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The accompanying notes are an integral part of these financial statements.
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ESSA BANK & TRUST 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2007
ADDITIONS IN NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 522,283
Interest on investments 6,145
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Total investment income 528,428
Contributions:
Contributions by employer 206,679
Contributions by employees 436,722
Rollover contributions 152,346
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Total contributions 795,747
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Total additions 1,324,175
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 41,160
Administrative expenses 10,746
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Total deductions 51,906
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Net increase 1,272,269
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of the period 4,462,721
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End of the period $ 5,734,990
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The accompanying notes are an integral part of these financial statements.
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ESSA BANK & TRUST 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF PLAN
The following brief description of the 401(k) Plan (the "Plan") for
employees of ESSA Bank & Trust (the "Bank") is provided for general
information purposes only. Interested parties should refer to the Plan
Document for a more comprehensive description of the Plan's provisions.
General
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The Plan is a defined contribution plan covering the employees of the Bank
who have attained the age of 21 and have completed one year of service and
1,000 hours of service. An employee becomes a participant on either January
1 or July 1, depending on when eligibility requirements are met. The Plan
includes a 401(k) before-tax savings feature, which permits participants to
defer compensation under Section 401(k) of the Internal Revenue Code. It is
subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA), as amended. In 2006, the Plan was amended to change its
year-end from November 30 to December 31.
Contributions
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Employees may elect to contribute any amount up to the maximum percentage
allowable not to exceed the limits of Code Section 401(k), 402(g), 404, and
415. The Bank will match 100% of the participant's annual elective
deferrals that do not exceed 3% of the participant's compensation, plus 50%
of the amount of the participant's annual elective deferrals that do not
exceed 5% of the participant's compensation. The participants may direct
their accounts into several different investment options. Contributions are
subject to certain limitations.
Participant Accounts
--------------------
Each participant's account is credited with Plan earnings. Allocations are
based upon participants' account balances at the beginning of the valuation
period, while forfeitures related to the non-vested portion of the employer
contributions are reallocated to remaining participants' accounts in the
ratio of each participant's compensation in relation to compensation of all
participants. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's account.
Vesting
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Participants are immediately vested in their voluntary contributions plus
actual earnings thereon. Vesting in the sponsor's contributions in the Plan
made prior to December 1, 2004 is based on completion of credited service
years. A credited service year is considered one in which the participant
completed at least 1,000 hours of service. Such contributions are subject
to a six-year graded vesting schedule pursuant to which such amounts vest
in 20% increments after each completed year of service, beginning after the
completion of the second year of service. Employer contributions made
subsequent to December 1, 2004, are immediately vested.
Payment of Benefits
-------------------
Upon termination of service, participants whose accounts do not exceed
$1,000 may receive a lump-sum amount equal to the value of their account.
Participants whose accounts are between $1,000 and $5,000 may have the
balance of their account rolled over into an IRA. Participants whose vested
account balance at the time of termination exceeds $5,000 may receive a
lump-sum distribution or an annuity or may defer payments of benefits until
April 1 of the calendar year following the calendar year during which the
participant reaches age 70 1/2.
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NOTE 1 - DESCRIPTION OF PLAN (Continued)
Forfeitures
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At December 31, 2007 and December 31, 2006, forfeited nonvested accounts
totaled $4 and $882, respectively. These amounts will be utilized to reduce
future employer contributions or to pay Plan administrative expenses.
During the year ended December 31, 2007, $1,027 in forfeitures were
utilized to reduce the employer's contribution.
Administrative expenses
-----------------------
Administrative expenses of the Plan relating to investment management and
recordkeeping fees are paid by the Plan. Fees relating to accounting and
miscellaneous administrative expenses are paid by the Plan's Sponsor. Such
expenses amounted to $11,396 for the year ended December 31, 2007.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting principles followed by the Plan and the methods of applying
these principles conform to U.S. generally accepted accounting principles.
A summary of the significant accounting and reporting policies applied in
the presentation of the accompanying financial statements follows:
Accounting Estimates
--------------------
The financial statements have been prepared in conformity with U.S.
generally accepted accounting principles. In preparing the financial
statements, management is required to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ
significantly from those estimates.
Valuation of Investments and Income Recognition
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The Plan's investments are stated at fair value. The fair value of mutual
funds is determined using the quoted net asset value of the specified fund.
The fair value of ESSA Bancorp, Inc. common stock is determined based on a
quoted market price.
The net appreciation (depreciation) in fair value of investments includes
investments purchased, sold, and held during the year.
Purchases and sale of investments are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
Payment of Benefits
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Benefit payments to participants are recorded upon distribution.
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Risks and Uncertainties
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The Plan invests in various investment securities. Investment securities
are exposed to various risks such as interest rate, market, and credit
risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values
of investment securities will occur in the near term and that such changes
could materially affect participants' account balances and the amounts
reported in the Statement of Net Assets Available for Benefits.
NOTE 3 - INVESTMENTS
The Plan investments are administered by Massachusetts Mutual Life
Insurance Company ("trustee").
The fair value of the individual investments that represent 5 percent or
more of the Plan's net assets as of December 31, are as follows:
2007 2006
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Fair Fair
Value Value
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Investments at fair value as
determined by quoted market price:
SEI Indexed Equity (Northern Trust) $ 180,349 $ 567,079
SEI Large Cap Value (Davis) 210,725 512,555
Premium International Equity (OFI) 230,116 356,794
Premium Money Market Fund (Babson) 310,288 509,054
Premium Small Cap Value (OFI Inst) 61,173 226,526
ESSA Bancorp Inc. common stock 3,558,341 -
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Total $ 4,550,993 $ 2,172,008
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The Plan's investments appreciated in fair value for the year ended December 31
as follows:
2007
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Investments at fair value as determined by quoted market price:
Mutual funds $ 100,813
Common stock 421,470
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Net appreciation in fair value $ 522,283
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NOTE 4 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Bank has the right
under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
termination of the Plan, participants will become 100 percent vested in
their accounts.
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NOTE 5 - TAX STATUS
The Plan obtained its latest determination letter on April 23, 2002, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable requirements
of the Internal Revenue Code.
NOTE 6 - PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are shares of mutual funds that are managed by
Massachusetts Mutual Life Insurance Company, the defined trustee of the
Plan. Therefore, related transactions qualify as party-in-interest
transactions. Fees paid by the plan for investment management services
amounted to $10,746 for the year ended December 31, 2007.
At December 31, 2007, the Plan held 316,295 shares of ESSA Bancorp, Inc.
common stock. There were no dividends received on these shares in 2007.
NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, Disclosures About Fair
Value of Financial Instruments, requires the Plan to disclose the estimated
fair value of its financial instruments. Financial instruments are defined
as cash, evidence of ownership interest in an entity, or a contract which
creates an obligation or right to receive or deliver cash or another
financial instrument from/to a second entity on potentially favorable or
unfavorable terms. Fair value is defined as the amount at which a financial
instrument could be exchanged in a current transaction between willing
parties other than in a forced liquidation or sale. If a quoted market
price is available for a financial instrument, the estimated fair value
would be calculated based upon the market price per trading unit of the
instrument.
Investments and contributions receivable would be considered a financial
instrument. At December 31, 2007 and December 31, 2006, the carrying
amounts of these financial instruments approximate fair value.
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ESSA BANK & TRUST 401(k) PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
EMPLOYER IDENTIFICATION NUMBER 24-0568185
PLAN NUMBER - 002
DECEMBER 31, 2007
Par or Fair
Shares Value
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Mutual Funds
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Ultra (American Century) 1,733 $ 70,546
Aggressive Journey 92 53,369
* Premium Core Bond (Babson) 232 50,983
Premium Core Value Equity (Babson/OFI) 10 29,154
Destination Retirement 2030 1,422 85,812
Destination Retirement 2040 1,593 100,357
Destination Retirement Income 586 46,322
Destination Retirement 2020 1,873 166,331
* SEI Indexed Equity (Northern Trust) 2,984 180,349
* SEI Mid Cap Growth II (TRP) 298 81,948
* SEI Large Cap Value (Davis) 5,231 210,725
* SEI Focus Value (Harris/C&B) 461 25,324
* Premium International Equity (OFI) 1,454 230,116
* Premium High Yield (Babson) 333 39,847
Growth (OFI) 1,851 105,340
Global Opportunities (OFI) 995 22,182
Moderate Journey 21 2,305
* Premium Small Co Oppty II (OFI Inst) 363 54,300
* Premier Strategic Income (OFI) 1,189 62,536
* Premium Money Market Fund (Babson) 16,989 310,288
New Horizons (T Rowe Price) 1,169 93,885
Conservative Journey 15 1,695
Spectrum Growth (T Rowe Price) 888 42,001
* Premier Cap Appreciation (OFI) 983 26,246
* Premium Small Cap Value (OFI Inst) 1,895 61,173
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2,153,135
Common Stock
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* ESSA Bancorp Inc. common stock 3,558,341
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Total $ 5,711,475
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* Party-in-interest
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
ESSA Bank
401 (k) Plan
/s/ Gary S. Olson
DATE ----------------------
June 27, 2008 Gary S. Olson
as Plan Administrator
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