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ESSA Bancorp. Inc. (ESSA): The Key to Investor Returns in the Keystone State?

ESSA Bancorp (ESSA) is a bank holding company that provides financial services to individuals, families, and businesses in Pennsylvania. The company offers traditional banking services such as checking and savings accounts, money market accounts, club accounts, certificates of deposit, individual retirement accounts, and other qualified plan accounts. ESSA is also a provider of first mortgages, home equity lines of credit, and commercial loans. In addition, ESSA also offers asset management and trust services, as well as provides investment services through its relationship with PRIMEVEST Financial Services, Inc.

While larger financial institutions across the U.S. fall by the wayside due to cash constraints, ESSA Bancorp sits on a mound of cash that would make any company green with envy. The company has almost $23.5 million in cash on hand and assets of $985 million. The company has 13 branches in the Pocono Mountains area of Pennsylvania, giving it close proximity to the New York market, as well. The company was added to the Russell 3000 Index of global equities in July, which may increase institutional focus on the shares.

Currently, two Wall Street analysts follow ESSA Bancorp, with the most recent rating coming from Stifel Nicolaus earlier this month. That rating was a “buy.” Sixty institutions currently own more than 52 percent of the 16.5 million ESSA shares outstanding. Mutual fund owners include First Financial Fund, ISHARES and Vanguard. Insiders own another 21 percent of the stock. ESSA also trades in agency securities, mortgage-backed securities, and corporate debt obligations. The Pennsylvania-based company was founded in 1913.

ESSA shares closed Monday at $13.45 and have traded between $9.56 and $14.10 over the past 52 weeks. Average volume for the past three months is about 97,000 shares a day. ESSA has a market value of $221.6 million. The company pays an annual dividend of 16 cents and has not made any mention of reducing the dividend, despite similar actions by larger banks.

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