<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PennFirst Bancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Not Applicable
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): (previously paid by wire
transfer)
[_] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2), or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[PennFirst Bancorp, Inc. Letterhead]
March 20, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
PennFirst Bancorp, Inc. (the "Company"). The meeting will be held at the
Connoquenessing Country Club located at RD #2, Route 65, Ellwood City,
Pennsylvania, on Tuesday, April 21, 1998, at 10:00 a.m., Eastern Time. The
matters to be considered by stockholders at the Annual Meeting are described in
detail in the accompanying materials.
The Board of Directors of PennFirst Bancorp, Inc. has determined that the
matters to be considered at the Annual Meeting are in the best interests of the
Company and its shareholders. For the reasons set forth in the Proxy Statement,
the Board unanimously recommends that you vote "FOR" each matter to be
considered.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. Let me urge you to mark, sign and date your proxy card today
and return it in the envelope provided, even if you plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
Your continued support of and interest in PennFirst Bancorp, Inc. is
appreciated.
Sincerely,
/s/ Charlotte A. Zuschlag
Charlotte A. Zuschlag
President and Chief Executive Officer
<PAGE>
PENNFIRST BANCORP, INC.
600 Lawrence Avenue
Ellwood City, Pennsylvania 16117
(412) 758-5584
----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 21, 1998
----------------------------
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of PennFirst
Bancorp, Inc. (the "Company") will be held at the Connoquenessing Country Club
located at RD #2, Route 65, Ellwood City, Pennsylvania, on Tuesday, April, 21,
1998, at 10:00 a.m., Eastern Time, for the following purposes, all of which are
more completely set forth in the accompanying Proxy Statement:
1. To elect three directors for a three-year term and until their
successors are elected and qualified;
2. To amend the Company's Amended and Restated Articles of Incorporation to
change the corporate name to ESB Financial Corporation;
3. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent public accountants for the year ending December 31, 1998;
4. To transact such other business as may properly come before the meeting
or any adjournment thereof. Except with respect to procedural matters incident
to the conduct of the Annual Meeting, management is not aware of any other
matters which could come before the Annual Meeting.
The Board of Directors has fixed March 10, 1998 as the voting record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. Only those stockholders of record as of the close of business
on that date will be entitled to vote at the Annual Meeting or at any such
adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Frank D. Martz
Frank D. Martz
Senior Vice President of Operations and
Secretary
March 20, 1998
Ellwood City, Pennsylvania
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN
TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED
PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY
VOTE EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU
IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
PENNFIRST BANCORP, INC.
-----------------------------
PROXY STATEMENT
-----------------------------
ANNUAL MEETING OF STOCKHOLDERS
April 21, 1998
General
This Proxy Statement is being furnished to the holders of common stock,
$0.01 par value per share ("Common Stock"), of PennFirst Bancorp, Inc. (the
"Company"), the savings and loan holding company of ESB Bank, F.S.B. (including
all predecessors thereto, "ESB Bank"), and Troy Hill Federal Savings Bank ("Troy
Hill"), in connection with the solicitation of proxies by the Board of Directors
of the Company for use at its Annual Meeting of Stockholders ("Annual Meeting")
to be held at the Connoquenessing Country Club located at RD #2, Route 65,
Ellwood City, Pennsylvania, on Tuesday, April 21, 1998, at 10:00 a.m., Eastern
Time, and at any adjournment thereof, for the purposes set forth in the Notice
of Annual Meeting of Stockholders. This Proxy Statement is expected to be
mailed to stockholders on or about March 20, 1998.
Voting Rights
Only stockholders of record at the close of business on March 10, 1998
("Voting Record Date") will be entitled to notice of and to vote at the Annual
Meeting. At such date, there were 5,238,980 shares of Common Stock issued and
outstanding and the Company had no other class of equity securities outstanding.
Holders of record of Common Stock at the close of business on March 10, 1998
will be entitled to one vote per share on all matters that may properly come
before the Annual Meeting. Stockholders of the Company are not permitted to
cumulate their votes for the election of directors. The election of directors
requires an affirmative vote of a majority of the votes cast with a quorum
present. The presence, either in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding on March 10, 1998 is
necessary to constitute a quorum at the Annual Meeting. Abstentions are
considered in determining the presence of a quorum. The affirmative vote of the
holders of a majority of the total votes cast at the Annual Meeting is required
for approval of the proposal to ratify the appointment of the independent
auditors. Abstentions will not be counted as votes cast, and accordingly will
have no effect on the voting with respect to this proposal. The affirmative
vote of the holders of a majority of the total votes eligible to be cast at the
Annual Meeting is required for approval of the proposed amendment ("Amendment")
to the Company's Amended and Restated Articles of Incorporation to change the
corporate name to ESB Financial Corporation. Abstentions will have the same
effect as a vote against the
<PAGE>
proposal. Under rules of the New York Stock Exchange, the proposals for
election of directors, ratification of independent auditors, and approval of the
Amendment are considered "discretionary" items upon which brokerage firms may
vote in their discretion on behalf of their clients if such clients have not
furnished voting instructions and for which there will not be "broker non-
votes."
Proxies
Shares of Common Stock represented by properly executed proxies, if such
proxies are received in time and not revoked, will be voted in accordance with
the instructions indicated on the proxies. If no instructions are indicated,
such proxies will be voted (i) FOR the nominees for director described herein;
(ii) FOR approval of the proposed Amendment; (iii) FOR the ratification of KPMG
Peat Marwick LLP as the Company's independent public accountants for the year
ending December 31, 1998; and (iv) in the discretion of the proxy holder as to
any other matter which may properly come before the Annual Meeting. Any holder
of Common Stock who returns a signed proxy but fails to provide instructions as
to the manner in which such shares are to be voted will be deemed to have voted
in favor of the matters set forth in the preceding sentence.
A stockholder who has given a proxy may revoke it at any time prior to its
exercise at the Annual Meeting by (i) giving written notice of revocation to the
Secretary of the Company, (ii) properly submitting to the Company a duly-
executed proxy bearing a later date, or (iii) attending the Annual Meeting and
voting in person. All written notices of revocation and other communications
with respect to revocation of proxies should be addressed as follows: PennFirst
Bancorp, Inc., 600 Lawrence Avenue, Ellwood City, Pennsylvania 16117,
Attention: Secretary.
Beneficial Ownership
The following table sets forth information as to the Common Stock
beneficially owned, as of March 10, 1998, by all directors and executive
officers of the Company as a group. As of March 10, 1998, no person other than
as set forth below was known by the Company to be the beneficial owner of more
than 5% of the Company's issued and outstanding Common Stock.
2
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership(1) of Class
- ------------------------------------ ----------------------- ---------
<S> <C> <C>
PennFirst Bancorp, Inc.
Employee Stock Ownership Plan Trust
600 Lawrence Avenue
Ellwood City, Pennsylvania 16117 498,291(2) 9.51%
Directors and officers of the Company
as a group (13 persons) 767,970(3) 14.01%
</TABLE>
- -----------------
(1) Pursuant to rules promulgated by the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), a person or entity is considered to beneficially own shares of
Common Stock if the person or entity has or shares (i) voting power, which
includes the power to vote or to direct the voting of the shares, or (ii)
investment power, which includes the power to dispose or direct the
disposition of the shares. Unless otherwise indicated, a person has sole
voting power and sole investment power with respect to the indicated
shares. Shares which are subject to stock options and which may be
exercised within 60 days of March 10, 1998 are deemed to be outstanding for
the purpose of computing the percentage of Common Stock beneficially owned
by such person.
(2) The PennFirst Bancorp, Inc. Employee Stock Ownership Plan Trust ("Trust")
was established pursuant to the PennFirst Bancorp, Inc. ESOP by an
agreement between the Company and William B. Salsgiver, George William
Blank, Jr., Herbert S. Skuba and Edmund C. Smith who act as trustees of the
ESOP ("Trustees"). As of March 10, 1998, 248,384 shares held in the Trust
were unallocated, and 249,907 shares held in the Trust had been allocated
to the accounts of participating employees. Under the terms of the
PennFirst Bancorp, Inc. Employee Stock Ownership Plan ("ESOP"), the
Trustees will generally vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees, and
allocated shares for which employees do not give instructions will
generally be voted in the same ratio on any matter as to those shares for
which instructions are given. Unallocated shares held in the ESOP will be
voted by the ESOP Trustees in accordance with their fiduciary duties as
trustees.
(3) Includes 242,831 shares which may be acquired by all directors and officers
of the Company as a group upon the exercise of stock options. Also
includes 42,086 shares which are held by the ESOP, which have been
allocated to the accounts of participating officers and, consequently, will
be voted at the Annual Meeting by such participating officers. Does not
include 601 shares held by a trust established by the Company to fund
certain benefits to be paid to the President and Chief Executive Officer of
the Company. See "Executive Compensation - Excess Benefit Plan."
3
<PAGE>
ELECTION OF DIRECTORS
The Amended and Restated Articles of Incorporation ("Articles of
Incorporation") and Bylaws of the Company provide that the Board of Directors
shall be divided into three classes as nearly equal in number as possible, and
that the members of each class shall be elected for terms of three years and
until their successors are elected and qualified, with one of the three classes
of directors to be elected each year. The number of directors currently
authorized by the Company's Bylaws is eight.
At the Annual Meeting, stockholders of the Company will be asked to elect
three directors of the Company for a three-year term and until their successors
are elected and qualified. The three nominees for election as directors were
selected by the Nominating Committee of the Board of Directors and each nominee
currently serves as a director of the Company. There are no arrangements or
understandings between the persons named and any other person pursuant to which
such person was selected as a nominee for election as a director at the Annual
Meeting, and no director or nominee for director is related to any other
director or executive officer of the Company by blood, marriage or adoption,
except for Harry B. Thaner, Chairman of the Board of Troy Hill, and Edwin A.
Thaner, a director of the Company and Troy Hill, who are father and son.
If any person named as nominee should be unable or unwilling to stand for
election at the time of the Annual Meeting, the proxies will nominate and vote
for any replacement nominee or nominees recommended by the Board of Directors of
the Company. At this time, the Board of Directors knows of no reason why any of
the nominees may not be able to serve as a director if elected.
Article 7.F of the Company's Articles of Incorporation governs nominations
for election to the Board of Directors and requires all nominations for election
to the Board of Directors, other than those made by or at the direction of the
Board, to be made pursuant to timely notice in writing to the Secretary of the
Company, as set forth in the Articles of Incorporation. To be timely, with
respect to an election to be held at an annual meeting of stockholders, a
stockholders' notice must be delivered to, or mailed and received at, the
principal executive offices of the Company, not later than 60 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders.
Each written notice of a stockholder nomination must set forth certain
information specified in the Articles of Incorporation. The presiding officer
of the meeting may refuse to acknowledge the nomination of any person not made
in compliance with the procedures set forth in the Articles of Incorporation.
4
<PAGE>
Information with Respect to Nominees for Director and Continuing Directors
The following tables present information concerning each nominee for
director and each director whose term continues and reflects his/her tenure as a
director of the Company, his/her principal occupation during the past five years
as well as the number of shares of the Common Stock beneficially owned by each
such person as of March 10, 1998.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM EXPIRING IN 2001
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as
Position with the Company of March 10, 1998(2)
and Principal Occupation Director ---------------------
Name Age During the Past Five Years Since No. %
------------------------ --- -------------------------- ------- ----------- -----
<S> <C> <C> <C> <C> <C>
George William Blank, Jr. 74 Director; President of George 1974(1) 61,760(3) 1.18%
W. Blank Supply Co., Inc.,
Ellwood City, Pennsylvania, a
concrete products
manufacturer and building
supply distributor.
Lloyd L. Kildoo 58 Director; Owner and Funeral 1986(1) 118,969(4) 2.26%
Director of Glenn-Kildoo
Funeral Homes of Zelienople
and Cranberry Township,
Pennsylvania.
Edwin A. Thaner 49 Director; Proprietor and 1997 26,506(5) *
principal engineer with E.A.
Thaner & Associates,
Wexford, Pennsylvania, a civil
engineering firm.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE ABOVE NOMINEES
BE ELECTED AS DIRECTORS
5
<PAGE>
DIRECTORS WITH TERMS EXPIRING IN 1999
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as
Position with the Company of March 10, 1998(2)
and Principal Occupation Director ---------------------
Name Age During the Past Five Years Since No. %
---------------------- --- -------------------------- ------- ----------- -----
<S> <C> <C> <C> <C> <C>
Herbert S. Skuba 59 Vice Chairman of the Board of the 1988(1) 65,453(6) 1.25%
Company and ESB Bank; Director,
President and Chief Executive
Officer of Ellwood City Hospital,
Ellwood City, Pennsylvania.
Charlotte A. Zuschlag 46 Director; President and Chief 1988(1) 140,723(7) 2.65%
Executive Officer of the Company
since February 1991 and of ESB
Bank and Troy Hill since June 1989
and April 1997, respectively;
Executive Vice President and Chief
Executive Officer of ESB Bank
from November 1988 through May
1989; Vice President of Operations
of ESB Bank from May 1988
through November 1988.
William B. Salsgiver 64 Chairman of the Board of the 1987(1) 146,196(8) 2.77%
Company and ESB Bank; a
principal of the property
development and residential
construction firm, Perry Homes,
Zelienople, Pennsylvania.
</TABLE>
DIRECTORS WITH TERMS EXPIRING IN 2000
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as
Position with the Company of March 10, 1998(2)
and Principal Occupation Director ---------------------
Name Age During the Past Five Years Since No. %
---------------------- --- -------------------------- ------- ----------- -----
<S> <C> <C> <C> <C> <C>
Charles Delman 72 Director; retired; Chairman, 1994 30,110(9) *
President and Chief Executive
Officer of ESB Bancorp, Inc.
from June 1989 to March
1994 and President of
Economy from 1971 to
December 1992. Chairman
of Economy from January
1993 to March 1994.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as
Position with the Company of March 10, 1998(2)
and Principal Occupation Director ---------------------
Name Age During the Past Five Years Since No. %
---------------------- --- -------------------------- ------- ----------- -----
<S> <C> <C> <C> <C> <C>
Edmund C. Smith 77 Director; retired; former 1994 24,870(10) *
Works Manager, Armco
Steel, Ambridge,
Pennsylvania.
</TABLE>
- ------------------------------
* Amounts to less than 1.0% of the issued and outstanding Common Stock.
(1) Includes service with ESB Bank and all predecessors thereto.
(2) Based on information furnished by the respective individuals. For the
purposes of the preceding tables, pursuant to rules promulgated by the SEC
under the Exchange Act, a person or entity is considered to beneficially
own shares of Common Stock if the person or entity has or shares (i) voting
power, which includes the power to vote or to direct the voting of the
shares, or (ii) investment power, which includes the power to dispose or
direct the disposition of the shares. Unless otherwise indicated, a
director has sole voting power and sole investment power with respect to
the indicated shares. Shares which are subject to stock options and which
may be exercised within 60 days of March 10, 1998 are deemed to be
outstanding for the purpose of computing the percentage of Common Stock
beneficially owned by such person.
(3) Includes 4,300 shares owned jointly with Mr. Blank's wife, with whom voting
and dispositive power is shared, 14,000 shares held in Mr. Blank's IRA,
4,549 shares held in Mr. Blank's Keogh Account and 10,230 shares which may
be acquired by Mr. Blank upon the exercise of stock options.
(4) Includes 12,600 shares held by Mr. Kildoo's wife, 72,587 shares owned
jointly with Mr. Kildoo's wife, with whom voting and dispositive power is
shared, 3,421 shares owned jointly by Mr. Kildoo's wife and mother-in-law,
and 3,801 shares owned jointly with Mr. Kildoo's sons, all of which Mr.
Kildoo may be deemed to beneficially own, and 19,300 shares which may be
acquired by Mr. Kildoo upon the exercise of stock options.
(5) Includes 598 shares held by Mr. Thaner's wife, 7,891 shares owned jointly
with Mr. Thaner's wife, with whom voting and dispositive power is shared,
54 shares held in Mr. Thaner's IRA, 39 shares held in Mr. Thaner's wife's
IRA, 65 shares held in Mr. Thaner's wife's profit sharing plan, and 17,859
shares which may be acquired by Mr. Thaner upon the exercise of stock
options.
(Footnotes continued on following page)
7
<PAGE>
- ------------------------------
(6) Includes 16,855 shares held by Mr. Skuba's wife, 21,514 shares owned
jointly with Mr. Skuba's wife, with whom voting and dispositive power is
shared, 1,852 shares held in trust for Mr. Skuba's son for which Mr. Skuba
is custodian, 529 shares held in Mr. Skuba's IRA and 13,703 shares which
may be acquired by Mr. Skuba upon the exercise of stock options. Does not
include 20,886 shares owned by the Ellwood City Hospital, of which Mr.
Skuba serves as President and Chief Executive Officer and as to which
beneficial ownership is disclaimed.
(7) Includes 890 shares held in trust for Ms. Zuschlag's five nieces and
nephews, for which she is custodian, 176 shares held in trust for Ms.
Zuschlag's two godsons, for which she is custodian, 3,502 shares held in
Ms. Zuschlag's IRA, 70,915 shares which may be acquired by Ms. Zuschlag
upon the exercise of stock options and 9,106 shares held by the Company's
ESOP for the account of Ms. Zuschlag. Does not include 601 shares held by
a trust established by the Company to fund certain benefits to be paid to
Ms. Zuschlag pursuant to an Excess Benefit Plan. Ms. Zuschlag does not
possess voting or investment power with respect to such shares. See
"Executive Compensation - Excess Benefit Plan."
(8) Includes 104,894 shares owned jointly with Mr. Salsgiver's wife, with whom
voting and dispositive power is shared, 5,713 shares held in Mr.
Salsgiver's IRA and 35,589 shares which may be acquired by Mr. Salsgiver
upon the exercise of stock options.
(9) Includes 13,109 shares owned by Mr. Delman's wife, 781 shares held in Mr.
Delman's IRA, 11,280 shares which may be acquired by Mr. Delman upon the
exercise of stock options and 4,940 shares held by the Company's ESOP for
the account of Mr. Delman.
(10) Includes 9,240 shares which may be acquired by Mr. Smith upon the exercise
of stock options.
Executive Officers Who Are Not Directors
The following table sets forth certain information with respect to the
executive officers of the Company who are not also directors of the Company.
All executive officers of the Company are elected annually by the Board of
Directors and shall serve at the discretion of the Board of Directors.
8
<PAGE>
<TABLE>
<CAPTION>
Position with the Company and Principal Occupation
Name Age During the Past Five Years
- ------------------ --- --------------------------------------------------------
<S> <C> <C>
Frank D. Martz 42 Senior Vice President of Operations of the Company since
April 1993 and Secretary of the Company since February
1991; Senior Vice President of Operations of ESB Bank
since April 1993 and Secretary of ESB Bank since
November 1989; Vice President of Operations of the
Company from February 1991 through April 1993 and of
ESB Bank from November 1988 through April 1993.
Charles P. Evanoski 39 Senior Vice President and Chief Financial Officer of the
Company and ESB Bank since April 1993; Vice President
of the Company from November 1991 through April 1993
and Treasurer/Controller of the Company from February
1991 through April 1993; Vice President of ESB Bank
from November 1991 through April 1993 and
Treasurer/Controller of ESB Bank from November 1988
through April 1993.
Todd F. Palkovich 43 Senior Vice President of Lending of the Company and
ESB Bank since April 1993; Vice President of Lending of
the Company and ESB Bank from March 1991 through
April 1993; Commercial Loan Officer with Union National
Bank of Pittsburgh from 1987 to March 1991.
Robert C. Hilliard 48 Senior Vice President of Internal Audit/Compliance of
the Company and ESB Bank since March 1995. President
and Chief Executive Officer of Economy Savings Bank,
PaSA ("Economy") from January 1993 to March 1995.
Vice President, Treasurer and Chief Financial Officer of
ESB Bancorp, Inc. from June 1989 to March 1994 and
Vice President, Treasurer and Chief Financial Officer of
Economy from April 1981 to December 1992. Mr.
Hilliard is a certified public accountant.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Position with the Company and Principal Occupation
Name Age During the Past Five Years
- ------------------ --- --------------------------------------------------------
<S> <C> <C>
William C. Marsh 31 Vice President, Treasurer and Controller of the Company
and ESB Bank since January 1998; Vice President and
Controller of the Company and ESB Bank from June 1997
to January 1998; Executive Vice President and Chief
Financial Officer of First Financial Corporation of
Western Maryland from February 1995 to May 1997;
Manager at KPMG Peat Marwick, LLP from January 1988
to February 1995. Mr. Marsh is a certified public
accountant.
</TABLE>
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the Company's Common Stock to
file reports of ownership and changes in ownership with the SEC and the National
Association of Securities Dealers, Inc. Officers, directors and greater than
10% stockholders are required by regulation to furnish the Company with copies
of all Section 16(a) forms they file. The Company knows of no person who owns
10% or more of the Company's Common Stock.
Based solely on review of the copies of such forms furnished to the
Company, the Company believes that during 1997, all Section 16(a) filing
requirements applicable to its officers and directors were complied with, except
that Mr. Thaner was late once in reporting one transaction.
The Board of Directors and Its Committees
Regular meetings of the Board of Directors of the Company are held on a
monthly basis and special meetings of the Board of Directors of the Company are
held from time-to-time as needed. There were 27 meetings of the Board of
Directors of the Company held during the 12 months ended December 31, 1997. No
director attended fewer than 75% of both the aggregate total number of meetings
of the Board of Directors held during the 12 months ended December 31, 1997 and
the total number of meetings held by all committees of the Board on which the
director served during such year.
The Board of Directors of the Company has established various standing
committees of the Board, including Executive, Compensation and Audit/Compliance
Committees. The entire Board of Directors of the Company acts as a Nominating
Committee.
10
<PAGE>
The Executive Committee of the Company is authorized to exercise the powers
of the Board of Directors between regular meetings of the Board. Currently,
Messrs. Skuba (Chairman), Salsgiver, Delman and Ms. Zuschlag serve as members of
this Committee. During the 12 months ended December 31, 1997, the Executive
Committee did not meet.
The Compensation Committee of the Company makes recommendations regarding
officer salaries to the Board of Directors. Currently, Messrs. Salsgiver
(Chairman), Kildoo and Smith serve as members of this Committee. During the 12
months ended December 31, 1997, the Compensation Committee met three times.
The Audit/Compliance Committee of the Company reviews the Company's records
and affairs to determine its financial condition, reviews the Company's systems
of internal control with management and the independent auditors, and monitors
the Company's adherence in accounting and financial reporting to generally
accepted accounting principles. Currently, Messrs. Blank (Chairman), Kildoo,
Smith and Thaner serve as members of this Committee. The Audit/Compliance
Committee met five times during the 12 months ended December 31, 1997.
The Company and its subsidiaries have other committees comprised of
officers and directors of the Company and such subsidiaries which meet for
specific purposes. The Boards of Directors of the Company and its subsidiaries
have authority under their respective Bylaws to establish such other committees
from time-to-time as may be deemed necessary.
Directors' Compensation
As of December 1, 1997, except as described below, all non-employee
directors of the Company receive $720 per month (except for Mr. Skuba who
receives $936 per month as Vice Chairman of the Company's Board of Directors)
and are not compensated for attendance at committee meetings. Mr. Salsgiver
receives $1,152 per month as Chairman of the Company's Board of Directors. In
addition, fees are paid to members of the Board of Directors of ESB Bank, Troy
Hill and PennFirst Financial Services, Inc., subsidiaries of the Company. Full-
time employee directors of the Company do not receive any fees for Board or
committee meetings.
During 1997, total compensation paid to directors of the Company amounted
to $63,165 in the aggregate.
EXECUTIVE COMPENSATION
Summary
The following table sets forth a summary of certain information concerning
the compensation awarded to or paid by the Company or its subsidiaries for
services rendered
11
<PAGE>
in all capacities during the last three fiscal years to the President and Chief
Executive Officer and other executive officers of the Company, whose total
compensation during the last fiscal year exceeded $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
====================================================================================================================================
Long Term Compensation
Annual Compensation ---------------------------------------
Other Awards Payouts All Other
Name and Annual --------------------------------------- Compensation
Principal Position Year Salary Bonus Compensation Securities Underlying LTIP
(1) Options Payouts
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Charlotte A. Zuschlag 1997 $229,818 $100,000 $-- 8,800(2) $-- $ 3,805(5)
President and Chief 1996 200,346 25,000 -- 8,790(3) -- 28,282(6)
Executive Officer 1995 184,861 20,000 -- 5,500(3) -- 34,777(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Charles P. Evanoski 1997 $ 95,439 $ 18,300 $-- 3,300(2) $-- $ 3,805(5)
Senior Vice President and 1996 87,800 11,000 -- 3,291(3) -- 16,941(6)
Chief Financial Officer 1995 80,443 6,400 -- 2,200(3) -- 18,834(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Frank D. Martz 1997 $ 95,439 $ 18,300 $-- 3,300(2) $-- $ 3,805(5)
Senior Vice President of 1996 87,800 11,000 -- 3,291(3) -- 16,941(6)
Operations and Secretary 1995 80,443 6,400 -- 2,200(3) -- 18,834(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Todd F. Palkovich 1997 $ 95,439 $ 18,300 $-- 3,300(2) $-- $ 3,805(5)
Senior Vice President of 1996 87,800 11,000 -- 3,291(3) -- 16,941(6)
Lending 1995 80,443 6,400 -- 2,200(3) -- 18,834(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Robert C. Hilliard 1997 $ 88,356 $ 17,320 $-- 3,300(2) $-- $ 3,699(5)
Senior Vice President of 1996 84,106 10,000 -- 3,291(3) -- 16,209(6)
Internal Audit/Compliance 1995 77,132 22,650 -- 2,000(3)(4) -- 18,065(7)
====================================================================================================================================
</TABLE>
- -----------------------
(1) Does not include amounts attributable to miscellaneous benefits received by
the named executive officer, including the payment of club membership dues
and the use and maintenance of an automobile owned by ESB Bank. In the
opinion of management of the Company, the costs to the Company of providing
such benefits to the named executive officer during the year ended December
31, 1997 did not exceed the lesser of $50,000 or 10% of the total of annual
salary and bonus reported for such individual.
(2) Consists of awards granted pursuant to the Company's 1997 Stock Option Plan
(as adjusted for a 10% stock dividend).
(3) Consists of awards granted pursuant to the Company's 1992 Stock Incentive
Plan (as adjusted for any subsequent stock splits and a 10% stock
dividend).
(4) Exercised prior to the 10% stock dividend.
(Footnotes continued on following page)
12
<PAGE>
- -------------------
(5) During the year ended December 31, 1997, consists of amounts allocated,
accrued or paid by the Company on behalf of Ms. Zuschlag and Messrs.
Evanoski, Martz, Palkovich and Hilliard pursuant to the Retirement Savings
and Profit Sharing Plan and Trust ("Profit Sharing Plan") of $3,805,
$3,805, $3,805, $3,805 and $3,699, respectively. ESOP allocations have not
yet been made for 1997.
(6) During the year ended December 31, 1996, consists of amounts allocated,
accrued or paid by the Company on behalf of Ms. Zuschlag and Messrs.
Evanoski, Martz, Palkovich and Hilliard pursuant to the Profit Sharing
Plan of $5,247, $3,458, $3,458, $3,458 and $3,294, respectively. During
the year ended December 31, 1996, consists of amounts allocated, accrued or
paid by the Company on behalf of Ms. Zuschlag and Messrs. Evanoski, Martz,
Palkovich and Hilliard pursuant to the ESOP of $23,035, $13,483, $13,483,
$13,483 and $12,915, respectively.
(7) During the year ended December 31, 1995, consists of amounts allocated,
accrued or paid by the Company on behalf of Ms. Zuschlag and Messrs.
Evanoski, Martz, Palkovich and Hilliard pursuant to the Profit Sharing Plan
of $5,009, $2,870, $2,870, $2,870 and $2,758, respectively. During the
year ended December 31, 1995, consists of amounts allocated, accrued or
paid by the Company on behalf of Ms. Zuschlag and Messrs. Evanoski, Martz,
Palkovich and Hilliard pursuant to the ESOP of $29,768, $15,964, $15,964,
$15,964 and $15,307, respectively.
Stock Options
The following table sets forth certain information concerning individual
grants of stock options pursuant to the Company's 1997 Stock Option Plan to the
named executive officers during the year ended December 31, 1997. There were no
stock option grants pursuant to either the Company's 1990 Stock Option Plan or
1992 Stock Incentive Plan to the named executive officers during 1997.
<TABLE>
<CAPTION>
=================================================================================================================
Potential Realizable Value at
Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term(4)
- -----------------------------------------------------------------------------------------------------------------
% of Total
Options
Options Granted to Exercise Expiration
Name Granted(1) Employees(2) Price(1)(3) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Charlotte A. Zuschlag 8,800 19.7% $12.84 6/16/2007 $66,088 $165,176
- ------------------------------------------------------------------------------------------------------------------
Charles P. Evanoski 3,300 7.4% $12.84 6/16/2007 $24,783 $ 61,941
- ------------------------------------------------------------------------------------------------------------------
Frank D. Martz 3,300 7.4% $12.84 6/16/2007 $24,783 $ 61,941
- ------------------------------------------------------------------------------------------------------------------
Todd F. Palkovich 3,300 7.4% $12.84 6/16/2007 $24,783 $ 61,941
- ------------------------------------------------------------------------------------------------------------------
Robert C. Hilliard 3,300 7.4% $12.84 6/16/2007 $24,783 $ 61,941
==================================================================================================================
</TABLE>
(Footnotes on following page)
13
<PAGE>
- ----------------------------
(1) Adjusted for a 10% stock dividend.
(2) Percentage of options to purchase 44,770 shares of common stock granted to
all employees during 1997.
(3) The exercise price was based on the market price of the common stock on the
date of grant.
(4) Assumes compounded rates of return for the remaining life of the options
and future stock prices of $20.35 and $31.61 at compounded rates of return
of 5% and 10%, respectively.
The following table sets forth certain information concerning exercises of
stock options granted pursuant to the Company's 1997 Stock Option Plan, the 1992
Stock Incentive Plan and the 1990 Stock Option Plan by the named executive
officers during the year ended December 31, 1997. All options were exercisable
at December 31, 1997.
<TABLE>
<CAPTION>
================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------
Number of Value of
Securities Underlying Unexercised
Name Shares Acquired Unexercised Options Options at Year
on Exercise Value Realized at Year End(1) End(2)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charlotte A. Zuschlag -- $-- 70,915 $832,509
- ----------------------------------------------------------------------------------------------------------------
Charles P. Evanoski -- -- 13,142 98,033
- ----------------------------------------------------------------------------------------------------------------
Frank D. Martz -- -- 13,142 98,033
- ----------------------------------------------------------------------------------------------------------------
Todd F. Palkovich -- -- 13,142 98,033
- ----------------------------------------------------------------------------------------------------------------
Robert C. Hilliard -- -- 6,591 41,486
================================================================================================================
</TABLE>
- --------------------------
(1) As adjusted for subsequent stock splits and a 10% stock dividend.
(2) Based on a per share market price of $18.625 at December 31, 1997.
Employment Agreement
On June 13, 1990, ESB Bank entered into a three-year employment agreement
(the obligations of which were assumed by the Company) with Ms. Zuschlag, the
Company's President and Chief Executive Officer ("Employment Agreement").
Pursuant to the Employment Agreement, the salary level for Ms. Zuschlag may be
adjusted each year as determined by the Board of Directors. Effective December
1, 1997, such amount was
14
<PAGE>
adjusted to $251,350. The Employment Agreement is automatically renewed for
successive one-year terms on each anniversary date of the commencement of the
Employment Agreement unless either the Board of Directors or Ms. Zuschlag
provides contrary written notice to the other not less than 45 days in advance
of such anniversary date. The Employment Agreement is terminable by the Company
for just cause, as defined, at any time upon written notice or based upon
certain events specified by the rules and regulations of the Office of Thrift
Supervision ("OTS"). The Employment Agreement also contains provisions which
provide Ms. Zuschlag with specified benefits in the event that she is terminated
subsequent to a change in control, as defined, of the Company or Ms. Zuschlag
terminates her employment subsequent to a change in control for good reason, as
defined.
The Employment Agreement defines "change in control" to include any of the
following (i) a change in control as defined in 12 C.F.R. Section 574.4(a) and
(b) subject to the provisions of 12 C.F.R. Section 574.4(c); (ii) any change in
control required to be reported pursuant to Item 6(e) of Schedule 14A
promulgated under the Exchange Act; (iii) the acquisition of beneficial
ownership by any person (as defined in Sections 13(d) and 14(d) of the Exchange
Act) of 25% or more of the combined voting power of the Company's then
outstanding securities; or (iv) during any period of two consecutive years, a
change in the majority of the Board of Directors for any reason unless the
election of each new director was approved by at least two-thirds of the
directors then still in office who were directors at the beginning of the
period.
The Employment Agreement provides for severance payments and other benefits
in the event of involuntary termination of employment in connection with any
change in control of the Company. Severance payments will also be provided on a
similar basis in connection with a voluntary termination of employment where,
subsequent to an acquisition of control, Ms. Zuschlag is assigned duties
inconsistent with her position, duties, responsibilities and status immediately
prior to such change in control. The severance payments from the Company will
equal 2.99 times Ms. Zuschlag's average annual compensation for the preceding
three years. Such amount will be paid within five business days following the
termination of employment. As of December 31, 1997, Ms. Zuschlag would be
entitled to severance payments of approximately $848,421 in the event of a
termination of employment in connection with any change in control of the
Company. Section 280G of the Code, states that severance payments which equal
or exceed three times the base compensation of the individual are deemed to be
"excess parachute payments" if they are contingent upon a change in control.
Individuals receiving excess parachute payments are subject to a 20% excise tax
on the amount of such excess payments, and the employer is not entitled to
deduct the amount of such excess payments. The Employment Agreement provides
that if the severance payments to Ms. Zuschlag constitute excess parachute
payments in the opinion of counsel to the Company in consultation with the
Company's independent accountants, then payments shall be reduced to the largest
amount that can be paid without constituting excess parachute payments.
15
<PAGE>
Compensation Committee
Executive compensation is determined by the Compensation Committee of the
Board of Directors. The report of the Compensation Committee with respect to
compensation for the Chief Executive Officer and all other executive officers is
set forth below.
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
The executive compensation program is administered by the Compensation
Committee of the Board of Directors (the "Committee"), which is composed of the
individuals listed below this report, none of whom is a full-time employee
director of the Company. The Committee makes recommendations regarding officer
salaries to the Board of Directors.
The Committee determines the level of salary increases, if any, to take
effect on December 1 after reviewing various published surveys of compensation
paid to executives performing similar duties for financial institutions and
their holding companies, with a particular focus on the level of compensation
paid by comparable institutions in ESB Bank's market. Also, it is the policy of
the Committee to determine the salary components of executive compensation upon
the basis of corporate performance, although the performance factors which the
Committee considers are profitability, capital levels, and performance relative
to such industry standards as problem asset levels, loan production, regulatory
compliance, and asset-liability management. The Committee also considers
whether or not the overall value of the Company has improved from year to year.
The Company's executive compensation program has been designed to:
1. Align the interests of executives with the interests of the
stockholders by providing performance based awards in cash and stock; and
2. Allow the Company to compete for and retain executives critical to the
Company's success by providing an opportunity for compensation that is
comparable to the levels offered by other companies in our market.
Stock options were granted to Executive Officers of the Company during
fiscal 1995. Ms. Zuschlag received 5,500 options and Messrs. Evanoski, Martz
and Palkovich received 2,200 options, 2,200 options and 2,200 options,
respectively (adjusted for a subsequent 10% stock dividend). Mr. Hilliard
received 2,000 options which were exercised prior to the 10% stock dividend.
Stock options were granted to Executive Officers of the Company during fiscal
1996. Ms. Zuschlag received 8,790 options and Messrs. Evanoski, Martz,
Palkovich and Hilliard received 3,291 options, 3,291 options, 3,291 options and
3,291 options, respectively (adjusted for a subsequent 10% stock dividend).
Stock options were granted to Executive Officers of the Company during fiscal
1997. Ms. Zuschlag received 8,800
16
<PAGE>
options and Messrs. Evanoski, Martz, Palkovich and Hilliard received 3,300
options, 3,300 options, 3,300 options and 3,300 options, respectively (adjusted
for a subsequent 10% stock dividend).
Bonuses were paid to Executive Officers of the Company during fiscal 1995.
Ms. Zuschlag received $20,000. Messrs. Evanoski, Martz, Palkovich and Hilliard
were paid $6,400, $6,400, $6,400 and $22,650, respectively. Bonuses were paid
to Executive Officers of the Company during fiscal 1996. Ms. Zuschlag received
$25,000. Messrs. Evanoski, Martz, Palkovich and Hilliard were paid $11,000,
$11,000, $11,000 and $10,000, respectively. Bonuses were paid to Executive
Officers of the Company during fiscal 1997. Ms. Zuschlag received $100,000.
Messrs. Evanoski, Martz, Palkovich and Hilliard were paid $18,300, $18,300,
$18,300 and $17,320, respectively.
Ms. Zuschlag's salary increased from $184,861 for fiscal 1995 to $200,346
for fiscal 1996 to $229,818 for fiscal 1997. Messrs. Evanoski, Martz and
Palkovich's compensation increased from $80,443 for fiscal 1995 to $87,800 for
fiscal 1996 to $95,439 for fiscal 1997. Mr. Hilliard's compensation increased
from $77,132 for fiscal 1995 to $84,106 for fiscal 1996 to $88,356 for fiscal
1997. At the meeting of the Committee that determined Executive Officers
salaries to be effective December 1, 1997, the Committee reviewed and considered
various published compensation surveys, the Executive Officers increased scope
of responsibilities relating to ESB Bank's and Troy Hill's continuing growth as
well as the aforementioned factors. After reviewing the aforementioned factors,
the Committee recommended to the Board of Directors an increase in salary to a
level of $251,350 for Ms. Zuschlag, a level of $102,600 for Messrs. Evanoski,
Martz and Palkovich and a level of $94,160 for Mr. Hilliard effective December
1, 1997.
The Compensation Committee
William B. Salsgiver (Chairman)
Lloyd L. Kildoo
Edmund C. Smith
17
<PAGE>
Performance Graph
The following two graphs compare the yearly cumulative total return on the
Common Stock over five-year and seven-year (reflecting consummation of the
Bank's reorganization into the holding company form of organization on July 1,
1991) measurement periods with (i) the yearly cumulative total return on the
stocks included in the S&P 500 Total Return Index and (ii) the yearly cumulative
total return on the stocks included in the SNL Securities All Banks and Thrifts
Index. All of these cumulative returns are computed assuming the reinvestment
of dividends at the frequency with which dividends were paid during the
applicable year.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG PENNFIRST BANCORP., INC., S&P 500, SNL ALL BANKS AND THRIFTS
<CAPTION>
Measurement period
(Fiscal year Covered) PENNFIRST BANCORP., INC. S&P 500 SNL ALL BANKS AND THRIFTS
- --------------------- ------------------------ ------- -------------------------
<S> <C> <C> <C>
Measurement PT -
FYE 12/31/92 $100.00 $100.00 $100.00
FYE 12/31/93 $100.19 $110.08 $110.97
FYE 12/31/94 $ 87.36 $111.53 $108.52
FYE 12/31/95 $109.82 $153.44 $168.94
FYE 12/31/96 $118.25 $188.52 $234.17
FYE 12/31/97 $187.90 $251.44 $359.47
</TABLE>
18
<PAGE>
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF SEVEN YEAR CUMULATIVE RETURN
AMONG PENNFIRST BANCORP, INC., S&P 500, AND SNL ALL BANK & THRIFT INDEX
<CAPTION>
Measurement period
(Fiscal year Covered) PENNFIRST BANCORP, INC. S&P 500 SNL ALL BANK & THRIFT INDEX
- --------------------- ------------------------ ------- ---------------------------
<S> <C> <C> <C>
Measurement PT -
FYE 12/31/90 $100.00 $100.00 $100.00
FYE 12/31/91 $168.02 $130.47 $162.37
FYE 12/31/92 $304.09 $140.41 $222.96
FYE 12/31/93 $304.67 $154.56 $247.42
FYE 12/31/94 $265.65 $156.60 $241.95
FYE 12/31/95 $333.94 $215.44 $376.67
FYE 12/31/96 $359.57 $264.70 $522.10
FYE 12/31/97 $571.38 $353.03 $801.47
</TABLE>
Excess Benefit Plan
On October 30, 1996, the Company adopted an Excess Benefit Plan ("EBP") for
the purpose of permitting Ms. Zuschlag, and any other employees of the Company
who may be designated pursuant to the EBP, to receive certain benefits that Ms.
Zuschlag and any other employees of the Company otherwise would be eligible to
receive under the Company's Retirement Plan and ESOP but for the limitations set
forth in Sections 401(a)(17), 402(g) and 415 of the Internal Revenue Code of
1986, as amended (the "Code"). Pursuant to the EBP, during any plan year the
Company shall make matching contributions on behalf of the participant in an
amount equal to the amount of matching contributions that would have been made
by the Company on behalf of the participant but for limitations in the Code,
less the actual amount of matching contributions actually made by the Company on
behalf of the participant. Finally, the EBP generally provides that during any
plan year a participant shall receive a supplemental ESOP allocation in an
amount equal to the amount which
19
<PAGE>
would have been allocated to the participant but for limitations in the Code,
less the amount actually allocated to the participant pursuant to the ESOP. The
supplemental benefits to be received by a participant pursuant to the EBP shall
be credited to an account maintained pursuant to the EBP within 180 days after
the end of each plan year. In connection with its adoption of the EBP, the
Company adopted a trust which currently holds 601 shares of Common Stock to fund
its obligation to Ms. Zuschlag under the EBP.
Indebtedness of Management
In accordance with applicable federal laws and regulations, ESB Bank and
Troy Hill offer mortgage loans to its directors, officers and full-time
employees for the financing of their primary residences as well as various
consumer loans. These loans are generally made on substantially the same terms
as those prevailing at the time for comparable transactions with non-affiliated
persons. It is the belief of management that these loans neither involve more
than the normal risk of collectibility nor present other unfavorable features.
Section 22(h) of the Federal Reserve Act generally provides that any credit
extended by a savings institution to its executive officers, directors and, to
the extent otherwise permitted, principal stockholder(s), or any related
interest of the foregoing, must (i) be on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions by the savings association with non-affiliated parties;
(ii) be pursuant to underwriting standards that are no less stringent than those
applicable to comparable transactions with non-affiliated parties; (iii) not
involve more than the normal risk of repayment or present other unfavorable
features; and (iv) not exceed, in the aggregate, the institution's unimpaired
capital and surplus, as defined.
The following table sets forth information as to all directors and
executive officers of the Company, including members of their immediate families
and affiliated entities, who had loans with ESB Bank aggregating $60,000 or more
during the 12 months ended December 31, 1997. No director or executive officer
of the Company, including members of their immediate families and affiliated
entities, had loans with Troy Hill aggregating $60,000 or more during the 12
months ended December 31, 1997.
<TABLE>
<CAPTION>
Highest Interest
Year Balance Principal Rate
Name and Position Nature of Loan from 1/1/97 Balance at as of
or Relationship Indebtedness Made to 12/31/97 12/31/97 12/31/97
- ------------------------ ---------------------- ---- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
Perry Homes(1) Commercial real estate 1972 $ 45,546 $ 2,588 8.00%
Commercial real estate 1974 231,274 191,709 9.00
Commercial real estate 1974 28,703 18,378 8.50
Commercial real estate 1976 122,666 104,715 9.25
Ellwood City Hospital(2) Commercial business 1994 1,105,012 613,895 5.00
</TABLE>
(Footnotes on following page)
20
<PAGE>
- -----------------------
(1) Mr. Salsgiver, a director of the Company since 1991 and ESB Bank since
1987, is one of the principals of Perry Homes, a property development and
construction firm.
(2) Mr. Skuba, a director of the Company since 1991 and ESB Bank since 1988, is
the President and Chief Executive Officer of the Ellwood City Hospital.
PROPOSAL TO AMEND THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION TO CHANGE THE CORPORATE NAME
TO ESB FINANCIAL CORPORATION
The Board of Directors has unanimously adopted, subject to stockholder
approval, a proposal to amend Article 1 of the Company's Amended and Restated
Articles of Incorporation to change the corporate name to "ESB Financial
Corporation."
The Board of Directors believes that the holding company name should more
closely relate to the name of the Company's lead savings bank and, thereby, be
better recognized by our customers and stockholders. The Board sees geographic
limitations in the name "PennFirst Bancorp, Inc.," and accordingly, recommends
that the holding company name be changed to "ESB Financial Corporation."
Subject to stockholder approval, when effective, the stock of ESB Financial
Corporation will trade on the Nasdaq National Market under the symbol "ESBF."
The change of the Company's corporate name will not effect the name of ESB
Bank, which will continue to operate as a community savings bank under its
existing name. Later this year, subject to the approval of the Office of Thrift
Supervision, we plan to merge Troy Hill, a wholly-owned savings bank subsidiary,
into ESB Bank, and ESB Bank will then be the Company's only savings bank
subsidiary.
The description of the proposed Amendment is qualified in its entirety by
reference to the complete text of the Amendment which appears as Appendix A.
The Board of Directors recommends that you vote FOR approval of the
proposed Amendment. A majority of the total votes eligible to be cast at the
Annual Meeting is required for approval of the proposed Amendment.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed KPMG Peat Marwick LLP,
as independent auditors for the Company for the year ending December 31, 1998,
and further directed that the selection of auditors be submitted for
ratification by the
21
<PAGE>
stockholders at the Annual Meeting. The Company has been advised by KPMG Peat
Marwick LLP that neither the firm nor any of its associates has any relationship
with the Company or its subsidiaries other than the usual relationship that
exists between independent public accountants and clients. KPMG Peat Marwick
LLP will have representatives at the Annual Meeting who will have an opportunity
to make a statement, if they so desire, and will be available to respond to
appropriate questions.
The Board of Directors recommends that you vote FOR the ratification of the
appointment of KPMG Peat Marwick LLP, as independent auditors for the year
ending December 31, 1998. A majority of the total votes cast at the Annual
Meeting is required for ratification of the appointment of the independent
auditors.
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than those matters described in this Proxy Statement. However, if any
other matters should properly come before the Annual Meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.
The cost of solicitation of proxies will be borne by the Company. The
Company has retained Morrow & Company, a professional proxy solicitation firm,
to assist in the solicitation of proxies. The fee arrangement with such firm is
$3,000 plus reimbursement for out-of-pocket expenses. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of the Common Stock. In addition to solicitations by mail,
directors, officers and employees of the Company may solicit proxies personally
or by telephone without additional compensation.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
solicitation materials to be used in connection with the next Annual Meeting of
Stockholders of the Company, must be received at the principal executive offices
of the Company, 600 Lawrence Avenue, Ellwood City, Pennsylvania 16117,
Attention: Secretary, no later than Friday, November 20, 1998. If such proposal
is in compliance with all of the requirements of Rule 14a-8 promulgated under
the Exchange Act, it will be included in the Company's Proxy Statement and set
forth on the form of proxy issued for the next Annual Meeting of Stockholders.
It is urged that any such proposals be sent by certified mail, return receipt
requested.
22
<PAGE>
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Article 10.F of the Company's
Articles of Incorporation, which provides that to be properly brought before an
annual meeting, business must be (a) properly brought before the meeting by or
at the direction of the Board of Directors or (b) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the Company. To be timely, a
stockholder's notice must be delivered to, or mailed and received at, the
principal executive offices of the Company not less than 60 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders of
the Company. A stockholder's notice must set forth, as to each matter the
stockholder proposes to bring before an annual meeting, (a) a brief description
of the business desired to be brought before the annual meeting and (b) certain
other information set forth in the Articles of Incorporation. No stockholder
proposals have been received by the Company in connection with the Annual
Meeting.
ANNUAL REPORTS AND FINANCIAL STATEMENTS
Stockholders of the Company as of the Voting Record Date for the Annual
Meeting are being forwarded a copy of the Company's Annual Report to
Stockholders for the twelve months ended December 31, 1997 ("Annual Report").
Included in the Annual Report are the consolidated statements of financial
condition of the Company as of December 31, 1996 and 1997 and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1997,
prepared in accordance with generally accepted accounting principles, and the
related report of the Company's independent public accountants. The Annual
Report is not a part of this Proxy Statement.
Upon receipt of a written request, the Company will furnish to any
stockholder without charge a copy of its Annual Report on Form 10-K filed with
the SEC under the Exchange Act for the year ended December 31, 1997. Upon
written request, the Company will furnish to any such stockholder a copy of the
exhibits to the Annual Report on Form 10-K. Such written requests should be
directed to PennFirst Bancorp, Inc., 600 Lawrence Avenue, Ellwood City,
Pennsylvania 16117, Attention: Secretary. The Annual Report on Form 10-K is not
a part of this Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Frank D. Martz
Frank D. Martz
Senior Vice President of Operations and
Secretary
March 20, 1998
Ellwood City, Pennsylvania
23
<PAGE>
APPENDIX A
PROPOSED AMENDMENT TO THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF PENNFIRST BANCORP, INC.
Article 1 of the Amended and Restated Articles of Incorporation
("Articles") of PennFirst Bancorp, Inc. is proposed to be amended in the manner
described below. If the proposed amendment is adopted, the words contained
within the bracketed and bold-faced portions of Article 1 will be adopted, while
the words underlined and in bold-face will be deleted from the Articles.
Article 1. Name. The name of the corporation is PennFirst Bancorp, Inc.
-----------------------
[ESB Financial Corporation] (hereinafter referred to as the "Corporation").
24
<PAGE>
PENNFIRST BANCORP, INC. REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PENNFIRST
BANCORP, INC. ("COMPANY") FOR USE ONLY AT THE ANNUAL MEETING OF STOCKHOLDERS TO
BE HELD ON APRIL 21, 1998 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of the Company, or
any successors thereto, as proxies, with full powers of substitution, to vote
the shares of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Connoquenessing Country Club located at RD #2, Route
65, Ellwood City, Pennsylvania, on April 21, 1998, at 10:00 a.m., Eastern Time,
or at any adjournment thereof, with all the powers that the undersigned would
possess if personally present, as indicated on the reverse side hereof.
1. Election of Directors
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to
(except as marked to the vote for all nominees
contrary.) listed.
Nominees for three-year term: George William Blank, Jr., Lloyd L. Kildoo
and Edwin A. Thaner
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. PROPOSAL to amend the Company's Amended and Restated Articles of
Incorporation to change the corporate name to ESB Financial Corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment of KPMG Peat Marwick LLP as the
Company's independent auditors for fiscal 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
In their discretion, the proxies are authorized to vote with respect to
approval of the minutes of the last meeting of stockholders, the election of any
person as a director if the nominee is unable to serve or for good cause will
not serve, matters incident to the conduct of the meeting, and upon such other
matters as may properly come before the meeting.
The Board of Directors recommends that you vote FOR the nominees listed on
the reverse side hereof and FOR Proposals 2 and 3. You are encouraged to
specify your choices by marking the appropriate boxes on the reverse side;
however, you need not mark any boxes if you wish to vote in accordance with the
Board of Directors' recommendations. This proxy may not be voted for any person
who is not a nominee of the Board of Directors of the Company. This proxy may
be revoked at any time before it is exercised.
Shares of Common Stock of the Company will be voted as specified. If no
specification is made, shares will be voted FOR the election of the Board of
Directors' nominees to the Board of Directors, FOR Proposals 2 and 3, and
otherwise at the discretion of the proxies.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders of the Company called for April 21, 1998, a Proxy Statement for
the Annual Meeting and the 1997 Annual Report to Stockholders.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE
ENCLOSED ENVELOPE.
Date:
-----------------------------------------, 1998
-----------------------------------------------------
Signature
-----------------------------------------------------
Signature
Please sign exactly as your name(s) appear(s) on this
proxy. Only one signature is required in case of a
joint account. When signing in a representative
capacity, please give title.
