BAYONNE, N.J., July 19, 2019 (GLOBE NEWSWIRE) -- BCB Bancorp, Inc. (the “Company”), (NASDAQ: BCBP), the holding company for BCB Community Bank (the “Bank”), today reported that an increase in total interest income and decreases in the provision for loan losses and non-interest expenses, contributed to second quarter and year-to-date 2019 profits. Net income increased $2.9 million, or 126.0 percent, to $5.2 million for the second quarter of 2019, compared with $2.3 million for the second quarter of 2018. In the preceding quarter, the Company earned $5.5 million. There were no merger related costs associated with the IA Bancorp, Inc. (“IAB”) acquisition during the current quarter or the preceding quarter. This compares to acquisition costs of $2.0 million during the second quarter a year ago.

For the first six months of the year, net income increased $3.7 million, or 53.8 percent, to $10.7 million, compared with $7.0 million for the six months ended June 30, 2018.

“Our second quarter and year-to-date financial results reflect the success of our earnings-focused and conservative growth strategies, which are producing strong core earnings,” stated Thomas Coughlin, President and Chief Executive Officer. “This focus on pricing and profitable relationships resulted in higher net interest income. The on-going benefits of the IAB acquisition also contributed to profitability, as expenses were down through the continued capture of synergies from the transaction. We will continue to look for opportunities to build our relationships and grow our brand of banking throughout our surrounding markets.” 

The IAB acquisition, which was completed during the second quarter of 2018, added approximately $221.4 million in assets, $178.4 million in deposits and $182.6 million in net loans.

Second Quarter 2019 Financial Highlights

  • Net income increased 126.0 percent to $5.2 million in the second quarter of 2019, compared to $2.3 million in the second quarter of 2018.
  • Earnings per diluted share increased to $0.30 in 2Q19 compared to $0.13 in 2Q18.
  • Net interest income, before the provision for loan losses, increased 4.4 percent to $20.9 million in the second quarter, compared to $20.0 million in the second quarter a year ago.
  • Net interest margin was 3.16 percent in the second quarter compared to 3.52 percent in the second quarter a year ago.
  • Total assets increased 8.8 percent to $2.738 billion at June 30, 2019, compared to $2.157 billion a year earlier.
  • Net loans receivable increased 8.5 percent to $2.300 billion at June 30, 2019, compared to $2.120 billion a year earlier.
  • Allowance for loan losses as a percentage of non-accrual loans was 433.4 percent at June 30, 2019, compared to 191.8 percent at June 30, 2018.
  • Tangible book value improved to $11.58 at June 30, 2019 from $10.69 a year ago.
  • Earlier this month, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.14 per share. The dividend will be payable August 23, 2019, to common shareholders of record on August 9, 2019. 
  • The Company issued $6.2 million of private placement common stock which closed in February 2019 and $5.3 million of preferred series G stock, which was issued in January 2019. The Company had also issued $33.5 million of subordinated debt in July 2018 which, for regulatory purposes, is treated as Tier 1 capital for the Bank and Tier 2 capital for the Company, when applicable.

Balance Sheet Review

Total assets increased by $221.6 million, or 8.8 percent, to $2.738 billion at June 30, 2019 from $2.517 billion at June 30, 2018 and increased by $19.7 million, or 0.7 percent, compared to March 31, 2019. The increase in total assets was primarily the result of an increase in total cash and cash equivalents as a result of new deposit relationships, organic loan growth, and the inclusion of operating and finance leases due to accounting standards changes.

Net loans receivable increased by $179.9 million, or 8.5 percent, to $2.300 billion at June 30, 2019 from $2.120 billion at June 30, 2018, and decreased slightly compared to $2.307 billion at March 31, 2019. The organic growth in loans over the first six months of 2019 represented increases of $27.2 million in construction loans, $4.3 million in commercial real estate and multi-family loans, and $603,000 in residential one-to-four family loans, partly offset by decreases of $9.0 million in home equity loans, $624,000 in commercial business loans, and $82,000 in consumer loans. The slight decrease in loans receivable for the current quarter reflects the Company’s growth and capital management strategies.

Total cash and cash equivalents increased by $47.2 million, or 26.2 percent, to $227.6 million at June 30, 2019 from $180.4 million a year ago, and increased by $34.1 million, or 17.6 percent compared to $193.5 million three months earlier. The Company’s level of cash and cash equivalents is a part of the Company’s strategy to maintain strong levels of liquidity. Total investment securities decreased by $13.3 million, or 9.8 percent, to $122.1 million at June 30, 2019 from $135.4 million at June 30, 2018, and decreased by $3.7 million, or 3.0 percent, compared to $125.9 million at March 31, 2019.

On January 1, 2019, the Company adopted Accounting Standards Update ("ASU") No. 2016-02 - Leases, requiring on-balance sheet reporting for all operating and financing leases, which resulted in the recording of $14.7 million in operating lease right-of-use assets and a corresponding $14.7 million in operating lease liabilities at June 30, 2019.

Total deposits increased by $223.3 million, or 11.3 percent, to $2.208 billion at June 30, 2019 from $1.985 billion at June 30, 2018, and increased by $19.6 million, or 0.9 percent, from $2.189 billion at March 31, 2019. Increases over the first six months of 2019 included $45.3 million in money market checking accounts, $14.0 million in non-interest bearing deposits, and $6.9 million in transaction accounts, partly offset by decreases of $36.0 million in certificates of deposit, and $2.7 million in savings and club accounts. The decrease in the Company’s certificates of deposit was related to reduced levels of listing service and brokered certificates of deposit, which saw decreases of $17.3 million and $132.0 million, respectively, during the first six months of 2019. These decreases were primarily related to the decrease in loan funding requirements and allowed the Company to reduce higher cost wholesale funding levels. The Company uses listing service and brokered certificates of deposit as additional sources of deposit liquidity, which totaled $19.6 million and $116.0 million, respectively, at June 30, 2019.

Debt obligations remained flat at $282.5 million at June 30, 2019 and March 31, 2019, and consisted of both Federal Home Loan Bank (“FHLB”) borrowings and subordinated debt balances. Debt obligations decreased when compared to $324.1 million at June 30, 2018. FHLB borrowings reflect the use of long-term advances to augment deposits as the Company’s funding source for originating loans and investing in investment securities. The weighted average interest rate of FHLB advances was 2.18 percent at June 30, 2019. The issuance of subordinated debt was to maintain adequate capital ratios for further growth. The fixed interest rate of subordinated debt balances was 5.625% at June 30, 2019.

Stockholders’ equity increased by $27.1 million, or 14.0 percent, to $221.2 million at June 30, 2019 from $194.1 million at June 30, 2018, and increased by $4.4 million, or 2.0 percent, compared to $216.7 million three months earlier. The year-over-year increase in stockholders’ equity was primarily attributable to the Company’s issuance of $6.2 million of common stock in a private placement which closed in February 2019 and the issuance of $5.3 million of preferred series G stock in a private placement, which was issued in January 2019. Retained earnings increased by $9.8 million to $43.3 million at June 30, 2019 from $33.6 million a year ago, due primarily to the increase in net income, net of dividends paid.

Second Quarter Income Statement Review

Net interest income increased by $875,000, or 4.4 percent, to $20.9 million for the second quarter of 2019 from $20.0 million for the second quarter of 2018. The increase in net interest income resulted primarily from an increase in the average balance of interest-earning assets of $361.0 million, or 15.9 percent, to $2.638 billion for the second quarter of 2019 from $2.277 billion for the second quarter a year ago. There was an increase in the average yield on interest-earning assets of 13 basis points to 4.66 percent for the second quarter of 2019, from 4.53 percent for the second quarter a year ago. There was also an increase in the average balance of interest-bearing liabilities of $304.6 million, or 16.1 percent, to $2.194 billion for the second quarter of 2019 from $1.890 billion for the second quarter a year ago, and an increase in the average rate on interest-bearing liabilities of 59 basis points to 1.80 percent for the second quarter of 2019 from 1.21 percent for the second quarter a year ago. Interest income on loans also included $518,000 of amortization of purchase credit adjustments related to the acquisition of IAB for the three months ended June 30, 2019, which added approximately eight basis points to the average yield on interest earning assets on an annualized basis. Interest expense, net, related to the issuance of subordinated debt in July 2018, totaled $529,000 for the three months ended June 30, 2019, which added approximately seven basis points to the average cost of funds on an annualized basis.

Net interest margin was 3.16 percent for the second quarter of 2019 and 3.52 percent for second quarter of 2018. “The decrease in the net interest margin was the result of the higher interest rate environment, with the increase in the cost of funds outpacing the return on interest earning assets for the short term,” said Coughlin.

Total non-interest income decreased by $235,000, or 15.0 percent, to $1.3 million for the second quarter of 2019 from $1.6 million for the second quarter of 2018. The decrease in total non-interest income was mainly related to lower income from fees and service charges as well as lower gains on sale of loans, partly offset by higher gain on sale of other real estate owned properties and gains on sale of investment securities. Fees and service charges decreased $169,000, or 17.4 percent to $802,000 for the second quarter of 2019 from $971,000 for the second quarter of 2018. The decrease in fees and service charges resulted primarily from lower loan-servicing fee income for the six months ended June 30, 2019 as compared to the same period in the prior year, which relates to less sales of loans in the current year period.

Second quarter 2019 total non-interest expense decreased by $2.1 million, or 13.1 percent, to $13.9 million from $16.0 million for the second quarter a year ago. There were no merger related expenses in the second quarter of 2019, compared to $2.0 million of merger-related expenses in the second quarter a year ago. Salaries and employee benefits expense decreased by $207,000 during the second quarter of 2019 compared to the second quarter a year ago. The decrease in salaries and employee benefits relates in part to a reduction in full-time equivalent employees, from 371 at June 30, 2018 to 366 at June 30, 2019, as part of management’s continued initiative to manage headcount throughout the organization.

The income tax provision increased by $1.1 million, or 93.1 percent, to $2.3 million for the second quarter of 2019 from $1.2 million for the second quarter of 2018, primarily due to the increase in income before taxes. The consolidated effective tax rate for the second quarter of 2019 was 30.7 percent compared to 34.2 percent for the second quarter of 2018. The lower effective tax rate in the current period primarily attributable to an adjustment for the second quarter of 2018, related to an increase in the New Jersey corporate business tax of 2.5 percent which was enacted July 1, 2018, and effective retroactively to January 1, 2018.  

Year to Date Income Statement Review

Net interest income increased by $5.3 million, or 14.7 percent, to $41.8 million for the first six months of 2019 from $36.5 million for the first six months of 2018. Net interest margin was 3.17 percent for the first half of 2019 and 3.46 percent for the first half of 2018. The decrease in the net interest margin was the result of the higher interest rate environment within the period, with the increase in the cost of funds outpacing the return on interest earning assets for the short term. Interest income on loans also included $1.0 million of amortization of purchase credit adjustments related to the acquisition of IAB for the six months ended June 30, 2019, which added approximately eight basis points to the average yield on interest earning assets on an annualized basis. Interest expense, net, related to the issuance of subordinated debt in July 2018, totaled $1.0 million for the six months ended June 30, 2019, which added approximately seven basis points to the average cost of funds on an annualized basis.

Total non-interest income decreased by $2.0 million, or 39.6 percent, to $3.0 million for the first six months of 2019 from $5.0 million for the same period a year ago. The decrease in total non-interest income mainly related to a decrease in the amount of other non-interest income of $2.2 million, or 95.6 percent, to $102,000 for the first six months of 2019 from $2.3 million for the first six months of 2018. The decrease in other non-interest income was the result of $2.2 million in proceeds from a legal settlement recognized in the first quarter of 2018.

Total non-interest expense decreased by $320,000, or 1.1 percent, to $27.7 million for the first six months of 2019 from $28.0 million for the first six months of 2018. There were no merger-related expenses in the first six months of 2019, compared to $2.2 million in the first six months of 2018. Excluding merger-related expenses, total non-interest expense increased $1.9 million, or 7.2 percent, primarily related to normal inflationary increases and the inclusion of IAB expenses for the full six-month period ending June 30, 2019 as compared to the partial period of April 17 to June 30 in the prior year.

The income tax provision increased by $1.7 million, or 56.6 percent, to $4.8 million for the first six months of 2019 from $3.1 million for the six months of 2018, primarily related to the increase in income before taxes. The consolidated effective tax rate for the first half of 2019 was 30.8 percent compared to 30.5 percent for the first half of 2018.

Asset Quality
The provision for loan losses decreased by $1.3 million, to $755,000 for the second quarter of 2019 from $2.1 million for the second quarter of 2018.  Year-to-date, the provision for loan losses decreased by $1.8 million for the six months ended June 30, 2019, to $1.6 million from $3.4 million for the six months ended June 30, 2018. Non-accruing loans improved to $5.5 million, or 0.24 percent of gross loans at June 30, 2019, compared to $5.7 million, or 0.24 percent of gross loans at March 31, 2019, and $10.8 million, or 0.50 percent of gross loans, a year earlier. Non-accruing loans excluded $7.0 million of Purchased Credit-Impaired loans acquired through the merger with IAB.

Performing troubled debt restructured (“TDR”) loans that were not included in nonaccrual loans at June 30, 2019, were $21.8 million, compared to $23.1 million at March 31, 2019 and $20.7 million at June 30, 2018. Borrowers who are in financial difficulty and who have been granted concessions that may include interest rate reductions, term extensions, or payment alterations are categorized as TDR loans. 

The allowance for loan losses was $23.8 million, or 433.5 percent of non-accruing loans and 1.02 percent of gross loans, at June 30, 2019 as compared to an allowance for loan losses of $23.0 million, or 405.7 percent of non-accruing loans and 0.99 percent of gross loans, at March 31, 2019 and an allowance for loan losses of $20.6 million or 191.8  percent of non-accruing loans and 0.96 percent of gross loans, a year ago.

The Company recognized net recoveries of $30,000 during the second quarter of 2019. This compares to net charge-offs of $244,000 in the first quarter of 2019 and net charge offs of $243,000 in the second quarter a year ago. Year-to-date, the Company recognized $214,000 in net charge-offs compared to $137,000 in net charge-offs in the first six months of 2018.

About BCB Bancorp, Inc.

Established in 2000 and headquartered in Bayonne, N.J., BCB Community Bank is the wholly-owned subsidiary of BCB Bancorp, Inc. (NASDAQ: BCBP). The Bank has 30 branch offices in Bayonne, Carteret, Colonia, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lodi, Lyndhurst, Maplewood, Monroe Township, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, three branches in Hicksville and Staten Island, New York. The Bank provides business and individuals a wide range of loans, deposit products, and retail and commercial banking services. For more information, please go to www.bcb.bank.

Forward-Looking Statements

This release, like many written and oral communications presented by BCB Bancorp, Inc., and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “could,” “may,” “should,” “will,” “would,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.

In addition to factors previously disclosed in the Company’s reports filed with the U.S. Securities and Exchange Commission (the "SEC") and those identified elsewhere in this document, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: difficulties and delays in integrating the Indus-American Bank business or fully realizing cost savings and other benefits of the Merger; business disruption following the Merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of BCB products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and actions of governmental agencies and legislative and regulatory actions and reforms.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

The Company provides measurements and ratios based on tangible stockholders' equity and efficiency ratios. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

For a reconciliation of GAAP to Non-GAAP financial measures included in this press release, see "Reconciliation of GAAP to Non-GAAP Financial Measures" below.

CONTACT: THOMAS COUGHLIN,
PRESIDENT & CEO
THOMAS KEATING, CFO
(201) 823-0700
  

 

 Three Months Ended,   
 June 30, 2019March 31, 2019June 30, 2018June 30, 2019 vs.
March 31, 2019
June 30, 2019 vs.
June 30, 2018
 
Interest and dividend income: (Dollars in thousands)   
Loans, including fees$   28,634  $28,233 $24,048 1.4%19.1% 
Mortgage-backed securities   738   770  837 -4.2%-11.8% 
Other investment securities   197   128  196 53.9%0.5% 
FHLB stock and other interest earning assets   1,173   1,347  615 -12.9%90.7% 
Total interest and dividend income    30,742   30,478  25,696 0.9%19.6% 
               
Interest expense:               
Deposits:              
Demand   1,750   1,576  975 11.0%79.5% 
Savings and club   110   113  105 -2.7%4.8% 
Certificates of deposit   6,097   5,990  3,405 1.8%79.1% 
    7,957   7,679  4,485 3.6%77.4% 
Borrowings   1,920   1,897  1,221 1.2%57.2% 
Total interest expense   9,877   9,576  5,706 3.1%73.1% 
               
Net interest income   20,865   20,902  19,990 -0.2%4.4% 
Provision for loan losses    755   889  2,060 -15.1%-63.3% 
               
Net interest income after provision for loan losses    20,110   20,013  17,930 0.5%12.2% 
               
Non-interest income:               
Fees and service charges   802   883  971 -9.2%-17.4% 
Gain on sales of loans   437   318  576 37.4%-24.1% 
Gain on bulk sale of impaired loans held in portfolio   -    107  - -100.0%-  
Gain (loss) on sales of other real estate owned   45   8  (10)462.5%-550.0% 
Gain on sale of investment securities   21   -  - - -  
Unrealized (loss) gain on equity investments   (26) 291  (33)-108.9%-21.2% 
Other   49   53  59 -7.5%-16.9% 
Total non-interest income    1,328   1,660  1,563 -20.0%-15.0% 
               
Non-interest expense:               
Salaries and employee benefits   6,918   6,915  7,125 - -2.9% 
Occupancy and equipment   2,649   2,630  2,476 0.7%7.0% 
Data processing and service fees   731   721  828 1.4%-11.7% 
Professional fees   473   533  533 -11.3%-11.3% 
Director fees   316   318  201 -0.6%57.2% 
Regulatory assessments   417   457  290 -8.8%43.8% 
Advertising and promotional   123   73  100 68.5%23.0% 
Other real estate owned, net   124   (16) 160 - -22.5% 
Merger related costs   -    -  2,039 - -100.0% 
Other   2,143   2,146  2,228 -0.1%-3.8% 
Total non-interest expense   13,894   13,777  15,980 0.8%-13.1% 
               
Income before income tax provision   7,544   7,896  3,513 -4.5%114.7% 
Income tax provision   2,317   2,445  1,200 -5.2%93.1% 
               
Net Income $   5,227  $5,451 $2,313 -4.1%126.0% 
Preferred stock dividends   342   317  262 7.9%30.5% 
Net Income available to common stockholders $   4,885  $5,134 $2,051 -4.9%138.2% 
               
Net Income per common share-basic and diluted               
Basic$   0.30  $0.32 $0.13 -6.3%130.8% 
Diluted$   0.30  $0.32 $0.13 -6.3%130.8% 
               
Weighted average number of common shares outstanding               
Basic   16,413   16,078  15,610 2.1%5.1% 
Diluted   16,471   16,111  15,748 2.2%4.6% 
      

 

 Six Months Ended,  
 June 30, 2019June 30, 2018June 30, 2019 vs.
June 30, 2018
 
Interest and dividend income: (Dollars in thousands)  
Loans, including fees$   56,867 $43,569 30.5% 
Mortgage-backed securities   1,508  1,536 -1.8% 
Other investment securities   325  300 8.3% 
FHLB stock and other interest earning assets   2,520  1,233 104.4% 
Total interest and dividend income    61,220  46,638 31.3% 
        
Interest expense:        
Deposits:       
Demand   3,326  1,772 87.7% 
Savings and club   223  202 10.4% 
Certificates of deposit   12,087  6,135 97.0% 
    15,636  8,109 92.8% 
Borrowings   3,817  2,099 81.8% 
Total interest expense   19,453  10,208 90.6% 
        
Net interest income   41,767  36,430 14.7% 
Provision for loan losses    1,644  3,402 -51.7% 
        
Net interest income after provision for loan losses    40,123  33,028 21.5% 
        
Non-interest income:        
Fees and service charges   1,685  1,681 0.2% 
Gain on sales of loans   755  1,159 -34.9% 
Gain (loss) on bulk sale of impaired loans held in portfolio   107  (24)-  
Gain (loss) on sales of other real estate owned   53  (10)-  
Gain on sale of investment securities   21  - -  
Unrealized gain (loss) on equity investments   265  (160)-  
Other   102  2,303 -95.6% 
Total non-interest income    2,988  4,949 -39.6% 
        
Non-interest expense:        
Salaries and employee benefits   13,833  13,392 3.3% 
Occupancy and equipment   5,279  4,538 16.3% 
Data processing and service fees   1,452  1,557 -6.7% 
Professional fees   1,006  1,038 -3.1% 
Director fees   634  402 57.7% 
Regulatory assessments   874  529 65.2% 
Advertising and promotional   196  185 5.9% 
Other real estate owned, net   108  191 -43.5% 
Merger related costs   -   2,184 -100.0% 
Other   4,289  3,975 7.9% 
Total non-interest expense   27,671  27,991 -1.1% 
        
Income before income tax provision   15,440  9,986 54.6% 
Income tax provision   4,762  3,041 56.6% 
        
Net Income $   10,678 $6,945 53.8% 
Preferred stock dividends   659  428 54.0% 
Net Income available to common stockholders $   10,019 $6,517 53.7% 
        
Net Income per common share-basic and diluted        
Basic$   0.62 $0.43 44.2% 
Diluted$   0.62 $0.42 47.6% 
        
Weighted average number of common shares outstanding        
Basic   16,245  15,329 6.0% 
Diluted   16,290  15,465 5.3% 
    

 

 June 30, 2019March 31, 2019June 30, 2018June 30, 2019 vs.
March 31, 2019
June 30, 2019 vs.
June 30, 2018
ASSETS (Dollars in thousands)  
Cash and amounts due from depository institutions$   20,660  $18,610 $23,125 11.0%-10.7%
Interest-earning deposits   206,982   174,938  157,320 18.3%31.6%
Total cash and cash equivalents   227,642   193,548  180,445 17.6%26.2%
            
Interest-earning time deposits   735   735  980 - -25.0%
Debt securities available for sale   116,258   117,942  127,291 -1.4%-8.7%
Equity investments   5,901   7,963  8,134 -25.9%-27.5%
Loans held for sale   -    1,347  1,405 -100.0%-100.0%
Loans receivable, net of allowance for loan losses           
of $23,789, $23,004, and $20,640, respectively   2,299,765   2,307,140  2,119,829 -0.3%8.5%
Federal Home Loan Bank of New York stock, at cost   13,821   13,405  16,744 3.1%-17.5%
Premises and equipment, net   19,482   19,684  21,055 -1.0%-7.5%
Operating lease right-of-use asset   14,650   16,019  - -8.5%- 
Accrued interest receivable   9,315   9,750  7,563 -4.5%23.2%
Other real estate owned   1,235   1,746  1,178 -29.3%4.8%
Deferred income taxes   12,962   13,302  11,451 -2.6%13.2%
Goodwill and other intangibles   5,587   5,584  5,691 0.1%-1.8%
Other assets   10,777   10,235  14,798 5.3%-27.2%
Total Assets $   2,738,130  $2,718,400 $2,516,564 0.7%8.8%
            
LIABILITIES AND STOCKHOLDERS' EQUITY           
            
LIABILITIES           
Non-interest bearing deposits$   278,602  $273,370 $229,292 1.9%21.5%
Interest bearing deposits   1,929,620   1,915,263  1,755,584 0.7%9.9%
Total deposits   2,208,222   2,188,633  1,984,876 0.9%11.3%
FHLB advances   245,800   245,800  320,005 - -23.2%
Subordinated debentures   36,693   36,635  4,124 0.2%789.7%
Operating lease liability   14,724   16,059  - -8.3%- 
Other liabilities   11,538   14,555  13,483 -20.7%-14.4%
Total Liabilities    2,516,977   2,501,682  2,322,488 0.6%8.4%
            
STOCKHOLDERS' EQUITY           
Preferred stock: $0.01 par value, 10,000,000 shares authorized   -    -  - - - 
Additional paid-in capital preferred stock   25,016   25,016  19,706 - 26.9%
Common stock: no par value, 20,000,000 shares authorized   -    -  - - - 
Additional paid-in capital common stock   176,767   176,379  175,716 0.2%0.6%
Retained earnings   43,347   40,750  33,570 6.4%29.1%
Accumulated other comprehensive (loss)   (1,929) (3,379) (5,800)-42.9%-66.7%
Treasury stock, at cost   (22,048) (22,048) (29,116)- -24.3%
Total Stockholders' Equity    221,153   216,718  194,076 2.0%14.0%
            
Total Liabilities and Stockholders' Equity $   2,738,130  $2,718,400 $2,516,564 0.7%8.8%
            
Outstanding common shares   16,461   16,398  15,783   
      


  Three Months Ended June 30,
  2019   2018 
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate (3)
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate (3)
                  
  (Dollars in thousands)
Interest-earning assets:               
Loans Receivable$ 2,329,209  $ 28,634  4.92% $2,033,372 $24,048 4.74%
Investment Securities  124,520    935  3.00%  146,760  1,033 2.82%
Interest-earning deposits  184,266    1,173  2.55%  96,853  615 2.55%
Total Interest-earning assets  2,637,995    30,742  4.66%  2,276,985  25,696 4.53%
Non-interest-earning assets  78,478        46,060     
Total assets$ 2,716,473       $2,323,045     
Interest-bearing liabilities:               
Interest-bearing demand accounts$ 341,418  $ 648  0.76% $333,641 $473 0.57%
Money market accounts  253,633    1,102  1.74%  186,650  502 1.07%
Savings accounts  259,398    110  0.17%  264,764  105 0.16%
Certificates of Deposit  1,056,375    6,097  2.31%  876,266  3,405 1.56%
Total interest-bearing deposits  1,910,824    7,957  1.67%  1,661,321  4,485 1.08%
Borrowed funds  283,424    1,920  2.71%  228,353  1,221 2.15%
Total interest-bearing liabilities  2,194,248    9,877  1.80%  1,889,674  5,706 1.21%
Non-interest-bearing liabilities  304,680        244,544     
Total liabilities  2,498,928        2,134,218     
Stockholders' equity  217,545        188,827     
Total liabilities and stockholders' equity$ 2,716,473       $2,323,045     
Net interest income   $ 20,865       $19,990  
Net interest rate spread(1)      2.86%       3.32%
Net interest margin(2)      3.16%       3.52%
                

(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average total interest-earning assets.
(3) Annualized.

   
   
  Six Months Ended June 30,
  2019   2018 
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate (3)
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate (3)
  (Dollars in thousands)
Interest-earning assets:               
Loans Receivable$ 2,322,674  $ 56,867  4.90% $1,876,349 $43,569 4.68%
Investment Securities  125,139    1,833  2.93%  138,133  1,836 2.68%
Interest-earning deposits  185,368    2,520  2.72%  109,937  1,233 2.26%
Total Interest-earning assets  2,633,181    61,220  4.65%  2,124,419  46,638 4.43%
Non-interest-earning assets  70,550        44,647     
Total assets$ 2,703,731       $2,169,066     
Interest-bearing liabilities:               
Interest-bearing demand accounts$ 341,538  $ 1,252  0.73% $323,843 $903 0.56%
Money market accounts  245,368    2,074  1.69%  172,074  869 1.02%
Savings accounts  259,958    223  0.17%  261,792  202 0.16%
Certificates of Deposit  1,070,757    12,087  2.26%  798,672  6,135 1.55%
Total interest-bearing deposits  1,917,621    15,636  1.63%  1,556,381  8,109 1.05%
Borrowed funds  283,442    3,817  2.69%  205,311  2,099 2.06%
Total interest-bearing liabilities  2,201,063    19,453  1.77%  1,761,692  10,208 1.17%
Non-interest-bearing liabilities  290,511        224,561     
Total liabilities  2,491,574        1,986,253     
Stockholders' equity  212,157        182,813     
Total liabilities and stockholders' equity$ 2,703,731       $2,169,066     
Net interest income   $ 41,767       $36,430  
Net interest rate spread(1)      2.88%       3.26%
Net interest margin(2)      3.17%       3.46%
                
                

(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average total interest-earning assets.
(3) Annualized.

  
  
 Financial condition data by quarter
 Q2 2019Q1 2019Q4 2018Q3 2018Q2 2018Q1 2018
       
 (In thousands, except tangible book value)
Total assets $  2,738,130 $  2,718,400 $  2,674,731 $  2,637,868 $  2,516,564 $  2,082,313 
Cash and cash equivalents  227,642  193,548  195,264  206,710  180,445  137,334 
Securities 122,159  125,905  127,007  127,863  135,425  127,324 
Loans receivable, net  2,299,765  2,307,140  2,278,492  2,225,001  2,119,829  1,764,597 
Deposits  2,208,222  2,188,633  2,180,724  2,116,624  1,984,876  1,691,353 
Borrowings  282,493  282,435  282,377  312,319  324,124  204,124 
Stockholders’ equity  221,153  216,718  200,215  195,763  194,076  177,386 
Tangible Book Value 11.58  11.35  11.00  10.78  10.69  10.90 
                   
 Operating data by quarter
 Q2 2019Q1 2019Q4 2018Q3 2018Q2 2018Q1 2018
       
 (In thousands, except for per share amounts)
Net interest income $  20,865 $  20,902 $  21,171 $  20,080 $  19,990 $  16,440 
Provision for loan losses    755    889    821    907    2,060    1,342 
Non-interest income  1,328  1,660  1,159  1,852  1,563  3,386 
Non-interest expense  13,894  13,777  13,884  14,391  15,980  12,011 
Income tax expense  2,317  2,445  2,401  2,040  1,200  1,841 
Net income $  5,227 $  5,451 $  5,224 $  4,594 $  2,313 $  4,632 
Net income per diluted share$  0.30 $  0.32 $  0.31 $  0.27 $  0.13 $  0.29 
Common Dividends declared per share $  0.14 $  0.14 $  0.14 $  0.14 $  0.14 $  0.14 
       
 Financial Ratios
 Q2 2019Q1 2019Q4 2018Q3 2018Q2 2018Q1 2018
Return on average assets  0.77% 0.81% 0.78% 0.72% 0.40% 0.92%
Return on average stockholder’s equity 9.61% 10.55% 10.66% 9.44% 4.90% 10.48%
Net interest margin 3.16% 3.18% 3.24% 3.22% 3.52% 3.34%
Stockholder’s equity to total assets 8.08% 7.97% 7.49% 7.42% 7.71% 8.52%
Efficiency Ratio 62.61% 61.06% 62.18% 65.62% 74.14% 60.58%
                   
 Asset Quality Ratios
 (In thousands, except for ratio %)
 Q2 2019Q1 2019Q4 2018Q3 2018Q2 2018Q1 2018
Non-Accrual Loans$  5,488 $  5,670 $  7,221 $  11,093 $  10,763 $  10,619 
Non-Accrual Loans as a % of Total Loans 0.24% 0.24% 0.31% 0.49% 0.50% 0.60%
ALLL as % of Non-Accrual Loans 433.47% 405.71% 309.64% 193.85% 191.79% 172.68%
Impaired Loans   37,275    40,533    42,408    47,251    50,899    36,199 
Classified Loans   22,679    23,977    26,161    30,179    33,605    20,299 
                   

 

 Recorded Investment in Loans Receivable by quarter  
 Q2 2019Q1 2019Q4 2018Q3 2018Q2 2018Q1 2018
 (In Thousands)
Residential one-to-four family$258,688 $258,184 $258,085 $254,149 $249,996 $238,275 
Commercial and multi-family 1,702,132  1,724,326  1,697,837  1,701,105  1,622,881  1,362,684 
Construction 134,963  114,462  107,783  75,601  56,067  48,433 
Commercial business 164,569  167,067  165,193  142,312  137,767  81,054 
Home equity 63,927  66,946  72,895  73,714  74,507  53,053 
Consumer 727  731  809  1,368  898  1,127 
 $2,325,006 $2,331,716 $2,302,602 $2,248,249 $2,142,116 $1,784,626 
Less:                  
Deferred loan fees, net (1,452) (1,572) (1,751) (1,744) (1,647) (1,692)
Allowance for loan loss (23,789) (23,004) (22,359) (21,504) (20,640) (18,337)
                   
Total loans, net$2,299,765 $2,307,140 $2,278,492 $2,225,001 $2,119,829 $1,764,597 
 
 Non-Accruing Loans in Portfolio by quarter
 Q2 2019Q1 2019Q4 2018Q3 2018Q2 2018Q1 2018
 (In Thousands)
Originated loans:                  
Residential one-to-four family$1,022 $1,415 $1,160 $1,457 $1,480 $1,432 
Commercial and multi-family 1,881  1,364  2,568  5,572  5,578  5,652 
Commercial business 745  256  356  251  163  176 
Home equity 129  272  277  338  397  356 
Consumer -  -  -  -  42  - 
Sub-total:$3,777 $3,307 $4,361 $7,618 $7,660 $7,616 
                   
Acquired loans initially recorded at fair value:                  
Residential one-to-four family$1,116 $1,704 $2,165 $2,590 $2,474 $2,374 
Commercial and multi-family -  597  605  590  590  590 
Commercial business 378  -  48  295  -  - 
Home equity 217  62  42  -  39  39 
Sub-total:$1,711 $2,363 $2,860 $3,475 $3,103 $3,003 
                   
Total:$5,488 $5,670 $7,221 $11,093 $10,763 $10,619 
                   

 

 Reconciliation of GAAP to Non-GAAP Financial Measures by quarter
       
 Tangible Book Value per Share
 Q2 2019Q1 2019Q4 2018Q3 2018Q2 2018Q1 2018
 (Dollars in thousnds, except per share amounts)
Total Stockholders' Equity$221,153 $216,718 $200,215 $195,763 $194,076 $177,386 
Less: goodwill 5,587  5,584  5,699  5,714  5,691  - 
Less: preferred stock 25,016  25,016  19,706  19,706  19,706  13,241 
Total tangible stockholders' equity 190,550  186,118  174,810  170,343  168,679  164,145 
Shares outstanding 16,461  16,398  15,889  15,799  15,783  15,055 
Book value per share$13.43 $13.22 $12.60 $12.39 $12.30 $11.78 
Tangible book value per share$11.58 $11.35 $11.00 $10.78 $10.69 $10.90 
 
 Efficiency Ratio
 Q2 2019Q1 2019Q4 2018Q3 2018Q2 2018Q1 2018
 (Dollars in thousands)
Net interest income$20,865 $20,902 $21,171 $20,080 $19,990 $16,440 
Non-interest income 1,328  1,660  1,159  1,852  1,563  3,386 
Total income 22,193  22,562  22,330  21,932  21,553  19,826 
Non-interest expense 13,894  13,777  13,884  14,391  15,980  12,011 
Efficiency Ratio 62.61% 61.06% 62.18% 65.62% 74.14% 60.58%