FAIRFIELD, N.J., April 29, 2019 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), today reported net income for the quarter ended March 31, 2019 of $11.4 million, or $0.13 per basic and diluted share, as compared to net income of $10.8 million, or $0.12 per basic and diluted share, for the quarter ended December 31, 2018.
The Company concurrently announced the consolidation of seven of the Bank’s retail branches located in northern and central New Jersey as a part of its ongoing strategy to improve operating efficiency and enhance long-term shareholder value. The Company considered several factors in identifying the locations to be consolidated including historical branch profitability, market demographic trajectory, geographic proximity to the consolidating branch and the expected impact on the Bank’s clients and communities served. Completion of these consolidations is expected to occur during the quarter ended September 30, 2019, subject to regulatory approval. The Company anticipates these consolidations to result in annualized pre-tax cost savings of at least $3.0 million, after recognition of associated one-time charges.
Craig L. Montanaro, President and Chief Executive Officer, commented, “We are very pleased to report another quarter of solid earnings performance, particularly in the face of the continuing challenges presented by the flat yield curve. Our decision to consolidate certain branch locations, while representing meaningful cost savings, also reflects the recognition that the preferences of our clients are rapidly evolving towards a more omni-channel banking model. As a result, our strategy remains focused on driving digital channel adoption and enhancing our suite of digital banking solutions to provide our clients with a frictionless experience through whichever channel is most convenient and appealing to them.”
Balance Sheet Highlights
- Loans, excluding loans held for sale and the allowance for loan losses, decreased by $93.6 million to $4.66 billion, or 70.0% of total assets, at March 31, 2019 from $4.75 billion, or 70.9% of total assets, at December 31, 2018. The decrease in loans was largely attributable to an elevated level of pre-payment activity in the commercial mortgage loan portfolio which outpaced loan origination volume during the period.
- Deposits decreased by $35.9 million to $4.14 billion at March 31, 2019, from $4.17 billion at December 31, 2018. The net decrease was attributable to a decline of $47.3 million in wholesale deposits that was partially offset by an increase of $11.4 million in retail deposits reflecting the Company’s ongoing efforts to reallocate its funding mix from wholesale to retail deposits.
- Investment securities increased by $54.2 million to $1.32 billion at March 31, 2019 from $1.26 billion at December 31, 2018 as a portion of the cash flows from the loan portfolio were deployed into U.S. agency commercial mortgage-backed securities with similar yields to the loans that pre-paid during the period.
- Borrowings increased by $15.7 million to $1.33 billion at March 31, 2019, from $1.31 billion at December 31, 2018. The net increase in borrowings reflected a $20.2 million increase in depositor sweep account balances that was partially offset by the repayment of a $5.0 million long-term Federal Home Loan Bank (“FHLB”) advance that matured during the period.
Earnings Highlights
- Interest income decreased by $365,000 to $59.7 million for the quarter ended March 31, 2019 from $60.0 million for the quarter ended December 31, 2018 while interest expense increased by $346,000 to $21.0 million from $20.7 million between the same comparative periods. Consequently, net interest income decreased by $711,000 to $38.6 million for the quarter ended March 31, 2019, from $39.3 million for the quarter ended December 31, 2018.
- The Company’s interest rate spread decreased three basis points to 2.28% for the quarter ended March 31, 2019 from 2.31% for the quarter ended December 31, 2018. The decrease in the interest rate spread primarily reflected a three basis point increase in the average cost of interest-bearing liabilities to 1.63% for the quarter ended March 31, 2019 from 1.60% for the quarter ended December 31, 2018 while the average yield on interest-earning assets remained stable at 3.91% for those same comparative periods. The factors that contributed to the change in interest rate spread also contributed to a three basis point decrease in the Company’s net interest margin to 2.53% from 2.56%, for the same comparative periods.
The Company’s non-interest income continued to supplement and diversify its sources of revenue.
- Fees and service charges increased by $416,000, or 33.1%, to $1.7 million for the quarter ended March 31, 2019 compared to $1.3 million for the quarter ended December 31, 2018. This increase was largely driven by pre-payment fee income on commercial real estate loans related to the elevated level of pre-payment activity noted above.
- Aggregate loan sale gains increased by $50,000, or 49.5%, to $151,000 for the quarter ended March 31, 2019 as compared to $101,000 for the quarter ended December 31, 2018 largely reflecting an increase in the volume of loans sold.
The Company continued to evaluate and implement tactics and strategies designed to improve operating efficiency and make more effective use of its supporting infrastructure while maintaining its effective income tax rate.
- Non-interest expense decreased by $499,000 to $26.8 million for the quarter ended March 31, 2019 compared to $27.3 million for the quarter ended December 31, 2018. The decrease was largely attributable to various non-recurring expenses that were recognized during the quarter ended December 31, 2018 in conjunction with the October 2018 conversion of Clifton Savings Bank’s core processing system. The decrease in non-interest expense also reflected a net decrease of $349,000 in salaries and employee benefit expense from $15.7 million for the quarter ended December 31, 2018 to $15.4 million for the quarter ended March 31, 2019 largely attributable to decreases in wages, overtime and employee bonus compensation, partially offset by an increase in employer payroll tax expense. These decreases were partially offset by an increase in facilities occupancy expense which was primarily attributable to seasonal fluctuations in such expenses.
- The Company’s ratio of non-interest expense to average assets totaled 1.60% for the quarter ended March 31, 2019 compared to 1.62% for the prior quarter ended December 31, 2018. For those same comparative periods, the Company’s efficiency ratios were 63.3% and 63.9%, respectively.
- Income tax expense totaled $4.3 million for the quarter ended March 31, 2019 compared to $3.6 million for the quarter ended December 31, 2018 resulting in effective tax rates of 27.4% and 25.3%, respectively.
Collectively, these factors resulted in an increase of $649,000 in net income for the quarter ended March 31, 2019 compared to the prior quarter ended December 31, 2018.
- The Company’s return on average assets for the quarter ended March 31, 2019 increased to 0.68% from 0.64% for the quarter ended December 31, 2018.
- The Company’s return on average equity increased to 3.89% for the quarter ended March 31, 2019 from 3.55% for the quarter ended December 31, 2018 while the Company’s return on average tangible equity increased to 4.78% from 4.33% for the comparative periods.
Asset Quality Highlights
- Asset quality remained strong throughout the quarter ended March 31, 2019. The outstanding balance of nonperforming loans totaled $21.3 million, or 0.46% of total loans, at March 31, 2019 as compared to $20.8 million, or 0.44% of total loans, at December 31, 2018.
- The allowance for loan losses decreased to $33.1 million at March 31, 2019 from $33.5 million at December 31, 2018, resulting in a total loan coverage ratio, representing the balance of the allowance for loan losses as a percentage of total loans, excluding loans held for sale, of 0.70% for both comparative periods. The total loan coverage ratio for both periods reflects the impact of purchase accounting which generally precludes acquired loan balances from being considered in the balance of the allowance for loan losses at the time of their acquisition.
- The Company recognized net charge offs totaling approximately $242,000 for the quarter ended March 31, 2019, reflecting an annualized net charge off rate of 0.02% on the average balance of total loans for the period. By comparison, the Company’s net charge offs totaled approximately $176,000 for the quarter ended December 31, 2018, reflecting an annualized net charge off rate of 0.01%.
- The Company recorded a loan loss provision reversal of $179,000 for the quarter ended March 31, 2019 as compared to a provision for loan loss expense of $971,000 for the quarter ended December 31, 2018. The decrease in provision for loan loss was largely attributable to the net decrease during the quarter ended March 31, 2019 in the performing portion of the loan portfolio that was collectively evaluated for impairment.
Capital Highlights
- The Company increased its regular quarterly cash dividend by $0.01 per share, to $0.06 per share during the quarter ended March 31, 2019, from $0.05 per share during the quarter ended December 31, 2018. The Company continually evaluates its dividend policies and practices in relation to its overall capital management and shareholder value objectives.
- In March 2019, the Company completed the repurchase of its shares of common stock under its third share repurchase program announced in April 2018 through which it authorized the repurchase of 10,238,557 shares, or 10%, of the Company’s outstanding shares. The shares associated with this third program were repurchased at a total cost of $138.8 million and at an average cost of $13.55 per share. Concurrently, the Company announced its fourth share repurchase program through which it authorized the repurchase of 9,218,324 shares, or 10%, of the Company’s outstanding shares as of that date.
- During the quarter ended March 31, 2019, the Company repurchased 2,445,689 shares of its common stock at a total cost of $32.4 million and an average cost of $13.24 per share. The shares of common stock repurchased during the period included 1,757,572 shares attributed to the completion of the Company’s third share repurchase program, as noted above. Such shares were repurchased at a total cost of $23.3 million and an average cost of $13.24 per share. The additional 688,117 shares repurchased during the period represented 7.5% of the total shares to be repurchased under the Company’s fourth share repurchase program, also noted above. Such shares were repurchased at a total cost of $9.1 million and at an average cost of $13.24 per share.
- The Company’s and Bank’s regulatory capital ratios at March 31, 2019 were in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.
The exhibits that follow this narrative begin with the presentation of the Linked-Quarter Comparative Financial Analysis that supports the discussion above by presenting the Company’s financial condition and operating results for the quarter ended March 31, 2019 compared to those for the prior linked-quarter ended December 31, 2018. This analysis is followed by a tabular Five-Quarter Financial Trend Analysis that presents similar financial information, together with other financial highlights and performance metrics, over a consecutive five quarter look-back period that is intended to reflect the Company’s financial performance and strategic achievements over this extended period of time. The exhibits conclude with the presentation of the Reconciliation of GAAP to Non-GAAP financial data included in this news release.
Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.
| Linked-Quarter Comparative Financial Analysis | ||||||||||||
| Summary Balance Sheet | At | Variance | ||||||||||
| (Dollars and Shares in Thousands, | March 31, | December 31, | Variance | or Change | ||||||||
| Except Per Share Data, Unaudited) | 2019 | 2018 | or Change | Pct. | ||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 54,160 | $ | 51,483 | $ | 2,677 | 5.2 | % | ||||
| Securities available for sale | 726,920 | 666,602 | 60,318 | 9.0 | % | |||||||
| Securities held to maturity | 592,199 | 598,318 | (6,119 | ) | -1.0 | % | ||||||
| Loans held-for-sale | 997 | 1,001 | (4 | ) | -0.4 | % | ||||||
| Loans receivable, including yield adjustments | 4,659,804 | 4,753,392 | (93,588 | ) | -2.0 | % | ||||||
| Less allowance for loan losses | (33,105 | ) | (33,526 | ) | 421 | -1.3 | % | |||||
| Net loans receivable | 4,626,699 | 4,719,866 | (93,167 | ) | -2.0 | % | ||||||
| Premises and equipment | 58,274 | 58,414 | (140 | ) | -0.2 | % | ||||||
| Federal Home Loan Bank stock | 64,288 | 64,514 | (226 | ) | -0.4 | % | ||||||
| Accrued interest receivable | 20,326 | 19,435 | 891 | 4.6 | % | |||||||
| Goodwill | 210,895 | 210,895 | - | 0.0 | % | |||||||
| Core deposit intangible | 5,470 | 5,743 | (273 | ) | -4.8 | % | ||||||
| Bank owned life insurance | 254,569 | 253,009 | 1,560 | 0.6 | % | |||||||
| Deferred income taxes, net | 24,182 | 24,692 | (510 | ) | -2.1 | % | ||||||
| Other real estate owned | 209 | 508 | (299 | ) | -58.9 | % | ||||||
| Other assets | 19,563 | 27,960 | (8,397 | ) | -30.0 | % | ||||||
| Total assets | $ | 6,658,751 | $ | 6,702,440 | $ | (43,689 | ) | -0.7 | % | |||
| Liabilities | ||||||||||||
| Deposits | $ | 4,137,573 | $ | 4,173,434 | $ | (35,861 | ) | -0.9 | % | |||
| Borrowings | 1,326,216 | 1,310,547 | 15,669 | 1.2 | % | |||||||
| Advance payments by borrowers for taxes | 17,208 | 17,201 | 7 | 0.0 | % | |||||||
| Other liabilities | 19,643 | 17,997 | 1,646 | 9.1 | % | |||||||
| Total liabilities | 5,500,640 | 5,519,179 | (18,539 | ) | -0.3 | % | ||||||
| Stockholders' Equity | ||||||||||||
| Common stock | 915 | 938 | (23 | ) | -2.5 | % | ||||||
| Paid-in capital | 817,675 | 848,145 | (30,470 | ) | -3.6 | % | ||||||
| Retained earnings | 363,072 | 356,993 | 6,079 | 1.7 | % | |||||||
| Unearned ESOP shares | (31,130 | ) | (31,617 | ) | 487 | -1.5 | % | |||||
| Accumulated other comprehensive income, net | 7,579 | 8,802 | (1,223 | ) | -13.9 | % | ||||||
| Total stockholders' equity | 1,158,111 | 1,183,261 | (25,150 | ) | -2.1 | % | ||||||
| Total liabilities and stockholders' equity | $ | 6,658,751 | $ | 6,702,440 | $ | (43,689 | ) | -0.7 | % | |||
| Consolidated capital ratios | ||||||||||||
| Equity to assets | 17.39 | % | 17.65 | % | -0.26 | % | ||||||
| Tangible equity to tangible assets | 14.62 | % | 14.90 | % | -0.28 | % | ||||||
| Share data | ||||||||||||
| Outstanding shares | 91,495 | 93,772 | (2,277 | ) | -2.4 | % | ||||||
| Equity per share | $ | 12.66 | $ | 12.62 | $ | 0.04 | 0.3 | % | ||||
| Tangible equity per share (1) | $ | 10.29 | $ | 10.31 | $ | (0.02 | ) | -0.2 | % | |||
| (1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. |
| Summary Income Statement | For the three months ended | Variance | ||||||||||
| (Dollars and Shares in Thousands, | March 31, | December 31, | Variance | or Change | ||||||||
| Except Per Share Data, Unaudited) | 2019 | 2018 | or Change | Pct. | ||||||||
| Interest income | ||||||||||||
| Loans | $ | 48,116 | $ | 49,015 | $ | (899 | ) | -1.8 | % | |||
| Taxable investment securities | 9,511 | 9,051 | 460 | 5.1 | % | |||||||
| Tax-exempt investment securities | 710 | 713 | (3 | ) | -0.4 | % | ||||||
| Other interest-earning assets | 1,320 | 1,243 | 77 | 6.2 | % | |||||||
| Total Interest Income | 59,657 | 60,022 | (365 | ) | -0.6 | % | ||||||
| Interest expense | ||||||||||||
| Deposits | 14,114 | 12,727 | 1,387 | 10.9 | % | |||||||
| Borrowings | 6,905 | 7,946 | (1,041 | ) | -13.1 | % | ||||||
| Total interest expense | 21,019 | 20,673 | 346 | 1.7 | % | |||||||
| Net interest income | 38,638 | 39,349 | (711 | ) | -1.8 | % | ||||||
| (Reversal of) provision for loan losses | (179 | ) | 971 | (1,150 | ) | -118.4 | % | |||||
| Net interest income after provision for loan losses | 38,817 | 38,378 | 439 | 1.1 | % | |||||||
| Non-interest income | ||||||||||||
| Fees and service charges | 1,674 | 1,258 | 416 | 33.1 | % | |||||||
| Loss on sale and call of securities | (182 | ) | - | (182 | ) | N/A | ||||||
| Gain on sale of loans | 151 | 101 | 50 | 49.5 | % | |||||||
| (Loss) gain on sale and write down of other real estate owned | (6 | ) | 36 | (42 | ) | -116.7 | % | |||||
| Income from bank owned life insurance | 1,560 | 1,599 | (39 | ) | -2.4 | % | ||||||
| Electronic banking fees and charges | 253 | 277 | (24 | ) | -8.7 | % | ||||||
| Miscellaneous | 226 | 38 | 188 | 494.7 | % | |||||||
| Total non-interest income | 3,676 | 3,309 | 367 | 11.1 | % | |||||||
| Non-interest expense | ||||||||||||
| Salaries and employee benefits | 15,350 | 15,699 | (349 | ) | -2.2 | % | ||||||
| Net occupancy expense of premises | 2,979 | 2,761 | 218 | 7.9 | % | |||||||
| Equipment and systems | 3,053 | 3,377 | (324 | ) | -9.6 | % | ||||||
| Advertising and marketing | 739 | 787 | (48 | ) | -6.1 | % | ||||||
| Federal deposit insurance premium | 455 | 421 | 34 | 8.1 | % | |||||||
| Directors' compensation | 770 | 746 | 24 | 3.2 | % | |||||||
| Miscellaneous | 3,425 | 3,479 | (54 | ) | -1.6 | % | ||||||
| Total non-interest expense | 26,771 | 27,270 | (499 | ) | -1.8 | % | ||||||
| Income before income taxes | 15,722 | 14,417 | 1,305 | 9.1 | % | |||||||
| Income taxes | 4,305 | 3,649 | 656 | 18.0 | % | |||||||
| Net income | $ | 11,417 | $ | 10,768 | $ | 649 | 6.0 | % | ||||
| Net income per common share (EPS) | ||||||||||||
| Basic | $ | 0.13 | $ | 0.12 | $ | 0.01 | ||||||
| Diluted | $ | 0.13 | $ | 0.12 | $ | 0.01 | ||||||
| Dividends declared | ||||||||||||
| Cash dividends declared per common share | $ | 0.06 | $ | 0.05 | $ | 0.01 | ||||||
| Cash dividends declared | $ | 5,338 | $ | 4,082 | $ | 1,256 | ||||||
| Dividend payout ratio | 46.8 | % | 37.9 | % | 8.8 | % | ||||||
| Weighted average number of common shares outstanding | ||||||||||||
| Basic | 89,488 | 92,434 | (2,946 | ) | ||||||||
| Diluted | 89,532 | 92,480 | (2,948 | ) | ||||||||
| For the three months ended | Variance | |||||||||||
| Average Balance Sheet Data | March 31, | December 31, | Variance | or Change | ||||||||
| (Dollars in Thousands, Unaudited) | 2019 | 2018 | or Change | Pct. | ||||||||
| Assets | ||||||||||||
| Interest-earning assets: | ||||||||||||
| Loans receivable, including loans held for sale | $ | 4,709,052 | $ | 4,758,587 | $ | (49,535 | ) | -1.0 | % | |||
| Taxable investment securities | 1,161,492 | 1,158,720 | 2,772 | 0.2 | % | |||||||
| Tax-exempt investment securities | 134,309 | 135,453 | (1,144 | ) | -0.8 | % | ||||||
| Other interest-earning assets | 107,554 | 87,916 | 19,638 | 22.3 | % | |||||||
| Total interest-earning assets | 6,112,407 | 6,140,676 | (28,269 | ) | -0.5 | % | ||||||
| Non-interest-earning assets | 574,921 | 587,921 | (13,000 | ) | -2.2 | % | ||||||
| Total assets | $ | 6,687,328 | $ | 6,728,597 | $ | (41,269 | ) | -0.6 | % | |||
| Liabilities and Stockholders' Equity | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||
| Deposits: | ||||||||||||
| Interest-bearing demand | $ | 790,567 | $ | 792,989 | $ | (2,422 | ) | -0.3 | % | |||
| Savings and club | 773,308 | 743,676 | 29,632 | 4.0 | % | |||||||
| Certificates of deposit | 2,288,836 | 2,214,932 | 73,904 | 3.3 | % | |||||||
| Total interest-bearing deposits | 3,852,711 | 3,751,597 | 101,114 | 2.7 | % | |||||||
| Borrowings: | ||||||||||||
| Federal Home Loan Bank advances | 1,292,168 | 1,293,470 | (1,302 | ) | -0.1 | % | ||||||
| Other borrowings | 26,037 | 119,281 | (93,244 | ) | -78.2 | % | ||||||
| Total borrowings | 1,318,205 | 1,412,751 | (94,546 | ) | -6.7 | % | ||||||
| Total interest-bearing liabilities | 5,170,916 | 5,164,348 | 6,568 | 0.1 | % | |||||||
| Non-interest-bearing liabilities: | ||||||||||||
| Non-interest-bearing deposits | 307,645 | 315,165 | (7,520 | ) | -2.4 | % | ||||||
| Other non-interest-bearing liabilities | 35,930 | 37,374 | (1,444 | ) | -3.9 | % | ||||||
| Total non-interest-bearing liabilities | 343,575 | 352,539 | (8,964 | ) | -2.5 | % | ||||||
| Total liabilities | 5,514,491 | 5,516,887 | (2,396 | ) | 0.0 | % | ||||||
| Stockholders' equity | 1,172,837 | 1,211,710 | (38,873 | ) | -3.2 | % | ||||||
| Total liabilities and stockholders' equity | $ | 6,687,328 | $ | 6,728,597 | $ | (41,269 | ) | -0.6 | % | |||
| Average interest-earning assets to average interest-bearing liabilities | 118.21 | % | 118.91 | % | -0.70 | % | -0.6 | % | ||||
| For the three months ended | |||||||||
| March 31, | December 31, | Variance | |||||||
| Performance Ratio Highlights | 2019 | 2018 | or Change | ||||||
| Average yield on interest-earning assets: | |||||||||
| Loans receivable, including loans held for sale | 4.09 | % | 4.12 | % | -0.03 | % | |||
| Taxable investment securities | 3.28 | % | 3.12 | % | 0.16 | % | |||
| Tax-exempt investment securities (1) | 2.12 | % | 2.11 | % | 0.01 | % | |||
| Other interest-earning assets | 4.91 | % | 5.66 | % | -0.75 | % | |||
| Total interest-earning assets | 3.91 | % | 3.91 | % | 0.00 | % | |||
| Average cost of interest-bearing liabilities: | |||||||||
| Deposits: | |||||||||
| Interest-bearing demand | 1.06 | % | 0.97 | % | 0.09 | % | |||
| Savings and club | 0.60 | % | 0.49 | % | 0.11 | % | |||
| Certificates of deposit | 1.90 | % | 1.79 | % | 0.11 | % | |||
| Total interest-bearing deposits | 1.47 | % | 1.36 | % | 0.11 | % | |||
| Borrowings: | |||||||||
| Federal Home Loan Bank advances | 2.13 | % | 2.27 | % | -0.14 | % | |||
| Other borrowings | 0.35 | % | 1.99 | % | -1.64 | % | |||
| Total borrowings | 2.10 | % | 2.25 | % | -0.15 | % | |||
| Total interest-bearing liabilities | 1.63 | % | 1.60 | % | 0.03 | % | |||
| Interest rate spread (2) | 2.28 | % | 2.31 | % | -0.03 | % | |||
| Net interest margin (3) | 2.53 | % | 2.56 | % | -0.03 | % | |||
| Non-interest income to average assets (annualized) | 0.22 | % | 0.20 | % | 0.02 | % | |||
| Non-interest expense to average assets (annualized) | 1.60 | % | 1.62 | % | -0.02 | % | |||
| Efficiency ratio (4) | 63.27 | % | 63.93 | % | -0.66 | % | |||
| Return on average assets (annualized) | 0.68 | % | 0.64 | % | 0.04 | % | |||
| Return on average equity (annualized) | 3.89 | % | 3.55 | % | 0.34 | % | |||
| Return on average tangible equity (annualized) (5) | 4.78 | % | 4.33 | % | 0.45 | % | |||
| (1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. | |
| (2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. | |
| (3) | Net interest income divided by average interest-earning assets. | |
| (4) | Non-interest expense divided by the sum of net interest income and non-interest income. | |
| (5) | Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets. |
| Five-Quarter Financial Trend Analysis | |||||||||||||||
| Summary Balance Sheet | At | ||||||||||||||
| (Dollars and Shares in Thousands, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| Except Per Share Data, Unaudited) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||
| Assets | |||||||||||||||
| Cash and cash equivalents | $ | 54,160 | $ | 51,483 | $ | 44,486 | $ | 128,864 | $ | 38,283 | |||||
| Securities available for sale | 726,920 | 666,602 | 706,240 | 725,085 | 684,771 | ||||||||||
| Securities held to maturity | 592,199 | 598,318 | 602,838 | 589,730 | 459,380 | ||||||||||
| Loans held-for-sale | 997 | 1,001 | 1,503 | 863 | 2,377 | ||||||||||
| Loans receivable, including yield adjustments | 4,659,804 | 4,753,392 | 4,660,507 | 4,501,348 | 3,351,369 | ||||||||||
| Less allowance for loan losses | (33,105 | ) | (33,526 | ) | (32,731 | ) | (30,865 | ) | (30,248 | ) | |||||
| Net loans receivable | 4,626,699 | 4,719,866 | 4,627,776 | 4,470,483 | 3,321,121 | ||||||||||
| Premises and equipment | 58,274 | 58,414 | 57,635 | 56,240 | 42,856 | ||||||||||
| Federal Home Loan Bank stock | 64,288 | 64,514 | 66,428 | 59,004 | 39,112 | ||||||||||
| Accrued interest receivable | 20,326 | 19,435 | 19,455 | 18,510 | 13,926 | ||||||||||
| Goodwill | 210,895 | 210,895 | 210,895 | 210,895 | 108,591 | ||||||||||
| Core deposit intangible | 5,470 | 5,743 | 6,018 | 6,295 | 206 | ||||||||||
| Bank owned life insurance | 254,569 | 253,009 | 251,410 | 249,816 | 184,981 | ||||||||||
| Deferred income taxes, net | 24,182 | 24,692 | 22,136 | 23,754 | 3,898 | ||||||||||
| Other real estate owned | 209 | 508 | 674 | 725 | 1,094 | ||||||||||
| Other assets | 19,563 | 27,960 | 38,717 | 39,610 | 33,104 | ||||||||||
| Total assets | $ | 6,658,751 | $ | 6,702,440 | $ | 6,656,211 | $ | 6,579,874 | $ | 4,933,700 | |||||
| Liabilities | |||||||||||||||
| Deposits | 4,137,573 | $ | 4,173,434 | $ | 3,954,821 | $ | 4,073,604 | $ | 3,067,102 | ||||||
| Borrowings | 1,326,216 | 1,310,547 | 1,419,424 | 1,198,646 | 852,009 | ||||||||||
| Advance payments by borrowers for taxes | 17,208 | 17,201 | 10,687 | 18,088 | 8,969 | ||||||||||
| Other liabilities | 19,643 | 17,997 | 35,198 | 20,788 | 14,419 | ||||||||||
| Total liabilities | 5,500,640 | 5,519,179 | 5,420,130 | 5,311,126 | 3,942,499 | ||||||||||
| Stockholders' Equity | |||||||||||||||
| Common stock | 915 | 938 | 978 | 996 | 788 | ||||||||||
| Paid-in capital | 817,675 | 848,145 | 897,551 | 922,711 | 653,045 | ||||||||||
| Retained earnings | 363,072 | 356,993 | 350,838 | 359,096 | 355,270 | ||||||||||
| Unearned ESOP shares | (31,130 | ) | (31,617 | ) | (32,104 | ) | (32,590 | ) | (33,076 | ) | |||||
| Accumulated other comprehensive income, net | 7,579 | 8,802 | 18,818 | 18,535 | 15,174 | ||||||||||
| Total stockholders' equity | 1,158,111 | 1,183,261 | 1,236,081 | 1,268,748 | 991,201 | ||||||||||
| Total liabilities and stockholders' equity | $ | 6,658,751 | $ | 6,702,440 | $ | 6,656,211 | $ | 6,579,874 | $ | 4,933,700 | |||||
| Consolidated capital ratios | |||||||||||||||
| Equity to assets | 17.39 | % | 17.65 | % | 18.57 | % | 19.28 | % | 20.09 | % | |||||
| Tangible equity to tangible assets | 14.62 | % | 14.90 | % | 15.83 | % | 16.53 | % | 18.29 | % | |||||
| Share data | |||||||||||||||
| Outstanding shares | 91,495 | 93,772 | 97,754 | 99,626 | 78,765 | ||||||||||
| Equity per share | $ | 12.66 | $ | 12.62 | $ | 12.64 | $ | 12.74 | $ | 12.58 | |||||
| Tangible equity per share (1) | $ | 10.29 | $ | 10.31 | $ | 10.43 | $ | 10.56 | $ | 11.20 | |||||
| (1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. |
| At | |||||||||||||||
| Supplemental Balance Sheet Highlights | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| (Dollars in Thousands, Unaudited) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||
| Cash and cash equivalents | |||||||||||||||
| Cash and due from depository institutions | $ | 15,943 | $ | 24,361 | $ | 21,973 | $ | 26,199 | $ | 18,229 | |||||
| Interest-bearing deposits in other banks | 38,217 | 27,122 | 22,513 | 102,665 | 20,054 | ||||||||||
| Total cash and cash equivalents | $ | 54,160 | $ | 51,483 | $ | 44,486 | $ | 128,864 | $ | 38,283 | |||||
| Securities available for sale | |||||||||||||||
| Debt securities: | |||||||||||||||
| U.S. agency securities | $ | 3,737 | $ | 3,942 | $ | 4,070 | $ | 4,411 | $ | 4,667 | |||||
| Municipal and state obligations | 26,731 | 26,205 | 25,907 | 26,088 | 26,733 | ||||||||||
| Asset-backed securities | 180,145 | 180,828 | 182,390 | 182,620 | 182,066 | ||||||||||
| Collateralized loan obligations | 207,906 | 184,439 | 215,569 | 226,066 | 178,342 | ||||||||||
| Corporate bonds | 121,597 | 144,692 | 147,811 | 147,594 | 142,202 | ||||||||||
| Trust preferred securities | 3,775 | 3,726 | 3,794 | 3,783 | 8,485 | ||||||||||
| Debt securities available for sale | 543,891 | 543,832 | 579,541 | 590,562 | 542,495 | ||||||||||
| Mortgage-backed securities: | |||||||||||||||
| Collateralized mortgage obligations | 21,660 | 23,019 | 23,097 | 24,292 | 25,601 | ||||||||||
| Residential pass-through securities | 70,513 | 91,918 | 95,795 | 102,359 | 108,736 | ||||||||||
| Commercial pass-through securities | 90,856 | 7,833 | 7,807 | 7,872 | 7,939 | ||||||||||
| Mortgage-backed securities | 183,029 | 122,770 | 126,699 | 134,523 | 142,276 | ||||||||||
| Total securities available for sale | $ | 726,920 | $ | 666,602 | $ | 706,240 | $ | 725,085 | $ | 684,771 | |||||
| Securities held to maturity | |||||||||||||||
| Debt securities: | |||||||||||||||
| Municipal and state obligations | $ | 107,375 | $ | 107,826 | $ | 109,061 | $ | 109,483 | $ | 98,011 | |||||
| Subordinated debt | 63,107 | 56,255 | 46,275 | 46,294 | 30,000 | ||||||||||
| Debt securities held to maturity | 170,482 | 164,081 | 155,336 | 155,777 | 128,011 | ||||||||||
| Mortgage-backed securities: | |||||||||||||||
| Collateralized mortgage obligations | 49,368 | 51,540 | 54,130 | 56,886 | 34,309 | ||||||||||
| Residential pass-through securities | 174,338 | 182,335 | 190,812 | 200,622 | 151,605 | ||||||||||
| Commercial pass-through securities | 198,011 | 200,362 | 202,560 | 176,445 | 145,455 | ||||||||||
| Mortgage-backed securities | 421,717 | 434,237 | 447,502 | 433,953 | 331,369 | ||||||||||
| Total securities held to maturity | $ | 592,199 | $ | 598,318 | $ | 602,838 | $ | 589,730 | $ | 459,380 | |||||
| Total securities | $ | 1,319,119 | $ | 1,264,920 | $ | 1,309,078 | $ | 1,314,815 | $ | 1,144,151 | |||||
| At | |||||||||||||||
| Supplemental Balance Sheet Highlights | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| (Dollars in Thousands, Unaudited) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||
| Loan portfolio composition: | |||||||||||||||
| Residential first mortgage loans | $ | 1,325,105 | $ | 1,334,284 | $ | 1,303,249 | $ | 1,297,453 | $ | 563,807 | |||||
| Home equity loans and lines of credit | 97,788 | 96,001 | 93,473 | 90,761 | 79,522 | ||||||||||
| Residential mortgage loans | 1,422,893 | 1,430,285 | 1,396,722 | 1,388,214 | 643,329 | ||||||||||
| Multifamily mortgage loans | 1,956,571 | 1,974,409 | 1,898,831 | 1,758,584 | 1,471,573 | ||||||||||
| Nonresidential and mixed use mortgage loans | 1,249,215 | 1,302,583 | 1,315,279 | 1,302,961 | 1,113,385 | ||||||||||
| Commercial mortgage loans | 3,205,786 | 3,276,992 | 3,214,110 | 3,061,545 | 2,584,958 | ||||||||||
| Commercial business loans | 66,476 | 70,059 | 78,317 | 85,825 | 88,216 | ||||||||||
| Construction loans | 14,377 | 28,405 | 26,581 | 23,271 | 22,963 | ||||||||||
| Account loans | 3,360 | 3,310 | 3,133 | 3,283 | 3,038 | ||||||||||
| Other consumer loans | 2,624 | 3,524 | 4,427 | 5,777 | 7,186 | ||||||||||
| Consumer loans | 5,984 | 6,834 | 7,560 | 9,060 | 10,224 | ||||||||||
| Total loans, excluding yield adjustments | 4,715,516 | 4,812,575 | 4,723,290 | 4,567,915 | 3,349,690 | ||||||||||
| Unamortized yield adjustments | (55,712 | ) | (59,183 | ) | (62,783 | ) | (66,567 | ) | 1,679 | ||||||
| Loans receivable, including yield adjustments | 4,659,804 | 4,753,392 | 4,660,507 | 4,501,348 | 3,351,369 | ||||||||||
| Less allowance for loan losses | (33,105 | ) | (33,526 | ) | (32,731 | ) | (30,865 | ) | (30,248 | ) | |||||
| Net loans receivable | $ | 4,626,699 | $ | 4,719,866 | $ | 4,627,776 | $ | 4,470,483 | $ | 3,321,121 | |||||
| Loan portfolio allocation: | |||||||||||||||
| Residential first mortgage loans | 28.1 | % | 27.7 | % | 27.6 | % | 28.4 | % | 16.8 | % | |||||
| Home equity loans and lines of credit | 2.1 | % | 2.0 | % | 2.0 | % | 2.0 | % | 2.4 | % | |||||
| Residential mortgage loans | 30.2 | % | 29.7 | % | 29.6 | % | 30.4 | % | 19.2 | % | |||||
| Multifamily mortgage loans | 41.5 | % | 41.0 | % | 40.2 | % | 38.5 | % | 43.9 | % | |||||
| Nonresidential and mixed use mortgage loans | 26.5 | % | 27.1 | % | 27.8 | % | 28.5 | % | 33.2 | % | |||||
| Commercial mortgage loans | 68.0 | % | 68.1 | % | 68.0 | % | 67.0 | % | 77.1 | % | |||||
| Commercial business loans | 1.3 | % | 1.4 | % | 1.6 | % | 1.9 | % | 2.6 | % | |||||
| Construction loans | 0.3 | % | 0.6 | % | 0.6 | % | 0.5 | % | 0.7 | % | |||||
| Account loans | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||||
| Other consumer loans | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | 0.3 | % | |||||
| Consumer loans | 0.2 | % | 0.2 | % | 0.2 | % | 0.2 | % | 0.4 | % | |||||
| Total loans, excluding yield adjustments | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||
| Asset quality: | |||||||||||||||
| Nonperforming assets: | |||||||||||||||
| Accruing loans > 90 days past due | $ | 23 | $ | 32 | $ | 19 | $ | 60 | $ | 45 | |||||
| Nonaccrual loans | 21,297 | 20,743 | 20,473 | 16,799 | 14,190 | ||||||||||
| Total nonperforming loans | 21,320 | 20,775 | 20,492 | 16,859 | 14,235 | ||||||||||
| Other real estate owned | 209 | 508 | 674 | 725 | 1,094 | ||||||||||
| Total nonperforming assets | $ | 21,529 | $ | 21,283 | $ | 21,166 | $ | 17,584 | $ | 15,329 | |||||
| Nonperforming loans (% total loans) | 0.46 | % | 0.44 | % | 0.44 | % | 0.37 | % | 0.42 | % | |||||
| Nonperforming assets (% total assets) | 0.32 | % | 0.32 | % | 0.32 | % | 0.27 | % | 0.31 | % | |||||
| Allowance for loan losses (ALLL): | |||||||||||||||
| ALLL to total loans | 0.70 | % | 0.70 | % | 0.69 | % | 0.68 | % | 0.90 | % | |||||
| ALLL to nonperforming loans | 155.28 | % | 161.38 | % | 159.73 | % | 183.08 | % | 212.49 | % | |||||
| Net charge offs | $ | 242 | $ | 176 | $ | 234 | $ | 101 | $ | 241 | |||||
| Average net charge off rate (annualized) | 0.02 | % | 0.01 | % | 0.02 | % | 0.01 | % | 0.03 | % | |||||
| At | |||||||||||||||
| Supplemental Balance Sheet Highlights | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| (Dollars in Thousands, Unaudited) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||
| Funding by type: | |||||||||||||||
| Deposits | |||||||||||||||
| Non-interest-bearing deposits | $ | 303,713 | $ | 305,392 | $ | 308,631 | $ | 311,938 | $ | 270,217 | |||||
| Interest-bearing demand | 800,023 | 807,389 | 786,069 | 1,000,989 | 871,425 | ||||||||||
| Savings and club | 777,678 | 760,499 | 743,289 | 744,039 | 515,805 | ||||||||||
| Certificates of deposit | 2,256,159 | 2,300,154 | 2,116,832 | 2,016,638 | 1,409,655 | ||||||||||
| Interest-bearing deposits | 3,833,860 | 3,868,042 | 3,646,190 | 3,761,666 | 2,796,885 | ||||||||||
| Total deposits | 4,137,573 | 4,173,434 | 3,954,821 | 4,073,604 | 3,067,102 | ||||||||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 1,289,285 | 1,293,845 | 1,335,844 | 1,170,144 | 775,625 | ||||||||||
| Overnight borrowings | - | - | 60,000 | - | 42,000 | ||||||||||
| Depositor sweep accounts | 36,931 | 16,702 | 23,580 | 28,502 | 34,384 | ||||||||||
| Total borrowings | 1,326,216 | 1,310,547 | 1,419,424 | 1,198,646 | 852,009 | ||||||||||
| Total funding | $ | 5,463,789 | $ | 5,483,981 | $ | 5,374,245 | $ | 5,272,250 | $ | 3,919,111 | |||||
| Loans as a % of deposits | 111.8 | % | 113.1 | % | 117.1 | % | 109.8 | % | 108.4 | % | |||||
| Deposits as a % of total funding | 75.7 | % | 76.1 | % | 73.6 | % | 77.3 | % | 78.3 | % | |||||
| Borrowings as a % of total funding | 24.3 | % | 23.9 | % | 26.4 | % | 22.7 | % | 21.7 | % | |||||
| Funding by source: | |||||||||||||||
| Retail funding | |||||||||||||||
| Non-interest-bearing deposits | $ | 303,713 | $ | 305,392 | $ | 308,631 | $ | 311,938 | $ | 270,217 | |||||
| Interest-bearing demand | 800,023 | 807,389 | 786,069 | 790,164 | 656,114 | ||||||||||
| Savings and club | 777,678 | 760,499 | 743,289 | 744,039 | 515,805 | ||||||||||
| Certificates of deposit | 1,925,630 | 1,922,287 | 1,871,903 | 1,828,039 | 1,247,900 | ||||||||||
| Total retail deposits | 3,807,044 | 3,795,567 | 3,709,892 | 3,674,180 | 2,690,036 | ||||||||||
| Depositor sweep accounts | 36,931 | 16,702 | 23,580 | 28,502 | 34,384 | ||||||||||
| Total retail funding | 3,843,975 | 3,812,269 | 3,733,472 | 3,702,682 | 2,724,420 | ||||||||||
| Wholesale funding: | |||||||||||||||
| Interest-bearing demand | $ | - | $ | - | $ | - | $ | 210,825 | $ | 215,311 | |||||
| Certificates of deposit (listing service) | 78,704 | 108,067 | 104,990 | 104,256 | 104,934 | ||||||||||
| Certificates of deposit (brokered) | 251,825 | 269,800 | 139,939 | 84,343 | 56,821 | ||||||||||
| Total wholesale deposits | 330,529 | 377,867 | 244,929 | 399,424 | 377,066 | ||||||||||
| FHLB advances | 1,289,285 | 1,293,845 | 1,335,844 | 1,170,144 | 775,625 | ||||||||||
| Overnight borrowings | - | - | 60,000 | - | 42,000 | ||||||||||
| Total wholesale funding | 1,619,814 | 1,671,712 | 1,640,773 | 1,569,568 | 1,194,691 | ||||||||||
| Total funding | $ | 5,463,789 | $ | 5,483,981 | $ | 5,374,245 | $ | 5,272,250 | $ | 3,919,111 | |||||
| Retail funding as a % of total funding | 70.4 | % | 69.5 | % | 69.5 | % | 70.2 | % | 69.5 | % | |||||
| Wholesale funding as a % of total funding | 29.6 | % | 30.5 | % | 30.5 | % | 29.8 | % | 30.5 | % | |||||
| Summary Income Statement | For the three months ended | ||||||||||||||
| (Dollars and Shares in Thousands, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| Except Per Share Data, Unaudited) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||
| Interest income | |||||||||||||||
| Loans | $ | 48,116 | $ | 49,015 | $ | 47,437 | $ | 46,615 | $ | 30,728 | |||||
| Taxable investment securities | 9,511 | 9,051 | 8,879 | 8,670 | 6,450 | ||||||||||
| Tax-exempt investment securities | 710 | 713 | 716 | 702 | 652 | ||||||||||
| Other interest-earning assets | 1,320 | 1,243 | 1,174 | 1,275 | 715 | ||||||||||
| Total interest income | 59,657 | 60,022 | 58,206 | 57,262 | 38,545 | ||||||||||
| Interest expense | |||||||||||||||
| Deposits | 14,114 | 12,727 | 10,539 | 9,755 | 7,026 | ||||||||||
| Borrowings | 6,905 | 7,946 | 7,487 | 6,916 | 4,462 | ||||||||||
| Total interest expense | 21,019 | 20,673 | 18,026 | 16,671 | 11,488 | ||||||||||
| Net interest income | 38,638 | 39,349 | 40,180 | 40,591 | 27,057 | ||||||||||
| (Reversal of) provision for loan losses | (179 | ) | 971 | 2,100 | 717 | 423 | |||||||||
| Net interest income after provision for loan losses | 38,817 | 38,378 | 38,080 | 39,874 | 26,634 | ||||||||||
| Non-interest income | |||||||||||||||
| Fees and service charges | 1,674 | 1,258 | 1,173 | 1,205 | 1,537 | ||||||||||
| (Loss) gain on sale and call of securities | (182 | ) | - | - | 9 | (1 | ) | ||||||||
| Gain on sale of loans | 151 | 101 | 132 | 127 | 346 | ||||||||||
| (Loss) gain on sale and write down of other real estate owned | (6 | ) | 36 | (50 | ) | 60 | 7 | ||||||||
| Income from bank owned life insurance | 1,560 | 1,599 | 1,594 | 1,604 | 1,227 | ||||||||||
| Electronic banking fees and charges | 253 | 277 | 250 | 278 | 243 | ||||||||||
| Miscellaneous | 226 | 38 | 83 | 75 | 189 | ||||||||||
| Total non-interest income | 3,676 | 3,309 | 3,182 | 3,358 | 3,548 | ||||||||||
| Non-interest expense | |||||||||||||||
| Salaries and employee benefits | 15,350 | 15,699 | 15,642 | 15,277 | 12,814 | ||||||||||
| Net occupancy expense of premises | 2,979 | 2,761 | 2,736 | 2,716 | 2,359 | ||||||||||
| Equipment and systems | 3,053 | 3,377 | 2,926 | 2,776 | 2,323 | ||||||||||
| Advertising and marketing | 739 | 787 | 577 | 757 | 745 | ||||||||||
| Federal deposit insurance premium | 455 | 421 | 465 | 463 | 350 | ||||||||||
| Directors' compensation | 770 | 746 | 758 | 754 | 689 | ||||||||||
| Merger-related expenses | - | - | - | 5,149 | 401 | ||||||||||
| Miscellaneous | 3,425 | 3,479 | 3,353 | 3,365 | 2,862 | ||||||||||
| Total non-interest expense | 26,771 | 27,270 | 26,457 | 31,257 | 22,543 | ||||||||||
| Income before income taxes | 15,722 | 14,417 | 14,805 | 11,975 | 7,639 | ||||||||||
| Income taxes | 4,305 | 3,649 | 3,659 | 4,257 | 2,262 | ||||||||||
| Net income | $ | 11,417 | $ | 10,768 | $ | 11,146 | $ | 7,718 | $ | 5,377 | |||||
| Net income per common share (EPS) | |||||||||||||||
| Basic | $ | 0.13 | $ | 0.12 | $ | 0.12 | $ | 0.08 | $ | 0.07 | |||||
| Diluted | $ | 0.13 | $ | 0.12 | $ | 0.12 | $ | 0.08 | $ | 0.07 | |||||
| Dividends declared (1) | |||||||||||||||
| Cash dividends declared per common share | $ | 0.06 | $ | 0.05 | $ | 0.20 | $ | 0.04 | $ | 0.03 | |||||
| Cash dividends declared | $ | 5,338 | $ | 4,082 | $ | 19,404 | $ | 3,892 | $ | 2,262 | |||||
| Dividend payout ratio | 46.8 | % | 37.9 | % | 174.1 | % | 50.4 | % | 42.1 | % | |||||
| Weighted average number of common shares outstanding | |||||||||||||||
| Basic | 89,488 | 92,434 | 95,127 | 98,046 | 75,492 | ||||||||||
| Diluted | 89,532 | 92,480 | 95,181 | 98,100 | 75,539 | ||||||||||
| (1) | Dividends declared during the quarter ended September 30, 2018 include a $0.16 special dividend representing a supplemental distribution of net income to stockholders from the fiscal year ended June 30, 2018. |
| For the three months ended | |||||||||||||||
| Average Balance Sheet Data | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| (Dollars in Thousands, Unaudited) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||
| Assets | |||||||||||||||
| Interest-earning assets: | |||||||||||||||
| Loans receivable, including loans held for sale | $ | 4,709,052 | $ | 4,758,587 | $ | 4,562,375 | $ | 4,507,336 | $ | 3,293,664 | |||||
| Taxable investment securities | 1,161,492 | 1,158,720 | 1,180,655 | 1,192,066 | 1,003,600 | ||||||||||
| Tax-exempt investment securities | 134,309 | 135,453 | 136,056 | 134,683 | 127,605 | ||||||||||
| Other interest-earning assets | 107,554 | 87,916 | 112,629 | 142,591 | 67,770 | ||||||||||
| Total interest-earning assets | 6,112,407 | 6,140,676 | 5,991,715 | 5,976,676 | 4,492,639 | ||||||||||
| Non-interest-earning assets | 574,921 | 587,921 | 596,006 | 586,976 | 369,299 | ||||||||||
| Total assets | $ | 6,687,328 | $ | 6,728,597 | $ | 6,587,721 | $ | 6,563,652 | $ | 4,861,938 | |||||
| Liabilities and Stockholders' Equity | |||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Interest-bearing demand | $ | 790,567 | $ | 792,989 | $ | 788,148 | $ | 1,004,445 | $ | 870,762 | |||||
| Savings and club | 773,308 | 743,676 | 747,743 | 724,430 | 513,948 | ||||||||||
| Certificates of deposit | 2,288,836 | 2,214,932 | 2,046,997 | 1,983,372 | 1,385,151 | ||||||||||
| Total interest-bearing deposits | 3,852,711 | 3,751,597 | 3,582,888 | 3,712,247 | 2,769,861 | ||||||||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 1,292,168 | 1,293,470 | 1,350,113 | 1,179,147 | 777,721 | ||||||||||
| Other borrowings | 26,037 | 119,281 | 40,981 | 34,636 | 33,529 | ||||||||||
| Total borrowings | 1,318,205 | 1,412,751 | 1,391,094 | 1,213,783 | 811,250 | ||||||||||
| Total interest-bearing liabilities | 5,170,916 | 5,164,348 | 4,973,982 | 4,926,030 | 3,581,111 | ||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||
| Non-interest-bearing deposits | 307,645 | 315,165 | 314,114 | 305,763 | 267,152 | ||||||||||
| Other non-interest-bearing liabilities | 35,930 | 37,374 | 43,533 | 39,340 | 24,953 | ||||||||||
| Total non-interest-bearing liabilities | 343,575 | 352,539 | 357,647 | 345,103 | 292,105 | ||||||||||
| Total liabilities | 5,514,491 | 5,516,887 | 5,331,629 | 5,271,133 | 3,873,216 | ||||||||||
| Stockholders' equity | 1,172,837 | 1,211,710 | 1,256,092 | 1,292,519 | 988,722 | ||||||||||
| Total liabilities and stockholders' equity | $ | 6,687,328 | $ | 6,728,597 | $ | 6,587,721 | $ | 6,563,652 | $ | 4,861,938 | |||||
| Average interest-earning assets to average interest-bearing liabilities | 118.21 | % | 118.91 | % | 120.46 | % | 121.33 | % | 125.45 | % | |||||
| For the three months ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| Performance Ratio Highlights | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||
| Average yield on interest-earning assets: | |||||||||||||||
| Loans receivable, including loans held for sale | 4.09 | % | 4.12 | % | 4.16 | % | 4.14 | % | 3.73 | % | |||||
| Taxable investment securities | 3.28 | % | 3.12 | % | 3.01 | % | 2.91 | % | 2.57 | % | |||||
| Tax-exempt investment securities (1) | 2.12 | % | 2.11 | % | 2.10 | % | 2.09 | % | 2.04 | % | |||||
| Other interest-earning assets | 4.91 | % | 5.66 | % | 4.17 | % | 3.58 | % | 4.22 | % | |||||
| Total interest-earning assets | 3.91 | % | 3.91 | % | 3.89 | % | 3.83 | % | 3.43 | % | |||||
| Average cost of interest-bearing liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Interest-bearing demand | 1.06 | % | 0.97 | % | 0.86 | % | 0.89 | % | 0.84 | % | |||||
| Savings and club | 0.60 | % | 0.49 | % | 0.41 | % | 0.29 | % | 0.12 | % | |||||
| Certificates of deposit | 1.90 | % | 1.79 | % | 1.58 | % | 1.41 | % | 1.46 | % | |||||
| Total interest-bearing deposits | 1.47 | % | 1.36 | % | 1.18 | % | 1.05 | % | 1.01 | % | |||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 2.13 | % | 2.27 | % | 2.19 | % | 2.34 | % | 2.27 | % | |||||
| Other borrowings | 0.35 | % | 1.99 | % | 0.94 | % | 0.34 | % | 0.56 | % | |||||
| Total borrowings | 2.10 | % | 2.25 | % | 2.15 | % | 2.28 | % | 2.20 | % | |||||
| Total interest-bearing liabilities | 1.63 | % | 1.60 | % | 1.45 | % | 1.35 | % | 1.28 | % | |||||
| Interest rate spread (2) | 2.28 | % | 2.31 | % | 2.44 | % | 2.48 | % | 2.15 | % | |||||
| Net interest margin (3) | 2.53 | % | 2.56 | % | 2.68 | % | 2.72 | % | 2.41 | % | |||||
| Non-interest income to average assets (annualized) | 0.22 | % | 0.20 | % | 0.19 | % | 0.20 | % | 0.29 | % | |||||
| Non-interest expense to average assets (annualized) | 1.60 | % | 1.62 | % | 1.61 | % | 1.90 | % | 1.85 | % | |||||
| Efficiency ratio (4) | 63.27 | % | 63.93 | % | 61.01 | % | 71.12 | % | 73.66 | % | |||||
| Return on average assets (annualized) | 0.68 | % | 0.64 | % | 0.68 | % | 0.47 | % | 0.44 | % | |||||
| Return on average equity (annualized) | 3.89 | % | 3.55 | % | 3.55 | % | 2.39 | % | 2.18 | % | |||||
| Return on average tangible equity (annualized) (5) | 4.78 | % | 4.33 | % | 4.29 | % | 2.90 | % | 2.44 | % | |||||
| (1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. | |
| (2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. | |
| (3) | Net interest income divided by average interest-earning assets. | |
| (4) | Non-interest expense divided by the sum of net interest income and non-interest income. | |
| (5) | Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets. |
This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures provide additional information which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is included below. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.
| Reconciliation of GAAP to Non-GAAP | For the three months ended | ||||||||||||||
| (Dollars in Thousands, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| Except Per Share Data, Unaudited) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||
| Adjusted Net Income | |||||||||||||||
| Net income (GAAP) | $ | 11,417 | $ | 10,768 | $ | 11,146 | $ | 7,718 | $ | 5,377 | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | - | - | - | 5,149 | 401 | ||||||||||
| Income tax benefit from merger-related expenses | - | - | - | (1,451 | ) | (22 | ) | ||||||||
| Adjusted net income (non-GAAP) | $ | 11,417 | $ | 10,768 | $ | 11,146 | $ | 11,416 | $ | 5,756 | |||||
| Adjusted Net Income per Common Share (EPS) | |||||||||||||||
| Net income per common share Basic and Diluted (GAAP) | $ | 0.13 | $ | 0.12 | $ | 0.12 | $ | 0.08 | $ | 0.07 | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | - | - | - | 0.05 | 0.01 | ||||||||||
| Income tax benefit from merger-related expenses | - | - | - | (0.01 | ) | - | |||||||||
| Adjusted net income per common share Basic and Diluted (non-GAAP) | $ | 0.13 | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.08 | |||||
| Adjusted Non-Interest Expense | |||||||||||||||
| Non-interest expense (GAAP) | $ | 26,771 | $ | 27,270 | $ | 26,457 | $ | 31,257 | $ | 22,543 | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | - | - | - | (5,149 | ) | (401 | ) | ||||||||
| Adjusted non-interest expense (non-GAAP) | $ | 26,771 | $ | 27,270 | $ | 26,457 | $ | 26,108 | $ | 22,142 | |||||
| Adjusted Non-Interest Expense Ratio | |||||||||||||||
| Non-interest expense to average assets (GAAP) | 1.60 | % | 1.62 | % | 1.61 | % | 1.90 | % | 1.85 | % | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | 0.00 | % | 0.00 | % | 0.00 | % | -0.31 | % | -0.03 | % | |||||
| Adjusted non-interest expense ratio (non-GAAP) | 1.60 | % | 1.62 | % | 1.61 | % | 1.59 | % | 1.82 | % | |||||
| Adjusted Efficiency Ratio | |||||||||||||||
| Non-interest expense / (Net interest income + non-interest income) (GAAP) | 63.3 | % | 63.9 | % | 61.0 | % | 71.1 | % | 73.7 | % | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | 0.0 | % | 0.0 | % | 0.0 | % | -11.7 | % | -1.3 | % | |||||
| Adjusted efficiency ratio (non-GAAP) | 63.3 | % | 63.9 | % | 61.0 | % | 59.4 | % | 72.4 | % | |||||
| For the three months ended | |||||||||||||||
| Reconciliation of GAAP to Non-GAAP | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| (Unaudited) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||
| Adjusted Return on Average Assets | |||||||||||||||
| Return on average assets (GAAP) | 0.68 | % | 0.64 | % | 0.68 | % | 0.47 | % | 0.44 | % | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | 0.00 | % | 0.00 | % | 0.00 | % | 0.31 | % | 0.03 | % | |||||
| Income tax benefit from merger-related expenses | 0.00 | % | 0.00 | % | 0.00 | % | -0.09 | % | 0.00 | % | |||||
| Adjusted return on average assets (non-GAAP) | 0.68 | % | 0.64 | % | 0.68 | % | 0.69 | % | 0.47 | % | |||||
| Adjusted Return on Average Equity | |||||||||||||||
| Return on average equity (GAAP) | 3.89 | % | 3.55 | % | 3.55 | % | 2.39 | % | 2.18 | % | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | 0.00 | % | 0.00 | % | 0.00 | % | 1.59 | % | 0.16 | % | |||||
| Income tax benefit from merger-related expenses | 0.00 | % | 0.00 | % | 0.00 | % | -0.45 | % | -0.01 | % | |||||
| Adjusted return on average equity (non-GAAP) | 3.89 | % | 3.55 | % | 3.55 | % | 3.53 | % | 2.33 | % | |||||