FAIRFIELD, N.J., Jan. 30, 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 December 31, 2018 of $10.8 million, or $0.12 per basic and diluted share as compared to net income of $11.1 million, or $0.12 per basic and diluted share, for the quarter ended September 30, 2018.
Craig L. Montanaro, President and Chief Executive Officer, commented, “We are pleased to report this quarter’s results which were highlighted by strong growth in loans and deposits, coupled with the continuation of our outstanding asset quality trends. Recognizing the challenges presented by the flat yield curve and rising funding costs, our strategic focus is on the execution of initiatives designed to grow our core deposit franchise and build long-term shareholder value. These initiatives include the acceleration of our efforts to increase digital channel adoption, the robust analysis of retail branch consolidation opportunities and the selective opening of low-cost, technology-driven retail locations in highly attractive markets. As a complement to these strategies we remain steadfast in our commitment to prudently manage capital as evidenced by the increase of our quarterly cash dividend and the repurchase of 3.8 million shares of common stock during the quarter.”
Balance Sheet Highlights
- Total loans, excluding loans held for sale and the allowance for loan losses, increased by $92.9 million to $4.75 billion, or 70.9% of total assets, at December 31, 2018 from $4.66 billion, or 70.0% of total assets, at September 30, 2018. Commercial mortgage loans comprised $62.9 million of this increase whose aggregate balances represented 68.9% of total loans at December 31, 2018.
- Total deposits increased by $218.6 million to $4.17 billion at December 31, 2018, from $3.95 billion at September 30, 2018. The net increase in deposits reflected increases of $85.7 million and $132.9 million in retail and wholesale deposits, respectively.
- Total borrowings decreased by $108.9 million to $1.31 billion at December 31, 2018, from $1.42 billion at September 30, 2018. The net decrease in borrowings reflected the maturity of $69.5 million in long-term Federal Home Loan Bank (“FHLB”) advances, a $60.0 million decrease in the balance of overnight borrowings and a $6.9 million decrease in depositor sweep account balances. These decreases were partially offset by the addition of a $27.0 million FHLB Community Investment Program (“CIP”) long-term advance during the period.
Earnings Highlights
- Interest income totaled $60.0 million for the quarter ended December 31, 2018, an increase of $1.8 million or 3.1% from the quarter ended September 30, 2018. Despite this achievement, interest expense increased by $2.6 million between the same comparative periods resulting in an $831,000 decrease in net interest income to $39.3 million for the quarter ended December 31, 2018, from $40.2 million for the quarter ended September 30, 2018.
- The Company’s net interest margin decreased to 2.56% for the quarter ended December 31, 2018 from 2.68% for the quarter ended September 30, 2018, primarily driven by a 15 basis point increase in the cost of interest-bearing liabilities that was partially offset by a two basis point increase in the yield on earning assets.
The Company’s non-interest income continued to supplement and diversify its sources of revenue.
- Fees and service charges increased by $85,000 to $1.3 million for the quarter ended December 31, 2018 compared to $1.2 million for the quarter ended September 30, 2018.
- Aggregate loan sale gains totaled $101,000 for the quarter ended December 31, 2018 compared to $132,000 for the quarter ended September 30, 2018. The modest decrease in gains on sale of loans reflected a seasonal decline in the volume of loans sold between comparative periods.
The Company continued to evaluate and implement tactics and strategies designed to improve operating efficiency, make more effective use of its supporting infrastructure and manage its effective income tax rate.
- Non-interest expense totaled $27.3 million for the quarter ended December 31, 2018, an increase of $813,000 from the quarter ended September 30, 2018. This increase was largely attributable to $659,000 of non-recurring expenses associated with the October 2018 conversion and integration of Clifton Savings Bank’s core processing system arising from the Company’s prior acquisition of Clifton Bancorp during fiscal 2018 and an increase of $210,000 in advertising and marketing expense.
- The Company’s ratio of non-interest expense to average assets totaled 1.62% for the quarter ended December 31, 2018 compared to 1.61% for the prior quarter ended September 30, 2018. For those same comparative periods, the Company’s efficiency ratios were 63.9% and 61.0%, respectively.
- Income tax expense totaled $3.6 million for the quarter ended December 31, 2018 as compared to $3.7 million for the quarter ended September 30, 2018 resulting in an effective tax rate of 25.3% and 24.7%, respectively.
Collectively, these factors resulted in a modest decrease in net income for the quarter ended December 31, 2018 compared to the prior quarter ended September 30, 2018.
- The Company’s return on average assets for the quarter ended December 31, 2018 totaled 0.64% compared to 0.68% for the quarter ended September 30, 2018.
- The Company’s return on average equity remained stable, totaling 3.55% for the quarters ended December 31, 2018 and September 30, 2018.
Asset Quality Highlights
- Asset quality remained strong throughout the quarter ended December 31, 2018. The outstanding balance of nonperforming loans totaled $20.8 million, or 0.44% of total loans, at December 31, 2018 as compared to $20.5 million, or 0.44% of total loans, at September 30, 2018.
- The allowance for loan losses increased to $33.5 million at December 31, 2018 from $32.7 million at September 30, 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% and 0.69%, respectively. 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 $176,000 for the quarter ended December 31, 2018, reflecting an annualized net charge off rate of 0.01% on the average balance of total loans for the period. By comparison, the Company’s net charge offs totaled approximately $234,000 for the quarter ended September 30, 2018, reflecting an annualized net charge off rate of 0.02%.
- The Company’s provision for loan losses decreased by $1.1 million to $971,000 for the quarter ended December 31, 2018 compared to $2.1 million for the quarter ended September 30, 2018. The decrease in provision expense was largely attributable to the effects of comparatively lower growth during the quarter ended December 31, 2018 in the performing portion of the loan portfolio that is collectively evaluated for impairment.
Capital Highlights
- The Company increased its regular quarterly cash dividend by $0.01 per share, from $0.04 per share during the quarter ended September 30, 2018, to $0.05 per share during the quarter ended December 31, 2018. In addition to the payment of its regular dividend, the Company paid a special dividend of $0.16 during the quarter ended September 30, 2018. The Company continually evaluates its dividend policies and practices in relation to its overall capital management and shareholder value objectives.
- During the quarter ended December 31, 2018, the Company repurchased 3,827,925 shares of its common stock at a total cost of $50.2 million and at an average cost of $13.11 per share. Such shares were repurchased in conjunction with the Company’s third share repurchase program announced in April 2018, through which it authorized the repurchase of 10,238,557 shares, or 10% of its outstanding shares of common stock. Through December 31, 2018, the Company has repurchased a total of 8,480,985 shares, or 82.8% of the shares authorized for repurchase under this third program, at a total cost of $115.5 million and at an average cost of $13.62 per share.
- The Company’s and Bank’s regulatory capital ratios at December 31, 2018 were well 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 December 31, 2018 compared to those for the prior linked-quarter ended September 30, 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, | December 31, | September 30, | Variance | or Change | ||||||||
| Except per Share Data, Unaudited) | 2018 | 2018 | or Change | Pct. | ||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 51,483 | $ | 44,486 | $ | 6,997 | 15.7 | % | ||||
| Securities available for sale | 666,602 | 706,240 | (39,638 | ) | -5.6 | % | ||||||
| Securities held to maturity | 598,318 | 602,838 | (4,520 | ) | -0.7 | % | ||||||
| Loans held-for-sale | 1,001 | 1,503 | (502 | ) | -33.4 | % | ||||||
| Loans receivable, including yield adjustments | 4,753,392 | 4,660,507 | 92,885 | 2.0 | % | |||||||
| Less allowance for loan losses | (33,526 | ) | (32,731 | ) | (795 | ) | 2.4 | % | ||||
| Net loans receivable | 4,719,866 | 4,627,776 | 92,090 | 2.0 | % | |||||||
| Premises and equipment | 58,414 | 57,635 | 779 | 1.4 | % | |||||||
| Federal Home Loan Bank stock | 64,514 | 66,428 | (1,914 | ) | -2.9 | % | ||||||
| Accrued interest receivable | 19,435 | 19,455 | (20 | ) | -0.1 | % | ||||||
| Goodwill | 210,895 | 210,895 | - | 0.0 | % | |||||||
| Core deposit intangible | 5,743 | 6,018 | (275 | ) | -4.6 | % | ||||||
| Bank owned life insurance | 253,009 | 251,410 | 1,599 | 0.6 | % | |||||||
| Deferred income taxes, net | 24,692 | 22,136 | 2,556 | 11.5 | % | |||||||
| Other real estate owned | 508 | 674 | (166 | ) | -24.6 | % | ||||||
| Other assets | 27,960 | 38,717 | (10,757 | ) | -27.8 | % | ||||||
| Total assets | $ | 6,702,440 | $ | 6,656,211 | $ | 46,229 | 0.7 | % | ||||
| Liabilities | ||||||||||||
| Deposits | $ | 4,173,434 | $ | 3,954,821 | $ | 218,613 | 5.5 | % | ||||
| Borrowings | 1,310,547 | 1,419,424 | (108,877 | ) | -7.7 | % | ||||||
| Advance payments by borrowers for taxes | 17,201 | 10,687 | 6,514 | 61.0 | % | |||||||
| Other liabilities | 17,997 | 35,198 | (17,201 | ) | -48.9 | % | ||||||
| Total liabilities | 5,519,179 | 5,420,130 | 99,049 | 1.8 | % | |||||||
| Stockholders' Equity | ||||||||||||
| Common stock | 938 | 978 | (40 | ) | -4.1 | % | ||||||
| Paid-in capital | 848,145 | 897,551 | (49,406 | ) | -5.5 | % | ||||||
| Retained earnings | 356,993 | 350,838 | 6,155 | 1.8 | % | |||||||
| Unearned ESOP shares | (31,617 | ) | (32,104 | ) | 487 | -1.5 | % | |||||
| Accumulated other comprehensive income, net | 8,802 | 18,818 | (10,016 | ) | -53.2 | % | ||||||
| Total stockholders' equity | 1,183,261 | 1,236,081 | (52,820 | ) | -4.3 | % | ||||||
| Total liabilities and stockholders' equity | $ | 6,702,440 | $ | 6,656,211 | $ | 46,229 | 0.7 | % | ||||
| Consolidated capital ratios | ||||||||||||
| Equity to assets | 17.65 | % | 18.57 | % | -0.92 | % | ||||||
| Tangible equity to tangible assets | 14.90 | % | 15.83 | % | -0.93 | % | ||||||
| Share data | ||||||||||||
| Outstanding shares | 93,772 | 97,754 | (3,982 | ) | -4.1 | % | ||||||
| Equity per share | $ | 12.62 | $ | 12.64 | $ | (0.02 | ) | -0.2 | % | |||
| Tangible equity per share (1) | $ | 10.31 | $ | 10.43 | $ | (0.12 | ) | -1.2 | % | |||
| (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, | December 31, | September 30, | Variance | or Change | ||||||||
| Except per Share Data, Unaudited) | 2018 | 2018 | or Change | Pct. | ||||||||
| Interest income | ||||||||||||
| Loans | $ | 49,015 | $ | 47,437 | $ | 1,578 | 3.3 | % | ||||
| Taxable investment securities | 9,051 | 8,879 | 172 | 1.9 | % | |||||||
| Tax-exempt investment securities | 713 | 716 | (3 | ) | -0.4 | % | ||||||
| Other interest-earning assets | 1,243 | 1,174 | 69 | 5.9 | % | |||||||
| Total Interest Income | 60,022 | 58,206 | 1,816 | 3.1 | % | |||||||
| Interest expense | ||||||||||||
| Deposits | 12,727 | 10,539 | 2,188 | 20.8 | % | |||||||
| Borrowings | 7,946 | 7,487 | 459 | 6.1 | % | |||||||
| Total interest expense | 20,673 | 18,026 | 2,647 | 14.7 | % | |||||||
| Net interest income | 39,349 | 40,180 | (831 | ) | -2.1 | % | ||||||
| Provision for loan losses | 971 | 2,100 | (1,129 | ) | -53.8 | % | ||||||
| Net interest income after provision for loan losses | 38,378 | 38,080 | 298 | 0.8 | % | |||||||
| Non-interest income | ||||||||||||
| Fees and service charges | 1,258 | 1,173 | 85 | 7.2 | % | |||||||
| Gain on sale of loans | 101 | 132 | (31 | ) | -23.5 | % | ||||||
| Gain (loss) on sale of other real estate owned | 36 | (50 | ) | 86 | -172.0 | % | ||||||
| Income from bank owned life insurance | 1,599 | 1,594 | 5 | 0.3 | % | |||||||
| Electronic banking fees and charges | 277 | 250 | 27 | 10.8 | % | |||||||
| Miscellaneous | 38 | 83 | (45 | ) | -54.2 | % | ||||||
| Total non-interest income | 3,309 | 3,182 | 127 | 4.0 | % | |||||||
| Non-interest expense | ||||||||||||
| Salaries and employee benefits | 15,699 | 15,642 | 57 | 0.4 | % | |||||||
| Net occupancy expense of premises | 2,761 | 2,736 | 25 | 0.9 | % | |||||||
| Equipment and systems | 3,377 | 2,926 | 451 | 15.4 | % | |||||||
| Advertising and marketing | 787 | 577 | 210 | 36.4 | % | |||||||
| Federal deposit insurance premium | 421 | 465 | (44 | ) | -9.5 | % | ||||||
| Directors' compensation | 746 | 758 | (12 | ) | -1.6 | % | ||||||
| Miscellaneous | 3,479 | 3,353 | 126 | 3.8 | % | |||||||
| Total non-interest expense | 27,270 | 26,457 | 813 | 3.1 | % | |||||||
| Income before income taxes | 14,417 | 14,805 | (388 | ) | -2.6 | % | ||||||
| Income taxes | 3,649 | 3,659 | (10 | ) | -0.3 | % | ||||||
| Net income | $ | 10,768 | $ | 11,146 | $ | (378 | ) | -3.4 | % | |||
| Net income per common share (EPS) | ||||||||||||
| Basic | $ | 0.12 | $ | 0.12 | $ | - | ||||||
| Diluted | $ | 0.12 | $ | 0.12 | $ | - | ||||||
| Dividends declared (1) | ||||||||||||
| Cash dividends declared per common share | $ | 0.05 | $ | 0.20 | $ | (0.15 | ) | |||||
| Cash dividends declared | $ | 4,082 | $ | 19,404 | $ | (15,322 | ) | |||||
| Dividend payout ratio | 37.9 | % | 174.1 | % | -136.2 | % | ||||||
| Weighted average number of common shares outstanding | ||||||||||||
| Basic | 92,434 | 95,127 | (2,693 | ) | ||||||||
| Diluted | 92,480 | 95,181 | (2,701 | ) | ||||||||
| (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 | Variance | |||||||||||
| Average Balance Sheet Data | December 31, | September 30, | Variance | or Change | ||||||||
| (Dollars in Thousands, Unaudited) | 2018 | 2018 | or Change | Pct. | ||||||||
| Assets | ||||||||||||
| Interest-earning assets: | ||||||||||||
| Loans receivable, including loans held for sale | $ | 4,758,587 | $ | 4,562,375 | $ | 196,212 | 4.3 | % | ||||
| Taxable investment securities | 1,158,720 | 1,180,655 | (21,935 | ) | -1.9 | % | ||||||
| Tax-exempt investment securities | 135,453 | 136,056 | (603 | ) | -0.4 | % | ||||||
| Other interest-earning assets | 87,916 | 112,629 | (24,713 | ) | -21.9 | % | ||||||
| Total interest-earning assets | 6,140,676 | 5,991,715 | 148,961 | 2.5 | % | |||||||
| Non-interest-earning assets | 587,921 | 596,006 | (8,085 | ) | -1.4 | % | ||||||
| Total assets | $ | 6,728,597 | $ | 6,587,721 | $ | 140,876 | 2.1 | % | ||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||
| Deposits: | ||||||||||||
| Interest-bearing demand | $ | 792,989 | $ | 788,148 | $ | 4,841 | 0.6 | % | ||||
| Savings and club | 743,676 | 747,743 | (4,067 | ) | -0.5 | % | ||||||
| Certificates of deposit | 2,214,932 | 2,046,997 | 167,935 | 8.2 | % | |||||||
| Total interest-bearing deposits | 3,751,597 | 3,582,888 | 168,709 | 4.7 | % | |||||||
| Borrowings: | ||||||||||||
| Federal Home Loan Bank advances | 1,293,470 | 1,350,113 | (56,643 | ) | -4.2 | % | ||||||
| Other borrowings | 119,281 | 40,981 | 78,300 | 191.1 | % | |||||||
| Total borrowings | 1,412,751 | 1,391,094 | 21,657 | 1.6 | % | |||||||
| Total interest-bearing liabilities | 5,164,348 | 4,973,982 | 190,366 | 3.8 | % | |||||||
| Non-interest-bearing liabilities: | ||||||||||||
| Non-interest-bearing deposits | 315,165 | 314,114 | 1,051 | 0.3 | % | |||||||
| Other non-interest-bearing liabilities | 37,374 | 43,533 | (6,159 | ) | -14.1 | % | ||||||
| Total non-interest-bearing liabilities | 352,539 | 357,647 | (5,108 | ) | -1.4 | % | ||||||
| Total liabilities | 5,516,887 | 5,331,629 | 185,258 | 3.5 | % | |||||||
| Stockholders' equity | 1,211,710 | 1,256,092 | (44,382 | ) | -3.5 | % | ||||||
| Total liabilities and stockholders' equity | $ | 6,728,597 | $ | 6,587,721 | $ | 140,876 | 2.1 | % | ||||
| Average interest-earning assets to average interest-bearing liabilities | 118.91 | % | 120.46 | % | -1.56 | % | -1.3 | % | ||||
| For the three months ended | |||||||||
| Performance Ratio Highlights | December 31, | September 30, | Variance | ||||||
| 2018 | 2018 | or Change | |||||||
| Average yield on interest-earning assets: | |||||||||
| Loans receivable, including loans held for sale | 4.12 | % | 4.16 | % | -0.04 | % | |||
| Taxable investment securities | 3.12 | % | 3.01 | % | 0.11 | % | |||
| Tax-exempt investment securities (1) | 2.11 | % | 2.10 | % | 0.01 | % | |||
| Other interest-earning assets | 5.66 | % | 4.17 | % | 1.49 | % | |||
| Total interest-earning assets | 3.91 | % | 3.89 | % | 0.02 | % | |||
| Average cost of interest-bearing liabilities: | |||||||||
| Deposits: | |||||||||
| Interest-bearing demand | 0.97 | % | 0.86 | % | 0.11 | % | |||
| Savings and club | 0.49 | % | 0.41 | % | 0.08 | % | |||
| Certificates of deposit | 1.79 | % | 1.58 | % | 0.21 | % | |||
| Total interest-bearing deposits | 1.36 | % | 1.18 | % | 0.18 | % | |||
| Borrowings: | |||||||||
| Federal Home Loan Bank advances | 2.27 | % | 2.19 | % | 0.08 | % | |||
| Other borrowings | 1.99 | % | 0.94 | % | 1.05 | % | |||
| Total borrowings | 2.25 | % | 2.15 | % | 0.10 | % | |||
| Total interest-bearing liabilities | 1.60 | % | 1.45 | % | 0.15 | % | |||
| Interest rate spread (2) | 2.31 | % | 2.44 | % | -0.13 | % | |||
| Net interest margin (3) | 2.56 | % | 2.68 | % | -0.12 | % | |||
| Non-interest income to average assets (annualized) | 0.20 | % | 0.19 | % | 0.01 | % | |||
| Non-interest expense to average assets (annualized) | 1.62 | % | 1.61 | % | 0.01 | % | |||
| Efficiency ratio (4) | 63.93 | % | 61.01 | % | 2.92 | % | |||
| Return on average assets (annualized) | 0.64 | % | 0.68 | % | -0.04 | % | |||
| Return on average equity (annualized) | 3.55 | % | 3.55 | % | 0.00 | % | |||
| (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. | |||||||||
| Five-Quarter Financial Trend Analysis | |||||||||||||||
| Summary Balance Sheet | At | ||||||||||||||
| (Dollars and Shares in Thousands, | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| Except Per Share Data, Unaudited) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
| Assets | |||||||||||||||
| Cash and cash equivalents | $ | 51,483 | $ | 44,486 | $ | 128,864 | $ | 38,283 | $ | 50,685 | |||||
| Securities available for sale | 666,602 | 706,240 | 725,085 | 684,771 | 637,671 | ||||||||||
| Securities held to maturity | 598,318 | 602,838 | 589,730 | 459,380 | 471,452 | ||||||||||
| Loans held-for-sale | 1,001 | 1,503 | 863 | 2,377 | 3,490 | ||||||||||
| Loans receivable, including yield adjustments | 4,753,392 | 4,660,507 | 4,501,348 | 3,351,369 | 3,291,516 | ||||||||||
| Less allowance for loan losses | (33,526 | ) | (32,731 | ) | (30,865 | ) | (30,248 | ) | (30,066 | ) | |||||
| Net loans receivable | 4,719,866 | 4,627,776 | 4,470,483 | 3,321,121 | 3,261,450 | ||||||||||
| Premises and equipment | 58,414 | 57,635 | 56,240 | 42,856 | 41,829 | ||||||||||
| Federal Home Loan Bank stock | 64,514 | 66,428 | 59,004 | 39,112 | 39,113 | ||||||||||
| Accrued interest receivable | 19,435 | 19,455 | 18,510 | 13,926 | 13,524 | ||||||||||
| Goodwill | 210,895 | 210,895 | 210,895 | 108,591 | 108,591 | ||||||||||
| Core deposit intangible | 5,743 | 6,018 | 6,295 | 206 | 233 | ||||||||||
| Bank owned life insurance | 253,009 | 251,410 | 249,816 | 184,981 | 183,754 | ||||||||||
| Deferred income taxes, net | 24,692 | 22,136 | 23,754 | 3,898 | 6,941 | ||||||||||
| Other real estate owned | 508 | 674 | 725 | 1,094 | 1,693 | ||||||||||
| Other assets | 27,960 | 38,717 | 39,610 | 33,104 | 23,421 | ||||||||||
| Total assets | $ | 6,702,440 | $ | 6,656,211 | $ | 6,579,874 | $ | 4,933,700 | $ | 4,843,847 | |||||
| Liabilities | |||||||||||||||
| Deposits | 4,173,434 | $ | 3,954,821 | $ | 4,073,604 | $ | 3,067,102 | $ | 3,033,231 | ||||||
| Borrowings | 1,310,547 | 1,419,424 | 1,198,646 | 852,009 | 798,864 | ||||||||||
| Advance payments by borrowers for taxes | 17,201 | 10,687 | 18,088 | 8,969 | 8,511 | ||||||||||
| Other liabilities | 17,997 | 35,198 | 20,788 | 14,419 | 13,968 | ||||||||||
| Total liabilities | 5,519,179 | 5,420,130 | 5,311,126 | 3,942,499 | 3,854,574 | ||||||||||
| Stockholders' Equity | |||||||||||||||
| Common stock | 938 | 978 | 996 | 788 | 795 | ||||||||||
| Paid-in capital | 848,145 | 897,551 | 922,711 | 653,045 | 662,093 | ||||||||||
| Retained earnings | 356,993 | 350,838 | 359,096 | 355,270 | 353,536 | ||||||||||
| Unearned ESOP shares | (31,617 | ) | (32,104 | ) | (32,590 | ) | (33,076 | ) | (33,563 | ) | |||||
| Accumulated other comprehensive income, net | 8,802 | 18,818 | 18,535 | 15,174 | 6,412 | ||||||||||
| Total stockholders' equity | 1,183,261 | 1,236,081 | 1,268,748 | 991,201 | 989,273 | ||||||||||
| Total liabilities and stockholders' equity | $ | 6,702,440 | $ | 6,656,211 | $ | 6,579,874 | $ | 4,933,700 | $ | 4,843,847 | |||||
| Consolidated capital ratios | |||||||||||||||
| Equity to assets | 17.65 | % | 18.57 | % | 19.28 | % | 20.09 | % | 20.42 | % | |||||
| Tangible equity to tangible assets | 14.90 | % | 15.83 | % | 16.53 | % | 18.29 | % | 18.59 | % | |||||
| Share data | |||||||||||||||
| Outstanding shares | 93,772 | 97,754 | 99,626 | 78,765 | 79,527 | ||||||||||
| Equity per share | $ | 12.62 | $ | 12.64 | $ | 12.74 | $ | 12.58 | $ | 12.44 | |||||
| Tangible equity per share (1) | $ | 10.31 | $ | 10.43 | $ | 10.56 | $ | 11.20 | $ | 11.07 | |||||
| (1) Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. | |||||||||||||||
| At | |||||||||||||||
| Supplemental Balance Sheet Highlights | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| (Dollars in Thousands, Unaudited) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
| Cash and cash equivalents | |||||||||||||||
| Cash and due from depository institutions | $ | 24,361 | $ | 21,973 | $ | 26,199 | $ | 18,229 | $ | 17,899 | |||||
| Interest-bearing deposits in other banks | 27,122 | 22,513 | 102,665 | 20,054 | 32,786 | ||||||||||
| Total cash and cash equivalents | $ | 51,483 | $ | 44,486 | $ | 128,864 | $ | 38,283 | $ | 50,685 | |||||
| Securities available for sale | |||||||||||||||
| Debt securities: | |||||||||||||||
| U.S. agency securities | $ | 3,942 | $ | 4,070 | $ | 4,411 | $ | 4,667 | $ | 4,810 | |||||
| Municipal and state obligations | 26,205 | 25,907 | 26,088 | 26,733 | 27,428 | ||||||||||
| Asset-backed securities | 180,828 | 182,390 | 182,620 | 182,066 | 169,484 | ||||||||||
| Collateralized loan obligations | 184,439 | 215,569 | 226,066 | 178,342 | 133,341 | ||||||||||
| Corporate bonds | 144,692 | 147,811 | 147,594 | 142,202 | 142,397 | ||||||||||
| Trust preferred securities | 3,726 | 3,794 | 3,783 | 8,485 | 8,494 | ||||||||||
| Debt securities available for sale | 543,832 | 579,541 | 590,562 | 542,495 | 485,954 | ||||||||||
| Mortgage-backed securities: | |||||||||||||||
| Collateralized mortgage obligations | 23,019 | 23,097 | 24,292 | 25,601 | 27,187 | ||||||||||
| Residential pass-through securities | 91,918 | 95,795 | 102,359 | 108,736 | 116,496 | ||||||||||
| Commercial pass-through securities | 7,833 | 7,807 | 7,872 | 7,939 | 8,034 | ||||||||||
| Mortgage-backed securities | 122,770 | 126,699 | 134,523 | 142,276 | 151,717 | ||||||||||
| Total securities available for sale | $ | 666,602 | $ | 706,240 | $ | 725,085 | $ | 684,771 | $ | 637,671 | |||||
| Securities held to maturity | |||||||||||||||
| Debt securities: | |||||||||||||||
| Municipal and state obligations | $ | 107,826 | $ | 109,061 | $ | 109,483 | $ | 98,011 | $ | 100,671 | |||||
| Subordinated debt | 56,255 | 46,275 | 46,294 | 30,000 | 25,000 | ||||||||||
| Debt securities held to maturity | 164,081 | 155,336 | 155,777 | 128,011 | 125,671 | ||||||||||
| Mortgage-backed securities: | |||||||||||||||
| Collateralized mortgage obligations | 51,540 | 54,130 | 56,886 | 34,309 | 35,861 | ||||||||||
| Residential pass-through securities | 182,335 | 190,812 | 200,622 | 151,605 | 160,487 | ||||||||||
| Commercial pass-through securities | 200,362 | 202,560 | 176,445 | 145,455 | 149,433 | ||||||||||
| Mortgage-backed securities | 434,237 | 447,502 | 433,953 | 331,369 | 345,781 | ||||||||||
| Total securities held to maturity | $ | 598,318 | $ | 602,838 | $ | 589,730 | $ | 459,380 | $ | 471,452 | |||||
| Total securities | $ | 1,264,920 | $ | 1,309,078 | $ | 1,314,815 | $ | 1,144,151 | $ | 1,109,123 | |||||
| At | |||||||||||||||
| Supplemental Balance Sheet Highlights | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| (Dollars in Thousands, Unaudited) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
| Loan portfolio composition: | |||||||||||||||
| Residential first mortgage loans | $ | 1,334,284 | $ | 1,303,249 | $ | 1,297,453 | $ | 563,807 | $ | 574,322 | |||||
| Home equity loans and lines of credit | 96,001 | 93,473 | 90,761 | 79,522 | 80,961 | ||||||||||
| Residential mortgage loans | 1,430,285 | 1,396,722 | 1,388,214 | 643,329 | 655,283 | ||||||||||
| Multifamily mortgage loans | 1,974,409 | 1,898,831 | 1,758,584 | 1,471,573 | 1,438,386 | ||||||||||
| Nonresidential and mixed use mortgage loans | 1,302,583 | 1,315,279 | 1,302,961 | 1,113,385 | 1,069,254 | ||||||||||
| Commercial mortgage loans | 3,276,992 | 3,214,110 | 3,061,545 | 2,584,958 | 2,507,640 | ||||||||||
| Commercial business loans | 70,059 | 78,317 | 85,825 | 88,216 | 92,442 | ||||||||||
| Construction loans | 28,405 | 26,581 | 23,271 | 22,963 | 22,205 | ||||||||||
| Account loans | 3,310 | 3,133 | 3,283 | 3,038 | 2,996 | ||||||||||
| Other consumer loans | 3,524 | 4,427 | 5,777 | 7,186 | 8,951 | ||||||||||
| Consumer loans | 6,834 | 7,560 | 9,060 | 10,224 | 11,947 | ||||||||||
| Total loans, excluding yield adjustments | 4,812,575 | 4,723,290 | 4,567,915 | 3,349,690 | 3,289,517 | ||||||||||
| Unamortized yield adjustments | (59,183 | ) | (62,783 | ) | (66,567 | ) | 1,679 | 1,999 | |||||||
| Loans receivable, including yield adjustments | 4,753,392 | 4,660,507 | 4,501,348 | 3,351,369 | 3,291,516 | ||||||||||
| Less allowance for loan losses | (33,526 | ) | (32,731 | ) | (30,865 | ) | (30,248 | ) | (30,066 | ) | |||||
| Net loans receivable | $ | 4,719,866 | $ | 4,627,776 | $ | 4,470,483 | $ | 3,321,121 | $ | 3,261,450 | |||||
| Loan portfolio allocation: | |||||||||||||||
| Residential first mortgage loans | 27.7 | % | 27.6 | % | 28.4 | % | 16.8 | % | 17.5 | % | |||||
| Home equity loans and lines of credit | 2.0 | % | 2.0 | % | 2.0 | % | 2.4 | % | 2.5 | % | |||||
| Residential mortgage loans | 29.7 | % | 29.6 | % | 30.4 | % | 19.2 | % | 20.0 | % | |||||
| Multifamily mortgage loans | 41.0 | % | 40.2 | % | 38.5 | % | 43.9 | % | 43.7 | % | |||||
| Nonresidential and mixed use mortgage loans | 27.1 | % | 27.8 | % | 28.5 | % | 33.2 | % | 32.5 | % | |||||
| Commercial mortgage loans | 68.1 | % | 68.0 | % | 67.0 | % | 77.1 | % | 76.2 | % | |||||
| Commercial business loans | 1.4 | % | 1.6 | % | 1.9 | % | 2.6 | % | 2.8 | % | |||||
| Construction loans | 0.6 | % | 0.6 | % | 0.5 | % | 0.7 | % | 0.7 | % | |||||
| Account loans | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||||
| Other consumer loans | 0.1 | % | 0.1 | % | 0.1 | % | 0.3 | % | 0.2 | % | |||||
| Consumer loans | 0.2 | % | 0.2 | % | 0.2 | % | 0.4 | % | 0.3 | % | |||||
| 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 | $ | 32 | $ | 19 | $ | 60 | $ | 45 | $ | 31 | |||||
| Nonaccrual loans | 20,743 | 20,473 | 16,799 | 14,190 | 16,315 | ||||||||||
| Total nonperforming loans | 20,775 | 20,492 | 16,859 | 14,235 | 16,346 | ||||||||||
| Other real estate owned | 508 | 674 | 725 | 1,094 | 1,693 | ||||||||||
| Total nonperforming assets | $ | 21,283 | $ | 21,166 | $ | 17,584 | $ | 15,329 | $ | 18,039 | |||||
| Nonperforming loans (% total loans) | 0.44 | % | 0.44 | % | 0.37 | % | 0.42 | % | 0.50 | % | |||||
| Nonperforming assets (% total assets) | 0.32 | % | 0.32 | % | 0.27 | % | 0.31 | % | 0.37 | % | |||||
| Allowance for loan losses (ALLL): | |||||||||||||||
| ALLL to total loans | 0.70 | % | 0.69 | % | 0.68 | % | 0.90 | % | 0.91 | % | |||||
| ALLL to nonperforming loans | 161.38 | % | 159.73 | % | 183.08 | % | 212.49 | % | 183.93 | % | |||||
| Net charge offs | $ | 176 | $ | 234 | $ | 101 | $ | 241 | $ | 315 | |||||
| Average net charge off rate (annualized) | 0.01 | % | 0.02 | % | 0.01 | % | 0.03 | % | 0.04 | % | |||||
| At | |||||||||||||||
| Supplemental Balance Sheet Highlights | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| (Dollars in Thousands, Unaudited) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
| Funding by type: | |||||||||||||||
| Deposits | |||||||||||||||
| Non-interest-bearing deposits | $ | 305,392 | $ | 308,631 | $ | 311,938 | $ | 270,217 | $ | 275,065 | |||||
| Interest-bearing demand | 807,389 | 786,069 | 1,000,989 | 871,425 | 879,385 | ||||||||||
| Savings and club | 760,499 | 743,289 | 744,039 | 515,805 | 517,400 | ||||||||||
| Certificates of deposit | 2,300,154 | 2,116,832 | 2,016,638 | 1,409,655 | 1,361,381 | ||||||||||
| Interest-bearing deposits | 3,868,042 | 3,646,190 | 3,761,666 | 2,796,885 | 2,758,166 | ||||||||||
| Total deposits | 4,173,434 | 3,954,821 | 4,073,604 | 3,067,102 | 3,033,231 | ||||||||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 1,293,845 | 1,335,844 | 1,170,144 | 775,625 | 775,649 | ||||||||||
| Overnight borrowings | - | 60,000 | - | 42,000 | - | ||||||||||
| Depositor sweep accounts | 16,702 | 23,580 | 28,502 | 34,384 | 23,215 | ||||||||||
| Total borrowings | 1,310,547 | 1,419,424 | 1,198,646 | 852,009 | 798,864 | ||||||||||
| Total funding | $ | 5,483,981 | $ | 5,374,245 | $ | 5,272,250 | $ | 3,919,111 | $ | 3,832,095 | |||||
| Loans as a % of deposits | 113.1 | % | 117.1 | % | 109.8 | % | 108.4 | % | 107.6 | % | |||||
| Deposits as a % of total funding | 76.1 | % | 73.6 | % | 77.3 | % | 78.3 | % | 79.2 | % | |||||
| Borrowings as a % of total funding | 23.9 | % | 26.4 | % | 22.7 | % | 21.7 | % | 20.8 | % | |||||
| Funding by source: | |||||||||||||||
| Retail funding | |||||||||||||||
| Non-interest-bearing deposits | $ | 305,392 | $ | 308,631 | $ | 311,938 | $ | 270,217 | $ | 275,065 | |||||
| Interest-bearing demand | 807,389 | 786,069 | 790,164 | 656,114 | 657,349 | ||||||||||
| Savings and club | 760,499 | 743,289 | 744,039 | 515,805 | 517,400 | ||||||||||
| Certificates of deposit | 1,922,287 | 1,871,903 | 1,828,039 | 1,247,900 | 1,210,428 | ||||||||||
| Total retail deposits | 3,795,567 | 3,709,892 | 3,674,180 | 2,690,036 | 2,660,242 | ||||||||||
| Depositor sweep accounts | 16,702 | 23,580 | 28,502 | 34,384 | 23,215 | ||||||||||
| Total retail funding | 3,812,269 | 3,733,472 | 3,702,682 | 2,724,420 | 2,683,457 | ||||||||||
| Wholesale funding: | |||||||||||||||
| Interest-bearing demand | $ | - | $ | - | $ | 210,825 | $ | 215,311 | $ | 222,036 | |||||
| Certificates of deposit (listing service) | 108,067 | 104,990 | 104,256 | 104,934 | 93,853 | ||||||||||
| Certificates of deposit (brokered) | 269,800 | 139,939 | 84,343 | 56,821 | 57,100 | ||||||||||
| Total wholesale deposits | 377,867 | 244,929 | 399,424 | 377,066 | 372,989 | ||||||||||
| FHLB advances | 1,293,845 | 1,335,844 | 1,170,144 | 775,625 | 775,649 | ||||||||||
| Overnight borrowings | - | 60,000 | - | 42,000 | - | ||||||||||
| Total wholesale funding | 1,671,712 | 1,640,773 | 1,569,568 | 1,194,691 | 1,148,638 | ||||||||||
| Total funding | $ | 5,483,981 | $ | 5,374,245 | $ | 5,272,250 | $ | 3,919,111 | $ | 3,832,095 | |||||
| Retail funding as a % of total funding | 69.5 | % | 69.5 | % | 70.2 | % | 69.5 | % | 70.0 | % | |||||
| Wholesale funding as a % of total funding | 30.5 | % | 30.5 | % | 29.8 | % | 30.5 | % | 30.0 | % | |||||
| Summary Income Statement | For the three months ended | ||||||||||||||
| (Dollars and Shares in Thousands, | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| Except Per Share Data, Unaudited) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
| Interest income | |||||||||||||||
| Loans | $ | 49,015 | $ | 47,437 | $ | 46,615 | $ | 30,728 | $ | 30,610 | |||||
| Taxable investment securities | 9,051 | 8,879 | 8,670 | 6,450 | 6,077 | ||||||||||
| Tax-exempt investment securities | 713 | 716 | 702 | 652 | 641 | ||||||||||
| Other interest-earning assets | 1,243 | 1,174 | 1,275 | 715 | 704 | ||||||||||
| Total interest income | 60,022 | 58,206 | 57,262 | 38,545 | 38,032 | ||||||||||
| Interest expense | |||||||||||||||
| Deposits | 12,727 | 10,539 | 9,755 | 7,026 | 6,649 | ||||||||||
| Borrowings | 7,946 | 7,487 | 6,916 | 4,462 | 4,548 | ||||||||||
| Total interest expense | 20,673 | 18,026 | 16,671 | 11,488 | 11,197 | ||||||||||
| Net interest income | 39,349 | 40,180 | 40,591 | 27,057 | 26,835 | ||||||||||
| Provision for loan losses | 971 | 2,100 | 717 | 423 | 936 | ||||||||||
| Net interest income after provision for loan losses | 38,378 | 38,080 | 39,874 | 26,634 | 25,899 | ||||||||||
| Non-interest income | |||||||||||||||
| Fees and service charges | 1,258 | 1,173 | 1,205 | 1,537 | 1,409 | ||||||||||
| Gain (loss) on sale and call of securities | - | - | 9 | (1 | ) | - | |||||||||
| Gain on sale of loans | 101 | 132 | 127 | 346 | 200 | ||||||||||
| Gain (loss) on sale of other real estate owned | 36 | (50 | ) | 60 | 7 | 23 | |||||||||
| Income from bank owned life insurance | 1,599 | 1,594 | 1,604 | 1,227 | 1,264 | ||||||||||
| Electronic banking fees and charges | 277 | 250 | 278 | 243 | 302 | ||||||||||
| Miscellaneous | 38 | 83 | 75 | 189 | 65 | ||||||||||
| Total non-interest income | 3,309 | 3,182 | 3,358 | 3,548 | 3,263 | ||||||||||
| Non-interest expense | |||||||||||||||
| Salaries and employee benefits | 15,699 | 15,642 | 15,353 | 12,888 | 12,926 | ||||||||||
| Net occupancy expense of premises | 2,761 | 2,736 | 2,716 | 2,359 | 2,122 | ||||||||||
| Equipment and systems | 3,377 | 2,926 | 2,776 | 2,323 | 2,193 | ||||||||||
| Advertising and marketing | 787 | 577 | 757 | 745 | 748 | ||||||||||
| Federal deposit insurance premium | 421 | 465 | 463 | 350 | 343 | ||||||||||
| Directors' compensation | 746 | 758 | 754 | 689 | 688 | ||||||||||
| Merger-related expenses | - | - | 5,149 | 401 | 1,193 | ||||||||||
| Miscellaneous | 3,479 | 3,353 | 3,289 | 2,788 | 2,551 | ||||||||||
| Total non-interest expense | 27,270 | 26,457 | 31,257 | 22,543 | 22,764 | ||||||||||
| Income before income taxes | 14,417 | 14,805 | 11,975 | 7,639 | 6,398 | ||||||||||
| Income taxes | 3,649 | 3,659 | 4,257 | 2,262 | 5,129 | ||||||||||
| Net income | $ | 10,768 | $ | 11,146 | $ | 7,718 | $ | 5,377 | $ | 1,269 | |||||
| Net income per common share (EPS) | |||||||||||||||
| Basic | $ | 0.12 | $ | 0.12 | $ | 0.08 | $ | 0.07 | $ | 0.02 | |||||
| Diluted | $ | 0.12 | $ | 0.12 | $ | 0.08 | $ | 0.07 | $ | 0.02 | |||||
| Dividends declared (1) | |||||||||||||||
| Cash dividends declared per common share | $ | 0.05 | $ | 0.20 | $ | 0.04 | $ | 0.03 | $ | 0.03 | |||||
| Cash dividends declared | $ | 4,082 | $ | 19,404 | $ | 3,892 | $ | 2,262 | $ | 1,856 | |||||
| Dividend payout ratio | 37.9 | % | 174.1 | % | 50.4 | % | 42.1 | % | 146.3 | % | |||||
| Weighted average number of common shares outstanding | |||||||||||||||
| Basic | 92,434 | 95,127 | 98,046 | 75,492 | 77,174 | ||||||||||
| Diluted | 92,480 | 95,181 | 98,100 | 75,539 | 77,239 | ||||||||||
| (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 | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| (Dollars in Thousands, Unaudited) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
| Assets | |||||||||||||||
| Interest-earning assets: | |||||||||||||||
| Loans receivable, including loans held for sale | $ | 4,758,587 | $ | 4,562,375 | $ | 4,507,336 | $ | 3,293,664 | $ | 3,255,862 | |||||
| Taxable investment securities | 1,158,720 | 1,180,655 | 1,192,066 | 1,003,600 | 996,397 | ||||||||||
| Tax-exempt investment securities | 135,453 | 136,056 | 134,683 | 127,605 | 126,214 | ||||||||||
| Other interest-earning assets | 87,916 | 112,629 | 142,591 | 67,770 | 82,539 | ||||||||||
| Total interest-earning assets | 6,140,676 | 5,991,715 | 5,976,676 | 4,492,639 | 4,461,012 | ||||||||||
| Non-interest-earning assets | 587,921 | 596,006 | 586,976 | 369,299 | 364,015 | ||||||||||
| Total assets | $ | 6,728,597 | $ | 6,587,721 | $ | 6,563,652 | $ | 4,861,938 | $ | 4,825,027 | |||||
| Liabilities and Stockholders' Equity | |||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Interest-bearing demand | $ | 792,989 | $ | 788,148 | $ | 1,004,445 | $ | 870,762 | $ | 854,142 | |||||
| Savings and club | 743,676 | 747,743 | 724,430 | 513,948 | 518,513 | ||||||||||
| Certificates of deposit | 2,214,932 | 2,046,997 | 1,983,372 | 1,385,151 | 1,336,466 | ||||||||||
| Total interest-bearing deposits | 3,751,597 | 3,582,888 | 3,712,247 | 2,769,861 | 2,709,121 | ||||||||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 1,293,470 | 1,350,113 | 1,179,147 | 777,721 | 777,460 | ||||||||||
| Other borrowings | 119,281 | 40,981 | 34,636 | 33,529 | 30,606 | ||||||||||
| Total borrowings | 1,412,751 | 1,391,094 | 1,213,783 | 811,250 | 808,066 | ||||||||||
| Total interest-bearing liabilities | 5,164,348 | 4,973,982 | 4,926,030 | 3,581,111 | 3,517,187 | ||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||
| Non-interest-bearing deposits | 315,165 | 314,114 | 305,763 | 267,152 | 277,236 | ||||||||||
| Other non-interest-bearing liabilities | 37,374 | 43,533 | 39,340 | 24,953 | 25,777 | ||||||||||
| Total non-interest-bearing liabilities | 352,539 | 357,647 | 345,103 | 292,105 | 303,013 | ||||||||||
| Total liabilities | 5,516,887 | 5,331,629 | 5,271,133 | 3,873,216 | 3,820,200 | ||||||||||
| Stockholders' equity | 1,211,710 | 1,256,092 | 1,292,519 | 988,722 | 1,004,827 | ||||||||||
| Total liabilities and stockholders' equity | $ | 6,728,597 | $ | 6,587,721 | $ | 6,563,652 | $ | 4,861,938 | $ | 4,825,027 | |||||
| Average interest-earning assets to average interest-bearing liabilities | 118.91 | % | 120.46 | % | 121.33 | % | 125.45 | % | 126.83 | % | |||||
| For the three months ended | |||||||||||||||
| Performance Ratio Highlights | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| 2018 | 2018 | 2018 | 2018 | 2017 | |||||||||||
| Average yield on interest-earning assets: | |||||||||||||||
| Loans receivable, including loans held for sale | 4.12 | % | 4.16 | % | 4.14 | % | 3.73 | % | 3.76 | % | |||||
| Taxable investment securities | 3.12 | % | 3.01 | % | 2.91 | % | 2.57 | % | 2.44 | % | |||||
| Tax-exempt investment securities (1) | 2.11 | % | 2.10 | % | 2.09 | % | 2.04 | % | 2.03 | % | |||||
| Other interest-earning assets | 5.66 | % | 4.17 | % | 3.58 | % | 4.22 | % | 3.41 | % | |||||
| Total interest-earning assets | 3.91 | % | 3.89 | % | 3.83 | % | 3.43 | % | 3.41 | % | |||||
| Average cost of interest-bearing liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Interest-bearing demand | 0.97 | % | 0.86 | % | 0.89 | % | 0.84 | % | 0.80 | % | |||||
| Savings and club | 0.49 | % | 0.41 | % | 0.29 | % | 0.12 | % | 0.12 | % | |||||
| Certificates of deposit | 1.79 | % | 1.58 | % | 1.41 | % | 1.46 | % | 1.43 | % | |||||
| Total interest-bearing deposits | 1.36 | % | 1.18 | % | 1.05 | % | 1.01 | % | 0.98 | % | |||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 2.27 | % | 2.19 | % | 2.34 | % | 2.27 | % | 2.33 | % | |||||
| Other borrowings | 1.99 | % | 0.94 | % | 0.34 | % | 0.56 | % | 0.27 | % | |||||
| Total borrowings | 2.25 | % | 2.15 | % | 2.28 | % | 2.20 | % | 2.25 | % | |||||
| Total interest-bearing liabilities | 1.60 | % | 1.45 | % | 1.35 | % | 1.28 | % | 1.27 | % | |||||
| Interest rate spread (2) | 2.31 | % | 2.44 | % | 2.48 | % | 2.15 | % | 2.14 | % | |||||
| Net interest margin (3) | 2.56 | % | 2.68 | % | 2.72 | % | 2.41 | % | 2.41 | % | |||||
| Non-interest income to average assets (annualized) | 0.20 | % | 0.19 | % | 0.20 | % | 0.29 | % | 0.27 | % | |||||
| Non-interest expense to average assets (annualized) | 1.62 | % | 1.61 | % | 1.90 | % | 1.85 | % | 1.89 | % | |||||
| Efficiency ratio (4) | 63.93 | % | 61.01 | % | 71.12 | % | 73.66 | % | 75.63 | % | |||||
| Return on average assets (annualized) | 0.64 | % | 0.68 | % | 0.47 | % | 0.44 | % | 0.11 | % | |||||
| Return on average equity (annualized) | 3.55 | % | 3.55 | % | 2.39 | % | 2.18 | % | 0.51 | % | |||||
| (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. | |||||||||||||||
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, | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| Except Per Share Data, Unaudited) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
| Adjusted Net Income | |||||||||||||||
| Net income (GAAP) | $ | 10,768 | $ | 11,146 | $ | 7,718 | $ | 5,377 | $ | 1,269 | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | - | - | 5,149 | 401 | 1,193 | ||||||||||
| Income tax benefit from merger-related expenses | - | - | (1,451 | ) | (22 | ) | (165 | ) | |||||||
| Income tax expense for write-down of net deferred tax asset | - | - | - | - | 4,867 | ||||||||||
| Income tax benefit for write-down of net deferred tax liability | - | - | - | - | (1,381 | ) | |||||||||
| Income tax benefit for reduction in the federal income tax rate (from 35% to 28%) | - | - | - | - | (769 | ) | |||||||||
| Adjusted net income (non-GAAP) | $ | 10,768 | $ | 11,146 | $ | 11,416 | $ | 5,756 | $ | 5,014 | |||||
| Adjusted Net Income per Common Share (EPS) | |||||||||||||||
| Net income per common share Basic (GAAP) | $ | 0.12 | $ | 0.12 | $ | 0.08 | $ | 0.07 | $ | 0.02 | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | - | - | 0.05 | 0.01 | 0.02 | ||||||||||
| Income tax benefit from merger-related expenses | - | - | (0.01 | ) | - | (0.01 | ) | ||||||||
| Income tax expense for write-down of net deferred tax asset | - | - | - | - | 0.06 | ||||||||||
| Income tax benefit for write-down of net deferred tax liability | - | - | - | - | (0.02 | ) | |||||||||
| Income tax benefit for reduction in the federal income tax rate (from 35% to 28%) | - | - | - | - | (0.01 | ) | |||||||||
| Adjusted net income per common share Basic (non-GAAP) | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.08 | $ | 0.06 | |||||
| Adjusted Net Income per Common Share (EPS) | |||||||||||||||
| Net income per common share Diluted (GAAP) | $ | 0.12 | $ | 0.12 | $ | 0.08 | $ | 0.07 | $ | 0.02 | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | - | - | 0.05 | 0.01 | 0.02 | ||||||||||
| Income tax benefit from merger-related expenses | - | - | (0.01 | ) | - | (0.01 | ) | ||||||||
| Income tax expense for write-down of net deferred tax asset | - | - | - | - | 0.06 | ||||||||||
| Income tax benefit for write-down of net deferred tax liability | - | - | - | - | (0.02 | ) | |||||||||
| Income tax benefit for reduction in the federal income tax rate (from 35% to 28%) | - | - | - | - | (0.01 | ) | |||||||||
| Adjusted net income per common share Diluted (non-GAAP) | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.08 | $ | 0.06 | |||||
| For the three months ended | |||||||||||||||
| Reconciliation of GAAP to Non-GAAP | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| (Unaudited) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
| Adjusted Non-Interest Expense | |||||||||||||||
| Non-interest expense (GAAP) | $ | 27,270 | $ | 26,457 | $ | 31,257 | $ | 22,543 | $ | 22,764 | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | - | - | (5,149 | ) | (401 | ) | (1,193 | ) | |||||||
| Adjusted non-interest expense (non-GAAP) | $ | 27,270 | $ | 26,457 | $ | 26,108 | $ | 22,142 | $ | 21,571 | |||||
| Adjusted Non-Interest Expense Ratio | |||||||||||||||
| Non-interest expense to average assets (GAAP) | 1.62 | % | 1.61 | % | 1.90 | % | 1.85 | % | 1.89 | % | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | 0.00 | % | 0.00 | % | -0.31 | % | -0.03 | % | -0.10 | % | |||||
| Adjusted non-interest expense ratio (non-GAAP) | 1.62 | % | 1.61 | % | 1.59 | % | 1.82 | % | 1.79 | % | |||||
| Adjusted Efficiency Ratio | |||||||||||||||
| Non-interest expense / (Net interest income + non-interest income) (GAAP) | 63.9 | % | 61.0 | % | 71.1 | % | 73.7 | % | 75.6 | % | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | 0.0 | % | 0.0 | % | -11.7 | % | -1.3 | % | -3.9 | % | |||||
| Adjusted efficiency ratio (non-GAAP) | 63.9 | % | 61.0 | % | 59.4 | % | 72.4 | % | 71.7 | % | |||||
| Adjusted Return on Average Assets | |||||||||||||||
| Return on average assets (GAAP) | 0.64 | % | 0.68 | % | 0.47 | % | 0.44 | % | 0.11 | % | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | 0.00 | % | 0.00 | % | 0.31 | % | 0.03 | % | 0.09 | % | |||||
| Income tax benefit from merger-related expenses | 0.00 | % | 0.00 | % | -0.09 | % | 0.00 | % | -0.01 | % | |||||
| Income tax expense for write-down of net deferred tax asset | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.40 | % | |||||
| Income tax benefit for write-down of net deferred tax liability | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | -0.11 | % | |||||
| Income tax benefit for reduction in the federal income tax rate (from 35% to 28%) | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | -0.06 | % | |||||
| Adjusted return on average assets (non-GAAP) | 0.64 | % | 0.68 | % | 0.69 | % | 0.47 | % | 0.42 | % | |||||
| Adjusted Return on Average Equity | |||||||||||||||
| Return on average equity (GAAP) | 3.55 | % | 3.55 | % | 2.39 | % | 2.18 | % | 0.51 | % | |||||
| Effect to adjust for: | |||||||||||||||
| Merger-related expenses | 0.00 | % | 0.00 | % | 1.59 | % | 0.16 | % | 0.48 | % | |||||
| Income tax benefit from merger-related expenses | 0.00 | % | 0.00 | % | -0.45 | % | -0.01 | % | -0.07 | % | |||||
| Income tax expense for write-down of net deferred tax asset | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 1.94 | % | |||||
| Income tax benefit for write-down of net deferred tax liability | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | -0.55 | % | |||||
| Income tax benefit for reduction in the federal income tax rate (from 35% to 28%) | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | -0.31 | % | |||||
| Adjusted return on average equity (non-GAAP) | 3.55 | % | 3.55 | % | 3.53 | % | 2.33 | % | 2.00 | % | |||||
For further information contact:
Craig L. Montanaro, President and Chief Executive Officer, or
Keith Suchodolski, Executive Vice President and Chief Financial Officer
Kearny Financial Corp.
(973) 244-4500