Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Kearny Financial Corp. | d482752d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
October 30, 2017
For further information contact:
Craig L. Montanaro, President and Chief Executive Officer, or
Eric B. Heyer, Executive Vice President and Chief Financial Officer
Kearny Financial Corp.
(973) 244-4500
KEARNY FINANCIAL CORP.
REPORTS FIRST QUARTER 2018 OPERATING RESULTS
Fairfield, New Jersey, October 30, 2017 – Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), today reported net income for the quarter ended September 30, 2017 of $5.2 million, or $0.07 per basic and diluted share. The results represent an increase in net income of $828,000 compared to net income of $4.4 million, or $0.05 per basic and diluted share, for the quarter ended June 30, 2017.
Overview
The Company continued to execute strategies during the first quarter of fiscal 2018 intended to grow and diversify its balance sheet while increasing earnings and prudently managing capital to promote long-term growth in shareholder value. These strategies resulted in several incremental balance sheet growth and diversification achievements that are included among the following noteworthy highlights for the quarter:
| • | The Company’s aggregate loan portfolio, excluding loans held for sale and the allowance for loan losses, increased by $15.1 million to $3.26 billion, or 67.8% of total assets, at September 30, 2017 from $3.25 billion, or 67.4% of total assets, at June 30, 2017. The growth in the loan portfolio largely reflected the Company’s continued strategic focus on commercial mortgage loans, which increased by $16.2 million to $2.51 billion at September 30, 2017 from $2.50 billion at June 30, 2017. |
For those same comparative periods, the balance of commercial business loans increased by $7.2 million to $81.7 million from $74.5 million while the outstanding balance of the funded portion of construction loans increased by $4.5 million to $8.3 million from $3.8 million. In both cases, the noted growth reflects the Company’s strategic efforts to further grow and diversify its loan portfolio into these additional categories of loans.
| • | Nonperforming loans decreased by $761,000 to $18.1 million, or 0.56% of total loans, at September 30, 2017 from $18.9 million, or 0.58% of total loans, at June 30, 2017. |
| • | The allowance for loan losses increased to $29.4 million at September 30, 2017 from $29.3 million at June 30, 2017, resulting in a “total loan coverage ratio”, representing the balance of the allowance for loan losses as a percentage of total loans, of 0.90% at the close of each period. |
| • | The “nonperforming loan coverage ratio”, representing the balance of the allowance for loan losses as a percentage of nonperforming loans, increased to 162.6% at September 30, 2017 from 155.2% at June 30, 2017. |
| • | The Company’s securities portfolio increased by $12.4 million to $1.11 billion, or 23.3% of total assets, at September 30, 2017 from $1.11 billion, or 23.0% of total assets, at June 30, 2017. The net increase in the securities portfolio partly reflected the purchase of uncapped, floating-rate securities and tax-advantaged municipal securities while also reflecting a net increase in the fair value of the available for sale portfolio during the period. The noted increases were partially offset by normal principal repayments arising from amortization, calls and maturities of securities. |
| • | The balance of cash and cash equivalents decreased by $39.4 million to $38.8 million at September 30, 2017 from $78.2 million at June 30, 2017. The decrease in cash and equivalents largely reflected the continuing effort to reallocate interest-earning cash and equivalents into comparatively higher-yielding assets during the period. Such reallocation contributed to a $38.4 million decrease in the average balance of other interest-earning assets to $79.9 million for the quarter ended September 30, 2017 from $118.3 million for the quarter ended June 30, 2017. Other interest-earning assets generally include the balance of interest-earning cash deposits held in other banks coupled with the balance of the Bank’s mandatory investment in the capital stock of the Federal Home Loan Bank of New York. |
| • | The Company’s total deposits increased by $23.1 million to $2.95 billion at September 30, 2017, from $2.93 billion at June 30, 2017. The growth in deposits during the first quarter included an $11.9 million increase in non-interest-bearing deposits coupled with an $11.3 million increase in interest-bearing deposits. The growth in deposits largely reflected the continuing effects of product, pricing and marketing strategies enacted during fiscal 2017. |
| • | Total borrowings increased by $2.3 million to $808.6 million at September 30, 2017, from $806.2 million at June 30, 2017. The increase in borrowings largely reflected a $2.3 million increase in depositor sweep account balances representing normal day-to-day fluctuations in such balances. |
| • | The Company’s stockholders’ equity decreased by $42.9 million to $1.01 billion at September 30, 2017 from $1.06 billion at June 30, 2017. The decrease largely reflected the return of capital to stockholders through share repurchases and cash dividends during the period. The decrease in stockholders’ equity was partially offset by net income earned during the period coupled with a net increase in accumulated other comprehensive income reflecting increases in the fair value of the Company’s derivatives and available for sale securities portfolios. |
At September 30, 2017, the Company’s total consolidated equity to assets ratio was 21.09% while the Bank’s total consolidated equity to assets ratio was 17.66%. The Company’s and Bank’s capital ratios at September 30, 2017 were well in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.
As highlighted below, the noted balance sheet growth, reinvestment and reallocation achievements helped to offset the adverse effects on net interest income that resulted from the downward pressure on net interest margin arising from low market interest rates and a flattening yield curve:
| • | The Company’s net interest income increased $80,000 to $26.8 million for the quarter ended September 30, 2017 from $26.7 million for the quarter ended June 30, 2017. |
| • | The Company’s net interest margin and net interest rate spread remained stable at 2.40% and 2.13%, respectively, for the quarters ended September 30, 2017 and June 30, 2017. |
The level of the Company’s charge offs and provision for loan losses continued to reflect strong asset quality metrics:
| • | The Company recognized net charge offs totaling $471,000, reflecting an annualized charge off rate of 0.06% on the average balance of total loans for the quarter ended September 30, 2017. By comparison, for the quarter ended June 30, 2017, the Company recognized recoveries of charge offs from prior periods that exceeded the level of charge offs recognized during that period. The net recoveries of $483,000 recognized during the quarter ended June 30, 2017 reflected an annualized charge off (recovery) rate of (0.06)% on the average balance of total loans for the quarter ended June 30, 2017. |
| • | The Company’s provision for loan losses decreased by $558,000 to $630,000 for the quarter ended September 30, 2017 compared to $1.2 million for the quarter ended June 30, 2017. The decrease in the provision was largely attributable to the comparatively lower level of growth during the quarter ended September 30, 2017 in the performing portion of the loan portfolio that is collectively evaluated for impairment using historical and environmental loss factors. The effects of the lower level of growth in the portfolio was partially offset by the increase in net charge offs between the two comparative periods, as discussed above. The decrease in the provision also reflected less noteworthy updates to historical and environmental loss factors during the period. |
The strategies executed by the Company during the quarter ended September 30, 2017 also served to strengthen and diversify its sources of non-interest income, as highlighted below:
| • | Gains on sale of residential mortgage loans totaled $213,000 for the quarter ended September 30, 2017 compared to $139,000 for the quarter ended June 30, 2017. The increase in sale gains reflected an increase in the volume of loans originated and sold partially offset by a modest decrease in the average net gain recognized per loan sold between comparative periods. In addition to bolstering non-interest income, the Company’s mortgage banking activities are expected to continue serving as a strategy to manage exposure to interest rate risk. |
| • | Gains on sale of SBA loans originated totaled $118,000 for the quarter ended September 30, 2017 compared to $392,000 for the quarter ended June 30, 2017. The decrease in sale gains reflected a decrease in the balance of SBA loans originated and sold partially offset by a modest increase in the average net gain recognized per loan sold between comparative periods. |
In addition to the items noted above, fees and service charges increased by $422,000 to $1.3 million for the quarter ended September 30, 2017 from $839,000 for the quarter ended June 30, 2017. The increase was largely attributable to an increase in commercial mortgage loan prepayment charges recognized between comparative periods.
The Company continues to evaluate and implement tactics and strategies designed to improve operating practices, policies and procedures while making more efficient and effective use of its supporting infrastructure, including human resources, facilities and information technology systems.
| • | The Company’s ratio of non-interest expense to average assets totaled 1.77% for the quarter ended September 30, 2017 compared to 1.83% for the prior quarter ended June 30, 2017. For those same comparative periods, the Company’s operating efficiency ratio decreased to 71.2% from 74.1%, respectively. |
Collectively, the factors noted above contributed to the increase in net income for the quarter ended September 30, 2017 compared to the prior quarter ended June 30, 2017. These increases in operating earnings had a favorable impact on the Company’s earnings-based performance ratios as highlighted below:
| • | The Company’s return on average assets for the quarter ended September 30, 2017 totaled 0.43% compared to 0.37% for the prior quarter ended June 30, 2017. |
| • | The Company’s return on average equity for the quarter ended September 30, 2017 totaled 2.01% compared to 1.64% for the prior quarter ended June 30, 2017. |
The Company continued to execute key capital management strategies during the first quarter of fiscal 2018 to further support shareholder value:
| • | The Company maintained its regular quarterly cash dividend payable to stockholders of $0.03 per share declared and paid during the quarters ended September 30, 2017 and June 30, 2017. Additionally, the Company declared a special cash dividend of $0.12 during the quarter ended September 30, 2017. When combined with the regular cash dividends of $0.10 declared and paid during the prior fiscal year, the special dividend of $0.12 effectively increased the Company’s dividend payout ratio to approximately 100% based on its basic and diluted earnings per share of $0.22 reported for the fiscal year ended June 30, 2017. The Company continuously evaluates its dividend policies and practices in relation to its capital management and shareholder value objectives. |
| • | In May 2017, the Company announced its second share repurchase program through which it authorized the repurchase of 8,559,084 shares, or 10%, of the Company’s outstanding shares. During the quarter ended September 30, 2017, the Company repurchased a total of 2,803,000 of its shares at an average cost of $14.44 per share. Through September 30, 2017, the Company repurchased a total of 4,043,000 shares, or 47.2% of the number of shares authorized under the current program, at a total cost of $58.2 million and at an average cost of $14.40 per share. |
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 September 30, 2017 compared to those for the prior quarter ended June 30, 2017. 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.
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 Kearny Financial Corp. 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 (Dollars and Shares in Thousands, Except Per Share Data, Unaudited) |
At | Variance or Change |
Variance or Change Pct. |
|||||||||||||
| September 30, 2017 |
June 30, 2017 |
|||||||||||||||
| Assets |
||||||||||||||||
| Cash and cash equivalents |
$ | 38,823 | $ | 78,237 | $ | (39,414 | ) | (50.4 | ) | |||||||
| Securities available for sale |
636,600 | 613,760 | 22,840 | 3.7 | ||||||||||||
| Securities held to maturity |
482,926 | 493,321 | (10,395 | ) | (2.1 | ) | ||||||||||
| Loans held-for-sale |
3,808 | 4,692 | (884 | ) | (18.8 | ) | ||||||||||
| Loans receivable, including yield adjustments |
3,260,328 | 3,245,261 | 15,067 | 0.5 | ||||||||||||
| Less allowance for loan losses |
(29,445 | ) | (29,286 | ) | (159 | ) | 0.5 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loans receivable |
3,230,883 | 3,215,975 | 14,908 | 0.5 | ||||||||||||
| Premises and equipment |
40,132 | 39,585 | 547 | 1.4 | ||||||||||||
| Federal Home Loan Bank stock |
39,115 | 39,958 | (843 | ) | (2.1 | ) | ||||||||||
| Accrued interest receivable |
13,268 | 12,493 | 775 | 6.2 | ||||||||||||
| Goodwill |
108,591 | 108,591 | — | — | ||||||||||||
| Bank owned life insurance |
182,489 | 181,223 | 1,266 | 0.7 | ||||||||||||
| Deferred income taxes, net |
13,230 | 15,454 | (2,224 | ) | (14.4 | ) | ||||||||||
| Other assets |
18,285 | 14,838 | 3,447 | 23.2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | 4,808,150 | $ | 4,818,127 | $ | (9,977 | ) | (0.2 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Liabilities |
||||||||||||||||
| Deposits |
$ | 2,953,268 | $ | 2,930,127 | $ | 23,141 | 0.8 | |||||||||
| Borrowings |
808,554 | 806,228 | 2,326 | 0.3 | ||||||||||||
| Advance payments by borrowers for taxes |
9,787 | 8,711 | 1,076 | 12.4 | ||||||||||||
| Other liabilities |
22,308 | 15,880 | 6,428 | 40.5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities |
3,793,917 | 3,760,946 | 32,971 | 0.9 | ||||||||||||
| Stockholders’ Equity |
||||||||||||||||
| Common stock |
815 | 844 | (29 | ) | (3.4 | ) | ||||||||||
| Paid-in capital |
690,204 | 728,790 | (38,586 | ) | (5.3 | ) | ||||||||||
| Retained earnings |
354,123 | 361,039 | (6,916 | ) | (1.9 | ) | ||||||||||
| Unearned ESOP shares |
(34,049 | ) | (34,536 | ) | 487 | (1.4 | ) | |||||||||
| Accumulated other comprehensive income, net |
3,140 | 1,044 | 2,096 | 200.8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total stockholders’ equity |
1,014,233 | 1,057,181 | (42,948 | ) | (4.1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities and stockholders' equity |
$ | 4,808,150 | $ | 4,818,127 | $ | (9,977 | ) | (0.2 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Consolidated capital ratios |
||||||||||||||||
| Equity to assets |
21.09 | % | 21.94 | % | -0.85 | % | ||||||||||
| Tangible equity to tangible assets |
19.27 | % | 20.14 | % | -0.87 | % | ||||||||||
| Share data |
||||||||||||||||
| Outstanding shares (period end) |
81,548 | 84,351 | (2,803 | ) | (3.3 | ) | ||||||||||
| Equity per share |
$ | 12.44 | $ | 12.53 | $ | (0.09 | ) | (0.7 | ) | |||||||
| Tangible equity per share (1) |
$ | 11.10 | $ | 11.24 | $ | (0.14 | ) | (1.2 | ) | |||||||
| (1) | Tangible equity equals total stockholders’ equity reduced by goodwill and core deposit intangible assets. |
| Summary Income Statement (Dollars and Shares in Thousands, Except Per Share Data, Unaudited) |
For the three months ended | Variance or Change |
Variance or Change Pct. |
|||||||||||||
| September 30, 2017 |
June 30, 2017 |
|||||||||||||||
| Interest income |
||||||||||||||||
| Loans |
$ | 30,473 | $ | 29,842 | $ | 631 | 2.1 | |||||||||
| Mortgage-backed securities |
2,896 | 3,063 | (167 | ) | (5.5 | ) | ||||||||||
| Debt securities: |
||||||||||||||||
| Taxable |
2,960 | 2,868 | 92 | 3.2 | ||||||||||||
| Tax-exempt |
621 | 605 | 16 | 2.6 | ||||||||||||
| Other interest-earning assets |
642 | 586 | 56 | 9.6 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Interest Income |
37,592 | 36,964 | 628 | 1.7 | ||||||||||||
| Interest expense |
||||||||||||||||
| Deposits |
6,219 | 5,909 | 310 | 5.2 | ||||||||||||
| Borrowings |
4,563 | 4,325 | 238 | 5.5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest expense |
10,782 | 10,234 | 548 | 5.4 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income |
26,810 | 26,730 | 80 | 0.3 | ||||||||||||
| Provision for loan losses |
630 | 1,188 | (558 | ) | (47.0 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income after provision for loan losses |
26,180 | 25,542 | 638 | 2.5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-interest income |
||||||||||||||||
| Fees and service charges |
1,261 | 839 | 422 | 50.3 | ||||||||||||
| Gain on sale of loans |
331 | 531 | (200 | ) | (37.7 | ) | ||||||||||
| (Loss) gain on sale of real estate owned |
(109 | ) | 3 | (112 | ) | (3,733.3 | ) | |||||||||
| Income from bank owned life insurance |
1,267 | 1,288 | (21 | ) | (1.6 | ) | ||||||||||
| Electronic banking fees and charges |
278 | 287 | (9 | ) | (3.1 | ) | ||||||||||
| Miscellaneous |
66 | 72 | (6 | ) | (8.3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total non-interest income |
3,094 | 3,020 | 74 | 2.5 | ||||||||||||
| Non-interest expense |
||||||||||||||||
| Salaries and employee benefits |
12,867 | 12,887 | (20 | ) | (0.2 | ) | ||||||||||
| Net occupancy expense of premises |
1,981 | 2,013 | (32 | ) | (1.6 | ) | ||||||||||
| Equipment and systems |
2,190 | 2,204 | (14 | ) | (0.6 | ) | ||||||||||
| Advertising and marketing |
710 | 937 | (227 | ) | (24.2 | ) | ||||||||||
| Federal deposit insurance premium |
360 | 352 | 8 | 2.3 | ||||||||||||
| Directors’ compensation |
689 | 689 | — | — | ||||||||||||
| Miscellaneous |
2,489 | 2,969 | (480 | ) | (16.2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total non-interest expense |
21,286 | 22,051 | (765 | ) | (3.5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes |
7,988 | 6,511 | 1,477 | 22.7 | ||||||||||||
| Income taxes |
2,756 | 2,107 | 649 | 30.8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 5,232 | $ | 4,404 | $ | 828 | 18.8 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income per common share (EPS) |
||||||||||||||||
| Basic |
$ | 0.07 | $ | 0.05 | $ | 0.02 | ||||||||||
| Diluted |
$ | 0.07 | $ | 0.05 | $ | 0.02 | ||||||||||
| Dividends declared (1) |
||||||||||||||||
| Cash dividends declared per common share |
$ | 0.15 | $ | 0.03 | $ | 0.12 | ||||||||||
| Cash dividends declared |
$ | 12,148 | $ | 2,448 | $ | 9,700 | ||||||||||
| Dividend payout ratio |
232.2 | % | 55.6 | % | 176.60 | % | ||||||||||
| Weighted average number of common shares outstanding |
||||||||||||||||
| Basic |
79,649 | 82,372 | (2,723 | ) | ||||||||||||
| Diluted |
79,708 | 82,429 | (2,721 | ) | ||||||||||||
| (1) | Dividends declared during the quarter ended September 30, 2017 include a $0.12 special dividend representing a supplemental distribution of net income to stockholders from the prior fiscal year ended June 30, 2017. |
| For the three months ended | Variance or Change |
Variance or Change Pct. |
||||||||||||||
| Average Balance Sheet Data (Dollars in Thousands, Unaudited) |
September 30, 2017 |
June 30, 2017 |
||||||||||||||
| Assets |
||||||||||||||||
| Interest-earning assets: |
||||||||||||||||
| Loans receivable, including loans held for sale |
$ | 3,257,465 | $ | 3,200,968 | $ | 56,497 | 1.8 | |||||||||
| Mortgage-backed securities |
511,931 | 532,621 | (20,690 | ) | (3.9 | ) | ||||||||||
| Debt securities: |
||||||||||||||||
| Tax-exempt |
122,685 | 119,957 | 2,728 | 2.3 | ||||||||||||
| Taxable |
489,252 | 476,499 | 12,753 | 2.7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total debt securities |
611,937 | 596,456 | 15,481 | 2.6 | ||||||||||||
| Other interest-earning assets |
79,920 | 118,349 | (38,429 | ) | (32.5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest-earning assets |
4,461,253 | 4,448,394 | 12,859 | 0.3 | ||||||||||||
| Non-interest-earning assets |
361,259 | 358,791 | 2,468 | 0.7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | 4,822,512 | $ | 4,807,185 | $ | 15,327 | 0.3 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Liabilities and Stockholders’ Equity |
||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||
| Deposits: |
||||||||||||||||
| Interest-bearing demand |
$ | 858,291 | $ | 813,148 | $ | 45,143 | 5.6 | |||||||||
| Savings and club |
522,715 | 523,798 | (1,083 | ) | (0.2 | ) | ||||||||||
| Certificates of deposit |
1,285,882 | 1,289,504 | (3,622 | ) | (0.3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest-bearing deposits |
2,666,888 | 2,626,450 | 40,438 | 1.5 | ||||||||||||
| Borrowings: |
||||||||||||||||
| Federal Home Loan Bank Advances |
778,104 | 775,703 | 2,401 | 0.3 | ||||||||||||
| Other borrowings |
32,041 | 40,064 | (8,023 | ) | (20.0 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total borrowings |
810,145 | 815,767 | (5,622 | ) | (0.7 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest-bearing liabilities |
3,477,033 | 3,442,217 | 34,816 | 1.0 | ||||||||||||
| Non-interest-bearing liabilities: |
||||||||||||||||
| Non-interest-bearing deposits |
274,858 | 262,499 | 12,359 | 4.7 | ||||||||||||
| Other non-interest-bearing liabilities |
29,754 | 25,112 | 4,642 | 18.5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total non-interest-bearing liabilities |
304,612 | 287,611 | 17,001 | 5.9 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities |
3,781,645 | 3,729,828 | 51,817 | 1.4 | ||||||||||||
| Stockholders’ equity |
1,040,867 | 1,077,357 | (36,490 | ) | (3.4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities and stockholders’ equity |
$ | 4,822,512 | $ | 4,807,185 | $ | 15,327 | 0.3 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average interest-earning assets to average interest-bearing liabilities |
128.31 | % | 129.23 | % | -0.92 | % | -0.7 | |||||||||
| For the three months ended | Variance or Change |
Variance or Change Pct. |
||||||||||||||
| Performance Ratio Highlights |
September 30, 2017 |
June 30, 2017 |
||||||||||||||
| Average yield on interest-earning assets: |
||||||||||||||||
| Loans receivable, including loans held for sale |
3.74 | % | 3.73 | % | 0.01 | % | ||||||||||
| Mortgage-backed securities |
2.26 | % | 2.30 | % | -0.04 | % | ||||||||||
| Debt securities: |
||||||||||||||||
| Tax-exempt |
2.03 | % | 2.02 | % | 0.01 | % | ||||||||||
| Taxable |
2.42 | % | 2.41 | % | 0.01 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total debt securities |
2.34 | % | 2.33 | % | 0.01 | % | ||||||||||
| Other interest-earning assets |
3.21 | % | 1.98 | % | 1.23 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest-earning assets |
3.37 | % | 3.32 | % | 0.05 | % | ||||||||||
| Average cost of interest-bearing liabilities: |
||||||||||||||||
| Deposits: |
||||||||||||||||
| Interest-bearing demand |
0.76 | % | 0.71 | % | 0.05 | % | ||||||||||
| Savings and club |
0.12 | % | 0.12 | % | 0.00 | % | ||||||||||
| Certificates of deposit |
1.38 | % | 1.34 | % | 0.04 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest-bearing deposits |
0.93 | % | 0.90 | % | 0.03 | % | ||||||||||
| Borrowings: |
||||||||||||||||
| Federal Home Loan Bank Advances |
2.33 | % | 2.21 | % | 0.12 | % | ||||||||||
| Other borrowings |
0.27 | % | 0.27 | % | 0.00 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total borrowings |
2.25 | % | 2.12 | % | 0.13 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest-bearing liabilities |
1.24 | % | 1.19 | % | 0.05 | % | ||||||||||
| Interest rate spread (1) |
2.13 | % | 2.13 | % | 0.00 | % | ||||||||||
| Net interest margin (2) |
2.40 | % | 2.40 | % | 0.00 | % | ||||||||||
| Non-interest income to average assets (annualized) |
0.26 | % | 0.25 | % | 0.01 | % | ||||||||||
| Non-interest expense to average assets (annualized) |
1.77 | % | 1.83 | % | -0.06 | % | ||||||||||
| Efficiency ratio (3) |
71.18 | % | 74.12 | % | -2.94 | % | ||||||||||
| Return on average assets (annualized) |
0.43 | % | 0.37 | % | 0.06 | % | ||||||||||
| Return on average equity (annualized) |
2.01 | % | 1.64 | % | 0.37 | % | ||||||||||
| (1) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
| (2) | Net interest income divided by average interest-earning assets. |
| (3) | Non-interest expense divided by the sum of net interest income and non-interest income. |
Five-Quarter Financial Trend Analysis
| Summary Balance Sheet (Dollars and Shares in Thousands, Except Per Share Data, Unaudited) |
At | |||||||||||||||||||
| September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
||||||||||||||||
| Assets |
||||||||||||||||||||
| Cash and cash equivalents |
$ | 38,823 | $ | 78,237 | $ | 170,591 | $ | 37,032 | $ | 72,593 | ||||||||||
| Securities available for sale |
636,600 | 613,760 | 614,948 | 671,281 | 689,151 | |||||||||||||||
| Securities held to maturity |
482,926 | 493,321 | 501,987 | 517,819 | 538,319 | |||||||||||||||
| Loans held-for-sale |
3,808 | 4,692 | 744 | 6,686 | 4,489 | |||||||||||||||
| Loans receivable, including yield adjustments |
3,260,328 | 3,245,261 | 3,122,628 | 2,973,931 | 2,845,605 | |||||||||||||||
| Less allowance for loan losses |
(29,445 | ) | (29,286 | ) | (27,614 | ) | (26,060 | ) | (25,003 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net loans receivable |
3,230,883 | 3,215,975 | 3,095,014 | 2,947,871 | 2,820,602 | |||||||||||||||
| Premises and equipment |
40,132 | 39,585 | 38,904 | 38,341 | 38,125 | |||||||||||||||
| Federal Home Loan Bank stock |
39,115 | 39,958 | 39,474 | 34,525 | 31,601 | |||||||||||||||
| Accrued interest receivable |
13,268 | 12,493 | 12,320 | 11,809 | 11,666 | |||||||||||||||
| Goodwill |
108,591 | 108,591 | 108,591 | 108,591 | 108,591 | |||||||||||||||
| Bank owned life insurance |
182,489 | 181,223 | 179,935 | 178,656 | 177,334 | |||||||||||||||
| Deferred income taxes, net |
13,230 | 15,454 | 14,318 | 16,098 | 22,914 | |||||||||||||||
| Other assets |
18,285 | 14,838 | 19,416 | 16,599 | 7,896 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 4,808,150 | $ | 4,818,127 | $ | 4,796,242 | $ | 4,585,308 | $ | 4,523,281 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Liabilities |
||||||||||||||||||||
| Deposits |
$ | 2,953,268 | $ | 2,930,127 | $ | 2,853,263 | $ | 2,746,017 | $ | 2,733,960 | ||||||||||
| Borrowings |
808,554 | 806,228 | 825,260 | 701,849 | 633,389 | |||||||||||||||
| Advance payments by borrowers for taxes |
9,787 | 8,711 | 8,059 | 7,618 | 7,597 | |||||||||||||||
| Other liabilities |
22,308 | 15,880 | 15,650 | 15,172 | 28,801 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
3,793,917 | 3,760,946 | 3,702,232 | 3,470,656 | 3,403,747 | |||||||||||||||
| Stockholders’ Equity |
||||||||||||||||||||
| Common stock |
815 | 844 | 873 | 892 | 891 | |||||||||||||||
| Paid-in capital |
690,204 | 728,790 | 768,373 | 795,773 | 813,648 | |||||||||||||||
| Retained earnings |
354,123 | 361,039 | 359,083 | 357,540 | 353,763 | |||||||||||||||
| Unearned ESOP shares |
(34,049 | ) | (34,536 | ) | (35,022 | ) | (35,508 | ) | (35,995 | ) | ||||||||||
| Accumulated other comprehensive income (loss), net |
3,140 | 1,044 | 703 | (4,045 | ) | (12,773 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total stockholders’ equity |
1,014,233 | 1,057,181 | 1,094,010 | 1,114,652 | 1,119,534 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and stockholders’ equity |
$ | 4,808,150 | $ | 4,818,127 | $ | 4,796,242 | $ | 4,585,308 | $ | 4,523,281 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Consolidated capital ratios |
||||||||||||||||||||
| Equity to assets |
21.09 | % | 21.94 | % | 22.81 | % | 24.31 | % | 24.75 | % | ||||||||||
| Tangible equity to tangible assets |
19.27 | % | 20.14 | % | 21.02 | % | 22.47 | % | 22.89 | % | ||||||||||
| Share data |
||||||||||||||||||||
| Outstanding shares (period end) |
81,548 | 84,351 | 87,256 | 89,176 | 89,076 | |||||||||||||||
| Equity per share |
$ | 12.44 | $ | 12.53 | $ | 12.54 | $ | 12.50 | $ | 12.57 | ||||||||||
| Tangible equity per share (1) |
$ | 11.10 | $ | 11.24 | $ | 11.29 | $ | 11.28 | $ | 11.34 | ||||||||||
| (1) | Tangible equity equals total stockholders’ equity reduced by goodwill and core deposit intangible assets. |
| At | ||||||||||||||||||||
| Supplemental Balance Sheet Highlights (Dollars in Thousands, Unaudited) |
September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
|||||||||||||||
| Cash and cash equivalents |
||||||||||||||||||||
| Cash and due from depository institutions |
$ | 17,972 | $ | 18,889 | $ | 17,429 | $ | 17,541 | $ | 18,829 | ||||||||||
| Interest-bearing deposits in other banks |
20,851 | 59,348 | 153,162 | 19,491 | 53,764 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total cash and cash equivalents |
$ | 38,823 | $ | 78,237 | $ | 170,591 | $ | 37,032 | $ | 72,593 | ||||||||||
| Securities available for sale |
||||||||||||||||||||
| Debt securities: |
||||||||||||||||||||
| U.S. agency securities |
$ | 5,063 | $ | 5,316 | $ | 5,622 | $ | 5,809 | $ | 6,172 | ||||||||||
| Municipal and state obligations |
27,725 | 27,740 | 27,259 | 27,090 | 28,259 | |||||||||||||||
| Asset-backed securities |
163,615 | 162,429 | 150,805 | 121,445 | 84,065 | |||||||||||||||
| Collateralized loan obligations |
128,383 | 98,154 | 104,811 | 98,447 | 128,047 | |||||||||||||||
| Corporate bonds |
142,489 | 142,318 | 141,134 | 138,564 | 137,976 | |||||||||||||||
| Trust preferred securities |
8,544 | 8,540 | 8,248 | 8,101 | 7,968 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Debt securities available for sale |
475,819 | 444,497 | 437,879 | 399,456 | 392,487 | |||||||||||||||
| Mortgage-backed securities: |
||||||||||||||||||||
| Collateralized mortgage obligations |
28,790 | 30,536 | 31,941 | 52,333 | 57,170 | |||||||||||||||
| Residential pass-through securities |
123,868 | 130,550 | 136,926 | 211,258 | 231,052 | |||||||||||||||
| Commercial pass-through securities |
8,123 | 8,177 | 8,202 | 8,234 | 8,442 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Mortgage-backed securities |
160,781 | 169,263 | 177,069 | 271,825 | 296,664 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total securities available for sale |
$ | 636,600 | $ | 613,760 | $ | 614,948 | $ | 671,281 | $ | 689,151 | ||||||||||
| Securities held to maturity |
||||||||||||||||||||
| Debt securities: |
||||||||||||||||||||
| U.S. agency securities |
$ | 35,000 | $ | 35,000 | $ | 35,000 | $ | 34,999 | $ | 59,995 | ||||||||||
| Municipal and state obligations |
95,954 | 94,713 | 91,038 | 87,682 | 82,087 | |||||||||||||||
| Subordinated debt |
15,000 | 15,000 | 15,000 | 15,000 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Debt securities held to maturity |
145,954 | 144,713 | 141,038 | 137,681 | 142,082 | |||||||||||||||
| Mortgage-backed securities: |
||||||||||||||||||||
| Collateralized mortgage obligations |
16,600 | 17,854 | 19,193 | 20,543 | 21,699 | |||||||||||||||
| Residential pass-through securities |
169,257 | 178,813 | 186,248 | 200,402 | 211,930 | |||||||||||||||
| Commercial pass-through securities |
151,115 | 151,941 | 155,508 | 159,193 | 162,608 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Mortgage-backed securities |
336,972 | 348,608 | 360,949 | 380,138 | 396,237 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total securities held to maturity |
$ | 482,926 | $ | 493,321 | $ | 501,987 | $ | 517,819 | $ | 538,319 | ||||||||||
| Total securities |
$ | 1,119,526 | $ | 1,107,081 | $ | 1,116,935 | $ | 1,189,100 | $ | 1,227,470 | ||||||||||
| At | ||||||||||||||||||||
| Supplemental Balance Sheet Highlights (Dollars in Thousands, Unaudited) |
September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
|||||||||||||||
| Loan portfolio composition: |
||||||||||||||||||||
| Residential first mortgage loans |
$ | 559,593 | $ | 567,323 | $ | 566,665 | $ | 562,466 | $ | 584,156 | ||||||||||
| Home equity loans and lines of credit |
80,746 | 82,822 | 82,412 | 83,305 | 85,799 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Residential mortgage loans |
640,339 | 650,145 | 649,077 | 645,771 | 669,955 | |||||||||||||||
| Multifamily mortgage loans |
1,427,840 | 1,412,575 | 1,371,339 | 1,295,207 | 1,142,908 | |||||||||||||||
| Nonresidential and mixed use mortgage loans |
1,085,983 | 1,085,064 | 995,782 | 932,616 | 916,769 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Commercial mortgage loans |
2,513,823 | 2,497,639 | 2,367,121 | 2,227,823 | 2,059,677 | |||||||||||||||
| Commercial business loans |
81,676 | 74,471 | 83,754 | 75,640 | 87,333 | |||||||||||||||
| Construction loans |
8,320 | 3,815 | 1,494 | 927 | 2,059 | |||||||||||||||
| Account loans |
2,800 | 2,863 | 2,860 | 2,980 | 3,012 | |||||||||||||||
| Other consumer loans |
10,988 | 13,520 | 15,313 | 17,501 | 19,870 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Consumer loans |
13,788 | 16,383 | 18,173 | 20,481 | 22,882 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans, excluding yield adjs |
3,257,946 | 3,242,453 | 3,119,619 | 2,970,642 | 2,841,906 | |||||||||||||||
| Unamortized yield adjustments |
2,382 | 2,808 | 3,009 | 3,289 | 3,699 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Loans receivable, including yield adjs |
3,260,328 | 3,245,261 | 3,122,628 | 2,973,931 | 2,845,605 | |||||||||||||||
| Less allowance for loan losses |
(29,445 | ) | (29,286 | ) | (27,614 | ) | (26,060 | ) | (25,003 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net loans receivable |
$ | 3,230,883 | $ | 3,215,975 | $ | 3,095,014 | $ | 2,947,871 | $ | 2,820,602 | ||||||||||
| Loan portfolio allocation: |
||||||||||||||||||||
| Residential first mortgage loans |
17.2 | % | 17.5 | % | 18.2 | % | 18.9 | % | 20.6 | % | ||||||||||
| Home equity loans and lines of credit |
2.5 | % | 2.6 | % | 2.6 | % | 2.8 | % | 3.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Residential mortgage loans |
19.7 | % | 20.1 | % | 20.8 | % | 21.7 | % | 23.6 | % | ||||||||||
| Multifamily mortgage loans |
43.8 | % | 43.6 | % | 44.0 | % | 43.6 | % | 40.2 | % | ||||||||||
| Nonresidential and mixed use mortgage loans |
33.3 | % | 33.5 | % | 31.9 | % | 31.4 | % | 32.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Commercial mortgage loans |
77.2 | % | 77.0 | % | 75.9 | % | 75.0 | % | 72.5 | % | ||||||||||
| Commercial business loans |
2.5 | % | 2.3 | % | 2.7 | % | 2.5 | % | 3.1 | % | ||||||||||
| Construction loans |
0.3 | % | 0.1 | % | 0.0 | % | 0.0 | % | 0.1 | % | ||||||||||
| Account loans |
0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||||||
| Other consumer loans |
0.3 | % | 0.4 | % | 0.5 | % | 0.6 | % | 0.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Consumer loans |
0.4 | % | 0.5 | % | 0.6 | % | 0.7 | % | 0.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans, excluding yield adjs |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
| Asset quality: |
||||||||||||||||||||
| Nonperforming assets: |
||||||||||||||||||||
| Accruing loans > 90 days past due |
$ | 105 | $ | 74 | $ | 65 | $ | 92 | $ | 77 | ||||||||||
| Nonaccrual loans |
18,006 | 18,798 | 20,950 | 21,473 | 21,768 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total nonperforming loans |
18,111 | 18,872 | 21,015 | 21,565 | 21,845 | |||||||||||||||
| Other real estate owned |
2,424 | 1,632 | 1,668 | 2,037 | 1,356 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total nonperforming assets |
$ | 20,535 | $ | 20,504 | $ | 22,683 | $ | 23,602 | $ | 23,201 | ||||||||||
| Nonperforming loans (% total loans) |
0.56 | % | 0.58 | % | 0.67 | % | 0.72 | % | 0.77 | % | ||||||||||
| Nonperforming assets (% total assets) |
0.43 | % | 0.43 | % | 0.47 | % | 0.51 | % | 0.51 | % | ||||||||||
| Allowance for loan losses (ALLL): |
||||||||||||||||||||
| ALLL to total loans |
0.90 | % | 0.90 | % | 0.88 | % | 0.88 | % | 0.88 | % | ||||||||||
| ALLL to nonperforming loans |
162.58 | % | 155.18 | % | 131.40 | % | 120.84 | % | 114.46 | % | ||||||||||
| Net charge offs (recoveries) |
$ | 471 | $ | (483 | ) | $ | 254 | $ | 198 | $ | 354 | |||||||||
| Average net charge off (recovery) rate (annualized) |
0.06 | % | -0.06 | % | 0.03 | % | 0.03 | % | 0.05 | % | ||||||||||
| At | ||||||||||||||||||||
| Supplemental Balance Sheet Highlights (Dollars in Thousands, Unaudited) |
September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
|||||||||||||||
| Funding by type: |
||||||||||||||||||||
| Deposits |
||||||||||||||||||||
| Non-interest-bearing deposits |
$ | 279,263 | $ | 267,412 | $ | 255,939 | $ | 240,367 | $ | 251,141 | ||||||||||
| Interest-bearing demand |
856,122 | 847,663 | 798,203 | 768,556 | 750,126 | |||||||||||||||
| Savings and club |
519,040 | 523,984 | 524,002 | 519,257 | 514,909 | |||||||||||||||
| Certificates of deposit |
1,298,843 | 1,291,068 | 1,275,119 | 1,217,837 | 1,217,784 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Interest-bearing deposits |
2,674,005 | 2,662,715 | 2,597,324 | 2,505,650 | 2,482,819 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
2,953,268 | 2,930,127 | 2,853,263 | 2,746,017 | 2,733,960 | |||||||||||||||
| Borrowings: |
||||||||||||||||||||
| Federal Home Loan Bank advances |
775,673 | 775,696 | 775,719 | 665,742 | 600,765 | |||||||||||||||
| Depositor sweep accounts |
32,881 | 30,532 | 49,541 | 36,107 | 32,624 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total borrowings |
808,554 | 806,228 | 825,260 | 701,849 | 633,389 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total funding |
$ | 3,761,822 | $ | 3,736,355 | $ | 3,678,523 | $ | 3,447,866 | $ | 3,367,349 | ||||||||||
| Loans as a % of deposits |
109.5 | % | 109.9 | % | 108.5 | % | 107.6 | % | 103.3 | % | ||||||||||
| Deposits as a % of total funding |
78.5 | % | 78.4 | % | 77.6 | % | 79.6 | % | 81.2 | % | ||||||||||
| Borrowings as a % of total funding |
21.5 | % | 21.6 | % | 22.4 | % | 20.4 | % | 18.8 | % | ||||||||||
| Funding by source: |
||||||||||||||||||||
| Retail funding |
||||||||||||||||||||
| Non-interest-bearing deposits |
$ | 279,263 | $ | 267,412 | $ | 255,939 | $ | 240,367 | $ | 251,141 | ||||||||||
| Interest-bearing demand |
633,778 | 625,061 | 568,865 | 544,487 | 527,511 | |||||||||||||||
| Savings and club |
519,040 | 523,984 | 524,002 | 519,257 | 514,909 | |||||||||||||||
| Certificates of deposit |
1,175,407 | 1,168,010 | 1,152,025 | 1,113,073 | 1,119,922 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total retail deposits |
2,607,488 | 2,584,467 | 2,500,831 | 2,417,184 | 2,413,483 | |||||||||||||||
| Depositor sweep accounts |
32,881 | 30,532 | 49,541 | 36,107 | 32,624 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total retail funding |
2,640,369 | 2,614,999 | 2,550,372 | 2,453,291 | 2,446,107 | |||||||||||||||
| Wholesale funding: |
||||||||||||||||||||
| Interest-bearing demand |
$ | 222,344 | $ | 222,602 | $ | 229,338 | $ | 224,069 | $ | 222,615 | ||||||||||
| Certificates of deposit (listing service) |
101,791 | 101,430 | 101,432 | 96,516 | 89,608 | |||||||||||||||
| Certificates of deposit (brokered) |
21,645 | 21,628 | 21,662 | 8,248 | 8,254 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total wholesale deposits |
345,780 | 345,660 | 352,432 | 328,833 | 320,477 | |||||||||||||||
| FHLB Advances |
775,673 | 775,696 | 775,719 | 665,742 | 600,765 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total wholesale funding |
1,121,453 | 1,121,356 | 1,128,151 | 994,575 | 921,242 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total funding |
$ | 3,761,822 | $ | 3,736,355 | $ | 3,678,523 | $ | 3,447,866 | $ | 3,367,349 | ||||||||||
| Retail funding as a % of total funding |
70.2 | % | 70.0 | % | 69.3 | % | 71.2 | % | 72.6 | % | ||||||||||
| Wholesale funding as a % of total funding |
29.8 | % | 30.0 | % | 30.7 | % | 28.8 | % | 27.4 | % | ||||||||||
| Summary Income Statement (Dollars and Shares in Thousands, Except Per Share Data, Unaudited) |
For the three months ended | |||||||||||||||||||
| September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
||||||||||||||||
| Interest income |
||||||||||||||||||||
| Loans |
$ | 30,473 | $ | 29,842 | $ | 28,235 | $ | 27,407 | $ | 25,697 | ||||||||||
| Mortgage-backed securities |
2,896 | 3,063 | 3,222 | 3,779 | 3,937 | |||||||||||||||
| Debt securities: |
||||||||||||||||||||
| Taxable |
2,960 | 2,868 | 2,488 | 2,146 | 2,040 | |||||||||||||||
| Tax-exempt |
621 | 605 | 582 | 562 | 551 | |||||||||||||||
| Other interest-earning assets |
642 | 586 | 481 | 421 | 581 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest income |
37,592 | 36,964 | 35,008 | 34,315 | 32,806 | |||||||||||||||
| Interest expense |
||||||||||||||||||||
| Deposits |
6,219 | 5,909 | 5,420 | 5,410 | 5,361 | |||||||||||||||
| Borrowings |
4,563 | 4,325 | 3,381 | 3,289 | 3,424 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest expense |
10,782 | 10,234 | 8,801 | 8,699 | 8,785 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income |
26,810 | 26,730 | 26,207 | 25,616 | 24,021 | |||||||||||||||
| Provision for loan losses |
630 | 1,188 | 1,809 | 1,255 | 1,129 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income after provision for loan losses |
26,180 | 25,542 | 24,398 | 24,361 | 22,892 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-interest income |
||||||||||||||||||||
| Fees and service charges |
1,261 | 839 | 498 | 1,289 | 663 | |||||||||||||||
| (Loss) gain on sale and call of securities |
— | — | (22 | ) | 21 | — | ||||||||||||||
| Gain on sale of loans |
331 | 531 | 245 | 459 | 300 | |||||||||||||||
| (Loss) gain on sale of real estate owned |
(109 | ) | 3 | (106 | ) | 12 | (15 | ) | ||||||||||||
| Income from bank owned life insurance |
1,267 | 1,288 | 1,279 | 1,321 | 1,319 | |||||||||||||||
| Electronic banking fees and charges |
278 | 287 | 240 | 270 | 283 | |||||||||||||||
| Miscellaneous |
66 | 72 | 119 | 74 | 79 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest income |
3,094 | 3,020 | 2,253 | 3,446 | 2,629 | |||||||||||||||
| Non-interest expense |
||||||||||||||||||||
| Salaries and employee benefits |
12,867 | 12,887 | 12,430 | 11,592 | 10,909 | |||||||||||||||
| Net occupancy expense of premises |
1,981 | 2,013 | 2,088 | 1,976 | 1,941 | |||||||||||||||
| Equipment and systems |
2,190 | 2,204 | 2,068 | 2,030 | 2,048 | |||||||||||||||
| Advertising and marketing |
710 | 937 | 753 | 387 | 549 | |||||||||||||||
| Federal deposit insurance premium |
360 | 352 | 338 | 339 | 305 | |||||||||||||||
| Directors’ compensation |
689 | 689 | 689 | 379 | 225 | |||||||||||||||
| Miscellaneous |
2,489 | 2,969 | 2,668 | 2,670 | 2,683 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest expense |
21,286 | 22,051 | 21,034 | 19,373 | 18,660 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income before income taxes |
7,988 | 6,511 | 5,617 | 8,434 | 6,861 | |||||||||||||||
| Income taxes |
2,756 | 2,107 | 1,549 | 2,970 | 2,194 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income |
$ | 5,232 | $ | 4,404 | $ | 4,068 | $ | 5,464 | $ | 4,667 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income per common share (EPS) |
||||||||||||||||||||
| Basic |
$ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.06 | $ | 0.05 | ||||||||||
| Diluted |
$ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.06 | $ | 0.05 | ||||||||||
| Dividends declared (1) |
||||||||||||||||||||
| Cash dividends declared per common share |
$ | 0.15 | $ | 0.03 | $ | 0.03 | $ | 0.02 | $ | 0.02 | ||||||||||
| Cash dividends declared |
$ | 12,148 | $ | 2,448 | $ | 2,525 | $ | 1,687 | $ | 1,710 | ||||||||||
| Dividend payout ratio |
232.2 | % | 55.6 | % | 62.1 | % | 30.9 | % | 36.6 | % | ||||||||||
| Weighted average number of common shares outstanding |
||||||||||||||||||||
| Basic |
79,649 | 82,372 | 84,542 | 85,174 | 86,246 | |||||||||||||||
| Diluted |
79,708 | 82,429 | 84,624 | 85,258 | 86,304 | |||||||||||||||
| (1) | Dividends declared during the quarter ended September 30, 2017 include a $0.12 special dividend representing a supplemental distribution of net income to stockholders from the prior fiscal year ended June 30, 2017. |
| For the three months ended | ||||||||||||||||||||
| Average Balance Sheet Data (Dollars in Thousands, Unaudited) |
September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
|||||||||||||||
| Assets |
||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||
| Loans receivable, including loans held for sale |
$ | 3,257,465 | $ | 3,200,968 | $ | 3,029,151 | $ | 2,899,794 | $ | 2,697,096 | ||||||||||
| Mortgage-backed securities |
511,931 | 532,621 | 582,591 | 673,569 | 695,876 | |||||||||||||||
| Debt securities: |
||||||||||||||||||||
| Tax-exempt |
122,685 | 119,957 | 116,479 | 112,221 | 109,625 | |||||||||||||||
| Taxable |
489,252 | 476,499 | 441,124 | 419,966 | 442,233 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total debt securities |
611,937 | 596,456 | 557,603 | 532,187 | 551,858 | |||||||||||||||
| Other interest-earning assets |
79,920 | 118,349 | 61,336 | 71,072 | 204,621 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-earning assets |
4,461,253 | 4,448,394 | 4,230,681 | 4,176,622 | 4,149,451 | |||||||||||||||
| Non-interest-earning assets |
361,259 | 358,791 | 352,419 | 351,458 | 359,514 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 4,822,512 | $ | 4,807,185 | $ | 4,583,100 | $ | 4,528,080 | $ | 4,508,965 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Liabilities and Stockholders’ Equity |
||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||
| Deposits: |
||||||||||||||||||||
| Interest-bearing demand |
$ | 858,291 | $ | 813,148 | $ | 756,520 | $ | 761,765 | $ | 748,516 | ||||||||||
| Savings and club |
522,715 | 523,798 | 520,572 | 518,225 | 515,615 | |||||||||||||||
| Certificates of deposit |
1,285,882 | 1,289,504 | 1,242,757 | 1,224,592 | 1,215,081 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing deposits |
2,666,888 | 2,626,450 | 2,519,849 | 2,504,582 | 2,479,212 | |||||||||||||||
| Borrowings: |
||||||||||||||||||||
| Federal Home Loan Bank Advances |
778,104 | 775,703 | 643,504 | 594,238 | 577,305 | |||||||||||||||
| Other borrowings |
32,041 | 40,064 | 44,940 | 35,273 | 33,530 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total borrowings |
810,145 | 815,767 | 688,444 | 629,511 | 610,835 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing liabilities |
3,477,033 | 3,442,217 | 3,208,293 | 3,134,093 | 3,090,047 | |||||||||||||||
| Non-interest-bearing liabilities: |
||||||||||||||||||||
| Non-interest-bearing deposits |
274,858 | 262,499 | 246,449 | 245,928 | 243,964 | |||||||||||||||
| Other non-interest-bearing liabilities |
29,754 | 25,112 | 25,028 | 31,781 | 47,092 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest-bearing liabilities |
304,612 | 287,611 | 271,477 | 277,709 | 291,056 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
3,781,645 | 3,729,828 | 3,479,770 | 3,411,802 | 3,381,103 | |||||||||||||||
| Stockholders’ equity |
1,040,867 | 1,077,357 | 1,103,330 | 1,116,278 | 1,127,862 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and stockholders’ equity |
$ | 4,822,512 | $ | 4,807,185 | $ | 4,583,100 | $ | 4,528,080 | $ | 4,508,965 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Average interest-earning assets to average interest-bearing liabilities |
128.31 | % | 129.23 | % | 131.87 | % | 133.26 | % | 134.28 | % | ||||||||||
| For the three months ended | ||||||||||||||||||||
| Performance Ratio Highlights |
September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
|||||||||||||||
| Average yield on interest-earning assets: |
||||||||||||||||||||
| Loans receivable, including loans held for sale |
3.74 | % | 3.73 | % | 3.73 | % | 3.78 | % | 3.81 | % | ||||||||||
| Mortgage-backed securities |
2.26 | % | 2.30 | % | 2.21 | % | 2.24 | % | 2.26 | % | ||||||||||
| Debt securities: |
||||||||||||||||||||
| Tax-exempt |
2.03 | % | 2.02 | % | 2.00 | % | 2.00 | % | 2.01 | % | ||||||||||
| Taxable |
2.42 | % | 2.41 | % | 2.26 | % | 2.04 | % | 1.85 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total debt securities |
2.34 | % | 2.33 | % | 2.20 | % | 2.04 | % | 1.88 | % | ||||||||||
| Other interest-earning assets |
3.21 | % | 1.98 | % | 3.13 | % | 2.37 | % | 1.14 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-earning assets |
3.37 | % | 3.32 | % | 3.31 | % | 3.29 | % | 3.16 | % | ||||||||||
| Average cost of interest-bearing liabilities: |
||||||||||||||||||||
| Deposits: |
||||||||||||||||||||
| Interest-bearing demand |
0.76 | % | 0.71 | % | 0.65 | % | 0.62 | % | 0.63 | % | ||||||||||
| Savings and club |
0.12 | % | 0.12 | % | 0.12 | % | 0.12 | % | 0.15 | % | ||||||||||
| Certificates of deposit |
1.38 | % | 1.34 | % | 1.30 | % | 1.33 | % | 1.31 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing deposits |
0.93 | % | 0.90 | % | 0.86 | % | 0.86 | % | 0.87 | % | ||||||||||
| Borrowings: |
||||||||||||||||||||
| Federal Home Loan Bank Advances |
2.33 | % | 2.21 | % | 2.08 | % | 2.20 | % | 2.35 | % | ||||||||||
| Other borrowings |
0.27 | % | 0.27 | % | 0.35 | % | 0.29 | % | 0.42 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total borrowings |
2.25 | % | 2.12 | % | 1.96 | % | 2.09 | % | 2.24 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing liabilities |
1.24 | % | 1.19 | % | 1.10 | % | 1.11 | % | 1.14 | % | ||||||||||
| Interest rate spread (1) |
2.13 | % | 2.13 | % | 2.21 | % | 2.18 | % | 2.02 | % | ||||||||||
| Net interest margin (2) |
2.40 | % | 2.40 | % | 2.48 | % | 2.45 | % | 2.32 | % | ||||||||||
| Non-interest income to average assets (annualized) |
0.26 | % | 0.25 | % | 0.20 | % | 0.30 | % | 0.23 | % | ||||||||||
| Non-interest expense to average assets (annualized) |
1.77 | % | 1.83 | % | 1.84 | % | 1.71 | % | 1.66 | % | ||||||||||
| Efficiency ratio (3) |
71.18 | % | 74.12 | % | 73.91 | % | 66.66 | % | 70.02 | % | ||||||||||
| Return on average assets (annualized) |
0.43 | % | 0.37 | % | 0.36 | % | 0.48 | % | 0.41 | % | ||||||||||
| Return on average equity (annualized) |
2.01 | % | 1.64 | % | 1.47 | % | 1.96 | % | 1.66 | % | ||||||||||
| (1) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
| (2) | Net interest income divided by average interest-earning assets. |
| (3) | Non-interest expense divided by the sum of net interest income and non-interest income. |