•

For the quarter and the year ended June 30, 2020, the Company succeeded in significantly growing core retail deposits which facilitated the outflow of wholesale deposits.  For the quarter ended June 30, 2020, deposits increased by $177.0 million to $4.43 billion from $4.25 billion at March 31, 2020. Such growth was attributable to an increase of $224.9 million in retail deposits that was partially offset by a decline of $47.8 million in wholesale deposits.  For the year ended June 30, 2020, deposits increased by $282.6 million to $4.43 billion from $4.15 billion at June 30, 2019.  The year-over-year growth in deposits was attributable to an increase of $517.4 million in retail deposits that was partially offset by a $234.8 million decrease in wholesale deposits.

•

Loans receivable decreased by $64.1 million to $4.50 billion at June 30, 2020 from $4.56 billion at March 31, 2020.  The decrease in loans receivable was attributable to a decrease in loan origination volume coupled with the acceleration of loan pre-payment activity, as compared to the prior quarter.  For the quarter ended June 30, 2020, the Company originated 749 loans totaling $69.0 million under the Payroll Protection Program (“PPP”) and recorded deferred origination fees related to such loans totaling $2.9 million.  For the year ended June 30, 2020, the Company’s aggregate loan portfolio decreased by $180.5 million, or 3.9%, from $4.68 billion, at June 30, 2019.

•

Investment securities decreased by $92.7 million to $1.42 billion, or 21.0% of total assets, at June 30, 2020 from $1.51 billion at March 31, 2020.  For the year ended June 30, 2020, the securities portfolio increased by $127.3 million from $1.29 billion, or 19.5% of total assets, at June 30, 2019.  

•

Borrowings decreased by $210.9 million to $1.17 billion, or 17.4% of total assets, at June 30, 2020 from $1.38 billion at March 31, 2020.  For the year ended June 30, 2020, borrowings decreased $148.8 million from $1.32 billion at June 30, 2019.  The decrease in borrowings for the quarter and year ended June 30, 2020 reflected the Company’s continuing effort to reallocate its funding mix in favor of core deposits.

•

For the quarter ended June 30, 2020, net interest income increased by $2.9 million to $40.5 million from $37.6 million for the quarter ended March 31, 2020.  The increase in net interest income was the result of a decrease of $4.3 million in interest expense, partially offset by a $1.4 million decrease in interest income between comparative periods.  For the year ended June 30, 2020, net interest income decreased by $6.0 million to $149.4 million from $155.3 million for the year ended June 30, 2019.  The decrease in net interest income was the result of a decrease of $4.1 million in interest income and an increase of $1.8 million in interest expense.

•

For the quarter ended June 30, 2020, net interest spread increased by 20 basis points to 2.43% while net interest margin increased by 16 basis points to 2.62%. These increases primarily reflected a decrease in the cost of interest-bearing liabilities partially offset by a decrease in the yield on interest-earning assets. Contributing approximately eight basis points to the quarterly increase in net interest margin was a temporary mismatch in the relationship between three-month LIBOR and three-month FHLB advance rates which favorably impacted the net cost of the Company’s portfolio of hedged FHLB advances. Specifically, the average historical spread between these two rates over the five-year period ended June 30, 2020 was approximately one basis point.  However, that spread increased to 94 basis points on April 1, 2020 reflecting significant market volatility arising at outset of the COVID-19 pandemic. The mismatch between the noted three-month rate indices declined throughout the quarter, ending at 14 basis points at June 30, 2020.

•

For the year ended June 30, 2020, net interest rate spread decreased by nine basis points to 2.22% while net interest margin decreased 11 basis points to 2.45%.  These decreases primarily reflected a decrease in the yield on interest-earning assets coupled with an increase in the cost of interest-bearing liabilities.

•

For the quarter ended June 30, 2020, the yield on interest-earning assets decreased by 12 basis points to 3.72% which was largely attributable to a 9 basis point decrease in the yield on loans and a 14 basis point decrease in the yield on taxable investment securities.  For that same period, the cost of interest-bearing liabilities decreased by 32 basis points to 1.29% which was attributable to a 23 basis point decrease in the cost of interest-bearing deposits coupled with a 61 basis point decrease in the cost of borrowings.

•

For the year ended June 30, 2020, the yield on interest-earning assets decreased by eight basis points to 3.83% which was largely attributable to a three basis point decrease in the yield on loans, coupled with a 14 basis point decrease in the yield on taxable investment securities. For that same period, the cost of interest-bearing liabilities increased by one basis point to 1.61% which was attributable to an 11 basis point increase in the cost of interest-bearing deposits partially offset by a 24 basis point decrease in the cost of borrowings.

•

Fees and service charges totaled $1.7 million for the quarter ended June 30, 2020 compared to $1.3 million for the quarter ended March 31, 2020.  The increase was largely attributable to an increase of $518,000 in loan pre-payment penalty income to $1.4 million for the quarter ended June 30, 2020.  For the year ended June 30, 2020 fees and service charges increased by $1.2 million to $6.6 million from $5.4 million for the year ended June 30, 2019 which was largely attributable to an increase of $1.1 million in loan pre-payment penalty income to $4.6 million for the year ended June 30, 2020.

•

Gains on sales and calls of securities totaled $19,000 for the quarter ended June 30, 2020 compared to $2.2 million for the quarter ended March 31, 2020.  For the year ended June 30, 2020 gains on sales of securities totaled $2.3 million compared to a net loss of $323,000 for the year ended June 30, 2019. These variances were largely attributable to the gain on sale of securities recognized in conjunction with a wholesale restructuring transaction executed during the quarter ended March 31, 2020.  

•

Loan sale gains achieved record levels, totaling $1.3 million for the quarter ended June 30, 2020 as compared to $565,000 for the quarter ended March 31, 2020. Such gains totaled $3.2 million and $580,000 for the years ended June 30, 2020 and June 30, 2019, respectively. The increase in loan sale gains primarily reflected an increase in the volume of residential mortgage loans sold during those periods.

•

Non-interest expense decreased by $1.2 million to $26.9 million for the quarter ended June 30, 2020 compared to $28.1 million for the quarter ended March 31, 2020.  This decrease was largely attributable to $2.2 million of non-recurring debt extinguishment expenses recognized in the prior comparative period. The remaining change in non-interest expense included increases in equipment and systems expense, advertising and marketing expense, FDIC insurance premiums, non-recurring merger-related expenses and miscellaneous expense.

•

For the year ended June 30, 2020, non-interest expense decreased by $1.6 million to $107.6 million from $109.2 million for the year ended June 30, 2019. This decrease was largely attributable to $1.7 million of non-recurring branch consolidation expenses recognized in the prior comparative period.  The remaining change in non-interest expense included decreases in salaries and employee benefits, equipment and systems expense, advertising and marketing expense and FDIC insurance premiums.  Partially offsetting these decreases were increases to non-recurring debt-extinguishment expenses and non-recurring merger-related expenses totaling $2.2 million and $951,000, respectively, which were recognized during the current year ended June 30, 2020.

•

The Company’s non-interest expense ratio totaled 1.59% for the quarter ended June 30, 2020 compared to 1.67% for the quarter ended March 31, 2020.  For the year ended June 30, 2020, the Company’s non-interest expense ratio totaled 1.61% compared to 1.64% for the prior year ended June 30, 2019.  

•

The Company’s efficiency ratio was 59.2% for the quarter ended June 30, 2020 compared to 64.1% for the prior quarter ended March 31, 2020.  For the year ended June 30, 2020, the Company’s efficiency ratio totaled 63.7% compared to 64.7% for the prior year ended June 30, 2019.  

•

Income tax expense totaled $4.7 million for the quarter ended June 30, 2020 compared to $225,000 for the quarter ended March 31, 2020, resulting in effective tax rates of 25.6% and 2.4%, respectively. For the year ended June 30, 2020, income tax expense was $12.3 million compared to $13.9 million for the year ended June 30, 2019 resulting in effective tax rates of 21.5% and 24.8%, respectively.  

•

The increase in income tax expense and effective tax rate for the quarter ended June 30, 2020 reflected certain income tax benefits recorded in the prior comparative period, including a $1.6 million carryback of net operating losses and the reversal of tax valuation allowances totaling $591,000. In addition, a comparatively higher level of pre-tax net income, as compared to the prior period, resulted in a comparatively higher provision for income tax expense.  The decrease in income tax expense and effective tax rate for the year ended June 30, 2020 primarily reflected income tax benefits recorded during the year ended June 30, 2020, as noted above.

•

Return on average assets for the quarter ended June 30, 2020 increased to 0.81% from 0.55% for the quarter ended March 31, 2020.  For the year ended June 30, 2020, the return on average assets increased to 0.67% from 0.63% for the prior year ended June 30, 2019.  

•

Return on average equity increased to 5.08% for the quarter ended June 30, 2020 from 3.39% for the quarter ended March 31, 2020 while return on average tangible equity increased to 6.35% from 4.23% for those same comparative periods, respectively.  For the year ended June 30, 2020, return on average equity increased to 4.10% from 3.52% for the prior year ended June 30, 2019 while return on average tangible equity increased to 5.10% from 4.30% for those same comparative periods, respectively.

•

The outstanding balance of non-performing loans totaled $36.7 million, or 0.82% of total loans, at June 30, 2020 compared to $35.4 million, or 0.78% of total loans, at March 31, 2020 and $20.3 million, or 0.43% of total loans, at June 30, 2019.  The $16.4 million increase in nonperforming loans for the year ended June 30, 2020 was primarily attributable to a single, $14.3 million, owner-occupied commercial real estate loan which was placed on non-accrual status during the quarter ended March 31, 2020.  This loan is secured by a grocery-anchored retail shopping center located in northern New Jersey and has a current loan-to-value of approximately 69%.  

•

Based on Section 4013 of the CARES Act and the related guidance promulgated by federal banking regulators, qualifying short-term loan modifications resulting in payment deferrals for up to six months that are attributable to the adverse impact of COVID-19, are not considered to be troubled debt restructurings. Consequently, loans subject to such payment deferrals are reported as current with regard to payment status and continue to accrue interest during the payment deferral period. As of June 30, 2020, the Company had modified a total of 711 loans with an aggregate principal balance of $781.3 million, representing 17.2% of total loans. Further details regarding these modifications are provided in the table below. As of June 30, 2020, 351 of the modified loans with an aggregate principal balance of $374.9 million had reached the expiration of their initial three-month deferral period.  Of these loans, 71.4%, or $267.9 million, had returned to their regular payment schedules by July 27, 2020.  Through that same date, 24.5%, or $91.6 million had been granted a second 90-day extension while the remaining 4.1%, or $15.4 million, had not yet made their July payment.

June 30, 2020

May 4, 2020 ⁽¹⁾

Increase/(Decrease)

# of Loans

Balance

# of Loans

Balance

# of Loans

Balance

(In Thousands)

(In Thousands)

(In Thousands)

Commercial loans:

Multi-family mortgage

136

$

387,744

93

$

269,219

43

$

118,525

Nonresidential mortgage

131

237,384

120

216,833

11

20,551

Commercial business

54

10,450

46

6,770

8

3,680

Construction

1

796

1

796

-

-

Total commercial loans

322

636,374

260

493,618

62

142,756

Residential mortgage

345

141,890

305

126,647

40

15,243

-

Consumer loans:

-

Home equity loans

44

3,014

37

2,409

7

605

Total loans

711

$

781,278

602

$

622,674

109

$

158,604

(1)

Certain historical data presented as of May 4, 2020 has been reclassified to be consistent with the current period presentation.

•

In addition to the loans reported above, the Company acquired 144 loans with aggregate principal balances of $114.8 million in conjunction with the Company’s acquisition of MSB on July 10, 2020 that had been previously modified in accordance with the guidance discussed above.

•

Net charge offs totaled $38,000 for the quarter ended June 30, 2020 compared to $16,000 for the quarter ended March 31, 2020 reflecting an annualized net charge off rate of 0.00% for both comparative periods.  For the year ended June 30, 2020, the Company recognized net charge offs totaling $144,000 reflecting an annualized net charge off rate of 0.00% on the average balance of total loans for the fiscal year.  By comparison, for the year ended June 30, 2019, the Company recognized net charge offs totaling $1.1 million reflecting an annualized net charge off rate of 0.02% on the average balance of total loans for fiscal 2019.  

•

For the quarter ended June 30, 2020 the Company recorded a provision for loan losses of $174,000.  The provision expense for the period partly reflected an increase of $935,000 in the allowance for loan losses resulting from increases in certain environmental loss factors reflecting estimated incurred losses specifically attributable to the continuing adverse impact of COVID-19.  That increase was largely offset by the effects of a decrease in the overall balance of the portion of the loan portfolio that was collectively evaluated for impairment at June 30, 2020.  By comparison, the provision for loan losses for the prior quarter ended March 31, 2020 totaled $6.3 million.  The provision expense during the prior comparative quarter reflected an estimate of approximately $5.5 million of incurred losses specifically attributable to the adverse impact of COVID-19.  The remaining portion of the provision during the earlier comparative period was largely attributable to the effects of an increase in the overall balance of the portion of the loan portfolio that was collectively evaluated for impairment during that period.

•

For the year ended June 30, 2020, the Company recorded a provision for loan losses of $4.2 million, reflecting an increase of $641,000 from $3.6 million for the year ended June 30, 2019. The increase largely reflected increases to environmental loss factors associated with the adverse impact of COVID-19 that was partially offset by the effects of lower growth during the year ended June 30, 2020 in the balance of the portion of the loan portfolio that was collectively evaluated for impairment compared to that of the prior year ended June 30, 2019.

•

The allowance for loan losses (“ALLL”) increased to $37.3 million, or 0.82% of total loans, at June 30, 2020 from $37.2 million, or 0.81% of total loans, at March 31, 2020.  For the year ended June 30, 2020, the allowance for loan losses increased by $4.1 million from $33.3 million, or 0.70% of total loans, at June 30, 2019. Excluding the balance of acquired loans, which generally do not carry an ALLL, the ALLL as a percentage of non-acquired loans at June 30, 2020 and June 30, 2019 totaled 1.03% and .91%, respectively.  As of June 30, 2020, the balance of acquired loans totaled $923.9 million, had remaining purchase accounting discounts of $43.1 million, or 4.67% of the applicable outstanding balance, with no associated ALLL. As the Company operates on a non-calendar fiscal year, as of June 30, 2020, it had not yet adopted Accounting Standards Update 2016-13, also known as the Current Expected Credit Loss (“CECL”) standard.

•

The Company maintains significant sources of both on- and off-balance sheet liquidity.  At June 30, 2020, the Company’s liquid assets included $181.0 million of short-term cash and equivalents supplemented by $1.39 billion of investment securities classified as available for sale which can be readily sold or pledged as collateral, if necessary.  In addition, the Company had the capacity to borrow additional funds totaling $615.0 million via unsecured lines of credit and $1.53 billion and $318.7 million, without pledging additional collateral, from the Federal Home Loan Bank of New York and Federal Reserve Bank, respectively.

•

On March 25, 2020 the Company temporarily suspended its stock repurchase program due to the risks and uncertainties associated with the COVID-19 pandemic. Through June 30, 2020, the Company repurchased 8,457,294 shares, or 91.7% of the shares authorized for repurchase under the current repurchase program, at a cost of $111.1 million, or an average of $13.14 per share.  

•

For the quarter ended June 30, 2020, the Company maintained its regular quarterly cash dividend paid to stockholders of $0.08 per share.  For the year ended June 30, 2020, total cash dividends paid to stockholders totaled $0.29 per share.

•

For the quarter ended June 30, 2020, book value per share increased by $0.17 to $12.96 at June 30, 2020 while tangible book value per share increased by $0.18 to $10.39 at June 30, 2020.  For the year ended June 30, 2020, book value per share increased by $0.31 to $12.96 at June 30, 2020 while tangible book value per share increased by $0.17 to $10.39 at June 30, 2020.  

•

At June 30, 2020 the Tier 1 leverage ratios of the Company and the Bank were 13.27% and 11.95%, respectively.  The remainder of the Company’s and Bank’s regulatory capital ratios at June 30, 2020 were in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.

Linked-Quarter Comparative Financial Analysis

Summary Balance Sheet

At

Variance

(Dollars and Shares in Thousands,

June 30,

March 31,

Variance

or Change

Except Per Share Data, Unaudited)

2020

2020

or Change

Pct.

Assets

Cash and cash equivalents

$

180,967

$

59,452

$

121,515

204.4

%

Securities available for sale

1,385,703

1,476,344

(90,641

)

-6.1

%

Securities held to maturity

32,556

34,618

(2,062

)

-6.0

%

Loans held-for-sale

20,789

11,245

9,544

84.9

%

Loans receivable, including yield adjustments

4,498,397

4,562,512

(64,115

)

-1.4

%

Less allowance for loan losses

(37,327

)

(37,191

)

(136

)

0.4

%

Net loans receivable

4,461,070

4,525,321

(64,251

)

-1.4

%

Premises and equipment

57,389

58,985

(1,596

)

-2.7

%

Federal Home Loan Bank stock

58,654

59,324

(670

)

-1.1

%

Accrued interest receivable

17,373

19,036

(1,663

)

-8.7

%

Goodwill

210,895

210,895

-

0.0

%

Core deposit intangible

3,995

4,242

(247

)

-5.8

%

Bank owned life insurance

262,380

260,843

1,537

0.6

%

Deferred income taxes, net

25,480

27,150

(1,670

)

-6.2

%

Other real estate owned

178

178

-

0.0

%

Other assets

40,746

26,200

14,546

55.5

%

Total assets

$

6,758,175

$

6,773,833

$

(15,658

)

-0.2

%

Liabilities

Deposits

$

4,430,282

$

4,253,254

$

177,028

4.2

%

Borrowings

1,173,165

1,384,025

(210,860

)

-15.2

%

Advance payments by borrowers for taxes

16,569

16,492

77

0.5

%

Other liabilities

53,982

50,390

3,592

7.1

%

Total liabilities

5,673,998

5,704,161

(30,163

)

-0.5

%

Stockholders' Equity

Common stock

837

837

-

0.0

%

Paid-in capital

722,871

721,474

1,397

0.2

%

Retained earnings

387,911

380,671

7,240

1.9

%

Unearned ESOP shares

(28,699

)

(29,185

)

486

-1.7

%

Accumulated other comprehensive (loss) income, net

1,257

(4,125

)

5,382

-130.5

%

Total stockholders' equity

1,084,177

1,069,672

14,505

1.4

%

Total liabilities and stockholders' equity

$

6,758,175

$

6,773,833

$

(15,658

)

-0.2

%

Consolidated capital ratios

Equity to assets

16.04

%

15.79

%

0.25

%

Tangible equity to tangible assets

13.29

%

13.03

%

0.26

%

Share data

Outstanding shares

83,663

83,664

(1

)

0.0

%

Book value per share

$

12.96

$

12.79

$

0.17

1.3

%

Tangible book value per share ⁽¹⁾

$

10.39

$

10.21

$

0.18

1.8

%

(1)

Tangible book value 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,

June 30,

March 31,

Variance

or Change

Except Per Share Data, Unaudited)

2020

2020

or Change

Pct.

Interest income

Loans

$

46,192

$

46,603

$

(411

)

-0.9

%

Taxable investment securities

9,769

10,526

(757

)

-7.2

%

Tax-exempt investment securities

487

547

(60

)

-11.0

%

Other interest-earning assets

903

1,100

(197

)

-17.9

%

Total Interest Income

57,351

58,776

(1,425

)

-2.4

%

Interest expense

Deposits

12,439

14,768

(2,329

)

-15.8

%

Borrowings

4,462

6,398

(1,936

)

-30.3

%

Total interest expense

16,901

21,166

(4,265

)

-20.2

%

Net interest income

40,450

37,610

2,840

7.6

%

Provision for loan losses

174

6,270

(6,096

)

-97.2

%

Net interest income after provision for

loan losses

40,276

31,340

8,936

28.5

%

Non-interest income

Fees and service charges

1,696

1,338

358

26.8

%

Gain on sale and call of securities

19

2,234

(2,215

)

-99.1

%

Gain on sale of loans

1,348

565

783

138.6

%

Loss on sale and write down of other real estate owned

-

-

-

0.0

%

Income from bank owned life insurance

1,537

1,532

5

0.3

%

Electronic banking fees and charges

325

309

16

5.2

%

Miscellaneous

77

223

(146

)

-65.5

%

Total non-interest income

5,002

6,201

(1,199

)

-19.3

%

Non-interest expense

Salaries and employee benefits

15,527

15,537

(10

)

-0.1

%

Net occupancy expense of premises

2,688

2,685

3

0.1

%

Equipment and systems

2,948

2,672

276

10.3

%

Advertising and marketing

751

612

139

22.7

%

Federal deposit insurance premium

286

-

286

0.0

%

Directors' compensation

769

771

(2

)

-0.3

%

Merger-related expenses

447

285

162

56.8

%

Debt extinguishment expenses

-

2,156

(2,156

)

-100.0

%

Miscellaneous

3,475

3,344

131

3.9

%

Total non-interest expense

26,891

28,062

(1,171

)

-4.2

%

Income before income taxes

18,387

9,479

8,908

94.0

%

Income taxes

4,698

225

4,473

1988.0

%

Net income

$

13,689

$

9,254

$

4,435

47.9

%

Net income per common share (EPS)

Basic

$

0.17

$

0.11

$

0.06

Diluted

$

0.17

$

0.11

$

0.06

Dividends declared

Cash dividends declared per common share

$

0.08

$

0.08

$

-

Cash dividends declared

$

6,449

$

6,479

$

(30

)

Dividend payout ratio

47.1

%

70.0

%

-22.9

%

Weighted average number of  common

shares outstanding

Basic

80,678

81,339

(661

)

Diluted

80,680

81,358

(678

)

For the three months ended

Variance

Average Balance Sheet Data

June 30,

March 31,

Variance

or Change

(Dollars in Thousands, Unaudited)

2020

2020

or Change

Pct.

Assets

Interest-earning assets:

Loans receivable, including loans held for sale

$

4,567,229

$

4,503,996

$

63,233

1.4

%

Taxable investment securities

1,369,014

1,406,973

(37,959

)

-2.7

%

Tax-exempt investment securities

89,263

101,771

(12,508

)

-12.3

%

Other interest-earning assets

141,964

104,241

37,723

36.2

%

Total interest-earning assets

6,167,470

6,116,981

50,489

0.8

%

Non-interest-earning assets

605,876

598,335

7,541

1.3

%

Total assets

$

6,773,346

$

6,715,316

$

58,030

0.9

%

Liabilities and Stockholders' Equity

Interest-bearing liabilities:

Deposits:

Interest-bearing demand

$

1,189,044

$

1,112,080

$

76,964

6.9

%

Savings

876,580

838,501

38,079

4.5

%

Certificates of deposit

1,879,039

2,004,785

(125,746

)

-6.3

%

Total interest-bearing deposits

3,944,663

3,955,366

(10,703

)

-0.3

%

Borrowings:

Federal Home Loan Bank advances

1,202,522

1,208,627

(6,105

)

-0.5

%

Other borrowings

96,770

87,072

9,698

11.1

%

Total borrowings

1,299,292

1,295,699

3,593

0.3

%

Total interest-bearing liabilities

5,243,955

5,251,065

(7,110

)

-0.1

%

Non-interest-bearing liabilities:

Non-interest-bearing deposits

380,067

317,530

62,537

19.7

%

Other non-interest-bearing liabilities

72,007

55,456

16,551

29.8

%

Total non-interest-bearing liabilities

452,074

372,986

79,088

21.2

%

Total liabilities

5,696,029

5,624,051

71,978

1.3

%

Stockholders' equity

1,077,317

1,091,265

(13,948

)

-1.3

%

Total liabilities and stockholders' equity

$

6,773,346

$

6,715,316

$

58,030

0.9

%

Average interest-earning assets to average

interest-bearing liabilities

117.61

%

116.49

%

1.12

%

1.0

%

For the three months ended

June 30,

March 31,

Variance

Performance Ratio Highlights

2020

2020

or Change

Average yield on interest-earning assets:

Loans receivable, including loans held for sale

4.05

%

4.14

%

-0.09

%

Taxable investment securities

2.85

%

2.99

%

-0.14

%

Tax-exempt investment securities ⁽¹⁾

2.18

%

2.15

%

0.03

%

Other interest-earning assets

2.54

%

4.22

%

-1.68

%

Total interest-earning assets

3.72

%

3.84

%

-0.12

%

Average cost of interest-bearing liabilities:

Deposits:

Interest-bearing demand

0.72

%

1.17

%

-0.45

%

Savings

0.81

%

0.85

%

-0.04

%

Certificates of deposit

1.82

%

1.94

%

-0.12

%

Total interest-bearing deposits

1.26

%

1.49

%

-0.23

%

Borrowings:

Federal Home Loan Bank advances

1.47

%

2.03

%

-0.56

%

Other borrowings

0.13

%

1.17

%

-1.04

%

Total borrowings

1.37

%

1.98

%

-0.61

%

Total interest-bearing liabilities

1.29

%

1.61

%

-0.32

%

Interest rate spread ⁽²⁾

2.43

%

2.23

%

0.20

%

Net interest margin ⁽³⁾

2.62

%

2.46

%

0.16

%

Non-interest income to average assets

(annualized)

0.30

%

0.37

%

-0.07

%

Non-interest expense to average assets

(annualized)

1.59

%

1.67

%

-0.08

%

Efficiency ratio ⁽⁴⁾

59.16

%

64.05

%

-4.89

%

Return on average assets (annualized)

0.81

%

0.55

%

0.26

%

Return on average equity (annualized)

5.08

%

3.39

%

1.69

%

Return on average tangible equity (annualized) ⁽⁵⁾

6.35

%

4.23

%

2.12

%

(1)

The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.

(2)

Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.

(3)

Net interest income divided by average interest-earning assets.

(4)

Non-interest expense divided by the sum of net interest income and non-interest income.

(5)

Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.

Year-to-Year Comparative Financial Analysis

Summary Balance Sheet

At

Variance

(Dollars and Shares in Thousands,

June 30,

June 30,

Variance

or Change

Except Per Share Data, Unaudited)

2020

2019

or Change

Pct.

Assets

Cash and cash equivalents

$

180,967

$

38,935

$

142,032

364.8

%

Securities available for sale

1,385,703

714,263

671,440

94.0

%

Securities held to maturity

32,556

576,652

(544,096

)

-94.4

%

Loans held-for-sale

20,789

12,267

8,522

69.5

%

Loans receivable, including yield adjustments

4,498,397

4,678,928

(180,531

)

-3.9

%

Less allowance for loan losses

(37,327

)

(33,274

)

(4,053

)

12.2

%

Net loans receivable

4,461,070

4,645,654

(184,584

)

-4.0

%

Premises and equipment

57,389

56,854

535

0.9

%

Federal Home Loan Bank of New York stock

58,654

64,190

(5,536

)

-8.6

%

Accrued interest receivable

17,373

19,360

(1,987

)

-10.3

%

Goodwill

210,895

210,895

-

0.0

%

Core deposit intangible

3,995

5,160

(1,165

)

-22.6

%

Bank owned life insurance

262,380

256,155

6,225

2.4

%

Deferred income tax assets, net

25,480

25,367

113

0.4

%

Other real estate owned

178

-

178

0.0

%

Other assets

40,746

9,077

31,669

348.9

%

Total assets

$

6,758,175

$

6,634,829

$

123,346

1.9

%

Liabilities

Deposits

$

4,430,282

$

4,147,610

$

282,672

6.8

%

Borrowings

1,173,165

1,321,982

(148,817

)

-11.3

%

Advance payments by borrowers for taxes

16,569

16,887

(318

)

-1.9

%

Other liabilities

53,982

21,191

32,791

154.7

%

Total liabilities

5,673,998

5,507,670

166,328

3.0

%

Stockholders' Equity

Common stock

$

837

$

891

$

(54

)

-6.1

%

Paid-in capital

722,871

787,394

(64,523

)

-8.2

%

Retained earnings

387,911

366,679

21,232

5.8

%

Unearned ESOP shares

(28,699

)

(30,644

)

1,945

-6.3

%

Accumulated other comprehensive income, net

1,257

2,839

(1,582

)

-55.7

%

Total stockholders' equity

1,084,177

1,127,159

(42,982

)

-3.8

%

Total liabilities and stockholders' equity

$

6,758,175

$

6,634,829

$

123,346

1.9

%

Consolidated capital ratios

Equity to assets

16.04

%

16.99

%

-0.95

%

Tangible equity to tangible assets

13.29

%

14.19

%

-0.90

%

Share data

Outstanding shares

83,663

89,126

(5,463

)

-6.1

%

Book value per share

$

12.96

$

12.65

$

0.31

2.5

%

Tangible book value per share (1)

$

10.39

$

10.22

$

0.17

1.7

%

(1)

Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.

Summary Income Statement

For the year ended

Variance

(Dollars and Shares in Thousands,

June 30,

June 30,

Variance

or Change

Except Per Share Data, Unaudited)

2020

2019

or Change

Pct.

Interest income

Loans

$

187,003

$

192,386

$

(5,383

)

-2.8

%

Taxable investment securities

39,321

37,213

2,108

5.7

%

Tax-exempt investment securities

2,393

2,839

(446

)

-15.7

%

Other interest-earning assets

4,491

4,895

(404

)

-8.3

%

Total Interest Income

233,208

237,333

(4,125

)

-1.7

%

Interest expense

Deposits

58,852

52,511

6,341

12.1

%

Borrowings

25,002

29,509

(4,507

)

-15.3

%

Total interest expense

83,854

82,020

1,834

2.2

%

Net interest income

149,354

155,313

(5,959

)

-3.8

%

Provision for loan losses

4,197

3,556

641

18.0

%

Net interest income after provision for

  loan losses

145,157

151,757

(6,600

)

-4.3

%

Non-interest income

Fees and service charges

6,647

5,445

1,202

22.1

%

Gain (loss) on sale and call of securities

2,250

(323

)

2,573

796.6

%

Gain on sale of loans

3,186

580

2,606

449.3

%

Loss on sale of real estate owned

(28

)

(11

)

(17

)

154.5

%

Income from bank owned life insurance

6,225

6,339

(114

)

-1.8

%

Electronic banking fees and charges

1,245

1,050

195

18.6

%

Miscellaneous

194

475

(281

)

-59.2

%

Total non-interest income

19,719

13,555

6,164

45.5

%

Non-interest expense

Salaries and employee benefits

62,015

63,029

(1,014

)

-1.6

%

Net occupancy expense of premises

11,424

11,220

204

1.8

%

Equipment and systems

11,755

12,273

(518

)

-4.2

%

Advertising and marketing

2,788

3,051

(263

)

-8.6

%

Federal deposit insurance premium

286

1,779

(1,493

)

-83.9

%

Directors' compensation

3,079

3,044

35

1.1

%

Merger-related expenses

951

-

951

0.0

%

Debt extinguishment expenses

2,156

-