FAIRFIELD, N.J., Jan. 30, 2018 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ:KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), today reported net income for the quarter ended December 31, 2017 of $1.3 million, or $0.02 per basic and diluted share. The results represent a decrease in net income of $3.9 million compared to net income of $5.2 million, or $0.07 per basic and diluted share, for the quarter ended September 30, 2017.
As discussed in greater detail below, the decrease in net income primarily reflected the impact of federal income tax reform that was codified through the passage of the Tax Cuts and Jobs Act (the “Act”) on December 22, 2017. The decrease in net income also reflected the recognition of certain merger-related expenses related to the Company’s proposed acquisition of Clifton Bancorp, Inc. (“CSBK”), the holding company for Clifton Savings Bank (“Clifton”).
The Act permanently reduced the Company’s federal income tax rate from 35% to 21% while also including other provisions that altered the deductibility of certain recurring expenses recognized by the Company. While, collectively, the provisions of the Act are expected to benefit the Company’s future earnings, it resulted in a $3.5 million net reduction in the carrying value of the Company’s deferred income tax assets and liabilities with an equal and offsetting charge to income tax expense during the three months ended December 31, 2017. The $3.5 million charge to income tax expense resulted from a $4.9 million charge to reflect the reduced carrying value of the Company’s net deferred tax asset attributable to timing differences in the recognition of certain income and expense items for financial statement reporting purposes versus that recognized for income tax reporting purposes. That charge was partially offset by a $1.4 million reduction in the net deferred income tax liability primarily attributable to the net unrealized gains and losses on the Company’s interest rate derivatives and available for sale securities portfolios.
The net charge of $3.5 million attributable to the changes in the carrying value of deferred income tax items was partially offset by a $769,000 reduction in current-year income tax expense attributable to the noted reduction in the Company’s income tax rate. For the current “transition” year ending June 30, 2018, the Company’s statutory federal income tax rate has been reduced to 28%, reflecting effective statutory rates of 35% and 21% for the first and second halves of the year, respectively. For the fiscal year ending June 30, 2019 and thereafter, the Company’s statutory federal income tax rate will be reduced to 21%.
As noted above, the decrease in net income between linked periods also reflects the Company’s recognition of $1.2 million of merger-related expenses related to its proposed acquisition of CSBK. The Company estimates that net income was adversely impacted by approximately $1.0 million for merger-related expenses recognized during the three months ended December 31, 2017 due to their limited income tax deductibility. The proposed CSBK acquisition was announced on November 1, 2017, whereby the Company entered into a definitive agreement pursuant to which it will acquire CSBK in an all-stock transaction. Under the terms of the agreement, each outstanding share of CSBK common stock will be exchanged for 1.191 shares of KRNY common stock.
Excluding the impacts on net income arising from federal income tax reform and merger-related expenses discussed above, the Company’s net income would have been $5.0 million or $0.06 per basic and diluted share for the three months ended December 31, 2017.
Overview
The Company continued to execute strategies during the second quarter of fiscal 2018 intended to grow and diversify its balance sheet while increasing its core 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 highlights for the quarter:
As highlighted below, the noted balance sheet growth, reinvestment and reallocation achievements helped to offset the adverse effects of an increase in market interest rates and a flattening yield curve on the Company’s net interest margin:
The level of the Company’s charge offs and provision for loan losses continued to reflect strong asset quality metrics:
The strategies executed by the Company during the quarter ended December 31, 2017 continued to strengthen and diversify its sources of non-interest income, as highlighted below:
In addition to the items noted above, fees and service charges increased by $148,000 to $1.4 million for the quarter ended December 31, 2017 from $1.3 million for the quarter ended September 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.
Collectively, the factors noted above contributed to the decrease in net income for the quarter ended December 31, 2017 compared to the prior quarter ended September 30, 2017. The decrease in net income had an unfavorable impact on the Company’s earnings-based performance ratios as highlighted below:
The Company continued to execute key capital management strategies during the second quarter of fiscal 2018 to further support shareholder value:
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, 2017 compared to those for the prior quarter ended September 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.
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
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. | |||||||||||||
December 31, | September 30, | |||||||||||||||
2017 | 2017 | |||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 50,685 | $ | 38,823 | $ | 11,862 | 30.6 | |||||||||
Securities available for sale | 637,671 | 636,600 | 1,071 | 0.2 | ||||||||||||
Securities held to maturity | 471,452 | 482,926 | (11,474 | ) | (2.4 | ) | ||||||||||
Loans held-for-sale | 3,490 | 3,808 | (318 | ) | (8.4 | ) | ||||||||||
Loans receivable, including yield adjustments | 3,291,516 | 3,260,328 | 31,188 | 1.0 | ||||||||||||
Less allowance for loan losses | (30,066 | ) | (29,445 | ) | (621 | ) | 2.1 | |||||||||
Net loans receivable | 3,261,450 | 3,230,883 | 30,567 | 0.9 | ||||||||||||
Premises and equipment | 41,829 | 40,132 | 1,697 | 4.2 | ||||||||||||
Federal Home Loan Bank stock | 39,113 | 39,115 | (2 | ) | (0.0 | ) | ||||||||||
Accrued interest receivable | 13,524 | 13,268 | 256 | 1.9 | ||||||||||||
Goodwill | 108,591 | 108,591 | - | - | ||||||||||||
Bank owned life insurance | 183,754 | 182,489 | 1,265 | 0.7 | ||||||||||||
Deferred income taxes, net | 6,941 | 13,230 | (6,289 | ) | (47.5 | ) | ||||||||||
Other assets | 25,347 | 18,285 | 7,062 | 38.6 | ||||||||||||
Total assets | $ | 4,843,847 | $ | 4,808,150 | $ | 35,697 | 0.7 | |||||||||
Liabilities | ||||||||||||||||
Deposits | $ | 3,033,766 | $ | 2,953,268 | $ | 80,498 | 2.7 | |||||||||
Borrowings | 798,864 | 808,554 | (9,690 | ) | (1.2 | ) | ||||||||||
Advance payments by borrowers for taxes | 8,511 | 9,787 | (1,276 | ) | (13.0 | ) | ||||||||||
Other liabilities | 13,433 | 22,308 | (8,875 | ) | (39.8 | ) | ||||||||||
Total liabilities | 3,854,574 | 3,793,917 | 60,657 | 1.6 | ||||||||||||
Stockholders' Equity | ||||||||||||||||
Common stock | 795 | 815 | (20 | ) | (2.5 | ) | ||||||||||
Paid-in capital | 662,093 | 690,204 | (28,111 | ) | (4.1 | ) | ||||||||||
Retained earnings | 353,536 | 354,123 | (587 | ) | (0.2 | ) | ||||||||||
Unearned ESOP shares | (33,563 | ) | (34,049 | ) | 486 | (1.4 | ) | |||||||||
Accumulated other comprehensive income, net | 6,412 | 3,140 | 3,272 | 104.2 | ||||||||||||
Total stockholders' equity | 989,273 | 1,014,233 | (24,960 | ) | (2.5 | ) | ||||||||||
Total liabilities and stockholders' equity | $ | 4,843,847 | $ | 4,808,150 | $ | 35,697 | 0.7 | |||||||||
Consolidated capital ratios | ||||||||||||||||
Equity to assets | 20.42 | % | 21.09 | % | -0.67 | % | ||||||||||
Tangible equity to tangible assets | 18.59 | % | 19.27 | % | -0.68 | % | ||||||||||
Share data | ||||||||||||||||
Outstanding shares | 79,527 | 81,548 | (2,021 | ) | (2.5 | ) | ||||||||||
Equity per share | $ | 12.44 | $ | 12.44 | $ | - | - | |||||||||
Tangible equity per share (1) | $ | 11.07 | $ | 11.10 | $ | (0.03 | ) | (0.3 | ) | |||||||
(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. | |||||||||||||
December 31, | September 30, | |||||||||||||||
2017 | 2017 | |||||||||||||||
Interest income | ||||||||||||||||
Loans | $ | 30,610 | $ | 30,473 | $ | 137 | 0.4 | |||||||||
Mortgage-backed securities | 2,848 | 2,896 | (48 | ) | (1.7 | ) | ||||||||||
Debt securities: | ||||||||||||||||
Taxable | 3,229 | 2,960 | 269 | 9.1 | ||||||||||||
Tax-exempt | 641 | 621 | 20 | 3.2 | ||||||||||||
Other interest-earning assets | 704 | 642 | 62 | 9.7 | ||||||||||||
Total Interest Income | 38,032 | 37,592 | 440 | 1.2 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 6,649 | 6,219 | 430 | 6.9 | ||||||||||||
Borrowings | 4,548 | 4,563 | (15 | ) | (0.3 | ) | ||||||||||
Total interest expense | 11,197 | 10,782 | 415 | 3.8 | ||||||||||||
Net interest income | 26,835 | 26,810 | 25 | 0.1 | ||||||||||||
Provision for loan losses | 936 | 630 | 306 | 48.6 | ||||||||||||
Net interest income after provision for loan losses | 25,899 | 26,180 | (281 | ) | (1.1 | ) | ||||||||||
Non-interest income | ||||||||||||||||
Fees and service charges | 1,409 | 1,261 | 148 | 11.7 | ||||||||||||
Gain on sale of loans | 200 | 331 | (131 | ) | (39.6 | ) | ||||||||||
Gain (loss) on sale of real estate owned | 23 | (109 | ) | 132 | (121.1 | ) | ||||||||||
Income from bank owned life insurance | 1,264 | 1,267 | (3 | ) | (0.2 | ) | ||||||||||
Electronic banking fees and charges | 302 | 278 | 24 | 8.6 | ||||||||||||
Miscellaneous | 65 | 66 | (1 | ) | (1.5 | ) | ||||||||||
Total non-interest income | 3,263 | 3,094 | 169 | 5.5 | ||||||||||||
Non-interest expense | ||||||||||||||||
Salaries and employee benefits | 12,926 | 12,867 | 59 | 0.5 | ||||||||||||
Net occupancy expense of premises | 2,122 | 1,981 | 141 | 7.1 | ||||||||||||
Equipment and systems | 2,193 | 2,190 | 3 | 0.1 | ||||||||||||
Advertising and marketing | 748 | 710 | 38 | 5.4 | ||||||||||||
Federal deposit insurance premium | 343 | 360 | (17 | ) | (4.7 | ) | ||||||||||
Directors' compensation | 688 | 689 | (1 | ) | (0.1 | ) | ||||||||||
Merger-related expenses | 1,193 | - | 1,193 | - | ||||||||||||
Miscellaneous | 2,551 | 2,489 | 62 | 2.5 | ||||||||||||
Total non-interest expense | 22,764 | 21,286 | 1,478 | 6.9 | ||||||||||||
Income before income taxes | 6,398 | 7,988 | (1,590 | ) | (19.9 | ) | ||||||||||
Income taxes | 5,129 | 2,756 | 2,373 | 86.1 | ||||||||||||
Net income | $ | 1,269 | $ | 5,232 | $ | (3,963 | ) | (75.7 | ) | |||||||
Net income per common share (EPS) | ||||||||||||||||
Basic | $ | 0.02 | $ | 0.07 | $ | (0.05 | ) | |||||||||
Diluted | $ | 0.02 | $ | 0.07 | $ | (0.05 | ) | |||||||||
Dividends declared (1) | ||||||||||||||||
Cash dividends declared per common share | $ | 0.03 | $ | 0.15 | $ | (0.12 | ) | |||||||||
Cash dividends declared | $ | 1,856 | $ | 12,148 | $ | (10,292 | ) | |||||||||
Dividend payout ratio | 146.3 | % | 232.2 | % | -85.93 | % | ||||||||||
Weighted average number of common shares outstanding | ||||||||||||||||
Basic | 77,174 | 79,649 | (2,475 | ) | ||||||||||||
Diluted | 77,239 | 79,708 | (2,469 | ) | ||||||||||||
(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. | ||||||||||||||||
Average Balance Sheet Data (Dollars in Thousands, Unaudited) | For the three months ended | Variance or Change | Variance or Change Pct. | |||||||||||||
December 31, | September 30, | |||||||||||||||
2017 | 2017 | |||||||||||||||
Assets | ||||||||||||||||
Interest-earning assets: | ||||||||||||||||
Loans receivable, including loans held for sale | $ | 3,255,862 | $ | 3,257,465 | $ | (1,603 | ) | (0.0 | ) | |||||||
Mortgage-backed securities | 501,081 | 511,931 | (10,850 | ) | (2.1 | ) | ||||||||||
Debt securities: | - | |||||||||||||||
Tax-exempt | 126,214 | 122,685 | 3,529 | 2.9 | ||||||||||||
Taxable | 495,316 | 489,252 | 6,064 | 1.2 | ||||||||||||
Total debt securities | 621,530 | 611,937 | 9,593 | 1.6 | ||||||||||||
Other interest-earning assets | 82,539 | 79,920 | 2,619 | 3.3 | ||||||||||||
Total interest-earning assets | 4,461,012 | 4,461,253 | (241 | ) | (0.0 | ) | ||||||||||
Non-interest-earning assets | 364,015 | 361,259 | 2,756 | 0.8 | ||||||||||||
Total assets | $ | 4,825,027 | $ | 4,822,512 | $ | 2,515 | 0.1 | |||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
Interest-bearing demand | $ | 854,400 | $ | 858,291 | $ | (3,891 | ) | (0.5 | ) | |||||||
Savings and club | 518,542 | 522,715 | (4,173 | ) | (0.8 | ) | ||||||||||
Certificates of deposit | 1,337,560 | 1,285,882 | 51,678 | 4.0 | ||||||||||||
Total interest-bearing deposits | 2,710,502 | 2,666,888 | 43,614 | 1.6 | ||||||||||||
Borrowings: | ||||||||||||||||
Federal Home Loan Bank Advances | 777,460 | 778,104 | (644 | ) | (0.1 | ) | ||||||||||
Other borrowings | 30,606 | 32,041 | (1,435 | ) | (4.5 | ) | ||||||||||
Total borrowings | 808,066 | 810,145 | (2,079 | ) | (0.3 | ) | ||||||||||
Total interest-bearing liabilities | 3,518,568 | 3,477,033 | 41,535 | 1.2 | ||||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||
Non-interest-bearing deposits | 277,236 | 274,858 | 2,378 | 0.9 | ||||||||||||
Other non-interest-bearing liabilities | 24,396 | 29,754 | (5,358 | ) | (18.0 | ) | ||||||||||
Total non-interest-bearing liabilities | 301,632 | 304,612 | (2,980 | ) | (1.0 | ) | ||||||||||
Total liabilities | 3,820,200 | 3,781,645 | 38,555 | 1.0 | ||||||||||||
Stockholders' equity | 1,004,827 | 1,040,867 | (36,040 | ) | (3.5 | ) | ||||||||||
Total liabilities and stockholders' equity | $ | 4,825,027 | $ | 4,822,512 | $ | 2,515 | 0.1 | |||||||||
Average interest-earning assets to average interest-bearing liabilities | 126.78 | % | 128.31 | % | -1.53 | % | -1.2 | |||||||||
Performance Ratio Highlights | For the three months ended | Variance or Change | ||||||||||||||
December 31, | September 30, | |||||||||||||||
2017 | 2017 | |||||||||||||||
Average yield on interest-earning assets: | ||||||||||||||||
Loans receivable, including loans held for sale | 3.76 | % | 3.74 | % | 0.02 | % | ||||||||||
Mortgage-backed securities | 2.27 | % | 2.26 | % | 0.01 | % | ||||||||||
Debt securities: | ||||||||||||||||
Tax-exempt (1) | 2.03 | % | 2.03 | % | 0.00 | % | ||||||||||
Taxable | 2.61 | % | 2.42 | % | 0.19 | % | ||||||||||
Total debt securities | 2.49 | % | 2.34 | % | 0.15 | % | ||||||||||
Other interest-earning assets | 3.42 | % | 3.21 | % | 0.21 | % | ||||||||||
Total interest-earning assets | 3.41 | % | 3.37 | % | 0.04 | % | ||||||||||
Average cost of interest-bearing liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
Interest-bearing demand | 0.80 | % | 0.76 | % | 0.04 | % | ||||||||||
Savings and club | 0.12 | % | 0.12 | % | 0.00 | % | ||||||||||
Certificates of deposit | 1.43 | % | 1.38 | % | 0.05 | % | ||||||||||
Total interest-bearing deposits | 0.98 | % | 0.93 | % | 0.05 | % | ||||||||||
Borrowings: | ||||||||||||||||
Federal Home Loan Bank Advances | 2.33 | % | 2.33 | % | 0.00 | % | ||||||||||
Other borrowings | 0.27 | % | 0.27 | % | 0.00 | % | ||||||||||
Total borrowings | 2.25 | % | 2.25 | % | 0.00 | % | ||||||||||
Total interest-bearing liabilities | 1.27 | % | 1.24 | % | 0.03 | % | ||||||||||
Interest rate spread (2) | 2.14 | % | 2.13 | % | 0.01 | % | ||||||||||
Net interest margin (3) | 2.41 | % | 2.40 | % | 0.01 | % | ||||||||||
Non-interest income to average assets (annualized) | 0.27 | % | 0.26 | % | 0.01 | % | ||||||||||
Non-interest expense to average assets (annualized) | 1.89 | % | 1.77 | % | 0.12 | % | ||||||||||
Efficiency ratio (4) | 75.63 | % | 71.18 | % | 4.45 | % | ||||||||||
Return on average assets (annualized) | 0.11 | % | 0.43 | % | -0.32 | % | ||||||||||
Return on average equity (annualized) | 0.51 | % | 2.01 | % | -1.50 | % | ||||||||||
(1) The yield on tax-exempt 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 (Dollars and Shares in Thousands, Except Per Share Data, Unaudited) | At | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 50,685 | $ | 38,823 | $ | 78,237 | $ | 170,591 | $ | 37,032 | ||||||
Securities available for sale | 637,671 | 636,600 | 613,760 | 614,948 | 671,281 | |||||||||||
Securities held to maturity | 471,452 | 482,926 | 493,321 | 501,987 | 517,819 | |||||||||||
Loans held-for-sale | 3,490 | 3,808 | 4,692 | 744 | 6,686 | |||||||||||
Loans receivable, including yield adjustments | 3,291,516 | 3,260,328 | 3,245,261 | 3,122,628 | 2,973,931 | |||||||||||
Less allowance for loan losses | (30,066 | ) | (29,445 | ) | (29,286 | ) | (27,614 | ) | (26,060 | ) | ||||||
Net loans receivable | 3,261,450 | 3,230,883 | 3,215,975 | 3,095,014 | 2,947,871 | |||||||||||
Premises and equipment | 41,829 | 40,132 | 39,585 | 38,904 | 38,341 | |||||||||||
Federal Home Loan Bank stock | 39,113 | 39,115 | 39,958 | 39,474 | 34,525 | |||||||||||
Accrued interest receivable | 13,524 | 13,268 | 12,493 | 12,320 | 11,809 | |||||||||||
Goodwill | 108,591 | 108,591 | 108,591 | 108,591 | 108,591 | |||||||||||
Bank owned life insurance | 183,754 | 182,489 | 181,223 | 179,935 | 178,656 | |||||||||||
Deferred income taxes, net | 6,941 | 13,230 | 15,454 | 14,318 | 16,098 | |||||||||||
Other assets | 25,347 | 18,285 | 14,838 | 19,416 | 16,599 | |||||||||||
Total assets | $ | 4,843,847 | $ | 4,808,150 | $ | 4,818,127 | $ | 4,796,242 | $ | 4,585,308 | ||||||
Liabilities | ||||||||||||||||
Deposits | $ | 3,033,766 | $ | 2,953,268 | $ | 2,930,127 | $ | 2,853,263 | $ | 2,746,017 | ||||||
Borrowings | 798,864 | 808,554 | 806,228 | 825,260 | 701,849 | |||||||||||
Advance payments by borrowers for taxes | 8,511 | 9,787 | 8,711 | 8,059 | 7,618 | |||||||||||
Other liabilities | 13,433 | 22,308 | 15,880 | 15,650 | 15,172 | |||||||||||
Total liabilities | 3,854,574 | 3,793,917 | 3,760,946 | 3,702,232 | 3,470,656 | |||||||||||
Stockholders' Equity | ||||||||||||||||
Common stock | 795 | 815 | 844 | 873 | 892 | |||||||||||
Paid-in capital | 662,093 | 690,204 | 728,790 | 768,373 | 795,773 | |||||||||||
Retained earnings | 353,536 | 354,123 | 361,039 | 359,083 | 357,540 | |||||||||||
Unearned ESOP shares | (33,563 | ) | (34,049 | ) | (34,536 | ) | (35,022 | ) | (35,508 | ) | ||||||
Accumulated other comprehensive income (loss), net | 6,412 | 3,140 | 1,044 | 703 | (4,045 | ) | ||||||||||
Total stockholders' equity | 989,273 | 1,014,233 | 1,057,181 | 1,094,010 | 1,114,652 | |||||||||||
Total liabilities and stockholders' equity | $ | 4,843,847 | $ | 4,808,150 | $ | 4,818,127 | $ | 4,796,242 | $ | 4,585,308 | ||||||
Consolidated capital ratios | ||||||||||||||||
Equity to assets | 20.42 | % | 21.09 | % | 21.94 | % | 22.81 | % | 24.31 | % | ||||||
Tangible equity to tangible assets | 18.59 | % | 19.27 | % | 20.14 | % | 21.02 | % | 22.47 | % | ||||||
Share data | ||||||||||||||||
Outstanding shares | 79,527 | 81,548 | 84,351 | 87,256 | 89,176 | |||||||||||
Equity per share | $ | 12.44 | $ | 12.44 | $ | 12.53 | $ | 12.54 | $ | 12.50 | ||||||
Tangible equity per share (1) | $ | 11.07 | $ | 11.10 | $ | 11.24 | $ | 11.29 | $ | 11.28 | ||||||
(1) Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. | ||||||||||||||||
Supplemental Balance Sheet Highlights (Dollars in Thousands, Unaudited) | At | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||
Cash and cash equivalents | ||||||||||||||||
Cash and due from depository institutions | $ | 17,899 | $ | 17,972 | $ | 18,889 | $ | 17,429 | $ | 17,541 | ||||||
Interest-bearing deposits in other banks | 32,786 | 20,851 | 59,348 | 153,162 | 19,491 | |||||||||||
Total cash and cash equivalents | $ | 50,685 | $ | 38,823 | $ | 78,237 | $ | 170,591 | $ | 37,032 | ||||||
Securities available for sale | ||||||||||||||||
Debt securities: | ||||||||||||||||
U.S. agency securities | $ | 4,810 | $ | 5,063 | $ | 5,316 | $ | 5,622 | $ | 5,809 | ||||||
Municipal and state obligations | 27,428 | 27,725 | 27,740 | 27,259 | 27,090 | |||||||||||
Asset-backed securities | 169,484 | 163,615 | 162,429 | 150,805 | 121,445 | |||||||||||
Collateralized loan obligations | 133,341 | 128,383 | 98,154 | 104,811 | 98,447 | |||||||||||
Corporate bonds | 142,397 | 142,489 | 142,318 | 141,134 | 138,564 | |||||||||||
Trust preferred securities | 8,494 | 8,544 | 8,540 | 8,248 | 8,101 | |||||||||||
Debt securities available for sale | 485,954 | 475,819 | 444,497 | 437,879 | 399,456 | |||||||||||
Mortgage-backed securities: | ||||||||||||||||
Collateralized mortgage obligations | 27,187 | 28,790 | 30,536 | 31,941 | 52,333 | |||||||||||
Residential pass-through securities | 116,496 | 123,868 | 130,550 | 136,926 | 211,258 | |||||||||||
Commercial pass-through securities | 8,034 | 8,123 | 8,177 | 8,202 | 8,234 | |||||||||||
Mortgage-backed securities | 151,717 | 160,781 | 169,263 | 177,069 | 271,825 | |||||||||||
Total securities available for sale | $ | 637,671 | $ | 636,600 | $ | 613,760 | $ | 614,948 | $ | 671,281 | ||||||
Securities held to maturity | ||||||||||||||||
Debt securities: | ||||||||||||||||
U.S. agency securities | $ | - | $ | 35,000 | $ | 35,000 | $ | 35,000 | $ | 34,999 | ||||||
Municipal and state obligations | 100,671 | 95,954 | 94,713 | 91,038 | 87,682 | |||||||||||
Subordinated debt | 25,000 | 15,000 | 15,000 | 15,000 | 15,000 | |||||||||||
Debt securities held to maturity | 125,671 | 145,954 | 144,713 | 141,038 | 137,681 | |||||||||||
Mortgage-backed securities: | ||||||||||||||||
Collateralized mortgage obligations | 35,861 | 16,600 | 17,854 | 19,193 | 20,543 | |||||||||||
Residential pass-through securities | 160,487 | 169,257 | 178,813 | 186,248 | 200,402 | |||||||||||
Commercial pass-through securities | 149,433 | 151,115 | 151,941 | 155,508 | 159,193 | |||||||||||
Mortgage-backed securities | 345,781 | 336,972 | 348,608 | 360,949 | 380,138 | |||||||||||
Total securities held to maturity | $ | 471,452 | $ | 482,926 | $ | 493,321 | $ | 501,987 | $ | 517,819 | ||||||
Total securities | $ | 1,109,123 | $ | 1,119,526 | $ | 1,107,081 | $ | 1,116,935 | $ | 1,189,100 | ||||||
Supplemental Balance Sheet Highlights (Dollars in Thousands, Unaudited) | At | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||
Loan portfolio composition: | ||||||||||||||||
Residential first mortgage loans | $ | 574,322 | $ | 559,593 | $ | 567,323 | $ | 566,665 | $ | 562,466 | ||||||
Home equity loans and lines of credit | 80,961 | 80,746 | 82,822 | 82,412 | 83,305 | |||||||||||
Residential mortgage loans | 655,283 | 640,339 | 650,145 | 649,077 | 645,771 | |||||||||||
Multifamily mortgage loans | 1,438,386 | 1,427,840 | 1,412,575 | 1,371,339 | 1,295,207 | |||||||||||
Nonresidential and mixed use mortgage loans | 1,069,254 | 1,085,983 | 1,085,064 | 995,782 | 932,616 | |||||||||||
Commercial mortgage loans | 2,507,640 | 2,513,823 | 2,497,639 | 2,367,121 | 2,227,823 | |||||||||||
Commercial business loans | 92,442 | 81,676 | 74,471 | 83,754 | 75,640 | |||||||||||
Construction loans | 22,205 | 8,320 | 3,815 | 1,494 | 927 | |||||||||||
Account loans | 2,996 | 2,800 | 2,863 | 2,860 | 2,980 | |||||||||||
Other consumer loans | 8,951 | 10,988 | 13,520 | 15,313 | 17,501 | |||||||||||
Consumer loans | 11,947 | 13,788 | 16,383 | 18,173 | 20,481 | |||||||||||
Total loans, excluding yield adjs | 3,289,517 | 3,257,946 | 3,242,453 | 3,119,619 | 2,970,642 | |||||||||||
Unamortized yield adjustments | 1,999 | 2,382 | 2,808 | 3,009 | 3,289 | |||||||||||
Loans receivable, including yield adjs | 3,291,516 | 3,260,328 | 3,245,261 | 3,122,628 | 2,973,931 | |||||||||||
Less allowance for loan losses | (30,066 | ) | (29,445 | ) | (29,286 | ) | (27,614 | ) | (26,060 | ) | ||||||
Net loans receivable | $ | 3,261,450 | $ | 3,230,883 | $ | 3,215,975 | $ | 3,095,014 | $ | 2,947,871 | ||||||
Loan portfolio allocation: | ||||||||||||||||
Residential first mortgage loans | 17.5 | % | 17.2 | % | 17.5 | % | 18.2 | % | 18.9 | % | ||||||
Home equity loans and lines of credit | 2.5 | % | 2.5 | % | 2.6 | % | 2.6 | % | 2.8 | % | ||||||
Residential mortgage loans | 20.0 | % | 19.7 | % | 20.1 | % | 20.8 | % | 21.7 | % | ||||||
Multifamily mortgage loans | 43.7 | % | 43.8 | % | 43.6 | % | 44.0 | % | 43.6 | % | ||||||
Nonresidential and mixed use mortgage loans | 32.5 | % | 33.3 | % | 33.5 | % | 31.9 | % | 31.4 | % | ||||||
Commercial mortgage loans | 76.2 | % | 77.2 | % | 77.0 | % | 75.9 | % | 75.0 | % | ||||||
Commercial business loans | 2.8 | % | 2.5 | % | 2.3 | % | 2.7 | % | 2.5 | % | ||||||
Construction loans | 0.7 | % | 0.3 | % | 0.1 | % | 0.0 | % | 0.0 | % | ||||||
Account loans | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||
Other consumer loans | 0.2 | % | 0.3 | % | 0.4 | % | 0.5 | % | 0.6 | % | ||||||
Consumer loans | 0.3 | % | 0.4 | % | 0.5 | % | 0.6 | % | 0.7 | % | ||||||
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 | $ | 31 | $ | 105 | $ | 74 | $ | 65 | $ | 92 | ||||||
Nonaccrual loans | 16,315 | 18,006 | 18,798 | 20,950 | 21,473 | |||||||||||
Total nonperforming loans | 16,346 | 18,111 | 18,872 | 21,015 | 21,565 | |||||||||||
Other real estate owned | 1,693 | 2,424 | 1,632 | 1,668 | 2,037 | |||||||||||
Total nonperforming assets | $ | 18,039 | $ | 20,535 | $ | 20,504 | $ | 22,683 | $ | 23,602 | ||||||
Nonperforming loans (% total loans) | 0.50 | % | 0.56 | % | 0.58 | % | 0.67 | % | 0.72 | % | ||||||
Nonperforming assets (% total assets) | 0.37 | % | 0.43 | % | 0.43 | % | 0.47 | % | 0.51 | % | ||||||
Allowance for loan losses (ALLL): | ||||||||||||||||
ALLL to total loans | 0.91 | % | 0.90 | % | 0.90 | % | 0.88 | % | 0.88 | % | ||||||
ALLL to nonperforming loans | 183.93 | % | 162.58 | % | 155.18 | % | 131.40 | % | 120.84 | % | ||||||
Net charge offs (recoveries) | $ | 315 | $ | 471 | $ | (483 | ) | $ | 254 | $ | 198 | |||||
Average net charge off (recovery) rate (annualized) | 0.04 | % | 0.06 | % | -0.06 | % | 0.03 | % | 0.03 | % | ||||||
Supplemental Balance Sheet Highlights (Dollars in Thousands, Unaudited) | At | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||
Funding by type: | ||||||||||||||||
Deposits | ||||||||||||||||
Non-interest-bearing deposits | $ | 275,065 | $ | 279,263 | $ | 267,412 | $ | 255,939 | $ | 240,367 | ||||||
Interest-bearing demand | 879,732 | 856,122 | 847,663 | 798,203 | 768,556 | |||||||||||
Savings and club | 517,400 | 519,040 | 523,984 | 524,002 | 519,257 | |||||||||||
Certificates of deposit | 1,361,569 | 1,298,843 | 1,291,068 | 1,275,119 | 1,217,837 | |||||||||||
Interest-bearing deposits | 2,758,701 | 2,674,005 | 2,662,715 | 2,597,324 | 2,505,650 | |||||||||||
Total deposits | 3,033,766 | 2,953,268 | 2,930,127 | 2,853,263 | 2,746,017 | |||||||||||
Borrowings: | ||||||||||||||||
Federal Home Loan Bank advances | 775,649 | 775,673 | 775,696 | 775,719 | 665,742 | |||||||||||
Depositor sweep accounts | 23,215 | 32,881 | 30,532 | 49,541 | 36,107 | |||||||||||
Total borrowings | 798,864 | 808,554 | 806,228 | 825,260 | 701,849 | |||||||||||
Total funding | $ | 3,832,630 | $ | 3,761,822 | $ | 3,736,355 | $ | 3,678,523 | $ | 3,447,866 | ||||||
Loans as a % of deposits | 107.6 | % | 109.5 | % | 109.9 | % | 108.5 | % | 107.6 | % | ||||||
Deposits as a % of total funding | 79.2 | % | 78.5 | % | 78.4 | % | 77.6 | % | 79.6 | % | ||||||
Borrowings as a % of total funding | 20.8 | % | 21.5 | % | 21.6 | % | 22.4 | % | 20.4 | % | ||||||
Funding by source: | ||||||||||||||||
Retail funding | ||||||||||||||||
Non-interest-bearing deposits | $ | 275,065 | $ | 279,263 | $ | 267,412 | $ | 255,939 | $ | 240,367 | ||||||
Interest-bearing demand | 657,696 | 633,778 | 625,061 | 568,865 | 544,487 | |||||||||||
Savings and club | 517,400 | 519,040 | 523,984 | 524,002 | 519,257 | |||||||||||
Certificates of deposit | 1,210,616 | 1,175,407 | 1,168,010 | 1,152,025 | 1,113,073 | |||||||||||
Total retail deposits | 2,660,777 | 2,607,488 | 2,584,467 | 2,500,831 | 2,417,184 | |||||||||||
Depositor sweep accounts | 23,215 | 32,881 | 30,532 | 49,541 | 36,107 | |||||||||||
Total retail funding | 2,683,992 | 2,640,369 | 2,614,999 | 2,550,372 | 2,453,291 | |||||||||||
Wholesale funding: | ||||||||||||||||
Interest-bearing demand | $ | 222,036 | $ | 222,344 | $ | 222,602 | $ | 229,338 | $ | 224,069 | ||||||
Certificates of deposit (listing service) | 93,853 | 101,791 | 101,430 | 101,432 | 96,516 | |||||||||||
Certificates of deposit (brokered) | 57,100 | 21,645 | 21,628 | 21,662 | 8,248 | |||||||||||
Total wholesale deposits | 372,989 | 345,780 | 345,660 | 352,432 | 328,833 | |||||||||||
FHLB Advances | 775,649 | 775,673 | 775,696 | 775,719 | 665,742 | |||||||||||
Total wholesale funding | 1,148,638 | 1,121,453 | 1,121,356 | 1,128,151 | 994,575 | |||||||||||
Total funding | $ | 3,832,630 | $ | 3,761,822 | $ | 3,736,355 | $ | 3,678,523 | $ | 3,447,866 | ||||||
Retail funding as a % of total funding | 70.0 | % | 70.2 | % | 70.0 | % | 69.3 | % | 71.2 | % | ||||||
Wholesale funding as a % of total funding | 30.0 | % | 29.8 | % | 30.0 | % | 30.7 | % | 28.8 | % | ||||||
Summary Income Statement (Dollars and Shares in Thousands, Except Per Share Data, Unaudited) | For the three months ended | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||
Interest income | ||||||||||||||||
Loans | $ | 30,610 | $ | 30,473 | $ | 29,842 | $ | 28,235 | $ | 27,407 | ||||||
Mortgage-backed securities | 2,848 | 2,896 | 3,063 | 3,222 | 3,779 | |||||||||||
Debt securities: | ||||||||||||||||
Taxable | 3,229 | 2,960 | 2,868 | 2,488 | 2,146 | |||||||||||
Tax-exempt | 641 | 621 | 605 | 582 | 562 | |||||||||||
Other interest-earning assets | 704 | 642 | 586 | 481 | 421 | |||||||||||
Total interest income | 38,032 | 37,592 | 36,964 | 35,008 | 34,315 | |||||||||||
Interest expense | ||||||||||||||||
Deposits | 6,649 | 6,219 | 5,909 | 5,420 | 5,410 | |||||||||||
Borrowings | 4,548 | 4,563 | 4,325 | 3,381 | 3,289 | |||||||||||
Total interest expense | 11,197 | 10,782 | 10,234 | 8,801 | 8,699 | |||||||||||
Net interest income | 26,835 | 26,810 | 26,730 | 26,207 | 25,616 | |||||||||||
Provision for loan losses | 936 | 630 | 1,188 | 1,809 | 1,255 | |||||||||||
Net interest income after provision for loan losses | 25,899 | 26,180 | 25,542 | 24,398 | 24,361 | |||||||||||
Non-interest income | ||||||||||||||||
Fees and service charges | 1,409 | 1,261 | 839 | 498 | 1,289 | |||||||||||
(Loss) gain on sale and call of securities | - | - | - | (22 | ) | 21 | ||||||||||
Gain on sale of loans | 200 | 331 | 531 | 245 | 459 | |||||||||||
Gain (loss) on sale of real estate owned | 23 | (109 | ) | 3 | (106 | ) | 12 | |||||||||
Income from bank owned life insurance | 1,264 | 1,267 | 1,288 | 1,279 | 1,321 | |||||||||||
Electronic banking fees and charges | 302 | 278 | 287 | 240 | 270 | |||||||||||
Miscellaneous | 65 | 66 | 72 | 119 | 74 | |||||||||||
Total non-interest income | 3,263 | 3,094 | 3,020 | 2,253 | 3,446 | |||||||||||
Non-interest expense | ||||||||||||||||
Salaries and employee benefits | 12,926 | 12,867 | 12,887 | 12,430 | 11,592 | |||||||||||
Net occupancy expense of premises | 2,122 | 1,981 | 2,013 | 2,088 | 1,976 | |||||||||||
Equipment and systems | 2,193 | 2,190 | 2,204 | 2,068 | 2,030 | |||||||||||
Advertising and marketing | 748 | 710 | 937 | 753 | 387 | |||||||||||
Federal deposit insurance premium | 343 | 360 | 352 | 338 | 339 | |||||||||||
Directors' compensation | 688 | 689 | 689 | 689 | 379 | |||||||||||
Merger-related expenses | 1,193 | - | - | - | - | |||||||||||
Miscellaneous | 2,551 | 2,489 | 2,969 | 2,668 | 2,670 | |||||||||||
Total non-interest expense | 22,764 | 21,286 | 22,051 | 21,034 | 19,373 | |||||||||||
Income before income taxes | 6,398 | 7,988 | 6,511 | 5,617 | 8,434 | |||||||||||
Income taxes | 5,129 | 2,756 | 2,107 | 1,549 | 2,970 | |||||||||||
Net income | $ | 1,269 | $ | 5,232 | $ | 4,404 | $ | 4,068 | $ | 5,464 | ||||||
Net income per common share (EPS) | ||||||||||||||||
Basic | $ | 0.02 | $ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.06 | ||||||
Diluted | $ | 0.02 | $ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.06 | ||||||
Dividends declared (1) | ||||||||||||||||
Cash dividends declared per common share | $ | 0.03 | $ | 0.15 | $ | 0.03 | $ | 0.03 | $ | 0.02 | ||||||
Cash dividends declared | $ | 1,856 | $ | 12,148 | $ | 2,448 | $ | 2,525 | $ | 1,687 | ||||||
Dividend payout ratio | 146.3 | % | 232.2 | % | 55.6 | % | 62.1 | % | 30.9 | % | ||||||
Weighted average number of common shares outstanding | ||||||||||||||||
Basic | 77,174 | 79,649 | 82,372 | 84,542 | 85,174 | |||||||||||
Diluted | 77,239 | 79,708 | 82,429 | 84,624 | 85,258 | |||||||||||
(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. | ||||||||||||||||
Average Balance Sheet Data (Dollars in Thousands, Unaudited) | For the three months ended | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||
Assets | ||||||||||||||||
Interest-earning assets: | ||||||||||||||||
Loans receivable, including loans held for sale | $ | 3,255,862 | $ | 3,257,465 | $ | 3,200,968 | $ | 3,029,151 | $ | 2,899,794 | ||||||
Mortgage-backed securities | 501,081 | 511,931 | 532,621 | 582,591 | 673,569 | |||||||||||
Debt securities: | ||||||||||||||||
Tax-exempt | 126,214 | 122,685 | 119,957 | 116,479 | 112,221 | |||||||||||
Taxable | 495,316 | 489,252 | 476,499 | 441,124 | 419,966 | |||||||||||
Total debt securities | 621,530 | 611,937 | 596,456 | 557,603 | 532,187 | |||||||||||
Other interest-earning assets | 82,539 | 79,920 | 118,349 | 61,336 | 71,072 | |||||||||||
Total interest-earning assets | 4,461,012 | 4,461,253 | 4,448,394 | 4,230,681 | 4,176,622 | |||||||||||
Non-interest-earning assets | 364,015 | 361,259 | 358,791 | 352,419 | 351,458 | |||||||||||
Total assets | $ | 4,825,027 | $ | 4,822,512 | $ | 4,807,185 | $ | 4,583,100 | $ | 4,528,080 | ||||||
Liabilities and Stockholders' Equity | ||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
Interest-bearing demand | $ | 854,400 | $ | 858,291 | $ | 813,148 | $ | 756,520 | $ | 761,765 | ||||||
Savings and club | 518,542 | 522,715 | 523,798 | 520,572 | 518,225 | |||||||||||
Certificates of deposit | 1,337,560 | 1,285,882 | 1,289,504 | 1,242,757 | 1,224,592 | |||||||||||
Total interest-bearing deposits | 2,710,502 | 2,666,888 | 2,626,450 | 2,519,849 | 2,504,582 | |||||||||||
Borrowings: | ||||||||||||||||
Federal Home Loan Bank Advances | 777,460 | 778,104 | 775,703 | 643,504 | 594,238 | |||||||||||
Other borrowings | 30,606 | 32,041 | 40,064 | 44,940 | 35,273 | |||||||||||
Total borrowings | 808,066 | 810,145 | 815,767 | 688,444 | 629,511 | |||||||||||
Total interest-bearing liabilities | 3,518,568 | 3,477,033 | 3,442,217 | 3,208,293 | 3,134,093 | |||||||||||
Non-interest-bearing liabilities: | ||||||||||||||||
Non-interest-bearing deposits | 277,236 | 274,858 | 262,499 | 246,449 | 245,928 | |||||||||||
Other non-interest-bearing liabilities | 24,396 | 29,754 | 25,112 | 25,028 | 31,781 | |||||||||||
Total non-interest-bearing liabilities | 301,632 | 304,612 | 287,611 | 271,477 | 277,709 | |||||||||||
Total liabilities | 3,820,200 | 3,781,645 | 3,729,828 | 3,479,770 | 3,411,802 | |||||||||||
Stockholders' equity | 1,004,827 | 1,040,867 | 1,077,357 | 1,103,330 | 1,116,278 | |||||||||||
Total liabilities and stockholders' equity | $ | 4,825,027 | $ | 4,822,512 | $ | 4,807,185 | $ | 4,583,100 | $ | 4,528,080 | ||||||
Average interest-earning assets to average interest-bearing liabilities | 126.78 | % | 128.31 | % | 129.23 | % | 131.87 | % | 133.26 | % | ||||||
Performance Ratio Highlights | For the three months ended | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||
Average yield on interest-earning assets: | ||||||||||||||||
Loans receivable, including loans held for sale | 3.76 | % | 3.74 | % | 3.73 | % | 3.73 | % | 3.78 | % | ||||||
Mortgage-backed securities | 2.27 | % | 2.26 | % | 2.30 | % | 2.21 | % | 2.24 | % | ||||||
Debt securities: | ||||||||||||||||
Tax-exempt (1) | 2.03 | % | 2.03 | % | 2.02 | % | 2.00 | % | 2.00 | % | ||||||
Taxable | 2.61 | % | 2.42 | % | 2.41 | % | 2.26 | % | 2.04 | % | ||||||
Total debt securities | 2.49 | % | 2.34 | % | 2.33 | % | 2.20 | % | 2.04 | % | ||||||
Other interest-earning assets | 3.42 | % | 3.21 | % | 1.98 | % | 3.13 | % | 2.37 | % | ||||||
Total interest-earning assets | 3.41 | % | 3.37 | % | 3.32 | % | 3.31 | % | 3.29 | % | ||||||
Average cost of interest-bearing liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
Interest-bearing demand | 0.80 | % | 0.76 | % | 0.71 | % | 0.65 | % | 0.62 | % | ||||||
Savings and club | 0.12 | % | 0.12 | % | 0.12 | % | 0.12 | % | 0.12 | % | ||||||
Certificates of deposit | 1.43 | % | 1.38 | % | 1.34 | % | 1.30 | % | 1.33 | % | ||||||
Total interest-bearing deposits | 0.98 | % | 0.93 | % | 0.90 | % | 0.86 | % | 0.86 | % | ||||||
Borrowings: | ||||||||||||||||
Federal Home Loan Bank Advances | 2.33 | % | 2.33 | % | 2.21 | % | 2.08 | % | 2.20 | % | ||||||
Other borrowings | 0.27 | % | 0.27 | % | 0.27 | % | 0.35 | % | 0.29 | % | ||||||
Total borrowings | 2.25 | % | 2.25 | % | 2.12 | % | 1.96 | % | 2.09 | % | ||||||
Total interest-bearing liabilities | 1.27 | % | 1.24 | % | 1.19 | % | 1.10 | % | 1.11 | % | ||||||
Interest rate spread (2) | 2.14 | % | 2.13 | % | 2.13 | % | 2.21 | % | 2.18 | % | ||||||
Net interest margin (3) | 2.41 | % | 2.40 | % | 2.40 | % | 2.48 | % | 2.45 | % | ||||||
Non-interest income to average assets (annualized) | 0.27 | % | 0.26 | % | 0.25 | % | 0.20 | % | 0.30 | % | ||||||
Non-interest expense to average assets (annualized) | 1.89 | % | 1.77 | % | 1.83 | % | 1.84 | % | 1.71 | % | ||||||
Efficiency ratio (4) | 75.63 | % | 71.18 | % | 74.12 | % | 73.91 | % | 66.66 | % | ||||||
Return on average assets (annualized) | 0.11 | % | 0.43 | % | 0.37 | % | 0.36 | % | 0.48 | % | ||||||
Return on average equity (annualized) | 0.51 | % | 2.01 | % | 1.64 | % | 1.47 | % | 1.96 | % | ||||||
(1) The yield on tax-exempt 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 (Dollars in Thousands, Except Per Share Data, Unaudited) | For the three months ended | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||
Adjusted Net Income | ||||||||||||||||
Net income (GAAP) | $ | 1,269 | $ | 5,232 | $ | 4,404 | $ | 4,068 | $ | 5,464 | ||||||
Effect to adjust for: | ||||||||||||||||
Merger-related expenses | 1,193 | - | - | - | - | |||||||||||
Income tax benefit from merger-related expenses | (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 current year income tax rate (from 35% to 28%) | (769 | ) | - | - | - | - | ||||||||||
Adjusted net income (non-GAAP) | $ | 5,014 | $ | 5,232 | $ | 4,404 | $ | 4,068 | $ | 5,464 | ||||||
Adjusted Net Income per Common Share (EPS) | ||||||||||||||||
Net income per common share Basic (GAAP) | $ | 0.02 | $ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.06 | ||||||
Effect to adjust for: | ||||||||||||||||
Merger-related expenses | 0.02 | - | - | - | - | |||||||||||
Income tax benefit from merger-related expenses | (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 current year income tax rate (from 35% to 28%) | (0.01 | ) | - | - | - | - | ||||||||||
Adjusted net income per common share Basic (non-GAAP) | $ | 0.06 | $ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.06 | ||||||
Adjusted Net Income per Common Share (EPS) | ||||||||||||||||
Net income per common share Diluted (GAAP) | $ | 0.02 | $ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.06 | ||||||
Effect to adjust for: | ||||||||||||||||
Merger-related expenses | 0.02 | - | - | - | - | |||||||||||
Income tax benefit from merger-related expenses | (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 current year income tax rate (from 35% to 28%) | (0.01 | ) | - | - | - | - | ||||||||||
Adjusted net income per common share Diluted (non-GAAP) | $ | 0.06 | $ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.06 | ||||||
Reconciliation of GAAP to Non-GAAP (Unaudited) | For the three months ended | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||
Adjusted Non-Interest Expense Ratio | ||||||||||||||||
Non-interest expense to average assets (GAAP) | 1.89 | % | 1.77 | % | 1.83 | % | 1.84 | % | 1.71 | % | ||||||
Effect to adjust for: | ||||||||||||||||
Merger-related expenses | -0.10 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Adjusted non-interest expense ratio (non-GAAP) | 1.79 | % | 1.77 | % | 1.83 | % | 1.84 | % | 1.71 | % | ||||||
Adjusted Efficiency Ratio | ||||||||||||||||
Non-interest expense / (Net interest income + non-interest income) (GAAP) | 75.6 | % | 71.2 | % | 74.1 | % | 73.9 | % | 66.7 | % | ||||||
Effect to adjust for: | ||||||||||||||||
Merger-related expenses | -3.9 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Adjusted efficiency ratio (non-GAAP) | 71.7 | % | 71.2 | % | 74.1 | % | 73.9 | % | 66.7 | % | ||||||
Adjusted Return on Average Assets | ||||||||||||||||
Return on average assets (GAAP) | 0.11 | % | 0.43 | % | 0.37 | % | 0.36 | % | 0.48 | % | ||||||
Effect to adjust for: | ||||||||||||||||
Merger-related expenses | 0.09 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Income tax benefit from merger-related expenses | -0.01 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Income tax expense for write-down of net deferred tax asset | 0.40 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Income tax benefit for write-down of net deferred tax liability | -0.11 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Income tax benefit for reduction in current year income tax rate (from 35% to 28%) | -0.06 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Adjusted return on average assets (non-GAAP) | 0.42 | % | 0.43 | % | 0.37 | % | 0.36 | % | 0.48 | % | ||||||
Adjusted Return on Average Equity | ||||||||||||||||
Return on average equity (GAAP) | 0.51 | % | 2.01 | % | 1.64 | % | 1.47 | % | 1.96 | % | ||||||
Effect to adjust for: | ||||||||||||||||
Merger-related expenses | 0.48 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Income tax benefit from merger-related expenses | -0.07 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Income tax expense for write-down of net deferred tax asset | 1.94 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Income tax benefit for write-down of net deferred tax liability | -0.55 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Income tax benefit for reduction in current year income tax rate (from 35% to 28%) | -0.31 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Adjusted return on average equity (non-GAAP) | 2.00 | % | 2.01 | % | 1.64 | % | 1.47 | % | 1.96 | % | ||||||
We use cookies to tailor your experience, measure site performance and present relevant offers and advertisements. By clicking ‘Accept’ or any content on this site, you agree that cookies can be placed on your browser. You can view our privacy policy to learn more.
If you would like to get more data, alerts and access to Real Vision videos, join us as an Insider Tracking Advantage Ultra member