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Acquisition of Clifton Bancorp Inc. (Tables)
 12 Months Ended
Jun. 30, 2019
Business Combinations [Abstract]  
Summary of Assets Acquired and Liabilities Assumed Through Merger at Fair Value

The Company recorded the assets acquired and liabilities assumed through the merger at fair value as summarized in the following table:

 

 

As Recorded

by Clifton

 

 

Fair Value Adjustments

 

 

As Recorded

at Acquisition

 

 

(In Thousands)

 

Cash and cash equivalents

$

36,585

 

 

$

-

 

 

$

36,585

 

Investment securities

 

332,183

 

 

 

(5,270

)

(a)

 

326,913

 

Loans receivable

 

1,191,748

 

 

 

(74,927

)

(b)

 

1,116,821

 

Allowance for loan losses

 

(8,025

)

 

 

8,025

 

(c)

 

-

 

Premises and equipment

 

8,066

 

 

 

3,556

 

(d)

 

11,622

 

FHLB stock

 

20,357

 

 

 

-

 

 

 

20,357

 

Accrued interest receivable

 

4,142

 

 

 

-

 

 

 

4,142

 

Bank owned life insurance

 

63,231

 

 

 

-

 

 

 

63,231

 

Deferred income taxes, net

 

6,837

 

 

 

16,149

 

(e)

 

22,986

 

Core deposit and other intangibles

 

-

 

 

 

6,367

 

(f)

 

6,367

 

Other real estate owned

 

163

 

 

 

(23

)

(g)

 

140

 

Other assets

 

1,438

 

 

 

133

 

(h)

 

1,571

 

Total assets acquired

$

1,656,725

 

 

$

(45,990

)

 

$

1,610,735

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

944,988

 

 

$

4,801

 

(i)

$

949,789

 

FHLB borrowings

 

421,400

 

 

 

(7,268

)

(j)

 

414,132

 

Advance payments by borrowers for taxes

 

9,777

 

 

 

-

 

 

 

9,777

 

Other liabilities

 

5,288

 

 

 

112

 

(k)

 

5,400

 

Total liabilities assumed

$

1,381,453

 

 

$

(2,355

)

 

$

1,379,098

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets acquired

 

 

 

 

 

 

 

 

$

231,637

 

Purchase price

 

 

 

 

 

 

 

 

 

333,941

 

Goodwill recorded in Merger

 

 

 

 

 

 

 

 

$

102,304

 

 

Explanation of certain fair value related adjustments:

 

(a)

Represents the fair value adjustments on investment securities.

(b)

Represents the fair value adjustments on the net book value of loans, which includes an interest rate mark and credit mark adjustment and the write-off of deferred fees/costs and premiums.

(c)

Represents the elimination of Clifton’s allowance for loan losses.

(d)

Represents the fair value adjustments to reflect the fair value of land and buildings and premises and equipment, which will be amortized on a straight-line basis over the estimated useful lives of the individual assets.

(e)

Represents an adjustment to net deferred tax assets resulting from the fair value adjustments related to the acquired assets, liabilities assumed and identifiable intangible assets recorded.

(f)

Represents the intangible assets recorded to reflect the fair value of core deposits. The core deposit asset was recorded as an identifiable intangible asset and will be amortized on an accelerated basis over the estimated average life of the deposit base.

(g)

Represents an adjustment to reduce the carrying value of other real estate owned to fair value, less costs to sell.

(h)

Represents an adjustment to other assets acquired.

(i)

Represents fair value adjustments on time deposits, which will be treated as a reduction of interest expense over the remaining term of the time deposits.

(j)

Represents the fair value adjustments on FHLB borrowings, which will be treated as an increase to interest expense over the life of the borrowings.

(k)

Represents an adjustment to other liabilities assumed.
Summary of Unaudited Supplemental Pro Forma Information

The unaudited supplemental pro forma information for years ended June 30, 2018 and 2017 set forth below reflects adjustments related to (a) purchase accounting fair value adjustments; (b) amortization of core deposit and other intangibles; and (c) adjustments to interest income and expense due to amortization of premiums and accretion of discounts. Direct merger-related expenses incurred in the year ended June 30, 2018 are assumed to have occurred prior to July 1, 2017. Furthermore, the unaudited supplemental pro forma information does not reflect management’s estimate of any revenue enhancement opportunities or anticipated potential cost savings for periods that include data as of April 2, 2018 or earlier.

 

 

Unaudited

 

 

Supplemental Pro Forma Information

 

 

Years Ended June 30,

 

 

2018

 

 

2017

 

 

(In Thousands, Except Per Share Data)

 

Net interest income

$

169,094

 

 

$

146,426

 

Non-interest income

 

15,683

 

 

 

13,262

 

Non-interest expense

 

113,816

 

 

 

103,957

 

Net income available to common stockholders

 

40,216

 

 

 

31,631

 

Pro forma earnings per common share from continuing operations:

 

 

 

 

 

 

 

Basic

$

0.37

 

 

$

0.29

 

Diluted

$

0.37

 

 

$

0.29