EX-99.1 2 krny-ex991_6.htm EX-99.1 krny-ex991_6.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

April 29, 2021

 

For further information contact:

Craig L. Montanaro, President and Chief Executive Officer, or

Keith Suchodolski, Executive Vice President and Chief Financial Officer

Kearny Financial Corp.

(973) 244-4500

 

 

KEARNY FINANCIAL CORP. REPORTS FISCAL 2021 THIRD QUARTER RESULTS

 

Fairfield, N.J., April 29, 2021 – Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported net income for the quarter ended March 31, 2021 of $16.4 million, or $0.20 per diluted share, compared to $16.9 million, or $0.20 per diluted share, for the quarter ended December 31, 2020.

 

Craig L. Montanaro, President and Chief Executive Officer, commented, “This quarter’s performance was highlighted by double-digit margin expansion largely resulting from a 22 basis point decrease in the cost of our interest-bearing liabilities. The success we have had in shifting our funding mix, controlling operating expenses and building valuable long-term lending and deposit relationships serves us well today and into the future.”

 

With regard to the current credit environment, Mr. Montanaro further noted, “Despite an increase of $4.2 million in reserves on individually evaluated loans, largely attributable to two non-performing commercial real estate loans, asset quality remains solid. Our fortress-like balance sheet, comprised of significant levels of excess capital and a robust allowance for credit losses, positions us to withstand the ongoing economic impact of the pandemic while allowing us to take advantage of strategic capital deployment opportunities as they may arise.”

Balance Sheet

 

•

Deposits increased by $61.8 million to $5.37 billion at March 31, 2021 from $5.31 billion at December 31, 2020, reflecting growth of $227.8 million, or 6.8%, in core non-maturity deposits.

 

•

Loans receivable decreased by $30.4 million to $4.80 billion at March 31, 2021 from $4.83 billion at December 31, 2020.  Included in the net decrease for the period was a reduction of $18.3 million in Paycheck Protection Program (“PPP”) loan balances.

 

•

Investment securities increased to $1.81 billion, or 24.5% of total assets, at March 31, 2021 from $1.73 billion at December 31, 2020, while borrowings remained relatively flat, increasing to $865.8 million, or 11.8% of total assets, from $865.7 million, or 11.8% of total assets, for those same comparative periods.

Earnings

Net Interest Income and Net Interest Margin

 

•

Net interest income increased by $3.1 million to $47.6 million for the quarter ended March 31, 2021 from $44.6 million for the quarter ended December 31, 2020. This increase was the result of a $3.2 million reduction in interest expense that was partially offset by an $80,000 decline in interest income. Included in net interest income was purchase accounting accretion of $4.8 million and $3.7 million, for the quarters ended March 31, 2021 and December 31, 2020, respectively.

 

•

Net interest margin increased by 19 basis points to 2.83% for the quarter ended March 31, 2021 from 2.64% for the quarter ended December 31, 2020. For those same comparative periods, yield on interest-earning assets increased by one basis point to 3.46% while the cost of interest-bearing liabilities decreased by 22 basis points to 0.75%.

1

 

Non-Interest Income

 

•

Fees and service charges totaled $1.3 million for the quarter ended March 31, 2021 compared to $1.9 million for the quarter ended December 31, 2020. This decrease was largely attributable to a decrease of $488,000 in loan pre-payment penalty income to $871,000 for the quarter ended March 31, 2021.

 

•

Gain on sale of loans totaled $943,000 for the quarter ended March 31, 2021 compared to $2.4 million for the quarter ended December 31, 2020. This decrease was largely attributable to the strategic decision to retain a greater percentage of originated loans within the portfolio, compared to the prior quarter.

 

•

Gain on sale and call of securities was $18,000 for the quarter ended March 31, 2021 compared to $813,000 for the quarter ended December 31, 2020. This decrease was largely attributable to a gain recorded in the prior comparative period in connection with a previously disclosed wholesale restructuring transaction.

 

•

Included in other non-interest income was a non-recurring gain of $837,000 attributable to the sale of two properties which previously served as Kearny Bank retail branch locations and were sold in connection with branch consolidation activities.

Non-Interest Expense

 

•

Non-interest expense decreased by $694,000 to $29.8 million for the quarter ended March 31, 2021 compared to $30.5 million for the quarter ended December 31, 2020. The decrease was largely attributable to $796,000 in debt extinguishment expense recognized in the prior comparative period with no such expense recognized in the current period.

 

•

Included in other non-interest expense for the quarter ended March 31, 2021 was an asset impairment charge of $375,000 related to the consolidation and closure of one additional branch location.

 

•

The efficiency and non-interest expense ratios were 56.15% and 1.62%, respectively, for the quarter ended March 31, 2021 as compared to 59.01% and 1.65%, respectively, for the quarter ended December 31, 2020.

Income Taxes

 

•

Income tax expense totaled $5.7 million for the quarter ended March 31, 2021 compared to $5.6 million for the quarter ended December 31, 2020, resulting in effective tax rates of 25.9% and 24.9%, respectively.

Performance Highlights

 

•

Return on average assets was 0.89% for the quarter ended March 31, 2021 as compared to 0.92% for the quarter ended December 31, 2020.

 

•

Return on average equity was 6.07% for the quarters ended March 31, 2021 and December 31, 2020. Return on average tangible equity was 7.57% for the quarter ended March 31, 2021 as compared to 7.52% for the quarter ended December 31, 2020.

Asset Quality

 

•

The balance of non-performing assets remained relatively stable at $71.6 million, or 0.97% of total assets, at March 31, 2021 compared $71.7 million, or 0.98% of total assets, at December 31, 2020.

 

•

Based on Section 4013 of the CARES Act, the Consolidated Appropriations Act, 2021 and related guidance promulgated by federal banking regulators, qualifying loan modifications, including short-term payment deferrals, are not considered to be troubled debt restructurings. As of March 31, 2021, the Company had active payment deferrals on 32 loans totaling $52.9 million, representing 1.10% of total loans.

2

 

 

•

Net charge offs totaled $750,000 for the quarter ended March 31, 2021 compared to $109,000 for the quarter ended December 31, 2020, reflecting annualized net charge off rates of 0.06% and 0.01% for the those same comparative periods. Net charge offs for the quarter were largely attributable to one Small Business Administration 7a loan totaling $675,000.

 

•

Provision for credit losses totaled $1.1 million for the quarter ended March 31, 2021 compared to a provision for credit losses reversal of $1.4 million for the quarter ended December 31, 2020. The comparatively higher level of provision primarily reflected an increase in reserves on individually evaluated loans of $4.2 million, partially offset by a release of reserves within the one- to four-family residential segments, reflecting the improving credit risk outlook for that asset class.

 

•

The increase in reserves on individually evaluated loans, noted above, was largely attributable to two non-performing commercial real estate loans, with principal balances totaling $9.8 million, secured by properties located in New York City.

 

•

The Allowance for Credit Losses (“ACL”) increased to $63.8 million at March 31, 2021 from $63.4 million at December 31, 2020, with such balances reflecting an ACL to total loans ratio of 1.32% and 1.30%, respectively, as of those dates.

Liquidity & Capital

 

•

At March 31, 2021, liquid assets included $109.0 million of short-term cash and equivalents supplemented by $1.78 billion of investment securities classified as available for sale. The Company had the capacity to borrow additional funds totaling $615.0 million via unsecured lines of credit and $1.81 billion and $257.0 million, without pledging additional collateral, from the FHLB of New York and Federal Reserve Bank, respectively.

 

•

During the quarter ended March 31, 2021, the Company repurchased 3,026,564 shares of common stock at a cost of $34.9 million, or $11.52 per share.

 

•

For the quarter ended March 31, 2021, book value per share increased by $0.12 to $12.98 while tangible book value per share increased by $0.03 to $10.36.

 

•

At March 31, 2021, the Company’s ratio of tangible equity to tangible assets equaled 11.89%.  At March 31, 2021, the regulatory capital ratios, of both the Company and the Bank were in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.

Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

In addition, the COVID-19 pandemic is having an adverse impact on the Company, its customers and the communities it serves. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened or remain open. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially reopen or remain open, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for credit losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; due to a decline in our stock price or other factors, goodwill may become impaired and be required to be written down; and our cyber security risks are increased as the result of an increase in the number of employees working remotely.

Category: Earnings

3

 

Linked-Quarter Comparative Financial Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Balance Sheet

At

 

 

 

 

Variance

 

(Dollars and Shares in Thousands,

March 31,

 

December 31,

 

Variance

 

or Change

 

Except Per Share Data, Unaudited)

2021

 

2020

 

or Change

 

Pct.

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

108,991

 

$

129,694

 

$

(20,703

)

 

-16.0

%

Securities available for sale

 

1,778,970

 

 

1,695,893

 

 

83,077

 

 

4.9

%

Securities held to maturity

 

27,168

 

 

29,549

 

 

(2,381

)

 

-8.1

%

Loans held-for-sale

 

5,172

 

 

12,601

 

 

(7,429

)

 

-59.0

%

Loans receivable

 

4,798,239

 

 

4,828,634

 

 

(30,395

)

 

-0.6

%

Less allowance for credit losses on loans

 

(63,762

)

 

(63,386

)

 

(376

)

 

0.6

%

Net loans receivable

 

4,734,477

 

 

4,765,248

 

 

(30,771

)

 

-0.6

%

Premises and equipment

 

60,360

 

 

61,181

 

 

(821

)

 

-1.3

%

Federal Home Loan Bank stock

 

45,578

 

 

45,578

 

 

-

 

 

0.0

%

Accrued interest receivable

 

20,562

 

 

19,826

 

 

736

 

 

3.7

%

Goodwill

 

210,895

 

 

210,895

 

 

-

 

 

0.0

%

Core deposit intangible

 

3,888

 

 

4,151

 

 

(263

)

 

-6.3

%

Bank owned life insurance

 

281,765

 

 

280,235

 

 

1,530

 

 

0.5

%

Deferred income taxes, net

 

32,230

 

 

30,846

 

 

1,384

 

 

4.5

%

Other real estate owned

 

178

 

 

178

 

 

-

 

 

0.0

%

Other assets

 

47,760

 

 

49,278

 

 

(1,518

)

 

-3.1

%

Total assets

$

7,357,994

 

$

7,335,153

 

$

22,841

 

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

5,374,452

 

$

5,312,613

 

$

61,839

 

 

1.2

%

Borrowings

 

865,763

 

 

865,651

 

 

112

 

 

0.0

%

Advance payments by borrowers for taxes

 

15,300

 

 

16,100

 

 

(800

)

 

-5.0

%

Other liabilities

 

38,667

 

 

48,448

 

 

(9,781

)

 

-20.2

%

Total liabilities

 

6,294,182

 

 

6,242,812

 

 

51,370

 

 

0.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

820

 

 

849

 

 

(29

)

 

-3.4

%

Paid-in capital

 

691,280

 

 

724,389

 

 

(33,109

)

 

-4.6

%

Retained earnings

 

397,594

 

 

388,376

 

 

9,218

 

 

2.4

%

Unearned ESOP shares

 

(27,239

)

 

(27,726

)

 

487

 

 

-1.8

%

Accumulated other comprehensive income

 

1,357

 

 

6,453

 

 

(5,096

)

 

-79.0

%

Total stockholders' equity

 

1,063,812

 

 

1,092,341

 

 

(28,529

)

 

-2.6

%

Total liabilities and stockholders' equity

$

7,357,994

 

$

7,335,153

 

$

22,841

 

 

0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated capital ratios

 

 

 

 

 

 

 

 

 

 

 

 

Equity to assets

 

14.46

%

 

14.89

%

 

-0.43

%

 

 

 

Tangible equity to tangible assets (1)

 

11.89

%

 

12.32

%

 

-0.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share data

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding shares

 

81,943

 

 

84,938

 

 

(2,995

)

 

-3.5

%

Book value per share

$

12.98

 

$

12.86

 

$

0.12

 

 

0.9

%

Tangible book value per share (2)

$

10.36

 

$

10.33

 

$

0.03

 

 

0.3

%

 

(1)

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

(2)

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

 

4

 

 

Summary Income Statement

For the three months ended

 

 

 

 

Variance

 

(Dollars and Shares in Thousands,

March 31,

 

December 31,

 

Variance

 

or Change

 

Except Per Share Data, Unaudited)

2021

 

2020

 

or Change

 

Pct.

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

49,307

 

$

49,466

 

$

(159

)

 

-0.3

%

Taxable investment securities

 

7,891

 

 

7,707

 

 

184

 

 

2.4

%

Tax-exempt investment securities

 

410

 

 

433

 

 

(23

)

 

-5.3

%

Other interest-earning assets

 

705

 

 

787

 

 

(82

)

 

-10.4

%

Total Interest Income

 

58,313

 

 

58,393

 

 

(80

)

 

-0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

6,670

 

 

8,647

 

 

(1,977

)

 

-22.9

%

Borrowings

 

4,012

 

 

5,193

 

 

(1,181

)

 

-22.7

%

Total interest expense

 

10,682

 

 

13,840

 

 

(3,158

)

 

-22.8

%

Net interest income

 

47,631

 

 

44,553

 

 

3,078

 

 

6.9

%

Provision for (reversal of) credit losses

 

1,126

 

 

(1,365

)

 

2,491

 

 

182.5

%

Net interest income after provision for (reversal of)

credit losses

 

46,505

 

 

45,918

 

 

587

 

 

1.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

1,325

 

 

1,896

 

 

(571

)

 

-30.1

%

Gain on sale and call of securities

 

18

 

 

813

 

 

(795

)

 

-97.8

%

Gain on sale of loans

 

943

 

 

2,378

 

 

(1,435

)

 

-60.3

%

Income from bank owned life insurance

 

1,530

 

 

1,596

 

 

(66

)

 

-4.1

%

Electronic banking fees and charges

 

456

 

 

404

 

 

52

 

 

12.9

%

Other income

 

1,194

 

 

67

 

 

1,127

 

 

1682.1

%

Total non-interest income

 

5,466

 

 

7,154

 

 

(1,688

)

 

-23.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

16,965

 

 

17,081

 

 

(116

)

 

-0.7

%

Net occupancy expense of premises

 

3,433

 

 

3,120

 

 

313

 

 

10.0

%

Equipment and systems

 

3,823

 

 

3,902

 

 

(79

)

 

-2.0

%

Advertising and marketing

 

567

 

 

513

 

 

54

 

 

10.5

%

Federal deposit insurance premium

 

488

 

 

490

 

 

(2

)

 

-0.4

%

Directors' compensation

 

748

 

 

748

 

 

-

 

 

0.0

%

Debt extinguishment expenses

 

-

 

 

796

 

 

(796

)

 

-100.0

%

Other expense

 

3,792

 

 

3,860

 

 

(68

)

 

-1.8

%

Total non-interest expense

 

29,816

 

 

30,510

 

 

(694

)

 

-2.3

%

Income before income taxes

 

22,155

 

 

22,562

 

 

(407

)

 

-1.8

%

Income taxes

 

5,732

 

 

5,614

 

 

118

 

 

2.1

%

Net income

$

16,423

 

$

16,948

 

$

(525

)

 

-3.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share (EPS)

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.20

 

$

0.20

 

$

0.00

 

 

 

 

Diluted

$

0.20

 

$

0.20

 

$

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

$

0.09

 

$

0.08

 

$

0.01

 

 

 

 

Cash dividends declared

$

7,205

 

$

6,706

 

$

499

 

 

 

 

Dividend payout ratio

 

43.9

%

 

39.6

%

 

4.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of  common

shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

80,673

 

 

85,120

 

 

(4,447

)

 

 

 

Diluted

 

80,690

 

 

85,123

 

 

(4,433

)

 

 

 

 

 

5

 

 

For the three months ended

 

 

 

 

Variance

 

Average Balance Sheet Data

March 31,

 

December 31,

 

Variance

 

or Change

 

(Dollars in Thousands, Unaudited)

2021

 

2020

 

or Change

 

Pct.

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable, including loans held for sale

$

4,816,592

 

$

4,871,268

 

$

(54,676

)

 

-1.1

%

Taxable investment securities

 

1,674,223

 

 

1,544,095

 

 

130,128

 

 

8.4

%

Tax-exempt investment securities

 

73,573

 

 

79,044

 

 

(5,471

)

 

-6.9

%

Other interest-earning assets

 

169,291

 

 

266,114

 

 

(96,823

)

 

-36.4

%

Total interest-earning assets

 

6,733,679

 

 

6,760,521

 

 

(26,842

)

 

-0.4

%

Non-interest-earning assets

 

617,440

 

 

632,084

 

 

(14,644

)

 

-2.3

%

Total assets

$

7,351,119

 

$

7,392,605

 

$

(41,486

)

 

-0.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

$

1,831,617

 

$

1,683,222

 

$

148,395

 

 

8.8

%

Savings

 

1,084,981

 

 

1,058,675

 

 

26,306

 

 

2.5

%

Certificates of deposit

 

1,904,234

 

 

1,899,406

 

 

4,828

 

 

0.3

%

Total interest-bearing deposits

 

4,820,832

 

 

4,641,303

 

 

179,529

 

 

3.9

%

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

865,690

 

 

1,057,958

 

 

(192,268

)

 

-18.2

%

Total interest-bearing liabilities

 

5,686,522

 

 

5,699,261

 

 

(12,739

)

 

-0.2

%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

525,018

 

 

502,479

 

 

22,539

 

 

4.5

%

Other non-interest-bearing liabilities

 

57,018

 

 

73,683

 

 

(16,665

)

 

-22.6

%

Total non-interest-bearing liabilities

 

582,036

 

 

576,162

 

 

5,874

 

 

1.0

%

Total liabilities

 

6,268,558

 

 

6,275,423

 

 

(6,865

)

 

-0.1

%

Stockholders' equity

 

1,082,561

 

 

1,117,182

 

 

(34,621

)

 

-3.1

%

Total liabilities and stockholders' equity

$

7,351,119

 

$

7,392,605

 

$

(41,486

)

 

-0.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Average interest-earning assets to average

interest-bearing liabilities

 

118.41

%

 

118.62

%

 

-0.21

%

 

-0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

For the three months ended

 

 

 

 

 

March 31,

 

December 31,

 

Variance

 

Performance Ratio Highlights

2021

 

2020

 

or Change

 

Average yield on interest-earning assets:

 

 

 

 

 

 

 

 

 

Loans receivable, including loans held for sale

 

4.09

%

 

4.06

%

 

0.03

%

Taxable investment securities

 

1.89

%

 

2.00

%

 

-0.11

%

Tax-exempt investment securities (1)

 

2.23

%

 

2.19

%

 

0.04

%

Other interest-earning assets

 

1.67

%

 

1.18

%

 

0.49

%

Total interest-earning assets

 

3.46

%

 

3.45

%

 

0.01

%

 

 

 

 

 

 

 

 

 

 

Average cost of interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Interest-bearing demand

 

0.34

%

 

0.47

%

 

-0.13

%

Savings

 

0.21

%

 

0.33

%

 

-0.12

%

Certificates of deposit

 

0.96

%

 

1.22

%

 

-0.26

%

Total interest-bearing deposits

 

0.55

%

 

0.75

%

 

-0.20

%

Borrowings:

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

1.85

%

 

1.96

%

 

-0.11

%

Total interest-bearing liabilities

 

0.75

%

 

0.97

%

 

-0.22

%

 

 

 

 

 

 

 

 

 

 

Interest rate spread (2)

 

2.71

%

 

2.48

%

 

0.23

%

Net interest margin (3)

 

2.83

%

 

2.64

%

 

0.19

%

 

 

 

 

 

 

 

 

 

 

Non-interest income to average assets

(annualized)

 

0.30

%

 

0.39

%

 

-0.09

%

Non-interest expense to average assets

(annualized)

 

1.62

%

 

1.65

%

 

-0.03

%

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (4)

 

56.15

%

 

59.01

%

 

-2.86

%

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

0.89

%

 

0.92

%

 

-0.03

%

Return on average equity (annualized)

 

6.07

%

 

6.07

%

 

0.00

%

Return on average tangible equity (annualized) (5)

 

7.57

%

 

7.52

%

 

0.05

%

 

(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.

 

7

 

 

Five-Quarter Financial Trend Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Balance Sheet

At

 

(Dollars and Shares in Thousands,

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

Except Per Share Data, Unaudited)

2021

 

2020

 

2020

 

2020

 

2020

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

108,991

 

$

129,694

 

$

145,818

 

$

180,967

 

$

59,452

 

Securities available for sale

 

1,778,970

 

 

1,695,893

 

 

1,508,542

 

 

1,385,703

 

 

1,476,344

 

Securities held to maturity

 

27,168

 

 

29,549

 

 

31,576

 

 

32,556

 

 

34,618

 

Loans held-for-sale

 

5,172

 

 

12,601

 

 

20,170

 

 

20,789

 

 

11,245

 

Loans receivable

 

4,798,239

 

 

4,828,634

 

 

4,954,750

 

 

4,498,397

 

 

4,562,512

 

Less allowance for credit losses on loans

 

(63,762

)

 

(63,386

)

 

(64,860

)

 

(37,327

)

 

(37,191

)

Net loans receivable

 

4,734,477

 

 

4,765,248

 

 

4,889,890

 

 

4,461,070

 

 

4,525,321

 

Premises and equipment

 

60,360

 

 

61,181

 

 

61,808

 

 

57,389

 

 

58,985

 

Federal Home Loan Bank stock

 

45,578

 

 

45,578

 

 

55,118

 

 

58,654

 

 

59,324

 

Accrued interest receivable

 

20,562

 

 

19,826

 

 

20,368

 

 

17,373

 

 

19,036

 

Goodwill

 

210,895

 

 

210,895

 

 

210,895

 

 

210,895

 

 

210,895

 

Core deposit intangible

 

3,888

 

 

4,151

 

 

4,420

 

 

3,995

 

 

4,242

 

Bank owned life insurance

 

281,765

 

 

280,235

 

 

278,639

 

 

262,380

 

 

260,843

 

Deferred income taxes, net

 

32,230

 

 

30,846

 

 

33,319

 

 

25,480

 

 

27,150

 

Other real estate owned

 

178

 

 

178

 

 

178

 

 

178

 

 

178

 

Other assets

 

47,760

 

 

49,278

 

 

49,468

 

 

40,746

 

 

26,200

 

Total assets

$

7,357,994

 

$

7,335,153

 

$

7,310,209

 

$

6,758,175

 

$

6,773,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

5,374,452

 

$

5,312,613

 

$

5,039,912

 

$

4,430,282

 

$

4,253,254

 

Borrowings

 

865,763

 

 

865,651

 

 

1,077,540

 

 

1,173,165

 

 

1,384,025

 

Advance payments by borrowers for taxes

 

15,300

 

 

16,100

 

 

17,008

 

 

16,569

 

 

16,492

 

Other liabilities

 

38,667

 

 

48,448

 

 

51,689

 

 

53,982

 

 

50,390

 

Total liabilities

 

6,294,182

 

 

6,242,812

 

 

6,186,149

 

 

5,673,998

 

 

5,704,161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

820

 

 

849

 

 

895

 

 

837

 

 

837

 

Paid-in capital

 

691,280

 

 

724,389

 

 

769,269

 

 

722,871

 

 

721,474

 

Retained earnings

 

397,594

 

 

388,376

 

 

378,134

 

 

387,911

 

 

380,671

 

Unearned ESOP shares

 

(27,239

)

 

(27,726

)

 

(28,212

)

 

(28,699

)

 

(29,185

)

Accumulated other comprehensive income (loss)

 

1,357

 

 

6,453

 

 

3,974

 

 

1,257

 

 

(4,125

)

Total stockholders' equity

 

1,063,812

 

 

1,092,341

 

 

1,124,060

 

 

1,084,177

 

 

1,069,672

 

Total liabilities and stockholders' equity

$

7,357,994

 

$

7,335,153

 

$

7,310,209

 

$

6,758,175

 

$

6,773,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated capital ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to assets

 

14.46

%

 

14.89

%

 

15.38

%

 

16.04

%

 

15.79

%

Tangible equity to tangible assets (1)

 

11.89

%

 

12.32

%

 

12.81

%

 

13.29

%

 

13.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding shares

 

81,943

 

 

84,938

 

 

89,510

 

 

83,663

 

 

83,664

 

Book value per share

$

12.98

 

$

12.86

 

$

12.56

 

$

12.96

 

$

12.79

 

Tangible book value per share (2)

$

10.36

 

$

10.33

 

$

10.15

 

$

10.39

 

$

10.21

 

 

(1)

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

(2)

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

 

8

 

 

At

 

Supplemental Balance Sheet Highlights

March 31,

 

December 31,

 

  September 30,

 

June 30,

 

March 31,

 

(Dollars in Thousands, Unaudited)

2021

 

2020

 

2020

 

2020

 

2020

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from depository institutions

$

20,502

 

$

23,968

 

$

18,628

 

$

20,391

 

$

20,200

 

Interest-bearing deposits in other banks

 

88,489

 

 

105,726

 

 

127,190

 

 

160,576

 

 

39,252

 

Total cash and cash equivalents

$

108,991

 

$

129,694

 

$

145,818

 

$

180,967

 

$

59,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal and state obligations

$

43,060

 

$

47,763

 

$

50,877

 

$

54,054

 

$

58,151

 

Asset-backed securities

 

250,741

 

 

255,407

 

 

258,801

 

 

172,447

 

 

169,102

 

Collateralized loan obligations

 

169,776

 

 

196,685

 

 

196,398

 

 

193,788

 

 

189,565

 

Corporate bonds

 

173,462

 

 

167,168

 

 

122,276

 

 

143,639

 

 

163,715

 

Trust preferred securities

 

2,881

 

 

2,866

 

 

2,773

 

 

2,627

 

 

2,852

 

Debt securities

 

639,920

 

 

669,889

 

 

631,125

 

 

566,555

 

 

583,385

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized mortgage obligations

 

16,800

 

 

20,510

 

 

25,770

 

 

30,903

 

 

34,671

 

Residential pass-through securities

 

806,655

 

 

705,991

 

 

625,715

 

 

561,954

 

 

607,113

 

Commercial pass-through securities

 

315,595

 

 

299,503

 

 

225,932

 

 

226,291

 

 

251,175

 

Mortgage-backed securities

 

1,139,050

 

 

1,026,004

 

 

877,417

 

 

819,148

 

 

892,959

 

Total securities available for sale

$

1,778,970

 

$

1,695,893

 

$

1,508,542

 

$

1,385,703

 

$

1,476,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal and state obligations

$

27,168

 

$

29,549

 

$

31,576

 

$

32,556

 

$

34,618

 

Total securities held to maturity

$

27,168

 

$

29,549

 

$

31,576

 

$

32,556

 

$

34,618

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities

$

1,806,138

 

$

1,725,442

 

$

1,540,118

 

$

1,418,259

 

$

1,510,962

 

 

9

 

 

At

 

Supplemental Balance Sheet Highlights

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

(Dollars in Thousands, Unaudited)

2021

 

2020

 

2020

 

2020

 

2020

 

Loan portfolio composition:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multi-family

$

2,055,396

 

$

2,076,483

 

$

2,110,300

 

$

2,059,568

 

$

1,879,907

 

Nonresidential

 

1,110,765

 

 

1,123,695

 

 

1,124,330

 

 

960,853

 

 

1,202,652

 

Commercial business

 

183,181

 

 

202,010

 

 

255,888

 

 

138,788

 

 

73,922

 

Construction

 

95,533

 

 

90,398

 

 

79,178

 

 

20,961

 

 

17,880

 

Total commercial loans

 

3,444,875

 

 

3,492,586

 

 

3,569,696

 

 

3,180,170

 

 

3,174,361

 

One- to four-family residential mortgage loans

 

1,323,485

 

 

1,305,351

 

 

1,353,197

 

 

1,273,022

 

 

1,338,099

 

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity loans and lines of credit

 

59,721

 

 

65,298

 

 

71,540

 

 

82,920

 

 

87,909

 

Other consumer loans

 

3,445

 

 

4,123

 

 

4,136

 

 

3,991

 

 

4,604

 

Total consumer loans

 

63,166

 

 

69,421

 

 

75,676

 

 

86,911

 

 

92,513

 

Total loans, excluding yield adjustments

 

4,831,526

 

 

4,867,358

 

 

4,998,569

 

 

4,540,103

 

 

4,604,973

 

Unaccreted yield adjustments

 

(33,287

)

 

(38,724

)

 

(43,819

)

 

(41,706

)

 

(42,461

)

Loans receivable, net of yield adjustments

 

4,798,239

 

 

4,828,634

 

 

4,954,750

 

 

4,498,397

 

 

4,562,512

 

Less allowance for credit losses on loans

 

(63,762

)

 

(63,386

)

 

(64,860

)

 

(37,327

)

 

(37,191

)

Net loans receivable

$

4,734,477

 

$

4,765,248

 

$

4,889,890

 

$

4,461,070

 

$

4,525,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan portfolio allocation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multi-family

 

42.5

%

 

42.7

%

 

42.2

%

 

45.3

%

 

40.8

%

Nonresidential

 

23.0

%

 

23.1

%

 

22.5

%

 

21.2

%

 

26.1

%

Commercial business

 

3.8

%

 

4.2

%

 

5.1

%

 

3.1

%

 

1.6

%

Construction

 

2.0

%

 

1.8

%

 

1.6

%

 

0.4

%

 

0.4

%

Total commercial loans

 

71.3

%

 

71.8

%

 

71.4

%

 

70.0

%

 

68.9

%

One- to four-family residential mortgage loans

 

27.4

%

 

26.8

%

 

27.1

%

 

28.1

%

 

29.1

%

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity loans and lines of credit

 

1.2

%

 

1.3

%

 

1.4

%

 

1.8

%

 

1.9

%

Other consumer loans

 

0.1

%

 

0.1

%

 

0.1

%

 

0.1

%

 

0.1

%

Total consumer loans

 

1.3

%

 

1.4

%

 

1.5

%

 

1.9

%

 

2.0

%

Total loans, excluding yield adjustments

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset quality:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing loans - 90 days and over past due

$

2

 

$

-

 

$

238

 

$

5

 

$

12

 

Nonaccrual loans

 

71,416

 

 

71,472

 

 

44,837

 

 

36,691

 

 

35,384

 

Total nonperforming loans

 

71,418

 

 

71,472

 

 

45,075

 

 

36,696

 

 

35,396

 

Other real estate owned

 

178

 

 

178

 

 

178

 

 

178

 

 

178

 

Total nonperforming assets

$

71,596

 

$

71,650

 

$

45,253

 

$

36,874

 

$

35,574

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans (% total loans)

 

1.49

%

 

1.48

%

 

0.91

%

 

0.82

%

 

0.78

%

Nonperforming assets (% total assets)

 

0.97

%

 

0.98

%

 

0.62

%

 

0.55

%

 

0.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans (ACL):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACL to total loans

 

1.32

%

 

1.30

%

 

1.30

%

 

0.82

%

 

0.81

%

ACL to nonperforming loans

 

89.28

%

 

88.69

%

 

143.89

%

 

101.72

%

 

105.07

%

Net charge offs

$

750

 

$

109

 

$

67

 

$

38

 

$

16

 

Average net charge off rate (annualized)

 

0.06

%

 

0.01

%

 

0.01

%

 

0.00

%

 

0.00

%

 

 

 

10

 

 

At

 

Supplemental Balance Sheet Highlights

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

(Dollars in Thousands, Unaudited)

2021

 

2020

 

2020

 

2020

 

2020

 

Funding by type:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

$

545,746

 

$

518,828

 

$

487,710

 

$

419,138

 

$

321,824

 

Interest-bearing demand

 

1,923,184

 

 

1,752,699

 

 

1,561,135

 

 

1,264,151

 

 

1,134,420

 

Savings

 

1,105,481

 

 

1,075,122

 

 

1,025,245

 

 

906,597

 

 

848,950

 

Certificates of deposit

 

1,800,041

 

 

1,965,964

 

 

1,965,822

 

 

1,840,396

 

 

1,948,060

 

Interest-bearing deposits

 

4,828,706

 

 

4,793,785

 

 

4,552,202

 

 

4,011,144

 

 

3,931,430

 

Total deposits

 

5,374,452

 

 

5,312,613

 

 

5,039,912

 

 

4,430,282

 

 

4,253,254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

865,763

 

 

865,651

 

 

1,077,540

 

 

1,167,429

 

 

1,177,319

 

Overnight borrowings

 

-

 

 

-

 

 

-

 

 

-

 

 

200,000

 

Depositor sweep accounts

 

-

 

 

-

 

 

-

 

 

5,736

 

 

6,706

 

Total borrowings

 

865,763

 

 

865,651

 

 

1,077,540

 

 

1,173,165

 

 

1,384,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total funding

$

6,240,215

 

$

6,178,264

 

$

6,117,452

 

$

5,603,447

 

$

5,637,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans as a % of deposits

 

88.2

%

 

89.9

%

 

97.4

%

 

101.2

%

 

106.7

%

Deposits as a % of total funding

 

86.1

%

 

86.0

%

 

82.4

%

 

79.1

%

 

75.4

%

Borrowings as a % of total funding

 

13.9

%

 

14.0

%

 

17.6

%

 

20.9

%

 

24.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funding by source:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail funding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

$

545,746

 

$

518,828

 

$

487,710

 

$

419,138

 

$

321,824

 

Interest-bearing demand

 

1,923,184

 

 

1,752,699

 

 

1,561,135

 

 

1,264,151

 

 

1,134,420

 

Savings

 

1,105,481

 

 

1,075,122

 

 

1,025,245

 

 

906,597

 

 

848,950

 

Certificates of deposit

 

1,508,494

 

 

1,658,277

 

 

1,775,189

 

 

1,773,257

 

 

1,833,081

 

Total retail deposits

 

5,082,905

 

 

5,004,926

 

 

4,849,279

 

 

4,363,143

 

 

4,138,275

 

Depositor sweep accounts

 

-

 

 

-

 

 

-

 

 

5,736

 

 

6,706

 

Total retail funding

 

5,082,905

 

 

5,004,926

 

 

4,849,279

 

 

4,368,879

 

 

4,144,981

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale funding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit (listing service)

$

32,952

 

$

43,112

 

$

57,251

 

$

35,760

 

$

33,608

 

Certificates of deposit (brokered)

 

258,595

 

 

264,575

 

 

133,382

 

 

31,379

 

 

81,371

 

Total wholesale deposits

 

291,547

 

 

307,687

 

 

190,633

 

 

67,139

 

 

114,979

 

FHLB advances

 

865,763

 

 

865,651

 

 

1,077,540

 

 

1,167,429

 

 

1,177,319

 

Overnight borrowings

 

-

 

 

-

 

 

-

 

 

-

 

 

200,000

 

Total wholesale funding

 

1,157,310

 

 

1,173,338

 

 

1,268,173

 

 

1,234,568

 

 

1,492,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total funding

$

6,240,215

 

$

6,178,264

 

$

6,117,452

 

$

5,603,447

 

$

5,637,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail funding as a % of total funding

 

81.5

%

 

81.0

%

 

79.3

%

 

78.0

%

 

73.5

%

Wholesale funding as a % of total funding

 

18.5

%

 

19.0

%

 

20.7

%

 

22.0

%

 

26.5

%

 

11

 

 

Summary Income Statement

For the three months ended

 

(Dollars and Shares in Thousands,

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

Except Per Share Data, Unaudited)

2021

 

2020

 

2020

 

2020

 

2020

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

49,307

 

$

49,466

 

$

52,180

 

$

46,192

 

$

46,603

 

Taxable investment securities

 

7,891

 

 

7,707

 

 

7,336

 

 

9,769

 

 

10,526

 

Tax-exempt investment securities

 

410

 

 

433

 

 

454

 

 

487

 

 

547

 

Other interest-earning assets

 

705

 

 

787

 

 

914

 

 

903

 

 

1,100

 

Total interest income

 

58,313

 

 

58,393

 

 

60,884

 

 

57,351

 

 

58,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

6,670

 

 

8,647

 

 

11,062

 

 

12,439

 

 

14,768

 

Borrowings

 

4,012

 

 

5,193

 

 

5,660

 

 

4,462

 

 

6,398

 

Total interest expense

 

10,682

 

 

13,840

 

 

16,722

 

 

16,901

 

 

21,166

 

Net interest income

 

47,631

 

 

44,553

 

 

44,162

 

 

40,450

 

 

37,610

 

Provision for (reversal of) credit losses

 

1,126

 

 

(1,365

)

 

4,059

 

 

174

 

 

6,270

 

Net interest income after provision for

(reversal of) credit losses

 

46,505

 

 

45,918

 

 

40,103

 

 

40,276

 

 

31,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

1,325

 

 

1,896

 

 

1,076

 

 

1,696

 

 

1,338

 

Gain (loss) on sale and call of securities

 

18

 

 

813

 

 

(377

)

 

19

 

 

2,234

 

Gain on sale of loans

 

943

 

 

2,378

 

 

1,890

 

 

1,348

 

 

565

 

Income from bank owned life insurance

 

1,530

 

 

1,596

 

 

1,596

 

 

1,537

 

 

1,532

 

Electronic banking fees and charges

 

456

 

 

404

 

 

405

 

 

325

 

 

309

 

Bargain purchase gain

 

-

 

 

-

 

 

3,053

 

 

-

 

 

-

 

Other income

 

1,194

 

 

67

 

 

90

 

 

77

 

 

223

 

Total non-interest income

 

5,466

 

 

7,154

 

 

7,733

 

 

5,002

 

 

6,201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

16,965

 

 

17,081

 

 

16,977

 

 

15,527

 

 

15,537

 

Net occupancy expense of premises

 

3,433

 

 

3,120

 

 

3,122

 

 

2,688

 

 

2,685

 

Equipment and systems

 

3,823

 

 

3,902

 

 

3,570

 

 

2,948

 

 

2,672

 

Advertising and marketing

 

567

 

 

513

 

 

500

 

 

751

 

 

612

 

Federal deposit insurance premium

 

488

 

 

490

 

 

472

 

 

286

 

 

-

 

Directors' compensation

 

748

 

 

748

 

 

748

 

 

769

 

 

771

 

Merger-related expenses

 

-

 

 

-

 

 

4,349

 

 

447

 

 

285

 

Debt extinguishment expenses

 

-

 

 

796

 

 

-

 

 

-

 

 

2,156

 

Other expense

 

3,792

 

 

3,860

 

 

3,835

 

 

3,475

 

 

3,344

 

Total non-interest expense

 

29,816

 

 

30,510

 

 

33,573

 

 

26,891

 

 

28,062

 

Income before income taxes

 

22,155

 

 

22,562

 

 

14,263

 

 

18,387

 

 

9,479

 

Income taxes

 

5,732

 

 

5,614

 

 

2,884

 

 

4,698

 

 

225

 

Net income

$

16,423

 

$

16,948

 

$

11,379

 

$

13,689

 

$

9,254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share (EPS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.20

 

$

0.20

 

$

0.13

 

$

0.17

 

$

0.11

 

Diluted

$

0.20

 

$

0.20

 

$

0.13

 

$

0.17

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

$

0.09

 

$

0.08

 

$

0.08

 

$

0.08

 

$

0.08

 

Cash dividends declared

$

7,205

 

$

6,706

 

$

6,917

 

$

6,449

 

$

6,479

 

Dividend payout ratio

 

43.9

%

 

39.6

%

 

60.8

%

 

47.1

%

 

70.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of  common

shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

80,673

 

 

85,120

 

 

86,008

 

 

80,678

 

 

81,339

 

Diluted

 

80,690

 

 

85,123

 

 

86,009

 

 

80,680

 

 

81,358

 

 

12

 

 

For the three months ended

 

Average Balance Sheet Data

March 31,

 

  December 31,

 

  September 30,

 

June 30,

 

March 31,

 

(Dollars in Thousands, Unaudited)

2021

 

2020

 

2020

 

2020

 

2020

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable, including loans held for sale

$

4,816,592

 

$

4,871,268

 

$

4,958,293

 

$

4,567,229

 

$

4,503,996

 

Taxable investment securities

 

1,674,223

 

 

1,544,095

 

 

1,350,511

 

 

1,369,014

 

 

1,406,973

 

Tax-exempt investment securities

 

73,573

 

 

79,044

 

 

82,603

 

 

89,263

 

 

101,771

 

Other interest-earning assets

 

169,291

 

 

266,114

 

 

247,543

 

 

141,964

 

 

104,241

 

Total interest-earning assets

 

6,733,679

 

 

6,760,521

 

 

6,638,950

 

 

6,167,470

 

 

6,116,981

 

Non-interest-earning assets

 

617,440

 

 

632,084

 

 

624,252

 

 

605,876

 

 

598,335

 

Total assets

$

7,351,119

 

$

7,392,605

 

$

7,263,202

 

$

6,773,346

 

$

6,715,316

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

$

1,831,617

 

$

1,683,222

 

$

1,464,238

 

$

1,189,044

 

$

1,112,080

 

Savings

 

1,084,981

 

 

1,058,675

 

 

1,006,075

 

 

876,580

 

 

838,501

 

Certificates of deposit

 

1,904,234

 

 

1,899,406

 

 

1,988,689

 

 

1,879,039

 

 

2,004,785

 

Total interest-bearing deposits

 

4,820,832

 

 

4,641,303

 

 

4,459,002

 

 

3,944,663

 

 

3,955,366

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

865,690

 

 

1,057,958

 

 

1,130,836

 

 

1,202,522

 

 

1,208,627

 

Other borrowings

 

-

 

 

-

 

 

3,568

 

 

96,770

 

 

87,072

 

Total borrowings

 

865,690

 

 

1,057,958

 

 

1,134,404

 

 

1,299,292

 

 

1,295,699

 

Total interest-bearing liabilities

 

5,686,522

 

 

5,699,261

 

 

5,593,406

 

 

5,243,955

 

 

5,251,065

 

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

525,018

 

 

502,479

 

 

479,141

 

 

380,067

 

 

317,530

 

Other non-interest-bearing liabilities

 

57,018

 

 

73,683

 

 

79,620

 

 

72,007

 

 

55,456

 

Total non-interest-bearing liabilities

 

582,036

 

 

576,162

 

 

558,761

 

 

452,074

 

 

372,986

 

Total liabilities

 

6,268,558

 

 

6,275,423

 

 

6,152,167

 

 

5,696,029

 

 

5,624,051

 

Stockholders' equity

 

1,082,561

 

 

1,117,182

 

 

1,111,035

 

 

1,077,317

 

 

1,091,265

 

Total liabilities and stockholders' equity

$

7,351,119

 

$

7,392,605

 

$

7,263,202

 

$

6,773,346

 

$

6,715,316

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average interest-earning assets to average

interest-bearing liabilities

 

118.41

%

 

118.62

%

 

118.69

%

 

117.61

%

 

116.49

%

 

13

 

 

For the three months ended

 

 

March 31,

 

  December 31,

 

  September 30,

 

June 30,

 

March 31,

 

Performance Ratio Highlights

2021

 

2020

 

2020

 

2020

 

2020

 

Average yield on interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable, including loans held for sale

 

4.09

%

 

4.06

%

 

4.21

%

 

4.05

%

 

4.14

%

Taxable investment securities

 

1.89

%

 

2.00

%

 

2.17

%

 

2.85

%

 

2.99

%

Tax-exempt investment securities (1)

 

2.23

%

 

2.19

%

 

2.20

%

 

2.18

%

 

2.15

%

Other interest-earning assets

 

1.67

%

 

1.18

%

 

1.48

%

 

2.54

%

 

4.22

%

Total interest-earning assets

 

3.46

%

 

3.45

%

 

3.67

%

 

3.72

%

 

3.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average cost of interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

 

0.34

%

 

0.47

%

 

0.60

%

 

0.72

%

 

1.17

%

Savings

 

0.21

%

 

0.33

%

 

0.57

%

 

0.81

%

 

0.85

%

Certificates of deposit

 

0.96

%

 

1.22

%

 

1.50

%

 

1.82

%

 

1.94

%

Total interest-bearing deposits

 

0.55

%

 

0.75

%

 

0.99

%

 

1.26

%

 

1.49

%

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

1.85

%

 

1.96

%

 

2.00

%

 

1.47

%

 

2.03

%

Other borrowings

 

0.00

%

 

0.00

%

 

0.04

%

 

0.13

%

 

1.17

%

Total borrowings

 

1.85

%

 

1.96

%

 

2.00

%

 

1.37

%

 

1.98

%

Total interest-bearing liabilities

 

0.75

%

 

0.97

%

 

1.20

%

 

1.29

%

 

1.61

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread (2)

 

2.71

%

 

2.48

%

 

2.47

%

 

2.43

%

 

2.23

%

Net interest margin (3)

 

2.83

%

 

2.64

%

 

2.66

%

 

2.62

%

 

2.46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income to average assets

(annualized)

 

0.30

%

 

0.39

%

 

0.43

%

 

0.30

%

 

0.37

%

Non-interest expense to average assets

(annualized)

 

1.62

%

 

1.65

%

 

1.85

%

 

1.59

%

 

1.67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (4)

 

56.15

%

 

59.01

%

 

64.69

%

 

59.16

%

 

64.05

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

0.89

%

 

0.92

%

 

0.63

%

 

0.81

%

 

0.55

%

Return on average equity (annualized)

 

6.07

%

 

6.07

%

 

4.10

%

 

5.08

%

 

3.39

%

Return on average tangible equity (annualized) (5)

 

7.57

%

 

7.52

%

 

5.08

%

 

6.35

%

 

4.23

%

 

(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.

 

14

 

 

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures provide additional information which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is included below. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.

 

Reconciliation of GAAP to Non-GAAP

For the three months ended

 

(Dollars in Thousands,

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

Except Per Share Data, Unaudited)

2021

 

2020

 

2020

 

2020

 

2020

 

Adjusted net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

$

16,423

 

$

16,948

 

$

11,379

 

$

13,689

 

$

9,254

 

Non-recurring transactions - net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bargain purchase gain

 

-

 

 

-

 

 

(3,053

)

 

-

 

 

-

 

Provision for credit losses on non-PCD loans

 

-

 

 

-

 

 

3,563

 

 

-

 

 

-

 

Merger-related expenses

 

-

 

 

-

 

 

3,123

 

 

426

 

 

269

 

Branch consolidation expenses

 

264

 

 

243

 

 

-

 

 

-

 

 

-

 

Net effect of sales and calls of securities

 

(13

)

 

(571

)

 

-

 

 

-

 

 

(1,575

)

Debt extinguishment expenses

 

-

 

 

559

 

 

-

 

 

-

 

 

1,520

 

Reversal of income tax valuation allowance

 

-

 

 

(523

)

 

-

 

 

-

 

 

(591

)

Tax benefit arising from adoption of the

CARES Act provisions

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,624

)

Net effect of sales of other assets

 

(587

)

 

-

 

 

-

 

 

-

 

 

-

 

Net income (non-GAAP)

$

16,087

 

$

16,656

 

$

15,012

 

$

14,115

 

$

7,253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of pre-tax, pre-provision net

revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

$

16,423

 

$

16,948

 

$

11,379

 

$

13,689

 

$

9,254

 

Adjustments to net income (GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

5,732

 

 

5,614

 

 

2,884

 

 

4,698

 

 

225

 

Provision for (reversal of) credit losses

 

1,126

 

 

(1,365

)

 

4,059

 

 

174

 

 

6,270

 

Pre-tax, pre-provision net revenue (non-GAAP)

$

23,281

 

$

21,197

 

$

18,322

 

$

18,561

 

$

15,749

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - basic

 

80,673

 

 

85,120

 

 

86,008

 

 

80,678

 

 

81,339

 

Weighted average common shares - diluted

 

80,690

 

 

85,123

 

 

86,009

 

 

80,680

 

 

81,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - basic (GAAP)

$

0.20

 

$

0.20

 

$

0.13

 

$

0.17

 

$

0.11

 

Earnings per share - diluted (GAAP)

$

0.20

 

$

0.20

 

$

0.13

 

$

0.17

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share - basic (non-GAAP)

$

0.20

 

$

0.20

 

$

0.17

 

$

0.17

 

$

0.09

 

Adjusted earnings per share - diluted (non-GAAP)

$

0.20

 

$

0.20

 

$

0.17

 

$

0.17

 

$

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average assets

$

7,351,119

 

$

7,392,605

 

$

7,263,202

 

$

6,773,346

 

$

6,715,316

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (GAAP)

 

0.89

%

 

0.92

%

 

0.63

%

 

0.81

%

 

0.55

%

Adjusted return on average assets (non-GAAP)

 

0.88

%

 

0.90

%

 

0.83

%

 

0.83

%

 

0.43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted return on average equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average equity

$

1,082,561

 

$

1,117,182

 

$

1,111,035

 

$

1,077,317

 

$

1,091,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (GAAP)

 

6.07

%

 

6.07

%

 

4.10

%

 

5.08

%

 

3.39

%

Adjusted return on average equity (non-GAAP)

 

5.94

%

 

5.96

%

 

5.40

%

 

5.24

%

 

2.66

%

 

15

 

 

Reconciliation of GAAP to Non-GAAP

For the three months ended

 

(Dollars in Thousands,

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

Except Per Share Data, Unaudited)

2021

 

2020

 

2020

 

2020

 

2020

 

Adjusted return on average tangible equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average equity

$

1,082,561

 

$

1,117,182

 

$

1,111,035

 

$

1,077,317

 

$

1,091,265

 

Less: average goodwill

 

(210,895

)

 

(210,895

)

 

(210,895

)

 

(210,895

)

 

(210,895

)

Less: average other intangible assets

 

(4,045

)

 

(4,317

)

 

(4,341

)

 

(4,124

)

 

(4,408

)

 

$

867,621

 

$

901,970

 

$

895,799

 

$

862,298

 

$

875,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible equity (non-GAAP)

 

7.57

%

 

7.52

%

 

5.08

%

 

6.35

%

 

4.23

%

Adjusted return on average tangible equity

(non-GAAP)

 

7.42

%

 

7.39

%

 

6.70

%

 

6.55

%

 

3.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-interest expense ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense (GAAP)

$

29,816

 

$

30,510

 

$

33,573

 

$

26,891

 

$

28,062

 

Non-recurring transactions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger-related expenses

 

-

 

 

-

 

 

(4,349

)

 

(447

)

 

(285

)

Branch consolidation expenses

 

(375

)

 

(347

)

 

-

 

 

-

 

 

-

 

Debt extinguishment expenses

 

-

 

 

(796

)

 

-

 

 

-

 

 

(2,156

)

Non-interest expense (non-GAAP)

$

29,441

 

$

29,367

 

$

29,224

 

$

26,444

 

$

25,621

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense ratio (GAAP)

 

1.62

%

 

1.65

%

 

1.85

%

 

1.59

%

 

1.67

%

Adjusted non-interest expense ratio (non-GAAP)

 

1.60

%

 

1.59

%

 

1.61

%

 

1.56

%

 

1.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted efficiency ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense (non-GAAP)

$

29,441

 

$

29,367

 

$

29,224

 

$

26,444

 

$

25,621

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (GAAP)

$

47,631

 

$

44,553

 

$

44,162

 

$

40,450

 

$

37,610

 

Total non-interest income (GAAP)

 

5,466

 

 

7,154

 

 

7,733

 

 

5,002

 

 

6,201

 

Non-recurring transactions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net effect of sales and calls of securities

 

(18

)

 

(813

)

 

-

 

 

-

 

 

(2,234

)

Bargain purchase gain

 

-

 

 

-

 

 

(3,053

)

 

-

 

 

-

 

Net effect of sales of other assets

 

(837

)

 

-

 

 

-

 

 

-

 

 

-

 

Total revenue (non-GAAP)

$

52,242

 

$

50,894

 

$

48,842

 

$

45,452

 

$

41,577

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (GAAP)

 

56.15

%

 

59.01

%

 

64.69

%

 

59.16

%

 

64.05

%

Adjusted efficiency ratio (non-GAAP)

 

56.36

%

 

57.70

%

 

59.83

%

 

58.18

%

 

61.62

%

 

16