EX-99.1

EX-99.1 2 d614388dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

LOGO

Company Contact:

Michael J. Fitzpatrick

Chief Financial Officer

OceanFirst Financial Corp.

Tel: (732) 240-4500, ext. 7506

Fax: (732) 349-5070

Email: Mfitzpatrick@oceanfirst.com

FOR IMMEDIATE RELEASE

OCEANFIRST FINANCIAL CORP.

ANNOUNCES QUARTERLY AND YEAR-TO-DATE

FINANCIAL RESULTS

TOMS RIVER, NEW JERSEY, October 17, 2013…OceanFirst Financial Corp. (NASDAQ: “OCFC”), (the “Company”), the holding company for OceanFirst Bank (the “Bank”), today announced that diluted earnings per share amounted to $0.29 for the quarter ended September 30, 2013, as compared to $0.28 for the corresponding prior year period. For the nine months ended September 30, 2013, diluted earnings per share amounted to $0.84, as compared to $0.89 for the corresponding prior year period. Highlights for the quarter included:

•

Commercial loans outstanding increased $18.5 million, an annualized growth rate of 13.6%.

•

The net interest margin stabilized at 3.20%, as compared to 3.21% in the linked quarter, largely the result of higher yielding commercial loans replacing investment securities.

•

Improved credit metrics supported a decrease in the loan loss provision, as non-performing loans decreased $4.3 million.

•

Tangible common equity remains strong at a ratio of 9.35%.

The Company also announced that the Board of Directors declared its sixty-seventh consecutive quarterly cash dividend on common stock. The dividend for the quarter ended September 30, 2013 of $0.12 per share will be paid on November 8, 2013, to shareholders of record on October 28, 2013.

Chairman and CEO John R. Garbarino observed “strong commercial loan growth helped to further stabilize the net interest margin, and we are encouraged by our improved credit metrics, as both non-performing loans and year-to-date net charge-offs decreased. Strategically, we continue to build our team of proven income producers in several areas, enhancing our prospects for future revenue growth. In the coming quarter we are also consolidating two branch offices and re-structuring our FHLB advance book to help these revenue gains translate into sustainable earnings improvement.”

Results of Operations

Net income for the three and nine months ended September 30, 2013 was $5.0 million and $14.4 million, respectively, or $0.29 per diluted share and $0.84 per diluted share, respectively, as compared to net income of $5.0 million and $16.0 million, respectively, or $0.28 per diluted share and $0.89 per diluted share for the corresponding prior year periods. Net income for the three and nine months ended September 30, 2012 was adversely impacted by a non-recurring expense relating to the departure of the Bank’s former President and Chief Operating Officer of $747,000, net of related expense savings, or $468,000 net of tax benefit. Net income was impacted in the current year periods by lower net interest income and lower other income, partly offset by a reduction in the provision for loan losses as compared to the prior year periods.

Net interest income for the three and nine months ended September 30, 2013 decreased to $17.5 million and $52.3 million, respectively, as compared to $18.0 million and $55.5 million, respectively, in the same prior year periods, reflecting a lower net interest margin partly offset by slightly higher interest-earning assets. The net interest margin decreased to 3.20% and 3.19%, respectively, for the three and nine months ended September 30, 2013 from 3.28% and 3.39%, respectively, in the same prior year periods, due to a change in the mix of average interest-earning assets from higher-yielding loans receivable into lower-yielding securities. High loan refinance volume earlier in the year also caused yields on loans and mortgage-backed securities to trend downward. The yield on average interest-earning assets decreased to 3.64% and 3.67%, respectively, for the three and nine months ended September 30, 2013, as compared to 3.92% and 4.06%, respectively, for the same prior year periods. The cost of average interest-bearing liabilities decreased to 0.53% and 0.57%, respectively, for the three and nine months ended September 30, 2013, as compared to 0.74% and 0.77%, respectively, in the same prior year periods. Average interest-earning assets increased $1.0 million and $5.9 million, respectively, for the three and nine months ended September 30, 2013, as compared to the same prior year periods. The increases in average interest-earning assets were primarily due to the increases in average securities of $39.5 million and $45.4 million, respectively, for the three and nine months ended September 30, 2013. These increases were partly offset by decreases in average loans receivable, net, of $28.7 million and $40.9 million, respectively, for the three and nine months ended September 30, 2013, as compared to the same prior year periods. The growth in interest-earning assets was primarily funded by increases in average non-interest-bearing deposits, partly offset by decreases in average time deposits and borrowed funds.

For the three and nine months ended September 30, 2013, the provision for loan losses was $700,000 and $2.6 million, respectively, as compared to $1.4 million and $4.8 million, respectively, for the corresponding prior year periods. The decrease for the three and nine months ended September 30, 2013 was partly due to reductions of $133,000 and $2.5 million, respectively, in net charge-offs as compared to the same prior year periods and a reduction in loans receivable, net at September 30, 2013 as compared to both December 31, 2012 and September 30, 2012. Additionally, non-performing loans decreased $1.8 million at September 30, 2013 as compared to December 31, 2012.

For the three and nine months ended September 30, 2013, other income decreased to $4.6 million and $12.7 million as compared to $4.9 million and $13.7 million in the same prior year periods. The decrease in other income was primarily caused by the net gain on sales of loans decreasing by $716,000 and $1.7 million for the three and nine months ended September 30, 2013, respectively. For the three and nine months ended September 30, 2013, Bankcard services revenue increased $91,000 and $438,000, respectively, and trust and asset management revenue increased $240,000 and $492,000, respectively, as compared to the same prior year periods. The increase in trust and asset management revenue was partly due to an increase in assets under administration to $212.0 million at September 30, 2013 from $172.9 million at December 31, 2012. For the three and nine months ended September 30, 2013, the net gain on the sale of loans decreased to $316,000 and $877,000, respectively, as compared to $1.2 million and $3.1 million in the same prior year periods due to the reclassification of reverse mortgage income into fees and service charges and a decrease in loan sale volume. Additionally, the net gain on the sale of loans for the nine months ended September 30, 2013 was adversely impacted by an addition of $975,000 to the reserve for repurchased loans as compared to an addition of $350,000 in the

same prior year period. For the three months ended September 30, 2013, there was no provision for repurchased loans as compared to $100,000 in the same prior year period. (Refer to discussion in Asset Quality section regarding the reserve for repurchased loans.) Effective January 1, 2013, income from the origination of reverse mortgage loans is classified as part of fees and service charges as compared to inclusion in the net gain on the sale of loans in prior periods as the Bank no longer closes these loans in its name. The amount of reverse mortgage fees included in fees and service charges for the three and nine months ended September 30, 2013 was $186,000 and $531,000, respectively. The results from other real estate operations declined $228,000 and $55,000, respectively, for the three and nine months ended September 30, 2013, as compared to the same prior year periods. Finally, for the nine months ended September 30, 2013, the net gain on sales of investment securities available for sale decreased to $42,000 from $226,000 in the same prior year period.

Operating expenses amounted to $13.8 million and $40.2 million, respectively, for the three and nine months ended September 30, 2013, as compared to $13.8 million and $39.6 million, respectively, in the same prior year periods. Excluding the $747,000 non-recurring severance expense included in compensation and employee benefits, net of related expense savings, for the three and nine months ended September 30, 2012, operating expenses increased $692,000 and $1.3 million, respectively, as compared to the corresponding prior year periods. Compensation and employee benefits expense, net of the non-recurring severance cost, for the three and nine months ended September 30, 2013 was adversely impacted by recruiting costs and by the decrease in mortgage loan closings from the prior year levels. Lower loan closings in the current periods decreased deferred loan expense, net of sales commissions to mortgage loan representatives, which is reflected as an increase in compensation expense.

The provision for income taxes was $2.7 million and $7.8 million, respectively, for the three and nine months ended September 30, 2013, as compared to $2.7 million and $8.8 million for the same prior year periods. The effective tax rate was 34.9% and 35.2% for the three and nine months ended September 30, 2013, as compared to 35.1% and 35.5%, respectively, in the same prior year periods.

Financial Condition

Total assets increased by $17.1 million to $2,286.3 million at September 30, 2013, from $2,269.2 million at December 31, 2012. Securities, in the aggregate, increased by $35.5 million, to $583.0 million at September 30, 2013, as compared to $547.5 million at December 31, 2012. During the period, the Company reclassified $536.0 million of securities available-for-sale to securities held-to-maturity as the Company has the intent and ability to hold these securities until maturity. Loans receivable, net, decreased by $775,000, to $1,522.4 million at September 30, 2013 from $1,523.2 million at December 31, 2012, primarily due to prepayments and sale of newly originated 30-year fixed-rate one-to-four family loans. Commercial lending, however, grew $29.9 million during this period and residential construction loans increased $8.1 million as homeowners rebuild from superstorm Sandy.

Deposits increased by $49.2 million, to $1,768.9 million at September 30, 2013, from $1,719.7 million at December 31, 2012 with core deposits, (i.e. all deposits excluding time deposits) growing by $63.8 million. Securities sold under agreements to repurchase with retail customers increased by $9.2 million, to $70.0 million at September 30, 2013, from $60.8 million at December 31, 2012 and Federal Home Loan Bank advances decreased $36.0 million, to $189.0 million at September 30, 2013, from $225.0 million at December 31, 2012. Stockholders’

equity decreased to $213.8 million at September 30, 2013, as compared to $219.8 million at December 31, 2012. Net income for the period was offset by an increase in accumulated other comprehensive loss of $7.1 million due to the recent rise in interest rates, the repurchase of 533,018 shares of common stock for $8.1 million (average cost per share of $15.21) and the cash dividend on common stock. The reclassification of most available-for-sale securities to held-to-maturity during the third quarter will reduce the risk of accumulated other comprehensive losses that could result in the event of additional increases in interest rates. At September 30, 2013, there were 301,766 shares remaining to be repurchased under the stock repurchase program adopted in the fourth quarter of 2012. Tangible stockholders’ equity per common share was $12.30 at September 30, 2013, as compared to $12.28 at December 31, 2012, benefitting from the reduction in shares outstanding.

Asset Quality

The Company’s non-performing loans totaled $41.6 million at September 30, 2013, a $1.8 million decrease from $43.4 million at December 31, 2012. Included in non-performing loans at September 30, 2013 were $2.7 million in loans which remain adversely impacted by superstorm Sandy which caused substantial disruption in the Bank’s market area on October 29, 2012. Net loan charge-offs decreased to $2.2 million for the nine months ended September 30, 2013, as compared to $4.7 million for the corresponding prior year period.

The reserve for repurchased loans and loss sharing obligations, which is included in other liabilities in the Company’s consolidated statements of financial condition, was $1.5 million at September 30, 2013, a $265,000 increase from December 31, 2012. The increase was due to mostly first quarter activity relating to an additional provision for loans sold to the Federal Home

Loan Bank (“FHLB”), incurred losses relating to the FHLB loan sales, a comprehensive settlement with one investor relating to existing and anticipated loan repurchase requests, and recoveries of previously charged-off amounts. At September 30, 2013, there were two outstanding loan repurchase requests which the Company is disputing on loans with a total principal balance of $541,000, as compared to 12 outstanding loan repurchase requests with a principal balance of $3.6 million at December 31, 2012.

Strategic Initiatives

Subsequent to quarter-end, the Company made the strategic decision to prepay $159.0 million of Federal Home Loan Bank advances with a weighted average cost of 2.31% and a weighted average term to maturity of 16 months. The pre-tax prepayment fee on these borrowings was $4.3 million, or $0.16 per diluted share, which will be reflected in the fourth quarter’s reported earnings. The prepayment was initially funded by short-term advances, which the Company expects to supplement with deposit growth. Over the next year, the short-term advances will gradually be extended into longer-term liabilities. The transaction will improve net interest income and margin in future periods and, when fully implemented, will reduce the Company’s sensitivity to further interest rate increases.

The Company is focused on growing revenues in commercial lending, trust and asset management, and Bankcard services. In order to fund the required investment in these areas, the Bank reviewed branch expenses and decided to consolidate two branches into newer, in-market OceanFirst Bank facilities. The consolidation is scheduled to occur in the fourth quarter and is expected to result in a non-recurring charge of $630,000.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, October 18, 2013 at 11:00 a.m. Eastern time. The direct dial number for the call is (888) 317-6016. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (877) 344-7529, Replay Conference Number 10034447 from one hour after the end of the call until January 31, 2014. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.

* * *

OceanFirst Financial Corp.‘s subsidiary, OceanFirst Bank, founded in 1902, is a federally-chartered savings bank with $2.3 billion in assets and twenty-five branches located in Ocean, Monmouth and Middlesex Counties, New Jersey. The Bank is the largest and oldest community-based financial institution headquartered in Ocean County, New Jersey.

OceanFirst Financial Corp.‘s press releases are available by visiting us at www.oceanfirst.com.

Forward-Looking Statements

In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in interest rates, general economic conditions, levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area and accounting principles and guidelines. These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake - and specifically disclaims any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

OceanFirst Financial Corp.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands, except per share amounts)


	September 30, 2013			December 31, 2012			September 30, 2012
	(unaudited)						(unaudited)
ASSETS

Cash and due from banks	$	44,055		$	62,544		$	55,365
Securities available-for-sale, at estimated fair value		68,968			547,450			568,420
Securities held-to-maturity, net (estimated fair value of 517,173 at September 30, 2013)		514,022			—			—
Federal Home Loan Bank of New York stock, at cost		15,211			17,061			17,148
Loans receivable, net		1,522,425			1,523,200			1,545,640
Mortgage loans held for sale		2,566			6,746			5,598
Interest and dividends receivable		6,087			5,976			6,963
Other real estate owned, net		4,259			3,210			3,628
Premises and equipment, net		22,641			22,233			22,233
Servicing asset		4,314			4,568			4,659
Bank Owned Life Insurance		54,233			53,167			52,806
Other assets		27,507			23,073			21,966


Total assets	$	2,286,288		$	2,269,228		$	2,304,426


LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits	$	1,768,914		$	1,719,671		$	1,739,974
Securities sold under agreements to repurchase with retail customers		69,951			60,791			72,149
Federal Home Loan Bank advances		189,000			225,000			225,000
Other borrowings		27,500			27,500			27,500
Due to brokers		—			—			1,355
Advances by borrowers for taxes and insurance		8,230			7,386			7,296
Other liabilities		8,924			9,088			11,465


Total liabilities		2,072,519			2,049,436			2,084,739


Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation preference, 5,000,000 shares authorized, no shares issued		—			—			—
Common stock, $.01 par value, 55,000,000 shares authorized, 33,566,772 shares issued and 17,386,060, 17,894,929 and 18,020,046 shares outstanding at September 30, 2013, December 31, 2012 and September 30, 2012, respectively		336			336			336
Additional paid-in capital		263,125			262,704			262,590
Retained earnings		206,291			198,109			196,184
Accumulated other comprehensive (loss) gain		(7,011	)		49			354
Less: Unallocated common stock held by Employee Stock Ownership Plan		(3,688	)		(3,904	)		(3,976	)
Treasury stock, 16,180,712, 15,671,843 and 15,546,726 shares at September 30, 2013, December 31, 2012 and September 30, 2012, respectively		(245,284	)		(237,502	)		(235,801	)
Common stock acquired by Deferred Compensation Plan		(660	)		(647	)		(689	)
Deferred Compensation Plan Liability		660			647			689

Total stockholders’ equity		213,769			219,792			219,687


Total liabilities and stockholders’ equity	$	2,286,288		$	2,269,228		$	2,304,426

OceanFirst Financial Corp.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)


	For the three months ended September 30,					For the nine months ended September 30,
	2013			2012		2013			2012
	(unaudited)					(unaudited)

Interest income:
Loans	$	17,403		$	18,716	$	52,493		$	57,642
Mortgage-backed securities		1,865			2,065		5,540			6,618
Investment securities and other		716			733		2,163			2,166

Total interest income		19,984			21,514		60,196			66,426


Interest expense:
Deposits		1,107			1,907		3,607			5,960
Borrowed funds		1,333			1,607		4,312			4,971

Total interest expense		2,440			3,514		7,919			10,931


Net interest income		17,544			18,000		52,277			55,495

Provision for loan losses		700			1,400		2,600			4,800

Net interest income after provision for loan losses		16,844			16,600		49,677			50,695


Other income:
Bankcard services revenue		943			852		2,675			2,237
Trust and asset management revenue		628			388		1,583			1,091
Fees and service charges		2,247			1,873		6,037			5,710
Loan servicing income		200			130		528			409
Net gain on sales of loans available for sale		316			1,218		877			3,136
Net gain on sales of investment securities available for sale		—			—		42			226
Net (loss) gain from other real estate operations		(188	)		40		(112	)		(57	)
Income from Bank Owned Life Insurance		419			376		1,067			977
Other		1			1		20			5

Total other income		4,566			4,878		12,717			13,734


Operating expenses:
Compensation and employee benefits		7,397			7,347		21,014			20,978
Occupancy		1,364			1,279		4,104			3,897
Equipment		675			662		2,003			1,892
Marketing		444			451		1,142			1,231
Federal deposit insurance		538			533		1,598			1,587
Data processing		1,067			914		3,002			2,738
Check card processing		454			425		1,288			1,061
Professional fees		358			731		1,673			1,909
Other operating expense		1,487			1,497		4,350			4,353

Total operating expenses		13,784			13,839		40,174			39,646


Income before provision for income taxes		7,626			7,639		22,220			24,783
Provision for income taxes		2,658			2,680		7,828			8,804

Net income	$	4,968		$	4,959	$	14,392		$	15,979


Basic earnings per share	$	0.29		$	0.28	$	0.84		$	0.90

Diluted earnings per share	$	0.29		$	0.28	$	0.84		$	0.89


Average basic shares outstanding		17,047			17,561		17,145			17,837

Average diluted shares outstanding		17,210			17,621		17,194			17,896

OceanFirst Financial Corp.

SELECTED CONSOLIDATED FINANCIAL DATA

(in thousands, except per share amounts)


	At September 30,			At December 31,			At September 30,
	2013			2012			2012

STOCKHOLDERS’ EQUITY
Stockholders’ equity to total assets		9.35	%		9.69	%		9.53	%
Common shares outstanding (in thousands)		17,386			17,895			18,020
Stockholders’ equity per common share	$	12.30		$	12.28		$	12.19
Tangible stockholders’ equity per common share		12.30			12.28			12.19

ASSET QUALITY
Non-performing loans:
Real estate – one-to-four family	$	28,970		$	26,521		$	25,475
Commercial real estate		7,398			11,567			11,397
Consumer		4,428			4,540			3,670
Commercial		769			746			631

Total non-performing loans		41,565			43,374			41,173
OREO, net		4,259			3,210			3,628

Total non-performing assets	$	45,824		$	46,584		$	44,801


Delinquent loans 30 to 89 days	$	18,965	(1)	$	11,437	(1)	$	11,275


Troubled debt restructurings:
Non-performing (included in total non-performing loans above)	$	11,886		$	18,160		$	14,772
Performing		21,523			17,733			19,621

Total troubled debt restructurings	$	33,409		$	35,893		$	34,393


Allowance for loan losses	$	20,887		$	20,510		$	18,291

Allowance for loan losses as a percent of total loans receivable		1.35	%		1.32	%		1.17	%
Allowance for loan losses as a percent of total non-performing loans		50.25			47.29			44.42
Non-performing loans as a percent of total loans receivable		2.68			2.80			2.63
Non-performing assets as a percent of total assets		2.00			2.05			1.94


	For the three months ended September 30,						For the nine months ended September 30,
	2013			2012			2013			2012
PERFORMANCE RATIOS (ANNUALIZED)
Return on average assets		0.86	%		0.86	%		0.83	%		0.93	%
Return on average stockholders’ equity		9.17			9.08			8.76			9.75
Interest rate spread		3.11			3.18			3.10			3.29
Interest rate margin		3.20			3.28			3.19			3.39
Operating expenses to average assets		2.39			2.39			2.33			2.31
Efficiency ratio		62.34			60.49			61.81			57.27

(1)	Delinquent loans 30 to 89 days excluded $16.5 million at December 31, 2012, of loans impacted by superstorm Sandy for which the Bank had granted a temporary payment plan. Delinquent loans 30 to 89 days at September 30, 2013 includes $475,000 of loans impacted by superstorm Sandy.

OceanFirst Financial Corp.

SELECTED LOAN AND DEPOSIT DATA

(in thousands)

LOANS RECEIVABLE


				At September 30, 2013			At December 31, 2012

Real estate:
One-to-four family				$	768,665		$	809,705
Commercial real estate, multi-family and land					497,461			475,155
Residential construction					17,087			9,013
Consumer					199,761			198,143
Commercial and industrial					65,584			57,967

Total loans					1,548,558			1,549,983

Loans in process					(6,530	)		(3,639	)
Deferred origination costs, net					3,850			4,112
Allowance for loan losses					(20,887	)		(20,510	)


Total loans, net					1,524,991			1,529,946

Less: mortgage loans held for sale					2,566			6,746

Loans receivable, net				$	1,522,425		$	1,523,200


Mortgage loans serviced for others				$	813,481		$	840,900

	Average Yield
Loan pipeline:
Commercial		3.97	%	$	38,361		$	23,145
Construction/permanent		4.13			14,605			2,860
One-to-four family		4.02			19,897			43,464
Consumer		4.13			4,939			4,593

				$	77,802		$	74,062


	For the three months ended September 30,				For the nine months ended September 30,
	2013		2012		2013		2012
Loan originations:
Commercial	$	49,522	$	23,251	$	97,216	$	99,737
Construction/permanent		9,887		2,125		17,470		6,221
One-to-four family		45,708		72,137		159,451		204,511
Consumer		19,720		12,549		46,432		51,905

Total	$	124,837	$	110,062	$	320,569	$	362,374


Loans sold	$	19,194	$	45,097	$	88,328	$	127,683
Net charge-offs		633		766		2,223		4,739

DEPOSITS


	At September 30, 2013		At December 31, 2012
Type of Account
Non-interest-bearing	$	217,061	$	179,074
Interest-bearing checking		924,694		940,190
Money market deposit		124,350		118,154
Savings		291,131		256,035
Time deposits		211,678		226,218

	$	1,768,914	$	1,719,671

OceanFirst Financial Corp.

ANALYSIS OF NET INTEREST INCOME


	FOR THE THREE MONTHS ENDED SEPTEMBER 30,
	2013							2012
	AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST			AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST
	(dollars in thousands)
Assets
Interest-earning assets:
Interest-earning deposits and short-term investments	$	46,311	$	16		0.14	%	$	55,475	$	15		0.11	%
Securities (1)		613,929		2,394		1.56			574,453		2,586		1.80
FHLB stock		17,087		171		4.00			17,695		197		4.45
Loans receivable, net (2)		1,519,002		17,403		4.58			1,547,696		18,716		4.84

Total interest-earning assets		2,196,329		19,984		3.64			2,195,319		21,514		3.92

Non-interest-earning assets		115,016							116,227

Total assets	$	2,311,345						$	2,311,546

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Transaction deposits	$	1,317,181		387		0.12		$	1,317,658		971		0.29
Time deposits		211,584		720		1.36			238,133		936		1.57

Total		1,528,765		1,107		0.29			1,555,791		1,907		0.49
Borrowed funds		329,281		1,333		1.62			335,231		1,607		1.92

Total interest-bearing liabilities		1,858,046		2,440		0.53			1,891,022		3,514		0.74

Non-interest-bearing deposits		219,723							183,780
Non-interest-bearing liabilities		16,827							18,350

Total liabilities		2,094,596							2,093,152
Stockholders’ equity		216,749							218,394

Total liabilities and stockholders’ equity	$	2,311,345						$	2,311,546

Net interest income			$	17,544						$	18,000

Net interest rate spread (3)						3.11	%						3.18	%

Net interest margin (4)						3.20	%						3.28	%


	FOR THE NINE MONTHS ENDED SEPTEMBER 30,
	2013							2012
	AVERAGE BALANCE		INTEREST		AVERAGE YIELD COST			AVERAGE BALANCE		INTEREST		AVERAGE YIELD COST
	(dollars in thousands)
Assets
Interest-earning assets:
Interest-earning deposits and short-term investments	$	56,142	$	61		0.14	%	$	54,133	$	58		0.14	%
Securities (1)		598,098		7,108		1.58			552,661		8,100		1.95
FHLB stock		17,113		534		4.16			17,749		626		4.70
Loans receivable, net (2)		1,514,693		52,493		4.62			1,555,556		57,642		4.94

Total interest-earning assets		2,186,046		60,196		3.67			2,180,099		66,426		4.06

Non-interest-earning assets		117,516							108,665

Total assets	$	2,303,562						$	2,288,764

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Transaction deposits	$	1,322,095		1,389		0.14		$	1,295,640		2,887		0.30
Time deposits		216,198		2,218		1.37			247,704		3,073		1.65

Total		1,538,293		3,607		0.31			1,543,344		5,960		0.51
Borrowed funds		325,251		4,312		1.77			340,563		4,971		1.95

Total interest-bearing liabilities		1,863,544		7,919		0.57			1,883,907		10,931		0.77

Non-interest-bearing deposits		204,568							169,400
Non-interest-bearing liabilities		16,463							16,935

Total liabilities		2,084,575							2,070,242
Stockholders’ equity		218,987							218,522

Total liabilities and stockholders’ equity	$	2,303,562						$	2,288,764

Net interest income			$	52,277						$	55,495

Net interest rate spread (3)						3.10	%						3.29	%

Net interest margin (4)						3.19	%						3.39	%

(1)	Amounts are recorded at average amortized cost.

(2)	Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated loss allowances and includes loans held for sale and non-performing loans.

(3)	Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(4)	Net interest margin represents net interest income divided by average interest-earning assets.