UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 27, 2017
KEARNY FINANCIAL CORP.
(Exact Name of Registrant as Specified in its Charter)
| Maryland | 001-37399 | 30-0870244 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File No.) |
(I.R.S. Employer Identification No.) |
| 120 Passaic Avenue, Fairfield, New Jersey |
07004 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (973) 244-4500
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operation and Financial Condition
On April 27, 2017, Kearny Financial Corp. (the “Company”), the holding company for Kearny Bank, issued a press release reporting its financial results for the quarter ended March 31, 2017.
A copy of the press release announcing the results is included as Exhibit 99.1 to this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
| (a) | Financial Statements of Businesses Acquired. Not applicable. |
| (b) | Pro Forma Financial Information. Not applicable. |
| (c) | Shell Company Transactions. Not applicable. |
| (d) | Exhibits. |
| Exhibit |
Description | |
| 99.1 | Press release dated April 27, 2017, announcing the Company’s financial results for the quarter ended March 31, 2017. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| KEARNY FINANCIAL CORP. | ||||||
| DATE: April 28, 2017 | By: | /s/ Craig L. Montanaro | ||||
| Craig L. Montanaro | ||||||
| President and Chief Executive Officer | ||||||
Exhibit 99.1
FOR IMMEDIATE RELEASE
April 27, 2017
For further information contact:
Craig L. Montanaro, President and Chief Executive Officer, or
Eric B. Heyer, Executive Vice President and Chief Financial Officer
Kearny Financial Corp.
(973) 244-4500
KEARNY FINANCIAL CORP.
REPORTS THIRD QUARTER 2017 OPERATING RESULTS
Fairfield, New Jersey, April 27, 2017 – Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), today reported net income for the quarter ended March 31, 2017 of $4.1 million, or $0.05 per basic and diluted share. The results represent a decrease in net income of $1.4 million compared to net income of $5.5 million, or $0.06 per basic and diluted share, for the quarter ended December 31, 2016.
The decrease in net income between linked periods largely reflected the impact of the first “full-quarter” cost of the Company’s 2016 Equity Incentive Plan approved by shareholders in October 2016. Based on the original value of the grants at the time they were issued on December 1, 2016, coupled with the five year vesting period, the “pre-tax” and “after-tax” expense associated with the noted grants total approximately $1.6 million and $1.1 million per quarter, respectively.
Overview
The Company continued to execute strategies during the third quarter of fiscal 2017 intended to grow and diversify its balance sheet while increasing earnings and prudently managing capital to promote long-term growth in shareholder value. These strategies resulted in several incremental balance sheet growth and diversification achievements that are included among the following noteworthy highlights for the quarter:
| • | The Company’s aggregate loan portfolio, excluding loans held for sale and the allowance for loan losses, increased by $148.7 million, or 5.0%, to $3.12 billion, or 65.1% of total assets, at March 31, 2017 from $2.97 billion, or 64.9% of total assets, at December 31, 2016. This growth largely reflected the Company’s continued strategic focus on commercial loans, which increased by $147.4 million, or 6.4% during the period. |
| • | Nonperforming loans decreased to $21.0 million, or 0.67% of total loans, at March 31, 2017 from $21.6 million, or 0.72% of total loans, at December 31, 2016. |
| • | The allowance for loan losses increased to $27.6 million at March 31, 2017 from $26.1 million at December 31, 2016, resulting in a “total loan coverage ratio”, representing the balance of the allowance for loan losses as a percentage of total loans, that was unchanged at 0.88% between comparative periods. |
| • | The “nonperforming loan coverage ratio”, representing the balance of the allowance for loan losses as a percentage of nonperforming loans, increased to 131.4% at March 31, 2017 from 120.8% at December 31, 2016. |
| • | The Company’s securities portfolio decreased by $72.2 million, or 6.1%, to $1.12 billion, or 23.3% of total assets, at March 31, 2017 from $1.19 billion, or 25.9% of total assets, at December 31, 2016. The decrease largely reflected the sale of highly-seasoned, fixed-rate mortgage-backed securities to fund a portion of the loan growth during the period coupled with normal principal repayments arising from amortization, calls and maturities of securities. A portion of these cash flows were reinvested into uncapped, floating-rate securities for interest rate risk management purposes while a lesser portion was reinvested into tax-favored municipal securities. The net decrease in the securities portfolio was also partially offset by a net increase in the fair value of the available for sale portfolio during the period. |
1
| • | The balance of cash and cash equivalents increased by $133.6 million to $170.6 million at March 31, 2017 from $37.0 million at December 31, 2016. The increase in cash and equivalents largely reflected a temporary increase in the balance of short-term liquid assets arising from additional borrowings drawn at the close of the period to fund future loan growth, as described in greater detail below. |
The Company continued its efforts to reallocate interest-earning cash and equivalents into comparatively higher-yielding assets in the loan portfolio throughout the quarter ended March 31, 2017. Despite the noted increase in the quarter-end balance of cash and equivalents, the average balance of other interest- earning assets decreased by $9.7 million to $61.3 million for the quarter ended March 31, 2017 from $71.1 million for the quarter ended December 31, 2016. Other interest-earning assets generally include the balance of interest-earning cash deposits held in other banks coupled with the balance of the Bank’s mandatory investment in the capital stock of the Federal Home Loan Bank of New York.
| • | The Company’s total deposits increased by $107.2 million to $2.85 billion at March 31, 2017, from $2.75 billion at December 31, 2016. The growth in deposits during the third quarter included a $91.7 million increase in interest-bearing deposits coupled with an increase in non-interest-bearing deposits of $15.6 million. The increase in deposits largely reflected the combined effects of new product, pricing and marketing strategies enacted during the period. |
| • | Total borrowings increased by $123.4 million to $825.3 million at March 31, 2017, from $701.8 million at December 31, 2016. The increase in borrowings reflected an increase of $110.0 million in FHLB advances coupled with a $13.4 million increase in depositor sweep account balances. The increase in FHLB advances largely reflected an additional $200.0 million of advances drawn during the quarter ended March 31, 2017 to fund loan growth. The Company utilized interest-rate derivatives to extend the effective duration of these short-term advances to largely offset that of the loans funded for interest rate risk management purposes. A portion of these new advances was used to repay $90.0 million of overnight advances that were outstanding at the close of the prior quarter ended December 31, 2016. Such advances had been previously drawn to temporarily fund loan growth through that date. |
| • | The Company’s total assets increased by $210.9 million to $4.80 billion at March 31, 2017 from $4.59 billion at December 31, 2016. |
| • | The Company’s stockholders’ equity decreased by $20.6 million to $1.09 billion at March 31, 2017 from $1.11 billion at December 31, 2016. The decrease partly reflected the return of capital to shareholders through share repurchases and cash dividends during the quarter ended March 31, 2017. These decreases were partially offset by net income earned for the period coupled with a net increase in accumulated other comprehensive income reflecting increases in the fair value of the Company’s derivatives and available for sale securities portfolios. |
At March 31, 2017, the Company’s total consolidated equity to assets ratio was 22.81% while the Bank’s total consolidated equity to assets ratio was 17.36%. The Company’s and Bank’s capital ratios at March 31, 2017 were well in excess of the levels required by federal banking regulators to be classified “well-capitalized” under regulatory guidelines.
As highlighted below, the noted balance sheet growth, reinvestment and reallocation achievements helped to offset the adverse effects on net interest income that resulted from the downward pressure on net interest margin arising from low market interest rates and a generally flat yield curve:
2
| • | The Company’s net interest income increased $591,000 to $26.2 million for the quarter ended March 31, 2017 from $25.6 million for the quarter ended December 31, 2016. |
| • | The Company’s net interest margin increased three basis points to 2.48% for the quarter ended March 31, 2017 from 2.45% for the quarter ended December 31, 2016 while the net interest rate spread also increased by three basis points to 2.21% from 2.18% for those same comparative periods, respectively. |
The levels of the Company’s charge offs and provision for loan losses continued to reflect strong asset quality metrics:
| • | The Company recognized net charge offs totaling approximately $254,000, reflecting an annualized charge off rate of 0.03% on the average balance of total loans for the quarter ended March 31, 2017. By comparison, the Company’s net charge offs totaled approximately $198,000 for the quarter ended December 31, 2016, reflecting an annualized charge off rate of 0.03%. |
| • | The Company’s provision for loan losses totaled $1.8 million for the quarter ended March 31, 2017 compared to $1.3 million for the quarter ended December 31, 2016. The increase in the provision partly reflected the comparatively greater level of growth during the quarter ended March 31, 2017 in the performing portion of the loan portfolio which is collectively evaluated for impairment using historical and environmental loss factors. The increase in the provision also reflected updates to historical loss factors during the quarter ended March 31, 2017 to reflect the increase in net charge off activity for the period while also reflecting less noteworthy updates to environmental loss factors during the period. |
The strategies executed by the Company during the third quarter of fiscal 2017 also served to strengthen and diversify its sources of non-interest income, as highlighted below:
| • | Gains on sale of residential mortgage loans totaled $166,000 for the quarter ended March 31, 2017 compared to $297,000 for the quarter ended December 31, 2016, which largely reflected a seasonal decrease in the volume of loans originated and sold between comparative periods. The Company expects to increase the volume of residential mortgage loans originated and sold during the fourth quarter ending June 30, 2017 compared to the quarter ended March 31, 2017. In addition to bolstering non-interest income, the Company’s mortgage banking strategy is expected to help manage its exposure to interest rate risk. |
| • | Gains on sale of SBA loans originated totaled $80,000 for the quarter ended March 31, 2017 compared to $162,000 for the quarter ended December 31, 2016, reflecting a decrease in the balance of SBA loans originated and sold between comparative periods. Based on the number and balance of originated loans in the underwriting process at March 31, 2017, the Company expects to increase the volume of SBA loans sold during the quarter ending June 30, 2017 compared to the quarter ended March 31, 2017. |
The Company continues to evaluate and implement tactics and strategies designed to improve operating practices, policies and procedures while making more efficient and effective use of its supporting infrastructure, including human resources, facilities and information technology systems. These tactics have enabled the Company to defray a portion of the compensation costs associated with the Company’s 2016 Equity Incentive Plan, as discussed above:
| • | The Company’s ratio of non-interest expense to average assets totaled 1.84% for the quarter ended March 31, 2017 compared to 1.71% for the prior quarter ended December 31, 2016. For those same comparative periods, the Company’s operating efficiency ratio increased to 73.9% from 66.7%, respectively. The Company estimates that the recurring expenses associated with its 2016 Equity Incentive Plan increased its ratio of non-interest expense to average assets by 0.14% for the quarter ended March 31, 2017 while adding 5.46% to its efficiency ratio for the same period. |
3
| • | The Company increased its number of full time equivalent (“FTE”) employees by 12 during the latest quarter to 446 at March 31, 2017 from 434 at December 31, 2016. The increase in FTE count predominantly reflected increases in lending-related positions supporting the Company’s growing mortgage banking business line as well as increases in commercial mortgage lending and commercial business lending resources. |
Collectively, the factors noted above contributed to a decrease in recurring operating earnings for the quarter ended March 31, 2017 compared to the prior quarter ended December 31, 2016 as highlighted below:
| • | The Company’s return on average assets for the quarter ended March 31, 2017 totaled 0.36% compared to 0.48% for the prior quarter ended December 31, 2016. |
| • | The Company’s return on average equity for the quarter ended March 31, 2017 totaled 1.47% compared to 1.96% for the prior quarter ended December 31, 2016. |
The earnings for the quarter ended March 31, 2017 augmented the Company’s stockholders’ equity, which continues to reflect the capital resulting from the second-step conversion and stock offering that was completed in fiscal 2015. As such, the Company continued to execute two key capital management strategies during the third quarter of fiscal 2017 to further support shareholder value:
| • | The Company increased its regular quarterly cash dividend payable to stockholders by $0.01 to $0.03 per share during the quarter ended March 31, 2017. The Company continues to evaluate its dividend policies and practices in relation to its capital management and shareholder value objectives. |
| • | The Company continued to repurchase shares of its capital stock under the share repurchase program announced in May 2016 through which it authorized a repurchase of 9,352,809 shares, or 10%, of the Company’s outstanding shares. For the quarter ended March 31, 2017, the Company repurchased a total of 1,982,883 of its shares at an average cost of $15.04 per share compared to 1,286,533 shares repurchased during the prior quarter ended December 31, 2016 at an average cost of $14.55 per share. Through March 31, 2017, the Company has repurchased 7,721,888 shares, or 82.6% of the number authorized under the current program, at a total cost of $106.6 million and at an average cost of $13.81 per share. |
The exhibits that follow this narrative begin with the presentation of a tabular Linked-Quarter Comparative Financial Analysis that supports the discussion above by presenting the Company’s financial condition and operating results for the quarter ended, March 31, 2017 compared to those for the prior quarter ended December 31, 2016. This analysis is followed by a tabular Five-Quarter Financial Trend Analysis that presents similar financial information, together with other financial highlights and performance metrics, over a consecutive five quarter look-back period that is intended to reflect the Company’s financial performance and strategic achievements over this extended period of time.
Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by Kearny Financial Corp. with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.
4
Linked-Quarter Comparative Financial Analysis
| Summary Balance Sheet |
At | Variance or Change |
Variance or Change Pct. |
|||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2017 | 2016 | |||||||||||||||
| Assets |
||||||||||||||||
| Cash and cash equivalents |
$ | 170,591 | $ | 37,032 | $ | 133,559 | 360.7 | |||||||||
| Securities available for sale |
614,948 | 671,281 | (56,333 | ) | (8.4 | ) | ||||||||||
| Securities held to maturity |
501,987 | 517,819 | (15,832 | ) | (3.1 | ) | ||||||||||
| Loans held-for-sale |
744 | 6,686 | (5,942 | ) | (88.9 | ) | ||||||||||
| Loans receivable, including yield adjustments |
3,122,628 | 2,973,931 | 148,697 | 5.0 | ||||||||||||
| Less allowance for loan losses |
(27,614 | ) | (26,060 | ) | (1,554 | ) | 6.0 | |||||||||
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|
|
|
|||||||||
| Net loans receivable |
3,095,014 | 2,947,871 | 147,143 | 5.0 | ||||||||||||
| Premises and equipment |
38,904 | 38,341 | 563 | 1.5 | ||||||||||||
| Federal Home Loan Bank stock |
39,474 | 34,525 | 4,949 | 14.3 | ||||||||||||
| Accrued interest receivable |
12,320 | 11,809 | 511 | 4.3 | ||||||||||||
| Goodwill |
108,591 | 108,591 | — | — | ||||||||||||
| Bank owned life insurance |
179,935 | 178,656 | 1,279 | 0.7 | ||||||||||||
| Deferred income taxes, net |
14,318 | 16,098 | (1,780 | ) | (11.1 | ) | ||||||||||
| Other assets |
19,416 | 16,599 | 2,817 | 17.0 | ||||||||||||
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|
|||||||||
| Total assets |
$ | 4,796,242 | $ | 4,585,308 | $ | 210,934 | 4.6 | |||||||||
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| Liabilities |
||||||||||||||||
| Deposits |
$ | 2,853,263 | $ | 2,746,017 | $ | 107,246 | 3.9 | |||||||||
| Borrowings |
825,260 | 701,849 | 123,411 | 17.6 | ||||||||||||
| Advance payments by borrowers for taxes |
8,059 | 7,618 | 441 | 5.8 | ||||||||||||
| Other liabilities |
15,650 | 15,172 | 478 | 3.2 | ||||||||||||
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|||||||||
| Total liabilities |
3,702,232 | 3,470,656 | 231,576 | 6.7 | ||||||||||||
| Stockholders’ Equity |
||||||||||||||||
| Common stock |
873 | 892 | (19 | ) | (2.1 | ) | ||||||||||
| Paid-in capital |
768,373 | 795,773 | (27,400 | ) | (3.4 | ) | ||||||||||
| Retained earnings |
359,083 | 357,540 | 1,543 | 0.4 | ||||||||||||
| Unearned ESOP shares |
(35,022 | ) | (35,508 | ) | 486 | (1.4 | ) | |||||||||
| Accumulated other comprehensive income (loss), net |
703 | (4,045 | ) | 4,748 | (117.4 | ) | ||||||||||
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| Total stockholders’ equity |
1,094,010 | 1,114,652 | (20,642 | ) | (1.9 | ) | ||||||||||
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| Total liabilities and stockholders’ equity |
$ | 4,796,242 | $ | 4,585,308 | $ | 210,934 | 4.6 | |||||||||
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| Consolidated capital ratios |
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| Equity to assets |
22.81 | % | 24.31 | % | -1.50 | % | ||||||||||
| Tangible equity to tangible assets |
21.02 | % | 22.47 | % | -1.45 | % | ||||||||||
| Share data |
||||||||||||||||
| Outstanding shares (period end) |
87,256 | 89,176 | (1,920 | ) | (2.2 | ) | ||||||||||
| Equity per share |
$ | 12.54 | $ | 12.50 | $ | 0.04 | 0.3 | |||||||||
| Tangible equity per share (1) |
$ | 11.29 | $ | 11.28 | $ | 0.01 | 0.1 | |||||||||
| (1) | Tangible equity equals total stockholders’ equity reduced by goodwill and core deposit intangible assets. |
5
| Summary Income Statement |
For the three months ended | Variance or Change |
Variance or Change Pct. |
|||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2017 | 2016 | |||||||||||||||
| Interest income |
||||||||||||||||
| Loans |
$ | 28,235 | $ | 27,407 | $ | 828 | 3.0 | |||||||||
| Mortgage-backed securities |
3,222 | 3,779 | (557 | ) | (14.7 | ) | ||||||||||
| Debt securities: |
— | |||||||||||||||
| Taxable |
2,488 | 2,146 | 342 | 15.9 | ||||||||||||
| Tax-exempt |
582 | 562 | 20 | 3.6 | ||||||||||||
| Other interest-earning assets |
481 | 421 | 60 | 14.3 | ||||||||||||
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| Total Interest Income |
35,008 | 34,315 | 693 | 2.0 | ||||||||||||
| Interest expense |
||||||||||||||||
| Deposits |
5,420 | 5,410 | 10 | 0.2 | ||||||||||||
| Borrowings |
3,381 | 3,289 | 92 | 2.8 | ||||||||||||
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| Total interest expense |
8,801 | 8,699 | 102 | 1.2 | ||||||||||||
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| Net interest income |
26,207 | 25,616 | 591 | 2.3 | ||||||||||||
| Provision for loan losses |
1,809 | 1,255 | 554 | 44.1 | ||||||||||||
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| Net interest income after provision for |
24,398 | 24,361 | 37 | 0.2 | ||||||||||||
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| Non-interest income |
||||||||||||||||
| Fees and service charges |
498 | 1,289 | (791 | ) | (61.4 | ) | ||||||||||
| (Loss) gain on sale and call of securities |
(22 | ) | 21 | (43 | ) | (204.8 | ) | |||||||||
| Gain on sale of loans |
245 | 459 | (214 | ) | (46.6 | ) | ||||||||||
| (Loss) gain on sale of real estate owned |
(106 | ) | 12 | (118 | ) | (983.3 | ) | |||||||||
| Income from bank owned life insurance |
1,279 | 1,321 | (42 | ) | (3.2 | ) | ||||||||||
| Electronic banking fees and charges |
240 | 270 | (30 | ) | (11.1 | ) | ||||||||||
| Miscellaneous |
119 | 74 | 45 | 60.8 | ||||||||||||
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| Total non-interest income |
2,253 | 3,446 | (1,193 | ) | (34.6 | ) | ||||||||||
| Non-interest expense |
||||||||||||||||
| Salaries and employee benefits |
12,430 | 11,592 | 838 | 7.2 | ||||||||||||
| Net occupancy expense of premises |
2,088 | 1,976 | 112 | 5.7 | ||||||||||||
| Equipment and systems |
2,068 | 2,030 | 38 | 1.9 | ||||||||||||
| Advertising and marketing |
753 | 387 | 366 | 94.6 | ||||||||||||
| Federal deposit insurance premium |
338 | 339 | (1 | ) | (0.3 | ) | ||||||||||
| Directors’ compensation |
689 | 379 | 310 | 81.8 | ||||||||||||
| Miscellaneous |
2,668 | 2,670 | (2 | ) | (0.1 | ) | ||||||||||
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| Total non-interest expense |
21,034 | 19,373 | 1,661 | 8.6 | ||||||||||||
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| Income before income taxes |
5,617 | 8,434 | (2,817 | ) | (33.4 | ) | ||||||||||
| Income taxes |
1,549 | 2,970 | (1,421 | ) | (47.8 | ) | ||||||||||
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| Net income |
$ | 4,068 | $ | 5,464 | $ | (1,396 | ) | (25.5 | ) | |||||||
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| Net income per common share (EPS) |
||||||||||||||||
| Basic |
$ | 0.05 | $ | 0.06 | $ | (0.01 | ) | |||||||||
| Diluted |
$ | 0.05 | $ | 0.06 | $ | (0.01 | ) | |||||||||
| Dividends declared |
||||||||||||||||
| Cash dividends declared per common share |
$ | 0.03 | $ | 0.02 | $ | 0.01 | ||||||||||
| Cash dividends declared |
$ | 2,525 | $ | 1,687 | $ | 838 | ||||||||||
| Dividend payout ratio |
62.1 | % | 30.9 | % | 31.19 | % | ||||||||||
| Weighted average number of common |
||||||||||||||||
| Basic |
84,542 | 85,174 | (632 | ) | ||||||||||||
| Diluted |
84,624 | 85,258 | (634 | ) | ||||||||||||
6
| Average Balance Sheet Data |
For the three months ended | Variance or Change |
Variance or Change Pct. |
|||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2017 | 2016 | |||||||||||||||
| Assets |
||||||||||||||||
| Interest-earning assets: |
||||||||||||||||
| Loans receivable, including loans held for sale |
$ | 3,029,151 | $ | 2,899,794 | $ | 129,357 | 4.5 | |||||||||
| Mortgage-backed securities |
582,591 | 673,569 | (90,978 | ) | (13.5 | ) | ||||||||||
| Debt securities: |
— | |||||||||||||||
| Tax-exempt |
116,479 | 112,221 | 4,258 | 3.8 | ||||||||||||
| Taxable |
441,124 | 419,966 | 21,158 | 5.0 | ||||||||||||
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| Total debt securities |
557,603 | 532,187 | 25,416 | 4.8 | ||||||||||||
| Other interest-earning assets |
61,336 | 71,072 | (9,736 | ) | (13.7 | ) | ||||||||||
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| Total interest-earning assets |
4,230,681 | 4,176,622 | 54,059 | 1.3 | ||||||||||||
| Non-interest-earning assets |
352,419 | 351,458 | 961 | 0.3 | ||||||||||||
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| Total assets |
$ | 4,583,100 | $ | 4,528,080 | $ | 55,020 | 1.2 | |||||||||
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|
|
|
|
|
|||||||||
| Liabilities and Stockholders’ Equity |
||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||
| Deposits: |
||||||||||||||||
| Interest-bearing demand |
$ | 756,520 | $ | 761,765 | $ | (5,245 | ) | (0.7 | ) | |||||||
| Savings and club |
520,572 | 518,225 | 2,347 | 0.5 | ||||||||||||
| Certificates of deposit |
1,242,757 | 1,224,592 | 18,165 | 1.5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest-bearing deposits |
2,519,849 | 2,504,582 | 15,267 | 0.6 | ||||||||||||
| Borrowings: |
||||||||||||||||
| Federal Home Loan Bank Advances |
643,504 | 594,238 | 49,266 | 8.3 | ||||||||||||
| Other borrowings |
44,940 | 35,273 | 9,667 | 27.4 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total borrowings |
688,444 | 629,511 | 58,933 | 9.4 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest-bearing liabilities |
3,208,293 | 3,134,093 | 74,200 | 2.4 | ||||||||||||
| Non-interest-bearing liabilities: |
||||||||||||||||
| Non-interest-bearing deposits |
246,449 | 245,928 | 521 | 0.2 | ||||||||||||
| Other non-interest-bearing liabilities |
25,028 | 31,781 | (6,753 | ) | (21.2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total non-interest-bearing liabilities |
271,477 | 277,709 | (6,232 | ) | (2.2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities |
3,479,770 | 3,411,802 | 67,968 | 2.0 | ||||||||||||
| Stockholders’ equity |
1,103,330 | 1,116,278 | (12,948 | ) | (1.2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities and stockholders’ equity |
$ | 4,583,100 | $ | 4,528,080 | $ | 55,020 | 1.2 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average interest-earning assets to average |
131.87 | % | 133.26 | % | -1.39 | % | -1.0 | |||||||||
7
| Performance Ratio Highlights |
For the three months ended | Variance or Change |
Variance or Change Pct. |
|||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2017 | 2016 | |||||||||||||||
| Average yield on interest-earning assets: |
||||||||||||||||
| Loans receivable, including loans held for sale |
3.73 | % | 3.78 | % | -0.05 | % | ||||||||||
| Mortgage-backed securities |
2.21 | % | 2.24 | % | -0.03 | % | ||||||||||
| Debt securities: |
||||||||||||||||
| Tax-exempt |
2.00 | % | 2.00 | % | 0.00 | % | ||||||||||
| Taxable |
2.26 | % | 2.04 | % | 0.22 | % | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total debt securities |
2.20 | % | 2.04 | % | 0.16 | % | ||||||||||
| Other interest-earning assets |
3.13 | % | 2.37 | % | 0.76 | % | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total interest-earning assets |
3.31 | % | 3.29 | % | 0.02 | % | ||||||||||
| Average cost of interest-bearing liabilities: |
||||||||||||||||
| Deposits: |
||||||||||||||||
| Interest-bearing demand |
0.65 | % | 0.62 | % | 0.03 | % | ||||||||||
| Savings and club |
0.12 | % | 0.12 | % | 0.00 | % | ||||||||||
| Certificates of deposit |
1.30 | % | 1.33 | % | -0.03 | % | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing deposits |
0.86 | % | 0.86 | % | 0.00 | % | ||||||||||
| Borrowings: |
||||||||||||||||
| Federal Home Loan Bank Advances |
2.08 | % | 2.20 | % | -0.12 | % | ||||||||||
| Other borrowings |
0.35 | % | 0.29 | % | 0.06 | % | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total borrowings |
1.96 | % | 2.09 | % | -0.13 | % | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing liabilities |
1.10 | % | 1.11 | % | -0.01 | % | ||||||||||
| Interest rate spread (1) |
2.21 | % | 2.18 | % | 0.03 | % | ||||||||||
| Net interest margin (2) |
2.48 | % | 2.45 | % | 0.03 | % | ||||||||||
| Non-interest income to average
assets |
0.20 | % | 0.30 | % | -0.10 | % | ||||||||||
| Non-interest expense to average
assets |
1.84 | % | 1.71 | % | 0.13 | % | ||||||||||
| Efficiency ratio (3) |
73.91 | % | 66.66 | % | 7.25 | % | ||||||||||
| Return on average assets (annualized) |
0.36 | % | 0.48 | % | -0.12 | % | ||||||||||
| Return on average equity (annualized) |
1.47 | % | 1.96 | % | -0.49 | % | ||||||||||
| (1) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
| (2) | Net interest income divided by average interest-earning assets. |
| (3) | Non-interest expense divided by the sum of net interest income and non-interest income. |
8
Five-Quarter Financial Trend Analysis
| Summary Balance Sheet |
At | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||
| Assets |
||||||||||||||||||||
| Cash and cash equivalents |
$ | 170,591 | $ | 37,032 | $ | 72,593 | $ | 199,200 | $ | 114,956 | ||||||||||
| Securities available for sale |
614,948 | 671,281 | 689,151 | 673,537 | 685,787 | |||||||||||||||
| Securities held to maturity |
501,987 | 517,819 | 538,319 | 577,286 | 592,430 | |||||||||||||||
| Loans held-for-sale |
744 | 6,686 | 4,489 | 3,316 | — | |||||||||||||||
| Loans receivable, including yield adjustments |
3,122,628 | 2,973,931 | 2,845,605 | 2,673,987 | 2,720,069 | |||||||||||||||
| Less allowance for loan losses |
(27,614 | ) | (26,060 | ) | (25,003 | ) | (24,229 | ) | (23,010 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net loans receivable |
3,095,014 | 2,947,871 | 2,820,602 | 2,649,758 | 2,697,059 | |||||||||||||||
| Premises and equipment |
38,904 | 38,341 | 38,125 | 38,385 | 38,598 | |||||||||||||||
| Federal Home Loan Bank stock |
39,474 | 34,525 | 31,601 | 30,612 | 29,670 | |||||||||||||||
| Accrued interest receivable |
12,320 | 11,809 | 11,666 | 11,212 | 11,626 | |||||||||||||||
| Goodwill |
108,591 | 108,591 | 108,591 | 108,591 | 108,591 | |||||||||||||||
| Bank owned life insurance |
179,935 | 178,656 | 177,334 | 176,016 | 174,642 | |||||||||||||||
| Deferred income taxes, net |
14,318 | 16,098 | 22,914 | 25,973 | 27,340 | |||||||||||||||
| Other assets |
19,416 | 16,599 | 7,896 | 6,173 | 5,310 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 4,796,242 | $ | 4,585,308 | $ | 4,523,281 | $ | 4,500,059 | $ | 4,486,009 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Liabilities |
||||||||||||||||||||
| Deposits |
$ | 2,853,263 | $ | 2,746,017 | $ | 2,733,960 | $ | 2,694,833 | $ | 2,660,773 | ||||||||||
| Borrowings |
825,260 | 701,849 | 633,389 | 614,423 | 618,320 | |||||||||||||||
| Advance payments by borrowers for taxes |
8,059 | 7,618 | 7,597 | 7,906 | 8,141 | |||||||||||||||
| Other liabilities |
15,650 | 15,172 | 28,801 | 35,268 | 34,029 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
3,702,232 | 3,470,656 | 3,403,747 | 3,352,430 | 3,321,263 | |||||||||||||||
| Stockholders’ Equity |
||||||||||||||||||||
| Common stock |
873 | 892 | 891 | 918 | 935 | |||||||||||||||
| Paid-in capital |
768,373 | 795,773 | 813,648 | 849,173 | 871,156 | |||||||||||||||
| Retained earnings |
359,083 | 357,540 | 353,763 | 350,806 | 347,717 | |||||||||||||||
| Unearned ESOP shares |
(35,022 | ) | (35,508 | ) | (35,995 | ) | (36,481 | ) | (36,968 | ) | ||||||||||
| Accumulated other comprehensive income (loss), net |
703 | (4,045 | ) | (12,773 | ) | (16,787 | ) | (18,094 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total stockholders’ equity |
1,094,010 | 1,114,652 | 1,119,534 | 1,147,629 | 1,164,746 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and stockholders’ equity |
$ | 4,796,242 | $ | 4,585,308 | $ | 4,523,281 | $ | 4,500,059 | $ | 4,486,009 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Consolidated capital ratios |
||||||||||||||||||||
| Equity to assets |
22.81 | % | 24.31 | % | 24.75 | % | 25.50 | % | 25.96 | % | ||||||||||
| Tangible equity to tangible assets |
21.02 | % | 22.47 | % | 22.89 | % | 23.65 | % | 24.12 | % | ||||||||||
| Share data |
||||||||||||||||||||
| Outstanding shares (period end) |
87,256 | 89,176 | 89,076 | 91,822 | 93,528 | |||||||||||||||
| Equity per share |
$ | 12.54 | $ | 12.50 | $ | 12.57 | $ | 12.50 | $ | 12.45 | ||||||||||
| Tangible equity per share (1) |
$ | 11.29 | $ | 11.28 | $ | 11.34 | $ | 11.31 | $ | 11.29 | ||||||||||
| (1) | Tangible equity equals total stockholders’ equity reduced by goodwill and core deposit intangible assets. |
9
| Supplemental Balance Sheet Highlights |
At | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||
| Cash and cash equivalents |
||||||||||||||||||||
| Cash and due from depository institutions |
$ | 17,429 | $ | 17,541 | $ | 18,829 | $ | 21,328 | $ | 20,372 | ||||||||||
| Interest-bearing deposits in other banks |
153,162 | 19,491 | 53,764 | 177,872 | 94,584 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total cash and cash equivalents |
$ | 170,591 | $ | 37,032 | $ | 72,593 | $ | 199,200 | $ | 114,956 | ||||||||||
| Securities available for sale |
||||||||||||||||||||
| Debt securities: |
||||||||||||||||||||
| U.S. agency securities |
$ | 5,622 | $ | 5,809 | $ | 6,172 | $ | 6,440 | $ | 6,724 | ||||||||||
| Municipal and state obligations |
27,259 | 27,090 | 28,259 | 28,398 | 28,066 | |||||||||||||||
| Asset-backed securities |
150,805 | 121,445 | 84,065 | 82,625 | 84,396 | |||||||||||||||
| Collateralized loan obligations |
104,811 | 98,447 | 128,047 | 127,374 | 124,941 | |||||||||||||||
| Corporate bonds |
141,134 | 138,564 | 137,976 | 137,404 | 136,678 | |||||||||||||||
| Trust preferred securities |
8,248 | 8,101 | 7,968 | 7,669 | 7,263 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Debt securities available for sale |
437,879 | 399,456 | 392,487 | 389,910 | 388,068 | |||||||||||||||
| Mortgage-backed securities: |
||||||||||||||||||||
| Collateralized mortgage obligations |
31,941 | 52,333 | 57,170 | 60,577 | 63,744 | |||||||||||||||
| Residential pass-through securities |
136,926 | 211,258 | 231,052 | 214,526 | 225,469 | |||||||||||||||
| Commercial pass-through securities |
8,202 | 8,234 | 8,442 | 8,524 | 8,506 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Mortgage-backed securities |
177,069 | 271,825 | 296,664 | 283,627 | 297,719 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total securities available for sale |
$ | 614,948 | $ | 671,281 | $ | 689,151 | $ | 673,537 | $ | 685,787 | ||||||||||
| Securities held to maturity |
||||||||||||||||||||
| Debt securities: |
||||||||||||||||||||
| U.S. agency securities |
$ | 35,000 | $ | 34,999 | $ | 59,995 | $ | 84,992 | $ | 84,990 | ||||||||||
| Municipal and state obligations |
91,038 | 87,682 | 82,087 | 82,179 | 82,154 | |||||||||||||||
| Subordinated debt |
15,000 | 15,000 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Debt securities held to maturity |
141,038 | 137,681 | 142,082 | 167,171 | 167,144 | |||||||||||||||
| Mortgage-backed securities: |
||||||||||||||||||||
| Collateralized mortgage obligations |
19,193 | 20,543 | 21,699 | 23,081 | 24,561 | |||||||||||||||
| Residential pass-through securities |
186,248 | 200,402 | 211,930 | 223,632 | 234,595 | |||||||||||||||
| Commercial pass-through securities |
155,508 | 159,193 | 162,608 | 163,402 | 166,130 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Mortgage-backed securities |
360,949 | 380,138 | 396,237 | 410,115 | 425,286 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total securities held to maturity |
$ | 501,987 | $ | 517,819 | $ | 538,319 | $ | 577,286 | $ | 592,430 | ||||||||||
| Total securities |
$ | 1,116,935 | $ | 1,189,100 | $ | 1,227,470 | $ | 1,250,823 | $ | 1,278,217 | ||||||||||
10
| Supplemental Balance Sheet Highlights |
At | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||
| Loan portfolio composition: |
||||||||||||||||||||
| Residential first mortgage loans |
$ | 566,665 | $ | 562,466 | $ | 584,156 | $ | 605,203 | $ | 620,867 | ||||||||||
| Home equity loans and lines of credit |
82,412 | 83,305 | 85,799 | 89,566 | 90,610 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Residential mortgage loans |
649,077 | 645,771 | 669,955 | 694,769 | 711,477 | |||||||||||||||
| Multifamily mortgage loans |
1,371,339 | 1,295,207 | 1,142,908 | 1,040,293 | 1,044,180 | |||||||||||||||
| Nonresidential and mixed use mortgage loans |
995,782 | 932,616 | 916,769 | 820,673 | 837,758 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Commercial mortgage loans |
2,367,121 | 2,227,823 | 2,059,677 | 1,860,966 | 1,881,938 | |||||||||||||||
| Commercial business loans |
83,754 | 75,640 | 87,333 | 88,207 | 95,131 | |||||||||||||||
| Construction loans |
1,494 | 927 | 2,059 | 2,038 | 3,734 | |||||||||||||||
| Account loans |
2,860 | 2,980 | 3,012 | 3,349 | 3,313 | |||||||||||||||
| Other consumer loans |
15,313 | 17,501 | 19,870 | 22,052 | 21,642 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Consumer loans |
18,173 | 20,481 | 22,882 | 25,401 | 24,955 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans, excluding yield adjs |
3,119,619 | 2,970,642 | 2,841,906 | 2,671,381 | 2,717,235 | |||||||||||||||
| Unamortized yield adjustments |
3,009 | 3,289 | 3,699 | 2,606 | 2,834 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Loans receivable, including yield adjs |
3,122,628 | 2,973,931 | 2,845,605 | 2,673,987 | 2,720,069 | |||||||||||||||
| Less allowance for loan losses |
(27,614 | ) | (26,060 | ) | (25,003 | ) | (24,229 | ) | (23,010 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net loans receivable |
$ | 3,095,014 | $ | 2,947,871 | $ | 2,820,602 | $ | 2,649,758 | $ | 2,697,059 | ||||||||||
| Loan portfolio allocation: |
||||||||||||||||||||
| Residential first mortgage loans |
18.2 | % | 18.9 | % | 20.6 | % | 22.7 | % | 22.8 | % | ||||||||||
| Home equity loans and lines of credit |
2.6 | % | 2.8 | % | 3.0 | % | 3.4 | % | 3.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Residential mortgage loans |
20.8 | % | 21.7 | % | 23.6 | % | 26.0 | % | 26.2 | % | ||||||||||
| Multifamily mortgage loans |
44.0 | % | 43.6 | % | 40.2 | % | 38.9 | % | 38.4 | % | ||||||||||
| Nonresidential and mixed use mortgage loans |
31.9 | % | 31.4 | % | 32.3 | % | 30.7 | % | 30.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Commercial mortgage loans |
75.9 | % | 75.0 | % | 72.5 | % | 69.7 | % | 69.3 | % | ||||||||||
| Commercial business loans |
2.7 | % | 2.5 | % | 3.1 | % | 3.3 | % | 3.5 | % | ||||||||||
| Construction loans |
0.0 | % | 0.0 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||||||
| Account loans |
0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||||||
| Other consumer loans |
0.5 | % | 0.6 | % | 0.7 | % | 0.8 | % | 0.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Consumer loans |
0.6 | % | 0.7 | % | 0.8 | % | 1.0 | % | 0.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans, excluding yield adjs |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
| Asset quality: |
||||||||||||||||||||
| Nonperforming assets: |
||||||||||||||||||||
| Accruing loans > 90 days past due |
$ | 65 | $ | 92 | $ | 77 | $ | 38 | $ | — | ||||||||||
| Nonaccrual loans |
20,950 | 21,473 | 21,768 | 21,017 | 28,275 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Nonperforming loans |
21,015 | 21,565 | 21,845 | 21,055 | 28,275 | |||||||||||||||
| Other real estate owned |
1,668 | 2,037 | 1,356 | 826 | 1,475 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Nonperforming assets |
$ | 22,683 | $ | 23,602 | $ | 23,201 | $ | 21,881 | $ | 29,750 | ||||||||||
| Nonperforming loans (% total loans) |
0.67 | % | 0.72 | % | 0.77 | % | 0.79 | % | 1.04 | % | ||||||||||
| Nonperforming assets (% total assets) |
0.47 | % | 0.51 | % | 0.51 | % | 0.49 | % | 0.66 | % | ||||||||||
| Allowance for loan losses (ALLL): |
||||||||||||||||||||
| ALLL to total loans |
0.88 | % | 0.88 | % | 0.88 | % | 0.91 | % | 0.85 | % | ||||||||||
| ALLL to nonperforming loans |
131.40 | % | 120.84 | % | 114.46 | % | 115.07 | % | 81.38 | % | ||||||||||
| Net charge offs |
$ | 254 | $ | 198 | $ | 354 | $ | 827 | $ | 93 | ||||||||||
| Average net charge off rate (annualized) |
0.03 | % | 0.03 | % | 0.05 | % | 0.12 | % | 0.01 | % | ||||||||||
11
| Supplemental Balance Sheet Highlights |
At | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||
| Funding by type: |
||||||||||||||||||||
| Deposits |
||||||||||||||||||||
| Non-interest-bearing deposits |
$ | 255,939 | $ | 240,367 | $ | 251,141 | $ | 238,751 | $ | 226,700 | ||||||||||
| Interest-bearing demand |
798,203 | 768,556 | 750,126 | 732,633 | 717,603 | |||||||||||||||
| Savings and club |
524,002 | 519,257 | 514,909 | 516,023 | 520,826 | |||||||||||||||
| Certificates of deposit |
1,275,119 | 1,217,837 | 1,217,784 | 1,207,426 | 1,195,644 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Interest-bearing deposits |
2,597,324 | 2,505,650 | 2,482,819 | 2,456,082 | 2,434,073 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
2,853,263 | 2,746,017 | 2,733,960 | 2,694,833 | 2,660,773 | |||||||||||||||
| Borrowings: |
||||||||||||||||||||
| Federal Home Loan Bank advances |
775,719 | 665,742 | 600,765 | 578,788 | 585,317 | |||||||||||||||
| Depositor sweep accounts |
49,541 | 36,107 | 32,624 | 35,635 | 33,003 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total borrowings |
825,260 | 701,849 | 633,389 | 614,423 | 618,320 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total funding |
$ | 3,678,523 | $ | 3,447,866 | $ | 3,367,349 | $ | 3,309,256 | $ | 3,279,093 | ||||||||||
| Loans as a % of deposits |
108.5 | % | 107.6 | % | 103.3 | % | 98.5 | % | 101.4 | % | ||||||||||
| Deposits as a % of total funding |
77.6 | % | 79.6 | % | 81.2 | % | 81.4 | % | 81.1 | % | ||||||||||
| Borrowings as a % of total funding |
22.4 | % | 20.4 | % | 18.8 | % | 18.6 | % | 18.9 | % | ||||||||||
| Funding by source: |
||||||||||||||||||||
| Retail funding |
||||||||||||||||||||
| Non-interest-bearing deposits |
$ | 255,939 | $ | 240,367 | $ | 251,141 | $ | 238,751 | $ | 226,700 | ||||||||||
| Interest-bearing demand |
568,865 | 544,487 | 527,511 | 508,528 | 493,831 | |||||||||||||||
| Savings and club |
524,002 | 519,257 | 514,909 | 516,023 | 520,826 | |||||||||||||||
| Certificates of deposit |
1,152,025 | 1,113,073 | 1,119,922 | 1,109,203 | 1,097,414 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total retail deposits |
2,500,831 | 2,417,184 | 2,413,483 | 2,372,505 | 2,338,771 | |||||||||||||||
| Depositor sweep accounts |
49,541 | 36,107 | 32,624 | 35,635 | 33,003 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total retail funding |
2,550,372 | 2,453,291 | 2,446,107 | 2,408,140 | 2,371,774 | |||||||||||||||
| Wholesale funding: |
||||||||||||||||||||
| Interest-bearing demand |
$ | 229,338 | $ | 224,069 | $ | 222,615 | $ | 224,105 | $ | 223,772 | ||||||||||
| Certificates of deposit (listing service) |
101,432 | 96,516 | 89,608 | 89,857 | 89,857 | |||||||||||||||
| Certificates of deposit (brokered) |
21,662 | 8,248 | 8,254 | 8,366 | 8,373 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total wholesale deposits |
352,432 | 328,833 | 320,477 | 322,328 | 322,002 | |||||||||||||||
| FHLB Advances |
775,719 | 665,742 | 600,765 | 578,788 | 585,317 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total wholesale funding |
1,128,151 | 994,575 | 921,242 | 901,116 | 907,319 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total funding |
$ | 3,678,523 | $ | 3,447,866 | $ | 3,367,349 | $ | 3,309,256 | $ | 3,279,093 | ||||||||||
| Retail funding as a % of total funding |
69.3 | % | 71.2 | % | 72.6 | % | 72.8 | % | 72.3 | % | ||||||||||
| Wholesale funding as a % of total funding |
30.7 | % | 28.8 | % | 27.4 | % | 27.2 | % | 27.7 | % | ||||||||||
12
| Summary Income Statement |
For the three months ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||
| Interest income |
||||||||||||||||||||
| Loans |
$ | 28,235 | $ | 27,407 | $ | 25,697 | $ | 25,698 | $ | 25,585 | ||||||||||
| Mortgage-backed securities |
3,222 | 3,779 | 3,937 | 4,032 | 4,296 | |||||||||||||||
| Debt securities: |
||||||||||||||||||||
| Taxable |
2,488 | 2,146 | 2,040 | 1,990 | 1,988 | |||||||||||||||
| Tax-exempt |
582 | 562 | 551 | 551 | 551 | |||||||||||||||
| Other interest-earning assets |
481 | 421 | 581 | 496 | 462 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Interest Income |
35,008 | 34,315 | 32,806 | 32,767 | 32,882 | |||||||||||||||
| Interest expense |
||||||||||||||||||||
| Deposits |
5,420 | 5,410 | 5,361 | 5,140 | 4,932 | |||||||||||||||
| Borrowings |
3,381 | 3,289 | 3,424 | 3,400 | 3,486 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest expense |
8,801 | 8,699 | 8,785 | 8,540 | 8,418 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income |
26,207 | 25,616 | 24,021 | 24,227 | 24,464 | |||||||||||||||
| Provision for loan losses |
1,809 | 1,255 | 1,129 | 2,046 | 2,589 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income after provision for loan losses |
24,398 | 24,361 | 22,892 | 22,181 | 21,875 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-interest income |
||||||||||||||||||||
| Fees and service charges |
498 | 1,289 | 663 | 1,340 | 794 | |||||||||||||||
| (Loss) gain on sale and call of securities |
(22 | ) | 21 | — | — | — | ||||||||||||||
| Gain on sale of loans |
245 | 459 | 300 | 132 | 156 | |||||||||||||||
| (Loss) gain on sale of real estate owned |
(106 | ) | 12 | (15 | ) | 24 | (48 | ) | ||||||||||||
| Income from bank owned life insurance |
1,279 | 1,321 | 1,319 | 1,374 | 1,390 | |||||||||||||||
| Electronic banking fees and charges |
240 | 270 | 283 | 284 | 244 | |||||||||||||||
| Miscellaneous |
119 | 74 | 79 | 57 | 77 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest income |
2,253 | 3,446 | 2,629 | 3,211 | 2,613 | |||||||||||||||
| Non-interest expense |
||||||||||||||||||||
| Salaries and employee benefits |
12,430 | 11,592 | 10,909 | 10,640 | 10,459 | |||||||||||||||
| Net occupancy expense of premises |
2,088 | 1,976 | 1,941 | 1,813 | 1,991 | |||||||||||||||
| Equipment and systems |
2,068 | 2,030 | 2,048 | 2,092 | 2,045 | |||||||||||||||
| Advertising and marketing |
753 | 387 | 549 | 490 | 539 | |||||||||||||||
| Federal deposit insurance premium |
338 | 339 | 305 | 687 | 684 | |||||||||||||||
| Directors’ compensation |
689 | 379 | 225 | 224 | 225 | |||||||||||||||
| Miscellaneous |
2,668 | 2,670 | 2,683 | 1,732 | 2,710 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest expense |
21,034 | 19,373 | 18,660 | 17,678 | 18,653 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income before income taxes |
5,617 | 8,434 | 6,861 | 7,714 | 5,835 | |||||||||||||||
| Income taxes |
1,549 | 2,970 | 2,194 | 2,833 | 1,667 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income |
$ | 4,068 | $ | 5,464 | $ | 4,667 | $ | 4,881 | $ | 4,168 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income per common share (EPS) |
||||||||||||||||||||
| Basic |
$ | 0.05 | $ | 0.06 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||||
| Diluted |
$ | 0.05 | $ | 0.06 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||||
| Dividends declared |
||||||||||||||||||||
| Cash dividends declared per common share |
$ | 0.03 | $ | 0.02 | $ | 0.02 | $ | 0.02 | $ | 0.02 | ||||||||||
| Cash dividends declared |
$ | 2,525 | $ | 1,687 | $ | 1,710 | $ | 1,792 | $ | 1,793 | ||||||||||
| Dividend payout ratio |
62.1 | % | 30.9 | % | 36.6 | % | 36.7 | % | 43.0 | % | ||||||||||
| Weighted average number of common |
||||||||||||||||||||
| Basic |
84,542 | 85,174 | 86,246 | 89,443 | 89,690 | |||||||||||||||
| Diluted |
84,624 | 85,258 | 86,304 | 89,481 | 89,724 | |||||||||||||||
13
| Average Balance Sheet Data |
For the three months ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||
| Assets |
||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||
| Loans receivable, including loans held for sale |
$ | 3,029,151 | $ | 2,899,794 | $ | 2,697,096 | $ | 2,682,755 | $ | 2,564,753 | ||||||||||
| Mortgage-backed securities |
582,591 | 673,569 | 695,876 | 705,962 | 730,810 | |||||||||||||||
| Debt securities: |
||||||||||||||||||||
| Tax-exempt |
116,479 | 112,221 | 109,625 | 109,691 | 109,798 | |||||||||||||||
| Taxable |
441,124 | 419,966 | 442,233 | 459,731 | 474,547 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total debt securities |
557,603 | 532,187 | 551,858 | 569,422 | 584,345 | |||||||||||||||
| Other interest-earning assets |
61,336 | 71,072 | 204,621 | 191,129 | 135,872 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-earning assets |
4,230,681 | 4,176,622 | 4,149,451 | 4,149,268 | 4,015,780 | |||||||||||||||
| Non-interest-earning assets |
352,419 | 351,458 | 359,514 | 352,841 | 356,578 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 4,583,100 | $ | 4,528,080 | $ | 4,508,965 | $ | 4,502,109 | $ | 4,372,358 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Liabilities and Stockholders’ Equity |
||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||
| Deposits: |
||||||||||||||||||||
| Interest-bearing demand |
$ | 756,520 | $ | 761,765 | $ | 748,516 | $ | 726,327 | $ | 725,070 | ||||||||||
| Savings and club |
520,572 | 518,225 | 515,615 | 519,055 | 515,762 | |||||||||||||||
| Certificates of deposit |
1,242,757 | 1,224,592 | 1,215,081 | 1,200,874 | 1,177,147 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing deposits |
2,519,849 | 2,504,582 | 2,479,212 | 2,446,256 | 2,417,979 | |||||||||||||||
| Borrowings: |
||||||||||||||||||||
| Federal Home Loan Bank Advances |
643,504 | 594,238 | 577,305 | 585,085 | 585,329 | |||||||||||||||
| Other borrowings |
44,940 | 35,273 | 33,530 | 32,183 | 32,598 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total borrowings |
688,444 | 629,511 | 610,835 | 617,268 | 617,927 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing liabilities |
3,208,293 | 3,134,093 | 3,090,047 | 3,063,524 | 3,035,906 | |||||||||||||||
| Non-interest-bearing liabilities: |
||||||||||||||||||||
| Non-interest-bearing deposits |
246,449 | 245,928 | 243,964 | 232,698 | 217,841 | |||||||||||||||
| Other non-interest-bearing liabilities |
25,028 | 31,781 | 47,092 | 41,577 | 41,480 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest-bearing liabilities |
271,477 | 277,709 | 291,056 | 274,275 | 259,321 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
3,479,770 | 3,411,802 | 3,381,103 | 3,337,799 | 3,295,227 | |||||||||||||||
| Stockholders’ equity |
1,103,330 | 1,116,278 | 1,127,862 | 1,164,310 | 1,167,131 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and stockholders’ equity |
$ | 4,583,100 | $ | 4,528,080 | $ | 4,508,965 | $ | 4,502,109 | $ | 4,462,358 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Average interest-earning assets to average |
131.87 | % | 133.26 | % | 134.28 | % | 135.44 | % | 135.24 | % | ||||||||||
14
| Performance Ratio Highlights |
For the three months ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||
| Average yield on interest-earning assets: |
||||||||||||||||||||
| Loans receivable, including loans held for sale |
3.73 | % | 3.78 | % | 3.81 | % | 3.83 | % | 3.85 | % | ||||||||||
| Mortgage-backed securities |
2.21 | % | 2.24 | % | 2.26 | % | 2.28 | % | 2.35 | % | ||||||||||
| Debt securities: |
||||||||||||||||||||
| Tax-exempt |
2.00 | % | 2.00 | % | 2.01 | % | 2.01 | % | 2.01 | % | ||||||||||
| Taxable |
2.26 | % | 2.04 | % | 1.85 | % | 1.73 | % | 1.68 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total debt securities |
2.20 | % | 2.04 | % | 1.88 | % | 1.79 | % | 1.74 | % | ||||||||||
| Other interest-earning assets |
3.13 | % | 2.37 | % | 1.14 | % | 1.04 | % | 1.36 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-earning assets |
3.31 | % | 3.29 | % | 3.16 | % | 3.16 | % | 3.20 | % | ||||||||||
| Average cost of interest-bearing liabilities: |
||||||||||||||||||||
| Deposits: |
||||||||||||||||||||
| Interest-bearing demand |
0.65 | % | 0.62 | % | 0.63 | % | 0.62 | % | 0.60 | % | ||||||||||
| Savings and club |
0.12 | % | 0.12 | % | 0.15 | % | 0.16 | % | 0.16 | % | ||||||||||
| Certificates of deposit |
1.30 | % | 1.33 | % | 1.31 | % | 1.27 | % | 1.23 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing deposits |
0.86 | % | 0.86 | % | 0.87 | % | 0.84 | % | 0.82 | % | ||||||||||
| Borrowings: |
||||||||||||||||||||
| Federal Home Loan Bank Advances |
2.08 | % | 2.20 | % | 2.35 | % | 2.30 | % | 2.35 | % | ||||||||||
| Other borrowings |
0.35 | % | 0.29 | % | 0.42 | % | 0.50 | % | 0.51 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total borrowings |
1.96 | % | 2.09 | % | 2.24 | % | 2.20 | % | 2.26 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-bearing liabilities |
1.10 | % | 1.11 | % | 1.14 | % | 1.12 | % | 1.11 | % | ||||||||||
| Interest rate spread (1) |
2.21 | % | 2.18 | % | 2.02 | % | 2.04 | % | 2.09 | % | ||||||||||
| Net interest margin (2) |
2.48 | % | 2.45 | % | 2.32 | % | 2.34 | % | 2.38 | % | ||||||||||
| Non-interest income to average
assets |
0.20 | % | 0.30 | % | 0.23 | % | 0.29 | % | 0.23 | % | ||||||||||
| Non-interest expense to average
assets |
1.84 | % | 1.71 | % | 1.66 | % | 1.57 | % | 1.67 | % | ||||||||||
| Efficiency ratio (3) |
73.91 | % | 66.66 | % | 70.02 | % | 64.43 | % | 68.89 | % | ||||||||||
| Return on average assets (annualized) |
0.36 | % | 0.48 | % | 0.41 | % | 0.43 | % | 0.37 | % | ||||||||||
| Return on average equity (annualized) |
1.47 | % | 1.96 | % | 1.66 | % | 1.68 | % | 1.43 | % | ||||||||||
| (1) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
| (2) | Net interest income divided by average interest-earning assets. |
| (3) | Non-interest expense divided by the sum of net interest income and non-interest income. |
15