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Section 1: 8-K (8-K)

krny-8k_20190130.htm

 

 

 

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): January 30, 2019

 

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 Number)

(IRS 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 (see General Instructions A.2. below):

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 2.02Results of Operation and Financial Condition

On January 30, 2019, Kearny Financial Corp. (the “Company”), the holding company for Kearny Bank, issued a press release reporting its financial results for the second quarter ended December 31, 2018.

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 9.01Financial Statements and Exhibits

(a)Financial Statements of Business Acquired.  Not applicable.

(b)Pro Forma Financial Information. Not applicable.

(c)Shell Company Transaction. Not applicable.

(d)Exhibits.

 

Exhibit Number

 

Description

99.1

 

Press release dated January 30, 2019.

 


 

 

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 thereunto duly authorized.

 

 

 

KEARNY FINANCIAL CORP.

 

 

 

 

Date: January 31, 2019

 

By:

/s/ Craig L. Montanaro

 

 

 

Craig L. Montanaro

 

 

 

President and Chief Executive Officer

 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

krny-ex991_6.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

January 30, 2019

 

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 SECOND QUARTER 2019 OPERATING RESULTS

 

Fairfield, New Jersey, January 30, 2019 – Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), today reported net income for the quarter ended December 31, 2018 of $10.8 million, or $0.12 per basic and diluted share as compared to net income of $11.1 million, or $0.12 per basic and diluted share, for the quarter ended September 30, 2018.

 

Craig L. Montanaro, President and Chief Executive Officer, commented, “We are pleased to report this quarter’s results which were highlighted by strong growth in loans and deposits, coupled with the continuation of our outstanding asset quality trends.  Recognizing the challenges presented by the flat yield curve and rising funding costs, our strategic focus is on the execution of initiatives designed to grow our core deposit franchise and build long-term shareholder value.  These initiatives include the acceleration of our efforts to increase digital channel adoption, the robust analysis of retail branch consolidation opportunities and the selective opening of low-cost, technology-driven retail locations in highly attractive markets.  As a complement to these strategies we remain steadfast in our commitment to prudently manage capital as evidenced by the increase of our quarterly cash dividend and the repurchase of 3.8 million shares of common stock during the quarter.”

Balance Sheet Highlights

 

Total loans, excluding loans held for sale and the allowance for loan losses, increased by $92.9 million to $4.75 billion, or 70.9% of total assets, at December 31, 2018 from $4.66 billion, or 70.0% of total assets, at September 30, 2018.  Commercial mortgage loans comprised $62.9 million of this increase whose aggregate balances represented 68.9% of total loans at December 31, 2018.

 

Total deposits increased by $218.6 million to $4.17 billion at December 31, 2018, from $3.95 billion at September 30, 2018.  The net increase in deposits reflected increases of $85.7 million and $132.9 million in retail and wholesale deposits, respectively.

 

Total borrowings decreased by $108.9 million to $1.31 billion at December 31, 2018, from $1.42 billion at September 30, 2018.  The net decrease in borrowings reflected the maturity of $69.5 million in long-term Federal Home Loan Bank (“FHLB”) advances, a $60.0 million decrease in the balance of overnight borrowings and a $6.9 million decrease in depositor sweep account balances.  These decreases were partially offset by the addition of a $27.0 million FHLB Community Investment Program (“CIP”) long-term advance during the period.

Earnings Highlights

 

Interest income totaled $60.0 million for the quarter ended December 31, 2018, an increase of $1.8 million or 3.1% from the quarter ended September 30, 2018.  Despite this achievement, interest expense increased by $2.6 million between the same comparative periods resulting in an $831,000 decrease in net interest income to $39.3 million for the quarter ended December 31, 2018, from $40.2 million for the quarter ended September 30, 2018.  

 

The Company’s net interest margin decreased to 2.56% for the quarter ended December 31, 2018 from 2.68% for the quarter ended September 30, 2018, primarily driven by a 15 basis point increase in the cost of interest-bearing liabilities that was partially offset by a two basis point increase in the yield on earning assets.

1

 


The Company’s non-interest income continued to supplement and diversify its sources of revenue.

 

Fees and service charges increased by $85,000 to $1.3 million for the quarter ended December 31, 2018 compared to $1.2 million for the quarter ended September 30, 2018.

 

Aggregate loan sale gains totaled $101,000 for the quarter ended December 31, 2018 compared to $132,000 for the quarter ended September 30, 2018.  The modest decrease in gains on sale of loans reflected a seasonal decline in the volume of loans sold between comparative periods.

The Company continued to evaluate and implement tactics and strategies designed to improve operating efficiency, make more effective use of its supporting infrastructure and manage its effective income tax rate.

 

Non-interest expense totaled $27.3 million for the quarter ended December 31, 2018, an increase of $813,000 from the quarter ended September 30, 2018.  This increase was largely attributable to $659,000 of non-recurring expenses associated with the October 2018 conversion and integration of Clifton Savings Bank’s core processing system arising from the Company’s prior acquisition of Clifton Bancorp during fiscal 2018 and an increase of $210,000 in advertising and marketing expense.

 

The Company’s ratio of non-interest expense to average assets totaled 1.62% for the quarter ended December 31, 2018 compared to 1.61% for the prior quarter ended September 30, 2018.  For those same comparative periods, the Company’s efficiency ratios were 63.9% and 61.0%, respectively.  

 

Income tax expense totaled $3.6 million for the quarter ended December 31, 2018 as compared to $3.7 million for the quarter ended September 30, 2018 resulting in an effective tax rate of 25.3% and 24.7%, respectively.

Collectively, these factors resulted in a modest decrease in net income for the quarter ended December 31, 2018 compared to the prior quarter ended September 30, 2018.

 

The Company’s return on average assets for the quarter ended December 31, 2018 totaled 0.64% compared to 0.68% for the quarter ended September 30, 2018.  

 

The Company’s return on average equity remained stable, totaling 3.55% for the quarters ended December 31, 2018 and September 30, 2018.  

Asset Quality Highlights

 

Asset quality remained strong throughout the quarter ended December 31, 2018.  The outstanding balance of nonperforming loans totaled $20.8 million, or 0.44% of total loans, at December 31, 2018 as compared to $20.5 million, or 0.44% of total loans, at September 30, 2018.  

 

The allowance for loan losses increased to $33.5 million at December 31, 2018 from $32.7 million at September 30, 2018, resulting in a total loan coverage ratio, representing the balance of the allowance for loan losses as a percentage of total loans, excluding loans held for sale, of 0.70% and 0.69%, respectively.  The total loan coverage ratio for both periods reflects the impact of purchase accounting which generally precludes acquired loan balances from being considered in the balance of the allowance for loan losses at the time of their acquisition.

 

The Company recognized net charge offs totaling approximately $176,000 for the quarter ended December 31, 2018, reflecting an annualized net charge off rate of 0.01% on the average balance of total loans for the period. By comparison, the Company’s net charge offs totaled approximately $234,000 for the quarter ended September 30, 2018, reflecting an annualized net charge off rate of 0.02%.

 

The Company’s provision for loan losses decreased by $1.1 million to $971,000 for the quarter ended December 31, 2018 compared to $2.1 million for the quarter ended September 30, 2018.  The decrease in provision expense was largely attributable to the effects of comparatively lower growth during the quarter ended December 31, 2018 in the performing portion of the loan portfolio that is collectively evaluated for impairment.

2

 


Capital Highlights

 

The Company increased its regular quarterly cash dividend by $0.01 per share, from $0.04 per share during the quarter ended September 30, 2018, to $0.05 per share during the quarter ended December 31, 2018.  In addition to the payment of its regular dividend, the Company paid a special dividend of $0.16 during the quarter ended September 30, 2018. The Company continually evaluates its dividend policies and practices in relation to its overall capital management and shareholder value objectives.

 

During the quarter ended December 31, 2018, the Company repurchased 3,827,925 shares of its common stock at a total cost of $50.2 million and at an average cost of $13.11 per share.  Such shares were repurchased in conjunction with the Company’s third share repurchase program announced in April 2018, through which it authorized the repurchase of 10,238,557 shares, or 10% of its outstanding shares of common stock.  Through December 31, 2018, the Company has repurchased a total of 8,480,985 shares, or 82.8% of the shares authorized for repurchase under this third program, at a total cost of $115.5 million and at an average cost of $13.62 per share.

 

The Company’s and Bank’s regulatory capital ratios at December 31, 2018 were well in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.  

The exhibits that follow this narrative begin with the presentation of the Linked-Quarter Comparative Financial Analysis that supports the discussion above by presenting the Company’s financial condition and operating results for the quarter ended December 31, 2018 compared to those for the prior linked-quarter ended September 30, 2018.  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.  The exhibits conclude with the presentation of the Reconciliation of GAAP to Non-GAAP financial data included in this news release.

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.

 

3

 


Linked-Quarter Comparative Financial Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Balance Sheet

At

 

 

 

 

Variance

 

(Dollars and Shares in Thousands,

December 31,

 

September 30,

 

Variance

 

or Change

 

Except per Share Data, Unaudited)

2018

 

2018

 

or Change

 

Pct.

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

51,483

 

$

44,486

 

$

6,997

 

 

15.7

%

Securities available for sale

 

666,602

 

 

706,240

 

 

(39,638

)

 

-5.6

%

Securities held to maturity

 

598,318

 

 

602,838

 

 

(4,520

)

 

-0.7

%

Loans held-for-sale

 

1,001

 

 

1,503

 

 

(502

)

 

-33.4

%

Loans receivable, including yield adjustments

 

4,753,392

 

 

4,660,507

 

 

92,885

 

 

2.0

%

Less allowance for loan losses

 

(33,526

)

 

(32,731

)

 

(795

)

 

2.4

%

Net loans receivable

 

4,719,866

 

 

4,627,776

 

 

92,090

 

 

2.0

%

Premises and equipment

 

58,414

 

 

57,635

 

 

779

 

 

1.4

%

Federal Home Loan Bank stock

 

64,514

 

 

66,428

 

 

(1,914

)

 

-2.9

%

Accrued interest receivable

 

19,435

 

 

19,455

 

 

(20

)

 

-0.1

%

Goodwill

 

210,895

 

 

210,895

 

 

-

 

 

0.0

%

Core deposit intangible

 

5,743

 

 

6,018

 

 

(275

)

 

-4.6

%

Bank owned life insurance

 

253,009

 

 

251,410

 

 

1,599

 

 

0.6

%

Deferred income taxes, net

 

24,692

 

 

22,136

 

 

2,556

 

 

11.5

%

Other real estate owned

 

508

 

 

674

 

 

(166

)

 

-24.6

%

Other assets

 

27,960

 

 

38,717

 

 

(10,757

)

 

-27.8

%

Total assets

$

6,702,440

 

$

6,656,211

 

$

46,229

 

 

0.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

4,173,434

 

$

3,954,821

 

$

218,613

 

 

5.5

%

Borrowings

 

1,310,547

 

 

1,419,424

 

 

(108,877

)

 

-7.7

%

Advance payments by borrowers for taxes

 

17,201

 

 

10,687

 

 

6,514

 

 

61.0

%

Other liabilities

 

17,997

 

 

35,198

 

 

(17,201

)

 

-48.9

%

Total liabilities

 

5,519,179

 

 

5,420,130

 

 

99,049

 

 

1.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

938

 

 

978

 

 

(40

)

 

-4.1

%

Paid-in capital

 

848,145

 

 

897,551

 

 

(49,406

)

 

-5.5

%

Retained earnings

 

356,993

 

 

350,838

 

 

6,155

 

 

1.8

%

Unearned ESOP shares

 

(31,617

)

 

(32,104

)

 

487

 

 

-1.5

%

Accumulated other comprehensive income, net

 

8,802

 

 

18,818

 

 

(10,016

)

 

-53.2

%

Total stockholders' equity

 

1,183,261

 

 

1,236,081

 

 

(52,820

)

 

-4.3

%

Total liabilities and stockholders' equity

$

6,702,440

 

$

6,656,211

 

$

46,229

 

 

0.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated capital ratios

 

 

 

 

 

 

 

 

 

 

 

 

Equity to assets

 

17.65

%

 

18.57

%

 

-0.92

%

 

 

 

Tangible equity to tangible assets

 

14.90

%

 

15.83

%

 

-0.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share data

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding shares

 

93,772

 

 

97,754

 

 

(3,982

)

 

-4.1

%

Equity per share

$

12.62

 

$

12.64

 

$

(0.02

)

 

-0.2

%

Tangible equity per share (1)

$

10.31

 

$

10.43

 

$

(0.12

)

 

-1.2

%

 

(1)

Tangible equity 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,

December 31,

 

September 30,

 

Variance

 

or Change

 

Except per Share Data, Unaudited)

2018

 

2018

 

or Change

 

Pct.

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

49,015

 

$

47,437

 

$

1,578

 

 

3.3

%

Taxable investment securities

 

9,051

 

 

8,879

 

 

172

 

 

1.9

%

Tax-exempt investment securities

 

713

 

 

716

 

 

(3

)

 

-0.4

%

Other interest-earning assets

 

1,243

 

 

1,174

 

 

69

 

 

5.9

%

Total Interest Income

 

60,022

 

 

58,206

 

 

1,816

 

 

3.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

12,727

 

 

10,539

 

 

2,188

 

 

20.8

%

Borrowings

 

7,946

 

 

7,487

 

 

459

 

 

6.1

%

Total interest expense

 

20,673

 

 

18,026

 

 

2,647

 

 

14.7

%

Net interest income

 

39,349

 

 

40,180

 

 

(831

)

 

-2.1

%

Provision for loan losses

 

971

 

 

2,100

 

 

(1,129

)

 

-53.8

%

Net interest income after provision for

  loan losses

 

38,378

 

 

38,080

 

 

298

 

 

0.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

1,258

 

 

1,173

 

 

85

 

 

7.2

%

Gain on sale of loans

 

101

 

 

132

 

 

(31

)

 

-23.5

%

Gain (loss) on sale of other real estate owned

 

36

 

 

(50

)

 

86

 

 

-172.0

%

Income from bank owned life insurance

 

1,599

 

 

1,594

 

 

5

 

 

0.3

%

Electronic banking fees and charges

 

277

 

 

250

 

 

27

 

 

10.8

%

Miscellaneous

 

38

 

 

83

 

 

(45

)

 

-54.2

%

Total non-interest income

 

3,309

 

 

3,182

 

 

127

 

 

4.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

15,699

 

 

15,642

 

 

57

 

 

0.4

%

Net occupancy expense of premises

 

2,761

 

 

2,736

 

 

25

 

 

0.9

%

Equipment and systems

 

3,377

 

 

2,926

 

 

451

 

 

15.4

%

Advertising and marketing

 

787

 

 

577

 

 

210

 

 

36.4

%

Federal deposit insurance premium

 

421

 

 

465

 

 

(44

)

 

-9.5

%

Directors' compensation

 

746

 

 

758

 

 

(12

)

 

-1.6

%

Miscellaneous

 

3,479

 

 

3,353

 

 

126

 

 

3.8

%

Total non-interest expense

 

27,270

 

 

26,457

 

 

813

 

 

3.1

%

Income before income taxes

 

14,417

 

 

14,805

 

 

(388

)

 

-2.6

%

Income taxes

 

3,649

 

 

3,659

 

 

(10

)

 

-0.3

%

Net income

$

10,768

 

$

11,146

 

$

(378

)

 

-3.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share (EPS)

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.12

 

$

0.12

 

$

-

 

 

 

 

Diluted

$

0.12

 

$

0.12

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared (1)

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

$

0.05

 

$

0.20

 

$

(0.15

)

 

 

 

Cash dividends declared

$

4,082

 

$

19,404

 

$

(15,322

)

 

 

 

Dividend payout ratio

 

37.9

%

 

174.1

%

 

-136.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of  common

shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

92,434

 

 

95,127

 

 

(2,693

)

 

 

 

Diluted

 

92,480

 

 

95,181

 

 

(2,701

)

 

 

 

 

(1)

Dividends declared during the quarter ended September 30, 2018 include a $0.16 special dividend representing a supplemental distribution of net income to stockholders from the fiscal year ended June 30, 2018.

 

5

 


For the three months ended

 

 

 

 

Variance

 

Average Balance Sheet Data

December 31,

 

September 30,

 

Variance

 

or Change

 

(Dollars in Thousands, Unaudited)

2018

 

2018

 

or Change

 

Pct.

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable, including loans held for sale

$

4,758,587

 

$

4,562,375

 

$

196,212

 

 

4.3

%

Taxable investment securities

 

1,158,720

 

 

1,180,655

 

 

(21,935

)

 

-1.9

%

Tax-exempt investment securities

 

135,453

 

 

136,056

 

 

(603

)

 

-0.4

%

Other interest-earning assets

 

87,916

 

 

112,629

 

 

(24,713

)

 

-21.9

%

Total interest-earning assets

 

6,140,676

 

 

5,991,715

 

 

148,961

 

 

2.5

%

Non-interest-earning assets

 

587,921

 

 

596,006

 

 

(8,085

)

 

-1.4

%

Total assets

$

6,728,597

 

$

6,587,721

 

$

140,876

 

 

2.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

$

792,989

 

$

788,148

 

$

4,841

 

 

0.6

%

Savings and club

 

743,676

 

 

747,743

 

 

(4,067

)

 

-0.5

%

Certificates of deposit

 

2,214,932

 

 

2,046,997

 

 

167,935

 

 

8.2

%

Total interest-bearing deposits

 

3,751,597

 

 

3,582,888

 

 

168,709

 

 

4.7

%

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

1,293,470

 

 

1,350,113

 

 

(56,643

)

 

-4.2

%

Other borrowings

 

119,281

 

 

40,981

 

 

78,300

 

 

191.1

%

Total borrowings

 

1,412,751

 

 

1,391,094

 

 

21,657

 

 

1.6

%

Total interest-bearing liabilities

 

5,164,348

 

 

4,973,982

 

 

190,366

 

 

3.8

%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

315,165

 

 

314,114

 

 

1,051

 

 

0.3

%

Other non-interest-bearing liabilities

 

37,374

 

 

43,533

 

 

(6,159

)

 

-14.1

%

Total non-interest-bearing liabilities

 

352,539

 

 

357,647

 

 

(5,108

)

 

-1.4

%

Total liabilities

 

5,516,887

 

 

5,331,629

 

 

185,258

 

 

3.5

%

Stockholders' equity

 

1,211,710

 

 

1,256,092

 

 

(44,382

)

 

-3.5

%

Total liabilities and stockholders' equity

$

6,728,597

 

$

6,587,721

 

$

140,876

 

 

2.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Average interest-earning assets to average

interest-bearing liabilities

 

118.91

%

 

120.46

%

 

-1.56

%

 

-1.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 


For the three months ended

 

 

 

 

Performance Ratio Highlights

December 31,

 

September 30,

 

Variance

 

 

2018

 

2018

 

or Change

 

Average yield on interest-earning assets:

 

 

 

 

 

 

 

 

 

Loans receivable, including loans held for sale

 

4.12

%

 

4.16

%

 

-0.04

%

Taxable investment securities

 

3.12

%

 

3.01

%

 

0.11

%

Tax-exempt investment securities (1)

 

2.11

%

 

2.10

%

 

0.01

%

Other interest-earning assets

 

5.66

%

 

4.17

%

 

1.49

%

Total interest-earning assets

 

3.91

%

 

3.89

%

 

0.02

%

 

 

 

 

 

 

 

 

 

 

Average cost of interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Interest-bearing demand

 

0.97

%

 

0.86

%

 

0.11

%

Savings and club

 

0.49

%

 

0.41

%

 

0.08

%

Certificates of deposit

 

1.79

%

 

1.58

%

 

0.21

%

Total interest-bearing deposits

 

1.36

%

 

1.18

%

 

0.18

%

Borrowings:

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

2.27

%

 

2.19

%

 

0.08

%

Other borrowings

 

1.99

%

 

0.94

%

 

1.05

%

Total borrowings

 

2.25

%

 

2.15

%

 

0.10

%

Total interest-bearing liabilities

 

1.60

%

 

1.45

%

 

0.15

%

 

 

 

 

 

 

 

 

 

 

Interest rate spread (2)

 

2.31

%

 

2.44

%

 

-0.13

%

Net interest margin (3)

 

2.56

%

 

2.68

%

 

-0.12

%

 

 

 

 

 

 

 

 

 

 

Non-interest income to average assets

(annualized)

 

0.20

%

 

0.19

%

 

0.01

%

Non-interest expense to average assets

(annualized)

 

1.62

%

 

1.61

%

 

0.01

%

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (4)

 

63.93

%

 

61.01

%

 

2.92

%

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

0.64

%

 

0.68

%

 

-0.04

%

Return on average equity (annualized)

 

3.55

%

 

3.55

%

 

0.00

%

 

(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.

 

7

 


Five-Quarter Financial Trend Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Balance Sheet

At

 

(Dollars and Shares in Thousands,

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

Except Per Share Data, Unaudited)

2018

 

2018

 

2018

 

2018

 

2017

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

51,483

 

$

44,486

 

$

128,864

 

$

38,283

 

$

50,685

 

Securities available for sale

 

666,602

 

 

706,240

 

 

725,085

 

 

684,771

 

 

637,671

 

Securities held to maturity

 

598,318

 

 

602,838

 

 

589,730

 

 

459,380

 

 

471,452

 

Loans held-for-sale

 

1,001

 

 

1,503

 

 

863

 

 

2,377

 

 

3,490

 

Loans receivable, including yield adjustments

 

4,753,392

 

 

4,660,507

 

 

4,501,348

 

 

3,351,369

 

 

3,291,516

 

Less allowance for loan losses

 

(33,526

)

 

(32,731

)

 

(30,865

)

 

(30,248

)

 

(30,066

)

Net loans receivable

 

4,719,866

 

 

4,627,776

 

 

4,470,483

 

 

3,321,121

 

 

3,261,450

 

Premises and equipment

 

58,414

 

 

57,635

 

 

56,240

 

 

42,856

 

 

41,829

 

Federal Home Loan Bank stock

 

64,514

 

 

66,428

 

 

59,004

 

 

39,112

 

 

39,113

 

Accrued interest receivable

 

19,435

 

 

19,455

 

 

18,510

 

 

13,926

 

 

13,524

 

Goodwill

 

210,895

 

 

210,895

 

 

210,895

 

 

108,591

 

 

108,591

 

Core deposit intangible

 

5,743

 

 

6,018

 

 

6,295

 

 

206

 

 

233

 

Bank owned life insurance

 

253,009

 

 

251,410

 

 

249,816

 

 

184,981

 

 

183,754

 

Deferred income taxes, net

 

24,692

 

 

22,136

 

 

23,754

 

 

3,898

 

 

6,941

 

Other real estate owned

 

508

 

 

674

 

 

725

 

 

1,094

 

 

1,693

 

Other assets

 

27,960

 

 

38,717

 

 

39,610

 

 

33,104

 

 

23,421

 

Total assets

$

6,702,440

 

$

6,656,211

 

$

6,579,874

 

$

4,933,700

 

$

4,843,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

4,173,434