Kearny Financial Corp. Reports Fourth Quarter and Fiscal Year End 2021 Results
FAIRFIELD, N.J., July 29, 2021 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported net income for the quarter ended June 30, 2021 of $18.5 million, or $0.24 per diluted share, compared to $16.4 million, or $0.20 per diluted share, for the quarter ended March 31, 2021. The results for the quarter ended June 30, 2021 were favorably impacted by a provision for credit loss reversal of $4.9 million, reflecting the impact of an improved economic forecast and credit risk outlook.
For the fiscal year ended June 30, 2021, the Company reported net income of $63.2 million, or $0.77 per diluted share, compared to $45.0 million, or $0.55 per diluted share, for the fiscal year ended June 30, 2020. Excluding the impact of non-recurring items, including items associated with the Company’s acquisition of MSB Financial Corp. (“MSB”), net income for the fiscal year ended June 30, 2021 would have been $66.7 million, or $0.81 per diluted share.
Craig L. Montanaro, President and Chief Executive Officer, commented, “This fiscal year, while challenging in many respects, represented a significant step forward in our evolution as a full-service community bank. The incremental reallocation of our balance sheet, with a particular focus on high-value commercial loan and deposit relationships, has led to noteworthy improvements in net interest margin, net income and earnings per share. Along with our improved performance has come a cultural evolution for the Company, with an enhanced focus, both strategically and financially, on technological excellence and the client experience. While these elements are crucial to our future prosperity, we must stay true to our core beliefs that our people, performance and relationships are the bedrock of our success. To us, this means never straying from our roots in the communities that we serve and retaining the local decision making authority which has defined us for over 130 years.”
Fiscal Year End 2021 Highlights
Net income increased 40.6%, to $63.2 million, while earnings per share increased 39.5%, to $0.77 per diluted share.
Net interest margin increased 30 basis points to 2.75%, while net interest income increased 23.5% to $184.5 million.
Completed acquisition of MSB on July 10, 2020 adding total assets of $581.9 million, net loans of $530.2 million and total deposits of $460.2 million.
Core non-maturity deposits, excluding acquired balances, grew $712.5 million, or 27.5%, including organic growth of 29.4% in non-interest-bearing deposits.
Gain on sale of loans increased $2.4 million, or 75.0%, largely driven by increased mortgage banking activity.
Balance Sheet Summary
Total assets at June 30, 2021, were $7.28 billion, a decrease of $74.3 million, or 1.0%, from March 31, 2021 and an increase of $525.6 million, or 7.8%, from June 30, 2020.
Deposits totaled $5.49 billion at June 30, 2021, an increase of $110.9 million, or 2.1%, from March 31, 2021 and $1.1 billion, or 23.8%, from June 30, 2020. For those same comparative periods core non-maturity deposits increased by $33.1 million and $1.02 billion, respectively.
Loans receivable totaled $4.85 billion at June 30, 2021, an increase of $53.2 million, or 1.1%, from March 31, 2021 and $353.0 million, or 7.8%, from June 30, 2020.
Investment securities totaled $1.72 billion at June 30, 2021, a decrease of $91.1 million, or 5.0%, from March 31, 2021 and an increase of $296.7 million, or 20.9%, from June 30, 2020.
Borrowings totaled $685.9 million at June 30, 2021, a decrease of $179.9 million, or 20.8% from March 31, 2021 and $487.3 million, or 41.5% from June 30, 2020.
Operating Results
Performance Highlights
Return on average assets (“ROAA”) improved to 1.01% and 0.86%, for the quarter and year ended June 30, 2021, respectively. Excluding the impact of non-recurring items, ROAA would have been 1.04% and 0.91% for the same comparative periods.
Return on average equity improved to 7.01% and 5.79% for the quarter and year ended June 30, 2021, respectively, while return on average tangible equity improved to 8.81% and 7.22% for the same comparative periods. Excluding the impact of non-recurring items, return on average tangible equity would have been 9.04% and 7.61% for the quarter and year ended June 30, 2021, respectively.
Net Interest Income and Net Interest Margin
Net interest margin increased four basis points to 2.87% for the quarter ended June 30, 2021 and 30 basis points to 2.75% for the year ended June 30, 2021. The increase in net interest margin was largely the result of a reduction in the cost of interest-bearing liabilities and an increase in the average balance of non-interest-bearing deposits, partially offset by a decrease in the yield on interest-earning assets.
Net interest income increased by $532,000 to $48.2 million for the quarter ended June 30, 2021 from $47.6 million for the quarter ended March 31, 2021. Included in net interest income, for the quarters ended June 30, 2021 and March 31, 2021, was purchase accounting accretion of $3.1 million and $4.8 million, respectively. For the year ended June 30, 2021, net interest income increased by $35.2 million, or 23.5%, to $184.5 million from $149.4 million for the year ended June 30, 2020.
Non-Interest Income
Fees and service charges totaled $1.3 million for the quarter ended June 30, 2021, unchanged from the quarter ended March 31, 2021. For the year ended June 30, 2021 fees and service charges decreased by $1.0 million to $5.6 million, largely attributable to a decrease of $836,000 in loan pre-payment penalty income to $3.8 million.
Gain on sale and call of securities totaled $313,000 for the quarter ended June 30, 2021 compared to $18,000 for the quarter ended March 31, 2021. For the year ended June 30, 2021, gain on sale and call of securities totaled $767,000 compared to $2.3 million for the year ended June 30, 2020.
Gain on sale of loans decreased by $580,000 to $363,000 for the quarter ended June 30, 2021 from $943,000 for the quarter ended March 31, 2021. The decrease was largely attributable to the strategic decision to retain a comparatively greater percentage of originated loans within the portfolio. For the year ended June 30, 2021, gain on sale of loans totaled $5.6 million compared to $3.2 million for the year ended June 30, 2020. This growth largely reflected increases in both the volume and net price of residential mortgage loans originated and sold during the period and, to a lesser extent, $352,000 of gains on sale of Paycheck Protection Program (“PPP”) loans.
For the year ended June 30, 2021, a non-recurring bargain purchase gain of $3.1 million was recognized in conjunction with the acquisition of MSB.
Included in other income for the quarter and year ended June 30, 2021 were non-recurring gains of $205,000 and $1.0 million, respectively, attributable to the sale of properties which previously served as a Kearny Bank retail branch locations and were sold in connection with branch consolidation activities.
Non-Interest Expense
Non-interest expense increased by $2.2 million to $32.0 million for the quarter ended June 30, 2021 compared to $29.8 million for the quarter ended March 31, 2021. The increase was largely attributable to asset impairment charges of $2.0 million as described in further detail below.
Non-interest expense increased by $18.3 million to $125.9 million for the year ended June 30, 2021 compared to $107.6 million for the year ended June 30, 2020. This increase was largely attributable to increases in personnel, technology and occupancy expense associated, in part, with the MSB acquisition, along with increases in merger-related expense, FDIC insurance expense and other expense.
Included in other expense for the quarter and year ended June 30, 2021 were asset impairment charges totaling $2.0 million and $2.7 million, respectively. These charges, for the quarter and year ended June 30, 2021, primarily reflected net losses of $1.2 million and $1.9 million, respectively, arising from the transfer of various branch and administrative facilities to held-for-sale status. An additional impairment of $800,000 was recognized during the quarter ended June, 30, 2021 attributable to the partial write-down of the value of the Company’s equity investment in a start-up financial technology company whose remaining book value totaled $200,000 as of that date.
Also included in other expense, for the quarter and year ended June 30, 2021, were provisions for credit losses on off-balance sheet credit exposures, as required under the Current Expected Credit Loss (“CECL”) standard, of $443,000 and $1.2 million, respectively. No such expense was recorded in the fiscal year ended June 30, 2020.
The efficiency and non-interest expense ratios were 60.86% and 1.75%, respectively, for the quarter ended June 30, 2021 and 60.16% and 1.72%, respectively, for the year ended June 30, 2021. Excluding the impact of non-recurring items, the efficiency and non-interest expense ratios for the year ended June 30, 2021 would have been 58.22% and 1.62%, respectively.
Income Taxes
Income tax expense totaled $7.0 million for the quarter ended June 30, 2021 compared to $5.7 million for the quarter ended March 31, 2021, resulting in effective tax rates of 27.6% and 25.9%, respectively. For the year ended June 30, 2021, income tax expense was $21.3 million compared to $12.3 million for the year ended June 30, 2020 resulting in effective tax rates of 25.2% and 21.5%, respectively.
Asset Quality
The balance of non-performing loans totaled $79.8 million, or 1.64% of total loans, at June 30, 2021, compared to $71.4 million, or 1.49% of total loans, at March 31, 2021 and $36.7 million, or 0.82% of total loans, at June 30, 2020.
As of June 30, 2021, the Company had active COVID-19 payment deferrals on 10 loans totaling $5.6 million, representing 0.12% of total loans.
Net charge offs totaled $656,000, or 0.05% of average loans, for the quarter ended June 30, 2021 compared to $750,000, or 0.06% of average loans, for the quarter ended March 31, 2021. Net charge offs for the quarter were largely attributable to the partial charge-off of one wholesale commercial business loan totaling $592,000. For the year ended June 30, 2021, net charge offs totaled $1.6 million, or 0.03% of average loans, compared to $144,000, or 0.00% of average loans, for the year ended June 30, 2020.
For the quarter and year ended June 30, 2021, the Company recorded provision for credit loss reversals of $4.9 million and $1.1 million, respectively, compared to provision for credit losses of $1.1 million for the quarter ended March 31, 2021 and $4.2 million for the year ended June 30, 2020. The provision reversals for the quarter and year ended June 30, 2021 primarily reflected an improved economic forecast and credit risk outlook resulting in a release of reserves within multiple loan segments. By comparison, the provision for the year ended June 30, 2020 was largely attributable to increases in qualitative factors associated with the economic impact of COVID-19.
The Allowance for Credit Losses (“ACL”) totaled $58.2 million, or 1.19% of total loans, at June 30, 2021, a decrease from $63.8 million, or 1.32% of total loans at March 31, 2021 and an increase from $37.3 million, or 0.82% of total loans, at June 30, 2020. As previously disclosed, on July 1, 2020, the Company adopted ASU 2016-13, also known as the CECL standard. At adoption, the Company increased its ACL by $19.6 million and $536,000, respectively, for loans and off-balance sheet credit exposures and recognized a cumulative effect adjustment that reduced stockholders’ equity by $14.2 million, net of tax.
On July 10, 2020 the Company completed its acquisition of MSB, which resulted in an increase to the ACL of $9.0 million. Of this increase, $3.9 million was attributable to PCD loans and was recorded as an adjustment to their amortized cost basis. The remaining $5.1 million increase was attributable to non-PCD loans and was recorded via a provision for credit losses.
Capital
During the quarter and year ended June 30, 2021, the Company repurchased 3,031,820 and 10,567,073 shares of common stock at a cost of $38.5 million and $119.0 million, or $12.68 and $11.26 per share, respectively.
For the quarter ended June 30, 2021, the Company increased its quarterly cash dividend to $0.10 per common share. For the year ended June 30, 2021, cash dividends paid totaled $0.35 per share, an increase of 20.7% from the year ended June 30, 2020.
Book value per share totaled $13.21 at June 30, 2021, an increase of $0.23 from March 31, 2021 and $0.25 from June 30, 2020, while tangible book value per share totaled $10.49 at June 30, 2021, an increase of $0.13 from March 31, 2021 and $0.10 from June 30, 2020.
At June 30, 2021, the Company’s ratio of tangible equity to tangible assets equaled 11.72% and the regulatory capital ratios, of both the Company and the Bank, were in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.
Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.
In addition, the COVID-19 pandemic has had, and may continue to have, an adverse impact on the Company, its clients and the communities it serves. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including whether the coronavirus can continue to be controlled and abated and if the economy is able to remain open. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially remain open, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for credit losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; due to a decline in our stock price or other factors, goodwill may become impaired and be required to be written down; and our cyber security risks are increased as the result of an increase in the number of employees working remotely.
Category: Earnings
Linked-Quarter Comparative Financial Analysis | ||||||||||||
Summary Balance Sheet | At | Variance | ||||||||||
(Dollars and Shares in Thousands, | June 30, | March 31, | Variance | or Change | ||||||||
Except Per Share Data, Unaudited) | 2021 | 2021 | or Change | Pct. | ||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 67,855 | $ | 108,991 | $ | (41,136 | ) | -37.7 | % | |||
Securities available for sale | 1,676,864 | 1,778,970 | (102,106 | ) | -5.7 | % | ||||||
Securities held to maturity | 38,138 | 27,168 | 10,970 | 40.4 | % | |||||||
Loans held-for-sale | 16,492 | 5,172 | 11,320 | 218.9 | % | |||||||
Loans receivable | 4,851,394 | 4,798,239 | 53,155 | 1.1 | % | |||||||
Less: allowance for credit losses on loans | (58,165 | ) | (63,762 | ) | 5,597 | -8.8 | % | |||||
Net loans receivable | 4,793,229 | 4,734,477 | 58,752 | 1.2 | % | |||||||
Premises and equipment | 56,338 | 60,360 | (4,022 | ) | -6.7 | % | ||||||
Federal Home Loan Bank stock | 36,615 | 45,578 | (8,963 | ) | -19.7 | % | ||||||
Accrued interest receivable | 19,362 | 20,562 | (1,200 | ) | -5.8 | % | ||||||
Goodwill | 210,895 | 210,895 | - | 0.0 | % | |||||||
Core deposit intangible | 3,705 | 3,888 | (183 | ) | -4.7 | % | ||||||
Bank owned life insurance | 283,310 | 281,765 | 1,545 | 0.5 | % | |||||||
Deferred income taxes, net | 29,323 | 32,230 | (2,907 | ) | -9.0 | % | ||||||
Other real estate owned | 178 | 178 | - | 0.0 | % | |||||||
Other assets | 51,431 | 47,760 | 3,671 | 7.7 | % | |||||||
Total assets | $ | 7,283,735 | $ | 7,357,994 | $ | (74,259 | ) | -1.0 | % | |||
Liabilities | ||||||||||||
Deposits: | ||||||||||||
Non-interest-bearing | $ | 593,718 | $ | 545,746 | $ | 47,972 | 8.8 | % | ||||
Interest-bearing | 4,891,588 | 4,828,706 | 62,882 | 1.3 | % | |||||||
Total deposits | 5,485,306 | 5,374,452 | 110,854 | 2.1 | % | |||||||
Borrowings | 685,876 | 865,763 | (179,887 | ) | -20.8 | % | ||||||
Advance payments by borrowers for taxes | 15,752 | 15,300 | 452 | 3.0 | % | |||||||
Other liabilities | 53,857 | 38,667 | 15,190 | 39.3 | % | |||||||
Total liabilities | 6,240,791 | 6,294,182 | (53,391 | ) | -0.8 | % | ||||||
Stockholders' Equity | ||||||||||||
Common stock | 790 | 820 | (30 | ) | -3.7 | % | ||||||
Paid-in capital | 654,396 | 691,280 | (36,884 | ) | -5.3 | % | ||||||
Retained earnings | 408,367 | 397,594 | 10,773 | 2.7 | % | |||||||
Unearned ESOP shares | (26,753 | ) | (27,239 | ) | 486 | -1.8 | % | |||||
Accumulated other comprehensive income | 6,144 | 1,357 | 4,787 | 352.8 | % | |||||||
Total stockholders' equity | 1,042,944 | 1,063,812 | (20,868 | ) | -2.0 | % | ||||||
Total liabilities and stockholders' equity | $ | 7,283,735 | $ | 7,357,994 | $ | (74,259 | ) | -1.0 | % | |||
Consolidated capital ratios | ||||||||||||
Equity to assets | 14.32 | % | 14.46 | % | -0.14 | % | ||||||
Tangible equity to tangible assets (1) | 11.72 | % | 11.89 | % | -0.17 | % | ||||||
Share data | ||||||||||||
Outstanding shares | 78,965 | 81,943 | (2,978 | ) | -3.6 | % | ||||||
Book value per share | $ | 13.21 | $ | 12.98 | $ | 0.23 | 1.7 | % | ||||
Tangible book value per share (2) | $ | 10.49 | $ | 10.36 | $ | 0.13 | 1.2 | % | ||||
____________________
(1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. | |
(2) | Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. | |
Summary Income Statement | For the three months ended | Variance | ||||||||||
(Dollars and Shares in Thousands, | June 30, | March 31, | Variance | or Change | ||||||||
Except Per Share Data, Unaudited) | 2021 | 2021 | or Change | Pct. | ||||||||
Interest income | ||||||||||||
Loans | $ | 47,562 | $ | 49,307 | $ | (1,745 | ) | -3.5 | % | |||
Taxable investment securities | 8,304 | 7,891 | 413 | 5.2 | % | |||||||
Tax-exempt investment securities | 355 | 410 | (55 | ) | -13.4 | % | ||||||
Other interest-earning assets | 549 | 705 | (156 | ) | -22.1 | % | ||||||
Total Interest Income | 56,770 | 58,313 | (1,543 | ) | -2.6 | % | ||||||
Interest expense | ||||||||||||
Deposits | 5,156 | 6,670 | (1,514 | ) | -22.7 | % | ||||||
Borrowings | 3,451 | 4,012 | (561 | ) | -14.0 | % | ||||||
Total interest expense | 8,607 | 10,682 | (2,075 | ) | -19.4 | % | ||||||
Net interest income | 48,163 | 47,631 | 532 | 1.1 | % | |||||||
(Reversal of) provision for credit losses | (4,941 | ) | 1,126 | (6,067 | ) | -538.8 | % | |||||
Net interest income after (reversal of) provision | 53,104 | 46,505 | 6,599 | 14.2 | % | |||||||
Non-interest income | ||||||||||||
Fees and service charges | 1,325 | 1,325 | - | 0.0 | % | |||||||
Gain on sale and call of securities | 313 | 18 | 295 | 1638.9 | % | |||||||
Gain on sale of loans | 363 | 943 | (580 | ) | -61.5 | % | ||||||
Income from bank owned life insurance | 1,545 | 1,530 | 15 | 1.0 | % | |||||||
Electronic banking fees and charges | 452 | 456 | (4 | ) | -0.9 | % | ||||||
Other income | 400 | 1,194 | (794 | ) | -66.5 | % | ||||||
Total non-interest income | 4,398 | 5,466 | (1,068 | ) | -19.5 | % | ||||||
Non-interest expense | ||||||||||||
Salaries and employee benefits | 17,777 | 16,965 | 812 | 4.8 | % | |||||||
Net occupancy expense of premises | 2,998 | 3,433 | (435 | ) | -12.7 | % | ||||||
Equipment and systems | 3,575 | 3,823 | (248 | ) | -6.5 | % | ||||||
Advertising and marketing | 581 | 567 | 14 | 2.5 | % | |||||||
Federal deposit insurance premium | 490 | 488 | 2 | 0.4 | % | |||||||
Directors' compensation | 749 | 748 | 1 | 0.1 | % | |||||||
Other expense | 5,816 | 3,792 | 2,024 | 53.4 | % | |||||||
Total non-interest expense | 31,986 | 29,816 | 2,170 | 7.3 | % | |||||||
Income before income taxes | 25,516 | 22,155 | 3,361 | 15.2 | % | |||||||
Income taxes | 7,033 | 5,732 | 1,301 | 22.7 | % | |||||||
Net income | $ | 18,483 | $ | 16,423 | $ | 2,060 | 12.5 | % | ||||
Net income per common share (EPS) | ||||||||||||
Basic | $ | 0.24 | $ | 0.20 | $ | 0.04 | ||||||
Diluted | $ | 0.24 | $ | 0.20 | $ | 0.04 | ||||||
Dividends declared | ||||||||||||
Cash dividends declared per common share | $ | 0.10 | $ | 0.09 | $ | 0.01 | ||||||
Cash dividends declared | $ | 7,710 | $ | 7,205 | $ | 505 | ||||||
Dividend payout ratio | 41.7 | % | 43.9 | % | -2.2 | % | ||||||
Weighted average number of common | ||||||||||||
Basic | 77,658 | 80,673 | (3,015 | ) | ||||||||
Diluted | 77,680 | 80,690 | (3,010 | ) | ||||||||
For the three months ended | Variance | |||||||||||
Average Balance Sheet Data | June 30, | March 31, | Variance | or Change | ||||||||
(Dollars in Thousands, Unaudited) | 2021 | 2021 | or Change | Pct. | ||||||||
Assets | ||||||||||||
Interest-earning assets: | ||||||||||||
Loans receivable, including loans held for sale | $ | 4,817,980 | $ | 4,816,592 | $ | 1,388 | 0.0 | % | ||||
Taxable investment securities | 1,720,838 | 1,674,223 | 46,615 | 2.8 | % | |||||||
Tax-exempt investment securities | 63,047 | 73,573 | (10,526 | ) | -14.3 | % | ||||||
Other interest-earning assets | 117,212 | 169,291 | (52,079 | ) | -30.8 | % | ||||||
Total interest-earning assets | 6,719,077 | 6,733,679 | (14,602 | ) | -0.2 | % | ||||||
Non-interest-earning assets | 609,762 | 617,440 | (7,678 | ) | -1.2 | % | ||||||
Total assets | $ | 7,328,839 | $ | 7,351,119 | $ | (22,280 | ) | -0.3 | % | |||
Liabilities and Stockholders' Equity | ||||||||||||
Interest-bearing liabilities: | ||||||||||||
Deposits: | ||||||||||||
Interest-bearing demand | $ | 1,930,193 | $ | 1,831,617 | $ | 98,576 | 5.4 | % | ||||
Savings | 1,118,402 | 1,084,981 | 33,421 | 3.1 | % | |||||||
Certificates of deposit | 1,934,650 | 1,904,234 | 30,416 | 1.6 | % | |||||||
Total interest-bearing deposits | 4,983,245 | 4,820,832 | 162,413 | 3.4 | % | |||||||
Borrowings: | ||||||||||||
Federal Home Loan Bank advances | 665,802 | 865,690 | (199,888 | ) | -23.1 | % | ||||||
Other borrowings | 6,670 | - | 6,670 | 0.0 | % | |||||||
Total borrowings | 672,472 | 865,690 | (193,218 | ) | -22.3 | % | ||||||
Total interest-bearing liabilities | 5,655,717 | 5,686,522 | (30,805 | ) | -0.5 | % | ||||||
Non-interest-bearing liabilities: | ||||||||||||
Non-interest-bearing deposits | 566,632 | 525,018 | 41,614 | 7.9 | % | |||||||
Other non-interest-bearing liabilities | 52,292 | 57,018 | (4,726 | ) | -8.3 | % | ||||||
Total non-interest-bearing liabilities | 618,924 | 582,036 | 36,888 | 6.3 | % | |||||||
Total liabilities | 6,274,641 | 6,268,558 | 6,083 | 0.1 | % | |||||||
Stockholders' equity | 1,054,198 | 1,082,561 | (28,363 | ) | -2.6 | % | ||||||
Total liabilities and stockholders' equity | $ | 7,328,839 | $ | 7,351,119 | $ | (22,280 | ) | -0.3 | % | |||
Average interest-earning assets to average | 118.80 | % | 118.41 | % | 0.39 | % | 0.3 | % | ||||
For the three months ended | |||||||||
June 30, | March 31, | Variance | |||||||
Performance Ratio Highlights | 2021 | 2021 | or Change | ||||||
Average yield on interest-earning assets: | |||||||||
Loans receivable, including loans held for sale | 3.95 | % | 4.09 | % | -0.14 | % | |||
Taxable investment securities | 1.93 | % | 1.89 | % | 0.04 | % | |||
Tax-exempt investment securities (1) | 2.25 | % | 2.23 | % | 0.02 | % | |||
Other interest-earning assets | 1.87 | % | 1.67 | % | 0.20 | % | |||
Total interest-earning assets | 3.38 | % | 3.46 | % | -0.08 | % | |||
Average cost of interest-bearing liabilities: | |||||||||
Deposits: | |||||||||
Interest-bearing demand | 0.27 | % | 0.34 | % | -0.07 | % | |||
Savings | 0.15 | % | 0.21 | % | -0.06 | % | |||
Certificates of deposit | 0.71 | % | 0.96 | % | -0.25 | % | |||
Total interest-bearing deposits | 0.41 | % | 0.55 | % | -0.14 | % | |||
Borrowings: | |||||||||
Federal Home Loan Bank advances | 2.07 | % | 1.85 | % | 0.22 | % | |||
Other borrowings | 0.07 | % | 0.00 | % | 0.07 | % | |||
Total borrowings | 2.05 | % | 1.85 | % | 0.20 | % | |||
Total interest-bearing liabilities | 0.61 | % | 0.75 | % | -0.14 | % | |||
Interest rate spread (2) | 2.77 | % | 2.71 | % | 0.06 | % | |||
Net interest margin (3) | 2.87 | % | 2.83 | % | 0.04 | % | |||
Non-interest income to average assets | 0.24 | % | 0.30 | % | -0.06 | % | |||
Non-interest expense to average assets | 1.75 | % | 1.62 | % | 0.13 | % | |||
Efficiency ratio (4) | 60.86 | % | 56.15 | % | 4.71 | % | |||
Return on average assets (annualized) | 1.01 | % | 0.89 | % | 0.12 | % | |||
Return on average equity (annualized) | 7.01 | % | 6.07 | % | 0.94 | % | |||
Return on average tangible equity (annualized) (5) | 8.81 | % | 7.57 | % | 1.24 | % | |||
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(1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. | |
(2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. | |
(3) | Net interest income divided by average interest-earning assets. | |
(4) | Non-interest expense divided by the sum of net interest income and non-interest income. | |
(5) | Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets. | |
Year-to-Year Comparative Financial Analysis | ||||||||||||
Summary Balance Sheet | At | Variance | ||||||||||
(Dollars and Shares in Thousands, | June 30, | June 30, | Variance | or Change | ||||||||
Except Per Share Data, Unaudited) | 2021 | 2020 | or Change | Pct. | ||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 67,855 | $ | 180,967 | $ | (113,112 | ) | -62.5 | % | |||
Securities available for sale | 1,676,864 | 1,385,703 | 291,161 | 21.0 | % | |||||||
Securities held to maturity | 38,138 | 32,556 | 5,582 | 17.1 | % | |||||||
Loans held-for-sale | 16,492 | 20,789 | (4,297 | ) | -20.7 | % | ||||||
Loans receivable, including yield adjustments | 4,851,394 | 4,498,397 | 352,997 | 7.8 | % | |||||||
Less: allowance for credit losses on loans | (58,165 | ) | (37,327 | ) | (20,838 | ) | 55.8 | % | ||||
Net loans receivable | 4,793,229 | 4,461,070 | 332,159 | 7.4 | % | |||||||
Premises and equipment | 56,338 | 57,389 | (1,051 | ) | -1.8 | % | ||||||
Federal Home Loan Bank of New York stock | 36,615 | 58,654 | (22,039 | ) | -37.6 | % | ||||||
Accrued interest receivable | 19,362 | 17,373 | 1,989 | 11.4 | % | |||||||
Goodwill | 210,895 | 210,895 | - | 0.0 | % | |||||||
Core deposit intangible | 3,705 | 3,995 | (290 | ) | -7.3 | % | ||||||
Bank owned life insurance | 283,310 | 262,380 | 20,930 | 8.0 | % | |||||||
Deferred income tax assets, net | 29,323 | 25,480 | 3,843 | 15.1 | % | |||||||
Other real estate owned | 178 | 178 | - | 0.0 | % | |||||||
Other assets | 51,431 | 40,746 | 10,685 | 26.2 | % | |||||||
Total assets | $ | 7,283,735 | $ | 6,758,175 | $ | 525,560 | 7.8 | % | ||||
Liabilities | ||||||||||||
Deposits: | ||||||||||||
Non-interest-bearing | $ | 593,718 | $ | 419,138 | $ | 174,580 | 41.7 | % | ||||
Interest-bearing | 4,891,588 | 4,011,144 | 880,444 | 21.9 | % | |||||||
Total deposits | 5,485,306 | 4,430,282 | 1,055,024 | 23.8 | % | |||||||
Borrowings | 685,876 | 1,173,165 | (487,289 | ) | -41.5 | % | ||||||
Advance payments by borrowers for taxes | 15,752 | 16,569 | (817 | ) | -4.9 | % | ||||||
Other liabilities | 53,857 | (125 | ) | -0.2 | % | |||||||
Total liabilities | 6,240,791 | 5,673,998 | 566,793 | 10.0 | % | |||||||
Stockholders' Equity | ||||||||||||
Common stock | 790 | 837 | (47 | ) | -5.6 | % | ||||||
Paid-in capital | 654,396 | 722,871 | (68,475 | ) | -9.5 | % | ||||||
Retained earnings | 408,367 | 387,911 | 20,456 | 5.3 | % | |||||||
Unearned ESOP shares | (26,753 | ) | (28,699 | ) | 1,946 | -6.8 | % | |||||
Accumulated other comprehensive income | 6,144 | 1,257 | 4,887 | 388.8 | % | |||||||
Total stockholders' equity | 1,042,944 | 1,084,177 | (41,233 | ) | -3.8 | % | ||||||
Total liabilities and stockholders' equity | $ | 7,283,735 | $ | 6,758,175 | $ | 525,560 | 7.8 | % | ||||
Consolidated capital ratios | ||||||||||||
Equity to assets | 14.32 | % | 16.04 | % | -1.72 | % | ||||||
Tangible equity to tangible assets (1) | 11.72 | % | 13.29 | % | -1.57 | % | ||||||
Share data | ||||||||||||
Outstanding shares | 78,965 | 83,663 | (4,698 | ) | -5.6 | % | ||||||
Book value per share | $ | 13.21 | $ | 12.96 | $ | 0.25 | 1.9 | % | ||||
Tangible book value per share (2) | $ | 10.49 | $ | 10.39 | $ | 0.10 | 1.0 | % | ||||
Summary Income Statement | For the year ended | Variance | ||||||||||
(Dollars and Shares in Thousands, | June 30, | June 30, | Variance | or Change | ||||||||
Except Per Share Data, Unaudited) | 2021 | 2020 | or Change | Pct. | ||||||||
Interest income | ||||||||||||
Loans | $ | 198,515 | $ | 187,003 | $ | 11,512 | 6.2 | % | ||||
Taxable investment securities | 31,238 | 39,321 | (8,083 | ) | -20.6 | % | ||||||
Tax-exempt investment securities | 1,652 | 2,393 | (741 | ) | -31.0 | % | ||||||
Other interest-earning assets | 2,955 | 4,491 | (1,536 | ) | -34.2 | % | ||||||
Total Interest Income | 234,360 | 233,208 | 1,152 | 0.5 | % | |||||||
Interest expense | ||||||||||||
Deposits | 31,535 | 58,852 | (27,317 | ) | -46.4 | % | ||||||
Borrowings | 18,316 | 25,002 | (6,686 | ) | -26.7 | % | ||||||
Total interest expense | 49,851 | 83,854 | (34,003 | ) | -40.6 | % | ||||||
Net interest income | 184,509 | 149,354 | 35,155 | 23.5 | % | |||||||
(Reversal of) provision for credit losses | (1,121 | ) | 4,197 | (5,318 | ) | -126.7 | % | |||||
Net interest income after (reversal of) provision for credit losses | 185,630 | 145,157 | 40,473 | 27.9 | % | |||||||
Non-interest income | ||||||||||||
Fees and service charges | 5,622 | 6,647 | (1,025 | ) | -15.4 | % | ||||||
Gain on sale and call of securities | 767 | 2,250 | (1,483 | ) | -65.9 | % | ||||||
Gain on sale of loans | 5,574 | 3,186 | 2,388 | 75.0 | % | |||||||
Loss on sale of real estate owned | - | (28 | ) | 28 | -100.0 | % | ||||||
Income from bank owned life insurance | 6,267 | 6,225 | 42 | 0.7 | % | |||||||
Electronic banking fees and charges | 1,717 | 1,245 | 472 | 37.9 | % | |||||||
Bargain purchase gain | 3,053 | - | 3,053 | 0.0 | % | |||||||
Other income | 1,751 | 194 | 1,557 | 802.6 | % | |||||||
Total non-interest income | 24,751 | 19,719 | 5,032 | 25.5 | % | |||||||
Non-interest expense | ||||||||||||
Salaries and employee benefits | 68,800 | 62,015 | 6,785 | 10.9 | % | |||||||
Net occupancy expense of premises | 12,673 | 11,424 | 1,249 | 10.9 | % | |||||||
Equipment and systems | 14,870 | 11,755 | 3,115 | 26.5 | % | |||||||
Advertising and marketing | 2,161 | 2,788 | (627 | ) | -22.5 | % | ||||||
Federal deposit insurance premium | 1,940 | 286 | 1,654 | 578.3 | % | |||||||
Directors' compensation | 2,993 | 3,079 | (86 | ) | -2.8 | % | ||||||
Merger-related expenses | 4,349 | 951 | 3,398 | 357.3 | % | |||||||
Debt extinguishment expenses | 796 | 2,156 | (1,360 | ) | -63.1 | % | ||||||
Other expense | 17,303 | 13,170 | 4,133 | 31.4 | % | |||||||
Total non-interest expense | 125,885 | 107,624 | 18,261 | 17.0 | % | |||||||
Income before income taxes | 84,496 | 57,252 | 27,244 | 47.6 | % | |||||||
Income taxes | 21,263 | 12,287 | 8,976 | 73.1 | % | |||||||
Net income | $ | 63,233 | $ | 44,965 | $ | 18,268 | 40.6 | % | ||||
Net income per common share (EPS) | ||||||||||||
Basic | $ | 0.77 | $ | 0.55 | $ | 0.22 | ||||||
Diluted | $ | 0.77 | $ | 0.55 | $ | 0.22 | ||||||
Dividends declared | ||||||||||||
Cash dividends declared per common share | $ | 0.35 | $ | 0.29 | $ | 0.06 | ||||||
Cash dividends declared | $ | 28,538 | $ | 23,733 | $ | 4,805 | ||||||
Dividend payout ratio | 45.1 | % | 52.8 | % | -7.7 | % | ||||||
Weighted average number of common shares outstanding | ||||||||||||
Basic | 82,387 | 82,409 | (22 | ) | ||||||||
Diluted | 82,391 | 82,430 | (39 | ) | ||||||||
For the year ended | Variance | |||||||||||
Average Balance Sheet Data | June 30, | June 30, | Variance | or Change | ||||||||
(Dollars in Thousands, Unaudited) | 2021 | 2020 | or Change | Pct. | ||||||||
Assets | ||||||||||||
Interest-earning assets: | ||||||||||||
Loans receivable, including loans held for sale | $ | 4,866,436 | $ | 4,568,816 | $ | 297,620 | 6.5 | % | ||||
Taxable investment securities | 1,571,452 | 1,291,516 | 279,936 | 21.7 | % | |||||||
Tax-exempt investment securities | 74,604 | 111,477 | (36,873 | ) | -33.1 | % | ||||||
Other interest-earning assets | 200,435 | 122,278 | 78,157 | 63.9 | % | |||||||
Total interest-earning assets | 6,712,927 | 6,094,087 | 618,840 | 10.2 | % | |||||||
Non-interest-earning assets | 620,934 | 595,158 | 25,776 | 4.3 | % | |||||||
Total assets | $ | 7,333,861 | $ | 6,689,245 | $ | 644,616 | 9.6 | % | ||||
Liabilities and Stockholders' Equity | ||||||||||||
Interest-bearing liabilities: | ||||||||||||
Deposits: | ||||||||||||
Interest-bearing demand | $ | 1,726,190 | $ | 1,041,188 | $ | 685,002 | 65.8 | % | ||||
Savings | 1,066,794 | 831,832 | 234,962 | 28.2 | % | |||||||
Certificates of deposit | 1,931,887 | 2,032,046 | (100,159 | ) | -4.9 | % | ||||||
Total interest-bearing deposits | 4,724,871 | 3,905,066 | 819,805 | 21.0 | % | |||||||
Borrowings: | ||||||||||||
Federal Home Loan Bank Advances | 931,148 | 1,236,139 | (304,991 | ) | -24.7 | % | ||||||
Other borrowings | 2,563 | 56,957 | (54,394 | ) | -95.5 | % | ||||||
Total borrowings | 933,711 | 1,293,096 | (359,385 | ) | -27.8 | % | ||||||
Total interest-bearing liabilities | 5,658,582 | 5,198,162 | 460,420 | 8.9 | % | |||||||
Non-interest-bearing liabilities: | ||||||||||||
Non-interest-bearing deposits | 518,149 | 334,522 | 183,627 | 54.9 | % | |||||||
Other non-interest-bearing liabilities | 65,737 | 60,236 | 5,501 | 9.1 | % | |||||||
Total non-interest-bearing liabilities | 583,886 | 394,758 | 189,128 | 47.9 | % | |||||||
Total liabilities | 6,242,468 | 5,592,920 | 649,548 | 11.6 | % | |||||||
Stockholders' equity | 1,091,393 | 1,096,325 | (4,932 | ) | -0.4 | % | ||||||
Total liabilities and stockholders' equity | $ | 7,333,861 | $ | 6,689,245 | $ | 644,616 | 9.6 | % | ||||
Average interest-earning assets to average interest-bearing liabilities | 118.63 | % | 117.24 | % | 1.39 | % | 1.2 | % | ||||
For the year ended | |||||||||
June 30, | June 30, | Variance | |||||||
Performance Ratio Highlights | 2021 | 2020 | or Change | ||||||
Average yield on interest-earning assets: | |||||||||
Loans receivable, including loans held for sale | 4.08 | % | 4.09 | % | -0.01 | % | |||
Taxable investment securities | 1.99 | % | 3.04 | % | -1.05 | % | |||
Tax-exempt investment securities (1) | 2.21 | % | 2.15 | % | 0.06 | % | |||
Other interest-earning assets | 1.47 | % | 3.67 | % | -2.20 | % | |||
Total interest-earning assets | 3.49 | % | 3.83 | % | -0.34 | % | |||
Average cost of interest-bearing liabilities: | |||||||||
Deposits: | |||||||||
Interest-bearing demand | 0.41 | % | 1.10 | % | -0.69 | % | |||
Savings | 0.31 | % | 0.81 | % | -0.50 | % | |||
Certificates of deposit | 1.10 | % | 2.00 | % | -0.90 | % | |||
Total interest-bearing deposits | 0.67 | % | 1.51 | % | -0.84 | % | |||
Borrowings: | |||||||||
Federal Home Loan Bank Advances | 1.97 | % | 1.99 | % | -0.02 | % | |||
Other borrowings | 0.06 | % | 0.74 | % | -0.68 | % | |||
Total borrowings | 1.96 | % | 1.93 | % | 0.03 | % | |||
Total interest-bearing liabilities | 0.88 | % | 1.61 | % | -0.73 | % | |||
Interest rate spread (2) | 2.61 | % | 2.22 | % | 0.39 | % | |||
Net interest margin (3) | 2.75 | % | 2.45 | % | 0.30 | % | |||
Non-interest income to average assets | 0.34 | % | 0.29 | % | 0.05 | % | |||
Non-interest expense to average assets | 1.72 | % | 1.61 | % | 0.11 | % | |||
Efficiency ratio (4) | 60.16 | % | 63.66 | % | -3.50 | % | |||
Return on average assets | 0.86 | % | 0.67 | % | 0.19 | % | |||
Return on average equity | 5.79 | % | 4.10 | % | 1.69 | % | |||
Return on average tangible equity (5) | 7.22 | % | 5.10 | % | 2.12 | % | |||
Five-Quarter Financial Trend Analysis | |||||||||||||||
Summary Balance Sheet | At | ||||||||||||||
(Dollars and Shares in Thousands, | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
Except Per Share Data, Unaudited) | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
Assets | |||||||||||||||
Cash and cash equivalents | $ | 67,855 | $ | 108,991 | $ | 129,694 | $ | 145,818 | $ | 180,967 | |||||
Securities available for sale | 1,676,864 | 1,778,970 | 1,695,893 | 1,508,542 | 1,385,703 | ||||||||||
Securities held to maturity | 38,138 | 27,168 | 29,549 | 31,576 | 32,556 | ||||||||||
Loans held-for-sale | 16,492 | 5,172 | 12,601 | 20,170 | 20,789 | ||||||||||
Loans receivable | 4,851,394 | 4,798,239 | 4,828,634 | 4,954,750 | 4,498,397 | ||||||||||
Less: allowance for credit losses on loans | (58,165 | ) | (63,762 | ) | (63,386 | ) | (64,860 | ) | (37,327 | ) | |||||
Net loans receivable | 4,793,229 | 4,734,477 | 4,765,248 | 4,889,890 | 4,461,070 | ||||||||||
Premises and equipment | 56,338 | 60,360 | 61,181 | 61,808 | 57,389 | ||||||||||
Federal Home Loan Bank stock | 36,615 | 45,578 | 45,578 | 55,118 | 58,654 | ||||||||||
Accrued interest receivable | 19,362 | 20,562 | 19,826 | 20,368 | 17,373 | ||||||||||
Goodwill | 210,895 | 210,895 | 210,895 | 210,895 | 210,895 | ||||||||||
Core deposit intangible | 3,705 | 3,888 | 4,151 | 4,420 | 3,995 | ||||||||||
Bank owned life insurance | 283,310 | 281,765 | 280,235 | 278,639 | 262,380 | ||||||||||
Deferred income taxes, net | 29,323 | 32,230 | 30,846 | 33,319 | 25,480 | ||||||||||
Other real estate owned | 178 | 178 | 178 | 178 | 178 | ||||||||||
Other assets | 51,431 | 47,760 | 49,278 | 49,468 | 40,746 | ||||||||||
Total assets | $ | 7,283,735 | $ | 7,357,994 | $ | 7,335,153 | $ | 7,310,209 | $ | 6,758,175 | |||||
Liabilities | |||||||||||||||
Deposits: | |||||||||||||||
Non-interest-bearing | $ | 593,718 | $ | 545,746 | $ | 518,828 | $ | 487,710 | $ | 419,138 | |||||
Interest-bearing | 4,891,588 | 4,828,706 | 4,793,785 | 4,552,202 | 4,011,144 | ||||||||||
Total deposits | 5,485,306 | 5,374,452 | 5,312,613 | 5,039,912 | 4,430,282 | ||||||||||
Borrowings | 685,876 | 865,763 | 865,651 | 1,077,540 | 1,173,165 | ||||||||||
Advance payments by borrowers for taxes | 15,752 | 15,300 | 16,100 | 17,008 | 16,569 | ||||||||||
Other liabilities | 53,857 | 38,667 | 48,448 | 51,689 | 53,982 | ||||||||||
Total liabilities | 6,240,791 | 6,294,182 | 6,242,812 | 6,186,149 | 5,673,998 | ||||||||||
Stockholders' Equity | |||||||||||||||
Common stock | 790 | 820 | 849 | 895 | 837 | ||||||||||
Paid-in capital | 654,396 | 691,280 | 724,389 | 769,269 | 722,871 | ||||||||||
Retained earnings | 408,367 | 397,594 | 388,376 | 378,134 | 387,911 | ||||||||||
Unearned ESOP shares | (26,753 | ) | (27,239 | ) | (27,726 | ) | (28,212 | ) | (28,699 | ) | |||||
Accumulated other comprehensive income | 6,144 | 1,357 | 6,453 | 3,974 | 1,257 | ||||||||||
Total stockholders' equity | 1,042,944 | 1,063,812 | 1,092,341 | 1,124,060 | 1,084,177 | ||||||||||
Total liabilities and stockholders' equity | $ | 7,283,735 | $ | 7,357,994 | $ | 7,335,153 | $ | 7,310,209 | $ | 6,758,175 | |||||
Consolidated capital ratios | |||||||||||||||
Equity to assets | 14.32 | % | 14.46 | % | 14.89 | % | 15.38 | % | 16.04 | % | |||||
Tangible equity to tangible assets (1) | 11.72 | % | 11.89 | % | 12.32 | % | 12.81 | % | 13.29 | % | |||||
Share data | |||||||||||||||
Outstanding shares | 78,965 | 81,943 | 84,938 | 89,510 | 83,663 | ||||||||||
Book value per share | $ | 13.21 | $ | 12.98 | $ | 12.86 | $ | 12.56 | $ | 12.96 | |||||
Tangible book value per share (2) | $ | 10.49 | $ | 10.36 | $ | 10.33 | $ | 10.15 | $ | 10.39 | |||||
____________________
(1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. | |
(2) | Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. | |
At | |||||||||||||||
Supplemental Balance Sheet Highlights | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
(Dollars in Thousands, Unaudited) | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
Cash and cash equivalents | |||||||||||||||
Cash and due from depository institutions | $ | 21,463 | $ | 20,502 | $ | 23,968 | $ | 18,628 | $ | 20,391 | |||||
Interest-bearing deposits in other banks | 46,392 | 88,489 | 105,726 | 127,190 | 160,576 | ||||||||||
Total cash and cash equivalents | $ | 67,855 | $ | 108,991 | $ | 129,694 | $ | 145,818 | $ | 180,967 | |||||
Securities available for sale | |||||||||||||||
Debt securities: | |||||||||||||||
Municipal and state obligations | $ | 34,603 | $ | 43,060 | $ | 47,763 | $ | 50,877 | $ | 54,054 | |||||
Asset-backed securities | 242,989 | 250,741 | 255,407 | 258,801 | 172,447 | ||||||||||
Collateralized loan obligations | 189,880 | 169,776 | 196,685 | 196,398 | 193,788 | ||||||||||
Corporate bonds | 158,351 | 173,462 | 167,168 | 122,276 | 143,639 | ||||||||||
Trust preferred securities | - | 2,881 | 2,866 | 2,773 | 2,627 | ||||||||||
Debt securities | 625,823 | 639,920 | 669,889 | 631,125 | 566,555 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
Collateralized mortgage obligations | 13,739 | 16,800 | 20,510 | 25,770 | 30,903 | ||||||||||
Residential pass-through securities | 744,491 | 806,655 | 705,991 | 625,715 | 561,954 | ||||||||||
Commercial pass-through securities | 292,811 | 315,595 | 299,503 | 225,932 | 226,291 | ||||||||||
Mortgage-backed securities | 1,051,041 | 1,139,050 | 1,026,004 | 877,417 | 819,148 | ||||||||||
Total securities available for sale | $ | 1,676,864 | $ | 1,778,970 | $ | 1,695,893 | $ | 1,508,542 | $ | 1,385,703 | |||||
Securities held to maturity | |||||||||||||||
Debt securities: | |||||||||||||||
Municipal and state obligations | $ | 25,824 | $ | 27,168 | $ | 29,549 | $ | 31,576 | $ | 32,556 | |||||
Debt securities: | 25,824 | 27,168 | 29,549 | 31,576 | 32,556 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
Commercial pass-through securities | 12,314 | - | - | - | - | ||||||||||
Mortgage-backed securities | 12,314 | - | - | - | - | ||||||||||
Total securities held to maturity | $ | 38,138 | $ | 27,168 | $ | 29,549 | $ | 31,576 | $ | 32,556 | |||||
Total securities | $ | 1,715,002 | $ | 1,806,138 | $ | 1,725,442 | $ | 1,540,118 | $ | 1,418,259 | |||||
At | |||||||||||||||
Supplemental Balance Sheet Highlights | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
(Dollars in Thousands, Unaudited) | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
Loan portfolio composition: | |||||||||||||||
Commercial loans: | |||||||||||||||
Multi-family | $ | 2,039,260 | $ | 2,055,396 | $ | 2,076,483 | $ | 2,110,300 | $ | 2,059,568 | |||||
Nonresidential | 1,079,444 | 1,110,765 | 1,123,695 | 1,124,330 | 960,853 | ||||||||||
Commercial business | 168,951 | 183,181 | 202,010 | 255,888 | 138,788 | ||||||||||
Construction | 93,804 | 95,533 | 90,398 | 79,178 | 20,961 | ||||||||||
Total commercial loans | 3,381,459 | 3,444,875 | 3,492,586 | 3,569,696 | 3,180,170 | ||||||||||
One- to four-family residential mortgage loans | 1,447,721 | 1,323,485 | 1,305,351 | 1,353,197 | 1,273,022 | ||||||||||
Consumer loans: | |||||||||||||||
Home equity loans and lines of credit | 47,871 | 59,721 | 65,298 | 71,540 | 82,920 | ||||||||||
Other consumer loans | 3,259 | 3,445 | 4,123 | 4,136 | 3,991 | ||||||||||
Total consumer loans | 51,130 | 63,166 | 69,421 | 75,676 | 86,911 | ||||||||||
Total loans, excluding yield adjustments | 4,880,310 | 4,831,526 | 4,867,358 | 4,998,569 | 4,540,103 | ||||||||||
Unaccreted yield adjustments | (28,916 | ) | (33,287 | ) | (38,724 | ) | (43,819 | ) | (41,706 | ) | |||||
Loans receivable, net of yield adjustments | 4,851,394 | 4,798,239 | 4,828,634 | 4,954,750 | 4,498,397 | ||||||||||
Less: allowance for credit losses on loans | (58,165 | ) | (63,762 | ) | (63,386 | ) | (64,860 | ) | (37,327 | ) | |||||
Net loans receivable | $ | 4,793,229 | $ | 4,734,477 | $ | 4,765,248 | $ | 4,889,890 | $ | 4,461,070 | |||||
Loan portfolio allocation: | |||||||||||||||
Commercial loans: | |||||||||||||||
Multi-family | 41.8 | % | 42.5 | % | 42.7 | % | 42.2 | % | 45.3 | % | |||||
Nonresidential | 22.1 | % | 23.0 | % | 23.1 | % | 22.5 | % | 21.2 | % | |||||
Commercial business | 3.5 | % | 3.8 | % | 4.2 | % | 5.1 | % | 3.1 | % | |||||
Construction | 1.9 | % | 2.0 | % | 1.8 | % | 1.6 | % | 0.4 | % | |||||
Total commercial loans | 69.3 | % | 71.3 | % | 71.8 | % | 71.4 | % | 70.0 | % | |||||
One- to four-family residential mortgage loans | 29.7 | % | 27.4 | % | 26.8 | % | 27.1 | % | 28.1 | % | |||||
Consumer loans: | |||||||||||||||
Home equity loans and lines of credit | 0.9 | % | 1.2 | % | 1.3 | % | 1.4 | % | 1.8 | % | |||||
Other consumer loans | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||||
Total consumer loans | 1.0 | % | 1.3 | % | 1.4 | % | 1.5 | % | 1.9 | % | |||||
Total loans, excluding yield adjustments | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||
Asset quality: | |||||||||||||||
Nonperforming assets: | |||||||||||||||
Accruing loans - 90 days and over past due | $ | - | $ | 2 | $ | - | $ | 238 | $ | 5 | |||||
Nonaccrual loans | 79,767 | 71,416 | 71,472 | 44,837 | 36,691 | ||||||||||
Total nonperforming loans | 79,767 | 71,418 | 71,472 | 45,075 | 36,696 | ||||||||||
Other real estate owned | 178 | 178 | 178 | 178 | 178 | ||||||||||
Total nonperforming assets | $ | 79,945 | $ | 71,596 | $ | 71,650 | $ | 45,253 | $ | 36,874 | |||||
Nonperforming loans (% total loans) | 1.64 | % | 1.49 | % | 1.48 | % | 0.91 | % | 0.82 | % | |||||
Nonperforming assets (% total assets) | 1.10 | % | 0.97 | % | 0.98 | % | 0.62 | % | 0.55 | % | |||||
Allowance for credit losses on loans (ACL): | |||||||||||||||
ACL to total loans | 1.19 | % | 1.32 | % | 1.30 | % | 1.30 | % | 0.82 | % | |||||
ACL to nonperforming loans | 72.92 | % | 89.28 | % | 88.69 | % | 143.89 | % | 101.72 | % | |||||
Net charge offs | $ | 656 | $ | 750 | $ | 109 | $ | 67 | $ | 38 | |||||
Average net charge off rate (annualized) | 0.05 | % | 0.06 | % | 0.01 | % | 0.01 | % | 0.00 | % | |||||
At | |||||||||||||||
Supplemental Balance Sheet Highlights | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
(Dollars in Thousands, Unaudited) | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
Funding by type: | |||||||||||||||
Deposits: | |||||||||||||||
Non-interest-bearing deposits | $ | 593,718 | $ | 545,746 | $ | 518,828 | $ | 487,710 | $ | 419,138 | |||||
Interest-bearing demand | 1,902,478 | 1,923,184 | 1,752,699 | 1,561,135 | 1,264,151 | ||||||||||
Savings | 1,111,364 | 1,105,481 | 1,075,122 | 1,025,245 | 906,597 | ||||||||||
Certificates of deposit | 1,877,746 | 1,800,041 | 1,965,964 | 1,965,822 | 1,840,396 | ||||||||||
Interest-bearing deposits | 4,891,588 | 4,828,706 | 4,793,785 | 4,552,202 | 4,011,144 | ||||||||||
Total deposits | 5,485,306 | 5,374,452 | 5,312,613 | 5,039,912 | 4,430,282 | ||||||||||
Borrowings: | |||||||||||||||
Federal Home Loan Bank advances | 665,876 | 865,763 | 865,651 | 1,077,540 | 1,167,429 | ||||||||||
Overnight borrowings | 20,000 | - | - | - | - | ||||||||||
Depositor sweep accounts | - | - | - | - | 5,736 | ||||||||||
Total borrowings | 685,876 | 865,763 | 865,651 | 1,077,540 | 1,173,165 | ||||||||||
Total funding | $ | 6,171,182 | $ | 6,240,215 | $ | 6,178,264 | $ | 6,117,452 | $ | 5,603,447 | |||||
Loans as a % of deposits | 87.7 | % | 88.2 | % | 89.9 | % | 97.4 | % | 101.2 | % | |||||
Deposits as a % of total funding | 88.9 | % | 86.1 | % | 86.0 | % | 82.4 | % | 79.1 | % | |||||
Borrowings as a % of total funding | 11.1 | % | 13.9 | % | 14.0 | % | 17.6 | % | 20.9 | % | |||||
Funding by source: | |||||||||||||||
Retail funding: | |||||||||||||||
Non-interest-bearing deposits | $ | 593,718 | $ | 545,746 | $ | 518,828 | $ | 487,710 | $ | 419,138 | |||||
Interest-bearing demand | 1,902,478 | 1,923,184 | 1,752,699 | 1,561,135 | 1,264,151 | ||||||||||
Savings | 1,111,364 | 1,105,481 | 1,075,122 | 1,025,245 | 906,597 | ||||||||||
Certificates of deposit | 1,398,808 | 1,508,494 | 1,658,277 | 1,775,189 | 1,773,257 | ||||||||||
Total retail deposits | 5,006,368 | 5,082,905 | 5,004,926 | 4,849,279 | 4,363,143 | ||||||||||
Depositor sweep accounts | - | - | - | - | 5,736 | ||||||||||
Total retail funding | 5,006,368 | 5,082,905 | 5,004,926 | 4,849,279 | 4,368,879 | ||||||||||
Wholesale funding: | |||||||||||||||
Certificates of deposit (listing service) | $ | 20,322 | $ | 32,952 | $ | 43,112 | $ | 57,251 | $ | 35,760 | |||||
Certificates of deposit (brokered) | 458,616 | 258,595 | 264,575 | 133,382 | 31,379 | ||||||||||
Total wholesale deposits | 478,938 | 291,547 | 307,687 | 190,633 | 67,139 | ||||||||||
FHLB advances | 665,876 | 865,763 | 865,651 | 1,077,540 | 1,167,429 | ||||||||||
Overnight borrowings | 20,000 | - | - | - | - | ||||||||||
Total wholesale funding | 1,164,814 | 1,157,310 | 1,173,338 | 1,268,173 | 1,234,568 | ||||||||||
Total funding | $ | 6,171,182 | $ | 6,240,215 | $ | 6,178,264 | $ | 6,117,452 | $ | 5,603,447 | |||||
Retail funding as a % of total funding | 81.1 | % | 81.5 | % | 81.0 | % | 79.3 | % | 78.0 | % | |||||
Wholesale funding as a % of total funding | 18.9 | % | 18.5 | % | 19.0 | % | 20.7 | % | 22.0 | % | |||||
Summary Income Statement | For the three months ended | ||||||||||||||
(Dollars and Shares in Thousands, | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
Except Per Share Data, Unaudited) | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
Interest income | |||||||||||||||
Loans | $ | 47,562 | $ | 49,307 | $ | 49,466 | $ | 52,180 | $ | 46,192 | |||||
Taxable investment securities | 8,304 | 7,891 | 7,707 | 7,336 | 9,769 | ||||||||||
Tax-exempt investment securities | 355 | 410 | 433 | 454 | 487 | ||||||||||
Other interest-earning assets | 549 | 705 | 787 | 914 | 903 | ||||||||||
Total interest income | 56,770 | 58,313 | 58,393 | 60,884 | 57,351 | ||||||||||
Interest expense | |||||||||||||||
Deposits | 5,156 | 6,670 | 8,647 | 11,062 | 12,439 | ||||||||||
Borrowings | 3,451 | 4,012 | 5,193 | 5,660 | 4,462 | ||||||||||
Total interest expense | 8,607 | 10,682 | 13,840 | 16,722 | 16,901 | ||||||||||
Net interest income | 48,163 | 47,631 | 44,553 | 44,162 | 40,450 | ||||||||||
(Reversal of) provision for credit losses | (4,941 | ) | 1,126 | (1,365 | ) | 4,059 | 174 | ||||||||
Net interest income after (reversal of) provision for credit losses | 53,104 | 46,505 | 45,918 | 40,103 | 40,276 | ||||||||||
Non-interest income | |||||||||||||||
Fees and service charges | 1,325 | 1,325 | 1,896 | 1,076 | 1,696 | ||||||||||
Gain (loss) on sale and call of securities | 313 | 18 | 813 | (377 | ) | 19 | |||||||||
Gain on sale of loans | 363 | 943 | 2,378 | 1,890 | 1,348 | ||||||||||
Income from bank owned life insurance | 1,545 | 1,530 | 1,596 | 1,596 | 1,537 | ||||||||||
Electronic banking fees and charges | 452 | 456 | 404 | 405 | 325 | ||||||||||
Bargain purchase gain | - | - | - | 3,053 | - | ||||||||||
Other income | 400 | 1,194 | 67 | 90 | 77 | ||||||||||
Total non-interest income | 4,398 | 5,466 | 7,154 | 7,733 | 5,002 | ||||||||||
Non-interest expense | |||||||||||||||
Salaries and employee benefits | 17,777 | 16,965 | 17,081 | 16,977 | 15,527 | ||||||||||
Net occupancy expense of premises | 2,998 | 3,433 | 3,120 | 3,122 | 2,688 | ||||||||||
Equipment and systems | 3,575 | 3,823 | 3,902 | 3,570 | 2,948 | ||||||||||
Advertising and marketing | 581 | 567 | 513 | 500 | 751 | ||||||||||
Federal deposit insurance premium | 490 | 488 | 490 | 472 | 286 | ||||||||||
Directors' compensation | 749 | 748 | 748 | 748 | 769 | ||||||||||
Merger-related expenses | - | - | - | 4,349 | 447 | ||||||||||
Debt extinguishment expenses | - | - | 796 | - | - | ||||||||||
Other expense | 5,816 | 3,792 | 3,860 | 3,835 | 3,475 | ||||||||||
Total non-interest expense | 31,986 | 29,816 | 30,510 | 33,573 | 26,891 | ||||||||||
Income before income taxes | 25,516 | 22,155 | 22,562 | 14,263 | 18,387 | ||||||||||
Income taxes | 7,033 | 5,732 | 5,614 | 2,884 | 4,698 | ||||||||||
Net income | $ | 18,483 | $ | 16,423 | $ | 16,948 | $ | 11,379 | $ | 13,689 | |||||
Net income per common share (EPS) | |||||||||||||||
Basic | $ | 0.24 | $ | 0.20 | $ | 0.20 | $ | 0.13 | $ | 0.17 | |||||
Diluted | $ | 0.24 | $ | 0.20 | $ | 0.20 | $ | 0.13 | $ | 0.17 | |||||
Dividends declared | |||||||||||||||
Cash dividends declared per common share | $ | 0.10 | $ | 0.09 | $ | 0.08 | $ | 0.08 | $ | 0.08 | |||||
Cash dividends declared | $ | 7,710 | $ | 7,205 | $ | 6,706 | $ | 6,917 | $ | 6,449 | |||||
Dividend payout ratio | 41.7 | % | 43.9 | % | 39.6 | % | 60.8 | % | 47.1 | % | |||||
Weighted average number of common shares outstanding | |||||||||||||||
Basic | 77,658 | 80,673 | 85,120 | 86,008 | 80,678 | ||||||||||
Diluted | 77,680 | 80,690 | 85,123 | 86,009 | 80,680 | ||||||||||
For the three months ended | |||||||||||||||
Average Balance Sheet Data | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
(Dollars in Thousands, Unaudited) | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
Assets | |||||||||||||||
Interest-earning assets: | |||||||||||||||
Loans receivable, including loans held for sale | $ | 4,817,980 | $ | 4,816,592 | $ | 4,871,268 | $ | 4,958,293 | $ | 4,567,229 | |||||
Taxable investment securities | 1,720,838 | 1,674,223 | 1,544,095 | 1,350,511 | 1,369,014 | ||||||||||
Tax-exempt investment securities | 63,047 | 73,573 | 79,044 | 82,603 | 89,263 | ||||||||||
Other interest-earning assets | 117,212 | 169,291 | 266,114 | 247,543 | 141,964 | ||||||||||
Total interest-earning assets | 6,719,077 | 6,733,679 | 6,760,521 | 6,638,950 | 6,167,470 | ||||||||||
Non-interest-earning assets | 609,762 | 617,440 | 632,084 | 624,252 | 605,876 | ||||||||||
Total assets | $ | 7,328,839 | $ | 7,351,119 | $ | 7,392,605 | $ | 7,263,202 | $ | 6,773,346 | |||||
Liabilities and Stockholders' Equity | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||
Deposits: | |||||||||||||||
Interest-bearing demand | $ | 1,930,193 | $ | 1,831,617 | $ | 1,683,222 | $ | 1,464,238 | $ | 1,189,044 | |||||
Savings | 1,118,402 | 1,084,981 | 1,058,675 | 1,006,075 | 876,580 | ||||||||||
Certificates of deposit | 1,934,650 | 1,904,234 | 1,899,406 | 1,988,689 | 1,879,039 | ||||||||||
Total interest-bearing deposits | 4,983,245 | 4,820,832 | 4,641,303 | 4,459,002 | 3,944,663 | ||||||||||
Borrowings: | |||||||||||||||
Federal Home Loan Bank advances | 665,802 | 865,690 | 1,057,958 | 1,130,836 | 1,202,522 | ||||||||||
Other borrowings | 6,670 | - | - | 3,568 | 96,770 | ||||||||||
Total borrowings | 672,472 | 865,690 | 1,057,958 | 1,134,404 | 1,299,292 | ||||||||||
Total interest-bearing liabilities | 5,655,717 | 5,686,522 | 5,699,261 | 5,593,406 | 5,243,955 | ||||||||||
Non-interest-bearing liabilities: | |||||||||||||||
Non-interest-bearing deposits | 566,632 | 525,018 | 502,479 | 479,141 | 380,067 | ||||||||||
Other non-interest-bearing liabilities | 52,292 | 57,018 | 73,683 | 79,620 | 72,007 | ||||||||||
Total non-interest-bearing liabilities | 618,924 | 582,036 | 576,162 | 558,761 | 452,074 | ||||||||||
Total liabilities | 6,274,641 | 6,268,558 | 6,275,423 | 6,152,167 | 5,696,029 | ||||||||||
Stockholders' equity | 1,054,198 | 1,082,561 | 1,117,182 | 1,111,035 | 1,077,317 | ||||||||||
Total liabilities and stockholders' equity | $ | 7,328,839 | $ | 7,351,119 | $ | 7,392,605 | $ | 7,263,202 | $ | 6,773,346 | |||||
Average interest-earning assets to average interest-bearing liabilities | 118.80 | % | 118.41 | % | 118.62 | % | 118.69 | % | 117.61 | % | |||||
For the three months ended | |||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
Performance Ratio Highlights | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
Average yield on interest-earning assets: | |||||||||||||||
Loans receivable, including loans held for sale | 3.95 | % | 4.09 | % | 4.06 | % | 4.21 | % | 4.05 | % | |||||
Taxable investment securities | 1.93 | % | 1.89 | % | 2.00 | % | 2.17 | % | 2.85 | % | |||||
Tax-exempt investment securities (1) | 2.25 | % | 2.23 | % | 2.19 | % | 2.20 | % | 2.18 | % | |||||
Other interest-earning assets | 1.87 | % | 1.67 | % | 1.18 | % | 1.48 | % | 2.54 | % | |||||
Total interest-earning assets | 3.38 | % | 3.46 | % | 3.45 | % | 3.67 | % | 3.72 | % | |||||
Average cost of interest-bearing liabilities: | |||||||||||||||
Deposits: | |||||||||||||||
Interest-bearing demand | 0.27 | % | 0.34 | % | 0.47 | % | 0.60 | % | 0.72 | % | |||||
Savings | 0.15 | % | 0.21 | % | 0.33 | % | 0.57 | % | 0.81 | % | |||||
Certificates of deposit | 0.71 | % | 0.96 | % | 1.22 | % | 1.50 | % | 1.82 | % | |||||
Total interest-bearing deposits | 0.41 | % | 0.55 | % | 0.75 | % | 0.99 | % | 1.26 | % | |||||
Borrowings: | |||||||||||||||
Federal Home Loan Bank advances | 2.07 | % | 1.85 | % | 1.96 | % | 2.00 | % | 1.47 | % | |||||
Other borrowings | 0.07 | % | 0.00 | % | 0.00 | % | 0.04 | % | 0.13 | % | |||||
Total borrowings | 2.05 | % | 1.85 | % | 1.96 | % | 2.00 | % | 1.37 | % | |||||
Total interest-bearing liabilities | 0.61 | % | 0.75 | % | 0.97 | % | 1.20 | % | 1.29 | % | |||||
Interest rate spread (2) | 2.77 | % | 2.71 | % | 2.48 | % | 2.47 | % | 2.43 | % | |||||
Net interest margin (3) | 2.87 | % | 2.83 | % | 2.64 | % | 2.66 | % | 2.62 | % | |||||
Non-interest income to average assets | 0.24 | % | 0.30 | % | 0.39 | % | 0.43 | % | 0.30 | % | |||||
Non-interest expense to average assets | 1.75 | % | 1.62 | % | 1.65 | % | 1.85 | % | 1.59 | % | |||||
Efficiency ratio (4) | 60.86 | % | 56.15 | % | 59.01 | % | 64.69 | % | 59.16 | % | |||||
Return on average assets (annualized) | 1.01 | % | 0.89 | % | 0.92 | % | 0.63 | % | 0.81 | % | |||||
Return on average equity (annualized) | 7.01 | % | 6.07 | % | 6.07 | % | 4.10 | % | 5.08 | % | |||||
Return on average tangible equity (annualized) (5) | 8.81 | % | 7.57 | % | 7.52 | % | 5.08 | % | 6.35 | % | |||||
____________________
(1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. | |
(2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. | |
(3) | Net interest income divided by average interest-earning assets. | |
(4) | Non-interest expense divided by the sum of net interest income and non-interest income. | |
(5) | Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets. | |
This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures provide additional information which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is included below. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.
Reconciliation of GAAP to Non-GAAP | For the three months ended | ||||||||||||||
(Dollars in Thousands, | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
Except Per Share Data, Unaudited) | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
Adjusted net income: | |||||||||||||||
Net income (GAAP) | $ | 18,483 | $ | 16,423 | $ | 16,948 | $ | 11,379 | $ | 13,689 | |||||
Non-recurring transactions - net of tax: | |||||||||||||||
Bargain purchase gain | - | - | - | (3,053 | ) | - | |||||||||
Provision for credit losses on non-PCD loans | - | - | - | 3,563 | - | ||||||||||
Merger-related expenses | - | - | - | 3,123 | 426 | ||||||||||
Branch consolidation expenses and impairment charges | 870 | 264 | 243 | - | - | ||||||||||
Net effect of sales and calls of securities | (220 | ) | (13 | ) | (571 | ) | - | - | |||||||
Debt extinguishment expenses | - | - | 558 | - | - | ||||||||||
Reversal of income tax valuation allowance | (12 | ) | - | (523 | ) | - | - | ||||||||
Net effect of sales of other assets | (144 | ) | (587 | ) | - | - | - | ||||||||
Adjusted net income | $ | 18,977 | $ | 16,087 | $ | 16,655 | $ | 15,012 | $ | 14,115 | |||||
Calculation of pre-tax, pre-provision net revenue: | |||||||||||||||
Net income (GAAP) | $ | 18,483 | $ | 16,423 | $ | 16,948 | $ | 11,379 | $ | 13,689 | |||||
Adjustments to net income (GAAP): | |||||||||||||||
Provision for income taxes | 7,033 | 5,732 | 5,614 | 2,884 | 4,698 | ||||||||||
(Reversal of) provision for credit losses | (4,941 | ) | 1,126 | (1,365 | ) | 4,059 | 174 | ||||||||
Pre-tax, pre-provision net revenue (non-GAAP) | $ | 20,575 | $ | 23,281 | $ | 21,197 | $ | 18,322 | $ | 18,561 | |||||
Adjusted earnings per share: | |||||||||||||||
Weighted average common shares - basic | 77,658 | 80,673 | 85,120 | 86,008 | 80,678 | ||||||||||
Weighted average common shares - diluted | 77,680 | 80,690 | 85,123 | 86,009 | 80,680 | ||||||||||
Earnings per share - basic (GAAP) | $ | 0.24 | $ | 0.20 | $ | 0.20 | $ | 0.13 | $ | 0.17 | |||||
Earnings per share - diluted (GAAP) | $ | 0.24 | $ | 0.20 | $ | 0.20 | $ | 0.13 | $ | 0.17 | |||||
Adjusted earnings per share - basic (non-GAAP) | $ | 0.24 | $ | 0.20 | $ | 0.20 | $ | 0.17 | $ | 0.17 | |||||
Adjusted earnings per share - diluted (non-GAAP) | $ | 0.24 | $ | 0.20 | $ | 0.20 | $ | 0.17 | $ | 0.17 | |||||
Adjusted return on average assets: | |||||||||||||||
Total average assets | $ | 7,328,839 | $ | 7,351,119 | $ | 7,392,605 | $ | 7,263,202 | $ | 6,773,346 | |||||
Return on average assets (GAAP) | 1.01 | % | 0.89 | % | 0.92 | % | 0.63 | % | 0.81 | % | |||||
Adjusted return on average assets (non-GAAP) | 1.04 | % | 0.88 | % | 0.90 | % | 0.83 | % | 0.83 | % | |||||
Adjusted return on average equity: | |||||||||||||||
Total average equity | $ | 1,054,198 | $ | 1,082,561 | $ | 1,117,182 | $ | 1,111,035 | $ | 1,077,317 | |||||
Return on average equity (GAAP) | 7.01 | % | 6.07 | % | 6.07 | % | 4.10 | % | 5.08 | % | |||||
Adjusted return on average equity (non-GAAP) | 7.20 | % | 5.94 | % | 5.96 | % | 5.40 | % | 5.24 | % | |||||
Reconciliation of GAAP to Non-GAAP | For the three months ended | ||||||||||||||
(Dollars in Thousands, | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
Except Per Share Data, Unaudited) | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
Adjusted return on average tangible equity: | |||||||||||||||
Total average equity | $ | 1,054,198 | $ | 1,082,561 | $ | 1,117,182 | $ | 1,111,035 | $ | 1,077,317 | |||||
Less: average goodwill | (210,895 | ) | (210,895 | ) | (210,895 | ) | (210,895 | ) | (210,895 | ) | |||||
Less: average other intangible assets | (3,825 | ) | (4,045 | ) | (4,317 | ) | (4,341 | ) | (4,124 | ) | |||||
$ | 839,478 | $ | 867,621 | $ | 901,970 | $ | 895,799 | $ | 862,298 | ||||||
Return on average tangible equity (non-GAAP) | 8.81 | % | 7.57 | % | 7.52 | % | 5.08 | % | 6.35 | % | |||||
Adjusted return on average tangible equity (non-GAAP) | 9.04 | % | 7.42 | % | 7.39 | % | 6.70 | % | 6.55 | % | |||||
Adjusted non-interest expense ratio: | |||||||||||||||
Non-interest expense (GAAP) | $ | 31,986 | $ | 29,816 | $ | 30,510 | $ | 33,573 | $ | 26,891 | |||||
Non-recurring transactions: | |||||||||||||||
Merger-related expenses | - | - | - | (4,349 | ) | (447 | ) | ||||||||
Branch consolidation expenses and impairment charges | (1,239 | ) | (375 | ) | (347 | ) | - | - | |||||||
Debt extinguishment expenses | - | - | (796 | ) | - | - | |||||||||
Non-interest expense (non-GAAP) | $ | 30,747 | $ | 29,441 | $ | 29,367 | $ | 29,224 | $ | 26,444 | |||||
Non-interest expense ratio (GAAP) | 1.75 | % | 1.62 | % | 1.65 | % | 1.85 | % | 1.59 | % | |||||
Adjusted non-interest expense ratio (non-GAAP) | 1.68 | % | 1.60 | % | 1.59 | % | 1.61 | % | 1.56 | % | |||||
Adjusted efficiency ratio: | |||||||||||||||
Non-interest expense (non-GAAP) | $ | 30,747 | $ | 29,441 | $ | 29,367 | $ | 29,224 | $ | 26,444 | |||||
Net interest income (GAAP) | $ | 48,163 | $ | 47,631 | $ | 44,553 | $ | 44,162 | $ | 40,450 | |||||
Total non-interest income (GAAP) | 4,398 | 5,466 | 7,154 | 7,733 | 5,002 | ||||||||||
Non-recurring transactions: | |||||||||||||||
Net effect of sales and calls of securities | (313 | ) | (18 | ) | (813 | ) | - | - | |||||||
Bargain purchase gain | - | - | - | (3,053 | ) | - | |||||||||
Net effect of sales of other assets | (205 | ) | (837 | ) | - | - | - | ||||||||
Total revenue (non-GAAP) | $ | 52,043 | $ | 52,242 | $ | 50,894 | $ | 48,842 | $ | 45,452 | |||||
Efficiency ratio (GAAP) | 60.86 | % | 56.15 | % | 59.01 | % | 64.69 | % | 59.16 | % | |||||
Adjusted efficiency ratio (non-GAAP) | 59.08 | % | 56.36 | % | 57.70 | % | 59.83 | % | 58.18 | % | |||||
Reconciliation of GAAP to Non-GAAP | For the year ended | |||||
(Dollars in Thousands, | June 30, | June 30, | ||||
Except Per Share Data, Unaudited) | 2021 | 2020 | ||||
Adjusted net income: | ||||||
Net income (GAAP) | $ | 63,233 | $ | 44,965 | ||
Non-recurring transactions - net of tax: | ||||||
Bargain purchase gain | (3,053 | ) | - | |||
Provision for credit losses on non-PCD loans | 3,563 | - | ||||
Merger-related expenses | 3,123 | 878 | ||||
Branch consolidation expenses and impairment | 1,377 | 749 | ||||
Net effect of sales and calls of securities | (804 | ) | (1,575 | ) | ||
Debt extinguishment expenses | 558 | 1,520 | ||||
Reversal of income tax valuation allowance | (535 | ) | (591 | ) | ||
Net effect of sales of other assets | (731 | ) | - | |||
Tax benefit arising from the adoption of the CARES Act provisions | - | (1,624 | ) | |||
Adjusted net income | $ | 66,731 | $ | 44,322 | ||
Calculation of pre-tax, pre-provision income: | ||||||
Net income (GAAP) | $ | 63,233 | $ | 44,965 | ||
Adjustments to net income (GAAP): | ||||||
Provision for income taxes | 21,263 | 12,287 | ||||
(Reversal of) provision for credit losses | (1,121 | ) | 4,197 | |||
Pre-tax, pre-provision income | $ | 83,375 | $ | 61,449 | ||
Adjusted earnings per share: | ||||||
Weighted average common shares - basic | 82,387 | 82,409 | ||||
Weighted average common shares - diluted | 82,391 | 82,430 | ||||
Earnings per share - basic (GAAP) | $ | 0.77 | $ | 0.55 | ||
Earnings per share - diluted (GAAP) | $ | 0.77 | $ | 0.55 | ||
Adjusted earnings per share - basic (non-GAAP) | $ | 0.81 | $ | 0.54 | ||
Adjusted earnings per share - diluted (non-GAAP) | $ | 0.81 | $ | 0.54 | ||
Adjusted return on average assets: | ||||||
Total average assets | $ | 7,333,861 | $ | 6,689,245 | ||
Return on average assets (GAAP) | 0.86 | % | 0.67 | % | ||
Adjusted return on average assets (non-GAAP) | 0.91 | % | 0.66 | % | ||
Adjusted return on average equity: | ||||||
Total average equity | $ | 1,091,393 | $ | 1,096,325 | ||
Return on average equity (GAAP) | 5.79 | % | 4.10 | % | ||
Adjusted return on average equity (non-GAAP) | 6.11 | % | 4.04 | % | ||
Adjusted return on average tangible equity: | ||||||
Total average equity | $ | 1,091,393 | $ | 1,096,325 | ||
Less: average goodwill | (210,895 | ) | (210,895 | ) | ||
Less: average other intangible assets | (4,133 | ) | (4,564 | ) | ||
$ | 876,365 | $ | 880,866 | |||
Return on average tangible equity (non-GAAP) | 7.22 | % | 5.10 | % | ||
Adjusted return on average tangible equity (non-GAAP) | 7.61 | % | 5.03 | % | ||
For the year ended | ||||||
Reconciliation of GAAP to Non-GAAP | June 30, | June 30, | ||||
(Dollars in Thousands, Unaudited) | 2021 | 2020 | ||||
Adjusted non-interest expense ratio: | ||||||
Non-interest expense (GAAP) | $ | 125,885 | $ | 107,624 | ||
Non-routine transactions: | ||||||
Merger-related expenses | (4,349 | ) | (951 | ) | ||
Branch consolidation expenses and impairment charges | (1,961 | ) | (720 | ) | ||
Debt extinguishment expenses | (796 | ) | (2,156 | ) | ||
Non-interest expense (non-GAAP) | $ | 118,779 | $ | 103,797 | ||
Non-interest expense ratio (GAAP) | 1.72 | % | 1.61 | % | ||
Adjusted non-interest expense ratio (non-GAAP) | 1.62 | % | 1.55 | % | ||
Adjusted efficiency ratio: | ||||||
Non-interest expense (non-GAAP) | $ | 118,779 | $ | 103,797 | ||
Net interest income (GAAP) | $ | 184,509 | $ | 149,354 | ||
Total non-interest income (GAAP) | 24,751 | 19,719 | ||||
Non-routine transactions: | ||||||
Net effect of sales and calls of securities | (1,144 | ) | (2,234 | ) | ||
Bargain purchase gain | (3,053 | ) | - | |||
Net effect of sales of other assets | (1,042 | ) | 342 | |||
Total revenue (non-GAAP) | $ | 204,021 | $ | 167,181 | ||
Efficiency ratio (GAAP) | 60.16 | % | 63.66 | % | ||
Adjusted efficiency ratio (non-GAAP) | 58.22 | % | 62.09 | % | ||
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
