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SOURCE: Kearny Financial Corp.
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August 06, 2008 14:45 ET
Kearny Financial Corp. Reports Fourth Quarter 2008 Operating Results
FAIRFIELD, NJ--(Marketwire - August 6, 2008) - Kearny Financial Corp. (NASDAQ: KRNY) (the
"Company"), the holding company of Kearny Federal Savings Bank (the
"Bank"), today reported net income for the quarter ended June 30, 2008 of
$825,000, or $0.01 per diluted share. The results represent a decrease of
$1.8 million compared to net income of $2.7 million, or $0.04 per diluted
share, for the quarter ended March 31, 2008 and an increase of $606,000
compared to net income of $219,000 for the quarter ended June 30, 2007.
Management attributes the decrease in net income between linked quarters
primarily to a loss on impairment of securities during the most recent
quarter and a tax benefit recognized during the linked quarter. The
increase in net income year-over-year resulted from an increase in net
interest income, a decrease in non-interest expense and a decrease in the
provision for loan losses, partially offset by an increase in income taxes
and a loss on impairment of securities. The Bank recognized a non-cash
after-tax charge to earnings of $659,000 (or $0.01 per diluted share) as a
result of other-than-temporary impairment during the quarter ended June 30,
2008 in the value of a mutual fund investing primarily in short-term agency
and private label mortgage-backed securities. Income before taxes was
lower on a linked quarter basis, but would have exceeded the prior
quarter's results absent the loss on impairment of securities.
Net income for the year ended June 30, 2008 was $5.9 million, or $0.09 per
diluted share, an increase of $4.0 million from $1.9 million, or $0.03 per
diluted share, for the year ended June 30, 2007. Management attributes the
increase in net income primarily to a decrease in non-interest expense as
well as an increase in net interest income, a decrease in the provision for
loan losses and an increase in non-interest income, partially offset by an
increase in income taxes and the loss on impairment of securities.
Kearny Federal Savings Bank operates from its administrative headquarters
in Fairfield, New Jersey, and 28 retail branch offices located in Bergen,
Hudson, Passaic, Morris, Middlesex, Essex, Union and Ocean Counties, New
Jersey. At June 30, 2008, Kearny Financial Corp. had total assets,
deposits and stockholders' equity of $2.08 billion, $1.38 billion and
$471.4 million, respectively.
The following is an overview of the Company's financial results for the
quarter ended June 30, 2008:
Net Interest Income
Net interest income during the quarter ended June 30, 2008 was $12.2
million, an increase of $582,000 or 5.0%, compared to net interest income
of $11.6 million during the quarter ended March 31, 2008 and an increase of
$1.2 million or 10.9%, compared to net interest income of $11.0 million
during the quarter ended June 30, 2007. The Company's net interest margin
during the quarter ended June 30, 2008 was 2.54%, compared to 2.47% during
the quarter ended March 31, 2008 and 2.39% during the quarter ended June
30, 2007. The increase in net interest income between linked quarters
resulted from an increase in interest income as well as a decrease in
interest expense. Interest income increased due primarily to the
redeployment of cash and cash equivalents in higher yielding loans
receivable and mortgage-backed securities. Interest expense decreased due
primarily to a decrease in the cost of deposits precipitated by the 325
basis point reduction in the federal funds rate since September 2007. The
increase in net interest income year-over-year resulted from an increase in
interest income as well as a decrease in interest expense.
Interest income increased $235,000 or 1.0%, to $24.8 million during the
current quarter compared to $24.6 million during the linked quarter and
increased $757,000 or 3.1%, compared to $24.0 million during the quarter
ended June 30, 2007. Interest expense decreased $347,000 or 2.7%, from
$12.9 million during the quarter ended March 31, 2008 to $12.6 million
during the quarter ended June 30, 2008. Year-over-year, interest expense
decreased $469,000 or 3.6%, from $13.1 million during the quarter ended
June 30, 2007.
Interest income from loans increased $203,000 to $14.1 million during the
current quarter compared to $13.9 million during the linked quarter and
increased $2.2 million from $11.9 million during the quarter ended June 30,
2007. Interest income increased between linked quarters due to an increase
in average loans receivable, partially offset by a decrease in average
yield. The increase in interest income year-over-year resulted from an
increase in average loans receivable while the average yield remained
unchanged. During the quarter ended June 30, 2008 average loans receivable
were $982.4 million with a yield of 5.74%. By comparison, during the
quarters ended March 31, 2008 and June 30, 2007 average loans receivable
were $961.4 million and $831.1 million, respectively, with yields of 5.79%
and 5.74%, respectively. Average loans receivable increased between linked
quarters due primarily to a substantial increase in residential loan
originations and purchases. The average yield slipped due to a decline in
commercial real estate loan originations, which traditionally provide a
better return than residential mortgages.
Interest income from mortgage-backed securities increased $657,000 to $9.3
million during the quarter ended June 30, 2008 from $8.7 million during the
quarter ended March 31, 2008, and increased $1.3 million from $8.0 million
during the quarter ended June 30, 2007. The increase in interest income
between linked quarters resulted from an increase in average
mortgage-backed securities while the average yield remained virtually
unchanged. Year-over-year, the increase resulted from increases in both
average mortgage-backed securities and average yield. During the quarter
ended June 30, 2008 average mortgage-backed securities were $746.8 million
with a yield of 4.99%. By comparison, during the quarters ended March 31,
2008 and June 30, 2007 average mortgage-backed securities were $693.8
million and $666.5 million, respectively, with yields of 5.00% and 4.82%,
respectively. The increase in the average balance was attributed to
mortgage-backed securities purchased late in the linked quarter when
management sought to supplement loan originations, which were languishing
due to the stagnant real estate market. Though the average yield was
virtually unchanged between linked quarters, the trend has been generally
upward due to rate adjustments on pass-through certificates containing
adjustable rate mortgages and higher coupons on securities purchased since
the year-ago quarter.
Interest income from non-mortgage-backed securities and other
interest-earning assets, primarily cash and cash equivalents, decreased
$625,000 to $1.4 million during the quarter ended June 30, 2008 compared to
$2.0 million during the quarter ended March 31, 2008 and decreased $2.7
million from $4.1 million during the quarter ended June 30, 2007. The
decrease in interest income between linked quarters and year-over-year is
attributed to decreases in both average balances and average yield. During
the quarter ended June 30, 2008 average securities and other
interest-earning assets were $191.8 million with a yield of 2.83%. By
comparison, during the quarters ended March 31, 2008 and June 30, 2007
average securities and other interest-earning assets were $226.0 million
and $339.1 million, respectively, with yields of 3.51% and 4.81%,
respectively. During the comparative periods, redeployment of cash and
cash equivalents into loans and mortgage-backed securities resulted in
declining average balances while the decrease in the federal funds rate
negatively impacted the average yield on both income categories.
Interest expense from deposits decreased $216,000 to $10.4 million during
the quarter ended June 30, 2008 from $10.6 million during the quarter ended
March 31, 2008 and decreased $2.0 million compared to $12.4 million during
the quarter ended June 30, 2007. The decrease in interest expense from
deposits between linked quarters resulted from a decrease in the average
cost of interest-bearing deposits, partially offset by an increase in
average interest-bearing deposits. Year-over-year, the decrease in
interest expense resulted from decreases in both average interest-bearing
deposits and their average cost. During the quarter ended June 30, 2008
average interest-bearing deposits were $1.32 billion with an average cost
of 3.16%. By comparison, during the quarters ended March 31, 2008 and June
30, 2007 average interest-bearing deposits were $1.27 billion and $1.40
billion, respectively, with average costs of 3.34% and 3.53%, respectively.
The Bank continues to be liability sensitive with a considerable percentage
of its certificates of deposit re-pricing within one year. Absent a
significant increase in the federal funds rate, management expects further
reductions in the Bank's cost of deposits to the extent maturing
certificates of deposit re-price lower.
Interest expense attributed to Federal Home Loan Bank advances decreased
$131,000 to $2.2 million during the quarter ended June 30, 2008 compared to
$2.3 million during the quarter ended March 31, 2008 and increased $1.5
million from $705,000 during the quarter ended June 30, 2007. The decrease
in interest expense between linked quarters resulted from decreases in both
average advances and their average cost. Year-over-year, the increase in
interest expense resulted from an increase in average advances, partially
offset by a lower average cost of borrowing. During the quarter ended June
30, 2008 average advances were $218.0 million with an average cost of
3.97%. By comparison, during the quarters ended March 31, 2008 and June
30, 2007 average advances were $227.3 million and $51.5 million,
respectively, with average costs of 4.04% and 5.48%, respectively. The
Bank borrowed $100.0 million during the quarter ended September 30, 2007
and an additional $100.0 million during the quarter ended December 31, 2007
to replenish liquidity diminished by loan originations and deposit
outflows. The advances were considered to be a cheaper funding source
compared to certificates of deposit and served to significantly lower the
cost of borrowings.
Non-interest Income
Non-interest income attributed to fees, service charges and miscellaneous
income decreased $18,000 or 2.7%, to $657,000 during the quarter ended June
30, 2008 compared to $675,000 during the quarter ended March 31, 2008 and
decreased $9,000 or 1.4%, from $666,000 during the quarter ended June 30,
2007. The decrease in non-interest income between linked quarters and
year-over-year resulted primarily from lower loan fees and fee income from
retail operations.
There was no gain or loss on sale of securities during the quarter ended
June 30, 2008 compared to a loss of $5,000 and no gain or loss recorded
during the quarters ended March 31, 2008 and June 30, 2007, respectively.
During the quarter ended June 30, 2008, the Company took a non-cash pre-tax
charge to earnings of approximately $659,000 as a result of an
other-than-temporary impairment in the value of its $8.4 million holding in
the AMF Ultra Short Mortgage Fund, a mutual fund investing primarily in
agency and private label mortgage-backed securities with short durations.
The credit crisis and problems in the real estate market have negatively
impacted the market value of certain mortgage-related securities in the
fund's portfolio resulting in a continuing decline in the net asset value
of this fund. The fund's manager instituted a temporary prohibition
against cash redemptions to protect shareholders against the possibility
that the fund might be forced to liquidate securities at distressed price
levels to satisfy redemption requests. These factors, current accounting
rules and associated SEC guidance contributed to management's determination
that the impairment was other-than-temporary.
Due to a continuing decline in the net asset value of the fund, management
decided in July to withdraw its investment in the fund by invoking a
redemption-in-kind option available to shareholders. The shares redeemed
for cash and shares redeemed for the underlying securities
(redemption-in-kind) will be written down to fair value as of the trade
date resulting in an additional pre-tax charge to earnings of approximately
$415,000 during the quarter ending September 30, 2008. Since the
securities will be carried at a significant discount to face value,
management anticipates that the $1.1 million charge in aggregate will be
partially recovered as payments from the mortgage-backed securities are
received each month. Withdrawal from the fund will also eliminate the 45
basis point management fee.
Non-interest Expense
Non-interest expense increased $339,000 or 3.4%, to $10.4 million during
the quarter ended June 30, 2008 from $10.1 million during the quarter ended
March 31, 2008 and decreased $848,000 or 7.6%, compared to $11.2 million
during the quarter ended June 30, 2007.
The increase in non-interest expense between the quarters ended June 30,
2008 and March 31, 2008, was primarily the result of an increase in
salaries and employee benefits as well as smaller increases in equipment
expense and advertising expense, partially offset by a decrease in net
occupancy expense of premises.
Salaries and employee benefits increased $283,000 to $6.3 million between
linked quarters. Benefits expense increased $280,000 due primarily to a
non-recurring dividend of $253,000 received during the linked quarter from
the Bank's health insurer based on the ratio of earned premiums to premiums
paid during a prior year. Compensation expense increased $44,000 due
primarily to $33,000 in overtime paid to personnel involved in reconciling
differences resulting from system problems at the Bank's data processing
provider. The Bank expects to be reimbursed by the service provider for
this expense. Partially offsetting these increases were decreases of
$41,000 in aggregate, which resulted from a decrease in Employee Stock
Ownership Plan (ESOP) expense due to a decrease in the average market price
of the Company's common stock and a decrease in payroll taxes expense due
to having reached statutory limits on unemployment and disability
contributions for most employees.
Equipment expense and advertising expense increased $40,000 to $1.1 million
and $80,000 to $266,000, respectively, between linked quarters. Increases
attributed to improving network communications and higher costs associated
with the Bank's core processor were primarily responsible for the increase
in equipment expense. Advertising expense increased due primarily to
marketing costs associated with promoting recently opened retail branches
in Brick Township and Lakewood, New Jersey. Net occupancy expense of
premises decreased $48,000 to $953,000 between linked quarters due
primarily to the absence of winter season costs during the current quarter.
The $848,000 decrease in non-interest expense during the quarter ended June
30, 2008 compared to the quarter ended June 30, 2007 resulted primarily
from a decrease in salaries and employee benefits expense of $612,000,
which for the most part was due to freezing the Bank's defined benefit plan
in July 2007 and lower ESOP expense as explained above. Decreases in
equipment expense, advertising expense and amortization of intangible
assets totaled $363,000 in aggregate partially offset by increases in net
occupancy expense of premises and miscellaneous expense, which totaled
$123,000 in aggregate.
Provision for Income Taxes
The provision for income taxes during the quarter ended June 30, 2008 was
an income tax expense of $957,000 compared to income tax benefits of
$462,000 and $36,000 during the quarters ended March 31, 2008 and June 30,
2007, respectively. With respect to the loss on impairment of securities,
the Company and the Bank have eligible capital gains for federal and state
income tax purposes, respectively, to partially offset a capital loss.
However, due to the temporary prohibition against redemptions, management
determined that a capital loss might not be realized within the carry-back
period; therefore, a valuation allowance was recorded during the quarter
ended June 30, 2008 against the related other-than-temporary impairment
deferred tax asset, offsetting the tax benefit and resulting in an
after-tax charge to earnings equal to the pre-tax charge of approximately
$659,000. Having subsequently invoked the redemption-in-kind provision in
July, however, both the Company and the Bank are now positioned to
recognize benefits for federal and state income tax purposes during the
quarter ending September 30, 2008. The pre-tax impairment charges of
$659,000 recorded during the quarter ended June 30, 2008 and $415,000
resulting from the
redemption-in-kind in July became, upon the redemption-in-kind, subject to
income tax benefits of approximately $140,000 and $25,000, respectively.
During the linked quarter, the Bank recognized a $1.2 million income tax
benefit attributable to the reversal of a previously established deferred
tax asset valuation allowance, as management determined that it was more
likely than not that the benefit to be derived from utilization of a state
net operating loss carry-forward will be realized due to the dissolution of
the Bank's New Jersey investment subsidiary, which occurred in June,
stopping further increases in the Bank's state net operating loss and
allowing the Bank to generate sufficient state taxable income to utilize
existing net operating loss carry-forwards in their entirety.
Cash and Cash Equivalents
Cash and cash equivalents, which consist primarily of interest-bearing
deposits in other banks, decreased $18.1 million to $131.7 million at June
30, 2008, from $149.8 million at March 31, 2008. The 325 basis point
reduction in the federal funds rate beginning in September 2007 has had a
negative effect on interest income derived from cash and cash equivalents
prompting management to redeploy cash and cash equivalents into primarily
loan originations and purchases during this quarter and purchases of
mortgage-backed securities during the linked quarter.
Loans and Asset Quality
Loans receivable, net of deferred fees and costs and the allowance for loan
losses, increased $74.5 million to $1.02 billion at June 30, 2008 from
$947.2 million at March 31, 2008. The increase in net loans receivable
continued a trend of steady increases in recent quarters, which was
temporarily interrupted during the linked quarter due to a decrease in loan
originations and purchases resulting from a decline in borrower demand
attributed to a slowing economy. Total loans increased $74.2 million to
$1.03 billion at June 30, 2008 from $952.3 million at March 31, 2008. The
most significant activity occurred in the one-to-four family first mortgage
category, which increased $70.6 million between March 31 and June 30, 2008.
Also increasing between linked quarters were home equity mortgages and
commercial business loans, with increases of $3.3 million and $1.5 million,
respectively. Partially offsetting the increases were decreases in
nonresidential mortgages, multi-family mortgages, home equity lines of
credit and miscellaneous loan types of $374,000, $145,000, $559,000 and
$88,000, respectively. Gross construction loans decreased $816,000
between linked quarters.
There was no provision for loan losses recorded during the quarter ended
June 30, 2008 compared to no provision and a $193,000 provision during the
quarters ended March 31, 2008 and June 30, 2007, respectively.
Non-performing loans were $1.6 million or 0.15% of total loans at June 30,
2008. By comparison, non-performing loans were $1.4 million or 0.15% of
total loans at March 31, 2008 and $1.5 million or 0.17% of total loans at
June 30, 2007. Net charge-offs during the quarters ended June 30, 2008,
March 31, 2008 and June 30, 2007 were $38,000, $8,000 and $-0-,
respectively, but as a percentage of average loans net charge-offs were
zero percent during all three quarters. The allowance for loan losses as a
percentage of total loans outstanding was 0.59% at June 30, 2008, 0.64% at
March 31, 2008 and 0.70% at June 30, 2007, reflecting an allowance balance
of $6.1 million, $6.1 million and $6.0 million, respectively.
Securities and Mortgage-backed Securities
Mortgage-backed securities, all of which are classified as available for
sale, decreased $36.0 million to $726.0 million at June 30, 2008 compared
to $762.0 million at March 31, 2008. The change resulted from principal
repayments and maturities and a $9.6 million decrease in the fair value of
the portfolio, partially offset by purchases of $21.4 million. Cash flows
from principal and interest payments were generally used to fund loan
originations and purchases compared to the linked quarter when
mortgage-backed security purchases totaled $107.5 million and served as an
alternative to loan originations, which had decreased due to slumping
borrower demand. Excluding private label mortgage-backed securities in the
AMF Ultra Short Mortgage Fund, the Bank's mortgage-backed securities
portfolio consists of Fannie Mae, Freddie Mac or Ginnie Mae issues only.
Non-mortgage-backed securities, all of which are classified as available
for sale, decreased $1.2 million to $38.2 million at June 30, 2008 compared
to $39.4 million at March 31, 2008. The decrease resulted primarily from
the other-than-temporary impairment charge attributed to the AMF Ultra
Short Mortgage Fund as well as principal repayments and a decrease in the
fair value of the portfolio. There were no securities sold during the
quarter compared to the sale of municipal bonds with an amortized cost of
$4.3 million during the linked quarter.
Deposits
Deposits increased $28.4 million to $1.38 billion at June 30, 2008, from
$1.35 billion at March 31, 2008. During the quarter ended June 30, 2008,
certificates of deposit increased $22.4 million. Also increasing were
interest-bearing demand deposits and savings deposits, which increased $4.2
million and $2.1 million, respectively, partially offset by a nominal
decrease in non-interest-bearing deposits. Deposit pricing in the
marketplace continued to be reasonably disciplined, which helped to
increase deposits during the current and linked quarters, reversing the
outflow of deposits recently experienced by the Bank. There is some upward
pressure in the marketplace on certificates of deposit and interest-bearing
demand deposit interest rates emanating from some financial institutions
that are under pressure due to negative publicity associated with asset
quality problems. Adding to the upward pressure on interest rates, many
financial institutions are attempting to lock in depositors at current
interest rates for longer terms as a hedge against future increases in the
federal funds rate.
Federal Home Loan Bank Advances
Federal Home Loan Bank advances were unchanged from the linked quarter at
$218.0 million as of June 30, 2008. Given adequate liquidity, there was no
reason to borrow during the quarter but additional borrowings are an option
available to management if funding needs change or to either lengthen
liabilities or to implement a wholesale leverage strategy.
Stockholders' Equity and Capital Management
During the quarter ended June 30, 2008, stockholders' equity decreased $5.9
million to $471.4 million from $477.3 million at March 31, 2008. The
decrease was primarily the result of a $5.9 million decrease in accumulated
other comprehensive income due to mark-to-market adjustments to the
available for sale securities and mortgage-backed securities portfolios and
benefit plan related adjustments to equity per FASB Statement No. 158.
Also contributing to the decrease was a $1.5 million increase in treasury
stock due to the purchase of 139,300 shares of the Company's common stock
and a $912,000 cash dividend declared for payment to minority shareholders.
Partially offsetting the decrease in stockholders' equity was net income
during the quarter of $825,000, the release of $404,000 of ESOP shares and
$771,000 of restricted stock plan shares and an adjustment to equity of
$477,000 for expensing stock options.
The Bank's ratio of tangible equity to tangible assets was 17.8% at June
30, 2008. The Bank's Tier 1 risk-based capital ratio was 37.9%, far in
excess of the 6.00% level required by the Office of Thrift Supervision to
be classified "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 Kearny Financial Corp. with the Securities and Exchange
Commission from time to time. The Company does not undertake and
specifically disclaims any obligation to update any forward-looking
statement, whether written or oral, that may be made from time to time by
or on behalf of the Company.
KEARNY FINANCIAL CORP.
FINANCIAL HIGHLIGHTS
(In Thousands, Except Per Share Data, Unaudited)
June 30, March 31,
2008 2008
----------- -----------
Selected Balance Sheet Data:
Assets $ 2,083,039 $ 2,060,039
Cash and cash equivalents 131,723 149,814
Securities available for sale 38,183 39,384
Net loans receivable 1,021,686 947,220
Mortgage-backed securities available for sale 726,023 762,026
Goodwill 82,263 82,263
Deposits 1,379,032 1,350,674
Federal Home Loan Bank advances 218,000 218,000
Total stockholders' equity 471,371 477,285
For the Three Months Ended
-------------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
Summary of Operations:
Interest income $ 24,789 $ 24,554 $ 24,032
Interest expense 12,596 12,943 13,065
----------- ----------- -----------
Net interest income 12,193 11,611 10,967
Provision for loan losses 0 0 193
----------- ----------- -----------
Net interest income after provision
for loan losses 12,193 11,611 10,774
Non-interest income, excluding loss
on securities 657 675 666
Loss on sale of securities 0 (5) 0
Loss on impairment of securities (659) 0 0
Non-interest expense 10,409 10,070 11,257
----------- ----------- -----------
Income before taxes 1,782 2,211 183
Provision for income taxes 957 (462) (36)
----------- ----------- -----------
Net income $ 825 $ 2,673 $ 219
=========== =========== ===========
Per Share Data:
Net income per share - basic $ 0.01 $ 0.04 $ 0.00
Net income per share - diluted $ 0.01 $ 0.04 $ 0.00
Weighted average number of common
shares outstanding - basic 68,548 68,625 68,938
Weighted average number of common
shares outstanding - diluted 68,634 68,646 69,153
Per Share Data:
Cash dividends per share (1) $ 0.05 $ 0.05 $ 0.05
Dividend payout ratio (2) 110.55% 34.34% 427.40%
(1) Represents dividends declared per common share.
(2) Represents dividends paid per minority share divided by net income.
At the Three Months Ended
-------------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
Per Share Data:
Closing price as reported by NASDAQ $ 11.00 $ 10.95 $ 13.48
Book Value $ 6.69 $ 6.76 $ 6.50
Tangible Book Value $ 5.52 $ 5.59 $ 5.34
For the Three Months Ended
-------------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
Performance Ratios:
Return on average assets 0.16% 0.52% 0.04%
Return on average equity 0.69% 2.27% 0.19%
Net interest rate spread (1) 1.89% 1.77% 1.63%
Net interest margin (2) 2.54% 2.47% 2.39%
Average interest-earning assets to
average interest-bearing liabilities 124.79% 125.22% 126.64%
Efficiency ratio, net of loss on
securities 81.00% 81.96% 96.77%
Non-interest expense to average
assets 1.99% 1.97% 2.26%
(1) Interest income divided by average interest-earning assets less
interest expense divided by average interest-bearing liabilities.
(2) Net interest income divided by average interest-earning assets.
At or for the Three Months Ended
-------------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
Asset Quality Ratios:(1)
Non-performing loans to total loans 0.15% 0.15% 0.17%
Non-performing assets to total
assets 0.08% 0.07% 0.08%
Net charge-offs to average loans
outstanding 0.00% 0.00% 0.00%
Allowance for loan losses to total
loans 0.59% 0.64% 0.70%
Allowance for loan losses to
non-performing loans 388.05% 432.65% 406.25%
(1) Asset quality ratios are period end ratios unless otherwise noted.
At or for the Three Months Ended
-------------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
Capital Ratios:
Average equity to average assets 22.83% 23.07% 23.67%
Equity to assets at period end 22.63% 23.17% 24.13%
Tangible equity to tangible assets
at period end 19.51% 19.79% 21.10%
For the Three Months Ended
-------------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
Average Balances:
Loans receivable $ 982,388 $ 961,376 $ 831,115
Mortgage-backed securities available
for sale 746,756 693,775 666,481
Securities available for sale 41,006 41,593 90,947
Other interest-earning assets 150,751 184,449 248,144
----------- ----------- -----------
Total interest earning
assets 1,920,901 1,881,193 1,836,687
Non-interest-earning assets 166,612 160,948 156,749
----------- ----------- -----------
Total assets $ 2,087,513 $ 2,042,141 $ 1,993,436
=========== =========== ===========
Interest-bearing deposits $ 1,321,253 $ 1,274,991 $ 1,398,784
Federal Home Loan Bank advances 218,000 227,298 51,492
----------- ----------- -----------
Total interest-bearing
liabilities 1,539,253 1,502,289 1,450,276
Non-interest-bearing liabilities 71,758 68,796 71,273
Stockholders' equity 476,502 471,056 471,887
----------- ----------- -----------
Total liabilities and
stockholders' equity $ 2,087,513 $ 2,042,141 $ 1,993,436
=========== =========== ===========
For the Three Months Ended
-------------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
Spread and Margin Analysis:
Yield on average:
Loans receivable 5.74% 5.79% 5.74%
Mortgage-backed securities
available for sale 4.99% 5.00% 4.82%
Securities available for sale 3.71% 4.23% 4.28%
Other interest-earning assets 2.60% 3.35% 5.00%
Interest-earning assets 5.16% 5.22% 5.23%
Cost of average:
Interest-bearing deposits 3.16% 3.34% 3.53%
Federal Home Loan Bank advances 3.97% 4.04% 5.48%
Interest-bearing liabilities 3.27% 3.45% 3.60%
Net interest rate spread 1.89% 1.77% 1.63%
Net interest margin 2.54% 2.47% 2.39%
Average interest-earning assets to
average interest-bearing liabilities 124.79% 125.22% 126.64%
For the Twelve
Months Ended
------------------------
June 30, June 30,
2008 2007
----------- -----------
Summary of Operations:
Interest income $ 97,367 $ 95,561
Interest expense 50,528 50,468
----------- -----------
Net interest income 46,839 45,093
Provision for loan losses 94 571
----------- -----------
Net interest income after provision for loan
losses 46,745 44,522
Non-interest income, excluding gain (loss)
on securities 2,708 2,434
Gain on sale of securities 0 55
Loss on impairment of securities (659) 0
Non-interest expense 40,939 44,856
----------- -----------
Income before taxes 7,855 2,155
Provision for income taxes 1,951 221
----------- -----------
Net income $ 5,904 $ 1,934
=========== ===========
Per Share Data:
Net income per share - basic $ 0.09 $ 0.03
Net income per share - diluted $ 0.09 $ 0.03
Weighted average number of common shares
outstanding - basic 68,675 69,242
Weighted average number of common shares
outstanding - diluted 68,789 69,581
Per Share Data:
Cash dividends per share (1) $ 0.20 $ 0.20
Dividend payout ratio (2) 62.47% 192.61%
(1) Represents dividends declared per common share.
(2) Represents dividends paid per minority share divided by net income.
For the Twelve
Months Ended
------------------------
June 30, June 30,
2008 2007
----------- -----------
Performance Ratios:
Return on average assets 0.29% 0.10%
Return on average equity 1.26% 0.41%
Net interest rate spread (1) 1.81% 1.70%
Net interest margin (2) 2.54% 2.43%
Average interest-earning assets to average
interest-bearing liabilities 126.49% 126.82%
Efficiency ratio, net of gain (loss) on
securities 82.63% 94.38%
Non-interest expense to average assets 2.04% 2.23%
(1) Interest income divided by average interest-earning assets less
interest expense divided by average interest-bearing liabilities.
(2) Net interest income divided by average interest-earning assets.
At or for the Twelve
Months Ended
------------------------
June 30, June 30,
2008 2007
----------- -----------
Asset Quality Ratios:(1)
Non-performing loans to total loans 0.15% 0.17%
Non-performing assets to total assets 0.08% 0.08%
Net charge-offs to average loans outstanding 0.00% 0.00%
Allowance for loan losses to total loans 0.59% 0.70%
Allowance for loan losses to non-performing loans 388.05% 406.25%
(1) Asset quality ratios are period end ratios unless otherwise noted.
At or for the Twelve
Months Ended
------------------------
June 30, June 30,
2008 2007
----------- -----------
Capital Ratios:
Average equity to average assets 23.41% 23.56%
Equity to assets at period end 22.63% 24.13%
Tangible equity to tangible assets at period end 19.51% 21.10%
For the Twelve
Months Ended
------------------------
June 30, June 30,
2008 2007
----------- -----------
Average Balances:
Loans receivable $ 951,019 $ 785,210
Mortgage-backed securities available for sale 699,942 673,904
Securities available for sale 53,391 151,335
Other interest-earning assets 141,792 243,867
----------- -----------
Total interest earning assets 1,846,144 1,854,316
Non-interest-earning assets 158,737 152,926
----------- -----------
Total assets $ 2,004,881 $ 2,007,242
=========== ===========
Interest-bearing deposits $ 1,284,415 $ 1,405,590
FHLB advances 175,081 56,615
----------- -----------
Total interest-bearing liabilities 1,459,496 1,462,205
Non-interest-bearing liabilities 75,976 72,094
Stockholders' equity 469,409 472,943
----------- -----------
Total liabilities and stockholders'
equity $ 2,004,881 $ 2,007,242
=========== ===========
For the Twelve
Months Ended
------------------------
June 30, June 30,
2008 2007
----------- -----------
Spread and Margin Analysis:
Yield on average:
Loans receivable 5.80% 5.73%
Mortgage-backed securities available for sale 4.97% 4.78%
Securities available for sale 4.23% 4.10%
Other interest-earning assets 3.68% 4.99%
Interest-earning assets 5.27% 5.15%
Cost of average:
Interest-bearing deposits 3.37% 3.37%
FHLB advances 4.12% 5.51%
Interest-bearing liabilities 3.46% 3.45%
Net interest rate spread 1.81% 1.70%
Net interest margin 2.54% 2.43%
Average interest-earning assets to average
interest-bearing liabilities 126.49% 126.82%