BCBP BCB Bancorp Inc

BCB Bancorp, Inc. (the “Company”), (NASDAQ: BCBP), the holding company for BCB Community Bank (the “Bank”), today reported that an increase in total interest income and decreases in the provision for loan losses and non-interest expenses, contributed to second quarter and year-to-date 2019 profits. Net income increased $2.9 million, or 126.0 percent, to $5.2 million for the second quarter of 2019, compared with $2.3 million for the second quarter of 2018. In the preceding quarter, the Company earned $5.5 million. There were no merger related costs associated with the IA Bancorp, Inc. (“IAB”) acquisition during the current quarter or the preceding quarter. This compares to acquisition costs of $2.0 million during the second quarter a year ago.

For the first six months of the year, net income increased $3.7 million, or 53.8 percent, to $10.7 million, compared with $7.0 million for the six months ended June 30, 2018.

“Our second quarter and year-to-date financial results reflect the success of our earnings-focused and conservative growth strategies, which are producing strong core earnings,” stated Thomas Coughlin, President and Chief Executive Officer. “This focus on pricing and profitable relationships resulted in higher net interest income. The on-going benefits of the IAB acquisition also contributed to profitability, as expenses were down through the continued capture of synergies from the transaction. We will continue to look for opportunities to build our relationships and grow our brand of banking throughout our surrounding markets.” 

The IAB acquisition, which was completed during the second quarter of 2018, added approximately $221.4 million in assets, $178.4 million in deposits and $182.6 million in net loans.

Second Quarter 2019 Financial Highlights

• Net income increased 126.0 percent to $5.2 million in the second quarter of 2019, compared to $2.3 million in the second quarter of 2018.
• Earnings per diluted share increased to $0.30 in 2Q19 compared to $0.13 in 2Q18.
• Net interest income, before the provision for loan losses, increased 4.4 percent to $20.9 million in the second quarter, compared to $20.0 million in the second quarter a year ago.
• Net interest margin was 3.16 percent in the second quarter compared to 3.52 percent in the second quarter a year ago.
• Total assets increased 8.8 percent to $2.738 billion at June 30, 2019, compared to $2.157 billion a year earlier.
• Net loans receivable increased 8.5 percent to $2.300 billion at June 30, 2019, compared to $2.120 billion a year earlier.
• Allowance for loan losses as a percentage of non-accrual loans was 433.4 percent at June 30, 2019, compared to 191.8 percent at June 30, 2018.
• Tangible book value improved to $11.58 at June 30, 2019 from $10.69 a year ago.
• Earlier this month, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.14 per share. The dividend will be payable August 23, 2019, to common shareholders of record on August 9, 2019. 
• The Company issued $6.2 million of private placement common stock which closed in February 2019 and $5.3 million of preferred series G stock, which was issued in January 2019. The Company had also issued $33.5 million of subordinated debt in July 2018 which, for regulatory purposes, is treated as Tier 1 capital for the Bank and Tier 2 capital for the Company, when applicable.

Balance Sheet Review

Total assets increased by $221.6 million, or 8.8 percent, to $2.738 billion at June 30, 2019 from $2.517 billion at June 30, 2018 and increased by $19.7 million, or 0.7 percent, compared to March 31, 2019. The increase in total assets was primarily the result of an increase in total cash and cash equivalents as a result of new deposit relationships, organic loan growth, and the inclusion of operating and finance leases due to accounting standards changes.

Net loans receivable increased by $179.9 million, or 8.5 percent, to $2.300 billion at June 30, 2019 from $2.120 billion at June 30, 2018, and decreased slightly compared to $2.307 billion at March 31, 2019. The organic growth in loans over the first six months of 2019 represented increases of $27.2 million in construction loans, $4.3 million in commercial real estate and multi-family loans, and $603,000 in residential one-to-four family loans, partly offset by decreases of $9.0 million in home equity loans, $624,000 in commercial business loans, and $82,000 in consumer loans. The slight decrease in loans receivable for the current quarter reflects the Company’s growth and capital management strategies.

Total cash and cash equivalents increased by $47.2 million, or 26.2 percent, to $227.6 million at June 30, 2019 from $180.4 million a year ago, and increased by $34.1 million, or 17.6 percent compared to $193.5 million three months earlier. The Company’s level of cash and cash equivalents is a part of the Company’s strategy to maintain strong levels of liquidity. Total investment securities decreased by $13.3 million, or 9.8 percent, to $122.1 million at June 30, 2019 from $135.4 million at June 30, 2018, and decreased by $3.7 million, or 3.0 percent, compared to $125.9 million at March 31, 2019.

On January 1, 2019, the Company adopted Accounting Standards Update ("ASU") No. 2016-02 - Leases, requiring on-balance sheet reporting for all operating and financing leases, which resulted in the recording of $14.7 million in operating lease right-of-use assets and a corresponding $14.7 million in operating lease liabilities at June 30, 2019.

Total deposits increased by $223.3 million, or 11.3 percent, to $2.208 billion at June 30, 2019 from $1.985 billion at June 30, 2018, and increased by $19.6 million, or 0.9 percent, from $2.189 billion at March 31, 2019. Increases over the first six months of 2019 included $45.3 million in money market checking accounts, $14.0 million in non-interest bearing deposits, and $6.9 million in transaction accounts, partly offset by decreases of $36.0 million in certificates of deposit, and $2.7 million in savings and club accounts. The decrease in the Company’s certificates of deposit was related to reduced levels of listing service and brokered certificates of deposit, which saw decreases of $17.3 million and $132.0 million, respectively, during the first six months of 2019. These decreases were primarily related to the decrease in loan funding requirements and allowed the Company to reduce higher cost wholesale funding levels. The Company uses listing service and brokered certificates of deposit as additional sources of deposit liquidity, which totaled $19.6 million and $116.0 million, respectively, at June 30, 2019.

Debt obligations remained flat at $282.5 million at June 30, 2019 and March 31, 2019, and consisted of both Federal Home Loan Bank (“FHLB”) borrowings and subordinated debt balances. Debt obligations decreased when compared to $324.1 million at June 30, 2018. FHLB borrowings reflect the use of long-term advances to augment deposits as the Company’s funding source for originating loans and investing in investment securities. The weighted average interest rate of FHLB advances was 2.18 percent at June 30, 2019. The issuance of subordinated debt was to maintain adequate capital ratios for further growth. The fixed interest rate of subordinated debt balances was 5.625% at June 30, 2019.

Stockholders’ equity increased by $27.1 million, or 14.0 percent, to $221.2 million at June 30, 2019 from $194.1 million at June 30, 2018, and increased by $4.4 million, or 2.0 percent, compared to $216.7 million three months earlier. The year-over-year increase in stockholders’ equity was primarily attributable to the Company’s issuance of $6.2 million of common stock in a private placement which closed in February 2019 and the issuance of $5.3 million of preferred series G stock in a private placement, which was issued in January 2019. Retained earnings increased by $9.8 million to $43.3 million at June 30, 2019 from $33.6 million a year ago, due primarily to the increase in net income, net of dividends paid.

Second Quarter Income Statement Review

Net interest income increased by $875,000, or 4.4 percent, to $20.9 million for the second quarter of 2019 from $20.0 million for the second quarter of 2018. The increase in net interest income resulted primarily from an increase in the average balance of interest-earning assets of $361.0 million, or 15.9 percent, to $2.638 billion for the second quarter of 2019 from $2.277 billion for the second quarter a year ago. There was an increase in the average yield on interest-earning assets of 13 basis points to 4.66 percent for the second quarter of 2019, from 4.53 percent for the second quarter a year ago. There was also an increase in the average balance of interest-bearing liabilities of $304.6 million, or 16.1 percent, to $2.194 billion for the second quarter of 2019 from $1.890 billion for the second quarter a year ago, and an increase in the average rate on interest-bearing liabilities of 59 basis points to 1.80 percent for the second quarter of 2019 from 1.21 percent for the second quarter a year ago. Interest income on loans also included $518,000 of amortization of purchase credit adjustments related to the acquisition of IAB for the three months ended June 30, 2019, which added approximately eight basis points to the average yield on interest earning assets on an annualized basis. Interest expense, net, related to the issuance of subordinated debt in July 2018, totaled $529,000 for the three months ended June 30, 2019, which added approximately seven basis points to the average cost of funds on an annualized basis.

Net interest margin was 3.16 percent for the second quarter of 2019 and 3.52 percent for second quarter of 2018. “The decrease in the net interest margin was the result of the higher interest rate environment, with the increase in the cost of funds outpacing the return on interest earning assets for the short term,” said Coughlin.

Total non-interest income decreased by $235,000, or 15.0 percent, to $1.3 million for the second quarter of 2019 from $1.6 million for the second quarter of 2018. The decrease in total non-interest income was mainly related to lower income from fees and service charges as well as lower gains on sale of loans, partly offset by higher gain on sale of other real estate owned properties and gains on sale of investment securities. Fees and service charges decreased $169,000, or 17.4 percent to $802,000 for the second quarter of 2019 from $971,000 for the second quarter of 2018. The decrease in fees and service charges resulted primarily from lower loan-servicing fee income for the six months ended June 30, 2019 as compared to the same period in the prior year, which relates to less sales of loans in the current year period.

Second quarter 2019 total non-interest expense decreased by $2.1 million, or 13.1 percent, to $13.9 million from $16.0 million for the second quarter a year ago. There were no merger related expenses in the second quarter of 2019, compared to $2.0 million of merger-related expenses in the second quarter a year ago. Salaries and employee benefits expense decreased by $207,000 during the second quarter of 2019 compared to the second quarter a year ago. The decrease in salaries and employee benefits relates in part to a reduction in full-time equivalent employees, from 371 at June 30, 2018 to 366 at June 30, 2019, as part of management’s continued initiative to manage headcount throughout the organization.

The income tax provision increased by $1.1 million, or 93.1 percent, to $2.3 million for the second quarter of 2019 from $1.2 million for the second quarter of 2018, primarily due to the increase in income before taxes. The consolidated effective tax rate for the second quarter of 2019 was 30.7 percent compared to 34.2 percent for the second quarter of 2018. The lower effective tax rate in the current period primarily attributable to an adjustment for the second quarter of 2018, related to an increase in the New Jersey corporate business tax of 2.5 percent which was enacted July 1, 2018, and effective retroactively to January 1, 2018.  

Year to Date Income Statement Review

Net interest income increased by $5.3 million, or 14.7 percent, to $41.8 million for the first six months of 2019 from $36.5 million for the first six months of 2018. Net interest margin was 3.17 percent for the first half of 2019 and 3.46 percent for the first half of 2018. The decrease in the net interest margin was the result of the higher interest rate environment within the period, with the increase in the cost of funds outpacing the return on interest earning assets for the short term. Interest income on loans also included $1.0 million of amortization of purchase credit adjustments related to the acquisition of IAB for the six months ended June 30, 2019, which added approximately eight basis points to the average yield on interest earning assets on an annualized basis. Interest expense, net, related to the issuance of subordinated debt in July 2018, totaled $1.0 million for the six months ended June 30, 2019, which added approximately seven basis points to the average cost of funds on an annualized basis.

Total non-interest income decreased by $2.0 million, or 39.6 percent, to $3.0 million for the first six months of 2019 from $5.0 million for the same period a year ago. The decrease in total non-interest income mainly related to a decrease in the amount of other non-interest income of $2.2 million, or 95.6 percent, to $102,000 for the first six months of 2019 from $2.3 million for the first six months of 2018. The decrease in other non-interest income was the result of $2.2 million in proceeds from a legal settlement recognized in the first quarter of 2018.

Total non-interest expense decreased by $320,000, or 1.1 percent, to $27.7 million for the first six months of 2019 from $28.0 million for the first six months of 2018. There were no merger-related expenses in the first six months of 2019, compared to $2.2 million in the first six months of 2018. Excluding merger-related expenses, total non-interest expense increased $1.9 million, or 7.2 percent, primarily related to normal inflationary increases and the inclusion of IAB expenses for the full six-month period ending June 30, 2019 as compared to the partial period of April 17 to June 30 in the prior year.

The income tax provision increased by $1.7 million, or 56.6 percent, to $4.8 million for the first six months of 2019 from $3.1 million for the six months of 2018, primarily related to the increase in income before taxes. The consolidated effective tax rate for the first half of 2019 was 30.8 percent compared to 30.5 percent for the first half of 2018.

Asset QualityThe provision for loan losses decreased by $1.3 million, to $755,000 for the second quarter of 2019 from $2.1 million for the second quarter of 2018.  Year-to-date, the provision for loan losses decreased by $1.8 million for the six months ended June 30, 2019, to $1.6 million from $3.4 million for the six months ended June 30, 2018. Non-accruing loans improved to $5.5 million, or 0.24 percent of gross loans at June 30, 2019, compared to $5.7 million, or 0.24 percent of gross loans at March 31, 2019, and $10.8 million, or 0.50 percent of gross loans, a year earlier. Non-accruing loans excluded $7.0 million of Purchased Credit-Impaired loans acquired through the merger with IAB.

Performing troubled debt restructured (“TDR”) loans that were not included in nonaccrual loans at June 30, 2019, were $21.8 million, compared to $23.1 million at March 31, 2019 and $20.7 million at June 30, 2018. Borrowers who are in financial difficulty and who have been granted concessions that may include interest rate reductions, term extensions, or payment alterations are categorized as TDR loans. 

The allowance for loan losses was $23.8 million, or 433.5 percent of non-accruing loans and 1.02 percent of gross loans, at June 30, 2019 as compared to an allowance for loan losses of $23.0 million, or 405.7 percent of non-accruing loans and 0.99 percent of gross loans, at March 31, 2019 and an allowance for loan losses of $20.6 million or 191.8  percent of non-accruing loans and 0.96 percent of gross loans, a year ago.

The Company recognized net recoveries of $30,000 during the second quarter of 2019. This compares to net charge-offs of $244,000 in the first quarter of 2019 and net charge offs of $243,000 in the second quarter a year ago. Year-to-date, the Company recognized $214,000 in net charge-offs compared to $137,000 in net charge-offs in the first six months of 2018.

About BCB Bancorp, Inc.

Established in 2000 and headquartered in Bayonne, N.J., BCB Community Bank is the wholly-owned subsidiary of BCB Bancorp, Inc. (NASDAQ: BCBP). The Bank has 30 branch offices in Bayonne, Carteret, Colonia, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lodi, Lyndhurst, Maplewood, Monroe Township, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, three branches in Hicksville and Staten Island, New York. The Bank provides business and individuals a wide range of loans, deposit products, and retail and commercial banking services. For more information, please go to www.bcb.bank.

Forward-Looking Statements

This release, like many written and oral communications presented by BCB Bancorp, Inc., and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “could,” “may,” “should,” “will,” “would,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.

In addition to factors previously disclosed in the Company’s reports filed with the U.S. Securities and Exchange Commission (the "SEC") and those identified elsewhere in this document, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: difficulties and delays in integrating the Indus-American Bank business or fully realizing cost savings and other benefits of the Merger; business disruption following the Merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of BCB products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and actions of governmental agencies and legislative and regulatory actions and reforms.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

The Company provides measurements and ratios based on tangible stockholders' equity and efficiency ratios. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

For a reconciliation of GAAP to Non-GAAP financial measures included in this press release, see "Reconciliation of GAAP to Non-GAAP Financial Measures" below.

CONTACT:	THOMAS COUGHLIN, PRESIDENT & CEO THOMAS KEATING, CFO (201) 823-0700

 

	Three Months Ended,
	June 30, 2019			March 31, 2019			June 30, 2018			June 30, 2019 vs. March 31, 2019		June 30, 2019 vs. June 30, 2018
Interest and dividend income:	(Dollars in thousands)
Loans, including fees	$	28,634		$	28,233		$	24,048		1.4	%	19.1	%
Mortgage-backed securities		738			770			837		-4.2	%	-11.8	%
Other investment securities		197			128			196		53.9	%	0.5	%
FHLB stock and other interest earning assets		1,173			1,347			615		-12.9	%	90.7	%
Total interest and dividend income		30,742			30,478			25,696		0.9	%	19.6	%
Interest expense:
Deposits:
Demand		1,750			1,576			975		11.0	%	79.5	%
Savings and club		110			113			105		-2.7	%	4.8	%
Certificates of deposit		6,097			5,990			3,405		1.8	%	79.1	%
		7,957			7,679			4,485		3.6	%	77.4	%
Borrowings		1,920			1,897			1,221		1.2	%	57.2	%
Total interest expense		9,877			9,576			5,706		3.1	%	73.1	%
Net interest income		20,865			20,902			19,990		-0.2	%	4.4	%
Provision for loan losses		755			889			2,060		-15.1	%	-63.3	%
Net interest income after provision for loan losses		20,110			20,013			17,930		0.5	%	12.2	%
Non-interest income:
Fees and service charges		802			883			971		-9.2	%	-17.4	%
Gain on sales of loans		437			318			576		37.4	%	-24.1	%
Gain on bulk sale of impaired loans held in portfolio		-			107			-		-100.0	%	-
Gain (loss) on sales of other real estate owned		45			8			(10	)	462.5	%	-550.0	%
Gain on sale of investment securities		21			-			-		-		-
Unrealized (loss) gain on equity investments		(26	)		291			(33	)	-108.9	%	-21.2	%
Other		49			53			59		-7.5	%	-16.9	%
Total non-interest income		1,328			1,660			1,563		-20.0	%	-15.0	%
Non-interest expense:
Salaries and employee benefits		6,918			6,915			7,125		-		-2.9	%
Occupancy and equipment		2,649			2,630			2,476		0.7	%	7.0	%
Data processing and service fees		731			721			828		1.4	%	-11.7	%
Professional fees		473			533			533		-11.3	%	-11.3	%
Director fees		316			318			201		-0.6	%	57.2	%
Regulatory assessments		417			457			290		-8.8	%	43.8	%
Advertising and promotional		123			73			100		68.5	%	23.0	%
Other real estate owned, net		124			(16	)		160		-		-22.5	%
Merger related costs		-			-			2,039		-		-100.0	%
Other		2,143			2,146			2,228		-0.1	%	-3.8	%
Total non-interest expense		13,894			13,777			15,980		0.8	%	-13.1	%
Income before income tax provision		7,544			7,896			3,513		-4.5	%	114.7	%
Income tax provision		2,317			2,445			1,200		-5.2	%	93.1	%
Net Income	$	5,227		$	5,451		$	2,313		-4.1	%	126.0	%
Preferred stock dividends		342			317			262		7.9	%	30.5	%
Net Income available to common stockholders	$	4,885		$	5,134		$	2,051		-4.9	%	138.2	%
Net Income per common share-basic and diluted
Basic	$	0.30		$	0.32		$	0.13		-6.3	%	130.8	%
Diluted	$	0.30		$	0.32		$	0.13		-6.3	%	130.8	%
Weighted average number of common shares outstanding
Basic		16,413			16,078			15,610		2.1	%	5.1	%
Diluted		16,471			16,111			15,748		2.2	%	4.6	%

 

	Six Months Ended,
	June 30, 2019		June 30, 2018			June 30, 2019 vs. June 30, 2018
Interest and dividend income:	(Dollars in thousands)
Loans, including fees	$	56,867	$	43,569		30.5	%
Mortgage-backed securities		1,508		1,536		-1.8	%
Other investment securities		325		300		8.3	%
FHLB stock and other interest earning assets		2,520		1,233		104.4	%
Total interest and dividend income		61,220		46,638		31.3	%
Interest expense:
Deposits:
Demand		3,326		1,772		87.7	%
Savings and club		223		202		10.4	%
Certificates of deposit		12,087		6,135		97.0	%
		15,636		8,109		92.8	%
Borrowings		3,817		2,099		81.8	%
Total interest expense		19,453		10,208		90.6	%
Net interest income		41,767		36,430		14.7	%
Provision for loan losses		1,644		3,402		-51.7	%
Net interest income after provision for loan losses		40,123		33,028		21.5	%
Non-interest income:
Fees and service charges		1,685		1,681		0.2	%
Gain on sales of loans		755		1,159		-34.9	%
Gain (loss) on bulk sale of impaired loans held in portfolio		107		(24	)	-
Gain (loss) on sales of other real estate owned		53		(10	)	-
Gain on sale of investment securities		21		-		-
Unrealized gain (loss) on equity investments		265		(160	)	-
Other		102		2,303		-95.6	%
Total non-interest income		2,988		4,949		-39.6	%
Non-interest expense:
Salaries and employee benefits		13,833		13,392		3.3	%
Occupancy and equipment		5,279		4,538		16.3	%
Data processing and service fees		1,452		1,557		-6.7	%
Professional fees		1,006		1,038		-3.1	%
Director fees		634		402		57.7	%
Regulatory assessments		874		529		65.2	%
Advertising and promotional		196		185		5.9	%
Other real estate owned, net		108		191		-43.5	%
Merger related costs		-		2,184		-100.0	%
Other		4,289		3,975		7.9	%
Total non-interest expense		27,671		27,991		-1.1	%
Income before income tax provision		15,440		9,986		54.6	%
Income tax provision		4,762		3,041		56.6	%
Net Income	$	10,678	$	6,945		53.8	%
Preferred stock dividends		659		428		54.0	%
Net Income available to common stockholders	$	10,019	$	6,517		53.7	%
Net Income per common share-basic and diluted
Basic	$	0.62	$	0.43		44.2	%
Diluted	$	0.62	$	0.42		47.6	%
Weighted average number of common shares outstanding
Basic		16,245		15,329		6.0	%
Diluted		16,290		15,465		5.3	%

 

	June 30, 2019			March 31, 2019			June 30, 2018			June 30, 2019 vs. March 31, 2019		June 30, 2019 vs. June 30, 2018
ASSETS	(Dollars in thousands)
Cash and amounts due from depository institutions	$	20,660		$	18,610		$	23,125		11.0	%	-10.7	%
Interest-earning deposits		206,982			174,938			157,320		18.3	%	31.6	%
Total cash and cash equivalents		227,642			193,548			180,445		17.6	%	26.2	%
Interest-earning time deposits		735			735			980		-		-25.0	%
Debt securities available for sale		116,258			117,942			127,291		-1.4	%	-8.7	%
Equity investments		5,901			7,963			8,134		-25.9	%	-27.5	%
Loans held for sale		-			1,347			1,405		-100.0	%	-100.0	%
Loans receivable, net of allowance for loan losses
of $23,789, $23,004, and $20,640, respectively		2,299,765			2,307,140			2,119,829		-0.3	%	8.5	%
Federal Home Loan Bank of New York stock, at cost		13,821			13,405			16,744		3.1	%	-17.5	%
Premises and equipment, net		19,482			19,684			21,055		-1.0	%	-7.5	%
Operating lease right-of-use asset		14,650			16,019			-		-8.5	%	-
Accrued interest receivable		9,315			9,750			7,563		-4.5	%	23.2	%
Other real estate owned		1,235			1,746			1,178		-29.3	%	4.8	%
Deferred income taxes		12,962			13,302			11,451		-2.6	%	13.2	%
Goodwill and other intangibles		5,587			5,584			5,691		0.1	%	-1.8	%
Other assets		10,777			10,235			14,798		5.3	%	-27.2	%
Total Assets	$	2,738,130		$	2,718,400		$	2,516,564		0.7	%	8.8	%
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Non-interest bearing deposits	$	278,602		$	273,370		$	229,292		1.9	%	21.5	%
Interest bearing deposits		1,929,620			1,915,263			1,755,584		0.7	%	9.9	%
Total deposits		2,208,222			2,188,633			1,984,876		0.9	%	11.3	%
FHLB advances		245,800			245,800			320,005		-		-23.2	%
Subordinated debentures		36,693			36,635			4,124		0.2	%	789.7	%
Operating lease liability		14,724			16,059			-		-8.3	%	-
Other liabilities		11,538			14,555			13,483		-20.7	%	-14.4	%
Total Liabilities		2,516,977			2,501,682			2,322,488		0.6	%	8.4	%
STOCKHOLDERS' EQUITY
Preferred stock: $0.01 par value, 10,000,000 shares authorized		-			-			-		-		-
Additional paid-in capital preferred stock		25,016			25,016			19,706		-		26.9	%
Common stock: no par value, 20,000,000 shares authorized		-			-			-		-		-
Additional paid-in capital common stock		176,767			176,379			175,716		0.2	%	0.6	%
Retained earnings		43,347			40,750			33,570		6.4	%	29.1	%
Accumulated other comprehensive (loss)		(1,929	)		(3,379	)		(5,800	)	-42.9	%	-66.7	%
Treasury stock, at cost		(22,048	)		(22,048	)		(29,116	)	-		-24.3	%
Total Stockholders' Equity		221,153			216,718			194,076		2.0	%	14.0	%
Total Liabilities and Stockholders' Equity	$	2,738,130		$	2,718,400		$	2,516,564		0.7	%	8.8	%
Outstanding common shares		16,461			16,398			15,783

		Three Months Ended June 30,
		2019									2018
		Average Balance			Interest Earned/Paid		Average Yield/Rate (3)				Average Balance			Interest Earned/Paid		Average Yield/Rate (3)
		(Dollars in thousands)
Interest-earning assets:
Loans Receivable	$	2,329,209		$	28,634		4.92	%		$	2,033,372		$	24,048		4.74	%
Investment Securities		124,520			935		3.00	%			146,760			1,033		2.82	%
Interest-earning deposits		184,266			1,173		2.55	%			96,853			615		2.55	%
Total Interest-earning assets		2,637,995			30,742		4.66	%			2,276,985			25,696		4.53	%
Non-interest-earning assets		78,478									46,060
Total assets	$	2,716,473								$	2,323,045
Interest-bearing liabilities:
Interest-bearing demand accounts	$	341,418		$	648		0.76	%		$	333,641		$	473		0.57	%
Money market accounts		253,633			1,102		1.74	%			186,650			502		1.07	%
Savings accounts		259,398			110		0.17	%			264,764			105		0.16	%
Certificates of Deposit		1,056,375			6,097		2.31	%			876,266			3,405		1.56	%
Total interest-bearing deposits		1,910,824			7,957		1.67	%			1,661,321			4,485		1.08	%
Borrowed funds		283,424			1,920		2.71	%			228,353			1,221		2.15	%
Total interest-bearing liabilities		2,194,248			9,877		1.80	%			1,889,674			5,706		1.21	%
Non-interest-bearing liabilities		304,680									244,544
Total liabilities		2,498,928									2,134,218
Stockholders' equity		217,545									188,827
Total liabilities and stockholders' equity	$	2,716,473								$	2,323,045
Net interest income				$	20,865								$	19,990
Net interest rate spread(1)							2.86	%								3.32	%
Net interest margin(2)							3.16	%								3.52	%

(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.(2) Net interest margin represents net interest income divided by average total interest-earning assets.(3) Annualized.

		Six Months Ended June 30,
		2019									2018
		Average Balance			Interest Earned/Paid		Average Yield/Rate (3)				Average Balance			Interest Earned/Paid		Average Yield/Rate (3)
		(Dollars in thousands)
Interest-earning assets:
Loans Receivable	$	2,322,674		$	56,867		4.90	%		$	1,876,349		$	43,569		4.68	%
Investment Securities		125,139			1,833		2.93	%			138,133			1,836		2.68	%
Interest-earning deposits		185,368			2,520		2.72	%			109,937			1,233		2.26	%
Total Interest-earning assets		2,633,181			61,220		4.65	%			2,124,419			46,638		4.43	%
Non-interest-earning assets		70,550									44,647
Total assets	$	2,703,731								$	2,169,066
Interest-bearing liabilities:
Interest-bearing demand accounts	$	341,538		$	1,252		0.73	%		$	323,843		$	903		0.56	%
Money market accounts		245,368			2,074		1.69	%			172,074			869		1.02	%
Savings accounts		259,958			223		0.17	%			261,792			202		0.16	%
Certificates of Deposit		1,070,757			12,087		2.26	%			798,672			6,135		1.55	%
Total interest-bearing deposits		1,917,621			15,636		1.63	%			1,556,381			8,109		1.05	%
Borrowed funds		283,442			3,817		2.69	%			205,311			2,099		2.06	%
Total interest-bearing liabilities		2,201,063			19,453		1.77	%			1,761,692			10,208		1.17	%
Non-interest-bearing liabilities		290,511									224,561
Total liabilities		2,491,574									1,986,253
Stockholders' equity		212,157									182,813
Total liabilities and stockholders' equity	$	2,703,731								$	2,169,066
Net interest income				$	41,767								$	36,430
Net interest rate spread(1)							2.88	%								3.26	%
Net interest margin(2)							3.17	%								3.46	%

(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.(2) Net interest margin represents net interest income divided by average total interest-earning assets.(3) Annualized.

	Financial condition data by quarter
	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018			Q1 2018
	(In thousands, except tangible book value)
Total assets	$	2,738,130		$	2,718,400		$	2,674,731		$	2,637,868		$	2,516,564		$	2,082,313
Cash and cash equivalents		227,642			193,548			195,264			206,710			180,445			137,334
Securities		122,159			125,905			127,007			127,863			135,425			127,324
Loans receivable, net		2,299,765			2,307,140			2,278,492			2,225,001			2,119,829			1,764,597
Deposits		2,208,222			2,188,633			2,180,724			2,116,624			1,984,876			1,691,353
Borrowings		282,493			282,435			282,377			312,319			324,124			204,124
Stockholders’ equity		221,153			216,718			200,215			195,763			194,076			177,386
Tangible Book Value		11.58			11.35			11.00			10.78			10.69			10.90
	Operating data by quarter
	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018			Q1 2018
	(In thousands, except for per share amounts)
Net interest income	$	20,865		$	20,902		$	21,171		$	20,080		$	19,990		$	16,440
Provision for loan losses		755			889			821			907			2,060			1,342
Non-interest income		1,328			1,660			1,159			1,852			1,563			3,386
Non-interest expense		13,894			13,777			13,884			14,391			15,980			12,011
Income tax expense		2,317			2,445			2,401			2,040			1,200			1,841
Net income	$	5,227		$	5,451		$	5,224		$	4,594		$	2,313		$	4,632
Net income per diluted share	$	0.30		$	0.32		$	0.31		$	0.27		$	0.13		$	0.29
Common Dividends declared per share	$	0.14		$	0.14		$	0.14		$	0.14		$	0.14		$	0.14
	Financial Ratios
	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018			Q1 2018
Return on average assets		0.77	%		0.81	%		0.78	%		0.72	%		0.40	%		0.92	%
Return on average stockholder’s equity		9.61	%		10.55	%		10.66	%		9.44	%		4.90	%		10.48	%
Net interest margin		3.16	%		3.18	%		3.24	%		3.22	%		3.52	%		3.34	%
Stockholder’s equity to total assets		8.08	%		7.97	%		7.49	%		7.42	%		7.71	%		8.52	%
Efficiency Ratio		62.61	%		61.06	%		62.18	%		65.62	%		74.14	%		60.58	%
	Asset Quality Ratios
	(In thousands, except for ratio %)
	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018			Q1 2018
Non-Accrual Loans	$	5,488		$	5,670		$	7,221		$	11,093		$	10,763		$	10,619
Non-Accrual Loans as a % of Total Loans		0.24	%		0.24	%		0.31	%		0.49	%		0.50	%		0.60	%
ALLL as % of Non-Accrual Loans		433.47	%		405.71	%		309.64	%		193.85	%		191.79	%		172.68	%
Impaired Loans		37,275			40,533			42,408			47,251			50,899			36,199
Classified Loans		22,679			23,977			26,161			30,179			33,605			20,299

 

	Recorded Investment in Loans Receivable by quarter
	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018			Q1 2018
	(In Thousands)
Residential one-to-four family	$	258,688		$	258,184		$	258,085		$	254,149		$	249,996		$	238,275
Commercial and multi-family		1,702,132			1,724,326			1,697,837			1,701,105			1,622,881			1,362,684
Construction		134,963			114,462			107,783			75,601			56,067			48,433
Commercial business		164,569			167,067			165,193			142,312			137,767			81,054
Home equity		63,927			66,946			72,895			73,714			74,507			53,053
Consumer		727			731			809			1,368			898			1,127
	$	2,325,006		$	2,331,716		$	2,302,602		$	2,248,249		$	2,142,116		$	1,784,626
Less:
Deferred loan fees, net		(1,452	)		(1,572	)		(1,751	)		(1,744	)		(1,647	)		(1,692	)
Allowance for loan loss		(23,789	)		(23,004	)		(22,359	)		(21,504	)		(20,640	)		(18,337	)
Total loans, net	$	2,299,765		$	2,307,140		$	2,278,492		$	2,225,001		$	2,119,829		$	1,764,597
	Non-Accruing Loans in Portfolio by quarter
	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018			Q1 2018
	(In Thousands)
Originated loans:
Residential one-to-four family	$	1,022		$	1,415		$	1,160		$	1,457		$	1,480		$	1,432
Commercial and multi-family		1,881			1,364			2,568			5,572			5,578			5,652
Commercial business		745			256			356			251			163			176
Home equity		129			272			277			338			397			356
Consumer		-			-			-			-			42			-
Sub-total:	$	3,777		$	3,307		$	4,361		$	7,618		$	7,660		$	7,616
Acquired loans initially recorded at fair value:
Residential one-to-four family	$	1,116		$	1,704		$	2,165		$	2,590		$	2,474		$	2,374
Commercial and multi-family		-			597			605			590			590			590
Commercial business		378			-			48			295			-			-
Home equity		217			62			42			-			39			39
Sub-total:	$	1,711		$	2,363		$	2,860		$	3,475		$	3,103		$	3,003
Total:	$	5,488		$	5,670		$	7,221		$	11,093		$	10,763		$	10,619

 

	Reconciliation of GAAP to Non-GAAP Financial Measures by quarter
	Tangible Book Value per Share
	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018			Q1 2018
	(Dollars in thousnds, except per share amounts)
Total Stockholders' Equity	$	221,153		$	216,718		$	200,215		$	195,763		$	194,076		$	177,386
Less: goodwill		5,587			5,584			5,699			5,714			5,691			-
Less: preferred stock		25,016			25,016			19,706			19,706			19,706			13,241
Total tangible stockholders' equity		190,550			186,118			174,810			170,343			168,679			164,145
Shares outstanding		16,461			16,398			15,889			15,799			15,783			15,055
Book value per share	$	13.43		$	13.22		$	12.60		$	12.39		$	12.30		$	11.78
Tangible book value per share	$	11.58		$	11.35		$	11.00		$	10.78		$	10.69		$	10.90
	Efficiency Ratio
	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018			Q1 2018
	(Dollars in thousands)
Net interest income	$	20,865		$	20,902		$	21,171		$	20,080		$	19,990		$	16,440
Non-interest income		1,328			1,660			1,159			1,852			1,563			3,386
Total income		22,193			22,562			22,330			21,932			21,553			19,826
Non-interest expense		13,894			13,777			13,884			14,391			15,980			12,011
Efficiency Ratio		62.61	%		61.06	%		62.18	%		65.62	%		74.14	%		60.58	%