Prudential Bancorp, Inc. (the “Company”) (Nasdaq:PBIP), the holding
company for Prudential Bank (the “Bank”), reported net income of
$3.6 million, or $0.44 per basic and diluted share, for the quarter
ended June 30, 2020 as compared to $2.6 million, or $0.30 per basic
share and $0.29 per diluted share, for the same quarter in fiscal
2019. For the nine months ended June 30, 2020, the Company
reported net income of $9.0 million, or $1.04 per basic share and
$1.03 per diluted share as compared to $6.9 million, or $0.79 per
basic and $0.78 per diluted share, for the same period in fiscal
2019.
Dennis Pollack, President and CEO, commented,
“We are pleased to be able to report record quarterly earnings,
despite the economic challenges created by the ongoing COVID-19
pandemic. To help the most vulnerable among us, we have
continued to make contributions to various food banks in the areas
we serve. In addition, to assist our customers through
these unprecedented times, we have waived overdraft fees,
accommodated certain requests for loan payment extensions and
participated in the SBA’s Paycheck Protection Program enacted as
part of the CARES Act stimulus legislation. We are
working closely with both residential and commercial borrowers to
help them meet the unexpected financial challenges stemming from
the COVID-19 pandemic and will continue to do so. However, in light
of the economic challenges facing our customers, we substantially
increased our provision for loan losses.” Mr. Pollack
continued, “Our continued strong capital and liquidity enable us to
help our customers at this time when they most need our assistance.
We are continuing to closely monitor the rapidly challenging
environment surrounding the COVID-19 pandemic but remain confident
in our long-term strength and stability and our ability to weather
the storm of this crisis. I also want to thank our dedicated staff
who went the extra mile to help our customers and community during
these challenging times, including the numerous hours our staff
spent processing Paycheck Protection Program loan applications in
order to help many small businesses.”
Highlights for the Three and Nine Months Ended
June 30, 2020
- Record levels of net income for
both the three and nine months ended June, 30, 2020.
- Dividends for the nine months ended
June 30, 2020 amounted to $0.64 per share as compared to $0.60 per
share for the comparable period in fiscal 2019.
- Our efficiency ratio improved
significantly during the three and nine months ended June 30, 2020,
improving to 44.1% and 50.5% for the three and nine months ended
June 30, 2020 as compared to 56.6% and 59.7% for the same period in
fiscal 2019.
- The Company repurchased 786,866
shares at an average cost of $12.81, well below the Company’s book
value per share.
- The Company’s tangible book value
per share (non-GAAP) was $14.95 per share at June 30, 2020 as
compared to $14.42 at June 30, 2019.
- The Company announced a new stock
repurchase program to repurchase up to 5% of its outstanding shares
of common stock over a one-year period or such longer period of
time as may be necessary to complete such repurchases.
- The Company originated 63 Paycheck
Protection Program loans totaling approximately $5.1 million.
- Based on management’s evaluation
and taking into account the estimated effects of the COVID-19
pandemic, provisions for loan losses totaling $750,000 and $1.4
million for the three and nine months ended June 30, 2020 were
established.
- The allowance for loan losses
increased to $6.7 million or 1.1% of total loans as of June 30,
2020 as compared to $5.4 million or 0.9% of total loans as of
September 30, 2019
Net Interest Income:
For the three months ended June 30, 2020, net
interest income decreased to $5.3 million as compared to $6.2
million for the same period in fiscal 2019. The decrease reflected
the effects of a $1.4 million, or 13.1%, decrease in interest
income partially offset by a decrease of $572,000, or 11.3%, in
interest paid on deposits and borrowings. Net interest income
continued to reflect the effects of margin compression. The
weighted average yield on interest-earning assets decreased by 66
basis points, to 3.38% for the quarter ended June 30, 2020 from the
comparable period in 2019 due to the decline in market yields of
interest, in particular as a result of the Federal Reserve’s Open
Market Committee’s action to reduce the Federal Funds Rate.
The weighted average rate paid on interest-bearing liabilities
decreased from 1.98% to 1.73% as we continued our efforts to reduce
the Company’s use of brokered deposits which are generally a more
expensive finding source.
With the recent unexpected significant decline
in the Wall Street Journal Prime Rate (“WSJ Prime”), a significant
portion of the Company’s commercial real estate and construction
loan portfolio experienced downward adjustments in the interest
rates borne by such loans.
For the nine months ended June 30, 2020, net
interest income was $17.4 million as compared to $18.6 million for
the same period in fiscal 2019. The decrease primarily was due to
an increase of $1.3 million, or 10.0%, in interest paid on deposits
and borrowings. Partially offsetting the increase in interest
expense was an increase in interest income of $219,000, or
0.7%. The weighted average yield on interest-earning assets
decreased by 30 basis points, to 3.59%, for the nine months ended
June 30, 2020 from the comparable period in 2019 due to a reduction
in market yields of interest which created downward pressure on our
yields on all interest-earning asset categories. The increase
in interest expense was due to a $94.5 million increase in the
average balance of interest-bearing liabilities to fund growth
during the period. The weighted average cost of borrowings
and deposits remained unchanged at 1.88% for both the nine month
periods ended June 30, 2020 and 2019.
For the three and nine months ended June 30,
2020, the net interest margin was 1.83% and 1.92%, respectively,
compared to 2.23% and 2.26% for the same periods in fiscal 2019,
respectively. The margin compression experienced in the 2020
periods in large part reflected the more rapid decline in asset
yields as compared to declines in liability costs as a result of
the declining interest rate environment. As part of the Company’s
strategic lending initiatives, the Company has increased its
involvement in commercial real estate and construction lending. The
yields on such loans are typically tied to the WSJ Prime and adjust
rapidly with changes in the WSJ Prime. As a result of the
implementation of the Company’s strategic lending initiatives, its
interest-earning assets are more rate sensitive than its
interest-bearing liabilities and as a result, adjust more rapidly
to changes in interest rates than its interest-bearing
liabilities.
Non-Interest Income:
Non-interest income amounted to $3.8 million and
$7.3 million for the three and nine month periods ended June 30,
2020, respectively, compared to $1.2 million and $2.1 million,
respectively, for the comparable periods in fiscal 2019. The
increase experienced in both of the 2020 periods was primarily
attributable to the gain on sale of $60.1 million and $139.3
million of investment securities during the three and nine months
ended June 30, 2020, respectively, resulting in gains of $3.3
million and $6.0 million for the three and nine month periods ended
June 30, 2020, respectively. These increases were offset by
decreases in swap income in the 2020 periods as compared to
2019. The investment sales were consummated in order to
recognize gains in the portfolio in order to take advantage of the
historically low interest rate environment which has resulted in
significant appreciation in the fair value of such investments.
Non-Interest Expenses:
For the three month period ended June 30, 2020,
non-interest expense decreased $194,000 or 4.6%, compared to the
same period in the prior fiscal year. The largest component of the
decrease in the three months ended June 30, 2020 was attributable
to a decrease in deposit insurance as a result of decreased
exposure to brokered deposits. For the nine month period
ended June 30, 2020, non-interest expense increased $149,000, or
1.2%, compared to the same period in the prior fiscal year. The
increase was due in part to the hiring of additional personnel in
our lending operations to support our expanded lending
activities. Partially offsetting this increase for the nine
month period ended June 30, 2020 was a decrease in occupancy and
advertising expense as the Company maintained its focus on the
continued implementation of operating efficiencies. The continued
improvement of the Company’s efficiency ratio reflects the success
of management’s efforts. The efficiency ratio for the nine
months ended June 30, 2020 improved to 50.5% from 59.7% for the
same period in fiscal 2019. Likewise, for the three months ended
June 30, 2020, the efficiency ratio improved to 44.1% as compared
to 56.6% for the same period in 2019.
Income Taxes:
For the three month and nine-month periods ended
June 30, 2020, the Company recorded tax expense of $701,000 and
$1.8 million, respectively, compared to $582,000 and $1.4 million
for the same periods in fiscal 2019. The increase in the
three and nine month periods was commensurate with the increase in
pre-tax income.
Balance Sheet:
The Company had total assets of $1.2 billion at
June 30, 2020 compared to $1.3 billion at September 30, 2019.
At June 30, 2020, the investment portfolio decreased by $114.4
million to $467.1 million as compared to $581.5 million at
September 30, 2019 primarily as a result of investment securities
sales, calls and paydowns of amortizing mortgage-backed securities.
Net loans receivable decreased slightly by $1.1 million to
$584.4 million at June 30, 2020 from $585.5 million at September
30, 2019 both due to the continued intense competition for quality
loans as well as to the sale of a $14.0 million package of
long-term, fixed-rate mortgage loans undertaken to address the
Company’s interest-rate margin compression.
Total liabilities were $1.1 billion at both June
30, 2020 and September 30, 2019, although deposits and FHLB
borrowings decreased modestly as the Company has been allowing
higher costing certificates of deposit and FHLB borrowings to
run-off as they mature in order to reduce its cost of
funds.
Total stockholders’ equity decreased by $11.4
million to $128.2 million at June 30, 2020 from $139.6 million at
September 30, 2019. The decrease was primarily due to treasury
stock purchases, net of stock plan activity of $9.3 million.
For the nine months ended June 30, 2020, the Company repurchased
786,866 shares at an average cost of $12.81, which is well below
book value per share. Also contributing to the decrease were
dividend payments totaling $5.6 million and an aggregate $5.2
million decrease in the fair market value of interest rate swaps
and available for sale securities. The decrease in the fair
value of the interest rate swaps was due to the large decrease in
market rates of interest during the second and third quarters of
fiscal 2020. These decreases were partially offset by net
income of $9.0 million for the nine months ended June 30, 2020.
Asset Quality:
At June 30, 2020, the Company’s non-performing
assets totaled $14.1 million or 1.2% of total assets as compared to
$14.3 million or 1.1% of total assets at September 30, 2019.
Non-performing assets at June 30, 2020 included five construction
loans aggregating $8.7 million, 28 one-to-four family residential
loans aggregating $3.5 million, four commercial real estate loans
aggregating $1.4 million and one consumer loan aggregating $49,000.
Non-performing assets at June 30, 2020 also included real estate
owned consisting of two single-family residential properties with
an aggregate carrying value of $406,000. At June 30, 2020, the
Company had four loans totaling $5.3 million that were classified
as troubled debt restructurings (“TDRs”). One TDR is on non-accrual
and consists of a $420,000 loan secured by a single-family
residential property and is performing in accordance with the
restructured terms. The three remaining TDRs totaling $4.9 million
are also classified as non-accrual and are part of a lending
relationship totaling $10.5 million (after taking into account the
previously disclosed $1.9 million write-down recognized during the
quarter ending March 31, 2017 related to this borrowing
relationship). The primary project of the borrower (the development
of a 169-unit townhouse project in Bristol Borough, Pennsylvania)
is the subject of litigation between the Bank and the borrower. As
previously disclosed, subsequent to the commencement of the
litigation, the borrower filed for bankruptcy under Chapter 11
(Reorganization) of the federal bankruptcy code in June 2017. The
Bank has moved the underlying litigation noted above with the
borrower and the Bank from state court to the federal bankruptcy
court in which the bankruptcy proceeding is being heard. The state
litigation is stayed pending the resolution of the bankruptcy
proceedings. Four units have been sold in the project and a portion
of the proceeds have been applied against the outstanding
debt. Due to the COVID-19 pandemic and the
shelter-in-place order in place much of the third quarter of fiscal
2020, sales activities at the project were substantially curtailed.
In addition, there are agreements of sale in place for four
additional units.
The Company recorded provisions for loan losses
of $750,000 and $1.4 million, respectively, for the three and nine
months ended June 30, 2020, compared to no provisions for loan
losses for the same periods in fiscal 2019, primarily as a
precaution due to the continued uncertainty associated with the
economic effects of COVID-19 and the potential credit deterioration
caused thereby. Although minimal delinquencies have occurred as of
June 30, 2020 due to the effects of the COVID-19 pandemic,
deferments were granted during the three months ended June 30, 2020
with respect to commercial real estate and residential real estate
loans aggregating $149.7 million. These deferments were not
considered to be TDRs as of June 30, 2020 as all applicable
borrowers were current as of December 31, 2019 and the request for
the deferments were related to the current economic conditions
caused by COVID-19, and not by underlying weaknesses within the
respective loans. Notwithstanding the foregoing, the Company
believes there is a material risk that credit losses and
non-performing assets may increase due to current economic
conditions. During the three and nine months ending June 30, 2020,
the Company recorded one charge off of $22,000 and four charge offs
aggregating $95,000, respectively. During the three and nine months
ended June 30, 2020, the Company recorded recoveries aggregating
$1,000 and $18,000, respectively. During the three and nine
months ended June 30, 2019, the Company recorded no charge offs and
one recovery in the amount of $58,000.
The allowance for loan losses totaled $6.7
million, or 1.1% of total loans and 49.0% of total non-performing
loans at June 30, 2020 as compared to $5.4 million, or 0.9% of
total loans and 38.7% of total non-performing loans at September
30, 2019. The Company believes that the allowance for loan losses
at June 30, 2020 was sufficient to cover all inherent and known
losses associated with the loan portfolio at such date.
COVID-19 Related
Information
As noted above, in response to the current
situation surrounding the COVID-19 pandemic, the Company is
providing assistance to its customers in a variety of ways.
The Company participated in the Paycheck Protection Program
offered under the CARES Act as a Small Business Administration
(“SBA”) lender. As of June 30, 2020, we had originated
63 requests for PPP loans totaling approximately
$5.1 million. A total of 56 of these loans, or more
than 88 %, are for loan amounts less than $150,000 and
represent a total of $1.9 million. We are working closely with
our loan customers to effectively manage our portfolio through the
ongoing uncertainty surrounding the duration, impact and government
response to the crisis.
The primary method of relief is to allow the
borrower to defer their loan payments for three months (and
extending the term of the loan accordingly). The CARES Act and
regulatory guidelines suspend temporarily the determination of
certain loan modifications related to the COVID‑19 pandemic from
being treated as TDRs. See “Asset Quality” above.
While the Company’s banking operations were not
restricted by the government stay-at-home orders, The Company took
steps to protect its employees and customers by providing for
remote working for many employees, enhancing cleaning procedures
for the Company’s offices, in particular its branch offices,
requiring face masks to be worn by employees and maintaining
appropriate social distancing in our offices.
About Prudential Bancorp, Inc.:
Prudential Bancorp, Inc. is the holding company
for Prudential Bank. Prudential Bank is a Pennsylvania-chartered,
FDIC-insured savings bank that was originally organized in 1886.
The Bank conducts business from its headquarters and main office in
Philadelphia, Pennsylvania as well as nine additional full-service
financial centers, seven of which are in Philadelphia, one in
Drexel Hill, Delaware County, and one in Huntingdon Valley,
Montgomery County, Pennsylvania.
Forward-Looking Statements:
This press release contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements include, but are not limited
to, expectations or predictions of future financial or business
performance, conditions relating to the Company. These
forward-looking statements include statements with respect to the
Company’s beliefs, plans, objectives, goals, expectations,
anticipations, estimates and intentions, that are subject to
significant risks and uncertainties, and are subject to change
based on various factors (some of which are beyond the Company’s
control). The words “may,” “could,” “should,” “would,” “will,”
“believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” and
similar expressions are intended to identify forward-looking
statements.
In addition to factors previously disclosed in
the reports filed by the Company with the Securities and Exchange
Commission (“SEC”) and those identified elsewhere in this press
release, the following factors, among others, could cause actual
results to differ materially from forward-looking statements or
historical performance: the strength of the United States economy
in general and the strength of the local economies in which the
Company conducts its operations; general economic conditions; the
scope and duration of the COVID-19 pandemic; the effects of the
COVID-19 pandemic, including on the Company’s credit quality and
operations as well as its impact on general economic conditions;
legislative and regulatory changes including actions taken by
governmental authorities in response to the COVID-19 pandemic;
monetary and fiscal policies of the federal government; changes in
tax policies, rates and regulations of federal, state and local tax
authorities including the effects of the Tax Reform Act; changes in
interest rates, deposit flows, the cost of funds, demand for loan
products and the demand for financial services, in each case as may
be affected by the COVID-19 pandemic, competition, changes in the
quality or composition of the Company’s loan, investment and
mortgage-backed securities portfolios; geographic concentration of
the Company’s business; fluctuations in real estate values; the
adequacy of loan loss reserves; the risk that goodwill and
intangibles recorded in the Company’s financial statements will
become impaired; changes in accounting principles, policies or
guidelines and other economic, competitive, governmental and
technological factors affecting the Company’s operations, markets,
products, services and fees.
The Company does not undertake 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 to reflect
events or circumstances occurring after the date of this press
release.
For a complete discussion of the assumptions,
risks and uncertainties related to our business, you are encouraged
to review the Company’s filings with the SEC, including the “Risk
Factors” section in its most recent Annual Report on Form 10-K for
the year ended September 30, 2019, as supplemented by its Form 10-Q
for the quarter ended March 31, 2020 and as may be further
supplemented by quarterly or other reports subsequently filed with
the SEC.
|
SELECTED CONSOLIDATED FINANCIAL AND OTHER
DATA |
|
|
(Unaudited) |
|
|
At June 30, |
|
At September
30, |
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
(Dollars in Thousands) |
|
Selected Consolidated
Financial and Other Data (Unaudited): |
|
|
|
Total assets |
|
$1,187,812 |
|
|
$1,289,434 |
|
Cash and cash equivalents |
|
60,020 |
|
|
47,968 |
|
Investment and mortgage-backed
securities: |
|
|
|
Held-to-maturity |
|
25,652 |
|
|
68,635 |
|
Available-for-sale |
|
441,461 |
|
|
512,822 |
|
Loans receivable, net |
|
584,361 |
|
|
585,456 |
|
Goodwill and intangible
assets |
|
6,468 |
|
|
6,550 |
|
Deposits |
|
727,149 |
|
|
745,444 |
|
FHLB advances |
|
291,069 |
|
|
376,904 |
|
Non-performing loans |
|
13,644 |
|
|
13,936 |
|
Non-performing assets |
|
14,050 |
|
|
14,284 |
|
Stockholders’ equity |
|
128,239 |
|
|
139,611 |
|
Full-service offices |
|
10 |
|
|
10 |
|
|
At or For the Three Months Ended June 30, |
|
At or For theNine Months EndedJune 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands Except Per Share Amounts) |
Selected Operating
Data: |
|
|
|
|
Total interest income |
$9,791 |
|
|
$11,273 |
|
|
$32,628 |
|
|
$32,409 |
|
Total interest expense |
|
4,486 |
|
|
|
5,058 |
|
|
|
15,192 |
|
|
|
13,855 |
|
Net interest income |
|
5,305 |
|
|
|
6,215 |
|
|
|
17,436 |
|
|
|
18,554 |
|
Provision for loan losses |
|
750 |
|
|
|
- |
|
|
|
1,375 |
|
|
|
- |
|
Net interest income after
provision for loan losses |
|
4,555 |
|
|
|
6,215 |
|
|
|
16,061 |
|
|
|
18,554 |
|
Total non-interest income |
|
3,762 |
|
|
|
1,187 |
|
|
|
7,262 |
|
|
|
2,109 |
|
Total non-interest expense |
|
3,996 |
|
|
|
4,190 |
|
|
|
12,477 |
|
|
|
12,328 |
|
Income before income taxes |
|
4,321 |
|
|
|
3,212 |
|
|
|
10,846 |
|
|
|
8,335 |
|
Income tax expense |
|
701 |
|
|
|
582 |
|
|
|
1,839 |
|
|
|
1,391 |
|
Net income |
$3,620 |
|
|
$2,630 |
|
|
$ 9,007 |
|
|
$6,944 |
|
Basic earnings per share |
$0.44 |
|
|
$0.30 |
|
|
$1.04 |
|
|
$0.79 |
|
Diluted earnings per share |
$0.44 |
|
|
$0.29 |
|
|
$1.03 |
|
|
$0.78 |
|
Dividends paid per common
share |
$0.07 |
|
|
$0.50 |
|
|
$0.64 |
|
|
$0.60 |
|
Tangible book value per share at
end of period (1) |
$14.95 |
|
|
$14.42 |
|
|
$14.95 |
|
|
$14.42 |
|
Common stock outstanding
(shares) |
|
8,147,005 |
|
|
|
8,888,847 |
|
|
|
8,147,005 |
|
|
|
8,888,847 |
|
|
|
|
|
|
Selected Operating Ratios
(2): |
|
|
|
|
Average yield on interest-earning
assets |
|
3.38 |
% |
|
|
4.04 |
% |
|
|
3.59 |
% |
|
|
3.89 |
% |
Average rate paid on
interest-bearing liabilities |
|
1.73 |
% |
|
|
1.98 |
% |
|
|
1.88 |
% |
|
|
1.88 |
% |
Average interest rate spread
(3) |
|
1.65 |
% |
|
|
2.05 |
% |
|
|
1.72 |
% |
|
|
2.06 |
% |
Net interest margin (3) |
|
1.83 |
% |
|
|
2.23 |
% |
|
|
1.92 |
% |
|
|
2.26 |
% |
Average interest-earning
assets to average interest-bearing liabilities |
|
111.55 |
% |
|
|
109.59 |
% |
|
|
112.10 |
% |
|
|
111.69 |
% |
Net interest income
after provision for loan losses to non-interest expense |
|
113.99 |
% |
|
|
148.33 |
% |
|
|
128.72 |
% |
|
|
150.50 |
% |
Total non-interest expense to
total average assets |
|
1.31 |
% |
|
|
1.40 |
% |
|
|
1.31 |
% |
|
|
1.43 |
% |
Efficiency ratio (4) |
|
44.07 |
% |
|
|
56.61 |
% |
|
|
50.52 |
% |
|
|
59.66 |
% |
Return on average assets |
|
1.19 |
% |
|
|
0.88 |
% |
|
|
0.85 |
% |
|
|
0.80 |
% |
Return on average equity |
|
8.28 |
% |
|
|
7.52 |
% |
|
|
8.46 |
% |
|
|
6.92 |
% |
Average equity to average total
assets |
|
11.36 |
% |
|
|
11.72 |
% |
|
|
11.17 |
% |
|
|
11.62 |
% |
|
At or for the Three Months Ended June 30, |
|
At or for Nine Months Ended June 30, |
|
2020 |
2019 |
|
2020 |
2019 |
Asset Quality Ratios
(5) |
|
|
|
|
Non-performing loans as a percentage of loans receivable, net
(6) |
2.33 |
% |
2.26 |
% |
|
2.33 |
% |
2.26 |
% |
Non-performing assets as a
percentage of total assets (6) |
1.18 |
% |
1.15 |
% |
|
1.18 |
% |
1.15 |
% |
Allowance for loan losses as a
percentage of total loans |
1.13 |
% |
0.90 |
% |
|
1.13 |
% |
0.90 |
% |
Allowance for loan losses as a
percentage of non-performing loans |
49.03 |
% |
40.29 |
% |
|
49.03 |
% |
40.29 |
% |
Net charge-offs (recoveries) to
average loans receivable |
0.05 |
% |
(0.07 |
)% |
|
0.05 |
% |
(0.04 |
)% |
|
|
|
|
|
Capital Ratios
(7) |
|
|
|
|
Tier 1 leverage ratio |
|
|
|
|
Company |
10.33 |
% |
10.90 |
% |
|
10.33 |
% |
10.90 |
% |
Bank |
10.29 |
% |
10.73 |
% |
|
10.29 |
% |
10.73 |
% |
Tier 1 common risk-based capital
ratio |
|
|
|
|
Company |
17.31 |
% |
18.85 |
% |
|
17.31 |
% |
18.85 |
% |
Bank |
17.00 |
% |
18.57 |
% |
|
17.00 |
% |
18.57 |
% |
Tier 1 risk-based capital
ratio |
|
|
|
|
Company |
17.31 |
% |
18.85 |
% |
|
17.31 |
% |
18.85 |
% |
Bank |
17.00 |
% |
18.57 |
% |
|
17.00 |
% |
18.57 |
% |
Total risk-based capital
ratio |
|
|
|
|
Company |
18.31 |
% |
19.71 |
% |
|
18.31 |
% |
19.71 |
% |
Bank |
17.99 |
% |
19.43 |
% |
|
17.99 |
% |
19.43 |
% |
|
|
|
|
|
|
(1) |
Non-GAAP measure: see reconciliation below. |
|
(2) |
With the exception of end of period ratios, all ratios are based on
average monthly balances during the indicated periods and are
annualized where appropriate. |
|
(3) |
Average interest rate spread represents the difference between the
average yield earned on interest-earning assets and the average
rate paid on interest-bearing liabilities. Net interest margin
represents net interest income as a percentage of average
interest-earning assets. |
|
(4) |
The efficiency ratio represents the ratio of non-interest expense
divided by the sum of net interest income and non-interest
income. |
|
(5) |
Asset quality ratios and capital ratios are end of period
ratios, except for net charge-offs to average loans
receivable. |
|
(6) |
Non-performing assets generally consist of all loans on
non-accrual, loans which are 90 days or more past due as to
principal or interest, and real estate acquired through foreclosure
or acceptance of a deed-in-lieu of foreclosure. Non-performing
assets and non-performing loans also include loans classified as
troubled debt restructurings (“TDR”) due to being recently
restructured. TDRs are initially placed on non-accrual in
connection with such restructuring and remain on non-accrual until
such time that an adequate sustained payment period under the
restructured terms has been established to justify returning the
loan to accrual status. It is the Company’s policy to cease
accruing interest on all loans which are 90 days or more past due
as to interest or principal. |
|
(7) |
The Company is not subject to the regulatory capital ratios
imposed by Basel III on bank holding companies because the Company
is deemed to be a small bank holding company. |
|
|
|
Non-GAAP Measures Disclosure Reported amounts
are presented in accordance with accounting principles generally
accepted in the United States of America (“GAAP”). The Company’s
management believes that the supplemental non-GAAP information
provided in this press release is utilized by market analysts and
others to evaluate a company's financial condition and, therefore,
such information is useful to investors. This disclosure should not
be viewed as a substitute for financial results determined in
accordance with GAAP, nor are they necessarily comparable to
non-GAAP performance measures presented by other companies.
The following table shows the reconciliation of
the Company’s book value and tangible book value (a non-GAAP
measure which excludes goodwill and the core deposit intangible
resulting from the Polonia Bancorp, Inc. acquisition as of January
1, 2017 from total stockholders’ equity as calculated in accordance
with GAAP).
|
|
As of June 30, 2020 |
|
As of September 30, 2019 |
(In Thousands, Except Per Share Amounts) |
|
|
|
|
|
|
|
|
Book Value |
Tangible Book Value |
|
Book Value |
Tangible Book Value |
Total stockholders’ equity |
|
$ |
128,239 |
$ |
128,239 |
|
$ |
139,611 |
$ |
139,611 |
Less intangible assets: |
|
|
|
|
|
|
Goodwill |
|
|
-- |
|
6,102 |
|
|
-- |
|
6,102 |
Core deposit intangible |
|
|
-- |
|
366 |
|
|
-- |
|
448 |
Total intangibles |
|
$ |
-- |
$ |
6,468 |
|
$ |
-- |
$ |
6,550 |
Adjusted stockholders’ equity |
|
$ |
128,239 |
$ |
121,771 |
|
$ |
139,611 |
$ |
133,061 |
Shares of common stock outstanding |
|
|
8,147,005 |
|
8,147,005 |
|
|
8,889,447 |
|
8,889,447 |
Adjusted book value per share |
|
$ |
15.74 |
$ |
14.95 |
|
$ |
15.71 |
$ |
14.97 |
Contact: Jack E. RothkopfChief
Financial Officer (215) 755-1500
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