8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2020

KEARNY FINANCIAL CORP.

(Exact name of Registrant as Specified in Its Charter)

Maryland	001-37399	30-0870244
(State or Other Jurisdiction<br><br><br>of Incorporation)	(Commission File Number)	(IRS Employer<br><br><br>Identification No.)
120 Passaic Avenue, Fairfield, New Jersey		07004
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (973) 244-4500

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	KRNY	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02Results of Operation and Financial Condition

On July 30, 2020, Kearny Financial Corp. (the “Company”), the holding company for Kearny Bank, issued a press release reporting its financial results for the period ended June 30, 2020.

A copy of the press release announcing the results is included as Exhibit 99.1 to this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01Financial Statements and Exhibits

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

(b)Pro Forma Financial Information. Not applicable.

(c)Shell Company Transaction. Not applicable.

(d)Exhibits.

Exhibit Number	Description
99.1	Press release dated July 30, 2020.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	KEARNY FINANCIAL CORP.
Date: July 31, 2020	By:	/s/ Craig L. Montanaro
		Craig L. Montanaro
		President and Chief Executive Officer

krny-ex991_6.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

July 30, 2020

For further information contact:

Craig L. Montanaro, President and Chief Executive Officer, or

Keith Suchodolski, Executive Vice President and Chief Financial Officer

Kearny Financial Corp.

(973) 244-4500

KEARNY FINANCIAL CORP.

REPORTS FOURTH QUARTER AND FISCAL YEAR END 2020 OPERATING RESULTS

Fairfield, New Jersey, July 30, 2020 – Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported net income for the quarter ended June 30, 2020 of $13.7 million, or $0.17 per diluted share. The results represent an increase of $4.4 million compared to $9.3 million, or $0.11 per diluted share, for the quarter ended March 31, 2020.

For the fiscal year ended June 30, 2020, the Company reported net income of $45.0 million representing an increase of $2.9 million compared to $42.1 million for the fiscal year ended June 30, 2019. The increase in net income reflected a 20% increase in earnings per diluted share to $0.55 for the year ended June 30, 2020 from $0.46 for the year ended June 30, 2019.

Craig L. Montanaro, President and Chief Executive Officer, commented, “I am proud to report that we achieved record earnings for both the quarter and the fiscal year, while making significant progress towards our long-term strategic goal of improving our funding mix. During fiscal 2020, our retail deposits increased by $517 million, or 14%, reflecting a $647 million, or 33%, increase in core non-maturity deposits. This success enabled us to reduce our wholesale funding by $381 million, with such balances representing 22% of total funding at June 30, 2020 from 30% one year earlier.”

The Company had previously announced the successful closing of its acquisition of MSB Financial Corp. (NASDAQ: MSBF) (“MSB”) and its subsidiary, Millington Bank (“Millington”) on July 10, 2020. Regarding the acquisition, Mr. Montanaro commented, “In conjunction with announcing our year-end results, I would also like to welcome the Millington employees, clients and stockholders to the Kearny family. Having successfully converted and integrated MSB’s core and online banking systems concurrent with the acquisition’s closing, we are now focused on supporting and strengthening our relationships with Millington’s existing clients, while further enhancing our presence in the very desirable New Jersey markets located within Somerset and Morris counties.”

With regard to the recent challenges presented by the COVID-19 pandemic, Mr. Montanaro further stated, “We continue to focus on the various ways in which we can assist our clients who have been adversely impacted by COVID-19, including those clients who recently joined us from Millington. While we recognize that significant economic uncertainty lies ahead, we believe that our combined balance sheets are well positioned for such an environment. We ended fiscal 2020 on exceptionally strong footing with a tangible equity ratio of 13.29%, loan loss reserves totaling $37 million and liquid assets of $1.6 billion, which are further supported by over $2.6 billion of available borrowing capacity.”

Balance Sheet

•	For the quarter and the year ended June 30, 2020, the Company succeeded in significantly growing core retail deposits which facilitated the outflow of wholesale deposits.  For the quarter ended June 30, 2020, deposits increased by $177.0 million to $4.43 billion from $4.25 billion at March 31, 2020. Such growth was attributable to an increase of $224.9 million in retail deposits that was partially offset by a decline of $47.8 million in wholesale deposits.  For the year ended June 30, 2020, deposits increased by $282.6 million to $4.43 billion from $4.15 billion at June 30, 2019.  The year-over-year growth in deposits was attributable to an increase of $517.4 million in retail deposits that was partially offset by a $234.8 million decrease in wholesale deposits.
•	Loans receivable decreased by $64.1 million to $4.50 billion at June 30, 2020 from $4.56 billion at March 31, 2020.  The decrease in loans receivable was attributable to a decrease in loan origination volume coupled with the acceleration of loan pre-payment activity, as compared to the prior quarter.  For the quarter ended June 30, 2020, the Company originated 749 loans totaling $69.0 million under the Payroll Protection Program (“PPP”) and recorded deferred origination fees related to such loans totaling $2.9 million.  For the year ended June 30, 2020, the Company’s aggregate loan portfolio decreased by $180.5 million, or 3.9%, from $4.68 billion, at June 30, 2019.
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•	Investment securities decreased by $92.7 million to $1.42 billion, or 21.0% of total assets, at June 30, 2020 from $1.51 billion at March 31, 2020.  For the year ended June 30, 2020, the securities portfolio increased by $127.3 million from $1.29 billion, or 19.5% of total assets, at June 30, 2019.
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•	Borrowings decreased by $210.9 million to $1.17 billion, or 17.4% of total assets, at June 30, 2020 from $1.38 billion at March 31, 2020.  For the year ended June 30, 2020, borrowings decreased $148.8 million from $1.32 billion at June 30, 2019.  The decrease in borrowings for the quarter and year ended June 30, 2020 reflected the Company’s continuing effort to reallocate its funding mix in favor of core deposits.
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Earnings

Net Interest Income, Spread and Margin

•	For the quarter ended June 30, 2020, net interest income increased by $2.9 million to $40.5 million from $37.6 million for the quarter ended March 31, 2020.  The increase in net interest income was the result of a decrease of $4.3 million in interest expense, partially offset by a $1.4 million decrease in interest income between comparative periods.  For the year ended June 30, 2020, net interest income decreased by $6.0 million to $149.4 million from $155.3 million for the year ended June 30, 2019.  The decrease in net interest income was the result of a decrease of $4.1 million in interest income and an increase of $1.8 million in interest expense.
•	For the quarter ended June 30, 2020, net interest spread increased by 20 basis points to 2.43% while net interest margin increased by 16 basis points to 2.62%. These increases primarily reflected a decrease in the cost of interest-bearing liabilities partially offset by a decrease in the yield on interest-earning assets. Contributing approximately eight basis points to the quarterly increase in net interest margin was a temporary mismatch in the relationship between three-month LIBOR and three-month FHLB advance rates which favorably impacted the net cost of the Company’s portfolio of hedged FHLB advances. Specifically, the average historical spread between these two rates over the five-year period ended June 30, 2020 was approximately one basis point.  However, that spread increased to 94 basis points on April 1, 2020 reflecting significant market volatility arising at outset of the COVID-19 pandemic. The mismatch between the noted three-month rate indices declined throughout the quarter, ending at 14 basis points at June 30, 2020.
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•	For the year ended June 30, 2020, net interest rate spread decreased by nine basis points to 2.22% while net interest margin decreased 11 basis points to 2.45%.  These decreases primarily reflected a decrease in the yield on interest-earning assets coupled with an increase in the cost of interest-bearing liabilities.
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•	For the quarter ended June 30, 2020, the yield on interest-earning assets decreased by 12 basis points to 3.72% which was largely attributable to a 9 basis point decrease in the yield on loans and a 14 basis point decrease in the yield on taxable investment securities.  For that same period, the cost of interest-bearing liabilities decreased by 32 basis points to 1.29% which was attributable to a 23 basis point decrease in the cost of interest-bearing deposits coupled with a 61 basis point decrease in the cost of borrowings.
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•	For the year ended June 30, 2020, the yield on interest-earning assets decreased by eight basis points to 3.83% which was largely attributable to a three basis point decrease in the yield on loans, coupled with a 14 basis point decrease in the yield on taxable investment securities. For that same period, the cost of interest-bearing liabilities increased by one basis point to 1.61% which was attributable to an 11 basis point increase in the cost of interest-bearing deposits partially offset by a 24 basis point decrease in the cost of borrowings.
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Non-Interest Income

•	Fees and service charges totaled $1.7 million for the quarter ended June 30, 2020 compared to $1.3 million for the quarter ended March 31, 2020.  The increase was largely attributable to an increase of $518,000 in loan pre-payment penalty income to $1.4 million for the quarter ended June 30, 2020.  For the year ended June 30, 2020 fees and service charges increased by $1.2 million to $6.6 million from $5.4 million for the year ended June 30, 2019 which was largely attributable to an increase of $1.1 million in loan pre-payment penalty income to $4.6 million for the year ended June 30, 2020.
•	Gains on sales and calls of securities totaled $19,000 for the quarter ended June 30, 2020 compared to $2.2 million for the quarter ended March 31, 2020.  For the year ended June 30, 2020 gains on sales of securities totaled $2.3 million compared to a net loss of $323,000 for the year ended June 30, 2019. These variances were largely attributable to the gain on sale of securities recognized in conjunction with a wholesale restructuring transaction executed during the quarter ended March 31, 2020.
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•	Loan sale gains achieved record levels, totaling $1.3 million for the quarter ended June 30, 2020 as compared to $565,000 for the quarter ended March 31, 2020. Such gains totaled $3.2 million and $580,000 for the years ended June 30, 2020 and June 30, 2019, respectively. The increase in loan sale gains primarily reflected an increase in the volume of residential mortgage loans sold during those periods.
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Non-Interest Expense

•	Non-interest expense decreased by $1.2 million to $26.9 million for the quarter ended June 30, 2020 compared to $28.1 million for the quarter ended March 31, 2020.  This decrease was largely attributable to $2.2 million of non-recurring debt extinguishment expenses recognized in the prior comparative period. The remaining change in non-interest expense included increases in equipment and systems expense, advertising and marketing expense, FDIC insurance premiums, non-recurring merger-related expenses and miscellaneous expense.
•	For the year ended June 30, 2020, non-interest expense decreased by $1.6 million to $107.6 million from $109.2 million for the year ended June 30, 2019. This decrease was largely attributable to $1.7 million of non-recurring branch consolidation expenses recognized in the prior comparative period.  The remaining change in non-interest expense included decreases in salaries and employee benefits, equipment and systems expense, advertising and marketing expense and FDIC insurance premiums.  Partially offsetting these decreases were increases to non-recurring debt-extinguishment expenses and non-recurring merger-related expenses totaling $2.2 million and $951,000, respectively, which were recognized during the current year ended June 30, 2020.
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•	The Company’s non-interest expense ratio totaled 1.59% for the quarter ended June 30, 2020 compared to 1.67% for the quarter ended March 31, 2020.  For the year ended June 30, 2020, the Company’s non-interest expense ratio totaled 1.61% compared to 1.64% for the prior year ended June 30, 2019.
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•	The Company’s efficiency ratio was 59.2% for the quarter ended June 30, 2020 compared to 64.1% for the prior quarter ended March 31, 2020.  For the year ended June 30, 2020, the Company’s efficiency ratio totaled 63.7% compared to 64.7% for the prior year ended June 30, 2019.
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Income Taxes

•	Income tax expense totaled $4.7 million for the quarter ended June 30, 2020 compared to $225,000 for the quarter ended March 31, 2020, resulting in effective tax rates of 25.6% and 2.4%, respectively. For the year ended June 30, 2020, income tax expense was $12.3 million compared to $13.9 million for the year ended June 30, 2019 resulting in effective tax rates of 21.5% and 24.8%, respectively.
•	The increase in income tax expense and effective tax rate for the quarter ended June 30, 2020 reflected certain income tax benefits recorded in the prior comparative period, including a $1.6 million carryback of net operating losses and the reversal of tax valuation allowances totaling $591,000. In addition, a comparatively higher level of pre-tax net income, as compared to the prior period, resulted in a comparatively higher provision for income tax expense.  The decrease in income tax expense and effective tax rate for the year ended June 30, 2020 primarily reflected income tax benefits recorded during the year ended June 30, 2020, as noted above.
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Performance Ratios

•	Return on average assets for the quarter ended June 30, 2020 increased to 0.81% from 0.55% for the quarter ended March 31, 2020.  For the year ended June 30, 2020, the return on average assets increased to 0.67% from 0.63% for the prior year ended June 30, 2019.
•	Return on average equity increased to 5.08% for the quarter ended June 30, 2020 from 3.39% for the quarter ended March 31, 2020 while return on average tangible equity increased to 6.35% from 4.23% for those same comparative periods, respectively.  For the year ended June 30, 2020, return on average equity increased to 4.10% from 3.52% for the prior year ended June 30, 2019 while return on average tangible equity increased to 5.10% from 4.30% for those same comparative periods, respectively.
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Asset Quality

•	The outstanding balance of non-performing loans totaled $36.7 million, or 0.82% of total loans, at June 30, 2020 compared to $35.4 million, or 0.78% of total loans, at March 31, 2020 and $20.3 million, or 0.43% of total loans, at June 30, 2019.  The $16.4 million increase in nonperforming loans for the year ended June 30, 2020 was primarily attributable to a single, $14.3 million, owner-occupied commercial real estate loan which was placed on non-accrual status during the quarter ended March 31, 2020.  This loan is secured by a grocery-anchored retail shopping center located in northern New Jersey and has a current loan-to-value of approximately 69%.
•	Based on Section 4013 of the CARES Act and the related guidance promulgated by federal banking regulators, qualifying short-term loan modifications resulting in payment deferrals for up to six months that are attributable to the adverse impact of COVID-19, are not considered to be troubled debt restructurings. Consequently, loans subject to such payment deferrals are reported as current with regard to payment status and continue to accrue interest during the payment deferral period. As of June 30, 2020, the Company had modified a total of 711 loans with an aggregate principal balance of $781.3 million, representing 17.2% of total loans. Further details regarding these modifications are provided in the table below. As of June 30, 2020, 351 of the modified loans with an aggregate principal balance of $374.9 million had reached the expiration of their initial three-month deferral period.  Of these loans, 71.4%, or $267.9 million, had returned to their regular payment schedules by July 27, 2020.  Through that same date, 24.5%, or $91.6 million had been granted a second 90-day extension while the remaining 4.1%, or $15.4 million, had not yet made their July payment.
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	June 30, 2020				May 4, 2020 ^(1)^				Increase/(Decrease)
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	# of Loans		Balance		# of Loans		Balance		# of Loans		Balance
			(In Thousands)				(In Thousands)				(In Thousands)
Commercial loans:
Multi-family mortgage		136	$	387,744		93	$	269,219		43	$	118,525
Nonresidential mortgage		131		237,384		120		216,833		11		20,551
Commercial business		54		10,450		46		6,770		8		3,680
Construction		1		796		1		796		-		-
Total commercial loans		322		636,374		260		493,618		62		142,756
Residential mortgage		345		141,890		305		126,647		40		15,243
												-
Consumer loans:												-
Home equity loans		44		3,014		37		2,409		7		605
Total loans		711	$	781,278		602	$	622,674		109	$	158,604
(1)	Certain historical data presented as of May 4, 2020 has been reclassified to be consistent with the current period presentation.
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•	In addition to the loans reported above, the Company acquired 144 loans with aggregate principal balances of $114.8 million in conjunction with the Company’s acquisition of MSB on July 10, 2020 that had been previously modified in accordance with the guidance discussed above.
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•	Net charge offs totaled $38,000 for the quarter ended June 30, 2020 compared to $16,000 for the quarter ended March 31, 2020 reflecting an annualized net charge off rate of 0.00% for both comparative periods.  For the year ended June 30, 2020, the Company recognized net charge offs totaling $144,000 reflecting an annualized net charge off rate of 0.00% on the average balance of total loans for the fiscal year.  By comparison, for the year ended June 30, 2019, the Company recognized net charge offs totaling $1.1 million reflecting an annualized net charge off rate of 0.02% on the average balance of total loans for fiscal 2019.
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•	For the quarter ended June 30, 2020 the Company recorded a provision for loan losses of $174,000.  The provision expense for the period partly reflected an increase of $935,000 in the allowance for loan losses resulting from increases in certain environmental loss factors reflecting estimated incurred losses specifically attributable to the continuing adverse impact of COVID-19.  That increase was largely offset by the effects of a decrease in the overall balance of the portion of the loan portfolio that was collectively evaluated for impairment at June 30, 2020.  By comparison, the provision for loan losses for the prior quarter ended March 31, 2020 totaled $6.3 million.  The provision expense during the prior comparative quarter reflected an estimate of approximately $5.5 million of incurred losses specifically attributable to the adverse impact of COVID-19.  The remaining portion of the provision during the earlier comparative period was largely attributable to the effects of an increase in the overall balance of the portion of the loan portfolio that was collectively evaluated for impairment during that period.
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•	For the year ended June 30, 2020, the Company recorded a provision for loan losses of $4.2 million, reflecting an increase of $641,000 from $3.6 million for the year ended June 30, 2019. The increase largely reflected increases to environmental loss factors associated with the adverse impact of COVID-19 that was partially offset by the effects of lower growth during the year ended June 30, 2020 in the balance of the portion of the loan portfolio that was collectively evaluated for impairment compared to that of the prior year ended June 30, 2019.
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•	The allowance for loan losses (“ALLL”) increased to $37.3 million, or 0.82% of total loans, at June 30, 2020 from $37.2 million, or 0.81% of total loans, at March 31, 2020.  For the year ended June 30, 2020, the allowance for loan losses increased by $4.1 million from $33.3 million, or 0.70% of total loans, at June 30, 2019. Excluding the balance of acquired loans, which generally do not carry an ALLL, the ALLL as a percentage of non-acquired loans at June 30, 2020 and June 30, 2019 totaled 1.03% and .91%, respectively.  As of June 30, 2020, the balance of acquired loans totaled $923.9 million, had remaining purchase accounting discounts of $43.1 million, or 4.67% of the applicable outstanding balance, with no associated ALLL. As the Company operates on a non-calendar fiscal year, as of June 30, 2020, it had not yet adopted Accounting Standards Update 2016-13, also known as the Current Expected Credit Loss (“CECL”) standard.
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Liquidity & Capital

•	The Company maintains significant sources of both on- and off-balance sheet liquidity.  At June 30, 2020, the Company’s liquid assets included $181.0 million of short-term cash and equivalents supplemented by $1.39 billion of investment securities classified as available for sale which can be readily sold or pledged as collateral, if necessary.  In addition, the Company had the capacity to borrow additional funds totaling $615.0 million via unsecured lines of credit and $1.53 billion and $318.7 million, without pledging additional collateral, from the Federal Home Loan Bank of New York and Federal Reserve Bank, respectively.
•	On March 25, 2020 the Company temporarily suspended its stock repurchase program due to the risks and uncertainties associated with the COVID-19 pandemic. Through June 30, 2020, the Company repurchased 8,457,294 shares, or 91.7% of the shares authorized for repurchase under the current repurchase program, at a cost of $111.1 million, or an average of $13.14 per share.
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•	For the quarter ended June 30, 2020, the Company maintained its regular quarterly cash dividend paid to stockholders of $0.08 per share.  For the year ended June 30, 2020, total cash dividends paid to stockholders totaled $0.29 per share.
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•	For the quarter ended June 30, 2020, book value per share increased by $0.17 to $12.96 at June 30, 2020 while tangible book value per share increased by $0.18 to $10.39 at June 30, 2020.  For the year ended June 30, 2020, book value per share increased by $0.31 to $12.96 at June 30, 2020 while tangible book value per share increased by $0.17 to $10.39 at June 30, 2020.
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•	At June 30, 2020 the Tier 1 leverage ratios of the Company and the Bank were 13.27% and 11.95%, respectively.  The remainder of the Company’s and Bank’s regulatory capital ratios at June 30, 2020 were in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.
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Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time.  The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

In addition, the COVID-19 pandemic is having an adverse impact on the Company, its customers and the communities it serves. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; due to a decline in our stock price or other factors, goodwill may become impaired and be required to be written down; and our cyber security risks are increased as the result of an increase in the number of employees working remotely.

Linked-Quarter Comparative Financial Analysis
Summary Balance Sheet	At									Variance
(Dollars and Shares in Thousands,	June 30,			March 31,			Variance			or Change
Except Per Share Data, Unaudited)	2020			2020			or Change			Pct.
Assets
Cash and cash equivalents	$	180,967		$	59,452		$	121,515			204.4	%
Securities available for sale		1,385,703			1,476,344			(90,641	)		-6.1	%
Securities held to maturity		32,556			34,618			(2,062	)		-6.0	%
Loans held-for-sale		20,789			11,245			9,544			84.9	%
Loans receivable, including yield adjustments		4,498,397			4,562,512			(64,115	)		-1.4	%
Less allowance for loan losses		(37,327	)		(37,191	)		(136	)		0.4	%
Net loans receivable		4,461,070			4,525,321			(64,251	)		-1.4	%
Premises and equipment		57,389			58,985			(1,596	)		-2.7	%
Federal Home Loan Bank stock		58,654			59,324			(670	)		-1.1	%
Accrued interest receivable		17,373			19,036			(1,663	)		-8.7	%
Goodwill		210,895			210,895			-			0.0	%
Core deposit intangible		3,995			4,242			(247	)		-5.8	%
Bank owned life insurance		262,380			260,843			1,537			0.6	%
Deferred income taxes, net		25,480			27,150			(1,670	)		-6.2	%
Other real estate owned		178			178			-			0.0	%
Other assets		40,746			26,200			14,546			55.5	%
Total assets	$	6,758,175		$	6,773,833		$	(15,658	)		-0.2	%
Liabilities
Deposits	$	4,430,282		$	4,253,254		$	177,028			4.2	%
Borrowings		1,173,165			1,384,025			(210,860	)		-15.2	%
Advance payments by borrowers for taxes		16,569			16,492			77			0.5	%
Other liabilities		53,982			50,390			3,592			7.1	%
Total liabilities		5,673,998			5,704,161			(30,163	)		-0.5	%
Stockholders' Equity
Common stock		837			837			-			0.0	%
Paid-in capital		722,871			721,474			1,397			0.2	%
Retained earnings		387,911			380,671			7,240			1.9	%
Unearned ESOP shares		(28,699	)		(29,185	)		486			-1.7	%
Accumulated other comprehensive (loss) income, net		1,257			(4,125	)		5,382			-130.5	%
Total stockholders' equity		1,084,177			1,069,672			14,505			1.4	%
Total liabilities and stockholders' equity	$	6,758,175		$	6,773,833		$	(15,658	)		-0.2	%
Consolidated capital ratios
Equity to assets		16.04	%		15.79	%		0.25	%
Tangible equity to tangible assets		13.29	%		13.03	%		0.26	%
Share data
Outstanding shares		83,663			83,664			(1	)		0.0	%
Book value per share	$	12.96		$	12.79		$	0.17			1.3	%
Tangible book value per share^(1)^	$	10.39		$	10.21		$	0.18			1.8	%
(1)	Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.
---	---
Summary Income Statement	For the three months ended									Variance
---	---	---	---	---	---	---	---	---	---	---	---	---
(Dollars and Shares in Thousands,	June 30,			March 31,			Variance			or Change
Except Per Share Data, Unaudited)	2020			2020			or Change			Pct.
Interest income
Loans	$	46,192		$	46,603		$	(411	)		-0.9	%
Taxable investment securities		9,769			10,526			(757	)		-7.2	%
Tax-exempt investment securities		487			547			(60	)		-11.0	%
Other interest-earning assets		903			1,100			(197	)		-17.9	%
Total Interest Income		57,351			58,776			(1,425	)		-2.4	%
Interest expense
Deposits		12,439			14,768			(2,329	)		-15.8	%
Borrowings		4,462			6,398			(1,936	)		-30.3	%
Total interest expense		16,901			21,166			(4,265	)		-20.2	%
Net interest income		40,450			37,610			2,840			7.6	%
Provision for loan losses		174			6,270			(6,096	)		-97.2	%
Net interest income after provision for<br><br><br>loan losses		40,276			31,340			8,936			28.5	%
Non-interest income
Fees and service charges		1,696			1,338			358			26.8	%
Gain on sale and call of securities		19			2,234			(2,215	)		-99.1	%
Gain on sale of loans		1,348			565			783			138.6	%
Loss on sale and write down of other real estate owned		-			-			-			0.0	%
Income from bank owned life insurance		1,537			1,532			5			0.3	%
Electronic banking fees and charges		325			309			16			5.2	%
Miscellaneous		77			223			(146	)		-65.5	%
Total non-interest income		5,002			6,201			(1,199	)		-19.3	%
Non-interest expense
Salaries and employee benefits		15,527			15,537			(10	)		-0.1	%
Net occupancy expense of premises		2,688			2,685			3			0.1	%
Equipment and systems		2,948			2,672			276			10.3	%
Advertising and marketing		751			612			139			22.7	%
Federal deposit insurance premium		286			-			286			0.0	%
Directors' compensation		769			771			(2	)		-0.3	%
Merger-related expenses		447			285			162			56.8	%
Debt extinguishment expenses		-			2,156			(2,156	)		-100.0	%
Miscellaneous		3,475			3,344			131			3.9	%
Total non-interest expense		26,891			28,062			(1,171	)		-4.2	%
Income before income taxes		18,387			9,479			8,908			94.0	%
Income taxes		4,698			225			4,473			1988.0	%
Net income	$	13,689		$	9,254		$	4,435			47.9	%
Net income per common share (EPS)
Basic	$	0.17		$	0.11		$	0.06
Diluted	$	0.17		$	0.11		$	0.06
Dividends declared
Cash dividends declared per common share	$	0.08		$	0.08		$	-
Cash dividends declared	$	6,449		$	6,479		$	(30	)
Dividend payout ratio		47.1	%		70.0	%		-22.9	%
Weighted average number of  common<br><br><br>shares outstanding
Basic		80,678			81,339			(661	)
Diluted		80,680			81,358			(678	)
	For the three months ended									Variance
---	---	---	---	---	---	---	---	---	---	---	---	---
Average Balance Sheet Data	June 30,			March 31,			Variance			or Change
(Dollars in Thousands, Unaudited)	2020			2020			or Change			Pct.
Assets
Interest-earning assets:
Loans receivable, including loans held for sale	$	4,567,229		$	4,503,996		$	63,233			1.4	%
Taxable investment securities		1,369,014			1,406,973			(37,959	)		-2.7	%
Tax-exempt investment securities		89,263			101,771			(12,508	)		-12.3	%
Other interest-earning assets		141,964			104,241			37,723			36.2	%
Total interest-earning assets		6,167,470			6,116,981			50,489			0.8	%
Non-interest-earning assets		605,876			598,335			7,541			1.3	%
Total assets	$	6,773,346		$	6,715,316		$	58,030			0.9	%
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	1,189,044		$	1,112,080		$	76,964			6.9	%
Savings		876,580			838,501			38,079			4.5	%
Certificates of deposit		1,879,039			2,004,785			(125,746	)		-6.3	%
Total interest-bearing deposits		3,944,663			3,955,366			(10,703	)		-0.3	%
Borrowings:
Federal Home Loan Bank advances		1,202,522			1,208,627			(6,105	)		-0.5	%
Other borrowings		96,770			87,072			9,698			11.1	%
Total borrowings		1,299,292			1,295,699			3,593			0.3	%
Total interest-bearing liabilities		5,243,955			5,251,065			(7,110	)		-0.1	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		380,067			317,530			62,537			19.7	%
Other non-interest-bearing liabilities		72,007			55,456			16,551			29.8	%
Total non-interest-bearing liabilities		452,074			372,986			79,088			21.2	%
Total liabilities		5,696,029			5,624,051			71,978			1.3	%
Stockholders' equity		1,077,317			1,091,265			(13,948	)		-1.3	%
Total liabilities and stockholders' equity	$	6,773,346		$	6,715,316		$	58,030			0.9	%
Average interest-earning assets to average<br><br><br>interest-bearing liabilities		117.61	%		116.49	%		1.12	%		1.0	%
	For the three months ended
---	---	---	---	---	---	---	---	---	---
	June 30,			March 31,			Variance
Performance Ratio Highlights	2020			2020			or Change
Average yield on interest-earning assets:
Loans receivable, including loans held for sale		4.05	%		4.14	%		-0.09	%
Taxable investment securities		2.85	%		2.99	%		-0.14	%
Tax-exempt investment securities ^(1)^		2.18	%		2.15	%		0.03	%
Other interest-earning assets		2.54	%		4.22	%		-1.68	%
Total interest-earning assets		3.72	%		3.84	%		-0.12	%
Average cost of interest-bearing liabilities:
Deposits:
Interest-bearing demand		0.72	%		1.17	%		-0.45	%
Savings		0.81	%		0.85	%		-0.04	%
Certificates of deposit		1.82	%		1.94	%		-0.12	%
Total interest-bearing deposits		1.26	%		1.49	%		-0.23	%
Borrowings:
Federal Home Loan Bank advances		1.47	%		2.03	%		-0.56	%
Other borrowings		0.13	%		1.17	%		-1.04	%
Total borrowings		1.37	%		1.98	%		-0.61	%
Total interest-bearing liabilities		1.29	%		1.61	%		-0.32	%
Interest rate spread^(2)^		2.43	%		2.23	%		0.20	%
Net interest margin^(3)^		2.62	%		2.46	%		0.16	%
Non-interest income to average assets<br><br><br>(annualized)		0.30	%		0.37	%		-0.07	%
Non-interest expense to average assets<br><br><br>(annualized)		1.59	%		1.67	%		-0.08	%
Efficiency ratio^(4)^		59.16	%		64.05	%		-4.89	%
Return on average assets (annualized)		0.81	%		0.55	%		0.26	%
Return on average equity (annualized)		5.08	%		3.39	%		1.69	%
Return on average tangible equity (annualized) ^(5)^		6.35	%		4.23	%		2.12	%
(1)	The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
---	---
(2)	Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
---	---
(3)	Net interest income divided by average interest-earning assets.
---	---
(4)	Non-interest expense divided by the sum of net interest income and non-interest income.
---	---
(5)	Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.
---	---
Year-to-Year Comparative Financial Analysis
---	---	---	---	---	---	---	---	---	---	---	---	---
Summary Balance Sheet	At									Variance
(Dollars and Shares in Thousands,	June 30,			June 30,			Variance			or Change
Except Per Share Data, Unaudited)	2020			2019			or Change			Pct.
Assets
Cash and cash equivalents	$	180,967		$	38,935		$	142,032			364.8	%
Securities available for sale		1,385,703			714,263			671,440			94.0	%
Securities held to maturity		32,556			576,652			(544,096	)		-94.4	%
Loans held-for-sale		20,789			12,267			8,522			69.5	%
Loans receivable, including yield adjustments		4,498,397			4,678,928			(180,531	)		-3.9	%
Less allowance for loan losses		(37,327	)		(33,274	)		(4,053	)		12.2	%
Net loans receivable		4,461,070			4,645,654			(184,584	)		-4.0	%
Premises and equipment		57,389			56,854			535			0.9	%
Federal Home Loan Bank of New York stock		58,654			64,190			(5,536	)		-8.6	%
Accrued interest receivable		17,373			19,360			(1,987	)		-10.3	%
Goodwill		210,895			210,895			-			0.0	%
Core deposit intangible		3,995			5,160			(1,165	)		-22.6	%
Bank owned life insurance		262,380			256,155			6,225			2.4	%
Deferred income tax assets, net		25,480			25,367			113			0.4	%
Other real estate owned		178			-			178			0.0	%
Other assets		40,746			9,077			31,669			348.9	%
Total assets	$	6,758,175		$	6,634,829		$	123,346			1.9	%
Liabilities
Deposits	$	4,430,282		$	4,147,610		$	282,672			6.8	%
Borrowings		1,173,165			1,321,982			(148,817	)		-11.3	%
Advance payments by borrowers for taxes		16,569			16,887			(318	)		-1.9	%
Other liabilities		53,982			21,191			32,791			154.7	%
Total liabilities		5,673,998			5,507,670			166,328			3.0	%
Stockholders' Equity
Common stock	$	837		$	891		$	(54	)		-6.1	%
Paid-in capital		722,871			787,394			(64,523	)		-8.2	%
Retained earnings		387,911			366,679			21,232			5.8	%
Unearned ESOP shares		(28,699	)		(30,644	)		1,945			-6.3	%
Accumulated other comprehensive income, net		1,257			2,839			(1,582	)		-55.7	%
Total stockholders' equity		1,084,177			1,127,159			(42,982	)		-3.8	%
Total liabilities and stockholders' equity	$	6,758,175		$	6,634,829		$	123,346			1.9	%
Consolidated capital ratios
Equity to assets		16.04	%		16.99	%		-0.95	%
Tangible equity to tangible assets		13.29	%		14.19	%		-0.90	%
Share data
Outstanding shares		83,663			89,126			(5,463	)		-6.1	%
Book value per share	$	12.96		$	12.65		$	0.31			2.5	%
Tangible book value per share (1)	$	10.39		$	10.22		$	0.17			1.7	%
(1)	Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.
---	---
Summary Income Statement	For the year ended									Variance
---	---	---	---	---	---	---	---	---	---	---	---	---
(Dollars and Shares in Thousands,	June 30,			June 30,			Variance			or Change
Except Per Share Data, Unaudited)	2020			2019			or Change			Pct.
Interest income
Loans	$	187,003		$	192,386		$	(5,383	)		-2.8	%
Taxable investment securities		39,321			37,213			2,108			5.7	%
Tax-exempt investment securities		2,393			2,839			(446	)		-15.7	%
Other interest-earning assets		4,491			4,895			(404	)		-8.3	%
Total Interest Income		233,208			237,333			(4,125	)		-1.7	%
Interest expense
Deposits		58,852			52,511			6,341			12.1	%
Borrowings		25,002			29,509			(4,507	)		-15.3	%
Total interest expense		83,854			82,020			1,834			2.2	%
Net interest income		149,354			155,313			(5,959	)		-3.8	%
Provision for loan losses		4,197			3,556			641			18.0	%
Net interest income after provision for<br><br><br>loan losses		145,157			151,757			(6,600	)		-4.3	%
Non-interest income
Fees and service charges		6,647			5,445			1,202			22.1	%
Gain (loss) on sale and call of securities		2,250			(323	)		2,573			796.6	%
Gain on sale of loans		3,186			580			2,606			449.3	%
Loss on sale of real estate owned		(28	)		(11	)		(17	)		154.5	%
Income from bank owned life insurance		6,225			6,339			(114	)		-1.8	%
Electronic banking fees and charges		1,245			1,050			195			18.6	%
Miscellaneous		194			475			(281	)		-59.2	%
Total non-interest income		19,719			13,555			6,164			45.5	%
Non-interest expense
Salaries and employee benefits		62,015			63,029			(1,014	)		-1.6	%
Net occupancy expense of premises		11,424			11,220			204			1.8	%
Equipment and systems		11,755			12,273			(518	)		-4.2	%
Advertising and marketing		2,788			3,051			(263	)		-8.6	%
Federal deposit insurance premium		286			1,779			(1,493	)		-83.9	%
Directors' compensation		3,079			3,044			35			1.1	%
Merger-related expenses		951			-			951			0.0	%
Debt extinguishment expenses		2,156			-			2,156			0.0	%
Miscellaneous		13,170			14,847			(1,677	)		-11.3	%
Total non-interest expense		107,624			109,243			(1,619	)		-1.5	%
Income before income taxes		57,252			56,069			1,183			2.1	%
Income taxes		12,287			13,927			(1,640	)		-11.8	%
Net income	$	44,965		$	42,142		$	2,823			6.7	%
Net income per common share (EPS)
Basic	$	0.55		$	0.46		$	0.09
Diluted	$	0.55		$	0.46		$	0.09
Dividends declared
Cash dividends declared per common share	$	0.29		$	0.37		$	(0.08	)
Cash dividends declared	$	23,733		$	34,028		$	(10,295	)
Dividend payout ratio		52.8	%		80.7	%		-28.0	%
Weighted average number of  common<br><br><br>shares outstanding
Basic		82,409			91,054			(8,645	)
Diluted		82,430			91,100			(8,670	)
	For the year ended									Variance
---	---	---	---	---	---	---	---	---	---	---	---	---
Average Balance Sheet Data	June 30,			June 30,			Variance			or Change
(Dollars in Thousands, Unaudited)	2020			2019			or Change			Pct.
Assets
Interest-earning assets:
Loans receivable, including loans held for sale	$	4,568,816		$	4,669,436		$	(100,620	)		-2.2	%
Taxable investment securities		1,291,516			1,171,335			120,181			10.3	%
Tax-exempt investment securities		111,477			134,489			(23,012	)		-17.1	%
Other interest-earning assets		122,278			101,595			20,683			20.4	%
Total interest-earning assets		6,094,087			6,076,855			17,232			0.3	%
Non-interest-earning assets		595,158			582,838			12,320			2.1	%
Total assets	$	6,689,245		$	6,659,693		$	29,552			0.4	%
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	1,041,188		$	796,815		$	244,373			30.7	%
Savings		831,832			761,203			70,629			9.3	%
Certificates of deposit		2,032,046			2,194,513			(162,467	)		-7.4	%
Total interest-bearing deposits		3,905,066			3,752,531			152,535			4.1	%
Borrowings:
Federal Home Loan Bank Advances		1,236,139			1,305,171			(69,032	)		-5.3	%
Other borrowings		56,957			54,152			2,805			5.2	%
Total borrowings		1,293,096			1,359,323			(66,227	)		-4.9	%
Total interest-bearing liabilities		5,198,162			5,111,854			86,308			1.7	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		334,522			312,169			22,353			7.2	%
Other non-interest-bearing liabilities		60,236			39,048			21,188			54.3	%
Total non-interest-bearing liabilities		394,758			351,217			43,541			12.4	%
Total liabilities		5,592,920			5,463,071			129,849			2.4	%
Stockholders' equity		1,096,325			1,196,622			(100,297	)		-8.4	%
Total liabilities and stockholders' equity	$	6,689,245		$	6,659,693		$	29,552			0.4	%
Average interest-earning assets to average<br><br><br>interest-bearing liabilities		117.24	%		118.88	%		-1.64	%		-1.4	%
	For the year ended
---	---	---	---	---	---	---	---	---	---
	June 30,			June 30,			Variance
Performance Ratio Highlights	2020			2019			or Change
Average yield on interest-earning assets:
Loans receivable, including loans held for sale		4.09	%		4.12	%		-0.03	%
Taxable investment securities		3.04	%		3.18	%		-0.14	%
Tax-exempt investment securities ^(1)^		2.15	%		2.11	%		0.04	%
Other interest-earning assets		3.67	%		4.82	%		-1.15	%
Total interest-earning assets		3.83	%		3.91	%		-0.08	%
Average cost of interest-bearing liabilities:
Deposits:
Interest-bearing demand		1.10	%		1.02	%		0.08	%
Savings		0.81	%		0.55	%		0.26	%
Certificates of deposit		2.00	%		1.83	%		0.17	%
Total interest-bearing deposits		1.51	%		1.40	%		0.11	%
Borrowings:
Federal Home Loan Bank Advances		1.99	%		2.20	%		-0.21	%
Other borrowings		0.74	%		1.45	%		-0.71	%
Total borrowings		1.93	%		2.17	%		-0.24	%
Total interest-bearing liabilities		1.61	%		1.60	%		0.01	%
Interest rate spread^(2)^		2.22	%		2.31	%		-0.09	%
Net interest margin^(3)^		2.45	%		2.56	%		-0.11	%
Non-interest income to average assets		0.29	%		0.20	%		0.09	%
Non-interest expense to average assets		1.61	%		1.64	%		-0.03	%
Efficiency ratio^(4)^		63.66	%		64.69	%		-1.03	%
Return on average assets		0.67	%		0.63	%		0.04	%
Return on average equity		4.10	%		3.52	%		0.58	%
Return on average tangible equity ^(5)^		5.10	%		4.30	%		0.80	%
(1)	The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
---	---
(2)	Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
---	---
(3)	Net interest income divided by average interest-earning assets.
---	---
(4)	Non-interest expense divided by the sum of net interest income and non-interest income.
---	---
(5)	Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.
---	---
Five-Quarter Financial Trend Analysis
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Summary Balance Sheet	At
(Dollars and Shares in Thousands,	June 30,			March 31,			December 31,			September 30,			June 30,
Except Per Share Data, Unaudited)	2020			2020			2019			2019			2019
Assets
Cash and cash equivalents	$	180,967		$	59,452		$	41,796		$	129,305		$	38,935
Securities available for sale		1,385,703			1,476,344			1,402,206			1,231,691			714,263
Securities held to maturity		32,556			34,618			36,073			37,888			576,652
Loans held-for-sale		20,789			11,245			5,952			10,495			12,267
Loans receivable, including yield adjustments		4,498,397			4,562,512			4,492,697			4,604,738			4,678,928
Less allowance for loan losses		(37,327	)		(37,191	)		(30,937	)		(32,432	)		(33,274	)
Net loans receivable		4,461,070			4,525,321			4,461,760			4,572,306			4,645,654
Premises and equipment		57,389			58,985			56,542			56,599			56,854
Federal Home Loan Bank stock		58,654			59,324			62,838			63,739			64,190
Accrued interest receivable		17,373			19,036			18,261			19,393			19,360
Goodwill		210,895			210,895			210,895			210,895			210,895
Core deposit intangible		3,995			4,242			4,545			4,852			5,160
Bank owned life insurance		262,380			260,843			259,312			257,735			256,155
Deferred income taxes, net		25,480			27,150			20,438			21,742			25,367
Other real estate owned		178			178			178			-			-
Other assets		40,746			26,200			29,605			24,366			9,077
Total assets	$	6,758,175		$	6,773,833		$	6,610,401		$	6,641,006		$	6,634,829
Liabilities
Deposits	$	4,430,282		$	4,253,254		$	4,188,822		$	4,197,250		$	4,147,610
Borrowings		1,173,165			1,384,025			1,275,049			1,281,118			1,321,982
Advance payments by borrowers for taxes		16,569			16,492			16,585			16,102			16,887
Other liabilities		53,982			50,390			35,375			35,747			21,191
Total liabilities		5,673,998			5,704,161			5,515,831			5,530,217			5,507,670
Stockholders' Equity
Common stock		837			837			851			868			891
Paid-in capital		722,871			721,474			737,539			758,385			787,394
Retained earnings		387,911			380,671			377,896			373,004			366,679
Unearned ESOP shares		(28,699	)		(29,185	)		(29,671	)		(30,158	)		(30,644	)
Accumulated other comprehensive (loss) income, net		1,257			(4,125	)		7,955			8,690			2,839
Total stockholders' equity		1,084,177			1,069,672			1,094,570			1,110,789			1,127,159
Total liabilities and stockholders' equity	$	6,758,175		$	6,773,833		$	6,610,401		$	6,641,006		$	6,634,829
Consolidated capital ratios
Equity to assets		16.04	%		15.79	%		16.56	%		16.73	%		16.99	%
Tangible equity to tangible assets		13.29	%		13.03	%		13.75	%		13.93	%		14.19	%
Share data
Outstanding shares		83,663			83,664			85,150			86,786			89,126
Book value per share	$	12.96		$	12.79		$	12.85		$	12.80		$	12.65
Tangible book value per share^(1)^	$	10.39		$	10.21		$	10.32		$	10.31		$	10.22
(1)	Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.
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	At
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Supplemental Balance Sheet Highlights	June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in Thousands, Unaudited)	2020		2020		2019		2019		2019
Cash and cash equivalents
Cash and due from depository institutions	$	20,391	$	20,200	$	17,843	$	16,106	$	19,032
Interest-bearing deposits in other banks		160,576		39,252		23,953		113,199		19,903
Total cash and cash equivalents	$	180,967	$	59,452	$	41,796	$	129,305	$	38,935
Securities available for sale
Debt securities:
U.S. agency securities	$	-	$	-	$	606	$	694	$	3,678
Municipal and state obligations		54,054		58,151		88,057		91,050		26,951
Asset-backed securities		172,447		169,102		177,676		181,068		179,313
Collateralized loan obligations		193,788		189,565		198,324		198,549		208,611
Corporate bonds		143,639		163,715		192,074		191,241		122,024
Trust preferred securities		2,627		2,852		3,795		3,775		3,756
Debt securities		566,555		583,385		660,532		666,377		544,333
Mortgage-backed securities:
Collateralized mortgage obligations		30,903		34,671		57,839		63,594		21,390
Residential pass-through securities		561,954		607,113		360,900		202,858		44,303
Commercial pass-through securities		226,291		251,175		322,935		298,862		104,237
Mortgage-backed securities		819,148		892,959		741,674		565,314		169,930
Total securities available for sale	$	1,385,703	$	1,476,344	$	1,402,206	$	1,231,691	$	714,263
Securities held to maturity
Debt securities:
Municipal and state obligations	$	32,556	$	34,618	$	36,073	$	37,888	$	104,086
Corporate bonds		-		-		-		-		63,086
Debt securities		32,556		34,618		36,073		37,888		167,172
Mortgage-backed securities:
Collateralized mortgage obligations		-		-		-		-		46,381
Residential pass-through securities		-		-		-		-		166,283
Commercial pass-through securities		-		-		-		-		196,816
Mortgage-backed securities		-		-		-		-		409,480
Total securities held to maturity	$	32,556	$	34,618	$	36,073	$	37,888	$	576,652
Total securities	$	1,418,259	$	1,510,962	$	1,438,279	$	1,269,579	$	1,290,915
	At
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Supplemental Balance Sheet Highlights	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in Thousands, Unaudited)	2020			2020			2019			2019			2019
Loan portfolio composition:
Commercial loans:
Multi-family	$	2,059,568		$	1,879,907		$	1,856,591		$	1,922,968		$	1,946,391
Nonresidential		960,853			1,202,652			1,172,213			1,230,963			1,258,869
Commercial business		138,788			73,922			67,887			66,889			65,763
Construction		20,961			17,880			16,221			14,637			13,907
Total commercial loans		3,180,170			3,174,361			3,112,912			3,235,457			3,284,930
One- to four-family residential mortgage loans		1,273,022			1,338,099			1,331,301			1,319,750			1,344,044
Consumer loans:
Home equity loans and lines of credit		82,920			87,909			89,916			93,304			96,165
Other consumer loans		3,991			4,604			4,908			5,209			5,814
Total consumer loans		86,911			92,513			94,824			98,513			101,979
Total loans, excluding yield adjustments		4,540,103			4,604,973			4,539,037			4,653,720			4,730,953
Unaccreted yield adjustments		(41,706	)		(42,461	)		(46,340	)		(48,982	)		(52,025	)
Loans receivable, net of yield adjustments		4,498,397			4,562,512			4,492,697			4,604,738			4,678,928
Less allowance for loan losses		(37,327	)		(37,191	)		(30,937	)		(32,432	)		(33,274	)
Net loans receivable	$	4,461,070		$	4,525,321		$	4,461,760		$	4,572,306		$	4,645,654
Loan portfolio allocation:
Commercial loans:
Multi-family		45.3	%		40.8	%		40.9	%		41.3	%		41.2	%
Nonresidential		21.2	%		26.1	%		25.8	%		26.5	%		26.6	%
Commercial business		3.1	%		1.6	%		1.5	%		1.4	%		1.4	%
Construction		0.4	%		0.4	%		0.4	%		0.3	%		0.3	%
Total commercial loans		70.0	%		68.9	%		68.6	%		69.5	%		69.5	%
One- to four-family residential mortgage loans		28.1	%		29.1	%		29.3	%		28.4	%		28.4	%
Consumer loans:
Home equity loans and lines of credit		1.8	%		1.9	%		2.0	%		2.0	%		2.0	%
Other consumer loans		0.1	%		0.1	%		0.1	%		0.1	%		0.1	%
Total consumer loans		1.9	%		2.0	%		2.1	%		2.1	%		2.1	%
Total loans, excluding yield adjustments		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Asset quality:
Nonperforming assets:
Accruing loans - 90 days and over past due	$	5		$	12		$	19		$	15		$	22
Nonaccrual loans		36,691			35,384			21,935			21,766			20,248
Total nonperforming loans		36,696			35,396			21,954			21,781			20,270
Other real estate owned		178			178			178			-			-
Total nonperforming assets	$	36,874		$	35,574		$	22,132		$	21,781		$	20,270
Nonperforming loans (% total loans)		0.82	%		0.78	%		0.49	%		0.47	%		0.43	%
Nonperforming assets (% total assets)		0.55	%		0.53	%		0.33	%		0.33	%		0.31	%
Allowance for loan losses (ALLL):
ALLL to total loans		0.82	%		0.81	%		0.68	%		0.70	%		0.70	%
ALLL to nonperforming loans		101.72	%		105.07	%		140.92	%		148.90	%		164.15	%
Net charge offs	$	38		$	16		$	30		$	60		$	495
Average net charge off rate (annualized)		0.00	%		0.00	%		0.00	%		0.01	%		0.04	%
	At
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Supplemental Balance Sheet Highlights	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in Thousands, Unaudited)	2020			2020			2019			2019			2019
Funding by type:
Deposits:
Non-interest-bearing deposits	$	419,138		$	321,824		$	312,098		$	322,846		$	309,063
Interest-bearing demand		1,264,151			1,134,420			1,060,434			931,188			843,432
Savings		906,597			848,950			829,321			800,514			790,658
Certificates of deposit		1,840,396			1,948,060			1,986,969			2,142,702			2,204,457
Interest-bearing deposits		4,011,144			3,931,430			3,876,724			3,874,404			3,838,547
Total deposits		4,430,282			4,253,254			4,188,822			4,197,250			4,147,610
Borrowings:
Federal Home Loan Bank advances		1,167,429			1,177,319			1,253,958			1,273,618			1,283,211
Overnight borrowings		-			200,000			15,000			-			30,000
Depositor sweep accounts		5,736			6,706			6,091			7,500			8,771
Total borrowings		1,173,165			1,384,025			1,275,049			1,281,118			1,321,982
Total funding	$	5,603,447		$	5,637,279		$	5,463,871		$	5,478,368		$	5,469,592
Loans as a % of deposits		101.2	%		106.7	%		106.7	%		109.2	%		112.3	%
Deposits as a % of total funding		79.1	%		75.4	%		76.7	%		76.6	%		75.8	%
Borrowings as a % of total funding		20.9	%		24.6	%		23.3	%		23.4	%		24.2	%
Funding by source:
Retail funding:
Non-interest-bearing deposits	$	419,138		$	321,824		$	312,098		$	322,846		$	309,063
Interest-bearing demand		1,264,151			1,134,420			1,060,434			931,188			843,432
Savings		906,597			848,950			829,321			800,514			790,658
Certificates of deposit		1,773,257			1,833,081			1,876,280			1,916,132			1,902,542
Total retail deposits		4,363,143			4,138,275			4,078,133			3,970,680			3,845,695
Depositor sweep accounts		5,736			6,706			6,091			7,500			8,771
Total retail funding		4,368,879			4,144,981			4,084,224			3,978,180			3,854,466
Wholesale funding:
Certificates of deposit (listing service)	$	35,760		$	33,608		$	42,119		$	57,534		$	66,110
Certificates of deposit (brokered)		31,379			81,371			68,570			169,036			235,805
Total wholesale deposits		67,139			114,979			110,689			226,570			301,915
FHLB advances		1,167,429			1,177,319			1,253,958			1,273,618			1,283,211
Overnight borrowings		-			200,000			15,000			-			30,000
Total wholesale funding		1,234,568			1,492,298			1,379,647			1,500,188			1,615,126
Total funding	$	5,603,447		$	5,637,279		$	5,463,871		$	5,478,368		$	5,469,592
Retail funding as a % of total funding		78.0	%		73.5	%		74.7	%		72.6	%		70.5	%
Wholesale funding as a % of total funding		22.0	%		26.5	%		25.3	%		27.4	%		29.5	%
Summary Income Statement	For the three months ended
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(Dollars and Shares in Thousands,	June 30,			March 31,			December 31,			September 30,			June 30,
Except Per Share Data, Unaudited)	2020			2020			2019			2019			2019
Interest income
Loans	$	46,192		$	46,603		$	45,608		$	48,600		$	47,818
Taxable investment securities		9,769			10,526			9,698			9,328			9,772
Tax-exempt investment securities		487			547			666			693			700
Other interest-earning assets		903			1,100			1,210			1,278			1,158
Total interest income		57,351			58,776			57,182			59,899			59,448
Interest expense
Deposits		12,439			14,768			15,590			16,055			15,131
Borrowings		4,462			6,398			6,985			7,157			7,171
Total interest expense		16,901			21,166			22,575			23,212			22,302
Net interest income		40,450			37,610			34,607			36,687			37,146
Provision for (reversal of) loan losses		174			6,270			(1,465	)		(782	)		664
Net interest income after provision for (reversal of)<br><br><br>loan losses		40,276			31,340			36,072			37,469			36,482
Non-interest income
Fees and service charges		1,696			1,338			2,145			1,468			1,340
Gain (loss) on sale and call of securities		19			2,234			11			(14	)		(141	)
Gain on sale of loans		1,348			565			668			605			196
(Loss) gain on sale and write down of other real estate<br><br><br>owned		-			-			(28	)		-			9
Income from bank owned life insurance		1,537			1,532			1,576			1,580			1,586
Electronic banking fees and charges		325			309			293			318			270
Miscellaneous		77			223			(111	)		5			128
Total non-interest income		5,002			6,201			4,554			3,962			3,388
Non-interest expense
Salaries and employee benefits		15,527			15,537			15,174			15,777			16,338
Net occupancy expense of premises		2,688			2,685			3,082			2,969			2,744
Equipment and systems		2,948			2,672			3,046			3,089			2,917
Advertising and marketing		751			612			890			535			948
Federal deposit insurance premium		286			-			-			-			438
Directors' compensation		769			771			769			770			770
Merger-related expenses		447			285			219			-			-
Debt extinguishment expenses		-			2,156			-			-			-
Miscellaneous		3,475			3,344			3,247			3,104			4,590
Total non-interest expense		26,891			28,062			26,427			26,244			28,745
Income before income taxes		18,387			9,479			14,199			15,187			11,125
Income taxes		4,698			225			3,547			3,817			2,314
Net income	$	13,689		$	9,254		$	10,652		$	11,370		$	8,811
Net income per common share (EPS)
Basic	$	0.17		$	0.11		$	0.13		$	0.13		$	0.10
Diluted	$	0.17		$	0.11		$	0.13		$	0.13		$	0.10
Dividends declared^(1)^
Cash dividends declared per common share	$	0.08		$	0.08		$	0.07		$	0.06		$	0.06
Cash dividends declared	$	6,449		$	6,479		$	5,760		$	5,045		$	5,204
Dividend payout ratio		47.1	%		70.0	%		54.1	%		44.4	%		59.1	%
Weighted average number of  common<br><br><br>shares outstanding
Basic		80,678			81,339			82,831			84,756			87,090
Diluted		80,680			81,358			82,876			84,793			87,132
	For the three months ended
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Average Balance Sheet Data	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in Thousands, Unaudited)	2020			2020			2019			2019			2019
Assets
Interest-earning assets:
Loans receivable, including loans held for sale	$	4,567,229		$	4,503,996		$	4,547,126		$	4,656,192		$	4,648,362
Taxable investment securities		1,369,014			1,406,973			1,244,475			1,147,698			1,184,401
Tax-exempt investment securities		89,263			101,771			125,187			129,339			132,110
Other interest-earning assets		141,964			104,241			117,811			125,114			98,374
Total interest-earning assets		6,167,470			6,116,981			6,034,599			6,058,343			6,063,247
Non-interest-earning assets		605,876			598,335			590,746			585,826			572,218
Total assets	$	6,773,346		$	6,715,316		$	6,625,345		$	6,644,169		$	6,635,465
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	1,189,044		$	1,112,080		$	982,163		$	883,843		$	815,624
Savings		876,580			838,501			813,626			799,181			780,558
Certificates of deposit		1,879,039			2,004,785			2,063,066			2,179,333			2,229,723
Total interest-bearing deposits		3,944,663			3,955,366			3,858,855			3,862,357			3,825,905
Borrowings:
Federal Home Loan Bank advances		1,202,522			1,208,627			1,255,597			1,277,145			1,284,427
Other borrowings		96,770			87,072			34,733			10,012			29,439
Total borrowings		1,299,292			1,295,699			1,290,330			1,287,157			1,313,866
Total interest-bearing liabilities		5,243,955			5,251,065			5,149,185			5,149,514			5,139,771
Non-interest-bearing liabilities:
Non-interest-bearing deposits		380,067			317,530			320,161			320,641			311,648
Other non-interest-bearing liabilities		72,007			55,456			53,479			60,078			39,294
Total non-interest-bearing liabilities		452,074			372,986			373,640			380,719			350,942
Total liabilities		5,696,029			5,624,051			5,522,825			5,530,233			5,490,713
Stockholders' equity		1,077,317			1,091,265			1,102,520			1,113,936			1,144,752
Total liabilities and stockholders' equity	$	6,773,346		$	6,715,316		$	6,625,345		$	6,644,169		$	6,635,465
Average interest-earning assets to average<br><br><br>interest-bearing liabilities		117.61	%		116.49	%		117.20	%		117.65	%		117.97	%
	For the three months ended
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	June 30,			March 31,			December 31,			September 30,			June 30,
Performance Ratio Highlights	2020			2020			2019			2019			2019
Average yield on interest-earning assets:
Loans receivable, including loans held for sale		4.05	%		4.14	%		4.01	%		4.18	%		4.11	%
Taxable investment securities		2.85	%		2.99	%		3.12	%		3.25	%		3.30	%
Tax-exempt investment securities ^(1)^		2.18	%		2.15	%		2.13	%		2.14	%		2.12	%
Other interest-earning assets		2.54	%		4.22	%		4.11	%		4.09	%		4.71	%
Total interest-earning assets		3.72	%		3.84	%		3.79	%		3.95	%		3.92	%
Average cost of interest-bearing liabilities:
Deposits:
Interest-bearing demand		0.72	%		1.17	%		1.29	%		1.30	%		1.19	%
Savings		0.81	%		0.85	%		0.81	%		0.77	%		0.68	%
Certificates of deposit		1.82	%		1.94	%		2.09	%		2.14	%		2.04	%
Total interest-bearing deposits		1.26	%		1.49	%		1.62	%		1.66	%		1.58	%
Borrowings:
Federal Home Loan Bank advances		1.47	%		2.03	%		2.19	%		2.24	%		2.21	%
Other borrowings		0.13	%		1.17	%		1.36	%		0.66	%		0.99	%
Total borrowings		1.37	%		1.98	%		2.17	%		2.22	%		2.18	%
Total interest-bearing liabilities		1.29	%		1.61	%		1.75	%		1.80	%		1.74	%
Interest rate spread^(2)^		2.43	%		2.23	%		2.04	%		2.15	%		2.18	%
Net interest margin^(3)^		2.62	%		2.46	%		2.29	%		2.42	%		2.45	%
Non-interest income to average assets<br><br><br>(annualized)		0.30	%		0.37	%		0.27	%		0.24	%		0.20	%
Non-interest expense to average assets<br><br><br>(annualized)		1.59	%		1.67	%		1.60	%		1.58	%		1.73	%
Efficiency ratio^(4)^		59.16	%		64.05	%		67.48	%		64.56	%		70.91	%
Return on average assets (annualized)		0.81	%		0.55	%		0.64	%		0.68	%		0.53	%
Return on average equity (annualized)		5.08	%		3.39	%		3.86	%		4.08	%		3.08	%
Return on average tangible equity (annualized) ^(5)^		6.35	%		4.23	%		4.80	%		5.06	%		3.80	%
(1)	The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
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(2)	Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
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(3)	Net interest income divided by average interest-earning assets.
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(4)	Non-interest expense divided by the sum of net interest income and non-interest income.
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(5)	Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.
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This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures provide additional information which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is included below. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.

Reconciliation of GAAP to Non-GAAP	For the three months ended
(Dollars in Thousands,	June 30,			March 31,			December 31,			September 30,			June 30,
Except Per Share Data, Unaudited)	2020			2020			2019			2019			2019
Adjusted net income:
Net income (GAAP)	$	13,689		$	9,254		$	10,652		$	11,370		$	8,811
Non-routine transactions - net of tax:
Merger-related expenses		426			269			183			-			-
Branch consolidation expenses		-			-			274			475			1,216
Net effect of wholesale restructuring transaction		-			(55	)		-			-			-
Reversal of income tax valuation allowance		-			(591	)		-			-			-
Tax benefit arising from adoption of the CARES<br><br><br>Act provisions		-			(1,624	)		-			-			-
Net income (non-GAAP)	$	14,115		$	7,253		$	11,109		$	11,845		$	10,027
Calculation of pre-tax, pre-provision income:
Net income (GAAP)	$	13,689		$	9,254		$	10,652		$	11,370		$	8,811
Adjustments to net income (GAAP):
Provision for income taxes		4,698			225			3,547			3,817			2,314
Provision for (reversal of) loan losses		174			6,270			(1,465	)		(782	)		664
Pre-tax, pre-provision income (non-GAAP)	$	18,561		$	15,749		$	12,734		$	14,405		$	11,789
Adjusted earnings per share:
Weighted average common shares - basic		80,678			81,339			82,831			84,756			87,090
Weighted average common shares - diluted		80,680			81,358			82,876			84,793			87,132
Earnings per share - basic (GAAP)	$	0.17		$	0.11		$	0.13		$	0.13		$	0.10
Earnings per share - diluted (GAAP)	$	0.17		$	0.11		$	0.13		$	0.13		$	0.10
Adjusted earnings per share - basic (non-GAAP)	$	0.17		$	0.09		$	0.13		$	0.14		$	0.11
Adjusted earnings per share - diluted (non-GAAP)	$	0.17		$	0.09		$	0.13		$	0.14		$	0.11
Adjusted return on average assets:
Total average assets	$	6,773,346		$	6,715,316		$	6,625,345		$	6,644,169		$	6,635,465
Return on average assets (GAAP)		0.81	%		0.55	%		0.64	%		0.68	%		0.53	%
Adjusted return on average assets (non-GAAP)		0.83	%		0.43	%		0.67	%		0.71	%		0.60	%
Adjusted return on average equity:
Total average equity	$	1,077,317		$	1,091,265		$	1,102,520		$	1,113,936		$	1,144,752
Return on average equity (GAAP)		5.08	%		3.39	%		3.86	%		4.08	%		3.08	%
Adjusted return on average equity (non-GAAP)		5.24	%		2.66	%		4.03	%		4.25	%		3.50	%
Adjusted return on average tangible equity:
Total average equity	$	1,077,317		$	1,091,265		$	1,102,520		$	1,113,936		$	1,144,752
Less: average goodwill		(210,895	)		(210,895	)		(210,895	)		(210,895	)		(210,895	)
Less: average other intangible assets		(4,124	)		(4,408	)		(4,711	)		(5,006	)		(5,313	)
	$	862,298		$	875,962		$	886,914		$	898,035		$	928,544
Return on average tangible equity (non-GAAP)		6.35	%		4.23	%		4.80	%		5.06	%		3.80	%
Adjusted return on average tangible equity<br><br><br>(non-GAAP)		6.55	%		3.31	%		5.01	%		5.28	%		4.32	%
Reconciliation of GAAP to Non-GAAP	For the year ended
---	---	---	---	---	---	---
(Dollars in Thousands,	June 30,			June 30,
Except Per Share Data, Unaudited)	2020			2019
Adjusted net income:
Net income (GAAP)	$	44,965		$	42,142
Non-routine transactions - net of tax:					-
Merger-related expenses		878			-
Branch consolidation expenses		749			1,216
Net effect of wholesale restructuring transaction		(55	)		-
Reversal of income tax valuation allowance		(591	)		-
Tax benefit arising from adoption of the CARES<br><br><br>Act provisions		(1,624	)		-
Net income (non-GAAP)	$	44,322		$	43,358
Calculation of pre-tax, pre-provision income:
Net income (GAAP)	$	44,965		$	42,142
Adjustments to net income (GAAP):
Provision for income taxes		12,287			13,927
Provision for (reversal of) loan losses		4,197			3,556
Pre-tax, pre-provision income	$	61,449		$	59,625
Adjusted earnings per share:
Weighted average common shares - basic		82,409			91,054
Weighted average common shares - diluted		82,430			91,100
Earnings per share - basic (GAAP)	$	0.55		$	0.46
Earnings per share - diluted (GAAP)	$	0.55		$	0.46
Adjusted earnings per share - basic (non-GAAP)	$	0.54		$	0.47
Adjusted earnings per share - diluted (non-GAAP)	$	0.54		$	0.47
Adjusted return on average assets:
Total average assets	$	6,689,245		$	6,659,693
Return on average assets (GAAP)		0.67	%		0.63	%
Adjusted return on average assets (non-GAAP)		0.66	%		0.65	%
Adjusted return on average equity:
Total average equity	$	1,096,325		$	1,196,622
Return on average equity (GAAP)		4.10	%		3.52	%
Adjusted return on average equity (non-GAAP)		4.04	%		3.62	%
Adjusted return on average tangible equity:
Total average equity	$	1,096,325		$	1,196,622
Less: average goodwill		(210,895	)		(210,895	)
Less: average other intangible assets		(4,564	)		(5,758	)
	$	880,866		$	979,969
Return on average tangible equity (non-GAAP)		5.10	%		4.30	%
Adjusted return on average tangible equity (non-GAAP)		5.03	%		4.42	%

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