FAIRFIELD, N.J., July 30, 2018 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ:KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), today reported net income for the quarter ended June 30, 2018 of $7.7 million, or $0.08 per basic and diluted share. The results represent an increase of $2.3 million compared to net income of $5.4 million, or $0.07 per basic and diluted share, for the quarter ended March 31, 2018.

Net income for the quarters ended June 30, 2018 and March 31, 2018 reflected merger-related expenses recognized in conjunction with the Company’s acquisition of Clifton Bancorp, Inc. (“CSBK”), the holding company for Clifton Savings Bank (“Clifton”), which closed on April 2, 2018. Excluding the effects of merger-related expenses on an after-tax basis, the Company’s net income would have been $11.4 million or $0.12 per basic and diluted share for the quarter ended June 30, 2018 compared to $5.8 million or $0.08 per basic and diluted share for the quarter ended March 31, 2018.

For the fiscal year ended June 30, 2018, the Company reported net income of $19.6 million, or $0.24 per basic and diluted share. The results represent an increase of $993,000 compared to net income of $18.6 million, or $0.22 per basic and diluted share, for the fiscal year ended June 30, 2017.

As above, net income for the year ended June 30, 2018 included $6.7 million in merger-related expenses associated with the Company’s acquisition of CSBK. The Company estimates that such expenses adversely impacted net income by approximately $5.1 million for the year ended June 30, 2018.

Net income for the year ended June 30, 2018 also reflected the effects of federal income tax reform that was codified through the passage of the Tax Cuts and Jobs Act (the “Act”) during the quarter ended December 31, 2017. The Act permanently reduced the Company’s federal income tax rate from 35% to 21% while also including other provisions that altered the deductibility of certain recurring expenses recognized by the Company. The provisions of the Act positively impacted the Company’s earnings during the second half of fiscal 2018. However, the passage of the Act resulted in a $3.5 million net reduction in the carrying value of the Company’s deferred income tax assets and liabilities with an equal and offsetting charge to income tax expense during the quarter ended December 31, 2017.

The net charge of $3.5 million attributable to the changes in the carrying value of deferred income tax items was partially offset by a $769,000 reduction in current-year income tax expense attributable to the noted reduction in the Company’s income tax rate. For the “transition” year ended June 30, 2018, the Company’s statutory federal income tax rate was reduced to 28%, reflecting effective statutory rates of 35% and 21% for the first and second halves of the year, respectively. For the fiscal year ending June 30, 2019 and thereafter, the Company’s statutory federal income tax rate will be reduced to 21%.

Acquisition Highlights

The increase in the Company’s net income for the quarter ended June 30, 2018 exemplified the beneficial impact of the $1.6 billion, or 33.4%, of growth in total assets that resulted from the Company’s acquisition of CSBK. The growth arising from the acquisition reflected:

-- Loans acquired with aggregate fair values totaling $1.12 billion primarily comprising residential and commercial mortgage loans. Acquired loans included $5.4 million of nonperforming loans whose fair values at acquisition reflected negligible levels of impairment; -- Deposits assumed with aggregate fair values totaling $949.8 million housed across a retail banking network consisting of 12 branches located in New Jersey’s Passaic, Bergen, Hudson and Essex counties; -- Securities acquired with aggregate fair values of $326.9 million primarily comprising U.S. agency and other high-quality debt securities; -- Borrowings assumed with fair values of $414.1 million comprised entirely of outstanding advances from the Federal Home Loan Bank of New York; -- Merger consideration primarily comprising 25.4 million shares of the Company’s common stock issued to CSBK stockholders reflecting an exchange of 1.191 of Company shares for each outstanding share of CSBK common stock at the time of closing as well as cash distributed to CSBK stockholders and eligible option holders for the settlement of fractional shares and the value of outstanding options to purchase CSBK stock, respectively.

As required by applicable accounting standards, the Company recorded purchase accounting adjustments to the carrying value of all assets acquired and liabilities assumed from CSBK to reflect their fair values at the time of acquisition. With specific regard to the interest-earning assets acquired and interest-bearing liabilities assumed, such adjustments generally accrete or amortize into interest income and interest expense, respectively, on a level-yield/cost basis over their estimated remaining lives. As a result, the “post-acquisition” yield or cost recognized by the Company on the assets and liabilities acquired generally reflect the comparable market interest rates for such instruments at the time of their acquisition.

The CSBK acquisition was the primary factor contributing to the reported increase in net income for the quarter ended June 30, 2018 compared to the prior quarter ended March 31, 2018. As discussed in greater detail below, the increase in net income between comparative periods included the following highlights:

-- Net interest income increased by $13.5 million, or 50.0%, to $40.6 million from $27.1 million; -- Net interest margin increased by 31 basis points to 2.72% from 2.41%; -- Excluding the impact of non-recurring, merger-related expenses recognized during both comparative periods: o Non-interest expense increased by $4.0 million, or 17.9%, to $26.1 million from $22.1 million; o The non-interest expense ratio decreased by 23 basis points to 1.59% from 1.82%. o The efficiency ratio decreased by 13.0% to 59.4% from 72.4%; o Return on average on average assets ratio increased by 22 basis points to 0.69% from 0.47%.

Overview of Financial Performance

In addition to completing the CSBK acquisition, the Company continued to execute other strategies throughout fiscal 2018 intended to organically grow and diversify its balance sheet while increasing its core earnings and prudently managing capital to promote long-term growth in shareholder value. Together, the Company’s organic growth and acquisition strategies combined to result in several balance sheet growth and diversification achievements that are included among the following highlights for the quarter and year ended June 30, 2018:

-- The Company’s aggregate loan portfolio, excluding loans held for sale and the allowance for loan losses, increased by $1.15 billion to $4.50 billion, or 68.4% of total assets, at June 30, 2018 from $3.35 billion, or 67.9% of total assets, at March 31, 2018. For the year ended June 30, 2018, the Company’s aggregate loan portfolio increased by $1.26 billion, or 38.7%, from $3.25 billion, or 67.4% of total assets, at June 30, 2017.

-- The outstanding balance of the Company’s commercial mortgage loans increased by $476.6 million to $3.06 billion at June 30, 2018 from $2.58 billion at March 31, 2018. For the year ended June 30, 2018, commercial mortgage loans grew $563.9 million from $2.50 billion at June 30, 2017. The organic growth in commercial mortgage loans during the quarter and year ended June 30, 2018 continued to reflect the impact of an accelerated rate of loan prepayments compared to prior years that partially offset the increase in loans arising from loan origination volume. In addition to the growth arising from the CSBK acquisition, the Company continues to execute organic strategies designed to increase the origination volume of commercial mortgage loans to compensate for the challenges presented by the noted increase in prepayments. Toward that end, the Company’s pipeline of commercial mortgage loans in the underwriting process increased during the quarter ended June 30, 2018.

-- The outstanding balance of residential mortgage loans held in the portfolio, including home equity loans and lines of credit, increased by $744.9 million to $1.39 billion at June 30, 2018 from $643.3 million at March 31, 2018. For the year ended June 30, 2018, residential mortgage loans grew $738.1 million from $650.1 million at June 30, 2017. The increase in residential mortgage loans during the quarter and year ended June 30, 2018 primarily reflected the impact of the CSBK acquisition as the Company continued emphasizing its mortgage banking strategy through which most residential mortgage loans originated are sold into the secondary market.

-- Asset quality remained strong throughout the quarter and year ended June 30, 2018. The outstanding balance of nonperforming loans increased by $2.6 million to $16.9 million, or 0.37% of total loans, at June 30, 2018 from $14.2 million, or 0.42% of total loans, at March 31, 2018. For the year ended June 30, 2018, nonperforming loans decreased by $2.0 million from $18.9 million, or 0.58% of total loans, at June 30, 2017. As noted earlier, the increase in the outstanding balance of nonperforming loans at June 30, 2018 included a nominal balance of loans acquired from CSBK which was partially offset by a net decrease in the remaining balance of nonperforming loans during the reported periods.

-- The allowance for loan losses increased to $30.9 million at June 30, 2018 from $30.2 million at March 31, 2018, resulting in a “total loan coverage ratio”, representing the balance of the allowance for loan losses as a percentage of total loans, of 0.68% and 0.90%, respectively. For the year ended June 30, 2018, the allowance for loan losses increased by $1.6 million from $29.3 million, or 0.90% of total loans, at June 30, 2017. The decrease in the “total loan coverage ratio” for both the quarter and year ended June 30, 2018 largely reflects the impact of the CSBK acquisition and the related accounting standards which generally preclude acquired loan balances from being considered in the balance of the allowance for loan losses at the time of their acquisition. In lieu thereof, an accretable “credit mark” is established as a component of the purchase accounting fair value adjustments which directly reduces the carrying value of the acquired loan portfolio.

-- The Company’s securities portfolio increased by $170.7 million to $1.31 billion, or 20.0% of total assets, at June 30, 2018 from $1.14 billion, or 23.2% of total assets, at March 31, 2018. For the year ended June 30, 2018, the securities portfolio increased by $207.7 million, or 18.8%, from $1.11 billion, or 23.0% of total assets at June 30, 2017. The increase in the securities portfolio for the quarter and year ended June 30, 2018 largely reflected the impact of securities acquired from CSBK. The Company sold a significant portion of the securities originally acquired from CSBK with a portion of the sale proceeds reinvested into shorter-duration, higher-yielding securities and the remainder reinvested into loans.

-- The balance of cash and cash equivalents increased by $90.6 million to $128.9 million at June 30, 2018 from $38.3 million at March 31, 2018. For the year ended June 30, 2018, cash and cash equivalents increased by $50.6 million from $78.2 million at June 30, 2017. The increase for the quarter and year ended June 30, 2018 partly reflected day-to-day operating fluctuations in the Company’s balance of short-term liquidity coupled with the acquisition of cash and cash equivalents balances acquired from CSBK. Notwithstanding the increase in their overall balance, the Company generally endeavors to limit the balance of cash and cash equivalents held to the minimum levels needed to meet its short-term funding obligations and overall liquidity risk management objectives. As such, the excess balance of cash and cash equivalents held at June 30, 2018 is generally expected to be redeployed into higher-yielding assets during the quarter ending September 30, 2018.

-- The Company’s total deposits increased by $1.01 billion to $4.07 billion at June 30, 2018, from $3.07 billion at March 31, 2018. For the year ended June 30, 2018, total deposits increased by $1.14 billion from $2.93 billion at June 30, 2017. The increase in deposits for the quarter and year ended June 30, 2018 largely reflected the impact of deposits acquired from CSBK while also reflecting the continuing effects of product, pricing and marketing strategies implemented during fiscal 2018.

-- Total borrowings increased by $346.6 million to $1.20 billion at June 30, 2018, from $852.0 million at March 31, 2018. For the year ended June 30, 2018, total borrowings increased by $392.4 million from $806.2 million at June 30, 2017. The increase in borrowings for the quarter and year ended June 30, 2018 partly reflected the impact of borrowings acquired from CSBK. The increase attributable to the CSBK acquisition was partly offset by the repayment of maturing FHLB term and overnight advances coupled with changes in depositor sweep account balances representing normal day-to-day fluctuations in such balances.

-- The Company’s stockholders’ equity increased by $277.5 million to $1.27 billion at June 30, 2018 from $991.2 million at March 31, 2018. The increase in stockholders’ equity for the quarter ended June 30, 2018 partly reflected $330.7 million of capital stock issued by the Company in conjunction with the acquisition of CSBK. The increase also reflected net income earned during the period coupled with a decrease in unearned ESOP shares and a net increase in accumulated other comprehensive income primarily reflecting changes in the fair value of the Company’s derivatives and available for sale securities portfolios. The noted increases in stockholders’ equity were partially offset by the Company’s repurchase of 4.5 million shares of its capital stock during the quarter ended June 30, 2018 at a total cost of $62.5 million and at an average cost of $13.85 per share, coupled with cash dividends paid to stockholders of $3.9 million during the period. For the year ended June 30, 2018, stockholders’ equity increased by $211.6 million from $1.06 billion at June 30, 2017. The net increase for the year was generally attributable to the cumulative effects of the same factors that contributed to the net change in stockholders’ equity for the quarter ended June 30, 2018.

-- At June 30, 2018, the Company’s total consolidated equity to assets ratio was 19.28% while the Bank’s total consolidated equity to assets ratio was 18.19%. The Company’s and Bank’s regulatory capital ratios at June 30, 2018 were well in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.

As highlighted below, the acquisition of CSBK coupled with the organic balance sheet growth, reinvestment and reallocation achievements helped to offset the adverse effects of an increase in market interest rates and a flattening yield curve on the Company’s net interest margin:

-- The Company’s net interest income increased by $13.5 million to $40.6 million for the quarter ended June 30, 2018 from $27.1 million for the quarter ended March 31, 2018. For the year ended June 30, 2018, net interest income increased by $18.7 million to $121.3 million from $102.6 million for the year ended June 30, 2017.

-- The Company’s net interest margin increased 31 basis points to 2.72% for the quarter ended June 30, 2018 from 2.41% for the quarter ended March 31, 2018 while the net interest rate spread increased by 33 basis points to 2.48% from 2.15% for those same comparative periods, respectively. For the year ended June 30, 2018, the net interest margin increased by nine basis points to 2.50% from 2.41% for the year ended June 30, 2017 while the net interest rate spread increased by 11 basis points to 2.25% from 2.14% for those same comparative periods, respectively.

The level of the Company’s charge offs and provision for loan losses continued to reflect strong asset quality metrics:

-- The Company recognized net charge offs totaling approximately $101,000 for the quarter ended June 30, 2018, reflecting an annualized net charge off rate of 0.01% on the average balance of total loans for the period. By comparison, the Company’s net charge offs totaled approximately $241,000 for the quarter ended March 31, 2018, reflecting an annualized net charge off rate of 0.03%. For the year ended June 30, 2018, the Company recognized net charge offs totaling $1.1 million reflecting an annualized charge off rate of 0.03% on the average balance of total loans for fiscal 2018. By comparison, the Company’s net charge offs totaled approximately $324,000 for the year ended June 30, 2017 reflecting an annualized charge off rate of 0.01% on the average balance of total loans for fiscal 2017.

-- The Company’s provision for loan losses increased by $294,000 to $717,000 for the quarter ended June 30, 2018 compared to $423,000 for the quarter ended March 31, 2018. The increase in the provision largely reflected the net effect of updates to historical and environmental loss factors that increased the level of provision expense between comparative periods. The increase in the provision expense was partially offset by a decrease in net charge offs between the two comparative periods, as discussed above, as well as the effects of comparatively lower growth during the quarter ended June 30, 2018 in the performing portion of the non-acquired loan portfolio that is collectively evaluated for impairment using historical and environmental loss factors.

-- For the year ended June 30, 2018, the provision for loan losses decreased by $2.7 million to $2.7 million from $5.4 million for the year ended June 30, 2017. The decrease in the provision was partly attributable to the effects of comparatively lower growth during fiscal 2018 in the performing portion of the non-acquired loan portfolio that is collectively evaluated for impairment using historical and environmental loss factors while also reflecting the effects of updates to such factors between comparative periods. This decrease was partially offset by an increase in net charge offs recognized between the two comparative periods, as discussed above.

The Company’s mortgage banking and SBA lending strategies continued to supplement and diversify its sources of non-interest income while the benefits of its commercial mortgage lending strategies were also reflected in non-interest income:

-- Aggregate loan sale gains totaled $127,000 for the quarter ended June 30, 2018 compared to $346,000 for the quarter ended March 31, 2018 while such gains totaled $1.0 million and $1.5 million for the years ended June 30, 2018 and June 30, 2017, respectively. The decrease in gains recognized was partly attributable to an overall increase in market interest rates that has reduced rate refinancing incentives for residential mortgage borrowers. A decrease in SBA sale gains between both sets of comparative periods generally reflected fluctuations in loan origination volume and timing that generally characterizes the Company’s SBA lending activities.

-- Fees and service charges totaled $1.2 million for the quarter ended June 30, 2018 compared to $1.5 million for the quarter ended March 31, 2018. For the year ended June 30, 2018, fees and service charges increased to $5.4 million from $3.3 million for the year ended June 30, 2017. The increased level of fees and service charges for the year ended June 30, 2018 was largely attributable to increased recognition of commercial loan prepayment fees while their inherent variability was the largest contributor to the decrease in fees and charges between the linked quarters ended June 30, 2018 and March 31, 2018.

The Company continues to evaluate and implement tactics and strategies designed to improve operating practices, policies and procedures while making more efficient and effective use of its supporting infrastructure, including human resources, facilities and information technology systems.

-- The Company’s ratio of non-interest expense to average assets totaled 1.90% for the quarter ended June 30, 2018 compared to 1.85% for the prior quarter ended March 31, 2018. For those same comparative periods, the Company’s operating efficiency ratio decreased to 71.1% from 73.7%, respectively. As noted earlier, excluding the impact of merger-related expenses, the Company’s non-interest expense to average assets ratios would have been 1.59% and 1.82% for the quarters ended June 30, 2018 and March 31, 2018, respectively, while the Company’s operating efficiency ratios would have been 59.4% and 72.4% for those same periods, respectively. For the year ended June 30, 2018, the Company’s ratio of non-interest expense to average assets totaled 1.86% compared to 1.76% for the year ended June 30, 2017. For those same comparative periods, the Company’s operating efficiency ratio increased to 72.7% from 71.2%, respectively. For the year ended June 30, 2018, the Company’s ratio of non-interest expense to average assets and operating efficiency ratio included the impacts arising from merger-related expenses, as discussed above.

Collectively, the factors noted above contributed to the increases in net income for the quarter and year ended June 30, 2018 noted earlier. The increases in net income had a favorable impact on the Company’s earnings-based performance ratios as highlighted below:

-- The Company’s return on average assets for the quarter ended June 30, 2018 totaled 0.47% compared to 0.44% for the prior quarter ended March 31, 2018. Excluding the impacts on net income arising from the non-recurring effects of merger-related expenses, as discussed above, the Company’s return on average assets would have been 0.70% and 0.47% for the quarters ended June 30, 2018 and March 31, 2018, respectively. For the year ended June 30, 2018, the return on average assets totaled 0.37% compared to 0.40% for the prior year ended June 30, 2017. The Company’s return on average assets for the year ended June 30, 2018 reflected the impacts arising from federal income tax reform and merger-related expenses, as discussed above.

The Company continued to execute key capital management strategies during the quarter ended June 30, 2018 to further support shareholder value:

-- The Company increased its regular quarterly cash dividend payable to stockholders by $0.01 from $0.03 per share declared and paid during the quarters ended September 30, 2017, December 31, 2017 and March 31, 2018, to $0.04 per share declared and paid during the quarter ended June 30, 2018. The Company continues to evaluate its dividend policies and practices in relation to its capital management and shareholder value objectives.

-- In April 2018, the Company completed the repurchase of its shares of capital stock under its second share repurchase program announced in May 2017 through which it authorized the repurchase of 8,559,084 shares, or 10%, of the Company’s outstanding shares. The shares associated with this second program were repurchased at a total cost of $122.0 million and at an average cost of $14.25 per share. -- In May 2018, the Company announced a third share repurchase program through which it authorized the repurchase of 10,238,557 shares, or 10%, of the Company’s outstanding shares. Through June 30, 2018, the Company repurchased a total of 2,695,460 shares, or 26.3% of the shares authorized for repurchase under this third program, at a total cost of $38.4 million and at an average cost of $14.23 per share.

The exhibits that follow this narrative begin with the presentation of the Linked-Quarter Comparative Financial Analysis and Year-to-Year Comparative Financial Analysis. These tabular presentations support the discussion above by presenting the Company’s financial condition and operating results for the quarter and fiscal year ended June 30, 2018 compared to those for the prior linked-quarter ended March 31, 2018 and prior fiscal year ended June 30, 2017, respectively. This analysis is followed by a tabular Five-Quarter Financial Trend Analysis that presents similar financial information, together with other financial highlights and performance metrics, over a consecutive five quarter look-back period that is intended to reflect the Company’s financial performance and strategic achievements over this extended period of time. The exhibits conclude with the presentation of the Reconciliation of GAAP to Non-GAAP financial data included in this news release.

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.

For further information contact:Craig L. Montanaro, President and Chief Executive Officer, orEric B. Heyer, Senior Executive Vice President and Chief Operating OfficerKearny Financial Corp.(973) 244-4500

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) 2018 2018 or Change Pct. --------------------------------------------- - --------- - - --------- - ------------- ------- Assets Cash and cash equivalents $ 128,864 $ 38,283 $ 90,581 236.6 % Securities available for sale 725,085 684,771 40,314 5.9 % Securities held to maturity 589,730 459,380 130,350 28.4 % Loans held-for-sale 863 2,377 (1,514 ) -63.7 % Loans receivable, including yield adjustments 4,501,348 3,351,369 1,149,979 34.3 % Less allowance for loan losses (30,865 ) (30,248 ) (617 ) 2.0 % - --------- - - --------- - - --------- - ----- - Net loans receivable 4,470,483 3,321,121 1,149,362 34.6 % Premises and equipment 56,240 42,856 13,384 31.2 % Federal Home Loan Bank stock 59,004 39,112 19,892 50.9 % Accrued interest receivable 18,510 13,926 4,584 32.9 % Goodwill 210,895 108,591 102,304 94.2 % Bank owned life insurance 249,816 184,981 64,835 35.0 % Deferred income taxes, net 23,754 3,898 19,856 509.4 % Other assets 46,630 34,404 12,226 35.5 % ----- - Total assets $ 6,579,874 $ 4,933,700 $ 1,646,174 33.4 % - --------- - - --------- - - --------- - ----- - Liabilities Deposits $ 4,073,604 $ 3,067,102 $ 1,006,502 32.8 % Borrowings 1,198,646 852,009 346,637 40.7 % Advance payments by borrowers for taxes 18,088 8,969 9,119 101.7 % Other liabilities 20,788 14,419 6,369 44.2 % - --------- - - --------- - - --------- - ----- - Total liabilities 5,311,126 3,942,499 1,368,627 34.7 % Stockholders' Equity Common stock 996 788 208 26.4 % Paid-in capital 922,711 653,045 269,666 41.3 % Retained earnings 359,096 355,270 3,826 1.1 % Unearned ESOP shares (32,590 ) (33,076 ) 486 -1.5 % Accumulated other comprehensive income, net 18,535 15,174 3,361 22.1 % - --------- - - --------- - - --------- - ----- - Total stockholders' equity 1,268,748 991,201 277,547 28.0 % ----- - Total liabilities and stockholders' equity $ 6,579,874 $ 4,933,700 $ 1,646,174 33.4 % - --------- - - --------- - - --------- - ----- - Consolidated capital ratios Equity to assets 19.28 % 20.09 % -0.81 % Tangible equity to tangible assets 16.53 % 18.29 % -1.76 % Share data Outstanding shares 99,626 78,765 20,861 26.5 % Equity per share $ 12.74 $ 12.58 $ 0.16 1.3 % Tangible equity per share(1) $ 10.56 $ 11.20 $ (0.64 ) -5.7 % --------------------------------------------- (1)Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets.

Summary Income Statement For the three months Variance ended --------------------- (Dollars and Shares in Thousands, June 30, March 31, Variance or Change Except Per Share Data, Unaudited) 2018 2018 or Change Pct. ------------------------------------------ - ------ - - ------ - ---------- --------- Interest income Loans $ 46,615 $ 30,728 $ 15,887 51.7 % Taxable investment securities 8,670 6,450 2,220 34.4 % Tax-exempt investment securities 702 652 50 7.7 % Other interest-earning assets 1,275 715 560 78.3 % - ------ - - ------ - - ------ - ------- - Total Interest Income 57,262 38,545 18,717 48.6 % Interest expense Deposits 9,755 7,026 2,729 38.8 % Borrowings 6,916 4,462 2,454 55.0 % - ------ - - ------ - - ------ - ------- - Total interest expense 16,671 11,488 5,183 45.1 % - ------ - - ------ - - ------ - ------- - Net interest income 40,591 27,057 13,534 50.0 % Provision for loan losses 717 423 294 69.5 % - ------ - - ------ - - ------ - ------- - Net interest income after provision for 39,874 26,634 13,240 49.7 % loan losses - ------ - - ------ - - ------ - ------- - Non-interest income Fees and service charges 1,205 1,537 (332 ) -21.6 % Gain (loss) on sale and call of securities 9 (1 ) 10 -1000.0 % Gain on sale of loans 127 346 (219 ) -63.3 % Gain on sale of real estate owned 60 7 53 757.1 % Income from bank owned life insurance 1,604 1,227 377 30.7 % Electronic banking fees and charges 278 243 35 14.4 % Miscellaneous 75 189 (114 ) -60.3 % - ------ - - ------ - - ------ - ------- - Total non-interest income 3,358 3,548 (190 ) -5.4 % Non-interest expense Salaries and employee benefits 15,353 12,888 2,465 19.1 % Net occupancy expense of premises 2,716 2,359 357 15.1 % Equipment and systems 2,776 2,323 453 19.5 % Advertising and marketing 757 745 12 1.6 % Federal deposit insurance premium 463 350 113 32.3 % Directors' compensation 754 689 65 9.4 % Merger-related expenses 5,149 401 4,748 1184.0 % Miscellaneous 3,289 2,788 501 18.0 % - ------ - - ------ - ------- - Total non-interest expense 31,257 22,543 8,714 38.7 % - ------ - - ------ - - ------ - ------- - Income before income taxes 11,975 7,639 4,336 56.8 % Income taxes 4,257 2,262 1,995 88.2 % - ------ - - ------ - - ------ - ------- - Net income $ 7,718 $ 5,377 $ 2,341 43.5 % - ------ - - ------ - - ------ - ------- - Net income per common share (EPS) Basic $ 0.08 $ 0.07 $ 0.01 Diluted $ 0.08 $ 0.07 $ 0.01 Dividends declared Cash dividends declared per common share $ 0.04 $ 0.03 $ 0.01 Cash dividends declared $ 3,892 $ 2,262 $ 1,630 Dividend payout ratio 50.4 % 42.1 % 8.3 % Weighted average number of common shares outstanding Basic 98,046 75,492 22,554 Diluted 98,100 75,539 22,561

Average Balance Sheet Data For the three months ended Variance ----------------------------------------------- --------------------------- (Dollars in Thousands, Unaudited) June 30, March 31, Variance or Change 2018 2018 or Change Pct. ----------------------------------------------- - --------- - - --------- - ------------- ------- Assets Interest-earning assets: Loans receivable, including loans held for sale $ 4,507,336 $ 3,293,664 $ 1,213,672 36.8 % Taxable investment securities 1,192,066 1,003,600 188,466 18.8 % Tax-exempt investment securities 134,683 127,605 7,078 5.5 % Other interest-earning assets 142,591 67,770 74,821 110.4 % - --------- - - --------- - - --------- - ----- - Total interest-earning assets 5,976,676 4,492,639 1,484,037 33.0 % Non-interest-earning assets 586,976 369,299 217,677 58.9 % - --------- - - --------- - - --------- - ----- - Total assets $ 6,563,652 $ 4,861,938 $ 1,701,714 35.0 % - --------- - - --------- - - --------- - ----- - Liabilities and Stockholders' Equity Interest-bearing liabilities: Deposits: Interest-bearing demand $ 1,004,445 $ 870,762 $ 133,683 15.4 % Savings and club 724,430 513,948 210,482 41.0 % Certificates of deposit 1,983,372 1,385,151 598,221 43.2 % - --------- - - --------- - - --------- - ----- - Total interest-bearing deposits 3,712,247 2,769,861 942,386 34.0 % Borrowings: Federal Home Loan Bank Advances 1,179,147 777,721 401,426 51.6 % Other borrowings 34,636 33,529 1,107 3.3 % - --------- - - --------- - - --------- - ----- - Total borrowings 1,213,783 811,250 402,533 49.6 % - --------- - - --------- - - --------- - ----- - Total interest-bearing liabilities 4,926,030 3,581,111 1,344,919 37.6 % Non-interest-bearing liabilities: Non-interest-bearing deposits 305,763 267,152 38,611 14.5 % Other non-interest-bearing liabilities 39,340 24,953 14,387 57.7 % - --------- - - --------- - - --------- - ----- - Total non-interest-bearing liabilities 345,103 292,105 52,998 18.1 % - --------- - - --------- - - --------- - ----- - Total liabilities 5,271,133 3,873,216 1,397,917 36.1 % Stockholders' equity 1,292,519 988,722 303,797 30.7 % ----- - Total liabilities and stockholders' equity $ 6,563,652 $ 4,861,938 $ 1,701,714 35.0 % - --------- - - --------- - - --------- - ----- - Average interest-earning assets to average 121.33 % 125.45 % -4.13 % -3.3 % interest-bearing liabilities

For the three months ended ---------------------- Performance Ratio Highlights June 30, March 31, Variance 2018 2018 or Change ----------------------------------------------- -------- - --------- - --------- Average yield on interest-earning assets: Loans receivable, including loans held for sale 4.14 % 3.73 % 0.41% Taxable investment securities 2.91 % 2.57 % 0.34% Tax-exempt investment securities (1) 2.09 % 2.04 % 0.05% Other interest-earning assets 3.58 % 4.22 % -0.64% -------- - --------- - --------- Total interest-earning assets 3.83 % 3.43 % 0.40% Average cost of interest-bearing liabilities: Deposits: Interest-bearing demand 0.89 % 0.84 % 0.05% Savings and club 0.29 % 0.12 % 0.17% Certificates of deposit 1.41 % 1.46 % -0.05% -------- - --------- - --------- Total interest-bearing deposits 1.05 % 1.01 % 0.04% Borrowings: Federal Home Loan Bank Advances 2.34 % 2.27 % 0.07% Other borrowings 0.34 % 0.56 % -0.22% -------- - --------- - --------- Total borrowings 2.28 % 2.20 % 0.08% -------- - --------- - --------- Total interest-bearing liabilities 1.35 % 1.28 % 0.07% Interest rate spread(2) 2.48 % 2.15 % 0.33% Net interest margin(3) 2.72 % 2.41 % 0.31% Non-interest income to average assets 0.20 % 0.29 % -0.09% (annualized) Non-interest expense to average assets 1.90 % 1.85 % 0.05% (annualized) Efficiency ratio(4) 71.12 % 73.66 % -2.54 Return on average assets (annualized) 0.47 % 0.44 % 0.03% Return on average equity (annualized) 2.39 % 2.18 % 0.21% ----------------------------------------------- (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.

Year-to-Year Comparative Financial Analysis ------------------------------------------------------------------------------------------------ Summary Balance Sheet At Variance --------------------------- (Dollars in Thousands, June 30, June 30, Variance or Change Except Per Share Data, Unaudited) 2018 2017 or Change Pct. --------------------------------------------- - --------- - - --------- - ------------- -------- Assets Cash and cash equivalents $ 128,864 $ 78,237 $ 50,627 64.7 % Securities available for sale 725,085 613,760 111,325 18.1 % Securities held to maturity 589,730 493,321 96,409 19.5 % Loans held-for-sale 863 4,692 (3,829 ) -81.6 % Loans receivable, including yield adjustments 4,501,348 3,245,261 1,256,087 38.7 % Less allowance for loan losses (30,865 ) (29,286 ) (1,579 ) 5.4 % - --------- - - --------- - - --------- - ------ - Net loans receivable 4,470,483 3,215,975 1,254,508 39.0 % Premises and equipment 56,240 39,585 16,655 42.1 % Federal Home Loan Bank stock 59,004 39,958 19,046 47.7 % Accrued interest receivable 18,510 12,493 6,017 48.2 % Goodwill 210,895 108,591 102,304 94.2 % Bank owned life insurance 249,816 181,223 68,593 37.9 % Deferred income taxes, net 23,754 15,454 8,300 53.7 % Other assets 46,630 14,838 31,792 214.3 % ------ - Total assets $ 6,579,874 $ 4,818,127 $ 1,761,747 36.6 % - --------- - - --------- - - --------- - ------ - Liabilities Deposits $ 4,073,604 $ 2,929,745 $ 1,143,859 39.0 % Borrowings 1,198,646 806,228 392,418 48.7 % Advance payments by borrowers for taxes 18,088 8,711 9,377 107.6 % Other liabilities 20,788 16,262 4,526 27.8 % - --------- - - --------- - - --------- - ------ - Total liabilities 5,311,126 3,760,946 1,550,180 41.2 % Stockholders' Equity Common stock $ 996 844 152 18.0 % Paid-in capital 922,711 728,790 193,921 26.6 % Retained earnings 359,096 361,039 (1,943 ) -0.5 % Unearned ESOP shares (32,590 ) (34,536 ) 1,946 -5.6 % Accumulated other comprehensive income, net 18,535 1,044 17,491 1675.4 % - --------- - - --------- - - --------- - ------ - Total stockholders' equity 1,268,748 1,057,181 211,567 20.0 % ------ - Total liabilities and stockholders' equity $ 6,579,874 $ 4,818,127 $ 1,761,747 36.6 % - --------- - - --------- - - --------- - ------ - Consolidated capital ratios Equity to assets 19.28 % 21.94 % -2.66 % Tangible equity to tangible assets 16.53 % 20.14 % -3.61 % Share data Outstanding shares (period end) 99,626 84,351 15,275 18.1 % Equity per share $ 12.74 $ 12.53 $ 0.21 1.7 % Tangible equity per share(1) $ 10.56 $ 11.24 $ (0.68 ) -6.0 % (1)Tangible equity 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) 2018 2017 or Change Pct. ------------------------------------------ - ------- - - ------- - ---------- -------- Interest income Loans $ 138,426 $ 111,181 $ 27,245 24.5 % Taxable investment securities 27,053 23,543 3,510 14.9 % Tax-exempt investment securities 2,616 2,300 316 13.7 % Other interest-earning assets 3,336 2,069 1,267 61.2 % - ------- - - ------- - - ------ - ------ - Total Interest Income 171,431 139,093 32,338 23.2 % Interest expense Deposits 29,649 22,100 7,549 34.2 % Borrowings 20,489 14,419 6,070 42.1 % - ------- - - ------- - - ------ - ------ - Total interest expense 50,138 36,519 13,619 37.3 % - ------- - - ------- - - ------ - ------ - Net interest income 121,293 102,574 18,719 18.2 % Provision for loan losses 2,706 5,381 (2,675 ) -49.7 % - ------- - - ------- - - ------ - ------ - Net interest income after provision for 118,587 97,193 21,394 22.0 % loan losses - ------- - - ------- - - ------ - ------ - Non-interest income Fees and service charges 5,412 3,289 2,123 64.5 % Gain (Loss) on sale and call of securities 8 (1 ) 9 -900.0 % Gain on sale of loans 1,004 1,535 (531 ) -34.6 % Loss on sale of real estate owned (19 ) (106 ) 87 -82.1 % Income from bank owned life insurance 5,362 5,207 155 3.0 % Electronic banking fees and charges 1,101 1,080 21 1.9 % Miscellaneous 395 344 51 14.8 % - ------- - - ------- - - ------ - ------ - Total non-interest income 13,263 11,348 1,915 16.9 % Non-interest expense Salaries and employee benefits 54,034 47,818 6,216 13.0 % Net occupancy expense of premises 9,178 8,018 1,160 14.5 % Equipment and systems 9,482 8,350 1,132 13.6 % Advertising and marketing 2,960 2,626 334 12.7 % Federal deposit insurance premium 1,516 1,334 182 13.6 % Directors' compensation 2,820 1,982 838 42.3 % Merger-related expenses 6,743 - - 0.0 % Miscellaneous 11,117 10,990 127 1.2 % - ------- - - ------- - - ------ - ------ - Total non-interest expense 97,850 81,118 16,732 20.6 % - ------- - - ------- - - ------ - ------ - Income before income taxes 34,000 27,423 6,577 24.0 % Income taxes 14,404 8,820 5,584 63.3 % - ------- - - ------- - - ------ - ------ - Net income $ 19,596 $ 18,603 $ 993 5.3 % - ------- - - ------- - - ------ - ------ - Net income per common share (EPS) Basic $ 0.24 $ 0.22 $ 0.02 Diluted $ 0.24 $ 0.22 $ 0.02 Dividends declared Cash dividends declared per common share $ 0.25 $ 0.10 $ 0.15 Cash dividends declared $ 20,158 $ 8,370 $ 11,788 Dividend payout ratio 102.9 % 45.0 % 57.88 % Weighted average number of common shares outstanding Basic 82,587 84,590 (2,003 ) Diluted 82,643 84,661 (2,018 )

Average Balance Sheet Data For the year ended Variance ----------------------------------------------- --------------------------- (Dollars in Thousands, Unaudited) June 30, June 30, Variance or Change 2018 2017 or Change Pct. ----------------------------------------------- - --------- - - --------- - ----------- ------- Assets Interest-earning assets: Loans receivable, including loans held for sale $ 3,577,598 $ 2,955,686 $ 621,912 21.0 % Taxable investment securities 1,048,163 1,066,508 (18,345 ) -1.7 % Tax-exempt investment securities 127,779 114,545 13,234 11.6 % Other interest-earning assets 93,209 114,121 (20,912 ) -18.3 % - --------- - - --------- - - ------- - ----- - Total interest-earning assets 4,846,749 4,250,860 595,889 14.0 % Non-interest-earning assets 420,219 355,554 64,665 18.2 % - --------- - - --------- - - ------- - ----- - Total assets $ 5,266,968 $ 4,606,414 $ 660,554 14.3 % - --------- - - --------- - - ------- - ----- - Liabilities and Stockholders' Equity Interest-bearing liabilities: Deposits: Interest-bearing demand $ 896,695 $ 769,767 $ 126,928 16.5 % Savings and club 569,777 519,506 50,271 9.7 % Certificates of deposit 1,496,743 1,241,958 254,785 20.5 % - --------- - - --------- - - ------- - ----- - Total interest-bearing deposits 2,963,215 2,531,231 431,984 17.1 % Borrowings: Federal Home Loan Bank Advances 876,253 647,360 228,893 35.4 % Other borrowings 34,274 38,412 (4,138 ) -10.8 % - --------- - - --------- - - ------- - ----- - Total borrowings 910,527 685,772 224,755 32.8 % - --------- - - --------- - - ------- - ----- - Total interest-bearing liabilities 3,873,742 3,217,003 656,739 20.4 % Non-interest-bearing liabilities: Non-interest-bearing deposits 281,262 249,693 31,569 12.6 % Other non-interest-bearing liabilities 30,298 33,416 (3,118 ) -9.3 % - --------- - - --------- - - ------- - ----- - Total non-interest-bearing liabilities 311,560 283,109 28,451 10.0 % - --------- - - --------- - - ------- - ----- - Total liabilities 4,185,302 3,500,112 685,190 19.6 % Stockholders' equity 1,081,666 1,106,302 (24,636 ) -2.2 % ----- - Total liabilities and stockholders' equity $ 5,266,968 $ 4,606,414 $ 660,554 14.3 % - --------- - - --------- - - ------- - ----- - Average interest-earning assets to average 125.12 % 132.14 % -7.02 % -5.3 % interest-bearing liabilities

For the year ended --------------------- --------- Performance Ratio Highlights June 30, June 30, Variance 2018 2017 or Change ----------------------------------------------- -------- - -------- - --------- Average yield on interest-earning assets: Loans receivable, including loans held for sale 3.87 % 3.76 % 0.11% Taxable investment securities 2.58 % 2.21 % 0.37% Tax-exempt investment securities (1) 2.05 % 2.01 % 0.04% Other interest-earning assets 3.58 % 1.81 % 1.77% -------- - -------- - --------- Total interest-earning assets 3.54 % 3.27 % 0.27% Average cost of interest-bearing liabilities: Deposits: Interest-bearing demand 0.82 % 0.66 % 0.16% Savings and club 0.17 % 0.13 % 0.04% Certificates of deposit 1.42 % 1.32 % 0.10% -------- - -------- - --------- Total interest-bearing deposits 1.00 % 0.87 % 0.13% Borrowings: Federal Home Loan Bank Advances 2.32 % 2.21 % 0.11% Other borrowings 0.40 % 0.33 % 0.07% -------- - -------- - --------- Total borrowings 2.25 % 2.10 % 0.15% -------- - -------- - --------- Total interest-bearing liabilities 1.29 % 1.13 % 0.16% Interest rate spread(2) 2.25 % 2.14 % 0.11% Net interest margin(3) 2.50 % 2.41 % 0.09% Non-interest income to average assets 0.25 % 0.25 % 0.01% Non-interest expense to average assets 1.86 % 1.76 % 0.10% Efficiency ratio(4) 72.72 % 71.20 % 1.52% Return on average assets (annualized) 0.37 % 0.40 % -0.03% Return on average equity (annualized) 1.81 % 1.68 % 0.13% ----------------------------------------------- (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.

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) 2018 2018 2017 2017 2017 --------------------------------------- - --------- - - --------- - - --------- - - --------- - - --------- - Assets Cash and cash equivalents $ 128,864 $ 38,283 $ 50,685 $ 38,823 $ 78,237 Securities available for sale 725,085 684,771 637,671 636,600 613,760 Securities held to maturity 589,730 459,380 471,452 482,926 493,321 Loans held-for-sale 863 2,377 3,490 3,808 4,692 Loans receivable, including yield 4,501,348 3,351,369 3,291,516 3,260,328 3,245,261 adjustments Less allowance for loan losses (30,865 ) (30,248 ) (30,066 ) (29,445 ) (29,286 ) - --------- - - --------- - - --------- - - --------- - - --------- - Net loans receivable 4,470,483 3,321,121 3,261,450 3,230,883 3,215,975 Premises and equipment 56,240 42,856 41,829 40,132 39,585 Federal Home Loan Bank stock 59,004 39,112 39,113 39,115 39,958 Accrued interest receivable 18,510 13,926 13,524 13,268 12,493 Goodwill 210,895 108,591 108,591 108,591 108,591 Bank owned life insurance 249,816 184,981 183,754 182,489 181,223 Deferred income taxes, net 23,754 3,898 6,941 13,230 15,454 Other assets 46,630 34,404 25,347 18,285 14,838 Total assets $ 6,579,874 $ 4,933,700 $ 4,843,847 $ 4,808,150 $ 4,818,127 - --------- - - --------- - - --------- - - --------- - - --------- - Liabilities Deposits $ 4,073,604 $ 3,067,102 $ 3,033,231 $ 2,952,887 $ 2,929,745 Borrowings 1,198,646 852,009 798,864 808,554 806,228 Advance payments by borrowers for taxes 18,088 8,969 8,511 9,787 8,711 Other liabilities 20,788 14,419 13,968 22,689 16,262 - --------- - - --------- - - --------- - - --------- - - --------- - Total liabilities 5,311,126 3,942,499 3,854,574 3,793,917 3,760,946 Stockholders' Equity Common stock 996 788 795 815 844 Paid-in capital 922,711 653,045 662,093 690,204 728,790 Retained earnings 359,096 355,270 353,536 354,123 361,039 Unearned ESOP shares (32,590 ) (33,076 ) (33,563 ) (34,049 ) (34,536 ) Accumulated other comprehensive income, 18,535 15,174 6,412 3,140 1,044 net - --------- - - --------- - - --------- - - --------- - - --------- - Total stockholders' equity 1,268,748 991,201 989,273 1,014,233 1,057,181 Total liabilities and stockholders' $ 6,579,874 $ 4,933,700 $ 4,843,847 $ 4,808,150 $ 4,818,127 equity - --------- - - --------- - - --------- - - --------- - - --------- - Consolidated capital ratios Equity to assets 19.28 % 20.09 % 20.42 % 21.09 % 21.94 % Tangible equity to tangible assets 16.53 % 18.29 % 18.59 % 19.27 % 20.14 % Share data Outstanding shares 99,626 78,765 79,527 81,548 84,351 Equity per share $ 12.74 $ 12.58 $ 12.44 $ 12.44 $ 12.53 Tangible equity per share(1) $ 10.56 $ 11.20 $ 11.07 $ 11.10 $ 11.24 --------------------------------------- (1)Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets.

Supplemental Balance Sheet Highlights At ----------------------------------------------------------- (Dollars in Thousands, Unaudited) June 30, March 31, December September June 30, 31, 30, 2018 2018 2017 2017 2017 ----------------------------------------- ----------- ----------- ----------- ----------- ----------- Cash and cash equivalents Cash and due from depository institutions $ 26,199 $ 18,229 $ 17,899 $ 17,972 $ 18,889 Interest-bearing deposits in other banks 102,665 20,054 32,786 20,851 59,348 - --------- - --------- - --------- - --------- - --------- Total cash and cash equivalents $ 128,864 $ 38,283 $ 50,685 $ 38,823 $ 78,237 Securities available for sale Debt securities: U.S. agency securities $ 4,411 $ 4,667 $ 4,810 $ 5,063 $ 5,316 Municipal and state obligations 26,088 26,733 27,428 27,725 27,740 Asset-backed securities 182,620 182,066 169,484 163,615 162,429 Collateralized loan obligations 226,066 178,342 133,341 128,383 98,154 Corporate bonds 147,594 142,202 142,397 142,489 142,318 Trust preferred securities 3,783 8,485 8,494 8,544 8,540 - --------- - --------- - --------- - --------- - --------- Debt securities available for sale 590,562 542,495 485,954 475,819 444,497 Mortgage-backed securities: Collateralized mortgage obligations 24,292 25,601 27,187 28,790 30,536 Residential pass-through securities 102,359 108,736 116,496 123,868 130,550 Commercial pass-through securities 7,872 7,939 8,034 8,123 8,177 - --------- - --------- - --------- - --------- - --------- Mortgage-backed securities 134,523 142,276 151,717 160,781 169,263 - --------- - --------- - --------- - --------- - --------- Total securities available for sale $ 725,085 $ 684,771 $ 637,671 $ 636,600 $ 613,760 Securities held to maturity Debt securities: U.S. agency securities $ - $ - $ - $ 35,000 $ 35,000 Municipal and state obligations 109,483 98,011 100,671 95,954 94,713 Subordinated debt 46,294 30,000 25,000 15,000 15,000 - --------- - --------- - --------- - --------- - --------- Debt securities held to maturity 155,777 128,011 125,671 145,954 144,713 Mortgage-backed securities: Collateralized mortgage obligations 56,886 34,309 35,861 16,600 17,854 Residential pass-through securities 200,622 151,605 160,487 169,257 178,813 Commercial pass-through securities 176,445 145,455 149,433 151,115 151,941 - --------- - --------- - --------- - --------- - --------- Mortgage-backed securities 433,953 331,369 345,781 336,972 348,608 - --------- - --------- - --------- - --------- - --------- Total securities held to maturity $ 589,730 $ 459,380 $ 471,452 $ 482,926 $ 493,321 - --------- - --------- - --------- - --------- - --------- Total securities $ 1,314,815 $ 1,144,151 $ 1,109,123 $ 1,119,526 $ 1,107,081

Supplemental Balance Sheet Highlights At --------------------------------------------------------------------- (Dollars in Thousands, Unaudited) June 30, March 31, December 31, September 30, June 30, 2018 2018 2017 2017 2017 ---------------------------------------- - --------- - - --------- - - --------- - - --------- - - --------- - Loan portfolio composition: Residential first mortgage loans $ 1,297,453 $ 563,807 $ 574,322 $ 559,593 $ 567,323 Home equity loans and lines of credit 90,761 79,522 80,961 80,746 82,822 - --------- - - --------- - - --------- - - --------- - - --------- - Residential mortgage loans 1,388,214 643,329 655,283 640,339 650,145 Multifamily mortgage loans 1,758,584 1,471,573 1,438,386 1,427,840 1,412,575 Nonresidential and mixed use mortgage 1,302,961 1,113,385 1,069,254 1,085,983 1,085,064 loans - --------- - - --------- - - --------- - - --------- - - --------- - Commercial mortgage loans 3,061,545 2,584,958 2,507,640 2,513,823 2,497,639 Commercial business loans 85,825 88,216 92,442 81,676 74,471 Construction loans 23,271 22,963 22,205 8,320 3,815 Account loans 3,283 3,038 2,996 2,800 2,863 Other consumer loans 5,777 7,186 8,951 10,988 13,520 - --------- - - --------- - - --------- - - --------- - - --------- - Consumer loans 9,060 10,224 11,947 13,788 16,383 - --------- - - --------- - - --------- - - --------- - - --------- - Total loans, excluding yield adjustments 4,567,915 3,349,690 3,289,517 3,257,946 3,242,453 Unamortized yield adjustments (66,567 ) 1,679 1,999 2,382 2,808 - --------- - - --------- - - --------- - - --------- - - --------- - Loans receivable, including yield 4,501,348 3,351,369 3,291,516 3,260,328 3,245,261 adjustments Less allowance for loan losses (30,865 ) (30,248 ) (30,066 ) (29,445 ) (29,286 ) - --------- - - --------- - - --------- - - --------- - - --------- - Net loans receivable $ 4,470,483 $ 3,321,121 $ 3,261,450 $ 3,230,883 $ 3,215,975 Loan portfolio allocation: Residential first mortgage loans 28.4 % 16.8 % 17.5 % 17.2 % 17.5 % Home equity loans and lines of credit 2.0 % 2.4 % 2.5 % 2.5 % 2.6 % - --------- - - --------- - - --------- - - --------- - - --------- - Residential mortgage loans 30.4 % 19.2 % 20.0 % 19.7 % 20.1 % Multifamily mortgage loans 38.5 % 43.9 % 43.7 % 43.8 % 43.6 % Nonresidential and mixed use mortgage 28.5 % 33.2 % 32.5 % 33.3 % 33.4 % loans - --------- - - --------- - - --------- - - --------- - - --------- - Commercial mortgage loans 67.0 % 77.1 % 76.2 % 77.1 % 77.0 % Commercial business loans 1.9 % 2.6 % 2.8 % 2.5 % 2.3 % Construction loans 0.5 % 0.7 % 0.7 % 0.3 % 0.1 % Account loans 0.1 % 0.1 % 0.1 % 0.1 % 0.1 % Other consumer loans 0.1 % 0.3 % 0.2 % 0.3 % 0.4 % - --------- - - --------- - - --------- - - --------- - - --------- - Consumer loans 0.2 % 0.4 % 0.3 % 0.4 % 0.5 % - --------- - - --------- - - --------- - - --------- - - --------- - Total loans, excluding yield adjustments 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Asset quality: Nonperforming assets: Accruing loans > 90 days past due $ 60 $ 45 $ 31 $ 105 $ 74 Nonaccrual loans 16,799 14,190 16,315 18,006 18,798 - --------- - - --------- - - --------- - - --------- - - --------- - Total nonperforming loans 16,859 14,235 16,346 18,111 18,872 Other real estate owned 725 1,094 1,693 2,424 1,632 - --------- - - --------- - - --------- - - --------- - - --------- - Total nonperforming assets $ 17,584 $ 15,329 $ 18,039 $ 20,535 $ 20,504 Nonperforming loans (% total loans) 0.37 % 0.42 % 0.50 % 0.56 % 0.58 % Nonperforming assets (% total assets) 0.27 % 0.31 % 0.37 % 0.43 % 0.43 % Allowance for loan losses (ALLL): ALLL to total loans 0.68 % 0.90 % 0.91 % 0.90 % 0.90 % ALLL to nonperforming loans 183.08 % 212.49 % 183.93 % 162.58 % 155.18 % Net charge offs (recoveries) $ 101 $ 241 $ 315 $ 471 $ (483 ) Average net charge off (recovery) rate 0.01 % 0.03 % 0.04 % 0.06 % -0.06 % (annualized)

Supplemental Balance Sheet Highlights At --------------------------------------------------------------------- (Dollars in Thousands, Unaudited) June 30, March 31, December 31, September 30, June 30, 2018 2018 2017 2017 2017 -------------------------------------- - --------- - - --------- - - --------- - - --------- - - --------- - Funding by type: Deposits Non-interest-bearing deposits $ 311,938 $ 270,217 $ 275,065 $ 279,263 $ 267,412 Interest-bearing demand 1,000,989 871,425 879,385 855,822 847,400 Savings and club 744,039 515,805 517,400 519,037 523,981 Certificates of deposit 2,016,638 1,409,655 1,361,381 1,298,765 1,290,952 - --------- - - --------- - - --------- - - --------- - - --------- - Interest-bearing deposits 3,761,666 2,796,885 2,758,166 2,673,624 2,662,333 - --------- - - --------- - - --------- - - --------- - - --------- - Total deposits 4,073,604 3,067,102 3,033,231 2,952,887 2,929,745 Borrowings: Federal Home Loan Bank advances 1,170,144 775,625 775,649 775,673 775,696 Overnight borrowings - 42,000 - - - Depositor sweep accounts 28,502 34,384 23,215 32,881 30,532 - --------- - - --------- - - --------- - - --------- - - --------- - Total borrowings 1,198,646 852,009 798,864 808,554 806,228 - --------- - - --------- - - --------- - - --------- - - --------- - Total funding $ 5,272,250 $ 3,919,111 $ 3,832,095 $ 3,761,441 $ 3,735,973 - --------- - - --------- - - --------- - - --------- - - --------- - Loans as a % of deposits 109.8 % 108.4 % 107.6 % 109.5 % 109.9 % Deposits as a % of total funding 77.3 % 78.3 % 79.2 % 78.5 % 78.4 % Borrowings as a % of total funding 22.7 % 21.7 % 20.8 % 21.5 % 21.6 % Funding by source: Retail funding Non-interest-bearing deposits $ 311,938 $ 270,217 $ 275,065 $ 279,263 $ 267,412 Interest-bearing demand 790,164 656,114 657,349 633,478 624,798 Savings and club 744,039 515,805 517,400 519,037 523,981 Certificates of deposit 1,828,039 1,247,900 1,210,428 1,175,329 1,167,894 - --------- - - --------- - - --------- - - --------- - - --------- - Total retail deposits 3,674,180 2,690,036 2,660,242 2,607,107 2,584,085 Depositor sweep accounts 28,502 34,384 23,215 32,881 30,532 - --------- - - --------- - - --------- - - --------- - - --------- - Total retail funding 3,702,682 2,724,420 2,683,457 2,639,988 2,614,617 Wholesale funding: Interest-bearing demand $ 210,825 $ 215,311 $ 222,036 $ 222,344 $ 222,602 Certificates of deposit (listing 104,256 104,934 93,853 101,791 101,430 service) Certificates of deposit (brokered) 84,343 56,821 57,100 21,645 21,628 - --------- - - --------- - - --------- - - --------- - - --------- - Total wholesale deposits 399,424 377,066 372,989 345,780 345,660 FHLB Advances 1,170,144 775,625 775,649 775,673 775,696 Overnight borrowings - 42,000 - - - - --------- - - --------- - - --------- - - --------- - - --------- - Total wholesale funding 1,569,568 1,194,691 1,148,638 1,121,453 1,121,356 - --------- - - --------- - - --------- - - --------- - - --------- - Total funding $ 5,272,250 $ 3,919,111 $ 3,832,095 $ 3,761,441 $ 3,735,973 - --------- - - --------- - - --------- - - --------- - - --------- - Retail funding as a % of total funding 70.2 % 69.5 % 70.0 % 70.2 % 70.0 % Wholesale funding as a % of total 29.8 % 30.5 % 30.0 % 29.8 % 30.0 % funding

Summary Income Statement For the three months ended ------------------------------------------------------ (Dollars and Shares in Thousands, June 30, March 31, December September June 30, 31, 30, Except Per Share Data, Unaudited) 2018 2018 2017 2017 2017 ------------------------------------------ - ------ - - ------ - - ------ - - ------ - - ------ - Interest income Loans $ 46,615 $ 30,728 $ 30,610 $ 30,473 $ 29,842 Taxable investment securities 8,670 6,450 6,077 5,856 5,931 Tax-exempt investment securities 702 652 641 621 605 Other interest-earning assets 1,275 715 704 642 586 - ------ - - ------ - - ------ - - ------ - - ------ - Total interest income 57,262 38,545 38,032 37,592 36,964 Interest expense Deposits 9,755 7,026 6,649 6,219 5,909 Borrowings 6,916 4,462 4,548 4,563 4,325 - ------ - Total interest expense 16,671 11,488 11,197 10,782 10,234 - ------ - - ------ - - ------ - - ------ - - ------ - Net interest income 40,591 27,057 26,835 26,810 26,730 Provision for loan losses 717 423 936 630 1,188 - ------ - Net interest income after provision for 39,874 26,634 25,899 26,180 25,542 loan losses - ------ - - ------ - - ------ - - ------ - - ------ - Non-interest income Fees and service charges 1,205 1,537 1,409 1,261 839 Gain (loss) on sale and call of securities 9 (1 ) - - - Gain on sale of loans 127 346 200 331 531 Gain (loss) on sale of real estate owned 60 7 23 (109 ) 3 Income from bank owned life insurance 1,604 1,227 1,264 1,267 1,288 Electronic banking fees and charges 278 243 302 278 287 Miscellaneous 75 189 65 66 72 - ------ - - ------ - - ------ - - ------ - - ------ - Total non-interest income 3,358 3,548 3,263 3,094 3,020 Non-interest expense Salaries and employee benefits 15,353 12,888 12,926 12,867 12,887 Net occupancy expense of premises 2,716 2,359 2,122 1,981 2,013 Equipment and systems 2,776 2,323 2,193 2,190 2,204 Advertising and marketing 757 745 748 710 937 Federal deposit insurance premium 463 350 343 360 352 Directors' compensation 754 689 688 689 689 Merger-related expenses 5,149 401 1,193 - - Miscellaneous 3,289 2,788 2,551 2,489 2,969 Total non-interest expense 31,257 22,543 22,764 21,286 22,051 - ------ - - ------ - - ------ - - ------ - - ------ - Income before income taxes 11,975 7,639 6,398 7,988 6,511 Income taxes 4,257 2,262 5,129 2,756 2,107 - ------ - - ------ - - ------ - - ------ - - ------ - Net income $ 7,718 $ 5,377 $ 1,269 $ 5,232 $ 4,404 - ------ - - ------ - - ------ - - ------ - - ------ - Net income per common share (EPS) Basic $ 0.08 $ 0.07 $ 0.02 $ 0.07 $ 0.05 Diluted $ 0.08 $ 0.07 $ 0.02 $ 0.07 $ 0.05 Dividends declared(1) Cash dividends declared per common share $ 0.04 $ 0.03 $ 0.03 $ 0.15 $ 0.03 Cash dividends declared $ 3,892 $ 2,262 $ 1,856 $ 12,148 $ 2,448 Dividend payout ratio 50.4 % 42.1 % 146.3 % 232.2 % 55.6 % Weighted average number of common shares outstanding Basic 98,046 75,492 77,174 79,649 82,372 Diluted 98,100 75,539 77,239 79,708 82,429 ------------------------------------------ (1) Dividends declared during the quarter ended September 30, 2017 include a $0.12 special dividend representing a supplemental distribution of net income to stockholders from the prior fiscal year ended June 30, 2017.

Average Balance Sheet Data For the three months ended --------------------------------------------------------------------- (Dollars in Thousands, Unaudited) June 30, March 31, December 31, September 30, June 30, 2018 2018 2017 2017 2017 -------------------------------------- - --------- - - --------- - - --------- - - --------- - - --------- - Assets Interest-earning assets: Loans receivable, including loans held $ 4,507,336 $ 3,293,664 $ 3,255,862 $ 3,257,465 $ 3,200,968 for sale Taxable investment securities 1,192,066 1,003,600 996,397 1,001,183 1,009,120 Tax-exempt investment securities 134,683 127,605 126,214 122,685 119,957 Other interest-earning assets 142,591 67,770 82,539 79,920 118,349 - --------- - - --------- - - --------- - - --------- - - --------- - Total interest-earning assets 5,976,676 4,492,639 4,461,012 4,461,253 4,448,394 Non-interest-earning assets 586,976 369,299 364,015 361,259 358,791 - --------- - Total assets $ 6,563,652 $ 4,861,938 $ 4,825,027 $ 4,822,512 $ 4,807,185 - --------- - - --------- - - --------- - - --------- - - --------- - Liabilities and Stockholders' Equity Interest-bearing liabilities: Deposits: Interest-bearing demand $ 1,004,445 $ 870,762 $ 854,142 $ 858,039 $ 812,932 Savings and club 724,430 513,948 518,513 522,686 523,771 Certificates of deposit 1,983,372 1,385,151 1,336,466 1,284,847 1,288,537 - --------- - - --------- - - --------- - - --------- - - --------- - Total interest-bearing deposits 3,712,247 2,769,861 2,709,121 2,665,572 2,625,240 Borrowings: Federal Home Loan Bank Advances 1,179,147 777,721 777,460 778,104 775,703 Other borrowings 34,636 33,529 30,606 32,041 40,064 - --------- - Total borrowings 1,213,783 811,250 808,066 810,145 815,767 - --------- - - --------- - - --------- - - --------- - - --------- - Total interest-bearing liabilities 4,926,030 3,581,111 3,517,187 3,475,717 3,441,007 Non-interest-bearing liabilities: Non-interest-bearing deposits 305,763 267,152 277,236 274,858 262,499 Other non-interest-bearing liabilities 39,340 24,953 25,777 31,070 26,322 - --------- - - --------- - - --------- - - --------- - - --------- - Total non-interest-bearing liabilities 345,103 292,105 303,013 305,928 288,821 - --------- - - --------- - - --------- - - --------- - - --------- - Total liabilities 5,271,133 3,873,216 3,820,200 3,781,645 3,729,828 Stockholders' equity 1,292,519 988,722 1,004,827 1,040,867 1,077,357 - --------- - Total liabilities and stockholders' $ 6,563,652 $ 4,861,938 $ 4,825,027 $ 4,822,512 $ 4,807,185 equity - --------- - - --------- - - --------- - - --------- - - --------- - Average interest-earning assets to average 121.33 % 125.45 % 126.83 % 128.35 % 129.28 % interest-bearing liabilities

For the three months ended ------------------------------------------------------ Performance Ratio Highlights June 30, March 31, December 31, September 30, June 30, 2018 2018 2017 2017 2017 ----------------------------------------------- -------- --------- ------------ ------------- -------- Average yield on interest-earning assets: Loans receivable, including loans held for sale 4.14% 3.73% 3.76% 3.74% 3.73% Taxable investment securities 2.91% 2.57% 2.44% 2.34% 2.35% Tax-exempt investment securities (1) 2.09% 2.04% 2.03% 2.03% 2.02% Other interest-earning assets 3.58% 4.22% 3.42% 3.21% 1.98% -------- --------- ------------ ------------- -------- Total interest-earning assets 3.83% 3.43% 3.41% 3.37% 3.32% Average cost of interest-bearing liabilities: Deposits: Interest-bearing demand 0.89% 0.84% 0.80% 0.76% 0.71% Savings and club 0.29% 0.12% 0.12% 0.12% 0.12% Certificates of deposit 1.41% 1.46% 1.43% 1.38% 1.34% -------- --------- ------------ ------------- -------- Total interest-bearing deposits 1.05% 1.01% 0.98% 0.93% 0.90% Borrowings: Federal Home Loan Bank Advances 2.34% 2.27% 2.33% 2.33% 2.21% Other borrowings 0.34% 0.56% 0.27% 0.27% 0.27% -------- --------- ------------ ------------- -------- Total borrowings 2.28% 2.20% 2.25% 2.25% 2.12% -------- --------- ------------ ------------- -------- Total interest-bearing liabilities 1.35% 1.28% 1.27% 1.24% 1.19% Interest rate spread(2) 2.48% 2.15% 2.14% 2.13% 2.13% Net interest margin(3) 2.72% 2.41% 2.41% 2.40% 2.40% Non-interest income to average assets 0.20% 0.29% 0.27% 0.26% 0.25% (annualized) Non-interest expense to average assets 1.90% 1.85% 1.89% 1.77% 1.83% (annualized) Efficiency ratio(4) 71.12% 73.66% 75.63% 71.18% 74.12% Return on average assets (annualized) 0.47% 0.44% 0.11% 0.43% 0.37% Return on average equity (annualized) 2.39% 2.18% 0.51% 2.01% 1.64% ----------------------------------------------- (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. 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 SeptembeJune 31, r 30, 30, Except Per Share Data, Unaudited) 2018 2018 2017 2017 2017 ------------------------------------------- - ------ - - ----- - - ------ - - ----- - ----- Adjusted Net Income Net income (GAAP) $ 7,718 $ 5,377 $ 1,269 $ 5,232 $ 4,404 Effect to adjust for: Merger-related expenses 5,149 401 1,193 - - Income tax benefit from merger-related (1,451 ) (22 ) (165 ) - - expenses Income tax expense for write-down of net - - 4,867 - - deferred tax asset Income tax benefit for write-down of net - - (1,381 ) - - deferred tax liability Income tax benefit for reduction in current - - (769 ) - - year income tax rate (from 35% to 28%) - ------ - - ----- - - ------ - - ----- - ----- Adjusted net income $ 11,416 $ 5,756 $ 5,014 $ 5,232 $ 4,404 (non-GAAP) - ------ - - ----- - - ------ - - ----- - ----- Adjusted Net Income per Common Share (EPS) Net income per common share $ 0.08 $ 0.07 $ 0.02 $ 0.07 $ 0.05 Basic (GAAP) Effect to adjust for: Merger-related expenses 0.05 0.01 0.02 - - Income tax benefit from merger-related (0.01 ) - (0.01 ) - - expenses Income tax expense for write-down of net - - 0.06 - - deferred tax asset Income tax benefit for write-down of net - - (0.02 ) - - deferred tax liability Income tax benefit for reduction in current - - (0.01 ) - - year income tax rate (from 35% to 28%) - ------ - - ----- - - ------ - - ----- - ----- Adjusted net income per common share $ 0.12 $ 0.08 $ 0.06 $ 0.07 $ 0.05 Basic (non-GAAP) - ------ - - ----- - - ------ - - ----- - ----- Adjusted Net Income per Common Share (EPS) Net income per common share $ 0.08 $ 0.07 $ 0.02 $ 0.07 $ 0.05 Diluted (GAAP) Effect to adjust for: Merger-related expenses 0.05 0.01 0.02 - - Income tax benefit from merger-related (0.01 ) - (0.01 ) - - expenses Income tax expense for write-down of net - - 0.06 - - deferred tax asset Income tax benefit for write-down of net - - (0.02 ) - - deferred tax liability Income tax benefit for reduction in current - - (0.01 ) - - year income tax rate (from 35% to 28%) - ------ - - ----- - - ------ - - ----- - ----- Adjusted net income per common share $ 0.12 $ 0.08 $ 0.06 $ 0.07 $ 0.05 Diluted (non-GAAP) - ------ - - ----- - - ------ - - ----- - -----

For the three months ended ------------------------------------------------------ Reconciliation of GAAP to Non-GAAP June 30, March 31, December 31, September 30, June 30, (Unaudited) 2018 2018 2017 2017 2017 --------------------------------------------- -------- --------- ------------ ------------- -------- Adjusted Non-Interest Expense Non-interest expense (GAAP) 31,257 22,543 22,764 21,286 22,051 Effect to adjust for: Merger-related expenses (5,149) (401) (1,193) - - -------- --------- ------------ ------------- -------- Adjusted non-interest expense 26,108 22,142 21,571 21,286 22,051 (non-GAAP) -------- --------- ------------ ------------- -------- Adjusted Non-Interest Expense Ratio Non-interest expense to average assets (GAAP) 1.90% 1.85% 1.89% 1.77% 1.83% Effect to adjust for: Merger-related expenses -0.31% -0.03% -0.10% 0.00% 0.00% -------- --------- ------------ ------------- -------- Adjusted non-interest expense ratio 1.59% 1.82% 1.79% 1.77% 1.83% (non-GAAP) -------- --------- ------------ ------------- -------- Adjusted Efficiency Ratio Non-interest expense / (Net interest income 71.1% 73.7% 75.6% 71.2% 74.1% + non-interest income) (GAAP) Effect to adjust for: Merger-related expenses -11.7% -1.3% -3.9% 0.0% 0.0% -------- --------- ------------ ------------- -------- Adjusted efficiency ratio 59.4% 72.4% 71.7% 71.2% 74.1% (non-GAAP) -------- --------- ------------ ------------- -------- Adjusted Return on Average Assets Return on average assets (GAAP) 0.47% 0.44% 0.11% 0.43% 0.37% Effect to adjust for: Merger-related expenses 0.31% 0.03% 0.09% 0.00% 0.00% Income tax benefit from merger-related -0.09% 0.00% -0.01% 0.00% 0.00% expenses Income tax expense for write-down of net 0.00% 0.00% 0.40% 0.00% 0.00% deferred tax asset Income tax benefit for write-down of net 0.00% 0.00% -0.11% 0.00% 0.00% deferred tax liability Income tax benefit for reduction in current 0.00% 0.00% -0.06% 0.00% 0.00% year income tax rate (from 35% to 28%) -------- --------- ------------ ------------- -------- Adjusted return on average assets 0.69% 0.47% 0.42% 0.43% 0.37% (non-GAAP) -------- --------- ------------ ------------- -------- Adjusted Return on Average Equity Return on average equity (GAAP) 2.39% 2.18% 0.51% 2.01% 1.64% Effect to adjust for: Merger-related expenses 1.59% 0.16% 0.48% 0.00% 0.00% Income tax benefit from merger-related -0.45% -0.01% -0.07% 0.00% 0.00% expenses Income tax expense for write-down of net 0.00% 0.00% 1.94% 0.00% 0.00% deferred tax asset Income tax benefit for write-down of net 0.00% 0.00% -0.55% 0.00% 0.00% deferred tax liability Income tax benefit for reduction in current 0.00% 0.00% -0.31% 0.00% 0.00% year income tax rate (from 35% to 28%) -------- --------- ------------ ------------- -------- Adjusted return on average equity 3.53% 2.33% 2.00% 2.01% 1.64% (non-GAAP) -------- --------- ------------ ------------- --------