Kearny Financial(KRNY) - 2019 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION This section provides the unaudited consolidated financial statements, management's discussion and analysis, and disclosures on market risk Item 1: Financial Statements This section presents the unaudited consolidated financial statements, including the statements of financial condition, income, comprehensive income, changes in stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, significant transactions like the Clifton Bancorp Inc. acquisition, and recent accounting pronouncements Consolidated Statements of Financial Condition This section presents the company's financial position, including assets, liabilities, and equity, at specific reporting dates | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total Assets | $6,702,440 | $6,579,874 | | Net Loans Receivable | $4,719,866 | $4,470,483 | | Total Deposits | $4,173,434 | $4,073,604 | | Total Borrowings | $1,310,547 | $1,198,646 | | Total Stockholders' Equity | $1,183,261 | $1,268,748 | Consolidated Statements of Income This section details the company's revenues, expenses, and net income over specific reporting periods | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Total Interest Income | $60,022 | $38,032 | $118,228 | $75,624 | | Total Interest Expense | $20,673 | $11,197 | $38,699 | $21,979 | | Net Interest Income | $39,349 | $26,835 | $79,529 | $53,645 | | Provision for Loan Losses | $971 | $936 | $3,071 | $1,566 | | Total Non-Interest Income | $3,309 | $3,263 | $6,491 | $6,357 | | Total Non-Interest Expense | $27,270 | $22,764 | $53,727 | $44,050 | | Income before Income Taxes | $14,417 | $6,398 | $29,222 | $14,386 | | Income Tax Expense | $3,649 | $5,129 | $7,308 | $7,885 | | Net Income | $10,768 | $1,269 | $21,914 | $6,501 | | Basic EPS | $0.12 | $0.02 | $0.23 | $0.08 | | Diluted EPS | $0.12 | $0.02 | $0.23 | $0.08 | | Dividends Declared Per Common Share | $0.05 | $0.03 | $0.25 | $0.18 | Consolidated Statements of Comprehensive Income This section reports net income and other comprehensive income items, such as unrealized gains or losses on securities | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net Income | $10,768 | $1,269 | $21,914 | $6,501 | | Net unrealized loss on securities available for sale | $(1,863) | $(1,208) | $(2,517) | $(60) | | Fair value adjustments on derivatives | $(8,189) | $4,429 | $(7,332) | $5,403 | | Total Other Comprehensive (Loss) Income | $(10,016) | $3,272 | $(9,733) | $5,368 | | Total Comprehensive Income | $752 | $4,541 | $12,181 | $11,869 | Consolidated Statements of Changes in Stockholders' Equity This section outlines the changes in the company's equity accounts, including net income, dividends, and share repurchases | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total Stockholders' Equity | $1,183,261 | $1,268,748 | | Net Income (6 months) | $21,914 | N/A | | Other Comprehensive Loss, net (6 months) | $(9,733) | N/A | | Share Repurchases (6 months) | $(77,109) | N/A | | Cash Dividends Declared (6 months) | $(23,486) | N/A | Consolidated Statements of Cash Flows This section categorizes cash inflows and outflows from operating, investing, and financing activities | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net Cash Provided by Operating Activities | $24,660 | $16,235 | | Net Cash Used in Investing Activities | $(210,839) | $(54,898) | | Net Cash Provided by Financing Activities | $108,798 | $11,111 | | Net Decrease in Cash and Cash Equivalents | $(77,381) | $(27,552) | | Cash and Cash Equivalents - Ending | $51,483 | $50,685 | Notes to Consolidated Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements, including the statements of financial condition, income, comprehensive income, changes in stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, significant transactions like the Clifton Bancorp Inc. acquisition, and recent accounting pronouncements Note 1. Principles of Consolidation This note describes the entities included in the consolidated financial statements and the accounting principles applied - The consolidated financial statements include Kearny Financial Corp., Kearny Bank, CJB Investment Corp., KFS Financial Services, Inc., and KFS Insurance Services, Inc., prepared in accordance with GAAP[31] Note 2. Basis of Presentation This note explains the basis for preparing the unaudited consolidated financial statements in accordance with regulatory requirements - Unaudited consolidated financial statements are prepared per Form 10-Q and Regulation S-X, including normal recurring adjustments, and should be read with the 2018 Annual Report on Form 10-K[32][33] Note 3. Net Income Per Common Share ("EPS") This note details the calculation of basic and diluted earnings per common share, including weighted average shares outstanding - Basic EPS is based on weighted average common shares outstanding (adjusted for ESOP shares) - Diluted EPS includes potential dilution from stock options using the treasury stock method[34] | Metric | 3 Months Ended Dec 31, 2018 | 3 Months Ended Dec 31, 2017 | 6 Months Ended Dec 31, 2018 | 6 Months Ended Dec 31, 2017 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic EPS | $0.12 | $0.02 | $0.23 | $0.08 | | Diluted EPS | $0.12 | $0.02 | $0.23 | $0.08 | | Basic Weighted Average Shares Outstanding (in thousands) | 92,434 | 77,174 | 93,780 | 78,411 | | Diluted Weighted Average Shares Outstanding (in thousands) | 92,480 | 77,239 | 93,831 | 78,474 | Note 4. Subsequent Events This note discloses events and transactions that occurred after the balance sheet date but before the financial statements were issued - The Company evaluated subsequent events and transactions through the filing date for financial statement recognition or disclosure[37] Note 5. Acquisition of Clifton Bancorp Inc. This note provides details on the acquisition of Clifton Bancorp Inc., including the fair value of acquired assets and assumed liabilities - Acquisition of Clifton Bancorp Inc. completed on April 2, 2018, for $333.9 million[38][39] | Acquired/Assumed | Fair Value (in millions) | | :--------------------------------- | :----------------------- | | Total Assets Acquired | $1,610 | | Loans | $1,120 | | Securities | $326.9 | | Total Liabilities Assumed | $1,380 | | Deposits | $949.8 | | Borrowings | $414.1 | | Merger Consideration | $333.9 | | Goodwill Recognized | $102.3 | | Core Deposit Intangible | $6.4 | Note 6. Recent Accounting Pronouncements This note discusses the company's evaluation and expected impact of recently issued accounting standards not yet adopted - The Company is evaluating ASU 2016-02 (Leases), ASU 2016-13 (CECL), ASU 2017-04 (Goodwill Impairment), and ASU 2018-16 (SOFR OIS Rate for Hedge Accounting)[44][45][49][50] - ASU 2016-02 (Leases) is effective for fiscal years beginning after December 15, 2018; the Company expects to record a right-of-use asset and lease liability as of July 1, 2019, with no material impact on results of operations[44] - ASU 2016-13 (CECL) is effective for fiscal years beginning after December 15, 2019; the Company is evaluating its impact, which is currently indeterminable but will result in a cumulative-effect adjustment to retained earnings upon adoption[48] Note 7. Securities Available for Sale This note provides a breakdown of securities classified as available for sale, including their fair value, amortized cost, and unrealized gains/losses | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------------- | :-------------------------- | :-------------------------- | | Total Securities Available for Sale (Fair Value) | $666,602 | $725,085 | | Total Amortized Cost | $674,594 | $729,406 | | Gross Unrealized Gains | $1,919 | $3,404 | | Gross Unrealized Losses | $9,911 | $7,725 | | Net Unrealized Loss | $(7,992) | $(4,321) | - No sales of securities available for sale occurred during the three and six months ended December 31, 2018 and 2017[53] Note 8. Securities Held to Maturity This note provides details on securities classified as held to maturity, including their amortized cost, fair value, and unrecognized gains/losses | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------------- | :-------------------------- | :-------------------------- | | Total Securities Held to Maturity (Amortized Cost) | $598,318 | $589,730 | | Fair Value | $592,151 | $579,499 | | Gross Unrecognized Gains | $391 | $141 | | Gross Unrecognized Losses | $6,558 | $10,372 | - No sales of securities held to maturity occurred during the three and six months ended December 31, 2018 and 2017[56] Note 9. Impairment of Securities This note explains the company's assessment of impairment for its investment securities, including factors contributing to unrealized losses - Unrealized and unrecognized losses on securities are due to market-related factors, primarily changes in market interest rates and supply/demand[66] - Management concluded that no other-than-temporary impairment was present for available-for-sale or held-to-maturity securities as of December 31, 2018, or June 30, 2018, due to the intent to hold until recovery and no expected adverse change in cash flows[67][171][173] | Portfolio | Date | Number of Securities with Unrealized Losses | Total Unrealized/Unrecognized Losses (in thousands) | | :--------------------------------- | :---------------- | :------------------------------------------ | :------------------------------------------ | | Securities Available for Sale | Dec 31, 2018 | 137 | $9,911 | | Securities Available for Sale | Jun 30, 2018 | 132 | $7,725 | | Securities Held to Maturity | Dec 31, 2018 | 348 | $6,558 | | Securities Held to Maturity | Jun 30, 2018 | 371 | $10,372 | Note 10. Loans Receivable This note presents a detailed breakdown of the company's loan portfolio by type, showing changes over the reporting period | Loan Type | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | Change (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | One- to four-family residential | $1,334,284 | $1,297,453 | $36,831 | | Multi-family commercial mortgage | $1,974,409 | $1,758,584 | $215,825 | | Nonresidential commercial mortgage | $1,302,583 | $1,302,961 | $(378) | | Construction | $28,405 | $23,271 | $5,134 | | Commercial business | $70,059 | $85,825 | $(15,766) | | Home equity loans and lines of credit | $96,001 | $90,761 | $5,240 | | Total loans, net of yield adjustments | $4,753,392 | $4,501,348 | $252,044 | Note 11. Loan Quality and Allowance for Loan Losses This note provides information on the quality of the loan portfolio, including nonperforming loans and the allowance for loan losses | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total Allowance for Loan Losses | $33,526 | $30,865 | | Nonperforming Loans | $20,775 | $16,859 | | Nonperforming Loans as % of Total Loans | 0.44% | 0.37% | | Provision for Loan Losses (6 months) | $3,071 | N/A | | Total Charge Offs (6 months) | $(461) | N/A | | Total Recoveries (6 months) | $51 | N/A | - The increase in nonperforming loans was largely due to one loan totaling $2.9 million, fully secured by vacant land, designated as a troubled debt restructuring and placed on nonaccrual status[182] - The increase in the allowance for loan losses was attributed to aggregate growth in the loan portfolio and reallocation towards commercial loans with higher loss factors, along with updates to historical and environmental loss factors[186][187][188] Note 12. Deposits This note details the composition of the company's deposits by type, highlighting significant changes and funding strategies | Deposit Type | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | Change (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Non-interest-bearing demand | $305,392 | $311,938 | $(6,546) | | Interest-bearing demand | $807,389 | $1,000,989 | $(193,600) | | Savings and club | $760,499 | $744,039 | $16,460 | | Certificates of deposits | $2,300,154 | $2,016,638 | $283,516 | | Total Deposits | $4,173,434 | $4,073,604 | $99,830 | - The decrease in interest-bearing checking accounts primarily reflected a $210.8 million decrease in wholesale money market deposits due to the termination of the Promontory IND program[195] - Brokered certificates of deposit increased by $185.5 million to $269.8 million (6.5% of total deposits) at December 31, 2018, from $84.3 million (2.1% of total deposits) at June 30, 2018[197] Note 13. Borrowings This note provides information on the company's borrowings, including FHLB advances and their associated interest rates | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total FHLB Advances (Balance) | $1,299,204 | $1,176,760 | | Weighted Average Interest Rate (FHLB Advances) | 2.61% | 2.25% | | Overnight Borrowings (Depositor Sweep Accounts) | $16,700 | $28,500 | | Total Borrowings | $1,310,547 | $1,198,646 | - The increase in borrowings included a $200.0 million 90-day FHLB term advance to replace maturing Promontory IND funding, with an associated forward-starting interest rate swap to fix its cost for a longer period[199] Note 14. Derivative Instruments and Hedging Activities This note describes the company's use of derivative instruments, primarily interest rate swaps, for managing interest rate risk - The Company uses interest rate swaps as cash flow hedges to manage interest rate risk and add stability to interest expense[113][115] - As of December 31, 2018, the Company had 12 interest rate swaps with a total notional amount of $900.0 million hedging FHLB advances[115] | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Fair Value of Asset Derivatives (Interest Rate Swaps) | $22,109 | $31,881 | | Financial Collateral Received | $22,100 | $31,600 | Note 15. Benefit Plans This note outlines the company's accounting for employee benefit plans, including the impact of recent accounting pronouncements - The Company adopted ASU 2017-07, "Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," effective July 1, 2018[124] - ASU 2017-07 requires the service cost component of net periodic benefit cost to be reported with other compensation costs, while other components are presented separately, and was applied retrospectively[124] | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net Periodic Benefit Cost | $91 | $86 | $182 | $172 | | Service Cost (Salaries and employee benefits) | $14 | $12 | $28 | $24 | | Interest Cost (Miscellaneous non-interest expense) | $94 | $93 | $188 | $186 | Note 16. Income Taxes This note provides details on the company's income tax expense, effective tax rates, and the impact of tax law changes - The Tax Cuts and Jobs Act (December 22, 2017) permanently reduced the federal statutory income tax rate from 35% to 21%[126][239] | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Income before Income Taxes | $14,417 | $6,398 | $29,222 | $14,386 | | Total Income Tax Expense | $3,649 | $5,129 | $7,308 | $7,885 | | Effective Income Tax Rate | 25.31% | 80.17% | 25.01% | 54.81% | | Statutory Federal Tax Rate | 21% | 28% | 21% | 28% | Note 17. Fair Value of Financial Instruments This note explains the methodologies and inputs used to determine the fair value of financial instruments - The Company adopted ASU 2016-01, "Financial Instruments," effective July 1, 2018, requiring the use of an exit price notion for fair value measurement disclosures[129] - Fair value inputs are categorized into Level 1 (quoted prices in active markets for identical assets), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs)[133] - Most available-for-sale investment securities and interest rate swaps are valued using Level 2 inputs - Impaired loans and other real estate owned are primarily valued using Level 3 inputs based on collateral appraisals and management estimates[131][133][136][137] Note 18. Comprehensive Income This note presents the components of accumulated other comprehensive income, including unrealized gains/losses on securities and derivatives | Component of AOCI | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :------------------------------------------------- | :-------------------------- | :-------------------------- | | Net unrealized loss on securities available for sale (net of tax) | $(5,679) | $(3,162) | | Net unrealized loss on securities available for sale transferred to held to maturity (net of tax) | $(508) | $(638) | | Fair value adjustments on derivatives (net of tax) | $15,588 | $22,920 | | Benefit plan adjustments (net of tax) | $(599) | $(585) | | Total Accumulated Other Comprehensive Income | $8,802 | $18,535 | | Other Comprehensive (Loss) Income (Pre-tax) | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net unrealized holding loss on securities available for sale | $(2,644) | $(2,011) | $(3,671) | $(78) | | Fair value adjustments on derivatives | $(11,615) | $7,489 | $(9,772) | $9,134 | | Total Other Comprehensive (Loss) Income before taxes | $(14,208) | $5,563 | $(13,313) | $9,098 | Note 19. Revenue Recognition This note describes the company's revenue recognition policies and the impact of new accounting standards on non-interest income - The Company adopted ASU 2014-09 (ASC 606) effective July 1, 2018, with no material cumulative effect adjustment to retained earnings or impact on consolidated financial statements[154][155] - Most revenues (interest income from loans, leases, securities, derivatives) are outside ASC 606's scope - Revenues within scope include deposit service charges, interchange income, and OREO sales[154][156] | Non-Interest Income (ASC 606 Scope) | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Deposit-related fees and charges | $375 | $381 | $750 | $734 | | Gain (loss) on sale and write down of other real estate owned | $36 | $23 | $(14) | $(86) | | Electronic banking fees and charges (interchange income) | $277 | $302 | $527 | $580 | Note 20. Premium on Debt Securities This note discusses the accounting treatment for premiums on purchased callable debt securities and the impact of recent accounting updates - The Company early adopted ASU 2017-08 on October 1, 2018, which shortens the amortization period for purchased callable debt securities held at a premium to the earliest call date[162] - This adoption resulted in a cumulative-effect adjustment to retained earnings of $531,000, effective July 1, 2018[162] Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial performance and condition, highlighting key changes in assets, liabilities, and equity, and analyzing operating results for the three and six months ended December 31, 2018, compared to the prior year. It also discusses liquidity, capital resources, and the impact of the Clifton acquisition and tax reform Forward-Looking Statements This section cautions readers about the inherent uncertainties and risks associated with forward-looking statements - Forward-looking statements are based on current management expectations and are subject to risks such as economic conditions, legislative/regulatory changes, and integration of acquired businesses[165] - The Company disclaims any obligation to publicly release revisions to forward-looking statements to reflect future events or circumstances[166] Comparison of Financial Condition at December 31, 2018 and June 30, 2018 Total assets increased by $122.6 million to $6.70 billion at December 31, 2018, from $6.58 billion at June 30, 2018, primarily due to increases in net loans receivable and securities held to maturity, funded by increased deposits and borrowings, partially offset by a decrease in stockholders' equity Executive Summary This summary highlights the key changes in the company's financial condition, including asset growth and funding sources - Total assets increased $122.6 million to $6.70 billion at December 31, 2018, from $6.58 billion at June 30, 2018[167] - The increase was primarily due to increases in net loans receivable and securities held to maturity, funded by increased deposits and borrowings, partially offset by a decrease in stockholders' equity[167] Cash and Cash Equivalents This section analyzes changes in cash and cash equivalents, reflecting liquidity management strategies | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | Change (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Cash and Cash Equivalents | $51,483 | $128,864 | $(77,381) | - The decrease reflects efforts to limit cash balances to meet day-to-day funding and liquidity objectives, while reinvesting excess liquidity into higher-yielding assets[168] Investment Securities Available for Sale This section details changes in available-for-sale investment securities, including principal repayments and fair value adjustments | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | Change (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Investment Securities Available for Sale | $666,602 | $725,085 | $(58,483) | | Net Unrealized Loss | $(8,000) | $(4,300) | $(3,700) | - The decrease was due to $54.8 million in cash repayment of principal and a $3.7 million decrease in fair value[169] Investment Securities Held to Maturity This section discusses changes in held-to-maturity investment securities, including purchases and principal repayments | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | Change (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Investment Securities Held to Maturity | $598,318 | $589,730 | $8,588 | - The increase reflected $48.4 million in security purchases, partially offset by $39.8 million in cash repayment of principal[172] Loans Held-for-Sale This section provides information on loans classified as held-for-sale and the gains realized from their sale | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | Change (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Loans Held-for-Sale | $1,001 | $863 | $138 | - During the six months ended December 31, 2018, $22.2 million of residential mortgage loans were sold, resulting in $215,000 in net sale gains[174] Loans Receivable This section analyzes the growth and composition of the company's loan portfolio, distinguishing between residential and commercial loans | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | Change (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Net Loans Receivable | $4,719,866 | $4,470,483 | $249,383 | | Residential Mortgage Loans (in portfolio) | $1,430,285 | $1,388,214 | $42,071 | | Commercial Loans | $3,375,456 | $3,170,641 | $204,815 | - Commercial loan origination volume for the six months ended December 31, 2018, totaled $401.6 million[179] Nonperforming Loans This section details the trends and specific factors contributing to changes in nonperforming loans | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | Change (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Nonperforming Loans | $20,775 | $16,859 | $3,916 | | Nonperforming Loans as % of Total Loans | 0.44% | 0.37% | 0.07% | - The increase was largely attributable to the addition of one loan totaling $2.9 million, fully secured by vacant land, designated as a troubled debt restructuring and placed on nonaccrual status[182] Allowance for Loan Losses This section explains the factors influencing the allowance for loan losses, including portfolio growth and loss factor adjustments | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Allowance for Loan Losses | $33,526 | $30,865 | | Allowance for Loan Losses as % of Total Loans | 0.70% | 0.68% | | Provisions for Loan Losses (6 months) | $3,071 | N/A | | Net Charge-offs (6 months) | $410 | N/A | - The increase in the allowance for loan losses was driven by aggregate growth in the loan portfolio and reallocation towards commercial loans with higher loss factors, along with updates to historical and environmental loss factors[186][187][188] Other Assets This section provides a breakdown of other significant assets, such as FHLB stock, bank-owned life insurance, and derivative assets | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total Other Assets | $665,200 | $664,800 | | FHLB Stock | $64,514 | $59,004 | | Bank Owned Life Insurance | $253,009 | $249,816 | | Interest Rate Derivatives (Net Asset Value) | $22,100 | $31,900 | Deposits This section analyzes the changes in deposit types, including the impact of wholesale money market deposits and brokered certificates of deposit | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total Deposits | $4,173,434 | $4,073,604 | | Non-interest-bearing deposits | $305,392 | $311,938 | | Interest-bearing deposits | $3,868,042 | $3,761,666 | | Certificates of deposit | $2,300,154 | $2,016,638 | | Interest-bearing checking accounts | $807,389 | $1,000,989 | - The decrease in interest-bearing checking accounts primarily reflected a $210.8 million decrease in wholesale money market deposits due to the scheduled maturity and termination of the Promontory IND program[195] Borrowings This section details the changes in the company's borrowings, including FHLB advances and their purpose | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total Borrowings | $1,310,547 | $1,198,646 | | FHLB Advances (Balance) | $1,299,204 | $1,176,760 | | Depositor Sweep Accounts | $16,700 | $28,500 | - The increase in borrowings primarily reflected a $200.0 million 90-day FHLB term advance to replace maturing Promontory IND funding and a $27.0 million FHLB Community Investment Program long-term advance[199] Other Liabilities This section presents the total amount of other liabilities | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total Other Liabilities | $35,198 | $38,876 | Stockholders' Equity This section explains the changes in stockholders' equity, including share repurchases and net income | Metric | Dec 31, 2018 (in thousands) | Jun 30, 2018 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total Stockholders' Equity | $1,183,261 | $1,268,748 | | Share Repurchases (6 months) | $(77,109) | N/A | | Cash Dividends Declared (6 months) | $(23,486) | N/A | | Net Income (6 months) | $21,914 | N/A | - The Company repurchased 5,785,525 shares at a total cost of $77.1 million (average $13.33 per share) during the six months ended December 31, 2018, under its third share repurchase program[201] Comparison of Operating Results for the Three Months Ended December 31, 2018 and December 31, 2017 Net income for the three months ended December 31, 2018, was $10.8 million ($0.12 diluted EPS), an increase of $9.5 million from $1.3 million ($0.02 diluted EPS) in the prior year, driven by higher net interest income and non-interest income, partially offset by increased provision for loan losses and non-interest expense, with a decreased income tax provision due to federal tax reform Net Income This section analyzes the drivers of net income and diluted EPS for the three-month period | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Net Income | $10,768 | $1,269 | $9,499 | | Diluted EPS | $0.12 | $0.02 | $0.10 | Average Balance Sheet and Yields This section provides average balance sheet figures and yields for interest-earning assets and interest-bearing liabilities | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Average Interest-Earning Assets | $6,140,676 | $4,461,012 | $1,679,664 | | Average Yield on Interest-Earning Assets | 3.91% | 3.41% | 0.50% | | Average Interest-Bearing Liabilities | $5,164,348 | $3,517,187 | $1,647,161 | | Average Cost of Interest-Bearing Liabilities | 1.60% | 1.27% | 0.33% | Net Interest Income This section analyzes the changes in net interest income, interest rate spread, and net interest margin | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Net Interest Income | $39,349 | $26,835 | $12,514 | | Interest Rate Spread | 2.31% | 2.14% | 0.17% | | Net Interest Margin | 2.56% | 2.41% | 0.15% | - The increase in net interest income and spread primarily reflected the impact of the Clifton acquisition, which resulted in "post-acquisition" yields/costs reflecting comparable market rates at acquisition[211][215] Interest Income This section details the components of interest income, particularly from loans, and their average balances and yields | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Total Interest Income | $60,022 | $38,032 | $21,990 | | Interest Income from Loans | $49,015 | $30,610 | $18,405 | | Average Balance of Loans | $4,758,587 | $3,255,862 | $1,502,725 | | Average Yield on Loans | 4.12% | 3.76% | 0.36% | - The increase in average loan balance and yield primarily reflected the effects of the Clifton acquisition, where post-acquisition yields on acquired loans reflected comparable market interest rates[215] Interest Expense This section details the components of interest expense, particularly from deposits and borrowings, and their average costs | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Total Interest Expense | $20,673 | $11,197 | $9,476 | | Interest Expense on Deposits | $12,727 | $6,649 | $6,078 | | Average Balance of Interest-Bearing Deposits | $3,751,597 | $2,709,121 | $1,042,476 | | Average Cost of Interest-Bearing Deposits | 1.36% | 0.98% | 0.38% | | Interest Expense on Borrowings | $7,946 | $4,548 | $3,398 | | Average Balance of Borrowings | $1,412,751 | $808,066 | $604,685 | - The increase in average interest-bearing deposits reflected the combined effects of the Clifton acquisition and organic growth, partially offset by a decrease in wholesale interest-bearing checking accounts[218] Provision for Loan Losses This section explains the factors contributing to the provision for loan losses | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Provision for Loan Losses | $971 | $936 | $35 | - The increase was attributable to a higher provision on non-impaired loans collectively evaluated for impairment, partially offset by a decrease in the provision attributable to loans individually reviewed for impairment[221] Non-Interest Income This section analyzes the components of non-interest income, including bank-owned life insurance and loan sale gains | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Total Non-Interest Income | $3,309 | $3,263 | $46 | | Income from bank owned life insurance | $1,599 | $1,264 | $335 | | Gain on sale of loans | $101 | $200 | $(99) | | Fees and service charges | $1,258 | $1,409 | $(151) | - The increase in bank-owned life insurance income was largely attributable to additional income earned on policies acquired in the Clifton acquisition[225] Non-Interest Expenses This section details the components of non-interest expenses, including salaries, occupancy, and equipment costs | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Total Non-Interest Expense | $27,270 | $22,764 | $4,506 | | Salaries and employee benefits | $15,699 | $12,852 | $2,847 | | Net occupancy expense of premises | $2,761 | $2,122 | $639 | | Equipment and systems | $3,377 | $2,193 | $1,184 | | Merger-related expenses | $0 | $1,193 | $(1,193) | - Equipment and systems expense included $551,000 of non-recurring information technology expenses related to the October 2018 conversion and integration of Clifton's core processing system[230] Provision for Income Taxes This section analyzes the provision for income taxes and the effective tax rate, considering tax reform impacts | Metric | 3 Months Ended Dec 31, 2018 (in thousands) | 3 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Provision for Income Taxes | $3,649 | $5,129 | $(1,480) | | Effective Income Tax Rate | 25.31% | 80.17% | $(54.86)% | | Statutory Federal Tax Rate | 21% | 28% | $(7)% | - The decrease in the effective tax rate primarily reflected the impact of federal income tax reform (Tax Act) and was partially offset by changes enacted by the State of New Jersey to its income tax laws[238] Comparison of Operating Results for the Six Months Ended December 31, 2018 and December 31, 2017 Net income for the six months ended December 31, 2018, was $21.9 million ($0.23 diluted EPS), an increase of $15.4 million from $6.5 million ($0.08 diluted EPS) in the prior year, driven by higher net interest income and non-interest income, partially offset by increased provision for loan losses and non-interest expense, with a decreased income tax provision due to federal tax reform Net Income This section analyzes the drivers of net income and diluted EPS for the six-month period | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Net Income | $21,914 | $6,501 | $15,413 | | Diluted EPS | $0.23 | $0.08 | $0.15 | Average Balance Sheet and Yields This section provides average balance sheet figures and yields for interest-earning assets and interest-bearing liabilities | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Average Interest-Earning Assets | $6,066,195 | $4,461,133 | $1,605,062 | | Average Yield on Interest-Earning Assets | 3.90% | 3.39% | 0.51% | | Average Interest-Bearing Liabilities | $5,069,164 | $3,496,451 | $1,572,713 | | Average Cost of Interest-Bearing Liabilities | 1.53% | 1.26% | 0.27% | Net Interest Income This section analyzes the changes in net interest income, interest rate spread, and net interest margin | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Net Interest Income | $79,529 | $53,645 | $25,884 | | Interest Rate Spread | 2.37% | 2.13% | 0.24% | | Net Interest Margin | 2.62% | 2.40% | 0.22% | - The increase in net interest income and spread primarily reflected the impact of the Clifton acquisition, which resulted in "post-acquisition" yields/costs reflecting comparable market rates at acquisition[247][251] Interest Income This section details the components of interest income, particularly from loans, and their average balances and yields | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Total Interest Income | $118,228 | $75,624 | $42,604 | | Interest Income from Loans | $96,452 | $61,083 | $35,369 | | Average Balance of Loans | $4,660,481 | $3,256,663 | $1,403,818 | | Average Yield on Loans | 4.14% | 3.75% | 0.39% | - The increase in average loan balance and yield primarily reflected the effects of the Clifton acquisition, where post-acquisition yields on acquired loans reflected comparable market interest rates[251] Interest Expense This section details the components of interest expense, particularly from deposits and borrowings, and their average costs | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Total Interest Expense | $38,699 | $21,979 | $16,720 | | Interest Expense on Deposits | $23,266 | $12,868 | $10,398 | | Average Balance of Interest-Bearing Deposits | $3,667,242 | $2,687,346 | $979,896 | | Average Cost of Interest-Bearing Deposits | 1.27% | 0.96% | 0.31% | | Interest Expense on Borrowings | $15,433 | $9,111 | $6,322 | | Average Balance of Borrowings | $1,401,922 | $809,105 | $592,817 | - The increase in average interest-bearing deposits reflected the combined effects of the Clifton acquisition and organic growth, partially offset by a decrease in wholesale interest-bearing checking accounts[254] Provision for Loan Losses This section explains the factors contributing to the provision for loan losses | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Provision for Loan Losses | $3,071 | $1,566 | $1,505 | - The increase was attributable to a higher provision on non-impaired loans collectively evaluated for impairment, partially offset by a decrease in the provision attributable to losses recognized on loans individually reviewed for impairment[257] Non-Interest Income This section analyzes the components of non-interest income, including bank-owned life insurance and loan sale gains | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Total Non-Interest Income | $6,491 | $6,357 | $134 | | Income from bank owned life insurance | $3,193 | $2,531 | $662 | | Gain on sale of loans | $233 | $531 | $(298) | | Fees and service charges | $2,431 | $2,670 | $(239) | - The increase in bank-owned life insurance income was largely attributable to additional income earned on policies acquired in the Clifton acquisition[260] Non-Interest Expenses This section details the components of non-interest expenses, including salaries, occupancy, and equipment costs | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Total Non-Interest Expense | $53,727 | $44,050 | $9,677 | | Salaries and employee benefits | $31,341 | $25,645 | $5,696 | | Net occupancy expense of premises | $5,497 | $4,103 | $1,394 | | Equipment and systems | $6,303 | $4,383 | $1,920 | | Merger-related expenses | $0 | $1,193 | $(1,193) | - Equipment and systems expense included $551,000 of non-recurring information technology expenses related to the October 2018 conversion and integration of Clifton's core processing system[265] Provision for Income Taxes This section analyzes the provision for income taxes and the effective tax rate, considering tax reform impacts | Metric | 6 Months Ended Dec 31, 2018 (in thousands) | 6 Months Ended Dec 31, 2017 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Provision for Income Taxes | $7,308 | $7,885 | $(577) | | Effective Income Tax Rate | 25.01% | 54.81% | $(29.80)% | | Statutory Federal Tax Rate | 21% | 28% | $(7)% | - The decrease in the effective tax rate primarily reflected the impact of federal income tax reform (Tax Act) and was partially offset by changes enacted by the State of New Jersey to its income tax laws[272] Liquidity and Capital Resources This section assesses the company's liquidity position and capital adequacy, including regulatory capital ratios - Cash and cash equivalents decreased by $77.4 million to $51.5 million at December 31, 2018, reflecting an ongoing effort to limit lower-yielding liquid assets and reinvest into higher-yielding assets[274] - The Bank exceeded all capital requirements of federal banking regulators as of December 31, 2018, maintaining its status as a well-capitalized institution[282] | Capital Ratio (Bank) | Dec 31, 2018 Actual | Jun 30, 2018 Actual | Minimum for Well Capitalized | | :--------------------------------------- | :------------------ | :------------------ | :--------------------------- | | Total Capital (to risk-weighted assets) | 21.59% | 24.07% | 10.00% | | Tier 1 Capital (to risk-weighted assets) | 20.80% | 23.31% | 8.00% | | Common Equity Tier 1 Capital (to risk-weighted assets) | 20.80% | 23.31% | 6.50% | | Tier 1 Capital (to adjusted total assets) | 13.60% | 15.10% | 5.00% | Off-Balance Sheet Arrangements This section discloses the company's off-balance sheet commitments, such as loan commitments and unused lines of credit - Outstanding commitments to originate and purchase loans held in portfolio totaled approximately $34.3 million at December 31, 2018[276] - Unused lines of credit were $77.1 million, and outstanding letters of credit totaled $1.1 million at December 31, 2018[277] Recent Accounting Pronouncements This section refers to Note 6 for a discussion of the expected impact of recently issued accounting pronouncements - Refer to Note 6 for a discussion of the expected impact of recently issued accounting pronouncements not yet adopted by the Company[286] Item 3: Quantitative and Qualitative Disclosure About Market Risk This section details the Company's approach to managing interest rate risk, a primary business risk, through its Asset/Liability Management (ALM) Program, including both qualitative analysis of various risk factors and quantitative analysis using Economic Value of Equity (EVE) and Net Interest Income (NII) sensitivity measures Qualitative Analysis This section provides a qualitative assessment of interest rate risk, considering various risk factors and their impact on earnings and capital - Interest rate risk is defined as the risk to earnings or capital from interest rate movements, influenced by re-pricing, basis, yield curve, and option risks[289] - Net interest income, the largest revenue source, is significantly influenced by interest rate movements and the spread between interest earned on assets and interest paid on liabilities[290][291] - At December 31, 2018, $1.55 billion (67.2%) of certificates of deposit mature within one year, and $1.98 billion of loans maturing after one year had fixed rates, while $2.72 billion had adjustable rates[292][297] Quantitative Analysis This section presents quantitative measures of interest rate risk, including Economic Value of Equity (EVE) and Net Interest Income (NII) sensitivity - Quantitative analysis measures interest rate risk from capital (Economic Value of Equity, EVE) and earnings (Net Interest Income, NII) perspectives[306][312] - The dollar amount of EVE and EVE ratios declined across all modeled scenarios at December 31, 2018, compared to June 30, 2018, primarily reflecting the decrease in stockholders' equity due to common stock repurchases[310] | Interest Rate Change | Dec 31, 2018 EVE ($ Change in thousands) | Dec 31, 2018 EVE Ratio (% Change) | Jun 30, 2018 EVE ($ Change in thousands) | Jun 30, 2018 EVE Ratio (% Change) | | :------------------- | :--------------------------------------- | :-------------------------------- | :--------------------------------------- | :-------------------------------- | | +300 bps | $(204,039) | (199) bps | $(212,562) | (193) bps | | +200 bps | $(138,534) | (130) bps | $(148,847) | (132) bps | | +100 bps | $(60,731) | (50) bps | $(69,079) | (55) bps | | 0 bps | - | - | - | - | | -100 bps | $11,521 | (21) bps | $9,553 | (32) bps | | -200 bps | $(18,652) | (98) bps | N/A | N/A | | Interest Rate Change | Dec 31, 2018 NII ($ Change in thousands) | Dec 31, 2018 NII (% Change) | Jun 30, 2018 NII ($ Change in thousands) | Jun 30, 2018 NII (% Change) | | :------------------- | :--------------------------------------- | :-------------------------- | :--------------------------------------- | :-------------------------- | | +300 bps | $(11,929) | (7.61)% | $(6,540) | (4.14)% | | +200 bps | $(8,063) | (5.14)% | $(4,168) | (2.64)% | | +100 bps | $(3,387) | (2.16)% | $(1,343) | (0.85)% | | 0 bps | - | - | - | - | | -100 bps | $(2,033) | (1.30)% | $(5,004) | (3.17)% | | -200 bps | $(6,694) | (4.27)% | N/A | N/A | Item 4: Controls and Procedures The Company's management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of December 31, 2018, concluding they were effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of December 31, 2018[320] - No material changes to internal control over financial reporting occurred during the quarter ended December 31, 2018[321] PART II—OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and required exhibits Item 1. Legal Proceedings As of December 31, 2018, neither the Company nor the Bank were involved in any legal proceedings other than routine matters considered immaterial to their financial condition - As of December 31, 2018, the Company and Bank were not involved in any material legal proceedings beyond routine business operations[323] Item 1A. Risk Factors There have been no material changes to the Risk Factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended June 30, 2018 - No material changes to Risk Factors were disclosed compared to the Annual Report on Form 10-K for the year ended June 30, 2018[324] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Company repurchased 3,827,925 shares of common stock during the quarter ended December 31, 2018, at an average price of $13.11 per share, under its third stock repurchase plan authorized in April 2018 | Period | Total Shares Purchased | Average Price Paid per Share | Remaining Shares under Plan | | :------------------ | :--------------------- | :--------------------------- | :-------------------------- | | October 1-31, 2018 | 1,421,950 | $13.44 | 4,163,547 | | November 1-30, 2018 | 1,264,529 | $13.16 | 2,899,018 | | December 1-31, 2018 | 1,141,446 | $12.64 | 1,757,572 | | Total (Q4 2018) | 3,827,925 | $13.11 | 1,757,572 | - The third stock repurchase plan, authorized on April 27, 2018, allows for the repurchase of up to 10,238,557 shares (10% of outstanding shares) with no expiration date[327] Item 3. Defaults Upon Senior Securities This item is not applicable to the Company - Not applicable[328] Item 4. Mine Safety Disclosures This item is not applicable to the Company - Not applicable[328] Item 5. Other Information No other information is reported under this item - None[328] Item 6. Exhibits This section lists the exhibits filed as part of the report, including articles of incorporation, bylaws, common stock certificate form, CEO and CFO certifications (Sarbanes-Oxley Act Sections 302 and 906), and XBRL formatted financial statements - Exhibits include Articles of Incorporation, Bylaws, Common Stock Certificate, CEO and CFO certifications (Sarbanes-Oxley Act Sections 302 and 906), and XBRL formatted financial statements[330] SIGNATURES The report is signed by Craig L. Montanaro, President and Chief Executive Officer, and Keith Suchodolski, Executive Vice President and Chief Financial Officer, on February 8, 2019 - The report was signed by Craig L. Montanaro (President and CEO) and Keith Suchodolski (EVP and CFO) on February 8, 2019[334]