Columbia Financial Inc. reported net income of $10.8 million, or $0.10 per basic and diluted share, for the three months ended Sept. 30, 2018, compared to net income of $1.5 million for the three months ended Sept. 30, 2017.

The Sept. 30, 2018 quarterly earnings reflect increased tax expense of $2.2 million as a result of the changes in the New Jersey corporate business tax signed into law on July 1, 2018 (Assembly Bill 4202). The Sept. 30, 2017 quarterly earnings reflected $3.3 million of cash contributions to the Columbia Bank Foundation.

Excluding the charitable contribution and gains or losses on the sale of investment securities, core net income would have been $35.3 million for the nine months ended Sept.30, 2018, an increase of 34.6%, compared with core net income of $26.2 million for the nine months ended Sept. 30, 2017.

"We experienced solid financial results during the quarter driven primarily by loan growth within the multifamily and commercial sectors and a slight improvement of our yield on investment securities,”  said Thomas Kemly, president and CEO. “We do, however, continue to experience margin compression driven by the increasing cost of deposits and borrowings given the current interest rate and competitive environment."

For the nine months ended Sept. 30, 2018, the Columbia reported net income of $7.9 million, or $0.07 per basic and diluted share, compared to net income of $21.1 million for the nine months ended Sept. 30, 2017. The decrease in earnings for the nine-month period is driven primarily by the one-time contribution of company shares to the Columbia Bank Foundation, during the quarter ended June 30, 2018 in connection with the completion of the minority stock offering.

Other highlights from the quarterly filing are as follows:

• The total non-performing loans as of  30, 2018was $3.9 million, or 0.08% of total loans as compared to $6.5 million, or 0.15%, of total loans at Dec. 31, 2017, and $3.8 million or 0.08% of total loans at June 30, 2018. Columbia held $251,000 in foreclosed assets at Sept. 30, 2018, as compared to $959 thousand at Dec. 31, 2017 and $660 thousand at June 30, 2018. Non-performing assets as a percentage of total assets were 0.06% at Sept. 30, 2018 as compared to 0.13% at Dec. 31, 2017 and 0.07% at June 30, 2018.
• The bank transferred classified residential and home equity loans totaling $2.4 million from the loans held-for-investment portfolio to the loans held-for-sale portfolio during the three months ended September 30, 2018. It recorded charge-offs on these transferred loans of $482,000 during the three months ended  30, 2018. The pending loan sale is expected to close during the fourth quarter of 2018.
• The bank's allowance for loan losses was $63.4 million, or 1.30% of total loans at 30, 2018, as compared to $58.2 million or 1.31% of total loans at Dec. 31, 2017 and $62.5 million or 1.35% of total loans at June 30, 2018.
• Total assets increased $801.4 million, or 13.9%, to $6.6 billion at  30, 2018 from $5.8 billion at Dec. 31, 2017. The increase in total assets was primarily attributed to increases in loans receivable, net, of $442.8 million and available-for-sale securities of $276.5 million. Loan growth was funded by $492.4 million of net proceeds from the minority stock offering and increased borrowings and deposits.
• Loans receivable, net increased $442.8 million to $4.8 billion at September 30, 2018 from $4.4 billion at Dec. 31, 2017. Multifamily and commercial, one-to-four family, construction loans and commercial business lending contributed $217.9 million, $207.0 million, $36.1 million and $26.3 million respectively to our loan growth. Home equity loans and advances declined $44 million between  Dec. 31, 2017 and Sept. 30, 2018. The decrease in home equity loans and advances was driven by lower originations.

Mortgage delinquencies reported a double-digit increase,13 percent, but it’s just a temporary blip, and delinquencies will continue to decline.

“This is a blip, not a long-term trend. The industry is heading into a seasonal rise in the fall, and a drop in the spring. The increase was not credit driven,” said Andy Walden, director of market research at Black Knight.

Three factors drove the increase: First, the last day of the month fell on a Sunday, so there was no one in the servicing shops to process payments.

The previous three times the last day of September (2001, 2007 and 2012) fell on a Sunday—delinquencies average 13.2 percent--consistent with the 13 percent delinquency rate recorded in September. That’s the largest single-month increase since November 2008.

Second, September is a month when borrowers are paying tuition bills, or other large bills, and some borrowers don’t have the funds so they miss their mortgage payment.

And the statistics bear that out.

Fully 16 of the last 19 Septembers have seen delinquencies increase, averaging a 5.2 percent rise over that time frame, the largest of any month during the calendar year.

Delinquency rates for borrowers will continue to increase in October, since borrowers will not be focused on paying their mortgage, but will be working on fixing their homes, noted Walden. The forbearance programs that Fannie Mae and Freddie Mac offered in the wake of the hurricane will help borrowers, but participants in those programs will still be recorded as delinquent for purposes of Black Knight’s statistics.

Third, the Hurricane Florence was a factor, but a small one compared with the first two forces. Fully 6,000 borrowers, or 2.5 percent, of the increase. However, in September delinquencies increased 38 percent compared with the previous month.

Fidelity National Financial Inc. has reported total revenue of around $2.1 billion in the third quarter compared with $2.0 billion in the third quarter of 2017. And, over all, the third quarter average title fee per file was $2,623, an 11% increase compared to the third quarter of 2017. Fidelity National provides title insurance and transaction services to the real estate and mortgage industries.

In addition, the company announced the following financial performance results:

• Third quarter net earnings of $236 million and adjusted net earnings of $218 million versus net earnings from continuing operations of $156 million and adjusted net earnings from continuing operations of $174 million for the third quarter of 2017.
• Third quarter diluted EPS of $0.85 and adjusted diluted EPS of $0.78 versus diluted EPS from continuing operations of $0.57 and adjusted diluted EPS from continuing operations of $0.63 in the third quarter of 2017.

Title Insurance 

• Total revenue of around $1.9 billion versus approximately $1.9 billion in total revenue in the third quarter of 2017.
• Pre-tax earnings of $309 million and adjusted pre-tax earnings of $297 million compared to pre-tax earnings of $262 million and adjusted pre-tax earnings of $287 million in the third quarter of 2017.
• Pre-tax title margin of 16.2% and adjusted pre-tax title margin of 15.6% versus pre-tax title margin of 14.0% and adjusted pre-tax title margin of 15.3% in the third quarter of 2017.
• Third quarter purchase orders opened increased 0.3% and purchase orders closed decreased 1%, compared to the third quarter of 2017.
• Total commercial revenue of $271 million, an 8% increase over total commercial revenue in the third quarter of 2017. It was driven by a 16% increase in total commercial fee per file and a 7% decrease in closed orders; third quarter total commercial open orders increased 1% compared to the prior year.
• Overall third quarter average fee per file of $2,623, an 11% increase versus the third quarter of 2017.

"The third quarter was a solid performance for our title business, as we generated adjusted pre-tax title earnings of $297 million and a 15.6% adjusted pre-tax title margin, increases of $10 million and 30 basis points, respectively, over the third quarter of 2017," said William P. Foley, chairman of Fidelity National. "The commercial and residential purchase markets continued to be the main drivers of our performance in the third quarter, as total commercial revenue grew by 8% versus the third quarter of 2017, continuing a very strong year for our commercial business. While residential purchase open orders per day increased by 0.3% and residential purchase closed orders per day declined by 1%, this was offset by an 11% increase in the fee per file that provided 3% growth in direct title premiums over the prior year.  As we enter the seasonally slower fourth quarter, we will remain focused on our operating metrics and staffing levels in order to maximize our profitability.”

Stewart Information Acquisition

"We continue to work through the regulatory process for the Stewart Information Services acquisition that we announced on March 19," said Foley.  "We are currently engaged in the Second Request related to the FTC's HSR regulatory review of the transaction. Responses to nearly all the FTC's requests for information and documentation have been submitted. The Form A filings with the states of Texas and New York are being reviewed by those states. We still anticipate a first or second quarter of 2019 closing for the transaction and continue to believe the Stewart acquisition will create meaningful long-term value for our shareholders."