• Kearny Financial Corp. Announces First Quarter Fiscal 2024 Results and Declaration of Cash Dividend

    ソース: Nasdaq GlobeNewswire / 26 10 2023 08:30:01   America/New_York

    FAIRFIELD, N.J., Oct. 26, 2023 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported net income for the quarter ended September 30, 2023 of $9.8 million, or $0.16 per diluted share, compared to $12.0 million, or $0.19 per diluted share, for the quarter ended June 30, 2023.

    The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on November 22, 2023, to stockholders of record as of November 8, 2023.

    Craig L. Montanaro, President and Chief Executive Officer, commented, “In the face of ongoing industry-wide macro-economic headwinds we continue to execute strategies to mitigate risk, manage our operating expenses and support the long-term franchise value of the Company. To that end, this quarter we de-levered our balance sheet by an additional $90 million, meaningfully slowed net interest margin compression and continued to focus on building high-value loan and deposit relationships. To further support these efforts we have formed a new Corporate Banking division under the executive leadership of our Chief Banking Officer, Anthony Bilotta. This division has been staffed with seasoned banking professionals whose sole focus is the origination of stable, long-term, non-interest-bearing deposits of corporate clients.”

    Mr. Montanaro continued, “I am further pleased to announce that, subsequent to quarter end, we launched our enhanced digital banking platform, which expands our client-facing online and mobile capabilities while providing a state-of-the-art user experience. Our continued focus on digital engagement complements our high-touch, personalized service model and allows us to expand our brand into new markets in an efficient and cost-effective manner.”

    Balance Sheet

    • Total assets were $7.97 billion at September 30, 2023, a decrease of $89.9 million, or 1.1%, from June 30, 2023.
    • Investment securities totaled $1.36 billion at September 30, 2023, a decrease of $14.8 million, or 1.1%, from June 30, 2023.
    • Loans receivable totaled $5.74 billion at September 30, 2023, a decrease of $93.4 million, or 1.6%, from June 30, 2023. The decrease for the quarter was largely driven by decreases in multi-family and nonresidential mortgage loans.
    • Deposits were $5.43 billion at September 30, 2023, a decrease of $195.0 million, or 3.5%, from June 30, 2023. The decrease in deposits was largely concentrated in retail and brokered certificates of deposits and consumer savings.
    • The aggregate amount of uninsured deposits was $1.73 billion at September 30, 2023. Excluding collateralized deposits of state and local governments and deposits of the Bank’s wholly-owned subsidiary and holding company, the aggregate amount of uninsured deposits was $683.3 million, or 12.6% of total deposits.
    • Borrowings were $1.63 billion at September 30, 2023, an increase of $120.1 million, or 8.0%, from June 30, 2023. The increase in borrowings was driven by an increase in advances from the Federal Home Loan Bank of New York and resulted from the deposit decline previously disclosed.
    • At September 30, 2023, the Company maintained available secured borrowing capacity of $2.09 billion, of which $1.65 billion was immediately accessible via in-place collateral and $444.3 million represented the market value of unpledged securities.

    Earnings

    Performance Highlights

    • Return on average assets was 0.49% and 0.59% for the quarters ended September 30, 2023 and June 30, 2023, respectively.
    • Return on average equity was 4.57% and 5.58% for the quarters ended September 30, 2023 and June 30, 2023, respectively.
    • Return on average tangible equity was 6.07% and 7.41% for the quarters ended September 30, 2023 and June 30, 2023, respectively.

    Net Interest Income and Net Interest Margin

    • Net interest margin contracted one basis point to 2.10% for the quarter ended September 30, 2023. The decrease for the quarter was driven by an increase in the cost of interest-bearing liabilities and a decrease in the average balance of interest-earning assets, largely offset by a higher average yield on interest-earning assets.
    • For the quarter ended September 30, 2023, net interest income decreased $1.0 million to $39.2 million from $40.2 million for the quarter ended June 30, 2023. Included in net interest income for the quarters ended September 30, 2023 and June 30, 2023, respectively, was purchase accounting accretion of $650,000 and $887,000, and loan prepayment penalty income of $267,000 and $185,000.

    Non-Interest Income

    • For the quarter ended September 30, 2023, non-interest income increased $344,000 from the quarter ended June 30, 2023 to $4.0 million. The increase was primarily attributable to higher income from the investment services division and the impact of a loss on the sale of real estate during the prior comparative period.

    Non-Interest Expense

    • For the quarter ended September 30, 2023, non-interest expense increased $1.0 million, or 3.5%, to $29.8 million from $28.8 million for the quarter ended June 30, 2023. The increase was primarily attributable to a $446,000 increase in compensation expense and a $205,000 increase in real estate owned expenses, partially offset by a $104,000 decrease in occupancy expense attributable to our previously announced branch closures.
    • Equipment and systems expense increased $290,000 from the quarter ended June 30, 2023 due to a non-recurring vendor expense credit that was recorded in the prior comparative period.
    • The efficiency and non-interest expense ratios were 68.97% and 1.49%, respectively, for the quarter ended September 30, 2023, as compared to 65.60% and 1.41%, respectively, for the quarter ended June 30, 2023.

    Income Taxes

    • Income tax expense totaled $3.3 million for the quarter ended September 30, 2023 compared to $3.4 million for the quarter ended June 30, 2023, resulting in an effective tax rate of 25.2% and 21.9%, respectively. The effective tax rate for the current quarter was elevated due to the discrete tax cost associated with the vesting of certain stock-based compensation awards.

    Asset Quality

    • The balance of non-performing assets decreased $4.7 million to $50.9 million, or 0.64% of total assets, at September 30, 2023, from $55.6 million, or 0.69% of total assets, at June 30, 2023.
    • Net charge-offs totaled $2.1 million, or 0.15% of average loans, on an annualized basis, for the quarter ended September 30, 2023, compared to $82,000, or 0.01% of average loans, on an annualized basis, for the quarter ended June 30, 2023. All of the charge-offs recorded during the quarter ended September 30, 2023 had previously been individually reserved for within the allowance for credit losses.
    • For the quarter ended September 30, 2023, the Company recorded a provision for credit losses of $245,000, compared to a reversal of credit losses of $306,000 for the quarter ended June 30, 2023. The provision for credit loss expense for the quarter ended September 30, 2023 was largely driven by an increase in reserves on individually analyzed loans and a slower prepayment rate assumption, partially offset by a decrease in the balance of loans receivable.
    • The allowance for credit losses was $46.9 million, or 0.81% of total loans, at September 30, 2023, compared to $48.7 million, or 0.83% of total loans, at June 30, 2023.

    Capital

    • During the quarter ended September 30, 2023, the Company repurchased 817,607 shares of common stock at a cost of $6.4 million, or $7.84 per share.
    • For the quarter ended September 30, 2023, book value per share decreased $0.16, or 1.2%, to $13.04 while tangible book value per share decreased $0.19, or 1.9%, to $9.77. These decreases were largely driven by an increase in accumulated other comprehensive loss.
    • At September 30, 2023, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $131.4 million, partially offset by after-tax unrealized gains on derivatives of $44.8 million. After-tax net unrecognized losses on securities held to maturity of $14.7 million were not reflected in total stockholders’ equity.
    • At September 30, 2023, the Company’s tangible equity to tangible assets ratio equaled 8.20% and the regulatory capital ratios of both the Company and the Bank were in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.

    This earnings release should be read in conjunction with Kearny Financial Corp.’s Q1 2024 Investor Presentation, a copy of which is available through the Investor Relations link located at the bottom of the page of our website at www.kearnybank.com and via a Current Report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.

    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.

    Category: Earnings

    Linked-Quarter Comparative Financial Analysis


    Kearny Financial Corp.
    Consolidated Balance Sheets

    (Dollars and Shares in Thousands,
    Except Per Share Data)    		September 30,
    2023    		June 30,
    2023    		Variance
    or Change    		Variance
    or Change Pct.
     (Unaudited)(Audited)  
    Assets    
    Cash and cash equivalents$57,219 $70,515 $(13,296)-18.9%
    Securities available for sale 1,215,633  1,227,729  (12,096)-1.0%
    Securities held to maturity 143,730  146,465  (2,735)-1.9%
    Loans held-for-sale 3,934  9,591  (5,657)-59.0%
    Loans receivable 5,736,049  5,829,421  (93,372)-1.6%
    Less: allowance for credit losses on loans (46,872) (48,734) (1,862)-3.8%
    Net loans receivable 5,689,177  5,780,687  (91,510)-1.6%
    Premises and equipment 46,868  48,309  (1,441)-3.0%
    Federal Home Loan Bank stock 81,509  71,734  9,775 13.6%
    Accrued interest receivable 29,766  28,133  1,633 5.8%
    Goodwill 210,895  210,895  — —%
    Core deposit intangible 2,323  2,457  (134)-5.5%
    Bank owned life insurance 294,491  292,825  1,666 0.6%
    Deferred income taxes, net 56,500  51,973  4,527 8.7%
    Other real estate owned 12,956  12,956  — —%
    Other assets 129,865  110,546  19,319 17.5%
    Total assets$7,974,866 $8,064,815 $(89,949)-1.1%
         
    Liabilities    
    Deposits:    
    Non-interest-bearing$595,141 $609,999 $(14,858)-2.4%
    Interest-bearing 4,839,027  5,019,184  (180,157)-3.6%
    Total deposits 5,434,168  5,629,183  (195,015)-3.5%
    Borrowings 1,626,933  1,506,812  120,121 8.0%
    Advance payments by borrowers for taxes 16,907  18,338  (1,431)-7.8%
    Other liabilities 47,324  41,198  6,126 14.9%
    Total liabilities 7,125,332  7,195,531  (70,199)-1.0%
         
    Stockholders' Equity    
    Common stock 652  659  (7)-1.1%
    Paid-in capital 497,269  503,332  (6,063)-1.2%
    Retained earnings 460,464  457,611  2,853 0.6%
    Unearned ESOP shares (22,375) (22,862) 487 2.1%
    Accumulated other comprehensive loss (86,476) (69,456) (17,020)-24.5%
    Total stockholders' equity 849,534  869,284  (19,750)-2.3%
    Total liabilities and stockholders' equity$7,974,866 $8,064,815 $(89,949)-1.1%
         
    Consolidated capital ratios    
    Equity to assets 10.65% 10.78% -0.13% 
    Tangible equity to tangible assets (1) 8.20% 8.35% -0.15% 
         
    Share data    
    Outstanding shares 65,132  65,864  (732)-1.1%
    Book value per share$13.04 $13.20 $(0.16)-1.2%
    Tangible book value per share (2)$9.77 $9.96 $(0.19)-1.9%


    _________________________
    (1)Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets.
    (2)Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.
      


    Kearny Financial Corp.
    Consolidated Statements of Income
    (Unaudited)

    (Dollars and Shares in Thousands,
    Except Per Share Data)
    		Three Months EndedVariance
    or Change
    		Variance
    or Change Pct.
    September 30,
    2023    		June 30,
    2023
    Interest income    
    Loans$62,769 $62,044 $725 1.2%
    Taxable investment securities 16,265  15,736  529 3.4%
    Tax-exempt investment securities 87  91  (4)-4.4%
    Other interest-earning assets 2,047  1,821  226 12.4%
    Total interest income 81,168  79,692  1,476 1.9%
         
    Interest expense    
    Deposits 27,567  26,226  1,341 5.1%
    Borrowings 14,441  13,286  1,155 8.7%
    Total interest expense 42,008  39,512  2,496 6.3%
    Net interest income 39,160  40,180  (1,020)-2.5%
    Provision for (reversal of) credit losses 245  (306) 551 -180.1%
    Net interest income after provision for (reversal of) credit losses 38,915  40,486  (1,571)-3.9%
         
    Non-interest income    
    Fees and service charges 748  699  49 7.0%
    Gain on sale of loans 215  199  16 8.0%
    Loss on sale of other real estate owned —  (139) 139 100.0%
    Income from bank owned life insurance 1,666  1,605  61 3.8%
    Electronic banking fees and charges 367  399  (32)-8.0%
    Other income 1,014  903  111 12.3%
    Total non-interest income 4,010  3,666  344 9.4%
         
    Non-interest expense    
    Salaries and employee benefits 17,761  17,315  446 2.6%
    Net occupancy expense of premises 2,758  2,862  (104)-3.6%
    Equipment and systems 3,801  3,511  290 8.3%
    Advertising and marketing 228  231  (3)-1.3%
    Federal deposit insurance premium 1,524  1,455  69 4.7%
    Directors' compensation 393  345  48 13.9%
    Other expense 3,309  3,042  267 8.8%
    Total non-interest expense 29,774  28,761  1,013 3.5%
    Income before income taxes 13,151  15,391  (2,240)-14.6%
    Income taxes 3,309  3,378  (69)-2.0%
    Net income$9,842 $12,013 $(2,171)-18.1%
         
    Net income per common share (EPS)    
    Basic$0.16 $0.19 $(0.03) 
    Diluted$0.16 $0.19 $(0.03) 
         
    Dividends declared    
    Cash dividends declared per common share$0.11 $0.11 $—  
    Cash dividends declared$6,989 $7,007 $(18) 
    Dividend payout ratio 71.0% 58.3% 12.7% 
         
    Weighted average number of common shares outstanding    
    Basic 63,014  63,667  (653) 
    Diluted 63,061  63,667  (606) 
               


    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)

    (Dollars in Thousands)
    		Three Months EndedVariance
    or Change
    		Variance
    or Change Pct.
    September 30,
    2023    		June 30,
    2023
    Assets    
    Interest-earning assets:    
    Loans receivable, including loans held for sale$5,788,074 $5,932,541 $(144,467)-2.4%
    Taxable investment securities 1,516,393  1,529,582  (13,189)-0.9%
    Tax-exempt investment securities 15,483  16,346  (863)-5.3%
    Other interest-earning assets 130,829  128,158  2,671 2.1%
    Total interest-earning assets 7,450,779  7,606,627  (155,848)-2.0%
    Non-interest-earning assets 568,723  556,962  11,761 2.1%
    Total assets$8,019,502 $8,163,589 $(144,087)-1.8%
         
    Liabilities and Stockholders' Equity    
    Interest-bearing liabilities:    
    Deposits:    
    Interest-bearing demand$2,245,831 $2,321,120 $(75,289)-3.2%
    Savings 719,508  774,854  (55,346)-7.1%
    Certificates of deposit 1,968,512  2,057,818  (89,306)-4.3%
    Total interest-bearing deposits 4,933,851  5,153,792  (219,941)-4.3%
    Borrowings:    
    Federal Home Loan Bank advances 1,386,473  1,374,316  12,157 0.9%
    Other borrowings 158,098  100,055  58,043 58.0%
    Total borrowings 1,544,571  1,474,371  70,200 4.8%
    Total interest-bearing liabilities 6,478,422  6,628,163  (149,741)-2.3%
    Non-interest-bearing liabilities:    
    Non-interest-bearing deposits 612,251  608,765  3,486 0.6%
    Other non-interest-bearing liabilities 66,701  64,970  1,731 2.7%
    Total non-interest-bearing liabilities 678,952  673,735  5,217 0.8%
    Total liabilities 7,157,374  7,301,898  (144,524)-2.0%
    Stockholders' equity 862,128  861,691  437 0.1%
    Total liabilities and stockholders' equity$8,019,502 $8,163,589 $(144,087)-1.8%
         
    Average interest-earning assets to average interest-bearing liabilities 115.01% 114.76% 0.25%0.2%
                


    Kearny Financial Corp.
    Performance Ratio Highlights
    (Unaudited)

     Three Months EndedVariance
    or Change
     September 30,
    2023    		June 30,
    2023
    Average yield on interest-earning assets:   
    Loans receivable, including loans held for sale4.34%4.18%0.16%
    Taxable investment securities4.29%4.12%0.17%
    Tax-exempt investment securities (1)2.25%2.23%0.02%
    Other interest-earning assets6.26%5.68%0.58%
    Total interest-earning assets4.36%4.19%0.17%
        
    Average cost of interest-bearing liabilities:   
    Deposits:   
    Interest-bearing demand2.58%2.38%0.20%
    Savings0.47%0.48%-0.01%
    Certificates of deposit2.49%2.24%0.25%
    Total interest-bearing deposits2.23%2.04%0.19%
    Borrowings:   
    Federal Home Loan Bank advances3.54%3.51%0.03%
    Other borrowings5.46%4.89%0.57%
    Total borrowings3.74%3.60%0.14%
    Total interest-bearing liabilities2.59%2.38%0.21%
        
    Interest rate spread (2)1.77%1.81%-0.04%
    Net interest margin (3)2.10%2.11%-0.01%
        
    Non-interest income to average assets (annualized)0.20%0.18%0.02%
    Non-interest expense to average assets (annualized)1.49%1.41%0.08%
        
    Efficiency ratio (4)68.97%65.60%3.37%
        
    Return on average assets (annualized)0.49%0.59%-0.10%
    Return on average equity (annualized)4.57%5.58%-1.01%
    Return on average tangible equity (annualized) (5)6.07%7.41%-1.34%


    _________________________
    (1)The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
    (2)Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
    (3)Net interest income divided by average interest-earning assets.
    (4)Non-interest expense divided by the sum of net interest income and non-interest income.
    (5)Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.

      

    Five-Quarter Financial Trend Analysis


    Kearny Financial Corp.
    Consolidated Balance Sheets

    (Dollars and Shares in Thousands,
    Except Per Share Data)    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022
     (Unaudited)(Audited)(Unaudited)(Unaudited)(Unaudited)
    Assets     
    Cash and cash equivalents$57,219 $70,515 $194,568 $75,660 $96,076 
    Securities available for sale 1,215,633  1,227,729  1,267,066  1,286,354  1,263,176 
    Securities held to maturity 143,730  146,465  149,764  153,786  115,943 
    Loans held-for-sale 3,934  9,591  5,401  12,940  12,936 
    Loans receivable 5,736,049  5,829,421  5,966,325  5,984,133  5,656,370 
    Less: allowance for credit losses on loans (46,872) (48,734) (49,122) (48,877) (47,613)
    Net loans receivable 5,689,177  5,780,687  5,917,203  5,935,256  5,608,757 
    Premises and equipment 46,868  48,309  49,589  50,953  52,642 
    Federal Home Loan Bank stock 81,509  71,734  76,319  69,022  44,957 
    Accrued interest receivable 29,766  28,133  28,794  27,368  23,817 
    Goodwill 210,895  210,895  210,895  210,895  210,895 
    Core deposit intangible 2,323  2,457  2,590  2,732  2,876 
    Bank owned life insurance 294,491  292,825  291,220  289,673  289,690 
    Deferred income taxes, net 56,500  51,973  53,151  51,107  54,278 
    Other real estate owned 12,956  12,956  13,410  13,410  178 
    Other assets 129,865  110,546  89,366  110,162  113,369 
    Total assets$7,974,866 $8,064,815 $8,349,336 $8,289,318 $7,889,590 
          
    Liabilities     
    Deposits:     
    Non-interest-bearing$595,141 $609,999 $617,778 $650,950 $683,406 
    Interest-bearing 4,839,027  5,019,184  5,185,626  5,320,421  5,424,872 
    Total deposits 5,434,168  5,629,183  5,803,404  5,971,371  6,108,278 
    Borrowings 1,626,933  1,506,812  1,611,692  1,383,573  851,454 
    Advance payments by borrowers for taxes 16,907  18,338  18,706  17,307  16,555 
    Other liabilities 47,324  41,198  49,304  44,427  38,329 
    Total liabilities 7,125,332  7,195,531  7,483,106  7,416,678  7,014,616 
          
    Stockholders' Equity     
    Common stock 652  659  667  674  680 
    Paid-in capital 497,269  503,332  509,359  515,332  520,245 
    Retained earnings 460,464  457,611  452,605  449,489  454,710 
    Unearned ESOP shares (22,375) (22,862) (23,348) (23,834) (24,321)
    Accumulated other comprehensive loss (86,476) (69,456) (73,053) (69,021) (76,340)
    Total stockholders' equity 849,534  869,284  866,230  872,640  874,974 
    Total liabilities and stockholders' equity$7,974,866 $8,064,815 $8,349,336 $8,289,318 $7,889,590 
          
    Consolidated capital ratios     
    Equity to assets 10.65% 10.78% 10.37% 10.53% 11.09%
    Tangible equity to tangible assets (1) 8.20% 8.35% 8.02% 8.16% 8.61%
          
    Share data     
    Outstanding shares 65,132  65,864  66,680  67,388  67,938 
    Book value per share$13.04 $13.20 $12.99 $12.95 $12.88 
    Tangible book value per share (2)$9.77 $9.96 $9.79 $9.78 $9.73 


    _________________________
    (1)Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets.
    (2)Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.
      


    Kearny Financial Corp.
    Supplemental Balance Sheet Highlights
    (Unaudited)

    (Dollars in Thousands)September 30,
    2023    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022
    Loan portfolio composition:     
    Commercial loans:     
    Multi-family mortgage$2,699,151 $2,761,775 $2,835,852 $2,851,721 $2,570,297 
    Nonresidential mortgage 946,801  968,574  1,002,643  1,017,341  1,040,688 
    Commercial business 149,229  146,861  162,038  177,530  186,361 
    Construction 230,703  226,609  215,524  186,663  166,052 
    Total commercial loans 4,025,884  4,103,819  4,216,057  4,233,255  3,963,398 
    One- to four-family residential mortgage 1,689,051  1,700,559  1,713,343  1,719,514  1,666,730 
    Consumer loans:     
    Home equity loans 42,896  43,549  44,376  45,690  43,269 
    Other consumer 2,644  2,549  2,592  2,648  2,869 
    Total consumer loans 45,540  46,098  46,968  48,338  46,138 
    Total loans, excluding yield adjustments 5,760,475  5,850,476  5,976,368  6,001,107  5,676,266 
    Unaccreted yield adjustments (24,426) (21,055) (10,043) (16,974) (19,896)
    Loans receivable, net of yield adjustments 5,736,049  5,829,421  5,966,325  5,984,133  5,656,370 
    Less: allowance for credit losses on loans (46,872) (48,734) (49,122) (48,877) (47,613)
    Net loans receivable$5,689,177 $5,780,687 $5,917,203 $5,935,256 $5,608,757 
          
    Asset quality:     
    Nonperforming assets:     
    Accruing loans - 90 days and over past due$— $— $— $— $— 
    Nonaccrual loans 37,912  42,627  44,026  40,549  68,574 
    Total nonperforming loans 37,912  42,627  44,026  40,549  68,574 
    Nonaccrual loans held-for-sale —  —  —  8,650  8,650 
    Other real estate owned 12,956  12,956  13,410  13,410  178 
    Total nonperforming assets$50,868 $55,583 $57,436 $62,609 $77,402 
          
    Nonperforming loans (% total loans) 0.66% 0.73% 0.74% 0.68% 1.21%
    Nonperforming assets (% total assets) 0.64% 0.69% 0.69% 0.76% 0.98%
          
    Classified loans$98,616 $93,526 $103,461 $86,069 $92,610 
          
    Allowance for credit losses on loans (ACL):     
    ACL to total loans 0.81% 0.83% 0.82% 0.81% 0.84%
    ACL to nonperforming loans 123.63% 114.33% 111.57% 120.54% 69.43%
    Net charge-offs$2,107 $82 $206 $407 $115 
    Average net charge-off rate (annualized) 0.15% 0.01% 0.01% 0.03% 0.01%
                    


    Kearny Financial Corp.
    Supplemental Balance Sheet Highlights
    (Unaudited)

    (Dollars in Thousands)September 30,
    2023    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022
    Funding composition:     
    Deposits:     
    Non-interest-bearing deposits$595,141 $609,999 $617,778 $650,950 $683,406 
    Interest-bearing demand 2,236,573  2,252,912  2,285,799  2,316,485  2,382,411 
    Savings 689,163  748,721  811,483  901,514  982,916 
    Certificates of deposit (retail) 1,300,382  1,377,028  1,327,343  1,354,907  1,263,124 
    Certificates of deposit (brokered and listing service) 612,909  640,523  761,001  747,515  796,421 
    Interest-bearing deposits 4,839,027  5,019,184  5,185,626  5,320,421  5,424,872 
    Total deposits 5,434,168  5,629,183  5,803,404  5,971,371  6,108,278 
          
    Borrowings:     
    Federal Home Loan Bank advances 1,456,933  1,281,812  1,156,692  1,256,573  796,454 
    Overnight borrowings 170,000  225,000  455,000  127,000  55,000 
    Total borrowings 1,626,933  1,506,812  1,611,692  1,383,573  851,454 
          
    Total funding$7,061,101 $7,135,995 $7,415,096 $7,354,944 $6,959,732 
          
    Loans as a % of deposits 104.8% 102.9% 102.1% 99.6% 92.0%
    Deposits as a % of total funding 77.0% 78.9% 78.3% 81.2% 87.8%
    Borrowings as a % of total funding 23.0% 21.1% 21.7% 18.8% 12.2%
          
    Uninsured deposits:     
    Uninsured deposits (reported) (1)$1,734,288 $1,771,416 $1,678,051 $1,815,854 $1,771,851 
    Uninsured deposits (adjusted) (2)$683,265 $710,377 $705,727 $794,407 $883,351 


    _________________________
    (1)Uninsured deposits of Kearny Bank.
    (2)Uninsured deposits of Kearny Bank adjusted to exclude deposits of its wholly-owned subsidiary and holding company and collateralized deposits of state and local governments.
      


    Kearny Financial Corp.
    Consolidated Statements of Income
    (Unaudited)

     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022
    Interest income     
    Loans$62,769 $62,044 $60,172 $57,996 $52,935 
    Taxable investment securities 16,265  15,736  15,459  13,221  10,439 
    Tax-exempt investment securities 87  91  99  219  285 
    Other interest-earning assets 2,047  1,821  1,441  1,005  761 
    Total interest income 81,168  79,692  77,171  72,441  64,420 
          
    Interest expense     
    Deposits 27,567  26,226  22,246  18,822  10,869 
    Borrowings 14,441  13,286  12,554  8,836  5,020 
    Total interest expense 42,008  39,512  34,800  27,658  15,889 
    Net interest income 39,160  40,180  42,371  44,783  48,531 
    Provision for (reversal of) credit losses 245  (306) 451  1,671  670 
    Net interest income after provision for (reversal of) credit losses 38,915  40,486  41,920  43,112  47,861 
          
    Non-interest income     
    Fees and service charges 748  699  910  734  763 
    Loss on sale and call of securities —  —  —  (15,227) — 
    Gain (loss) on sale of loans 215  199  (2,373) 134  395 
    Loss on sale of other real estate owned —  (139) —  —  — 
    Income from bank owned life insurance 1,666  1,605  1,581  1,761  3,698 
    Electronic banking fees and charges 367  399  457  397  506 
    Other income 1,014  903  1,071  3,723  555 
    Total non-interest income 4,010  3,666  1,646  (8,478) 5,917 
          
    Non-interest expense     
    Salaries and employee benefits 17,761  17,315  18,005  19,921  20,348 
    Net occupancy expense of premises 2,758  2,862  3,097  2,987  3,090 
    Equipment and systems 3,801  3,511  3,537  3,867  3,662 
    Advertising and marketing 228  231  413  731  747 
    Federal deposit insurance premium 1,524  1,455  1,546  1,226  906 
    Directors' compensation 393  345  340  339  340 
    Other expense 3,309  3,042  3,414  3,579  2,895 
    Total non-interest expense 29,774  28,761  30,352  32,650  31,988 
    Income before income taxes 13,151  15,391  13,214  1,984  21,790 
    Income taxes 3,309  3,378  2,902  33  5,255 
    Net income$9,842 $12,013 $10,312 $1,951 $16,535 
          
    Net income per common share (EPS)     
    Basic$0.16 $0.19 $0.16 $0.03 $0.25 
    Diluted$0.16 $0.19 $0.16 $0.03 $0.25 
          
    Dividends declared     
    Cash dividends declared per common share$0.11 $0.11 $0.11 $0.11 $0.11 
    Cash dividends declared$6,989 $7,007 $7,196 $7,172 $7,276 
    Dividend payout ratio 71.0% 58.3% 69.8% 367.6% 44.0%
          
    Weighted average number of common shares outstanding     
    Basic 63,014  63,667  64,769  65,030  65,737 
    Diluted 63,061  63,667  64,783  65,038  65,756 
                    


    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)

     Three Months Ended
    (Dollars in Thousands)September 30,
    2023    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022
    Assets     
    Interest-earning assets:     
    Loans receivable, including loans held-for-sale$5,788,074 $5,932,541 $5,986,669 $5,839,903 $5,553,996 
    Taxable investment securities 1,516,393  1,529,582  1,558,222  1,527,578  1,516,974 
    Tax-exempt investment securities 15,483  16,346  17,663  37,917  48,973 
    Other interest-earning assets 130,829  128,158  131,682  114,175  88,038 
    Total interest-earning assets 7,450,779  7,606,627  7,694,236  7,519,573  7,207,981 
    Non-interest-earning assets 568,723  556,962  575,009  550,519  570,225 
    Total assets$8,019,502 $8,163,589 $8,269,245 $8,070,092 $7,778,206 
          
    Liabilities and Stockholders' Equity     
    Interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand$2,245,831 $2,321,120 $2,363,762 $2,359,977 $2,354,340 
    Savings 719,508  774,854  858,673  931,584  1,019,343 
    Certificates of deposit 1,968,512  2,057,818  2,069,396  2,192,722  2,014,922 
    Total interest-bearing deposits 4,933,851  5,153,792  5,291,831  5,484,283  5,388,605 
    Borrowings:     
    Federal Home Loan Bank advances 1,386,473  1,374,316  1,402,269  997,148  642,399 
    Other borrowings 158,098  100,055  1,611  —  127,456 
    Total borrowings 1,544,571  1,474,371  1,403,880  997,148  769,855 
    Total interest-bearing liabilities 6,478,422  6,628,163  6,695,711  6,481,431  6,158,460 
    Non-interest-bearing liabilities:     
    Non-interest-bearing deposits 612,251  608,765  634,324  666,846  667,624 
    Other non-interest-bearing liabilities 66,701  64,970  60,327  56,721  56,431 
    Total non-interest-bearing liabilities 678,952  673,735  694,651  723,567  724,055 
    Total liabilities 7,157,374  7,301,898  7,390,362  7,204,998  6,882,515 
    Stockholders' equity 862,128  861,691  878,883  865,094  895,691 
    Total liabilities and stockholders' equity$8,019,502 $8,163,589 $8,269,245 $8,070,092 $7,778,206 
          
    Average interest-earning assets to average
    interest-bearing liabilities    		 115.01% 114.76% 114.91% 116.02% 117.04%
                    

    Kearny Financial Corp.
    Performance Ratio Highlights

     Three Months Ended
     September 30,
    2023    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022
    Average yield on interest-earning assets:     
    Loans receivable, including loans held-for-sale4.34%4.18%4.02%3.97%3.81%
    Taxable investment securities4.29%4.12%3.97%3.46%2.75%
    Tax-exempt investment securities (1)2.25%2.23%2.23%2.32%2.33%
    Other interest-earning assets6.26%5.68%4.38%3.52%3.46%
    Total interest-earning assets4.36%4.19%4.01%3.85%3.57%
          
    Average cost of interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand2.58%2.38%2.01%1.63%0.92%
    Savings0.47%0.48%0.41%0.41%0.23%
    Certificates of deposit2.49%2.24%1.84%1.50%0.97%
    Total interest-bearing deposits2.23%2.04%1.68%1.37%0.81%
    Borrowings:     
    Federal Home Loan Bank advances3.54%3.51%3.58%3.54%2.68%
    Other borrowings5.46%4.89%5.15%—%2.26%
    Total borrowings3.74%3.60%3.58%3.54%2.61%
    Total interest-bearing liabilities2.59%2.38%2.08%1.71%1.03%
          
    Interest rate spread (2)1.77%1.81%1.93%2.14%2.54%
    Net interest margin (3)2.10%2.11%2.20%2.38%2.69%
          
    Non-interest income to average assets (annualized)0.20%0.18%0.08%-0.42%0.30%
    Non-interest expense to average assets (annualized)1.49%1.41%1.47%1.62%1.65%
          
    Efficiency ratio (4)68.97%65.60%68.96%89.93%58.75%
          
    Return on average assets (annualized)0.49%0.59%0.50%0.10%0.85%
    Return on average equity (annualized)4.57%5.58%4.69%0.90%7.38%
    Return on average tangible equity (annualized) (5)6.07%7.41%6.20%1.20%9.70%


    _________________________
    (1)The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
    (2)Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
    (3)Net interest income divided by average interest-earning assets.
    (4)Non-interest expense divided by the sum of net interest income and non-interest income.
    (5)Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.
      

    The following tables provide a reconciliation of certain financial measures calculated in accordance with Generally Accepted Accounting Principles (“GAAP”) (as reported) and non-GAAP measures. 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. 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.

    Kearny Financial Corp.
    Reconciliation of GAAP to Non-GAAP
    (Unaudited)

     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022
    Adjusted net income:     
    Net income (GAAP)$9,842 $12,013 $10,312 $1,951 $16,535 
    Non-recurring transactions - net of tax:     
    Branch consolidation expenses —  —  568  —  — 
    Net effect of sale and call of securities —  —  —  10,811  — 
    Net effect of sale of other assets —  —  —  (2,081) — 
    Severance expense from workforce realignment —  —  —  538  — 
    Adjusted net income$9,842 $12,013 $10,880 $11,219 $16,535 
          
    Calculation of pre-tax, pre-provision net revenue:     
    Net income (GAAP)$9,842 $12,013 $10,312 $1,951 $16,535 
    Adjustments to net income (GAAP):     
    Provision for income taxes 3,309  3,378  2,902  33  5,255 
    Provision for (reversal of) credit losses 245  (306) 451  1,671  670 
    Pre-tax, pre-provision net revenue (non-GAAP)$13,396 $15,085 $13,665 $3,655 $22,460 
          
    Adjusted earnings per share:     
    Weighted average common shares - basic 63,014  63,667  64,769  65,030  65,737 
    Weighted average common shares - diluted 63,061  63,667  64,783  65,038  65,756 
          
    Earnings per share - basic (GAAP)$0.16 $0.19 $0.16 $0.03 $0.25 
    Earnings per share - diluted (GAAP)$0.16 $0.19 $0.16 $0.03 $0.25 
          
    Adjusted earnings per share - basic (non-GAAP)$0.16 $0.19 $0.17 $0.17 $0.25 
    Adjusted earnings per share - diluted (non-GAAP)$0.16 $0.19 $0.17 $0.17 $0.25 
          
    Pre-tax, pre-provision net revenue per share:     
    Pre-tax, pre-provision net revenue per share - basic
    (non-GAAP)    		$0.21 $0.24 $0.21 $0.06 $0.34 
    Pre-tax, pre-provision net revenue per share - diluted
    (non-GAAP)    		$0.21 $0.24 $0.21 $0.06 $0.34 
          
    Adjusted return on average assets:     
    Total average assets$8,019,502 $8,163,589 $8,269,245 $8,070,092 $7,778,206 
          
    Return on average assets (GAAP) 0.49% 0.59% 0.50% 0.10% 0.85%
    Adjusted return on average assets (non-GAAP) 0.49% 0.59% 0.53% 0.56% 0.85%
          
    Adjusted return on average equity:     
    Total average equity$862,128 $861,691 $878,883 $865,094 $895,691 
          
    Return on average equity (GAAP) 4.57% 5.58% 4.69% 0.90% 7.38%
    Adjusted return on average equity (non-GAAP) 4.57% 5.58% 4.95% 5.19% 7.38%


    Kearny Financial Corp.
    Reconciliation of GAAP to Non-GAAP
    (Unaudited)

     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022
    Adjusted return on average tangible equity:     
    Total average equity$862,128 $861,691 $878,883 $865,094 $895,691 
    Less: average goodwill (210,895) (210,895) (210,895) (210,895) (210,895)
    Less: average other intangible assets (2,411) (2,544) (2,683) (2,826) (2,971)
    Total average tangible equity$648,822 $648,252 $665,305 $651,373 $681,825 
          
    Return on average tangible equity (non-GAAP) 6.07% 7.41% 6.20% 1.20% 9.70%
    Adjusted return on average tangible equity (non-GAAP) 6.07% 7.41% 6.54% 6.89% 9.70%
          
    Adjusted non-interest expense ratio:     
    Non-interest expense (GAAP)$29,774 $28,761 $30,352 $32,650 $31,988 
    Non-recurring transactions:     
    Branch consolidation expenses —  —  (800) —  — 
    Severance expense from workforce realignment —  —  —  (757) — 
    Early contract termination —  —  —  —  — 
    Non-interest expense (non-GAAP)$29,774 $28,761 $29,552 $31,893 $31,988 
          
    Non-interest expense ratio (GAAP) 1.49% 1.41% 1.47% 1.62% 1.65%
    Adjusted non-interest expense ratio (non-GAAP) 1.49% 1.41% 1.43% 1.58% 1.65%
          
    Adjusted efficiency ratio:     
    Non-interest expense (non-GAAP)$29,774 $28,761 $29,552 $31,893 $31,988 
          
    Net interest income (GAAP)$39,160 $40,180 $42,371 $44,783 $48,531 
    Total non-interest income (GAAP) 4,010  3,666  1,646  (8,478) 5,917 
    Non-recurring transactions:     
    Net effect of sale and call of securities —  —  —  15,227  — 
    Net effect of sale of other assets —  —  —  (2,931) — 
    Total revenue (non-GAAP)$43,170 $43,846 $44,017 $48,601 $54,448 
          
    Efficiency ratio (GAAP) 68.97% 65.60% 68.96% 89.93% 58.75%
    Adjusted efficiency ratio (non-GAAP) 68.97% 65.60% 67.14% 65.62% 58.75%
                    

    For further information contact:
    Craig L. Montanaro, President and Chief Executive Officer, or
    Keith Suchodolski, Senior Executive Vice President and Chief Financial Officer
    Kearny Financial Corp.
    (973) 244-4500


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