• Kearny Financial Corp. Announces First Quarter Fiscal 2025 Results and Declaration of Cash Dividend

    ソース: Nasdaq GlobeNewswire / 24 10 2024 08:30:01   America/New_York

    FAIRFIELD, N.J., Oct. 24, 2024 (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, 2024 of $6.1 million, or $0.10 per diluted share, compared to a GAAP net loss of $90.1 million, or $1.45 per diluted share, for the quarter ended June 30, 2024. The net loss for the quarter ended June 30, 2024 included a goodwill impairment of $95.3 million, as previously disclosed. Excluding this item, net income for the quarter ended September 30, 2024 increased $496,000 from adjusted net income of $5.6 million for the quarter ended June 30, 2024.

    The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on November 20, 2024, to stockholders of record as of November 6, 2024.

    Craig L. Montanaro, President and Chief Executive Officer, commented, “I’m pleased to report that this quarter saw our net interest margin reach its inflection point and begin to ascend. Despite four basis points of quarterly compression, each successive month of the quarter reflected an increase in our net interest margin. The recent fed funds rate reduction of 50 basis points has already begun translating into a cost of funds benefit in October. Additional fed funds rate cuts, which the market is anticipating, will be a positive catalyst for our liability-sensitive balance sheet.”

    Mr. Montanaro continued, “Regarding asset quality, our loan portfolio remains strong. Minimal exposure to New York City rent-regulated multifamily and office real estate, coupled with our robust commercial real estate ACL coverage ratios and peer-leading charge-off ratios, leaves us well-positioned in the current environment.”

    Balance Sheet

    • Total assets were $7.77 billion at September 30, 2024, an increase of $88.9 million, or 1.2%, from June 30, 2024.
    • Investment securities totaled $1.20 billion at September 30, 2024, a decrease of $5.5 million, or 0.5%, from June 30, 2024.
    • Loans receivable totaled $5.78 billion at September 30, 2024, an increase of $51.5 million, or 0.9%, from June 30, 2024, primarily reflecting growth in one- to four-family residential mortgage loans and construction loans.
    • Deposits were $5.47 billion at September 30, 2024, an increase of $312.4 million, or 6.1%, from June 30, 2024. This increase was largely the result of a reallocation from Federal Home Loan Bank (“FHLB”) advances into brokered certificates of deposits, due to the relatively more favorable economics of brokered deposits compared to advances.
    • Borrowings were $1.48 billion at September 30, 2024, a decrease of $229.9 million, or 13.4%, from June 30, 2024, primarily reflecting a decrease in FHLB borrowings offset by an increase in brokered certificates of deposits, as noted above.
    • At September 30, 2024, the Company maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.06 billion, an increase of $240.0 million from June 30, 2024, and represents 26.5% of total assets.

    Earnings

    Net Interest Income and Net Interest Margin

    • Net interest margin contracted four basis points to 1.80% for the quarter ended September 30, 2024. The decrease for the quarter was driven by increases in the cost and average balances of interest-bearing deposits and a decrease in the average balance of interest-earning assets, partially offset by decreases in the average balances of interest-bearing borrowings and higher yields on interest-earning assets.
    • For the quarter ended September 30, 2024, net interest income decreased $830,000 to $32.4 million from $33.3 million for the quarter ended June 30, 2024. Included in net interest income for the quarters ended September 30, 2024 and June 30, 2024, respectively, was purchase accounting accretion of $649,000 and $612,000, and loan prepayment penalty income of $52,000 and $366,000.

    Non-Interest Income

    • Non-interest income decreased $1.2 million to income of $4.6 million for the quarter ended September 30, 2024, from $5.8 million for the quarter ended June 30, 2024. Included in non-interest income for the quarter ended June 30, 2024 was a non-recurring contract renewal bonus of $750,000 and $1.1 million in non-recurring payments on two life insurance policies, partially offset by a $392,000 non-recurring exchange charge related to the December 2023 Bank Owned Life Insurance (“BOLI”) restructure. No such non-recurring items were recorded during the quarter ended September 30, 2024.
    • Income from BOLI decreased $642,000 to $2.6 million for the quarter ended September 30, 2024 from $3.2 million for the quarter ended June 30, 2024, primarily driven by the non-recurring items recorded for the quarter ended June 30, 2024, as disclosed above.

    Non-Interest Expense

    • For the quarter ended September 30, 2024, non-interest expense decreased $96.8 million, or 76.5%, to $29.8 million from $126.6 million for the quarter ended June 30, 2024, driven by a non-cash goodwill impairment recognized in the prior comparative period. Excluding the goodwill impairment, adjusted non-interest expense increased $605,000 from $29.2 million, primarily driven by increases in salary and benefits expense and other expense.
    • Salary and benefits expense increased $232,000 primarily driven by annual merit increases and higher payroll taxes, partially offset by a non-recurring decrease in stock-based compensation.
    • Other expense increased $344,000 primarily driven by an increase of $243,000 in the provision for credit losses on off balance sheet commitments.

    Income Taxes

    • Income tax expense totaled $1.1 million for the quarter ended September 30, 2024, compared to an income tax benefit of $917,000 for the quarter ended June 30, 2024. The increase in income tax expense was primarily due to higher pre-tax income in the current quarter, coupled with a partial reversal of the deferred tax liability associated with the previously recorded goodwill impairment in the prior quarter.

    Asset Quality

    • The balance of non-performing assets remained steady at $39.9 million, or 0.51% of total assets, at September 30, 2024, and $39.9 million, or 0.52% of total assets, at June 30, 2024, respectively.
    • Net charge-offs totaled $124,000, or 0.01% of average loans, on an annualized basis, for the quarter ended September 30, 2024, compared to $3.5 million, or 0.25% of average loans, on an annualized basis, for the quarter ended June 30, 2024.
    • For the quarter ended September 30, 2024, the Company recorded a provision for credit losses of $108,000, compared to $3.5 million for the quarter ended June 30, 2024. The provision for credit loss expense for the quarter ended September 30, 2024 was primarily driven by loan growth.
    • The allowance for credit losses (“ACL”) was $44.9 million, or 0.78% of total loans, at September 30, 2024 and remained unchanged from June 30, 2024.

    Capital

    • For the quarter ended September 30, 2024, book value per share decreased $0.06, or 0.5%, to $11.64 while tangible book value per share decreased $0.05, or 0.5%, to $9.85.
    • At September 30, 2024, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $76.0 million, partially offset by after-tax unrealized gains on derivatives of $11.0 million. After-tax net unrecognized losses on securities held to maturity of $8.2 million were not reflected in total stockholders’ equity.
    • At September 30, 2024, the Company’s tangible equity to tangible assets ratio equaled 8.31% 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 2025 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

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

     
    Linked-Quarter Comparative Financial Analysis
     
    Kearny Financial Corp.
    Consolidated Balance Sheets
    (Unaudited)
     
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		September 30,
    2024    		June 30,
    2024    		Variance
    or Change    		Variance
    or Change Pct.
    Assets    
    Cash and cash equivalents$155,574 $63,864 $91,710 143.6%
    Securities available for sale 1,070,811  1,072,833  (2,022)-0.2%
    Securities held to maturity 132,256  135,742  (3,486)-2.6%
    Loans held-for-sale 8,866  6,036  2,830 46.9%
    Loans receivable 5,784,246  5,732,787  51,459 0.9%
    Less: allowance for credit losses on loans (44,923) (44,939) (16)—%
    Net loans receivable 5,739,323  5,687,848  51,475 0.9%
    Premises and equipment 45,189  44,940  249 0.6%
    Federal Home Loan Bank stock 57,706  80,300  (22,594)-28.1%
    Accrued interest receivable 29,467  29,521  (54)-0.2%
    Goodwill 113,525  113,525  — —%
    Core deposit intangible 1,805  1,931  (126)-6.5%
    Bank owned life insurance 300,186  297,874  2,312 0.8%
    Deferred income taxes, net 50,131  50,339  (208)-0.4%
    Other assets 67,540  98,708  (31,168)-31.6%
    Total assets$7,772,379 $7,683,461 $88,918 1.2%
         
    Liabilities    
    Deposits:    
    Non-interest-bearing$592,099 $598,366 $(6,267)-1.0%
    Interest-bearing 4,878,413  4,559,757  318,656 7.0%
    Total deposits 5,470,512  5,158,123  312,389 6.1%
    Borrowings 1,479,888  1,709,789  (229,901)-13.4%
    Advance payments by borrowers for taxes 17,824  17,409  415 2.4%
    Other liabilities 52,618  44,569  8,049 18.1%
    Total liabilities 7,020,842  6,929,890  90,952 1.3%
         
    Stockholders' Equity    
    Common stock 646  644  2 0.3%
    Paid-in capital 493,523  493,680  (157)—%
    Retained earnings 342,522  343,326  (804)-0.2%
    Unearned ESOP shares (20,430) (20,916) 486 2.3%
    Accumulated other comprehensive loss (64,724) (63,163) (1,561)-2.5%
    Total stockholders' equity 751,537  753,571  (2,034)-0.3%
    Total liabilities and stockholders' equity$7,772,379 $7,683,461 $88,918 1.2%
         
    Consolidated capital ratios    
    Equity to assets 9.67% 9.81% -0.14% 
    Tangible equity to tangible assets (1) 8.31% 8.43% -0.12% 
         
    Share data    
    Outstanding shares 64,580  64,434  146 0.2%
    Book value per share$11.64 $11.70 $(0.06)-0.5%
    Tangible book value per share (2)$9.85 $9.90 $(0.05)-0.5%
               
    _________________________
    (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 (Loss)
    (Unaudited)
     
    (Dollars and Shares in Thousands,
    Except Per Share Data)
    		Three Months EndedVariance
    or Change
    		Variance
    or Change Pct.
    September 30,
    2024    		June 30,
    2024
    Interest income    
    Loans$66,331 $65,819 $512 0.8%
    Taxable investment securities 14,384  14,802  (418)-2.8%
    Tax-exempt investment securities 71  80  (9)-11.3%
    Other interest-earning assets 2,466  2,289  177 7.7%
    Total interest income 83,252  82,990  262 0.3%
         
    Interest expense    
    Deposits 35,018  32,187  2,831 8.8%
    Borrowings 15,788  17,527  (1,739)-9.9%
    Total interest expense 50,806  49,714  1,092 2.2%
    Net interest income 32,446  33,276  (830)-2.5%
    Provision for credit losses 108  3,527  (3,419)-96.9%
    Net interest income after provision for credit losses 32,338  29,749  2,589 8.7%
         
    Non-interest income    
    Fees and service charges 635  580  55 9.5%
    Gain on sale of loans 200  111  89 80.2%
    Income from bank owned life insurance 2,567  3,209  (642)-20.0%
    Electronic banking fees and charges 391  1,130  (739)-65.4%
    Other income 833  776  57 7.3%
    Total non-interest income 4,626  5,806  (1,180)-20.3%
         
    Non-interest expense    
    Salaries and employee benefits 17,498  17,266  232 1.3%
    Net occupancy expense of premises 2,798  2,738  60 2.2%
    Equipment and systems 3,860  3,785  75 2.0%
    Advertising and marketing 342  480  (138)-28.8%
    Federal deposit insurance premium 1,563  1,532  31 2.0%
    Directors' compensation 361  360  1 0.3%
    Goodwill impairment —  97,370  (97,370)-100.0%
    Other expense 3,364  3,020  344 11.4%
    Total non-interest expense 29,786  126,551  (96,765)-76.5%
    Income (loss) before income taxes 7,178  (90,996) 98,174 107.9%
    Income taxes 1,086  (917) 2,003 -218.4%
    Net income (loss)$6,092 $(90,079)$96,171 106.8%
         
    Net income (loss) per common share (EPS)    
    Basic$0.10 $(1.45)$1.55  
    Diluted$0.10 $(1.45)$1.55  
         
    Dividends declared    
    Cash dividends declared per common share$0.11 $0.11 $—  
    Cash dividends declared$6,896 $6,903 $(7) 
    Dividend payout ratio 113.2% -7.7% 120.9% 
         
    Weighted average number of common shares outstanding    
    Basic 62,389  62,254  135  
    Diluted 62,420  62,254  166  
               


     
    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)
     
    (Dollars in Thousands)
    		Three Months EndedVariance
    or Change
    		Variance
    or Change Pct.
    September 30,
    2024    		June 30,
    2024
    Assets    
    Interest-earning assets:    
    Loans receivable, including loans held for sale$5,761,593 $5,743,008 $18,585 0.3%
    Taxable investment securities 1,314,945  1,343,541  (28,596)-2.1%
    Tax-exempt investment securities 12,244  13,737  (1,493)-10.9%
    Other interest-earning assets 131,981  128,257  3,724 2.9%
    Total interest-earning assets 7,220,763  7,228,543  (7,780)-0.1%
    Non-interest-earning assets 467,670  466,537  1,133 0.2%
    Total assets$7,688,433 $7,695,080 $(6,647)-0.1%
         
    Liabilities and Stockholders' Equity    
    Interest-bearing liabilities:    
    Deposits:    
    Interest-bearing demand$2,282,608 $2,310,521 $(27,913)-1.2%
    Savings 668,240  631,622  36,618 5.8%
    Certificates of deposit 1,755,589  1,613,798  141,791 8.8%
    Total interest-bearing deposits 4,706,437  4,555,941  150,496 3.3%
    Borrowings:    
    Federal Home Loan Bank advances 1,325,583  1,507,192  (181,609)-12.0%
    Other borrowings 237,011  228,461  8,550 3.7%
    Total borrowings 1,562,594  1,735,653  (173,059)-10.0%
    Total interest-bearing liabilities 6,269,031  6,291,594  (22,563)-0.4%
    Non-interest-bearing liabilities:    
    Non-interest-bearing deposits 599,095  589,438  9,657 1.6%
    Other non-interest-bearing liabilities 69,629  62,978  6,651 10.6%
    Total non-interest-bearing liabilities 668,724  652,416  16,308 2.5%
    Total liabilities 6,937,755  6,944,010  (6,255)-0.1%
    Stockholders' equity 750,678  751,070  (392)-0.1%
    Total liabilities and stockholders' equity$7,688,433 $7,695,080 $(6,647)-0.1%
         
    Average interest-earning assets to average interest-bearing liabilities 115.18% 114.89% 0.29%0.3%
     


     
    Kearny Financial Corp.
    Performance Ratio Highlights
    (Unaudited)
     Three Months EndedVariance
    or Change
     September 30,
    2024    		June 30,
    2024
    Average yield on interest-earning assets:   
    Loans receivable, including loans held for sale4.61%4.58%0.03%
    Taxable investment securities4.38%4.41%-0.03%
    Tax-exempt investment securities (1)2.32%2.32%—%
    Other interest-earning assets7.47%7.14%0.33%
    Total interest-earning assets4.61%4.59%0.02%
        
    Average cost of interest-bearing liabilities:   
    Deposits:   
    Interest-bearing demand3.13%3.06%0.07%
    Savings1.05%0.63%0.42%
    Certificates of deposit3.51%3.35%0.16%
    Total interest-bearing deposits2.98%2.83%0.15%
    Borrowings:   
    Federal Home Loan Bank advances3.82%3.86%-0.04%
    Other borrowings5.28%5.24%0.04%
    Total borrowings4.04%4.04%—%
    Total interest-bearing liabilities3.24%3.16%0.08%
        
    Interest rate spread (2)1.37%1.43%-0.06%
    Net interest margin (3)1.80%1.84%-0.04%
        
    Non-interest income to average assets (annualized)0.24%0.30%-0.06%
    Non-interest expense to average assets (annualized)1.55%6.58%-5.03%
        
    Efficiency ratio (4)80.35%323.81%-243.46%
        
    Return on average assets (annualized)0.32%-4.68%5.00%
    Return on average equity (annualized)3.25%-47.97%51.22%
    Return on average tangible equity (annualized) (5)3.89%3.33%0.56%
     
    _________________________
    (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,
    2024    		June 30,
    2024    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023
     (Unaudited)(Audited)(Unaudited)(Unaudited)(Unaudited)
    Assets     
    Cash and cash equivalents$155,574 $63,864 $71,027 $73,860 $57,219 
    Securities available for sale 1,070,811  1,072,833  1,098,655  1,144,175  1,215,633 
    Securities held to maturity 132,256  135,742  139,643  141,959  143,730 
    Loans held-for-sale 8,866  6,036  4,117  14,030  3,934 
    Loans receivable 5,784,246  5,732,787  5,758,336  5,745,629  5,736,049 
    Less: allowance for credit losses on loans (44,923) (44,939) (44,930) (44,867) (46,872)
    Net loans receivable 5,739,323  5,687,848  5,713,406  5,700,762  5,689,177 
    Premises and equipment 45,189  44,940  45,053  45,928  46,868 
    Federal Home Loan Bank stock 57,706  80,300  81,347  83,372  81,509 
    Accrued interest receivable 29,467  29,521  31,065  30,258  29,766 
    Goodwill 113,525  113,525  210,895  210,895  210,895 
    Core deposit intangible 1,805  1,931  2,057  2,189  2,323 
    Bank owned life insurance 300,186  297,874  296,493  256,064  294,491 
    Deferred income taxes, net 50,131  50,339  47,225  46,116  56,500 
    Other real estate owned —  —  —  11,982  12,956 
    Other assets 67,540  98,708  100,989  136,242  129,865 
    Total assets$7,772,379 $7,683,461 $7,841,972 $7,897,832 $7,974,866 
          
    Liabilities     
    Deposits:     
    Non-interest-bearing$592,099 $598,366 $586,089 $584,130 $595,141 
    Interest-bearing 4,878,413  4,559,757  4,622,961  4,735,500  4,839,027 
    Total deposits 5,470,512  5,158,123  5,209,050  5,319,630  5,434,168 
    Borrowings 1,479,888  1,709,789  1,722,178  1,667,055  1,626,933 
    Advance payments by borrowers for taxes 17,824  17,409  17,387  16,742  16,907 
    Other liabilities 52,618  44,569  44,279  46,427  47,324 
    Total liabilities 7,020,842  6,929,890  6,992,894  7,049,854  7,125,332 
          
    Stockholders' Equity     
    Common stock 646  644  644  645  652 
    Paid-in capital 493,523  493,680  493,187  493,297  497,269 
    Retained earnings 342,522  343,326  440,308  439,755  460,464 
    Unearned ESOP shares (20,430) (20,916) (21,402) (21,889) (22,375)
    Accumulated other comprehensive loss (64,724) (63,163) (63,659) (63,830) (86,476)
    Total stockholders' equity 751,537  753,571  849,078  847,978  849,534 
    Total liabilities and stockholders' equity$7,772,379 $7,683,461 $7,841,972 $7,897,832 $7,974,866 
          
    Consolidated capital ratios     
    Equity to assets 9.67% 9.81% 10.83% 10.74% 10.65%
    Tangible equity to tangible assets (1) 8.31% 8.43% 8.34% 8.26% 8.20%
          
    Share data     
    Outstanding shares 64,580  64,434  64,437  64,445  65,132 
    Book value per share$11.64 $11.70 $13.18 $13.16 $13.04 
    Tangible book value per share (2)$9.85 $9.90 $9.87 $9.85 $9.77 
     
    _________________________
    (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,
    2024    		June 30,
    2024    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023
    Loan portfolio composition:     
    Commercial loans:     
    Multi-family mortgage$2,646,187 $2,645,851 $2,645,195 $2,651,274 $2,699,151 
    Nonresidential mortgage 950,771  948,075  965,539  947,287  946,801 
    Commercial business 145,984  142,747  147,326  144,134  149,229 
    Construction 227,327  209,237  229,457  221,933  230,703 
    Total commercial loans 3,970,269  3,945,910  3,987,517  3,964,628  4,025,884 
    One- to four-family residential mortgage 1,768,230  1,756,051  1,741,644  1,746,065  1,689,051 
    Consumer loans:     
    Home equity loans 44,741  44,104  42,731  43,517  42,896 
    Other consumer 2,965  2,685  3,198  2,728  2,644 
    Total consumer loans 47,706  46,789  45,929  46,245  45,540 
    Total loans, excluding yield adjustments 5,786,205  5,748,750  5,775,090  5,756,938  5,760,475 
    Unaccreted yield adjustments (1,959) (15,963) (16,754) (11,309) (24,426)
    Loans receivable, net of yield adjustments 5,784,246  5,732,787  5,758,336  5,745,629  5,736,049 
    Less: allowance for credit losses on loans (44,923) (44,939) (44,930) (44,867) (46,872)
    Net loans receivable$5,739,323 $5,687,848 $5,713,406 $5,700,762 $5,689,177 
          
    Asset quality:     
    Nonperforming assets:     
    Accruing loans - 90 days and over past due$— $— $— $— $— 
    Nonaccrual loans 39,854  39,882  39,546  28,089  37,912 
    Total nonperforming loans 39,854  39,882  39,546  28,089  37,912 
    Nonaccrual loans held-for-sale —  —  —  9,700  — 
    Other real estate owned —  —  —  11,982  12,956 
    Total nonperforming assets$39,854 $39,882 $39,546 $49,771 $50,868 
          
    Nonperforming loans (% total loans) 0.69% 0.70% 0.69% 0.49% 0.66%
    Nonperforming assets (% total assets) 0.51% 0.52% 0.50% 0.63% 0.64%
          
    Classified loans$119,534 $118,700 $115,772 $94,676 $98,616 
          
    Allowance for credit losses on loans (ACL):     
    ACL to total loans 0.78% 0.78% 0.78% 0.78% 0.81%
    ACL to nonperforming loans 112.72% 112.68% 113.61% 159.73% 123.63%
    Net charge-offs$124 $3,518 $286 $4,110 $2,107 
    Average net charge-off rate (annualized) 0.01% 0.25% 0.02% 0.29% 0.15%
     


     
    Kearny Financial Corp.
    Supplemental Balance Sheet Highlights
    (Unaudited)
     
    (Dollars in Thousands)September 30,
    2024    		June 30,
    2024    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023
    Funding composition:     
    Deposits:     
    Non-interest-bearing deposits$592,099 $598,367 $586,089 $584,130 $595,141 
    Interest-bearing demand 2,247,685  2,308,915  2,349,032  2,347,262  2,236,573 
    Savings 681,709  643,481  630,456  646,182  689,163 
    Certificates of deposit (retail) 1,215,746  1,199,127  1,235,261  1,283,676  1,300,382 
    Certificates of deposit (brokered and listing service) 733,273  408,234  408,212  458,380  612,909 
    Interest-bearing deposits 4,878,413  4,559,757  4,622,961  4,735,500  4,839,027 
    Total deposits 5,470,512  5,158,124  5,209,050  5,319,630  5,434,168 
          
    Borrowings:     
    Federal Home Loan Bank advances 1,209,888  1,534,789  1,457,178  1,432,055  1,456,933 
    Overnight borrowings 270,000  175,000  265,000  235,000  170,000 
    Total borrowings 1,479,888  1,709,789  1,722,178  1,667,055  1,626,933 
          
    Total funding$6,950,400 $6,867,913 $6,931,228 $6,986,685 $7,061,101 
          
    Loans as a % of deposits 105.1% 110.4% 109.8% 107.4% 104.8%
    Deposits as a % of total funding 78.7% 75.1% 75.2% 76.1% 77.0%
    Borrowings as a % of total funding 21.3% 24.9% 24.8% 23.9% 23.0%
          
    Uninsured deposits:     
    Uninsured deposits (reported) (1)$1,799,726 $1,772,623 $1,760,740 $1,813,122 $1,734,288 
    Uninsured deposits (adjusted) (2)$773,375 $764,447 $718,026 $694,510 $683,265 
     
    _________________________
    (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 (Loss)
    (Unaudited)
     
     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		September 30,
    2024    		June 30,
    2024    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023
    Interest income     
    Loans$66,331 $65,819 $64,035 $63,384 $62,769 
    Taxable investment securities 14,384  14,802  15,490  16,756  16,265 
    Tax-exempt investment securities 71  80  85  84  87 
    Other interest-earning assets 2,466  2,289  2,475  2,401  2,047 
    Total interest income 83,252  82,990  82,085  82,625  81,168 
          
    Interest expense     
    Deposits 35,018  32,187  32,320  30,340  27,567 
    Borrowings 15,788  17,527  15,446  16,446  14,441 
    Total interest expense 50,806  49,714  47,766  46,786  42,008 
    Net interest income 32,446  33,276  34,319  35,839  39,160 
    Provision for credit losses 108  3,527  349  2,105  245 
    Net interest income after provision for credit losses 32,338  29,749  33,970  33,734  38,915 
          
    Non-interest income     
    Fees and service charges 635  580  657  624  748 
    Loss on sale and call of securities —  —  —  (18,135) — 
    Gain (loss) on sale of loans 200  111  (712) 104  215 
    Loss on sale of other real estate owned —  —  —  (974) — 
    Income from bank owned life insurance 2,567  3,209  3,039  1,162  1,666 
    Electronic banking fees and charges 391  1,130  464  396  367 
    Other income 833  776  755  811  1,014 
    Total non-interest income 4,626  5,806  4,203  (16,012) 4,010 
          
    Non-interest expense     
    Salaries and employee benefits 17,498  17,266  16,911  17,282  17,761 
    Net occupancy expense of premises 2,798  2,738  2,863  2,674  2,758 
    Equipment and systems 3,860  3,785  3,823  3,814  3,801 
    Advertising and marketing 342  480  387  301  228 
    Federal deposit insurance premium 1,563  1,532  1,429  1,495  1,524 
    Directors' compensation 361  360  360  393  393 
    Goodwill impairment —  97,370  —  —  — 
    Other expense 3,364  3,020  3,286  3,808  3,309 
    Total non-interest expense 29,786  126,551  29,059  29,767  29,774 
    Income (loss) before income taxes 7,178  (90,996) 9,114  (12,045) 13,151 
    Income taxes 1,086  (917) 1,717  1,782  3,309 
    Net income (loss)$6,092 $(90,079)$7,397 $(13,827)$9,842 
          
    Net income (loss) per common share (EPS)     
    Basic$0.10 $(1.45)$0.12 $(0.22)$0.16 
    Diluted$0.10 $(1.45)$0.12 $(0.22)$0.16 
          
    Dividends declared     
    Cash dividends declared per common share$0.11 $0.11 $0.11 $0.11 $0.11 
    Cash dividends declared$6,896 $6,903 $6,844 $6,882 $6,989 
    Dividend payout ratio 113.2% -7.7% 92.5% -49.8% 71.0%
          
    Weighted average number of common shares outstanding     
    Basic 62,389  62,254  62,205  62,299  63,014 
    Diluted 62,420  62,254  62,211  62,299  63,061 
                    


     
    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)
     
     Three Months Ended
    (Dollars in Thousands)September 30,
    2024    		June 30,
    2024    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023
    Assets     
    Interest-earning assets:     
    Loans receivable, including loans held-for-sale$5,761,593 $5,743,008 $5,752,477 $5,726,321 $5,788,074 
    Taxable investment securities 1,314,945  1,343,541  1,382,064  1,509,165  1,516,393 
    Tax-exempt investment securities 12,244  13,737  14,614  15,025  15,483 
    Other interest-earning assets 131,981  128,257  125,155  139,740  130,829 
    Total interest-earning assets 7,220,763  7,228,543  7,274,310  7,390,251  7,450,779 
    Non-interest-earning assets 467,670  466,537  577,411  554,335  568,723 
    Total assets$7,688,433 $7,695,080 $7,851,721 $7,944,586 $8,019,502 
          
    Liabilities and Stockholders' Equity     
    Interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand$2,282,608 $2,310,521 $2,378,831 $2,301,169 $2,245,831 
    Savings 668,240  631,622  635,226  664,926  719,508 
    Certificates of deposit 1,755,589  1,613,798  1,705,513  1,824,316  1,968,512 
    Total interest-bearing deposits 4,706,437  4,555,941  4,719,570  4,790,411  4,933,851 
    Borrowings:     
    Federal Home Loan Bank advances 1,325,583  1,507,192  1,428,801  1,513,497  1,386,473 
    Other borrowings 237,011  228,461  210,989  142,283  158,098 
    Total borrowings 1,562,594  1,735,653  1,639,790  1,655,780  1,544,571 
    Total interest-bearing liabilities 6,269,031  6,291,594  6,359,360  6,446,191  6,478,422 
    Non-interest-bearing liabilities:     
    Non-interest-bearing deposits 599,095  589,438  581,870  597,294  612,251 
    Other non-interest-bearing liabilities 69,629  62,978  65,709  62,387  66,701 
    Total non-interest-bearing liabilities 668,724  652,416  647,579  659,681  678,952 
    Total liabilities 6,937,755  6,944,010  7,006,939  7,105,872  7,157,374 
    Stockholders' equity 750,678  751,070  844,782  838,714  862,128 
    Total liabilities and stockholders' equity$7,688,433 $7,695,080 $7,851,721 $7,944,586 $8,019,502 
          
    Average interest-earning assets to average
    interest-bearing liabilities    		 115.18% 114.89% 114.39% 114.65% 115.01%
                    


     
    Kearny Financial Corp.
    Performance Ratio Highlights
     Three Months Ended
     September 30,
    2024    		June 30,
    2024    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023
    Average yield on interest-earning assets:     
    Loans receivable, including loans held-for-sale4.61%4.58%4.45%4.43%4.34%
    Taxable investment securities4.38%4.41%4.48%4.44%4.29%
    Tax-exempt investment securities (1)2.32%2.32%2.32%2.25%2.25%
    Other interest-earning assets7.47%7.14%7.91%6.87%6.26%
    Total interest-earning assets4.61%4.59%4.51%4.47%4.36%
          
    Average cost of interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand3.13%3.06%3.08%2.91%2.58%
    Savings1.05%0.63%0.46%0.44%0.47%
    Certificates of deposit3.51%3.35%3.11%2.82%2.49%
    Total interest-bearing deposits2.98%2.83%2.74%2.53%2.23%
    Borrowings:     
    Federal Home Loan Bank advances3.82%3.86%3.55%3.82%3.54%
    Other borrowings5.28%5.24%5.22%5.65%5.46%
    Total borrowings4.04%4.04%3.77%3.97%3.74%
    Total interest-bearing liabilities3.24%3.16%3.00%2.90%2.59%
          
    Interest rate spread (2)1.37%1.43%1.51%1.57%1.77%
    Net interest margin (3)1.80%1.84%1.89%1.94%2.10%
          
    Non-interest income to average assets (annualized)0.24%0.30%0.21%-0.81%0.20%
    Non-interest expense to average assets (annualized)1.55%6.58%1.48%1.50%1.49%
          
    Efficiency ratio (4)80.35%323.81%75.43%150.13%68.97%
          
    Return on average assets (annualized)0.32%-4.68%0.38%-0.70%0.49%
    Return on average equity (annualized)3.25%-47.97%3.50%-6.59%4.57%
    Return on average tangible equity (annualized) (5)3.89%3.33%4.68%-8.84%6.07%
               
    _________________________
    (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,
    2024    		June 30,
    2024    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023
    Adjusted net income:     
    Net income (loss) (GAAP)$6,092 $(90,079)$7,397 $(13,827)$9,842 
    Non-recurring transactions - net of tax:     
    Net effect of sale and call of securities —  —  —  12,876  — 
    Net effect of bank-owned life insurance restructure —  392  —  6,286  — 
    Goodwill impairment —  95,283  —  —  — 
    Adjusted net income$6,092 $5,596 $7,397 $5,335 $9,842 
          
    Calculation of pre-tax, pre-provision net revenue:     
    Net income (loss) (GAAP)$6,092 $(90,079)$7,397 $(13,827)$9,842 
    Adjustments to net income (GAAP):     
    Provision for income taxes 1,086  (917) 1,717  1,782  3,309 
    Provision for credit losses 108  3,527  349  2,105  245 
    Pre-tax, pre-provision net revenue (non-GAAP)$7,286 $(87,469)$9,463 $(9,940)$13,396 
          
    Adjusted earnings per share:     
    Weighted average common shares - basic 62,389  62,254  62,205  62,299  63,014 
    Weighted average common shares - diluted 62,420  62,330  62,211  62,367  63,061 
          
    Earnings per share - basic (GAAP)$0.10 $(1.45)$0.12 $(0.22)$0.16 
    Earnings per share - diluted (GAAP)$0.10 $(1.45)$0.12 $(0.22)$0.16 
          
    Adjusted earnings per share - basic (non-GAAP)$0.10 $0.09 $0.12 $0.09 $0.16 
    Adjusted earnings per share - diluted (non-GAAP)$0.10 $0.09 $0.12 $0.09 $0.16 
          
    Pre-tax, pre-provision net revenue per share:     
    Pre-tax, pre-provision net revenue per share - basic
      (non-GAAP)    		$0.12 $(1.41)$0.15 $(0.16)$0.21 
    Pre-tax, pre-provision net revenue per share - diluted
      (non-GAAP)    		$0.12 $(1.40)$0.15 $(0.16)$0.21 
          
    Adjusted return on average assets:     
    Total average assets$7,688,433 $7,695,080 $7,851,721 $7,944,586 $8,019,502 
          
    Return on average assets (GAAP) 0.32% -4.68% 0.38% -0.70% 0.49%
    Adjusted return on average assets (non-GAAP) 0.32% 0.29% 0.38% 0.27% 0.49%
          
    Adjusted return on average equity:     
    Total average equity$750,678 $751,070 $844,782 $838,714 $862,128 
          
    Return on average equity (GAAP) 3.25% -47.97% 3.50% -6.59% 4.57%
    Adjusted return on average equity (non-GAAP) 3.25% 2.98% 3.50% 2.54% 4.57%
                    


     
    Kearny Financial Corp.
    Reconciliation of GAAP to Non-GAAP
    (Unaudited)
     
     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		September 30,
    2024    		June 30,
    2024    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023
    Adjusted return on average tangible equity:     
    Total average equity$750,678 $751,070 $844,782 $838,714 $862,128 
    Less: average goodwill (113,525) (113,525) (210,895) (210,895) (210,895)
    Less: average other intangible assets (1,886) (2,006) (2,138) (2,277) (2,411)
    Total average tangible equity$635,267 $635,539 $631,749 $625,542 $648,822 
          
    Return on average tangible equity (non-GAAP) 3.89% 3.33% 4.68% -8.84% 6.07%
    Adjusted return on average tangible equity (non-GAAP) 3.89% 3.58% 4.68% 3.41% 6.07%
          
    Adjusted non-interest expense ratio:     
    Non-interest expense (GAAP)$29,786 $126,551 $29,059 $29,767 $29,774 
    Non-recurring transactions:     
    Goodwill impairment —  (97,370) —  —  — 
    Non-interest expense (non-GAAP)$29,786 $29,181 $29,059 $29,767 $29,774 
          
    Non-interest expense ratio (GAAP) 1.55% 6.58% 1.48% 1.50% 1.49%
    Adjusted non-interest expense ratio (non-GAAP) 1.55% 1.52% 1.48% 1.50% 1.49%
          
    Adjusted efficiency ratio:     
    Non-interest expense (non-GAAP)$29,786 $29,181 $29,059 $29,767 $29,774 
          
    Net interest income (GAAP)$32,446 $33,276 $34,319 $35,839 $39,160 
    Total non-interest income (GAAP) 4,626  5,806  4,203  (16,012) 4,010 
    Non-recurring transactions:     
    Net effect of sale and call of securities —  —  —  18,135  — 
    Net effect of bank-owned life insurance restructure —  392  —  573  — 
    Total revenue (non-GAAP)$37,072 $39,474 $38,522 $38,535 $43,170 
          
    Efficiency ratio (GAAP) 80.35% 323.81% 75.43% 150.13% 68.97%
    Adjusted efficiency ratio (non-GAAP) 80.35% 73.92% 75.43% 77.25% 68.97%

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