• Kearny Financial Corp. Announces Fourth Quarter and Fiscal Year End 2022 Results and Declaration of Cash Dividend

    Source: Nasdaq GlobeNewswire / 28 Jul 2022 08:30:03   America/New_York

    FAIRFIELD, N.J., July 28, 2022 (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 June 30, 2022 of $11.4 million, or $0.17 per diluted share, compared to $17.7 million, or $0.25 per diluted share, for the quarter ended March 31, 2022. The decrease in net income and earnings per share for the quarter was largely attributable to a pre-tax increase of $8.1 million in provision for credit losses, as well as the recognition of a number of non-recurring expenses, as described in further detail below.

    For the fiscal year ended June 30, 2022, the Company reported net income of $67.5 million, or $0.95 per diluted share, compared to $63.2 million, or $0.77 per diluted share, for the fiscal year ended June 30, 2021.

    The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on August 24, 2022 to stockholders of record as of August 10, 2022.

    Craig L. Montanaro, President and Chief Executive Officer, commented, “I am very proud of our fiscal 2022 performance which reflected record net income and earnings per share, continued margin expansion and double-digit annual growth in loans and core deposits. In addition, late this fiscal year we introduced Kearny Investment Services, the Company’s investment management division, with the goal of further diversifying our product set and revenue streams. By fiscal year end, this division was fully staffed with financial advisors and was generating a monthly after-tax net profit, which we anticipate will support future growth in non-interest income.”

    Mr. Montanaro further noted, “Looking ahead to fiscal 2023, our most critical initiative is the acceleration of our digital strategy, spearheaded by the adoption of a cloud-based, best-in-breed digital banking platform. Complementing this technology enhancement will be the expansion of our data analytics, artificial intelligence and digital marketing capabilities.” Mr. Montanaro continued, “We believe that our strategic focus on digital client engagement is the ideal complement to the exceptional service that our team provides within the communities where we maintain a physical presence. This omnichannel approach allows us to further strengthen our existing client relationships while expanding our products and services into new markets in an efficient and cost-effective manner.”

    Fiscal Year 2022 Highlights

    • Earnings per share increased 23.4% to $0.95 per diluted share, while net income increased 6.8% to $67.5 million.
    • Net interest margin increased 14 basis points to 2.94%, while net interest income increased 4.4% to $196.6 million.
    • Loans receivable increased $566.5 million, or 11.7%.
    • Core non-maturity deposits grew $365.1 million, or 10.1%, including growth of 10.1% in non-interest-bearing deposits.

    Balance Sheet

    • Total assets were $7.72 billion at June 30, 2022, an increase of $330.0 million, or 4.5%, from March 31, 2022 and an increase of $436.1 million, or 6.0%, from June 30, 2021.
    • Loans receivable totaled $5.42 billion at June 30, 2022, an increase of $414.6 million, or 8.3%, from March 31, 2022 and an increase of $566.5 million, or 11.7%, from June 30, 2021.
    • Deposits totaled $5.86 billion at June 30, 2022, an increase of $333.6 million, or 6.0%, from March 31, 2022 and an increase of $377.0 million, or 6.9%, from June 30, 2021.
    • Investment securities totaled $1.46 billion at June 30, 2022, a decrease of $185.6 million, or 11.3%, from March 31, 2022 and a decrease of $252.6 million, or 14.7%, from June 30, 2021.
    • Borrowings totaled $901.3 million at June 30, 2022, an increase of $50.1 million, or 5.9%, from March 31, 2022 and an increase of $215.5 million, or 31.4%, from June 30, 2021.

    Earnings

    Performance Highlights

    • Return on average assets was 0.61% and 0.98% for the quarters ended June 30, 2022 and March 31, 2022, respectively, and 0.93% and 0.86% for the years ended June 30, 2022 and 2021, respectively.
    • Return on average equity was 4.92% and 7.24% for the quarters ended June 30, 2022 and March 31, 2022, respectively, and 6.86% and 5.79% for the years ended June 30, 2022 and 2021, respectively.
    • Return on average tangible equity was 6.40% and 9.27% for the quarters ended June 30, 2022 and March 31, 2022, respectively, and 8.77% and 7.22% for the years ended June 30, 2022 and 2021, respectively.

    Net Interest Income and Net Interest Margin

    • Net interest margin expanded three basis points to 2.92% for the quarter ended June 30, 2022 and 14 basis points to 2.94% for the year ended June 30, 2022. The increase for the quarter was due largely to an increase in the average balance of loans receivable and an increase in the yield on taxable investment securities, partially offset by an increase in the average balance of borrowings. The increase for the year was due largely to decreases in the cost and average balance of interest-bearing liabilities, partially offset by a decrease in the yield on interest-earning assets.
    • For the quarter ended June 30, 2022, net interest income increased $2.9 million to $50.6 million from $47.7 million for the quarter ended March 31, 2022. Included in net interest income for the quarters ended June 30, 2022 and March 31, 2022, respectively, was purchase accounting accretion of $1.6 million and $1.9 million, and loan prepayment penalty income of $869,000 and $1.3 million.
    • For the year ended June 30, 2022, net interest income increased $8.4 million to $196.6 million from $188.2 million for the year ended June 30, 2021. Included in net interest income for the years ended June 30, 2022 and 2021, respectively, was purchase accounting accretion of $9.0 million and $16.6 million, and loan prepayment penalty income of $5.4 million and $3.7 million.

    Non-Interest Income

    • Non-interest income decreased $381,000 to $2.8 million for the quarter ended June 30, 2022, from $3.2 million for the quarter ended March 31, 2022. The decrease was largely attributable to a loss of $563,000 on the sale of securities.
    • Non-interest income decreased $7.1 million to $13.9 million for the year ended June 30, 2022, from $21.0 million for the year ended June 30, 2021. The decrease was largely attributable to a decrease of $3.0 million in gain on sale of loans, as well as a bargain purchase gain of $3.1 million recognized in the prior year.
    • Included in other income for the quarter and year ended June 30, 2022 was $380,000 of income from the investment services division that began operations during the current quarter.

    Non-Interest Expense

    • Non-interest expense increased $3.0 million to $33.6 million for the quarter ended June 30, 2022, from $30.6 million for the quarter ended March 31, 2022. The increase was partially attributable to a $1.2 million increase in salaries and employee benefits driven by higher loan origination-based incentive payments as a result of record-high quarterly loan origination volume. In addition, the Company recorded $1.0 million of non-recurring expense which consisted of $800,000 from the early termination of a contract with a service provider and an impairment of $200,000 related to an equity investment in a start-up financial technology company whose remaining book value was $0 at June 30, 2022.
    • Non-interest expense decreased $177,000 to $125.7 million for the year ended June 30, 2022, from $125.9 million for the year ended June 30, 2021. The decrease was largely attributable to a decline in non-recurring expenses, as described in further detail below, and a decrease in the provision for credit losses on unfunded commitments, partially offset by an increase in salaries and employee benefits.
    • For the year ended June 30, 2022, the Company recorded $1.5 million of branch consolidation expenses within occupancy expenses and $420,000 of impairment charges within other expenses. For the year ended June 30, 2021, $4.3 million of merger-related expenses, $2.0 million of branch consolidation expenses and impairment charges and $796,000 of debt extinguishment expenses were recorded.
    • The provision for credit losses on unfunded commitments, included in other expense, decreased $1.8 million for the year ended June 30, 2022.
    • Salaries and employee benefits increased $7.5 million, or 10.8%, for the year ended June 30, 2022 primarily due to staff additions, annual merit increases and an increase in incentive payments tied to record-high annual loan origination volume.
    • The efficiency and non-interest expense ratios were 62.93% and 1.79%, respectively, for the quarter ended June 30, 2022, as compared to 60.14% and 1.70%, respectively, for the quarter ended March 31, 2022. The efficiency and non-interest expense ratios were 59.71% and 1.73%, respectively, for the year ended June 30, 2022, as compared to 60.16% and 1.72%, respectively, for the year ended June 30, 2021.

    Income Taxes

    • Income tax expense totaled $4.2 million for the quarter ended June 30, 2022 compared to $6.5 million for the quarter ended March 31, 2022, resulting in effective tax rates of 27.0% and 26.9%, respectively. For the year ended June 30, 2022, income tax expense was $24.8 million compared to $21.3 million for the year ended June 30, 2021, resulting in effective tax rates of 26.9% and 25.2% respectively.

    Asset Quality

    • The balance of non-performing assets increased $11.2 million to $92.2 million, or 1.19% of total assets, at June 30, 2022, from $81.0 million, or 1.10% of total assets, at March 31, 2022. The balance of non-performing assets was $79.9 million, or 1.10% of total assets, at June 30, 2021. The increase in non-performing assets was primarily attributable to one relationship comprised of three individual loans located in Queens, NY which became non-performing during the quarter. Included in the balance of non-performing assets at June 30, 2022 was $21.7 million of nonaccrual loans held for sale.
    • Net charge-offs totaled $1.0 million, or 0.08% of average loans, on an annualized basis, for the quarter ended June 30, 2022, compared to $436,000, or 0.04% of average loans, on an annualized basis, for the quarter ended March 31, 2022. For the year ended June 30, 2022, net charge-offs totaled $3.6 million, or 0.07% of average loans, compared to $1.6 million, or 0.03% of average loans, for the year ended June 30, 2021.
    • For the quarter ended June 30, 2022, the Company recorded a provision for credit losses of $4.2 million, compared to a provision for credit losses reversal of $3.9 million for the quarter ended March 31, 2022. The provision for the quarter ended June 30, 2022 was driven by loan growth of $414.6 million in the quarter, coupled with a net increase in reserves on individually analyzed loans primarily related to lower collateral values for one relationship, as noted above. These increases to the provision were partially offset by both quantitative and qualitative improvements in the collectively evaluated loan portfolio. For the years ended June 30, 2022 and 2021, the Company recorded provision for credit losses reversals of $7.5 million and $1.1 million, respectively.
    • The allowance for credit losses was $47.1 million, or 0.87% of total loans, at June 30, 2022, compared to $43.9 million, or 0.87% of total loans, at March 31, 2022 and $58.2 million, or 1.19% of total loans, at June 30, 2021.

    Capital

    • For the quarter ended June 30, 2022, book value per share decreased $0.35, or 2.6%, to $13.02 and tangible book value per share decreased $0.48, or 4.6%, to $9.90. For the year ended June 30, 2022, book value per share decreased $0.19, or 1.4%, to $13.02 and tangible book value per share decreased $0.59, or 5.6%, to $9.90. These decreases were largely driven by a decline in accumulated other comprehensive income (loss).
    • During the quarter and year ended June 30, 2022, the Company repurchased 2,754,575 and 10,221,525 shares of common stock at a cost of $33.6 million and $129.5 million, or $12.18 and $12.67 per share, respectively.
    • At June 30, 2022, the Company’s tangible equity to tangible assets ratio equaled 9.1% 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.

    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.

    In addition, the COVID-19 pandemic has had, and may continue to have, an adverse impact on the Company, its clients and the communities it serves. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on our business.

    Category: Earnings

    Linked-Quarter Comparative Financial Analysis


    Kearny Financial Corp.
    Consolidated Balance Sheets
    (Unaudited)
             
    (Dollars and Shares in Thousands,June 30,
    		 March 31,
    		 Variance
    		 Variance
    		 
    Except Per Share Data)2022
    		 2022
    		 or Change
    		 or Change Pct.
    		 
    Assets        
    Cash and cash equivalents$101,615 $62,379 $39,236  62.9%
    Securities available for sale 1,344,093  1,526,086  (181,993) -11.9%
    Securities held to maturity 118,291  121,853  (3,562) -2.9%
    Loans held-for-sale 28,874  2,822  26,052  923.2%
    Loans receivable 5,417,845  5,003,201  414,644  8.3%
    Less: allowance for credit losses on loans (47,058) (43,860) 3,198  7.3%
    Net loans receivable 5,370,787  4,959,341  411,446  8.3%
    Premises and equipment 53,281  53,727  (446) -0.8%
    Federal Home Loan Bank stock 47,144  30,997  16,147  52.1%
    Accrued interest receivable 20,466  19,517  949  4.9%
    Goodwill 210,895  210,895  -  0.0%
    Core deposit intangible 3,020  3,166  (146) -4.6%
    Bank owned life insurance 289,177  287,644  1,533  0.5%
    Deferred income taxes, net 49,350  34,349  15,001  43.7%
    Other real estate owned 178  401  (223) -55.6%
    Other assets 82,712  76,714  5,998  7.8%
    Total assets$7,719,883 $7,389,891 $329,992  4.5%
             
    Liabilities        
    Deposits:        
    Non-interest-bearing$653,899 $621,954 $31,945  5.1%
    Interest-bearing 5,208,357  4,906,708  301,649  6.1%
    Total deposits 5,862,256  5,528,662  333,594  6.0%
    Borrowings 901,337  851,220  50,117  5.9%
    Advance payments by borrowers for taxes 16,746  16,979  (233) -1.4%
    Other liabilities 45,544  37,861  7,683  20.3%
    Total liabilities 6,825,883  6,434,722  391,161  6.1%
             
    Stockholders' Equity        
    Common stock 687  714  (27) -3.8%
    Paid-in capital 528,396  561,176  (32,780) -5.8%
    Retained earnings 445,451  441,522  3,929  0.9%
    Unearned ESOP shares (24,807) (25,294) 487  -1.9%
    Accumulated other comprehensive loss (55,727) (22,949) (32,778) 142.8%
    Total stockholders' equity 894,000  955,169  (61,169) -6.4%
    Total liabilities and stockholders' equity$7,719,883 $7,389,891 $329,992  4.5%
             
    Consolidated capital ratios        
    Equity to assets 11.58% 12.93% -1.35%  
    Tangible equity to tangible assets (1) 9.06% 10.33% -1.27%  
             
    Share data        
    Outstanding shares 68,666  71,424  (2,758) -3.9%
    Book value per share$13.02 $13.37 $(0.35) -2.6%
    Tangible book value per share (2)$9.90 $10.38 $(0.48) -4.6%


    ___________________________
    (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) 
             
     Three Months Ended     
    (Dollars and Shares in Thousands,June 30,
    		 March 31,
    		 Variance
    		 Variance
    Except Per Share Data)2022
    		 2022
    		 or Change
    		 or Change Pct.
    Interest income        
    Loans$48,869 $45,846 $3,023 6.6%
    Taxable investment securities 8,915  8,024  891 11.1%
    Tax-exempt investment securities 297  316  (19)-6.0%
    Other interest-earning assets 472  415  57 13.7%
    Total interest income 58,553  54,601  3,952 7.2%
             
    Interest expense        
    Deposits 3,915  3,565  350 9.8%
    Borrowings 4,039  3,309  730 22.1%
    Total interest expense 7,954  6,874  1,080 15.7%
    Net interest income 50,599  47,727  2,872 6.0%
    Provision for (reversal of) credit losses 4,222  (3,920) 8,142 -207.7%
    Net interest income after provision for (reversal of) credit losses 46,377  51,647  (5,270)-10.2%
             
    Non-interest income        
    Fees and service charges 658  617  41 6.6%
    (Loss) gain on sale and call of securities (563) 3  (566)-18866.7%
    Gain on sale of loans 187  376  (189)-50.3%
    (Loss) gain on sale of other real estate owned (9) 14  (23)-164.3%
    Income from bank owned life insurance 1,533  1,511  22 1.5%
    Electronic banking fees and charges 366  432  (66)-15.3%
    Other income 638  238  400 168.1%
    Total non-interest income 2,810  3,191  (381)-11.9%
             
    Non-interest expense        
    Salaries and employee benefits 20,367  19,184  1,183 6.2%
    Net occupancy expense of premises 3,188  3,223  (35)-1.1%
    Equipment and systems 4,516  3,822  694 18.2%
    Advertising and marketing 703  516  187 36.2%
    Federal deposit insurance premium 762  480  282 58.8%
    Directors' compensation 340  340  - 0.0%
    Other expense 3,736  3,058  678 22.2%
    Total non-interest expense 33,612  30,623  2,989 9.8%
    Income before income taxes 15,575  24,215  (8,640)-35.7%
    Income taxes 4,205  6,522  (2,317)-35.5%
    Net income$11,370 $17,693 $(6,323)-35.7%
             
    Net income per common share (EPS)        
    Basic$0.17 $0.25 $(0.08)  
    Diluted$0.17 $0.25 $(0.08)  
             
    Dividends declared        
    Cash dividends declared per common share$0.11 $0.11 $-   
    Cash dividends declared$7,441 $7,720 $(279)  
    Dividend payout ratio 65.4% 43.6% 21.8%  
             
    Weighted average number of common shares outstanding        
    Basic 67,240  69,790  (2,550)  
    Diluted 67,276  69,817  (2,541)  


      
    Kearny Financial Corp. 
    Average Balance Sheet Data 
    (Unaudited) 
             
     Three Months Ended     
     June 30,
    		 March 31,
    		 Variance
    		 Variance
    		 
    (Dollars in Thousands)2022
    		 2022
    		 or Change
    		 or Change Pct.
    		 
    Assets        
    Interest-earning assets:        
    Loans receivable, including loans held for sale$5,181,983 $4,850,236 $331,747  6.8%
    Taxable investment securities 1,608,372  1,620,996  (12,624) -0.8%
    Tax-exempt investment securities 51,672  55,390  (3,718) -6.7%
    Other interest-earning assets 87,990  79,644  8,346  10.5%
    Total interest-earning assets 6,930,017  6,606,266  323,751  4.9%
    Non-interest-earning assets 564,734  601,684  (36,950) -6.1%
    Total assets$7,494,751 $7,207,950 $286,801  4.0%
             
    Liabilities and Stockholders' Equity        
    Interest-bearing liabilities:        
    Deposits:        
    Interest-bearing demand$2,155,946 $2,133,977 $21,969  1.0%
    Savings 1,077,631  1,088,351  (10,720) -1.0%
    Certificates of deposit 1,701,725  1,650,048  51,677  3.1%
    Total interest-bearing deposits 4,935,302  4,872,376  62,926  1.3%
    Borrowings:        
    Federal Home Loan Bank advances 752,579  632,811  119,768  18.9%
    Other borrowings 185,901  51,667  134,234  259.8%
    Total borrowings 938,480  684,478  254,002  37.1%
    Total interest-bearing liabilities 5,873,782  5,556,854  316,928  5.7%
    Non-interest-bearing liabilities:        
    Non-interest-bearing deposits 640,200  624,152  16,048  2.6%
    Other non-interest-bearing liabilities 56,636  49,455  7,181  14.5%
    Total non-interest-bearing liabilities 696,836  673,607  23,229  3.4%
    Total liabilities 6,570,618  6,230,461  340,157  5.5%
    Stockholders' equity 924,133  977,489  (53,356) -5.5%
    Total liabilities and stockholders' equity$7,494,751 $7,207,950 $286,801  4.0%
             
    Average interest-earning assets to average interest-bearing liabilities 117.98% 118.89% -0.91% -0.8%


      
    Kearny Financial Corp. 
    Performance Ratio Highlights 
    (Unaudited) 
           
     Three Months Ended   
     June 30,
    		 March 31,
    		 Variance
    		 
     2022
    		 2022
    		 or Change
    		 
    Average yield on interest-earning assets:      
    Loans receivable, including loans held for sale 3.77% 3.78% -0.01%
    Taxable investment securities 2.22% 1.98% 0.24%
    Tax-exempt investment securities (1) 2.30% 2.28% 0.02%
    Other interest-earning assets 2.15% 2.08% 0.07%
    Total interest-earning assets 3.38% 3.31% 0.07%
           
    Average cost of interest-bearing liabilities:      
    Deposits:      
    Interest-bearing demand 0.31% 0.22% 0.09%
    Savings 0.11% 0.10% 0.01%
    Certificates of deposit 0.46% 0.52% -0.06%
    Total interest-bearing deposits 0.32% 0.29% 0.03%
    Borrowings:      
    Federal Home Loan Bank advances 1.96% 2.08% -0.12%
    Other borrowings 0.77% 0.17% 0.60%
    Total borrowings 1.72% 1.93% -0.21%
    Total interest-bearing liabilities 0.54% 0.49% 0.05%
           
    Interest rate spread (2) 2.84% 2.82% 0.02%
    Net interest margin (3) 2.92% 2.89% 0.03%
           
    Non-interest income to average assets
       (annualized)    		 0.15% 0.18% -0.03%
    Non-interest expense to average assets
       (annualized)    		 1.79% 1.70% 0.09%
           
    Efficiency ratio (4) 62.93% 60.14% 2.79%
           
    Return on average assets (annualized) 0.61% 0.98% -0.37%
    Return on average equity (annualized) 4.92% 7.24% -2.32%
    Return on average tangible equity (annualized) (5) 6.40% 9.27% -2.87%


    ___________________________
    (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.


      
      
    Year-to-Year Comparative Financial Analysis 
      
    Kearny Financial Corp. 
    Consolidated Balance Sheets 
             
    (Dollars and Shares in Thousands,June 30,
    		 June 30,
    		 Variance
    		 Variance
    		 
    Except Per Share Data)2022
    		 2021
    		 or Change
    		 or Change Pct.
    		 
     (Unaudited) (Audited)     
    Assets        
    Cash and cash equivalents$101,615 $67,855 $33,760  49.8%
    Securities available for sale 1,344,093  1,676,864  (332,771) -19.8%
    Securities held to maturity 118,291  38,138  80,153  210.2%
    Loans held-for-sale 28,874  16,492  12,382  75.1%
    Loans receivable, including yield adjustments 5,417,845  4,851,394  566,451  11.7%
    Less: allowance for credit losses on loans (47,058) (58,165) (11,107) -19.1%
    Net loans receivable 5,370,787  4,793,229  577,558  12.0%
    Premises and equipment 53,281  56,338  (3,057) -5.4%
    Federal Home Loan Bank of New York stock 47,144  36,615  10,529  28.8%
    Accrued interest receivable 20,466  19,362  1,104  5.7%
    Goodwill 210,895  210,895  -  0.0%
    Core deposit intangible 3,020  3,705  (685) -18.5%
    Bank owned life insurance 289,177  283,310  5,867  2.1%
    Deferred income tax assets, net 49,350  29,323  20,027  68.3%
    Other real estate owned 178  178  -  0.0%
    Other assets 82,712  51,431  31,281  60.8%
    Total assets$7,719,883 $7,283,735 $436,148  6.0%
             
    Liabilities        
    Deposits:        
    Non-interest-bearing$653,899 $593,718 $60,181  10.1%
    Interest-bearing 5,208,357  4,891,588  316,769  6.5%
    Total deposits 5,862,256  5,485,306  376,950  6.9%
    Borrowings 901,337  685,876  215,461  31.4%
    Advance payments by borrowers for taxes 16,746  15,752  994  6.3%
    Other liabilities 45,544  53,857  (8,313) -15.4%
    Total liabilities 6,825,883  6,240,791  585,092  9.4%
             
    Stockholders' Equity        
    Common stock$687 $790 $(103) -13.0%
    Paid-in capital 528,396  654,396  (126,000) -19.3%
    Retained earnings 445,451  408,367  37,084  9.1%
    Unearned ESOP shares (24,807) (26,753) 1,946  -7.3%
    Accumulated other comprehensive (loss) income (55,727) 6,144  (61,871) -1007.0%
    Total stockholders' equity 894,000  1,042,944  (148,944) -14.3%
    Total liabilities and stockholders' equity$7,719,883 $7,283,735 $436,148  6.0%
             
    Consolidated capital ratios        
    Equity to assets 11.58% 14.32% -2.74%  
    Tangible equity to tangible assets (1) 9.06% 11.72% -2.66%  
             
    Share data        
    Outstanding shares 68,666  78,965  (10,299) -13.0%
    Book value per share$13.02 $13.21 $(0.19) -1.4%
    Tangible book value per share (2)$9.90 $10.49 $(0.59) -5.6%


    ___________________________
    (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) 
             
     Year Ended     
    (Dollars and Shares in Thousands,June 30, June 30, Variance Variance 
    Except Per Share Data)2022 2021 or Change or Change Pct. 
    Interest income        
    Loans (1)$190,520 $202,240 $(11,720) -5.8%
    Taxable investment securities 32,746  31,238  1,508  4.8%
    Tax-exempt investment securities 1,273  1,652  (379) -22.9%
    Other interest-earning assets 1,733  2,955  (1,222) -41.4%
    Total Interest Income 226,272  238,085  (11,813) -5.0%
             
    Interest expense        
    Deposits 15,208  31,535  (16,327) -51.8%
    Borrowings 14,461  18,316  (3,855) -21.0%
    Total interest expense 29,669  49,851  (20,182) -40.5%
    Net interest income 196,603  188,234  8,369  4.4%
    Reversal of provision for credit losses (7,518) (1,121) (6,397) 570.7%
    Net interest income after reversal of provision for credit losses 204,121  189,355  14,766  7.8%
             
    Non-interest income        
    Fees and service charges (1) 2,580  1,897  683  36.0%
    (Loss) gain on sale and call of securities (559) 767  (1,326) -172.9%
    Gain on sale of loans 2,539  5,574  (3,035) -54.4%
    Gain on sale of real estate owned 5  -  5  0.0%
    Income from bank owned life insurance 6,167  6,267  (100) -1.6%
    Electronic banking fees and charges 1,626  1,717  (91) -5.3%
    Bargain purchase gain -  3,053  (3,053) -100.0%
    Other income 1,576  1,751  (175) -10.0%
    Total non-interest income 13,934  21,026  (7,092) -33.7%
             
    Non-interest expense        
    Salaries and employee benefits 76,264  68,800  7,464  10.8%
    Net occupancy expense of premises 14,114  12,673  1,441  11.4%
    Equipment and systems 15,886  14,870  1,016  6.8%
    Advertising and marketing 2,059  2,161  (102) -4.7%
    Federal deposit insurance premium 2,455  1,940  515  26.5%
    Directors' compensation 2,132  2,993  (861) -28.8%
    Merger-related expenses -  4,349  (4,349) -100.0%
    Debt extinguishment expenses -  796  (796) -100.0%
    Other expense 12,798  17,303  (4,505) -26.0%
    Total non-interest expense 125,708  125,885  (177) -0.1%
    Income before income taxes 92,347  84,496  7,851  9.3%
    Income taxes 24,800  21,263  3,537  16.6%
    Net income$67,547 $63,233 $4,314  6.8%
             
    Net income per common share (EPS)        
    Basic$0.95 $0.77 $0.18   
    Diluted$0.95 $0.77 $0.18   
             
    Dividends declared        
    Cash dividends declared per common share$0.43 $0.35 $0.08   
    Cash dividends declared$30,463 $28,538 $1,925   
    Dividend payout ratio 45.1% 45.1% 0.0%  
             
    Weighted average number of common shares outstanding        
    Basic 70,911  82,387  (11,476)  
    Diluted 70,933  82,391  (11,458)  


    ___________________________
    (1) Effective July 1, 2021, loan prepayment penalty income is recorded as a component of interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Amounts shown for the year ended June 30, 2021 have been adjusted to reflect this change. Loan prepayment penalty income for the year ended June 30, 2021 was $3.7 million.


      
      
    Kearny Financial Corp. 
    Average Balance Sheet Data 
    (Unaudited) 
             
     Year Ended     
     June 30, June 30, Variance Variance 
    (Dollars in Thousands)2022 2021 or Change or Change Pct. 
    Assets        
    Interest-earning assets:        
    Loans receivable, including loans held for sale$4,922,400 $4,866,436 $55,964  1.1%
    Taxable investment securities 1,622,475  1,571,452  51,023  3.2%
    Tax-exempt investment securities 55,981  74,604  (18,623) -25.0%
    Other interest-earning assets 82,802  200,435  (117,633) -58.7%
    Total interest-earning assets 6,683,658  6,712,927  (29,269) -0.4%
    Non-interest-earning assets 598,712  620,934  (22,222) -3.6%
    Total assets$7,282,370 $7,333,861 $(51,491) -0.7%
             
    Liabilities and Stockholders' Equity        
    Interest-bearing liabilities:        
    Deposits:        
    Interest-bearing demand$2,067,200 $1,726,190 $341,010  19.8%
    Savings 1,088,971  1,066,794  22,177  2.1%
    Certificates of deposit 1,711,276  1,931,887  (220,611) -11.4%
    Total interest-bearing deposits 4,867,447  4,724,871  142,576  3.0%
    Borrowings:        
    Federal Home Loan Bank Advances 679,388  931,148  (251,760) -27.0%
    Other borrowings 72,841  2,563  70,278  2742.0%
    Total borrowings 752,229  933,711  (181,482) -19.4%
    Total interest-bearing liabilities 5,619,676  5,658,582  (38,906) -0.7%
    Non-interest-bearing liabilities:        
    Non-interest-bearing deposits 624,666  518,149  106,517  20.6%
    Other non-interest-bearing liabilities 53,477  65,737  (12,260) -18.7%
    Total non-interest-bearing liabilities 678,143  583,886  94,257  16.1%
    Total liabilities 6,297,819  6,242,468  55,351  0.9%
    Stockholders' equity 984,551  1,091,393  (106,842) -9.8%
    Total liabilities and stockholders' equity$7,282,370 $7,333,861 $(51,491) -0.7%
             
    Average interest-earning assets to average interest-bearing liabilities 118.93% 118.63% 0.30% 0.3%


      
    Kearny Financial Corp. 
    Performance Ratio Highlights 
           
     Year Ended   
     June 30, June 30, Variance 
     2022 2021 or Change 
    Average yield on interest-earning assets:      
    Loans receivable, including loans held for sale (1) 3.87% 4.16% -0.29%
    Taxable investment securities 2.02% 1.99% 0.03%
    Tax-exempt investment securities (2) 2.27% 2.21% 0.06%
    Other interest-earning assets 2.09% 1.47% 0.62%
    Total interest-earning assets (1) 3.39% 3.55% -0.16%
           
    Average cost of interest-bearing liabilities:      
    Deposits:      
    Interest-bearing demand 0.25% 0.41% -0.16%
    Savings 0.11% 0.31% -0.20%
    Certificates of deposit 0.52% 1.10% -0.58%
    Total interest-bearing deposits 0.31% 0.67% -0.36%
    Borrowings:      
    Federal Home Loan Bank Advances 2.07% 1.97% 0.10%
    Other borrowings 0.54% 0.06% 0.48%
    Total borrowings 1.92% 1.96% -0.04%
    Total interest-bearing liabilities 0.53% 0.88% -0.35%
           
    Interest rate spread (1)(3) 2.86% 2.67% 0.19%
    Net interest margin (1)(4) 2.94% 2.80% 0.14%
           
    Non-interest income to average assets (1) 0.19% 0.29% -0.10%
    Non-interest expense to average assets 1.73% 1.72% 0.01%
           
    Efficiency ratio (5) 59.71% 60.16% -0.45%
           
    Return on average assets 0.93% 0.86% 0.07%
    Return on average equity 6.86% 5.79% 1.07%
    Return on average tangible equity (6) 8.77% 7.22% 1.55%


    ___________________________
    (1) Effective July 1, 2021, loan prepayment penalty income is recorded as a component of interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Amounts shown for the year ended June 30, 2021 have been adjusted to reflect this change. Loan prepayment penalty income for the year ended June 30, 2021 was $3.7 million.
    (2) The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
    (3) Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
    (4) Net interest income divided by average interest-earning assets.
    (5) Non-interest expense divided by the sum of net interest income and non-interest income.
    (6) 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)    		June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    		 
     (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) 
    Assets          
    Cash and cash equivalents$101,615 $62,379 $60,452 $54,070 $67,855 
    Securities available for sale 1,344,093  1,526,086  1,591,066  1,651,156  1,676,864 
    Securities held to maturity 118,291  121,853  53,142  37,497  38,138 
    Loans held-for-sale 28,874  2,822  12,549  12,884  16,492 
    Loans receivable 5,417,845  5,003,201  4,826,404  4,789,339  4,851,394 
    Less: allowance for credit losses on loans (47,058) (43,860) (48,216) (51,785) (58,165)
    Net loans receivable 5,370,787  4,959,341  4,778,188  4,737,554  4,793,229 
    Premises and equipment 53,281  53,727  54,067  55,236  56,338 
    Federal Home Loan Bank stock 47,144  30,997  36,622  36,615  36,615 
    Accrued interest receivable 20,466  19,517  18,495  19,541  19,362 
    Goodwill 210,895  210,895  210,895  210,895  210,895 
    Core deposit intangible 3,020  3,166  3,344  3,524  3,705 
    Bank owned life insurance 289,177  287,644  286,433  284,871  283,310 
    Deferred income taxes, net 49,350  34,349  25,709  27,771  29,323 
    Other real estate owned 178  401  658  178  178 
    Other assets 82,712  76,714  54,603  51,896  51,431 
    Total assets$7,719,883 $7,389,891 $7,186,223 $7,183,688 $7,283,735 
               
    Liabilities          
    Deposits:          
    Non-interest-bearing$653,899 $621,954 $604,805 $631,344 $593,718 
    Interest-bearing 5,208,357  4,906,708  4,849,220  4,763,795  4,891,588 
    Total deposits 5,862,256  5,528,662  5,454,025  5,395,139  5,485,306 
    Borrowings 901,337  851,220  686,105  720,990  685,876 
    Advance payments by borrowers for taxes 16,746  16,979  16,772  16,222  15,752 
    Other liabilities 45,544  37,861  33,851  36,914  53,857 
    Total liabilities 6,825,883  6,434,722  6,190,753  6,169,265  6,240,791 
               
    Stockholders' Equity          
    Common stock 687  714  735  758  790 
    Paid-in capital 528,396  561,176  587,392  616,894  654,396 
    Retained earnings 445,451  441,522  431,549  420,701  408,367 
    Unearned ESOP shares (24,807) (25,294) (25,780) (26,266) (26,753)
    Accumulated other comprehensive (loss) income (55,727) (22,949) 1,574  2,336  6,144 
    Total stockholders' equity 894,000  955,169  995,470  1,014,423  1,042,944 
    Total liabilities and stockholders' equity$7,719,883 $7,389,891 $7,186,223 $7,183,688 $7,283,735 
               
    Consolidated capital ratios          
    Equity to assets 11.58% 12.93% 13.85% 14.12% 14.32%
    Tangible equity to tangible assets (1) 9.06% 10.33% 11.21% 11.48% 11.72%
               
    Share data          
    Outstanding shares 68,666  71,424  73,453  75,800  78,965 
    Book value per share$13.02 $13.37 $13.55 $13.38 $13.21 
    Tangible book value per share (2)$9.90 $10.38 $10.64 $10.55 $10.49 


    ___________________________
    (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)June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    		 
    Loan portfolio composition:          
    Commercial loans:          
    Multi-family mortgage$2,409,090 $2,076,003 $2,007,431 $1,978,681 $2,039,260 
    Nonresidential mortgage 1,019,838  1,085,988  1,026,447  1,023,391  1,079,444 
    Commercial business 176,807  169,551  180,429  169,392  168,951 
    Construction 140,131  121,137  110,703  112,226  93,804 
    Total commercial loans 3,745,866  3,452,679  3,325,010  3,283,690  3,381,459 
    One- to four-family residential mortgage 1,645,816  1,527,980  1,477,267  1,483,106  1,447,721 
    Consumer loans:          
    Home equity loans 42,028  41,501  43,934  44,912  47,871 
    Other consumer 2,866  2,755  3,040  3,020  3,259 
    Total consumer loans 44,894  44,256  46,974  47,932  51,130 
    Total loans, excluding yield adjustments 5,436,576  5,024,915  4,849,251  4,814,728  4,880,310 
    Unaccreted yield adjustments (18,731) (21,714) (22,847) (25,389) (28,916)
    Loans receivable, net of yield adjustments 5,417,845  5,003,201  4,826,404  4,789,339  4,851,394 
    Less: allowance for credit losses on loans (47,058) (43,860) (48,216) (51,785) (58,165)
    Net loans receivable$5,370,787 $4,959,341 $4,778,188 $4,737,554 $4,793,229 
               
    Loan portfolio allocation:          
    Commercial loans:          
    Multi-family mortgage 44.3% 41.3% 41.4% 41.1% 41.8%
    Nonresidential mortgage 18.8% 21.6% 21.2% 21.3% 22.1%
    Commercial business 3.2% 3.4% 3.7% 3.5% 3.5%
    Construction 2.6% 2.4% 2.3% 2.3% 1.9%
    Total commercial loans 68.9% 68.7% 68.6% 68.2% 69.3%
    One- to four-family residential mortgage 30.3% 30.4% 30.5% 30.8% 29.7%
    Consumer loans:          
    Home equity loans 0.8% 0.8% 0.9% 0.9% 0.9%
    Other consumer 0.0% 0.1% 0.0% 0.1% 0.1%
    Total consumer loans 0.8% 0.9% 0.9% 1.0% 1.0%
    Total loans, excluding yield adjustments 100.0% 100.0% 100.0% 100.0% 100.0%
               
    Asset quality:          
    Nonperforming assets:          
    Accruing loans - 90 days and over past due$- $- $- $- $- 
    Nonaccrual loans 70,321  80,595  72,138  72,945  79,767 
    Total nonperforming loans 70,321  80,595  72,138  72,945  79,767 
    Nonaccrual loans held-for-sale 21,745  -  -  -  - 
    Other real estate owned 178  401  658  178  178 
    Total nonperforming assets$92,244 $80,996 $72,796 $73,123 $79,945 
               
    Nonperforming loans (% total loans) 1.30% 1.61% 1.49% 1.52% 1.64%
    Nonperforming assets (% total assets) 1.19% 1.10% 1.01% 1.02% 1.10%
               
    Allowance for credit losses on loans (ACL):          
    ACL to total loans 0.87% 0.87% 0.99% 1.08% 1.19%
    ACL to nonperforming loans 66.92% 54.42% 66.84% 70.99% 72.92%
    Net charge-offs$1,024 $436 $1,149 $980 $656 
    Average net charge-off rate (annualized) 0.08% 0.04% 0.10% 0.08% 0.05%


      
    Kearny Financial Corp. 
    Supplemental Balance Sheet Highlights 
    (Unaudited) 
               
    (Dollars in Thousands)June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    		 
    Funding by type:          
    Deposits:          
    Non-interest-bearing deposits$653,899 $621,954 $604,805 $631,344 $593,718 
    Interest-bearing demand 2,265,597  2,154,488  2,106,693  1,937,661  1,902,478 
    Savings 1,053,198  1,088,974  1,087,740  1,089,699  1,111,364 
    Certificates of deposit 1,889,562  1,663,246  1,654,787  1,736,435  1,877,746 
    Interest-bearing deposits 5,208,357  4,906,708  4,849,220  4,763,795  4,891,588 
    Total deposits 5,862,256  5,528,662  5,454,025  5,395,139  5,485,306 
               
    Borrowings:          
    Federal Home Loan Bank advances 651,337  541,220  666,105  665,990  665,876 
    Overnight borrowings 250,000  310,000  20,000  55,000  20,000 
    Total borrowings 901,337  851,220  686,105  720,990  685,876 
               
    Total funding$6,763,593 $6,379,882 $6,140,130 $6,116,129 $6,171,182 
               
    Loans as a % of deposits 92.1% 89.8% 87.8% 88.1% 87.7%
    Deposits as a % of total funding 86.7% 86.7% 88.8% 88.2% 88.9%
    Borrowings as a % of total funding 13.3% 13.3% 11.2% 11.8% 11.1%
               
    Funding by source:          
    Retail deposits:          
    Non-interest-bearing deposits$653,899 $621,954 $604,805 $631,344 $593,718 
    Interest-bearing demand 2,265,597  2,154,488  2,106,693  1,937,661  1,902,478 
    Savings 1,053,198  1,088,974  1,087,740  1,089,699  1,111,364 
    Certificates of deposit 1,116,035  1,122,228  1,184,530  1,264,016  1,398,808 
    Total retail deposits 5,088,729  4,987,644  4,983,768  4,922,720  5,006,368 
               
    Wholesale funding:          
    Certificates of deposit (listing service)$11,665 $9,981 $11,622 $13,817 $20,322 
    Certificates of deposit (brokered) 761,862  531,037  458,635  458,602  458,616 
    Total wholesale deposits 773,527  541,018  470,257  472,419  478,938 
    FHLB advances 651,337  541,220  666,105  665,990  665,876 
    Overnight borrowings 250,000  310,000  20,000  55,000  20,000 
    Total wholesale funding 1,674,864  1,392,238  1,156,362  1,193,409  1,164,814 
               
    Total funding$6,763,593 $6,379,882 $6,140,130 $6,116,129 $6,171,182 
               
    Retail funding as a % of total funding 75.2% 78.2% 81.2% 80.5% 81.1%
    Wholesale funding as a % of total funding 24.8% 21.8% 18.8% 19.5% 18.9%


      
    Kearny Financial Corp. 
    Consolidated Statements of Income 
    (Unaudited) 
               
     Three Months Ended 
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    		 
    Interest income          
    Loans (1)$48,869 $45,846 $47,575 $48,230 $48,464 
    Taxable investment securities 8,915  8,024  7,595  8,212  8,304 
    Tax-exempt investment securities 297  316  327  333  355 
    Other interest-earning assets 472  415  415  431  549 
    Total interest income 58,553  54,601  55,912  57,206  57,672 
               
    Interest expense          
    Deposits 3,915  3,565  3,663  4,065  5,156 
    Borrowings 4,039  3,309  3,562  3,551  3,451 
    Total interest expense 7,954  6,874  7,225  7,616  8,607 
    Net interest income 50,599  47,727  48,687  49,590  49,065 
    Provision for (reversal of) credit losses 4,222  (3,920) (2,420) (5,400) (4,941)
    Net interest income after provision for (reversal of) credit losses 46,377  51,647  51,107  54,990  54,006 
               
    Non-interest income          
    Fees and service charges (1) 658  617  698  607  423 
    (Loss) gain on sale and call of securities (563) 3  -  1  313 
    Gain on sale of loans 187  376  970  1,006  363 
    (Loss) gain on sale of other real estate owned (9) 14  -  -  - 
    Income from bank owned life insurance 1,533  1,511  1,562  1,561  1,545 
    Electronic banking fees and charges 366  432  421  407  452 
    Other income 638  238  482  218  400 
    Total non-interest income 2,810  3,191  4,133  3,800  3,496 
               
    Non-interest expense          
    Salaries and employee benefits 20,367  19,184  18,096  18,617  17,777 
    Net occupancy expense of premises 3,188  3,223  3,156  4,547  2,998 
    Equipment and systems 4,516  3,822  3,723  3,825  3,575 
    Advertising and marketing 703  516  448  392  581 
    Federal deposit insurance premium 762  480  721  492  490 
    Directors' compensation 340  340  649  803  749 
    Other expense 3,736  3,058  2,877  3,127  5,816 
    Total non-interest expense 33,612  30,623  29,670  31,803  31,986 
    Income before income taxes 15,575  24,215  25,570  26,987  25,516 
    Income taxes 4,205  6,522  6,801  7,272  7,033 
    Net income$11,370 $17,693 $18,769 $19,715 $18,483 
               
    Net income per common share (EPS)          
    Basic$0.17 $0.25 $0.26 $0.26 $0.24 
    Diluted$0.17 $0.25 $0.26 $0.26 $0.24 
               
    Dividends declared          
    Cash dividends declared per common share$0.11 $0.11 $0.11 $0.10 $0.10 
    Cash dividends declared$7,441 $7,720 $7,921 $7,381 $7,710 
    Dividend payout ratio 65.4% 43.6% 42.2% 37.4% 41.7%
               
    Weighted average number of common shares outstanding          
    Basic 67,240  69,790  72,011  74,537  77,658 
    Diluted 67,276  69,817  72,037  74,556  77,680 


    ___________________________
    (1) Effective July 1, 2021, loan prepayment penalty income is recorded as a component of interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Periods prior to the quarter ended September 30, 2021 have been adjusted to reflect this change. Loan prepayment penalty income for the quarter ended June 30, 2021 was $902,000.


      
      
    Kearny Financial Corp. 
    Average Balance Sheet Data 
    (Unaudited) 
               
     Three Months Ended 
    (Dollars in Thousands)June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    		 
    Assets          
    Interest-earning assets:          
    Loans receivable, including loans held-for-sale$5,181,983 $4,850,236 $4,822,959 $4,835,676 $4,817,980 
    Taxable investment securities 1,608,372  1,620,996  1,610,395  1,649,953  1,720,838 
    Tax-exempt investment securities 51,672  55,390  57,686  59,115  63,047 
    Other interest-earning assets 87,990  79,644  77,811  85,749  117,212 
    Total interest-earning assets 6,930,017  6,606,266  6,568,851  6,630,493  6,719,077 
    Non-interest-earning assets 564,734  601,684  611,390  616,735  609,762 
    Total assets$7,494,751 $7,207,950 $7,180,241 $7,247,228 $7,328,839 
               
    Liabilities and Stockholders' Equity          
    Interest-bearing liabilities:          
    Deposits:          
    Interest-bearing demand$2,155,946 $2,133,977 $2,027,021 $1,954,271 $1,930,193 
    Savings 1,077,631  1,088,351  1,086,903  1,102,865  1,118,402 
    Certificates of deposit 1,701,725  1,650,048  1,693,423  1,798,473  1,934,650 
    Total interest-bearing deposits 4,935,302  4,872,376  4,807,347  4,855,609  4,983,245 
    Borrowings:          
    Federal Home Loan Bank advances 752,579  632,811  666,029  665,915  665,802 
    Other borrowings 185,901  51,667  26,033  28,532  6,670 
    Total borrowings 938,480  684,478  692,062  694,447  672,472 
    Total interest-bearing liabilities 5,873,782  5,556,854  5,499,409  5,550,056  5,655,717 
    Non-interest-bearing liabilities:          
    Non-interest-bearing deposits 640,200  624,152  624,200  610,271  566,632 
    Other non-interest-bearing liabilities 56,636  49,455  50,870  56,893  52,292 
    Total non-interest-bearing liabilities 696,836  673,607  675,070  667,164  618,924 
    Total liabilities 6,570,618  6,230,461  6,174,479  6,217,220  6,274,641 
    Stockholders' equity 924,133  977,489  1,005,762  1,030,008  1,054,198 
    Total liabilities and stockholders' equity$7,494,751 $7,207,950 $7,180,241 $7,247,228 $7,328,839 
               
    Average interest-earning assets to average interest-bearing liabilities 117.98% 118.89% 119.45% 119.47% 118.80%


      
    Kearny Financial Corp. 
    Performance Ratio Highlights 
               
     Three Months Ended 
     June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    		 
    Average yield on interest-earning assets:          
    Loans receivable, including loans held-for- sale (1) 3.77% 3.78% 3.95% 3.99% 4.02%
    Taxable investment securities 2.22% 1.98% 1.89% 1.99% 1.93%
    Tax-exempt investment securities (2) 2.30% 2.28% 2.26% 2.25% 2.25%
    Other interest-earning assets 2.15% 2.08% 2.13% 2.01% 1.87%
    Total interest-earning assets (1) 3.38% 3.31% 3.40% 3.45% 3.43%
               
    Average cost of interest-bearing liabilities:          
    Deposits:          
    Interest-bearing demand 0.31% 0.22% 0.22% 0.23% 0.27%
    Savings 0.11% 0.10% 0.11% 0.12% 0.15%
    Certificates of deposit 0.46% 0.52% 0.53% 0.57% 0.71%
    Total interest-bearing deposits 0.32% 0.29% 0.30% 0.33% 0.41%
    Borrowings:          
    Federal Home Loan Bank advances 1.96% 2.08% 2.14% 2.13% 2.07%
    Other borrowings 0.77% 0.17% 0.09% 0.10% 0.07%
    Total borrowings 1.72% 1.93% 2.06% 2.05% 2.05%
    Total interest-bearing liabilities 0.54% 0.49% 0.53% 0.55% 0.61%
               
    Interest rate spread (1) (3) 2.84% 2.82% 2.87% 2.90% 2.82%
    Net interest margin (1) (4) 2.92% 2.89% 2.96% 2.99% 2.92%
               
    Non-interest income to average assets
       (annualized) (1)    		 0.15% 0.18% 0.23% 0.21% 0.19%
    Non-interest expense to average assets
       (annualized)    		 1.79% 1.70% 1.65% 1.76% 1.75%
               
    Efficiency ratio (5) 62.93% 60.14% 56.17% 59.57% 60.86%
               
    Return on average assets (annualized) 0.61% 0.98% 1.05% 1.09% 1.01%
    Return on average equity (annualized) 4.92% 7.24% 7.46% 7.66% 7.01%
    Return on average tangible equity (annualized) (6) 6.40% 9.27% 9.49% 9.67% 8.81%


    ___________________________
    (1) Effective July 1, 2021, loan prepayment penalty income is recorded as a component of interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Periods prior to the quarter ended September 30, 2021 have been adjusted to reflect this change. Loan prepayment penalty income for the quarter ended June 30, 2021 was $902,000.
    (2) The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
    (3) Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
    (4) Net interest income divided by average interest-earning assets.
    (5) Non-interest expense divided by the sum of net interest income and non-interest income.
    (6) 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)    		June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    		 
    Adjusted net income:          
    Net income (GAAP)$11,370 $17,693 $18,769 $19,715 $18,483 
    Non-recurring transactions - net of tax:          
    Early contract termination 568  -  -  -  - 
    Branch consolidation expenses and impairment charges -  -  132  1,209  870 
    Net effect of sale and call of securities 400  (2) -  (1) (220)
    Reversal of income tax valuation allowance -  -  -  -  (12)
    Net effect of sale of other assets -  -  (251) -  (144)
    Adjusted net income$12,338 $17,691 $18,650 $20,923 $18,977 
               
    Calculation of pre-tax, pre-provision net revenue:          
    Net income (GAAP)$11,370 $17,693 $18,769 $19,715 $18,483 
    Adjustments to net income (GAAP):          
    Provision for income taxes 4,205  6,522  6,801  7,272  7,033 
    Provision for (reversal of) credit losses 4,222  (3,920) (2,420) (5,400) (4,941)
    Pre-tax, pre-provision net revenue (non-GAAP)$19,797 $20,295 $23,150 $21,587 $20,575 
               
    Adjusted earnings per share:          
    Weighted average common shares - basic 67,240  69,790  72,011  74,537  77,658 
    Weighted average common shares - diluted 67,276  69,817  72,037  74,556  77,680 
               
    Earnings per share - basic (GAAP)$0.17 $0.25 $0.26 $0.26 $0.24 
    Earnings per share - diluted (GAAP)$0.17 $0.25 $0.26 $0.26 $0.24 
               
    Adjusted earnings per share - basic (non-GAAP)$0.18 $0.25 $0.26 $0.28 $0.24 
    Adjusted earnings per share - diluted (non-GAAP)$0.18 $0.25 $0.26 $0.28 $0.24 
               
    Adjusted return on average assets:          
    Total average assets$7,494,751 $7,207,950 $7,180,241 $7,247,228 $7,328,839 
               
    Return on average assets (GAAP) 0.61% 0.98% 1.05% 1.09% 1.01%
    Adjusted return on average assets (non-GAAP) 0.66% 0.98% 1.04% 1.15% 1.04%
               
    Adjusted return on average equity:          
    Total average equity$924,133 $977,489 $1,005,762 $1,030,008 $1,054,198 
               
    Return on average equity (GAAP) 4.92% 7.24% 7.46% 7.66% 7.01%
    Adjusted return on average equity (non-GAAP) 5.34% 7.24% 7.42% 8.13% 7.20%


      
    Kearny Financial Corp. 
    Reconciliation of GAAP to Non-GAAP 
    (Unaudited) 
               
     Three Months Ended 
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    		 
    Adjusted return on average tangible equity:          
    Total average equity$924,133 $977,489 $1,005,762 $1,030,008 $1,054,198 
    Less: average goodwill (210,895) (210,895) (210,895) (210,895) (210,895)
    Less: average other intangible assets (3,116) (3,282) (3,462) (3,641) (3,825)
    Total average tangible equity$710,122 $763,312 $791,405 $815,472 $839,478 
               
    Return on average tangible equity (non-GAAP) 6.40% 9.27% 9.49% 9.67% 8.81%
    Adjusted return on average tangible equity (non-GAAP) 6.95% 9.27% 9.43% 10.26% 9.04%
               
    Adjusted non-interest expense ratio:          
    Non-interest expense (GAAP)$33,612 $30,623 $29,670 $31,803 $31,986 
    Non-recurring transactions:          
    Early contract termination (800) -  -  -  - 
    Branch consolidation expenses and impairment charges -  -  (187) (1,711) (1,239)
    Non-interest expense (non-GAAP)$32,812 $30,623 $29,483 $30,092 $30,747 
               
    Non-interest expense ratio (GAAP) 1.79% 1.70% 1.65% 1.76% 1.75%
    Adjusted non-interest expense ratio (non-GAAP) 1.75% 1.70% 1.64% 1.66% 1.68%
               
    Adjusted efficiency ratio:          
    Non-interest expense (non-GAAP)$32,812 $30,623 $29,483 $30,092 $30,747 
               
    Net interest income (GAAP)$50,599 $47,727 $48,687 $49,590 $49,065 
    Total non-interest income (GAAP) 2,810  3,191  4,133  3,800  3,496 
    Non-recurring transactions:          
    Net effect of sale and call of securities 563  (3) -  (1) (313)
    Net effect of sale of other assets -  -  (356) -  (205)
    Total revenue (non-GAAP)$53,972 $50,915 $52,464 $53,389 $52,043 
               
    Efficiency ratio (GAAP) 62.93% 60.14% 56.17% 59.57% 60.86%
    Adjusted efficiency ratio (non-GAAP) 60.79% 60.15% 56.20% 56.36% 59.08%


      
    Kearny Financial Corp. 
    Reconciliation of GAAP to Non-GAAP 
    (Unaudited) 
         
     Year Ended 
    (Dollars and Shares in Thousands,June 30, June 30, 
    Except Per Share Data)2022 2021 
    Adjusted net income:    
    Net income (GAAP)$67,547 $63,233 
    Non-recurring transactions - net of tax:    
    Early contract termination 568  - 
    Bargain purchase gain -  (3,053)
    Provision for credit losses on non-PCD loans -  3,563 
    Merger-related expenses -  3,123 
    Branch consolidation expenses and impairment charges 1,341  1,377 
    Net effect of sale and call of securities 397  (804)
    Debt extinguishment expenses -  558 
    Reversal of income tax valuation allowance -  (535)
    Net effect of sale of other assets (251) (731)
    Adjusted net income$69,602 $66,731 
         
    Calculation of pre-tax, pre-provision income:    
    Net income (GAAP)$67,547 $63,233 
    Adjustments to net income (GAAP):    
    Provision for income taxes 24,800  21,263 
    Reversal of provision for credit losses (7,518) (1,121)
    Pre-tax, pre-provision income$84,829 $83,375 
         
    Adjusted earnings per share:    
    Weighted average common shares - basic 70,911  82,387 
    Weighted average common shares - diluted 70,933  82,391 
         
    Earnings per share - basic (GAAP)$0.95 $0.77 
    Earnings per share - diluted (GAAP)$0.95 $0.77 
         
    Adjusted earnings per share - basic (non-GAAP)$0.98 $0.81 
    Adjusted earnings per share - diluted (non-GAAP)$0.98 $0.81 
         
    Adjusted return on average assets:    
    Total average assets$7,282,370 $7,333,861 
         
    Return on average assets (GAAP) 0.93% 0.86%
    Adjusted return on average assets (non-GAAP) 0.96% 0.91%
         
    Adjusted return on average equity:    
    Total average equity$984,551 $1,091,393 
         
    Return on average equity (GAAP) 6.86% 5.79%
    Adjusted return on average equity (non-GAAP) 7.07% 6.11%
         
    Adjusted return on average tangible equity:    
    Total average equity$984,551 $1,091,393 
    Less: average goodwill (210,895) (210,895)
    Less: average other intangible assets (3,377) (4,133)
    Total average tangible equity$770,279 $876,365 
         
    Return on average tangible equity (non-GAAP) 8.77% 7.22%
    Adjusted return on average tangible equity (non-GAAP) 9.04% 7.61%


      
    Kearny Financial Corp. 
    Reconciliation of GAAP to Non-GAAP 
    (Unaudited) 
         
     Year Ended 
     June 30, June 30, 
    (Dollars in Thousands)2022 2021 
    Adjusted non-interest expense ratio:    
    Non-interest expense (GAAP)$125,708 $125,885 
    Non-routine transactions:    
    Early contract termination (800) - 
    Merger-related expenses -  (4,349)
    Branch consolidation expenses and impairment charges (1,898) (1,961)
    Debt extinguishment expenses -  (796)
    Non-interest expense (non-GAAP)$123,010 $118,779 
         
    Non-interest expense ratio (GAAP) 1.73% 1.72%
    Adjusted non-interest expense ratio (non-GAAP) 1.69% 1.62%
         
    Adjusted efficiency ratio:    
    Non-interest expense (non-GAAP)$123,010 $118,779 
         
    Net interest income (GAAP)$196,603 $188,234 
    Total non-interest income (GAAP) 13,934  21,026 
    Non-routine transactions:    
    Net effect of sale and call of securities 559  (1,144)
    Bargain purchase gain -  (3,053)
    Net effect of sale of other assets (356) (1,042)
    Total revenue (non-GAAP)$210,740 $204,021 
         
    Efficiency ratio (GAAP) 59.71% 60.16%
    Adjusted efficiency ratio (non-GAAP) 58.37% 58.22%
           

    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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