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

    Source: Nasdaq GlobeNewswire / 25 Apr 2024 07:30:01   America/Chicago

    FAIRFIELD, N.J., April 25, 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 March 31, 2024 of $7.4 million, or $0.12 per diluted share, compared to a net loss of $13.8 million, or $0.22 per diluted share, for the quarter ended December 31, 2023. The net loss for the quarter ended December 31, 2023 was impacted by various non-recurring items, as previously disclosed.

    The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on May 22, 2024, to stockholders of record as of May 8, 2024.

    Craig L. Montanaro, President and Chief Executive Officer, commented, “Once again uncertainty remains on the forefront of conversations taking place on Main Street and on Wall Street. As a company we manage through such challenging periods by staying true to our guiding principles, which have endured since our founding 140 years ago this month: prudent risk management, conservative posturing and an unwavering commitment to our depositors, borrowers, employees and communities.”

    Mr. Montanaro continued, “Despite the media speculation surrounding commercial real estate lending in general, and multifamily lending specifically, we maintain a low loan-to-value, low-vacancy, well-diversified commercial loan portfolio with a long history of outstanding credit performance. We subject each loan to intense scrutiny at underwriting, and on an ongoing basis, and maintain peer-leading levels of commercial loan allowance coverage and regulatory capital, as represented by our 14.7% Common Equity Tier 1 capital ratio.”

    Balance Sheet

    • Total assets were $7.84 billion at March 31, 2024, a decrease of $55.9 million, or 0.7%, from December 31, 2023.
    • Investment securities totaled $1.24 billion at March 31, 2024, a decrease of $47.8 million, or 3.7%, from December 31, 2023.
    • Loans receivable totaled $5.76 billion at March 31, 2024, an increase of $12.7 million, or 0.2%, from December 31, 2023.
    • Bank-owned life insurance (“BOLI”) totaled $296.5 million at March 31, 2024, an increase of $40.4 million, or 15.8%, from December 31, 2023. The increase for the quarter was largely attributable to the completion of the BOLI restructure initiated in the prior comparative period.
    • Deposits were $5.21 billion at March 31, 2024, a decrease of $110.6 million, or 2.1%, from December 31, 2023. Excluding a decrease of $50.2 million in brokered certificates of deposits, deposits decreased $60.4 million, or 1.2%, from December 31, 2023. This decrease in non-brokered deposits was driven by a $48.4 million decline in retail certificates of deposits and a $15.7 million decline in consumer savings deposits, partially offset by growth in other deposit categories.
    • Borrowings were $1.72 billion at March 31, 2024, an increase of $55.1 million, or 3.3%, from December 31, 2023.
    • At March 31, 2024, the Company maintained available secured borrowing capacity of $1.81 billion, of which $1.47 billion was immediately accessible via in-place collateral and $336.7 million represented the market value of unpledged securities.

    Earnings

    Net Interest Income and Net Interest Margin

    • Net interest margin contracted 5 basis point to 1.89% for the quarter ended March 31, 2024. The decrease for the quarter was driven by an increase in the cost of interest-bearing deposits and a decrease in the average balance of interest-earning assets, partially offset by a higher yield on interest-earning assets and a decrease in the cost of interest-bearing borrowings.
    • For the quarter ended March 31, 2024, net interest income decreased $1.5 million to $34.3 million from $35.8 million for the quarter ended December 31, 2023. Included in net interest income for the quarters ended March 31, 2024 and December 31, 2023, respectively, was purchase accounting accretion of $734,000 and $640,000, and loan prepayment penalty income of $61,000 and $185,000.

    Non-Interest Income

    • Non-interest income increased $20.2 million to income of $4.2 million for the quarter ended March 31, 2024, from a loss of $16.0 million for the quarter ended December 31, 2023. The increase was primarily attributable to a pre-tax loss of $18.1 million related to the investment securities portfolio repositioning executed during the prior comparative period.
    • Income from BOLI increased $1.8 million to $3.0 million for the quarter ended March 31, 2024 from $1.2 million for the quarter ended December 31, 2023. BOLI income included a $631,000 non-recurring payment on one life insurance policy in the current period, while BOLI income was reduced by non-recurring exchange charges of $573,000 in the prior comparative period. Excluding these non-recurring items, BOLI income improved by $673,000 resulting from the previously mentioned BOLI restructure.
    • Loss on sale of loans was $712,000 for the quarter ended March 31, 2024 compared to a gain on sale of loans of $104,000 for the quarter ended December 31, 2023. The loss in the current period was the result of the sale of three related nonperforming commercial real estate loans held-for-sale.

    Non-Interest Expense

    • For the quarter ended March 31, 2024, non-interest expense decreased $708,000, or 2.4%, to $29.1 million from $29.8 million for the quarter ended December 31, 2023, primarily driven by a decrease in salary and benefits expense and other expense.
    • Salary and benefits expense decreased $371,000 primarily attributable to a non-recurring decrease of $679,000 in stock-based compensation, partially offset by an increase of $374,000 in payroll taxes associated with the start of the new calendar year.
    • Other expense decreased $522,000 primarily driven by a $637,000 decrease in OREO expense following the sale of the Company’s sole OREO asset, partially offset by an increase of $288,000 in the provision for credit losses on off balance sheet commitments.

    Income Taxes

    • Income tax expense totaled $1.7 million for the quarter ended March 31, 2024 compared to $1.8 million for the quarter ended December 31, 2023. The decrease in income tax expense was largely due to the discrete tax expense associated with the BOLI restructure recognized in the prior comparative period, partially offset by higher pre-tax income, due primarily to realized losses on the sale of securities in the prior comparative period.

    Asset Quality

    • The balance of non-performing assets decreased $10.2 million to $39.5 million, or 0.50% of total assets, at March 31, 2024, from $49.8 million, or 0.63% of total assets, at December 31, 2023. This decrease was driven by the January 2024 sale of three related non-performing commercial real estate loans held-for-sale and the Company’s sole OREO asset.
    • Net charge-offs totaled $286,000, or 0.02% of average loans, on an annualized basis, for the quarter ended March 31, 2024, compared to $4.1 million, or 0.29% of average loans, on an annualized basis, for the quarter ended December 31, 2023.
    • For the quarter ended March 31, 2024, the Company recorded a provision for credit losses of $349,000, compared to $2.1 million for the quarter ended December 31, 2023. The provision for credit loss expense for the quarter ended March 31, 2024 was primarily driven by loan growth.
    • The allowance for credit losses (“ACL”) was $44.9 million, or 0.78% of total loans, at March 31, 2024 and unchanged from December 31, 2023.

    Capital

    • For the quarter ended March 31, 2024, book value per share increased $0.02, or 0.2%, to $13.18 while tangible book value per share increased $0.02, or 0.2%, to $9.87.
    • At March 31, 2024, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $95.0 million, partially offset by after-tax unrealized gains on derivatives of $31.3 million. After-tax net unrecognized losses on securities held to maturity of $11.4 million were not reflected in total stockholders’ equity.
    • At March 31, 2024, the Company’s tangible equity to tangible assets ratio equaled 8.34% 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 Q3 2024 Investor Presentation, a copy of which is available through the Investor Relations link located at the bottom of the page of our website at www.kearnybank.com and via a Current Report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.

    Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

    Category: Earnings


    Linked-Quarter Comparative Financial Analysis
     
    Kearny Financial Corp.
    Consolidated Balance Sheets
    (Unaudited)
     
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		March 31,
    2024    		December 31,
    2023    		Variance
    or Change    		Variance
    or Change Pct.
    Assets    
    Cash and cash equivalents$71,027 $73,860 $(2,833) -3.8%
    Securities available for sale 1,098,655  1,144,175  (45,520) -4.0%
    Securities held to maturity 139,643  141,959  (2,316) -1.6%
    Loans held-for-sale 4,117  14,030  (9,913) -70.7%
    Loans receivable 5,758,336  5,745,629  12,707  0.2%
    Less: allowance for credit losses on loans (44,930) (44,867) 63  0.1%
    Net loans receivable 5,713,406  5,700,762  12,644  0.2%
    Premises and equipment 45,053  45,928  (875) -1.9%
    Federal Home Loan Bank stock 81,347  83,372  (2,025) -2.4%
    Accrued interest receivable 31,065  30,258  807  2.7%
    Goodwill 210,895  210,895  —  —%
    Core deposit intangible 2,057  2,189  (132) -6.0%
    Bank owned life insurance 296,493  256,064  40,429  15.8%
    Deferred income taxes, net 47,225  46,116  1,109  2.4%
    Other real estate owned —  11,982  (11,982) -100.0%
    Other assets 100,989  136,242  (35,253) -25.9%
    Total assets$7,841,972 $7,897,832 $(55,860) -0.7%
         
    Liabilities    
    Deposits:    
    Non-interest-bearing$586,089 $584,130 $1,959  0.3%
    Interest-bearing 4,622,961  4,735,500  (112,539) -2.4%
    Total deposits 5,209,050  5,319,630  (110,580) -2.1%
    Borrowings 1,722,178  1,667,055  55,123  3.3%
    Advance payments by borrowers for taxes 17,387  16,742  645  3.9%
    Other liabilities 44,279  46,427  (2,148) -4.6%
    Total liabilities 6,992,894  7,049,854  (56,960) -0.8%
         
    Stockholders' Equity    
    Common stock 644  645  (1) -0.2%
    Paid-in capital 493,187  493,297  (110) —%
    Retained earnings 440,308  439,755  553  0.1%
    Unearned ESOP shares (21,402) (21,889) 487  2.2%
    Accumulated other comprehensive loss (63,659) (63,830) 171  0.3%
    Total stockholders' equity 849,078  847,978  1,100  0.1%
    Total liabilities and stockholders' equity$7,841,972 $7,897,832 $(55,860) -0.7%
         
    Consolidated capital ratios    
    Equity to assets 10.83% 10.74% 0.09% 
    Tangible equity to tangible assets(1) 8.34% 8.26% 0.08% 
         
    Share data    
    Outstanding shares 64,437  64,445  (8) —%
    Book value per share$13.18 $13.16 $0.02  0.2%
    Tangible book value per share(2)$9.87 $9.85 $0.02  0.2%

    ___________________

    (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.
    March 31,
    2024    		December 31,
    2023
    Interest income    
    Loans$64,035 $63,384 $651  1.0%
    Taxable investment securities 15,490  16,756  (1,266) -7.6%
    Tax-exempt investment securities 85  84  1  1.2%
    Other interest-earning assets 2,475  2,401  74  3.1%
    Total interest income 82,085  82,625  (540) -0.7%
         
    Interest expense    
    Deposits 32,320  30,340  1,980  6.5%
    Borrowings 15,446  16,446  (1,000) -6.1%
    Total interest expense 47,766  46,786  980  2.1%
    Net interest income 34,319  35,839  (1,520) -4.2%
    Provision for credit losses 349  2,105  (1,756) -83.4%
    Net interest income after provision for credit losses 33,970  33,734  236  0.7%
         
    Non-interest income    
    Fees and service charges 657  624  33  5.3%
    Loss on sale and call of securities —  (18,135) 18,135  100.0%
    (Loss) gain on sale of loans (712) 104  (816) -784.6%
    Loss on other real estate owned —  (974) 974  100.0%
    Income from bank owned life insurance 3,039  1,162  1,877  161.5%
    Electronic banking fees and charges 464  396  68  17.2%
    Other income 755  811  (56) -6.9%
    Total non-interest income 4,203  (16,012) 20,215  126.2%
         
    Non-interest expense    
    Salaries and employee benefits 16,911  17,282  (371) -2.1%
    Net occupancy expense of premises 2,863  2,674  189  7.1%
    Equipment and systems 3,823  3,814  9  0.2%
    Advertising and marketing 387  301  86  28.6%
    Federal deposit insurance premium 1,429  1,495  (66) -4.4%
    Directors' compensation 360  393  (33) -8.4%
    Other expense 3,286  3,808  (522) -13.7%
    Total non-interest expense 29,059  29,767  (708) -2.4%
    Income (loss) before income taxes 9,114  (12,045) 21,159  175.7%
    Income taxes 1,717  1,782  (65) -3.6%
    Net income (loss)$7,397 $(13,827)$21,224  153.5%
         
    Net income (loss) per common share (EPS)    
    Basic$0.12 $(0.22)$0.34  
    Diluted$0.12 $(0.22)$0.34  
         
    Dividends declared    
    Cash dividends declared per common share$0.11 $0.11 $—  
    Cash dividends declared$6,844 $6,882 $(38) 
    Dividend payout ratio 92.5% -49.8% 142.3% 
         
    Weighted average number of common shares outstanding    
    Basic 62,205  62,299  (94) 
    Diluted 62,211  62,367  (156) 



    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)
     
    (Dollars in Thousands)

    		Three Months EndedVariance
    or Change
    		Variance
    or Change Pct.
    March 31,
    2024    		December 31,
    2023
    Assets    
    Interest-earning assets:    
    Loans receivable, including loans held for sale$5,752,477 $5,726,321 $26,156  0.5%
    Taxable investment securities 1,382,064  1,509,165  (127,101) -8.4%
    Tax-exempt investment securities 14,614  15,025  (411) -2.7%
    Other interest-earning assets 125,155  139,740  (14,585) -10.4%
    Total interest-earning assets 7,274,310  7,390,251  (115,941) -1.6%
    Non-interest-earning assets 577,411  554,335  23,076  4.2%
    Total assets$7,851,721 $7,944,586 $(92,865) -1.2%
         
    Liabilities and Stockholders' Equity    
    Interest-bearing liabilities:    
    Deposits:    
    Interest-bearing demand$2,378,831 $2,301,169 $77,662  3.4%
    Savings 635,226  664,926  (29,700) -4.5%
    Certificates of deposit 1,705,513  1,824,316  (118,803) -6.5%
    Total interest-bearing deposits 4,719,570  4,790,411  (70,841) -1.5%
    Borrowings:    
    Federal Home Loan Bank advances 1,428,801  1,513,497  (84,696) -5.6%
    Other borrowings 210,989  142,283  68,706  48.3%
    Total borrowings 1,639,790  1,655,780  (15,990) -1.0%
    Total interest-bearing liabilities 6,359,360  6,446,191  (86,831) -1.3%
    Non-interest-bearing liabilities:    
    Non-interest-bearing deposits 581,870  597,294  (15,424) -2.6%
    Other non-interest-bearing liabilities 65,709  62,387  3,322  5.3%
    Total non-interest-bearing liabilities 647,579  659,681  (12,102) -1.8%
    Total liabilities 7,006,939  7,105,872  (98,933) -1.4%
    Stockholders' equity 844,782  838,714  6,068  0.7%
    Total liabilities and stockholders' equity$7,851,721 $7,944,586 $(92,865) -1.2%
         
    Average interest-earning assets to average interest-bearing liabilities 114.39% 114.65% -0.26% -0.2%



    Kearny Financial Corp.
    Performance Ratio Highlights
    (Unaudited)
     
     Three Months EndedVariance
    or Change
     March 31,
    2024    		December 31,
    2023
    Average yield on interest-earning assets:   
    Loans receivable, including loans held for sale 4.45% 4.43% 0.02%
    Taxable investment securities 4.48% 4.44% 0.04%
    Tax-exempt investment securities(1) 2.32% 2.25% 0.07%
    Other interest-earning assets 7.91% 6.87% 1.04%
    Total interest-earning assets 4.51% 4.47% 0.04%
        
    Average cost of interest-bearing liabilities:   
    Deposits:   
    Interest-bearing demand 3.08% 2.91% 0.17%
    Savings 0.46% 0.44% 0.02%
    Certificates of deposit 3.11% 2.82% 0.29%
    Total interest-bearing deposits 2.74% 2.53% 0.21%
    Borrowings:   
    Federal Home Loan Bank advances 3.55% 3.82% -0.27%
    Other borrowings 5.22% 5.65% -0.43%
    Total borrowings 3.77% 3.97% -0.20%
    Total interest-bearing liabilities 3.00% 2.90% 0.10%
        
    Interest rate spread(2) 1.51% 1.57% -0.06%
    Net interest margin(3) 1.89% 1.94% -0.05%
        
    Non-interest income to average assets (annualized) 0.21% -0.81% 1.02%
    Non-interest expense to average assets (annualized) 1.48% 1.50% -0.02%
        
    Efficiency ratio(4) 75.43% 150.13% -74.70%
        
    Return on average assets (annualized) 0.38% -0.70% 1.08%
    Return on average equity (annualized) 3.50% -6.59% 10.09%
    Return on average tangible equity (annualized)(5) 4.68% -8.84% 13.52%

    ___________________

    (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)    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023
     (Unaudited)(Unaudited)(Unaudited)(Audited)(Unaudited)
    Assets     
    Cash and cash equivalents$71,027 $73,860 $57,219 $70,515 $194,568 
    Securities available for sale 1,098,655  1,144,175  1,215,633  1,227,729  1,267,066 
    Securities held to maturity 139,643  141,959  143,730  146,465  149,764 
    Loans held-for-sale 4,117  14,030  3,934  9,591  5,401 
    Loans receivable 5,758,336  5,745,629  5,736,049  5,829,421  5,966,325 
    Less: allowance for credit losses on loans (44,930) (44,867) (46,872) (48,734) (49,122)
    Net loans receivable 5,713,406  5,700,762  5,689,177  5,780,687  5,917,203 
    Premises and equipment 45,053  45,928  46,868  48,309  49,589 
    Federal Home Loan Bank stock 81,347  83,372  81,509  71,734  76,319 
    Accrued interest receivable 31,065  30,258  29,766  28,133  28,794 
    Goodwill 210,895  210,895  210,895  210,895  210,895 
    Core deposit intangible 2,057  2,189  2,323  2,457  2,590 
    Bank owned life insurance 296,493  256,064  294,491  292,825  291,220 
    Deferred income taxes, net 47,225  46,116  56,500  51,973  53,151 
    Other real estate owned —  11,982  12,956  12,956  13,410 
    Other assets 100,989  136,242  129,865  110,546  89,366 
    Total assets$7,841,972 $7,897,832 $7,974,866 $8,064,815 $8,349,336 
          
    Liabilities     
    Deposits:     
    Non-interest-bearing$586,089 $584,130 $595,141 $609,999 $617,778 
    Interest-bearing 4,622,961  4,735,500  4,839,027  5,019,184  5,185,626 
    Total deposits 5,209,050  5,319,630  5,434,168  5,629,183  5,803,404 
    Borrowings 1,722,178  1,667,055  1,626,933  1,506,812  1,611,692 
    Advance payments by borrowers for taxes 17,387  16,742  16,907  18,338  18,706 
    Other liabilities 44,279  46,427  47,324  41,198  49,304 
    Total liabilities 6,992,894  7,049,854  7,125,332  7,195,531  7,483,106 
          
    Stockholders' Equity     
    Common stock 644  645  652  659  667 
    Paid-in capital 493,187  493,297  497,269  503,332  509,359 
    Retained earnings 440,308  439,755  460,464  457,611  452,605 
    Unearned ESOP shares (21,402) (21,889) (22,375) (22,862) (23,348)
    Accumulated other comprehensive loss (63,659) (63,830) (86,476) (69,456) (73,053)
    Total stockholders' equity 849,078  847,978  849,534  869,284  866,230 
    Total liabilities and stockholders' equity$7,841,972 $7,897,832 $7,974,866 $8,064,815 $8,349,336 
          
    Consolidated capital ratios     
    Equity to assets 10.83% 10.74% 10.65% 10.78% 10.37%
    Tangible equity to tangible assets(1) 8.34% 8.26% 8.20% 8.35% 8.02%
          
    Share data     
    Outstanding shares 64,437  64,445  65,132  65,864  66,680 
    Book value per share$13.18 $13.16 $13.04 $13.20 $12.99 
    Tangible book value per share(2)$9.87 $9.85 $9.77 $9.96 $9.79 

    ___________________

    (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)March 31,
    2024    		December 31,
    2023    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023
    Loan portfolio composition:     
    Commercial loans:     
    Multi-family mortgage$2,645,195 $2,651,274 $2,699,151 $2,761,775 $2,835,852 
    Nonresidential mortgage 965,539  947,287  946,801  968,574  1,002,643 
    Commercial business 147,326  144,134  149,229  146,861  162,038 
    Construction 229,457  221,933  230,703  226,609  215,524 
    Total commercial loans 3,987,517  3,964,628  4,025,884  4,103,819  4,216,057 
    One- to four-family residential mortgage 1,741,644  1,746,065  1,689,051  1,700,559  1,713,343 
    Consumer loans:     
    Home equity loans 42,731  43,517  42,896  43,549  44,376 
    Other consumer 3,198  2,728  2,644  2,549  2,592 
    Total consumer loans 45,929  46,245  45,540  46,098  46,968 
    Total loans, excluding yield adjustments 5,775,090  5,756,938  5,760,475  5,850,476  5,976,368 
    Unaccreted yield adjustments (16,754) (11,309) (24,426) (21,055) (10,043)
    Loans receivable, net of yield adjustments 5,758,336  5,745,629  5,736,049  5,829,421  5,966,325 
    Less: allowance for credit losses on loans (44,930) (44,867) (46,872) (48,734) (49,122)
    Net loans receivable$5,713,406 $5,700,762 $5,689,177 $5,780,687 $5,917,203 
          
    Asset quality:     
    Nonperforming assets:     
    Accruing loans - 90 days and over past due$— $— $— $— $— 
    Nonaccrual loans 39,546  28,089  37,912  42,627  44,026 
    Total nonperforming loans 39,546  28,089  37,912  42,627  44,026 
    Nonaccrual loans held-for-sale —  9,700  —  —  — 
    Other real estate owned —  11,982  12,956  12,956  13,410 
    Total nonperforming assets$39,546 $49,771 $50,868 $55,583 $57,436 
          
    Nonperforming loans (% total loans) 0.69% 0.49% 0.66% 0.73% 0.74%
    Nonperforming assets (% total assets) 0.50% 0.63% 0.64% 0.69% 0.69%
          
    Classified loans$115,772 $94,676 $98,616 $93,526 $103,461 
          
    Allowance for credit losses on loans (ACL):     
    ACL to total loans 0.78% 0.78% 0.81% 0.83% 0.82%
    ACL to nonperforming loans 113.61% 159.73% 123.63% 114.33% 111.57%
    Net charge-offs$286 $4,110 $2,107 $82 $206 
    Average net charge-off rate (annualized) 0.02% 0.29% 0.15% 0.01% 0.01%



    Kearny Financial Corp.
    Supplemental Balance Sheet Highlights
    (Unaudited)
     
    (Dollars in Thousands)March 31,
    2024    		December 31,
    2023    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023
    Funding composition:     
    Deposits:     
    Non-interest-bearing deposits$586,089 $584,130 $595,141 $609,999 $617,778 
    Interest-bearing demand 2,349,032  2,347,262  2,236,573  2,252,912  2,285,799 
    Savings 630,456  646,182  689,163  748,721  811,483 
    Certificates of deposit (retail) 1,235,261  1,283,676  1,300,382  1,377,028  1,327,343 
    Certificates of deposit (brokered and listing service) 408,212  458,380  612,909  640,523  761,001 
    Interest-bearing deposits 4,622,961  4,735,500  4,839,027  5,019,184  5,185,626 
    Total deposits 5,209,050  5,319,630  5,434,168  5,629,183  5,803,404 
          
    Borrowings:     
    Federal Home Loan Bank advances 1,357,178  1,432,055  1,456,933  1,281,812  1,156,692 
    Other borrowings 365,000  235,000  170,000  225,000  455,000 
    Total borrowings 1,722,178  1,667,055  1,626,933  1,506,812  1,611,692 
          
    Total funding$6,931,228 $6,986,685 $7,061,101 $7,135,995 $7,415,096 
          
    Loans as a % of deposits 109.8% 107.4% 104.8% 102.9% 102.1%
    Deposits as a % of total funding 75.2% 76.1% 77.0% 78.9% 78.3%
    Borrowings as a % of total funding 24.8% 23.9% 23.0% 21.1% 21.7%
          
    Uninsured deposits:     
    Uninsured deposits (reported)(1)$1,760,740 $1,813,122 $1,734,288 $1,771,416 $1,678,051 
    Uninsured deposits (adjusted)(2)$718,026 $694,510 $683,265 $710,377 $705,727 

    ___________________

    (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)    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023
    Interest income     
    Loans$64,035 $63,384 $62,769 $62,044 $60,172 
    Taxable investment securities 15,490  16,756  16,265  15,736  15,459 
    Tax-exempt investment securities 85  84  87  91  99 
    Other interest-earning assets 2,475  2,401  2,047  1,821  1,441 
    Total interest income 82,085  82,625  81,168  79,692  77,171 
          
    Interest expense     
    Deposits 32,320  30,340  27,567  26,226  22,246 
    Borrowings 15,446  16,446  14,441  13,286  12,554 
    Total interest expense 47,766  46,786  42,008  39,512  34,800 
    Net interest income 34,319  35,839  39,160  40,180  42,371 
    Provision for (reversal of) credit losses 349  2,105  245  (306) 451 
    Net interest income after provision for (reversal of) credit losses 33,970  33,734  38,915  40,486  41,920 
          
    Non-interest income     
    Fees and service charges 657  624  748  699  910 
    Loss on sale and call of securities —  (18,135) —  —  — 
    Gain (loss) on sale of loans (712) 104  215  199  (2,373)
    Loss on sale of other real estate owned —  (974) —  (139) — 
    Income from bank owned life insurance 3,039  1,162  1,666  1,605  1,581 
    Electronic banking fees and charges 464  396  367  399  457 
    Other income 755  811  1,014  903  1,071 
    Total non-interest income 4,203  (16,012) 4,010  3,666  1,646 
          
    Non-interest expense     
    Salaries and employee benefits 16,911  17,282  17,761  17,315  18,005 
    Net occupancy expense of premises 2,863  2,674  2,758  2,862  3,097 
    Equipment and systems 3,823  3,814  3,801  3,511  3,537 
    Advertising and marketing 387  301  228  231  413 
    Federal deposit insurance premium 1,429  1,495  1,524  1,455  1,546 
    Directors' compensation 360  393  393  345  340 
    Other expense 3,286  3,808  3,309  3,042  3,414 
    Total non-interest expense 29,059  29,767  29,774  28,761  30,352 
    Income (loss) before income taxes 9,114  (12,045) 13,151  15,391  13,214 
    Income taxes 1,717  1,782  3,309  3,378  2,902 
    Net income (loss)$7,397 $(13,827)$9,842 $12,013 $10,312 
          
    Net income (loss) per common share (EPS)     
    Basic$0.12 $(0.22)$0.16 $0.19 $0.16 
    Diluted$0.12 $(0.22)$0.16 $0.19 $0.16 
          
    Dividends declared     
    Cash dividends declared per common share$0.11 $0.11 $0.11 $0.11 $0.11 
    Cash dividends declared$6,844 $6,882 $6,989 $7,007 $7,196 
    Dividend payout ratio 92.5% -49.8% 71.0% 58.3% 69.8%
          
    Weighted average number of common shares outstanding     
    Basic 62,205  62,299  63,014  63,667  64,769 
    Diluted 62,211  62,367  63,061  63,667  64,783 



    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)
     
     Three Months Ended
    (Dollars in Thousands)March 31,
    2024    		December 31,
    2023    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023
    Assets     
    Interest-earning assets:     
    Loans receivable, including loans held-for-sale$5,752,477 $5,726,321 $5,788,074 $5,932,541 $5,986,669 
    Taxable investment securities 1,382,064  1,509,165  1,516,393  1,529,582  1,558,222 
    Tax-exempt investment securities 14,614  15,025  15,483  16,346  17,663 
    Other interest-earning assets 125,155  139,740  130,829  128,158  131,682 
    Total interest-earning assets 7,274,310  7,390,251  7,450,779  7,606,627  7,694,236 
    Non-interest-earning assets 577,411  554,335  568,723  556,962  575,009 
    Total assets$7,851,721 $7,944,586 $8,019,502 $8,163,589 $8,269,245 
          
    Liabilities and Stockholders' Equity     
    Interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand$2,378,831 $2,301,169 $2,245,831 $2,321,120 $2,363,762 
    Savings 635,226  664,926  719,508  774,854  858,673 
    Certificates of deposit 1,705,513  1,824,316  1,968,512  2,057,818  2,069,396 
    Total interest-bearing deposits 4,719,570  4,790,411  4,933,851  5,153,792  5,291,831 
    Borrowings:     
    Federal Home Loan Bank advances 1,428,801  1,513,497  1,386,473  1,374,316  1,402,269 
    Other borrowings 210,989  142,283  158,098  100,055  1,611 
    Total borrowings 1,639,790  1,655,780  1,544,571  1,474,371  1,403,880 
    Total interest-bearing liabilities 6,359,360  6,446,191  6,478,422  6,628,163  6,695,711 
    Non-interest-bearing liabilities:     
    Non-interest-bearing deposits 581,870  597,294  612,251  608,765  634,324 
    Other non-interest-bearing liabilities 65,709  62,387  66,701  64,970  60,327 
    Total non-interest-bearing liabilities 647,579  659,681  678,952  673,735  694,651 
    Total liabilities 7,006,939  7,105,872  7,157,374  7,301,898  7,390,362 
    Stockholders' equity 844,782  838,714  862,128  861,691  878,883 
    Total liabilities and stockholders' equity$7,851,721 $7,944,586 $8,019,502 $8,163,589 $8,269,245 
          
    Average interest-earning assets to average
    interest-bearing liabilities    		 114.39% 114.65% 115.01% 114.76% 114.91%



    Kearny Financial Corp.
    Performance Ratio Highlights
     
     Three Months Ended
     March 31,
    2024    		December 31,
    2023    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023
    Average yield on interest-earning assets:     
    Loans receivable, including loans held-for-sale 4.45% 4.43% 4.34% 4.18% 4.02%
    Taxable investment securities 4.48% 4.44% 4.29% 4.12% 3.97%
    Tax-exempt investment securities(1) 2.32% 2.25% 2.25% 2.23% 2.23%
    Other interest-earning assets 7.91% 6.87% 6.26% 5.68% 4.38%
    Total interest-earning assets 4.51% 4.47% 4.36% 4.19% 4.01%
          
    Average cost of interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand 3.08% 2.91% 2.58% 2.38% 2.01%
    Savings 0.46% 0.44% 0.47% 0.48% 0.41%
    Certificates of deposit 3.11% 2.82% 2.49% 2.24% 1.84%
    Total interest-bearing deposits 2.74% 2.53% 2.23% 2.04% 1.68%
    Borrowings:     
    Federal Home Loan Bank advances 3.55% 3.82% 3.54% 3.51% 3.58%
    Other borrowings 5.22% 5.65% 5.46% 4.89% 5.15%
    Total borrowings 3.77% 3.97% 3.74% 3.60% 3.58%
    Total interest-bearing liabilities 3.00% 2.90% 2.59% 2.38% 2.08%
          
    Interest rate spread(2) 1.51% 1.57% 1.77% 1.81% 1.93%
    Net interest margin(3) 1.89% 1.94% 2.10% 2.11% 2.20%
          
    Non-interest income to average assets (annualized) 0.21% -0.81% 0.20% 0.18% 0.08%
    Non-interest expense to average assets (annualized) 1.48% 1.50% 1.49% 1.41% 1.47%
          
    Efficiency ratio(4) 75.43% 150.13% 68.97% 65.60% 68.96%
          
    Return on average assets (annualized) 0.38% -0.70% 0.49% 0.59% 0.50%
    Return on average equity (annualized) 3.50% -6.59% 4.57% 5.58% 4.69%
    Return on average tangible equity (annualized)(5) 4.68% -8.84% 6.07% 7.41% 6.20%

    ___________________

    (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)    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023
    Adjusted net income:     
    Net income (loss) (GAAP)$7,397 $(13,827)$9,842 $12,013 $10,312 
    Non-recurring transactions - net of tax:     
    Branch consolidation expenses —  —  —  —  568 
    Net effect of sale and call of securities —  12,876  —  —  — 
    Net effect of bank-owned life insurance restructure —  6,286  —  —  — 
    Adjusted net income$7,397 $5,335 $9,842 $12,013 $10,880 
          
    Calculation of pre-tax, pre-provision net revenue:     
    Net income (loss) (GAAP)$7,397 $(13,827)$9,842 $12,013 $10,312 
    Adjustments to net income (GAAP):     
    Provision for income taxes 1,717  1,782  3,309  3,378  2,902 
    Provision for (reversal of) credit losses 349  2,105  245  (306) 451 
    Pre-tax, pre-provision net revenue (non-GAAP)$9,463 $(9,940)$13,396 $15,085 $13,665 
          
    Adjusted earnings per share:     
    Weighted average common shares - basic 62,205  62,299  63,014  63,667  64,769 
    Weighted average common shares - diluted 62,211  62,367  63,061  63,667  64,783 
          
    Earnings per share - basic (GAAP)$0.12 $(0.22)$0.16 $0.19 $0.16 
    Earnings per share - diluted (GAAP)$0.12 $(0.22)$0.16 $0.19 $0.16 
          
    Adjusted earnings per share - basic (non-GAAP)$0.12 $0.09 $0.16 $0.19 $0.17 
    Adjusted earnings per share - diluted (non-GAAP)$0.12 $0.09 $0.16 $0.19 $0.17 
          
    Pre-tax, pre-provision net revenue per share:     
    Pre-tax, pre-provision net revenue per share - basic
    (non-GAAP)    		$0.15 $(0.16)$0.21 $0.24 $0.21 
    Pre-tax, pre-provision net revenue per share - diluted
    (non-GAAP)    		$0.15 $(0.16)$0.21 $0.24 $0.21 
          
    Adjusted return on average assets:     
    Total average assets$7,851,721 $7,944,586 $8,019,502 $8,163,589 $8,269,245 
          
    Return on average assets (GAAP) 0.38% -0.70% 0.49% 0.59% 0.50%
    Adjusted return on average assets (non-GAAP) 0.38% 0.27% 0.49% 0.59% 0.53%
          
    Adjusted return on average equity:     
    Total average equity$844,782 $838,714 $862,128 $861,691 $878,883 
          
    Return on average equity (GAAP) 3.50% -6.59% 4.57% 5.58% 4.69%
    Adjusted return on average equity (non-GAAP) 3.50% 2.54% 4.57% 5.58% 4.95%



    Kearny Financial Corp.
    Reconciliation of GAAP to Non-GAAP
    (Unaudited)
     
     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		March 31,
    2024    		December 31,
    2023    		September 30,
    2023    		June 30,
    2023    		March 31,
    2023
    Adjusted return on average tangible equity:     
    Total average equity$844,782 $838,714 $862,128 $861,691 $878,883 
    Less: average goodwill (210,895) (210,895) (210,895) (210,895) (210,895)
    Less: average other intangible assets (2,138) (2,277) (2,411) (2,544) (2,683)
    Total average tangible equity$631,749 $625,542 $648,822 $648,252 $665,305 
          
    Return on average tangible equity (non-GAAP) 4.68% -8.84% 6.07% 7.41% 6.20%
    Adjusted return on average tangible equity (non-GAAP) 4.68% 3.41% 6.07% 7.41% 6.54%
          
    Adjusted non-interest expense ratio:     
    Non-interest expense (GAAP)$29,059 $29,767 $29,774 $28,761 $30,352 
    Non-recurring transactions:     
    Branch consolidation expenses —  —  —  —  (800)
    Non-interest expense (non-GAAP)$29,059 $29,767 $29,774 $28,761 $29,552 
          
    Non-interest expense ratio (GAAP) 1.48% 1.50% 1.49% 1.41% 1.47%
    Adjusted non-interest expense ratio (non-GAAP) 1.48% 1.50% 1.49% 1.41% 1.43%
          
    Adjusted efficiency ratio:     
    Non-interest expense (non-GAAP)$29,059 $29,767 $29,774 $28,761 $29,552 
          
    Net interest income (GAAP)$34,319 $35,839 $39,160 $40,180 $42,371 
    Total non-interest income (GAAP) 4,203  (16,012) 4,010  3,666  1,646 
    Non-recurring transactions:     
    Net effect of sale and call of securities —  18,135  —  —  — 
    Net effect of bank-owned life insurance restructure —  573  —  —  — 
    Total revenue (non-GAAP)$38,522 $38,535 $43,170 $43,846 $44,017 
          
    Efficiency ratio (GAAP) 75.43% 150.13% 68.97% 65.60% 68.96%
    Adjusted efficiency ratio (non-GAAP) 75.43% 77.25% 68.97% 65.60% 67.14%
                    

    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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