• Kearny Financial Corp. Announces Third Quarter Fiscal 2023 Results and Declaration of Cash Dividend

    来源: Nasdaq GlobeNewswire / 27 4月 2023 08:30:02   America/New_York

    FAIRFIELD, N.J., April 27, 2023 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported net income for the quarter ended March 31, 2023 of $10.3 million, or $0.16 per diluted share, compared to $2.0 million, or $0.03 per diluted share, for the quarter ended December 31, 2022. Net income for the quarters ended March 31, 2023 and December 31, 2022 was impacted by various non-recurring items, as described in further detail below.

    The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on May 24, 2023 to stockholders of record as of May 10, 2023.

    Craig L. Montanaro, President and Chief Executive Officer, commented, “While my comments in recent quarters have featured the terms ‘risk’ and ‘uncertainty’, the past few weeks have brought fresh challenges to the banking sector, and the economy at large. Despite the sudden failure of two large regional banks, the voluntary wind-down of a third and pressure on the industry as a whole, I am pleased to report that Kearny remains on solid footing. Our highly-diversified deposit base, conservative risk culture and abundance of available liquidity allows us to navigate these uncertain times, as we have throughout our 139 years in operation.”

    Mr. Montanaro further noted, “Looking to this quarter’s earnings, the rate of our net interest margin compression has begun to slow, while our previously announced operating efficiency initiative has gotten off to a strong start. Non-interest expense, excluding non-recurring items, declined 7.3% quarter-over-quarter and will be further supported by the June 2023 consolidation of two branch locations.”

    Liquidity & Funding

    • Deposits decreased $168.0 million, or 2.8%, to $5.80 billion at March 31, 2023, from $5.97 billion at December 31, 2022. Details regarding the change in deposit balances are presented in the table below. The decrease in deposits was largely concentrated in three products: consumer savings, commercial non-interest checking and government deposits. The decline in consumer savings reflected the continuation of a multi-quarter trend resulting from the migration of low-rate savings balances into higher-rate money market and time deposit products. The reduction in non-interest checking deposits was a combination of outflow and the migration of non-interest bearing commercial deposits into interest-bearing products. The decrease in government deposits was largely attributable to seasonal outflows resulting from expected tax and pension payments.
    (Dollars in Thousands) March 31,
    2023    		 December 31,
    2022    		 Variance
    or Change    		 Variance
    or Change Pct.
    Government deposits $607,925 $677,923 $(69,998) (10.3)%
    Excluding government deposits:        
    Non-interest-bearing  615,696  649,044  (33,348) (5.1)%
    Interest-bearing demand  1,699,407  1,663,302  36,105  2.2%
    Savings  795,310  881,837  (86,527) (9.8)%
    Certificates of deposit  2,085,066  2,099,265  (14,199) (0.7)%
    Total deposits $5,803,404 $5,971,371 $(167,967) (2.8)%
    • The aggregate amount of uninsured deposits was $1.68 billion at March 31, 2023. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, the aggregate amount of uninsured deposits was $705.7 million, or 12.2% of total deposits.
    • Borrowings increased $228.1 million to $1.61 billion, or 19.3% of total assets, at March 31, 2023, from $1.38 billion, or 16.7% of total assets, at December 31, 2022. At March 31, 2023, borrowings were comprised of $1.54 billion of advances from the Federal Home Loan Bank of New York and $70.0 million from unsecured fed funds lines of credit. There were no borrowings outstanding from the Federal Reserve Bank at, or during the quarter ended, March 31, 2023.
    • At March 31, 2023, the Company maintained available secured borrowing capacity of $2.37 billion, of which $1.88 billion was immediately accessible via in-place collateral and $493.2 million represented the market value of unpledged securities.

    Assets

    • Total assets increased $60.0 million, or 0.7%, to $8.35 billion at March 31, 2023, from $8.29 billion at December 31, 2022.
    • Cash and cash equivalents increased $118.9 million, or 157.2%, to $194.6 million at March 31, 2023, from $75.7 million at December 31, 2022. The increase was driven by the Company’s decision to hold excess cash on its balance sheet due to external market conditions.
    • Loans receivable decreased $17.8 million, or 0.3%, to $5.97 billion at March 31, 2023, from $5.98 billion at December 31, 2022.
    • Investment securities decreased $23.3 million to $1.42 billion, or 17.0% of total assets, at March 31, 2023, from $1.44 billion, or 17.4% of total assets, at December 31, 2022. The decrease was driven by paydowns, partially offset by a $9.7 million improvement in unrealized losses on securities available for sale during the quarter ended March 31, 2023.

    Earnings

    Performance Highlights

    • Return on average assets was 0.50% for the quarter ended March 31, 2023 compared to 0.10% for the quarter ended December 31, 2022.
    • Return on average equity was 4.69% and 0.90% for the quarters ended March 31, 2023 and December 31, 2022, respectively. Return on average tangible equity was 6.20% and 1.20% for those same comparative periods.

    Net Interest Income and Net Interest Margin

    • Net interest margin contracted 18 basis points to 2.20% for the quarter ended March 31, 2023, from 2.38% for the quarter ended December 31, 2022. Excluding purchase accounting accretion and loan prepayment penalty income, net interest margin contracted 11 basis points.
    • Net interest income decreased $2.4 million to $42.4 million for the quarter ended March 31, 2023, from $44.8 million for the quarter ended December 31, 2022. Included in net interest income for the quarters ended March 31, 2023 and December 31, 2022, respectively, was purchase accounting accretion of $711,000 and $1.9 million, and loan prepayment penalty income of $103,000 and $166,000.

    Non-Interest Income

    • Non-interest income increased $10.1 million to income of $1.6 million for the quarter ended March 31, 2023, from a loss of $8.5 million for the quarter ended December 31, 2022. The increase was primarily attributable to a loss of $15.2 million on the sale of securities during the prior comparative period.
    • Loss on sale of loans was $2.4 million for the quarter ended March 31, 2023 compared to a gain on sale of loans of $134,000 for the quarter ended December 31, 2022. The loss in the current period was the result of the sale of a non-performing multi-family mortgage loan held-for-sale located in Queens, NY. The loan was acquired in 2018 and had been classified as held-for-sale since June 30, 2022.
    • Other income decreased $2.7 million to $1.1 million for the quarter ended March 31, 2023, primarily due to a non-recurring gain of $2.9 million attributable to the sale of a former branch location recognized during the prior comparative period.

    Non-Interest Expense

    • Non-interest expense decreased $2.3 million to $30.4 million for the quarter ended March 31, 2023, from $32.7 million for the quarter ended December 31, 2022. Excluding $800,000 of branch consolidation expense, of which $250,000 was recorded in occupancy expense and $550,000 was recorded in other expense, non-interest expense for the quarter ended March 31, 2023 was $29.6 million.
    • Salaries and benefits expense decreased $1.9 million to $18.0 million for the quarter ended March 31, 2023. This decrease was driven by lower salary expense as a result of reduced headcount and a decrease in incentive payments tied to loan origination volume.
    • The efficiency and non-interest expense ratios were 68.96% and 1.47%, respectively, for the quarter ended March 31, 2023, as compared to 89.93% and 1.62%, respectively, for the quarter ended December 31, 2022.

    Income Taxes

    • Income tax expense totaled $2.9 million for the quarter ended March 31, 2023 compared to $33,000 for the quarter ended December 31, 2022, resulting in an effective tax rate of 22.0% and 1.7%, respectively. The effective tax rate, for the prior comparative period, was impacted by the loss on the sale of securities.

    Asset Quality

    • The balance of non-performing assets decreased $5.2 million to $57.4 million, or 0.69% of total assets, at March 31, 2023, from $62.6 million, or 0.76% of total assets, at December 31, 2022. The decrease in non-performing assets was primarily attributable to the sale of a non-performing multi-family mortgage loan held-for-sale, as previously noted.
    • Net charge-offs totaled $206,000, or 0.01% of average loans, on an annualized basis, for the quarter ended March 31, 2023, compared to $407,000, or 0.03% of average loans, on an annualized basis, for the quarter ended December 31, 2022.
    • For the quarter ended March 31, 2023, the Company recorded a provision for credit losses of $451,000, compared to $1.7 million for the quarter ended December 31, 2022. The provision for the quarter ended March 31, 2023 was largely driven by a slower prepayment rate assumption, partially offset by a net reduction in reserves on loans individually analyzed for impairment.
    • The allowance for credit losses was $49.1 million, or 0.82% of total loans, at March 31, 2023, compared to $48.9 million, or 0.81% of total loans, at December 31, 2022.

    Capital

    • For the quarter ended March 31, 2023, book value per share increased $0.04, or 0.3%, to $12.99 and tangible book value per share increased $0.01, or 0.1%, to $9.79.
    • During the quarter ended March 31, 2023, the Company repurchased 698,286 shares of common stock at a cost of $6.6 million, or $9.50 per share.
    • At March 31, 2023, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $100.4 million, partially offset by after-tax unrealized gains on derivatives of $27.5 million. Pre-tax net unrecognized losses on securities held to maturity of $13.6 million were not reflected in total stockholders’ equity.
    • At March 31, 2023, the Company’s tangible equity to tangible assets ratio equaled 8.02% 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 Fiscal 2023 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,
    2023    		December 31,
    2022    		Variance
    or Change    		Variance
    or Change Pct.
    Assets    
    Cash and cash equivalents$194,568 $75,660 $118,908 157.2%
    Securities available for sale 1,267,066  1,286,354  (19,288)-1.5%
    Securities held to maturity 149,764  153,786  (4,022)-2.6%
    Loans held-for-sale 5,401  12,940  (7,539)-58.3%
    Loans receivable 5,966,325  5,984,133  (17,808)-0.3%
    Less: allowance for credit losses on loans (49,122) (48,877) 245 0.5%
    Net loans receivable 5,917,203  5,935,256  (18,053)-0.3%
    Premises and equipment 49,589  50,953  (1,364)-2.7%
    Federal Home Loan Bank stock 76,319  69,022  7,297 10.6%
    Accrued interest receivable 28,794  27,368  1,426 5.2%
    Goodwill 210,895  210,895  — —%
    Core deposit intangible 2,590  2,732  (142)-5.2%
    Bank owned life insurance 291,220  289,673  1,547 0.5%
    Deferred income taxes, net 53,151  51,107  2,044 4.0%
    Other real estate owned 13,410  13,410  — —%
    Other assets 89,366  110,162  (20,796)-18.9%
    Total assets$8,349,336 $8,289,318 $60,018 0.7%
         
    Liabilities    
    Deposits:    
    Non-interest-bearing$617,778 $650,950 $(33,172)-5.1%
    Interest-bearing 5,185,626  5,320,421  (134,795)-2.5%
    Total deposits 5,803,404  5,971,371  (167,967)-2.8%
    Borrowings 1,611,692  1,383,573  228,119 16.5%
    Advance payments by borrowers for taxes 18,706  17,307  1,399 8.1%
    Other liabilities 49,304  44,427  4,877 11.0%
    Total liabilities 7,483,106  7,416,678  66,428 0.9%
         
    Stockholders' Equity    
    Common stock 667  674  (7)-1.0%
    Paid-in capital 509,359  515,332  (5,973)-1.2%
    Retained earnings 452,605  449,489  3,116 0.7%
    Unearned ESOP shares (23,348) (23,834) 486 2.0%
    Accumulated other comprehensive loss (73,053) (69,021) (4,032)-5.8%
    Total stockholders' equity 866,230  872,640  (6,410)-0.7%
    Total liabilities and stockholders' equity$8,349,336 $8,289,318 $60,018 0.7%
         
    Consolidated capital ratios    
    Equity to assets 10.37% 10.53% -0.16% 
    Tangible equity to tangible assets (1) 8.02% 8.16% -0.14% 
         
    Share data    
    Outstanding shares 66,680  67,388  (708)-1.1%
    Book value per share$12.99 $12.95 $0.04 0.3%
    Tangible book value per share (2)$9.79 $9.78 $0.01 0.1%

    _________________________

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


     
    Kearny Financial Corp.
    Consolidated Statements of Income
    (Unaudited)
     
    (Dollars and Shares in Thousands,
    Except Per Share Data)
    		Three Months EndedVariance
    or Change
    		Variance
    or Change Pct.
    March 31,
    2023    		December 31,
    2022
    Interest income    
    Loans$60,172 $57,996 $2,176 3.8%
    Taxable investment securities 15,459  13,221  2,238 16.9%
    Tax-exempt investment securities 99  219  (120)-54.8%
    Other interest-earning assets 1,441  1,005  436 43.4%
    Total interest income 77,171  72,441  4,730 6.5%
         
    Interest expense    
    Deposits 22,246  18,822  3,424 18.2%
    Borrowings 12,554  8,836  3,718 42.1%
    Total interest expense 34,800  27,658  7,142 25.8%
    Net interest income 42,371  44,783  (2,412)-5.4%
    Provision for credit losses 451  1,671  (1,220)-73.0%
    Net interest income after provision for credit losses 41,920  43,112  (1,192)-2.8%
         
    Non-interest income    
    Fees and service charges 910  734  176 24.0%
    Loss on sale and call of securities —  (15,227) 15,227 100.0%
    (Loss) gain on sale of loans (2,373) 134  (2,507)-1870.9%
    Income from bank owned life insurance 1,581  1,761  (180)-10.2%
    Electronic banking fees and charges 457  397  60 15.1%
    Other income 1,071  3,723  (2,652)-71.2%
    Total non-interest income 1,646  (8,478) 10,124 -119.4%
         
    Non-interest expense    
    Salaries and employee benefits 18,005  19,921  (1,916)-9.6%
    Net occupancy expense of premises 3,097  2,987  110 3.7%
    Equipment and systems 3,537  3,867  (330)-8.5%
    Advertising and marketing 413  731  (318)-43.5%
    Federal deposit insurance premium 1,546  1,226  320 26.1%
    Directors' compensation 340  339  1 0.3%
    Other expense 3,414  3,579  (165)-4.6%
    Total non-interest expense 30,352  32,650  (2,298)-7.0%
    Income before income taxes 13,214  1,984  11,230 566.0%
    Income taxes 2,902  33  2,869 8693.9%
    Net income$10,312 $1,951 $8,361 428.5%
         
    Net income per common share (EPS)    
    Basic$0.16 $0.03 $0.13  
    Diluted$0.16 $0.03 $0.13  
         
    Dividends declared    
    Cash dividends declared per common share$0.11 $0.11 $—  
    Cash dividends declared$7,196 $7,172 $24  
    Dividend payout ratio 69.8% 367.6%(297.8)% 
         
    Weighted average number of common shares outstanding    
    Basic 64,769  65,030  (261) 
    Diluted 64,783  65,038  (255) 


     
    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)
     
    (Dollars in Thousands)
    		Three Months EndedVariance
    or Change
    		Variance
    or Change Pct.
    March 31,
    2023    		December 31,
    2022
    Assets    
    Interest-earning assets:    
    Loans receivable, including loans held for sale$5,986,669 $5,839,903 $146,766 2.5%
    Taxable investment securities 1,558,222  1,527,578  30,644 2.0%
    Tax-exempt investment securities 17,663  37,917  (20,254)-53.4%
    Other interest-earning assets 131,682  114,175  17,507 15.3%
    Total interest-earning assets 7,694,236  7,519,573  174,663 2.3%
    Non-interest-earning assets 575,009  550,519  24,490 4.4%
    Total assets$8,269,245 $8,070,092 $199,153 2.5%
         
    Liabilities and Stockholders' Equity    
    Interest-bearing liabilities:    
    Deposits:    
    Interest-bearing demand$2,363,762 $2,359,977 $3,785 0.2%
    Savings 858,673  931,584  (72,911)-7.8%
    Certificates of deposit 2,069,396  2,192,722  (123,326)-5.6%
    Total interest-bearing deposits 5,291,831  5,484,283  (192,452)-3.5%
    Borrowings:    
    Federal Home Loan Bank advances 1,402,269  997,148  405,121 40.6%
    Other borrowings 1,611  —  1,611 —%
    Total borrowings 1,403,880  997,148  406,732 40.8%
    Total interest-bearing liabilities 6,695,711  6,481,431  214,280 3.3%
    Non-interest-bearing liabilities:    
    Non-interest-bearing deposits 634,324  666,846  (32,522)-4.9%
    Other non-interest-bearing liabilities 60,327  56,721  3,606 6.4%
    Total non-interest-bearing liabilities 694,651  723,567  (28,916)-4.0%
    Total liabilities 7,390,362  7,204,998  185,364 2.6%
    Stockholders' equity 878,883  865,094  13,789 1.6%
    Total liabilities and stockholders' equity$8,269,245 $8,070,092 $199,153 2.5%
         
    Average interest-earning assets to average interest-bearing liabilities 114.91% 116.02% -1.11%-1.0%


     
    Kearny Financial Corp.
    Performance Ratio Highlights
    (Unaudited)
     
     Three Months EndedVariance
    or Change
     March 31,
    2023    		December 31,
    2022
    Average yield on interest-earning assets:   
    Loans receivable, including loans held for sale4.02%3.97%0.05%
    Taxable investment securities3.97%3.46%0.51%
    Tax-exempt investment securities (1)2.23%2.32%-0.09%
    Other interest-earning assets4.38%3.52%0.86%
    Total interest-earning assets4.01%3.85%0.16%
        
    Average cost of interest-bearing liabilities:   
    Deposits:   
    Interest-bearing demand2.01%1.63%0.38%
    Savings0.41%0.41%—%
    Certificates of deposit1.84%1.50%0.34%
    Total interest-bearing deposits1.68%1.37%0.31%
    Borrowings:   
    Federal Home Loan Bank advances3.58%3.54%0.04%
    Other borrowings5.15%—%5.15%
    Total borrowings3.58%3.54%0.04%
    Total interest-bearing liabilities2.08%1.71%0.37%
        
    Interest rate spread (2)1.93%2.14%-0.21%
    Net interest margin (3)2.20%2.38%-0.18%
        
    Non-interest income to average assets (annualized)0.08%-0.42%0.50%
    Non-interest expense to average assets (annualized)1.47%1.62%-0.15%
        
    Efficiency ratio (4)68.96%89.93%-20.97%
        
    Return on average assets (annualized)0.50%0.10%0.40%
    Return on average equity (annualized)4.69%0.90%3.79%
    Return on average tangible equity (annualized) (5)6.20%1.20%5.00%

    _________________________

    (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,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022    		March 31,
    2022
     (Unaudited)(Unaudited)(Unaudited)(Audited)(Unaudited)
    Assets     
    Cash and cash equivalents$194,568 $75,660 $96,076 $101,615 $62,379 
    Securities available for sale 1,267,066  1,286,354  1,263,176  1,344,093  1,526,086 
    Securities held to maturity 149,764  153,786  115,943  118,291  121,853 
    Loans held-for-sale 5,401  12,940  12,936  28,874  2,822 
    Loans receivable 5,966,325  5,984,133  5,656,370  5,417,845  5,003,201 
    Less: allowance for credit losses on loans (49,122) (48,877) (47,613) (47,058) (43,860)
    Net loans receivable 5,917,203  5,935,256  5,608,757  5,370,787  4,959,341 
    Premises and equipment 49,589  50,953  52,642  53,281  53,727 
    Federal Home Loan Bank stock 76,319  69,022  44,957  47,144  30,997 
    Accrued interest receivable 28,794  27,368  23,817  20,466  19,517 
    Goodwill 210,895  210,895  210,895  210,895  210,895 
    Core deposit intangible 2,590  2,732  2,876  3,020  3,166 
    Bank owned life insurance 291,220  289,673  289,690  289,177  287,644 
    Deferred income taxes, net 53,151  51,107  54,278  49,350  34,349 
    Other real estate owned 13,410  13,410  178  178  401 
    Other assets 89,366  110,162  113,369  82,712  76,714 
    Total assets$8,349,336 $8,289,318 $7,889,590 $7,719,883 $7,389,891 
          
    Liabilities     
    Deposits:     
    Non-interest-bearing$617,778 $650,950 $683,406 $653,899 $621,954 
    Interest-bearing 5,185,626  5,320,421  5,424,872  5,208,357  4,906,708 
    Total deposits 5,803,404  5,971,371  6,108,278  5,862,256  5,528,662 
    Borrowings 1,611,692  1,383,573  851,454  901,337  851,220 
    Advance payments by borrowers for taxes 18,706  17,307  16,555  16,746  16,979 
    Other liabilities 49,304  44,427  38,329  45,544  37,861 
    Total liabilities 7,483,106  7,416,678  7,014,616  6,825,883  6,434,722 
          
    Stockholders' Equity     
    Common stock 667  674  680  687  714 
    Paid-in capital 509,359  515,332  520,245  528,396  561,176 
    Retained earnings 452,605  449,489  454,710  445,451  441,522 
    Unearned ESOP shares (23,348) (23,834) (24,321) (24,807) (25,294)
    Accumulated other comprehensive loss (73,053) (69,021) (76,340) (55,727) (22,949)
    Total stockholders' equity 866,230  872,640  874,974  894,000  955,169 
    Total liabilities and stockholders' equity$8,349,336 $8,289,318 $7,889,590 $7,719,883 $7,389,891 
          
    Consolidated capital ratios     
    Equity to assets 10.37% 10.53% 11.09% 11.58% 12.93%
    Tangible equity to tangible assets (1) 8.02% 8.16% 8.61% 9.06% 10.33%
          
    Share data     
    Outstanding shares 66,680  67,388  67,938  68,666  71,424 
    Book value per share$12.99 $12.95 $12.88 $13.02 $13.37 
    Tangible book value per share (2)$9.79 $9.78 $9.73 $9.90 $10.38 

    _________________________

    (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,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022    		March 31,
    2022
    Loan portfolio composition:     
    Commercial loans:     
    Multi-family mortgage$2,835,852 $2,851,721 $2,570,297 $2,409,090 $2,076,003 
    Nonresidential mortgage 1,002,643  1,017,341  1,040,688  1,019,838  1,085,988 
    Commercial business 162,038  177,530  186,361  176,807  169,551 
    Construction 215,524  186,663  166,052  140,131  121,137 
    Total commercial loans 4,216,057  4,233,255  3,963,398  3,745,866  3,452,679 
    One- to four-family residential mortgage 1,713,343  1,719,514  1,666,730  1,645,816  1,527,980 
    Consumer loans:     
    Home equity loans 44,376  45,690  43,269  42,028  41,501 
    Other consumer 2,592  2,648  2,869  2,866  2,755 
    Total consumer loans 46,968  48,338  46,138  44,894  44,256 
    Total loans, excluding yield adjustments 5,976,368  6,001,107  5,676,266  5,436,576  5,024,915 
    Unaccreted yield adjustments (10,043) (16,974) (19,896) (18,731) (21,714)
    Loans receivable, net of yield adjustments 5,966,325  5,984,133  5,656,370  5,417,845  5,003,201 
    Less: allowance for credit losses on loans (49,122) (48,877) (47,613) (47,058) (43,860)
    Net loans receivable$5,917,203 $5,935,256 $5,608,757 $5,370,787 $4,959,341 
          
    Asset quality:     
    Nonperforming assets:     
    Accruing loans - 90 days and over past due$— $— $— $— $— 
    Nonaccrual loans 44,026  40,549  68,574  70,321  80,595 
    Total nonperforming loans 44,026  40,549  68,574  70,321  80,595 
    Nonaccrual loans held-for-sale —  8,650  8,650  21,745  — 
    Other real estate owned 13,410  13,410  178  178  401 
    Total nonperforming assets$57,436 $62,609 $77,402 $92,244 $80,996 
          
    Nonperforming loans (% total loans) 0.74% 0.68% 1.21% 1.30% 1.61%
    Nonperforming assets (% total assets) 0.69% 0.76% 0.98% 1.19% 1.10%
          
    Classified loans$103,461 $86,069 $92,610 $94,555 $163,621 
          
    Allowance for credit losses on loans (ACL):     
    ACL to total loans 0.82% 0.81% 0.84% 0.87% 0.87%
    ACL to nonperforming loans 111.57% 120.54% 69.43% 66.92% 54.42%
    Net charge-offs$206 $407 $115 $1,024 $436 
    Average net charge-off rate (annualized) 0.01% 0.03% 0.01% 0.08% 0.04%


     
    Kearny Financial Corp.
    Supplemental Balance Sheet Highlights
    (Unaudited)
     
    (Dollars in Thousands)March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022    		March 31,
    2022
    Funding composition:     
    Deposits:     
    Non-interest-bearing deposits$617,778 $650,950 $683,406 $653,899 $621,954 
    Interest-bearing demand 2,285,799  2,316,485  2,382,411  2,265,597  2,154,488 
    Savings 811,483  901,514  982,916  1,053,198  1,088,974 
    Certificates of deposit (retail) 1,327,343  1,354,907  1,263,124  1,116,035  1,122,228 
    Certificates of deposit (brokered and listing service) 761,001  747,515  796,421  773,527  541,018 
    Interest-bearing deposits 5,185,626  5,320,421  5,424,872  5,208,357  4,906,708 
    Total deposits 5,803,404  5,971,371  6,108,278  5,862,256  5,528,662 
          
    Borrowings:     
    Federal Home Loan Bank advances 1,156,692  1,256,573  796,454  651,337  541,220 
    Overnight borrowings 455,000  127,000  55,000  250,000  310,000 
    Total borrowings 1,611,692  1,383,573  851,454  901,337  851,220 
          
    Total funding$7,415,096 $7,354,944 $6,959,732 $6,763,593 $6,379,882 
          
    Loans as a % of deposits 102.1% 99.6% 92.0% 92.1% 89.8%
    Deposits as a % of total funding 78.3% 81.2% 87.8% 86.7% 86.7%
    Borrowings as a % of total funding 21.7% 18.8% 12.2% 13.3% 13.3%
          
    Uninsured deposits:     
    Uninsured deposits (reported) (1)$1,678,051 $1,815,854 $1,771,851 $1,525,940 $1,427,658 
    Uninsured deposits (adjusted) (2)$705,727 $794,407 $883,351 $792,067 $749,141 

    _________________________

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

     

     
    Kearny Financial Corp.
    Consolidated Statements of Income
    (Unaudited)
     
     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022    		March 31,
    2022
    Interest income     
    Loans$60,172 $57,996 $52,935 $48,869 $45,846 
    Taxable investment securities 15,459  13,221  10,439  8,915  8,024 
    Tax-exempt investment securities 99  219  285  297  316 
    Other interest-earning assets 1,441  1,005  761  472  415 
    Total interest income 77,171  72,441  64,420  58,553  54,601 
          
    Interest expense     
    Deposits 22,246  18,822  10,869  3,915  3,565 
    Borrowings 12,554  8,836  5,020  4,039  3,309 
    Total interest expense 34,800  27,658  15,889  7,954  6,874 
    Net interest income 42,371  44,783  48,531  50,599  47,727 
    Provision for (reversal of) credit losses 451  1,671  670  4,222  (3,920)
    Net interest income after provision for (reversal of) credit losses 41,920  43,112  47,861  46,377  51,647 
          
    Non-interest income     
    Fees and service charges 910  734  763  658  617 
    (Loss) gain on sale and call of securities —  (15,227) —  (563) 3 
    (Loss) gain on sale of loans (2,373) 134  395  187  376 
    (Loss) gain on sale of other real estate owned —  —  —  (9) 14 
    Income from bank owned life insurance 1,581  1,761  3,698  1,533  1,511 
    Electronic banking fees and charges 457  397  506  366  432 
    Other income 1,071  3,723  555  638  238 
    Total non-interest income 1,646  (8,478) 5,917  2,810  3,191 
          
    Non-interest expense     
    Salaries and employee benefits 18,005  19,921  20,348  20,367  19,184 
    Net occupancy expense of premises 3,097  2,987  3,090  3,188  3,223 
    Equipment and systems 3,537  3,867  3,662  4,516  3,822 
    Advertising and marketing 413  731  747  703  516 
    Federal deposit insurance premium 1,546  1,226  906  762  480 
    Directors' compensation 340  339  340  340  340 
    Other expense 3,414  3,579  2,895  3,736  3,058 
    Total non-interest expense 30,352  32,650  31,988  33,612  30,623 
    Income before income taxes 13,214  1,984  21,790  15,575  24,215 
    Income taxes 2,902  33  5,255  4,205  6,522 
    Net income$10,312 $1,951 $16,535 $11,370 $17,693 
          
    Net income per common share (EPS)     
    Basic$0.16 $0.03 $0.25 $0.17 $0.25 
    Diluted$0.16 $0.03 $0.25 $0.17 $0.25 
          
    Dividends declared     
    Cash dividends declared per common share$0.11 $0.11 $0.11 $0.11 $0.11 
    Cash dividends declared$7,196 $7,172 $7,276 $7,441 $7,720 
    Dividend payout ratio 69.8% 367.6% 44.0% 65.4% 43.6%
          
    Weighted average number of common shares outstanding     
    Basic 64,769  65,030  65,737  67,240  69,790 
    Diluted 64,783  65,038  65,756  67,276  69,817 


     
    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)
     
     Three Months Ended
    (Dollars in Thousands)March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022    		March 31,
    2022
    Assets     
    Interest-earning assets:     
    Loans receivable, including loans held-for-sale$5,986,669 $5,839,903 $5,553,996 $5,181,983 $4,850,236 
    Taxable investment securities 1,558,222  1,527,578  1,516,974  1,608,372  1,620,996 
    Tax-exempt investment securities 17,663  37,917  48,973  51,672  55,390 
    Other interest-earning assets 131,682  114,175  88,038  87,990  79,644 
    Total interest-earning assets 7,694,236  7,519,573  7,207,981  6,930,017  6,606,266 
    Non-interest-earning assets 575,009  550,519  570,225  564,734  601,684 
    Total assets$8,269,245 $8,070,092 $7,778,206 $7,494,751 $7,207,950 
          
    Liabilities and Stockholders' Equity     
    Interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand$2,363,762 $2,359,977 $2,354,340 $2,155,946 $2,133,977 
    Savings 858,673  931,584  1,019,343  1,077,631  1,088,351 
    Certificates of deposit 2,069,396  2,192,722  2,014,922  1,701,725  1,650,048 
    Total interest-bearing deposits 5,291,831  5,484,283  5,388,605  4,935,302  4,872,376 
    Borrowings:     
    Federal Home Loan Bank advances 1,402,269  997,148  642,399  752,579  632,811 
    Other borrowings 1,611  —  127,456  185,901  51,667 
    Total borrowings 1,403,880  997,148  769,855  938,480  684,478 
    Total interest-bearing liabilities 6,695,711  6,481,431  6,158,460  5,873,782  5,556,854 
    Non-interest-bearing liabilities:     
    Non-interest-bearing deposits 634,324  666,846  667,624  640,200  624,152 
    Other non-interest-bearing liabilities 60,327  56,721  56,431  56,636  49,455 
    Total non-interest-bearing liabilities 694,651  723,567  724,055  696,836  673,607 
    Total liabilities 7,390,362  7,204,998  6,882,515  6,570,618  6,230,461 
    Stockholders' equity 878,883  865,094  895,691  924,133  977,489 
    Total liabilities and stockholders' equity$8,269,245 $8,070,092 $7,778,206 $7,494,751 $7,207,950 
          
    Average interest-earning assets to average
    interest-bearing liabilities    		 114.91% 116.02% 117.04% 117.98% 118.89%


      
    Kearny Financial Corp.
    Performance Ratio Highlights
      
     Three Months Ended
     March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022    		March 31,
    2022
    Average yield on interest-earning assets:     
    Loans receivable, including loans held-for-sale4.02%3.97%3.81%3.77%3.78%
    Taxable investment securities3.97%3.46%2.75%2.22%1.98%
    Tax-exempt investment securities (1)2.23%2.32%2.33%2.30%2.28%
    Other interest-earning assets4.38%3.52%3.46%2.15%2.08%
    Total interest-earning assets4.01%3.85%3.57%3.38%3.31%
          
    Average cost of interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand2.01%1.63%0.92%0.31%0.22%
    Savings0.41%0.41%0.23%0.11%0.10%
    Certificates of deposit1.84%1.50%0.97%0.46%0.52%
    Total interest-bearing deposits1.68%1.37%0.81%0.32%0.29%
    Borrowings:     
    Federal Home Loan Bank advances3.58%3.54%2.68%1.96%2.08%
    Other borrowings5.15%—%2.26%0.77%0.17%
    Total borrowings3.58%3.54%2.61%1.72%1.93%
    Total interest-bearing liabilities2.08%1.71%1.03%0.54%0.49%
          
    Interest rate spread (2)1.93%2.14%2.54%2.84%2.82%
    Net interest margin (3)2.20%2.38%2.69%2.92%2.89%
          
    Non-interest income to average assets (annualized)0.08%-0.42%0.30%0.15%0.18%
    Non-interest expense to average assets (annualized)1.47%1.62%1.65%1.79%1.70%
          
    Efficiency ratio (4)68.96%89.93%58.75%62.93%60.14%
          
    Return on average assets (annualized)0.50%0.10%0.85%0.61%0.98%
    Return on average equity (annualized)4.69%0.90%7.38%4.92%7.24%
    Return on average tangible equity (annualized) (5)6.20%1.20%9.70%6.40%9.27%

    _________________________

    (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,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022    		March 31,
    2022
    Adjusted net income:     
    Net income (GAAP)$10,312 $1,951 $16,535 $11,370 $17,693 
    Non-recurring transactions - net of tax:     
    Branch consolidation expenses 568  —  —  —  — 
    Net effect of sale and call of securities —  10,811  —  400  (2)
    Net effect of sale of other assets —  (2,081) —  —  — 
    Severance expense from workforce realignment —  538  —  —  — 
    Early contract termination —  —  —  568  — 
    Adjusted net income$10,880 $11,219 $16,535 $12,338 $17,691 
          
    Calculation of pre-tax, pre-provision net revenue:     
    Net income (GAAP)$10,312 $1,951 $16,535 $11,370 $17,693 
    Adjustments to net income (GAAP):     
    Provision for income taxes 2,902  33  5,255  4,205  6,522 
    Provision for (reversal of) credit losses 451  1,671  670  4,222  (3,920)
    Pre-tax, pre-provision net revenue (non-GAAP)$13,665 $3,655 $22,460 $19,797 $20,295 
          
    Adjusted earnings per share:     
    Weighted average common shares - basic 64,769  65,030  65,737  67,240  69,790 
    Weighted average common shares - diluted 64,783  65,038  65,756  67,276  69,817 
          
    Earnings per share - basic (GAAP)$0.16 $0.03 $0.25 $0.17 $0.25 
    Earnings per share - diluted (GAAP)$0.16 $0.03 $0.25 $0.17 $0.25 
          
    Adjusted earnings per share - basic (non-GAAP)$0.17 $0.17 $0.25 $0.18 $0.25 
    Adjusted earnings per share - diluted (non-GAAP)$0.17 $0.17 $0.25 $0.18 $0.25 
          
    Pre-tax, pre-provision net revenue per share:     
    Pre-tax, pre-provision net revenue per share - basic (non-GAAP)$0.21 $0.06 $0.34 $0.29 $0.29 
    Pre-tax, pre-provision net revenue per share - diluted (non-GAAP)$0.21 $0.06 $0.34 $0.29 $0.29 
          
    Adjusted return on average assets:     
    Total average assets$8,269,245 $8,070,092 $7,778,206 $7,494,751 $7,207,950 
          
    Return on average assets (GAAP) 0.50% 0.10% 0.85% 0.61% 0.98%
    Adjusted return on average assets (non-GAAP) 0.53% 0.56% 0.85% 0.66% 0.98%
          
    Adjusted return on average equity:     
    Total average equity$878,883 $865,094 $895,691 $924,133 $977,489 
          
    Return on average equity (GAAP) 4.69% 0.90% 7.38% 4.92% 7.24%
    Adjusted return on average equity (non-GAAP) 4.95% 5.19% 7.38% 5.34% 7.24%


     
    Kearny Financial Corp.
    Reconciliation of GAAP to Non-GAAP
    (Unaudited)
     
     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022    		March 31,
    2022
    Adjusted return on average tangible equity:     
    Total average equity$878,883 $865,094 $895,691 $924,133 $977,489 
    Less: average goodwill (210,895) (210,895) (210,895) (210,895) (210,895)
    Less: average other intangible assets (2,683) (2,826) (2,971) (3,116) (3,282)
    Total average tangible equity$665,305 $651,373 $681,825 $710,122 $763,312 
          
    Return on average tangible equity (non-GAAP) 6.20% 1.20% 9.70% 6.40% 9.27%
    Adjusted return on average tangible equity (non-GAAP) 6.54% 6.89% 9.70% 6.95% 9.27%
          
    Adjusted non-interest expense ratio:     
    Non-interest expense (GAAP)$30,352 $32,650 $31,988 $33,612 $30,623 
    Non-recurring transactions:     
    Branch consolidation expenses (800) —  —  —  — 
    Severance expense from workforce realignment —  (757) —  —  — 
    Early contract termination —  —  —  (800) — 
    Non-interest expense (non-GAAP)$29,552 $31,893 $31,988 $32,812 $30,623 
          
    Non-interest expense ratio (GAAP) 1.47% 1.62% 1.65% 1.79% 1.70%
    Adjusted non-interest expense ratio (non-GAAP) 1.43% 1.58% 1.65% 1.75% 1.70%
          
    Adjusted efficiency ratio:     
    Non-interest expense (non-GAAP)$29,552 $31,893 $31,988 $32,812 $30,623 
          
    Net interest income (GAAP)$42,371 $44,783 $48,531 $50,599 $47,727 
    Total non-interest income (GAAP) 1,646  (8,478) 5,917  2,810  3,191 
    Non-recurring transactions:     
    Net effect of sale and call of securities —  15,227  —  563  (3)
    Net effect of sale of other assets —  (2,931) —  —  — 
    Total revenue (non-GAAP)$44,017 $48,601 $54,448 $53,972 $50,915 
          
    Efficiency ratio (GAAP) 68.96% 89.93% 58.75% 62.93% 60.14%
    Adjusted efficiency ratio (non-GAAP) 67.14% 65.62% 58.75% 60.79% 60.15%

    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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