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, 2023 of $12.0 million, or $0.19
per diluted share, compared to $10.3 million, or $0.16 per diluted
share, for the quarter ended March 31, 2023.
For the fiscal year ended June 30, 2023,
the Company reported net income of $40.8 million, or $0.63 per
diluted share, compared to $67.5 million, or $0.95 per diluted
share, for the fiscal year ended June 30, 2022. Net income for
the years ended June 30, 2023 and June 30, 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 August 23, 2023 to stockholders of record as of
August 9, 2023.
Craig L. Montanaro, President and Chief
Executive Officer, commented, “The current operating environment
for community banks remains challenging. An inverted yield curve,
intense competition for deposits and slowing demand for loans all
present near-term earnings headwinds for our industry. Despite
these challenges I am pleased to report our success on several
fronts.”
Mr. Montanaro continued, “As expected, the rate
of our net interest margin compression slowed, declining nine basis
points quarter-over-quarter. Our operating efficiency initiative
continues to gain traction, with adjusted non-interest expense down
2.7% from the prior quarter and 9.8% from our December 2022
non-interest expense run rate. We improved our capital position,
increasing tangible common equity by 33 basis points from the prior
quarter, while continuing to reduce outstanding shares via our
repurchase program. Finally, our loan charge-off rate remains
industry-leading, with full fiscal year 2023 net charge-offs of
$810,000, or 0.01% of average loans.”
Mr. Montanaro concluded, “While it remains to be
seen how long this current environment persists, our balance sheet
and risk profile position us well for long-term success. In the
meantime, we remain committed to serving our clients and our
communities, while continuing to build franchise and shareholder
value.”
Balance Sheet
- Total assets were
$8.06 billion at June 30, 2023, a decrease of $284.5 million,
or 3.4%, from March 31, 2023 and an increase of $344.9
million, or 4.5%, from June 30, 2022.
- Cash and cash
equivalents totaled $70.5 million at June 30, 2023, a decrease
of $124.1 million, or 63.8%, from March 31, 2023 and a
decrease of $31.1 million, or 30.6%, from June 30, 2022.
- Investment
securities totaled $1.37 billion at June 30, 2023, a decrease
of $42.6 million, or 3.0%, from March 31, 2023 and a decrease
of $88.2 million, or 6.0%, from June 30, 2022.
- Loans receivable
totaled $5.83 billion at June 30, 2023, a decrease of $136.9
million, or 2.3%, from March 31, 2023 and an increase of
$411.6 million, or 7.6%, from June 30, 2022. The decrease for
the quarter and the increase for the year were largely driven by
multi-family and nonresidential mortgage loans.
- Deposits were $5.63
billion at June 30, 2023, a decrease of $174.2 million, or
3.0%, from March 31, 2023 and a decrease of $233.1 million, or
4.0%, from June 30, 2022. Excluding brokered certificates of
deposit (“CDs”), deposits decreased $53.7 million, or 1.1%, from
March 31, 2023 and $100.1 million, or 2.0%, from June 30,
2022. Excluding brokered CDs, the decrease for both the quarter and
the year were largely driven by a decline in savings deposits,
partially offset by growth in retail CDs.
- The aggregate
amount of uninsured deposits was $1.77 billion at June 30,
2023. Excluding collateralized deposits of state and local
governments, and deposits of the Bank’s wholly-owned subsidiary and
holding company, the aggregate amount of uninsured deposits was
$710.4 million, or 12.6% of total deposits.
- Borrowings were
$1.51 billion at June 30, 2023, a decrease of $104.9 million,
or 6.5%, from March 31, 2023 and an increase of $605.5
million, or 67.2%, from June 30, 2022. At June 30, 2023,
borrowings comprised $1.41 billion of advances from the Federal
Home Loan Bank of New York and $100.0 million from unsecured fed
funds lines of credit.
- At June 30,
2023, the Company maintained available secured borrowing capacity
of $2.44 billion, of which $1.96 billion was immediately accessible
via in-place collateral and $477.0 million represented the market
value of unpledged securities.
Earnings
Performance Highlights
- Return on average
assets was 0.59% and 0.50% for the quarters ended June 30,
2023 and March 31, 2023, respectively, and 0.51% and 0.93% for
the years ended June 30, 2023 and 2022, respectively.
- Return on average
equity was 5.58% and 4.69% for the quarters ended June 30,
2023 and March 31, 2023, respectively, and 4.66% and 6.86% for
the years ended June 30, 2023 and 2022, respectively.
- Return on average
tangible equity was 7.41% and 6.20% for the quarters ended
June 30, 2023 and March 31, 2023, respectively, and 6.17%
and 8.77% for the years ended June 30, 2023 and 2022,
respectively.
Net Interest Income and Net Interest
Margin
- Net interest margin
contracted nine basis points to 2.11% for the quarter ended
June 30, 2023 and 60 basis points to 2.34% for the year ended
June 30, 2023. The decrease for the quarter was due largely to
an increase in the cost of interest-bearing deposits, partially
offset by an increase in the yield on interest-earning assets. The
decrease for the year was due largely to increases in the cost and
average balance of interest-earning liabilities, partially offset
by increases in yield on and average balance of interest-earning
assets.
- For the quarter
ended June 30, 2023, net interest income decreased $2.2
million to $40.2 million from $42.4 million for the quarter ended
March 31, 2023. Included in net interest income for the
quarters ended June 30, 2023 and March 31, 2023,
respectively, was purchase accounting accretion of $887,000 and
$711,000, and loan prepayment penalty income of $185,000 and
$103,000.
- For the year ended
June 30, 2023, net interest income decreased $20.7 million to
$175.9 million from $196.6 million for the year ended June 30,
2022. Included in net interest income for the years ended
June 30, 2023 and 2022, respectively, was purchase accounting
accretion of $5.3 million and $9.0 million, and loan prepayment
penalty income of $895,000 and $5.4 million.
Non-Interest Income
- For the quarter
ended June 30, 2023, non-interest income increased $2.0
million to $3.7 million. The increase was primarily attributable to
a loss on sale of loans of $2.4 million during the quarter ended
March 31, 2023.
- For the year ended
June 30, 2023, non-interest income decreased $11.2 million to
$2.8 million. The decrease was primarily attributable to a loss of
$15.2 million on the sale of securities during the current year,
partially offset by a non-recurring gain of $2.9 million
attributable to the sale of a former branch location.
Non-Interest Expense
- For the quarter
ended June 30, 2023, non-interest expense decreased $1.6
million, or 5.2%, to $28.8 million from $30.4 million for the
quarter ended March 31, 2023. The decrease was primarily
attributable to branch consolidation expense recorded in the
comparative period and a decrease in salaries and benefits
expense.
- For the year ended
June 30, 2022, non-interest expense decreased $2.0 million to
$123.8 million from $125.7 million for the year ended June 30,
2022. The decrease was primarily attributable to decreases in
occupancy, equipment and systems, directors’ compensation and
salaries and benefits expenses, partially offset by an increase in
federal deposit insurance premiums.
- For the year ended
June 30, 2023, the Company recorded $800,000 of branch
consolidation expense, of which $250,000 was recorded in occupancy
expense and $550,000 was recorded in other expense, and $757,000 of
severance expense from a workforce realignment. For the year ended
June 30, 2022, the Company recorded $1.9 million of branch
consolidation expense and impairment charges, of which $1.5 million
was recorded in occupancy expense and $420,000 was recorded in
other expense, and $800,000 of expense from the early termination
of a contract with a service provider.
- The efficiency and
non-interest expense ratios were 65.60% and 1.41%, respectively,
for the quarter ended June 30, 2023, as compared to 68.96% and
1.47%, respectively, for the quarter ended March 31, 2023. The
efficiency and non-interest expense ratios were 69.28% and 1.53%,
respectively, for the year ended June 30, 2023, as compared to
59.71% and 1.73%, respectively, for the year ended June 30,
2022.
Income Taxes
- Income tax expense
totaled $3.4 million for the quarter ended June 30, 2023
compared to $2.9 million for the quarter ended March 31, 2023,
resulting in an effective tax rate of 21.9% and 22.0%,
respectively. Income tax expense totaled $11.6 million for the year
ended June 30, 2023 compared to $24.8 million for the year
ended June 30, 2022, resulting in an effective tax rate of
22.1% and 26.9%, respectively.
Asset Quality
- The balance of
non-performing assets decreased $1.9 million to $55.6 million, or
0.69% of total assets, at June 30, 2023, from $57.4 million,
or 0.69% of total assets, at March 31, 2023. The balance of
non-performing assets was $92.2 million, or 1.19% of total assets,
at June 30, 2022.
- Net charge-offs
totaled $82,000, or 0.01% of average loans, on an annualized basis,
for the quarter ended June 30, 2023, compared to $206,000, or
0.01% of average loans, on an annualized basis, for the quarter
ended March 31, 2023. For the year ended June 30, 2023,
net charge-offs totaled $810,000, or 0.01% of average loans,
compared to $3.6 million, or 0.07% of average loans, for the year
ended June 30, 2022.
- For the quarter
ended June 30, 2023, the Company recorded a reversal of credit
losses of $306,000, compared to a provision for credit losses of
$451,000 for the quarter ended March 31, 2023. The reversal
for the quarter ended June 30, 2023 was largely driven by a
decrease in the balance of loans receivable, partially offset by a
net increase in reserves on loans individually analyzed for
impairment. For the years ended June 30, 2023 and 2022, the
Company recorded a provision for credit losses of $2.5 million and
a reversal of credit losses of $7.5 million, respectively.
- The allowance for
credit losses was $48.7 million, or 0.83% of total loans, at
June 30, 2023, compared to $49.1 million, or 0.82% of total
loans, at March 31, 2023 and $47.1 million, or 0.87% of total
loans, at June 30, 2022.
Capital
- For the quarter
ended June 30, 2023, book value per share increased $0.21, or
1.6%, to $13.20 while tangible book value per share increased
$0.17, or 1.7%, to $9.96. For the year ended June 30, 2023,
book value per share increased $0.18, or 1.4%, to $13.20 while
tangible book value per share increased $0.06, or 0.6%, to
$9.96.
- During the quarter
and year ended June 30, 2023, the Company repurchased 812,506
and 2,820,398 shares of common stock at a cost of $6.4 million and
$27.4 million, or $7.83 and $9.73 per share, respectively.
- At June 30,
2023, total stockholders’ equity included after-tax net unrealized
losses on securities available for sale of $111.1 million,
partially offset by after-tax unrealized gains on derivatives of
$41.5 million. After-tax net unrecognized losses on securities held
to maturity of $10.9 million were not reflected in total
stockholders’ equity.
- At June 30,
2023, the Company’s tangible equity to tangible assets ratio
equaled 8.35% 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 Q4 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.
For further information contact:Craig L.
Montanaro, President and Chief Executive Officer, orKeith
Suchodolski, Senior Executive Vice President and Chief Financial
OfficerKearny Financial Corp.(973) 244-4500
Category: Earnings
Linked-Quarter Comparative Financial Analysis |
Kearny Financial
Corp.Consolidated Balance
Sheets(Unaudited)
(Dollars and Shares in
Thousands,Except Per Share Data) |
June 30,2023 |
March 31,2023 |
Variance or Change |
Variance or Change Pct. |
Assets |
|
|
|
|
Cash and cash equivalents |
$ |
70,515 |
|
$ |
194,568 |
|
$ |
(124,053 |
) |
-63.8 |
% |
Securities available for
sale |
|
1,227,729 |
|
|
1,267,066 |
|
|
(39,337 |
) |
-3.1 |
% |
Securities held to
maturity |
|
146,465 |
|
|
149,764 |
|
|
(3,299 |
) |
-2.2 |
% |
Loans held-for-sale |
|
9,591 |
|
|
5,401 |
|
|
4,190 |
|
77.6 |
% |
Loans receivable |
|
5,829,421 |
|
|
5,966,325 |
|
|
(136,904 |
) |
-2.3 |
% |
Less: allowance for credit losses on loans |
|
(48,734 |
) |
|
(49,122 |
) |
|
(388 |
) |
-0.8 |
% |
Net loans receivable |
|
5,780,687 |
|
|
5,917,203 |
|
|
(136,516 |
) |
-2.3 |
% |
Premises and equipment |
|
48,309 |
|
|
49,589 |
|
|
(1,280 |
) |
-2.6 |
% |
Federal Home Loan Bank
stock |
|
71,734 |
|
|
76,319 |
|
|
(4,585 |
) |
-6.0 |
% |
Accrued interest
receivable |
|
28,133 |
|
|
28,794 |
|
|
(661 |
) |
-2.3 |
% |
Goodwill |
|
210,895 |
|
|
210,895 |
|
|
— |
|
— |
% |
Core deposit intangible |
|
2,457 |
|
|
2,590 |
|
|
(133 |
) |
-5.1 |
% |
Bank owned life insurance |
|
292,825 |
|
|
291,220 |
|
|
1,605 |
|
0.6 |
% |
Deferred income taxes,
net |
|
51,973 |
|
|
53,151 |
|
|
(1,178 |
) |
-2.2 |
% |
Other real estate owned |
|
12,956 |
|
|
13,410 |
|
|
(454 |
) |
-3.4 |
% |
Other assets |
|
110,546 |
|
|
89,366 |
|
|
21,180 |
|
23.7 |
% |
Total assets |
$ |
8,064,815 |
|
$ |
8,349,336 |
|
$ |
(284,521 |
) |
-3.4 |
% |
|
|
|
|
|
Liabilities |
|
|
|
|
Deposits: |
|
|
|
|
Non-interest-bearing |
$ |
609,999 |
|
$ |
617,778 |
|
$ |
(7,779 |
) |
-1.3 |
% |
Interest-bearing |
|
5,019,184 |
|
|
5,185,626 |
|
|
(166,442 |
) |
-3.2 |
% |
Total deposits |
|
5,629,183 |
|
|
5,803,404 |
|
|
(174,221 |
) |
-3.0 |
% |
Borrowings |
|
1,506,812 |
|
|
1,611,692 |
|
|
(104,880 |
) |
-6.5 |
% |
Advance payments by borrowers
for taxes |
|
18,338 |
|
|
18,706 |
|
|
(368 |
) |
-2.0 |
% |
Other liabilities |
|
41,198 |
|
|
49,304 |
|
|
(8,106 |
) |
-16.4 |
% |
Total liabilities |
|
7,195,531 |
|
|
7,483,106 |
|
|
(287,575 |
) |
-3.8 |
% |
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
Common stock |
|
659 |
|
|
667 |
|
|
(8 |
) |
-1.2 |
% |
Paid-in capital |
|
503,332 |
|
|
509,359 |
|
|
(6,027 |
) |
-1.2 |
% |
Retained earnings |
|
457,611 |
|
|
452,605 |
|
|
5,006 |
|
1.1 |
% |
Unearned ESOP shares |
|
(22,862 |
) |
|
(23,348 |
) |
|
486 |
|
2.1 |
% |
Accumulated other
comprehensive loss |
|
(69,456 |
) |
|
(73,053 |
) |
|
3,597 |
|
4.9 |
% |
Total stockholders' equity |
|
869,284 |
|
|
866,230 |
|
|
3,054 |
|
0.4 |
% |
Total liabilities and stockholders' equity |
$ |
8,064,815 |
|
$ |
8,349,336 |
|
$ |
(284,521 |
) |
-3.4 |
% |
|
|
|
|
|
Consolidated capital
ratios |
|
|
|
|
Equity to assets |
|
10.78 |
% |
|
10.37 |
% |
|
0.41 |
% |
|
Tangible equity to tangible assets(1) |
|
8.35 |
% |
|
8.02 |
% |
|
0.33 |
% |
|
|
|
|
|
|
Share
data |
|
|
|
|
Outstanding shares |
|
65,864 |
|
|
66,680 |
|
|
(816 |
) |
-1.2 |
% |
Book value per share |
$ |
13.20 |
|
$ |
12.99 |
|
$ |
0.21 |
|
1.6 |
% |
Tangible book value per share(2) |
$ |
9.96 |
|
$ |
9.79 |
|
$ |
0.17 |
|
1.7 |
% |
_________________________
(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 Ended |
Variance or Change |
Variance or Change Pct. |
June 30,2023 |
March 31,2023 |
Interest income |
|
|
|
|
Loans |
$ |
62,044 |
|
$ |
60,172 |
|
$ |
1,872 |
|
3.1 |
% |
Taxable investment securities |
|
15,736 |
|
|
15,459 |
|
|
277 |
|
1.8 |
% |
Tax-exempt investment securities |
|
91 |
|
|
99 |
|
|
(8 |
) |
-8.1 |
% |
Other interest-earning assets |
|
1,821 |
|
|
1,441 |
|
|
380 |
|
26.4 |
% |
Total interest income |
|
79,692 |
|
|
77,171 |
|
|
2,521 |
|
3.3 |
% |
|
|
|
|
|
Interest
expense |
|
|
|
|
Deposits |
|
26,226 |
|
|
22,246 |
|
|
3,980 |
|
17.9 |
% |
Borrowings |
|
13,286 |
|
|
12,554 |
|
|
732 |
|
5.8 |
% |
Total interest expense |
|
39,512 |
|
|
34,800 |
|
|
4,712 |
|
13.5 |
% |
Net interest income |
|
40,180 |
|
|
42,371 |
|
|
(2,191 |
) |
-5.2 |
% |
(Reversal of) provision for
credit losses |
|
(306 |
) |
|
451 |
|
|
(757 |
) |
-167.8 |
% |
Net interest income after (reversal of) provision for
credit losses |
|
40,486 |
|
|
41,920 |
|
|
(1,434 |
) |
-3.4 |
% |
|
|
|
|
|
Non-interest
income |
|
|
|
|
Fees and service charges |
|
699 |
|
|
910 |
|
|
(211 |
) |
-23.2 |
% |
Gain (loss) on sale of loans |
|
199 |
|
|
(2,373 |
) |
|
2,572 |
|
-108.4 |
% |
Loss on sale of other real estate owned |
|
(139 |
) |
|
— |
|
|
(139 |
) |
— |
% |
Income from bank owned life insurance |
|
1,605 |
|
|
1,581 |
|
|
24 |
|
1.5 |
% |
Electronic banking fees and charges |
|
399 |
|
|
457 |
|
|
(58 |
) |
-12.7 |
% |
Other income |
|
903 |
|
|
1,071 |
|
|
(168 |
) |
-15.7 |
% |
Total non-interest income |
|
3,666 |
|
|
1,646 |
|
|
2,020 |
|
122.7 |
% |
|
|
|
|
|
Non-interest
expense |
|
|
|
|
Salaries and employee benefits |
|
17,315 |
|
|
18,005 |
|
|
(690 |
) |
-3.8 |
% |
Net occupancy expense of premises |
|
2,862 |
|
|
3,097 |
|
|
(235 |
) |
-7.6 |
% |
Equipment and systems |
|
3,511 |
|
|
3,537 |
|
|
(26 |
) |
-0.7 |
% |
Advertising and marketing |
|
231 |
|
|
413 |
|
|
(182 |
) |
-44.1 |
% |
Federal deposit insurance premium |
|
1,455 |
|
|
1,546 |
|
|
(91 |
) |
-5.9 |
% |
Directors' compensation |
|
345 |
|
|
340 |
|
|
5 |
|
1.5 |
% |
Other expense |
|
3,042 |
|
|
3,414 |
|
|
(372 |
) |
-10.9 |
% |
Total non-interest expense |
|
28,761 |
|
|
30,352 |
|
|
(1,591 |
) |
-5.2 |
% |
Income before income taxes |
|
15,391 |
|
|
13,214 |
|
|
2,177 |
|
16.5 |
% |
Income taxes |
|
3,378 |
|
|
2,902 |
|
|
476 |
|
16.4 |
% |
Net income |
$ |
12,013 |
|
$ |
10,312 |
|
$ |
1,701 |
|
16.5 |
% |
|
|
|
|
|
Net income per common
share (EPS) |
|
|
|
|
Basic |
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
|
Diluted |
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
|
|
|
|
|
|
Dividends
declared |
|
|
|
|
Cash dividends declared per common share |
$ |
0.11 |
|
$ |
0.11 |
|
$ |
— |
|
|
Cash dividends declared |
$ |
7,007 |
|
$ |
7,196 |
|
$ |
(189 |
) |
|
Dividend payout ratio |
|
58.3 |
% |
|
69.8 |
% |
(11.5) % |
|
|
|
|
|
|
Weighted average
number of common shares outstanding |
|
|
|
|
Basic |
|
63,667 |
|
|
64,769 |
|
|
(1,102 |
) |
|
Diluted |
|
63,667 |
|
|
64,783 |
|
|
(1,116 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Average Balance Sheet
Data(Unaudited)
(Dollars in Thousands) |
Three Months Ended |
Variance or Change |
Variance or Change Pct. |
June 30,2023 |
March 31,2023 |
Assets |
|
|
|
|
Interest-earning assets: |
|
|
|
|
Loans receivable, including loans held for sale |
$ |
5,932,541 |
|
$ |
5,986,669 |
|
$ |
(54,128 |
) |
-0.9 |
% |
Taxable investment securities |
|
1,529,582 |
|
|
1,558,222 |
|
|
(28,640 |
) |
-1.8 |
% |
Tax-exempt investment securities |
|
16,346 |
|
|
17,663 |
|
|
(1,317 |
) |
-7.5 |
% |
Other interest-earning assets |
|
128,158 |
|
|
131,682 |
|
|
(3,524 |
) |
-2.7 |
% |
Total interest-earning assets |
|
7,606,627 |
|
|
7,694,236 |
|
|
(87,609 |
) |
-1.1 |
% |
Non-interest-earning
assets |
|
556,962 |
|
|
575,009 |
|
|
(18,047 |
) |
-3.1 |
% |
Total assets |
$ |
8,163,589 |
|
$ |
8,269,245 |
|
$ |
(105,656 |
) |
-1.3 |
% |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
Deposits: |
|
|
|
|
Interest-bearing demand |
$ |
2,321,120 |
|
$ |
2,363,762 |
|
$ |
(42,642 |
) |
-1.8 |
% |
Savings |
|
774,854 |
|
|
858,673 |
|
|
(83,819 |
) |
-9.8 |
% |
Certificates of deposit |
|
2,057,818 |
|
|
2,069,396 |
|
|
(11,578 |
) |
-0.6 |
% |
Total interest-bearing deposits |
|
5,153,792 |
|
|
5,291,831 |
|
|
(138,039 |
) |
-2.6 |
% |
Borrowings: |
|
|
|
|
Federal Home Loan Bank advances |
|
1,374,316 |
|
|
1,402,269 |
|
|
(27,953 |
) |
-2.0 |
% |
Other borrowings |
|
100,055 |
|
|
1,611 |
|
|
98,444 |
|
6110.7 |
% |
Total borrowings |
|
1,474,371 |
|
|
1,403,880 |
|
|
70,491 |
|
5.0 |
% |
Total interest-bearing liabilities |
|
6,628,163 |
|
|
6,695,711 |
|
|
(67,548 |
) |
-1.0 |
% |
Non-interest-bearing
liabilities: |
|
|
|
|
Non-interest-bearing deposits |
|
608,765 |
|
|
634,324 |
|
|
(25,559 |
) |
-4.0 |
% |
Other non-interest-bearing liabilities |
|
64,970 |
|
|
60,327 |
|
|
4,643 |
|
7.7 |
% |
Total non-interest-bearing liabilities |
|
673,735 |
|
|
694,651 |
|
|
(20,916 |
) |
-3.0 |
% |
Total liabilities |
|
7,301,898 |
|
|
7,390,362 |
|
|
(88,464 |
) |
-1.2 |
% |
Stockholders' equity |
|
861,691 |
|
|
878,883 |
|
|
(17,192 |
) |
-2.0 |
% |
Total liabilities and stockholders' equity |
$ |
8,163,589 |
|
$ |
8,269,245 |
|
$ |
(105,656 |
) |
-1.3 |
% |
|
|
|
|
|
Average interest-earning assets to average interest-bearing
liabilities |
|
114.76 |
% |
|
114.91 |
% |
|
-0.15 |
% |
-0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Performance Ratio
Highlights(Unaudited)
|
Three Months Ended |
Variance or Change |
|
June 30,2023 |
March 31,2023 |
Average yield on
interest-earning assets: |
|
|
|
Loans receivable, including loans held for sale |
4.18 |
% |
4.02 |
% |
0.16 |
% |
Taxable investment securities |
4.12 |
% |
3.97 |
% |
0.15 |
% |
Tax-exempt investment securities (1) |
2.23 |
% |
2.23 |
% |
— |
% |
Other interest-earning assets |
5.68 |
% |
4.38 |
% |
1.30 |
% |
Total interest-earning assets |
4.19 |
% |
4.01 |
% |
0.18 |
% |
|
|
|
|
Average cost of
interest-bearing liabilities: |
|
|
|
Deposits: |
|
|
|
Interest-bearing demand |
2.38 |
% |
2.01 |
% |
0.37 |
% |
Savings |
0.48 |
% |
0.41 |
% |
0.07 |
% |
Certificates of deposit |
2.24 |
% |
1.84 |
% |
0.40 |
% |
Total interest-bearing deposits |
2.04 |
% |
1.68 |
% |
0.36 |
% |
Borrowings: |
|
|
|
Federal Home Loan Bank advances |
3.51 |
% |
3.58 |
% |
-0.07 |
% |
Other borrowings |
4.89 |
% |
5.15 |
% |
-0.26 |
% |
Total borrowings |
3.60 |
% |
3.58 |
% |
0.02 |
% |
Total interest-bearing liabilities |
2.38 |
% |
2.08 |
% |
0.30 |
% |
|
|
|
|
Interest rate spread (2) |
1.81 |
% |
1.93 |
% |
-0.12 |
% |
Net interest margin (3) |
2.11 |
% |
2.20 |
% |
-0.09 |
% |
|
|
|
|
Non-interest income to average assets (annualized) |
0.18 |
% |
0.08 |
% |
0.10 |
% |
Non-interest expense to average assets (annualized) |
1.41 |
% |
1.47 |
% |
-0.06 |
% |
|
|
|
|
Efficiency ratio (4) |
65.60 |
% |
68.96 |
% |
-3.36 |
% |
|
|
|
|
Return on average assets (annualized) |
0.59 |
% |
0.50 |
% |
0.09 |
% |
Return on average equity (annualized) |
5.58 |
% |
4.69 |
% |
0.89 |
% |
Return on average tangible equity (annualized) (5) |
7.41 |
% |
6.20 |
% |
1.21 |
% |
_________________________
(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, Except Per Share Data) |
June 30,2023 |
June 30,2022 |
Varianceor Change |
Variance or Change Pct. |
|
(Unaudited) |
(Audited) |
|
|
Assets |
|
|
|
|
Cash and cash equivalents |
$ |
70,515 |
|
$ |
101,615 |
|
$ |
(31,100 |
) |
-30.6 |
% |
Securities available for
sale |
|
1,227,729 |
|
|
1,344,093 |
|
|
(116,364 |
) |
-8.7 |
% |
Securities held to
maturity |
|
146,465 |
|
|
118,291 |
|
|
28,174 |
|
23.8 |
% |
Loans held-for-sale |
|
9,591 |
|
|
28,874 |
|
|
(19,283 |
) |
-66.8 |
% |
Loans receivable, including
yield adjustments |
|
5,829,421 |
|
|
5,417,845 |
|
|
411,576 |
|
7.6 |
% |
Less: allowance for credit losses on loans |
|
(48,734 |
) |
|
(47,058 |
) |
|
1,676 |
|
3.6 |
% |
Net loans receivable |
|
5,780,687 |
|
|
5,370,787 |
|
|
409,900 |
|
7.6 |
% |
Premises and equipment |
|
48,309 |
|
|
53,281 |
|
|
(4,972 |
) |
-9.3 |
% |
Federal Home Loan Bank of New
York stock |
|
71,734 |
|
|
47,144 |
|
|
24,590 |
|
52.2 |
% |
Accrued interest
receivable |
|
28,133 |
|
|
20,466 |
|
|
7,667 |
|
37.5 |
% |
Goodwill |
|
210,895 |
|
|
210,895 |
|
|
— |
|
0.0 |
% |
Core deposit intangible |
|
2,457 |
|
|
3,020 |
|
|
(563 |
) |
-18.6 |
% |
Bank owned life insurance |
|
292,825 |
|
|
289,177 |
|
|
3,648 |
|
1.3 |
% |
Deferred income tax assets,
net |
|
51,973 |
|
|
49,350 |
|
|
2,623 |
|
5.3 |
% |
Other real estate owned |
|
12,956 |
|
|
178 |
|
|
12,778 |
|
7178.7 |
% |
Other assets |
|
110,546 |
|
|
82,712 |
|
|
27,834 |
|
33.7 |
% |
Total assets |
$ |
8,064,815 |
|
$ |
7,719,883 |
|
$ |
344,932 |
|
4.5 |
% |
|
|
|
|
|
Liabilities |
|
|
|
|
Deposits: |
|
|
|
|
Non-interest-bearing |
$ |
609,999 |
|
$ |
653,899 |
|
$ |
(43,900 |
) |
-6.7 |
% |
Interest-bearing |
|
5,019,184 |
|
|
5,208,357 |
|
|
(189,173 |
) |
-3.6 |
% |
Total deposits |
|
5,629,183 |
|
|
5,862,256 |
|
|
(233,073 |
) |
-4.0 |
% |
Borrowings |
|
1,506,812 |
|
|
901,337 |
|
|
605,475 |
|
67.2 |
% |
Advance payments by borrowers
for taxes |
|
18,338 |
|
|
16,746 |
|
|
1,592 |
|
9.5 |
% |
Other liabilities |
|
41,198 |
|
|
45,544 |
|
|
(4,346 |
) |
-9.5 |
% |
Total liabilities |
|
7,195,531 |
|
|
6,825,883 |
|
|
369,648 |
|
5.4 |
% |
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
Common stock |
$ |
659 |
|
$ |
687 |
|
$ |
(28 |
) |
-4.1 |
% |
Paid-in capital |
|
503,332 |
|
|
528,396 |
|
|
(25,064 |
) |
-4.7 |
% |
Retained earnings |
|
457,611 |
|
|
445,451 |
|
|
12,160 |
|
2.7 |
% |
Unearned ESOP shares |
|
(22,862 |
) |
|
(24,807 |
) |
|
1,945 |
|
-7.8 |
% |
Accumulated other
comprehensive loss |
|
(69,456 |
) |
|
(55,727 |
) |
|
(13,729 |
) |
24.6 |
% |
Total stockholders' equity |
|
869,284 |
|
|
894,000 |
|
|
(24,716 |
) |
-2.8 |
% |
Total liabilities and stockholders' equity |
$ |
8,064,815 |
|
$ |
7,719,883 |
|
$ |
344,932 |
|
4.5 |
% |
|
|
|
|
|
Consolidated capital
ratios |
|
|
|
|
Equity to assets |
|
10.78 |
% |
|
11.58 |
% |
|
-0.80 |
% |
|
Tangible equity to tangible assets(1) |
|
8.35 |
% |
|
9.06 |
% |
|
-0.71 |
% |
|
|
|
|
|
|
Share
data |
|
|
|
|
Outstanding shares |
|
65,864 |
|
|
68,666 |
|
|
(2,802 |
) |
-4.1 |
% |
Book value per share |
$ |
13.20 |
|
$ |
13.02 |
|
$ |
0.18 |
|
1.4 |
% |
Tangible book value per share(2) |
$ |
9.96 |
|
$ |
9.90 |
|
$ |
0.06 |
|
0.6 |
% |
_________________________
(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
|
Year Ended |
|
|
(Dollars and Shares in Thousands, Except Per Share Data) |
June 30,2023 |
June 30,2022 |
Varianceor Change |
Varianceor Change Pct. |
|
(Unaudited) |
(Audited) |
|
|
Interest
income |
|
|
|
|
Loans |
$ |
233,147 |
|
$ |
190,520 |
|
$ |
42,627 |
|
22.4 |
% |
Taxable investment securities |
|
54,855 |
|
|
32,746 |
|
|
22,109 |
|
67.5 |
% |
Tax-exempt investment securities |
|
694 |
|
|
1,273 |
|
|
(579 |
) |
-45.5 |
% |
Other interest-earning assets |
|
5,028 |
|
|
1,733 |
|
|
3,295 |
|
190.1 |
% |
Total Interest Income |
|
293,724 |
|
|
226,272 |
|
|
67,452 |
|
29.8 |
% |
|
|
|
|
|
Interest
expense |
|
|
|
|
Deposits |
|
78,163 |
|
|
15,208 |
|
|
62,955 |
|
414.0 |
% |
Borrowings |
|
39,696 |
|
|
14,461 |
|
|
25,235 |
|
174.5 |
% |
Total interest expense |
|
117,859 |
|
|
29,669 |
|
|
88,190 |
|
297.2 |
% |
Net interest income |
|
175,865 |
|
|
196,603 |
|
|
(20,738 |
) |
-10.5 |
% |
Provision for (reversal of)
credit losses |
|
2,486 |
|
|
(7,518 |
) |
|
10,004 |
|
-133.1 |
% |
Net interest income after provision for (reversal of)
credit losses |
|
173,379 |
|
|
204,121 |
|
|
(30,742 |
) |
-15.1 |
% |
|
|
|
|
|
Non-interest
income |
|
|
|
|
Fees and service charges |
|
3,106 |
|
|
2,580 |
|
|
526 |
|
20.4 |
% |
Loss on sale and call of securities |
|
(15,227 |
) |
|
(559 |
) |
|
(14,668 |
) |
2624.0 |
% |
(Loss) gain on sale of loans |
|
(1,645 |
) |
|
2,539 |
|
|
(4,184 |
) |
-164.8 |
% |
(Loss) gain on sale of real estate owned |
|
(139 |
) |
|
5 |
|
|
(144 |
) |
-2880.0 |
% |
Income from bank owned life insurance |
|
8,645 |
|
|
6,167 |
|
|
2,478 |
|
40.2 |
% |
Electronic banking fees and charges |
|
1,759 |
|
|
1,626 |
|
|
133 |
|
8.2 |
% |
Other income |
|
6,252 |
|
|
1,576 |
|
|
4,676 |
|
296.7 |
% |
Total non-interest income |
|
2,751 |
|
|
13,934 |
|
|
(11,183 |
) |
-80.3 |
% |
|
|
|
|
|
Non-interest
expense |
|
|
|
|
Salaries and employee benefits |
|
75,589 |
|
|
76,264 |
|
|
(675 |
) |
-0.9 |
% |
Net occupancy expense of premises |
|
12,036 |
|
|
14,114 |
|
|
(2,078 |
) |
-14.7 |
% |
Equipment and systems |
|
14,577 |
|
|
15,886 |
|
|
(1,309 |
) |
-8.2 |
% |
Advertising and marketing |
|
2,122 |
|
|
2,059 |
|
|
63 |
|
3.1 |
% |
Federal deposit insurance premium |
|
5,133 |
|
|
2,455 |
|
|
2,678 |
|
109.1 |
% |
Directors' compensation |
|
1,364 |
|
|
2,132 |
|
|
(768 |
) |
-36.0 |
% |
Other expense |
|
12,930 |
|
|
12,798 |
|
|
132 |
|
1.0 |
% |
Total non-interest expense |
|
123,751 |
|
|
125,708 |
|
|
(1,957 |
) |
-1.6 |
% |
Income before income taxes |
|
52,379 |
|
|
92,347 |
|
|
(39,968 |
) |
-43.3 |
% |
Income taxes |
|
11,568 |
|
|
24,800 |
|
|
(13,232 |
) |
-53.4 |
% |
Net income |
$ |
40,811 |
|
$ |
67,547 |
|
$ |
(26,736 |
) |
-39.6 |
% |
|
|
|
|
|
Net income per common
share (EPS) |
|
|
|
|
Basic |
$ |
0.63 |
|
$ |
0.95 |
|
$ |
(0.32 |
) |
|
Diluted |
$ |
0.63 |
|
$ |
0.95 |
|
$ |
(0.32 |
) |
|
|
|
|
|
|
Dividends
declared |
|
|
|
|
Cash dividends declared per common share |
$ |
0.44 |
|
$ |
0.43 |
|
$ |
0.01 |
|
|
Cash dividends declared |
$ |
28,651 |
|
$ |
30,463 |
|
$ |
(1,812 |
) |
|
Dividend payout ratio |
|
70.2 |
% |
|
45.1 |
% |
|
25.1 |
% |
|
|
|
|
|
|
Weighted average number of common shares
outstanding |
|
|
|
|
Basic |
|
64,804 |
|
|
70,911 |
|
|
(6,107 |
) |
|
Diluted |
|
64,804 |
|
|
70,933 |
|
|
(6,129 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Average Balance Sheet
Data(Unaudited)
|
Year Ended |
|
|
(Dollars in Thousands) |
June 30,2023 |
June 30,2022 |
Varianceor Change |
Varianceor Change Pct. |
Assets |
|
|
|
|
Interest-earning assets: |
|
|
|
|
Loans receivable, including loans held for sale |
$ |
5,827,123 |
|
$ |
4,922,400 |
|
$ |
904,723 |
|
18.4 |
% |
Taxable investment securities |
|
1,532,961 |
|
|
1,622,475 |
|
|
(89,514 |
) |
-5.5 |
% |
Tax-exempt investment securities |
|
30,332 |
|
|
55,981 |
|
|
(25,649 |
) |
-45.8 |
% |
Other interest-earning assets |
|
115,390 |
|
|
82,802 |
|
|
32,588 |
|
39.4 |
% |
Total interest-earning assets |
|
7,505,806 |
|
|
6,683,658 |
|
|
822,148 |
|
12.3 |
% |
Non-interest-earning
assets |
|
563,131 |
|
|
598,712 |
|
|
(35,581 |
) |
-5.9 |
% |
Total assets |
$ |
8,068,937 |
|
$ |
7,282,370 |
|
$ |
786,567 |
|
10.8 |
% |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
Deposits: |
|
|
|
|
Interest-bearing demand |
$ |
2,349,802 |
|
$ |
2,067,200 |
|
$ |
282,602 |
|
13.7 |
% |
Savings |
|
896,651 |
|
|
1,088,971 |
|
|
(192,320 |
) |
-17.7 |
% |
Certificates of deposit |
|
2,083,864 |
|
|
1,711,276 |
|
|
372,588 |
|
21.8 |
% |
Total interest-bearing deposits |
|
5,330,317 |
|
|
4,867,447 |
|
|
462,870 |
|
9.5 |
% |
Borrowings: |
|
|
|
|
Federal Home Loan Bank Advances |
|
1,101,658 |
|
|
679,388 |
|
|
422,270 |
|
62.2 |
% |
Other borrowings |
|
57,468 |
|
|
72,841 |
|
|
(15,373 |
) |
-21.1 |
% |
Total borrowings |
|
1,159,126 |
|
|
752,229 |
|
|
406,897 |
|
54.1 |
% |
Total interest-bearing liabilities |
|
6,489,443 |
|
|
5,619,676 |
|
|
869,767 |
|
15.5 |
% |
Non-interest-bearing
liabilities: |
|
|
|
|
Non-interest-bearing deposits |
|
644,543 |
|
|
624,666 |
|
|
19,877 |
|
3.2 |
% |
Other non-interest-bearing liabilities |
|
59,593 |
|
|
53,477 |
|
|
6,116 |
|
11.4 |
% |
Total non-interest-bearing liabilities |
|
704,136 |
|
|
678,143 |
|
|
25,993 |
|
3.8 |
% |
Total liabilities |
|
7,193,579 |
|
|
6,297,819 |
|
|
895,760 |
|
14.2 |
% |
Stockholders' equity |
|
875,358 |
|
|
984,551 |
|
|
(109,193 |
) |
-11.1 |
% |
Total liabilities and stockholders' equity |
$ |
8,068,937 |
|
$ |
7,282,370 |
|
$ |
786,567 |
|
10.8 |
% |
|
|
|
|
|
Average interest-earning assets to average interest-bearing
liabilities |
|
115.66 |
% |
|
118.93 |
% |
(3.27) % |
-2.8 |
% |
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Performance Ratio
Highlights(Unaudited)
|
Year Ended |
|
|
June 30,2023 |
June 30,2022 |
Varianceor Change |
Average yield on interest-earning assets: |
|
|
|
Loans receivable, including loans held for sale |
4.00 |
% |
3.87 |
% |
0.13 |
% |
Taxable investment securities |
3.58 |
% |
2.02 |
% |
1.56 |
% |
Tax-exempt investment securities (1) |
2.29 |
% |
2.27 |
% |
0.02 |
% |
Other interest-earning assets |
4.36 |
% |
2.09 |
% |
2.27 |
% |
Total interest-earning assets |
3.91 |
% |
3.39 |
% |
0.52 |
% |
|
|
|
|
Average cost of
interest-bearing liabilities: |
|
|
|
Deposits: |
|
|
|
Interest-bearing demand |
1.73 |
% |
0.25 |
% |
1.48 |
% |
Savings |
0.37 |
% |
0.11 |
% |
0.26 |
% |
Certificates of deposit |
1.64 |
% |
0.52 |
% |
1.12 |
% |
Total interest-bearing deposits |
1.47 |
% |
0.31 |
% |
1.16 |
% |
Borrowings: |
|
|
|
Federal Home Loan Bank Advances |
3.43 |
% |
2.07 |
% |
1.36 |
% |
Other borrowings |
3.41 |
% |
0.54 |
% |
2.87 |
% |
Total borrowings |
3.42 |
% |
1.92 |
% |
1.50 |
% |
Total interest-bearing liabilities |
1.82 |
% |
0.53 |
% |
1.29 |
% |
|
|
|
|
Interest rate spread (2) |
2.09 |
% |
2.86 |
% |
-0.77 |
% |
Net interest margin (3) |
2.34 |
% |
2.94 |
% |
-0.60 |
% |
|
|
|
|
Non-interest income to average assets |
0.03 |
% |
0.19 |
% |
-0.16 |
% |
Non-interest expense to average assets |
1.53 |
% |
1.73 |
% |
-0.20 |
% |
|
|
|
|
Efficiency ratio (4) |
69.28 |
% |
59.71 |
% |
9.57 |
% |
|
|
|
|
Return on average assets |
0.51 |
% |
0.93 |
% |
-0.42 |
% |
Return on average equity |
4.66 |
% |
6.86 |
% |
-2.20 |
% |
Return on average tangible equity (5) |
6.17 |
% |
8.77 |
% |
-2.60 |
% |
_________________________
(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) |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) |
Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
70,515 |
|
$ |
194,568 |
|
$ |
75,660 |
|
$ |
96,076 |
|
$ |
101,615 |
|
Securities available for
sale |
|
1,227,729 |
|
|
1,267,066 |
|
|
1,286,354 |
|
|
1,263,176 |
|
|
1,344,093 |
|
Securities held to
maturity |
|
146,465 |
|
|
149,764 |
|
|
153,786 |
|
|
115,943 |
|
|
118,291 |
|
Loans held-for-sale |
|
9,591 |
|
|
5,401 |
|
|
12,940 |
|
|
12,936 |
|
|
28,874 |
|
Loans receivable |
|
5,829,421 |
|
|
5,966,325 |
|
|
5,984,133 |
|
|
5,656,370 |
|
|
5,417,845 |
|
Less: allowance for credit losses on loans |
|
(48,734 |
) |
|
(49,122 |
) |
|
(48,877 |
) |
|
(47,613 |
) |
|
(47,058 |
) |
Net loans receivable |
|
5,780,687 |
|
|
5,917,203 |
|
|
5,935,256 |
|
|
5,608,757 |
|
|
5,370,787 |
|
Premises and equipment |
|
48,309 |
|
|
49,589 |
|
|
50,953 |
|
|
52,642 |
|
|
53,281 |
|
Federal Home Loan Bank
stock |
|
71,734 |
|
|
76,319 |
|
|
69,022 |
|
|
44,957 |
|
|
47,144 |
|
Accrued interest
receivable |
|
28,133 |
|
|
28,794 |
|
|
27,368 |
|
|
23,817 |
|
|
20,466 |
|
Goodwill |
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
Core deposit intangible |
|
2,457 |
|
|
2,590 |
|
|
2,732 |
|
|
2,876 |
|
|
3,020 |
|
Bank owned life insurance |
|
292,825 |
|
|
291,220 |
|
|
289,673 |
|
|
289,690 |
|
|
289,177 |
|
Deferred income taxes,
net |
|
51,973 |
|
|
53,151 |
|
|
51,107 |
|
|
54,278 |
|
|
49,350 |
|
Other real estate owned |
|
12,956 |
|
|
13,410 |
|
|
13,410 |
|
|
178 |
|
|
178 |
|
Other assets |
|
110,546 |
|
|
89,366 |
|
|
110,162 |
|
|
113,369 |
|
|
82,712 |
|
Total assets |
$ |
8,064,815 |
|
$ |
8,349,336 |
|
$ |
8,289,318 |
|
$ |
7,889,590 |
|
$ |
7,719,883 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Non-interest-bearing |
$ |
609,999 |
|
$ |
617,778 |
|
$ |
650,950 |
|
$ |
683,406 |
|
$ |
653,899 |
|
Interest-bearing |
|
5,019,184 |
|
|
5,185,626 |
|
|
5,320,421 |
|
|
5,424,872 |
|
|
5,208,357 |
|
Total deposits |
|
5,629,183 |
|
|
5,803,404 |
|
|
5,971,371 |
|
|
6,108,278 |
|
|
5,862,256 |
|
Borrowings |
|
1,506,812 |
|
|
1,611,692 |
|
|
1,383,573 |
|
|
851,454 |
|
|
901,337 |
|
Advance payments by borrowers
for taxes |
|
18,338 |
|
|
18,706 |
|
|
17,307 |
|
|
16,555 |
|
|
16,746 |
|
Other liabilities |
|
41,198 |
|
|
49,304 |
|
|
44,427 |
|
|
38,329 |
|
|
45,544 |
|
Total liabilities |
|
7,195,531 |
|
|
7,483,106 |
|
|
7,416,678 |
|
|
7,014,616 |
|
|
6,825,883 |
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
Common stock |
|
659 |
|
|
667 |
|
|
674 |
|
|
680 |
|
|
687 |
|
Paid-in capital |
|
503,332 |
|
|
509,359 |
|
|
515,332 |
|
|
520,245 |
|
|
528,396 |
|
Retained earnings |
|
457,611 |
|
|
452,605 |
|
|
449,489 |
|
|
454,710 |
|
|
445,451 |
|
Unearned ESOP shares |
|
(22,862 |
) |
|
(23,348 |
) |
|
(23,834 |
) |
|
(24,321 |
) |
|
(24,807 |
) |
Accumulated other comprehensive loss |
|
(69,456 |
) |
|
(73,053 |
) |
|
(69,021 |
) |
|
(76,340 |
) |
|
(55,727 |
) |
Total stockholders' equity |
|
869,284 |
|
|
866,230 |
|
|
872,640 |
|
|
874,974 |
|
|
894,000 |
|
Total liabilities and stockholders' equity |
$ |
8,064,815 |
|
$ |
8,349,336 |
|
$ |
8,289,318 |
|
$ |
7,889,590 |
|
$ |
7,719,883 |
|
|
|
|
|
|
|
Consolidated capital
ratios |
|
|
|
|
|
Equity to assets |
|
10.78 |
% |
|
10.37 |
% |
|
10.53 |
% |
|
11.09 |
% |
|
11.58 |
% |
Tangible equity to tangible assets(1) |
|
8.35 |
% |
|
8.02 |
% |
|
8.16 |
% |
|
8.61 |
% |
|
9.06 |
% |
|
|
|
|
|
|
Share
data |
|
|
|
|
|
Outstanding shares |
|
65,864 |
|
|
66,680 |
|
|
67,388 |
|
|
67,938 |
|
|
68,666 |
|
Book value per share |
$ |
13.20 |
|
$ |
12.99 |
|
$ |
12.95 |
|
$ |
12.88 |
|
$ |
13.02 |
|
Tangible book value per share(2) |
$ |
9.96 |
|
$ |
9.79 |
|
$ |
9.78 |
|
$ |
9.73 |
|
$ |
9.90 |
|
_________________________
(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 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
Loan portfolio composition: |
|
|
|
|
|
Commercial loans: |
|
|
|
|
|
Multi-family mortgage |
$ |
2,761,775 |
|
$ |
2,835,852 |
|
$ |
2,851,721 |
|
$ |
2,570,297 |
|
$ |
2,409,090 |
|
Nonresidential mortgage |
|
968,574 |
|
|
1,002,643 |
|
|
1,017,341 |
|
|
1,040,688 |
|
|
1,019,838 |
|
Commercial business |
|
146,861 |
|
|
162,038 |
|
|
177,530 |
|
|
186,361 |
|
|
176,807 |
|
Construction |
|
226,609 |
|
|
215,524 |
|
|
186,663 |
|
|
166,052 |
|
|
140,131 |
|
Total commercial loans |
|
4,103,819 |
|
|
4,216,057 |
|
|
4,233,255 |
|
|
3,963,398 |
|
|
3,745,866 |
|
One- to four-family residential mortgage |
|
1,700,559 |
|
|
1,713,343 |
|
|
1,719,514 |
|
|
1,666,730 |
|
|
1,645,816 |
|
Consumer loans: |
|
|
|
|
|
Home equity loans |
|
43,549 |
|
|
44,376 |
|
|
45,690 |
|
|
43,269 |
|
|
42,028 |
|
Other consumer |
|
2,549 |
|
|
2,592 |
|
|
2,648 |
|
|
2,869 |
|
|
2,866 |
|
Total consumer loans |
|
46,098 |
|
|
46,968 |
|
|
48,338 |
|
|
46,138 |
|
|
44,894 |
|
Total loans, excluding yield adjustments |
|
5,850,476 |
|
|
5,976,368 |
|
|
6,001,107 |
|
|
5,676,266 |
|
|
5,436,576 |
|
Unaccreted yield adjustments |
|
(21,055 |
) |
|
(10,043 |
) |
|
(16,974 |
) |
|
(19,896 |
) |
|
(18,731 |
) |
Loans receivable, net of yield adjustments |
|
5,829,421 |
|
|
5,966,325 |
|
|
5,984,133 |
|
|
5,656,370 |
|
|
5,417,845 |
|
Less: allowance for credit losses on loans |
|
(48,734 |
) |
|
(49,122 |
) |
|
(48,877 |
) |
|
(47,613 |
) |
|
(47,058 |
) |
Net loans receivable |
$ |
5,780,687 |
|
$ |
5,917,203 |
|
$ |
5,935,256 |
|
$ |
5,608,757 |
|
$ |
5,370,787 |
|
|
|
|
|
|
|
Asset
quality: |
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
Accruing loans - 90 days and over past due |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Nonaccrual loans |
|
42,627 |
|
|
44,026 |
|
|
40,549 |
|
|
68,574 |
|
|
70,321 |
|
Total nonperforming loans |
|
42,627 |
|
|
44,026 |
|
|
40,549 |
|
|
68,574 |
|
|
70,321 |
|
Nonaccrual loans held-for-sale |
|
— |
|
|
— |
|
|
8,650 |
|
|
8,650 |
|
|
21,745 |
|
Other real estate owned |
|
12,956 |
|
|
13,410 |
|
|
13,410 |
|
|
178 |
|
|
178 |
|
Total nonperforming assets |
$ |
55,583 |
|
$ |
57,436 |
|
$ |
62,609 |
|
$ |
77,402 |
|
$ |
92,244 |
|
|
|
|
|
|
|
Nonperforming loans (% total loans) |
|
0.73 |
% |
|
0.74 |
% |
|
0.68 |
% |
|
1.21 |
% |
|
1.30 |
% |
Nonperforming assets (% total assets) |
|
0.69 |
% |
|
0.69 |
% |
|
0.76 |
% |
|
0.98 |
% |
|
1.19 |
% |
|
|
|
|
|
|
Classified loans |
$ |
93,526 |
|
$ |
103,461 |
|
$ |
86,069 |
|
$ |
92,610 |
|
$ |
94,555 |
|
|
|
|
|
|
|
Allowance for credit losses on loans (ACL): |
|
|
|
|
|
ACL to total loans |
|
0.83 |
% |
|
0.82 |
% |
|
0.81 |
% |
|
0.84 |
% |
|
0.87 |
% |
ACL to nonperforming loans |
|
114.33 |
% |
|
111.57 |
% |
|
120.54 |
% |
|
69.43 |
% |
|
66.92 |
% |
Net charge-offs |
$ |
82 |
|
$ |
206 |
|
$ |
407 |
|
$ |
115 |
|
$ |
1,024 |
|
Average net charge-off rate (annualized) |
|
0.01 |
% |
|
0.01 |
% |
|
0.03 |
% |
|
0.01 |
% |
|
0.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Supplemental Balance Sheet
Highlights(Unaudited)
(Dollars in Thousands) |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
Funding composition: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Non-interest-bearing deposits |
$ |
609,999 |
|
$ |
617,778 |
|
$ |
650,950 |
|
$ |
683,406 |
|
$ |
653,899 |
|
Interest-bearing demand |
|
2,252,912 |
|
|
2,285,799 |
|
|
2,316,485 |
|
|
2,382,411 |
|
|
2,265,597 |
|
Savings |
|
748,721 |
|
|
811,483 |
|
|
901,514 |
|
|
982,916 |
|
|
1,053,198 |
|
Certificates of deposit (retail) |
|
1,377,028 |
|
|
1,327,343 |
|
|
1,354,907 |
|
|
1,263,124 |
|
|
1,116,035 |
|
Certificates of deposit (brokered and listing service) |
|
640,523 |
|
|
761,001 |
|
|
747,515 |
|
|
796,421 |
|
|
773,527 |
|
Interest-bearing deposits |
|
5,019,184 |
|
|
5,185,626 |
|
|
5,320,421 |
|
|
5,424,872 |
|
|
5,208,357 |
|
Total deposits |
|
5,629,183 |
|
|
5,803,404 |
|
|
5,971,371 |
|
|
6,108,278 |
|
|
5,862,256 |
|
|
|
|
|
|
|
Borrowings: |
|
|
|
|
|
Federal Home Loan Bank advances |
|
1,281,812 |
|
|
1,156,692 |
|
|
1,256,573 |
|
|
796,454 |
|
|
651,337 |
|
Overnight borrowings |
|
225,000 |
|
|
455,000 |
|
|
127,000 |
|
|
55,000 |
|
|
250,000 |
|
Total borrowings |
|
1,506,812 |
|
|
1,611,692 |
|
|
1,383,573 |
|
|
851,454 |
|
|
901,337 |
|
|
|
|
|
|
|
Total funding |
$ |
7,135,995 |
|
$ |
7,415,096 |
|
$ |
7,354,944 |
|
$ |
6,959,732 |
|
$ |
6,763,593 |
|
|
|
|
|
|
|
Loans as a % of deposits |
|
102.9 |
% |
|
102.1 |
% |
|
99.6 |
% |
|
92.0 |
% |
|
92.1 |
% |
Deposits as a % of total funding |
|
78.9 |
% |
|
78.3 |
% |
|
81.2 |
% |
|
87.8 |
% |
|
86.7 |
% |
Borrowings as a % of total funding |
|
21.1 |
% |
|
21.7 |
% |
|
18.8 |
% |
|
12.2 |
% |
|
13.3 |
% |
|
|
|
|
|
|
Uninsured
deposits: |
|
|
|
|
|
Uninsured deposits (reported)(1) |
$ |
1,771,416 |
|
$ |
1,678,051 |
|
$ |
1,815,854 |
|
$ |
1,771,851 |
|
$ |
1,525,940 |
|
Uninsured deposits (adjusted)(2) |
$ |
710,377 |
|
$ |
705,727 |
|
$ |
794,407 |
|
$ |
883,351 |
|
$ |
792,067 |
|
_________________________
(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) |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
Interest income |
|
|
|
|
|
Loans |
$ |
62,044 |
|
$ |
60,172 |
|
$ |
57,996 |
|
$ |
52,935 |
|
$ |
48,869 |
|
Taxable investment securities |
|
15,736 |
|
|
15,459 |
|
|
13,221 |
|
|
10,439 |
|
|
8,915 |
|
Tax-exempt investment securities |
|
91 |
|
|
99 |
|
|
219 |
|
|
285 |
|
|
297 |
|
Other interest-earning assets |
|
1,821 |
|
|
1,441 |
|
|
1,005 |
|
|
761 |
|
|
472 |
|
Total interest income |
|
79,692 |
|
|
77,171 |
|
|
72,441 |
|
|
64,420 |
|
|
58,553 |
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
Deposits |
|
26,226 |
|
|
22,246 |
|
|
18,822 |
|
|
10,869 |
|
|
3,915 |
|
Borrowings |
|
13,286 |
|
|
12,554 |
|
|
8,836 |
|
|
5,020 |
|
|
4,039 |
|
Total interest expense |
|
39,512 |
|
|
34,800 |
|
|
27,658 |
|
|
15,889 |
|
|
7,954 |
|
Net interest income |
|
40,180 |
|
|
42,371 |
|
|
44,783 |
|
|
48,531 |
|
|
50,599 |
|
(Reversal of) provision for
credit losses |
|
(306 |
) |
|
451 |
|
|
1,671 |
|
|
670 |
|
|
4,222 |
|
Net interest income after (reversal of) provision for
credit losses |
|
40,486 |
|
|
41,920 |
|
|
43,112 |
|
|
47,861 |
|
|
46,377 |
|
|
|
|
|
|
|
Non-interest
income |
|
|
|
|
|
Fees and service charges |
|
699 |
|
|
910 |
|
|
734 |
|
|
763 |
|
|
658 |
|
Loss on sale and call of securities |
|
— |
|
|
— |
|
|
(15,227 |
) |
|
— |
|
|
(563 |
) |
Gain (loss) on sale of loans |
|
199 |
|
|
(2,373 |
) |
|
134 |
|
|
395 |
|
|
187 |
|
Loss on sale of other real estate owned |
|
(139 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(9 |
) |
Income from bank owned life insurance |
|
1,605 |
|
|
1,581 |
|
|
1,761 |
|
|
3,698 |
|
|
1,533 |
|
Electronic banking fees and charges |
|
399 |
|
|
457 |
|
|
397 |
|
|
506 |
|
|
366 |
|
Other income |
|
903 |
|
|
1,071 |
|
|
3,723 |
|
|
555 |
|
|
638 |
|
Total non-interest income |
|
3,666 |
|
|
1,646 |
|
|
(8,478 |
) |
|
5,917 |
|
|
2,810 |
|
|
|
|
|
|
|
Non-interest
expense |
|
|
|
|
|
Salaries and employee benefits |
|
17,315 |
|
|
18,005 |
|
|
19,921 |
|
|
20,348 |
|
|
20,367 |
|
Net occupancy expense of premises |
|
2,862 |
|
|
3,097 |
|
|
2,987 |
|
|
3,090 |
|
|
3,188 |
|
Equipment and systems |
|
3,511 |
|
|
3,537 |
|
|
3,867 |
|
|
3,662 |
|
|
4,516 |
|
Advertising and marketing |
|
231 |
|
|
413 |
|
|
731 |
|
|
747 |
|
|
703 |
|
Federal deposit insurance premium |
|
1,455 |
|
|
1,546 |
|
|
1,226 |
|
|
906 |
|
|
762 |
|
Directors' compensation |
|
345 |
|
|
340 |
|
|
339 |
|
|
340 |
|
|
340 |
|
Other expense |
|
3,042 |
|
|
3,414 |
|
|
3,579 |
|
|
2,895 |
|
|
3,736 |
|
Total non-interest expense |
|
28,761 |
|
|
30,352 |
|
|
32,650 |
|
|
31,988 |
|
|
33,612 |
|
Income before income taxes |
|
15,391 |
|
|
13,214 |
|
|
1,984 |
|
|
21,790 |
|
|
15,575 |
|
Income taxes |
|
3,378 |
|
|
2,902 |
|
|
33 |
|
|
5,255 |
|
|
4,205 |
|
Net income |
$ |
12,013 |
|
$ |
10,312 |
|
$ |
1,951 |
|
$ |
16,535 |
|
$ |
11,370 |
|
|
|
|
|
|
|
Net income per common
share (EPS) |
|
|
|
|
|
Basic |
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
$ |
0.17 |
|
Diluted |
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
$ |
0.17 |
|
|
|
|
|
|
|
Dividends
declared |
|
|
|
|
|
Cash dividends declared per common share |
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
Cash dividends declared |
$ |
7,007 |
|
$ |
7,196 |
|
$ |
7,172 |
|
$ |
7,276 |
|
$ |
7,441 |
|
Dividend payout ratio |
|
58.3 |
% |
|
69.8 |
% |
|
367.6 |
% |
|
44.0 |
% |
|
65.4 |
% |
|
|
|
|
|
|
Weighted average number of common shares
outstanding |
|
|
|
|
|
Basic |
|
63,667 |
|
|
64,769 |
|
|
65,030 |
|
|
65,737 |
|
|
67,240 |
|
Diluted |
|
63,667 |
|
|
64,783 |
|
|
65,038 |
|
|
65,756 |
|
|
67,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Average Balance Sheet
Data(Unaudited)
|
Three Months Ended |
(Dollars in Thousands) |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
Assets |
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
Loans receivable, including loans held-for-sale |
$ |
5,932,541 |
|
$ |
5,986,669 |
|
$ |
5,839,903 |
|
$ |
5,553,996 |
|
$ |
5,181,983 |
|
Taxable investment securities |
|
1,529,582 |
|
|
1,558,222 |
|
|
1,527,578 |
|
|
1,516,974 |
|
|
1,608,372 |
|
Tax-exempt investment securities |
|
16,346 |
|
|
17,663 |
|
|
37,917 |
|
|
48,973 |
|
|
51,672 |
|
Other interest-earning assets |
|
128,158 |
|
|
131,682 |
|
|
114,175 |
|
|
88,038 |
|
|
87,990 |
|
Total interest-earning assets |
|
7,606,627 |
|
|
7,694,236 |
|
|
7,519,573 |
|
|
7,207,981 |
|
|
6,930,017 |
|
Non-interest-earning
assets |
|
556,962 |
|
|
575,009 |
|
|
550,519 |
|
|
570,225 |
|
|
564,734 |
|
Total assets |
$ |
8,163,589 |
|
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
7,778,206 |
|
$ |
7,494,751 |
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Interest-bearing demand |
$ |
2,321,120 |
|
$ |
2,363,762 |
|
$ |
2,359,977 |
|
$ |
2,354,340 |
|
$ |
2,155,946 |
|
Savings |
|
774,854 |
|
|
858,673 |
|
|
931,584 |
|
|
1,019,343 |
|
|
1,077,631 |
|
Certificates of deposit |
|
2,057,818 |
|
|
2,069,396 |
|
|
2,192,722 |
|
|
2,014,922 |
|
|
1,701,725 |
|
Total interest-bearing deposits |
|
5,153,792 |
|
|
5,291,831 |
|
|
5,484,283 |
|
|
5,388,605 |
|
|
4,935,302 |
|
Borrowings: |
|
|
|
|
|
Federal Home Loan Bank advances |
|
1,374,316 |
|
|
1,402,269 |
|
|
997,148 |
|
|
642,399 |
|
|
752,579 |
|
Other borrowings |
|
100,055 |
|
|
1,611 |
|
|
— |
|
|
127,456 |
|
|
185,901 |
|
Total borrowings |
|
1,474,371 |
|
|
1,403,880 |
|
|
997,148 |
|
|
769,855 |
|
|
938,480 |
|
Total interest-bearing liabilities |
|
6,628,163 |
|
|
6,695,711 |
|
|
6,481,431 |
|
|
6,158,460 |
|
|
5,873,782 |
|
Non-interest-bearing
liabilities: |
|
|
|
|
|
Non-interest-bearing deposits |
|
608,765 |
|
|
634,324 |
|
|
666,846 |
|
|
667,624 |
|
|
640,200 |
|
Other non-interest-bearing liabilities |
|
64,970 |
|
|
60,327 |
|
|
56,721 |
|
|
56,431 |
|
|
56,636 |
|
Total non-interest-bearing liabilities |
|
673,735 |
|
|
694,651 |
|
|
723,567 |
|
|
724,055 |
|
|
696,836 |
|
Total liabilities |
|
7,301,898 |
|
|
7,390,362 |
|
|
7,204,998 |
|
|
6,882,515 |
|
|
6,570,618 |
|
Stockholders' equity |
|
861,691 |
|
|
878,883 |
|
|
865,094 |
|
|
895,691 |
|
|
924,133 |
|
Total liabilities and stockholders' equity |
$ |
8,163,589 |
|
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
7,778,206 |
|
$ |
7,494,751 |
|
|
|
|
|
|
|
Average interest-earning assets to averageinterest-bearing
liabilities |
|
114.76 |
% |
|
114.91 |
% |
|
116.02 |
% |
|
117.04 |
% |
|
117.98 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Performance Ratio Highlights
|
Three Months Ended |
|
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
Average yield on interest-earning assets: |
|
|
|
|
|
Loans receivable, including loans held-for-sale |
4.18 |
% |
4.02 |
% |
3.97 |
% |
3.81 |
% |
3.77 |
% |
Taxable investment securities |
4.12 |
% |
3.97 |
% |
3.46 |
% |
2.75 |
% |
2.22 |
% |
Tax-exempt investment securities (1) |
2.23 |
% |
2.23 |
% |
2.32 |
% |
2.33 |
% |
2.30 |
% |
Other interest-earning assets |
5.68 |
% |
4.38 |
% |
3.52 |
% |
3.46 |
% |
2.15 |
% |
Total interest-earning assets |
4.19 |
% |
4.01 |
% |
3.85 |
% |
3.57 |
% |
3.38 |
% |
|
|
|
|
|
|
Average cost of
interest-bearing liabilities: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Interest-bearing demand |
2.38 |
% |
2.01 |
% |
1.63 |
% |
0.92 |
% |
0.31 |
% |
Savings |
0.48 |
% |
0.41 |
% |
0.41 |
% |
0.23 |
% |
0.11 |
% |
Certificates of deposit |
2.24 |
% |
1.84 |
% |
1.50 |
% |
0.97 |
% |
0.46 |
% |
Total interest-bearing deposits |
2.04 |
% |
1.68 |
% |
1.37 |
% |
0.81 |
% |
0.32 |
% |
Borrowings: |
|
|
|
|
|
Federal Home Loan Bank advances |
3.51 |
% |
3.58 |
% |
3.54 |
% |
2.68 |
% |
1.96 |
% |
Other borrowings |
4.89 |
% |
5.15 |
% |
— |
% |
2.26 |
% |
0.77 |
% |
Total borrowings |
3.60 |
% |
3.58 |
% |
3.54 |
% |
2.61 |
% |
1.72 |
% |
Total interest-bearing liabilities |
2.38 |
% |
2.08 |
% |
1.71 |
% |
1.03 |
% |
0.54 |
% |
|
|
|
|
|
|
Interest rate spread (2) |
1.81 |
% |
1.93 |
% |
2.14 |
% |
2.54 |
% |
2.84 |
% |
Net interest margin (3) |
2.11 |
% |
2.20 |
% |
2.38 |
% |
2.69 |
% |
2.92 |
% |
|
|
|
|
|
|
Non-interest income to average assets (annualized) |
0.18 |
% |
0.08 |
% |
-0.42 |
% |
0.30 |
% |
0.15 |
% |
Non-interest expense to average assets (annualized) |
1.41 |
% |
1.47 |
% |
1.62 |
% |
1.65 |
% |
1.79 |
% |
|
|
|
|
|
|
Efficiency ratio (4) |
65.60 |
% |
68.96 |
% |
89.93 |
% |
58.75 |
% |
62.93 |
% |
|
|
|
|
|
|
Return on average assets (annualized) |
0.59 |
% |
0.50 |
% |
0.10 |
% |
0.85 |
% |
0.61 |
% |
Return on average equity (annualized) |
5.58 |
% |
4.69 |
% |
0.90 |
% |
7.38 |
% |
4.92 |
% |
Return on average tangible equity (annualized) (5) |
7.41 |
% |
6.20 |
% |
1.20 |
% |
9.70 |
% |
6.40 |
% |
_________________________
(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) |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
Adjusted net income: |
|
|
|
|
|
Net income (GAAP) |
$ |
12,013 |
|
$ |
10,312 |
|
$ |
1,951 |
|
$ |
16,535 |
|
$ |
11,370 |
|
Non-recurring transactions - net of tax: |
|
|
|
|
|
Branch consolidation expenses |
|
— |
|
|
568 |
|
|
— |
|
|
— |
|
|
— |
|
Net effect of sale and call of securities |
|
— |
|
|
— |
|
|
10,811 |
|
|
— |
|
|
400 |
|
Net effect of sale of other assets |
|
— |
|
|
— |
|
|
(2,081 |
) |
|
— |
|
|
— |
|
Severance expense from workforce realignment |
|
— |
|
|
— |
|
|
538 |
|
|
— |
|
|
— |
|
Early contract termination |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
568 |
|
Adjusted net income |
$ |
12,013 |
|
$ |
10,880 |
|
$ |
11,219 |
|
$ |
16,535 |
|
$ |
12,338 |
|
|
|
|
|
|
|
Calculation of
pre-tax, pre-provision net revenue: |
|
|
|
|
|
Net income (GAAP) |
$ |
12,013 |
|
$ |
10,312 |
|
$ |
1,951 |
|
$ |
16,535 |
|
$ |
11,370 |
|
Adjustments to net income (GAAP): |
|
|
|
|
|
Provision for income taxes |
|
3,378 |
|
|
2,902 |
|
|
33 |
|
|
5,255 |
|
|
4,205 |
|
(Reversal of) provision for credit losses |
|
(306 |
) |
|
451 |
|
|
1,671 |
|
|
670 |
|
|
4,222 |
|
Pre-tax, pre-provision net revenue (non-GAAP) |
$ |
15,085 |
|
$ |
13,665 |
|
$ |
3,655 |
|
$ |
22,460 |
|
$ |
19,797 |
|
|
|
|
|
|
|
Adjusted earnings per
share: |
|
|
|
|
|
Weighted average common shares - basic |
|
63,667 |
|
|
64,769 |
|
|
65,030 |
|
|
65,737 |
|
|
67,240 |
|
Weighted average common shares - diluted |
|
63,667 |
|
|
64,783 |
|
|
65,038 |
|
|
65,756 |
|
|
67,276 |
|
|
|
|
|
|
|
Earnings per share - basic (GAAP) |
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
$ |
0.17 |
|
Earnings per share - diluted (GAAP) |
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
$ |
0.17 |
|
|
|
|
|
|
|
Adjusted earnings per share - basic (non-GAAP) |
$ |
0.19 |
|
$ |
0.17 |
|
$ |
0.17 |
|
$ |
0.25 |
|
$ |
0.18 |
|
Adjusted earnings per share - diluted (non-GAAP) |
$ |
0.19 |
|
$ |
0.17 |
|
$ |
0.17 |
|
$ |
0.25 |
|
$ |
0.18 |
|
|
|
|
|
|
|
Pre-tax, pre-provision
net revenue per share: |
|
|
|
|
|
Pre-tax, pre-provision net revenue per share - basic(non-GAAP) |
$ |
0.24 |
|
$ |
0.21 |
|
$ |
0.06 |
|
$ |
0.34 |
|
$ |
0.29 |
|
Pre-tax, pre-provision net revenue per share -
diluted(non-GAAP) |
$ |
0.24 |
|
$ |
0.21 |
|
$ |
0.06 |
|
$ |
0.34 |
|
$ |
0.29 |
|
|
|
|
|
|
|
Adjusted return on
average assets: |
|
|
|
|
|
Total average assets |
$ |
8,163,589 |
|
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
7,778,206 |
|
$ |
7,494,751 |
|
|
|
|
|
|
|
Return on average assets (GAAP) |
|
0.59 |
% |
|
0.50 |
% |
|
0.10 |
% |
|
0.85 |
% |
|
0.61 |
% |
Adjusted return on average assets (non-GAAP) |
|
0.59 |
% |
|
0.53 |
% |
|
0.56 |
% |
|
0.85 |
% |
|
0.66 |
% |
|
|
|
|
|
|
Adjusted return on
average equity: |
|
|
|
|
|
Total average equity |
$ |
861,691 |
|
$ |
878,883 |
|
$ |
865,094 |
|
$ |
895,691 |
|
$ |
924,133 |
|
|
|
|
|
|
|
Return on average equity (GAAP) |
|
5.58 |
% |
|
4.69 |
% |
|
0.90 |
% |
|
7.38 |
% |
|
4.92 |
% |
Adjusted return on average equity (non-GAAP) |
|
5.58 |
% |
|
4.95 |
% |
|
5.19 |
% |
|
7.38 |
% |
|
5.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Reconciliation of GAAP to
Non-GAAP(Unaudited)
|
Three Months Ended |
(Dollars and Shares in Thousands,Except Per Share Data) |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
Adjusted return on average tangible equity: |
|
|
|
|
|
Total average equity |
$ |
861,691 |
|
$ |
878,883 |
|
$ |
865,094 |
|
$ |
895,691 |
|
$ |
924,133 |
|
Less: average goodwill |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
Less: average other intangible
assets |
|
(2,544 |
) |
|
(2,683 |
) |
|
(2,826 |
) |
|
(2,971 |
) |
|
(3,116 |
) |
Total average tangible
equity |
$ |
648,252 |
|
$ |
665,305 |
|
$ |
651,373 |
|
$ |
681,825 |
|
$ |
710,122 |
|
|
|
|
|
|
|
Return on average tangible
equity (non-GAAP) |
|
7.41 |
% |
|
6.20 |
% |
|
1.20 |
% |
|
9.70 |
% |
|
6.40 |
% |
Adjusted return on average
tangible equity (non-GAAP) |
|
7.41 |
% |
|
6.54 |
% |
|
6.89 |
% |
|
9.70 |
% |
|
6.95 |
% |
|
|
|
|
|
|
Adjusted non-interest
expense ratio: |
|
|
|
|
|
Non-interest expense
(GAAP) |
$ |
28,761 |
|
$ |
30,352 |
|
$ |
32,650 |
|
$ |
31,988 |
|
$ |
33,612 |
|
Non-recurring
transactions: |
|
|
|
|
|
Branch consolidation
expenses |
|
— |
|
|
(800 |
) |
|
— |
|
|
— |
|
|
— |
|
Severance expense from
workforce realignment |
|
— |
|
|
— |
|
|
(757 |
) |
|
— |
|
|
— |
|
Early contract
termination |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(800 |
) |
Non-interest expense
(non-GAAP) |
$ |
28,761 |
|
$ |
29,552 |
|
$ |
31,893 |
|
$ |
31,988 |
|
$ |
32,812 |
|
|
|
|
|
|
|
Non-interest expense ratio
(GAAP) |
|
1.41 |
% |
|
1.47 |
% |
|
1.62 |
% |
|
1.65 |
% |
|
1.79 |
% |
Adjusted non-interest expense
ratio (non-GAAP) |
|
1.41 |
% |
|
1.43 |
% |
|
1.58 |
% |
|
1.65 |
% |
|
1.75 |
% |
|
|
|
|
|
|
Adjusted efficiency
ratio: |
|
|
|
|
|
Non-interest expense
(non-GAAP) |
$ |
28,761 |
|
$ |
29,552 |
|
$ |
31,893 |
|
$ |
31,988 |
|
$ |
32,812 |
|
|
|
|
|
|
|
Net interest income
(GAAP) |
$ |
40,180 |
|
$ |
42,371 |
|
$ |
44,783 |
|
$ |
48,531 |
|
$ |
50,599 |
|
Total non-interest income
(GAAP) |
|
3,666 |
|
|
1,646 |
|
|
(8,478 |
) |
|
5,917 |
|
|
2,810 |
|
Non-recurring
transactions: |
|
|
|
|
|
Net effect of sale and call of
securities |
|
— |
|
|
— |
|
|
15,227 |
|
|
— |
|
|
563 |
|
Net effect of sale of other
assets |
|
— |
|
|
— |
|
|
(2,931 |
) |
|
— |
|
|
— |
|
Total revenue (non-GAAP) |
$ |
43,846 |
|
$ |
44,017 |
|
$ |
48,601 |
|
$ |
54,448 |
|
$ |
53,972 |
|
|
|
|
|
|
|
Efficiency ratio (GAAP) |
|
65.60 |
% |
|
68.96 |
% |
|
89.93 |
% |
|
58.75 |
% |
|
62.93 |
% |
Adjusted efficiency ratio
(non-GAAP) |
|
65.60 |
% |
|
67.14 |
% |
|
65.62 |
% |
|
58.75 |
% |
|
60.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Reconciliation of GAAP to
Non-GAAP(Unaudited)
|
Year Ended |
(Dollars and Shares in Thousands,Except Per Share Data) |
June 30,2023 |
|
June 30,2022 |
Adjusted net income: |
|
|
|
Net income (GAAP) |
$ |
40,811 |
|
|
$ |
67,547 |
|
Non-recurring transactions - net of tax: |
|
|
|
Branch consolidation expenses and impairment charges |
|
568 |
|
|
|
1,341 |
|
Net effect of sale and call of securities |
|
10,811 |
|
|
|
397 |
|
Net effect of sale of other assets |
|
(2,081 |
) |
|
|
(251 |
) |
Severance expense from workforce realignment |
|
538 |
|
|
|
— |
|
Early contract termination |
|
— |
|
|
|
568 |
|
Adjusted net income |
$ |
50,647 |
|
|
$ |
69,602 |
|
|
|
|
|
Calculation of
pre-tax, pre-provision net revenue: |
|
|
|
Net income (GAAP) |
$ |
40,811 |
|
|
$ |
67,547 |
|
Adjustments to net income (GAAP): |
|
|
|
Provision for income taxes |
|
11,568 |
|
|
|
24,800 |
|
Provision for (reversal of) credit losses |
|
2,486 |
|
|
|
(7,518 |
) |
Pre-tax, pre-provision net revenue (non-GAAP) |
$ |
54,865 |
|
|
$ |
84,829 |
|
|
|
|
|
Adjusted earnings per
share: |
|
|
|
Weighted average common shares - basic |
|
64,804 |
|
|
|
70,911 |
|
Weighted average common shares - diluted |
|
64,804 |
|
|
|
70,933 |
|
|
|
|
|
Earnings per share - basic (GAAP) |
$ |
0.63 |
|
|
$ |
0.95 |
|
Earnings per share - diluted (GAAP) |
$ |
0.63 |
|
|
$ |
0.95 |
|
|
|
|
|
Adjusted earnings per share - basic (non-GAAP) |
$ |
0.78 |
|
|
$ |
0.98 |
|
Adjusted earnings per share - diluted (non-GAAP) |
$ |
0.78 |
|
|
$ |
0.98 |
|
|
|
|
|
Pre-tax, pre-provision
net revenue per share: |
|
|
|
Pre-tax, pre-provision net revenue per share - basic
(non-GAAP) |
$ |
0.85 |
|
|
$ |
1.20 |
|
Pre-tax, pre-provision net revenue per share - diluted
(non-GAAP) |
$ |
0.85 |
|
|
$ |
1.20 |
|
|
|
|
|
Adjusted return on
average assets: |
|
|
|
Total average assets |
$ |
8,068,937 |
|
|
$ |
7,282,370 |
|
|
|
|
|
Return on average assets (GAAP) |
|
0.51 |
% |
|
|
0.93 |
% |
Adjusted return on average assets (non-GAAP) |
|
0.63 |
% |
|
|
0.96 |
% |
|
|
|
|
Adjusted return on
average equity: |
|
|
|
Total average equity |
$ |
875,358 |
|
|
$ |
984,551 |
|
|
|
|
|
Return on average equity (GAAP) |
|
4.66 |
% |
|
|
6.86 |
% |
Adjusted return on average equity (non-GAAP) |
|
5.79 |
% |
|
|
7.07 |
% |
|
|
|
|
Adjusted return on
average tangible equity: |
|
|
|
Total average equity |
$ |
875,358 |
|
|
$ |
984,551 |
|
Less: average goodwill |
|
(210,895 |
) |
|
|
(210,895 |
) |
Less: average other intangible assets |
|
(2,757 |
) |
|
|
(3,377 |
) |
Total average tangible equity |
$ |
661,706 |
|
|
$ |
770,279 |
|
|
|
|
|
Return on average tangible equity (non-GAAP) |
|
6.17 |
% |
|
|
8.77 |
% |
Adjusted return on average tangible equity (non-GAAP) |
|
7.65 |
% |
|
|
9.04 |
% |
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Reconciliation of GAAP to
Non-GAAP(Unaudited)
|
Year Ended |
(Dollars in Thousands) |
June 30,2023 |
|
June 30,2022 |
Adjusted non-interest expense ratio: |
|
|
|
Non-interest expense (GAAP) |
$ |
123,751 |
|
|
$ |
125,708 |
|
Non-routine transactions: |
|
|
|
Branch consolidation expenses and impairment charges |
|
(800 |
) |
|
|
(1,898 |
) |
Severance expense from workforce realignment |
|
(757 |
) |
|
|
— |
|
Early contract termination |
|
— |
|
|
|
(800 |
) |
Non-interest expense (non-GAAP) |
$ |
122,194 |
|
|
$ |
123,010 |
|
|
|
|
|
Non-interest expense ratio (GAAP) |
|
1.53 |
% |
|
|
1.73 |
% |
Adjusted non-interest expense ratio (non-GAAP) |
|
1.51 |
% |
|
|
1.69 |
% |
|
|
|
|
Adjusted efficiency
ratio: |
|
|
|
Non-interest expense (non-GAAP) |
$ |
122,194 |
|
|
$ |
123,010 |
|
|
|
|
|
Net interest income (GAAP) |
$ |
175,865 |
|
|
$ |
196,603 |
|
Total non-interest income (GAAP) |
|
2,751 |
|
|
|
13,934 |
|
Non-routine transactions: |
|
|
|
Net effect of sale and call of securities |
|
15,227 |
|
|
|
559 |
|
Net effect of sale of other assets |
|
(2,931 |
) |
|
|
(356 |
) |
Total revenue (non-GAAP) |
$ |
190,912 |
|
|
$ |
210,740 |
|
|
|
|
|
Efficiency ratio (GAAP) |
|
69.28 |
% |
|
|
59.71 |
% |
Adjusted efficiency ratio (non-GAAP) |
|
64.01 |
% |
|
|
58.37 |
% |
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