Kearny Financial Corp. Announces First Quarter Fiscal 2024 Results and Declaration of Cash Dividend
October 26 2023 - 8:30AM
Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the
holding company of Kearny Bank (the “Bank”), reported net income
for the quarter ended September 30, 2023 of $9.8 million, or
$0.16 per diluted share, compared to $12.0 million, or $0.19 per
diluted share, for the quarter ended June 30, 2023.
The Company also announced that its Board of
Directors has declared a quarterly cash dividend of $0.11 per
share, payable on November 22, 2023, to stockholders of record
as of November 8, 2023.
Craig L. Montanaro, President and Chief
Executive Officer, commented, “In the face of ongoing industry-wide
macro-economic headwinds we continue to execute strategies to
mitigate risk, manage our operating expenses and support the
long-term franchise value of the Company. To that end, this quarter
we de-levered our balance sheet by an additional $90 million,
meaningfully slowed net interest margin compression and continued
to focus on building high-value loan and deposit relationships. To
further support these efforts we have formed a new Corporate
Banking division under the executive leadership of our Chief
Banking Officer, Anthony Bilotta. This division has been staffed
with seasoned banking professionals whose sole focus is the
origination of stable, long-term, non-interest-bearing deposits of
corporate clients.”
Mr. Montanaro continued, “I am further pleased
to announce that, subsequent to quarter end, we launched our
enhanced digital banking platform, which expands our client-facing
online and mobile capabilities while providing a state-of-the-art
user experience. Our continued focus on digital engagement
complements our high-touch, personalized service model and allows
us to expand our brand into new markets in an efficient and
cost-effective manner.”
Balance Sheet
- Total assets were
$7.97 billion at September 30, 2023, a decrease of $89.9
million, or 1.1%, from June 30, 2023.
- Investment
securities totaled $1.36 billion at September 30, 2023, a
decrease of $14.8 million, or 1.1%, from June 30, 2023.
- Loans receivable
totaled $5.74 billion at September 30, 2023, a decrease of
$93.4 million, or 1.6%, from June 30, 2023. The decrease for
the quarter was largely driven by decreases in multi-family and
nonresidential mortgage loans.
- Deposits were $5.43
billion at September 30, 2023, a decrease of $195.0 million,
or 3.5%, from June 30, 2023. The decrease in deposits was
largely concentrated in retail and brokered certificates of
deposits and consumer savings.
- The aggregate
amount of uninsured deposits was $1.73 billion at
September 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 $683.3 million, or 12.6% of total deposits.
- Borrowings were
$1.63 billion at September 30, 2023, an increase of $120.1
million, or 8.0%, from June 30, 2023. The increase in
borrowings was driven by an increase in advances from the Federal
Home Loan Bank of New York and resulted from the deposit decline
previously disclosed.
- At
September 30, 2023, the Company maintained available secured
borrowing capacity of $2.09 billion, of which
$1.65 billion was immediately accessible via in-place
collateral and $444.3 million represented the market value of
unpledged securities.
Earnings
Performance Highlights
- Return on average
assets was 0.49% and 0.59% for the quarters ended
September 30, 2023 and June 30, 2023, respectively.
- Return on average
equity was 4.57% and 5.58% for the quarters ended
September 30, 2023 and June 30, 2023, respectively.
- Return on average
tangible equity was 6.07% and 7.41% for the quarters ended
September 30, 2023 and June 30, 2023, respectively.
Net Interest Income and Net Interest
Margin
- Net interest margin
contracted one basis point to 2.10% for the quarter ended
September 30, 2023. The decrease for the quarter was driven by
an increase in the cost of interest-bearing liabilities and a
decrease in the average balance of interest-earning assets, largely
offset by a higher average yield on interest-earning assets.
- For the quarter
ended September 30, 2023, net interest income decreased $1.0
million to $39.2 million from $40.2 million for the quarter ended
June 30, 2023. Included in net interest income for the
quarters ended September 30, 2023 and June 30, 2023,
respectively, was purchase accounting accretion of $650,000 and
$887,000, and loan prepayment penalty income of $267,000 and
$185,000.
Non-Interest Income
- For the quarter
ended September 30, 2023, non-interest income increased
$344,000 from the quarter ended June 30, 2023 to $4.0 million. The
increase was primarily attributable to higher income from the
investment services division and the impact of a loss on the sale
of real estate during the prior comparative period.
Non-Interest Expense
- For the quarter
ended September 30, 2023, non-interest expense increased $1.0
million, or 3.5%, to $29.8 million from $28.8 million for the
quarter ended June 30, 2023. The increase was primarily
attributable to a $446,000 increase in compensation expense and a
$205,000 increase in real estate owned expenses, partially offset
by a $104,000 decrease in occupancy expense attributable to our
previously announced branch closures.
- Equipment and
systems expense increased $290,000 from the quarter ended June 30,
2023 due to a non-recurring vendor expense credit that was recorded
in the prior comparative period.
- The efficiency and
non-interest expense ratios were 68.97% and 1.49%, respectively,
for the quarter ended September 30, 2023, as compared to
65.60% and 1.41%, respectively, for the quarter ended June 30,
2023.
Income Taxes
- Income tax expense
totaled $3.3 million for the quarter ended September 30, 2023
compared to $3.4 million for the quarter ended June 30, 2023,
resulting in an effective tax rate of 25.2% and 21.9%,
respectively. The effective tax rate for the current quarter was
elevated due to the discrete tax cost associated with the vesting
of certain stock-based compensation awards.
Asset Quality
- The balance of
non-performing assets decreased $4.7 million to $50.9 million, or
0.64% of total assets, at September 30, 2023, from $55.6
million, or 0.69% of total assets, at June 30, 2023.
- Net charge-offs
totaled $2.1 million, or 0.15% of average loans, on an annualized
basis, for the quarter ended September 30, 2023, compared to
$82,000, or 0.01% of average loans, on an annualized basis, for the
quarter ended June 30, 2023. All of the charge-offs recorded
during the quarter ended September 30, 2023 had previously
been individually reserved for within the allowance for credit
losses.
- For the quarter
ended September 30, 2023, the Company recorded a provision for
credit losses of $245,000, compared to a reversal of credit losses
of $306,000 for the quarter ended June 30, 2023. The provision
for credit loss expense for the quarter ended September 30,
2023 was largely driven by an increase in reserves on individually
analyzed loans and a slower prepayment rate assumption, partially
offset by a decrease in the balance of loans receivable.
- The allowance for
credit losses was $46.9 million, or 0.81% of total loans, at
September 30, 2023, compared to $48.7 million, or 0.83% of
total loans, at June 30, 2023.
Capital
- During the quarter
ended September 30, 2023, the Company repurchased 817,607
shares of common stock at a cost of $6.4 million, or $7.84 per
share.
- For the quarter
ended September 30, 2023, book value per share decreased
$0.16, or 1.2%, to $13.04 while tangible book value per share
decreased $0.19, or 1.9%, to $9.77. These decreases were largely
driven by an increase in accumulated other comprehensive loss.
- At
September 30, 2023, total stockholders’ equity included
after-tax net unrealized losses on securities available for sale of
$131.4 million, partially offset by after-tax unrealized gains
on derivatives of $44.8 million. After-tax net unrecognized
losses on securities held to maturity of $14.7 million were
not reflected in total stockholders’ equity.
- At
September 30, 2023, the Company’s tangible equity to tangible
assets ratio equaled 8.20% and the regulatory capital ratios of
both the Company and the Bank were in excess of the levels required
by federal banking regulators to be classified as
“well-capitalized” under regulatory guidelines.
This earnings release should be read in
conjunction with Kearny Financial Corp.’s Q1 2024 Investor
Presentation, a copy of which is available through the Investor
Relations link located at the bottom of the page of our website at
www.kearnybank.com and via a Current Report on Form 8-K on the
website of the Securities and Exchange Commission at
www.sec.gov.
Statements contained in this news release that
are not historical facts are forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents
filed by the Company with the Securities and Exchange Commission
from time to time. The Company does not undertake and specifically
disclaims any obligation to update any forward-looking statement,
whether written or oral, that may be made from time to time by or
on behalf of the Company.
Category: Earnings
|
Linked-Quarter Comparative Financial Analysis |
Kearny Financial
Corp.Consolidated Balance Sheets
|
(Dollars and Shares in Thousands,Except Per Share Data) |
September 30,2023 |
June 30,2023 |
Variance or Change |
Variance or Change Pct. |
|
|
(Unaudited) |
(Audited) |
|
|
| Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
57,219 |
|
$ |
70,515 |
|
$ |
(13,296 |
) |
-18.9 |
% |
| Securities available for
sale |
|
1,215,633 |
|
|
1,227,729 |
|
|
(12,096 |
) |
-1.0 |
% |
| Securities held to
maturity |
|
143,730 |
|
|
146,465 |
|
|
(2,735 |
) |
-1.9 |
% |
| Loans held-for-sale |
|
3,934 |
|
|
9,591 |
|
|
(5,657 |
) |
-59.0 |
% |
| Loans receivable |
|
5,736,049 |
|
|
5,829,421 |
|
|
(93,372 |
) |
-1.6 |
% |
|
Less: allowance for credit losses on loans |
|
(46,872 |
) |
|
(48,734 |
) |
|
(1,862 |
) |
-3.8 |
% |
|
Net loans receivable |
|
5,689,177 |
|
|
5,780,687 |
|
|
(91,510 |
) |
-1.6 |
% |
| Premises and equipment |
|
46,868 |
|
|
48,309 |
|
|
(1,441 |
) |
-3.0 |
% |
| Federal Home Loan Bank
stock |
|
81,509 |
|
|
71,734 |
|
|
9,775 |
|
13.6 |
% |
| Accrued interest
receivable |
|
29,766 |
|
|
28,133 |
|
|
1,633 |
|
5.8 |
% |
| Goodwill |
|
210,895 |
|
|
210,895 |
|
|
— |
|
— |
% |
| Core deposit intangible |
|
2,323 |
|
|
2,457 |
|
|
(134 |
) |
-5.5 |
% |
| Bank owned life insurance |
|
294,491 |
|
|
292,825 |
|
|
1,666 |
|
0.6 |
% |
| Deferred income taxes,
net |
|
56,500 |
|
|
51,973 |
|
|
4,527 |
|
8.7 |
% |
| Other real estate owned |
|
12,956 |
|
|
12,956 |
|
|
— |
|
— |
% |
| Other assets |
|
129,865 |
|
|
110,546 |
|
|
19,319 |
|
17.5 |
% |
|
Total assets |
$ |
7,974,866 |
|
$ |
8,064,815 |
|
$ |
(89,949 |
) |
-1.1 |
% |
| |
|
|
|
|
|
Liabilities |
|
|
|
|
| Deposits: |
|
|
|
|
|
Non-interest-bearing |
$ |
595,141 |
|
$ |
609,999 |
|
$ |
(14,858 |
) |
-2.4 |
% |
|
Interest-bearing |
|
4,839,027 |
|
|
5,019,184 |
|
|
(180,157 |
) |
-3.6 |
% |
|
Total deposits |
|
5,434,168 |
|
|
5,629,183 |
|
|
(195,015 |
) |
-3.5 |
% |
| Borrowings |
|
1,626,933 |
|
|
1,506,812 |
|
|
120,121 |
|
8.0 |
% |
| Advance payments by borrowers
for taxes |
|
16,907 |
|
|
18,338 |
|
|
(1,431 |
) |
-7.8 |
% |
| Other liabilities |
|
47,324 |
|
|
41,198 |
|
|
6,126 |
|
14.9 |
% |
|
Total liabilities |
|
7,125,332 |
|
|
7,195,531 |
|
|
(70,199 |
) |
-1.0 |
% |
| |
|
|
|
|
| Stockholders'
Equity |
|
|
|
|
| Common stock |
|
652 |
|
|
659 |
|
|
(7 |
) |
-1.1 |
% |
| Paid-in capital |
|
497,269 |
|
|
503,332 |
|
|
(6,063 |
) |
-1.2 |
% |
| Retained earnings |
|
460,464 |
|
|
457,611 |
|
|
2,853 |
|
0.6 |
% |
| Unearned ESOP shares |
|
(22,375 |
) |
|
(22,862 |
) |
|
487 |
|
2.1 |
% |
| Accumulated other
comprehensive loss |
|
(86,476 |
) |
|
(69,456 |
) |
|
(17,020 |
) |
-24.5 |
% |
|
Total stockholders' equity |
|
849,534 |
|
|
869,284 |
|
|
(19,750 |
) |
-2.3 |
% |
|
Total liabilities and stockholders' equity |
$ |
7,974,866 |
|
$ |
8,064,815 |
|
$ |
(89,949 |
) |
-1.1 |
% |
| |
|
|
|
|
| Consolidated capital
ratios |
|
|
|
|
|
Equity to assets |
|
10.65 |
% |
|
10.78 |
% |
|
-0.13 |
% |
|
|
Tangible equity to tangible assets (1) |
|
8.20 |
% |
|
8.35 |
% |
|
-0.15 |
% |
|
| |
|
|
|
|
| Share
data |
|
|
|
|
|
Outstanding shares |
|
65,132 |
|
|
65,864 |
|
|
(732 |
) |
-1.1 |
% |
|
Book value per share |
$ |
13.04 |
|
$ |
13.20 |
|
$ |
(0.16 |
) |
-1.2 |
% |
|
Tangible book value per share (2) |
$ |
9.77 |
|
$ |
9.96 |
|
$ |
(0.19 |
) |
-1.9 |
% |
|
_________________________ |
|
(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. |
|
September 30,2023 |
June 30,2023 |
|
Interest income |
|
|
|
|
|
Loans |
$ |
62,769 |
|
$ |
62,044 |
|
$ |
725 |
|
1.2 |
% |
|
Taxable investment securities |
|
16,265 |
|
|
15,736 |
|
|
529 |
|
3.4 |
% |
|
Tax-exempt investment securities |
|
87 |
|
|
91 |
|
|
(4 |
) |
-4.4 |
% |
|
Other interest-earning assets |
|
2,047 |
|
|
1,821 |
|
|
226 |
|
12.4 |
% |
|
Total interest income |
|
81,168 |
|
|
79,692 |
|
|
1,476 |
|
1.9 |
% |
| |
|
|
|
|
| Interest
expense |
|
|
|
|
|
Deposits |
|
27,567 |
|
|
26,226 |
|
|
1,341 |
|
5.1 |
% |
|
Borrowings |
|
14,441 |
|
|
13,286 |
|
|
1,155 |
|
8.7 |
% |
|
Total interest expense |
|
42,008 |
|
|
39,512 |
|
|
2,496 |
|
6.3 |
% |
|
Net interest income |
|
39,160 |
|
|
40,180 |
|
|
(1,020 |
) |
-2.5 |
% |
| Provision for (reversal of)
credit losses |
|
245 |
|
|
(306 |
) |
|
551 |
|
-180.1 |
% |
|
Net interest income after provision for (reversal of)
credit losses |
|
38,915 |
|
|
40,486 |
|
|
(1,571 |
) |
-3.9 |
% |
| |
|
|
|
|
| Non-interest
income |
|
|
|
|
|
Fees and service charges |
|
748 |
|
|
699 |
|
|
49 |
|
7.0 |
% |
|
Gain on sale of loans |
|
215 |
|
|
199 |
|
|
16 |
|
8.0 |
% |
|
Loss on sale of other real estate owned |
|
— |
|
|
(139 |
) |
|
139 |
|
100.0 |
% |
|
Income from bank owned life insurance |
|
1,666 |
|
|
1,605 |
|
|
61 |
|
3.8 |
% |
|
Electronic banking fees and charges |
|
367 |
|
|
399 |
|
|
(32 |
) |
-8.0 |
% |
|
Other income |
|
1,014 |
|
|
903 |
|
|
111 |
|
12.3 |
% |
|
Total non-interest income |
|
4,010 |
|
|
3,666 |
|
|
344 |
|
9.4 |
% |
| |
|
|
|
|
| Non-interest
expense |
|
|
|
|
|
Salaries and employee benefits |
|
17,761 |
|
|
17,315 |
|
|
446 |
|
2.6 |
% |
|
Net occupancy expense of premises |
|
2,758 |
|
|
2,862 |
|
|
(104 |
) |
-3.6 |
% |
|
Equipment and systems |
|
3,801 |
|
|
3,511 |
|
|
290 |
|
8.3 |
% |
|
Advertising and marketing |
|
228 |
|
|
231 |
|
|
(3 |
) |
-1.3 |
% |
|
Federal deposit insurance premium |
|
1,524 |
|
|
1,455 |
|
|
69 |
|
4.7 |
% |
|
Directors' compensation |
|
393 |
|
|
345 |
|
|
48 |
|
13.9 |
% |
|
Other expense |
|
3,309 |
|
|
3,042 |
|
|
267 |
|
8.8 |
% |
|
Total non-interest expense |
|
29,774 |
|
|
28,761 |
|
|
1,013 |
|
3.5 |
% |
|
Income before income taxes |
|
13,151 |
|
|
15,391 |
|
|
(2,240 |
) |
-14.6 |
% |
|
Income taxes |
|
3,309 |
|
|
3,378 |
|
|
(69 |
) |
-2.0 |
% |
|
Net income |
$ |
9,842 |
|
$ |
12,013 |
|
$ |
(2,171 |
) |
-18.1 |
% |
| |
|
|
|
|
| Net income per common
share (EPS) |
|
|
|
|
|
Basic |
$ |
0.16 |
|
$ |
0.19 |
|
$ |
(0.03 |
) |
|
|
Diluted |
$ |
0.16 |
|
$ |
0.19 |
|
$ |
(0.03 |
) |
|
| |
|
|
|
|
| Dividends
declared |
|
|
|
|
|
Cash dividends declared per common share |
$ |
0.11 |
|
$ |
0.11 |
|
$ |
— |
|
|
|
Cash dividends declared |
$ |
6,989 |
|
$ |
7,007 |
|
$ |
(18 |
) |
|
|
Dividend payout ratio |
|
71.0 |
% |
|
58.3 |
% |
|
12.7 |
% |
|
| |
|
|
|
|
| Weighted average
number of common shares outstanding |
|
|
|
|
|
Basic |
|
63,014 |
|
|
63,667 |
|
|
(653 |
) |
|
|
Diluted |
|
63,061 |
|
|
63,667 |
|
|
(606 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Average Balance Sheet
Data(Unaudited)
|
(Dollars in Thousands) |
Three Months Ended |
Variance or Change |
Variance or Change Pct. |
|
September 30,2023 |
June 30,2023 |
|
Assets |
|
|
|
|
| Interest-earning assets: |
|
|
|
|
|
Loans receivable, including loans held for sale |
$ |
5,788,074 |
|
$ |
5,932,541 |
|
$ |
(144,467 |
) |
-2.4 |
% |
|
Taxable investment securities |
|
1,516,393 |
|
|
1,529,582 |
|
|
(13,189 |
) |
-0.9 |
% |
|
Tax-exempt investment securities |
|
15,483 |
|
|
16,346 |
|
|
(863 |
) |
-5.3 |
% |
|
Other interest-earning assets |
|
130,829 |
|
|
128,158 |
|
|
2,671 |
|
2.1 |
% |
|
Total interest-earning assets |
|
7,450,779 |
|
|
7,606,627 |
|
|
(155,848 |
) |
-2.0 |
% |
| Non-interest-earning
assets |
|
568,723 |
|
|
556,962 |
|
|
11,761 |
|
2.1 |
% |
|
Total assets |
$ |
8,019,502 |
|
$ |
8,163,589 |
|
$ |
(144,087 |
) |
-1.8 |
% |
| |
|
|
|
|
| Liabilities and
Stockholders' Equity |
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Interest-bearing demand |
$ |
2,245,831 |
|
$ |
2,321,120 |
|
$ |
(75,289 |
) |
-3.2 |
% |
|
Savings |
|
719,508 |
|
|
774,854 |
|
|
(55,346 |
) |
-7.1 |
% |
|
Certificates of deposit |
|
1,968,512 |
|
|
2,057,818 |
|
|
(89,306 |
) |
-4.3 |
% |
|
Total interest-bearing deposits |
|
4,933,851 |
|
|
5,153,792 |
|
|
(219,941 |
) |
-4.3 |
% |
|
Borrowings: |
|
|
|
|
|
Federal Home Loan Bank advances |
|
1,386,473 |
|
|
1,374,316 |
|
|
12,157 |
|
0.9 |
% |
|
Other borrowings |
|
158,098 |
|
|
100,055 |
|
|
58,043 |
|
58.0 |
% |
|
Total borrowings |
|
1,544,571 |
|
|
1,474,371 |
|
|
70,200 |
|
4.8 |
% |
|
Total interest-bearing liabilities |
|
6,478,422 |
|
|
6,628,163 |
|
|
(149,741 |
) |
-2.3 |
% |
| Non-interest-bearing
liabilities: |
|
|
|
|
|
Non-interest-bearing deposits |
|
612,251 |
|
|
608,765 |
|
|
3,486 |
|
0.6 |
% |
|
Other non-interest-bearing liabilities |
|
66,701 |
|
|
64,970 |
|
|
1,731 |
|
2.7 |
% |
|
Total non-interest-bearing liabilities |
|
678,952 |
|
|
673,735 |
|
|
5,217 |
|
0.8 |
% |
|
Total liabilities |
|
7,157,374 |
|
|
7,301,898 |
|
|
(144,524 |
) |
-2.0 |
% |
| Stockholders' equity |
|
862,128 |
|
|
861,691 |
|
|
437 |
|
0.1 |
% |
|
Total liabilities and stockholders' equity |
$ |
8,019,502 |
|
$ |
8,163,589 |
|
$ |
(144,087 |
) |
-1.8 |
% |
| |
|
|
|
|
|
Average interest-earning assets to average interest-bearing
liabilities |
|
115.01 |
% |
|
114.76 |
% |
|
0.25 |
% |
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Performance Ratio
Highlights(Unaudited)
|
|
Three Months Ended |
Variance or Change |
|
|
September 30,2023 |
June 30,2023 |
| Average yield on
interest-earning assets: |
|
|
|
|
Loans receivable, including loans held for sale |
4.34 |
% |
4.18 |
% |
0.16 |
% |
|
Taxable investment securities |
4.29 |
% |
4.12 |
% |
0.17 |
% |
|
Tax-exempt investment securities (1) |
2.25 |
% |
2.23 |
% |
0.02 |
% |
|
Other interest-earning assets |
6.26 |
% |
5.68 |
% |
0.58 |
% |
|
Total interest-earning assets |
4.36 |
% |
4.19 |
% |
0.17 |
% |
| |
|
|
|
| Average cost of
interest-bearing liabilities: |
|
|
|
|
Deposits: |
|
|
|
|
Interest-bearing demand |
2.58 |
% |
2.38 |
% |
0.20 |
% |
|
Savings |
0.47 |
% |
0.48 |
% |
-0.01 |
% |
|
Certificates of deposit |
2.49 |
% |
2.24 |
% |
0.25 |
% |
|
Total interest-bearing deposits |
2.23 |
% |
2.04 |
% |
0.19 |
% |
|
Borrowings: |
|
|
|
|
Federal Home Loan Bank advances |
3.54 |
% |
3.51 |
% |
0.03 |
% |
|
Other borrowings |
5.46 |
% |
4.89 |
% |
0.57 |
% |
|
Total borrowings |
3.74 |
% |
3.60 |
% |
0.14 |
% |
|
Total interest-bearing liabilities |
2.59 |
% |
2.38 |
% |
0.21 |
% |
| |
|
|
|
|
Interest rate spread (2) |
1.77 |
% |
1.81 |
% |
-0.04 |
% |
|
Net interest margin (3) |
2.10 |
% |
2.11 |
% |
-0.01 |
% |
| |
|
|
|
|
Non-interest income to average assets (annualized) |
0.20 |
% |
0.18 |
% |
0.02 |
% |
|
Non-interest expense to average assets (annualized) |
1.49 |
% |
1.41 |
% |
0.08 |
% |
| |
|
|
|
|
Efficiency ratio (4) |
68.97 |
% |
65.60 |
% |
3.37 |
% |
| |
|
|
|
|
Return on average assets (annualized) |
0.49 |
% |
0.59 |
% |
-0.10 |
% |
|
Return on average equity (annualized) |
4.57 |
% |
5.58 |
% |
-1.01 |
% |
|
Return on average tangible equity (annualized) (5) |
6.07 |
% |
7.41 |
% |
-1.34 |
% |
|
_________________________ |
|
(1) |
The yield on tax-exempt investment securities has not been adjusted
to reflect their tax-effective yield. |
| (2) |
Interest income divided by
average interest-earning assets less interest expense divided by
average interest-bearing liabilities. |
| (3) |
Net interest income divided by
average interest-earning assets. |
| (4) |
Non-interest expense divided by
the sum of net interest income and non-interest income. |
| (5) |
Average tangible equity equals
total average stockholders’ equity reduced by average goodwill and
average core deposit intangible assets. |
|
Five-Quarter Financial Trend Analysis |
Kearny Financial
Corp.Consolidated Balance Sheets
|
(Dollars and Shares in Thousands,Except Per Share Data) |
September 30,2023 |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
|
|
(Unaudited) |
(Audited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
| Assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
57,219 |
|
$ |
70,515 |
|
$ |
194,568 |
|
$ |
75,660 |
|
$ |
96,076 |
|
| Securities available for
sale |
|
1,215,633 |
|
|
1,227,729 |
|
|
1,267,066 |
|
|
1,286,354 |
|
|
1,263,176 |
|
| Securities held to
maturity |
|
143,730 |
|
|
146,465 |
|
|
149,764 |
|
|
153,786 |
|
|
115,943 |
|
| Loans held-for-sale |
|
3,934 |
|
|
9,591 |
|
|
5,401 |
|
|
12,940 |
|
|
12,936 |
|
| Loans receivable |
|
5,736,049 |
|
|
5,829,421 |
|
|
5,966,325 |
|
|
5,984,133 |
|
|
5,656,370 |
|
|
Less: allowance for credit losses on loans |
|
(46,872 |
) |
|
(48,734 |
) |
|
(49,122 |
) |
|
(48,877 |
) |
|
(47,613 |
) |
|
Net loans receivable |
|
5,689,177 |
|
|
5,780,687 |
|
|
5,917,203 |
|
|
5,935,256 |
|
|
5,608,757 |
|
| Premises and equipment |
|
46,868 |
|
|
48,309 |
|
|
49,589 |
|
|
50,953 |
|
|
52,642 |
|
| Federal Home Loan Bank
stock |
|
81,509 |
|
|
71,734 |
|
|
76,319 |
|
|
69,022 |
|
|
44,957 |
|
| Accrued interest
receivable |
|
29,766 |
|
|
28,133 |
|
|
28,794 |
|
|
27,368 |
|
|
23,817 |
|
| Goodwill |
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
| Core deposit intangible |
|
2,323 |
|
|
2,457 |
|
|
2,590 |
|
|
2,732 |
|
|
2,876 |
|
| Bank owned life insurance |
|
294,491 |
|
|
292,825 |
|
|
291,220 |
|
|
289,673 |
|
|
289,690 |
|
| Deferred income taxes,
net |
|
56,500 |
|
|
51,973 |
|
|
53,151 |
|
|
51,107 |
|
|
54,278 |
|
| Other real estate owned |
|
12,956 |
|
|
12,956 |
|
|
13,410 |
|
|
13,410 |
|
|
178 |
|
| Other assets |
|
129,865 |
|
|
110,546 |
|
|
89,366 |
|
|
110,162 |
|
|
113,369 |
|
|
Total assets |
$ |
7,974,866 |
|
$ |
8,064,815 |
|
$ |
8,349,336 |
|
$ |
8,289,318 |
|
$ |
7,889,590 |
|
| |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
Non-interest-bearing |
$ |
595,141 |
|
$ |
609,999 |
|
$ |
617,778 |
|
$ |
650,950 |
|
$ |
683,406 |
|
|
Interest-bearing |
|
4,839,027 |
|
|
5,019,184 |
|
|
5,185,626 |
|
|
5,320,421 |
|
|
5,424,872 |
|
|
Total deposits |
|
5,434,168 |
|
|
5,629,183 |
|
|
5,803,404 |
|
|
5,971,371 |
|
|
6,108,278 |
|
| Borrowings |
|
1,626,933 |
|
|
1,506,812 |
|
|
1,611,692 |
|
|
1,383,573 |
|
|
851,454 |
|
| Advance payments by borrowers
for taxes |
|
16,907 |
|
|
18,338 |
|
|
18,706 |
|
|
17,307 |
|
|
16,555 |
|
| Other liabilities |
|
47,324 |
|
|
41,198 |
|
|
49,304 |
|
|
44,427 |
|
|
38,329 |
|
|
Total liabilities |
|
7,125,332 |
|
|
7,195,531 |
|
|
7,483,106 |
|
|
7,416,678 |
|
|
7,014,616 |
|
| |
|
|
|
|
|
| Stockholders'
Equity |
|
|
|
|
|
| Common stock |
|
652 |
|
|
659 |
|
|
667 |
|
|
674 |
|
|
680 |
|
| Paid-in capital |
|
497,269 |
|
|
503,332 |
|
|
509,359 |
|
|
515,332 |
|
|
520,245 |
|
| Retained earnings |
|
460,464 |
|
|
457,611 |
|
|
452,605 |
|
|
449,489 |
|
|
454,710 |
|
| Unearned ESOP shares |
|
(22,375 |
) |
|
(22,862 |
) |
|
(23,348 |
) |
|
(23,834 |
) |
|
(24,321 |
) |
| Accumulated other
comprehensive loss |
|
(86,476 |
) |
|
(69,456 |
) |
|
(73,053 |
) |
|
(69,021 |
) |
|
(76,340 |
) |
|
Total stockholders' equity |
|
849,534 |
|
|
869,284 |
|
|
866,230 |
|
|
872,640 |
|
|
874,974 |
|
|
Total liabilities and stockholders' equity |
$ |
7,974,866 |
|
$ |
8,064,815 |
|
$ |
8,349,336 |
|
$ |
8,289,318 |
|
$ |
7,889,590 |
|
| |
|
|
|
|
|
| Consolidated capital
ratios |
|
|
|
|
|
|
Equity to assets |
|
10.65 |
% |
|
10.78 |
% |
|
10.37 |
% |
|
10.53 |
% |
|
11.09 |
% |
|
Tangible equity to tangible assets (1) |
|
8.20 |
% |
|
8.35 |
% |
|
8.02 |
% |
|
8.16 |
% |
|
8.61 |
% |
| |
|
|
|
|
|
| Share
data |
|
|
|
|
|
|
Outstanding shares |
|
65,132 |
|
|
65,864 |
|
|
66,680 |
|
|
67,388 |
|
|
67,938 |
|
|
Book value per share |
$ |
13.04 |
|
$ |
13.20 |
|
$ |
12.99 |
|
$ |
12.95 |
|
$ |
12.88 |
|
|
Tangible book value per share (2) |
$ |
9.77 |
|
$ |
9.96 |
|
$ |
9.79 |
|
$ |
9.78 |
|
$ |
9.73 |
|
| _________________________ |
|
(1) |
Tangible equity equals total stockholders' equity reduced by
goodwill and core deposit intangible assets. Tangible assets equals
total assets reduced by goodwill and core deposit intangible
assets. |
| (2) |
Tangible book value equals total
stockholders' equity reduced by goodwill and core deposit
intangible assets. |
| |
|
Kearny Financial
Corp.Supplemental Balance Sheet
Highlights(Unaudited)
|
(Dollars in Thousands) |
September 30,2023 |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
|
Loan portfolio composition: |
|
|
|
|
|
|
Commercial loans: |
|
|
|
|
|
|
Multi-family mortgage |
$ |
2,699,151 |
|
$ |
2,761,775 |
|
$ |
2,835,852 |
|
$ |
2,851,721 |
|
$ |
2,570,297 |
|
|
Nonresidential mortgage |
|
946,801 |
|
|
968,574 |
|
|
1,002,643 |
|
|
1,017,341 |
|
|
1,040,688 |
|
|
Commercial business |
|
149,229 |
|
|
146,861 |
|
|
162,038 |
|
|
177,530 |
|
|
186,361 |
|
|
Construction |
|
230,703 |
|
|
226,609 |
|
|
215,524 |
|
|
186,663 |
|
|
166,052 |
|
|
Total commercial loans |
|
4,025,884 |
|
|
4,103,819 |
|
|
4,216,057 |
|
|
4,233,255 |
|
|
3,963,398 |
|
|
One- to four-family residential mortgage |
|
1,689,051 |
|
|
1,700,559 |
|
|
1,713,343 |
|
|
1,719,514 |
|
|
1,666,730 |
|
|
Consumer loans: |
|
|
|
|
|
|
Home equity loans |
|
42,896 |
|
|
43,549 |
|
|
44,376 |
|
|
45,690 |
|
|
43,269 |
|
|
Other consumer |
|
2,644 |
|
|
2,549 |
|
|
2,592 |
|
|
2,648 |
|
|
2,869 |
|
|
Total consumer loans |
|
45,540 |
|
|
46,098 |
|
|
46,968 |
|
|
48,338 |
|
|
46,138 |
|
|
Total loans, excluding yield adjustments |
|
5,760,475 |
|
|
5,850,476 |
|
|
5,976,368 |
|
|
6,001,107 |
|
|
5,676,266 |
|
|
Unaccreted yield adjustments |
|
(24,426 |
) |
|
(21,055 |
) |
|
(10,043 |
) |
|
(16,974 |
) |
|
(19,896 |
) |
|
Loans receivable, net of yield adjustments |
|
5,736,049 |
|
|
5,829,421 |
|
|
5,966,325 |
|
|
5,984,133 |
|
|
5,656,370 |
|
|
Less: allowance for credit losses on loans |
|
(46,872 |
) |
|
(48,734 |
) |
|
(49,122 |
) |
|
(48,877 |
) |
|
(47,613 |
) |
|
Net loans receivable |
$ |
5,689,177 |
|
$ |
5,780,687 |
|
$ |
5,917,203 |
|
$ |
5,935,256 |
|
$ |
5,608,757 |
|
| |
|
|
|
|
|
| Asset
quality: |
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
Accruing loans - 90 days and over past due |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Nonaccrual loans |
|
37,912 |
|
|
42,627 |
|
|
44,026 |
|
|
40,549 |
|
|
68,574 |
|
|
Total nonperforming loans |
|
37,912 |
|
|
42,627 |
|
|
44,026 |
|
|
40,549 |
|
|
68,574 |
|
|
Nonaccrual loans held-for-sale |
|
— |
|
|
— |
|
|
— |
|
|
8,650 |
|
|
8,650 |
|
|
Other real estate owned |
|
12,956 |
|
|
12,956 |
|
|
13,410 |
|
|
13,410 |
|
|
178 |
|
|
Total nonperforming assets |
$ |
50,868 |
|
$ |
55,583 |
|
$ |
57,436 |
|
$ |
62,609 |
|
$ |
77,402 |
|
|
|
|
|
|
|
|
|
Nonperforming loans (% total loans) |
|
0.66 |
% |
|
0.73 |
% |
|
0.74 |
% |
|
0.68 |
% |
|
1.21 |
% |
|
Nonperforming assets (% total assets) |
|
0.64 |
% |
|
0.69 |
% |
|
0.69 |
% |
|
0.76 |
% |
|
0.98 |
% |
|
|
|
|
|
|
|
|
Classified loans |
$ |
98,616 |
|
$ |
93,526 |
|
$ |
103,461 |
|
$ |
86,069 |
|
$ |
92,610 |
|
| |
|
|
|
|
|
|
Allowance for credit losses on loans (ACL): |
|
|
|
|
|
|
ACL to total loans |
|
0.81 |
% |
|
0.83 |
% |
|
0.82 |
% |
|
0.81 |
% |
|
0.84 |
% |
|
ACL to nonperforming loans |
|
123.63 |
% |
|
114.33 |
% |
|
111.57 |
% |
|
120.54 |
% |
|
69.43 |
% |
|
Net charge-offs |
$ |
2,107 |
|
$ |
82 |
|
$ |
206 |
|
$ |
407 |
|
$ |
115 |
|
|
Average net charge-off rate (annualized) |
|
0.15 |
% |
|
0.01 |
% |
|
0.01 |
% |
|
0.03 |
% |
|
0.01 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Supplemental Balance Sheet
Highlights(Unaudited)
|
(Dollars in Thousands) |
September 30,2023 |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
|
Funding composition: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Non-interest-bearing deposits |
$ |
595,141 |
|
$ |
609,999 |
|
$ |
617,778 |
|
$ |
650,950 |
|
$ |
683,406 |
|
|
Interest-bearing demand |
|
2,236,573 |
|
|
2,252,912 |
|
|
2,285,799 |
|
|
2,316,485 |
|
|
2,382,411 |
|
|
Savings |
|
689,163 |
|
|
748,721 |
|
|
811,483 |
|
|
901,514 |
|
|
982,916 |
|
|
Certificates of deposit (retail) |
|
1,300,382 |
|
|
1,377,028 |
|
|
1,327,343 |
|
|
1,354,907 |
|
|
1,263,124 |
|
|
Certificates of deposit (brokered and listing service) |
|
612,909 |
|
|
640,523 |
|
|
761,001 |
|
|
747,515 |
|
|
796,421 |
|
|
Interest-bearing deposits |
|
4,839,027 |
|
|
5,019,184 |
|
|
5,185,626 |
|
|
5,320,421 |
|
|
5,424,872 |
|
|
Total deposits |
|
5,434,168 |
|
|
5,629,183 |
|
|
5,803,404 |
|
|
5,971,371 |
|
|
6,108,278 |
|
|
|
|
|
|
|
|
|
Borrowings: |
|
|
|
|
|
|
Federal Home Loan Bank advances |
|
1,456,933 |
|
|
1,281,812 |
|
|
1,156,692 |
|
|
1,256,573 |
|
|
796,454 |
|
|
Overnight borrowings |
|
170,000 |
|
|
225,000 |
|
|
455,000 |
|
|
127,000 |
|
|
55,000 |
|
|
Total borrowings |
|
1,626,933 |
|
|
1,506,812 |
|
|
1,611,692 |
|
|
1,383,573 |
|
|
851,454 |
|
|
|
|
|
|
|
|
|
Total funding |
$ |
7,061,101 |
|
$ |
7,135,995 |
|
$ |
7,415,096 |
|
$ |
7,354,944 |
|
$ |
6,959,732 |
|
|
|
|
|
|
|
|
|
Loans as a % of deposits |
|
104.8 |
% |
|
102.9 |
% |
|
102.1 |
% |
|
99.6 |
% |
|
92.0 |
% |
|
Deposits as a % of total funding |
|
77.0 |
% |
|
78.9 |
% |
|
78.3 |
% |
|
81.2 |
% |
|
87.8 |
% |
|
Borrowings as a % of total funding |
|
23.0 |
% |
|
21.1 |
% |
|
21.7 |
% |
|
18.8 |
% |
|
12.2 |
% |
|
|
|
|
|
|
|
| Uninsured
deposits: |
|
|
|
|
|
|
Uninsured deposits (reported) (1) |
$ |
1,734,288 |
|
$ |
1,771,416 |
|
$ |
1,678,051 |
|
$ |
1,815,854 |
|
$ |
1,771,851 |
|
|
Uninsured deposits (adjusted) (2) |
$ |
683,265 |
|
$ |
710,377 |
|
$ |
705,727 |
|
$ |
794,407 |
|
$ |
883,351 |
|
| _________________________ |
|
(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) |
September 30,2023 |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
|
Interest income |
|
|
|
|
|
|
Loans |
$ |
62,769 |
|
$ |
62,044 |
|
$ |
60,172 |
|
$ |
57,996 |
|
$ |
52,935 |
|
|
Taxable investment securities |
|
16,265 |
|
|
15,736 |
|
|
15,459 |
|
|
13,221 |
|
|
10,439 |
|
|
Tax-exempt investment securities |
|
87 |
|
|
91 |
|
|
99 |
|
|
219 |
|
|
285 |
|
|
Other interest-earning assets |
|
2,047 |
|
|
1,821 |
|
|
1,441 |
|
|
1,005 |
|
|
761 |
|
|
Total interest income |
|
81,168 |
|
|
79,692 |
|
|
77,171 |
|
|
72,441 |
|
|
64,420 |
|
|
|
|
|
|
|
|
| Interest
expense |
|
|
|
|
|
|
Deposits |
|
27,567 |
|
|
26,226 |
|
|
22,246 |
|
|
18,822 |
|
|
10,869 |
|
|
Borrowings |
|
14,441 |
|
|
13,286 |
|
|
12,554 |
|
|
8,836 |
|
|
5,020 |
|
|
Total interest expense |
|
42,008 |
|
|
39,512 |
|
|
34,800 |
|
|
27,658 |
|
|
15,889 |
|
|
Net interest income |
|
39,160 |
|
|
40,180 |
|
|
42,371 |
|
|
44,783 |
|
|
48,531 |
|
| Provision for (reversal of)
credit losses |
|
245 |
|
|
(306 |
) |
|
451 |
|
|
1,671 |
|
|
670 |
|
|
Net interest income after provision for (reversal of)
credit losses |
|
38,915 |
|
|
40,486 |
|
|
41,920 |
|
|
43,112 |
|
|
47,861 |
|
|
|
|
|
|
|
|
| Non-interest
income |
|
|
|
|
|
|
Fees and service charges |
|
748 |
|
|
699 |
|
|
910 |
|
|
734 |
|
|
763 |
|
|
Loss on sale and call of securities |
|
— |
|
|
— |
|
|
— |
|
|
(15,227 |
) |
|
— |
|
|
Gain (loss) on sale of loans |
|
215 |
|
|
199 |
|
|
(2,373 |
) |
|
134 |
|
|
395 |
|
|
Loss on sale of other real estate owned |
|
— |
|
|
(139 |
) |
|
— |
|
|
— |
|
|
— |
|
|
Income from bank owned life insurance |
|
1,666 |
|
|
1,605 |
|
|
1,581 |
|
|
1,761 |
|
|
3,698 |
|
|
Electronic banking fees and charges |
|
367 |
|
|
399 |
|
|
457 |
|
|
397 |
|
|
506 |
|
|
Other income |
|
1,014 |
|
|
903 |
|
|
1,071 |
|
|
3,723 |
|
|
555 |
|
|
Total non-interest income |
|
4,010 |
|
|
3,666 |
|
|
1,646 |
|
|
(8,478 |
) |
|
5,917 |
|
|
|
|
|
|
|
|
| Non-interest
expense |
|
|
|
|
|
|
Salaries and employee benefits |
|
17,761 |
|
|
17,315 |
|
|
18,005 |
|
|
19,921 |
|
|
20,348 |
|
|
Net occupancy expense of premises |
|
2,758 |
|
|
2,862 |
|
|
3,097 |
|
|
2,987 |
|
|
3,090 |
|
|
Equipment and systems |
|
3,801 |
|
|
3,511 |
|
|
3,537 |
|
|
3,867 |
|
|
3,662 |
|
|
Advertising and marketing |
|
228 |
|
|
231 |
|
|
413 |
|
|
731 |
|
|
747 |
|
|
Federal deposit insurance premium |
|
1,524 |
|
|
1,455 |
|
|
1,546 |
|
|
1,226 |
|
|
906 |
|
|
Directors' compensation |
|
393 |
|
|
345 |
|
|
340 |
|
|
339 |
|
|
340 |
|
|
Other expense |
|
3,309 |
|
|
3,042 |
|
|
3,414 |
|
|
3,579 |
|
|
2,895 |
|
|
Total non-interest expense |
|
29,774 |
|
|
28,761 |
|
|
30,352 |
|
|
32,650 |
|
|
31,988 |
|
|
Income before income taxes |
|
13,151 |
|
|
15,391 |
|
|
13,214 |
|
|
1,984 |
|
|
21,790 |
|
|
Income taxes |
|
3,309 |
|
|
3,378 |
|
|
2,902 |
|
|
33 |
|
|
5,255 |
|
|
Net income |
$ |
9,842 |
|
$ |
12,013 |
|
$ |
10,312 |
|
$ |
1,951 |
|
$ |
16,535 |
|
|
|
|
|
|
|
|
| Net income per common
share (EPS) |
|
|
|
|
|
|
Basic |
$ |
0.16 |
|
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
|
Diluted |
$ |
0.16 |
|
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
|
|
|
|
|
|
|
| Dividends
declared |
|
|
|
|
|
|
Cash dividends declared per common share |
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
|
Cash dividends declared |
$ |
6,989 |
|
$ |
7,007 |
|
$ |
7,196 |
|
$ |
7,172 |
|
$ |
7,276 |
|
|
Dividend payout ratio |
|
71.0 |
% |
|
58.3 |
% |
|
69.8 |
% |
|
367.6 |
% |
|
44.0 |
% |
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding |
|
|
|
|
|
|
Basic |
|
63,014 |
|
|
63,667 |
|
|
64,769 |
|
|
65,030 |
|
|
65,737 |
|
|
Diluted |
|
63,061 |
|
|
63,667 |
|
|
64,783 |
|
|
65,038 |
|
|
65,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Average Balance Sheet
Data(Unaudited)
| |
Three Months Ended |
|
(Dollars in Thousands) |
September 30,2023 |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
|
Assets |
|
|
|
|
|
| Interest-earning assets: |
|
|
|
|
|
|
Loans receivable, including loans held-for-sale |
$ |
5,788,074 |
|
$ |
5,932,541 |
|
$ |
5,986,669 |
|
$ |
5,839,903 |
|
$ |
5,553,996 |
|
|
Taxable investment securities |
|
1,516,393 |
|
|
1,529,582 |
|
|
1,558,222 |
|
|
1,527,578 |
|
|
1,516,974 |
|
|
Tax-exempt investment securities |
|
15,483 |
|
|
16,346 |
|
|
17,663 |
|
|
37,917 |
|
|
48,973 |
|
|
Other interest-earning assets |
|
130,829 |
|
|
128,158 |
|
|
131,682 |
|
|
114,175 |
|
|
88,038 |
|
|
Total interest-earning assets |
|
7,450,779 |
|
|
7,606,627 |
|
|
7,694,236 |
|
|
7,519,573 |
|
|
7,207,981 |
|
| Non-interest-earning
assets |
|
568,723 |
|
|
556,962 |
|
|
575,009 |
|
|
550,519 |
|
|
570,225 |
|
|
Total assets |
$ |
8,019,502 |
|
$ |
8,163,589 |
|
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
7,778,206 |
|
|
|
|
|
|
|
|
| Liabilities and
Stockholders' Equity |
|
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Interest-bearing demand |
$ |
2,245,831 |
|
$ |
2,321,120 |
|
$ |
2,363,762 |
|
$ |
2,359,977 |
|
$ |
2,354,340 |
|
|
Savings |
|
719,508 |
|
|
774,854 |
|
|
858,673 |
|
|
931,584 |
|
|
1,019,343 |
|
|
Certificates of deposit |
|
1,968,512 |
|
|
2,057,818 |
|
|
2,069,396 |
|
|
2,192,722 |
|
|
2,014,922 |
|
|
Total interest-bearing deposits |
|
4,933,851 |
|
|
5,153,792 |
|
|
5,291,831 |
|
|
5,484,283 |
|
|
5,388,605 |
|
|
Borrowings: |
|
|
|
|
|
|
Federal Home Loan Bank advances |
|
1,386,473 |
|
|
1,374,316 |
|
|
1,402,269 |
|
|
997,148 |
|
|
642,399 |
|
|
Other borrowings |
|
158,098 |
|
|
100,055 |
|
|
1,611 |
|
|
— |
|
|
127,456 |
|
|
Total borrowings |
|
1,544,571 |
|
|
1,474,371 |
|
|
1,403,880 |
|
|
997,148 |
|
|
769,855 |
|
|
Total interest-bearing liabilities |
|
6,478,422 |
|
|
6,628,163 |
|
|
6,695,711 |
|
|
6,481,431 |
|
|
6,158,460 |
|
| Non-interest-bearing
liabilities: |
|
|
|
|
|
|
Non-interest-bearing deposits |
|
612,251 |
|
|
608,765 |
|
|
634,324 |
|
|
666,846 |
|
|
667,624 |
|
|
Other non-interest-bearing liabilities |
|
66,701 |
|
|
64,970 |
|
|
60,327 |
|
|
56,721 |
|
|
56,431 |
|
|
Total non-interest-bearing liabilities |
|
678,952 |
|
|
673,735 |
|
|
694,651 |
|
|
723,567 |
|
|
724,055 |
|
|
Total liabilities |
|
7,157,374 |
|
|
7,301,898 |
|
|
7,390,362 |
|
|
7,204,998 |
|
|
6,882,515 |
|
| Stockholders' equity |
|
862,128 |
|
|
861,691 |
|
|
878,883 |
|
|
865,094 |
|
|
895,691 |
|
|
Total liabilities and stockholders' equity |
$ |
8,019,502 |
|
$ |
8,163,589 |
|
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
7,778,206 |
|
|
|
|
|
|
|
|
|
Average interest-earning assets to average interest-bearing
liabilities |
|
115.01 |
% |
|
114.76 |
% |
|
114.91 |
% |
|
116.02 |
% |
|
117.04 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kearny Financial
Corp.Performance Ratio Highlights
| |
Three Months Ended |
|
|
September 30,2023 |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
|
Average yield on interest-earning assets: |
|
|
|
|
|
|
Loans receivable, including loans held-for-sale |
4.34 |
% |
4.18 |
% |
4.02 |
% |
3.97 |
% |
3.81 |
% |
|
Taxable investment securities |
4.29 |
% |
4.12 |
% |
3.97 |
% |
3.46 |
% |
2.75 |
% |
|
Tax-exempt investment securities (1) |
2.25 |
% |
2.23 |
% |
2.23 |
% |
2.32 |
% |
2.33 |
% |
|
Other interest-earning assets |
6.26 |
% |
5.68 |
% |
4.38 |
% |
3.52 |
% |
3.46 |
% |
|
Total interest-earning assets |
4.36 |
% |
4.19 |
% |
4.01 |
% |
3.85 |
% |
3.57 |
% |
|
|
|
|
|
|
|
| Average cost of
interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Interest-bearing demand |
2.58 |
% |
2.38 |
% |
2.01 |
% |
1.63 |
% |
0.92 |
% |
|
Savings |
0.47 |
% |
0.48 |
% |
0.41 |
% |
0.41 |
% |
0.23 |
% |
|
Certificates of deposit |
2.49 |
% |
2.24 |
% |
1.84 |
% |
1.50 |
% |
0.97 |
% |
|
Total interest-bearing deposits |
2.23 |
% |
2.04 |
% |
1.68 |
% |
1.37 |
% |
0.81 |
% |
|
Borrowings: |
|
|
|
|
|
|
Federal Home Loan Bank advances |
3.54 |
% |
3.51 |
% |
3.58 |
% |
3.54 |
% |
2.68 |
% |
|
Other borrowings |
5.46 |
% |
4.89 |
% |
5.15 |
% |
— |
% |
2.26 |
% |
|
Total borrowings |
3.74 |
% |
3.60 |
% |
3.58 |
% |
3.54 |
% |
2.61 |
% |
|
Total interest-bearing liabilities |
2.59 |
% |
2.38 |
% |
2.08 |
% |
1.71 |
% |
1.03 |
% |
|
|
|
|
|
|
|
|
Interest rate spread (2) |
1.77 |
% |
1.81 |
% |
1.93 |
% |
2.14 |
% |
2.54 |
% |
|
Net interest margin (3) |
2.10 |
% |
2.11 |
% |
2.20 |
% |
2.38 |
% |
2.69 |
% |
|
|
|
|
|
|
|
|
Non-interest income to average assets (annualized) |
0.20 |
% |
0.18 |
% |
0.08 |
% |
-0.42 |
% |
0.30 |
% |
|
Non-interest expense to average assets (annualized) |
1.49 |
% |
1.41 |
% |
1.47 |
% |
1.62 |
% |
1.65 |
% |
|
|
|
|
|
|
|
|
Efficiency ratio (4) |
68.97 |
% |
65.60 |
% |
68.96 |
% |
89.93 |
% |
58.75 |
% |
|
|
|
|
|
|
|
|
Return on average assets (annualized) |
0.49 |
% |
0.59 |
% |
0.50 |
% |
0.10 |
% |
0.85 |
% |
|
Return on average equity (annualized) |
4.57 |
% |
5.58 |
% |
4.69 |
% |
0.90 |
% |
7.38 |
% |
|
Return on average tangible equity (annualized) (5) |
6.07 |
% |
7.41 |
% |
6.20 |
% |
1.20 |
% |
9.70 |
% |
| _________________________ |
| (1) |
The yield on tax-exempt investment securities has not been adjusted
to reflect their tax-effective yield. |
| (2) |
Interest income divided by
average interest-earning assets less interest expense divided by
average interest-bearing liabilities. |
| (3) |
Net interest income divided by
average interest-earning assets. |
| (4) |
Non-interest expense divided by
the sum of net interest income and non-interest income. |
| (5) |
Average tangible equity equals
total average stockholders’ equity reduced by average goodwill and
average core deposit intangible assets. |
| |
|
The following tables provide a reconciliation of
certain financial measures calculated in accordance with Generally
Accepted Accounting Principles (“GAAP”) (as reported) and non-GAAP
measures. These non-GAAP measures provide additional information
which allow readers to evaluate the ongoing performance of the
Company. They are not a substitute for GAAP measures; they should
be read and used in conjunction with the Company’s GAAP financial
information. In all cases, it should be understood that non-GAAP
per share measures do not depict amounts that accrue directly to
the benefit of shareholders.
Kearny Financial
Corp.Reconciliation of GAAP to
Non-GAAP(Unaudited)
|
|
Three Months Ended |
|
(Dollars and Shares in Thousands,Except Per Share Data) |
September 30,2023 |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
|
Adjusted net income: |
|
|
|
|
|
|
Net income (GAAP) |
$ |
9,842 |
|
$ |
12,013 |
|
$ |
10,312 |
|
$ |
1,951 |
|
$ |
16,535 |
|
|
Non-recurring transactions - net of tax: |
|
|
|
|
|
|
Branch consolidation expenses |
|
— |
|
|
— |
|
|
568 |
|
|
— |
|
|
— |
|
|
Net effect of sale and call of securities |
|
— |
|
|
— |
|
|
— |
|
|
10,811 |
|
|
— |
|
|
Net effect of sale of other assets |
|
— |
|
|
— |
|
|
— |
|
|
(2,081 |
) |
|
— |
|
|
Severance expense from workforce realignment |
|
— |
|
|
— |
|
|
— |
|
|
538 |
|
|
— |
|
|
Adjusted net income |
$ |
9,842 |
|
$ |
12,013 |
|
$ |
10,880 |
|
$ |
11,219 |
|
$ |
16,535 |
|
|
|
|
|
|
|
|
| Calculation of
pre-tax, pre-provision net revenue: |
|
|
|
|
|
|
Net income (GAAP) |
$ |
9,842 |
|
$ |
12,013 |
|
$ |
10,312 |
|
$ |
1,951 |
|
$ |
16,535 |
|
|
Adjustments to net income (GAAP): |
|
|
|
|
|
|
Provision for income taxes |
|
3,309 |
|
|
3,378 |
|
|
2,902 |
|
|
33 |
|
|
5,255 |
|
|
Provision for (reversal of) credit losses |
|
245 |
|
|
(306 |
) |
|
451 |
|
|
1,671 |
|
|
670 |
|
|
Pre-tax, pre-provision net revenue (non-GAAP) |
$ |
13,396 |
|
$ |
15,085 |
|
$ |
13,665 |
|
$ |
3,655 |
|
$ |
22,460 |
|
|
|
|
|
|
|
|
| Adjusted earnings per
share: |
|
|
|
|
|
|
Weighted average common shares - basic |
|
63,014 |
|
|
63,667 |
|
|
64,769 |
|
|
65,030 |
|
|
65,737 |
|
|
Weighted average common shares - diluted |
|
63,061 |
|
|
63,667 |
|
|
64,783 |
|
|
65,038 |
|
|
65,756 |
|
|
|
|
|
|
|
|
|
Earnings per share - basic (GAAP) |
$ |
0.16 |
|
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
|
Earnings per share - diluted (GAAP) |
$ |
0.16 |
|
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
Adjusted earnings per share - basic (non-GAAP) |
$ |
0.16 |
|
$ |
0.19 |
|
$ |
0.17 |
|
$ |
0.17 |
|
$ |
0.25 |
|
|
Adjusted earnings per share - diluted (non-GAAP) |
$ |
0.16 |
|
$ |
0.19 |
|
$ |
0.17 |
|
$ |
0.17 |
|
$ |
0.25 |
|
|
|
|
|
|
|
|
| Pre-tax, pre-provision
net revenue per share: |
|
|
|
|
|
|
Pre-tax, pre-provision net revenue per share - basic
(non-GAAP) |
$ |
0.21 |
|
$ |
0.24 |
|
$ |
0.21 |
|
$ |
0.06 |
|
$ |
0.34 |
|
|
Pre-tax, pre-provision net revenue per share - diluted
(non-GAAP) |
$ |
0.21 |
|
$ |
0.24 |
|
$ |
0.21 |
|
$ |
0.06 |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
| Adjusted return on
average assets: |
|
|
|
|
|
|
Total average assets |
$ |
8,019,502 |
|
$ |
8,163,589 |
|
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
7,778,206 |
|
|
|
|
|
|
|
|
|
Return on average assets (GAAP) |
|
0.49 |
% |
|
0.59 |
% |
|
0.50 |
% |
|
0.10 |
% |
|
0.85 |
% |
|
Adjusted return on average assets (non-GAAP) |
|
0.49 |
% |
|
0.59 |
% |
|
0.53 |
% |
|
0.56 |
% |
|
0.85 |
% |
|
|
|
|
|
|
|
| Adjusted return on
average equity: |
|
|
|
|
|
|
Total average equity |
$ |
862,128 |
|
$ |
861,691 |
|
$ |
878,883 |
|
$ |
865,094 |
|
$ |
895,691 |
|
|
|
|
|
|
|
|
|
Return on average equity (GAAP) |
|
4.57 |
% |
|
5.58 |
% |
|
4.69 |
% |
|
0.90 |
% |
|
7.38 |
% |
|
Adjusted return on average equity (non-GAAP) |
|
4.57 |
% |
|
5.58 |
% |
|
4.95 |
% |
|
5.19 |
% |
|
7.38 |
% |
Kearny Financial
Corp.Reconciliation of GAAP to
Non-GAAP(Unaudited)
|
|
Three Months Ended |
|
(Dollars and Shares in Thousands,Except Per Share Data) |
September 30,2023 |
June 30,2023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
|
Adjusted return on average tangible equity: |
|
|
|
|
|
|
Total average equity |
$ |
862,128 |
|
$ |
861,691 |
|
$ |
878,883 |
|
$ |
865,094 |
|
$ |
895,691 |
|
| Less: average goodwill |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
| Less: average other intangible
assets |
|
(2,411 |
) |
|
(2,544 |
) |
|
(2,683 |
) |
|
(2,826 |
) |
|
(2,971 |
) |
| Total average tangible
equity |
$ |
648,822 |
|
$ |
648,252 |
|
$ |
665,305 |
|
$ |
651,373 |
|
$ |
681,825 |
|
| |
|
|
|
|
|
| Return on average tangible
equity (non-GAAP) |
|
6.07 |
% |
|
7.41 |
% |
|
6.20 |
% |
|
1.20 |
% |
|
9.70 |
% |
| Adjusted return on average
tangible equity (non-GAAP) |
|
6.07 |
% |
|
7.41 |
% |
|
6.54 |
% |
|
6.89 |
% |
|
9.70 |
% |
| |
|
|
|
|
|
| Adjusted non-interest
expense ratio: |
|
|
|
|
|
| Non-interest expense
(GAAP) |
$ |
29,774 |
|
$ |
28,761 |
|
$ |
30,352 |
|
$ |
32,650 |
|
$ |
31,988 |
|
| Non-recurring
transactions: |
|
|
|
|
|
| Branch consolidation
expenses |
|
— |
|
|
— |
|
|
(800 |
) |
|
— |
|
|
— |
|
| Severance expense from
workforce realignment |
|
— |
|
|
— |
|
|
— |
|
|
(757 |
) |
|
— |
|
| Early contract
termination |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Non-interest expense
(non-GAAP) |
$ |
29,774 |
|
$ |
28,761 |
|
$ |
29,552 |
|
$ |
31,893 |
|
$ |
31,988 |
|
| |
|
|
|
|
|
| Non-interest expense ratio
(GAAP) |
|
1.49 |
% |
|
1.41 |
% |
|
1.47 |
% |
|
1.62 |
% |
|
1.65 |
% |
| Adjusted non-interest expense
ratio (non-GAAP) |
|
1.49 |
% |
|
1.41 |
% |
|
1.43 |
% |
|
1.58 |
% |
|
1.65 |
% |
| |
|
|
|
|
|
| Adjusted efficiency
ratio: |
|
|
|
|
|
| Non-interest expense
(non-GAAP) |
$ |
29,774 |
|
$ |
28,761 |
|
$ |
29,552 |
|
$ |
31,893 |
|
$ |
31,988 |
|
| |
|
|
|
|
|
| Net interest income
(GAAP) |
$ |
39,160 |
|
$ |
40,180 |
|
$ |
42,371 |
|
$ |
44,783 |
|
$ |
48,531 |
|
| Total non-interest income
(GAAP) |
|
4,010 |
|
|
3,666 |
|
|
1,646 |
|
|
(8,478 |
) |
|
5,917 |
|
| Non-recurring
transactions: |
|
|
|
|
|
| Net effect of sale and call of
securities |
|
— |
|
|
— |
|
|
— |
|
|
15,227 |
|
|
— |
|
| Net effect of sale of other
assets |
|
— |
|
|
— |
|
|
— |
|
|
(2,931 |
) |
|
— |
|
| Total revenue (non-GAAP) |
$ |
43,170 |
|
$ |
43,846 |
|
$ |
44,017 |
|
$ |
48,601 |
|
$ |
54,448 |
|
| |
|
|
|
|
|
| Efficiency ratio (GAAP) |
|
68.97 |
% |
|
65.60 |
% |
|
68.96 |
% |
|
89.93 |
% |
|
58.75 |
% |
| Adjusted efficiency ratio
(non-GAAP) |
|
68.97 |
% |
|
65.60 |
% |
|
67.14 |
% |
|
65.62 |
% |
|
58.75 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
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