Kearny Financial Corp. Announces First Quarter Fiscal 2023 Results and Declaration of Cash Dividend
October 27 2022 - 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, 2022 of $16.5 million, or
$0.25 per diluted share, compared to $11.4 million, or $0.17 per
diluted share, for the quarter ended June 30, 2022.
The Company also announced that its Board of
Directors has declared a quarterly cash dividend of $0.11 per
share, payable on November 23, 2022 to stockholders of record as of
November 9, 2022.
Craig L. Montanaro, President and Chief
Executive Officer, commented, “Despite pressure on net interest
margin, attributable to the rapidly rising interest rate
environment, we delivered impressive results for the quarter.
Growth in loans and deposits remained strong, expenses were well
controlled and asset quality metrics notably improved. Over the
past two quarters, our loan portfolio has grown at a 26% annualized
rate, driven by strong origination volume and slowing prepayment
activity. Looking ahead to the remainder of fiscal 2023, we expect
loan growth to moderate, as we have right-sized our loan pipeline
and are focusing our origination efforts on those loan segments
which provide the greatest risk-adjusted returns.”
Mr. Montanaro further noted, “In recognition of
the risks presented by the prevailing economic and interest rate
environment we continue to position our balance sheet to support
net interest income, and margin, in a variety of interest rate
scenarios. To that end we have, since the start of this fiscal
year, added $600 million of derivative notional and made targeted
adjustments to our wholesale balance sheet designed to reduce risk
and support future earnings.”
Balance Sheet
- Total assets
increased $169.7 million, or 2.2%, to $7.89 billion at
September 30, 2022, from $7.72 billion at June 30,
2022.
- Loans receivable
increased $238.5 million, or 4.4%, to $5.66 billion at
September 30, 2022, from $5.42 billion at June 30,
2022.
- Deposits increased
$246.0 million, or 4.2%, to $6.11 billion at September 30,
2022, from $5.86 billion at June 30, 2022.
Non-interest-bearing deposits increased $29.5 million, or 4.5%, for
the quarter ended September 30, 2022.
- Investment
securities decreased $83.3 million to $1.38 billion, or 17.5% of
total assets, at September 30, 2022, from $1.46 billion, or
18.9% of total assets, at June 30, 2022.
- Borrowings
decreased $49.9 million to $851.5 million, or 10.8% of total
assets, at September 30, 2022, from $901.3 million, or 11.7%
of total assets, at June 30, 2022.
Earnings
Performance Highlights
- Return on average
assets was 0.85% for the quarter ended September 30, 2022
compared to 0.61% for the quarter ended June 30, 2022.
- Return on average
equity was 7.38% and 4.92% for the quarters ended
September 30, 2022 and June 30, 2022, respectively.
Return on average tangible equity was 9.70% and 6.40% for those
same comparative periods.
Net Interest Income and Net Interest
Margin
- Net interest margin
contracted 23 basis points to 2.69% for the quarter ended
September 30, 2022, from 2.92% for the quarter ended
June 30, 2022. The decrease was due largely to an increase in
the cost of interest-bearing liabilities, partially offset by
increases in the average balance and yield on interest-earning
assets.
- Net interest income
decreased $2.1 million to $48.5 million for the quarter ended
September 30, 2022, from $50.6 million for the quarter ended
June 30, 2022. Included in net interest income for the
quarters ended September 30, 2022 and June 30, 2022,
respectively, was purchase accounting accretion of $1.8 million and
$1.6 million, and loan prepayment penalty income of $441,000 and
$869,000.
Non-Interest Income
- Non-interest income
increased $3.1 million to $5.9 million for the quarter ended
September 30, 2022, from $2.8 million for the quarter ended
June 30, 2022. The increase was largely attributable to higher
income from bank owned life insurance that resulted from $2.1
million in payouts on life insurance policies.
- Non-interest income
included no gain or loss on the sale of securities for the quarter
ended September 30, 2022 compared to a loss of $563,000 on the
sale of securities for the quarter ended June 30, 2022.
Non-Interest Expense
- Non-interest
expense decreased $1.6 million to $32.0 million for the quarter
ended September 30, 2022, from $33.6 million for the quarter
ended June 30, 2022. The decrease was primarily attributable
to $1.0 million of non-recurring expenses recorded in the prior
quarter.
- The provision for credit losses on
unfunded commitments, included in other expense, decreased $387,000
for the quarter ended September 30, 2022.
- The efficiency and
non-interest expense ratios were 58.75% and 1.65%, respectively,
for the quarter ended September 30, 2022, as compared to
62.93% and 1.79%, respectively, for the quarter ended June 30,
2022.
Income Taxes
- Income tax expense
totaled $5.3 million for the quarter ended September 30, 2022
compared to $4.2 million for the quarter ended June 30, 2022,
resulting in an effective tax rate of 24.1% and 27.0%,
respectively. The decrease in the effective tax rate primarily
resulted from the payouts on life insurance policies, noted above,
which were not taxable.
Asset Quality
- The balance of
non-performing assets decreased $14.8 million to $77.4 million, or
0.98% of total assets, at September 30, 2022, from $92.2
million, or 1.19% of total assets, at June 30, 2022. The
decrease in non-performing assets was primarily attributable to the
sale of two non-accrual loans that were recorded as held-for-sale
at June 30, 2022.
- Net charge-offs
totaled $115,000, or 0.01% of average loans, on an annualized
basis, for the quarter ended September 30, 2022, compared to
$1.0 million, or 0.08% of average loans, on an annualized basis,
for the quarter ended June 30, 2022.
- For the quarter
ended September 30, 2022, the Company recorded a provision for
credit losses of $670,000, compared to $4.2 million for the quarter
ended June 30, 2022. The provision for the quarter ended
September 30, 2022 was largely driven by loan growth of $238.5
million, partially offset by a reduction in the expected life of
the loan portfolio.
- The allowance for
credit losses was $47.6 million, or 0.84% of total loans, at
September 30, 2022, compared to $47.1 million, or 0.87% of
total loans, at June 30, 2022.
Capital
- For the quarter
ended September 30, 2022, book value per share decreased
$0.14, or 1.1%, to $12.88 and tangible book value per share
decreased $0.17, or 1.7%, to $9.73.
- On August 1, 2022,
the Company announced the authorization of a new stock repurchase
plan, which authorized the repurchase of up to 4,000,000 shares.
During the quarter ended September 30, 2022, the Company
repurchased 759,806 shares of common stock at a cost of $8.7
million, or $11.44 per share.
- At
September 30, 2022, the Company’s tangible equity to tangible
assets ratio equaled 8.61% and the regulatory capital ratios of
both the Company and the Bank were in excess of the levels required
by federal banking regulators to be classified as
“well-capitalized” under regulatory guidelines.
Statements contained in this news release that
are not historical facts are forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents
filed by the Company with the Securities and Exchange Commission
from time to time. The Company does not undertake and specifically
disclaims any obligation to update any forward-looking statement,
whether written or oral, that may be made from time to time by or
on behalf of the Company.
In addition, the COVID-19 pandemic has had, and
may continue to have, an adverse impact on the Company, its clients
and the communities it serves. Given its dynamic nature, it is
difficult to predict the full impact of the COVID-19 pandemic on
our business.
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
|
(Dollars and Shares in Thousands,Except Per Share Data) |
September 30,2022 |
June 30,2022 |
Variance or Change |
Variance or Change Pct. |
|
|
(Unaudited) |
(Audited) |
|
|
| Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
96,076 |
|
$ |
101,615 |
|
$ |
(5,539 |
) |
-5.5 |
% |
| Securities available for
sale |
|
1,263,176 |
|
|
1,344,093 |
|
|
(80,917 |
) |
-6.0 |
% |
| Securities held to
maturity |
|
115,943 |
|
|
118,291 |
|
|
(2,348 |
) |
-2.0 |
% |
| Loans held-for-sale |
|
12,936 |
|
|
28,874 |
|
|
(15,938 |
) |
-55.2 |
% |
| Loans receivable |
|
5,656,370 |
|
|
5,417,845 |
|
|
238,525 |
|
4.4 |
% |
| Less: allowance for credit
losses on loans |
|
(47,613 |
) |
|
(47,058 |
) |
|
555 |
|
1.2 |
% |
| Net loans receivable |
|
5,608,757 |
|
|
5,370,787 |
|
|
237,970 |
|
4.4 |
% |
| Premises and equipment |
|
52,642 |
|
|
53,281 |
|
|
(639 |
) |
-1.2 |
% |
| Federal Home Loan Bank
stock |
|
44,957 |
|
|
47,144 |
|
|
(2,187 |
) |
-4.6 |
% |
| Accrued interest
receivable |
|
23,817 |
|
|
20,466 |
|
|
3,351 |
|
16.4 |
% |
| Goodwill |
|
210,895 |
|
|
210,895 |
|
|
— |
|
— |
% |
| Core deposit intangible |
|
2,876 |
|
|
3,020 |
|
|
(144 |
) |
-4.8 |
% |
| Bank owned life insurance |
|
289,690 |
|
|
289,177 |
|
|
513 |
|
0.2 |
% |
| Deferred income taxes,
net |
|
54,278 |
|
|
49,350 |
|
|
4,928 |
|
10.0 |
% |
| Other real estate owned |
|
178 |
|
|
178 |
|
|
— |
|
— |
% |
| Other assets |
|
113,369 |
|
|
82,712 |
|
|
30,657 |
|
37.1 |
% |
| Total assets |
$ |
7,889,590 |
|
$ |
7,719,883 |
|
$ |
169,707 |
|
2.2 |
% |
| |
|
|
|
|
| Liabilities |
|
|
|
|
| Deposits: |
|
|
|
|
| Non-interest-bearing |
$ |
683,406 |
|
$ |
653,899 |
|
$ |
29,507 |
|
4.5 |
% |
| Interest-bearing |
|
5,424,872 |
|
|
5,208,357 |
|
|
216,515 |
|
4.2 |
% |
| Total deposits |
|
6,108,278 |
|
|
5,862,256 |
|
|
246,022 |
|
4.2 |
% |
| Borrowings |
|
851,454 |
|
|
901,337 |
|
|
(49,883 |
) |
-5.5 |
% |
| Advance payments by borrowers
for taxes |
|
16,555 |
|
|
16,746 |
|
|
(191 |
) |
-1.1 |
% |
| Other liabilities |
|
38,329 |
|
|
45,544 |
|
|
(7,215 |
) |
-15.8 |
% |
| Total liabilities |
|
7,014,616 |
|
|
6,825,883 |
|
|
188,733 |
|
2.8 |
% |
| |
|
|
|
|
| Stockholders' Equity |
|
|
|
|
| Common stock |
|
680 |
|
|
687 |
|
|
(7 |
) |
-1.0 |
% |
| Paid-in capital |
|
520,245 |
|
|
528,396 |
|
|
(8,151 |
) |
-1.5 |
% |
| Retained earnings |
|
454,710 |
|
|
445,451 |
|
|
9,259 |
|
2.1 |
% |
| Unearned ESOP shares |
|
(24,321 |
) |
|
(24,807 |
) |
|
486 |
|
2.0 |
% |
| Accumulated other
comprehensive loss |
|
(76,340 |
) |
|
(55,727 |
) |
|
(20,613 |
) |
-37.0 |
% |
| Total stockholders'
equity |
|
874,974 |
|
|
894,000 |
|
|
(19,026 |
) |
-2.1 |
% |
| Total liabilities and
stockholders' equity |
$ |
7,889,590 |
|
$ |
7,719,883 |
|
$ |
169,707 |
|
2.2 |
% |
| |
|
|
|
|
| Consolidated capital
ratios |
|
|
|
|
| Equity to assets |
|
11.09 |
% |
|
11.58 |
% |
|
-0.49 |
% |
|
| Tangible equity to tangible
assets(1) |
|
8.61 |
% |
|
9.06 |
% |
|
-0.45 |
% |
|
| |
|
|
|
|
| Share data |
|
|
|
|
| Outstanding shares |
|
67,938 |
|
|
68,666 |
|
|
(728 |
) |
-1.1 |
% |
| Book value per share |
$ |
12.88 |
|
$ |
13.02 |
|
$ |
(0.14 |
) |
-1.1 |
% |
| Tangible book value per
share(2) |
$ |
9.73 |
|
$ |
9.90 |
|
$ |
(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. |
|
September 30,2022 |
June 30,2022 |
|
Interest income |
|
|
|
|
|
Loans |
$ |
52,935 |
|
$ |
48,869 |
|
$ |
4,066 |
|
8.3 |
% |
|
Taxable investment securities |
|
10,439 |
|
|
8,915 |
|
|
1,524 |
|
17.1 |
% |
|
Tax-exempt investment securities |
|
285 |
|
|
297 |
|
|
(12 |
) |
-4.0 |
% |
|
Other interest-earning assets |
|
761 |
|
|
472 |
|
|
289 |
|
61.2 |
% |
|
Total interest income |
|
64,420 |
|
|
58,553 |
|
|
5,867 |
|
10.0 |
% |
| |
|
|
|
|
| Interest
expense |
|
|
|
|
|
Deposits |
|
10,869 |
|
|
3,915 |
|
|
6,954 |
|
177.6 |
% |
|
Borrowings |
|
5,020 |
|
|
4,039 |
|
|
981 |
|
24.3 |
% |
|
Total interest expense |
|
15,889 |
|
|
7,954 |
|
|
7,935 |
|
99.8 |
% |
|
Net interest income |
|
48,531 |
|
|
50,599 |
|
|
(2,068 |
) |
-4.1 |
% |
| Provision for credit
losses |
|
670 |
|
|
4,222 |
|
|
(3,552 |
) |
-84.1 |
% |
|
Net interest income after provision for credit
losses |
|
47,861 |
|
|
46,377 |
|
|
1,484 |
|
3.2 |
% |
| |
|
|
|
|
| Non-interest
income |
|
|
|
|
|
Fees and service charges |
|
763 |
|
|
658 |
|
|
105 |
|
16.0 |
% |
|
Loss on sale and call of securities |
|
— |
|
|
(563 |
) |
|
563 |
|
100.0 |
% |
|
Gain on sale of loans |
|
395 |
|
|
187 |
|
|
208 |
|
111.2 |
% |
|
Loss on sale of other real estate owned |
|
— |
|
|
(9 |
) |
|
9 |
|
100.0 |
% |
|
Income from bank owned life insurance |
|
3,698 |
|
|
1,533 |
|
|
2,165 |
|
141.2 |
% |
|
Electronic banking fees and charges |
|
506 |
|
|
366 |
|
|
140 |
|
38.3 |
% |
|
Other income |
|
555 |
|
|
638 |
|
|
(83 |
) |
-13.0 |
% |
|
Total non-interest income |
|
5,917 |
|
|
2,810 |
|
|
3,107 |
|
110.6 |
% |
| |
|
|
|
|
| Non-interest
expense |
|
|
|
|
|
Salaries and employee benefits |
|
20,348 |
|
|
20,367 |
|
|
(19 |
) |
-0.1 |
% |
|
Net occupancy expense of premises |
|
3,090 |
|
|
3,188 |
|
|
(98 |
) |
-3.1 |
% |
|
Equipment and systems |
|
3,662 |
|
|
4,516 |
|
|
(854 |
) |
-18.9 |
% |
|
Advertising and marketing |
|
747 |
|
|
703 |
|
|
44 |
|
6.3 |
% |
|
Federal deposit insurance premium |
|
906 |
|
|
762 |
|
|
144 |
|
18.9 |
% |
|
Directors' compensation |
|
340 |
|
|
340 |
|
|
— |
|
— |
% |
|
Other expense |
|
2,895 |
|
|
3,736 |
|
|
(841 |
) |
-22.5 |
% |
|
Total non-interest expense |
|
31,988 |
|
|
33,612 |
|
|
(1,624 |
) |
-4.8 |
% |
|
Income before income taxes |
|
21,790 |
|
|
15,575 |
|
|
6,215 |
|
39.9 |
% |
|
Income taxes |
|
5,255 |
|
|
4,205 |
|
|
1,050 |
|
25.0 |
% |
|
Net income |
$ |
16,535 |
|
$ |
11,370 |
|
$ |
5,165 |
|
45.4 |
% |
| |
|
|
|
|
| Net income per common
share (EPS) |
|
|
|
|
|
Basic |
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.08 |
|
|
|
Diluted |
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.08 |
|
|
| |
|
|
|
|
| Dividends
declared |
|
|
|
|
|
Cash dividends declared per common share |
$ |
0.11 |
|
$ |
0.11 |
|
$ |
— |
|
|
|
Cash dividends declared |
$ |
7,276 |
|
$ |
7,441 |
|
$ |
(165 |
) |
|
|
Dividend payout ratio |
|
44.0 |
% |
|
65.4 |
% |
(21.4)% |
|
| |
|
|
|
|
| Weighted average
number of common shares outstanding |
|
|
|
|
|
Basic |
|
65,737 |
|
|
67,240 |
|
|
(1,503 |
) |
|
|
Diluted |
|
65,756 |
|
|
67,276 |
|
|
(1,520 |
) |
|
Kearny Financial
Corp.Average Balance Sheet
Data(Unaudited)
|
(Dollars in Thousands) |
Three Months Ended |
Variance or Change |
Variance or Change Pct. |
|
September 30,2022 |
June 30,2022 |
|
Assets |
|
|
|
|
| Interest-earning assets: |
|
|
|
|
|
Loans receivable, including loans held for sale |
$ |
5,553,996 |
|
$ |
5,181,983 |
|
$ |
372,013 |
|
7.2 |
% |
|
Taxable investment securities |
|
1,516,974 |
|
|
1,608,372 |
|
|
(91,398 |
) |
-5.7 |
% |
|
Tax-exempt investment securities |
|
48,973 |
|
|
51,672 |
|
|
(2,699 |
) |
-5.2 |
% |
|
Other interest-earning assets |
|
88,038 |
|
|
87,990 |
|
|
48 |
|
0.1 |
% |
|
Total interest-earning assets |
|
7,207,981 |
|
|
6,930,017 |
|
|
277,964 |
|
4.0 |
% |
| Non-interest-earning
assets |
|
570,225 |
|
|
564,734 |
|
|
5,491 |
|
1.0 |
% |
|
Total assets |
$ |
7,778,206 |
|
$ |
7,494,751 |
|
$ |
283,455 |
|
3.8 |
% |
| |
|
|
|
|
| Liabilities and
Stockholders' Equity |
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Interest-bearing demand |
$ |
2,354,340 |
|
$ |
2,155,946 |
|
$ |
198,394 |
|
9.2 |
% |
|
Savings |
|
1,019,343 |
|
|
1,077,631 |
|
|
(58,288 |
) |
-5.4 |
% |
|
Certificates of deposit |
|
2,014,922 |
|
|
1,701,725 |
|
|
313,197 |
|
18.4 |
% |
|
Total interest-bearing deposits |
|
5,388,605 |
|
|
4,935,302 |
|
|
453,303 |
|
9.2 |
% |
|
Borrowings: |
|
|
|
|
|
Federal Home Loan Bank advances |
|
642,399 |
|
|
752,579 |
|
|
(110,180 |
) |
-14.6 |
% |
|
Other borrowings |
|
127,456 |
|
|
185,901 |
|
|
(58,445 |
) |
-31.4 |
% |
|
Total borrowings |
|
769,855 |
|
|
938,480 |
|
|
(168,625 |
) |
-18.0 |
% |
|
Total interest-bearing liabilities |
|
6,158,460 |
|
|
5,873,782 |
|
|
284,678 |
|
4.8 |
% |
| Non-interest-bearing
liabilities: |
|
|
|
|
|
Non-interest-bearing deposits |
|
667,624 |
|
|
640,200 |
|
|
27,424 |
|
4.3 |
% |
|
Other non-interest-bearing liabilities |
|
56,431 |
|
|
56,636 |
|
|
(205 |
) |
-0.4 |
% |
|
Total non-interest-bearing liabilities |
|
724,055 |
|
|
696,836 |
|
|
27,219 |
|
3.9 |
% |
|
Total liabilities |
|
6,882,515 |
|
|
6,570,618 |
|
|
311,897 |
|
4.7 |
% |
| Stockholders' equity |
|
895,691 |
|
|
924,133 |
|
|
(28,442 |
) |
-3.1 |
% |
|
Total liabilities and stockholders' equity |
$ |
7,778,206 |
|
$ |
7,494,751 |
|
$ |
283,455 |
|
3.8 |
% |
| |
|
|
|
|
|
Average interest-earning assets to average interest-bearing
liabilities |
|
117.04 |
% |
|
117.98 |
% |
|
-0.94 |
% |
-0.8 |
% |
Kearny Financial
Corp.Performance Ratio
Highlights(Unaudited)
|
|
Three Months Ended |
Variance or Change |
|
|
September 30,2022 |
June 30,2022 |
| Average yield on
interest-earning assets: |
|
|
|
|
Loans receivable, including loans held for sale |
3.81 |
% |
3.77 |
% |
0.04 |
% |
|
Taxable investment securities |
2.75 |
% |
2.22 |
% |
0.53 |
% |
|
Tax-exempt investment securities (1) |
2.33 |
% |
2.30 |
% |
0.03 |
% |
|
Other interest-earning assets |
3.46 |
% |
2.15 |
% |
1.31 |
% |
|
Total interest-earning assets |
3.57 |
% |
3.38 |
% |
0.19 |
% |
| |
|
|
|
| Average cost of
interest-bearing liabilities: |
|
|
|
|
Deposits: |
|
|
|
|
Interest-bearing demand |
0.92 |
% |
0.31 |
% |
0.61 |
% |
|
Savings |
0.23 |
% |
0.11 |
% |
0.12 |
% |
|
Certificates of deposit |
0.97 |
% |
0.46 |
% |
0.51 |
% |
|
Total interest-bearing deposits |
0.81 |
% |
0.32 |
% |
0.49 |
% |
|
Borrowings: |
|
|
|
|
Federal Home Loan Bank advances |
2.68 |
% |
1.96 |
% |
0.72 |
% |
|
Other borrowings |
2.26 |
% |
0.77 |
% |
1.49 |
% |
|
Total borrowings |
2.61 |
% |
1.72 |
% |
0.89 |
% |
|
Total interest-bearing liabilities |
1.03 |
% |
0.54 |
% |
0.49 |
% |
| |
|
|
|
|
Interest rate spread (2) |
2.54 |
% |
2.84 |
% |
-0.30 |
% |
|
Net interest margin (3) |
2.69 |
% |
2.92 |
% |
-0.23 |
% |
| |
|
|
|
|
Non-interest income to average assets (annualized) |
0.30 |
% |
0.15 |
% |
0.15 |
% |
|
Non-interest expense to average assets (annualized) |
1.65 |
% |
1.79 |
% |
-0.14 |
% |
|
|
|
|
|
|
Efficiency ratio (4) |
58.75 |
% |
62.93 |
% |
-4.18 |
% |
|
|
|
|
|
|
Return on average assets (annualized) |
0.85 |
% |
0.61 |
% |
0.24 |
% |
|
Return on average equity (annualized) |
7.38 |
% |
4.92 |
% |
2.46 |
% |
|
Return on average tangible equity (annualized) (5) |
9.70 |
% |
6.40 |
% |
3.30 |
% |
_________________________
| (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 30,2022 |
June 30,2022 |
March 31,2022 |
December 31,2021 |
September 30,2021 |
|
|
(Unaudited) |
(Audited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
| Assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
96,076 |
|
$ |
101,615 |
|
$ |
62,379 |
|
$ |
60,452 |
|
$ |
54,070 |
|
| Securities available for
sale |
|
1,263,176 |
|
|
1,344,093 |
|
|
1,526,086 |
|
|
1,591,066 |
|
|
1,651,156 |
|
| Securities held to
maturity |
|
115,943 |
|
|
118,291 |
|
|
121,853 |
|
|
53,142 |
|
|
37,497 |
|
| Loans held-for-sale |
|
12,936 |
|
|
28,874 |
|
|
2,822 |
|
|
12,549 |
|
|
12,884 |
|
| Loans receivable |
|
5,656,370 |
|
|
5,417,845 |
|
|
5,003,201 |
|
|
4,826,404 |
|
|
4,789,339 |
|
|
Less: allowance for credit losses on loans |
|
(47,613 |
) |
|
(47,058 |
) |
|
(43,860 |
) |
|
(48,216 |
) |
|
(51,785 |
) |
|
Net loans receivable |
|
5,608,757 |
|
|
5,370,787 |
|
|
4,959,341 |
|
|
4,778,188 |
|
|
4,737,554 |
|
| Premises and equipment |
|
52,642 |
|
|
53,281 |
|
|
53,727 |
|
|
54,067 |
|
|
55,236 |
|
| Federal Home Loan Bank
stock |
|
44,957 |
|
|
47,144 |
|
|
30,997 |
|
|
36,622 |
|
|
36,615 |
|
| Accrued interest
receivable |
|
23,817 |
|
|
20,466 |
|
|
19,517 |
|
|
18,495 |
|
|
19,541 |
|
| Goodwill |
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
| Core deposit intangible |
|
2,876 |
|
|
3,020 |
|
|
3,166 |
|
|
3,344 |
|
|
3,524 |
|
| Bank owned life insurance |
|
289,690 |
|
|
289,177 |
|
|
287,644 |
|
|
286,433 |
|
|
284,871 |
|
| Deferred income taxes,
net |
|
54,278 |
|
|
49,350 |
|
|
34,349 |
|
|
25,709 |
|
|
27,771 |
|
| Other real estate owned |
|
178 |
|
|
178 |
|
|
401 |
|
|
658 |
|
|
178 |
|
| Other assets |
|
113,369 |
|
|
82,712 |
|
|
76,714 |
|
|
54,603 |
|
|
51,896 |
|
|
Total assets |
$ |
7,889,590 |
|
$ |
7,719,883 |
|
$ |
7,389,891 |
|
$ |
7,186,223 |
|
$ |
7,183,688 |
|
| |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
Non-interest-bearing |
$ |
683,406 |
|
$ |
653,899 |
|
$ |
621,954 |
|
$ |
604,805 |
|
$ |
631,344 |
|
|
Interest-bearing |
|
5,424,872 |
|
|
5,208,357 |
|
|
4,906,708 |
|
|
4,849,220 |
|
|
4,763,795 |
|
|
Total deposits |
|
6,108,278 |
|
|
5,862,256 |
|
|
5,528,662 |
|
|
5,454,025 |
|
|
5,395,139 |
|
| Borrowings |
|
851,454 |
|
|
901,337 |
|
|
851,220 |
|
|
686,105 |
|
|
720,990 |
|
| Advance payments by borrowers
for taxes |
|
16,555 |
|
|
16,746 |
|
|
16,979 |
|
|
16,772 |
|
|
16,222 |
|
| Other liabilities |
|
38,329 |
|
|
45,544 |
|
|
37,861 |
|
|
33,851 |
|
|
36,914 |
|
|
Total liabilities |
|
7,014,616 |
|
|
6,825,883 |
|
|
6,434,722 |
|
|
6,190,753 |
|
|
6,169,265 |
|
| |
|
|
|
|
|
| Stockholders'
Equity |
|
|
|
|
|
| Common stock |
|
680 |
|
|
687 |
|
|
714 |
|
|
735 |
|
|
758 |
|
| Paid-in capital |
|
520,245 |
|
|
528,396 |
|
|
561,176 |
|
|
587,392 |
|
|
616,894 |
|
| Retained earnings |
|
454,710 |
|
|
445,451 |
|
|
441,522 |
|
|
431,549 |
|
|
420,701 |
|
| Unearned ESOP shares |
|
(24,321 |
) |
|
(24,807 |
) |
|
(25,294 |
) |
|
(25,780 |
) |
|
(26,266 |
) |
| Accumulated other
comprehensive (loss) income |
|
(76,340 |
) |
|
(55,727 |
) |
|
(22,949 |
) |
|
1,574 |
|
|
2,336 |
|
|
Total stockholders' equity |
|
874,974 |
|
|
894,000 |
|
|
955,169 |
|
|
995,470 |
|
|
1,014,423 |
|
|
Total liabilities and stockholders' equity |
$ |
7,889,590 |
|
$ |
7,719,883 |
|
$ |
7,389,891 |
|
$ |
7,186,223 |
|
$ |
7,183,688 |
|
| |
|
|
|
|
|
| Consolidated capital
ratios |
|
|
|
|
|
|
Equity to assets |
|
11.09 |
% |
|
11.58 |
% |
|
12.93 |
% |
|
13.85 |
% |
|
14.12 |
% |
|
Tangible equity to tangible assets(1) |
|
8.61 |
% |
|
9.06 |
% |
|
10.33 |
% |
|
11.21 |
% |
|
11.48 |
% |
| |
|
|
|
|
|
| Share
data |
|
|
|
|
|
|
Outstanding shares |
|
67,938 |
|
|
68,666 |
|
|
71,424 |
|
|
73,453 |
|
|
75,800 |
|
|
Book value per share |
$ |
12.88 |
|
$ |
13.02 |
|
$ |
13.37 |
|
$ |
13.55 |
|
$ |
13.38 |
|
|
Tangible book value per share(2) |
$ |
9.73 |
|
$ |
9.90 |
|
$ |
10.38 |
|
$ |
10.64 |
|
$ |
10.55 |
|
_________________________
| (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 30,2022 |
June 30,2022 |
March 31,2022 |
December 31,2021 |
September 30,2021 |
|
Loan portfolio composition: |
|
|
|
|
|
|
Commercial loans: |
|
|
|
|
|
|
Multi-family mortgage |
$ |
2,570,297 |
|
$ |
2,409,090 |
|
$ |
2,076,003 |
|
$ |
2,007,431 |
|
$ |
1,978,681 |
|
|
Nonresidential mortgage |
|
1,040,688 |
|
|
1,019,838 |
|
|
1,085,988 |
|
|
1,026,447 |
|
|
1,023,391 |
|
|
Commercial business |
|
186,361 |
|
|
176,807 |
|
|
169,551 |
|
|
180,429 |
|
|
169,392 |
|
|
Construction |
|
166,052 |
|
|
140,131 |
|
|
121,137 |
|
|
110,703 |
|
|
112,226 |
|
|
Total commercial loans |
|
3,963,398 |
|
|
3,745,866 |
|
|
3,452,679 |
|
|
3,325,010 |
|
|
3,283,690 |
|
|
One- to four-family residential mortgage |
|
1,666,730 |
|
|
1,645,816 |
|
|
1,527,980 |
|
|
1,477,267 |
|
|
1,483,106 |
|
|
Consumer loans: |
|
|
|
|
|
|
Home equity loans |
|
43,269 |
|
|
42,028 |
|
|
41,501 |
|
|
43,934 |
|
|
44,912 |
|
|
Other consumer |
|
2,869 |
|
|
2,866 |
|
|
2,755 |
|
|
3,040 |
|
|
3,020 |
|
|
Total consumer loans |
|
46,138 |
|
|
44,894 |
|
|
44,256 |
|
|
46,974 |
|
|
47,932 |
|
|
Total loans, excluding yield adjustments |
|
5,676,266 |
|
|
5,436,576 |
|
|
5,024,915 |
|
|
4,849,251 |
|
|
4,814,728 |
|
|
Unaccreted yield adjustments |
|
(19,896 |
) |
|
(18,731 |
) |
|
(21,714 |
) |
|
(22,847 |
) |
|
(25,389 |
) |
|
Loans receivable, net of yield adjustments |
|
5,656,370 |
|
|
5,417,845 |
|
|
5,003,201 |
|
|
4,826,404 |
|
|
4,789,339 |
|
|
Less: allowance for credit losses on loans |
|
(47,613 |
) |
|
(47,058 |
) |
|
(43,860 |
) |
|
(48,216 |
) |
|
(51,785 |
) |
|
Net loans receivable |
$ |
5,608,757 |
|
$ |
5,370,787 |
|
$ |
4,959,341 |
|
$ |
4,778,188 |
|
$ |
4,737,554 |
|
| |
|
|
|
|
|
| Asset
quality: |
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
Accruing loans - 90 days and over past due |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Nonaccrual loans |
|
68,574 |
|
|
70,321 |
|
|
80,595 |
|
|
72,138 |
|
|
72,945 |
|
|
Total nonperforming loans |
|
68,574 |
|
|
70,321 |
|
|
80,595 |
|
|
72,138 |
|
|
72,945 |
|
|
Nonaccrual loans held-for-sale |
|
8,650 |
|
|
21,745 |
|
|
— |
|
|
— |
|
|
— |
|
|
Other real estate owned |
|
178 |
|
|
178 |
|
|
401 |
|
|
658 |
|
|
178 |
|
|
Total nonperforming assets |
$ |
77,402 |
|
$ |
92,244 |
|
$ |
80,996 |
|
$ |
72,796 |
|
$ |
73,123 |
|
|
|
|
|
|
|
|
|
Nonperforming loans (% total loans) |
|
1.21 |
% |
|
1.30 |
% |
|
1.61 |
% |
|
1.49 |
% |
|
1.52 |
% |
|
Nonperforming assets (% total assets) |
|
0.98 |
% |
|
1.19 |
% |
|
1.10 |
% |
|
1.01 |
% |
|
1.02 |
% |
|
|
|
|
|
|
|
|
Classified loans |
$ |
92,610 |
|
$ |
94,555 |
|
$ |
163,621 |
|
$ |
162,174 |
|
$ |
170,449 |
|
| |
|
|
|
|
|
|
Allowance for credit losses on loans (ACL): |
|
|
|
|
|
|
ACL to total loans |
|
0.84 |
% |
|
0.87 |
% |
|
0.87 |
% |
|
0.99 |
% |
|
1.08 |
% |
|
ACL to nonperforming loans |
|
69.43 |
% |
|
66.92 |
% |
|
54.42 |
% |
|
66.84 |
% |
|
70.99 |
% |
|
Net charge-offs |
$ |
115 |
|
$ |
1,024 |
|
$ |
436 |
|
$ |
1,149 |
|
$ |
980 |
|
|
Average net charge-off rate (annualized) |
|
0.01 |
% |
|
0.08 |
% |
|
0.04 |
% |
|
0.10 |
% |
|
0.08 |
% |
|
|
|
|
|
|
|
| Funding
composition: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Non-interest-bearing deposits |
$ |
683,406 |
|
$ |
653,899 |
|
$ |
621,954 |
|
$ |
604,805 |
|
$ |
631,344 |
|
|
Interest-bearing demand |
|
2,382,411 |
|
|
2,265,597 |
|
|
2,154,488 |
|
|
2,106,693 |
|
|
1,937,661 |
|
|
Savings |
|
982,916 |
|
|
1,053,198 |
|
|
1,088,974 |
|
|
1,087,740 |
|
|
1,089,699 |
|
|
Certificates of deposit (retail) |
|
1,263,124 |
|
|
1,116,035 |
|
|
1,122,228 |
|
|
1,184,530 |
|
|
1,264,016 |
|
|
Certificates of deposit (brokered and listing service) |
|
796,421 |
|
|
773,527 |
|
|
541,018 |
|
|
470,257 |
|
|
472,419 |
|
|
Interest-bearing deposits |
|
5,424,872 |
|
|
5,208,357 |
|
|
4,906,708 |
|
|
4,849,220 |
|
|
4,763,795 |
|
|
Total deposits |
|
6,108,278 |
|
|
5,862,256 |
|
|
5,528,662 |
|
|
5,454,025 |
|
|
5,395,139 |
|
|
|
|
|
|
|
|
|
Borrowings: |
|
|
|
|
|
|
Federal Home Loan Bank advances |
|
796,454 |
|
|
651,337 |
|
|
541,220 |
|
|
666,105 |
|
|
665,990 |
|
|
Overnight borrowings |
|
55,000 |
|
|
250,000 |
|
|
310,000 |
|
|
20,000 |
|
|
55,000 |
|
|
Total borrowings |
|
851,454 |
|
|
901,337 |
|
|
851,220 |
|
|
686,105 |
|
|
720,990 |
|
|
|
|
|
|
|
|
|
Total funding |
$ |
6,959,732 |
|
$ |
6,763,593 |
|
$ |
6,379,882 |
|
$ |
6,140,130 |
|
$ |
6,116,129 |
|
|
|
|
|
|
|
|
|
Loans as a % of deposits |
|
92.0 |
% |
|
92.1 |
% |
|
89.8 |
% |
|
87.8 |
% |
|
88.1 |
% |
|
Deposits as a % of total funding |
|
87.8 |
% |
|
86.7 |
% |
|
86.7 |
% |
|
88.8 |
% |
|
88.2 |
% |
|
Borrowings as a % of total funding |
|
12.2 |
% |
|
13.3 |
% |
|
13.3 |
% |
|
11.2 |
% |
|
11.8 |
% |
Kearny Financial
Corp.Consolidated Statements of
Income(Unaudited)
|
|
Three Months Ended |
|
(Dollars and Shares in Thousands,Except Per Share Data) |
September 30,2022 |
June 30,2022 |
March 31,2022 |
December 31,2021 |
September 30,2021 |
|
Interest income |
|
|
|
|
|
|
Loans |
$ |
52,935 |
|
$ |
48,869 |
|
$ |
45,846 |
|
$ |
47,575 |
|
$ |
48,230 |
|
|
Taxable investment securities |
|
10,439 |
|
|
8,915 |
|
|
8,024 |
|
|
7,595 |
|
|
8,212 |
|
|
Tax-exempt investment securities |
|
285 |
|
|
297 |
|
|
316 |
|
|
327 |
|
|
333 |
|
|
Other interest-earning assets |
|
761 |
|
|
472 |
|
|
415 |
|
|
415 |
|
|
431 |
|
|
Total interest income |
|
64,420 |
|
|
58,553 |
|
|
54,601 |
|
|
55,912 |
|
|
57,206 |
|
|
|
|
|
|
|
|
| Interest
expense |
|
|
|
|
|
|
Deposits |
|
10,869 |
|
|
3,915 |
|
|
3,565 |
|
|
3,663 |
|
|
4,065 |
|
|
Borrowings |
|
5,020 |
|
|
4,039 |
|
|
3,309 |
|
|
3,562 |
|
|
3,551 |
|
|
Total interest expense |
|
15,889 |
|
|
7,954 |
|
|
6,874 |
|
|
7,225 |
|
|
7,616 |
|
|
Net interest income |
|
48,531 |
|
|
50,599 |
|
|
47,727 |
|
|
48,687 |
|
|
49,590 |
|
| Provision for (reversal of)
credit losses |
|
670 |
|
|
4,222 |
|
|
(3,920 |
) |
|
(2,420 |
) |
|
(5,400 |
) |
|
Net interest income after provision for (reversal of)
credit losses |
|
47,861 |
|
|
46,377 |
|
|
51,647 |
|
|
51,107 |
|
|
54,990 |
|
|
|
|
|
|
|
|
| Non-interest
income |
|
|
|
|
|
|
Fees and service charges |
|
763 |
|
|
658 |
|
|
617 |
|
|
698 |
|
|
607 |
|
|
(Loss) gain on sale and call of securities |
|
— |
|
|
(563 |
) |
|
3 |
|
|
— |
|
|
1 |
|
|
Gain on sale of loans |
|
395 |
|
|
187 |
|
|
376 |
|
|
970 |
|
|
1,006 |
|
|
(Loss) gain on sale of other real estate owned |
|
— |
|
|
(9 |
) |
|
14 |
|
|
— |
|
|
— |
|
|
Income from bank owned life insurance |
|
3,698 |
|
|
1,533 |
|
|
1,511 |
|
|
1,562 |
|
|
1,561 |
|
|
Electronic banking fees and charges |
|
506 |
|
|
366 |
|
|
432 |
|
|
421 |
|
|
407 |
|
|
Other income |
|
555 |
|
|
638 |
|
|
238 |
|
|
482 |
|
|
218 |
|
|
Total non-interest income |
|
5,917 |
|
|
2,810 |
|
|
3,191 |
|
|
4,133 |
|
|
3,800 |
|
|
|
|
|
|
|
|
| Non-interest
expense |
|
|
|
|
|
|
Salaries and employee benefits |
|
20,348 |
|
|
20,367 |
|
|
19,184 |
|
|
18,096 |
|
|
18,617 |
|
|
Net occupancy expense of premises |
|
3,090 |
|
|
3,188 |
|
|
3,223 |
|
|
3,156 |
|
|
4,547 |
|
|
Equipment and systems |
|
3,662 |
|
|
4,516 |
|
|
3,822 |
|
|
3,723 |
|
|
3,825 |
|
|
Advertising and marketing |
|
747 |
|
|
703 |
|
|
516 |
|
|
448 |
|
|
392 |
|
|
Federal deposit insurance premium |
|
906 |
|
|
762 |
|
|
480 |
|
|
721 |
|
|
492 |
|
|
Directors' compensation |
|
340 |
|
|
340 |
|
|
340 |
|
|
649 |
|
|
803 |
|
|
Other expense |
|
2,895 |
|
|
3,736 |
|
|
3,058 |
|
|
2,877 |
|
|
3,127 |
|
|
Total non-interest expense |
|
31,988 |
|
|
33,612 |
|
|
30,623 |
|
|
29,670 |
|
|
31,803 |
|
|
Income before income taxes |
|
21,790 |
|
|
15,575 |
|
|
24,215 |
|
|
25,570 |
|
|
26,987 |
|
|
Income taxes |
|
5,255 |
|
|
4,205 |
|
|
6,522 |
|
|
6,801 |
|
|
7,272 |
|
|
Net income |
$ |
16,535 |
|
$ |
11,370 |
|
$ |
17,693 |
|
$ |
18,769 |
|
$ |
19,715 |
|
|
|
|
|
|
|
|
| Net income per common
share (EPS) |
|
|
|
|
|
|
Basic |
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.25 |
|
$ |
0.26 |
|
$ |
0.26 |
|
|
Diluted |
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.25 |
|
$ |
0.26 |
|
$ |
0.26 |
|
|
|
|
|
|
|
|
| Dividends
declared |
|
|
|
|
|
|
Cash dividends declared per common share |
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.10 |
|
|
Cash dividends declared |
$ |
7,276 |
|
$ |
7,441 |
|
$ |
7,720 |
|
$ |
7,921 |
|
$ |
7,381 |
|
|
Dividend payout ratio |
|
44.0 |
% |
|
65.4 |
% |
|
43.6 |
% |
|
42.2 |
% |
|
37.4 |
% |
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding |
|
|
|
|
|
|
Basic |
|
65,737 |
|
|
67,240 |
|
|
69,790 |
|
|
72,011 |
|
|
74,537 |
|
|
Diluted |
|
65,756 |
|
|
67,276 |
|
|
69,817 |
|
|
72,037 |
|
|
74,556 |
|
Kearny Financial
Corp.Average Balance Sheet
Data(Unaudited)
| |
Three Months Ended |
|
(Dollars in Thousands) |
September 30,2022 |
June 30,2022 |
March 31,2022 |
December 31,2021 |
September 30,2021 |
|
Assets |
|
|
|
|
|
| Interest-earning assets: |
|
|
|
|
|
|
Loans receivable, including loans held-for-sale |
$ |
5,553,996 |
|
$ |
5,181,983 |
|
$ |
4,850,236 |
|
$ |
4,822,959 |
|
$ |
4,835,676 |
|
|
Taxable investment securities |
|
1,516,974 |
|
|
1,608,372 |
|
|
1,620,996 |
|
|
1,610,395 |
|
|
1,649,953 |
|
|
Tax-exempt investment securities |
|
48,973 |
|
|
51,672 |
|
|
55,390 |
|
|
57,686 |
|
|
59,115 |
|
|
Other interest-earning assets |
|
88,038 |
|
|
87,990 |
|
|
79,644 |
|
|
77,811 |
|
|
85,749 |
|
|
Total interest-earning assets |
|
7,207,981 |
|
|
6,930,017 |
|
|
6,606,266 |
|
|
6,568,851 |
|
|
6,630,493 |
|
| Non-interest-earning
assets |
|
570,225 |
|
|
564,734 |
|
|
601,684 |
|
|
611,390 |
|
|
616,735 |
|
|
Total assets |
$ |
7,778,206 |
|
$ |
7,494,751 |
|
$ |
7,207,950 |
|
$ |
7,180,241 |
|
$ |
7,247,228 |
|
|
|
|
|
|
|
|
| Liabilities and
Stockholders' Equity |
|
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Interest-bearing demand |
$ |
2,354,340 |
|
$ |
2,155,946 |
|
$ |
2,133,977 |
|
$ |
2,027,021 |
|
$ |
1,954,271 |
|
|
Savings |
|
1,019,343 |
|
|
1,077,631 |
|
|
1,088,351 |
|
|
1,086,903 |
|
|
1,102,865 |
|
|
Certificates of deposit |
|
2,014,922 |
|
|
1,701,725 |
|
|
1,650,048 |
|
|
1,693,423 |
|
|
1,798,473 |
|
|
Total interest-bearing deposits |
|
5,388,605 |
|
|
4,935,302 |
|
|
4,872,376 |
|
|
4,807,347 |
|
|
4,855,609 |
|
|
Borrowings: |
|
|
|
|
|
|
Federal Home Loan Bank advances |
|
642,399 |
|
|
752,579 |
|
|
632,811 |
|
|
666,029 |
|
|
665,915 |
|
|
Other borrowings |
|
127,456 |
|
|
185,901 |
|
|
51,667 |
|
|
26,033 |
|
|
28,532 |
|
|
Total borrowings |
|
769,855 |
|
|
938,480 |
|
|
684,478 |
|
|
692,062 |
|
|
694,447 |
|
|
Total interest-bearing liabilities |
|
6,158,460 |
|
|
5,873,782 |
|
|
5,556,854 |
|
|
5,499,409 |
|
|
5,550,056 |
|
| Non-interest-bearing
liabilities: |
|
|
|
|
|
|
Non-interest-bearing deposits |
|
667,624 |
|
|
640,200 |
|
|
624,152 |
|
|
624,200 |
|
|
610,271 |
|
|
Other non-interest-bearing liabilities |
|
56,431 |
|
|
56,636 |
|
|
49,455 |
|
|
50,870 |
|
|
56,893 |
|
|
Total non-interest-bearing liabilities |
|
724,055 |
|
|
696,836 |
|
|
673,607 |
|
|
675,070 |
|
|
667,164 |
|
|
Total liabilities |
|
6,882,515 |
|
|
6,570,618 |
|
|
6,230,461 |
|
|
6,174,479 |
|
|
6,217,220 |
|
| Stockholders' equity |
|
895,691 |
|
|
924,133 |
|
|
977,489 |
|
|
1,005,762 |
|
|
1,030,008 |
|
|
Total liabilities and stockholders' equity |
$ |
7,778,206 |
|
$ |
7,494,751 |
|
$ |
7,207,950 |
|
$ |
7,180,241 |
|
$ |
7,247,228 |
|
|
|
|
|
|
|
|
| Average interest-earning
assets to averageinterest-bearing liabilities |
|
117.04 |
% |
|
117.98 |
% |
|
118.89 |
% |
|
119.45 |
% |
|
119.47 |
% |
Kearny Financial
Corp.Performance Ratio Highlights
| |
Three Months Ended |
|
|
September 30,2022 |
June 30,2022 |
March 31,2022 |
December 31,2021 |
September 30,2021 |
|
Average yield on interest-earning assets: |
|
|
|
|
|
|
Loans receivable, including loans held-for-sale |
3.81 |
% |
3.77 |
% |
3.78 |
% |
3.95 |
% |
3.99 |
% |
|
Taxable investment securities |
2.75 |
% |
2.22 |
% |
1.98 |
% |
1.89 |
% |
1.99 |
% |
|
Tax-exempt investment securities (1) |
2.33 |
% |
2.30 |
% |
2.28 |
% |
2.26 |
% |
2.25 |
% |
|
Other interest-earning assets |
3.46 |
% |
2.15 |
% |
2.08 |
% |
2.13 |
% |
2.01 |
% |
|
Total interest-earning assets |
3.57 |
% |
3.38 |
% |
3.31 |
% |
3.40 |
% |
3.45 |
% |
|
|
|
|
|
|
|
| Average cost of
interest-bearing liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Interest-bearing demand |
0.92 |
% |
0.31 |
% |
0.22 |
% |
0.22 |
% |
0.23 |
% |
|
Savings |
0.23 |
% |
0.11 |
% |
0.10 |
% |
0.11 |
% |
0.12 |
% |
|
Certificates of deposit |
0.97 |
% |
0.46 |
% |
0.52 |
% |
0.53 |
% |
0.57 |
% |
|
Total interest-bearing deposits |
0.81 |
% |
0.32 |
% |
0.29 |
% |
0.30 |
% |
0.33 |
% |
|
Borrowings: |
|
|
|
|
|
|
Federal Home Loan Bank advances |
2.68 |
% |
1.96 |
% |
2.08 |
% |
2.14 |
% |
2.13 |
% |
|
Other borrowings |
2.26 |
% |
0.77 |
% |
0.17 |
% |
0.09 |
% |
0.10 |
% |
|
Total borrowings |
2.61 |
% |
1.72 |
% |
1.93 |
% |
2.06 |
% |
2.05 |
% |
|
Total interest-bearing liabilities |
1.03 |
% |
0.54 |
% |
0.49 |
% |
0.53 |
% |
0.55 |
% |
|
|
|
|
|
|
|
|
Interest rate spread (2) |
2.54 |
% |
2.84 |
% |
2.82 |
% |
2.87 |
% |
2.90 |
% |
|
Net interest margin (3) |
2.69 |
% |
2.92 |
% |
2.89 |
% |
2.96 |
% |
2.99 |
% |
|
|
|
|
|
|
|
|
Non-interest income to average assets (annualized) |
0.30 |
% |
0.15 |
% |
0.18 |
% |
0.23 |
% |
0.21 |
% |
|
Non-interest expense to average assets (annualized) |
1.65 |
% |
1.79 |
% |
1.70 |
% |
1.65 |
% |
1.76 |
% |
|
|
|
|
|
|
|
|
Efficiency ratio (4) |
58.75 |
% |
62.93 |
% |
60.14 |
% |
56.17 |
% |
59.57 |
% |
|
|
|
|
|
|
|
|
Return on average assets (annualized) |
0.85 |
% |
0.61 |
% |
0.98 |
% |
1.05 |
% |
1.09 |
% |
|
Return on average equity (annualized) |
7.38 |
% |
4.92 |
% |
7.24 |
% |
7.46 |
% |
7.66 |
% |
|
Return on average tangible equity (annualized) (5) |
9.70 |
% |
6.40 |
% |
9.27 |
% |
9.49 |
% |
9.67 |
% |
_________________________
| (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 30,2022 |
June 30,2022 |
March 31,2022 |
December 31,2021 |
September 30,2021 |
|
Adjusted net income: |
|
|
|
|
|
|
Net income (GAAP) |
$ |
16,535 |
|
$ |
11,370 |
|
$ |
17,693 |
|
$ |
18,769 |
|
$ |
19,715 |
|
|
Non-recurring transactions - net of tax: |
|
|
|
|
|
|
Early contract termination |
|
— |
|
|
568 |
|
|
— |
|
|
— |
|
|
— |
|
|
Branch consolidation expenses andimpairment charges |
|
— |
|
|
— |
|
|
— |
|
|
132 |
|
|
1,209 |
|
|
Net effect of sale and call of securities |
|
— |
|
|
400 |
|
|
(2 |
) |
|
— |
|
|
(1 |
) |
|
Net effect of sale of other assets |
|
— |
|
|
— |
|
|
— |
|
|
(251 |
) |
|
— |
|
|
Adjusted net income |
$ |
16,535 |
|
$ |
12,338 |
|
$ |
17,691 |
|
$ |
18,650 |
|
$ |
20,923 |
|
|
|
|
|
|
|
|
| Calculation of
pre-tax, pre-provision net revenue: |
|
|
|
|
|
|
Net income (GAAP) |
$ |
16,535 |
|
$ |
11,370 |
|
$ |
17,693 |
|
$ |
18,769 |
|
$ |
19,715 |
|
|
Adjustments to net income (GAAP): |
|
|
|
|
|
|
Provision for income taxes |
|
5,255 |
|
|
4,205 |
|
|
6,522 |
|
|
6,801 |
|
|
7,272 |
|
|
Provision for (reversal of) credit losses |
|
670 |
|
|
4,222 |
|
|
(3,920 |
) |
|
(2,420 |
) |
|
(5,400 |
) |
|
Pre-tax, pre-provision net revenue (non-GAAP) |
$ |
22,460 |
|
$ |
19,797 |
|
$ |
20,295 |
|
$ |
23,150 |
|
$ |
21,587 |
|
|
|
|
|
|
|
|
| Adjusted earnings per
share: |
|
|
|
|
|
|
Weighted average common shares - basic |
|
65,737 |
|
|
67,240 |
|
|
69,790 |
|
|
72,011 |
|
|
74,537 |
|
|
Weighted average common shares - diluted |
|
65,756 |
|
|
67,276 |
|
|
69,817 |
|
|
72,037 |
|
|
74,556 |
|
|
|
|
|
|
|
|
|
Earnings per share - basic (GAAP) |
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.25 |
|
$ |
0.26 |
|
$ |
0.26 |
|
|
Earnings per share - diluted (GAAP) |
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.25 |
|
$ |
0.26 |
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
Adjusted earnings per share - basic (non-GAAP) |
$ |
0.25 |
|
$ |
0.18 |
|
$ |
0.25 |
|
$ |
0.26 |
|
$ |
0.28 |
|
|
Adjusted earnings per share - diluted (non-GAAP) |
$ |
0.25 |
|
$ |
0.18 |
|
$ |
0.25 |
|
$ |
0.26 |
|
$ |
0.28 |
|
|
|
|
|
|
|
|
| Pre-tax, pre-provision
net revenue per share: |
|
|
|
|
|
|
Pre-tax, pre-provision net revenue per share - basic(non-GAAP) |
$ |
0.34 |
|
$ |
0.29 |
|
$ |
0.29 |
|
$ |
0.32 |
|
$ |
0.29 |
|
|
Pre-tax, pre-provision net revenue per share -
diluted(non-GAAP) |
$ |
0.34 |
|
$ |
0.29 |
|
$ |
0.29 |
|
$ |
0.32 |
|
$ |
0.29 |
|
|
|
|
|
|
|
|
| Adjusted return on
average assets: |
|
|
|
|
|
|
Total average assets |
$ |
7,778,206 |
|
$ |
7,494,751 |
|
$ |
7,207,950 |
|
$ |
7,180,241 |
|
$ |
7,247,228 |
|
|
|
|
|
|
|
|
|
Return on average assets (GAAP) |
|
0.85 |
% |
|
0.61 |
% |
|
0.98 |
% |
|
1.05 |
% |
|
1.09 |
% |
|
Adjusted return on average assets (non-GAAP) |
|
0.85 |
% |
|
0.66 |
% |
|
0.98 |
% |
|
1.04 |
% |
|
1.15 |
% |
|
|
|
|
|
|
|
| Adjusted return on
average equity: |
|
|
|
|
|
|
Total average equity |
$ |
895,691 |
|
$ |
924,133 |
|
$ |
977,489 |
|
$ |
1,005,762 |
|
$ |
1,030,008 |
|
|
|
|
|
|
|
|
|
Return on average equity (GAAP) |
|
7.38 |
% |
|
4.92 |
% |
|
7.24 |
% |
|
7.46 |
% |
|
7.66 |
% |
|
Adjusted return on average equity (non-GAAP) |
|
7.38 |
% |
|
5.34 |
% |
|
7.24 |
% |
|
7.42 |
% |
|
8.13 |
% |
Kearny Financial
Corp.Reconciliation of GAAP to
Non-GAAP(Unaudited)
| |
Three Months Ended |
|
(Dollars and Shares in Thousands,Except Per Share Data) |
September 30,2022 |
June 30,2022 |
March 31,2022 |
December 31,2021 |
September 30,2021 |
|
Adjusted return on average tangible equity: |
|
|
|
|
|
|
Total average equity |
$ |
895,691 |
|
$ |
924,133 |
|
$ |
977,489 |
|
$ |
1,005,762 |
|
$ |
1,030,008 |
|
| Less: average goodwill |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
| Less: average other intangible
assets |
|
(2,971 |
) |
|
(3,116 |
) |
|
(3,282 |
) |
|
(3,462 |
) |
|
(3,641 |
) |
| Total average tangible
equity |
$ |
681,825 |
|
$ |
710,122 |
|
$ |
763,312 |
|
$ |
791,405 |
|
$ |
815,472 |
|
| |
|
|
|
|
|
| Return on average tangible
equity (non-GAAP) |
|
9.70 |
% |
|
6.40 |
% |
|
9.27 |
% |
|
9.49 |
% |
|
9.67 |
% |
| Adjusted return on average
tangible equity (non-GAAP) |
|
9.70 |
% |
|
6.95 |
% |
|
9.27 |
% |
|
9.43 |
% |
|
10.26 |
% |
| |
|
|
|
|
|
| Adjusted non-interest expense
ratio: |
|
|
|
|
|
| Non-interest expense
(GAAP) |
$ |
31,988 |
|
$ |
33,612 |
|
$ |
30,623 |
|
$ |
29,670 |
|
$ |
31,803 |
|
| Non-recurring
transactions: |
|
|
|
|
|
| Early contract
termination |
|
— |
|
|
(800 |
) |
|
— |
|
|
— |
|
|
— |
|
| Branch consolidation expenses
andimpairment charges |
|
— |
|
|
— |
|
|
— |
|
|
(187 |
) |
|
(1,711 |
) |
| Non-interest expense
(non-GAAP) |
$ |
31,988 |
|
$ |
32,812 |
|
$ |
30,623 |
|
$ |
29,483 |
|
$ |
30,092 |
|
| |
|
|
|
|
|
| Non-interest expense ratio
(GAAP) |
|
1.65 |
% |
|
1.79 |
% |
|
1.70 |
% |
|
1.65 |
% |
|
1.76 |
% |
| Adjusted non-interest expense
ratio (non-GAAP) |
|
1.65 |
% |
|
1.75 |
% |
|
1.70 |
% |
|
1.64 |
% |
|
1.66 |
% |
| |
|
|
|
|
|
| Adjusted efficiency
ratio: |
|
|
|
|
|
| Non-interest expense
(non-GAAP) |
$ |
31,988 |
|
$ |
32,812 |
|
$ |
30,623 |
|
$ |
29,483 |
|
$ |
30,092 |
|
| |
|
|
|
|
|
| Net interest income
(GAAP) |
$ |
48,531 |
|
$ |
50,599 |
|
$ |
47,727 |
|
$ |
48,687 |
|
$ |
49,590 |
|
| Total non-interest income
(GAAP) |
|
5,917 |
|
|
2,810 |
|
|
3,191 |
|
|
4,133 |
|
|
3,800 |
|
| Non-recurring
transactions: |
|
|
|
|
|
| Net effect of sale and call of
securities |
|
— |
|
|
563 |
|
|
(3 |
) |
|
— |
|
|
(1 |
) |
| Net effect of sale of other
assets |
|
— |
|
|
— |
|
|
— |
|
|
(356 |
) |
|
— |
|
| Total revenue (non-GAAP) |
$ |
54,448 |
|
$ |
53,972 |
|
$ |
50,915 |
|
$ |
52,464 |
|
$ |
53,389 |
|
| |
|
|
|
|
|
| Efficiency ratio (GAAP) |
|
58.75 |
% |
|
62.93 |
% |
|
60.14 |
% |
|
56.17 |
% |
|
59.57 |
% |
| Adjusted efficiency ratio
(non-GAAP) |
|
58.75 |
% |
|
60.79 |
% |
|
60.15 |
% |
|
56.20 |
% |
|
56.36 |
% |
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