FAIRFIELD, N.J., July 25, 2024 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the "Company"), the holding company of Kearny Bank (the "Bank"), reported a GAAP net loss for the quarter ended June 30, 2024 of $90.1 million, or $1.45 per diluted share, attributable to a non-cash, after-tax, goodwill impairment of $95.3 million. Excluding the impact of the goodwill impairment and other non-recurring transactions, adjusted net income for the quarter ended June 30, 2024 was $5.6 million, or $0.09 per diluted share, as compared to net income of $7.4 million, or $0.12 per diluted share, for the quarter ended March 31, 2024.
"Goodwill impairment in no way affects our ongoing strategy or our ability to serve the banking needs of our clients," said Craig L. Montanaro, President & Chief Executive Officer. "It also has no impact on our financial condition, robust liquidity position, or peer-leading regulatory capital ratios. This impairment simply reflects the impact of the current interest rate environment on bank stock prices, including our own."
For the fiscal year ended June 30, 2024, the Company reported a GAAP net loss of $86.7 million, or $1.39 per diluted share, compared to GAAP net income of $40.8 million, or $0.63 per diluted share, for the fiscal year ended June 30, 2023, primarily attributable to the non-cash goodwill impairment mentioned above. Excluding the impact of the goodwill impairment and other non-recurring transactions, adjusted net income for the fiscal year ended June 30, 2024 was $28.2 million, or $0.45 per diluted share, as compared to adjusted net income of $50.6 million, or $0.78 per diluted share, for the fiscal year 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 August 26, 2024, to stockholders of record as of August 12, 2024.
"Despite the challenging interest rate environment we have plenty of positive news to report this quarter," Mr. Montanaro said. "The performance of our commercial real estate and multifamily portfolios continues to be outstanding, with non-performing assets having improved by $15.7 million, or 0.17% of assets, from June 30, 2023. Our deposit origination efforts, including those via our digital channel, have continued to gain traction with non interest-bearing deposits growing $12.3 million, or 2.1%, quarter-over-quarter. In addition, we now anticipate a net interest margin inflection in the near-term, as our retail time deposit portfolio has repriced above 4.00% and non-maturity deposit disintermediation has meaningfully slowed."
Mr. Montanaro concluded by noting, "As described in greater detail later in this release, we fully charged-off a $3.3 million non-performing commercial & industrial lending relationship this quarter. We do not view this charge-off as a reflection of any broader weakness in our loan portfolio, but rather a borrower-specific event."
Balance Sheet
- Total assets were $7.68 billion at June 30, 2024, a decrease of $158.5 million, or 2.0%, from March 31, 2024 and a decrease of $381.4 million, or 4.7%, from June 30, 2023.
- Investment securities totaled $1.21 billion at June 30, 2024, a decrease of $29.7 million, or 2.4%, from March 31, 2024 and a decrease of $165.6 million, or 12.1%, from June 30, 2023. The decrease for the year was largely driven by the sale of available-for-sale securities, which was part of the investment securities portfolio repositioning executed in December 2023.
- Loans receivable totaled $5.73 billion at June 30, 2024, a decrease of $25.5 million, or 0.4%, from March 31, 2024 and a decrease of $96.6 million, or 1.7%, from June 30, 2023. The decrease for the year was largely driven by multi-family and nonresidential mortgage loans.
- Deposits were $5.16 billion at June 30, 2024, a decrease of $50.9 million, or 1.0%, from March 31, 2024 and a decrease of $471.1 million, or 8.4%, from June 30, 2023. The decrease from March 31, 2024 was driven by a $40.1 million decline in interest bearing government deposits and a $36.1 million decline in retail certificates of deposits ("CDs"), partially offset by growth in non-interest bearing and consumer savings deposits. Excluding brokered CDs, deposits decreased $238.8 million, or 4.8%, from June 30, 2023, driven by a $177.9 million decline in retail CDs and a $105.2 million decline in consumer savings deposits, partially offset by growth in other deposit categories.
- Borrowings were $1.71 billion at June 30, 2024, a decrease of $12.4 million, or 0.7%, from March 31, 2024 and an increase of $203.0 million, or 13.5%, from June 30, 2023.
- At June 30, 2024, the Company maintained available secured borrowing capacity of $1.82 billion, of which $1.44 billion was immediately accessible via in-place collateral and $381.4 million represented the market value of unpledged securities.
- Goodwill was $113.5 million at June 30, 2024, a decrease of $97.4 million, or 46.2%, from March 31, 2024 and June 30, 2023. The Company recognized a non-cash goodwill impairment, as noted above.
Earnings
Net Interest Income and Net Interest Margin
- Net interest margin contracted five basis points to 1.84% for the quarter ended June 30, 2024 and 40 basis points to 1.94% for the year ended June 30, 2024. The decreases for the quarter and the year were driven by increases in the cost of interest-bearing liabilities, increases in the average balances of interest-bearing borrowings and decreases in the average balances of interest-earning assets, partially offset by higher yields on interest-earning assets and decreases in the average balances of interest-bearing deposits.
- For the quarter ended June 30, 2024, net interest income decreased $1.0 million to $33.3 million from $34.3 million for the quarter ended March 31, 2024. Included in net interest income for the quarters ended June 30, 2024 and March 31, 2024, respectively, was purchase accounting accretion of $612,000 and $734,000, and loan prepayment penalty income of $366,000 and $61,000.
- For the year ended June 30, 2024, net interest income decreased $33.3 million to $142.6 million from $175.9 million for the year ended June 30, 2023. Included in net interest income for the years ended June 30, 2024 and 2023, respectively, was purchase accounting accretion of $2.6 million and $5.3 million, and loan prepayment penalty income of $879,000 and $895,000.
Non-Interest Income
- For the quarter ended June 30, 2024, non-interest income increased $1.6 million to income of $5.8 million from income of $4.2 million for the quarter ended March 31, 2024. Non-interest income for the quarter ended June 30, 2024 included a contract renewal bonus of $750,000 related to a licensing agreement with a third-party vendor. Included in other income for the quarter ended March 31, 2024 was an $884,000 non-recurring loss attributable to the sale of three related nonperforming commercial real estate loans held-for-sale. No such losses were recorded during the quarter ended June 30, 2024.
- Income from BOLI increased $170,000 to $3.2 million for the quarter ended June 30, 2024 from $3.0 million for the quarter ended March 31, 2024. BOLI income included a total of $1.1 million in non-recurring payments on two life insurance policies in the current period, partially offset by a $392,000 non-recurring exchange charge related to the December 2023 BOLI restructure. For the quarter ended March 31, 2024, BOLI income included a $631,000 non-recurring payment on one life insurance policy.
- For the year ended June 30, 2024, non-interest income decreased $4.7 million to a loss of $2.0 million. The decrease was primarily attributable to a pre-tax loss of $18.1 million related to the investment securities portfolio repositioning executed during December 2023 compared to a pre-tax loss of $15.2 million on the sale of securities in the prior year period. Included in other income for the year ended June 30, 2023 was a nonrecurring gain of $2.9 million attributable to the sale of a former branch location. No such gains were recorded during the year ended June 30, 2024.
Non-Interest Expense
- For the quarter ended June 30, 2024, non-interest expense increased $97.5 million, or 335.5%, to $126.6 million from $29.1 million for the quarter ended March 31, 2024, driven by a non-cash goodwill impairment recognized in the current quarter. Excluding the goodwill impairment, adjusted non-interest expense increased $122,000, or 0.4%, to $29.2 million from $29.1 million in the prior quarter, driven primarily by a nonrecurring increase in post-retirement benefits expense.
- For the year ended June 30, 2024, non-interest expense increased $91.4 million, or 73.9%, to $215.2 million from $123.8 million for the year ended June 30, 2023, driven by non-cash goodwill impairment, as noted above. Excluding the goodwill impairment, adjusted non-interest expense decreased $4.4 million, or 3.6%, to $117.8 million from $122.2 million in the prior year period. The decrease was primarily attributable to decreases in salary and employee benefits expenses, occupancy, advertising and other expenses, which resulted from a continued execution of the company-wide operating efficiency initiative previously announced in December 2022.
- Salaries and employee benefits decreased $6.4 million, or 8.4%, for the year ended June 30, 2024 reflecting lower average headcount and a decrease in incentive payments tied to origination volume, partially offset by annual merit increases. Included in salaries and employee benefits for the year ended June 30, 2023 was $757,000 of severance expense from a workforce realignment.
- For the year ended June 30, 2023, the Company recorded $800,000 in branch consolidation expense, of which $250,000 was recorded in occupancy expense and $550,000 was recorded in other expense. No such expenses were recorded during the year ended June 30, 2024.
Income Taxes
- Income tax expense was reduced by $917,000 for the quarter ended June 30, 2024 compared to an expense of $1.7 million for the quarter ended March 31, 2024. The decrease in income tax expense for the quarter was mainly attributable to a partial reversal of the deferred tax liability associated with the goodwill impairment, as discussed above.
- Income tax expense totaled $5.9 million for the fiscal year ended June 30, 2024 compared to $11.6 million for the fiscal year ended June 30, 2023. The decrease in income tax expense was due to lower pre-tax income, partially offset by $5.7 million of tax expense related to the surrender of BOLI policies during the fiscal year ended June 30, 2024.
Asset Quality
- The balance of non-performing assets increased $336,000 to $39.9 million, or 0.52% of total assets, at June 30, 2024, from $39.5 million, or 0.50% of total assets, at March 31, 2024. The balance of non-performing assets was $55.6 million, or 0.69% of total assets, at June 30, 2023. The decrease from June 30, 2023 was primarily driven by the January 2024 sales of three related non-performing commercial real estate loans held-for-sale and the Company's sole Other Real Estate Owned asset.
- Net charge-offs totaled $3.5 million, or 0.25% of average loans, on an annualized basis, for the quarter ended June 30, 2024, compared to $286,000, or 0.02% of average loans, on an annualized basis, for the quarter ended March 31, 2024. For the year ended June 30, 2024, net charge-offs totaled $10.0 million, or 0.17% of average loans, compared to $810,000, or 0.01% of average loans, for the year ended June 30, 2023.
- The charge-offs recorded during the quarter ended June 30, 2024 were primarily driven by a $3.3 million non-performing commercial and industrial loan relationship with a masonry and concrete business (the "borrower"). This relationship was originated in 2021 and is secured by the borrower's business assets and receivables, as well as the personal guarantee of the principal. The borrower had made consistent and timely payments on these loans until recently, when the business ceased operations due to operating losses and litigation. The Company is currently pursuing all available remedies against the borrower and guarantor.
- For the quarter ended June 30, 2024, the Company recorded a provision for credit losses of $3.5 million, compared to $349,000 for the quarter ended March 31, 2024. The provision for credit loss expense for the quarter ended June 30, 2024 was primarily driven by the charge-offs described above. For the years ended June 30, 2024 and 2023, the Company recorded a provision for credit losses of $6.2 million and $2.5 million, respectively.
- The allowance for credit losses ("ACL") was $44.9 million, or 0.78% of total loans, at June 30, 2024, unchanged from March 31, 2024, and a decrease of $3.8 million from $48.7 million, or 0.83% of total loans, at June 30, 2023. The decrease in the ACL from June 30, 2023 was largely attributable to a reduction in reserves for individually evaluated loans, resulting from the charge-offs noted above.
Capital
- At June 30, 2024 the Company's tangible equity to tangible assets ratio increased to 8.43% while the Company's Common Equity Tier 1 Capital Ratio increased to 14.79%. All of the Company's capital ratios remained strong and were significantly in excess of regulatory well-capitalized standards.
- At June 30, 2024, book value per share totaled $11.70 while tangible book value per share totaled $9.90.
- At June 30, 2024, total stockholders' equity included after-tax net unrealized losses on securities available for sale of $93.0 million, partially offset by after-tax unrealized gains on derivatives of $29.6 million. After-tax net unrecognized losses on securities held to maturity of $11.7 million were not reflected in total stockholders' equity.
This earnings release should be read in conjunction with Kearny Financial Corp.'s Q4 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.
For further information contact:
Keith Suchodolski, Senior Executive Vice President and Chief Operating Officer, or
Sean Byrnes, Executive Vice President and Chief Financial Officer
Kearny Financial Corp.
(973) 244-4500
Category: Earnings
| Linked-Quarter Comparative Financial Analysis |
Kearny Financial Corp.
Consolidated Balance Sheets
(Unaudited)
| (Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | Variance or Change | Variance or Change Pct. | |||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 63,864 | $ | 71,027 | $ | (7,163 | ) | -10.1 | % | ||
| Securities available for sale | 1,072,833 | 1,098,655 | (25,822 | ) | -2.4 | % | |||||
| Securities held to maturity | 135,742 | 139,643 | (3,901 | ) | -2.8 | % | |||||
| Loans held-for-sale | 6,036 | 4,117 | 1,919 | 46.6 | % | ||||||
| Loans receivable | 5,732,787 | 5,758,336 | (25,549 | ) | -0.4 | % | |||||
| Less: allowance for credit losses on loans | (44,939 | ) | (44,930 | ) | 9 | - | % | ||||
| Net loans receivable | 5,687,848 | 5,713,406 | (25,558 | ) | -0.4 | % | |||||
| Premises and equipment | 44,940 | 45,053 | (113 | ) | -0.3 | % | |||||
| Federal Home Loan Bank stock | 80,300 | 81,347 | (1,047 | ) | -1.3 | % | |||||
| Accrued interest receivable | 29,521 | 31,065 | (1,544 | ) | -5.0 | % | |||||
| Goodwill | 113,525 | 210,895 | (97,370 | ) | -46.2 | % | |||||
| Core deposit intangible | 1,931 | 2,057 | (126 | ) | -6.1 | % | |||||
| Bank owned life insurance | 297,874 | 296,493 | 1,381 | 0.5 | % | ||||||
| Deferred income taxes, net | 50,339 | 47,225 | 3,114 | 6.6 | % | ||||||
| Other assets | 98,708 | 100,989 | (2,281 | ) | -2.3 | % | |||||
| Total assets | $ | 7,683,461 | $ | 7,841,972 | $ | (158,511 | ) | -2.0 | % | ||
| Liabilities | |||||||||||
| Deposits: | |||||||||||
| Non-interest-bearing | $ | 598,366 | $ | 586,089 | $ | 12,277 | 2.1 | % | |||
| Interest-bearing | 4,559,757 | 4,622,961 | (63,204 | ) | -1.4 | % | |||||
| Total deposits | 5,158,123 | 5,209,050 | (50,927 | ) | -1.0 | % | |||||
| Borrowings | 1,709,789 | 1,722,178 | (12,389 | ) | -0.7 | % | |||||
| Advance payments by borrowers for taxes | 17,409 | 17,387 | 22 | 0.1 | % | ||||||
| Other liabilities | 44,569 | 44,279 | 290 | 0.7 | % | ||||||
| Total liabilities | 6,929,890 | 6,992,894 | (63,004 | ) | -0.9 | % | |||||
| Stockholders' Equity | |||||||||||
| Common stock | 644 | 644 | - | - | % | ||||||
| Paid-in capital | 493,680 | 493,187 | 493 | 0.1 | % | ||||||
| Retained earnings | 343,326 | 440,308 | (96,982 | ) | -22.0 | % | |||||
| Unearned ESOP shares | (20,916 | ) | (21,402 | ) | 486 | 2.3 | % | ||||
| Accumulated other comprehensive loss | (63,163 | ) | (63,659 | ) | 496 | 0.8 | % | ||||
| Total stockholders' equity | 753,571 | 849,078 | (95,507 | ) | -11.2 | % | |||||
| Total liabilities and stockholders' equity | $ | 7,683,461 | $ | 7,841,972 | $ | (158,511 | ) | -2.0 | % | ||
| Consolidated capital ratios | |||||||||||
| Equity to assets | 9.81 | % | 10.83 | % | -1.02 | % | |||||
| Tangible equity to tangible assets(1) | 8.43 | % | 8.34 | % | 0.09 | % | |||||
| Share data | |||||||||||
| Outstanding shares | 64,434 | 64,437 | (3 | ) | - | % | |||||
| Book value per share | $ | 11.70 | $ | 13.18 | $ | (1.48 | ) | -11.2 | % | ||
| Tangible book value per share(2) | $ | 9.90 | $ | 9.87 | $ | 0.03 | 0.3 | % | |||
_________________________
| (1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. |
| (2) | Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. |
Kearny Financial Corp.
Consolidated Statements of Income (Loss)
(Unaudited)
| (Dollars and Shares in Thousands, Except Per Share Data) | Three Months Ended | Variance or Change | Variance or Change Pct. | ||||||||
| June 30, 2024 | March 31, 2024 | ||||||||||
| Interest income | |||||||||||
| Loans | $ | 65,819 | $ | 64,035 | $ | 1,784 | 2.8 | % | |||
| Taxable investment securities | 14,802 | 15,490 | (688 | ) | -4.4 | % | |||||
| Tax-exempt investment securities | 80 | 85 | (5 | ) | -5.9 | % | |||||
| Other interest-earning assets | 2,289 | 2,475 | (186 | ) | -7.5 | % | |||||
| Total interest income | 82,990 | 82,085 | 905 | 1.1 | % | ||||||
| Interest expense | |||||||||||
| Deposits | 32,187 | 32,320 | (133 | ) | -0.4 | % | |||||
| Borrowings | 17,527 | 15,446 | 2,081 | 13.5 | % | ||||||
| Total interest expense | 49,714 | 47,766 | 1,948 | 4.1 | % | ||||||
| Net interest income | 33,276 | 34,319 | (1,043 | ) | -3.0 | % | |||||
| Provision for credit losses | 3,527 | 349 | 3,178 | 910.6 | % | ||||||
| Net interest income after provision for credit losses | 29,749 | 33,970 | (4,221 | ) | -12.4 | % | |||||
| Non-interest income | |||||||||||
| Fees and service charges | 580 | 657 | (77 | ) | -11.7 | % | |||||
| Gain (loss) on sale of loans | 111 | (712 | ) | 823 | -115.6 | % | |||||
| Income from bank owned life insurance | 3,209 | 3,039 | 170 | 5.6 | % | ||||||
| Electronic banking fees and charges | 1,130 | 464 | 666 | 143.5 | % | ||||||
| Other income | 776 | 755 | 21 | 2.8 | % | ||||||
| Total non-interest income | 5,806 | 4,203 | 1,603 | -38.1 | % | ||||||
| Non-interest expense | |||||||||||
| Salaries and employee benefits | 17,266 | 16,911 | 355 | 2.1 | % | ||||||
| Net occupancy expense of premises | 2,738 | 2,863 | (125 | ) | -4.4 | % | |||||
| Equipment and systems | 3,785 | 3,823 | (38 | ) | -1.0 | % | |||||
| Advertising and marketing | 480 | 387 | 93 | 24.0 | % | ||||||
| Federal deposit insurance premium | 1,532 | 1,429 | 103 | 7.2 | % | ||||||
| Directors' compensation | 360 | 360 | - | - | % | ||||||
| Goodwill impairment | 97,370 | - | 97,370 | - | % | ||||||
| Other expense | 3,020 | 3,286 | (266 | ) | -8.1 | % | |||||
| Total non-interest expense | 126,551 | 29,059 | 97,492 | 335.5 | % | ||||||
| (Loss) income before income taxes | (90,996 | ) | 9,114 | (100,110 | ) | 1098.4 | % | ||||
| Income taxes | (917 | ) | 1,717 | (2,634 | ) | -153.4 | % | ||||
| Net (loss) income | $ | (90,079 | ) | $ | 7,397 | $ | (97,476 | ) | 1317.8 | % | |
| Net (loss) income per common share (EPS) | |||||||||||
| Basic | $ | (1.45 | ) | $ | 0.12 | $ | (1.57 | ) | |||
| Diluted | $ | (1.45 | ) | $ | 0.12 | $ | (1.57 | ) | |||
| Dividends declared | |||||||||||
| Cash dividends declared per common share | $ | 0.11 | $ | 0.11 | $ | - | |||||
| Cash dividends declared | $ | 6,903 | $ | 6,844 | $ | 59 | |||||
| Dividend payout ratio | -7.7 | % | 92.5 | % | -100.2 | % | |||||
| Weighted average number of common shares outstanding | |||||||||||
| Basic | 62,254 | 62,205 | 49 | ||||||||
| Diluted | 62,254 | 62,211 | 43 | ||||||||
Kearny Financial Corp.
Average Balance Sheet Data
(Unaudited)
| (Dollars in Thousands) | Three Months Ended | Variance or Change | Variance or Change Pct. | ||||||||
| June 30, 2024 | March 31, 2024 | ||||||||||
| Assets | |||||||||||
| Interest-earning assets: | |||||||||||
| Loans receivable, including loans held for sale | $ | 5,743,008 | $ | 5,752,477 | $ | (9,469 | ) | -0.2 | % | ||
| Taxable investment securities | 1,343,541 | 1,382,064 | (38,523 | ) | -2.8 | % | |||||
| Tax-exempt investment securities | 13,737 | 14,614 | (877 | ) | -6.0 | % | |||||
| Other interest-earning assets | 128,257 | 125,155 | 3,102 | 2.5 | % | ||||||
| Total interest-earning assets | 7,228,543 | 7,274,310 | (45,767 | ) | -0.6 | % | |||||
| Non-interest-earning assets | 466,537 | 577,411 | (110,874 | ) | -19.2 | % | |||||
| Total assets | $ | 7,695,080 | $ | 7,851,721 | $ | (156,641 | ) | -2.0 | % | ||
| Liabilities and Stockholders' Equity | |||||||||||
| Interest-bearing liabilities: | |||||||||||
| Deposits: | |||||||||||
| Interest-bearing demand | $ | 2,310,521 | $ | 2,378,831 | $ | (68,310 | ) | -2.9 | % | ||
| Savings | 631,622 | 635,226 | (3,604 | ) | -0.6 | % | |||||
| Certificates of deposit | 1,613,798 | 1,705,513 | (91,715 | ) | -5.4 | % | |||||
| Total interest-bearing deposits | 4,555,941 | 4,719,570 | (163,629 | ) | -3.5 | % | |||||
| Borrowings: | |||||||||||
| Federal Home Loan Bank advances | 1,507,192 | 1,428,801 | 78,391 | 5.5 | % | ||||||
| Other borrowings | 228,461 | 210,989 | 17,472 | 8.3 | % | ||||||
| Total borrowings | 1,735,653 | 1,639,790 | 95,863 | 5.8 | % | ||||||
| Total interest-bearing liabilities | 6,291,594 | 6,359,360 | (67,766 | ) | -1.1 | % | |||||
| Non-interest-bearing liabilities: | |||||||||||
| Non-interest-bearing deposits | 589,438 | 581,870 | 7,568 | 1.3 | % | ||||||
| Other non-interest-bearing liabilities | 62,978 | 65,709 | (2,731 | ) | -4.2 | % | |||||
| Total non-interest-bearing liabilities | 652,416 | 647,579 | 4,837 | 0.7 | % | ||||||
| Total liabilities | 6,944,010 | 7,006,939 | (62,929 | ) | -0.9 | % | |||||
| Stockholders' equity | 751,070 | 844,782 | (93,712 | ) | -11.1 | % | |||||
| Total liabilities and stockholders' equity | $ | 7,695,080 | $ | 7,851,721 | $ | (156,641 | ) | -2.0 | % | ||
| Average interest-earning assets to average interest-bearing liabilities | 114.89 | % | 114.39 | % | 0.50 | % | 0.4 | % | |||
Kearny Financial Corp.
Performance Ratio Highlights
(Unaudited)
| Three Months Ended | Variance or Change | |||||
| June 30, 2024 | March 31, 2024 | |||||
| Average yield on interest-earning assets: | ||||||
| Loans receivable, including loans held for sale | 4.58 | % | 4.45 | % | 0.13 | % |
| Taxable investment securities | 4.41 | % | 4.48 | % | -0.07 | % |
| Tax-exempt investment securities (1) | 2.32 | % | 2.32 | % | - | % |
| Other interest-earning assets | 7.14 | % | 7.91 | % | -0.77 | % |
| Total interest-earning assets | 4.59 | % | 4.51 | % | 0.08 | % |
| Average cost of interest-bearing liabilities: | ||||||
| Deposits: | ||||||
| Interest-bearing demand | 3.06 | % | 3.08 | % | -0.02 | % |
| Savings | 0.63 | % | 0.46 | % | 0.17 | % |
| Certificates of deposit | 3.35 | % | 3.11 | % | 0.24 | % |
| Total interest-bearing deposits | 2.83 | % | 2.74 | % | 0.09 | % |
| Borrowings: | ||||||
| Federal Home Loan Bank advances | 3.86 | % | 3.55 | % | 0.31 | % |
| Other borrowings | 5.24 | % | 5.22 | % | 0.02 | % |
| Total borrowings | 4.04 | % | 3.77 | % | 0.27 | % |
| Total interest-bearing liabilities | 3.16 | % | 3.00 | % | 0.16 | % |
| Interest rate spread (2) | 1.43 | % | 1.51 | % | -0.08 | % |
| Net interest margin (3) | 1.84 | % | 1.89 | % | -0.05 | % |
| Non-interest income to average assets (annualized) | 0.30 | % | 0.21 | % | 0.09 | % |
| Non-interest expense to average assets (annualized) | 6.58 | % | 1.48 | % | 5.10 | % |
| Efficiency ratio (4) | 323.81 | % | 75.43 | % | 248.38 | % |
| Return on average assets (annualized) | -4.68 | % | 0.38 | % | -5.06 | % |
| Return on average equity (annualized) | -47.97 | % | 3.50 | % | -51.47 | % |
| Return on average tangible equity (annualized) (5) | -56.69 | % | 4.68 | % | -61.37 | % |
_________________________
| (1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. |
| (2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
| (3) | Net interest income divided by average interest-earning assets. |
| (4) | Non-interest expense divided by the sum of net interest income and non-interest income. |
| (5) | Average tangible equity equals total average stockholders' equity reduced by average goodwill and average core deposit intangible assets. |
| Year-to-Year Comparative Financial Analysis |
Kearny Financial Corp.
Consolidated Balance Sheets
| (Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | June 30, 2023 | Variance or Change | Variance or Change Pct. | |||||||
| (Unaudited) | (Audited) | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 63,864 | $ | 70,515 | $ | (6,651 | ) | -9.4 | % | ||
| Securities available for sale | 1,072,833 | 1,227,729 | (154,896 | ) | -12.6 | % | |||||
| Securities held to maturity | 135,742 | 146,465 | (10,723 | ) | -7.3 | % | |||||
| Loans held-for-sale | 6,036 | 9,591 | (3,555 | ) | -37.1 | % | |||||
| Loans receivable | 5,732,787 | 5,829,421 | (96,634 | ) | -1.7 | % | |||||
| Less: allowance for credit losses on loans | (44,939 | ) | (48,734 | ) | (3,795 | ) | -7.8 | % | |||
| Net loans receivable | 5,687,848 | 5,780,687 | (92,839 | ) | -1.6 | % | |||||
| Premises and equipment | 44,940 | 48,309 | (3,369 | ) | -7.0 | % | |||||
| Federal Home Loan Bank of New York stock | 80,300 | 71,734 | 8,566 | 11.9 | % | ||||||
| Accrued interest receivable | 29,521 | 28,133 | 1,388 | 4.9 | % | ||||||
| Goodwill | 113,525 | 210,895 | (97,370 | ) | -46.2 | % | |||||
| Core deposit intangible | 1,931 | 2,457 | (526 | ) | -21.4 | % | |||||
| Bank owned life insurance | 297,874 | 292,825 | 5,049 | 1.7 | % | ||||||
| Deferred income tax assets, net | 50,339 | 51,973 | (1,634 | ) | -3.1 | % | |||||
| Other real estate owned | - | 12,956 | (12,956 | ) | -100.0 | % | |||||
| Other assets | 98,708 | 110,546 | (11,838 | ) | -10.7 | % | |||||
| Total assets | $ | 7,683,461 | $ | 8,064,815 | $ | (381,354 | ) | -4.7 | % | ||
| Liabilities | |||||||||||
| Deposits: | |||||||||||
| Non-interest-bearing | $ | 598,366 | $ | 609,999 | $ | (11,633 | ) | -1.9 | % | ||
| Interest-bearing | 4,559,757 | 5,019,184 | (459,427 | ) | -9.2 | % | |||||
| Total deposits | 5,158,123 | 5,629,183 | (471,060 | ) | -8.4 | % | |||||
| Borrowings | 1,709,789 | 1,506,812 | 202,977 | 13.5 | % | ||||||
| Advance payments by borrowers for taxes | 17,409 | 18,338 | (929 | ) | (5.1)% | ||||||
| Other liabilities | 44,569 | 41,198 | 3,371 | 8.2 | % | ||||||
| Total liabilities | 6,929,890 | 7,195,531 | (265,641 | ) | (3.7)% | ||||||
| Stockholders' Equity | |||||||||||
| Common stock | 644 | 659 | (15 | ) | -2.3 | % | |||||
| Paid-in capital | 493,680 | 503,332 | (9,652 | ) | -1.9 | % | |||||
| Retained earnings | 343,326 | 457,611 | (114,285 | ) | -25.0 | % | |||||
| Unearned ESOP shares | (20,916 | ) | (22,862 | ) | 1,946 | -8.5 | % | ||||
| Accumulated other comprehensive loss | (63,163 | ) | (69,456 | ) | 6,293 | -9.1 | % | ||||
| Total stockholders' equity | 753,571 | 869,284 | (115,713 | ) | -13.3 | % | |||||
| Total liabilities and stockholders' equity | $ | 7,683,461 | $ | 8,064,815 | $ | (381,354 | ) | -4.7 | % | ||
| Consolidated capital ratios | |||||||||||
| Equity to assets | 9.81 | % | 10.78 | % | -0.97 | % | |||||
| Tangible equity to tangible assets(1) | 8.43 | % | 8.35 | % | 0.08 | % | |||||
| Share data | |||||||||||
| Outstanding shares | 64,434 | 65,864 | (1,430 | ) | -2.2 | % | |||||
| Book value per share | $ | 11.70 | $ | 13.20 | $ | (1.50 | ) | -11.4 | % | ||
| Tangible book value per share(2) | $ | 9.90 | $ | 9.96 | $ | (0.06 | ) | -0.6 | % | ||
_________________________
| (1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. |
| (2) | Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. |
Kearny Financial Corp.
Consolidated Statements of Income
| Year Ended | |||||||||||
| (Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | June 30, 2023 | Variance or Change | Variance or Change Pct. | |||||||
| (Unaudited) | (Audited) | ||||||||||
| Interest income | |||||||||||
| Loans | $ | 256,007 | $ | 233,147 | $ | 22,860 | 9.8 | % | |||
| Taxable investment securities | 63,313 | 54,855 | 8,458 | 15.4 | % | ||||||
| Tax-exempt investment securities | 336 | 694 | (358 | ) | -51.6 | % | |||||
| Other interest-earning assets | 9,212 | 5,028 | 4,184 | 83.2 | % | ||||||
| Total interest income | 328,868 | 293,724 | 35,144 | 12.0 | % | ||||||
| Interest expense | |||||||||||
| Deposits | 122,414 | 78,163 | 44,251 | 56.6 | % | ||||||
| Borrowings | 63,860 | 39,696 | 24,164 | 60.9 | % | ||||||
| Total interest expense | 186,274 | 117,859 | 68,415 | 58.0 | % | ||||||
| Net interest income | 142,594 | 175,865 | (33,271 | ) | -18.9 | % | |||||
| Provision for credit losses | 6,226 | 2,486 | 3,740 | 150.4 | % | ||||||
| Net interest income after provision for credit losses | 136,368 | 173,379 | (37,011 | ) | -21.3 | % | |||||
| Non-interest income | |||||||||||
| Fees and service charges | 2,609 | 3,106 | (497 | ) | -16.0 | % | |||||
| Loss on sale and call of securities | (18,135 | ) | (15,227 | ) | (2,908 | ) | 19.1 | % | |||
| Loss on sale of loans | (282 | ) | (1,645 | ) | 1,363 | -82.9 | % | ||||
| Loss on sale of real estate owned | (974 | ) | (139 | ) | (835 | ) | 600.7 | % | |||
| Income from bank owned life insurance | 9,076 | 8,645 | 431 | 5.0 | % | ||||||
| Electronic banking fees and charges | 2,357 | 1,759 | 598 | 34.0 | % | ||||||
| Other income | 3,356 | 6,252 | (2,896 | ) | -46.3 | % | |||||
| Total non-interest income | (1,993 | ) | 2,751 | (4,744 | ) | -172.4 | % | ||||
| Non-interest expense | |||||||||||
| Salaries and employee benefits | 69,220 | 75,589 | (6,369 | ) | -8.4 | % | |||||
| Net occupancy expense of premises | 11,033 | 12,036 | (1,003 | ) | -8.3 | % | |||||
| Equipment and systems | 15,223 | 14,577 | 646 | 4.4 | % | ||||||
| Advertising and marketing | 1,396 | 2,122 | (726 | ) | -34.2 | % | |||||
| Federal deposit insurance premium | 5,980 | 5,133 | 847 | 16.5 | % | ||||||
| Directors' compensation | 1,506 | 1,364 | 142 | 10.4 | % | ||||||
| Goodwill impairment | 97,370 | - | 97,370 | - | % | ||||||
| Other expense | 13,423 | 12,930 | 493 | 3.8 | % | ||||||
| Total non-interest expense | 215,151 | 123,751 | 91,400 | 73.9 | % | ||||||
| (Loss) income before income taxes | (80,776 | ) | 52,379 | (133,155 | ) | -254.2 | % | ||||
| Income taxes | 5,891 | 11,568 | (5,677 | ) | -49.1 | % | |||||
| Net (loss) income | $ | (86,667 | ) | $ | 40,811 | $ | (127,478 | ) | -312.4 | % | |
| Net (loss) income per common share (EPS) | |||||||||||
| Basic | $ | (1.39 | ) | $ | 0.63 | $ | (2.02 | ) | |||
| Diluted | $ | (1.39 | ) | $ | 0.63 | $ | (2.02 | ) | |||
| Dividends declared | |||||||||||
| Cash dividends declared per common share | $ | 0.44 | $ | 0.44 | $ | - | |||||
| Cash dividends declared | $ | 27,618 | $ | 28,651 | $ | (1,033 | ) | ||||
| Dividend payout ratio | (31.9)% | 70.2 | % | (102.1)% | |||||||
| Weighted average number of common shares outstanding | |||||||||||
| Basic | 62,444 | 64,804 | (2,360 | ) | |||||||
| Diluted | 62,444 | 64,804 | (2,360 | ) | |||||||
Kearny Financial Corp.
Average Balance Sheet Data
(Unaudited)
| Year Ended | |||||||||||
| (Dollars in Thousands) | June 30, 2024 | June 30, 2023 | Variance or Change | Variance or Change Pct. | |||||||
| Assets | |||||||||||
| Interest-earning assets: | |||||||||||
| Loans receivable, including loans held for sale | $ | 5,752,496 | $ | 5,827,123 | $ | (74,627 | ) | -1.3 | % | ||
| Taxable investment securities | 1,438,200 | 1,532,961 | (94,761 | ) | -6.2 | % | |||||
| Tax-exempt investment securities | 14,718 | 30,332 | (15,614 | ) | -51.5 | % | |||||
| Other interest-earning assets | 131,019 | 115,390 | 15,629 | 13.5 | % | ||||||
| Total interest-earning assets | 7,336,433 | 7,505,806 | (169,373 | ) | -2.3 | % | |||||
| Non-interest-earning assets | 541,859 | 563,131 | (21,272 | ) | -3.8 | % | |||||
| Total assets | $ | 7,878,292 | $ | 8,068,937 | $ | (190,645 | ) | -2.4 | % | ||
| Liabilities and Stockholders' Equity | |||||||||||
| Interest-bearing liabilities: | |||||||||||
| Deposits: | |||||||||||
| Interest-bearing demand | $ | 2,308,893 | $ | 2,349,802 | $ | (40,909 | ) | -1.7 | % | ||
| Savings | 662,981 | 896,651 | (233,670 | ) | -26.1 | % | |||||
| Certificates of deposit | 1,778,682 | 2,083,864 | (305,182 | ) | -14.6 | % | |||||
| Total interest-bearing deposits | 4,750,556 | 5,330,317 | (579,761 | ) | -10.9 | % | |||||
| Borrowings: | |||||||||||
| Federal Home Loan Bank Advances | 1,458,941 | 1,101,658 | 357,283 | 32.4 | % | ||||||
| Other borrowings | 184,768 | 57,468 | 127,300 | 221.5 | % | ||||||
| Total borrowings | 1,643,709 | 1,159,126 | 484,583 | 41.8 | % | ||||||
| Total interest-bearing liabilities | 6,394,265 | 6,489,443 | (95,178 | ) | -1.5 | % | |||||
| Non-interest-bearing liabilities: | |||||||||||
| Non-interest-bearing deposits | 595,266 | 644,543 | (49,277 | ) | -7.6 | % | |||||
| Other non-interest-bearing liabilities | 64,444 | 59,593 | 4,851 | 8.1 | % | ||||||
| Total non-interest-bearing liabilities | 659,710 | 704,136 | (44,426 | ) | -6.3 | % | |||||
| Total liabilities | 7,053,975 | 7,193,579 | (139,604 | ) | -1.9 | % | |||||
| Stockholders' equity | 824,317 | 875,358 | (51,041 | ) | -5.8 | % | |||||
| Total liabilities and stockholders' equity | $ | 7,878,292 | $ | 8,068,937 | $ | (190,645 | ) | -2.4 | % | ||
| Average interest-earning assets to average interest-bearing liabilities | 114.73 | % | 115.66 | % | (0.93)% | -0.8 | % | ||||
Kearny Financial Corp.
Performance Ratio Highlights
(Unaudited)
| Year Ended | ||||||
| June 30, 2024 | June 30, 2023 | Variance or Change | ||||
| Average yield on interest-earning assets: | ||||||
| Loans receivable, including loans held for sale | 4.45 | % | 4.00 | % | 0.45 | % |
| Taxable investment securities | 4.40 | % | 3.58 | % | 0.82 | % |
| Tax-exempt investment securities (1) | 2.28 | % | 2.29 | % | -0.01 | % |
| Other interest-earning assets | 7.03 | % | 4.36 | % | 2.67 | % |
| Total interest-earning assets | 4.48 | % | 3.91 | % | 0.57 | % |
| Average cost of interest-bearing liabilities: | ||||||
| Deposits: | ||||||
| Interest-bearing demand | 2.91 | % | 1.73 | % | 1.18 | % |
| Savings | 0.50 | % | 0.37 | % | 0.13 | % |
| Certificates of deposit | 2.92 | % | 1.64 | % | 1.28 | % |
| Total interest-bearing deposits | 2.58 | % | 1.47 | % | 1.11 | % |
| Borrowings: | ||||||
| Federal Home Loan Bank Advances | 3.70 | % | 3.43 | % | 0.27 | % |
| Other borrowings | 5.36 | % | 3.41 | % | 1.95 | % |
| Total borrowings | 3.89 | % | 3.42 | % | 0.47 | % |
| Total interest-bearing liabilities | 2.91 | % | 1.82 | % | 1.09 | % |
| Interest rate spread (2) | 1.57 | % | 2.09 | % | -0.52 | % |
| Net interest margin (3) | 1.94 | % | 2.34 | % | -0.40 | % |
| Non-interest income to average assets | (0.03)% | 0.03 | % | -0.06 | % | |
| Non-interest expense to average assets | 2.73 | % | 1.53 | % | 1.20 | % |
| Efficiency ratio (4) | 153.02 | % | 69.28 | % | 83.74 | % |
| Return on average assets | (1.10)% | 0.51 | % | -1.61 | % | |
| Return on average equity | (10.51)% | 4.66 | % | -15.17 | % | |
| Return on average tangible equity (5) | (13.64)% | 6.17 | % | -19.81 | % | |
_________________________
| (1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. |
| (2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
| (3) | Net interest income divided by average interest-earning assets. |
| (4) | Non-interest expense divided by the sum of net interest income and non-interest income. |
| (5) | Average tangible equity equals total average stockholders' equity reduced by average goodwill and average core deposit intangible assets. |
| Five-Quarter Financial Trend Analysis |
Kearny Financial Corp.
Consolidated Balance Sheets
| (Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||
| Assets | |||||||||||||||
| Cash and cash equivalents | $ | 63,864 | $ | 71,027 | $ | 73,860 | $ | 57,219 | $ | 70,515 | |||||
| Securities available for sale | 1,072,833 | 1,098,655 | 1,144,175 | 1,215,633 | 1,227,729 | ||||||||||
| Securities held to maturity | 135,742 | 139,643 | 141,959 | 143,730 | 146,465 | ||||||||||
| Loans held-for-sale | 6,036 | 4,117 | 14,030 | 3,934 | 9,591 | ||||||||||
| Loans receivable | 5,732,787 | 5,758,336 | 5,745,629 | 5,736,049 | 5,829,421 | ||||||||||
| Less: allowance for credit losses on loans | (44,939 | ) | (44,930 | ) | (44,867 | ) | (46,872 | ) | (48,734 | ) | |||||
| Net loans receivable | 5,687,848 | 5,713,406 | 5,700,762 | 5,689,177 | 5,780,687 | ||||||||||
| Premises and equipment | 44,940 | 45,053 | 45,928 | 46,868 | 48,309 | ||||||||||
| Federal Home Loan Bank stock | 80,300 | 81,347 | 83,372 | 81,509 | 71,734 | ||||||||||
| Accrued interest receivable | 29,521 | 31,065 | 30,258 | 29,766 | 28,133 | ||||||||||
| Goodwill | 113,525 | 210,895 | 210,895 | 210,895 | 210,895 | ||||||||||
| Core deposit intangible | 1,931 | 2,057 | 2,189 | 2,323 | 2,457 | ||||||||||
| Bank owned life insurance | 297,874 | 296,493 | 256,064 | 294,491 | 292,825 | ||||||||||
| Deferred income taxes, net | 50,339 | 47,225 | 46,116 | 56,500 | 51,973 | ||||||||||
| Other real estate owned | - | - | 11,982 | 12,956 | 12,956 | ||||||||||
| Other assets | 98,708 | 100,989 | 136,242 | 129,865 | 110,546 | ||||||||||
| Total assets | $ | 7,683,461 | $ | 7,841,972 | $ | 7,897,832 | $ | 7,974,866 | $ | 8,064,815 | |||||
| Liabilities | |||||||||||||||
| Deposits: | |||||||||||||||
| Non-interest-bearing | $ | 598,366 | $ | 586,089 | $ | 584,130 | $ | 595,141 | $ | 609,999 | |||||
| Interest-bearing | 4,559,757 | 4,622,961 | 4,735,500 | 4,839,027 | 5,019,184 | ||||||||||
| Total deposits | 5,158,123 | 5,209,050 | 5,319,630 | 5,434,168 | 5,629,183 | ||||||||||
| Borrowings | 1,709,789 | 1,722,178 | 1,667,055 | 1,626,933 | 1,506,812 | ||||||||||
| Advance payments by borrowers for taxes | 17,409 | 17,387 | 16,742 | 16,907 | 18,338 | ||||||||||
| Other liabilities | 44,569 | 44,279 | 46,427 | 47,324 | 41,198 | ||||||||||
| Total liabilities | 6,929,890 | 6,992,894 | 7,049,854 | 7,125,332 | 7,195,531 | ||||||||||
| Stockholders' Equity | |||||||||||||||
| Common stock | 644 | 644 | 645 | 652 | 659 | ||||||||||
| Paid-in capital | 493,680 | 493,187 | 493,297 | 497,269 | 503,332 | ||||||||||
| Retained earnings | 343,326 | 440,308 | 439,755 | 460,464 | 457,611 | ||||||||||
| Unearned ESOP shares | (20,916 | ) | (21,402 | ) | (21,889 | ) | (22,375 | ) | (22,862 | ) | |||||
| Accumulated other comprehensive loss | (63,163 | ) | (63,659 | ) | (63,830 | ) | (86,476 | ) | (69,456 | ) | |||||
| Total stockholders' equity | 753,571 | 849,078 | 847,978 | 849,534 | 869,284 | ||||||||||
| Total liabilities and stockholders' equity | $ | 7,683,461 | $ | 7,841,972 | $ | 7,897,832 | $ | 7,974,866 | $ | 8,064,815 | |||||
| Consolidated capital ratios | |||||||||||||||
| Equity to assets | 9.81 | % | 10.83 | % | 10.74 | % | 10.65 | % | 10.78 | % | |||||
| Tangible equity to tangible assets(1) | 8.43 | % | 8.34 | % | 8.26 | % | 8.20 | % | 8.35 | % | |||||
| Share data | |||||||||||||||
| Outstanding shares | 64,434 | 64,437 | 64,445 | 65,132 | 65,864 | ||||||||||
| Book value per share | $ | 11.70 | $ | 13.18 | $ | 13.16 | $ | 13.04 | $ | 13.20 | |||||
| Tangible book value per share(2) | $ | 9.90 | $ | 9.87 | $ | 9.85 | $ | 9.77 | $ | 9.96 | |||||
_________________________
| (1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. |
| (2) | Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. |
Kearny Financial Corp.
Supplemental Balance Sheet Highlights
(Unaudited)
| (Dollars in Thousands) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
| Loan portfolio composition: | |||||||||||||||
| Commercial loans: | |||||||||||||||
| Multi-family mortgage | $ | 2,645,851 | $ | 2,645,195 | $ | 2,651,274 | $ | 2,699,151 | $ | 2,761,775 | |||||
| Nonresidential mortgage | 948,075 | 965,539 | 947,287 | 946,801 | 968,574 | ||||||||||
| Commercial business | 142,747 | 147,326 | 144,134 | 149,229 | 146,861 | ||||||||||
| Construction | 209,237 | 229,457 | 221,933 | 230,703 | 226,609 | ||||||||||
| Total commercial loans | 3,945,910 | 3,987,517 | 3,964,628 | 4,025,884 | 4,103,819 | ||||||||||
| One- to four-family residential mortgage | 1,756,051 | 1,741,644 | 1,746,065 | 1,689,051 | 1,700,559 | ||||||||||
| Consumer loans: | |||||||||||||||
| Home equity loans | 44,104 | 42,731 | 43,517 | 42,896 | 43,549 | ||||||||||
| Other consumer | 2,685 | 3,198 | 2,728 | 2,644 | 2,549 | ||||||||||
| Total consumer loans | 46,789 | 45,929 | 46,245 | 45,540 | 46,098 | ||||||||||
| Total loans, excluding yield adjustments | 5,748,750 | 5,775,090 | 5,756,938 | 5,760,475 | 5,850,476 | ||||||||||
| Unaccreted yield adjustments | (15,963 | ) | (16,754 | ) | (11,309 | ) | (24,426 | ) | (21,055 | ) | |||||
| Loans receivable, net of yield adjustments | 5,732,787 | 5,758,336 | 5,745,629 | 5,736,049 | 5,829,421 | ||||||||||
| Less: allowance for credit losses on loans | (44,939 | ) | (44,930 | ) | (44,867 | ) | (46,872 | ) | (48,734 | ) | |||||
| Net loans receivable | $ | 5,687,848 | $ | 5,713,406 | $ | 5,700,762 | $ | 5,689,177 | $ | 5,780,687 | |||||
| Asset quality: | |||||||||||||||
| Nonperforming assets: | |||||||||||||||
| Accruing loans - 90 days and over past due | $ | - | $ | - | $ | - | $ | - | $ | - | |||||
| Nonaccrual loans | 39,882 | 39,546 | 28,089 | 37,912 | 42,627 | ||||||||||
| Total nonperforming loans | 39,882 | 39,546 | 28,089 | 37,912 | 42,627 | ||||||||||
| Nonaccrual loans held-for-sale | - | - | 9,700 | - | - | ||||||||||
| Other real estate owned | - | - | 11,982 | 12,956 | 12,956 | ||||||||||
| Total nonperforming assets | $ | 39,882 | $ | 39,546 | $ | 49,771 | $ | 50,868 | $ | 55,583 | |||||
| Nonperforming loans (% total loans) | 0.70 | % | 0.69 | % | 0.49 | % | 0.66 | % | 0.73 | % | |||||
| Nonperforming assets (% total assets) | 0.52 | % | 0.50 | % | 0.63 | % | 0.64 | % | 0.69 | % | |||||
| Classified loans | $ | 118,700 | $ | 115,772 | $ | 94,676 | $ | 98,616 | $ | 93,526 | |||||
| Allowance for credit losses on loans (ACL): | |||||||||||||||
| ACL to total loans | 0.78 | % | 0.78 | % | 0.78 | % | 0.81 | % | 0.83 | % | |||||
| ACL to nonperforming loans | 112.68 | % | 113.61 | % | 159.73 | % | 123.63 | % | 114.33 | % | |||||
| Net charge-offs | $ | 3,518 | $ | 286 | $ | 4,110 | $ | 2,107 | $ | 82 | |||||
| Average net charge-off rate (annualized) | 0.25 | % | 0.02 | % | 0.29 | % | 0.15 | % | 0.01 | % | |||||
Kearny Financial Corp.
Supplemental Balance Sheet Highlights
(Unaudited)
| (Dollars in Thousands) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
| Funding composition: | |||||||||||||||
| Deposits: | |||||||||||||||
| Non-interest-bearing deposits | $ | 598,367 | $ | 586,089 | $ | 584,130 | $ | 595,141 | $ | 609,999 | |||||
| Interest-bearing demand | 2,308,915 | 2,349,032 | 2,347,262 | 2,236,573 | 2,252,912 | ||||||||||
| Savings | 643,481 | 630,456 | 646,182 | 689,163 | 748,721 | ||||||||||
| Certificates of deposit (retail) | 1,199,127 | 1,235,261 | 1,283,676 | 1,300,382 | 1,377,028 | ||||||||||
| Certificates of deposit (brokered and listing service) | 408,234 | 408,212 | 458,380 | 612,909 | 640,523 | ||||||||||
| Interest-bearing deposits | 4,559,757 | 4,622,961 | 4,735,500 | 4,839,027 | 5,019,184 | ||||||||||
| Total deposits | 5,158,124 | 5,209,050 | 5,319,630 | 5,434,168 | 5,629,183 | ||||||||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 1,534,789 | 1,457,178 | 1,432,055 | 1,456,933 | 1,281,812 | ||||||||||
| Overnight borrowings | 175,000 | 265,000 | 235,000 | 170,000 | 225,000 | ||||||||||
| Total borrowings | 1,709,789 | 1,722,178 | 1,667,055 | 1,626,933 | 1,506,812 | ||||||||||
| Total funding | $ | 6,867,913 | $ | 6,931,228 | $ | 6,986,685 | $ | 7,061,101 | $ | 7,135,995 | |||||
| Loans as a % of deposits | 110.4 | % | 109.8 | % | 107.4 | % | 104.8 | % | 102.9 | % | |||||
| Deposits as a % of total funding | 75.1 | % | 75.2 | % | 76.1 | % | 77.0 | % | 78.9 | % | |||||
| Borrowings as a % of total funding | 24.9 | % | 24.8 | % | 23.9 | % | 23.0 | % | 21.1 | % | |||||
| Uninsured deposits: | |||||||||||||||
| Uninsured deposits (reported)(1) | $ | 1,772,623 | $ | 1,760,740 | $ | 1,813,122 | $ | 1,734,288 | $ | 1,771,416 | |||||
| Uninsured deposits (adjusted)(2) | $ | 764,447 | $ | 718,026 | $ | 694,510 | $ | 683,265 | $ | 710,377 | |||||
_________________________
| (1) | Uninsured deposits of Kearny Bank. |
| (2) | Uninsured deposits of Kearny Bank adjusted to exclude deposits of its wholly-owned subsidiary and holding company and collateralized deposits of state and local governments. |
Kearny Financial Corp.
Consolidated Statements of Income (Loss)
(Unaudited)
| Three Months Ended | |||||||||||||||
| (Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
| Interest income | |||||||||||||||
| Loans | $ | 65,819 | $ | 64,035 | $ | 63,384 | $ | 62,769 | $ | 62,044 | |||||
| Taxable investment securities | 14,802 | 15,490 | 16,756 | 16,265 | 15,736 | ||||||||||
| Tax-exempt investment securities | 80 | 85 | 84 | 87 | 91 | ||||||||||
| Other interest-earning assets | 2,289 | 2,475 | 2,401 | 2,047 | 1,821 | ||||||||||
| Total interest income | 82,990 | 82,085 | 82,625 | 81,168 | 79,692 | ||||||||||
| Interest expense | |||||||||||||||
| Deposits | 32,187 | 32,320 | 30,340 | 27,567 | 26,226 | ||||||||||
| Borrowings | 17,527 | 15,446 | 16,446 | 14,441 | 13,286 | ||||||||||
| Total interest expense | 49,714 | 47,766 | 46,786 | 42,008 | 39,512 | ||||||||||
| Net interest income | 33,276 | 34,319 | 35,839 | 39,160 | 40,180 | ||||||||||
| Provision for (reversal of) credit losses | 3,527 | 349 | 2,105 | 245 | (306 | ) | |||||||||
| Net interest income after provision for (reversal of) credit losses | 29,749 | 33,970 | 33,734 | 38,915 | 40,486 | ||||||||||
| Non-interest income | |||||||||||||||
| Fees and service charges | 580 | 657 | 624 | 748 | 699 | ||||||||||
| Loss on sale and call of securities | - | - | (18,135 | ) | - | - | |||||||||
| Gain (loss) on sale of loans | 111 | (712 | ) | 104 | 215 | 199 | |||||||||
| Loss on sale of other real estate owned | - | - | (974 | ) | - | (139 | ) | ||||||||
| Income from bank owned life insurance | 3,209 | 3,039 | 1,162 | 1,666 | 1,605 | ||||||||||
| Electronic banking fees and charges | 1,130 | 464 | 396 | 367 | 399 | ||||||||||
| Other income | 776 | 755 | 811 | 1,014 | 903 | ||||||||||
| Total non-interest income | 5,806 | 4,203 | (16,012 | ) | 4,010 | 3,666 | |||||||||
| Non-interest expense | |||||||||||||||
| Salaries and employee benefits | 17,266 | 16,911 | 17,282 | 17,761 | 17,315 | ||||||||||
| Net occupancy expense of premises | 2,738 | 2,863 | 2,674 | 2,758 | 2,862 | ||||||||||
| Equipment and systems | 3,785 | 3,823 | 3,814 | 3,801 | 3,511 | ||||||||||
| Advertising and marketing | 480 | 387 | 301 | 228 | 231 | ||||||||||
| Federal deposit insurance premium | 1,532 | 1,429 | 1,495 | 1,524 | 1,455 | ||||||||||
| Directors' compensation | 360 | 360 | 393 | 393 | 345 | ||||||||||
| Goodwill impairment | 97,370 | - | - | - | - | ||||||||||
| Other expense | 3,020 | 3,286 | 3,808 | 3,309 | 3,042 | ||||||||||
| Total non-interest expense | 126,551 | 29,059 | 29,767 | 29,774 | 28,761 | ||||||||||
| (Loss) income before income taxes | (90,996 | ) | 9,114 | (12,045 | ) | 13,151 | 15,391 | ||||||||
| Income taxes | (917 | ) | 1,717 | 1,782 | 3,309 | 3,378 | |||||||||
| Net (loss) income | $ | (90,079 | ) | $ | 7,397 | $ | (13,827 | ) | $ | 9,842 | $ | 12,013 | |||
| Net (loss) income per common share (EPS) | |||||||||||||||
| Basic | $ | (1.45 | ) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | |||
| Diluted | $ | (1.45 | ) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | |||
| Dividends declared | |||||||||||||||
| Cash dividends declared per common share | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.11 | |||||
| Cash dividends declared | $ | 6,903 | $ | 6,844 | $ | 6,882 | $ | 6,989 | $ | 7,007 | |||||
| Dividend payout ratio | -7.7 | % | 92.5 | % | -49.8 | % | 71.0 | % | 58.3 | % | |||||
| Weighted average number of common shares outstanding | |||||||||||||||
| Basic | 62,254 | 62,205 | 62,299 | 63,014 | 63,667 | ||||||||||
| Diluted | 62,254 | 62,211 | 62,299 | 63,061 | 63,667 | ||||||||||
Kearny Financial Corp.
Average Balance Sheet Data
(Unaudited)
| Three Months Ended | |||||||||||||||
| (Dollars in Thousands) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
| Assets | |||||||||||||||
| Interest-earning assets: | |||||||||||||||
| Loans receivable, including loans held-for-sale | $ | 5,743,008 | $ | 5,752,477 | $ | 5,726,321 | $ | 5,788,074 | $ | 5,932,541 | |||||
| Taxable investment securities | 1,343,541 | 1,382,064 | 1,509,165 | 1,516,393 | 1,529,582 | ||||||||||
| Tax-exempt investment securities | 13,737 | 14,614 | 15,025 | 15,483 | 16,346 | ||||||||||
| Other interest-earning assets | 128,257 | 125,155 | 139,740 | 130,829 | 128,158 | ||||||||||
| Total interest-earning assets | 7,228,543 | 7,274,310 | 7,390,251 | 7,450,779 | 7,606,627 | ||||||||||
| Non-interest-earning assets | 466,537 | 577,411 | 554,335 | 568,723 | 556,962 | ||||||||||
| Total assets | $ | 7,695,080 | $ | 7,851,721 | $ | 7,944,586 | $ | 8,019,502 | $ | 8,163,589 | |||||
| Liabilities and Stockholders' Equity | |||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Interest-bearing demand | $ | 2,310,521 | $ | 2,378,831 | $ | 2,301,169 | $ | 2,245,831 | $ | 2,321,120 | |||||
| Savings | 631,622 | 635,226 | 664,926 | 719,508 | 774,854 | ||||||||||
| Certificates of deposit | 1,613,798 | 1,705,513 | 1,824,316 | 1,968,512 | 2,057,818 | ||||||||||
| Total interest-bearing deposits | 4,555,941 | 4,719,570 | 4,790,411 | 4,933,851 | 5,153,792 | ||||||||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 1,507,192 | 1,428,801 | 1,513,497 | 1,386,473 | 1,374,316 | ||||||||||
| Other borrowings | 228,461 | 210,989 | 142,283 | 158,098 | 100,055 | ||||||||||
| Total borrowings | 1,735,653 | 1,639,790 | 1,655,780 | 1,544,571 | 1,474,371 | ||||||||||
| Total interest-bearing liabilities | 6,291,594 | 6,359,360 | 6,446,191 | 6,478,422 | 6,628,163 | ||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||
| Non-interest-bearing deposits | 589,438 | 581,870 | 597,294 | 612,251 | 608,765 | ||||||||||
| Other non-interest-bearing liabilities | 62,978 | 65,709 | 62,387 | 66,701 | 64,970 | ||||||||||
| Total non-interest-bearing liabilities | 652,416 | 647,579 | 659,681 | 678,952 | 673,735 | ||||||||||
| Total liabilities | 6,944,010 | 7,006,939 | 7,105,872 | 7,157,374 | 7,301,898 | ||||||||||
| Stockholders' equity | 751,070 | 844,782 | 838,714 | 862,128 | 861,691 | ||||||||||
| Total liabilities and stockholders' equity | $ | 7,695,080 | $ | 7,851,721 | $ | 7,944,586 | $ | 8,019,502 | $ | 8,163,589 | |||||
| Average interest-earning assets to average interest-bearing liabilities | 114.89 | % | 114.39 | % | 114.65 | % | 115.01 | % | 114.76 | % | |||||
Kearny Financial Corp.
Performance Ratio Highlights
| Three Months Ended | ||||||||||
| June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||
| Average yield on interest-earning assets: | ||||||||||
| Loans receivable, including loans held-for-sale | 4.58 | % | 4.45 | % | 4.43 | % | 4.34 | % | 4.18 | % |
| Taxable investment securities | 4.41 | % | 4.48 | % | 4.44 | % | 4.29 | % | 4.12 | % |
| Tax-exempt investment securities (1) | 2.32 | % | 2.32 | % | 2.25 | % | 2.25 | % | 2.23 | % |
| Other interest-earning assets | 7.14 | % | 7.91 | % | 6.87 | % | 6.26 | % | 5.68 | % |
| Total interest-earning assets | 4.59 | % | 4.51 | % | 4.47 | % | 4.36 | % | 4.19 | % |
| Average cost of interest-bearing liabilities: | ||||||||||
| Deposits: | ||||||||||
| Interest-bearing demand | 3.06 | % | 3.08 | % | 2.91 | % | 2.58 | % | 2.38 | % |
| Savings | 0.63 | % | 0.46 | % | 0.44 | % | 0.47 | % | 0.48 | % |
| Certificates of deposit | 3.35 | % | 3.11 | % | 2.82 | % | 2.49 | % | 2.24 | % |
| Total interest-bearing deposits | 2.83 | % | 2.74 | % | 2.53 | % | 2.23 | % | 2.04 | % |
| Borrowings: | ||||||||||
| Federal Home Loan Bank advances | 3.86 | % | 3.55 | % | 3.82 | % | 3.54 | % | 3.51 | % |
| Other borrowings | 5.24 | % | 5.22 | % | 5.65 | % | 5.46 | % | 4.89 | % |
| Total borrowings | 4.04 | % | 3.77 | % | 3.97 | % | 3.74 | % | 3.60 | % |
| Total interest-bearing liabilities | 3.16 | % | 3.00 | % | 2.90 | % | 2.59 | % | 2.38 | % |
| Interest rate spread (2) | 1.43 | % | 1.51 | % | 1.57 | % | 1.77 | % | 1.81 | % |
| Net interest margin (3) | 1.84 | % | 1.89 | % | 1.94 | % | 2.10 | % | 2.11 | % |
| Non-interest income to average assets (annualized) | 0.30 | % | 0.21 | % | -0.81 | % | 0.20 | % | 0.18 | % |
| Non-interest expense to average assets (annualized) | 6.58 | % | 1.48 | % | 1.50 | % | 1.49 | % | 1.41 | % |
| Efficiency ratio (4) | 323.81 | % | 75.43 | % | 150.13 | % | 68.97 | % | 65.60 | % |
| Return on average assets (annualized) | -4.68 | % | 0.38 | % | -0.70 | % | 0.49 | % | 0.59 | % |
| Return on average equity (annualized) | -47.97 | % | 3.50 | % | -6.59 | % | 4.57 | % | 5.58 | % |
| Return on average tangible equity (annualized) (5) | -56.69 | % | 4.68 | % | -8.84 | % | 6.07 | % | 7.41 | % |
_________________________
| (1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. |
| (2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
| (3) | Net interest income divided by average interest-earning assets. |
| (4) | Non-interest expense divided by the sum of net interest income and non-interest income. |
| (5) | Average tangible equity equals total average stockholders' equity reduced by average goodwill and average core deposit intangible assets. |
The following tables provide a reconciliation of certain financial measures calculated in accordance with Generally Accepted Accounting Principles ("GAAP") (as reported) and non-GAAP measures. These non-GAAP measures provide additional information which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.
Kearny Financial Corp.
Reconciliation of GAAP to Non-GAAP
(Unaudited)
| Three Months Ended | |||||||||||||||
| (Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
| Adjusted net income: | |||||||||||||||
| Net (loss) income (GAAP) | $ | (90,079 | ) | $ | 7,397 | $ | (13,827 | ) | $ | 9,842 | $ | 12,013 | |||
| Non-recurring transactions - net of tax: | |||||||||||||||
| Net effect of sale and call of securities | - | - | 12,876 | - | - | ||||||||||
| Net effect of bank-owned life insurance restructure | 392 | - | 6,286 | - | - | ||||||||||
| Goodwill impairment | 95,283 | - | - | - | - | ||||||||||
| Adjusted net income | $ | 5,596 | $ | 7,397 | $ | 5,335 | $ | 9,842 | $ | 12,013 | |||||
| Calculation of pre-tax, pre-provision net revenue: | |||||||||||||||
| Net (loss) income (GAAP) | $ | (90,079 | ) | $ | 7,397 | $ | (13,827 | ) | $ | 9,842 | $ | 12,013 | |||
| Adjustments to net income (GAAP): | |||||||||||||||
| Provision for income taxes | (917 | ) | 1,717 | 1,782 | 3,309 | 3,378 | |||||||||
| Provision for (reversal of) credit losses | 3,527 | 349 | 2,105 | 245 | (306 | ) | |||||||||
| Pre-tax, pre-provision net revenue (non-GAAP) | $ | (87,469 | ) | $ | 9,463 | $ | (9,940 | ) | $ | 13,396 | $ | 15,085 | |||
| Adjusted earnings per share: | |||||||||||||||
| Weighted average common shares - basic | 62,254 | 62,205 | 62,299 | 63,014 | 63,667 | ||||||||||
| Weighted average common shares - diluted | 62,330 | 62,211 | 62,367 | 63,061 | 63,667 | ||||||||||
| Earnings per share - basic (GAAP) | $ | (1.45 | ) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | |||
| Earnings per share - diluted (GAAP) | $ | (1.45 | ) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | |||
| Adjusted earnings per share - basic (non-GAAP) | $ | 0.09 | $ | 0.12 | $ | 0.09 | $ | 0.16 | $ | 0.19 | |||||
| Adjusted earnings per share - diluted (non-GAAP) | $ | 0.09 | $ | 0.12 | $ | 0.09 | $ | 0.16 | $ | 0.19 | |||||
| Pre-tax, pre-provision net revenue per share: | |||||||||||||||
| Pre-tax, pre-provision net revenue per share - basic (non-GAAP) | $ | (1.41 | ) | $ | 0.15 | $ | (0.16 | ) | $ | 0.21 | $ | 0.24 | |||
| Pre-tax, pre-provision net revenue per share - diluted (non-GAAP) | $ | (1.41 | ) | $ | 0.15 | $ | (0.16 | ) | $ | 0.21 | $ | 0.24 | |||
| Adjusted return on average assets: | |||||||||||||||
| Total average assets | $ | 7,695,080 | $ | 7,851,721 | $ | 7,944,586 | $ | 8,019,502 | $ | 8,163,589 | |||||
| Return on average assets (GAAP) | -4.68 | % | 0.38 | % | -0.70 | % | 0.49 | % | 0.59 | % | |||||
| Adjusted return on average assets (non-GAAP) | 0.29 | % | 0.38 | % | 0.27 | % | 0.49 | % | 0.59 | % | |||||
| Adjusted return on average equity: | |||||||||||||||
| Total average equity | $ | 751,070 | $ | 844,782 | $ | 838,714 | $ | 862,128 | $ | 861,691 | |||||
| Return on average equity (GAAP) | -47.97 | % | 3.50 | % | -6.59 | % | 4.57 | % | 5.58 | % | |||||
| Adjusted return on average equity (non-GAAP) | 2.98 | % | 3.50 | % | 2.54 | % | 4.57 | % | 5.58 | % | |||||
Kearny Financial Corp.
Reconciliation of GAAP to Non-GAAP
(Unaudited)
| Three Months Ended | |||||||||||||||
| (Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
| Adjusted return on average tangible equity: | |||||||||||||||
| Total average equity | $ | 751,070 | $ | 844,782 | $ | 838,714 | $ | 862,128 | $ | 861,691 | |||||
| Less: average goodwill | (113,525 | ) | (210,895 | ) | (210,895 | ) | (210,895 | ) | (210,895 | ) | |||||
| Less: average other intangible assets | (2,006 | ) | (2,138 | ) | (2,277 | ) | (2,411 | ) | (2,544 | ) | |||||
| Total average tangible equity | $ | 635,539 | $ | 631,749 | $ | 625,542 | $ | 648,822 | $ | 648,252 | |||||
| Return on average tangible equity (non-GAAP) | -56.69 | % | 4.68 | % | -8.84 | % | 6.07 | % | 7.41 | % | |||||
| Adjusted return on average tangible equity (non-GAAP) | 3.52 | % | 4.68 | % | 3.41 | % | 6.07 | % | 7.41 | % | |||||
| Adjusted non-interest expense ratio: | |||||||||||||||
| Non-interest expense (GAAP) | $ | 126,551 | $ | 29,059 | $ | 29,767 | $ | 29,774 | $ | 28,761 | |||||
| Non-recurring transactions: | |||||||||||||||
| Goodwill impairment | (97,370 | ) | - | - | - | - | |||||||||
| Non-interest expense (non-GAAP) | $ | 29,181 | $ | 29,059 | $ | 29,767 | $ | 29,774 | $ | 28,761 | |||||
| Non-interest expense ratio (GAAP) | 6.58 | % | 1.48 | % | 1.50 | % | 1.49 | % | 1.41 | % | |||||
| Adjusted non-interest expense ratio (non-GAAP) | 1.52 | % | 1.48 | % | 1.50 | % | 1.49 | % | 1.41 | % | |||||
| Adjusted efficiency ratio: | |||||||||||||||
| Non-interest expense (non-GAAP) | $ | 29,181 | $ | 29,059 | $ | 29,767 | $ | 29,774 | $ | 28,761 | |||||
| Net interest income (GAAP) | $ | 33,276 | $ | 34,319 | $ | 35,839 | $ | 39,160 | $ | 40,180 | |||||
| Total non-interest income (GAAP) | 5,806 | 4,203 | (16,012 | ) | 4,010 | 3,666 | |||||||||
| Non-recurring transactions: | |||||||||||||||
| Net effect of sale and call of securities | - | - | 18,135 | - | - | ||||||||||
| Net effect of bank-owned life insurance restructure | 392 | - | 573 | - | - | ||||||||||
| Total revenue (non-GAAP) | $ | 39,474 | $ | 38,522 | $ | 38,535 | $ | 43,170 | $ | 43,846 | |||||
| Efficiency ratio (GAAP) | 323.81 | % | 75.43 | % | 150.13 | % | 68.97 | % | 65.60 | % | |||||
| Adjusted efficiency ratio (non-GAAP) | 73.92 | % | 75.43 | % | 77.25 | % | 68.97 | % | 65.60 | % | |||||
Kearny Financial Corp.
Reconciliation of GAAP to Non-GAAP
(Unaudited)
| Year Ended | |||||||
| (Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | June 30, 2023 | |||||
| Adjusted net income: | |||||||
| Net (loss) income (GAAP) | $ | (86,667 | ) | $ | 40,811 | ||
| Non-recurring transactions - net of tax: | |||||||
| Branch consolidation expenses and impairment charges | - | 568 | |||||
| Net effect of sale and call of securities | 12,876 | 10,811 | |||||
| Net effect of sale of other assets | - | (2,081 | ) | ||||
| Severance expense from workforce realignment | - | 538 | |||||
| Net effect of bank-owned life insurance contract restructure | 6,678 | - | |||||
| Goodwill impairment | 95,283 | - | |||||
| Adjusted net income | $ | 28,170 | $ | 50,647 | |||
| Calculation of pre-tax, pre-provision net revenue: | |||||||
| Net (loss) income (GAAP) | (86,667 | ) | 40,811 | ||||
| Adjustments to net income (GAAP): | |||||||
| Provision for income taxes | $ | 5,891 | $ | 11,568 | |||
| Provision for (reversal of) credit losses | 6,226 | 2,486 | |||||
| Pre-tax, pre-provision net revenue (non-GAAP) | (74,550 | ) | 54,865 | ||||
| Adjusted earnings per share: | |||||||
| Weighted average common shares - basic | 62,444 | 64,804 | |||||
| Weighted average common shares - diluted | 62,444 | 64,804 | |||||
| Earnings per share - basic (GAAP) | $ | (1.39 | ) | $ | 0.63 | ||
| Earnings per share - diluted (GAAP) | $ | (1.39 | ) | $ | 0.63 | ||
| Adjusted earnings per share - basic (non-GAAP) | $ | 0.45 | $ | 0.78 | |||
| Adjusted earnings per share - diluted (non-GAAP) | $ | 0.45 | $ | 0.78 | |||
| Pre-tax, pre-provision net revenue per share: | |||||||
| Pre-tax, pre-provision net revenue per share - basic (non-GAAP) | $ | (1.19 | ) | $ | 0.85 | ||
| Pre-tax, pre-provision net revenue per share - diluted (non-GAAP) | $ | (1.19 | ) | $ | 0.85 | ||
| Adjusted return on average assets: | |||||||
| Total average assets | $ | 7,878,292 | $ | 8,068,937 | |||
| Return on average assets (GAAP) | -1.10 | % | 0.51 | % | |||
| Adjusted return on average assets (non-GAAP) | 0.36 | % | 0.63 | % | |||
| Adjusted return on average equity: | |||||||
| Total average equity | $ | 824,317 | $ | 875,358 | |||
| Return on average equity (GAAP) | -10.51 | % | 4.66 | % | |||
| Adjusted return on average equity (non-GAAP) | 3.42 | % | 5.79 | % | |||
| Adjusted return on average tangible equity: | |||||||
| Total average equity | $ | 824,317 | $ | 875,358 | |||
| Less: average goodwill | (186,685 | ) | (210,895 | ) | |||
| Less: average other intangible assets | (2,209 | ) | (2,757 | ) | |||
| Total average tangible equity | $ | 635,423 | $ | 661,706 | |||
| Return on average tangible equity (non-GAAP) | -13.64 | % | 6.17 | % | |||
| Adjusted return on average tangible equity (non-GAAP) | 4.43 | % | 7.65 | % | |||
Kearny Financial Corp.
Reconciliation of GAAP to Non-GAAP
(Unaudited)
| Year Ended | |||||||
| (Dollars in Thousands) | June 30, 2024 | June 30, 2023 | |||||
| Adjusted non-interest expense ratio: | |||||||
| Non-interest expense (GAAP) | $ | 215,151 | $ | 123,751 | |||
| Non-routine transactions: | |||||||
| Branch consolidation expenses and impairment charges | - | (800 | ) | ||||
| Severance expense from workforce realignment | - | (757 | ) | ||||
| Goodwill impairment | (97,370 | ) | - | ||||
| Non-interest expense (non-GAAP) | $ | 117,781 | $ | 122,194 | |||
| Non-interest expense ratio (GAAP) | 2.73 | % | 1.53 | % | |||
| Adjusted non-interest expense ratio (non-GAAP) | 1.50 | % | 1.51 | % | |||
| Adjusted efficiency ratio: | |||||||
| Non-interest expense (non-GAAP) | $ | 117,781 | $ | 122,194 | |||
| Net interest income (GAAP) | $ | 142,594 | $ | 175,865 | |||
| Total non-interest income (GAAP) | (1,993 | ) | 2,751 | ||||
| Non-routine transactions: | |||||||
| Net effect of sale and call of securities | 18,135 | 15,227 | |||||
| Net effect of sale of other assets | - | (2,931 | ) | ||||
| Net effect of bank-owned life insurance contract restructure | 965 | - | |||||
| Total revenue (non-GAAP) | $ | 159,701 | $ | 190,912 | |||
| Efficiency ratio (GAAP) | 153.02 | % | 69.28 | % | |||
| Adjusted efficiency ratio (non-GAAP) | 73.75 | % | 64.01 | % | |||
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