• Kearny Financial Corp. Announces Fourth Quarter and Fiscal Year End 2023 Results and Declaration of Cash Dividend

    Источник: Nasdaq GlobeNewswire / 27 июл 2023 08:30:02   America/New_York

    FAIRFIELD, N.J., July 27, 2023 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported net income for the quarter ended June 30, 2023 of $12.0 million, or $0.19 per diluted share, compared to $10.3 million, or $0.16 per diluted share, for the quarter ended March 31, 2023.

    For the fiscal year ended June 30, 2023, the Company reported net income of $40.8 million, or $0.63 per diluted share, compared to $67.5 million, or $0.95 per diluted share, for the fiscal year ended June 30, 2022. Net income for the years ended June 30, 2023 and June 30, 2022 was impacted by various non-recurring items, as described in further detail below.

    The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on August 23, 2023 to stockholders of record as of August 9, 2023.

    Craig L. Montanaro, President and Chief Executive Officer, commented, “The current operating environment for community banks remains challenging. An inverted yield curve, intense competition for deposits and slowing demand for loans all present near-term earnings headwinds for our industry. Despite these challenges I am pleased to report our success on several fronts.”

    Mr. Montanaro continued, “As expected, the rate of our net interest margin compression slowed, declining nine basis points quarter-over-quarter. Our operating efficiency initiative continues to gain traction, with adjusted non-interest expense down 2.7% from the prior quarter and 9.8% from our December 2022 non-interest expense run rate. We improved our capital position, increasing tangible common equity by 33 basis points from the prior quarter, while continuing to reduce outstanding shares via our repurchase program. Finally, our loan charge-off rate remains industry-leading, with full fiscal year 2023 net charge-offs of $810,000, or 0.01% of average loans.”

    Mr. Montanaro concluded, “While it remains to be seen how long this current environment persists, our balance sheet and risk profile position us well for long-term success. In the meantime, we remain committed to serving our clients and our communities, while continuing to build franchise and shareholder value.”

    Balance Sheet

    • Total assets were $8.06 billion at June 30, 2023, a decrease of $284.5 million, or 3.4%, from March 31, 2023 and an increase of $344.9 million, or 4.5%, from June 30, 2022.
    • Cash and cash equivalents totaled $70.5 million at June 30, 2023, a decrease of $124.1 million, or 63.8%, from March 31, 2023 and a decrease of $31.1 million, or 30.6%, from June 30, 2022.
    • Investment securities totaled $1.37 billion at June 30, 2023, a decrease of $42.6 million, or 3.0%, from March 31, 2023 and a decrease of $88.2 million, or 6.0%, from June 30, 2022.
    • Loans receivable totaled $5.83 billion at June 30, 2023, a decrease of $136.9 million, or 2.3%, from March 31, 2023 and an increase of $411.6 million, or 7.6%, from June 30, 2022. The decrease for the quarter and the increase for the year were largely driven by multi-family and nonresidential mortgage loans.
    • Deposits were $5.63 billion at June 30, 2023, a decrease of $174.2 million, or 3.0%, from March 31, 2023 and a decrease of $233.1 million, or 4.0%, from June 30, 2022. Excluding brokered certificates of deposit (“CDs”), deposits decreased $53.7 million, or 1.1%, from March 31, 2023 and $100.1 million, or 2.0%, from June 30, 2022. Excluding brokered CDs, the decrease for both the quarter and the year were largely driven by a decline in savings deposits, partially offset by growth in retail CDs.
    • The aggregate amount of uninsured deposits was $1.77 billion at June 30, 2023. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, the aggregate amount of uninsured deposits was $710.4 million, or 12.6% of total deposits.
    • Borrowings were $1.51 billion at June 30, 2023, a decrease of $104.9 million, or 6.5%, from March 31, 2023 and an increase of $605.5 million, or 67.2%, from June 30, 2022. At June 30, 2023, borrowings comprised $1.41 billion of advances from the Federal Home Loan Bank of New York and $100.0 million from unsecured fed funds lines of credit.
    • At June 30, 2023, the Company maintained available secured borrowing capacity of $2.44 billion, of which $1.96 billion was immediately accessible via in-place collateral and $477.0 million represented the market value of unpledged securities.

    Earnings

    Performance Highlights

    • Return on average assets was 0.59% and 0.50% for the quarters ended June 30, 2023 and March 31, 2023, respectively, and 0.51% and 0.93% for the years ended June 30, 2023 and 2022, respectively.
    • Return on average equity was 5.58% and 4.69% for the quarters ended June 30, 2023 and March 31, 2023, respectively, and 4.66% and 6.86% for the years ended June 30, 2023 and 2022, respectively.
    • Return on average tangible equity was 7.41% and 6.20% for the quarters ended June 30, 2023 and March 31, 2023, respectively, and 6.17% and 8.77% for the years ended June 30, 2023 and 2022, respectively.

    Net Interest Income and Net Interest Margin

    • Net interest margin contracted nine basis points to 2.11% for the quarter ended June 30, 2023 and 60 basis points to 2.34% for the year ended June 30, 2023. The decrease for the quarter was due largely to an increase in the cost of interest-bearing deposits, partially offset by an increase in the yield on interest-earning assets. The decrease for the year was due largely to increases in the cost and average balance of interest-earning liabilities, partially offset by increases in yield on and average balance of interest-earning assets.
    • For the quarter ended June 30, 2023, net interest income decreased $2.2 million to $40.2 million from $42.4 million for the quarter ended March 31, 2023. Included in net interest income for the quarters ended June 30, 2023 and March 31, 2023, respectively, was purchase accounting accretion of $887,000 and $711,000, and loan prepayment penalty income of $185,000 and $103,000.
    • For the year ended June 30, 2023, net interest income decreased $20.7 million to $175.9 million from $196.6 million for the year ended June 30, 2022. Included in net interest income for the years ended June 30, 2023 and 2022, respectively, was purchase accounting accretion of $5.3 million and $9.0 million, and loan prepayment penalty income of $895,000 and $5.4 million.

    Non-Interest Income

    • For the quarter ended June 30, 2023, non-interest income increased $2.0 million to $3.7 million. The increase was primarily attributable to a loss on sale of loans of $2.4 million during the quarter ended March 31, 2023.
    • For the year ended June 30, 2023, non-interest income decreased $11.2 million to $2.8 million. The decrease was primarily attributable to a loss of $15.2 million on the sale of securities during the current year, partially offset by a non-recurring gain of $2.9 million attributable to the sale of a former branch location.

    Non-Interest Expense

    • For the quarter ended June 30, 2023, non-interest expense decreased $1.6 million, or 5.2%, to $28.8 million from $30.4 million for the quarter ended March 31, 2023. The decrease was primarily attributable to branch consolidation expense recorded in the comparative period and a decrease in salaries and benefits expense.
    • For the year ended June 30, 2022, non-interest expense decreased $2.0 million to $123.8 million from $125.7 million for the year ended June 30, 2022. The decrease was primarily attributable to decreases in occupancy, equipment and systems, directors’ compensation and salaries and benefits expenses, partially offset by an increase in federal deposit insurance premiums.
    • For the year ended June 30, 2023, the Company recorded $800,000 of branch consolidation expense, of which $250,000 was recorded in occupancy expense and $550,000 was recorded in other expense, and $757,000 of severance expense from a workforce realignment. For the year ended June 30, 2022, the Company recorded $1.9 million of branch consolidation expense and impairment charges, of which $1.5 million was recorded in occupancy expense and $420,000 was recorded in other expense, and $800,000 of expense from the early termination of a contract with a service provider.
    • The efficiency and non-interest expense ratios were 65.60% and 1.41%, respectively, for the quarter ended June 30, 2023, as compared to 68.96% and 1.47%, respectively, for the quarter ended March 31, 2023. The efficiency and non-interest expense ratios were 69.28% and 1.53%, respectively, for the year ended June 30, 2023, as compared to 59.71% and 1.73%, respectively, for the year ended June 30, 2022.

    Income Taxes

    • Income tax expense totaled $3.4 million for the quarter ended June 30, 2023 compared to $2.9 million for the quarter ended March 31, 2023, resulting in an effective tax rate of 21.9% and 22.0%, respectively. Income tax expense totaled $11.6 million for the year ended June 30, 2023 compared to $24.8 million for the year ended June 30, 2022, resulting in an effective tax rate of 22.1% and 26.9%, respectively.

    Asset Quality

    • The balance of non-performing assets decreased $1.9 million to $55.6 million, or 0.69% of total assets, at June 30, 2023, from $57.4 million, or 0.69% of total assets, at March 31, 2023. The balance of non-performing assets was $92.2 million, or 1.19% of total assets, at June 30, 2022.
    • Net charge-offs totaled $82,000, or 0.01% of average loans, on an annualized basis, for the quarter ended June 30, 2023, compared to $206,000, or 0.01% of average loans, on an annualized basis, for the quarter ended March 31, 2023. For the year ended June 30, 2023, net charge-offs totaled $810,000, or 0.01% of average loans, compared to $3.6 million, or 0.07% of average loans, for the year ended June 30, 2022.
    • For the quarter ended June 30, 2023, the Company recorded a reversal of credit losses of $306,000, compared to a provision for credit losses of $451,000 for the quarter ended March 31, 2023. The reversal for the quarter ended June 30, 2023 was largely driven by a decrease in the balance of loans receivable, partially offset by a net increase in reserves on loans individually analyzed for impairment. For the years ended June 30, 2023 and 2022, the Company recorded a provision for credit losses of $2.5 million and a reversal of credit losses of $7.5 million, respectively.
    • The allowance for credit losses was $48.7 million, or 0.83% of total loans, at June 30, 2023, compared to $49.1 million, or 0.82% of total loans, at March 31, 2023 and $47.1 million, or 0.87% of total loans, at June 30, 2022.

    Capital

    • For the quarter ended June 30, 2023, book value per share increased $0.21, or 1.6%, to $13.20 while tangible book value per share increased $0.17, or 1.7%, to $9.96. For the year ended June 30, 2023, book value per share increased $0.18, or 1.4%, to $13.20 while tangible book value per share increased $0.06, or 0.6%, to $9.96.
    • During the quarter and year ended June 30, 2023, the Company repurchased 812,506 and 2,820,398 shares of common stock at a cost of $6.4 million and $27.4 million, or $7.83 and $9.73 per share, respectively.
    • At June 30, 2023, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $111.1 million, partially offset by after-tax unrealized gains on derivatives of $41.5 million. After-tax net unrecognized losses on securities held to maturity of $10.9 million were not reflected in total stockholders’ equity.
    • At June 30, 2023, the Company’s tangible equity to tangible assets ratio equaled 8.35% and the regulatory capital ratios of both the Company and the Bank were in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.

    This earnings release should be read in conjunction with Kearny Financial Corp.’s Q4 2023 Investor Presentation, a copy of which is available through the Investor Relations link located at the bottom of the page of our website at www.kearnybank.com and via a Current Report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.

    Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

    For further information contact:
    Craig L. Montanaro, President and Chief Executive Officer, or
    Keith Suchodolski, Senior 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,
    2023    		March 31,
    2023    		Variance
    or Change    		Variance
    or Change Pct.
    Assets    
    Cash and cash equivalents$70,515 $194,568 $(124,053)-63.8%
    Securities available for sale 1,227,729  1,267,066  (39,337)-3.1%
    Securities held to maturity 146,465  149,764  (3,299)-2.2%
    Loans held-for-sale 9,591  5,401  4,190 77.6%
    Loans receivable 5,829,421  5,966,325  (136,904)-2.3%
    Less: allowance for credit losses on loans (48,734) (49,122) (388)-0.8%
    Net loans receivable 5,780,687  5,917,203  (136,516)-2.3%
    Premises and equipment 48,309  49,589  (1,280)-2.6%
    Federal Home Loan Bank stock 71,734  76,319  (4,585)-6.0%
    Accrued interest receivable 28,133  28,794  (661)-2.3%
    Goodwill 210,895  210,895  — —%
    Core deposit intangible 2,457  2,590  (133)-5.1%
    Bank owned life insurance 292,825  291,220  1,605 0.6%
    Deferred income taxes, net 51,973  53,151  (1,178)-2.2%
    Other real estate owned 12,956  13,410  (454)-3.4%
    Other assets 110,546  89,366  21,180 23.7%
    Total assets$8,064,815 $8,349,336 $(284,521)-3.4%
         
    Liabilities    
    Deposits:    
    Non-interest-bearing$609,999 $617,778 $(7,779)-1.3%
    Interest-bearing 5,019,184  5,185,626  (166,442)-3.2%
    Total deposits 5,629,183  5,803,404  (174,221)-3.0%
    Borrowings 1,506,812  1,611,692  (104,880)-6.5%
    Advance payments by borrowers for taxes 18,338  18,706  (368)-2.0%
    Other liabilities 41,198  49,304  (8,106)-16.4%
    Total liabilities 7,195,531  7,483,106  (287,575)-3.8%
         
    Stockholders' Equity    
    Common stock 659  667  (8)-1.2%
    Paid-in capital 503,332  509,359  (6,027)-1.2%
    Retained earnings 457,611  452,605  5,006 1.1%
    Unearned ESOP shares (22,862) (23,348) 486 2.1%
    Accumulated other comprehensive loss (69,456) (73,053) 3,597 4.9%
    Total stockholders' equity 869,284  866,230  3,054 0.4%
    Total liabilities and stockholders' equity$8,064,815 $8,349,336 $(284,521)-3.4%
         
    Consolidated capital ratios    
    Equity to assets 10.78% 10.37% 0.41% 
    Tangible equity to tangible assets(1) 8.35% 8.02% 0.33% 
         
    Share data    
    Outstanding shares 65,864  66,680  (816)-1.2%
    Book value per share$13.20 $12.99 $0.21 1.6%
    Tangible book value per share(2)$9.96 $9.79 $0.17 1.7%

    _________________________

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


    Kearny Financial Corp.
    Consolidated Statements of Income
    (Unaudited)

    (Dollars and Shares in Thousands,
    Except Per Share Data)

    		Three Months EndedVariance
    or Change
    		Variance
    or Change Pct.
    June 30,
    2023    		March 31,
    2023
    Interest income    
    Loans$62,044 $60,172 $1,872 3.1%
    Taxable investment securities 15,736  15,459  277 1.8%
    Tax-exempt investment securities 91  99  (8)-8.1%
    Other interest-earning assets 1,821  1,441  380 26.4%
    Total interest income 79,692  77,171  2,521 3.3%
         
    Interest expense    
    Deposits 26,226  22,246  3,980 17.9%
    Borrowings 13,286  12,554  732 5.8%
    Total interest expense 39,512  34,800  4,712 13.5%
    Net interest income 40,180  42,371  (2,191)-5.2%
    (Reversal of) provision for credit losses (306) 451  (757)-167.8%
    Net interest income after (reversal of) provision for credit losses 40,486  41,920  (1,434)-3.4%
         
    Non-interest income    
    Fees and service charges 699  910  (211)-23.2%
    Gain (loss) on sale of loans 199  (2,373) 2,572 -108.4%
    Loss on sale of other real estate owned (139) —  (139)—%
    Income from bank owned life insurance 1,605  1,581  24 1.5%
    Electronic banking fees and charges 399  457  (58)-12.7%
    Other income 903  1,071  (168)-15.7%
    Total non-interest income 3,666  1,646  2,020 122.7%
         
    Non-interest expense    
    Salaries and employee benefits 17,315  18,005  (690)-3.8%
    Net occupancy expense of premises 2,862  3,097  (235)-7.6%
    Equipment and systems 3,511  3,537  (26)-0.7%
    Advertising and marketing 231  413  (182)-44.1%
    Federal deposit insurance premium 1,455  1,546  (91)-5.9%
    Directors' compensation 345  340  5 1.5%
    Other expense 3,042  3,414  (372)-10.9%
    Total non-interest expense 28,761  30,352  (1,591)-5.2%
    Income before income taxes 15,391  13,214  2,177 16.5%
    Income taxes 3,378  2,902  476 16.4%
    Net income$12,013 $10,312 $1,701 16.5%
         
    Net income per common share (EPS)    
    Basic$0.19 $0.16 $0.03  
    Diluted$0.19 $0.16 $0.03  
         
    Dividends declared    
    Cash dividends declared per common share$0.11 $0.11 $—  
    Cash dividends declared$7,007 $7,196 $(189) 
    Dividend payout ratio 58.3% 69.8%(11.5)        % 
         
    Weighted average number of common shares outstanding    
    Basic 63,667  64,769  (1,102) 
    Diluted 63,667  64,783  (1,116) 
               

    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)

    (Dollars in Thousands)

    		Three Months EndedVariance
    or Change
    		Variance
    or Change Pct.
    June 30,
    2023    		March 31,
    2023
    Assets    
    Interest-earning assets:    
    Loans receivable, including loans held for sale$5,932,541 $5,986,669 $(54,128)-0.9%
    Taxable investment securities 1,529,582  1,558,222  (28,640)-1.8%
    Tax-exempt investment securities 16,346  17,663  (1,317)-7.5%
    Other interest-earning assets 128,158  131,682  (3,524)-2.7%
    Total interest-earning assets 7,606,627  7,694,236  (87,609)-1.1%
    Non-interest-earning assets 556,962  575,009  (18,047)-3.1%
    Total assets$8,163,589 $8,269,245 $(105,656)-1.3%
         
    Liabilities and Stockholders' Equity    
    Interest-bearing liabilities:    
    Deposits:    
    Interest-bearing demand$2,321,120 $2,363,762 $(42,642)-1.8%
    Savings 774,854  858,673  (83,819)-9.8%
    Certificates of deposit 2,057,818  2,069,396  (11,578)-0.6%
    Total interest-bearing deposits 5,153,792  5,291,831  (138,039)-2.6%
    Borrowings:    
    Federal Home Loan Bank advances 1,374,316  1,402,269  (27,953)-2.0%
    Other borrowings 100,055  1,611  98,444 6110.7%
    Total borrowings 1,474,371  1,403,880  70,491 5.0%
    Total interest-bearing liabilities 6,628,163  6,695,711  (67,548)-1.0%
    Non-interest-bearing liabilities:    
    Non-interest-bearing deposits 608,765  634,324  (25,559)-4.0%
    Other non-interest-bearing liabilities 64,970  60,327  4,643 7.7%
    Total non-interest-bearing liabilities 673,735  694,651  (20,916)-3.0%
    Total liabilities 7,301,898  7,390,362  (88,464)-1.2%
    Stockholders' equity 861,691  878,883  (17,192)-2.0%
    Total liabilities and stockholders' equity$8,163,589 $8,269,245 $(105,656)-1.3%
         
    Average interest-earning assets to average interest-bearing liabilities 114.76% 114.91% -0.15%-0.1%
                

    Kearny Financial Corp.
    Performance Ratio Highlights
    (Unaudited)

     Three Months EndedVariance
    or Change
     June 30,
    2023    		March 31,
    2023
    Average yield on interest-earning assets:   
    Loans receivable, including loans held for sale4.18%4.02%0.16%
    Taxable investment securities4.12%3.97%0.15%
    Tax-exempt investment securities (1)2.23%2.23%—%
    Other interest-earning assets5.68%4.38%1.30%
    Total interest-earning assets4.19%4.01%0.18%
        
    Average cost of interest-bearing liabilities:   
    Deposits:   
    Interest-bearing demand2.38%2.01%0.37%
    Savings0.48%0.41%0.07%
    Certificates of deposit2.24%1.84%0.40%
    Total interest-bearing deposits2.04%1.68%0.36%
    Borrowings:   
    Federal Home Loan Bank advances3.51%3.58%-0.07%
    Other borrowings4.89%5.15%-0.26%
    Total borrowings3.60%3.58%0.02%
    Total interest-bearing liabilities2.38%2.08%0.30%
        
    Interest rate spread (2)1.81%1.93%-0.12%
    Net interest margin (3)2.11%2.20%-0.09%
        
    Non-interest income to average assets (annualized)0.18%0.08%0.10%
    Non-interest expense to average assets (annualized)1.41%1.47%-0.06%
        
    Efficiency ratio (4)65.60%68.96%-3.36%
        
    Return on average assets (annualized)0.59%0.50%0.09%
    Return on average equity (annualized)5.58%4.69%0.89%
    Return on average tangible equity (annualized) (5)7.41%6.20%1.21%

    _________________________

    (1)The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
    (2)Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
    (3)Net interest income divided by average interest-earning assets.
    (4)Non-interest expense divided by the sum of net interest income and non-interest income.
    (5)Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.


    Year-to-Year Comparative Financial Analysis
     

    Kearny Financial Corp.
    Consolidated Balance Sheets

    (Dollars and Shares in Thousands,
    Except Per Share Data)    		June 30,
    2023    		June 30,
    2022    		Variance
    or Change    		Variance
    or Change Pct.
     (Unaudited)(Audited)  
    Assets    
    Cash and cash equivalents$70,515 $101,615 $(31,100)-30.6%
    Securities available for sale 1,227,729  1,344,093  (116,364)-8.7%
    Securities held to maturity 146,465  118,291  28,174 23.8%
    Loans held-for-sale 9,591  28,874  (19,283)-66.8%
    Loans receivable, including yield adjustments 5,829,421  5,417,845  411,576 7.6%
    Less: allowance for credit losses on loans (48,734) (47,058) 1,676 3.6%
    Net loans receivable 5,780,687  5,370,787  409,900 7.6%
    Premises and equipment 48,309  53,281  (4,972)-9.3%
    Federal Home Loan Bank of New York stock 71,734  47,144  24,590 52.2%
    Accrued interest receivable 28,133  20,466  7,667 37.5%
    Goodwill 210,895  210,895  — 0.0%
    Core deposit intangible 2,457  3,020  (563)-18.6%
    Bank owned life insurance 292,825  289,177  3,648 1.3%
    Deferred income tax assets, net 51,973  49,350  2,623 5.3%
    Other real estate owned 12,956  178  12,778 7178.7%
    Other assets 110,546  82,712  27,834 33.7%
    Total assets$8,064,815 $7,719,883 $344,932 4.5%
         
    Liabilities    
    Deposits:    
    Non-interest-bearing$609,999 $653,899 $(43,900)-6.7%
    Interest-bearing 5,019,184  5,208,357  (189,173)-3.6%
    Total deposits 5,629,183  5,862,256  (233,073)-4.0%
    Borrowings 1,506,812  901,337  605,475 67.2%
    Advance payments by borrowers for taxes 18,338  16,746  1,592 9.5%
    Other liabilities 41,198  45,544  (4,346)-9.5%
    Total liabilities 7,195,531  6,825,883  369,648 5.4%
         
    Stockholders' Equity    
    Common stock$659 $687 $(28)-4.1%
    Paid-in capital 503,332  528,396  (25,064)-4.7%
    Retained earnings 457,611  445,451  12,160 2.7%
    Unearned ESOP shares (22,862) (24,807) 1,945 -7.8%
    Accumulated other comprehensive loss (69,456) (55,727) (13,729)24.6%
    Total stockholders' equity 869,284  894,000  (24,716)-2.8%
    Total liabilities and stockholders' equity$8,064,815 $7,719,883 $344,932 4.5%
         
    Consolidated capital ratios    
    Equity to assets 10.78% 11.58% -0.80% 
    Tangible equity to tangible assets(1) 8.35% 9.06% -0.71% 
         
    Share data    
    Outstanding shares 65,864  68,666  (2,802)-4.1%
    Book value per share$13.20 $13.02 $0.18 1.4%
    Tangible book value per share(2)$9.96 $9.90 $0.06 0.6%

    _________________________

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


    Kearny Financial Corp.
    Consolidated Statements of Income

     Year Ended  
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		June 30,
    2023    		June 30,
    2022    		Variance
    or Change    		Variance
    or Change Pct.
     (Unaudited)(Audited)  
    Interest income    
    Loans$233,147 $190,520 $42,627 22.4%
    Taxable investment securities 54,855  32,746  22,109 67.5%
    Tax-exempt investment securities 694  1,273  (579)-45.5%
    Other interest-earning assets 5,028  1,733  3,295 190.1%
    Total Interest Income 293,724  226,272  67,452 29.8%
         
    Interest expense    
    Deposits 78,163  15,208  62,955 414.0%
    Borrowings 39,696  14,461  25,235 174.5%
    Total interest expense 117,859  29,669  88,190 297.2%
    Net interest income 175,865  196,603  (20,738)-10.5%
    Provision for (reversal of) credit losses 2,486  (7,518) 10,004 -133.1%
    Net interest income after provision for (reversal of) credit losses 173,379  204,121  (30,742)-15.1%
         
    Non-interest income    
    Fees and service charges 3,106  2,580  526 20.4%
    Loss on sale and call of securities (15,227) (559) (14,668)2624.0%
    (Loss) gain on sale of loans (1,645) 2,539  (4,184)-164.8%
    (Loss) gain on sale of real estate owned (139) 5  (144)-2880.0%
    Income from bank owned life insurance 8,645  6,167  2,478 40.2%
    Electronic banking fees and charges 1,759  1,626  133 8.2%
    Other income 6,252  1,576  4,676 296.7%
    Total non-interest income 2,751  13,934  (11,183)-80.3%
         
    Non-interest expense    
    Salaries and employee benefits 75,589  76,264  (675)-0.9%
    Net occupancy expense of premises 12,036  14,114  (2,078)-14.7%
    Equipment and systems 14,577  15,886  (1,309)-8.2%
    Advertising and marketing 2,122  2,059  63 3.1%
    Federal deposit insurance premium 5,133  2,455  2,678 109.1%
    Directors' compensation 1,364  2,132  (768)-36.0%
    Other expense 12,930  12,798  132 1.0%
    Total non-interest expense 123,751  125,708  (1,957)-1.6%
    Income before income taxes 52,379  92,347  (39,968)-43.3%
    Income taxes 11,568  24,800  (13,232)-53.4%
    Net income$40,811 $67,547 $(26,736)-39.6%
         
    Net income per common share (EPS)    
    Basic$0.63 $0.95 $(0.32) 
    Diluted$0.63 $0.95 $(0.32) 
         
    Dividends declared    
    Cash dividends declared per common share$0.44 $0.43 $0.01  
    Cash dividends declared$28,651 $30,463 $(1,812) 
    Dividend payout ratio 70.2% 45.1% 25.1% 
         
    Weighted average number of common shares outstanding    
    Basic 64,804  70,911  (6,107) 
    Diluted 64,804  70,933  (6,129) 
               

    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)

     Year Ended  
    (Dollars in Thousands)June 30,
    2023    		June 30,
    2022    		Variance
    or Change    		Variance
    or Change Pct.
    Assets    
    Interest-earning assets:    
    Loans receivable, including loans held for sale$5,827,123 $4,922,400 $904,723 18.4%
    Taxable investment securities 1,532,961  1,622,475  (89,514)-5.5%
    Tax-exempt investment securities 30,332  55,981  (25,649)-45.8%
    Other interest-earning assets 115,390  82,802  32,588 39.4%
    Total interest-earning assets 7,505,806  6,683,658  822,148 12.3%
    Non-interest-earning assets 563,131  598,712  (35,581)-5.9%
    Total assets$8,068,937 $7,282,370 $786,567 10.8%
         
    Liabilities and Stockholders' Equity    
    Interest-bearing liabilities:    
    Deposits:    
    Interest-bearing demand$2,349,802 $2,067,200 $282,602 13.7%
    Savings 896,651  1,088,971  (192,320)-17.7%
    Certificates of deposit 2,083,864  1,711,276  372,588 21.8%
    Total interest-bearing deposits 5,330,317  4,867,447  462,870 9.5%
    Borrowings:    
    Federal Home Loan Bank Advances 1,101,658  679,388  422,270 62.2%
    Other borrowings 57,468  72,841  (15,373)-21.1%
    Total borrowings 1,159,126  752,229  406,897 54.1%
    Total interest-bearing liabilities 6,489,443  5,619,676  869,767 15.5%
    Non-interest-bearing liabilities:    
    Non-interest-bearing deposits 644,543  624,666  19,877 3.2%
    Other non-interest-bearing liabilities 59,593  53,477  6,116 11.4%
    Total non-interest-bearing liabilities 704,136  678,143  25,993 3.8%
    Total liabilities 7,193,579  6,297,819  895,760 14.2%
    Stockholders' equity 875,358  984,551  (109,193)-11.1%
    Total liabilities and stockholders' equity$8,068,937 $7,282,370 $786,567 10.8%
         
    Average interest-earning assets to average interest-bearing liabilities 115.66% 118.93%(3.27)        %-2.8%
              

    Kearny Financial Corp.
    Performance Ratio Highlights
    (Unaudited)

     Year Ended 
     June 30,
    2023    		June 30,
    2022    		Variance
    or Change
    Average yield on interest-earning assets:   
    Loans receivable, including loans held for sale4.00%3.87%0.13%
    Taxable investment securities3.58%2.02%1.56%
    Tax-exempt investment securities (1)2.29%2.27%0.02%
    Other interest-earning assets4.36%2.09%2.27%
    Total interest-earning assets3.91%3.39%0.52%
        
    Average cost of interest-bearing liabilities:   
    Deposits:   
    Interest-bearing demand1.73%0.25%1.48%
    Savings0.37%0.11%0.26%
    Certificates of deposit1.64%0.52%1.12%
    Total interest-bearing deposits1.47%0.31%1.16%
    Borrowings:   
    Federal Home Loan Bank Advances3.43%2.07%1.36%
    Other borrowings3.41%0.54%2.87%
    Total borrowings3.42%1.92%1.50%
    Total interest-bearing liabilities1.82%0.53%1.29%
        
    Interest rate spread (2)2.09%2.86%-0.77%
    Net interest margin (3)2.34%2.94%-0.60%
        
    Non-interest income to average assets0.03%0.19%-0.16%
    Non-interest expense to average assets1.53%1.73%-0.20%
        
    Efficiency ratio (4)69.28%59.71%9.57%
        
    Return on average assets0.51%0.93%-0.42%
    Return on average equity4.66%6.86%-2.20%
    Return on average tangible equity (5)6.17%8.77%-2.60%

    _________________________

    (1)The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
    (2)Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
    (3)Net interest income divided by average interest-earning assets.
    (4)Non-interest expense divided by the sum of net interest income and non-interest income.
    (5)Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.


     
    Five-Quarter Financial Trend Analysis

    Kearny Financial Corp.
    Consolidated Balance Sheets

    (Dollars and Shares in Thousands,
    Except Per Share Data)    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022
     (Unaudited)(Unaudited)(Unaudited)(Unaudited)(Audited)
    Assets     
    Cash and cash equivalents$70,515 $194,568 $75,660 $96,076 $101,615 
    Securities available for sale 1,227,729  1,267,066  1,286,354  1,263,176  1,344,093 
    Securities held to maturity 146,465  149,764  153,786  115,943  118,291 
    Loans held-for-sale 9,591  5,401  12,940  12,936  28,874 
    Loans receivable 5,829,421  5,966,325  5,984,133  5,656,370  5,417,845 
    Less: allowance for credit losses on loans (48,734) (49,122) (48,877) (47,613) (47,058)
    Net loans receivable 5,780,687  5,917,203  5,935,256  5,608,757  5,370,787 
    Premises and equipment 48,309  49,589  50,953  52,642  53,281 
    Federal Home Loan Bank stock 71,734  76,319  69,022  44,957  47,144 
    Accrued interest receivable 28,133  28,794  27,368  23,817  20,466 
    Goodwill 210,895  210,895  210,895  210,895  210,895 
    Core deposit intangible 2,457  2,590  2,732  2,876  3,020 
    Bank owned life insurance 292,825  291,220  289,673  289,690  289,177 
    Deferred income taxes, net 51,973  53,151  51,107  54,278  49,350 
    Other real estate owned 12,956  13,410  13,410  178  178 
    Other assets 110,546  89,366  110,162  113,369  82,712 
    Total assets$8,064,815 $8,349,336 $8,289,318 $7,889,590 $7,719,883 
          
    Liabilities     
    Deposits:     
    Non-interest-bearing$609,999 $617,778 $650,950 $683,406 $653,899 
    Interest-bearing 5,019,184  5,185,626  5,320,421  5,424,872  5,208,357 
    Total deposits 5,629,183  5,803,404  5,971,371  6,108,278  5,862,256 
    Borrowings 1,506,812  1,611,692  1,383,573  851,454  901,337 
    Advance payments by borrowers for taxes 18,338  18,706  17,307  16,555  16,746 
    Other liabilities 41,198  49,304  44,427  38,329  45,544 
    Total liabilities 7,195,531  7,483,106  7,416,678  7,014,616  6,825,883 
          
    Stockholders' Equity     
    Common stock 659  667  674  680  687 
    Paid-in capital 503,332  509,359  515,332  520,245  528,396 
    Retained earnings 457,611  452,605  449,489  454,710  445,451 
    Unearned ESOP shares (22,862) (23,348) (23,834) (24,321) (24,807)
    Accumulated other comprehensive loss (69,456) (73,053) (69,021) (76,340) (55,727)
    Total stockholders' equity 869,284  866,230  872,640  874,974  894,000 
    Total liabilities and stockholders' equity$8,064,815 $8,349,336 $8,289,318 $7,889,590 $7,719,883 
          
    Consolidated capital ratios     
    Equity to assets 10.78% 10.37% 10.53% 11.09% 11.58%
    Tangible equity to tangible assets(1) 8.35% 8.02% 8.16% 8.61% 9.06%
          
    Share data     
    Outstanding shares 65,864  66,680  67,388  67,938  68,666 
    Book value per share$13.20 $12.99 $12.95 $12.88 $13.02 
    Tangible book value per share(2)$9.96 $9.79 $9.78 $9.73 $9.90 

    _________________________

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


    Kearny Financial Corp.
    Supplemental Balance Sheet Highlights
    (Unaudited)

    (Dollars in Thousands)June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022
    Loan portfolio composition:     
    Commercial loans:     
    Multi-family mortgage$2,761,775 $2,835,852 $2,851,721 $2,570,297 $2,409,090 
    Nonresidential mortgage 968,574  1,002,643  1,017,341  1,040,688  1,019,838 
    Commercial business 146,861  162,038  177,530  186,361  176,807 
    Construction 226,609  215,524  186,663  166,052  140,131 
    Total commercial loans 4,103,819  4,216,057  4,233,255  3,963,398  3,745,866 
    One- to four-family residential mortgage 1,700,559  1,713,343  1,719,514  1,666,730  1,645,816 
    Consumer loans:     
    Home equity loans 43,549  44,376  45,690  43,269  42,028 
    Other consumer 2,549  2,592  2,648  2,869  2,866 
    Total consumer loans 46,098  46,968  48,338  46,138  44,894 
    Total loans, excluding yield adjustments 5,850,476  5,976,368  6,001,107  5,676,266  5,436,576 
    Unaccreted yield adjustments (21,055) (10,043) (16,974) (19,896) (18,731)
    Loans receivable, net of yield adjustments 5,829,421  5,966,325  5,984,133  5,656,370  5,417,845 
    Less: allowance for credit losses on loans (48,734) (49,122) (48,877) (47,613) (47,058)
    Net loans receivable$5,780,687 $5,917,203 $5,935,256 $5,608,757 $5,370,787 
          
    Asset quality:     
    Nonperforming assets:     
    Accruing loans - 90 days and over past due$— $— $— $— $— 
    Nonaccrual loans 42,627  44,026  40,549  68,574  70,321 
    Total nonperforming loans 42,627  44,026  40,549  68,574  70,321 
    Nonaccrual loans held-for-sale —  —  8,650  8,650  21,745 
    Other real estate owned 12,956  13,410  13,410  178  178 
    Total nonperforming assets$55,583 $57,436 $62,609 $77,402 $92,244 
          
    Nonperforming loans (% total loans) 0.73% 0.74% 0.68% 1.21% 1.30%
    Nonperforming assets (% total assets) 0.69% 0.69% 0.76% 0.98% 1.19%
          
    Classified loans$93,526 $103,461 $86,069 $92,610 $94,555 
          
    Allowance for credit losses on loans (ACL):     
    ACL to total loans 0.83% 0.82% 0.81% 0.84% 0.87%
    ACL to nonperforming loans 114.33% 111.57% 120.54% 69.43% 66.92%
    Net charge-offs$82 $206 $407 $115 $1,024 
    Average net charge-off rate (annualized) 0.01% 0.01% 0.03% 0.01% 0.08%
                    

    Kearny Financial Corp.
    Supplemental Balance Sheet Highlights
    (Unaudited)

    (Dollars in Thousands)June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022
    Funding composition:     
    Deposits:     
    Non-interest-bearing deposits$609,999 $617,778 $650,950 $683,406 $653,899 
    Interest-bearing demand 2,252,912  2,285,799  2,316,485  2,382,411  2,265,597 
    Savings 748,721  811,483  901,514  982,916  1,053,198 
    Certificates of deposit (retail) 1,377,028  1,327,343  1,354,907  1,263,124  1,116,035 
    Certificates of deposit (brokered and listing service) 640,523  761,001  747,515  796,421  773,527 
    Interest-bearing deposits 5,019,184  5,185,626  5,320,421  5,424,872  5,208,357 
    Total deposits 5,629,183  5,803,404  5,971,371  6,108,278  5,862,256 
          
    Borrowings:     
    Federal Home Loan Bank advances 1,281,812  1,156,692  1,256,573  796,454  651,337 
    Overnight borrowings 225,000  455,000  127,000  55,000  250,000 
    Total borrowings 1,506,812  1,611,692  1,383,573  851,454  901,337 
          
    Total funding$7,135,995 $7,415,096 $7,354,944 $6,959,732 $6,763,593 
          
    Loans as a % of deposits 102.9% 102.1% 99.6% 92.0% 92.1%
    Deposits as a % of total funding 78.9% 78.3% 81.2% 87.8% 86.7%
    Borrowings as a % of total funding 21.1% 21.7% 18.8% 12.2% 13.3%
          
    Uninsured deposits:     
    Uninsured deposits (reported)(1)$1,771,416 $1,678,051 $1,815,854 $1,771,851 $1,525,940 
    Uninsured deposits (adjusted)(2)$710,377 $705,727 $794,407 $883,351 $792,067 

    _________________________

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


    Kearny Financial Corp.
    Consolidated Statements of Income
    (Unaudited)

     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022
    Interest income     
    Loans$62,044 $60,172 $57,996 $52,935 $48,869 
    Taxable investment securities 15,736  15,459  13,221  10,439  8,915 
    Tax-exempt investment securities 91  99  219  285  297 
    Other interest-earning assets 1,821  1,441  1,005  761  472 
    Total interest income 79,692  77,171  72,441  64,420  58,553 
          
    Interest expense     
    Deposits 26,226  22,246  18,822  10,869  3,915 
    Borrowings 13,286  12,554  8,836  5,020  4,039 
    Total interest expense 39,512  34,800  27,658  15,889  7,954 
    Net interest income 40,180  42,371  44,783  48,531  50,599 
    (Reversal of) provision for credit losses (306) 451  1,671  670  4,222 
    Net interest income after (reversal of) provision for credit losses 40,486  41,920  43,112  47,861  46,377 
          
    Non-interest income     
    Fees and service charges 699  910  734  763  658 
    Loss on sale and call of securities —  —  (15,227) —  (563)
    Gain (loss) on sale of loans 199  (2,373) 134  395  187 
    Loss on sale of other real estate owned (139) —  —  —  (9)
    Income from bank owned life insurance 1,605  1,581  1,761  3,698  1,533 
    Electronic banking fees and charges 399  457  397  506  366 
    Other income 903  1,071  3,723  555  638 
    Total non-interest income 3,666  1,646  (8,478) 5,917  2,810 
          
    Non-interest expense     
    Salaries and employee benefits 17,315  18,005  19,921  20,348  20,367 
    Net occupancy expense of premises 2,862  3,097  2,987  3,090  3,188 
    Equipment and systems 3,511  3,537  3,867  3,662  4,516 
    Advertising and marketing 231  413  731  747  703 
    Federal deposit insurance premium 1,455  1,546  1,226  906  762 
    Directors' compensation 345  340  339  340  340 
    Other expense 3,042  3,414  3,579  2,895  3,736 
    Total non-interest expense 28,761  30,352  32,650  31,988  33,612 
    Income before income taxes 15,391  13,214  1,984  21,790  15,575 
    Income taxes 3,378  2,902  33  5,255  4,205 
    Net income$12,013 $10,312 $1,951 $16,535 $11,370 
          
    Net income per common share (EPS)     
    Basic$0.19 $0.16 $0.03 $0.25 $0.17 
    Diluted$0.19 $0.16 $0.03 $0.25 $0.17 
          
    Dividends declared     
    Cash dividends declared per common share$0.11 $0.11 $0.11 $0.11 $0.11 
    Cash dividends declared$7,007 $7,196 $7,172 $7,276 $7,441 
    Dividend payout ratio 58.3% 69.8% 367.6% 44.0% 65.4%
          
    Weighted average number of common shares outstanding     
    Basic 63,667  64,769  65,030  65,737  67,240 
    Diluted 63,667  64,783  65,038  65,756  67,276 
                    

    Kearny Financial Corp.
    Average Balance Sheet Data
    (Unaudited)

     Three Months Ended
    (Dollars in Thousands)June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022
    Assets     
    Interest-earning assets:     
    Loans receivable, including loans held-for-sale$5,932,541 $5,986,669 $5,839,903 $5,553,996 $5,181,983 
    Taxable investment securities 1,529,582  1,558,222  1,527,578  1,516,974  1,608,372 
    Tax-exempt investment securities 16,346  17,663  37,917  48,973  51,672 
    Other interest-earning assets 128,158  131,682  114,175  88,038  87,990 
    Total interest-earning assets 7,606,627  7,694,236  7,519,573  7,207,981  6,930,017 
    Non-interest-earning assets 556,962  575,009  550,519  570,225  564,734 
    Total assets$8,163,589 $8,269,245 $8,070,092 $7,778,206 $7,494,751 
          
    Liabilities and Stockholders' Equity     
    Interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand$2,321,120 $2,363,762 $2,359,977 $2,354,340 $2,155,946 
    Savings 774,854  858,673  931,584  1,019,343  1,077,631 
    Certificates of deposit 2,057,818  2,069,396  2,192,722  2,014,922  1,701,725 
    Total interest-bearing deposits 5,153,792  5,291,831  5,484,283  5,388,605  4,935,302 
    Borrowings:     
    Federal Home Loan Bank advances 1,374,316  1,402,269  997,148  642,399  752,579 
    Other borrowings 100,055  1,611  —  127,456  185,901 
    Total borrowings 1,474,371  1,403,880  997,148  769,855  938,480 
    Total interest-bearing liabilities 6,628,163  6,695,711  6,481,431  6,158,460  5,873,782 
    Non-interest-bearing liabilities:     
    Non-interest-bearing deposits 608,765  634,324  666,846  667,624  640,200 
    Other non-interest-bearing liabilities 64,970  60,327  56,721  56,431  56,636 
    Total non-interest-bearing liabilities 673,735  694,651  723,567  724,055  696,836 
    Total liabilities 7,301,898  7,390,362  7,204,998  6,882,515  6,570,618 
    Stockholders' equity 861,691  878,883  865,094  895,691  924,133 
    Total liabilities and stockholders' equity$8,163,589 $8,269,245 $8,070,092 $7,778,206 $7,494,751 
          
    Average interest-earning assets to average
    interest-bearing liabilities    		 114.76% 114.91% 116.02% 117.04% 117.98%
                    

    Kearny Financial Corp.
    Performance Ratio Highlights

     Three Months Ended
     June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022
    Average yield on interest-earning assets:     
    Loans receivable, including loans held-for-sale4.18%4.02%3.97%3.81%3.77%
    Taxable investment securities4.12%3.97%3.46%2.75%2.22%
    Tax-exempt investment securities (1)2.23%2.23%2.32%2.33%2.30%
    Other interest-earning assets5.68%4.38%3.52%3.46%2.15%
    Total interest-earning assets4.19%4.01%3.85%3.57%3.38%
          
    Average cost of interest-bearing liabilities:     
    Deposits:     
    Interest-bearing demand2.38%2.01%1.63%0.92%0.31%
    Savings0.48%0.41%0.41%0.23%0.11%
    Certificates of deposit2.24%1.84%1.50%0.97%0.46%
    Total interest-bearing deposits2.04%1.68%1.37%0.81%0.32%
    Borrowings:     
    Federal Home Loan Bank advances3.51%3.58%3.54%2.68%1.96%
    Other borrowings4.89%5.15%—%2.26%0.77%
    Total borrowings3.60%3.58%3.54%2.61%1.72%
    Total interest-bearing liabilities2.38%2.08%1.71%1.03%0.54%
          
    Interest rate spread (2)1.81%1.93%2.14%2.54%2.84%
    Net interest margin (3)2.11%2.20%2.38%2.69%2.92%
          
    Non-interest income to average assets (annualized)0.18%0.08%-0.42%0.30%0.15%
    Non-interest expense to average assets (annualized)1.41%1.47%1.62%1.65%1.79%
          
    Efficiency ratio (4)65.60%68.96%89.93%58.75%62.93%
          
    Return on average assets (annualized)0.59%0.50%0.10%0.85%0.61%
    Return on average equity (annualized)5.58%4.69%0.90%7.38%4.92%
    Return on average tangible equity (annualized) (5)7.41%6.20%1.20%9.70%6.40%

    _________________________

    (1)The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
    (2)Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
    (3)Net interest income divided by average interest-earning assets.
    (4)Non-interest expense divided by the sum of net interest income and non-interest income.
    (5)Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.

    The following tables provide a reconciliation of certain financial measures calculated in accordance with Generally Accepted Accounting Principles (“GAAP”) (as reported) and non-GAAP measures. These non-GAAP measures provide additional information which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.

    Kearny Financial Corp.
    Reconciliation of GAAP to Non-GAAP
    (Unaudited)

     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022
    Adjusted net income:     
    Net income (GAAP)$12,013 $10,312 $1,951 $16,535 $11,370 
    Non-recurring transactions - net of tax:     
    Branch consolidation expenses —  568  —  —  — 
    Net effect of sale and call of securities —  —  10,811  —  400 
    Net effect of sale of other assets —  —  (2,081) —  — 
    Severance expense from workforce realignment —  —  538  —  — 
    Early contract termination —  —  —  —  568 
    Adjusted net income$12,013 $10,880 $11,219 $16,535 $12,338 
          
    Calculation of pre-tax, pre-provision net revenue:     
    Net income (GAAP)$12,013 $10,312 $1,951 $16,535 $11,370 
    Adjustments to net income (GAAP):     
    Provision for income taxes 3,378  2,902  33  5,255  4,205 
    (Reversal of) provision for credit losses (306) 451  1,671  670  4,222 
    Pre-tax, pre-provision net revenue (non-GAAP)$15,085 $13,665 $3,655 $22,460 $19,797 
          
    Adjusted earnings per share:     
    Weighted average common shares - basic 63,667  64,769  65,030  65,737  67,240 
    Weighted average common shares - diluted 63,667  64,783  65,038  65,756  67,276 
          
    Earnings per share - basic (GAAP)$0.19 $0.16 $0.03 $0.25 $0.17 
    Earnings per share - diluted (GAAP)$0.19 $0.16 $0.03 $0.25 $0.17 
          
    Adjusted earnings per share - basic (non-GAAP)$0.19 $0.17 $0.17 $0.25 $0.18 
    Adjusted earnings per share - diluted (non-GAAP)$0.19 $0.17 $0.17 $0.25 $0.18 
          
    Pre-tax, pre-provision net revenue per share:     
    Pre-tax, pre-provision net revenue per share - basic
    (non-GAAP)    		$0.24 $0.21 $0.06 $0.34 $0.29 
    Pre-tax, pre-provision net revenue per share - diluted
    (non-GAAP)    		$0.24 $0.21 $0.06 $0.34 $0.29 
          
    Adjusted return on average assets:     
    Total average assets$8,163,589 $8,269,245 $8,070,092 $7,778,206 $7,494,751 
          
    Return on average assets (GAAP) 0.59% 0.50% 0.10% 0.85% 0.61%
    Adjusted return on average assets (non-GAAP) 0.59% 0.53% 0.56% 0.85% 0.66%
          
    Adjusted return on average equity:     
    Total average equity$861,691 $878,883 $865,094 $895,691 $924,133 
          
    Return on average equity (GAAP) 5.58% 4.69% 0.90% 7.38% 4.92%
    Adjusted return on average equity (non-GAAP) 5.58% 4.95% 5.19% 7.38% 5.34%
                    

    Kearny Financial Corp.
    Reconciliation of GAAP to Non-GAAP
    (Unaudited)

     Three Months Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		June 30,
    2023    		March 31,
    2023    		December 31,
    2022    		September 30,
    2022    		June 30,
    2022
    Adjusted return on average tangible equity:     
    Total average equity$861,691 $878,883 $865,094 $895,691 $924,133 
    Less: average goodwill (210,895) (210,895) (210,895) (210,895) (210,895)
    Less: average other intangible assets (2,544) (2,683) (2,826) (2,971) (3,116)
    Total average tangible equity$648,252 $665,305 $651,373 $681,825 $710,122 
          
    Return on average tangible equity (non-GAAP) 7.41% 6.20% 1.20% 9.70% 6.40%
    Adjusted return on average tangible equity (non-GAAP) 7.41% 6.54% 6.89% 9.70% 6.95%
          
    Adjusted non-interest expense ratio:     
    Non-interest expense (GAAP)$28,761 $30,352 $32,650 $31,988 $33,612 
    Non-recurring transactions:     
    Branch consolidation expenses —  (800) —  —  — 
    Severance expense from workforce realignment —  —  (757) —  — 
    Early contract termination —  —  —  —  (800)
    Non-interest expense (non-GAAP)$28,761 $29,552 $31,893 $31,988 $32,812 
          
    Non-interest expense ratio (GAAP) 1.41% 1.47% 1.62% 1.65% 1.79%
    Adjusted non-interest expense ratio (non-GAAP) 1.41% 1.43% 1.58% 1.65% 1.75%
          
    Adjusted efficiency ratio:     
    Non-interest expense (non-GAAP)$28,761 $29,552 $31,893 $31,988 $32,812 
          
    Net interest income (GAAP)$40,180 $42,371 $44,783 $48,531 $50,599 
    Total non-interest income (GAAP) 3,666  1,646  (8,478) 5,917  2,810 
    Non-recurring transactions:     
    Net effect of sale and call of securities —  —  15,227  —  563 
    Net effect of sale of other assets —  —  (2,931) —  — 
    Total revenue (non-GAAP)$43,846 $44,017 $48,601 $54,448 $53,972 
          
    Efficiency ratio (GAAP) 65.60% 68.96% 89.93% 58.75% 62.93%
    Adjusted efficiency ratio (non-GAAP) 65.60% 67.14% 65.62% 58.75% 60.79%
                    

    Kearny Financial Corp.
    Reconciliation of GAAP to Non-GAAP
    (Unaudited)

     Year Ended
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		June 30,
    2023    		 June 30,
    2022
    Adjusted net income:   
    Net income (GAAP)$40,811  $67,547 
    Non-recurring transactions - net of tax:   
    Branch consolidation expenses and impairment charges 568   1,341 
    Net effect of sale and call of securities 10,811   397 
    Net effect of sale of other assets (2,081)  (251)
    Severance expense from workforce realignment 538   — 
    Early contract termination —   568 
    Adjusted net income$50,647  $69,602 
        
    Calculation of pre-tax, pre-provision net revenue:   
    Net income (GAAP)$40,811  $67,547 
    Adjustments to net income (GAAP):   
    Provision for income taxes 11,568   24,800 
    Provision for (reversal of) credit losses 2,486   (7,518)
    Pre-tax, pre-provision net revenue (non-GAAP)$54,865  $84,829 
        
    Adjusted earnings per share:   
    Weighted average common shares - basic 64,804   70,911 
    Weighted average common shares - diluted 64,804   70,933 
        
    Earnings per share - basic (GAAP)$0.63  $0.95 
    Earnings per share - diluted (GAAP)$0.63  $0.95 
        
    Adjusted earnings per share - basic (non-GAAP)$0.78  $0.98 
    Adjusted earnings per share - diluted (non-GAAP)$0.78  $0.98 
        
    Pre-tax, pre-provision net revenue per share:   
    Pre-tax, pre-provision net revenue per share - basic (non-GAAP)$0.85  $1.20 
    Pre-tax, pre-provision net revenue per share - diluted (non-GAAP)$0.85  $1.20 
        
    Adjusted return on average assets:   
    Total average assets$8,068,937  $7,282,370 
        
    Return on average assets (GAAP) 0.51%  0.93%
    Adjusted return on average assets (non-GAAP) 0.63%  0.96%
        
    Adjusted return on average equity:   
    Total average equity$875,358  $984,551 
        
    Return on average equity (GAAP) 4.66%  6.86%
    Adjusted return on average equity (non-GAAP) 5.79%  7.07%
        
    Adjusted return on average tangible equity:   
    Total average equity$875,358  $984,551 
    Less: average goodwill (210,895)  (210,895)
    Less: average other intangible assets (2,757)  (3,377)
    Total average tangible equity$661,706  $770,279 
        
    Return on average tangible equity (non-GAAP) 6.17%  8.77%
    Adjusted return on average tangible equity (non-GAAP) 7.65%  9.04%
            

    Kearny Financial Corp.
    Reconciliation of GAAP to Non-GAAP
    (Unaudited)

     Year Ended
    (Dollars in Thousands)June 30,
    2023    		 June 30,
    2022
    Adjusted non-interest expense ratio:   
    Non-interest expense (GAAP)$123,751  $125,708 
    Non-routine transactions:   
    Branch consolidation expenses and impairment charges (800)  (1,898)
    Severance expense from workforce realignment (757)  — 
    Early contract termination —   (800)
    Non-interest expense (non-GAAP)$122,194  $123,010 
        
    Non-interest expense ratio (GAAP) 1.53%  1.73%
    Adjusted non-interest expense ratio (non-GAAP) 1.51%  1.69%
        
    Adjusted efficiency ratio:   
    Non-interest expense (non-GAAP)$122,194  $123,010 
        
    Net interest income (GAAP)$175,865  $196,603 
    Total non-interest income (GAAP) 2,751   13,934 
    Non-routine transactions:   
    Net effect of sale and call of securities 15,227   559 
    Net effect of sale of other assets (2,931)  (356)
    Total revenue (non-GAAP)$190,912  $210,740 
        
    Efficiency ratio (GAAP) 69.28%  59.71%
    Adjusted efficiency ratio (non-GAAP) 64.01%  58.37%


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