• Kearny Financial Corp. Announces Second Quarter Fiscal 2022 Results and Declaration of Cash Dividend

    Источник: Nasdaq GlobeNewswire / 27 янв 2022 16:15:01   America/New_York

    FAIRFIELD, N.J., Jan. 27, 2022 (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 December 31, 2021 of $18.8 million, or $0.26 per diluted share, compared to $19.7 million, or $0.26 per diluted share, for the quarter ended September 30, 2021.

    The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.11 per share, payable on February 23, 2022 to stockholders of record as of February 9, 2022.

    Craig L. Montanaro, President and Chief Executive Officer, commented, “We are pleased to report another quarter of strong financial performance highlighted by growth in our commercial loan and core non-maturity deposit portfolios. Equally as important was the continued advancement of our long-term goals of growing core earnings per share and leveraging tangible capital, which now stands at 11.2% of tangible assets.” Mr. Montanaro continued, “As of quarter-end our commercial loan pipeline stood at a historically high level, which bodes well for our loan growth prospects in the coming quarters.”

    Regarding expectations for upcoming fed funds rate increases, Mr. Montanaro noted, “Our balance sheet is as well-positioned as it has ever been for the forecasted rising rate environment. Changes in the composition of our loan and deposit portfolios, which have taken place over the past few years, have increased the resiliency of our net interest income to movements in interest rates. In addition, over the past year we have proactively positioned our wholesale balance sheet with an eye towards the forthcoming increase in short-term rates.”

    Balance Sheet

    • Loans receivable increased $37.1 million to $4.83 billion at December 31, 2021, from $4.79 billion at September 30, 2021, despite a record level of loan repayment activity during the quarter, which totaled $375.8 million.
    • Deposits increased $58.9 million to $5.45 billion at December 31, 2021, from $5.40 billion at September 30, 2021, reflecting growth of $167.1 million in interest-bearing non-maturity deposits, partially offset by the controlled run-off of time deposits and seasonal fluctuations in non-interest bearing deposits.
    • Investment securities decreased $44.4 million to $1.64 billion, or 22.9% of total assets, at December 31, 2021, from $1.69 billion, or 23.5% of total assets, at September 30, 2021.
    • Borrowings decreased $34.9 million to $686.1 million, or 9.5% of total assets, at December 31, 2021, from $721.0 million, or 10.0% of total assets, at September 30, 2021.

    Earnings

    Performance Highlights

    • Return on average assets was 1.05% for the quarter ended December 31, 2021 compared to 1.09% for the quarter ended September 30, 2021.
    • Return on average equity was 7.46% and 7.66% for the quarters ended December 31, 2021 and September 30, 2021, respectively. Return on average tangible equity was 9.49% and 9.67%, for those same comparative periods.

    Net Interest Income and Net Interest Margin

    • Net interest margin contracted three basis points to 2.96% for the quarter ended December 31, 2021, from 2.99% for the quarter ended September 30, 2021. The decrease in net interest margin was due largely to a five basis point reduction in yield on earning assets, partially offset by a two basis point reduction in cost of interest-bearing liabilities. The reduction in yield on earning assets was partly attributable to declines in purchase accounting accretion and loan prepayment penalty income.
    • Net interest income decreased $903,000 to $48.7 million for the quarter ended December 31, 2021, from $49.6 million for the quarter ended September 30, 2021. Included in net interest income for the quarters ended December 31, 2021 and September 30, 2021, respectively, was purchase accounting accretion of $2.6 million and $2.9 million, and loan prepayment penalty income of $1.5 million and $1.7 million.

    Non-Interest Income

    • Fees and service charges increased $91,000 to $698,000 for the quarter ended December 31, 2021 from $607,000 for the quarter ended September 30, 2021, which was largely attributable to growth in various deposit and loan-related fee categories.
    • Gain on sale of loans decreased $36,000 to $970,000 for the quarter ended December 31, 2021 from $1.0 million for the quarter ended September 30, 2021. This decrease largely reflected a lower average sales price of residential mortgage loans, partially offset by a modest increase in the volume of residential mortgage loans sold during the period.
    • Included in other income for the quarter ended December 31, 2021 were non-recurring gains of $356,000 attributable to the sale of one property recognized in conjunction with the Bank's ongoing retail branch consolidation efforts. No such gains were recorded during the quarter ended September 30, 2021.

    Non-Interest Expense

    • Non-interest expense decreased $2.1 million to $29.7 million for the quarter ended December 31, 2021, from $31.8 million for the quarter ended September 30, 2021. Salary and benefit expense decreased $521,000 from September 30, 2021 due largely to reductions in payroll tax and stock benefit plan expense. Net occupancy expense decreased $1.4 million primarily due to non-recurring expense of $1.6 million that was recorded in the prior comparative period and previously disclosed.
    • The efficiency and non-interest expense ratios were 56.17% and 1.65%, respectively, for the quarter ended December 31, 2021.

    Income Taxes

    • Income tax expense decreased $471,000 to $6.8 million for the quarter ended December 31, 2021 compared to $7.3 million for the quarter ended September 30, 2021, resulting in effective tax rates of 26.6% and 26.9%, respectively.

    Asset Quality

    • The balance of non-performing assets decreased $327,000 to $72.8 million, or 1.01% of total assets, at December 31, 2021, from $73.1 million, or 1.02% of total assets, at September 30, 2021. At December 31, 2021, the Company had active COVID-19 payment deferrals on five residential mortgage and home equity loans totaling $2.6 million, representing 0.05% of total loans.
    • Net charge offs totaled $1.1 million, or 0.10% of average loans, on an annualized basis, for the quarter ended December 31, 2021 compared to $980,000, or 0.08%, for the quarter ended September 30, 2021. All of the charge-offs recorded during the quarter ended December 31, 2021 had previously been individually reserved for within the allowance for credit losses ("ACL").
    • For the quarter ended December 31, 2021, the Company recorded a provision for credit loss reversal of $2.4 million, compared to a provision for credit loss reversal of $5.4 million for the quarter ended September 30, 2021. The reversal for the quarter ended December 31, 2021 was primarily related to a net reduction in reserves on individually evaluated loans and a reduction in the expected life of various segments of the loan portfolio.
    • The ACL decreased $3.6 million to $48.2 million, or 0.99% of total loans, at December 31, 2021, from $51.8 million, or 1.08% of total loans at September 30, 2021.

    Capital

    • For the quarter ended December 31, 2021, book value per share increased by $0.17 to $13.55 while tangible book value per share increased by $0.09 to $10.64.
    • During the quarter ended December 31, 2021, the Company repurchased 2,289,537 shares of common stock at a cost of $30.0 million, or $13.10 per share. Through December 31, 2021, the Company repurchased a total of 2,502,676 shares, or 32.9% of the shares authorized for repurchase under the current repurchase program, at a total cost of $32.6 million or $13.05 per share.
    • At December 31, 2021, the Company’s tangible equity to tangible assets ratio equaled 11.2% while the regulatory capital ratios of both the Company and the Bank were in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.

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

    In addition, the COVID-19 pandemic has had, and may continue to have, an adverse impact on the Company, its clients and the communities it serves. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including whether the coronavirus can continue to be controlled and abated and if the economy is able to remain open. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially remain open, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for credit losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; due to a decline in our stock price or other factors, goodwill may become impaired and be required to be written down; and our cyber security risks are increased as the result of an increase in the number of employees working remotely.

    Category: Earnings


    Linked-Quarter Comparative Financial Analysis
     
    Kearny Financial Corp. 
    Consolidated Balance Sheets 
    (Unaudited) 
             
             
    (Dollars and Shares in Thousands,
    Except Per Share Data)
    		December 31, 2021 September 30, 2021 Variance or
    Change    		 Variance
    or Change Pct.    		 
    Assets        
    Cash and cash equivalents$60,452 $54,070 $6,382  11.8%
    Securities available for sale 1,591,066  1,651,156  (60,090) -3.6%
    Securities held to maturity 53,142  37,497  15,645  41.7%
    Loans held-for-sale 12,549  12,884  (335) -2.6%
    Loans receivable 4,826,404  4,789,339  37,065  0.8%
    Less: allowance for credit losses on loans (48,216) (51,785) 3,569  -6.9%
    Net loans receivable 4,778,188  4,737,554  40,634  0.9%
    Premises and equipment 54,067  55,236  (1,169) -2.1%
    Federal Home Loan Bank stock 36,622  36,615  7  0.0%
    Accrued interest receivable 18,495  19,541  (1,046) -5.4%
    Goodwill 210,895  210,895  -  0.0%
    Core deposit intangible 3,344  3,524  (180) -5.1%
    Bank owned life insurance 286,433  284,871  1,562  0.5%
    Deferred income taxes, net 25,709  27,771  (2,062) -7.4%
    Other real estate owned 658  178  480  269.7%
    Other assets 54,603  51,896  2,707  5.2%
    Total assets$7,186,223 $7,183,688 $2,535  0.0%
             
    Liabilities        
    Deposits:        
    Non-interest-bearing 604,805 $631,344 $(26,539) -4.2%
    Interest-bearing 4,849,220  4,763,795  85,425  1.8%
    Total deposits 5,454,025  5,395,139  58,886  1.1%
    Borrowings 686,105  720,990  (34,885) -4.8%
    Advance payments by borrowers for taxes 16,772  16,222  550  3.4%
    Other liabilities 33,851  36,914  (3,063) -8.3%
    Total liabilities 6,190,753  6,169,265  21,488  0.3%
             
    Stockholders' Equity        
    Common stock 735  758  (23) -3.0%
    Paid-in capital 587,392  616,894  (29,502) -4.8%
    Retained earnings 431,549  420,701  10,848  2.6%
    Unearned ESOP shares (25,780) (26,266) 486  -1.9%
    Accumulated other comprehensive income 1,574  2,336  (762) -32.6%
    Total stockholders' equity 995,470  1,014,423  (18,953) -1.9%
    Total liabilities and stockholders' equity$7,186,223 $7,183,688 $2,535  0.0%
             
    Consolidated capital ratios        
    Equity to assets 13.85% 14.12% -0.27%  
    Tangible equity to tangible assets (1) 11.21% 11.48% -0.27%  
             
    Share data        
    Outstanding shares 73,453  75,800  (2,347) -3.1%
    Book value per share$13.55 $13.38 $0.17  1.3%
    Tangible book value per share (2)$10.64 $10.55 $0.09  0.8%

     

    ________________________
    (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) 
             
     Three Months Ended     
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		December 31, 2021 September 30, 2021 Variance
    or Change    		 Variance
    or Change Pct.    		 
    Interest income        
    Loans$47,575 $48,230 $(655) -1.4%
    Taxable investment securities 7,595  8,212  (617) -7.5%
    Tax-exempt investment securities 327  333  (6) -1.8%
    Other interest-earning assets 415  431  (16) -3.7%
    Total Interest Income 55,912  57,206  (1,294) -2.3%
             
    Interest expense        
    Deposits 3,663  4,065  (402) -9.9%
    Borrowings 3,562  3,551  11  0.3%
    Total interest expense 7,225  7,616  (391) -5.1%
    Net interest income 48,687  49,590  (903) -1.8%
    Reversal of provision for credit losses (2,420) (5,400) 2,980  -55.2%
    Net interest income after reversal of provision
     for credit losses    		 51,107  54,990  (3,883) -7.1%
             
    Non-interest income        
    Fees and service charges 698  607  91  15.0%
    Gain on sale and call of securities -  1  (1) -100.0%
    Gain on sale of loans 970  1,006  (36) -3.6%
    Income from bank owned life insurance 1,562  1,561  1  0.1%
    Electronic banking fees and charges 421  407  14  3.4%
    Other income 482  218  264  121.1%
    Total non-interest income 4,133  3,800  333  8.8%
             
    Non-interest expense        
    Salaries and employee benefits 18,096  18,617  (521) -2.8%
    Net occupancy expense of premises 3,156  4,547  (1,391) -30.6%
    Equipment and systems 3,723  3,825  (102) -2.7%
    Advertising and marketing 448  392  56  14.3%
    Federal deposit insurance premium 721  492  229  46.5%
    Directors' compensation 649  803  (154) -19.2%
    Other expense 2,877  3,127  (250) -8.0%
    Total non-interest expense 29,670  31,803  (2,133) -6.7%
    Income before income taxes 25,570  26,987  (1,417) -5.3%
    Income taxes 6,801  7,272  (471) -6.5%
    Net income$18,769 $19,715 $(946) -4.8%
             
    Net income per common share (EPS)        
    Basic$0.26 $0.26 $0.00   
    Diluted$0.26 $0.26 $0.00   
             
    Dividends declared        
    Cash dividends declared per common share$0.11 $0.10 $0.01   
    Cash dividends declared$7,921 $7,381 $540   
    Dividend payout ratio 42.2% 37.4% 4.8%  
             
    Weighted average number of  common
     shares outstanding    		        
    Basic 72,011  74,537  (2,526)  
    Diluted 72,037  74,556  (2,519)  


    Kearny Financial Corp. 
    Average Balance Sheet Data 
    (Unaudited) 
             
     Three Months Ended     
    (Dollars in Thousands)December 31,
    2021    		 September 30, 2021 Variance
    or Change    		 Variance
    or Change Pct.    		 
    Assets        
    Interest-earning assets:        
    Loans receivable, including loans held for sale$4,822,959 $4,835,676 $(12,717) -0.3%
    Taxable investment securities 1,610,395  1,649,953  (39,558) -2.4%
    Tax-exempt investment securities 57,686  59,115  (1,429) -2.4%
    Other interest-earning assets 77,811  85,749  (7,938) -9.3%
    Total interest-earning assets 6,568,851  6,630,493  (61,642) -0.9%
    Non-interest-earning assets 611,390  616,735  (5,345) -0.9%
    Total assets$7,180,241 $7,247,228 $(66,987) -0.9%
             
    Liabilities and Stockholders' Equity        
    Interest-bearing liabilities:        
    Deposits:        
     Interest-bearing demand$2,027,021 $1,954,271 $72,750  3.7%
     Savings 1,086,903  1,102,865  (15,962) -1.4%
     Certificates of deposit 1,693,423  1,798,473  (105,050) -5.8%
    Total interest-bearing deposits 4,807,347  4,855,609  (48,262) -1.0%
    Borrowings:        
    Federal Home Loan Bank advances 666,029  665,915  114  0.0%
    Other borrowings 26,033  28,532  (2,499) -8.8%
     Total borrowings 692,062  694,447  (2,385) -0.3%
      Total interest-bearing liabilities 5,499,409  5,550,056  (50,647) -0.9%
    Non-interest-bearing liabilities:        
    Non-interest-bearing deposits 624,200  610,271  13,929  2.3%
    Other non-interest-bearing liabilities 50,870  56,893  (6,023) -10.6%
     Total non-interest-bearing liabilities 675,070  667,164  7,906  1.2%
      Total liabilities 6,174,479  6,217,220  (42,741) -0.7%
    Stockholders' equity 1,005,762  1,030,008  (24,246) -2.4%
      Total liabilities and stockholders' equity$7,180,241 $7,247,228 $(66,987) -0.9%
             
    Average interest-earning assets to average
     interest-bearing liabilities    		 119.45% 119.47% -0.02% 0.0%


    Kearny Financial Corp. 
    Performance Ratio Highlights 
    (Unaudited) 
            
     Three Months Ended   
     December 31,  September 30,  Variance 
     2021  2021  or Change 
    Average yield on interest-earning assets:          
    Loans receivable, including loans held for sale 3.95%  3.99% -0.04%
    Taxable investment securities 1.89%  1.99% -0.10%
    Tax-exempt investment securities (1) 2.26%  2.25% 0.01%
    Other interest-earning assets 2.13%  2.01% 0.12%
    Total interest-earning assets 3.40%  3.45% -0.05%
               
    Average cost of interest-bearing liabilities:          
    Deposits:          
    Interest-bearing demand 0.22%  0.23% -0.01%
    Savings 0.11%  0.12% -0.01%
    Certificates of deposit 0.53%  0.57% -0.04%
    Total interest-bearing deposits 0.30%  0.33% -0.03%
    Borrowings:          
    Federal Home Loan Bank advances 2.14%  2.13% 0.01%
    Other borrowings 0.09%  0.10% -0.01%
    Total borrowings 2.06%  2.05% 0.01%
     Total interest-bearing liabilities 0.53%  0.55% -0.02%
               
    Interest rate spread (2) 2.87%  2.90% -0.03%
    Net interest margin (3) 2.96%  2.99% -0.03%
               
    Non-interest income to average assets
     (annualized)    		 0.23%  0.21% 0.02%
    Non-interest expense to average assets
     (annualized)    		 1.65%  1.76% -0.11%
               
    Efficiency ratio (4) 56.17%  59.57% -3.40%
               
    Return on average assets (annualized) 1.05%  1.09% -0.04%
    Return on average equity (annualized) 7.46%  7.66% -0.20%
    Return on average tangible equity (annualized) (5) 9.49%  9.67% -0.18%

     

    ________________________
    (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
       
    Consolidated Balance SheetsAt 
    (Dollars and Shares in Thousands,
    Except Per Share Data)    		December 31,
    2021         		September 30,
    2021         		June 30,
    2021         		March 31,
    2021         		December 31,
    2020     
     (Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) 
    Assets          
    Cash and cash equivalents$60,452 $54,070 $67,855 $108,991 $129,694 
    Securities available for sale 1,591,066  1,651,156  1,676,864  1,778,970  1,695,893 
    Securities held to maturity 53,142  37,497  38,138  27,168  29,549 
    Loans held-for-sale 12,549  12,884  16,492  5,172  12,601 
    Loans receivable 4,826,404  4,789,339  4,851,394  4,798,239  4,828,634 
    Less: allowance for credit losses on loans (48,216) (51,785) (58,165) (63,762) (63,386)
    Net loans receivable 4,778,188  4,737,554  4,793,229  4,734,477  4,765,248 
    Premises and equipment 54,067  55,236  56,338  60,360  61,181 
    Federal Home Loan Bank stock 36,622  36,615  36,615  45,578  45,578 
    Accrued interest receivable 18,495  19,541  19,362  20,562  19,826 
    Goodwill 210,895  210,895  210,895  210,895  210,895 
    Core deposit intangible 3,344  3,524  3,705  3,888  4,151 
    Bank owned life insurance 286,433  284,871  283,310  281,765  280,235 
    Deferred income taxes, net 25,709  27,771  29,323  32,230  30,846 
    Other real estate owned 658  178  178  178  178 
    Other assets 54,603  51,896  51,431  47,760  49,278 
    Total assets$7,186,223 $7,183,688 $7,283,735 $7,357,994 $7,335,153 
               
    Liabilities          
    Deposits:          
    Non-interest-bearing$604,805 $631,344 $593,718 $545,746 $518,828 
    Interest-bearing 4,849,220  4,763,795  4,891,588  4,828,706  4,793,785 
    Total deposits 5,454,025  5,395,139  5,485,306  5,374,452  5,312,613 
    Borrowings 686,105  720,990  685,876  865,763  865,651 
    Advance payments by borrowers for taxes 16,772  16,222  15,752  15,300  16,100 
    Other liabilities 33,851  36,914  53,857  38,667  48,448 
    Total liabilities 6,190,753  6,169,265  6,240,791  6,294,182  6,242,812 
               
    Stockholders' Equity          
    Common stock 735  758  790  820  849 
    Paid-in capital 587,392  616,894  654,396  691,280  724,389 
    Retained earnings 431,549  420,701  408,367  397,594  388,376 
    Unearned ESOP shares (25,780) (26,266) (26,753) (27,239) (27,726)
    Accumulated other comprehensive income 1,574  2,336  6,144  1,357  6,453 
    Total stockholders' equity 995,470  1,014,423  1,042,944  1,063,812  1,092,341 
    Total liabilities and stockholders' equity$7,186,223 $7,183,688 $7,283,735 $7,357,994 $7,335,153 
               
    Consolidated capital ratios          
    Equity to assets 13.85% 14.12% 14.32% 14.46% 14.89%
    Tangible equity to tangible assets (1) 11.21% 11.48% 11.72% 11.89% 12.32%
               
    Share data          
    Outstanding shares 73,453  75,800  78,965  81,943  84,938 
    Book value per share$13.55 $13.38 $13.21 $12.98 $12.86 
    Tangible book value per share (2)$10.64 $10.55 $10.49 $10.36 $10.33 

     

    ________________________
    (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.


     At 
    Supplemental Balance Sheet Highlights
    (Dollars in Thousands, Unaudited)    		December 31,
    2021
    		September 30,
    2021
    		June 30,
    2021         		March 31,
    2021         		December 31,
    2020
    Loan portfolio composition:          
    Commercial loans:          
    Multi-family$2,007,431 $1,978,681 $2,039,260 $2,055,396 $2,076,483 
    Nonresidential 1,026,447  1,023,391  1,079,444  1,110,765  1,123,695 
    Commercial business 180,429  169,392  168,951  183,181  202,010 
    Construction 110,703  112,226  93,804  95,533  90,398 
    Total commercial loans 3,325,010  3,283,690  3,381,459  3,444,875  3,492,586 
    One- to four-family residential mortgage loans 1,477,267  1,483,106  1,447,721  1,323,485  1,305,351 
    Consumer loans:          
    Home equity loans and lines of credit 43,934  44,912  47,871  59,721  65,298 
    Other consumer loans 3,040  3,020  3,259  3,445  4,123 
    Total consumer loans 46,974  47,932  51,130  63,166  69,421 
     Total loans, excluding yield adjustments 4,849,251  4,814,728  4,880,310  4,831,526  4,867,358 
    Unaccreted yield adjustments (22,847) (25,389) (28,916) (33,287) (38,724)
     Loans receivable, net of yield adjustments 4,826,404  4,789,339  4,851,394  4,798,239  4,828,634 
    Less: allowance for credit losses on loans (48,216) (51,785) (58,165) (63,762) (63,386)
       Net loans receivable$4,778,188 $4,737,554 $4,793,229 $4,734,477 $4,765,248 
               
    Loan portfolio allocation:          
    Commercial loans:          
    Multi-family 41.4% 41.1% 41.8% 42.5% 42.7%
    Nonresidential 21.2% 21.3% 22.1% 23.0% 23.1%
    Commercial business 3.7% 3.5% 3.5% 3.8% 4.2%
    Construction 2.3% 2.3% 1.9% 2.0% 1.8%
    Total commercial loans 68.6% 68.2% 69.3% 71.3% 71.8%
    One- to four-family residential mortgage loans 30.5% 30.8% 29.7% 27.4% 26.8%
    Consumer loans:          
    Home equity loans and lines of credit 0.9% 0.9% 0.9% 1.2% 1.3%
    Other consumer loans 0.0% 0.1% 0.1% 0.1% 0.1%
    Total consumer loans 0.9% 1.0% 1.0% 1.3% 1.4%
     Total loans, excluding yield adjustments 100.0% 100.0% 100.0% 100.0% 100.0%
               
    Asset quality:          
    Nonperforming assets:          
    Accruing loans - 90 days and over past due$- $- $- $2 $- 
    Nonaccrual loans 72,138  72,945  79,767  71,416  71,472 
    Total nonperforming loans 72,138  72,945  79,767  71,418  71,472 
    Other real estate owned 658  178  178  178  178 
    Total nonperforming assets$72,796 $73,123 $79,945 $71,596 $71,650 
               
    Nonperforming loans (% total loans) 1.49% 1.52% 1.64% 1.49% 1.48%
    Nonperforming assets (% total assets) 1.01% 1.02% 1.10% 0.97% 0.98%
               
    Allowance for credit losses on loans (ACL):          
    ACL to total loans 0.99% 1.08% 1.19% 1.32% 1.30%
    ACL to nonperforming loans 66.84% 70.99% 72.92% 89.28% 88.69%
    Net charge offs$1,149 $980 $656 $750 $109 
    Average net charge off rate (annualized) 0.10% 0.08% 0.05% 0.06% 0.01%


     At 
    Supplemental Balance Sheet Highlights
    (Dollars in Thousands, Unaudited)    		December 31,
    2021
    		September 30,
    2021         		June 30,
    2021         		March 31,
    2021         		December 31,
    2020     
    Funding by type:          
    Deposits:          
    Non-interest-bearing deposits$604,805 $631,344 $593,718 $545,746 $518,828 
    Interest-bearing demand 2,106,693  1,937,661  1,902,478  1,923,184  1,752,699 
    Savings 1,087,740  1,089,699  1,111,364  1,105,481  1,075,122 
    Certificates of deposit 1,654,787  1,736,435  1,877,746  1,800,041  1,965,964 
     Interest-bearing deposits 4,849,220  4,763,795  4,891,588  4,828,706  4,793,785 
    Total deposits 5,454,025  5,395,139  5,485,306  5,374,452  5,312,613 
               
    Borrowings:          
     Federal Home Loan Bank advances 666,105  665,990  665,876  865,763  865,651 
     Overnight borrowings 20,000  55,000  20,000  -  - 
    Total borrowings 686,105  720,990  685,876  865,763  865,651 
               
     Total funding$6,140,130 $6,116,129 $6,171,182 $6,240,215 $6,178,264 
               
    Loans as a % of deposits 87.8% 88.1% 87.7% 88.2% 89.9%
    Deposits as a % of total funding 88.8% 88.2% 88.9% 86.1% 86.0%
    Borrowings as a % of total funding 11.2% 11.8% 11.1% 13.9% 14.0%
               
    Funding by source:          
    Retail deposits:          
    Non-interest-bearing deposits$604,805 $631,344 $593,718 $545,746 $518,828 
    Interest-bearing demand 2,106,693  1,937,661  1,902,478  1,923,184  1,752,699 
    Savings 1,087,740  1,089,699  1,111,364  1,105,481  1,075,122 
    Certificates of deposit 1,184,530  1,264,016  1,398,808  1,508,494  1,658,277 
     Total retail deposits 4,983,768  4,922,720  5,006,368  5,082,905  5,004,926 
               
    Wholesale funding:          
    Certificates of deposit (listing service)$11,622 $13,817 $20,322 $32,952 $43,112 
    Certificates of deposit (brokered) 458,635  458,602  458,616  258,595  264,575 
     Total wholesale deposits 470,257  472,419  478,938  291,547  307,687 
    FHLB advances 666,105  665,990  665,876  865,763  865,651 
    Overnight borrowings 20,000  55,000  20,000  -  - 
     Total wholesale funding 1,156,362  1,193,409  1,164,814  1,157,310  1,173,338 
               
       Total funding$6,140,130 $6,116,129 $6,171,182 $6,240,215 $6,178,264 
               
    Retail funding as a % of total funding 81.2% 80.5% 81.1% 81.5% 81.0%
    Wholesale funding as a % of total funding 18.8% 19.5% 18.9% 18.5% 19.0%


    Consolidated Statements of IncomeThree Months Ended 
    (Dollars and Shares in Thousands,
    Except Per Share Data, Unaudited)    		December 31,
    2021         		September 30,
    2021         		June 30,
    2021         		March 31,
    2021
    		December 31,
    2020
    Interest income          
    Loans (1)$47,575 $48,230 $48,464 $50,159 $50,806 
    Taxable investment securities 7,595  8,212  8,304  7,891  7,707 
    Tax-exempt investment securities 327  333  355  410  433 
    Other interest-earning assets 415  431  549  705  787 
    Total interest income 55,912  57,206  57,672  59,165  59,733 
               
    Interest expense          
    Deposits 3,663  4,065  5,156  6,670  8,647 
    Borrowings 3,562  3,551  3,451  4,012  5,193 
    Total interest expense 7,225  7,616  8,607  10,682  13,840 
    Net interest income 48,687  49,590  49,065  48,483  45,893 
    (Reversal of) provision for credit losses (2,420) (5,400) (4,941) 1,126  (1,365)
    Net interest income after (reversal of)
     provision for credit losses    		 51,107  54,990  54,006  47,357  47,258 
               
    Non-interest income          
    Fees and service charges (1) 698  607  423  473  556 
    Gain on sale and call of securities -  1  313  18  813 
    Gain on sale of loans 970  1,006  363  943  2,378 
    Income from bank owned life insurance 1,562  1,561  1,545  1,530  1,596 
    Electronic banking fees and charges 421  407  452  456  404 
    Other income 482  218  400  1,194  67 
    Total non-interest income 4,133  3,800  3,496  4,614  5,814 
               
    Non-interest expense          
    Salaries and employee benefits 18,096  18,617  17,777  16,965  17,081 
    Net occupancy expense of premises 3,156  4,547  2,998  3,433  3,120 
    Equipment and systems 3,723  3,825  3,575  3,823  3,902 
    Advertising and marketing 448  392  581  567  513 
    Federal deposit insurance premium 721  492  490  488  490 
    Directors' compensation 649  803  749  748  748 
    Debt extinguishment expenses -  -  -  -  796 
    Other expense 2,877  3,127  5,816  3,792  3,860 
    Total non-interest expense 29,670  31,803  31,986  29,816  30,510 
    Income before income taxes 25,570  26,987  25,516  22,155  22,562 
    Income taxes 6,801  7,272  7,033  5,732  5,614 
    Net income$18,769 $19,715 $18,483 $16,423 $16,948 
               
    Net income per common share (EPS)          
    Basic$0.26 $0.26 $0.24 $0.20 $0.20 
    Diluted$0.26 $0.26 $0.24 $0.20 $0.20 
               
    Dividends declared          
    Cash dividends declared per common share$0.11 $0.10 $0.10 $0.09 $0.08 
    Cash dividends declared$7,921 $7,381 $7,710 $7,205 $6,706 
    Dividend payout ratio 42.2% 37.4% 41.7% 43.9% 39.6%
               
    Weighted average number of  common
     shares outstanding    		          
    Basic 72,011  74,537  77,658  80,673  85,120 
    Diluted 72,037  74,556  77,680  80,690  85,123 

     

    ________________________
    (1)Effective July 1, 2021, loan prepayment penalty income is recorded as a component of interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Periods prior to September 30, 2021 have been adjusted to reflect this change. Loan prepayment penalty income for the periods ended June 30, 2021, March 31, 2021 and December 31, 2020 was $902,000, $852,000 and $1,340,000, respectively.

         

     Three Months Ended 
    Average Balance Sheet Data
    (Dollars in Thousands, Unaudited)    		December 31,
    2021         		September 30,
    2021         		June 30,
    2021         		March 31,
    2021         		December 31,
    2020
    Assets          
    Interest-earning assets:          
    Loans receivable, including loans held for
     sale    		$4,822,959 $4,835,676 $4,817,980 $4,816,592 $4,871,268 
    Taxable investment securities 1,610,395  1,649,953  1,720,838  1,674,223  1,544,095 
    Tax-exempt investment securities 57,686  59,115  63,047  73,573  79,044 
    Other interest-earning assets 77,811  85,749  117,212  169,291  266,114 
    Total interest-earning assets 6,568,851  6,630,493  6,719,077  6,733,679  6,760,521 
    Non-interest-earning assets 611,390  616,735  609,762  617,440  632,084 
    Total assets$7,180,241 $7,247,228 $7,328,839 $7,351,119 $7,392,605 
               
    Liabilities and Stockholders' Equity          
    Interest-bearing liabilities:          
    Deposits:          
     Interest-bearing demand$2,027,021 $1,954,271 $1,930,193 $1,831,617 $1,683,222 
     Savings 1,086,903  1,102,865  1,118,402  1,084,981  1,058,675 
     Certificates of deposit 1,693,423  1,798,473  1,934,650  1,904,234  1,899,406 
     Total interest-bearing deposits 4,807,347  4,855,609  4,983,245  4,820,832  4,641,303 
    Borrowings:          
    Federal Home Loan Bank advances 666,029  665,915  665,802  865,690  1,057,958 
    Other borrowings 26,033  28,532  6,670  -  - 
     Total borrowings 692,062  694,447  672,472  865,690  1,057,958 
     Total interest-bearing liabilities 5,499,409  5,550,056  5,655,717  5,686,522  5,699,261 
    Non-interest-bearing liabilities:          
    Non-interest-bearing deposits 624,200  610,271  566,632  525,018  502,479 
    Other non-interest-bearing liabilities 50,870  56,893  52,292  57,018  73,683 
    Total non-interest-bearing liabilities 675,070  667,164  618,924  582,036  576,162 
     Total liabilities 6,174,479  6,217,220  6,274,641  6,268,558  6,275,423 
    Stockholders' equity 1,005,762  1,030,008  1,054,198  1,082,561  1,117,182 
     Total liabilities and stockholders' equity$7,180,241 $7,247,228 $7,328,839 $7,351,119 $7,392,605 
               
    Average interest-earning assets to average
     interest-bearing liabilities    		 119.45% 119.47% 118.80% 118.41% 118.62%


     Three Months Ended 
    Performance Ratio HighlightsDecember 31,
    2021
    		September 30,
    2021
    		June 30,
    2021         		March 31,
    2021         		December 31,
    2020     
    Average yield on interest-earning assets:          
    Loans receivable, including loans held for
     sale (1)    		 3.95% 3.99% 4.02% 4.17% 4.17%
    Taxable investment securities 1.89% 1.99% 1.93% 1.89% 2.00%
    Tax-exempt investment securities (2) 2.26% 2.25% 2.25% 2.23% 2.19%
    Other interest-earning assets 2.13% 2.01% 1.87% 1.67% 1.18%
    Total interest-earning assets (1) 3.40% 3.45% 3.43% 3.51% 3.53%
               
    Average cost of interest-bearing liabilities:          
    Deposits:          
     Interest-bearing demand 0.22% 0.23% 0.27% 0.34% 0.47%
     Savings 0.11% 0.12% 0.15% 0.21% 0.33%
     Certificates of deposit 0.53% 0.57% 0.71% 0.96% 1.22%
     Total interest-bearing deposits 0.30% 0.33% 0.41% 0.55% 0.75%
    Borrowings:          
    Federal Home Loan Bank advances 2.14% 2.13% 2.07% 1.85% 1.96%
    Other borrowings 0.09% 0.10% 0.07% 0.00% 0.00%
    Total borrowings 2.06% 2.05% 2.05% 1.85% 1.96%
     Total interest-bearing liabilities 0.53% 0.55% 0.61% 0.75% 0.97%
               
    Interest rate spread (1) (3) 2.87% 2.90% 2.82% 2.76% 2.56%
    Net interest margin (1) (4) 2.96% 2.99% 2.92% 2.88% 2.72%
               
    Non-interest income to average assets
     (annualized) (1)    		 0.23% 0.21% 0.19% 0.25% 0.31%
    Non-interest expense to average assets
     (annualized)    		 1.65% 1.76% 1.75% 1.62% 1.65%
               
    Efficiency ratio (5) 56.17% 59.57% 60.86% 56.15% 59.01%
               
    Return on average assets (annualized) 1.05% 1.09% 1.01% 0.89% 0.92%
    Return on average equity (annualized) 7.46% 7.66% 7.01% 6.07% 6.07%
    Return on average tangible equity (annualized) (6) 9.49% 9.67% 8.81% 7.57% 7.52%

     

    ________________________
    (1)Effective July 1, 2021, loan prepayment penalty income is recorded as a component of interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Periods prior to September 30, 2021 have been adjusted to reflect this change. Loan prepayment penalty income for the periods ended June 30, 2021, March 31, 2021 and December 31, 2020 was $902,000, $852,000 and $1,340,000, respectively.
    (2)The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
    (3)Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
    (4)Net interest income divided by average interest-earning assets.
    (5)Non-interest expense divided by the sum of net interest income and non-interest income.
    (6)Average tangible equity equals total average stockholders’ equity reduced by average goodwill and average core deposit intangible assets.

    This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). 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. A reconciliation of non-GAAP financial measures to GAAP measures is included below. 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.

    Reconciliation of GAAP to Non-GAAPThree Months Ended 
    (Dollars and Shares in Thousands,
    Except Per Share Data, Unaudited)    		December 31,
    2021         		September 30,
    2021
    		June 30,
    2021         		March 31,
    2021         		December 31,
    2020     
    Adjusted net income:          
    Net income (GAAP)$18,769 $19,715 $18,483 $16,423 $16,948 
    Non-recurring transactions - net of tax:          
     Branch consolidation expenses and
      impairment charges    		 132  1,209  870  264  243 
     Net effect of sale and call of securities -  (1) (220) (13) (571)
     Debt extinguishment expenses -  -  -  -  558 
     Reversal of income tax valuation
      allowance    		 -  -  (12) -  (523)
     Net effect of sales of other assets (251) -  (144) (587) - 
    Adjusted net income$18,650 $20,923 $18,977 $16,087 $16,655 
               
    Calculation of pre-tax, pre-provision net
     revenue:    		          
    Net income (GAAP)$18,769 $19,715 $18,483 $16,423 $16,948 
    Adjustments to net income (GAAP):          
     Provision for income taxes 6,801  7,272  7,033  5,732  5,614 
     (Reversal of) provision for credit losses (2,420) (5,400) (4,941) 1,126  (1,365)
    Pre-tax, pre-provision net revenue
     (non-GAAP)    		$23,150 $21,587 $20,575 $23,281 $21,197 
               
    Adjusted earnings per share:          
    Weighted average common shares - basic 72,011  74,537  77,658  80,673  85,120 
    Weighted average common shares - diluted 72,037  74,556  77,680  80,690  85,123 
               
    Earnings per share - basic (GAAP)$0.26 $0.26 $0.24 $0.20 $0.20 
    Earnings per share - diluted (GAAP)$0.26 $0.26 $0.24 $0.20 $0.20 
               
    Adjusted earnings per share - basic
     (non-GAAP)    		$0.26 $0.28 $0.24 $0.20 $0.19 
    Adjusted earnings per share - diluted
     (non-GAAP)    		$0.26 $0.28 $0.24 $0.20 $0.20 
               
    Adjusted return on average assets:          
    Total average assets$7,180,241 $7,247,228 $7,328,839 $7,351,119 $7,392,605 
               
    Return on average assets (GAAP) 1.05% 1.09% 1.01% 0.89% 0.92%
    Adjusted return on average assets
     (non-GAAP)    		 1.04% 1.15% 1.04% 0.88% 0.90%
               
    Adjusted return on average equity:          
    Total average equity$1,005,762 $1,030,008 $1,054,198 $1,082,561 $1,117,182 
               
    Return on average equity (GAAP) 7.46% 7.66% 7.01% 6.07% 6.07%
    Adjusted return on average equity
     (non-GAAP)    		 7.42% 8.13% 7.20% 5.94% 5.96%


    Reconciliation of GAAP to Non-GAAPThree Months Ended 
    (Dollars and Shares in Thousands,
    Except Per Share Data, Unaudited)    		December 31,
    2021         		September 30,
    2021
    		June 30,
    2021
    		March 31,
    2021         		December 31,
    2020     
    Adjusted return on average tangible equity:          
    Total average equity$1,005,762 $1,030,008 $1,054,198 $1,082,561 $1,117,182 
    Less: average goodwill (210,895) (210,895) (210,895) (210,895) (210,895)
    Less: average other intangible assets (3,462) (3,641) (3,825) (4,045) (4,317)
     $791,405 $815,472 $839,478 $867,621 $901,970 
        -  -  -  - 
    Return on average tangible equity
     (non-GAAP)    		 9.49% 9.67% 8.81% 7.57% 7.52%
    Adjusted return on average tangible equity
     (non-GAAP)    		 9.43% 10.26% 9.04% 7.42% 7.39%
               
    Adjusted non-interest expense ratio:          
    Non-interest expense (GAAP)$29,670 $31,803 $31,986 $29,816 $30,510 
    Non-recurring transactions:          
     Branch consolidation expenses and
      impairment charges    		 (187) (1,711) (1,239) (375) (347)
     Debt extinguishment expenses -  -  -  -  (796)
    Non-interest expense (non-GAAP)$29,483 $30,092 $30,747 $29,441 $29,367 
               
    Non-interest expense ratio (GAAP) 1.65% 1.76% 1.75% 1.62% 1.65%
    Adjusted non-interest expense ratio
     (non-GAAP)    		 1.64% 1.66% 1.68% 1.60% 1.59%
               
    Adjusted efficiency ratio:          
    Non-interest expense (non-GAAP)$29,483 $30,092 $30,747 $29,441 $29,367 
               
    Net interest income (GAAP)$48,687 $49,590 $49,065 $48,483 $45,893 
    Total non-interest income (GAAP) 4,133  3,800  3,496  4,614  5,814 
     Non-recurring transactions:          
     Net effect of sale and call of securities -  (1) (313) (18) (813)
     Net effect of sales of other assets (356) -  (205) (837) - 
    Total revenue (non-GAAP)$52,464 $53,389 $52,043 $52,242 $50,894 
               
    Efficiency ratio (GAAP) 56.17% 59.57% 60.86% 56.15% 59.01%
    Adjusted efficiency ratio (non-GAAP) 56.20% 56.36% 59.08% 56.36% 57.70%
                    

    For further information contact:
    Craig L. Montanaro, President and Chief Executive Officer, or
    Keith Suchodolski, Executive Vice President and Chief Financial Officer
    Kearny Financial Corp.
    (973) 244-4500


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