FAIRFIELD, N.J., April 25, 2024 (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 March 31, 2024 of $7.4 million, or $0.12 per diluted share, compared to a net loss of $13.8 million, or $0.22 per diluted share, for the quarter ended December 31, 2023. The net loss for the quarter ended December 31, 2023 was impacted by various non-recurring items, as previously disclosed.
The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on May 22, 2024, to stockholders of record as of May 8, 2024.
Craig L. Montanaro, President and Chief Executive Officer, commented, “Once again uncertainty remains on the forefront of conversations taking place on Main Street and on Wall Street. As a company we manage through such challenging periods by staying true to our guiding principles, which have endured since our founding 140 years ago this month: prudent risk management, conservative posturing and an unwavering commitment to our depositors, borrowers, employees and communities.”
Mr. Montanaro continued, “Despite the media speculation surrounding commercial real estate lending in general, and multifamily lending specifically, we maintain a low loan-to-value, low-vacancy, well-diversified commercial loan portfolio with a long history of outstanding credit performance. We subject each loan to intense scrutiny at underwriting, and on an ongoing basis, and maintain peer-leading levels of commercial loan allowance coverage and regulatory capital, as represented by our 14.7% Common Equity Tier 1 capital ratio.”
Balance Sheet
- Total assets were $7.84 billion at March 31, 2024, a decrease of $55.9 million, or 0.7%, from December 31, 2023.
- Investment securities totaled $1.24 billion at March 31, 2024, a decrease of $47.8 million, or 3.7%, from December 31, 2023.
- Loans receivable totaled $5.76 billion at March 31, 2024, an increase of $12.7 million, or 0.2%, from December 31, 2023.
- Bank-owned life insurance (“BOLI”) totaled $296.5 million at March 31, 2024, an increase of $40.4 million, or 15.8%, from December 31, 2023. The increase for the quarter was largely attributable to the completion of the BOLI restructure initiated in the prior comparative period.
- Deposits were $5.21 billion at March 31, 2024, a decrease of $110.6 million, or 2.1%, from December 31, 2023. Excluding a decrease of $50.2 million in brokered certificates of deposits, deposits decreased $60.4 million, or 1.2%, from December 31, 2023. This decrease in non-brokered deposits was driven by a $48.4 million decline in retail certificates of deposits and a $15.7 million decline in consumer savings deposits, partially offset by growth in other deposit categories.
- Borrowings were $1.72 billion at March 31, 2024, an increase of $55.1 million, or 3.3%, from December 31, 2023.
- At March 31, 2024, the Company maintained available secured borrowing capacity of $1.81 billion, of which $1.47 billion was immediately accessible via in-place collateral and $336.7 million represented the market value of unpledged securities.
Earnings
Net Interest Income and Net Interest Margin
- Net interest margin contracted 5 basis point to 1.89% for the quarter ended March 31, 2024. The decrease for the quarter was driven by an increase in the cost of interest-bearing deposits and a decrease in the average balance of interest-earning assets, partially offset by a higher yield on interest-earning assets and a decrease in the cost of interest-bearing borrowings.
- For the quarter ended March 31, 2024, net interest income decreased $1.5 million to $34.3 million from $35.8 million for the quarter ended December 31, 2023. Included in net interest income for the quarters ended March 31, 2024 and December 31, 2023, respectively, was purchase accounting accretion of $734,000 and $640,000, and loan prepayment penalty income of $61,000 and $185,000.
Non-Interest Income
- Non-interest income increased $20.2 million to income of $4.2 million for the quarter ended March 31, 2024, from a loss of $16.0 million for the quarter ended December 31, 2023. The increase was primarily attributable to a pre-tax loss of $18.1 million related to the investment securities portfolio repositioning executed during the prior comparative period.
- Income from BOLI increased $1.8 million to $3.0 million for the quarter ended March 31, 2024 from $1.2 million for the quarter ended December 31, 2023. BOLI income included a $631,000 non-recurring payment on one life insurance policy in the current period, while BOLI income was reduced by non-recurring exchange charges of $573,000 in the prior comparative period. Excluding these non-recurring items, BOLI income improved by $673,000 resulting from the previously mentioned BOLI restructure.
- Loss on sale of loans was $712,000 for the quarter ended March 31, 2024 compared to a gain on sale of loans of $104,000 for the quarter ended December 31, 2023. The loss in the current period was the result of the sale of three related nonperforming commercial real estate loans held-for-sale.
Non-Interest Expense
- For the quarter ended March 31, 2024, non-interest expense decreased $708,000, or 2.4%, to $29.1 million from $29.8 million for the quarter ended December 31, 2023, primarily driven by a decrease in salary and benefits expense and other expense.
- Salary and benefits expense decreased $371,000 primarily attributable to a non-recurring decrease of $679,000 in stock-based compensation, partially offset by an increase of $374,000 in payroll taxes associated with the start of the new calendar year.
- Other expense decreased $522,000 primarily driven by a $637,000 decrease in OREO expense following the sale of the Company’s sole OREO asset, partially offset by an increase of $288,000 in the provision for credit losses on off balance sheet commitments.
Income Taxes
- Income tax expense totaled $1.7 million for the quarter ended March 31, 2024 compared to $1.8 million for the quarter ended December 31, 2023. The decrease in income tax expense was largely due to the discrete tax expense associated with the BOLI restructure recognized in the prior comparative period, partially offset by higher pre-tax income, due primarily to realized losses on the sale of securities in the prior comparative period.
Asset Quality
- The balance of non-performing assets decreased $10.2 million to $39.5 million, or 0.50% of total assets, at March 31, 2024, from $49.8 million, or 0.63% of total assets, at December 31, 2023. This decrease was driven by the January 2024 sale of three related non-performing commercial real estate loans held-for-sale and the Company’s sole OREO asset.
- Net charge-offs totaled $286,000, or 0.02% of average loans, on an annualized basis, for the quarter ended March 31, 2024, compared to $4.1 million, or 0.29% of average loans, on an annualized basis, for the quarter ended December 31, 2023.
- For the quarter ended March 31, 2024, the Company recorded a provision for credit losses of $349,000, compared to $2.1 million for the quarter ended December 31, 2023. The provision for credit loss expense for the quarter ended March 31, 2024 was primarily driven by loan growth.
- The allowance for credit losses (“ACL”) was $44.9 million, or 0.78% of total loans, at March 31, 2024 and unchanged from December 31, 2023.
Capital
- For the quarter ended March 31, 2024, book value per share increased $0.02, or 0.2%, to $13.18 while tangible book value per share increased $0.02, or 0.2%, to $9.87.
- At March 31, 2024, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $95.0 million, partially offset by after-tax unrealized gains on derivatives of $31.3 million. After-tax net unrecognized losses on securities held to maturity of $11.4 million were not reflected in total stockholders’ equity.
- At March 31, 2024, the Company’s tangible equity to tangible assets ratio equaled 8.34% 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 Q3 2024 Investor Presentation, a copy of which is available through the Investor Relations link located at the bottom of the page of our website at www.kearnybank.com and via a Current Report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.
Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.
Category: Earnings
| Linked-Quarter Comparative Financial Analysis | ||||||||||||
| Kearny Financial Corp. Consolidated Balance Sheets (Unaudited) | ||||||||||||
| (Dollars and Shares in Thousands, Except Per Share Data) | March 31, 2024 | December 31, 2023 | Variance or Change | Variance or Change Pct. | ||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 71,027 | $ | 73,860 | $ | (2,833 | ) | -3.8 | % | |||
| Securities available for sale | 1,098,655 | 1,144,175 | (45,520 | ) | -4.0 | % | ||||||
| Securities held to maturity | 139,643 | 141,959 | (2,316 | ) | -1.6 | % | ||||||
| Loans held-for-sale | 4,117 | 14,030 | (9,913 | ) | -70.7 | % | ||||||
| Loans receivable | 5,758,336 | 5,745,629 | 12,707 | 0.2 | % | |||||||
| Less: allowance for credit losses on loans | (44,930 | ) | (44,867 | ) | 63 | 0.1 | % | |||||
| Net loans receivable | 5,713,406 | 5,700,762 | 12,644 | 0.2 | % | |||||||
| Premises and equipment | 45,053 | 45,928 | (875 | ) | -1.9 | % | ||||||
| Federal Home Loan Bank stock | 81,347 | 83,372 | (2,025 | ) | -2.4 | % | ||||||
| Accrued interest receivable | 31,065 | 30,258 | 807 | 2.7 | % | |||||||
| Goodwill | 210,895 | 210,895 | — | — | % | |||||||
| Core deposit intangible | 2,057 | 2,189 | (132 | ) | -6.0 | % | ||||||
| Bank owned life insurance | 296,493 | 256,064 | 40,429 | 15.8 | % | |||||||
| Deferred income taxes, net | 47,225 | 46,116 | 1,109 | 2.4 | % | |||||||
| Other real estate owned | — | 11,982 | (11,982 | ) | -100.0 | % | ||||||
| Other assets | 100,989 | 136,242 | (35,253 | ) | -25.9 | % | ||||||
| Total assets | $ | 7,841,972 | $ | 7,897,832 | $ | (55,860 | ) | -0.7 | % | |||
| Liabilities | ||||||||||||
| Deposits: | ||||||||||||
| Non-interest-bearing | $ | 586,089 | $ | 584,130 | $ | 1,959 | 0.3 | % | ||||
| Interest-bearing | 4,622,961 | 4,735,500 | (112,539 | ) | -2.4 | % | ||||||
| Total deposits | 5,209,050 | 5,319,630 | (110,580 | ) | -2.1 | % | ||||||
| Borrowings | 1,722,178 | 1,667,055 | 55,123 | 3.3 | % | |||||||
| Advance payments by borrowers for taxes | 17,387 | 16,742 | 645 | 3.9 | % | |||||||
| Other liabilities | 44,279 | 46,427 | (2,148 | ) | -4.6 | % | ||||||
| Total liabilities | 6,992,894 | 7,049,854 | (56,960 | ) | -0.8 | % | ||||||
| Stockholders' Equity | ||||||||||||
| Common stock | 644 | 645 | (1 | ) | -0.2 | % | ||||||
| Paid-in capital | 493,187 | 493,297 | (110 | ) | — | % | ||||||
| Retained earnings | 440,308 | 439,755 | 553 | 0.1 | % | |||||||
| Unearned ESOP shares | (21,402 | ) | (21,889 | ) | 487 | 2.2 | % | |||||
| Accumulated other comprehensive loss | (63,659 | ) | (63,830 | ) | 171 | 0.3 | % | |||||
| Total stockholders' equity | 849,078 | 847,978 | 1,100 | 0.1 | % | |||||||
| Total liabilities and stockholders' equity | $ | 7,841,972 | $ | 7,897,832 | $ | (55,860 | ) | -0.7 | % | |||
| Consolidated capital ratios | ||||||||||||
| Equity to assets | 10.83 | % | 10.74 | % | 0.09 | % | ||||||
| Tangible equity to tangible assets(1) | 8.34 | % | 8.26 | % | 0.08 | % | ||||||
| Share data | ||||||||||||
| Outstanding shares | 64,437 | 64,445 | (8 | ) | — | % | ||||||
| Book value per share | $ | 13.18 | $ | 13.16 | $ | 0.02 | 0.2 | % | ||||
| Tangible book value per share(2) | $ | 9.87 | $ | 9.85 | $ | 0.02 | 0.2 | % | ||||
___________________
| (1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. |
| (2) | Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. |
| Kearny Financial Corp. Consolidated Statements of Income (Loss) (Unaudited) | ||||||||||||
| (Dollars and Shares in Thousands, Except Per Share Data) | Three Months Ended | Variance or Change | Variance or Change Pct. | |||||||||
| March 31, 2024 | December 31, 2023 | |||||||||||
| Interest income | ||||||||||||
| Loans | $ | 64,035 | $ | 63,384 | $ | 651 | 1.0 | % | ||||
| Taxable investment securities | 15,490 | 16,756 | (1,266 | ) | -7.6 | % | ||||||
| Tax-exempt investment securities | 85 | 84 | 1 | 1.2 | % | |||||||
| Other interest-earning assets | 2,475 | 2,401 | 74 | 3.1 | % | |||||||
| Total interest income | 82,085 | 82,625 | (540 | ) | -0.7 | % | ||||||
| Interest expense | ||||||||||||
| Deposits | 32,320 | 30,340 | 1,980 | 6.5 | % | |||||||
| Borrowings | 15,446 | 16,446 | (1,000 | ) | -6.1 | % | ||||||
| Total interest expense | 47,766 | 46,786 | 980 | 2.1 | % | |||||||
| Net interest income | 34,319 | 35,839 | (1,520 | ) | -4.2 | % | ||||||
| Provision for credit losses | 349 | 2,105 | (1,756 | ) | -83.4 | % | ||||||
| Net interest income after provision for credit losses | 33,970 | 33,734 | 236 | 0.7 | % | |||||||
| Non-interest income | ||||||||||||
| Fees and service charges | 657 | 624 | 33 | 5.3 | % | |||||||
| Loss on sale and call of securities | — | (18,135 | ) | 18,135 | 100.0 | % | ||||||
| (Loss) gain on sale of loans | (712 | ) | 104 | (816 | ) | -784.6 | % | |||||
| Loss on other real estate owned | — | (974 | ) | 974 | 100.0 | % | ||||||
| Income from bank owned life insurance | 3,039 | 1,162 | 1,877 | 161.5 | % | |||||||
| Electronic banking fees and charges | 464 | 396 | 68 | 17.2 | % | |||||||
| Other income | 755 | 811 | (56 | ) | -6.9 | % | ||||||
| Total non-interest income | 4,203 | (16,012 | ) | 20,215 | 126.2 | % | ||||||
| Non-interest expense | ||||||||||||
| Salaries and employee benefits | 16,911 | 17,282 | (371 | ) | -2.1 | % | ||||||
| Net occupancy expense of premises | 2,863 | 2,674 | 189 | 7.1 | % | |||||||
| Equipment and systems | 3,823 | 3,814 | 9 | 0.2 | % | |||||||
| Advertising and marketing | 387 | 301 | 86 | 28.6 | % | |||||||
| Federal deposit insurance premium | 1,429 | 1,495 | (66 | ) | -4.4 | % | ||||||
| Directors' compensation | 360 | 393 | (33 | ) | -8.4 | % | ||||||
| Other expense | 3,286 | 3,808 | (522 | ) | -13.7 | % | ||||||
| Total non-interest expense | 29,059 | 29,767 | (708 | ) | -2.4 | % | ||||||
| Income (loss) before income taxes | 9,114 | (12,045 | ) | 21,159 | 175.7 | % | ||||||
| Income taxes | 1,717 | 1,782 | (65 | ) | -3.6 | % | ||||||
| Net income (loss) | $ | 7,397 | $ | (13,827 | ) | $ | 21,224 | 153.5 | % | |||
| Net income (loss) per common share (EPS) | ||||||||||||
| Basic | $ | 0.12 | $ | (0.22 | ) | $ | 0.34 | |||||
| Diluted | $ | 0.12 | $ | (0.22 | ) | $ | 0.34 | |||||
| Dividends declared | ||||||||||||
| Cash dividends declared per common share | $ | 0.11 | $ | 0.11 | $ | — | ||||||
| Cash dividends declared | $ | 6,844 | $ | 6,882 | $ | (38 | ) | |||||
| Dividend payout ratio | 92.5 | % | -49.8 | % | 142.3 | % | ||||||
| Weighted average number of common shares outstanding | ||||||||||||
| Basic | 62,205 | 62,299 | (94 | ) | ||||||||
| Diluted | 62,211 | 62,367 | (156 | ) | ||||||||
| Kearny Financial Corp. Average Balance Sheet Data (Unaudited) | ||||||||||||
| (Dollars in Thousands) | Three Months Ended | Variance or Change | Variance or Change Pct. | |||||||||
| March 31, 2024 | December 31, 2023 | |||||||||||
| Assets | ||||||||||||
| Interest-earning assets: | ||||||||||||
| Loans receivable, including loans held for sale | $ | 5,752,477 | $ | 5,726,321 | $ | 26,156 | 0.5 | % | ||||
| Taxable investment securities | 1,382,064 | 1,509,165 | (127,101 | ) | -8.4 | % | ||||||
| Tax-exempt investment securities | 14,614 | 15,025 | (411 | ) | -2.7 | % | ||||||
| Other interest-earning assets | 125,155 | 139,740 | (14,585 | ) | -10.4 | % | ||||||
| Total interest-earning assets | 7,274,310 | 7,390,251 | (115,941 | ) | -1.6 | % | ||||||
| Non-interest-earning assets | 577,411 | 554,335 | 23,076 | 4.2 | % | |||||||
| Total assets | $ | 7,851,721 | $ | 7,944,586 | $ | (92,865 | ) | -1.2 | % | |||
| Liabilities and Stockholders' Equity | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||
| Deposits: | ||||||||||||
| Interest-bearing demand | $ | 2,378,831 | $ | 2,301,169 | $ | 77,662 | 3.4 | % | ||||
| Savings | 635,226 | 664,926 | (29,700 | ) | -4.5 | % | ||||||
| Certificates of deposit | 1,705,513 | 1,824,316 | (118,803 | ) | -6.5 | % | ||||||
| Total interest-bearing deposits | 4,719,570 | 4,790,411 | (70,841 | ) | -1.5 | % | ||||||
| Borrowings: | ||||||||||||
| Federal Home Loan Bank advances | 1,428,801 | 1,513,497 | (84,696 | ) | -5.6 | % | ||||||
| Other borrowings | 210,989 | 142,283 | 68,706 | 48.3 | % | |||||||
| Total borrowings | 1,639,790 | 1,655,780 | (15,990 | ) | -1.0 | % | ||||||
| Total interest-bearing liabilities | 6,359,360 | 6,446,191 | (86,831 | ) | -1.3 | % | ||||||
| Non-interest-bearing liabilities: | ||||||||||||
| Non-interest-bearing deposits | 581,870 | 597,294 | (15,424 | ) | -2.6 | % | ||||||
| Other non-interest-bearing liabilities | 65,709 | 62,387 | 3,322 | 5.3 | % | |||||||
| Total non-interest-bearing liabilities | 647,579 | 659,681 | (12,102 | ) | -1.8 | % | ||||||
| Total liabilities | 7,006,939 | 7,105,872 | (98,933 | ) | -1.4 | % | ||||||
| Stockholders' equity | 844,782 | 838,714 | 6,068 | 0.7 | % | |||||||
| Total liabilities and stockholders' equity | $ | 7,851,721 | $ | 7,944,586 | $ | (92,865 | ) | -1.2 | % | |||
| Average interest-earning assets to average interest-bearing liabilities | 114.39 | % | 114.65 | % | -0.26 | % | -0.2 | % | ||||
| Kearny Financial Corp. Performance Ratio Highlights (Unaudited) | |||||||||
| Three Months Ended | Variance or Change | ||||||||
| March 31, 2024 | December 31, 2023 | ||||||||
| Average yield on interest-earning assets: | |||||||||
| Loans receivable, including loans held for sale | 4.45 | % | 4.43 | % | 0.02 | % | |||
| Taxable investment securities | 4.48 | % | 4.44 | % | 0.04 | % | |||
| Tax-exempt investment securities(1) | 2.32 | % | 2.25 | % | 0.07 | % | |||
| Other interest-earning assets | 7.91 | % | 6.87 | % | 1.04 | % | |||
| Total interest-earning assets | 4.51 | % | 4.47 | % | 0.04 | % | |||
| Average cost of interest-bearing liabilities: | |||||||||
| Deposits: | |||||||||
| Interest-bearing demand | 3.08 | % | 2.91 | % | 0.17 | % | |||
| Savings | 0.46 | % | 0.44 | % | 0.02 | % | |||
| Certificates of deposit | 3.11 | % | 2.82 | % | 0.29 | % | |||
| Total interest-bearing deposits | 2.74 | % | 2.53 | % | 0.21 | % | |||
| Borrowings: | |||||||||
| Federal Home Loan Bank advances | 3.55 | % | 3.82 | % | -0.27 | % | |||
| Other borrowings | 5.22 | % | 5.65 | % | -0.43 | % | |||
| Total borrowings | 3.77 | % | 3.97 | % | -0.20 | % | |||
| Total interest-bearing liabilities | 3.00 | % | 2.90 | % | 0.10 | % | |||
| Interest rate spread(2) | 1.51 | % | 1.57 | % | -0.06 | % | |||
| Net interest margin(3) | 1.89 | % | 1.94 | % | -0.05 | % | |||
| Non-interest income to average assets (annualized) | 0.21 | % | -0.81 | % | 1.02 | % | |||
| Non-interest expense to average assets (annualized) | 1.48 | % | 1.50 | % | -0.02 | % | |||
| Efficiency ratio(4) | 75.43 | % | 150.13 | % | -74.70 | % | |||
| Return on average assets (annualized) | 0.38 | % | -0.70 | % | 1.08 | % | |||
| Return on average equity (annualized) | 3.50 | % | -6.59 | % | 10.09 | % | |||
| Return on average tangible equity (annualized)(5) | 4.68 | % | -8.84 | % | 13.52 | % | |||
___________________
| (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) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | (Unaudited) | |||||||||||
| Assets | |||||||||||||||
| Cash and cash equivalents | $ | 71,027 | $ | 73,860 | $ | 57,219 | $ | 70,515 | $ | 194,568 | |||||
| Securities available for sale | 1,098,655 | 1,144,175 | 1,215,633 | 1,227,729 | 1,267,066 | ||||||||||
| Securities held to maturity | 139,643 | 141,959 | 143,730 | 146,465 | 149,764 | ||||||||||
| Loans held-for-sale | 4,117 | 14,030 | 3,934 | 9,591 | 5,401 | ||||||||||
| Loans receivable | 5,758,336 | 5,745,629 | 5,736,049 | 5,829,421 | 5,966,325 | ||||||||||
| Less: allowance for credit losses on loans | (44,930 | ) | (44,867 | ) | (46,872 | ) | (48,734 | ) | (49,122 | ) | |||||
| Net loans receivable | 5,713,406 | 5,700,762 | 5,689,177 | 5,780,687 | 5,917,203 | ||||||||||
| Premises and equipment | 45,053 | 45,928 | 46,868 | 48,309 | 49,589 | ||||||||||
| Federal Home Loan Bank stock | 81,347 | 83,372 | 81,509 | 71,734 | 76,319 | ||||||||||
| Accrued interest receivable | 31,065 | 30,258 | 29,766 | 28,133 | 28,794 | ||||||||||
| Goodwill | 210,895 | 210,895 | 210,895 | 210,895 | 210,895 | ||||||||||
| Core deposit intangible | 2,057 | 2,189 | 2,323 | 2,457 | 2,590 | ||||||||||
| Bank owned life insurance | 296,493 | 256,064 | 294,491 | 292,825 | 291,220 | ||||||||||
| Deferred income taxes, net | 47,225 | 46,116 | 56,500 | 51,973 | 53,151 | ||||||||||
| Other real estate owned | — | 11,982 | 12,956 | 12,956 | 13,410 | ||||||||||
| Other assets | 100,989 | 136,242 | 129,865 | 110,546 | 89,366 | ||||||||||
| Total assets | $ | 7,841,972 | $ | 7,897,832 | $ | 7,974,866 | $ | 8,064,815 | $ | 8,349,336 | |||||
| Liabilities | |||||||||||||||
| Deposits: | |||||||||||||||
| Non-interest-bearing | $ | 586,089 | $ | 584,130 | $ | 595,141 | $ | 609,999 | $ | 617,778 | |||||
| Interest-bearing | 4,622,961 | 4,735,500 | 4,839,027 | 5,019,184 | 5,185,626 | ||||||||||
| Total deposits | 5,209,050 | 5,319,630 | 5,434,168 | 5,629,183 | 5,803,404 | ||||||||||
| Borrowings | 1,722,178 | 1,667,055 | 1,626,933 | 1,506,812 | 1,611,692 | ||||||||||
| Advance payments by borrowers for taxes | 17,387 | 16,742 | 16,907 | 18,338 | 18,706 | ||||||||||
| Other liabilities | 44,279 | 46,427 | 47,324 | 41,198 | 49,304 | ||||||||||
| Total liabilities | 6,992,894 | 7,049,854 | 7,125,332 | 7,195,531 | 7,483,106 | ||||||||||
| Stockholders' Equity | |||||||||||||||
| Common stock | 644 | 645 | 652 | 659 | 667 | ||||||||||
| Paid-in capital | 493,187 | 493,297 | 497,269 | 503,332 | 509,359 | ||||||||||
| Retained earnings | 440,308 | 439,755 | 460,464 | 457,611 | 452,605 | ||||||||||
| Unearned ESOP shares | (21,402 | ) | (21,889 | ) | (22,375 | ) | (22,862 | ) | (23,348 | ) | |||||
| Accumulated other comprehensive loss | (63,659 | ) | (63,830 | ) | (86,476 | ) | (69,456 | ) | (73,053 | ) | |||||
| Total stockholders' equity | 849,078 | 847,978 | 849,534 | 869,284 | 866,230 | ||||||||||
| Total liabilities and stockholders' equity | $ | 7,841,972 | $ | 7,897,832 | $ | 7,974,866 | $ | 8,064,815 | $ | 8,349,336 | |||||
| Consolidated capital ratios | |||||||||||||||
| Equity to assets | 10.83 | % | 10.74 | % | 10.65 | % | 10.78 | % | 10.37 | % | |||||
| Tangible equity to tangible assets(1) | 8.34 | % | 8.26 | % | 8.20 | % | 8.35 | % | 8.02 | % | |||||
| Share data | |||||||||||||||
| Outstanding shares | 64,437 | 64,445 | 65,132 | 65,864 | 66,680 | ||||||||||
| Book value per share | $ | 13.18 | $ | 13.16 | $ | 13.04 | $ | 13.20 | $ | 12.99 | |||||
| Tangible book value per share(2) | $ | 9.87 | $ | 9.85 | $ | 9.77 | $ | 9.96 | $ | 9.79 | |||||
___________________
| (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) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| Loan portfolio composition: | |||||||||||||||
| Commercial loans: | |||||||||||||||
| Multi-family mortgage | $ | 2,645,195 | $ | 2,651,274 | $ | 2,699,151 | $ | 2,761,775 | $ | 2,835,852 | |||||
| Nonresidential mortgage | 965,539 | 947,287 | 946,801 | 968,574 | 1,002,643 | ||||||||||
| Commercial business | 147,326 | 144,134 | 149,229 | 146,861 | 162,038 | ||||||||||
| Construction | 229,457 | 221,933 | 230,703 | 226,609 | 215,524 | ||||||||||
| Total commercial loans | 3,987,517 | 3,964,628 | 4,025,884 | 4,103,819 | 4,216,057 | ||||||||||
| One- to four-family residential mortgage | 1,741,644 | 1,746,065 | 1,689,051 | 1,700,559 | 1,713,343 | ||||||||||
| Consumer loans: | |||||||||||||||
| Home equity loans | 42,731 | 43,517 | 42,896 | 43,549 | 44,376 | ||||||||||
| Other consumer | 3,198 | 2,728 | 2,644 | 2,549 | 2,592 | ||||||||||
| Total consumer loans | 45,929 | 46,245 | 45,540 | 46,098 | 46,968 | ||||||||||
| Total loans, excluding yield adjustments | 5,775,090 | 5,756,938 | 5,760,475 | 5,850,476 | 5,976,368 | ||||||||||
| Unaccreted yield adjustments | (16,754 | ) | (11,309 | ) | (24,426 | ) | (21,055 | ) | (10,043 | ) | |||||
| Loans receivable, net of yield adjustments | 5,758,336 | 5,745,629 | 5,736,049 | 5,829,421 | 5,966,325 | ||||||||||
| Less: allowance for credit losses on loans | (44,930 | ) | (44,867 | ) | (46,872 | ) | (48,734 | ) | (49,122 | ) | |||||
| Net loans receivable | $ | 5,713,406 | $ | 5,700,762 | $ | 5,689,177 | $ | 5,780,687 | $ | 5,917,203 | |||||
| Asset quality: | |||||||||||||||
| Nonperforming assets: | |||||||||||||||
| Accruing loans - 90 days and over past due | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
| Nonaccrual loans | 39,546 | 28,089 | 37,912 | 42,627 | 44,026 | ||||||||||
| Total nonperforming loans | 39,546 | 28,089 | 37,912 | 42,627 | 44,026 | ||||||||||
| Nonaccrual loans held-for-sale | — | 9,700 | — | — | — | ||||||||||
| Other real estate owned | — | 11,982 | 12,956 | 12,956 | 13,410 | ||||||||||
| Total nonperforming assets | $ | 39,546 | $ | 49,771 | $ | 50,868 | $ | 55,583 | $ | 57,436 | |||||
| Nonperforming loans (% total loans) | 0.69 | % | 0.49 | % | 0.66 | % | 0.73 | % | 0.74 | % | |||||
| Nonperforming assets (% total assets) | 0.50 | % | 0.63 | % | 0.64 | % | 0.69 | % | 0.69 | % | |||||
| Classified loans | $ | 115,772 | $ | 94,676 | $ | 98,616 | $ | 93,526 | $ | 103,461 | |||||
| Allowance for credit losses on loans (ACL): | |||||||||||||||
| ACL to total loans | 0.78 | % | 0.78 | % | 0.81 | % | 0.83 | % | 0.82 | % | |||||
| ACL to nonperforming loans | 113.61 | % | 159.73 | % | 123.63 | % | 114.33 | % | 111.57 | % | |||||
| Net charge-offs | $ | 286 | $ | 4,110 | $ | 2,107 | $ | 82 | $ | 206 | |||||
| Average net charge-off rate (annualized) | 0.02 | % | 0.29 | % | 0.15 | % | 0.01 | % | 0.01 | % | |||||
| Kearny Financial Corp. Supplemental Balance Sheet Highlights (Unaudited) | |||||||||||||||
| (Dollars in Thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| Funding composition: | |||||||||||||||
| Deposits: | |||||||||||||||
| Non-interest-bearing deposits | $ | 586,089 | $ | 584,130 | $ | 595,141 | $ | 609,999 | $ | 617,778 | |||||
| Interest-bearing demand | 2,349,032 | 2,347,262 | 2,236,573 | 2,252,912 | 2,285,799 | ||||||||||
| Savings | 630,456 | 646,182 | 689,163 | 748,721 | 811,483 | ||||||||||
| Certificates of deposit (retail) | 1,235,261 | 1,283,676 | 1,300,382 | 1,377,028 | 1,327,343 | ||||||||||
| Certificates of deposit (brokered and listing service) | 408,212 | 458,380 | 612,909 | 640,523 | 761,001 | ||||||||||
| Interest-bearing deposits | 4,622,961 | 4,735,500 | 4,839,027 | 5,019,184 | 5,185,626 | ||||||||||
| Total deposits | 5,209,050 | 5,319,630 | 5,434,168 | 5,629,183 | 5,803,404 | ||||||||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 1,357,178 | 1,432,055 | 1,456,933 | 1,281,812 | 1,156,692 | ||||||||||
| Other borrowings | 365,000 | 235,000 | 170,000 | 225,000 | 455,000 | ||||||||||
| Total borrowings | 1,722,178 | 1,667,055 | 1,626,933 | 1,506,812 | 1,611,692 | ||||||||||
| Total funding | $ | 6,931,228 | $ | 6,986,685 | $ | 7,061,101 | $ | 7,135,995 | $ | 7,415,096 | |||||
| Loans as a % of deposits | 109.8 | % | 107.4 | % | 104.8 | % | 102.9 | % | 102.1 | % | |||||
| Deposits as a % of total funding | 75.2 | % | 76.1 | % | 77.0 | % | 78.9 | % | 78.3 | % | |||||
| Borrowings as a % of total funding | 24.8 | % | 23.9 | % | 23.0 | % | 21.1 | % | 21.7 | % | |||||
| Uninsured deposits: | |||||||||||||||
| Uninsured deposits (reported)(1) | $ | 1,760,740 | $ | 1,813,122 | $ | 1,734,288 | $ | 1,771,416 | $ | 1,678,051 | |||||
| Uninsured deposits (adjusted)(2) | $ | 718,026 | $ | 694,510 | $ | 683,265 | $ | 710,377 | $ | 705,727 | |||||
___________________
| (1) | Uninsured deposits of Kearny Bank. |
| (2) | Uninsured deposits of Kearny Bank adjusted to exclude deposits of its wholly-owned subsidiary and holding company and collateralized deposits of state and local governments. |
| Kearny Financial Corp. Consolidated Statements of Income (Loss) (Unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| (Dollars and Shares in Thousands, Except Per Share Data) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| Interest income | |||||||||||||||
| Loans | $ | 64,035 | $ | 63,384 | $ | 62,769 | $ | 62,044 | $ | 60,172 | |||||
| Taxable investment securities | 15,490 | 16,756 | 16,265 | 15,736 | 15,459 | ||||||||||
| Tax-exempt investment securities | 85 | 84 | 87 | 91 | 99 | ||||||||||
| Other interest-earning assets | 2,475 | 2,401 | 2,047 | 1,821 | 1,441 | ||||||||||
| Total interest income | 82,085 | 82,625 | 81,168 | 79,692 | 77,171 | ||||||||||
| Interest expense | |||||||||||||||
| Deposits | 32,320 | 30,340 | 27,567 | 26,226 | 22,246 | ||||||||||
| Borrowings | 15,446 | 16,446 | 14,441 | 13,286 | 12,554 | ||||||||||
| Total interest expense | 47,766 | 46,786 | 42,008 | 39,512 | 34,800 | ||||||||||
| Net interest income | 34,319 | 35,839 | 39,160 | 40,180 | 42,371 | ||||||||||
| Provision for (reversal of) credit losses | 349 | 2,105 | 245 | (306 | ) | 451 | |||||||||
| Net interest income after provision for (reversal of) credit losses | 33,970 | 33,734 | 38,915 | 40,486 | 41,920 | ||||||||||
| Non-interest income | |||||||||||||||
| Fees and service charges | 657 | 624 | 748 | 699 | 910 | ||||||||||
| Loss on sale and call of securities | — | (18,135 | ) | — | — | — | |||||||||
| Gain (loss) on sale of loans | (712 | ) | 104 | 215 | 199 | (2,373 | ) | ||||||||
| Loss on sale of other real estate owned | — | (974 | ) | — | (139 | ) | — | ||||||||
| Income from bank owned life insurance | 3,039 | 1,162 | 1,666 | 1,605 | 1,581 | ||||||||||
| Electronic banking fees and charges | 464 | 396 | 367 | 399 | 457 | ||||||||||
| Other income | 755 | 811 | 1,014 | 903 | 1,071 | ||||||||||
| Total non-interest income | 4,203 | (16,012 | ) | 4,010 | 3,666 | 1,646 | |||||||||
| Non-interest expense | |||||||||||||||
| Salaries and employee benefits | 16,911 | 17,282 | 17,761 | 17,315 | 18,005 | ||||||||||
| Net occupancy expense of premises | 2,863 | 2,674 | 2,758 | 2,862 | 3,097 | ||||||||||
| Equipment and systems | 3,823 | 3,814 | 3,801 | 3,511 | 3,537 | ||||||||||
| Advertising and marketing | 387 | 301 | 228 | 231 | 413 | ||||||||||
| Federal deposit insurance premium | 1,429 | 1,495 | 1,524 | 1,455 | 1,546 | ||||||||||
| Directors' compensation | 360 | 393 | 393 | 345 | 340 | ||||||||||
| Other expense | 3,286 | 3,808 | 3,309 | 3,042 | 3,414 | ||||||||||
| Total non-interest expense | 29,059 | 29,767 | 29,774 | 28,761 | 30,352 | ||||||||||
| Income (loss) before income taxes | 9,114 | (12,045 | ) | 13,151 | 15,391 | 13,214 | |||||||||
| Income taxes | 1,717 | 1,782 | 3,309 | 3,378 | 2,902 | ||||||||||
| Net income (loss) | $ | 7,397 | $ | (13,827 | ) | $ | 9,842 | $ | 12,013 | $ | 10,312 | ||||
| Net income (loss) per common share (EPS) | |||||||||||||||
| Basic | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | $ | 0.16 | ||||
| Diluted | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | $ | 0.16 | ||||
| Dividends declared | |||||||||||||||
| Cash dividends declared per common share | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.11 | |||||
| Cash dividends declared | $ | 6,844 | $ | 6,882 | $ | 6,989 | $ | 7,007 | $ | 7,196 | |||||
| Dividend payout ratio | 92.5 | % | -49.8 | % | 71.0 | % | 58.3 | % | 69.8 | % | |||||
| Weighted average number of common shares outstanding | |||||||||||||||
| Basic | 62,205 | 62,299 | 63,014 | 63,667 | 64,769 | ||||||||||
| Diluted | 62,211 | 62,367 | 63,061 | 63,667 | 64,783 | ||||||||||
| Kearny Financial Corp. Average Balance Sheet Data (Unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| (Dollars in Thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| Assets | |||||||||||||||
| Interest-earning assets: | |||||||||||||||
| Loans receivable, including loans held-for-sale | $ | 5,752,477 | $ | 5,726,321 | $ | 5,788,074 | $ | 5,932,541 | $ | 5,986,669 | |||||
| Taxable investment securities | 1,382,064 | 1,509,165 | 1,516,393 | 1,529,582 | 1,558,222 | ||||||||||
| Tax-exempt investment securities | 14,614 | 15,025 | 15,483 | 16,346 | 17,663 | ||||||||||
| Other interest-earning assets | 125,155 | 139,740 | 130,829 | 128,158 | 131,682 | ||||||||||
| Total interest-earning assets | 7,274,310 | 7,390,251 | 7,450,779 | 7,606,627 | 7,694,236 | ||||||||||
| Non-interest-earning assets | 577,411 | 554,335 | 568,723 | 556,962 | 575,009 | ||||||||||
| Total assets | $ | 7,851,721 | $ | 7,944,586 | $ | 8,019,502 | $ | 8,163,589 | $ | 8,269,245 | |||||
| Liabilities and Stockholders' Equity | |||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Interest-bearing demand | $ | 2,378,831 | $ | 2,301,169 | $ | 2,245,831 | $ | 2,321,120 | $ | 2,363,762 | |||||
| Savings | 635,226 | 664,926 | 719,508 | 774,854 | 858,673 | ||||||||||
| Certificates of deposit | 1,705,513 | 1,824,316 | 1,968,512 | 2,057,818 | 2,069,396 | ||||||||||
| Total interest-bearing deposits | 4,719,570 | 4,790,411 | 4,933,851 | 5,153,792 | 5,291,831 | ||||||||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 1,428,801 | 1,513,497 | 1,386,473 | 1,374,316 | 1,402,269 | ||||||||||
| Other borrowings | 210,989 | 142,283 | 158,098 | 100,055 | 1,611 | ||||||||||
| Total borrowings | 1,639,790 | 1,655,780 | 1,544,571 | 1,474,371 | 1,403,880 | ||||||||||
| Total interest-bearing liabilities | 6,359,360 | 6,446,191 | 6,478,422 | 6,628,163 | 6,695,711 | ||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||
| Non-interest-bearing deposits | 581,870 | 597,294 | 612,251 | 608,765 | 634,324 | ||||||||||
| Other non-interest-bearing liabilities | 65,709 | 62,387 | 66,701 | 64,970 | 60,327 | ||||||||||
| Total non-interest-bearing liabilities | 647,579 | 659,681 | 678,952 | 673,735 | 694,651 | ||||||||||
| Total liabilities | 7,006,939 | 7,105,872 | 7,157,374 | 7,301,898 | 7,390,362 | ||||||||||
| Stockholders' equity | 844,782 | 838,714 | 862,128 | 861,691 | 878,883 | ||||||||||
| Total liabilities and stockholders' equity | $ | 7,851,721 | $ | 7,944,586 | $ | 8,019,502 | $ | 8,163,589 | $ | 8,269,245 | |||||
| Average interest-earning assets to average interest-bearing liabilities | 114.39 | % | 114.65 | % | 115.01 | % | 114.76 | % | 114.91 | % | |||||
| Kearny Financial Corp. Performance Ratio Highlights | |||||||||||||||
| Three Months Ended | |||||||||||||||
| March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||
| Average yield on interest-earning assets: | |||||||||||||||
| Loans receivable, including loans held-for-sale | 4.45 | % | 4.43 | % | 4.34 | % | 4.18 | % | 4.02 | % | |||||
| Taxable investment securities | 4.48 | % | 4.44 | % | 4.29 | % | 4.12 | % | 3.97 | % | |||||
| Tax-exempt investment securities(1) | 2.32 | % | 2.25 | % | 2.25 | % | 2.23 | % | 2.23 | % | |||||
| Other interest-earning assets | 7.91 | % | 6.87 | % | 6.26 | % | 5.68 | % | 4.38 | % | |||||
| Total interest-earning assets | 4.51 | % | 4.47 | % | 4.36 | % | 4.19 | % | 4.01 | % | |||||
| Average cost of interest-bearing liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Interest-bearing demand | 3.08 | % | 2.91 | % | 2.58 | % | 2.38 | % | 2.01 | % | |||||
| Savings | 0.46 | % | 0.44 | % | 0.47 | % | 0.48 | % | 0.41 | % | |||||
| Certificates of deposit | 3.11 | % | 2.82 | % | 2.49 | % | 2.24 | % | 1.84 | % | |||||
| Total interest-bearing deposits | 2.74 | % | 2.53 | % | 2.23 | % | 2.04 | % | 1.68 | % | |||||
| Borrowings: | |||||||||||||||
| Federal Home Loan Bank advances | 3.55 | % | 3.82 | % | 3.54 | % | 3.51 | % | 3.58 | % | |||||
| Other borrowings | 5.22 | % | 5.65 | % | 5.46 | % | 4.89 | % | 5.15 | % | |||||
| Total borrowings | 3.77 | % | 3.97 | % | 3.74 | % | 3.60 | % | 3.58 | % | |||||
| Total interest-bearing liabilities | 3.00 | % | 2.90 | % | 2.59 | % | 2.38 | % | 2.08 | % | |||||
| Interest rate spread(2) | 1.51 | % | 1.57 | % | 1.77 | % | 1.81 | % | 1.93 | % | |||||
| Net interest margin(3) | 1.89 | % | 1.94 | % | 2.10 | % | 2.11 | % | 2.20 | % | |||||
| Non-interest income to average assets (annualized) | 0.21 | % | -0.81 | % | 0.20 | % | 0.18 | % | 0.08 | % | |||||
| Non-interest expense to average assets (annualized) | 1.48 | % | 1.50 | % | 1.49 | % | 1.41 | % | 1.47 | % | |||||
| Efficiency ratio(4) | 75.43 | % | 150.13 | % | 68.97 | % | 65.60 | % | 68.96 | % | |||||
| Return on average assets (annualized) | 0.38 | % | -0.70 | % | 0.49 | % | 0.59 | % | 0.50 | % | |||||
| Return on average equity (annualized) | 3.50 | % | -6.59 | % | 4.57 | % | 5.58 | % | 4.69 | % | |||||
| Return on average tangible equity (annualized)(5) | 4.68 | % | -8.84 | % | 6.07 | % | 7.41 | % | 6.20 | % | |||||
___________________
| (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) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| Adjusted net income: | |||||||||||||||
| Net income (loss) (GAAP) | $ | 7,397 | $ | (13,827 | ) | $ | 9,842 | $ | 12,013 | $ | 10,312 | ||||
| Non-recurring transactions - net of tax: | |||||||||||||||
| Branch consolidation expenses | — | — | — | — | 568 | ||||||||||
| Net effect of sale and call of securities | — | 12,876 | — | — | — | ||||||||||
| Net effect of bank-owned life insurance restructure | — | 6,286 | — | — | — | ||||||||||
| Adjusted net income | $ | 7,397 | $ | 5,335 | $ | 9,842 | $ | 12,013 | $ | 10,880 | |||||
| Calculation of pre-tax, pre-provision net revenue: | |||||||||||||||
| Net income (loss) (GAAP) | $ | 7,397 | $ | (13,827 | ) | $ | 9,842 | $ | 12,013 | $ | 10,312 | ||||
| Adjustments to net income (GAAP): | |||||||||||||||
| Provision for income taxes | 1,717 | 1,782 | 3,309 | 3,378 | 2,902 | ||||||||||
| Provision for (reversal of) credit losses | 349 | 2,105 | 245 | (306 | ) | 451 | |||||||||
| Pre-tax, pre-provision net revenue (non-GAAP) | $ | 9,463 | $ | (9,940 | ) | $ | 13,396 | $ | 15,085 | $ | 13,665 | ||||
| Adjusted earnings per share: | |||||||||||||||
| Weighted average common shares - basic | 62,205 | 62,299 | 63,014 | 63,667 | 64,769 | ||||||||||
| Weighted average common shares - diluted | 62,211 | 62,367 | 63,061 | 63,667 | 64,783 | ||||||||||
| Earnings per share - basic (GAAP) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | $ | 0.16 | ||||
| Earnings per share - diluted (GAAP) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | $ | 0.16 | ||||
| Adjusted earnings per share - basic (non-GAAP) | $ | 0.12 | $ | 0.09 | $ | 0.16 | $ | 0.19 | $ | 0.17 | |||||
| Adjusted earnings per share - diluted (non-GAAP) | $ | 0.12 | $ | 0.09 | $ | 0.16 | $ | 0.19 | $ | 0.17 | |||||
| Pre-tax, pre-provision net revenue per share: | |||||||||||||||
| Pre-tax, pre-provision net revenue per share - basic (non-GAAP) | $ | 0.15 | $ | (0.16 | ) | $ | 0.21 | $ | 0.24 | $ | 0.21 | ||||
| Pre-tax, pre-provision net revenue per share - diluted (non-GAAP) | $ | 0.15 | $ | (0.16 | ) | $ | 0.21 | $ | 0.24 | $ | 0.21 | ||||
| Adjusted return on average assets: | |||||||||||||||
| Total average assets | $ | 7,851,721 | $ | 7,944,586 | $ | 8,019,502 | $ | 8,163,589 | $ | 8,269,245 | |||||
| Return on average assets (GAAP) | 0.38 | % | -0.70 | % | 0.49 | % | 0.59 | % | 0.50 | % | |||||
| Adjusted return on average assets (non-GAAP) | 0.38 | % | 0.27 | % | 0.49 | % | 0.59 | % | 0.53 | % | |||||
| Adjusted return on average equity: | |||||||||||||||
| Total average equity | $ | 844,782 | $ | 838,714 | $ | 862,128 | $ | 861,691 | $ | 878,883 | |||||
| Return on average equity (GAAP) | 3.50 | % | -6.59 | % | 4.57 | % | 5.58 | % | 4.69 | % | |||||
| Adjusted return on average equity (non-GAAP) | 3.50 | % | 2.54 | % | 4.57 | % | 5.58 | % | 4.95 | % | |||||
| Kearny Financial Corp. Reconciliation of GAAP to Non-GAAP (Unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| (Dollars and Shares in Thousands, Except Per Share Data) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| Adjusted return on average tangible equity: | |||||||||||||||
| Total average equity | $ | 844,782 | $ | 838,714 | $ | 862,128 | $ | 861,691 | $ | 878,883 | |||||
| Less: average goodwill | (210,895 | ) | (210,895 | ) | (210,895 | ) | (210,895 | ) | (210,895 | ) | |||||
| Less: average other intangible assets | (2,138 | ) | (2,277 | ) | (2,411 | ) | (2,544 | ) | (2,683 | ) | |||||
| Total average tangible equity | $ | 631,749 | $ | 625,542 | $ | 648,822 | $ | 648,252 | $ | 665,305 | |||||
| Return on average tangible equity (non-GAAP) | 4.68 | % | -8.84 | % | 6.07 | % | 7.41 | % | 6.20 | % | |||||
| Adjusted return on average tangible equity (non-GAAP) | 4.68 | % | 3.41 | % | 6.07 | % | 7.41 | % | 6.54 | % | |||||
| Adjusted non-interest expense ratio: | |||||||||||||||
| Non-interest expense (GAAP) | $ | 29,059 | $ | 29,767 | $ | 29,774 | $ | 28,761 | $ | 30,352 | |||||
| Non-recurring transactions: | |||||||||||||||
| Branch consolidation expenses | — | — | — | — | (800 | ) | |||||||||
| Non-interest expense (non-GAAP) | $ | 29,059 | $ | 29,767 | $ | 29,774 | $ | 28,761 | $ | 29,552 | |||||
| Non-interest expense ratio (GAAP) | 1.48 | % | 1.50 | % | 1.49 | % | 1.41 | % | 1.47 | % | |||||
| Adjusted non-interest expense ratio (non-GAAP) | 1.48 | % | 1.50 | % | 1.49 | % | 1.41 | % | 1.43 | % | |||||
| Adjusted efficiency ratio: | |||||||||||||||
| Non-interest expense (non-GAAP) | $ | 29,059 | $ | 29,767 | $ | 29,774 | $ | 28,761 | $ | 29,552 | |||||
| Net interest income (GAAP) | $ | 34,319 | $ | 35,839 | $ | 39,160 | $ | 40,180 | $ | 42,371 | |||||
| Total non-interest income (GAAP) | 4,203 | (16,012 | ) | 4,010 | 3,666 | 1,646 | |||||||||
| Non-recurring transactions: | |||||||||||||||
| Net effect of sale and call of securities | — | 18,135 | — | — | — | ||||||||||
| Net effect of bank-owned life insurance restructure | — | 573 | — | — | — | ||||||||||
| Total revenue (non-GAAP) | $ | 38,522 | $ | 38,535 | $ | 43,170 | $ | 43,846 | $ | 44,017 | |||||
| Efficiency ratio (GAAP) | 75.43 | % | 150.13 | % | 68.97 | % | 65.60 | % | 68.96 | % | |||||
| Adjusted efficiency ratio (non-GAAP) | 75.43 | % | 77.25 | % | 68.97 | % | 65.60 | % | 67.14 | % | |||||
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
