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Globe Newswire 25-Jul-2024 8:30 AM
FAIRFIELD, N.J., July 25, 2024 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the "Company"), the holding company of Kearny Bank (the "Bank"), reported a GAAP net loss for the quarter ended June 30, 2024 of $90.1 million, or $1.45 per diluted share, attributable to a non-cash, after-tax, goodwill impairment of $95.3 million. Excluding the impact of the goodwill impairment and other non-recurring transactions, adjusted net income for the quarter ended June 30, 2024 was $5.6 million, or $0.09 per diluted share, as compared to net income of $7.4 million, or $0.12 per diluted share, for the quarter ended March 31, 2024.
"Goodwill impairment in no way affects our ongoing strategy or our ability to serve the banking needs of our clients," said Craig L. Montanaro, President & Chief Executive Officer. "It also has no impact on our financial condition, robust liquidity position, or peer-leading regulatory capital ratios. This impairment simply reflects the impact of the current interest rate environment on bank stock prices, including our own."
For the fiscal year ended June 30, 2024, the Company reported a GAAP net loss of $86.7 million, or $1.39 per diluted share, compared to GAAP net income of $40.8 million, or $0.63 per diluted share, for the fiscal year ended June 30, 2023, primarily attributable to the non-cash goodwill impairment mentioned above. Excluding the impact of the goodwill impairment and other non-recurring transactions, adjusted net income for the fiscal year ended June 30, 2024 was $28.2 million, or $0.45 per diluted share, as compared to adjusted net income of $50.6 million, or $0.78 per diluted share, for the fiscal year ended June 30, 2023.
The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on August 26, 2024, to stockholders of record as of August 12, 2024.
"Despite the challenging interest rate environment we have plenty of positive news to report this quarter," Mr. Montanaro said. "The performance of our commercial real estate and multifamily portfolios continues to be outstanding, with non-performing assets having improved by $15.7 million, or 0.17% of assets, from June 30, 2023. Our deposit origination efforts, including those via our digital channel, have continued to gain traction with non interest-bearing deposits growing $12.3 million, or 2.1%, quarter-over-quarter. In addition, we now anticipate a net interest margin inflection in the near-term, as our retail time deposit portfolio has repriced above 4.00% and non-maturity deposit disintermediation has meaningfully slowed."
Mr. Montanaro concluded by noting, "As described in greater detail later in this release, we fully charged-off a $3.3 million non-performing commercial & industrial lending relationship this quarter. We do not view this charge-off as a reflection of any broader weakness in our loan portfolio, but rather a borrower-specific event."
Balance Sheet
Earnings
Net Interest Income and Net Interest Margin
Non-Interest Income
Non-Interest Expense
Income Taxes
Asset Quality
Capital
This earnings release should be read in conjunction with Kearny Financial Corp.'s Q4 2024 Investor Presentation, a copy of which is available through the Investor Relations link located at the bottom of the page of our website at www.kearnybank.com and via a Current Report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.
Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.
For further information contact:
Keith Suchodolski, Senior Executive Vice President and Chief Operating Officer, or
Sean Byrnes, Executive Vice President and Chief Financial Officer
Kearny Financial Corp.
(973) 244-4500
Category: Earnings
Linked-Quarter Comparative Financial Analysis |
Kearny Financial Corp.
Consolidated Balance Sheets
(Unaudited)
(Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | Variance or Change | Variance or Change Pct. | |||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 63,864 | $ | 71,027 | $ | (7,163 | ) | -10.1 | % | ||
Securities available for sale | 1,072,833 | 1,098,655 | (25,822 | ) | -2.4 | % | |||||
Securities held to maturity | 135,742 | 139,643 | (3,901 | ) | -2.8 | % | |||||
Loans held-for-sale | 6,036 | 4,117 | 1,919 | 46.6 | % | ||||||
Loans receivable | 5,732,787 | 5,758,336 | (25,549 | ) | -0.4 | % | |||||
Less: allowance for credit losses on loans | (44,939 | ) | (44,930 | ) | 9 | — | % | ||||
Net loans receivable | 5,687,848 | 5,713,406 | (25,558 | ) | -0.4 | % | |||||
Premises and equipment | 44,940 | 45,053 | (113 | ) | -0.3 | % | |||||
Federal Home Loan Bank stock | 80,300 | 81,347 | (1,047 | ) | -1.3 | % | |||||
Accrued interest receivable | 29,521 | 31,065 | (1,544 | ) | -5.0 | % | |||||
Goodwill | 113,525 | 210,895 | (97,370 | ) | -46.2 | % | |||||
Core deposit intangible | 1,931 | 2,057 | (126 | ) | -6.1 | % | |||||
Bank owned life insurance | 297,874 | 296,493 | 1,381 | 0.5 | % | ||||||
Deferred income taxes, net | 50,339 | 47,225 | 3,114 | 6.6 | % | ||||||
Other assets | 98,708 | 100,989 | (2,281 | ) | -2.3 | % | |||||
Total assets | $ | 7,683,461 | $ | 7,841,972 | $ | (158,511 | ) | -2.0 | % | ||
Liabilities | |||||||||||
Deposits: | |||||||||||
Non-interest-bearing | $ | 598,366 | $ | 586,089 | $ | 12,277 | 2.1 | % | |||
Interest-bearing | 4,559,757 | 4,622,961 | (63,204 | ) | -1.4 | % | |||||
Total deposits | 5,158,123 | 5,209,050 | (50,927 | ) | -1.0 | % | |||||
Borrowings | 1,709,789 | 1,722,178 | (12,389 | ) | -0.7 | % | |||||
Advance payments by borrowers for taxes | 17,409 | 17,387 | 22 | 0.1 | % | ||||||
Other liabilities | 44,569 | 44,279 | 290 | 0.7 | % | ||||||
Total liabilities | 6,929,890 | 6,992,894 | (63,004 | ) | -0.9 | % | |||||
Stockholders' Equity | |||||||||||
Common stock | 644 | 644 | — | — | % | ||||||
Paid-in capital | 493,680 | 493,187 | 493 | 0.1 | % | ||||||
Retained earnings | 343,326 | 440,308 | (96,982 | ) | -22.0 | % | |||||
Unearned ESOP shares | (20,916 | ) | (21,402 | ) | 486 | 2.3 | % | ||||
Accumulated other comprehensive loss | (63,163 | ) | (63,659 | ) | 496 | 0.8 | % | ||||
Total stockholders' equity | 753,571 | 849,078 | (95,507 | ) | -11.2 | % | |||||
Total liabilities and stockholders' equity | $ | 7,683,461 | $ | 7,841,972 | $ | (158,511 | ) | -2.0 | % | ||
Consolidated capital ratios | |||||||||||
Equity to assets | 9.81 | % | 10.83 | % | -1.02 | % | |||||
Tangible equity to tangible assets(1) | 8.43 | % | 8.34 | % | 0.09 | % | |||||
Share data | |||||||||||
Outstanding shares | 64,434 | 64,437 | (3 | ) | — | % | |||||
Book value per share | $ | 11.70 | $ | 13.18 | $ | (1.48 | ) | -11.2 | % | ||
Tangible book value per share(2) | $ | 9.90 | $ | 9.87 | $ | 0.03 | 0.3 | % | |||
_________________________
(1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. |
(2) | Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. |
Kearny Financial Corp.
Consolidated Statements of Income (Loss)
(Unaudited)
(Dollars and Shares in Thousands, Except Per Share Data) | Three Months Ended | Variance or Change | Variance or Change Pct. | ||||||||
June 30, 2024 | March 31, 2024 | ||||||||||
Interest income | |||||||||||
Loans | $ | 65,819 | $ | 64,035 | $ | 1,784 | 2.8 | % | |||
Taxable investment securities | 14,802 | 15,490 | (688 | ) | -4.4 | % | |||||
Tax-exempt investment securities | 80 | 85 | (5 | ) | -5.9 | % | |||||
Other interest-earning assets | 2,289 | 2,475 | (186 | ) | -7.5 | % | |||||
Total interest income | 82,990 | 82,085 | 905 | 1.1 | % | ||||||
Interest expense | |||||||||||
Deposits | 32,187 | 32,320 | (133 | ) | -0.4 | % | |||||
Borrowings | 17,527 | 15,446 | 2,081 | 13.5 | % | ||||||
Total interest expense | 49,714 | 47,766 | 1,948 | 4.1 | % | ||||||
Net interest income | 33,276 | 34,319 | (1,043 | ) | -3.0 | % | |||||
Provision for credit losses | 3,527 | 349 | 3,178 | 910.6 | % | ||||||
Net interest income after provision for credit losses | 29,749 | 33,970 | (4,221 | ) | -12.4 | % | |||||
Non-interest income | |||||||||||
Fees and service charges | 580 | 657 | (77 | ) | -11.7 | % | |||||
Gain (loss) on sale of loans | 111 | (712 | ) | 823 | -115.6 | % | |||||
Income from bank owned life insurance | 3,209 | 3,039 | 170 | 5.6 | % | ||||||
Electronic banking fees and charges | 1,130 | 464 | 666 | 143.5 | % | ||||||
Other income | 776 | 755 | 21 | 2.8 | % | ||||||
Total non-interest income | 5,806 | 4,203 | 1,603 | -38.1 | % | ||||||
Non-interest expense | |||||||||||
Salaries and employee benefits | 17,266 | 16,911 | 355 | 2.1 | % | ||||||
Net occupancy expense of premises | 2,738 | 2,863 | (125 | ) | -4.4 | % | |||||
Equipment and systems | 3,785 | 3,823 | (38 | ) | -1.0 | % | |||||
Advertising and marketing | 480 | 387 | 93 | 24.0 | % | ||||||
Federal deposit insurance premium | 1,532 | 1,429 | 103 | 7.2 | % | ||||||
Directors' compensation | 360 | 360 | — | — | % | ||||||
Goodwill impairment | 97,370 | — | 97,370 | — | % | ||||||
Other expense | 3,020 | 3,286 | (266 | ) | -8.1 | % | |||||
Total non-interest expense | 126,551 | 29,059 | 97,492 | 335.5 | % | ||||||
(Loss) income before income taxes | (90,996 | ) | 9,114 | (100,110 | ) | 1098.4 | % | ||||
Income taxes | (917 | ) | 1,717 | (2,634 | ) | -153.4 | % | ||||
Net (loss) income | $ | (90,079 | ) | $ | 7,397 | $ | (97,476 | ) | 1317.8 | % | |
Net (loss) income per common share (EPS) | |||||||||||
Basic | $ | (1.45 | ) | $ | 0.12 | $ | (1.57 | ) | |||
Diluted | $ | (1.45 | ) | $ | 0.12 | $ | (1.57 | ) | |||
Dividends declared | |||||||||||
Cash dividends declared per common share | $ | 0.11 | $ | 0.11 | $ | — | |||||
Cash dividends declared | $ | 6,903 | $ | 6,844 | $ | 59 | |||||
Dividend payout ratio | -7.7 | % | 92.5 | % | -100.2 | % | |||||
Weighted average number of common shares outstanding | |||||||||||
Basic | 62,254 | 62,205 | 49 | ||||||||
Diluted | 62,254 | 62,211 | 43 | ||||||||
Kearny Financial Corp.
Average Balance Sheet Data
(Unaudited)
(Dollars in Thousands) | Three Months Ended | Variance or Change | Variance or Change Pct. | ||||||||
June 30, 2024 | March 31, 2024 | ||||||||||
Assets | |||||||||||
Interest-earning assets: | |||||||||||
Loans receivable, including loans held for sale | $ | 5,743,008 | $ | 5,752,477 | $ | (9,469 | ) | -0.2 | % | ||
Taxable investment securities | 1,343,541 | 1,382,064 | (38,523 | ) | -2.8 | % | |||||
Tax-exempt investment securities | 13,737 | 14,614 | (877 | ) | -6.0 | % | |||||
Other interest-earning assets | 128,257 | 125,155 | 3,102 | 2.5 | % | ||||||
Total interest-earning assets | 7,228,543 | 7,274,310 | (45,767 | ) | -0.6 | % | |||||
Non-interest-earning assets | 466,537 | 577,411 | (110,874 | ) | -19.2 | % | |||||
Total assets | $ | 7,695,080 | $ | 7,851,721 | $ | (156,641 | ) | -2.0 | % | ||
Liabilities and Stockholders' Equity | |||||||||||
Interest-bearing liabilities: | |||||||||||
Deposits: | |||||||||||
Interest-bearing demand | $ | 2,310,521 | $ | 2,378,831 | $ | (68,310 | ) | -2.9 | % | ||
Savings | 631,622 | 635,226 | (3,604 | ) | -0.6 | % | |||||
Certificates of deposit | 1,613,798 | 1,705,513 | (91,715 | ) | -5.4 | % | |||||
Total interest-bearing deposits | 4,555,941 | 4,719,570 | (163,629 | ) | -3.5 | % | |||||
Borrowings: | |||||||||||
Federal Home Loan Bank advances | 1,507,192 | 1,428,801 | 78,391 | 5.5 | % | ||||||
Other borrowings | 228,461 | 210,989 | 17,472 | 8.3 | % | ||||||
Total borrowings | 1,735,653 | 1,639,790 | 95,863 | 5.8 | % | ||||||
Total interest-bearing liabilities | 6,291,594 | 6,359,360 | (67,766 | ) | -1.1 | % | |||||
Non-interest-bearing liabilities: | |||||||||||
Non-interest-bearing deposits | 589,438 | 581,870 | 7,568 | 1.3 | % | ||||||
Other non-interest-bearing liabilities | 62,978 | 65,709 | (2,731 | ) | -4.2 | % | |||||
Total non-interest-bearing liabilities | 652,416 | 647,579 | 4,837 | 0.7 | % | ||||||
Total liabilities | 6,944,010 | 7,006,939 | (62,929 | ) | -0.9 | % | |||||
Stockholders' equity | 751,070 | 844,782 | (93,712 | ) | -11.1 | % | |||||
Total liabilities and stockholders' equity | $ | 7,695,080 | $ | 7,851,721 | $ | (156,641 | ) | -2.0 | % | ||
Average interest-earning assets to average interest-bearing liabilities | 114.89 | % | 114.39 | % | 0.50 | % | 0.4 | % | |||
Kearny Financial Corp.
Performance Ratio Highlights
(Unaudited)
Three Months Ended | Variance or Change | |||||
June 30, 2024 | March 31, 2024 | |||||
Average yield on interest-earning assets: | ||||||
Loans receivable, including loans held for sale | 4.58 | % | 4.45 | % | 0.13 | % |
Taxable investment securities | 4.41 | % | 4.48 | % | -0.07 | % |
Tax-exempt investment securities (1) | 2.32 | % | 2.32 | % | — | % |
Other interest-earning assets | 7.14 | % | 7.91 | % | -0.77 | % |
Total interest-earning assets | 4.59 | % | 4.51 | % | 0.08 | % |
Average cost of interest-bearing liabilities: | ||||||
Deposits: | ||||||
Interest-bearing demand | 3.06 | % | 3.08 | % | -0.02 | % |
Savings | 0.63 | % | 0.46 | % | 0.17 | % |
Certificates of deposit | 3.35 | % | 3.11 | % | 0.24 | % |
Total interest-bearing deposits | 2.83 | % | 2.74 | % | 0.09 | % |
Borrowings: | ||||||
Federal Home Loan Bank advances | 3.86 | % | 3.55 | % | 0.31 | % |
Other borrowings | 5.24 | % | 5.22 | % | 0.02 | % |
Total borrowings | 4.04 | % | 3.77 | % | 0.27 | % |
Total interest-bearing liabilities | 3.16 | % | 3.00 | % | 0.16 | % |
Interest rate spread (2) | 1.43 | % | 1.51 | % | -0.08 | % |
Net interest margin (3) | 1.84 | % | 1.89 | % | -0.05 | % |
Non-interest income to average assets (annualized) | 0.30 | % | 0.21 | % | 0.09 | % |
Non-interest expense to average assets (annualized) | 6.58 | % | 1.48 | % | 5.10 | % |
Efficiency ratio (4) | 323.81 | % | 75.43 | % | 248.38 | % |
Return on average assets (annualized) | -4.68 | % | 0.38 | % | -5.06 | % |
Return on average equity (annualized) | -47.97 | % | 3.50 | % | -51.47 | % |
Return on average tangible equity (annualized) (5) | -56.69 | % | 4.68 | % | -61.37 | % |
_________________________
(1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. |
(2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
(3) | Net interest income divided by average interest-earning assets. |
(4) | Non-interest expense divided by the sum of net interest income and non-interest income. |
(5) | Average tangible equity equals total average stockholders' equity reduced by average goodwill and average core deposit intangible assets. |
Year-to-Year Comparative Financial Analysis |
Kearny Financial Corp.
Consolidated Balance Sheets
(Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | June 30, 2023 | Variance or Change | Variance or Change Pct. | |||||||
(Unaudited) | (Audited) | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 63,864 | $ | 70,515 | $ | (6,651 | ) | -9.4 | % | ||
Securities available for sale | 1,072,833 | 1,227,729 | (154,896 | ) | -12.6 | % | |||||
Securities held to maturity | 135,742 | 146,465 | (10,723 | ) | -7.3 | % | |||||
Loans held-for-sale | 6,036 | 9,591 | (3,555 | ) | -37.1 | % | |||||
Loans receivable | 5,732,787 | 5,829,421 | (96,634 | ) | -1.7 | % | |||||
Less: allowance for credit losses on loans | (44,939 | ) | (48,734 | ) | (3,795 | ) | -7.8 | % | |||
Net loans receivable | 5,687,848 | 5,780,687 | (92,839 | ) | -1.6 | % | |||||
Premises and equipment | 44,940 | 48,309 | (3,369 | ) | -7.0 | % | |||||
Federal Home Loan Bank of New York stock | 80,300 | 71,734 | 8,566 | 11.9 | % | ||||||
Accrued interest receivable | 29,521 | 28,133 | 1,388 | 4.9 | % | ||||||
Goodwill | 113,525 | 210,895 | (97,370 | ) | -46.2 | % | |||||
Core deposit intangible | 1,931 | 2,457 | (526 | ) | -21.4 | % | |||||
Bank owned life insurance | 297,874 | 292,825 | 5,049 | 1.7 | % | ||||||
Deferred income tax assets, net | 50,339 | 51,973 | (1,634 | ) | -3.1 | % | |||||
Other real estate owned | — | 12,956 | (12,956 | ) | -100.0 | % | |||||
Other assets | 98,708 | 110,546 | (11,838 | ) | -10.7 | % | |||||
Total assets | $ | 7,683,461 | $ | 8,064,815 | $ | (381,354 | ) | -4.7 | % | ||
Liabilities | |||||||||||
Deposits: | |||||||||||
Non-interest-bearing | $ | 598,366 | $ | 609,999 | $ | (11,633 | ) | -1.9 | % | ||
Interest-bearing | 4,559,757 | 5,019,184 | (459,427 | ) | -9.2 | % | |||||
Total deposits | 5,158,123 | 5,629,183 | (471,060 | ) | -8.4 | % | |||||
Borrowings | 1,709,789 | 1,506,812 | 202,977 | 13.5 | % | ||||||
Advance payments by borrowers for taxes | 17,409 | 18,338 | (929 | ) | (5.1)% | ||||||
Other liabilities | 44,569 | 41,198 | 3,371 | 8.2 | % | ||||||
Total liabilities | 6,929,890 | 7,195,531 | (265,641 | ) | (3.7)% | ||||||
Stockholders' Equity | |||||||||||
Common stock | 644 | 659 | (15 | ) | -2.3 | % | |||||
Paid-in capital | 493,680 | 503,332 | (9,652 | ) | -1.9 | % | |||||
Retained earnings | 343,326 | 457,611 | (114,285 | ) | -25.0 | % | |||||
Unearned ESOP shares | (20,916 | ) | (22,862 | ) | 1,946 | -8.5 | % | ||||
Accumulated other comprehensive loss | (63,163 | ) | (69,456 | ) | 6,293 | -9.1 | % | ||||
Total stockholders' equity | 753,571 | 869,284 | (115,713 | ) | -13.3 | % | |||||
Total liabilities and stockholders' equity | $ | 7,683,461 | $ | 8,064,815 | $ | (381,354 | ) | -4.7 | % | ||
Consolidated capital ratios | |||||||||||
Equity to assets | 9.81 | % | 10.78 | % | -0.97 | % | |||||
Tangible equity to tangible assets(1) | 8.43 | % | 8.35 | % | 0.08 | % | |||||
Share data | |||||||||||
Outstanding shares | 64,434 | 65,864 | (1,430 | ) | -2.2 | % | |||||
Book value per share | $ | 11.70 | $ | 13.20 | $ | (1.50 | ) | -11.4 | % | ||
Tangible book value per share(2) | $ | 9.90 | $ | 9.96 | $ | (0.06 | ) | -0.6 | % |
_________________________
(1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. |
(2) | Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. |
Kearny Financial Corp.
Consolidated Statements of Income
Year Ended | |||||||||||
(Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | June 30, 2023 | Variance or Change | Variance or Change Pct. | |||||||
(Unaudited) | (Audited) | ||||||||||
Interest income | |||||||||||
Loans | $ | 256,007 | $ | 233,147 | $ | 22,860 | 9.8 | % | |||
Taxable investment securities | 63,313 | 54,855 | 8,458 | 15.4 | % | ||||||
Tax-exempt investment securities | 336 | 694 | (358 | ) | -51.6 | % | |||||
Other interest-earning assets | 9,212 | 5,028 | 4,184 | 83.2 | % | ||||||
Total interest income | 328,868 | 293,724 | 35,144 | 12.0 | % | ||||||
Interest expense | |||||||||||
Deposits | 122,414 | 78,163 | 44,251 | 56.6 | % | ||||||
Borrowings | 63,860 | 39,696 | 24,164 | 60.9 | % | ||||||
Total interest expense | 186,274 | 117,859 | 68,415 | 58.0 | % | ||||||
Net interest income | 142,594 | 175,865 | (33,271 | ) | -18.9 | % | |||||
Provision for credit losses | 6,226 | 2,486 | 3,740 | 150.4 | % | ||||||
Net interest income after provision for credit losses | 136,368 | 173,379 | (37,011 | ) | -21.3 | % | |||||
Non-interest income | |||||||||||
Fees and service charges | 2,609 | 3,106 | (497 | ) | -16.0 | % | |||||
Loss on sale and call of securities | (18,135 | ) | (15,227 | ) | (2,908 | ) | 19.1 | % | |||
Loss on sale of loans | (282 | ) | (1,645 | ) | 1,363 | -82.9 | % | ||||
Loss on sale of real estate owned | (974 | ) | (139 | ) | (835 | ) | 600.7 | % | |||
Income from bank owned life insurance | 9,076 | 8,645 | 431 | 5.0 | % | ||||||
Electronic banking fees and charges | 2,357 | 1,759 | 598 | 34.0 | % | ||||||
Other income | 3,356 | 6,252 | (2,896 | ) | -46.3 | % | |||||
Total non-interest income | (1,993 | ) | 2,751 | (4,744 | ) | -172.4 | % | ||||
Non-interest expense | |||||||||||
Salaries and employee benefits | 69,220 | 75,589 | (6,369 | ) | -8.4 | % | |||||
Net occupancy expense of premises | 11,033 | 12,036 | (1,003 | ) | -8.3 | % | |||||
Equipment and systems | 15,223 | 14,577 | 646 | 4.4 | % | ||||||
Advertising and marketing | 1,396 | 2,122 | (726 | ) | -34.2 | % | |||||
Federal deposit insurance premium | 5,980 | 5,133 | 847 | 16.5 | % | ||||||
Directors' compensation | 1,506 | 1,364 | 142 | 10.4 | % | ||||||
Goodwill impairment | 97,370 | — | 97,370 | — | % | ||||||
Other expense | 13,423 | 12,930 | 493 | 3.8 | % | ||||||
Total non-interest expense | 215,151 | 123,751 | 91,400 | 73.9 | % | ||||||
(Loss) income before income taxes | (80,776 | ) | 52,379 | (133,155 | ) | -254.2 | % | ||||
Income taxes | 5,891 | 11,568 | (5,677 | ) | -49.1 | % | |||||
Net (loss) income | $ | (86,667 | ) | $ | 40,811 | $ | (127,478 | ) | -312.4 | % | |
Net (loss) income per common share (EPS) | |||||||||||
Basic | $ | (1.39 | ) | $ | 0.63 | $ | (2.02 | ) | |||
Diluted | $ | (1.39 | ) | $ | 0.63 | $ | (2.02 | ) | |||
Dividends declared | |||||||||||
Cash dividends declared per common share | $ | 0.44 | $ | 0.44 | $ | — | |||||
Cash dividends declared | $ | 27,618 | $ | 28,651 | $ | (1,033 | ) | ||||
Dividend payout ratio | (31.9)% | 70.2 | % | (102.1)% | |||||||
Weighted average number of common shares outstanding | |||||||||||
Basic | 62,444 | 64,804 | (2,360 | ) | |||||||
Diluted | 62,444 | 64,804 | (2,360 | ) | |||||||
Kearny Financial Corp.
Average Balance Sheet Data
(Unaudited)
Year Ended | |||||||||||
(Dollars in Thousands) | June 30, 2024 | June 30, 2023 | Variance or Change | Variance or Change Pct. | |||||||
Assets | |||||||||||
Interest-earning assets: | |||||||||||
Loans receivable, including loans held for sale | $ | 5,752,496 | $ | 5,827,123 | $ | (74,627 | ) | -1.3 | % | ||
Taxable investment securities | 1,438,200 | 1,532,961 | (94,761 | ) | -6.2 | % | |||||
Tax-exempt investment securities | 14,718 | 30,332 | (15,614 | ) | -51.5 | % | |||||
Other interest-earning assets | 131,019 | 115,390 | 15,629 | 13.5 | % | ||||||
Total interest-earning assets | 7,336,433 | 7,505,806 | (169,373 | ) | -2.3 | % | |||||
Non-interest-earning assets | 541,859 | 563,131 | (21,272 | ) | -3.8 | % | |||||
Total assets | $ | 7,878,292 | $ | 8,068,937 | $ | (190,645 | ) | -2.4 | % | ||
Liabilities and Stockholders' Equity | |||||||||||
Interest-bearing liabilities: | |||||||||||
Deposits: | |||||||||||
Interest-bearing demand | $ | 2,308,893 | $ | 2,349,802 | $ | (40,909 | ) | -1.7 | % | ||
Savings | 662,981 | 896,651 | (233,670 | ) | -26.1 | % | |||||
Certificates of deposit | 1,778,682 | 2,083,864 | (305,182 | ) | -14.6 | % | |||||
Total interest-bearing deposits | 4,750,556 | 5,330,317 | (579,761 | ) | -10.9 | % | |||||
Borrowings: | |||||||||||
Federal Home Loan Bank Advances | 1,458,941 | 1,101,658 | 357,283 | 32.4 | % | ||||||
Other borrowings | 184,768 | 57,468 | 127,300 | 221.5 | % | ||||||
Total borrowings | 1,643,709 | 1,159,126 | 484,583 | 41.8 | % | ||||||
Total interest-bearing liabilities | 6,394,265 | 6,489,443 | (95,178 | ) | -1.5 | % | |||||
Non-interest-bearing liabilities: | |||||||||||
Non-interest-bearing deposits | 595,266 | 644,543 | (49,277 | ) | -7.6 | % | |||||
Other non-interest-bearing liabilities | 64,444 | 59,593 | 4,851 | 8.1 | % | ||||||
Total non-interest-bearing liabilities | 659,710 | 704,136 | (44,426 | ) | -6.3 | % | |||||
Total liabilities | 7,053,975 | 7,193,579 | (139,604 | ) | -1.9 | % | |||||
Stockholders' equity | 824,317 | 875,358 | (51,041 | ) | -5.8 | % | |||||
Total liabilities and stockholders' equity | $ | 7,878,292 | $ | 8,068,937 | $ | (190,645 | ) | -2.4 | % | ||
Average interest-earning assets to average interest-bearing liabilities | 114.73 | % | 115.66 | % | (0.93)% | -0.8 | % | ||||
Kearny Financial Corp.
Performance Ratio Highlights
(Unaudited)
Year Ended | ||||||
June 30, 2024 | June 30, 2023 | Variance or Change | ||||
Average yield on interest-earning assets: | ||||||
Loans receivable, including loans held for sale | 4.45 | % | 4.00 | % | 0.45 | % |
Taxable investment securities | 4.40 | % | 3.58 | % | 0.82 | % |
Tax-exempt investment securities (1) | 2.28 | % | 2.29 | % | -0.01 | % |
Other interest-earning assets | 7.03 | % | 4.36 | % | 2.67 | % |
Total interest-earning assets | 4.48 | % | 3.91 | % | 0.57 | % |
Average cost of interest-bearing liabilities: | ||||||
Deposits: | ||||||
Interest-bearing demand | 2.91 | % | 1.73 | % | 1.18 | % |
Savings | 0.50 | % | 0.37 | % | 0.13 | % |
Certificates of deposit | 2.92 | % | 1.64 | % | 1.28 | % |
Total interest-bearing deposits | 2.58 | % | 1.47 | % | 1.11 | % |
Borrowings: | ||||||
Federal Home Loan Bank Advances | 3.70 | % | 3.43 | % | 0.27 | % |
Other borrowings | 5.36 | % | 3.41 | % | 1.95 | % |
Total borrowings | 3.89 | % | 3.42 | % | 0.47 | % |
Total interest-bearing liabilities | 2.91 | % | 1.82 | % | 1.09 | % |
Interest rate spread (2) | 1.57 | % | 2.09 | % | -0.52 | % |
Net interest margin (3) | 1.94 | % | 2.34 | % | -0.40 | % |
Non-interest income to average assets | (0.03)% | 0.03 | % | -0.06 | % | |
Non-interest expense to average assets | 2.73 | % | 1.53 | % | 1.20 | % |
Efficiency ratio (4) | 153.02 | % | 69.28 | % | 83.74 | % |
Return on average assets | (1.10)% | 0.51 | % | -1.61 | % | |
Return on average equity | (10.51)% | 4.66 | % | -15.17 | % | |
Return on average tangible equity (5) | (13.64)% | 6.17 | % | -19.81 | % | |
_________________________
(1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. |
(2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
(3) | Net interest income divided by average interest-earning assets. |
(4) | Non-interest expense divided by the sum of net interest income and non-interest income. |
(5) | Average tangible equity equals total average stockholders' equity reduced by average goodwill and average core deposit intangible assets. |
Five-Quarter Financial Trend Analysis |
Kearny Financial Corp.
Consolidated Balance Sheets
(Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||
Assets | |||||||||||||||
Cash and cash equivalents | $ | 63,864 | $ | 71,027 | $ | 73,860 | $ | 57,219 | $ | 70,515 | |||||
Securities available for sale | 1,072,833 | 1,098,655 | 1,144,175 | 1,215,633 | 1,227,729 | ||||||||||
Securities held to maturity | 135,742 | 139,643 | 141,959 | 143,730 | 146,465 | ||||||||||
Loans held-for-sale | 6,036 | 4,117 | 14,030 | 3,934 | 9,591 | ||||||||||
Loans receivable | 5,732,787 | 5,758,336 | 5,745,629 | 5,736,049 | 5,829,421 | ||||||||||
Less: allowance for credit losses on loans | (44,939 | ) | (44,930 | ) | (44,867 | ) | (46,872 | ) | (48,734 | ) | |||||
Net loans receivable | 5,687,848 | 5,713,406 | 5,700,762 | 5,689,177 | 5,780,687 | ||||||||||
Premises and equipment | 44,940 | 45,053 | 45,928 | 46,868 | 48,309 | ||||||||||
Federal Home Loan Bank stock | 80,300 | 81,347 | 83,372 | 81,509 | 71,734 | ||||||||||
Accrued interest receivable | 29,521 | 31,065 | 30,258 | 29,766 | 28,133 | ||||||||||
Goodwill | 113,525 | 210,895 | 210,895 | 210,895 | 210,895 | ||||||||||
Core deposit intangible | 1,931 | 2,057 | 2,189 | 2,323 | 2,457 | ||||||||||
Bank owned life insurance | 297,874 | 296,493 | 256,064 | 294,491 | 292,825 | ||||||||||
Deferred income taxes, net | 50,339 | 47,225 | 46,116 | 56,500 | 51,973 | ||||||||||
Other real estate owned | — | — | 11,982 | 12,956 | 12,956 | ||||||||||
Other assets | 98,708 | 100,989 | 136,242 | 129,865 | 110,546 | ||||||||||
Total assets | $ | 7,683,461 | $ | 7,841,972 | $ | 7,897,832 | $ | 7,974,866 | $ | 8,064,815 | |||||
Liabilities | |||||||||||||||
Deposits: | |||||||||||||||
Non-interest-bearing | $ | 598,366 | $ | 586,089 | $ | 584,130 | $ | 595,141 | $ | 609,999 | |||||
Interest-bearing | 4,559,757 | 4,622,961 | 4,735,500 | 4,839,027 | 5,019,184 | ||||||||||
Total deposits | 5,158,123 | 5,209,050 | 5,319,630 | 5,434,168 | 5,629,183 | ||||||||||
Borrowings | 1,709,789 | 1,722,178 | 1,667,055 | 1,626,933 | 1,506,812 | ||||||||||
Advance payments by borrowers for taxes | 17,409 | 17,387 | 16,742 | 16,907 | 18,338 | ||||||||||
Other liabilities | 44,569 | 44,279 | 46,427 | 47,324 | 41,198 | ||||||||||
Total liabilities | 6,929,890 | 6,992,894 | 7,049,854 | 7,125,332 | 7,195,531 | ||||||||||
Stockholders' Equity | |||||||||||||||
Common stock | 644 | 644 | 645 | 652 | 659 | ||||||||||
Paid-in capital | 493,680 | 493,187 | 493,297 | 497,269 | 503,332 | ||||||||||
Retained earnings | 343,326 | 440,308 | 439,755 | 460,464 | 457,611 | ||||||||||
Unearned ESOP shares | (20,916 | ) | (21,402 | ) | (21,889 | ) | (22,375 | ) | (22,862 | ) | |||||
Accumulated other comprehensive loss | (63,163 | ) | (63,659 | ) | (63,830 | ) | (86,476 | ) | (69,456 | ) | |||||
Total stockholders' equity | 753,571 | 849,078 | 847,978 | 849,534 | 869,284 | ||||||||||
Total liabilities and stockholders' equity | $ | 7,683,461 | $ | 7,841,972 | $ | 7,897,832 | $ | 7,974,866 | $ | 8,064,815 | |||||
Consolidated capital ratios | |||||||||||||||
Equity to assets | 9.81 | % | 10.83 | % | 10.74 | % | 10.65 | % | 10.78 | % | |||||
Tangible equity to tangible assets(1) | 8.43 | % | 8.34 | % | 8.26 | % | 8.20 | % | 8.35 | % | |||||
Share data | |||||||||||||||
Outstanding shares | 64,434 | 64,437 | 64,445 | 65,132 | 65,864 | ||||||||||
Book value per share | $ | 11.70 | $ | 13.18 | $ | 13.16 | $ | 13.04 | $ | 13.20 | |||||
Tangible book value per share(2) | $ | 9.90 | $ | 9.87 | $ | 9.85 | $ | 9.77 | $ | 9.96 | |||||
_________________________
(1) | Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. |
(2) | Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. |
Kearny Financial Corp.
Supplemental Balance Sheet Highlights
(Unaudited)
(Dollars in Thousands) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
Loan portfolio composition: | |||||||||||||||
Commercial loans: | |||||||||||||||
Multi-family mortgage | $ | 2,645,851 | $ | 2,645,195 | $ | 2,651,274 | $ | 2,699,151 | $ | 2,761,775 | |||||
Nonresidential mortgage | 948,075 | 965,539 | 947,287 | 946,801 | 968,574 | ||||||||||
Commercial business | 142,747 | 147,326 | 144,134 | 149,229 | 146,861 | ||||||||||
Construction | 209,237 | 229,457 | 221,933 | 230,703 | 226,609 | ||||||||||
Total commercial loans | 3,945,910 | 3,987,517 | 3,964,628 | 4,025,884 | 4,103,819 | ||||||||||
One- to four-family residential mortgage | 1,756,051 | 1,741,644 | 1,746,065 | 1,689,051 | 1,700,559 | ||||||||||
Consumer loans: | |||||||||||||||
Home equity loans | 44,104 | 42,731 | 43,517 | 42,896 | 43,549 | ||||||||||
Other consumer | 2,685 | 3,198 | 2,728 | 2,644 | 2,549 | ||||||||||
Total consumer loans | 46,789 | 45,929 | 46,245 | 45,540 | 46,098 | ||||||||||
Total loans, excluding yield adjustments | 5,748,750 | 5,775,090 | 5,756,938 | 5,760,475 | 5,850,476 | ||||||||||
Unaccreted yield adjustments | (15,963 | ) | (16,754 | ) | (11,309 | ) | (24,426 | ) | (21,055 | ) | |||||
Loans receivable, net of yield adjustments | 5,732,787 | 5,758,336 | 5,745,629 | 5,736,049 | 5,829,421 | ||||||||||
Less: allowance for credit losses on loans | (44,939 | ) | (44,930 | ) | (44,867 | ) | (46,872 | ) | (48,734 | ) | |||||
Net loans receivable | $ | 5,687,848 | $ | 5,713,406 | $ | 5,700,762 | $ | 5,689,177 | $ | 5,780,687 | |||||
Asset quality: | |||||||||||||||
Nonperforming assets: | |||||||||||||||
Accruing loans - 90 days and over past due | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
Nonaccrual loans | 39,882 | 39,546 | 28,089 | 37,912 | 42,627 | ||||||||||
Total nonperforming loans | 39,882 | 39,546 | 28,089 | 37,912 | 42,627 | ||||||||||
Nonaccrual loans held-for-sale | — | — | 9,700 | — | — | ||||||||||
Other real estate owned | — | — | 11,982 | 12,956 | 12,956 | ||||||||||
Total nonperforming assets | $ | 39,882 | $ | 39,546 | $ | 49,771 | $ | 50,868 | $ | 55,583 | |||||
Nonperforming loans (% total loans) | 0.70 | % | 0.69 | % | 0.49 | % | 0.66 | % | 0.73 | % | |||||
Nonperforming assets (% total assets) | 0.52 | % | 0.50 | % | 0.63 | % | 0.64 | % | 0.69 | % | |||||
Classified loans | $ | 118,700 | $ | 115,772 | $ | 94,676 | $ | 98,616 | $ | 93,526 | |||||
Allowance for credit losses on loans (ACL): | |||||||||||||||
ACL to total loans | 0.78 | % | 0.78 | % | 0.78 | % | 0.81 | % | 0.83 | % | |||||
ACL to nonperforming loans | 112.68 | % | 113.61 | % | 159.73 | % | 123.63 | % | 114.33 | % | |||||
Net charge-offs | $ | 3,518 | $ | 286 | $ | 4,110 | $ | 2,107 | $ | 82 | |||||
Average net charge-off rate (annualized) | 0.25 | % | 0.02 | % | 0.29 | % | 0.15 | % | 0.01 | % | |||||
Kearny Financial Corp.
Supplemental Balance Sheet Highlights
(Unaudited)
(Dollars in Thousands) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
Funding composition: | |||||||||||||||
Deposits: | |||||||||||||||
Non-interest-bearing deposits | $ | 598,367 | $ | 586,089 | $ | 584,130 | $ | 595,141 | $ | 609,999 | |||||
Interest-bearing demand | 2,308,915 | 2,349,032 | 2,347,262 | 2,236,573 | 2,252,912 | ||||||||||
Savings | 643,481 | 630,456 | 646,182 | 689,163 | 748,721 | ||||||||||
Certificates of deposit (retail) | 1,199,127 | 1,235,261 | 1,283,676 | 1,300,382 | 1,377,028 | ||||||||||
Certificates of deposit (brokered and listing service) | 408,234 | 408,212 | 458,380 | 612,909 | 640,523 | ||||||||||
Interest-bearing deposits | 4,559,757 | 4,622,961 | 4,735,500 | 4,839,027 | 5,019,184 | ||||||||||
Total deposits | 5,158,124 | 5,209,050 | 5,319,630 | 5,434,168 | 5,629,183 | ||||||||||
Borrowings: | |||||||||||||||
Federal Home Loan Bank advances | 1,534,789 | 1,457,178 | 1,432,055 | 1,456,933 | 1,281,812 | ||||||||||
Overnight borrowings | 175,000 | 265,000 | 235,000 | 170,000 | 225,000 | ||||||||||
Total borrowings | 1,709,789 | 1,722,178 | 1,667,055 | 1,626,933 | 1,506,812 | ||||||||||
Total funding | $ | 6,867,913 | $ | 6,931,228 | $ | 6,986,685 | $ | 7,061,101 | $ | 7,135,995 | |||||
Loans as a % of deposits | 110.4 | % | 109.8 | % | 107.4 | % | 104.8 | % | 102.9 | % | |||||
Deposits as a % of total funding | 75.1 | % | 75.2 | % | 76.1 | % | 77.0 | % | 78.9 | % | |||||
Borrowings as a % of total funding | 24.9 | % | 24.8 | % | 23.9 | % | 23.0 | % | 21.1 | % | |||||
Uninsured deposits: | |||||||||||||||
Uninsured deposits (reported)(1) | $ | 1,772,623 | $ | 1,760,740 | $ | 1,813,122 | $ | 1,734,288 | $ | 1,771,416 | |||||
Uninsured deposits (adjusted)(2) | $ | 764,447 | $ | 718,026 | $ | 694,510 | $ | 683,265 | $ | 710,377 | |||||
_________________________
(1) | Uninsured deposits of Kearny Bank. |
(2) | Uninsured deposits of Kearny Bank adjusted to exclude deposits of its wholly-owned subsidiary and holding company and collateralized deposits of state and local governments. |
Kearny Financial Corp.
Consolidated Statements of Income (Loss)
(Unaudited)
Three Months Ended | |||||||||||||||
(Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
Interest income | |||||||||||||||
Loans | $ | 65,819 | $ | 64,035 | $ | 63,384 | $ | 62,769 | $ | 62,044 | |||||
Taxable investment securities | 14,802 | 15,490 | 16,756 | 16,265 | 15,736 | ||||||||||
Tax-exempt investment securities | 80 | 85 | 84 | 87 | 91 | ||||||||||
Other interest-earning assets | 2,289 | 2,475 | 2,401 | 2,047 | 1,821 | ||||||||||
Total interest income | 82,990 | 82,085 | 82,625 | 81,168 | 79,692 | ||||||||||
Interest expense | |||||||||||||||
Deposits | 32,187 | 32,320 | 30,340 | 27,567 | 26,226 | ||||||||||
Borrowings | 17,527 | 15,446 | 16,446 | 14,441 | 13,286 | ||||||||||
Total interest expense | 49,714 | 47,766 | 46,786 | 42,008 | 39,512 | ||||||||||
Net interest income | 33,276 | 34,319 | 35,839 | 39,160 | 40,180 | ||||||||||
Provision for (reversal of) credit losses | 3,527 | 349 | 2,105 | 245 | (306 | ) | |||||||||
Net interest income after provision for (reversal of) credit losses | 29,749 | 33,970 | 33,734 | 38,915 | 40,486 | ||||||||||
Non-interest income | |||||||||||||||
Fees and service charges | 580 | 657 | 624 | 748 | 699 | ||||||||||
Loss on sale and call of securities | — | — | (18,135 | ) | — | — | |||||||||
Gain (loss) on sale of loans | 111 | (712 | ) | 104 | 215 | 199 | |||||||||
Loss on sale of other real estate owned | — | — | (974 | ) | — | (139 | ) | ||||||||
Income from bank owned life insurance | 3,209 | 3,039 | 1,162 | 1,666 | 1,605 | ||||||||||
Electronic banking fees and charges | 1,130 | 464 | 396 | 367 | 399 | ||||||||||
Other income | 776 | 755 | 811 | 1,014 | 903 | ||||||||||
Total non-interest income | 5,806 | 4,203 | (16,012 | ) | 4,010 | 3,666 | |||||||||
Non-interest expense | |||||||||||||||
Salaries and employee benefits | 17,266 | 16,911 | 17,282 | 17,761 | 17,315 | ||||||||||
Net occupancy expense of premises | 2,738 | 2,863 | 2,674 | 2,758 | 2,862 | ||||||||||
Equipment and systems | 3,785 | 3,823 | 3,814 | 3,801 | 3,511 | ||||||||||
Advertising and marketing | 480 | 387 | 301 | 228 | 231 | ||||||||||
Federal deposit insurance premium | 1,532 | 1,429 | 1,495 | 1,524 | 1,455 | ||||||||||
Directors' compensation | 360 | 360 | 393 | 393 | 345 | ||||||||||
Goodwill impairment | 97,370 | — | — | — | — | ||||||||||
Other expense | 3,020 | 3,286 | 3,808 | 3,309 | 3,042 | ||||||||||
Total non-interest expense | 126,551 | 29,059 | 29,767 | 29,774 | 28,761 | ||||||||||
(Loss) income before income taxes | (90,996 | ) | 9,114 | (12,045 | ) | 13,151 | 15,391 | ||||||||
Income taxes | (917 | ) | 1,717 | 1,782 | 3,309 | 3,378 | |||||||||
Net (loss) income | $ | (90,079 | ) | $ | 7,397 | $ | (13,827 | ) | $ | 9,842 | $ | 12,013 | |||
Net (loss) income per common share (EPS) | |||||||||||||||
Basic | $ | (1.45 | ) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | |||
Diluted | $ | (1.45 | ) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | |||
Dividends declared | |||||||||||||||
Cash dividends declared per common share | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.11 | |||||
Cash dividends declared | $ | 6,903 | $ | 6,844 | $ | 6,882 | $ | 6,989 | $ | 7,007 | |||||
Dividend payout ratio | -7.7 | % | 92.5 | % | -49.8 | % | 71.0 | % | 58.3 | % | |||||
Weighted average number of common shares outstanding | |||||||||||||||
Basic | 62,254 | 62,205 | 62,299 | 63,014 | 63,667 | ||||||||||
Diluted | 62,254 | 62,211 | 62,299 | 63,061 | 63,667 | ||||||||||
Kearny Financial Corp.
Average Balance Sheet Data
(Unaudited)
Three Months Ended | |||||||||||||||
(Dollars in Thousands) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
Assets | |||||||||||||||
Interest-earning assets: | |||||||||||||||
Loans receivable, including loans held-for-sale | $ | 5,743,008 | $ | 5,752,477 | $ | 5,726,321 | $ | 5,788,074 | $ | 5,932,541 | |||||
Taxable investment securities | 1,343,541 | 1,382,064 | 1,509,165 | 1,516,393 | 1,529,582 | ||||||||||
Tax-exempt investment securities | 13,737 | 14,614 | 15,025 | 15,483 | 16,346 | ||||||||||
Other interest-earning assets | 128,257 | 125,155 | 139,740 | 130,829 | 128,158 | ||||||||||
Total interest-earning assets | 7,228,543 | 7,274,310 | 7,390,251 | 7,450,779 | 7,606,627 | ||||||||||
Non-interest-earning assets | 466,537 | 577,411 | 554,335 | 568,723 | 556,962 | ||||||||||
Total assets | $ | 7,695,080 | $ | 7,851,721 | $ | 7,944,586 | $ | 8,019,502 | $ | 8,163,589 | |||||
Liabilities and Stockholders' Equity | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||
Deposits: | |||||||||||||||
Interest-bearing demand | $ | 2,310,521 | $ | 2,378,831 | $ | 2,301,169 | $ | 2,245,831 | $ | 2,321,120 | |||||
Savings | 631,622 | 635,226 | 664,926 | 719,508 | 774,854 | ||||||||||
Certificates of deposit | 1,613,798 | 1,705,513 | 1,824,316 | 1,968,512 | 2,057,818 | ||||||||||
Total interest-bearing deposits | 4,555,941 | 4,719,570 | 4,790,411 | 4,933,851 | 5,153,792 | ||||||||||
Borrowings: | |||||||||||||||
Federal Home Loan Bank advances | 1,507,192 | 1,428,801 | 1,513,497 | 1,386,473 | 1,374,316 | ||||||||||
Other borrowings | 228,461 | 210,989 | 142,283 | 158,098 | 100,055 | ||||||||||
Total borrowings | 1,735,653 | 1,639,790 | 1,655,780 | 1,544,571 | 1,474,371 | ||||||||||
Total interest-bearing liabilities | 6,291,594 | 6,359,360 | 6,446,191 | 6,478,422 | 6,628,163 | ||||||||||
Non-interest-bearing liabilities: | |||||||||||||||
Non-interest-bearing deposits | 589,438 | 581,870 | 597,294 | 612,251 | 608,765 | ||||||||||
Other non-interest-bearing liabilities | 62,978 | 65,709 | 62,387 | 66,701 | 64,970 | ||||||||||
Total non-interest-bearing liabilities | 652,416 | 647,579 | 659,681 | 678,952 | 673,735 | ||||||||||
Total liabilities | 6,944,010 | 7,006,939 | 7,105,872 | 7,157,374 | 7,301,898 | ||||||||||
Stockholders' equity | 751,070 | 844,782 | 838,714 | 862,128 | 861,691 | ||||||||||
Total liabilities and stockholders' equity | $ | 7,695,080 | $ | 7,851,721 | $ | 7,944,586 | $ | 8,019,502 | $ | 8,163,589 | |||||
Average interest-earning assets to average interest-bearing liabilities | 114.89 | % | 114.39 | % | 114.65 | % | 115.01 | % | 114.76 | % | |||||
Kearny Financial Corp.
Performance Ratio Highlights
Three Months Ended | ||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||
Average yield on interest-earning assets: | ||||||||||
Loans receivable, including loans held-for-sale | 4.58 | % | 4.45 | % | 4.43 | % | 4.34 | % | 4.18 | % |
Taxable investment securities | 4.41 | % | 4.48 | % | 4.44 | % | 4.29 | % | 4.12 | % |
Tax-exempt investment securities (1) | 2.32 | % | 2.32 | % | 2.25 | % | 2.25 | % | 2.23 | % |
Other interest-earning assets | 7.14 | % | 7.91 | % | 6.87 | % | 6.26 | % | 5.68 | % |
Total interest-earning assets | 4.59 | % | 4.51 | % | 4.47 | % | 4.36 | % | 4.19 | % |
Average cost of interest-bearing liabilities: | ||||||||||
Deposits: | ||||||||||
Interest-bearing demand | 3.06 | % | 3.08 | % | 2.91 | % | 2.58 | % | 2.38 | % |
Savings | 0.63 | % | 0.46 | % | 0.44 | % | 0.47 | % | 0.48 | % |
Certificates of deposit | 3.35 | % | 3.11 | % | 2.82 | % | 2.49 | % | 2.24 | % |
Total interest-bearing deposits | 2.83 | % | 2.74 | % | 2.53 | % | 2.23 | % | 2.04 | % |
Borrowings: | ||||||||||
Federal Home Loan Bank advances | 3.86 | % | 3.55 | % | 3.82 | % | 3.54 | % | 3.51 | % |
Other borrowings | 5.24 | % | 5.22 | % | 5.65 | % | 5.46 | % | 4.89 | % |
Total borrowings | 4.04 | % | 3.77 | % | 3.97 | % | 3.74 | % | 3.60 | % |
Total interest-bearing liabilities | 3.16 | % | 3.00 | % | 2.90 | % | 2.59 | % | 2.38 | % |
Interest rate spread (2) | 1.43 | % | 1.51 | % | 1.57 | % | 1.77 | % | 1.81 | % |
Net interest margin (3) | 1.84 | % | 1.89 | % | 1.94 | % | 2.10 | % | 2.11 | % |
Non-interest income to average assets (annualized) | 0.30 | % | 0.21 | % | -0.81 | % | 0.20 | % | 0.18 | % |
Non-interest expense to average assets (annualized) | 6.58 | % | 1.48 | % | 1.50 | % | 1.49 | % | 1.41 | % |
Efficiency ratio (4) | 323.81 | % | 75.43 | % | 150.13 | % | 68.97 | % | 65.60 | % |
Return on average assets (annualized) | -4.68 | % | 0.38 | % | -0.70 | % | 0.49 | % | 0.59 | % |
Return on average equity (annualized) | -47.97 | % | 3.50 | % | -6.59 | % | 4.57 | % | 5.58 | % |
Return on average tangible equity (annualized) (5) | -56.69 | % | 4.68 | % | -8.84 | % | 6.07 | % | 7.41 | % |
_________________________
(1) | The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. |
(2) | Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. |
(3) | Net interest income divided by average interest-earning assets. |
(4) | Non-interest expense divided by the sum of net interest income and non-interest income. |
(5) | Average tangible equity equals total average stockholders' equity reduced by average goodwill and average core deposit intangible assets. |
The following tables provide a reconciliation of certain financial measures calculated in accordance with Generally Accepted Accounting Principles ("GAAP") (as reported) and non-GAAP measures. These non-GAAP measures provide additional information which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.
Kearny Financial Corp.
Reconciliation of GAAP to Non-GAAP
(Unaudited)
Three Months Ended | |||||||||||||||
(Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
Adjusted net income: | |||||||||||||||
Net (loss) income (GAAP) | $ | (90,079 | ) | $ | 7,397 | $ | (13,827 | ) | $ | 9,842 | $ | 12,013 | |||
Non-recurring transactions - net of tax: | |||||||||||||||
Net effect of sale and call of securities | — | — | 12,876 | — | — | ||||||||||
Net effect of bank-owned life insurance restructure | 392 | — | 6,286 | — | — | ||||||||||
Goodwill impairment | 95,283 | — | — | — | — | ||||||||||
Adjusted net income | $ | 5,596 | $ | 7,397 | $ | 5,335 | $ | 9,842 | $ | 12,013 | |||||
Calculation of pre-tax, pre-provision net revenue: | |||||||||||||||
Net (loss) income (GAAP) | $ | (90,079 | ) | $ | 7,397 | $ | (13,827 | ) | $ | 9,842 | $ | 12,013 | |||
Adjustments to net income (GAAP): | |||||||||||||||
Provision for income taxes | (917 | ) | 1,717 | 1,782 | 3,309 | 3,378 | |||||||||
Provision for (reversal of) credit losses | 3,527 | 349 | 2,105 | 245 | (306 | ) | |||||||||
Pre-tax, pre-provision net revenue (non-GAAP) | $ | (87,469 | ) | $ | 9,463 | $ | (9,940 | ) | $ | 13,396 | $ | 15,085 | |||
Adjusted earnings per share: | |||||||||||||||
Weighted average common shares - basic | 62,254 | 62,205 | 62,299 | 63,014 | 63,667 | ||||||||||
Weighted average common shares - diluted | 62,330 | 62,211 | 62,367 | 63,061 | 63,667 | ||||||||||
Earnings per share - basic (GAAP) | $ | (1.45 | ) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | |||
Earnings per share - diluted (GAAP) | $ | (1.45 | ) | $ | 0.12 | $ | (0.22 | ) | $ | 0.16 | $ | 0.19 | |||
Adjusted earnings per share - basic (non-GAAP) | $ | 0.09 | $ | 0.12 | $ | 0.09 | $ | 0.16 | $ | 0.19 | |||||
Adjusted earnings per share - diluted (non-GAAP) | $ | 0.09 | $ | 0.12 | $ | 0.09 | $ | 0.16 | $ | 0.19 | |||||
Pre-tax, pre-provision net revenue per share: | |||||||||||||||
Pre-tax, pre-provision net revenue per share - basic (non-GAAP) | $ | (1.41 | ) | $ | 0.15 | $ | (0.16 | ) | $ | 0.21 | $ | 0.24 | |||
Pre-tax, pre-provision net revenue per share - diluted (non-GAAP) | $ | (1.41 | ) | $ | 0.15 | $ | (0.16 | ) | $ | 0.21 | $ | 0.24 | |||
Adjusted return on average assets: | |||||||||||||||
Total average assets | $ | 7,695,080 | $ | 7,851,721 | $ | 7,944,586 | $ | 8,019,502 | $ | 8,163,589 | |||||
Return on average assets (GAAP) | -4.68 | % | 0.38 | % | -0.70 | % | 0.49 | % | 0.59 | % | |||||
Adjusted return on average assets (non-GAAP) | 0.29 | % | 0.38 | % | 0.27 | % | 0.49 | % | 0.59 | % | |||||
Adjusted return on average equity: | |||||||||||||||
Total average equity | $ | 751,070 | $ | 844,782 | $ | 838,714 | $ | 862,128 | $ | 861,691 | |||||
Return on average equity (GAAP) | -47.97 | % | 3.50 | % | -6.59 | % | 4.57 | % | 5.58 | % | |||||
Adjusted return on average equity (non-GAAP) | 2.98 | % | 3.50 | % | 2.54 | % | 4.57 | % | 5.58 | % | |||||
Kearny Financial Corp.
Reconciliation of GAAP to Non-GAAP
(Unaudited)
Three Months Ended | |||||||||||||||
(Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
Adjusted return on average tangible equity: | |||||||||||||||
Total average equity | $ | 751,070 | $ | 844,782 | $ | 838,714 | $ | 862,128 | $ | 861,691 | |||||
Less: average goodwill | (113,525 | ) | (210,895 | ) | (210,895 | ) | (210,895 | ) | (210,895 | ) | |||||
Less: average other intangible assets | (2,006 | ) | (2,138 | ) | (2,277 | ) | (2,411 | ) | (2,544 | ) | |||||
Total average tangible equity | $ | 635,539 | $ | 631,749 | $ | 625,542 | $ | 648,822 | $ | 648,252 | |||||
Return on average tangible equity (non-GAAP) | -56.69 | % | 4.68 | % | -8.84 | % | 6.07 | % | 7.41 | % | |||||
Adjusted return on average tangible equity (non-GAAP) | 3.52 | % | 4.68 | % | 3.41 | % | 6.07 | % | 7.41 | % | |||||
Adjusted non-interest expense ratio: | |||||||||||||||
Non-interest expense (GAAP) | $ | 126,551 | $ | 29,059 | $ | 29,767 | $ | 29,774 | $ | 28,761 | |||||
Non-recurring transactions: | |||||||||||||||
Goodwill impairment | (97,370 | ) | — | — | — | — | |||||||||
Non-interest expense (non-GAAP) | $ | 29,181 | $ | 29,059 | $ | 29,767 | $ | 29,774 | $ | 28,761 | |||||
Non-interest expense ratio (GAAP) | 6.58 | % | 1.48 | % | 1.50 | % | 1.49 | % | 1.41 | % | |||||
Adjusted non-interest expense ratio (non-GAAP) | 1.52 | % | 1.48 | % | 1.50 | % | 1.49 | % | 1.41 | % | |||||
Adjusted efficiency ratio: | |||||||||||||||
Non-interest expense (non-GAAP) | $ | 29,181 | $ | 29,059 | $ | 29,767 | $ | 29,774 | $ | 28,761 | |||||
Net interest income (GAAP) | $ | 33,276 | $ | 34,319 | $ | 35,839 | $ | 39,160 | $ | 40,180 | |||||
Total non-interest income (GAAP) | 5,806 | 4,203 | (16,012 | ) | 4,010 | 3,666 | |||||||||
Non-recurring transactions: | |||||||||||||||
Net effect of sale and call of securities | — | — | 18,135 | — | — | ||||||||||
Net effect of bank-owned life insurance restructure | 392 | — | 573 | — | — | ||||||||||
Total revenue (non-GAAP) | $ | 39,474 | $ | 38,522 | $ | 38,535 | $ | 43,170 | $ | 43,846 | |||||
Efficiency ratio (GAAP) | 323.81 | % | 75.43 | % | 150.13 | % | 68.97 | % | 65.60 | % | |||||
Adjusted efficiency ratio (non-GAAP) | 73.92 | % | 75.43 | % | 77.25 | % | 68.97 | % | 65.60 | % | |||||
Kearny Financial Corp.
Reconciliation of GAAP to Non-GAAP
(Unaudited)
Year Ended | |||||||
(Dollars and Shares in Thousands, Except Per Share Data) | June 30, 2024 | June 30, 2023 | |||||
Adjusted net income: | |||||||
Net (loss) income (GAAP) | $ | (86,667 | ) | $ | 40,811 | ||
Non-recurring transactions - net of tax: | |||||||
Branch consolidation expenses and impairment charges | — | 568 | |||||
Net effect of sale and call of securities | 12,876 | 10,811 | |||||
Net effect of sale of other assets | — | (2,081 | ) | ||||
Severance expense from workforce realignment | — | 538 | |||||
Net effect of bank-owned life insurance contract restructure | 6,678 | — | |||||
Goodwill impairment | 95,283 | — | |||||
Adjusted net income | $ | 28,170 | $ | 50,647 | |||
Calculation of pre-tax, pre-provision net revenue: | |||||||
Net (loss) income (GAAP) | (86,667 | ) | 40,811 | ||||
Adjustments to net income (GAAP): | |||||||
Provision for income taxes | $ | 5,891 | $ | 11,568 | |||
Provision for (reversal of) credit losses | 6,226 | 2,486 | |||||
Pre-tax, pre-provision net revenue (non-GAAP) | (74,550 | ) | 54,865 | ||||
Adjusted earnings per share: | |||||||
Weighted average common shares - basic | 62,444 | 64,804 | |||||
Weighted average common shares - diluted | 62,444 | 64,804 | |||||
Earnings per share - basic (GAAP) | $ | (1.39 | ) | $ | 0.63 | ||
Earnings per share - diluted (GAAP) | $ | (1.39 | ) | $ | 0.63 | ||
Adjusted earnings per share - basic (non-GAAP) | $ | 0.45 | $ | 0.78 | |||
Adjusted earnings per share - diluted (non-GAAP) | $ | 0.45 | $ | 0.78 | |||
Pre-tax, pre-provision net revenue per share: | |||||||
Pre-tax, pre-provision net revenue per share - basic (non-GAAP) | $ | (1.19 | ) | $ | 0.85 | ||
Pre-tax, pre-provision net revenue per share - diluted (non-GAAP) | $ | (1.19 | ) | $ | 0.85 | ||
Adjusted return on average assets: | |||||||
Total average assets | $ | 7,878,292 | $ | 8,068,937 | |||
Return on average assets (GAAP) | -1.10 | % | 0.51 | % | |||
Adjusted return on average assets (non-GAAP) | 0.36 | % | 0.63 | % | |||
Adjusted return on average equity: | |||||||
Total average equity | $ | 824,317 | $ | 875,358 | |||
Return on average equity (GAAP) | -10.51 | % | 4.66 | % | |||
Adjusted return on average equity (non-GAAP) | 3.42 | % | 5.79 | % | |||
Adjusted return on average tangible equity: | |||||||
Total average equity | $ | 824,317 | $ | 875,358 | |||
Less: average goodwill | (186,685 | ) | (210,895 | ) | |||
Less: average other intangible assets | (2,209 | ) | (2,757 | ) | |||
Total average tangible equity | $ | 635,423 | $ | 661,706 | |||
Return on average tangible equity (non-GAAP) | -13.64 | % | 6.17 | % | |||
Adjusted return on average tangible equity (non-GAAP) | 4.43 | % | 7.65 | % | |||
Kearny Financial Corp.
Reconciliation of GAAP to Non-GAAP
(Unaudited)
Year Ended | |||||||
(Dollars in Thousands) | June 30, 2024 | June 30, 2023 | |||||
Adjusted non-interest expense ratio: | |||||||
Non-interest expense (GAAP) | $ | 215,151 | $ | 123,751 | |||
Non-routine transactions: | |||||||
Branch consolidation expenses and impairment charges | — | (800 | ) | ||||
Severance expense from workforce realignment | — | (757 | ) | ||||
Goodwill impairment | (97,370 | ) | — | ||||
Non-interest expense (non-GAAP) | $ | 117,781 | $ | 122,194 | |||
Non-interest expense ratio (GAAP) | 2.73 | % | 1.53 | % | |||
Adjusted non-interest expense ratio (non-GAAP) | 1.50 | % | 1.51 | % | |||
Adjusted efficiency ratio: | |||||||
Non-interest expense (non-GAAP) | $ | 117,781 | $ | 122,194 | |||
Net interest income (GAAP) | $ | 142,594 | $ | 175,865 | |||
Total non-interest income (GAAP) | (1,993 | ) | 2,751 | ||||
Non-routine transactions: | |||||||
Net effect of sale and call of securities | 18,135 | 15,227 | |||||
Net effect of sale of other assets | — | (2,931 | ) | ||||
Net effect of bank-owned life insurance contract restructure | 965 | — | |||||
Total revenue (non-GAAP) | $ | 159,701 | $ | 190,912 | |||
Efficiency ratio (GAAP) | 153.02 | % | 69.28 | % | |||
Adjusted efficiency ratio (non-GAAP) | 73.75 | % | 64.01 | % |