Kearny Financial Corp. Announces Third Quarter Fiscal 2023 Results and Declaration of Cash Dividend
27 Abril 2023 - 7:30AM
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, 2023 of $10.3 million, or
$0.16 per diluted share, compared to $2.0 million, or $0.03 per
diluted share, for the quarter ended December 31, 2022. Net
income for the quarters ended March 31, 2023 and
December 31, 2022 was impacted by various non-recurring items,
as described in further detail below.
The Company also announced that its Board of
Directors has declared a quarterly cash dividend of $0.11 per
share, payable on May 24, 2023 to stockholders of record as of May
10, 2023.
Craig L. Montanaro, President and Chief
Executive Officer, commented, “While my comments in recent quarters
have featured the terms ‘risk’ and ‘uncertainty’, the past few
weeks have brought fresh challenges to the banking sector, and the
economy at large. Despite the sudden failure of two large regional
banks, the voluntary wind-down of a third and pressure on the
industry as a whole, I am pleased to report that Kearny remains on
solid footing. Our highly-diversified deposit base, conservative
risk culture and abundance of available liquidity allows us to
navigate these uncertain times, as we have throughout our 139 years
in operation.”
Mr. Montanaro further noted, “Looking to this
quarter’s earnings, the rate of our net interest margin compression
has begun to slow, while our previously announced operating
efficiency initiative has gotten off to a strong start.
Non-interest expense, excluding non-recurring items, declined 7.3%
quarter-over-quarter and will be further supported by the June 2023
consolidation of two branch locations.”
Liquidity & Funding
-
Deposits decreased $168.0 million, or 2.8%, to $5.80 billion at
March 31, 2023, from $5.97 billion at December 31, 2022.
Details regarding the change in deposit balances are presented in
the table below. The decrease in deposits was largely concentrated
in three products: consumer savings, commercial non-interest
checking and government deposits. The decline in consumer savings
reflected the continuation of a multi-quarter trend resulting from
the migration of low-rate savings balances into higher-rate money
market and time deposit products. The reduction in non-interest
checking deposits was a combination of outflow and the migration of
non-interest bearing commercial deposits into interest-bearing
products. The decrease in government deposits was largely
attributable to seasonal outflows resulting from expected tax and
pension payments.
(Dollars in Thousands) |
|
March 31,2023 |
|
December 31,2022 |
|
Variance or Change |
|
Variance or Change Pct. |
Government deposits |
|
$ |
607,925 |
|
$ |
677,923 |
|
$ |
(69,998 |
) |
|
(10.3 |
)% |
Excluding government
deposits: |
|
|
|
|
|
|
|
|
Non-interest-bearing |
|
|
615,696 |
|
|
649,044 |
|
|
(33,348 |
) |
|
(5.1 |
)% |
Interest-bearing demand |
|
|
1,699,407 |
|
|
1,663,302 |
|
|
36,105 |
|
|
2.2 |
% |
Savings |
|
|
795,310 |
|
|
881,837 |
|
|
(86,527 |
) |
|
(9.8 |
)% |
Certificates of deposit |
|
|
2,085,066 |
|
|
2,099,265 |
|
|
(14,199 |
) |
|
(0.7 |
)% |
Total deposits |
|
$ |
5,803,404 |
|
$ |
5,971,371 |
|
$ |
(167,967 |
) |
|
(2.8 |
)% |
- The aggregate
amount of uninsured deposits was $1.68 billion at March 31,
2023. Excluding collateralized deposits of state and local
governments, and deposits of the Bank’s wholly-owned subsidiary and
holding company, the aggregate amount of uninsured deposits was
$705.7 million, or 12.2% of total deposits.
- Borrowings
increased $228.1 million to $1.61 billion, or 19.3% of total
assets, at March 31, 2023, from $1.38 billion, or 16.7% of
total assets, at December 31, 2022. At March 31, 2023,
borrowings were comprised of $1.54 billion of advances from the
Federal Home Loan Bank of New York and $70.0 million from unsecured
fed funds lines of credit. There were no borrowings outstanding
from the Federal Reserve Bank at, or during the quarter ended,
March 31, 2023.
- At March 31,
2023, the Company maintained available secured borrowing capacity
of $2.37 billion, of which $1.88 billion was immediately accessible
via in-place collateral and $493.2 million represented the market
value of unpledged securities.
Assets
- Total assets
increased $60.0 million, or 0.7%, to $8.35 billion at
March 31, 2023, from $8.29 billion at December 31,
2022.
- Cash and cash
equivalents increased $118.9 million, or 157.2%, to $194.6 million
at March 31, 2023, from $75.7 million at December 31,
2022. The increase was driven by the Company’s decision to hold
excess cash on its balance sheet due to external market
conditions.
- Loans receivable
decreased $17.8 million, or 0.3%, to $5.97 billion at
March 31, 2023, from $5.98 billion at December 31,
2022.
- Investment
securities decreased $23.3 million to $1.42 billion, or 17.0% of
total assets, at March 31, 2023, from $1.44 billion, or 17.4%
of total assets, at December 31, 2022. The decrease was driven
by paydowns, partially offset by a $9.7 million improvement in
unrealized losses on securities available for sale during the
quarter ended March 31, 2023.
Earnings
Performance Highlights
- Return on average
assets was 0.50% for the quarter ended March 31, 2023 compared
to 0.10% for the quarter ended December 31, 2022.
- Return on average
equity was 4.69% and 0.90% for the quarters ended March 31,
2023 and December 31, 2022, respectively. Return on average
tangible equity was 6.20% and 1.20% for those same comparative
periods.
Net Interest Income and Net Interest
Margin
- Net interest margin
contracted 18 basis points to 2.20% for the quarter ended
March 31, 2023, from 2.38% for the quarter ended
December 31, 2022. Excluding purchase accounting accretion and
loan prepayment penalty income, net interest margin contracted 11
basis points.
- Net interest income
decreased $2.4 million to $42.4 million for the quarter ended
March 31, 2023, from $44.8 million for the quarter ended
December 31, 2022. Included in net interest income for the
quarters ended March 31, 2023 and December 31, 2022,
respectively, was purchase accounting accretion of $711,000 and
$1.9 million, and loan prepayment penalty income of $103,000 and
$166,000.
Non-Interest Income
- Non-interest income
increased $10.1 million to income of $1.6 million for the quarter
ended March 31, 2023, from a loss of $8.5 million for the
quarter ended December 31, 2022. The increase was primarily
attributable to a loss of $15.2 million on the sale of securities
during the prior comparative period.
- Loss on sale of
loans was $2.4 million for the quarter ended March 31, 2023
compared to a gain on sale of loans of $134,000 for the quarter
ended December 31, 2022. The loss in the current period was
the result of the sale of a non-performing multi-family mortgage
loan held-for-sale located in Queens, NY. The loan was acquired in
2018 and had been classified as held-for-sale since June 30,
2022.
- Other income
decreased $2.7 million to $1.1 million for the quarter ended
March 31, 2023, primarily due to a non-recurring gain of $2.9
million attributable to the sale of a former branch location
recognized during the prior comparative period.
Non-Interest Expense
- Non-interest
expense decreased $2.3 million to $30.4 million for the quarter
ended March 31, 2023, from $32.7 million for the quarter ended
December 31, 2022. Excluding $800,000 of branch consolidation
expense, of which $250,000 was recorded in occupancy expense and
$550,000 was recorded in other expense, non-interest expense for
the quarter ended March 31, 2023 was $29.6 million.
- Salaries and
benefits expense decreased $1.9 million to $18.0 million for the
quarter ended March 31, 2023. This decrease was driven by
lower salary expense as a result of reduced headcount and a
decrease in incentive payments tied to loan origination
volume.
- The efficiency and
non-interest expense ratios were 68.96% and 1.47%, respectively,
for the quarter ended March 31, 2023, as compared to 89.93%
and 1.62%, respectively, for the quarter ended December 31,
2022.
Income Taxes
- Income tax expense
totaled $2.9 million for the quarter ended March 31, 2023
compared to $33,000 for the quarter ended December 31, 2022,
resulting in an effective tax rate of 22.0% and 1.7%, respectively.
The effective tax rate, for the prior comparative period, was
impacted by the loss on the sale of securities.
Asset Quality
- The balance of
non-performing assets decreased $5.2 million to $57.4 million, or
0.69% of total assets, at March 31, 2023, from $62.6 million,
or 0.76% of total assets, at December 31, 2022. The decrease
in non-performing assets was primarily attributable to the sale of
a non-performing multi-family mortgage loan held-for-sale, as
previously noted.
- Net charge-offs
totaled $206,000, or 0.01% of average loans, on an annualized
basis, for the quarter ended March 31, 2023, compared to
$407,000, or 0.03% of average loans, on an annualized basis, for
the quarter ended December 31, 2022.
- For the quarter
ended March 31, 2023, the Company recorded a provision for
credit losses of $451,000, compared to $1.7 million for the quarter
ended December 31, 2022. The provision for the quarter ended
March 31, 2023 was largely driven by a slower prepayment rate
assumption, partially offset by a net reduction in reserves on
loans individually analyzed for impairment.
- The allowance for
credit losses was $49.1 million, or 0.82% of total loans, at
March 31, 2023, compared to $48.9 million, or 0.81% of total
loans, at December 31, 2022.
Capital
- For the quarter
ended March 31, 2023, book value per share increased $0.04, or
0.3%, to $12.99 and tangible book value per share increased $0.01,
or 0.1%, to $9.79.
- During the quarter
ended March 31, 2023, the Company repurchased 698,286 shares
of common stock at a cost of $6.6 million, or $9.50 per share.
- At March 31,
2023, total stockholders’ equity included after-tax net unrealized
losses on securities available for sale of $100.4 million,
partially offset by after-tax unrealized gains on derivatives of
$27.5 million. Pre-tax net unrecognized losses on securities held
to maturity of $13.6 million were not reflected in total
stockholders’ equity.
- At March 31,
2023, the Company’s tangible equity to tangible assets ratio
equaled 8.02% 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 Fiscal 2023 Investor
Presentation, a copy of which is available through the Investor
Relations link located at the bottom of the page of our website at
www.kearnybank.com and via a Current Report on Form 8-K on the
website of the Securities and Exchange Commission at
www.sec.gov.
Statements contained in this news release that
are not historical facts are forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents
filed by the Company with the Securities and Exchange Commission
from time to time. The Company does not undertake and specifically
disclaims any obligation to update any forward-looking statement,
whether written or oral, that may be made from time to time by or
on behalf of the Company.
Category: Earnings
Linked-Quarter Comparative Financial Analysis |
|
|
Kearny Financial Corp.Consolidated Balance
Sheets(Unaudited) |
|
(Dollars and Shares in
Thousands,Except Per Share Data) |
March 31,2023 |
December 31,2022 |
Variance or Change |
Variance or Change Pct. |
Assets |
|
|
|
|
Cash and cash equivalents |
$ |
194,568 |
|
$ |
75,660 |
|
$ |
118,908 |
|
157.2 |
% |
Securities available for
sale |
|
1,267,066 |
|
|
1,286,354 |
|
|
(19,288 |
) |
-1.5 |
% |
Securities held to
maturity |
|
149,764 |
|
|
153,786 |
|
|
(4,022 |
) |
-2.6 |
% |
Loans held-for-sale |
|
5,401 |
|
|
12,940 |
|
|
(7,539 |
) |
-58.3 |
% |
Loans receivable |
|
5,966,325 |
|
|
5,984,133 |
|
|
(17,808 |
) |
-0.3 |
% |
Less: allowance for credit losses on loans |
|
(49,122 |
) |
|
(48,877 |
) |
|
245 |
|
0.5 |
% |
Net loans receivable |
|
5,917,203 |
|
|
5,935,256 |
|
|
(18,053 |
) |
-0.3 |
% |
Premises and equipment |
|
49,589 |
|
|
50,953 |
|
|
(1,364 |
) |
-2.7 |
% |
Federal Home Loan Bank
stock |
|
76,319 |
|
|
69,022 |
|
|
7,297 |
|
10.6 |
% |
Accrued interest
receivable |
|
28,794 |
|
|
27,368 |
|
|
1,426 |
|
5.2 |
% |
Goodwill |
|
210,895 |
|
|
210,895 |
|
|
— |
|
— |
% |
Core deposit intangible |
|
2,590 |
|
|
2,732 |
|
|
(142 |
) |
-5.2 |
% |
Bank owned life insurance |
|
291,220 |
|
|
289,673 |
|
|
1,547 |
|
0.5 |
% |
Deferred income taxes,
net |
|
53,151 |
|
|
51,107 |
|
|
2,044 |
|
4.0 |
% |
Other real estate owned |
|
13,410 |
|
|
13,410 |
|
|
— |
|
— |
% |
Other assets |
|
89,366 |
|
|
110,162 |
|
|
(20,796 |
) |
-18.9 |
% |
Total assets |
$ |
8,349,336 |
|
$ |
8,289,318 |
|
$ |
60,018 |
|
0.7 |
% |
|
|
|
|
|
Liabilities |
|
|
|
|
Deposits: |
|
|
|
|
Non-interest-bearing |
$ |
617,778 |
|
$ |
650,950 |
|
$ |
(33,172 |
) |
-5.1 |
% |
Interest-bearing |
|
5,185,626 |
|
|
5,320,421 |
|
|
(134,795 |
) |
-2.5 |
% |
Total deposits |
|
5,803,404 |
|
|
5,971,371 |
|
|
(167,967 |
) |
-2.8 |
% |
Borrowings |
|
1,611,692 |
|
|
1,383,573 |
|
|
228,119 |
|
16.5 |
% |
Advance payments by borrowers
for taxes |
|
18,706 |
|
|
17,307 |
|
|
1,399 |
|
8.1 |
% |
Other liabilities |
|
49,304 |
|
|
44,427 |
|
|
4,877 |
|
11.0 |
% |
Total liabilities |
|
7,483,106 |
|
|
7,416,678 |
|
|
66,428 |
|
0.9 |
% |
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
Common stock |
|
667 |
|
|
674 |
|
|
(7 |
) |
-1.0 |
% |
Paid-in capital |
|
509,359 |
|
|
515,332 |
|
|
(5,973 |
) |
-1.2 |
% |
Retained earnings |
|
452,605 |
|
|
449,489 |
|
|
3,116 |
|
0.7 |
% |
Unearned ESOP shares |
|
(23,348 |
) |
|
(23,834 |
) |
|
486 |
|
2.0 |
% |
Accumulated other
comprehensive loss |
|
(73,053 |
) |
|
(69,021 |
) |
|
(4,032 |
) |
-5.8 |
% |
Total stockholders' equity |
|
866,230 |
|
|
872,640 |
|
|
(6,410 |
) |
-0.7 |
% |
Total liabilities and stockholders' equity |
$ |
8,349,336 |
|
$ |
8,289,318 |
|
$ |
60,018 |
|
0.7 |
% |
|
|
|
|
|
Consolidated capital
ratios |
|
|
|
|
Equity to assets |
|
10.37 |
% |
|
10.53 |
% |
|
-0.16 |
% |
|
Tangible equity to tangible assets (1) |
|
8.02 |
% |
|
8.16 |
% |
|
-0.14 |
% |
|
|
|
|
|
|
Share
data |
|
|
|
|
Outstanding shares |
|
66,680 |
|
|
67,388 |
|
|
(708 |
) |
-1.1 |
% |
Book value per share |
$ |
12.99 |
|
$ |
12.95 |
|
$ |
0.04 |
|
0.3 |
% |
Tangible book value per share (2) |
$ |
9.79 |
|
$ |
9.78 |
|
$ |
0.01 |
|
0.1 |
% |
_________________________
(1) |
|
Tangible equity equals total stockholders' equity reduced by
goodwill and core deposit intangible assets. Tangible assets equals
total assets reduced by goodwill and core deposit intangible
assets. |
(2) |
|
Tangible book value equals total stockholders' equity reduced by
goodwill and core deposit intangible assets. |
|
Kearny Financial Corp.Consolidated
Statements of Income(Unaudited) |
|
(Dollars and Shares in Thousands,Except Per Share Data) |
Three Months Ended |
Variance or Change |
Variance or Change Pct. |
March 31,2023 |
December 31,2022 |
Interest income |
|
|
|
|
Loans |
$ |
60,172 |
|
$ |
57,996 |
|
$ |
2,176 |
|
3.8 |
% |
Taxable investment securities |
|
15,459 |
|
|
13,221 |
|
|
2,238 |
|
16.9 |
% |
Tax-exempt investment securities |
|
99 |
|
|
219 |
|
|
(120 |
) |
-54.8 |
% |
Other interest-earning assets |
|
1,441 |
|
|
1,005 |
|
|
436 |
|
43.4 |
% |
Total interest income |
|
77,171 |
|
|
72,441 |
|
|
4,730 |
|
6.5 |
% |
|
|
|
|
|
Interest
expense |
|
|
|
|
Deposits |
|
22,246 |
|
|
18,822 |
|
|
3,424 |
|
18.2 |
% |
Borrowings |
|
12,554 |
|
|
8,836 |
|
|
3,718 |
|
42.1 |
% |
Total interest expense |
|
34,800 |
|
|
27,658 |
|
|
7,142 |
|
25.8 |
% |
Net interest income |
|
42,371 |
|
|
44,783 |
|
|
(2,412 |
) |
-5.4 |
% |
Provision for credit
losses |
|
451 |
|
|
1,671 |
|
|
(1,220 |
) |
-73.0 |
% |
Net interest income after provision for credit
losses |
|
41,920 |
|
|
43,112 |
|
|
(1,192 |
) |
-2.8 |
% |
|
|
|
|
|
Non-interest
income |
|
|
|
|
Fees and service charges |
|
910 |
|
|
734 |
|
|
176 |
|
24.0 |
% |
Loss on sale and call of securities |
|
— |
|
|
(15,227 |
) |
|
15,227 |
|
100.0 |
% |
(Loss) gain on sale of loans |
|
(2,373 |
) |
|
134 |
|
|
(2,507 |
) |
-1870.9 |
% |
Income from bank owned life insurance |
|
1,581 |
|
|
1,761 |
|
|
(180 |
) |
-10.2 |
% |
Electronic banking fees and charges |
|
457 |
|
|
397 |
|
|
60 |
|
15.1 |
% |
Other income |
|
1,071 |
|
|
3,723 |
|
|
(2,652 |
) |
-71.2 |
% |
Total non-interest income |
|
1,646 |
|
|
(8,478 |
) |
|
10,124 |
|
-119.4 |
% |
|
|
|
|
|
Non-interest
expense |
|
|
|
|
Salaries and employee benefits |
|
18,005 |
|
|
19,921 |
|
|
(1,916 |
) |
-9.6 |
% |
Net occupancy expense of premises |
|
3,097 |
|
|
2,987 |
|
|
110 |
|
3.7 |
% |
Equipment and systems |
|
3,537 |
|
|
3,867 |
|
|
(330 |
) |
-8.5 |
% |
Advertising and marketing |
|
413 |
|
|
731 |
|
|
(318 |
) |
-43.5 |
% |
Federal deposit insurance premium |
|
1,546 |
|
|
1,226 |
|
|
320 |
|
26.1 |
% |
Directors' compensation |
|
340 |
|
|
339 |
|
|
1 |
|
0.3 |
% |
Other expense |
|
3,414 |
|
|
3,579 |
|
|
(165 |
) |
-4.6 |
% |
Total non-interest expense |
|
30,352 |
|
|
32,650 |
|
|
(2,298 |
) |
-7.0 |
% |
Income before income taxes |
|
13,214 |
|
|
1,984 |
|
|
11,230 |
|
566.0 |
% |
Income taxes |
|
2,902 |
|
|
33 |
|
|
2,869 |
|
8693.9 |
% |
Net income |
$ |
10,312 |
|
$ |
1,951 |
|
$ |
8,361 |
|
428.5 |
% |
|
|
|
|
|
Net income per common
share (EPS) |
|
|
|
|
Basic |
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.13 |
|
|
Diluted |
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.13 |
|
|
|
|
|
|
|
Dividends
declared |
|
|
|
|
Cash dividends declared per common share |
$ |
0.11 |
|
$ |
0.11 |
|
$ |
— |
|
|
Cash dividends declared |
$ |
7,196 |
|
$ |
7,172 |
|
$ |
24 |
|
|
Dividend payout ratio |
|
69.8 |
% |
|
367.6 |
% |
(297.8 |
)% |
|
|
|
|
|
|
Weighted average
number of common shares outstanding |
|
|
|
|
Basic |
|
64,769 |
|
|
65,030 |
|
|
(261 |
) |
|
Diluted |
|
64,783 |
|
|
65,038 |
|
|
(255 |
) |
|
|
Kearny Financial Corp.Average Balance
Sheet Data(Unaudited) |
|
(Dollars in Thousands) |
Three Months Ended |
Variance or Change |
Variance or Change Pct. |
March 31,2023 |
December 31,2022 |
Assets |
|
|
|
|
Interest-earning assets: |
|
|
|
|
Loans receivable, including loans held for sale |
$ |
5,986,669 |
|
$ |
5,839,903 |
|
$ |
146,766 |
|
2.5 |
% |
Taxable investment securities |
|
1,558,222 |
|
|
1,527,578 |
|
|
30,644 |
|
2.0 |
% |
Tax-exempt investment securities |
|
17,663 |
|
|
37,917 |
|
|
(20,254 |
) |
-53.4 |
% |
Other interest-earning assets |
|
131,682 |
|
|
114,175 |
|
|
17,507 |
|
15.3 |
% |
Total interest-earning assets |
|
7,694,236 |
|
|
7,519,573 |
|
|
174,663 |
|
2.3 |
% |
Non-interest-earning
assets |
|
575,009 |
|
|
550,519 |
|
|
24,490 |
|
4.4 |
% |
Total assets |
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
199,153 |
|
2.5 |
% |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
Deposits: |
|
|
|
|
Interest-bearing demand |
$ |
2,363,762 |
|
$ |
2,359,977 |
|
$ |
3,785 |
|
0.2 |
% |
Savings |
|
858,673 |
|
|
931,584 |
|
|
(72,911 |
) |
-7.8 |
% |
Certificates of deposit |
|
2,069,396 |
|
|
2,192,722 |
|
|
(123,326 |
) |
-5.6 |
% |
Total interest-bearing deposits |
|
5,291,831 |
|
|
5,484,283 |
|
|
(192,452 |
) |
-3.5 |
% |
Borrowings: |
|
|
|
|
Federal Home Loan Bank advances |
|
1,402,269 |
|
|
997,148 |
|
|
405,121 |
|
40.6 |
% |
Other borrowings |
|
1,611 |
|
|
— |
|
|
1,611 |
|
— |
% |
Total borrowings |
|
1,403,880 |
|
|
997,148 |
|
|
406,732 |
|
40.8 |
% |
Total interest-bearing liabilities |
|
6,695,711 |
|
|
6,481,431 |
|
|
214,280 |
|
3.3 |
% |
Non-interest-bearing
liabilities: |
|
|
|
|
Non-interest-bearing deposits |
|
634,324 |
|
|
666,846 |
|
|
(32,522 |
) |
-4.9 |
% |
Other non-interest-bearing liabilities |
|
60,327 |
|
|
56,721 |
|
|
3,606 |
|
6.4 |
% |
Total non-interest-bearing liabilities |
|
694,651 |
|
|
723,567 |
|
|
(28,916 |
) |
-4.0 |
% |
Total liabilities |
|
7,390,362 |
|
|
7,204,998 |
|
|
185,364 |
|
2.6 |
% |
Stockholders' equity |
|
878,883 |
|
|
865,094 |
|
|
13,789 |
|
1.6 |
% |
Total liabilities and stockholders' equity |
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
199,153 |
|
2.5 |
% |
|
|
|
|
|
Average interest-earning
assets to average interest-bearing liabilities |
|
114.91 |
% |
|
116.02 |
% |
|
-1.11 |
% |
-1.0 |
% |
|
Kearny Financial Corp.Performance Ratio
Highlights(Unaudited) |
|
|
Three Months Ended |
Variance or Change |
|
March 31,2023 |
December 31,2022 |
Average yield on
interest-earning assets: |
|
|
|
Loans receivable, including loans held for sale |
4.02 |
% |
3.97 |
% |
0.05 |
% |
Taxable investment securities |
3.97 |
% |
3.46 |
% |
0.51 |
% |
Tax-exempt investment securities (1) |
2.23 |
% |
2.32 |
% |
-0.09 |
% |
Other interest-earning assets |
4.38 |
% |
3.52 |
% |
0.86 |
% |
Total interest-earning assets |
4.01 |
% |
3.85 |
% |
0.16 |
% |
|
|
|
|
Average cost of
interest-bearing liabilities: |
|
|
|
Deposits: |
|
|
|
Interest-bearing demand |
2.01 |
% |
1.63 |
% |
0.38 |
% |
Savings |
0.41 |
% |
0.41 |
% |
— |
% |
Certificates of deposit |
1.84 |
% |
1.50 |
% |
0.34 |
% |
Total interest-bearing deposits |
1.68 |
% |
1.37 |
% |
0.31 |
% |
Borrowings: |
|
|
|
Federal Home Loan Bank advances |
3.58 |
% |
3.54 |
% |
0.04 |
% |
Other borrowings |
5.15 |
% |
— |
% |
5.15 |
% |
Total borrowings |
3.58 |
% |
3.54 |
% |
0.04 |
% |
Total interest-bearing liabilities |
2.08 |
% |
1.71 |
% |
0.37 |
% |
|
|
|
|
Interest rate spread (2) |
1.93 |
% |
2.14 |
% |
-0.21 |
% |
Net interest margin (3) |
2.20 |
% |
2.38 |
% |
-0.18 |
% |
|
|
|
|
Non-interest income to average assets (annualized) |
0.08 |
% |
-0.42 |
% |
0.50 |
% |
Non-interest expense to average assets (annualized) |
1.47 |
% |
1.62 |
% |
-0.15 |
% |
|
|
|
|
Efficiency ratio (4) |
68.96 |
% |
89.93 |
% |
-20.97 |
% |
|
|
|
|
Return on average assets (annualized) |
0.50 |
% |
0.10 |
% |
0.40 |
% |
Return on average equity (annualized) |
4.69 |
% |
0.90 |
% |
3.79 |
% |
Return on average tangible equity (annualized) (5) |
6.20 |
% |
1.20 |
% |
5.00 |
% |
_________________________
(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 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
March 31,2022 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) |
(Unaudited) |
Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
194,568 |
|
$ |
75,660 |
|
$ |
96,076 |
|
$ |
101,615 |
|
$ |
62,379 |
|
Securities available for
sale |
|
1,267,066 |
|
|
1,286,354 |
|
|
1,263,176 |
|
|
1,344,093 |
|
|
1,526,086 |
|
Securities held to
maturity |
|
149,764 |
|
|
153,786 |
|
|
115,943 |
|
|
118,291 |
|
|
121,853 |
|
Loans held-for-sale |
|
5,401 |
|
|
12,940 |
|
|
12,936 |
|
|
28,874 |
|
|
2,822 |
|
Loans receivable |
|
5,966,325 |
|
|
5,984,133 |
|
|
5,656,370 |
|
|
5,417,845 |
|
|
5,003,201 |
|
Less: allowance for credit losses on loans |
|
(49,122 |
) |
|
(48,877 |
) |
|
(47,613 |
) |
|
(47,058 |
) |
|
(43,860 |
) |
Net loans receivable |
|
5,917,203 |
|
|
5,935,256 |
|
|
5,608,757 |
|
|
5,370,787 |
|
|
4,959,341 |
|
Premises and equipment |
|
49,589 |
|
|
50,953 |
|
|
52,642 |
|
|
53,281 |
|
|
53,727 |
|
Federal Home Loan Bank
stock |
|
76,319 |
|
|
69,022 |
|
|
44,957 |
|
|
47,144 |
|
|
30,997 |
|
Accrued interest
receivable |
|
28,794 |
|
|
27,368 |
|
|
23,817 |
|
|
20,466 |
|
|
19,517 |
|
Goodwill |
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
|
210,895 |
|
Core deposit intangible |
|
2,590 |
|
|
2,732 |
|
|
2,876 |
|
|
3,020 |
|
|
3,166 |
|
Bank owned life insurance |
|
291,220 |
|
|
289,673 |
|
|
289,690 |
|
|
289,177 |
|
|
287,644 |
|
Deferred income taxes,
net |
|
53,151 |
|
|
51,107 |
|
|
54,278 |
|
|
49,350 |
|
|
34,349 |
|
Other real estate owned |
|
13,410 |
|
|
13,410 |
|
|
178 |
|
|
178 |
|
|
401 |
|
Other assets |
|
89,366 |
|
|
110,162 |
|
|
113,369 |
|
|
82,712 |
|
|
76,714 |
|
Total assets |
$ |
8,349,336 |
|
$ |
8,289,318 |
|
$ |
7,889,590 |
|
$ |
7,719,883 |
|
$ |
7,389,891 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Non-interest-bearing |
$ |
617,778 |
|
$ |
650,950 |
|
$ |
683,406 |
|
$ |
653,899 |
|
$ |
621,954 |
|
Interest-bearing |
|
5,185,626 |
|
|
5,320,421 |
|
|
5,424,872 |
|
|
5,208,357 |
|
|
4,906,708 |
|
Total deposits |
|
5,803,404 |
|
|
5,971,371 |
|
|
6,108,278 |
|
|
5,862,256 |
|
|
5,528,662 |
|
Borrowings |
|
1,611,692 |
|
|
1,383,573 |
|
|
851,454 |
|
|
901,337 |
|
|
851,220 |
|
Advance payments by borrowers
for taxes |
|
18,706 |
|
|
17,307 |
|
|
16,555 |
|
|
16,746 |
|
|
16,979 |
|
Other liabilities |
|
49,304 |
|
|
44,427 |
|
|
38,329 |
|
|
45,544 |
|
|
37,861 |
|
Total liabilities |
|
7,483,106 |
|
|
7,416,678 |
|
|
7,014,616 |
|
|
6,825,883 |
|
|
6,434,722 |
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
Common stock |
|
667 |
|
|
674 |
|
|
680 |
|
|
687 |
|
|
714 |
|
Paid-in capital |
|
509,359 |
|
|
515,332 |
|
|
520,245 |
|
|
528,396 |
|
|
561,176 |
|
Retained earnings |
|
452,605 |
|
|
449,489 |
|
|
454,710 |
|
|
445,451 |
|
|
441,522 |
|
Unearned ESOP shares |
|
(23,348 |
) |
|
(23,834 |
) |
|
(24,321 |
) |
|
(24,807 |
) |
|
(25,294 |
) |
Accumulated other
comprehensive loss |
|
(73,053 |
) |
|
(69,021 |
) |
|
(76,340 |
) |
|
(55,727 |
) |
|
(22,949 |
) |
Total stockholders' equity |
|
866,230 |
|
|
872,640 |
|
|
874,974 |
|
|
894,000 |
|
|
955,169 |
|
Total liabilities and stockholders' equity |
$ |
8,349,336 |
|
$ |
8,289,318 |
|
$ |
7,889,590 |
|
$ |
7,719,883 |
|
$ |
7,389,891 |
|
|
|
|
|
|
|
Consolidated capital
ratios |
|
|
|
|
|
Equity to assets |
|
10.37 |
% |
|
10.53 |
% |
|
11.09 |
% |
|
11.58 |
% |
|
12.93 |
% |
Tangible equity to tangible assets (1) |
|
8.02 |
% |
|
8.16 |
% |
|
8.61 |
% |
|
9.06 |
% |
|
10.33 |
% |
|
|
|
|
|
|
Share
data |
|
|
|
|
|
Outstanding shares |
|
66,680 |
|
|
67,388 |
|
|
67,938 |
|
|
68,666 |
|
|
71,424 |
|
Book value per share |
$ |
12.99 |
|
$ |
12.95 |
|
$ |
12.88 |
|
$ |
13.02 |
|
$ |
13.37 |
|
Tangible book value per share (2) |
$ |
9.79 |
|
$ |
9.78 |
|
$ |
9.73 |
|
$ |
9.90 |
|
$ |
10.38 |
|
_________________________
(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 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
March 31,2022 |
Loan portfolio composition: |
|
|
|
|
|
Commercial loans: |
|
|
|
|
|
Multi-family mortgage |
$ |
2,835,852 |
|
$ |
2,851,721 |
|
$ |
2,570,297 |
|
$ |
2,409,090 |
|
$ |
2,076,003 |
|
Nonresidential mortgage |
|
1,002,643 |
|
|
1,017,341 |
|
|
1,040,688 |
|
|
1,019,838 |
|
|
1,085,988 |
|
Commercial business |
|
162,038 |
|
|
177,530 |
|
|
186,361 |
|
|
176,807 |
|
|
169,551 |
|
Construction |
|
215,524 |
|
|
186,663 |
|
|
166,052 |
|
|
140,131 |
|
|
121,137 |
|
Total commercial loans |
|
4,216,057 |
|
|
4,233,255 |
|
|
3,963,398 |
|
|
3,745,866 |
|
|
3,452,679 |
|
One- to four-family residential mortgage |
|
1,713,343 |
|
|
1,719,514 |
|
|
1,666,730 |
|
|
1,645,816 |
|
|
1,527,980 |
|
Consumer loans: |
|
|
|
|
|
Home equity loans |
|
44,376 |
|
|
45,690 |
|
|
43,269 |
|
|
42,028 |
|
|
41,501 |
|
Other consumer |
|
2,592 |
|
|
2,648 |
|
|
2,869 |
|
|
2,866 |
|
|
2,755 |
|
Total consumer loans |
|
46,968 |
|
|
48,338 |
|
|
46,138 |
|
|
44,894 |
|
|
44,256 |
|
Total loans, excluding yield adjustments |
|
5,976,368 |
|
|
6,001,107 |
|
|
5,676,266 |
|
|
5,436,576 |
|
|
5,024,915 |
|
Unaccreted yield adjustments |
|
(10,043 |
) |
|
(16,974 |
) |
|
(19,896 |
) |
|
(18,731 |
) |
|
(21,714 |
) |
Loans receivable, net of yield adjustments |
|
5,966,325 |
|
|
5,984,133 |
|
|
5,656,370 |
|
|
5,417,845 |
|
|
5,003,201 |
|
Less: allowance for credit losses on loans |
|
(49,122 |
) |
|
(48,877 |
) |
|
(47,613 |
) |
|
(47,058 |
) |
|
(43,860 |
) |
Net loans receivable |
$ |
5,917,203 |
|
$ |
5,935,256 |
|
$ |
5,608,757 |
|
$ |
5,370,787 |
|
$ |
4,959,341 |
|
|
|
|
|
|
|
Asset
quality: |
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
Accruing loans - 90 days and over past due |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Nonaccrual loans |
|
44,026 |
|
|
40,549 |
|
|
68,574 |
|
|
70,321 |
|
|
80,595 |
|
Total nonperforming loans |
|
44,026 |
|
|
40,549 |
|
|
68,574 |
|
|
70,321 |
|
|
80,595 |
|
Nonaccrual loans held-for-sale |
|
— |
|
|
8,650 |
|
|
8,650 |
|
|
21,745 |
|
|
— |
|
Other real estate owned |
|
13,410 |
|
|
13,410 |
|
|
178 |
|
|
178 |
|
|
401 |
|
Total nonperforming assets |
$ |
57,436 |
|
$ |
62,609 |
|
$ |
77,402 |
|
$ |
92,244 |
|
$ |
80,996 |
|
|
|
|
|
|
|
Nonperforming loans (% total loans) |
|
0.74 |
% |
|
0.68 |
% |
|
1.21 |
% |
|
1.30 |
% |
|
1.61 |
% |
Nonperforming assets (% total assets) |
|
0.69 |
% |
|
0.76 |
% |
|
0.98 |
% |
|
1.19 |
% |
|
1.10 |
% |
|
|
|
|
|
|
Classified loans |
$ |
103,461 |
|
$ |
86,069 |
|
$ |
92,610 |
|
$ |
94,555 |
|
$ |
163,621 |
|
|
|
|
|
|
|
Allowance for credit losses on loans (ACL): |
|
|
|
|
|
ACL to total loans |
|
0.82 |
% |
|
0.81 |
% |
|
0.84 |
% |
|
0.87 |
% |
|
0.87 |
% |
ACL to nonperforming loans |
|
111.57 |
% |
|
120.54 |
% |
|
69.43 |
% |
|
66.92 |
% |
|
54.42 |
% |
Net charge-offs |
$ |
206 |
|
$ |
407 |
|
$ |
115 |
|
$ |
1,024 |
|
$ |
436 |
|
Average net charge-off rate (annualized) |
|
0.01 |
% |
|
0.03 |
% |
|
0.01 |
% |
|
0.08 |
% |
|
0.04 |
% |
|
Kearny Financial Corp.Supplemental Balance
Sheet Highlights(Unaudited) |
|
(Dollars in Thousands) |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
March 31,2022 |
Funding composition: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Non-interest-bearing deposits |
$ |
617,778 |
|
$ |
650,950 |
|
$ |
683,406 |
|
$ |
653,899 |
|
$ |
621,954 |
|
Interest-bearing demand |
|
2,285,799 |
|
|
2,316,485 |
|
|
2,382,411 |
|
|
2,265,597 |
|
|
2,154,488 |
|
Savings |
|
811,483 |
|
|
901,514 |
|
|
982,916 |
|
|
1,053,198 |
|
|
1,088,974 |
|
Certificates of deposit (retail) |
|
1,327,343 |
|
|
1,354,907 |
|
|
1,263,124 |
|
|
1,116,035 |
|
|
1,122,228 |
|
Certificates of deposit (brokered and listing service) |
|
761,001 |
|
|
747,515 |
|
|
796,421 |
|
|
773,527 |
|
|
541,018 |
|
Interest-bearing deposits |
|
5,185,626 |
|
|
5,320,421 |
|
|
5,424,872 |
|
|
5,208,357 |
|
|
4,906,708 |
|
Total deposits |
|
5,803,404 |
|
|
5,971,371 |
|
|
6,108,278 |
|
|
5,862,256 |
|
|
5,528,662 |
|
|
|
|
|
|
|
Borrowings: |
|
|
|
|
|
Federal Home Loan Bank advances |
|
1,156,692 |
|
|
1,256,573 |
|
|
796,454 |
|
|
651,337 |
|
|
541,220 |
|
Overnight borrowings |
|
455,000 |
|
|
127,000 |
|
|
55,000 |
|
|
250,000 |
|
|
310,000 |
|
Total borrowings |
|
1,611,692 |
|
|
1,383,573 |
|
|
851,454 |
|
|
901,337 |
|
|
851,220 |
|
|
|
|
|
|
|
Total funding |
$ |
7,415,096 |
|
$ |
7,354,944 |
|
$ |
6,959,732 |
|
$ |
6,763,593 |
|
$ |
6,379,882 |
|
|
|
|
|
|
|
Loans as a % of deposits |
|
102.1 |
% |
|
99.6 |
% |
|
92.0 |
% |
|
92.1 |
% |
|
89.8 |
% |
Deposits as a % of total funding |
|
78.3 |
% |
|
81.2 |
% |
|
87.8 |
% |
|
86.7 |
% |
|
86.7 |
% |
Borrowings as a % of total funding |
|
21.7 |
% |
|
18.8 |
% |
|
12.2 |
% |
|
13.3 |
% |
|
13.3 |
% |
|
|
|
|
|
|
Uninsured
deposits: |
|
|
|
|
|
Uninsured deposits (reported) (1) |
$ |
1,678,051 |
|
$ |
1,815,854 |
|
$ |
1,771,851 |
|
$ |
1,525,940 |
|
$ |
1,427,658 |
|
Uninsured deposits (adjusted) (2) |
$ |
705,727 |
|
$ |
794,407 |
|
$ |
883,351 |
|
$ |
792,067 |
|
$ |
749,141 |
|
_________________________
(1) |
|
Uninsured deposits of Kearny Bank. |
(2) |
|
Uninsured deposits of Kearny Bank adjusted to exclude deposits of
its wholly-owned subsidiary and holding company and collateralized
deposits of state and local governments. |
|
Kearny Financial Corp.Consolidated
Statements of Income(Unaudited) |
|
|
Three Months Ended |
(Dollars and Shares in Thousands,Except Per Share Data) |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
March 31,2022 |
Interest income |
|
|
|
|
|
Loans |
$ |
60,172 |
|
$ |
57,996 |
|
$ |
52,935 |
|
$ |
48,869 |
|
$ |
45,846 |
|
Taxable investment securities |
|
15,459 |
|
|
13,221 |
|
|
10,439 |
|
|
8,915 |
|
|
8,024 |
|
Tax-exempt investment securities |
|
99 |
|
|
219 |
|
|
285 |
|
|
297 |
|
|
316 |
|
Other interest-earning assets |
|
1,441 |
|
|
1,005 |
|
|
761 |
|
|
472 |
|
|
415 |
|
Total interest income |
|
77,171 |
|
|
72,441 |
|
|
64,420 |
|
|
58,553 |
|
|
54,601 |
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
Deposits |
|
22,246 |
|
|
18,822 |
|
|
10,869 |
|
|
3,915 |
|
|
3,565 |
|
Borrowings |
|
12,554 |
|
|
8,836 |
|
|
5,020 |
|
|
4,039 |
|
|
3,309 |
|
Total interest expense |
|
34,800 |
|
|
27,658 |
|
|
15,889 |
|
|
7,954 |
|
|
6,874 |
|
Net interest income |
|
42,371 |
|
|
44,783 |
|
|
48,531 |
|
|
50,599 |
|
|
47,727 |
|
Provision for (reversal of)
credit losses |
|
451 |
|
|
1,671 |
|
|
670 |
|
|
4,222 |
|
|
(3,920 |
) |
Net interest income after provision for (reversal of)
credit losses |
|
41,920 |
|
|
43,112 |
|
|
47,861 |
|
|
46,377 |
|
|
51,647 |
|
|
|
|
|
|
|
Non-interest
income |
|
|
|
|
|
Fees and service charges |
|
910 |
|
|
734 |
|
|
763 |
|
|
658 |
|
|
617 |
|
(Loss) gain on sale and call of securities |
|
— |
|
|
(15,227 |
) |
|
— |
|
|
(563 |
) |
|
3 |
|
(Loss) gain on sale of loans |
|
(2,373 |
) |
|
134 |
|
|
395 |
|
|
187 |
|
|
376 |
|
(Loss) gain on sale of other real estate owned |
|
— |
|
|
— |
|
|
— |
|
|
(9 |
) |
|
14 |
|
Income from bank owned life insurance |
|
1,581 |
|
|
1,761 |
|
|
3,698 |
|
|
1,533 |
|
|
1,511 |
|
Electronic banking fees and charges |
|
457 |
|
|
397 |
|
|
506 |
|
|
366 |
|
|
432 |
|
Other income |
|
1,071 |
|
|
3,723 |
|
|
555 |
|
|
638 |
|
|
238 |
|
Total non-interest income |
|
1,646 |
|
|
(8,478 |
) |
|
5,917 |
|
|
2,810 |
|
|
3,191 |
|
|
|
|
|
|
|
Non-interest
expense |
|
|
|
|
|
Salaries and employee benefits |
|
18,005 |
|
|
19,921 |
|
|
20,348 |
|
|
20,367 |
|
|
19,184 |
|
Net occupancy expense of premises |
|
3,097 |
|
|
2,987 |
|
|
3,090 |
|
|
3,188 |
|
|
3,223 |
|
Equipment and systems |
|
3,537 |
|
|
3,867 |
|
|
3,662 |
|
|
4,516 |
|
|
3,822 |
|
Advertising and marketing |
|
413 |
|
|
731 |
|
|
747 |
|
|
703 |
|
|
516 |
|
Federal deposit insurance premium |
|
1,546 |
|
|
1,226 |
|
|
906 |
|
|
762 |
|
|
480 |
|
Directors' compensation |
|
340 |
|
|
339 |
|
|
340 |
|
|
340 |
|
|
340 |
|
Other expense |
|
3,414 |
|
|
3,579 |
|
|
2,895 |
|
|
3,736 |
|
|
3,058 |
|
Total non-interest expense |
|
30,352 |
|
|
32,650 |
|
|
31,988 |
|
|
33,612 |
|
|
30,623 |
|
Income before income taxes |
|
13,214 |
|
|
1,984 |
|
|
21,790 |
|
|
15,575 |
|
|
24,215 |
|
Income taxes |
|
2,902 |
|
|
33 |
|
|
5,255 |
|
|
4,205 |
|
|
6,522 |
|
Net income |
$ |
10,312 |
|
$ |
1,951 |
|
$ |
16,535 |
|
$ |
11,370 |
|
$ |
17,693 |
|
|
|
|
|
|
|
Net income per common
share (EPS) |
|
|
|
|
|
Basic |
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.25 |
|
Diluted |
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.25 |
|
|
|
|
|
|
|
Dividends
declared |
|
|
|
|
|
Cash dividends declared per common share |
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
$ |
0.11 |
|
Cash dividends declared |
$ |
7,196 |
|
$ |
7,172 |
|
$ |
7,276 |
|
$ |
7,441 |
|
$ |
7,720 |
|
Dividend payout ratio |
|
69.8 |
% |
|
367.6 |
% |
|
44.0 |
% |
|
65.4 |
% |
|
43.6 |
% |
|
|
|
|
|
|
Weighted average
number of common shares outstanding |
|
|
|
|
|
Basic |
|
64,769 |
|
|
65,030 |
|
|
65,737 |
|
|
67,240 |
|
|
69,790 |
|
Diluted |
|
64,783 |
|
|
65,038 |
|
|
65,756 |
|
|
67,276 |
|
|
69,817 |
|
|
Kearny Financial Corp.Average Balance
Sheet Data(Unaudited) |
|
|
Three Months Ended |
(Dollars in Thousands) |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
March 31,2022 |
Assets |
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
Loans receivable, including loans held-for-sale |
$ |
5,986,669 |
|
$ |
5,839,903 |
|
$ |
5,553,996 |
|
$ |
5,181,983 |
|
$ |
4,850,236 |
|
Taxable investment securities |
|
1,558,222 |
|
|
1,527,578 |
|
|
1,516,974 |
|
|
1,608,372 |
|
|
1,620,996 |
|
Tax-exempt investment securities |
|
17,663 |
|
|
37,917 |
|
|
48,973 |
|
|
51,672 |
|
|
55,390 |
|
Other interest-earning assets |
|
131,682 |
|
|
114,175 |
|
|
88,038 |
|
|
87,990 |
|
|
79,644 |
|
Total interest-earning assets |
|
7,694,236 |
|
|
7,519,573 |
|
|
7,207,981 |
|
|
6,930,017 |
|
|
6,606,266 |
|
Non-interest-earning
assets |
|
575,009 |
|
|
550,519 |
|
|
570,225 |
|
|
564,734 |
|
|
601,684 |
|
Total assets |
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
7,778,206 |
|
$ |
7,494,751 |
|
$ |
7,207,950 |
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Interest-bearing demand |
$ |
2,363,762 |
|
$ |
2,359,977 |
|
$ |
2,354,340 |
|
$ |
2,155,946 |
|
$ |
2,133,977 |
|
Savings |
|
858,673 |
|
|
931,584 |
|
|
1,019,343 |
|
|
1,077,631 |
|
|
1,088,351 |
|
Certificates of deposit |
|
2,069,396 |
|
|
2,192,722 |
|
|
2,014,922 |
|
|
1,701,725 |
|
|
1,650,048 |
|
Total interest-bearing deposits |
|
5,291,831 |
|
|
5,484,283 |
|
|
5,388,605 |
|
|
4,935,302 |
|
|
4,872,376 |
|
Borrowings: |
|
|
|
|
|
Federal Home Loan Bank advances |
|
1,402,269 |
|
|
997,148 |
|
|
642,399 |
|
|
752,579 |
|
|
632,811 |
|
Other borrowings |
|
1,611 |
|
|
— |
|
|
127,456 |
|
|
185,901 |
|
|
51,667 |
|
Total borrowings |
|
1,403,880 |
|
|
997,148 |
|
|
769,855 |
|
|
938,480 |
|
|
684,478 |
|
Total interest-bearing liabilities |
|
6,695,711 |
|
|
6,481,431 |
|
|
6,158,460 |
|
|
5,873,782 |
|
|
5,556,854 |
|
Non-interest-bearing
liabilities: |
|
|
|
|
|
Non-interest-bearing deposits |
|
634,324 |
|
|
666,846 |
|
|
667,624 |
|
|
640,200 |
|
|
624,152 |
|
Other non-interest-bearing liabilities |
|
60,327 |
|
|
56,721 |
|
|
56,431 |
|
|
56,636 |
|
|
49,455 |
|
Total non-interest-bearing liabilities |
|
694,651 |
|
|
723,567 |
|
|
724,055 |
|
|
696,836 |
|
|
673,607 |
|
Total liabilities |
|
7,390,362 |
|
|
7,204,998 |
|
|
6,882,515 |
|
|
6,570,618 |
|
|
6,230,461 |
|
Stockholders' equity |
|
878,883 |
|
|
865,094 |
|
|
895,691 |
|
|
924,133 |
|
|
977,489 |
|
Total liabilities and stockholders' equity |
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
7,778,206 |
|
$ |
7,494,751 |
|
$ |
7,207,950 |
|
|
|
|
|
|
|
Average interest-earning
assets to average interest-bearing liabilities |
|
114.91 |
% |
|
116.02 |
% |
|
117.04 |
% |
|
117.98 |
% |
|
118.89 |
% |
|
|
Kearny
Financial Corp.Performance Ratio
Highlights |
|
|
|
Three Months Ended |
|
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
March 31,2022 |
Average yield on interest-earning assets: |
|
|
|
|
|
Loans receivable, including loans held-for-sale |
4.02 |
% |
3.97 |
% |
3.81 |
% |
3.77 |
% |
3.78 |
% |
Taxable investment securities |
3.97 |
% |
3.46 |
% |
2.75 |
% |
2.22 |
% |
1.98 |
% |
Tax-exempt investment securities (1) |
2.23 |
% |
2.32 |
% |
2.33 |
% |
2.30 |
% |
2.28 |
% |
Other interest-earning assets |
4.38 |
% |
3.52 |
% |
3.46 |
% |
2.15 |
% |
2.08 |
% |
Total interest-earning assets |
4.01 |
% |
3.85 |
% |
3.57 |
% |
3.38 |
% |
3.31 |
% |
|
|
|
|
|
|
Average cost of
interest-bearing liabilities: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Interest-bearing demand |
2.01 |
% |
1.63 |
% |
0.92 |
% |
0.31 |
% |
0.22 |
% |
Savings |
0.41 |
% |
0.41 |
% |
0.23 |
% |
0.11 |
% |
0.10 |
% |
Certificates of deposit |
1.84 |
% |
1.50 |
% |
0.97 |
% |
0.46 |
% |
0.52 |
% |
Total interest-bearing deposits |
1.68 |
% |
1.37 |
% |
0.81 |
% |
0.32 |
% |
0.29 |
% |
Borrowings: |
|
|
|
|
|
Federal Home Loan Bank advances |
3.58 |
% |
3.54 |
% |
2.68 |
% |
1.96 |
% |
2.08 |
% |
Other borrowings |
5.15 |
% |
— |
% |
2.26 |
% |
0.77 |
% |
0.17 |
% |
Total borrowings |
3.58 |
% |
3.54 |
% |
2.61 |
% |
1.72 |
% |
1.93 |
% |
Total interest-bearing liabilities |
2.08 |
% |
1.71 |
% |
1.03 |
% |
0.54 |
% |
0.49 |
% |
|
|
|
|
|
|
Interest rate spread (2) |
1.93 |
% |
2.14 |
% |
2.54 |
% |
2.84 |
% |
2.82 |
% |
Net interest margin (3) |
2.20 |
% |
2.38 |
% |
2.69 |
% |
2.92 |
% |
2.89 |
% |
|
|
|
|
|
|
Non-interest income to average assets (annualized) |
0.08 |
% |
-0.42 |
% |
0.30 |
% |
0.15 |
% |
0.18 |
% |
Non-interest expense to average assets (annualized) |
1.47 |
% |
1.62 |
% |
1.65 |
% |
1.79 |
% |
1.70 |
% |
|
|
|
|
|
|
Efficiency ratio (4) |
68.96 |
% |
89.93 |
% |
58.75 |
% |
62.93 |
% |
60.14 |
% |
|
|
|
|
|
|
Return on average assets (annualized) |
0.50 |
% |
0.10 |
% |
0.85 |
% |
0.61 |
% |
0.98 |
% |
Return on average equity (annualized) |
4.69 |
% |
0.90 |
% |
7.38 |
% |
4.92 |
% |
7.24 |
% |
Return on average tangible equity (annualized) (5) |
6.20 |
% |
1.20 |
% |
9.70 |
% |
6.40 |
% |
9.27 |
% |
_________________________
(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 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
March 31,2022 |
Adjusted net income: |
|
|
|
|
|
Net income (GAAP) |
$ |
10,312 |
|
$ |
1,951 |
|
$ |
16,535 |
|
$ |
11,370 |
|
$ |
17,693 |
|
Non-recurring transactions - net of tax: |
|
|
|
|
|
Branch consolidation expenses |
|
568 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Net effect of sale and call of securities |
|
— |
|
|
10,811 |
|
|
— |
|
|
400 |
|
|
(2 |
) |
Net effect of sale of other assets |
|
— |
|
|
(2,081 |
) |
|
— |
|
|
— |
|
|
— |
|
Severance expense from workforce realignment |
|
— |
|
|
538 |
|
|
— |
|
|
— |
|
|
— |
|
Early contract termination |
|
— |
|
|
— |
|
|
— |
|
|
568 |
|
|
— |
|
Adjusted net income |
$ |
10,880 |
|
$ |
11,219 |
|
$ |
16,535 |
|
$ |
12,338 |
|
$ |
17,691 |
|
|
|
|
|
|
|
Calculation of
pre-tax, pre-provision net revenue: |
|
|
|
|
|
Net income (GAAP) |
$ |
10,312 |
|
$ |
1,951 |
|
$ |
16,535 |
|
$ |
11,370 |
|
$ |
17,693 |
|
Adjustments to net income (GAAP): |
|
|
|
|
|
Provision for income taxes |
|
2,902 |
|
|
33 |
|
|
5,255 |
|
|
4,205 |
|
|
6,522 |
|
Provision for (reversal of) credit losses |
|
451 |
|
|
1,671 |
|
|
670 |
|
|
4,222 |
|
|
(3,920 |
) |
Pre-tax, pre-provision net revenue (non-GAAP) |
$ |
13,665 |
|
$ |
3,655 |
|
$ |
22,460 |
|
$ |
19,797 |
|
$ |
20,295 |
|
|
|
|
|
|
|
Adjusted earnings per
share: |
|
|
|
|
|
Weighted average common shares - basic |
|
64,769 |
|
|
65,030 |
|
|
65,737 |
|
|
67,240 |
|
|
69,790 |
|
Weighted average common shares - diluted |
|
64,783 |
|
|
65,038 |
|
|
65,756 |
|
|
67,276 |
|
|
69,817 |
|
|
|
|
|
|
|
Earnings per share - basic (GAAP) |
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.25 |
|
Earnings per share - diluted (GAAP) |
$ |
0.16 |
|
$ |
0.03 |
|
$ |
0.25 |
|
$ |
0.17 |
|
$ |
0.25 |
|
|
|
|
|
|
|
Adjusted earnings per share - basic (non-GAAP) |
$ |
0.17 |
|
$ |
0.17 |
|
$ |
0.25 |
|
$ |
0.18 |
|
$ |
0.25 |
|
Adjusted earnings per share - diluted (non-GAAP) |
$ |
0.17 |
|
$ |
0.17 |
|
$ |
0.25 |
|
$ |
0.18 |
|
$ |
0.25 |
|
|
|
|
|
|
|
Pre-tax, pre-provision
net revenue per share: |
|
|
|
|
|
Pre-tax, pre-provision net revenue per share -
basic (non-GAAP) |
$ |
0.21 |
|
$ |
0.06 |
|
$ |
0.34 |
|
$ |
0.29 |
|
$ |
0.29 |
|
Pre-tax, pre-provision net revenue per share -
diluted (non-GAAP) |
$ |
0.21 |
|
$ |
0.06 |
|
$ |
0.34 |
|
$ |
0.29 |
|
$ |
0.29 |
|
|
|
|
|
|
|
Adjusted return on
average assets: |
|
|
|
|
|
Total average assets |
$ |
8,269,245 |
|
$ |
8,070,092 |
|
$ |
7,778,206 |
|
$ |
7,494,751 |
|
$ |
7,207,950 |
|
|
|
|
|
|
|
Return on average assets (GAAP) |
|
0.50 |
% |
|
0.10 |
% |
|
0.85 |
% |
|
0.61 |
% |
|
0.98 |
% |
Adjusted return on average assets (non-GAAP) |
|
0.53 |
% |
|
0.56 |
% |
|
0.85 |
% |
|
0.66 |
% |
|
0.98 |
% |
|
|
|
|
|
|
Adjusted return on
average equity: |
|
|
|
|
|
Total average equity |
$ |
878,883 |
|
$ |
865,094 |
|
$ |
895,691 |
|
$ |
924,133 |
|
$ |
977,489 |
|
|
|
|
|
|
|
Return on average equity (GAAP) |
|
4.69 |
% |
|
0.90 |
% |
|
7.38 |
% |
|
4.92 |
% |
|
7.24 |
% |
Adjusted return on average equity (non-GAAP) |
|
4.95 |
% |
|
5.19 |
% |
|
7.38 |
% |
|
5.34 |
% |
|
7.24 |
% |
|
Kearny Financial Corp.Reconciliation of
GAAP to Non-GAAP(Unaudited) |
|
|
Three Months Ended |
(Dollars and Shares in Thousands,Except Per Share Data) |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
March 31,2022 |
Adjusted return on average tangible equity: |
|
|
|
|
|
Total average equity |
$ |
878,883 |
|
$ |
865,094 |
|
$ |
895,691 |
|
$ |
924,133 |
|
$ |
977,489 |
|
Less: average goodwill |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
|
(210,895 |
) |
Less: average other intangible
assets |
|
(2,683 |
) |
|
(2,826 |
) |
|
(2,971 |
) |
|
(3,116 |
) |
|
(3,282 |
) |
Total average tangible
equity |
$ |
665,305 |
|
$ |
651,373 |
|
$ |
681,825 |
|
$ |
710,122 |
|
$ |
763,312 |
|
|
|
|
|
|
|
Return on average tangible
equity (non-GAAP) |
|
6.20 |
% |
|
1.20 |
% |
|
9.70 |
% |
|
6.40 |
% |
|
9.27 |
% |
Adjusted return on average
tangible equity (non-GAAP) |
|
6.54 |
% |
|
6.89 |
% |
|
9.70 |
% |
|
6.95 |
% |
|
9.27 |
% |
|
|
|
|
|
|
Adjusted non-interest
expense ratio: |
|
|
|
|
|
Non-interest expense
(GAAP) |
$ |
30,352 |
|
$ |
32,650 |
|
$ |
31,988 |
|
$ |
33,612 |
|
$ |
30,623 |
|
Non-recurring
transactions: |
|
|
|
|
|
Branch consolidation
expenses |
|
(800 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Severance expense from
workforce realignment |
|
— |
|
|
(757 |
) |
|
— |
|
|
— |
|
|
— |
|
Early contract
termination |
|
— |
|
|
— |
|
|
— |
|
|
(800 |
) |
|
— |
|
Non-interest expense
(non-GAAP) |
$ |
29,552 |
|
$ |
31,893 |
|
$ |
31,988 |
|
$ |
32,812 |
|
$ |
30,623 |
|
|
|
|
|
|
|
Non-interest expense ratio
(GAAP) |
|
1.47 |
% |
|
1.62 |
% |
|
1.65 |
% |
|
1.79 |
% |
|
1.70 |
% |
Adjusted non-interest expense
ratio (non-GAAP) |
|
1.43 |
% |
|
1.58 |
% |
|
1.65 |
% |
|
1.75 |
% |
|
1.70 |
% |
|
|
|
|
|
|
Adjusted efficiency
ratio: |
|
|
|
|
|
Non-interest expense
(non-GAAP) |
$ |
29,552 |
|
$ |
31,893 |
|
$ |
31,988 |
|
$ |
32,812 |
|
$ |
30,623 |
|
|
|
|
|
|
|
Net interest income
(GAAP) |
$ |
42,371 |
|
$ |
44,783 |
|
$ |
48,531 |
|
$ |
50,599 |
|
$ |
47,727 |
|
Total non-interest income
(GAAP) |
|
1,646 |
|
|
(8,478 |
) |
|
5,917 |
|
|
2,810 |
|
|
3,191 |
|
Non-recurring
transactions: |
|
|
|
|
|
Net effect of sale and call of
securities |
|
— |
|
|
15,227 |
|
|
— |
|
|
563 |
|
|
(3 |
) |
Net effect of sale of other
assets |
|
— |
|
|
(2,931 |
) |
|
— |
|
|
— |
|
|
— |
|
Total revenue (non-GAAP) |
$ |
44,017 |
|
$ |
48,601 |
|
$ |
54,448 |
|
$ |
53,972 |
|
$ |
50,915 |
|
|
|
|
|
|
|
Efficiency ratio (GAAP) |
|
68.96 |
% |
|
89.93 |
% |
|
58.75 |
% |
|
62.93 |
% |
|
60.14 |
% |
Adjusted efficiency ratio
(non-GAAP) |
|
67.14 |
% |
|
65.62 |
% |
|
58.75 |
% |
|
60.79 |
% |
|
60.15 |
% |
For further information contact:Craig L. Montanaro, President
and Chief Executive Officer, orKeith Suchodolski, Senior Executive
Vice President and Chief Financial OfficerKearny Financial
Corp.(973) 244-4500
Kearny Financial (NASDAQ:KRNY)
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