FAIRFIELD, N.J., April 25, 2024 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the "Company"), the holding company of Kearny Bank (the "Bank"), reported net income for the quarter ended March 31, 2024 of $7.4 million, or $0.12 per diluted share, compared to a net loss of $13.8 million, or $0.22 per diluted share, for the quarter ended December 31, 2023. The net loss for the quarter ended December 31, 2023 was impacted by various non-recurring items, as previously disclosed. The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on May 22, 2024, to stockholders of record as of May 8, 2024. Craig L. Montanaro, President and Chief Executive Officer, commented, "Once again uncertainty remains on the forefront of conversations taking place on Main Street and on Wall Street. As a company we manage through such challenging periods by staying true to our guiding principles, which have endured since our founding 140 years ago this month: prudent risk management, conservative posturing and an unwavering commitment to our depositors, borrowers, employees and communities." Mr. Montanaro continued, "Despite the media speculation surrounding commercial real estate lending in general, and multifamily lending specifically, we maintain a low loan-to-value, low-vacancy, well-diversified commercial loan portfolio with a long history of outstanding credit performance. We subject each loan to intense scrutiny at underwriting, and on an ongoing basis, and maintain peer-leading levels of commercial loan allowance coverage and regulatory capital, as represented by our 14.7% Common Equity Tier 1 capital ratio." Balance Sheet Total assets were $7.84 billion at March 31, 2024, a decrease of $55.9 million, or 0.7%, from December 31, 2023. Investment securities totaled $1.24 billion at March 31, 2024, a decrease of $47.8 million, or 3.7%, from December 31, 2023. Loans receivable totaled $5.76 billion at March 31, 2024, an increase of $12.7 million, or 0.2%, from December 31, 2023. Bank-owned life insurance ("BOLI") totaled $296.5 million at March 31, 2024, an increase of $40.4 million, or 15.8%, from December 31, 2023. The increase for the quarter was largely attributable to the completion of the BOLI restructure initiated in the prior comparative period. Deposits were $5.21 billion at March 31, 2024, a decrease of $110.6 million, or 2.1%, from December 31, 2023. Excluding a decrease of $50.2 million in brokered certificates of deposits, deposits decreased $60.4 million, or 1.2%, from December 31, 2023. This decrease in non-brokered deposits was driven by a $48.4 million decline in retail certificates of deposits and a $15.7 million decline in consumer savings deposits, partially offset by growth in other deposit categories. Borrowings were $1.72 billion at March 31, 2024, an increase of $55.1 million, or 3.3%, from December 31, 2023. At March 31, 2024, the Company maintained available secured borrowing capacity of $1.81 billion, of which $1.47 billion was immediately accessible via in-place collateral and $336.7 million represented the market value of unpledged securities. Earnings Net Interest Income and Net Interest Margin Net interest margin contracted 5 basis point to 1.89% for the quarter ended March 31, 2024. The decrease for the quarter was driven by an increase in the cost of interest-bearing deposits and a decrease in the average balance of interest-earning assets, partially offset by a higher yield on interest-earning assets and a decrease in the cost of interest-bearing borrowings. For the quarter ended March 31, 2024, net interest income decreased $1.5 million to $34.3 million from $35.8 million for the quarter ended December 31, 2023. Included in net interest income for the quarters ended March 31, 2024 and December 31, 2023, respectively, was purchase accounting accretion of $734,000 and $640,000, and loan prepayment penalty income of $61,000 and $185,000. Non-Interest Income Non-interest income increased $20.2 million to income of $4.2 million for the quarter ended March 31, 2024, from a loss of $16.0 million for the quarter ended December 31, 2023. The increase was primarily attributable to a pre-tax loss of $18.1 million related to the investment securities portfolio repositioning executed during the prior comparative period. Income from BOLI increased $1.8 million to $3.0 million for the quarter ended March 31, 2024 from $1.2 million for the quarter ended December 31, 2023. BOLI income included a $631,000 non-recurring payment on one life insurance policy in the current period, while BOLI income was reduced by non-recurring exchange charges of $573,000 in the prior comparative period. Excluding these non-recurring items, BOLI income improved by $673,000 resulting from the previously mentioned BOLI restructure. Loss on sale of loans was $712,000 for the quarter ended March 31, 2024 compared to a gain on sale of loans of $104,000 for the quarter ended December 31, 2023. The loss in the current period was the result of the sale of three related nonperforming commercial real estate loans held-for-sale. Non-Interest Expense For the quarter ended March 31, 2024, non-interest expense decreased $708,000, or 2.4%, to $29.1 million from $29.8 million for the quarter ended December 31, 2023, primarily driven by a decrease in salary and benefits expense and other expense. Salary and benefits expense decreased $371,000 primarily attributable to a non-recurring decrease of $679,000 in stock-based compensation, partially offset by an increase of $374,000 in payroll taxes associated with the start of the new calendar year. Other expense decreased $522,000 primarily driven by a $637,000 decrease in OREO expense following the sale of the Company's sole OREO asset, partially offset by an increase of $288,000 in the provision for credit losses on off balance sheet commitments. Income Taxes Income tax expense totaled $1.7 million for the quarter ended March 31, 2024 compared to $1.8 million for the quarter ended December 31, 2023. The decrease in income tax expense was largely due to the discrete tax expense associated with the BOLI restructure recognized in the prior comparative period, partially offset by higher pre-tax income, due primarily to realized losses on the sale of securities in the prior comparative period. Asset Quality The balance of non-performing assets decreased $10.2 million to $39.5 million, or 0.50% of total assets, at March 31, 2024, from $49.8 million, or 0.63% of total assets, at December 31, 2023. This decrease was driven by the January 2024 sale of three related non-performing commercial real estate loans held-for-sale and the Company's sole OREO asset. Net charge-offs totaled $286,000, or 0.02% of average loans, on an annualized basis, for the quarter ended March 31, 2024, compared to $4.1 million, or 0.29% of average loans, on an annualized basis, for the quarter ended December 31, 2023. For the quarter ended March 31, 2024, the Company recorded a provision for credit losses of $349,000, compared to $2.1 million for the quarter ended December 31, 2023. The provision for credit loss expense for the quarter ended March 31, 2024 was primarily driven by loan growth. The allowance for credit losses ("ACL") was $44.9 million, or 0.78% of total loans, at March 31, 2024 and unchanged from December 31, 2023. Capital For the quarter ended March 31, 2024, book value per share increased $0.02, or 0.2%, to $13.18 while tangible book value per share increased $0.02, or 0.2%, to $9.87. At March 31, 2024, total stockholders' equity included after-tax net unrealized losses on securities available for sale of $95.0 million, partially offset by after-tax unrealized gains on derivatives of $31.3 million. After-tax net unrecognized losses on securities held to maturity of $11.4 million were not reflected in total stockholders' equity. At March 31, 2024, the Company's tangible equity to tangible assets ratio equaled 8.34% and the regulatory capital ratios of both the Company and the Bank were in excess of the levels required by federal banking regulators to be classified as "well-capitalized" under regulatory guidelines. This earnings release should be read in conjunction with Kearny Financial Corp.'s Q3 2024 Investor Presentation, a copy of which is available through the Investor Relations link located at the bottom of the page of our website at www.kearnybank.com and via a Current Report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov. Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company. Category: Earnings Linked-Quarter Comparative Financial Analysis   Kearny Financial Corp.Consolidated Balance Sheets(Unaudited)   (Dollars and Shares in Thousands,Except Per Share Data) March 31,2024 December 31,2023 Varianceor Change Varianceor Change Pct. Assets         Cash and cash equivalents $ 71,027   $ 73,860   $ (2,833 )   -3.8 % Securities available for sale   1,098,655     1,144,175     (45,520 )   -4.0 % Securities held to maturity   139,643     141,959     (2,316 )   -1.6 % Loans held-for-sale   4,117     14,030     (9,913 )   -70.7 % Loans receivable   5,758,336     5,745,629     12,707     0.2 % Less: allowance for credit losses on loans   (44,930 )   (44,867 )   63     0.1 % Net loans receivable   5,713,406     5,700,762     12,644     0.2 % Premises and equipment   45,053     45,928     (875 )   -1.9 % Federal Home Loan Bank stock   81,347     83,372     (2,025 )   -2.4 % Accrued interest receivable   31,065     30,258     807     2.7 % Goodwill   210,895     210,895     —     — % Core deposit intangible   2,057     2,189     (132 )   -6.0 % Bank owned life insurance   296,493     256,064     40,429     15.8 % Deferred income taxes, net   47,225     46,116     1,109     2.4 % Other real estate owned   —     11,982     (11,982 )   -100.0 % Other assets   100,989     136,242     (35,253 )   -25.9 % Total assets $ 7,841,972   $ 7,897,832   $ (55,860 )   -0.7 %           Liabilities         Deposits:         Non-interest-bearing $ 586,089   $ 584,130   $ 1,959     0.3 % Interest-bearing   4,622,961     4,735,500     (112,539 )   -2.4 % Total deposits   5,209,050     5,319,630     (110,580 )   -2.1 % Borrowings   1,722,178     1,667,055     55,123     3.3 % Advance payments by borrowers for taxes   17,387     16,742     645     3.9 % Other liabilities   44,279     46,427     (2,148 )   -4.6 % Total liabilities   6,992,894     7,049,854     (56,960 )   -0.8 %           Stockholders' Equity         Common stock   644     645     (1 )   -0.2 % Paid-in capital   493,187     493,297     (110 )   — % Retained earnings   440,308     439,755     553     0.1 % Unearned ESOP shares   (21,402 )   (21,889 )   487     2.2 % Accumulated other comprehensive loss   (63,659 )   (63,830 )   171     0.3 % Total stockholders' equity   849,078     847,978     1,100     0.1 % Total liabilities and stockholders' equity $ 7,841,972   $ 7,897,832   $ (55,860 )   -0.7 %           Consolidated capital ratios         Equity to assets   10.83 %   10.74 %   0.09 %   Tangible equity to tangible assets(1)   8.34 %   8.26 %   0.08 %             Share data         Outstanding shares   64,437     64,445     (8 )   — % Book value per share $ 13.18   $ 13.16   $ 0.02     0.2 % Tangible book value per share(2) $ 9.87   $ 9.85   $ 0.02     0.2 % ___________________ (1) Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. (2) Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Kearny Financial Corp.Consolidated Statements of Income (Loss)(Unaudited)   (Dollars and Shares in Thousands,Except Per Share Data) Three Months Ended Varianceor Change Variance or Change Pct. March 31,2024 December 31,2023 Interest income         Loans $ 64,035   $ 63,384   $ 651     1.0 % Taxable investment securities   15,490     16,756     (1,266 )   -7.6 % Tax-exempt investment securities   85     84     1     1.2 % Other interest-earning assets   2,475     2,401     74     3.1 % Total interest income   82,085     82,625     (540 )   -0.7 %           Interest expense         Deposits   32,320     30,340     1,980     6.5 % Borrowings   15,446     16,446     (1,000 )   -6.1 % Total interest expense   47,766     46,786     980     2.1 % Net interest income   34,319     35,839     (1,520 )   -4.2 % Provision for credit losses   349     2,105     (1,756 )   -83.4 % Net interest income after provision for credit losses   33,970     33,734     236     0.7 %           Non-interest income         Fees and service charges   657     624     33     5.3 % Loss on sale and call of securities   —     (18,135 )   18,135     100.0 % (Loss) gain on sale of loans   (712 )   104     (816 )   -784.6 % Loss on other real estate owned   —     (974 )   974     100.0 % Income from bank owned life insurance   3,039     1,162     1,877     161.5 % Electronic banking fees and charges   464     396     68     17.2 % Other income   755     811     (56 )   -6.9 % Total non-interest income   4,203     (16,012 )   20,215     126.2 %           Non-interest expense         Salaries and employee benefits   16,911     17,282     (371 )   -2.1 % Net occupancy expense of premises   2,863     2,674     189     7.1 % Equipment and systems   3,823     3,814     9     0.2 % Advertising and marketing   387     301     86     28.6 % Federal deposit insurance premium   1,429     1,495     (66 )   -4.4 % Directors' compensation   360     393     (33 )   -8.4 % Other expense   3,286     3,808     (522 )   -13.7 % Total non-interest expense   29,059     29,767     (708 )   -2.4 % Income (loss) before income taxes   9,114     (12,045 )   21,159     175.7 % Income taxes   1,717     1,782     (65 )   -3.6 % Net income (loss) $ 7,397   $ (13,827 ) $ 21,224     153.5 %           Net income (loss) per common share (EPS)         Basic $ 0.12   $ (0.22 ) $ 0.34     Diluted $ 0.12   $ (0.22 ) $ 0.34               Dividends declared         Cash dividends declared per common share $ 0.11   $ 0.11   $ —     Cash dividends declared $ 6,844   $ 6,882   $ (38 )   Dividend payout ratio   92.5 %   -49.8 %   142.3 %             Weighted average number of common shares outstanding         Basic   62,205     62,299     (94 )   Diluted   62,211     62,367     (156 )   Kearny Financial Corp.Average Balance Sheet Data(Unaudited)   (Dollars in Thousands) Three Months Ended Varianceor Change Varianceor Change Pct. March 31,2024 December 31,2023 Assets         Interest-earning assets:         Loans receivable, including loans held for sale $ 5,752,477   $ 5,726,321   $ 26,156     0.5 % Taxable investment securities   1,382,064     1,509,165     (127,101 )   -8.4 % Tax-exempt investment securities   14,614     15,025     (411 )   -2.7 % Other interest-earning assets   125,155     139,740     (14,585 )   -10.4 % Total interest-earning assets   7,274,310     7,390,251     (115,941 )   -1.6 % Non-interest-earning assets   577,411     554,335     23,076     4.2 % Total assets $ 7,851,721   $ 7,944,586   $ (92,865 )   -1.2 %           Liabilities and Stockholders' Equity         Interest-bearing liabilities:         Deposits:         Interest-bearing demand $ 2,378,831   $ 2,301,169   $ 77,662     3.4 % Savings   635,226     664,926     (29,700 )   -4.5 % Certificates of deposit   1,705,513     1,824,316     (118,803 )   -6.5 % Total interest-bearing deposits   4,719,570     4,790,411     (70,841 )   -1.5 % Borrowings:         Federal Home Loan Bank advances   1,428,801     1,513,497     (84,696 )   -5.6 % Other borrowings   210,989     142,283     68,706     48.3 % Total borrowings   1,639,790     1,655,780     (15,990 )   -1.0 % Total interest-bearing liabilities   6,359,360     6,446,191     (86,831 )   -1.3 % Non-interest-bearing liabilities:         Non-interest-bearing deposits   581,870     597,294     (15,424 )   -2.6 % Other non-interest-bearing liabilities   65,709     62,387     3,322     5.3 % Total non-interest-bearing liabilities   647,579     659,681     (12,102 )   -1.8 % Total liabilities   7,006,939     7,105,872     (98,933 )   -1.4 % Stockholders' equity   844,782     838,714     6,068     0.7 % Total liabilities and stockholders' equity $ 7,851,721   $ 7,944,586   $ (92,865 )   -1.2 %           Average interest-earning assets to average interest-bearing liabilities   114.39 %   114.65 %   -0.26 %   -0.2 % Kearny Financial Corp.Performance Ratio Highlights(Unaudited)     Three Months Ended Varianceor Change   March 31,2024 December 31,2023 Average yield on interest-earning assets:       Loans receivable, including loans held for sale   4.45 %   4.43 %   0.02 % Taxable investment securities   4.48 %   4.44 %   0.04 % Tax-exempt investment securities(1)   2.32 %   2.25 %   0.07 % Other interest-earning assets   7.91 %   6.87 %   1.04 % Total interest-earning assets   4.51 %   4.47 %   0.04 %         Average cost of interest-bearing liabilities:       Deposits:       Interest-bearing demand   3.08 %   2.91 %   0.17 % Savings   0.46 %   0.44 %   0.02 % Certificates of deposit   3.11 %   2.82 %   0.29 % Total interest-bearing deposits   2.74 %   2.53 %   0.21 % Borrowings:       Federal Home Loan Bank advances   3.55 %   3.82 %   -0.27 % Other borrowings   5.22 %   5.65 %   -0.43 % Total borrowings   3.77 %   3.97 %   -0.20 % Total interest-bearing liabilities   3.00 %   2.90 %   0.10 %         Interest rate spread(2)   1.51 %   1.57 %