Kearny Financial Corp. Announces Second Quarter Fiscal 2025 Results and Declaration of Cash Dividend

Kearny Financial Corp. Announces Second Quarter Fiscal 2025 Results and Declaration of Cash Dividend FAIRFIELD, N.J., Jan. 30, 2025 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported net income for the quarter ended December 31, 2024 of $6.6 million, compared to $6.1 million for the quarter ended September 30, 2024. Earnings per basic and diluted share were $0.11 and $0.10, respectively, for the quarter ended December 31, 2024. This compares to earnings per basic and diluted share of $0.10 for the quarter ended September 30, 2024. The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on February 26, 2025, to stockholders of record as of February 12, 2025. Craig L. Montanaro, President and Chief Executive Officer, commented, “As anticipated, this quarter reflected the early stages of growth in net interest income and expansion of net interest margin. We are pleased to report growth in deposits of 3.7% from September 30, 2024, reflecting robust performance from our branch network, digital channels and commercial lending relationships. This growth allowed us to shrink the balance of outstanding borrowings while reducing our cost of funds by nine basis points quarter-over-quarter.” Mr. Montanaro continued, “Although market expectations for fed funds rate cuts have moderated, the continuation of positive deposit trends coupled with the reinvestment of low-coupon cash flows from our loan and securities portfolio should serve as earnings tailwinds in the coming quarters.” Balance Sheet Total assets were $7.73 billion at December 31, 2024, a decrease of $41.0 million, or 0.5%, from September 30, 2024. Investment securities totaled $1.15 billion at December 31, 2024, a decrease of $57.5 million, or 4.8%, from September 30, 2024. Loans receivable totaled $5.79 billion at December 31, 2024, an increase of $7.5 million, or 0.1%, from September 30, 2024. Deposits were $5.67 billion at December 31, 2024, an increase of $200.5 million, or 3.7%, from September 30, 2024. This increase was primarily driven by increases in interest and non-interest bearing demand deposits of $142.1 million, and an increase of $60.6 million in consumer savings deposits. Borrowings were $1.26 billion at December 31, 2024, a decrease of $220.9 million, or 14.9%, from September 30, 2024, reflecting reductions in Federal Home Loan Bank (“FHLB”) and other borrowings. At December 31, 2024, the Company maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.32 billion, an increase of $256.0 million from September 30, 2024, representing 30.0% of total assets. Earnings Net Interest Income and Net Interest Margin Net interest margin expanded two basis points from the quarter ended September 30, 2024 to 1.82% for the quarter ended December 31, 2024. The increase for the quarter was driven by the replacement of borrowings with relatively lower cost deposits and broad based decreases in deposit rates, partially offset by higher costs and average balances of brokered certificates of deposit (“CDs”), along with reduced average balances and yields on interest-earning assets. For the quarter ended December 31, 2024, net interest income increased $166,000 to $32.6 million from $32.4 million for the quarter ended September 30, 2024. Included in net interest income for the quarters ended December 31, 2024 and September 30, 2024, respectively, was purchase accounting accretion of $685,000 and $649,000, and loan prepayment penalty income of $288,000 and $52,000. Non-Interest Income Non-interest income increased $247,000 to $4.9 million for the quarter ended December 31, 2024, from $4.6 million for the quarter ended September 30, 2024. This increase was primarily driven by a $104,000 larger gain on the sale of loans held-for-sale compared to the prior comparative period and a $102,000 increase in electronic banking fees and charges. Non-Interest Expense For the quarter ended December 31, 2024, non-interest expense decreased $225,000, or 0.8%, to $29.6 million from $29.8 million for the quarter ended September 30, 2024. This decrease was primarily driven by a decrease in other expense, partially offset by an increase in salary and benefits expense. Salary and benefits expense increased $81,000 primarily driven by the absence of a non-recurring decrease in stock-based compensation recorded in the prior comparative period, partially offset by a decrease in payroll taxes. Other expense decreased $280,000 primarily driven by a reversal of $116,000 for credit losses related to off balance sheet commitments compared to a provision for credit losses on off balance sheet commitments of $274,000 recorded in the prior comparative period. The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items. Income Taxes Income tax expense totaled $1.3 million for the quarter ended December 31, 2024 compared to $1.1 million for the quarter ended September 30, 2024, resulting in an effective tax rate of 16.0% and 15.1%, respectively. The increase in income tax expense was primarily due to higher pre-tax income in the current quarter. Asset Quality The balance of non-performing assets decreased $2.2 million to $37.7 million, or 0.49% of total assets, at December 31, 2024, from $39.9 million, or 0.51% of total assets, at September 30, 2024, respectively. Net charge-offs totaled $573,000, or 0.04% of average loans, on an annualized basis, for the quarter ended December 31, 2024, compared to $124,000, or 0.01% of average loans, on an annualized basis, for the quarter ended September 30, 2024. The net charge-offs recorded for the quarter ended December 31, 2024 had previously been individually reserved for within the allowance for credit losses (“ACL”). For the quarter ended December 31, 2024, the Company recorded a provision for credit losses of $107,000, compared to $108,000 for the quarter ended September 30, 2024. The provision for credit loss expense for the quarter ended December 31, 2024 was primarily driven by loan growth. The ACL was $44.5 million, or 0.77% of total loans, at December 31, 2024, a decrease of $466,000 from $44.9 million, or 0.78% of total loans, at September 30, 2024. The decrease in the ACL from September 30, 2024 was largely attributable to a reduction in reserves for individually evaluated loans, resulting from the charge-offs noted above. Capital For the quarter ended December 31, 2024, book value per share decreased $0.11, or 0.9%, to $11.53 while tangible book value per share decreased $0.10, or 1.0%, to $9.75. These decreases were driven by a $7.4 million larger accumulated other comprehensive loss due primarily to a decrease in the fair value of the Company’s available for sale securities, partially offset by an increase in the fair value of the Company’s derivatives portfolio. At December 31, 2024, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $89.8 million, partially offset by after-tax unrealized gains on derivatives of $17.4 million. After-tax net unrecognized losses on securities held to maturity of $11.3 million were not reflected in total stockholders’ equity. At December 31, 2024, the Company’s tangible equity to tangible assets ratio equaled 8.27% 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 Q2 2025 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 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 Linked-Quarter Comparative Financial Analysis Kearny Financial Corp. Consolidated Balance Sheets (Unaudited) (Dollars and Shares in Thousands, Except Per Share Data) December 31, 2024 September 30, 2024 Variance or Change Variance or Change Pct. Assets Cash and cash equivalents $ 141,554 $ 155,574 $ (14,020 ) -9.0 % Securities available for sale 1,018,279 1,070,811 (52,532 ) -4.9 % Securities held to maturity 127,266 132,256 (4,990 ) -3.8 % Loans held-for-sale 5,695 8,866 (3,171 ) -35.8 % Loans receivable 5,791,758 5,784,246 7,512 0.1 % Less: allowance for credit losses on loans (44,457 ) (44,923 ) (466 ) -1.0 % Net loans receivable 5,747,301 5,739,323 7,978 0.1 % Premises and equipment 45,127 45,189 (62 ) -0.1 % Federal Home Loan Bank stock 64,443 57,706 6,737 11.7 % Accrued interest receivable 27,772 29,467 (1,695 ) -5.8 % Goodwill 113,525 113,525 — — % Core deposit intangible 1,679 1,805 (126 ) -7.0 % Bank owned life insurance 301,339 300,186 1,153 0.4 % Deferred income taxes, net 53,325 50,131 3,194 6.4 % Other assets 84,080 67,540 16,540 24.5 % Total assets $ 7,731,385 $ 7,772,379 $ (40,994 ) -0.5 % Liabilities Deposits: Non-interest-bearing $ 601,510 $ 592,099 $ 9,411 1.6 % Interest-bearing 5,069,550 4,878,413 191,137 3.9 % Total deposits 5,671,060 5,470,512 200,548 3.7 % Borrowings 1,258,949 1,479,888 (220,939 ) -14.9 % Advance payments by borrowers for taxes 17,986 17,824 162 0.9 % Other liabilities 38,537 52,618 (14,081 ) -26.8 % Total liabilities 6,986,532 7,020,842 (34,310 ) -0.5 % Stockholders' Equity Common stock 646 646 — — % Paid-in capital 494,092 493,523 569 0.1 % Retained earnings 342,155 342,522 (367 ) -0.1 % Unearned ESOP shares (19,943 ) (20,430 ) 487 2.4 % Accumulated other comprehensive loss (72,097 ) (64,724 ) (7,373 ) -11.4 % Total stockholders' equity 744,853 751,537 (6,684 ) -0.9 % Total liabilities and stockholders' equity $ 7,731,385 $ 7,772,379 $ (40,994 ) -0.5 % Consolidated capital ratios Equity to assets 9.63 % 9.67 % -0.04 % Tangible equity to tangible assets(1) 8.27 % 8.31 % -0.04 % Share data Outstanding shares 64,580 64,580 — — % Book value per share $ 11.53 $ 11.64 $ (0.11 ) -0.9 % Tangible book value per share(2) $ 9.75 $ 9.85 $ (0.10 ) -1.0 % _________________________ (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. December 31, 2024 September 30, 2024 Interest income Loans $ 65,408 $ 66,331 $ (923 ) -1.4 % Taxable investment securities 13,803 14,384 (581 ) -4.0 % Tax-exempt investment securities 59 71 (12 ) -16.9 % Other interest-earning assets 2,215 2,466 (251 ) -10.2 % Total interest income 81,485 83,252 (1,767 ) -2.1 % Interest expense Deposits 36,721 35,018 1,703 4.9 % Borrowings 12,152 15,788 (3,636 ) -23.0 % Total interest expense 48,873 50,806 (1,933 ) -3.8 % Net interest income 32,612 32,446 166 0.5 % Provision for credit losses 107 108 (1 ) -0.9 % Net interest income after provision for credit losses 32,505 32,338 167 0.5 % Non-interest income Fees and service charges 627 635 (8 ) -1.3 % Gain on sale of loans 304 200 104 52.0 % Income from bank owned life insurance 2,619 2,567 52 2.0 % Electronic banking fees and charges 493 391 102 26.1 % Other income 830 833 (3 ) -0.4 % Total non-interest income 4,873 4,626 247 5.3 % Non-interest expense Salaries and employee benefits 17,579 17,498 81 0.5 % Net occupancy expense of premises 2,831 2,798 33 1.2 % Equipment and systems 3,892 3,860 32 0.8 % Advertising and marketing 311 342 (31 ) -9.1 % Federal deposit insurance premium 1,503 1,563 (60 ) -3.8 % Directors' compensation 361 361 — — % Other expense 3,084 3,364 (280 ) -8.3 % Total non-interest expense 29,561 29,786 (225 ) -0.8 % Income before income taxes 7,817 7,178 639 8.9 % Income taxes 1,251 1,086 165 15.2 % Net income $ 6,566 $ 6,092 $ 474 7.8 % Net income per common share (EPS) Basic $ 0.11 $ 0.10 $ 0.01 Diluted $ 0.10 $ 0.10 $ — Dividends declared Cash dividends declared per common share $ 0.11 $ 0.11 $ — Cash dividends declared $ 6,933 $ 6,896 $ 37 Dividend payout ratio 105.6 % 113.2 % -7.6 % Weighted average number of common shares outstanding Basic 62,443 62,389 54 Diluted 62,576 62,420 156 Kearny Financial Corp. Average Balance Sheet Data (Unaudited) (Dollars in Thousands) Three Months Ended Variance or Change Variance or Change Pct. December 31, 2024 September 30, 2024 Assets Interest-earning assets: Loans receivable, including loans held for sale $ 5,762,053 $ 5,761,593 $ 460 — % Taxable investment securities 1,285,800 1,314,945 (29,145 ) -2.2 % Tax-exempt investment securities 9,711 12,244 (2,533 ) -20.7 % Other interest-earning assets 116,354 131,981 (15,627 ) -11.8 % Total interest-earning assets 7,173,918 7,220,763 (46,845 ) -0.6 % Non-interest-earning assets 459,982 467,670 (7,688 ) -1.6 % Total assets $ 7,633,900 $ 7,688,433 $ (54,533 ) -0.7 % Liabilities and Stockholders' Equity Interest-bearing liabilities: Deposits: Interest-bearing demand $ 2,314,378 $ 2,282,608 $ 31,770 1.4 % Savings 711,801 668,240 43,561 6.5 % Certificates of deposit (retail) 1,211,985 1,203,770 8,215 0.7 % Certificates of deposit (brokered and listing service) 735,736 551,819 183,917 33.3 % Total interest-bearing deposits 4,973,900 4,706,437 267,463 5.7 % Borrowings: Federal Home Loan Bank advances 1,085,455 1,325,583 (240,128 ) -18.1 % Other borrowings 156,522 237,011 (80,489 ) -34.0 % Total borrowings 1,241,977 1,562,594 (320,617 ) -20.5 % Total interest-bearing liabilities 6,215,877 6,269,031 (53,154 ) -0.8 % Non-interest-bearing liabilities: Non-interest-bearing deposits 604,915 599,095 5,820 1.0 % Other non-interest-bearing liabilities 65,258 69,629 (4,371 ) -6.3 % Total non-interest-bearing liabilities 670,173 668,724 1,449 0.2 % Total liabilities 6,886,050 6,937,755 (51,705 ) -0.7 % Stockholders' equity 747,850 750,678 (2,828 ) -0.4 % Total liabilities and stockholders' equity $ 7,633,900 $ 7,688,433 $ (54,533 ) -0.7 % Average interest-earning assets to average interest-bearing liabilities 115.41 % 115.18 % 0.23 % 0.2 % Kearny Financial Corp. Performance Ratio Highlights (Unaudited) Three Months Ended Variance or Change December 31, 2024 September 30, 2024 Average yield on interest-earning assets: Loans receivable, including loans held for sale 4.54 % 4.61 % -0.07 % Taxable investment securities 4.29 % 4.38 % -0.09 % Tax-exempt investment securities(1) 2.42 % 2.32 % 0.10 % Other interest-earning assets 7.62 % 7.47 % 0.15 % Total interest-earning assets 4.54 % 4.61 % -0.07 % Average cost of interest-bearing liabilities: Deposits: Interest-bearing demand 2.96 % 3.13 % -0.17 % Savings 1.29 % 1.05 % 0.24 % Certificates of deposit (retail) 4.06 % 4.12 % -0.06 % Certificates of deposit (brokered and listing service) 2.71 % 2.18 % 0.53 % Total interest-bearing deposits 2.95 % 2.98 % -0.03 % Borrowings: Federal Home Loan Bank advances 3.78 % 3.82 % -0.04 % Other borrowings 4.88 % 5.28 % -0.40 % Total borrowings 3.91 % 4.04 % -0.13 % Total interest-bearing liabilities 3.15 % 3.24 % -0.09 % Interest rate spread(2) 1.39 % 1.37 % 0.02 % Net interest margin(3) 1.82 % 1.80 % 0.02 % Non-interest income to average assets (annualized) 0.26 % 0.24 % 0.02 % Non-interest expense to average assets (annualized) 1.55 % 1.55 % — % Efficiency ratio(4) 78.86 % 80.35 % -1.49 % Return on average assets (annualized) 0.34 % 0.32 % 0.02 % Return on average equity (annualized) 3.51 % 3.25 % 0.26 % Return on average tangible equity (annualized)(5) 4.21 % 3.89 % 0.32 % _________________________ (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) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Assets Cash and cash equivalents $ 141,554 $ 155,574 $ 63,864 $ 71,027 $ 73,860 Securities available for sale 1,018,279 1,070,811 1,072,833 1,098,655 1,144,175 Securities held to maturity 127,266 132,256 135,742 139,643 141,959 Loans held-for-sale 5,695 8,866 6,036 4,117 14,030 Loans receivable 5,791,758 5,784,246 5,732,787 5,758,336 5,745,629 Less: allowance for credit losses on loans (44,457 ) (44,923 ) (44,939 ) (44,930 ) (44,867 ) Net loans receivable 5,747,301 5,739,323 5,687,848 5,713,406 5,700,762 Premises and equipment 45,127 45,189 44,940 45,053 45,928 Federal Home Loan Bank stock 64,443 57,706 80,300 81,347 83,372 Accrued interest receivable 27,772 29,467 29,521 31,065 30,258 Goodwill 113,525 113,525 113,525 210,895 210,895 Core deposit intangible 1,679 1,805 1,931 2,057 2,189 Bank owned life insurance 301,339 300,186 297,874 296,493 256,064 Deferred income taxes, net 53,325 50,131 50,339 47,225 46,116 Other real estate owned — — — — 11,982 Other assets 84,080 67,540 98,708 100,989 136,242 Total assets $ 7,731,385 $ 7,772,379 $ 7,683,461 $ 7,841,972 $ 7,897,832 Liabilities Deposits: Non-interest-bearing $ 601,510 $ 592,099 $ 598,366 $ 586,089 $ 584,130 Interest-bearing 5,069,550 4,878,413 4,559,757 4,622,961 4,735,500 Total deposits 5,671,060 5,470,512 5,158,123 5,209,050 5,319,630 Borrowings 1,258,949 1,479,888 1,709,789 1,722,178 1,667,055 Advance payments by borrowers for taxes 17,986 17,824 17,409 17,387 16,742 Other liabilities 38,537 52,618 44,569 44,279 46,427 Total liabilities 6,986,532 7,020,842 6,929,890 6,992,894 7,049,854 Stockholders' Equity Common stock 646 646 644 644 645 Paid-in capital 494,092 493,523 493,680 493,187 493,297 Retained earnings 342,155 342,522 343,326 440,308 439,755 Unearned ESOP shares (19,943 ) (20,430 ) (20,916 ) (21,402 ) (21,889 ) Accumulated other comprehensive loss (72,097 ) (64,724 ) (63,163 ) (63,659 ) (63,830 ) Total stockholders' equity 744,853 751,537 753,571 849,078 847,978 Total liabilities and stockholders' equity $ 7,731,385 $ 7,772,379 $ 7,683,461 $ 7,841,972 $ 7,897,832 Consolidated capital ratios Equity to assets 9.63 % 9.67 % 9.81 % 10.83 % 10.74 % Tangible equity to tangible assets(1) 8.27 % 8.31 % 8.43 % 8.34 % 8.26 % Share data Outstanding shares 64,580 64,580 64,434 64,437 64,445 Book value per share $ 11.53 $ 11.64 $ 11.70 $ 13.18 $ 13.16 Tangible book value per share(2) $ 9.75 $ 9.85 $ 9.90 $ 9.87 $ 9.85 _________________________ (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) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Loan portfolio composition: Commercial loans: Multi-family mortgage $ 2,722,623 $ 2,646,187 $ 2,645,851 $ 2,645,195 $ 2,651,274 Nonresidential mortgage 950,194 950,771 948,075 965,539 947,287 Commercial business 135,740 145,984 142,747 147,326 144,134 Construction 176,704 227,327 209,237 229,457 221,933 Total commercial loans 3,985,261 3,970,269 3,945,910 3,987,517 3,964,628 One- to four-family residential mortgage 1,765,160 1,768,230 1,756,051 1,741,644 1,746,065 Consumer loans: Home equity loans 47,101 44,741 44,104 42,731 43,517 Other consumer 2,778 2,965 2,685 3,198 2,728 Total consumer loans 49,879 47,706 46,789 45,929 46,245 Total loans, excluding yield adjustments 5,800,300 5,786,205 5,748,750 5,775,090 5,756,938 Unaccreted yield adjustments (8,542 ) (1,959 ) (15,963 ) (16,754 ) (11,309 ) Loans receivable, net of yield adjustments 5,791,758 5,784,246 5,732,787 5,758,336 5,745,629 Less: allowance for credit losses on loans (44,457 ) (44,923 ) (44,939 ) (44,930 ) (44,867 ) Net loans receivable $ 5,747,301 $ 5,739,323 $ 5,687,848 $ 5,713,406 $ 5,700,762 Asset quality: Nonperforming assets: Accruing loans - 90 days and over past due $ — $ — $ — $ — $ — Nonaccrual loans 37,697 39,854 39,882 39,546 28,089 Total nonperforming loans 37,697 39,854 39,882 39,546 28,089 Nonaccrual loans held-for-sale — — — — 9,700 Other real estate owned — — — — 11,982 Total nonperforming assets $ 37,697 $ 39,854 $ 39,882 $ 39,546 $ 49,771 Nonperforming loans (% total loans) 0.65 % 0.69 % 0.70 % 0.69 % 0.49 % Nonperforming assets (% total assets) 0.49 % 0.51 % 0.52 % 0.50 % 0.63 % Classified loans $ 132,216 $ 119,534 $ 118,700 $ 115,772 $ 94,676 Allowance for credit losses on loans (ACL): ACL to total loans 0.77 % 0.78 % 0.78 % 0.78 % 0.78 % ACL to nonperforming loans 117.93 % 112.72 % 112.68 % 113.61 % 159.73 % Net charge-offs $ 573 $ 124 $ 3,518 $ 286 $ 4,110 Average net charge-off rate (annualized) 0.04 % 0.01 % 0.25 % 0.02 % 0.29 % Kearny Financial Corp. Supplemental Balance Sheet Highlights (Unaudited) (Dollars in Thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Funding composition: Deposits: Non-interest-bearing deposits $ 601,510 $ 592,099 $ 598,367 $ 586,089 $ 584,130 Interest-bearing demand 2,380,408 2,247,685 2,308,915 2,349,032 2,347,262 Savings 742,266 681,709 643,481 630,456 646,182 Certificates of deposit (retail) 1,194,865 1,215,746 1,199,127 1,235,261 1,283,676 Certificates of deposit (brokered and listing service) 752,011 733,273 408,234 408,212 458,380 Interest-bearing deposits 5,069,550 4,878,413 4,559,757 4,622,961 4,735,500 Total deposits 5,671,060 5,470,512 5,158,124 5,209,050 5,319,630 Borrowings: Federal Home Loan Bank advances 1,028,949 1,209,888 1,534,789 1,457,178 1,432,055 Overnight borrowings 230,000 270,000 175,000 265,000 235,000 Total borrowings 1,258,949 1,479,888 1,709,789 1,722,178 1,667,055 Total funding $ 6,930,009 $ 6,950,400 $ 6,867,913 $ 6,931,228 $ 6,986,685 Loans as a % of deposits 101.4 % 105.1 % 110.4 % 109.8 % 107.4 % Deposits as a % of total funding 81.8 % 78.7 % 75.1 % 75.2 % 76.1 % Borrowings as a % of total funding 18.2 % 21.3 % 24.9 % 24.8 % 23.9 % Uninsured deposits: Uninsured deposits (reported)(1) $ 1,935,607 $ 1,799,726 $ 1,772,623 $ 1,760,740 $ 1,813,122 Uninsured deposits (adjusted)(2) $ 797,721 $ 773,375 $ 764,447 $ 718,026 $ 694,510 _________________________ (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) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Interest income Loans $ 65,408 $ 66,331 $ 65,819 $ 64,035 $ 63,384 Taxable investment securities 13,803 14,384 14,802 15,490 16,756 Tax-exempt investment securities 59 71 80 85 84 Other interest-earning assets 2,215 2,466 2,289 2,475 2,401 Total interest income 81,485 83,252 82,990 82,085 82,625 Interest expense Deposits 36,721 35,018 32,187 32,320 30,340 Borrowings 12,152 15,788 17,527 15,446 16,446 Total interest expense 48,873 50,806 49,714 47,766 46,786 Net interest income 32,612 32,446 33,276 34,319 35,839 Provision for credit losses 107 108 3,527 349 2,105 Net interest income after provision for credit losses 32,505 32,338 29,749 33,970 33,734 Non-interest income Fees and service charges 627 635 580 657 624 Loss on sale and call of securities — — — — (18,135 ) Gain (loss) on sale of loans 304 200 111 (712 ) 104 Loss on sale of other real estate owned — — — — (974 ) Income from bank owned life insurance 2,619 2,567 3,209 3,039 1,162 Electronic banking fees and charges 493 391 1,130 464 396 Other income 830 833 776 755 811 Total non-interest income 4,873 4,626 5,806 4,203 (16,012 ) Non-interest expense Salaries and employee benefits 17,579 17,498 17,266 16,911 17,282 Net occupancy expense of premises 2,831 2,798 2,738 2,863 2,674 Equipment and systems 3,892 3,860 3,785 3,823 3,814 Advertising and marketing 311 342 480 387 301 Federal deposit insurance premium 1,503 1,563 1,532 1,429 1,495 Directors' compensation 361 361 360 360 393 Goodwill impairment — — 97,370 — — Other expense 3,084 3,364 3,020 3,286 3,808 Total non-interest expense 29,561 29,786 126,551 29,059 29,767 Income (loss) before income taxes 7,817 7,178 (90,996 ) 9,114 (12,045 ) Income taxes 1,251 1,086 (917 ) 1,717 1,782 Net income (loss) $ 6,566 $ 6,092 $ (90,079 ) $ 7,397 $ (13,827 ) Net income (loss) per common share (EPS) Basic $ 0.11 $ 0.10 $ (1.45 ) $ 0.12 $ (0.22 ) Diluted $ 0.10 $ 0.10 $ (1.45 ) $ 0.12 $ (0.22 ) Dividends declared Cash dividends declared per common share $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.11 Cash dividends declared $ 6,933 $ 6,896 $ 6,903 $ 6,844 $ 6,882 Dividend payout ratio 105.6 % 113.2 % -7.7 % 92.5 % -49.8 % Weighted average number of common shares outstanding Basic 62,443 62,389 62,254 62,205 62,299 Diluted 62,576 62,420 62,254 62,211 62,299 Kearny Financial Corp. Average Balance Sheet Data (Unaudited) Three Months Ended (Dollars in Thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Assets Interest-earning assets: Loans receivable, including loans held-for-sale $ 5,762,053 $ 5,761,593 $ 5,743,008 $ 5,752,477 $ 5,726,321 Taxable investment securities 1,285,800 1,314,945 1,343,541 1,382,064 1,509,165 Tax-exempt investment securities 9,711 12,244 13,737 14,614 15,025 Other interest-earning assets 116,354 131,981 128,257 125,155 139,740 Total interest-earning assets 7,173,918 7,220,763 7,228,543 7,274,310 7,390,251 Non-interest-earning assets 459,982 467,670 466,537 577,411 554,335 Total assets $ 7,633,900 $ 7,688,433 $ 7,695,080 $ 7,851,721 $ 7,944,586 Liabilities and Stockholders' Equity Interest-bearing liabilities: Deposits: Interest-bearing demand $ 2,314,378 $ 2,282,608 $ 2,310,521 $ 2,378,831 $ 2,301,169 Savings 711,801 668,240 631,622 635,226 664,926 Certificates of deposit (retail) 1,211,985 1,203,770 1,208,101 1,257,362 1,292,837 Certificates of deposit (brokered and listing service) 735,736 551,819 405,697 448,151 531,479 Total interest-bearing deposits 4,973,900 4,706,437 4,555,941 4,719,570 4,790,411 Borrowings: Federal Home Loan Bank advances 1,085,455 1,325,583 1,507,192 1,428,801 1,513,497 Other borrowings 156,522 237,011 228,461 210,989 142,283 Total borrowings 1,241,977 1,562,594 1,735,653 1,639,790 1,655,780 Total interest-bearing liabilities 6,215,877 6,269,031 6,291,594 6,359,360 6,446,191 Non-interest-bearing liabilities: Non-interest-bearing deposits 604,915 599,095 589,438 581,870 597,294 Other non-interest-bearing liabilities 65,258 69,629 62,978 65,709 62,387 Total non-interest-bearing liabilities 670,173 668,724 652,416 647,579 659,681 Total liabilities 6,886,050 6,937,755 6,944,010 7,006,939 7,105,872 Stockholders' equity 747,850 750,678 751,070 844,782 838,714 Total liabilities and stockholders' equity $ 7,633,900 $ 7,688,433 $ 7,695,080 $ 7,851,721 $ 7,944,586 Average interest-earning assets to average interest-bearing liabilities 115.41 % 115.18 % 114.89 % 114.39 % 114.65 % Kearny Financial Corp. Performance Ratio Highlights Three Months Ended December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Average yield on interest-earning assets: Loans receivable, including loans held-for-sale 4.54 % 4.61 % 4.58 % 4.45 % 4.43 % Taxable investment securities 4.29 % 4.38 % 4.41 % 4.48 % 4.44 % Tax-exempt investment securities(1) 2.42 % 2.32 % 2.32 % 2.32 % 2.25 % Other interest-earning assets 7.62 % 7.47 % 7.14 % 7.91 % 6.87 % Total interest-earning assets 4.54 % 4.61 % 4.59 % 4.51 % 4.47 % Average cost of interest-bearing liabilities: Deposits: Interest-bearing demand 2.96 % 3.13 % 3.06 % 3.08 % 2.91 % Savings 1.29 % 1.05 % 0.63 % 0.46 % 0.44 % Certificates of deposit (retail) 4.06 % 4.12 % 3.95 % 3.52 % 3.06 % Certificates of deposit (brokered and listing service) 2.71 % 2.18 % 1.59 % 1.97 % 2.24 % Total interest-bearing deposits 2.95 % 2.98 % 2.83 % 2.74 % 2.53 % Borrowings: Federal Home Loan Bank advances 3.78 % 3.82 % 3.86 % 3.55 % 3.82 % Other borrowings 4.88 % 5.28 % 5.24 % 5.22 % 5.65 % Total borrowings 3.91 % 4.04 % 4.04 % 3.77 % 3.97 % Total interest-bearing liabilities 3.15 % 3.24 % 3.16 % 3.00 % 2.90 % Interest rate spread(2) 1.39 % 1.37 % 1.43 % 1.51 % 1.57 % Net interest margin(3) 1.82 % 1.80 % 1.84 % 1.89 % 1.94 % Non-interest income to average assets (annualized) 0.26 % 0.24 % 0.30 % 0.21 % -0.81 % Non-interest expense to average assets (annualized) 1.55 % 1.55 % 6.58 % 1.48 % 1.50 % Efficiency ratio(4) 78.86 % 80.35 % 323.81 % 75.43 % 150.13 % Return on average assets (annualized) 0.34 % 0.32 % -4.68 % 0.38 % -0.70 % Return on average equity (annualized) 3.51 % 3.25 % -47.97 % 3.50 % -6.59 % Return on average tangible equity (annualized)(5) 4.21 % 3.89 % 3.33 % 4.68 % -8.84 % _________________________ (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) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Adjusted net income: Net income (loss) (GAAP) $ 6,566 $ 6,092 $ (90,079 ) $ 7,397 $ (13,827 ) 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 $ 6,566 $ 6,092 $ 5,596 $ 7,397 $ 5,335 Calculation of pre-tax, pre-provision net revenue: Net income (loss) (GAAP) $ 6,566 $ 6,092 $ (90,079 ) $ 7,397 $ (13,827 ) Adjustments to net income (GAAP): Provision for income taxes 1,251 1,086 (917 ) 1,717 1,782 Provision for credit losses 107 108 3,527 349 2,105 Pre-tax, pre-provision net revenue (non-GAAP) $ 7,924 $ 7,286 $ (87,469 ) $ 9,463 $ (9,940 ) Adjusted earnings per share: Weighted average common shares - basic 62,443 62,389 62,254 62,205 62,299 Weighted average common shares - diluted 62,576 62,420 62,330 62,211 62,367 Earnings per share - basic (GAAP) $ 0.11 $ 0.10 $ (1.45 ) $ 0.12 $ (0.22 ) Earnings per share - diluted (GAAP) $ 0.10 $ 0.10 $ (1.45 ) $ 0.12 $ (0.22 ) Adjusted earnings per share - basic (non-GAAP) $ 0.11 $ 0.10 $ 0.09 $ 0.12 $ 0.09 Adjusted earnings per share - diluted (non-GAAP) $ 0.10 $ 0.10 $ 0.09 $ 0.12 $ 0.09 Pre-tax, pre-provision net revenue per share: Pre-tax, pre-provision net revenue per share - basic (non-GAAP) $ 0.13 $ 0.12 $ (1.41 ) $ 0.15 $ (0.16 ) Pre-tax, pre-provision net revenue per share - diluted (non-GAAP) $ 0.13 $ 0.12 $ (1.41 ) $ 0.15 $ (0.16 ) Adjusted return on average assets: Total average assets $ 7,633,900 $ 7,688,433 $ 7,695,080 $ 7,851,721 $ 7,944,586 Return on average assets (GAAP) 0.34 % 0.32 % -4.68 % 0.38 % -0.70 % Adjusted return on average assets (non-GAAP) 0.34 % 0.32 % 0.29 % 0.38 % 0.27 % Adjusted return on average equity: Total average equity $ 747,850 $ 750,678 $ 751,070 $ 844,782 $ 838,714 Return on average equity (GAAP) 3.51 % 3.25 % -47.97 % 3.50 % -6.59 % Adjusted return on average equity (non-GAAP) 3.51 % 3.25 % 2.98 % 3.50 % 2.54 % Kearny Financial Corp. Reconciliation of GAAP to Non-GAAP (Unaudited) Three Months Ended (Dollars and Shares in Thousands, Except Per Share Data) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Adjusted return on average tangible equity: Total average equity $ 747,850 $ 750,678 $ 751,070 $ 844,782 $ 838,714 Less: average goodwill (113,525 ) (113,525 ) (113,525 ) (210,895 ) (210,895 ) Less: average other intangible assets (1,761 ) (1,886 ) (2,006 ) (2,138 ) (2,277 ) Total average tangible equity $ 632,564 $ 635,267 $ 635,539 $ 631,749 $ 625,542 Return on average tangible equity (non-GAAP) 4.21 % 3.89 % 3.33 % 4.68 % -8.84 % Adjusted return on average tangible equity (non-GAAP) 4.21 % 3.89 % 3.58 % 4.68 % 3.41 % Adjusted non-interest expense ratio: Non-interest expense (GAAP) $ 29,561 $ 29,786 $ 126,551 $ 29,059 $ 29,767 Non-recurring transactions: Goodwill impairment — — (97,370 ) — — Non-interest expense (non-GAAP) $ 29,561 $ 29,786 $ 29,181 $ 29,059 $ 29,767 Non-interest expense ratio (GAAP) 1.55 % 1.55 % 6.58 % 1.48 % 1.50 % Adjusted non-interest expense ratio (non-GAAP) 1.55 % 1.55 % 1.52 % 1.48 % 1.50 % Adjusted efficiency ratio: Non-interest expense (non-GAAP) $ 29,561 $ 29,786 $ 29,181 $ 29,059 $ 29,767 Net interest income (GAAP) $ 32,612 $ 32,446 $ 33,276 $ 34,319 $ 35,839 Total non-interest income (GAAP) 4,873 4,626 5,806 4,203 (16,012 ) 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) $ 37,485 $ 37,072 $ 39,474 $ 38,522 $ 38,535 Efficiency ratio (GAAP) 78.86 % 80.35 % 323.81 % 75.43 % 150.13 % Adjusted efficiency ratio (non-GAAP) 78.86 % 80.35 % 73.92 % 75.43 % 77.25 % Source: Kearny Bank