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.
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 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.
- 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 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.
- 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.
- 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.
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 | |||||||||||
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