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

Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported net income for the quarter ended September 30, 2024 of $6.1 million, or $0.10 per diluted share, compared to a GAAP net loss of $90.1 million, or $1.45 per diluted share, for the quarter ended June 30, 2024. The net loss for the quarter ended June 30, 2024 included a goodwill impairment of $95.3 million, as previously disclosed. Excluding this item, net income for the quarter ended September 30, 2024 increased $496,000 from adjusted net income of $5.6 million for the quarter ended June 30, 2024.

The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on November 20, 2024, to stockholders of record as of November 6, 2024.

Craig L. Montanaro, President and Chief Executive Officer, commented, “I’m pleased to report that this quarter saw our net interest margin reach its inflection point and begin to ascend. Despite four basis points of quarterly compression, each successive month of the quarter reflected an increase in our net interest margin. The recent fed funds rate reduction of 50 basis points has already begun translating into a cost of funds benefit in October. Additional fed funds rate cuts, which the market is anticipating, will be a positive catalyst for our liability-sensitive balance sheet.”

Mr. Montanaro continued, “Regarding asset quality, our loan portfolio remains strong. Minimal exposure to New York City rent-regulated multifamily and office real estate, coupled with our robust commercial real estate ACL coverage ratios and peer-leading charge-off ratios, leaves us well-positioned in the current environment.”

Balance Sheet

• Total assets were $7.77 billion at September 30, 2024, an increase of $88.9 million, or 1.2%, from June 30, 2024.
• Investment securities totaled $1.20 billion at September 30, 2024, a decrease of $5.5 million, or 0.5%, from June 30, 2024.
• Loans receivable totaled $5.78 billion at September 30, 2024, an increase of $51.5 million, or 0.9%, from June 30, 2024, primarily reflecting growth in one- to four-family residential mortgage loans and construction loans.
• Deposits were $5.47 billion at September 30, 2024, an increase of $312.4 million, or 6.1%, from June 30, 2024. This increase was largely the result of a reallocation from Federal Home Loan Bank (“FHLB”) advances into brokered certificates of deposits, due to the relatively more favorable economics of brokered deposits compared to advances.
• Borrowings were $1.48 billion at September 30, 2024, a decrease of $229.9 million, or 13.4%, from June 30, 2024, primarily reflecting a decrease in FHLB borrowings offset by an increase in brokered certificates of deposits, as noted above.
• At September 30, 2024, the Company maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.06 billion, an increase of $240.0 million from June 30, 2024, and represents 26.5% of total assets.

Earnings

Net Interest Income and Net Interest Margin

• Net interest margin contracted four basis points to 1.80% for the quarter ended September 30, 2024. The decrease for the quarter was driven by increases in the cost and average balances of interest-bearing deposits and a decrease in the average balance of interest-earning assets, partially offset by decreases in the average balances of interest-bearing borrowings and higher yields on interest-earning assets.
• For the quarter ended September 30, 2024, net interest income decreased $830,000 to $32.4 million from $33.3 million for the quarter ended June 30, 2024. Included in net interest income for the quarters ended September 30, 2024 and June 30, 2024, respectively, was purchase accounting accretion of $649,000 and $612,000, and loan prepayment penalty income of $52,000 and $366,000.

Non-Interest Income

• Non-interest income decreased $1.2 million to income of $4.6 million for the quarter ended September 30, 2024, from $5.8 million for the quarter ended June 30, 2024. Included in non-interest income for the quarter ended June 30, 2024 was a non-recurring contract renewal bonus of $750,000 and $1.1 million in non-recurring payments on two life insurance policies, partially offset by a $392,000 non-recurring exchange charge related to the December 2023 Bank Owned Life Insurance (“BOLI”) restructure. No such non-recurring items were recorded during the quarter ended September 30, 2024.
• Income from BOLI decreased $642,000 to $2.6 million for the quarter ended September 30, 2024 from $3.2 million for the quarter ended June 30, 2024, primarily driven by the non-recurring items recorded for the quarter ended June 30, 2024, as disclosed above.

Non-Interest Expense

• For the quarter ended September 30, 2024, non-interest expense decreased $96.8 million, or 76.5%, to $29.8 million from $126.6 million for the quarter ended June 30, 2024, driven by a non-cash goodwill impairment recognized in the prior comparative period. Excluding the goodwill impairment, adjusted non-interest expense increased $605,000 from $29.2 million, primarily driven by increases in salary and benefits expense and other expense.
• Salary and benefits expense increased $232,000 primarily driven by annual merit increases and higher payroll taxes, partially offset by a non-recurring decrease in stock-based compensation.
• Other expense increased $344,000 primarily driven by an increase of $243,000 in the provision for credit losses on off balance sheet commitments.

Income Taxes

• Income tax expense totaled $1.1 million for the quarter ended September 30, 2024, compared to an income tax benefit of $917,000 for the quarter ended June 30, 2024. The increase in income tax expense was primarily due to higher pre-tax income in the current quarter, coupled with a partial reversal of the deferred tax liability associated with the previously recorded goodwill impairment in the prior quarter.

Asset Quality

• The balance of non-performing assets remained steady at $39.9 million, or 0.51% of total assets, at September 30, 2024, and $39.9 million, or 0.52% of total assets, at June 30, 2024, respectively.
• Net charge-offs totaled $124,000, or 0.01% of average loans, on an annualized basis, for the quarter ended September 30, 2024, compared to $3.5 million, or 0.25% of average loans, on an annualized basis, for the quarter ended June 30, 2024.
• For the quarter ended September 30, 2024, the Company recorded a provision for credit losses of $108,000, compared to $3.5 million for the quarter ended June 30, 2024. The provision for credit loss expense for the quarter ended September 30, 2024 was primarily driven by loan growth.
• The allowance for credit losses (“ACL”) was $44.9 million, or 0.78% of total loans, at September 30, 2024 and remained unchanged from June 30, 2024.

Capital

• For the quarter ended September 30, 2024, book value per share decreased $0.06, or 0.5%, to $11.64 while tangible book value per share decreased $0.05, or 0.5%, to $9.85.
• At September 30, 2024, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $76.0 million, partially offset by after-tax unrealized gains on derivatives of $11.0 million. After-tax net unrecognized losses on securities held to maturity of $8.2 million were not reflected in total stockholders’ equity.
• At September 30, 2024, the Company’s tangible equity to tangible assets ratio equaled 8.31% 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 Q1 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, orSean Byrnes, Executive Vice President and Chief Financial OfficerKearny Financial Corp.[phone]

Linked-Quarter Comparative Financial Analysis
Kearny Financial Corp.Consolidated Balance Sheets(Unaudited)
(Dollars and Shares in Thousands,Except Per Share Data)	September 30,2024			June 30,2024			Variance or Change			Variance or Change Pct.
Assets
Cash and cash equivalents	$	155,574		$	63,864		$	91,710		143.6	%
Securities available for sale		1,070,811			1,072,833			(2,022	)	-0.2	%
Securities held to maturity		132,256			135,742			(3,486	)	-2.6	%
Loans held-for-sale		8,866			6,036			2,830		46.9	%
Loans receivable		5,784,246			5,732,787			51,459		0.9	%
Less: allowance for credit losses on loans		(44,923	)		(44,939	)		(16	)	—%
Net loans receivable		5,739,323			5,687,848			51,475		0.9	%
Premises and equipment		45,189			44,940			249		0.6	%
Federal Home Loan Bank stock		57,706			80,300			(22,594	)	-28.1	%
Accrued interest receivable		29,467			29,521			(54	)	-0.2	%
Goodwill		113,525			113,525			—		—	%
Core deposit intangible		1,805			1,931			(126	)	-6.5	%
Bank owned life insurance		300,186			297,874			2,312		0.8	%
Deferred income taxes, net		50,131			50,339			(208	)	-0.4	%
Other assets		67,540			98,708			(31,168	)	-31.6	%
Total assets	$	7,772,379		$	7,683,461		$	88,918		1.2	%
Liabilities
Deposits:
Non-interest-bearing	$	592,099		$	598,366		$	(6,267	)	-1.0	%
Interest-bearing		4,878,413			4,559,757			318,656		7.0	%
Total deposits		5,470,512			5,158,123			312,389		6.1	%
Borrowings		1,479,888			1,709,789			(229,901	)	-13.4	%
Advance payments by borrowers for taxes		17,824			17,409			415		2.4	%
Other liabilities		52,618			44,569			8,049		18.1	%
Total liabilities		7,020,842			6,929,890			90,952		1.3	%
Stockholders' Equity
Common stock		646			644			2		0.3	%
Paid-in capital		493,523			493,680			(157	)	—	%
Retained earnings		342,522			343,326			(804	)	-0.2	%
Unearned ESOP shares		(20,430	)		(20,916	)		486		2.3	%
Accumulated other comprehensive loss		(64,724	)		(63,163	)		(1,561	)	-2.5	%
Total stockholders' equity		751,537			753,571			(2,034	)	-0.3	%
Total liabilities and stockholders' equity	$	7,772,379		$	7,683,461		$	88,918		1.2	%
Consolidated capital ratios
Equity to assets		9.67	%		9.81	%		-0.14	%
Tangible equity to tangible assets (1)		8.31	%		8.43	%		-0.12	%
Share data
Outstanding shares		64,580			64,434			146		0.2	%
Book value per share	$	11.64		$	11.70		$	(0.06	)	-0.5	%
Tangible book value per share (2)	$	9.85		$	9.90		$	(0.05	)	-0.5	%
_________________________
(1) Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets. (2) Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.

Kearny Financial Corp.Consolidated Statements of Income (Loss)(Unaudited)
(Dollars and Shares in Thousands,Except Per Share Data)	Three Months Ended						Variance or Change			Variance or Change Pct.
	September 30,2024			June 30,2024
Interest income
Loans	$	66,331		$	65,819		$	512		0.8	%
Taxable investment securities		14,384			14,802			(418	)	-2.8	%
Tax-exempt investment securities		71			80			(9	)	-11.3%
Other interest-earning assets		2,466			2,289			177		7.7	%
Total interest income		83,252			82,990			262		0.3	%
Interest expense
Deposits		35,018			32,187			2,831		8.8	%
Borrowings		15,788			17,527			(1,739	)	-9.9	%
Total interest expense		50,806			49,714			1,092		2.2	%
Net interest income		32,446			33,276			(830	)	-2.5	%
Provision for credit losses		108			3,527			(3,419	)	-96.9	%
Net interest income after provision for credit losses		32,338			29,749			2,589		8.7	%
Non-interest income
Fees and service charges		635			580			55		9.5	%
Gain on sale of loans		200			111			89		80.2	%
Income from bank owned life insurance		2,567			3,209			(642	)	-20.0	%
Electronic banking fees and charges		391			1,130			(739	)	-65.4	%
Other income		833			776			57		7.3	%
Total non-interest income		4,626			5,806			(1,180	)	-20.3	%
Non-interest expense
Salaries and employee benefits		17,498			17,266			232		1.3	%
Net occupancy expense of premises		2,798			2,738			60		2.2	%
Equipment and systems		3,860			3,785			75		2.0	%
Advertising and marketing		342			480			(138	)	-28.8	%
Federal deposit insurance premium		1,563			1,532			31		2.0	%
Directors' compensation		361			360			1		0.3	%
Goodwill impairment		—			97,370			(97,370	)	-100.0	%
Other expense		3,364			3,020			344		11.4	%
Total non-interest expense		29,786			126,551			(96,765	)	-76.5	%
Income (loss) before income taxes		7,178			(90,996	)		98,174		107.9	%
Income taxes		1,086			(917	)		2,003		-218.4	%
Net income (loss)	$	6,092		$	(90,079	)	$	96,171		106.8	%
Net income (loss) per common share (EPS)
Basic	$	0.10		$	(1.45	)	$	1.55
Diluted	$	0.10		$	(1.45	)	$	1.55
Dividends declared
Cash dividends declared per common share	$	0.11		$	0.11		$	—
Cash dividends declared	$	6,896		$	6,903		$	(7	)
Dividend payout ratio		113.2	%		-7.7	%		120.9	%
Weighted average number of common shares outstanding
Basic		62,389			62,254			135
Diluted		62,420			62,254			166

Kearny Financial Corp.Average Balance Sheet Data(Unaudited)
(Dollars in Thousands)	Three Months Ended						Variance or Change			Variance or Change Pct.
	September 30,2024			June 30,2024
Assets
Interest-earning assets:
Loans receivable, including loans held for sale	$	5,761,593		$	5,743,008		$	18,585		0.3	%
Taxable investment securities		1,314,945			1,343,541			(28,596	)	-2.1	%
Tax-exempt investment securities		12,244			13,737			(1,493	)	-10.9	%
Other interest-earning assets		131,981			128,257			3,724		2.9	%
Total interest-earning assets		7,220,763			7,228,543			(7,780	)	-0.1	%
Non-interest-earning assets		467,670			466,537			1,133		0.2	%
Total assets	$	7,688,433		$	7,695,080		$	(6,647	)	-0.1	%
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	2,282,608		$	2,310,521		$	(27,913	)	-1.2	%
Savings		668,240			631,622			36,618		5.8	%
Certificates of deposit		1,755,589			1,613,798			141,791		8.8	%
Total interest-bearing deposits		4,706,437			4,555,941			150,496		3.3	%
Borrowings:
Federal Home Loan Bank advances		1,325,583			1,507,192			(181,609	)	-12.0	%
Other borrowings		237,011			228,461			8,550		3.7	%
Total borrowings		1,562,594			1,735,653			(173,059	)	-10.0	%
Total interest-bearing liabilities		6,269,031			6,291,594			(22,563	)	-0.4	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		599,095			589,438			9,657		1.6	%
Other non-interest-bearing liabilities		69,629			62,978			6,651		10.6	%
Total non-interest-bearing liabilities		668,724			652,416			16,308		2.5	%
Total liabilities		6,937,755			6,944,010			(6,255	)	-0.1	%
Stockholders' equity		750,678			751,070			(392	)	-0.1	%
Total liabilities and stockholders' equity	$	7,688,433		$	7,695,080		$	(6,647	)	-0.1	%
Average interest-earning assets to average interest-bearing liabilities		115.18	%		114.89	%		0.29	%	0.3	%

Kearny Financial Corp.Performance Ratio Highlights(Unaudited)
	Three Months Ended				Variance or Change
	September 30,2024		June 30,2024
Average yield on interest-earning assets:
Loans receivable, including loans held for sale	4.61	%	4.58	%	0.03	%
Taxable investment securities	4.38	%	4.41	%	-0.03	%
Tax-exempt investment securities (1)	2.32	%	2.32	%	—	%
Other interest-earning assets	7.47	%	7.14	%	0.33	%
Total interest-earning assets	4.61	%	4.59	%	0.02	%
Average cost of interest-bearing liabilities:
Deposits:
Interest-bearing demand	3.13	%	3.06	%	0.07	%
Savings	1.05	%	0.63	%	0.42	%
Certificates of deposit	3.51	%	3.35	%	0.16	%
Total interest-bearing deposits	2.98	%	2.83	%	0.15	%
Borrowings:
Federal Home Loan Bank advances	3.82	%	3.86	%	-0.04	%
Other borrowings	5.28	%	5.24	%	0.04	%
Total borrowings	4.04	%	4.04	%	—	%
Total interest-bearing liabilities	3.24	%	3.16	%	0.08	%
Interest rate spread (2)	1.37	%	1.43	%	-0.06	%
Net interest margin (3)	1.80	%	1.84	%	-0.04	%
Non-interest income to average assets (annualized)	0.24	%	0.30	%	-0.06	%
Non-interest expense to average assets (annualized)	1.55	%	6.58	%	-5.03	%
Efficiency ratio (4)	80.35	%	323.81	%	-243.46	%
Return on average assets (annualized)	0.32	%	-4.68	%	5.00	%
Return on average equity (annualized)	3.25	%	-47.97	%	51.22	%
Return on average tangible equity (annualized) (5)	3.89	%	3.33	%	0.56	%
_________________________
(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)	September 30,2024			June 30,2024			March 31,2024			December 31,2023			September 30,2023
	(Unaudited)			(Audited)			(Unaudited)			(Unaudited)			(Unaudited)
Assets
Cash and cash equivalents	$	155,574		$	63,864		$	71,027		$	73,860		$	57,219
Securities available for sale		1,070,811			1,072,833			1,098,655			1,144,175			1,215,633
Securities held to maturity		132,256			135,742			139,643			141,959			143,730
Loans held-for-sale		8,866			6,036			4,117			14,030			3,934
Loans receivable		5,784,246			5,732,787			5,758,336			5,745,629			5,736,049
Less: allowance for credit losses on loans		(44,923	)		(44,939	)		(44,930	)		(44,867	)		(46,872	)
Net loans receivable		5,739,323			5,687,848			5,713,406			5,700,762			5,689,177
Premises and equipment		45,189			44,940			45,053			45,928			46,868
Federal Home Loan Bank stock		57,706			80,300			81,347			83,372			81,509
Accrued interest receivable		29,467			29,521			31,065			30,258			29,766
Goodwill		113,525			113,525			210,895			210,895			210,895
Core deposit intangible		1,805			1,931			2,057			2,189			2,323
Bank owned life insurance		300,186			297,874			296,493			256,064			294,491
Deferred income taxes, net		50,131			50,339			47,225			46,116			56,500
Other real estate owned		—			—			—			11,982			12,956
Other assets		67,540			98,708			100,989			136,242			129,865
Total assets	$	7,772,379		$	7,683,461		$	7,841,972		$	7,897,832		$	7,974,866
Liabilities
Deposits:
Non-interest-bearing	$	592,099		$	598,366		$	586,089		$	584,130		$	595,141
Interest-bearing		4,878,413			4,559,757			4,622,961			4,735,500			4,839,027
Total deposits		5,470,512			5,158,123			5,209,050			5,319,630			5,434,168
Borrowings		1,479,888			1,709,789			1,722,178			1,667,055			1,626,933
Advance payments by borrowers for taxes		17,824			17,409			17,387			16,742			16,907
Other liabilities		52,618			44,569			44,279			46,427			47,324
Total liabilities		7,020,842			6,929,890			6,992,894			7,049,854			7,125,332
Stockholders' Equity
Common stock		646			644			644			645			652
Paid-in capital		493,523			493,680			493,187			493,297			497,269
Retained earnings		342,522			343,326			440,308			439,755			460,464
Unearned ESOP shares		(20,430	)		(20,916	)		(21,402	)		(21,889	)		(22,375	)
Accumulated other comprehensive loss		(64,724	)		(63,163	)		(63,659	)		(63,830	)		(86,476	)
Total stockholders' equity		751,537			753,571			849,078			847,978			849,534
Total liabilities and stockholders' equity	$	7,772,379		$	7,683,461		$	7,841,972		$	7,897,832		$	7,974,866
Consolidated capital ratios
Equity to assets		9.67	%		9.81	%		10.83	%		10.74	%		10.65	%
Tangible equity to tangible assets (1)		8.31	%		8.43	%		8.34	%		8.26	%		8.20	%
Share data
Outstanding shares		64,580			64,434			64,437			64,445			65,132
Book value per share	$	11.64		$	11.70		$	13.18		$	13.16		$	13.04
Tangible book value per share (2)	$	9.85		$	9.90		$	9.87		$	9.85		$	9.77
_________________________
(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)	September 30,2024			June 30,2024			March 31,2024			December 31,2023			September 30,2023
Loan portfolio composition:
Commercial loans:
Multi-family mortgage	$	2,646,187		$	2,645,851		$	2,645,195		$	2,651,274		$	2,699,151
Nonresidential mortgage		950,771			948,075			965,539			947,287			946,801
Commercial business		145,984			142,747			147,326			144,134			149,229
Construction		227,327			209,237			229,457			221,933			230,703
Total commercial loans		3,970,269			3,945,910			3,987,517			3,964,628			4,025,884
One- to four-family residential mortgage		1,768,230			1,756,051			1,741,644			1,746,065			1,689,051
Consumer loans:
Home equity loans		44,741			44,104			42,731			43,517			42,896
Other consumer		2,965			2,685			3,198			2,728			2,644
Total consumer loans		47,706			46,789			45,929			46,245			45,540
Total loans, excluding yield adjustments		5,786,205			5,748,750			5,775,090			5,756,938			5,760,475
Unaccreted yield adjustments		(1,959	)		(15,963	)		(16,754	)		(11,309	)		(24,426	)
Loans receivable, net of yield adjustments		5,784,246			5,732,787			5,758,336			5,745,629			5,736,049
Less: allowance for credit losses on loans		(44,923	)		(44,939	)		(44,930	)		(44,867	)		(46,872	)
Net loans receivable	$	5,739,323		$	5,687,848		$	5,713,406		$	5,700,762		$	5,689,177
Asset quality:
Nonperforming assets:
Accruing loans - 90 days and over past due	$	—		$	—		$	—		$	—		$	—
Nonaccrual loans		39,854			39,882			39,546			28,089			37,912
Total nonperforming loans		39,854			39,882			39,546			28,089			37,912
Nonaccrual loans held-for-sale		—			—			—			9,700			—
Other real estate owned		—			—			—			11,982			12,956
Total nonperforming assets	$	39,854		$	39,882		$	39,546		$	49,771		$	50,868
Nonperforming loans (% total loans)		0.69	%		0.70	%		0.69	%		0.49	%		0.66	%
Nonperforming assets (% total assets)		0.51	%		0.52	%		0.50	%		0.63	%		0.64	%
Classified loans	$	119,534		$	118,700		$	115,772		$	94,676		$	98,616
Allowance for credit losses on loans (ACL):
ACL to total loans		0.78	%		0.78	%		0.78	%		0.78	%		0.81	%
ACL to nonperforming loans		112.72	%		112.68	%		113.61	%		159.73	%		123.63	%
Net charge-offs	$	124		$	3,518		$	286		$	4,110		$	2,107
Average net charge-off rate (annualized)		0.01	%		0.25	%		0.02	%		0.29	%		0.15	%

Kearny Financial Corp.Supplemental Balance Sheet Highlights(Unaudited)
(Dollars in Thousands)	September 30,2024			June 30,2024			March 31,2024			December 31,2023			September 30,2023
Funding composition:
Deposits:
Non-interest-bearing deposits	$	592,099		$	598,367		$	586,089		$	584,130		$	595,141
Interest-bearing demand		2,247,685			2,308,915			2,349,032			2,347,262			2,236,573
Savings		681,709			643,481			630,456			646,182			689,163
Certificates of deposit (retail)		1,215,746			1,199,127			1,235,261			1,283,676			1,300,382
Certificates of deposit (brokered and listing service)		733,273			408,234			408,212			458,380			612,909
Interest-bearing deposits		4,878,413			4,559,757			4,622,961			4,735,500			4,839,027
Total deposits		5,470,512			5,158,124			5,209,050			5,319,630			5,434,168
Borrowings:
Federal Home Loan Bank advances		1,209,888			1,534,789			1,457,178			1,432,055			1,456,933
Overnight borrowings		270,000			175,000			265,000			235,000			170,000
Total borrowings		1,479,888			1,709,789			1,722,178			1,667,055			1,626,933
Total funding	$	6,950,400		$	6,867,913		$	6,931,228		$	6,986,685		$	7,061,101
Loans as a % of deposits		105.1	%		110.4	%		109.8	%		107.4	%		104.8	%
Deposits as a % of total funding		78.7	%		75.1	%		75.2	%		76.1	%		77.0	%
Borrowings as a % of total funding		21.3	%		24.9	%		24.8	%		23.9	%		23.0	%
Uninsured deposits:
Uninsured deposits (reported) (1)	$	1,799,726		$	1,772,623		$	1,760,740		$	1,813,122		$	1,734,288
Uninsured deposits (adjusted) (2)	$	773,375		$	764,447		$	718,026		$	694,510		$	683,265
_________________________
(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)	September 30,2024			June 30,2024			March 31,2024			December 31,2023			September 30,2023
Interest income
Loans	$	66,331		$	65,819		$	64,035		$	63,384		$	62,769
Taxable investment securities		14,384			14,802			15,490			16,756			16,265
Tax-exempt investment securities		71			80			85			84			87
Other interest-earning assets		2,466			2,289			2,475			2,401			2,047
Total interest income		83,252			82,990			82,085			82,625			81,168
Interest expense
Deposits		35,018			32,187			32,320			30,340			27,567
Borrowings		15,788			17,527			15,446			16,446			14,441
Total interest expense		50,806			49,714			47,766			46,786			42,008
Net interest income		32,446			33,276			34,319			35,839			39,160
Provision for credit losses		108			3,527			349			2,105			245
Net interest income after provision for credit losses		32,338			29,749			33,970			33,734			38,915
Non-interest income
Fees and service charges		635			580			657			624			748
Loss on sale and call of securities		—			—			—			(18,135	)		—
Gain (loss) on sale of loans		200			111			(712	)		104			215
Loss on sale of other real estate owned		—			—			—			(974	)		—
Income from bank owned life insurance		2,567			3,209			3,039			1,162			1,666
Electronic banking fees and charges		391			1,130			464			396			367
Other income		833			776			755			811			1,014
Total non-interest income		4,626			5,806			4,203			(16,012	)		4,010
Non-interest expense
Salaries and employee benefits		17,498			17,266			16,911			17,282			17,761
Net occupancy expense of premises		2,798			2,738			2,863			2,674			2,758
Equipment and systems		3,860			3,785			3,823			3,814			3,801
Advertising and marketing		342			480			387			301			228
Federal deposit insurance premium		1,563			1,532			1,429			1,495			1,524
Directors' compensation		361			360			360			393			393
Goodwill impairment		—			97,370			—			—			—
Other expense		3,364			3,020			3,286			3,808			3,309
Total non-interest expense		29,786			126,551			29,059			29,767			29,774
Income (loss) before income taxes		7,178			(90,996	)		9,114			(12,045	)		13,151
Income taxes		1,086			(917	)		1,717			1,782			3,309
Net income (loss)	$	6,092		$	(90,079	)	$	7,397		$	(13,827	)	$	9,842
Net income (loss) per common share (EPS)
Basic	$	0.10		$	(1.45	)	$	0.12		$	(0.22	)	$	0.16
Diluted	$	0.10		$	(1.45	)	$	0.12		$	(0.22	)	$	0.16
Dividends declared
Cash dividends declared per common share	$	0.11		$	0.11		$	0.11		$	0.11		$	0.11
Cash dividends declared	$	6,896		$	6,903		$	6,844		$	6,882		$	6,989
Dividend payout ratio		113.2	%		-7.7	%		92.5	%		-49.8	%		71.0	%
Weighted average number of common shares outstanding
Basic		62,389			62,254			62,205			62,299			63,014
Diluted		62,420			62,254			62,211			62,299			63,061

Kearny Financial Corp.Average Balance Sheet Data(Unaudited)
	Three Months Ended
(Dollars in Thousands)	September 30,2024			June 30,2024			March 31,2024			December 31,2023			September 30,2023
Assets
Interest-earning assets:
Loans receivable, including loans held-for-sale	$	5,761,593		$	5,743,008		$	5,752,477		$	5,726,321		$	5,788,074
Taxable investment securities		1,314,945			1,343,541			1,382,064			1,509,165			1,516,393
Tax-exempt investment securities		12,244			13,737			14,614			15,025			15,483
Other interest-earning assets		131,981			128,257			125,155			139,740			130,829
Total interest-earning assets		7,220,763			7,228,543			7,274,310			7,390,251			7,450,779
Non-interest-earning assets		467,670			466,537			577,411			554,335			568,723
Total assets	$	7,688,433		$	7,695,080		$	7,851,721		$	7,944,586		$	8,019,502
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	2,282,608		$	2,310,521		$	2,378,831		$	2,301,169		$	2,245,831
Savings		668,240			631,622			635,226			664,926			719,508
Certificates of deposit		1,755,589			1,613,798			1,705,513			1,824,316			1,968,512
Total interest-bearing deposits		4,706,437			4,555,941			4,719,570			4,790,411			4,933,851
Borrowings:
Federal Home Loan Bank advances		1,325,583			1,507,192			1,428,801			1,513,497			1,386,473
Other borrowings		237,011			228,461			210,989			142,283			158,098
Total borrowings		1,562,594			1,735,653			1,639,790			1,655,780			1,544,571
Total interest-bearing liabilities		6,269,031			6,291,594			6,359,360			6,446,191			6,478,422
Non-interest-bearing liabilities:
Non-interest-bearing deposits		599,095			589,438			581,870			597,294			612,251
Other non-interest-bearing liabilities		69,629			62,978			65,709			62,387			66,701
Total non-interest-bearing liabilities		668,724			652,416			647,579			659,681			678,952
Total liabilities		6,937,755			6,944,010			7,006,939			7,105,872			7,157,374
Stockholders' equity		750,678			751,070			844,782			838,714			862,128
Total liabilities and stockholders' equity	$	7,688,433		$	7,695,080		$	7,851,721		$	7,944,586		$	8,019,502
Average interest-earning assets to average interest-bearing liabilities		115.18	%		114.89	%		114.39	%		114.65	%		115.01	%

Kearny Financial Corp.Performance Ratio Highlights
	Three Months Ended
	September 30,2024		June 30,2024		March 31,2024		December 31,2023		September 30,2023
Average yield on interest-earning assets:
Loans receivable, including loans held-for-sale	4.61	%	4.58	%	4.45	%	4.43	%	4.34	%
Taxable investment securities	4.38	%	4.41	%	4.48	%	4.44	%	4.29	%
Tax-exempt investment securities (1)	2.32	%	2.32	%	2.32	%	2.25	%	2.25	%
Other interest-earning assets	7.47	%	7.14	%	7.91	%	6.87	%	6.26	%
Total interest-earning assets	4.61	%	4.59	%	4.51	%	4.47	%	4.36	%
Average cost of interest-bearing liabilities:
Deposits:
Interest-bearing demand	3.13	%	3.06	%	3.08	%	2.91	%	2.58	%
Savings	1.05	%	0.63	%	0.46	%	0.44	%	0.47	%
Certificates of deposit	3.51	%	3.35	%	3.11	%	2.82	%	2.49	%
Total interest-bearing deposits	2.98	%	2.83	%	2.74	%	2.53	%	2.23	%
Borrowings:
Federal Home Loan Bank advances	3.82	%	3.86	%	3.55	%	3.82	%	3.54	%
Other borrowings	5.28	%	5.24	%	5.22	%	5.65	%	5.46	%
Total borrowings	4.04	%	4.04	%	3.77	%	3.97	%	3.74	%
Total interest-bearing liabilities	3.24	%	3.16	%	3.00	%	2.90	%	2.59	%
Interest rate spread (2)	1.37	%	1.43	%	1.51	%	1.57	%	1.77	%
Net interest margin (3)	1.80	%	1.84	%	1.89	%	1.94	%	2.10	%
Non-interest income to average assets (annualized)	0.24	%	0.30	%	0.21	%	-0.81	%	0.20	%
Non-interest expense to average assets (annualized)	1.55	%	6.58	%	1.48	%	1.50	%	1.49	%
Efficiency ratio (4)	80.35	%	323.81	%	75.43	%	150.13	%	68.97	%
Return on average assets (annualized)	0.32	%	-4.68	%	0.38	%	-0.70	%	0.49	%
Return on average equity (annualized)	3.25	%	-47.97	%	3.50	%	-6.59	%	4.57	%
Return on average tangible equity (annualized) (5)	3.89	%	3.33	%	4.68	%	-8.84	%	6.07	%
_________________________
(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)	September 30,2024			June 30,2024			March 31,2024			December 31,2023			September 30,2023
Adjusted net income:
Net income (loss) (GAAP)	$	6,092		$	(90,079	)	$	7,397		$	(13,827	)	$	9,842
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	$	6,092		$	5,596		$	7,397		$	5,335		$	9,842
Calculation of pre-tax, pre-provision net revenue:
Net income (loss) (GAAP)	$	6,092		$	(90,079	)	$	7,397		$	(13,827	)	$	9,842
Adjustments to net income (GAAP):
Provision for income taxes		1,086			(917	)		1,717			1,782			3,309
Provision for credit losses		108			3,527			349			2,105			245
Pre-tax, pre-provision net revenue (non-GAAP)	$	7,286		$	(87,469	)	$	9,463		$	(9,940	)	$	13,396
Adjusted earnings per share:
Weighted average common shares - basic		62,389			62,254			62,205			62,299			63,014
Weighted average common shares - diluted		62,420			62,330			62,211			62,367			63,061
Earnings per share - basic (GAAP)	$	0.10		$	(1.45	)	$	0.12		$	(0.22	)	$	0.16
Earnings per share - diluted (GAAP)	$	0.10		$	(1.45	)	$	0.12		$	(0.22	)	$	0.16
Adjusted earnings per share - basic (non-GAAP)	$	0.10		$	0.09		$	0.12		$	0.09		$	0.16
Adjusted earnings per share - diluted (non-GAAP)	$	0.10		$	0.09		$	0.12		$	0.09		$	0.16
Pre-tax, pre-provision net revenue per share:
Pre-tax, pre-provision net revenue per share - basic  (non-GAAP)	$	0.12		$	(1.41	)	$	0.15		$	(0.16	)	$	0.21
Pre-tax, pre-provision net revenue per share - diluted  (non-GAAP)	$	0.12		$	(1.40	)	$	0.15		$	(0.16	)	$	0.21
Adjusted return on average assets:
Total average assets	$	7,688,433		$	7,695,080		$	7,851,721		$	7,944,586		$	8,019,502
Return on average assets (GAAP)		0.32	%		-4.68	%		0.38	%		-0.70	%		0.49	%
Adjusted return on average assets (non-GAAP)		0.32	%		0.29	%		0.38	%		0.27	%		0.49	%
Adjusted return on average equity:
Total average equity	$	750,678		$	751,070		$	844,782		$	838,714		$	862,128
Return on average equity (GAAP)		3.25	%		-47.97	%		3.50	%		-6.59	%		4.57	%
Adjusted return on average equity (non-GAAP)		3.25	%		2.98	%		3.50	%		2.54	%		4.57	%

Kearny Financial Corp.Reconciliation of GAAP to Non-GAAP(Unaudited)
	Three Months Ended
(Dollars and Shares in Thousands,Except Per Share Data)	September 30,2024			June 30,2024			March 31,2024			December 31,2023			September 30,2023
Adjusted return on average tangible equity:
Total average equity	$	750,678		$	751,070		$	844,782		$	838,714		$	862,128
Less: average goodwill		(113,525	)		(113,525	)		(210,895	)		(210,895	)		(210,895	)
Less: average other intangible assets		(1,886	)		(2,006	)		(2,138	)		(2,277	)		(2,411	)
Total average tangible equity	$	635,267		$	635,539		$	631,749		$	625,542		$	648,822
Return on average tangible equity (non-GAAP)		3.89	%		3.33	%		4.68	%		-8.84	%		6.07	%
Adjusted return on average tangible equity (non-GAAP)		3.89	%		3.58	%		4.68	%		3.41	%		6.07	%
Adjusted non-interest expense ratio:
Non-interest expense (GAAP)	$	29,786		$	126,551		$	29,059		$	29,767		$	29,774
Non-recurring transactions:
Goodwill impairment		—			(97,370	)		—			—			—
Non-interest expense (non-GAAP)	$	29,786		$	29,181		$	29,059		$	29,767		$	29,774
Non-interest expense ratio (GAAP)		1.55	%		6.58	%		1.48	%		1.50	%		1.49	%
Adjusted non-interest expense ratio (non-GAAP)		1.55	%		1.52	%		1.48	%		1.50	%		1.49	%
Adjusted efficiency ratio:
Non-interest expense (non-GAAP)	$	29,786		$	29,181		$	29,059		$	29,767		$	29,774
Net interest income (GAAP)	$	32,446		$	33,276		$	34,319		$	35,839		$	39,160
Total non-interest income (GAAP)		4,626			5,806			4,203			(16,012	)		4,010
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)	$	37,072		$	39,474		$	38,522		$	38,535		$	43,170
Efficiency ratio (GAAP)		80.35	%		323.81	%		75.43	%		150.13	%		68.97	%
Adjusted efficiency ratio (non-GAAP)		80.35	%		73.92	%		75.43	%		77.25	%		68.97	%