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Stock Based Compensation | 12 Months Ended
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Jun. 30, 2023
Share-Based Payment Arrangement [Abstract] |
Stock Based Compensation | Stock Based Compensation Kearny Financial Corp. 2021 Equity Incentive Plan (“2021 Plan”) At the Company’s 2021 Annual Meeting of Stockholders held on October 28, 2021, the stockholders approved the 2021 Plan which provides for the grant of stock options, restricted stock and restricted stock units (“RSUs”). The 2021 Plan authorized the issuance of up to 7,500,000 shares (the “Share Limit”); provided, however that the Share Limit is reduced, on a one-for-one-basis, for each share of common stock subject to a stock option grant, and on a three-for-one basis for each share of common stock issued pursuant to restricted stock awards or RSUs. During the years ended June 30, 2023 and 2022, the Company granted 323,218 RSUs (comprised of 238,121 service-based RSUs and 85,097 performance-based RSUs) and 251,905 RSUs (comprised of 181,588 service-based RSUs and 70,317 performance-based RSUs), respectively. The service-based RSUs generally vest in three tranches over a period of 3.0 years and the performance-based RSUs will cliff vest upon the achievement of performance measures over a three-year period. The total number of performance-based RSUs that will vest, if any, will depend on whether and to what extent the performance measures are achieved. Common stock will be issued from authorized shares upon the vesting of the RSUs. At June 30, 2023, there were 5,825,421 shares remaining available for future grants of stock options, restricted stock or RSUs under the 2021 Plan, subject to the limitations noted above. Kearny Financial Corp. 2016 Equity Incentive Plan (“2016 Plan”) No grants were made under the 2016 Plan during the years ended June 30, 2023 and 2022. As of October 28, 2021, the 2016 Plan was frozen and the Company no longer makes grants under the 2016 Plan. Stock options granted under the 2016 Plan vest in equal installments over a five-year service period. Stock options were granted at an exercise price equal to the fair value of the Company's common stock on the grant date based on the closing market price and have an expiration period of 10 years. No stock options were granted during the years ended June 30, 2023, 2022 and 2021. There were no restricted stock awards granted during the years ended June 30, 2023 and 2022. There were 53,706 restricted stock awards granted during the year ended June 30, 2021. 2021 Plan and 2016 Plan The following table presents stock-based compensation expense for the years ended June 30, 2023, 2022 and 2021:
| Years Ended June 30,
| 2023 |  | 2022 |  | 2021
Stock option expense | $ | 153 |  |  | $ | 849 |  |  | $ | 1,823 |
Restricted stock expense | 725 |  |  | 2,049 |  |  | 3,850 |
Restricted stock unit expense | 2,058 |  |  | 896 |  |  | — |
Total stock-based compensation expense | $ | 2,936 |  |  | $ | 3,794 |  |  | $ | 5,673 |
During the years ended June 30, 2023, 2022 and 2021, the income tax benefit attributed to our stock-based compensation expense was $836,000, $1.0 million and $1.6 million, respectively. Stock Options The following is a summary of the Company’s stock option activity and related information for its option plans for the year ended June 30, 2023:
| Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
| (In Thousands) |  |  |  |  |  | (In Thousands)
Outstanding at June 30, 2022 | 3,253 |  |  | $ | 14.97 |  |  | 4.5 years |  | $ | 61 |
Granted | — |  |  | — |  |  | — |  |
Exercised | — |  |  | — |  |  | — |  |
Forfeited | (269) |  |  | 14.76 |  |  |  |  |
Outstanding at June 30, 2023 | 2,984 |  |  | $ | 14.99 |  |  | 3.5 years |  | $ | — |
Exercisable at June 30, 2023 | 2,924 |  |  | $ | 15.03 |  |  | 3.5 years |  | $ | — |
The Company generally issues shares from authorized but unissued shares upon the exercise of vested options. There were no vested options exercised during the years ended June 30, 2023 and 2022. A total of 41,412 vested options, with an aggregate intrinsic value of $158,000, were exercised during the year ended June 30, 2021. In fulfillment of these exercises, the Company issued 41,412 shares from authorized but unissued shares. The cash proceeds from stock option exercises during the year ended June 30, 2021 totaled approximately $373,000. A portion of such exercises represented disqualifying dispositions of incentive stock options for which the Company recognized $47,000 in income tax benefit. Expected future compensation expense relating to the 60,000 non-vested options outstanding as of June 30, 2023 is $59,000 over a weighted average period of 0.5 years. Restricted Stock Restricted shares awarded under the 2016 Plan generally vest in equal installments over a five-year service period. In addition to the requisite service period, the vesting of certain restricted shares awarded to management are also conditioned upon the achievement of one or more objective performance factors established by the Compensation Committee of the Company’s Board of Directors. In accordance with the terms of the 2016 Plan, such factors may be based on the performance of the Company as a whole or on any one or more business units of the Company or its subsidiaries. Performance factors may be measured relative to a peer group, an index or certain financial targets established in the Company's strategic business plan and budget. The Company fully achieved the applicable performance targets for fiscal 2022 and therefore all eligible performance-based restricted shares successfully vested during the year ended June 30, 2023. The performance factors and underlying cost basis of the remaining unvested performance-based restricted shares are generally expected to be determined annually concurrent with the anniversary date of the original grants. For service based awards management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period. For performance vesting awards management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period; however, if the corporate performance goals to which the vesting of such shares are tied are not achieved, recognized compensation expense is adjusted accordingly. The following is a summary of the Company’s restricted share award activity for the year ended June 30, 2023:
| Vesting Contingent on Service Conditions |  | Vesting Contingent on Performance and Service Conditions
| Restricted Shares |  | Weighted Average Grant Date Fair Value |  | Restricted Shares |  | Weighted Average Grant Date Fair Value
| (In Thousands) |  |  |  | (In Thousands) |  |
Non-vested at June 30, 2022 | 75 |  |  | $ | 13.34 |  |  | 61 |  |  | $ | 13.33 |
Granted | — |  |  | — |  |  | — |  |  | — |
Vested | (32) |  |  | 13.38 |  |  | (25) |  |  | 13.38 |
Forfeited | — |  |  | — |  |  | — |  |  | — |
Non-vested at June 30, 2023 | 43 |  |  | $ | 13.31 |  |  | 36 |  |  | $ | 13.30 |
During the years ended June 30, 2023, 2022 and 2021, the total fair value of vested restricted shares were $767,000, $4.3 million and $4.2 million, respectively. Expected future compensation expense relating to the 78,826 non-vested restricted shares at June 30, 2023 is $527,000 over a weighted average period of 2.9 years. Restricted Stock Units RSUs awarded under the 2021 Plan generally vest in equal installments over a specified service period. In addition to the requisite service period, the vesting of certain RSUs are also conditioned upon the achievement of one or more objective performance measures established by the Compensation Committee of the Company’s Board of Directors. In accordance with the terms of the 2021 Plan, such measures may be based on the performance of the Company as a whole or on any one or more business units of the Company or its subsidiaries. Performance measures may be measured relative to a peer group, an index or certain financial targets established in the Company’s strategic business plan and budget. For service-based RSUs, the Company recognizes compensation expense for the fair value of RSUs on a straight-line basis over the requisite service period of each tranche. For performance-based RSUs, the Company recognizes compensation expense for the fair value of RSUs on a straight-line basis over the requisite service period; however, the compensation will be adjusted accordingly based on the achievement of the performance measures. The following is a summary of the Company’s RSU activity for the year ended June 30, 2023:
| Vesting Contingent on Service Conditions |  | Vesting Contingent on Performance and Service Conditions
| Restricted Stock Units |  | Weighted Average Grant Date Fair Value |  | Restricted Stock Units |  | Weighted Average Grant Date Fair Value
| (In Thousands) |  |  |  | (In Thousands) |  |
Non-vested at June 30, 2022 | 182 |  |  | $ | 13.68 |  |  | 70 |  |  | $ | 13.68 |
Granted | 238 |  |  | 11.85 |  | 85 |  |  | 11.85
Vested | (61) |  |  | 13.68 |  | — |  |  | —
Forfeited | (17) |  |  | 12.73 |  | — |  |  | —
Non-vested at June 30, 2023 | 342 |  |  | $ | 12.45 |  |  | 155 |  |  | $ | 12.68 |
Expected future compensation expense relating to the 497,664 non-vested RSUs at June 30, 2023 is $3.6 million over a weighted average period of 2.1 years.

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