EX-99.1 2 krny-20240125xexx991.htm EX-99.1
Exhibit 99.1
FOR IMMEDIATE RELEASE
January 25, 2024
For further information contact:
Craig L. Montanaro, President and Chief Executive Officer, or
Keith Suchodolski, Senior Executive Vice President and Chief Financial Officer
Kearny Financial Corp.
(973) 244-4500
KEARNY FINANCIAL CORP. ANNOUNCES SECOND QUARTER FISCAL 2024 RESULTS
AND DECLARATION OF CASH DIVIDEND
Fairfield, N.J., January 25, 2024 – Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported a net loss for the quarter ended December 31, 2023 of $9.0 million, or $0.14 per diluted share, compared to net income of $9.8 million, or $0.16 per diluted share, for the quarter ended September 30, 2023. Earnings for the current quarter were adversely impacted by a number of non-recurring items, as discussed in further detail below.
The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on February 21, 2024, to stockholders of record as of February 7, 2024.
Craig L. Montanaro, President and Chief Executive Officer, commented, “This quarter we executed strategies, as described in further detail below, to enhance our balance sheet, liquidity position, risk profile and asset quality metrics. In addition, we have begun to see deposit pressures ease, while run-rate non-interest expense remains very well controlled. As we look ahead, we remain laser-focused on sustainable growth in core loan and deposit relationships, while continuing to further leverage our recently implemented, best-in-class, digital banking platform.”
Strategic Actions Taken During the Quarter Ended December 31, 2023
Investment Securities Repositioning
As previously announced, the Company executed the sale of $122.2 million of its available-for-sale (“AFS”) debt securities. The sale resulted in a pre-tax net loss of $18.1 million and had a nominal impact on tangible book value, as the loss was previously reflected in capital via accumulated other comprehensive loss. Proceeds from the sale were utilized to retire higher-cost wholesale funding and to reinvest in loans yielding approximately 7.0%.
Bank-Owned Life Insurance (“BOLI”) Restructuring
The Company initiated a restructuring of its BOLI portfolio in which $103.4 million of policies yielding 2.1% were exchanged or surrendered and replaced with policies yielding 4.1%. As a result of this restructure, the Company recognized tax expense of $5.7 million and exchange charges of $573 thousand, partially offset by a non-recurring increase in cash surrender value of $4.8 million.
Resolution of Non-performing Assets (“NPAs”)
At December 31, 2023, the Company was under contract to sell a $12.0 million Other Real Estate Owned (“OREO”) asset that was subsequently sold in January 2024. Proceeds from the sale were immediately redeployed into interest earning assets and will improve forward-looking earnings thru the reduction of net OREO expenses, which totaled approximately $469 thousand for the quarter ended December 31, 2023.
In addition, the Company reclassified three non-performing commercial real estate loans to loans held-for-sale as a result of its intent to sell these assets in the near term. These loans are attributable to one borrower relationship and had a fair value of $9.7 million at December 31, 2023.
Hedging Activities
As part of the ongoing strategy to manage interest rate risk and support earnings, the Company added $500.0 million of derivative notional, comprised of $200.0 million of cash flow swaps and $300.0 million of interest rate floor spreads, all of which mature in two years or less. Collectively, these derivatives hedge a portion of the Company’s wholesale funding position and mitigate the interest rate risk associated with a modest decrease in short-term interest rates.
1

Balance Sheet
•Total assets were $7.90 billion at December 31, 2023, a decrease of $72.2 million, or 0.9%, from September 30, 2023.
•Investment securities totaled $1.29 billion at December 31, 2023, a decrease of $73.2 million, or 5.4%, from September 30, 2023. The decrease for the quarter was largely driven by the sale of available-for-sale debt securities, as discussed above.
•Loans receivable totaled $5.75 billion at December 31, 2023, an increase of $9.6 million, or 0.2%, from September 30, 2023.
•BOLI totaled $260.9 million at December 31, 2023, a decrease of $33.6 million, or 11.4%, from September 30, 2023. The decrease for the quarter was largely attributable to the surrender of $43.2 million of BOLI policies, as discussed above, that did not settle until January 2024.
•Deposits were $5.32 billion at December 31, 2023, a decrease of $114.5 million, or 2.1%, from September 30, 2023. Excluding a decrease of $154.5 million in brokered certificates of deposits, deposits increased $40.0 million, or 0.8%, from September 30, 2023.
•The aggregate amount of uninsured deposits at the Bank was $1.81 billion at December 31, 2023. Excluding collateralized deposits of state and local governments and deposits of the Bank’s wholly-owned subsidiary and holding company, the aggregate amount of uninsured deposits was $694.5 million, or 13.1% of total deposits.
•Borrowings were $1.67 billion at December 31, 2023, an increase of $40.1 million, or 2.5%, from September 30, 2023.
•At December 31, 2023, the Company maintained available secured borrowing capacity of $1.78 billion, of which $1.38 billion was immediately accessible via in-place collateral and $400.8 million represented the market value of unpledged securities.
Earnings
Net Interest Income and Net Interest Margin
•Net interest margin contracted 16 basis point to 1.94% for the quarter ended December 31, 2023. The decrease for the quarter was driven by an increase in the cost of interest-bearing liabilities and a decrease in the average balance of interest-earning assets, partially offset by a higher yield on interest-earning assets.
•For the quarter ended December 31, 2023, net interest income decreased $3.3 million to $35.8 million from $39.2 million for the quarter ended September 30, 2023. Included in net interest income for the quarters ended December 31, 2023 and September 30, 2023, respectively, was purchase accounting accretion of $640,000 and $650,000, and loan prepayment penalty income of $185,000 and $267,000.
Non-Interest Income
•For the quarter ended December 31, 2023, non-interest income decreased $15.2 million from the quarter ended September 30, 2023 to a loss of $11.2 million. The decrease was primarily attributable to a pre-tax loss of $18.1 million related to the investment securities portfolio repositioning, as discussed above.
•Income from BOLI increased $4.3 million to $6.0 million for the quarter ended December 31, 2023 from $1.7 million for the quarter ended September 30, 2023. The increase was largely attributable to non-recurring income related to the BOLI restructure, as discussed above.
•Included in other income for the quarter ended December 31, 2023 were non-recurring losses of $974,000 attributable to the write-down of one OREO property, as discussed above. No such losses were recorded during the quarter ended September 30, 2023. OREO income for the quarter ended December 31, 2023 was $182,000.
Non-Interest Expense
•For the quarter ended December 31, 2023, non-interest expense remained flat at $29.8 million compared to the quarter ended September 30, 2023.
•Included in other expenses for the quarter ended December 31, 2023 were OREO expenses totaling $651,000.
2

Income Taxes
•Income tax expense totaled $1.8 million for the quarter ended December 31, 2023 compared to $3.3 million for the quarter ended September 30, 2023. The decrease in income tax expense was due to lower pre-tax income, primarily attributable to realized losses on the sale of securities, as discussed above, partially offset by $5.7 million of tax expense related to the surrender of BOLI policies, as discussed above.
Asset Quality
•The balance of non-performing assets decreased $1.1 million to $49.8 million, or 0.63% of total assets, at December 31, 2023, from $50.9 million, or 0.64% of total assets, at September 30, 2023. Adjusting for the sale of the OREO asset completed in January 2024, the non-performing assets decrease to $37.8 million, or 0.48% of total assets.
•Net charge-offs totaled $4.1 million, or 0.29% of average loans, on an annualized basis, for the quarter ended December 31, 2023, compared to $2.1 million, or 0.15% of average loans, on an annualized basis, for the quarter ended September 30, 2023. The charge-offs recorded during the quarter ended December 31, 2023 were primarily driven by the reclassification of three non-performing loans to held-for-sale status, reflecting the Company’s intent to sell these assets, as discussed above. Of the $4.1 million of net charge-offs recorded during the quarter ended December 31, 2023, $1.7 million had previously been individually reserved for within the allowance for credit losses.
•For the quarter ended December 31, 2023, the Company recorded a provision for credit losses of $2.1 million, compared to $245,000 for the quarter ended September 30, 2023. The provision for credit loss expense for the quarter ended December 31, 2023 was primarily attributable to charge-offs on the three commercial real estate loans, as discussed above.
•The allowance for credit losses (“ACL”) was $44.9 million, or 0.78% of total loans, at December 31, 2023, compared to $46.9 million, or 0.81% of total loans, at September 30, 2023. The decrease in the ACL was largely attributable to a reduction in reserves for individually evaluated loans, resulting from the charge-offs noted above.
Capital
•During the quarter ended December 31, 2023, the Company repurchased 687,140 shares of common stock at a cost of $4.7 million, or $6.88 per share.
•On November 7, 2023, the Company announced the completion of its ninth stock repurchase plan which authorized the repurchase of 4,000,000 shares. Such shares were repurchased at a cost of $34.9 million, or $8.74 per share.
•For the quarter ended December 31, 2023, book value per share increased $0.19, or 1.5%, to $13.23 while tangible book value per share increased $0.16, or 1.6%, to $9.93. These increases were largely driven by a decrease in accumulated other comprehensive loss.
•At December 31, 2023, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $88.6 million, partially offset by after-tax unrealized gains on derivatives of $24.6 million. After-tax net unrecognized losses on securities held to maturity of $10.0 million were not reflected in total stockholders’ equity.
•At December 31, 2023, the Company’s tangible equity to tangible assets ratio equaled 8.32% 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 2024 Investor Presentation, a copy of which is available through the Investor Relations link located at the bottom of the page of our website at www.kearnybank.com and via a Current Report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.
Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.
Category: Earnings
3

Linked-Quarter Comparative Financial Analysis

Kearny Financial Corp.
Consolidated Balance Sheets
(Unaudited)

(Dollars and Shares in Thousands, Except Per Share Data) | December 31, 2023 | September 30, 2023 | Variance or Change | Variance or Change Pct.
Assets |  |  |  |
Cash and cash equivalents | $ | 73,860 |  | $ | 57,219 |  | $ | 16,641 |  | 29.1 | %
Securities available for sale | 1,144,175 |  | 1,215,633 |  | (71,458) |  | -5.9 | %
Securities held to maturity | 141,959 |  | 143,730 |  | (1,771) |  | -1.2 | %
Loans held-for-sale | 14,030 |  | 3,934 |  | 10,096 |  | 256.6 | %
Loans receivable | 5,745,629 |  | 5,736,049 |  | 9,580 |  | 0.2 | %
Less: allowance for credit losses on loans | (44,867) |  | (46,872) |  | (2,005) |  | -4.3 | %
Net loans receivable | 5,700,762 |  | 5,689,177 |  | 11,585 |  | 0.2 | %
Premises and equipment | 45,928 |  | 46,868 |  | (940) |  | -2.0 | %
Federal Home Loan Bank stock | 83,372 |  | 81,509 |  | 1,863 |  | 2.3 | %
Accrued interest receivable | 30,258 |  | 29,766 |  | 492 |  | 1.7 | %
Goodwill | 210,895 |  | 210,895 |  | — |  | — | %
Core deposit intangible | 2,189 |  | 2,323 |  | (134) |  | -5.8 | %
Bank owned life insurance | 260,869 |  | 294,491 |  | (33,622) |  | -11.4 | %
Deferred income taxes, net | 46,116 |  | 56,500 |  | (10,384) |  | -18.4 | %
Other real estate owned | 11,982 |  | 12,956 |  | (974) |  | -7.5 | %
Other assets | 136,242 |  | 129,865 |  | 6,377 |  | 4.9 | %
Total assets | $ | 7,902,637 |  | $ | 7,974,866 |  | $ | (72,229) |  | -0.9 | %
Liabilities |  |  |  |
Deposits: |  |  |  |
Non-interest-bearing | $ | 584,130 |  | $ | 595,141 |  | $ | (11,011) |  | -1.9 | %
Interest-bearing | 4,735,500 |  | 4,839,027 |  | (103,527) |  | -2.1 | %
Total deposits | 5,319,630 |  | 5,434,168 |  | (114,538) |  | -2.1 | %
Borrowings | 1,667,055 |  | 1,626,933 |  | 40,122 |  | 2.5 | %
Advance payments by borrowers for taxes | 16,742 |  | 16,907 |  | (165) |  | -1.0 | %
Other liabilities | 46,427 |  | 47,324 |  | (897) |  | -1.9 | %
Total liabilities | 7,049,854 |  | 7,125,332 |  | (75,478) |  | -1.1 | %
Stockholders' Equity |  |  |  |
Common stock | 645 |  | 652 |  | (7) |  | -1.1 | %
Paid-in capital | 493,296 |  | 497,269 |  | (3,973) |  | -0.8 | %
Retained earnings | 444,561 |  | 460,464 |  | (15,903) |  | -3.5 | %
Unearned ESOP shares | (21,889) |  | (22,375) |  | 486 |  | 2.2 | %
Accumulated other comprehensive loss | (63,830) |  | (86,476) |  | 22,646 |  | 26.2 | %
Total stockholders' equity | 852,783 |  | 849,534 |  | 3,249 |  | 0.4 | %
Total liabilities and stockholders' equity | $ | 7,902,637 |  | $ | 7,974,866 |  | $ | (72,229) |  | -0.9 | %
Consolidated capital ratios |  |  |  |
Equity to assets | 10.79 | % | 10.65 | % | 0.14 | % |
Tangible equity to tangible assets (1) | 8.32 | % | 8.20 | % | 0.12 | % |
Share data |  |  |  |
Outstanding shares | 64,445 | 65,132 | (687) | -1.1 | %
Book value per share | $ | 13.23 |  | $ | 13.04 |  | $ | 0.19 |  | 1.5 | %
Tangible book value per share (2) | $ | 9.93 |  | $ | 9.77 |  | $ | 0.16 |  | 1.6 | %

_________________________
(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.
4

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.
December 31, 2023 | September 30, 2023
Interest income |  |  |  |
Loans | $ | 63,384 |  | $ | 62,769 |  | $ | 615 |  | 1.0 | %
Taxable investment securities | 16,756 |  | 16,265 |  | 491 |  | 3.0 | %
Tax-exempt investment securities | 84 |  | 87 |  | (3) |  | -3.4 | %
Other interest-earning assets | 2,401 |  | 2,047 |  | 354 |  | 17.3 | %
Total interest income | 82,625 |  | 81,168 |  | 1,457 |  | 1.8 | %
Interest expense |  |  |  |
Deposits | 30,340 |  | 27,567 |  | 2,773 |  | 10.1 | %
Borrowings | 16,446 |  | 14,441 |  | 2,005 |  | 13.9 | %
Total interest expense | 46,786 |  | 42,008 |  | 4,778 |  | 11.4 | %
Net interest income | 35,839 |  | 39,160 |  | (3,321) |  | -8.5 | %
Provision for credit losses | 2,105 |  | 245 |  | 1,860 |  | 759.2 | %
Net interest income after provision for credit losses | 33,734 |  | 38,915 |  | (5,181) |  | -13.3 | %
Non-interest income |  |  |  |
Fees and service charges | 624 |  | 748 |  | (124) |  | -16.6 | %
Loss on sale and call of securities | (18,135) |  | — |  | (18,135) |  | — | %
Gain on sale of loans | 104 |  | 215 |  | (111) |  | -51.6 | %
Loss on sale of other real estate owned | (974) |  | — |  | (974) |  | — | %
Income from bank owned life insurance | 5,967 |  | 1,666 |  | 4,301 |  | 258.2 | %
Electronic banking fees and charges | 396 |  | 367 |  | 29 |  | 7.9 | %
Other income | 812 |  | 1,014 |  | (202) |  | -19.9 | %
Total non-interest income | (11,206) |  | 4,010 |  | (15,216) |  | -379.5 | %
Non-interest expense |  |  |  |
Salaries and employee benefits | 17,282 |  | 17,761 |  | (479) |  | -2.7 | %
Net occupancy expense of premises | 2,674 |  | 2,758 |  | (84) |  | -3.0 | %
Equipment and systems | 3,814 |  | 3,801 |  | 13 |  | 0.3 | %
Advertising and marketing | 301 |  | 228 |  | 73 |  | 32.0 | %
Federal deposit insurance premium | 1,495 |  | 1,524 |  | (29) |  | -1.9 | %
Directors' compensation | 393 |  | 393 |  | — |  | — | %
Other expense | 3,808 |  | 3,309 |  | 499 |  | 15.1 | %
Total non-interest expense | 29,767 |  | 29,774 |  | (7) |  | — | %
(Loss) income before income taxes | (7,239) |  | 13,151 |  | (20,390) |  | -155.0 | %
Income taxes | 1,782 |  | 3,309 |  | (1,527) |  | -46.1 | %
Net (loss) income | $ | (9,021) |  | $ | 9,842 |  | $ | (18,863) |  | -191.7 | %
Net (loss) income per common share (EPS) |  |  |  |
Basic | $ | (0.14) |  | $ | 0.16 |  | $ | (0.30) |  |
Diluted | $ | (0.14) |  | $ | 0.16 |  | $ | (0.30) |  |
Dividends declared |  |  |  |
Cash dividends declared per common share | $ | 0.11 |  | $ | 0.11 |  | $ | — |  |
Cash dividends declared | $ | 6,882 |  | $ | 6,989 |  | $ | (107) |  |
Dividend payout ratio | -76.3 | % | 71.0 | % | -147.3 | % |
Weighted average number of common shares outstanding |  |  |  |
Basic | 62,299 | 63,014 | (715) |
Diluted | 62,367 | 63,061 | (694) |

5

Kearny Financial Corp.
Average Balance Sheet Data
(Unaudited)

(Dollars in Thousands) | Three Months Ended | Variance or Change | Variance or Change Pct.
December 31, 2023 | September 30, 2023
Assets |  |  |  |
Interest-earning assets: |  |  |  |
Loans receivable, including loans held for sale | $ | 5,726,321 |  | $ | 5,788,074 |  | $ | (61,753) |  | -1.1 | %
Taxable investment securities | 1,509,165 |  | 1,516,393 |  | (7,228) |  | -0.5 | %
Tax-exempt investment securities | 15,025 |  | 15,483 |  | (458) |  | -3.0 | %
Other interest-earning assets | 139,740 |  | 130,829 |  | 8,911 |  | 6.8 | %
Total interest-earning assets | 7,390,251 |  | 7,450,779 |  | (60,528) |  | -0.8 | %
Non-interest-earning assets | 554,492 |  | 568,723 |  | (14,231) |  | -2.5 | %
Total assets | $ | 7,944,743 |  | $ | 8,019,502 |  | $ | (74,759) |  | -0.9 | %
Liabilities and Stockholders' Equity |  |  |  |
Interest-bearing liabilities: |  |  |  |
Deposits: |  |  |  |
Interest-bearing demand | $ | 2,301,169 |  | $ | 2,245,831 |  | $ | 55,338 |  | 2.5 | %
Savings | 664,926 |  | 719,508 |  | (54,582) |  | -7.6 | %
Certificates of deposit | 1,824,316 |  | 1,968,512 |  | (144,196) |  | -7.3 | %
Total interest-bearing deposits | 4,790,411 |  | 4,933,851 |  | (143,440) |  | -2.9 | %
Borrowings: |  |  |  |
Federal Home Loan Bank advances | 1,513,497 |  | 1,386,473 |  | 127,024 |  | 9.2 | %
Other borrowings | 142,283 |  | 158,098 |  | (15,815) |  | -10.0 | %
Total borrowings | 1,655,780 |  | 1,544,571 |  | 111,209 |  | 7.2 | %
Total interest-bearing liabilities | 6,446,191 |  | 6,478,422 |  | (32,231) |  | -0.5 | %
Non-interest-bearing liabilities: |  |  |  |
Non-interest-bearing deposits | 597,294 |  | 612,251 |  | (14,957) |  | -2.4 | %
Other non-interest-bearing liabilities | 62,387 |  | 66,701 |  | (4,314) |  | -6.5 | %
Total non-interest-bearing liabilities | 659,681 |  | 678,952 |  | (19,271) |  | -2.8 | %
Total liabilities | 7,105,872 |  | 7,157,374 |  | (51,502) |  | -0.7 | %
Stockholders' equity | 838,871 |  | 862,128 |  | (23,257) |  | -2.7 | %
Total liabilities and stockholders' equity | $ | 7,944,743 |  | $ | 8,019,502 |  | $ | (74,759) |  | -0.9 | %
Average interest-earning assets to average interest-bearing liabilities | 114.65 | % | 115.01 | % | -0.36 | % | -0.3 | %

6

Kearny Financial Corp.
Performance Ratio Highlights
(Unaudited)

| Three Months Ended | Variance or Change
| December 31, 2023 | September 30, 2023
Average yield on interest-earning assets: |  |  |
Loans receivable, including loans held for sale | 4.43 | % | 4.34 | % | 0.09 | %
Taxable investment securities | 4.44 | % | 4.29 | % | 0.15 | %
Tax-exempt investment securities (1) | 2.25 | % | 2.25 | % | — | %
Other interest-earning assets | 6.87 | % | 6.26 | % | 0.61 | %
Total interest-earning assets | 4.47 | % | 4.36 | % | 0.11 | %
Average cost of interest-bearing liabilities: |  |  |
Deposits: |  |  |
Interest-bearing demand | 2.91 | % | 2.58 | % | 0.33 | %
Savings | 0.44 | % | 0.47 | % | -0.03 | %
Certificates of deposit | 2.82 | % | 2.49 | % | 0.33 | %
Total interest-bearing deposits | 2.53 | % | 2.23 | % | 0.30 | %
Borrowings: |  |  |
Federal Home Loan Bank advances | 3.82 | % | 3.54 | % | 0.28 | %
Other borrowings | 5.65 | % | 5.46 | % | 0.19 | %
Total borrowings | 3.97 | % | 3.74 | % | 0.23 | %
Total interest-bearing liabilities | 2.90 | % | 2.59 | % | 0.31 | %
Interest rate spread (2) | 1.57 | % | 1.77 | % | -0.20 | %
Net interest margin (3) | 1.94 | % | 2.10 | % | -0.16 | %
Non-interest income to average assets (annualized) | -0.56 | % | 0.20 | % | -0.76 | %
Non-interest expense to average assets (annualized) | 1.50 | % | 1.49 | % | 0.01 | %
Efficiency ratio (4) | 120.84 | % | 68.97 | % | 51.87 | %
Return on average assets (annualized) | -0.45 | % | 0.49 | % | -0.94 | %
Return on average equity (annualized) | -4.30 | % | 4.57 | % | -8.87 | %
Return on average tangible equity (annualized) (5) | -5.77 | % | 6.07 | % | -11.84 | %

_________________________
(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.
7

Five-Quarter Financial Trend Analysis

Kearny Financial Corp.
Consolidated Balance Sheets

(Dollars and Shares in Thousands, Except Per Share Data) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022
| (Unaudited) | (Unaudited) | (Audited) | (Unaudited) | (Unaudited)
Assets |  |  |  |  |
Cash and cash equivalents | $ | 73,860 |  | $ | 57,219 |  | $ | 70,515 |  | $ | 194,568 |  | $ | 75,660 |
Securities available for sale | 1,144,175 |  | 1,215,633 |  | 1,227,729 |  | 1,267,066 |  | 1,286,354 |
Securities held to maturity | 141,959 |  | 143,730 |  | 146,465 |  | 149,764 |  | 153,786 |
Loans held-for-sale | 14,030 |  | 3,934 |  | 9,591 |  | 5,401 |  | 12,940 |
Loans receivable | 5,745,629 |  | 5,736,049 |  | 5,829,421 |  | 5,966,325 |  | 5,984,133 |
Less: allowance for credit losses on loans | (44,867) |  | (46,872) |  | (48,734) |  | (49,122) |  | (48,877) |
Net loans receivable | 5,700,762 |  | 5,689,177 |  | 5,780,687 |  | 5,917,203 |  | 5,935,256 |
Premises and equipment | 45,928 |  | 46,868 |  | 48,309 |  | 49,589 |  | 50,953 |
Federal Home Loan Bank stock | 83,372 |  | 81,509 |  | 71,734 |  | 76,319 |  | 69,022 |
Accrued interest receivable | 30,258 |  | 29,766 |  | 28,133 |  | 28,794 |  | 27,368 |
Goodwill | 210,895 |  | 210,895 |  | 210,895 |  | 210,895 |  | 210,895 |
Core deposit intangible | 2,189 |  | 2,323 |  | 2,457 |  | 2,590 |  | 2,732 |
Bank owned life insurance | 260,869 |  | 294,491 |  | 292,825 |  | 291,220 |  | 289,673 |
Deferred income taxes, net | 46,116 |  | 56,500 |  | 51,973 |  | 53,151 |  | 51,107 |
Other real estate owned | 11,982 |  | 12,956 |  | 12,956 |  | 13,410 |  | 13,410 |
Other assets | 136,242 |  | 129,865 |  | 110,546 |  | 89,366 |  | 110,162 |
Total assets | $ | 7,902,637 |  | $ | 7,974,866 |  | $ | 8,064,815 |  | $ | 8,349,336 |  | $ | 8,289,318 |
Liabilities |  |  |  |  |
Deposits: |  |  |  |  |
Non-interest-bearing | $ | 584,130 |  | $ | 595,141 |  | $ | 609,999 |  | $ | 617,778 |  | $ | 650,950 |
Interest-bearing | 4,735,500 |  | 4,839,027 |  | 5,019,184 |  | 5,185,626 |  | 5,320,421 |
Total deposits | 5,319,630 |  | 5,434,168 |  | 5,629,183 |  | 5,803,404 |  | 5,971,371 |
Borrowings | 1,667,055 |  | 1,626,933 |  | 1,506,812 |  | 1,611,692 |  | 1,383,573 |
Advance payments by borrowers for taxes | 16,742 |  | 16,907 |  | 18,338 |  | 18,706 |  | 17,307 |
Other liabilities | 46,427 |  | 47,324 |  | 41,198 |  | 49,304 |  | 44,427 |
Total liabilities | 7,049,854 |  | 7,125,332 |  | 7,195,531 |  | 7,483,106 |  | 7,416,678 |
Stockholders' Equity |  |  |  |  |
Common stock | 645 |  | 652 |  | 659 |  | 667 |  | 674 |
Paid-in capital | 493,296 |  | 497,269 |  | 503,332 |  | 509,359 |  | 515,332 |
Retained earnings | 444,561 |  | 460,464 |  | 457,611 |  | 452,605 |  | 449,489 |
Unearned ESOP shares | (21,889) |  | (22,375) |  | (22,862) |  | (23,348) |  | (23,834) |
Accumulated other comprehensive loss | (63,830) |  | (86,476) |  | (69,456) |  | (73,053) |  | (69,021) |
Total stockholders' equity | 852,783 |  | 849,534 |  | 869,284 |  | 866,230 |  | 872,640 |
Total liabilities and stockholders' equity | $ | 7,902,637 |  | $ | 7,974,866 |  | $ | 8,064,815 |  | $ | 8,349,336 |  | $ | 8,289,318 |
Consolidated capital ratios |  |  |  |  |
Equity to assets | 10.79 | % | 10.65 | % | 10.78 | % | 10.37 | % | 10.53 | %
Tangible equity to tangible assets (1) | 8.32 | % | 8.20 | % | 8.35 | % | 8.02 | % | 8.16 | %
Share data |  |  |  |  |
Outstanding shares | 64,445 | 65,132 | 65,864 | 66,680 | 67,388
Book value per share | $ | 13.23 |  | $ | 13.04 |  | $ | 13.20 |  | $ | 12.99 |  | $ | 12.95 |
Tangible book value per share (2) | $ | 9.93 |  | $ | 9.77 |  | $ | 9.96 |  | $ | 9.79 |  | $ | 9.78 |

_________________________
(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.
8

Kearny Financial Corp.
Supplemental Balance Sheet Highlights
(Unaudited)

(Dollars in Thousands) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022
Loan portfolio composition: |  |  |  |  |
Commercial loans: |  |  |  |  |
Multi-family mortgage | $ | 2,651,274 |  | $ | 2,699,151 |  | $ | 2,761,775 |  | $ | 2,835,852 |  | $ | 2,851,721 |
Nonresidential mortgage | 947,287 |  | 946,801 |  | 968,574 |  | 1,002,643 |  | 1,017,341 |
Commercial business | 144,134 |  | 149,229 |  | 146,861 |  | 162,038 |  | 177,530 |
Construction | 221,933 |  | 230,703 |  | 226,609 |  | 215,524 |  | 186,663 |
Total commercial loans | 3,964,628 |  | 4,025,884 |  | 4,103,819 |  | 4,216,057 |  | 4,233,255 |
One- to four-family residential mortgage | 1,746,065 |  | 1,689,051 |  | 1,700,559 |  | 1,713,343 |  | 1,719,514 |
Consumer loans: |  |  |  |  |
Home equity loans | 43,517 |  | 42,896 |  | 43,549 |  | 44,376 |  | 45,690 |
Other consumer | 2,728 |  | 2,644 |  | 2,549 |  | 2,592 |  | 2,648 |
Total consumer loans | 46,245 |  | 45,540 |  | 46,098 |  | 46,968 |  | 48,338 |
Total loans, excluding yield adjustments | 5,756,938 |  | 5,760,475 |  | 5,850,476 |  | 5,976,368 |  | 6,001,107 |
Unaccreted yield adjustments | (11,309) |  | (24,426) |  | (21,055) |  | (10,043) |  | (16,974) |
Loans receivable, net of yield adjustments | 5,745,629 |  | 5,736,049 |  | 5,829,421 |  | 5,966,325 |  | 5,984,133 |
Less: allowance for credit losses on loans | (44,867) |  | (46,872) |  | (48,734) |  | (49,122) |  | (48,877) |
Net loans receivable | $ | 5,700,762 |  | $ | 5,689,177 |  | $ | 5,780,687 |  | $ | 5,917,203 |  | $ | 5,935,256 |
Asset quality: |  |  |  |  |
Nonperforming assets: |  |  |  |  |
Accruing loans - 90 days and over past due | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Nonaccrual loans | 28,089 |  | 37,912 |  | 42,627 |  | 44,026 |  | 40,549 |
Total nonperforming loans | 28,089 |  | 37,912 |  | 42,627 |  | 44,026 |  | 40,549 |
Nonaccrual loans held-for-sale | 9,700 |  | — |  | — |  | — |  | 8,650 |
Other real estate owned | 11,982 |  | 12,956 |  | 12,956 |  | 13,410 |  | 13,410 |
Total nonperforming assets | $ | 49,771 |  | $ | 50,868 |  | $ | 55,583 |  | $ | 57,436 |  | $ | 62,609 |
Nonperforming loans (% total loans) | 0.49 | % | 0.66 | % | 0.73 | % | 0.74 | % | 0.68 | %
Nonperforming assets (% total assets) | 0.63 | % | 0.64 | % | 0.69 | % | 0.69 | % | 0.76 | %
Classified loans | $ | 94,676 |  | $ | 98,616 |  | $ | 93,526 |  | $ | 103,461 |  | $ | 86,069 |
Allowance for credit losses on loans (ACL): |  |  |  |  |
ACL to total loans | 0.78 | % | 0.81 | % | 0.83 | % | 0.82 | % | 0.81 | %
ACL to nonperforming loans | 159.73 | % | 123.63 | % | 114.33 | % | 111.57 | % | 120.54 | %
Net charge-offs | $ | 4,110 |  | $ | 2,107 |  | $ | 82 |  | $ | 206 |  | $ | 407 |
Average net charge-off rate (annualized) | 0.29 | % | 0.15 | % | 0.01 | % | 0.01 | % | 0.03 | %

9

Kearny Financial Corp.
Supplemental Balance Sheet Highlights
(Unaudited)

(Dollars in Thousands) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022
Funding composition: |  |  |  |  |
Deposits: |  |  |  |  |
Non-interest-bearing deposits | $ | 584,130 |  | $ | 595,141 |  | $ | 609,999 |  | $ | 617,778 |  | $ | 650,950 |
Interest-bearing demand | 2,347,262 |  | 2,236,573 |  | 2,252,912 |  | 2,285,799 |  | 2,316,485 |
Savings | 646,182 |  | 689,163 |  | 748,721 |  | 811,483 |  | 901,514 |
Certificates of deposit (retail) | 1,283,676 |  | 1,300,382 |  | 1,377,028 |  | 1,327,343 |  | 1,354,907 |
Certificates of deposit (brokered and listing service) | 458,380 |  | 612,909 |  | 640,523 |  | 761,001 |  | 747,515 |
Interest-bearing deposits | 4,735,500 |  | 4,839,027 |  | 5,019,184 |  | 5,185,626 |  | 5,320,421 |
Total deposits | 5,319,630 |  | 5,434,168 |  | 5,629,183 |  | 5,803,404 |  | 5,971,371 |
Borrowings: |  |  |  |  |
Federal Home Loan Bank advances | 1,432,055 |  | 1,456,933 |  | 1,281,812 |  | 1,156,692 |  | 1,256,573 |
Overnight borrowings | 235,000 |  | 170,000 |  | 225,000 |  | 455,000 |  | 127,000 |
Total borrowings | 1,667,055 |  | 1,626,933 |  | 1,506,812 |  | 1,611,692 |  | 1,383,573 |
Total funding | $ | 6,986,685 |  | $ | 7,061,101 |  | $ | 7,135,995 |  | $ | 7,415,096 |  | $ | 7,354,944 |
Loans as a % of deposits | 107.4 | % | 104.8 | % | 102.9 | % | 102.1 | % | 99.6 | %
Deposits as a % of total funding | 76.1 | % | 77.0 | % | 78.9 | % | 78.3 | % | 81.2 | %
Borrowings as a % of total funding | 23.9 | % | 23.0 | % | 21.1 | % | 21.7 | % | 18.8 | %
Uninsured deposits: |  |  |  |  |
Uninsured deposits (reported) (1) | $ | 1,813,122 |  | $ | 1,734,288 |  | $ | 1,771,416 |  | $ | 1,678,051 |  | $ | 1,815,854 |
Uninsured deposits (adjusted) (2) | $ | 694,510 |  | $ | 683,265 |  | $ | 710,377 |  | $ | 705,727 |  | $ | 794,407 |

_________________________
(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.
10

Kearny Financial Corp.
Consolidated Statements of Income (Loss)
(Unaudited)

| Three Months Ended
(Dollars and Shares in Thousands, Except Per Share Data) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022
Interest income |  |  |  |  |
Loans | $ | 63,384 |  | $ | 62,769 |  | $ | 62,044 |  | $ | 60,172 |  | $ | 57,996 |
Taxable investment securities | 16,756 |  | 16,265 |  | 15,736 |  | 15,459 |  | 13,221 |
Tax-exempt investment securities | 84 |  | 87 |  | 91 |  | 99 |  | 219 |
Other interest-earning assets | 2,401 |  | 2,047 |  | 1,821 |  | 1,441 |  | 1,005 |
Total interest income | 82,625 |  | 81,168 |  | 79,692 |  | 77,171 |  | 72,441 |
Interest expense |  |  |  |  |
Deposits | 30,340 |  | 27,567 |  | 26,226 |  | 22,246 |  | 18,822 |
Borrowings | 16,446 |  | 14,441 |  | 13,286 |  | 12,554 |  | 8,836 |
Total interest expense | 46,786 |  | 42,008 |  | 39,512 |  | 34,800 |  | 27,658 |
Net interest income | 35,839 |  | 39,160 |  | 40,180 |  | 42,371 |  | 44,783 |
Provision for (reversal of) credit losses | 2,105 |  | 245 |  | (306) |  | 451 |  | 1,671 |
Net interest income after provision for (reversal of) credit losses | 33,734 |  | 38,915 |  | 40,486 |  | 41,920 |  | 43,112 |
Non-interest income |  |  |  |  |
Fees and service charges | 624 |  | 748 |  | 699 |  | 910 |  | 734 |
Loss on sale and call of securities | (18,135) |  | — |  | — |  | — |  | (15,227) |
Gain (loss) on sale of loans | 104 |  | 215 |  | 199 |  | (2,373) |  | 134 |
Loss on sale of other real estate owned | (974) |  | — |  | (139) |  | — |  | — |
Income from bank owned life insurance | 5,967 |  | 1,666 |  | 1,605 |  | 1,581 |  | 1,761 |
Electronic banking fees and charges | 396 |  | 367 |  | 399 |  | 457 |  | 397 |
Other income | 812 |  | 1,014 |  | 903 |  | 1,071 |  | 3,723 |
Total non-interest income | (11,206) |  | 4,010 |  | 3,666 |  | 1,646 |  | (8,478) |
Non-interest expense |  |  |  |  |
Salaries and employee benefits | 17,282 |  | 17,761 |  | 17,315 |  | 18,005 |  | 19,921 |
Net occupancy expense of premises | 2,674 |  | 2,758 |  | 2,862 |  | 3,097 |  | 2,987 |
Equipment and systems | 3,814 |  | 3,801 |  | 3,511 |  | 3,537 |  | 3,867 |
Advertising and marketing | 301 |  | 228 |  | 231 |  | 413 |  | 731 |
Federal deposit insurance premium | 1,495 |  | 1,524 |  | 1,455 |  | 1,546 |  | 1,226 |
Directors' compensation | 393 |  | 393 |  | 345 |  | 340 |  | 339 |
Other expense | 3,808 |  | 3,309 |  | 3,042 |  | 3,414 |  | 3,579 |
Total non-interest expense | 29,767 |  | 29,774 |  | 28,761 |  | 30,352 |  | 32,650 |
(Loss) income before income taxes | (7,239) |  | 13,151 |  | 15,391 |  | 13,214 |  | 1,984 |
Income taxes | 1,782 |  | 3,309 |  | 3,378 |  | 2,902 |  | 33 |
Net (loss) income | $ | (9,021) |  | $ | 9,842 |  | $ | 12,013 |  | $ | 10,312 |  | $ | 1,951 |
Net (loss) income per common share (EPS) |  |  |  |  |
Basic | $ | (0.14) |  | $ | 0.16 |  | $ | 0.19 |  | $ | 0.16 |  | $ | 0.03 |
Diluted | $ | (0.14) |  | $ | 0.16 |  | $ | 0.19 |  | $ | 0.16 |  | $ | 0.03 |
Dividends declared |  |  |  |  |
Cash dividends declared per common share | $ | 0.11 |  | $ | 0.11 |  | $ | 0.11 |  | $ | 0.11 |  | $ | 0.11 |
Cash dividends declared | $ | 6,882 |  | $ | 6,989 |  | $ | 7,007 |  | $ | 7,196 |  | $ | 7,172 |
Dividend payout ratio | -76.3 | % | 71.0 | % | 58.3 | % | 69.8 | % | 367.6 | %
Weighted average number of common shares outstanding |  |  |  |  |
Basic | 62,299 | 63,014 | 63,667 | 64,769 | 65,030
Diluted | 62,367 | 63,061 | 63,667 | 64,783 | 65,038

11

Kearny Financial Corp.
Average Balance Sheet Data
(Unaudited)

| Three Months Ended
(Dollars in Thousands) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022
Assets |  |  |  |  |
Interest-earning assets: |  |  |  |  |
Loans receivable, including loans held-for-sale | $ | 5,726,321 |  | $ | 5,788,074 |  | $ | 5,932,541 |  | $ | 5,986,669 |  | $ | 5,839,903 |
Taxable investment securities | 1,509,165 |  | 1,516,393 |  | 1,529,582 |  | 1,558,222 |  | 1,527,578 |
Tax-exempt investment securities | 15,025 |  | 15,483 |  | 16,346 |  | 17,663 |  | 37,917 |
Other interest-earning assets | 139,740 |  | 130,829 |  | 128,158 |  | 131,682 |  | 114,175 |
Total interest-earning assets | 7,390,251 |  | 7,450,779 |  | 7,606,627 |  | 7,694,236 |  | 7,519,573 |
Non-interest-earning assets | 554,492 |  | 568,723 |  | 556,962 |  | 575,009 |  | 550,519 |
Total assets | $ | 7,944,743 |  | $ | 8,019,502 |  | $ | 8,163,589 |  | $ | 8,269,245 |  | $ | 8,070,092 |
Liabilities and Stockholders' Equity |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |
Deposits: |  |  |  |  |
Interest-bearing demand | $ | 2,301,169 |  | $ | 2,245,831 |  | $ | 2,321,120 |  | $ | 2,363,762 |  | $ | 2,359,977 |
Savings | 664,926 |  | 719,508 |  | 774,854 |  | 858,673 |  | 931,584 |
Certificates of deposit | 1,824,316 |  | 1,968,512 |  | 2,057,818 |  | 2,069,396 |  | 2,192,722 |
Total interest-bearing deposits | 4,790,411 |  | 4,933,851 |  | 5,153,792 |  | 5,291,831 |  | 5,484,283 |
Borrowings: |  |  |  |  |
Federal Home Loan Bank advances | 1,513,497 |  | 1,386,473 |  | 1,374,316 |  | 1,402,269 |  | 997,148 |
Other borrowings | 142,283 |  | 158,098 |  | 100,055 |  | 1,611 |  | — |
Total borrowings | 1,655,780 |  | 1,544,571 |  | 1,474,371 |  | 1,403,880 |  | 997,148 |
Total interest-bearing liabilities | 6,446,191 |  | 6,478,422 |  | 6,628,163 |  | 6,695,711 |  | 6,481,431 |
Non-interest-bearing liabilities: |  |  |  |  |
Non-interest-bearing deposits | 597,294 |  | 612,251 |  | 608,765 |  | 634,324 |  | 666,846 |
Other non-interest-bearing liabilities | 62,387 |  | 66,701 |  | 64,970 |  | 60,327 |  | 56,721 |
Total non-interest-bearing liabilities | 659,681 |  | 678,952 |  | 673,735 |  | 694,651 |  | 723,567 |
Total liabilities | 7,105,872 |  | 7,157,374 |  | 7,301,898 |  | 7,390,362 |  | 7,204,998 |
Stockholders' equity | 838,871 |  | 862,128 |  | 861,691 |  | 878,883 |  | 865,094 |
Total liabilities and stockholders' equity | $ | 7,944,743 |  | $ | 8,019,502 |  | $ | 8,163,589 |  | $ | 8,269,245 |  | $ | 8,070,092 |
Average interest-earning assets to average interest-bearing liabilities | 114.65 | % | 115.01 | % | 114.76 | % | 114.91 | % | 116.02 | %

12

Kearny Financial Corp.
Performance Ratio Highlights

| Three Months Ended
| December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022
Average yield on interest-earning assets: |  |  |  |  |
Loans receivable, including loans held-for-sale | 4.43 | % | 4.34 | % | 4.18 | % | 4.02 | % | 3.97 | %
Taxable investment securities | 4.44 | % | 4.29 | % | 4.12 | % | 3.97 | % | 3.46 | %
Tax-exempt investment securities (1) | 2.25 | % | 2.25 | % | 2.23 | % | 2.23 | % | 2.32 | %
Other interest-earning assets | 6.87 | % | 6.26 | % | 5.68 | % | 4.38 | % | 3.52 | %
Total interest-earning assets | 4.47 | % | 4.36 | % | 4.19 | % | 4.01 | % | 3.85 | %
Average cost of interest-bearing liabilities: |  |  |  |  |
Deposits: |  |  |  |  |
Interest-bearing demand | 2.91 | % | 2.58 | % | 2.38 | % | 2.01 | % | 1.63 | %
Savings | 0.44 | % | 0.47 | % | 0.48 | % | 0.41 | % | 0.41 | %
Certificates of deposit | 2.82 | % | 2.49 | % | 2.24 | % | 1.84 | % | 1.50 | %
Total interest-bearing deposits | 2.53 | % | 2.23 | % | 2.04 | % | 1.68 | % | 1.37 | %
Borrowings: |  |  |  |  |
Federal Home Loan Bank advances | 3.82 | % | 3.54 | % | 3.51 | % | 3.58 | % | 3.54 | %
Other borrowings | 5.65 | % | 5.46 | % | 4.89 | % | 5.15 | % | — | %
Total borrowings | 3.97 | % | 3.74 | % | 3.60 | % | 3.58 | % | 3.54 | %
Total interest-bearing liabilities | 2.90 | % | 2.59 | % | 2.38 | % | 2.08 | % | 1.71 | %
Interest rate spread (2) | 1.57 | % | 1.77 | % | 1.81 | % | 1.93 | % | 2.14 | %
Net interest margin (3) | 1.94 | % | 2.10 | % | 2.11 | % | 2.20 | % | 2.38 | %
Non-interest income to average assets (annualized) | -0.56 | % | 0.20 | % | 0.18 | % | 0.08 | % | -0.42 | %
Non-interest expense to average assets (annualized) | 1.50 | % | 1.49 | % | 1.41 | % | 1.47 | % | 1.62 | %
Efficiency ratio (4) | 120.84 | % | 68.97 | % | 65.60 | % | 68.96 | % | 89.93 | %
Return on average assets (annualized) | -0.45 | % | 0.49 | % | 0.59 | % | 0.50 | % | 0.10 | %
Return on average equity (annualized) | -4.30 | % | 4.57 | % | 5.58 | % | 4.69 | % | 0.90 | %
Return on average tangible equity (annualized) (5) | -5.77 | % | 6.07 | % | 7.41 | % | 6.20 | % | 1.20 | %

_________________________
(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.
13

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, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022
Adjusted net income: |  |  |  |  |
Net (loss) income (GAAP) | $ | (9,021) |  | $ | 9,842 |  | $ | 12,013 |  | $ | 10,312 |  | $ | 1,951 |
Non-recurring transactions - net of tax: |  |  |  |  |
Branch consolidation expenses | — |  | — |  | — |  | 568 |  | — |
Net effect of sale and call of securities | 12,876 |  | — |  | — |  | — |  | 10,811 |
Net effect of sale of other assets | — |  | — |  | — |  | — |  | (2,081) |
Severance expense from workforce realignment | — |  | — |  | — |  | — |  | 538 |
Net effect of bank-owned life insurance restructure | 2,708 |  | — |  | — |  | — |  | — |
Adjusted net income | $ | 6,563 |  | $ | 9,842 |  | $ | 12,013 |  | $ | 10,880 |  | $ | 11,219 |
Calculation of pre-tax, pre-provision net revenue: |  |  |  |  |
Net (loss) income (GAAP) | $ | (9,021) |  | $ | 9,842 |  | $ | 12,013 |  | $ | 10,312 |  | $ | 1,951 |
Adjustments to net income (GAAP): |  |  |  |  |
Provision for income taxes | 1,782 |  | 3,309 |  | 3,378 |  | 2,902 |  | 33 |
Provision for (reversal of) credit losses | 2,105 |  | 245 |  | (306) |  | 451 |  | 1,671 |
Pre-tax, pre-provision net revenue (non-GAAP) | $ | (5,134) |  | $ | 13,396 |  | $ | 15,085 |  | $ | 13,665 |  | $ | 3,655 |
Adjusted earnings per share: |  |  |  |  |
Weighted average common shares - basic | 62,299 | 63,014 | 63,667 | 64,769 | 65,030
Weighted average common shares - diluted | 62,367 | 63,061 | 63,667 | 64,783 | 65,038
Earnings per share - basic (GAAP) | $ | (0.14) |  | $ | 0.16 |  | $ | 0.19 |  | $ | 0.16 |  | $ | 0.03 |
Earnings per share - diluted (GAAP) | $ | (0.14) |  | $ | 0.16 |  | $ | 0.19 |  | $ | 0.16 |  | $ | 0.03 |
Adjusted earnings per share - basic (non-GAAP) | $ | 0.11 |  | $ | 0.16 |  | $ | 0.19 |  | $ | 0.17 |  | $ | 0.17 |
Adjusted earnings per share - diluted (non-GAAP) | $ | 0.11 |  | $ | 0.16 |  | $ | 0.19 |  | $ | 0.17 |  | $ | 0.17 |
Pre-tax, pre-provision net revenue per share: |  |  |  |  |
Pre-tax, pre-provision net revenue per share - basic (non-GAAP) | $ | (0.08) |  | $ | 0.21 |  | $ | 0.24 |  | $ | 0.21 |  | $ | 0.06 |
Pre-tax, pre-provision net revenue per share - diluted (non-GAAP) | $ | (0.08) |  | $ | 0.21 |  | $ | 0.24 |  | $ | 0.21 |  | $ | 0.06 |
Adjusted return on average assets: |  |  |  |  |
Total average assets | $ | 7,944,743 |  | $ | 8,019,502 |  | $ | 8,163,589 |  | $ | 8,269,245 |  | $ | 8,070,092 |
Return on average assets (GAAP) | -0.45 | % | 0.49 | % | 0.59 | % | 0.50 | % | 0.10 | %
Adjusted return on average assets (non-GAAP) | 0.33 | % | 0.49 | % | 0.59 | % | 0.53 | % | 0.56 | %
Adjusted return on average equity: |  |  |  |  |
Total average equity | $ | 838,871 |  | $ | 862,128 |  | $ | 861,691 |  | $ | 878,883 |  | $ | 865,094 |
Return on average equity (GAAP) | -4.30 | % | 4.57 | % | 5.58 | % | 4.69 | % | 0.90 | %
Adjusted return on average equity (non-GAAP) | 3.13 | % | 4.57 | % | 5.58 | % | 4.95 | % | 5.19 | %

14

Kearny Financial Corp.
Reconciliation of GAAP to Non-GAAP
(Unaudited)

| Three Months Ended
(Dollars and Shares in Thousands, Except Per Share Data) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022
Adjusted return on average tangible equity: |  |  |  |  |
Total average equity | $ | 838,871 |  | $ | 862,128 |  | $ | 861,691 |  | $ | 878,883 |  | $ | 865,094 |
Less: average goodwill | (210,895) |  | (210,895) |  | (210,895) |  | (210,895) |  | (210,895) |
Less: average other intangible assets | (2,277) |  | (2,411) |  | (2,544) |  | (2,683) |  | (2,826) |
Total average tangible equity | $ | 625,699 |  | $ | 648,822 |  | $ | 648,252 |  | $ | 665,305 |  | $ | 651,373 |
Return on average tangible equity (non-GAAP) | -5.77 | % | 6.07 | % | 7.41 | % | 6.20 | % | 1.20 | %
Adjusted return on average tangible equity (non-GAAP) | 4.20 | % | 6.07 | % | 7.41 | % | 6.54 | % | 6.89 | %
Adjusted non-interest expense ratio: |  |  |  |  |
Non-interest expense (GAAP) | $ | 29,767 |  | $ | 29,774 |  | $ | 28,761 |  | $ | 30,352 |  | $ | 32,650 |
Non-recurring transactions: |  |  |  |  |
Branch consolidation expenses | — |  | — |  | — |  | (800) |  | — |
Severance expense from workforce realignment | — |  | — |  | — |  | — |  | (757) |
Non-interest expense (non-GAAP) | $ | 29,767 |  | $ | 29,774 |  | $ | 28,761 |  | $ | 29,552 |  | $ | 31,893 |
Non-interest expense ratio (GAAP) | 1.50 | % | 1.49 | % | 1.41 | % | 1.47 | % | 1.62 | %
Adjusted non-interest expense ratio (non-GAAP) | 1.50 | % | 1.49 | % | 1.41 | % | 1.43 | % | 1.58 | %
Adjusted efficiency ratio: |  |  |  |  |
Non-interest expense (non-GAAP) | $ | 29,767 |  | $ | 29,774 |  | $ | 28,761 |  | $ | 29,552 |  | $ | 31,893 |
Net interest income (GAAP) | $ | 35,839 |  | $ | 39,160 |  | $ | 40,180 |  | $ | 42,371 |  | $ | 44,783 |
Total non-interest income (GAAP) | (11,206) |  | 4,010 |  | 3,666 |  | 1,646 |  | (8,478) |
Non-recurring transactions: |  |  |  |  |
Net effect of sale and call of securities | 18,135 |  | — |  | — |  | — |  | 15,227 |
Net effect of sale of other assets | — |  | — |  | — |  | — |  | (2,931) |
Net effect of bank-owned life insurance restructure | (4,232) |  | — |  | — |  | — |  | — |
Total revenue (non-GAAP) | $ | 38,536 |  | $ | 43,170 |  | $ | 43,846 |  | $ | 44,017 |  | $ | 48,601 |
Efficiency ratio (GAAP) | 120.84 | % | 68.97 | % | 65.60 | % | 68.96 | % | 89.93 | %
Adjusted efficiency ratio (non-GAAP) | 77.24 | % | 68.97 | % | 65.60 | % | 67.14 | % | 65.62 | %

15