Kearny Financial : Second Quarter Fiscal 2025 Results Presentation

Published: 2025-01-30 08:56:13 ET KRNY

I N V E S T O R P R E S E N T A T I O N

S E CO N D Q UA R T E R F I S C A L 2 0 2 5

JANUARY 30, 2025

Kearny Financial Corp.

Company Overview

NASDAQ:

KRNY

Founded:

1884

Assets:

$7.7 billion

Loans

$5.8 billion

Deposits

$5.7 billion

TBV Per Share:

$9.75

Market Cap:

$457.2 million1

Company Profile

Top 10 New Jersey-based financial institution by assets & deposits

43 full-service branches in 12 counties throughout New Jersey and New York City

Active acquirer, having completed 7 whole-bank acquisitions since 1999

Focus is on helping our clients achieve their financial goals for today and aspirations for tomorrow - creating communities that thrive

1 As of June 30, 2024

3

2 As of June 30, 2024

Source: S&P Global Market Intelligence & Company Filings

Branch/Office Footprint

Source: Company Filings

3

1 As of December 31, 2024.

141 Years: Franchise

Milestones

"Serving our

Communities and

Clients"

Founded

Kearny, NJ

1884

West Essex Bank

Acquired

2004

Formed the KearnyBank foundation funded with $10M

2015

MSB Financial Corp.

Acquired

2020

Obtained Federal

Charter

1941

Completed First-Step

Mutual Conversion

& IPO of $218.2M

2005

Completed Second-Step

Conversion and $717.5M

Stock Offering

2015

Introduced Private Client

Services

2021

4

4

South Bergen Savings

Bank Acquired

1999

Central Jersey Bancorp

Acquired

2011

Converted to NJ State - Chartered Savings Bank

2017

Established Kearny Investment Services

2022

Pulaski Bancorp Acquired

2003

Atlas Bank Acquired

2014

Clifton Bancorp Acquired

2018

2Q25 Financial Highlights

EARNINGS

Reported net income of $6.6 million for the quarter ended December 31, 2024, compared to $6.1 million for the quarter ended September 30, 2024.

Earnings per basic and diluted share were $0.11 and $0.10, respectively, for the quarter ended December 31, 2024.

For the quarter ending December 31, 2024, the net interest margin increased by two basis points to 1.82%, demonstrating sequential monthly growth throughout the period.

ASSET QUALITY

Strong asset quality as non-performing assets improved to 0.49% of total assets compared to 0.51% in the quarter ended September 30, 2024.

Net charge-offs totaled $573,000, or 0.04% of average loans, on an annualized basis, for the quarter ended December 31, 2024, which remains relatively low compared to our peers.

BALANCE SHEET

Total assets were $7.7 billion at December 31, 2024, a decrease of $41.0 million, or 0.5%, from September 30, 2024 primarily due to decrease in investment securities of $57.5 million.

Deposits of $5.7 billion increased $200.5 million, driven by strong momentum across all deposit types. The increase in deposits has improved the Loan to Deposit ratio from 105.9% at September 30, 2024 to 101.4%, at December 31, 2024.

Borrowings of $1.26 billion decreased $220.9 million, as result of deposit growth mentioned above.

CAPITAL

Capital ratios continue to remain well above regulatory minimums and peer comparisons with Common Equity Tier 1 Capital ratio of 14.59%, as of December 31, 2024.

Net Income

GAAP

Adjusted

1

$6.6 million

$6.6 million

Basic/Diluted EPS

GAAP

Adjusted1

$0.11/$0.10

$0.11/$0.10

Net Interest

CET-1 Ratio

Income

$32.6 million

14.59%

Total Assets

$7.7 billion

Total Deposits

Total Loans2

$5.7 billion

$5.8 billion

Source: Company Filings.

5

Capital Strength

Equity Capitalization Level

10.74% 10.83%

9.81% 9.67% 9.63%

8.26%

8.34%

8.43%

8.31%

8.27%

2Q24

3Q24

4Q24 2

1Q25

2Q25

Tangible Common

Equity / Tangible Assets

Equity / Assets

Regulatory Capital Ratios1,2

15.43%

14.59% 14.59%

10.00%

9.22%

8.00%

6.50%

5.00%

Tier 1

Common Equity Tier 1 Risk-Based

Total Risk-Based

Leverage

Tier 1

Capital

Capital

KRNY

Well Capitalized Regulatory Minimum

1 Kearny Financial Corp. (NASDAQ: KRNY) Regulatory Capital Ratios as of December 31, 2024 are preliminary.

2 Equity to Asset ratio, for June 30, 2024 going forward, was impacted by previously disclosed goodwill impairment.

6

Source: Company Filings.

Track Record of Strong Credit Performance

Net Charge-offs to Average Total Loans

Global

Hurricane

Financial

Sandy

Crisis

Cumulative charge-offs for KRNY between 2006 and 2Q25 were minimal, totaling $39.3 million.

COVID-19 Pandemic

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2Q25

Commercial Banks (not among top 100)

KRNY

From 2006 to 2024, inclusive of the Global Financial Crisis and the COVID-19 Pandemic, KRNY's net charge-offs to average total loans totaled 9 bps per year compared to 48 bps for all commercial banks (US Banks not among the top 100)1.

1 Data provided by Federal Reserve Bank of St. Louis.

7

Source: Company Filings.

Diversified Loan Portfolio

Loan Trend

($ millions)

$5,757

$5,775

$5,749

$5,786

$5,800

$947

$966

$948

$951

$950

$2,651

$2,645

$2,646

$2,646

$2,723

$1,746

$1,742

$1,756

$1,768

$1,765

2Q24

3Q24

4Q24

1Q25

2Q25

1-4 Family Home Equity Multi-family CRE Construction C&I

Loan Composition1

CRE

16.4%

Multi-family

Construction

46.9%

3.1%

QTD Yield on

C&I 2.3%

Loans

4.54%

1-4 Family

30.4%

Home Equity

0.8%

Geographic Distribution1

New Jersey

55.8%Pennsylvania

6.2%

Other

LTV5.0%

60.9%

New York

33.0%

1 As of December 31, 2024.

8

Source: S&P Global Market Intelligence & Company Filings.

Multifamily Loan Portfolio

Multifamily Loan Portfolio Composition1

Outside NYC

55.1%

Fully NYC Rent

Regulated

2.0%

Total MF

Majority NYC

$2.7B

Rent Regulated

3.4%

Majority NYC

Free Market

39.5%

Observations

New York City ("NYC") Multifamily1

NYC Multifamily Portfolio:

$1.2 billion

Average Loan Balance:

$3.46 million

Weighted Average LTV:

61.8%

Nonperforming Loans / Total MF Loans:

0.93%

Calendar Year 2025 Maturity & Repricing:

$139.3 million

NYC Multifamily Loan Portfolio by Location

Outstanding asset quality over multiple credit cycles

Less than half of our Multifamily portfolio is collateralized by properties in NYC

Only 5.4% of our Multifamily portfolio is collateralized by majority or fully rent-regulated NYC properties

Approx. 11% of maturing or repricing NYC Multifamily loans in calendar 2025

65% of the Company's NYC Multifamily portfolio is located in Brooklyn, NY

$ in millions Brooklyn Queens Manhattan Bronx Total NYC MF Loan Portfolio

Loan Value $814 160 141 135 $1,250

% 65.1% 12.8% 11.3% 10.8% 100.0%

Source: Company Filings

9

1 As of December 31, 2024.

CRE Loan Detail

CRE Portfolio by Collateral Type1

Medical

CRE Loan Geographic Distribution1

Specialty & Other

6.7%

4.3%

Retail 31.1%

Other

4.6%

Pennsylvania

New Jersey

4.8%

56.7%

Industrial

19.5%

Total CRE

$950M

Mixed Use

27.3%

Office 11.1%

LTV

50.6%

New York

(Ex.

Brooklyn)

24.9%

Brooklyn

9.0%

Source: Company Filings.

10

1 As of December 31, 2024.

Disclaimer

Kearny Financial Corporation published this content on January 30, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on January 30, 2025 at 13:55:03.011.