FAIRFIELD, N.J. - Kearny Financial Corp. (NASDAQ GS: NASDAQ:KRNY), the parent company of Kearny Bank, disclosed a significant recovery with a reported net income of $6.1 million, or $0.10 per diluted share, for the quarter ending September 30, 2024. This marks a turnaround from the net loss of $90.1 million, or $1.45 per diluted share, recorded in the previous quarter, which included a substantial goodwill impairment charge.
The company's recent financial performance reflects an increase in net income when the $95.3 million goodwill impairment from the June 30, 2024 quarter is excluded. Adjusted net income for the quarter ending September 30, 2024, grew by $496,000 from the adjusted net income of $5.6 million for the prior quarter.
Kearny Financial also announced a quarterly cash dividend of $0.11 per share, payable on November 20, 2024, to shareholders of record as of November 6, 2024. President and CEO Craig L. Montanaro expressed optimism regarding the company's net interest margin, which he said has begun to ascend despite a slight quarterly compression. He also highlighted the positive impact of the recent federal funds rate reduction and anticipated further rate cuts as beneficial for the company's liability-sensitive balance sheet.
Montanaro also noted the strength of the loan portfolio, with minimal exposure to New York City rent-regulated multifamily and office real estate, robust commercial real estate ACL coverage ratios, and leading charge-off ratios.
The balance sheet showed total assets of $7.77 billion as of September 30, 2024, an increase from June 30, 2024. Loans receivable saw a growth of 0.9%, primarily due to an uptick in residential mortgage loans and construction loans. Deposits grew significantly by 6.1%, attributed mainly to a shift from Federal Home Loan Bank advances into brokered certificates of deposits, capitalizing on more favorable economics.
In terms of earnings, net interest income for the quarter decreased slightly, while non-interest income saw a decline without the non-recurring items recorded in the previous quarter. Non-interest expense decreased substantially, mainly due to the goodwill impairment recognized in the June quarter. Excluding this impairment, adjusted non-interest expense saw a moderate increase.
Asset quality remained stable with non-performing assets at 0.51% of total assets and net charge-offs at a minimal 0.01% of average loans on an annualized basis for the quarter. The company's capital ratios indicated that both Kearny Financial Corp. and Kearny Bank are well-capitalized under regulatory guidelines.
This financial analysis is based on a press release statement from Kearny Financial Corp.
In other recent news, Kearny Financial Corp. held its annual stockholders meeting, during which several key decisions were made. The New Jersey-based savings institution disclosed the outcomes of votes on the election of directors, the appointment of the company's independent auditor, and an advisory resolution on executive compensation. Shareholders cast their votes, with John N. Hopkins, Catherine A. Lawton, Craig L. Montanaro, and Leopold W. Montanaro securing positions as directors.
In addition, Crowe LLP was ratified as Kearny Financial Corp.'s independent auditor for the fiscal year ending June 30, 2025, with a majority of votes in favor. The advisory, non-binding resolution to approve the company's executive compensation as described in the Proxy Statement was also passed. These are recent developments that investors should be aware of, as they provide insights into the company's governance and strategic direction.
InvestingPro Insights
Kearny Financial Corp.'s recent financial performance aligns with some key insights from InvestingPro. Despite the company's net loss in the previous quarter, InvestingPro Tips suggest that net income is expected to grow this year, which is consistent with the reported $6.1 million net income for the quarter ending September 30, 2024. This positive outlook is further supported by analysts' predictions that the company will be profitable this year.
The company's commitment to shareholder value is evident in its announced quarterly cash dividend of $0.11 per share. This is reinforced by an InvestingPro Tip highlighting that Kearny Financial has maintained dividend payments for 10 consecutive years. With a current dividend yield of 6.09%, the stock may be attractive to income-focused investors.
However, investors should note that Kearny Financial's revenue growth has been negative, with a -23.71% decline in the last twelve months. This challenging revenue environment is reflected in the company's price-to-book ratio of 0.6, suggesting the stock may be undervalued relative to its book value.
For those interested in a more comprehensive analysis, InvestingPro offers additional tips and metrics beyond those mentioned here. The platform provides a total of 16 tips for Kearny Financial Corp., offering a deeper dive into the company's financial health and market position.
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