QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ________to Maryland 30-0870244 (State or other jurisdiction of (I.R.S. Employer 120 Passaic Ave., Fairfield, 07004 (Address of principal executive offices) (Zip Code) Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value KRNY The NASDAQ Stock Market LLC Large accelerated filer Non-accelerated filer o January 31, 2023. Page Management’s Discussion and Analysis of Financial Condition and Results of Operations March 31, June 30, 2022 2021 (Unaudited) Assets Cash and amounts due from depository institutions $ 22,864 $ 21,463 Interest-bearing deposits in other banks 39,515 46,392 Cash and cash equivalents 62,379 67,855 Investment securities available for sale (amortized cost $1,590,074 and $1,666,853, 1,526,086 1,676,864 Investment securities held to maturity (fair value $117,017 and $39,610, respectively), net of 121,853 38,138 Loans held-for-sale 2,822 16,492 Loans receivable 5,003,201 4,851,394 Less: allowance for credit losses on loans (43,860 ) (58,165 ) Net loans receivable 4,959,341 4,793,229 Premises and equipment 53,727 56,338 Federal Home Loan Bank (“FHLB”) of New York stock 30,997 36,615 Accrued interest receivable 19,517 19,362 Goodwill 210,895 210,895 Core deposit intangibles 3,166 3,705 Bank owned life insurance 287,644 283,310 Deferred income tax assets, net 34,349 29,323 Other real estate owned 401 178 Other assets 76,714 51,431 Total Assets $ 7,389,891 $ 7,283,735 Liabilities and Stockholders' Equity Liabilities Deposits: Non-interest-bearing $ 621,954 $ 593,718 Interest-bearing 4,906,708 4,891,588 Total deposits 5,528,662 5,485,306 Borrowings 851,220 685,876 Advance payments by borrowers for taxes 16,979 15,752 Other liabilities 37,861 53,857 Total Liabilities 6,434,722 6,240,791 Stockholders' Equity Preferred stock, $0.01 par value, 100,000,000 shares authorized; 0 0 Common stock, $0.01 par value; 800,000,000 shares authorized; 714 790 Paid-in capital 561,176 654,396 Retained earnings 441,522 408,367 Unearned employee stock ownership plan shares; (25,294 ) (26,753 ) Accumulated other comprehensive (loss) income (22,949 ) 6,144 Total Stockholders' Equity 955,169 1,042,944 Total Liabilities and Stockholders' Equity $ 7,389,891 $ 7,283,735 Three Months Ended Nine Months Ended March 31, March 31, 2022 2021 2022 2021 Interest Income Loans $ 45,846 $ 50,159 $ 141,651 $ 153,776 Taxable investment securities 8,024 7,891 23,831 22,934 Tax-exempt investment securities 316 410 976 1,297 Other interest-earning assets 415 705 1,261 2,406 Total Interest Income 54,601 59,165 167,719 180,413 Interest Expense Deposits 3,565 6,670 11,293 26,379 Borrowings 3,309 4,012 10,422 14,865 Total Interest Expense 6,874 10,682 21,715 41,244 Net Interest Income 47,727 48,483 146,004 139,169 (Reversal of) provision for credit losses (3,920 ) 1,126 (11,740 ) 3,820 Net Interest Income after (Reversal of) 51,647 47,357 157,744 135,349 Non-Interest Income Fees and service charges 617 473 1,922 1,474 Gain on sale and call of securities 3 18 4 454 Gain on sale of loans 376 943 2,352 5,211 Gain on sale of other real estate owned 14 0 14 0 Income from bank owned life insurance 1,511 1,530 4,634 4,722 Electronic banking fees and charges 432 456 1,260 1,265 Bargain purchase gain 0 0 0 3,053 Other income 238 1,194 938 1,351 Total Non-Interest Income 3,191 4,614 11,124 17,530 Non-Interest Expense Salaries and employee benefits 19,184 16,965 55,897 51,023 Net occupancy expense of premises 3,223 3,433 10,926 9,675 Equipment and systems 3,822 3,823 11,370 11,295 Advertising and marketing 516 567 1,356 1,580 Federal deposit insurance premium 480 488 1,693 1,450 Directors' compensation 340 748 1,792 2,244 Merger-related expenses 0 0 0 4,349 Debt extinguishment expenses 0 0 0 796 Other expense 3,058 3,792 9,062 11,487 Total Non-Interest Expense 30,623 29,816 92,096 93,899 Income before Income Taxes 24,215 22,155 76,772 58,980 Income tax expense 6,522 5,732 20,595 14,230 Net Income $ 17,693 $ 16,423 $ 56,177 $ 44,750 Net Income per Common Share (EPS) Basic $ 0.25 $ 0.20 $ 0.78 $ 0.53 Diluted $ 0.25 $ 0.20 $ 0.78 $ 0.53 Weighted Average Number of Common Shares Basic 69,790 80,673 72,130 83,958 Diluted 69,817 80,690 72,154 83,961 Three Months Ended Nine Months Ended March 31, March 31, 2022 2021 2022 2021 Net Income $ 17,693 $ 16,423 $ 56,177 $ 44,750 Other Comprehensive (Loss) Income, net of tax: Net unrealized loss on securities available for sale (41,922 ) (15,671 ) (52,354 ) (14,379 ) Net realized gain on sale and call of securities (2 ) (13 ) (3 ) (319 ) Fair value adjustments on derivatives 17,387 10,574 23,227 14,750 Benefit plan adjustments 14 14 37 48 Total Other Comprehensive (Loss) Income (24,523 ) (5,096 ) (29,093 ) 100 Total Comprehensive (Loss) Income $ (6,830 ) $ 11,327 $ 27,084 $ 44,850 Common Stock Paid-In Retained Unearned Accumulated Shares Amount Capital Earnings Shares Income Total Balance - December 31, 2020 84,938 $ 849 $ 724,389 $ 388,376 $ (27,726 ) $ 6,453 $ 1,092,341 Net income - - - 16,423 - - 16,423 Other comprehensive loss, net - - - - - (5,096 ) (5,096 ) ESOP shares committed to be - - 87 - 487 - 574 Stock option exercise 41 - 373 - - - 373 Share repurchases (3,026 ) (29 ) (34,834 ) - - - (34,863 ) Stock-based compensation expense - - 1,379 - - - 1,379 Cancellation of shares issued for (10 ) - (114 ) - - - (114 ) Cash dividends declared - - - (7,205 ) - - (7,205 ) Balance - March 31, 2021 81,943 $ 820 $ 691,280 $ 397,594 $ (27,239 ) $ 1,357 $ 1,063,812 Common Stock Paid-In Retained Unearned Accumulated Shares Amount Capital Earnings Shares Income Total Balance - June 30, 2020 83,663 $ 837 $ 722,871 $ 387,911 $ (28,699 ) $ 1,257 $ 1,084,177 Cumulative effect of change in - - - (14,239 ) - - (14,239 ) Balance - July 1, 2020 as 83,663 837 722,871 373,672 (28,699 ) 1,257 1,069,938 Net income - - - 44,750 - - 44,750 Other comprehensive income, net - - - - - 100 100 ESOP shares committed to be - - (25 ) - 1,460 - 1,435 Stock option exercise 41 - 373 - - - 373 Stock repurchases (7,535 ) (74 ) (80,493 ) - - - (80,567 ) Stock-based compensation expense - - 4,281 - - - 4,281 Cancellation of shares issued for (80 ) (1 ) (802 ) - - - (803 ) Shares issued in conjunction with 5,854 58 45,075 - - - 45,133 Cash dividends declared - - - (20,828 ) - - (20,828 ) Balance - March 31, 2021 81,943 $ 820 $ 691,280 $ 397,594 $ (27,239 ) $ 1,357 $ 1,063,812 Common Stock Paid-In Retained Unearned Accumulated Shares Amount Capital Earnings Shares Income (Loss) Total Balance - December 31, 2021 73,453 $ 735 $ 587,392 $ 431,549 $ (25,780 ) $ 1,574 $ 995,470 Net income - - - 17,693 - - 17,693 Other comprehensive loss, net - - - - - (24,523 ) (24,523 ) ESOP shares committed to be - - 180 - 486 - 666 Stock repurchases (2,020 ) (21 ) (26,948 ) - - - (26,969 ) Stock-based compensation expense - - 676 - - - 676 Cancellation of shares issued for (9 ) - (124 ) - - - (124 ) Cash dividends declared - - - (7,720 ) - - (7,720 ) Balance - March 31, 2022 71,424 $ 714 $ 561,176 $ 441,522 $ (25,294 ) $ (22,949 ) $ 955,169 Common Stock Paid-In Retained Unearned Accumulated Shares Amount Capital Earnings Shares Income (Loss) Total Balance - June 30, 2021 78,965 $ 790 $ 654,396 $ 408,367 $ (26,753 ) $ 6,144 $ 1,042,944 Net income - - - 56,177 - - 56,177 Other comprehensive loss, net - - - - - (29,093 ) (29,093 ) ESOP shares committed to be - - 486 - 1,459 - 1,945 Stock repurchases (7,468 ) (75 ) (95,892 ) - - - (95,967 ) Stock-based compensation expense - - 3,117 - - - 3,117 Cancellation of shares issued for (73 ) (1 ) (931 ) - - - (932 ) Cash dividends declared - - - (23,022 ) - - (23,022 ) Balance - March 31, 2022 71,424 $ 714 $ 561,176 $ 441,522 $ (25,294 ) $ (22,949 ) $ 955,169 Nine Months Ended March 31, 2022 2021 Cash Flows from Operating Activities: Net income $ 56,177 $ 44,750 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation and amortization of premises and equipment 4,470 4,355 Net accretion of premiums, discounts and loan fees and costs (4,374 ) (11,257 ) Deferred income taxes and valuation allowance 6,943 3,004 Bargain purchase gain 0 (3,053 ) Amortization of intangible assets 539 797 Amortization of benefit plans’ unrecognized net loss 60 62 (Reversal of) provision for credit losses (11,740 ) 3,820 Gain on sale of other real estate owned (14 ) 0 Loans originated for sale (151,783 ) (249,671 ) Proceeds from sale of mortgage loans held-for-sale 167,713 270,147 Gain on sale of mortgage loans held-for-sale, net (2,260 ) (4,859 ) Realized gain on sale/call of investment securities available for sale (4 ) (454 ) Realized loss on debt extinguishment 0 796 Realized gain on sale of loans receivable (92 ) (352 ) Realized (gain) loss on disposition of premises and equipment (356 ) 40 Increase in cash surrender value of bank owned life insurance (4,634 ) (4,722 ) ESOP and stock-based compensation expense 5,062 5,716 Increase in interest receivable (155 ) (1,488 ) Decrease (increase) in other assets 6,679 (1,021 ) Increase (decrease) in interest payable 49 (406 ) (Decrease) increase in other liabilities (15,125 ) 1,519 Net Cash Provided by Operating Activities 57,155 57,723 Cash Flows from Investing Activities: Purchases of: Investment securities available for sale (206,145 ) (865,163 ) Investment securities held to maturity (86,406 ) 0 Proceeds from: Repayments/calls/maturities of investment securities available for sale 280,496 407,489 Repayments/calls/maturities of investment securities held to maturity 2,586 5,280 Sales of investment securities available for sale 0 44,842 Purchase of loans (112,485 ) (34,635 ) Net (increase) decrease in loans receivable (36,895 ) 237,383 Proceeds from sale of loans receivable 1,126 43,931 Proceeds from the sale of other real estate owned 494 0 Additions to premises and equipment (1,859 ) (2,889 ) Proceeds from death benefit of bank owned life insurance 300 0 Proceeds from cash settlement of premises and equipment 599 3,401 Redemption of FHLB stock 5,618 16,421 Net cash acquired in acquisition 0 4,296 Net Cash Used in Investing Activities $ (152,571 ) $ (139,644 ) Nine Months Ended March 31, 2022 2021 Cash Flows from Financing Activities: Net increase in deposits $ 43,903 $ 485,417 Repayment of term FHLB advances (1,170,000 ) (2,257,796 ) Proceeds from term FHLB advances 1,045,000 1,955,000 Net increase (decrease) in other short-term borrowings 290,000 (68,635 ) Net increase (decrease) in advance payments by borrowers for taxes 1,227 (2,063 ) Repurchase and cancellation of common stock of Kearny Financial Corp. (95,967 ) (80,567 ) Cancellation of shares repurchased on vesting to pay taxes (932 ) (803 ) Exercise of stock options 0 373 Dividends paid (23,291 ) (20,981 ) Net Cash Provided by Financing Activities 89,940 9,945 Net Decrease in Cash and Cash Equivalents (5,476 ) (71,976 ) Cash and Cash Equivalents - Beginning 67,855 180,967 Cash and Cash Equivalents - Ending $ 62,379 $ 108,991 Supplemental Disclosures of Cash Flows Information: Cash paid during the period for: Income taxes, net of refunds $ 9,497 $ 13,675 Interest $ 21,666 $ 41,649 Non-cash investing and financing activities: Acquisition of other real estate owned in settlement of loans $ 703 $ 0 Transfers from loans receivable to loans receivable held-for-sale $ 0 $ 43,579 Fair value of assets acquired, net of cash and cash equivalents acquired $ 0 $ 567,816 Fair value of liabilities assumed $ 0 $ 523,926 Principles of Consolidation Basis of Presentation 2. SUBSEQUENT EVENTS On January 26, 2023, the Company declared a quarterly cash dividend of $0.11 per share, payable on February 22, 2023 to stockholders of record as of February 8, 2023. The following tables present the amortized cost, gross unrealized gains and losses and estimated fair values for available for sale securities and the amortized cost, gross unrecognized gains and losses and estimated fair values for held to maturity securities as of the dates indicated: March 31, 2022 Amortized Gross Gross Allowance for Fair (In Thousands) Available for sale: Debt securities: Obligations of state and political subdivisions $ 30,973 $ 118 $ 13 $ - $ 31,078 Asset-backed securities 230,997 375 1,788 - 229,584 Collateralized loan obligations 313,651 11 2,042 - 311,620 Corporate bonds 154,922 1,193 2,620 - 153,495 Total debt securities 730,543 1,697 6,463 - 725,777 Mortgage-backed securities: Collateralized mortgage obligations (1) 8,265 1 270 - 7,996 Residential pass-through securities (1) 617,387 332 47,569 - 570,150 Commercial pass-through securities (1) 233,879 249 11,965 - 222,163 Total mortgage-backed securities 859,531 582 59,804 - 800,309 Total securities available for sale $ 1,590,074 $ 2,279 $ 66,267 $ - $ 1,526,086 June 30, 2021 Amortized Gross Gross Allowance for Fair (In Thousands) Available for sale: Debt securities: Obligations of state and political subdivisions $ 33,800 $ 803 $ - $ - $ 34,603 Asset-backed securities 240,217 2,835 63 - 242,989 Collateralized loan obligations 189,873 177 170 - 189,880 Corporate bonds 155,622 2,802 73 - 158,351 Total debt securities 619,512 6,617 306 - 625,823 Mortgage-backed securities: Collateralized mortgage obligations (1) 13,420 319 0 - 13,739 Residential pass-through securities (1) 744,196 7,443 7,148 - 744,491 Commercial pass-through securities (1) 289,725 5,738 2,652 - 292,811 Total mortgage-backed securities 1,047,341 13,500 9,800 - 1,051,041 Total securities available for sale $ 1,666,853 $ 20,117 $ 10,106 $ - $ 1,676,864 ___________________________ March 31, 2022 Amortized Gross Gross Allowance for Fair (In Thousands) Held to maturity: Debt securities: Obligations of state and political subdivisions $ 23,546 $ 122 $ 24 $ - $ 23,644 Total debt securities 23,546 122 24 - 23,644 Mortgage-backed securities: Residential pass-through securities (1) 86,017 - 3,989 - 82,028 Commercial pass-through securities (1) 12,290 - 945 - 11,345 Total mortgage-backed securities 98,307 - 4,934 - 93,373 Total securities held to maturity $ 121,853 $ 122 $ 4,958 $ - $ 117,017 June 30, 2021 Amortized Gross Gross Allowance for Fair (In Thousands) Held to maturity: Debt securities: Obligations of state and political subdivisions $ 25,824 $ 1,204 $ - $ - $ 27,028 Total debt securities 25,824 1,204 - - 27,028 Mortgage-backed securities: Commercial pass-through securities (1) 12,314 268 - - 12,582 Total mortgage-backed securities 12,314 268 - - 12,582 Total securities held to maturity $ 38,138 $ 1,472 $ - $ - $ 39,610 Excluding the balances of mortgage-backed securities, the following tables present the amortized cost and estimated fair values of debt securities available for sale and held to maturity, by contractual maturity, at March 31, 2022 Amortized Fair (In Thousands) Available for sale debt securities: Due in one year or less $ 1,970 $ 1,971 Due after one year through five years 18,939 19,008 Due after five years through ten years 353,679 351,676 Due after ten years 355,955 353,122 Total $ 730,543 $ 725,777 March 31, 2022 Amortized Fair (In Thousands) Held to maturity debt securities: Due in one year or less $ 6,817 $ 6,832 Due after one year through five years 15,026 15,084 Due after five years through ten years 1,703 1,728 Due after ten years - - Total $ 23,546 $ 23,644 Sales of securities available for sale were as follows for the periods presented below: Three Months Ended Nine Months Ended March 31, March 31, 2022 2021 2022 2021 (In Thousands) Available for sale securities sold: Proceeds from sales of securities $ 0 $ 0 $ 0 $ 44,842 Gross realized gains $ 0 $ 0 $ 0 $ 800 Gross realized losses 0 0 0 (385 ) Net gain on sales of securities $ 0 $ 0 $ 0 $ 415 Three Months Ended Nine Months Ended March 31, March 31, 2022 2021 2022 2021 (In Thousands) Available for sale securities called: Gross realized gains $ 3 $ 18 $ 4 $ 39 Gross realized losses 0 0 0 0 Net gain on calls of securities $ 3 $ 18 $ 4 $ 39 The carrying value of securities pledged for borrowings at the FHLB and other institutions, and securities pledged for public funds and other purposes, were as follows as of the dates presented below: March 31, June 30, 2022 2021 (In Thousands) Securities pledged: Pledged for borrowings at the FHLB of New York $ 155,868 $ 170,120 Pledged to secure public funds on deposit 324,425 137,778 Pledged for potential borrowings at the Federal Reserve Bank of New York 372,968 274,076 Total carrying value of securities pledged $ 853,261 $ 581,974 March 31, 2022 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Number of Securities Fair Unrealized (Dollars in Thousands) Securities Available for Sale: Obligations of state and political $ 2,303 $ 13 $ - $ - 8 $ 2,303 $ 13 Asset-backed securities 180,827 1,788 - - 15 180,827 1,788 Collateralized loan obligations 226,513 1,780 52,851 262 22 279,364 2,042 Corporate bonds 75,909 2,495 3,875 125 16 79,784 2,620 Collateralized mortgage obligations 6,819 270 - - 5 6,819 270 Commercial pass-through securities 48,811 1,147 113,569 10,818 15 162,380 11,965 Residential pass-through securities 237,063 14,376 302,905 33,193 66 539,968 47,569 Total $ 778,245 $ 21,869 $ 473,200 $ 44,398 147 $ 1,251,445 $ 66,267 June 30, 2021 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Number of Securities Fair Unrealized (Dollars in Thousands) Securities Available for Sale: Asset-backed securities $ 12,159 $ 63 $ - $ - 2 $ 12,159 $ 63 Collateralized loan obligations 36,741 9 58,605 161 8 95,346 170 Corporate bonds 15,952 73 - - 4 15,952 73 Commercial pass-through securities 145,055 2,652 - - 7 145,055 2,652 Residential pass-through securities 424,112 7,148 - - 10 424,112 7,148 Total $ 634,019 $ 9,945 $ 58,605 $ 161 31 $ 692,624 $ 10,106 March 31, 2022 Less than 12 Months 12 Months or More Total Fair Unrecognized Fair Unrecognized Number of Securities Fair Unrecognized (Dollars in Thousands) Securities Held to Maturity: Obligations of state and political $ 4,901 $ 24 $ - $ - 8 $ 4,901 $ 24 Commercial pass-through 11,345 945 - - 1 11,345 945 Residential pass-through 82,028 3,989 - - 8 82,028 3,989 Total $ 98,274 $ 4,958 $ - $ - 17 $ 98,274 $ 4,958 2022: The following table sets forth the composition of the Company’s loan portfolio at At December 31, 2022, included a fair value adjustment to the carrying amount of hedged one- to four-family residential mortgage loans. March 31, June 30, 2022 2021 (In Thousands) Commercial loans: Multi-family mortgage $ 2,076,003 $ 2,039,260 Nonresidential mortgage 1,085,988 1,079,444 Commercial business 169,551 168,951 Construction 121,137 93,804 Total commercial loans 3,452,679 3,381,459 One- to four-family residential mortgage 1,527,980 1,447,721 Consumer loans: Home equity loans 41,501 47,871 Other consumer 2,755 3,259 Total consumer loans 44,256 51,130 Total loans 5,024,915 4,880,310 Unaccreted yield adjustments (21,714 ) (28,916 ) Total loans receivable, net of yield adjustments $ 5,003,201 $ 4,851,394 Payment Status March 31, 2022 30-59 Days 60-89 Days 90 Days and Over Total Past Due Current Total (In Thousands) Multi-family mortgage $ - $ - $ 28,197 $ 28,197 $ 2,047,806 $ 2,076,003 Nonresidential mortgage 2,101 - 25,283 27,384 1,058,604 1,085,988 Commercial business - 64 281 345 169,206 169,551 Construction - - - - 121,137 121,137 One- to four-family 3,410 520 2,968 6,898 1,521,082 1,527,980 Home equity loans 25 4 59 88 41,413 41,501 Other consumer - - - - 2,755 2,755 Total loans $ 5,536 $ 588 $ 56,788 $ 62,912 $ 4,962,003 $ 5,024,915 Payment Status June 30, 2021 30-59 Days 60-89 Days 90 Days and Over Total Past Due Current Total (In Thousands) Multi-family mortgage $ - $ - $ 16,094 $ 16,094 $ 2,023,166 $ 2,039,260 Nonresidential mortgage - - 32,891 32,891 1,046,553 1,079,444 Commercial business - - 401 401 168,550 168,951 Construction - - - - 93,804 93,804 One- to four-family 382 2,734 5,104 8,220 1,439,501 1,447,721 Home equity loans 6 5 32 43 47,828 47,871 Other consumer 1 - - 1 3,258 3,259 Total loans $ 389 $ 2,739 $ 54,522 $ 57,650 $ 4,822,660 $ 4,880,310 The following tables present information relating to the Company’s nonperforming loans as of Performance Status March 31, 2022 90 Days and Over Past Due Accruing Nonaccrual Loans with Allowance for Credit Losses Nonaccrual Loans with no Allowance for Credit Losses Total Nonperforming Performing Total (In Thousands) Multi-family mortgage $ - $ 11,369 $ 28,646 $ 40,015 $ 2,035,988 $ 2,076,003 Nonresidential mortgage - 3,667 24,523 28,190 1,057,798 1,085,988 Commercial business - 63 430 493 169,058 169,551 Construction - - 1,791 1,791 119,346 121,137 One- to four-family - 4,376 4,241 8,617 1,519,363 1,527,980 Home equity loans - 313 1,176 1,489 40,012 41,501 Other consumer - - - - 2,755 2,755 Total loans $ - $ 19,788 $ 60,807 $ 80,595 $ 4,944,320 $ 5,024,915 Performance Status June 30, 2021 90 Days and Over Past Due Accruing Nonaccrual Loans with Allowance for Credit Losses Nonaccrual Loans with no Allowance for Credit Losses Total Nonperforming Performing Total (In Thousands) Multi-family mortgage $ - $ 8,300 $ 10,226 $ 18,526 $ 2,020,734 $ 2,039,260 Nonresidential mortgage - 12,612 24,575 37,187 1,042,257 1,079,444 Commercial business - 236 676 912 168,039 168,951 Construction - - 2,228 2,228 91,576 93,804 One- to four-family - 7,422 11,748 19,170 1,428,551 1,447,721 Home equity loans - 452 1,292 1,744 46,127 47,871 Other consumer - - - - 3,259 3,259 Total loans $ - $ 29,022 $ 50,745 $ 79,767 $ 4,800,543 $ 4,880,310 The following tables present total TDR loans at March 31, 2022 Accrual Non-accrual Total # of Loans Amount # of Loans Amount # of Loans Amount (Dollars In Thousands) Commercial loans: Multi-family mortgage - $ - 3 $ 14,605 3 $ 14,605 Nonresidential mortgage 4 400 2 1,646 6 2,046 Commercial business 5 3,704 3 325 8 4,029 Construction - - 1 1,791 1 1,791 Total commercial loans 9 4,104 9 18,367 18 22,471 One- to four-family residential 29 4,270 15 3,392 44 7,662 Consumer loans: Home equity loans 5 170 2 1,396 7 1,566 Total 43 $ 8,544 26 $ 23,155 69 $ 31,699 June 30, 2021 Accrual Non-accrual Total # of Loans Amount # of Loans Amount # of Loans Amount (Dollars In Thousands) Commercial loans: Multi-family mortgage - $ - 1 $ 2,896 1 $ 2,896 Nonresidential mortgage 1 105 6 2,275 7 2,380 Commercial business 3 3,755 6 693 9 4,448 Construction - - 1 2,228 1 2,228 Total commercial loans 4 3,860 14 8,092 18 11,952 One- to four-family residential 18 2,216 20 3,405 38 5,621 Consumer loans: Home equity loans 4 159 3 68 7 227 Total 26 $ 6,235 37 $ 11,565 63 $ 17,800 Three Months Ended March 31, 2022 Nine Months Ended March 31, 2022 # of Loans Pre- Post- # of Loans Pre- Post- (Dollars In Thousands) Multi-family mortgage 1 $ 9,104 $ 9,101 2 $ 12,091 $ 12,073 One- to four-family residential 8 2,953 2,965 10 3,214 3,226 Home equity loans 2 1,477 1,477 2 1,477 1,477 Total 11 $ 13,534 $ 13,543 14 $ 16,782 $ 16,776 Three Months Ended March 31, 2021 Nine Months Ended March 31, 2021 # of Loans Pre- Post- # of Loans Pre- Post- (Dollars In Thousands) One- to four-family residential - $ - $ - 1 $ 309 $ 308 Home equity loans 1 24 24 1 24 24 Total 1 $ 24 $ 24 2 $ 333 $ 332 The following table presents the carrying value and related allowance of collateral dependent individually analyzed loans at the dates indicated: March 31, 2022 June 30, 2021 Carrying Value Related Allowance Carrying Value Related Allowance (In Thousands) Commercial loans: Multi-family mortgage $ 31,078 $ 661 $ 18,526 $ 1,368 Nonresidential mortgage (1) 27,384 119 32,891 4,724 Commercial business (2) 176 - 183 - Construction 1,791 - - - Total commercial loans 60,429 780 51,600 6,092 One- to four-family residential mortgage (3) 4,581 196 7,612 420 Consumer loans: Home equity loans (3) 59 - 31 - Total $ 65,069 $ 976 $ 59,243 $ 6,512 The following table presents the risk category of loans as of Term Loans by Origination Year for Fiscal Years ended June 30, 2022 2021 2020 2019 2018 Prior Revolving Loans Total (In Thousands) Multi-family mortgage: Pass $ 520,269 $ 263,316 $ 216,072 $ 256,541 $ 252,909 $ 500,758 $ - $ 2,009,865 Special Mention - - - 16,370 4,994 4,759 - 26,123 Substandard - - - 10,182 2,788 27,045 - 40,015 Doubtful - - - - - - - - Total multi-family mortgage 520,269 263,316 216,072 283,093 260,691 532,562 - 2,076,003 Nonresidential mortgage: Pass 201,205 86,212 64,161 37,706 51,884 569,499 6,087 1,016,754 Special Mention - - - 23,364 4,070 9,249 - 36,683 Substandard - 724 - 933 0 30,894 - 32,551 Doubtful - - - - - - - - Total nonresidential mortgage 201,205 86,936 64,161 62,003 55,954 609,642 6,087 1,085,988 Commercial business: Pass 36,918 39,481 12,441 3,961 9,147 7,370 54,513 163,831 Special Mention - - 65 189 2,173 895 216 3,538 Substandard - 39 230 - 1,422 285 58 2,034 Doubtful - - - - - 145 3 148 Total commercial business 36,918 39,520 12,736 4,150 12,742 8,695 54,790 169,551 Construction loans: Pass 7,868 85,564 9,492 3,058 6,513 1,117 5,735 119,347 Special Mention - - - - - - - - Substandard - - - - - 1,790 - 1,790 Doubtful - - - - - - - - Total construction loans 7,868 85,564 9,492 3,058 6,513 2,907 5,735 121,137 Residential mortgage: Pass 312,625 531,111 90,576 53,262 56,834 464,738 375 1,509,521 Special Mention - - - 1,213 - 439 - 1,652 Substandard - - 1,704 83 - 15,020 - 16,807 Doubtful - - - - - - - - Total residential mortgage 312,625 531,111 92,280 54,558 56,834 480,197 375 1,527,980 Home equity loans: Pass 1,759 715 1,744 3,245 2,125 7,552 22,156 39,296 Special Mention - - - - - 265 - 265 Substandard - - - 124 - 1,816 - 1,940 Doubtful - - - - - - - - Total home equity loans 1,759 715 1,744 3,369 2,125 9,633 22,156 41,501 Other consumer loans Pass 281 324 477 398 247 913 40 2,680 Special Mention - - - - - - - - Substandard - - - - - - 0 0 Doubtful - - - - - - 75 75 Other consumer loans 281 324 477 398 247 913 115 2,755 Total loans $ 1,080,925 $ 1,007,486 $ 396,962 $ 410,629 $ 395,106 $ 1,644,549 $ 89,258 $ 5,024,915 Term Loans by Origination Year for Fiscal Years ended June 30, 2021 2020 2019 2018 2017 Prior Revolving Loans Total (In Thousands) Multi-family mortgage: Pass $ 281,402 $ 257,970 $ 374,871 $ 341,304 $ 343,370 $ 374,909 $ - $ 1,973,826 Special Mention - - 26,974 5,079 4,834 1,054 - 37,941 Substandard - - - 2,896 13,198 11,399 - 27,493 Doubtful - - - - - - - - Total multi-family mortgage 281,402 257,970 401,845 349,279 361,402 387,362 - 2,039,260 Nonresidential mortgage: Pass 99,602 77,146 56,435 64,616 254,940 441,696 6,150 1,000,585 Special Mention - - 23,520 4,146 8,801 4,513 - 40,980 Substandard 743 - - 4,934 20,602 11,600 - 37,879 Doubtful - - - - - - - - Total nonresidential mortgage 100,345 77,146 79,955 73,696 284,343 457,809 6,150 1,079,444 Commercial business: Pass 44,514 18,988 4,701 12,654 3,322 12,892 65,657 162,728 Special Mention - - - 2,304 945 12 461 3,722 Substandard 41 76 160 1,474 132 189 - 2,072 Doubtful - - - - - 420 9 429 Total commercial business 44,555 19,064 4,861 16,432 4,399 13,513 66,127 168,951 Construction loans: Pass 40,332 17,404 11,203 13,860 1,641 1,382 5,735 91,557 Special Mention - - - - - - - - Substandard - - - - - 2,247 - 2,247 Doubtful - - - - - - - - Total construction loans 40,332 17,404 11,203 13,860 1,641 3,629 5,735 93,804 Residential mortgage: Pass 560,543 124,606 69,917 74,754 119,238 472,587 375 1,422,020 Special Mention - - 1,233 - - 712 - 1,945 Substandard - 1,040 671 511 1,468 20,066 - 23,756 Doubtful - - - - - - - - Total residential mortgage 560,543 125,646 71,821 75,265 120,706 493,365 375 1,447,721 Home equity loans: Pass 834 2,508 4,585 2,778 2,241 7,798 24,788 45,532 Special Mention - - - - - 393 - 393 Substandard - - - - 11 1,935 - 1,946 Doubtful - - - - - - - - Total home equity loans 834 2,508 4,585 2,778 2,252 10,126 24,788 47,871 Other consumer loans Pass 550 517 633 256 127 1,044 44 3,171 Special Mention - - - - - - - - Substandard - - - - - - 1 1 Doubtful - - - - - - 87 87 Other consumer loans 550 517 633 256 �� 127 1,044 132 3,259 Total loans $ 1,028,561 $ 500,255 $ 574,903 $ 531,566 $ 774,870 $ 1,366,848 $ 103,307 $ 4,880,310 The following tables present the balance of the allowance for credit losses at Allowance for Credit Losses March 31, 2022 Loans Loans Loans individually Loans collectively Total allowance for credit losses (In Thousands) Multi-family mortgage $ 0 $ 0 $ 1,083 $ 23,144 $ 24,227 Nonresidential mortgage 0 363 119 8,557 9,039 Commercial business 0 11 6 1,708 1,725 Construction 0 0 0 1,274 1,274 One- to four-family 0 242 278 6,758 7,278 Home equity loans 22 0 0 214 236 Other consumer 0 0 0 81 81 Total loans $ 22 $ 616 $ 1,486 $ 41,736 $ 43,860 Balance of Loans Receivable March 31, 2022 Loans Loans Loans individually Loans collectively Total loans (In Thousands) Multi-family mortgage $ 0 $ 0 $ 40,015 $ 2,035,988 $ 2,076,003 Nonresidential mortgage 381 13,179 29,911 1,042,517 1,085,988 Commercial business 176 1,267 317 167,791 169,551 Construction 0 5,735 1,791 113,611 121,137 One- to four-family 230 6,666 8,386 1,512,698 1,527,980 Home equity loans 342 60 1,147 39,952 41,501 Other consumer 0 0 0 2,755 2,755 Total loans $ 1,129 $ 26,907 $ 81,567 $ 4,915,312 $ 5,024,915 Unaccreted yield adjustments (21,714 ) Loans receivable, net of $ 5,003,201 Allowance for Credit Losses June 30, 2021 Loans Loans Loans individually Loans collectively Total allowance for credit losses (In Thousands) Multi-family mortgage $ 0 $ 155 $ 1,368 $ 26,927 $ 28,450 Nonresidential mortgage 2,700 692 2,025 10,826 16,243 Commercial business 0 15 33 2,038 2,086 Construction 0 49 0 1,121 1,170 One- to four-family 122 204 447 8,974 9,747 Home equity loans 21 1 1 410 433 Other consumer 0 0 0 36 36 Total loans $ 2,843 $ 1,116 $ 3,874 $ 50,332 $ 58,165 Balance of Loans Receivable June 30, 2021 Loans Loans Loans individually Loans collectively Total loans (In Thousands) Multi-family mortgage $ 0 $ 5,599 $ 18,526 $ 2,015,135 $ 2,039,260 Nonresidential mortgage 6,519 25,844 30,668 1,016,413 1,079,444 Commercial business 183 2,533 729 165,506 168,951 Construction 0 12,970 2,228 78,606 93,804 One- to four-family 3,617 4,785 15,553 1,423,766 1,447,721 Home equity loans 380 65 1,364 46,062 47,871 Other consumer 0 - 0 3,259 3,259 Total loans $ 10,699 $ 51,796 $ 69,068 $ 4,748,747 $ 4,880,310 Unaccreted yield adjustments (28,916 ) Loans receivable, net of $ 4,851,394 Changes in the Allowance for Credit Losses Three Months Ended March 31, 2022 Balance at Charge-offs Recoveries (Reversal of) Balance at (In Thousands) Multi-family mortgage $ 25,795 $ 0 $ 0 $ (1,568 ) $ 24,227 Nonresidential mortgage 10,078 (441 ) 0 (598 ) 9,039 Commercial business 1,903 0 4 (182 ) 1,725 Construction 1,441 0 0 (167 ) 1,274 One- to four-family 8,601 0 0 (1,323 ) 7,278 Home equity loans 308 0 0 (72 ) 236 Other consumer 90 0 1 (10 ) 81 Total loans $ 48,216 $ (441 ) $ 5 $ (3,920 ) $ 43,860 Changes in the Allowance for Credit Losses Nine Months Ended March 31, 2022 Balance at Charge-offs Recoveries (Reversal of) Balance at (In Thousands) Multi-family mortgage $ 28,450 $ (104 ) $ 0 $ (4,119 ) $ 24,227 Nonresidential mortgage 16,243 (2,538 ) 0 (4,666 ) 9,039 Commercial business 2,086 (175 ) 105 (291 ) 1,725 Construction 1,170 0 0 104 1,274 One- to four-family 9,747 0 147 (2,616 ) 7,278 Home equity loans 433 0 1 (198 ) 236 Other consumer 36 (2 ) 1 46 81 Total loans $ 58,165 $ (2,819 ) $ 254 $ (11,740 ) $ 43,860 Changes in the Allowance for Credit Losses Three Months Ended March 31, 2021 Balance at Charge-offs Recoveries (Reversal of) Balance at (In Thousands) Multi-family mortgage $ 29,500 $ - $ - $ (514 ) $ 28,986 Nonresidential mortgage 15,933 (9 ) - 4,053 19,977 Commercial business 3,348 (738 ) 2 (86 ) 2,526 Construction 1,205 - - 40 1,245 One- to four-family 12,625 - 2 (2,249 ) 10,378 Home equity loans 725 - - (117 ) 608 Other consumer 50 (9 ) 2 (1 ) 42 Total loans $ 63,386 $ (756 ) $ 6 $ 1,126 $ 63,762 Changes in the Allowance for Credit Losses Nine Months Ended March 31, 2021 Balance at June 30, 2020 (prior to Impact of adopting Charge-offs Recoveries Initial allowance on PCD loans (Reversal of) Balance at (In Thousands) Multi-family mortgage $ 20,916 $ 8,408 $ 0 $ 0 $ 250 $ (588 ) $ 28,986 Nonresidential mortgage 8,763 2,390 (75 ) 0 1,720 7,179 19,977 Commercial business 1,926 (421 ) (802 ) 7 1,007 809 2,526 Construction 236 80 0 0 99 830 1,245 One- to four-family 4,860 9,106 (13 ) 2 720 (4,297 ) 10,378 Home equity loans 568 92 (32 ) 0 105 (125 ) 608 Other consumer 58 (15 ) (22 ) 9 0 12 42 Total loans $ 37,327 $ 19,640 $ (944 ) $ 18 $ 3,901 $ 3,820 $ 63,762 The following table presents the activity in the allowance for credit losses on off balance sheet commitments recorded in other non-interest expense for the three months and Three Months Ended Nine Months Ended March 31, March 31, 2022 2021 2022 2021 (In Thousands) (In Thousands) Balance at beginning of the period $ 1,148 $ 1,058 $ 1,708 $ - Impact of adopting Topic 326 (1) - - - 536 (Reversal of) provision for credit losses (208 ) 207 (768 ) 729 Balance at end of the period $ 940 $ 1,265 $ 940 $ 1,265 March 31, June 30, 2022 2021 (In Thousands) Non-interest-bearing demand $ 621,954 $ 593,718 Interest-bearing demand 2,154,488 1,902,478 Savings 1,088,974 1,111,364 Certificates of deposits 1,663,246 1,877,746 Total deposits $ 5,528,662 $ 5,485,306 At December 31, 2022 and June 30, 2022, represents FHLB overnight line of credit borrowings. March 31, June 30, 2022 2021 (In Thousands) FHLB advances $ 541,220 $ 665,876 Overnight borrowings 310,000 20,000 Total borrowings $ 851,220 $ 685,876 Fixed rate advances from the FHLB of New York mature as follows: March 31, 2022 June 30, 2021 Balance Weighted Balance Weighted (Dollars in Thousands) By remaining period to maturity: Less than one year $ 265,000 0.63 % $ 390,000 0.33 % One to two years 145,000 3.04 145,000 3.04 Two to three years 103,500 2.65 22,500 2.63 Three to four years 29,000 2.77 103,500 2.68 Four to five years 0 0 6,500 2.82 Greater than five years 0 0 0 0 Total advances 542,500 1.77 % 667,500 1.38 % Unamortized fair value adjustments (1,280 ) (1,624 ) Total advances, net of fair value adjustments $ 541,220 $ 665,876 9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES positions and assets. The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the March 31, 2022 Asset Derivatives Liability Derivatives Location Fair Value Location Fair Value (In Thousands) Derivatives designated as hedging instruments: Interest rate contracts Other assets $ 34,007 Other liabilities $ 0 Total $ 34,007 $ 0 June 30, 2021 Asset Derivatives Liability Derivatives Location Fair Value Location Fair Value (In Thousands) Derivatives designated as hedging instruments: Interest rate contracts Other assets $ 1,832 Other liabilities $ 673 Total $ 1,832 $ 673 and one interest rate floor with a notional amount of $100.0 million hedging floating-rate available for sale securities. The table below presents the pre-tax effects of the Company’s derivative instruments designated as cash flow hedges on the Consolidated Statements of Income for the three months and This amount includes the amortized cost basis of the closed portfolios of loans receivable used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At December 31, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was $852.4 million. Three Months Ended Nine Months Ended March 31, March 31, 2022 2021 2022 2021 (In Thousands) (In Thousands) Amount of gain recognized in other comprehensive income $ 23,343 $ 13,075 $ 28,607 $ 14,353 Amount of loss reclassified from accumulated other comprehensive income (1,268 ) (1,987 ) (4,271 ) (6,576 ) The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives in the Consolidated Statements of Financial Condition as of March 31, 2022 Gross Amounts Not Offset Gross Amount Recognized Gross Amounts Offset Net Amounts Presented Financial Instruments Cash Collateral Received Net Amount (In Thousands) Assets: Interest rate contracts $ 34,158 $ (151 ) $ 34,007 $ - $ - $ 34,007 Total $ 34,158 $ (151 ) $ 34,007 $ - $ - $ 34,007 Gross Amounts Not Offset Gross Amount Recognized Gross Amounts Offset Net Amounts Presented Financial Instruments Cash Collateral Posted Net Amount (In Thousands) Liabilities: Interest rate contracts $ 151 $ (151 ) $ 0 $ - $ 0 $ - Total $ 151 $ (151 ) $ 0 $ - $ 0 $ - June 30, 2021 Gross Amounts Not Offset Gross Amount Recognized Gross Amounts Offset Net Amounts Presented Financial Instruments Cash Collateral Received Net Amount (In Thousands) Assets: Interest rate contracts $ 6,847 $ (5,015 ) $ 1,832 $ - $ - $ 1,832 Total $ 6,847 $ (5,015 ) $ 1,832 $ - $ - $ 1,832 Gross Amounts Not Offset Gross Amount Recognized Gross Amounts Offset Net Amounts Presented Financial Instruments Cash Collateral Posted Net Amount (In Thousands) Liabilities: Interest rate contracts $ 5,688 $ (5,015 ) $ 673 $ - $ (673 ) $ - Total $ 5,688 $ (5,015 ) $ 673 $ - $ (673 ) $ - included as an offsetting amount. 10. BENEFIT PLANS Components of Net Periodic Expense Three Months Ended Nine Months Ended Affected Line Item in the Consolidated March 31, March 31, Statements of Income 2022 2021 2022 2021 (In Thousands) (In Thousands) Service cost $ 29 $ 26 $ 87 $ 79 Salaries and employee benefits Interest cost 67 66 205 197 Other expense Amortization of unrecognized loss 20 20 60 62 Other expense Expected return on assets (27 ) (28 ) (83 ) (85 ) Other expense Net periodic benefit cost $ 89 $ 84 $ 269 $ 253 The following table presents a reconciliation between the reported income taxes for the periods presented and the income taxes which would be computed by applying the federal income tax rate of Three Months Ended Nine Months Ended March 31, March 31, 2022 2021 2022 2021 (Dollars in Thousands) (Dollars in Thousands) Income before income taxes $ 24,215 $ 22,155 $ 76,772 $ 58,980 Statutory federal tax rate 21 % 21 % 21 % 21 % Federal income tax expense at statutory rate $ 5,085 $ 4,653 $ 16,122 $ 12,386 (Reduction) increase in income taxes resulting from: Tax exempt interest (66 ) (85 ) (204 ) (270 ) State tax, net of federal tax effect 1,908 1,498 6,026 3,738 Incentive stock option compensation expense 3 23 42 63 Income from bank-owned life insurance (317 ) (324 ) (973 ) (989 ) Non-deductible merger-related expenses 0 0 0 49 Bargain purchase gain 0 0 0 (641 ) Other items, net (91 ) (21 ) (418 ) 429 $ 6,522 $ 5,744 $ 20,595 $ 14,765 Reversal of valuation allowance 0 (12 ) 0 (535 ) Total income tax expense $ 6,522 $ 5,732 $ 20,595 $ 14,230 Effective income tax rate 26.93 % 25.87 % 26.83 % 24.13 % 12. FAIR VALUE OF FINANCIAL INSTRUMENTS Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability or inputs that are derived principally from, or corroborated by, market data by correlation or other means. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. 2022: Those assets measured at fair value on a recurring basis are summarized below: March 31, 2022 Quoted Significant Significant Total (In Thousands) Assets: Debt securities available for sale: Obligations of state and political subdivisions $ - $ 31,078 $ - $ 31,078 Asset-backed securities - 229,584 - 229,584 Collateralized loan obligations - 311,620 - 311,620 Corporate bonds - 153,495 - 153,495 Total debt securities - 725,777 - 725,777 Mortgage-backed securities available for sale: Collateralized mortgage obligations - 7,996 - 7,996 Residential pass-through securities - 570,150 - 570,150 Commercial pass-through securities - 222,163 - 222,163 Total mortgage-backed securities - 800,309 - 800,309 Total securities available for sale $ - $ 1,526,086 $ - $ 1,526,086 Interest rate contracts $ - $ 34,007 $ - $ 34,007 Total assets $ - $ 1,560,093 $ - $ 1,560,093 June 30, 2021 Quoted Prices Significant Significant Total (In Thousands) Assets: Debt securities available for sale: Obligations of state and political subdivisions $ - $ 34,603 $ - $ 34,603 Asset-backed securities - 242,989 - 242,989 Collateralized loan obligations - 189,880 - 189,880 Corporate bonds - 158,351 - 158,351 Total debt securities - 625,823 - 625,823 Mortgage-backed securities available for sale: Collateralized mortgage obligations - 13,739 - 13,739 Residential pass-through securities - 744,491 - 744,491 Commercial pass-through securities - 292,811 - 292,811 Total mortgage-backed securities - 1,051,041 - 1,051,041 Total securities available for sale $ - $ 1,676,864 $ - $ 1,676,864 Interest rate contracts $ - $ 1,832 $ - $ 1,832 Total assets $ - $ 1,678,696 $ - $ 1,678,696 Liabilities: Interest rate contracts $ - $ 673 $ - $ 673 Total liabilities $ - $ 673 $ - $ 673 2022: Those assets measured at fair value on a non-recurring basis are summarized below: March 31, 2022 Quoted Prices Significant Significant Total (In Thousands) Collateral dependent loans: Residential mortgage $ - $ - $ 2,239 $ 2,239 Multi-family mortgage - - 4,558 4,558 Nonresidential mortgage - - 5,799 5,799 Total $ - $ - $ 12,596 $ 12,596 Other real estate owned, net: Residential $ - $ - $ 401 $ 401 Total $ - $ - $ 401 $ 401 June 30, 2021 Quoted Prices Significant Significant Total (In Thousands) Collateral dependent loans: Residential mortgage $ - $ - $ 3,051 $ 3,051 Multi-family mortgage 6,932 6,932 Nonresidential mortgage - - 8,679 8,679 Total $ - $ - $ 18,662 $ 18,662 Other real estate owned, net: Residential $ - $ - $ 178 $ 178 Total $ - $ - $ 178 $ 178 The following March 31, 2022 Fair Valuation Unobservable Range Weighted (Dollars in Thousands) Collateral dependent loans: Residential mortgage $ 2,239 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 7% - 14% 10.39 % Multi-family mortgage 4,558 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 10% - 11% 10.60 % Nonresidential mortgage 5,799 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 9% - 19% 14.97 % Total $ 12,596 Other real estate owned, net: Residential $ 401 Market valuation of underlying collateral (3) Adjustments to reflect current conditions/selling costs (2) 5% - 6% 5.44 % Total $ 401 June 30, 2021 Fair Valuation Unobservable Range Weighted (Dollars in Thousands) Collateral dependent loans: Residential mortgage $ 3,051 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 7% - 13% 9.77 % Multi-family mortgage 6,932 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 10% - 11% 10.39 % Nonresidential mortgage 8,679 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 9% - 16% 14.48 % Total $ 18,662 Other real estate owned, net: Residential $ 178 Market valuation of underlying collateral (3) Adjustments to reflect current conditions/selling costs (2) 6.00% 6.00 % Total $ 178 The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2022 Carrying Fair Quoted Significant Significant (In Thousands) Financial assets: Cash and cash equivalents $ 62,379 $ 62,379 $ 62,379 $ - $ - Investment securities available for sale 1,526,086 1,526,086 - 1,526,086 - Investment securities held to maturity 121,853 117,017 - 117,017 - Loans held-for-sale 2,822 2,759 - 2,759 - Net loans receivable 4,959,341 4,877,212 - - 4,877,212 FHLB Stock 30,997 - - - - Interest receivable 19,517 19,517 3 5,311 14,203 Interest rate contracts 34,007 34,007 - 34,007 - Financial liabilities: Deposits 5,528,662 5,515,560 3,865,416 - 1,650,144 Borrowings 851,220 853,824 - - 853,824 Interest payable on deposits 164 164 79 - 85 Interest payable on borrowings 1,365 1,365 - - 1,365 2022: June 30, 2021 Carrying Fair Quoted Significant Significant (In Thousands) Financial assets: Cash and cash equivalents $ 67,855 $ 67,855 $ 67,855 $ - $ - Investment securities available for sale 1,676,864 1,676,864 - 1,676,864 - Investment securities held to maturity 38,138 39,610 - 39,610 - Loans held-for-sale 16,492 16,934 - 16,934 - Net loans receivable 4,793,229 4,830,136 - - 4,830,136 FHLB Stock 36,615 - - - - Interest receivable 19,362 19,362 1 4,238 15,123 Interest rate contracts 1,832 1,832 - 1,832 - Financial liabilities: Deposits 5,485,306 5,490,923 3,607,560 - 1,883,363 Borrowings 685,876 701,419 - - 701,419 Interest payable on deposits 145 145 96 - 49 Interest payable on borrowings 1,335 1,335 - - 1,335 Interest rate contracts 673 673 - 673 - 13. COMPREHENSIVE INCOME (LOSS) The components of accumulated other comprehensive March 31, June 30, 2022 2021 (In Thousands) Net unrealized (loss) gain on securities available for sale $ (63,988 ) $ 10,011 Tax effect 18,760 (2,882 ) Net of tax amount (45,228 ) 7,129 Fair value adjustments on derivatives 32,566 (312 ) Tax effect (9,557 ) 94 Net of tax amount 23,009 (218 ) Benefit plan adjustments (1,033 ) (1,093 ) Tax effect 303 326 Net of tax amount (730 ) (767 ) Total accumulated other comprehensive (loss) income $ (22,949 ) $ 6,144 Three Months Ended Nine Months Ended March 31, March 31, 2022 2021 2022 2021 (In Thousands) Net unrealized holding loss on securities $ (59,249 ) $ (22,285 ) $ (73,995 ) $ (20,374 ) Net realized gain on sale and call of securities (3 ) (18 ) (4 ) (454 ) Fair value adjustments on derivatives 24,611 15,062 32,878 20,929 Amortization of benefit plan net actuarial loss 20 20 60 62 Other comprehensive (loss) income before taxes (34,621 ) (7,221 ) (41,061 ) 163 Tax effect 10,098 2,125 11,968 (63 ) Total other comprehensive (loss) income $ (24,523 ) $ (5,096 ) $ (29,093 ) $ 100 14. NET INCOME PER COMMON SHARE (“EPS”) The following schedule shows the Company’s earnings per share calculations for the periods presented: Three Months Ended March 31, Nine Months Ended March 31, 2022 2021 2022 2021 (In Thousands, Except Per Share Data) Net income $ 17,693 $ 16,423 $ 56,177 $ 44,750 Weighted average number of common shares 69,790 80,673 72,130 83,958 Effect of dilutive securities 27 17 24 3 Weighted average number of common shares 69,817 80,690 72,154 83,961 Basic earnings per share $ 0.25 $ 0.20 $ 0.78 $ 0.53 Diluted earnings per share $ 0.25 $ 0.20 $ 0.78 $ 0.53 2022. 2022. 2022 March 31, June 30, Increase/ 2022 2021 (Decrease) (In Thousands) Commercial loans: Multi-family mortgage $ 2,076,003 $ 2,039,260 $ 36,743 Nonresidential mortgage 1,085,988 1,079,444 6,544 Commercial business 169,551 168,951 600 Construction 121,137 93,804 27,333 Total commercial loans 3,452,679 3,381,459 71,220 One- to four-family residential mortgage 1,527,980 1,447,721 80,259 Consumer loans: Home equity loans 41,501 47,871 (6,370 ) Other consumer 2,755 3,259 (504 ) Total consumer loans 44,256 51,130 (6,874 ) Total loans 5,024,915 4,880,310 144,605 Unaccreted yield adjustments (21,714 ) (28,916 ) 7,202 Allowance for credit losses (43,860 ) (58,165 ) 14,305 Net loans receivable $ 4,959,341 $ 4,793,229 $ 166,112 March 31, 2022 June 30, 2021 Balance LTV Balance LTV (Dollars in Thousands) Commercial mortgage loans: Multi-family mortgage $ 2,076,003 64 % $ 2,039,260 64 % Nonresidential mortgage 1,085,988 54 % 1,079,444 54 % Construction 121,137 59 % 93,804 61 % Total commercial mortgage loans 3,283,128 61 % 3,212,508 61 % One- to four-family residential mortgage 1,527,980 61 % 1,447,721 59 % Consumer loans: Home equity loans 41,501 46 % 47,871 47 % Total mortgage loans $ 4,852,609 61 % $ 4,708,100 60 % 2022: 2022, nonperforming assets consisted of $70.3 million of nonperforming loans, $21.7 million of non-accrual commercial loans held for sale and $178,000 of OREO. March 31, June 30, Increase/ 2022 2021 (Decrease) (In Thousands) Non-interest-bearing deposits $ 621,954 $ 593,718 $ 28,236 Interest-bearing deposits: Interest-bearing demand 2,154,488 1,902,478 252,010 Savings 1,088,974 1,111,364 (22,390 ) Certificates of deposit 1,663,246 1,877,746 (214,500 ) Interest-bearing deposits 4,906,708 4,891,588 15,120 Total deposits $ 5,528,662 $ 5,485,306 $ 43,356 For the Three Months Ended March 31, 2022 2021 Average Interest Average Average Interest Average (Dollars in Thousands) Interest-earning assets: Loans receivable (1) $ 4,850,236 $ 45,846 3.78 % $ 4,816,592 $ 50,159 4.17 % Taxable investment securities (2) 1,620,996 8,024 1.98 1,674,223 7,891 1.89 Tax-exempt securities (2) 55,390 316 2.28 73,573 410 2.23 Other interest-earning assets (3) 79,644 415 2.08 169,291 705 1.67 Total interest-earning assets 6,606,266 54,601 3.31 6,733,679 59,165 3.51 Non-interest-earning assets 601,684 617,440 Total assets $ 7,207,950 $ 7,351,119 Interest-bearing liabilities: Interest-bearing demand $ 2,133,977 $ 1,166 0.22 $ 1,831,617 $ 1,558 0.34 Savings 1,088,351 274 0.10 1,084,981 557 0.21 Certificates of deposit 1,650,048 2,125 0.52 1,904,234 4,555 0.96 Total interest-bearing deposits 4,872,376 3,565 0.29 4,820,832 6,670 0.55 Borrowings 684,478 3,309 1.93 865,690 4,012 1.85 Total interest-bearing liabilities 5,556,854 6,874 0.49 5,686,522 10,682 0.75 Non-interest-bearing liabilities (4) 673,607 582,036 Total liabilities 6,230,461 6,268,558 Stockholders' equity 977,489 1,082,561 Total liabilities and stockholders' equity $ 7,207,950 $ 7,351,119 Net interest income $ 47,727 $ 48,483 Interest rate spread (5) 2.82 % 2.76 % Net interest margin (6) 2.89 % 2.88 % Ratio of interest-earning assets 1.19 1.18 2022. higher yielding securities. periods. unfunded commitments. period. Net interest income For the Nine Months Ended March 31, 2022 2021 Average Interest Average Average Interest Average (Dollars in Thousands) Interest-earning assets: Loans receivable (1) $ 4,836,189 $ 141,651 3.91 % $ 4,882,529 $ 153,776 4.20 % Taxable investment securities (2) 1,627,160 23,831 1.95 1,521,839 22,934 2.01 Tax-exempt securities (2) 57,411 976 2.27 78,442 1,297 2.20 Other interest-earning assets (3) 81,078 1,261 2.07 228,075 2,406 1.41 Total interest-earning assets 6,601,838 167,719 3.39 6,710,885 180,413 3.58 Non-interest-earning assets 609,996 624,644 Total assets $ 7,211,834 $ 7,335,529 Interest-bearing liabilities: Interest-bearing demand $ 2,037,725 $ 3,446 0.23 $ 1,658,437 $ 5,727 0.46 Savings 1,092,738 896 0.11 1,049,655 2,874 0.37 Certificates of deposit 1,714,448 6,951 0.54 1,930,970 17,778 1.23 Total interest-bearing deposits 4,844,911 11,293 0.31 4,639,062 26,379 0.76 Borrowings 690,372 10,422 2.01 1,020,472 14,865 1.94 Total interest-bearing liabilities 5,535,283 21,715 0.52 5,659,534 41,244 0.97 Non-interest-bearing liabilities (4) 671,935 572,249 Total liabilities 6,207,218 6,231,783 Stockholders' equity 1,004,616 1,103,746 Total liabilities and stockholders' equity $ 7,211,834 $ 7,335,529 Net interest income $ 146,004 $ 139,169 Interest rate spread (5) 2.87 % 2.61 % Net interest margin (6) 2.95 % 2.77 % Ratio of interest-earning assets 1.19 1.19 2022. The loss was the result of a previously announced wholesale restructuring that involved the sale of $120.4 million of available for sale securities during the six months ended December 31, 2022. The proceeds of the sale were reinvested in higher yielding securities. payouts on life insurance policies. growth. At March 31, 2022 Actual For Capital To Be Well Capitalized Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 668,961 14.14 % $ 378,457 8.00 % $ 473,071 10.00 % Tier 1 capital (to risk-weighted assets) 641,798 13.57 % 283,843 6.00 % 378,457 8.00 % Common equity tier 1 capital (to risk-weighted assets) 641,798 13.57 % 212,882 4.50 % 307,496 6.50 % Tier 1 capital (to adjusted total assets) 641,798 9.14 % 280,960 4.00 % 351,200 5.00 % At June 30, 2021 Actual For Capital To Be Well Capitalized Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 761,883 17.22 % $ 353,970 8.00 % $ 442,462 10.00 % Tier 1 capital (to risk-weighted assets) 726,737 16.42 % 265,477 6.00 % 353,970 8.00 % Common equity tier 1 capital (to risk-weighted assets) 726,737 16.42 % 199,108 4.50 % 287,600 6.50 % Tier 1 capital (to adjusted total assets) 726,737 10.23 % 284,114 4.00 % 355,142 5.00 % At March 31, 2022 Actual For Capital Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 802,929 16.97 % $ 378,574 8.00 % Tier 1 capital (to risk-weighted assets) 775,766 16.39 % 283,931 6.00 % Common equity tier 1 capital (to risk-weighted assets) 775,766 16.39 % 212,948 4.50 % Tier 1 capital (to adjusted total assets) 775,766 11.04 % 281,055 4.00 % At June 30, 2021 Actual For Capital Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 872,823 19.65 % $ 355,274 8.00 % Tier 1 capital (to risk-weighted assets) 837,677 18.86 % 266,456 6.00 % Common equity tier 1 capital (to risk-weighted assets) 837,677 18.86 % 199,842 4.50 % Tier 1 capital (to adjusted total assets) 837,677 11.76 % 284,877 4.00 % The two-year delay ended for us as of June 30, 2022 and we then began the three-year transition period. March 31, 2022 1 to 12 Months 13 to 24 Months Change in $ Amount % Change $ Amount % Change $ Amount % Change (Dollars in Thousands) +300 bps 1,139,213 (11.91 ) % 182,874 (10.70 ) % 216,395 3.42 % +200 bps 1,191,919 (7.84 ) % 189,586 (7.43 ) % 213,631 2.10 % +100 bps 1,261,373 (2.47 ) % 199,005 (2.83 ) % 213,632 2.10 % 0 bps 1,293,258 - 204,792 - 209,236 - -100 bps 1,244,971 (3.73 ) % 196,007 (4.29 ) % 190,088 (9.15 ) % June 30, 2021 1 to 12 Months 13 to 24 Months Change in $ Amount % Change $ Amount % Change $ Amount % Change (Dollars in Thousands) +300 bps 1,083,847 (8.82 ) % 175,830 (8.38 ) % 196,307 4.11 % +200 bps 1,132,915 (4.69 ) % 182,089 (5.12 ) % 195,756 3.82 % +100 bps 1,176,890 (0.99 ) % 187,961 (2.06 ) % 194,543 3.17 % 0 bps 1,188,656 - 191,908 - 188,559 - -100 bps 1,071,463 (9.86 ) % 181,645 (5.35 ) % 169,447 (10.14 ) % Period Total Number Average Price Total Number Maximum January 1-31, 2022 599,585 $ 13.49 599,585 4,499,760 February 1-28, 2022 751,431 $ 13.37 751,431 3,748,329 March 1-31, 2022 668,609 $ 13.21 668,609 3,079,720 Total 2,019,625 $ 13.35 2,019,625 3,079,720 3.1 3.2 4 31.1 31.2 32.1 32.2 101 The following materials from the Company’s Form 10-Q for the quarter ended 101.INS Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document) 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) By: Craig L. Montanaro President and Chief Executive Officer By: Keith Suchodolski Senior Executive Vice President and Chief Financial Officer☒xMarchDecember 31, 2022☐o to
incorporation or organization)
Identification Number), New Jersey973-244-4500Yesx ☒ No ☐oYesx ☒ No ☐o☒xAccelerated filer ☐o☐oSmaller reporting company ☐oEmerging growth company ☐o☐☐o No ☒xApril 29, 2022.70,421,27067,378,274 shares outstanding
Number1234683951525353535353535455
respectively), net of allowance for credit losses of $0 at March 31, 2022 and June 30, 2021
allowance for credit losses of $0 at March 31, 2022 and June 30, 2021
NaN issued and outstanding
71,424,469 shares and 78,964,859 shares issued and outstanding, respectively
2,609,069 shares and 2,759,594 shares, respectivelyDecember 31,
2022June 30,
2022(Unaudited) Assets Cash and amounts due from depository institutions $ 21,029 $ 26,094 Interest-bearing deposits in other banks 54,631 75,521 Cash and cash equivalents 75,660 101,615 Investment securities available for sale (amortized cost of $1,437,195 and $1,462,124, respectively) 1,286,354 1,344,093 Investment securities held to maturity (fair value of $138,393 and $108,118, respectively) 153,786 118,291 Loans held-for-sale 12,940 28,874 Loans receivable 5,984,133 5,417,845 Less: allowance for credit losses on loans (48,877) (47,058) Net loans receivable 5,935,256 5,370,787 Premises and equipment 50,953 53,281 Federal Home Loan Bank (“FHLB”) of New York stock 69,022 47,144 Accrued interest receivable 27,368 20,466 Goodwill 210,895 210,895 Core deposit intangibles 2,732 3,020 Bank owned life insurance 289,673 289,177 Deferred income tax assets, net 51,107 49,350 Other real estate owned 13,410 178 Other assets 110,162 82,712 Total Assets $ 8,289,318 $ 7,719,883 Liabilities and Stockholders' Equity Liabilities Deposits: Non-interest-bearing $ 650,950 $ 653,899 Interest-bearing 5,320,421 5,208,357 Total deposits 5,971,371 5,862,256 Borrowings 1,383,573 901,337 Advance payments by borrowers for taxes 17,307 16,746 Other liabilities 44,427 45,544 Total Liabilities 7,416,678 6,825,883 Stockholders' Equity Preferred stock, $0.01 par value, 100,000,000 shares authorized; none issued and outstanding — — Common stock, $0.01 par value; 800,000,000 shares authorized; 67,387,871 shares and 68,666,323 shares issued and outstanding, respectively 674 687 Paid-in capital 515,332 528,396 Retained earnings 449,489 445,451 Unearned employee stock ownership plan shares; 2,458,547 shares and 2,558,895 shares, respectively (23,834) (24,807) Accumulated other comprehensive loss (69,021) (55,727) Total Stockholders' Equity 872,640 894,000 Total Liabilities and Stockholders' Equity $ 8,289,318 $ 7,719,883
Provision for Credit Losses
OutstandingThree Months Ended
December 31,Six Months Ended
December 31,2022 2021 2022 2021 Interest Income Loans $ 57,996 $ 47,575 $ 110,931 $ 95,805 Taxable investment securities 13,221 7,595 23,660 15,807 Tax-exempt investment securities 219 327 504 660 Other interest-earning assets 1,005 415 1,766 846 Total Interest Income 72,441 55,912 136,861 113,118 Interest Expense Deposits 18,822 3,663 29,691 7,728 Borrowings 8,836 3,562 13,856 7,113 Total Interest Expense 27,658 7,225 43,547 14,841 Net Interest Income 44,783 48,687 93,314 98,277 Provision for (reversal of) credit losses 1,671 (2,420) 2,341 (7,820) Net Interest Income after Provision for (Reversal of) Credit Losses 43,112 51,107 90,973 106,097 Non-Interest Income Fees and service charges 734 698 1,497 1,305 (Loss) gain on sale and call of securities (15,227) — (15,227) 1 Gain on sale of loans 134 970 529 1,976 Income from bank owned life insurance 1,761 1,562 5,459 3,123 Electronic banking fees and charges 397 421 903 828 Other income 3,723 482 4,278 700 Total Non-Interest Income (8,478) 4,133 (2,561) 7,933 Non-Interest Expense Salaries and employee benefits 19,921 18,096 40,269 36,713 Net occupancy expense of premises 2,987 3,156 6,077 7,703 Equipment and systems 3,867 3,723 7,529 7,548 Advertising and marketing 731 448 1,478 840 Federal deposit insurance premium 1,226 721 2,132 1,213 Directors' compensation 339 649 679 1,452 Other expense 3,579 2,877 6,474 6,004 Total Non-Interest Expense 32,650 29,670 64,638 61,473 Income before Income Taxes 1,984 25,570 23,774 52,557 Income tax expense 33 6,801 5,288 14,073 Net Income $ 1,951 $ 18,769 $ 18,486 $ 38,484 Net Income per Common Share (EPS) Basic $ 0.03 $ 0.26 $ 0.28 $ 0.53 Diluted $ 0.03 $ 0.26 $ 0.28 $ 0.53 Weighted Average Number of Common Shares Outstanding Basic 65,030 72,011 65,383 73,274 Diluted 65,038 72,037 65,393 73,297 (LOSS)
available for saleThree Months Ended
December 31,Six Months Ended
December 31,2022 2021 2022 2021 Net Income $ 1,951 $ 18,769 $ 18,486 $ 38,484 Other Comprehensive Income (Loss), net of tax: Net unrealized gain (loss) on securities available for sale 977 (5,451) (34,202) (10,432) Net realized loss (gain) on sale and call of securities available for sale 10,811 — 10,811 (1) Fair value adjustments on derivatives (4,465) 4,675 10,125 5,840 Benefit plan adjustments (4) 14 (28) 23 Total Other Comprehensive Income (Loss) 7,319 (762) (13,294) (4,570) Total Comprehensive Income $ 9,270 $ 18,007 $ 5,192 $ 33,914 Common Stock Paid-In
CapitalRetained
EarningsUnearned
ESOP
SharesAccumulated
Other
Comprehensive
IncomeTotal Shares Amount Balance - September 30, 2021 75,800 $ 758 $ 616,894 $ 420,701 $ (26,266) $ 2,336 $ 1,014,423 Net income — — — 18,769 — — 18,769 Other comprehensive loss, net of income tax — — — — — (762) (762) ESOP shares committed to be released (50 shares) — — 173 — 486 — 659 Share repurchases (2,290) (22) (29,980) — — — (30,002) Stock-based compensation expense — — 1,023 — — — 1,023 Cancellation of shares issued for restricted stock awards (57) (1) (718) — — — (719) Cash dividends declared ($0.11 per common share) — — — (7,921) — — (7,921) Balance - December 31, 2021 73,453 $ 735 $ 587,392 $ 431,549 $ (25,780) $ 1,574 $ 995,470
ESOP
Other
Comprehensive
of income tax
released (50 shares)
restricted stock awards
($0.09 per common share)
ESOP
Other
Comprehensive
accounting principle - Topic 326
adjusted for change in
accounting principle
of income tax
released (150 shares)
restricted stock awards
the acquisition of MSB
Financial Corp.
($0.25 per common share)Common Stock Paid-In
CapitalRetained
EarningsUnearned
ESOP
SharesAccumulated
Other
Comprehensive
IncomeTotal Shares Amount Balance - June 30, 2021 78,965 $ 790 $ 654,396 $ 408,367 $ (26,753) $ 6,144 $ 1,042,944 Net income — — — 38,484 — — 38,484 Other comprehensive loss, net of income tax — — — — — (4,570) (4,570) ESOP shares committed to be released (100 shares) — — 306 — 973 — 1,279 Stock repurchases (5,448) (54) (68,944) — — — (68,998) Stock-based compensation expense — — 2,441 — — — 2,441 Cancellation of shares issued for restricted stock awards (64) (1) (807) — — — (808) Cash dividends declared ($0.21 per common share) — — — (15,302) — — (15,302) Balance - December 31, 2021 73,453 $ 735 $ 587,392 $ 431,549 $ (25,780) $ 1,574 $ 995,470 Common Stock Paid-In
CapitalRetained
EarningsUnearned
ESOP
SharesAccumulated
Other
Comprehensive
LossTotal Shares Amount Balance - September 30, 2022 67,938 $ 680 $ 520,245 $ 454,710 $ (24,321) $ (76,340) $ 874,974 Net income — — — 1,951 — — 1,951 Other comprehensive income, net of income tax — — — — — 7,319 7,319 ESOP shares committed to be released (50 shares) — — 16 — 487 — 503 Stock repurchases (550) (6) (5,739) — — — (5,745) Stock-based compensation expense — — 810 — — — 810 Cash dividends declared ($0.11 per common share) — — — (7,172) — — (7,172) Balance - December 31, 2022 67,388 $ 674 $ 515,332 $ 449,489 $ (23,834) $ (69,021) $ 872,640
ESOP
Other
Comprehensive
of income tax
released (51 shares)
restricted stock awards
($0.11 per common share)
ESOP
Other
Comprehensive
of income tax
released (151 shares)
restricted stock awards
($0.32 per common share)Common Stock Paid-In
CapitalRetained
EarningsUnearned
ESOP
SharesAccumulated
Other
Comprehensive
LossTotal Shares Amount Balance - June 30, 2022 68,666 $ 687 $ 528,396 $ 445,451 $ (24,807) $ (55,727) $ 894,000 Net income — — — 18,486 — — 18,486 Other comprehensive loss, net of income tax — — — — — (13,294) (13,294) ESOP shares committed to be released (100 shares) — — 106 — 973 — 1,079 Stock repurchases (1,310) (14) (14,424) — — — (14,438) Issuance of stock under stock benefit plans 61 1 (1) — — — — Stock-based compensation expense — — 1,596 — — — 1,596 Cancellation of shares issued for restricted stock awards (29) — (341) — — — (341) Cash dividends declared ($0.22 per common share) — — — (14,448) — — (14,448) Balance - December 31, 2022 67,388 $ 674 $ 515,332 $ 449,489 $ (23,834) $ (69,021) $ 872,640 Six Months Ended
December 31,2022 2021 Cash Flows from Operating Activities: Net income $ 18,486 $ 38,484 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation and amortization of premises and equipment 2,931 2,999 Net accretion of yield adjustments (3,352) (3,108) Deferred income taxes 3,536 5,484 Amortization of intangible assets 288 361 (Accretion) amortization of benefit plans’ unrecognized net (gain) loss (39) 39 Provision for (reversal of) credit losses 2,341 (7,820) Loans originated for sale (56,456) (127,458) Proceeds from sale of mortgage loans held-for-sale 75,492 133,285 Gain on sale of mortgage loans held-for-sale, net (474) (1,884) Realized loss (gain) on sale/call of investment securities available for sale 15,227 (1) Realized gain on sale of loans receivable (55) (92) Realized gain on disposition of premises and equipment (2,886) (356) Increase in cash surrender value of bank owned life insurance (5,459) (3,123) ESOP and stock-based compensation expense 2,675 3,720 (Increase) decrease in interest receivable (6,902) 867 (Increase) decrease in other assets (5,511) 4,391 Increase in interest payable 6,268 50 Decrease in other liabilities (10,053) (19,319) Net Cash Provided by Operating Activities 36,057 26,519 Cash Flows from Investing Activities: Purchases of: Investment securities available for sale (166,483) (140,550) Investment securities held to maturity (40,398) (16,162) Proceeds from: Repayments/calls/maturities of investment securities available for sale 70,793 209,742 Repayments/calls/maturities of investment securities held to maturity 4,855 1,086 Sales of investment securities available for sale 105,199 — Purchase of loans (656) (72,345) Net (increase) decrease in loans receivable (583,893) 98,554 Proceeds from sale of loans receivable 706 1,126 Purchase of interest rate contracts (758) — Additions to premises and equipment (668) (728) Proceeds from death benefit of bank owned life insurance 4,963 — Proceeds from cash settlement of premises and equipment 3,480 599 Purchase of FHLB stock (64,638) (7) Redemption of FHLB stock 42,760 — Net Cash (Used in) Provided by Investing Activities (624,738) 81,315 Six Months Ended
December 31,2022 2021 Cash Flows from Financing Activities: Net increase (decrease) in deposits 109,294 (30,866) Repayment of term FHLB advances (2,865,000) (780,000) Proceeds from term FHLB advances 3,470,000 780,000 Net decrease in other short-term borrowings (123,000) — Net increase in advance payments by borrowers for taxes 561 1,020 Repurchase and cancellation of common stock of Kearny Financial Corp. (14,438) (68,998) Cancellation of shares repurchased on vesting to pay taxes (341) (808) Dividends paid (14,350) (15,585) Net Cash Provided by (Used in) Financing Activities 562,726 (115,237) Net Decrease in Cash and Cash Equivalents (25,955) (7,403) Cash and Cash Equivalents - Beginning 101,615 67,855 Cash and Cash Equivalents - Ending $ 75,660 $ 60,452 Supplemental Disclosures of Cash Flows Information: Cash paid during the period for: Income taxes, net of refunds $ 8,318 $ 9,631 Interest $ 37,279 $ 14,791 Non-cash investing and financing activities: Acquisition of other real estate owned in settlement of loans $ 13,232 $ 480 Transfers from loans receivable to loans receivable held-for-sale $ 2,628 $ — subsidiary, CJB Investment Corp.subsidiaries. The Company conducts its business principally through the Bank. Management prepared the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), including the elimination of all significant inter-company accounts and transactions during consolidation.ninesix months ended MarchDecember 31, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other period.consolidated statementConsolidated Statement of financial condition forFinancial Condition at June 30, 20212022 was derived from the Company’s 20212022 Annual Report on Form 10-K. That data, along with the interim unaudited financial information presented in the consolidated statementsConsolidated Statements of financial condition, income, comprehensive income, changesFinancial Condition, Income, Comprehensive Income, Changes in stockholders’ equityStockholders’ Equity and cash flowsCash Flows should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s 20212022 Annual Report on Form 10-K.20212022 Annual Report on Form 10-K. There have been no material changes to the Company’s significant accounting policies since June 30, 2021.The Company has reclassified certain amounts in the prior period’s financial statements to conform to the current period’s presentation. Specifically, effective July 1, 2021, loan prepayment penalty income was reclassified to interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Interest income and non-interest income for all periods presented reflect this reclassification.Update to Significant Accounting PoliciesAllowance for Credit Losses (“ACL”) on Loans.In accordance with the ACL policy, the methodology is reviewed no less than annually. During the quarter ended September 30, 2021, the Company updated the econometric factors used in the determination of the probability of default for certain loan portfolio segments used in its ACL methodology for pooled loans. Econometric factors are selected based on the correlation of the factor to credit losses for each loan portfolio segment. Effective July 1, 2021, the primary econometric factor utilized in the determination of the probability of default for each loan portfolio segment is the national unemployment rate (“NUR”). Prior to July 1, 2021, NUR and gross domestic product (“GDP”) econometric factors were used in the determination of the probability of default for each loan portfolio segment.- 8 -MarchDecember 31, 2022, for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date this document was filed.is currently evaluating the impact of the adoption ofadopted this ASU on July 1, 2022 on a prospective basis; therefore, there was no impact to its consolidated financial statements.Adoption of New Accounting StandardsIn December 2019, the FASB issued ASU 2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes”. ASU 2019-12 provides amendments intended to reduce the cost and complexity in accounting for income taxes while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes the following exceptions from ASC 740, Income Taxes: (i) exceptions to the incremental approach for intraperiod tax allocation; (ii) exceptions to accounting for basis differences when a foreign subsidiary becomes an equity method investment or a foreign equity method investment become a subsidiary; and (iii) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 provides the following amendments that simplify and improve guidance with Topic 740: (i) franchise taxes that are based partially on income; (ii) transactions that result in a step up in the tax basis of goodwill; (iii) separate financial statements of legal entities that are not subject to tax; (iv) enacted changes in tax laws in interim periods; and (v) employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. For public business entities, the amendments in the ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted ASU 2019-12 in July 2021, and its adoption did not have a significant impact on the Company’s consolidated financial statements.upon adoption.- 9 -
Cost
Unrealized
Gains
Unrealized
Losses
Credit Losses
Value(1)December 31, 2022 Amortized
CostGross
Unrealized
GainsGross
Unrealized
LossesAllowance for
Credit LossesFair
Value(In Thousands) Available for sale: Debt securities: Asset-backed securities $ 161,509 $ — $ 2,886 $ — $ 158,623 Collateralized loan obligations 393,027 31 8,999 — 384,059 Corporate bonds 159,769 3 14,817 — 144,955 Total debt securities 714,305 34 26,702 — 687,637 Mortgage-backed securities: 557,294 8 107,146 — 450,156 165,596 — 17,035 — 148,561 Total mortgage-backed securities 722,890 8 124,181 — 598,717 Total securities available for sale $ 1,437,195 $ 42 $ 150,883 $ — $ 1,286,354 Government-sponsored enterprises.
Cost
Unrealized
Gains
Unrealized
Losses
Credit Losses
Valueenterprisesenterprises.June 30, 2022 Amortized
CostGross
Unrealized
GainsGross
Unrealized
LossesAllowance for
Credit LossesFair
Value(In Thousands) Available for sale: Debt securities: Obligations of state and political subdivisions $ 28,485 $ 39 $ 89 $ — $ 28,435 Asset-backed securities 169,506 — 2,949 — 166,557 Collateralized loan obligations 315,693 — 7,880 — 307,813 Corporate bonds 159,871 175 6,649 — 153,397 Total debt securities 673,555 214 17,567 — 656,202 Mortgage-backed securities: 7,451 — 329 — 7,122 595,337 45 80,624 — 514,758 185,781 1 19,771 — 166,011 Total mortgage-backed securities 788,569 46 100,724 — 687,891 Total securities available for sale $ 1,462,124 $ 260 $ 118,291 $ — $ 1,344,093 December 31, 2022 Amortized
CostGross
Unrecognized
GainsGross
Unrecognized
LossesAllowance for
Credit LossesFair
Value(In Thousands) Held to maturity: Debt securities: Obligations of state and political subdivisions $ 18,806 $ — $ 285 $ — $ 18,521 Total debt securities 18,806 — 285 — 18,521 Mortgage-backed securities: 122,715 — 12,898 — 109,817 12,265 — 2,210 — 10,055 Total mortgage-backed securities 134,980 — 15,108 — 119,872 Total securities held to maturity $ 153,786 $ — $ 15,393 $ — $ 138,393
Cost
Unrecognized
Gains
Unrecognized
Losses
Credit Losses
ValueJune 30, 2022 Amortized
CostGross
Unrecognized
GainsGross
Unrecognized
LossesAllowance for
Credit LossesFair
Value(In Thousands) Held to maturity: Debt securities: Obligations of state and political subdivisions $ 21,159 $ 44 $ 78 $ — $ 21,125 Total debt securities 21,159 44 78 — 21,125 Mortgage-backed securities: 84,851 — 8,587 — 76,264 12,281 — 1,552 — 10,729 Total mortgage-backed securities 97,132 — 10,139 — 86,993 Total securities held to maturity $ 118,291 $ 44 $ 10,217 $ — $ 108,118
Cost
Unrecognized
Gains
Unrecognized
Losses
Credit Losses
Value(1)Government-sponsored enterprises.MarchDecember 31, 2022:
Cost
ValueDecember 31, 2022 Amortized
CostFair
Value(In Thousands) Available for sale debt securities: Due in one year or less $ — $ — Due after one year through five years 11,865 11,783 Due after five years through ten years 342,467 326,847 Due after ten years 359,973 349,007 Total $ 714,305 $ 687,637 December 31, 2022 Amortized
CostFair
Value(In Thousands) Held to maturity debt securities: Due in one year or less $ 4,160 $ 4,143 Due after one year through five years 12,946 12,713 Due after five years through ten years 1,700 1,665 Due after ten years — — Total $ 18,806 $ 18,521
Cost
ValueThree Months Ended
December 31,Six Months Ended
December 31,2022 2021 2022 2021 (In Thousands) Available for sale securities sold: Proceeds from sales of securities $ 105,199 $ — $ 105,199 $ — Gross realized gains $ — $ — $ — $ — Gross realized losses (15,227) — (15,227) — Net loss on sales of securities $ (15,227) $ — $ (15,227) $ — Three Months Ended
December 31,Six Months Ended
December 31,2022 2021 2022 2021 (In Thousands) Available for sale securities called: Gross realized gains $ — $ — $ — $ 1 Gross realized losses — — — — Net gain on calls of securities $ — $ — $ — $ 1 During the three months and nine months ended March 31, 2022 and 2021, there were 0 gains or losses recognized on sales of securities held to maturity.- 12 -December 31,
2022June 30,
2022(In Thousands) Securities pledged: Pledged for borrowings at the FHLB of New York $ — $ 178,048 Pledged to secure public funds on deposit 397,855 357,841 Pledged for potential borrowings at the Federal Reserve Bank of New York 410,481 378,071 Total carrying value of securities pledged $ 808,336 $ 913,960 MarchDecember 31, 2022 and June 30, 2021:2022:December 31, 2022 Less than 12 Months 12 Months or More Total Fair
ValueUnrealized
LossesFair
ValueUnrealized
LossesNumber of Securities Fair
ValueUnrealized
Losses(Dollars in Thousands) Securities Available for Sale: Asset-backed securities $ 137,203 $ 2,406 $ 21,420 $ 480 15 $ 158,623 $ 2,886 Collateralized loan obligations 177,907 3,631 192,556 5,368 28 370,463 8,999 Corporate bonds 87,731 7,972 50,356 6,845 29 138,087 14,817 Commercial pass-through securities 93,772 4,262 54,789 12,773 12 148,561 17,035 Residential pass-through securities 50,897 5,161 398,511 101,985 106 449,408 107,146 Total $ 547,510 $ 23,432 $ 717,632 $ 127,451 190 $ 1,265,142 $ 150,883
Value
Losses
Value
Losses
Value
Losses
subdivisions
Value
Losses
Value
Losses
Value
LossesJune 30, 2022 Less than 12 Months 12 Months or More Total Fair
ValueUnrealized
LossesFair
ValueUnrealized
LossesNumber of Securities Fair
ValueUnrealized
Losses(Dollars in Thousands) Securities Available for Sale: Obligations of state and political subdivisions $ 11,310 $ 89 $ — $ — 30 $ 11,310 $ 89 Asset-backed securities 161,303 2,928 5,254 21 15 166,557 2,949 Collateralized loan obligations 236,967 6,435 70,846 1,445 24 307,813 7,880 Corporate bonds 129,407 6,464 3,815 185 27 133,222 6,649 Collateralized mortgage obligations 7,122 329 — — 6 7,122 329 Commercial pass-through securities 63,045 3,194 102,817 16,577 21 165,862 19,771 Residential pass-through securities 237,928 26,566 274,197 54,058 106 512,125 80,624 Total $ 847,082 $ 46,005 $ 456,929 $ 72,286 229 $ 1,304,011 $ 118,291 MarchDecember 31, 2022:
Value
Losses
Value
Losses
Value
Losses
subdivisions
securities
securitiesAt2022 and June 30, 2021, there were 0 held to maturity securities with unrecognized losses.- 13 -December 31, 2022 Less than 12 Months 12 Months or More Total Fair
ValueUnrecognized
LossesFair
ValueUnrecognized
LossesNumber of Securities Fair
ValueUnrecognized
Losses(Dollars in Thousands) Securities Held to Maturity: Obligations of state and political subdivisions $ 18,057 $ 285 $ — $ — 36 $ 18,057 $ 285 Commercial pass-through securities — — 10,055 2,210 1 10,055 2,210 Residential pass-through securities 93,068 9,092 16,749 3,806 9 109,817 12,898 Total $ 111,125 $ 9,377 $ 26,804 $ 6,016 46 $ 137,929 $ 15,393 June 30, 2022 Less than 12 Months 12 Months or More Total Fair
ValueUnrecognized
LossesFair
ValueUnrecognized
LossesNumber of Securities Fair
ValueUnrecognized
Losses(Dollars in Thousands) Securities Held to Maturity: Obligations of state and political subdivisions $ 8,681 $ 78 $ — $ — 15 $ 8,681 $ 78 Commercial pass-through securities 10,729 1,552 — — 1 10,729 1,552 Residential pass-through securities 76,264 8,587 — — 8 76,264 8,587 Total $ 95,674 $ 10,217 $ — $ — 24 $ 95,674 $ 10,217 consolidated statementConsolidated Statement of incomeIncome if management intends to sell, or may be required to sell, the securities before they recover in value. The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due or were placed in nonaccrual status at MarchDecember 31, 2022. Management believes that the unrealized losses on these securities are a function of changes in market interest rates and credit spreads, not changes in credit quality. NaNNo allowance for credit losses was recorded at MarchDecember 31, 2022 on available for sale securities.MarchDecember 31, 2022, the held to maturity securities portfolio consists of agency mortgage-backed securities and obligations of state and political subdivisions. The mortgage-backed securities are issued by U.S. government agencies and are implicitly guaranteed by the U.S. government. The obligations of state and political subdivisions in the portfolio are highly rated by major rating agencies and have a long history of no credit losses. The Company regularly monitors the obligations of state and political subdivisions sector of the market and reviews collectability including such factors as the financial condition of the issuers as well as credit ratings in effect as of the reporting period. No allowance for credit losses was recorded at MarchDecember 31, 2022 on held to maturity securities.5.MarchDecember 31, 2022 and June 30, 2021:2022:December 31,
2022June 30,
2022(In Thousands) Commercial loans: Multi-family mortgage $ 2,851,721 $ 2,409,090 Nonresidential mortgage 1,017,341 1,019,838 Commercial business 177,530 176,807 Construction 186,663 140,131 Total commercial loans 4,233,255 3,745,866 One- to four-family residential mortgage 1,719,514 1,645,816 Consumer loans: Home equity loans 45,690 42,028 Other consumer 2,648 2,866 Total consumer loans 48,338 44,894 Total loans 6,001,107 5,436,576 (16,974) (18,731) Total loans receivable, net of yield adjustments $ 5,984,133 $ 5,417,845 - 14 -MarchDecember 31, 2022 and June 30, 2021,2022, by loan segment:Payment Status
December 31, 202230-59 Days 60-89 Days 90 Days and Over Total Past Due Current Total (In Thousands) Multi-family mortgage $ — $ — $ 7,663 $ 7,663 $ 2,844,058 $ 2,851,721 Nonresidential mortgage 204 — 5,696 5,900 1,011,441 1,017,341 Commercial business 204 — 265 469 177,061 177,530 Construction — — — — 186,663 186,663 One- to four-family residential mortgage 3,634 1,775 1,979 7,388 1,712,126 1,719,514 Home equity loans 151 4 23 178 45,512 45,690 Other consumer — — — — 2,648 2,648 Total loans $ 4,193 $ 1,779 $ 15,626 $ 21,598 $ 5,979,509 $ 6,001,107
residential mortgage
residential mortgagePayment Status
June 30, 202230-59 Days 60-89 Days 90 Days and Over Total Past Due Current Total (In Thousands) Multi-family mortgage $ 3,148 $ 3,056 $ 7,788 $ 13,992 $ 2,395,098 $ 2,409,090 Nonresidential mortgage 4,026 — 18,132 22,158 997,680 1,019,838 Commercial business 98 57 155 310 176,497 176,807 Construction — — — — 140,131 140,131 One- to four-family residential mortgage 1,525 253 3,455 5,233 1,640,583 1,645,816 Home equity loans 28 35 — 63 41,965 42,028 Other consumer — — — — 2,866 2,866 Total loans $ 8,825 $ 3,401 $ 29,530 $ 41,756 $ 5,394,820 $ 5,436,576 three months and ninesix months ended MarchDecember 31, 2022 and 2021.- 15 -MarchDecember 31, 2022 and June 30, 2021:2022:Performance Status
December 31, 202290 Days and Over Past Due Accruing Nonaccrual Loans with Allowance for Credit Losses Nonaccrual Loans with no Allowance for Credit Losses Total Nonperforming Performing Total (In Thousands) Multi-family mortgage $ — $ 7,890 $ 8,381 $ 16,271 $ 2,835,450 $ 2,851,721 Nonresidential mortgage — 12,187 5,696 17,883 999,458 1,017,341 Commercial business — 262 10 272 177,258 177,530 Construction — — — — 186,663 186,663 One- to four-family residential mortgage — 2,916 3,121 6,037 1,713,477 1,719,514 Home equity loans — — 86 86 45,604 45,690 Other consumer — — — — 2,648 2,648 Total loans $ — $ 23,255 $ 17,294 $ 40,549 $ 5,960,558 $ 6,001,107
residential mortgage
residential mortgagePerformance Status
June 30, 202290 Days and Over Past Due Accruing Nonaccrual Loans with Allowance for Credit Losses Nonaccrual Loans with no Allowance for Credit Losses Total Nonperforming Performing Total (In Thousands) Multi-family mortgage $ — $ 8,367 $ 18,286 $ 26,653 $ 2,382,437 $ 2,409,090 Nonresidential mortgage — 12,602 19,292 31,894 987,944 1,019,838 Commercial business — 212 81 293 176,514 176,807 Construction — — 1,561 1,561 138,570 140,131 One- to four-family residential mortgage — 3,543 4,946 8,489 1,637,327 1,645,816 Home equity loans — 302 1,129 1,431 40,597 42,028 Other consumer — — — — 2,866 2,866 Total loans $ — $ 25,026 $ 45,295 $ 70,321 $ 5,366,255 $ 5,436,576 $31.7$18.4 million and $17.8$22.2 million as of MarchDecember 31, 2022 and June 30, 2021,2022, respectively. The allowance for credit losses associated with the TDRs presented in the tables below totaled $672,000 and $256,000$331,000 and $365,000 as of MarchDecember 31, 2022 and June 30, 2021,2022, respectively. As of MarchDecember 31, 2022, there were no significantthe Company had commitments to lend additional funds totaling $69,000 to borrowers whose loans had been restructured in a TDR.- 16 -MarchDecember 31, 2022 and June 30, 2021:2022:December 31, 2022 Accrual Non-accrual Total # of Loans Amount # of Loans Amount # of Loans Amount (Dollars In Thousands) Commercial loans: Multi-family mortgage — $ — 2 $ 5,539 2 $ 5,539 Nonresidential mortgage 3 184 1 390 4 574 Commercial business 4 3,529 1 7 5 3,536 Total commercial loans 7 3,713 4 5,936 11 9,649 One- to four-family residential mortgage 35 6,394 11 1,921 46 8,315 Consumer loans: Home equity loans 5 374 1 35 6 409 Total 47 $ 10,481 16 $ 7,892 63 $ 18,373
mortgage
mortgageJune 30, 2022 Accrual Non-accrual Total # of Loans Amount # of Loans Amount # of Loans Amount (Dollars In Thousands) Commercial loans: Multi-family mortgage — $ — 2 $ 5,626 2 $ 5,626 Nonresidential mortgage 4 389 2 1,565 6 1,954 Commercial business 5 3,631 2 82 7 3,713 Construction — — 1 1,561 1 1,561 Total commercial loans 9 4,020 7 8,834 16 12,854 One- to four-family residential mortgage 29 4,488 16 3,314 45 7,802 Consumer loans: Home equity loans 5 164 2 1,364 7 1,528 Total 43 $ 8,672 25 $ 13,512 68 $ 22,184 troubled debt restructuringsTDRs that occurred during the three months and ninesix months ended MarchDecember 31, 2022 and 2021:Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 # of Loans Pre-
modification
Recorded
InvestmentPost-
modification
Recorded
Investment# of Loans Pre-
modification
Recorded
InvestmentPost-
modification
Recorded
Investment(Dollars In Thousands) Commercial business 1 $ 7 $ 7 — $ — $ — One- to four-family residential mortgage 1 273 270 2 261 261 Total 2 $ 280 $ 277 2 $ 261 $ 261 Six Months Ended December 31, 2022 Six Months Ended December 31, 2021 # of Loans Pre-
modification
Recorded
InvestmentPost-
modification
Recorded
Investment# of Loans Pre-
modification
Recorded
InvestmentPost-
modification
Recorded
Investment(Dollars In Thousands) Multi-family mortgage — $ — $ — 1 $ 2,987 $ 2,972 Commercial business 1 7 7 — — — One- to four-family residential mortgage 2 708 705 2 261 261 Home equity loans 1 35 35 — — — Total 4 $ 750 $ 747 3 $ 3,248 $ 3,233
modification
Recorded
Investment
modification
Recorded
Investment
modification
Recorded
Investment
modification
Recorded
Investment
mortgage
modification
Recorded
Investment
modification
Recorded
Investment
modification
Recorded
Investment
modification
Recorded
Investment
mortgage- 17 -ninesix months ended MarchDecember 31, 2022, there were charge-offs of $5,000 and $15,000, respectively, related to TDRs. During the three months and six months ended December 31, 2021, there were 0no charge-offs related to TDRs. During the three months and ninesix months ended MarchDecember 31, 2022, there were two TDR defaults totaling $170,000. During the three months and six months ended December 31, 2021, there were 0no defaults of TDRs.ninesix months ended MarchDecember 31, 2022 and 2021, capitalized prior past due amounts and modified the repayment terms.In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System (the “FRB”) and the Federal Deposit Insurance Corporation (the “FDIC”), issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. The agencies confirmed with the staff of the FASB that short-term modifications, made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, were not to be considered TDRs. This included short-term modifications such as payment deferrals, fee waivers, extension of repayment terms, or other delays in payment that were insignificant. Provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) largely mirrored the provisions of the interagency statement, providing that modified loans were not to be considered TDRs if they were performing at December 31, 2019 and other considerations set forth in the interagency statements were met. Borrowers considered current are those that were less than 30 days past due at the time a modification program was implemented or at December 31, 2019.On December 27, 2020, the 2021 Consolidated Appropriations Act was signed into law. The $900 billion relief package included legislation that extended certain relief provisions of the CARES Act that were set to expire on December 31, 2020. The relief expired on January 1, 2022. As of March 31, 2022, the Company did not have any non-TDR loan modifications granted under the CARES Act.Effective July 1, 2020, individually analyzedMarchDecember 31, 2022, the carrying value of individually analyzed loans, including loans acquired with deteriorated credit quality that were individually analyzed, totaled $82.7$40.5 million, of which $65.1$36.9 million were considered collateral dependent.ACLallowance for credit losses is measured based on the difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan as of the measurement date. See Note 12 for additional disclosure regarding fair value of individually analyzed collateral dependent loans.- 18 -December 31, 2022 June 30, 2022 Carrying Value Related Allowance Carrying Value Related Allowance (In Thousands) Commercial loans: Multi-family mortgage $ 16,271 $ 352 $ 26,653 $ 849 17,529 2,392 30,733 2,696 Construction — — 1,561 — Total commercial loans 33,800 2,744 58,947 3,545 3,082 26 4,305 77 Consumer loans: — — 35 — Total $ 36,882 $ 2,770 $ 63,287 $ 3,622 Secured by business assets.(3)1918 -MarchDecember 31, 2022 by loan segment and vintage year:Term Loans by Origination Year for Fiscal Years ended June 30, 2023 2022 2021 2020 2019 Prior Revolving Loans Total (In Thousands) Multi-family mortgage: Pass $ 593,864 $ 957,401 $ 246,580 $ 202,298 $ 246,991 $ 562,005 $ — $ 2,809,139 Special Mention — — — — 6,091 7,445 — 13,536 Substandard — — — — 9,545 19,501 — 29,046 Doubtful — — — — — — — — Total multi-family mortgage 593,864 957,401 246,580 202,298 262,627 588,951 — 2,851,721 Nonresidential mortgage: Pass 96,016 229,684 85,982 53,084 59,951 462,184 6,000 992,901 Special Mention — — — — — 579 — 579 Substandard — — 714 — 931 22,216 — 23,861 Doubtful — — — — — — — — Total nonresidential mortgage 96,016 229,684 86,696 53,084 60,882 484,979 6,000 1,017,341 Commercial business: Pass 11,522 37,850 35,453 9,529 2,540 9,968 65,504 172,366 Special Mention — — — 55 180 2,898 — 3,133 Substandard — — 35 473 48 1,371 104 2,031 Doubtful — — — — — — — — Total commercial business 11,522 37,850 35,488 10,057 2,768 14,237 65,608 177,530 Construction loans: Pass 13,628 27,363 117,830 11,854 3,000 7,253 5,735 186,663 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total construction loans 13,628 27,363 117,830 11,854 3,000 7,253 5,735 186,663 Residential mortgage: Pass 151,323 463,800 506,856 83,231 47,554 453,552 — 1,706,316 Special Mention — — — — 1,184 493 — 1,677 Substandard — 270 — — 82 11,169 — 11,521 Doubtful — — — — — — — — Total residential mortgage 151,323 464,070 506,856 83,231 48,820 465,214 — 1,719,514 Home equity loans: Pass 7,560 2,794 658 1,439 2,665 8,221 21,752 45,089 Special Mention — — — — — — — — Substandard — — — — 116 358 127 601 Doubtful — — — — — — — — Total home equity loans 7,560 2,794 658 1,439 2,781 8,579 21,879 45,690 Other consumer loans Pass 232 287 171 457 335 1,041 41 2,564 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — 84 84 Other consumer loans 232 287 171 457 335 1,041 125 2,648 Total loans $ 874,145 $ 1,719,449 $ 994,279 $ 362,420 $ 381,213 $ 1,570,254 $ 99,347 $ 6,001,107 2019 -20212022 by loan segment and vintage year:Term Loans by Origination Year for Fiscal Years ended June 30, 2022 2021 2020 2019 2018 Prior Revolving Loans Total (In Thousands) Multi-family mortgage: Pass $ 963,263 $ 250,385 $ 211,101 $ 264,174 $ 248,058 $ 438,642 $ — $ 2,375,623 Special Mention — — — — — 6,814 — 6,814 Substandard — — — 9,821 5,935 10,897 — 26,653 Doubtful — — — — — — — — Total multi-family mortgage 963,263 250,385 211,101 273,995 253,993 456,353 — 2,409,090 Nonresidential mortgage: Pass 231,777 87,309 53,983 60,714 49,285 491,849 6,052 980,969 Special Mention — — — — — 591 — 591 Substandard — 720 — 933 4,026 32,599 — 38,278 Doubtful — — — — — — — — Total nonresidential mortgage 231,777 88,029 53,983 61,647 53,311 525,039 6,052 1,019,838 Commercial business: Pass 46,888 38,791 12,155 3,581 4,861 6,455 58,662 171,393 Special Mention — — 62 186 2,173 873 215 3,509 Substandard — 38 319 — 1,347 61 58 1,823 Doubtful — — — — — 80 2 82 Total commercial business 46,888 38,829 12,536 3,767 8,381 7,469 58,937 176,807 Construction loans: Pass 16,407 95,526 10,337 3,039 6,509 1,017 5,735 138,570 Special Mention — — — — — — — — Substandard — — — — — 1,561 — 1,561 Doubtful — — — — — — — — Total construction loans 16,407 95,526 10,337 3,039 6,509 2,578 5,735 140,131 Residential mortgage: Pass 472,160 524,163 88,645 49,316 55,139 442,517 374 1,632,314 Special Mention — — — 1,205 — 621 — 1,826 Substandard — — — 83 — 11,593 — 11,676 Doubtful — — — — — — — — Total residential mortgage 472,160 524,163 88,645 50,604 55,139 454,731 374 1,645,816 Home equity loans: Pass 3,197 692 1,681 3,117 2,027 7,321 22,334 40,369 Special Mention — — — — — — — — Substandard — — — 120 — 1,539 — 1,659 Doubtful — — — — — — — — Total home equity loans 3,197 692 1,681 3,237 2,027 8,860 22,334 42,028 Other consumer loans Pass 442 308 471 375 258 895 34 2,783 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — 83 83 Other consumer loans 442 308 471 375 258 895 117 2,866 Total loans $ 1,734,134 $ 997,932 $ 378,754 $ 396,664 $ 379,618 $ 1,455,925 $ 93,549 $ 5,436,576 Residential MarchDecember 31, 2022, the Company held 2held two single-family properties in other real estate owned with an aggregate carrying value of $401,000$454,000 and one nonresidential property with a carrying value of $13.0 million in other real estate owned that were acquired through foreclosure on residential mortgage loans.loans and a nonresidential mortgage loan, respectively. As of that same date, the Company held8 five residential mortgage loans with aggregate carrying values totaling $1.6$951,000 and six commercial mortgage loans with aggregate carrying values totaling $9.3 million which were in the process of foreclosure. As of June 30, 2021,2022, the Company held 1one single-family property in other real estate owned with an aggregate carrying value of $178,000$178,000 that was acquired through a foreclosure on a residential mortgage loan. As of that same date, the Company held 11seven residential mortgage loans with aggregate carrying values totaling $2.1$1.5 million which were in the process of foreclosure.New Jersey’s moratorium on evictions ended on December 31, 2021. Under New Jersey’s new eviction protections for people under certain income levels, no evictions may occur now or in the future based on rent due during the time period of March 1, 2020 through August 31, 2021, for certain moderate income families, or March 1, 2020 through December 31, 2021 for certain low income families. The moratorium on home foreclosures ended on November 15, 2021, for all income levels. This included landlords facing foreclosure who currently have tenants. New York’s moratorium on evictions for tenants who have endured COVID-related hardships and on foreclosures ended on January 15, 2022. As a result, the Company has resumed residential property foreclosure sales and evictions. Eviction laws may be subject to legal challenges and could change based on the results of court proceedings.- 21 -Adoption of Topic 326On July 1, 2020, the Company adopted ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaces the incurred loss methodology with an expected loss methodology, referred to as the “CECL” methodology.MarchDecember 31, 2022 and June 30, 2021. For the three months and nine months ended March 31, 2022 and 2021, the2022. The balance of the allowance for credit losses is based on an expected loss methodology, referred to as the CECL methodology, as noted above.“CECL” methodology. The tables identify the valuation allowances attributable to specifically identified impairments on individually evaluatedanalyzed loans, including those acquired with deteriorated credit quality, as well as valuation allowances for impairments on loans evaluated collectively.collectively evaluated. The tables include the underlying balance of loans receivable applicable to each category as of those dates.
acquired with
deteriorated
credit quality
individually
analyzed
acquired with
deteriorated
credit quality
collectively
evaluated
analyzed
evaluated
residential mortgage
acquired with
deteriorated
credit quality
individually
analyzed
acquired with
deteriorated
credit quality
collectively
evaluated
analyzed
evaluated
residential mortgage
yield adjustmentsAllowance for Credit Losses
December 31, 2022Loans
acquired with
deteriorated
credit quality
individually
analyzedLoans
acquired with
deteriorated
credit quality
collectively
evaluatedLoans individually
analyzedLoans collectively
evaluatedTotal allowance for credit losses (In Thousands) Multi-family mortgage $ — $ — $ 352 $ 27,146 $ 27,498 Nonresidential mortgage — 80 2,392 6,121 8,593 Commercial business — 5 17 1,797 1,819 Construction — — — 1,201 1,201 One- to four-family residential mortgage 22 161 68 9,104 9,355 Home equity loans — — — 339 339 Other consumer — — — 72 72 Total loans $ 22 $ 246 $ 2,829 $ 45,780 $ 48,877 Balance of Loans Receivable
December 31, 2022Loans
acquired with
deteriorated
credit quality
individually
analyzedLoans
acquired with
deteriorated
credit quality
collectively
evaluatedLoans individually
analyzedLoans collectively
evaluatedTotal loans (In Thousands) Multi-family mortgage $ — $ — $ 16,271 $ 2,835,450 $ 2,851,721 Nonresidential mortgage 353 3,696 17,530 995,762 1,017,341 Commercial business — 3,964 272 173,294 177,530 Construction — 5,735 — 180,928 186,663 One- to four-family residential mortgage 385 5,019 5,652 1,708,458 1,719,514 Home equity loans 25 55 61 45,549 45,690 Other consumer — — — 2,648 2,648 Total loans $ 763 $ 18,469 $ 39,786 $ 5,942,089 $ 6,001,107 Unaccreted yield adjustments (16,974) Loans receivable, net of yield adjustments $ 5,984,133 2221 -
acquired with
deteriorated
credit quality
individually
analyzed
acquired with
deteriorated
credit quality
collectively
evaluated
analyzed
evaluated
residential mortgage
acquired with
deteriorated
credit quality
individually
analyzed
acquired with
deteriorated
credit quality
collectively
evaluated
analyzed
evaluated
residential mortgage
yield adjustments- 23 -Allowance for Credit Losses
June 30, 2022Loans
acquired with
deteriorated
credit quality
individually
analyzedLoans
acquired with
deteriorated
credit quality
collectively
evaluatedLoans individually
analyzedLoans collectively
evaluatedTotal allowance for credit losses (In Thousands) Multi-family mortgage $ — $ — $ 849 $ 24,472 $ 25,321 Nonresidential mortgage — 73 2,696 7,821 10,590 Commercial business — 9 16 1,767 1,792 Construction — — — 1,486 1,486 One- to four-family residential mortgage — 229 148 7,163 7,540 Home equity loans 26 — — 219 245 Other consumer — — — 84 84 Total loans $ 26 $ 311 $ 3,709 $ 43,012 $ 47,058 Balance of Loans Receivable
June 30, 2022Loans
acquired with
deteriorated
credit quality
individually
analyzedLoans
acquired with
deteriorated
credit quality
collectively
evaluatedLoans individually
analyzedLoans collectively
evaluatedTotal loans (In Thousands) Multi-family mortgage $ — $ — $ 26,653 $ 2,382,437 $ 2,409,090 Nonresidential mortgage 377 5,033 31,517 982,911 1,019,838 Commercial business — 1,267 293 175,247 176,807 Construction — 5,735 1,561 132,835 140,131 One- to four-family residential mortgage 87 6,460 8,402 1,630,867 1,645,816 Home equity loans 329 58 1,102 40,539 42,028 Other consumer — — — 2,866 2,866 Total loans $ 793 $ 18,553 $ 69,528 $ 5,347,702 $ 5,436,576 Unaccreted yield adjustments (18,731) Loans receivable, net of yield adjustments $ 5,417,845 ninesix months ended MarchDecember 31, 2022 and 2021.Changes in the Allowance for Credit Losses
Three Months Ended December 31, 2022Balance at
September 30, 2022Charge-offs Recoveries Provision for
(reversal of)
credit lossesBalance at
December 31, 2022(In Thousands) Multi-family mortgage $ 26,246 $ (395) $ — $ 1,647 $ 27,498 Nonresidential mortgage 9,152 (5) — (554) 8,593 Commercial business 1,972 (15) 5 (143) 1,819 Construction 1,120 — — 81 1,201 One- to four-family residential mortgage 8,801 — — 554 9,355 Home equity loans 244 — — 95 339 Other consumer 78 — 3 (9) 72 Total loans $ 47,613 $ (415) $ 8 $ 1,671 $ 48,877
December 31, 2021
provision for
credit losses
March 31, 2022
residential mortgage
June 30, 2021
provision for
credit losses
March 31, 2022
residential mortgage2422 -Changes in the Allowance for Credit Losses
Six Months Ended December 31, 2022Balance at
June 30, 2022Charge-offs Recoveries Provision for
(reversal of)
credit lossesBalance at
December 31, 2022(In Thousands) Multi-family mortgage $ 25,321 $ (395) $ — $ 2,572 $ 27,498 Nonresidential mortgage 10,590 (15) — (1,982) 8,593 Commercial business 1,792 (133) 17 143 1,819 Construction 1,486 — — (285) 1,201 One- to four-family residential mortgage 7,540 — — 1,815 9,355 Home equity loans 245 — — 94 339 Other consumer 84 — 4 (16) 72 Total loans $ 47,058 $ (543) $ 21 $ 2,341 $ 48,877
December 31, 2020
provision for
credit losses
March 31, 2021
residential mortgageChanges in the Allowance for Credit Losses
Three Months Ended December 31, 2021Balance at
September 30, 2021Charge-offs Recoveries Provision for
(reversal of)
credit lossesBalance at
December 31, 2021(In Thousands) Multi-family mortgage $ 24,982 $ — $ — $ 813 $ 25,795 Nonresidential mortgage 13,845 (1,284) — (2,483) 10,078 Commercial business 1,994 (15) 4 (80) 1,903 Construction 1,430 — — 11 1,441 One- to four-family residential mortgage 9,129 — 145 (673) 8,601 Home equity loans 318 — 1 (11) 308 Other consumer 87 — — 3 90 Total loans $ 51,785 $ (1,299) $ 150 $ (2,420) $ 48,216
adoption of ASC 326):
Topic 326
provision for
credit losses
March 31, 2021
residential mortgageChanges in the Allowance for Credit Losses
Six Months Ended December 31, 2021Balance at June 30, 2021 Charge-offs Recoveries (Reversal of)
provision for
credit lossesBalance at
December 31, 2021(In Thousands) Multi-family mortgage $ 28,450 $ (104) $ — $ (2,551) $ 25,795 Nonresidential mortgage 16,243 (2,097) — (4,068) 10,078 Commercial business 2,086 (175) 101 (109) 1,903 Construction 1,170 — — 271 1,441 One- to four-family residential mortgage 9,747 — 147 (1,293) 8,601 Home equity loans 433 — 1 (126) 308 Other consumer 36 (2) — 56 90 Total loans $ 58,165 $ (2,378) $ 249 $ (7,820) $ 48,216 ninesix months ended MarchDecember 31, 2022 and 2021:(1)Three Months Ended
December 31,Six Months Ended
December 31,2022 2021 2022 2021 (In Thousands) (In Thousands) Balance at beginning of the period $ 753 $ 1,584 $ 1,041 $ 1,708 Provision for (reversal of) credit losses 66 (436) (222) (560) Balance at end of the period $ 819 $ 1,148 $ 819 $ 1,148 Adoption of CECL accounting standard effective July 1, 2020.- 25 -7. DEPOSITSare summarized as follows:8. BORROWINGSBorrowings at MarchDecember 31, 2022 and June 30, 20212022 are summarized as follows:December 31,
2022June 30,
2022(In Thousands) Non-interest-bearing demand $ 650,950 $ 653,899 Interest-bearing demand 2,316,485 2,265,597 Savings 901,514 1,053,198 Certificates of deposits 2,102,422 1,889,562 Total deposits $ 5,971,371 $ 5,862,256 December 31,
2022June 30,
2022(In Thousands) FHLB advances $ 1,256,573 $ 651,337 127,000 250,000 Total borrowings $ 1,383,573 $ 901,337
Average
Interest Rate
Average
Interest RateDecember 31, 2022 June 30, 2022 Balance Weighted
Average
Interest RateBalance Weighted
Average
Interest Rate(Dollars in Thousands) By remaining period to maturity: Less than one year $ 1,125,000 4.64 % $ 520,000 2.04 % One to two years 103,500 2.65 22,500 2.63 Two to three years 29,000 2.77 103,500 2.68 Three to four years — — 6,500 2.82 Four to five years — — — — Greater than five years — — — — Total advances 1,257,500 4.43 % 652,500 2.17 % Unamortized fair value adjustments (927) (1,163) Total advances, net of fair value adjustments $ 1,256,573 $ 651,337 MarchDecember 31, 2022, FHLB advances and overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans and securities with carrying values totaling approximately $3.44 billion and $155.9 million, respectively.approximately $4.38 billion. At June 30, 2021,2022, FHLB advances and overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans and securities with carrying values totaling approximately $3.27$3.58 billion and $170.1$178.0 million, respectively.2624 -positions.StatementStatements of Financial Condition as of MarchDecember 31, 2022 and June 30, 2021:2022:December 31, 2022 Asset Derivatives Liability Derivatives Location Fair Value Location Fair Value (In Thousands) Derivatives designated as hedging instruments: Interest rate contracts Other assets $ 63,617 Other liabilities $ 2,500 Total $ 63,617 $ 2,500 June 30, 2022 Asset Derivatives Liability Derivatives Location Fair Value Location Fair Value (In Thousands) Derivatives designated as hedging instruments: Interest rate contracts Other assets $ 41,223 Other liabilities $ — Total $ 41,223 $ — objectives in usinguses derivatives are primarily to add stability to interest expense and interest income and to manage its exposure to interest rate movements. To accomplish this objective, theThe Company has entered into interest rate swaps, interest rate caps and capsan interest rate floor as part of its interest rate risk management strategy. These interest rate products are designated as cash flow hedges. As of MarchDecember 31, 2022, the Company had a total of 1012 interest rate swaps and caps with a total notional amount of $790.0 million$1.33 billion hedging specific wholesale funding positions.Amountsninesix months ended MarchDecember 31, 2022, the Company reclassified $1.3$4.1 million and $4.3$5.7 million, respectively, as additionala reduction in interest expense. During the next twelve months, the Company estimates that $4.6$28.2 million will be reclassified as a reduction in interest expense.ninesix months ended MarchDecember 31, 2022 and 2021:Three Months Ended
December 31,Six Months Ended
December 31,2022 2021 2022 2021 (In Thousands) Amount of (loss) gain recognized in other comprehensive income $ (2,183) $ 5,110 $ 19,987 $ 5,264 Amount of gain (loss) reclassified from accumulated other comprehensive income to interest expense 4,104 (1,506) 5,724 (3,003) Three Months Ended
December 31,Six Months Ended
December 31,2022 2022 (In Thousands) Loss on hedged items recorded in interest income on loans $ (995) $ (5,028) Gain on hedge recorded in interest income on loans 1,183 5,110 December 31,
2022(In Thousands) Loans receivable: $ 494,972 Fair value hedging adjustment included in the carrying amount of the hedged assets (5,028)
to interest expense2726 -MarchDecember 31, 2022 and June 30, 2021,2022, respectively. The net amounts presented for derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Consolidated Statements of Financial Condition.December 31, 2022 Gross Amounts Not Offset Gross Amount Recognized Gross Amounts Offset Net Amounts Presented Financial Instruments Cash Collateral Received Net Amount (In Thousands) Assets: Interest rate contracts $ 64,641 $ (1,024) $ 63,617 $ — $ — $ 63,617 Total $ 64,641 $ (1,024) $ 63,617 $ — $ — $ 63,617 Liabilities: Interest rate contracts $ 3,524 $ (1,024) $ 2,500 $ — $ (2,500) $ — Total $ 3,524 $ (1,024) $ 2,500 $ — $ (2,500) $ — June 30, 2022 Gross Amounts Not Offset Gross Amount Recognized Gross Amounts Offset Net Amounts Presented Financial Instruments Cash Collateral Received Net Amount (In Thousands) Assets: Interest rate contracts $ 41,223 $ — $ 41,223 $ — $ — $ 41,223 Total $ 41,223 $ — $ 41,223 $ — $ — $ 41,223 MarchDecember 31, 2022, 0nethe termination value of the Company’s derivatives were in a net liability position.position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to those agreements was $2.9 million. As required under the enforceable master netting arrangement with its derivatives counterparties, at MarchDecember 31, 2022, the Company posted financial collateral of $2.5 million that was not required to post financial collateral.MarchDecember 31, 2022 and June 30, 2021,2022, included $16.0$10.2 million and $48.4$20.3 million, respectively, of in process loans whose terms included interest rate locks to borrowers, which are considered free-standing derivative instruments whose fair values are not material to the Company’s financial condition or results of operations.2827 -and Atlas Bank Retirement Income Plan and Supplemental Executive Retirement Plan:Three Months Ended
December 31,Six Months Ended
December 31,Affected Line Item in the Consolidated Statements of Income 2022 2021 2022 2021 (In Thousands) Service cost $ 117 $ 138 $ 234 $ 276 Salaries and employee benefits Interest cost 96 69 192 138 Other expense (Accretion) amortization of unrecognized (gain) loss (6) 20 (12) 40 Other expense Expected return on assets (25) (28) (50) (56) Other expense Net periodic benefit cost $ 182 $ 199 $ 364 $ 398 At the Company’s 2021 Annual Meeting of Stockholders held on October 28, 2021, the stockholders approved the Kearny Financial Corp. 2021 Equity Incentive Plan (“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.quartersix months ended MarchDecember 31, 2022, the Company granted 251,905 RSUs323,218 restricted stock units (“RSUs”) comprised of 181,588238,121 service-based RSUs and 70,31785,097 performance-based RSUs. The service-based RSUs will vest in three tranches over a period of 2.6three years and the performance-based RSUs will cliff vest upon the achievement of performance measures over the three-year period ending June 30, 2024.2025. 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.21%21% to income for the three months and ninesix months ended MarchDecember 31, 2022 and 2021:Three Months Ended
December 31,Six Months Ended
December 31,2022 2021 2022 2021 (Dollars in Thousands) (Dollars in Thousands) Income before income taxes $ 1,984 $ 25,570 $ 23,774 $ 52,557 Statutory federal tax rate 21 % 21 % 21 % 21 % Federal income tax expense at statutory rate $ 417 $ 5,370 $ 4,993 $ 11,037 (Reduction) increase in income taxes resulting from: Tax exempt interest (46) (68) (105) (138) State tax, net of federal tax effect (124) 1,990 1,296 4,118 Incentive stock option compensation expense 3 16 6 39 Income from bank-owned life insurance (362) (328) (1,137) (656) Other items, net 145 (179) 235 (327) Total income tax expense $ 33 $ 6,801 $ 5,288 $ 14,073 Effective income tax rate 1.66 % 26.60 % 22.24 % 26.78 % 2928 -Level 2: Level 3: MarchDecember 31, 2022 and June 30, 2021:caps and swaps.contracts. The vendor utilizes standard valuation methodologies applicable to interest rate derivatives such as discounted cash flow analysis and extensions of the Black-Scholes model. Such valuations are based upon readily observable market data and are therefore considered Level 2 valuations by the Company.3029 -
Prices
in Active
Markets for
Identical
Assets
(Level 1)
Other
Observable
Inputs
(Level 2)
Unobservable
Inputs
(Level 3)December 31, 2022 Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)Significant
Other
Observable
Inputs
(Level 2)Significant
Unobservable
Inputs
(Level 3)Total (In Thousands) Assets: Debt securities available for sale: Asset-backed securities $ — $ 158,623 $ — $ 158,623 Collateralized loan obligations — 384,059 — 384,059 Corporate bonds — 144,955 — 144,955 Total debt securities — 687,637 — 687,637 Mortgage-backed securities available for sale: Residential pass-through securities — 450,156 — 450,156 Commercial pass-through securities — 148,561 — 148,561 Total mortgage-backed securities — 598,717 — 598,717 Total securities available for sale $ — $ 1,286,354 $ — $ 1,286,354 Interest rate contracts $ — $ 63,617 $ — $ 63,617 Total assets $ — $ 1,349,971 $ — $ 1,349,971 Liabilities: Interest rate contracts $ — $ 2,500 $ — $ 2,500 Total liabilities $ — $ 2,500 $ — $ 2,500 3130 -
in Active
Markets for
Identical
Assets
(Level 1)
Other
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Inputs
(Level 2)
Unobservable
Inputs
(Level 3)June 30, 2022 Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)Significant
Other
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Inputs
(Level 2)Significant
Unobservable
Inputs
(Level 3)Total (In Thousands) Assets: Debt securities available for sale: Obligations of state and political subdivisions $ — $ 28,435 $ — $ 28,435 Asset-backed securities — 166,557 — 166,557 Collateralized loan obligations — 307,813 — 307,813 Corporate bonds — 153,397 — 153,397 Total debt securities — 656,202 — 656,202 Mortgage-backed securities available for sale: Collateralized mortgage obligations — 7,122 — 7,122 Residential pass-through securities — 514,758 — 514,758 Commercial pass-through securities — 166,011 — 166,011 Total mortgage-backed securities — 687,891 — 687,891 Total securities available for sale $ — $ 1,344,093 $ — $ 1,344,093 Interest rate contracts $ — $ 41,223 $ — $ 41,223 Total assets $ — $ 1,385,316 $ — $ 1,385,316 MarchDecember 31, 2022 and June 30, 2021:Individually Analyzed LoansCollateralIndividually analyzed collateral dependent individually analyzed loans are considered a Level 3 valuation by the Company.- 32 -
in Active
Markets for
Identical
Assets
(Level 1)
Other
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(Level 2)
Unobservable
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(Level 3)
in Active
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Identical
Assets
(Level 1)
Other
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Inputs
(Level 2)
Unobservable
Inputs
(Level 3)December 31, 2022 Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)Significant
Other
Observable
Inputs
(Level 2)Significant
Unobservable
Inputs
(Level 3)Total (In Thousands) Collateral dependent loans: Residential mortgage $ — $ — $ 2,030 $ 2,030 Multi-family mortgage — — 7,538 7,538 Nonresidential mortgage — — 10,975 10,975 Total $ — $ — $ 20,543 $ 20,543 Other real estate owned, net: Residential $ — $ — $ 454 $ 454 Nonresidential — — 12,956 12,956 Total $ — $ — $ 13,410 $ 13,410 June 30, 2022 Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)Significant
Other
Observable
Inputs
(Level 2)Significant
Unobservable
Inputs
(Level 3)Total (In Thousands) Collateral dependent loans: Residential mortgage $ — $ — $ 2,035 $ 2,035 Multi-family mortgage — — 7,517 7,517 Nonresidential mortgage — — 11,479 11,479 Total $ — $ — $ 21,031 $ 21,031 Other real estate owned, net: Residential $ — $ — $ 178 $ 178 Total $ — $ — $ 178 $ 178 3332 -table presentstables present additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized adjusted Level 3 inputs to determine fair value:December 31, 2022 Fair
ValueValuation
TechniquesUnobservable
InputRange Weighted
Average(Dollars in Thousands) Collateral dependent loans: Residential mortgage $ 2,030 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 7% - 10% 9.14 % Multi-family mortgage 7,538 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 10% - 12% 10.93 % Nonresidential mortgage 10,975 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 9% - 19% 13.95 % Total $ 20,543 Other real estate owned, net: Residential $ 454 Market valuation of underlying collateral (3) Adjustments to reflect current conditions/selling costs (2) 6.00% 6.00 % Nonresidential 12,956 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 4.00% 4.00 % Total $ 13,410 June 30, 2022 Fair
ValueValuation
TechniquesUnobservable
InputRange Weighted
Average(Dollars in Thousands) Collateral dependent loans: Residential mortgage $ 2,035 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 7% - 10% 8.97 % Multi-family mortgage 7,517 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 10% - 12% 11.06 % Nonresidential mortgage 11,479 Market valuation of underlying collateral (1) Adjustments to reflect current conditions/selling costs (2) 9% - 18% 12.72 % Total $ 21,031 Other real estate owned, net: Residential $ 178 Market valuation of underlying collateral (3) Adjustments to reflect current conditions/selling costs (2) 6.00% 6.00 % Total $ 178
Value
Techniques
Input
Average
Value
Techniques
Input
Average individually analyzed loans is generally determined based on an independent appraisal of the fair value of a loan’s underlying collateral. individually analyzed loans and other real estate owned is adjusted to reflect management’s estimates of selling costs including, but not necessarily limited to, real estate brokerage commissions and title transfer fees.- 34 -MarchDecember 31, 2022, collateral dependent loans valued using Level 3 inputs comprised loans with principal balance totaling $13.6$23.3 million and valuation allowancesallowance of $976,000$2.8 million reflecting an aggregate fair valuesvalue of $12.6$20.5 million. By comparison, at June 30, 2021,2022, collateral dependent loans valued using Level 3 inputs comprised loans with principal balance totaling $25.2$24.6 million and valuation allowancesallowance of $6.5$3.6 million reflecting an aggregate fair valuesvalue of $18.7$21.0 million.MarchDecember 31, 2022 and June 30, 2021,2022, the Company held other real estate owned totaling $401,000 and $178,000,$13.4 million and $178,000, respectively, whose carrying value was written down utilizing Level 3 inputs.MarchDecember 31, 2022 and June 30, 2021:
Amount
Value
Prices
in Active
Markets for
Identical
Assets
(Level 1)
Other
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(Level 2)
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(Level 3)December 31, 2022 Carrying
AmountFair
ValueQuoted
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in Active
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(Level 1)Significant
Other
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(Level 3)(In Thousands) Financial assets: Cash and cash equivalents $ 75,660 $ 75,660 $ 75,660 $ — $ — Investment securities available for sale 1,286,354 1,286,354 — 1,286,354 — Investment securities held to maturity 153,786 138,393 — 138,393 — Loans held-for-sale 12,940 12,975 — 12,975 — Net loans receivable 5,935,256 5,540,440 — — 5,540,440 FHLB Stock 69,022 — — — — Interest receivable 27,368 27,368 10 8,369 18,989 Interest rate contracts 63,617 63,617 — 63,617 — Financial liabilities: Deposits other than certificates of deposits 3,868,949 3,868,949 3,868,949 — — Certificates of deposits 2,102,422 2,060,954 — — 2,060,954 Borrowings 1,383,573 1,379,640 — — 1,379,640 Interest payable on deposits 4,937 4,937 1,506 — 3,431 Interest payable on borrowings 3,664 3,664 — — 3,664 Interest rate contracts 2,500 2,500 — 2,500 — 3534 -
Amount
Value
Prices
in Active
Markets for
Identical
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(Level 1)
Other
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(Level 2)
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(Level 3)June 30, 2022 Carrying
AmountFair
ValueQuoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)Significant
Other
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(Level 2)Significant
Unobservable
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(Level 3)(In Thousands) Financial assets: Cash and cash equivalents $ 101,615 $ 101,615 $ 101,615 $ — $ — Investment securities available for sale 1,344,093 1,344,093 — 1,344,093 — Investment securities held to maturity 118,291 108,118 — 108,118 — Loans held-for-sale 28,874 28,831 — 28,831 — Net loans receivable 5,370,787 5,215,079 — — 5,215,079 FHLB Stock 47,144 — — — — Interest receivable 20,466 20,466 2 5,210 15,254 Interest rate contracts 41,223 41,223 — 41,223 — Financial liabilities: Deposits other than certificates of deposits 3,972,694 3,972,694 3,972,694 — — Certificates of deposits 1,889,562 1,866,341 — — 1,866,341 Borrowings 901,337 900,505 — — 900,505 Interest payable on deposits 722 722 147 — 575 Interest payable on borrowings 1,611 1,611 — — 1,611 3635 -(loss) incomeloss included in stockholders’ equity at MarchDecember 31, 2022 and June 30, 20212022 are as follows:December 31,
2022June 30,
2022(In Thousands) Net unrealized loss on securities available for sale $ (150,841) $ (118,031) Tax effect 43,523 34,104 Net of tax amount (107,318) (83,927) Fair value adjustments on derivatives 54,068 39,805 Tax effect (15,680) (11,542) Net of tax amount 38,388 28,263 Benefit plan adjustments (128) (89) Tax effect 37 26 Net of tax amount (91) (63) Total accumulated other comprehensive loss $ (69,021) $ (55,727) (loss) incomeloss and related tax effects for the three months and ninesix months ended MarchDecember 31, 2022 and 2021 are presented in the following table:Three Months Ended
December 31,Six Months Ended
December 31,2022 2021 2022 2021 (In Thousands) Net unrealized holding gain (loss) on securities available for sale $ 1,328 $ (7,700) $ (48,037) $ (14,746) 15,227 — 15,227 (1) Fair value adjustments on derivatives (6,287) 6,616 14,263 8,267 Benefit plans: (6) 20 (12) 40 Net actuarial loss — — (27) — Net change in benefit plan accrued expense (6) 20 (39) 40 Other comprehensive gain (loss) before taxes 10,262 (1,064) (18,586) (6,440) Tax effect (2,943) 302 5,292 1,870 Total other comprehensive income (loss) $ 7,319 $ (762) $ (13,294) $ (4,570)
available for sale
available for sale (1)consolidated statementsConsolidated Statements of income.Income.
outstanding - basic
outstanding - dilutedThree Months Ended
December 31,Six Months Ended
December 31,2022 2021 2022 2021 (In Thousands, Except Per Share Data) Net income $ 1,951 $ 18,769 $ 18,486 $ 38,484 Weighted average number of common shares outstanding - basic 65,030 72,011 65,383 73,274 Effect of dilutive securities 8 26 10 23 Weighted average number of common shares outstanding - diluted 65,038 72,037 65,393 73,297 Basic earnings per share $ 0.03 $ 0.26 $ 0.28 $ 0.53 Diluted earnings per share $ 0.03 $ 0.26 $ 0.28 $ 0.53 optionsoptions for 3,096,138 and 3,115,000 and3,253,040 shares of common stock were not considered in computing diluted earnings per share at Marchfor the three months ended December 31, 2022 and March2021, respectively, and stock options for 2,965,000 and 3,115,000 shares of common stock were not considered in computing diluted earnings per share for the six months ended December 31, 2022 and 2021, respectively, because the stock optionsthey were considered anti-dilutive. In addition,251,905 427,347 RSUs were not considered in computing diluted earnings per share at Marchfor the three months and six months ended December 31, 2022, respectively, because the RSUsthey were considered anti-dilutive.3837 -ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including whether the coronavirus can continue to be controlled and abated. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy worsens, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for credit losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; due to a decline in our stock price or other factors, goodwill may become impaired and be required to be written down; and our cyber security risks are increased as the result of an increase in the number of employees working remotely. Reference is made to Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2021.MarchDecember 31, 2022, we consider the determination of the allowance for credit losses on loans, individually evaluating loans, calculating the allowance of credit losses on acquired loans, accounting for business combinations and the valuation of goodwill and identifiable intangible assetsthere have been no material changes to be our critical accounting policies.policies as compared to the critical accounting policies disclosed in our most recent Annual Report on Form 10-K. Reference is made to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2021, for a description of the Company’s critical accounting policies.- 39 -MarchDecember 31, 2022 and June 30, 2021$106.2$569.4 million to $7.39$8.29 billion at MarchDecember 31, 2022 from $7.28$7.72 billion at June 30, 2021.2022. The increase primarily reflected an increase in net loans receivable, partially offset by a decrease in investment securities.receivable.$150.8$57.7 million to $1.53$1.29 billion at MarchDecember 31, 2022, from $1.68$1.34 billion at June 30, 2021. 2022. This decrease was largely the result of sales of $120.4 million, principal repayments of $280.5$70.8 million and a fair value decrease of $74.0$32.8 million, partially offset by security purchases of $206.1$166.5 million.$83.7$35.5 million to $121.9$153.8 million at MarchDecember 31, 2022 from $38.1$118.3 million at June 30, 2021.2022. This increase was largely the result of security purchases of $86.4$40.4 million, partially offset by principal repayments of $2.6$4.9 million.MarchDecember 31, 2022 and June 30, 20212022 is presented in Note 4 to the unaudited consolidated financial statements.$2.8$12.9 million at MarchDecember 31, 2022 as compared to $16.5$28.9 million at June 30, 20212022 and are reported separately from the balance of net loans receivable.receivable. Loans held-for-sale consisted of residential mortgage loans and commercial mortgage loans of $4.3 million and $8.7 million, respectively, at December 31, 2022 as compared to $7.1 million and $21.7 million, respectively, at June 30, 2022. During the ninesix months ended MarchDecember 31, 2022, $165.5we sold $59.3 million of residential mortgage loans, were sold, resulting in a gain on sale of $2.3 million.$446,000, and $15.7 million of commercial mortgage loans, resulting in a net gain on sale of $28,000.$166.1$564.5 million, or 3.5%10.5%, to $4.96$5.94 billion at MarchDecember 31, 2022 from $4.79$5.37 billion at June 30, 2021. Detail2022. Details regarding the change in the loan portfolio, by loan segment, is presented below:December 31,
2022June 30,
2022Increase/
(Decrease)(In Thousands) Commercial loans: Multi-family mortgage $ 2,851,721 $ 2,409,090 $ 442,631 Nonresidential mortgage 1,017,341 1,019,838 (2,497) Commercial business 177,530 176,807 723 Construction 186,663 140,131 46,532 Total commercial loans 4,233,255 3,745,866 487,389 One- to four-family residential mortgage 1,719,514 1,645,816 73,698 Consumer loans: Home equity loans 45,690 42,028 3,662 Other consumer 2,648 2,866 (218) Total consumer loans 48,338 44,894 3,444 Total loans 6,001,107 5,436,576 564,531 Unaccreted yield adjustments (16,974) (18,731) 1,757 Allowance for credit losses (48,877) (47,058) (1,819) Net loans receivable $ 5,935,256 $ 5,370,787 $ 564,469 ninesix months ended MarchDecember 31, 2022 totaled $834.0$798.1 million, comprised of $667.1$690.3 million of commercial mortgage loan originations, $105.5$54.2 million of commercial business loan originations and construction loan disbursements of $61.4$53.5 million. Commercial loan origination volume was augmented with the funding of purchased commercial mortgage loans totaling $55.8 million.for the nine months ended March 31, 2022, excluding loans held-for-sale, totaled $262.7totaled $150.7 million andfor the six months ended December 31, 2022 and was augmentedsupplemented with the fundingpurchase of purchased loans totaling $56.5 million.totaling $656,000. Home equity loan and line of credit origination volume for the same period totaled $13.5totaled $18.1 million.- 40 -(“(“LTV”) ratios are based on current period loan balances and original appraised values at the time of origination unless a current appraisal has been obtained as a result of the loan being deemed collateral dependent and individually analyzed.analyzed. The following table sets forth the composition of our real estate secured loans indicating the LTV, by loan category, at MarchDecember 31, 2022 and June 30, 2021:December 31, 2022 June 30, 2022 Balance LTV Balance LTV (Dollars in Thousands) Commercial mortgage loans: Multi-family mortgage $ 2,851,721 64 % $ 2,409,090 64 % Nonresidential mortgage 1,017,341 54 1,019,838 54 Construction 186,663 60 140,131 61 Total commercial mortgage loans 4,055,725 61 3,569,059 61 One- to four-family residential mortgage 1,719,514 63 1,645,816 62 Consumer loans: Home equity loans 45,690 48 42,028 46 Total mortgage loans $ 5,820,929 62 % $ 5,256,903 61 % MarchDecember 31, 2022 and June 30, 20212022 is presented in Note 5 to the unaudited consolidated financial statements.increaseddecreased by $1.1$29.6 million to $81.0$62.6 million, or 1.10%0.76% of total assets, at MarchDecember 31, 2022, from $79.9$92.2 million, or 1.10%1.19% of total assets, at June 30, 2021.2022. At MarchDecember 31, 2022, we had accruing TDRs totaling $8.5$10.5 million, an increase of $2.3$1.8 million from $6.2$8.7 million at June 30, 2021.2022. At MarchDecember 31, 2022, we had non-accrual TDRs totaling $23.2$7.9 million, an increasea decrease of $11.6$5.6 million from $11.6$13.5 million at June 30, 2021.2022.Based on Section 4013the CARES Act, the 2021 Consolidated Appropriations Act$40.5 million of nonperforming loans, $8.7 million of non-accrual commercial loans held for sale and related regulatory guidance promulgated by federal banking regulators, qualifying loan modifications made in response to the COVID-19 pandemic, including short-term payment deferrals, were not considered to be TDRs. We had no active payment deferrals that were not considered TDRs as$13.4 million of March 31, 2022. We had active payment deferrals, which were not considered TDRs, of $5.6 million as ofother real estate owned (“OREO”). At June 30, 2021.MarchDecember 31, 2022 and June 30, 20212022 is presented in Note 5 to the unaudited consolidated financial statements.(“ACL”(“ACL”). At MarchDecember 31, 2022, the ACL totaled $43.9$48.9 million, or 0.81% of total loans, reflecting an increase of $1.8 million from $47.1 million, or 0.87% of total loans, reflecting a decrease of $14.3 million from $58.2 million, or 1.19% of total loans, at June 30, 2021.2022. The decrease during increase during the ninesix months ended MarchDecember 31, 2022 was largely attributable to a provision for credit losses reversal of $11.7losses of $2.3 million, primarily driven by continued improvement in our economic forecast, loan growth, partially offset by a reduction in the expected life of various segments of the loan portfolio and a net reduction in reserves on loans individually evaluated for impairment.Also contributing to this decrease were net charge-offsthe qualitative component of $2.6 million, which had been individually reserved for within the ACL at June 30, 2021.our ACL.MarchDecember 31, 2022 and June 30, 20212022 is presented in Note 6 to the unaudited consolidated financial statements.$26.3$69.1 million to $717.4$825.3 million at MarchDecember 31, 2022 from $691.2$756.2 million at June 30, 2021. The2022. The increase in thethe balance of these other assets during the ninesix months ended MarchDecember 31, 2022 largely reflected a $32.2$22.4 million increase increase in the fair value of our derivatives portfolio.derivative assets, a $21.9 million increase in FHLB stock and a $13.2 million increase in OREO. The increase in OREO was a result of our acquisition of a $13.0 million nonresidential real estate property through foreclosure during the quarter ended December 31, 2022. The remaining change generally reflected normal operating fluctuations within these line items.- 41 -$43.4$109.1 million, or 0.8%1.9%, to $5.53$5.97 billion at MarchDecember 31, 2022 from $5.49$5.86 billion at June 30, 2021. The increase2022. Included in deposits largely reflected growth in core non-maturitytotal deposits which was partially offset by the controlled run-offare brokered and listing service time deposits of time deposits.$747.5 million at December 31, 2022 and $773.5 million at June 30, 2022. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:December 31,
2022June 30,
2022Increase/
(Decrease)(In Thousands) Non-interest-bearing deposits $ 650,950 $ 653,899 $ (2,949) Interest-bearing deposits: Interest-bearing demand 2,316,485 2,265,597 50,888 Savings 901,514 1,053,198 (151,684) Certificates of deposit 2,102,422 1,889,562 212,860 Interest-bearing deposits 5,320,421 5,208,357 112,064 Total deposits $ 5,971,371 $ 5,862,256 $ 109,115 MarchDecember 31, 2022 and June 30, 20212022 is presented in Note 7 to the unaudited consolidated financial statements.$165.3$482.2 million to $851.2 million$1.38 billion at MarchDecember 31, 2022 from $685.9$901.3 million at June 30, 2021.2022. The growth in borrowings complemented the growth in deposits and collectively were used to fund our balance sheet growth.MarchDecember 31, 2022 and June 30, 20212022 is presented in Note 8 to the unaudited consolidated financial statements.$14.8 million$556,000 to $54.8$61.7 million at MarchDecember 31, 2022 from $69.6$62.3 million at June 30, 2021.2022. The decrease in these other liabilities largely reflected the payment of a $12.5 million loan participation liability which was outstanding at June 30, 2021. The remaining change in the balance of these other liabilities generally reflected normal operating fluctuations during the period.$87.8$21.4 million to $955.2$872.6 million at MarchDecember 31, 2022 from $1.04 billion$894.0 million at June 30, 2021.2022. The decrease in stockholders’ equity during the ninesix months ended MarchDecember 31, 2022 largely reflected share repurchases totaling $96.0of $14.4 million and cash dividends totaling $23.0of $14.4 million. In addition, accumulated other comprehensive (loss)loss, net of income decreased $29.1tax, was $13.3 million, due primarily towhich was driven by a decline in the fair value of our available for sale securities, partially offset by an increase in the fair value of our derivatives portfolio. These decreasesitems were partially offset by net income of $56.2$18.5 million.increaseddecreased by $0.16$0.07 to $13.37$12.95 at MarchDecember 31, 2022 while tangible book value per share decreased by $0.11$0.12 to $10.38$9.78 at MarchDecember 31, 2022.September 22, 2021,August 1, 2022, we announced that the authorizationBoard of Directors had authorized a new stock repurchase plan to repurchase up to 4,000,000 shares, and the completion of our previous stock repurchase plan, which authorized the repurchase of up to 7,602,021 shares, or 10% of the shares then outstanding.shares. During the quartersix months ended MarchDecember 31, 2022, we repurchased 2,019,6251,309,606 shares of common stock at a cost of $27.0$14.4 million, or $13.35$11.02 per share. Through March 31, 2022, we repurchased a total of 4,522,301share, including 984,461 shares, or 59.5%24.6% of the shares authorized for repurchase under the current repurchase program, at a total cost of $59.6$10.8 million or $13.18$10.98 per share.- 42 -MarchDecember 31, 2022 and MarchDecember 31, 2021MarchDecember 31, 2022 was $17.7$2.0 million, or $0.25$0.03 per diluted share, compared to $16.4$18.8 million, or $0.20$0.26 per diluted share for the quarter ended MarchDecember 31, 2021. The increasedecrease in net income reflected a decrease in net interest income, an increase in the provision for credit losses, a decrease in non-interest income and an increase in non-interest expense, partially offset by a decrease in net interest income atax expense. The primary driver of the decrease in non-interestnet income an increase in non-interest expense and an increase in income tax expense.was the $15.2 million loss on the sale of securities that resulted from a previously announced wholesale restructuring.Effective July 1, 2021, loan prepayment penalty income was reclassified toNet interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Interest income and non-interest income for all periods presented reflect this reclassification.Net interest income decreased by $756,000by $3.9 million to $47.7$44.8 million for the quarter ended MarchDecember 31, 2022 compared to $48.5$48.7 million for the quarter ended MarchDecember 31, 2021. TheThe decrease betweenbetween the comparative periods resulted from a decrease of $4.6an increase of $20.4 million in interest income,expense, partially offset by a decreasean increase of $3.8 $16.5 million in interest expense.income. Included in net interest income for the quarters ended MarchDecember 31, 2022 and March 31, 2021, respectively, was purchase accounting accretion of $1.9 million and $4.8$2.6 million, and loan prepayment penalty income of $1.3 million$166,000 and $852,000.$1.5 million.margin increased onemargin decreased 58 basis pointpoints to 2.89% for the quarter ended March 31, 2022, from 2.88%2.38% for the quarter ended MarchDecember 31, 2022, from 2.96% for the quarter ended December 31, 2021 and reflected a decrease increases in the cost and average balance of interest-bearing liabilities, partially offset by increases in the average balance and yield on interest-earning assets. The increased cost of interest-bearing liabilities that was partially offset by a decrease in the averageand yield on interest-earning assets.assets is the result of higher market interest rates that were caused by an increase in the federal funds target rate from 0% - 0.25% in March 2022 to 4.25% - 4.50% in December 2022.Three Months Ended December 31, 2022 2021 Average
BalanceInterest Average
Yield/
CostAverage
BalanceInterest Average
Yield/
Cost(Dollars in Thousands) Interest-earning assets: $ 5,839,903 $ 57,996 3.97 % $ 4,822,959 $ 47,575 3.95 % 1,527,578 13,221 3.46 1,610,395 7,595 1.89 37,917 219 2.32 57,686 327 2.26 114,175 1,005 3.52 77,811 415 2.13 Total interest-earning assets 7,519,573 72,441 3.85 6,568,851 55,912 3.40 Non-interest-earning assets 550,519 611,390 Total assets $ 8,070,092 $ 7,180,241 Interest-bearing liabilities: Interest-bearing demand $ 2,359,977 9,625 1.63 $ 2,027,021 1,134 0.22 Savings 931,584 953 0.41 1,086,903 288 0.11 Certificates of deposit 2,192,722 8,244 1.50 1,693,423 2,241 0.53 Total interest-bearing deposits 5,484,283 18,822 1.37 4,807,347 3,663 0.30 Federal Home Loan Bank advances 997,148 8,836 3.54 666,029 3,556 2.14 Other borrowings — — — 26,033 6 0.09 Borrowings 997,148 8,836 3.54 692,062 3,562 2.06 Total interest-bearing liabilities 6,481,431 27,658 1.71 5,499,409 7,225 0.53 723,567 675,070 Total liabilities 7,204,998 6,174,479 Stockholders' equity 865,094 1,005,762 Total liabilities and stockholders' equity $ 8,070,092 $ 7,180,241 Net interest income $ 44,783 $ 48,687 2.14 % 2.87 % 2.38 % 2.96 % Ratio of interest-earning assets to interest-bearing liabilities 1.16 1.19 - 43 -
Balance
Yield/
Cost
Balance
Yield/
Cost
to interest-bearing liabilitiesof $624.2of $666.8 million and $525.0$624.2 million for the quarter ended MarchDecember 31, 2022 and 2021, respectively.losses decreased $5.0losses increased $4.1 million to a provision for credit losses reversal of $3.9$1.7 million for the quarter ended MarchDecember 31, 2022, compared to a provision for credit losses reversal of $1.1$2.4 million for the quarter ended MarchDecember 31, 2021. The provision for the quarter ended December 31, 2022 was largely attributable to loan growth, partially offset by a reduction in the qualitative component of our ACL. By comparison, the provision reversal for the quarter ended MarchDecember 31, 20222021 was largely attributableattributable to continued improvement in our economic forecast. In addition, there was a net reduction in reserves on individually evaluated loans primarily related to improved collateral values. By comparison,and a reduction in the provision forexpected life of various segments of the quarter ended March 31, 2021 was largely attributable to increases in qualitative factors associated with the impact of COVID-19 on economic conditions and an increase in reserves on individually evaluated loans of $4.2 million, partially offset by a release of reserves within the one- to four-family residential segment, reflecting the improved credit risk outlook for that asset class.loan portfolio.MarchDecember 31, 2022 and 2021 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at MarchDecember 31, 2022 and June 30, 2021.- 44 -$1.4$12.6 million to $3.2a loss of $8.5 million for the quarter ended MarchDecember 31, 2022.Feesservice charges increased $144,000 to $617,000 forcall of securities was $15.2 million during the quarter ended MarchDecember 31, 2022.2022 compared to no gain or loss recorded during the prior period. The increase primarily reflected increasesloss was the result of a previously announced wholesale restructuring that involved the sale of $120.4 million of available for sale securities during the quarter. The proceeds of the sale were reinvested in various deposit-related and loan-related fees and charges.$567,000$836,000 to $376,000$134,000 for the quarter ended MarchDecember 31, 2022. The decrease in loan sale gains largely reflected a lower average sales price of loans sold and a decrease in the volume of loans sold between comparative periods largely attributable to increases in market interest rates.decreased $956,000increased $3.2 million to $238,000$3.7 million for the quarter ended MarchDecember 31, 2022.2022. The decreaseincrease in other non-interest income was primarily reflected $837,000attributable to a non-recurring gain of $2.9 million from the sale of a former branch location and a $660,000 increase in income from investment services. These increases were partially offset by $356,000 of non-recurring gains on asset disposals recognized in the prior comparative period for which no such gains were recorded in the current period.expenseexpense increased $807,000$3.0 million to $30.6$32.7 million for the quarter ended MarchDecember 31, 2022.$2.2$1.8 million to $19.2$19.9 million for quarter ended MarchDecember 31, 2022. This increase was largely due to the impact of staff additions, annual merit increases, increases in benefit planhigher salary expense, including employee medical, post-retirement plan and ESOP expense, and an increase in incentive payments tied to loan origination volume.volume and non-recurring severance expense resulting from a workforce realignment. Partially offsetting these increases was a decrease in stock-basedincentive compensation expense.Director compensation decreased $408,000$340,000 for the quarter ended March 31, 2022. This decrease primarily reflected a decline in director-related stock-based compensation expense.Other non-interest expense decreased $734,000 to $3.1$1.2 million for the quarter ended MarchDecember 31, 2022. The increase was largely driven by asset growth.decreaseincrease was primarily attributabledue to a $502,000 increase in the reversal of provision for credit losses on off-balance sheet credit exposures and a decrease in loan expenses. The decrease was also attributable to non-recurring asset impairment charges of $375,000 related to branch consolidation activity recognized during the prior comparative quarter. increased $790,000 decreased $6.8 million to $6.5$33,000 for the quarter ended December 31, 2022 from $6.8 million for the quarter ended March 31, 2022 from $5.7 million for the quarter ended MarchDecember 31, 2021.increasedecrease in income tax expense reflected a higherlower level of pre-tax net income as compared to the prior period, resulting in a higher provision for income tax expense.MarchDecember 31, 2022 and 2021 were 26.9%1.7% and 25.9%26.6%, respectively. The decrease in the effective tax rate was primarily due to a year-to-date tax rate true-up which resulted from the loss on the sale of securities during the current quarter. The loss lowered our full year projected taxable income and income tax provision.NineSix Months Ended MarchDecember 31, 2022 and MarchDecember 31, 2021ninesix months ended MarchDecember 31, 2022 was $56.2$18.5 million, or $0.78$0.28 per diluted share, compared to $44.8$38.5 million, or $0.53 per diluted share for the ninesix months ended MarchDecember 31, 2021. The increasedecrease in net income reflected an increasea decrease in net interest income, a decreasean increase in the provision for credit losses, and a decrease in non-interest income and an increase in non-interest expense, partially offset by a decrease in non-interest income and an increase in income tax expense.As noted above, effective July 1, 2021, loan prepayment penalty income was reclassified to interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Interest income and non-interest income for all periods presented reflect this reclassification.increaseddecreased by $6.8$5.0 million to $146.0$93.3 million for the ninesix months ended MarchDecember 31, 2022 compared to $139.2$98.3 million for the ninesix months ended MarchDecember 31, 2021. The increasedecrease between the comparative periods resulted from a decreasean increase of $19.5$28.7 million in interest expense, partially offset by a decreasean increase of $12.7$23.7 million in interest income. Included in net interest income for the ninesix months ended MarchDecember 31, 2022 and 2021, respectively, was purchase accounting accretion of $7.4$3.7 million and $13.5$5.5 million, and loan prepayment penalty income of $4.5 million$607,000 and $2.8$3.2 million.- 45 -increased 18decreased 45 basis points to 2.95%2.53% for the ninesix months ended MarchDecember 31, 2022, from 2.77%2.98% for the ninesix months ended MarchDecember 31, 2021 and reflected a decreaseincreases in the cost and average balance of interest-bearing liabilities, partially offset by increases in the average balance and yield on interest-earning assets. The increased cost of interest-bearing liabilities that was partially offset by a decrease in the averageand yield on interest-earning assets.assets is the result of higher market interest rates that were caused by an increase in the federal funds target rate from 0% - 0.25% in March 2022 to 4.25% - 4.50% in December 2022.Six Months Ended December 31, 2022 2021 Average
BalanceInterest Average
Yield/
CostAverage
BalanceInterest Average
Yield/
Cost(Dollars in Thousands) Interest-earning assets: $ 5,696,949 $ 110,931 3.89 % $ 4,829,318 $ 95,805 3.97 % 1,522,276 23,660 3.11 1,630,174 15,807 1.94 43,445 504 2.32 58,400 660 2.26 101,107 1,766 3.49 81,780 846 2.07 Total interest-earning assets 7,363,777 136,861 3.72 6,599,672 113,118 3.43 Non-interest-earning assets 560,372 614,062 Total assets $ 7,924,149 $ 7,213,734 Interest-bearing liabilities: Interest-bearing demand $ 2,357,159 $ 15,016 1.27 $ 1,990,646 $ 2,280 0.23 Savings 975,463 1,549 0.32 1,094,884 622 0.11 Certificates of deposit 2,103,822 13,126 1.25 1,745,948 4,826 0.55 Total interest-bearing deposits 5,436,444 29,691 1.09 4,831,478 7,728 0.32 Federal Home Loan Bank advances 819,773 13,138 3.21 665,972 7,101 2.13 Other borrowings 63,728 718 2.26 27,283 12 0.09 Borrowings 883,501 13,856 3.14 693,255 7,113 2.05 Total interest-bearing liabilities 6,319,945 43,547 1.38 5,524,733 14,841 0.54 723,811 671,116 Total liabilities 7,043,756 6,195,849 Stockholders' equity 880,393 1,017,885 Total liabilities and stockholders' equity $ 7,924,149 $ 7,213,734 Net interest income $ 93,314 $ 98,277 2.34 % 2.89 % 2.53 % 2.98 % Ratio of interest-earning assets to interest-bearing liabilities 1.17 1.19
Balance
Yield/
Cost
Balance
Yield/
Cost
to interest-bearing liabilities$619.5$667.2 million and $502.0 $617.2 million for the ninesix months ended MarchDecember 31, 2022 and 2021, respectively.decreased $15.6increased $10.2 million to a provision for credit losses reversal of $11.7$2.3 million for the ninesix months ended MarchDecember 31, 2022, compared to a provision for credit losses reversal of $3.8$7.8 million for the ninesix months ended MarchDecember 31, 2021. The provision reversal for the ninesix months ended MarchDecember 31, 2022 was largely attributable to loan growth, partially offset by a continuedreduction in the qualitative component of our ACL and a reduction in the expected life of the loan portfolio. By comparison, the provision reversal for the six months ended December 31, 2021 was largely attributable to a release of reserves, which reflected improvement in our economic forecast,credit risk outlook and a reduction in the expected life of various segments of the loan portfolio and a net reduction in reserves on loans individually evaluated for impairment. By comparison, the provision for the nine months ended March 31, 2021, was largely attributable to an increase of $5.7 million in reserves on individually evaluated loans and $5.1 million of provision expense on non-PCD loans acquired in connection with the acquisition of MSB, partially offset by a release of reserves within the one- to four-family residential segment, reflecting the improved credit risk outlook for that asset class and provision for credit losses reversal associated with a decline in balances of loans collectively evaluated for impairment.portfolio.ninesix months ended MarchDecember 31, 2022 and 2021 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at MarchDecember 31, 2022 and June 30, 2021.$6.4$10.5 million to $11.1a loss of $2.6 million for the ninesix months ended MarchDecember 31, 2022.Fees and service charges increased $448,000 to $1.9 million for the nine months ended March 31, 2022. The increase primarily reflected increases in loan-related and deposit-related fees and charges.Gainreflected a net gain of $4,000was $15.2 million during the ninesix months ended MarchDecember 31, 2022 compared to a net gain of $454,000$1,000 recorded during the earlierprior comparative period.$2.9$1.4 million to $2.4 million$529,000 for the ninesix months ended MarchDecember 31, 2022. The decrease in loan sale gains largely reflected a decrease in the volume of loans sold between comparative periods and a lower average sales priceperiods.loans sold.Bargain purchase gain recognized in the prior comparative period in connection with our acquisition of MSB was $3.1 million. No such gain was recorded in the current period.decreased $413,000increased $3.6 million to $938,000$4.3 million for the ninesix months ended MarchDecember 31, 2022. The decreaseincrease in other non-interest income was primarily reflectedattributable to a $356,000 non-recurring gain on asset disposals recognizedof $2.9 million from the sale of a former branch location and a $1.1 million increase in the current period compared to $837,000income from investment services. These increases were partially offset by $356,000 of non-recurring gains on asset disposals recorded in the prior comparative period.decreased $1.8increased $3.2 million to $92.1$64.6 million for the ninesix months ended MarchDecember 31, 2022.$4.9$3.6 million to $55.9$40.3 million for the ninesix months ended MarchDecember 31, 2022. This increase was largely due to the impact of staff additions, annual merit increases, increases in benefit planhigher salary expense, including employee medical, post-retirement plan and ESOP expense, and an increase in incentive payments tied to loan origination volume.volume and non-recurring severance expense resulting from a workforce realignment. Partially offsetting these increases was a decrease in stock-basedincentive compensation expense.increased $1.3decreased $1.6 million to $10.9$6.1 million for the ninesix months ended MarchDecember 31, 2022. This increasedecrease was primarily due to $1.5 million of non-recurring expenses of $1.3 million related to the consolidation of three retail branch locations $250,000 related to facility repairs made in connection with damage incurred during Tropical Storm Ida and $187,000 related to the closure of a leased office facility acquiredrecognized in conjunction with the MSB acquisition.Director compensation decreased $452,000prior period.$1.8$2.1 million for the ninesix months ended MarchDecember 31, 2022. This decrease primarily reflected a decline in director-related stock-based compensation expense.Merger-related expenses, associated with our acquisition of MSB, totaled $4.3 million for the nine months ended March 31, 2021 for which no such costs were recorded in the current period.Debt extinguishment expenses totaled $796,000 for the nine months ended March 31, 2021 for which no such costs were recorded in the current period.Other non-interest expense decreased $2.4 million to $9.1 million for the nine months ended March 31, 2022. This decreaseThe increase was primarily attributable to the reversal of provision for credit losses on off-balance sheet credit exposures and a decrease in loan expenses. The decrease was also attributable to non-recurringlargely driven by asset impairment charges related to branch consolidation activity of $420,000 in the current period compared to $722,000 during the prior period.- 47 -increased $6.4decreased $8.8 million to $20.6$5.3 million for the ninesix months ended MarchDecember 31, 2022 from $14.2$14.1 million for the ninesix months ended MarchDecember 31, 2021.increasedecrease in income tax expense reflected a higherlower level of pre-tax net income as compared to the prior period, resulting in a higher provision for income tax expense. The increase also reflected the effects of various non-recurring items recorded in conjunction with our acquisition of MSB, recorded in the prior comparative period, including non-deductible merger related expenses, which were partially offset by a non-taxable bargain purchase gain. The change in income tax expense also reflected the reversal of a valuation allowance totaling $535,000 which was associated with the realization of a capital loss carryforward recorded in the prior comparative period for which no such amount was recorded in the current period.ninesix months ended MarchDecember 31, 2022 and 2021 were 26.8%22.2% and 24.1%26.8%, respectively. The decrease in the effective tax rate forwas primarily due to lower full year projected taxable income, noted above, as well as non-taxable payouts on life insurance policies, noted above, during the prior comparative period reflected the effects of various non-recurring items recorded in conjunction with our acquisition of MSB and reversal of a valuation allowance, as noted above.six months ended December 31, 2022.MarchDecember 31, 2022, liquidity included $62.4$75.7 million of short-term cash and equivalents supplemented by $1.53and $1.29 billion of investment securities classified as available for sale. In addition, as of MarchDecember 31, 2022, we had the capacity to borrow additional funds totaling $2.38$1.68 billion and $312.5$307.2 million from the FHLB of New York and FRB, respectively, without pledging additional collateral. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $950.0$995.0 million of which $310.0 millionnone was outstanding.MarchDecember 31, 2022, we had outstanding commitments to originate and purchase loans totaling approximately $198.1$31.5 million while such commitments totaled $192.8$242.1 million at June 30, 2021.2022. As of those same dates, our pipeline of loans held for sale included $16.0$10.2 million and $48.4$20.3 million, respectively, of loans in process whose terms included interest rate locks to borrowers that were paired with a non-binding, best-efforts commitment to sell the loan to a buyer at a fixed price and within a predetermined timeframe after the sale commitment is established.$88.2$93.7 million and $165.8$162.3 million, respectively, at MarchDecember 31, 2022 compared to $138.3$109.0 million and $181.1$159.3 million, respectively, at June 30, 2021.2022. We are also subject to the contingent liabilities resulting from letters of credit whose outstanding balances totaled $180,000$115,000 and $739,000,$130,000, at MarchDecember 31, 2022 and June 30, 2021,2022, respectively.- 48 -MarchDecember 31, 2022 and June 30, 2021,2022, as compared to the minimum regulatory capital requirements that were in effect as of those dates:At December 31, 2022 Actual For Capital
Adequacy PurposesTo Be Well Capitalized
Under Prompt
Corrective Action
ProvisionsAmount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 678,149 12.09 % $ 448,818 8.00 % $ 561,023 10.00 % Tier 1 capital (to risk-weighted assets) 642,389 11.45 % 336,614 6.00 % 448,818 8.00 % Common equity tier 1 capital (to risk-weighted assets) 642,389 11.45 % 252,460 4.50 % 364,665 6.50 % Tier 1 capital (to adjusted total assets) 642,389 8.00 % 321,241 4.00 % 401,551 5.00 % At June 30, 2022 Actual For Capital
Adequacy PurposesTo Be Well Capitalized
Under Prompt
Corrective Action
ProvisionsAmount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 672,274 13.10 % $ 410,429 8.00 % $ 513,036 10.00 % Tier 1 capital (to risk-weighted assets) 642,336 12.52 % 307,822 6.00 % 410,429 8.00 % Common equity tier 1 capital (to risk-weighted assets) 642,336 12.52 % 230,866 4.50 % 333,473 6.50 % Tier 1 capital (to adjusted total assets) 642,336 8.70 % 295,163 4.00 % 368,954 5.00 %
Adequacy Purposes
Under Prompt
Corrective Action
Provisions
Adequacy Purposes
Under Prompt
Corrective Action
ProvisionsMarchDecember 31, 2022 and June 30, 2021,2022, as compared to the minimum regulatory capital requirements that were in effect as of those dates:
Adequacy Purposes
Adequacy PurposesAt December 31, 2022 Actual For Capital
Adequacy PurposesAmount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 773,450 13.78 % $ 448,956 8.00 % Tier 1 capital (to risk-weighted assets) 737,690 13.14 % 336,717 6.00 % Common equity tier 1 capital (to risk-weighted assets) 737,690 13.14 % 252,538 4.50 % Tier 1 capital (to adjusted total assets) 737,690 9.18 % 321,429 4.00 % At June 30, 2022 Actual For Capital
Adequacy PurposesAmount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 778,253 15.17 % $ 410,515 8.00 % Tier 1 capital (to risk-weighted assets) 748,315 14.58 % 307,886 6.00 % Common equity tier 1 capital (to risk-weighted assets) 748,315 14.58 % 230,914 4.50 % Tier 1 capital (to adjusted total assets) 748,315 10.14 % 295,290 4.00 % - 49 -MarchDecember 31, 2022.5048 -relatively low level of interest rates prevalent at March 31, 2022 and June 30, 20212022 precluded the modeling of certain falling rate scenarios.MarchDecember 31, 2022 and June 30, 2021,2022, respectively:
Interest Rates
of EVE
in EVE
of NII
in NII
of NII
in NII
Interest Rates
of EVE
in EVE
of NII
in NII
of NII
in NIIAt March 31, 2022, our interest rate risk analysis was impacted by $310.0 million of overnight borrowings, compared to $20.0 million of overnight borrowings at June 30, 2021. This increased level of overnight borrowings resulted in a relatively greater level of interest rate sensitivity in the rising rate shock scenarios and does not reflect any future actions we may take to replace or extend the maturity of these borrowings.December 31, 2022 1 to 12 Months 13 to 24 Months Change in Interest Rates EVE % Change
in EVENII % Change
in NIINII % Change
in NII(Dollars in Thousands) +300 bps $ 830,790 (20.84) % $ 185,330 (4.97) % $ 209,714 (2.29) % +200 bps 892,121 (15.00) % 187,257 (3.99) % 208,469 (2.87) % +100 bps 985,070 (6.14) % 192,078 (1.51) % 213,876 (0.36) % 0 bps 1,049,516 — 195,031 — 214,638 — -100 bps 1,071,202 2.07 % 193,352 (0.86) % 208,256 (2.97) % -200 bps 1,053,122 0.34 % 188,401 (3.40) % 195,638 (8.85) % -300 bps 1,053,873 0.42 % 181,755 (6.81) % 179,183 (16.52) % June 30, 2022 1 to 12 Months 13 to 24 Months Change in Interest Rates EVE % Change
in EVENII % Change
in NIINII % Change
in NII(Dollars in Thousands) +300 bps $ 1,089,795 (15.37) % $ 178,865 (13.62) % $ 214,839 (1.68) % +200 bps 1,156,219 (10.21) % 187,601 (9.40) % 215,528 (1.36) % +100 bps 1,239,935 (3.71) % 198,126 (4.32) % 219,594 0.50 % 0 bps 1,287,700 — 207,069 — 218,501 — -100 bps 1,272,203 (1.20) % 205,241 (0.88) % 204,568 (6.38) % 5149 -MarchDecember 31, 2022, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.5250 -MarchDecember 31, 2022, neither the Company nor the Bank were involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which involve amounts in the aggregate believed by management to be immaterial to the financial condition of the Company and the Bank.2021,2022, previously filed with the Securities and Exchange Commission.MarchDecember 31, 2022:
of Shares
Purchased
Paid per Share
of Shares
Purchased as
Part of Publicly
Announced Plans
or Programs
Number of Shares
that May Yet Be
Purchased Under
the Plans or
ProgramsPeriod Total Number
of Shares
PurchasedAverage Price
Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1-31, 2022 369,900 $ 10.75 369,900 3,195,439 November 1-30, 2022 179,900 $ 9.82 179,900 3,015,539 December 1-31, 2022 — $ — — 3,015,539 Total 549,800 $ 10.45 549,800 3,015,539 September 22, 2021,August 1, 2022, the Company announced the authorization of a new stock repurchase plan to repurchase up to 7,602,021 shares, or 10% of the shares then outstanding.4,000,000 shares. This current plan has no expiration date.5351 -10.1Kearny Bank Amended and Restated Change in Control Severance Pay PlanMarchDecember 31, 2022, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.5452 -KEARNY FINANCIAL CORP. KEARNY FINANCIAL CORP.May 6, 2022February 7, 2023 /s//s/ Craig L. Montanaro (Principal(Principal Executive Officer)May 6, 2022February 7, 2023 /s//s/ Keith Suchodolski (Principal(Principal Financial and Accounting Officer)5553 -