As filed with the Securities and Exchange Commission on March 17,April 6, 2020

RegistrationNo. 333-          333-237236

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 1

TO THE

FORMS-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

KEARNY FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

120 Passaic Avenue

Fairfield, New Jersey 07004

(973)244-4500

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Craig L. Montanaro

President and Chief Executive Officer

120 Passaic Avenue

Fairfield, New Jersey 07004

(973)244-4500

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

Approximate date of commencement of proposed sale to the public:As soon as practicable after this registration statement becomes effective and upon completion of the merger.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule13e-4(i) (Cross-Border Issuer Tender Offer)   ☐

Exchange Act Rule14d-1(d) (Cross-Border Third-Party Tender Offer)   ☐

CALCULATION OF REGISTRATION FEE

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Information contained in this proxy statement/prospectus is subject to completion or amendment. A registration statement relating to the shares of Kearny Financial Corp. common stock to be issued has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

PRELIMINARY PROXY STATEMENT/PROSPECTUS,

SUBJECT TO COMPLETION, DATED MARCH 17,APRIL 6, 2020

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

Dear MSB Financial Stockholder:

On December 18, 2019, Kearny Financial Corp. (which we refer to as “Kearny”) and MSB Financial Corp. (which we refer to as “MSB”) entered into an Agreement and Plan of Merger (which we refer to as the “merger agreement”) under which MSB will merge with and into Kearny, with Kearny remaining as the surviving entity. This transaction is referred to in this document as the “merger.” Immediately following the merger, Millington Bank, the wholly-owned subsidiary of MSB, will merge with and into Kearny Bank, the wholly-owned subsidiary of Kearny, with Kearny Bank as the surviving entity. This transaction is referred to in this document as the “bank merger.” Before we complete the merger, the stockholders of MSB must approve the merger agreement and the merger.

If the merger is completed, MSB stockholders will be entitled to receive, at their election, for each share of MSB common stock they own, either 1.30 shares of Kearny common stock (the “stock consideration”) or $18.00 in cash (the “cash consideration,” and collectively with the stock consideration, the “merger consideration”) or a combination thereof, provided that, in the aggregate, 90% of the total number of shares of MSB common stock will be converted into stock consideration and the remaining MSB common stock will be converted into cash consideration. The maximum number of shares of Kearny common stock estimated to be issuable upon completion of the merger is 6,066,350. Based on Kearny’s closing price of $14.10 on December 17, 2019, which was the last trading date preceding the public announcement of the proposed merger, each share of MSB common stock exchanged for 1.30 shares of Kearny common stock would have a value of $18.33, or approximately $94.0 million in aggregate merger consideration. Based on Kearny’s closing price of $[●]$8.32 on [●],March 25, 2020, which is the most recent practicable trading day prior to the date of the attached proxy statement/prospectus, each share of MSB common stock exchanged for 1.30 shares of Kearny common stock would have a value of $[●].$10.82. The common stock of Kearny trades on the Nasdaq Global Market under the symbol “KRNY.” The common stock of MSB trades on the Nasdaq Global Market under the symbol “MSBF.” The market price of both Kearny common stock and MSB common stock will fluctuate before the completion of the merger; therefore, you are urged to obtain current market quotations for Kearny common stock and MSB common stock.

Although the number of shares of Kearny common stock that holders of MSB common stock will be entitled to receive is fixed, the market value of the stock consideration will fluctuate with the market price of Kearny common stock and will not be known at the time MSB stockholders vote on the merger. However, MSB has the right to terminate the merger agreement if, at any time during afive-day period commencing on the tenth day prior to closing, the average closing price of Kearny common stock over the 20 consecutive trading days prior to the tenth day prior to closing (i) is less than $11.28 and (ii) fails to meet certain comparison thresholds relative to the NASDAQ Bank Index. If MSB elects to exercise this termination right, then Kearny has the option to override the proposed termination by increasing the exchange ratio to a level that would eliminate the effects of either of the two requirements of this termination right.

The affirmative vote of a majority of the issued and outstanding shares of MSB common stock is required to approve the merger agreement and the merger. MSB stockholders will vote to adopt the merger agreement and the merger and on the other matters described below at a special meeting of stockholders to be held as a virtual meeting only at [●]:11:00 [●].m.a.m., local time,Eastern Time, on [●], 2020 atMay 28, 2020. This virtual meeting will be in the Grain House at The Olde Mill Inn, 225 Route 202 North, Basking Ridge, New Jersey 07920.form of a live webcast and will permit attendance electronically only, there will be no physical meeting location.

MSB’s board of directors unanimously recommends that MSB common stockholders vote “FOR” the adoption of the merger agreement and the merger and “FOR” the other matters to be considered at the MSB special meeting.

This document contains information that you should consider in evaluating the proposed merger. In particular, you should carefully read the section captioned “Risk Factors” beginning on page 1213 for a discussion of certain risk factors relating to the merger. You can also obtain information about Kearny and MSB from documents filed with the Securities and Exchange Commission.

We look forwardinvite you to seeing you at theparticipate in our virtual stockholders meeting and we appreciate your continued support.

The shares of Kearny common stock to be issued in the merger are not deposits or savings accounts or other obligations of any bank or savings association subsidiary of Kearny or MSB, and are not insured by the FDIC or any other governmental agency.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the merger described in this document or the Kearny common stock to be issued in the merger, or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offense.

The date of this proxy statement/prospectus is [●], 2020, and it is first being mailed or otherwise delivered to stockholders of MSB on or about [●],April 22, 2020.

ABOUT THIS DOCUMENT

This proxy statement/prospectus, which we refer to as “this document,” which forms part of a registration statement on FormS-4 filed with the Securities and Exchange Commission (the “SEC”) by Kearny, constitutes a prospectus of Kearny under the Securities Act of 1933, as amended, which we refer to in this document as the “Securities Act,” with respect to the shares of Kearny common stock to be issued to MSB stockholders, as required by the merger agreement. This document also constitutes a proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended, which we refer to in this document as the “Exchange Act,” and a notice of virtual meeting in the form of a live webcast with respect to the special meeting of stockholders of MSB.

You should rely only on the information contained in, or incorporated by reference into, this document. No one has been authorized to provide you with information that is different from the information contained in this document. This document is dated [●], 2020. You should not assume that the information contained in this document is accurate as of any date other than that date. Neither the mailing of this document to MSB stockholders nor the issuance by Kearny of its common stock in connection with the merger will create any implication to the contrary.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this document regarding Kearny has been provided by Kearny and information contained in this document regarding MSB has been provided by MSB.

MSB FINANCIAL CORP.

1902 Long Hill Road

Millington, New Jersey 07946-0417

Notice of Virtual Special Meeting of Stockholders to be held [●],May 28, 2020

This meeting will be held electronically only; There will be no physical meeting location.

To the Stockholders of MSB:

MSB will hold a virtual special meeting of stockholders (which we refer to as the “MSB special meeting”) at [●] local time,11:00 a.m. Eastern Time, on [●],May 28, 2020, at the Grain House at The Olde Mill Inn, 225 Route 202 North, Basking Ridge, New Jersey 07920 to consider and vote upon the following matters:

All of these items are described in more detail in the accompanying proxy statement/prospectus and its annexes. We urge you to read these materials carefully and in their entirety. The enclosed document forms a part of this notice.

MSB’s board of directors unanimously recommends that MSB stockholders vote “FOR” each of the proposals.

MSB stockholders of record as of the close of business on [●]March 25, 2020 are entitled to notice of, and to vote at, the MSB special meeting and any adjournments or postponements of the MSB special meeting.

Shareholders will be able to attend this special meeting in the form of a live webcast, to listen to the meeting, vote, and submit questions for discussion at the meeting from their home, office or any remote location that has Internet connectivity. There will be no physical location for shareholders to attend. In order to participate in this MSB special meeting, you will need to access www.meetingcenter.io/295836689 and enter your control number found on your proxy card, voting form or notice you previously received. The meeting password is: MSBF2020. As noted below, you may vote your shares in advance of the MSB special meeting by mail, by internet or by phone. You may also vote during the meeting by following the instructions available on the meeting website during the meeting. Whether or not you plan to attend the MSB special meeting electronically, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described below. NOTE: If you need technical assistance accessing this webcast before or during the meeting, please access on the Internet https://support.vevent.com/.

Your vote is very important. Your proxy is being solicited by MSB’s board of directors. For the proposed merger to be completed, the proposal to approve the merger agreement and the merger must be approved by the affirmative vote of a majority of the issued and outstanding shares of MSB common stock. The merger-related compensation proposal will be approved if a majority of the votes cast on such proposal at the MSB special meeting are voted in favor of such proposal. The MSB adjournment proposal will be approved if a majority of the votes cast on such proposal at the MSB special meeting are voted in favor of such proposal.

Whether or not you plan to attend the MSB special meeting, we urge you to vote. Stockholders of record may vote:

If you hold your stock in “street name” through a banker or broker, please follow the instructions on the voting instruction card furnished by the record holder.

If you have any questions or need assistance voting your shares in advance of the meeting, please contact our proxy solicitor, Laurel Hill Advisory Group, LLC, toll free at [●] .(888) 742-1305, toll-free. Banks and Brokers, please call (516) 933-3100.

Millington, New Jersey

[●],April 22, 2020

REFERENCES TO AVAILABLE INFORMATION

This document incorporates important business and financial information about Kearny from documents filed with the SEC that have not been included in or delivered with this document. This information is also available at the Internet site the SEC maintains athttp://www.sec.gov.See “Where You Can Find More Information” on page 88.110.

You also may request orally or in writing copies of these documents at no cost by contacting Kearny at the following address:

Kearny Financial Corp.

120 Passaic Avenue,

Fairfield, New Jersey 07004

Attention: Gail Corrigan, Corporate Secretary

Telephone:(973) 244-4500

If you are an MSB stockholder and would like to request documents from Kearny, please do so by [•],May 20, 2020 to receive them before the stockholder meeting.

This document is also available on Kearny’s website at www.kearnybank.com under “Investor Relations” and on MSB’s website at www.millingtonbank.com under the tab “About Us” under “Investor Relations.” The information on Kearny’s and MSB’s websites is not part of this document. References to Kearny’s and MSB’s websites in this document are intended to serve as textual references only.

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

The following are answers to certain questions that you may have regarding the merger or the MSB special meeting. We urge you to read carefully the remainder of this document because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to, and the documents incorporated by reference in this document.

In order to approve the merger agreement and the merger, MSB has called a virtual special meeting of its stockholders (which we refer to as the “MSB special meeting”). This document also serves as a notice of the MSB special meeting, and describes the proposals to be presented at the MSB special meeting.

You should read this document carefully and in its entirety. The enclosed materials allow you to have your shares voted by proxy without attending your special meeting.Your vote is important. We encourage you to submit your proxy as soon as possible.

common stock for the 10 trading days ending on the third business day preceding the closing date of the merger by the fraction of a share (rounded to the nearest cent) of Kearny common stock that such stockholder would otherwise be entitled to receive.

Q:	HOW WILL THE MERGER AFFECT MSB EQUITY AWARDS?

Stock Options: At the effective time of the merger, each option to purchase shares of MSB common stock outstanding immediately before the effective time of the merger, whether or not vested, will be canceled and, upon MSB’s receipt of an option surrender agreement from the holder, exchanged for a cash payment equal to the product of (1) the number of shares of MSB common stock subject to the stock option multiplied by (2) the amount by which $18.00 exceeds the exercise price of such option, less applicable withholding taxes.

Restricted Stock Awards: At the effective time of the merger, each outstanding share of restricted stock will vest and be converted into the right to receive the merger consideration.

Q.	CAN I CHANGE MY ELECTION AFTER THE FORM OF ELECTION HAS BEEN SUBMITTED?

Q:	ARE THERE RISKS THAT I SHOULD CONSIDER IN DECIDING WHETHER TO VOTE TO APPROVE THE MERGER AGREEMENT AND THE MERGER?

Approval of the merger-related compensation proposal and the MSB adjournment proposal require that the votes cast in favor of each such proposal exceed the votes cast against such proposal. Abstentions and brokernon-votes will not affect the outcome of such proposals.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the meeting virtually on the Internet.

To register to attend the meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your MSB holdings along with your name and email address to Computershare. Requests for meeting registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on May 22, 2020.

You will receive a confirmation of your registration to attend the meeting by email after we receive your registration materials.

Requests for registration should be directed to us at the following:

By email:

Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com

By mail:

Computershare

MSB Financial Legal Proxy

P.O. Box 43001

Providence, RI 02940-3001

Please refer to the specific instructions set forth on the proxy card. We encourage you to vote via the internet or by telephone.

bank or other nominee provides. If you do not provide instructions to your broker, bank or other nominee, your shares will not be voted, and this will have the effect of voting “against” the merger agreement and the merger. Please review the instructions from your broker, bank or other nominee to see if your broker, bank or other nominee offers telephone or internet voting.

If you hold your shares of MSB common stock in “street name” through a bank or broker, you should contact your bank or broker to change your vote or revoke your proxy.

Q:

If your shares are held in “street name,” you must vote your shares according to the voting instructions form by the deadline set by your broker, bank or other nominee.

You should read“Description of the Merger—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page []77 of this document for more information about the United States federal income tax consequences of the merger. Tax matters can be complicated and the tax consequences of the merger to you will depend on your particular tax situation. You should consult your tax advisor to determine the tax consequences of the merger to you.

Q:	HOW DO I VOTE IF I OWN SHARES THROUGH THE MILLINGTON BANK EMPLOYEE STOCK OWNERSHIP PLAN AND/OR THE MILLINGTON BANK 401(K) SAVINGS PLAN?

The deadline for returning your Voting Instruction Form to each plan’s trustee is [●], 2020.May 22, 2020 at 4:00 p.m. Eastern Time.

Laurel Hill Advisory Group LLC at [](888) 742-1305 (toll-free); Banks and Brokers, please call (516) 933-3100

RISK FACTORS

In deciding how to vote, you should consider carefully all of the information included in this document and its annexes and all of the information incorporated by reference and the risk factors identified by Kearny and MSB with respect to their operations included in their filings with the SEC, including Kearny’s Annual Report onForm 10-K for the year ended June 30, 2019 and MSB’s Annual Report on Form10-K for the year ended December 31, 2019. See “Where You Can Find More Information.” In addition, you should consider the following risk factors.

Because the price of Kearny common stock will fluctuate, MSB stockholders cannot be certain of the market value of the merger consideration.

Upon the completion of the merger, each share of MSB common stock outstanding immediately prior to the completion of the merger will be converted into the right to receive either 1.30 shares of Kearny common stock or $18.00, or a combination thereof, provided that, in the aggregate, 90% of the total number of MSB common stock will be converted into stock consideration and the remaining MSB common stock will be converted into cash consideration. The market value of the merger consideration may vary from the closing price of Kearny common stock on the date we announced the execution of the merger agreement, on the date that this document was mailed to MSB stockholders, on the date of the MSB special meeting and on the date we complete the merger. The market price of Kearny common stock may fluctuate as a result of a variety of factors, including general market and economic conditions, changes in Kearny’s business, operations and prospects, and regulatory considerations. Therefore, at the time of the MSB special meeting, MSB stockholders will not know or be able to calculate the market value of the Kearny common stock they will receive upon completion of the merger. For example, based on the range of closing prices of Kearny common stock during the period from December 17, 2019, the last trading day before public announcement of the merger, through [●],March 25, 2020, the last practicable date before the date of this document, the merger consideration represented a market value ranging from a low of $[●]$10.05 to a high of $[●]$18.33 for each share of MSB common stock. You should obtain current market quotations for shares of Kearny common stock and MSB common stock. See “Market Price and Dividend Information” on page 85107 for ranges of historic market prices of Kearny common stock and MSB common stock.

MSB stockholders may receive a form of merger consideration different from what they elect.

Although each MSB stockholder may elect to receive either the cash consideration or the stock consideration, or a combination of both, in the merger, the merger agreement provides that the total number of shares of MSB common stock (including MSB restricted stock awards) to be entitled to receive the cash consideration shall be capped. As a result, depending on the elections made by other MSB stockholders, an MSB stockholder might receive a portion of the merger consideration in the form such holder did not elect. Moreover, if an MSB stockholder does not submit a properly completed and signed form of electionElection Form by the election deadline,Election Deadline, then such holder will have no control over the type of merger consideration such holder may receive. Accordingly, electing one form of merger consideration will not guarantee you will receive that form of merger consideration for all of your shares of MSB common stock, and proration may be necessary. See “The Merger Agreement—Merger Consideration” for a more detailed explanation of the cap on the cash consideration, the election procedures, the election deadlines,Election Deadline, and proration.

The price of Kearny common stock might decrease after the merger.

Upon completion of the merger, holders of MSB common stock will become stockholders of Kearny. Kearny common stock could decline in value after the merger. For example, during the twelve-month period ending on [●]March 25, 2020 (the most recent practicable date before the printing of this document), the closing price of Kearny common stock varied from a low of $[●]$7.73 to a high of $[●]$14.31 and ended that period at $[●].$8.32. The market value of Kearny common stock fluctuates based upon general market conditions, Kearny’s business, operations and prospects and other factors. Further, the market price of Kearny common stock after the merger may be affected by factors different from those currently affecting the common stock of Kearny or MSB. The businesses of MSB and Kearny differ and, accordingly, the results of operations of the combined company and the market price of the combined company’s shares of common stock may be affected by factors different from those currently affecting the independent results of operations and market prices of common stock of each of MSB and Kearny. For a discussion of the businesses of MSB and Kearny and of certain factors to consider in connection with those businesses, see the documents incorporated by reference in this document and referred to under“Where You Can Find More Information” beginning on page 88110 and“Information About MSB Financial Corp” beginning on page ___.23.

MSB and Kearny will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainty about the effects of the merger on employees and customers may have an adverse effect on MSB or Kearny. These uncertainties may impair MSB’s or Kearny’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that interact with MSB or Kearny to seek to change existing business relationships with MSB or Kearny. Retention of certain employees by MSB or Kearny may be challenging while the merger is pending, as certain employees may experience uncertainty about their future roles with the combined company. If key employees depart because of issues relating to the uncertainty and difficulty of integration, or a desire not to remain with MSB or Kearny, MSB’s business or Kearny’s business could be harmed. In addition, subject to certain exceptions, MSB has agreed to operate its business in the ordinary course prior to closing. See “Description of the Merger—Conduct of Business Before the Merger” for a description of the restrictive covenants applicable to MSB and Kearny.

Failure to complete the merger could negatively impact the stock prices and future businesses and financial results of Kearny and MSB.

There can be no assurance that the merger will be completed. If the merger is not completed, the ongoing businesses of Kearny and MSB may be adversely affected and Kearny and MSB will be subject to a number of risks, including the following:

In addition, if the merger is not completed, Kearny and/or MSB may experience negative reactions from the financial markets and from their respective customers and employees. Kearny and/or MSB also could be subject to litigation related to any failure to complete the merger or to proceedings commenced by Kearny or MSB against the other seeking damages or to compel the other to perform its obligations under the merger agreement. These factors and similar risks could have an adverse effect on the results of operation, business and stock prices of Kearny and MSB.

Kearny may be unable to successfully integrate MSB’s operations or retain MSB’s employees, which could adversely affect the combined company.

The merger involves the integration of two companies that have previously operated independently. The difficulties of combining the operations of the two companies include, among other things: integrating personnel with diverse business backgrounds; combining different corporate cultures; and retaining key employees.

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of the business and the loss of key personnel. The integration of the two companies will substantially benefit from the experience and expertise of certain key employees of MSB who are expected to be retained by Kearny. Kearny may not be successful in retaining these employees for the time period necessary to successfully integrate MSB’s operations with those of Kearny. The diversion of management’s attention and any delays or difficulties encountered in connection with the merger and the integration of the two companies’ operations could have an adverse effect on the business and results of operations of Kearny following the merger.

Additionally, Kearny may not be able to successfully achieve the level of cost savings, revenue enhancements and other synergies that it expects, and may not be able to capitalize upon the existing customer relationships of MSB to the extent anticipated, or it may take longer, or be more difficult or expensive than expected, to achieve these goals. These matters could have an adverse effect on Kearny’s business, results of operation and stock price.

The termination fee and the restrictions on solicitation contained in the merger agreement may discourage other companies from trying to acquire MSB.

Until the completion of the merger, with some exceptions, MSB is prohibited from soliciting, initiating, encouraging or participating in any discussion of or otherwise considering any inquiry or proposal that may lead to an acquisition proposal, such as a merger or other business combination transactions, with any person other than Kearny. In addition, MSB has agreed to pay a $3.54 million termination fee to Kearny in specified circumstances. These provisions could discourage other companies that may have an interest in acquiring MSB from considering or proposing such an acquisition even though those other companies might be willing to offer greater value to MSB’s stockholders than Kearny has offered in the merger. The payment of the termination fee could also have a material adverse effect on MSB’s financial condition.

Certain of MSB’s officers and directors have interests that are different from, or in addition to, interests of MSB stockholders generally.

The directors and certain officers of MSB have interests in the merger that are different from, or in addition to, the interests of MSB stockholders generally. These include: (1) change in control agreements for certain officers of MSB and Millington Bank that provide for cash severance payments upon a termination without just cause or a termination with good reason within twenty-four months following the completion of the merger; (2) a cash payment in connection with the termination of all outstanding MSB stock options; (3) the acceleration of vesting of all outstanding restricted stock awards; (4) a settlement agreement entered into with each of Messrs. Shriner, Russell, Bailey, Ms. Schmitz and one other officer concurrent with the execution of the merger agreement; and (5) provisions in the merger agreement relating to indemnification of directors and officers and insurance for directors and officers of MSB for events occurring before the merger.

For a more detailed discussion of these interests, see “Description of the Merger—Interests ofMSB’s Directors and Executive Officers in the Merger” beginning on page 59.81.

MSB stockholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management of the combined organization.

Each of Kearny and MSB stockholders currently have the right to vote in the election of their respective boards of directors and on various other matters affecting their respective companies. Upon the completion of the merger, MSB’s stockholders will become stockholders of Kearny with a percentage ownership of the combined organization that is substantially smaller than such stockholders’ percentage ownership of MSB. Further, because shares of Kearny common stock will be issued to existing MSB stockholders, the stockholders of Kearny common stock will have their ownership and voting interests diluted by approximately 6%.

The shares of Kearny common stock to be received by MSB stockholders as a result of the merger will have different rights from shares of MSB common stock.

Following completion of the merger, MSB stockholders will no longer be stockholders of MSB but will instead be stockholders of Kearny. There are differences between the current rights of MSB stockholders and the rights of Kearny stockholders that may be important to MSB stockholders. See “Comparison of Rights ofStockholders” beginning on page 7799 for a discussion of the different rights associated with Kearny common stock and MSB common stock.

The fairness opinion to the board of directors of MSB rendered on the date of the signing of the merger agreement does not reflect any changes in circumstances after the date of such fairness opinion.

FCA delivered to the board of directors of MSB its opinion on December 18, 2019. The opinion does not reflect changes that may occur or may have occurred after the date of such opinion, including changes to the operations and prospects of Kearny or MSB, changes in general market and economic conditions or regulatory or other factors that may materially alter or affect the value of Kearny common stock or MSB common stock. The opinion speaks only as of the date on which it was rendered and not as of the date of this proxy statement/prospectus or any other date.

There is no assurance when or even if the merger will be completed.

Completion of the merger is subject to satisfaction or waiver of a number of conditions. See “Description of the Merger—Conditions to Completing the Merger” beginning on page 60.84. There can be no assurance that Kearny and MSB will be able to satisfy the closing conditions or that closing conditions beyond their control will be satisfied or waived.

Kearny and MSB can agree at any time to terminate the merger agreement, even if MSB stockholders have already voted to approve the merger agreement and the merger. Kearny and MSB can also terminate the merger agreement under other specified circumstances.

Regulatory approvals may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the merger.

Before the merger and the bank merger may be completed, Kearny and MSB must obtain approvals (or waivers) from the Federal Reserve, the FDIC and the NJDBI. Other approvals, waivers or consents from regulators may also be required. In determining whether to grant these approvals (or waivers) the regulators consider a variety of factors, including the regulatory standing of each party. An adverse development in either party’s regulatory standing or other factors could result in an inability to obtain approval or delay their receipt. These regulators may impose conditions on the completion of the merger or the bank merger or require changes to the terms of the merger or the bank merger. Such conditions or changes could have the effect of delaying or preventing completion of the merger or the bank merger or imposing additional costs on or limiting the revenues of the combined company following the merger and the bank merger, any of which might have an adverse effect on the combined company following the merger.

Goodwill incurred in the merger may negatively affect Kearny’s financial condition.

To the extent that the merger consideration, consisting of shares of Kearny common stock to be issued in the merger, exceeds the fair value of the net assets, including identifiable intangibles of MSB, that amount will be reported as goodwill by Kearny. In accordance with current accounting guidance, goodwill will not be amortized but will be evaluated for impairment annually. A failure to realize expected benefits of the merger could adversely impact the carrying value of the goodwill recognized in the merger, and in turn negatively affect Kearny’s financial condition.

MSB stockholders do not have appraisal or dissenters’ rights in the merger.

Appraisal or dissenters’ rights are statutory rights that, if applicable under law, enable stockholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in that extraordinary transaction. Under the Maryland General Corporation Law, and pursuant to MSB’s articles of incorporation, holders of MSB common stock are not entitled to appraisal rights in the merger with respect to their shares of MSB common stock because MSB common stock is listed on a national securities exchange and MSB’s articles of incorporation do not provide for appraisal rights unless specifically granted by MSB’s board of directors.

The recent global coronavirus outbreak may pose risks and could harm business and results of operations for each of Kearny and MSB and the combined company following the completion of the merger.

In December 2019, a coronavirus(COVID-19) was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. Since first being reported in China, the coronavirus has spread to additional countries including the United States. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the coronavirus outbreak on businesses of Kearny, MSB and the combined company, and there is no guarantee that efforts by Kearny, MSB and the combined company to address the adverse impacts of the coronavirus will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others.

The ultimate risk posed by coronavirus remains highly uncertain; however, reports as of the date of this proxy statement/prospectus suggestthat COVID-19 spreads more quickly and has a higher mortality ratethan flu-like epidemics of the recentpast. COVID-19 therefore poses a material risk to the business, financial condition and results of operations of both Kearny and MSB, and potentially could create risks for the combined company, including:

These factors, together or in combination with other events or occurrences not yet known or anticipated, could adversely affect the value of the merger consideration or could delay or prevent the consummation of the merger and the related transactions. If Kearny or MSB is unable to recover from a business disruption on a timely basis, the merger and the combined company’s business and financial conditions and results of operations following the completion of the merger could be adversely affected. The merger and efforts to integrate the businesses of Kearny and MSB may also be delayed and adversely affected by the coronavirus outbreak, and become more costly. Each of Kearny, MSB and the combined company may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect its financial condition and results of operations.

Risks Relating to Kearny’s Business

You should read and consider risk factors specific to Kearny’s business that will also affect the combined company after the merger. These risks are described in the sections entitled “Risk Factors” in Kearny’s Annual Report on Form10-K for the fiscal year ended June 30, 2019 and in other documents incorporated by reference into this document. Please see the section entitled “Where You Can Find More Information” beginning on page 88110 of this document for the location of information incorporated by reference into this document. In addition, you should consider the following Risk Factor:

Acts of terrorism, severe weather, natural disasters, pandemics, public health issues and other external events could impact our ability to conduct business.

Our business is subject to risk from external events that could affect the stability of our deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenue, and/or cause us to incur additional expenses. For example, financial institutions have been, and continue to be, targets of terrorist threats aimed at compromising their operating and communication systems. The metropolitan New York area remains a central target for potential acts of terrorism, including cyber terrorism, which could affect not only our operations but those of our customers. Additionally, there could be sudden increases in electrical, telecommunications or other major physical infrastructure outages, natural disasters, the emergence of widespread health emergencies or pandemics, events arising from local or larger scale political or social matters, including terrorist acts, and cyber attacks. Events such as these may become more common in the future and could cause significant damage, such as disrupt power and communication services, impact the stability of our facilities and result in additional expenses, impair the ability of our borrowers to repay their loans, reduce the value of collateral securing the repayment of our loans, which could result in the loss of revenue. While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition.

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

Some of the statements contained or incorporated by reference in this document are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 giving Kearny’s or MSB’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “projections,” “prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may,” or by variations of such words or by similar expressions. Such forward-looking statements include, but are not limited to, statements about the benefits of the merger or the bank merger, including future financial and operating results of Kearny, MSB or the combined company following the merger, the combined company’s plans, objectives, expectations and intentions, the expected timing of the completion of the merger, financing plans and the availability of capital, the likelihood of success and impact of litigation and other statements that are not historical facts. These statements are only predictions based on Kearny’s and MSB’s current expectations and projections about future events. There are important factors that could cause Kearny’s and MSB’s actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties described in the section entitled “Risk Factors” beginning on page 14.13.

These forward-looking statements are subject to numerous assumptions, risks, and uncertainties which change over time. In addition to factors previously disclosed in Kearny’s and MSB’s reports filed with the SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements:

Additionally, the timing and occurrence ornon-occurrence of events may be subject to circumstances beyond Kearny’s or MSB’s control.

Annualized, pro forma, projected and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results.

For any forward-looking statements made in this document or in any documents incorporated by reference into this document, Kearny and MSB claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this document or the date of the applicable document incorporated by reference in this document. Except to the extent required by applicable law, Kearny and MSB do not undertake to update forward-looking statements to reflect facts, circumstances, assumptions, or events that occur after the date the forward-looking statements are made. All written and oral forward-looking statements concerning the merger or other matters addressed in this document and attributable to Kearny, MSB, or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this document.

SELECTED HISTORICAL FINANCIAL AND OTHER DATA OF KEARNY FINANCIAL CORP.

The following tables present selected historical consolidated financial data for Kearny as of and for each of the years ended June 30, 2019, 2018, 2017, 2016 and 2015. This information has been derived in part from and should be read in conjunction with the audited consolidated financial statements of Kearny. The following table also presents selected historical consolidated financial data for Kearny as of and for each of the six months ended December 31, 2019 and December 31, 2018. This information has been derived in part from and should be read in conjunction with the unaudited consolidated financial statements of Kearny. You should read this information in conjunction with the historical financial statements of Kearny and the related notes, including those contained in Kearny’s Annual Report on Form10-K for the year ended June 30, 2019 and in Kearny’s Quarterly Report on Form10-Q for the period ended December 31, 2019, each of which is incorporated by reference in this document.

		For the six months ended December 31,								For the Years Ended June 30
		2019				2018				2019				2018				2017				2016				2015
		(in thousands, except per share and ratio amounts)
Per Share Data:
Net income per share—Basic and diluted		$	0.26			$	0.23			$	0.46			$	0.24			$	0.22			$	0.18			$	0.06
Weighted average number of common shares outstanding (in thousands):
Basic			83,794				93,780				91,054				82,587				84,590				89,591				91,717
Diluted			83,835				93,831				91,100				82,643				84,661				89,625				91,841
Cash dividends per share		$	0.13			$	0.25			$	0.37			$	0.25			$	0.10			$	0.08			$	—
Dividend payout ratio(1)			49.06	%			107.17	%			80.75	%			102.87	%			44.99	%			45.28	%			—	%

UNAUDITED COMPARATIVE PRO FORMA PER SHARE DATA

The following table shows information about Kearny’s and MSB’s earnings per common share, dividends per share and book value per share, and similar information giving effect to the merger (which we refer to as “pro forma” information). In presenting the unaudited comparative pro forma information as of and for the periods shown, we assumed that Kearny and MSB had been merged on the date indicated or at the beginning of the periods presented, as applicable. The pro forma balance sheet information presented below combines the historical balance sheet data of Kearny and MSB as of December 31, 2019. Kearny and MSB have different fiscal years. MSB’s fiscal year ends on December 31 of each year and Kearny’s fiscal year ends on June 30 of each year. As the fiscal years differed by more than 93 days, pursuant to SEC rules, MSB’s financial information was adjusted for the purpose of preparing the unaudited comparative pro forma information. The historical financial statement information of MSB used in the historical and pro forma combined share data for the six months ended December 31, 2019 was prepared by taking the audited income statement for the year ended December 31, 2019 and subtracting the unaudited condensed combined income statement for the six months ended June 30, 2019. The historical financial statement information of MSB used in the historical and pro forma combined share data for the year ended June 30, 2019combines the historical income statement data of Kearny and MSB for the years ended June 30, 2019 and December 31, 2019, respectively.

The information listed as “pro forma combined” was prepared using an exchange ratio of 1.30. The information listed as “per equivalent MSB share” was obtained by multiplying the pro forma amounts by an exchange ratio of 1.30. Kearny anticipates that the combined company will derive financial benefits from the merger that include the opportunity to earn more revenue. The unaudited pro forma combined information, while helpful in illustrating the financial characteristics of Kearny following the merger under one set of assumptions, does not reflect these benefits and, accordingly, does not attempt to predict or suggest future results. The unaudited pro forma combined information also does not necessarily reflect what the historical results of Kearny would have been had our companies been combined during this period.

The information in the following table is based on, and should be read together with, the historical financial information that we have presented in or incorporated by reference in this document.

INFORMATION ABOUT MSB FINANCIAL, INC.

BUSINESS OF MSB

General

MSB is a Maryland-chartered corporation organized in 2014 to be the successor to MSB Financial Corp., a federal corporation (“Old MSB”) upon completion of the second-step conversion of Millington Bank from thetwo-tier mutual holding company structure to the stock holding company structure. MSB Financial, MHC (the “MHC”) was the former mutual holding company for Old MSB prior to completion of the second-step conversion. In conjunction with the second-step conversion, each of the MHC and Old MSB ceased to exist. The second-step conversion was completed on July 16, 2015 at which time MSB sold 3,766,592 shares of its common stock (including 150,663 shares purchased by Millington Bank’s employee stock ownership plan) at $10.00 per share for gross proceeds of approximately $37.7 million. Expenses related to the stock offering totaled $1.5 million and were netted against proceeds. As part of the second-step conversion, each of the outstanding shares of common stock of Old MSB held by persons other than the MHC were converted into 1.1397 shares of Company common stock with cash paid in lieu of fractional shares. As a result, a total of 2,187,242 shares were issued in exchange for Old MSB shares in the second-step conversion.

MSB’s principal business is the ownership and operation of Millington Bank. Millington Bank is a New Jersey-chartered stock savings bank and its deposits are insured by the FDIC. The primary business of Millington Bank is attracting retail deposits from the general public and using those deposits together with funds generated from operations, principal repayments on securities and loans and borrowed funds, for its lending and investing activities. Millington Bank’s loan portfolio primarily consists ofone-to-four family and home equity residential loans, commercial loans, and construction loans. It also invests in U.S. government obligations and mortgage-backed securities. Millington Bank is regulated by the NJDBI and the FDIC. The Federal Reserve regulates MSB as a bank holding company.

In accordance with the provisions of the Exchange Act, MSB is the successor issuer to Old MSB and all financial data included herein up through the completion of the second-step conversion is that of Old MSB.

Change in Fiscal Year End

Effective November 17, 2014, MSB changed its fiscal year end from June 30 to December 31.

Competition

MSB operates in a market area with a high concentration of banking and other financial institutions, and faces substantial competition in attracting deposits and in originating loans. A number of MSB’s competitors are significantly larger institutions with greater financial and managerial resources and lending limits. MSB’s ability to compete successfully is a significant factor affecting MSB’s growth potential and profitability.

MSB’s competition for deposits and loans historically has come from other insured financial institutions such as local and regional commercial banks, savings institutions, and credit unions located in MSB’s primary market area. MSB also competes with mortgage banking and finance companies for real estate loans and with commercial banks and savings institutions for consumer loans, and faces competition for funds from investment products such as mutual funds, short-term money funds and corporate and government securities. There are large competitors operating throughout MSB’s total market area, and MSB also faces strong competition from other community-based financial institutions.

Lending Activities

MSB has traditionally focused on the origination ofone- to four-family loans and home equity loans and lines of credit, which together comprise a sizable portion of the total loan portfolio. During the past two years, MSB has significantly grown its commercial real estate portfolio, which includes multi-family dwellings/apartment buildings, service/retail andmixed-use properties, churches andnon-profit properties, medical and dental facilities and other commercial real estate. Additionally, MSB originates residential and commercial construction loans and commercial and industrial loans. MSB’s consumer loans are comprised of automobile loans, personal loans, account loans and overdraft lines of credit.

Loan Portfolio Composition. The following tables analyze the composition of MSB’s loan portfolio by loan category at the dates indicated. Except as set forth below, there were no concentrations of loans exceeding 10% of total loans.

Loan Maturity Schedule. The following table sets forth the maturity of MSB’s loan portfolio at December 31, 2019. Demand loans, loans having no stated maturity, and overdrafts are presented as due in one year or less. The construction loans presented in the table as of December 31, 2019 are net of $16.1 million of undistributed amounts. The table presents contractual maturities and does not reflect repricing or the effect of prepayments. Actual maturities may differ.

The following table sets forth the dollar amount of all loans due after December 31, 2020, which have fixed interest rates and which have floating or adjustable interest rates.

One- to Four-Family Real Estate Mortgages. Historically, the primary focus of MSB’s lending activity was the origination ofone- to four-family first mortgage loans. MSB continues to offer fixed rate, conventional mortgage loans with terms from 5 to 30 years.

MSB also originates adjustable rate mortgages, or ARMs, with up to 30 year terms at rates based upon the U.S. Treasury One Year Constant Maturity as an index. MSB’s ARMs currently reset on an annual basis, beginning with the first year, and have a 200 basis point annual increase cap and a 600 basis point lifetime adjustment cap. MSB does not originate “teaser” rate or negative amortization loans.

MSB is also offering a loan program whereby it offers an initial rate for a fixed period of time, normally 5 to 10 years, and thereafter there is one preset interest rate adjustment based on competitive rates.

Substantially all residential mortgages include “due on sale” clauses, which are provisions giving MSB the right to declare a loan immediately payable if the borrower sells or otherwise transfers an interest in the property to a third party. Property appraisals on real estate securingone-to four-family residential loans are made by state certified or licensed independent appraisers and are performed in accordance with applicable regulations and policies. MSB requires title insurance policies on all first lienone-to four-family residential loans and all home equity loans over $250,000. Homeowners, liability, fire and, if applicable, flood insurance policies are also required.

MSB provides financing on residential investment properties with 5 to 30 year fixed duration mortgages. MSB’s investment property lending product is available to individuals or proprietorships, partnerships, limited liability corporations, and corporations with personal guarantees. All investment property is underwritten on its ability substantially to carry itself, unless the property is atwo-family residence with the mortgagor living in one of the units. Preference is given to those loans where rental income covers all operating expenditures, including but not limited to principal and interest, real estate taxes, hazard insurance, utilities, maintenance, and reserve. The cash coverage ratio to cover operating expenses must be at least 1.25 times. Any negative cash flow will be included in the borrower’s total debt ratio. At December 31, 2019, investment property loans secured byone- to four-family homes totaled $34.5 million.

MSB generally originatesone-to four-family first mortgage loans for primary residences and investment properties withloan-to-value ratios ranging from 65% to 80% depending on the collateral value.

Commercial and Multi-Family Real Estate Mortgages. MSB’s commercial real estate lending includes multi-family dwellings/apartment buildings, service/retail andmixed-use properties, churches andnon-profit properties, medical and dental facilities and other commercial real estate. MSB’s commercial real estate mortgage loans are typically a 5 to 10 year balloon mortgage. Multi-family and commercial real estate loans can be amortized over 30 years with periodic rate resets or 15 year fixed duration mortgages. This type of lending is made available to proprietorships, partnerships, limited liability companies and corporations with personal guarantees and/or carve out guarantees. All commercial property loans are substantially underwritten on the ability of the underlying property to provide satisfactory cash flows. A cash flow and lease analysis is performed for each property. Preference is given to those loans where rental income covers all operating expenditures, including but not limited to principal and interest, real estate tax, hazard insurance, utilities, maintenance, and reserves. The cash coverage ratio to cover operating expenses must be at least 1.20 times for multi-family and 1.25 times for all other commercial loans. Any negative cash flow will be included in the limit on the borrower’s total debt ratio. Cash from

other assets of the borrower, who may own multiple properties and generate a surplus, can be made available to coverdebt-service shortages of the financed property. Maximumloan-to-value ratios on commercial real estate loans range from 65% to 80%.

The management skills of the borrower are judged on the basis of his/her professional experience and must be documented to meet MSB’s satisfaction in relation to the desired project. The assets of the borrower must indicate his/her ability to support the proposed investment, both in terms of liquidity and net worth, and tangible history of the borrower’s capability and experience must be evident.

Unlike single-family residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment and other income, and which are secured by real property the value of which tends to be more easily ascertainable, multi-family and commercial real estate loans typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business or rental income. As a result, the availability of funds for the repayment of commercial real estate and multi-family loans may be substantially dependent on the success of the business itself, the tenants and the general economic environment. Commercial real estate and multi-family loans, therefore, have greater credit risk thanone-to four-family residential mortgages or consumer loans. In addition, commercial real estate and multi-family loans generally result in larger balances to single borrowers, or related groups of borrowers and also generally require substantially greater evaluation and oversight efforts.

Construction Loans. MSB originates construction loans for an owner-occupied residence or to a builder with a valid contract of sale. MSB also provides financing for speculative residential or commercial construction and development with individual consideration given to builders based on their past performance, workmanship, and financial worth. MSB’s construction lending includes loans for construction or major renovations or improvements of owner-occupied residences. The portfolio consists primarily of properties held by real estate developers.

Construction loans are mortgages up to 24 months in duration. Funds are disbursed periodically upon inspections made by MSB’s inspectors on the percentage of work completed, as per the approved budget. Funds disbursed may not exceed 60% of theloan-to-value of land and 80% of theloan-to-value of improvements any time during construction. The majority of MSB’s construction loans are variable rate loans with rates tied to the prime rate published inThe Wall Street Journal, plus a premium. Millington Bank also has established a floor rate on all transactions. A minimum of interest-only payments on disbursed funds must be made on a monthly basis.

Construction lending is generally considered to involve a higher degree of credit risk than residential mortgage lending. If the estimate of construction cost proves to be inaccurate, MSB may be compelled to advance additional funds to complete the construction with repayment dependent, in part, on the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan. If MSB is forced to foreclose on a project prior to completion, there is no assurance that MSB will be able to recover the entire unpaid portion of the loan. In addition, MSB may be required to fund additional amounts to complete a project and may have to hold the property for an indeterminate period of time.

Consumer Loans. MSB’s consumer lending products consist of new and used automobile loans, secured and unsecured personal loans, account loans and overdraft lines of credit. The maximum term for a loan on a new or used automobile is six years and four years, respectively. MSB will lend up to 80% of the retail value or dealer invoice on a car loan. MSB offers a reduction on the interest rate for car loans if payments are automatically deducted from a Millington Bank checking or statement savings account.

MSB’s personal loans have terms of up to four years with a minimum and maximum balance of $1,000 and $5,000, respectively. A reduction to the interest rate is offered for loans with automatic debit repayment from a Millington Bank checking or statement savings account. MSB’s account loans permit a depositor to borrow up to 90% of his or her funds on deposit with MSB in certificate of deposit accounts. The interest rate is the current rate paid to the depositor, plus a premium. A minimum payment of interest only is required. MSB also offers an overdraft line of credit with a minimum of $500 and up to a maximum of $5,000 and an interest rate tied to the prime rate published inThe Wall Street Journal, plus a premium.

Consumer lending is generally considered to involve a higher degree of credit risk than residential mortgage lending. Consumer loan repayment is dependent on the borrower’s continuing financial stability and can be adversely affected by job loss, divorce, illness, personal bankruptcy and other factors. The application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on consumer loans in the event of a default. Account loans are fully secured.

Home Equity Loans and Lines of Credit. MSB offers fixed rate home equity loans and variable rate home equity lines of credit with a minimum credit limit of $5,000. Collateral valuation is established through a variety of methods, including anon-line appraisal valuation estimator,drive-by appraisals, recent assessed tax value, purchase price or consideration value as evidenced by a deed or property search report or a report of comparable real estate properties from a licensed realtor. Loan requests over $50,000, however, require adrive-by appraisal and amounts over $100,000 require full appraisals. Loan requests over $500,000 require Loan Committee approval. Any policy exception requires approval from the Board of Directors. Theloan-to-value limit on home equity lending varies depending on the collateral value and ranges from 65% up to 80%. The variable rate on home equity lines of credit is adjusted monthly and is currently set at prime for owner occupied properties and prime plus a premium for investment properties. The fixed rate loans on investment property are also higher than fixed rate owner occupied home equity loans. MSB generally provides home equity financing only for a first or second lien position.

MSB’s fixed rate home equity loans have terms of 5 to 30 years. All new variable rate home equity lines of credit have terms of 10 years interest only draw period and a 15 year repayment period with a loan to value ranging from 65% to 80%. MSB’s existing portfolio of home equity lines is also comprised of interest only home equity lines of credit based on a 10 year draw period and 15 year repayment period consisting of principal and interest repayments. Theloan-to-value limit on interest only home equity financing is 80% on owner-occupied property and 70% on investment property. MSB also offers bridge loans with a variable rate and a 70%loan-to-value limit on owner-occupied property and 60% on investment property.

Commercial and Industrial Loans. MSB offers revolving lines of credit to businesses to financeshort-term working capital needs like accounts receivable and inventory. These lines of credit may be unsecured or secured by liquid assets, accounts receivable and inventory or real estate. MSB generally provides such financing for no more than a 3 year term and with a variable rate. MSB also offers unsecured lines of credit to high net worth borrowers for short term working capital and/or business or investment purposes. These lines have a maximum term of two years with a variable interest rate.

MSB also originates commercial term loans to fundlonger-term borrowing needs such as purchasing equipment, property improvements or other fixed asset needs. These loans are secured by new and used machinery, equipment, fixtures, furniture or other long-term fixed assets and have terms of 1 to 15 years. MSB originates commercial term loans for other general long-term business purposes, and these loans are secured by real estate. Principal and interest on commercial term loans is payable monthly.

The normal minimum amount for MSB’s commercial term loans and lines of credit is $5,000. The maximum amount is based on the loan to value limits set in MSB’s policy. MSB typically does not provide working capital loans to businesses outside MSB’s normal market area or to new businesses where repayment is dependent solely on future profitable operation of the business. MSB avoids originating loans for which the primary source of repayment could be liquidation of the collateral securing the loan in light of poor repayment prospects. MSB typically requires personal and/or carve out guarantees on all commercial loans, regardless of other collateral securing the loan.

Theloan-to-value limits on commercial loans vary according to the collateral. Loans secured by real estate may be originated for up to an 80%loan-to-value ratio. Other limits are typically: Savings accounts-90% of the deposit amount; newequipment-75% of purchase price; and usedequipment-the lesser of 75% of the purchase price or current market value.

Loans to One Borrower. Millington Bank’s regulatory limit on total loans to any borrower or attributed to any one borrower is 15% of unimpaired capital and surplus. Accordingly, as of December 31, 2019, MSB’s loans to one borrower legal limit was approximately $10.1 million.

Millington Bank’s lending policies require that any transaction between $500,000 and Millington Bank’s legal lending limit must be approved by the Senior Loan Committee. Any exceptions to policy requires prior Board approval.

At December 31, 2019, Millington Bank’s largest lending relationship with a single borrower was a $9.0 million commercial loan to anon-depository financial institution.

Loan Originations, Purchases, Sales, Solicitation and Processing. MSB’s customary sources of loan applications include repeat customers, referrals from realtors and other professionals,“walk-in” customers and business opportunities generated by MSB’s commercial lenders. MSB’s residential loan originations are driven by Millington Bank’s reputation, as opposed to being advertising driven.

Generally, it has been MSB’s policy to retain the loans it originates in its portfolio. MSB has not uniformly originated real estate mortgage loans to meet the documentation standards to sell loans in the secondary market. MSB may do so, however, in the future if MSB finds it desirable in connection with interest rate risk management to sell longer term fixed rate mortgages into the secondary mortgage market. However, in 2018, MSB began to sell loans with servicing released into the secondary mortgage market. MSB sold ten residential mortgage loans through December 31, 2019 and eight residential mortgage loans through December 31, 2018.

MSB purchased $11.3 million in participated commercial real estate loans during the year ended December 31, 2019. In addition, MSB participated out $8.1 million and sold $2.5 million in loans originated by MSB to other banks during 2019. MSB will continue to actively utilize purchases and participations to grow the portfolio.

Loan Approval Procedures and Authority. Lending policies and loan approval limits are approved and adopted by the Millington Bank Board of Directors. Lending authority is vested primarily in the Millington Bank’s Senior Loan Committee comprised of Millington Bank’s Chief Executive Officer, Chief Operating Officer, Chief Lending Officer and the Chief Credit Officer who will review and approve loans over $500,000 and up to Millington Bank’s legal lending limit. Each of the above individuals also has lending authority of up to $500,000. Certain other Millington Bank employees also have limited lending authority. Prior Board approval is required for all loan products with any exceptions to loan policy, regardless of amount.

Asset Quality

Loan Delinquencies and Collection Procedures. MSB’s procedures for delinquent loans are as follows:

When a loan is 90 days delinquent, the MSB Senior Vice President and Chief Credit Officer or the President may determine to refer it to an attorney to send a demand letter. After 120 days, the attorney is able to start the foreclosure proceedings by filing a complaint with the court. All reasonable attempts are made to collect from borrowers prior to referral to an attorney for collection. In certain instances, MSB may modify the loan or grant a limited moratorium on loan payments to enable the borrower to reorganize his or her financial affairs, and MSB attempts to work with the borrower to establish a repayment schedule to cure the delinquency.

As to mortgage loans, if a foreclosure action is taken and the loan is not reinstated, paid in full or refinanced, the property is sold at judicial sale at which MSB may be the buyer if there are no adequate offers to satisfy the debt. Any property acquired as the result of foreclosure or by deed in lieu of foreclosure is classified as real estate owned until it is sold or otherwise disposed of. When real estate owned is acquired, it is recorded at its fair value less estimated selling costs. The initial write-down of the property is charged to the allowance for loan losses. Adjustments to the carrying value of the property that result from subsequent declines in value are charged to operations in the period in which the declines occur. At December 31, 2019, MSB had no other real estate owned.

As to commercial loans, MSB requests updated financial statements when the loan becomes 90 days delinquent. As to account loans, the outstanding balance is collected from the related account along with accrued interest when the loan is 180 days delinquent.

Loans are reviewed on a regular basis, and all delinquencies of 60 days or more are reported to the MSB Board of Directors. Loans are placed on nonaccrual status when they are more than 90 days delinquent, except for such loans which are “well secured” and “in the process of collection.” In addition a loan may be placed on nonaccrual status at any time if, in the opinion of MSB management, the collection of the loan in full is doubtful. An asset is “well secured” if it is secured (1) by collateral in the form of liens on or pledges of real or personal property, including securities, that have a realizable value sufficient to discharge the debt (including accrued interest) in full, or (2) by the guarantee of a financially responsible party. An asset is “in process of collection” if collection of the asset is proceeding in due course either (1) through legal action, including judgment enforcement procedures, or (2) in appropriate circumstances, through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or its restoration to a current status in the near future.

When loans with interest accrued and unpaid are placed on nonaccrual status, the accrued interest is reversed and charged against interest income. Subsequent payments are either applied to the outstanding principal balance or recorded as interest income, depending on the assessment of the ultimate collectability of the loan. At December 31, 2019, MSB had approximately $3.1 million of loans that were held on a nonaccrual basis and classified as impaired with only $372,000 subject to specific loss allowance reserves totaling $34,000. The remaining nonaccrual impaired loans did not require specific loss allowances.

Non-Performing Assets. The following table provides information regarding MSB’snon-performing loans and othernon-performing assets as of the dates indicated.

At December 31, 2019, there were no loans not disclosed in the table above where known information about possible credit problems of borrowers causes MSB management to have serious doubts as to the ability of such borrowers to comply with present loan repayment terms and which may result in disclosure of such loans in the future.

During the year ended December 31, 2019, gross interest income of $163,000 would have been recorded on loans accounted for on a nonaccrual basis and an additional $97,000 would have been recorded on TDRs if those loans had been current in accordance with their original terms. Interest collected on such loans totaling $443,000 was included in interest income during the period.

Classified Assets. MSB in compliance with the Uniform Credit Classification and Account Management Policy adopted by the FDIC, and MSB has an internal loan review program, wherebynon-performing loans are classified as special mention, substandard, doubtful or loss. It is MSB’s policy to review the commercial real estate, construction, and commercial loan portfolios, in accordance with regulatory classification procedures, on at least a quarterly basis. When a loan is classified as

substandard or doubtful, management is required to evaluate the loan for impairment. When MSB management classifies a portion of a loan as loss, a reserve equal to 100% of the loss amount is required to be established or the loan is to becharged-off, if a conforming loss event has occurred.

An asset that does not currently expose MSB to a sufficient degree of risk to warrant an adverse classification, but which possesses credit deficiencies or potential weaknesses that deserve MSB management’s close attention is classified as “special mention.”

An asset classified as “substandard” is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets so classified havewell-defined weaknesses and are characterized by the distinct possibility that MSB will sustain some loss if the deficiencies are not corrected.

An asset classified as “doubtful” has all the weaknesses inherent in a “substandard” asset with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of a loss on a doubtful asset is high.

That portion of an asset classified as “loss” is considered uncollectible and of such little value that its continuance as an asset, withoutcharge-off, is not warranted. This classification does not necessarily mean that an asset has absolutely no recovery or salvage value; but rather, it is not practical or desirable to defer writing off a basically worthless asset even though partial recovery may be affected in the future.

MSB management’s classification of assets is reviewed by the MSB Board on a regular basis and by the regulatory agencies as part of their examination process.

The following table discloses MSB’s classification of loans as of December 31, 2019.

At December 31, 2019, 2 out of the 9 loans adversely classified, totaling $1.0 million, are included asnon-performing loans in thenon-performing assets table.

MSB management further monitors the performance and credit quality of the retail portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. These credit quality indicators are assessed in the aggregate in these relatively homogeneous portfolios. Loans greater than 90 days past due are generally considered nonperforming and placed on nonaccrual status.

Allowance for Credit Losses. The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded credit commitments. The allowance for loan losses represents MSB management’s estimate of probable incurred losses in the loan portfolio as of the Statement of Financial Condition date and is recorded as a reduction to loans. The reserve for unfunded credit commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on MSB’s consolidated Statement of Financial Condition. No additional provisions are recorded in the event the unallocated portion of the allowance for credit losses exceeds the calculated reserve for unfunded credit commitments. The allowance for credit losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. All, or part, of the principal balance of loans receivable that are deemed uncollectible are charged against the allowance when MSB management determines that the repayment of that amount is highly unlikely. Any subsequent recoveries are credited to theallowance. Non-residential consumer loans are generally charged off no later than 120 days past due on a contractual basis, earlier in the event of bankruptcy, or if there is an amount deemed uncollectible.

MSB management, in determining the allowance for loan losses, considers MSB’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price of the impaired loan) is lower than the carrying value of that loan. The general component covers pools of loans by loan class. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these classes of loans, adjusted for qualitative factors. Each factor is assigned a value to reflect improving, stable or declining conditions based on MSB management’s best judgment using relevant information available at the time of the evaluation. The unallocated component is maintained to cover uncertainties that could affect MSB management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

The allowance calculation methodology includes segregation of the total loan portfolio into segments. MSB’s loans receivable portfolio is comprised of the following segments: residential mortgage, commercial real estate, construction, consumer and commercial and industrial. Some segments of MSB’s loan receivable portfolio are further disaggregated into classes which allows MSB management to better monitor risk and performance.

The residential mortgage loan segment is disaggregated into two classes:one-to four-family loans, which are primarily first liens, and home equity loans, which consist of first and second liens. The commercial real estate loan segment consists of both owner andnon-owner occupied loans and is further disaggregated into owner-occupied loans and investor properties, which have medium risk due to historical activity on these type loans. The construction loan segment is further disaggregated into two classes:one-to four-family owner occupied, which includes land loans, whereby the owner is known and there is less risk, and other, whereby the property is generally under development and tends to have more risk than theone-to four-family owner occupied loans. The commercial and industrial loan segment consists of loans made for the purpose of financing the activities of commercial customers. The commercial and industrial loans consist of a mix of loans secured by real estate and unsecured lines of credit some of which are for high net worth individuals. The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.

A loan is considered impaired when, based on current information and events, it is probable that MSB will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by MSB management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. MSB management determines the significance of payment delays and payment shortfalls on acase-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

Loans whose terms are modified are classified as TDRs if MSB grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a TDR generally involve a reduction in interest rate, a below market interest rate based on risk, or an extension of a loan’s stated maturity date. Nonaccrual troubled debt restructuring are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification. Loans classified as TDRs are designated as impaired.

The evaluation of the need and amount of the allowance for impaired loans and whether a loan can be removed from impairment status is made on a quarterly basis. MSB’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

In addition, the NJDBI and the FDIC, as an integral part of their examination processes, periodically review MSB’s loan and real estate owned portfolios and the related allowance for loan losses and valuation allowance for real estate owned. They may require the allowance for loan losses or the valuation allowance for real estate owned to be increased based on their review of information available at the time of the examination, which would negatively affect MSB’s earnings.

The following table sets forth information with respect to MSB’s allowance for loan losses for the periods indicated: