Kearny Financial (KRNY) 11-K Annual report of employee stock purchases

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

ANNUAL REPORT

PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended December 31, 2016

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from _______________ to _______________

Commission File Number 001-37399

A.  Full title of the plan and the address of the plan, if different from that of the issuer named below:

Kearny Bank Employees' Savings Plan

B:  Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Kearny Financial Corp.

120 Passaic Avenue

Fairfield, New Jersey 07004

KEARNY BANK

EMPLOYEES' SAVINGS PLAN

Financial Statements

and

Supplemental Schedule

December 31, 2016 and 2015

KEARNY BANK

EMPLOYEES' SAVINGS PLAN

TABLE OF CONTENTS

	Page
Independent Auditor's Report	1
Financial Statements
Statements of Net Assets Available for Benefits	2
Statements of Changes in Net Assets Available for Benefits	3
Notes to Financial Statements	4
Supplemental Schedule:
Schedule H, Line 4(i) Schedule of Assets (Held at End of Year)	9

Report of Independent Registered Public Accounting Firm

To the Plan Administrator

Kearny Bank Employees' Savings Plan

Fairfield, New Jersey

We have audited the accompanying statements of net assets available for benefits of the Kearny Bank Employees' Savings Plan 401(k) Plan (the "Plan") as of December 31, 2016 and 2015, and the related statement of changes in net assets available for benefits for the years then ended.  These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2016 and 2015, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying supplemental schedule of assets (held at the end of the year) December 31, 2016 has been subjected to audit procedures performed in conjunction with the audit of the Plan's financial statements. The supplemental schedule is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental schedule reconcile to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedule, we evaluated whether the supplemental schedule, including its form and content, is presented in conformity with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental schedule is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ BDO USA, LLP

New York, New York

June 28, 2017

KEARNY BANK

EMPLOYEES' SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

	December 31,
	2016		2015
Assets
Cash & equivalents	$	75,849	$	32,101
Investments, at fair value:
Employer common stock		15,062,927		12,109,847
Investment in mutual funds		15,719,178		13,361,506
Interest in common/collective trusts		3,535,911		3,376,747
Total investments		34,318,016		28,848,100
Notes receivable from participants		957,867		1,044,089
Due from broker for sales of investments		53,130		6,643
Total assets		35,404,862		29,930,933
Liabilities
Due to broker for purchase of investments		123,754		47,710
Total liabilities		123,754		47,710
Net assets available for benefits	$	35,281,108	$	29,883,223

 See accompanying notes to financial statements.

2

KEARNY BANK

EMPLOYEES' SAVINGS PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

	Year Ended December 31,
Additions to net assets attributable to:	2016			2015
Investment income:
Interest and dividends	$	390,409		$	186,885
Net appreciation in fair value of investments		3,842,595			2,516,653
Total investment income		4,233,004			2,703,538
Less: investment expenses		(5,290	)		(6,095	)
Net investment income		4,227,714			2,697,443
Interest income on notes receivable from participants		41,737			40,778
Contributions:
Participants		1,663,245			1,375,797
Employer		715,228			614,866
Rollover		335,420			630,716
Total contributions		2,713,893			2,621,379
Total additions		6,983,344			5,359,600
Deductions from net assets attributable to:
Benefits paid to participants		1,527,304			1,207,881
Administrative expenses		58,155			109,211
Total deductions		1,585,459			1,317,092
Net increase		5,397,885			4,042,508
Net assets available for benefits
Beginning of year		29,883,223			25,840,715
End of year	$	35,281,108		$	29,883,223

 See accompanying notes to financial statements.

3

Kearny Bank Employees' Savings Plan

Notes to Financial Statements

Note 1 – Description of the Plan

The following brief description of the provisions of the Kearny Bank Employees' Savings Plan (the "Plan") is provided for general information purposes only.  Participants should refer to the Plan Agreement for more complete information.

Participation:

The Plan is a voluntary defined contribution plan which covers all eligible employees who have elected to participate.  All employees are eligible to participate in the Plan after performance of 250 hours of service in a 3 consecutive month period and attainment of the age of 21.  The participant becomes eligible the first day following the eligibility month.  Effective January 1, 2016, new Plan participants who have not made a prior election waiving their right to participation are automatically enrolled in the Plan upon their date of eligibility at a deferral rate of 6%.  Contributions are allocated into a default fund unless otherwise allocated.  The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").

Contributions:

Kearny Bank ("Employer Company") has voluntarily agreed to make a matching contribution based upon the following matching schedule: 100% match on the first 1% participant deferral plus 50% on the next 5% participant deferral, for a maximum Employer Company match of 3.5%.  A participant may also elect to contribute voluntarily up to 75% of his or her salary, subject to applicable limits established in the Internal Revenue Code ("Code"), which will not be matched by the Employer Company beyond the extent noted above.  Compensation is defined as base salary plus overtime and commissions.

A participant may make "catch‑up" contributions, up to the maximum amount allowed by the Code, if the maximum annual amount of regular contributions is made and the participant is age 50 or older. The maximum allowable catch‑up contribution for the years ended December 31, 2016 and 2015 is $6,000.

Participant Accounts:

Each participant's account is credited with the participant's and Employer's contributions, an allocation of the Plan's earnings (including appreciation or depreciation of Plan assets) and charges for withdrawals.  Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. Loan and disbursement processing fees are charged to the respective participant accounts. Other administrative expenses are allocated based on transactions made.

Vesting:

Participants are 100% vested immediately in both the participant and Employer Company contributions, including rollover contributions, and actual earnings thereon.

Retirement:

Upon termination of employment, a participant may leave his or her account with the Plan and defer commencement of receipt of his or her vested balance until April 1 of the calendar year following the calendar year in which he or she attains age 70½, except to the extent that the vested account balance as of the date of termination is less than $1,000, in which case the interest in the Plan will be cashed out.  Terminated participants may continue to change investment instructions with respect to their remaining account balance.  Participants may also receive distributions in the form of Kearny Financial Corp. common stock.  Normal retirement age is 65.

Disability:

If a participant is disabled in accordance with the definition of disability under the Plan, he or she will be entitled to the same withdrawal rights as if terminating employment.

Pre-Retirement Death:

Upon death, the value of a participant's account will be payable to his or her beneficiary. This payment will be made in the form of a lump sum.

4

Kearny Bank Employees' Savings Plan

Notes to Financial Statements

Note 1 – Description of the Plan (continued)

Notes Receivable from Participants:

In accordance with the Plan, the minimum amount a participant can borrow is $1,000. The maximum amount the participant can borrow is the lesser of (i) $50,000 or (ii) one-half (1/2) of the vested balance of the participant's account.  Interest rates charged on participant loans range between 4.25% and 6.25% which are commensurate with the Prime Rate plus 1%, fixed for the term of the loan.  Principal and interest are paid ratably through payroll deductions.  Loan terms range from one to five years or greater for the purchase of a primary residence.  The Plan limits the number of participant loans outstanding to an individual participant at a given time to two loans.

Valuation of Account:

For common collective trusts the Plan uses a unit system for valuing each Investment Fund.  Under this system, units represent each participant's share in any Investment Fund.  The unit value is determined as of the close of business each regular business day (daily valuation).  For mutual funds, the Plan uses a daily Net Asset Value ("NAV") to value each Fund.

Note 2 – Summary of Significant Accounting Policies

A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows:

Basis of Accounting:

The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Valuation of Investments and Income Recognition:

The Plan's investments are stated at fair value. See Note 3 for discussion of fair value measurements.

Purchases and sales of securities are recorded on a trade-date basis.  Interest income is recorded on the accrual basis.  Dividends are recorded on the ex-dividend date. Net appreciation includes gains and losses on investments bought and sold as well as held during the year.

Investment Fees:

Net investment returns reflect certain fees paid by the investment funds to their affiliated investment advisors, transfer agents, and others as further described in each fund prospectus or other published documents. These fees are deducted prior to allocation of the Plan's investment earnings activity and thus are not separately identifiable as an expense.

Notes Receivable from Participants:

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest.  Interest income is recorded on the accrual basis.  Delinquent participant loans are reclassified as distributions based upon the terms of the Plan document.

Payments of Benefits:

Benefit payments are recorded when paid.

Administrative Costs:

Significant administrative costs of the Plan, other than administrative and loan fees, have been absorbed by Kearny Bank, the Plan sponsor.  Such costs are primarily related to audit fees and the use of sponsor company personnel to administer and account for the Plan.

Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

5

Kearny Bank Employees' Savings Plan

Notes to Financial Statements

Note 3 – Fair Value Measurement

The Plan measures its investments at fair value on a recurring basis in accordance with U.S. GAAP.  Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurement establishes a framework for measuring fair value.  That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements).

Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The framework that the authoritative guidance establishes for measuring fair value includes a hierarchy used to classify the inputs used in measuring fair value.  The hierarchy prioritizes the inputs used in determining valuations into three levels.  The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement.  The three levels of the fair value hierarchy under ASC Topic 820 are described below:

Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access. These generally provide the most reliable evidence and are used to measure fair value whenever available.

Level 2: Inputs to the valuation methodology include significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets or liabilities, quoted market prices in inactive markets for identical or similar assets or liabilities, and other observable inputs.  If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Following is a description of the valuation methodologies used for assets measured at fair value.

Common stock: Valued at the closing price reported on the active market on which the individual securities are traded.

Mutual funds: Valued at the unadjusted quoted market prices, which represent net asset value of shares held by the Plan at year end.

Common/collective trusts: Valued by the trustee based on the current market values of the underlying assets of the common collective trusts based on information reported by the investment advisor using audited financial statements of the common/collective trust funds at year end.  Participants ordinarily may direct the withdrawal or transfer of all or a portion of their investment at contract value.  There are no unfunded commitments related to its investments, or significant restrictions on redemptions.  The Plan may redeem its investment on a daily and immediate basis.  The fund imposes certain restrictions on the Plan, and the fund itself may be subject to circumstances that impact its ability to transact at contract value.  Such events may include participant withdrawals based on advice or directive of the Plan sponsor, establishment of a competing fund, creation of new eligible Plan or actions of the Plan other than participant-directed withdrawals. Plan management believes that the occurrence of events that would cause the fund to transact at less than contract value is not probable.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  Furthermore, while the Plan's management believes the valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain investments could result in a different fair value measurement at the reporting date.  There have been no changes in the methodologies used as of December 31, 2016 and 2015.

6

Kearny Bank Employees' Savings Plan

Notes to Financial Statements

Note 3 – Fair Value Measurement (continued)

The following table sets forth by level, within the fair value hierarchy, the Plan's assets at fair value as of December 31:

	Assets at Fair Value as of December 31, 2016
	Level 1		Level 2		Level 3		Total
Common stock	$	15,062,927		-		-	$	15,062,927
Mutual funds		15,719,178		-		-		15,719,178
Total investments at fair value	$	30,782,105	$	-	$	-	$	30,782,105
Common/collective trusts measured at net asset value*	$	-		-		-	$	3,535,911
Total investments at net asset value*	$	-		-		-	$	3,535,911
Total fair value investments	$	30,782,105		-		-	$	34,318,016
	Assets at Fair Value as of December 31, 2015
	Level 1		Level 2		Level 3		Total
Common stock	$	12,109,847		-		-	$	12,109,847
Mutual fund		13,361,506		-		-		13,361,506
Total investments at fair value	$	25,471,353	$	-	$	-	$	25,471,353
Common/collective trusts measured at net asset value*	$	-		-		-	$	3,376,747
Total investments at net asset value*	$	-		-		-	$	3,376,747
Total fair value investments	$	25,471,353		-		-	$	28,848,100

*Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy.  The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statements of Net Assets Available for Benefits.

Note 4 – Related Party Transactions and Exempt Party-in-Interest Transactions

The Plan owns shares of Kearny Financial Corp. common stock.  The Employer Company pays for fees for accounting and other administrative services.  Additionally, certain employees and officers of the Company, who are also participants in the plan, perform administrative services for the Plan at no cost.  Participants pay for administrative fees and loan fees to Reliance Trust Company, Pentegra Retirement Services and State Street Investor Services.  The Vanguard Group invests in the common stock of Kearny Financial Corp. via their mutual funds.  Notes receivable from participants held by the Plan also reflect party-in‑interest transactions.

7

Kearny Bank Employees' Savings Plan

Notes to Financial Statements

Note 5 – Plan Termination

Although it has not expressed any intent to do so, the Employer Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.  Disbursements to participants would be made in accordance with the Plan Agreement and applicable ERISA regulations.

Note 6 – Income Tax Status

The Plan has adopted a prototype non-standardized 401(k) profit sharing plan prepared by Pentegra Retirement Services, Inc.  The prototype plan obtained its latest opinion letter dated March 31, 2014, in which the Internal Revenue Service stated that the prototype plan, as then designed, complied with the applicable requirements of the Code. The Plan's administrator and the Plan's legal advisors believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code.  Therefore, they believe that the Plan is qualified and the related trust is tax-exempt.

U.S. GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability, or asset, if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. Plan management has analyzed the tax positions taken by the Plan and has concluded that as of December 31, 2016, there are no uncertain positions taken or expected to be taken that would require recognition of a liability, or asset, or disclosure in the financial statements.  The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.

Note 7 – Risks and Uncertainties

The Plan holds investments in Kearny Financial Corp. common stock, mutual fund shares and common/collective trusts whose values are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated certain investments and the level of uncertainties related to changes in the value of investments it is at least reasonably possible that changes in risk in the near term would materially affect investment assets reported in participant account balances and in the statements of net assets available for benefits.

Note 8 – Subsequent Events.

For purposes of evaluating the effect of subsequent events on these financial statements, the Plan's management has evaluated events through the date on which the financial statements were available to be issued.

8

Kearny Bank Employees' Savings Plan

Notes to Financial Statements

KEARNY BANK

EMPLOYEES' SAVINGS PLAN

EIN:  22-1032860

PN:  003

SCHEDULE H, LINE 4(i) SCHEDULE OF ASSETS (HELD AT END OF YEAR)

December 31, 2016

(a)		Identity of Issuer or Borrower (b)	Description (c)	Cost (d) **		Fair Value (e)
	*	Kearny Financial Corp.	Employer Common Stock		N/A	$	15,062,927
		Mutual Funds:
		Federated Investors, Inc.	Federated Government Obligations Funds		N/A		10,123
		Vanguard	REIT Index (Admiral)		N/A		797,956
		Vanguard	Total Intl. Stock Index (Admiral)		N/A		532,469
		Vanguard	Target Retirement 2015		N/A		33,585
		Vanguard	Target Retirement 2025		N/A		235,339
		Vanguard	Target Retirement 2035		N/A		584,813
		Vanguard	Target Retirement 2045		N/A		40,381
		Vanguard	Target Retirement 2020		N/A		968,345
		Vanguard	Target Retirement 2060		N/A		21,886
		Vanguard	Target Retirement 2055		N/A		24,971
		Vanguard	Target Retirement 2050		N/A		62,017
		Vanguard	Target Retirement 2040		N/A		66,097
		Vanguard	Target Retirement 2030		N/A		112,399
		Vanguard	Target Retirement Income		N/A		567,152
		Vanguard	Mid Cap Index (Admiral)		N/A		2,645,502
		Vanguard	Growth Index (Admiral)		N/A		2,836,662
		Vanguard	Value Index (Admiral)		N/A		1,042,405
		Vanguard	Small Cap Index (Admiral)		N/A		1,597,914
		Vanguard	500 Index (Admiral)		N/A		2,495,761
		Vanguard	Total Bond Market Index (Admiral)		N/A		1,043,401
		Common/Collective Trusts:
	*	Reliance Trust	Stable Value Fund - Series 25053 - Class 0		N/A		3,535,911
	*	Participant loans	Interest rates range from 4.25% to 6.25%		-		957,867
						$	35,275,883

*   Party-in-interest

** Historical cost has not been presented since all investments are participant-directed.

9

SIGNATURES

The Plan.  Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

		KEARNY BANK EMPLOYEES' SAVINGS PLAN
Date:  June 28, 2017	By:	/s/ Eric B. Heyer
		Eric B. Heyer
		Executive Vice President and Chief Financial Officer
		Kearny Bank