
	December 31, 2024	June 30, 2024
	(Unaudited)
Assets
Cash and amounts due from depository institutions	$	$
Interest-bearing deposits in other banks
Cash and cash equivalents
Investment securities available for sale (amortized cost of $ and $, respectively)
Investment securities held to maturity (fair value of $ and $, respectively)
Loans held-for-sale
Loans receivable
Less: allowance for credit losses on loans	()	()
Net loans receivable
Premises and equipment
Federal Home Loan Bank (“FHLB”) of New York stock
Accrued interest receivable
Goodwill
Core deposit intangibles
Bank owned life insurance
Deferred income tax assets, net

Other assets
Total Assets	$	$

Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest-bearing	$	$
Interest-bearing
Total deposits
Borrowings
Advance payments by borrowers for taxes
Other liabilities
Total Liabilities

Stockholders' Equity
Preferred stock, $ par value, shares authorized; issued and outstanding
Common stock, $ par value; shares authorized; shares and shares issued and outstanding, respectively
Paid-in capital
Retained earnings
Unearned employee stock ownership plan shares; shares and shares, respectively	()	()
Accumulated other comprehensive loss	()	()
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity	$	$

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(In Thousands, Except Per Share Data)

(Unaudited)


	Three Months Ended December 31,			Six Months Ended December 31,
	2024	2023		2024	2023
Interest Income
Loans	$	$		$	$
Taxable investment securities
Tax-exempt investment securities
Other interest-earning assets
Total Interest Income

Interest Expense
Deposits
Borrowings
Total Interest Expense
Net Interest Income
Provision for credit losses
Net Interest Income after Provision for Credit Losses

Non-Interest Income
Fees and service charges
Loss on sale and call of securities		()			()
Gain on sale of loans
Loss on write down of other real estate owned		()			()
Income from bank owned life insurance
Electronic banking fees and charges

Other income
Total Non-Interest Income		()			()

Non-Interest Expense
Salaries and employee benefits
Net occupancy expense of premises
Equipment and systems
Advertising and marketing
Federal deposit insurance premium
Directors' compensation



Other expense
Total Non-Interest Expense
Income (Loss) before Income Taxes		()
Income tax expense
Net Income (Loss)	$	$	()	$	$	()

Net Income (Loss) per Common Share (EPS)
Basic	$	$	()	$	$	()
Diluted	$	$	()	$	$	()
Weighted Average Number of Common Shares Outstanding
Basic
Diluted

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In Thousands, Unaudited)


	Three Months Ended December 31,				Six Months Ended December 31,
	2024		2023		2024	2023
Net Income (Loss)	$		$	()	$	$	()
Other Comprehensive (Loss) Income, net of tax:
Net unrealized (loss) gain on securities available for sale	()
Net realized loss on sale and call of securities available for sale
Fair value adjustments on derivatives			()		()	()
Benefit plan adjustments	()		()			()
Total Other Comprehensive (Loss) Income	()				()
Total Comprehensive (Loss) Income	$	()	$		$	$

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In Thousands, Except Per Share Data, Unaudited)

Common Stock

Paid-In
Capital

Retained
Earnings

Unearned
ESOP
Shares

Accumulated
Other
Comprehensive
Loss

Total

Amount

Balance - September 30, 2023

()

Net loss

—

()

—

()

Other comprehensive loss, net of income tax

—

ESOP shares committed to be released ( shares)

—

()

—

Stock repurchases

()

—

()

Stock-based compensation expense

—

Cash dividends declared ($ per common share)

—

()

—

()

Balance - December 31, 2023

()

Common Stock

Paid-In
Capital

Retained
Earnings

Unearned
ESOP
Shares

Accumulated
Other
Comprehensive
Loss

Total

Amount

Balance - June 30, 2023

()

Net loss

—

()

—

()

Other comprehensive loss, net of income tax

—

ESOP shares committed to be released ( shares)

—

()

—

Stock repurchases

()

—

()

Issuance of stock under stock benefit plans

()

—

Stock-based compensation expense

—

Cancellation of shares issued for restricted stock awards

()

—

()

—

()

Cash dividends declared ($ per common share)

—

()

—

()

Balance - December 31, 2023

()

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Continued)

(In Thousands, Except Per Share Data, Unaudited)

Common Stock

Paid-In
Capital

Retained
Earnings

Unearned
ESOP
Shares

Accumulated
Other
Comprehensive
Loss

Total

Amount

Balance - September 30, 2024

()

Net Income

—

Other comprehensive loss, net of income tax

—

()

ESOP shares committed to be released ( shares)

—

()

—

Stock-based compensation expense

—

Cash dividends declared ($ per common share)

—

()

—

()

Balance - December 31, 2024

()

Common Stock

Paid-In
Capital

Retained
Earnings

Unearned
ESOP
Shares

Accumulated
Other
Comprehensive
Loss

Total

Amount

Balance - June 30, 2024

()

Net Income

—

Other comprehensive loss, net of income tax

—

()

ESOP shares committed to be released ( shares)

—

()

—

Issuance of stock under stock benefit plans

()

—

Stock-based compensation expense

—

Cancellation of shares issued for restricted stock awards

()

—

()

—

()

Cash dividends declared ($ per common share)

—

()

—

()

Balance - December 31, 2024

()

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands, Unaudited)


	Six Months Ended December 31,
	2024	2023
Cash Flows from Operating Activities:
Net income (loss)	$	$	()
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment
Net accretion of yield adjustments	()	()
Deferred income taxes

Amortization of intangible assets
Amortization (accretion) of benefit plans’ unrecognized net loss (gain)		()
Provision for credit losses
Loss on write-down of other real estate owned
Loans originated for sale	()	()
Proceeds from sale of mortgage loans held-for-sale
Gain on sale of mortgage loans held-for-sale, net	()	()
Realized loss on sale/call of investment securities available for sale


Realized loss (gain) on disposition of premises and equipment		()
Increase in cash surrender value of bank owned life insurance	()	()
ESOP and stock-based compensation expense
Decrease (increase) in interest receivable		()
Increase in other assets	()	()
Decrease in interest payable	()	()
(Decrease) increase in other liabilities	()
Net Cash (Used in) Provided by Operating Activities	()

Cash Flows from Investing Activities:
Purchases of:
Investment securities available for sale	()	()
Investment securities held to maturity	()	()
Proceeds from:
Repayments/calls/maturities of investment securities available for sale
Repayments/calls/maturities of investment securities held to maturity
Sales of investment securities available for sale
Purchase of loans		()
Net (increase) decrease in loans receivable	()

Purchase of interest rate contracts	()	()

Additions to premises and equipment	()	()
Proceeds from death benefit of bank owned life insurance
Net surrender of bank owned life insurance		()
Proceeds from cash settlement of premises and equipment
Purchase of FHLB stock	()	()
Redemption of FHLB stock

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

per share, payable on February 26, 2025 to stockholders of record as of February 12, 2025.

reportable segment, this ASU is not expected to have a material effect on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures (Topic 740), which requires reporting companies to improve the transparency of certain income tax related disclosures, including the rate reconciliation and taxes paid disclosures. For public companies, the requirements will become effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company does not expect this ASU to have a material effect on the Company’s consolidated financial statements.

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In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires improved disclosures about a public business entity’s expenses, including more detailed information about the types of expenses in commonly presented expense captions. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, although early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its Consolidated Financial Statements.

$ $ $ $ Collateralized loan obligations Corporate bonds Total debt securities Mortgage-backed securities:

Residential pass-through securities (1)

Commercial pass-through securities (1)

Total mortgage-backed securities Total securities available for sale$ $ $ $ $

___________________________

(1)Government-sponsored enterprises.

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Table of Contents

$ $ $ $ Collateralized loan obligations Corporate bonds Total debt securities Mortgage-backed securities:

Residential pass-through securities (1)

Commercial pass-through securities (1)

Total mortgage-backed securities Total securities available for sale$ $ $ $ $

___________________________

(1)Government-sponsored enterprises.

$ $ $ $ Total debt securities Mortgage-backed securities:

Residential pass-through securities (1)

Commercial pass-through securities (1)

Total mortgage-backed securities Total securities held to maturity$ $ $ $ $

___________________________

(1)Government-sponsored enterprises.

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Table of Contents

$ $ $ $ Total debt securities Mortgage-backed securities:

Residential pass-through securities (1)

Commercial pass-through securities (1)

Total mortgage-backed securities Total securities held to maturity$ $ $ $ $

___________________________

(1)Government-sponsored enterprises.

$ Due after one year through five years Due after five years through ten years Due after ten years Total$ $


	December 31, 2024
	Amortized Cost	Fair Value
	(In Thousands)
Held to maturity debt securities:
Due in one year or less	$	$
Due after one year through five years
Due after five years through ten years
Due after ten years
Total	$	$

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Table of Contents

$ $ $ Gross realized gains$ $ $ $ Gross realized losses () ()Net loss on sales of securities$ $()$ $()

$ Pledged for potential borrowings at the Federal Reserve Bank of New York Pledged for the bank term funding program Total carrying value of securities pledged$ $ $ $ $ $ $ Collateralized loan obligations Corporate bonds Commercial pass-through securities Residential pass-through securities Total$ $ $ $ $ $

June 30, 2024

Less than 12 Months

12 Months or More

Total

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Number of Securities

Fair
Value

Unrealized
Losses

(Dollars in Thousands)

Securities Available for Sale:

Asset-backed securities

Collateralized loan obligations

Corporate bonds

Commercial pass-through securities

Residential pass-through securities

Total

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Table of Contents

$ $ $ $ $ Commercial pass-through securities Residential pass-through securities Total$ $ $ $ $ $

June 30, 2024

Less than 12 Months

12 Months or More

Total

Fair
Value

Unrecognized
Losses

Fair
Value

Unrecognized
Losses

Number of Securities

Fair
Value

Unrecognized
Losses

(Dollars in Thousands)

Securities Held to Maturity:

Obligations of state and political subdivisions

Commercial pass-through securities

Residential pass-through securities

Total

Available for sale securities are evaluated to determine if a decline in fair value below the amortized cost basis has resulted from a credit loss or from other factors. An impairment related to credit factors would be recorded through an allowance for credit losses. The allowance is limited to the amount by which the security’s amortized cost basis exceeds the fair value. An impairment that has not been recorded through an allowance for credit losses shall be recorded through other comprehensive income, net of applicable taxes. Investment securities will be written down to fair value through the Consolidated Statement of Income if management intends to sell, or may be required to sell, the securities before they recover in value. The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due or were placed in nonaccrual status at December 31, 2024. The Company also monitors the credit quality of the issuers through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Management believes that the unrealized losses on these securities are a function of changes in market interest rates and credit spreads, not changes in credit quality. allowance for credit losses was recorded at December 31, 2024 on available for sale securities.

The sale of available for sale securities during the three and six months ended December 31, 2023 was part of an investment security repositioning. The sale proceeds were utilized for reinvestment into higher yielding loans and investment securities, and for repayment of higher-cost wholesale borrowings. The Company was not required to sell these securities.

allowance for credit losses was recorded at December 31, 2024 on held to maturity securities.

- 13 -

Table of Contents

$ Nonresidential mortgage Commercial business Construction Total commercial loans One- to four-family residential mortgage Consumer loans:Home equity loans Other consumer Total consumer loans Total loans

Unaccreted yield adjustments (1)

()()Total loans receivable, net of yield adjustments$ $

___________________________

(1)At December 31, 2024 and June 30, 2024, included a fair value adjustment to the carrying amount of hedged one- to four-family residential mortgage loans.

Past Due Loans

Past due status is based on the contractual payment terms of the loans.

$ $ $ $ $ Nonresidential mortgage Commercial business Construction One- to four-family residential mortgage Home equity loans Other consumer Total loans$ $ $ $ $ $

Payment Status
June 30, 2024

30-59 Days

60-89 Days

90 Days and Over

Total Past Due

Current

Total

(In Thousands)

Multi-family mortgage

Nonresidential mortgage

Commercial business

Construction

One- to four-family residential mortgage

Home equity loans

Other consumer

Total loans

- 14 -

Table of Contents

t recognize interest income on non-accrual loans during the six months ended December 31, 2024 and 2023. $ $ $ $ $ Nonresidential mortgage Commercial business Construction One- to four-family residential mortgage Home equity loans Other consumer Total loans$ $ $ $ $ $

Performance Status
June 30, 2024

90 Days and Over Past Due Accruing

Nonaccrual Loans with Allowance for Credit Losses

Nonaccrual Loans with no Allowance for Credit Losses

Total Nonperforming

Performing

Total

(In Thousands)

Multi-family mortgage

Nonresidential mortgage

Commercial business

Construction

One- to four-family residential mortgage

Home equity loans

Other consumer

Total loans

- 15 -

Table of Contents

$ $ $ %Total$ $ $ $

Six Months Ended December 31, 2024

Payment Delay

Term Extension

Payment Delay, Term Extension, and Interest Rate Reductions

Total

Percent of Total Class

(Dollars In Thousands)

Multi-family mortgage

Nonresidential mortgage

—

Total

Three Months Ended December 31, 2023

Payment Delay

Term Extension

Payment Delay, Term Extension, and Interest Rate Reductions

Total

Percent of Total Class

(Dollars In Thousands)

Multi-family mortgage

—

One- to four-family residential mortgage

—

Home equity loans

—

Total

Six Months Ended December 31, 2023

Payment Delay

Term Extension

Payment Delay, Term Extension, and Interest Rate Reductions

Total

Percent of Total Class

(Dollars In Thousands)

Multi-family mortgage

—

Commercial business

—

One- to four-family residential mortgage

—

Home equity loans

—

Total

- 16 -

Table of Contents

commitments to lend additional funds to borrowers experiencing financial difficulty whose terms have been restructured at December 31, 2024 and December 31, 2023.

Of the loans restructured during the three and six months ended December 31, 2024 and December 31, 2023 there were no subsequent defaults as of December 31, 2024. For restructured loans, a subsequent payment default is defined in terms of delinquency, when a principal or interest payment is 90 days past due or classified into non-accrual status during the reporting period.

$ $ $ $ Nonresidential mortgage One- to four-family residential mortgage Total$ $ $ $ $

Individually Analyzed Loans

Individually analyzed loans include loans which do not share similar risk characteristics with other loans. Loans previously modified as TDRs and loan modifications made to borrowers experiencing financial difficulty will generally be evaluated for individual impairment, however, after a period of sustained repayment performance which permits the credit to be returned to accrual status, the loans would generally be removed from individual impairment analysis and returned to its corresponding pool. As of December 31, 2024, the carrying value of individually analyzed loans, including loans acquired with deteriorated credit quality that were individually analyzed, totaled $ million, of which $ million were considered collateral dependent.

For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan as of the measurement date. See Note 12 for additional disclosure regarding fair value of individually analyzed collateral dependent loans.

$ $ $

Nonresidential mortgage (1)

) ) )) ) $

The allowance for credit losses on loans decreased from $ million at June 30, 2024 to $ million as of December 31, 2024. The decrease was primarily due to a decrease in the quantitative reserve on one- to four-family residential mortgage loans due to lower assumed loss rates, and a decrease in individually analyzed reserves on nonresidential mortgage loans. The decrease was offset by an increase in the quantitative reserve on nonresidential mortgage loans and an increase in the qualitative reserve on multi-family mortgage loans.

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$ $ $ (Reversal of) provision for credit losses()() ()Balance at end of the period$ $ $ $

$ Interest-bearing demand Savings Certificates of deposits Total deposits$ $

$ Federal Reserve Bank Term Funding Program ("BTFP") borrowings

Overnight borrowings (1)

Total borrowings$ $

___________________________

(1)At December 31, 2024 and June 30, 2024, there were FHLB overnight line of credit borrowings of $ million and $ million, respectively.

- 24 -

Table of Contents

%$ %One to two years Two to three years Three to four years Four to five years Greater than five years Total advances % %Unamortized fair value adjustments()()Total advances, net of fair value adjustments$ $

At December 31, 2024, FHLB advances and overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans with carrying values totaling approximately $ billion. At June 30, 2024, FHLB advances and overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans with carrying values totaling approximately $ billion.

At December 31, 2024 there were BTFP borrowings. At June 30, 2024, BTFP borrowings were secured by agency mortgage-backed securities with a par value of $ million.

Other liabilities$ Total$ $

June 30, 2024

Asset Derivatives

Liability Derivatives

Location

Fair Value

Location

Fair Value

(In Thousands)

Derivatives designated as hedging instruments:

Interest rate contracts

Other assets

Other liabilities

Total

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Table of Contents

interest rate swaps and caps with a total notional amount of $ billion hedging specific wholesale funding and interest rate floors with a notional amount of $ million hedging floating-rate available for sale securities.

For derivatives designated as cash flow hedges, the gain or loss on the derivative is recorded in other comprehensive income, net of tax, and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.

For cash flow hedges on the Company’s wholesale funding positions, amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s hedged variable rate wholesale funding positions. During the three and six months ended December 31, 2024, the Company reclassified $ million and $ million, respectively, as a reduction in interest expense. During the next twelve months, the Company estimates that $ million will be reclassified as a reduction in interest expense.

For cash flow hedges on the Company’s assets, amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest income as interest payments are received on the Company’s hedged variable rate assets. During the three and six months ended December 31, 2024, the Company did not reclassify any amount to interest income. During the next twelve months, the Company estimates that $ will be reclassified as a reduction in interest income.

$()$()$()Amount of gain reclassified from accumulated other comprehensive income to interest expense$ $ $ $

Fair Value Hedges of Interest Rate Risk

The Company is exposed to changes in the fair value of certain of its fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Such derivatives are used to hedge the changes in fair value of certain of its pools of fixed rate assets. During the three and six months ended December 31, 2024, the Company had interest rate swap mature with a notional amount of $ million. As of December 31, 2024, the Company had interest rate swaps with a notional amount of $ million hedging fixed-rate residential mortgage loans.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

)$ $ $ Gain (loss) on hedges recorded in interest income on loans$ $()$()$()

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Table of Contents

$ Fair value hedging adjustment included in the carrying amount of the hedged assets$()$()

___________________________________

billion and $ billion, respectively.

Offsetting Derivatives

$()$ $ $ $ Total$ $()$ $ $ $ Liabilities:Interest rate contracts$ $()$ $ $ $ Total$ $()$ $ $ $

June 30, 2024

Gross Amounts Not Offset

Gross Amount Recognized

Gross Amounts Offset

Net Amounts Presented

Financial Instruments

Cash Collateral Received (Posted)

Net Amount

(In Thousands)

Assets:

Interest rate contracts

()

Total

()

Liabilities:

Interest rate contracts

()

Total

()

- 27 -

Table of Contents

million and $ million, respectively, of in process loans whose terms included interest rate locks to borrowers, which are considered free-standing derivative instruments whose fair values are not material to the Company’s financial condition or results of operations.

10.

$ $ $ Salaries and employee benefitsInterest cost Other expenseAccretion of unrecognized gain()()()()Other expenseExpected return on assets()()()()Other expenseNet periodic benefit cost$ $ $ $

2021 Equity Incentive Plan

During the six months ended December 31, 2024, the Company granted restricted stock units (“RSUs”) comprised of service-based RSUs and performance-based RSUs. The service-based RSUs will vest in tranches over a period of and the performance-based RSUs will cliff vest upon the achievement of performance measures over the period ending June 30, 2027. The number of performance-based RSUs that will vest, if any, will depend on whether, and to what extent, the performance measures are achieved. Common stock will be issued from authorized shares upon the vesting of the RSUs.

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11.

$()$ $ Statutory federal tax rate % % % %Federal income tax at statutory rate$ $()$ $ (Reduction) increase in income taxes resulting from:Tax exempt interest()()()()State tax, net of federal tax effect () ()Incentive stock option compensation expense Income from bank-owned life insurance()()()()Surrender of bank-owned life insurance polices Other items, net()()() Total income tax expense$ $ $ $ Effective income tax rate %()% % %

12.

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Table of Contents

$ $ $ Collateralized loan obligations Corporate bonds Total debt securities Mortgage-backed securities available for sale:Residential pass-through securities Commercial pass-through securities Total mortgage-backed securities Total securities available for sale$ $ $ $ Interest rate contracts$ $ $ $ Total assets$ $ $ $ Liabilities:Interest rate contracts$ $ $ $ Total liabilities$ $ $ $

- 30 -

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Table of Contents

$ $ $ Nonresidential mortgage Total$ $ $ $

June 30, 2024

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

(In Thousands)

Collateral dependent loans:

Multi-family mortgage

Nonresidential mortgage

Total

Market valuation of underlying collateral

(1)

Adjustments to reflect current conditions/selling costs

(2)

%Nonresidential mortgage Market valuation of underlying collateral

(1)

Adjustments to reflect current conditions/selling costs

(2)

%Total$


	June 30, 2024
	Fair Value	Valuation Techniques		Unobservable Input		Range	Weighted Average
	(Dollars in Thousands)
Collateral dependent loans:

Multi-family mortgage	$	Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	%		%
Nonresidential mortgage		Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	%		%
Total	$

___________________________________

(1)The fair value of collateral dependent loans is generally determined based on an independent appraisal of the fair value of a loan’s underlying collateral.

(2)The fair value basis of collateral dependent loans is adjusted to reflect management’s estimates of selling costs including, but not limited to, real estate brokerage commissions and title transfer fees.

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million and a valuation allowance of $ reflecting an aggregate fair value of $ million. By comparison, at June 30, 2024, collateral dependent loans valued using Level 3 inputs comprised loans with principal balances totaling $ million and a valuation allowance of $ reflecting an aggregate fair value of $ million.

Once a loan is foreclosed, the fair value of the other real estate owned continues to be evaluated based upon the fair value of the repossessed real estate originally securing the loan. At December 31, 2024 and June 30, 2024, the Company had other real estate owned assets, respectively.

$ $ $ $ Investment securities available for sale Investment securities held to maturity Loans held-for-sale Net loans receivable FHLB Stock Interest receivable Interest rate contracts Financial liabilities:Deposits other than certificates of deposits Certificates of deposits Borrowings Interest payable on deposits Interest payable on borrowings Interest rate contracts

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Commitments. The fair value of commitments to fund credit lines and originate or participate in loans held in portfolio or loans held for sale is estimated using fees currently charged to enter into similar agreements taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, including those relating to loans held for sale that are considered derivative instruments for financial statement reporting purposes, the fair value also considers the difference between current levels of interest and the committed rates. The carrying value, represented by the net deferred fee arising from the unrecognized commitment, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into similar agreements with similar credit risk, is not considered material for disclosure.

Limitations. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument. Because no fair value exists for a significant portion of the financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature, involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to value anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets and liabilities include premises and equipment, and advances from borrowers for taxes and insurance. In addition, the ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

Finally, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.

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13.

)$()Tax effect Net of tax amount()()Fair value adjustments on derivatives Tax effect()()Net of tax amount Benefit plan adjustments Tax effect()()Net of tax amount Total accumulated other comprehensive loss$()$())$ $ $ Net realized loss on sale and call of securities available for sale Fair value adjustments on derivatives ()()()Benefit plans:

Accretion of net actuarial gain (1)

()()()()Net actuarial gain (loss) ()Net change in benefit plan accrued expense()() ()Other comprehensive (loss) gain before taxes() () Tax effect () ()Total other comprehensive (loss) gain$()$ $()$

___________________________________

(1)Represents amounts reclassified out of accumulated other comprehensive loss and included in the computation of net periodic pension expense. See Note 10 - Benefit Plans for additional information.

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14.

$()$ $()Weighted average number of common shares outstanding - basic Effect of dilutive securities Weighted average number of common shares outstanding - diluted Basic earnings per share$ $()$ $()Diluted earnings per share$ $()$ $()

Stock options for and shares of common stock were not considered in computing diluted earnings per share for the three months ended December 31, 2024 and 2023, respectively, and stock options for and shares of common stock were not considered in computing diluted earnings per share for the six months ended December 31, 2024 and 2023, respectively, because they were considered anti-dilutive. In addition, and RSUs were not considered in computing diluted earnings per share for the three months ended December 31, 2024 and December 31, 2023, respectively and and RSUs were not considered in computing diluted earnings per share for the three and six months ended December 31, 2024 and December 31, 2023, respectively because they were considered anti-dilutive.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q may include certain forward-looking statements based on current management expectations. Such forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may”, “will”, “believe”, “expect”, “estimate”, “anticipate”, “continue”, or similar terms or variations on those terms, or the negative of those terms. The actual results of the Company could differ materially from those management expectations. This includes statements regarding general economic conditions, legislative and regulatory changes, monetary and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities and failure to integrate or profitably operate acquired businesses. Additional potential factors include changes in interest rates, the rate of inflation, deposit flows, cost of funds, demand for loan products and financial services, competition and changes in the quality or composition of loan and investment portfolios of the Company. Other factors that could cause future results to vary from current management expectations include changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and prices. Further description of the risks and uncertainties to the business are included in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended June 30, 2024, under “Item 1A. Risk Factors.”

Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies

Our accounting policies are integral to understanding the results reported. We consider accounting policies that require management to exercise significant judgment or discretion or to make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. At December 31, 2024, there have been no material changes to our critical accounting policies as compared to the critical accounting policies disclosed in our most recent Annual Report on Form 10-K. Reference is made to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2024.

Comparison of Financial Condition at December 31, 2024 and June 30, 2024

Executive Summary. Total assets increased $47.9 million to $7.73 billion at December 31, 2024 from $7.68 billion at June 30, 2024. The increase primarily reflected increases in cash and cash equivalents and in net loans receivable, partially offset by a decrease in investment securities available for sale, as discussed below, declines in the market values of interest rate derivatives and a decrease in Federal Home Loan Bank of New York (“FHLB”) capital stock.

Investment Securities. Investment securities available for sale decreased $54.6 million to $1.02 billion at December 31, 2024, from $1.07 billion at June 30, 2024. This decrease was largely the result of principal repayments of $118.2 million, partially offset by purchases of $58.9 million and a $4.4 million increase in the fair value of the portfolio to a net unrealized loss of $126.3 million.

Investment securities held to maturity decreased $8.5 million to $127.3 million at December 31, 2024 from $135.7 million at June 30, 2024. This decrease was driven by principal repayments of $8.6 million.

Additional information regarding our investment securities at December 31, 2024 and June 30, 2024 is presented in Note 4 to the unaudited consolidated financial statements.

Loans Held-for-Sale. Loans held-for-sale totaled $5.7 million at December 31, 2024 as compared to $6.0 million at June 30, 2024 and are reported separately from the balance of net loans receivable. During the six months ended December 31, 2024, we sold $64.3 million of residential mortgage loans, resulting in a gain on sale of $504,000.

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Net Loans Receivable. Net loans receivable increased $59.5 million, or 1.0%, to $5.75 billion at December 31, 2024 from $5.69 billion at June 30, 2024. Details regarding the change in the loan portfolio, by loan segment, are presented below:


	December 31, 2024		June 30, 2024		Increase/ (Decrease)
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	2,722,623	$	2,645,851	$	76,772
Nonresidential mortgage	950,194		948,075		2,119
Commercial business	135,740		142,747		(7,007)
Construction	176,704		209,237		(32,533)
Total commercial loans	3,985,261		3,945,910		39,351

One- to four-family residential mortgage	1,765,160		1,756,051		9,109

Consumer loans:
Home equity loans	47,101		44,104		2,997
Other consumer	2,778		2,685		93
Total consumer loans	49,879		46,789		3,090

Total loans	5,800,300		5,748,750		51,550

Unaccreted yield adjustments	(8,542)		(15,963)		7,421
Allowance for credit losses	(44,457)		(44,939)		482

Net loans receivable	$	5,747,301	$	5,687,848	$	59,453

Commercial loan origination volume for the six months ended December 31, 2024 totaled $242.3 million, comprised of $128.4 million of commercial mortgage loan originations, $59.3 million of commercial business loan originations and construction loan disbursements of $54.6 million.

One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $89.6 million for the six months ended December 31, 2024. Home equity loan and line of credit origination volume for the same period totaled $12.5 million.

Loan-to-value (“LTV”) ratios are based on current period loan balances and original appraised values at the time of origination unless a current appraisal has been obtained as a result of the loan being deemed collateral dependent and individually analyzed. The following table sets forth the composition of our real estate secured loans indicating the LTV, by loan category, at December 31, 2024 and June 30, 2024:


	December 31, 2024				June 30, 2024
	Balance		LTV		Balance		LTV
	(Dollars in Thousands)
Commercial mortgage loans:
Multi-family mortgage	$	2,722,623	63	%	$	2,645,851	63	%
Nonresidential mortgage(1)	950,194		53		948,075		53
Construction	176,704		59		209,237		56
Total commercial mortgage loans	3,849,521		60		3,803,163		60

One- to four-family residential mortgage	1,765,160		62		1,756,051		62

Consumer loans:
Home equity loans	47,101		50		44,104		49

Total mortgage loans	$	5,661,782	61	%	$	5,603,318	61	%

___________________________________

(1)At December 31, 2024 and June 30, 2024, includes $851,731 and $849,033 of non-owner occupied commercial real estate (“CRE”) loans with an LTV of 53% and 53%, respectively, and includes $98,463 and $99,042 of owner occupied CRE loans with an LTV of 48% and 50%, respectively.

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Additional information about our loan portfolio at December 31, 2024 and June 30, 2024 is presented in Note 5 to the unaudited consolidated financial statements.

Nonperforming Assets. Nonperforming assets decreased $2.2 million to $37.7 million, or 0.49% of total assets, at December 31, 2024, from $39.9 million, or 0.52% of total assets, at June 30, 2024, respectively.

Additional information about our nonperforming loans and loan modifications at December 31, 2024 and June 30, 2024 is presented in Note 5 to the unaudited consolidated financial statements.

Allowance for Credit Losses (“ACL”). At December 31, 2024 and June 30, 2024, the ACL totaled $44.5 million, or 0.77% of total loans. The ACL for the six months ended December 31, 2024 reflected net charge-offs of $697,000, partially offset by a provision for credit losses of $215,000. The provision for credit losses for the six months ended December 31, 2024 was primarily driven by an increase in the balance of loans receivable.

Additional information about our ACL at December 31, 2024 and June 30, 2024 is presented in Note 6 to the unaudited consolidated financial statements.

Other Assets. The aggregate balance of other assets, including premises and equipment, Federal Home Loan Bank (“FHLB”) stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance (“BOLI”), deferred income taxes, and other assets, decreased $25.8 million to $691.3 million at December 31, 2024 from $717.1 million at June 30, 2024. The decrease in the balance of these other assets during the six months ended December 31, 2024 largely reflected a decrease in the market value of interest rate derivatives and a decrease in FHLB stock, partially offset by increases in BOLI and other receivables resulting from unsettled funds. The remaining change generally reflected normal operating fluctuations within these line items.

Deposits. Total deposits increased $512.9 million, or 9.9%, to $5.67 billion at December 31, 2024 from $5.16 billion at June 30, 2024. Included in total deposits are brokered and listing service time deposits of $752.0 million at December 31, 2024 and $408.2 million at June 30, 2024. This increase was driven by a reallocation from FHLB advances into brokered certificates of deposits, due to the relatively more favorable economics of brokered deposits compared to advances in the current economic environment, and growth in deposits from our branch network and digital channels. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:


	December 31, 2024		June 30, 2024		Increase/ (Decrease)
	(In Thousands)
Non-interest-bearing deposits	$	601,510	$	598,366	$	3,144

Interest-bearing deposits:
Interest-bearing demand	2,380,408		2,308,915		71,493
Savings	742,266		643,481		98,785
Certificates of deposit (retail)	1,194,865		1,199,127		(4,262)
Certificates of deposit (brokered and listing service)	752,011		408,234		343,777
Interest-bearing deposits	5,069,550		4,559,757		509,793
Total deposits	$	5,671,060	$	5,158,123	$	512,937

Uninsured deposits totaled $1.96 billion as of December 31, 2024 compared to $1.77 billion as of June 30, 2024. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $797.7 million, or 14.1% of total deposits, at December 31, 2024 compared to $764.4 million, or 14.8% of total deposits, at June 30, 2024.

Additional information about our deposits at December 31, 2024 and June 30, 2024 is presented in Note 7 to the unaudited consolidated financial statements.

Borrowings. The balance of borrowings decreased by $450.8 million to $1.26 billion at December 31, 2024 from $1.71 billion at June 30, 2024, primarily reflecting a decrease in FHLB and other borrowings offset by an increase in brokered certificates of deposits, as noted above.

At December 31, 2024, we maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.32 billion, an increase of $494.0 million from June 30, 2024, and represents 30.0% of total assets.

Additional information about our borrowings at December 31, 2024 and June 30, 2024 is presented in Note 8 to the unaudited consolidated financial statements.

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Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, decreased $5.5 million to $56.5 million at December 31, 2024 from $62.0 million at June 30, 2024. The change in the balance of these other liabilities generally reflected normal operating fluctuations during the period.

Stockholders’ Equity. Stockholders’ equity decreased $8.7 million to $744.9 million at December 31, 2024 from $753.6 million at June 30, 2024. The decrease in stockholders’ equity during the six months ended December 31, 2024 largely reflected cash dividends of $13.8 million and an other comprehensive loss of $8.9 million, partially offset by net income of $12.7 million. The other comprehensive loss for the six months ended December 31, 2024 was driven by a decrease in the fair value of our derivatives portfolio, partially offset by an increase in the fair value of our available for sale securities.

Book value per share decreased by $0.16 to $11.53 at December 31, 2024 while tangible book value per share decreased by $0.15 to $9.75 at December 31, 2024. These decreases were driven by the decreases in stockholders’ equity, as described above.

Comparison of Operating Results for the Quarter Ended December 31, 2024 and December 31, 2023

Net Income (Loss). Net income for the quarter ended December 31, 2024 was $6.6 million, or $0.10 per diluted share, compared to a net loss of $13.8 million, or $0.22 per diluted share, for the quarter ended December 31, 2023. The increase in net income reflected an increase in non-interest income and decreases in income tax expense and in the provision for credit losses, partially offset by a decrease in net interest income. The net loss for the prior year period included a $12.9 million after-tax net loss on the sale of securities that resulted from a previously announced investment securities repositioning and an after-tax net loss of $6.3 million from the previously disclosed BOLI restructure.

Net Interest Income. Net interest income decreased by $3.2 million to $32.6 million for the quarter ended December 31, 2024 compared to $35.8 million for the quarter ended December 31, 2023. The decrease between the comparative periods resulted from an increase of $2.1 million in interest expense and a decrease of $1.1 million in interest income. Included in net interest income for the quarters ended December 31, 2024 and 2023, respectively, was purchase accounting accretion of $685,000 and $640,000, and loan prepayment penalty income of $288,000 and $185,000.

Net interest margin decreased 12 basis points to 1.82% for the quarter ended December 31, 2024, from 1.94% for the quarter ended December 31, 2023 reflecting an increase in the cost and average balances of interest-bearing deposits and a decrease in the average balance of interest-earning assets, partially offset by a decrease in the cost and average balance of interest-bearing borrowings and an increase in the yield on interest-earning assets.

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Details regarding the composition of, and changes to, net interest income are presented in the table below which reflects the components of the average balance sheet and of net interest income for the periods indicated. We derived the average yields and costs by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented with daily balances used to derive average balances. No tax equivalent adjustments have been made to yield or costs. Non-accrual loans were included in the calculation of average balances, however interest receivable on these loans has been fully reserved for and therefore not included in interest income. The yields and costs set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.


	Three Months Ended December 31,
	2024						2023
	Average Balance		Interest		Average Yield/ Cost		Average Balance		Interest		Average Yield/ Cost
	(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1)	$	5,762,053	$	65,408	4.54	%	$	5,726,321	$	63,384	4.43	%
Taxable investment securities (2)	1,285,800		13,803		4.29		1,509,165		16,756		4.44
Tax-exempt securities (2)	9,711		59		2.42		15,025		84		2.25
Other interest-earning assets (3)	116,354		2,215		7.62		139,740		2,401		6.87
Total interest-earning assets	7,173,918		81,485		4.54		7,390,251		82,625		4.47
Non-interest-earning assets	459,982						554,335
Total assets	$	7,633,900					$	7,944,586

Interest-bearing liabilities:
Interest-bearing demand	$	2,314,378	17,134		2.96		$	2,301,169	16,736		2.91
Savings	711,801		2,300		1.29		664,926		738		0.44
Certificates of deposit (retail)	1,211,985		12,293		4.06		1,292,837		9,892		3.06
Certificates of deposit (brokered and listing service)	735,736		4,994		2.71		531,479		2,974		2.24
Total interest-bearing deposits	4,973,900		36,721		2.95		4,790,411		30,340		2.53
Federal Home Loan Bank advances	1,085,455		10,244		3.78		1,513,497		14,436		3.82
Other borrowings	156,522		1,908		4.88		142,283		2,010		5.65
Borrowings	1,241,977		12,152		3.91		1,655,780		16,446		3.97
Total interest-bearing liabilities	6,215,877		48,873		3.15		6,446,191		46,786		2.90
Non-interest-bearing liabilities (4)	670,173						659,681
Total liabilities	6,886,050						7,105,872
Stockholders' equity	747,850						838,714
Total liabilities and stockholders' equity	$	7,633,900					$	7,944,586

Net interest income			$	32,612					$	35,839
Interest rate spread (5)					1.39	%					1.57	%
Net interest margin (6)					1.82	%					1.94	%
Ratio of interest-earning assets to interest-bearing liabilities	1.15						1.15

___________________________________

(1)Loans held-for-sale and non-accruing loans have been included in loans receivable and the effect of such inclusion was not material. Allowance for credit losses has been included in non-interest-earning assets.

(2)Fair value adjustments have been excluded in the balances of interest-earning assets.

(3)Includes interest-bearing deposits at other banks and FHLB of New York capital stock.

(4)Includes average balances of non-interest-bearing deposits of $604.9 million and $597.3 million for the quarter ended December 31, 2024 and 2023, respectively.

(5)Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(6)Net interest margin represents net interest income as a percentage of average interest-earning assets.

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Provision for Credit Losses. The provision for credit losses decreased $2.0 million to $107,000 for the quarter ended December 31, 2024, compared to $2.1 million for the quarter ended December 31, 2023. The provision for the quarter ended December 31, 2024 was primarily driven by loan growth compared to previous quarter end loan balances. By comparison, the provision for credit losses for the quarter ended December 31, 2023 was driven by charge-offs on three commercial real estate loans, partially offset by a decrease in the balance of loans receivable.

Additional information regarding the ACL and the associated provisions recognized during the quarters ended December 31, 2024 and 2023 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at December 31, 2024 and June 30, 2024.

Non-Interest Income. Total non-interest income increased $20.9 million to $4.9 million for the quarter ended December 31, 2024, compared to a loss of $16.0 million for the quarter ended December 31, 2023.

There were no losses on sale and call of securities during the three months ended December 31, 2024, compared to a loss of $18.1 million recorded in the prior year period. The loss in the prior year period was due to the repositioning of our investment securities portfolio that involved the sale of $122.2 million of available for sale debt securities in December 2023.

We recognized a non-recurring loss of $974,000 attributable to the write-down of one other real estate owned (“OREO”) property during the quarter ended December 31, 2023. No such losses were recorded for the quarter ended December 31, 2024.

Income from BOLI increased $1.5 million to $2.6 million for the quarter ended December 31, 2024, primarily driven by improved income resulting from the BOLI restructure initiated in December 2023, and the absence of non-recurring exchange charges related to the restructure recorded in the prior year period.

The remaining changes in the other components of non-interest income between comparative periods generally reflected normal operating fluctuations within those line items.

Non-Interest Expense. Total non-interest expense decreased $206,000 to $29.6 million for the quarter ending December 31, 2024, compared to $29.8 million the quarter ended December 31, 2023.

Other non-interest expense decreased $724,000 to $3.1 million for the quarter ended December 31, 2024. This decrease reflected a decrease in OREO expenses following the sale of a our sole OREO asset in January 2024.

Salaries and employee benefits increased $297,000 to $17.6 million for quarter ended December 31, 2024. This increase was primarily driven by higher salary expense from annual merit increases.

Equipment and systems expense increased $78,000 to $3.9 million for the quarter ended December 31, 2024, largely driven by increases in technology expense associated with the Company’s ongoing digital banking initiatives.

Advertising and marketing expense increased $10,000 to $311,000 for the quarter ended December 31, 2024, largely driven by an increase in digital and online advertising campaigns to support our deposit growth initiatives.

The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items.

Provision for Income Taxes. Provision for income taxes decreased $531,000 to $1.3 million for the quarter ended December 31, 2024 from $1.8 million for the quarter ended December 31, 2023.

The decrease in income tax expense reflected the absence of discrete tax costs related to the BOLI restructure recorded in the prior comparative period, partially offset by pre-tax income in the current period compared to a pre-tax net loss in the prior comparative period.

Effective tax rates for the quarter ended December 31, 2024 and 2023 were 16.0% and (14.8)%, respectively. The increase in the effective tax rate was primarily due to the absence of discrete tax costs related to the BOLI restructure, as discussed above.

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Comparison of Operating Results for the Six Months Ended December 31, 2024 and December 31, 2023

Net Income (Loss). Net income for the six months ended December 31, 2024 was $12.7 million, or $0.20 per diluted share, compared to a net loss of $4.0 million, or $0.06 per diluted share, for the six months ended December 31, 2023. The increase in net income reflected an increase in non-interest income and decreases in the provision for credit losses and income tax expense, partially offset by a decrease in net interest income. The net loss for the prior year period included a $12.9 million after-tax net loss on the sale of securities that resulted from a previously announced investment securities repositioning and an after-tax net loss of $6.3 million from the previously disclosed BOLI restructure.

Net Interest Income. Net interest income decreased by $9.9 million to $65.1 million for the six months ended December 31, 2024 compared to $75.0 million for the six months ended December 31, 2023. The decrease between the comparative periods resulted from an increase of $10.9 million in interest expense, partially offset by an increase of $944,000 in interest income. Included in net interest income for the six months ended December 31, 2024 and 2023, respectively, was purchase accounting accretion of $340,000 and $1.3 million, and loan prepayment penalty income of $1.3 million and $452,000.

Net interest margin decreased 21 basis points to 1.81% for the six months ended December 31, 2024, from 2.02% for the six months ended December 31, 2023 and reflected an increase in the cost of interest-bearing liabilities and a decrease in the average balance of interest-earning assets, partially offset by increases in the yield on interest-earning assets and a decrease in the average balance of interest-bearing liabilities.

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Details surrounding the composition of, and changes to, net interest income are presented in the table below which reflects the components of the average balance sheet and of net interest income for the periods indicated. We derived the average yields and costs by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented with daily balances used to derive average balances. No tax equivalent adjustments have been made to yield or costs. Non-accrual loans were included in the calculation of average balances, however interest receivable on these loans has been fully reserved for and therefore not included in interest income. The yields and costs set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.


	Six Months Ended December 31,
	2024						2023
	Average Balance		Interest		Average Yield/ Cost		Average Balance		Interest		Average Yield/ Cost
	(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1)	$	5,761,823	$	131,739	4.57	%	$	5,757,197	$	126,153	4.38	%
Taxable investment securities(2)	1,300,373		28,187		4.34		1,512,779		33,021		4.37
Tax-exempt securities(2)	10,977		130		2.36		15,254		171		2.25
Other interest-earning assets(3)	124,167		4,681		7.54		135,285		4,448		6.58
Total interest-earning assets	7,197,340		164,737		4.58		7,420,515		163,793		4.41
Non-interest-earning assets	463,826						561,529
Total assets	$	7,661,166					$	7,982,044

Interest-bearing liabilities:
Interest-bearing demand	$	2,298,493	$	34,996	3.05		$	2,273,500	$	31,204	2.75
Savings	690,020		4,057		1.18		692,217		1,576		0.46
Certificates of deposit (retail)	1,207,878		24,689		4.09		1,320,127		18,733		2.84
Certificates of deposit (brokered and listing service)	643,778		7,997		2.48		576,287		6,394		2.22
Total interest-bearing deposits	4,840,169		71,739		2.96		4,862,131		57,907		2.38
Federal Home Loan Bank advances	1,205,519		22,906		3.80		1,449,985		26,720		3.69
Other borrowings	196,766		5,034		5.12		150,190		4,167		5.55
Borrowings	1,402,285		27,940		3.99		1,600,175		30,887		3.86
Total interest-bearing liabilities	6,242,454		99,679		3.19		6,462,306		88,794		2.75
Non-interest-bearing liabilities(4)	669,448						669,317
Total liabilities	6,911,902						7,131,623
Stockholders' equity	749,264						850,421
Total liabilities and stockholders' equity	$	7,661,166					$	7,982,044

Net interest income			$	65,058					$	74,999
Interest rate spread(5)					1.39	%					1.66	%
Net interest margin(6)					1.81	%					2.02	%
Ratio of interest-earning assets to interest-bearing liabilities	1.15						1.15

___________________________________

(2)Fair value adjustments have been excluded in the balances of interest-earning assets.

(3)Includes interest-bearing deposits at other banks and FHLB of New York capital stock.

(4)Includes average balances of non-interest-bearing deposits of $602.0 million and $604.8 million for the six months ended December 31, 2024 and 2023, respectively.

(5)Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(6)Net interest margin represents net interest income as a percentage of average interest-earning assets.

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Provision for Credit Losses. The provision for credit losses decreased $2.1 million to $215,000 for the six months ended December 31, 2024, compared to $2.4 million for the six months ended December 31, 2023. The provision for the six months ended December 31, 2024 was primarily driven by loan growth. By comparison, the provision for credit losses for the six months ended December 31, 2023 was primarily driven by charge-offs on three related commercial real estate loans.

Additional information regarding the ACL and the associated provisions recognized during the six months ended December 31, 2024 and 2023 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at December 31, 2024 and June 30, 2024.

Non-Interest Income. Total non-interest income increased $21.5 million to $9.5 million for the six months ended December 31, 2024, compared to a loss of $12.0 million for the six months ended December 31, 2023.

There were no gains on sale and call of securities during the six months ended December 31, 2024 compared to a loss of $18.1 million recorded during the prior year period. The loss in the prior period was due to the repositioning of our investment securities portfolio that involved the sale of $122.2 million of available for sale debt securities in December 2023.

We recognized a non-recurring loss of $973,000 attributable to the write-down of one other real estate owned (“OREO”) property during the quarter ended December 31, 2023, while there were no such losses recorded in the current period.

Income from bank owned life insurance increased $2.4 million to $5.2 million for the six months ended December 31, 2024. The increase was primarily due to improved income resulting from the BOLI restructure initiated in December 2023, and the absence of non-recurring exchange charges related to the restructure recorded in the prior year period.

The remaining changes in the other components of non-interest income between comparative periods generally reflected normal operating fluctuations within those line items.

Non-Interest Expense. Total non-interest expense decreased $194,000 to $59.3 million for the six months ended December 31, 2024, compared to $59.5 million for the six months ended December 31, 2023.

Equipment and systems expense increased $137,000 to $7.8 million for the quarter ended December 31, 2024, largely attributable to increases in technology expense associated with the Company's ongoing digital banking initiatives.

Advertising and marketing expense increased $124,000 to $653,000 for the six months ended December 31, 2024. This increase in advertising expense was largely driven by an increase in digital and online advertising campaigns to support our deposit growth initiatives.

Other non-interest expense decreased $669,000 to $6.4 million for the six months ended December 31, 2024. This decrease reflected a decrease in OREO expenses due to the sale of the bank’s sole OREO asset in the quarter ended December 31, 2023, partially offset by an increase in the provision for credit losses on off balance sheet commitments.

The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items.

Provision for Income Taxes. Provision for income taxes decreased $2.8 million to $2.3 million for the six months ended December 31, 2024 from $5.1 million for the six months ended December 31, 2023.

The decrease in income tax expense reflected the absence of $5.7 million of discrete tax cost associated with the BOLI restructure in the prior year period, partially offset by a higher level of pre-tax income in the current year period.

Effective tax rates for the six months ended December 31, 2024 and 2023 were 15.6% and 460.3%, respectively. The decrease in the effective tax rate was primarily due to the absence of discrete tax costs of $5.7 million associated with the BOLI restructure in the prior year period.

Liquidity and Capital Resources

Liquidity, represented by cash and cash equivalents, is a product of operating, investing and financing activities. Our primary sources of funds are deposits, borrowings, cash flows from investment securities and loans receivable and funds provided from operations. While scheduled payments from the amortization and maturity of loans and investment securities are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and prepayments on loans and securities.

At December 31, 2024, liquidity included $141.6 million of short-term cash and cash equivalents and $1.02 billion of investment securities available for sale. As of December 31, 2024, we had the capacity to borrow additional cash funds totaling $2.32 billion and $1.60 billion from the FHLBNY and the Federal Reserve discount window, respectively, without pledging additional collateral. We had the ability to pledge additional securities to borrow an additional $96.0 million at December 31, 2024. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $920.0 million of which none was outstanding.

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At December 31, 2024, we had outstanding commitments to originate and purchase loans totaling $94.8 million while such commitments totaled $47.9 million at June 30, 2024. As of those same dates, our pipeline of loans held for sale included $4.6 million and $16.0 million, respectively, of loans in process whose terms included interest rate locks to borrowers that were paired with a best-efforts commitment to sell the loan to a buyer at a fixed price and within a predetermined timeframe after the sale commitment is established.

Construction loans in process and unused lines of credit were $90.0 million and $156.7 million, respectively, at December 31, 2024 compared to $75.7 million and $157.3 million, respectively, at June 30, 2024. We are also subject to the contingent liabilities resulting from letters of credit whose outstanding balances totaled $160,000 at December 31, 2024 and June 30, 2024, respectively.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the customer. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance-sheet instruments. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Consistent with its goals to operate a sound and profitable financial organization, the Bank actively seeks to maintain its status as a well-capitalized institution in accordance with regulatory standards.

The following table sets forth the Bank’s capital position at December 31, 2024 and June 30, 2024, as compared to the minimum regulatory capital requirements that were in effect as of those dates:


	At December 31, 2024
	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
Total capital (to risk-weighted assets)	$	699,334	14.49	%	$	386,098	8.00	%	$	482,622	10.00	%
Tier 1 capital (to risk-weighted assets)	658,410		13.64	%	289,573		6.00	%	386,098		8.00	%
Common equity tier 1 capital (to risk-weighted assets)	658,410		13.64	%	217,180		4.50	%	313,704		6.50	%
Tier 1 capital (to adjusted total assets)	658,410		8.63	%	305,045		4.00	%	381,306		5.00	%


	At June 30, 2024
	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
Total capital (to risk-weighted assets)	$	688,597	14.42	%	$	382,034	8.00	%	$	477,542	10.00	%
Tier 1 capital (to risk-weighted assets)	651,620		13.65	%	286,525		6.00	%	382,034		8.00	%
Common equity tier 1 capital (to risk-weighted assets)	651,620		13.65	%	214,894		4.50	%	310,402		6.50	%
Tier 1 capital (to adjusted total assets)	651,620		8.44	%	308,656		4.00	%	385,820		5.00	%

The following table sets forth the Company’s capital position at December 31, 2024 and June 30, 2024, as compared to the minimum regulatory capital requirements that were in effect as of those dates:


	At December 31, 2024
	Actual				For Capital Adequacy Purposes
	Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
Total capital (to risk-weighted assets)	$	745,298	15.43	%	$	386,334	8.00	%
Tier 1 capital (to risk-weighted assets)	704,374		14.59	%	289,751		6.00	%
Common equity tier 1 capital (to risk-weighted assets)	704,374		14.59	%	217,313		4.50	%
Tier 1 capital (to adjusted total assets)	704,374		9.22	%	305,485		4.00	%

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	At June 30, 2024
	Actual				For Capital Adequacy Purposes
	Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
Total capital (to risk-weighted assets)	$	743,741	15.57	%	$	382,247	8.00	%
Tier 1 capital (to risk-weighted assets)	706,764		14.79	%	286,685		6.00	%
Common equity tier 1 capital (to risk-weighted assets)	706,764		14.79	%	215,014		4.50	%
Tier 1 capital (to adjusted total assets)	706,764		9.15	%	309,031		4.00	%

In March 2020, the federal banking agencies announced an interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss method, followed by a three-year transition period established in the previous rule (five-year transition option). We have adopted the capital transition relief over the permissible five-year period. The two-year delay ended for us as of June 30, 2022 and we then began the three-year transition period.

Off-Balance Sheet Arrangements

In the normal course of our business of investing in loans and securities we are a party to financial instruments with off-balance-sheet risk. These financial instruments include significant purchase commitments, such as commitments related to capital expenditure plans and commitments to extend credit to meet the financing needs of our customers. We had no significant off-balance sheet commitments for capital expenditures as of December 31, 2024.

Recent Accounting Pronouncements

For a discussion of the expected impact of recently issued accounting pronouncements that we have adopted, please refer to Note 3 to the unaudited consolidated financial statements.

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The majority of our assets and liabilities are sensitive to changes in interest rates and as such, interest rate risk is a significant form of market risk that we must manage. Interest rate risk is generally defined in regulatory nomenclature as the risk to earnings or capital arising from the movement of interest rates and arises from several risk factors including re-pricing risk, basis risk, yield curve risk and option risk. We maintain an Asset/Liability Management (“ALM”) program in order manage our interest rate risk. The program is overseen by the Board of Directors through its Interest Rate Risk Management Committee which has assigned the responsibility for the operational aspects of the ALM program to our Asset/Liability Management Committee (“ALCO”), which is comprised of various members of the senior and executive management team.

The quantitative analysis that we conduct measures interest rate risk from both a capital and earnings perspective. With regard to earnings, movements in interest rates and the shape of the yield curve significantly influence the amount of net interest income (“NII”) that we recognize. Movements in market interest rates, and the effect of such movements on the risk factors noted above, significantly influence the spread between the interest earned on our interest-earning assets and the interest paid on our interest-bearing liabilities. Our internal interest rate risk analysis calculates the sensitivity of our projected NII over a one year period utilizing a static balance sheet assumption through which incoming and outgoing asset and liability cash flows are reinvested into similar instruments. Product pricing and earning asset prepayment speeds are appropriately adjusted for each rate scenario.

With regard to capital, our internal interest rate risk analysis calculates the sensitivity of our Economic Value of Equity (“EVE”) to movements in interest rates. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet instruments. EVE attempts to quantify our economic value using a discounted cash flow methodology. The degree to which our EVE changes for any hypothetical interest rate scenario from its base case measurement is a reflection of our sensitivity to interest rate risk.

For both earnings and capital at risk, our interest rate risk analysis calculates a base case scenario that assumes no change in interest rates. The model then measures changes throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve up and down 100, 200 and 300 basis points with additional scenarios modeled where appropriate. The model requires that interest rates remain positive for all points along the yield curve for each rate scenario which may preclude the modeling of certain falling rate scenarios during periods of lower market interest rates.

The following tables present the results of our internal EVE and NII analyses as of December 31, 2024 and June 30, 2024, respectively:


	December 31, 2024
					1 to 12 Months				13 to 24 Months
Change in Interest Rates	EVE		% Change in EVE		NII		% Change in NII		NII		% Change in NII
	(Dollars in Thousands)
+300 bps	$	346,622	(39.08)	%	$	136,617	(8.72)	%	$	150,669	(10.73)	%
+200 bps	411,668		(27.64)	%	139,942		(6.50)	%	155,579		(7.82)	%
+100 bps	491,516		(13.61)	%	143,877		(3.87)	%	161,978		(4.03)	%
0 bps	568,945		—		149,663		—		168,782		—
-100 bps	643,182		13.05	%	154,681		3.35	%	176,309		4.46	%
-200 bps	695,443		22.23	%	158,304		5.77	%	181,190		7.35	%
-300 bps	757,157		33.08	%	162,842		8.81	%	184,993		9.60	%


	June 30, 2024
					1 to 12 Months				13 to 24 Months
Change in Interest Rates	EVE		% Change in EVE		NII		% Change in NII		NII		% Change in NII
	(Dollars in Thousands)
+300 bps	$	331,842	(41.07)	%	$	127,382	(8.51)	%	$	135,753	(10.66)	%
+200 bps	400,548		(28.87)	%	131,003		(5.91)	%	140,351		(7.64)	%
+100 bps	483,724		(14.10)	%	135,289		(2.83)	%	146,594		(3.53)	%
0 bps	563,098		—		139,236		—		151,955		—
-100 bps	640,024		13.66	%	144,991		4.13	%	157,821		3.86	%
-200 bps	693,495		23.16	%	148,189		6.43	%	159,928		5.25	%
-300 bps	767,451		36.29	%	150,478		8.07	%	160,093		5.36	%

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There are numerous internal and external factors that may contribute to changes in our EVE and its sensitivity. Changes in the composition and allocation of our balance sheet, or utilization of off-balance sheet instruments such as derivatives, can significantly alter the exposure to interest rate risk as quantified by the changes in the EVE sensitivity measures. Changes to certain external factors, most notably changes in the level of market interest rates and overall shape of the yield curve, can also alter the projected cash flows of our interest-earning assets and interest-costing liabilities and the associated present values thereof.

Notwithstanding the rate change scenarios presented in the EVE and NII-based analyses above, future interest rates and their effect on net interest income are not predictable. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, prepayments and deposit run-offs and should not be relied upon as indicative of actual results. Certain shortcomings are inherent in this type of computation. Although certain assets and liabilities may have similar maturities or periods of re-pricing, they may react at different times and in different degrees to changes in market interest rates. The interest rate on certain types of assets and liabilities, such as demand deposits and savings accounts, may fluctuate in advance of changes in market interest rates, while rates on other types of assets and liabilities may lag behind changes in market interest rates. Certain assets, such as adjustable-rate mortgages, generally have features which restrict changes in interest rates on a short-term basis and over the life of the asset. In the event of a change in interest rates, prepayments and early withdrawal levels could deviate significantly from those assumed in the analyses set forth above. Additionally, an increase in credit risk may result as the ability of borrowers to service their debt may decrease in the event of an interest rate increase.

ITEM 4.

CONTROLS AND PROCEDURES

As of the end of the period covered by this Report, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended). Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended December 31, 2024, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II

ITEM 1. Legal Proceedings

At December 31, 2024, neither the Company nor the Bank were involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which involve amounts in the aggregate believed by management to be immaterial to the financial condition of the Company and the Bank.

ITEM 1A. Risk Factors

There have been no material changes to the Risk Factors previously disclosed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended June 30, 2024, previously filed with the Securities and Exchange Commission.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company did not repurchase any shares of its common stock during the three month period ended December 31, 2024.

ITEM 3. Defaults Upon Senior Securities

Not applicable.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

Securities Trading Plans of Directors and Executive Officers

During the three months ended December 31, 2024, none of our directors or executive officers or any contract, instruction or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement.”

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ITEM 6. Exhibits

The following Exhibits are filed as part of this report:


3.1						Articles of Incorporation of Kearny Financial Corp. (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-198602), originally filed on September 5, 2014)
3.2						Amended and Restated Bylaws of Kearny Financial Corp. (Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on August 16, 2023 )
4						Form of Common Stock Certificate of Kearny Financial Corp. (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-198602), originally filed on September 5, 2014)
31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101						The following materials from the Company’s Form 10-Q for the quarter ended December 31, 2024, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.
101.INS						Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document)
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	KEARNY FINANCIAL CORP.

Date: February 6, 2025	By:	/s/ Craig L. Montanaro
		Craig L. Montanaro
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: February 6, 2025	By:	/s/ Sean Byrnes
		Sean Byrnes
		Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Kearny Financial Corp. - Quarter Report: 2024 December (Form 10-Q)

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