FAIRFIELD, N.J., July 29, 2021 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the "Company"), the holding company of Kearny Bank (the "Bank"), reported net income for the quarter ended June 30, 2021 of $18.5 million, or $0.24 per diluted share, compared to $16.4 million, or $0.20 per diluted share, for the quarter ended March 31, 2021. The results for the quarter ended June 30, 2021 were favorably impacted by a provision for credit loss reversal of $4.9 million, reflecting the impact of an improved economic forecast and credit risk outlook.

For the fiscal year ended June 30, 2021, the Company reported net income of $63.2 million, or $0.77 per diluted share, compared to $45.0 million, or $0.55 per diluted share, for the fiscal year ended June 30, 2020. Excluding the impact of non-recurring items, including items associated with the Company's acquisition of MSB Financial Corp. ("MSB"), net income for the fiscal year ended June 30, 2021 would have been $66.7 million, or $0.81 per diluted share.

Craig L. Montanaro, President and Chief Executive Officer, commented, "This fiscal year, while challenging in many respects, represented a significant step forward in our evolution as a full-service community bank. The incremental reallocation of our balance sheet, with a particular focus on high-value commercial loan and deposit relationships, has led to noteworthy improvements in net interest margin, net income and earnings per share. Along with our improved performance has come a cultural evolution for the Company, with an enhanced focus, both strategically and financially, on technological excellence and the client experience. While these elements are crucial to our future prosperity, we must stay true to our core beliefs that our people, performance and relationships are the bedrock of our success. To us, this means never straying from our roots in the communities that we serve and retaining the local decision making authority which has defined us for over 130 years."

Fiscal Year End 2021 Highlights

Net income increased 40.6%, to $63.2 million, while earnings per share increased 39.5%, to $0.77 per diluted share.
Net interest margin increased 30 basis points to 2.75%, while net interest income increased 23.5% to $184.5 million.
Completed acquisition of MSB on July 10, 2020 adding total assets of $581.9 million, net loans of $530.2 million and total deposits of $460.2 million.
Core non-maturity deposits, excluding acquired balances, grew $712.5 million, or 27.5%, including organic growth of 29.4% in non-interest-bearing deposits.
Gain on sale of loans increased $2.4 million, or 75.0%, largely driven by increased mortgage banking activity.

Balance Sheet Summary

Total assets at June 30, 2021, were $7.28 billion, a decrease of $74.3 million, or 1.0%, from March 31, 2021 and an increase of $525.6 million, or 7.8%, from June 30, 2020.
Deposits totaled $5.49 billion at June 30, 2021, an increase of $110.9 million, or 2.1%, from March 31, 2021 and $1.1 billion, or 23.8%, from June 30, 2020. For those same comparative periods core non-maturity deposits increased by $33.1 million and $1.02 billion, respectively.
Loans receivable totaled $4.85 billion at June 30, 2021, an increase of $53.2 million, or 1.1%, from March 31, 2021 and $353.0 million, or 7.8%, from June 30, 2020.
Investment securities totaled $1.72 billion at June 30, 2021, a decrease of $91.1 million, or 5.0%, from March 31, 2021 and an increase of $296.7 million, or 20.9%, from June 30, 2020.
Borrowings totaled $685.9 million at June 30, 2021, a decrease of $179.9 million, or 20.8% from March 31, 2021 and $487.3 million, or 41.5% from June 30, 2020.

Operating Results

Performance Highlights

Return on average assets ("ROAA") improved to 1.01% and 0.86%, for the quarter and year ended June 30, 2021, respectively. Excluding the impact of non-recurring items, ROAA would have been 1.04% and 0.91% for the same comparative periods.
Return on average equity improved to 7.01% and 5.79% for the quarter and year ended June 30, 2021, respectively, while return on average tangible equity improved to 8.81% and 7.22% for the same comparative periods. Excluding the impact of non-recurring items, return on average tangible equity would have been 9.04% and 7.61% for the quarter and year ended June 30, 2021, respectively.

Net Interest Income and Net Interest Margin

Net interest margin increased four basis points to 2.87% for the quarter ended June 30, 2021 and 30 basis points to 2.75% for the year ended June 30, 2021. The increase in net interest margin was largely the result of a reduction in the cost of interest-bearing liabilities and an increase in the average balance of non-interest-bearing deposits, partially offset by a decrease in the yield on interest-earning assets.
Net interest income increased by $532,000 to $48.2 million for the quarter ended June 30, 2021 from $47.6 million for the quarter ended March 31, 2021. Included in net interest income, for the quarters ended June 30, 2021 and March 31, 2021, was purchase accounting accretion of $3.1 million and $4.8 million, respectively. For the year ended June 30, 2021, net interest income increased by $35.2 million, or 23.5%, to $184.5 million from $149.4 million for the year ended June 30, 2020.

Non-Interest Income

Fees and service charges totaled $1.3 million for the quarter ended June 30, 2021, unchanged from the quarter ended March 31, 2021. For the year ended June 30, 2021 fees and service charges decreased by $1.0 million to $5.6 million, largely attributable to a decrease of $836,000 in loan pre-payment penalty income to $3.8 million.
Gain on sale and call of securities totaled $313,000 for the quarter ended June 30, 2021 compared to $18,000 for the quarter ended March 31, 2021. For the year ended June 30, 2021, gain on sale and call of securities totaled $767,000 compared to $2.3 million for the year ended June 30, 2020.
Gain on sale of loans decreased by $580,000 to $363,000 for the quarter ended June 30, 2021 from $943,000 for the quarter ended March 31, 2021. The decrease was largely attributable to the strategic decision to retain a comparatively greater percentage of originated loans within the portfolio. For the year ended June 30, 2021, gain on sale of loans totaled $5.6 million compared to $3.2 million for the year ended June 30, 2020. This growth largely reflected increases in both the volume and net price of residential mortgage loans originated and sold during the period and, to a lesser extent, $352,000 of gains on sale of Paycheck Protection Program ("PPP") loans.
For the year ended June 30, 2021, a non-recurring bargain purchase gain of $3.1 million was recognized in conjunction with the acquisition of MSB.
Included in other income for the quarter and year ended June 30, 2021 were non-recurring gains of $205,000 and $1.0 million, respectively, attributable to the sale of properties which previously served as a Kearny Bank retail branch locations and were sold in connection with branch consolidation activities.

Non-Interest Expense

Non-interest expense increased by $2.2 million to $32.0 million for the quarter ended June 30, 2021 compared to $29.8 million for the quarter ended March 31, 2021. The increase was largely attributable to asset impairment charges of $2.0 million as described in further detail below.
Non-interest expense increased by $18.3 million to $125.9 million for the year ended June 30, 2021 compared to $107.6 million for the year ended June 30, 2020. This increase was largely attributable to increases in personnel, technology and occupancy expense associated, in part, with the MSB acquisition, along with increases in merger-related expense, FDIC insurance expense and other expense.
Included in other expense for the quarter and year ended June 30, 2021 were asset impairment charges totaling $2.0 million and $2.7 million, respectively. These charges, for the quarter and year ended June 30, 2021, primarily reflected net losses of $1.2 million and $1.9 million, respectively, arising from the transfer of various branch and administrative facilities to held-for-sale status. An additional impairment of $800,000 was recognized during the quarter ended June, 30, 2021 attributable to the partial write-down of the value of the Company's equity investment in a start-up financial technology company whose remaining book value totaled $200,000 as of that date.
Also included in other expense, for the quarter and year ended June 30, 2021, were provisions for credit losses on off-balance sheet credit exposures, as required under the Current Expected Credit Loss ("CECL") standard, of $443,000 and $1.2 million, respectively. No such expense was recorded in the fiscal year ended June 30, 2020.
The efficiency and non-interest expense ratios were 60.86% and 1.75%, respectively, for the quarter ended June 30, 2021 and 60.16% and 1.72%, respectively, for the year ended June 30, 2021. Excluding the impact of non-recurring items, the efficiency and non-interest expense ratios for the year ended June 30, 2021 would have been 58.22% and 1.62%, respectively.

Income Taxes

Income tax expense totaled $7.0 million for the quarter ended June 30, 2021 compared to $5.7 million for the quarter ended March 31, 2021, resulting in effective tax rates of 27.6% and 25.9%, respectively. For the year ended June 30, 2021, income tax expense was $21.3 million compared to $12.3 million for the year ended June 30, 2020 resulting in effective tax rates of 25.2% and 21.5%, respectively.

Asset Quality

The balance of non-performing loans totaled $79.8 million, or 1.64% of total loans, at June 30, 2021, compared to $71.4 million, or 1.49% of total loans, at March 31, 2021 and $36.7 million, or 0.82% of total loans, at June 30, 2020.
As of June 30, 2021, the Company had active COVID-19 payment deferrals on 10 loans totaling $5.6 million, representing 0.12% of total loans.
Net charge offs totaled $656,000, or 0.05% of average loans, for the quarter ended June 30, 2021 compared to $750,000, or 0.06% of average loans, for the quarter ended March 31, 2021. Net charge offs for the quarter were largely attributable to the partial charge-off of one wholesale commercial business loan totaling $592,000. For the year ended June 30, 2021, net charge offs totaled $1.6 million, or 0.03% of average loans, compared to $144,000, or 0.00% of average loans, for the year ended June 30, 2020.
For the quarter and year ended June 30, 2021, the Company recorded provision for credit loss reversals of $4.9 million and $1.1 million, respectively, compared to provision for credit losses of $1.1 million for the quarter ended March 31, 2021 and $4.2 million for the year ended June 30, 2020. The provision reversals for the quarter and year ended June 30, 2021 primarily reflected an improved economic forecast and credit risk outlook resulting in a release of reserves within multiple loan segments. By comparison, the provision for the year ended June 30, 2020 was largely attributable to increases in qualitative factors associated with the economic impact of COVID-19.
The Allowance for Credit Losses ("ACL") totaled $58.2 million, or 1.19% of total loans, at June 30, 2021, a decrease from $63.8 million, or 1.32% of total loans at March 31, 2021 and an increase from $37.3 million, or 0.82% of total loans, at June 30, 2020. As previously disclosed, on July 1, 2020, the Company adopted ASU 2016-13, also known as the CECL standard. At adoption, the Company increased its ACL by $19.6 million and $536,000, respectively, for loans and off-balance sheet credit exposures and recognized a cumulative effect adjustment that reduced stockholders' equity by $14.2 million, net of tax.
On July 10, 2020 the Company completed its acquisition of MSB, which resulted in an increase to the ACL of $9.0 million. Of this increase, $3.9 million was attributable to PCD loans and was recorded as an adjustment to their amortized cost basis. The remaining $5.1 million increase was attributable to non-PCD loans and was recorded via a provision for credit losses.

Capital

During the quarter and year ended June 30, 2021, the Company repurchased 3,031,820 and 10,567,073 shares of common stock at a cost of $38.5 million and $119.0 million, or $12.68 and $11.26 per share, respectively.
For the quarter ended June 30, 2021, the Company increased its quarterly cash dividend to $0.10 per common share. For the year ended June 30, 2021, cash dividends paid totaled $0.35 per share, an increase of 20.7% from the year ended June 30, 2020.
Book value per share totaled $13.21 at June 30, 2021, an increase of $0.23 from March 31, 2021 and $0.25 from June 30, 2020, while tangible book value per share totaled $10.49 at June 30, 2021, an increase of $0.13 from March 31, 2021 and $0.10 from June 30, 2020.
At June 30, 2021, the Company's ratio of tangible equity to tangible assets equaled 11.72% and the regulatory capital ratios, of both the Company and the Bank, were in excess of the levels required by federal banking regulators to be classified as "well-capitalized" under regulatory guidelines.

Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

In addition, the COVID-19 pandemic has had, and may continue to have, an adverse impact on the Company, its clients and the communities it serves. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including whether the coronavirus can continue to be controlled and abated and if the economy is able to remain open. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially remain open, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for credit losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; as the result of the decline in the Federal Reserve Board's target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; due to a decline in our stock price or other factors, goodwill may become impaired and be required to be written down; and our cyber security risks are increased as the result of an increase in the number of employees working remotely.

Category: Earnings

Linked-Quarter Comparative Financial Analysis

Summary Balance Sheet	At									Variance
(Dollars and Shares in Thousands,	June 30,			March 31,			Variance			or Change
Except Per Share Data, Unaudited)	2021			2021			or Change			Pct.
Assets
Cash and cash equivalents	$	67,855		$	108,991		$	(41,136	)		-37.7	%
Securities available for sale		1,676,864			1,778,970			(102,106	)		-5.7	%
Securities held to maturity		38,138			27,168			10,970			40.4	%
Loans held-for-sale		16,492			5,172			11,320			218.9	%
Loans receivable		4,851,394			4,798,239			53,155			1.1	%
Less: allowance for credit losses on loans		(58,165	)		(63,762	)		5,597			-8.8	%
Net loans receivable		4,793,229			4,734,477			58,752			1.2	%
Premises and equipment		56,338			60,360			(4,022	)		-6.7	%
Federal Home Loan Bank stock		36,615			45,578			(8,963	)		-19.7	%
Accrued interest receivable		19,362			20,562			(1,200	)		-5.8	%
Goodwill		210,895			210,895			-			0.0	%
Core deposit intangible		3,705			3,888			(183	)		-4.7	%
Bank owned life insurance		283,310			281,765			1,545			0.5	%
Deferred income taxes, net		29,323			32,230			(2,907	)		-9.0	%
Other real estate owned		178			178			-			0.0	%
Other assets		51,431			47,760			3,671			7.7	%
Total assets	$	7,283,735		$	7,357,994		$	(74,259	)		-1.0	%

Liabilities
Deposits:
Non-interest-bearing	$	593,718		$	545,746		$	47,972			8.8	%
Interest-bearing		4,891,588			4,828,706			62,882			1.3	%
Total deposits		5,485,306			5,374,452			110,854			2.1	%
Borrowings		685,876			865,763			(179,887	)		-20.8	%
Advance payments by borrowers for taxes		15,752			15,300			452			3.0	%
Other liabilities		53,857			38,667			15,190			39.3	%
Total liabilities		6,240,791			6,294,182			(53,391	)		-0.8	%

Stockholders' Equity
Common stock		790			820			(30	)		-3.7	%
Paid-in capital		654,396			691,280			(36,884	)		-5.3	%
Retained earnings		408,367			397,594			10,773			2.7	%
Unearned ESOP shares		(26,753	)		(27,239	)		486			-1.8	%
Accumulated other comprehensive income		6,144			1,357			4,787			352.8	%
Total stockholders' equity		1,042,944			1,063,812			(20,868	)		-2.0	%
Total liabilities and stockholders' equity	$	7,283,735		$	7,357,994		$	(74,259	)		-1.0	%

Consolidated capital ratios
Equity to assets		14.32	%		14.46	%		-0.14	%
Tangible equity to tangible assets ⁽¹⁾		11.72	%		11.89	%		-0.17	%

Share data
Outstanding shares		78,965			81,943			(2,978	)		-3.6	%
Book value per share	$	13.21		$	12.98		$	0.23			1.7	%
Tangible book value per share⁽²⁾	$	10.49		$	10.36		$	0.13			1.2	%

____________________

(1)		Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets.
(2)		Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.

Summary Income Statement	For the three months ended									Variance
(Dollars and Shares in Thousands,	June 30,			March 31,			Variance			or Change
Except Per Share Data, Unaudited)	2021			2021			or Change			Pct.
Interest income
Loans	$	47,562		$	49,307		$	(1,745	)		-3.5	%
Taxable investment securities		8,304			7,891			413			5.2	%
Tax-exempt investment securities		355			410			(55	)		-13.4	%
Other interest-earning assets		549			705			(156	)		-22.1	%
Total Interest Income		56,770			58,313			(1,543	)		-2.6	%

Interest expense
Deposits		5,156			6,670			(1,514	)		-22.7	%
Borrowings		3,451			4,012			(561	)		-14.0	%
Total interest expense		8,607			10,682			(2,075	)		-19.4	%
Net interest income		48,163			47,631			532			1.1	%
(Reversal of) provision for credit losses		(4,941	)		1,126			(6,067	)		-538.8	%
Net interest income after (reversal of) provision for credit losses		53,104			46,505			6,599			14.2	%

Non-interest income
Fees and service charges		1,325			1,325			-			0.0	%
Gain on sale and call of securities		313			18			295			1638.9	%
Gain on sale of loans		363			943			(580	)		-61.5	%
Income from bank owned life insurance		1,545			1,530			15			1.0	%
Electronic banking fees and charges		452			456			(4	)		-0.9	%
Other income		400			1,194			(794	)		-66.5	%
Total non-interest income		4,398			5,466			(1,068	)		-19.5	%

Non-interest expense
Salaries and employee benefits		17,777			16,965			812			4.8	%
Net occupancy expense of premises		2,998			3,433			(435	)		-12.7	%
Equipment and systems		3,575			3,823			(248	)		-6.5	%
Advertising and marketing		581			567			14			2.5	%
Federal deposit insurance premium		490			488			2			0.4	%
Directors' compensation		749			748			1			0.1	%
Other expense		5,816			3,792			2,024			53.4	%
Total non-interest expense		31,986			29,816			2,170			7.3	%
Income before income taxes		25,516			22,155			3,361			15.2	%
Income taxes		7,033			5,732			1,301			22.7	%
Net income	$	18,483		$	16,423		$	2,060			12.5	%

Net income per common share (EPS)
Basic	$	0.24		$	0.20		$	0.04
Diluted	$	0.24		$	0.20		$	0.04

Dividends declared
Cash dividends declared per common share	$	0.10		$	0.09		$	0.01
Cash dividends declared	$	7,710		$	7,205		$	505
Dividend payout ratio		41.7	%		43.9	%		-2.2	%

Weighted average number of common shares outstanding
Basic		77,658			80,673			(3,015	)
Diluted		77,680			80,690			(3,010	)

	For the three months ended									Variance
Average Balance Sheet Data	June 30,			March 31,			Variance			or Change
(Dollars in Thousands, Unaudited)	2021			2021			or Change			Pct.
Assets
Interest-earning assets:
Loans receivable, including loans held for sale	$	4,817,980		$	4,816,592		$	1,388			0.0	%
Taxable investment securities		1,720,838			1,674,223			46,615			2.8	%
Tax-exempt investment securities		63,047			73,573			(10,526	)		-14.3	%
Other interest-earning assets		117,212			169,291			(52,079	)		-30.8	%
Total interest-earning assets		6,719,077			6,733,679			(14,602	)		-0.2	%
Non-interest-earning assets		609,762			617,440			(7,678	)		-1.2	%
Total assets	$	7,328,839		$	7,351,119		$	(22,280	)		-0.3	%

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	1,930,193		$	1,831,617		$	98,576			5.4	%
Savings		1,118,402			1,084,981			33,421			3.1	%
Certificates of deposit		1,934,650			1,904,234			30,416			1.6	%
Total interest-bearing deposits		4,983,245			4,820,832			162,413			3.4	%
Borrowings:
Federal Home Loan Bank advances		665,802			865,690			(199,888	)		-23.1	%
Other borrowings		6,670			-			6,670			0.0	%
Total borrowings		672,472			865,690			(193,218	)		-22.3	%
Total interest-bearing liabilities		5,655,717			5,686,522			(30,805	)		-0.5	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		566,632			525,018			41,614			7.9	%
Other non-interest-bearing liabilities		52,292			57,018			(4,726	)		-8.3	%
Total non-interest-bearing liabilities		618,924			582,036			36,888			6.3	%
Total liabilities		6,274,641			6,268,558			6,083			0.1	%
Stockholders' equity		1,054,198			1,082,561			(28,363	)		-2.6	%
Total liabilities and stockholders' equity	$	7,328,839		$	7,351,119		$	(22,280	)		-0.3	%

Average interest-earning assets to average interest-bearing liabilities		118.80	%		118.41	%		0.39	%		0.3	%

	For the three months ended
	June 30,			March 31,			Variance
Performance Ratio Highlights	2021			2021			or Change
Average yield on interest-earning assets:
Loans receivable, including loans held for sale		3.95	%		4.09	%		-0.14	%
Taxable investment securities		1.93	%		1.89	%		0.04	%
Tax-exempt investment securities ⁽¹⁾		2.25	%		2.23	%		0.02	%
Other interest-earning assets		1.87	%		1.67	%		0.20	%
Total interest-earning assets		3.38	%		3.46	%		-0.08	%

Average cost of interest-bearing liabilities:
Deposits:
Interest-bearing demand		0.27	%		0.34	%		-0.07	%
Savings		0.15	%		0.21	%		-0.06	%
Certificates of deposit		0.71	%		0.96	%		-0.25	%
Total interest-bearing deposits		0.41	%		0.55	%		-0.14	%
Borrowings:
Federal Home Loan Bank advances		2.07	%		1.85	%		0.22	%
Other borrowings		0.07	%		0.00	%		0.07	%
Total borrowings		2.05	%		1.85	%		0.20	%
Total interest-bearing liabilities		0.61	%		0.75	%		-0.14	%

Interest rate spread⁽²⁾		2.77	%		2.71	%		0.06	%
Net interest margin⁽³⁾		2.87	%		2.83	%		0.04	%

Non-interest income to average assets (annualized)		0.24	%		0.30	%		-0.06	%
Non-interest expense to average assets (annualized)		1.75	%		1.62	%		0.13	%

Efficiency ratio⁽⁴⁾		60.86	%		56.15	%		4.71	%

Return on average assets (annualized)		1.01	%		0.89	%		0.12	%
Return on average equity (annualized)		7.01	%		6.07	%		0.94	%
Return on average tangible equity (annualized) ⁽⁵⁾		8.81	%		7.57	%		1.24	%

____________________

(1)		The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
(2)		Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
(3)		Net interest income divided by average interest-earning assets.
(4)		Non-interest expense divided by the sum of net interest income and non-interest income.
(5)		Average tangible equity equals total average stockholders' equity reduced by average goodwill and average core deposit intangible assets.

Year-to-Year Comparative Financial Analysis

Summary Balance Sheet	At									Variance
(Dollars and Shares in Thousands,	June 30,			June 30,			Variance			or Change
Except Per Share Data, Unaudited)	2021			2020			or Change			Pct.
Assets
Cash and cash equivalents	$	67,855		$	180,967		$	(113,112	)		-62.5	%
Securities available for sale		1,676,864			1,385,703			291,161			21.0	%
Securities held to maturity		38,138			32,556			5,582			17.1	%
Loans held-for-sale		16,492			20,789			(4,297	)		-20.7	%
Loans receivable, including yield adjustments		4,851,394			4,498,397			352,997			7.8	%
Less: allowance for credit losses on loans		(58,165	)		(37,327	)		(20,838	)		55.8	%
Net loans receivable		4,793,229			4,461,070			332,159			7.4	%
Premises and equipment		56,338			57,389			(1,051	)		-1.8	%
Federal Home Loan Bank of New York stock		36,615			58,654			(22,039	)		-37.6	%
Accrued interest receivable		19,362			17,373			1,989			11.4	%
Goodwill		210,895			210,895			-			0.0	%
Core deposit intangible		3,705			3,995			(290	)		-7.3	%
Bank owned life insurance		283,310			262,380			20,930			8.0	%
Deferred income tax assets, net		29,323			25,480			3,843			15.1	%
Other real estate owned		178			178			-			0.0	%
Other assets		51,431			40,746			10,685			26.2	%
Total assets	$	7,283,735		$	6,758,175		$	525,560			7.8	%

Liabilities
Deposits:
Non-interest-bearing	$	593,718		$	419,138		$	174,580			41.7	%
Interest-bearing		4,891,588			4,011,144			880,444			21.9	%
Total deposits		5,485,306			4,430,282			1,055,024			23.8	%
Borrowings		685,876			1,173,165			(487,289	)		-41.5	%
Advance payments by borrowers for taxes		15,752			16,569			(817	)		-4.9	%
Other liabilities		53,857			53,982			(125	)		-0.2	%
Total liabilities		6,240,791			5,673,998			566,793			10.0	%

Stockholders' Equity
Common stock		790			837			(47	)		-5.6	%
Paid-in capital		654,396			722,871			(68,475	)		-9.5	%
Retained earnings		408,367			387,911			20,456			5.3	%
Unearned ESOP shares		(26,753	)		(28,699	)		1,946			-6.8	%
Accumulated other comprehensive income		6,144			1,257			4,887			388.8	%
Total stockholders' equity		1,042,944			1,084,177			(41,233	)		-3.8	%
Total liabilities and stockholders' equity	$	7,283,735		$	6,758,175		$	525,560			7.8	%

Consolidated capital ratios
Equity to assets		14.32	%		16.04	%		-1.72	%
Tangible equity to tangible assets ⁽¹⁾		11.72	%		13.29	%		-1.57	%

Share data
Outstanding shares		78,965			83,663			(4,698	)		-5.6	%
Book value per share	$	13.21		$	12.96		$	0.25			1.9	%
Tangible book value per share ⁽²⁾	$	10.49		$	10.39		$	0.10			1.0	%

Summary Income Statement	For the year ended									Variance
(Dollars and Shares in Thousands,	June 30,			June 30,			Variance			or Change
Except Per Share Data, Unaudited)	2021			2020			or Change			Pct.
Interest income
Loans	$	198,515		$	187,003		$	11,512			6.2	%
Taxable investment securities		31,238			39,321			(8,083	)		-20.6	%
Tax-exempt investment securities		1,652			2,393			(741	)		-31.0	%
Other interest-earning assets		2,955			4,491			(1,536	)		-34.2	%
Total Interest Income		234,360			233,208			1,152			0.5	%

Interest expense
Deposits		31,535			58,852			(27,317	)		-46.4	%
Borrowings		18,316			25,002			(6,686	)		-26.7	%
Total interest expense		49,851			83,854			(34,003	)		-40.6	%
Net interest income		184,509			149,354			35,155			23.5	%
(Reversal of) provision for credit losses		(1,121	)		4,197			(5,318	)		-126.7	%
Net interest income after (reversal of) provision for credit losses		185,630			145,157			40,473			27.9	%

Non-interest income
Fees and service charges		5,622			6,647			(1,025	)		-15.4	%
Gain on sale and call of securities		767			2,250			(1,483	)		-65.9	%
Gain on sale of loans		5,574			3,186			2,388			75.0	%
Loss on sale of real estate owned		-			(28	)		28			-100.0	%
Income from bank owned life insurance		6,267			6,225			42			0.7	%
Electronic banking fees and charges		1,717			1,245			472			37.9	%
Bargain purchase gain		3,053			-			3,053			0.0	%
Other income		1,751			194			1,557			802.6	%
Total non-interest income		24,751			19,719			5,032			25.5	%

Non-interest expense
Salaries and employee benefits		68,800			62,015			6,785			10.9	%
Net occupancy expense of premises		12,673			11,424			1,249			10.9	%
Equipment and systems		14,870			11,755			3,115			26.5	%
Advertising and marketing		2,161			2,788			(627	)		-22.5	%
Federal deposit insurance premium		1,940			286			1,654			578.3	%
Directors' compensation		2,993			3,079			(86	)		-2.8	%
Merger-related expenses		4,349			951			3,398			357.3	%
Debt extinguishment expenses		796			2,156			(1,360	)		-63.1	%
Other expense		17,303			13,170			4,133			31.4	%
Total non-interest expense		125,885			107,624			18,261			17.0	%
Income before income taxes		84,496			57,252			27,244			47.6	%
Income taxes		21,263			12,287			8,976			73.1	%
Net income	$	63,233		$	44,965		$	18,268			40.6	%

Net income per common share (EPS)
Basic	$	0.77		$	0.55		$	0.22
Diluted	$	0.77		$	0.55		$	0.22

Dividends declared
Cash dividends declared per common share	$	0.35		$	0.29		$	0.06
Cash dividends declared	$	28,538		$	23,733		$	4,805
Dividend payout ratio		45.1	%		52.8	%		-7.7	%

Weighted average number of common shares outstanding
Basic		82,387			82,409			(22	)
Diluted		82,391			82,430			(39	)

	For the year ended									Variance
Average Balance Sheet Data	June 30,			June 30,			Variance			or Change
(Dollars in Thousands, Unaudited)	2021			2020			or Change			Pct.
Assets
Interest-earning assets:
Loans receivable, including loans held for sale	$	4,866,436		$	4,568,816		$	297,620			6.5	%
Taxable investment securities		1,571,452			1,291,516			279,936			21.7	%
Tax-exempt investment securities		74,604			111,477			(36,873	)		-33.1	%
Other interest-earning assets		200,435			122,278			78,157			63.9	%
Total interest-earning assets		6,712,927			6,094,087			618,840			10.2	%
Non-interest-earning assets		620,934			595,158			25,776			4.3	%
Total assets	$	7,333,861		$	6,689,245		$	644,616			9.6	%

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	1,726,190		$	1,041,188		$	685,002			65.8	%
Savings		1,066,794			831,832			234,962			28.2	%
Certificates of deposit		1,931,887			2,032,046			(100,159	)		-4.9	%
Total interest-bearing deposits		4,724,871			3,905,066			819,805			21.0	%
Borrowings:
Federal Home Loan Bank Advances		931,148			1,236,139			(304,991	)		-24.7	%
Other borrowings		2,563			56,957			(54,394	)		-95.5	%
Total borrowings		933,711			1,293,096			(359,385	)		-27.8	%
Total interest-bearing liabilities		5,658,582			5,198,162			460,420			8.9	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		518,149			334,522			183,627			54.9	%
Other non-interest-bearing liabilities		65,737			60,236			5,501			9.1	%
Total non-interest-bearing liabilities		583,886			394,758			189,128			47.9	%
Total liabilities		6,242,468			5,592,920			649,548			11.6	%
Stockholders' equity		1,091,393			1,096,325			(4,932	)		-0.4	%
Total liabilities and stockholders' equity	$	7,333,861		$	6,689,245		$	644,616			9.6	%

Average interest-earning assets to average interest-bearing liabilities		118.63	%		117.24	%		1.39	%		1.2	%

	For the year ended
	June 30,			June 30,			Variance
Performance Ratio Highlights	2021			2020			or Change
Average yield on interest-earning assets:
Loans receivable, including loans held for sale		4.08	%		4.09	%		-0.01	%
Taxable investment securities		1.99	%		3.04	%		-1.05	%
Tax-exempt investment securities ⁽¹⁾		2.21	%		2.15	%		0.06	%
Other interest-earning assets		1.47	%		3.67	%		-2.20	%
Total interest-earning assets		3.49	%		3.83	%		-0.34	%

Average cost of interest-bearing liabilities:
Deposits:
Interest-bearing demand		0.41	%		1.10	%		-0.69	%
Savings		0.31	%		0.81	%		-0.50	%
Certificates of deposit		1.10	%		2.00	%		-0.90	%
Total interest-bearing deposits		0.67	%		1.51	%		-0.84	%
Borrowings:
Federal Home Loan Bank Advances		1.97	%		1.99	%		-0.02	%
Other borrowings		0.06	%		0.74	%		-0.68	%
Total borrowings		1.96	%		1.93	%		0.03	%
Total interest-bearing liabilities		0.88	%		1.61	%		-0.73	%

Interest rate spread⁽²⁾		2.61	%		2.22	%		0.39	%
Net interest margin⁽³⁾		2.75	%		2.45	%		0.30	%

Non-interest income to average assets		0.34	%		0.29	%		0.05	%
Non-interest expense to average assets		1.72	%		1.61	%		0.11	%

Efficiency ratio⁽⁴⁾		60.16	%		63.66	%		-3.50	%

Return on average assets		0.86	%		0.67	%		0.19	%
Return on average equity		5.79	%		4.10	%		1.69	%
Return on average tangible equity ⁽⁵⁾		7.22	%		5.10	%		2.12	%

Five-Quarter Financial Trend Analysis

Summary Balance Sheet	At
(Dollars and Shares in Thousands,	June 30,			March 31,			December 31,			September 30,			June 30,
Except Per Share Data, Unaudited)	2021			2021			2020			2020			2020
Assets
Cash and cash equivalents	$	67,855		$	108,991		$	129,694		$	145,818		$	180,967
Securities available for sale		1,676,864			1,778,970			1,695,893			1,508,542			1,385,703
Securities held to maturity		38,138			27,168			29,549			31,576			32,556
Loans held-for-sale		16,492			5,172			12,601			20,170			20,789
Loans receivable		4,851,394			4,798,239			4,828,634			4,954,750			4,498,397
Less: allowance for credit losses on loans		(58,165	)		(63,762	)		(63,386	)		(64,860	)		(37,327	)
Net loans receivable		4,793,229			4,734,477			4,765,248			4,889,890			4,461,070
Premises and equipment		56,338			60,360			61,181			61,808			57,389
Federal Home Loan Bank stock		36,615			45,578			45,578			55,118			58,654
Accrued interest receivable		19,362			20,562			19,826			20,368			17,373
Goodwill		210,895			210,895			210,895			210,895			210,895
Core deposit intangible		3,705			3,888			4,151			4,420			3,995
Bank owned life insurance		283,310			281,765			280,235			278,639			262,380
Deferred income taxes, net		29,323			32,230			30,846			33,319			25,480
Other real estate owned		178			178			178			178			178
Other assets		51,431			47,760			49,278			49,468			40,746
Total assets	$	7,283,735		$	7,357,994		$	7,335,153		$	7,310,209		$	6,758,175

Liabilities
Deposits:
Non-interest-bearing	$	593,718		$	545,746		$	518,828		$	487,710		$	419,138
Interest-bearing		4,891,588			4,828,706			4,793,785			4,552,202			4,011,144
Total deposits		5,485,306			5,374,452			5,312,613			5,039,912			4,430,282
Borrowings		685,876			865,763			865,651			1,077,540			1,173,165
Advance payments by borrowers for taxes		15,752			15,300			16,100			17,008			16,569
Other liabilities		53,857			38,667			48,448			51,689			53,982
Total liabilities		6,240,791			6,294,182			6,242,812			6,186,149			5,673,998

Stockholders' Equity
Common stock		790			820			849			895			837
Paid-in capital		654,396			691,280			724,389			769,269			722,871
Retained earnings		408,367			397,594			388,376			378,134			387,911
Unearned ESOP shares		(26,753	)		(27,239	)		(27,726	)		(28,212	)		(28,699	)
Accumulated other comprehensive income		6,144			1,357			6,453			3,974			1,257
Total stockholders' equity		1,042,944			1,063,812			1,092,341			1,124,060			1,084,177
Total liabilities and stockholders' equity	$	7,283,735		$	7,357,994		$	7,335,153		$	7,310,209		$	6,758,175

Consolidated capital ratios
Equity to assets		14.32	%		14.46	%		14.89	%		15.38	%		16.04	%
Tangible equity to tangible assets ⁽¹⁾		11.72	%		11.89	%		12.32	%		12.81	%		13.29	%

Share data
Outstanding shares		78,965			81,943			84,938			89,510			83,663
Book value per share	$	13.21		$	12.98		$	12.86		$	12.56		$	12.96
Tangible book value per share⁽²⁾	$	10.49		$	10.36		$	10.33		$	10.15		$	10.39

____________________

(1)		Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets.
(2)		Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.

	At
Supplemental Balance Sheet Highlights	June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in Thousands, Unaudited)	2021		2021		2020		2020		2020
Cash and cash equivalents
Cash and due from depository institutions	$	21,463	$	20,502	$	23,968	$	18,628	$	20,391
Interest-bearing deposits in other banks		46,392		88,489		105,726		127,190		160,576
Total cash and cash equivalents	$	67,855	$	108,991	$	129,694	$	145,818	$	180,967

Securities available for sale
Debt securities:
Municipal and state obligations	$	34,603	$	43,060	$	47,763	$	50,877	$	54,054
Asset-backed securities		242,989		250,741		255,407		258,801		172,447
Collateralized loan obligations		189,880		169,776		196,685		196,398		193,788
Corporate bonds		158,351		173,462		167,168		122,276		143,639
Trust preferred securities		-		2,881		2,866		2,773		2,627
Debt securities		625,823		639,920		669,889		631,125		566,555

Mortgage-backed securities:
Collateralized mortgage obligations		13,739		16,800		20,510		25,770		30,903
Residential pass-through securities		744,491		806,655		705,991		625,715		561,954
Commercial pass-through securities		292,811		315,595		299,503		225,932		226,291
Mortgage-backed securities		1,051,041		1,139,050		1,026,004		877,417		819,148
Total securities available for sale	$	1,676,864	$	1,778,970	$	1,695,893	$	1,508,542	$	1,385,703

Securities held to maturity
Debt securities:
Municipal and state obligations	$	25,824	$	27,168	$	29,549	$	31,576	$	32,556
Debt securities:		25,824		27,168		29,549		31,576		32,556

Mortgage-backed securities:
Commercial pass-through securities		12,314		-		-		-		-
Mortgage-backed securities		12,314		-		-		-		-
Total securities held to maturity	$	38,138	$	27,168	$	29,549	$	31,576	$	32,556

Total securities	$	1,715,002	$	1,806,138	$	1,725,442	$	1,540,118	$	1,418,259

	At
Supplemental Balance Sheet Highlights	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in Thousands, Unaudited)	2021			2021			2020			2020			2020
Loan portfolio composition:
Commercial loans:
Multi-family	$	2,039,260		$	2,055,396		$	2,076,483		$	2,110,300		$	2,059,568
Nonresidential		1,079,444			1,110,765			1,123,695			1,124,330			960,853
Commercial business		168,951			183,181			202,010			255,888			138,788
Construction		93,804			95,533			90,398			79,178			20,961
Total commercial loans		3,381,459			3,444,875			3,492,586			3,569,696			3,180,170
One- to four-family residential mortgage loans		1,447,721			1,323,485			1,305,351			1,353,197			1,273,022
Consumer loans:
Home equity loans and lines of credit		47,871			59,721			65,298			71,540			82,920
Other consumer loans		3,259			3,445			4,123			4,136			3,991
Total consumer loans		51,130			63,166			69,421			75,676			86,911
Total loans, excluding yield adjustments		4,880,310			4,831,526			4,867,358			4,998,569			4,540,103
Unaccreted yield adjustments		(28,916	)		(33,287	)		(38,724	)		(43,819	)		(41,706	)
Loans receivable, net of yield adjustments		4,851,394			4,798,239			4,828,634			4,954,750			4,498,397
Less: allowance for credit losses on loans		(58,165	)		(63,762	)		(63,386	)		(64,860	)		(37,327	)
Net loans receivable	$	4,793,229		$	4,734,477		$	4,765,248		$	4,889,890		$	4,461,070

Loan portfolio allocation:
Commercial loans:
Multi-family		41.8	%		42.5	%		42.7	%		42.2	%		45.3	%
Nonresidential		22.1	%		23.0	%		23.1	%		22.5	%		21.2	%
Commercial business		3.5	%		3.8	%		4.2	%		5.1	%		3.1	%
Construction		1.9	%		2.0	%		1.8	%		1.6	%		0.4	%
Total commercial loans		69.3	%		71.3	%		71.8	%		71.4	%		70.0	%
One- to four-family residential mortgage loans		29.7	%		27.4	%		26.8	%		27.1	%		28.1	%
Consumer loans:
Home equity loans and lines of credit		0.9	%		1.2	%		1.3	%		1.4	%		1.8	%
Other consumer loans		0.1	%		0.1	%		0.1	%		0.1	%		0.1	%
Total consumer loans		1.0	%		1.3	%		1.4	%		1.5	%		1.9	%
Total loans, excluding yield adjustments		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Asset quality:
Nonperforming assets:
Accruing loans - 90 days and over past due	$	-		$	2		$	-		$	238		$	5
Nonaccrual loans		79,767			71,416			71,472			44,837			36,691
Total nonperforming loans		79,767			71,418			71,472			45,075			36,696
Other real estate owned		178			178			178			178			178
Total nonperforming assets	$	79,945		$	71,596		$	71,650		$	45,253		$	36,874

Nonperforming loans (% total loans)		1.64	%		1.49	%		1.48	%		0.91	%		0.82	%
Nonperforming assets (% total assets)		1.10	%		0.97	%		0.98	%		0.62	%		0.55	%

Allowance for credit losses on loans (ACL):
ACL to total loans		1.19	%		1.32	%		1.30	%		1.30	%		0.82	%
ACL to nonperforming loans		72.92	%		89.28	%		88.69	%		143.89	%		101.72	%
Net charge offs	$	656		$	750		$	109		$	67		$	38
Average net charge off rate (annualized)		0.05	%		0.06	%		0.01	%		0.01	%		0.00	%

	At
Supplemental Balance Sheet Highlights	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in Thousands, Unaudited)	2021			2021			2020			2020			2020
Funding by type:
Deposits:
Non-interest-bearing deposits	$	593,718		$	545,746		$	518,828		$	487,710		$	419,138
Interest-bearing demand		1,902,478			1,923,184			1,752,699			1,561,135			1,264,151
Savings		1,111,364			1,105,481			1,075,122			1,025,245			906,597
Certificates of deposit		1,877,746			1,800,041			1,965,964			1,965,822			1,840,396
Interest-bearing deposits		4,891,588			4,828,706			4,793,785			4,552,202			4,011,144
Total deposits		5,485,306			5,374,452			5,312,613			5,039,912			4,430,282

Borrowings:
Federal Home Loan Bank advances		665,876			865,763			865,651			1,077,540			1,167,429
Overnight borrowings		20,000			-			-			-			-
Depositor sweep accounts		-			-			-			-			5,736
Total borrowings		685,876			865,763			865,651			1,077,540			1,173,165

Total funding	$	6,171,182		$	6,240,215		$	6,178,264		$	6,117,452		$	5,603,447

Loans as a % of deposits		87.7	%		88.2	%		89.9	%		97.4	%		101.2	%
Deposits as a % of total funding		88.9	%		86.1	%		86.0	%		82.4	%		79.1	%
Borrowings as a % of total funding		11.1	%		13.9	%		14.0	%		17.6	%		20.9	%

Funding by source:
Retail funding:
Non-interest-bearing deposits	$	593,718		$	545,746		$	518,828		$	487,710		$	419,138
Interest-bearing demand		1,902,478			1,923,184			1,752,699			1,561,135			1,264,151
Savings		1,111,364			1,105,481			1,075,122			1,025,245			906,597
Certificates of deposit		1,398,808			1,508,494			1,658,277			1,775,189			1,773,257
Total retail deposits		5,006,368			5,082,905			5,004,926			4,849,279			4,363,143
Depositor sweep accounts		-			-			-			-			5,736
Total retail funding		5,006,368			5,082,905			5,004,926			4,849,279			4,368,879

Wholesale funding:
Certificates of deposit (listing service)	$	20,322		$	32,952		$	43,112		$	57,251		$	35,760
Certificates of deposit (brokered)		458,616			258,595			264,575			133,382			31,379
Total wholesale deposits		478,938			291,547			307,687			190,633			67,139
FHLB advances		665,876			865,763			865,651			1,077,540			1,167,429
Overnight borrowings		20,000			-			-			-			-
Total wholesale funding		1,164,814			1,157,310			1,173,338			1,268,173			1,234,568

Total funding	$	6,171,182		$	6,240,215		$	6,178,264		$	6,117,452		$	5,603,447

Retail funding as a % of total funding		81.1	%		81.5	%		81.0	%		79.3	%		78.0	%
Wholesale funding as a % of total funding		18.9	%		18.5	%		19.0	%		20.7	%		22.0	%

Summary Income Statement	For the three months ended
(Dollars and Shares in Thousands,	June 30,			March 31,			December 31,			September 30,			June 30,
Except Per Share Data, Unaudited)	2021			2021			2020			2020			2020
Interest income
Loans	$	47,562		$	49,307		$	49,466		$	52,180		$	46,192
Taxable investment securities		8,304			7,891			7,707			7,336			9,769
Tax-exempt investment securities		355			410			433			454			487
Other interest-earning assets		549			705			787			914			903
Total interest income		56,770			58,313			58,393			60,884			57,351

Interest expense
Deposits		5,156			6,670			8,647			11,062			12,439
Borrowings		3,451			4,012			5,193			5,660			4,462
Total interest expense		8,607			10,682			13,840			16,722			16,901
Net interest income		48,163			47,631			44,553			44,162			40,450
(Reversal of) provision for credit losses		(4,941	)		1,126			(1,365	)		4,059			174
Net interest income after (reversal of) provision for credit losses		53,104			46,505			45,918			40,103			40,276

Non-interest income
Fees and service charges		1,325			1,325			1,896			1,076			1,696
Gain (loss) on sale and call of securities		313			18			813			(377	)		19
Gain on sale of loans		363			943			2,378			1,890			1,348
Income from bank owned life insurance		1,545			1,530			1,596			1,596			1,537
Electronic banking fees and charges		452			456			404			405			325
Bargain purchase gain		-			-			-			3,053			-
Other income		400			1,194			67			90			77
Total non-interest income		4,398			5,466			7,154			7,733			5,002

Non-interest expense
Salaries and employee benefits		17,777			16,965			17,081			16,977			15,527
Net occupancy expense of premises		2,998			3,433			3,120			3,122			2,688
Equipment and systems		3,575			3,823			3,902			3,570			2,948
Advertising and marketing		581			567			513			500			751
Federal deposit insurance premium		490			488			490			472			286
Directors' compensation		749			748			748			748			769
Merger-related expenses		-			-			-			4,349			447
Debt extinguishment expenses		-			-			796			-			-
Other expense		5,816			3,792			3,860			3,835			3,475
Total non-interest expense		31,986			29,816			30,510			33,573			26,891
Income before income taxes		25,516			22,155			22,562			14,263			18,387
Income taxes		7,033			5,732			5,614			2,884			4,698
Net income	$	18,483		$	16,423		$	16,948		$	11,379		$	13,689

Net income per common share (EPS)
Basic	$	0.24		$	0.20		$	0.20		$	0.13		$	0.17
Diluted	$	0.24		$	0.20		$	0.20		$	0.13		$	0.17

Dividends declared
Cash dividends declared per common share	$	0.10		$	0.09		$	0.08		$	0.08		$	0.08
Cash dividends declared	$	7,710		$	7,205		$	6,706		$	6,917		$	6,449
Dividend payout ratio		41.7	%		43.9	%		39.6	%		60.8	%		47.1	%

Weighted average number of common shares outstanding
Basic		77,658			80,673			85,120			86,008			80,678
Diluted		77,680			80,690			85,123			86,009			80,680

	For the three months ended
Average Balance Sheet Data	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in Thousands, Unaudited)	2021			2021			2020			2020			2020
Assets
Interest-earning assets:
Loans receivable, including loans held for sale	$	4,817,980		$	4,816,592		$	4,871,268		$	4,958,293		$	4,567,229
Taxable investment securities		1,720,838			1,674,223			1,544,095			1,350,511			1,369,014
Tax-exempt investment securities		63,047			73,573			79,044			82,603			89,263
Other interest-earning assets		117,212			169,291			266,114			247,543			141,964
Total interest-earning assets		6,719,077			6,733,679			6,760,521			6,638,950			6,167,470
Non-interest-earning assets		609,762			617,440			632,084			624,252			605,876
Total assets	$	7,328,839		$	7,351,119		$	7,392,605		$	7,263,202		$	6,773,346

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	1,930,193		$	1,831,617		$	1,683,222		$	1,464,238		$	1,189,044
Savings		1,118,402			1,084,981			1,058,675			1,006,075			876,580
Certificates of deposit		1,934,650			1,904,234			1,899,406			1,988,689			1,879,039
Total interest-bearing deposits		4,983,245			4,820,832			4,641,303			4,459,002			3,944,663
Borrowings:
Federal Home Loan Bank advances		665,802			865,690			1,057,958			1,130,836			1,202,522
Other borrowings		6,670			-			-			3,568			96,770
Total borrowings		672,472			865,690			1,057,958			1,134,404			1,299,292
Total interest-bearing liabilities		5,655,717			5,686,522			5,699,261			5,593,406			5,243,955
Non-interest-bearing liabilities:
Non-interest-bearing deposits		566,632			525,018			502,479			479,141			380,067
Other non-interest-bearing liabilities		52,292			57,018			73,683			79,620			72,007
Total non-interest-bearing liabilities		618,924			582,036			576,162			558,761			452,074
Total liabilities		6,274,641			6,268,558			6,275,423			6,152,167			5,696,029
Stockholders' equity		1,054,198			1,082,561			1,117,182			1,111,035			1,077,317
Total liabilities and stockholders' equity	$	7,328,839		$	7,351,119		$	7,392,605		$	7,263,202		$	6,773,346

Average interest-earning assets to average interest-bearing liabilities		118.80	%		118.41	%		118.62	%		118.69	%		117.61	%

	For the three months ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Performance Ratio Highlights	2021			2021			2020			2020			2020
Average yield on interest-earning assets:
Loans receivable, including loans held for sale		3.95	%		4.09	%		4.06	%		4.21	%		4.05	%
Taxable investment securities		1.93	%		1.89	%		2.00	%		2.17	%		2.85	%
Tax-exempt investment securities ⁽¹⁾		2.25	%		2.23	%		2.19	%		2.20	%		2.18	%
Other interest-earning assets		1.87	%		1.67	%		1.18	%		1.48	%		2.54	%
Total interest-earning assets		3.38	%		3.46	%		3.45	%		3.67	%		3.72	%

Average cost of interest-bearing liabilities:
Deposits:
Interest-bearing demand		0.27	%		0.34	%		0.47	%		0.60	%		0.72	%
Savings		0.15	%		0.21	%		0.33	%		0.57	%		0.81	%
Certificates of deposit		0.71	%		0.96	%		1.22	%		1.50	%		1.82	%
Total interest-bearing deposits		0.41	%		0.55	%		0.75	%		0.99	%		1.26	%
Borrowings:
Federal Home Loan Bank advances		2.07	%		1.85	%		1.96	%		2.00	%		1.47	%
Other borrowings		0.07	%		0.00	%		0.00	%		0.04	%		0.13	%
Total borrowings		2.05	%		1.85	%		1.96	%		2.00	%		1.37	%
Total interest-bearing liabilities		0.61	%		0.75	%		0.97	%		1.20	%		1.29	%

Interest rate spread⁽²⁾		2.77	%		2.71	%		2.48	%		2.47	%		2.43	%
Net interest margin⁽³⁾		2.87	%		2.83	%		2.64	%		2.66	%		2.62	%

Non-interest income to average assets (annualized)		0.24	%		0.30	%		0.39	%		0.43	%		0.30	%
Non-interest expense to average assets (annualized)		1.75	%		1.62	%		1.65	%		1.85	%		1.59	%

Efficiency ratio⁽⁴⁾		60.86	%		56.15	%		59.01	%		64.69	%		59.16	%

Return on average assets (annualized)		1.01	%		0.89	%		0.92	%		0.63	%		0.81	%
Return on average equity (annualized)		7.01	%		6.07	%		6.07	%		4.10	%		5.08	%
Return on average tangible equity (annualized) ⁽⁵⁾		8.81	%		7.57	%		7.52	%		5.08	%		6.35	%

____________________

(1)		The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.
(2)		Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.
(3)		Net interest income divided by average interest-earning assets.
(4)		Non-interest expense divided by the sum of net interest income and non-interest income.
(5)		Average tangible equity equals total average stockholders' equity reduced by average goodwill and average core deposit intangible assets.

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles ("GAAP"). These non-GAAP measures provide additional information which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is included below. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.

Reconciliation of GAAP to Non-GAAP	For the three months ended
(Dollars in Thousands,	June 30,			March 31,			December 31,			September 30,			June 30,
Except Per Share Data, Unaudited)	2021			2021			2020			2020			2020
Adjusted net income:
Net income (GAAP)	$	18,483		$	16,423		$	16,948		$	11,379		$	13,689
Non-recurring transactions - net of tax:
Bargain purchase gain		-			-			-			(3,053	)		-
Provision for credit losses on non-PCD loans		-			-			-			3,563			-
Merger-related expenses		-			-			-			3,123			426
Branch consolidation expenses and impairment charges		870			264			243			-			-
Net effect of sales and calls of securities		(220	)		(13	)		(571	)		-			-
Debt extinguishment expenses		-			-			558			-			-
Reversal of income tax valuation allowance		(12	)		-			(523	)		-			-
Net effect of sales of other assets		(144	)		(587	)		-			-			-
Adjusted net income	$	18,977		$	16,087		$	16,655		$	15,012		$	14,115

Calculation of pre-tax, pre-provision net revenue:
Net income (GAAP)	$	18,483		$	16,423		$	16,948		$	11,379		$	13,689
Adjustments to net income (GAAP):
Provision for income taxes		7,033			5,732			5,614			2,884			4,698
(Reversal of) provision for credit losses		(4,941	)		1,126			(1,365	)		4,059			174
Pre-tax, pre-provision net revenue (non-GAAP)	$	20,575		$	23,281		$	21,197		$	18,322		$	18,561

Adjusted earnings per share:
Weighted average common shares - basic		77,658			80,673			85,120			86,008			80,678
Weighted average common shares - diluted		77,680			80,690			85,123			86,009			80,680

Earnings per share - basic (GAAP)	$	0.24		$	0.20		$	0.20		$	0.13		$	0.17
Earnings per share - diluted (GAAP)	$	0.24		$	0.20		$	0.20		$	0.13		$	0.17

Adjusted earnings per share - basic (non-GAAP)	$	0.24		$	0.20		$	0.20		$	0.17		$	0.17
Adjusted earnings per share - diluted (non-GAAP)	$	0.24		$	0.20		$	0.20		$	0.17		$	0.17

Adjusted return on average assets:
Total average assets	$	7,328,839		$	7,351,119		$	7,392,605		$	7,263,202		$	6,773,346

Return on average assets (GAAP)		1.01	%		0.89	%		0.92	%		0.63	%		0.81	%
Adjusted return on average assets (non-GAAP)		1.04	%		0.88	%		0.90	%		0.83	%		0.83	%

Adjusted return on average equity:
Total average equity	$	1,054,198		$	1,082,561		$	1,117,182		$	1,111,035		$	1,077,317

Return on average equity (GAAP)		7.01	%		6.07	%		6.07	%		4.10	%		5.08	%
Adjusted return on average equity (non-GAAP)		7.20	%		5.94	%		5.96	%		5.40	%		5.24	%

Reconciliation of GAAP to Non-GAAP	For the three months ended
(Dollars in Thousands,	June 30,			March 31,			December 31,			September 30,			June 30,
Except Per Share Data, Unaudited)	2021			2021			2020			2020			2020
Adjusted return on average tangible equity:
Total average equity	$	1,054,198		$	1,082,561		$	1,117,182		$	1,111,035		$	1,077,317
Less: average goodwill		(210,895	)		(210,895	)		(210,895	)		(210,895	)		(210,895	)
Less: average other intangible assets		(3,825	)		(4,045	)		(4,317	)		(4,341	)		(4,124	)
	$	839,478		$	867,621		$	901,970		$	895,799		$	862,298

Return on average tangible equity (non-GAAP)		8.81	%		7.57	%		7.52	%		5.08	%		6.35	%
Adjusted return on average tangible equity (non-GAAP)		9.04	%		7.42	%		7.39	%		6.70	%		6.55	%

Adjusted non-interest expense ratio:
Non-interest expense (GAAP)	$	31,986		$	29,816		$	30,510		$	33,573		$	26,891
Non-recurring transactions:
Merger-related expenses		-			-			-			(4,349	)		(447	)
Branch consolidation expenses and impairment charges		(1,239	)		(375	)		(347	)		-			-
Debt extinguishment expenses		-			-			(796	)		-			-
Non-interest expense (non-GAAP)	$	30,747		$	29,441		$	29,367		$	29,224		$	26,444

Non-interest expense ratio (GAAP)		1.75	%		1.62	%		1.65	%		1.85	%		1.59	%
Adjusted non-interest expense ratio (non-GAAP)		1.68	%		1.60	%		1.59	%		1.61	%		1.56	%

Adjusted efficiency ratio:
Non-interest expense (non-GAAP)	$	30,747		$	29,441		$	29,367		$	29,224		$	26,444

Net interest income (GAAP)	$	48,163		$	47,631		$	44,553		$	44,162		$	40,450
Total non-interest income (GAAP)		4,398			5,466			7,154			7,733			5,002
Non-recurring transactions:
Net effect of sales and calls of securities		(313	)		(18	)		(813	)		-			-
Bargain purchase gain		-			-			-			(3,053	)		-
Net effect of sales of other assets		(205	)		(837	)		-			-			-
Total revenue (non-GAAP)	$	52,043		$	52,242		$	50,894		$	48,842		$	45,452

Efficiency ratio (GAAP)		60.86	%		56.15	%		59.01	%		64.69	%		59.16	%
Adjusted efficiency ratio (non-GAAP)		59.08	%		56.36	%		57.70	%		59.83	%		58.18	%

Reconciliation of GAAP to Non-GAAP	For the year ended
(Dollars in Thousands,	June 30,			June 30,
Except Per Share Data, Unaudited)	2021			2020
Adjusted net income:
Net income (GAAP)	$	63,233		$	44,965
Non-recurring transactions - net of tax:
Bargain purchase gain		(3,053	)		-
Provision for credit losses on non-PCD loans		3,563			-
Merger-related expenses		3,123			878
Branch consolidation expenses and impairment charges		1,377			749
Net effect of sales and calls of securities		(804	)		(1,575	)
Debt extinguishment expenses		558			1,520
Reversal of income tax valuation allowance		(535	)		(591	)
Net effect of sales of other assets		(731	)		-
Tax benefit arising from the adoption of the CARES Act provisions		-			(1,624	)
Adjusted net income	$	66,731		$	44,322

Calculation of pre-tax, pre-provision income:
Net income (GAAP)	$	63,233		$	44,965
Adjustments to net income (GAAP):
Provision for income taxes		21,263			12,287
(Reversal of) provision for credit losses		(1,121	)		4,197
Pre-tax, pre-provision income	$	83,375		$	61,449

Adjusted earnings per share:
Weighted average common shares - basic		82,387			82,409
Weighted average common shares - diluted		82,391			82,430

Earnings per share - basic (GAAP)	$	0.77		$	0.55
Earnings per share - diluted (GAAP)	$	0.77		$	0.55

Adjusted earnings per share - basic (non-GAAP)	$	0.81		$	0.54
Adjusted earnings per share - diluted (non-GAAP)	$	0.81		$	0.54

Adjusted return on average assets:
Total average assets	$	7,333,861		$	6,689,245

Return on average assets (GAAP)		0.86	%		0.67	%
Adjusted return on average assets (non-GAAP)		0.91	%		0.66	%

Adjusted return on average equity:
Total average equity	$	1,091,393		$	1,096,325

Return on average equity (GAAP)		5.79	%		4.10	%
Adjusted return on average equity (non-GAAP)		6.11	%		4.04	%

Adjusted return on average tangible equity:
Total average equity	$	1,091,393		$	1,096,325
Less: average goodwill		(210,895	)		(210,895	)
Less: average other intangible assets		(4,133	)		(4,564	)
	$	876,365		$	880,866

Return on average tangible equity (non-GAAP)		7.22	%		5.10	%
Adjusted return on average tangible equity (non-GAAP)		7.61	%		5.03	%


	For the year ended
Reconciliation of GAAP to Non-GAAP	June 30,			June 30,
(Dollars in Thousands, Unaudited)	2021			2020
Adjusted non-interest expense ratio:
Non-interest expense (GAAP)	$	125,885		$	107,624
Non-routine transactions:
Merger-related expenses		(4,349	)		(951	)
Branch consolidation expenses and impairment charges		(1,961	)		(720	)
Debt extinguishment expenses		(796	)		(2,156	)
Non-interest expense (non-GAAP)	$	118,779		$	103,797

Non-interest expense ratio (GAAP)		1.72	%		1.61	%
Adjusted non-interest expense ratio (non-GAAP)		1.62	%		1.55	%

Adjusted efficiency ratio:
Non-interest expense (non-GAAP)	$	118,779		$	103,797

Net interest income (GAAP)	$	184,509		$	149,354
Total non-interest income (GAAP)		24,751			19,719
Non-routine transactions:
Net effect of sales and calls of securities		(1,144	)		(2,234	)
Bargain purchase gain		(3,053	)		-
Net effect of sales of other assets		(1,042	)		342
Total revenue (non-GAAP)	$	204,021		$	167,181

Efficiency ratio (GAAP)		60.16	%		63.66	%
Adjusted efficiency ratio (non-GAAP)		58.22	%		62.09	%

For further information contact:

Craig L. Montanaro, President and Chief Executive Officer, or

Keith Suchodolski, Executive Vice President and Chief Financial Officer

Kearny Financial Corp.

(973) 244-4500