Kearny Financial (KRNY, Financial) filed Quarterly Report for the period ended 2008-12-31.
Kearny Financial Corp. is the holding company for Kearny Federal Savings Bank which operates from its administrative headquarters building in Fairfield New Jersey and retail branch offices located in Bergen Hudson Passaic Morris Middlesex Essex Union and Ocean counties New Jersey. Kearny Financial has a market cap of $757.2 million; its shares were traded at around $11.49 with a P/E ratio of 98.09 and P/S ratio of 7.57. The dividend yield of Kearny Financial stocks is 1.85%.
respectively, compared to $65.0 million and $27.0 million, respectively, during the quarter ended September 30, 2008. As the economic downturn became more firmly entrenched, lending activity dropped off significantly during the second quarter, though commercial lending remained relatively active over the six months. There was a net increase in virtually all loan categories during the six months ended December 31, 2008. Loan growth was concentrated in the residential mortgage category, with one-to-four family first mortgages increasing $44.8 million between June 30 and December 31, 2008 to $732.5 million. The loans purchased during the six months were all one-to-four family first mortgages. Between June 30 and December 31, 2008, home equity loans increased $786,000 to $124.8 million and home equity lines of credit outstanding increased $548,000 to $12.0 million. Unused home equity lines of credit decreased $518,000 to $24.1 million. Between June 30 and December 31, 2008, nonresidential mortgages, multi-family mortgages and commercial business loans increased $1.7 million to $159.1 million, $4.1 million to $25.3 million and $4.6 million to $13.4 million, respectively. Between June 30 and December 31, 2008, construction loans increased $1.8 million to $22.9 million while construction loans outstanding increased $1.7 million to $13.7 million. Miscellaneous loan types increased $263,000 to $4.3 million in aggregate. During the six months ended December 31, 2008, loan originations exceeded principal repayments by approximately $28.3 million. Management expects lending activity to increase in the coming months, but due predominately to the refinancing of existing mortgages rather than home purchases.
Deposits decreased $27.7 million or 2.0%, to $1.35 billion at December 31, 2008, from $1.38 billion at June 30, 2008. During the six months ended December 31, 2008, interest-bearing demand deposits increased $2.7 million to $154.4 million while the other deposit types experienced decreases. Savings deposits decreased $11.9 million to $288.5 million, certificates of deposit decreased $15.6 million to $858.0 million and non-interest-bearing demand deposits decreased $2.8 million to $50.5 million. Over the six months, the Bank continued to price deposit interest rates at levels management considered to be reasonably competitive in the marketplace. Management determined that there was no need to increase interest rates to attract deposits due to the combination of adequate cash flows from investing activities to fund loan demand as well as low returns on cash and cash equivalents. Generally deposit pricing in the marketplace was reasonably disciplined, but there continued to be fierce competition for certificates of deposit and interest-bearing demand deposits emanating from those financial institutions receiving negative publicity due to asset quality problems, particularly during the quarter ended September 30, 2008. Also contributing to the competition for deposits, some financial institutions were attempting to lock in depositors at current interest rates for longer terms as a hedge against future rate increases and, notwithstanding the FDIC’s increase in insurance of deposit accounts, some depositors spread funds to other financial institutions to reduce their risk of loss on uninsured deposits following the collapse of several major banks. However, during the quarter ended December 31, 2008, deposit rates in the marketplace began to pull back in conjunction with the additional 200 basis point decrease in the federal funds rate. By December 2008, the Bank’s deposit flows turned positive as the competition lowered their rates bringing them in line with those offered by the Bank. In October 2008, the Bank’s Franklin Lakes, New Jersey retail branch was closed upon expiration of its lease and the deposits transferred to the nearby Wyckoff branch. In December 2008, $8.6 million of deposits in the Irvington, New Jersey branch were sold to another financial institution. Management intends to sell the branch property as part of an urban renewal project to be developed in the area.
Interest income from loans receivable increased $1.5 million or 10.8%, to $15.4 million during the quarter ended December 31, 2008, from $13.9 million during the quarter ended December 31, 2007 due to growth in the portfolio, partially offset by a decrease in average yield. Average loans receivable increased $131.2 million to $1.09 billion during the quarter ended December 31, 2008, compared to $954.1 million during the quarter ended December 31, 2007. The decline in short-term interest rates since September 2007 contributed to a decrease in the average yield on loans receivable, which decreased 15 basis points to 5.69% during the quarter ended December 31, 2008, compared to 5.84% during the quarter ended December 31, 2007. Also contributing to the decrease in the loan portfolio’s yield year-over-year was the increase in average one-to-four family first mortgages relative to higher yielding nonresidential mortgages and commercial business loans. During the quarter ended December 31, 2008, average one-to-four family first mortgages totaled $734.2 million, an increase of $117.6 million from $616.6 million during the quarter ended December 31, 2007. By comparison, average nonresidential mortgages and commercial business loans totaled $194.2 million during the quarter ended December 31, 2008, a nominal increase of $5.1 million in aggregate year-over-year. With respect to other potentially higher yielding loan categories, average home equity loans, home equity lines of credit, construction loans and miscellaneous loan types increased $8.2 million in aggregate year-over year, to $155.6 million during the quarter ended December 31, 2008.
Non-performing loans were $7.7 million or 0.71% of total loans of $1.085 billion at December 31, 2008. By comparison, non-performing loans were $2.3 million or 0.22% of total loans of $1.08 billion at September 30, 2008 and $1.1 million or 0.12% of total loans of $966.5 million at December 31, 2007. For the most part, the increase in non-performing loans between linked quarters occurred in the commercial mortgage category, which increased $4.4 million to $5.7 million. Non-performing one-to-four family mortgages increased $1.0 million to $1.9 million. Charge-offs during the quarters ended December 31, 2008, September 30, 2008 and December 31, 2007 were $2,000, $-0- and $-0-, respectively, but as a percentage of average loans, charge-offs were effectively zero percent during all three quarters. There were no recoveries recorded during the quarter ended December 31, 2008 compared to a recovery of $19,000 during the quarter ended September 30, 2008 and none during the quarter ended December 31, 2007. The allowance for loan losses as a percentage of total loans outstanding was 0.57% at December 31 and September 30, 2008 and 0.64% at December 31, 2007 and as a percentage of non-performing loans was 81.3%, 261.4% and 540.8%, respectively, reflecting an allowance balance of $6.2 million, $6.1 million and $6.1 million, respectively, at the close of each quarter.
Interest income from loans receivable increased $3.4 million or 12.5%, to $30.5 million during the six months ended December 31, 2008, from $27.1 million during the six months ended December 31, 2007 due to growth in the portfolio, partially offset by a decrease in average yield. In keeping with the Company’s business plan, the loan portfolio continues to generate an increasing proportion of the Company’s interest income. Average loans receivable constituted 56.2% of average interest-earning assets during the six months ended December 31, 2008, compared to 51.9% during the six months ended December 31, 2007. Average loans receivable increased $137.7 million to $1.07 billion during the six months ended December 31, 2008, compared to $930.4 million during the six months ended December 31, 2007. The decline in short-term interest rates since September 2007 contributed to a decrease in the average yield on loans receivaRead the The complete Report
Kearny Financial Corp. is the holding company for Kearny Federal Savings Bank which operates from its administrative headquarters building in Fairfield New Jersey and retail branch offices located in Bergen Hudson Passaic Morris Middlesex Essex Union and Ocean counties New Jersey. Kearny Financial has a market cap of $757.2 million; its shares were traded at around $11.49 with a P/E ratio of 98.09 and P/S ratio of 7.57. The dividend yield of Kearny Financial stocks is 1.85%.
Highlight of Business Operations:
Non-mortgage-backed securities, all of which are classified as available for sale, decreased $9.5 million or 24.9%, to $28.7 million at December 31, 2008 compared to $38.2 million at June 30, 2008. The decrease resulted primarily from the redemption-in-kind of the AMF Ultra Short Mortgage Fund as well as principal repayments and a $1.1 million decrease in the fair value of the portfolio. The shares of the mutual fund redeemed for the underlying securities were written down to fair value as of the trade date resulting in a pre-tax charge to earnings of $415,000 during the quarter ended September 30, 2008, compared to an other-than-temporary impairment pre-tax charge of $659,000 recorded during the quarter ended June 30, 2008 for the same mutual fund. Following the redemption-in-kind, the underlying securities were reclassified as mortgage-backed securities held to maturity. At December 31, 2008, the remainder of the non-mortgage-backed securities portfolio consisted of $4.9 million of Small Business Loan (“SBA”) pass-through certificates, $18.3 million of municipal bonds and $5.5 million of single issuer trust preferred securities with amortized costs of $5.0 million, $18.2 million and $8.8 million, respectively. The net unrealized gain for this portfolio was $3.3 million as of December 31, 2008. Management has concluded based on its evaluation of this portfolio that no other-than-temporary impairment is present for individual securities in a loss position at December 31, 2008. Four of the five trust preferred securities were issued by two money center banks and carried investment grade ratings as of December 31, 2008 according to Moody’s. The fifth security was issued by a southeastern community bank and not rated. (See Note 7 to consolidated financial statements.)respectively, compared to $65.0 million and $27.0 million, respectively, during the quarter ended September 30, 2008. As the economic downturn became more firmly entrenched, lending activity dropped off significantly during the second quarter, though commercial lending remained relatively active over the six months. There was a net increase in virtually all loan categories during the six months ended December 31, 2008. Loan growth was concentrated in the residential mortgage category, with one-to-four family first mortgages increasing $44.8 million between June 30 and December 31, 2008 to $732.5 million. The loans purchased during the six months were all one-to-four family first mortgages. Between June 30 and December 31, 2008, home equity loans increased $786,000 to $124.8 million and home equity lines of credit outstanding increased $548,000 to $12.0 million. Unused home equity lines of credit decreased $518,000 to $24.1 million. Between June 30 and December 31, 2008, nonresidential mortgages, multi-family mortgages and commercial business loans increased $1.7 million to $159.1 million, $4.1 million to $25.3 million and $4.6 million to $13.4 million, respectively. Between June 30 and December 31, 2008, construction loans increased $1.8 million to $22.9 million while construction loans outstanding increased $1.7 million to $13.7 million. Miscellaneous loan types increased $263,000 to $4.3 million in aggregate. During the six months ended December 31, 2008, loan originations exceeded principal repayments by approximately $28.3 million. Management expects lending activity to increase in the coming months, but due predominately to the refinancing of existing mortgages rather than home purchases.
Deposits decreased $27.7 million or 2.0%, to $1.35 billion at December 31, 2008, from $1.38 billion at June 30, 2008. During the six months ended December 31, 2008, interest-bearing demand deposits increased $2.7 million to $154.4 million while the other deposit types experienced decreases. Savings deposits decreased $11.9 million to $288.5 million, certificates of deposit decreased $15.6 million to $858.0 million and non-interest-bearing demand deposits decreased $2.8 million to $50.5 million. Over the six months, the Bank continued to price deposit interest rates at levels management considered to be reasonably competitive in the marketplace. Management determined that there was no need to increase interest rates to attract deposits due to the combination of adequate cash flows from investing activities to fund loan demand as well as low returns on cash and cash equivalents. Generally deposit pricing in the marketplace was reasonably disciplined, but there continued to be fierce competition for certificates of deposit and interest-bearing demand deposits emanating from those financial institutions receiving negative publicity due to asset quality problems, particularly during the quarter ended September 30, 2008. Also contributing to the competition for deposits, some financial institutions were attempting to lock in depositors at current interest rates for longer terms as a hedge against future rate increases and, notwithstanding the FDIC’s increase in insurance of deposit accounts, some depositors spread funds to other financial institutions to reduce their risk of loss on uninsured deposits following the collapse of several major banks. However, during the quarter ended December 31, 2008, deposit rates in the marketplace began to pull back in conjunction with the additional 200 basis point decrease in the federal funds rate. By December 2008, the Bank’s deposit flows turned positive as the competition lowered their rates bringing them in line with those offered by the Bank. In October 2008, the Bank’s Franklin Lakes, New Jersey retail branch was closed upon expiration of its lease and the deposits transferred to the nearby Wyckoff branch. In December 2008, $8.6 million of deposits in the Irvington, New Jersey branch were sold to another financial institution. Management intends to sell the branch property as part of an urban renewal project to be developed in the area.
Interest income from loans receivable increased $1.5 million or 10.8%, to $15.4 million during the quarter ended December 31, 2008, from $13.9 million during the quarter ended December 31, 2007 due to growth in the portfolio, partially offset by a decrease in average yield. Average loans receivable increased $131.2 million to $1.09 billion during the quarter ended December 31, 2008, compared to $954.1 million during the quarter ended December 31, 2007. The decline in short-term interest rates since September 2007 contributed to a decrease in the average yield on loans receivable, which decreased 15 basis points to 5.69% during the quarter ended December 31, 2008, compared to 5.84% during the quarter ended December 31, 2007. Also contributing to the decrease in the loan portfolio’s yield year-over-year was the increase in average one-to-four family first mortgages relative to higher yielding nonresidential mortgages and commercial business loans. During the quarter ended December 31, 2008, average one-to-four family first mortgages totaled $734.2 million, an increase of $117.6 million from $616.6 million during the quarter ended December 31, 2007. By comparison, average nonresidential mortgages and commercial business loans totaled $194.2 million during the quarter ended December 31, 2008, a nominal increase of $5.1 million in aggregate year-over-year. With respect to other potentially higher yielding loan categories, average home equity loans, home equity lines of credit, construction loans and miscellaneous loan types increased $8.2 million in aggregate year-over year, to $155.6 million during the quarter ended December 31, 2008.
Non-performing loans were $7.7 million or 0.71% of total loans of $1.085 billion at December 31, 2008. By comparison, non-performing loans were $2.3 million or 0.22% of total loans of $1.08 billion at September 30, 2008 and $1.1 million or 0.12% of total loans of $966.5 million at December 31, 2007. For the most part, the increase in non-performing loans between linked quarters occurred in the commercial mortgage category, which increased $4.4 million to $5.7 million. Non-performing one-to-four family mortgages increased $1.0 million to $1.9 million. Charge-offs during the quarters ended December 31, 2008, September 30, 2008 and December 31, 2007 were $2,000, $-0- and $-0-, respectively, but as a percentage of average loans, charge-offs were effectively zero percent during all three quarters. There were no recoveries recorded during the quarter ended December 31, 2008 compared to a recovery of $19,000 during the quarter ended September 30, 2008 and none during the quarter ended December 31, 2007. The allowance for loan losses as a percentage of total loans outstanding was 0.57% at December 31 and September 30, 2008 and 0.64% at December 31, 2007 and as a percentage of non-performing loans was 81.3%, 261.4% and 540.8%, respectively, reflecting an allowance balance of $6.2 million, $6.1 million and $6.1 million, respectively, at the close of each quarter.
Interest income from loans receivable increased $3.4 million or 12.5%, to $30.5 million during the six months ended December 31, 2008, from $27.1 million during the six months ended December 31, 2007 due to growth in the portfolio, partially offset by a decrease in average yield. In keeping with the Company’s business plan, the loan portfolio continues to generate an increasing proportion of the Company’s interest income. Average loans receivable constituted 56.2% of average interest-earning assets during the six months ended December 31, 2008, compared to 51.9% during the six months ended December 31, 2007. Average loans receivable increased $137.7 million to $1.07 billion during the six months ended December 31, 2008, compared to $930.4 million during the six months ended December 31, 2007. The decline in short-term interest rates since September 2007 contributed to a decrease in the average yield on loans receivaRead the The complete Report
