SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________

 

FORM 10-Q

 

(Mark One)

 

 

 

X

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

 

 

EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended

December 31, 2008

 

 

 

OR

 

 

 

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

 

 

EXCHANGE ACT OF 1934

 

 

 

For the transition period from

 

to

 

 

 

 

Commission File Number 000-51093

 

 

 

KEARNY FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

UNITED STATES

 

22-3803741

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification Number)

 

 

 

120 Passaic Ave., Fairfield, New Jersey

 

07004-3510

(Address of principal executive offices)

 

(Zip Code)

 

 

 

Registrant’s telephone number, including area code

973-244-4500

 

 

 

 

 

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer x

Non-accelerated filer o

Smaller reporting company o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: February 2, 2009.

 

 

 

$0.10 par value common stock - 69,642,700 shares outstanding

 

 


 

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

 

INDEX

 

 

 

 

Page

 

 

Number

PART I - FINANCIAL INFORMATION

 

 

 

 

 

Item 1:

Financial Statements

 

 

 

 

 

 

Consolidated Statements of Financial Condition

 

 

 

at December 31, 2008 and June 30, 2008 (Unaudited)

 

1

 

 

 

 

Consolidated Statements of Income for the Three Months and Six Months

 

 

 

Ended December 31, 2008 and 2007 (Unaudited)

 

2-3

 

 

 

 

Consolidated Statements of Changes in Stockholders’ Equity for the Six

 

 

 

Months Ended December 31, 2008 and 2007 (Unaudited)

 

4-6

 

 

 

 

Consolidated Statements of Cash Flows for the Six

 

 

 

Months Ended December 31, 2008 and 2007 (Unaudited)

 

7-8

 

 

 

 

Notes to Consolidated Financial Statements

 

9-16

 

 

 

Item 2:

Management’s Discussion and Analysis of

 

 

 

Financial Condition and Results of Operations

 

17-34

 

 

 

Item 3:

Quantitative and Qualitative Disclosure About Market Risk

 

35-37

 

 

 

Item 4:

Controls and Procedures

 

38

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

39-41

 

 

 

 

 

 

SIGNATURES

 

42

 

 

 

 

 


KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In Thousands, Except Share and Per Share Data, Unaudited)

 

 

 

December 31,

 

June 30,

 

 

 

2008

 

2008

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and amounts due from depository institutions

 

$

22,192

 

$

19,864

 

Interest-bearing deposits in other banks

 

 

66,304

 

 

111,859

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

88,496

 

 

131,723

 

 

 

 

 

 

 

 

 

Securities available for sale (amortized cost $31,992 and $40,305)

 

 

28,718

 

 

38,183

 

Loans receivable, including net deferred loan costs of $1,408 and $1,276

 

 

1,086,510

 

 

1,027,790

 

Less allowance for loan losses

 

 

(6,229

)

 

(6,104

)

 

 

 

 

 

 

 

 

Net Loans Receivable

 

 

1,080,281

 

 

1,021,686

 

 

 

 

 

 

 

 

 

Mortgage-backed securities available for sale (amortized cost $679,743 and $726,037)

 

 

690,263

 

 

726,023

 

Mortgage-backed securities held to maturity (estimated fair value $4,233)

 

 

5,741

 

 

 

Premises and equipment

 

 

35,270

 

 

34,950

 

Federal Home Loan Bank of New York (“FHLB”) stock

 

 

12,941

 

 

13,076

 

Interest receivable

 

 

8,754

 

 

8,949

 

Goodwill

 

 

82,263

 

 

82,263

 

Bank owned life insurance

 

 

15,994

 

 

15,709

 

Deferred income tax assets, net

 

 

4,459

 

 

9,028

 

Other assets

 

 

2,052

 

 

1,449

 

 

 

 

 

 

 

 

 

Total Assets

 

$

2,055,232

 

$

2,083,039

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Non-interest bearing

 

$

50,521

 

$

53,349

 

Interest-bearing

 

 

1,300,833

 

 

1,325,683

 

 

 

 

 

 

 

 

 

Total Deposits

 

 

1,351,354

 

 

1,379,032

 

 

 

 

 

 

 

 

 

Advances from FHLB

 

 

215,000

 

 

218,000

 

Advance payments by borrowers for taxes

 

 

5,888

 

 

5,849

 

Other liabilities

 

 

9,029

 

 

8,787

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

1,581,271

 

 

1,611,668

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock $0.10 par value, 25,000,000 shares authorized; none issued

 

 

 

 

 

 

 

and outstanding

 

 

 

 

 

Common stock $0.10 par value, 75,000,000 shares authorized; 72,737,500 shares

 

 

 

 

 

 

 

issued; 69,782,903 and 70,489,003 shares outstanding, respectively

 

 

7,274

 

 

7,274

 

Paid-in capital

 

 

205,966

 

 

203,266

 

Retained earnings

 

 

308,830

 

 

307,186

 

Unearned Employee Stock Ownership Plan shares; 1,188,046 shares

 

 

 

 

 

 

 

and 1,260,783 shares, respectively

 

 

(11,880

)

 

(12,608

)

Treasury stock, at cost; 2,954,597 shares and 2,248,497 shares, respectively

 

 

(40,220

)

 

(32,023

)

Accumulated other comprehensive income (loss)

 

 

3,991

 

 

(1,724

)

 

 

 

 

 

 

 

 

Total Stockholders’ Equity

 

 

473,961

 

 

471,371

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

2,055,232

 

$

2,083,039

 

 

See notes to consolidated financial statements.

1

 

 


 

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Data, Unaudited)

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

15,445

 

$

13,937

 

$

30,547

 

$

27,108

 

Mortgage-backed securities

 

 

8,898

 

 

8,583

 

 

18,022

 

 

16,786

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

129

 

 

335

 

 

255

 

 

687

 

Tax-exempt

 

 

159

 

 

204

 

 

318

 

 

753

 

Other interest-earning assets

 

 

286

 

 

1,552

 

 

935

 

 

2,690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Interest Income

 

 

24,917

 

 

24,611

 

 

50,077

 

 

48,024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

9,072

 

 

10,974

 

 

18,802

 

 

22,224

 

Borrowings

 

 

2,176

 

 

1,974

 

 

4,363

 

 

2,765

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Interest Expense

 

 

11,248

 

 

12,948

 

 

23,165

 

 

24,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

 

13,669

 

 

11,663

 

 

26,912

 

 

23,035

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for Loan Losses

 

 

109

 

 

 

 

109

 

 

94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income after Provision

 

 

 

 

 

 

 

 

 

 

 

 

 

for Loan Losses

 

 

13,560

 

 

11,663

 

 

26,803

 

 

22,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Interest Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

 

340

 

 

327

 

 

768

 

 

662

 

Gain (loss) on sale of securities

 

 

 

 

 

 

 

 

 

 

 

 

 

available for sale

 

 

 

 

(2

)

 

(415

)

 

5

 

Miscellaneous

 

 

396

 

 

344

 

 

691

 

 

714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Non-Interest Income

 

 

736

 

 

669

 

 

1,044

 

 

1,381

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

6,210

 

 

6,002

 

 

12,624

 

 

12,325

 

Net occupancy expense of

 

 

 

 

 

 

 

 

 

 

 

 

 

premises

 

 

999

 

 

902

 

 

2,002

 

 

1,792

 

Equipment

 

 

1,098

 

 

1,087

 

 

2,169

 

 

2,123

 

Advertising

 

 

307

 

 

155

 

 

605

 

 

406

 

Federal insurance premium

 

 

208

 

 

140

 

 

358

 

 

281

 

Amortization of intangible assets

 

 

4

 

 

60

 

 

15

 

 

219

 

Directors’ compensation

 

 

544

 

 

550

 

 

1,100

 

 

1,110

 

Miscellaneous

 

 

1,183

 

 

1,203

 

 

2,298

 

 

2,204

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Non-Interest Expenses

 

 

10,553

 

 

10,099

 

 

21,171

 

 

20,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 

3,743

 

 

2,233

 

 

6,676

 

 

3,862

 

Income Taxes

 

 

1,505

 

 

857

 

 

2,702

 

 

1,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

2,238

 

$

1,376

 

$

3,974

 

$

2,406

 

 

 

2

 

 


KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Continued)

(In Thousands, Except Per Share Data, Unaudited)

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income per Common

 

 

 

 

 

 

 

 

 

 

 

 

 

Share (EPS):

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

$

0.02

 

$

0.06

 

$

0.03

 

Diluted

 

 

0.03

 

 

0.02

 

 

0.06

 

 

0.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

68,190

 

 

68,808

 

 

68,322

 

 

68,763

 

Diluted

 

 

68,316

 

 

68,957

 

 

68,481

 

 

68,946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends Declared Per Common

 

 

 

 

 

 

 

 

 

 

 

 

 

Share (Public)

 

$

0.05

 

$

0.05

 

$

0.10

 

$

0.10

 

 

See notes to consolidated financial statements.

 

 

3

 

 


KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Six Months Ended December 31 2007

(In Thousands, Except Per Share Data, Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Unearned

 

 

 

Comprehensive

 

 

 

 

 

Common Stock

 

Paid-In

 

Retained

 

ESOP

 

Treasury

 

(Loss)

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Earnings

 

Shares

 

Stock

 

Income

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - June 30, 2007

 

 

71,143

 

$

7,274

 

$

197,976

 

$

304,970

 

$

(14,063

)

$

(24,361

)

$

(9,204

)

$

462,592

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

2,406

 

 

 

 

 

 

 

 

2,406

 

Realized gain on securities available

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for sale, net of income tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

expense of $3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

(2

)

Unrealized gain on securities available

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for sale, net of deferred income tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

expense of $5,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,435

 

 

9,435

 

Benefit plans, net of deferred income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

expense tax of $289

 

 

 

 

 

 

 

 

 

 

 

 

 

 

434

 

 

434

 

Total Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,273

 

ESOP shares committed to be released

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(72 shares)

 

 

 

 

 

 

200

 

 

 

 

728

 

 

 

 

 

 

928

 

Dividends contributed for payment of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ESOP loan

 

 

 

 

 

 

24

 

 

 

 

 

 

 

 

 

 

24

 

Stock option expense

 

 

 

 

 

 

954

 

 

 

 

 

 

 

 

 

 

954

 

Treasury stock purchases

 

 

(241

)

 

 

 

 

 

 

 

 

 

(2,989

)

 

 

 

(2,989

)

Treasury stock reissued

 

 

5

 

 

 

 

(13

)

 

 

 

 

 

76

 

 

 

 

63

 

Restricted stock plan shares earned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(126 shares)

 

 

 

 

 

 

1,542

 

 

 

 

 

 

 

 

 

 

1,542

 

Tax effect from stock based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

compensation

 

 

 

 

 

 

(6

)

 

 

 

 

 

 

 

 

 

(6

)

Cash dividends declared ($0.10/public share)

 

 

 

 

 

 

 

 

(1,859

)

 

 

 

 

 

 

 

(1,859

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2007

 

$

70,907

 

$

7,274

 

$

200,677

 

$

305,517

 

$

(13,335

)

$

(27,274

)

$

663

 

$

473,522

 

 

4

 

 


KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Six Months Ended December 31, 2008

(In Thousands, Except Per Share Data, Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Unearned

 

 

 

Comprehensive

 

 

 

 

 

Common Stock

 

Paid-In

 

Retained

 

ESOP

 

Treasury

 

(Loss)

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Earnings

 

Shares

 

Stock

 

Income

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - June 30, 2008

 

 

70,489

 

$

7,274

 

$

203,266

 

$

307,186

 

$

(12,608

)

$

(32,023

)

$

(1,724

)

$

471,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

3,974

 

 

 

 

 

 

 

 

3,974

 

Realized gain on securities available

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for sale, net of income tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit of $170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

245

 

 

245

 

Unrealized gain on securities available

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for sale, net of deferred income tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

expense of $3,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,323

 

 

5,323

 

Benefit plans, net of deferred income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

expense tax of $80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

131

 

 

131

 

Total Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,673

 

Adjustment to apply FASB:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Statement No. 158 measurement date provisions,

net of income tax benefit of $34

 

 

 

 

 

 

 

 

(66

)

 

 

 

 

 

16

 

 

(50

)

Cumulative-effect adjustment to initially
apply EITF Issue No. 06-4

 

 

 

 

 

 

 

 

(480

)

 

 

 

 

 

 

 

(480

)

ESOP shares committed to be released

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(72 shares)

 

 

 

 

 

 

165

 

 

 

 

728

 

 

 

 

 

 

893

 

Dividends contributed for payment of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ESOP loan

 

 

 

 

 

 

37

 

 

 

 

 

 

 

 

 

 

37

 

Stock option expense

 

 

 

 

 

 

952

 

 

 

 

 

 

 

 

 

 

952

 

Treasury stock purchases

 

 

(706

)

 

 

 

 

 

 

 

 

 

(8,197

)

 

 

 

(8,197

)

Restricted stock plan shares earned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(126 shares)

 

 

 

 

 

 

1,544

 

 

 

 

 

 

 

 

 

 

1,544

 

 

 

5

 

 


KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Six Months Ended December 31, 2008

(In Thousands, Except Per Share Data, Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Unearned

 

 

 

Comprehensive

 

 

 

 

 

Common Stock

 

Paid-In

 

Retained

 

ESOP

 

Treasury

 

(Loss)

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Earnings

 

Shares

 

Stock

 

Income

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax effect from stock based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

 

2

 

Cash dividends declared ($0.10/public share)

 

 

 

 

 

 

 

 

(1,784

)

 

 

 

 

 

 

 

(1,784

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2008

 

$

69,783

 

$

7,274

 

$

205,966

 

$

308,830

 

$

(11,880

)

$

(40,220

)

$

3,991

 

$

473,961

 

 

 

See notes to consolidated financial statements.

6

 

 


KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands, Unaudited)

 

 

 

Six Months Ended

 

 

 

December 31,

 

 

 

2008

 

2007

 

 

 

 

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

Net income

 

$

3,974

 

$

2,406

 

Adjustments to reconcile net income to net cash provided by operating

 

 

 

 

 

 

 

activities:

 

 

 

 

 

 

 

Depreciation and amortization of premises and equipment

 

 

916

 

 

933

 

Net amortization of premiums, discounts and loan fees and costs

 

 

280

 

 

367

 

Deferred income taxes

 

 

703

 

 

747

 

Amortization of intangible assets

 

 

14

 

 

220

 

Amortization of benefit plans’ unrecognized net loss, net of gain

 

 

 

 

 

 

 

from curtailment

 

 

99

 

 

94

 

Provision for loan losses

 

 

109

 

 

94

 

Realized loss (gain) on sales of securities available for sale

 

 

415

 

 

(5

)

Realized gain on sale of deposits

 

 

(133

)

 

 

Increase in cash surrender value of bank owned life insurance

 

 

(285

)

 

(276

)

ESOP, stock option plan and restricted stock plan expenses

 

 

3,389

 

 

3,424

 

Decrease (increase) in interest receivable

 

 

195

 

 

(411

)

Increase in other assets

 

 

(613

)

 

(254

)

(Decrease) increase in interest payable

 

 

(1

)

 

962

 

Decrease in other liabilities

 

 

(167

)

 

(639

)

 

 

 

 

 

 

 

 

Net Cash Provided by Operating Activities

 

 

8,895

 

 

7,662

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

Purchases of securities available for sale

 

 

 

 

(206

)

Proceeds from sale of securities available for sale

 

 

7,325

 

 

44,154

 

Proceeds from calls and maturities of securities available for sale

 

 

35

 

 

656

 

Proceeds from repayments of securities available for sale

 

 

538

 

 

387

 

Purchase of loans

 

 

(30,088

)

 

(48,141

)

Net increase in loans receivable

 

 

(28,718

)

 

(53,000

)

Purchases of mortgage-backed securities available for sale

 

 

(19,730

)

 

(95,349

)

Purchases of mortgage-backed securities held to maturity

 

 

(5,972

)

 

 

Principal repayments on mortgage-backed securities available for sale

 

 

65,796

 

 

65,887

 

Principal repayments on mortgage-backed securities held to maturity

 

 

282

 

 

 

Additions to premises and equipment

 

 

(1,235

)

 

(235

)

Purchase of FHLB stock

 

 

(225

)

 

(9,000

)

Redemption of FHLB stock

 

 

360

 

 

14

 

 

 

 

 

 

 

 

 

Net Cash Used in Investing Activities

 

$

(11,632

)

$

(94,833

)

 

 

 

See notes to consolidated financial statements.

7

 

 


 

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Thousands, Unaudited)

 

 

 

 

 

Six Months Ended

 

 

 

 

December 31,

 

 

 

 

2008

 

 

 

2007

 

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

Net decrease in deposits

 

$

(18,805

)

 

 

$

(96,345

)

Payment in connection with sale of deposits

 

 

(8,746

)

 

 

 

 

Repayment of long-term FHLB advances

 

 

(3,000

)

 

 

 

(323

)

Long-term FHLB advances

 

 

 

 

 

 

200,000

 

Increase (decrease) in advance payments by borrowers for taxes

 

 

39

 

 

 

 

(313

)

Dividends paid to minority stockholders of Kearny Financial Corp.

 

 

(1,820

)

 

 

 

(1,870

)

Purchase of common stock of Kearny Financial Corp. for treasury

 

 

(8,197

)

 

 

 

(2,989

)

Treasury stock reissued

 

 

 

 

 

 

63

 

Dividends contributed for payment of ESOP loan

 

 

37

 

 

 

 

24

 

Tax benefit (expense) from stock based compensation

 

 

2

 

 

 

 

(6

)

 

 

 

 

 

 

 

 

 

 

Net Cash (Used in) Provided by Financing Activities

 

 

(40,490

)

 

 

 

98,241

 

 

 

 

 

 

 

 

 

 

 

Net Decrease in Cash and Cash Equivalents

 

 

(43,227

)

 

 

 

(11,070

)

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents – Beginning

 

 

131,723

 

 

 

 

163,341

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents – Ending

 

$

88,496

 

 

 

$

174,411

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flows Information:

 

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

 

Income taxes, net of refunds

 

$

2,531

 

 

 

$

868

 

 

 

 

 

 

 

 

 

 

 

Interest

 

$

23,166

 

 

 

$

24,027

 

 

 

 

 

 

 

 

 

 

 

 

See notes to consolidated financial statements.

 

8

 

 


KEARNY FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1. PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of Kearny Financial Corp. (the “Company”), its wholly-owned subsidiaries, Kearny Federal Savings Bank (the “Bank”) and Kearny Financial Securities, Inc., and the Bank’s wholly-owned subsidiaries, KFS Financial Services, Inc. and Kearny Federal Investment Corp. The Company conducts its business principally through the Bank. Management prepared the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, including the elimination of all significant inter-company accounts and transactions during consolidation. In June 2008, Kearny Federal Investment Corp. was formally dissolved and its assets returned to its parent company, the Bank.

 

2. BASIS OF PRESENTATION

 

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations and cash flows in conformity with generally accepted accounting principles (“GAAP”). However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial statements have been included. The results of operations for the three-month and six-month periods ended December 31, 2008, are not necessarily indicative of the results that may be expected for the entire fiscal year or any other period.

 

The data in the consolidated statements of financial condition for June 30, 2008 was derived from the Company’s annual report on Form 10-K. That data, along with the interim financial information presented in the consolidated statements of financial condition, income, changes in stockholders’ equity and cash flows should be read in conjunction with the 2008 consolidated financial statements, including the notes thereto included in the Company’s annual report on Form 10-K.

 

3. NET INCOME PER COMMON SHARE (“EPS”)

 

Basic EPS is based on the weighted average number of common shares actually outstanding adjusted for Employee Stock Ownership Plan (“ESOP”) shares not yet committed to be released and unvested restricted stock awards. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as unvested restricted stock awards and outstanding stock options, were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Diluted EPS is calculated by adjusting the weighted average number of shares of common stock outstanding to include the effect of contracts or securities exercisable or which could be converted into common stock, if dilutive, using the treasury stock method. Shares issued and reacquired during any period are weighted for the portion of the period they were outstanding.

 

9

 

 


The following is a reconciliation of the numerator and denominators of the basic and diluted earnings per share computations:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

December 31, 2008

 

December 31, 2008

 

 

 

 

 

 

 

 

Per