Kearny Financial Corp. Reports Unaudited Earnings Results for the Third Quarter Ended March 31, 2018; Provides Tax Rate Guidance for the Fiscal 2018 and 2019; Announces Net Charge Offs for the Third Quarter Ended March 31, 2018
April 30, 2018 at 07:45 pm IST
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Kearny Financial Corp. reported unaudited earnings results for the third quarter ended March 31, 2018. For the quarter, the company's total interest income was $38,545,000 compared to $35,008,000 a year ago. Net interest income was $27,057,000 compared to $26,207,000 a year ago. Net interest income after provision for loan losses was $26,634,000 compared to $24,398,000 a year ago. Income before income taxes was $7,639,000 compared to $5,617,000 a year ago. Net income was $5,377,000 compared to $4,068,000 a year ago. The increase in net income partly reflected a decrease in merger-related expenses related to the Company's acquisition of Clifton Bancorp Inc., which closed on April 2, 2018. Such expenses decreased by $792,000 to $401,000 for the quarter ended March 31, 2018 compared to $1.2 million for the quarter ended December 31, 2017. The Company estimates that merger-related expenses adversely impacted net income by approximately $379,000 and $1.0 million for the quarters ended March 31, 2018 and December 31, 2017, respectively, due to their limited income tax deductibility. The Company expects to recognize additional merger-related expenses during the fourth quarter ending June 30, 2018 in conjunction with the closing of the CSBK merger transaction. Basic and diluted net income per common share was $0.07 compared to $0.05 a year ago. The increase in net income also reflected the impact of federal income tax reform that was codified through the passage of the Tax Cuts and Jobs Act (the "Act") during the prior quarter ended December 31, 2017. Return on average assets (annualized) was 0.44% compared to 0.36% a year ago. Return on average equity (annualized) was 2.18% compared to 1.47% a year ago. Adjusted net income (non-GAAP) was $5,756,000 compared to $4,068,000 a year ago. Adjusted net income per common share - diluted (non-GAAP) was $0.08 compared to $0.05 a year ago. Adjusted return on average assets (non-GAAP) was 0.47% compared to 0.36% a year ago. Adjusted return on average equity (non-GAAP) was 2.33% compared to 1.47% a year ago.
For the current fiscal year ending June 30, 2018, the company's statutory federal income tax rate has been reduced to 28%, reflecting effective statutory rates of 35% and 21% for the first and second halves of the year, respectively.
For the fiscal year ending June 30, 2019 and thereafter, the company's statutory federal income tax rate will be reduced to 21%.
The company recognized net charge offs totaling approximately $241,000, reflecting an annualized net charge off rate of 0.03% on the average balance of total loans for the quarter ended March 31, 2018. By comparison, the company's net charge offs totaled approximately $315,000 for the quarter ended December 31, 2017, reflecting an annualized net charge off rate of 0.04%.
Kearny Financial Corp. is a holding company for Kearny Bank (the Bank). The Bank is a New Jersey-chartered savings bank. The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with other funds, to originate or purchase loans for its portfolio and for sale on the secondary market. Its loan portfolio is comprised of multi-family mortgage loans, non-residential mortgage loans, commercial business loans, construction loans, one-to-four-family residential mortgage loans, home equity loans and other consumer loans. The Company also maintains a portfolio of investment securities, primarily comprised of United States agency mortgage-backed securities, obligations of state and political subdivisions, corporate bonds, asset-backed securities, and collateralized loan obligations. The Bank operates approximately 45 branch offices in New Jersey.
Kearny Financial Corp. Reports Unaudited Earnings Results for the Third Quarter Ended March 31, 2018; Provides Tax Rate Guidance for the Fiscal 2018 and 2019; Announces Net Charge Offs for the Third Quarter Ended March 31, 2018