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What changed in Kearny Financial Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Kearny Financial Corp.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+312 added−325 removedSource: 10-K (2025-08-21) vs 10-K (2024-08-23)

Top changes in Kearny Financial Corp.'s 2025 10-K

312 paragraphs added · 325 removed · 264 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

126 edited+16 added−21 removed143 unchanged
Biggest changeThe following table presents allowance for credit losses ratios, along with the components of their calculation, for the periods indicated: At June 30, 2024 2023 (Dollars in Thousands) Allowance for credit losses - loans $ 44,939 $ 48,734 Total loans outstanding $ 5,748,750 $ 5,850,476 Total non-performing loans $ 39,882 $ 42,627 Allowance for credit losses as a percent of total loans outstanding 0.78 % 0.83 % Allowance for credit losses to non-performing loans 112.68 % 114.33 % 11 Table of Contents The following table presents the ratio of net charge-offs (recoveries) to average loans outstanding by loan category, along with the components of the calculation, for the periods indicated: For the Years Ended June 30, 2024 2023 2022 Net charge-offs (recoveries) Average loans outstanding Net charge- offs as a percent of average loans outstanding Net charge-offs (recoveries) Average loans outstanding Net charge- offs as a percent of average loans outstanding Net charge-offs (recoveries) Average loans outstanding Net charge- offs as a percent of average loans outstanding (Dollars in Thousands) Multi-family mortgage $ 398 $ 2,675,429 0.01 % $ 493 $ 2,718,428 0.02 % $ 1,896 $ 2,056,595 0.09 % Nonresidential mortgage 5,855 953,125 0.61 % 39 1,005,943 0.00 % 1,834 1,036,205 0.18 % Commercial business 3,844 163,560 2.35 % 335 188,794 0.18 % 33 190,023 0.02 % Construction — 208,111 0.00 % — 176,185 0.00 % — 105,095 0.00 % One- to four-family residential mortgage (76) 1,704,957 0.00 % (2) 1,683,929 0.00 % (147) 1,487,208 (0.01) % Home equity loans — 63,367 0.00 % — 66,479 0.00 % (27) 67,849 (0.04) % Other consumer — 2,800 0.00 % (55) 2,805 (1.96) % — 2,993 0.00 % Unaccreted yield adjustments — (18,853) 0.00 % — (15,440) 0.00 % — (23,568) 0.00 % Total $ 10,021 $ 5,752,496 0.17 % $ 810 $ 5,827,123 0.01 % $ 3,589 $ 4,922,400 0.07 % Our loan portfolio experienced an annualized net charge-off rate of 0.17% for the year ended June 30, 2024, an increase of 16 basis points from the 0.01% rate for the year ended June 30, 2023. 12 Table of Contents Allocation of Allowance for Credit Losses on Loans.
Biggest changeThe following table presents allowance for credit losses ratios, along with the components of their calculation, for the periods indicated: At June 30, 2025 2024 (Dollars in Thousands) Allowance for credit losses - loans $ 46,191 $ 44,939 Total loans outstanding $ 5,814,539 $ 5,748,750 Total non-performing loans $ 45,597 $ 39,882 Allowance for credit losses as a percent of total loans outstanding 0.79 % 0.78 % Allowance for credit losses to non-performing loans 101.30 % 112.68 % 11 Table of Contents The following table presents the ratio of net charge-offs (recoveries) to average loans outstanding by loan category, along with the components of the calculation, for the periods indicated: For the Years Ended June 30, 2025 2024 2023 Net charge-offs (recoveries) Average loans outstanding Net charge- offs as a percent of average loans outstanding Net charge-offs (recoveries) Average loans outstanding Net charge- offs as a percent of average loans outstanding Net charge-offs (recoveries) Average loans outstanding Net charge- offs as a percent of average loans outstanding (Dollars in Thousands) Multi-family mortgage $ — $ 2,686,965 — % $ 398 $ 2,675,429 0.01 % $ 493 $ 2,718,428 0.02 % Nonresidential mortgage 830 956,556 0.09 % 5,855 953,125 0.61 % 39 1,005,943 — % Commercial business 275 146,218 0.19 % 3,844 163,560 2.35 % 335 188,794 0.18 % Construction — 191,146 — % — 208,111 — % — 176,185 — % One- to four-family residential mortgage — 1,748,806 — % (76) 1,704,957 — % (2) 1,683,929 — % Home equity loans 2 63,507 — % — 63,367 — % — 66,479 — % Other consumer 7 2,750 0.25 % — 2,800 — % (55) 2,805 (1.96) % Unaccreted yield adjustments — (6,365) — % — (18,853) — % — (15,440) — % Total $ 1,114 $ 5,789,583 0.02 % $ 10,021 $ 5,752,496 0.17 % $ 810 $ 5,827,123 0.01 % Our loan portfolio experienced an annualized net charge-off rate of 0.02% for the year ended June 30, 2025, a decrease of 15 basis points from the 0.17% rate for the year ended June 30, 2024. 12 Table of Contents Allocation of Allowance for Credit Losses on Loans.
References in this Annual Report on Form 10‑K to the Company or Kearny Financial generally refer to the Company and the Bank, unless the context indicates otherwise. References to “we,” “us,” or “our” refer to the Bank or Company, or both, as the context indicates. The Company’s primary business is the ownership and operation of the Bank.
References in this Annual Report on Form 10‑K to the Company or Kearny Financial generally refer to the Company and the Bank, unless the context indicates otherwise. References to “we,” “us,” or “our” refer to the Bank or the Company, or both, as the context indicates. The Company’s primary business is the ownership and operation of the Bank.
New Jersey savings banks may also exercise those powers, rights, benefits or privileges authorized for national banks, federal savings banks or federal savings associations, or either directly or through a subsidiary.
New Jersey savings banks may also exercise those powers, rights, benefits or privileges authorized for national banks, federal savings banks or federal savings associations either directly or through a subsidiary.
FDIC regulations require nonmember banks to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets of 8.0%, and a 4.0% Tier 1 capital to total assets leverage ratio.
FDIC regulations require nonmember banks to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets of 8.0%, and a Tier 1 capital to total assets leverage ratio of 4.0%.
An institution is deemed to be well capitalized if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 ratio of 6.5% or greater.
An institution is deemed to be well capitalized if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 capital ratio of 6.5% or greater.
These dividends are affected by factors such as the FHLB’s operating results and statutory responsibilities that may be imposed such as providing certain funding for affordable housing and interest subsidies on advances targeted for low- and moderate-income housing projects. The payment dividends, or any particular amount of dividend, cannot be assumed.
These dividends are affected by factors such as the FHLB’s operating results and statutory responsibilities that may be imposed such as providing certain funding for affordable housing and interest subsidies on advances targeted for low- and moderate-income housing projects. The payment of dividends, or any particular amount of dividend, cannot be assumed.
Among other things, subject to certain exceptions, these provisions generally require that extensions of credit to insiders: • be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and • not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of Kearny Bank’s regulatory capital.
Among other things, subject to certain exceptions, these provisions generally require that extensions of credit to insiders: • be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and • not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of Kearny Bank’s regulatory capital and surplus.
Regulatory guidance provides for prior consultation with Federal Reserve supervisory staff as to dividends in certain circumstances, such as when the dividend is not covered by earnings for the period for which it is being paid, when net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend or when the prospective rate of earnings retention by the holding company is inconsistent with its capital needs and overall financial condition.
Regulatory guidance provides for prior consultation with Federal Reserve Board supervisory staff as to dividends in certain circumstances, such as when the dividend is not covered by earnings for the period for which it is being paid, when net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend or when the prospective rate of earnings retention by the holding company is inconsistent with its capital needs and overall financial condition.
Effective January 1, 2023, the assessment range for insured institutions of less than $10 billion of total assets is 2.5 to 32 basis points of total assets less tangible equity. The FDIC has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of Kearny Bank.
Effective January 1, 2023, the assessment range for insured institutions of less than $10 billion in total assets is 2.5 to 32 basis points of total assets less tangible equity. The FDIC has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of Kearny Bank.
Financing for construction loans is limited to 80% of the anticipated appraised value of the completed property. Disbursements are made in accordance with inspection reports by our approved appraisal firms. Terms of financing are generally limited to one year with an interest rate tied to the prime rate and may include a premium of one or more points.
Financing for construction loans is limited to 80% of the anticipated appraised value of the completed property. Disbursements are made in accordance with inspection reports by our approved inspection firms. Terms of financing are generally limited to one year with an interest rate tied to the prime rate and may include a premium of one or more points.
Management cannot predict what assessment rates will be in the future. Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.
Management cannot predict what assessment rates will be in the future. Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order or condition imposed by the FDIC.
The Federal Reserve Board may disapprove a notice if: (i) the savings institution would be undercapitalized following the capital distribution; (ii) the proposed capital distribution raises safety and soundness concerns; or (iii) the capital distribution would violate a prohibition contained in any statute, regulation, enforcement action or agreement or condition imposed in connection with an application.
The Federal Reserve Board may disapprove a notice if: (i) the institution would be undercapitalized following the capital distribution; (ii) the proposed capital distribution raises safety and soundness concerns; or (iii) the capital distribution would violate a prohibition contained in any statute, regulation, enforcement action or agreement or condition imposed in connection with an application.
Our Chief Executive Officer, Chief Financial Officer, Chief Risk Officer and Treasurer/Chief Investment Officer are the senior management members of our Capital Markets Committee that are designated by the Board of Directors as the officers primarily responsible for securities portfolio management and all transactions require the approval of at least two of these designated officers.
Our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Risk Officer and Treasurer/Chief Investment Officer are the senior management members of our Capital Markets Committee that are designated by the Board of Directors as the officers primarily responsible for securities portfolio management and all transactions require the approval of at least two of these designated officers.
Kearny Bank’s authority to extend credit to its directors, executive officers and 10% stockholders, as well as to entities controlled by such persons, is governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O of the Federal Reserve Board.
Kearny Bank’s authority to extend credit to its and its affiliates’ directors, executive officers and 10% stockholders, as well as to entities controlled by such persons, is governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O of the Federal Reserve Board.
Critically undercapitalized institutions are subject to additional measures including, subject to a narrow exception, the appointment of a receiver or conservator within 270 days after such status is triggered. These actions are in addition to other discretionary supervisory or enforcement actions that the FDIC may take. As of June 30, 2024, Kearny Bank was well capitalized. Dividend Limitations.
Critically undercapitalized institutions are subject to additional measures including, subject to a narrow exception, the appointment of a receiver or conservator within 270 days after such status is triggered. These actions are in addition to other discretionary supervisory or enforcement actions that the FDIC may take. As of June 30, 2025, Kearny Bank was well capitalized. Dividend Limitations.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. Kearny Bank did not opt into the community bank leverage ratio framework as of June 30, 2024. Regulations issued by the NJDBI establish generally similar regulatory capital standards for New Jersey-chartered savings banks such as Kearny Bank.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. Kearny Bank did not opt into the community bank leverage ratio framework as of June 30, 2025. Regulations issued by the NJDBI establish generally similar regulatory capital standards for New Jersey-chartered savings banks such as Kearny Bank.
In addition, the Federal Reserve Board has enforcement authority over Kearny Financial and any non-depository subsidiaries. That permits the Federal Reserve Board to restrict or prohibit activities that are determined to pose a serious risk to Kearny Bank. This regulatory structure is intended primarily for protection of Kearny Bank’s depositors and not for the benefit of stockholders of Kearny Financial.
In addition, the Federal Reserve Board has enforcement authority over Kearny Financial and its non-depository subsidiaries. That permits the Federal Reserve Board to restrict or prohibit activities that are determined to pose a serious risk to Kearny Bank. This regulatory structure is intended primarily for protection of Kearny Bank’s depositors and not for the benefit of stockholders of Kearny Financial.
Deposits are obtained primarily from within New Jersey and New York through the Bank’s network of retail branches, business relationship officers, treasury management officers and digital banking channels. We maintain a robust suite of commercial deposit products designed to appeal to small and mid-size businesses, non-profit organizations and government entities.
Deposits are obtained primarily from within New Jersey and New York through the Bank’s network of retail branches, business relationship officers, and digital banking channels. We maintain a robust suite of commercial deposit products designed to appeal to small and mid-size businesses, non-profit organizations and government entities.
All of our securities carry market risk insofar as increases in market interest rates have caused, and may continue to cause, a decrease in their market value. We believe that unrealized and unrecognized losses on securities held at June 30, 2024, are a function of changes in market interest rates and credit spreads, not changes in credit quality.
All of our securities carry market risk insofar as increases in market interest rates have caused, and may continue to cause, a decrease in their market value. We believe that unrealized and unrecognized losses on securities held at June 30, 2025, are a function of changes in market interest rates and credit spreads, not changes in credit quality.
A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk: • Total reported loans for construction, land development and other land represent 100% or more of the bank’s capital; or 24 Table of Contents • Total commercial real estate loans (as defined in the guidance) represent 300% or more of the bank’s total capital or the outstanding balance of the bank’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months.
A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk: • Total reported loans for construction, land development and other land represent 100% or more of the bank’s capital; or • Total commercial real estate loans (as defined in the guidance) represent 300% or more of the bank’s total capital or the outstanding balance of the bank’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months.
Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy and provide such customers the opportunity to opt out of the sharing of certain personal financial information with unaffiliated third parties; and • Regulations requiring banking organizations to notify their primary federal regulator as soon as possible and no later than 36 hours of determining that a “computer-security incident” that arises to the level of a “notification incident” has occurred.
Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy and provide such customers the opportunity to opt out of the sharing of certain personal financial information with unaffiliated third parties; and 25 Table of Contents • Regulations requiring banking organizations to notify their primary federal regulator as soon as possible and no later than 36 hours of determining that a “computer-security incident” that arises to the level of a “notification incident” has occurred.
As a nonmember New Jersey savings bank with federally insured deposits, Kearny Bank is subject to extensive regulation by the NJDBI and the FDIC. The activities of New Jersey savings banks are subject to extensive regulation including restrictions or requirements with respect to loans to one borrower, dividends, permissible investments and lending activities, liquidity, transactions with affiliates and community reinvestment.
As a nonmember New Jersey savings bank with federally insured deposits, the activities of Kearny Bank are subject to extensive regulation by the NJDBI and the FDIC, including restrictions or requirements with respect to loans to one borrower, dividends, permissible investments and lending activities, liquidity, transactions with affiliates and community reinvestment.
Additional information regarding our use of interest rate derivatives and our hedging activities is presented in Note 1 and Note 11 to the audited consolidated financial statements. 19 Table of Contents Subsidiary Activity At June 30, 2024, Kearny Bank was the only wholly-owned operating subsidiary of Kearny Financial Corp.
Additional information regarding our use of interest rate derivatives and our hedging activities is presented in Note 1 and Note 11 to the audited consolidated financial statements. 19 Table of Contents Subsidiary Activity At June 30, 2025, Kearny Bank was the only wholly-owned operating subsidiary of Kearny Financial Corp.
Any company that seeks to acquire “control” of Kearny Financial or Kearny Bank, within the meaning of the Savings and Loan Holding Company Act, must file an application, and receive the Federal Reserve Board’s prior approval under that statute. The Company would then be subject to regulation as a savings and loan holding company.
Any company that seeks to acquire “control” of Kearny Financial or Kearny Bank, within the meaning of the Home Owners’ Loan Act, must file an application, and receive the Federal Reserve Board’s prior approval under that statute. The Company would then be subject to regulation as a savings and loan holding company.
At June 30, 2024, our primary market area consisted of the counties in which we currently operate branches, including Bergen, Essex, Hudson, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Union counties in New Jersey and Kings (Brooklyn) and Richmond (Staten Island) counties in New York.
At June 30, 2025, our primary market area consisted of the counties in which we currently operate branches, including Bergen, Essex, Hudson, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Union counties in New Jersey and Kings (Brooklyn) and Richmond (Staten Island) counties in New York.
The following table sets forth the maturities of our loan portfolio at June 30, 2024. Demand loans, loans having no stated maturity and overdrafts are shown as due in one year or less. Loans are stated in the following table at contractual maturity and actual maturities could differ due to prepayments.
The following table sets forth the maturities of our loan portfolio at June 30, 2025. Demand loans, loans having no stated maturity and overdrafts are shown as due in one year or less. Loans are stated in the following table at contractual maturity and actual maturities could differ due to prepayments.
At June 30, 2024, each of our collateralized loan obligations were consistently rated by Moody’s and/or S&P well above the thresholds that generally support our investment grade assessment with such ratings equaling AAA by S&P or Aaa by Moody’s, where rated by those agencies.
At June 30, 2025, each of our collateralized loan obligations were consistently rated by Moody’s and/or S&P well above the thresholds that generally support our investment grade assessment with such ratings equaling AAA by S&P or Aaa by Moody’s, where rated by those agencies.
Other than securities issued or guaranteed by the U.S. government or its agencies, we did not hold securities of any one issuer having an aggregate book value in excess of 10% of our equity at June 30, 2024.
Other than securities issued or guaranteed by the U.S. government or its agencies, we did not hold securities of any one issuer having an aggregate book value in excess of 10% of our equity at June 30, 2025.
We operate from our administrative headquarters in Fairfield, New Jersey and other administrative locations throughout the State of New Jersey. As of June 30, 2024, we had 43 branch offices. The Company maintains a website at www.kearnybank.com.
We operate from our administrative headquarters in Fairfield, New Jersey and other administrative locations throughout the State of New Jersey. As of June 30, 2025, we had 43 branch offices. The Company maintains a website at www.kearnybank.com.
Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations. At June 30, 2024, Kearny Bank has exercised the opt-out election regarding the treatment of Accumulated Other Comprehensive Income.
Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations. At June 30, 2025, Kearny Bank has exercised the opt-out election regarding the treatment of Accumulated Other Comprehensive Income.
On June 9, 2023, the SEC approved the NASDAQ proposed clawback listing standards, including the amendments that delay the effective date of the rules to October 2, 2023. The Board of Directors of Kearny Financial approved the adoption of a clawback policy in October 2023, pursuant to the NASDAQ clawback listing standards.
On June 9, 2023, the SEC approved the NASDAQ proposed clawback listing standards, including the amendments that delayed the effective date of the rules to October 2, 2023. The Board of Directors of Kearny Financial approved the adoption of a clawback policy in October 2023, pursuant to the NASDAQ clawback listing standards.
At June 30, 2024, Kearny Bank exceeded all regulatory capital requirements. In assessing an institution’s capital adequacy, the FDIC takes into consideration, not only these numeric factors, but also qualitative factors.
At June 30, 2025, Kearny Bank exceeded all regulatory capital requirements. In assessing an institution’s capital adequacy, the FDIC takes into consideration, not only these numeric factors, but also qualitative factors.
Kearny Bank’s operations are also subject to federal laws (and their implementing regulations) applicable to credit transactions, such as the: • Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; • Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one- to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; • Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and • Truth in Savings Act, prescribing disclosure and advertising requirements with respect to deposit accounts.
Kearny Bank’s operations are also subject to federal laws (and their implementing regulations) applicable to credit transactions, such as the: • Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; • Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one- to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; and • Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected by collection agencies.
Under the Change in Bank Control Act, the Federal Reserve Board has 60 days from the filing of a complete notice to act, taking into consideration certain factors, including the financial condition of the acquirer, and future prospects of the proposed acquirer, the competence and integrity of the proposed acquirer and the effects of the acquisition on competition.
Under the Change in Bank Control Act and its implementing regulations, the Federal Reserve Board has 60 days from the filing of a complete notice to act, taking into consideration certain factors, including the financial condition of the acquirer, and future prospects of the proposed acquirer, the competence and integrity of the proposed acquirer and the effects of the acquisition on competition.
New Jersey savings banks may exercise powers, rights, benefits and privileges of out-of-state banks, savings banks and savings associations, or either directly or through a subsidiary, provided that prior approval by the NJDBI is required before exercising any such power, right, benefit or privilege.
New Jersey savings banks may exercise powers, rights, benefits and privileges of out-of-state banks, savings banks and savings associations either directly or through a subsidiary, but prior approval by the NJDBI is required before exercising any such power, right, benefit or privilege.
Any property acquired as 8 Table of Contents the result of foreclosure or by deed in lieu of foreclosure is classified as other real estate owned until it is sold or otherwise disposed of. When other real estate owned is acquired, it is recorded at its fair market value less estimated selling costs.
Any property acquired as the result of foreclosure or by deed in lieu of foreclosure is classified as other real estate owned until it is sold or otherwise disposed of. When other real estate owned is acquired, it is recorded at its fair market value less estimated selling costs.
Therefore, no allowance for credit losses was recorded at that time. During the year ended June 30, 2024, proceeds from sales of securities available for sale totaled $104.1 million and resulted in no gross gains and gross losses of $18.1 million.
Therefore, no allowance for credit losses was recorded at that time. During the year ended June 30, 2025, there were no sales of securities available for sale. During the year ended June 30, 2024, proceeds from sales of securities available for sale totaled $104.1 million and resulted in no gross gains and gross losses of $18.1 million.
CJB Investment Corp. is a New Jersey Investment Company and remained active through the three-year period ended June 30, 2024. 189-245 Berdan Avenue LLC was formed during the year ended June 30, 2023 for the purpose of ownership and operation of commercial real estate.
CJB Investment Company is a New Jersey Investment Company and remained active through the three-year period ended June 30, 2025. 189-245 Berdan Avenue LLC was formed during the year ended June 30, 2023 for the purpose of ownership and operation of commercial real estate.
The Federal Reserve Board has promulgated regulations implementing the source of strength policy, which requires holding companies to act as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial distress.
The Federal Reserve Board has promulgated regulations implementing the source of strength doctrine, which requires holding companies to act as a source of financial and managerial strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial distress.
You may access these materials by following the links under “Investor Relations” under the “Financial Information” tab at the Company’s website. Information on the Company’s website is not and should not be considered a part of this Annual Report on Form 10-K.
You may access these materials by following the links under “Investor Relations” under the “Financials” tab at the Company’s website. Information on the Company’s website is not and should not be considered a part of this Annual Report on Form 10-K.
In addition, no dividend may be paid unless the savings bank would, after payment of the dividend, have a surplus of at least 50% of its capital stock (or if the payment of dividend would not reduce surplus). 23 Table of Contents Transactions with Related Parties.
In addition, no dividend may be paid unless the savings bank would, after payment of the dividend, have a surplus of at least 50% of its capital stock (or if the payment of dividend would not reduce surplus). 23 Table of Contents Transactions with Affiliates.
As of that date, Kearny Bank had three wholly-owned subsidiaries, CJB Investment Corp., 189-245 Berdan Avenue LLC and Kearny Wealth Management LLC.
As of that date, Kearny Bank had three wholly-owned subsidiaries, CJB Investment Company, 189-245 Berdan Avenue LLC and Kearny Wealth Management LLC.
Further, the institution must not be subject to any written agreement, order or capital directive, or prompt corrective action directive issued by the FDIC to meet and maintain a specific capital level for any capital measure.
Further, to be deemed well capitalized, the institution must not be subject to any written agreement, order or capital directive, or prompt corrective action directive issued by the FDIC to meet and maintain a specific capital level for any capital measure.
An institution is adequately capitalized if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater and a common equity Tier 1 ratio of 4.5% or greater.
An institution is deemed to be adequately capitalized if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater and a common equity Tier 1 capital ratio of 4.5% or greater.
In evaluating an application for Kearny Financial to acquire control of a savings institution, the Federal Reserve Board considers factors such as the financial and managerial resources and future prospects of Kearny Financial and the target institution, the effect of the acquisition on the risk to the deposit insurance fund, the convenience and the needs of the community served and competitive factors.
In evaluating an application for Kearny Financial to acquire control of a savings institution, the Federal Reserve Board considers factors such as the financial and managerial resources and future prospects of Kearny Financial and the target institution, the effect of the acquisition on the risk to the DIF, the convenience and the needs of the community served and competitive factors.
An institution is undercapitalized if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0% or a common equity Tier 1 ratio of less than 4.5%.
An institution is deemed to be undercapitalized if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0%, or a common equity Tier 1 capital ratio of less than 4.5%.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: • general economic conditions, either nationally or in our market areas, that are worse than expected; • changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; • our ability to access cost-effective funding; • fluctuations in real estate values and both residential and commercial real estate market conditions; • demand for loans and deposits in our market area; • our ability to implement changes in our business strategies; • competition among depository and other financial institutions; • inflation and/or changes in the interest rate environment that reduce our margins and yields, or reduce the fair value of financial instruments or reduce the origination levels in our lending business, or increase the level of defaults, losses and prepayments on loans we have made and make whether held in portfolio or sold in the secondary markets; • adverse changes in the securities markets; • changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; • changes in monetary or fiscal policies of the U.S.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: • general economic conditions, either nationally or in our market areas, that are worse than expected; • the imposition of tariffs or other domestic or international governmental policies and retaliatory responses; • changes in the amount and trend of loan delinquencies and write-offs and changes in estimates and the methodologies for calculating the allowance for credit losses; • our ability to access cost-effective funding; • fluctuations in real estate values and both residential and commercial real estate market conditions; • demand for loans and deposits in our market area; • our ability to implement changes in our business strategies; • competition among depository and other financial institutions; • inflation and/or changes in the interest rate environment that reduce our margins and yields, or reduce the fair value of financial instruments or reduce the origination levels in our lending business, or increase the level of defaults, losses and prepayments on loans we have made and make whether held in portfolio or sold in the secondary markets; • adverse changes in the securities markets; • changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; • changes in monetary or fiscal policies of the U.S.
As of June 30, 2024, Kearny Bank met the qualified thrift lender test. Acquisition of Control. Under the federal Change in Bank Control Act, a notice must be submitted to the Federal Reserve Board if any person (including a company), or group acting in concert, seeks to acquire control of a savings and loan holding company.
As of June 30, 2025, Kearny Bank met the qualified thrift lender test. Acquisition of Control. Under the federal Change in Bank Control Act and its implementing regulations, a notice must be submitted to the Federal Reserve Board if any person (including a company), or group acting in concert, seeks to acquire control of a savings and loan holding company.
The Company is a unitary savings and loan holding company, regulated by the Board of Governors of the Federal Reserve Bank (“FRB”) and conducts no significant business or operations of its own.
The Company is a unitary savings and loan holding company, regulated by the Board of Governors of the Federal Reserve System and conducts no significant business or operations of its own.
A merger of another depository institution into Kearny Bank requires the prior approval of the NJDBI and FDIC, based on similar considerations. 26 Table of Contents Consolidated Capital Requirements.
A merger of another depository institution into Kearny Bank requires the prior approval of the NJDBI and FDIC, based on similar considerations. Consolidated Capital Requirements.
This table shows contractual maturities and does not reflect re-pricing or the effect of prepayments. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties. At June 30, 2024, securities with a carrying value of $31.8 million are callable within one year.
This table shows contractual maturities and does not reflect re-pricing or the effect of prepayments. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties. At June 30, 2025, securities with a carrying value of $79.1 million are callable within one year.
At June 30, 2024, our largest single borrower had an aggregate outstanding loan exposure of approximately $96.9 million comprising six multi-family mortgage loans. At June 30, 2024, this lending relationship was current and performing in accordance with the terms of their loan agreements. 7 Table of Contents Loan Originations, Purchases, Sales and Repayments.
At June 30, 2025, our largest single borrower had an aggregate outstanding loan exposure of approximately $81.6 million comprising six multi-family mortgage loans. At June 30, 2025, this lending relationship was current and performing in accordance with the terms of their loan agreements. 7 Table of Contents Loan Originations, Purchases, Sales and Repayments.
At June 30, 2024 and 2023, certificates of deposit maturing within one year were $1.49 billion and $1.90 billion, respectively. Historically, a significant portion of the certificates of deposit remain with us after they mature.
At June 30, 2025 and 2024, certificates of deposit maturing within one year were $1.91 billion and $1.49 billion, respectively. Historically, a significant portion of the certificates of deposit remain with us after they mature.
If an undercapitalized bank fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized.
If an undercapitalized bank fails to submit an acceptable capital restoration plan, it is treated as if it is significantly undercapitalized.
Transactions between a depository institution (and, generally, its subsidiaries) and its related parties or affiliates are limited by Sections 23A and 23B of the Federal Reserve Act. An affiliate of an institution is any company or entity that controls, is controlled by or is under common control with the institution.
Transactions between a depository institution (and, generally, its subsidiaries) and its affiliates are limited by Sections 23A and 23B of the Federal Reserve Act and Regulation W. An affiliate of an institution includes any company or entity that controls, is controlled by or is under common control with the institution.
The term “covered transaction” includes an extension of credit, purchase of assets, issuance of a guarantee or letter of credit and similar transactions. In addition, loans or other extensions of credit by the institution to the affiliate are required to be collateralized in accordance with specified requirements.
The term “covered transaction” includes an extension of credit to, purchase of securities and assets from, or issuance of a guarantee or letter of credit to, an affiliate, among other types of transactions. In addition, loans or other extensions of credit by the institution to the affiliate are required to be collateralized in accordance with specified requirements.
Such loans are generally originated by, and sourced from, the same resources and markets as those loans originated and held in our portfolio. Our mortgage banking business strategy resulted in the recognition of $602,000 in gains associated with the sale of $79.1 million of mortgage loans held for sale during the year ended June 30, 2024.
Such loans are generally originated by, and sourced from, the same resources and markets as those loans originated and held in our portfolio. Our mortgage banking business strategy resulted in the recognition of $806,000 in gains associated with the sale of $112.1 million of mortgage loans held for sale during the year ended June 30, 2025.
Additional borrowing capacity up to 50% of our total assets may be authorized with the approval of the FHLB’s Board of Directors or Executive Committee. In addition, we had the capacity to borrow additional funds totaling $789.0 million via unsecured overnight borrowings from other financial institutions and $381.8 million from the FRB without pledging additional collateral.
Additional borrowing capacity up to 50% of our total assets may be authorized with the approval of the FHLB’s Board of Directors or Executive Committee. In addition, we had the capacity to borrow additional funds totaling $845.0 million via unsecured overnight borrowings from other financial institutions and $1.19 billion from the FRB without pledging additional collateral.
New Jersey law generally limits the amount that a savings bank may lend to a single borrower and related entities to 15% of the institution’s capital funds. Accordingly, as of June 30, 2024, our legal loans to one borrower limit was approximately $103.3 million.
New Jersey law generally limits the amount that a savings bank may lend to a single borrower and related entities to 15% of the institution’s capital funds. Accordingly, as of June 30, 2025, our legal loans to one borrower limit was approximately $105.7 million.
At June 30, 2024, our derivative instruments were comprised of interest rate swaps, caps and a floor with a total notional amount of $2.75 billion. These instruments are intended to manage the interest rate exposure relating to certain wholesale funding positions and assets that were outstanding at June 30, 2024.
At June 30, 2025, our derivative instruments were comprised of interest rate swaps, caps and a floor with a total notional amount of $3.08 billion. These instruments are intended to manage the interest rate exposure relating to certain wholesale funding positions and assets that were outstanding at June 30, 2025.
The balance of borrowings at June 30, 2024 included overnight line of credit borrowings from the FHLB totaling $175.0 million. There were no unsecured overnight borrowings from other financial institutions at June 30, 2024.
The balance of borrowings at June 30, 2025 included overnight line of credit borrowings from the FHLB totaling $150.0 million. There were no unsecured overnight borrowings from other financial institutions at June 30, 2025.
The year-over-year net decrease in the securities portfolio totaled $165.6 million which largely reflected repayments and sales that were partially offset by purchases.
The year-over-year net decrease in the securities portfolio totaled $75.4 million which largely reflected repayments and sales that were partially offset by purchases.
During the year ended June 30, 2023, proceeds from sales of securities available for sale totaled $105.2 million and resulted in no gross gains and gross losses of $15.2 million. During the year ended June 30, 2022, proceeds from sales of securities available for sale totaled $100.3 million and resulted in no gross gains and gross losses of $565,000.
During the year ended June 30, 2023, proceeds from sales of securities available for sale totaled $105.2 million and resulted in no gross gains and gross losses of $15.2 million.
An institution is categorized as significantly undercapitalized if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 ratio of less than 3.0%.
An institution is deemed to be significantly undercapitalized if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 capital ratio of less than 3.0%.
Our sources of wholesale funding included brokered certificates of deposit whose balances totaled approximately $408.2 million, or 7.9% of total deposits, at June 30, 2024. We utilize brokered certificates of deposit and as an alternative to other forms of wholesale funding, including borrowings, when interest rates and market conditions favor the use of such deposits.
Our sources of wholesale funding included brokered certificates of deposit whose balances totaled approximately $757.7 million, or 13.4% of total deposits, at June 30, 2025. We utilize brokered certificates of deposit as an alternative to other forms of wholesale funding, including borrowings, when interest rates and market conditions favor the use of such deposits.
The investments authorized for purchase under the investment policy approved by our Board of Directors include U.S. government and agency mortgage-backed securities, U.S. government agency debentures, municipal obligations, corporate bonds, asset-backed securities, collateralized loan obligations and subordinated debt. 13 Table of Contents The carrying value of our mortgage-backed securities totaled $593.9 million at June 30, 2024 and comprised 49.1% of total investments and 7.7% of total assets as of that date.
The investments authorized for purchase under the investment policy approved by our Board of Directors include U.S. government and agency mortgage-backed securities, U.S. government agency debentures, municipal obligations, corporate bonds, asset-backed securities, collateralized loan obligations and subordinated debt. 13 Table of Contents The carrying value of our mortgage-backed securities totaled $602.8 million at June 30, 2025 and comprised 53.2% of total investments and 7.8% of total assets as of that date.
The outstanding balance of our collateralized loan obligations totaled $389.5 million at June 30, 2024 and comprised 32.2% of total investments and 5.1% of total assets as of that date. This category of securities is comprised entirely of structured, floating-rate securities representing securitized commercial loans to large, U.S. corporations.
The outstanding balance of our collateralized loan obligations totaled $323.2 million at June 30, 2025 and comprised 28.5% of total investments and 4.2% of total assets as of that date. This category of securities is comprised entirely of structured, floating-rate securities representing securitized commercial loans to large, U.S. corporations.
Generally, Section 23A of the Federal Reserve Act limits the extent to which the institution or its subsidiaries may engage in covered transactions with any one affiliate to 10% of such institution’s capital stock and surplus and contain an aggregate limit on all such transactions with all affiliates to an amount equal to 20% of such institution’s capital stock and surplus.
Generally, Section 23A of the Federal Reserve Act and Regulation W limit the extent to which the institution or its subsidiaries may engage in “covered transactions” with any one affiliate to 10% of such institution’s capital stock and surplus, and set an aggregate limit on all such transactions with all affiliates to an amount equal to 20% of such institution’s capital stock and surplus.
The decrease in the portfolio included a $25.5 million increase in the fair value of the available for sale securities portfolio to an unrealized loss of $130.7 million at June 30, 2024 from an unrealized loss of $156.1 million at June 30, 2023.
The decrease in the portfolio included a $18.5 million increase in the fair value of the available for sale securities portfolio to an unrealized loss of $112.1 million at June 30, 2025 from an unrealized loss of $130.7 million at June 30, 2024.
The carrying value of our securities representing obligations of state and political subdivisions totaled $12.9 million at June 30, 2024 and comprised 1.1% of total investments and less than 1.0% of total assets as of that date.
The carrying value of our securities representing obligations of state and political subdivisions totaled $7.6 million at June 30, 2025 and comprised 0.7% of total investments and less than 1.0% of total assets as of that date.
Our FHLB advances mature as follows: At June 30, 2024 2023 (In Thousands) By remaining period to maturity: Less than one year $ 1,328,500 $ 972,500 One to two years 6,500 103,500 Two to three years — 6,500 Three to four years 200,000 — Four to five years — 200,000 Greater than five years — — Total advances 1,535,000 1,282,500 Fair value adjustments (211) (688) Total advances, net of fair value adjustments $ 1,534,789 $ 1,281,812 At June 30, 2024, we utilized interest rate contracts to effectively extend the duration and fix the cost of our FHLB advances maturing in less than one year.
Our FHLB advances mature as follows: At June 30, 2025 2024 (In Thousands) By remaining period to maturity: Less than one year $ 906,500 $ 1,328,500 One to two years — 6,500 Two to three years 200,000 — Three to four years — 200,000 Four to five years — — Greater than five years — — Total advances 1,106,500 1,535,000 Fair value adjustments (9) (211) Total advances, net of fair value adjustments $ 1,106,491 $ 1,534,789 At June 30, 2025, we utilized interest rate contracts to effectively extend the duration and fix the cost of our FHLB advances maturing in less than one year.
Additional information about the ACL at June 30, 2024 and 2023 is presented in Note 5 to the audited consolidated financial statements. Investment Securities At June 30, 2024, our investment securities portfolio totaled $1.21 billion and comprised 15.7% of our total assets.
By comparison, at June 30, 2024, our securities portfolio totaled $1.21 billion and comprised 15.7% of our total assets. Additional information about our investment securities at June 30, 2025 is presented in Note 3 to the audited consolidated financial statements.
At June 30, 2024, one- to four-family residential mortgage loans totaled $1.76 billion, or 30.5% of our loan portfolio. At June 30, 2024, $1.63 billion, or 92.7%, of our one- to four-family residential mortgage loans were secured by properties located within New Jersey and New York with the remaining $129.1 million, or 7.3%, secured by properties in other states.
At June 30, 2025, one- to four-family residential mortgage loans totaled $1.75 billion, or 30.1% of our loan portfolio. At June 30, 2025, $1.63 billion, or 93.3%, of our one- to four-family residential mortgage loans were secured by properties located within New Jersey and New York with the remaining $118.5 million, or 6.7%, secured by properties in other states.
At June 30, 2024, commercial and industrial business loans totaled $142.7 million, or 2.5% of our loan portfolio. We originate commercial term loans and lines of credit to a variety of clients in our market area. Our commercial term loans generally have terms of up to 10 years.
At June 30, 2025, commercial and industrial business loans totaled $138.8 million, or 2.4% of our loan portfolio. We originate commercial term loans and lines of credit to a variety of clients in our market area. Our commercial term loans generally have terms of up to 10 years.
At June 30, 2024, our liquid assets included $63.9 million of short-term cash and equivalents 3 Table of Contents supplemented by $1.07 billion of investment securities classified as available for sale, which can be readily sold or pledged as collateral, if necessary.
At June 30, 2025, our liquid assets included $167.3 million of short-term cash and equivalents supplemented by $1.01 billion of investment securities classified as available for sale, which can be readily sold or pledged as collateral, if necessary.
In the absence of, or as a complement to, such ratings, we rely upon our own internal analysis of the issuer’s financial condition to validate its investment grade assessment. The carrying value of our asset-backed securities totaled $80.4 million at June 30, 2024 and comprised 6.7% of total investments and 1.0% of total assets as of that date.
In the absence of, or as a complement to, such ratings, we rely upon our own internal analysis of the issuer’s financial condition to validate its investment grade assessment. The carrying value of our asset-backed securities totaled $59.5 million at June 30, 2025 and comprised 5.3% of total investments and 0.8% of total assets as of that date.
Based upon the market value of investment securities and mortgage loans that are posted as collateral for FHLB advances at June 30, 2024, we are eligible to borrow up to an additional $1.06 billion of advances from the FHLB as of that date.
Based upon the market value of investment securities and mortgage loans that are posted as collateral for FHLB advances at June 30, 2025, we are eligible to borrow up to an additional $695.0 million of advances from the FHLB as of that date.
The operations of Kearny Bank also are subject to the: • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Electronic Funds Transfer Act, and Regulation E promulgated thereunder, governing automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; • Check Clearing for the 21 st Century Act (also known as “Check 21”), which gives substitute checks, such as digital check images and copies made from that image, the same legal standing as the original paper check; • USA PATRIOT Act, which requires institutions operating to, among other things, establish broadened anti-money laundering compliance programs, due diligence policies and controls to ensure the detection and reporting of money laundering.
The operations of Kearny Bank also are subject to the: • Truth in Savings Act, prescribing disclosure and advertising requirements with respect to deposit accounts; • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Electronic Funds Transfer Act, and Regulation E promulgated thereunder, governing automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; • Check Clearing for the 21 st Century Act (also known as “Check 21”), which gives substitute checks, such as digital check images and copies made from that image, the same legal standing as the original paper check; • Bank Secrecy Act and USA PATRIOT Act, which requires institutions to, among other things, establish anti-money laundering compliance programs, due diligence policies and controls to ensure the detection and reporting of money laundering, terrorist financing, and other illicit activity; • Gramm-Leach-Bliley Act, which places limitations on the sharing of consumer financial information by financial institutions with unaffiliated third parties.
At June 30, 2024, we had $1.54 billion of FHLB advances outstanding, excluding a net fair value adjustment of $211,000, at a weighted average interest rate of 5.07%. At June 30, 2023, we had $1.28 billion of FHLB advances outstanding, excluding a net fair value adjustment of $688,000, at a weighted average interest rate of 4.92%.
At June 30, 2025, we had $1.11 billion of FHLB advances outstanding, excluding a net fair value adjustment of $9,000, at a weighted average interest rate of 4.36%. At June 30, 2024, we had $1.54 billion of FHLB advances outstanding, excluding a net fair value adjustment of $211,000, at a weighted average interest rate of 5.07%.
For a portion of our short-term brokered certificates of deposit we utilized interest rate contracts to effectively extend their duration and to fix their cost. 17 Table of Contents The following table sets forth the distribution of average deposits for the periods indicated and the weighted average nominal interest rates for each period on each category of deposits presented: For the Years Ended June 30, 2024 2023 2022 Average Balance Percent of Total Deposits Weighted Average Nominal Rate Average Balance Percent of Total Deposits Weighted Average Nominal Rate Average Balance Percent of Total Deposits Weighted Average Nominal Rate (Dollars In Thousands) Non-interest-bearing deposits $ 595,266 11.14 % — % $ 644,543 10.79 % — % $ 624,666 11.37 % — % Interest-bearing demand 2,308,893 43.19 2.91 2,349,802 39.33 1.73 2,067,200 37.64 0.25 Savings 662,981 12.40 0.50 896,651 15.00 0.37 1,088,971 19.83 0.11 Certificates of deposit 1,778,682 33.27 2.92 2,083,864 34.88 1.64 1,711,276 31.16 0.52 .
For a portion of our short-term brokered certificates of deposit we utilized interest rate contracts to effectively extend their duration and to fix their cost. 17 Table of Contents The following table sets forth the distribution of average deposits for the periods indicated and the weighted average nominal interest rates for each period on each category of deposits presented: For the Years Ended June 30, 2025 2024 2023 Average Balance Percent of Total Deposits Weighted Average Nominal Rate Average Balance Percent of Total Deposits Weighted Average Nominal Rate Average Balance Percent of Total Deposits Weighted Average Nominal Rate (Dollars In Thousands) Non-interest-bearing deposits $ 597,197 10.75 % — % $ 595,266 11.14 % — % $ 644,543 10.79 % — % Interest-bearing demand 2,335,972 42.04 2.86 2,308,893 43.19 2.91 2,349,802 39.33 1.73 Savings 721,115 12.98 1.25 662,981 12.40 0.50 896,651 15.00 0.37 Certificates of deposit 1,902,026 34.23 3.39 1,778,682 33.27 2.92 2,083,864 34.88 1.64 .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+17 added−17 removed78 unchanged
Biggest changeOur acquisitions and the integration of acquired businesses, subject us to various risks and may not result in all of the cost savings and benefits anticipated, which could adversely affect our financial condition or results of operations. We have in the past, and may in the future, seek to grow our business by acquiring other businesses.
Biggest changeIf we are unable to effectively and timely deploy capital through these strategies, it may constrain growth in earnings and return on equity and thereby diminish potential growth in stockholder value. 34 Table of Contents Our acquisitions and the integration of acquired businesses, may not result in all of the cost savings and benefits anticipated, which could adversely affect our financial condition or results of operations.
Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and borrowings from the FHLB. We have the capacity to borrow additional funds from the FHLB as well as from the FRB without pledging additional collateral, and via unsecured overnight borrowings from other financial institutions.
Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities. We have the capacity to borrow additional funds from the FHLB as well as from the FRB without pledging additional collateral, and via unsecured overnight borrowings from other financial institutions.
Failure by these participants or their systems to protect our clients' transaction data may put us at risk for possible losses due to fraud or operational disruption. Our clients are also the target of cyber-attacks and identity theft. Large scale identity theft could result in clients' accounts being compromised and fraudulent activities being performed in their name.
Failure by these participants or their systems to protect our clients' transaction data may put us at risk for possible losses due to fraud or operational disruption. Our clients are also the target of cyber-attacks, identity theft, and fraud. Large scale identity theft could result in clients' accounts being compromised and fraudulent activities being performed in their name.
In the future, this funding may not be readily replaced as it matures, or we may have to pay a higher rate of interest to maintain it. Not being able to maintain or replace those funds as they mature would adversely affect our liquidity.
In the future, this funding may not be readily replaceable as it matures, or we may have to pay a higher rate of interest to maintain it. Not being able to maintain or replace those funds as they mature would adversely affect our liquidity.
The Guidance provides that a bank’s commercial real estate lending exposure may receive increased supervisory scrutiny when total non-owner occupied commercial real estate loans, including loans secured by multi-family property, non-owner occupied commercial real estate and construction loans, represent 300% or more of an institution’s total risk-based capital and the outstanding balance of the commercial real estate loan portfolio has increased by 50% or more during the preceding 36 months.
The Guidance provides that a bank’s commercial real estate lending exposure may receive increased supervisory scrutiny when total non-owner occupied commercial real estate loans, including loans secured by multi-family property, non-owner occupied commercial real estate and construction loans, represent 300% or more of an institution’s total risk- 29 Table of Contents based capital and the outstanding balance of the commercial real estate loan portfolio has increased by 50% or more during the preceding 36 months.
Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff, which are strongly influenced by external factors such as changes in interest rates, local and national economic conditions, the availability and attractiveness of alternative investments, and perceptions of the stability of the financial services industry generally and of our institution specifically.
Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff, which are strongly influenced by external factors such as changes in interest rates, local and national economic conditions, the availability and attractiveness of alternative investments, and perceptions of the stability of the financial services industry generally and of our institution 30 Table of Contents specifically.
Congress that could further alter the regulation of the bank and non-bank financial services industries and the manner in which companies within the industry conduct business. 33 Table of Contents In addition, federal and state regulatory agencies also frequently adopt changes to their regulations or change the manner in which existing regulations are applied.
Congress that could further alter the regulation of the bank and non-bank financial services industries and the manner in which companies within the industry conduct business. In addition, federal and state regulatory agencies also frequently adopt changes to their regulations or change the manner in which existing regulations are applied.
Additionally, the operation of the acquired branches may adversely affect our existing profitability, and we may not be able to 34 Table of Contents achieve results in the future similar to those achieved by the existing banking business or manage growth resulting from the acquisition effectively.
Additionally, the operation of the acquired branches may adversely affect our existing profitability, and we may not be able to achieve results in the future similar to those achieved by the existing banking business or manage growth resulting from the acquisition effectively.
The actions that we take in response to competition may adversely affect its results of operations and financial condition.
The actions that we take in response to competition may adversely affect our results of operations and financial condition.
We also engage outside consultants to support our cybersecurity efforts. However, our directors do not have significant experience in cybersecurity risk management outside of the Company and therefore, its ability to fulfill its oversight function remains dependent on the input it receives from management and outside consultants.
However, our directors do not have significant experience in cybersecurity risk management outside of the Company and therefore, its ability to fulfill its oversight function remains dependent on the input it receives from management and outside consultants.
If an impairment determination is made in a future reporting period, our earnings and the book value of these intangible assets will be reduced by the amount of the impairment.
If an impairment determination is made in a future reporting period, our earnings and the book value of goodwill will be reduced by the amount of the impairment.
Weather-related events, including those that may result from climate change, can disrupt our operations, result in damage to our properties, reduce or destroy the value of the collateral for our loans and negatively affect the local economies in which we operate, which could have a material adverse effect on our results of operations and financial condition.
Weather-related events can disrupt our operations, result in damage to our properties, reduce or destroy the value of the collateral for our loans and negatively affect the local economies in which we operate, which could have a material adverse effect on our results of operations and financial condition.
Among other sources of funds, we rely on wholesale funding, including short- and long-term borrowings and brokered deposits, to provide funds with which to make loans, purchase investment securities and provide for other liquidity needs. On June 30, 2024, wholesale funding totaled $2.12 billion, or approximately 27.6% of total assets.
Among other sources of funds, we rely on wholesale funding, including short- and long-term borrowings and brokered deposits, to provide funds with which to make loans, purchase investment securities and provide for other liquidity needs. On June 30, 2025, wholesale funding totaled $2.0 billion, or approximately 26.0% of total assets.
At June 30, 2024, $531.5 million, or 10.3% of our total deposits, consisted of public funds deposits from local government entities in the state of New Jersey, such as townships, counties, school districts and charter schools. These deposits are collateralized by letters of credit from the FHLB or through the pledge of eligible investment securities.
At June 30, 2025, $539.1 million, or 9.5% of our total deposits, consisted of public funds deposits from local government entities in the state of New Jersey, such as townships, counties, school districts and charter schools. These deposits are collateralized by letters of credit from the FHLB or through the pledge of eligible investment securities.
Additionally, at June 30, 2024, $1.07 billion, or 88.8% of our investment securities, are classified as available for sale and reported at fair value with unrealized gains or losses excluded from earnings and reported in other comprehensive income, which affects our reported equity.
Additionally, at June 30, 2025, $1.01 billion, or 89.4% of our investment securities, are classified as available for sale and reported at fair value with unrealized gains or losses excluded from earnings and reported in other comprehensive income, which affects our reported equity.
The successful execution of our business strategy is partially dependent on our ability to attract and retain experienced and qualified personnel. Failure to do so could adversely affect our strategy, client relationships and internal operations. Item 1B. Unresolved Staff Comments Not applicable.
The successful execution of our business strategy is partially dependent on our ability to attract and retain experienced and qualified personnel. Failure to do so could adversely affect our strategy, client relationships and internal operations.
The impairment testing process considers a variety of factors, including the current market price of our common stock, the estimated net present value of our assets and liabilities, and information concerning the terminal valuation of similarly situated insured depository institutions.
We are required to periodically test our goodwill for impairment. The impairment testing process considers a variety of factors, including the current market price of our common stock, the estimated net present value of our assets and liabilities, and information concerning the terminal valuation of similarly situated insured depository institutions.
Our Board of Directors takes an active role in the cybersecurity risk tolerance of the Company and all members receive cybersecurity training annually. The Board reviews the annual risk assessments and approves information technology policies, which include cybersecurity.
Our Board of Directors, including the Information Security Committee, takes an active role in the cybersecurity risk tolerance of the Company and all members receive cybersecurity training annually. The Board reviews the annual information security effectiveness report, risk assessments and approves information security and technology policies.
We face intense competition from other financial services and financial services technology companies, and competitive pressures could adversely affect our business or financial performance. We face intense competition in all of its markets and geographic regions.
We face intense competition from other financial services and financial services technology companies, and competitive pressures could adversely affect our business or financial performance. We face intense competition in all of our markets and geographic regions and expect it to intensify in the future.
If we are forced to pay higher rates on our public funds accounts to retain those funds, or if we are unable to retain such funds and we are forced to rely on other sources of funds for our lending and investment activities, such as borrowings from the FHLB, the interest expense associated with these other funding sources may be higher than the rates we are currently paying on our public funds deposits, which would adversely affect our net interest income. 32 Table of Contents Information Security Risks associated with system failures, service interruptions or other performance exceptions could negatively affect our earnings.
If we are forced to pay higher rates on our public funds accounts to retain those funds, or if we are unable to retain such funds and we are forced to rely on other sources of funds for our lending and investment activities, such as borrowings from the FHLB, the interest expense associated with these other funding sources may be higher than the rates we are currently paying on our public funds deposits, which would adversely affect our net interest income.
Our increased commercial lending, however, exposes us to greater risks than one- to four-family residential lending.
Our commercial lending exposes us to additional risk. Our commercial lending exposes us to greater risks than one- to four-family residential lending.
Any decline in the credit quality of these securities exposes us to the risk that the market value of the securities could decrease which may require us to write down their value and could lead to a possible default in payment.
Any decline in the credit quality of these securities exposes us to the risk that the market value of the securities could decrease which may require us to write down their value and could lead to a possible default in payment. Funding Our reliance on wholesale funding could adversely affect our liquidity and operating results.
In addition, it may take longer for our assets to reprice to adjust to a new rate environment because fixed rate loans do not fluctuate with interest rate changes and adjustable rate loans often have a specified initial fixed rate period before reset.
In addition, it takes longer for our assets to reprice to adjust to a new rate environment because fixed rate loans do not fluctuate with interest rate changes and adjustable rate loans often have a specified initial fixed rate period before reset. As of June 30, 2025, 75.5% of our loan portfolio was comprised of fixed rate loans.
In addition, changes to regulatory requirements could increase our costs of regulatory compliance and may significantly affect the markets in which we do business, the markets for and value of our loans and investments, and our ongoing operations, costs and profitability.
In addition, changes to regulatory requirements could increase our costs of regulatory compliance and may significantly affect the markets in which we do business, the markets for and value of our loans and investments, and our ongoing operations, costs and profitability. Business Issues We could incur future goodwill impairment. At June 30, 2025, our goodwill totaled $113.5 million.
If the assumptions used in our calculation methodology are incorrect, our allowance for credit losses may not be sufficient to cover losses inherent in our loan portfolio, resulting in further additions to our allowance.
If the assumptions used in our calculation methodology are inaccurate, our allowance for credit losses may be insufficient to cover losses inherent in our loan portfolio, resulting in further additions to our allowance. Significant additions to our allowance could materially decrease our net income.
We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans.
Asset Quality If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings will decrease. We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans.
An economic downturn could, therefore, result in losses that materially and adversely affect our business. Inflation has had, and may continue to have a negative effect on our results of operations and financial condition. Inflation rose sharply at the end of 2021 and has remained at an elevated level through the first half of calendar 2024.
An economic downturn could, therefore, result in losses that materially and adversely affect our business. 31 Table of Contents Inflation has had, and may continue to have a negative effect on our results of operations and financial condition.
These regulations may sometimes impose significant limitations on operations. The significant federal and state banking regulations that affect us are described under the heading “Item 1.
Federal and state banking regulations are designed primarily to protect the deposit insurance funds and consumers, not to benefit a company’s shareholders. These regulations may sometimes impose significant limitations on operations. The significant federal and state banking regulations that affect us are described under the heading “Item 1.
In addition, changes in interest rates can affect the average life of loans and securities. For example, a reduction in interest rates generally results in increased prepayments of loans and mortgage-backed securities, as borrowers refinance their debt in order to reduce their borrowing cost.
For example, a reduction in interest rates generally results in increased prepayments of loans and mortgage-backed securities, as borrowers refinance their debt in order to reduce their borrowing cost. In addition, interest rates also affect how much money we lend. For example, when interest rates rise, the cost of borrowing increases and loan originations tend to decrease.
Our level of non-owner occupied commercial real estate equaled 537% of Bank total risk-based capital at June 30, 2024, however our commercial real estate loan portfolio increased by only 19% during the preceding 36 months.
Our level of non-owner occupied commercial real estate equaled 535% of Bank total risk-based capital at June 30, 2025, however our commercial real estate loan portfolio increased by only 7% during the preceding 36 months. We may be required to record impairment charges with respect to our investment securities portfolio.
The valuation and liquidity of our securities could be adversely impacted by reduced market liquidity, increased normal bid-asked spreads and increased uncertainty of market participants, which could reduce the market value of our securities, including those with no apparent credit exposure. The valuation of our securities requires judgment and as market conditions change security values may also change.
At June 30, 2025, we had investment securities with fair values of approximately $1.12 billion. The valuation and liquidity of our securities could be adversely impacted by reduced market liquidity, increased normal bid-asked spreads and increased uncertainty of market participants, which could reduce the market value of our securities, including those with no apparent credit exposure.
Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory authorities might have a material adverse effect on our financial condition and results of operations. Our commercial lending exposes us to additional risk. Over the past several years, we have increased our focus on commercial lending.
In addition, bank regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or recognize further loan charge-offs. Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory authorities might have a material adverse effect on our financial condition and results of operations.
Consequently, declines in the fair value of these instruments resulting from changes in market interest rates have, and may continue to, adversely affect stockholders’ equity.
Consequently, declines in the fair value of these instruments resulting from changes in market interest rates have, and may continue to, adversely affect stockholders’ equity. 28 Table of Contents A significant portion of our loan portfolio has interest rates that will reset over the next 24 months.
Weather-related events may cause significant flooding and other storm-related damage and these outcomes may become more common in the future. Acts of terrorism, public health issues, and geopolitical and other external events could impact our ability to conduct business. Financial institutions have been, and continue to be, targets of terrorist threats aimed at compromising operating and communication systems.
Acts of terrorism, public health issues, and geopolitical and other external events could impact our ability to conduct business. Financial institutions have been, and continue to be, targets of terrorist threats aimed at compromising operating and communication systems. Additionally, the metropolitan New York area and northern New Jersey remain central targets for potential acts of terrorism.
These consequences could be exacerbated if we are not successful in introducing new products and other services, achieving market acceptance of its products and other services, developing and maintaining a strong client base, or prudently managing expenses. 31 Table of Contents Funding Our reliance on wholesale funding could adversely affect our liquidity and operating results.
These consequences could be exacerbated if we are not successful in introducing new products and other services, achieving market acceptance of our products and other services, developing and maintaining a strong client base, or prudently managing expenses. 32 Table of Contents Information Security and Use of Artificial Intelligence Technologies Risks associated with system failures, service interruptions or other performance exceptions could negatively affect our earnings.
An economic downturn or prolonged recession may result in the deterioration of the 30 Table of Contents quality of our loan portfolio and reduce our level of deposits, which in turn would hurt its business.
An economic downturn or prolonged recession may result in the deterioration of the quality of our loan portfolio and reduce our level of deposits, which in turn would hurt its business. If we experience an economic downturn or a prolonged economic recession occurs in the economy as a whole, borrowers will be less likely to repay their loans as scheduled.
The composition and allocation of our investment portfolio has historically emphasized U.S. agency mortgage-backed securities and U.S. agency debentures. While such assets remain a significant component of our investment portfolio at June 30, 2024, prior enhancements to our investment policies, strategies and infrastructure have enabled us to diversify the composition and allocation of our securities portfolio.
While such assets remain a significant component of our investment portfolio at June 30, 2025, prior enhancements to our investment policies, strategies and infrastructure have enabled us to diversify the composition and allocation of our securities portfolio. Such diversification has included investing in corporate debt, municipal obligations, subordinated debt securities issued by financial institutions and collateralized loan obligations.
While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition.
While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition. Additionally, global markets may be adversely affected by the emergence of widespread health emergencies or pandemics, cyber attacks or campaigns, military conflicts, terrorism or other geopolitical events.
Significant negative changes to valuations could result in impairments in the value of our securities portfolio, which could have an adverse effect on our financial condition or results of operations. Our investments in corporate and municipal debt securities, subordinated debt securities and collateralized loan obligations expose us to additional credit risks.
The valuation of our securities requires judgment and as market conditions change security values may also change. Significant negative changes to valuations could result in impairments in the value of our securities portfolio, which could have an adverse effect on our financial condition or results of operations.
If we experience an economic downturn or a prolonged economic recession occurs in the economy as a whole, borrowers will be less likely to repay their loans as scheduled. Unlike many larger institutions, we are not able to spread the risks of unfavorable local economic conditions across a large number of diversified economies.
Unlike many larger institutions, we are not able to spread the risks of unfavorable local economic conditions across a large number of diversified economies.
Furthermore, our Audit Committee is responsible for reviewing all audit findings related to information technology general controls, internal and external vulnerability, and penetration testing. The Board receives an annual information security report and the Enterprise Risk Management Committee receives an annual presentation from our Information Security Officer as it relates to cybersecurity and related issues.
Furthermore, our Audit Committee is responsible for reviewing all audit findings related to information technology general controls, internal and external vulnerability, and penetration testing. We also engage outside consultants to support our cybersecurity efforts.
Regulatory Matters We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations. The financial services industry is extensively regulated. Federal and state banking regulations are designed primarily to protect the deposit insurance funds and consumers, not to benefit a company’s shareholders.
As AI technologies continue to develop, we may be required to invest in enhanced governance, monitoring, and compliance frameworks to manage these risks effectively. Regulatory Matters We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations. The financial services industry is extensively regulated.
Additionally, we will carefully consider acquisition opportunities to further deploy capital when we expect such opportunities to significantly enhance long-term shareholder value. If we are unable to effectively and timely deploy capital through these strategies, it may constrain growth in earnings and return on equity and thereby diminish potential growth in stockholder value.
Additionally, we will carefully consider acquisition opportunities to further deploy capital when we expect such opportunities to significantly enhance long-term shareholder value.
Accordingly, our net interest margin is lower than it would have been if a higher proportion of our interest-earning assets consisted of loans.
A significant portion of our assets consists of investment securities, which generally yield less than loans and are classified as available for sale, potentially contributing to increased volatility in our equity. Our net interest margin is lower than it would have been if a higher proportion of our interest-earning assets consisted of loans.
Moreover, given that we actively manage our investment securities portfolio classified as available for sale, we may sell securities which could result in a realized loss, thereby reducing our net income. 28 Table of Contents Asset Quality If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings will decrease.
Moreover, given that we actively manage our investment securities portfolio classified as available for sale, we may sell securities which could result in a realized loss, thereby reducing our net income. Changes in market interest rates also impact the value of our interest-earning assets and interest-bearing liabilities as well as the value of our derivatives portfolios.
Beginning in March 2022, in response to rising inflation, the Federal Reserve Board’s Federal Open Market Committee systemically increased the target rate from 0.00% – 0.25% to 5.25% – 5.50% in July 2023. In addition, at June 30, 2024, the yield curve has remained inverted as short-term rates remain higher than long-term rates.
A flattening or an inversion of the yield curve is likely to have a negative impact on our net interest income. Beginning in March 2022, in response to rising inflation, the Federal Open Market Committee (the “Committee”) initiated a series of systematic rate hikes, raising the target federal funds rate from 0.00%–0.25% to a peak of 5.25%–5.50% by July 2023.
Removed
Our net interest spread and net interest margin have been and may in the future be reduced by potential increases in our cost of funds that may outpace any increases in our yield on interest-earnings assets.
Added
In the second half of 2024, the Committee began easing rates, bringing the target range down to 4.25%–4.50%, where it has remained through June 2025. As of June 30, 2025, the yield curve had flattened, although it remained inverted at certain maturities, with short-term rates at or above long-term rates.
Removed
As a result, a flattening or an inversion of the yield curve is likely to have a negative impact on our net interest income. Interest rates also affect how much money we lend. For example, when interest rates rise, the cost of borrowing increases and loan originations tend to decrease.
Added
These interest rate dynamics have pressured our net interest spread and net interest margin, both of which have been, and may continue to be, adversely affected by significant or unexpected shifts in market rates. Changes in interest rates can affect the average life of loans and securities.
Removed
Changes in market interest rates also impact the value of our interest-earning assets and interest-bearing liabilities as well as the value of our derivatives portfolios.
Added
In addition, a significant portion of our portfolio will mature over the next 24 months. Applicable increases in interest rates could harm our borrowers’ abilities to repay their loans. As of June 30, 2025, a significant portion of our loan portfolio is scheduled to reset or mature during fiscal 2026 and 2027.
Removed
A significant portion of our assets consists of investment securities, which generally have lower yields than loans, and we classify a significant portion of our investment securities as available for sale, which creates potential volatility in our equity and may have an adverse impact on our net income.
Added
Many of these loans were originated in calendar 2021 and 2022 at interest rates below current market levels. As a result, borrowers may face higher interest rates upon reset or refinancing, which could increase their debt service obligations.
Removed
As of June 30, 2024, our securities portfolio totaled $1.21 billion, or 15.7% of our total assets. Investment securities typically have lower yields than loans. For the year ended June 30, 2024, the weighted average yield of our investment securities portfolio was 4.38%, as compared to 4.45% for our loan portfolio.
Added
For maturing loans, borrowers will need to refinance, either with us or another lender, or repay the loans using other sources of funds. These higher borrowing costs may impact borrowers’ ability to meet their obligations, potentially leading to increased delinquencies or defaults. Any such deterioration in borrower performance could negatively affect our asset quality and operating results.
Removed
Our allowance for credit losses on loans was 0.78% of total loans at June 30, 2024 and significant additions to our allowance could materially decrease our net income. In addition, bank regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or recognize further loan charge-offs.
Added
Our investments in corporate and municipal debt securities, subordinated debt securities and collateralized loan obligations expose us to additional credit risks. The composition and allocation of our investment portfolio has historically emphasized U.S. agency mortgage-backed securities and U.S. agency debentures.
Removed
Income from secondary mortgage market operations is volatile, and we may incur losses with respect to our secondary mortgage market operations that could negatively affect our earnings. A component of our business strategy is to sell a portion of residential mortgage loans originated into the secondary market, earning non-interest income in the form of gains on sale.
Added
Inflation rose sharply at the end of 2021 and remained elevated through the first half of calendar 2024, before beginning to moderate in the latter half of 2024 and into calendar 2025. However, inflation levels continue to exceed the Federal Reserve’s long-term target of 2.0%.
Removed
For the year ended June 30, 2024, gains attributable to the sale of residential mortgage loans totaled $602,000, a decline of $158,000 from $760,000 for the year ended June 30, 2023.
Added
Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans.
Removed
When interest rates rise, as they have in the current environment, the demand for mortgage loans tends to fall and may reduce the 29 Table of Contents number of loans we can originate for sale. Weak or deteriorating economic conditions also tend to reduce loan demand.
Added
Any material interruption in our customers’ supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, reductions in federal subsidies or grants, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers’ supply chains, could have a negative impact on their business and ability to repay their borrowings with us.
Removed
If the residential mortgage loan demand decreases or we are unable to sell such loans for an adequate profit, then our non-interest income will likely decline which would adversely affect our earnings. We may be required to record impairment charges with respect to our investment securities portfolio.
Added
In the event of disruptions in our customers’ supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all.
Removed
At June 30, 2024, we had investment securities with fair values of approximately $1.19 billion on which we had approximately $150.1 million in gross unrealized losses and $2.9 million of gross unrealized gains.
Added
Additionally, changes in distribution of federal funds or freezing of federal funds, including reductions in federal workforce causing unemployment, could have an adverse effect on the ability of consumers and businesses to pay debts and/or affect the demand for loans and deposits.
Removed
Such diversification has included investing in corporate debt, municipal obligations, subordinated debt securities issued by financial institutions and collateralized loan obligations.
Added
Our adoption of artificial intelligence tools and adoption by our third-party vendors and service providers may increase the risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, clients, or counterparties, or other third parties.
Removed
Additionally, the metropolitan New York area and northern New Jersey remain central targets for potential acts of terrorism.
Added
We have made and expect to continue to make investments to integrate artificial intelligence tools into our solutions, including generative artificial intelligence, machine learning, and similar tools and technologies that collect, aggregate, analyze or generate data or other contents (collectively, “AI”), and we expect to continue to adopt such tools responsibly and as appropriate.
Removed
Additionally, global markets may be adversely affected by the emergence of widespread health emergencies or pandemics, cyber attacks or campaigns, military conflicts, terrorism or other geopolitical events, including the military conflict between Russia and Ukraine. The impact of global market fluctuations may affect our business liquidity.
Added
While these technologies enhance efficiency and scalability, their use can lead to concerns around safety and soundness, fair access to financial services, fair treatment to customers, inaccuracy of results broadly known as "hallucinations" and compliance with applicable laws and regulations.
Removed
We expect competitive pressures to intensify in the future, especially in light of legislative and regulatory initiatives arising out of the recent global economic crisis, technological innovations that alter the barriers to entry, current economic and market conditions, and government monetary and fiscal policies.
Added
AI systems may produce inaccurate, biased, or otherwise flawed outputs due to limitations in training data, model design, or system integration. Errors in AI-driven processes could lead to operational disruptions, regulatory scrutiny, reputational damage, or financial loss. Our reliance on third-party AI vendors introduces additional risks, including potential deficiencies in vendor oversight, data governance, and cybersecurity practices.
Removed
Business Issues We hold certain intangible assets, including goodwill, which have been partially impaired and could become further impaired in the future. If these assets are further or fully impaired in the future, our earnings would decrease.
Added
Furthermore, the regulatory landscape governing AI technologies is rapidly evolving. Legislative and regulatory developments may impose new compliance obligations or restrict certain uses of AI. Failure 33 Table of Contents to comply with applicable laws or to adapt to regulatory changes in a timely manner could result in enforcement actions, litigation, or reputational harm.
Removed
At June 30, 2024, we had approximately $115.5 million in intangible assets on our balance sheet, comprised of $113.5 million of goodwill and $1.9 million of core deposit intangibles. We are required to periodically test our goodwill and identifiable intangible assets for impairment.
Added
We have in the past, and may in the future, seek to grow our business by acquiring other businesses.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe engage third party security experts to supplement our internal Information Security team as well as for assessments, penetration tests and program enhancements, including vulnerability assessments, security framework maturity assessments and 35 Table of Contents identification of areas for continued focus and improvement.
Biggest changeWe engage third party security experts to supplement our internal Information Security team for assessments, penetration tests and program enhancements, including vulnerability assessments, security framework maturity assessments and identification of areas for continued focus and improvement. In addition, our third-party experts work with us to conduct cybersecurity tabletop exercises and internal phishing awareness campaigns.
We engage with a range of external experts, including cybersecurity assessors, consultants, auditors, and legal counsel in evaluating and testing our risk management systems. This enables us to leverage specialized knowledge and insights, ensuring our cybersecurity strategies and processes remain current.
We engage with a range of external experts, including cybersecurity assessors, consultants, auditors, and legal counsel in evaluating and testing our information security risk management systems. This enables us to leverage specialized knowledge and insights, ensuring our cybersecurity strategies and processes remain current.
Our Chief Technology and Innovation Officer ("CTIO"), along with key members of their team, regularly collaborate with peer banks, industry groups, and policymakers. We employ an in-depth, layered, defensive strategy with respect to our products, services and technology. We leverage people, processes and technology to manage and maintain cybersecurity controls.
Our Chief Technology and Innovation Officer ("CTIO"), along with key members of their team, regularly collaborate with peer banks, industry groups, and policymakers. We employ an in-depth, layered, defensive strategy with respect to our products, services and technology. We leverage people, processes and technology to manage and maintain information security controls.
We employ a variety of preventative and detective tools designed to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats. We have established processes and systems to mitigate cyber risk, including regular education and training, preparedness simulations and tabletop exercises, and recovery and resilience tests.
We employ a variety of preventative and detective tools designed to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats. We have established processes and systems to identify and mitigate information security risk, including regular education and training, preparedness simulations and tabletop exercises, and recovery and resilience tests.
Governance Our Board is actively engaged in the oversight of our cybersecurity program. Specifically, the Risk Committee is responsible for overseeing our information security program, including management’s actions to identify, assess, mitigate, and remediate material cyber issues and risks.
Governance Our Board is actively engaged in the oversight of our information security program. In 2025 the Board created an Information Security Committee, which is responsible for overseeing our information security program, including management’s actions to identify, assess, mitigate, and remediate material information security issues and risks.
Our CTIO provides quarterly reports to the Risk Committee regarding information security programs, key enterprise cyber initiatives, and significant cybersecurity and privacy incidents. Our CTIO is part of the risk management function, reporting directly to our Chief Executive Officer (“CEO”). Various management committees provide oversight of the information security and technology programs.
Our CTIO provides reports, at least quarterly, to the Information Security Committee regarding information security programs, key enterprise information security initiatives, and significant cybersecurity and privacy incidents. Our CTIO is part of the risk management function, reporting directly to our Chief Executive Officer (“CEO”). 36 Table of Contents
Our processes, systems and controls are reviewed periodically by internal and external auditors, Federal and State bank examiners, and independent external partners to assess design and operating effectiveness. We also maintain information security risk insurance coverage.
Our processes, systems and controls are reviewed periodically by internal and external auditors, Federal and State bank examiners, and independent external partners to assess design and operating effectiveness. We also maintain cyber risk insurance coverage commensurate for an institution of our size and complexity.
In addition, our third-party experts work with us to conduct cybersecurity tabletop exercises and internal phishing awareness campaigns. We use the findings of these exercises to improve our practices, procedures, and technologies. We also engage third party security experts to support our cybersecurity threat and incident response management and maintain information security risk insurance coverage.
We use the findings of these exercises to improve our practices, procedures, and technologies. We also engage third party security experts to support our cybersecurity threat and incident response management and maintain information security risk insurance coverage.
Item 1C. Cybersecurity Risk Management and Strategy We structure our information security program around the Federal Financial Institutions Examinations Council (FFIEC) Information Security program guidance, including the FFIEC Cybersecurity Assessment Toolkit, regulatory guidance, and other industry standards. We leverage industry and government associations, third-party benchmarking, audits and threat intelligence feeds to promote program effectiveness.
Item 1C. Cybersecurity Risk Management and Strategy We structure our information security program around Federal Financial Institutions Examinations Council (“FFIEC”) and Federal Deposit Insurance Corporation (“FDIC”) regulatory guidance, along with other applicable industry standards. We leverage industry and government associations, third-party benchmarking, audits and threat intelligence feeds to evaluate program effectiveness.
Removed
These committees generally meet quarterly and summaries of key issues discussed and actions taken are provided to the Risk Committee.
Added
The secure maintenance and transmission of confidential information, as well as execution of transactions over the systems of our third-party service providers, is essential to protect us and our customers against fraud and security breaches and to maintain customer confidence.
Added
Information security and risk management are an integral part of our new product and service implementation and vendor relationship management to confirm that they all meet the minimum standards and policies established and approved by our Board.
Added
We have developed processes to identify and oversee risks from cybersecurity threats associated with our third-party service providers, which includes the information security team assisting with and assessing cybersecurity robustness during vendor selection and onboarding as well as risk-based monitoring of vendors on an ongoing basis.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAt June 30, 2024, our net investment in property and equipment totaled $44.9 million. Additional information regarding our properties as of June 30, 2024, is presented in Note 7 to the audited consolidated financial statements.
Biggest changeAt June 30, 2025, our net investment in property and equipment totaled $43.9 million. Additional information regarding our properties as of June 30, 2025, is presented in Note 7 to the audited consolidated financial statements.
At June 30, 2024, the Company operated 43 branch offices located in Bergen, Essex, Hudson, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Union counties, New Jersey and Kings and Richmond counties, New York. At June 30, 2024, 18 of our branch offices are leased with remaining terms between seven months and nine years.
At June 30, 2025, the Company operated 43 branch offices located in Bergen, Essex, Hudson, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Union counties, New Jersey and Kings and Richmond counties, New York. At June 30, 2025, 18 of our branch offices are leased with remaining terms between seven months and nine years.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAt June 30, 2024, there were no lawsuits pending or known to be contemplated against us that would be expected to have a material effect on operations or income. Item 4. Mine Safety Disclosures Not applicable. 36 Table of Contents PART II
Biggest changeAt June 30, 2025, there were no lawsuits pending or known to be contemplated against us that would be expected to have a material effect on operations or income. Item 4. Mine Safety Disclosures Not applicable. 37 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAt June 30, 2019 2020 2021 2022 2023 2024 Kearny Financial Corp. $ 100 $ 63 $ 95 $ 92 $ 61 $ 57 NASDAQ Composite Index 100 127 184 141 178 231 S&P U.S.
Biggest changeAt June 30, 2020 2021 2022 2023 2024 2025 Kearny Financial Corp. $ 100 $ 151 $ 145 $ 97 $ 90 $ 101 NASDAQ Composite Index 100 145 111 140 182 210 S&P U.S.
The following graph compares the cumulative total shareholder return on the Company’s common stock with the cumulative total return on the NASDAQ Composite Index and a peer group of the S&P U.S. SmallCap Banks Index, in each case assuming an investment of $100 as of June 30, 2019. Total return assumes the reinvestment of all dividends.
The following graph compares the cumulative total shareholder return on the Company’s common stock with the cumulative total return on the NASDAQ Composite Index and a peer group of the S&P U.S. SmallCap Banks Index, in each case assuming an investment of $100 as of June 30, 2020. Total return assumes the reinvestment of all dividends.
There can be no assurance that the Company’s future stock performance will be the same or similar to the historical stock performance shown in the graph above. The Company neither makes nor endorses any predictions as to stock performance. Item 6. [Reserved] 38 Table of Contents
There can be no assurance that the Company’s future stock performance will be the same or similar to the historical stock performance shown in the graph above. The Company neither makes nor endorses any predictions as to stock performance. Item 6. [Reserved] 39 Table of Contents
The Company did not repurchase any shares of its common stock during the fourth quarter of the fiscal year ended June 30, 2024. 37 Table of Contents Stock Performance Graph.
The Company did not repurchase any shares of its common stock during the fourth quarter of the fiscal year ended June 30, 2025. 38 Table of Contents Stock Performance Graph.
For discussion of corporate and regulatory limitations applicable to the payment of dividends, see “Item 1. Business-Regulation.” As of August 19, 2024, there were 4,040 registered holders of record of the Company’s common stock.
For discussion of corporate and regulatory limitations applicable to the payment of dividends, see “Item 1. Business-Regulation.” As of August 19, 2025, there were 3,873 registered holders of record of the Company’s common stock.
SmallCap Banks Index 100 75 126 116 95 116 The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. The S&P U.S. SmallCap Banks Index includes all major exchange (NYSE, NYSE American and NASDAQ) traded banks under $15 billion in market capitalization in S&P’s coverage universe.
SmallCap Banks Index 100 168 156 127 156 192 The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. The S&P U.S. SmallCap Banks Index includes all major exchange (NYSE, NYSE American and NASDAQ) traded banks under $15 billion in market capitalization in S&P’s coverage universe.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table sets forth information concerning balances and interest rates on our short-term borrowings at and for the periods shown: At or For the Years Ended June 30, 2024 2023 2022 (Dollars in Thousands) Balance at end of year $ 1,400,000 $ 1,175,000 $ 625,000 Average balance during year $ 1,314,686 $ 900,997 $ 476,142 Maximum outstanding at any month end $ 1,490,000 $ 1,280,000 $ 684,000 Weighted average interest rate at end of year 5.47 % 5.42 % 1.72 % Weighted average interest rate during year 5.52 % 4.49 % 0.58 % The following table discloses our contractual obligations and commitments as of June 30, 2024: June 30, 2024 Less than One Year One to Three Years Over Three Years to Five Years Over Five Years Total (In Thousands) Contractual obligations Operating lease obligations $ 3,390 $ 6,622 $ 3,994 $ 2,847 $ 16,853 Certificates of deposit 1,487,483 106,362 8,126 5,390 1,607,361 Federal Home Loan Bank Advances 1,328,500 6,500 200,000 — 1,535,000 Total contractual obligations $ 2,819,373 $ 119,484 $ 212,120 $ 8,237 $ 3,159,214 Commitments Undisbursed funds from approved lines of credit (1) $ 74,822 $ 21,380 $ 3,626 $ 57,474 $ 157,302 Construction loans in process (1) 75,672 — — — 75,672 Other commitments to extend credit (1) 47,946 — — — 47,946 Total commitments $ 198,440 $ 21,380 $ 3,626 $ 57,474 $ 280,920 ________________________________________ (1) Represents amounts committed to customers. 49 Table of Contents In addition to the loan commitments noted above, the pipeline of loans held for sale included $16.0 million of in process loans whose terms included interest rate locks to borrowers that were paired with a best-efforts commitment to sell the loan to a buyer at a fixed price and within a predetermined timeframe after the sale commitment is established.
Biggest changeAs of the same date, we had $150.0 million outstanding via our overnight line of credit with the FHLB. 49 Table of Contents The following table sets forth information concerning balances and interest rates on our short-term borrowings at and for the periods shown: At or For the Years Ended June 30, 2025 2024 2023 (Dollars in Thousands) Balance at end of year $ 1,050,000 $ 1,400,000 $ 1,175,000 Average balance during year $ 1,024,959 $ 1,314,686 $ 900,997 Maximum outstanding at any month end $ 1,425,000 $ 1,490,000 $ 1,280,000 Weighted average interest rate at end of year 4.46 % 5.47 % 5.42 % Weighted average interest rate during year 4.88 % 5.52 % 4.49 % The following table discloses our contractual obligations and commitments as of June 30, 2025: June 30, 2025 Less than One Year One to Three Years Over Three Years to Five Years Over Five Years Total (In Thousands) Contractual obligations Operating lease obligations $ 3,480 $ 5,797 $ 3,008 $ 1,783 $ 14,068 Certificates of deposit 1,911,408 51,627 8,175 5,364 1,976,574 Federal Home Loan Bank Advances 906,500 200,000 — — 1,106,500 Total contractual obligations $ 2,821,388 $ 257,424 $ 11,183 $ 7,147 $ 3,097,142 Commitments Undisbursed funds from approved lines of credit (1) $ 74,076 $ 24,153 $ 4,116 $ 74,779 $ 177,124 Construction loans in process (1) 39,235 76,416 — — 115,651 Other commitments to extend credit (1) 26,364 — — — 26,364 Total commitments $ 139,675 $ 100,569 $ 4,116 $ 74,779 $ 319,139 ________________________________________ (1) Represents amounts committed to customers.
In addition to the commitments noted above, we are party to standby letters of credit totaling approximately $160,000 at June 30, 2024 through which we guarantee certain specific business obligations of our commercial customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
In addition to the commitments noted above, we are party to standby letters of credit totaling approximately $160,000 at June 30, 2025 through which we guarantee certain specific business obligations of our commercial customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
(2) Efficiency ratio equals non-interest expense divided by the sum of net interest income and non-interest income. (3) Tangible equity equals total stockholders’ equity reduced by goodwill and core deposit intangible assets. Comparison of Financial Condition at June 30, 2024 and June 30, 2023 Executive Summary.
(2) Efficiency ratio equals non-interest expense divided by the sum of net interest income and non-interest income. (3) Tangible equity equals total stockholders’ equity reduced by goodwill and core deposit intangible assets. Comparison of Financial Condition at June 30, 2025 and June 30, 2024 Executive Summary.
We derived the average yields and costs by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented with daily balances used to derive average balances. No tax equivalent adjustments have been made to yield or costs.
We derived the average yields and costs by dividing income or expense by the average balance of assets or liabilities, respectively, for the years presented with daily balances used to derive average balances. No tax equivalent adjustments have been made to yield or costs.
The decrease reflected increases in the cost of interest-bearing liabilities, increases in the average balances of interest-bearing borrowings and decreases in the average balances of interest-earning assets, partially offset by higher yields on interest-earning assets and decreases in the average balances of interest-bearing deposits. 45 Table of Contents Details surrounding the composition of, and changes to, net interest income are presented in the table below which reflects the components of the average balance sheet and of net interest income for the periods indicated.
The decrease reflected increases in the cost and average balances of interest-bearing deposits and decreases in the average balances of interest-earning assets, partially offset by higher yields on interest-earning assets and decreases in the average balances of interest-bearing borrowings. 46 Table of Contents Details surrounding the composition of, and changes to, net interest income are presented in the table below which reflects the components of the average balance sheet and of net interest income for the periods indicated.
Business” of this Annual Report on Form 10-K, as well as in Note 3 to the audited consolidated financial statements. Loans Held-for-Sale. Loans held-for-sale totaled $6.0 million at June 30, 2024 as compared to $9.6 million at June 30, 2023 and are reported separately from the balance of net loans receivable.
Business” of this Annual Report on Form 10-K, as well as in Note 3 to the audited consolidated financial statements. Loans Held-for-Sale. Loans held-for-sale totaled $5.9 million at June 30, 2025 as compared to $6.0 million at June 30, 2024 and are reported separately from the balance of net loans receivable.
The quantitative assessment of goodwill for our single reporting unit was performed utilizing a discounted cash flow analysis (“income approach”) and estimates of selected market information (“market approaches”). The result of the income approach was weighted at 50% and the results of the market approaches comprised the remaining 50% in determining the fair value of our single reporting unit.
The quantitative assessment of goodwill for our single reporting unit was performed utilizing a discounted cash flow analysis (“income approach”) and estimates of selected market information (“market approaches”). The result of the income approach was weighted at 70% and the results of the market approaches comprised the remaining 30% in determining the fair value of our single reporting unit.
As of June 30, 2024, Kearny Financial and Kearny Bank exceeded all capital requirements of the federal banking regulators and were considered well capitalized.
As of June 30, 2025, Kearny Financial and Kearny Bank exceeded all capital requirements of the federal banking regulators and were considered well capitalized.
At June 30, 2024, the most severe historical loss rate for multi-family and nonresidential mortgages loans was 1.69%. Management performed a hypothetical sensitivity analysis to understand the impact of a change in a key input on our ACL.
At June 30, 2025, the most severe historical loss rate for multi-family and nonresidential mortgages loans was 1.66%. Management performed a hypothetical sensitivity analysis to understand the impact of a change in a key input on our ACL.
(6) Net interest margin represents net interest income as a percentage of average interest-earning assets. 46 Table of Contents The following table reflects the dollar amount of changes in interest income and interest expense to changes in volume and in prevailing interest rates during the periods indicated.
(6) Net interest margin represents net interest income as a percentage of average interest-earning assets. 47 Table of Contents The following table reflects the dollar amount of changes in interest income and interest expense to changes in volume and in prevailing interest rates during the years indicated.
For additional information regarding our outstanding lending commitments at June 30, 2024, see Note 16 to the audited consolidated financial statements. Capital Consistent with our goals to operate as a sound and profitable financial organization, Kearny Financial and Kearny Bank actively seek to maintain our well capitalized status in accordance with regulatory standards.
For additional information regarding our outstanding lending commitments at June 30, 2025, see Note 16 to the audited consolidated financial statements. 50 Table of Contents Capital Consistent with our goals to operate as a sound and profitable financial organization, Kearny Financial and Kearny Bank actively seek to maintain our well capitalized status in accordance with regulatory standards.
See Note 1 to our audited consolidated financial statements for a detailed discussion of our accounting policies and methodologies for establishing the ACL. Management believes the following information may enable investors to better understand the changes in our ACL. Our ACL totaled $44.9 million and $48.7 million at June 30, 2024 and 2023, respectively.
See Note 1 to our audited consolidated financial statements for a detailed discussion of our accounting policies and methodologies for establishing the ACL. Management believes the following information may enable investors to better understand the changes in our ACL. Our ACL totaled $46.2 million and $44.9 million at June 30, 2025 and 2024, respectively.
At June 30, 2024, outstanding loan commitments relating to loans held in portfolio totaled $280.9 million compared to $251.2 million at June 30, 2023. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.
At June 30, 2025, outstanding loan commitments relating to loans held in portfolio totaled $319.1 million compared to $280.9 million at June 30, 2024. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.
At June 30, 2024, if the four-quarter national unemployment rate forecast had been 9% rather than an average of approximately 4.0%, our ACL as a percent of total loans would have increased 37 basis points from 0.78% to 1.15%. This sensitivity analysis includes the impact to both the quantitative and qualitative components of our ACL.
At June 30, 2025, if the four-quarter national unemployment rate forecast had been 9% rather than an average of approximately 4.1%, our ACL as a percent of total loans would have increased 34 basis points from 0.79% to 1.13%. This sensitivity analysis includes the impact to both the quantitative and qualitative components of our ACL.
Liquidity, at June 30, 2024, included $63.9 million of short-term cash and equivalents and $1.07 billion of investment securities available for sale which can readily be sold or pledged as collateral, if necessary. In addition, we have the capacity to borrow additional funds from the FHLB, FRB or via unsecured overnight borrowings.
Liquidity, at June 30, 2025, included $167.3 million of short-term cash and equivalents and $1.01 billion of investment securities available for sale which can readily be sold or pledged as collateral, if necessary. In addition, we have the capacity to borrow additional funds from the FHLB, FRB or via unsecured overnight borrowings.
(4) Includes average balances of non-interest-bearing deposits of $595.3 million, $644.5 million and $624.7 million for the years ended June 30, 2024, 2023 and 2022, respectively. (5) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(4) Includes average balances of non-interest-bearing deposits of $597.2 million, $595.3 million and $644.5 million for the years ended June 30, 2025, 2024 and 2023, respectively. (5) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $764.4 million, or 14.8% of total deposits, at June 30, 2024 compared to $710.4 million, or 12.6% of total deposits, at June 30, 2023. Additional information about our deposits at June 30, 2024 is presented under “Item 1.
Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $813.8 million, or 14.3% of total deposits, at June 30, 2025 compared to $764.4 million, or 14.8% of total deposits, at June 30, 2024. Additional information about our deposits at June 30, 2025 is presented under “Item 1.
The decrease in nonperforming loans was largely attributable to a decrease of $6.7 million in nonperforming nonresidential mortgage loans, partially offset by an increase of $3.5 million in nonperforming multi-family mortgage loans. Additional information about nonperforming loans and reportable loan modifications at June 30, 2024 is presented under “Item 1.
The increase in nonperforming loans was largely attributable to an increase of $8.3 million in nonperforming multi-family mortgage loans, partially offset by a decrease of $4.1 million in nonperforming nonresidential mortgage loans. Additional information about nonperforming loans and reportable loan modifications at June 30, 2025 is presented under “Item 1.
The aggregate balance of other assets, including premises and equipment, FHLB stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance, deferred income taxes, OREO and other assets, decreased by $112.7 million to $717.1 million at June 30, 2024 from $829.8 million at June 30, 2023.
The aggregate balance of other assets, including premises and equipment, FHLB stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance, deferred income taxes, OREO and other assets, decreased by $49.8 million to $667.3 million at June 30, 2025 from $717.1 million at June 30, 2024.
Additional information regarding the allowance for credit losses and the associated provision recognized during the year ended June 30, 2024 is presented under “Item 1, Business” on this Annual Report on Form 10-K as well as in Note 1 and Note 5 to the audited consolidated financial statements as well as the Comparison of Financial Condition at June 30, 2024.
Additional information regarding the allowance for credit losses and the associated provision recognized during the year ended June 30, 2025 is presented under “Item 1, Business” on this Annual Report on Form 10-K as well as in Note 1 and Note 5 to the audited consolidated financial statements. Non-Interest Income .
The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, increased by $2.4 million to $62.0 million at June 30, 2024 from $59.5 million at June 30, 2023. The change in the balance of other liabilities generally reflected normal operating fluctuations within these line items. Stockholders’ Equity.
Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, increased by $802,000 to $62.8 million at June 30, 2025 from $62.0 million at June 30, 2024. The change in the balance of other liabilities generally reflected normal operating fluctuations within these line items. Stockholders’ Equity.
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $131.5 million for the year ended June 30, 2024 and was supplemented with loan purchases totaling $60.3 million. Home equity loan and line of credit origination volume for the same period totaled $18.0 million. Additional information about our loans at June 30, 2024 is presented under “Item 1.
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $144.3 million for the year ended June 30, 2025 and was supplemented with loan purchases totaling $730,000. Home equity loan and line of credit origination volume for the same period totaled $29.7 million. Additional information about our loans at June 30, 2025 is presented under “Item 1.
Business” of this Annual Report on Form 10-K, as well as in Note 4 to the audited consolidated financial statements. Nonperforming loans. Nonperforming loans decreased by $2.7 million to $39.9 million, or 0.70% of total loans, at June 30, 2024 from $42.6 million, or 0.73% of total loans, at June 30, 2023.
Business” of this Annual Report on Form 10-K, as well as in Note 4 to the audited consolidated financial statements. Nonperforming loans. Nonperforming loans increased by $5.7 million to $45.6 million, or 0.79% of total loans, at June 30, 2025 from $39.9 million, or 0.70% of total loans, at June 30, 2024.
Our primary sources of funds are deposits, borrowings, cash flows from investment securities and loans receivable and funds provided from operations. While scheduled payments from the amortization and maturity of loans and investment securities are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and prepayments on loans and securities.
While scheduled payments from the amortization and maturity of loans and investment securities are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and prepayments on loans and securities.
Included in net interest income for the years ended June 30, 2024 and 2023, respectively, was purchase accounting accretion of $2.6 million and $5.3 million and loan prepayment penalty income of $879,000 and $895,000. Net interest margin decreased 40 basis points to 1.94% for the year ended June 30, 2024, from 2.34% for the year ended June 30, 2023.
Included in net interest income for the years ended June 30, 2025 and 2024, respectively, was purchase accounting accretion of $2.4 million and $2.6 million and loan prepayment penalty income of $783,000 and $879,000. Net interest margin decreased 6 basis points to 1.88% for the year ended June 30, 2025, from 1.94% for the year ended June 30, 2024.
As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $789.0 million, of which none was outstanding. Deposits decreased $471.1 million to $5.16 billion at June 30, 2024 from $5.63 billion at June 30, 2023.
As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $845.0 million, of which none was outstanding. Deposits increased $517.1 million to $5.68 billion at June 30, 2025 from $5.16 billion at June 30, 2024.
In the future, changes in projected future cash flows, discount rate assumption, or market estimates may result in further impairment of goodwill. 40 Table of Contents Financial Overview The following financial information and other data in this section are derived from our audited consolidated financial statements and should be read together therewith: At June 30, 2024 2023 2022 (In Thousands) Balance Sheet Data: Cash and equivalents $ 63,864 $ 70,515 $ 101,615 Assets 7,683,461 8,064,815 7,719,883 Net loans receivable 5,687,848 5,780,687 5,370,787 Investment securities available for sale 1,072,833 1,227,729 1,344,093 Investment securities held to maturity 135,742 146,465 118,291 Goodwill 113,525 210,895 210,895 Deposits 5,158,123 5,629,183 5,862,256 Borrowings 1,709,789 1,506,812 901,337 Stockholders' equity 753,571 869,284 894,000 For the Years Ended June 30, 2024 2023 2022 (Dollars in Thousands, Except Per Share Amounts) Summary of Operations: Interest income $ 328,868 $ 293,724 $ 226,272 Interest expense 186,274 117,859 29,669 Net interest income 142,594 175,865 196,603 Provision for (reversal of) credit losses 6,226 2,486 (7,518) Net interest income after provision for (reversal of) credit losses 136,368 173,379 204,121 Non-interest income (1,993) 2,751 13,934 Non-interest expenses 215,151 123,751 125,708 (Loss) income before taxes (80,776) 52,379 92,347 Income tax expense 5,891 11,568 24,800 Net (loss) income $ (86,667) $ 40,811 $ 67,547 Per Share Data: Net (loss) income per share - Basic and diluted $ (1.39) $ 0.63 $ 0.95 Weighted average number of common shares outstanding (in thousands): Basic 62,444 64,804 70,911 Diluted 62,444 64,804 70,933 Cash dividends per share $ 0.44 $ 0.44 $ 0.43 Dividend payout ratio (1) (31.9) % 70.2 % 45.1 % ________________________________________ (1) Represents cash dividends declared divided by net income. 41 Table of Contents At or For the Years Ended June 30, 2024 2023 2022 Performance Ratios: Return on average assets (ratio of net income to average total assets) (1.10) % 0.51 % 0.93 % Return on average equity (ratio of net income to average total equity) (10.51) % 4.66 % 6.86 % Return on average tangible equity (ratio of net income to average tangible equity) (1) (13.64) % 6.17 % 8.77 % Net interest rate spread 1.57 % 2.09 % 2.86 % Net interest margin 1.94 % 2.34 % 2.94 % Average interest-earning assets to average interest-bearing liabilities 114.73 % 115.66 % 118.93 % Efficiency ratio (2) 153.02 % 69.28 % 59.71 % Non-interest expense to average assets 2.73 % 1.53 % 1.73 % Asset Quality Ratios: Non-performing loans to total loans 0.70 % 0.73 % 1.30 % Non-performing assets to total assets 0.52 % 0.69 % 1.19 % Net charge-offs to average loans outstanding 0.17 % 0.01 % 0.07 % Allowance for credit losses to total loans 0.78 % 0.83 % 0.87 % Allowance for credit losses to non-performing loans 112.68 % 114.33 % 66.92 % Capital Ratios: Average equity to average assets 10.46 % 10.85 % 13.52 % Equity to assets at period end 9.81 % 10.78 % 11.58 % Tangible equity to tangible assets at period end (3) 8.43 % 8.35 % 9.06 % ________________________________________ (1) Average tangible equity equals average total stockholders’ equity reduced by average goodwill and average core deposit intangible assets.
In the future, changes in projected future cash flows, discount rate assumption, or market estimates may result in further impairment of goodwill. 41 Table of Contents Financial Overview The following financial information and other data in this section are derived from our audited consolidated financial statements and should be read together therewith: At June 30, 2025 2024 2023 (In Thousands) Balance Sheet Data: Cash and equivalents $ 167,269 $ 63,864 $ 70,515 Assets 7,740,450 7,683,461 8,064,815 Net loans receivable 5,766,746 5,687,848 5,780,687 Investment securities available for sale 1,012,969 1,072,833 1,227,729 Investment securities held to maturity 120,217 135,742 146,465 Goodwill 113,525 113,525 210,895 Deposits 5,675,217 5,158,123 5,629,183 Borrowings 1,256,491 1,709,789 1,506,812 Stockholders' equity 745,962 753,571 869,284 For the Years Ended June 30, 2025 2024 2023 (Dollars in Thousands, Except Per Share Amounts) Summary of Operations: Interest income $ 324,476 $ 328,868 $ 293,724 Interest expense 189,533 186,274 117,859 Net interest income 134,943 142,594 175,865 Provision for credit losses 2,366 6,226 2,486 Net interest income after provision for credit losses 132,577 136,368 173,379 Non-interest income 19,052 (1,993) 2,751 Non-interest expenses 120,630 215,151 123,751 Income (loss) before taxes 30,999 (80,776) 52,379 Income tax expense 4,924 5,891 11,568 Net income (loss) $ 26,075 $ (86,667) $ 40,811 Per Share Data: Net income (loss) per share - Basic and diluted $ 0.42 $ (1.39) $ 0.63 Weighted average number of common shares outstanding (in thousands): Basic 62,508 62,444 64,804 Diluted 62,716 62,444 64,804 Cash dividends per share $ 0.44 $ 0.44 $ 0.44 Dividend payout ratio (1) 106.1 % (31.9) % 70.2 % ________________________________________ (1) Represents cash dividends declared divided by net income (loss). 42 Table of Contents At or For the Years Ended June 30, 2025 2024 2023 Performance Ratios: Return on average assets (ratio of net income to average total assets) 0.34 % (1.10) % 0.51 % Return on average equity (ratio of net income to average total equity) 3.49 % (10.51) % 4.66 % Return on average tangible equity (ratio of net income to average tangible equity) (1) 4.18 % (13.64) % 6.17 % Net interest rate spread 1.47 % 1.57 % 2.09 % Net interest margin 1.88 % 1.94 % 2.34 % Average interest-earning assets to average interest-bearing liabilities 115.21 % 114.73 % 115.66 % Efficiency ratio (2) 78.33 % 153.02 % 69.28 % Non-interest expense to average assets 1.58 % 2.73 % 1.53 % Asset Quality Ratios: Non-performing loans to total loans 0.78 % 0.70 % 0.73 % Non-performing assets to total assets 0.59 % 0.52 % 0.69 % Net charge-offs to average loans outstanding 0.02 % 0.17 % 0.01 % Allowance for credit losses to total loans 0.79 % 0.78 % 0.83 % Allowance for credit losses to non-performing loans 101.30 % 112.68 % 114.33 % Capital Ratios: Average equity to average assets 9.77 % 10.46 % 10.85 % Equity to assets at period end 9.64 % 9.81 % 10.78 % Tangible equity to tangible assets at period end (3) 8.27 % 8.43 % 8.35 % ________________________________________ (1) Average tangible equity equals average total stockholders’ equity reduced by average goodwill and average core deposit intangible assets.
Business” of this Annual Report on Form 10-K, as well as in Note 4 to the audited consolidated financial statements. Allowance for Credit Losses. At June 30, 2024, the ACL totaled $44.9 million, or 0.78% of total loans, reflecting a decrease of $3.8 million from $48.7 million, or 0.83% of total loans, at June 30, 2023.
Business” of this Annual Report on Form 10-K, as well as in Note 4 to the audited consolidated financial statements. Allowance for Credit Losses. At June 30, 2025, the ACL totaled $46.2 million, or 0.79% of total loans, reflecting an increase of $1.3 million from $44.9 million, or 0.78% of total loans, at June 30, 2024.
As of June 30, 2024, we had the capacity to borrow additional funds totaling $1.06 billion and $381.8 million from the FHLB and FRB, respectively, without pledging additional collateral. We had the ability to pledge additional securities to borrow an additional $381.4 million at June 30, 2024.
As of June 30, 2025, we had the capacity to borrow additional funds totaling $695.0 million and $1.19 billion from the FHLB and FRB, respectively, without pledging additional collateral. We had the ability to pledge additional securities to borrow an additional $337.3 million at June 30, 2025.
Our ACL totaled $44.9 million at June 30, 2024 and the amount allocated to our collectively evaluated multi-family and nonresidential mortgage loans was $29.7 million, of which $19.7 million was attributable to qualitative loss factors. Changes in managements’ judgement of qualitative loss factors could result in a significant change to the ACL.
Our ACL totaled $46.2 million at June 30, 2025 and the amount allocated to our collectively evaluated multi-family and nonresidential mortgage loans was $30.5 million, of which $21.1 million was attributable to qualitative loss factors. Changes in managements’ judgment of qualitative loss factors could result in a significant change to the ACL.
Investment securities held to maturity decreased by $10.7 million to $135.7 million at June 30, 2024 from $146.5 million at June 30, 2023. The decrease was largely the result of principal repayments of $10.9 million, partially offset by purchases of $300,000. Additional information regarding investment securities at June 30, 2024 is presented under “Item 1.
Investment securities held to maturity decreased by $15.5 million to $120.2 million at June 30, 2025 from $135.7 million at June 30, 2024. The decrease was largely the result of principal repayments of $15.6 million. Additional information regarding investment securities at June 30, 2025 is presented under “Item 1.
Non-interest expense increased by $91.4 million to $215.2 million for the year ended June 30, 2024 from $123.8 million for the year ended June 30, 2023, driven by a pre-tax, non-cash goodwill impairment of $97.4 million recognized in the current year period. Excluding the goodwill impairment, non-interest expense decreased $6.0 million compared to the prior year period.
Non-Interest Expense . Non-interest expense decreased by $94.5 million to $120.6 million for the year ended June 30, 2025 from $215.2 million for the year ended June 30, 2024, driven by the absence of a pre-tax, non-cash goodwill impairment of $97.4 million recognized in the prior year period.
Our ACL on individually analyzed loans decreased $2.6 million during the year ended June 30, 2024. 39 Table of Contents Goodwill.
Our ACL on individually analyzed loans increased $1.6 million during the year ended June 30, 2025. 40 Table of Contents Goodwill.
The balance of borrowings increased by $203.0 million, or 13.5%, to $1.71 billion at June 30, 2024 from $1.51 billion at June 30, 2023 which included overnight borrowings totaling $175.0 million and $225.0 million at June 30, 2024 and 2023, respectively.
The balance of borrowings decreased by $453.3 million, or 26.5%, to $1.26 billion at June 30, 2025 from $1.71 billion at June 30, 2024 which included overnight borrowings totaling $150.0 million and $175.0 million at June 30, 2025 and 2024, respectively.
For the Years Ended June 30, 2024 2023 2022 Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost (Dollars in Thousands) Interest-earning assets: Loans receivable (1) $ 5,752,496 $ 256,007 4.45 % $ 5,827,123 $ 233,147 4.00 % $ 4,922,400 $ 190,520 3.87 % Taxable investment securities (2) 1,438,200 63,313 4.40 1,532,961 54,855 3.58 1,622,475 32,746 2.02 Tax-exempt securities (2) 14,718 336 2.28 30,332 694 2.29 55,981 1,273 2.27 Other interest-earning assets (3) 131,019 9,212 7.03 115,390 5,028 4.36 82,802 1,733 2.09 Total interest-earning assets 7,336,433 328,868 4.48 7,505,806 293,724 3.91 6,683,658 226,272 3.39 Non-interest-earning assets 541,859 563,131 598,712 Total assets $ 7,878,292 $ 8,068,937 $ 7,282,370 Interest-bearing liabilities: Interest-bearing demand $ 2,308,893 $ 67,183 2.91 $ 2,349,802 $ 40,650 1.73 $ 2,067,200 $ 5,123 0.25 Savings 662,981 3,293 0.50 896,651 3,351 0.37 1,088,971 1,190 0.11 Certificates of deposit 1,778,682 51,938 2.92 2,083,864 34,162 1.64 1,711,276 8,895 0.52 Total interest-bearing deposits 4,750,556 122,414 2.58 5,330,317 78,163 1.47 4,867,447 15,208 0.31 FHLB advances 1,458,941 53,948 3.70 1,101,658 37,734 3.43 679,388 14,067 2.07 Other borrowings 184,768 9,912 5.36 57,468 1,962 3.41 72,841 394 0.54 Total borrowings 1,643,709 63,860 3.89 1,159,126 39,696 3.42 752,229 14,461 1.92 Total interest-bearing liabilities 6,394,265 186,274 2.91 6,489,443 117,859 1.82 5,619,676 29,669 0.53 Non-interest-bearing liabilities (4) 659,710 704,136 678,143 Total liabilities 7,053,975 7,193,579 6,297,819 Stockholders' equity 824,317 875,358 984,551 Total liabilities and stockholders' equity $ 7,878,292 $ 8,068,937 $ 7,282,370 Net interest income $ 142,594 $ 175,865 $ 196,603 Interest rate spread (5) 1.57 % 2.09 % 2.86 % Net interest margin (6) 1.94 % 2.34 % 2.94 % Ratio of interest-earning assets to interest-bearing liabilities 1.15 1.16 1.19 ________________________________________ (1) Loans held-for-sale and non-accruing loans have been included in loans receivable and the effect of such inclusion was not material.
For the Years Ended June 30, 2025 2024 2023 Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost (Dollars in Thousands) Interest-earning assets: Loans receivable (1) $ 5,789,583 $ 262,992 4.54 % $ 5,752,496 $ 256,007 4.45 % $ 5,827,123 $ 233,147 4.00 % Taxable investment securities (2) 1,270,262 53,247 4.19 1,438,200 63,313 4.40 1,532,961 54,855 3.58 Tax-exempt securities (2) 9,791 234 2.39 14,718 336 2.28 30,332 694 2.29 Other interest-earning assets (3) 119,224 8,003 6.71 131,019 9,212 7.03 115,390 5,028 4.36 Total interest-earning assets 7,188,860 324,476 4.51 7,336,433 328,868 4.48 7,505,806 293,724 3.91 Non-interest-earning assets 459,986 541,859 563,131 Total assets $ 7,648,846 $ 7,878,292 $ 8,068,937 Interest-bearing liabilities: Interest-bearing demand $ 2,335,972 $ 66,835 2.86 $ 2,308,893 $ 67,183 2.91 $ 2,349,802 $ 40,650 1.73 Savings 721,115 9,011 1.25 662,981 3,293 0.50 896,651 3,351 0.37 Certificates of deposit 1,902,026 64,412 3.39 1,778,682 51,938 2.92 2,083,864 34,162 1.64 Total interest-bearing deposits 4,959,113 140,258 2.83 4,750,556 122,414 2.58 5,330,317 78,163 1.47 FHLB advances 1,131,662 42,014 3.71 1,458,941 53,948 3.70 1,101,658 37,734 3.43 Other borrowings 149,041 7,261 4.87 184,768 9,912 5.36 57,468 1,962 3.41 Total borrowings 1,280,703 49,275 3.85 1,643,709 63,860 3.89 1,159,126 39,696 3.42 Total interest-bearing liabilities 6,239,816 189,533 3.04 6,394,265 186,274 2.91 6,489,443 117,859 1.82 Non-interest-bearing liabilities (4) 662,028 659,710 704,136 Total liabilities 6,901,844 7,053,975 7,193,579 Stockholders' equity 747,002 824,317 875,358 Total liabilities and stockholders' equity $ 7,648,846 $ 7,878,292 $ 8,068,937 Net interest income $ 134,943 $ 142,594 $ 175,865 Interest rate spread (5) 1.47 % 1.57 % 2.09 % Net interest margin (6) 1.88 % 1.94 % 2.34 % Ratio of interest-earning assets to interest-bearing liabilities 1.15 1.15 1.16 ________________________________________ (1) Loans held-for-sale and non-accruing loans have been included in loans receivable and the effect of such inclusion was not material.
Additional information about our borrowings at June 30, 2024 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 10 to the audited consolidated financial statements. Other Liabilities.
The decrease was primarily driven by a net decrease in FHLB and other borrowings as a result of the increase in brokered CDs, as noted above. Additional information about our borrowings at June 30, 2025 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 10 to the audited consolidated financial statements.
No such expenses were recorded during the year ended June 30, 2024. The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items. Provision for Income Taxes .
The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items. Provision for Income Taxes . Provision for income taxes decreased by $1.0 million to $4.9 million for the year ended June 30, 2025, from $5.9 million for the year ended June 30, 2024.
Net loans receivable decreased by $92.8 million, or 1.6%, to $5.69 billion at June 30, 2024 from $5.78 billion at June 30, 2023.
Net loans receivable increased by $78.9 million, or 1.4%, to $5.77 billion at June 30, 2025 from $5.69 billion at June 30, 2024.
We recognized a non-recurring loss of $974,000 attributable to the write-down of one other real estate owned (“OREO”) property during the quarter ended December 31, 2023, while there were no such losses recorded in the prior period.
The loss in the prior year was primarily the result of the sale of three related nonperforming commercial real estate loans held-for-sale. We recognized a non-recurring loss of $974,000 attributable to the write-down of one other real estate owned (“OREO”) property during the prior year, while there were no such losses recorded in the current year.
Comparison of Operating Results for the Years Ended June 30, 2023 and June 30, 2022 A comparison of our operating results for the years ended June 30, 2023 and June 30, 2022 can be found in our Annual Report on Form 10-K for the year ended June 30, 2023, filed with the SEC on August 25, 2023. 48 Table of Contents Liquidity and Commitments Liquidity, represented by cash and cash equivalents, is a product of operating, investing and financing activities.
Comparison of Operating Results for the Years Ended June 30, 2024 and June 30, 2023 A comparison of our operating results for the years ended June 30, 2024 and June 30, 2023 can be found in our Annual Report on Form 10-K for the year ended June 30, 2024, filed with the SEC on August 23, 2024.
Other comprehensive income during the year ended June 30, 2024 reflected the reclassification of a net realized loss on the sale of securities available for sale out of accumulated other comprehensive loss due to an investment securities repositioning and an increase in the fair value of our available for sale securities, partially offset by a decrease in the fair value of our derivatives portfolio.
The other comprehensive loss during the year ended June 30, 2025 was driven by a decrease in the fair value of our derivatives portfolio, partially offset by an increase in the fair value of our available for sale securities.
We are unable to determine the extent, if any, to which properties securing our loans have appreciated in dollar value due to inflation. Recent Accounting Pronouncements For a discussion of the expected impact of recently issued accounting pronouncements that have yet to be adopted by us, please refer to Note 2 to the audited consolidated financial statements.
Recent Accounting Pronouncements For a discussion of the expected impact of recently issued accounting pronouncements that have yet to be adopted by us, please refer to Note 2 to the audited consolidated financial statements.
The carrying value of our single reporting unit exceeded its respective fair value, resulting in the recognition of a non-cash, pre-tax goodwill impairment of $97.4 million for the year ended June 30, 2024. As a result, the Company’s goodwill decreased from $210.9 million at June 30, 2023 to $113.5 million at June 30, 2024.
The fair value of our single reporting unit exceeded its respective carrying value, resulting in no impairment charge required to be recorded for the year ended June 30, 2025. As a result, the Company’s goodwill of $113.5 million remained unchanged from June 30, 2024.
The net loss also reflected a decrease in net interest income, a decrease in non-interest income and an increase in the provision for credit losses, partially offset by a decrease in non-interest expense, excluding goodwill impairment, and a decrease in income tax expense.
Excluding the $95.3 million non-cash goodwill impairment recorded in the prior year, net income increased $17.4 million, reflecting an increase in non-interest income and decreases in the provision for credit losses and income tax expense, partially offset by a decrease in net interest income and an increase in non-interest expense.
Additional information about the allowance for credit losses at June 30, 2024 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 1 and Note 5 to the audited consolidated financial statements. 43 Table of Contents Other Assets.
Business” of this Annual Report on Form 10-K, as well as in Note 1 and Note 5 to the audited consolidated financial statements. 44 Table of Contents Other Assets.
The decrease in income tax expense was due to lower pre-tax income, partially offset by $5.7 million of tax expense related to the surrender of BOLI policies during the year ended June 30, 2024.
The decrease in income tax expense was primarily driven by the absence of a $5.7 million tax expense related to the surrender of BOLI policies in the prior year period, partially offset by higher pre-tax income in the current year period.
Year Ended June 30, 2024 versus Year Ended June 30, 2023 Year Ended June 30, 2023 versus Year Ended June 30, 2022 Increase (Decrease) Due to Increase (Decrease) Due to Volume Rate Net Volume Rate Net (In Thousands) Interest and dividend income Loans receivable $ (3,024) $ 25,884 $ 22,860 $ 36,040 $ 6,587 $ 42,627 Taxable investment securities (3,545) 12,003 8,458 (1,901) 24,010 22,109 Tax-exempt securities (355) (3) (358) (590) 11 (579) Other interest-earning assets 758 3,426 4,184 876 2,419 3,295 Total interest-earning assets (6,166) 41,310 35,144 34,425 33,027 67,452 Interest expense: Interest-bearing demand (720) 27,253 26,533 802 34,725 35,527 Savings (1,017) 959 (58) (243) 2,404 2,161 Certificates of deposit (5,620) 23,396 17,776 2,320 22,947 25,267 Borrowings 18,186 5,978 24,164 10,324 14,911 25,235 Total interest-bearing liabilities 10,829 57,586 68,415 13,203 74,987 88,190 Change in net interest income $ (16,995) $ (16,276) $ (33,271) $ 21,222 $ (41,960) $ (20,738) Provision for Credit Losses .
Year Ended June 30, 2025 versus Year Ended June 30, 2024 Year Ended June 30, 2024 versus Year Ended June 30, 2023 Increase (Decrease) Due to Increase (Decrease) Due to Volume Rate Net Volume Rate Net (In Thousands) Interest and dividend income Loans receivable $ 1,688 $ 5,297 $ 6,985 $ (3,024) $ 25,884 $ 22,860 Taxable investment securities (7,145) (2,921) (10,066) (3,545) 12,003 8,458 Tax-exempt securities (117) 15 (102) (355) (3) (358) Other interest-earning assets (803) (406) (1,209) 758 3,426 4,184 Total interest-earning assets (6,377) 1,985 (4,392) (6,166) 41,310 35,144 Interest expense: Interest-bearing demand 795 (1,143) (348) (720) 27,253 26,533 Savings 316 5,402 5,718 (1,017) 959 (58) Certificates of deposit 3,756 8,718 12,474 (5,620) 23,396 17,776 Borrowings (13,936) (649) (14,585) 18,186 5,978 24,164 Total interest-bearing liabilities (9,069) 12,328 3,259 10,829 57,586 68,415 Change in net interest income $ 2,692 $ (10,343) $ (7,651) $ (16,995) $ (16,276) $ (33,271) Provision for Credit Losses .
The decrease was largely attributable to a provision for credit losses of $6.2 million, primarily driven by an increase in the provision for individually evaluated loans. Partially offsetting the provision for credit losses were net charge-offs of $10.0 million, of which $3.4 million had been individually reserved for within the ACL at June 30, 2023.
The increase was largely attributable to a provision for credit losses of $2.4 million, primarily driven by an increase in the provision for individually evaluated loans, partially offset by net charge-offs of $1.1 million. Additional information about the allowance for credit losses at June 30, 2025 is presented under “Item 1.
Total deposits decreased by $471.1 million, or 8.4%, to $5.16 billion at June 30, 2024 from $5.63 billion at June 30, 2023. Included in total deposits are brokered and listing service time deposits of $408.2 million and $640.5 million at June 30, 2024 and 2023, respectively.
Total deposits increased by $517.1 million, or 10.0%, to $5.68 billion at June 30, 2025 from $5.16 billion at June 30, 2024. Included in total deposits are brokered certificates of deposits (“CDs”) of $757.7 million and $408.2 million at June 30, 2025 and 2024, respectively.
The quantitative component of our ACL, which is largely based on the national unemployment rate forecast, increased $4.0 million, which largely resulted from slower prepayment speeds. The qualitative component of our ACL, which is largely based on management’s judgment of qualitative loss factors, decreased $5.3 million.
The $1.3 million increase in our ACL was largely attributable to an increase in reserves for individually evaluated loans. The quantitative component of our ACL, which is largely based on the national unemployment rate forecast, decreased $1.2 million. The qualitative component of our ACL, which is largely based on management’s judgment of qualitative loss factors, increased $0.9 million.
Due to the continued impact of higher interest rates and a sustained decline in the banking industry share prices, including our own, we performed a quantitative goodwill impairment during the fourth quarter of the year ended June 30, 2024. The quantitative goodwill impairment test compares the estimated fair value of the reporting unit with its carrying amount, including goodwill.
To test goodwill for impairment we elected to perform a goodwill impairment assessment during the fourth quarter of the year ended June 30, 2025. The quantitative goodwill impairment test compares the estimated fair value of the reporting unit with its carrying amount, including goodwill.
The decrease in stockholders’ equity during the year ended June 30, 2024 reflected a net loss of $86.7 million, primarily driven by a non-cash, after-tax, goodwill impairment of $95.3 million, dividends totaling $27.6 million, and share repurchases totaling $11.2 million, partially offset by other comprehensive income, net of tax, of $6.3 million.
Stockholders’ equity decreased by $7.6 million to $746.0 million at June 30, 2025 from $753.6 million at June 30, 2024. The decrease in stockholders’ equity during the year ended June 30, 2025 largely reflected $27.7 million in cash dividends and an $8.8 million after-tax other comprehensive loss, partially offset by net income of $26.1 million.
During the year ended June 30, 2024, we sold $79.1 million of residential mortgage loans, resulting in a net gain on sale of $602,000, and $10.8 million of commercial mortgage loans, resulting in a net loss on sale of $884,000. 42 Table of Contents Net Loans Receivable.
Loans held-for-sale consisted of residential mortgage loans of $5.9 million at June 30, 2025 as compared to residential mortgage loans of $6.0 million at June 30, 2024. During the year ended June 30, 2025, we sold $112.1 million of residential mortgage loans, resulting in a net gain on sale of $806,000. 43 Table of Contents Net Loans Receivable.
The decrease in deposit balances reflected a $459.4 million decrease in interest-bearing deposits coupled with a $11.6 million decrease in non-interest-bearing deposits. Borrowings from the FHLB and other sources are generally available to supplement our liquidity position or to replace maturing deposits. As of June 30, 2024, our outstanding balance of FHLB advances, excluding fair value adjustments, totaled $1.54 billion.
The increase in deposit balances reflected a $533.4 million increase in interest-bearing deposits, partially offset by a $16.3 million decrease in non-interest-bearing deposits. Borrowings from the FHLB and other sources are generally available to supplement our liquidity position or to replace maturing deposits.
Net loss for the year ended June 30, 2024 was $86.7 million, or $1.39 per diluted share, a decrease of $127.5 million from net income of $40.8 million, or $0.63 per diluted share for the year ended June 30, 2023. The net loss was primarily attributable to a non-cash, after tax, goodwill impairment charge of $95.3 million.
Net income for the year ended June 30, 2025 was $26.1 million, or $0.42 per diluted share, an increase of $112.7 million from a net loss of $86.7 million, or $1.39 per diluted share, for the year ended June 30, 2024.
Detail regarding the change in the loan portfolio is presented below: June 30, 2024 June 30, 2023 Increase/ (Decrease) (In Thousands) Commercial loans: Multi-family mortgage $ 2,645,851 $ 2,761,775 $ (115,924) Nonresidential mortgage 948,075 968,574 (20,499) Commercial business 142,747 146,861 (4,114) Construction 209,237 226,609 (17,372) Total commercial loans 3,945,910 4,103,819 (157,909) One- to four-family residential mortgage 1,756,051 1,700,559 55,492 Consumer loans: Home equity loans 44,104 43,549 555 Other consumer 2,685 2,549 136 Total consumer loans 46,789 46,098 691 Total loans 5,748,750 5,850,476 (101,726) Unaccreted yield adjustments (15,963) (21,055) 5,092 Allowance for credit losses (44,939) (48,734) 3,795 Net loans receivable $ 5,687,848 $ 5,780,687 $ (92,839) Commercial loan origination volume for the year ended June 30, 2024 totaled $287.8 million, comprised of $103.7 million of commercial mortgage loan originations, $98.5 million of commercial business loan originations and construction loan disbursements of $85.6 million.
Detail regarding the change in the loan portfolio is presented below: June 30, 2025 June 30, 2024 Increase/ (Decrease) (In Thousands) Commercial loans: Multi-family mortgage $ 2,709,654 $ 2,645,851 $ 63,803 Nonresidential mortgage 986,556 948,075 38,481 Commercial business 138,755 142,747 (3,992) Construction 177,713 209,237 (31,524) Total commercial loans 4,012,678 3,945,910 66,768 One- to four-family residential mortgage 1,748,591 1,756,051 (7,460) Consumer loans: Home equity loans 50,737 44,104 6,633 Other consumer 2,533 2,685 (152) Total consumer loans 53,270 46,789 6,481 Total loans 5,814,539 5,748,750 65,789 Unaccreted yield adjustments (1,602) (15,963) 14,361 Allowance for credit losses (46,191) (44,939) (1,252) Net loans receivable $ 5,766,746 $ 5,687,848 $ 78,898 Commercial loan origination volume for the year ended June 30, 2025 totaled $477.3 million, consisted of $260.3 million of commercial mortgage loan originations, $118.1 million of commercial business loan originations and $98.9 million of construction loan disbursements.
Total assets decreased by $381.4 million, or 4.7%, to $7.68 billion at June 30, 2024 from $8.06 billion at June 30, 2023. The decrease primarily reflected decreases in investment securities, net loans receivable and goodwill. Investment Securities. Investment securities available for sale decreased by $154.9 million to $1.07 billion at June 30, 2024 from $1.23 billion at June 30, 2023.
Total assets increased by $57.0 million, or 0.7%, to $7.74 billion at June 30, 2025 from $7.68 billion at June 30, 2024. The increase primarily reflected increases in cash and cash equivalents and net loans receivable, partially offset by decreases in investment securities and other assets. Investment Securities.
Non-Interest Income . Non-interest income decreased by $4.7 million to $2.0 million for the year ended June 30, 2024. Loss on sale and call of securities was $18.1 million during the year ended June 30, 2024 compared to a loss of $15.2 million recorded during the earlier comparative period.
There were no gains on sale and call of securities during the year ended June 30, 2025 compared to a loss of $18.1 million recorded in the prior year.
The following table sets forth the distribution of, and changes in, deposits, by type, at the dates indicated: June 30, 2024 June 30, 2023 Increase/ (Decrease) (In Thousands) Non-interest-bearing deposits $ 598,366 $ 609,999 $ (11,633) Interest-bearing deposits: Interest-bearing demand 2,308,915 2,252,912 56,003 Savings 643,481 748,721 (105,240) Certificates of deposit (retail) 1,199,127 1,377,028 (177,901) Certificates of deposit (brokered and listing service) 408,234 640,523 (232,289) Interest-bearing deposits 4,559,757 5,019,184 (459,427) Total deposits $ 5,158,123 $ 5,629,183 $ (471,060) Uninsured deposits totaled $1.77 billion as of June 30, 2024, unchanged from June 30, 2023.
The following table sets forth the distribution of, and changes in, deposits, by type, at the dates indicated: June 30, 2025 June 30, 2024 Increase/ (Decrease) (In Thousands) Non-interest-bearing deposits $ 582,045 $ 598,366 $ (16,321) Interest-bearing deposits: Interest-bearing demand 2,362,222 2,308,915 53,307 Savings 754,376 643,481 110,895 Certificates of deposit (retail) 1,218,920 1,199,127 19,793 Certificates of deposit (brokered) 757,654 408,234 349,420 Interest-bearing deposits 5,093,172 4,559,757 533,415 Total deposits $ 5,675,217 $ 5,158,123 $ 517,094 Uninsured deposits totaled $1.99 billion as of June 30, 2025, compared to $1.77 billion as of June 30, 2024.
The increase was primarily driven by a non-recurring contract renewal bonus of $750,000 recorded in the current period related to a licensing agreement with a third-party vendor. The remaining changes in the other components of non-interest income between comparative periods generally reflected normal operating fluctuations within those line items. Non-Interest Expense .
The increase primarily reflected improved income as a result of the BOLI restructure initiated in December 2023, and the absence of non-recurring exchange charges related to the restructure recorded in the prior year. 48 Table of Contents The remaining changes in the other components of non-interest income between comparative periods generally reflected normal operating fluctuations within those line items.
The decrease between the comparative periods resulted from an increase of $68.4 million in interest expense, partially offset by an increase of $35.1 million in interest income.
Net interest income decreased by $7.7 million to $134.9 million for the year ended June 30, 2025. The decrease between the comparative periods resulted from a decrease of $4.4 million in interest income and an increase of $3.3 million in interest expense.
The provision for credit losses increased by $3.7 million to a provision for credit losses of $6.2 million for the year ended June 30, 2024, compared to provision for credit losses of $2.5 million for the year ended June 30, 2023.
The provision for credit losses decreased by $3.9 million to $2.4 million for the year ended June 30, 2025, compared to $6.2 million for the year ended June 30, 2024. The provision for credit losses for the year ended June 30, 2025 was largely attributable to charge-offs, loan growth, and increased reserves on individually evaluated loans.
This OREO asset was subsequently sold during the quarter ended March 31, 2024. 47 Table of Contents Income from bank owned life insurance (“BOLI”) increased $431,000 to $9.1 million for the year ended June 30, 2024.
Income from bank owned life insurance (“BOLI”) increased $1.6 million to $10.7 million for the year ended June 30, 2025.
The current year loss was the result of our securities portfolio repositioning that involved the sale of $122.2 million of available for sale securities in December 2023. Proceeds of the sale were utilized to retire higher-cost wholesale funding and to reinvest in loans yielding approximately 7.0%.
The loss in the prior year was due to the repositioning of our investment securities portfolio that involved the sale of $122.2 million of available for sale debt securities in December 2023. Gain on sale of loans was $806,000 for the year ended June 30, 2025 compared to a loss of $282,000 during the prior year.
The following table presents information regarding the Bank’s regulatory capital levels at June 30, 2024: June 30, 2024 Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 688,597 14.42 % $ 382,034 8.00 % $ 477,542 10.00 % Tier 1 capital (to risk-weighted assets) 651,620 13.65 % 286,525 6.00 % 382,034 8.00 % Common equity tier 1 capital (to risk-weighted assets) 651,620 13.65 % 214,894 4.50 % 310,402 6.50 % Tier 1 capital (to adjusted total assets) 651,620 8.44 % 308,656 4.00 % 385,820 5.00 % The following table presents information regarding the consolidated Company’s regulatory capital levels at June 30, 2024: June 30, 2024 Actual For Capital Adequacy Purposes Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 743,741 15.57 % $ 382,247 8.00 % Tier 1 capital (to risk-weighted assets) 706,764 14.79 % 286,685 6.00 % Common equity tier 1 capital (to risk-weighted assets) 706,764 14.79 % 215,014 4.50 % Tier 1 capital (to adjusted total assets) 706,764 9.15 % 309,031 4.00 % For additional information regarding regulatory capital at June 30, 2024, see Note 14 to the audited consolidated financial statements. 50 Table of Contents Impact of Inflation The financial statements included in this document have been prepared in accordance with accounting principles generally accepted in the United States of America.
The following table presents information regarding the Bank’s regulatory capital levels at June 30, 2025: June 30, 2025 Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 704,969 14.49 % $ 389,184 8.00 % $ 486,481 10.00 % Tier 1 capital (to risk-weighted assets) 662,232 13.61 % 291,888 6.00 % 389,184 8.00 % Common equity tier 1 capital (to risk-weighted assets) 662,232 13.61 % 218,916 4.50 % 316,212 6.50 % Tier 1 capital (to adjusted total assets) 662,232 8.68 % 305,162 4.00 % 381,453 5.00 % The following table presents information regarding the consolidated Company’s regulatory capital levels at June 30, 2025: June 30, 2025 Actual For Capital Adequacy Purposes Amount Ratio Amount Ratio (Dollars in Thousands) Total capital (to risk-weighted assets) $ 748,323 15.37 % $ 389,434 8.00 % Tier 1 capital (to risk-weighted assets) 705,586 14.49 % 292,076 6.00 % Common equity tier 1 capital (to risk-weighted assets) 705,586 14.49 % 219,057 4.50 % Tier 1 capital (to adjusted total assets) 705,586 9.23 % 305,661 4.00 % For additional information regarding regulatory capital at June 30, 2025, see Note 14 to the audited consolidated financial statements.
This decrease was largely the result of principal repayments of $133.0 million and sales of $122.2 million, partially offset by purchases of $74.0 million and a $25.5 million increase in the fair value of the portfolio to a net unrealized loss of $130.7 million.
Investment securities available for sale decreased by $59.9 million to $1.01 billion at June 30, 2025 from $1.07 billion at June 30, 2024. This decrease was largely the result of principal repayments of $183.8 million, partially offset by purchases of $104.9 million and a $18.5 million increase in the fair value of the portfolio.
The decrease in other assets largely reflected the recognition of a non-cash, pre-tax goodwill impairment of $97.4 million and a $13.0 million decrease in OREO. The decrease in OREO was a result of the sale of our sole OREO asset in January 2024. The remaining change generally reflected normal operating fluctuations within these line items. Deposits.
The decrease in other assets largely reflected a decrease in the market value of interest rate derivatives and a decrease in FHLB stock, partially offset by an increase in BOLI. The remaining change generally reflected normal operating fluctuations within these line items. Deposits.
Provision for income taxes decreased by $5.7 million to $5.9 million for the year ended June 30, 2024, from $11.6 million for the year ended June 30, 2023.
Non-interest income increased from a $1.9 million loss for the year ended June 30, 2024 to income of $19.1 million for the year ended June 30, 2025, an improvement of $21.0 million.
Removed
The $3.8 million decrease in our ACL was largely attributable to a reduction in reserves for individually evaluated loans, primarily driven by the charge-off on three related non-performing commercial real estate loans transferred to held-for-sale and sold during the year ended June 30, 2024.
Added
The increase was driven by a reallocation from FHLB advances into brokered CDs and growth in deposits from our branch network and digital channels.
Removed
In assessing impairment, we have the option to perform a qualitative analysis to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of our single reporting unit is less than its carrying amount.
Added
Book value per share decreased by $0.15 to $11.55 at June 30, 2025 while tangible book value per share decreased by $0.13 to $9.77 at June 30, 2025.
Removed
Loans held-for-sale consisted of residential mortgage loans of $6.0 million at June 30, 2024 as compared to residential mortgage loans of $9.6 million at June 30, 2023.
Added
These decreases were driven by the decrease in stockholders’ equity, as described above. 45 Table of Contents Comparison of Operating Results for the Years Ended June 30, 2025 and June 30, 2024 Net Income (Loss) .
Removed
The increase was primarily driven by a net increase in advances from the FHLB and the Federal Reserve Bank of New York (“FRBNY”). FRBNY advances consisted of $100.0 million in borrowings under the Bank Term Funding Program (“BTFP”) which included favorable terms and conditions as compared to FHLB advances and brokered deposits.
Added
Net income for the prior year period also included a $12.9 million after-tax net loss on the sale of securities that resulted from the repositioning of our investment securities portfolio in December 2023 and an after-tax net loss of $6.7 million from the previously disclosed BOLI restructure. Net Interest Income .
Removed
Stockholders’ equity decreased by $115.7 million to $753.6 million at June 30, 2024 from $869.3 million at June 30, 2023.
Added
Excluding the goodwill impairment, non-interest expense increased $2.9 million compared to the prior year period. Salaries and employee benefits expense increased by $1.7 million to $70.9 million for the year ended June 30, 2025, primarily driven by an increase in salary and benefits expense attributable to annual merit increases and higher incentive compensation.
Removed
Book value per share decreased by $1.50 to $11.70 at June 30, 2024 while tangible book value per share decreased by $0.06 to $9.90 at June 30, 2024. 44 Table of Contents During the year ended June 30, 2024, we repurchased 1,504,747 shares of common stock at a cost of $11.2 million, or $7.40 per share.
Added
Net occupancy expense of premises increased by $491,000 to $11.5 million for the year ended June 30, 2025. This increase was primarily driven by higher snow removal expenses due to abnormally harsh winter conditions. Equipment and systems expense increased $480,000 to $15.7 million for the year ended June 30, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+2 added−0 removed13 unchanged
Biggest changeThe model requires that interest rates remain positive for all points along the yield curve for each rate scenario which may preclude the modeling of certain falling rate scenarios during periods of lower market interest rates. 51 Table of Contents The following tables present the results of our internal EVE and NII analyses as of June 30, 2024 and 2023, respectively: June 30, 2024 1 to 12 Months 13 to 24 Months Change in Interest Rates $ Amount of EVE % Change in EVE $ Amount of NII % Change in NII $ Amount of NII % Change in NII (Dollars in Thousands) +300 bps 331,842 (41.07) % 127,382 (8.51) % 135,753 (10.66) % +200 bps 400,548 (28.87) % 131,003 (5.91) % 140,351 (7.64) % +100 bps 483,724 (14.10) % 135,289 (2.83) % 146,594 (3.53) % 0 bps 563,098 — 139,236 — 151,955 — -100 bps 640,024 13.66 % 144,991 4.13 % 157,821 3.86 % -200 bps 693,495 23.16 % 148,189 6.43 % 159,928 5.25 % -300 bps 767,451 36.29 % 150,478 8.07 % 160,093 5.36 % June 30, 2023 1 to 12 Months 13 to 24 Months Change in Interest Rates $ Amount of EVE % Change in EVE $ Amount of NII % Change in NII $ Amount of NII % Change in NII (Dollars in Thousands) +300 bps 507,998 (32.36) % 154,552 (5.26) % 168,366 (3.87) % +200 bps 571,129 (23.95) % 156,274 (4.20) % 167,683 (4.26) % +100 bps 673,314 (10.35) % 160,344 (1.71) % 173,170 (1.13) % 0 bps 751,040 — 163,132 — 175,143 — -100 bps 799,675 6.48 % 163,455 0.20 % 173,319 (1.04) % -200 bps 814,293 8.42 % 161,284 (1.13) % 166,473 (4.95) % -300 bps 849,208 13.07 % 158,526 (2.82) % 156,507 (10.64) % There are numerous internal and external factors that may contribute to changes in our EVE and its sensitivity.
Biggest changeThe following tables present the results of our internal EVE and NII analyses as of June 30, 2025 and 2024, respectively: June 30, 2025 1 to 12 Months 13 to 24 Months Change in Interest Rates $ Amount of EVE % Change in EVE $ Amount of NII % Change in NII $ Amount of NII % Change in NII (Dollars in Thousands) +300 bps 404,295 (37.02) % 147,989 (6.79) % 161,747 (8.17) % +200 bps 475,744 (25.89) % 150,539 (5.18) % 165,520 (6.03) % +100 bps 555,065 (13.54) % 153,195 (3.51) % 169,510 (3.77) % 0 bps 641,985 — 158,762 — 176,142 — -100 bps 728,863 13.53 % 162,406 2.30 % 181,671 3.14 % -200 bps 785,464 22.35 % 165,502 4.25 % 184,695 4.86 % -300 bps 852,184 32.74 % 168,238 5.97 % 185,248 5.17 % June 30, 2024 1 to 12 Months 13 to 24 Months Change in Interest Rates $ Amount of EVE % Change in EVE $ Amount of NII % Change in NII $ Amount of NII % Change in NII (Dollars in Thousands) +300 bps 331,842 (41.07) % 127,382 (8.51) % 135,753 (10.66) % +200 bps 400,548 (28.87) % 131,003 (5.91) % 140,351 (7.64) % +100 bps 483,724 (14.10) % 135,289 (2.83) % 146,594 (3.53) % 0 bps 563,098 — 139,236 — 151,955 — -100 bps 640,024 13.66 % 144,991 4.13 % 157,821 3.86 % -200 bps 693,495 23.16 % 148,189 6.43 % 159,928 5.25 % -300 bps 767,451 36.29 % 150,478 8.07 % 160,093 5.36 % There are numerous internal and external factors that may contribute to changes in our EVE and its sensitivity.
EVE attempts to quantify our economic value using a discounted cash flow methodology. The degree to which our EVE changes for any hypothetical interest rate scenario from its base case measurement is a reflection of an institution’s sensitivity to interest rate risk.
EVE attempts to quantify our economic value using a discounted cash flow methodology. The degree to which our EVE changes for any hypothetical interest rate scenario from its base case measurement is a reflection of our sensitivity to interest rate risk.
Changes to certain external factors, most notably changes in the level of market interest rates and overall shape of the yield curve, can also alter the projected cash flows of our interest-earning assets and interest-costing liabilities and the associated present values thereof.
Changes to certain external factors, most notably changes in the level of market interest rates and overall shape of the yield curve, can also 52 Table of Contents alter the projected cash flows of our interest-earning assets and interest-costing liabilities and the associated present values thereof.
The program is overseen by the Board of Directors through its Interest Rate Risk Management Committee, which has assigned the responsibility for the operational aspects of the ALM program to our Asset/Liability Management Committee (“ALCO”), which is comprised of various members of the senior and executive management team.
The program is overseen by the Board of Directors through its Interest Rate Risk Management Committee, which has assigned the responsibility for the operational aspects of the ALM program to our Asset/Liability Management Committee (“ALCO”), which is comprised of various members of the senior and executive management team. 51 Table of Contents The quantitative analysis that we conduct measures interest rate risk from both a capital and earnings perspective.
The quantitative analysis that we conduct measures interest rate risk from both a capital and earnings perspective. With regard to earnings, movements in interest rates and the shape of the yield curve significantly influence the amount of net interest income (“NII”) that we recognize.
With regard to earnings, movements in interest rates and the shape of the yield curve significantly influence the amount of net interest income (“NII”) that we recognize.
Additionally, an increase in credit risk may result as the ability of borrowers to service their debt may decrease in the event of an interest rate increase.
Additionally, an increase in credit risk may result as the ability of borrowers to service their debt may decrease in the event of an interest rate increase. Item 8. Financial Statements and Supplementary Data The Company’s consolidated financial statements are contained in this Annual Report on Form 10-K immediately following Item 16. Item 9.
Added
The model requires that interest rates remain positive for all points along the yield curve for each rate scenario which may preclude the modeling of certain falling rate scenarios during periods of lower market interest rates.
Added
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.

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