SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


☒x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ~~Yes~~x ☒ No ☐o

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

Large accelerated filer

☒x

Accelerated filer

☐o

Non-accelerated filer

☐o

Smaller reporting company

☐o

Emerging growth company

☐o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~April 29,~~October 31, 2022.

$0.01 par value common stock — ~~70,421,270~~67,567,771 shares outstanding

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In Thousands, Except Share and Per Share Data)

March 31,

June 30,

2022

2021

(Unaudited)

Assets

Cash and amounts due from depository institutions
$
22,864

$
21,463

Interest-bearing deposits in other banks

39,515

46,392

Cash and cash equivalents

62,379

67,855

Investment securities available for sale (amortized cost $1,590,074 and $1,666,853,
  respectively), net of allowance for credit losses of $0 at March 31, 2022 and June 30, 2021

1,526,086

1,676,864

Investment securities held to maturity (fair value $117,017 and $39,610, respectively), net of
  allowance for credit losses of $0 at March 31, 2022 and June 30, 2021

121,853

38,138

Loans held-for-sale

2,822

16,492

Loans receivable

5,003,201

4,851,394

Less: allowance for credit losses on loans

(43,860
)

(58,165
)
Net loans receivable

4,959,341

4,793,229

Premises and equipment

53,727

56,338

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

30,997

36,615

Accrued interest receivable

19,517

19,362

Goodwill

210,895

210,895

Core deposit intangibles

3,166

3,705

Bank owned life insurance

287,644

283,310

Deferred income tax assets, net

34,349

29,323

Other real estate owned

401

178

Other assets

76,714

51,431

Total Assets
$
7,389,891

$
7,283,735

Liabilities and Stockholders' Equity

Liabilities

Deposits:

Non-interest-bearing
$
621,954

$
593,718

Interest-bearing

4,906,708

4,891,588

Total deposits

5,528,662

5,485,306

Borrowings

851,220

685,876

Advance payments by borrowers for taxes

16,979

15,752

Other liabilities

37,861

53,857

Total Liabilities

6,434,722

6,240,791

Stockholders' Equity

Preferred stock, $0.01 par value, 100,000,000 shares authorized;
  NaN issued and outstanding

0

0

Common stock, $0.01 par value; 800,000,000 shares authorized;
  71,424,469 shares and 78,964,859 shares issued and outstanding, respectively

714

790

Paid-in capital

561,176

654,396

Retained earnings

441,522

408,367

Unearned employee stock ownership plan shares;
  2,609,069 shares and 2,759,594 shares, respectively

(25,294
)

(26,753
)
Accumulated other comprehensive (loss) income

(22,949
)

6,144

Total Stockholders' Equity

955,169

1,042,944

Total Liabilities and Stockholders' Equity
$
7,389,891

$
7,283,735


	September 30, 2022		June 30, 2022
	(Unaudited)
Assets
Cash and amounts due from depository institutions	$	22,849	$	26,094
Interest-bearing deposits in other banks	73,227		75,521
Cash and cash equivalents	96,076		101,615
Investment securities available for sale (amortized cost of $1,430,572 and $1,462,124, respectively)	1,263,176		1,344,093
Investment securities held to maturity (fair value of $99,548 and $108,118, respectively)	115,943		118,291
Loans held-for-sale	12,936		28,874
Loans receivable	5,656,370		5,417,845
Less: allowance for credit losses on loans	(47,613)		(47,058)
Net loans receivable	5,608,757		5,370,787
Premises and equipment	52,642		53,281
Federal Home Loan Bank (“FHLB”) of New York stock	44,957		47,144
Accrued interest receivable	23,817		20,466
Goodwill	210,895		210,895
Core deposit intangibles	2,876		3,020
Bank owned life insurance	289,690		289,177
Deferred income tax assets, net	54,278		49,350
Other real estate owned	178		178
Other assets	113,369		82,712
Total Assets	$	7,889,590	$	7,719,883

Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest-bearing	$	683,406	$	653,899
Interest-bearing	5,424,872		5,208,357
Total deposits	6,108,278		5,862,256
Borrowings	851,454		901,337
Advance payments by borrowers for taxes	16,555		16,746
Other liabilities	38,329		45,544
Total Liabilities	7,014,616		6,825,883

Stockholders' Equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized; none issued and outstanding	—		—
Common stock, $0.01 par value; 800,000,000 shares authorized; 67,937,671 shares and 68,666,323 shares issued and outstanding, respectively	680		687
Paid-in capital	520,245		528,396
Retained earnings	454,710		445,451
Unearned employee stock ownership plan shares; 2,508,720 shares and 2,558,895 shares, respectively	(24,321)		(24,807)
Accumulated other comprehensive loss	(76,340)		(55,727)
Total Stockholders' Equity	874,974		894,000
Total Liabilities and Stockholders' Equity	$	7,889,590	$	7,719,883

See notes to unaudited consolidated financial statements.

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Data)

(Unaudited)

Three Months Ended

Nine Months Ended

March 31,

March 31,

2022

2021

2022

2021

Interest Income

Loans

$
45,846

$
50,159

$
141,651

$
153,776

Taxable investment securities

8,024

7,891

23,831

22,934

Tax-exempt investment securities

316

410

976

1,297

Other interest-earning assets

415

705

1,261

2,406

Total Interest Income

54,601

59,165

167,719

180,413

Interest Expense

Deposits

3,565

6,670

11,293

26,379

Borrowings

3,309

4,012

10,422

14,865

Total Interest Expense

6,874

10,682

21,715

41,244

Net Interest Income

47,727

48,483

146,004

139,169

(Reversal of) provision for credit losses

(3,920
)

1,126

(11,740
)

3,820

Net Interest Income after (Reversal of)
Provision for Credit Losses

51,647

47,357

157,744

135,349

Non-Interest Income

Fees and service charges

617

473

1,922

1,474

Gain on sale and call of securities

3

18

4

454

Gain on sale of loans

376

943

2,352

5,211

Gain on sale of other real estate owned

14

0

14

0

Income from bank owned life insurance

1,511

1,530

4,634

4,722

Electronic banking fees and charges

432

456

1,260

1,265

Bargain purchase gain

0

0

0

3,053

Other income

238

1,194

938

1,351

Total Non-Interest Income

3,191

4,614

11,124

17,530

Non-Interest Expense

Salaries and employee benefits

19,184

16,965

55,897

51,023

Net occupancy expense of premises

3,223

3,433

10,926

9,675

Equipment and systems

3,822

3,823

11,370

11,295

Advertising and marketing

516

567

1,356

1,580

Federal deposit insurance premium

480

488

1,693

1,450

Directors' compensation

340

748

1,792

2,244

Merger-related expenses

0

0

0

4,349

Debt extinguishment expenses

0

0

0

796

Other expense

3,058

3,792

9,062

11,487

Total Non-Interest Expense

30,623

29,816

92,096

93,899

Income before Income Taxes

24,215

22,155

76,772

58,980

Income tax expense

6,522

5,732

20,595

14,230

Net Income

$
17,693

$
16,423

$
56,177

$
44,750

Net Income per Common Share (EPS)

Basic

$
0.25

$
0.20

$
0.78

$
0.53

Diluted

$
0.25

$
0.20

$
0.78

$
0.53

Weighted Average Number of Common Shares
Outstanding

Basic

69,790

80,673

72,130

83,958

Diluted

69,817

80,690

72,154

83,961

See notes to unaudited consolidated financial statements.

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In Thousands, Unaudited)

Three Months Ended

Nine Months Ended

March 31,

March 31,

2022

2021

2022

2021

Net Income
$
17,693

$
16,423

$
56,177

$
44,750

Other Comprehensive (Loss) Income, net of tax:

Net unrealized loss on securities available for sale

(41,922
)

(15,671
)

(52,354
)

(14,379
)
Net realized gain on sale and call of securities
available for sale

(2
)

(13
)

(3
)

(319
)
Fair value adjustments on derivatives

17,387

10,574

23,227

14,750

Benefit plan adjustments

14

14

37

48

Total Other Comprehensive (Loss) Income

(24,523
)

(5,096
)

(29,093
)

100

Total Comprehensive (Loss) Income
$
(6,830
)

$
11,327

$
27,084

$
44,850


	Three Months Ended September 30,
	2022		2021
Net Income	$	16,535	$	19,715
Other Comprehensive (Loss) Income, net of tax:
Net unrealized loss on securities available for sale	(35,179)		(4,981)
Net realized gain on sale and call of securities available for sale	—		(1)
Fair value adjustments on derivatives	14,590		1,164
Benefit plan adjustments	(24)		10
Total Other Comprehensive Loss	(20,613)		(3,808)
Total Comprehensive (Loss) Income	$	(4,078)	$	15,907

See notes to unaudited consolidated financial statements.

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In Thousands, Except Per Share Data, Unaudited)

Common Stock

Paid-In

Retained

Unearned
ESOP

Accumulated
Other
Comprehensive

Shares

Amount

Capital

Earnings

Shares

Income

Total

Balance - December 31, 2020

84,938

$
849

$
724,389

$
388,376

$
(27,726
)

$
6,453

$
1,092,341

Net income

-

-

-

16,423

-

-

16,423

Other comprehensive loss, net
  of income tax

-

-

-

-

-

(5,096
)

(5,096
)
ESOP shares committed to be
  released (50 shares)

-

-

87

-

487

-

574

Stock option exercise

41

-

373

-

-

-

373

Share repurchases

(3,026
)

(29
)

(34,834
)

-

-

-

(34,863
)
Stock-based compensation expense

-

-

1,379

-

-

-

1,379

Cancellation of shares issued for
  restricted stock awards

(10
)

-

(114
)

-

-

-

(114
)
Cash dividends declared
  ($0.09 per common share)

-

-

-

(7,205
)

-

-

(7,205
)
Balance - March 31, 2021

81,943

$
820

$
691,280

$
397,594

$
(27,239
)

$
1,357

$
1,063,812

Common Stock

Paid-In

Retained

Unearned
ESOP

Accumulated
Other
Comprehensive

Shares

Amount

Capital

Earnings

Shares

Income

Total

Balance - June 30, 2020

83,663

$
837

$
722,871

$
387,911

$
(28,699
)

$
1,257

$
1,084,177

Cumulative effect of change in
accounting principle - Topic 326

-

-

-

(14,239
)

-

-

(14,239
)
Balance - July 1, 2020 as
adjusted for change in
accounting principle

83,663

837

722,871

373,672

(28,699
)

1,257

1,069,938

Net income

-

-

-

44,750

-

-

44,750

Other comprehensive income, net
  of income tax

-

-

-

-

-

100

100

ESOP shares committed to be
  released (150 shares)

-

-

(25
)

-

1,460

-

1,435

Stock option exercise

41

-

373

-

-

-

373

Stock repurchases

(7,535
)

(74
)

(80,493
)

-

-

-

(80,567
)
Stock-based compensation expense

-

-

4,281

-

-

-

4,281

Cancellation of shares issued for
  restricted stock awards

(80
)

(1
)

(802
)

-

-

-

(803
)
Shares issued in conjunction with
  the acquisition of MSB
  Financial Corp.

5,854

58

45,075

-

-

-

45,133

Cash dividends declared
  ($0.25 per common share)

-

-

-

(20,828
)

-

-

(20,828
)
Balance - March 31, 2021

81,943

$
820

$
691,280

$
397,594

$
(27,239
)

$
1,357

$
1,063,812


	Common Stock			Paid-In Capital		Retained Earnings		Unearned ESOP Shares		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance - June 30, 2022	68,666	$	687	$	528,396	$	445,451	$	(24,807)	$	(55,727)	$	894,000

Net income	—	—		—		16,535		—		—		16,535
Other comprehensive loss, net of income tax	—	—		—		—		—		(20,613)		(20,613)
ESOP shares committed to be released (50 shares)	—	—		90		—		486		—		576
Stock repurchases	(760)	(8)		(8,685)		—		—		—		(8,693)
Issuance of stock under stock benefit plans	61	1		(1)		—		—		—		—
Stock-based compensation expense	—	—		786		—		—		—		786
Cancellation of shares issued for restricted stock awards	(29)	—		(341)		—		—		—		(341)
Cash dividends declared ($0.11 per common share)	—	—		—		(7,276)		—		—		(7,276)
Balance - September 30, 2022	67,938	$	680	$	520,245	$	454,710	$	(24,321)	$	(76,340)	$	874,974

See notes to unaudited consolidated financial statements.

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~CHANGES IN STOCKHOLDERS’ EQUITY~~CASH FLOWS

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

Common Stock

Paid-In

Retained

Unearned
ESOP

Accumulated
Other
Comprehensive

Shares

Amount

Capital

Earnings

Shares

Income (Loss)

Total

Balance - December 31, 2021

73,453

$
735

$
587,392

$
431,549

$
(25,780
)

$
1,574

$
995,470

Net income

-

-

-

17,693

-

-

17,693

Other comprehensive loss, net
  of income tax

-

-

-

-

-

(24,523
)

(24,523
)
ESOP shares committed to be
  released (51 shares)

-

-

180

-

486

-

666

Stock repurchases

(2,020
)

(21
)

(26,948
)

-

-

-

(26,969
)
Stock-based compensation expense

-

-

676

-

-

-

676

Cancellation of shares issued for
  restricted stock awards

(9
)

-

(124
)

-

-

-

(124
)
Cash dividends declared
  ($0.11 per common share)

-

-

-

(7,720
)

-

-

(7,720
)
Balance - March 31, 2022

71,424

$
714

$
561,176

$
441,522

$
(25,294
)

$
(22,949
)

$
955,169

Common Stock

Paid-In

Retained

Unearned
ESOP

Accumulated
Other
Comprehensive

Shares

Amount

Capital

Earnings

Shares

Income (Loss)

Total

Balance - June 30, 2021

78,965

$
790

$
654,396

$
408,367

$
(26,753
)

$
6,144

$
1,042,944

Net income

-

-

-

56,177

-

-

56,177

Other comprehensive loss, net
  of income tax

-

-

-

-

-

(29,093
)

(29,093
)
ESOP shares committed to be
  released (151 shares)

-

-

486

-

1,459

-

1,945

Stock repurchases

(7,468
)

(75
)

(95,892
)

-

-

-

(95,967
)
Stock-based compensation expense

-

-

3,117

-

-

-

3,117

Cancellation of shares issued for
  restricted stock awards

(73
)

(1
)

(931
)

-

-

-

(932
)
Cash dividends declared
  ($0.32 per common share)

-

-

-

(23,022
)

-

-

(23,022
)
Balance - March 31, 2022

71,424

$
714

$
561,176

$
441,522

$
(25,294
)

$
(22,949
)

$
955,169


	Three Months Ended September 30,
	2022		2021
Cash Flows from Operating Activities:
Net income	$	16,535	$	19,715
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment	1,472		1,502
Net accretion of yield adjustments	(1,541)		(1,845)
Deferred income taxes	3,307		3,120

Amortization of intangible assets	144		181
(Accretion) amortization of benefit plans’ unrecognized net (gain) loss	(33)		20
Provision for (reversal of) credit losses	670		(5,400)

Loans originated for sale	(39,657)		(60,620)
Proceeds from sale of mortgage loans held-for-sale	57,151		65,234
Gain on sale of mortgage loans held-for-sale, net	(340)		(1,006)
Realized gain on sale/call of investment securities available for sale	—		(1)

Realized gain on sale of loans receivable	(55)		—
Realized loss (gain) on disposition of premises and equipment	52		(1)
Increase in cash surrender value of bank owned life insurance	(2,397)		(1,561)
ESOP and stock-based compensation expense	1,362		2,038
Increase in interest receivable	(3,351)		(179)
(Increase) decrease in other assets	(5,340)		963
Increase in interest payable	2,980		5
Decrease increase in other liabilities	(10,254)		(16,751)
Net Cash Provided by Operating Activities	20,705		5,414

Cash Flows from Investing Activities:
Purchases of:
Investment securities available for sale	—		(82,000)

Proceeds from:
Repayments/calls/maturities of investment securities available for sale	31,288		99,889
Repayments/calls/maturities of investment securities held to maturity	2,324		605

Purchase of loans	(656)		(19,601)
Net (increase) decrease in loans receivable	(241,986)		83,205
Proceeds from sale of loans receivable	706		—
Purchase of interest rate contracts	(758)		—

Additions to premises and equipment	(885)		(400)
Proceeds from death benefit of bank owned life insurance	1,884		—
Proceeds from cash settlement of premises and equipment	—		1
Purchase of FHLB stock	(28,188)		—
Redemption of FHLB stock	30,375		—

Net Cash (Used in) Provided by Investing Activities	(205,896)		81,699

See notes to unaudited consolidated financial statements.

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(In Thousands, Unaudited)~~

Nine Months Ended

March 31,

2022

2021

Cash Flows from Operating Activities:

Net income
$
56,177

$
44,750

Adjustment to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of premises and equipment

4,470

4,355

Net accretion of premiums, discounts and loan fees and costs

(4,374
)

(11,257
)
Deferred income taxes and valuation allowance

6,943

3,004

Bargain purchase gain

0

(3,053
)
Amortization of intangible assets

539

797

Amortization of benefit plans’ unrecognized net loss

60

62

(Reversal of) provision for credit losses

(11,740
)

3,820

Gain on sale of other real estate owned

(14
)

0

Loans originated for sale

(151,783
)

(249,671
)
Proceeds from sale of mortgage loans held-for-sale

167,713

270,147

Gain on sale of mortgage loans held-for-sale, net

(2,260
)

(4,859
)
Realized gain on sale/call of investment securities available for sale

(4
)

(454
)
Realized loss on debt extinguishment

0

796

Realized gain on sale of loans receivable

(92
)

(352
)
Realized (gain) loss on disposition of premises and equipment

(356
)

40

Increase in cash surrender value of bank owned life insurance

(4,634
)

(4,722
)
ESOP and stock-based compensation expense

5,062

5,716

Increase in interest receivable

(155
)

(1,488
)
Decrease (increase) in other assets

6,679

(1,021
)
Increase (decrease) in interest payable

49

(406
)
(Decrease) increase in other liabilities

(15,125
)

1,519

Net Cash Provided by Operating Activities

57,155

57,723

Cash Flows from Investing Activities:

Purchases of:

Investment securities available for sale

(206,145
)

(865,163
)
Investment securities held to maturity

(86,406
)

0

Proceeds from:

Repayments/calls/maturities of investment securities available for sale

280,496

407,489

Repayments/calls/maturities of investment securities held to maturity

2,586

5,280

Sales of investment securities available for sale

0

44,842

Purchase of loans

(112,485
)

(34,635
)
Net (increase) decrease in loans receivable

(36,895
)

237,383

Proceeds from sale of loans receivable

1,126

43,931

Proceeds from the sale of other real estate owned

494

0

Additions to premises and equipment

(1,859
)

(2,889
)
Proceeds from death benefit of bank owned life insurance

300

0

Proceeds from cash settlement of premises and equipment

599

3,401

Redemption of FHLB stock

5,618

16,421

Net cash acquired in acquisition

0

4,296

Net Cash Used in Investing Activities
$
(152,571
)

$
(139,644
)

~~See notes to unaudited consolidated financial statements.~~

~~- 6 -~~

~~KEARNY FINANCIAL CORP. AND SUBSIDIARIES~~

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Thousands, Unaudited)

Nine Months Ended

March 31,

2022

2021

Cash Flows from Financing Activities:

Net increase in deposits
$
43,903

$
485,417

Repayment of term FHLB advances

(1,170,000
)

(2,257,796
)
Proceeds from term FHLB advances

1,045,000

1,955,000

Net increase (decrease) in other short-term borrowings

290,000

(68,635
)
Net increase (decrease) in advance payments by borrowers for taxes

1,227

(2,063
)
Repurchase and cancellation of common stock of Kearny Financial Corp.

(95,967
)

(80,567
)
Cancellation of shares repurchased on vesting to pay taxes

(932
)

(803
)
Exercise of stock options

0

373

Dividends paid

(23,291
)

(20,981
)
Net Cash Provided by Financing Activities

89,940

9,945

Net Decrease in Cash and Cash Equivalents

(5,476
)

(71,976
)
Cash and Cash Equivalents - Beginning

67,855

180,967

Cash and Cash Equivalents - Ending
$
62,379

$
108,991

Supplemental Disclosures of Cash Flows Information:

Cash paid during the period for:

Income taxes, net of refunds
$
9,497

$
13,675

Interest
$
21,666

$
41,649

Non-cash investing and financing activities:

Acquisition of other real estate owned in settlement of loans
$
703

$
0

Transfers from loans receivable to loans receivable held-for-sale
$
0

$
43,579

Fair value of assets acquired, net of cash and cash equivalents acquired
$
0

$
567,816

Fair value of liabilities assumed
$
0

$
523,926


	Three Months Ended September 30,
	2022		2021
Cash Flows from Financing Activities:
Net increase (decrease) in deposits	246,120		(89,927)
Repayment of term FHLB advances	(1,420,000)		(390,000)
Proceeds from term FHLB advances	1,565,000		390,000
Net (decrease) increase in other short-term borrowings	(195,000)		35,000
Net (decrease) increase in advance payments by borrowers for taxes	(191)		470
Repurchase and cancellation of common stock of Kearny Financial Corp.	(8,693)		(38,996)
Cancellation of shares repurchased on vesting to pay taxes	(341)		(89)

Dividends paid	(7,243)		(7,356)
Net Cash Provided by (Used in) Financing Activities	179,652		(100,898)
Net Decrease in Cash and Cash Equivalents	(5,539)		(13,785)
Cash and Cash Equivalents - Beginning	101,615		67,855
Cash and Cash Equivalents - Ending	$	96,076	$	54,070

Supplemental Disclosures of Cash Flows Information:
Cash paid during the period for:
Income taxes, net of refunds	$	6,018	$	6,011
Interest	$	12,909	$	7,611

Non-cash investing and financing activities:

Transfers from loans receivable to loans receivable held-for-sale	$	1,216	$	—

See notes to unaudited consolidated financial statements.

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The unaudited consolidated financial statements include the accounts of Kearny Financial Corp. (the “Company”), its wholly-owned subsidiary, Kearny Bank (the “Bank”) and the Bank’s wholly-owned subsidiary, CJB Investment Corp. The Company conducts its business principally through the Bank. Management prepared the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), including the elimination of all significant inter-company accounts and transactions during consolidation.

Basis of Presentation

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include the information or footnotes necessary for a complete presentation of financial condition, income, comprehensive income, changes in stockholders’ equity and cash flows in conformity with GAAP. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the unaudited consolidated financial statements have been included. The results of operations for the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other period.

The data in the consolidated statement of financial condition ~~for~~at June 30, ~~2021~~2022 was derived from the Company’s ~~2021~~2022 Annual Report on Form 10-K. That data, along with the interim unaudited financial information presented in the consolidated statements of financial condition, income, comprehensive income, changes in stockholders’ equity and cash flows should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s ~~2021~~2022 Annual Report on Form 10-K.

The accounting and reporting policies of the Company conform to U.S. GAAP and to general practice within the financial services industry. A discussion of these policies can be found in Note 1, Summary of Significant Accounting Policies, included in the Company’s ~~2021~~2022 Annual Report on Form 10-K. There have been no material changes to the Company’s significant accounting policies since June 30, ~~2021.~~

The Company has reclassified certain amounts in the prior period’s financial statements to conform to the current period’s presentation. Specifically, effective July 1, 2021, loan prepayment penalty income was reclassified to interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Interest income and non-interest income for all periods presented reflect this reclassification.

~~Update to Significant Accounting Policies~~

~~Allowance for Credit Losses (“ACL”) on Loans.~~In accordance with the ACL policy, the methodology is reviewed no less than annually. During the quarter ended September 30, 2021, the Company updated the econometric factors used in the determination of the probability of default for certain loan portfolio segments used in its ACL methodology for pooled loans. Econometric factors are selected based on the correlation of the factor to credit losses for each loan portfolio segment. Effective July 1, 2021, the primary econometric factor utilized in the determination of the probability of default for each loan portfolio segment is the national unemployment rate (“NUR”). Prior to July 1, 2021, NUR and gross domestic product (“GDP”) econometric factors were used in the determination of the probability of default for each loan portfolio segment.

2022.

2. SUBSEQUENT EVENTS

The Company has evaluated events and transactions occurring subsequent to the statement of financial condition date of ~~March 31,~~September 30, 2022, for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date this document was filed.

On October 27, 2022, the Company declared a quarterly cash dividend of $0.11 per share, payable on November 23, 2022 to stockholders of record as of November 9, 2022.

Sale of Former Branch Location

On September 20, 2022, the Bank entered into an agreement for the sale of a branch location. The branch location ceased operations subsequent to September 30, 2022 as part of a branch relocation. The sale transaction closed on October 31, 2022 and the Company recognized a pre-tax gain of approximately $2.9 million.

3. RECENT ACCOUNTING PRONOUNCEMENTS

In March 2022, the Financial Accounting Standards Board (the “FASB”) issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” to improve the usefulness of information provided to investors about certain loan refinancings, restructurings and writeoffs. ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings by creditors and enhances disclosure requirements for certain modifications made to borrowers experiencing financial difficulty. In addition, ASU 2022-02 requires public business entities to disclose current-period gross writeoffs for financing receivables and net investments in leases by year of origination in the vintage disclosures. For entities that have adopted ASU 2016-13, the amendments in ASU 2022-02 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted if an entity has adopted ASU 2016-13, including adoption in an interim period. If an entity elects to early adopt the amendments in ASU 2022-02, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. An entity may elect to early adopt the amendments about TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The amendments in ASU 2022-02 should be applied prospectively, but for the amendments related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method that would result in a cumulative-effect adjustment to retained earnings in the period of adoption. The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements.

Adoption of New Accounting Standards

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method” which clarifies the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios of financial assets. This ASU amends the guidance in ASU 2017-12 (released in August 2017) that, among other things, established the last-of-layer method to enable fair value hedge accounting for these portfolios to be more accessible. ASU 2022-01 expands the current last-of-layer method to allow multiple hedged layers of a single closed portfolio under this method. To reflect that expansion, the last-of-layer method is renamed the portfolio layer method. The scope of last-of-layer hedging will be expanded so that the portfolio layer method can be utilized for nonprepayable financial assets. In addition, ASU 2022-01 specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, and specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio. For public business entities, the amendments in ASU 2022-01 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted the amendments in ASU 2017-12 for the corresponding period. The Company ~~is currently evaluating the impact of the adoption of~~adopted this ASU on July 1, 2022 on a prospective basis; therefore, there was no impact to its consolidated financial ~~statements.~~

~~Adoption of New Accounting Standards~~

~~In December 2019, the FASB issued~~ ~~ASU 2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes”.~~ ASU 2019-12 provides amendments intended to reduce the cost and complexity in accounting for income taxes while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes the following exceptions from ASC 740, Income Taxes: (i) exceptions to the incremental approach for intraperiod tax allocation; (ii) exceptions to accounting for basis differences when a foreign subsidiary becomes an equity method investment or a foreign equity method investment become a subsidiary; and (iii) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 provides the following amendments that simplify and improve guidance with Topic 740: (i) franchise taxes that are based partially on income; (ii) transactions that result in a step up in the tax basis of goodwill; (iii) separate financial statements of legal entities that are not subject to tax; (iv) enacted changes in tax laws in interim periods; and (v) employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. For public business entities, the amendments in the ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted ASU 2019-12 in July 2021, and its adoption did not have a significant impact on the Company’s consolidated financial statements.upon adoption.

The following tables present the amortized cost, gross unrealized gains and losses and estimated fair values for available for sale securities and the amortized cost, gross unrecognized gains and losses and estimated fair values for held to maturity securities as of the dates indicated:

March 31, 2022

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Allowance for
Credit Losses

Fair
Value

(In Thousands)

Available for sale:

Debt securities:

Obligations of state and political subdivisions
$
30,973

$
118

$
13

$
-

$
31,078

Asset-backed securities

230,997

375

1,788

-

229,584

Collateralized loan obligations

313,651

11

2,042

-

311,620

Corporate bonds

154,922

1,193

2,620

-

153,495

Total debt securities

730,543

1,697

6,463

-

725,777

Mortgage-backed securities:

Collateralized mortgage obligations (1)

8,265

1

270

-

7,996

Residential pass-through securities (1)

617,387

332

47,569

-

570,150

Commercial pass-through securities (1)

233,879

249

11,965

-

222,163

Total mortgage-backed securities

859,531

582

59,804

-

800,309

Total securities available for sale
$
1,590,074

$
2,279

$
66,267

$
-

$
1,526,086

~~(1)~~


	September 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(In Thousands)
Available for sale:
Debt securities:
Obligations of state and political subdivisions	$	28,477	$	3	$	1,022	$	—	$	27,458
Asset-backed securities	160,685		—		2,604		—		158,081
Collateralized loan obligations	313,938		—		11,091		—		302,847
Corporate bonds	159,820		—		14,207		—		145,613
Total debt securities	662,920		3		28,924		—		633,999

Mortgage-backed securities:
Collateralized mortgage obligations (1)	6,889		—		571		—		6,318
Residential pass-through securities (1)	580,440		3		112,354		—		468,089
Commercial pass-through securities (1)	180,323		—		25,553		—		154,770
Total mortgage-backed securities	767,652		3		138,478		—		629,177

Total securities available for sale	$	1,430,572	$	6	$	167,402	$	—	$	1,263,176

~~Government-sponsored enterprises.~~

(1)

Government-sponsored ~~enterprises~~enterprises.


	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(In Thousands)
Available for sale:
Debt securities:
Obligations of state and political subdivisions	$	28,485	$	39	$	89	$	—	$	28,435
Asset-backed securities	169,506		—		2,949		—		166,557
Collateralized loan obligations	315,693		—		7,880		—		307,813
Corporate bonds	159,871		175		6,649		—		153,397
Total debt securities	673,555		214		17,567		—		656,202

Mortgage-backed securities:
Collateralized mortgage obligations (1)	7,451		—		329		—		7,122
Residential pass-through securities (1)	595,337		45		80,624		—		514,758
Commercial pass-through securities (1)	185,781		1		19,771		—		166,011
Total mortgage-backed securities	788,569		46		100,724		—		687,891

Total securities available for sale	$	1,462,124	$	260	$	118,291	$	—	$	1,344,093

___________________________

(1).Government-sponsored enterprises.

- 9 -

Index


	September 30, 2022
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Allowance for Credit Losses		Fair Value
	(In Thousands)
Held to maturity:
Debt securities:
Obligations of state and political subdivisions	$	19,830	$	—	$	608	$	—	$	19,222
Total debt securities	19,830		—		608		—		19,222

Mortgage-backed securities:
Residential pass-through securities (1)	83,840		—		13,489		—		70,351
Commercial pass-through securities (1)	12,273		—		2,298		—		9,975
Total mortgage-backed securities	96,113		—		15,787		—		80,326

Total securities held to maturity	$	115,943	$	—	$	16,395	$	—	$	99,548

___________________________

(1)Government-sponsored enterprises.


	June 30, 2022
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Allowance for Credit Losses		Fair Value
	(In Thousands)
Held to maturity:
Debt securities:
Obligations of state and political subdivisions	$	21,159	$	44	$	78	$	—	$	21,125
Total debt securities	21,159		44		78		—		21,125

Mortgage-backed securities:
Residential pass-through securities (1)	84,851		—		8,587		—		76,264
Commercial pass-through securities (1)	12,281		—		1,552		—		10,729
Total mortgage-backed securities	97,132		—		10,139		—		86,993

Total securities held to maturity	$	118,291	$	44	$	10,217	$	—	$	108,118

___________________________

(1)Government-sponsored enterprises.

- 10 -

March 31, 2022

Amortized
Cost

Gross
Unrecognized
Gains

Gross
Unrecognized
Losses

Allowance for
Credit Losses

Fair
Value

(In Thousands)

Held to maturity:

Debt securities:

Obligations of state and political subdivisions
$
23,546

$
122

$
24

$
-

$
23,644

Total debt securities

23,546

122

24

-

23,644

Mortgage-backed securities:

Residential pass-through securities (1)

86,017

-

3,989

-

82,028

Commercial pass-through securities (1)

12,290

-

945

-

11,345

Total mortgage-backed securities

98,307

-

4,934

-

93,373

Total securities held to maturity
$
121,853

$
122

$
4,958

$
-

$
117,017

~~(1)~~

~~Government-sponsored enterprises.~~

June 30, 2021

Amortized
Cost

Gross
Unrecognized
Gains

Gross
Unrecognized
Losses

Allowance for
Credit Losses

Fair
Value

(In Thousands)

Held to maturity:

Debt securities:

Obligations of state and political subdivisions
$
25,824

$
1,204

$
-

$
-

$
27,028

Total debt securities

25,824

1,204

-

-

27,028

Mortgage-backed securities:

Commercial pass-through securities (1)

12,314

268

-

-

12,582

Total mortgage-backed securities

12,314

268

-

-

12,582

Total securities held to maturity
$
38,138

$
1,472

$
-

$
-

$
39,610

~~(1)~~

~~Government-sponsored enterprises.~~

Index

Excluding the balances of mortgage-backed securities, the following tables present the amortized cost and estimated fair values of debt securities available for sale and held to maturity, by contractual maturity, at ~~March 31,~~September 30, 2022:

March 31, 2022

Amortized
Cost

Fair
Value

(In Thousands)

Available for sale debt securities:

Due in one year or less

$
1,970

$
1,971

Due after one year through five years

18,939

19,008

Due after five years through ten years

353,679

351,676

Due after ten years

355,955

353,122

Total

$
730,543

$
725,777

~~- 11 -~~

March 31, 2022

Amortized
Cost

Fair
Value

(In Thousands)

Held to maturity debt securities:

Due in one year or less

$
6,817

$
6,832

Due after one year through five years

15,026

15,084

Due after five years through ten years

1,703

1,728

Due after ten years

-

-

Total

$
23,546

$
23,644

~~Sales of securities available for sale were as follows for the periods presented below:~~

Three Months Ended

Nine Months Ended

March 31,

March 31,

2022

2021

2022

2021

(In Thousands)

Available for sale securities sold:

Proceeds from sales of securities
$
0

$
0

$
0

$
44,842

Gross realized gains
$
0

$
0

$
0

$
800

Gross realized losses

0

0

0

(385
)
Net gain on sales of securities
$
0

$
0

$
0

$
415


	September 30, 2022
	Amortized Cost		Fair Value
	(In Thousands)
Available for sale debt securities:
Due in one year or less	$	2,621	$	2,610
Due after one year through five years	19,184		18,501
Due after five years through ten years	330,083		314,193
Due after ten years	311,032		298,695
Total	$	662,920	$	633,999

~~Gains resulting from calls of securities available for sale were as follows for the periods presented below:~~

Three Months Ended

Nine Months Ended

March 31,

March 31,

2022

2021

2022

2021

(In Thousands)

Available for sale securities called:

Gross realized gains
$
3

$
18

$
4

$
39

Gross realized losses

0

0

0

0

Net gain on calls of securities
$
3

$
18

$
4

$
39


	September 30, 2022
	Amortized Cost		Fair Value
	(In Thousands)
Held to maturity debt securities:
Due in one year or less	$	4,574	$	4,548
Due after one year through five years	13,555		13,070
Due after five years through ten years	1,701		1,604
Due after ten years	—		—
Total	$	19,830	$	19,222

During the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 and 2021, there were 0no gains or losses recognized on sales of securities available for sale or securities held to maturity.

During the three months ended September 30, 2022, there were no gains recognized on the call of securities available for sale. During the three months ended September 30, 2021, calls of securities available for sale resulted in a gross gain of $1,000.

The carrying value of securities pledged for borrowings at the FHLB and other institutions, and securities pledged for public funds and other purposes, were as follows as of the dates presented below:

March 31,

June 30,

2022

2021

(In Thousands)

Securities pledged:

  Pledged for borrowings at the FHLB of New York

$
155,868

$
170,120

  Pledged to secure public funds on deposit

324,425

137,778

  Pledged for potential borrowings at the Federal Reserve Bank of New York

372,968

274,076

Total carrying value of securities pledged

$
853,261

$
581,974


	September 30, 2022		June 30, 2022
	(In Thousands)
Securities pledged:
Pledged for borrowings at the FHLB of New York	$	162,538	$	178,048
Pledged to secure public funds on deposit	404,240		357,841
Pledged for potential borrowings at the Federal Reserve Bank of New York	370,149		378,071
Total carrying value of securities pledged	$	936,927	$	913,960

- 1211 -

Index

The following tables present the gross unrealized losses on securities and the estimated fair value of the related securities, aggregated by investment category and length of time that securities have been in a continuous unrealized loss position within the available for sale portfolio at ~~March 31,~~September 30, 2022 and June 30, ~~2021:~~2022:


	September 30, 2022
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
	(Dollars in Thousands)
Securities Available for Sale:
Obligations of state and political subdivisions	$	26,456	$	1,022	$	—	$	—	71	$	26,456	$	1,022
Asset-backed securities	153,235		2,566		4,846		38		15	158,081		2,604
Collateralized loan obligations	190,147		7,000		112,700		4,091		24	302,847		11,091
Corporate bonds	135,184		12,636		10,429		1,571		31	145,613		14,207
Collateralized mortgage obligations	6,318		571		—		—		6	6,318		571
Commercial pass-through securities	57,838		5,451		96,932		20,102		22	154,770		25,553
Residential pass-through securities	147,704		24,211		319,903		88,143		119	467,607		112,354
Total	$	716,882	$	53,457	$	544,810	$	113,945	288	$	1,261,692	$	167,402


	June 30, 2022
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
	(Dollars in Thousands)
Securities Available for Sale:
Obligations of state and political subdivisions	$	11,310	$	89	$	—	$	—	30	$	11,310	$	89
Asset-backed securities	161,303		2,928		5,254		21		15	166,557		2,949
Collateralized loan obligations	236,967		6,435		70,846		1,445		24	307,813		7,880
Corporate bonds	129,407		6,464		3,815		185		27	133,222		6,649
Collateralized mortgage obligations	7,122		329		—		—		6	7,122		329
Commercial pass-through securities	63,045		3,194		102,817		16,577		21	165,862		19,771
Residential pass-through securities	237,928		26,566		274,197		54,058		106	512,125		80,624
Total	$	847,082	$	46,005	$	456,929	$	72,286	229	$	1,304,011	$	118,291

- 12 -

Index

March 31, 2022

Less than 12 Months

12 Months or More

Total

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Number of Securities

Fair
Value

Unrealized
Losses

(Dollars in Thousands)

Securities Available for Sale:

Obligations of state and political
subdivisions
$
2,303

$
13

$
-

$
-

8

$
2,303

$
13

Asset-backed securities

180,827

1,788

-

-

15

180,827

1,788

Collateralized loan obligations

226,513

1,780

52,851

262

22

279,364

2,042

Corporate bonds

75,909

2,495

3,875

125

16

79,784

2,620

Collateralized mortgage obligations

6,819

270

-

-

5

6,819

270

Commercial pass-through securities

48,811

1,147

113,569

10,818

15

162,380

11,965

Residential pass-through securities

237,063

14,376

302,905

33,193

66

539,968

47,569

Total
$
778,245

$
21,869

$
473,200

$
44,398

147

$
1,251,445

$
66,267

June 30, 2021

Less than 12 Months

12 Months or More

Total

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Number of Securities

Fair
Value

Unrealized
Losses

(Dollars in Thousands)

Securities Available for Sale:

Asset-backed securities
$
12,159

$
63

$
-

$
-

2

$
12,159

$
63

Collateralized loan obligations

36,741

9

58,605

161

8

95,346

170

Corporate bonds

15,952

73

-

-

4

15,952

73

Commercial pass-through securities

145,055

2,652

-

-

7

145,055

2,652

Residential pass-through securities

424,112

7,148

-

-

10

424,112

7,148

Total
$
634,019

$
9,945

$
58,605

$
161

31

$
692,624

$
10,106

The following table presents the gross unrecognized losses on securities and the estimated fair value of the related securities, aggregated by investment category and length of time that securities have been in a continuous unrecognized loss position within the held to maturity portfolio at ~~March 31, 2022:~~

March 31, 2022

Less than 12 Months

12 Months or More

Total

Fair
Value

Unrecognized
Losses

Fair
Value

Unrecognized
Losses

Number of Securities

Fair
Value

Unrecognized
Losses

(Dollars in Thousands)

Securities Held to Maturity:

Obligations of state and political
  subdivisions
$
4,901

$
24

$
-

$
-

8

$
4,901

$
24

Commercial pass-through
  securities

11,345

945

-

-

1

11,345

945

Residential pass-through
  securities

82,028

3,989

-

-

8

82,028

3,989

Total
$
98,274

$
4,958

$
-

$
-

17

$
98,274

$
4,958

AtSeptember 30, 2022 and June 30, ~~2021, there were~~ 0 ~~held to maturity securities with unrecognized losses.~~

~~- 13 -~~

2022:


	September 30, 2022
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Number of Securities	Fair Value		Unrecognized Losses
	(Dollars in Thousands)
Securities Held to Maturity:
Obligations of state and political subdivisions	$	19,222	$	608	$	—	$	—	39	$	19,222	$	608
Commercial pass-through securities	9,976		2,298		—		—		1	9,976		2,298
Residential pass-through securities	70,350		13,489		—		—		8	70,350		13,489

Total	$	99,548	$	16,395	$	—	$	—	48	$	99,548	$	16,395


	June 30, 2022
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Number of Securities	Fair Value		Unrecognized Losses
	(Dollars in Thousands)
Securities Held to Maturity:
Obligations of state and political subdivisions	$	8,681	$	78	$	—	$	—	15	$	8,681	$	78
Commercial pass-through securities	10,729		1,552		—		—		1	10,729		1,552
Residential pass-through securities	76,264		8,587		—		—		8	76,264		8,587

Total	$	95,674	$	10,217	$	—	$	—	24	$	95,674	$	10,217

Available for sale securities are evaluated to determine if a decline in fair value below the amortized cost basis has resulted from a credit loss or from other factors. An impairment related to credit factors would be recorded through an allowance for credit losses. The allowance is limited to the amount by which the security’s amortized cost basis exceeds the fair value. An impairment that has not been recorded through an allowance for credit losses shall be recorded through other comprehensive income, net of applicable taxes. Investment securities will be written down to fair value through the ~~consolidated statement~~Consolidated Statement of ~~income~~Income if management intends to sell, or may be required to sell, the securities before they recover in value. The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due or were placed in nonaccrual status at ~~March 31,~~September 30, 2022. Management believes that the unrealized losses on these securities are a function of changes in market interest rates and credit spreads, not changes in credit quality. ~~NaN~~No allowance for credit losses was recorded at ~~March 31,~~September 30, 2022 on available for sale securities.

At ~~March 31,~~September 30, 2022, the held to maturity securities portfolio consists of agency mortgage-backed securities and obligations of state and political subdivisions. The mortgage-backed securities are issued by U.S. government agencies and are implicitly guaranteed by the U.S. government. The obligations of state and political subdivisions in the portfolio are highly rated by major rating agencies and have a long history of no credit losses. The Company regularly monitors the obligations of state and political subdivisions sector of the market and reviews collectability including such factors as the financial condition of the issuers as well as credit ratings in effect as of the reporting period. No allowance for credit losses was recorded at ~~March 31,~~September 30, 2022 on held to maturity securities.

- 13 -

Index

5. LOANS RECEIVABLE

The following table sets forth the composition of the Company’s loan portfolio at ~~March 31,~~September 30, 2022 and June 30, ~~2021:~~2022:


	September 30, 2022		June 30, 2022
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	2,570,297	$	2,409,090
Nonresidential mortgage	1,040,688		1,019,838
Commercial business	186,361		176,807
Construction	166,052		140,131
Total commercial loans	3,963,398		3,745,866

One- to four-family residential mortgage	1,666,730		1,645,816

Consumer loans:
Home equity loans	43,269		42,028
Other consumer	2,869		2,866
Total consumer loans	46,138		44,894

Total loans	5,676,266		5,436,576

Unaccreted yield adjustments (1)	(19,896)		(18,731)

Total loans receivable, net of yield adjustments	$	5,656,370	$	5,417,845

___________________________

(1)

At September 30, 2022, included a fair value adjustment to the carrying amount of hedged one- to four-family residential mortgage loans.

March 31,

June 30,

2022

2021

(In Thousands)

Commercial loans:

Multi-family mortgage
$
2,076,003

$
2,039,260

Nonresidential mortgage

1,085,988

1,079,444

Commercial business

169,551

168,951

Construction

121,137

93,804

Total commercial loans

3,452,679

3,381,459

One- to four-family residential mortgage

1,527,980

1,447,721

Consumer loans:

Home equity loans

41,501

47,871

Other consumer

2,755

3,259

Total consumer loans

44,256

51,130

Total loans

5,024,915

4,880,310

Unaccreted yield adjustments

(21,714
)

(28,916
)

Total loans receivable, net of yield adjustments
$
5,003,201

$
4,851,394

~~- 14 -~~

Past Due Loans

Past due status is based on the contractual payment terms of the loans. The following tables present the payment status of past due loans as of ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, by loan segment:


	Payment Status September 30, 2022
	30-59 Days		60-89 Days		90 Days and Over		Total Past Due		Current		Total
	(In Thousands)
Multi-family mortgage	$	—	$	—	$	10,842	$	10,842	$	2,559,455	$	2,570,297
Nonresidential mortgage	20		918		18,102		19,040		1,021,648		1,040,688
Commercial business	—		8		325		333		186,028		186,361
Construction	—		—		—		—		166,052		166,052
One- to four-family residential mortgage	1,305		1,009		2,326		4,640		1,662,090		1,666,730
Home equity loans	153		—		24		177		43,092		43,269
Other consumer	—		—		—		—		2,869		2,869
Total loans	$	1,478	$	1,935	$	31,619	$	35,032	$	5,641,234	$	5,676,266

- 14 -

Index

Payment Status

March 31, 2022

30-59 Days

60-89 Days

90 Days and Over

Total Past Due

Current

Total

(In Thousands)

Multi-family mortgage
$
-

$
-

$
28,197

$
28,197

$
2,047,806

$
2,076,003

Nonresidential mortgage

2,101

-

25,283

27,384

1,058,604

1,085,988

Commercial business

-

64

281

345

169,206

169,551

Construction

-

-

-

-

121,137

121,137

One- to four-family
residential mortgage

3,410

520

2,968

6,898

1,521,082

1,527,980

Home equity loans

25

4

59

88

41,413

41,501

Other consumer

-

-

-

-

2,755

2,755

Total loans
$
5,536

$
588

$
56,788

$
62,912

$
4,962,003

$
5,024,915

Payment Status

June 30, 2021

30-59 Days

60-89 Days

90 Days and Over

Total Past Due

Current

Total

(In Thousands)

Multi-family mortgage
$
-

$
-

$
16,094

$
16,094

$
2,023,166

$
2,039,260

Nonresidential mortgage

-

-

32,891

32,891

1,046,553

1,079,444

Commercial business

-

-

401

401

168,550

168,951

Construction

-

-

-

-

93,804

93,804

One- to four-family
residential mortgage

382

2,734

5,104

8,220

1,439,501

1,447,721

Home equity loans

6

5

32

43

47,828

47,871

Other consumer

1

-

-

1

3,258

3,259

Total loans
$
389

$
2,739

$
54,522

$
57,650

$
4,822,660

$
4,880,310


	Payment Status June 30, 2022
	30-59 Days		60-89 Days		90 Days and Over		Total Past Due		Current		Total
	(In Thousands)
Multi-family mortgage	$	3,148	$	3,056	$	7,788	$	13,992	$	2,395,098	$	2,409,090
Nonresidential mortgage	4,026		—		18,132		22,158		997,680		1,019,838
Commercial business	98		57		155		310		176,497		176,807
Construction	—		—		—		—		140,131		140,131
One- to four-family residential mortgage	1,525		253		3,455		5,233		1,640,583		1,645,816
Home equity loans	28		35		—		63		41,965		42,028
Other consumer	—		—		—		—		2,866		2,866
Total loans	$	8,825	$	3,401	$	29,530	$	41,756	$	5,394,820	$	5,436,576

Nonperforming Loans

Loans are generally placed on nonaccrual status when contractual payments become 90 or more days past due or when the Company does not expect to receive all principal and interest payments owed substantially in accordance with the terms of the loan agreement, regardless of past due status. Loans that become 90 days past due, but are well secured and in the process of collection, may remain on accrual status. Nonaccrual loans are generally returned to accrual status when all payments due are brought current and the Company expects to receive all remaining principal and interest payments owed substantially in accordance with the terms of the loan agreement. Payments received in cash on nonaccrual loans, including both the principal and interest portions of those payments, are generally applied to reduce the carrying value of the loan. The Company did not recognize interest income on non-accrual loans during the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 and 2021.

~~- 15 -~~

The following tables present information relating to the Company’s nonperforming loans as of ~~March 31,~~September 30, 2022 and June 30, ~~2021:~~2022:


	Performance Status September 30, 2022
	90 Days and Over Past Due Accruing		Nonaccrual Loans with Allowance for Credit Losses		Nonaccrual Loans with no Allowance for Credit Losses		Total Nonperforming		Performing		Total
	(In Thousands)
Multi-family mortgage	$	—	$	8,317	$	18,089	$	26,406	$	2,543,891	$	2,570,297
Nonresidential mortgage	—		12,328		19,021		31,349		1,009,339		1,040,688
Commercial business	—		275		50		325		186,036		186,361
Construction	—		—		1,402		1,402		164,650		166,052
One- to four-family residential mortgage	—		4,420		4,584		9,004		1,657,726		1,666,730
Home equity loans	—		—		88		88		43,181		43,269
Other consumer	—		—		—		—		2,869		2,869
Total loans	$	—	$	25,340	$	43,234	$	68,574	$	5,607,692	$	5,676,266

- 15 -

Index

Performance Status

March 31, 2022

90 Days and Over Past Due Accruing

Nonaccrual Loans with Allowance for Credit Losses

Nonaccrual Loans with no Allowance for Credit Losses

Total Nonperforming

Performing

Total

(In Thousands)

Multi-family mortgage
$
-

$
11,369

$
28,646

$
40,015

$
2,035,988

$
2,076,003

Nonresidential mortgage

-

3,667

24,523

28,190

1,057,798

1,085,988

Commercial business

-

63

430

493

169,058

169,551

Construction

-

-

1,791

1,791

119,346

121,137

One- to four-family
residential mortgage

-

4,376

4,241

8,617

1,519,363

1,527,980

Home equity loans

-

313

1,176

1,489

40,012

41,501

Other consumer

-

-

-

-

2,755

2,755

Total loans
$
-

$
19,788

$
60,807

$
80,595

$
4,944,320

$
5,024,915

Performance Status

June 30, 2021

90 Days and Over Past Due Accruing

Nonaccrual Loans with Allowance for Credit Losses

Nonaccrual Loans with no Allowance for Credit Losses

Total Nonperforming

Performing

Total

(In Thousands)

Multi-family mortgage
$
-

$
8,300

$
10,226

$
18,526

$
2,020,734

$
2,039,260

Nonresidential mortgage

-

12,612

24,575

37,187

1,042,257

1,079,444

Commercial business

-

236

676

912

168,039

168,951

Construction

-

-

2,228

2,228

91,576

93,804

One- to four-family
residential mortgage

-

7,422

11,748

19,170

1,428,551

1,447,721

Home equity loans

-

452

1,292

1,744

46,127

47,871

Other consumer

-

-

-

-

3,259

3,259

Total loans
$
-

$
29,022

$
50,745

$
79,767

$
4,800,543

$
4,880,310


	Performance Status June 30, 2022
	90 Days and Over Past Due Accruing		Nonaccrual Loans with Allowance for Credit Losses		Nonaccrual Loans with no Allowance for Credit Losses		Total Nonperforming		Performing		Total
	(In Thousands)
Multi-family mortgage	$	—	$	8,367	$	18,286	$	26,653	$	2,382,437	$	2,409,090
Nonresidential mortgage	—		12,602		19,292		31,894		987,944		1,019,838
Commercial business	—		212		81		293		176,514		176,807
Construction	—		—		1,561		1,561		138,570		140,131
One- to four-family residential mortgage	—		3,543		4,946		8,489		1,637,327		1,645,816
Home equity loans	—		302		1,129		1,431		40,597		42,028
Other consumer	—		—		—		—		2,866		2,866
Total loans	$	—	$	25,026	$	45,295	$	70,321	$	5,366,255	$	5,436,576

Troubled Debt Restructurings (“TDRs”)

TDRs are loans where the Company has modified the contractual terms of the loan as a result of the financial condition of the borrower. Subsequent to their modification, TDRs are placed on non-accrual until such time as satisfactory payment performance has been demonstrated, at which time the loan may be returned to accrual status. On a case-by-case basis, the Company may agree to modify the contractual terms of a loan to assist a borrower who may be experiencing financial difficulty, as well as to preserve the Company’s position in the loan. If the borrower is experiencing financial difficulties and a concession has been made at the time of such modification, the loan is classified as a TDR. The Company had TDRs totaling $~~31.7~~$20.8 million and $~~17.8~~$22.2 million as of ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, respectively. The allowance for credit losses associated with the TDRs presented in the tables below totaled $~~672,000~~ an~~d $256,000~~$403,000 and $365,000 as of ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, respectively. As of ~~March 31,~~September 30, 2022, ~~there were no significant~~the Company had commitments to lend additional funds totaling $92,000 to borrowers whose loans had been restructured in a TDR.

~~- 16 -~~

The following tables present total TDR loans at ~~March 31,~~September 30, 2022 and June 30, ~~2021:~~2022:


	September 30, 2022
	Accrual			Non-accrual			Total
	# of Loans	Amount		# of Loans	Amount		# of Loans	Amount
	(Dollars In Thousands)
Commercial loans:
Multi-family mortgage	—	$	—	2	$	5,582	2	$	5,582
Nonresidential mortgage	3	190		1	395		4	585
Commercial business	4	3,578		—	—		4	3,578
Construction	—	—		1	1,402		1	1,402
Total commercial loans	7	3,768		4	7,379		11	11,147

One- to four-family residential mortgage	27	3,723		18	4,419		45	8,142

Consumer loans:
Home equity loans	6	1,454		1	35		7	1,489
Total	40	$	8,945	23	$	11,833	63	$	20,778

- 16 -

Index

March 31, 2022

Accrual

Non-accrual

Total

# of Loans

Amount

# of Loans

Amount

# of Loans

Amount

(Dollars In Thousands)

Commercial loans:

Multi-family mortgage

-

$
-

3

$
14,605

3

$
14,605

Nonresidential mortgage

4

400

2

1,646

6

2,046

Commercial business

5

3,704

3

325

8

4,029

Construction

-

-

1

1,791

1

1,791

Total commercial loans

9

4,104

9

18,367

18

22,471

One- to four-family residential
mortgage

29

4,270

15

3,392

44

7,662

Consumer loans:

Home equity loans

5

170

2

1,396

7

1,566

Total

43

$
8,544

26

$
23,155

69

$
31,699

June 30, 2021

Accrual

Non-accrual

Total

# of Loans

Amount

# of Loans

Amount

# of Loans

Amount

(Dollars In Thousands)

Commercial loans:

Multi-family mortgage

-

$
-

1

$
2,896

1

$
2,896

Nonresidential mortgage

1

105

6

2,275

7

2,380

Commercial business

3

3,755

6

693

9

4,448

Construction

-

-

1

2,228

1

2,228

Total commercial loans

4

3,860

14

8,092

18

11,952

One- to four-family residential
mortgage

18

2,216

20

3,405

38

5,621

Consumer loans:

Home equity loans

4

159

3

68

7

227

Total

26

$
6,235

37

$
11,565

63

$
17,800

June 30, 2022
Accrual Non-accrual Total
# of Loans Amount # of Loans Amount # of Loans Amount
(Dollars In Thousands)
Commercial loans:
Multi-family mortgage — $ — 2 $ 5,626 2 $ 5,626
Nonresidential mortgage 4 389 2 1,565 6 1,954
Commercial business 5 3,631 2 82 7 3,713
Construction — — 1 1,561 1 1,561
Total commercial loans 9 4,020 7 8,834 16 12,854
One- to four-family residential mortgage 29 4,488 16 3,314 45 7,802
Consumer loans:
Home equity loans 5 164 2 1,364 7 1,528
Total 43 $ 8,672 25 $ 13,512 68 $ 22,184

The following tables present information regarding ~~troubled debt restructurings~~TDRs that occurred during the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 and 2021:

Three Months Ended March 31, 2022

Nine Months Ended March 31, 2022

# of Loans

Pre-
modification
Recorded
Investment

Post-
modification
Recorded
Investment

# of Loans

Pre-
modification
Recorded
Investment

Post-
modification
Recorded
Investment

(Dollars In Thousands)

Multi-family mortgage

1

$
9,104

$
9,101

2

$
12,091

$
12,073

One- to four-family residential
mortgage

8

2,953

2,965

10

3,214

3,226

Home equity loans

2

1,477

1,477

2

1,477

1,477

Total

11

$
13,534

$
13,543

14

$
16,782

$
16,776

Three Months Ended March 31, 2021

Nine Months Ended March 31, 2021

# of Loans

Pre-
modification
Recorded
Investment

Post-
modification
Recorded
Investment

# of Loans

Pre-
modification
Recorded
Investment

Post-
modification
Recorded
Investment

(Dollars In Thousands)

One- to four-family residential
mortgage

-

$
-

$
-

1

$
309

$
308

Home equity loans

1

24

24

1

24

24

Total

1

$
24

$
24

2

$
333

$
332

~~- 17 -~~


	Three Months Ended September 30, 2022					Three Months Ended September 30, 2021
	# of Loans	Pre- modification Recorded Investment		Post- modification Recorded Investment		# of Loans	Pre- modification Recorded Investment		Post- modification Recorded Investment
	(Dollars In Thousands)
Multi-family mortgage	—	$	—	$	—	1	$	2,987	$	2,972
One- to four-family residential mortgage	1	435		435		—	—		—
Home equity loans	1	35		35		—	—		—
Total	2	$	470	$	470	1	$	2,987	$	2,972

During the three months ~~and nine~~ended September 30, 2022, there were charge-offs of $10,000 related to TDRs. During the three months ended ~~March 31, 2022 and~~September 30, 2021, there were 0no charge-offs related to TDRs. During the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 and 2021, there were 0no defaults of TDRs.

Loan modifications generally involve a reduction in interest rates and/or extension of maturity dates and also may include step up interest rates in their modified terms which will impact their weighted average yield in the future. The loans which qualified as TDRs during the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 and 2021, capitalized prior past due amounts and modified the repayment terms.

In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System (the “FRB”) and the Federal Deposit Insurance Corporation (the “FDIC”), issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. The agencies confirmed with the staff of the FASB that short-term modifications, made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, were not to be considered TDRs. This included short-term modifications such as payment deferrals, fee waivers, extension of repayment terms, or other delays in payment that were insignificant. Provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) largely mirrored the provisions of the interagency statement, providing that modified loans were not to be considered TDRs if they were performing at December 31, 2019 and other considerations set forth in the interagency statements were met. Borrowers considered current are those that were less than 30 days past due at the time a modification program was implemented or at December 31, 2019.

~~On December 27, 2020, the 2021 Consolidated Appropriations Act was signed into law. The $900~~ ~~billion relief package included legislation that extended certain relief provisions of the CARES Act that were set to expire on~~ ~~December 31, 2020. The relief expired on January 1, 2022. As of March 31, 2022, the Company did not have any~~ no~~n-TDR loan modifications granted under the CARES Act~~.

Individually Analyzed Loans

~~Effective July 1, 2020, individually analyze~~d

Individually analyzed loans include loans which do not share similar risk characteristics with other loans. TDRs will generally be evaluated for individual impairment, however, after a period of sustained repayment performance which permits the credit to be returned to accrual status, a TDR would generally be removed from individual impairment analysis and returned to its corresponding pool. As of ~~March 31,~~September 30, 2022, the carrying value of individually analyzed loans, including loans acquired with deteriorated credit quality that were individually analyzed, totaled $~~82.7~~$68.6 million, of which $~~65.1~~$62.7 million were considered collateral dependent.

For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the ~~ACL~~allowance for credit losses is measured based on the difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan as of the measurement date. See Note 12 for additional disclosure regarding fair value of individually analyzed collateral dependent loans.

- 1817 -

Index

The following table presents the carrying value and related allowance of collateral dependent individually analyzed loans at the dates indicated:

March 31, 2022

June 30, 2021

Carrying Value

Related Allowance

Carrying Value

Related Allowance

(In Thousands)

Commercial loans:

Multi-family mortgage
$
31,078

$
661

$
18,526

$
1,368

Nonresidential mortgage (1)

27,384

119

32,891

4,724

Commercial business (2)

176

-

183

-

Construction

1,791

-

-

-

Total commercial loans

60,429

780

51,600

6,092

One- to four-family residential mortgage (3)

4,581

196

7,612

420

Consumer loans:

Home equity loans (3)

59

-

31

-

Total
$
65,069

$
976

$
59,243

$
6,512


	September 30, 2022				June 30, 2022
	Carrying Value		Related Allowance		Carrying Value		Related Allowance
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	26,406	$	755	$	26,653	$	849
Nonresidential mortgage (1)	30,985		2,580		30,733		2,696
Commercial business (2)	—		—		—		—
Construction	1,402		—		1,561		—
Total commercial loans	58,793		3,335		58,947		3,545

One- to four-family residential mortgage (3)	3,895		51		4,305		77

Consumer loans:
Home equity loans (3)	35		—		35		—

Total	$	62,723	$	3,386	$	63,287	$	3,622

___________________________

(1)

Secured by income-producing nonresidential property.

(2)

Secured by business assets.

(3)

Secured by one- to four-family residential properties.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk. The Company uses the following definitions for risk ratings:

Pass – Loans that are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.

Special Mention – Loans which do not currently expose the Company to a sufficient degree of risk to warrant an adverse classification but have some credit deficiencies or other potential weaknesses.

Substandard – Loans which are inadequately protected by the paying capacity and net worth of the obligor or the collateral pledged, if any. Substandard assets include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans which have all of the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values.

Loss – Loans which are considered uncollectible or of so little value that their continuance as assets is not warranted.

- 1918 -

Index

The following table presents the risk category of loans as of ~~March 31,~~September 30, 2022 by loan segment and vintage year:

Term Loans by Origination Year for Fiscal Years ended June 30,

2022

2021

2020

2019

2018

Prior

Revolving Loans

Total

(In Thousands)

Multi-family mortgage:

Pass
$
520,269

$
263,316

$
216,072

$
256,541

$
252,909

$
500,758

$
-

$
2,009,865

Special Mention

-

-

-

16,370

4,994

4,759

-

26,123

Substandard

-

-

-

10,182

2,788

27,045

-

40,015

Doubtful

-

-

-

-

-

-

-

-

Total multi-family mortgage

520,269

263,316

216,072

283,093

260,691

532,562

-

2,076,003

Nonresidential mortgage:

Pass

201,205

86,212

64,161

37,706

51,884

569,499

6,087

1,016,754

Special Mention

-

-

-

23,364

4,070

9,249

-

36,683

Substandard

-

724

-

933

0

30,894

-

32,551

Doubtful

-

-

-

-

-

-

-

-

Total nonresidential mortgage

201,205

86,936

64,161

62,003

55,954

609,642

6,087

1,085,988

Commercial business:

Pass

36,918

39,481

12,441

3,961

9,147

7,370

54,513

163,831

Special Mention

-

-

65

189

2,173

895

216

3,538

Substandard

-

39

230

-

1,422

285

58

2,034

Doubtful

-

-

-

-

-

145

3

148

Total commercial business

36,918

39,520

12,736

4,150

12,742

8,695

54,790

169,551

Construction loans:

Pass

7,868

85,564

9,492

3,058

6,513

1,117

5,735

119,347

Special Mention

-

-

-

-

-

-

-

-

Substandard

-

-

-

-

-

1,790

-

1,790

Doubtful

-

-

-

-

-

-

-

-

Total construction loans

7,868

85,564

9,492

3,058

6,513

2,907

5,735

121,137

Residential mortgage:

Pass

312,625

531,111

90,576

53,262

56,834

464,738

375

1,509,521

Special Mention

-

-

-

1,213

-

439

-

1,652

Substandard

-

-

1,704

83

-

15,020

-

16,807

Doubtful

-

-

-

-

-

-

-

-

Total residential mortgage

312,625

531,111

92,280

54,558

56,834

480,197

375

1,527,980

Home equity loans:

Pass

1,759

715

1,744

3,245

2,125

7,552

22,156

39,296

Special Mention

-

-

-

-

-

265

-

265

Substandard

-

-

-

124

-

1,816

-

1,940

Doubtful

-

-

-

-

-

-

-

-

Total home equity loans

1,759

715

1,744

3,369

2,125

9,633

22,156

41,501

Other consumer loans

Pass

281

324

477

398

247

913

40

2,680

Special Mention

-

-

-

-

-

-

-

-

Substandard

-

-

-

-

-

-

0

0

Doubtful

-

-

-

-

-

-

75

75

Other consumer loans

281

324

477

398

247

913

115

2,755

Total loans
$
1,080,925

$
1,007,486

$
396,962

$
410,629

$
395,106

$
1,644,549

$
89,258

$
5,024,915


	Term Loans by Origination Year for Fiscal Years ended June 30,
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
	(In Thousands)
Multi-family mortgage:
Pass	$	229,047	$	960,324	$	244,070	$	206,625	$	258,937	$	638,115	$	—	$	2,537,118
Special Mention	—		—		—		—		—		6,773		—		6,773
Substandard	—		—		—		—		9,667		16,739		—		26,406
Doubtful	—		—		—		—		—		—		—		—
Total multi-family mortgage	229,047		960,324		244,070		206,625		268,604		661,627		—		2,570,297
Nonresidential mortgage:
Pass	53,919		230,708		86,743		53,439		60,353		511,563		6,000		1,002,725
Special Mention	—		—		—		—		—		586		—		586
Substandard	—		—		717		—		933		35,727		—		37,377
Doubtful	—		—		—		—		—		—		—		—
Total nonresidential mortgage	53,919		230,708		87,460		53,439		61,286		547,876		6,000		1,040,688
Commercial business:
Pass	8,035		41,099		37,369		10,214		2,897		10,682		71,005		181,301
Special Mention	—		—		—		58		183		2,960		8		3,209
Substandard	—		—		37		285		—		1,398		131		1,851
Doubtful	—		—		—		—		—		—		—		—
Total commercial business	8,035		41,099		37,406		10,557		3,080		15,040		71,144		186,361
Construction loans:
Pass	1,759		21,598		113,806		11,387		3,019		7,346		5,735		164,650
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		1,402		—		1,402
Doubtful	—		—		—		—		—		—		—		—
Total construction loans	1,759		21,598		113,806		11,387		3,019		8,748		5,735		166,052
Residential mortgage:
Pass	62,773		469,622		515,419		84,535		48,612		472,149		375		1,653,485
Special Mention	—		—		—		—		1,192		499		—		1,691
Substandard	—		—		—		—		82		11,472		—		11,554
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage	62,773		469,622		515,419		84,535		49,886		484,120		375		1,666,730
Home equity loans:
Pass	2,642		2,873		675		1,587		2,843		8,740		22,224		41,584
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		118		1,439		128		1,685
Doubtful	—		—		—		—		—		—		—		—
Total home equity loans	2,642		2,873		675		1,587		2,961		10,179		22,352		43,269
Other consumer loans
Pass	204		346		285		465		357		1,101		35		2,793
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		76		76
Other consumer loans	204		346		285		465		357		1,101		111		2,869
Total loans	$	358,379	$	1,726,570	$	999,121	$	368,595	$	389,193	$	1,728,691	$	105,717	$	5,676,266

- 2019 -

Index

The following table presents the risk category of loans as of June 30, ~~2021~~2022 by loan segment and vintage year:


	Term Loans by Origination Year for Fiscal Years ended June 30,
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
	(In Thousands)
Multi-family mortgage:
Pass	$	963,263	$	250,385	$	211,101	$	264,174	$	248,058	$	438,642	$	—	$	2,375,623
Special Mention	—		—		—		—		—		6,814		—		6,814
Substandard	—		—		—		9,821		5,935		10,897		—		26,653
Doubtful	—		—		—		—		—		—		—		—
Total multi-family mortgage	963,263		250,385		211,101		273,995		253,993		456,353		—		2,409,090
Nonresidential mortgage:
Pass	231,777		87,309		53,983		60,714		49,285		491,849		6,052		980,969
Special Mention	—		—		—		—		—		591		—		591
Substandard	—		720		—		933		4,026		32,599		—		38,278
Doubtful	—		—		—		—		—		—		—		—
Total nonresidential mortgage	231,777		88,029		53,983		61,647		53,311		525,039		6,052		1,019,838
Commercial business:
Pass	46,888		38,791		12,155		3,581		4,861		6,455		58,662		171,393
Special Mention	—		—		62		186		2,173		873		215		3,509
Substandard	—		38		319		—		1,347		61		58		1,823
Doubtful	—		—		—		—		—		80		2		82
Total commercial business	46,888		38,829		12,536		3,767		8,381		7,469		58,937		176,807
Construction loans:
Pass	16,407		95,526		10,337		3,039		6,509		1,017		5,735		138,570
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		1,561		—		1,561
Doubtful	—		—		—		—		—		—		—		—
Total construction loans	16,407		95,526		10,337		3,039		6,509		2,578		5,735		140,131
Residential mortgage:
Pass	472,160		524,163		88,645		49,316		55,139		442,517		374		1,632,314
Special Mention	—		—		—		1,205		—		621		—		1,826
Substandard	—		—		—		83		—		11,593		—		11,676
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage	472,160		524,163		88,645		50,604		55,139		454,731		374		1,645,816
Home equity loans:
Pass	3,197		692		1,681		3,117		2,027		7,321		22,334		40,369
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		120		—		1,539		—		1,659
Doubtful	—		—		—		—		—		—		—		—
Total home equity loans	3,197		692		1,681		3,237		2,027		8,860		22,334		42,028
Other consumer loans
Pass	442		308		471		375		258		895		34		2,783
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		83		83
Other consumer loans	442		308		471		375		258		895		117		2,866
Total loans	$	1,734,134	$	997,932	$	378,754	$	396,664	$	379,618	$	1,455,925	$	93,549	$	5,436,576

- 20 -

Index

Term Loans by Origination Year for Fiscal Years ended June 30,

2021

2020

2019

2018

2017

Prior

Revolving Loans

Total

(In Thousands)

Multi-family mortgage:

Pass
$
281,402

$
257,970

$
374,871

$
341,304

$
343,370

$
374,909

$
-

$
1,973,826

Special Mention

-

-

26,974

5,079

4,834

1,054

-

37,941

Substandard

-

-

-

2,896

13,198

11,399

-

27,493

Doubtful

-

-

-

-

-

-

-

-

Total multi-family mortgage

281,402

257,970

401,845

349,279

361,402

387,362

-

2,039,260

Nonresidential mortgage:

Pass

99,602

77,146

56,435

64,616

254,940

441,696

6,150

1,000,585

Special Mention

-

-

23,520

4,146

8,801

4,513

-

40,980

Substandard

743

-

-

4,934

20,602

11,600

-

37,879

Doubtful

-

-

-

-

-

-

-

-

Total nonresidential mortgage

100,345

77,146

79,955

73,696

284,343

457,809

6,150

1,079,444

Commercial business:

Pass

44,514

18,988

4,701

12,654

3,322

12,892

65,657

162,728

Special Mention

-

-

-

2,304

945

12

461

3,722

Substandard

41

76

160

1,474

132

189

-

2,072

Doubtful

-

-

-

-

-

420

9

429

Total commercial business

44,555

19,064

4,861

16,432

4,399

13,513

66,127

168,951

Construction loans:

Pass

40,332

17,404

11,203

13,860

1,641

1,382

5,735

91,557

Special Mention

-

-

-

-

-

-

-

-

Substandard

-

-

-

-

-

2,247

-

2,247

Doubtful

-

-

-

-

-

-

-

-

Total construction loans

40,332

17,404

11,203

13,860

1,641

3,629

5,735

93,804

Residential mortgage:

Pass

560,543

124,606

69,917

74,754

119,238

472,587

375

1,422,020

Special Mention

-

-

1,233

-

-

712

-

1,945

Substandard

-

1,040

671

511

1,468

20,066

-

23,756

Doubtful

-

-

-

-

-

-

-

-

Total residential mortgage

560,543

125,646

71,821

75,265

120,706

493,365

375

1,447,721

Home equity loans:

Pass

834

2,508

4,585

2,778

2,241

7,798

24,788

45,532

Special Mention

-

-

-

-

-

393

-

393

Substandard

-

-

-

-

11

1,935

-

1,946

Doubtful

-

-

-

-

-

-

-

-

Total home equity loans

834

2,508

4,585

2,778

2,252

10,126

24,788

47,871

Other consumer loans

Pass

550

517

633

256

127

1,044

44

3,171

Special Mention

-

-

-

-

-

-

-

-

Substandard

-

-

-

-

-

-

1

1

Doubtful

-

-

-

-

-

-

87

87

Other consumer loans

550

517

633

256

��
127

1,044

132

3,259

Total loans
$
1,028,561

$
500,255

$
574,903

$
531,566

$
774,870

$
1,366,848

$
103,307

$
4,880,310

~~Residential~~

Mortgage Loans in Foreclosure

The Company may obtain physical possession of one- to four-family real estate collateralizing a residential mortgage loan or nonresidential real estate collateralizing a nonresidential mortgage loan via foreclosure or through an in-substance repossession. As of ~~March 31,~~September 30, 2022, the Company ~~hel~~d 2 ~~single-family properties in~~ ~~other real estate owned with an aggregate carrying value of~~ $~~401,000~~ ~~that were acquired through foreclosure on residential mortgage loans. As of that same date, the Company held~~8 ~~residential mortgage loans with aggregate carrying values totaling $1.6~~ ~~million~~ ~~which were in the process of foreclosure. As of June 30, 2021, the Company~~ held 1one single-family property in other real estate owned with an aggregate carrying value of $~~178,000~~$178,000 that was acquired through a foreclosure on a residential mortgage loan. As of that same date, the Company held 11five residential mortgage loans with aggregate carrying values totaling $~~2.1~~$1.0 million and one nonresidential mortgage loan with a carrying value of $13.3 million which were in the process of foreclosure.

~~New Jersey’s moratorium~~ As of June 30, 2022, the Company held one single-family property in other real estate owned with an aggregate carrying value of $178,000 that was acquired through a foreclosure on ~~evictions ended on December 31, 2021. Under New Jersey’s new eviction protections for people under certain income levels, no evictions may occur now or~~a residential mortgage loan. As of that same date, the Company held seven residential mortgage loans with aggregate carrying values totaling $1.5 million which were in the ~~future based on rent due during the time period~~process of March 1, 2020 through August 31, 2021, for certain moderate income families, or March 1, 2020 through December 31, 2021 for certain low income families. The moratorium on home foreclosures ended on November 15, 2021, for all income levels. This included landlords facing foreclosure who currently have tenants. New York’s moratorium on evictions for tenants who have endured COVID-related hardships and on foreclosures ended on January 15, 2022. As a result, the Company has resumed residential property foreclosure sales and evictions. Eviction laws may be subject to legal challenges and could change based on the results of court proceedings.

foreclosure.

~~- 21 -~~

6. ALLOWANCE FOR CREDIT LOSSES

~~Adoption of Topic 326~~

On July 1, 2020, the Company adopted ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaces the incurred loss methodology with an expected loss methodology, referred to as the “CECL” methodology.

Allowance for Credit Losses on Loans Receivable

The following tables present the balance of the allowance for credit losses at ~~March 31,~~September 30, 2022 and June 30, ~~2021. For the three months and nine months ended March 31, 2022 and 2021, the~~2022. The balance of the allowance for credit losses is based on an expected loss methodology, referred to as the ~~CECL methodology, as noted above.~~“CECL” methodology. The tables identify the valuation allowances attributable to specifically identified impairments on individually ~~evaluated~~analyzed loans, including those acquired with deteriorated credit quality, as well as valuation allowances for impairments on loans ~~evaluated collectively.~~collectively evaluated. The tables include the underlying balance of loans receivable applicable to each category as of those dates.

Allowance for Credit Losses

March 31, 2022

Loans
acquired with
deteriorated
credit quality
individually
analyzed

Loans
acquired with
deteriorated
credit quality
collectively
evaluated

Loans individually
analyzed

Loans collectively
evaluated

Total allowance for credit losses

(In Thousands)

Multi-family mortgage
$
0

$
0

$
1,083

$
23,144

$
24,227

Nonresidential mortgage

0

363

119

8,557

9,039

Commercial business

0

11

6

1,708

1,725

Construction

0

0

0

1,274

1,274

One- to four-family
residential mortgage

0

242

278

6,758

7,278

Home equity loans

22

0

0

214

236

Other consumer

0

0

0

81

81

Total loans
$
22

$
616

$
1,486

$
41,736

$
43,860

Balance of Loans Receivable

March 31, 2022

Loans
acquired with
deteriorated
credit quality
individually
analyzed

Loans
acquired with
deteriorated
credit quality
collectively
evaluated

Loans individually
analyzed

Loans collectively
evaluated

Total loans

(In Thousands)

Multi-family mortgage
$
0

$
0

$
40,015

$
2,035,988

$
2,076,003

Nonresidential mortgage

381

13,179

29,911

1,042,517

1,085,988

Commercial business

176

1,267

317

167,791

169,551

Construction

0

5,735

1,791

113,611

121,137

One- to four-family
residential mortgage

230

6,666

8,386

1,512,698

1,527,980

Home equity loans

342

60

1,147

39,952

41,501

Other consumer

0

0

0

2,755

2,755

Total loans
$
1,129

$
26,907

$
81,567

$
4,915,312

$
5,024,915

Unaccreted yield adjustments

(21,714
)
Loans receivable, net of
yield adjustments

$
5,003,201


	Allowance for Credit Losses September 30, 2022
	Loans acquired with deteriorated credit quality individually analyzed		Loans acquired with deteriorated credit quality collectively evaluated		Loans individually analyzed		Loans collectively evaluated		Total allowance for credit losses
	(In Thousands)
Multi-family mortgage	$	—	$	—	$	755	$	25,491	$	26,246
Nonresidential mortgage	—		68		2,580		6,504		9,152
Commercial business	—		6		5		1,961		1,972
Construction	—		—		—		1,120		1,120
One- to four-family residential mortgage	25		172		164		8,440		8,801
Home equity loans	—		2		—		242		244
Other consumer	—		—		—		78		78
Total loans	$	25	$	248	$	3,504	$	43,836	$	47,613


	Balance of Loans Receivable September 30, 2022
	Loans acquired with deteriorated credit quality individually analyzed		Loans acquired with deteriorated credit quality collectively evaluated		Loans individually analyzed		Loans collectively evaluated		Total loans
	(In Thousands)
Multi-family mortgage	$	—	$	—	$	26,406	$	2,543,891	$	2,570,297
Nonresidential mortgage	364		3,763		30,985		1,005,576		1,040,688
Commercial business	—		1,267		325		184,769		186,361
Construction	—		5,735		1,402		158,915		166,052
One- to four-family residential mortgage	79		5,377		8,925		1,652,349		1,666,730
Home equity loans	26		350		62		42,831		43,269
Other consumer	—		—		—		2,869		2,869
Total loans	$	469	$	16,492	$	68,105	$	5,591,200	$	5,676,266
Unaccreted yield adjustments									(19,896)
Loans receivable, net of yield adjustments									$	5,656,370

- 2221 -

Index

Allowance for Credit Losses

June 30, 2021

Loans
acquired with
deteriorated
credit quality
individually
analyzed

Loans
acquired with
deteriorated
credit quality
collectively
evaluated

Loans individually
analyzed

Loans collectively
evaluated

Total allowance for credit losses

(In Thousands)

Multi-family mortgage
$
0

$
155

$
1,368

$
26,927

$
28,450

Nonresidential mortgage

2,700

692

2,025

10,826

16,243

Commercial business

0

15

33

2,038

2,086

Construction

0

49

0

1,121

1,170

One- to four-family
residential mortgage

122

204

447

8,974

9,747

Home equity loans

21

1

1

410

433

Other consumer

0

0

0

36

36

Total loans
$
2,843

$
1,116

$
3,874

$
50,332

$
58,165

Balance of Loans Receivable

June 30, 2021

Loans
acquired with
deteriorated
credit quality
individually
analyzed

Loans
acquired with
deteriorated
credit quality
collectively
evaluated

Loans individually
analyzed

Loans collectively
evaluated

Total loans

(In Thousands)

Multi-family mortgage
$
0

$
5,599

$
18,526

$
2,015,135

$
2,039,260

Nonresidential mortgage

6,519

25,844

30,668

1,016,413

1,079,444

Commercial business

183

2,533

729

165,506

168,951

Construction

0

12,970

2,228

78,606

93,804

One- to four-family
residential mortgage

3,617

4,785

15,553

1,423,766

1,447,721

Home equity loans

380

65

1,364

46,062

47,871

Other consumer

0

-

0

3,259

3,259

Total loans
$
10,699

$
51,796

$
69,068

$
4,748,747

$
4,880,310

Unaccreted yield adjustments

(28,916
)
Loans receivable, net of
yield adjustments

$
4,851,394

~~- 23 -~~


	Allowance for Credit Losses June 30, 2022
	Loans acquired with deteriorated credit quality individually analyzed		Loans acquired with deteriorated credit quality collectively evaluated		Loans individually analyzed		Loans collectively evaluated		Total allowance for credit losses
	(In Thousands)
Multi-family mortgage	$	—	$	—	$	849	$	24,472	$	25,321
Nonresidential mortgage	—		73		2,696		7,821		10,590
Commercial business	—		9		16		1,767		1,792
Construction	—		—		—		1,486		1,486
One- to four-family residential mortgage	—		229		148		7,163		7,540
Home equity loans	26		—		—		219		245
Other consumer	—		—		—		84		84
Total loans	$	26	$	311	$	3,709	$	43,012	$	47,058


	Balance of Loans Receivable June 30, 2022
	Loans acquired with deteriorated credit quality individually analyzed		Loans acquired with deteriorated credit quality collectively evaluated		Loans individually analyzed		Loans collectively evaluated		Total loans
	(In Thousands)
Multi-family mortgage	$	—	$	—	$	26,653	$	2,382,437	$	2,409,090
Nonresidential mortgage	377		5,033		31,517		982,911		1,019,838
Commercial business	—		1,267		293		175,247		176,807
Construction	—		5,735		1,561		132,835		140,131
One- to four-family residential mortgage	87		6,460		8,402		1,630,867		1,645,816
Home equity loans	329		58		1,102		40,539		42,028
Other consumer	—		—		—		2,866		2,866
Total loans	$	793	$	18,553	$	69,528	$	5,347,702	$	5,436,576
Unaccreted yield adjustments									(18,731)
Loans receivable, net of yield adjustments									$	5,417,845

The following tables present the activity in the allowance for credit losses on loans for the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 and 2021.

Changes in the Allowance for Credit Losses

Three Months Ended March 31, 2022

Balance at
December 31, 2021

Charge-offs

Recoveries

(Reversal of)
provision for
credit losses

Balance at
March 31, 2022

(In Thousands)

Multi-family mortgage
$
25,795

$
0

$
0

$
(1,568
)

$
24,227

Nonresidential mortgage

10,078

(441
)

0

(598
)

9,039

Commercial business

1,903

0

4

(182
)

1,725

Construction

1,441

0

0

(167
)

1,274

One- to four-family
residential mortgage

8,601

0

0

(1,323
)

7,278

Home equity loans

308

0

0

(72
)

236

Other consumer

90

0

1

(10
)

81

Total loans
$
48,216

$
(441
)

$
5

$
(3,920
)

$
43,860

Changes in the Allowance for Credit Losses

Nine Months Ended March 31, 2022

Balance at
June 30, 2021

Charge-offs

Recoveries

(Reversal of)
provision for
credit losses

Balance at
March 31, 2022

(In Thousands)

Multi-family mortgage
$
28,450

$
(104
)

$
0

$
(4,119
)

$
24,227

Nonresidential mortgage

16,243

(2,538
)

0

(4,666
)

9,039

Commercial business

2,086

(175
)

105

(291
)

1,725

Construction

1,170

0

0

104

1,274

One- to four-family
residential mortgage

9,747

0

147

(2,616
)

7,278

Home equity loans

433

0

1

(198
)

236

Other consumer

36

(2
)

1

46

81

Total loans
$
58,165

$
(2,819
)

$
254

$
(11,740
)

$
43,860


	Changes in the Allowance for Credit Losses Three Months Ended September 30, 2022
	Balance at June 30, 2022		Charge-offs		Recoveries		Provision for (reversal of) credit losses		Balance at September 30, 2022
	(In Thousands)
Multi-family mortgage	$	25,321	$	—	$	—	$	925	$	26,246
Nonresidential mortgage	10,590		(10)		—		(1,428)		9,152
Commercial business	1,792		(118)		12		286		1,972
Construction	1,486		—		—		(366)		1,120
One- to four-family residential mortgage	7,540		—		—		1,261		8,801
Home equity loans	245		—		—		(1)		244
Other consumer	84		—		1		(7)		78
Total loans	$	47,058	$	(128)	$	13	$	670	$	47,613

- 2422 -

Index

Changes in the Allowance for Credit Losses

Three Months Ended March 31, 2021

Balance at
December 31, 2020

Charge-offs

Recoveries

(Reversal of)
provision for
credit losses

Balance at
March 31, 2021

(In Thousands)

Multi-family mortgage
$
29,500

$
-

$
-

$
(514
)

$
28,986

Nonresidential mortgage

15,933

(9
)

-

4,053

19,977

Commercial business

3,348

(738
)

2

(86
)

2,526

Construction

1,205

-

-

40

1,245

One- to four-family
residential mortgage

12,625

-

2

(2,249
)

10,378

Home equity loans

725

-

-

(117
)

608

Other consumer

50

(9
)

2

(1
)

42

Total loans
$
63,386

$
(756
)

$
6

$
1,126

$
63,762

Changes in the Allowance for Credit Losses

Nine Months Ended March 31, 2021

Balance at June 30, 2020 (prior to
adoption of ASC 326):

Impact of adopting
Topic 326

Charge-offs

Recoveries

Initial allowance on PCD loans

(Reversal of)
provision for
credit losses

Balance at
March 31, 2021

(In Thousands)

Multi-family mortgage
$
20,916

$
8,408

$
0

$
0

$
250

$
(588
)

$
28,986

Nonresidential mortgage

8,763

2,390

(75
)

0

1,720

7,179

19,977

Commercial business

1,926

(421
)

(802
)

7

1,007

809

2,526

Construction

236

80

0

0

99

830

1,245

One- to four-family
residential mortgage

4,860

9,106

(13
)

2

720

(4,297
)

10,378

Home equity loans

568

92

(32
)

0

105

(125
)

608

Other consumer

58

(15
)

(22
)

9

0

12

42

Total loans
$
37,327

$
19,640

$
(944
)

$
18

$
3,901

$
3,820

$
63,762


	Changes in the Allowance for Credit Losses Three Months Ended September 30, 2021
	Balance at June 30, 2021		Charge-offs		Recoveries		(Reversal of) provision for credit losses		Balance at September 30, 2021
	(In Thousands)
Multi-family mortgage	$	28,450	$	(104)	$	—	$	(3,364)	$	24,982
Nonresidential mortgage	16,243		(813)		—		(1,585)		13,845
Commercial business	2,086		(160)		97		(29)		1,994
Construction	1,170		—		—		260		1,430
One- to four-family residential mortgage	9,747		—		2		(620)		9,129
Home equity loans	433		—		—		(115)		318
Other consumer	36		(2)		—		53		87
Total loans	$	58,165	$	(1,079)	$	99	$	(5,400)	$	51,785

Allowance for Credit Losses on Off Balance Sheet Commitments

The following table presents the activity in the allowance for credit losses on off balance sheet commitments recorded in other non-interest expense for the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 and 2021:

Three Months Ended

Nine Months Ended

March 31,

March 31,

2022

2021

2022

2021

(In Thousands)

(In Thousands)

Balance at beginning of the period
$
1,148

$
1,058

$
1,708

$
-

Impact of adopting Topic 326 (1)

-

-

-

536

(Reversal of) provision for credit losses

(208
)

207

(768
)

729

Balance at end of the period
$
940

$
1,265

$
940

$
1,265

~~(1)~~


	Three Months Ended September 30,
	2022		2021
	(In Thousands)
Balance at beginning of the period	$	1,041	$	1,708
Reversal of credit losses	(288)		(124)
Balance at end of the period	$	753	$	1,584

~~Adoption of CECL accounting standard effective July 1, 2020.~~

7. DEPOSITS

~~- 25 -~~

7~~. DEPOSITS~~

Deposits are summarized as follows:

March 31,

June 30,

2022

2021

(In Thousands)

Non-interest-bearing demand
$
621,954

$
593,718

Interest-bearing demand

2,154,488

1,902,478

Savings

1,088,974

1,111,364

Certificates of deposits

1,663,246

1,877,746

Total deposits
$
5,528,662

$
5,485,306


	September 30, 2022		June 30, 2022
	(In Thousands)
Non-interest-bearing demand	$	683,406	$	653,899
Interest-bearing demand	2,382,411		2,265,597
Savings	982,916		1,053,198
Certificates of deposits	2,059,545		1,889,562
Total deposits	$	6,108,278	$	5,862,256

- 23 -

Index

8. BORROWINGS

Borrowings at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~2022 consisted of the following:


	September 30, 2022		June 30, 2022
	(In Thousands)
FHLB advances	$	796,454	$	651,337
Overnight borrowings (1)	55,000		250,000
Total borrowings	$	851,454	$	901,337

___________________________

(1)

At September 30, 2022 and June 30, 2022, represents FHLB overnight line of credit borrowings.

March 31,

June 30,

2022

2021

(In Thousands)

FHLB advances
$
541,220

$
665,876

Overnight borrowings

310,000

20,000

Total borrowings
$
851,220

$
685,876

Fixed rate advances from the FHLB of New York mature as follows:

March 31, 2022

June 30, 2021

Balance

Weighted
Average
Interest Rate

Balance

Weighted
Average
Interest Rate

(Dollars in Thousands)

By remaining period to maturity:

Less than one year
$
265,000

0.63

%
$
390,000

0.33

%
One to two years

145,000

3.04

145,000

3.04

Two to three years

103,500

2.65

22,500

2.63

Three to four years

29,000

2.77

103,500

2.68

Four to five years

0

0

6,500

2.82

Greater than five years

0

0

0

0

Total advances

542,500

1.77

%

667,500

1.38

%
Unamortized fair value adjustments

(1,280
)

(1,624
)

Total advances, net of fair value adjustments
$
541,220

$
665,876


	September 30, 2022				June 30, 2022
	Balance		Weighted Average Interest Rate		Balance		Weighted Average Interest Rate
	(Dollars in Thousands)
By remaining period to maturity:
Less than one year	$	665,000	3.20	%	$	520,000	2.04	%
One to two years	22,500		2.63		22,500		2.63
Two to three years	103,500		2.68		103,500		2.68
Three to four years	6,500		2.82		6,500		2.82
Four to five years	—		—		—		—
Greater than five years	—		—		—		—
Total advances	797,500		3.11	%	652,500		2.17	%
Unamortized fair value adjustments	(1,046)				(1,163)
Total advances, net of fair value adjustments	$	796,454			$	651,337

At ~~March 31,~~September 30, 2022, FHLB advances ~~were collateralized by the FHLB capital stock owned by the Bank~~ and ~~mortgage loans and securities with carrying values totaling approximately $3.44~~ ~~billion~~ ~~and $155.9~~ ~~million, respectively. At June 30, 2021, FHLB advances~~overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans and securities with carrying values totaling approximately $~~3.27~~$3.88 billion and $~~170.1~~$162.5 million, respectively.

At June 30, 2022, FHLB advances and overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans and securities with carrying values totaling approximately $3.58 billion and $178.0 million, respectively.

- 2624 -

Index

9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

The Company uses various financial instruments, including derivatives, to manage its exposure to interest rate risk. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to specific wholesale funding ~~positions.~~

positions and assets.

Fair Values of Derivative Instruments on the Statement of Financial Condition

The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the ~~Statement~~Statements of Financial Condition as of ~~March 31,~~September 30, 2022 and June 30, ~~2021:~~

March 31, 2022

Asset Derivatives

Liability Derivatives

Location

Fair Value

Location

Fair Value

(In Thousands)

Derivatives designated as hedging instruments:

Interest rate contracts
Other assets

$
34,007

Other liabilities

$
0

Total

$
34,007

$
0

June 30, 2021

Asset Derivatives

Liability Derivatives

Location

Fair Value

Location

Fair Value

(In Thousands)

Derivatives designated as hedging instruments:

Interest rate contracts
Other assets

$
1,832

Other liabilities

$
673

Total

$
1,832

$
673

2022:

September 30, 2022

Asset Derivatives

Liability Derivatives

Location

Fair Value

Location

Fair Value

(In Thousands)

Derivatives designated as hedging instruments:

Interest rate contracts

Other assets

66,511

Other liabilities

—

Total

66,511

—

June 30, 2022

Asset Derivatives

Liability Derivatives

Location

Fair Value

Location

Fair Value

(In Thousands)

Derivatives designated as hedging instruments:

Interest rate contracts

Other assets

41,223

Other liabilities

—

Total

41,223

—

Cash Flow Hedges of Interest Rate Risk

The Company’s ~~objectives in using~~uses derivatives ~~are primarily~~ to add stability to interest expense and interest income and to manage its exposure to interest rate movements. ~~To accomplish this objective, the~~The Company has entered into interest rate swaps, interest rate caps and ~~caps~~an interest rate floor as part of its interest rate risk management strategy. These interest rate products are designated as cash flow hedges. As of ~~March 31,~~September 30, 2022, the Company had a total of 10 interest rate swaps and caps with a total notional amount of $~~790.0~~$875.0 million hedging specific wholesale funding ~~positions.~~

and one interest rate floor with a notional amount of $100.0 million hedging floating-rate available for sale securities.

For derivatives designated as cash flow hedges, the gain or loss on the derivative is recorded in other comprehensive income (loss), net of tax, and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.

~~Amounts~~

For cash flow hedges on the Company’s wholesale funding positions, amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s hedged variable rate wholesale funding positions. During the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022, the Company reclassified $~~1.3~~$1.6 million ~~and $4.3~~ ~~million, respectively,~~ as ~~additional~~a reduction in interest expense. During the next twelve months, the Company estimates that $~~4.6~~$20.6 million will be reclassified as a reduction in interest expense.

For cash flow hedges on the Company’s assets, amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest income as interest payments are received on the Company’s hedged variable rate assets.

- 25 -

Index

The table below presents the pre-tax effects of the Company’s derivative instruments designated as cash flow hedges on the Consolidated Statements of Income for the three months ended September 30, 2022 and ~~nine~~2021:


	Three Months Ended September 30,
	2022		2021
	(In Thousands)
Amount of gain recognized in other comprehensive income	$	22,170	$	154
Amount of gain (loss) reclassified from accumulated other comprehensive income to interest expense	1,620		(1,497)

Fair Value Hedges of Interest Rate Risk

The Company is exposed to changes in the fair value of certain of its fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Such derivatives are used to hedge the changes in fair value of certain of its pools of fixed rate assets. As of September 30, 2022, the Company had one interest rate swap with a notional amount of $150.0 million hedging fixed-rate residential mortgage loans.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

The table below presents the effects of the Company’s derivative instruments designated as fair value hedges on the Consolidated Statements of Income for the three months ended ~~March 31,~~September 30, 2022. There were no fair value hedges for the three months ended September 30, 2021:


	Three Months Ended September 30,
	2022
	(In Thousands)
Loss on hedged items recorded in interest income on loans	$	(4,033)
Gain on hedge recorded in interest income on loans	3,927

As of September 30, 2022, ~~and 2021:~~the following amounts were recorded on the Statement of Financial Condition related to cumulative basis adjustment for fair value hedges. There were no fair value hedges at June 30, 2022:


	September 30, 2022
	(In Thousands)
Loans receivable:
Carrying amount of the hedged assets(1)	$	145,967
Fair value hedging adjustment included in the carrying amount of the hedged assets	(4,033)

(1)

This amount includes the amortized cost basis of the closed portfolio of loans receivable used to designate the hedging relationship in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedge period. At September 30, 2022, the amortized cost basis of the closed portfolio used in this hedging relationship was $272.8 million.

Three Months Ended

Nine Months Ended

March 31,

March 31,

2022

2021

2022

2021

(In Thousands)

(In Thousands)

Amount of gain recognized in other comprehensive income
$
23,343

$
13,075

$
28,607

$
14,353

Amount of loss reclassified from accumulated other comprehensive income
to interest expense

(1,268
)

(1,987
)

(4,271
)

(6,576
)

- 2726 -

Index

Offsetting Derivatives

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives in the Consolidated Statements of Financial Condition as of ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, respectively. The net amounts presented for derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Consolidated Statements of Financial Condition.

March 31, 2022

Gross Amounts Not Offset

Gross Amount Recognized

Gross Amounts Offset

Net Amounts Presented

Financial Instruments

Cash Collateral Received

Net Amount

(In Thousands)

Assets:

Interest rate contracts
$
34,158

$
(151
)

$
34,007

$
-

$
-

$
34,007

Total
$
34,158

$
(151
)

$
34,007

$
-

$
-

$
34,007

Gross Amounts Not Offset

Gross Amount Recognized

Gross Amounts Offset

Net Amounts Presented

Financial Instruments

Cash Collateral Posted

Net Amount

(In Thousands)

Liabilities:

Interest rate contracts
$
151

$
(151
)

$
0

$
-

$
0

$
-

Total
$
151

$
(151
)

$
0

$
-

$
0

$
-

June 30, 2021

Gross Amounts Not Offset

Gross Amount Recognized

Gross Amounts Offset

Net Amounts Presented

Financial Instruments

Cash Collateral Received

Net Amount

(In Thousands)

Assets:

Interest rate contracts
$
6,847

$
(5,015
)

$
1,832

$
-

$
-

$
1,832

Total
$
6,847

$
(5,015
)

$
1,832

$
-

$
-

$
1,832

Gross Amounts Not Offset

Gross Amount Recognized

Gross Amounts Offset

Net Amounts Presented

Financial Instruments

Cash Collateral Posted

Net Amount

(In Thousands)

Liabilities:

Interest rate contracts
$
5,688

$
(5,015
)

$
673

$
-

$
(673
)

$
-

Total
$
5,688

$
(5,015
)

$
673

$
-

$
(673
)

$
-


	September 30, 2022
							Gross Amounts Not Offset
	Gross Amount Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments		Cash Collateral Received		Net Amount
	(In Thousands)
Assets:
Interest rate contracts	$	66,511	$	—	$	66,511	$	—	$	—	$	66,511
Total	$	66,511	$	—	$	66,511	$	—	$	—	$	66,511


	June 30, 2022
							Gross Amounts Not Offset
	Gross Amount Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments		Cash Collateral Received		Net Amount
	(In Thousands)
Assets:
Interest rate contracts	$	41,223	$	—	$	41,223	$	—	$	—	$	41,223
Total	$	41,223	$	—	$	41,223	$	—	$	—	$	41,223

Credit Risk-Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations and could be required to terminate its derivative positions with the counterparty. The Company also has agreements with its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well-capitalized institution, then the Company could be required to terminate its derivative positions with the counterparty. At ~~March 31,~~September 30, 2022, 0nenone of the Company’s derivatives were in a net liability position. As required under the enforceable master netting arrangement with its derivatives counterparties, at ~~March 31,~~September 30, 2022, the Company was not required to post financial collateral.

In addition to the derivative instruments noted above, the Company’s pipeline of loans held for sale at ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, included $~~16.0~~$12.8 million and $~~48.4~~$20.3 million, respectively, of in process loans whose terms included interest rate locks to borrowers, which are considered free-standing derivative instruments whose fair values are not material to the Company’s financial condition or results of operations.

- 2827 -

Index

10. BENEFIT PLANS

Components of Net Periodic Expense

The following table sets forth the aggregate net periodic benefit expense for the Bank’s Benefit Equalization Plan, Postretirement Welfare Plan, Directors’ Consultation and Retirement Plan, ~~and~~ Atlas Bank Retirement Income Plan and Supplemental Executive Retirement Plan:

Three Months Ended

Nine Months Ended

Affected Line Item in the Consolidated

March 31,

March 31,

Statements of Income

2022

2021

2022

2021

(In Thousands)

(In Thousands)

Service cost
$
29

$
26

$
87

$
79

Salaries and employee benefits
Interest cost

67

66

205

197

Other expense
Amortization of unrecognized loss

20

20

60

62

Other expense
Expected return on assets

(27
)

(28
)

(83
)

(85
)

Other expense
Net periodic benefit cost
$
89

$
84

$
269

$
253


	Three Months Ended September 30,				Affected Line Item in the Consolidated Statements of Income
	2022		2021
	(In Thousands)
Service cost	$	117	$	138		Salaries and employee benefits
Interest cost	96		69			Other expense
Amortization of unrecognized (gain) loss	(6)		20			Other expense
Expected return on assets	(25)		(28)			Other expense
Net periodic benefit cost	$	182	$	199

2021 Equity Incentive Plan

At the Company’s 2021 Annual Meeting of Stockholders held on October 28, 2021, the stockholders approved the Kearny Financial Corp. 2021 Equity Incentive Plan (“2021 Plan”) which provides for the grant of stock options, restricted stock and restricted stock units (~~“RSUs”). The 2021 Plan authorized the issuance of up to~~ ~~7,500,000~~ shares (the “Share Limit”); provided, however that the Share Limit is reduced, on a one-for-one-basis, for each share of common stock subject to a stock option grant, and on a three-for-one basis for each share of common stock issued pursuant to restricted stock awards or RSUs.

During the ~~quarter~~three months ended ~~March 31,~~September 30, 2022, the Company granted ~~251,905~~ ~~RSUs~~323,218 restricted stock units (“RSUs”) comprised of ~~181,588~~238,121 service-based RSUs and ~~70,317~~85,097 performance-based RSUs. The service-based RSUs will vest in three tranches over a period of ~~2.6~~three years and the performance-based RSUs will cliff vest upon the achievement of performance measures over the three-year period ending June 30, ~~2024.~~2025. The ~~total~~ number of performance-based RSUs that will vest, if any, will depend on whether, and to what extent, the performance measures are achieved. Common stock will be issued from authorized shares upon the vesting of the RSUs.

11. INCOME TAXES

The following table presents a reconciliation between the reported income taxes for the periods presented and the income taxes which would be computed by applying the federal income tax rate of 21%21% to income for the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 and 2021:

Three Months Ended

Nine Months Ended

March 31,

March 31,

2022

2021

2022

2021

(Dollars in Thousands)

(Dollars in Thousands)

Income before income taxes
$
24,215

$
22,155

$
76,772

$
58,980

Statutory federal tax rate

21
%

21
%

21
%

21
%
Federal income tax expense at statutory rate
$
5,085

$
4,653

$
16,122

$
12,386

(Reduction) increase in income taxes resulting from:

Tax exempt interest

(66
)

(85
)

(204
)

(270
)
State tax, net of federal tax effect

1,908

1,498

6,026

3,738

Incentive stock option compensation expense

3

23

42

63

Income from bank-owned life insurance

(317
)

(324
)

(973
)

(989
)
Non-deductible merger-related expenses

0

0

0

49

Bargain purchase gain

0

0

0

(641
)
Other items, net

(91
)

(21
)

(418
)

429

$
6,522

$
5,744

$
20,595

$
14,765

Reversal of valuation allowance

0

(12
)

0

(535
)
Total income tax expense
$
6,522

$
5,732

$
20,595

$
14,230

Effective income tax rate

26.93
%

25.87
%

26.83
%

24.13
%


	Three Months Ended September 30,
	2022			2021
	(Dollars in Thousands)
Income before income taxes	$	21,790		$	26,987
Statutory federal tax rate	21		%	21		%
Federal income tax expense at statutory rate	$	4,576		$	5,667
(Reduction) increase in income taxes resulting from:
Tax exempt interest	(59)			(70)
State tax, net of federal tax effect	1,420			2,128
Incentive stock option compensation expense	3			23
Income from bank-owned life insurance	(775)			(328)


Other items, net	90			(148)


Total income tax expense	$	5,255		$	7,272
Effective income tax rate	24.12		%	26.95		%

- 2928 -

Index

12. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:


	Level 1:		Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2:		Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability or inputs that are derived principally from, or corroborated by, market data by correlation or other means.

Level 3:		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Assets Measured on a Recurring Basis:

The following methods and significant assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis at ~~March 31,~~September 30, 2022 and June 30, ~~2021:~~

2022:

Investment Securities Available for Sale

The Company’s available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things. From time to time, the Company validates prices supplied by the independent pricing service by comparison to prices obtained from third-party sources or derived using internal models.

Derivatives

The Company has contracted with a third party vendor to provide periodic valuations for its interest rate derivatives to determine the fair value of its interest rate caps and swaps. The vendor utilizes standard valuation methodologies applicable to interest rate derivatives such as discounted cash flow analysis and extensions of the Black-Scholes model. Such valuations are based upon readily observable market data and are therefore considered Level 2 valuations by the Company.

- 3029 -

Index

Those assets measured at fair value on a recurring basis are summarized below:

March 31, 2022

Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

(In Thousands)

Assets:

Debt securities available for sale:

Obligations of state and political subdivisions
$
-

$
31,078

$
-

$
31,078

Asset-backed securities

-

229,584

-

229,584

Collateralized loan obligations

-

311,620

-

311,620

Corporate bonds

-

153,495

-

153,495

Total debt securities

-

725,777

-

725,777

Mortgage-backed securities available for sale:

Collateralized mortgage obligations

-

7,996

-

7,996

Residential pass-through securities

-

570,150

-

570,150

Commercial pass-through securities

-

222,163

-

222,163

Total mortgage-backed securities

-

800,309

-

800,309

Total securities available for sale
$
-

$
1,526,086

$
-

$
1,526,086

Interest rate contracts
$
-

$
34,007

$
-

$
34,007

Total assets
$
-

$
1,560,093

$
-

$
1,560,093


	September 30, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In Thousands)
Assets:
Debt securities available for sale:
Obligations of state and political subdivisions	$	—	$	27,458	$	—	$	27,458
Asset-backed securities	—		158,081		—		158,081
Collateralized loan obligations	—		302,847		—		302,847
Corporate bonds	—		145,613		—		145,613
Total debt securities	—		633,999		—		633,999

Mortgage-backed securities available for sale:
Collateralized mortgage obligations	—		6,318		—		6,318
Residential pass-through securities	—		468,089		—		468,089
Commercial pass-through securities	—		154,770		—		154,770
Total mortgage-backed securities	—		629,177		—		629,177
Total securities available for sale	$	—	$	1,263,176	$	—	$	1,263,176

Interest rate contracts	$	—	$	66,511	$	—	$	66,511

Total assets	$	—	$	1,329,687	$	—	$	1,329,687


	June 30, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In Thousands)
Assets:
Debt securities available for sale:
Obligations of state and political subdivisions	$	—	$	28,435	$	—	$	28,435
Asset-backed securities	—		166,557		—		166,557
Collateralized loan obligations	—		307,813		—		307,813
Corporate bonds	—		153,397		—		153,397
Total debt securities	—		656,202		—		656,202

Mortgage-backed securities available for sale:
Collateralized mortgage obligations	—		7,122		—		7,122
Residential pass-through securities	—		514,758		—		514,758
Commercial pass-through securities	—		166,011		—		166,011
Total mortgage-backed securities	—		687,891		—		687,891
Total securities available for sale	$	—	$	1,344,093	$	—	$	1,344,093

Interest rate contracts	$	—	$	41,223	$	—	$	41,223

Total assets	$	—	$	1,385,316	$	—	$	1,385,316

- 3130 -

Index

June 30, 2021

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

(In Thousands)

Assets:

Debt securities available for sale:

Obligations of state and political subdivisions
$
-

$
34,603

$
-

$
34,603

Asset-backed securities

-

242,989

-

242,989

Collateralized loan obligations

-

189,880

-

189,880

Corporate bonds

-

158,351

-

158,351

Total debt securities

-

625,823

-

625,823

Mortgage-backed securities available for sale:

Collateralized mortgage obligations

-

13,739

-

13,739

Residential pass-through securities

-

744,491

-

744,491

Commercial pass-through securities

-

292,811

-

292,811

Total mortgage-backed securities

-

1,051,041

-

1,051,041

Total securities available for sale
$
-

$
1,676,864

$
-

$
1,676,864

Interest rate contracts
$
-

$
1,832

$
-

$
1,832

Total assets
$
-

$
1,678,696

$
-

$
1,678,696

Liabilities:

Interest rate contracts
$
-

$
673

$
-

$
673

Total liabilities
$
-

$
673

$
-

$
673

Assets Measured on a Non-Recurring Basis:

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a non-recurring basis at ~~March 31,~~September 30, 2022 and June 30, ~~2021:~~

2022:

Individually Analyzed Collateral Dependent ~~Individually Analyzed~~ Loans

The fair value of collateral dependent loans that are individually analyzed is determined based upon the appraised fair value of the underlying collateral, less costs to sell. Such collateral primarily consists of real estate and, to a lesser extent, other business assets. Management may also adjust appraised values to reflect estimated changes in market values or apply other adjustments to appraised values resulting from its knowledge of the collateral. Internal valuations may be utilized to determine the fair value of other business assets. For non-collateral-dependent loans, management estimates fair value using discounted cash flows based on inputs that are largely unobservable and instead reflect management’s own estimates of the assumptions as a market participant would in pricing such loans. ~~Collateral~~Individually analyzed collateral dependent ~~individually analyzed~~ loans are considered a Level 3 valuation by the Company.

~~- 32 -~~

Other Real Estate Owned

Other real estate owned is recorded at estimated fair value, less estimated selling costs when acquired, thus establishing a new cost basis. Fair value is generally based on independent appraisals. These appraisals include adjustments to comparable assets based on the appraisers’ market knowledge and experience. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for credit losses. If further declines in the estimated fair value of the asset occur, a write-down is recorded through expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in economic conditions.

Those assets measured at fair value on a non-recurring basis are summarized below:

March 31, 2022

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

(In Thousands)

Collateral dependent loans:

Residential mortgage
$
-

$
-

$
2,239

$
2,239

Multi-family mortgage

-

-

4,558

4,558

Nonresidential mortgage

-

-

5,799

5,799

Total
$
-

$
-

$
12,596

$
12,596

Other real estate owned, net:

Residential
$
-

$
-

$
401

$
401

Total
$
-

$
-

$
401

$
401

June 30, 2021

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

(In Thousands)

Collateral dependent loans:

Residential mortgage
$
-

$
-

$
3,051

$
3,051

Multi-family mortgage

6,932

6,932

Nonresidential mortgage

-

-

8,679

8,679

Total
$
-

$
-

$
18,662

$
18,662

Other real estate owned, net:

Residential
$
-

$
-

$
178

$
178

Total
$
-

$
-

$
178

$
178


	September 30, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In Thousands)
Collateral dependent loans:
Residential mortgage	$	—	$	—	$	2,033	$	2,033
Multi-family mortgage	—		—		7,562		7,562
Nonresidential mortgage	—		—		10,934		10,934
Total	$	—	$	—	$	20,529	$	20,529

Other real estate owned, net:
Residential	$	—	$	—	$	178	$	178
Total	$	—	$	—	$	178	$	178


	June 30, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In Thousands)
Collateral dependent loans:
Residential mortgage	$	—	$	—	$	2,035	$	2,035
Multi-family mortgage	—		—		7,517		7,517
Nonresidential mortgage	—		—		11,479		11,479
Total	$	—	$	—	$	21,031	$	21,031

Other real estate owned, net:
Residential	$	—	$	—	$	178	$	178
Total	$	—	$	—	$	178	$	178

- 3331 -

Index

The following ~~table presents~~tables present additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized adjusted Level 3 inputs to determine fair value:


	September 30, 2022
	Fair Value		Valuation Techniques		Unobservable Input		Range	Weighted Average
	(Dollars in Thousands)
Collateral dependent loans:
Residential mortgage	$	2,033	Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	7% - 10%	9.05	%
Multi-family mortgage	7,562		Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	10% - 11%	10.66	%
Nonresidential mortgage	10,934		Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	9% - 19%	14.28	%
Total	$	20,529

Other real estate owned, net:
Residential	$	178	Market valuation of underlying collateral	(3)	Adjustments to reflect current conditions/selling costs	(2)	6.00%	6.00	%
Total	$	178


	June 30, 2022
	Fair Value		Valuation Techniques		Unobservable Input		Range	Weighted Average
	(Dollars in Thousands)
Collateral dependent loans:
Residential mortgage	$	2,035	Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	7% - 10%	8.97	%
Multi-family mortgage	7,517		Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	10% - 12%	11.06	%
Nonresidential mortgage	11,479		Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	9% - 18%	12.72	%
Total	$	21,031

Other real estate owned, net:
Residential	$	178	Market valuation of underlying collateral	(3)	Adjustments to reflect current conditions/selling costs	(2)	6.00%	6.00	%
Total	$	178

March 31, 2022

Fair
Value

Valuation
Techniques

Unobservable
Input

Range

Weighted
Average

(Dollars in Thousands)

Collateral dependent loans:

Residential mortgage
$
2,239

Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
7% - 14%

10.39
%
Multi-family mortgage

4,558

Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
10% - 11%

10.60
%
Nonresidential mortgage

5,799

Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
9% - 19%

14.97
%
Total
$
12,596

Other real estate owned, net:

Residential
$
401

Market valuation of underlying collateral
(3)
Adjustments to reflect current conditions/selling costs
(2)
5% - 6%

5.44
%
Total
$
401

June 30, 2021

Fair
Value

Valuation
Techniques

Unobservable
Input

Range

Weighted
Average

(Dollars in Thousands)

Collateral dependent loans:

Residential mortgage
$
3,051

Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
7% - 13%

9.77
%
Multi-family mortgage

6,932

Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
10% - 11%

10.39
%
Nonresidential mortgage

8,679

Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
9% - 16%

14.48
%
Total
$
18,662

Other real estate owned, net:

Residential
$
178

Market valuation of underlying collateral
(3)
Adjustments to reflect current conditions/selling costs
(2)
6.00%

6.00
%
Total
$
178

(1)

The fair value of collateral dependent ~~individually analyzed~~ loans is generally determined based on an independent appraisal of the fair value of a loan’s underlying collateral.

(2)

The fair value basis of collateral dependent ~~individually analyzed~~ loans and other real estate owned is adjusted to reflect management’s estimates of selling costs including, but not ~~necessarily~~ limited to, real estate brokerage commissions and title transfer fees.

(3)

The fair value of other real estate owned is generally determined based upon the lower of an independent appraisal of the property’s fair value or the applicable listing price or contracted sales price.

~~- 34 -~~

At ~~March 31,~~September 30, 2022, collateral dependent loans valued using Level 3 inputs comprised loans with principal balance totaling $~~13.6~~$23.9 million and valuation ~~allowances~~allowance of $~~976,000~~$3.4 million reflecting an aggregate fair ~~values~~value of $~~12.6~~$20.5 million. By comparison, at June 30, ~~2021,~~2022, collateral dependent loans valued using Level 3 inputs comprised loans with principal balance totaling $~~25.2~~$24.6 million and valuation ~~allowances~~allowance of $~~6.5~~$3.6 million reflecting an aggregate fair ~~values~~value of $~~18.7~~$21.0 million.

Once a loan is foreclosed, the fair value of the other real estate owned continues to be evaluated based upon the fair value of the repossessed real estate originally securing the loan. At ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, the Company held other real estate owned totaling $~~401,000~~ an~~d $178,000~~,$178,000, respectively, whose carrying value was written down utilizing Level 3 inputs.

- 32 -

Index

The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of ~~March 31,~~September 30, 2022 and June 30, ~~2021:~~

March 31, 2022

Carrying
Amount

Fair
Value

Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

(In Thousands)

Financial assets:

Cash and cash equivalents
$
62,379

$
62,379

$
62,379

$
-

$
-

Investment securities available for sale

1,526,086

1,526,086

-

1,526,086

-

Investment securities held to maturity

121,853

117,017

-

117,017

-

Loans held-for-sale

2,822

2,759

-

2,759

-

Net loans receivable

4,959,341

4,877,212

-

-

4,877,212

FHLB Stock

30,997

-

-

-

-

Interest receivable

19,517

19,517

3

5,311

14,203

Interest rate contracts

34,007

34,007

-

34,007

-

Financial liabilities:

Deposits

5,528,662

5,515,560

3,865,416

-

1,650,144

Borrowings

851,220

853,824

-

-

853,824

Interest payable on deposits

164

164

79

-

85

Interest payable on borrowings

1,365

1,365

-

-

1,365

2022:


	September 30, 2022
	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	96,076	$	96,076	$	96,076	$	—	$	—
Investment securities available for sale	1,263,176		1,263,176		—		1,263,176		—
Investment securities held to maturity	115,943		99,548		—		99,548		—
Loans held-for-sale	12,936		12,772		—		12,772		—
Net loans receivable	5,608,757		5,308,136		—		—		5,308,136
FHLB Stock	44,957		—		—		—		—
Interest receivable	23,817		23,817		24		7,215		16,578
Interest rate contracts	66,511		66,511		—		66,511		—

Financial liabilities:
Deposits	6,108,278		6,068,334		4,048,733		—		2,019,601
Borrowings	851,454		847,489		—		—		847,489
Interest payable on deposits	3,130		3,130		588		—		2,542
Interest payable on borrowings	2,182		2,182		—		—		2,182
Interest rate contracts	—		—		—		—		—


	June 30, 2022
	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	101,615	$	101,615	$	101,615	$	—	$	—
Investment securities available for sale	1,344,093		1,344,093		—		1,344,093		—
Investment securities held to maturity	118,291		108,118		—		108,118		—
Loans held-for-sale	28,874		28,831		—		28,831		—
Net loans receivable	5,370,787		5,215,079		—		—		5,215,079
FHLB Stock	47,144		—		—		—		—
Interest receivable	20,466		20,466		2		5,210		15,254
Interest rate contracts	41,223		41,223		—		41,223		—

Financial liabilities:
Deposits	5,862,256		5,839,035		3,972,694		—		1,866,341
Borrowings	901,337		900,505		—		—		900,505
Interest payable on deposits	722		722		147		—		575
Interest payable on borrowings	1,611		1,611		—		—		1,611

- 3533 -

Index

June 30, 2021

Carrying
Amount

Fair
Value

Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

(In Thousands)

Financial assets:

Cash and cash equivalents
$
67,855

$
67,855

$
67,855

$
-

$
-

Investment securities available for sale

1,676,864

1,676,864

-

1,676,864

-

Investment securities held to maturity

38,138

39,610

-

39,610

-

Loans held-for-sale

16,492

16,934

-

16,934

-

Net loans receivable

4,793,229

4,830,136

-

-

4,830,136

FHLB Stock

36,615

-

-

-

-

Interest receivable

19,362

19,362

1

4,238

15,123

Interest rate contracts

1,832

1,832

-

1,832

-

Financial liabilities:

Deposits

5,485,306

5,490,923

3,607,560

-

1,883,363

Borrowings

685,876

701,419

-

-

701,419

Interest payable on deposits

145

145

96

-

49

Interest payable on borrowings

1,335

1,335

-

-

1,335

Interest rate contracts

673

673

-

673

-

Commitments. The fair value of commitments to fund credit lines and originate or participate in loans held in portfolio or loans held for sale is estimated using fees currently charged to enter into similar agreements taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, including those relating to loans held for sale that are considered derivative instruments for financial statement reporting purposes, the fair value also considers the difference between current levels of interest and the committed rates. The carrying value, represented by the net deferred fee arising from the unrecognized commitment, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into similar agreements with similar credit risk, is not considered material for disclosure.

Limitations. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument. Because no fair value exists for a significant portion of the financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature, involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to value anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets and liabilities include premises and equipment, and advances from borrowers for taxes and insurance. In addition, the ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

Finally, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.

~~- 36 -~~

13. COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive ~~(loss) income~~loss included in stockholders’ equity at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~2022 are as follows:


	September 30, 2022		June 30, 2022
	(In Thousands)
Net unrealized loss on securities available for sale	$	(167,396)	$	(118,031)
Tax effect	48,290		34,104
Net of tax amount	(119,106)		(83,927)

Fair value adjustments on derivatives	60,355		39,805
Tax effect	(17,502)		(11,542)
Net of tax amount	42,853		28,263

Benefit plan adjustments	(122)		(89)
Tax effect	35		26
Net of tax amount	(87)		(63)

Total accumulated other comprehensive loss	$	(76,340)	$	(55,727)

- 34 -

Index

March 31,

June 30,

2022

2021

(In Thousands)

Net unrealized (loss) gain on securities available for sale
$
(63,988
)

$
10,011

Tax effect

18,760

(2,882
)
Net of tax amount

(45,228
)

7,129

Fair value adjustments on derivatives

32,566

(312
)
Tax effect

(9,557
)

94

Net of tax amount

23,009

(218
)

Benefit plan adjustments

(1,033
)

(1,093
)
Tax effect

303

326

Net of tax amount

(730
)

(767
)

Total accumulated other comprehensive (loss) income
$
(22,949
)

$
6,144

Other comprehensive ~~(loss) income~~loss and related tax effects for the three months ~~and nine months~~ ended ~~March 31,~~September 30, 2022 and 2021 are presented in the following table:


	Three Months Ended September 30,
	2022		2021
	(In Thousands)
Net unrealized holding loss on securities available for sale	$	(49,365)	$	(7,046)

Net realized gain on sale and call of securities available for sale (1)	—		(1)

Fair value adjustments on derivatives	20,550		1,651

(Accretion) amortization of benefit plan net actuarial (gain) loss	(33)		20

Other comprehensive loss before taxes	(28,848)		(5,376)
Tax effect	8,235		1,568
Total other comprehensive loss	$	(20,613)	$	(3,808)

___________________________________

Three Months Ended

Nine Months Ended

March 31,

March 31,

2022

2021

2022

2021

(In Thousands)

Net unrealized holding loss on securities
available for sale
$
(59,249
)

$
(22,285
)

$
(73,995
)

$
(20,374
)

Net realized gain on sale and call of securities
available for sale (1)

(3
)

(18
)

(4
)

(454
)

Fair value adjustments on derivatives

24,611

15,062

32,878

20,929

Amortization of benefit plan net actuarial loss

20

20

60

62

Other comprehensive (loss) income before taxes

(34,621
)

(7,221
)

(41,061
)

163

Tax effect

10,098

2,125

11,968

(63
)
Total other comprehensive (loss) income
$
(24,523
)

$
(5,096
)

$
(29,093
)

$
100

(1)

Represents amounts reclassified out of accumulated other comprehensive income and included in gain on sale of securities on the ~~consolidated statements~~Consolidated Statements of ~~income.~~Income.

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

The following schedule shows the Company’s earnings per share calculations for the periods presented:

Three Months Ended March 31,

Nine Months Ended March 31,

2022

2021

2022

2021

(In Thousands, Except Per Share Data)

Net income
$
17,693

$
16,423

$
56,177

$
44,750

Weighted average number of common shares
outstanding - basic

69,790

80,673

72,130

83,958

Effect of dilutive securities

27

17

24

3

Weighted average number of common shares
outstanding - diluted

69,817

80,690

72,154

83,961

Basic earnings per share
$
0.25

$
0.20

$
0.78

$
0.53

Diluted earnings per share
$
0.25

$
0.20

$
0.78

$
0.53


	Three Months Ended September 30,
	2022		2021
	(In Thousands, Except Per Share Data)
Net income	$	16,535	$	19,715

Weighted average number of common shares outstanding - basic	65,737		74,537
Effect of dilutive securities	19		19
Weighted average number of common shares outstanding - diluted	65,756		74,556

Basic earnings per share	$	0.25	$	0.26
Diluted earnings per share	$	0.25	$	0.26

Stock ~~option~~soptions for 2,965,000 and 3,115,000 ~~and3,253,040~~ shares of common stock were not considered in computing diluted earnings per share ~~at March 31,~~for the three months ended September 30, 2022 and ~~March 31,~~ 2021, respectively, because ~~the stock options~~they were considered anti-dilutive. In addition,~~251,905~~ 323,218 RSUs were not considered in computing diluted earnings per share ~~at March 31,~~for the three months ended September 30, 2022 because ~~the RSUs~~they were considered anti-dilutive.

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q may include certain forward-looking statements based on current management expectations. Such forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may”, “will”, “believe”, “expect”, “estimate”, “anticipate”, “continue”, or similar terms or variations on those terms, or the negative of those terms. The actual results of the Company could differ materially from those management expectations. This includes statements regarding general economic conditions, public health crisis such as the governmental, social and economic effects of the novel coronavirus, legislative and regulatory changes, monetary and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities and failure to integrate or profitably operate acquired businesses. Additional potential factors include changes in interest rates, the rate of inflation, deposit flows, cost of funds, demand for loan products and financial services, competition and changes in the quality or composition of loan and investment portfolios of the Company. Other factors that could cause future results to vary from current management expectations include changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and prices. Further description of the risks and uncertainties to the business are included in the Company’s other filings with the Securities and Exchange Commission.

In addition, the COVID-19 pandemic has had, and may continue to have, an adverse impact on the Company, its clients and the communities it serves. Given its ~~ongoing and~~ dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including whether the coronavirus can continue to be controlled and abated. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy worsens, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for credit losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; due to a decline in our stock price or other factors, goodwill may become impaired and be required to be written down; and our cyber security risks are increased as the result of an increase in the number of employees working remotely. Reference is made to Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended June 30, ~~2021.~~

2022.

Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies

Our accounting policies are integral to understanding the results reported. We consider accounting policies that require management to exercise significant judgment or discretion or to make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. At ~~March 31,~~September 30, 2022, we consider the determination of the allowance for credit losses on loans, individually evaluating loans, calculating the allowance of credit losses on acquired loans, accounting for business combinations and the valuation of goodwill and identifiable intangible assetsthere have been no material changes to be our critical accounting ~~policies.~~policies as compared to the critical accounting policies disclosed in our most recent Annual Report on Form 10-K. Reference is made to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended June 30, ~~2021, for a description of the Company’s critical accounting policies.~~

~~- 39 -~~

2022.

Comparison of Financial Condition at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~

2022

Executive Summary. Total assets increased ~~$106.2~~$169.7 million to ~~$7.39~~$7.89 billion at ~~March 31,~~September 30, 2022 from ~~$7.28~~$7.72 billion at June 30, ~~2021~~.2022. The increase primarily reflected an increase in net loans receivable, partially offset by a decrease in investment securities.

Investment Securities. Investment securities available for sale decreased ~~$150.8~~$80.9 million to ~~$1.53~~$1.26 billion at ~~March 31,~~September 30, 2022, from ~~$1.68~~$1.34 billion at June 30, ~~2021.~~ 2022. This decrease was largely the result of ~~principal repayments of $280.5 million and~~ a fair value decrease of ~~$74.0~~$49.4 million ~~partially offset by security purchases~~and principal repayments of ~~$206.1~~$31.3 million.

Investment securities held to maturity ~~increased $83.7~~decreased $2.3 million to ~~$121.9~~$115.9 million at ~~March 31,~~September 30, 2022 from ~~$38.1~~$118.3 million at June 30, ~~2021.~~2022. This ~~increase~~decrease was ~~largely~~ the result of ~~security purchases of $86.4 million, partially offset by~~ principal repayments of ~~$2.6~~$2.3 million.

Additional information regarding our investment securities at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~2022 is presented in Note 4 to the unaudited consolidated financial statements.

Loans Held-for-Sale. Loans held-for-sale totaled ~~$2.8~~$12.9 million at ~~March 31,~~September 30, 2022 as compared to ~~$16.5~~$28.9 million at June 30, ~~2021~~2022 and are reported separately from the balance of net loans ~~receivable~~.receivable. During the ~~nine~~three months ended ~~March 31,~~September 30, 2022, ~~$165.5~~we sold $42.5 million of residential mortgage loans, ~~were sold,~~ resulting in a gain on sale of ~~$2.3 million.~~$312,000, and $14.3 million of commercial mortgage loans, resulting in a net gain on sale of $28,000.

Net Loans Receivable. Net loans receivable increased ~~$166.1~~$238.0 million, or ~~3.5%~~4.4%, to ~~$4.96~~$5.61 billion at ~~March 31,~~September 30, 2022 from ~~$4.79~~$5.37 billion at June 30, ~~2021. Detail~~2022. Details regarding the change in the loan portfolio, by loan segment, is presented below:

March 31,

June 30,

Increase/

2022

2021

(Decrease)

(In Thousands)

Commercial loans:

Multi-family mortgage
$
2,076,003

$
2,039,260

$
36,743

Nonresidential mortgage

1,085,988

1,079,444

6,544

Commercial business

169,551

168,951

600

Construction

121,137

93,804

27,333

Total commercial loans

3,452,679

3,381,459

71,220

One- to four-family residential mortgage

1,527,980

1,447,721

80,259

Consumer loans:

Home equity loans

41,501

47,871

(6,370
)
Other consumer

2,755

3,259

(504
)
Total consumer loans

44,256

51,130

(6,874
)

Total loans

5,024,915

4,880,310

144,605

Unaccreted yield adjustments

(21,714
)

(28,916
)

7,202

Allowance for credit losses

(43,860
)

(58,165
)

14,305

Net loans receivable
$
4,959,341

$
4,793,229

$
166,112

Commercial loan origination volume for the ~~nine~~three months ended ~~March 31,~~September 30, 2022 totaled ~~$834.0~~$341.1 million, comprised of ~~$667.1~~$282.9 million of commercial mortgage loan originations, ~~$105.5~~$31.9 million of commercial business loan originations and construction loan disbursements of ~~$61.4~~$26.3 million. Co~~mmercial loan origination volume was augmented with the funding of purchased commercial mortgage loans totaling $55.8 million.~~

One- to four-family residential mortgage loan origination volume, ~~for the nine months ended March 31, 2022,~~ excluding loans held-for-sale, ~~totaled $262.7~~totaled $63.8 million andfor the three months ended September 30, 2022 and was ~~augmented~~supplemented with the ~~funding~~purchase of ~~purchased~~ loans ~~totaling $56.5 million.~~totaling $656,000. Home equity loan and line of credit origination volume for the same period ~~totaled $13.5~~totaled $6.9 million.

~~- 40 -~~

Loan-to-value (“(“LTV”) ratios are based on current period loan balances and original appraised values at the time of origination unless a current appraisal has been obtained as a result of the loan being deemed collateral dependent and individually ~~analyzed~~.analyzed. The following table sets forth the composition of our real estate secured loans indicating the LTV, by loan category, at ~~March 31,~~September 30, 2022 and June 30, ~~2021:~~2022:


	September 30, 2022				June 30, 2022
	Balance		LTV		Balance		LTV
	(Dollars in Thousands)
Commercial mortgage loans:
Multi-family mortgage	$	2,570,297	64	%	$	2,409,090	64	%
Nonresidential mortgage	1,040,688		54		1,019,838		54
Construction	166,052		61		140,131		61
Total commercial mortgage loans	3,777,037		61		3,569,059		61

One- to four-family residential mortgage	1,666,730		62		1,645,816		62

Consumer loans:
Home equity loans	43,269		47		42,028		46

Total mortgage loans	$	5,487,036	61	%	$	5,256,903	61	%

Index

March 31, 2022

June 30, 2021

Balance

LTV

Balance

LTV

(Dollars in Thousands)

Commercial mortgage loans:

Multi-family mortgage
$
2,076,003

64
%

$
2,039,260

64
%
Nonresidential mortgage

1,085,988

54
%

1,079,444

54
%
Construction

121,137

59
%

93,804

61
%
Total commercial mortgage loans

3,283,128

61
%

3,212,508

61
%

One- to four-family residential mortgage

1,527,980

61
%

1,447,721

59
%

Consumer loans:

Home equity loans

41,501

46
%

47,871

47
%

Total mortgage loans
$
4,852,609

61
%

$
4,708,100

60
%

Additional information about our loans at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~2022 is presented in Note 5 to the unaudited consolidated financial statements.

Nonperforming Assets and TDRs. Nonperforming assets ~~increased~~decreased by ~~$1.1~~$14.8 million to ~~$81.0~~$77.4 million, or ~~1.10%~~0.98% of total assets, at ~~March 31,~~September 30, 2022, from ~~$79.9~~$92.2 million, or ~~1.10%~~1.19% of total assets, at June 30, ~~2021.~~2022. At ~~March 31,~~September 30, 2022, we had accruing TDRs totaling ~~$8.5~~$8.9 million, an increase of ~~$2.3 million~~$273,000 from ~~$6.2~~$8.7 million at June 30, ~~2021.~~2022. At ~~March 31,~~September 30, 2022, we had non-accrual TDRs totaling ~~$23.2~~$11.8 million, ~~an increase~~a decrease of ~~$11.6~~$1.7 million from ~~$11.6~~$13.5 million at June 30, ~~2021.~~2022.

~~Based on Section 4013~~

At September 30, 2022, nonperforming assets consisted of ~~the CARES Act, the 2021 Consolidated Appropriations Act~~$68.6 million of nonperforming loans, $8.7 million of non-accrual commercial loans held for sale and related regulatory guidance promulgated by federal banking regulators, qualifying loan modifications made in response to the COVID-19 pandemic, including short-term payment deferrals, were not considered to be TDRs. We had no active payment deferrals that were not considered TDRs as$178,000 of ~~March 31, 2022. We had active payment deferrals, which were not considered TDRs, of $5.6 million as of~~other real estate owned. At June 30, ~~2021.~~

2022, nonperforming assets consisted of $70.3 million of nonperforming loans, $21.7 million of non-accrual commercial loans held for sale and $178,000 of other real estate owned.

Additional information about our nonperforming loans and TDRs at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~2022 is presented in Note 5 to the unaudited consolidated financial statements.

Allowance for Credit Losses (“~~ACL~~”(“ACL”). At ~~March 31,~~September 30, 2022, the ACL totaled ~~$43.9~~$47.6 million, or 0.84% of total loans, reflecting an increase of $555,000 from $47.1 million, or 0.87% of total loans, ~~reflecting a decrease of $14.3 million from $58.2 million, or 1.19% of total loans,~~ at June 30, ~~2021.~~2022. The ~~decrease during~~ increase during the ~~nine~~three months ended ~~March 31,~~September 30, 2022 was largely attributable to a provision for credit ~~losses reversal of $11.7 million,~~losses of $670,000, primarily driven by ~~continued improvement~~ loan growth in ~~our economic forecast,~~the quarter, partially offset by a reduction in the expected life of ~~various segments of~~ the loan ~~portfolio and a net reduction in reserves on loans individually evaluated for impairment.~~portfolio.~~Also contributing to this decrease were net charge-offs of $2.6 million, which had been individually reserved for within the ACL at June 30, 2021.~~

Additional information about our ACL at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~2022 is presented in Note 6 to the unaudited consolidated financial statements.

Other Assets. 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, increased ~~$26.3~~$36.5 million to ~~$717.4~~$792.7 million at ~~March 31,~~September 30, 2022 from ~~$691.2~~$756.2 million at June 30, ~~2021. Th~~e2022. The increase in thethe balance of these other assets during the ~~nine~~three months ended ~~March 31,~~September 30, 2022 largely reflected a ~~$32.2~~$25.3 million ~~increa~~se increase in the fair value of our derivatives portfolio. The remaining change generally reflected normal operating fluctuations within these line items.

~~- 41 -~~

Deposits. Total deposits increased ~~$43.4~~$246.0 million, or ~~0.8%~~4.2%, to ~~$5.53~~$6.11 billion at ~~March 31,~~September 30, 2022 from ~~$5.49~~$5.86 billion at June 30, ~~2021. The increase in deposits largely reflected growth in core non-maturity deposits, which was partially offset by the controlled run-off of time deposits.~~2022. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:

March 31,

June 30,

Increase/

2022

2021

(Decrease)

(In Thousands)

Non-interest-bearing deposits
$
621,954

$
593,718

$
28,236

Interest-bearing deposits:

Interest-bearing demand

2,154,488

1,902,478

252,010

Savings

1,088,974

1,111,364

(22,390
)
Certificates of deposit

1,663,246

1,877,746

(214,500
)
Interest-bearing deposits

4,906,708

4,891,588

15,120

Total deposits
$
5,528,662

$
5,485,306

$
43,356


	September 30, 2022		June 30, 2022		Increase/ (Decrease)
	(In Thousands)
Non-interest-bearing deposits	$	683,406	$	653,899	$	29,507

Interest-bearing deposits:
Interest-bearing demand	2,382,411		2,265,597		116,814
Savings	982,916		1,053,198		(70,282)
Certificates of deposit	2,059,545		1,889,562		169,983
Interest-bearing deposits	5,424,872		5,208,357		216,515
Total deposits	$	6,108,278	$	5,862,256	$	246,022

Additional information about our deposits at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~2022 is presented in Note 7 to the unaudited consolidated financial statements.

Borrowings. The balance of borrowings ~~increased~~decreased by ~~$165.3~~$49.9 million to ~~$851.2~~$851.5 million at ~~March 31,~~September 30, 2022 from ~~$685.9~~$901.3 million at June 30, ~~2021.~~2022.

Additional information about our borrowings at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~2022 is presented in Note 8 to the unaudited consolidated financial statements.

Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, decreased ~~$14.8~~$7.4 million to ~~$54.8~~$54.9 million at ~~March 31,~~September 30, 2022 from ~~$69.6~~$62.3 million at June 30, ~~2021.~~2022. The ~~decrease in these other liabilities largely reflected the payment of a $12.5 million loan participation liability which was outstanding at June 30, 2021. The remaining~~ change in the balance of these other liabilities generally reflected normal operating fluctuations during the period.

Stockholders’ Equity. Stockholders’ equity decreased ~~$87.8~~$19.0 million to ~~$955.2~~$875.0 million at ~~March 31,~~September 30, 2022 from ~~$1.04 billion~~$894.0 million at June 30, ~~2021.~~2022. The decrease in stockholders’ equity during the ~~nine~~three months ended ~~March 31,~~September 30, 2022 largely reflected ~~share repurchases totaling $96.0 million and cash dividends totaling $23.0 million. In addition, accumulated~~ other comprehensive ~~(loss)~~loss, net of income ~~decreased $29.1~~tax, of $20.6 million, ~~due primarily to~~which was driven by a decline in the fair value of our available for sale securities, partially offset by an increase in the fair value of our derivatives portfolio. In addition, share repurchases totaled $8.7 million and cash dividends totaled $7.3 million. These ~~decreases~~items were partially offset by net income of ~~$56.2~~$16.5 million.

Book value per share ~~increased~~decreased by ~~$0.16~~$0.14 to ~~$13.37~~$12.88 at ~~March 31,~~September 30, 2022 while tangible book value per share decreased by ~~$0.11~~$0.17 to ~~$10.38~~$9.73 at ~~March 31,~~September 30, 2022.

On ~~September 22, 2021,~~August 1, 2022, we announced the authorization of a new stock repurchase plan, which authorized the repurchase of up to 4,000,000 shares, and the completion of our previous stock repurchase plan, which authorized the repurchase of 7,602,021 ~~shares, or 10% of the shares then outstanding.~~shares. During the quarter ended ~~March 31,~~September 30, 2022, we repurchased ~~2,019,625~~759,806 shares of common stock at a cost of ~~$27.0~~$8.7 million, or ~~$13.35~~$11.44 per share. Through ~~March 31,~~September 30, 2022, we repurchased a total of ~~4,522,301~~434,661 shares, or ~~59.5%~~10.9% of the shares authorized for repurchase under the current repurchase program, at a total cost of ~~$59.6~~$5.1 million or ~~$13.18~~$11.66 per share.

~~- 42 -~~

Comparison of Operating Results for the Quarter Ended ~~March 31,~~September 30, 2022 and ~~March 31,~~September 30, 2021

Net Income. Net income for the quarter ended ~~March 31,~~September 30, 2022 was ~~$17.7~~$16.5 million, or $0.25 per diluted share, compared to ~~$16.4~~$19.7 million, or ~~$0.20~~$0.26 per diluted share for the quarter ended ~~March 31,~~September 30, 2021. The ~~increase~~decrease in net income reflected a decrease in net interest income, an increase in the provision for credit losses ~~partially offset by a decrease in net interest income, a decrease in non-interest income,~~and an increase in non-interest expense, ~~and~~partially offset by an increase in non-interest income and a decrease in income tax expense.

Net Interest Income. ~~Effective July 1, 2021, loan prepayment penalty income was reclassified to~~Net interest income ~~on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Interest income and non-interest income for all periods presented reflect this reclassification.~~

~~Net interest incom~~e decreased b~~y $756,000 to $47.7~~by $1.1 million ~~for the quarter ended March 31, 2022 compared~~ to $48.5 million for the quarter ended ~~March 31,~~September 30, 2022 compared to $49.6 million for the quarter ended September 30, 2021. TheThe decrease be~~tween~~between the comparative periods resulted from ~~a decrease of $4.6~~an increase of $8.3 million in interest ~~income,~~expense, partially offset by a ~~decrease~~an increase of ~~$3.8~~ $7.2 million in interest ~~expense.~~income. Included in net interest income for the quarters ended ~~March 31,~~September 30, 2022 and ~~March 31,~~ 2021, respectively, was purchase accounting accretion of ~~$1.9~~$1.8 million and ~~$4.8~~$2.9 million, and loan prepayment penalty income of ~~$1.3 million~~$441,000 and ~~$852,000.~~$1.7 million.

Net interest ~~margin increased one~~margin decreased 30 basis ~~point~~points to ~~2.89% for the quarter ended March 31, 2022, from 2.88%~~2.69% for the quarter ended ~~March 31,~~September 30, 2022, from 2.99% for the quarter ended September 30, 2021 and reflected ~~a decrease~~ an increase in the ~~average~~ cost of interest-bearing liabilities, ~~that was~~ partially offset by ~~a decrease~~increases in the average balance and yield on interest-earning assets.

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. 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. Non-accrual loans were included in the calculation of average balances, however interest receivable on these loans has been fully reserved for and therefore not included in interest income. The yields and costs set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.


	Three Months Ended September 30,
	2022						2021
	Average Balance		Interest		Average Yield/ Cost		Average Balance		Interest		Average Yield/ Cost
	(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1)	$	5,553,996	$	52,935	3.81	%	$	4,835,676	$	48,230	3.99	%
Taxable investment securities (2)	1,516,974		10,439		2.75		1,649,953		8,212		1.99
Tax-exempt securities (2)	48,973		285		2.33		59,115		333		2.25
Other interest-earning assets (3)	88,038		761		3.46		85,749		431		2.01
Total interest-earning assets	7,207,981		64,420		3.57		6,630,493		57,206		3.45
Non-interest-earning assets	570,225						616,735
Total assets	$	7,778,206					$	7,247,228

Interest-bearing liabilities:
Interest-bearing demand	$	2,354,340	5,391		0.92		$	1,954,271	1,147		0.23
Savings	1,019,343		595		0.23		1,102,865		334		0.12
Certificates of deposit	2,014,922		4,883		0.97		1,798,473		2,584		0.57
Total interest-bearing deposits	5,388,605		10,869		0.81		4,855,609		4,065		0.33
Federal Home Loan Bank advances	642,399		4,301		2.68		665,915		3,544		2.13
Other borrowings	127,456		719		2.26		28,532		7		0.10
Borrowings	769,855		5,020		2.61		694,447		3,551		2.05
Total interest-bearing liabilities	6,158,460		15,889		1.03		5,550,056		7,616		0.55
Non-interest-bearing liabilities (4)	724,055						667,164
Total liabilities	6,882,515						6,217,220
Stockholders' equity	895,691						1,030,008
Total liabilities and stockholders' equity	$	7,778,206					$	7,247,228

Net interest income			$	48,531					$	49,590
Interest rate spread (5)					2.54	%					2.90	%
Net interest margin (6)					2.69	%					2.99	%
Ratio of interest-earning assets to interest-bearing liabilities	1.17						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. Allowance for credit losses has been included in non-interest-earning assets.

(2)

Fair value adjustments have been excluded in the balances of interest-earning assets.

(3)

Includes interest-bearing deposits at other banks and FHLB of New York capital stock.

(4)

Includes average balances of non-interest-bearing deposits o~~f $624.2~~of $667.6 million and ~~$525.0~~$610.3 million for the quarter ended ~~March 31,~~September 30, 2022 and 2021, respectively.

(5)

Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(6)

Net interest margin represents net interest income as a percentage of average interest-earning assets.

- 40 -

Index

Provision for Credit Losses. The provision for credit ~~losses decreased $5.0~~losses increased $6.1 million to a provision for credit losses of $670,000 for the quarter ended September 30, 2022, compared to a provision for credit losses reversal of ~~$3.9~~$5.4 million for the quarter ended ~~March 31, 2022, compared to a~~September 30, 2021. The provision ~~for credit losses of $1.1 million~~ for the quarter ended ~~March 31, 2021. The~~September 30, 2022 was largely attributable to loan growth in the quarter, partially offset by a reduction in the expected life of the loan portfolio. By comparison, the provision reversal for the quarter ended ~~March 31, 2022 was largely attri~~butable to continued improvement in our economic forecast. In addition, there was a net reduction in reserves on individually evaluated loans primarily related to improved collateral values. By comparison, the provision for the quarter ended March 31,September 30, 2021 was largely attributable to ~~increases~~a reduction in ~~qualitative factors associated with~~ the ~~impact~~expected life of ~~COVID-19 on economic conditions~~various loan segments and ~~an increase~~continued improvement in ~~reserves on individually evaluated loans of $4.2 million, partially offset by a release of reserves within the one- to four-family residential segment, reflecting the improved~~our credit risk ~~outlook for that asset class.~~outlook.

Additional information regarding the ACL and the associated provisions recognized during the quarters ended ~~March 31,~~September 30, 2022 and 2021 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at ~~March 31,~~September 30, 2022 and June 30, ~~2021.~~

~~- 44 -~~

2022.

Non-Interest Income. Total non-interest income ~~decreased $1.4~~increased $2.1 million to ~~$3.2~~$5.9 million for the quarter ended ~~March 31,~~September 30, 2022.

~~Fees and service charges increased $144,000 to $617,000 for the quarter ended March 31, 2022. The increase primarily reflected increases in various deposit-related and loan-related fees and charges.~~

Gain on sale of loans decreased ~~$567,000~~$611,000 to ~~$376,000~~$395,000 for the quarter ended ~~March 31,~~September 30, 2022. The decrease in loan sale gains largely reflected a lower average sales price of loans sold and a decrease in the volume of loans sold between comparative periods largely attributable to increases in market interest rates.

~~Other non-interest income decreased $956,000~~

Income from bank owned life insurance increased $2.1 million to ~~$238,000~~$3.7 million for the quarter ended ~~March 31, 2022~~.September 30, 2022. The ~~decrease~~increase is the result of payouts on life insurance policies.

Other non-interest income increased $337,000 to $555,000 for the quarter ended September 30, 2022. The increase in other non-interest income primarily reflected ~~$837,000 of non-recurring gains on asset disposals recognized in the prior comparative period for which no such gains were recorded in the current period.~~

income from investment services.

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. Total non-interest ~~expense~~expense increased ~~$807,000~~$185,000 to ~~$30.6~~$32.0 million for the quarter ended ~~March 31,~~September 30, 2022.

Salaries and employee benefits increased ~~$2.2~~$1.7 million to ~~$19.2~~$20.3 million for quarter ended ~~March 31,~~September 30, 2022. This increase was largely due to the impact of staff additions, annual merit increases ~~increases in benefit plan expense, including employee medical, post-retirement plan and ESOP expense,~~ and an increase in incentive payments tied to loan origination volume. Partially offsetting these increases was a decrease in stock-based compensation expense.

~~Director compensation~~

Net occupancy expense of premises decreased ~~$408,000 to $340,000 for the quarter ended March 31, 2022. This decrease primarily reflected a decline in director-related stock-based compensation expense.~~

~~Other non-interest expense decreased $734,000~~$1.5 million to $3.1 million for the quarter ended ~~March 31,~~September 30, 2022. This decrease was primarily ~~attributable~~due to $1.3 million of non-recurring expenses related to the ~~reversal~~consolidation of ~~provision for credit losses on off-balance sheet credit exposures and a decrease~~three retail branch locations recognized in ~~loan expenses. The decrease was also attributable to non-recurring asset impairment charges of $375,000 related to branch consolidation activity recognized during~~ the prior ~~comparative quarter.~~

period.

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~~ ~~increased~~ ~~$790,000 to $6.5 million for the quarter ended March 31, 2022 from $5.7 million for the quarter ended March 31, 2021.~~

~~The increase in income tax expense reflected a higher level of pre-tax net income, as compared to the prior period, resulting in a higher provision for income tax expense.~~

~~Effective tax rates for the quarter ended March 31, 2022 and 2021 were 26.9% and 25.9%, respectively.~~

~~Comparison of Operating Results for the Nine Months Ended March 31, 2022 and March 31, 2021~~

~~Net Income~~. Net income for the nine months ended March 31, 2022 was $56.2 million, or $0.78 per diluted share, compared to $44.8 million, or $0.53 per diluted share for the nine months ended March 31, 2021. The increase in net income reflected an increase in net interest income, a decrease in the provision for credit losses and a decrease in non-interest expense, partially offset by a decrease in non-interest income and an increase in income tax expense.

~~Net Interest Income~~. As noted above, effective July 1, 2021, loan prepayment penalty income was reclassified to interest income on loans. Previously, loan prepayment penalty income was recorded within non-interest income. Interest income and non-interest income for all periods presented reflect this reclassification.

Net interest income increased by $6.8 million to $146.0 million for the nine months ended March 31, 2022 compared to $139.2 million for the nine months ended March 31, 2021. The increase between the comparative periods resulted from a decrease of $19.5 million in interest expense, partially offset by a decrease of $12.7 million in interest income. Included in net interest income, for the nine months ended March 31, 2022 and 2021, respectively, was purchase accounting accretion of $7.4 million and $13.5 million and loan prepayment penalty income of $4.5 million and $2.8 million.

~~- 45 -~~

Net interest margin increased 18 basis points to 2.95% for the nine months ended March 31, 2022, from 2.77% for the nine months ended March 31, 2021 and reflected a decrease in the average cost of interest-bearing liabilities that was partially offset by a decrease in the average yield on interest-earning assets.

For the Nine Months Ended March 31,

2022

2021

Average
Balance

Interest

Average
Yield/
Cost

Average
Balance

Interest

Average
Yield/
Cost

(Dollars in Thousands)
Interest-earning assets:

Loans receivable (1)

$
4,836,189

$
141,651

3.91

%

$
4,882,529

$
153,776

4.20

%
Taxable investment securities (2)

1,627,160

23,831

1.95

1,521,839

22,934

2.01

Tax-exempt securities (2)

57,411

976

2.27

78,442

1,297

2.20

Other interest-earning assets (3)

81,078

1,261

2.07

228,075

2,406

1.41

Total interest-earning assets

6,601,838

167,719

3.39

6,710,885

180,413

3.58

Non-interest-earning assets

609,996

624,644

Total assets

$
7,211,834

$
7,335,529

Interest-bearing liabilities:

Interest-bearing demand

$
2,037,725

$
3,446

0.23

$
1,658,437

$
5,727

0.46

Savings

1,092,738

896

0.11

1,049,655

2,874

0.37

Certificates of deposit

1,714,448

6,951

0.54

1,930,970

17,778

1.23

Total interest-bearing deposits

4,844,911

11,293

0.31

4,639,062

26,379

0.76

Borrowings

690,372

10,422

2.01

1,020,472

14,865

1.94

Total interest-bearing liabilities

5,535,283

21,715

0.52

5,659,534

41,244

0.97

Non-interest-bearing liabilities (4)

671,935

572,249

Total liabilities

6,207,218

6,231,783

Stockholders' equity

1,004,616

1,103,746

Total liabilities and stockholders' equity

$
7,211,834

$
7,335,529

Net interest income

$
146,004

$
139,169

Interest rate spread (5)

2.87

%

2.61

%
Net interest margin (6)

2.95

%

2.77

%
Ratio of interest-earning assets
to interest-bearing liabilities

1.19

1.19

~~(1)~~

~~(2)~~

~~Fair value adjustments have been excluded in the balances of interest-earning assets.~~

~~(3)~~

~~Includes interest-bearing deposits at other banks and FHLB of New York capital stock.~~

~~(4)~~

~~Includes average balances of non-interest-bearing deposits~~ ~~of $619.5 million and~~ ~~$502.0 million for the nine months ended March 31, 2022, and 2021, respectively.~~

~~(5)~~

~~Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.~~

~~(6)~~

~~Net interest margin represents net interest income as a percentage of average interest-earning assets.~~

~~- 46 -~~

~~Provision for Credit Losses~~. The provision for credit losses decreased $15.6 million to a provision for credit losses reversal of $11.7 million for the nine months ended March 31, 2022, compared to a provision for credit losses of $3.8 million for the nine months ended March 31, 2021. The provision reversal for the nine months ended March 31, 2022 was largely attributable to a continued improvement in our economic forecast, a reduction in the expected life of various segments of the loan portfolio and a net reduction in reserves on loans individually evaluated for impairment. By comparison, the provision for the nine months ended March 31, 2021, was largely attributable to an increase of $5.7 million in reserves on individually evaluated loans and $5.1 million of provision expense on non-PCD loans acquired in connection with the acquisition of MSB, partially offset by a release of reserves within the one- to four-family residential segment, reflecting the improved credit risk outlook for that asset class and provision for credit losses reversal associated with a decline in balances of loans collectively evaluated for impairment.

Additional information regarding the ACL and the associated provisions recognized during the nine months ended March 31, 2022 and 2021 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at March 31, 2022 and June 30, 2021.

~~Non-Interest Income. Total non-interest income decreased $6.4 million to $11.1 million for the nine months ended March 31, 2022.~~

~~Fees and service charges increased $448,000 to $1.9 million for the nine months ended March 31, 2022. The increase primarily reflected increases in loan-related and deposit-related fees and charges.~~

~~Gain on sale and call of securities reflected a net gain of $4,000 during the nine months ended March 31, 2022 compared to a net gain of $454,000 recorded during the earlier comparative period.~~

Gain on sale of loans decreased $2.9 million to $2.4 million for the nine months ended March 31, 2022. The decrease in loan sale gains largely reflected a decrease in the volume of loans sold between comparative periods and a lower average sales price of loans sold.

~~Bargain purchase gain recognized in the prior comparative period in connection with our acquisition of MSB was $3.1 million. No such gain was recorded in the current period.~~

Other non-interest income decreased $413,000 to $938,000 for the nine months ended March 31, 2022. The decrease primarily reflected a $356,000 non-recurring gain on asset disposals recognized in the current period compared to $837,000 of non-recurring gains on asset disposals recorded in the prior period.

~~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. Total non-interest expense decreased $1.8 million to $92.1 million for the nine months ended March 31, 2022.~~

Salaries and employee benefits increased $4.9 million to $55.9 million for the nine months ended March 31, 2022. This increase was largely due to the impact of staff additions, annual merit increases, increases in benefit plan expense, including employee medical, post-retirement plan and ESOP expense, and an increase in incentive payments tied to loan origination volume. Partially offsetting these increases was a decrease in stock-based compensation expense.

Net occupancy expense of premises increased $1.3 million to $10.9 million for the nine months ended March 31, 2022. This increase was primarily due to non-recurring expenses of $1.3 million related to the consolidation of three retail branch locations, $250,000 related to facility repairs made in connection with damage incurred during Tropical Storm Ida and $187,000 related to the closure of a leased office facility acquired in conjunction with the MSB acquisition.

~~Director compensation decreased $452,000 to $1.8 million for the nine months ended March 31, 2022. This decrease primarily reflected a decline in director-related stock-based compensation expense.~~

~~Merger-related expenses, associated with our acquisition of MSB, totaled $4.3 million for the nine months ended March 31, 2021 for which no such costs were recorded in the current period.~~

~~Debt extinguishment expenses totaled $796,000 for the nine months ended March 31, 2021 for which no such costs were recorded in the current period.~~

Other non-interest expense decreased $2.4 million to $9.1 million for the nine months ended March 31, 2022. This decrease was primarily attributable to the reversal of provision for credit losses on off-balance sheet credit exposures and a decrease in loan expenses. The decrease was also attributable to non-recurring asset impairment charges related to branch consolidation activity of $420,000 in the current period compared to $722,000 during the prior period.

~~- 47 -~~

~~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 ~~increased $6.4~~decreased $2.0 million to ~~$20.6~~$5.3 million for the ~~nine months~~quarter ended ~~March 31,~~September 30, 2022 from ~~$14.2~~$7.3 million for the ~~nine months~~quarter ended ~~March 31,~~September 30, 2021.

The ~~increase~~decrease in income tax expense reflected a ~~higher~~lower level of pre-tax ~~net~~ income as compared to the prior period, resulting in a higher provision for income tax expense. The increase also reflected the effects of various non-recurring items recorded in conjunction with our acquisition of MSB, recorded in the prior comparative period, including non-deductible merger related expenses, which were partially offset by a non-taxable bargain purchase gain. The change in income tax expense also reflected the reversal of a valuation allowance totaling $535,000 which was associated with the realization of a capital loss carryforward recorded in the prior comparative period for which no such amount was recorded in the current period.

Effective tax rates for the ~~nine months~~quarter ended ~~March 31,~~September 30, 2022 and 2021 were ~~26.8%~~24.1% and ~~24.1%~~26.9%, respectively. The decrease in the effective tax rate ~~for~~primarily resulted from the ~~prior comparative period reflected the effects of various non-recurring items recorded in conjunction with our acquisition of MSB and reversal of a valuation allowance, as~~payouts on life insurance policies, noted ~~above.~~above, which were not taxable.

- 41 -

Index

Liquidity and Capital Resources

Liquidity, represented by cash and cash equivalents, is a product of operating, investing and financing activities. 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.

At ~~March 31,~~September 30, 2022, liquidity included ~~$62.4~~$96.1 million of short-term cash and equivalents ~~supplemented by $1.53~~and $1.26 billion of investment securities ~~classified as~~ available for sale. In addition, as of ~~March 31,~~September 30, 2022, we had the capacity to borrow additional funds totaling ~~$2.38~~$2.26 billion and ~~$312.5~~$284.0 million from the FHLB of New York and FRB, respectively, without pledging additional collateral. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling ~~$950.0~~$970.0 million of which ~~$310.0 million~~none was outstanding.

At ~~March 31,~~September 30, 2022, we had outstanding commitments to originate and purchase loans totaling ~~approximately $198.1~~$352.2 million while such commitments totaled ~~$192.8~~$242.1 million at June 30, ~~2021.~~2022. As of those same dates, our pipeline of loans held for sale included ~~$16.0~~$12.8 million and ~~$48.4~~$20.3 million, respectively, of loans in process whose terms included interest rate locks to borrowers that were paired with a ~~non-binding,~~ 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.

Construction loans in process and unused lines of credit were ~~$88.2~~$80.2 million and ~~$165.8~~$159.7 million, respectively, at ~~March 31,~~September 30, 2022 compared to ~~$138.3~~$109.0 million and ~~$181.1~~$159.3 million, respectively, at June 30, ~~2021.~~2022. We are also subject to the contingent liabilities resulting from letters of credit whose outstanding balances totaled ~~$180,000~~$115,000 and ~~$739,000,~~$130,000, at ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, respectively.

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. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the customer. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance-sheet instruments. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Consistent with its goals to operate a sound and profitable financial organization, the Bank actively seeks to maintain its status as a well-capitalized institution in accordance with regulatory standards.

~~- 48 -~~

The following table sets forth the Bank’s capital position at ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, as compared to the minimum regulatory capital requirements that were in effect as of those dates:


	At September 30, 2022
	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)	$	683,381	12.67	%	$	431,361	8.00	%	$	539,202	10.00	%
Tier 1 capital (to risk-weighted assets)	648,894		12.03	%	323,521		6.00	%	431,361		8.00	%
Common equity tier 1 capital (to risk-weighted assets)	648,894		12.03	%	242,641		4.50	%	350,481		6.50	%
Tier 1 capital (to adjusted total assets)	648,894		8.44	%	307,371		4.00	%	384,214		5.00	%

- 42 -

Index

At March 31, 2022

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)
$
668,961

14.14

%
$
378,457

8.00

%
$
473,071

10.00

%
Tier 1 capital (to risk-weighted assets)

641,798

13.57

%

283,843

6.00

%

378,457

8.00

%
Common equity tier 1 capital (to risk-weighted assets)

641,798

13.57

%

212,882

4.50

%

307,496

6.50

%
Tier 1 capital (to adjusted total assets)

641,798

9.14

%

280,960

4.00

%

351,200

5.00

%

At June 30, 2021

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)
$
761,883

17.22

%
$
353,970

8.00

%
$
442,462

10.00

%
Tier 1 capital (to risk-weighted assets)

726,737

16.42

%

265,477

6.00

%

353,970

8.00

%
Common equity tier 1 capital (to risk-weighted assets)

726,737

16.42

%

199,108

4.50

%

287,600

6.50

%
Tier 1 capital (to adjusted total assets)

726,737

10.23

%

284,114

4.00

%

355,142

5.00

%


	At June 30, 2022
	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)	$	672,274	13.10	%	$	410,429	8.00	%	$	513,036	10.00	%
Tier 1 capital (to risk-weighted assets)	642,336		12.52	%	307,822		6.00	%	410,429		8.00	%
Common equity tier 1 capital (to risk-weighted assets)	642,336		12.52	%	230,866		4.50	%	333,473		6.50	%
Tier 1 capital (to adjusted total assets)	642,336		8.70	%	295,163		4.00	%	368,954		5.00	%

The following table sets forth the Company’s capital position at ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, as compared to the minimum regulatory capital requirements that were in effect as of those dates:

At March 31, 2022

Actual

For Capital
Adequacy Purposes

Amount

Ratio

Amount

Ratio

(Dollars in Thousands)
Total capital (to risk-weighted assets)
$
802,929

16.97

%
$
378,574

8.00

%
Tier 1 capital (to risk-weighted assets)

775,766

16.39

%

283,931

6.00

%
Common equity tier 1 capital (to risk-weighted assets)

775,766

16.39

%

212,948

4.50

%
Tier 1 capital (to adjusted total assets)

775,766

11.04

%

281,055

4.00

%

At June 30, 2021

Actual

For Capital
Adequacy Purposes

Amount

Ratio

Amount

Ratio

(Dollars in Thousands)
Total capital (to risk-weighted assets)
$
872,823

19.65

%
$
355,274

8.00

%
Tier 1 capital (to risk-weighted assets)

837,677

18.86

%

266,456

6.00

%
Common equity tier 1 capital (to risk-weighted assets)

837,677

18.86

%

199,842

4.50

%
Tier 1 capital (to adjusted total assets)

837,677

11.76

%

284,877

4.00

%


	At September 30, 2022
	Actual				For Capital Adequacy Purposes
	Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
Total capital (to risk-weighted assets)	$	781,745	14.49	%	$	431,480	8.00	%
Tier 1 capital (to risk-weighted assets)	747,258		13.85	%	323,610		6.00	%
Common equity tier 1 capital (to risk-weighted assets)	747,258		13.85	%	242,707		4.50	%
Tier 1 capital (to adjusted total assets)	747,258		9.72	%	307,523		4.00	%


	At June 30, 2022
	Actual				For Capital Adequacy Purposes
	Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
Total capital (to risk-weighted assets)	$	778,253	15.17	%	$	410,515	8.00	%
Tier 1 capital (to risk-weighted assets)	748,315		14.58	%	307,886		6.00	%
Common equity tier 1 capital (to risk-weighted assets)	748,315		14.58	%	230,914		4.50	%
Tier 1 capital (to adjusted total assets)	748,315		10.14	%	295,290		4.00	%

In March 2020, the federal banking agencies announced an interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss method, followed by a three-year transition period established in the previous rule (five-year transition option). We have adopted the capital transition relief over the permissible five-year period.

~~- 49 -~~

The two-year delay ended for us as of June 30, 2022 and we then began the three-year transition period.

Off-Balance Sheet Arrangements

In the normal course of our business of investing in loans and securities we are a party to financial instruments with off-balance-sheet risk. These financial instruments include significant purchase commitments, such as commitments related to capital expenditure plans and commitments to extend credit to meet the financing needs of our customers. We had no significant off-balance sheet commitments for capital expenditures as of ~~March 31,~~September 30, 2022.

Recent Accounting Pronouncements

For a discussion of the expected impact of recently issued accounting pronouncements that we have yet to adopt, please refer to Note 3 to the unaudited consolidated financial statements.

- 5043 -

Index

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The majority of our assets and liabilities are sensitive to changes in interest rates and as such, interest rate risk is a significant form of market risk that we must manage. Interest rate risk is generally defined in regulatory nomenclature as the risk to earnings or capital arising from the movement of interest rates and arises from several risk factors including re-pricing risk, basis risk, yield curve risk and option risk. We maintain an Asset/Liability Management (“ALM”) program in order manage our interest rate risk. 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 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. Movements in market interest rates, and the effect of such movements on the risk factors noted above, significantly influence the spread between the interest earned on our interest-earning assets and the interest paid on our interest-bearing liabilities. Our internal interest rate risk analysis calculates the sensitivity of our projected NII over a one year period utilizing a static balance sheet assumption through which incoming and outgoing asset and liability cash flows are reinvested into similar instruments. Product pricing and earning asset prepayment speeds are appropriately adjusted for each rate scenario.

With regard to capital, our internal interest rate risk analysis calculates the sensitivity of our Economic Value of Equity (“EVE”) to movements in interest rates. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet instruments. 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.

For both earnings and capital at risk, our interest rate risk analysis calculates a base case scenario that assumes no change in interest rates. The model then measures changes throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve up and down 100, 200 and 300 basis points with additional scenarios modeled where appropriate. 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. The ~~relatively low~~ level of interest rates prevalent at ~~March 31,~~September 30, 2022 and June 30, ~~2021~~2022 precluded the modeling of certain falling rate scenarios.

The following tables present the results of our internal EVE and NII analyses as of ~~March 31,~~September 30, 2022 and June 30, ~~2021,~~2022, respectively:

March 31, 2022

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

1,139,213

(11.91
)
%

182,874

(10.70
)
%

216,395

3.42

%
+200 bps

1,191,919

(7.84
)
%

189,586

(7.43
)
%

213,631

2.10

%
+100 bps

1,261,373

(2.47
)
%

199,005

(2.83
)
%

213,632

2.10

%
0 bps

1,293,258

-

204,792

-

209,236

-

-100 bps

1,244,971

(3.73
)
%

196,007

(4.29
)
%

190,088

(9.15
)
%

June 30, 2021

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

1,083,847

(8.82
)
%

175,830

(8.38
)
%

196,307

4.11

%
+200 bps

1,132,915

(4.69
)
%

182,089

(5.12
)
%

195,756

3.82

%
+100 bps

1,176,890

(0.99
)
%

187,961

(2.06
)
%

194,543

3.17

%
0 bps

1,188,656

-

191,908

-

188,559

-

-100 bps

1,071,463

(9.86
)
%

181,645

(5.35
)
%

169,447

(10.14
)
%

At March 31, 2022, our interest rate risk analysis was impacted by $310.0 million of overnight borrowings, compared to $20.0 million of overnight borrowings at June 30, 2021. This increased level of overnight borrowings resulted in a relatively greater level of interest rate sensitivity in the rising rate shock scenarios and does not reflect any future actions we may take to replace or extend the maturity of these borrowings.


	September 30, 2022
					1 to 12 Months				13 to 24 Months
Change in Interest Rates	EVE		% Change in EVE		NII		% Change in NII		NII		% Change in NII
	(Dollars in Thousands)
+300 bps	$	971,747	(19.96)	%	$	177,190	(8.98)	%	$	205,836	(2.54)	%
+200 bps	1,045,963		(13.84)	%	182,019		(6.50)	%	206,157		(2.39)	%
+100 bps	1,142,340		(5.91)	%	188,856		(2.99)	%	210,753		(0.21)	%
0 bps	1,214,042		—		194,671		—		211,200		—
-100 bps	1,238,227		1.99	%	192,785		(0.97)	%	201,861		(4.42)	%
-200 bps	1,222,117		0.67	%	187,805		(3.53)	%	187,633		(11.16)	%


	June 30, 2022
					1 to 12 Months				13 to 24 Months
Change in Interest Rates	EVE		% Change in EVE		NII		% Change in NII		NII		% Change in NII
	(Dollars in Thousands)
+300 bps	$	1,089,795	(15.37)	%	$	178,865	(13.62)	%	$	214,839	(1.68)	%
+200 bps	1,156,219		(10.21)	%	187,601		(9.40)	%	215,528		(1.36)	%
+100 bps	1,239,935		(3.71)	%	198,126		(4.32)	%	219,594		0.50	%
0 bps	1,287,700		—		207,069		—		218,501		—
-100 bps	1,272,203		(1.20)	%	205,241		(0.88)	%	204,568		(6.38)	%

- 5144 -

Index

There are numerous internal and external factors that may contribute to changes in our EVE and its sensitivity. Changes in the composition and allocation of our balance sheet, or utilization of off-balance sheet instruments such as derivatives, can significantly alter the exposure to interest rate risk as quantified by the changes in the EVE sensitivity measures. 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.

Notwithstanding the rate change scenarios presented in the EVE and NII-based analyses above, future interest rates and their effect on net interest income are not predictable. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, prepayments and deposit run-offs and should not be relied upon as indicative of actual results. Certain shortcomings are inherent in this type of computation. Although certain assets and liabilities may have similar maturities or periods of re-pricing, they may react at different times and in different degrees to changes in market interest rates. The interest rate on certain types of assets and liabilities, such as demand deposits and savings accounts, may fluctuate in advance of changes in market interest rates, while rates on other types of assets and liabilities may lag behind changes in market interest rates. Certain assets, such as adjustable-rate mortgages, generally have features which restrict changes in interest rates on a short-term basis and over the life of the asset. In the event of a change in interest rates, prepayments and early withdrawal levels could deviate significantly from those assumed in the analyses set forth above. 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 4.

CONTROLS AND PROCEDURES

As of the end of the period covered by this Report, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended). Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended ~~March 31,~~September 30, 2022, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

- 5245 -

Index

PART II

ITEM 1. Legal Proceedings

At ~~March 31,~~September 30, 2022, neither the Company nor the Bank were involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which involve amounts in the aggregate believed by management to be immaterial to the financial condition of the Company and the Bank.

ITEM 1A. Risk Factors

There have been no material changes to the Risk Factors previously disclosed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended June 30, ~~2021,~~2022, previously filed with the Securities and Exchange Commission.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities:

The following table reports information regarding repurchases of the Company’s common stock during the quarter ended ~~March 31,~~September 30, 2022:

Period

Total Number
of Shares
Purchased

Average Price
Paid per Share

Total Number
of Shares
Purchased as
Part of Publicly
Announced Plans
or Programs

Maximum
Number of Shares
that May Yet Be
Purchased Under
the Plans or
Programs

January 1-31, 2022

599,585

$
13.49

599,585

4,499,760

February 1-28, 2022

751,431

$
13.37

751,431

3,748,329

March 1-31, 2022

668,609

$
13.21

668,609

3,079,720

Total

2,019,625

$
13.35

2,019,625

3,079,720


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1-31, 2022	325,145	$	11.15	325,145	—
August 1-31, 2022	218,657	$	12.03	218,657	3,781,343
September 1-30, 2022	216,004	$	11.28	216,004	3,565,339

Total	759,806	$	11.44	759,806	3,565,339

On ~~September 22, 2021,~~August 1, 2022, the Company announced the authorization of a new stock repurchase plan to repurchase up to 4,000,000 shares and the completion of its repurchase plan announced on September 22, 2021, which had authorized the repurchase of 7,602,021 ~~shares, or 10% of the shares then outstanding.~~shares. This current plan has no expiration date.

ITEM 3. Defaults Upon Senior Securities

Not applicable.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

None.

- 5346 -

Index

ITEM 6. Exhibits

The following Exhibits are filed as part of this report:


3.1		Articles of Incorporation of Kearny Financial Corp. (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-198602), originally filed on September 5, 2014)
3.2		Bylaws of Kearny Financial Corp. (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-198602), originally filed on September 5, 2014)
4		Form of Common Stock Certificate of Kearny Financial Corp. (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-198602), originally filed on September 5, 2014)
~~10.1~~	~~Kearny Bank Amended and Restated Change in Control Severance Pay Plan~~
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101		The following materials from the Company’s Form 10-Q for the quarter ended ~~March 31,~~September 30, 2022, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.
101.INS		Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

- 5447 -

Index

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		KEARNY FINANCIAL CORP.

		~~KEARNY FINANCIAL CORP.~~

Date: ~~May 6,~~November 7, 2022	By:		~~/s/~~/s/ Craig L. Montanaro
				Craig L. Montanaro
				President and Chief Executive Officer
				~~(Principal~~(Principal Executive Officer)

Date: ~~May 6,~~November 7, 2022		By:		~~/s/~~/s/ Keith Suchodolski
				Keith Suchodolski
				Senior Executive Vice President and Chief Financial Officer
				~~(Principal~~(Principal Financial and Accounting Officer)

- 5548 -


☐o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


					Page Number
PART I—FINANCIAL INFORMATION

Item 1.		Financial Statements

		Consolidated Statements of Financial Condition at ~~March 31,~~September 30, 2022 (Unaudited) and June 30, ~~2021~~2022	1		1

		Consolidated Statements of Income for the Three Months ~~and Nine Months~~ Ended ~~March 31,~~September 30, 2022 and ~~March 31,~~September 30, 2021 (Unaudited)	2		2

		Consolidated Statements of Comprehensive Income (Loss) for the Three Months ~~and Nine Months~~ Ended ~~March 31,~~September 30, 2022 and ~~March 31,~~September 30, 2021 (Unaudited)	3		3

		Consolidated Statements of Changes in Stockholders’ Equity for the Three Months ~~and Nine Months~~ Ended ~~March 31,~~September 30, 2022 and ~~March 31,~~September 30, 2021 (Unaudited)	4		4

		Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~March 31,~~September 30, 2022 and ~~March 31,~~September 30, 2021 (Unaudited)	5		6

		Notes to Consolidated Financial Statements (Unaudited)	7		8

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	36		39

Item 3.		Quantitative and Qualitative Disclosure About Market Risk	44		51

Item 4.		Controls and Procedures	45		52

PART II—OTHER INFORMATION

Item 1.		Legal Proceedings	46		53

Item 1A.		Risk Factors	46		53

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	46		53

Item 3.		Defaults Upon Senior Securities	46		53

Item 4.		Mine Safety Disclosures	46		53

Item 5.		Other Information	46		53

Item 6.	Exhibits	~~Exhibits~~47			54

SIGNATURES		48		55


	March 31,			June 30,
	2022			2021
	(Unaudited)
Assets
Cash and amounts due from depository institutions	$	22,864		$	21,463
Interest-bearing deposits in other banks		39,515			46,392
Cash and cash equivalents		62,379			67,855
Investment securities available for sale (amortized cost $1,590,074 and $1,666,853, respectively), net of allowance for credit losses of $0 at March 31, 2022 and June 30, 2021		1,526,086			1,676,864
Investment securities held to maturity (fair value $117,017 and $39,610, respectively), net of allowance for credit losses of $0 at March 31, 2022 and June 30, 2021		121,853			38,138
Loans held-for-sale		2,822			16,492
Loans receivable		5,003,201			4,851,394
Less: allowance for credit losses on loans		(43,860	)		(58,165	)
Net loans receivable		4,959,341			4,793,229
Premises and equipment		53,727			56,338
Federal Home Loan Bank (“FHLB”) of New York stock		30,997			36,615
Accrued interest receivable		19,517			19,362
Goodwill		210,895			210,895
Core deposit intangibles		3,166			3,705
Bank owned life insurance		287,644			283,310
Deferred income tax assets, net		34,349			29,323
Other real estate owned		401			178
Other assets		76,714			51,431
Total Assets	$	7,389,891		$	7,283,735

Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest-bearing	$	621,954		$	593,718
Interest-bearing		4,906,708			4,891,588
Total deposits		5,528,662			5,485,306
Borrowings		851,220			685,876
Advance payments by borrowers for taxes		16,979			15,752
Other liabilities		37,861			53,857
Total Liabilities		6,434,722			6,240,791

Stockholders' Equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized; NaN issued and outstanding		0			0
Common stock, $0.01 par value; 800,000,000 shares authorized; 71,424,469 shares and 78,964,859 shares issued and outstanding, respectively		714			790
Paid-in capital		561,176			654,396
Retained earnings		441,522			408,367
Unearned employee stock ownership plan shares; 2,609,069 shares and 2,759,594 shares, respectively		(25,294	)		(26,753	)
Accumulated other comprehensive (loss) income		(22,949	)		6,144
Total Stockholders' Equity		955,169			1,042,944
Total Liabilities and Stockholders' Equity	$	7,389,891		$	7,283,735


	Three Months Ended					Nine Months Ended
	March 31,					March 31,
	2022			2021		2022			2021
Interest Income
Loans	$	45,846		$	50,159	$	141,651		$	153,776
Taxable investment securities		8,024			7,891		23,831			22,934
Tax-exempt investment securities		316			410		976			1,297
Other interest-earning assets		415			705		1,261			2,406
Total Interest Income		54,601			59,165		167,719			180,413

Interest Expense
Deposits		3,565			6,670		11,293			26,379
Borrowings		3,309			4,012		10,422			14,865
Total Interest Expense		6,874			10,682		21,715			41,244
Net Interest Income		47,727			48,483		146,004			139,169
(Reversal of) provision for credit losses		(3,920	)		1,126		(11,740	)		3,820
Net Interest Income after (Reversal of) Provision for Credit Losses		51,647			47,357		157,744			135,349

Non-Interest Income
Fees and service charges		617			473		1,922			1,474
Gain on sale and call of securities		3			18		4			454
Gain on sale of loans		376			943		2,352			5,211
Gain on sale of other real estate owned		14			0		14			0
Income from bank owned life insurance		1,511			1,530		4,634			4,722
Electronic banking fees and charges		432			456		1,260			1,265
Bargain purchase gain		0			0		0			3,053
Other income		238			1,194		938			1,351
Total Non-Interest Income		3,191			4,614		11,124			17,530

Non-Interest Expense
Salaries and employee benefits		19,184			16,965		55,897			51,023
Net occupancy expense of premises		3,223			3,433		10,926			9,675
Equipment and systems		3,822			3,823		11,370			11,295
Advertising and marketing		516			567		1,356			1,580
Federal deposit insurance premium		480			488		1,693			1,450
Directors' compensation		340			748		1,792			2,244
Merger-related expenses		0			0		0			4,349
Debt extinguishment expenses		0			0		0			796
Other expense		3,058			3,792		9,062			11,487
Total Non-Interest Expense		30,623			29,816		92,096			93,899
Income before Income Taxes		24,215			22,155		76,772			58,980
Income tax expense		6,522			5,732		20,595			14,230
Net Income	$	17,693		$	16,423	$	56,177		$	44,750

Net Income per Common Share (EPS)
Basic	$	0.25		$	0.20	$	0.78		$	0.53
Diluted	$	0.25		$	0.20	$	0.78		$	0.53
Weighted Average Number of Common Shares Outstanding
Basic		69,790			80,673		72,130			83,958
Diluted		69,817			80,690		72,154			83,961


	Common Stock						Paid-In			Retained			Unearned ESOP			Accumulated Other Comprehensive
	Shares			Amount			Capital			Earnings			Shares			Income			Total
Balance - December 31, 2020		84,938		$	849		$	724,389		$	388,376		$	(27,726	)	$	6,453		$	1,092,341

Net income		-			-			-			16,423			-			-			16,423
Other comprehensive loss, net of income tax		-			-			-			-			-			(5,096	)		(5,096	)
ESOP shares committed to be released (50 shares)		-			-			87			-			487			-			574
Stock option exercise		41			-			373			-			-			-			373
Share repurchases		(3,026	)		(29	)		(34,834	)		-			-			-			(34,863	)
Stock-based compensation expense		-			-			1,379			-			-			-			1,379
Cancellation of shares issued for restricted stock awards		(10	)		-			(114	)		-			-			-			(114	)
Cash dividends declared ($0.09 per common share)		-			-			-			(7,205	)		-			-			(7,205	)
Balance - March 31, 2021		81,943		$	820		$	691,280		$	397,594		$	(27,239	)	$	1,357		$	1,063,812


	March 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(In Thousands)
Available for sale:
Debt securities:
Obligations of state and political subdivisions	$	30,973	$	118	$	13	$	-	$	31,078
Asset-backed securities		230,997		375		1,788		-		229,584
Collateralized loan obligations		313,651		11		2,042		-		311,620
Corporate bonds		154,922		1,193		2,620		-		153,495
Total debt securities		730,543		1,697		6,463		-		725,777

Mortgage-backed securities:
Collateralized mortgage obligations (1)		8,265		1		270		-		7,996
Residential pass-through securities (1)		617,387		332		47,569		-		570,150
Commercial pass-through securities (1)		233,879		249		11,965		-		222,163
Total mortgage-backed securities		859,531		582		59,804		-		800,309

Total securities available for sale	$	1,590,074	$	2,279	$	66,267	$	-	$	1,526,086


	June 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(In Thousands)
Available for sale:
Debt securities:
Obligations of state and political subdivisions	$	33,800	$	803	$	-	$	-	$	34,603
Asset-backed securities		240,217		2,835		63		-		242,989
Collateralized loan obligations		189,873		177		170		-		189,880
Corporate bonds		155,622		2,802		73		-		158,351
Total debt securities		619,512		6,617		306		-		625,823

Mortgage-backed securities:
Collateralized mortgage obligations (1)		13,420		319		0		-		13,739
Residential pass-through securities (1)		744,196		7,443		7,148		-		744,491
Commercial pass-through securities (1)		289,725		5,738		2,652		-		292,811
Total mortgage-backed securities		1,047,341		13,500		9,800		-		1,051,041

Total securities available for sale	$	1,666,853	$	20,117	$	10,106	$	-	$	1,676,864


	Payment Status
	March 31, 2022
	30-59 Days		60-89 Days		90 Days and Over		Total Past Due		Current		Total
	(In Thousands)
Multi-family mortgage	$	-	$	-	$	28,197	$	28,197	$	2,047,806	$	2,076,003
Nonresidential mortgage		2,101		-		25,283		27,384		1,058,604		1,085,988
Commercial business		-		64		281		345		169,206		169,551
Construction		-		-		-		-		121,137		121,137
One- to four-family residential mortgage		3,410		520		2,968		6,898		1,521,082		1,527,980
Home equity loans		25		4		59		88		41,413		41,501
Other consumer		-		-		-		-		2,755		2,755
Total loans	$	5,536	$	588	$	56,788	$	62,912	$	4,962,003	$	5,024,915


	Performance Status
	March 31, 2022
	90 Days and Over Past Due Accruing		Nonaccrual Loans with Allowance for Credit Losses		Nonaccrual Loans with no Allowance for Credit Losses		Total Nonperforming		Performing		Total
	(In Thousands)
Multi-family mortgage	$	-	$	11,369	$	28,646	$	40,015	$	2,035,988	$	2,076,003
Nonresidential mortgage		-		3,667		24,523		28,190		1,057,798		1,085,988
Commercial business		-		63		430		493		169,058		169,551
Construction		-		-		1,791		1,791		119,346		121,137
One- to four-family residential mortgage		-		4,376		4,241		8,617		1,519,363		1,527,980
Home equity loans		-		313		1,176		1,489		40,012		41,501
Other consumer		-		-		-		-		2,755		2,755
Total loans	$	-	$	19,788	$	60,807	$	80,595	$	4,944,320	$	5,024,915


	Three Months Ended March 31, 2022						Nine Months Ended March 31, 2022
	# of Loans		Pre- modification Recorded Investment		Post- modification Recorded Investment		# of Loans		Pre- modification Recorded Investment		Post- modification Recorded Investment
	(Dollars In Thousands)
Multi-family mortgage		1	$	9,104	$	9,101		2	$	12,091	$	12,073
One- to four-family residential mortgage		8		2,953		2,965		10		3,214		3,226
Home equity loans		2		1,477		1,477		2		1,477		1,477
Total		11	$	13,534	$	13,543		14	$	16,782	$	16,776


	Three Months Ended March 31, 2021						Nine Months Ended March 31, 2021
	# of Loans		Pre- modification Recorded Investment		Post- modification Recorded Investment		# of Loans		Pre- modification Recorded Investment		Post- modification Recorded Investment
	(Dollars In Thousands)
One- to four-family residential mortgage		-	$	-	$	-		1	$	309	$	308
Home equity loans		1		24		24		1		24		24
Total		1	$	24	$	24		2	$	333	$	332


	Allowance for Credit Losses
	March 31, 2022
	Loans acquired with deteriorated credit quality individually analyzed		Loans acquired with deteriorated credit quality collectively evaluated		Loans individually analyzed		Loans collectively evaluated		Total allowance for credit losses
	(In Thousands)
Multi-family mortgage	$	0	$	0	$	1,083	$	23,144	$	24,227
Nonresidential mortgage		0		363		119		8,557		9,039
Commercial business		0		11		6		1,708		1,725
Construction		0		0		0		1,274		1,274
One- to four-family residential mortgage		0		242		278		6,758		7,278
Home equity loans		22		0		0		214		236
Other consumer		0		0		0		81		81
Total loans	$	22	$	616	$	1,486	$	41,736	$	43,860


	Balance of Loans Receivable
	March 31, 2022
	Loans acquired with deteriorated credit quality individually analyzed		Loans acquired with deteriorated credit quality collectively evaluated		Loans individually analyzed		Loans collectively evaluated		Total loans
	(In Thousands)
Multi-family mortgage	$	0	$	0	$	40,015	$	2,035,988	$	2,076,003
Nonresidential mortgage		381		13,179		29,911		1,042,517		1,085,988
Commercial business		176		1,267		317		167,791		169,551
Construction		0		5,735		1,791		113,611		121,137
One- to four-family residential mortgage		230		6,666		8,386		1,512,698		1,527,980
Home equity loans		342		60		1,147		39,952		41,501
Other consumer		0		0		0		2,755		2,755
Total loans	$	1,129	$	26,907	$	81,567	$	4,915,312	$	5,024,915
Unaccreted yield adjustments										(21,714	)
Loans receivable, net of yield adjustments									$	5,003,201


	Changes in the Allowance for Credit Losses
	Three Months Ended March 31, 2022
	Balance at December 31, 2021		Charge-offs			Recoveries		(Reversal of) provision for credit losses			Balance at March 31, 2022
	(In Thousands)
Multi-family mortgage	$	25,795	$	0		$	0	$	(1,568	)	$	24,227
Nonresidential mortgage		10,078		(441	)		0		(598	)		9,039
Commercial business		1,903		0			4		(182	)		1,725
Construction		1,441		0			0		(167	)		1,274
One- to four-family residential mortgage		8,601		0			0		(1,323	)		7,278
Home equity loans		308		0			0		(72	)		236
Other consumer		90		0			1		(10	)		81
Total loans	$	48,216	$	(441	)	$	5	$	(3,920	)	$	43,860


	Changes in the Allowance for Credit Losses
	Three Months Ended March 31, 2021
	Balance at December 31, 2020		Charge-offs			Recoveries		(Reversal of) provision for credit losses			Balance at March 31, 2021
	(In Thousands)
Multi-family mortgage	$	29,500	$	-		$	-	$	(514	)	$	28,986
Nonresidential mortgage		15,933		(9	)		-		4,053			19,977
Commercial business		3,348		(738	)		2		(86	)		2,526
Construction		1,205		-			-		40			1,245
One- to four-family residential mortgage		12,625		-			2		(2,249	)		10,378
Home equity loans		725		-			-		(117	)		608
Other consumer		50		(9	)		2		(1	)		42
Total loans	$	63,386	$	(756	)	$	6	$	1,126		$	63,762


	Changes in the Allowance for Credit Losses
	Nine Months Ended March 31, 2021
	Balance at June 30, 2020 (prior to adoption of ASC 326):		Impact of adopting Topic 326			Charge-offs			Recoveries		Initial allowance on PCD loans		(Reversal of) provision for credit losses			Balance at March 31, 2021
	(In Thousands)
Multi-family mortgage	$	20,916	$	8,408		$	0		$	0	$	250	$	(588	)	$	28,986
Nonresidential mortgage		8,763		2,390			(75	)		0		1,720		7,179			19,977
Commercial business		1,926		(421	)		(802	)		7		1,007		809			2,526
Construction		236		80			0			0		99		830			1,245
One- to four-family residential mortgage		4,860		9,106			(13	)		2		720		(4,297	)		10,378
Home equity loans		568		92			(32	)		0		105		(125	)		608
Other consumer		58		(15	)		(22	)		9		0		12			42
Total loans	$	37,327	$	19,640		$	(944	)	$	18	$	3,901	$	3,820		$	63,762


	Three Months Ended						Nine Months Ended						Affected Line Item in the Consolidated
	March 31,						March 31,						Statements of Income
	2022			2021			2022			2021
	(In Thousands)						(In Thousands)
Service cost	$	29		$	26		$	87		$	79		Salaries and employee benefits
Interest cost		67			66			205			197		Other expense
Amortization of unrecognized loss		20			20			60			62		Other expense
Expected return on assets		(27	)		(28	)		(83	)		(85	)	Other expense
Net periodic benefit cost	$	89		$	84		$	269		$	253


	Three Months Ended March 31,				Nine Months Ended March 31,
	2022		2021		2022		2021
	(In Thousands, Except Per Share Data)
Net income	$	17,693	$	16,423	$	56,177	$	44,750

Weighted average number of common shares outstanding - basic		69,790		80,673		72,130		83,958
Effect of dilutive securities		27		17		24		3
Weighted average number of common shares outstanding - diluted		69,817		80,690		72,154		83,961

Basic earnings per share	$	0.25	$	0.20	$	0.78	$	0.53
Diluted earnings per share	$	0.25	$	0.20	$	0.78	$	0.53


	March 31,			June 30,			Increase/
	2022			2021			(Decrease)
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	2,076,003		$	2,039,260		$	36,743
Nonresidential mortgage		1,085,988			1,079,444			6,544
Commercial business		169,551			168,951			600
Construction		121,137			93,804			27,333
Total commercial loans		3,452,679			3,381,459			71,220

One- to four-family residential mortgage		1,527,980			1,447,721			80,259

Consumer loans:
Home equity loans		41,501			47,871			(6,370	)
Other consumer		2,755			3,259			(504	)
Total consumer loans		44,256			51,130			(6,874	)

Total loans		5,024,915			4,880,310			144,605

Unaccreted yield adjustments		(21,714	)		(28,916	)		7,202
Allowance for credit losses		(43,860	)		(58,165	)		14,305

Net loans receivable	$	4,959,341		$	4,793,229		$	166,112


	For the Three Months Ended March 31,
	2022							2021
	Average Balance		Interest		Average Yield/ Cost			Average Balance		Interest		Average Yield/ Cost
	(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1)	$	4,850,236	$	45,846		3.78	%	$	4,816,592	$	50,159		4.17	%
Taxable investment securities (2)		1,620,996		8,024		1.98			1,674,223		7,891		1.89
Tax-exempt securities (2)		55,390		316		2.28			73,573		410		2.23
Other interest-earning assets (3)		79,644		415		2.08			169,291		705		1.67
Total interest-earning assets		6,606,266		54,601		3.31			6,733,679		59,165		3.51
Non-interest-earning assets		601,684							617,440
Total assets	$	7,207,950						$	7,351,119

Interest-bearing liabilities:
Interest-bearing demand	$	2,133,977	$	1,166		0.22		$	1,831,617	$	1,558		0.34
Savings		1,088,351		274		0.10			1,084,981		557		0.21
Certificates of deposit		1,650,048		2,125		0.52			1,904,234		4,555		0.96
Total interest-bearing deposits		4,872,376		3,565		0.29			4,820,832		6,670		0.55
Borrowings		684,478		3,309		1.93			865,690		4,012		1.85
Total interest-bearing liabilities		5,556,854		6,874		0.49			5,686,522		10,682		0.75
Non-interest-bearing liabilities (4)		673,607							582,036
Total liabilities		6,230,461							6,268,558
Stockholders' equity		977,489							1,082,561
Total liabilities and stockholders' equity	$	7,207,950						$	7,351,119

Net interest income			$	47,727						$	48,483
Interest rate spread (5)						2.82	%						2.76	%
Net interest margin (6)						2.89	%						2.88	%
Ratio of interest-earning assets to interest-bearing liabilities		1.19							1.18


	For the Nine Months Ended March 31,
	2022							2021
	Average Balance		Interest		Average Yield/ Cost			Average Balance		Interest		Average Yield/ Cost
	(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1)	$	4,836,189	$	141,651		3.91	%	$	4,882,529	$	153,776		4.20	%
Taxable investment securities (2)		1,627,160		23,831		1.95			1,521,839		22,934		2.01
Tax-exempt securities (2)		57,411		976		2.27			78,442		1,297		2.20
Other interest-earning assets (3)		81,078		1,261		2.07			228,075		2,406		1.41
Total interest-earning assets		6,601,838		167,719		3.39			6,710,885		180,413		3.58
Non-interest-earning assets		609,996							624,644
Total assets	$	7,211,834						$	7,335,529

Interest-bearing liabilities:
Interest-bearing demand	$	2,037,725	$	3,446		0.23		$	1,658,437	$	5,727		0.46
Savings		1,092,738		896		0.11			1,049,655		2,874		0.37
Certificates of deposit		1,714,448		6,951		0.54			1,930,970		17,778		1.23
Total interest-bearing deposits		4,844,911		11,293		0.31			4,639,062		26,379		0.76
Borrowings		690,372		10,422		2.01			1,020,472		14,865		1.94
Total interest-bearing liabilities		5,535,283		21,715		0.52			5,659,534		41,244		0.97
Non-interest-bearing liabilities (4)		671,935							572,249
Total liabilities		6,207,218							6,231,783
Stockholders' equity		1,004,616							1,103,746
Total liabilities and stockholders' equity	$	7,211,834						$	7,335,529

Net interest income			$	146,004						$	139,169
Interest rate spread (5)						2.87	%						2.61	%
Net interest margin (6)						2.95	%						2.77	%
Ratio of interest-earning assets to interest-bearing liabilities		1.19							1.19


	At March 31, 2022
	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)	$	668,961		14.14	%	$	378,457		8.00	%	$	473,071		10.00	%
Tier 1 capital (to risk-weighted assets)		641,798		13.57	%		283,843		6.00	%		378,457		8.00	%
Common equity tier 1 capital (to risk-weighted assets)		641,798		13.57	%		212,882		4.50	%		307,496		6.50	%
Tier 1 capital (to adjusted total assets)		641,798		9.14	%		280,960		4.00	%		351,200		5.00	%


	At June 30, 2021
	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)	$	761,883		17.22	%	$	353,970		8.00	%	$	442,462		10.00	%
Tier 1 capital (to risk-weighted assets)		726,737		16.42	%		265,477		6.00	%		353,970		8.00	%
Common equity tier 1 capital (to risk-weighted assets)		726,737		16.42	%		199,108		4.50	%		287,600		6.50	%
Tier 1 capital (to adjusted total assets)		726,737		10.23	%		284,114		4.00	%		355,142		5.00	%

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

120 Passaic Ave., Fairfield,, New Jersey

(Address of principal executive offices)

(Zip Code)