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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
FORM 10-Q
__________________________________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to
Commission File Number 001-37399
__________________________________________
KEARNY FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
__________________________________________
Maryland30-0870244
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification Number)
120 Passaic Ave., Fairfield, New Jersey
07004
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code
973-244-4500
__________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueKRNYThe NASDAQ Stock Market LLC
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 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 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 filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: April 30, 2024.
$0.01 par value common stock — 64,436,995 shares outstanding

KEARNY FINANCIAL CORP. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
Number



KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share and Per Share Data)
March 31,
2024		June 30,
2023
(Unaudited)
Assets
Cash and amounts due from depository institutions $16,162 $21,795 
Interest-bearing deposits in other banks54,865 48,720 
Cash and cash equivalents71,027 70,515 
Investment securities available for sale (amortized cost of $1,232,173 and $1,383,867, respectively)
1,098,655 1,227,729 
Investment securities held to maturity (fair value of $123,576 and $131,169, respectively)
139,643 146,465 
Loans held-for-sale4,117 9,591 
Loans receivable5,758,336 5,829,421 
Less: allowance for credit losses on loans(44,930)(48,734)
Net loans receivable5,713,406 5,780,687 
Premises and equipment45,053 48,309 
Federal Home Loan Bank (“FHLB”) of New York stock81,347 71,734 
Accrued interest receivable31,065 28,133 
Goodwill210,895 210,895 
Core deposit intangibles2,057 2,457 
Bank owned life insurance296,493 292,825 
Deferred income tax assets, net47,225 51,973 
Other real estate owned— 12,956 
Other assets100,989 110,546 
Total Assets $7,841,972 $8,064,815 
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest-bearing $586,089 $609,999 
Interest-bearing4,622,961 5,019,184 
Total deposits5,209,050 5,629,183 
Borrowings1,722,178 1,506,812 
Advance payments by borrowers for taxes17,387 18,338 
Other liabilities44,279 41,198 
Total Liabilities6,992,894 7,195,531 
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; 64,436,995 shares and 65,864,075 shares issued and outstanding, respectively
644 659 
Paid-in capital493,187 503,332 
Retained earnings440,308 457,611 
Unearned employee stock ownership plan shares; 2,207,675 shares and 2,358,198 shares, respectively
(21,402)(22,862)
Accumulated other comprehensive loss(63,659)(69,456)
Total Stockholders' Equity849,078 869,284 
Total Liabilities and Stockholders' Equity$7,841,972 $8,064,815 
See notes to unaudited consolidated financial statements.
- 1 -
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,		Nine Months Ended
March 31,
2024202320242023
Interest Income
Loans$64,035 $60,172 $190,188 $171,103 
Taxable investment securities15,490 15,459 48,511 39,119 
Tax-exempt investment securities85 99 256 603 
Other interest-earning assets2,475 1,441 6,923 3,207 
Total Interest Income82,085 77,171 245,878 214,032 
Interest Expense
Deposits32,320 22,246 90,227 51,937 
Borrowings15,446 12,554 46,333 26,410 
Total Interest Expense47,766 34,800 136,560 78,347 
Net Interest Income34,319 42,371 109,318 135,685 
Provision for credit losses 349 451 2,699 2,792 
Net Interest Income after Provision for Credit Losses 33,970 41,920 106,619 132,893 
Non-Interest Income
Fees and service charges657 910 2,029 2,407 
Loss on sale and call of securities— — (18,135)(15,227)
Loss on sale of loans(712)(2,373)(393)(1,844)
Loss on write down of other real estate owned— — (974)— 
Income from bank owned life insurance3,039 1,581 5,867 7,040 
Electronic banking fees and charges464 457 1,227 1,360 
Other income755 1,071 2,580 5,349 
Total Non-Interest Income4,203 1,646 (7,799)(915)
Non-Interest Expense
Salaries and employee benefits16,911 18,005 51,954 58,274 
Net occupancy expense of premises2,863 3,097 8,295 9,174 
Equipment and systems3,823 3,537 11,438 11,066 
Advertising and marketing387 413 916 1,891 
Federal deposit insurance premium1,429 1,546 4,448 3,678 
Directors' compensation360 340 1,146 1,019 
Other expense3,286 3,414 10,403 9,888 
Total Non-Interest Expense29,059 30,352 88,600 94,990 
Income before Income Taxes9,114 13,214 10,220 36,988 
Income tax expense 1,717 2,902 6,808 8,190 
Net Income$7,397 $10,312 $3,412 $28,798 
Net Income per Common Share (EPS)
Basic$0.12 $0.16 $0.06 $0.44 
Diluted$0.12 $0.16 $0.06 $0.44 
Weighted Average Number of Common Shares Outstanding
Basic62,20564,76962,50765,181
Diluted62,21164,78362,50765,191
See notes to unaudited consolidated financial statements.
- 2 -
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Unaudited)
Three Months Ended
March 31,		Nine Months Ended
March 31,
2024202320242023
Net Income$7,397 $10,312 $3,412 $28,798 
Other Comprehensive Income (Loss) , net of tax:
Net unrealized (loss) gain on securities available for sale(6,449)6,903 3,225 (27,299)
Net realized loss on sale and call of securities available for sale— — 12,876 10,811 
Fair value adjustments on derivatives6,630 (10,931)(10,206)(806)
Benefit plan adjustments(10)(4)(98)(32)
Total Other Comprehensive Income (Loss)171 (4,032)5,797 (17,326)
Total Comprehensive Income$7,568 $6,280 $9,209 $11,472 
See notes to unaudited consolidated financial statements.
- 3 -
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In Thousands, Except Per Share Data, Unaudited)
Common Stock Paid-In
Capital 		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Loss		Total
Shares Amount
Balance - December 31, 202267,388$674 $515,332 $449,489 $(23,834)$(69,021)$872,640 
Net income—— — 10,312 — — 10,312 
Other comprehensive loss, net of income tax —— — — — (4,032)(4,032)
ESOP shares committed to be released (50 shares)
—— (1)— 486 — 485 
Stock repurchases(698)(7)(6,685)— — — (6,692)
Stock-based compensation expense—— 811 — — — 811 
Cancellation of shares issued for restricted stock awards(10)— (98)— — — (98)
Cash dividends declared ($0.11 per common share)
—— — (7,196)— — (7,196)
Balance - March 31, 202366,680$667 $509,359 $452,605 $(23,348)$(73,053)$866,230 
Common Stock Paid-In
Capital 		Retained
Earnings 		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Loss		Total
Shares Amount
Balance - June 30, 202268,666$687 $528,396 $445,451 $(24,807)$(55,727)$894,000 
Net income—— — 28,798 — — 28,798 
Other comprehensive loss, net of income tax—— — — — (17,326)(17,326)
ESOP shares committed to be released (150 shares)
—— 105 — 1,459 — 1,564 
Stock repurchases(2,008)(21)(21,109)— — — (21,130)
Issuance of stock under stock benefit plans611 (1)— — — — 
Stock-based compensation expense—— 2,407 — — — 2,407 
Cancellation of shares issued for restricted stock awards(39)— (439)— — — (439)
Cash dividends declared ($0.33 per common share)
—— — (21,644)— — (21,644)
Balance - March 31, 202366,680$667 $509,359 $452,605 $(23,348)$(73,053)$866,230 
- 4 -
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Continued)
(In Thousands, Except Per Share Data, Unaudited)
Common Stock Paid-In
Capital		Retained
Earnings 		Unearned
ESOP
Shares 		Accumulated
Other
Comprehensive
Loss		Total
Shares Amount
Balance - December 31, 202364,445$645 $493,297 $439,755 $(21,889)$(63,830)$847,978 
Net Income—— — 7,397 — — 7,397 
Other comprehensive income, net of income tax—— — — — 171 171 
ESOP shares committed to be released (50 shares)
—— (135)— 487 — 352 
Stock-based compensation expense—— 95 — — — 95 
Cancellation of shares issued for restricted stock awards(8)(1)(70)— — — (71)
Cash dividends declared ($0.11 per common share)
—— — (6,844)— — (6,844)
Balance - March 31, 202464,437$644 $493,187 $440,308 $(21,402)$(63,659)$849,078 

Common Stock Paid-In
Capital 		Retained
Earnings 		Unearned
ESOP
Shares 		Accumulated
Other
Comprehensive
Loss		Total
Shares Amount
Balance - June 30, 202365,864$659 $503,332 $457,611 $(22,862)$(69,456)$869,284 
Net Income—— — 3,412 — — 3,412 
Other comprehensive income, net of income tax—— — — — 5,797 5,797 
ESOP shares committed to be released (150 shares)
—— (337)— 1,460 — 1,123 
Stock repurchases(1,505)(15)(11,225)— — — (11,240)
Issuance of stock under stock benefit plans1331 (1)— — — — 
Stock-based compensation expense—— 1,887 — — — 1,887 
Cancellation of shares issued for restricted stock awards(55)(1)(469)— — — (470)
Cash dividends declared ($0.33 per common share)
—— — (20,715)— — (20,715)
Balance - March 31, 202464,437 $644 $493,187 $440,308 $(21,402)$(63,659)$849,078 
See notes to unaudited consolidated financial statements.
- 5 -
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands, Unaudited)
Nine Months Ended
March 31,
20242023
Cash Flows from Operating Activities:
Net income$3,412 $28,798 
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment3,590 4,353 
Net accretion of yield adjustments(2,038)(4,306)
Deferred income taxes2,438 3,150 
Amortization of intangible assets400 430 
Accretion of benefit plans’ unrecognized net gain(139)(44)
Provision for credit losses 2,699 2,792 
Loss on write-down of other real estate owned974 — 
Loans originated for sale(53,979)(76,852)
Proceeds from sale of mortgage loans held-for-sale69,814 101,054 
Gain on sale of mortgage loans held-for-sale, net393 1,899 
Realized loss on sale/call of investment securities available for sale18,135 15,227 
Realized gain on sale of loans receivable— (55)
Realized gain on disposition of premises and equipment(11)(2,886)
Increase in cash surrender value of bank owned life insurance(5,867)(7,040)
ESOP and stock-based compensation expense3,010 3,971 
Increase in interest receivable(2,932)(8,328)
(Increase) decrease in other assets(6,004)93 
Increase in interest payable466 9,073 
Increase (decrease) in other liabilities2,352 (13,428)
Net Cash Provided by Operating Activities36,713 57,901 
Cash Flows from Investing Activities:
Purchases of:
Investment securities available for sale(64,000)(166,483)
Investment securities held to maturity(300)(40,398)
Proceeds from:
Repayments/calls/maturities of investment securities available for sale94,129 100,149 
Repayments/calls/maturities of investment securities held to maturity7,019 8,831 
Sales of investment securities available for sale104,083 105,199 
Purchase of loans(60,341)(702)
Net decrease (increase) in loans receivable118,330 (559,794)
Proceeds from sale of loans receivable— 706 
Purchase of interest rate contracts(887)(758)
Proceeds from the sale of other real estate owned11,982 — 
Additions to premises and equipment(323)(1,255)
Proceeds from death benefit of bank owned life insurance1,900 4,997 
Net surrender of bank owned life insurance299 — 
Proceeds from cash settlement of premises and equipment— 3,480 
Purchase of FHLB stock(54,544)(84,310)
Redemption of FHLB stock44,931 55,135 
Net Cash Provided by (Used in) Investing Activities202,278 (575,203)
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,
20242023
Cash Flows from Financing Activities:
Net decrease in deposits(420,105)(58,613)
Repayment of term FHLB advances(4,475,000)(4,615,000)
Proceeds from term FHLB advances and other borrowings4,650,000 5,120,000 
Net increase in other short-term borrowings40,000 205,000 
Net (decrease) increase in advance payments by borrowers for taxes(951)1,960 
Repurchase and cancellation of common stock of Kearny Financial Corp.(11,240)(21,130)
Cancellation of shares repurchased on vesting to pay taxes(470)(439)
Dividends paid(20,713)(21,523)
Net Cash (Used in) Provided by Financing Activities(238,479)610,255 
Net Increase in Cash and Cash Equivalents512 92,953 
Cash and Cash Equivalents - Beginning70,515 101,615 
Cash and Cash Equivalents - Ending$71,027 $194,568 
Supplemental Disclosures of Cash Flows Information:
Cash paid during the period for:
Income taxes, net of refunds$4,819 $8,618 
Interest$136,094 $69,707 
Non-cash investing and financing activities:
Acquisition of other real estate owned in settlement of loans$— $13,232 
Transfers from loans receivable to loans held-for-sale$10,754 $2,628 
See notes to unaudited consolidated financial statements.
- 7 -
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 subsidiaries. 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 nine months ended March 31, 2024 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 at June 30, 2023 was derived from the Company’s 2023 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 2023 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 2023 Annual Report on Form 10-K. There have been no material changes to the Company’s significant accounting policies since June 30, 2023.
2.    SUBSEQUENT EVENTS
The Company has evaluated events and transactions occurring subsequent to the statement of financial condition date of March 31, 2024, 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 April 25, 2024, the Company declared a quarterly cash dividend of $0.11 per share, payable on May 22, 2024 to stockholders of record as of May 8, 2024.
3.    RECENT ACCOUNTING PRONOUNCEMENTS
In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. This ASU requires enhanced disclosures of segment information for all public entities, including those that have a single reportable segment, primarily in the area of segment revenues and expenses. Entities that have a single reportable segment, like the Company, will be required to provide all the disclosures required by this ASU and all existing segment disclosures requirements in ASC 280, Segment Reporting. This ASU is effective for the Company on July 1, 2024. The Company is currently evaluating the effect this ASU will have on the Company’s segment disclosures.
Recently Adopted Accounting Standards
In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) 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.
- 8 -
Effective July 1, 2023, the Company adopted ASU 2022-02. Under ASU 2022-02, the Company assesses all loan modifications to determine whether one is granted to a borrower experiencing financial difficulty, regardless of whether the modified loan terms include a concession. Modifications granted to borrowers experiencing financial difficulty may be in the form of an interest rate reduction, an other-than-insignificant payment delay, a term extension, principal forgiveness or a combination thereof.
The Company adopted ASU 2022-02 on a prospective basis. The adoption of this update did not have a material effect on the Company’s consolidated financial statements. Additional disclosures are included in Note 5 to the consolidated financial statements.
Prior to the adoption of ASU 2022-02, a Troubled Debt Restructuring (“TDR”) occurred when the terms of a loan were modified because of deterioration in the financial condition of the borrower. Modifications could include extension of the repayment terms of the loan, reduced interest rates, or forgiveness of accrued interest and/or principal. For the Company's accounting policy related to TDRs granted prior to the adoption of ASU 2022-02, see “Note 1. Summary of Significant Accounting Policies” included in “Item 8. Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023.
4.    SECURITIES
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, 2024
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance for
Credit Losses		Fair
Value
(In Thousands)
Available for sale:    
Debt securities:    
Asset-backed securities$86,707 $193 $540 $— $86,360 
Collateralized loan obligations405,125 2,023 453 — 406,695 
Corporate bonds145,911 — 20,830 — 125,081 
Total debt securities637,743 2,216 21,823 — 618,136 
    
Mortgage-backed securities:    
Residential pass-through securities (1)
437,009 7 92,044 — 344,972 
Commercial pass-through securities (1)
157,421 — 21,874 — 135,547 
Total mortgage-backed securities594,430 7 113,918 — 480,519 
    
Total securities available for sale$1,232,173 $2,223 $135,741 $— $1,098,655 
___________________________
(1)Government-sponsored enterprises.
- 9 -
June 30, 2023
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance for
Credit Losses		Fair
Value
(In Thousands)
Available for sale:    
Debt securities:    
Asset-backed securities$138,281 $4 $2,115 $— $136,170 
Collateralized loan obligations381,915 268 5,187 — 376,996 
Corporate bonds159,666 — 24,648 — 135,018 
Total debt securities679,862 272 31,950 — 648,184 
    
Mortgage-backed securities:   
Residential pass-through securities (1)
539,506 2 103,357 — 436,151 
Commercial pass-through securities (1)
164,499 — 21,105 — 143,394 
Total mortgage-backed securities704,005 2 124,462 — 579,545 
   
Total securities available for sale$1,383,867 $274 $156,412 $— $1,227,729 
___________________________
(1)Government-sponsored enterprises.
March 31, 2024
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$14,345 $2 $271 $— $14,076 
Total debt securities14,345 2 271 — 14,076 
    
Mortgage-backed securities:    
Residential pass-through securities (1)
113,075 — 13,727 — 99,348 
Commercial pass-through securities (1)
12,223 — 2,071 — 10,152 
Total mortgage-backed securities125,298 — 15,798 — 109,500 
    
Total securities held to maturity$139,643 $2 $16,069 $— $123,576 
___________________________
(1)Government-sponsored enterprises.
- 10 -
June 30, 2023
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$16,051 $— $321 $— $15,730 
Total debt securities16,051 — 321 — 15,730 
  
Mortgage-backed securities:  
Residential pass-through securities (1)
118,166 — 12,736 — 105,430 
Commercial pass-through securities (1)
12,248 — 2,239 — 10,009 
Total mortgage-backed securities130,414 — 14,975 — 115,439 
  
Total securities held to maturity$146,465 $— $15,296 $— $131,169 
___________________________
(1)Government-sponsored enterprises.
Excluding the balances of mortgage-backed securities, the following tables present the amortized cost and estimated fair values of debt securities available for sale and held to maturity, by contractual maturity, at March 31, 2024:
March 31, 2024
Amortized
Cost		Fair
Value
(In Thousands)
Available for sale debt securities:
Due in one year or less$— $— 
Due after one year through five years31,865 29,942 
Due after five years through ten years379,427 363,512 
Due after ten years226,451 224,682 
Total$637,743 $618,136 
March 31, 2024
Amortized
Cost		Fair
Value
(In Thousands)
Held to maturity debt securities:
Due in one year or less$5,629 $5,581 
Due after one year through five years8,108 7,908 
Due after five years through ten years608 587 
Due after ten years— — 
Total$14,345 $14,076 
- 11 -
Three Months Ended
March 31,		Nine Months Ended
March 31,
2024202320242023
(In Thousands)
Available for sale securities sold:
Proceeds from sales of securities$— $— $104,083 $105,199 
Gross realized losses$— $— $(18,135)$(15,227)
Net loss on sales of securities$— $— $(18,135)$(15,227)

The carrying value of securities pledged were as follows as of the dates presented below:
March 31,
2024		June 30,
2023
(In Thousands)
Securities pledged:
Pledged to secure public funds on deposit$154,608 $201,239 
Pledged for potential borrowings at the Federal Reserve Bank of New York507,101 529,216 
Pledged for the bank term funding program90,796 — 
Total carrying value of securities pledged$752,505 $730,455 
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, 2024 and June 30, 2023:
March 31, 2024
Less than 12 Months 12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Number of SecuritiesFair
Value		Unrealized
Losses
(Dollars in Thousands)
Securities Available for Sale:
Asset-backed securities$17,864 $378 $55,186 $162 10$73,050 $540 
Collateralized loan obligations851 — 126,886 453 10127,737 453 
Corporate bonds— — 125,081 20,830 27125,081 20,830 
Commercial pass-through securities46,890 1,217 88,656 20,657 9135,546 21,874 
Residential pass-through securities56 1 344,458 92,043 102344,514 92,044 
Total$65,661 $1,596 $740,267 $134,145 158$805,928 $135,741 
June 30, 2023
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Number of SecuritiesFair
Value		Unrealized
Losses
(Dollars in Thousands)
Securities Available for Sale:
Asset-backed securities$33,833 $129 $98,828 $1,986 14$132,661 $2,115 
Collateralized loan obligations46,903 135 294,813 5,052 26341,716 5,187 
Corporate bonds25,511 1,354 109,507 23,294 31135,018 24,648 
Commercial pass-through securities63,531 1,380 79,863 19,725 12143,394 21,105 
Residential pass-through securities10,520 702 425,170 102,655 108435,690 103,357 
Total$180,298 $3,700 $1,008,181 $152,712 191$1,188,479 $156,412 
- 12 -
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, 2024 and June 30, 2023:
March 31, 2024
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrecognized
Losses		Fair
Value		Unrecognized
Losses		Number of SecuritiesFair
Value		Unrecognized
Losses
(Dollars in Thousands)
Securities Held to Maturity:
Obligations of state and political subdivisions$458 $6 $13,317 $265 26$13,775 $271 
Commercial pass-through securities— — 10,152 2,071 110,152 2,071 
Residential pass-through securities36,152 201 63,196 13,526 999,348 13,727 
Total$36,610 $207 $86,665 $15,862 36$123,275 $16,069 
June 30, 2023
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrecognized
Losses		Fair
Value		Unrecognized
Losses		Number of SecuritiesFair
Value		Unrecognized
Losses
(Dollars in Thousands)
Securities Held to Maturity:
Obligations of state and political subdivisions$13,642 $268 $2,088 $53 32$15,730 $321 
Commercial pass-through securities— — 10,009 2,239 110,009 2,239 
Residential pass-through securities38,135 319 67,295 12,417 9105,430 12,736 
Total$51,777 $587 $79,392 $14,709 42$131,169 $15,296 
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 of 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, 2024. 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. No allowance for credit losses was recorded at March 31, 2024 on available for sale securities.
The sale of available for sale securities during the nine months ended March 31, 2024 was part of an investment security repositioning completed in December 2023. The sale proceeds were utilized for reinvestment into higher yielding loans and investment securities, and for repayment of higher-cost wholesale borrowings. The Company was not required to sell these securities.
At March 31, 2024, 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, 2024 on held to maturity securities.
- 13 -
5.    LOANS RECEIVABLE
The following table sets forth the composition of the Company’s loan portfolio at March 31, 2024 and June 30, 2023:
March 31,
2024		June 30,
2023
(In Thousands)
Commercial loans:
Multi-family mortgage$2,645,195 $2,761,775 
Nonresidential mortgage965,539 968,574 
Commercial business147,326 146,861 
Construction229,457 226,609 
Total commercial loans3,987,517 4,103,819 
One- to four-family residential mortgage1,741,644 1,700,559 
Consumer loans:
Home equity loans42,731 43,549 
Other consumer3,198 2,549 
Total consumer loans45,929 46,098 
Total loans5,775,090 5,850,476 
Unaccreted yield adjustments (1)
(16,754)(21,055)
Total loans receivable, net of yield adjustments$5,758,336 $5,829,421 
___________________________
(1)At March 31, 2024 and June 30, 2023, included a fair value adjustment to the carrying amount of hedged one- to four-family residential mortgage loans.
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, 2024 and June 30, 2023, by loan segment:
Payment Status
March 31, 2024
30-59 Days60-89 Days90 Days and OverTotal Past DueCurrentTotal
(In Thousands)
Multi-family mortgage$2,725 $— $19,912 $22,637 $2,622,558 $2,645,195 
Nonresidential mortgage5,912 174 3,230 9,316 956,223 965,539 
Commercial business1,495 104 640 2,239 145,087 147,326 
Construction— — — — 229,457 229,457 
One- to four-family residential mortgage2,308 2,043 2,893 7,244 1,734,400 1,741,644 
Home equity loans325 25 19 369 42,362 42,731 
Other consumer— — — — 3,198 3,198 
Total loans$12,765 $2,346 $26,694 $41,805 $5,733,285 $5,775,090 
Payment Status
June 30, 2023
30-59 Days60-89 Days90 Days and OverTotal Past DueCurrentTotal
(In Thousands)
Multi-family mortgage$2,958 $— $10,756 $13,714 $2,748,061 $2,761,775 
Nonresidential mortgage792 — 8,233 9,025 959,549 968,574 
Commercial business528 16 236 780 146,081 146,861 
Construction— — — — 226,609 226,609 
One- to four-family residential mortgage2,019 1,202 3,731 6,952 1,693,607 1,700,559 
Home equity loans25 — 50 75 43,474 43,549 
Other consumer— — — — 2,549 2,549 
Total loans$6,322 $1,218 $23,006 $30,546 $5,819,930 $5,850,476 
- 14 -
Nonperforming Loans
Loans are generally placed on nonaccrual status when contractual payments become 90 or more days past due or when the Company does not expect to receive all principal and interest payments owed substantially in accordance with the terms of the loan agreement, regardless of past due status. Loans that become 90 days past due, but are well secured and in the process of collection, may remain on accrual status. Nonaccrual loans are generally returned to accrual status when all payments due are brought current and the Company expects to receive all remaining principal and interest payments owed substantially in accordance with the terms of the loan agreement. Payments received in cash on nonaccrual loans, including both the principal and interest portions of those payments, are generally applied to reduce the carrying value of the loan. The Company did not recognize interest income on non-accrual loans during the nine months ended March 31, 2024 and 2023.
The following tables present information relating to the Company’s nonperforming loans as of March 31, 2024 and June 30, 2023:
Performance Status
March 31, 2024
90 Days and Over Past Due AccruingNonaccrual Loans with Allowance for Credit LossesNonaccrual Loans with no Allowance for Credit LossesTotal NonperformingPerformingTotal
(In Thousands)
Multi-family mortgage$— $1,904 $23,278 $25,182 $2,620,013 $2,645,195 
Nonresidential mortgage— 174 4,314 4,488 961,051 965,539 
Commercial business— 827 3,362 4,189 143,137 147,326 
Construction— — — — 229,457 229,457 
One- to four-family residential mortgage— 1,379 4,263 5,642 1,736,002 1,741,644 
Home equity loans— — 45 45 42,686 42,731 
Other consumer— — — — 3,198 3,198 
Total loans$— $4,284 $35,262 $39,546 $5,735,544 $5,775,090 
Performance Status
June 30, 2023
90 Days and Over Past Due AccruingNonaccrual Loans with Allowance for Credit LossesNonaccrual Loans with no Allowance for Credit LossesTotal NonperformingPerformingTotal
(In Thousands)
Multi-family mortgage$— $5,686 $13,428 $19,114 $2,742,661 $2,761,775 
Nonresidential mortgage— 11,815 4,725 16,540 952,034 968,574 
Commercial business— 71 181 252 146,609 146,861 
Construction— — — — 226,609 226,609 
One- to four-family residential mortgage— 1,640 5,031 6,671 1,693,888 1,700,559 
Home equity loans— — 50 50 43,499 43,549 
Other consumer— — — — 2,549 2,549 
Total loans$— $19,212 $23,415 $42,627 $5,807,849 $5,850,476 
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Effective July 1, 2023, the Company adopted ASU 2022-02, which eliminated the accounting for TDRs while expanding loan modification and vintage disclosure requirements. See Note 3 to the consolidated financial statements for further information.

- 15 -
The following tables presents the amortized cost basis at March 31, 2024 of loan modifications made to borrowers experiencing financial difficulty that were restructured during the three and nine months ended March 31, 2024 by type of modification:
Three Months Ended March 31, 2024
Payment DelayTerm ExtensionTotalPercent of Total Class
(Dollars In Thousands)
Nonresidential mortgage$— $786 $786 0.08 %
Total$— $786 $786 0.01 %

Nine Months Ended March 31, 2024
Payment DelayTerm ExtensionTotalPercent of Total Class
(Dollars In Thousands)
Multi-family mortgage$2,774 $— $2,774 0.10 %
Nonresidential mortgage— 786 786 0.08 %
Commercial business45 — 45 0.03 %
One- to four-family residential mortgage489 45 534 0.03 %
Home equity loans— 25 25 0.06 %
Total$3,308 $856 $4,164 0.08 %

No modifications involved forgiveness of principal or interest rate reductions. There were no commitments to lend additional funds to borrowers experiencing financial difficulty whose terms have been restructured at March 31, 2024.
All loans to borrowers experiencing financial difficulty that have been modified during the three months ended March 31, 2024 were current to their contractual payments as of March 31, 2024. During the nine months ended March 31, 2024 (since adoption of ASU 2022-02), one residential mortgage loan with a carrying value of $490,000 was modified and subsequently defaulted on payment. For restructured loans, a subsequent payment default is defined in terms of delinquency, when a principal or interest payment is 90 days past due or classified into non-accrual status during the reporting period.
Troubled Debt Restructured Loans prior to the adoption of ASU 2022-02
Prior to the adoption of ASU 2022-02, the Company classified certain loans as TDRs when credit terms to a borrower in financial difficulty were modified, in accordance with ASC 310-40. With the adoption of ASU 2022-02 the Company has ceased to recognize or measure for new TDRs, but those existing at June 30, 2023 will remain until settled.
At June 30, 2023 the Company had TDRs totaling $17.4 million. The allowance for credit losses associated with these TDRs totaled $274,000 as of June 30, 2023.
- 16 -
The following table presents total TDRs at June 30, 2023:
June 30, 2023
AccrualNon-accrualTotal
# of LoansAmount# of LoansAmount# of LoansAmount
(Dollars In Thousands)
Commercial loans:
Multi-family mortgage—$— 2$5,400 2$5,400 
Nonresidential mortgage3170 2700 5870 
Commercial business63,197 —— 63,197 
Total commercial loans93,367 46,100 139,467 
One- to four-family residential mortgage396,752 4774 437,526 
Consumer loans:
Home equity loans6368 —— 6368 
Total54$10,487 8$6,874 62$17,361 
As of March 31, 2024, there were no significant commitments to lend additional funds to borrowers whose loans had been restructured in a TDR.
The following table presents information regarding TDRs that occurred during the three and nine months ended March 31, 2023:
Three Months Ended March 31, 2023
# of LoansPre-
modification
Recorded
Investment		Post-
modification
Recorded
Investment
(Dollars In Thousands)
Commercial business1$67 $67 
Total1$67 $67 
Nine Months Ended March 31, 2023
# of LoansPre-
modification
Recorded
Investment		Post-
modification
Recorded
Investment
(Dollars In Thousands)
Commercial business2$74 $74 
One- to four-family residential mortgage2708 705 
Home equity loans135 35 
Total 5$817 $814 
During the three and nine months ended March 31, 2023, there were charge-offs of $6,000 and $103,000, respectively, related to TDRs. During the three and nine months ended March 31, 2023, there were two TDR defaults totaling $649,000.
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 and nine months ended March 31, 2023, capitalized prior past due amounts and modified the repayment terms.
- 17 -
Individually Analyzed Loans
Individually analyzed loans include loans which do not share similar risk characteristics with other loans. Loans previously modified as TDRs and loan modifications made to borrowers experiencing financial difficulty 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, the loans would generally be removed from individual impairment analysis and returned to its corresponding pool. As of March 31, 2024, the carrying value of individually analyzed loans, including loans acquired with deteriorated credit quality that were individually analyzed, totaled $39.5 million, of which $32.8 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 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.
The following table presents the carrying value and related allowance of collateral dependent individually analyzed loans at the dates indicated:
March 31, 2024June 30, 2023
Carrying ValueRelated AllowanceCarrying ValueRelated Allowance
(In Thousands)
Commercial loans:
Multi-family mortgage$25,182 $9 $19,114 $326 
Nonresidential mortgage (1)
3,230 — 16,207 3,001 
Commercial business (2)
3,323 — — — 
Total commercial loans31,735 9 35,321 3,327 
One- to four-family residential mortgage (2)
1,056 — 2,875 — 
Consumer loans:
Home equity loans (2)
19 — — — 
Total$32,810 $9 $38,196 $3,327 
___________________________
(1)Secured by income-producing nonresidential property.
(2)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.
- 18 -
The following table presents the risk category of loans and current period gross charge-offs as of March 31, 2024 by loan segment and vintage year:
Term Loans by Origination Year for Fiscal Years ended June 30,
20242023202220212020PriorRevolving LoansTotal
(In Thousands)
Multi-family mortgage:
Pass$16,520 $598,167 $953,096 $217,401 $201,040 $611,894 $— $2,598,118 
Special Mention— — — — — 6,519 — 6,519 
Substandard— — — 9,626 — 30,932 — 40,558 
Doubtful— — — — — — — — 
Total multi-family mortgage16,520 598,167 953,096 227,027 201,040 649,345 — 2,645,195 
Multi-family current period gross charge-offs— — — — — 389 — 389 
Nonresidential mortgage:
Pass64,851 106,424 205,793 90,222 50,767 420,499 150 938,706 
Special Mention— — — — — 11,217 — 11,217 
Substandard— — — 871 — 14,745 — 15,616 
Doubtful— — — — — — — — 
Total nonresidential mortgage64,851 106,424 205,793 91,093 50,767 446,461 150 965,539 
Nonresidential current period gross charge-offs— — — — — 5,975 — 5,975 
Commercial business:
Pass10,216 8,906 26,884 18,963 6,401 8,470 57,867 137,707 
Special Mention— — 1,618 464 — 1,775 — 3,857 
Substandard— — — 3,406 179 2,049 128 5,762 
Doubtful— — — — — — — — 
Total commercial business10,216 8,906 28,502 22,833 6,580 12,294 57,995 147,326 
Commercial current period gross charge-offs— — — 5 336 11 — 352 
Construction loans:
Pass36,988 43,602 43,182 67,408 8,352 3,751 5,735 209,018 
Special Mention— — — 20,439 — — — 20,439 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total construction loans36,988 43,602 43,182 87,847 8,352 3,751 5,735 229,457 
Residential mortgage:
Pass139,316 185,852 439,300 467,793 78,137 419,604 267 1,730,269 
Special Mention— 514 — — — 1,656 — 2,170 
Substandard— — 528 — — 8,677 — 9,205 
Doubtful— — — — — — — — 
Total residential mortgage139,316 186,366 439,828 467,793 78,137 429,937 267 1,741,644 
Residential current period gross charge-offs— — — — — 37 — 37 
Home equity loans:
Pass1,239 6,082 2,300 359 1,069 8,406 22,934 42,389 
Special Mention— — — — — — 95 95 
Substandard— — — — — 247 — 247 
Doubtful— — — — — — — — 
Total home equity loans1,239 6,082 2,300 359 1,069 8,653 23,029 42,731 
Other consumer loans
Pass1,017 231 213 129 466 1,015 40 3,111 
Special Mention— — — — — — — — 
Substandard— — — — — — 1 1 
Doubtful— — — — — — 86 86 
Other consumer loans1,017 231 213 129 466 1,015 127 3,198 
Total loans$270,147 $949,778 $1,672,914 $897,081 $346,411 $1,551,456 $87,303 $5,775,090 
Total current period gross charge-offs$— $— $— $5 $336 $6,412 $— $6,753 
- 19 -
The following table presents the risk category of loans as of June 30, 2023 by loan segment and vintage year:
Term Loans by Origination Year for Fiscal Years ended June 30,
20232022202120202019PriorRevolving LoansTotal
(In Thousands)
Multi-family mortgage:
Pass$603,260 $954,554 $213,482 $198,969 $226,929 $510,485 $— $2,707,679 
Special Mention— — — — 6,006 6,647 — 12,653 
Substandard— — 9,809 — 9,432 22,202 — 41,443 
Doubtful— — — — — — — — 
Total multi-family mortgage603,260 954,554 223,291 198,969 242,367 539,334 — 2,761,775 
Nonresidential mortgage:
Pass109,725 220,443 83,032 51,933 59,197 414,742 6,000 945,072 
Special Mention— — — — — 378 — 378 
Substandard— — 708 — 919 21,497 — 23,124 
Doubtful— — — — — — — — 
Total nonresidential mortgage109,725 220,443 83,740 51,933 60,116 436,617 6,000 968,574 
Commercial business:
Pass10,364 28,644 25,304 7,875 1,731 8,776 59,031 141,725 
Special Mention— — — 47 176 2,456 371 3,050 
Substandard— — — 395 60 1,385 246 2,086 
Doubtful— — — — — — — — 
Total commercial business10,364 28,644 25,304 8,317 1,967 12,617 59,648 146,861 
Construction loans:
Pass25,070 36,389 143,086 12,275 2,961 1,093 5,735 226,609 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total construction loans25,070 36,389 143,086 12,275 2,961 1,093 5,735 226,609 
Residential mortgage:
Pass195,521 454,504 491,460 80,431 45,741 422,472 — 1,690,129 
Special Mention— — — — 1,168 425 — 1,593 
Substandard— 542 — — 80 8,215 — 8,837 
Doubtful— — — — — — — — 
Total residential mortgage195,521 455,046 491,460 80,431 46,989 431,112 — 1,700,559 
Home equity loans:
Pass7,682 2,567 607 1,264 2,478 7,280 21,384 43,262 
Special Mention— — — — — — — — 
Substandard— — — — — 287 — 287 
Doubtful— — — — — — — — 
Total home equity loans7,682 2,567 607 1,264 2,478 7,567 21,384 43,549 
Other consumer loans
Pass367 247 110 494 302 912 42 2,474 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — 75 75 
Other consumer loans367 247 110 494 302 912 117 2,549 
Total loans$951,989 $1,697,890 $967,598 $353,683 $357,180 $1,429,252 $92,884 $5,850,476 
- 20 -
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, 2024, the Company held one residential mortgage loan with an aggregate carrying value of $558,100 and five commercial mortgage loans with aggregate carrying values totaling $10.6 million which were in the process of foreclosure. As of June 30, 2023, the Company held one nonresidential property with a carrying value of $13.0 million in other real estate owned that was acquired through foreclosure on a nonresidential mortgage loan and was sold in January 2024. As of that same date, the Company held three residential mortgage loans with aggregate carrying values totaling $950,000 and six commercial mortgage loans with aggregate carrying values totaling $9.2 million which were in the process of foreclosure.
6.    ALLOWANCE FOR CREDIT LOSSES
Allowance for Credit Losses on Loans Receivable
The following tables present the balance of the allowance for credit losses at March 31, 2024 and June 30, 2023. The balance of the allowance for credit losses is based on an expected loss methodology, referred to as the “CECL” methodology. The tables identify the valuation allowances attributable to specifically identified impairments on individually analyzed loans, including those acquired with deteriorated credit quality, as well as valuation allowances for impairments on loans collectively evaluated. The tables include the underlying balance of loans receivable applicable to each category as of those dates.
Allowance for Credit Losses
March 31, 2024
Loans
acquired with
deteriorated
credit quality
individually
analyzed		Loans
acquired with
deteriorated
credit quality
collectively
evaluated		Loans individually
analyzed		Loans collectively
evaluated		Total allowance for credit losses
(In Thousands)
Multi-family mortgage$— $— $9 $24,187 $24,196 
Nonresidential mortgage— 34 8 6,008 6,050 
Commercial business— 22 186 1,337 1,545 
Construction— — — 1,350 1,350 
One- to four-family residential mortgage12 101 12 11,250 11,375 
Home equity loans— — — 330 330 
Other consumer— — — 84 84 
Total loans$12 $157 $215 $44,546 $44,930 
Balance of Loans Receivable
March 31, 2024
Loans
acquired with
deteriorated
credit quality
individually
analyzed		Loans
acquired with
deteriorated
credit quality
collectively
evaluated		Loans individually
analyzed		Loans collectively
evaluated		Total loans
(In Thousands)
Multi-family mortgage$— $— $25,182 $2,620,013 $2,645,195 
Nonresidential mortgage298 2,207 4,190 958,844 965,539 
Commercial business— 4,523 4,189 138,614 147,326 
Construction— 5,735 — 223,722 229,457 
One- to four-family residential mortgage955 3,821 4,687 1,732,181 1,741,644 
Home equity loans24 — 21 42,686 42,731 
Other consumer— — — 3,198 3,198 
Total loans$1,277 $16,286 $38,269 $5,719,258 $5,775,090 
Unaccreted yield adjustments(16,754)
Loans receivable, net of yield adjustments$5,758,336 
- 21 -
Allowance for Credit Losses
June 30, 2023
Loans
acquired with
deteriorated
credit quality
individually
analyzed		Loans
acquired with
deteriorated
credit quality
collectively
evaluated		Loans individually
analyzed		Loans collectively
evaluated		Total allowance for credit losses
(In Thousands)
Multi-family mortgage$— $— $326 $26,036 $26,362 
Nonresidential mortgage— 70 3,001 5,882 8,953 
Commercial business— 9 20 1,411 1,440 
Construction— — — 1,336 1,336 
One- to four-family residential mortgage3 132 70 10,032 10,237 
Home equity loans— — — 338 338 
Other consumer— — — 68 68 
Total loans$3 $211 $3,417 $45,103 $48,734 
Balance of Loans Receivable
June 30, 2023
Loans
acquired with
deteriorated
credit quality
individually
analyzed		Loans
acquired with
deteriorated
credit quality
collectively
evaluated		Loans individually
analyzed		Loans collectively
evaluated		Total loans
(In Thousands)
Multi-family mortgage$— $— $19,114 $2,742,661 $2,761,775 
Nonresidential mortgage333 3,562 16,207 948,472 968,574 
Commercial business— 4,237 252 142,372 146,861 
Construction— 5,735 — 220,874 226,609 
One- to four-family residential mortgage570 4,433 6,101 1,689,455 1,700,559 
Home equity loans25 — 25 43,499 43,549 
Other consumer— — — 2,549 2,549 
Total loans$928 $17,967 $41,699 $5,789,882 $5,850,476 
Unaccreted yield adjustments(21,055)
Loans receivable, net of yield adjustments$5,829,421 
The following tables present the activity in the allowance for credit losses on loans for the three and nine months ended March 31, 2024 and 2023.
Changes in the Allowance for Credit Losses
Three Months Ended March 31, 2024
Balance at
December 31, 2023		Charge-offs RecoveriesProvision for
(reversal of)
credit losses 		Balance at
March 31, 2024
(In Thousands)
Multi-family mortgage$24,462 $(35)$— $(231)$24,196 
Nonresidential mortgage5,888 (253)— 415 6,050 
Commercial business1,293 (5)7 250 1,545 
Construction1,171 — — 179 1,350 
One- to four-family residential mortgage11,653 — — (278)11,375 
Home equity loans330 — — — 330 
Other consumer70 — — 14 84 
Total loans$44,867 $(293)$7 $349 $44,930 

- 22 -
Changes in the Allowance for Credit Losses
Nine Months Ended March 31, 2024
Balance at
June 30, 2023		Charge-offs RecoveriesProvision for
(reversal of)
credit losses 		Balance at
March 31, 2024
(In Thousands)
Multi-family mortgage$26,362 $(389)$— $(1,777)$24,196 
Nonresidential mortgage8,953 (5,975)120 2,952 6,050 
Commercial business1,440 (352)17 440 1,545 
Construction1,336 — — 14 1,350 
One- to four-family residential mortgage10,237 (37)113 1,062 11,375 
Home equity loans338 — — (8)330 
Other consumer68 — — 16 84 
Total loans$48,734 $(6,753)$250 $2,699 $44,930 
Changes in the Allowance for Credit Losses
Three Months Ended March 31, 2023
Balance at
December 31, 2022		Charge-offs RecoveriesProvision for
(reversal of)
credit losses		Balance at
March 31, 2023
(In Thousands)
Multi-family mortgage$27,498 $(4)$— $(322)$27,172 
Nonresidential mortgage8,593 (6)— (343)8,244 
Commercial business1,819 (205)7 108 1,729 
Construction1,201 — — 115 1,316 
One- to four-family residential mortgage9,355 — 2 908 10,265 
Home equity loans339 — — (12)327 
Other consumer72 — — (3)69 
Total loans$48,877 $(215)$9 $451 $49,122 
Changes in the Allowance for Credit Losses
Nine Months Ended March 31, 2023
Balance at June 30, 2022Charge-offs RecoveriesProvision for
(reversal of)
credit losses		Balance at
March 31, 2023
(In Thousands)
Multi-family mortgage$25,321 $(399)$— $2,250 $27,172 
Nonresidential mortgage10,590 (21)— (2,325)8,244 
Commercial business1,792 (338)24 251 1,729 
Construction1,486 — — (170)1,316 
One- to four-family residential mortgage7,540 — 2 2,723 10,265 
Home equity loans245 — — 82 327 
Other consumer84 — 4 (19)69 
Total loans$47,058 $(758)$30 $2,792 $49,122 
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 and nine months ended March 31, 2024 and 2023:
Three Months Ended
March 31,		Nine Months Ended
March 31,
2024202320242023
(In Thousands)
Balance at beginning of the period$567 $819 $741 $1,041 
Provision for (reversal of) credit losses198 (90)24 (312)
Balance at end of the period$765 $729 $765 $729 
- 23 -
7.    DEPOSITS
Deposits at March 31, 2024 and June 30, 2023 are summarized as follows:
March 31,
2024		June 30,
2023
(In Thousands)
Non-interest-bearing demand$586,089 $609,999 
Interest-bearing demand2,349,032 2,252,912 
Savings630,456 748,721 
Certificates of deposits1,643,473 2,017,551 
Total deposits$5,209,050 $5,629,183 
8.    BORROWINGS
Borrowings at March 31, 2024 and June 30, 2023 consisted of the following:
March 31,
2024		June 30,
2023
(In Thousands)
FHLB advances$1,357,178 $1,281,812 
Federal Reserve Bank Term Funding Program ("BTFP") borrowings100,000 — 
Overnight borrowings (1)
265,000 225,000 
Total borrowings$1,722,178 $1,506,812 
___________________________
(1)At March 31, 2024, represented $265.0 million of FHLB overnight line of credit borrowings. At June 30, 2023, represented $125.0 million of FHLB overnight line of credit borrowings and $100.0 million of unsecured overnight borrowings from other financial institutions.
Fixed rate advances from the FHLB of New York and BTFP borrowings mature as follows:
March 31, 2024June 30, 2023
BalanceWeighted
Average
Interest Rate		BalanceWeighted
Average
Interest Rate
(Dollars in Thousands)
By remaining period to maturity:
Less than one year$1,228,500 5.22 %$972,500 5.36 %
One to two years29,000 2.77 103,500 2.68 
Two to three years— — 6,500 2.82 
Three to four years200,000 3.98 — — 
Four to five years— — 200,000 3.98 
Greater than five years— — — — 
Total advances1,457,500 5.00 %1,282,500 4.92 %
Unamortized fair value adjustments(322)(688)
Total advances, net of fair value adjustments$1,457,178 $1,281,812 
At March 31, 2024, FHLB advances and overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans with carrying values totaling approximately $4.38 billion. At June 30, 2023, FHLB advances and overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans with carrying values totaling approximately $4.60 billion.
At March 31, 2024, BTFP borrowings were secured by agency mortgage-backed securities with a par value of $115.4 million. At June 30, 2023, the Company had no BTFP borrowings. The BTFP allows depository institutions to borrow up to the par value of eligible securities pledged at the Federal Reserve Bank.
- 24 -
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 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 Statements of Financial Condition as of March 31, 2024 and June 30, 2023:
March 31, 2024
Asset DerivativesLiability Derivatives
LocationFair ValueLocationFair Value
(In Thousands)
Derivatives designated as hedging instruments:
Interest rate contractsOther assets$55,794 Other liabilities$— 
Total$55,794 $— 

June 30, 2023
Asset DerivativesLiability Derivatives
LocationFair ValueLocationFair Value
(In Thousands)
Derivatives designated as hedging instruments:
Interest rate contractsOther assets$71,624 Other liabilities$— 
Total$71,624 $— 
Cash Flow Hedges of Interest Rate Risk
The Company’s uses derivatives to add stability to interest expense and interest income and to manage its exposure to interest rate movements. The Company has entered into interest rate swaps, interest rate caps and 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, 2024, the Company had a total of 12 interest rate swaps and caps with a total notional amount of $1.43 billion hedging specific wholesale funding and four interest rate floors with a notional amount of $400.0 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, net of tax, and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.
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 and nine months ended March 31, 2024, the Company reclassified $9.5 million and $18.8 million, respectively, as a reduction in interest expense. During the next twelve months, the Company estimates that $28.4 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. During the three and nine months ended March 31, 2024, the Company did not reclassify any amount to interest income. During the next twelve months, the Company estimates that $500,000 will be reclassified as a reduction in interest income.
- 25 -
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 and nine months ended March 31, 2024 and 2023:
Three Months Ended
March 31,		Nine Months Ended
March 31,
2024202320242023
(In Thousands)
Amount of gain (loss) recognized in other comprehensive income$18,798 $(8,936)$13,920 $11,051 
Amount of gain reclassified from accumulated other comprehensive income to interest expense$9,461 $6,461 $28,295 $12,185 
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 March 31, 2024, the Company had five interest rate swaps with a notional amount of $675.0 million hedging fixed-rate residential mortgage loans.
For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.
The table below presents the effects of the Company’s derivative instruments designated as fair value hedges on the Consolidated Statements of Income for the three and nine months ended March 31, 2024 and March 31, 2023:
Three Months Ended
March 31,		Nine Months Ended
March 31,
2024202320242023
(In Thousands)
(Loss) gain on hedged items recorded in interest income on loans$(5,929)$5,681 $2,077 $653 
Gain (loss) on hedges recorded in interest income on loans$8,565 $(4,521)$5,832 $589 
As of March 31, 2024 and June 30, 2023, the following amounts were recorded on the Statement of Financial Condition related to cumulative basis adjustment for fair value hedges:
March 31,
2024		June 30,
2023
(In Thousands)
Loans receivable:
Carrying amount of the hedged assets(1)
$665,640 $663,563 
Fair value hedging adjustment included in the carrying amount of the hedged assets$(9,360)$(11,437)
___________________________________
(1)This amount includes the amortized cost basis of the closed portfolios of loans receivable used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At March 31, 2024 and June 30, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $1.06 billion and $1.10 billion, respectively.
- 26 -
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, 2024 and June 30, 2023, 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, 2024
Gross Amounts Not Offset
Gross Amount RecognizedGross Amounts Offset Net Amounts PresentedFinancial InstrumentsCash Collateral Received (Posted)Net Amount
(In Thousands)
Assets:
Interest rate contracts$55,794 $— $55,794 $— $— $55,794 
Total$55,794 $— $55,794 $— $— $55,794 
June 30, 2023
Gross Amounts Not Offset
Gross Amount RecognizedGross Amounts Offset Net Amounts PresentedFinancial InstrumentsCash Collateral Received (Posted)Net Amount
(In Thousands)
Assets:
Interest rate contracts$72,418 $(794)$71,624 $— $— $71,624 
Total$72,418 $(794)$71,624 $— $— $71,624 
Liabilities:
Interest rate contracts$794 $(794)$— $— $— $— 
Total$794 $(794)$— $— $— $— 
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, 2024, none of the Company’s derivatives were in a net liability position. As required under the enforceable master netting arrangement with its derivatives counterparties, as of March 31, 2024 and June 30, 2023, 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, 2024 and June 30, 2023, included $13.4 million and $11.7 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.
- 27 -
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, Atlas Bank Retirement Income Plan and Supplemental Executive Retirement Plan:
Three Months Ended
March 31,		Nine Months Ended
March 31,		Affected Line Item in the Consolidated Statements of Income
2024202320242023
(In Thousands)
Service cost$20 $24 $58 $258 Salaries and employee benefits
Interest cost93 88 277 280 Other expense
Accretion of unrecognized gain(15)(6)(45)(18)Other expense
Expected return on assets(23)(25)(69)(75)Other expense
Net periodic benefit cost$75 $81 $221 $445 
2021 Equity Incentive Plan
During the nine months ended March 31, 2024, the Company granted 349,257 restricted stock units (“RSUs”) comprised of 255,062 service-based RSUs and 94,195 performance-based RSUs. The service-based RSUs will vest in three tranches over a period of three years and the performance-based RSUs will cliff vest upon the achievement of performance measures over the three-year period ending June 30, 2026. The 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% to income for the three and nine months ended March 31, 2024 and 2023:
Three Months Ended
March 31,		Nine Months Ended
March 31,
2024202320242023
(Dollars in Thousands)
Income before income taxes$9,114 $13,214 $10,220 $36,988 
Statutory federal tax rate21 %21 %21 %21 %
Federal income tax at statutory rate$1,914 $2,775 $2,146 $7,767 
(Reduction) increase in income taxes resulting from:
Tax exempt interest(17)(20)(52)(125)
State tax, net of federal tax effect485 769 297 2,065 
Incentive stock option compensation expense— 3 5 9 
Income from bank-owned life insurance(504)(332)(1,218)(1,469)
Surrender of bank-owned life insurance polices76 — 5,789 — 
Other items, net(237)(293)(159)(57)
Total income tax expense$1,717 $2,902 $6,808 $8,190 
Effective income tax rate18.84 %21.96 %66.61 %22.14 %
- 28 -
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 and Liabilities Measured on a Recurring Basis:
The following methods and significant assumptions were used to estimate the fair values as of March 31, 2024 and June 30, 2023:
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 contracts. 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.
- 29 -
Those assets measured at fair value on a recurring basis are summarized below:
March 31, 2024
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:
Asset-backed securities$— $86,360 $— $86,360 
Collateralized loan obligations— 406,695 — 406,695 
Corporate bonds— 125,081 — 125,081 
Total debt securities— 618,136 — 618,136 
Mortgage-backed securities available for sale:
Residential pass-through securities— 344,972 — 344,972 
Commercial pass-through securities— 135,547 — 135,547 
Total mortgage-backed securities— 480,519 — 480,519 
Total securities available for sale$— $1,098,655 $— $1,098,655 
Interest rate contracts$— $55,794 $— $55,794 
Total assets$— $1,154,449 $— $1,154,449 
June 30, 2023
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
(In Thousands)
Assets:
Debt securities available for sale:
Asset-backed securities$— $136,170 $— $136,170 
Collateralized loan obligations— 376,996 — 376,996 
Corporate bonds— 135,018 — 135,018 
Total debt securities— 648,184 — 648,184 
Mortgage-backed securities available for sale:
Residential pass-through securities— 436,151 — 436,151 
Commercial pass-through securities— 143,394 — 143,394 
Total mortgage-backed securities— 579,545 — 579,545 
Total securities available for sale$— $1,227,729 $— $1,227,729 
Interest rate contracts$— $71,624 $— $71,624 
Total assets$— $1,299,353 $— $1,299,353 
- 30 -
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, 2024 and June 30, 2023:
Individually Analyzed Collateral Dependent 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. Individually analyzed collateral dependent loans are considered a Level 3 valuation by the Company.
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. Other real estate owned is considered a Level 3 valuation by the Company.
Those assets measured at fair value on a non-recurring basis are summarized below:
March 31, 2024
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:
Multi-family mortgage$— $— $1,896 $1,896 
Total$— $— $1,896 $1,896 
June 30, 2023
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
(In Thousands)
Collateral dependent loans:
Residential mortgage$— $— $449 $449 
Multi-family mortgage— — 7,300 7,300 
Nonresidential mortgage— — 9,972 9,972 
Total$— $— $17,721 $17,721 
Other real estate owned, net:
Nonresidential$— $— $12,956 $12,956 
Total$— $— $12,956 $12,956 
- 31 -
The following 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:
March 31, 2024
Fair
Value		Valuation
Techniques		Unobservable
Input		RangeWeighted
Average
(Dollars in Thousands)
Collateral dependent loans:
Multi-family mortgage$1,896 Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
13.09%
13.09 %
Total$1,896 
June 30, 2023
Fair
Value		Valuation
Techniques		Unobservable
Input		RangeWeighted
Average
(Dollars in Thousands)
Collateral dependent loans:
Residential mortgage$449 Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
6% - 9%
6.93 %
Multi-family mortgage7,300 Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
6% - 9%
7.78 %
Nonresidential mortgage9,972 Market valuation of underlying collateral
(1)
Adjustments to reflect current conditions/selling costs
(2)
9% - 16%
11.78 %
Total$17,721 
Other real estate owned, net:
Nonresidential$12,956 Market valuation of underlying collateral
(3)
Adjustments to reflect current conditions/selling costs
(2)
4.00%4.00 %
Total$12,956 
___________________________________
(1)The fair value of collateral dependent 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 loans and other real estate owned is adjusted to reflect management’s estimates of selling costs including, but not 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.
At March 31, 2024, collateral dependent loans valued using Level 3 inputs comprised loans with principal balances totaling $1.9 million and a valuation allowance of $9,000 reflecting an aggregate fair value of $1.9 million. By comparison, at June 30, 2023, collateral dependent loans valued using Level 3 inputs comprised loans with principal balances totaling $21.0 million and a valuation allowance of $3.3 million reflecting an aggregate fair value of $17.7 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, 2024, the Company had no other real estate owned assets. At June 30, 2023, the Company held other real estate owned totaling $13.0 million, whose carrying value was written down utilizing Level 3 inputs.
- 32 -
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, 2024 and June 30, 2023:
March 31, 2024
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$71,027 $71,027 $71,027 $— $— 
Investment securities available for sale1,098,655 1,098,655 — 1,098,655 — 
Investment securities held to maturity139,643 123,576 — 123,576 — 
Loans held-for-sale4,117 4,159 — 4,159 — 
Net loans receivable5,713,406 5,150,589 — — 5,150,589 
FHLB Stock81,347 — — — — 
Interest receivable31,065 31,065 28 10,318 20,719 
Interest rate contracts55,794 55,794 — 55,794 — 
Financial liabilities:
Deposits other than certificates of deposits3,565,577 3,565,577 3,565,577 — — 
Certificates of deposits1,643,473 1,632,554 — — 1,632,554 
Borrowings1,722,178 1,716,261 — — 1,716,261 
Interest payable on deposits5,849 5,849 3,611 — 2,238 
Interest payable on borrowings6,727 6,727 — — 6,727 
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June 30, 2023
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$70,515 $70,515 $70,515 $— $— 
Investment securities available for sale1,227,729 1,227,729 — 1,227,729 — 
Investment securities held to maturity146,465 131,169 — 131,169 — 
Loans held-for-sale9,591 9,442 — 9,442 — 
Net loans receivable5,780,687 5,261,808 — — 5,261,808 
FHLB Stock71,734 — — — — 
Interest receivable28,133 28,133 14 8,924 19,195 
Interest rate contracts71,624 71,624 — 71,624 — 
Financial liabilities:
Deposits other than certificates of deposits3,611,632 3,611,632 3,611,632 — — 
Certificates of deposits2,017,551 1,989,434 — — 1,989,434 
Borrowings1,506,812 1,498,920 — — 1,498,920 
Interest payable on deposits6,826 6,826 1,933 — 4,893 
Interest payable on borrowings5,282 5,282 — — 5,282 
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.
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13.    COMPREHENSIVE INCOME (LOSS)
The components of accumulated other comprehensive loss included in stockholders’ equity at March 31, 2024 and June 30, 2023 are as follows:
March 31,
2024		June 30,
2023
(In Thousands)
Net unrealized loss on securities available for sale$(133,518)$(156,138)
Tax effect38,499 45,018 
Net of tax amount(95,019)(111,120)
Fair value adjustments on derivatives44,039 58,414 
Tax effect(12,771)(16,940)
Net of tax amount31,268 41,474 
Benefit plan adjustments129 268 
Tax effect(37)(78)
Net of tax amount92 190 
Total accumulated other comprehensive loss$(63,659)$(69,456)
Other comprehensive loss and related tax effects for the three and nine months ended March 31, 2024 and 2023 are presented in the following table:
Three Months Ended
March 31,		Nine Months Ended
March 31,
2024202320242023
(In Thousands)
Net unrealized holding (loss) gain on securities available for sale$(9,061)$9,713 $4,485 $(38,324)
Net realized loss on sale and call of securities available for sale (1)
— — 18,135 15,227 
Fair value adjustments on derivatives9,337 (15,397)(14,375)(1,134)
Benefit plans:
Accretion of net actuarial gain (2)
(15)(6)(44)(18)
Net actuarial loss— — (95)(27)
Net change in benefit plan accrued expense(15)(6)(139)(45)
Other comprehensive income (loss) before taxes261 (5,690)8,106 (24,276)
Tax effect (90)1,658 (2,309)6,950 
Total other comprehensive income (loss)$171 $(4,032)$5,797 $(17,326)
___________________________________
(1)Represents amounts reclassified out of accumulated other comprehensive loss and included in loss on sale of securities on the Consolidated Statements of Income.
(2)Represents amounts reclassified out of accumulated other comprehensive loss and included in the computation of net periodic pension expense. See Note 10 - Benefit Plans for additional information.
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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,
2024202320242023
(In Thousands, Except Per Share Data)
Net income$7,397 $10,312 $3,412 $28,798 
Weighted average number of common shares outstanding - basic62,205 64,769 62,507 65,181 
Effect of dilutive securities6 14 — 10 
Weighted average number of common shares outstanding - diluted62,211 64,783 62,507 65,191 
Basic earnings per share$0.12 $0.16 $0.06 $0.44 
Diluted earnings per share$0.12 $0.16 $0.06 $0.44 
Stock options for 2,820,922 and 2,993,530 shares of common stock were not considered in computing diluted earnings per share for the three months ended March 31, 2024 and 2023, respectively, and stock options for 2,820,922 and 2,986,628 shares of common stock were not considered in computing diluted earnings per share for the nine months ended March 31, 2024 and 2023, respectively, because they were considered anti-dilutive. In addition, 635,650 and 427,347 RSUs were not considered in computing diluted earnings per share for the three months ended March 31, 2024 and March 31, 2023, respectively and 689,252 and 427,347 RSUs were not considered in computing diluted earnings per share for the three and nine months ended March 31, 2024 and March 31, 2023, respectively because they were considered anti-dilutive.
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ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
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, the effects of the recent turmoil in the banking industry (including the failure of three financial institutions), 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 this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023, under “Item 1A. Risk Factors.”
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, 2024, there have been no material changes to our critical accounting 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, 2023.
Comparison of Financial Condition at March 31, 2024 and June 30, 2023
Executive Summary. Total assets decreased $222.8 million to $7.84 billion at March 31, 2024 from $8.06 billion at June 30, 2023. The decrease primarily reflected decreases in investment securities available for sale, as discussed below, and in net loans receivable.
Investment Securities. Investment securities available for sale decreased $129.1 million to $1.10 billion at March 31, 2024, from $1.23 billion at June 30, 2023. This decrease was largely the result of sales of $104.1 million and principal repayments of $94.1 million, partially offset by purchases of $64.0 million and a fair value increase of $5.1 million.
Investment securities held to maturity decreased $6.8 million to $139.6 million at March 31, 2024 from $146.5 million at June 30, 2023. This decrease was primarily driven by principal repayments of $7.0 million.
Additional information regarding our investment securities at March 31, 2024 and June 30, 2023 is presented in Note 4 to the unaudited consolidated financial statements.
Loans Held-for-Sale. Loans held-for-sale totaled $4.1 million at March 31, 2024 as compared to $9.6 million at June 30, 2023 and are reported separately from the balance of net loans receivable. During the nine months ended March 31, 2024, we sold $59.5 million of residential mortgage loans, resulting in a gain on sale of $491,000 and $10.8 million of commercial mortgage loans, resulting in a loss on sale of $884,000.
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Net Loans Receivable. Net loans receivable decreased $67.3 million, or 1.2%, to $5.71 billion at March 31, 2024 from $5.78 billion at June 30, 2023. Details regarding the change in the loan portfolio, by loan segment, are presented below:
March 31,
2024		June 30,
2023		Increase/
(Decrease)
(In Thousands)
Commercial loans:
Multi-family mortgage$2,645,195 $2,761,775 $(116,580)
Nonresidential mortgage965,539 968,574 (3,035)
Commercial business147,326 146,861 465 
Construction229,457 226,609 2,848 
Total commercial loans3,987,517 4,103,819 (116,302)
One- to four-family residential mortgage1,741,644 1,700,559 41,085 
Consumer loans:
Home equity loans42,731 43,549 (818)
Other consumer3,198 2,549 649 
Total consumer loans45,929 46,098 (169)
Total loans5,775,090 5,850,476 (75,386)
Unaccreted yield adjustments(16,754)(21,055)4,301 
Allowance for credit losses(44,930)(48,734)3,804 
Net loans receivable$5,713,406 $5,780,687 $(67,281)
Commercial loan origination volume for the nine months ended March 31, 2024 totaled $217.5 million, comprised of $75.7 million of commercial mortgage loan originations, $77.3 million of commercial business loan originations and construction loan disbursements of $64.5 million.
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $82.6 million for the nine months ended March 31, 2024 and was supplemented with the purchase of loans totaling $59.9 million. Home equity loan and line of credit origination volume for the same period totaled $12.5 million.
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. The following table sets forth the composition of our real estate secured loans indicating the LTV, by loan category, at March 31, 2024 and June 30, 2023:
March 31, 2024June 30, 2023
BalanceLTVBalanceLTV
(Dollars in Thousands)
Commercial mortgage loans:
Multi-family mortgage$2,645,195 64 %$2,761,775 64 %
Nonresidential mortgage965,539 53 968,574 54 
Construction229,457 58 226,609 58 
Total commercial mortgage loans3,840,191 61 3,956,958 61 
One- to four-family residential mortgage1,741,644 62 1,700,559 62 
Consumer loans:
Home equity loans42,731 49 43,549 49 
Total mortgage loans$5,624,566 61 %$5,701,066 61 %
Additional information about our loan portfolio at March 31, 2024 and June 30, 2023 is presented in Note 5 to the unaudited consolidated financial statements.
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Nonperforming Assets. Nonperforming assets decreased by $16.0 million to $39.5 million, or 0.50% of total assets, at March 31, 2024, from $55.6 million, or 0.69% of total assets, at June 30, 2023.
At March 31, 2024, nonperforming assets consisted of $39.5 million of nonperforming loans, compared to nonperforming assets of $55.6 million at June 30, 2023, which consisted of $42.6 million of nonperforming loans and $13.0 million of other real estate owned (“OREO”). The decrease in non performing assets was driven by the January 2024 sale of three related non-performing commercial real estate loans held-for-sale and the Company’s sole OREO asset.
Additional information about our nonperforming loans and loan modifications at March 31, 2024 and June 30, 2023 is presented in Note 5 to the unaudited consolidated financial statements.
Allowance for Credit Losses (“ACL”). At March 31, 2024, the ACL totaled $44.9 million, or 0.78% of total loans, reflecting a decrease of $3.8 million from $48.7 million, or 0.83% of total loans, at June 30, 2023. The decrease during the nine months ended March 31, 2024 was largely attributable to net charge-offs of $6.5 million and a decrease in the balance of loans receivable, partially offset by a provision for credit losses of $2.7 million. The charge-offs recorded were primarily driven by the sale of three related non-performing loans in January 2024. Of the $6.5 million of net charge-offs recorded during the nine months ended March 31, 2024, $3.3 million had previously been individually reserved for within the ACL. The provision for credit losses for the nine months ended March 31, 2024 was primarily driven by charge-offs, as discussed above, partially offset by a decrease in the balance of loans receivable.
Additional information about our ACL at March 31, 2024 and June 30, 2023 is presented in Note 6 to the unaudited consolidated financial statements.
Other Assets. The aggregate balance of other assets, including premises and equipment, Federal Home Loan Bank (“FHLB”) stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance (“BOLI”), deferred income taxes, OREO and other assets, decreased $14.7 million to $815.1 million at March 31, 2024 from $829.8 million at June 30, 2023. The decrease in the balance of these other assets during the nine months ended March 31, 2024 reflected the January 2024 sale of our sole OREO asset and a decrease in the market value of interest rate derivatives, partially offset by an increase in Federal Home Loan Bank of New York (“FHLBNY”) stock. The remaining change generally reflected normal operating fluctuations within these line items.
Deposits. Total deposits decreased $420.1 million, or 7.5%, to $5.21 billion at March 31, 2024 from $5.63 billion at June 30, 2023. Included in total deposits are brokered and listing service time deposits of $408.2 million at March 31, 2024 and $640.5 million at June 30, 2023. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:
March 31,
2024		June 30,
2023		Increase/
(Decrease)
(In Thousands)
Non-interest-bearing deposits$586,089 $609,999 $(23,910)
Interest-bearing deposits:
Interest-bearing demand2,349,032 2,252,912 96,120 
Savings630,456 748,721 (118,265)
Certificates of deposit (retail)1,235,261 1,377,028 (141,767)
Certificates of deposit (brokered and listing service)408,212 640,523 (232,311)
Interest-bearing deposits4,622,961 5,019,184 (396,223)
Total deposits$5,209,050 $5,629,183 $(420,133)
Uninsured deposits totaled $1.76 billion as of March 31, 2024 compared to $1.77 billion as of June 30, 2023. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $718.0 million, or 13.8% of total deposits, at March 31, 2024 compared to $710.4 million, or 12.6% of total deposits, at June 30, 2023.
Additional information about our deposits at March 31, 2024 and June 30, 2023 is presented in Note 7 to the unaudited consolidated financial statements.
Borrowings. The balance of borrowings increased by $215.4 million to $1.72 billion at March 31, 2024 from $1.51 billion at June 30, 2023. The growth in borrowings was driven by increases in advances from the FHLB and the Federal Reserve Bank of New York (“FRBNY”), and resulted from the decline in brokered deposits of $232.3 million. FRBNY advances consisted of $100.0 million in borrowings under the Bank Term Funding Program (“BTFP”) which included favorable terms and conditions as compared to FHLB advances and brokered deposits.
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At March 31, 2024, we maintained available secured borrowing capacity of $1.81 billion, of which $1.47 billion was immediately accessible via in-place collateral and $336.7 million represented the market value of unpledged securities.
Additional information about our borrowings at March 31, 2024 and June 30, 2023 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, increased $2.1 million to $61.7 million at March 31, 2024 from $59.5 million at June 30, 2023. The change in the balance of these other liabilities generally reflected normal operating fluctuations during the period.
Stockholders’ Equity. Stockholders’ equity decreased $20.2 million to $849.1 million at March 31, 2024 from $869.3 million at June 30, 2023. The decrease in stockholders’ equity during the nine months ended March 31, 2024 largely reflected cash dividends of $20.7 million and share repurchases of $11.2 million, partially offset by a decrease in other comprehensive loss of $5.8 million and net income of $3.4 million. The decrease in other comprehensive loss was driven by the reclassification of a net realized loss on the sale of securities available for sale out of accumulated other comprehensive loss due to an investment securities repositioning and an increase in the fair value of our available for sale securities, partially offset by a decrease in the fair value of our derivatives portfolio.
Book value per share decreased by $0.02 to $13.18 at March 31, 2024 while tangible book value per share decreased by $0.09 to $9.87 at March 31, 2024.
On August 1, 2022, we announced that the Board of Directors had authorized a new stock repurchase plan to repurchase up to 4,000,000 shares, and the completion of our previous stock repurchase plan, which authorized the repurchase of 7,602,021 shares. During the nine months ended March 31, 2024, we repurchased 1,504,747 shares of common stock at a cost of $11.2 million, or $7.47 per share. On November 7, 2023, we announced the completion of this stock repurchase plan.
Comparison of Operating Results for the Quarter Ended March 31, 2024 and March 31, 2023
Net Income. Net income for the quarter ended March 31, 2024 was $7.4 million, or $0.12 per diluted share, compared to $10.3 million, or $0.16 per diluted share for the quarter ended March 31, 2023. The decrease in net income reflected a decrease in net interest income, partially offset by an increase in non-interest income and decreases in non-interest expense, the provision for credit losses and income tax expense.
Net Interest Income. Net interest income decreased by $8.1 million to $34.3 million for the quarter ended March 31, 2024 compared to $42.4 million for the quarter ended March 31, 2023. The decrease between the comparative periods resulted from an increase of $13.0 million in interest expense, partially offset by an increase of $4.9 million in interest income. Included in net interest income for the quarters ended March 31, 2024 and 2023, respectively, was purchase accounting accretion of $734,000 and $711,000, and loan prepayment penalty income of $61,000 and $103,000.
Net interest margin decreased 31 basis points to 1.89% for the quarter ended March 31, 2024, from 2.20% for the quarter ended March 31, 2023 and reflected an increase in the cost of interest-bearing liabilities, an increase in the average balance of interest-bearing borrowings and a decrease in the average balance of interest-earning assets, partially offset by an increase in the yield on interest-earning assets and a decrease in the average balance of interest-bearing deposits. The increased cost of interest-bearing liabilities and yield on interest-earning assets is the result of higher market interest rates that were caused by an increase in the federal funds target rate from 0% - 0.25% in March 2022 to 5.25% - 5.50% in July 2023.
- 40 -
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 March 31,
20242023
Average
Balance		InterestAverage
Yield/
Cost		Average
Balance		InterestAverage
Yield/
Cost
(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1)
$5,752,477 $64,035 4.45 %$5,986,669 $60,172 4.02 %
Taxable investment securities (2)
1,382,064 15,490 4.48 1,558,222 15,459 3.97 
Tax-exempt securities (2)
14,614 85 2.32 17,663 99 2.23 
Other interest-earning assets (3)
125,155 2,475 7.91 131,682 1,441 4.38 
Total interest-earning assets7,274,310 82,085 4.51 7,694,236 77,171 4.01 
Non-interest-earning assets577,411 575,009 
Total assets$7,851,721 $8,269,245 
Interest-bearing liabilities:
Interest-bearing demand$2,378,831 18,316 3.08 $2,363,762 11,849 2.01 
Savings635,226 726 0.46 858,673 881 0.41 
Certificates of deposit1,705,513 13,278 3.11 2,069,396 9,516 1.84 
Total interest-bearing deposits4,719,570 32,320 2.74 5,291,831 22,246 1.68 
Federal Home Loan Bank advances1,428,801 12,694 3.55 1,402,269 12,533 3.58 
Other borrowings210,989 2,752 5.22 1,611 21 5.15 
Borrowings1,639,790 15,446 3.77 1,403,880 12,554 3.58 
Total interest-bearing liabilities6,359,360 47,766 3.00 6,695,711 34,800 2.08 
Non-interest-bearing liabilities (4)
647,579 694,651 
Total liabilities7,006,939 7,390,362 
Stockholders' equity844,782 878,883 
Total liabilities and stockholders' equity$7,851,721 $8,269,245 
Net interest income$34,319 $42,371 
Interest rate spread (5)
1.51 %1.93 %
Net interest margin (6)
1.89 %2.20 %
Ratio of interest-earning assets to interest-bearing liabilities1.141.15
___________________________________
(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 of $581.9 million and $634.3 million for the quarter ended March 31, 2024 and 2023, respectively.
(5)Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(6)Net interest margin represents net interest income as a percentage of average interest-earning assets.
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Provision for Credit Losses. The provision for credit losses decreased $102,000 to $349,000 for the quarter ended March 31, 2024, compared to $451,000 for the quarter ended March 31, 2023. The provision for the quarter ended March 31, 2024 was primarily driven by loan growth compared to previous quarter end loan balances. By comparison, the provision for credit losses for the quarter ended March 31, 2023 was largely driven by a slower prepayment rate assumption, partially offset by a net reduction in loans individually analyzed for impairment.
Additional information regarding the ACL and the associated provisions recognized during the quarters ended March 31, 2024 and 2023 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at March 31, 2024 and June 30, 2023.
Non-Interest Income. Total non-interest income increased $2.6 million to $4.2 million for the quarter ended March 31, 2024, compared to $1.6 million for the quarter ended March 31, 2023.
Income from BOLI increased $1.5 million to $3.0 million for the quarter ended March 31, 2024, primarily driven by a $631,000 non-recurring payment on one life insurance policy in the current period and improved income of $673,000 resulting from the BOLI restructure completed during the current quarter.
Loss on sale of loans was $712,000 for the quarter ended March 31, 2024 compared to a loss on sale of loans of $2.4 million during the comparative period. The decrease in loan sale losses was largely attributable to a $2.5 million loss on the sale of a nonperforming commercial mortgage loan held-for-sale in the prior comparative period. The loss in the current period was primarily the result of the sale of three related nonperforming commercial real estate loans held-for-sale.
Fees and service charges decreased $253,000 to $657,000 for the quarter ended March 31, 2024. The decrease primarily reflected decreases in various loan-related and deposit-related fees and charges.
Other non-interest income decreased $316,000 to $755,000 for the quarter ended March 31, 2024. The decrease in other non-interest income was primarily attributable to a reduction in OREO income as a result of the January 2024 sale of our sole OREO asset.
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 $1.3 million to $29.1 million for the quarter ended March 31, 2024, compared to $30.4 million for the quarter ended March 31, 2023.
Salaries and employee benefits decreased $1.1 million to $16.9 million for quarter ended March 31, 2024. This decrease was primarily driven by a non-recurring decrease in stock-based compensation and lower incentive compensation.
Net occupancy expense of premises decreased $234,000 to $2.9 million for the quarter ended March 31, 2024. This decrease was primarily due to lower depreciation expense, rent expense and maintenance expense associated with the consolidation of two retail branch locations completed in the quarter ended June 30, 2023.
Equipment and systems expense increased $286,000 to $3.8 million for the quarter ended March 31, 2024, driven by increases in technology expense associated with the Company's ongoing digital banking initiatives.
FDIC insurance premiums decreased $117,000 to $1.4 million for the quarter ended March 31, 2024.
Other non-interest expense decreased $128,000 to $3.3 million for the quarter ended March 31, 2024. This decrease was primarily attributable to a $257,000 decrease in OREO expenses due to the January 2024 sale of a our sole OREO asset.
The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items.
Provision for Income Taxes. Provision for income taxes decreased $1.2 million to $1.7 million for the quarter ended March 31, 2024 from $2.9 million for the quarter ended March 31, 2023.
The decrease in income tax expense reflected a lower level of pre-tax income compared to the prior period.
Effective tax rates for the quarter ended March 31, 2024 and 2023 were 18.8% and 22.0%, respectively. The decrease in the effective tax rate was primarily due to lower full year projected taxable income and the impact of a nontaxable payout on one life insurance policy in the current year period.
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Comparison of Operating Results for the Nine Months Ended March 31, 2024 and March 31, 2023
Net Income. Net income for the nine months ended March 31, 2024 was $3.4 million, or $0.06 per diluted share, compared to $28.8 million, or $0.44 per diluted share for the nine months ended March 31, 2023. The decrease in net income reflected a decrease in net interest income and a decrease in non-interest income, partially offset by decreases in non-interest expense, income tax expense and the provision for credit losses. The net income for the current year period included a $12.9 million after-tax net loss on the sale of securities that resulted from an investment securities repositioning and an after-tax net loss of $6.3 million from the previously disclosed BOLI restructure.
Net Interest Income. Net interest income decreased by $26.4 million to $109.3 million for the nine months ended March 31, 2024 compared to $135.7 million for the nine months ended March 31, 2023. The decrease between the comparative periods resulted from an increase of $58.2 million in interest expense, partially offset by an increase of $31.8 million in interest income. Included in net interest income for the nine months ended March 31, 2024 and 2023, respectively, was purchase accounting accretion of $2.0 million and $4.4 million, and loan prepayment penalty income of $513,000 and $710,000.
Net interest margin decreased 44 basis points to 1.98% for the nine months ended March 31, 2024, from 2.42% for the nine months ended March 31, 2023 and reflected an increase in the cost of interest-bearing liabilities, an increase in the average balance of interest-bearing borrowings and a decrease in the average balance of interest earning assets, partially offset by increases in the yield on interest-earning assets and a decrease in the average balance of interest-bearing deposits. The increased cost of interest-bearing liabilities and yield on interest-earning assets is the result of higher market interest rates that were caused by an increase in the federal funds target rate from 0% - 0.25% in March 2022 to 5.25% - 5.50% in July 2023.
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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.
Nine Months Ended March 31,
20242023
Average
Balance		InterestAverage
Yield/
Cost		Average
Balance		InterestAverage
Yield/
Cost
(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1)
$5,755,635 $190,188 4.41 %$5,792,113 $171,103 3.94 %
Taxable investment securities(2)
1,469,524 48,511 4.40 1,534,083 39,119 3.40 
Tax-exempt securities(2)
15,043 256 2.27 34,976 603 2.30 
Other interest-earning assets(3)
131,933 6,923 7.00 111,150 3,207 3.85 
Total interest-earning assets7,372,135 245,878 4.45 7,472,322 214,032 3.82 
Non-interest-earning assets566,784 565,180 
Total assets$7,938,919 $8,037,502 
Interest-bearing liabilities:
Interest-bearing demand$2,308,355 $49,521 2.86 $2,359,328 $26,865 1.52 
Savings673,358 2,301 0.46 937,101 2,429 0.35 
Certificates of deposit1,833,243 38,405 2.79 2,092,514 22,643 1.44 
Total interest-bearing deposits4,814,956 90,227 2.50 5,388,943 51,937 1.29 
Federal Home Loan Bank advances1,442,975 39,414 3.64 1,011,104 25,671 3.39 
Other borrowings170,309 6,919 5.42 43,325 739 2.28 
Borrowings1,613,284 46,333 3.83 1,054,429 26,410 3.34 
Total interest-bearing liabilities6,428,240 136,560 2.83 6,443,372 78,347 1.62 
Non-interest-bearing liabilities(4)
662,124 714,233 
Total liabilities7,090,364 7,157,605 
Stockholders' equity848,555 879,897 
Total liabilities and stockholders' equity$7,938,919 $8,037,502 
Net interest income$109,318 $135,685 
Interest rate spread(5)
1.62 %2.20 %
Net interest margin(6)
1.98 %2.42 %
Ratio of interest-earning assets to interest-bearing liabilities1.151.16
___________________________________
(1)Loans held-for-sale and non-accruing loans have been included in loans receivable and the effect of such inclusion was not material. 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 of $597.2 million and $656.4 million for the nine months ended March 31, 2024 and 2023, respectively.
(5)Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(6)Net interest margin represents net interest income as a percentage of average interest-earning assets.

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Provision for Credit Losses. The provision for credit losses decreased $93,000 to $2.7 million for the nine months ended March 31, 2024, compared to $2.8 million for the nine months ended March 31, 2023. The provision for the nine months ended March 31, 2024 was primarily driven by charge-offs on three related commercial real estate loans. By comparison, the provision for credit losses for the nine months ended March 31, 2023 was largely attributable to loan growth, partially offset by a reduction in the expected life of the loan portfolio and a net reduction in reserves on loans individually analyzed for impairment.
Additional information regarding the ACL and the associated provisions recognized during the nine months ended March 31, 2024 and 2023 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at March 31, 2024 and June 30, 2023.
Non-Interest Income. Total non-interest income decreased $6.9 million to a loss of $7.8 million for the nine months ended March 31, 2024, compared to a loss of $915,000 for the nine months ended March 31, 2023.
Loss on sale and call of securities was $18.1 million during the nine months ended March 31, 2024 compared to a loss of $15.2 million recorded during the prior year period. The loss in the current period was due to the repositioning of our investment securities portfolio that involved the sale of $122.2 million of available for sale debt securities in December 2023. Proceeds from the sale were utilized to retire higher-cost wholesale funding and to reinvest in loans yielding approximately 7.0%.
Loss on sale of loans was $393,000 for the nine months ended March 31, 2024 compared to a loss of $1.8 million during the comparative period. The decrease in loan sale losses was largely attributable to a $2.5 million loss on the sale of a nonperforming commercial mortgage loan held-for-sale in the prior comparative period. The loss in the current period was primarily the result of the sale of three related nonperforming commercial real estate loans held-for-sale.
We recognized a non-recurring loss of $974,000 attributable to the write-down of one other real estate owned (“OREO”) property during the quarter ended December 31, 2023, while there were no such losses recorded in the prior period. This OREO asset was subsequently sold during the quarter ended March 31, 2024.
Income from bank owned life insurance decreased $1.2 million to $5.9 million for the nine months ended March 31, 2024. The decrease was primarily due to lower non-recurring payouts on life insurance policies of $1.5 million compared to the prior year period and non-recurring exchange charges of $573,000 in the current year period related to the BOLI restructure, noted above. Excluding these non-recurring items, BOLI income improved $673,000 as a result of the BOLI restructure.
Other non-interest income decreased $2.8 million to $2.6 million for the nine months ended March 31, 2024. The decrease in other non-interest income was primarily attributable to a non-recurring gain of $2.9 million from the sale of a former branch location during the prior year 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 $6.4 million to $88.6 million for the nine months ended March 31, 2024, compared to $95.0 million for the nine months ended March 31, 2023.
Salaries and employee benefits decreased $6.3 million to $52.0 million for the nine months ended March 31, 2024. This decrease was primarily driven by lower salary expense resulting from a decrease in employee headcount from March 31, 2023 to March 31, 2024, and a decrease in incentive payments tied to loan origination volume. The headcount reductions were mainly attributable to the workforce realignment completed in the quarter ended December 31, 2022, which included $250,000 of non-recurring severance expense.
Net occupancy expense of premises decreased $879,000 to $8.3 million for the nine months ended March 31, 2024. This decrease was primarily due to decreases in rent expense, depreciation expense, and building repairs and maintenance expense. These decreases are a result of the consolidation of two branch locations during the quarter ended June 30, 2023.
Advertising and marketing expense decreased $975,000 to $916,000 for the nine months ended March 31, 2024. This decrease in advertising expense resulted from the adoption of lower cost in-house digital campaigns supporting our loan and deposit growth initiatives.
FDIC insurance premiums increased $770,000 to $4.4 million for the nine months ended March 31, 2024. The increase was largely attributable to an updated assessment rate from the FDIC.
Other non-interest expense increased $515,000 to $10.4 million for the nine months ended March 31, 2024. This increase was primarily attributable to an $806,000 increase in OREO expenses. The bank’s sole OREO asset was sold in the quarter ended March 31, 2024. This increase was partially offset by a decrease in professional and consulting, loan and legal expenses.
The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items.
Provision for Income Taxes. Provision for income taxes decreased $1.4 million to $6.8 million for the nine months ended March 31, 2024 from $8.2 million for the nine months ended March 31, 2023.
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The decrease in income tax expense reflected a lower level of pre-tax income as compared to the prior period, partially offset by $5.7 million of discrete tax cost associated with the BOLI restructure.
Effective tax rates for the nine months ended March 31, 2024 and 2023 were 66.6% and 22.1%, respectively. The increase in the effective tax rate was primarily due to discrete tax costs of $5.7 million associated with the BOLI restructure.
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, 2024, liquidity included $71.0 million of short-term cash and equivalents and $1.10 billion of investment securities available for sale. As of March 31, 2024, we had the capacity to borrow additional funds totaling $1.07 billion and $403.4 million from the FHLBNY and the Federal Reserve discount window, respectively, without pledging additional collateral. We had the ability to pledge additional securities to borrow an additional $336.7 million at March 31, 2024. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $950.0 million of which none was outstanding.
At March 31, 2024, we had outstanding commitments to originate and purchase loans totaling $20.4 million while such commitments totaled $23.3 million at June 30, 2023. As of those same dates, our pipeline of loans held for sale included $13.4 million and $11.7 million, respectively, of loans in process whose terms included interest rate locks to borrowers that were paired with a best-efforts commitment to sell the loan to a buyer at a fixed price and within a predetermined timeframe after the sale commitment is established.
Construction loans in process and unused lines of credit were $63.3 million and $166.0 million, respectively, at March 31, 2024 compared to $58.5 million and $169.5 million, respectively, at June 30, 2023. We are also subject to the contingent liabilities resulting from letters of credit whose outstanding balances totaled $115,000 at March 31, 2024 and June 30, 2023, 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.
The following table sets forth the Bank’s capital position at March 31, 2024 and June 30, 2023, as compared to the minimum regulatory capital requirements that were in effect as of those dates:
At March 31, 2024
ActualFor Capital
Adequacy Purposes		To Be Well Capitalized
Under Prompt
Corrective Action
Provisions
AmountRatioAmountRatioAmountRatio
(Dollars in Thousands)
Total capital (to risk-weighted assets)$685,284 14.27 %$384,095 8.00 %$480,119 10.00 %
Tier 1 capital (to risk-weighted assets)648,370 13.50 %288,071 6.00 %384,095 8.00 %
Common equity tier 1 capital (to risk-weighted assets)648,370 13.50 %216,053 4.50 %312,077 6.50 %
Tier 1 capital (to adjusted total assets)648,370 8.35 %310,661 4.00 %388,327 5.00 %
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At June 30, 2023
ActualFor Capital
Adequacy Purposes		To Be Well Capitalized
Under Prompt
Corrective Action
Provisions
AmountRatioAmountRatioAmountRatio
(Dollars in Thousands)
Total capital (to risk-weighted assets)$695,417 13.31 %$417,853 8.00 %$522,316 10.00 %
Tier 1 capital (to risk-weighted assets)659,783 12.63 %313,389 6.00 %417,853 8.00 %
Common equity tier 1 capital (to risk-weighted assets)659,783 12.63 %235,042 4.50 %339,505 6.50 %
Tier 1 capital (to adjusted total assets)659,783 8.15 %323,922 4.00 %404,902 5.00 %
The following table sets forth the Company’s capital position at March 31, 2024 and June 30, 2023, as compared to the minimum regulatory capital requirements that were in effect as of those dates:
At March 31, 2024
ActualFor Capital
Adequacy Purposes
AmountRatioAmountRatio
(Dollars in Thousands)
Total capital (to risk-weighted assets)$742,200 15.45 %$384,298 8.00 %
Tier 1 capital (to risk-weighted assets)705,286 14.68 %288,223 6.00 %
Common equity tier 1 capital (to risk-weighted assets)705,286 14.68 %216,167 4.50 %
Tier 1 capital (to adjusted total assets)705,286 9.07 %310,999 4.00 %
At June 30, 2023
ActualFor Capital
Adequacy Purposes
AmountRatioAmountRatio
(Dollars in Thousands)
Total capital (to risk-weighted assets)$770,621 14.75 %$418,015 8.00 %
Tier 1 capital (to risk-weighted assets)734,987 14.07 %313,511 6.00 %
Common equity tier 1 capital (to risk-weighted assets)734,987 14.07 %235,133 4.50 %
Tier 1 capital (to adjusted total assets)734,987 9.07 %324,170 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. 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, 2024.
Recent Accounting Pronouncements
For a discussion of the expected impact of recently issued accounting pronouncements that we have adopted, please refer to Note 3 to the unaudited consolidated financial statements.
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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 following tables present the results of our internal EVE and NII analyses as of March 31, 2024 and June 30, 2023, respectively:
March 31, 2024
1 to 12 Months13 to 24 Months
Change in Interest RatesEVE% Change
in EVE		NII% Change
in NII		NII% Change
in NII
(Dollars in Thousands)
+300 bps$362,677 (37.80)%$135,326 (4.53)%$150,950 (4.83)%
+200 bps428,204 (26.56)%137,092 (3.28)%152,590 (3.80)%
+100 bps507,920 (12.89)%139,602 (1.51)%156,069 (1.61)%
0 bps583,100 — 141,742 — 158,619 — 
-100 bps656,635 12.61 %146,006 3.01 %162,705 2.58 %
-200 bps704,291 20.78 %147,849 4.31 %162,792 2.63 %
-300 bps769,692 32.00 %148,132 4.51 %159,692 0.68 %
June 30, 2023
1 to 12 Months13 to 24 Months
Change in Interest RatesEVE% Change
in EVE		NII% Change
in NII		NII% Change
in NII
(Dollars in Thousands)
+300 bps$507,998 (32.36)%$154,552 (5.26)%$168,366 (3.87)%
+200 bps571,129 (23.95)%156,274 (4.20)%167,683 (4.26)%
+100 bps673,314 (10.35)%160,344 (1.71)%173,170 (1.13)%
0 bps751,040 — 163,132 — 175,143 — 
-100 bps799,675 6.48 %163,455 0.20 %173,319 (1.04)%
-200 bps814,293 8.42 %161,284 (1.13)%166,473 (4.95)%
-300 bps849,208 13.07 %158,526 (2.82)%156,507 (10.64)%
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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, 2024, 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.
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PART II
ITEM 1.    Legal Proceedings
At March 31, 2024, 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, 2023, previously filed with the Securities and Exchange Commission.
ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds
The Company did not repurchase any shares of its common stock during the three month period ended March 31, 2024.
ITEM 3.    Defaults Upon Senior Securities
Not applicable.
ITEM 4.    Mine Safety Disclosures
Not applicable.
ITEM 5.    Other Information
Securities Trading Plans of Directors and Executive Officers
During the three months ended March 31, 2024, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement”.
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ITEM 6.    Exhibits
The following Exhibits are filed as part of this report:
3.1
3.2
4
31.1
31.2
32.1
32.2
101
The following materials from the Company’s Form 10-Q for the quarter ended March 31, 2024, 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.INSInline 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.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Labels Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
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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.
Date: May 7, 2024
By:/s/ Craig L. Montanaro
Craig L. Montanaro
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 7, 2024
By:/s/ Keith Suchodolski
Keith Suchodolski
Senior Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
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