Kearny Financial Corp
For the period ended Dec 31, 2024. Filed Feb 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 6, 2025
KRNY$9.01-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001617242-24-000084
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-06.
0001617242-25-000007
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 100 current paragraphs.
36 unchanged; 33 reworded; 17 added; 4 removed; 0 previous and 14 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
(1)At December 31, 2024 and June 30, 2024, includes $851,731 and $849,033 of non-owner occupied commercial real estate (“CRE”) loans with an LTV of 53% and 53%, respectively, and includes $98,463 and $99,042 of owner occupied CRE loans with an LTV of 48% and 50%, respectively.
Current report
There were no losses on sale and call of securities during the three months ended December 31, 2024, compared to a loss of $18.1 million recorded in the prior year period. The loss in the prior year 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.
Current report
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. No such losses were recorded for the quarter ended December 31, 2024.
Current report
Salaries and employee benefits increased $297,000 to $17.6 million for quarter ended December 31, 2024. This increase was primarily driven by higher salary expense from annual merit increases.
Current report
The decrease in income tax expense reflected the absence of discrete tax costs related to the BOLI restructure recorded in the prior comparative period, partially offset by pre-tax income in the current period compared to a pre-tax net loss in the prior comparative period.
Current report
Effective tax rates for the quarter ended December 31, 2024 and 2023 were 16.0% and (14.8)%, respectively. The increase in the effective tax rate was primarily due to the absence of discrete tax costs related to the BOLI restructure, as discussed above.
Current report
Net Income (Loss). Net income for the six months ended December 31, 2024 was $12.7 million, or $0.20 per diluted share, compared to a net loss of $4.0 million, or $0.06 per diluted share, for the six months ended December 31, 2023. The increase in net income reflected an increase in non-interest income and decreases in the provision for credit losses and income tax expense, partially offset by a decrease in net interest income. The net loss for the prior year period included a $12.9 million after-tax net loss on the sale of securities that resulted from a previously announced investment securities repositioning and an after-tax net loss of $6.3 million from the previously disclosed BOLI restructure.
Current report
Net interest margin decreased 21 basis points to 1.81% for the six months ended December 31, 2024, from 2.02% for the six months ended December 31, 2023 and reflected an increase in the cost of interest-bearing liabilities 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 liabilities.
Current report
(4)Includes average balances of non-interest-bearing deposits of $602.0 million and $604.8 million for the six months ended December 31, 2024 and 2023, respectively.
Current report
Provision for Credit Losses. The provision for credit losses decreased $2.1 million to $215,000 for the six months ended December 31, 2024, compared to $2.4 million for the six months ended December 31, 2023. The provision for the six months ended December 31, 2024 was primarily driven by loan growth. By comparison, the provision for credit losses for the six months ended December 31, 2023 was primarily driven by charge-offs on three related commercial real estate loans.
Current report
Non-Interest Income. Total non-interest income increased $21.5 million to $9.5 million for the six months ended December 31, 2024, compared to a loss of $12.0 million for the six months ended December 31, 2023.
Current report
There were no gains on sale and call of securities during the six months ended December 31, 2024 compared to a loss of $18.1 million recorded during the prior year period. The loss in the prior 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.
Current report
We recognized a non-recurring loss of $973,000 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 current period.
Current report
Income from bank owned life insurance increased $2.4 million to $5.2 million for the six months ended December 31, 2024. The increase was primarily due to improved income resulting from the BOLI restructure initiated in December 2023, and the absence of non-recurring exchange charges related to the restructure recorded in the prior year period.
Current report
Non-Interest Expense. Total non-interest expense decreased $194,000 to $59.3 million for the six months ended December 31, 2024, compared to $59.5 million for the six months ended December 31, 2023.
Current report
Provision for Income Taxes. Provision for income taxes decreased $2.8 million to $2.3 million for the six months ended December 31, 2024 from $5.1 million for the six months ended December 31, 2023.
Current report
The decrease in income tax expense reflected the absence of $5.7 million of discrete tax cost associated with the BOLI restructure in the prior year period, partially offset by a higher level of pre-tax income in the current year period.
Removed paragraphs (4)
Previous report
Fees and service charges decreased $113,000 to $635,000 for the quarter ended September 30, 2024. The decrease primarily reflected decreases in various loan-related fees and charges.
Previous report
Other non-interest income decreased $181,000 to $833,000 for the quarter ended September 30, 2024. The decrease in other non-interest income was primarily driven by the absence of OREO income recorded in the current period due to the sale of our sole OREO asset in January 2024.
Previous report
Salaries and employee benefits decreased $263,000 to $17.5 million for quarter ended September 30, 2024. This decrease was primarily driven by a non-recurring decrease in stock-based compensation and lower incentive compensation, partially offset by annual merit increases and higher payroll taxes.
Previous report
The decrease in income tax expense reflected a lower level of pre-tax income compared to the prior period.
Reworded paragraphs (33)
Previous wording
Executive Summary. Total assets increased $88.9 million to $7.77 billion at September 30, 2024 from $7.68 billion at June 30, 2024. The increase primarily reflected increases in cash and cash equivalents and in net loans receivable, partially offset by decreases in the market values of interest rate derivatives and a decrease in Federal Home Loan Bank of New York (“FHLB”) capital stock.
Current wording
Executive Summary. Total assets increased $47.9 million to $7.73 billion at December 31, 2024 from $7.68 billion at June 30, 2024. The increase primarily reflected increases in cash and cash equivalents and in net loans receivable, partially offset by a decrease in investment securities available for sale, as discussed below, declines in the market values of interest rate derivatives and a decrease in Federal Home Loan Bank of New York (“FHLB”) capital stock.
Previous wording
Investment Securities. Investment securities available for sale decreased $2.0 million to $1.07 billion at September 30, 2024, from $1.07 billion at June 30, 2024. This decrease was largely the result of principal repayments of $63.6 million, partially offset by purchases of $37.5 million and a $23.9 million increase in the fair value of the portfolio to a net unrealized loss of $106.8 million.
Current wording
Investment Securities. Investment securities available for sale decreased $54.6 million to $1.02 billion at December 31, 2024, from $1.07 billion at June 30, 2024. This decrease was largely the result of principal repayments of $118.2 million, partially offset by purchases of $58.9 million and a $4.4 million increase in the fair value of the portfolio to a net unrealized loss of $126.3 million.
Previous wording
Investment securities held to maturity decreased $3.5 million to $132.3 million at September 30, 2024 from $135.7 million at June 30, 2024. This decrease was driven by principal repayments of $3.5 million.
Current wording
Investment securities held to maturity decreased $8.5 million to $127.3 million at December 31, 2024 from $135.7 million at June 30, 2024. This decrease was driven by principal repayments of $8.6 million.
Previous wording
Loans Held-for-Sale. Loans held-for-sale totaled $8.9 million at September 30, 2024 as compared to $6.0 million at June 30, 2024 and are reported separately from the balance of net loans receivable. During the three months ended September 30, 2024, we sold $26.6 million of residential mortgage loans, resulting in a gain on sale of $200,000.
Current wording
Loans Held-for-Sale. Loans held-for-sale totaled $5.7 million at December 31, 2024 as compared to $6.0 million at June 30, 2024 and are reported separately from the balance of net loans receivable. During the six months ended December 31, 2024, we sold $64.3 million of residential mortgage loans, resulting in a gain on sale of $504,000.
Previous wording
Net Loans Receivable. Net loans receivable increased $51.5 million, or 0.9%, to $5.74 billion at September 30, 2024 from $5.69 billion at June 30, 2024. Details regarding the change in the loan portfolio, by loan segment, are presented below:
Current wording
Net Loans Receivable. Net loans receivable increased $59.5 million, or 1.0%, to $5.75 billion at December 31, 2024 from $5.69 billion at June 30, 2024. Details regarding the change in the loan portfolio, by loan segment, are presented below:
Previous wording
Commercial loan origination volume for the three months ended September 30, 2024 totaled $85.2 million, comprised of $37.3 million of commercial mortgage loan originations, $29.7 million of commercial business loan originations and construction loan disbursements of $18.2 million.
Current wording
Commercial loan origination volume for the six months ended December 31, 2024 totaled $242.3 million, comprised of $128.4 million of commercial mortgage loan originations, $59.3 million of commercial business loan originations and construction loan disbursements of $54.6 million.
Previous wording
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $50.1 million for the three months ended September 30, 2024. Home equity loan and line of credit origination volume for the same period totaled $4.6 million.
Current wording
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $89.6 million for the six months ended December 31, 2024. Home equity loan and line of credit origination volume for the same period totaled $12.5 million.
Previous wording
Nonperforming Assets. Nonperforming assets remained steady at $39.9 million, or 0.51% of total assets, at September 30, 2024, and $39.9 million, or 0.52% of total assets, at June 30, 2024, respectively.
Current wording
Nonperforming Assets. Nonperforming assets decreased $2.2 million to $37.7 million, or 0.49% of total assets, at December 31, 2024, from $39.9 million, or 0.52% of total assets, at June 30, 2024, respectively.
Previous wording
Allowance for Credit Losses (“ACL”). At September 30, 2024 and June 30, 2024, the ACL totaled $44.9 million, or 0.78% of total loans. The ACL for the three months ended September 30, 2024 reflected net charge-offs of $124,000, partially offset by a provision for credit losses of $108,000. The provision for credit losses for the three months ended September 30, 2024 was primarily driven by an increase in the balance of loans receivable.
Current wording
Allowance for Credit Losses (“ACL”). At December 31, 2024 and June 30, 2024, the ACL totaled $44.5 million, or 0.77% of total loans. The ACL for the six months ended December 31, 2024 reflected net charge-offs of $697,000, partially offset by a provision for credit losses of $215,000. The provision for credit losses for the six months ended December 31, 2024 was primarily driven by an increase in the balance of loans receivable.
Previous wording
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, and other assets, decreased $51.6 million to $665.5 million at September 30, 2024 from $717.1 million at June 30, 2024. The decrease in the balance of these other assets during the three months ended September 30, 2024 largely reflected a decrease in the market value of interest rate derivatives and a decrease in FHLB stock, partially offset by an increase in BOLI. The remaining change generally reflected normal operating fluctuations within these line items.
Current wording
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, and other assets, decreased $25.8 million to $691.3 million at December 31, 2024 from $717.1 million at June 30, 2024. The decrease in the balance of these other assets during the six months ended December 31, 2024 largely reflected a decrease in the market value of interest rate derivatives and a decrease in FHLB stock, partially offset by increases in BOLI and other receivables resulting from unsettled funds. The remaining change generally reflected normal operating fluctuations within these line items.
Previous wording
Deposits. Total deposits increased $312.4 million, or 6.1%, to $5.47 billion at September 30, 2024 from $5.16 billion at June 30, 2024. Included in total deposits are brokered time deposits of $733.3 million at September 30, 2024 and $408.2 million at June 30, 2024. This increase was largely the result of a reallocation from FHLB advances into brokered certificates of deposits, due to the relatively more favorable economics of brokered deposits compared to advances in the current economic environment. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:
Current wording
Deposits. Total deposits increased $512.9 million, or 9.9%, to $5.67 billion at December 31, 2024 from $5.16 billion at June 30, 2024. Included in total deposits are brokered and listing service time deposits of $752.0 million at December 31, 2024 and $408.2 million at June 30, 2024. This increase was driven by a reallocation from FHLB advances into brokered certificates of deposits, due to the relatively more favorable economics of brokered deposits compared to advances in the current economic environment, and growth in deposits from our branch network and digital channels. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:
Previous wording
Uninsured deposits totaled $1.80 billion as of September 30, 2024 compared to $1.77 billion as of June 30, 2024. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $773.4 million, or 14.1% of total deposits, at September 30, 2024 compared to $764.4 million, or 14.8% of total deposits, at June 30, 2024.
Current wording
Uninsured deposits totaled $1.96 billion as of December 31, 2024 compared to $1.77 billion as of June 30, 2024. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $797.7 million, or 14.1% of total deposits, at December 31, 2024 compared to $764.4 million, or 14.8% of total deposits, at June 30, 2024.
Previous wording
Borrowings. The balance of borrowings decreased by $229.9 million to $1.48 billion at September 30, 2024 from $1.71 billion at June 30, 2024, primarily reflecting a decrease in FHLB borrowings offset by an increase in brokered certificates of deposits, as noted above.
Current wording
Borrowings. The balance of borrowings decreased by $450.8 million to $1.26 billion at December 31, 2024 from $1.71 billion at June 30, 2024, primarily reflecting a decrease in FHLB and other borrowings offset by an increase in brokered certificates of deposits, as noted above.
Previous wording
At September 30, 2024, we maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.06 billion, an increase of $240.0 million from June 30, 2024, and represents 26.5% of total assets.
Current wording
At December 31, 2024, we maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.32 billion, an increase of $494.0 million from June 30, 2024, and represents 30.0% of total assets.
Previous wording
Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, increased $8.5 million to $70.4 million at September 30, 2024 from $62.0 million at June 30, 2024. The change in the balance of these other liabilities generally reflected normal operating fluctuations during the period.
Current wording
Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, decreased $5.5 million to $56.5 million at December 31, 2024 from $62.0 million at June 30, 2024. The change in the balance of these other liabilities generally reflected normal operating fluctuations during the period.
Previous wording
Stockholders’ Equity. Stockholders’ equity decreased $2.0 million to $751.5 million at September 30, 2024 from $753.6 million at June 30, 2024. The decrease in stockholders’ equity during the three months ended September 30, 2024 largely reflected cash dividends of $6.9 million and an other comprehensive loss of $1.6 million, partially offset by net income of $6.1 million. The other comprehensive loss for the three months ended September 30, 2024 was driven by a decrease in the fair value of our derivatives portfolio, partially offset by an increase in the fair value of our available for sale securities.
Current wording
Stockholders’ Equity. Stockholders’ equity decreased $8.7 million to $744.9 million at December 31, 2024 from $753.6 million at June 30, 2024. The decrease in stockholders’ equity during the six months ended December 31, 2024 largely reflected cash dividends of $13.8 million and an other comprehensive loss of $8.9 million, partially offset by net income of $12.7 million. The other comprehensive loss for the six months ended December 31, 2024 was driven by a decrease in the fair value of our derivatives portfolio, partially offset by an increase in the fair value of our available for sale securities.
Previous wording
Book value per share decreased by $0.06 to $11.64 at September 30, 2024 while tangible book value per share decreased by $0.05 to $9.85 at September 30, 2024.
Current wording
Book value per share decreased by $0.16 to $11.53 at December 31, 2024 while tangible book value per share decreased by $0.15 to $9.75 at December 31, 2024. These decreases were driven by the decreases in stockholders’ equity, as described above.
Previous wording
Net Income. Net income for the quarter ended September 30, 2024 was $6.1 million, or $0.10 per diluted share, compared to $9.8 million, or $0.16 per diluted share, for the quarter ended September 30, 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 income tax expense and the provision for credit losses.
Current wording
Net Income (Loss). Net income for the quarter ended December 31, 2024 was $6.6 million, or $0.10 per diluted share, compared to a net loss of $13.8 million, or $0.22 per diluted share, for the quarter ended December 31, 2023. The increase in net income reflected an increase in non-interest income and decreases in income tax expense and in the provision for credit losses, partially offset by a decrease in net interest income. The net loss for the prior year period included a $12.9 million after-tax net loss on the sale of securities that resulted from a previously announced investment securities repositioning and an after-tax net loss of $6.3 million from the previously disclosed BOLI restructure.
Previous wording
Net Interest Income. Net interest income decreased by $6.7 million to $32.4 million for the quarter ended September 30, 2024 compared to $39.2 million for the quarter ended September 30, 2023. The decrease between the comparative periods resulted from an increase of $8.8 million in interest expense, partially offset by an increase of $2.1 million in interest income. Included in net interest income for the quarters ended September 30, 2024 and 2023, respectively, was purchase accounting accretion of $649,000 and $650,000, and loan prepayment penalty income of $52,000 and $267,000.
Current wording
Net Interest Income. Net interest income decreased by $3.2 million to $32.6 million for the quarter ended December 31, 2024 compared to $35.8 million for the quarter ended December 31, 2023. The decrease between the comparative periods resulted from an increase of $2.1 million in interest expense and a decrease of $1.1 million in interest income. Included in net interest income for the quarters ended December 31, 2024 and 2023, respectively, was purchase accounting accretion of $685,000 and $640,000, and loan prepayment penalty income of $288,000 and $185,000.
Previous wording
Net interest margin decreased 30 basis points to 1.80% for the quarter ended September 30, 2024, from 2.10% for the quarter ended September 30, 2023 reflecting 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.
Current wording
Net interest margin decreased 12 basis points to 1.82% for the quarter ended December 31, 2024, from 1.94% for the quarter ended December 31, 2023 reflecting an increase in the cost and average balances of interest-bearing deposits and a decrease in the average balance of interest-earning assets, partially offset by a decrease in the cost and average balance of interest-bearing borrowings and an increase in the yield on interest-earning assets.
Previous wording
(4)Includes average balances of non-interest-bearing deposits of $599.1 million and $612.3 million for the quarter ended September 30, 2024 and 2023, respectively.
Current wording
(4)Includes average balances of non-interest-bearing deposits of $604.9 million and $597.3 million for the quarter ended December 31, 2024 and 2023, respectively.
Previous wording
Provision for Credit Losses. The provision for credit losses decreased $137,000 to $108,000 for the quarter ended September 30, 2024, compared to $245,000 for the quarter ended September 30, 2023. The provision for the quarter ended September 30, 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 September 30, 2023 was largely driven by additional reserves provided for individually analyzed loans and a slower prepayment rate assumption, partially offset by a decrease in the balance of loans receivable.
Current wording
Provision for Credit Losses. The provision for credit losses decreased $2.0 million to $107,000 for the quarter ended December 31, 2024, compared to $2.1 million for the quarter ended December 31, 2023. The provision for the quarter ended December 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 December 31, 2023 was driven by charge-offs on three commercial real estate loans, partially offset by a decrease in the balance of loans receivable.
Previous wording
Non-Interest Income. Total non-interest income increased $616,000 to $4.6 million for the quarter ended September 30, 2024, compared to $4.0 million for the quarter ended September 30, 2023.
Current wording
Non-Interest Income. Total non-interest income increased $20.9 million to $4.9 million for the quarter ended December 31, 2024, compared to a loss of $16.0 million for the quarter ended December 31, 2023.
Previous wording
Income from BOLI increased $901,000 to $2.6 million for the quarter ended September 30, 2024, primarily driven by improved income resulting from the BOLI restructure initiated in December 2023.
Current wording
Income from BOLI increased $1.5 million to $2.6 million for the quarter ended December 31, 2024, primarily driven by improved income resulting from the BOLI restructure initiated in December 2023, and the absence of non-recurring exchange charges related to the restructure recorded in the prior year period.
Previous wording
Non-Interest Expense. Total non-interest expense remained flat at $29.8 million for the quarter ending September 30, 2024 compared to the quarter ended September 30, 2023.
Current wording
Non-Interest Expense. Total non-interest expense decreased $206,000 to $29.6 million for the quarter ending December 31, 2024, compared to $29.8 million the quarter ended December 31, 2023.
Previous wording
Equipment and systems expense increased $59,000 to $3.9 million for the quarter ended September 30, 2024, largely driven by increases in technology expense associated with the Company’s ongoing digital banking initiatives.
Current wording
Equipment and systems expense increased $78,000 to $3.9 million for the quarter ended December 31, 2024, largely driven by increases in technology expense associated with the Company’s ongoing digital banking initiatives.
Previous wording
Advertising and marketing expense increased $114,000 to $342,000 for the quarter ended September 30, 2024, largely driven by an increase in digital and online advertising campaigns to support our deposit growth initiatives.
Current wording
Advertising and marketing expense increased $10,000 to $311,000 for the quarter ended December 31, 2024, largely driven by an increase in digital and online advertising campaigns to support our deposit growth initiatives.
Previous wording
Provision for Income Taxes. Provision for income taxes decreased $2.2 million to $1.1 million for the quarter ended September 30, 2024 from $3.3 million for the quarter ended September 30, 2023.
Current wording
Provision for Income Taxes. Provision for income taxes decreased $531,000 to $1.3 million for the quarter ended December 31, 2024 from $1.8 million for the quarter ended December 31, 2023.
Previous wording
Other non-interest expense increased $55,000 to $3.4 million for the quarter ended September 30, 2024. This increase reflected an increase in the provision for credit losses on off balance sheet commitments, offset by a decrease in OREO expenses following the sale of a our sole OREO asset in January 2024.
Current wording
Other non-interest expense decreased $669,000 to $6.4 million for the six months ended December 31, 2024. This decrease reflected a decrease in OREO expenses due to the sale of the bank’s sole OREO asset in the quarter ended December 31, 2023, partially offset by an increase in the provision for credit losses on off balance sheet commitments.
Previous wording
Effective tax rates for the quarter ended September 30, 2024 and 2023 were 15.1% and 25.2%, respectively. The decrease in the effective tax rate was primarily due to lower full year projected taxable income and an increase in non-taxable BOLI income compared to the prior year period.
Current wording
Effective tax rates for the six months ended December 31, 2024 and 2023 were 15.6% and 460.3%, respectively. The decrease in the effective tax rate was primarily due to the absence of discrete tax costs of $5.7 million associated with the BOLI restructure in the prior year period.
Previous wording
At September 30, 2024, liquidity included $155.6 million of short-term cash and cash equivalents and $1.07 billion of investment securities available for sale. As of September 30, 2024, we had the capacity to borrow additional cash funds totaling $2.06 billion and $663.9 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 $62.8 million at September 30, 2024. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $920.0 million of which $270.0 million was outstanding.
Current wording
At December 31, 2024, liquidity included $141.6 million of short-term cash and cash equivalents and $1.02 billion of investment securities available for sale. As of December 31, 2024, we had the capacity to borrow additional cash funds totaling $2.32 billion and $1.60 billion 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 $96.0 million at December 31, 2024. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $920.0 million of which none was outstanding.
Previous wording
At September 30, 2024, we had outstanding commitments to originate and purchase loans totaling $52.2 million while such commitments totaled $47.9 million at June 30, 2024. As of those same dates, our pipeline of loans held for sale included $17.8 million and $16.0 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.
Current wording
At December 31, 2024, we had outstanding commitments to originate and purchase loans totaling $94.8 million while such commitments totaled $47.9 million at June 30, 2024. As of those same dates, our pipeline of loans held for sale included $4.6 million and $16.0 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.
Previous wording
Construction loans in process and unused lines of credit were $117.4 million and $154.1 million, respectively, at September 30, 2024 compared to $75.7 million and $157.3 million, respectively, at June 30, 2024. We are also subject to the contingent liabilities resulting from letters of credit whose outstanding balances totaled $160,000 at September 30, 2024 and June 30, 2024, respectively.
Current wording
Construction loans in process and unused lines of credit were $90.0 million and $156.7 million, respectively, at December 31, 2024 compared to $75.7 million and $157.3 million, respectively, at June 30, 2024. We are also subject to the contingent liabilities resulting from letters of credit whose outstanding balances totaled $160,000 at December 31, 2024 and June 30, 2024, respectively.
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
Other non-interest expense decreased $724,000 to $3.1 million for the quarter ended December 31, 2024. This decrease reflected a decrease in OREO expenses following the sale of a our sole OREO asset in January 2024.
Current report — wording carried from elsewhere
Comparison of Operating Results for the Six Months Ended December 31, 2024 and December 31, 2023
Current report — wording carried from elsewhere
Net Interest Income. Net interest income decreased by $9.9 million to $65.1 million for the six months ended December 31, 2024 compared to $75.0 million for the six months ended December 31, 2023. The decrease between the comparative periods resulted from an increase of $10.9 million in interest expense, partially offset by an increase of $944,000 in interest income. Included in net interest income for the six months ended December 31, 2024 and 2023, respectively, was purchase accounting accretion of $340,000 and $1.3 million, and loan prepayment penalty income of $1.3 million and $452,000.
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
(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.
Current report — wording carried from elsewhere
(2)Fair value adjustments have been excluded in the balances of interest-earning assets.
Current report — wording carried from elsewhere
(3)Includes interest-bearing deposits at other banks and FHLB of New York capital stock.
Current report — wording carried from elsewhere
(5)Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
Current report — wording carried from elsewhere
(6)Net interest margin represents net interest income as a percentage of average interest-earning assets.
Current report — wording carried from elsewhere
Additional information regarding the ACL and the associated provisions recognized during the six months ended December 31, 2024 and 2023 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at December 31, 2024 and June 30, 2024.
Current report — wording carried from elsewhere
The remaining changes in the other components of non-interest income between comparative periods generally reflected normal operating fluctuations within those line items.
Current report — wording carried from elsewhere
Equipment and systems expense increased $137,000 to $7.8 million for the quarter ended December 31, 2024, largely attributable to increases in technology expense associated with the Company's ongoing digital banking initiatives.
Current report — wording carried from elsewhere
Advertising and marketing expense increased $124,000 to $653,000 for the six months ended December 31, 2024. This increase in advertising expense was largely driven by an increase in digital and online advertising campaigns to support our deposit growth initiatives.
Current report — wording carried from elsewhere
The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items.