Kearny Financial Corp
For the period ended Mar 31, 2025. Filed May 7, 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.
Mar 31, 2025 · Filed May 7, 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 2024-12-31; filed 2025-02-06.
0001617242-25-000007
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001617242-25-000014
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 100 previous paragraphs and 100 current paragraphs.
44 unchanged; 51 reworded; 5 added; 3 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 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 (5)
Current report
Gain on sale of loans was $112,000 compared to a loss on sale of loans of $712,000 in the comparative period. The loss in the prior year period was primarily the result of the sale of three related nonperforming commercial real estate loans held-for-sale.
Current report
Net occupancy expense of premises increased $212,000 to $3.1 million for the quarter ended March 31, 2025. This increase was primarily driven by higher snow removal expenses due to abnormally harsh winter conditions.
Current report
Gain on sale of loans was $616,000 for the nine months ended March 31, 2025 compared to a loss on sale of loans of $393,000 for the nine months ended March 31, 2024. The loss in the prior year period was primarily the result of the sale of three related nonperforming commercial real estate loans held-for-sale.
Current report
Salaries and employee benefits increased $823,000 to $52.8 million for the nine months ended March 31, 2025. This increase was primarily driven by higher salary expense and payroll taxes from annual merit increases and an increase in incentive compensation.
Current report
Net occupancy expense of premises increased $409,000 to $8.7 million for the nine months ended March 31, 2025. This increase was primarily driven by higher snow removal expenses due to abnormally harsh winter conditions.
Removed paragraphs (3)
Previous report
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.
Previous 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.
Previous report
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.
Reworded paragraphs (51)
Previous wording
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, 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, 2024, under “Item 1A. Risk Factors.”
Current wording
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 and geopolitical conditions, including potential recessionary conditions and the imposition of tariffs or other domestic or international governmental policies, 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, 2024, under “Item 1A. Risk Factors.”
Previous 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.
Current wording
Executive Summary. Total assets increased $49.7 million to $7.73 billion at March 31, 2025 from $7.68 billion at June 30, 2024. The increase primarily reflected increases in cash and cash equivalents and net loans receivable, partially offset by 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 $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.
Current wording
Investment Securities. Investment securities available for sale decreased $69.4 million to $1.00 billion at March 31, 2025, from $1.07 billion at June 30, 2024. This decrease was largely the result of principal repayments of $146.8 million, partially offset by purchases of $58.9 million and an $18.0 million increase in the fair value of the portfolio to a net unrealized loss of $112.7 million.
Previous 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.
Current wording
Investment securities held to maturity decreased $10.9 million to $124.9 million at March 31, 2025 from $135.7 million at June 30, 2024. This decrease was driven by principal repayments of $11.0 million.
Previous 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.
Current wording
Loans Held-for-Sale. Loans held-for-sale totaled $6.2 million at March 31, 2025 as compared to $6.0 million at June 30, 2024 and are reported separately from the balance of net loans receivable. During the nine months ended March 31, 2025, we sold $81.3 million of residential mortgage loans, resulting in a gain on sale of $616,000.
Previous 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:
Current wording
Net Loans Receivable. Net loans receivable increased $113.9 million, or 2.0%, to $5.80 billion at March 31, 2025 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 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.
Current wording
Commercial loan origination volume for the nine months ended March 31, 2025 totaled $390.7 million, comprised of $220.6 million of commercial mortgage loan originations, $95.1 million of commercial business loan originations and construction loan disbursements of $75.0 million.
Previous 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.
Current wording
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $118.1 million for the nine months ended March 31, 2025. Purchases of one- to four-family residential mortgage loans totaled $730,000 for the same period. Home equity loan and line of credit origination volume for the same period totaled $22.0 million.
Previous wording
(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 wording
(1)At March 31, 2025 and June 30, 2024, includes $891,322 and $849,033 of non-owner occupied commercial real estate (“CRE”) loans with an LTV of 53% and 53%, respectively, and includes $96,752 and $99,042 of owner occupied CRE loans with an LTV of 48% and 50%, respectively.
Previous 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.
Current wording
Allowance for Credit Losses (“ACL”). At March 31, 2025 and June 30, 2024, the ACL totaled $44.5 million, or 0.76% of total loans. The ACL for the nine months ended March 31, 2025 reflected net charge-offs of $1.1 million, partially offset by a provision for credit losses of $581,000. The provision for credit losses for the nine months ended March 31, 2025 was primarily driven by charge-offs, as discussed above, and 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 $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.
Current wording
Other Assets. The aggregate balance of other assets, including premises and equipment, FHLB stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance (“BOLI”), deferred income taxes, and other assets, decreased $46.2 million to $670.9 million at March 31, 2025 from $717.1 million at June 30, 2024. The decrease in the balance of these other assets during the nine months ended March 31, 2025 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.
Previous 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:
Current wording
Deposits. Total deposits increased $549.2 million, or 10.6%, to $5.71 billion at March 31, 2025 from $5.16 billion at June 30, 2024. Included in total deposits are retail and brokered time deposits of $1.22 billion and $732.6 million at March 31, 2025 and $1.20 billion 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 $1.96 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.
Current wording
Uninsured deposits totaled $1.96 billion as of March 31, 2025 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 $799.2 million, or 14.0% of total deposits, at March 31, 2025 compared to $764.4 million, or 14.8% of total deposits, at June 30, 2024.
Previous 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.
Current wording
Borrowings. The balance of borrowings decreased by $495.8 million to $1.21 billion at March 31, 2025 from $1.71 billion at June 30, 2024, primarily reflecting a decrease in FHLB and other borrowings as a result of the increase in brokered certificates of deposits, as noted above.
Previous 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.
Current wording
At March 31, 2025, we maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.42 billion, representing 31.3% of total assets.
Previous 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.
Current wording
Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, increased $1.7 million to $63.7 million at March 31, 2025 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 $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.
Current wording
Stockholders’ Equity. Stockholders’ equity decreased $5.5 million to $748.1 million at March 31, 2025 from $753.6 million at June 30, 2024. The decrease in stockholders’ equity during the nine months ended March 31, 2025 largely reflected cash dividends of $20.7 million and an other comprehensive loss of $6.0 million, partially offset by net income of $19.3 million. The other comprehensive loss for the nine months ended March 31, 2025 was driven by a decrease in the fair value of our derivatives portfolio, partially offset by an increase in the fair value of our available for sale securities.
Previous 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.
Current wording
Book value per share decreased by $0.11 to $11.58 at March 31, 2025 while tangible book value per share decreased by $0.10 to $9.80 at March 31, 2025. These decreases were driven by the decreases in stockholders’ equity, as described above.
Previous 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.
Current wording
Net Income. Net income for the quarter ended March 31, 2025 was $6.6 million, or $0.11 per diluted share, compared to $7.4 million, or $0.12 per diluted share, for the quarter ended March 31, 2024. The decrease in net income reflected an increase in non-interest expense and a decrease in net interest income, partially offset by an increase in non-interest income and lower income tax expense.
Previous 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.
Current wording
Net Interest Income. Net interest income decreased by $277,000 to $34.0 million for the quarter ended March 31, 2025 compared to $34.3 million for the quarter ended March 31, 2024. The decrease between the comparative periods resulted from a decrease of $2.8 million in interest income, partially offset by a decrease of $2.5 million in interest expense. Included in net interest income for the quarters ended March 31, 2025 and 2024, respectively, was purchase accounting accretion of $511,000 and $734,000, and loan prepayment penalty income of $226,000 and $61,000.
Previous 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.
Current wording
Net interest margin increased one basis point to 1.90% for the quarter ended March 31, 2025, from 1.89% for the quarter ended March 31, 2024 reflecting a decrease in the average balance of interest-bearing borrowings, partially offset by increases in the average balance of interest-bearing deposits and the cost of FHLB borrowings, and a decrease in the average balance and yield of interest-earning assets.
Previous 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.
Current wording
(4)Includes average balances of non-interest-bearing deposits of $602.6 million and $581.9 million for the quarter ended March 31, 2025 and 2024, respectively.
Previous 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.
Current wording
Provision for Credit Losses. The provision for credit losses increased $17,000 to $366,000 for the quarter ended March 31, 2025, compared to $349,000 for the quarter ended March 31, 2024. The provision for the quarter ended March 31, 2025 was primarily driven by loan charge-offs. By comparison, the provision for credit losses for the quarter ended March 31, 2024 was primarily driven by loan growth compared to previous quarter end loan balances.
Previous 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.
Current wording
Non-Interest Income. Total non-interest income increased $359,000 to $4.6 million for the quarter ended March 31, 2025, compared to $4.2 million for the quarter ended March 31, 2024.
Previous 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.
Current wording
Income from BOLI decreased $422,000 to $2.6 million for the quarter ended March 31, 2025, primarily driven by the absence of a $631,000 non-recurring payment on one life insurance policy recorded in the prior year period, partially offset by improved income resulting from the BOLI restructure initiated in December 2023.
Previous 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.
Current wording
Non-Interest Expense. Total non-interest expense increased $1.3 million to $30.4 million for the quarter ending March 31, 2025, compared to $29.1 million the quarter ended March 31, 2024.
Previous wording
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 wording
Salaries and employee benefits increased $789,000 to $17.7 million for the quarter ended March 31, 2025. This increase was primarily driven by higher salary expense and payroll taxes from annual merit increases and an increase in incentive compensation.
Previous 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.
Current wording
Equipment and systems expense increased $98,000 to $3.9 million for the quarter ended March 31, 2025, largely driven by increases in technology expense associated with the Company’s ongoing digital banking initiatives.
Previous 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.
Current wording
Advertising and marketing expense increased $222,000 to $609,000 for the quarter ended March 31, 2025, 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 $531,000 to $1.3 million for the quarter ended December 31, 2024 from $1.8 million for the quarter ended December 31, 2023.
Current wording
Provision for Income Taxes. Provision for income taxes decreased $517,000 to $1.2 million for the quarter ended March 31, 2025 from $1.7 million for the quarter ended March 31, 2024, reflecting a lower level of pre-tax income compared to the prior year period.
Previous wording
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 wording
Effective tax rates for the quarter ended March 31, 2025 and 2024 were 15.3% and 18.8%, respectively.
Previous wording
Comparison of Operating Results for the Six Months Ended December 31, 2024 and December 31, 2023
Current wording
Comparison of Operating Results for the Nine Months Ended March 31, 2025 and March 31, 2024
Previous wording
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 wording
Net Income. Net income for the nine months ended March 31, 2025 was $19.3 million, or $0.31 per diluted share, compared to $3.4 million, or $0.06 per diluted share, for the nine months ended March 31, 2024. The increase in net income primarily reflected an increase in non-interest income as well as decreases in the provision for credit losses and income tax expense, partially offset by a decrease in net interest income and an increase in non-interest expense. Net income for the prior year period included a $12.9 million after-tax net loss on the sale of securities that resulted from the repositioning of our investment securities portfolio in December 2023 and an after-tax net loss of $6.3 million from the previously disclosed BOLI restructure.
Previous wording
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 wording
Net Interest Income. Net interest income decreased by $10.2 million to $99.1 million for the nine months ended March 31, 2025 compared to $109.3 million for the nine months ended March 31, 2024. The decrease between the comparative periods resulted from an increase of $8.4 million in interest expense and a decrease of $1.8 million in interest income. Included in net interest income for the nine months ended March 31, 2025 and 2024, respectively, was purchase accounting accretion of $1.8 million and $2.0 million, and loan prepayment penalty income of $566,000 and $513,000.
Previous wording
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 wording
Net interest margin decreased 14 basis points to 1.84% for the nine months ended March 31, 2025, from 1.98% for the nine months ended March 31, 2024 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.
Previous wording
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 wording
Details regarding 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.
Previous wording
(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 wording
(4)Includes average balances of non-interest-bearing deposits of $602.2 million and $597.2 million for the nine months ended March 31, 2025 and 2024, respectively.
Previous wording
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 wording
Provision for Credit Losses. The provision for credit losses decreased $2.1 million to $581,000 for the nine months ended March 31, 2025, compared to $2.7 million for the nine months ended March 31, 2024. The provision for the nine months ended March 31, 2025 was primarily driven by charge-offs and loan growth. By comparison, the provision for credit losses for the nine months ended March 31, 2024 was primarily driven by charge-offs on three related commercial real estate loans.
Previous wording
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 wording
Additional information regarding the ACL and the associated provisions recognized during the nine months ended March 31, 2025 and 2024 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at March 31, 2025 and June 30, 2024.
Previous wording
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 wording
Non-Interest Income. Total non-interest income increased $21.9 million to $14.1 million for the nine months ended March 31, 2025, compared to a loss of $7.8 million for the nine months ended March 31, 2024.
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Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.