On this page of StockholderLetter.com we present the 9/6/2024 shareholder letter from Kearny Financial Corp. — ticker symbol KRNY. Reading current and past KRNY letters to shareholders can bring important insights into the investment thesis.
Navigating Today s Banking Challenges ANNUAL REPORT 2024 Together ANNUAL REPORT 2024
Letter to Shareholders Dear Fellow Shareholder, Fiscal 2024 proved to be one of the most challenging operating net interest margin and earnings in the near term without environments for us as well as the rest of the financial services negatively affecting our long-term earnings trajectory as we industry. The inverted yield curve brought on by the Federal anticipate the yield curve beginning to normalize in the near Reserve s restrictive monetary policy during the last two years future. This was reflected in our more recent quarterly results, continued to pressure margins for most in the financial services with our net interest margin only contracting modestly from sector. This was coupled with fierce competition for deposits our fiscal 2024 third quarter results as the pressure on our net as consumers and businesses demanded higher yields on their interest margin stabilizes. Lastly, as you will see in the annual funds. In some cases, the industry saw disintermediation into report, our asset quality remains strong despite these pressures short-term debt instruments issued by the U.S. treasury or even with nonperforming assets improving from June 30, 2023 levels. money market funds to capture higher rates in the near term, as many economists forecasted a higher for longer restrictive monetary policy stance by the Federal Reserve. This restrictive policy put additional pressure on companies both large and small, as corporate bankruptcies reached their highest level since prior to the pandemic. From a profitability perspective, the increased cost of borrowing made it difficult for most to absorb, forcing many companies into bankruptcy as the only alternative to restructuring their debt obligations. Looking to the commercial real estate sector, many borrowers felt the pressure with loan yields peaking at over 8% in some cases, which was well above the 3% to 4% range that occurred during the post-pandemic era. This resulted in some modest asset quality deterioration across the industry as borrowers struggled with rate resets and modifications along with declining asset valuations. In addition, the continued dynamic of a hybrid work model put added stress on an already challenged office building market in many of our larger cities such as San Francisco, Denver, Seattle, and Dallas. What is most interesting about this list is that vacancy rates in New York and New Jersey commercial real estate sectors remain lower than the above-mentioned markets. The multifamily market in the Tri-State Area was also comparatively less affected, supported by continued demand by consumers for rental units while the South and Midwest portion of the United States have not been as fortunate with issues related to affordability and suboptimal absorption rates continuing to put pressure on vacancy rates. Over the last fiscal year, the Company has also been affected by the interest rate environment noted above, and as a result our net interest margin has declined further, primarily caused by the movement of funds by clients into higher yielding Turning to technology, our innovation team, along with assistance from our retail and lending business lines, focused on several new products and services during fiscal 2024 that should advance our digital transformation process. The first is the conversion to our new mobile banking platform, which allows clients to customize our offerings as well as provide an aggregation tool allowing users to see their complete financial picture each day by simply logging into their PC, tablet, or mobile device. The second product roll out is our new digital account opening platform that makes opening an account with us online as easy as a click of the mouse. I personally evaluated the product, and I am confident that it is comparable to the top platforms that the money center banks utilize in terms of usability and speed. Finally, in a few weeks, we will be launching our new digital Home Equity Loan offering. This digital offering will streamline our Home Equity Loan application, underwriting, approval, and closing process. These are just a few of the areas we have highlighted during fiscal 2024 as we focus on delivering client-centric and digitally-driven tools and solutions to make managing finances even easier. Finally, as we reflect on the past fiscal year, I am incredibly proud of what we have achieved together. Our commitment to innovation, operational excellence, and client satisfaction has positioned us well for the future. We have navigated challenges with resilience and have emerged stronger. Looking ahead, we remain focused on our strategic priorities and are confident in our ability to deliver sustainable growth and value for our shareholders. Thank you for your continued trust and support. certificates of deposit and money market accounts, as well as some of the disintermediation noted above. During fiscal 2024, we continued to monitor the overall environment and took several measures to mitigate some of this pressure. These Craig L. Montanaro steps included an investment portfolio securities repositioning, President & CEO Bank-Owned Life Insurance restructuring, non-performing Kearny Financial Corp. asset note sales, expense management initiatives, and finally, Kearny Bank some additional hedging of the Company s wholesale funding position. These strategic actions focused on supporting our
 • shareholder letter icon 9/6/2024 Letter Continued (Full PDF)
 • stockholder letter icon 9/15/2023 KRNY Stockholder Letter
 • stockholder letter icon 9/10/2025 KRNY Stockholder Letter
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KRNY 9/6/2024 Shareholder/Stockholder Letter Transcript:

Navigating
Today   s
Banking
Challenges
ANNUAL REPORT 2024
Together
ANNUAL REPORT 2024

Letter to Shareholders
Dear Fellow Shareholder,
Fiscal 2024 proved to be one of the most challenging operating
net interest margin and earnings in the near term without
environments for us as well as the rest of the financial services
negatively affecting our long-term earnings trajectory as we
industry. The inverted yield curve brought on by the Federal
anticipate the yield curve beginning to normalize in the near
Reserve   s restrictive monetary policy during the last two years
future. This was reflected in our more recent quarterly results,
continued to pressure margins for most in the financial services
with our net interest margin only contracting modestly from
sector. This was coupled with fierce competition for deposits
our fiscal 2024 third quarter results as the pressure on our net
as consumers and businesses demanded higher yields on their
interest margin stabilizes. Lastly, as you will see in the annual
funds. In some cases, the industry saw disintermediation into
report, our asset quality remains strong despite these pressures
short-term debt instruments issued by the U.S. treasury or even
with nonperforming assets improving from June 30, 2023 levels.
money market funds to capture higher rates in the near term,
as many economists forecasted a    higher for longer    restrictive
monetary policy stance by the Federal Reserve. This restrictive
policy put additional pressure on companies both large and
small, as corporate bankruptcies reached their highest level
since prior to the pandemic. From a profitability perspective,
the increased cost of borrowing made it difficult for most to
absorb, forcing many companies into bankruptcy as the only
alternative to restructuring their debt obligations. Looking to
the commercial real estate sector, many borrowers felt the
pressure with loan yields peaking at over 8% in some cases,
which was well above the 3% to 4% range that occurred during
the post-pandemic era. This resulted in some modest asset
quality deterioration across the industry as borrowers struggled
with rate resets and modifications along with declining asset
valuations. In addition, the continued dynamic of a hybrid
work model put added stress on an already challenged office
building market in many of our larger cities such as San
Francisco, Denver, Seattle, and Dallas. What is most interesting
about this list is that vacancy rates in New York and New
Jersey commercial real estate sectors remain lower than the
above-mentioned markets. The multifamily market in the
Tri-State Area was also comparatively less affected, supported
by continued demand by consumers for rental units while the
South and Midwest portion of the United States have not been
as fortunate with issues related to affordability and suboptimal
absorption rates continuing to put pressure on vacancy rates.
Over the last fiscal year, the Company has also been affected
by the interest rate environment noted above, and as a result
our net interest margin has declined further, primarily caused
by the movement of funds by clients into higher yielding
Turning to technology, our innovation team, along with
assistance from our retail and lending business lines, focused
on several new products and services during fiscal 2024 that
should advance our digital transformation process. The first
is the conversion to our new mobile banking platform, which
allows clients to customize our offerings as well as provide an
aggregation tool allowing users to see their complete financial
picture each day by simply logging into their PC, tablet, or
mobile device. The second product roll out is our new digital
account opening platform that makes opening an account with
us online as easy as a click of the mouse. I personally evaluated
the product, and I am confident that it is comparable to the
top platforms that the money center banks utilize in terms of
usability and speed. Finally, in a few weeks, we will be launching
our new digital Home Equity Loan offering. This digital offering
will streamline our Home Equity Loan application, underwriting,
approval, and closing process. These are just a few of the areas
we have highlighted during fiscal 2024 as we focus on delivering
client-centric and digitally-driven tools and solutions to make
managing finances even easier.
Finally, as we reflect on the past fiscal year, I am incredibly
proud of what we have achieved together. Our commitment
to innovation, operational excellence, and client satisfaction
has positioned us well for the future. We have navigated
challenges with resilience and have emerged stronger. Looking
ahead, we remain focused on our strategic priorities and are
confident in our ability to deliver sustainable growth and value
for our shareholders.
Thank you for your continued trust and support.
certificates of deposit and money market accounts, as well
as some of the disintermediation noted above. During fiscal
2024, we continued to monitor the overall environment and
took several measures to mitigate some of this pressure. These
Craig L. Montanaro
steps included an investment portfolio securities repositioning,
President & CEO
Bank-Owned Life Insurance restructuring, non-performing
Kearny Financial Corp.
asset note sales, expense management initiatives, and finally,
Kearny Bank
some additional hedging of the Company   s wholesale funding
position. These strategic actions focused on supporting our


shareholder letter icon 9/6/2024 Letter Continued (Full PDF)
 

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