AP NEWS

Kearny Financial Corp. Reports Second Quarter 2019 Operating Results

January 30, 2019

FAIRFIELD, N.J., Jan. 30, 2019 (GLOBE NEWSWIRE) -- Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), today reported net income for the quarter ended December 31, 2018 of $10.8 million, or $0.12 per basic and diluted share as compared to net income of $11.1 million, or $0.12 per basic and diluted share, for the quarter ended September 30, 2018.

Craig L. Montanaro, President and Chief Executive Officer, commented, “We are pleased to report this quarter’s results which were highlighted by strong growth in loans and deposits, coupled with the continuation of our outstanding asset quality trends. Recognizing the challenges presented by the flat yield curve and rising funding costs, our strategic focus is on the execution of initiatives designed to grow our core deposit franchise and build long-term shareholder value. These initiatives include the acceleration of our efforts to increase digital channel adoption, the robust analysis of retail branch consolidation opportunities and the selective opening of low-cost, technology-driven retail locations in highly attractive markets. As a complement to these strategies we remain steadfast in our commitment to prudently manage capital as evidenced by the increase of our quarterly cash dividend and the repurchase of 3.8 million shares of common stock during the quarter.”

Balance Sheet Highlights

-- Total loans, excluding loans held for sale and the allowance for loan losses, increased by $92.9 million to $4.75 billion, or 70.9% of total assets, at December 31, 2018 from $4.66 billion, or 70.0% of total assets, at September 30, 2018. Commercial mortgage loans comprised $62.9 million of this increase whose aggregate balances represented 68.9% of total loans at December 31, 2018. -- Total deposits increased by $218.6 million to $4.17 billion at December 31, 2018, from $3.95 billion at September 30, 2018. The net increase in deposits reflected increases of $85.7 million and $132.9 million in retail and wholesale deposits, respectively. -- Total borrowings decreased by $108.9 million to $1.31 billion at December 31, 2018, from $1.42 billion at September 30, 2018. The net decrease in borrowings reflected the maturity of $69.5 million in long-term Federal Home Loan Bank (“FHLB”) advances, a $60.0 million decrease in the balance of overnight borrowings and a $6.9 million decrease in depositor sweep account balances. These decreases were partially offset by the addition of a $27.0 million FHLB Community Investment Program (“CIP”) long-term advance during the period.

Earnings Highlights

-- Interest income totaled $60.0 million for the quarter ended December 31, 2018, an increase of $1.8 million or 3.1% from the quarter ended September 30, 2018. Despite this achievement, interest expense increased by $2.6 million between the same comparative periods resulting in an $831,000 decrease in net interest income to $39.3 million for the quarter ended December 31, 2018, from $40.2 million for the quarter ended September 30, 2018. -- The Company’s net interest margin decreased to 2.56% for the quarter ended December 31, 2018 from 2.68% for the quarter ended September 30, 2018, primarily driven by a 15 basis point increase in the cost of interest-bearing liabilities that was partially offset by a two basis point increase in the yield on earning assets.

The Company’s non-interest income continued to supplement and diversify its sources of revenue.

-- Fees and service charges increased by $85,000 to $1.3 million for the quarter ended December 31, 2018 compared to $1.2 million for the quarter ended September 30, 2018.

-- Aggregate loan sale gains totaled $101,000 for the quarter ended December 31, 2018 compared to $132,000 for the quarter ended September 30, 2018. The modest decrease in gains on sale of loans reflected a seasonal decline in the volume of loans sold between comparative periods.

The Company continued to evaluate and implement tactics and strategies designed to improve operating efficiency, make more effective use of its supporting infrastructure and manage its effective income tax rate.

-- Non-interest expense totaled $27.3 million for the quarter ended December 31, 2018, an increase of $813,000 from the quarter ended September 30, 2018. This increase was largely attributable to $659,000 of non-recurring expenses associated with the October 2018 conversion and integration of Clifton Savings Bank’s core processing system arising from the Company’s prior acquisition of Clifton Bancorp during fiscal 2018 and an increase of $210,000 in advertising and marketing expense. -- The Company’s ratio of non-interest expense to average assets totaled 1.62% for the quarter ended December 31, 2018 compared to 1.61% for the prior quarter ended September 30, 2018. For those same comparative periods, the Company’s efficiency ratios were 63.9% and 61.0%, respectively. -- Income tax expense totaled $3.6 million for the quarter ended December 31, 2018 as compared to $3.7 million for the quarter ended September 30, 2018 resulting in an effective tax rate of 25.3% and 24.7%, respectively.

Collectively, these factors resulted in a modest decrease in net income for the quarter ended December 31, 2018 compared to the prior quarter ended September 30, 2018.

-- The Company’s return on average assets for the quarter ended December 31, 2018 totaled 0.64% compared to 0.68% for the quarter ended September 30, 2018. -- The Company’s return on average equity remained stable, totaling 3.55% for the quarters ended December 31, 2018 and September 30, 2018.

Asset Quality Highlights

-- Asset quality remained strong throughout the quarter ended December 31, 2018. The outstanding balance of nonperforming loans totaled $20.8 million, or 0.44% of total loans, at December 31, 2018 as compared to $20.5 million, or 0.44% of total loans, at September 30, 2018. -- The allowance for loan losses increased to $33.5 million at December 31, 2018 from $32.7 million at September 30, 2018, resulting in a total loan coverage ratio, representing the balance of the allowance for loan losses as a percentage of total loans, excluding loans held for sale, of 0.70% and 0.69%, respectively. The total loan coverage ratio for both periods reflects the impact of purchase accounting which generally precludes acquired loan balances from being considered in the balance of the allowance for loan losses at the time of their acquisition.

-- The Company recognized net charge offs totaling approximately $176,000 for the quarter ended December 31, 2018, reflecting an annualized net charge off rate of 0.01% on the average balance of total loans for the period. By comparison, the Company’s net charge offs totaled approximately $234,000 for the quarter ended September 30, 2018, reflecting an annualized net charge off rate of 0.02%. -- The Company’s provision for loan losses decreased by $1.1 million to $971,000 for the quarter ended December 31, 2018 compared to $2.1 million for the quarter ended September 30, 2018. The decrease in provision expense was largely attributable to the effects of comparatively lower growth during the quarter ended December 31, 2018 in the performing portion of the loan portfolio that is collectively evaluated for impairment.

Capital Highlights

-- The Company increased its regular quarterly cash dividend by $0.01 per share, from $0.04 per share during the quarter ended September 30, 2018, to $0.05 per share during the quarter ended December 31, 2018. In addition to the payment of its regular dividend, the Company paid a special dividend of $0.16 during the quarter ended September 30, 2018. The Company continually evaluates its dividend policies and practices in relation to its overall capital management and shareholder value objectives.

-- During the quarter ended December 31, 2018, the Company repurchased 3,827,925 shares of its common stock at a total cost of $50.2 million and at an average cost of $13.11 per share. Such shares were repurchased in conjunction with the Company’s third share repurchase program announced in April 2018, through which it authorized the repurchase of 10,238,557 shares, or 10% of its outstanding shares of common stock. Through December 31, 2018, the Company has repurchased a total of 8,480,985 shares, or 82.8% of the shares authorized for repurchase under this third program, at a total cost of $115.5 million and at an average cost of $13.62 per share. -- The Company’s and Bank’s regulatory capital ratios at December 31, 2018 were well in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.

The exhibits that follow this narrative begin with the presentation of the Linked-Quarter Comparative Financial Analysis that supports the discussion above by presenting the Company’s financial condition and operating results for the quarter ended December 31, 2018 compared to those for the prior linked-quarter ended September 30, 2018. This analysis is followed by a tabular Five-Quarter Financial Trend Analysis that presents similar financial information, together with other financial highlights and performance metrics, over a consecutive five quarter look-back period that is intended to reflect the Company’s financial performance and strategic achievements over this extended period of time. The exhibits conclude with the presentation of the Reconciliation of GAAP to Non-GAAP financial data included in this news release.

Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

Linked-Quarter Comparative Financial Analysis --------------------------------------------------------------------------------------------- - Summary Balance Sheet At Varianc e ------------------------- - (Dollars and Shares in Thousands, December September Variance or 31, 30, Change Except per Share Data, Unaudited) 2018 2018 or Change Pct. --------------------------------------------- ----------- - ----------- - ---------- - ------ - Assets Cash and cash equivalents $ 51,483 $ 44,486 $ 6,997 15.7 % Securities available for sale 666,602 706,240 (39,638 ) -5.6 % Securities held to maturity 598,318 602,838 (4,520 ) -0.7 % Loans held-for-sale 1,001 1,503 (502 ) -33.4 % Loans receivable, including yield adjustments 4,753,392 4,660,507 92,885 2.0 % Less allowance for loan losses (33,526 ) (32,731 ) (795 ) 2.4 % - --------- - - --------- - - -------- - ----- - Net loans receivable 4,719,866 4,627,776 92,090 2.0 % Premises and equipment 58,414 57,635 779 1.4 % Federal Home Loan Bank stock 64,514 66,428 (1,914 ) -2.9 % Accrued interest receivable 19,435 19,455 (20 ) -0.1 % Goodwill 210,895 210,895 - 0.0 % Core deposit intangible 5,743 6,018 (275 ) -4.6 % Bank owned life insurance 253,009 251,410 1,599 0.6 % Deferred income taxes, net 24,692 22,136 2,556 11.5 % Other real estate owned 508 674 (166 ) -24.6 % Other assets 27,960 38,717 (10,757 ) -27.8 % - --------- - - --------- - - -------- - ----- - Total assets $ 6,702,440 $ 6,656,211 $ 46,229 0.7 % - --------- - - --------- - - -------- - ----- - Liabilities Deposits $ 4,173,434 $ 3,954,821 $ 218,613 5.5 % Borrowings 1,310,547 1,419,424 (108,877 ) -7.7 % Advance payments by borrowers for taxes 17,201 10,687 6,514 61.0 % Other liabilities 17,997 35,198 (17,201 ) -48.9 % - --------- - - --------- - - -------- - ----- - Total liabilities 5,519,179 5,420,130 99,049 1.8 % Stockholders’ Equity Common stock 938 978 (40 ) -4.1 % Paid-in capital 848,145 897,551 (49,406 ) -5.5 % Retained earnings 356,993 350,838 6,155 1.8 % Unearned ESOP shares (31,617 ) (32,104 ) 487 -1.5 % Accumulated other comprehensive income, net 8,802 18,818 (10,016 ) -53.2 % - --------- - - --------- - - -------- - ----- - Total stockholders’ equity 1,183,261 1,236,081 (52,820 ) -4.3 % - --------- - - --------- - - -------- - ----- - Total liabilities and stockholders’ equity $ 6,702,440 $ 6,656,211 $ 46,229 0.7 % - --------- - - --------- - - -------- - ----- - Consolidated capital ratios Equity to assets 17.65 % 18.57 % -0.92 % Tangible equity to tangible assets 14.90 % 15.83 % -0.93 % Share data Outstanding shares 93,772 97,754 (3,982 ) -4.1 % Equity per share $ 12.62 $ 12.64 $ (0.02 ) -0.2 % Tangible equity per share(1) $ 10.31 $ 10.43 $ (0.12 ) -1.2 % (1) Tangible equity equals total stockholders’ equity reduced by goodwill and core deposit intangible assets.

Summary Income Statement For the three Variance months ended ------------------- - (Dollars and Shares in Thousands, December September Variance or 31, 30, Change Except per Share Data, Unaudited) 2018 2018 or Change Pct. --------------------------------------------------- -------- - -------- - --------- - ------- - Interest income Loans $ 49,015 $ 47,437 $ 1,578 3.3 % Taxable investment securities 9,051 8,879 172 1.9 % Tax-exempt investment securities 713 716 (3 ) -0.4 % Other interest-earning assets 1,243 1,174 69 5.9 % - ------ - - ------ - - ------- - ------ - Total Interest Income 60,022 58,206 1,816 3.1 % Interest expense Deposits 12,727 10,539 2,188 20.8 % Borrowings 7,946 7,487 459 6.1 % - ------ - - ------ - - ------- - ------ - Total interest expense 20,673 18,026 2,647 14.7 % - ------ - - ------ - - ------- - ------ - Net interest income 39,349 40,180 (831 ) -2.1 % Provision for loan losses 971 2,100 (1,129 ) -53.8 % - ------ - - ------ - - ------- - ------ - Net interest income after provision forloan losses 38,378 38,080 298 0.8 % - ------ - - ------ - - ------- - ------ - Non-interest income Fees and service charges 1,258 1,173 85 7.2 % Gain on sale of loans 101 132 (31 ) -23.5 % Gain (loss) on sale of other real estate owned 36 (50 ) 86 -172.0 % Income from bank owned life insurance 1,599 1,594 5 0.3 % Electronic banking fees and charges 277 250 27 10.8 % Miscellaneous 38 83 (45 ) -54.2 % - ------ - - ------ - - ------- - ------ - Total non-interest income 3,309 3,182 127 4.0 % Non-interest expense Salaries and employee benefits 15,699 15,642 57 0.4 % Net occupancy expense of premises 2,761 2,736 25 0.9 % Equipment and systems 3,377 2,926 451 15.4 % Advertising and marketing 787 577 210 36.4 % Federal deposit insurance premium 421 465 (44 ) -9.5 % Directors’ compensation 746 758 (12 ) -1.6 % Miscellaneous 3,479 3,353 126 3.8 % - ------ - - ------ - - ------- - ------ - Total non-interest expense 27,270 26,457 813 3.1 % - ------ - - ------ - - ------- - ------ - Income before income taxes 14,417 14,805 (388 ) -2.6 % Income taxes 3,649 3,659 (10 ) -0.3 % - ------ - - ------ - - ------- - ------ - Net income $ 10,768 $ 11,146 $ (378 ) -3.4 % - ------ - - ------ - - ------- - ------ - Net income per common share (EPS) Basic $ 0.12 $ 0.12 $ - Diluted $ 0.12 $ 0.12 $ - Dividends declared (1) Cash dividends declared per common share $ 0.05 $ 0.20 $ (0.15 ) Cash dividends declared $ 4,082 $ 19,404 $ (15,322 ) Dividend payout ratio 37.9 % 174.1 % -136.2 % Weighted average number of commonshares outstanding Basic 92,434 95,127 (2,693 ) Diluted 92,480 95,181 (2,701 ) (1) Dividends declared during the quarter ended September 30, 2018 include a $0.16 special dividend representing a supplemental distribution of net income to stockholders from the fiscal year ended June 30, 2018.

For the three months Varianc ended e ------------------------- - Average Balance Sheet Data December September Variance or 31, 30, Change (Dollars in Thousands, Unaudited) 2018 2018 or Change Pct. ----------------------------------------------------------- ----------- - ----------- - --------- - ------ - Assets Interest-earning assets: Loans receivable, including loans held for sale $ 4,758,587 $ 4,562,375 $ 196,212 4.3 % Taxable investment securities 1,158,720 1,180,655 (21,935 ) -1.9 % Tax-exempt investment securities 135,453 136,056 (603 ) -0.4 % Other interest-earning assets 87,916 112,629 (24,713 ) -21.9 % - --------- - - --------- - - ------- - ----- - Total interest-earning assets 6,140,676 5,991,715 148,961 2.5 % Non-interest-earning assets 587,921 596,006 (8,085 ) -1.4 % - --------- - - --------- - - ------- - ----- - Total assets $ 6,728,597 $ 6,587,721 $ 140,876 2.1 % - --------- - - --------- - - ------- - ----- - Liabilities and Stockholders’ Equity Interest-bearing liabilities: Deposits: Interest-bearing demand $ 792,989 $ 788,148 $ 4,841 0.6 % Savings and club 743,676 747,743 (4,067 ) -0.5 % Certificates of deposit 2,214,932 2,046,997 167,935 8.2 % - --------- - - --------- - - ------- - ----- - Total interest-bearing deposits 3,751,597 3,582,888 168,709 4.7 % Borrowings: Federal Home Loan Bank advances 1,293,470 1,350,113 (56,643 ) -4.2 % Other borrowings 119,281 40,981 78,300 191.1 % - --------- - - --------- - - ------- - ----- - Total borrowings 1,412,751 1,391,094 21,657 1.6 % - --------- - - --------- - - ------- - ----- - Total interest-bearing liabilities 5,164,348 4,973,982 190,366 3.8 % Non-interest-bearing liabilities: Non-interest-bearing deposits 315,165 314,114 1,051 0.3 % Other non-interest-bearing liabilities 37,374 43,533 (6,159 ) -14.1 % - --------- - - --------- - - ------- - ----- - Total non-interest-bearing liabilities 352,539 357,647 (5,108 ) -1.4 % - --------- - - --------- - - ------- - ----- - Total liabilities 5,516,887 5,331,629 185,258 3.5 % Stockholders’ equity 1,211,710 1,256,092 (44,382 ) -3.5 % - --------- - - --------- - - ------- - ----- - Total liabilities and stockholders’ equity $ 6,728,597 $ 6,587,721 $ 140,876 2.1 % - --------- - - --------- - - ------- - ----- - Average interest-earning assets to average interest-bearing 118.91 % 120.46 % -1.56 % -1.3 % liabilities

For the three months ended --------------- - Performance Ratio Highlights Decembe Septemb Varianc r 31, er 30, e 2018 2018 or Change ----------------------------------------------- ------ - ------ - ------ - Average yield on interest-earning assets: Loans receivable, including loans held for sale 4.12 % 4.16 % -0.04 % Taxable investment securities 3.12 % 3.01 % 0.11 % Tax-exempt investment securities (1) 2.11 % 2.10 % 0.01 % Other interest-earning assets 5.66 % 4.17 % 1.49 % ----- - ----- - ----- - Total interest-earning assets 3.91 % 3.89 % 0.02 % Average cost of interest-bearing liabilities: Deposits: Interest-bearing demand 0.97 % 0.86 % 0.11 % Savings and club 0.49 % 0.41 % 0.08 % Certificates of deposit 1.79 % 1.58 % 0.21 % ----- - ----- - ----- - Total interest-bearing deposits 1.36 % 1.18 % 0.18 % Borrowings: Federal Home Loan Bank advances 2.27 % 2.19 % 0.08 % Other borrowings 1.99 % 0.94 % 1.05 % ----- - ----- - ----- - Total borrowings 2.25 % 2.15 % 0.10 % ----- - ----- - ----- - Total interest-bearing liabilities 1.60 % 1.45 % 0.15 % Interest rate spread(2) 2.31 % 2.44 % -0.13 % Net interest margin(3) 2.56 % 2.68 % -0.12 % Non-interest income to average assets 0.20 % 0.19 % 0.01 % (annualized) Non-interest expense to average assets 1.62 % 1.61 % 0.01 % (annualized) Efficiency ratio(4) 63.93 % 61.01 % 2.92 % Return on average assets (annualized) 0.64 % 0.68 % -0.04 % Return on average equity (annualized) 3.55 % 3.55 % 0.00 % (1) The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. (2) Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. (3) Net interest income divided by average interest-earning assets. (4) Non-interest expense divided by the sum of net interest income and non-interest income.

Five-Quarter Financial Trend Analysis ----------------------------------------------------------------------------------------------------------- - Summary Balance Sheet At ------------------------------------------------------------------- - (Dollars and Shares in Thousands, December September June 30, March 31, December 31, 30, 31, Except Per Share Data, Unaudited) 2018 2018 2018 2018 2017 --------------------------------------- ----------- - ----------- - ----------- - ----------- - ----------- - Assets Cash and cash equivalents $ 51,483 $ 44,486 $ 128,864 $ 38,283 $ 50,685 Securities available for sale 666,602 706,240 725,085 684,771 637,671 Securities held to maturity 598,318 602,838 589,730 459,380 471,452 Loans held-for-sale 1,001 1,503 863 2,377 3,490 Loans receivable, including yield 4,753,392 4,660,507 4,501,348 3,351,369 3,291,516 adjustments Less allowance for loan losses (33,526 ) (32,731 ) (30,865 ) (30,248 ) (30,066 ) - --------- - - --------- - - --------- - - --------- - - --------- - Net loans receivable 4,719,866 4,627,776 4,470,483 3,321,121 3,261,450 Premises and equipment 58,414 57,635 56,240 42,856 41,829 Federal Home Loan Bank stock 64,514 66,428 59,004 39,112 39,113 Accrued interest receivable 19,435 19,455 18,510 13,926 13,524 Goodwill 210,895 210,895 210,895 108,591 108,591 Core deposit intangible 5,743 6,018 6,295 206 233 Bank owned life insurance 253,009 251,410 249,816 184,981 183,754 Deferred income taxes, net 24,692 22,136 23,754 3,898 6,941 Other real estate owned 508 674 725 1,094 1,693 Other assets 27,960 38,717 39,610 33,104 23,421 - --------- - - --------- - - --------- - - --------- - - --------- - Total assets $ 6,702,440 $ 6,656,211 $ 6,579,874 $ 4,933,700 $ 4,843,847 - --------- - - --------- - - --------- - - --------- - - --------- - Liabilities Deposits 4,173,434 $ 3,954,821 $ 4,073,604 $ 3,067,102 $ 3,033,231 Borrowings 1,310,547 1,419,424 1,198,646 852,009 798,864 Advance payments by borrowers for taxes 17,201 10,687 18,088 8,969 8,511 Other liabilities 17,997 35,198 20,788 14,419 13,968 - --------- - - --------- - - --------- - - --------- - - --------- - Total liabilities 5,519,179 5,420,130 5,311,126 3,942,499 3,854,574 Stockholders’ Equity Common stock 938 978 996 788 795 Paid-in capital 848,145 897,551 922,711 653,045 662,093 Retained earnings 356,993 350,838 359,096 355,270 353,536 Unearned ESOP shares (31,617 ) (32,104 ) (32,590 ) (33,076 ) (33,563 ) Accumulated other comprehensive income, 8,802 18,818 18,535 15,174 6,412 net - --------- - - --------- - - --------- - - --------- - - --------- - Total stockholders’ equity 1,183,261 1,236,081 1,268,748 991,201 989,273 - --------- - - --------- - - --------- - - --------- - - --------- - Total liabilities and stockholders’ $ 6,702,440 $ 6,656,211 $ 6,579,874 $ 4,933,700 $ 4,843,847 equity - --------- - - --------- - - --------- - - --------- - - --------- - Consolidated capital ratios Equity to assets 17.65 % 18.57 % 19.28 % 20.09 % 20.42 % Tangible equity to tangible assets 14.90 % 15.83 % 16.53 % 18.29 % 18.59 % Share data Outstanding shares 93,772 97,754 99,626 78,765 79,527 Equity per share $ 12.62 $ 12.64 $ 12.74 $ 12.58 $ 12.44 Tangible equity per share(1) $ 10.31 $ 10.43 $ 10.56 $ 11.20 $ 11.07 (1) Tangible equity equals total stockholders’ equity reduced by goodwill and core deposit intangible assets.

At --------------------------------------------------------------- Supplemental Balance Sheet Highlights December September June 30, March 31, December 31, 30, 31, (Dollars in Thousands, Unaudited) 2018 2018 2018 2018 2017 ----------------------------------------- ----------- ----------- ----------- ----------- ----------- Cash and cash equivalents Cash and due from depository institutions $ 24,361 $ 21,973 $ 26,199 $ 18,229 $ 17,899 Interest-bearing deposits in other banks 27,122 22,513 102,665 20,054 32,786 - --------- - --------- - --------- - --------- - --------- Total cash and cash equivalents $ 51,483 $ 44,486 $ 128,864 $ 38,283 $ 50,685 - --------- - --------- - --------- - --------- - --------- Securities available for sale Debt securities: U.S. agency securities $ 3,942 $ 4,070 $ 4,411 $ 4,667 $ 4,810 Municipal and state obligations 26,205 25,907 26,088 26,733 27,428 Asset-backed securities 180,828 182,390 182,620 182,066 169,484 Collateralized loan obligations 184,439 215,569 226,066 178,342 133,341 Corporate bonds 144,692 147,811 147,594 142,202 142,397 Trust preferred securities 3,726 3,794 3,783 8,485 8,494 - --------- - --------- - --------- - --------- - --------- Debt securities available for sale 543,832 579,541 590,562 542,495 485,954 Mortgage-backed securities: Collateralized mortgage obligations 23,019 23,097 24,292 25,601 27,187 Residential pass-through securities 91,918 95,795 102,359 108,736 116,496 Commercial pass-through securities 7,833 7,807 7,872 7,939 8,034 - --------- - --------- - --------- - --------- - --------- Mortgage-backed securities 122,770 126,699 134,523 142,276 151,717 - --------- - --------- - --------- - --------- - --------- Total securities available for sale $ 666,602 $ 706,240 $ 725,085 $ 684,771 $ 637,671 Securities held to maturity Debt securities: Municipal and state obligations $ 107,826 $ 109,061 $ 109,483 $ 98,011 $ 100,671 Subordinated debt 56,255 46,275 46,294 30,000 25,000 - --------- - --------- - --------- - --------- - --------- Debt securities held to maturity 164,081 155,336 155,777 128,011 125,671 Mortgage-backed securities: Collateralized mortgage obligations 51,540 54,130 56,886 34,309 35,861 Residential pass-through securities 182,335 190,812 200,622 151,605 160,487 Commercial pass-through securities 200,362 202,560 176,445 145,455 149,433 - --------- - --------- - --------- - --------- - --------- Mortgage-backed securities 434,237 447,502 433,953 331,369 345,781 - --------- - --------- - --------- - --------- - --------- Total securities held to maturity $ 598,318 $ 602,838 $ 589,730 $ 459,380 $ 471,452 - --------- - --------- - --------- - --------- - --------- Total securities $ 1,264,920 $ 1,309,078 $ 1,314,815 $ 1,144,151 $ 1,109,123 - --------- - --------- - --------- - --------- - ---------

At ------------------------------------------------------------------- - Supplemental Balance Sheet Highlights December September June 30, March 31, December 31, 30, 31, (Dollars in Thousands, Unaudited) 2018 2018 2018 2018 2017 ---------------------------------------- ----------- - ----------- - ----------- - ----------- - ----------- - Loan portfolio composition: Residential first mortgage loans $ 1,334,284 $ 1,303,249 $ 1,297,453 $ 563,807 $ 574,322 Home equity loans and lines of credit 96,001 93,473 90,761 79,522 80,961 - --------- - - --------- - - --------- - - --------- - - --------- - Residential mortgage loans 1,430,285 1,396,722 1,388,214 643,329 655,283 Multifamily mortgage loans 1,974,409 1,898,831 1,758,584 1,471,573 1,438,386 Nonresidential and mixed use mortgage 1,302,583 1,315,279 1,302,961 1,113,385 1,069,254 loans - --------- - - --------- - - --------- - - --------- - - --------- - Commercial mortgage loans 3,276,992 3,214,110 3,061,545 2,584,958 2,507,640 Commercial business loans 70,059 78,317 85,825 88,216 92,442 Construction loans 28,405 26,581 23,271 22,963 22,205 Account loans 3,310 3,133 3,283 3,038 2,996 Other consumer loans 3,524 4,427 5,777 7,186 8,951 - --------- - - --------- - - --------- - - --------- - - --------- - Consumer loans 6,834 7,560 9,060 10,224 11,947 - --------- - - --------- - - --------- - - --------- - - --------- - Total loans, excluding yield adjustments 4,812,575 4,723,290 4,567,915 3,349,690 3,289,517 Unamortized yield adjustments (59,183 ) (62,783 ) (66,567 ) 1,679 1,999 - --------- - - --------- - - --------- - - --------- - - --------- - Loans receivable, including yield 4,753,392 4,660,507 4,501,348 3,351,369 3,291,516 adjustments Less allowance for loan losses (33,526 ) (32,731 ) (30,865 ) (30,248 ) (30,066 ) - --------- - - --------- - - --------- - - --------- - - --------- - Net loans receivable $ 4,719,866 $ 4,627,776 $ 4,470,483 $ 3,321,121 $ 3,261,450 - --------- - - --------- - - --------- - - --------- - - --------- - Loan portfolio allocation: Residential first mortgage loans 27.7 % 27.6 % 28.4 % 16.8 % 17.5 % Home equity loans and lines of credit 2.0 % 2.0 % 2.0 % 2.4 % 2.5 % - --------- - - --------- - - --------- - - --------- - - --------- - Residential mortgage loans 29.7 % 29.6 % 30.4 % 19.2 % 20.0 % Multifamily mortgage loans 41.0 % 40.2 % 38.5 % 43.9 % 43.7 % Nonresidential and mixed use mortgage 27.1 % 27.8 % 28.5 % 33.2 % 32.5 % loans - --------- - - --------- - - --------- - - --------- - - --------- - Commercial mortgage loans 68.1 % 68.0 % 67.0 % 77.1 % 76.2 % Commercial business loans 1.4 % 1.6 % 1.9 % 2.6 % 2.8 % Construction loans 0.6 % 0.6 % 0.5 % 0.7 % 0.7 % Account loans 0.1 % 0.1 % 0.1 % 0.1 % 0.1 % Other consumer loans 0.1 % 0.1 % 0.1 % 0.3 % 0.2 % - --------- - - --------- - - --------- - - --------- - - --------- - Consumer loans 0.2 % 0.2 % 0.2 % 0.4 % 0.3 % - --------- - - --------- - - --------- - - --------- - - --------- - Total loans, excluding yield adjustments 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % - --------- - - --------- - - --------- - - --------- - - --------- - Asset quality: Nonperforming assets: Accruing loans > 90 days past due $ 32 $ 19 $ 60 $ 45 $ 31 Nonaccrual loans 20,743 20,473 16,799 14,190 16,315 - --------- - - --------- - - --------- - - --------- - - --------- - Total nonperforming loans 20,775 20,492 16,859 14,235 16,346 Other real estate owned 508 674 725 1,094 1,693 - --------- - - --------- - - --------- - - --------- - - --------- - Total nonperforming assets $ 21,283 $ 21,166 $ 17,584 $ 15,329 $ 18,039 - --------- - - --------- - - --------- - - --------- - - --------- - Nonperforming loans (% total loans) 0.44 % 0.44 % 0.37 % 0.42 % 0.50 % Nonperforming assets (% total assets) 0.32 % 0.32 % 0.27 % 0.31 % 0.37 % Allowance for loan losses (ALLL): ALLL to total loans 0.70 % 0.69 % 0.68 % 0.90 % 0.91 % ALLL to nonperforming loans 161.38 % 159.73 % 183.08 % 212.49 % 183.93 % Net charge offs $ 176 $ 234 $ 101 $ 241 $ 315 Average net charge off rate (annualized) 0.01 % 0.02 % 0.01 % 0.03 % 0.04 %

At ------------------------------------------------------------------- - Supplemental Balance Sheet Highlights December September June 30, March 31, December 31, 30, 31, (Dollars in Thousands, Unaudited) 2018 2018 2018 2018 2017 -------------------------------------- ----------- - ----------- - ----------- - ----------- - ----------- - Funding by type: Deposits Non-interest-bearing deposits $ 305,392 $ 308,631 $ 311,938 $ 270,217 $ 275,065 Interest-bearing demand 807,389 786,069 1,000,989 871,425 879,385 Savings and club 760,499 743,289 744,039 515,805 517,400 Certificates of deposit 2,300,154 2,116,832 2,016,638 1,409,655 1,361,381 - --------- - - --------- - - --------- - - --------- - - --------- - Interest-bearing deposits 3,868,042 3,646,190 3,761,666 2,796,885 2,758,166 - --------- - - --------- - - --------- - - --------- - - --------- - Total deposits 4,173,434 3,954,821 4,073,604 3,067,102 3,033,231 Borrowings: Federal Home Loan Bank advances 1,293,845 1,335,844 1,170,144 775,625 775,649 Overnight borrowings - 60,000 - 42,000 - Depositor sweep accounts 16,702 23,580 28,502 34,384 23,215 - --------- - - --------- - - --------- - - --------- - - --------- - Total borrowings 1,310,547 1,419,424 1,198,646 852,009 798,864 - --------- - - --------- - - --------- - - --------- - - --------- - Total funding $ 5,483,981 $ 5,374,245 $ 5,272,250 $ 3,919,111 $ 3,832,095 - --------- - - --------- - - --------- - - --------- - - --------- - Loans as a % of deposits 113.1 % 117.1 % 109.8 % 108.4 % 107.6 % Deposits as a % of total funding 76.1 % 73.6 % 77.3 % 78.3 % 79.2 % Borrowings as a % of total funding 23.9 % 26.4 % 22.7 % 21.7 % 20.8 % Funding by source: Retail funding Non-interest-bearing deposits $ 305,392 $ 308,631 $ 311,938 $ 270,217 $ 275,065 Interest-bearing demand 807,389 786,069 790,164 656,114 657,349 Savings and club 760,499 743,289 744,039 515,805 517,400 Certificates of deposit 1,922,287 1,871,903 1,828,039 1,247,900 1,210,428 - --------- - - --------- - - --------- - - --------- - - --------- - Total retail deposits 3,795,567 3,709,892 3,674,180 2,690,036 2,660,242 Depositor sweep accounts 16,702 23,580 28,502 34,384 23,215 - --------- - - --------- - - --------- - - --------- - - --------- - Total retail funding 3,812,269 3,733,472 3,702,682 2,724,420 2,683,457 Wholesale funding: Interest-bearing demand $ - $ - $ 210,825 $ 215,311 $ 222,036 Certificates of deposit (listing 108,067 104,990 104,256 104,934 93,853 service) Certificates of deposit (brokered) 269,800 139,939 84,343 56,821 57,100 - --------- - - --------- - - --------- - - --------- - - --------- - Total wholesale deposits 377,867 244,929 399,424 377,066 372,989 FHLB advances 1,293,845 1,335,844 1,170,144 775,625 775,649 Overnight borrowings - 60,000 - 42,000 - - --------- - - --------- - - --------- - - --------- - - --------- - Total wholesale funding 1,671,712 1,640,773 1,569,568 1,194,691 1,148,638 - --------- - - --------- - - --------- - - --------- - - --------- - Total funding $ 5,483,981 $ 5,374,245 $ 5,272,250 $ 3,919,111 $ 3,832,095 - --------- - - --------- - - --------- - - --------- - - --------- - Retail funding as a % of total funding 69.5 % 69.5 % 70.2 % 69.5 % 70.0 % Wholesale funding as a % of total 30.5 % 30.5 % 29.8 % 30.5 % 30.0 % funding

Summary Income Statement For the three months ended ---------------------------------------------------- - (Dollars and Shares in Thousands, December September June 30, March December 31, 30, 31, 31, Except Per Share Data, Unaudited) 2018 2018 2018 2018 2017 --------------------------------------------------- -------- - -------- - -------- - -------- - -------- - Interest income Loans $ 49,015 $ 47,437 $ 46,615 $ 30,728 $ 30,610 Taxable investment securities 9,051 8,879 8,670 6,450 6,077 Tax-exempt investment securities 713 716 702 652 641 Other interest-earning assets 1,243 1,174 1,275 715 704 - ------ - - ------ - - ------ - - ------ - - ------ - Total interest income 60,022 58,206 57,262 38,545 38,032 Interest expense Deposits 12,727 10,539 9,755 7,026 6,649 Borrowings 7,946 7,487 6,916 4,462 4,548 - ------ - - ------ - - ------ - - ------ - - ------ - Total interest expense 20,673 18,026 16,671 11,488 11,197 - ------ - - ------ - - ------ - - ------ - - ------ - Net interest income 39,349 40,180 40,591 27,057 26,835 Provision for loan losses 971 2,100 717 423 936 - ------ - - ------ - - ------ - - ------ - - ------ - Net interest income after provision forloan losses 38,378 38,080 39,874 26,634 25,899 - ------ - - ------ - - ------ - - ------ - - ------ - Non-interest income Fees and service charges 1,258 1,173 1,205 1,537 1,409 Gain (loss) on sale and call of securities - - 9 (1 ) - Gain on sale of loans 101 132 127 346 200 Gain (loss) on sale of other real estate owned 36 (50 ) 60 7 23 Income from bank owned life insurance 1,599 1,594 1,604 1,227 1,264 Electronic banking fees and charges 277 250 278 243 302 Miscellaneous 38 83 75 189 65 - ------ - - ------ - - ------ - - ------ - - ------ - Total non-interest income 3,309 3,182 3,358 3,548 3,263 Non-interest expense Salaries and employee benefits 15,699 15,642 15,353 12,888 12,926 Net occupancy expense of premises 2,761 2,736 2,716 2,359 2,122 Equipment and systems 3,377 2,926 2,776 2,323 2,193 Advertising and marketing 787 577 757 745 748 Federal deposit insurance premium 421 465 463 350 343 Directors’ compensation 746 758 754 689 688 Merger-related expenses - - 5,149 401 1,193 Miscellaneous 3,479 3,353 3,289 2,788 2,551 - ------ - - ------ - - ------ - - ------ - - ------ - Total non-interest expense 27,270 26,457 31,257 22,543 22,764 - ------ - - ------ - - ------ - - ------ - - ------ - Income before income taxes 14,417 14,805 11,975 7,639 6,398 Income taxes 3,649 3,659 4,257 2,262 5,129 - ------ - - ------ - - ------ - - ------ - - ------ - Net income $ 10,768 $ 11,146 $ 7,718 $ 5,377 $ 1,269 - ------ - - ------ - - ------ - - ------ - - ------ - Net income per common share (EPS) Basic $ 0.12 $ 0.12 $ 0.08 $ 0.07 $ 0.02 Diluted $ 0.12 $ 0.12 $ 0.08 $ 0.07 $ 0.02 Dividends declared(1) Cash dividends declared per common share $ 0.05 $ 0.20 $ 0.04 $ 0.03 $ 0.03 Cash dividends declared $ 4,082 $ 19,404 $ 3,892 $ 2,262 $ 1,856 Dividend payout ratio 37.9 % 174.1 % 50.4 % 42.1 % 146.3 % Weighted average number of commonshares outstanding Basic 92,434 95,127 98,046 75,492 77,174 Diluted 92,480 95,181 98,100 75,539 77,239 (1) Dividends declared during the quarter ended September 30, 2018 include a $0.16 special dividend representing a supplemental distribution of net income to stockholders from the fiscal year ended June 30, 2018.

For the three months ended ------------------------------------------------------------------- - Average Balance Sheet Data December September June 30, March 31, December 31, 30, 31, (Dollars in Thousands, Unaudited) 2018 2018 2018 2018 2017 -------------------------------------- ----------- - ----------- - ----------- - ----------- - ----------- - Assets Interest-earning assets: Loans receivable, including loans held $ 4,758,587 $ 4,562,375 $ 4,507,336 $ 3,293,664 $ 3,255,862 for sale Taxable investment securities 1,158,720 1,180,655 1,192,066 1,003,600 996,397 Tax-exempt investment securities 135,453 136,056 134,683 127,605 126,214 Other interest-earning assets 87,916 112,629 142,591 67,770 82,539 - --------- - - --------- - - --------- - - --------- - - --------- - Total interest-earning assets 6,140,676 5,991,715 5,976,676 4,492,639 4,461,012 Non-interest-earning assets 587,921 596,006 586,976 369,299 364,015 - --------- - - --------- - - --------- - - --------- - - --------- - Total assets $ 6,728,597 $ 6,587,721 $ 6,563,652 $ 4,861,938 $ 4,825,027 - --------- - - --------- - - --------- - - --------- - - --------- - Liabilities and Stockholders’ Equity Interest-bearing liabilities: Deposits: Interest-bearing demand $ 792,989 $ 788,148 $ 1,004,445 $ 870,762 $ 854,142 Savings and club 743,676 747,743 724,430 513,948 518,513 Certificates of deposit 2,214,932 2,046,997 1,983,372 1,385,151 1,336,466 - --------- - - --------- - - --------- - - --------- - - --------- - Total interest-bearing deposits 3,751,597 3,582,888 3,712,247 2,769,861 2,709,121 Borrowings: Federal Home Loan Bank advances 1,293,470 1,350,113 1,179,147 777,721 777,460 Other borrowings 119,281 40,981 34,636 33,529 30,606 - --------- - - --------- - - --------- - - --------- - - --------- - Total borrowings 1,412,751 1,391,094 1,213,783 811,250 808,066 - --------- - - --------- - - --------- - - --------- - - --------- - Total interest-bearing liabilities 5,164,348 4,973,982 4,926,030 3,581,111 3,517,187 Non-interest-bearing liabilities: Non-interest-bearing deposits 315,165 314,114 305,763 267,152 277,236 Other non-interest-bearing liabilities 37,374 43,533 39,340 24,953 25,777 - --------- - - --------- - - --------- - - --------- - - --------- - Total non-interest-bearing liabilities 352,539 357,647 345,103 292,105 303,013 - --------- - - --------- - - --------- - - --------- - - --------- - Total liabilities 5,516,887 5,331,629 5,271,133 3,873,216 3,820,200 Stockholders’ equity 1,211,710 1,256,092 1,292,519 988,722 1,004,827 - --------- - - --------- - - --------- - - --------- - - --------- - Total liabilities and stockholders’ $ 6,728,597 $ 6,587,721 $ 6,563,652 $ 4,861,938 $ 4,825,027 equity - --------- - - --------- - - --------- - - --------- - - --------- - Average interest-earning assets to 118.91 % 120.46 % 121.33 % 125.45 % 126.83 % average interest-bearing liabilities

For the three months ended ------------------------------------------ - Performance Ratio Highlights Decembe Septemb June March Decembe r 31, er 30, 30, 31, r 31, 2018 2018 2018 2018 2017 --------------------------------------------------- ------ - ------ - ------ - ------ - ------ - Average yield on interest-earning assets: Loans receivable, including loans held for sale 4.12 % 4.16 % 4.14 % 3.73 % 3.76 % Taxable investment securities 3.12 % 3.01 % 2.91 % 2.57 % 2.44 % Tax-exempt investment securities (1) 2.11 % 2.10 % 2.09 % 2.04 % 2.03 % Other interest-earning assets 5.66 % 4.17 % 3.58 % 4.22 % 3.41 % ----- - ----- - ----- - ----- - ----- - Total interest-earning assets 3.91 % 3.89 % 3.83 % 3.43 % 3.41 % Average cost of interest-bearing liabilities: Deposits: Interest-bearing demand 0.97 % 0.86 % 0.89 % 0.84 % 0.80 % Savings and club 0.49 % 0.41 % 0.29 % 0.12 % 0.12 % Certificates of deposit 1.79 % 1.58 % 1.41 % 1.46 % 1.43 % ----- - ----- - ----- - ----- - ----- - Total interest-bearing deposits 1.36 % 1.18 % 1.05 % 1.01 % 0.98 % Borrowings: Federal Home Loan Bank advances 2.27 % 2.19 % 2.34 % 2.27 % 2.33 % Other borrowings 1.99 % 0.94 % 0.34 % 0.56 % 0.27 % ----- - ----- - ----- - ----- - ----- - Total borrowings 2.25 % 2.15 % 2.28 % 2.20 % 2.25 % ----- - ----- - ----- - ----- - ----- - Total interest-bearing liabilities 1.60 % 1.45 % 1.35 % 1.28 % 1.27 % Interest rate spread(2) 2.31 % 2.44 % 2.48 % 2.15 % 2.14 % Net interest margin(3) 2.56 % 2.68 % 2.72 % 2.41 % 2.41 % Non-interest income to average assets (annualized) 0.20 % 0.19 % 0.20 % 0.29 % 0.27 % Non-interest expense to average assets (annualized) 1.62 % 1.61 % 1.90 % 1.85 % 1.89 % Efficiency ratio(4) 63.93 % 61.01 % 71.12 % 73.66 % 75.63 % Return on average assets (annualized) 0.64 % 0.68 % 0.47 % 0.44 % 0.11 % Return on average equity (annualized) 3.55 % 3.55 % 2.39 % 2.18 % 0.51 % (1) The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield. (2) Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities. (3) Net interest income divided by average interest-earning assets. (4) Non-interest expense divided by the sum of net interest income and non-interest income.

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures provide additional information which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is included below. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.

Reconciliation of GAAP to Non-GAAP For the three months ended ------------------------------------------------- - (Dollars in Thousands, December September June 30, March December 31, 30, 31, 31, Except Per Share Data, Unaudited) 2018 2018 2018 2018 2017 ---------------------------------------------------------- -------- -------- -------- - ------- - -------- - Adjusted Net Income Net income (GAAP) $ 10,768 $ 11,146 $ 7,718 $ 5,377 $ 1,269 Effect to adjust for: Merger-related expenses - - 5,149 401 1,193 Income tax benefit from merger-related expenses - - (1,451 ) (22 ) (165 ) Income tax expense for write-down of net deferred tax - - - - 4,867 asset Income tax benefit for write-down of net deferred tax - - - - (1,381 ) liability Income tax benefit for reduction in the federal income tax - - - - (769 ) rate (from 35% to 28%) - ------ - ------ - ------ - - ----- - - ------ - Adjusted net income(non-GAAP) $ 10,768 $ 11,146 $ 11,416 $ 5,756 $ 5,014 - ------ - ------ - ------ - - ----- - - ------ - Adjusted Net Income per Common Share (EPS) Net income per common share Basic (GAAP) $ 0.12 $ 0.12 $ 0.08 $ 0.07 $ 0.02 Effect to adjust for: Merger-related expenses - - 0.05 0.01 0.02 Income tax benefit from merger-related expenses - - (0.01 ) - (0.01 ) Income tax expense for write-down of net deferred tax - - - - 0.06 asset Income tax benefit for write-down of net deferred tax - - - - (0.02 ) liability Income tax benefit for reduction in the federal income tax - - - - (0.01 ) rate (from 35% to 28%) - ------ - ------ - ------ - - ----- - - ------ - Adjusted net income per common shareBasic (non-GAAP) $ 0.12 $ 0.12 $ 0.12 $ 0.08 $ 0.06 - ------ - ------ - ------ - - ----- - - ------ - Adjusted Net Income per Common Share (EPS) Net income per common share Diluted (GAAP) $ 0.12 $ 0.12 $ 0.08 $ 0.07 $ 0.02 Effect to adjust for: Merger-related expenses - - 0.05 0.01 0.02 Income tax benefit from merger-related expenses - - (0.01 ) - (0.01 ) Income tax expense for write-down of net deferred tax - - - - 0.06 asset Income tax benefit for write-down of net deferred tax - - - - (0.02 ) liability Income tax benefit for reduction in the federal income tax - - - - (0.01 ) rate (from 35% to 28%) - ------ - ------ - ------ - - ----- - - ------ - Adjusted net income per common shareDiluted (non-GAAP) $ 0.12 $ 0.12 $ 0.12 $ 0.08 $ 0.06 - ------ - ------ - ------ - - ----- - - ------ -

For the three months ended ---------------------------------------------------- - Reconciliation of GAAP to Non-GAAP December September June 30, March December 31, 30, 31, 31, (Unaudited) 2018 2018 2018 2018 2017 ------------------------------------------------------ -------- - -------- - -------- - -------- - -------- - Adjusted Non-Interest Expense Non-interest expense (GAAP) $ 27,270 $ 26,457 $ 31,257 $ 22,543 $ 22,764 Effect to adjust for: Merger-related expenses - - (5,149 ) (401 ) (1,193 ) - ------ - - ------ - - ------ - - ------ - - ------ - Adjusted non-interest expense(non-GAAP) $ 27,270 $ 26,457 $ 26,108 $ 22,142 $ 21,571 - ------ - - ------ - - ------ - - ------ - - ------ - Adjusted Non-Interest Expense Ratio Non-interest expense to average assets (GAAP) 1.62 % 1.61 % 1.90 % 1.85 % 1.89 % Effect to adjust for: Merger-related expenses 0.00 % 0.00 % -0.31 % -0.03 % -0.10 % - ------ - - ------ - - ------ - - ------ - - ------ - Adjusted non-interest expense ratio(non-GAAP) 1.62 % 1.61 % 1.59 % 1.82 % 1.79 % - ------ - - ------ - - ------ - - ------ - - ------ - Adjusted Efficiency Ratio Non-interest expense / (Net interest income + 63.9 % 61.0 % 71.1 % 73.7 % 75.6 % non-interest income) (GAAP) Effect to adjust for: Merger-related expenses 0.0 % 0.0 % -11.7 % -1.3 % -3.9 % - ------ - - ------ - - ------ - - ------ - - ------ - Adjusted efficiency ratio(non-GAAP) 63.9 % 61.0 % 59.4 % 72.4 % 71.7 % - ------ - - ------ - - ------ - - ------ - - ------ - Adjusted Return on Average Assets Return on average assets (GAAP) 0.64 % 0.68 % 0.47 % 0.44 % 0.11 % Effect to adjust for: Merger-related expenses 0.00 % 0.00 % 0.31 % 0.03 % 0.09 % Income tax benefit from merger-related expenses 0.00 % 0.00 % -0.09 % 0.00 % -0.01 % Income tax expense for write-down of net deferred tax 0.00 % 0.00 % 0.00 % 0.00 % 0.40 % asset Income tax benefit for write-down of net deferred tax 0.00 % 0.00 % 0.00 % 0.00 % -0.11 % liability Income tax benefit for reduction in the federal income 0.00 % 0.00 % 0.00 % 0.00 % -0.06 % tax rate (from 35% to 28%) - ------ - - ------ - - ------ - - ------ - - ------ - Adjusted return on average assets(non-GAAP) 0.64 % 0.68 % 0.69 % 0.47 % 0.42 % - ------ - - ------ - - ------ - - ------ - - ------ - Adjusted Return on Average Equity Return on average equity (GAAP) 3.55 % 3.55 % 2.39 % 2.18 % 0.51 % Effect to adjust for: Merger-related expenses 0.00 % 0.00 % 1.59 % 0.16 % 0.48 % Income tax benefit from merger-related expenses 0.00 % 0.00 % -0.45 % -0.01 % -0.07 % Income tax expense for write-down of net deferred tax 0.00 % 0.00 % 0.00 % 0.00 % 1.94 % asset Income tax benefit for write-down of net deferred tax 0.00 % 0.00 % 0.00 % 0.00 % -0.55 % liability Income tax benefit for reduction in the federal income 0.00 % 0.00 % 0.00 % 0.00 % -0.31 % tax rate (from 35% to 28%) - ------ - - ------ - - ------ - - ------ - - ------ - Adjusted return on average equity(non-GAAP) 3.55 % 3.55 % 3.53 % 2.33 % 2.00 % - ------ - - ------ - - ------ - - ------ - - ------ -

For further information contact:Craig L. Montanaro, President and Chief Executive Officer, orKeith Suchodolski, Executive Vice President and Chief Financial OfficerKearny Financial Corp.(973) 244-4500

AP RADIO
Update hourly