 FAIRFIELD, N.J., July 30, 2020 GLOBE NEWSWIRE -- Kearny Financial Corp. NASDAQ GS: KRNY the Company, the holding company of Kearny Bank the Bank, reported net income for the quarter ended June 30, 2020 of 13.7 million, or 0.17 per diluted share. The results represent an increase of 4.4 million compared to 9.3 million, or 0.11 per diluted share, for the quarter ended March 31, 2020. For the fiscal year ended June 30, 2020, the Company reported net income of 45.0 million representing an increase of 2.9 million compared to 42.1 million for the fiscal year ended June 30, 2019. The increase in net income reflected a 20 increase in earnings per diluted share to 0.55 for the year ended June 30, 2020 from 0.46 for the year ended June 30, 2019.Craig L. Montanaro, President and Chief Executive Officer, commented, I am proud to report that we achieved record earnings for both the quarter and the fiscal year, while making significant progress towards our long-term strategic goal of improving our funding mix. During fiscal 2020, our retail deposits increased by 517 million, or 14, reflecting a 647 million, or 33, increase in core non-maturity deposits. This success enabled us to reduce our wholesale funding by 381 million, with such balances representing 22 of total funding at June 30, 2020 from 30 one year earlier.The Company had previously announced the successful closing of its acquisition of MSB Financial Corp. NASDAQ: MSBF MSB and its subsidiary, Millington Bank Millington on July 10, 2020. Regarding the acquisition, Mr. Montanaro commented, In conjunction with announcing our year-end results, I would also like to welcome the Millington employees, clients and stockholders to the Kearny family. Having successfully converted and integrated MSBs core and online banking systems concurrent with the acquisitions closing, we are now focused on supporting and strengthening our relationships with Millingtons existing clients, while further enhancing our presence in the very desirable New Jersey markets located within Somerset and Morris counties.With regard to the recent challenges presented by the COVID-19 pandemic, Mr. Montanaro further stated, We continue to focus on the various ways in which we can assist our clients who have been adversely impacted by COVID-19, including those clients who recently joined us from Millington. While we recognize that significant economic uncertainty lies ahead, we believe that our combined balance sheets are well positioned for such an environment. We ended fiscal 2020 on exceptionally strong footing with a tangible equity ratio of 13.29, loan loss reserves totaling 37 million and liquid assets of 1.6 billion, which are further supported by over 2.6 billion of available borrowing capacity.Balance Sheet For the quarter and the year ended June 30, 2020, the Company succeeded in significantly growing core retail deposits which facilitated the outflow of wholesale deposits. For the quarter ended June 30, 2020, deposits increased by 177.0 million to 4.43 billion from 4.25 billion at March 31, 2020. Such growth was attributable to an increase of 224.9 million in retail deposits that was partially offset by a decline of 47.8 million in wholesale deposits. For the year ended June 30, 2020, deposits increased by 282.6 million to 4.43 billion from 4.15 billion at June 30, 2019. The year-over-year growth in deposits was attributable to an increase of 517.4 million in retail deposits that was partially offset by a 234.8 million decrease in wholesale deposits. Loans receivable decreased by 64.1 million to 4.50 billion at June 30, 2020 from 4.56 billion at March 31, 2020. The decrease in loans receivable was attributable to a decrease in loan origination volume coupled with the acceleration of loan pre-payment activity, as compared to the prior quarter. For the quarter ended June 30, 2020, the Company originated 749 loans totaling 69.0 million under the Payroll Protection Program PPP and recorded deferred origination fees related to such loans totaling 2.9 million. For the year ended June 30, 2020, the Companys aggregate loan portfolio decreased by 180.5 million, or 3.9, from 4.68 billion, at June 30, 2019. Investment securities decreased by 92.7 million to 1.42 billion, or 21.0 of total assets, at June 30, 2020 from 1.51 billion at March 31, 2020. For the year ended June 30, 2020, the securities portfolio increased by 127.3 million from 1.29 billion, or 19.5 of total assets, at June 30, 2019. Borrowings decreased by 210.9 million to 1.17 billion, or 17.4 of total assets, at June 30, 2020 from 1.38 billion at March 31, 2020. For the year ended June 30, 2020, borrowings decreased 148.8 million from 1.32 billion at June 30, 2019. The decrease in borrowings for the quarter and year ended June 30, 2020 reflected the Companys continuing effort to reallocate its funding mix in favor of core deposits.EarningsNet Interest Income, Spread and Margin For the quarter ended June 30, 2020, net interest income increased by 2.9 million to 40.5 million from 37.6 million for the quarter ended March 31, 2020. The increase in net interest income was the result of a decrease of 4.3 million in interest expense, partially offset by a 1.4 million decrease in interest income between comparative periods. For the year ended June 30, 2020, net interest income decreased by 6.0 million to 149.4 million from 155.3 million for the year ended June 30, 2019. The decrease in net interest income was the result of a decrease of 4.1 million in interest income and an increase of 1.8 million in interest expense. For the quarter ended June 30, 2020, net interest spread increased by 20 basis points to 2.43 while net interest margin increased by 16 basis points to 2.62. These increases primarily reflected a decrease in the cost of interest-bearing liabilities partially offset by a decrease in the yield on interest-earning assets. Contributing approximately eight basis points to the quarterly increase in net interest margin was a temporary mismatch in the relationship between three-month LIBOR and three-month FHLB advance rates which favorably impacted the net cost of the Companys portfolio of hedged FHLB advances. Specifically, the average historical spread between these two rates over the five-year period ended June 30, 2020 was approximately one basis point. However, that spread increased to 94 basis points on April 1, 2020 reflecting significant market volatility arising at outset of the COVID-19 pandemic. The mismatch between the noted three-month rate indices declined throughout the quarter, ending at 14 basis points at June 30, 2020. For the year ended June 30, 2020, net interest rate spread decreased by nine basis points to 2.22 while net interest margin decreased 11 basis points to 2.45. These decreases primarily reflected a decrease in the yield on interest-earning assets coupled with an increase in the cost of interest-bearing liabilities. For the quarter ended June 30, 2020, the yield on interest-earning assets decreased by 12 basis points to 3.72 which was largely attributable to a 9 basis point decrease in the yield on loans and a 14 basis point decrease in the yield on taxable investment securities. For that same period, the cost of interest-bearing liabilities decreased by 32 basis points to 1.29 which was attributable to a 23 basis point decrease in the cost of interest-bearing deposits coupled with a 61 basis point decrease in the cost of borrowings. For the year ended June 30, 2020, the yield on interest-earning assets decreased by eight basis points to 3.83 which was largely attributable to a three basis point decrease in the yield on loans, coupled with a 14 basis point decrease in the yield on taxable investment securities. For that same period, the cost of interest-bearing liabilities increased by one basis point to 1.61 which was attributable to an 11 basis point increase in the cost of interest-bearing deposits partially offset by a 24 basis point decrease in the cost of borrowings.Non-Interest Income Fees and service charges totaled 1.7 million for the quarter ended June 30, 2020 compared to 1.3 million for the quarter ended March 31, 2020. The increase was largely attributable to an increase of 518,000 in loan pre-payment penalty income to 1.4 million for the quarter ended June 30, 2020. For the year ended June 30, 2020 fees and service charges increased by 1.2 million to 6.6 million from 5.4 million for the year ended June 30, 2019 which was largely attributable to an increase of 1.1 million in loan pre-payment penalty income to 4.6 million for the year ended June 30, 2020. Gains on sales and calls of securities totaled 19,000 for the quarter ended June 30, 2020 compared to 2.2 million for the quarter ended March 31, 2020. For the year ended June 30, 2020 gains on sales of securities totaled 2.3 million compared to a net loss of 323,000 for the year ended June 30, 2019. These variances were largely attributable to the gain on sale of securities recognized in conjunction with a wholesale restructuring transaction executed during the quarter ended March 31, 2020. Loan sale gains achieved record levels, totaling 1.3 million for the quarter ended June 30, 2020 as compared to 565,000 for the quarter ended March 31, 2020. Such gains totaled 3.2 million and 580,000 for the years ended June 30, 2020 and June 30, 2019, respectively. The increase in loan sale gains primarily reflected an increase in the volume of residential mortgage loans sold during those periods.Non-Interest Expense Non-interest expense decreased by 1.2 million to 26.9 million for the quarter ended June 30, 2020 compared to 28. 