Kearny Financial repositions portion of investment securities portfolio

Kearny Financial announced the repositioning of a portion of its investment securities portfolio. As part of the Company’s ongoing strategy to realign its balance sheet for the prevailing economic and interest rate environment, the Company executed the sale of $122.2 million of its available-for-sale debt securities, yielding 3.22%, with a weighted average remaining life of 8.2 years. The sale resulted in an estimated after-tax loss of $12.9 million and is expected to have a nominal impact on tangible book value, as the loss was previously reflected in capital via accumulated other comprehensive loss. Proceeds from the sale were utilized to retire higher-cost wholesale funding and to reinvest into loans yielding current market rates. The transaction is expected to be immediately accretive to net interest income. In executing this transaction the Company has achieved a number of strategic objectives, including: The retirement of higher-cost wholesale funding, which provides for additional liquidity and balance sheet flexibility; The liquidation of $78.9 million of COVID-era investment securities, yielding 1.75%, which are expected to underperform alternative assets in a variety of interest rate scenarios; and The liquidation of $37.1 million of floating-rate investment securities, reducing balance sheet sensitivity to the short end of the yield curve.