Profile: Kearny Financial Corp (KRNY.O)
10 Dec 2013
Kearny Financial Corp. is a holding company for Kearny Federal Savings Bank (the Bank), a Federally-Chartered stock savings bank. The Company operates from an administrative headquarters in Fairfield, New Jersey and had 40 branch offices as of June 30, 2012. The Company’s primary business is the ownership and operation of the Bank. The Bank is principally engaged in the business of attracting deposits from the general public at its 41 locations in New Jersey and using these deposits, together with other funds, to originate or purchase loans for its portfolio and invest in securities. Loans originated or purchased by the Bank generally include loans collateralized by residential and commercial real estate augmented by secured and unsecured loans to businesses and consumers. The investment securities purchased by the Bank generally include United States agency mortgage-backed securities, United States government and agency debentures and bank-qualified municipal obligations. As of June 30, 2012, its primary market area consists of the New Jersey counties in which it operate branches: Bergen, Essex, Hudson, Middlesex, Monmouth, Morris, Ocean, Passaic and Union Counties.
The Bank focused on the origination of one-to-four family first mortgage loans, which comprise a majority of its total loan portfolio. Its category of loans comprises commercial mortgages, including loans secured by multi-family, mixed-use and nonresidential properties. Its commercial loan offerings also include secured and unsecured business loans, most of which are secured by real estate. Commercial loan offerings include programs offered through the Small Business Administration (SBA) in which the Bank participates as a Preferred Lender. Its consumer loan offerings primarily include home equity loans and home equity lines of credit, as well as account loans, overdraft lines of credit, vehicle loans and personal loans. It also offers construction loans to builders/developers, as well as individual homeowners.
The Banks primary lending activity consisted of the origination of one-to-four family first mortgage loans, of which approximately $524.5 million or 93.2% are secured by properties located within New Jersey as of June 30, 2012. During the fiscal year ended June 30, 2012 (fiscal 2012), the Bank originated $66.5 million of one-to-four family first mortgage loans within New Jersey. It also originate commercial mortgage loans on multi-family and nonresidential properties, including loans on apartment buildings, retail/service properties and land, as well as other income-producing properties, such as mixed-use properties combining residential and commercial space. It also originates commercial term loans and lines of credit to a variety of professionals, sole proprietorships and small businesses in its market area. The Bank originated approximately $18.0 million of commercial business loans during fiscal 2012.
Approximately $79.0 million or 89.3% of its commercial business loans are non-SBA loans. Of these loans, approximately $75.6 million or 95.7% represent secured loans that are primarily collateralized by real estate or, to a lesser extent, other forms of collateral. The remaining $3.4 million or 4.3% represent unsecured loans to its business customers. It generally requires personal guarantees on all non-SBA commercial business loans.
The Bank offers home equity loans are fixed-rate loans for terms of generally up to 20 years. It also offer fixed-rate and adjustable-rate home equity lines of credit with terms of up to 15 years. In addition to home equity loans and lines of credit, its consumer loan portfolio primarily includes loans secured by savings accounts and certificates of deposit on deposit with the Bank and overdraft lines of credit, as well as vehicle loans and personal loans. Its construction lending includes loans to individuals for construction of one-to-four family residences or for major renovations or improvements to an existing dwelling. Its construction lending also includes loans to builders and developers for multi-unit buildings or multi-house projects. During fiscal 2012, construction loan disbursements were $12.0 million. As of June 30, 2012, its loans-to-one-borrower limit was approximately $50.2 million. As of June 30, 2012, its single borrower had an aggregate loan balance of approximately $13.1 million.
The Bank makes investments in mortgage-backed securities and non-mortgage-backed securities. As of June 30, 2012, the Bank’s securities portfolio totaled $1.28 billion. As of June 30, 2012, mortgage-backed securities represented approximately 96.3% of its total investment in securities. It generally invest in mortgage-backed securities issued by United States government agencies or government-sponsored entities, such as the Government National Mortgage Association (Ginnie Mae), Freddie Mac and the Federal National Mortgage Association (Fannie Mae).
Sources of Funds
Deposits are its primary source of funds for lending and other investment purposes. In addition, it derives funds from loan and mortgage-backed securities principal repayments and proceeds from the maturities and calls of non-mortgage-backed securities. The Bank’s deposit products include interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, savings accounts and certificates of deposit accounts ranging in terms from 30 days to five years. Certificates of deposit with terms ranging from one year to five years are available for individual retirement account plans. To supplement its deposits as a source of funds for lending or investment, it borrows funds in the form of advances from the Federal Home Loan Bank (FHLB) of New York.
Kearny Financial Securities, Inc. was dissolved during the year ended June 30, 2012. Its subsidiaries include Kearny Federal Savings Bank. Kearny Federal Savings Bank has three wholly owned subsidiaries: KFS Financial Services, Inc., KFS Investment Corp and CJB Investment Corp.
The Company competes with Bank of America, Citibank, Hudson City Savings Bank, JP Morgan Chase Bank, PNC Bank, TD Bank, and Wells Fargo Bank.
Kearny Financial Corp
120 Passaic Avenue
FAIRFIELD NJ 07004