What Kearny Financial Corp. told the SEC could break it.

Kearny Bank's business is geographically concentrated in New Jersey and New York: its lending is concentrated there (commercial mortgages secured primarily by properties in NJ, NY and surrounding states) and deposits come predominantly from the communities around its 43 branch offices in ten NJ counties and Kings (Brooklyn) and Richmond (Staten Island) counties, NY; a downturn in those metro real-estate markets or economies would disproportionately raise credit losses and pressure funding.

“Our lending is concentrated in New Jersey and New York and our predominant sources of deposits are the communities in which our offices are located as well as the neighboring communities.”

Kearny depends on gathering deposits, making investments and managing loan repayment/maturity schedules to maintain adequate liquidity, and an inability to raise funds through deposits, borrowings or asset sales/maturities could harm its financial condition and trigger regulatory limits; it also carries an ESOP loan and $113.5 million of goodwill that must be periodically tested for impairment (sensitive to its common-stock price and asset valuations), an impairment of which would reduce earnings and book value.

“Liquidity is essential to our business. We rely on our ability to gather deposits, make investments and effectively manage the repayment and maturity schedules of loans to ensure that there is adequate liquidity to fund our operations and pay our obligations.”

Kearny holds $140.1 million of fixed-to-floating-rate subordinated debt issued by community banks (primarily in the U.S. Mid-Atlantic), comprising 12.4% of total investments and 1.8% of total assets at June 30, 2025; while the majority is NRSRO-rated at or above investment grade (BBB-/Baa3), this concentration exposes Kearny to the credit risk of other community banks and to banking-sector stress/contagion, with potential downgrades or defaults impairing the securities' value.

“This category of securities consists of fixed-to-floating rate subordinated debt issued by community banks, primarily located in the Mid-Atlantic region of the U.S.”

As a nonmember New Jersey savings bank with federally insured deposits, Kearny Bank is subject to extensive regulation and examination by the New Jersey Department of Banking and Insurance (NJDBI) and the FDIC — including loans-to-one-borrower limits and approvals for new branches and mergers/acquisitions — and Kearny Financial is regulated and examined by the Federal Reserve Board (with enforcement authority and merger-approval requirements); changes in laws, regulatory fees, capital requirements or monetary/fiscal policy could reduce profitability and impair franchise value.

“As a nonmember New Jersey savings bank with federally insured deposits, the activities of Kearny Bank are subject to extensive regulation by the NJDBI and the FDIC, including restrictions or requirements with respect to loans to one borro”