KRNY - Kearny Financial announces wholesale restructuring cost-cutting plan

• Kearny Financial ( NASDAQ: KRNY ) said Thursday it completed a wholesale restructuring related to its investment securities portfolio and announced a company-wide cost-cutting plan.
• Kearny ( KRNY ) executed the sale of $121.4M of its lower-yielding available-for-sale debt securities for estimated after-tax loss of ~$11M.
• Proceeds were reinvested in debt securities currently yielding, on average, 440 bps higher than the securities sold.
• The firm also purchased ~$100M of debt securities, funded by wholesale borrowings, which will produce an average spread of 216 bps.
• The loss on sale of securities is expected to have a nominal impact on Kearny's ( KRNY ) tangible book value as such loss was reflected in capital earlier through accumulated other comprehensive loss.
• The company also announced an operating efficiency initiative given the prevailing economic and interest rate environment.
• The initiative is targeting an annualized reduction in operating expense of 5-10%.
• The plan includes actions surrounding optimization and reduction of vendor spend, automation or outsourcing of routine activities, and realignment of workforce.

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