SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-51093

KEARNY FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

UNITED STATES		22-3803741
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

120 Passaic Ave., Fairfield, New Jersey		07004-3510
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code

973-244-4500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: May 8, 2015.

$0.10 par value common stock — 67,375,247 shares outstanding

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

INDEX

		Page Number
PART I—FINANCIAL INFORMATION

Item 1:	Financial Statements

	Consolidated Statements of Financial Condition at March 31, 2015 and June 30, 2014 (Unaudited)	1

	Consolidated Statements of Income for the Three and Nine Months Ended March 31, 2015 and March 31, 2014 (Unaudited)	2

	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended March 31, 2015 and March 31, 2014 (Unaudited)	4

	Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended March 31, 2015 and March 31, 2014 (Unaudited)	5

	Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2015 and March 31, 2014 (Unaudited)	7

	Notes to Consolidated Financial Statements (Unaudited)	9

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	67

Item 3:	Quantitative and Qualitative Disclosure About Market Risk	88

Item 4:	Controls and Procedures	94

PART II—OTHER INFORMATION

Item 1:	Legal Proceedings	95

Item 1A:	Risk Factors	95

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	95

Item 3:	Defaults Upon Senior Securities	95

Item 4:	Mine Safety Disclosures	95

Item 5:	Other Information	95

SIGNATURES		97

KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In Thousands, Except Share and Per Share Data)

	March 31, 2015			June 30, 2014
	(Unaudited)
Assets
Cash and amounts due from depository institutions	$	13,231		$	14,403
Interest-bearing deposits in other banks		107,725			120,631
Cash and Cash Equivalents		120,956			135,034
Debt securities available for sale (amortized cost $423,249 and $411,228)		421,543			407,898
Debt securities held to maturity (fair value $218,678 and $213,472)		218,925			216,414
Loans receivable, including unamortized yield adjustments of $(65) and $(1,397)		1,992,371			1,741,471
Less allowance for loan losses		(14,087	)		(12,387	)
Net Loans Receivable		1,978,284			1,729,084
Mortgage-backed securities available for sale (amortized cost $366,201 and $432,802)		372,617			437,223
Mortgage-backed securities held to maturity (fair value $306,868 and $293,781)		299,945			295,658
Premises and equipment		39,629			40,105
Federal Home Loan Bank of New York ("FHLB") stock		31,881			25,990
Accrued interest receivable		9,688			9,013
Goodwill		108,591			108,591
Bank owned life insurance		89,823			88,820
Deferred income tax assets, net		12,389			10,314
Other assets		9,458			5,865
Total Assets	$	3,713,729		$	3,510,009

Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest-bearing	$	217,894		$	224,054
Interest-bearing		2,287,172			2,255,887
Total Deposits		2,505,066			2,479,941
Borrowings		669,580			512,257
Advance payments by borrowers for taxes		8,806			9,001
Other liabilities		34,536			14,134
Total Liabilities		3,217,988			3,015,333

Stockholders' Equity
Preferred stock, $0.10 par value, 25,000,000 shares authorized; none issued and outstanding		-			-
Common stock, $0.10 par value, 75,000,000 shares authorized; 73,781,587 issued; 67,375,247 and 67,267,865 outstanding, respectively		7,378			7,378
Paid-in capital		225,602			231,870
Retained earnings		345,325			336,355
Unearned Employee Stock Ownership Plan shares; 278,827 shares and 387,924 shares, respectively		(2,788	)		(3,879	)
Treasury stock, at cost; 6,406,340 shares and 6,513,722 shares, respectively		(73,535	)		(74,768	)
Accumulated other comprehensive loss		(6,241	)		(2,280	)
Total Stockholders' Equity		495,741			494,676
Total Liabilities and Stockholders' Equity	$	3,713,729		$	3,510,009

See notes to unaudited consolidated financial statements

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Data)

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
		2015			2014			2015			2014
Interest Income
Loans	$	19,240		$	16,892		$	56,293		$	49,217
Mortgage-backed securities		4,934			4,987			14,364			16,046
Debt securities:
Taxable		1,838			1,308			5,365			3,807
Tax-exempt		501			460			1,476			1,374
Other interest-earning assets		356			309			981			745
Total Interest Income		26,869			23,956			78,479			71,189
Interest Expense
Deposits		3,953			3,599			11,771			10,825
Borrowings		2,351			1,876			7,045			5,212
Total Interest Expense		6,304			5,475			18,816			16,037
Net Interest Income		20,565			18,481			59,663			55,152
Provision for Loan Loses		1,761			880			4,351			2,607
Net Interest Income after Provision for Loan Losses		18,804			17,601			55,312			52,545
Non-Interest Income
Fees and service charges		826			513			2,256			1,834
Gain on sale of securities		-			830			7			1,056
Gain on sale of loans		82			27			91			80
Loss on sale and write down of real estate owned		(510	)		(71	)		(656	)		(70	)
Income from bank owned life insurance		2,063			668			3,369			2,077
Electronic banking fees and charges		218			237			760			877
Miscellaneous		447			181			597			321
Total Non-Interest Income		3,126			2,385			6,424			6,175
Non-Interest Expense
Salaries and employee benefits		9,817			9,098			29,481			26,774
Net occupancy expense of premises		2,229			2,106			5,666			5,375
Equipment and systems		1,954			3,168			5,918			7,097
Advertising and marketing		423			332			799			891
Federal deposit insurance premium		630			582			1,826			1,712
Directors' compensation		164			173			525			517
Merger-related expenses		-			190			-			190
Miscellaneous		2,175			1,866			6,468			5,798
Total Non-Interest Expense		17,392			17,515			50,683			48,354
Income before Income Taxes		4,538			2,471			11,053			10,366
Income taxes		660			685			2,083			3,007
Net Income	$	3,878		$	1,786		$	8,970		$	7,359

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Continued)

(In Thousands, Except Per Share Data)

(Unaudited)

	Three Months Ended March 31,				Nine Months Ended March 31,
		2015		2014		2015		2014
Net Income per Common Share (EPS)
Basic	$	0.06	$	0.03	$	0.13	$	0.11
Diluted	$	0.06	$	0.03	$	0.13	$	0.11
Weighted Average Number of Common Shares Outstanding
Basic		67,078		65,684		67,032		65,797
Diluted		67,092		65,782		67,146		65,829

Dividends Declared Per Common Share	$	-	$	-	$	-	$	-

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands, Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
		2015			2014			2015			2014
Net Income	$	3,878		$	1,786		$	8,970		$	7,359

Other Comprehensive (Loss) Income:

Net unrealized gain on securities available for sale, net of deferred income tax expense (benefit) of:
2015 $1,485, $1,310;
2014 $3,231, $(571)		2,176			6,263			2,315			213

Net loss on securities transferred from available for sale to held to maturity, net of deferred income tax benefit of:
2015 $(9), $(9);
2014 $0, $0		(13	)		-			(11	)		-

Net realized gain on securities available for sale, net of income tax expense of:
2015 $0, $(3);
2014 $(340), $(433)		-			(490	)		(4	)		(623	)

Fair value adjustments on derivatives, net of deferred income tax benefit of:
2015 $(2,836), $(4,198);
2014 $(930), $(1,026)		(4,107	)		(1,347	)		(6,079	)		(1,487	)

Benefit plan adjustments, net of deferred income tax expense (benefit) of:
2015 $8, $(124);
2014 $3, $340		11			7			(182	)		495

Total Other Comprehensive (Loss) Income		(1,933	)		4,433			(3,961	)		(1,402	)

Total Comprehensive Income	$	1,945		$	6,219		$	5,009		$	5,957

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Nine Months Ended March 31, 2014

(In Thousands, Unaudited)

	Common Stock					Paid-In		Retained		Unearned ESOP			Treasury			Accumulated Other Comprehensive
	Shares			Amount		Capital		Earnings		Shares			Stock			Loss			Total
Balance - June 30, 2013		66,501		$	7,274	$	215,722	$	326,167	$	(5,334	)	$	(71,983	)	$	(4,139	)	$	467,707
Net Income		-			-		-		7,359		-			-			-			7,359
Other comprehensive loss, net of income tax benefit		-			-		-		-		-			-			(1,402	)		(1,402	)
ESOP shares committed to be released (108 shares)		-			-		126		-		1,091			-			-			1,217
Stock option expense		-			-		30		-		-			-			-			30
Treasury stock purchases		(386	)		-		-		-		-			(4,020	)		-			(4,020	)
Treasury stock reissued		36			-		45		-		-			415			-			460
Restricted stock plan shares earned (12 shares)		-			-		126		-		-			-			-			126
Balance - March 31, 2014		66,151		$	7,274	$	216,049	$	333,526	$	(4,243	)	$	(75,588	)	$	(5,541	)	$	471,477

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Nine Months Ended March 31, 2015

(In Thousands, Unaudited)

	Common Stock				Paid-In			Retained		Unearned ESOP			Treasury			Accumulated Other Comprehensive
	Shares		Amount		Capital			Earnings		Shares			Stock			Loss			Total
Balance - June 30, 2014		67,268	$	7,378	$	231,870		$	336,355	$	(3,879	)	$	(74,768	)	$	(2,280	)	$	494,676
Net Income		-		-		-			8,970		-			-			-			8,970
Other comprehensive loss, net of income tax benefit		-		-		-			-		-			-			(3,961	)		(3,961	)
ESOP shares committed to be released (108 shares)		-		-		455			-		1,091			-			-			1,546
Stock option expense		-		-		124			-		-			-			-			124
Treasury stock reissued		107		-		132			-		-			1,233			-			1,365
Restricted stock plan shares earned (18 shares)		-		-		209			-		-			-			-			209
Settlement of stock options with cash in lieu of shares		-		-		(7,188	)		-		-			-			-			(7,188	)
Balance - March 31, 2015		67,375	$	7,378	$	225,602		$	345,325	$	(2,788	)	$	(73,535	)	$	(6,241	)	$	495,741

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands, Unaudited)

	Nine Months Ended March 31,
		2015			2014
Cash Flows from Operating Activities:
Net income	$	8,970		$	7,359
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment		2,210			1,958
Net amortization of premiums, discounts and loan fees and costs		1,709			2,273
Deferred income taxes		1,272			146
Realized gain on bargain purchase		(370	)		-
Amortization of intangible assets		124			93
Amortization of benefit plans’ unrecognized net loss		57			32
Provision for loan losses		4,351			2,607
Loss on write-down and sales of real estate owned		656			70
Realized gain on sale of loans		(91	)		(80	)
Proceeds from sale of loans		1,089			817
Realized loss on sale of debt securities available for sale		594			1,294
Realized gain on sale of mortgage-backed securities available for sale		(601	)		(2,350	)
Realized gain on disposition of premises and equipment		(13	)		-
Increase in cash surrender value of bank owned life insurance		(1,936	)		(2,077	)
ESOP, stock option plan and restricted stock plan expenses		1,879			1,373
Increase in interest receivable		(675	)		(887	)
(Increase) decrease in other assets		(14,301	)		345
Increase in interest payable		20			71
Increase in other liabilities		20,079			1,760
Net Cash Provided by Operating Activities		25,023			14,804

Cash Flows from Investing Activities:
Purchase of debt securities available for sale		(52,528	)		(108,850	)
Proceeds from sale of debt securities available for sale		39,444			54,075
Proceeds from repayments of debt securities available for sale		516			497
Purchase of debt securities held to maturity		(7,696	)		(4,315	)
Proceeds from calls and maturities of debt securities held to maturity		4,857			1,468
Proceeds from repayments of debt securities held to maturity		167			341
Purchase of loans		(161,666	)		(107,969	)
Net increase in loans receivable		(94,174	)		(185,209	)
Proceeds from sale of real estate owned		1,047			1,219
Purchases of mortgage-backed securities available for sale		(10,384	)		(45,076	)
Principal repayments on mortgage-backed securities available for sale		58,520			93,195
Proceeds from sale of mortgage-backed securities available for sale		17,780			87,728
Purchases of mortgage-backed securities held to maturity		(35,296	)		-
Principal repayments on mortgage-backed securities held to maturity		30,383			1,247
Purchase of FHLB stock		(11,430	)		(24,120	)
Redemption of FHLB stock		5,539			15,348
Proceeds from sale of premises and equipment		49			-
Additions to premises and equipment		(1,769	)		(3,105	)
Proceeds from repayment of BOLI cash surrender value		933			-
Adjustment to cash acquired in merger		53			-
Net Cash Used in Investing Activities	$	(215,655	)	$	(223,526	)

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Thousands, Unaudited)

	Nine Months Ended March 31,
		2015			2014

Cash Flows from Financing Activities:
Net increase in deposits	$	25,234		$	26,187
Repayment of term FHLB advances		(1,053,070	)		(500,066	)
Proceeds from term FHLB advances		1,225,000			700,000
Net change in overnight borrowings		(17,000	)		(5,000	)
Increase (decrease) in other short-term borrowings		2,408			(1,410	)
(Decrease) increase in advance payments by borrowers for taxes		(195	)		969
Purchase of common stock of Kearny Financial Corp. for treasury		-			(4,020	)
Issuance of common stock of Kearny Financial Corp. from treasury		1,365			460
Payment of cash for exercise of stock options		(7,188	)		-
Net Cash Provided by Financing Activities		176,554			217,120
Net (Decrease) Increase in Cash and Cash Equivalents		(14,078	)		8,398
Cash and Cash equivalents - Beginning		135,034			127,034
Cash and Cash equivalents - Ending	$	120,956		$	135,432

Supplemental Disclosures of Cash Flows Information:
Cash paid during the year for:
Income taxes, net of refunds	$	1,825		$	5,522
Interest	$	18,744		$	15,966

Non-cash investing and financing activities:
Acquisition of real estate owned in settlement of loans	$	1,465		$	848
Fair value of assets acquired, net of cash and cash equivalents acquired	$	317		$	-

See notes to unaudited consolidated financial statements.

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KEARNY FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. PRINCIPLES OF CONSOLIDATION

The unaudited consolidated financial statements include the accounts of Kearny Financial Corp. (the “Company”), its wholly-owned subsidiary, Kearny Bank (the “Bank”) and the Bank’s wholly-owned subsidiaries, CJB Investment Corp. and KFS Financial Services, Inc. and its wholly-owned subsidiary, KFS Insurance Services, Inc. The Company conducts its business principally through the Bank. Management prepared the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), including the elimination of all significant inter-company accounts and transactions during consolidation.

2. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, income, comprehensive income, changes in stockholders’ equity and cash flows in conformity with GAAP. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the unaudited consolidated financial statements have been included. The results of operations for the three- month and nine-month periods ended March 31, 2015, are not necessarily indicative of the results that may be expected for the entire fiscal year or any other period.

The data in the consolidated statement of financial condition for June 30, 2014 was derived from the Company’s 2014 annual report on Form 10-K. That data, along with the interim unaudited financial information presented in the consolidated statements of financial condition, income, comprehensive income, changes in stockholders’ equity and cash flows should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s 2014 annual report on Form 10-K.

3. NET INCOME PER COMMON SHARE (“EPS”)

Basic EPS is based on the weighted average number of common shares actually outstanding including restricted stock awards (see following paragraph) adjusted for Employee Stock Ownership Plan (“ESOP”) shares not yet committed to be released. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as outstanding stock options, were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Diluted EPS is calculated by adjusting the weighted average number of shares of common stock outstanding to include the effect of contracts or securities exercisable or which could be converted into common stock, if dilutive, using the treasury stock method. Shares issued and reacquired during any period are weighted for the portion of the period they were outstanding.

The Financial Accounting Standards Board (“FASB”) has issued guidance on determining whether instruments granted in share-based payment transactions are participating securities. This guidance clarifies that all outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends participate in undistributed earnings with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing basic and diluted earnings per share must be applied.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations:

	Three Months Ended March 31, 2015						Nine Months Ended March 31, 2015
	Income (Numerator)		Shares (Denominator)		Per Share Amount		Income (Numerator)		Shares (Denominator)		Per Share Amount
	(In Thousands, Except Per Share Data)						(In Thousands, Except Per Share Data)
Net income	$	3,878					$	8,970
Basic earnings per share, income available to common stockholders	$	3,878		67,078	$	0.06	$	8,970		67,032	$	0.13
Effect of dilutive securities:
Stock options		-		14				-		114
	$	3,878		67,092	$	0.06	$	8,970		67,146	$	0.13

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	Three Months Ended March 31, 2014						Nine Months Ended March 31, 2014
	Income (Numerator)		Shares (Denominator)		Per Share Amount		Income (Numerator)		Shares (Denominator)		Per Share Amount
	(In Thousands, Except Per Share Data)						(In Thousands, Except Per Share Data)
Net income	$	1,786					$	7,359
Basic earnings per share, income available to common stockholders	$	1,786		65,684	$	0.03	$	7,359		65,797	$	0.11
Effect of dilutive securities:
Stock options		-		98				-		32
	$	1,786		65,782	$	0.03	$	7,359		65,829	$	0.11

During the three and nine months ended March 31, 2015, the average number of options which were considered anti-dilutive totaled approximately 162,333 and 177,555, respectively. During the three and nine months ended March 31, 2014, the average number of options which were considered anti-dilutive totaled approximately 1,915,850 and 1,964,126, respectively.

4. SUBSEQUENT EVENTS

The Company has evaluated events and transactions occurring subsequent to the statement of financial condition date of March 31, 2015, for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date this document was filed.

5. PLAN OF CONVERSION AND REORGANIZATION

On September 4, 2014, the Boards of Directors of Kearny MHC (the majority stockholder of the Company), the Company and the Bank adopted a Plan of Conversion and Reorganization (the “Plan”). Pursuant to the Plan, Kearny MHC will convert from the mutual holding company form of organization to the fully public form. Kearny MHC will be merged into the Company, and Kearny MHC will no longer exist. The Company will then merge into a new Maryland corporation, also named Kearny Financial Corp., which will become the holding company for the Bank.

As part of the conversion, Kearny MHC’s ownership interest in the Company will be offered for sale in a public offering. The existing publicly held shares of the Company, which represent the remaining ownership interest in the Company, will be exchanged for new shares of common stock of the new Maryland corporation. The exchange ratio will ensure that immediately after the conversion and public offering, the public shareholders of the Company will own the same aggregate percentage of common stock of the new Maryland corporation that they owned immediately prior to the completion of the conversion and public offering (excluding shares purchased in the stock offering and cash received in lieu of fractional shares).

When the conversion and public offering are completed, all of the capital stock of the Bank will be owned by the new Maryland corporation. The Plan provides for the establishment, upon the completion of the conversion, of special “liquidation accounts” for the benefit of certain depositors of the Bank in an amount equal to the greater of Kearny MHC’s ownership interest in the retained earnings of the Company as of the date of the latest balance sheet contained in the prospectus or the value of the net assets of Kearny MHC as of the date of the latest statement of financial condition of Kearny MHC prior to the consummation of the conversion (excluding its ownership of the Company).

Following the completion of the conversion, under the rules of the Federal Reserve Bank (“FRB”), the Bank will not be permitted to pay dividends on its capital stock to the Company, its sole shareholder, if the Company’s shareholders’ equity would be reduced below the amount of the liquidation accounts. The liquidation accounts will be reduced annually to the extent that eligible account holders have reduced their qualifying deposits. Subsequent increases will not restore an eligible account holder’s interest in the liquidation accounts. Direct costs of the conversion and public offering will be deferred and reduce the proceeds from the shares sold in the public offering. The Company has incurred approximately $2.1 million in such costs through December 31, 2014.

On May 5, 2015, the stockholders of the Company and members of Kearny MHC approved the plan of conversion and reorganization. Additionally, on May 5, 2015, the Company’s stockholders and Kearny MHC’s members each approved the establishment and funding of the KearnyBank Foundation with a contribution of 500,000 shares of New Kearny common stock and

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$5.0 million in cash. The transactions contemplated by the Plan remain subject to approval by the Board of Governors of the Federal Reserve System.

6. RECENT ACCOUNTING PRONOUNCEMENTS

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The purpose of the ASU is to reduce diversity in the application of guidance by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. This ASU is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. For public entities, the guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016, however, on April 1, 2015 the FASB proposed to defer the effective date by one year. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860) Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The purpose of the ASU is to address the concern that current accounting guidance distinguishes between repurchase agreements that settle at the same time as the maturity of the transferred financial asset and those that settle any time before maturity. In particular, repurchase-to-maturity transactions are generally accounted for as sales with forward agreements under current accounting, whereas typical repurchase agreements that settle before the maturity of the transferred financial asset are accounted for as secured borrowings. Additionally, current accounting guidance requires an evaluation of whether an initial transfer of a financial asset and a contemporaneous repurchase agreement (a repurchase financing) should be accounted for separately or linked. If linked, the arrangement is accounted for on a combined basis as a forward agreement. Those outcomes often are referred to as off-balance-sheet accounting. The ASU changes the accounting for repurchase-to-maturity transactions and linked repurchase financings to secured borrowing accounting, which is consistent with the accounting for other repurchase agreements. The amendments also require two new related disclosures. This ASU is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-14, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure. The purpose of the ASU is to address a practice issue related to the classification of certain foreclosed residential and nonresidential mortgage loans that are either fully or partially guaranteed under government programs. Specifically, creditors should reclassify loans that meet certain conditions to "other receivables" upon foreclosure, rather than reclassifying them to other real estate owned (OREO). The separate other receivable recorded upon foreclosure is to be measured based on the amount of the loan balance (principal and interest) the creditor expects to recover from the guarantor. The ASU is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

7. STOCK REPURCHASE PLANS

On December 2, 2013, the Company announced that the Board of Directors authorized a stock repurchase plan to acquire up to 762,640 shares, or 5%, of the Company’s outstanding stock held by persons other than Kearny MHC. Through March 31, 2015, the Company has repurchased a total of 62,900 shares in accordance with this repurchase plan at a total cost of approximately $700,000 and at an average cost per share of $11.13.

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8. SECURITIES AVAILABLE FOR SALE

The amortized cost, gross unrealized gains and losses and fair values of debt and mortgage-backed securities available for sale at March 31, 2015 and June 30, 2014 and stratification by contractual maturity of debt securities available for sale at March 31, 2015 are presented below:

	March 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)
Securities available for sale:
Debt securities:
U.S. agency securities	$	7,581	$	122	$	14	$	7,689
Obligations of state and political subdivisions		27,519		243		152		27,610
Asset-backed securities		87,584		1,065		216		88,433
Collateralized loan obligations		128,616		95		953		127,758
Corporate bonds		163,056		492		1,198		162,350
Trust preferred securities		8,893		20		1,210		7,703
Total debt securities		423,249		2,037		3,743		421,543

Mortgage-backed securities:
Collateralized mortgage obligations:
Federal Home Loan Mortgage Corporation		30,184		69		153		30,100
Federal National Mortgage Association		47,357		99		509		46,947
Non-agency securities		178		-		2		176
Total collateralized mortgage obligations		77,719		168		664		77,223

Mortgage pass-through securities:
Residential pass-through securities:
Government National Mortgage Association		2,632		260		-		2,892
Federal Home Loan Mortgage Corporation		163,758		3,466		372		166,852
Federal National Mortgage Association		109,385		3,566		198		112,753
Total residential pass-through securities		275,775		7,292		570		282,497

Commercial pass-through securities:
Federal National Mortgage Association		12,707		190		-		12,897
Total commercial pass-through securities		12,707		190		-		12,897

Total mortgage-backed securities		366,201		7,650		1,234		372,617

Total securities available for sale	$	789,450	$	9,687	$	4,977	$	794,160

	March 31, 2015
	Amortized Cost		Fair Value
	(In Thousands)
Debt securities available for sale:
Due in one year or less	$	20,015	$	20,123
Due after one year through five years		20,700		20,362
Due after five years through ten years		153,030		152,371
Due after ten years		229,504		228,687
Total	$	423,249	$	421,543

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	June 30, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)
Securities available for sale:
Debt securities:
U.S. agency securities	$	4,159	$	48	$	2	$	4,205
Obligations of state and political subdivisions		27,537		9		773		26,773
Asset-backed securities		87,480		663		827		87,316
Collateralized loan obligations		120,089		-		517		119,572
Corporate bonds		163,076		617		1,459		162,234
Trust preferred securities		8,887		32		1,121		7,798
Total debt securities		411,228		1,369		4,699		407,898

Mortgage-backed securities:
Collateralized mortgage obligations:
Federal Home Loan Mortgage Corporation		33,505		-		485		33,020
Federal National Mortgage Association		51,277		12		1,249		50,040
Non-agency securities		210		-		-		210
Total collateralized mortgage obligations		84,992		12		1,734		83,270

Mortgage pass-through securities:
Residential pass-through securities:
Government National Mortgage Association		3,055		221

Kearny Financial Corp. 10-Q