UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
JANUARY 2, 2007
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Date of Report
(Date of earliest event reported)
KEARNY FINANCIAL CORP.
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(Exact name of Registrant as specified in its Charter)
United States 0-51093 22-3803741
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(State or other jurisdiction (SEC Commission (IRS Employer
of incorporation) File No.) Identification
Number)
120 Passaic Avenue, Fairfield, New Jersey 07004
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (973)244-4500
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Not Applicable
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(Former name or former address,
if changed since last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
___ Written communications pursuant to Rule 425 under the Securities Act
___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act
___ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
___ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
KEARNY FINANCIAL CORP.
INFORMATION TO BE INCLUDED IN REPORT
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ITEM 4.02. NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW.
(a) On January 2, 2007, the Audit Committee of the Kearny Financial Corp.
(the "Company") Board of Directors determined that the Company will need to
restate the financial statements contained in its Annual Report on Form 10-K for
the fiscal year ended June 30, 2006 and Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 2006 and September 30, 2006 (collectively, the
"Financial Statements") and the previously issued Financial Statement should no
longer be relied upon.
The Company previously disclosed its intention to reclassify its portfolio
of securities held to maturity (consisting primarily of municipal bonds and to a
lesser degree U.S. government obligations) to available for sale during the
quarter ending December 31, 2006, for the purpose of executing sales of the
municipal bonds at opportune times. A decline in pre-tax income reduces the
advantage of holding tax-exempt instruments and their yield is substantially
below market. The carrying value of the municipal bond portfolio was $199.0
million at September 30, 2006. During the three months ended December 31, 2006,
the Company sold $105.9 million of the bonds recording a nominal gain.
The determination has now been made by the Audit Committee that under
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," an error was made in not making this
reclassification during the quarter ended March 31, 2006 when the Company sold
all of the government agency notes held in the portfolio. Notwithstanding the
Company's decision to make the reclassification during the quarter ended
December 31, 2006 in order to permit management to make periodic sales of
securities from this portfolio when the opportunity presents itself, proper
accounting treatment of the securities held to maturity portfolio required the
change to already have been made. Furthermore, the Audit Committee believes that
this reclassification should be extended to mortgage-backed securities held to
maturity and included in the Financial Statements for the fiscal year ended June
30, 2006 and quarterly periods ended March 31, 2006 and September 30, 2006.
The effect of this change is that the securities will be reported in the
Financial Statements at fair value instead of at amortized cost, which will
result in a change in the value of these assets previously reported on the
statements of financial condition at March 31, 2006, June 30, 2006 and September
30, 2006. Carrying these securities at fair value will impact the accumulated
other comprehensive income (loss), which is a component of stockholders' equity.
The adjustments to be made to the Financial Statements are non-cash in nature
and do not result in changes to the income statements or previously reported
total net income for any period.
The Company intends to file the restated Financial Statements during the
first quarter of the 2007 calendar year. The Audit Committee for the Company
discussed with the Company's independent accountant the matters disclosed in
this filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.
KEARNY FINANCIAL CORP.
Date: January 8, 2007 By: /s/ William C. Ledgerwood
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William C. Ledgerwood
Senior Vice President and Chief Financial
Officer