Kearny Financial in Fairfield, N.J., plans to reduce annual operating expenses by 5% to 10%.
The $7.9 billion-asset company said in a press release that it will cut costs by reducing vendor expenses, automating or outsourcing “routine activities” and realigning its workforce.
Kearny also restructured its balance sheet, selling $121.4 million of lower-yielding available-for-sale debt securities for an estimated after-tax loss of about $11 million.
The company reinvested proceeds from the sale in debt securities that are currently yielding, on average, 440 basis points higher than ones that were sold. Kearny also bought about $100 million of debt securities, funded by wholesale borrowings, which will produce an average spread of 216 basis points.
Kearny said the loss from selling the securities should have “a nominal impact” on its tangible book value because the loss was already reflected in capital through accumulated other comprehensive loss.