The Bank Slate


Kearny in NJ sheds OREO, restructures BOLI holdings

Kearny Financial in Fairfield, N.J., said it recently sold some real estate holdings and restructured its bank-owned life insurance portfolio.

The $7.9 billion-asset company said in a press release that it sold a $12 million other real estate owned asset this month. Proceeds were redeployed into interest-earning assets.

The company said the move will improve future earnings by reducing net OREO expenses, which totaled about $469,000 in the fourth quarter.

Separately, Kearny reclassified three nonperforming commercial real estate loans – which are tied to a single borrower relationship and had a $9.7 million fair value on Dec. 31 – to held-for-sale status. The company said it plans to sell the assets in the near term.

The company in January exchanged or surrendered about $103.4 million of BOLI policies, replacing them with higher-yielding policies. The company recognized $5.7 million tax expense and $573,000 of exchange charges which were partially offset by a $4.8 million one-time increase in cash surrender value.

Kearny said last month that it sold $122.2 million of debt securities at a pretax loss of $18.1 million. Proceeds were used to retire higher-cost wholesale funding and to reinvest in loans yielding about 7%.

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