Good morning, and welcome to the annual meeting of stockholders of Kearny Financial Corp. Please note that today's meeting is being recorded. It is now my pleasure to turn today's meeting over to Craig Montanaro, Director, President, and Chief Executive Officer of Kearny Financial Corp. Mr. Montanaro, the floor is yours.
Thank you, Danielle. Good morning. The annual meeting will please come to order. Welcome to the annual meeting of stockholders of Kearny Financial Corp. My name is Craig Montanaro, President and CEO of Kearny Financial Corp. and Kearny Bank, and I will act as chairperson of today's meeting. We have the directors and officers of the company. I would like to welcome you and express my appreciation to you for participating in this virtual meeting. Each member of the board of directors, as well as our executive management team, are here in attendance today. First, I'd like to recognize our board of directors, John J. Mazur, Jr., Chairman, Theodore Aanensen, Raymond E. Chandonnet, John N. Hopkins, Catherine A. Lawton, Joe P. Mazza, John F. Regan, John F. McGovern, Craig L. Montanaro, Leopold W. Montanaro, Christopher Petermann, and Charles Pivirotto.
I'd also like to acknowledge our executive team, whose names and titles are included in this presentation. A little ahead of it, but I'd also like to acknowledge Gail Corrigan, our Corporate Secretary, who will act as secretary of the annual meeting, and others present today, including our independent registered public accounting firm, Crowe LLP, Andre Caboon, a CPA and partner, Marc Levy, our legal counsel from Luse Gorman, and the Inspector of Election from Computershare, Amy Regan. In order to conduct an orderly meeting, please follow the rules of conduct, a copy of which is available on this portal. During the meeting, you may submit written questions by clicking the Q&A icon in the upper right-hand portion of the meeting center screen.
We will address all questions that relate to the business matters conducted at this meeting immediately following our presentation of the proposal. The board of directors have previously appointed Amelia Regan from Computershare to act as the Inspector of Elections at this meeting and any adjournments. The inspector has taken an oath to fairly and impartially perform her duties. The oath of inspector will be attached to the minutes of this meeting. The record of the company shows that there were 68,180,318 shares of common stock outstanding on the record date of August 29th, 2022, and entitled to vote at this annual meeting.
We have previously received an affidavit from the secretary that a notice of internet availability of the proxy materials stating the place, day, and hour of the annual meeting and the purposes for which it has been called, was mailed on or about September 16th, 2022 , to each stockholder of record on the close of business on August 29th, 2022 . A copy of the affidavit will be attached to the minutes of this meeting. The company has delivered the inspector's list of stockholders and all proxies have been received. Our records indicate that more than a majority of shares of common stock outstanding and entitled to vote at the meeting are present in person or by proxy.
The inspector is making an exact count and will submit a formal report on the number of shares present or represented during the course of the meeting. Based on a preliminary count, a quorum is declared present and subject to the confirmation of that fact by the inspector's report. Business to be acted upon at the annual meeting as stated in the proxy statement and notice of annual meeting is to consider and act upon three proposals as outlined in the proxy statement. Since no stockholder proposals were properly filed with the company secretary in advance of this annual meeting, as provided in the bylaws, the business of this meeting is limited to the foregoing three matters in accordance with the bylaws.
At the conclusion of discussion of the three items, we'll take a vote on all items, and then we will make a presentation on operations of the company and provide opportunity to address questions following my presentation. We will consider the proposal in the order presented in the notice of annual meeting. The first item up for business to be voted upon is the election of John J. Mazur, Jr., Raymond E. Chandonnet, John F. McGovern, and Christopher Petermann, as directors of the company, each for a three-year term. Second item of business to be voted upon is the proposal to ratify the appointment of Crowe LLP as independent auditor for the company's fiscal year ending June 30th, 2023.
The final proposal to be considered is a non-binding advisory vote to approve compensation paid to our executive officers as described in the proxy statement. Information about our executive compensation is contained in the proxy statement. Okay. We don't have any questions, so we'll move forward. This concludes, since there are no questions, the discussion on all business matters. Any stockholders who wish to vote or recast their vote at this time may do so by clicking on the link provided online. If you have already voted, there is no need for you to recast your vote. Online voting is now closed. While the balloting is being finalized and confirmed, I will provide an update on corporate matters. This presentation contains both forward-looking statements about the company as well as non-GAAP financial measures.
Referring you to the information regarding forward-looking statements and non-GAAP financial measures on page eight of our presentation. The presentation is posted on our website. Right. Our first slide, as you can see, this is a similar slide from last year, our trading symbol KRNY. As of October 17th of this year, our market cap was roughly $740 million. Many of you know we were founded in 1884. We're one of the top 10 New Jersey-based financial institutions by asset size. Roughly 45 branches in 12 counties throughout New York and New Jersey, and we've been an active acquirer since 1999, seven whole bank acquisitions. Next slide, please. This is a new slide. It's really an interesting slide.
Our folks in our accounting and financial area did this slide, and I think we're gonna go through it fairly rapidly, but it's really interesting. As you can see, we've been in the communities in New York and New Jersey for roughly 138 years, but let's look at the milestones from the left to the right. You can see, founded in 1884. That's quite a while ago. In 1941, we obtained our federal charter. As you can see, we did our first acquisition of South Bergen Savings Bank in 1999. Our second of Pulaski Savings Bank in 2003. 2004, we did our West Essex Bank acquisition. We did our first step MHC conversion and IPO in 2005. We did our acquisition of Central Jersey Bancorp in 2011.
2014, we did our Atlas Bank acquisition. 2015, we did our second step, raised roughly $717 million in capital. We funded with $10 million from shareholders on the line. Thankfully, our funding, which has been great for us. We converted from basically an OCC charter, a federal charter to a New Jersey State Savings Bank charter in 2017. We acquired Clifton in 2018. Our last acquisition to date, we acquired MSB Financial Corp. in 2020. Couple other interesting milestones. We introduced our private client group, which has been wildly successful in 2021.
In 2022, we established our investment service company, which is roughly about six, seven months old at this point. A little note here, we achieved record earnings and net income in 2022. Next slide, please. Here's a high-level financial highlight. You can see as of fiscal 2022, we were roughly $7.7 billion in assets. That's an increase of about 6%. We grew loans significantly in 2020 around 2022, about 11.5%, with footings of about $5.4 billion. We also grew deposits nicely, about 6%, to about $5.86 billion, almost $5.9 billion. Look at some of the financial metrics, which look pretty good.
As you can see, about roughly $67.5 million in net income. EPS around $0.95. We're slowly trying to get to that $1 EPS, which is getting very close. Net interest income $196.6 million above the $188 million number in 2021. Margin 2.94% versus 2.80%. Nice ROA of 0.93%. I really look at return on average tangible equity. I don't really look at average equity. Roughly 8.77% up from 7.22%. Overall, a very solid year. You know, still work to do, but a very solid year. Next slide, please. Let's take a look at our equity capitalization. You can see on the left-hand side, and this is really only a four-year trend.
I'll remind everybody on the phone, you know, at one point we had 25% capital when we did our second step in 2015. We've done a lot of work on the equity side, growing M&A and leveraging the capital. You can see if we look at tangible common equity, which I like to look at, somewhere around 16.5% down to roughly 9% in 2022. If you look to the right of that chart, you can see our regulatory capital ratios, which are also very important. You can see Tier 1 leverage 10.14%. As you can see, the S&P U.S. Small Cap Banks Index is roughly 9.37%.
We're starting to see capitalization levels from a regulatory standpoint more normalized, both from an equity standpoint and from a regulatory standpoint. As you can see, common equity Tier 1, 14.5% versus the industry 11.86%. Tier 1 risk-based, 14.5% versus 11.9%. Still a lot of wiggle room there. Total risk-based capital about 15% compared to 14% in the S&P Small Cap Banks. You know, a nice story there. There's certainly some leverage of capital and we're getting closer to, you know, somewhere around where the industry is. Next slide, please. Capital management. I really like this slide. I think it's really important. Each year we look at it, and each year it looks better and better.
As you can see, cumulative capital returns to stockholders. We've been very good stewards of capital over the years as we predominantly focus on buybacks and dividends, and M&A falls into that play. If we start and take a look at the left side of the chart here, you can see in 2018 we returned roughly $3, from 2015 to 2018, we returned. Keep in mind it's from the IPO date. I forgot to mention that. Roughly $327 million in capital between buybacks, $291.36 million in dividends. I'm not gonna go through each number, but you can see it goes from $32 million, $327 million- $500 million, to almost $600 million, $743 million. We're almost to $1 billion in returning capital to our shareholders.
As you can see, in total, about $152 million in dividends and over $750 million in buybacks we've done. You know, one of the things we've talked about in meetings with the analysts and other people is that, you know, now that we've got more normalized capital levels, buybacks will be a strategy, but it will be, you know, give and take. We won't be as strong on the buyback front because our capital levels are more normalized, so it will be more opportunistic. Go to the next slide, please. Earnings performance. There's a lot going on on this chart. We'll take a look at the left side, and I'm not gonna go through every piece. EPS chart is really, I think, very telling.
You can see the four-year CAGR. GAAP EPS up 41%. You can see back in 2018. I really look at core EPS, roughly $0.33 and core EPS. You can see there's a nice trend line, $0.47, $0.54, $0.81, and then last year, $0.98. So the story there is good. The trend is good. As we page, we kind of look over to the next chart. You can see net income and return on assets. I really look at core net income, core ROA. Let's look at core net income. You can see roughly $27.4 million back in 2018. We're up to roughly $69.6 million in 2022. So a really good story there.
If we look at ROA and core ROA specifically, roughly 52 basis points in 2018, and up to almost 1%, 96 basis points in 2022 for this fiscal year. You can see at the bottom, you know, good trajectory on net income, EPS and return on assets. You know, had a big increase over last year. I think, you know, certainly the story's good. We're positioned for the future. You know, it's really been a good fiscal year. Next slide, please. Take a look at deposit composition. We'll start on the left. One of the things I think that's interesting that will probably be changing, you'll know more about is our quarter-to-date cost of deposits in the June quarter were 32 basis points. That's relatively low.
That's gonna change, folks. You're gonna see that throughout the industry. But if we dig down closer, look at the mix of deposits, you can see the largest category is non-interest bearing at 38.6%. One of the most important categories, which is in orange on the top right, is we call it NIB, non-interest bearing checking. I think at 11.2% it's a little low, but that is the gold standard. That's the goal to grow over the next couple of years. That will help improve profitability and so forth. That's one of our target areas. Savings, 3.2%. That's been pretty solid over the years. The last two pieces are retail CDs at 19% wholesale CDs.
If you look at the growth trends, again, similar story as the income trends. You can see our deposits roughly $4 billion in 2018. We're at $5.8 billion in 2022. As you can see, that orange box, which relates to that 11.2%, that is growing nicely at $2.54 million. You can also see the interest-bearing DDA has grown to almost $2.2 billion, so we've seen a nice trend. Pardon me. The only other trend that looks a little different is that we've seen a little decline in savings from this year to last year. I really truthfully think that's a function of the last quarter with the Fed moving rates so much. There's been some money that's moved out of savings into higher yielding deposits. That's not uncommon.
You saw an increase in wholesale CDs. That's really just a move. We had some advances that matured, and it was financially cheaper to go out to the market and get wholesale CDs as opposed to FHLB advances, so that's what we did. It's really not nothing more than a financial strategy. As you can see, you know, one of the things we have a note here, 25% of the branches over a three-year period have been consolidated, and we'll talk a little bit more about technology in the future slides. We on an ongoing basis look at that. Our average branch size has grown tremendously. It was probably close to $80 million, I would suggest. Back in the day, it was a lot smaller.
You know, as you can see here, it's an important fact and an important strategy for my retail folks is we grew non-maturity deposits 10%. That deposit base has changed radically over the last year thanks to my retail folks. We're gonna continue to push on that because that's another key to improving earnings and profitability. Next slide, please. Loan portfolio, we'll take a look at it. On the left, you have composition. As you can see, the biggest piece of the composition is multifamily, about 44.3%. The next biggest piece is one-four family at 30%. Then we have, I think it's CRE, which is really, probably, commercial real estate like retail as well as mixed use properties is at 18%.
The two smaller pieces that we're really focused on growing, as you can see, 2.6% is construction lending, which we've been doing, and we've had some relative success over the last year. We're gonna continue to do that in this environment going forward a little more cautiously because of a lot of things going on. Also C&I, you know, we really hope to see that C&I piece grow. It's at 3.2%. We think that's gonna grow over the next couple of years nicely. If you look at LTVs on our real estate portfolio, you can see from top to bottom residential loans average LTV about 62%, relatively low. Multifamily at 64%, that's relatively low. CRE at 54% is really low from a CRE perspective. Construction is solid at 61%.
Home equity is at 46%. All in all, in a $5.2 billion portfolio, 61% LTV is really solid. I will note that I believe last year we were at 60%, so it really hasn't really moved that much. We're hovering around the low 61%-62% range over the last couple years. That's really just kind of how we approach lending, and our credit folks really focus on that. Geographic distribution. This is a great pie chart. You can see roughly 36% of our business is in the city, but the predominant amount is in New Jersey, about 55%. And the other category is 5.1% is in Pennsylvania.
I think you're gonna see some more growth outside the New York market and Pennsylvania, maybe a little in the future down in the Delaware, down in the Maryland markets, maybe a little bit into Connecticut. We're gonna kind of diversify that portfolio a little bit. Overall, solid net loan growth of about 11% this year. You know, the focus is really to change the mix of the assets. Next slide, please. Asset quality. This is a great chart. You can look at our charge-off ratios. You can see somewhere around three basis points in 2018. It kind of bounces around two or three basis points, a little higher in 2022 at seven basis points. Overall, our average charge-offs are relatively low.
I think we really run a low-risk model, and that's why our charge-offs are relatively low. Take a look at non-performing loans on the lower left-hand corner of that circle kind of pie chart-ish looking thing. You can see, you know, we have roughly $70 million in non-performing loans. You can see the biggest piece is the CRE piece at $31 million, and the second biggest piece, multi at $26 million. Finally, there's a bigger chunk of residential. I think over the coming months you'll continue to see that trend, quarters trend down. You know, we've had a lot of resolution on recently on some note and loan sales and some REO properties that we're trying to get back and resolve.
If you kind of think about that and look at the top right-hand corner of the chart, you can see, I believe, you know, NPAs for us at 1.19% is relatively high. I think it's peaked. I think you're gonna see that come down over the coming quarters. You know, that's really a trend line that I think is important. Allowance for credit losses. You can see our ACL kind of peaked at 1.19% in 2021, and it's kind of more normalized down into the 8%-ish range by the end of 2022. On our balance sheet. Next slide, please. This is one of my favorite slides in the deck. You know, I talked in my letter to the shareholders about technology, the importance of technology.
You hear a lot about it throughout the industry. You're starting to hear a lot about it in the news. These are some of the key technology partners we have. I'm gonna highlight a couple that I think are really important to think about. I think the first one is Verafin, which is our AML, BSA/AML platform. It is, it uses artificial intelligence. I would probably tell you that is probably the best platform out there. We've gained so many efficiencies from it. You know, we can continue to grow the bank and not have to add as much staff in those areas because the product Verafin is so efficient. It uses AI, which really is phenomenal. Another box that I wanna make a few comments on is just to the right of that.
Those two items, the Encompass and Abrigo, are both loan origination systems for us. Encompass handles our mortgage banking and one-family residential loan origination. It's been around a while. It's automated. It's really, really a great product. We've been using it probably beyond what most people use it in terms of the capabilities. We even have a text, as you can see in the corner, mortgage messaging. We have a text component introduced into it where people who, you know, are getting a residential loan from us can text the people in our origination area and all the other areas to find out how their loan is doing, where it is, you know, how long will it take, and communicate directly through text.
We've seen a lot of clients have been really interested in using it as a way to find out what's going on with their loan, and we've had a lot of positive feedback. The other LO system is Abrigo. We're in the throes of standing that up. I think we're very, very close, and that's where our commercial real estate and C&I SBA business can. That is really exciting. I think that will improve our turn times in those areas. A couple others. ZSuite. I've talked about that a number of times in shareholder letters. That's the first real FinTech partnership where we did some R&D, and we helped them develop some products.
The product we've used predominantly is their ZRent, but they have a ZEscrow product that we help them develop, and we hope to bring in some very low-cost core deposits. With that, our treasury management group is working with our lenders both on the rent, ZRent, as well as on the ZEscrow products with local attorneys to offer that product. It's a phenomenal product. No one in the country has it other than about four or five banks. Couple other items there that are important. Ncontracts, that is our compliance management system. Again, that is, in my mind, very similar to Verafin in that we can continue to grow. It's a very efficient product. It's very automated, and it is a great product to help us grow without adding a lot of G&A expense. Other one that I wanted to mention.
Oh, two more. Q2, and I've talked about this, that is our new digital platform. We are in the throes of trying to stand that up. Hopefully, we can get that done sooner or later to replace some of our mobile products that we feel are not up to snuff. Q2 is a phenomenal platform, and I think our clients will really appreciate it. It is state-of-the-art, and they're on the cutting edge from a digital perspective. The last piece that doesn't get a lot of talk, and I don't know if I talked about it in my shareholder letter, we use something called Power Automate, and it is a robotic process automation platform. This is something that we use to automate all kinds of processes. You name it, we have been using it in many areas of, through the bank.
I think you're gonna hear more about it from other banks because it pretty much eliminates manual processes. A great example would be putting a loan on our platform. It can automate uploading a loan, and there's no manual adding a loan to the system. It's automated. It reduces human error, and it just speeds up closing and turnaround time. Next slide. M&A history. This slide we've talked about a number of times. I will tell you that right now, M&A in my mind is really not something we're looking at. I mean, the challenges out there in terms of the economy as well as, you know, we've seen a lot of deals where the interest rate marks on the deals have created tremendous dilution, which is a challenge.
You know, we've really focused on low premium deals, complementary businesses and contiguous markets and cultural compatibility. I think the thing we focused on was limiting dilution and limiting earnback periods. I think in this environment and where currency sits, especially our currency, I don't see us doing acquisitions right now in this current time. Next slide, please. ESG, this is exciting. We published our first ESG report last year. I believe we also published our second ESG report last night. You know, it's an exciting time. We're really focused on ESG. It's an important part of every company's focus in this day and age. Obviously, ESG, environment, sustainability, climate, risk management, key areas, cyber, community reinvestment, affordable housing, human capital initiatives, and diversity, equity, all these things are important.
I will make the statement that we are really focused on diversity and inclusion. It is a core corporate principle, and I think going forward, you're gonna see some interesting things from a diversity standpoint. Yeah. Next slide, please. I'm gonna hand this over to Keith Suchodolski, our Chief Financial Officer. Keith's gonna do the financials update for the first quarter of 2023. Go ahead, Keith.
Thanks, Craig. Next slide, please. All right, I'll just briefly touch on our fiscal Q1 results, which were released this morning. The overarching story this quarter continues to be one of strong balance sheet growth, which I'll cover in a little more detail in just a moment. On the earnings front, after-tax net income for the quarter was $16.5 million or $0.25 per share. That did include $2.1 million of life insurance payments, which arose from our bank-owned life insurance program. We did experience some margin compression this quarter, which was really attributable to a more competitive deposit rate environment. Craig had touched on that in his presentation. You know, certainly the industry has been impacted by the rapid movement in rates by Fed, and then that will be felt on deposit costs going forward.
As I noted earlier, quarterly balance sheet growth is very strong. Total assets are now $7.9 billion. Total loans were up $238 million for the quarter or 18% annualized. Total deposits were up $246 million or 17% annualized. I'm sorry. Next slide, please. Looking at that growth trajectory, really just strong numbers there. On top of it, we're seeing some significant improvement in our asset quality metrics. Net charge-offs were de minimis 1 basis point, while all the non-performing asset ratios continue to improve with NPA assets trending down below 1% as of Q1. Next slide, please.
I will open it up to questions to the folks on the line if there are any questions.
No questions yet, sir Craig.
Okay, folks, there are no questions. We'll go to the voting results. Inspector has completed her count and will now report the certificate and report of inspector of election.
Good morning. The report confirms that a quorum is and has been in attendance at the annual meeting for all purposes. The report also shows that each director received more than a plurality of the votes cast. The proposal to ratify the appointment of Crowe LLP as the independent registered public accounting firm for the company for the year ending June 30th, 2023, received the affirmative vote of at least a majority of the votes of the shares cast. The advisory non-binding proposal to approve executive compensation as described in the proxy statement received the affirmative vote of at least a majority of the shares cast. Accordingly, each of the four directors has been elected. The proposal to ratify the appointment of Crowe LLP has been approved, and the company has received advisory approval of its executive compensation as described in the proxy statement.
Certificate and report of inspector of election has been accepted and approved and will be attached to the minutes of the annual meeting. On behalf of the directors and officers of Kearny Financial Corp. I would like to thank all of you for participating in today's meeting and for your interest you have shown in the affairs of the company.