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, 2005
                                     --------------
                                       OR

[ ]  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                             (I.R.S. Employer
incorporation or organization)                           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 is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes     No  X
                                               ---     ---

     The number of shares  outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: May 5, 2005.

          $0.10 par value common stock - 72,737,500 shares outstanding



<PAGE>
                     KEARNY FINANCIAL CORP. AND SUBSIDIARIES

                                      INDEX


<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                           Number
                                                                                                           ------
PART I - FINANCIAL INFORMATION
<S>                                                                                                         <C>
      Item 1:  Financial Statements

               Consolidated Statements of Financial Condition
               at March 31, 2005 (Unaudited) and June 30, 2004 (Audited)                                      1

               Consolidated Statements of Income for the Three Months and
               Nine Months Ended March 31, 2005 and 2004 (Unaudited)                                         2-3

               Consolidated Statements of Comprehensive Income for the Three
               Months and Nine Months Ended March 31, 2005 and 2004 (Unaudited)                               4

               Consolidated Statements of Cash Flows for the Nine Months
               Ended March 31, 2005 and 2004 (Unaudited)                                                     5-6

               Notes to Consolidated Financial Statements                                                     7

      Item 2:  Management's Discussion and Analysis of
               Financial Condition and Results of Operations                                                 8-16

      Item 3:  Quantitative and Qualitative Disclosure About Market Risk                                    17-18

      Item 4:  Controls and Procedures                                                                        19


PART II - OTHER INFORMATION                                                                                   20


SIGNATURES                                                                                                    21


</TABLE>




<PAGE>
                     KEARNY FINANCIAL CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
                 (In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
                                                                                 March 31,             June 30,
Assets                                                                             2005                  2004
------                                                                       ----------------     -----------------
                                                                                 (Unaudited)          (Audited)

<S>                                                                          <C>                  <C>
Cash and amounts due from depository institutions                            $        16,757      $         21,008
Interest-bearing deposits in other banks                                             147,835                18,480
                                                                             ----------------     -----------------

        Cash and cash equivalents                                                    164,592                39,488

Securities available for sale                                                         40,680                41,564
Investment securities held to maturity                                               450,270               435,870
Loans receivable, including net deferred loan costs of $779 and $758                 521,463               510,938
  Less: Allowance for loan losses                                                     (5,354)               (5,144)
                                                                             ----------------     -----------------
  Net loans receivable                                                               516,109               505,794
                                                                             ----------------     -----------------
Mortgage-backed securities held to maturity                                          727,628               771,353
Premises and equipment                                                                34,414                26,649
Federal Home Loan Bank of New York stock ("FHLB")                                     11,392                11,392
Interest receivable                                                                    8,899                 9,861
Goodwill                                                                              82,263                82,263
Other assets                                                                           9,748                12,284
                                                                             ----------------     -----------------

        Total assets                                                         $     2,045,995      $      1,936,518
                                                                             ================     =================

Liabilities and stockholders' equity

Liabilities

Deposits:
  Non-interest bearing                                                       $        55,770      $         55,377
  Interest bearing                                                                 1,395,254             1,482,133
                                                                             ----------------     -----------------

        Total deposits                                                             1,451,024             1,537,510

Advances from FHLB                                                                    81,826                94,234
Advance payments by borrowers for taxes                                                4,331                 4,224
Other liabilities                                                                      7,348                 7,045
                                                                             ----------------     -----------------

        Total liabilities                                                          1,544,529             1,643,013
                                                                             ----------------     -----------------

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;
  72,737,500 and 10,000 issued and outstanding, respectively                           7,274                     1
Paid in capital                                                                      207,820                   499
Retained earnings - substantially restricted                                         293,773               282,959
Unearned Employee Stock Ownership Plan ("ESOP") shares                               (17,457)            -
Accumulated other comprehensive income                                                10,056                10,046
                                                                             ----------------     -----------------

        Total stockholders' equity                                                   501,466               293,505
                                                                             ----------------     -----------------

        Total liabilities and stockholders' equity                           $     2,045,995      $      1,936,518
                                                                             ================     =================
</TABLE>

See notes to consolidated financial statements.


                                       -1-
<PAGE>

                     KEARNY FINANCIAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                        ---------------------------------
           (In Thousands, Except Share and Per Share Data, Unaudited)
<TABLE>
<CAPTION>

                                         Three Months Ended     Nine Months Ended
                                              March 31,              March 31,
                                        --------------------   -------------------
                                          2005       2004        2005        2004
                                        --------    --------   --------   --------
<S>                                     <C>         <C>        <C>        <C>
Interest income:
    Loans                               $  7,188    $  7,211   $ 21,641   $ 22,101
    Mortgage-backed securities             8,342       8,718     25,289     25,152
    Investment and available for sale
      securities                           4,123       3,811     12,217     10,663
    Other interest earning assets          1,425          40      1,670      1,184
                                        --------    --------   --------   --------

        Total interest income             21,078      19,780     60,817     59,100
                                        --------    --------   --------   --------

Interest expense:
    Deposits                               6,739       6,622     19,037     21,864
    Borrowings                             1,025         975      3,004      3,089
                                        --------    --------   --------   --------

        Total interest expense             7,764       7,597     22,041     24,953
                                        --------    --------   --------   --------

Net interest income                       13,314      12,183     38,776     34,147

Provision for loan losses                   (110)       --            7       --
                                        --------    --------   --------   --------

Net interest income after provision
  for loan losses                         13,424      12,183     38,769     34,147
                                        --------    --------   --------   --------

Non-interest income:
    Fees and service charges                 190         185        538        541
    Miscellaneous                            302         218        858        655
                                        --------    --------   --------   --------

        Total non-interest income            492         403      1,396      1,196
                                        --------    --------   --------   --------

Non-interest expense:
    Salaries and employee benefits         5,165       4,241     15,159     12,430
    Net occupancy expense of
      premises                               928         718      2,298      1,920
    Equipment                              1,047         878      2,865      2,569
    Advertising                              244         178        820        542
    Federal insurance premium                137         143        416        442
    Amortization of intangible assets        159         159        477        477
    Directors' fees                          223         208        670        619
    Merger related expenses                 --          --         --          592
    Miscellaneous                            908         785      2,662      2,555
                                        --------    --------   --------   --------

        Total non-interest expense         8,811       7,310     25,367     22,146
                                        --------    --------   --------   --------

Income before income taxes                 5,105       5,276     14,798     13,197
Income taxes                               1,279       1,583      3,984      3,959
                                        --------    --------   --------   --------

Net income                              $  3,826    $  3,693   $ 10,814   $  9,238
                                        ========    ========   ========   ========

Net income per common share:
    Basic                               $   0.05    $ 369.30   $   0.15   $ 923.80
    Diluted                                 0.05      369.30       0.15     923.80
</TABLE>

See notes to consolidated financial statements.


                                       -2-
<PAGE>

                     KEARNY FINANCIAL CORP. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME (Cont'd)
           (In Thousands, Except Share and Per Share Data, Unaudited)

<TABLE>
<CAPTION>

                                         Three Months Ended     Nine Months Ended
                                              March 31,              March 31,
                                        --------------------   -------------------
                                          2005       2004        2005        2004
                                        --------    --------   --------   --------
<S>                                     <C>         <C>        <C>        <C>
Weighted average number of
  Common shares outstanding:
Basic                                  70,991,800   10,000    70,991,800   10,000
Diluted                                70,991,800   10,000    70,991,800   10,000
</TABLE>


See notes to consolidated financial statements.


                                       -3-

<PAGE>
                     KEARNY FINANCIAL CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 -----------------------------------------------
                            (In Thousands, Unaudited)
<TABLE>
<CAPTION>
                                                           Three Months Ended      Nine Months Ended
                                                                March 31,              March 31,
                                                          --------------------    --------------------
                                                            2005        2004        2005        2004
                                                          --------    --------    --------    --------
<S>                                                       <C>         <C>         <C>         <C>
Net income                                                $  3,826    $  3,693    $ 10,814    $  9,238
                                                          --------    --------    --------    --------

Other comprehensive income (loss),
 net of income taxes:
    Gross unrealized holdings gain
      (loss) on securities available
      for sale                                              (2,668)        549          14       2,039
    Deferred income tax benefit
      (expense)                                                934        (192)         (4)       (713)
                                                          --------    --------    --------    --------

Other comprehensive income (loss)                           (1,734)        357          10       1,326
                                                          --------    --------    --------    --------

Comprehensive income                                      $  2,092    $  4,050    $ 10,824    $ 10,564
                                                          ========    ========    ========    ========
</TABLE>


See notes to consolidated financial statements.


                                       -4-
<PAGE>

                     KEARNY FINANCIAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                            (In Thousands, Unaudited)
<TABLE>
<CAPTION>
                                                                                          Nine Months Ended
                                                                                              March 31,
                                                                                ----------------- --- ----------------
                                                                                      2005                 2004
                                                                                -----------------     ----------------
<S>                                                                             <C>                  <C>
Cash flows from operating activities:
    Net income                                                                  $         10,814      $         9,238
    Adjustments to reconcile net income to net cash provided by operating
      activities:
        Depreciation and amortization of premises and equipment                            1,080                1,055
        Net amortization of premiums, discounts and loan fees and costs                      762                1,562
        Deferred income taxes                                                             (1,532)                (921)
        Amortization of intangible assets                                                    477                  477
        Provision for loan losses                                                              7             -
        Realized gain on sale of securities available for sale                               (71)            -
        Decrease (increase) in interest receivable                                           962                (338)
        Decrease (increase) in other assets                                                2,058                  425
        Increase (decrease) in interest payable                                             (19)                (342)
        Increase (decrease) in other liabilities                                           1,849                (319)
                                                                                -----------------     ----------------

            Net cash provided by operating activities                                     16,387               10,837
                                                                                -----------------     ----------------

Cash flows from investing activities:
    Purchases of securities available for sale                                             (143)                (113)
    Proceeds from sale of securities available for sale                                    1,115             -
    Purchases of investment securities held to maturity                                 (33,202)            (240,290)
    Proceeds from calls and maturities of investment securities held to
      maturity                                                                            15,386              103,758
    Proceeds from repayments of investment securities held to maturity                     3,420                2,756
    Purchase of loans                                                                  -                     (14,262)
    Net (increase) decrease in loans receivable                                         (10,406)               21,629
    Purchases of mortgage-backed securities held to maturity                            (88,138)            (345,122)
    Principal repayments on mortgage-backed securities held to maturity                  131,174              269,567
    Proceeds from sale of premises and equipment                                               3             -
    Additions to premises and equipment                                                  (8,845)              (6,365)
    Redemption (purchase) of FHLB Stock                                                -                        2,987
                                                                                -----------------     ----------------

            Net cash provided by (used in) investing activities                           10,364            (205,455)
                                                                                -----------------     ----------------

Cash flows from financing activities:
    Net (decrease) increase in deposits                                                 (46,072)             (55,966)
    Repayment of FHLB advances                                                             (407)              (1,383)
    Net change in short-term borrowings from FHLB                                       (12,000)              (5,000)
    Increase (decrease) in advance payments by borrowers for taxes                           107                 (55)
    Proceeds from the issuance of common stock                                           156,725             -
                                                                                -----------------     ----------------

            Net cash (used in) provided by financing activities                           98,353             (62,404)
                                                                                -----------------     ----------------

Net (decrease) increase in cash and cash equivalents                                     125,104            (257,022)
Cash and cash equivalents - beginning                                                     39,488              325,657
                                                                                -----------------     ----------------

Cash and cash equivalents - ending                                              $        164,592      $        68,635
                                                                                =================     ================
</TABLE>

See notes to consolidated financial statements.


                                       -5-
<PAGE>

                     KEARNY FINANCIAL CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont'd)
                 ----------------------------------------------
                            (In Thousands, Unaudited)
<TABLE>
<CAPTION>

                                                                                          Nine Months Ended
                                                                                              March 31,
                                                                                --------------------------------------
                                                                                      2005                 2004
                                                                                -----------------     ----------------
<S>                                                                             <C>                   <C>
Supplemental disclosures of cash flows information:
 Cash paid during the year for:
        Income taxes, net of refunds                                            $          1,688      $         2,945
                                                                                =================     ================

        Interest                                                                $         22,060      $        25,295
                                                                                =================     ================

Supplemental disclosure of non-cash transactions:
    Purchase of minority shares of West Essex                                   $      -              $        17,336
                                                                                =================     ================
    Goodwill - West Essex acquisition                                           $      -              $        50,517
                                                                                =================     ================
    Deposit for acquisition of West Essex Bancorp, Inc.                         $      -              $       (67,853)
                                                                                =================     ================
</TABLE>

See notes to consolidated financial statements.


                                       -6-
<PAGE>

                     KEARNY FINANCIAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------


1.  PRINCIPLES OF CONSOLIDATION
-------------------------------

The consolidated  financial  statements include the accounts of Kearny Financial
Corp. (the "Company"), its wholly owned subsidiary,  Kearny Federal Savings Bank
(the "Bank"), and the Bank's wholly owned subsidiaries,  KFS Financial Services,
Inc.,  West Essex  Insurance  Agency and Kearny  Federal  Investment  Corp.  The
Company  conducts  its  business   principally  through  the  Bank.   Management
eliminated  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,  results of operations  and cash flows in conformity  with  generally
accepted  accounting  principles.  However,  in the opinion of  management,  all
adjustments (consisting of normal adjustments) necessary for a fair presentation
of the  consolidated  financial  statements  have been included.  The results of
operations  for the three and nine month periods  ended March 31, 2005,  are not
necessarily indicative of the results that may be expected for the entire fiscal
year.


3.  NET INCOME PER COMMON SHARE
-------------------------------

Weighted average number of common shares actually outstanding provides the basis
for  calculation  of basic net income per common  share.  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,  provides the basis for
calculating  diluted  net  income per share.  Though the  effective  date of the
Company's  initial public  offering was February 23, 2005, the  presentation  of
basic and  diluted  net  income  per share  assumes  the  effective  date of the
transaction  was July 1, 2004.  The  calculation of basic and diluted net income
per share includes the 30% of the outstanding  shares sold to the public as well
as the 70% of the  outstanding  shares  held by Kearny MHC and  excludes  Kearny
Federal Savings Bank Employee Stock Ownership Plan (the "ESOP") shares that have
not been  previously  allocated to participants or have not been committed to be
released for allocation to participants.


                                      -7-
<PAGE>

                                     ITEM 2.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


FORWARD-LOOKING STATEMENTS

This Form 10-Q may include certain  forward-looking  statements based on current
management  expectations.  The actual  results of Kearny  Financial  Corp.  (the
"Company") could differ materially from those management  expectations.  Factors
that could cause  future  results to vary from current  management  expectations
include,  but are not limited to, general economic  conditions,  legislative and
regulatory  changes,  monetary  and fiscal  policies of the federal  government,
changes in tax policies,  rates and regulations of federal,  state and local tax
authorities.  Additional  potential  factors  include changes in interest rates,
deposit flows, the cost of funds, demand for loan products, demand for financial
services,  competition,  changes  in the  quality  or  composition  of loan  and
investment portfolios of Kearny Federal Savings Bank, the Company's wholly-owned
subsidiary,  (the "Bank"). Other factors that could cause future results to vary
from current management  expectations include changes in accounting  principles,
policies  or  guidelines,  and other  economic,  competitive,  governmental  and
technological  factors affecting the Company's  operations,  markets,  products,
services and prices.  Further  description of the risks and uncertainties to the
business are included in the  Company's  other filings with the  Securities  and
Exchange Commission.

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2005 AND JUNE 30, 2004

Total assets increased by $109.5 million, or 5.6%, to $2.05 billion at March 31,
2005 from $1.94  billion at June 30, 2004,  due  primarily  to a $125.1  million
increase in cash and cash equivalents. Between June 30, 2004 and March 31, 2005,
investment  securities  held to  maturity,  loans  receivable,  and premises and
equipment increased $14.4 million, $10.3 million and $7.8 million, respectively,
while  mortgage-backed  securities  held to maturity  decreased  $43.8  million.
During the nine-month period, there was an $86.5 million net outflow of deposits
and $12.4 million reduction in Federal Home Loan Bank advances.

Cash and cash equivalents increased $125.1 million, or 316.7%, to $164.6 million
at March 31, 2005 from $39.5 million at June 30, 2004. Management attributes the
increase to the  Company's  initial  public  offering  completed on February 23,
2005. Net of offering expenses,  subscriptions  funded from deposit  withdrawals
and funding  the  purchase  of Kearny  Federal  Savings  Bank's  Employee  Stock
Ownership Plan (the "ESOP") shares, cash received was $156.7 million.

Investment  securities  held to maturity  increased  $14.4 million,  or 3.3%, to
$450.3  million at March 31,  2005 from  $435.9  million at June 30,  2004.  The
increase came primarily in the tax-exempt  category,  reflecting the purchase of
bank-qualified municipal bonds during the nine-month period.

Loans  receivable,  net of  deferred  fees and the  allowance  for loan  losses,
increased  $10.3  million,  or 2.0%, to $516.1  million at March 31, 2005,  from
$505.8  million at June 30, 2004.  The increase  came  primarily in  one-to-four
family mortgage loans, particularly first mortgages and home equity loans. There
was also an increase in non-residential mortgage loans. Decreases in home equity
lines of credit,  commercial  business loans and  construction  loans  partially
offset the aforementioned increases.

Mortgage-backed  securities  decreased  by $43.8  million,  or 5.7%,  to  $727.6
million at March 31, 2005,  from $771.4  million at June 30, 2004.  The decrease
resulted from monthly principal repayments.  We used this cash flow to help fund
deposit outflow and reduce Federal Home Loan Bank advances.

Premises and equipment  increased  $7.8 million,  or 29.3%,  to $34.4 million at
March 31, 2005, from $26.6 million at June 30, 2004.  Management  attributes the
increase  primarily  to  the  cost  of  completing  the  Bank's   administrative
headquarters building in Fairfield, New Jersey.

                                      -8-
<PAGE>

 Deposits,  which decreased $86.5 million, or 5.6%, to $1.45 billion at March
31, 2005 from $1.54 billion at June 30, 2004 were the most significant  cause of
the decrease in total liabilities.  Initial stock offering  subscriptions funded
from deposit withdrawals were $40.4 million.  Other factors  contributing to the
decrease was the runoff of  certificates  of deposit due to lower interest rates
paid, as well as a movement by customers to alternative investment opportunities
in the marketplace.

Federal Home Loan Bank (the "FHLB") advances decreased $12.4 million,  or 13.2%,
to $81.8 million at March 31, 2005 from $94.2 million at June 30, 2004 primarily
resulting from maturing advances that were not renewed.

Stockholders'  equity increased  $208.0 million,  or 70.9%, to $501.5 million at
March 31, 2005 from $293.5 million at June 30, 2004. The increase  resulted from
the  addition  of $214.6  million in  capital  from the  recent  initial  public
offering  and net income of $10.8  million for the nine  months  ended March 31,
2005, partially offset by unearned ESOP shares of $17.5 million.

COMPARISON  OF  OPERATING  RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND
2004

GENERAL.  Net income for the three months ended March 31, 2005 was $3.8 million,
an increase of $133,000,  or 3.6%,  from $3.7 million for the three months ended
March 31,  2004.  The  increase in net income  resulted  from an increase in net
interest  income,  which was  sufficient  to offset an increase in salaries  and
employee benefits and an increase in the cost of office occupancy and equipment.

NET INTEREST INCOME. Net interest income increased by $1.1 million,  or 9.0%, to
$13.3  million for the three months ended March 31, 2005 from $12.2  million for
the three months ended March 31, 2004.  Despite  decreases in net interest  rate
spread and margin  and the ratio of average  interest-earning  assets to average
interest-bearing  liabilities  remaining flat,  year-over-year,  the substantial
increase in cash during the initial  public  offering  subscription  period this
quarter  contributed  to the  improvement of net interest  income,  for the 2005
period as compared to the 2004 period.

The net interest rate spread decreased three basis points to 2.50% for the three
months  ended  March 31,  2005 from 2.53% for the three  months  ended March 31,
2004. The net interest rate margin decreased five basis points to 2.69% compared
with 2.74%.

The net interest rate spread  decreased due to a 19 basis point  decrease in the
yield on average  interest-earning  assets to 4.26% for the three months  ending
March 31, 2005,  from 4.45% for the three months  ending March 31, 2004.  During
the same period,  the cost of  interest-bearing  liabilities  decreased 16 basis
points to 1.76% for the three months  ending March 31, 2005,  from 1.92% for the
three months ending March 31, 2004, not enough to offset the declining  yield on
average interest-earning assets.

The  ratio  of  average  interest-earning  assets  to  average  interest-bearing
liabilities  remained virtually unchanged,  year-over-year,  contributing to the
decline in the net interest rate margin.  The ratio of average  interest-earning
assets to average interest-bearing liabilities decreased to 112.3% for the three
months  ended March 31,  2005,  from 112.4% for the three months ended March 31,
2004.

INTEREST INCOME. Total interest income increased $1.3 million, or 6.6%, to $21.1
million for the three months ended March 31,  2005,  from $19.8  million for the
three months ended March 31, 2004.  Average  interest-earning  assets  increased
$202.1 million,  or 11.3%, to $1.98 billion for the three months ended March 31,
2005, from $1.78 billion for the three months ended March 31, 2004. The increase
in average  interest-earning assets more than offset the aforementioned 19 basis
points  decrease  in  yield,  resulting  in  an  increase  in  interest  income.
Management  attributes the increase in interest income mainly to the income from
the investment of stock subscriptions  received during the quarter in short-term
assets.

                                       -9-
<PAGE>

Interest  income  on  loans  receivable  was  flat,   decreasing  only  $23,000,
year-over-year.  Interest income on loans was $7.2 million for both periods. The
average balance of loans receivable  increased $10.3 million, or 2.1%, to $510.9
million for the three months ended March 31, 2005,  from $500.6  million for the
three months ended March 31, 2004.  However,  a decrease in the average yield on
loans  receivable to 5.63% for the three months ended March 31, 2005, from 5.76%
for the three months  ended March 31,  2004,  offset the increase in the average
balance of loans outstanding.  A continuing  marketing effort contributed to the
increase in average loans receivable.  The lower yield reflects  generally lower
interest rates on originations  and downward rate adjustments on adjustable rate
and floating rate loans.

Interest  income  on  mortgage-backed  securities  held  to  maturity  decreased
$376,000,  or 4.3%,  to $8.3  million for the three  months ended March 31, 2005
from $8.7 million for the three  months ended March 31, 2004.  There was a $13.9
million, or 1.9%, decrease in the average balance of mortgage-backed  securities
held to maturity to $724.6  million  for the three  months  ended March 31, 2005
from $738.5 million for the three months ended March 31, 2004. In addition,  the
average yield on mortgage-backed  securities held to maturity decreased to 4.60%
for the three  months ended March 31, 2005 from 4.72% for the three months ended
March  31,  2004.  The  decrease  in  the  average  balance  of  mortgage-backed
securities  held to maturity  resulted from a partial  redeployment of principal
and interest  payments into cash and cash  equivalents to meet liquidity  needs.
The  decrease in yield  resulted  from  principal  repayments  received on older
higher yielding securities while new purchases occurred in a lower interest rate
environment.

Interest income on investment  securities  increased $312,000,  or 8.2%, to $4.1
million for the three  months  ended  March 31,  2005 from $3.8  million for the
three  months ended March 31, 2004.  The increase  resulted  from an increase of
$48.7  million,  or 11.1%,  in the average  balance of investment  securities to
$488.3 million for the three months ended March 31, 2005 from $439.6 million for
the three  months ended March 31,  2004,  partially  offset by a decrease in the
average  yield on  investment  securities,  to 3.38% from 3.47%.  The  increased
average balance  reflects the redeployment of cash and cash  equivalents,  which
increased because of repayments on mortgage-backed  securities held to maturity.
The lower yield  resulted from  principal  repayments  on older higher  yielding
securities while new purchases occurred in a lower interest rate environment.

Interest income on other  interest-earning  assets increased to $1.4 million for
the three  months  ended March 31, 2005 from  $40,000 for the three months ended
March 31, 2004. This was a result of a $156.9 million, or 159.3% increase in the
average balance of other interest-earning assets to $255.4 million for the three
months ended March 31, 2005 from $98.5  million for the three months ended March
31,  2004.  The  average  balance  of  interest-earning  deposits,  the  primary
component of other interest-earning  assets,  increased $211.3 million to $244.0
million for the three  months  ended  March 31, 2005 from $32.7  million for the
three months ended March 31, 2004 primarily due to stock subscriptions  received
during the initial public offering subscription period this quarter. There was a
207 basis point increase in the average yield on other  interest-earning  assets
to 2.23% for the three  months  ended March 31,  2005,  from 0.16% for the three
months ended March 31, 2004, due to rising short-term interest rates.

Interest Expense.  Total interest expense increased  $167,000,  or 2.2%, to $7.8
million for the three  months  ended  March 31,  2005 from $7.6  million for the
three months  ended March 31, 2004.  The  increase  resulted  primarily  from an
increase in the average balance of interest-bearing liabilities, which more than
offset a  decrease  in the cost of  interest-bearing  liabilities.  The  average
balance of interest-bearing  liabilities  increased $181.2 million, or 11.5%, to
$1.76  billion for the three months ended March 31, 2005 from $1.58  billion for
the three months ended March 31,  2004.  There was a 16 basis point  decrease in
the average cost of  interest-bearing  liabilities to 1.76% for the three months
ended March 31, 2005 from 1.92% for the three months ended March 31, 2004.

                                      -10-
<PAGE>

Interest expense on deposits  increased  $117,000,  or 1.8%, to $6.7 million for
the three  months  ended March 31, 2005 from $6.6  million for the three  months
ended March 31, 2004.  The increase  resulted  primarily from an increase in the
average balance of interest-bearing  deposits, which more than offset a decrease
in the average cost. The average balance of interest-bearing  deposits increased
$163.4 million,  or 10.8%, to $1.67 billion from $1.51 billion.  Included in the
three months ended March 31, 2005 is interest expense attributed to subscription
funds  received  during the initial public  offering  subscription  period.  The
average cost of interest-bearing deposits decreased 14 basis points to 1.61% for
the three  months  ended  March 31, 2005 from 1.75% for the three  months  ended
March 31, 2004.

Interest expense on Federal Home Loan Bank advances increased $50,000,  or 5.1%,
to $1.0 million for the three months ended March 31, 2005 from  $975,000 for the
three months ended March 31, 2004. The average balance  increased $17.8 million,
or 25.2%,  to $88.5 million for the three months ended March 31, 2005 from $70.7
million for the three  months  ended March 31,  2004.  A decrease in the average
cost to 4.63% for the three months ended March 31, 2005 from 5.52% for the three
months ended March 31, 2004 was not enough to offset the increase in the average
balance.   The  increase  in  the  average  balance   resulted  from  additional
borrowings,  but at a lower cost due to their relatively short remaining term to
maturity.

PROVISION FOR LOAN LOSSES.  There was an $110,000 reduction in the provision for
loan losses  during the three months  ended March 31, 2005.  During the quarter,
the Bank received a $213,000  recovery for a previously  charged-off loan. Total
loans  increased to $520.7 million at March 31, 2005 from $510.2 million at June
30, 2004.  Non-performing  loans were $2.4 million,  or 0.47%, of total loans at
March 31, 2005,  as compared to $2.3 million,  or 0.46%,  of total loans at June
30,  2004.  The  allowance  for loan  losses  as a  percentage  of  gross  loans
outstanding  was 1.04% at March 31, 2005 and 1.01% at June 30, 2004,  reflecting
balances of $5.4 million and $5.1 million, respectively.

Management  assesses the  allowance  for loan losses  monthly.  Management  uses
available  information to recognize  losses on loans,  however,  additional loan
loss  provisions  may be necessary  in the future,  based on changes in economic
conditions.  In  addition,  regulatory  agencies,  as an integral  part of their
examination  process,  periodically review the allowance for loan losses and may
require  us to  recognize  additional  provisions  based  on their  judgment  of
information  available to them at the time of their  examination.  We maintained
the allowance  for loan losses as of March 31, 2005 at a level that  represented
management's  best  estimate of losses in the loan  portfolio to the extent they
were both probable and reasonably estimable.

NON-INTEREST  INCOME.  Total non-interest income increased $89,000, or 22.1%, to
$492,000 for the three months ended March 31, 2005, compared to $403,000 for the
three  months ended March 31, 2004.  The  increase was  primarily  the result of
increased fee income from the Bank's retail branch network.

NON-INTEREST  EXPENSE.  Total  non-interest  expense increased $1.5 million,  or
20.5%,  to $8.8  million  for the three  months  ended  March 31, 2005 from $7.3
million  for the three  months  ended March 31,  2004.  The  increase  consisted
primarily of an increase in salaries  and  employee  benefits and an increase in
the cost of office occupancy and equipment.

Salaries and employee benefits increased $924,000, or 22.0%, to $5.2 million for
the three months  ended March 31,  2005,  compared to $4.2 million for the three
months  ended  March 31,  2004.  The  increase  was the result of normal  salary
increases,  increased  benefit costs and hiring of additional staff. The pension
plan expense for the three months ended March 31, 2005 was $635,000, as compared
to $394,000 for the three  months  ended March 31, 2004.  The increase is due to
lower  than  expected  investment  returns on plan  assets  and higher  required
contributions resulting from the incremental effect of normal salary increases.


                                      -11-
<PAGE>

Net occupancy expense of premises and equipment expense increased  $379,000,  or
23.7%,  to $2.0  million  for the three  months  ended  March 31, 2005 from $1.6
million for the three  months  ended March 31,  2004.  This  increase  primarily
reflects  normal  increases  in the  cost of  office  occupancy  and  equipment,
including  operating  expenses  associated  with  our  new  53,000  square  foot
administrative headquarters building in Fairfield, New Jersey.

All other elements of  non-interest  expense  totaled $1.7 million for the three
months  ended  March 31,  2005;  an increase of  $198,000,  or 13.2%,  from $1.5
million for the three months ended March 31, 2004.

PROVISION FOR INCOME TAXES.  The provision for income taxes decreased  $304,000,
or 19.0%,  to $1.3  million for the three  months ended March 31, 2005 from $1.6
million for the three  months  ended March 31, 2004.  The  effective  income tax
rates were 25.1% for the three  months ended March 31, 2005 as compared to 30.0%
for the three months ended March 31, 2004. Management attributes the decrease in
income  tax  expense  to  tax  management  strategies,  including  investing  in
bank-qualified tax-exempt municipal bonds and transferring investment securities
held to maturity and mortgage-backed securities held to maturity to a New Jersey
investment  company,  Kearny Federal Investment Corp., a wholly owned subsidiary
of the Bank, which commenced operations in July 2004.

COMPARISON  OF  OPERATING  RESULTS FOR THE NINE MONTHS  ENDED MARCH 31, 2005 AND
2004

GENERAL.  Net income for the nine months ended March 31, 2005 was $10.8 million,
an increase of $1.6  million,  or 17.4%,  from $9.2  million for the nine months
ended March 31, 2004.  The increase in net income  resulted  from an increase in
net interest income,  which was sufficient to offset an increase in salaries and
employee benefits and an increase in the cost of occupancy and equipment.

Net Interest Income. Net interest income increased by $4.7 million, or 13.8%, to
$38.8  million for the nine months  ended March 31, 2005 from $34.1  million for
the nine months ended March 31, 2004. The net interest rate spread  increased to
2.60% for the nine  months  ended  March 31, 2005 from 2.30% for the nine months
ended March 31, 2004. The net interest rate margin  increased 29 basis points to
2.82% compared with 2.53%.

The net interest rate spread improved primarily due to a 26 basis point decrease
in the cost of average interest-bearing liabilities to 1.82% for the nine months
ending March 31, 2005, from 2.08% for the nine months ending March 31, 2004. The
net interest rate spread also improved due to a four basis point increase in the
yield on average interest-earning assets to 4.42% from 4.38%.

The increase in the net interest margin is largely reflective of the increase in
the  ratio  of  average  interest-earning  assets  to  average  interest-bearing
liabilities to 113.6% for the nine months ended March 31, 2005,  from 112.2% for
the nine months ended March 31, 2004.

INTEREST INCOME. Total interest income increased $1.7 million, or 2.9%, to $60.8
million for the nine months  ended March 31,  2005,  from $59.1  million for the
nine months  ended March 31, 2004.  Average  interest-earning  assets  increased
$37.8  million,  or 2.1%,  to  $1.84  billion  from  $1.80  billion.  Management
attributes the increase in interest income primarily to the reinvestment of cash
and cash equivalents in higher yielding loans receivable,  investment securities
held to maturity and mortgage-backed  securities held to maturity.  In addition,
the substantial increase in cash during the initial public offering subscription
period  contributed  to the  improvement of net interest  income,  due to higher
short-term rates during the three months ended March 31, 2005.

                                      -12-

<PAGE>

Interest  income  on loans  receivable  decreased  $460,000,  or 2.1%,  to $21.6
million for the nine months  ended March 31,  2005,  from $22.1  million for the
nine  months  ended March 31,  2004.  The  average  balance of loans  receivable
increased  $13.0  million,  or 2.6%,  to $511.2  million  from  $498.2  million.
However, a decrease in the average yield on loans receivable to 5.64% from 5.92%
offset the increase in the average  balance of loans  outstanding.  A continuing
marketing effort  contributed to the increase in average loans  receivable.  The
lower yield reflects generally lower interest rates on originations and downward
rate adjustments on adjustable rate and floating rate loans.

Interest  income  on  mortgage-backed  securities  held  to  maturity  increased
$137,000,  or 0.5%,  to $25.3  million for the nine months  ended March 31, 2005
from $25.2  million for the nine months ended March 31, 2004.  This was a result
of a $33.9 million,  or 4.9%, increase in the average balance of mortgage-backed
securities held to maturity to $732.8 million from $698.9 million.  The increase
in the average  balance  more than offset the  decrease in the average  yield to
4.60%  from  4.80%.  The  increase  in the  average  balance  resulted  from the
redeployment of cash and cash  equivalents.  The decrease in yield resulted from
principal  repayments  received on older higher  yielding  securities  while new
purchases occurred in a lower interest rate environment.

Interest income on investment  securities  increased $1.5 million,  or 14.0%, to
$12.2  million for the nine months  ended March 31, 2005 from $10.7  million for
the nine months ended March 31, 2004. The increase  resulted from an increase of
$75.5  million,  or 18.4%,  in the average  balance of investment  securities to
$486.1 million from $410.6 million.  However, a decrease in the average yield on
investment  securities to 3.35% from 3.46% partially  offset the increase in the
average balance of investment securities. The increased average balance reflects
the  redeployment  of cash and cash  equivalents.  The lower yield resulted from
principal  repayments on older higher  yielding  securities  while new purchases
occurred in a lower interest rate environment.

Interest income on other  interest-earning  assets increased $486,000, or 41.0%,
to $1.7  million for the nine months  ended March 31, 2005 from $1.2 million for
the nine months  ended March 31, 2004.  There was a 127 basis point  increase in
the average yield on other interest-earning assets to 2.10% from 0.83%. An $84.8
million,  or 44.4%  decrease  in the average  balance of other  interest-earning
assets to $106.2  million from $191.0 million  partially  offset the increase in
average yield.  The decrease in the average balance was due to the use of assets
in these categories to invest in higher yielding securities, partially offset by
the substantial increase in cash during the initial public offering subscription
period. The increase in average yield was due to higher short-term rates.

INTEREST EXPENSE.  Total interest expense  decreased $3.0 million,  or 12.0%, to
$22.0  million for the nine months  ended March 31, 2005 from $25.0  million for
the nine months ended March 31, 2004.  The decrease  resulted  primarily  from a
decrease  in the  average  cost of  interest-bearing  liabilities  to 1.82% from
2.08%. The average balance of  interest-bearing  liabilities  increased to $1.62
billion for the nine months  ended March 31, 2005 as compared to $1.60  billion.
Average cost decreased due to lower market interest rates prevailing during most
of the period.

Interest expense on deposits decreased $2.9 million,  or 13.2%, to $19.0 million
for the nine months ended March 31, 2005 from $21.9  million for the nine months
ended March 31, 2004. Interest expense on deposits declined due to a decrease in
the average cost of  interest-bearing  deposits to 1.66% from 1.91%. The average
balance of interest-bearing deposits remained unchanged at $1.53 billion for the
nine months  ended March 31,  2005 and $1.53  billion for the nine months  ended
March 31,  2004.  Included in the nine  months  ended March 31, 2005 is interest
expense  attributed to  subscription  funds received  during the public offering
subscription   period,   which  also  contributed  to  the  average  balance  of
interest-bearing deposits remaining flat, year-over-year.

                                      -13-
<PAGE>

Interest expense on Federal Home Loan Bank advances decreased $85,000,  or 2.7%,
to $3.0  million for the nine months  ended March 31, 2005 from $3.1 million for
the nine  months  ended March 31,  2004.  The average  balance  increased  $12.5
million,  or 17.0%, to $85.9 million from $73.4 million.  However, a decrease in
the average cost to 4.67% from 5.61% offset the increase in the average balance.
The increase in the average balance resulted from additional borrowings,  but at
a lower cost due to their relatively short remaining term to maturity.

PROVISION  FOR LOAN LOSSES.  There was a $7,000  provision  for loan losses made
during the nine months ended March 31, 2005 as compared to no  provision  during
the nine months ended March 31, 2004. Total loans increased to $520.7 million at
March 31, 2005 from $510.2 million at June 30, 2004.  Non-performing  loans were
$2.4  million,  or 0.47%,  of total loans at March 31, 2005, as compared to $2.3
million,  or 0.46%,  of total loans at June 30,  2004.  The  allowance  for loan
losses as a percentage  of gross loans  outstanding  was 1.04% at March 31, 2005
and  1.01%  at June 30,  2004,  reflecting  balances  of $5.4  million  and $5.1
million, respectively.

Management  assesses the  allowance  for loan losses  monthly.  Management  uses
available  information to recognize  losses on loans,  however,  additional loan
loss  provisions  may be  necessary  in the future  based on changes in economic
conditions.  In  addition,  regulatory  agencies,  as an integral  part of their
examination  process,  periodically review the allowance for loan losses and may
require  us to  recognize  additional  provisions  based  on their  judgment  of
information  available to them at the time of their  examination.  We maintained
the allowance  for loan losses as of March 31, 2005 at a level that  represented
management's  best  estimate of losses in the loan  portfolio to the extent they
were both probable and reasonably estimable.

NON-INTEREST INCOME.  Non-interest income increased $200,000,  or 16.7%, to $1.4
million for the nine months  ended March 31, 2005  compared to $1.2  million for
the nine months ended March 31, 2004. The increase was primarily the result of a
$71,000  gain from the sale of a  trust-preferred  security  and  increased  fee
income from the Bank's retail branch network. There was no such gain recorded in
the nine months ended March 31, 2004.

NON-INTEREST  EXPENSE.  Excluding merger related  expenses,  total  non-interest
expense  increased $3.8 million,  or 17.6%, to $25.4 million for the nine months
ended March 31,  2005,  from $21.6  million for the nine months  ended March 31,
2004. The increase  consisted  primarily of an increase in salaries and employee
benefits and an increase in the cost of office occupancy and equipment.

The merger related  expenses of $592,000  recorded  during the nine months ended
March 31,  2004  consisted  primarily  of fees due to  attorneys  and  financial
advisors.

Salaries  and employee  benefits  increased  $2.7  million,  or 21.8%,  to $15.2
million for the nine months ended March 31, 2005,  compared to $12.4 million for
the nine months  ended March 31,  2004.  The  increase  was the result of normal
salary  increases,  increased  benefit  costs and  hiring of  additional  staff,
including business development personnel.  The pension plan expense for the nine
months  ended March 31, 2005 was $2.2  million,  as compared to $1.2 million for
the nine months ended March 31, 2004. The increase is due to lower than expected
investment  returns on plan assets and higher required  contributions  resulting
from the incremental effect of normal salary increases.

Net occupancy expense of premises and equipment expense increased  $674,000,  or
15.0%,  to $5.2  million  for the nine  months  ended  March 31,  2005 from $4.5
million  for the nine months  ended  March 31,  2004.  This  increase  primarily
reflects  normal  increases  in the  cost of  office  occupancy  and  equipment,
including  operating  expenses  associated  with  our  new  53,000  square  foot
administrative headquarters building in Fairfield, New Jersey.

                                      -14-
<PAGE>

All other elements of  non-interest  expenses  totaled $5.0 million for the nine
months ended March 31, 2005; an increase of $410,000, or 8.9%, from $4.6 million
for the nine months ended March 31, 2004.

PROVISION FOR INCOME TAXES.  The provision for income taxes  remained  virtually
unchanged,  increasing  only $25,000,  at $4.0 million for the nine months ended
March 31, 2005 and $4.0 million for the nine months  ended March 31,  2004.  The
effective  income tax rates were 26.9% for the nine months  ended March 31, 2005
as  compared  to 30.0% for the nine  months  ended  March 31,  2004.  Management
attributes  the  decrease  in income tax expense to tax  management  strategies,
including   investing  in   bank-qualified   tax-exempt   municipal   bonds  and
transferring   investment   securities  held  to  maturity  and  mortgage-backed
securities held to maturity to a New Jersey investment  company,  Kearny Federal
Investment  Corp.,  a wholly  owned  subsidiary  of the  Bank,  which  commenced
operations in July 2004.

LIQUIDITY AND CAPITAL RESOURCES

The Bank is required to have enough investments that qualify as liquid assets in
order to maintain sufficient liquidity to ensure a safe operation. Liquidity may
increase or decrease  depending upon the  availability  of funds and comparative
yields on investments in relation to the return on loans. Historically, the Bank
has  maintained  liquid assets above levels  believed to be adequate to meet the
requirements of normal  operations,  including  potential deposit outflows.  The
Bank  reviews  cash  flow  projections  regularly  and  updates  them to  assure
maintenance of adequate liquidity.

The Bank's liquidity,  represented by cash and cash equivalents, is a product of
its operating, investing and financing activities.

The Bank's primary sources of funds are deposits, amortization,  prepayments and
maturities of mortgage-backed  securities and outstanding  loans,  maturities of
investment  securities and other short-term  investments and funds provided from
operations.  While  scheduled  payments  from  the  amortization  of  loans  and
mortgage-backed  securities  and maturing  investment  securities and short-term
investments are relatively predictable sources of funds, general interest rates,
economic  conditions and competition  greatly  influence deposit flows, loan and
mortgage-backed  securities  prepayments.  In addition,  the Bank invests excess
funds in short-term  interest-earning  assets,  which provide  liquidity to meet
lending requirements. The Bank also generates cash through borrowings.

Liquidity  management  is  both a  daily  and  long-term  function  of  business
management.   Management   generally  invests  excess  liquidity  in  short-term
investments such as overnight deposits or U.S. agency securities.  The Bank uses
its sources of funds  primarily  to meet  ongoing  commitments,  to pay maturing
certificates of deposit and savings withdrawals, to fund loan commitments and to
maintain its portfolio of mortgage-backed  securities and investment securities.
If the Bank  requires  funds  beyond its  ability to generate  them  internally,
borrowing  agreements  exist  with the  Federal  Home Loan Bank of New York (the
"FHLB")  which  provides  an  additional  source  of funds.  At March 31,  2005,
advances from the FHLB amounted to $81.8 million.

The Bank  anticipates  that it will have sufficient  funds available to meet its
current  loan  commitments.   At  March  31,  2005,  the  Bank  has  outstanding
commitments  to  originate  loans  of $51.4  million.  Certificates  of  deposit
scheduled  to  mature  in one year or less at March  31,  2005,  totaled  $598.1
million.  Management's  policy is to maintain  deposit  rates at levels that are
competitive  with other local financial  institutions.  Based on the competitive
rates and on  historical  experience,  management  believes  that a  significant
portion of maturing deposits will remain with the Bank.

Consistent  with  its  goals  to  operate  a  sound  and  profitable   financial
organization,   the  Bank   actively   seeks  to   maintain   its  status  as  a
well-capitalized  institution in accordance  with  regulatory  standards.  As of
March 31, 2005, Kearny Federal Savings Bank exceeded all capital requirements of
the Office of Thrift Supervision (the "OTS").

                                      -15-
<PAGE>

The following table sets forth the Bank's capital position at March 31, 2005, as
compared to the minimum regulatory capital requirements:
<TABLE>
<CAPTION>
                                                                  March 31, 2005 (Unaudited)
                                        -------------------------------------------------------------------------------
                                                                                                      To Be Well
                                                                                                  Capitalized Under
                                                                        Minimum Capital           Prompt Corrective
                                                 Actual                   Requirements            Action Provisions
                                        -------------------------    -----------------------    -----------------------
                                          Amount         Ratio        Amount        Ratio        Amount        Ratio
                                        -------------------------------------------------------------------------------
                                                                        (In Thousands)
<S>                                         <C>           <C>         <C>             <C>        <C>                <C>
Total Capital
  (to risk-weighted assets)                 419,443       61.17%      $ 54,856        8.00%     $ 68,571        10.00%

Tier 1 Capital
  (to risk-weighted assets)                 407,425       59.42%         -            -           41,142         6.00%

Core (Tier 1) Capital
  (to adjusted total assets)                407,425       20.93%        58,396        3.00%       97,327         5.00%

Tangible Capital
  (to adjusted total assets)                407,425       20.93%        29,198        1.50%        -             -

</TABLE>


                                      -16-
<PAGE>

                                     ITEM 3.
            QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
            ---------------------------------------------------------


QUALITATIVE  ANALYSIS.  The ability to maximize net  interest  income is largely
dependent upon the  achievement of a positive  interest rate spread  sustainable
during fluctuations in prevailing interest rates. Interest rate sensitivity is a
measure  of the  difference  between  amounts  of  interest-earning  assets  and
interest-bearing  liabilities,  which either  re-price or mature  within a given
period.  The  difference,  or the interest rate  re-pricing  "gap",  provides an
indication of the extent changes in interest  rates may affect an  institution's
interest  rate spread.  A positive  gap exists when the amount of  interest-rate
sensitive assets exceeds the amount of interest-rate sensitive liabilities,  and
a negative  gap exists when the amount of interest  rate  sensitive  liabilities
exceeds the amount of interest-rate sensitive assets. Generally, during a period
of rising  interest  rates,  a negative  gap  within  shorter  maturities  would
adversely  affect  net  interest  income,  while a positive  gap within  shorter
maturities would result in an increase in net interest  income.  During a period
of falling interest rates, a negative gap within shorter maturities would result
in an  increase  in net  interest  income  while a positive  gap within  shorter
maturities would result in a decrease in net interest income.

Because the Bank's interest-bearing liabilities, which mature or re-price within
short periods exceed its interest-earning  assets with similar  characteristics,
material and prolonged  increases in interest rates  generally  would  adversely
affect net interest income,  while material and prolonged  decreases in interest
rates generally would have a positive effect on net interest income.

The Bank's  Board of  Directors  established  an Interest  Rate Risk  Management
Committee comprised of members of the board and management.  The committee meets
quarterly to address management of the Bank's assets and liabilities,  including
review of its short  term  liquidity  position;  loan and  deposit  pricing  and
production volumes and alternative funding sources; current investments; average
lives,  durations and  re-pricing  frequencies  of loans and  securities;  and a
variety of other asset and liability  management  topics.  The committee reports
the results of its quarterly  review to the full board,  which adjusts  interest
rate risk policy and strategies, as it considers necessary and appropriate.

QUANTITATIVE  ANALYSIS.  Management  using the OTS model,  which  estimates  the
change in the Bank's net  portfolio  value (the  "NPV") over a range of interest
rate  scenarios,  monitors  the Bank's  interest  rate  sensitivity.  NPV is the
present value of expected cash flows from assets,  liabilities,  and off-balance
sheet contracts. OTS defines the NPV ratio, under any interest rate scenario, as
the NPV in that  scenario  divided  by the  market  value of  assets in the same
scenario.  The OTS produces its analysis based upon data submitted on the Bank's
quarterly  Thrift Financial  Reports.  The following table sets forth the Bank's
NPV as of  December  31,  2004,  the most  recent  date for  which  the Bank has
received the Bank's NPV as  calculated by the OTS.  Management  does not believe
that there has been a material  adverse change in the Bank's  interest rate risk
during the three months ended March 31, 2005.
<TABLE>
<CAPTION>
                                                              At December 31, 2004
                            ------------------------------------------------------------------------------------------
                                                                                  Net Portfolio Value
                                  Net Portfolio Value                       as % of Present Value of Assets
                            ---------------------------------     ----------------------------------------------------
                                                                                     Net Portfolio       Basis Point
   Changes in Rates           $ Amount           $ Change           % Change          Value Ratio          Change
-----------------------     --------------     --------------     --------------     --------------     --------------
                                                                 (In Thousands)
       <S>                        <C>               <C>                <C>             <C>                <C>
       +300 bp                    175,801          -134,325           -43%             10.11%            -626 bp
       +200 bp                    221,039          - 89,087           -29%             12.34%            -403 bp
       +100 bp                    265,519          - 44,607           -14%             14.41%            -196 bp
          0 bp                    310,126          -                  -                16.37%            -
       -100 bp                    335,193          + 25,067           +8%              17.38%            +102 bp
</TABLE>


                                      -17-
<PAGE>

Certain  shortcomings are inherent in the methodology used in the above interest
rate risk  measurements.  Modeling  changes in NPV require the making of certain
assumptions,  which may or may not reflect the manner in which actual yields and
costs respond to changes in market interest rates. In this regard, the NPV model
presented  assumes that the composition of the Bank's interest  sensitive assets
and liabilities  existing at the beginning of a period remains constant over the
measurement  period. The model also assumes that a particular change in interest
rates reflects  uniformly  across the yield curve  regardless of the duration to
maturity or re-pricing of specific assets and liabilities. Accordingly, although
the NPV measurements and net interest income models provide an indication of the
Bank's  interest  rate  risk  exposure  at a  particular  point  in  time,  such
measurements  are not  intended to and do not provide a precise  forecast of the
effect of changes in market interest rates on the Bank's net interest income and
will differ from actual results.


                                      -18-
<PAGE>

                                     ITEM 4.
                             CONTROLS AND PROCEDURES
                             -----------------------


As of the end of the period  covered by this report,  based on an  evaluation of
the Company's  disclosure  controls and procedures (as defined in Rule 13a-15(e)
under the  Securities  and  Exchange Act of 1934),  each of the Chief  Executive
Officer  and the Chief  Financial  Officer  of the  Company  concluded  that the
Company's   disclosure  controls  and  procedures  ensure  effective  recording,
processing,  summarization and reporting of information  requiring disclosure by
the  Company in its  Exchange  Act  reports,  within the  applicable  timeframes
specified by the SEC's rules and forms.

During the quarter under report,  there was no change in the Company's  internal
control  over  financial  reporting  (as  defined  in Rule  13a-15(f)  under the
Securities  and  Exchange  Act of 1934)  that  has  materially  affected,  or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.


                                      -19-
<PAGE>

                                     PART II


ITEM 1.        Legal Proceedings
               -----------------

               At March 31, 2005, neither the Company nor the Bank were involved
               in  any  pending  legal  proceedings  other  than  routine  legal
               proceedings  occurring in the ordinary course of business,  which
               involve  amounts in the  aggregate  believed by  management to be
               immaterial  to the  financial  condition  of the  Company and the
               Bank.

ITEM 2.        Unregistered Sales of Equity Securities and Use of Proceeds
               -----------------------------------------------------------

               Not applicable.

ITEM 3.        Defaults Upon Senior Securities
               -------------------------------

               Not applicable.

ITEM 4.        Submission of Matters to a Vote of Security Holders
               ---------------------------------------------------

               None.

ITEM 5.        Other Information
               -----------------

              None.

ITEM 6.        Exhibits
               --------
<TABLE>
<CAPTION>
               The following Exhibits are filed as part of this report:

               <S>    <C>
                 3.1     Charter of Kearny Financial Corp. (1)
                 3.2     By-laws of Kearny Financial Corp. (1)
                 4.0     Specimen Common Stock Certificate of Kearny Financial Corp. (1)
                10.1     Employment Agreement between Kearny Federal Savings Bank and John N. Hopkins (1)
                10.2     Employment Agreement between Kearny Federal Savings Bank and Allan Beardslee (1)
                10.3     Employment Agreement between Kearny Federal Savings Bank and Albert E.Gossweiler (1)
                10.4     Employment Agreement between Kearny Federal Savings Bank and Sharon Jones (1)
                10.5     Employment Agreement between Kearny Federal Savings Bank and William C. Ledgerwood (1)
                10.6     Employment Agreement between Kearny Federal Savings Bank and Erika Sacher (1)
                10.7     Employment Agreement between Kearny Federal Savings Bank and Patrick M. Joyce (1)
                10.8     Directors Consultation and Retirement Plan (1)
                10.9     Benefit Equalization Plan (1)
                10.10    Benefit Equalization Plan for Employee Stock Ownership Plan (1)
                11.0     Statements re: computation of per share earnings (Filed herewith).
                31.0     Rule 13a-14(a)/15d-14(a) Certifications (Filed herewith).
                32.0     Section 1350 Certifications (Filed herewith).

                ----------------------------------------------------------------
               (1)  Incorporated  by  reference  to  the  identically   numbered
                    exhibit to the Registrant's  Registration  Statement on Form
                    S-1 (File No. 333-118815).
</TABLE>

                                      -20-


<PAGE>

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on it  behalf  by the
undersigned thereunto duly authorized.


                                   KEARNY FINANCIAL CORP.

Date: May 10, 2005                 By: /s/ John N. Hopkins
      ------------                    ------------------------------------------
                                     John N. Hopkins
                                     President and Chief Executive Officer
                                     (Duly  authorized  officer  and  principal
                                     executive officer)



Date: May 10, 2005                By: /s/ Albert E. Gossweiler
      ------------                    ------------------------------------------
                                      Albert E. Gossweiler
                                      Senior Vice President and Chief  Financial
                                      Officer
                                      (Principal financial officer)



                                      -21-