The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.11 per share, payable on May 20, 2026, to stockholders of record as of May 6, 2026.
Craig L. Montanaro, President and Chief Executive Officer, commented, "We are pleased to report continued momentum in our core earnings this quarter, highlighted by our sixth consecutive quarter of net interest margin expansion. Quarter-over-quarter, net interest margin increased seven basis points as net interest income grew 3%. These results reflect the ongoing favorable repricing and remixing of our loan portfolio which, along with improving funding dynamics, positions us well for continued earnings momentum in the periods ahead."
Mr. Montanaro continued, "During the quarter, we made strategic investments to strengthen our deposit franchise. We expanded our Corporate Banking team with the addition of four high-powered deposit-focused relationship officers who will accelerate our growth in relationship‑based middle-market commercial deposits. In parallel, we formed a new Specialty Deposits team specifically focused on select high-value deposit verticals in order to further diversify our funding sources."
Mr. Montanaro concluded, "Our partnership with The Lab Consulting, a management consulting firm engaged to support process improvement and operational efficiency initiatives, is now well underway, and we are encouraged by the early momentum of this initiative. The opportunities identified to streamline processes, enhance automation, and improve the client experience support our commitment to operational excellence and scalable growth. Collectively, these actions position us well to continue delivering sustainable earnings improvement and long‑term shareholder value."
Third Quarter Highlights
Pre-tax, pre-provision net revenue increased 5.5% to $13.0 million, or $0.21 per diluted share, reflecting ongoing strengthening of core earnings.
Net interest margin expanded by seven basis points to 2.21%, extending the momentum of margin improvement for the sixth consecutive quarter.
Continued advancing the loan portfolio diversification strategy by growing commercial business, construction, and home equity loans by 18.5%, 14.3% and 4.0%, respectively, while strategically reducing multifamily mortgage exposure.
Tangible book value per share improved $0.09, or 0.9%, to $10.02.
Balance Sheet
Total assets were $7.61 billion at March 31, 2026, a decrease of $13.2 million, or 0.2%, from December 31, 2025.
Investment securities totaled $1.09 billion at March 31, 2026, a decrease of $19.3 million, or 1.7%, from December 31, 2025.
Loans receivable totaled $5.78 billion at March 31, 2026, an increase of $25.8 million, or 0.4%, from December 31, 2025, primarily reflecting increases in commercial and industrial ("C&I") and construction loans, partially offset by a decrease in multifamily mortgage loans, which reflects our ongoing strategic remix of the portfolio.
Deposits were $5.73 billion at March 31, 2026, an increase of $17.5 million, or 0.3%, from December 31, 2025.
Borrowings were $1.06 billion at March 31, 2026, a decrease of $35.0 million, or 3.2%, from December 31, 2025, reflecting reductions in overnight borrowings, partially offset by an increase in Federal Home Loan Bank ("FHLB") advances.
At March 31, 2026, the Company maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.45 billion, representing 32.2% of total assets.
Earnings
Net Interest Income and Net Interest Margin
Net interest margin expanded by seven basis points to 2.21% for the quarter ended March 31, 2026. The increase for the quarter was primarily driven by lower costs and average balances on interest-bearing liabilities, partially offset by lower average yields on interest-earning assets.
For the quarter ended March 31, 2026, net interest income increased $1.3 million to $39.2 million from $38.0 million for the quarter ended December 31, 2025. Included in net interest income for the quarters ended March 31, 2026 and December 31, 2025, respectively, was purchase accounting accretion of $552,000 and $494,000, and loan prepayment penalty income of $422,000 and $544,000.
Non-Interest Income
For the quarter ended March 31, 2026, non-interest income increased $523,000, or 9.4%, to $6.1 million from $5.6 million for the quarter ended December 31, 2025, primarily driven by a non-recurring pre-tax gain of $1.0 million on the sale of properties held for sale in the current period.
Fees and service charges decreased $373,000, or 28.8%, to $922,000 for the quarter ended March 31, 2026 from $1.3 million for the quarter ended December 31, 2025. The decrease was primarily driven by the absence of $245,000 in loan related fee income associated with the payoff of a single construction loan recorded in the prior period.
Electronic banking fees and charges decreased $84,000, or 17.8%, to $389,000 for the quarter ended March 31, 2026 from $473,000 for the quarter ended December 31, 2025, primarily driven by lower income from interchange fees.
Non-Interest Expense
For the quarter ended March 31, 2026, non-interest expense increased $1.1 million, or 3.6%, to $32.3 million from $31.2 million for the quarter ended December 31, 2025, primarily driven by increases in salary and benefits, net occupancy, and advertising, partially offset by decreases in other expense.
Salary and benefits expense increased $943,000 to $19.3 million for the quarter ended March 31, 2026 from $18.4 million for the quarter ended December 31, 2025, primarily driven by an increase in payroll taxes and employee benefits associated with the start of a new calendar year and a non-recurring severance charge of $205,000 recorded in the current period.
Net occupancy expense of premises increased $375,000 to $3.3 million for the quarter ended March 31, 2026 from $2.9 million for the quarter ended December 31, 2025, driven by seasonally higher snow removal expenses of $527,000 recorded in the current period.
Advertising and marketing expense increased $253,000 to $665,000 for the quarter ended March 31, 2026 from $412,000 for the quarter ended December 31, 2025, primarily driven by higher advertising expenses across various formats.
Other expense decreased $377,000 to $3.5 million for the quarter March 31, 2026 from $3.8 million for the quarter ended December 31, 2025, primarily driven by the absence of non-recurring professional fees incurred in the prior period associated with the Company's partnership with The Lab Consulting and a decline in fraud losses in the current period. Changes in the other components of non-interest expense between comparative periods reflected normal operating fluctuations within those line items.
Income Taxes
Income tax expense totaled $2.5 million for the quarter ended March 31, 2026 compared to $2.3 million for the quarter ended December 31, 2025, resulting in an effective tax rate of 19.8% in each respective period.
Asset Quality
The balance of non-performing assets increased $1.1 million to $52.4 million, or 0.69% of total assets, at March 31, 2026 from $51.3 million, or 0.67% of total assets, at December 31, 2025.
Net charge-offs totaled $626,000, or 0.04% of average loans, on an annualized basis, for the quarter ended March 31, 2026, compared to $669,000, or 0.05% of average loans, on an annualized basis, for the quarter ended December 31, 2025.
For the quarter ended March 31, 2026, the Company recorded a provision for credit losses of $391,000, compared to $567,000 for the quarter ended December 31, 2025. The provision for credit loss expense for the quarter ended March 31, 2026 was primarily due to loan growth and charge-offs associated with certain individually evaluated loans, partially offset by quantitative risk factor adjustments.
Allowance for credit losses ("ACL") was $44.7 million, or 0.77% of total loans, at March 31, 2026, a decrease of $235,000 from $45.0 million, or 0.78% of total loans, at December 31, 2025. The decrease in the ACL from December 31, 2025 was primarily driven by loan charge-offs, partially offset by a provision for credit losses, as noted above.
Capital
For the quarter ended March 31, 2026, book value per share increased $0.09, or 0.8%, to $11.79 while tangible book value per share increased $0.09, or 0.9%, to $10.02.
At March 31, 2026, total stockholders' equity included after-tax net unrealized losses on securities available for sale of $68.7 million, partially offset by after-tax unrealized gains on derivatives of $2.7 million. After-tax net unrecognized losses on securities held to maturity of $8.2 million were not reflected in total stockholders' equity.
At March 31, 2026, the Company's tangible equity to tangible assets ratio equaled 8.65%. Additionally, the regulatory capital ratios of both the Company and the Bank continued to be in excess of all applicable regulatory requirements as of March 31, 2026.
This earnings release should be read in conjunction with Kearny Financial Corp.'s Q3 2026 Investor Presentation, a copy of which is available through the Investor Relations link located at the bottom of the page of our website at www.kearnybank.com and via a Current Report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.
Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.
Category: Earnings
Linked-Quarter Comparative Financial Analysis
Kearny Financial Corp.Consolidated Balance Sheets(Unaudited)
(Dollars and Shares in Thousands,Except Per Share Data)
March 31,2026
December 31,2025
Varianceor Change
Varianceor Change Pct.
Assets
Cash and cash equivalents
$
123,836
$
147,340
$
(23,504
)
-16.0
%
Securities available for sale
983,325
1,000,397
(17,072
)
-1.7
%
Securities held to maturity
110,581
112,800
(2,219
)
-2.0
%
Loans held-for-sale
12,183
8,786
3,397
38.7
%
Loans receivable
5,779,181
5,753,393
25,788
0.4
%
Less: allowance for credit losses on loans
(44,723
)
(44,958
)
(235
)
-0.5
%
Net loans receivable
5,734,458
5,708,435
26,023
0.5
%
Premises and equipment
41,896
42,559
(663
)
-1.6
%
Federal Home Loan Bank stock
55,737
57,212
(1,475
)
-2.6
%
Accrued interest receivable
28,304
27,420
884
3.2
%
Goodwill
113,525
113,525
—
—
%
Core deposit intangible
1,080
1,198
(118
)
-9.8
%
Bank owned life insurance
312,050
309,404
2,646
0.9
%
Deferred income taxes, net
50,961
51,617
(656
)
-1.3
%
Other assets
39,720
40,185
(465
)
-1.2
%
Total assets
$
7,607,656
$
7,620,878
$
(13,222
)
-0.2
%
Liabilities
Deposits:
Non-interest-bearing
$
631,506
$
627,180
$
4,326
0.7
%
Interest-bearing
5,097,576
5,084,370
13,206
0.3
%
Total deposits
5,729,082
5,711,550
17,532
0.3
%
Borrowings
1,060,000
1,095,000
(35,000
)
-3.2
%
Advance payments by borrowers for taxes
19,317
18,474
843
4.6
%
Other liabilities
36,225
38,458
(2,233
)
-5.8
%
Total liabilities
6,844,624
6,863,482
(18,858
)
-0.3
%
Stockholders' Equity
Common stock
648
648
—
—
%
Paid-in capital
495,442
494,959
483
0.1
%
Retained earnings
349,881
346,749
3,132
0.9
%
Unearned ESOP shares
(17,511
)
(17,997
)
486
2.7
%
Accumulated other comprehensive loss
(65,428
)
(66,963
)
1,535
2.3
%
Total stockholders' equity
763,032
757,396
5,636
0.7
%
Total liabilities and stockholders' equity
$
7,607,656
$
7,620,878
$
(13,222
)
-0.2
%
Consolidated capital ratios
Equity to assets
10.03
%
9.94
%
0.09
%
Tangible equity to tangible assets (1)
8.65
%
8.56
%
0.09
%
Share data
Outstanding shares
64,739
64,739
—
—
%
Book value per share
$
11.79
$
11.70
$
0.09
0.8
%
Tangible book value per share (2)
$
10.02
$
9.93
$
0.09
0.9
%
_________________________
(1)
Tangible equity equals total stockholders' equity reduced by goodwill and core deposit intangible assets. Tangible assets equals total assets reduced by goodwill and core deposit intangible assets.
(2)
Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.
Kearny Financial Corp.Consolidated Statements of Income(Unaudited)
(Dollars and Shares in Thousands,Except Per Share Data)
Three Months Ended
Varianceor Change
Varianceor Change Pct.
March 31,2026
December 31,2025
Interest income
Loans
$
66,310
$
67,410
$
(1,100
)
-1.6
%
Taxable investment securities
11,425
11,623
(198
)
-1.7
%
Tax-exempt investment securities
34
35
(1
)
-2.9
%
Other interest-earning assets
1,400
1,584
(184
)
-11.6
%
Total interest income
79,169
80,652
(1,483
)
-1.8
%
Interest expense
Deposits
31,045
33,148
(2,103
)
-6.3
%
Borrowings
8,888
9,535
(647
)
-6.8
%
Total interest expense
39,933
42,683
(2,750
)
-6.4
%
Net interest income
39,236
37,969
1,267
3.3
%
Provision for credit losses
391
567
(176
)
-31.0
%
Net interest income after provision for credit losses
38,845
37,402
1,443
3.9
%
Non-interest income
Fees and service charges
922
1,295
(373
)
-28.8
%
Gain on sale of loans
193
224
(31
)
-13.8
%
Income from bank owned life insurance
2,646
2,710
(64
)
-2.4
%
Electronic banking fees and charges
389
473
(84
)
-17.8
%
Other income
1,944
869
1,075
123.7
%
Total non-interest income
6,094
5,571
523
9.4
%
Non-interest expense
Salaries and employee benefits
19,316
18,373
943
5.1
%
Net occupancy expense of premises
3,263
2,888
375
13.0
%
Equipment and systems
3,975
4,007
(32
)
-0.8
%
Advertising and marketing
665
412
253
61.4
%
Federal deposit insurance premium
1,302
1,357
(55
)
-4.1
%
Directors' compensation
307
306
1
0.3
%
Other expense
3,471
3,848
(377
)
-9.8
%
Total non-interest expense
32,299
31,191
1,108
3.6
%
Income before income taxes
12,640
11,782
858
7.3
%
Income taxes
2,503
2,333
170
7.3
%
Net income
$
10,137
$
9,449
$
688
7.3
%
Net income per common share (EPS)
Basic
$
0.16
$
0.15
$
0.01
Diluted
$
0.16
$
0.15
$
0.01
Dividends declared
Cash dividends declared per common share
$
0.11
$
0.11
$
—
Cash dividends declared
$
7,005
$
6,987
$
18
Dividend payout ratio
69.1
%
73.9
%
-4.8
%
Weighted average number of common shares outstanding
Basic
62,908
62,858
50
Diluted
63,251
63,061
190
Kearny Financial Corp.Average Balance Sheet Data(Unaudited)
(Dollars in Thousands)
Three Months Ended
Varianceor Change
Varianceor Change Pct.
March 31,2026
December 31,2025
Assets
Interest-earning assets:
Loans receivable, including loans held for sale
$
5,785,095
$
5,778,680
$
6,415
0.1
%
Taxable investment securities
1,194,487
1,185,602
8,885
0.7
%
Tax-exempt investment securities
5,669
5,902
(233
)
-3.9
%
Other interest-earning assets
106,967
123,475
(16,508
)
-13.4
%
Total interest-earning assets
7,092,218
7,093,659
(1,441
)
-0.0
%
Non-interest-earning assets
455,725
455,752
(27
)
-0.0
%
Total assets
$
7,547,943
$
7,549,411
$
(1,468
)
-0.0
%
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand
$
2,402,177
$
2,385,397
$
16,780
0.7
%
Savings
761,090
759,247
1,843
0.2
%
Certificates of deposit (retail)
1,181,526
1,201,950
(20,424
)
-1.7
%
Certificates of deposit (brokered)
755,461
756,179
(718
)
-0.1
%
Total interest-bearing deposits
5,100,254
5,102,773
(2,519
)
-0.0
%
Borrowings:
Federal Home Loan Bank advances
861,445
998,760
(137,315
)
-13.7
%
Other borrowings
133,833
38,478
95,355
247.8
%
Total borrowings
995,278
1,037,238
(41,960
)
-4.0
%
Total interest-bearing liabilities
6,095,532
6,140,011
(44,479
)
-0.7
%
Non-interest-bearing liabilities:
Non-interest-bearing deposits
633,494
595,035
38,459
6.5
%
Other non-interest-bearing liabilities
59,644
59,447
197
0.3
%
Total non-interest-bearing liabilities
693,138
654,482
38,656
5.9
%
Total liabilities
6,788,670
6,794,493
(5,823
)
-0.1
%
Stockholders' equity
759,273
754,918
4,355
0.6
%
Total liabilities and stockholders' equity
$
7,547,943
$
7,549,411
$
(1,468
)
-0.0
%
Average interest-earning assets to average interest-bearing liabilities
116.35
%
115.53
%
0.82
%
0.7
%
Kearny Financial Corp.Performance Ratio Highlights(Unaudited)
Three Months Ended
Varianceor Change
March 31,2026
December 31,2025
Average yield on interest-earning assets:
Loans receivable, including loans held for sale
4.58
%
4.67
%
-0.09
%
Taxable investment securities
3.83
%
3.92
%
-0.09
%
Tax-exempt investment securities (1)
2.37
%
2.36
%
0.01
%
Other interest-earning assets
5.24
%
5.13
%
0.11
%
Total interest-earning assets
4.47
%
4.55
%
-0.08
%
Average cost of interest-bearing liabilities:
Deposits:
Interest-bearing demand
2.34
%
2.51
%
-0.17
%
Savings
1.26
%
1.40
%
-0.14
%
Certificates of deposit (retail)
3.20
%
3.45
%
-0.25
%
Certificates of deposit (brokered)
2.71
%
2.72
%
-0.01
%
Total interest-bearing deposits
2.43
%
2.60
%
-0.17
%
Borrowings:
Federal Home Loan Bank advances
3.56
%
3.66
%
-0.10
%
Other borrowings
3.66
%
4.13
%
-0.47
%
Total borrowings
3.57
%
3.68
%
-0.11
%
Total interest-bearing liabilities
2.62
%
2.78
%
-0.16
%
Interest rate spread (2)
1.85
%
1.77
%
0.08
%
Net interest margin (3)
2.21
%
2.14
%
0.07
%
Non-interest income to average assets (annualized)
0.32
%
0.30
%
0.02
%
Non-interest expense to average assets (annualized)
1.71
%
1.65
%
0.06
%
Efficiency ratio (4)
71.25
%
71.64
%
-0.39
%
