Kearny Financial Corp. reported a net income of $36.3 million for the fiscal year ending June 30, 2026, translating to earnings of $0.57 per diluted share. This marks a significant increase from the previous year's net income of $26.1 million, or $0.42 per diluted share. The rise in profitability was primarily driven by a $20.3 million increase in net interest income, which totaled $155.3 million, despite a slight decrease in interest income. The net interest margin improved to 2.18%, up from 1.88% in the prior year, reflecting higher loan yields and lower costs on interest-bearing liabilities.
Total assets for Kearny Financial decreased by $58.2 million, or 0.8%, to $7.68 billion as of June 30, 2026. This decline was largely attributed to reductions in cash and cash equivalents and investment securities, which were partially offset by an increase in net loans receivable, which rose by $63.1 million to $5.83 billion. The loan portfolio composition shifted, with notable growth in commercial and industrial loans and construction loans, while multi-family mortgage loans saw a decline due to repayments. The allowance for credit losses decreased to $45.5 million, or 0.77% of total loans, down from $46.2 million, reflecting net charge-offs of $2.4 million.
Kearny Financial's deposit base increased by $34.4 million, or 0.6%, to $5.71 billion, driven by growth in non-interest-bearing deposits. However, interest-bearing deposits saw a decrease, indicating a strategic shift in the company's deposit structure. The company also reported a decrease in borrowings, which fell by $106.5 million to $1.15 billion, primarily due to a reduction in Federal Home Loan Bank advances. The bank's capital position remained strong, with stockholders' equity increasing to $766.7 million, supported by retained earnings and comprehensive income.
Looking ahead, Kearny Financial aims to enhance its commercial banking franchise by expanding relationships with small and middle-market businesses. The company plans to leverage technology and digital innovation to improve operational efficiency and customer engagement. Management remains cautious about potential economic challenges, including interest rate fluctuations and market conditions, which could impact loan performance and overall financial results. The bank's strategic focus will continue to be on disciplined balance sheet management and maintaining strong capital and liquidity positions to support future growth.
About Kearny Financial Corp.
Kearny Financial Corp. is a Maryland-based holding company for Kearny Bank, a community bank serving New Jersey and New York. It offers retail and commercial banking services, including deposit products, mortgage and consumer loans, and investment securities. The bank emphasizes relationship banking, diversified loan portfolios, digital banking, and strong capital and liquidity positions to serve small and mid-sized businesses and local communities.
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