Kearny Financial Corp. Reports $6.6 Million Net Income for December Quarter, Significant Recovery from Previous Year

Kearny Financial Corp. reported a net income of $6.6 million, or $0.10 per diluted share, for the quarter ended December 31, 2024, a significant recovery from a net loss of $13.8 million, or $0.22 per diluted share, in the same quarter of the previous year. The increase in profitability was attributed to a rise in non-interest income and a decrease in both income tax expense and the provision for credit losses, despite a decline in net interest income. For the six months ended December 31, 2024, the company recorded a net income of $12.7 million, compared to a net loss of $4.0 million for the same period in 2023.

Total assets increased by $47.9 million to $7.73 billion as of December 31, 2024, driven primarily by growth in cash and cash equivalents and net loans receivable, which rose to $5.75 billion, up from $5.69 billion at the end of June 2024. The company’s investment securities available for sale decreased by $54.6 million to $1.02 billion, largely due to principal repayments. The allowance for credit losses slightly decreased to $44.5 million, reflecting a provision of $215,000 for the six months ended December 31, 2024, primarily driven by loan growth.

Kearny Financial Corp. saw a notable increase in total deposits, which rose by $512.9 million, or 9.9%, to $5.67 billion. This growth was attributed to a shift from Federal Home Loan Bank (FHLB) advances to brokered certificates of deposits, as well as an increase in deposits from the company's branch network and digital channels. The company’s borrowings decreased by $450.8 million to $1.26 billion, reflecting a reduction in FHLB and other borrowings.

In terms of operational metrics, the company reported a net interest margin of 1.82% for the quarter, down from 1.94% in the prior year, primarily due to increased costs of interest-bearing liabilities. The provision for credit losses decreased significantly, indicating improved credit quality. The company also noted a decrease in nonperforming assets, which fell to $37.7 million, or 0.49% of total assets, from $39.9 million, or 0.52% of total assets, at the end of June 2024.

Looking ahead, Kearny Financial Corp. remains focused on maintaining its status as a well-capitalized institution while navigating the challenges posed by changing interest rates and market conditions. The company continues to evaluate its strategies for growth and risk management, particularly in light of the evolving economic landscape.