Kearny Financial Posts 40% Q1 Profit Jump and Declares Dividend

Kearny Financial Corp. reported net income of $10.0 million, or $0.16 per diluted share, for the quarter ended September 30, 2026, a 40.0% increase from the $7.2 million, or $0.11 per diluted share, recorded in the prior quarter. The holding company for Kearny Bank also confirmed a board decision to pay stockholders a $0.11 quarterly cash dividend. The payment is scheduled for November 18, 2026, to investors on the record as of November 4, 2026.

Craig L. Montanaro, President and Chief Executive Officer, stated that the results reflect ongoing execution of the strategic plan, solid loan and deposit growth, and disciplined expense management. While he noted that the net interest margin was impacted by lower prepayment-related income and the repricing of the final remaining COVID-era wholesale funding position, Montanaro indicated that underlying margin drivers remain intact. He added that ongoing loan repricing and balance sheet remixing are expected to support further margin expansion in future quarters.

The bank continued its strategic transformation by deepening commercial client relationships and expanding relationship-based deposit growth. During the quarter, Kearny Bank launched a dedicated Nonprofit and Independent Education Banking team to broaden access to relationship-based funding sources and diversify its deposit franchise. This initiative was part of a broader effort to reposition the balance sheet toward higher-yielding commercial and construction lending opportunities while reducing multifamily mortgage exposure.

Key financial metrics for the quarter included:

• Net income: $10.0 million ($0.16 per diluted share)
• Pre-tax, pre-provision net revenue (non-GAAP): $13.5 million ($0.21 per diluted share), up 14.0%
• Total loans growth: 7.2% on an annualized basis
• Total deposits growth: 8.7% on an annualized basis

Total assets reached $7.78 billion at September 30, 2026, an increase of $95.7 million, or 1.2%, from June 30, 2026. Loans receivable totaled $5.98 billion, up $105.1 million, or 1.8%, while deposits rose by $123.9 million, or 2.2%, to $5.83 billion. Investment securities decreased by $35.0 million to $1.04 billion, and borrowings declined by $15.0 million to $1.14 billion due to reductions in overnight borrowings.

Net interest margin was 2.23% for the quarter ended September 30, 2026, down three basis points from the prior quarter. This decrease occurred as higher asset yields were offset by the repricing of wholesale funding and declines in purchase accounting accretion and loan prepayment penalty income. Net interest income decreased by $294,000 to $40.1 million; however, excluding prepayment penalty income and purchase accounting accretion, net interest income increased by $132,000 from the prior period.

Non-interest expense fell by $2.1 million, or 6.1%, to $31.8 million, primarily driven by lower salary and benefits costs, advertising expenses, and equipment and systems fees. Salary and benefits expense decreased to $19.4 million, largely due to the absence of a non-recurring severance charge recorded in the prior period and a non-recurring decrease in stock-based compensation.

Non-performing assets increased by $3.2 million to $56.6 million, representing 0.73% of total assets at September 30, 2026, compared to $53.4 million, or 0.70% of total assets, at June 30, 2026.