Kearny Financial Corp., the holding company of Kearny Bank, reported net income of $7.2 million, or $0.11 per diluted share, for the quarter ended June 30, 2026, compared to $10.1 million, or $0.16 per diluted share, for the quarter ended March 31, 2026. For the fiscal year ended June 30, 2026, the company reported net income of $36.3 million, or $0.57 per diluted share, compared to $26.1 million, or $0.42 per diluted share, for the fiscal year ended June 30, 2025—a year-over-year increase of approximately 39%. The Board of Directors also declared a quarterly cash dividend of $0.11 per share, payable on August 26, 2026, to stockholders of record as of August 12, 2026.

Non-Recurring Items and Quarterly Impact

Net income for the quarter ended June 30, 2026 was affected by several non-recurring items. These included a $1.6 million discrete tax charge related to the establishment of a valuation allowance against a deferred tax asset for certain legacy stock-based compensation awards, $745,000 of severance expense associated with a strategic realignment of the retail banking organization, and $262,000 of other real estate owned (OREO) acquisition expense. Excluding these items, the adjusted net income for the quarter was $9.3 million.

The following table summarizes key income statement metrics for the two most recent quarters:

Fiscal Year 2026 Highlights

For the full fiscal year ended June 30, 2026, the company delivered meaningful improvement across key financial metrics:

• Net interest margin expanded 30 basis points to 2.18%, extending margin improvement for the second consecutive year.
• Pre-tax, pre-provision earnings per share increased 47.0% to $0.78 per diluted share.
• Net interest income increased $20.3 million, or 15.1%, to $155.3 million from $134.9 million for the year ended June 30, 2025.
• Non-interest income increased $3.8 million to $22.8 million from $19.1 million for the year ended June 30, 2025.
• Non-interest expense increased $8.4 million, or 6.9%, to $129.0 million from $120.6 million.
• Efficiency ratio improved by 5.90% to 72.43%.
• Tangible book value per share increased $0.30, or 3.1%, to $10.07.
• Income tax expense totaled $11.1 million for the year ended June 30, 2026, compared to $4.9 million for the year ended June 30, 2025.

The loan portfolio was strategically remixed during the fiscal year, with commercial and industrial loans growing 61.4%, construction loans growing 48.1%, and home equity loans growing 57.4%, while multifamily mortgage exposure was strategically reduced.

Balance Sheet Overview

The following table presents key balance sheet figures as of June 30, 2026, compared to the prior quarter and the prior fiscal year end:

Total assets were $7.68 billion at June 30, 2026, an increase of $74.5 million, or 1.0%, from March 31, 2026 and a decrease of $58.2 million, or 0.8%, from June 30, 2025. Deposits were $5.71 billion at June 30, 2026, reflecting the migration of $170.1 million from consumer interest-bearing products to non-interest bearing products. The company maintained available secured borrowing capacity with the Federal Home Loan Bank and the Federal Reserve Discount Window of $2.35 billion, representing 30.6% of total assets.

Asset Quality

Non-performing assets increased to $53.4 million, or 0.70% of total assets, at June 30, 2026, from $52.4 million, or 0.69% of total assets, at March 31, 2026, and from $45.6 million, or 0.59% of total assets, at June 30, 2025. Included in non-performing assets at June 30, 2026 were two foreclosed properties with an aggregate carrying value of $5.5 million that were reclassified from non-performing loans to OREO during the quarter.

Net charge-offs totaled $49,000, or less than 0.01% of average loans on an annualized basis, for the quarter ended June 30, 2026, compared to $626,000, or 0.04% of average loans, for the quarter ended March 31, 2026. For the year ended June 30, 2026, net charge-offs totaled $2.4 million, or 0.04% of average loans, compared to $1.1 million, or 0.02% of average loans, for the year ended June 30, 2025. The allowance for credit losses (ACL) was $45.5 million, or 0.77% of total loans, at June 30, 2026, compared to $46.2 million, or 0.79% of total loans, at June 30, 2025.

Capital Position and Strategic Achievements

At June 30, 2026, the company's tangible equity to tangible assets ratio equaled 8.62%, and the regulatory capital ratios of both the company and Kearny Bank were in excess of the levels required to be classified as "well-capitalized" under regulatory guidelines. Total stockholders' equity included after-tax net unrealized losses on securities available for sale of $68.5 million, partially offset by after-tax unrealized gains on derivatives of $4.8 million.

During fiscal year 2026, the company advanced several strategic initiatives:

• Expanded Corporate Banking capabilities through the recruitment of experienced relationship-focused bankers.
• Launched a Specialty Deposits team focused on 1031 exchange, escrow, trust, and estate account relationships, expanding commercial deposit capabilities and strengthening presence in key New York markets.
• Advanced a Company-wide operational excellence initiative focused on process improvement, adoption of automation and artificial intelligence, and enhancements of the client experience.
• Executed a strategic realignment of the retail banking organization to create a dedicated outside sales team focused on small business relationship development.

Piper Sandler analyst Adam Kroll has maintained an Overweight rating for Kearny Financial, raising the price target to $10.5 from the previous $9.5. The revised target suggests a positive outlook for the stock's future valuation.

Rating and Target Details

The research note underscores Piper Sandler's continued bullish stance on Kearny Financial. By increasing the price target, the firm signals an expectation of upside potential relative to the current market price.

Kearny Financial trades on the NASDAQ under the ticker symbol KRNY. The Overweight designation typically implies that the security is expected to outperform the average return of the analyst's coverage universe over a specific period.