Kearny Financial Corp.

What they do

Kearny Financial operates through its subsidiary Kearny Bank, offering a range of commercial and consumer banking products. Its loan portfolio is concentrated in multi-family and nonresidential mortgages, with growing commercial business, construction, and home equity lending. The company also manages an investment securities portfolio and originates residential mortgage loans for sale.

Revenue drivers

• Multi-family mortgage loans — Dollar volume of $2.56 billion at March 31, 2026, the largest loan segment, though deliberately being reduced.
• Nonresidential mortgage loans — Totaled $1.01 billion at March 31, 2026; grew by $25.9 million during the first nine months of fiscal 2026.
• Commercial business and construction loans — Commercial business loans of $201.3 million grew 61.4% in fiscal 2026; construction loans of $207.8 million grew 48.1%.
• Residential mortgage sales — Sold $86.1 million of residential mortgage loans in the nine months ended March 31, 2026, generating a $616,000 gain on sale.

Recent performance

For fiscal year ended June 30, 2026, the company reported net income of $36.3 million, or $0.57 per diluted share, up from $26.1 million, or $0.42, in fiscal 2025. Fourth quarter 2026 net income was $7.2 million, or $0.11 per share, impacted by $1.6 million discrete tax charge, $745,000 severance, and $262,000 OREO expense. Net interest margin expanded 30 basis points to 2.18%, and pre-tax, pre-provision EPS rose 47% to $0.78 per diluted share. Total assets were $7.68 billion at June 30, 2026, flat-to-slightly down year-over-year. Tangible book value per share increased 3.1% to $10.07.

Strategy

Management is executing a strategic remix of the balance sheet, growing commercial and industrial, construction, and home equity loans while reducing multi-family mortgage exposure. Investments include recruiting commercial banking talent, launching a Specialty Deposits team for 1031 exchange, escrow, trust and estate accounts, and advancing a company-wide operational excellence initiative using automation and AI. The retail banking organization was realigned to create a dedicated outside sales team for small business relationships. Management also emphasizes continued net interest margin expansion and 'tailwinds from low-coupon loan repricing.'

Risks

• Interest rate risk — Higher rates could reduce margins, yields, and the fair value of financial instruments, and increase defaults and prepayments on loans.
• Credit risk on commercial real estate — A large multi-family and nonresidential mortgage portfolio is sensitive to real estate market conditions and loan delinquencies.
• Tariffs and economic policies — Tariffs and other governmental policies could hurt general economic conditions in the company's market areas.
• Regulatory and capital requirements — Changes in laws or regulations affecting financial institutions could increase regulatory fees or capital requirements.

Outlook

Management expects to continue executing its strategic plan through organic growth, operational excellence, and enhanced client experience. They believe investments in talent, technology, and efficiency, along with low-coupon loan repricing tailwinds, position the company for sustainable earnings growth. The company declared a $0.11 per share quarterly dividend for August 2026.