Kearny Financial(US:KRNY)2025-10-23 12:43Financial Performance - Net income for Q1 FY 2026 was $9.5 million, or $0.15 per diluted share, a 39.7% increase from $6.8 million, or $0.11 per diluted share, in the previous quarter[1] - Earnings per share increased by 36.4% quarter-over-quarter, while pre-tax, pre-provision earnings per share rose by 18.8% to $0.19[6] - Net income increased by $2,737, or 40.4%, from $6,769 to $9,506[22] - Net income for Q3 2025 reached $9,506,000, representing a 40.7% increase from $6,769,000 in Q2 2025[37] - Adjusted net income for the same period was $9,152,000, compared to $6,769,000 in the prior quarter[46] Interest Income and Margin - Net interest margin expanded by 10 basis points to 2.10%, with net interest income increasing by 5.2% to $37.7 million[6] - Net interest income rose by $1,861, or 5.2%, from $35,843 to $37,704[22] - Net interest income after provision for credit losses rose to $37,786,000, up 10.1% from $34,058,000 in the previous quarter[37] - Average yield on interest-earning assets increased to 4.61% in September 2025 from 4.48% in June 2025, a change of 0.13%[26] - Net interest margin improved to 2.10% in September 2025, up from 2.00% in June 2025, reflecting a 0.10% increase[26] Asset and Liability Management - Total assets decreased by $92.4 million, or 1.2%, to $7.65 billion, while loans receivable decreased by $45.5 million, or 0.8%, to $5.77 billion[6] - Total assets decreased to $7,648,010 thousand in September 2025 from $7,740,450 thousand in June 2025, a decline of $92,440 thousand[29] - Total liabilities decreased by $99,682, or 1.4%, from $6,994,488 to $6,894,806[19] - Total liabilities were $6,874,176,000, a decrease from $6,894,695,000 in Q2 2025[39] Deposits and Loans - Deposits were $5.63 billion, down $43.3 million, or 0.8%, primarily due to declines in interest-bearing demand deposits and CDs[6] - Total deposits decreased to $5,631,882 thousand in September 2025 from $5,675,217 thousand in June 2025, a decrease of $43,335 thousand[29] - Total loans, excluding yield adjustments, decreased to $5,767,601 thousand from $5,814,539 thousand, a decline of 0.8% quarter-over-quarter[32] - Loans as a percentage of deposits remained stable at 101.7% for the current quarter[34] Non-Interest Income and Expense - Non-interest income increased by 17.2% to $5.8 million, driven by a non-recurring pre-tax gain of $749,000 on the sale of property[12] - Non-interest income increased to $5,847,000, a 17.2% rise compared to $4,991,000 in Q2 2025[37] - Non-interest expense rose by 2.5% to $31.7 million, mainly due to increases in salary and benefits and net occupancy costs[12] - Non-interest expense (GAAP) for the quarter was $31,666,000, an increase from $30,893,000 in the previous quarter[48] Asset Quality - The balance of non-performing assets increased to $64.6 million, or 0.84% of total assets, from $45.6 million, or 0.59%, in the previous quarter[17] - Nonperforming loans increased to $64,579 thousand, representing 1.12% of total loans, up from 0.78% in the previous quarter[32] - Total nonperforming assets increased to $64,579 thousand, up from $45,597 thousand in the previous quarter[32] - The allowance for credit losses on loans (ACL) to total loans ratio was 0.78%, slightly down from 0.79% in the previous quarter[32] Efficiency and Returns - Efficiency ratio improved to 72.71% in September 2025 from 75.66% in June 2025, a reduction of 2.95%[26] - Return on average assets (annualized) rose to 0.50% in September 2025, compared to 0.35% in June 2025, an increase of 0.15%[26] - Return on average assets (annualized) improved to 0.50% from 0.35% in the previous quarter[46] - Return on average equity (annualized) increased to 5.10% from 3.64% in the previous quarter[46] Shareholder Information - The dividend payout ratio improved by 29.4% from 102.6% to 73.2%[22] - The dividend payout ratio for Q3 2025 was 73.2%, down from 102.6% in Q2 2025[37] - Outstanding shares increased by 162, or 0.3%, from 64,577 to 64,739[19] - Book value per share increased by $0.08, or 0.7%, from $11.55 to $11.63[19] - Tangible book value per share rose to $9.86 in September 2025 from $9.77 in June 2025[29]