Kearny Financial(KRNY) - 2025 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - As of September 30, 2025, the company reported a market capitalization of $425 million, total assets of $7.7 billion, loans of $5.8 billion, deposits of $5.7 billion, and capital of $700 million [9] - The tangible book value per share was reported at $9.77 [9] - Net interest income (NII) increased from $32 million to nearly $36 million, with net interest margin growing from 1.8% to 2% [12][10] - Pre-tax, pre-provision net revenue rose from approximately $7.2 million in the first quarter to $9.9 million by the fourth quarter, while pre-tax, pre-provision EPS per share increased from $0.12 to $0.16 [13] Business Line Data and Key Metrics Changes - The company is focusing on organic growth and cross-selling within its existing client base, aiming to deepen wallet share [15] - The investment services group has generated total sales of $486 million and gross revenue of $8.7 million, with assets under management at $369 million [20] Market Data and Key Metrics Changes - The company operates 43 branches across 12 counties in New Jersey and New York, with plans to close three branches, resulting in a network of 40 branches [9][10] - The company is positioned to benefit from a declining cost of funds and a more favorable yield curve, which is expected to enhance overall net income [10][17] Company Strategy and Development Direction - The company is shifting from a defensive posture to an offensive strategy focused on organic expansion and technology integration [10] - There is a strong emphasis on operational efficiency through technology, including the launch of an AI chatbot and a new HR timekeeping application for small and medium-sized businesses [11][12] - The company aims to strengthen core deposits and improve profitability through disciplined cost management and technology adoption [16][18] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges posed by an inverted yield curve and high Fed Funds rates but expressed optimism about returning to growth [10] - The focus will be on relationship banking, optimizing loan portfolio performance, and enhancing community engagement [15][16] - The company is well-positioned for earnings growth in a declining rate environment due to its liability-sensitive structure [17] Other Important Information - The company has a strong track record of credit performance, with cumulative charge-offs of $39.8 million over nearly 20 years [14] - The company has been recognized for its investment services, ranking in the top 4% nationwide in gross revenue among peer institutions [21] Q&A Session Summary Question: Qualifications of elected directors - The qualifications of the directors being elected were addressed, with details available in the proxy statement [7][8] Question: Future growth strategies - Management discussed the focus on organic growth, technology integration, and enhancing client engagement as key strategies moving forward [15][16]