KRNY earnings analysis
What we found in KRNY's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Kearny delivered a materially improved fiscal 2026, with net income rising to $36.3 million, diluted EPS increasing to $0.57, and net interest margin expanding to 2.18%. The strategy is shifting loan production toward commercial and industrial and construction lending while improving deposit mix, but this raises credit sensitivity as CRE exposure remains 515% of Bank risk-based capital and a significant portion of loans reprices or matures in fiscal 2027. Capital and liquidity are solid, although no fiscal 2027 quantitative guidance was provided.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Earnings recovery continued
- Net income increased to $36.3 million, or $0.57 diluted EPS, from $26.1 million, or $0.42, in fiscal 2025. The improvement followed the $86.7 million net loss in fiscal 2024, which included a $97.4 million goodwill impairment charge.
- NIM expansion drove core earnings
- Net interest income rose to $155.3 million from $134.9 million, while net interest margin expanded 30 basis points to 2.18% from 1.88%. The improvement was driven primarily by a $20.5 million reduction in interest expense, partially offset by a $163,000 decline in interest income.
- Loan mix is shifting toward C&I
- Management is remixing the loan portfolio toward commercial banking relationships: commercial and industrial loans increased $85.2 million to $223.9 million and construction loans increased $85.5 million to $263.2 million, while multi-family mortgages declined $209.8 million to $2.50 billion.
- Loans and core deposits grew
- Net loans receivable increased 1.1% to $5.83 billion, and deposits increased 0.6% to $5.71 billion. The company also migrated $239.9 million from an interest-bearing consumer product to non-interest-bearing deposits as part of its repricing strategy.
- Liquidity and capital provide flexibility
- Liquidity and capital remain strong: the company had $114.8 million of cash and equivalents, $964.4 million of available-for-sale securities, and $351.6 million of additional FHLB borrowing capacity plus $1.30 billion of FRB capacity without additional collateral. The Bank's total capital ratio was 14.38%, versus the 10.00% well-capitalized threshold.
- Dividends prioritized over buybacks
- Capital was returned through $28.0 million of cash dividends, or $0.44 per share, during fiscal 2026, while no common shares were repurchased. Capital deployment priorities include organic balance-sheet growth, diversification, regular dividends, and selectively evaluating acquisitions expected to enhance long-term shareholder value.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Fiscal 2027 refinancing pressure
- A significant portion of the loan book is scheduled to reset, mature, or refinance during fiscal 2027; many loans were originated in 2021 and 2022 below current market rates. Higher borrower debt-service costs could increase delinquencies and defaults, while nonperforming assets already increased $7.8 million to $53.4 million, or 0.70% of assets, from 0.59%.
- CRE concentration remains elevated
- Commercial real estate concentration remains substantial: non-owner-occupied CRE, including multi-family and construction loans, equaled 515% of Bank total risk-based capital at June 30, 2026, above the 300% supervisory-scrutiny benchmark. The portfolio is concentrated in New Jersey and New York, increasing sensitivity to local property values, occupancy, rents, and regulation.
- AI and digital alternatives add risk
- The company has begun and expects to continue integrating AI, generative AI, machine learning, RPA, and other emerging technologies, creating risks of inaccurate or biased outputs, model failures, privacy breaches, compliance issues, and third-party disruptions. The filing also notes that customers shifting deposits to stablecoins or other digital-asset payment technologies could cause deposit outflows and higher funding costs.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.57
- Segment
- One reportable operating segment: banking operations conducted principally through Kearny Bank; the company evaluates performance on a consolidated basis.
What they said about what is next.
No fiscal 2027 revenue or EPS guidance was provided in the 10-K; annual outlook was deferred to the earnings press release/call.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 7, 2026
- Kearny Financial Corp. reported a decrease in both revenue and EPS compared to the previous quarter, with revenue at $39.236 million and diluted EPS of $0.15. Despite a revenue miss against estimates of $43.67 million,…
- 10-Q · February 5, 2026
- Kearny reported improved core profitability in Q2 ended December 31, 2025: total operating revenue (net interest income plus non‑interest income) of $43,540,000 and net income of $9,449,000 (diluted EPS $0.15) versus…
- 10-Q · May 7, 2025
- Kearny Financial reported stable core net interest income of $34,042,000 and total revenue (net interest income plus non‑interest income) of $38,604,000 for the quarter ended March 31, 2025, while GAAP diluted EPS was…
- 10-Q · February 8, 2024
- Kearny reported a quarterly net loss of $13,827,000 (EPS diluted $(0.22)) for the three months ended December 31, 2023, vs. net income $1,951,000 (EPS $0.03) in the prior-year quarter. Net interest income declined to…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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