# Kearny Financial Corp. (KRNY)

Informational only - not investment advice.

CIK: 0001617242
SIC: 6035 Savings Institution, Federally Chartered
SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6035 Savings Institution, Federally Chartered](/industry/6035/)
Latest 10-K filed: 2025-08-21
SEC page: https://www.sec.gov/edgar/browse/?CIK=1617242
Filing source: https://www.sec.gov/Archives/edgar/data/1617242/000161724225000056/krny-20250630.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 324476000 | USD | 2025 | 2025-08-21 |
| Net income | 26075000 | USD | 2025 | 2025-08-21 |
| Assets | 7740450000 | USD | 2025 | 2025-08-21 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-08-21. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001617242.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 126,888,000 | 139,093,000 | 171,431,000 | 237,333,000 | 237,804,000 | 238,085,000 | 226,272,000 | 293,724,000 | 328,868,000 | 324,476,000 |
| Net income | 15,822,000 | 18,603,000 | 19,596,000 | 42,142,000 | 44,965,000 | 63,233,000 | 67,547,000 | 40,811,000 | -86,667,000 | 26,075,000 |
| Diluted EPS | 0.18 | 0.22 | 0.24 | 0.46 | 0.55 | 0.77 | 0.95 | 0.63 | -1.39 | 0.42 |
| Operating cash flow | 39,177,000 | 38,530,000 | 45,095,000 | 39,001,000 | 19,324,000 | 75,417,000 | 81,301,000 | 69,549,000 | 43,971,000 | 24,771,000 |
| Capital expenditures | 2,193,000 | 4,035,000 | 8,268,000 | 6,137,000 | 5,960,000 | 5,458,000 | 2,920,000 | 1,355,000 | 1,350,000 | 3,383,000 |
| Dividends paid | 7,164,000 | 8,286,000 | 20,561,000 | 34,747,000 | 24,121,000 | 28,648,000 | 30,693,000 | 28,499,000 | 27,564,000 | 27,634,000 |
| Assets | 4,500,059,000 | 4,818,127,000 | 6,579,874,000 | 6,634,829,000 | 6,758,175,000 | 7,283,735,000 | 7,719,883,000 | 8,064,815,000 | 7,683,461,000 | 7,740,450,000 |
| Liabilities | 3,352,430,000 | 3,760,946,000 | 5,311,126,000 | 5,507,670,000 | 5,673,998,000 | 6,240,791,000 | 6,825,883,000 | 7,195,531,000 | 6,929,890,000 | 6,994,488,000 |
| Stockholders' equity | 1,147,629,000 | 1,057,181,000 | 1,268,748,000 | 1,127,159,000 | 1,084,177,000 | 1,042,944,000 | 894,000,000 | 869,284,000 | 753,571,000 | 745,962,000 |
| Cash and cash equivalents | 199,200,000 | 78,237,000 | 128,864,000 | 38,935,000 | 180,967,000 | 67,855,000 | 101,615,000 | 70,515,000 | 63,864,000 | 167,269,000 |
| Free cash flow | 36,984,000 | 34,495,000 | 36,827,000 | 32,864,000 | 13,364,000 | 69,959,000 | 78,381,000 | 68,194,000 | 42,621,000 | 21,388,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 12.47% | 13.37% | 11.43% | 17.76% | 18.91% | 26.56% | 29.85% | 13.89% | -26.35% | 8.04% |
| Return on equity | 1.38% | 1.76% | 1.54% | 3.74% | 4.15% | 6.06% | 7.56% | 4.69% | -11.50% | 3.50% |
| Return on assets | 0.35% | 0.39% | 0.30% | 0.64% | 0.67% | 0.87% | 0.87% | 0.51% | -1.13% | 0.34% |
| Liabilities / equity | 2.92 | 3.56 | 4.19 | 4.89 | 5.23 | 5.98 | 7.64 | 8.28 | 9.20 | 9.38 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001617242.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2023-Q1 | 2022-09-30 |  |  | 0.25 | reported discrete quarter |
| 2023-Q2 | 2022-12-31 |  |  | 0.03 | reported discrete quarter |
| 2023-Q3 | 2023-03-31 |  |  | 0.16 | reported discrete quarter |
| 2023-Q4 | 2023-06-30 | 79,692,000 | 12,013,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2023-09-30 | 81,168,000 | 9,842,000 | 0.16 | reported discrete quarter |
| 2024-Q2 | 2023-12-31 | 82,625,000 | -13,827,000 | -0.22 | reported discrete quarter |
| 2024-Q3 | 2024-03-31 | 82,085,000 | 7,397,000 | 0.12 | reported discrete quarter |
| 2024-Q4 | 2024-06-30 | 82,990,000 | -90,079,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2024-09-30 | 83,252,000 | 6,092,000 | 0.10 | reported discrete quarter |
| 2025-Q2 | 2024-12-31 | 81,485,000 | 6,566,000 | 0.10 | reported discrete quarter |
| 2025-Q3 | 2025-03-31 | 79,334,000 | 6,648,000 | 0.11 | reported discrete quarter |
| 2025-Q4 | 2025-06-30 | 80,405,000 | 6,769,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2025-09-30 | 82,508,000 | 9,506,000 | 0.15 | reported discrete quarter |
| 2026-Q2 | 2025-12-31 | 80,652,000 | 9,449,000 | 0.15 | reported discrete quarter |
| 2026-Q3 | 2026-03-31 | 79,169,000 | 10,137,000 | 0.16 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1617242/000161724226000009/krny-20260331.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-05-07
Report date: 2026-03-31

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q may include certain forward-looking statements based on current management expectations. Such forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may”, “will”, “believe”, “expect”, “estimate”, “anticipate”, “continue”, or similar terms or variations on those terms, or the negative of those terms. The actual results of the Company could differ materially from those management expectations. This includes statements regarding general economic and geopolitical conditions, including military conflicts, potential recessionary conditions and the imposition of tariffs or other domestic or international governmental policies and any retaliatory responses, legislative and regulatory changes, monetary and fiscal policies of the federal government, the effects of any federal government shutdown, changes in tax policies, rates and regulations of federal, state and local tax authorities and failure to integrate or profitably operate acquired businesses. Additional potential factors include changes in interest rates, the rate of inflation, deposit flows, cost of funds, demand for loan products and financial services, competition and changes in the quality or composition of loan and investment portfolios of the Company. Other factors that could cause future results to vary from current management expectations include changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and prices. Further description of the risks and uncertainties to the business are included in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025, under “Item 1A. Risk Factors.”

Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies

Our accounting policies are integral to understanding the results reported. We consider accounting policies that require management to exercise significant judgment or discretion or to make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. At March 31, 2026, there have been no material changes to our critical accounting policies as compared to the critical accounting policies disclosed in our most recent Annual Report on Form 10-K. Reference is made to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025.

Comparison of Financial Condition at March 31, 2026 and June 30, 2025

Executive Summary. Total assets decreased $132.8 million to $7.61 billion at March 31, 2026 from $7.74 billion at June 30, 2025. The decrease primarily reflected decreases in net loans receivable, cash and cash equivalents, and investment securities.

Investment Securities. Investment securities available for sale decreased $29.6 million to $983.3 million at March 31, 2026, from $1.01 billion at June 30, 2025. This decrease was driven by principal repayments of $243.2 million, partially offset by purchases of $198.1 million and a $15.3 million increase in the fair value of the portfolio to a net unrealized loss of $96.8 million.

Investment securities held to maturity decreased $9.6 million to $110.6 million at March 31, 2026 from $120.2 million at June 30, 2025. This decrease was driven by principal repayments of $9.7 million.

Additional information regarding our investment securities at March 31, 2026 and June 30, 2025 is presented in Note 4 to the unaudited consolidated financial statements.

Loans Held-for-Sale. Loans held-for-sale totaled $12.2 million at March 31, 2026 as compared to $5.9 million at June 30, 2025 and are reported separately from the balance of net loans receivable. During the nine months ended March 31, 2026, we sold $86.1 million of residential mortgage loans, resulting in a gain on sale of $616,000.

- 36 -

Table of Contents

Net Loans Receivable. Net loans receivable decreased $32.3 million, or 0.6%, to $5.73 billion at March 31, 2026 from $5.77 billion at June 30, 2025. Details regarding the change in the loan portfolio, by loan segment, are presented below:

March 31,

2026

June 30,

2025

Increase/

(Decrease)

(In Thousands)

Commercial loans:

Multi-family mortgage

$

2,555,001 

$

2,709,654 

$

(154,653)

Nonresidential mortgage

1,012,422 

986,556 

25,866 

Commercial business

201,277 

138,755 

62,522 

Construction

207,765 

177,713 

30,052 

Total commercial loans

3,976,465 

4,012,678 

(36,213)

One- to four-family residential mortgage

1,741,023 

1,748,591 

(7,568)

Consumer loans:

Home equity loans

61,379 

50,737 

10,642 

Other consumer

2,377 

2,533 

(156)

Total consumer loans

63,756 

53,270 

10,486 

Total loans

5,781,244 

5,814,539 

(33,295)

Unaccreted yield adjustments

(2,063)

(1,602)

(461)

Allowance for credit losses

(44,723)

(46,191)

1,468 

Net loans receivable

$

5,734,458 

$

5,766,746 

$

(32,288)

Commercial loan origination volume for the nine months ended March 31, 2026 totaled $284.2 million, comprised of $107.8 million of commercial mortgage loan originations, $90.5 million of commercial business loan originations and construction loan disbursements of $86.0 million. Purchases of commercial business loans totaled $68.7 million for the same period.

One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $90.5 million for the nine months ended March 31, 2026. Purchases of residential mortgage loans totaled $36.3 million for the same period. Home equity loan and line of credit origination volume for the same period totaled $29.4 million.

Loan-to-value (“LTV”) ratios are based on current period loan balances and original appraised values at the time of origination unless a current appraisal has been obtained as a result of the loan being deemed collateral dependent and individually analyzed. The following table sets forth the composition of our real estate secured loans indicating the LTV, by loan category, at March 31, 2026 and June 30, 2025:

March 31, 2026

June 30, 2025

Balance

LTV

Balance

LTV

(Dollars in Thousands)

Commercial mortgage loans:

Multi-family mortgage

$

2,555,001 

61 

%

$

2,709,654 

62 

%

Nonresidential mortgage(1)

1,012,422 

53 

986,556 

52 

Construction

207,765 

55 

177,713 

56 

Total commercial mortgage loans

3,775,188 

59 

3,873,923 

59 

One- to four-family residential mortgage

1,741,023 

61 

1,748,591 

62 

Consumer loans:

Home equity loans

61,379 

51 

50,737 

51 

Total mortgage loans

$

5,577,590 

59 

%

$

5,673,251 

60 

%

___________________________________

(1)At March 31, 2026 and June 30, 2025, nonresidential mortgage includes $920,630 and $891,995, respectively, of non-owner occupied commercial real estate (“CRE”) loans with an LTV of 53% in each period, and includes $91,792 and $94,561, respectively, of owner occupied CRE loans with an LTV of 47% and 48%, respectively.

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Table of Contents

Additional information about our loan portfolio at March 31, 2026 and June 30, 2025 is presented in Note 5 to the unaudited consolidated financial statements.

Nonperforming Assets. Nonperforming assets increased $6.8 million to $52.4 million, or 0.69% of total assets, at March 31, 2026, from $45.6 million, or 0.59% of total assets, at June 30, 2025, respectively. The increase in nonperforming assets was largely attributable to an increase in nonperforming multi-family mortgage loans, partially offset by a decrease in nonperforming residential mortgage loans.

Additional information about our nonperforming loans and loan modifications at March 31, 2026 and June 30, 2025 is presented in Note 5 to the unaudited consolidated financial statements.

Allowance for Credit Losses (“ACL”). At March 31, 2026 the ACL totaled $44.7 million, or 0.77% of total loans, compared to $46.2 million, or 0.79% of total loans, at June 30, 2025. The decrease for the nine months ended March 31, 2026 was largely attributable to net charge-offs of $2.3 million, partially offset by a provision for credit losses of $876,000.

Additional information about our ACL at March 31, 2026 and June 30, 2025 is presented in Note 6 to the unaudited consolidated financial statements.

Other Assets. The aggregate balance of other assets, including premises and equipment, FHLB stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance (“BOLI”), deferred income taxes, and other assets, decreased $24.0 million to $643.3 million at March 31, 2026 from $667.3 million at June 30, 2025. The decrease in the balance of these other assets during the nine months ended March 31, 2026 primarily reflected a decrease in the market value of interest rate derivatives, a decrease in FHLB stock and a decrease in properties held for sale, partially offset by an increase in BOLI. The remaining change generally reflected normal operating fluctuations within these line items.

Deposits. Total deposits increased $53.9 million, or 0.9%, to $5.73 billion at March 31, 2026 from $5.68 billion at June 30, 2025. Included in total deposits are retail and brokered time deposits of $1.20 billion and $757.2 million, respectively, at March 31, 2026, and $1.22 billion and $757.7 million, respectively, at June 30, 2025. The increase in non-interest bearing demand deposits was largely the result of migrating $69.8 million from a consumer interest bearing product to a non-interest bearing product as part of our repricing strategy. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:

March 31,

2026

June 30,

2025

Increase/

(Decrease)

(In Thousands)

Non-interest-bearing deposits

$

631,506 

$

582,045 

$

49,461 

Interest-bearing deposits:

Interest-bearing demand

2,375,565 

2,362,222 

13,343 

Savings

763,016 

754,376 

8,640 

Certificates of deposit (retail)

1,201,752 

1,218,920 

(17,168)

Certificates of deposit (brokered)

757,243 

757,654 

(411)

Interest-bearing deposits

5,097,576 

5,093,172 

4,404 

Total deposits

$

5,729,082 

$

5,675,217 

$

53,865 

Uninsured deposits totaled $2.20 billion as of March 31, 2026 compared to $1.99 billion as of June 30, 2025. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $839.0 million, or 14.7% of total deposits, at March 31, 2026 compared to $813.8 million, or 14.3% of total deposits, at June 30, 2025.

Additional information about our deposits at March 31, 2026 and June 30, 2025 is presented in Note 7 to the unaudited consolidated financial statements.

Borrowings. The balance of borrowings decreased by $196.5 million to $1.06 billion at March 31, 2026 from $1.26 billion at June 30, 2025, reflecting reductions in FHLB advances.

At March 31, 2026, we maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.45 billion, representing 32.2% of total assets.

Additional information about our borrowings at March 31, 2026 and June 30, 2025 is presented in Note 8 to the unaudited consolidated financial statements.

- 38 -

Table of Contents

Other Liabilities. The balance

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

This discussion and analysis reflects Kearny Financial Corp.’s consolidated financial statements and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations. You should read the information in this section in conjunction with the business and financial information regarding Kearny Financial Corp. and the audited consolidated financial statements and notes thereto contained in this Annual Report on Form 10-K.

Critical Accounting Policies and Estimates

Our accounting policies are integral to understanding the results reported. We describe them in detail in Note 1 to our audited consolidated financial statements. In preparing the audited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the Consolidated Statements of Financial Condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes relate to the determination of the allowance for credit losses and goodwill.

Allowance for Credit Losses. The determination of our allowance for credit losses on loans (“ACL”) is considered a critical accounting estimate by management because of the high degree of judgment involved in determining qualitative loss factors, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded ACL. See Note 1 to our audited consolidated financial statements for a detailed discussion of our accounting policies and methodologies for establishing the ACL.

Management believes the following information may enable investors to better understand the changes in our ACL. Our ACL totaled $46.2 million and $44.9 million at June 30, 2025 and 2024, respectively. The $1.3 million increase in our ACL was largely attributable to an increase in reserves for individually evaluated loans. The quantitative component of our ACL, which is largely based on the national unemployment rate forecast, decreased $1.2 million. The qualitative component of our ACL, which is largely based on management’s judgment of qualitative loss factors, increased $0.9 million.

Our ACL totaled $46.2 million at June 30, 2025 and the amount allocated to our collectively evaluated multi-family and nonresidential mortgage loans was $30.5 million, of which $21.1 million was attributable to qualitative loss factors. Changes in managements’ judgment of qualitative loss factors could result in a significant change to the ACL. As described in Note 1, qualitative loss factors are applied to each portfolio segment with the amounts judgmentally determined by the relative risk to the most severe loss periods identified in the historical loan charge-offs of a peer group of similar-sized regional banks. At June 30, 2025, the most severe historical loss rate for multi-family and nonresidential mortgages loans was 1.66%.

Management performed a hypothetical sensitivity analysis to understand the impact of a change in a key input on our ACL. At June 30, 2025, if the four-quarter national unemployment rate forecast had been 9% rather than an average of approximately 4.1%, our ACL as a percent of total loans would have increased 34 basis points from 0.79% to 1.13%. This sensitivity analysis includes the impact to both the quantitative and qualitative components of our ACL. Changes in quantitative inputs and qualitative loss factors may not occur in the same direction or magnitude across all segments of our loan portfolio and deterioration in some quantitative inputs and qualitative loss factors may offset improvement in others. This sensitivity analysis does not represent a change to our expectations of the economic environment but provides a hypothetical result to assess the sensitivity of the ACL to a change in a key input. This sensitivity analysis does not incorporate changes to management’s judgment of qualitative loss factors.

Our ACL on individually analyzed loans is determined on an individual basis using the present value of expected cash flows discounted using the loan’s effective interest rate or, for collateral-dependent loans, the fair value of the collateral, less estimated selling costs, as applicable. Our ACL on individually analyzed loans increased $1.6 million during the year ended June 30, 2025.

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Goodwill. Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is not amortized, but is tested for impairment at least annually or more frequently if events and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

To test goodwill for impairment we elected to perform a goodwill impairment assessment during the fourth quarter of the year ended June 30, 2025. The quantitative goodwill impairment test compares the estimated fair value of the reporting unit with its carrying amount, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. However, if the carrying amount of the reporting unit were to exceed its estimated fair value, and impairment loss would be recorded.

The quantitative assessment of goodwill for our single reporting unit was performed utilizing a discounted cash flow analysis (“income approach”) and estimates of selected market information (“market approaches”). The result of the income approach was weighted at 70% and the results of the market approaches comprised the remaining 30% in determining the fair value of our single reporting unit. The fair value of our single reporting unit exceeded its respective carrying value, resulting in no impairment charge required to be recorded for the year ended June 30, 2025. As a result, the Company’s goodwill of $113.5 million remained unchanged from June 30, 2024. Determining fair value of our single reporting unit is subject to uncertainty as it is reliant on projected future cash flows, discount rate assumption, and market estimates. In the future, changes in projected future cash flows, discount rate assumption, or market estimates may result in further impairment of goodwill.

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Financial Overview

The following financial information and other data in this section are derived from our audited consolidated financial statements and should be read together therewith:

At June 30,

2025

2024

2023

(In Thousands)

Balance Sheet Data:

Cash and equivalents

$

167,269 

$

63,864 

$

70,515 

Assets

7,740,450 

7,683,461 

8,064,815 

Net loans receivable

5,766,746 

5,687,848 

5,780,687 

Investment securities available for sale

1,012,969 

1,072,833 

1,227,729 

Investment securities held to maturity

120,217 

135,742 

146,465 

Goodwill

113,525 

113,525 

210,895 

Deposits

5,675,217 

5,158,123 

5,629,183 

Borrowings

1,256,491 

1,709,789 

1,506,812 

Stockholders' equity

745,962 

753,571 

869,284 

For the Years Ended June 30,

2025

2024

2023

(Dollars in Thousands, Except Per Share Amounts)

Summary of Operations:

Interest income

$

324,476 

$

328,868 

$

293,724 

Interest expense

189,533 

186,274 

117,859 

Net interest income

134,943 

142,594 

175,865 

Provision for credit losses

2,366 

6,226 

2,486 

Net interest income after provision for credit losses

132,577 

136,368 

173,379 

Non-interest income

19,052 

(1,993)

2,751 

Non-interest expenses

120,630 

215,151 

123,751 

Income (loss) before taxes

30,999 

(80,776)

52,379 

Income tax expense

4,924 

5,891 

11,568 

Net income (loss)

$

26,075 

$

(86,667)

$

40,811 

Per Share Data:

Net income (loss) per share - Basic and diluted

$

0.42 

$

(1.39)

$

0.63 

Weighted average number of common shares outstanding (in thousands):

Basic

62,508

62,444

64,804

Diluted

62,716

62,444

64,804

Cash dividends per share

$

0.44 

$

0.44 

$

0.44 

Dividend payout ratio(1)

106.1 

%

(31.9)

%

70.2 

%

________________________________________

(1)Represents cash dividends declared divided by net income (loss).

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At or For the Years Ended June 30,

2025

2024

2023

Performance Ratios:

Return on average assets (ratio of net income to average total assets)

0.34 

%

(1.10)

%

0.51 

%

Return on average equity (ratio of net income to average total equity)

3.49 

%

(10.51)

%

4.66 

%

Return on average tangible equity (ratio of net income to average tangible equity)(1)

4.18 

%

(13.64)

%

6.17 

%

Net interest rate spread

1.47 

%

1.57 

%

2.09 

%

Net interest margin

1.88 

%

1.94 

%

2.34 

%

Average interest-earning assets to average interest-bearing liabilities

115.21 

%

114.73 

%

115.66 

%

Efficiency ratio(2)

78.33 

%

153.02 

%

69.28 

%

Non-interest expense to average assets

1.58 

%

2.73 

%

1.53 

%

Asset Quality Ratios:

Non-performing loans to total loans

0.78 

%

0.70 

%

0.73 

%

Non-performing assets to total assets

0.59 

%

0.52 

%

0.69 

%

Net charge-offs to average loans outstanding

0.02 

%

0.17 

%

0.01 

%

Allowance for credit losses to total loans

0.79 

%

0.78 

%

0.83 

%

Allowance for credit losses to non-performing loans

101.30 

%

112.68 

%

114.33 

%

Capital Ratios:

Average equity to average assets

9.77 

%

10.46 

%

10.85 

%

Equity to assets at period end

9.64 

%

9.81 

%

10.78 

%

Tangible equity to tangible assets at period end(3)

8.27 

%

8.43 

%

8.35 

%

________________________________________

(1)Average tangible equity equals average total stockholders’ equity reduced by average goodwill and average core deposit intangible assets.

(2)Efficiency ratio equals non-interest expense divided by the sum of net interest income and non-interest income.

(3)Tangible equity equals total stockholders’ equity reduced by goodwill and core deposit intangible assets.

Comparison of Financial Condition at June 30, 2025 and June 30, 2024

Executive Summary. Total assets increased by $57.0 million, or 0.7%, to $7.74 billion at June 30, 2025 from $7.68 billion at June 30, 2024. The increase primarily reflected increases in cash and cash equivalents and net loans receivable, partially offset by decreases in investment securities and other assets.

Investment Securities. Investment securities available for sale decreased by $59.9 million to $1.01 billion at June 30, 2025 from $1.07 billion at June 30, 2024. This decrease was largely the result of principal repayments of $183.8 million, partially offset by purchases of $104.9 million and a $18.5 million increase in the fair value of the portfolio.

Investment securities held to maturity decreased by $15.5 million to $120.2 million at June 30, 2025 from $135.7 million at June 30, 2024. The decrease was largely the result of principal repayments of $15.6 million.

Additional information regarding investment securities at June 30, 2025 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 3 to the audited consolidated financial statements.

Loans Held-for-Sale. Loans held-for-sale totaled $5.9 million at June 30, 2025 as compared to $6.0 million at June 30, 2024 and are reported separately from the balance of net loans receivable. Loans held-for-sale consisted of residential mortgage loans of $5.9 million at June 30, 2025 as compared to residential mortgage loans of $6.0 million at June 30, 2024. During the year ended June 30, 2025, we sold $112.1 million of residential mortgage loans, resulting in a net gain on sale of $806,000.

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Table of Contents

Net Loans Receivable. Net loans receivable increased by $78.9 million, or 1.4%, to $5.77 billion at June 30, 2025 from $5.69 billion at June 30, 2024. Detail regarding the change in the loan portfolio is presented below:

June 30,

2025

June 30,

2024

Increase/

(Decrease)

(In Thousands)

Commercial loans:

Multi-family mortgage

$

2,709,654 

$

2,645,851 

$

63,803 

Nonresidential mortgage

986,556 

948,075 

38,481 

Commercial business

138,755 

142,747 

(3,992)

Construction

177,713 

209,237 

(31,524)

Total commercial loans

4,012,678 

3,945,910 

66,768 

One- to four-family residential mortgage

1,748,591 

1,756,051 

(7,460)

Consumer loans:

Home equity loans

50,737 

44,104 

6,633 

Other consumer

2,533 

2,685 

(152)

Total consumer loans

53,270 

46,789 

6,481 

Total loans

5,814,539 

5,748,750 

65,789 

Unaccreted yield adjustments

(1,602)

(15,963)

14,361 

Allowance for credit losses

(46,191)

(44,939)

(1,252)

Net loans receivable

$

5,766,746 

$

5,687,848 

$

78,898 

Commercial loan origination volume for the year ended June 30, 2025 totaled $477.3 million, consisted of $260.3 million of commercial mortgage loan originations, $118.1 million of commercial business loan originations and $98.9 million of construction loan disbursements.

One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $144.3 million for the year ended June 30, 2025 and was supplemented with loan purchases totaling $730,000. Home equity loan and line of credit origination volume for the same period totaled $29.7 million.

Additional information about our loans at June 30, 2025 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 4 to the audited consolidated financial statements.

Nonperforming loans. Nonperforming loans increased by $5.7 million to $45.6 million, or 0.79% of total loans, at June 30, 2025 from $39.9 million, or 0.70% of total loans, at June 30, 2024. The increase in nonperforming loans was largely attributable to an increase of $8.3 million in nonperforming multi-family mortgage loans, partially offset by a decrease of $4.1 million in nonperforming nonresidential mortgage loans.

Additional information about nonperforming loans and reportable loan modifications at June 30, 2025 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 4 to the audited consolidated financial statements.

Allowance for Credit Losses. At June 30, 2025, the ACL totaled $46.2 million, or 0.79% of total loans, reflecting an increase of $1.3 million from $44.9 million, or 0.78% of total loans, at June 30, 2024. The increase was largely attributable to a provision for credit losses of $2.4 million, primarily driven by an increase in the provision for individually evaluated loans, partially offset by net charge-offs of $1.1 million.

Additional information about the allowance for credit losses at June 30, 2025 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 1 and Note 5 to the audited consolidated financial statements.

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Table of Contents

Other Assets. The aggregate balance of other assets, including premises and equipment, FHLB stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance, deferred income taxes, OREO and other assets, decreased by $49.8 million to $667.3 million at June 30, 2025 from $717.1 million at June 30, 2024. The decrease in other assets largely reflected a decrease in the market value of interest rate derivatives and a decrease in FHLB stock, partially offset by an increase in BOLI. The remaining change generally reflected normal operating fluctuations within these line items.

Deposits. Total deposits increased by $517.1 million, or 10.0%, to $5.68 billion at June 30, 2025 from $5.16 billion at June 30, 2024. Included in total deposits are brokered certificates of deposits (“CDs”) of $757.7 million and $408.2 million at June 30, 2025 and 2024, respectively. The increase was driven by a reallocation from FHLB advances into brokered CDs and growth in deposits from our branch network and digital channels. The following table sets forth the distribution of, and changes in, deposits, by type, at the dates indicated:

June 30,

2025

June 30,

2024

Increase/

(Decrease)

(In Thousands)

Non-interest-bearing deposits

$

582,045 

$

598,366 

$

(16,321)

Interest-bearing deposits:

Interest-bearing demand

2,362,222 

2,308,915 

53,307 

Savings

754,376 

643,481 

110,895 

Certificates of deposit (retail)

1,218,920 

1,199,127 

19,793 

Certificates of deposit (brokered)

757,654 

408,234 

349,420 

Interest-bearing deposits

5,093,172 

4,559,757 

533,415 

Total deposits

$

5,675,217 

$

5,158,123 

$

517,094 

Uninsured deposits totaled $1.99 billion as of June 30, 2025, compared to $1.77 billion as of June 30, 2024. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $813.8 million, or 14.3% of total deposits, at June 30, 2025 compared to $764.4 million, or 14.8% of total deposits, at June 30, 2024.

Additional information about our deposits at June 30, 2025 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 9 to the audited consolidated financial statements.

Borrowings. The balance of borrowings decreased by $453.3 million, or 26.5%, to $1.26 billion at June 30, 2025 from $1.71 billion at June 30, 2024 which included overnight borrowings totaling $150.0 million and $175.0 million at June 30, 2025 and 2024, respectively. The decrease was primarily driven by a net decrease in FHLB and other borrowings as a result of the increase in brokered CDs, as noted above.

Additional information about our borrowings at June 30, 2025 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 10 to the audited consolidated financial statements.

Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, increased by $802,000 to $62.8 million at June 30, 2025 from $62.0 million at June 30, 2024. The change in the balance of other liabilities generally reflected normal operating fluctuations within these line items.

Stockholders’ Equity. Stockholders’ equity decreased by $7.6 million to $746.0 million at June 30, 2025 from $753.6 million at June 30, 2024. The decrease in stockholders’ equity during the year ended June 30, 2025 largely reflected $27.7 million in cash dividends and an $8.8 million after-tax other comprehensive loss, partially offset by net income of $26.1 million. The other comprehensive loss during the year ended June 30, 2025 was driven by a decrease in the fair value of our derivatives portfolio, partially offset by an increase in the fair value of our available for sale securities.

Book value per share decreased by $0.15 to $11.55 at June 30, 2025 while tangible book value per share decreased by $0.13 to $9.77 at June 30, 2025. These decreases were driven by the decrease in stockholders’ equity, as described above.

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Table of Contents

Comparison of Operating Results for the Years Ended June 30, 2025 and June 30, 2024

Net Income (Loss). Net income for the year ended June 30, 2025 was $26.1 million, or $0.42 per diluted share, an increase of $112.7 million from a net loss of $86.7 million, or $1.39 per diluted share, for the year ended June 30, 2024. Excluding the $95.3 million non-cash goodwill impairment recorded in the prior year, net income increased $17.4 million, reflecting an increase in non-interest income and decreases in the provision for credit losses and income tax expense, partially offset by a decrease in net interest income and an increase in non-interest expense. Net income for the prior year period also included a $12.9 million after-tax net loss on the sale of securities that resulted from the repositioning of our investment securities portfolio in December 2023 and an after-tax net loss of $6.7 million from the previously disclosed BOLI restructure.

Net Interest Income. Net interest income decreased by $7.7 million to $134.9 million for the year ended June 30, 2025. The decrease between the comparative periods resulted from a decrease of $4.4 million in interest income and an increase of $3.3 million in interest expense. Included in net interest income for the years ended June 30, 2025 and 2024, respectively, was purchase accounting accretion of $2.4 million and $2.6 million and loan prepayment penalty income of $783,000 and $879,000.

Net interest margin decreased 6 basis points to 1.88% for the year ended June 30, 2025, from 1.94% for the year ended June 30, 2024. The decrease reflected increases in the cost and average balances of interest-bearing deposits and decreases in the average balances of interest-earning assets, partially offset by higher yields on interest-earning assets and decreases in the average balances of interest-bearing borrowings.

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Table of Contents

Details surrounding the composition of, and changes to, net interest income are presented in the table below which reflects the components of the average balance sheet and of net interest income for the periods indicated. We derived the average yields and costs by dividing income or expense by the average balance of assets or liabilities, respectively, for the years presented with daily balances used to derive average balances. No tax equivalent adjustments have been made to yield or costs. Non-accrual loans were included in the calculation of average balances, however interest receivable on these loans has been fully reserved for and therefore not included in interest income. The yields and costs set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense and exclude the impact of prepayment penalties, which are recorded to non-interest income.

For the Years Ended June 30,

2025

2024

2023

Average

Balance

Interest

Average

Yield/

Cost

Average

Balance

Interest

Average

Yield/

Cost

Average

Balance

Interest

Average

Yield/

Cost

(Dollars in Thousands)

Interest-earning assets:

Loans receivable (1)

$

5,789,583 

$

262,992 

4.54 

%

$

5,752,496 

$

256,007 

4.45 

%

$

5,827,123 

$

233,147 

4.00 

%

Taxable investment securities(2)

1,270,262 

53,247 

4.19 

1,438,200 

63,313 

4.40 

1,532,961 

54,855 

3.58 

Tax-exempt securities (2)

9,791 

234 

2.39 

14,718 

336 

2.28 

30,332 

694 

2.29 

Other interest-earning assets(3)

119,224 

8,003 

6.71 

131,019 

9,212 

7.03 

115,390 

5,028 

4.36 

Total interest-earning assets

7,188,860 

324,476 

4.51 

7,336,433 

328,868 

4.48 

7,505,806 

293,724 

3.91 

Non-interest-earning assets

459,986 

541,859 

563,131 

Total assets

$

7,648,846 

$

7,878,292 

$

8,068,937 

Interest-bearing liabilities:

Interest-bearing demand

$

2,335,972 

$

66,835 

2.86 

$

2,308,893 

$

67,183 

2.91 

$

2,349,802 

$

40,650 

1.73 

Savings

721,115 

9,011 

1.25 

662,981 

3,293 

0.50 

896,651 

3,351 

0.37 

Certificates of deposit

1,902,026 

64,412 

3.39 

1,778,682 

51,938 

2.92 

2,083,864 

34,162 

1.64 

Total interest-bearing deposits

4,959,113 

140,258 

2.83 

4,750,556 

122,414 

2.58 

5,330,317 

78,163 

1.47 

FHLB advances

1,131,662 

42,014 

3.71 

1,458,941 

53,948 

3.70 

1,101,658 

37,734 

3.43 

Other borrowings

149,041 

7,261 

4.87 

184,768 

9,912 

5.36 

57,468 

1,962 

3.41 

Total borrowings

1,280,703 

49,275 

3.85 

1,643,709 

63,860 

3.89 

1,159,126 

39,696 

3.42 

Total interest-bearing liabilities

6,239,816 

189,533 

3.04 

6,394,265 

186,274 

2.91 

6,489,443 

117,859 

1.82 

Non-interest-bearing liabilities(4)

662,028 

659,710 

704,136 

Total liabilities

6,901,844 

7,053,975 

7,193,579 

Stockholders' equity

747,002 

824,317 

875,358 

Total liabilities and stockholders' equity

$

7,648,846 

$

7,878,292 

$

8,068,937 

Net interest income

$

134,943 

$

142,594 

$

175,865 

Interest rate spread(5)

1.47 

%

1.57 

%

2.09 

%

Net interest margin(6)

1.88 

%

1.94 

%

2.34 

%

Ratio of interest-earning assets to interest-bearing liabilities

1.15

1.15

1.16

________________________________________

(1)Loans held-for-sale and non-accruing loans have been included in loans receivable and the effect of such inclusion was not material. Allowance for credit losses has been included in non-interest-earning assets.

(2)Fair value adjustments have been excluded in the balances of interest-earning assets.

(3)Includes interest-bearing deposits at other banks and FHLB of New York capital stock.

(4)Includes average balances of non-interest-bearing deposits of $597.2 million, $595.3 million and $644.5 million for the years ended June 30, 2025, 2024 and 2023, respectively.

(5)Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(6)Net interest margin represents net interest income as a percentage of average interest-earning assets.

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Table of Contents

The following table reflects the dollar amount of changes in interest income and interest expense to changes in volume and in prevailing interest rates during the years indicated. Each category reflects the: (1) changes in volume (changes in volume multiplied by old rate); (2) changes in rate (changes in rate multiplied by old volume); and (3) net change. The net change attributable to the combined impact of volume and rate has been allocated proportionally to the absolute dollar amounts of change in each.

Year Ended June 30, 2025

versus

Year Ended June 30, 2024

Year Ended June 30, 2024

versus

Year Ended June 30, 2023

Increase (Decrease) Due to

Increase (Decrease) Due to

Volume

Rate

Net

Volume

Rate

Net

(In Thousands)

Interest and dividend income

Loans receivable

$

1,688 

$

5,297 

$

6,985 

$

(3,024)

$

25,884 

$

22,860 

Taxable investment securities

(7,145)

(2,921)

(10,066)

(3,545)

12,003 

8,458 

Tax-exempt securities

(117)

15 

(102)

(355)

(3)

(358)

Other interest-earning assets

(803)

(406)

(1,209)

758 

3,426 

4,184 

Total interest-earning assets

(6,377)

1,985 

(4,392)

(6,166)

41,310 

35,144 

Interest expense:

Interest-bearing demand

795 

(1,143)

(348)

(720)

27,253 

26,533 

Savings

316 

5,402 

5,718 

(1,017)

959 

(58)

Certificates of deposit

3,756 

8,718 

12,474 

(5,620)

23,396 

17,776 

Borrowings

(13,936)

(649)

(14,585)

18,186 

5,978 

24,164 

Total interest-bearing liabilities

(9,069)

12,328 

3,259 

10,829 

57,586 

68,415 

Change in net interest income

$

2,692 

$

(10,343)

$

(7,651)

$

(16,995)

$

(16,276)

$

(33,271)

Provision for Credit Losses. The provision for credit losses decreased by $3.9 million to $2.4 million for the year ended June 30, 2025, compared to $6.2 million for the year ended June 30, 2024. The provision for credit losses for the year ended June 30, 2025 was largely attributable to charge-offs, loan growth, and increased reserves on individually evaluated loans. The provision for credit losses for the year ended June 30, 2024 was largely attributable to charge-offs of three related commercial real estate loans and the charge-off of one non-performing commercial and industrial loan relationship.

Additional information regarding the allowance for credit losses and the associated provision recognized during the year ended June 30, 2025 is presented under “Item 1, Business” on this Annual Report on Form 10-K as well as in Note 1 and Note 5 to the audited consolidated financial statements.

Non-Interest Income. Non-interest income increased from a $1.9 million loss for the year ended June 30, 2024 to income of $19.1 million for the year ended June 30, 2025, an improvement of $21.0 million.

There were no gains on sale and call of securities during the year ended June 30, 2025 compared to a loss of $18.1 million recorded in the prior year. The loss in the prior year was due to the repositioning of our investment securities portfolio that involved the sale of $122.2 million of available for sale debt securities in December 2023.

Gain on sale of loans was $806,000 for the year ended June 30, 2025 compared to a loss of $282,000 during the prior year. The loss in the prior year was primarily the result of the sale of three related nonperforming commercial real estate loans held-for-sale.

We recognized a non-recurring loss of $974,000 attributable to the write-down of one other real estate owned (“OREO”) property during the prior year, while there were no such losses recorded in the current year.

Income from bank owned life insurance (“BOLI”) increased $1.6 million to $10.7 million for the year ended June 30, 2025. The increase primarily reflected improved income as a result of the BOLI restructure initiated in December 2023, and the absence of non-recurring exchange charges related to the restructure recorded in the prior year.

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The remaining changes in the other components of non-interest income between comparative periods generally reflected normal operating fluctuations within those line items.

Non-Interest Expense. Non-interest expense decreased by $94.5 million to $120.6 million for the year ended June 30, 2025 from $215.2 million for the year ended June 30, 2024, driven by the absence of a pre-tax, non-cash goodwill impairment of $97.4 million recognized in the prior year period. Excluding the goodwill impairment, non-interest expense increased $2.9 million compared to the prior year period.

Salaries and employee benefits expense increased by $1.7 million to $70.9 million for the year ended June 30, 2025, primarily driven by an increase in salary and benefits expense attributable to annual merit increases and higher incentive compensation.

Net occupancy expense of premises increased by $491,000 to $11.5 million for the year ended June 30, 2025. This increase was primarily driven by higher snow removal expenses due to abnormally harsh winter conditions.

Equipment and systems expense increased $480,000 to $15.7 million for the year ended June 30, 2025. This increase was largely attributable to increases in technology expense associated with the Company’s ongoing digital banking initiatives.

Advertising and marketing expense increased $481,000 to $1.9 million for the year ended June 30, 2025. This increase in advertising expense was largely driven by an increase in digital and online advertising campaigns to support our deposit growth initiatives.

The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items.

Provision for Income Taxes. Provision for income taxes decreased by $1.0 million to $4.9 million for the year ended June 30, 2025, from $5.9 million for the year ended June 30, 2024. The decrease in income tax expense was primarily driven by the absence of a $5.7 million tax expense related to the surrender of BOLI policies in the prior year period, partially offset by higher pre-tax income in the current year period.

Comparison of Operating Results for the Years Ended June 30, 2024 and June 30, 2023

A comparison of our operating results for the years ended June 30, 2024 and June 30, 2023 can be found in our Annual Report on Form 10-K for the year ended June 30, 2024, filed with the SEC on August 23, 2024.

Liquidity and Commitments

Liquidity, represented by cash and cash equivalents, is a product of operating, investing and financing activities. Our primary sources of funds are deposits, borrowings, cash flows from investment securities and loans receivable and funds provided from operations. While scheduled payments from the amortization and maturity of loans and investment securities are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and prepayments on loans and securities.

Liquidity, at June 30, 2025, included $167.3 million of short-term cash and equivalents and $1.01 billion of investment securities available for sale which can readily be sold or pledged as collateral, if necessary. In addition, we have the capacity to borrow additional funds from the FHLB, FRB or via unsecured overnight borrowings. As of June 30, 2025, we had the capacity to borrow additional funds totaling $695.0 million and $1.19 billion from the FHLB and FRB, respectively, without pledging additional collateral. We had the ability to pledge additional securities to borrow an additional $337.3 million at June 30, 2025. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $845.0 million, of which none was outstanding.

Deposits increased $517.1 million to $5.68 billion at June 30, 2025 from $5.16 billion at June 30, 2024. The increase in deposit balances reflected a $533.4 million increase in interest-bearing deposits, partially offset by a $16.3 million decrease in non-interest-bearing deposits. Borrowings from the FHLB and other sources are generally available to supplement our liquidity position or to replace maturing deposits. As of June 30, 2025, our outstanding balance of FHLB advances, excluding fair value adjustments, totaled $1.11 billion. As of the same date, we had $150.0 million outstanding via our overnight line of credit with the FHLB.

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The following table sets forth information concerning balances and interest rates on our short-term borrowings at and for the periods shown:

At or For the Years Ended June 30,

2025

2024

2023

(Dollars in Thousands)

Balance at end of year

$

1,050,000 

$

1,400,000 

$

1,175,000 

Average balance during year

$

1,024,959 

$

1,314,686 

$

900,997 

Maximum outstanding at any month end

$

1,425,000 

$

1,490,000 

$

1,280,000 

Weighted average interest rate at end of year

4.46 

%

5.47 

%

5.42 

%

Weighted average interest rate during year

4.88 

%

5.52 

%

4.49 

%

The following table discloses our contractual obligations and commitments as of June 30, 2025:

June 30, 2025

Less than

One Year

One to

Three Years

Over Three

Years to

Five Years

Over Five

Years

Total

(In Thousands)

Contractual obligations

Operating lease obligations

$

3,480 

$

5,797 

$

3,008 

$

1,783 

$

14,068 

Certificates of deposit

1,911,408 

51,627 

8,175 

5,364 

1,976,574 

Federal Home Loan Bank Advances

906,500 

200,000 

— 

— 

1,106,500 

Total contractual obligations

$

2,821,388 

$

257,424 

$

11,183 

$

7,147 

$

3,097,142 

Commitments

Undisbursed funds from approved lines of credit(1)

$

74,076 

$

24,153 

$

4,116 

$

74,779 

$

177,124 

Construction loans in process(1)

39,235 

76,416 

— 

— 

115,651 

Other commitments to extend credit(1)

26,364 

— 

— 

— 

26,364 

Total commitments

$

139,675 

$

100,569 

$

4,116 

$

74,779 

$

319,139 

________________________________________

(1)Represents amounts committed to customers.

In addition to the loan commitments noted above, the pipeline of loans held for sale included $11.1 million of in process loans whose terms included interest rate locks to borrowers that were paired with a best-efforts commitment to sell the loan to a buyer at a fixed price and within a predetermined timeframe after the sale commitment is established.

In addition to the commitments noted above, we are party to standby letters of credit totaling approximately $160,000 at June 30, 2025 through which we guarantee certain specific business obligations of our commercial customers.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the customer. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance-sheet instruments. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

At June 30, 2025, outstanding loan commitments relating to loans held in portfolio totaled $319.1 million compared to $280.9 million at June 30, 2024. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. For additional information regarding our outstanding lending commitments at June 30, 2025, see Note 16 to the audited consolidated financial statements.

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Capital

Consistent with our goals to operate as a sound and profitable financial organization, Kearny Financial and Kearny Bank actively seek to maintain our well capitalized status in accordance with regulatory standards. As of June 30, 2025, Kearny Financial and Kearny Bank exceeded all capital requirements of the federal banking regulators and were considered well capitalized.

The following table presents information regarding the Bank’s regulatory capital levels at June 30, 2025:

June 30, 2025

Actual

For Capital

Adequacy Purposes

To Be Well Capitalized

Under Prompt

Corrective Action

Provisions

Amount

Ratio

Amount

Ratio

Amount

Ratio

(Dollars in Thousands)

Total capital (to risk-weighted assets)

$

704,969 

14.49 

%

$

389,184 

8.00 

%

$

486,481 

10.00 

%

Tier 1 capital (to risk-weighted assets)

662,232 

13.61 

%

291,888 

6.00 

%

389,184 

8.00 

%

Common equity tier 1 capital (to risk-weighted assets)

662,232 

13.61 

%

218,916 

4.50 

%

316,212 

6.50 

%

Tier 1 capital (to adjusted total assets)

662,232 

8.68 

%

305,162 

4.00 

%

381,453 

5.00 

%

The following table presents information regarding the consolidated Company’s regulatory capital levels at June 30, 2025:

June 30, 2025

Actual

For Capital

Adequacy Purposes

Amount

Ratio

Amount

Ratio

(Dollars in Thousands)

Total capital (to risk-weighted assets)

$

748,323 

15.37 

%

$

389,434 

8.00 

%

Tier 1 capital (to risk-weighted assets)

705,586 

14.49 

%

292,076 

6.00 

%

Common equity tier 1 capital (to risk-weighted assets)

705,586 

14.49 

%

219,057 

4.50 

%

Tier 1 capital (to adjusted total assets)

705,586 

9.23 

%

305,661 

4.00 

%

For additional information regarding regulatory capital at June 30, 2025, see Note 14 to the audited consolidated financial statements.

Recent Accounting Pronouncements

For a discussion of the expected impact of recently issued accounting pronouncements that have yet to be adopted by us, please refer to Note 2 to the audited consolidated financial statements.