Kearny Financial Corp. reported first-quarter fiscal 2027 net income of $10.0 million, up 40.0% from $7.2 million in the prior quarter, with diluted earnings per share rising to $0.16 from $0.11.
The company’s net interest income slipped to $40.1 million from $40.4 million, while net interest margin narrowed three basis points to 2.23%. Average loan yields increased 10 basis points and total interest income rose $2.2 million, or 2.7%, but that was more than offset by lower purchase accounting accretion and reduced loan prepayment penalty income.
Non-interest income fell 2.1% to $5.2 million from $5.3 million, reflecting a $122,000 write-down on one other real estate owned property.
Non-interest expense dropped 6.1% to $31.8 million from $33.9 million. Salary and benefits declined $883,000 to $19.4 million, advertising and marketing fell $365,000 to $381,000, equipment and systems expense eased $126,000 to $3.7 million, and other expense decreased $705,000 to $3.7 million.
Income tax expense decreased to $2.6 million from $3.8 million, pushing the effective tax rate down to 20.7% from 34.9%.
On the balance sheet, total assets increased $95.7 million to $7.78 billion. Loans receivable rose $105.1 million to $5.98 billion, while deposits climbed $123.9 million to $5.83 billion. Investment securities declined $35.0 million to $1.04 billion, and borrowings fell $15.0 million to $1.14 billion.
Annualized loan growth was 7.2%, while deposits grew at an 8.7% annualized pace. The company said it continued to reduce multifamily mortgage exposure.
Asset quality weakened modestly: non-performing assets increased $3.2 million to $56.6 million, or 0.73% of total assets, from 0.70% in the prior quarter. Net charge-offs rose to $277,000 from $49,000. The provision for credit losses edged up to $830,000 from $822,000, and the allowance for credit losses increased to $46.0 million from $45.5 million.
Book value per share declined to $11.64 from $11.84, while tangible book value per share fell to $9.88 from $10.07. The tangible equity to tangible assets ratio was 8.37% at quarter-end.
The board declared a quarterly cash dividend of $0.11 per share, unchanged from the prior quarter. Following these announcements, the company's shares moved 0.0%, and are now trading at a price of $9.06. For the full picture, make sure to review Kearny Financial's 8-K report.
