Kearny Financial (KRNY) Q1 2025 earnings summary

Executive summary

• Net income for Q1 FY25 was $6.1 million ($0.10 per diluted share), rebounding from a prior quarter GAAP net loss of $90.1 million due to a $95.3 million goodwill impairment.

• Total assets reached $7.77 billion, up 1.2% from June 30, 2024, driven by higher cash and net loans receivable.

• Deposit base remains granular and diversified, with total deposits at $5.47 billion, up 6.1% sequentially.

• Maintains a top 10 position among New Jersey-based financial institutions by assets and deposits.

• Quarterly cash dividend of $0.11 per share declared, payable November 20, 2024.

Financial highlights

• Net interest margin contracted to 1.80%, down 30 bps year-over-year, but showed monthly improvement within the quarter.

• Net interest income fell to $32.4 million, as higher funding costs outpaced modest loan growth.

• Non-interest expense was $29.8 million, down sharply from the prior quarter due to the goodwill impairment.

• Non-performing assets improved to 0.51% of total assets, with net charge-offs at 0.01% of average loans.

• Allowance for credit losses steady at 0.78% of total loans, with provision for credit losses at $108,000.

Outlook and guidance

• Management expects further Fed rate cuts to benefit the liability-sensitive balance sheet.

• Liquidity remains robust, with available liquidity 2.7x greater than estimated uninsured deposits and $2.06 billion in secured borrowing capacity.

• Ongoing focus on credit quality, conservative underwriting, and proactive risk management.

• No material changes to risk factors or critical accounting policies reported for the quarter.