📄 What This Document Is

This is an 8-K filing, which companies use to announce major news to investors. This specific filing (Exhibit 99.1) is Kearny Financial's third-quarter earnings release for the period ending March 31, 2026. It's the official report card on their financial performance and also announces a new cash dividend for shareholders.

👉 Why it matters: This is how the company tells the world, "Here's how we did last quarter, and here's our next shareholder payment."

🏦 What The Company Does

In simple terms, Kearny Financial Corp. (trading as KRNY on NASDAQ) is a bank holding company. Its main business is operating Kearny Bank, a traditional community bank. They take in deposits from customers and make loans (like mortgages and business loans) to people and companies in their local areas, primarily in New Jersey and surrounding states.

💰 Financial Highlights

Here’s the core of their quarterly performance:

• Net Income: Earned $10.1 million ($0.16 per share), up slightly from $9.4 million last quarter.
• Profit Margin Expansion: Their Net Interest Margin (NIM) – the difference between what they earn on loans and pay on deposits – grew to 2.21%. This is the sixth straight quarter of improvement.
• Key Revenue Driver: Net Interest Income (the raw profit from lending) was $39.2 million, up from $38.0 million.
• Dividend Declared: The Board approved a $0.11 per share cash dividend. It will be paid on May 20, 2026, to shareholders who own the stock on May 6, 2026.

👉 Why it matters: They are making more profit from their core lending business each quarter, which is a sign of effective management in the current interest rate environment.

🔄 Strategic Moves & Operations

Management highlighted three major strategic actions:

1. Loan Portfolio Remixing: They are actively shifting their loan book. They grew commercial business loans by 18.5%, construction loans by 14.3%, and home equity loans by 4.0%, while reducing riskier multifamily mortgage exposure.
2. Building the Deposit Team: They hired four new officers for a Corporate Banking team to attract more business deposits and created a new Specialty Deposits team to find new funding sources.
3. Efficiency Project: They partnered with a consulting firm, The Lab Consulting, to streamline operations, improve automation, and enhance the customer experience.

👉 Why it matters: They aren't just waiting for good results; they're actively changing their business mix to drive future growth and stability.

📊 Balance Sheet Snapshot

Here's what they own and owe as of March 31, 2026:

• Total Assets: $7.61 billion (a tiny decrease of 0.2%).
• Loans: $5.78 billion (up 0.4%, reflecting their new commercial focus).
• Deposits: $5.73 billion (up 0.3%, the lifeblood of a bank).
• Borrowings: $1.06 billion (down 3.2%, as they used less short-term debt).
• Emergency Funding: They have a strong safety net with $2.45 billion in available borrowing capacity from the FHLB and Federal Reserve.

👉 Why it matters: Their balance sheet is large and stable, with plenty of backup cash available if needed, which is a key sign of financial health.

🔍 Asset Quality & Capital

This section checks the health of their loans and their financial cushion.

• Problem Loans: Non-performing assets were $52.4 million (0.69% of total assets), a small increase from last quarter.
• Loan Losses: They wrote off $626,00 in bad loans during the quarter.
• Safety Cushion: They set aside $391,000 as a provision for future potential loan losses.
• Capital Strength: Their Tangible Equity to Tangible Assets ratio was a solid 8.65%, and all regulatory capital ratios are comfortably above requirements.

👉 Why it matters: While problem loans ticked up slightly, the levels are still low, and the bank maintains a strong capital buffer to absorb unexpected losses.

🔮 What's Next

Management's commentary points to a clear future direction:

• Continue the loan portfolio diversification away from multifamily mortgages.
• Leverage the new corporate and specialty deposit teams to grow funding.
• Implement efficiency gains from the consulting partnership to improve profits.
• They expect these actions to lead to "continued earnings momentum" and "long-term shareholder value."

👉 Why it matters: The company has a clear, multi-pronged plan for growth and isn't standing still.

⚖️ The Big Picture

👍 Strengths:

• Consistent, quarter-over-quarter profit margin growth.
• Proactive strategic shifts in lending and deposit gathering.
• Strong capital position and ample liquidity.

⚠️ Risks & Watchpoints:

• Small increase in problem loans (non-performing assets).
• Non-interest income was boosted by a one-time $1.0M gain from a property sale; core fee income was down.
• Operating in a challenging interest rate environment where managing margins is difficult.

🧠 The Analogy

Think of Kearny Bank as a local café that's carefully adjusting its menu and suppliers. Instead of relying too much on one popular but volatile item (multifamily loans), they're adding more popular, steady sellers (commercial & industrial loans). They've also hired new staff to attract bigger catering orders (corporate deposits) and brought in a consultant to make the kitchen run smoother (operational efficiency). The quarterly report shows their profits are slowly but steadily rising because of these changes.

🧩 Final Takeaway

Kearny Financial is executing a deliberate, multi-year strategy to improve profitability by shifting its loan mix and strengthening its funding sources. The sixth consecutive quarter of margin expansion shows this plan is working, and management is focused on operational efficiency to drive the next phase of growth.

For further information contact: Keith Suchodolski, Senior Executive Vice President and Chief Operating Officer, or Sean Byrnes, Executive Vice President and Chief Financial Officer Kearny Financial Corp. (973) 244-4500