- Kearny Financial Corp. (KRNY, Financial) reported net income of $6.6 million for Q3 fiscal 2025, consistent with the previous quarter, equating to $0.11 per diluted share.
- The company declared a quarterly cash dividend of $0.11 per share, payable on May 21, 2025.
- Kearny Financial's net interest margin expanded by 8 basis points to 1.90%, driven by growth in lower-cost deposits.
Kearny Financial Corp. (KRNY) announced its third-quarter fiscal 2025 results, revealing a net income of $6.6 million, or $0.11 per diluted share. This performance mirrors the previous quarter's net income, while showcasing a slight improvement in earnings per share from $0.10. The company has declared a quarterly cash dividend of $0.11 per share, scheduled for payment on May 21, 2025, to shareholders on record as of May 7, 2025.
In its core banking metrics, Kearny demonstrated positive momentum. The net interest margin widened by 8 basis points to 1.90%, primarily influenced by the paydown of borrowings through growth in lower-cost deposits. This contributed to a $1.4 million increase in net interest income, bringing it to $34.0 million for the quarter.
The bank's balance sheet remains robust with total assets reaching $7.73 billion, an increase from the previous quarter. Loans receivable saw an increase of $54.4 million, or 0.9%, totaling $5.85 billion. Additionally, deposits grew by $36.3 million, closing the quarter at $5.71 billion. Despite the volatile interest rate environment, Kearny's asset quality remains stable with non-performing assets at 0.49% of total assets and minimal net charge-offs at 0.03% of average loans (annualized).
However, a notable concern is the dividend payout ratio of 104.3%, which implies that the bank is currently distributing more in dividends than it earns. While this level is managed in the short term due to the bank's capital position, it highlights the need for earnings growth to sustain such payouts in the long term.
Kearny Financial maintains significant liquidity with an available secured borrowing capacity of $2.42 billion, which is 31.3% of total assets, offering ample financial flexibility moving forward. The management anticipates continued strong margin expansion into the next quarter, indicating potential for enhanced earnings to further support dividend distributions.
