Kearny Financial KRNY Form 8-K filing Earnings

Exhibit 99.1

FOR IMMEDIATE RELEASE

July 23, 2026

For further information contact:

Keith Suchodolski, Senior Executive Vice President and Chief Operating Officer, or Sean Byrnes, Executive Vice President and Chief Financial Officer (973) 244-4500

KEARNY FINANCIAL CORP. ANNOUNCES FOURTH QUARTER AND FISCAL YEAR END 2026 RESULTS

AND DECLARATION OF $0.11 PER SHARE CASH DIVIDEND

Fairfield, N.J., July 23, 2026 – Kearny Financial Corp. (NASDAQ GS: KRNY) (the “Company”), the holding company of Kearny Bank (the “Bank”), reported net income for the quarter ended June 30, 2026 of $7.2 million, or $0.11 per diluted share, compared to $10.1 million, or $0.16 per diluted share, for the quarter ended March 31, 2026. For the fiscal year ended June 30, 2026, the Company reported net income of $36.3 million, or $0.57 per diluted share, compared to $26.1 million, or $0.42 per diluted share, for the fiscal year ended June 30, 2025.

As explained in additional detail below, net income for the quarter ended June 30, 2026 was impacted by various non-recurring items, including a $1.6 million discrete tax charge, $745,000 of severance expense, and $262,000 of other real estate owned (“OREO”) acquisition expense.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.11 per share, payable on August 26, 2026, to stockholders of record as of August 12, 2026.

Craig L. Montanaro, President and Chief Executive Officer, commented, “I am pleased to report our fiscal 2026 performance, which reflected a 39% increase in net income compared to the prior fiscal year, continued expansion of our net interest margin, and growth in both loans and deposits. Fiscal 2026 was a year of meaningful progress and reflected the successful execution of our strategic plan, including the continued remixing of our balance sheet, enhanced operational efficiency, and our focus on building deeper commercial banking relationships.”

Mr. Montanaro continued, “During the fiscal year, we invested in growth initiatives across commercial banking, treasury management, and technology. We added experienced banking talent and expanded capabilities designed to deepen commercial client relationships and support loan and deposit growth. These investments are strengthening our ability to attract high-quality commercial relationships and further our evolution into a commercially focused banking franchise.”

Mr. Montanaro concluded, “As we enter fiscal 2027, we remain focused on executing our strategic plan through organic growth, operational excellence, and the continued enhancement of the client experience. We believe the investments we have made in talent, technology, and operating efficiency, coupled with tailwinds from low-coupon loan repricing, position us well to continue delivering sustainable earnings growth and long-term value for our shareholders.”

Strategic Achievements

• Expanded Corporate Banking capabilities through the recruitment of experienced relationship-focused bankers.
• Launched a Specialty Deposits team focused on 1031 exchange, escrow, trust, and estate account relationships, expanding the Bank's commercial deposit capabilities and strengthening its presence in key New York markets.
• Advanced a Company-wide operational excellence initiative focused on process improvement, adoption of automation and artificial intelligence, and enhancements of the client experience.
• Executed a strategic realignment of the retail banking organization to create a dedicated outside sales team focused on small business relationship development, while retaining a peer-leading level of service throughout the branch network.

Fiscal Year 2026 Highlights

• Net interest margin expanded 30 basis points to 2.18%, extending the momentum of margin improvement for the second consecutive year.
• Pre-tax, pre-provision earnings per share increased 47.0% to $0.78 per diluted share.
• Continued the strategic remixing of the loan portfolio by growing commercial and industrial, construction, and home equity loans by 61.4%, 48.1% and 57.4%, respectively, while strategically reducing multifamily mortgage exposure.
• Improved efficiency ratio by 5.90%, while investing in new products, capabilities, and our people.
• Tangible book value per share increased $0.30, or 3.1%, to $10.07.

Balance Sheet

• Total assets were $7.68 billion at June 30, 2026, an increase of $74.5 million, or 1.0%, from March 31, 2026 and a decrease of $58.2 million, or 0.8%, from June 30, 2025.
• Investment securities totaled $1.07 billion at June 30, 2026, a decrease of $22.7 million, or 2.1%, from March 31, 2026 and a decrease of $62.0 million, or 5.5%, from June 30, 2025.
• Loans receivable totaled $5.88 billion at June 30, 2026, an increase of $96.1 million, or 1.7%, from March 31, 2026 and an increase of $62.4 million, or 1.1%, from June 30, 2025.
• Deposits were $5.71 billion at June 30, 2026, a decrease of $19.5 million, or 0.3%, from March 31, 2026 and an increase of $34.4 million, or 0.6%, from June 30, 2025. Deposit balances reflected the migration of $170.1 million from consumer interest-bearing products to non-interest bearing products.
• Borrowings were $1.15 billion at June 30, 2026, an increase of $90.0 million, or 8.5%, from March 31, 2026 and a decrease of $106.5 million, or 8.5%, from June 30, 2025.
• At June 30, 2026, the Company maintained available secured borrowing capacity with the Federal Home Loan Bank and the Federal Reserve Discount Window of $2.35 billion, representing 30.6% of total assets.

Earnings

Net Interest Income and Net Interest Margin

• Net interest margin increased by five basis points to 2.26% for the quarter ended June 30, 2026 and by 30 basis points to 2.18% for the year ended June 30, 2026. The quarterly improvement was driven by higher loan yields and balances and a reduction in interest-bearing deposits, partially offset by higher costs on interest-bearing liabilities. The year-over-year improvement reflected higher loan yields and balances and lower costs on interest-bearing liabilities, partially offset by lower yields and balances on investment securities and other interest-earning assets.
• For the quarter ended June 30, 2026, net interest income increased $1.1 million, or 2.9%, to $40.4 million from $39.2 million for the quarter ended March 31, 2026. Included in net interest income for the quarters ended June 30, 2026 and March 31, 2026, respectively, was purchase accounting accretion of $537,000 and $552,000, and loan prepayment penalty income of $622,000 and $422,000.
• For the year ended June 30, 2026, net interest income increased $20.3 million, or 15.1%, to $155.3 million from $134.9 million for the year ended June 30, 2025. Included in net interest income for the years ended June 30, 2026 and 2025, respectively, was purchase accounting accretion of $2.2 million and $2.4 million and loan prepayment penalty income of $2.1 million and $783,000.

Non-Interest Income

• For the quarter ended June 30, 2026, non-interest income decreased $781,000, or 12.8%, to $5.3 million from $6.1 million for the quarter ended March 31, 2026, primarily driven by the absence of a non-recurring pre-tax gain of $1.0 million recorded in the prior period. Excluding this non-recurring item, non-interest income increased $218,000, or 4.3%, from $5.1 million, primarily driven by an increase in loan related fees and charges and a higher gain on sale of loans.
• Fees and service charges increased $144,000 to $1.1 million for the quarter ended June 30, 2026 from $922,000 for the quarter ended March 31, 2026.
• Gain on sale of loans increased $123,000 to $316,000 for the quarter ended June 30, 2026 from $193,000 for the quarter ended March 31, 2026.
• For the year ended June 30, 2026, non-interest income increased $3.8 million to $22.8 million from $19.1 million for the year ended June 30, 2025, primarily driven by $1.8 million in non-recurring pre-tax gains on the sale of properties held for sale in the current period, and increases in loan- and branch-related fees and charges.

Non-Interest Expense

• For the quarter ended June 30, 2026, non-interest expense increased $1.6 million, or 4.8%, to $33.9 million from $32.3 million for the quarter ended March 31, 2026. Excluding a non-recurring charge of $745,000 related to severance, non-interest expense increased $806,000, primarily reflecting higher salary and benefit costs, OREO acquisition-related expenses of $262,000, and a provision for unfunded commitments of $264,000, partially offset by a lower net occupancy expense.
• Salary and benefits expense increased $1.0 million to $20.3 million for the quarter ended June 30, 2026 from $19.3 million for the quarter ended March 31, 2026, primarily due to a non-recurring charge of $745,000 related to severance associated with a strategic realignment of the Company’s retail banking organization.
• Net occupancy expense of premises decreased $401,000 to $2.9 million for the quarter ended June 30, 2026 from $3.3 million for the quarter ended March 31, 2026, primarily driven by the absence of snow removal expenses recorded in the prior period.
• Other expense increased $942,000 to $4.4 million for the quarter ended June 30, 2026, from $3.5 million for the quarter ended March 31, 2026, primarily due to a non-recurring OREO acquisition-related expense of $262,000, a reserve on unfunded commitments of $264,000 due to growth in construction loans, compared to an $86,000 reserve reversal in the prior period, and higher professional and other fees. Remaining changes reflected normal operating fluctuations.
• For the year ended June 30, 2026, non-interest expense increased $8.4 million, or 6.9%, to $129.0 million from $120.6 million for the year ended June 30, 2025, primarily driven by higher salary and benefits expense and other expense. Salary and benefits expense increased due to annual merit increases, higher incentive compensation, and a non-recurring severance charge, while other expense increased primarily as a result of higher professional fees, loan related expenses, and the non-recurring charges discussed above.

Income Taxes

• Income tax expense totaled $3.8 million for the quarter ended June 30, 2026 compared to $2.5 million for the quarter ended March 31, 2026, resulting in an effective tax rate of 34.9% and 19.8%, respectively. Income tax expense increased due to the establishment of a valuation allowance of $1.6 million against a deferred tax asset related to certain legacy stock-based compensation awards.
• Income tax expense totaled $11.1 million for the year ended June 30, 2026 compared to $4.9 million for the year ended June 30, 2025. The increase in income tax expense was primarily driven by higher pre-tax income in the current year period and the establishment of a valuation allowance of $1.6 million, as discussed above.

Asset Quality

• Non-performing assets increased to $53.4 million, or 0.70% of total assets, at June 30, 2026, from $52.4 million, or 0.69% of total assets, at March 31, 2026, and from $45.6 million, or 0.59% of total assets, at June 30, 2025. Included in non-performing assets at June 30, 2026 were two foreclosed properties with an aggregate carrying value of $5.5 million that were reclassified from non-performing loans to OREO during the quarter.
• Net charge-offs totaled $49,000, or less than 0.01% of average loans, on an annualized basis, for the quarter ended June 30, 2026, compared to $626,000, or 0.04% of average loans, on an annualized basis, for the quarter ended March 31, 2026. For the year ended June 30, 2026, net charge-offs totaled $2.4 million, or 0.04% of average loans, compared to $1.1 million, or 0.02% of average loans, for the year ended June 30, 2025.
• For the quarter ended June 30, 2026, the Company recorded a provision for credit losses of $822,000, compared to $391,000 for the quarter ended March 31, 2026. The provision for credit losses for the quarter ended June 30, 2026 was primarily driven by loan growth. For the years ended June 30, 2026 and June 30, 2025, the Company recorded a provision for credit losses of $1.7 million and $2.4 million, respectively.
• The allowance for credit losses (“ACL”) was $45.5 million, or 0.77% of total loans, at June 30, 2026, an increase of $773,000 from $44.7 million, or 0.77% of total loans, at March 31, 2026. The ACL was $46.2 million, or 0.79% of total loans, at June 30, 2025.

Capital

• For the quarter ended June 30, 2026, book value per share and tangible book value per share increased $0.05, or 0.4%, to $11.84 and $10.07, respectively, compared to the prior period. - At June 30, 2026, total stockholders’ equity included after-tax net unrealized losses on securities available for sale of $68.5 million, partially offset by after-tax unrealized gains on derivatives of $4.8 million. After-tax net unrecognized losses on securities held to maturity of $8.4 million were not reflected in total stockholders’ equity. - At June 30, 2026, the Company’s tangible equity to tangible assets ratio equaled 8.62% and the regulatory capital ratios of both the Company and the Bank were in excess of the levels required by federal banking regulators to be classified as “well-capitalized” under regulatory guidelines.

Consolidated Balance Sheets

(Unaudited)

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

(2) Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.

Performance Ratio Highlights

(Unaudited)

(1) The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.

(2) Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.

(3) Net interest income divided by average interest-earning assets.

(4) Non-interest expense divided by the sum of net interest income and non-interest income.

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

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

(2) Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.

Performance Ratio Highlights

(Unaudited)

(1) The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.

(2) Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.

(3) Net interest income divided by average interest-earning assets.

(4) Non-interest expense divided by the sum of net interest income and non-interest income.

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

• (Unaudited)
• (Unaudited)
• (Unaudited)
• (Audited)_

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

(2) Tangible book value equals total stockholders' equity reduced by goodwill and core deposit intangible assets.

(1) Uninsured deposits of Kearny Bank.

(2) Uninsured deposits of Kearny Bank adjusted to exclude deposits of its wholly-owned subsidiary and its holding company and collateralized deposits of state and local governments.

Performance Ratio Highlights

(1) The yield on tax-exempt investment securities has not been adjusted to reflect their tax-effective yield.

(2) Interest income divided by average interest-earning assets less interest expense divided by average interest-bearing liabilities.

(3) Net interest income divided by average interest-earning assets.

(4) Non-interest expense divided by the sum of net interest income and non-interest income.

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

The following tables provide a reconciliation of certain financial measures calculated in accordance with Generally Accepted Accounting Principles (“GAAP”) (as reported) and non-GAAP measures. These non-GAAP measures provide additional information, which allow readers to evaluate the ongoing performance of the Company. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.

Reconciliation of GAAP to Non-GAAP

(Unaudited)

Reconciliation of GAAP to Non-GAAP

(Unaudited)

Reconciliation of GAAP to Non-GAAP

(Unaudited)

Reconciliation of GAAP to Non-GAAP

(Unaudited)