Executive Summary
Kearny Financial Corp (KRNY) delivered a solid third quarter for 2025 with revenue of $83.90 million and net income of $6.65 million, translating to earnings per share of $0.11. The company posted an operating margin of 9.35% and a net profit margin of 7.92%, underscoring acceptable profitability in a competitive regional banking environment. On a year-over-year basis, revenue declined by 2.8% while net income fell 10.1%; however, quarter-over-quarter figures show modest improvement in revenue (up ~3%) and flat to modest increases in net income and EPS, reflecting ongoing cost discipline and a stable expense base.
From a balance sheet perspective, KRNY remains a capital-light, highly leveraged entity with total assets of $7.733 billion and total stockholders’ equity of $748 million. The balance sheet features a large portfolio of long-term investments and goodwill, contributing to a low cash ratio and a tight liquidity profile (current ratio ~0.20; cash ratio ~0.021). The bank’s liquidity appears supported by substantial long-term investments and cash, but ongoing liquidity management will be critical as funding needs evolve.
The overall risk-reward profile for KRNY remains mixed. The company benefits from a stable quarterly operating performance and a moderate dividend profile, but reported returns on assets and equity are subdued (ROA ~0.086%, ROE ~0.89%), signaling limited efficiency relative to peers. The stock trades at a price-to-book ratio of approximately 0.52, indicating a potential undervaluation relative to tangible book value but also reflecting uncertainty about earnings power and rate sensitivity within a competitive Northeast corridor market. Management did not issue formal forward-looking targets in the provided materials; the outlook will hinge on net interest margin (NIM) trajectories, credit quality in CRE exposures, and ongoing cost discipline.
Investment thesis: Maintain a cautious stance with a bias toward selective exposure to KRNY’s regional growth opportunities and capital stability. Upside potential could stem from improved NIM in a rising-rate environment, stabilized credit metrics, and efficiency gains, while downside risk includes persistent NIM compression, elevated loan losses in CRE, and liquidity dynamics in a pressured rate environment.
Key Performance Indicators
QoQ: -90.33% | YoY:-20.82%
Key Insights
Revenue: $83,896,000; YoY change: -2.77%; QoQ change: +2.96%
Operating Income: $7,848,000; YoY change: -20.82%; QoQ change: -90.33% (margin 9.35%)
Net Income: $6,648,000; YoY change: -10.13%; QoQ change: +1.25% (net margin 7.92%)
EPS: $0.11; YoY change: -8.33%; QoQ change: 0.00%
EBITDA: $7,848,000; EBITDA margin: 9.35%
Net Income Margin: 7.92%
Earnings Per Share Diluted: $0.11; Weighted Avg Shares: ~62.55–62.71 million
Cash Flow Highlights: Operating cash flow $16.80 million; Free cash flow $1...
Financial Highlights
Revenue: $83,896,000; YoY change: -2.77%; QoQ change: +2.96%
Operating Income: $7,848,000; YoY change: -20.82%; QoQ change: -90.33% (margin 9.35%)
Net Income: $6,648,000; YoY change: -10.13%; QoQ change: +1.25% (net margin 7.92%)
EPS: $0.11; YoY change: -8.33%; QoQ change: 0.00%
EBITDA: $7,848,000; EBITDA margin: 9.35%
Net Income Margin: 7.92%
Earnings Per Share Diluted: $0.11; Weighted Avg Shares: ~62.55–62.71 million
Cash Flow Highlights: Operating cash flow $16.80 million; Free cash flow $16.66 million; Net change in cash -$14.46 million; Cash at end of period $126.10 million; Cash at beginning $141.55 million
Balance Sheet Depth: Total assets $7.733B; Total liabilities $6.985B; Total stockholders’ equity $748.11M; Short-term debt $185M; Long-term debt $1.029B; Total debt $1.214B; Net debt $1.089B
Liquidity Profile: Current assets $1.159B; Current liabilities $5.892B; Current ratio 0.20; Quick ratio 0.20; Cash ratio 0.021; Cash and short-term investments $1.129B; Long-term investments $5.932B; Total investments $6.937B; Goodwill $113.5M; Intangibles $1.56M; Goodwill and intangibles $115.08M
Capital & Leverage: Debt to capital 0.619; Debt to equity 1.623; Equity multiplier 10.34; Dividend yield 1.76%; Dividend payout ratio 1.03 (approx. 103% of earnings); P/B 0.523; P/S 4.67; P/E 14.72
Efficiency: Operating cash flow to sales ratio ~0.20; Free cash flow margin ~0.266 (per share basis given in data); Interest coverage ~0.173 (indicative of low cushion in interest expense framework)
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
83.90M |
-2.77% |
2.96% |
| Operating Income |
7.85M |
-20.82% |
-90.33% |
| Net Income |
6.65M |
-10.13% |
1.25% |
| EPS |
0.11 |
-8.33% |
0.00% |
Key Financial Ratios
operatingProfitMargin
9.35%
operatingCashFlowPerShare
$0.27
freeCashFlowPerShare
$0.27
dividendPayoutRatio
103.4%
Management Commentary
Note: No earnings call transcript was provided in the data set. As a result, actionable management quotes or themes from a live Q&A session are not available. If a transcript becomes available, we would distill key themes by quadrant (Strategy, Operations, Market Conditions) and attach quotes with context and significance.
Forward Guidance
Management did not publish explicit forward guidance for KRNY in the provided materials. Qualitative read suggests near-term emphasis on: (1) maintaining stable efficiency and controlling non-interest expenses; (2) managing credit risk in a Northeast CRE-focused book; (3) preserving liquidity given the current ratio and asset mix; (4) potentially modest loan growth with a focus on core deposit stability. Given the industry backdrop, achievability of any formal targets cannot be assessed without explicit numerical guidance. Investors should monitor: net interest margin trend as rates evolve, loan growth in commercial real estate and multifamily segments, deposit-cost dynamics, and ongoing capital adequacy.