Executive Summary
Kearny Financial Corp reported a mixed QQ2 2025 performance. Core banking operations generated solid operating earnings, with revenue of $81.485 million and operating income of $81.174 million, yielding an operating margin near 99.6%. However, a substantial non-operating item — total other income and expenses of -$73.357 million — materially reduced pretax income to $7.817 million and net income to $6.566 million, translating to diluted EPS of $0.10–$0.11. The result implies a robust underlying operating platform, but a heavy non-operating hit and a concentration of investments and leverage are shaping the reported profitability profile.
From a liquidity and capital perspective, KRNY exhibits limited near-term liquidity strength (current and quick ratios around 0.20) and a high reliance on long-term investments (total assets of $7.73B, with long-term investments of ~$5.88B). Total debt stands at ~$1.26B, with a debt-to-capitalization of ~62.8%, and free cash flow is negative for the quarter (FCF = -$3.75M). The combination of negative operating cash flow, elevated leverage, and a payout ratio above 100% signals near-term profitability and capital allocation headwinds, even as the shares trade at a discounted multiple to book value.
Compared with regional bank peers, KRNY’s valuation appears attractive on a price-to-book basis (P/B ~0.59) but shows relatively subdued profitability metrics (ROE ~0.88%) and weaker liquidity. The QQ2 2025 results underscore a bifurcated picture: a bank with a potentially compelling core business (high operating income) but with a large one-off or non-operating charge and structural balance-sheet risk that investors must monitor closely.
Key Performance Indicators
QoQ: 119.80% | YoY:310.98%
QoQ: 119.80% | YoY:310.98%
QoQ: 1 030.87% | YoY:1 221.34%
QoQ: 12.70% | YoY:150.00%
Key Insights
Revenue: $81.485 million for QQ2 2025, YoY +310.98%, QoQ +119.80%. Gross profit: $81.485 million (gross margin effectively 100% per reported data).
Operating income: $81.174 million, to revenue of $81.485 million, implying an operating margin of ~99.6% before non-operating items (ratio shown as 0.9961833466).
Total other income/expenses: -$73.357 million, a material drag that compresses pretax income to $7.817 million and net income to $6.566 million; highlights a large non-operating charge or u...
Financial Highlights
Revenue: $81.485 million for QQ2 2025, YoY +310.98%, QoQ +119.80%. Gross profit: $81.485 million (gross margin effectively 100% per reported data).
Operating income: $81.174 million, to revenue of $81.485 million, implying an operating margin of ~99.6% before non-operating items (ratio shown as 0.9961833466).
Total other income/expenses: -$73.357 million, a material drag that compresses pretax income to $7.817 million and net income to $6.566 million; highlights a large non-operating charge or unusual item in the quarter.
Income before tax: $7.817 million; Income tax expense: $1.251 million; Net income: $6.566 million; Net income margin: ~8.06%; Earnings per share (GAAP): $0.11 basic, $0.10 diluted; Weighted average shares outstanding: 62.498 million (diluted 62.63 million).
Cash flow and liquidity: Net cash provided by operating activities: -$2.656 million; Depreciation & amortization: $1.245 million; Change in working capital: -$14.204 million; CFO per share not disclosed; Net cash used in investing activities: $15.774 million (net); Net cash used/provided by financing activities: -$27.138 million; Free cash flow: -$3.752 million; Cash at end of period: $141.554 million vs. cash at beginning: $155.574 million; Net decrease in cash: -$14.02 million.
Balance sheet: Total assets $7.731B; Cash & cash equivalents $141.554M; Short-term investments $1.018B; Cash & short-term investments $1.160B; Total current assets $1.188B; Total non-current assets $6.543B; Goodwill $113.525M; Long-term investments $5.880B; Total liabilities $6.987B; Short-term debt $230.0M; Long-term debt $1.029B; Total debt $1.259B; Total stockholders’ equity $745.0M; Debt ratio ~0.16; Debt to equity ~1.69; Return on assets ~0.0848%; Return on equity ~0.88%; Book value per share ~$11.94 (implied from equity / shares).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
81.49M |
310.98% |
119.80% |
| Gross Profit |
81.49M |
310.98% |
119.80% |
| Operating Income |
81.17M |
1 221.34% |
1 030.87% |
| Net Income |
6.57M |
147.49% |
7.78% |
| EPS |
0.11 |
150.00% |
12.70% |
Key Financial Ratios
operatingProfitMargin
9.05%
operatingCashFlowPerShare
$-0.04
freeCashFlowPerShare
$-0.06
dividendPayoutRatio
104.4%
Management Commentary
No QQ2 2025 earnings call transcript was provided in the data. Therefore, no management quotes or thematic highlights from the call are available to summarize.
Forward Guidance
No explicit forward guidance was provided in the data set for QQ2 2025. Given the large non-operating charge in the quarter and the constrained near-term liquidity profile, management may focus on stabilizing core NII, optimizing the investment portfolio, and controlling non-operating costs. The absence of clear guidance suggests investors should monitor: (1) trend in net interest income and loan growth as rate environment evolves, (2) ongoing liquidity and deposit base stability, (3) trajectory of non-operating items and any impairments, and (4) capital allocation discipline including dividend sustainability given a payout above earnings.