Kearny Financial Corp.

Kearny Financial Corp. operates as a Maryland corporation and the holding company for Kearny Bank, a nonmember New Jersey-chartered savings bank, with its primary business being the ownership and operation of the Bank, which attracts deposits from the general public and uses these deposits, together with other funds, to originate or purchase loans for its portfolio and for sale into the secondary market ¹. The Bank's deposits are federally insured by the Deposit Insurance Fund as administered by the FDIC, and the Bank is primarily regulated by the New Jersey Department of Banking and Insurance and, as a nonmember bank, the FDIC ². The Company operates from its administrative headquarters in Fairfield, New Jersey, and as of June 30, 2026, had 40 branch offices ³. The primary market area consists of counties in New Jersey, including Bergen, Essex, Hudson, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, and Union, and Kings (Brooklyn) and Richmond (Staten Island) counties in New York ⁴.

The industry is highly competitive, with the Company facing substantial competition in attracting deposits and originating loans from a large concentration of financial institutions in its market area, including significantly larger institutions with greater financial and technological resources and lending limits ⁵. Competition also comes from other insured depository institutions in the primary market area, out-of-market depository institutions operating via online channels, and non-depository institutions including mortgage banks, finance companies, insurance companies, brokerage firms, and financial technology companies ⁶. The Company's ability to compete successfully is a significant factor affecting its growth potential and profitability ⁷.

The Company's core business model is to enhance long-term shareholder value by growing a higher-performing commercial banking franchise supported by relationship-based deposits, disciplined balance sheet management, technology-enabled operating efficiencies, and strong risk management practices ⁸. Revenue is generated primarily through the Bank's lending activities, with a loan portfolio primarily comprised of loans collateralized by commercial and residential real estate, augmented by secured and unsecured loans to businesses and consumers, and an investment portfolio primarily comprised of U.S. agency mortgage-backed securities, obligations of state and political subdivisions, corporate bonds, asset-backed securities, and collateralized loan obligations ⁹. The Company seeks to leverage its strong capital position, experienced management team, customer-focused culture, and technology investments to drive sustainable earnings growth ¹⁰.

The loan portfolio is comprised of multi-family mortgage loans, nonresidential mortgage loans, commercial and industrial loans, construction loans, one- to four-family residential mortgage loans, home equity loans, and other consumer loans ¹¹. As of June 30, 2026, multi-family mortgage loans totaled $2,499,894 thousand, representing 42.52% of the total loan portfolio, while nonresidential mortgage loans totaled $1,019,445 thousand (17.34%), commercial and industrial loans totaled $223,927 thousand (3.81%), construction loans totaled $263,200 thousand (4.48%), one- to four-family residential mortgage loans totaled $1,789,865 thousand (30.45%), home equity loans totaled $79,844 thousand (1.36%), and other consumer loans totaled $2,387 thousand (0.04%) ¹². The total loan portfolio was $5,878,562 thousand as of June 30, 2026, with an allowance for credit losses of $45,496 thousand and unaccreted yield adjustments of $3,237 thousand, resulting in total loans, net of $5,829,829 thousand ¹³.

The Company's lending strategies have placed increasing emphasis on the origination of commercial loans in recent years ¹⁴. The commercial loan portfolio, including multi-family, nonresidential, commercial and industrial, and construction loans, totaled $3,782,539 thousand as of June 30, 2026, with a weighted average loan-to-value ratio of 58% ¹⁵. The one- to four-family residential mortgage portfolio had a loan-to-value ratio of 62% ¹⁶, and home equity loans had a loan-to-value ratio of 47% ¹⁷.

During fiscal 2026, the Company consolidated three branch locations as part of its strategy to drive operational efficiency and improve profitability ¹⁸. The Company also continued to invest in treasury management, corporate banking, and business development capabilities to better serve commercial clients and increase relationship-based deposits ¹⁹.

The Company's financial performance for fiscal 2026 reflects its strategic focus on commercial banking growth and core deposit relationships, with a continued emphasis on disciplined balance sheet management and risk management practices ²⁰.

The Company's business strategy includes expanding commercial banking relationships by growing relationships with small and middle-market businesses and professionals, with a focus on increasing commercial loan production across targeted asset classes, including commercial and industrial loans and owner-occupied commercial real estate loans, while deepening treasury management and deposit relationships with business clients ²¹. The Company also aims to grow and deepen core deposit relationships by focusing on growing commercial operating accounts and consumer transaction accounts while expanding existing customer relationships through personalized service and tailored product offerings ²².

The Company is committed to investing in digital banking, process automation, data analytics, artificial intelligence, and other emerging technologies to enhance the client experience, improve employee productivity, and support scalable growth ²³. These technology investments are expected to drive efficiencies across lending, deposits, operations, risk management, and customer engagement ²⁴.

The Company's lending strategy emphasizes higher-return commercial and consumer loan categories, including commercial and industrial loans, owner-occupied commercial real estate loans, and home equity products, which is intended to improve earning asset yields, enhance risk-adjusted returns, and better position the Bank across varying interest rate environments while maintaining strong underwriting standards and credit quality ²⁵.

The Company is committed to continuously enhancing operating efficiency and improving shareholder returns through initiatives including streamlining processes, increasing technology utilization, optimizing staffing levels, and evaluating the branch network to ensure resources are aligned with customer preferences and market opportunities ²⁶.

The Company maintains capital levels above applicable regulatory requirements and internal targets and preserves substantial on- and off-balance sheet liquidity sources to support the safety and soundness of the Bank while providing flexibility to pursue growth opportunities ²⁷.

The Company's forward-looking statements include goals, intentions, and expectations regarding business plans, prospects, growth, and operating strategies, as well as the quality of loan and investment portfolios and estimates of risks and future costs and benefits ²⁸.

The Company faces potential headwinds including general economic conditions nationally or in its market areas that are worse than expected, the imposition of tariffs or other domestic or international governmental policies and retaliatory responses, changes in the amount and trend of loan delinquencies and write-offs, and fluctuations in real estate values and both residential and commercial real estate market conditions ²⁹.

The Company also faces risks from changes in the interest rate environment that could reduce margins and yields, reduce the fair value of financial instruments, reduce origination levels in lending business, or increase the level of defaults, losses, and prepayments on loans ³⁰.

The Company faces significant credit risk from its loan portfolio, which is concentrated in commercial real estate, particularly multi-family mortgage loans totaling $2,499,894 thousand as of June 30, 2026 ³¹. A deterioration in real estate values or economic conditions in the primary market area could lead to increased loan delinquencies and write-offs, adversely affecting the Company's financial condition ³². The Company is also exposed to interest rate risk, as changes in interest rates could reduce net interest margin and the fair value of financial instruments, and increase defaults and prepayments on loans ³³. The Company operates in a highly competitive market with larger institutions that have greater financial and technological resources, which could impact its ability to attract deposits and originate loans profitably ³⁴. Additionally, the Company's forward-looking statements are subject to uncertainties including general economic conditions, governmental policies, and changes in consumer demand, which could cause actual results to differ materially ³⁵.

Management's message emphasizes the objective to enhance long-term shareholder value by growing a higher-performing commercial banking franchise supported by relationship-based deposits, disciplined balance sheet management, technology-enabled operating efficiencies, and strong risk management practices ³⁶. The key strategic priorities for the period ahead include expanding commercial banking relationships, growing and deepening core deposit relationships, leveraging technology, automation, and digital innovation, continuing to strengthen asset mix and earnings profile, driving operational efficiency and improving profitability, and maintaining strong capital, liquidity, and risk management ³⁷.