Kearny Financial Corp.
For the period ended Mar 31, 2026. Filed May 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
KRNY$9.01-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-05.
0001617242-26-000004
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001617242-26-000009
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 98 current paragraphs.
41 unchanged; 55 reworded; 2 added; 0 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Other non-interest expense increased $162,000 to $3.5 million for the quarter ended March 31, 2026, from $3.3 million for the quarter ended March 31, 2025, primarily driven by higher professional fees and loan related legal expenses, partially offset by a decline in fraud losses.
Current report
Other income increased $2.0 million to $4.5 million for the nine months ended March 31, 2026, compared to $2.5 million for the nine months ended March 31, 2025, primarily driven by non-recurring pre-tax gains of $1.8 million on the sale of three former branch locations held for sale.
Reworded paragraphs (55)
Previous wording
This Quarterly Report on Form 10-Q may include certain forward-looking statements based on current management expectations. Such forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may”, “will”, “believe”, “expect”, “estimate”, “anticipate”, “continue”, or similar terms or variations on those terms, or the negative of those terms. The actual results of the Company could differ materially from those management expectations. This includes statements regarding general economic and geopolitical conditions, including potential recessionary conditions and the imposition of tariffs or other domestic or international governmental policies, legislative and regulatory changes, monetary and fiscal policies of the federal government, the effects of any federal government shutdown, changes in tax policies, rates and regulations of federal, state and local tax authorities and failure to integrate or profitably operate acquired businesses. Additional potential factors include changes in interest rates, the rate of inflation, deposit flows, cost of funds, demand for loan products and financial services, competition and changes in the quality or composition of loan and investment portfolios of the Company. Other factors that could cause future results to vary from current management expectations include changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and prices. Further description of the risks and uncertainties to the business are included in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025, under “Item 1A. Risk Factors.”
Current wording
This Quarterly Report on Form 10-Q may include certain forward-looking statements based on current management expectations. Such forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may”, “will”, “believe”, “expect”, “estimate”, “anticipate”, “continue”, or similar terms or variations on those terms, or the negative of those terms. The actual results of the Company could differ materially from those management expectations. This includes statements regarding general economic and geopolitical conditions, including military conflicts, potential recessionary conditions and the imposition of tariffs or other domestic or international governmental policies and any retaliatory responses, legislative and regulatory changes, monetary and fiscal policies of the federal government, the effects of any federal government shutdown, changes in tax policies, rates and regulations of federal, state and local tax authorities and failure to integrate or profitably operate acquired businesses. Additional potential factors include changes in interest rates, the rate of inflation, deposit flows, cost of funds, demand for loan products and financial services, competition and changes in the quality or composition of loan and investment portfolios of the Company. Other factors that could cause future results to vary from current management expectations include changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and prices. Further description of the risks and uncertainties to the business are included in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025, under “Item 1A. Risk Factors.”
Previous wording
Executive Summary. Total assets decreased $119.6 million to $7.62 billion at December 31, 2025 from $7.74 billion at June 30, 2025. The decrease primarily reflected decreases in net loans receivable, cash and cash equivalents, investment securities and declines in the market values of interest rate derivatives.
Current wording
Executive Summary. Total assets decreased $132.8 million to $7.61 billion at March 31, 2026 from $7.74 billion at June 30, 2025. The decrease primarily reflected decreases in net loans receivable, cash and cash equivalents, and investment securities.
Previous wording
Investment Securities. Investment securities available for sale decreased $12.6 million to $1.00 billion at December 31, 2025, from $1.01 billion at June 30, 2025. This decrease was driven by principal repayments of $216.8 million, partially offset by purchases of $188.1 million and a $16.0 million increase in the fair value of the portfolio to a net unrealized loss of $96.2 million.
Current wording
Investment Securities. Investment securities available for sale decreased $29.6 million to $983.3 million at March 31, 2026, from $1.01 billion at June 30, 2025. This decrease was driven by principal repayments of $243.2 million, partially offset by purchases of $198.1 million and a $15.3 million increase in the fair value of the portfolio to a net unrealized loss of $96.8 million.
Previous wording
Investment securities held to maturity decreased $7.4 million to $112.8 million at December 31, 2025 from $120.2 million at June 30, 2025. This decrease was driven by principal repayments of $7.5 million.
Current wording
Investment securities held to maturity decreased $9.6 million to $110.6 million at March 31, 2026 from $120.2 million at June 30, 2025. This decrease was driven by principal repayments of $9.7 million.
Previous wording
Loans Held-for-Sale. Loans held-for-sale totaled $8.8 million at December 31, 2025 as compared to $5.9 million at June 30, 2025 and are reported separately from the balance of net loans receivable. During the six months ended December 31, 2025, we sold $59.3 million of residential mortgage loans, resulting in a gain on sale of $423,000.
Current wording
Loans Held-for-Sale. Loans held-for-sale totaled $12.2 million at March 31, 2026 as compared to $5.9 million at June 30, 2025 and are reported separately from the balance of net loans receivable. During the nine months ended March 31, 2026, we sold $86.1 million of residential mortgage loans, resulting in a gain on sale of $616,000.
Previous wording
Net Loans Receivable. Net loans receivable decreased $58.3 million, or 1.0%, to $5.71 billion at December 31, 2025 from $5.77 billion at June 30, 2025. Details regarding the change in the loan portfolio, by loan segment, are presented below:
Current wording
Net Loans Receivable. Net loans receivable decreased $32.3 million, or 0.6%, to $5.73 billion at March 31, 2026 from $5.77 billion at June 30, 2025. Details regarding the change in the loan portfolio, by loan segment, are presented below:
Previous wording
Commercial loan origination volume for the six months ended December 31, 2025 totaled $161.7 million, comprised of $50.7 million of commercial mortgage loan originations, $62.7 million of commercial business loan originations and construction loan disbursements of $48.4 million. Purchases of commercial business loans totaled $30.4 million for the same period.
Current wording
Commercial loan origination volume for the nine months ended March 31, 2026 totaled $284.2 million, comprised of $107.8 million of commercial mortgage loan originations, $90.5 million of commercial business loan originations and construction loan disbursements of $86.0 million. Purchases of commercial business loans totaled $68.7 million for the same period.
Previous wording
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $64.7 million for the six months ended December 31, 2025. Home equity loan and line of credit origination volume for the same period totaled $19.6 million.
Current wording
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $90.5 million for the nine months ended March 31, 2026. Purchases of residential mortgage loans totaled $36.3 million for the same period. Home equity loan and line of credit origination volume for the same period totaled $29.4 million.
Previous wording
(1)At December 31, 2025 and June 30, 2025, includes $896,121 and $891,995 of non-owner occupied commercial real estate (“CRE”) loans with an LTV of 53% in each period, respectively, and includes $94,057 and $94,561 of owner occupied CRE loans with an LTV of 48% in each period, respectively.
Current wording
(1)At March 31, 2026 and June 30, 2025, nonresidential mortgage includes $920,630 and $891,995, respectively, of non-owner occupied commercial real estate (“CRE”) loans with an LTV of 53% in each period, and includes $91,792 and $94,561, respectively, of owner occupied CRE loans with an LTV of 47% and 48%, respectively.
Previous wording
Nonperforming Assets. Nonperforming assets reflected an increase of $5.7 million to $51.3 million, or 0.67% of total assets, at December 31, 2025, from $45.6 million, or 0.59% of total assets, at June 30, 2025, respectively. The increase in nonperforming assets was largely attributable to an increase in nonperforming multi-family mortgage loans, partially offset by a decrease in nonperforming residential mortgage loans.
Current wording
Nonperforming Assets. Nonperforming assets increased $6.8 million to $52.4 million, or 0.69% of total assets, at March 31, 2026, from $45.6 million, or 0.59% of total assets, at June 30, 2025, respectively. The increase in nonperforming assets was largely attributable to an increase in nonperforming multi-family mortgage loans, partially offset by a decrease in nonperforming residential mortgage loans.
Previous wording
Allowance for Credit Losses (“ACL”). At December 31, 2025 the ACL totaled $45.0 million, or 0.78% of total loans, compared to $46.2 million, or 0.79% of total loans, at June 30, 2025. The decrease for the six months ended December 31, 2025 was largely attributable to net charge-offs of $1.7 million, partially offset by a provision for credit losses of $485,000.
Current wording
Allowance for Credit Losses (“ACL”). At March 31, 2026 the ACL totaled $44.7 million, or 0.77% of total loans, compared to $46.2 million, or 0.79% of total loans, at June 30, 2025. The decrease for the nine months ended March 31, 2026 was largely attributable to net charge-offs of $2.3 million, partially offset by a provision for credit losses of $876,000.
Previous wording
Other Assets. The aggregate balance of other assets, including premises and equipment, FHLB stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance (“BOLI”), deferred income taxes, and other assets, decreased $24.2 million to $643.1 million at December 31, 2025 from $667.3 million at June 30, 2025. The decrease in the balance of these other assets during the six months ended December 31, 2025 primarily reflected a decrease in the market value of interest rate derivatives, a decrease in FHLB stock and a decrease in properties held for sale, partially offset by an increase in BOLI. The remaining change generally reflected normal operating fluctuations within these line items.
Current wording
Other Assets. The aggregate balance of other assets, including premises and equipment, FHLB stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance (“BOLI”), deferred income taxes, and other assets, decreased $24.0 million to $643.3 million at March 31, 2026 from $667.3 million at June 30, 2025. The decrease in the balance of these other assets during the nine months ended March 31, 2026 primarily reflected a decrease in the market value of interest rate derivatives, a decrease in FHLB stock and a decrease in properties held for sale, partially offset by an increase in BOLI. The remaining change generally reflected normal operating fluctuations within these line items.
Previous wording
Deposits. Total deposits increased $36.3 million, or 0.6%, to $5.71 billion at December 31, 2025 from $5.68 billion at June 30, 2025. Included in total deposits are retail and brokered time deposits of $1.18 billion and $757.4 million, respectively, at December 31, 2025, and $1.22 billion and $757.7 million, respectively, at June 30, 2025. The increase in non-interest bearing demand deposits was largely the result of migrating $69.8 million from a consumer interest bearing product to a non-interest bearing product as part of our repricing strategy. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:
Current wording
Deposits. Total deposits increased $53.9 million, or 0.9%, to $5.73 billion at March 31, 2026 from $5.68 billion at June 30, 2025. Included in total deposits are retail and brokered time deposits of $1.20 billion and $757.2 million, respectively, at March 31, 2026, and $1.22 billion and $757.7 million, respectively, at June 30, 2025. The increase in non-interest bearing demand deposits was largely the result of migrating $69.8 million from a consumer interest bearing product to a non-interest bearing product as part of our repricing strategy. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:
Previous wording
Uninsured deposits totaled $2.16 billion as of December 31, 2025 compared to $1.99 billion as of June 30, 2025. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $801.0 million, or 14.0% of total deposits, at December 31, 2025 compared to $813.8 million, or 14.3% of total deposits, at June 30, 2025.
Current wording
Uninsured deposits totaled $2.20 billion as of March 31, 2026 compared to $1.99 billion as of June 30, 2025. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $839.0 million, or 14.7% of total deposits, at March 31, 2026 compared to $813.8 million, or 14.3% of total deposits, at June 30, 2025.
Previous wording
Borrowings. The balance of borrowings decreased by $161.5 million to $1.10 billion at December 31, 2025 from $1.26 billion at June 30, 2025, reflecting reductions in FHLB advances.
Current wording
Borrowings. The balance of borrowings decreased by $196.5 million to $1.06 billion at March 31, 2026 from $1.26 billion at June 30, 2025, reflecting reductions in FHLB advances.
Previous wording
At December 31, 2025, we maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.70 billion, representing 35.4% of total assets.
Current wording
At March 31, 2026, we maintained available secured borrowing capacity with the FHLB and the Federal Reserve Discount Window of $2.45 billion, representing 32.2% of total assets.
Previous wording
Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, decreased $5.8 million to $56.9 million at December 31, 2025 from $62.8 million at June 30, 2025. The change in the balance of these other liabilities generally reflected normal operating fluctuations during the period.
Current wording
Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, decreased $7.2 million to $55.5 million at March 31, 2026 from $62.8 million at June 30, 2025. The change in the balance of these other liabilities generally reflected normal operating fluctuations during the period.
Previous wording
Stockholders’ Equity. Stockholders’ equity increased $11.4 million to $757.4 million at December 31, 2025 from $746.0 million at June 30, 2025. The increase in stockholders’ equity during the six months ended December 31, 2025 largely reflected net income of $19.0 million and other comprehensive income of $5.0 million, partially offset by cash dividends of $14.0 million. The other comprehensive income for the six months ended December 31, 2025 was driven by an increase in the fair value of our available for sale securities, partially offset by a decrease in the fair value of our derivatives portfolio.
Current wording
Stockholders’ Equity. Stockholders’ equity increased $17.1 million to $763.0 million at March 31, 2026 from $746.0 million at June 30, 2025. The increase in stockholders’ equity during the nine months ended March 31, 2026 largely reflected net income of $29.1 million and other comprehensive income of $6.6 million, partially offset by cash dividends of $21.0 million. The other comprehensive income for the nine months ended March 31, 2026 was driven by an increase in the fair value of our available for sale securities, partially offset by a decrease in the fair value of our derivatives portfolio.
Previous wording
At December 31, 2025, book value per share increased by $0.15 to $11.70, while tangible book value per share increased by $0.16 to $9.93. These increases were driven by the increases in stockholders’ equity, as described above.
Current wording
At March 31, 2026, book value per share increased by $0.24 to $11.79, while tangible book value per share increased by $0.25 to $10.02. These increases were driven by the increases in stockholders’ equity, as described above.
Previous wording
Comparison of Operating Results for the Quarter Ended December 31, 2025 and December 31, 2024
Current wording
Comparison of Operating Results for the Quarters Ended March 31, 2026 and March 31, 2025
Previous wording
Net Income. Net income for the quarter ended December 31, 2025 was $9.4 million, or $0.15 per diluted share, compared to $6.6 million, or $0.10 per diluted share, for the quarter ended December 31, 2024. The increase in net income reflected increases in net interest income and non-interest income, partially offset by increases in non-interest expense and income taxes.
Current wording
Net Income. Net income for the quarter ended March 31, 2026 was $10.1 million, or $0.16 per diluted share, compared to $6.6 million, or $0.11 per diluted share, for the quarter ended March 31, 2025. The increase in net income reflected increases in net interest income and non-interest income, partially offset by increases in non-interest expense and income taxes.
Previous wording
Net Interest Income. Net interest income increased by $5.4 million to $38.0 million for the quarter ended December 31, 2025 compared to $32.6 million for the quarter ended December 31, 2024. The increase between the comparative periods resulted from a decrease of $6.2 million in interest expense, partially offset by a decrease of $833,000 in interest income. Included in net interest income for the quarters ended December 31, 2025 and 2024, respectively, was purchase accounting accretion of $494,000 and $685,000, and loan prepayment penalty income of $544,000 and $288,000.
Current wording
Net Interest Income. Net interest income increased by $5.2 million to $39.2 million for the quarter ended March 31, 2026 compared to $34.0 million for the quarter ended March 31, 2025. The increase between the comparative periods resulted from a decrease of $5.4 million in interest expense, partially offset by a decrease of $165,000 in interest income. Included in net interest income for the quarters ended March 31, 2026 and 2025, respectively, was purchase accounting accretion of $552,000 and $511,000, and loan prepayment penalty income of $422,000 and $226,000.
Previous wording
Net interest margin increased 32 basis points to 2.14% for the quarter ended December 31, 2025, from 1.82% for the quarter ended December 31, 2024 reflecting a decrease in the cost of interest-bearing liabilities, a decrease in the average balance of interest-bearing borrowings and higher average balances and yields on loans receivable, partially offset by a decrease in the average balances and yields on taxable investment securities and other interest-earning assets.
Current wording
Net interest margin increased 31 basis points to 2.21% for the quarter ended March 31, 2026, from 1.90% for the quarter ended March 31, 2025 reflecting a decrease in the cost and average balances of interest-bearing liabilities and higher average yields on loans receivable, partially offset by a decrease in the average balances of interest-earning assets.
Previous wording
(4)Includes average balances of non-interest-bearing deposits of $595.0 million and $604.9 million for the quarter ended December 31, 2025 and 2024, respectively.
Current wording
(4)Includes average balances of non-interest-bearing deposits of $633.5 million and $602.6 million for the quarter ended March 31, 2026 and 2025, respectively.
Previous wording
Provision for Credit Losses. The provision for credit losses increased $460,000 to $567,000 for the quarter ended December 31, 2025, compared to $107,000 for the quarter ended December 31, 2024. The provision for the quarter ended December 31, 2025 was primarily driven by quantitative risk-factor adjustments and individually evaluated reserves associated with one non-performing C&I loan that was fully charged off during the quarter, partially offset by a decrease in the balance of loans receivable. By comparison, the provision for credit losses for the quarter ended December 31, 2024 was primarily driven by loan growth.
Current wording
Provision for Credit Losses. The provision for credit losses increased $25,000 to $391,000 for the quarter ended March 31, 2026, compared to $366,000 for the quarter ended March 31, 2025. The provision for the quarter ended March 31, 2026 was primarily driven by loan growth and charge-offs associated with certain individually evaluated loans, partially offset by quantitative risk factor adjustments. By comparison, the provision for credit losses for the quarter ended March 31, 2025 was primarily driven by loan charge-offs.
Previous wording
Non-Interest Income. Total non-interest income increased $698,000 to $5.6 million for the quarter ended December 31, 2025, compared to $4.9 million for the quarter ended December 31, 2024.
Current wording
Non-Interest Income. Total non-interest income increased $1.5 million to $6.1 million for the quarter ended March 31, 2026, compared to $4.6 million for the quarter ended March 31, 2025.
Previous wording
Fees and service charges increased $668,000 to $1.3 million for the quarter ended December 31, 2025, from $627,000 for the quarter ended December 31, 2024, primarily reflecting $270,000 of higher deposit and branch related fee income, and higher loan related fee income of $245,000 associated with the payoff of a single construction loan.
Current wording
Fees and service charges increased $349,000 to $922,000 for the quarter ended March 31, 2026, from $573,000 for the quarter ended March 31, 2025, primarily reflecting $252,000 of higher deposit and branch related fee income, and higher loan related fee income of $97,000.
Previous wording
Other income increased $857,000 to $2.5 million for the six months ended December 31, 2025, compared to $1.7 million for the six months ended December 31, 2024, primarily driven by a non-recurring pre-tax gain of $749,000 on the sale of property held for sale in the current period.
Current wording
Other income increased $1.1 million to $1.9 million for the quarter ended March 31, 2026, from $869,000 for the quarter ended March 31, 2025, primarily driven by a non-recurring pre-tax gain of $1.0 million on the sale of two former branch locations held for sale in the current period.
Previous wording
Non-Interest Expense. Total non-interest expense increased $1.6 million to $31.2 million for the quarter ending December 31, 2025, compared to $29.6 million the quarter ended December 31, 2024.
Current wording
Non-Interest Expense. Total non-interest expense increased $1.9 million to $32.3 million for the quarter ending March 31, 2026, compared to $30.4 million the quarter ended March 31, 2025.
Previous wording
Salaries and employee benefits increased $794,000 to $18.4 million for the quarter ended December 31, 2025, from $17.6 million for the quarter ended December 31, 2024. This increase was primarily driven by higher salary expense due to annual merit increases and an increase in incentive compensation.
Current wording
Salaries and employee benefits increased $1.6 million to $19.3 million for the quarter ended March 31, 2026, from $17.7 million for the quarter ended March 31, 2025. This increase was primarily driven by higher salary expense due to annual merit increases, a non-recurring severance charge of $205,000 recorded in the current period, and the absence of a $427,000 non-recurring decrease in stock-based compensation recorded in the prior year period.
Previous wording
Net occupancy expense of premises increased $57,000 to $2.9 million for the quarter ended December 31, 2025, from $2.8 million for the quarter ended December 31, 2024. This increase was primarily driven by higher snow removal expenses.
Current wording
Net occupancy expense of premises increased $188,000 to $3.3 million for the quarter ended March 31, 2026, from $3.1 million for the quarter ended March 31, 2025. This increase was primarily driven by $118,000 of higher snow removal expenses.
Previous wording
FDIC insurance premiums decreased $146,000 to $1.4 million for the quarter ended December 31, 2025, from $1.5 million for the quarter ended December 31, 2024, primarily driven by higher capital ratios.
Current wording
FDIC insurance premiums decreased $148,000 to $1.3 million for the quarter ended March 31, 2026, from $1.5 million for the quarter ended March 31, 2025, primarily driven by higher capital ratios.
Previous wording
Provision for Income Taxes. Provision for income taxes increased $1.1 million to $2.3 million for the quarter ended December 31, 2025 from $1.3 million for the quarter ended December 31, 2024, reflecting a higher level of pre-tax income compared to the prior year period.
Current wording
Provision for Income Taxes. Provision for income taxes increased $1.3 million to $2.5 million for the quarter ended March 31, 2026 from $1.2 million for the quarter ended March 31, 2025, reflecting a higher level of pre-tax income compared to the prior year period.
Previous wording
Effective tax rates for the quarter ended December 31, 2025 and 2024 were 19.8% and 16.0%, respectively. The increase in the effective tax rate was primarily due to higher full year projected taxable income.
Current wording
Effective tax rates for the quarter ended March 31, 2026 and 2025 were 19.8% and 15.3%, respectively. The increase in the effective tax rate was primarily due to higher full year projected taxable income.
Previous wording
Comparison of Operating Results for the Six Months Ended December 31, 2025 and December 31, 2024
Current wording
Comparison of Operating Results for the Nine Months Ended March 31, 2026 and March 31, 2025
Previous wording
Net Income. Net income for the six months ended December 31, 2025 was $19.0 million, or $0.30 per diluted share, compared to $12.7 million, or $0.20 per diluted share, for the six months ended December 31, 2024. The increase in net income primarily reflected increases in net interest income and non-interest income, partially offset by increases in non-interest expense, the provision for credit losses and income tax expense.
Current wording
Net Income. Net income for the nine months ended March 31, 2026 was $29.1 million, or $0.46 per diluted share, compared to $19.3 million, or $0.31 per diluted share, for the nine months ended March 31, 2025. The increase in net income primarily reflected increases in net interest income and non-interest income, partially offset by increases in non-interest expense, income tax expense and the provision for credit losses.
Previous wording
Net Interest Income. Net interest income increased by $10.6 million to $75.7 million for the six months ended December 31, 2025 compared to $65.1 million for the six months ended December 31, 2024. The increase between the comparative periods resulted from a decrease of $12.2 million in interest expense, partially offset by a decrease of $1.6 million in interest income. Included in net interest income for the six months ended December 31, 2025 and 2024, respectively, was purchase accounting accretion of $1.1 million and $1.3 million, and loan prepayment penalty income of $1.0 million and $340,000.
Current wording
Net Interest Income. Net interest income increased by $15.8 million to $114.9 million for the nine months ended March 31, 2026 compared to $99.1 million for the nine months ended March 31, 2025. The increase between the comparative periods resulted from a decrease of $17.6 million in interest expense, partially offset by a decrease of $1.7 million in interest income. Included in net interest income for the nine months ended March 31, 2026 and 2025, respectively, was purchase accounting accretion of $1.6 million and $1.8 million, and loan prepayment penalty income of $1.5 million and $566,000.
Previous wording
Net interest margin increased 31 basis points to 2.12% for the six months ended December 31, 2025, from 1.81% for the six months ended December 31, 2024 and reflected a decrease in the cost of interest-bearing liabilities and a decrease in the average balance of borrowings, partially offset by decreases in the average balances of investment securities and other interest-earning assets.
Current wording
Net interest margin increased 31 basis points to 2.15% for the nine months ended March 31, 2026, from 1.84% for the nine months ended March 31, 2025 and reflected a decrease in the cost of interest-bearing liabilities, a decrease in the average balance of borrowings and an increase in the average balance and yields of loans receivable, partially offset by decreases in the average balances of investment securities and other interest-earning assets.
Previous wording
(4)Includes average balances of non-interest-bearing deposits of $588.3 million and $602.0 million for the six months ended December 31, 2025 and 2024, respectively.
Current wording
(4)Includes average balances of non-interest-bearing deposits of $603.2 million and $602.2 million for the nine months ended March 31, 2026 and 2025, respectively.
Previous wording
Provision for Credit Losses. The provision for credit losses increased $270,000 to $485,000 for the six months ended December 31, 2025, compared to $215,000 for the six months ended December 31, 2024. The provision for the six months ended December 31, 2025 was primarily driven by quantitative risk-factor adjustments and individually evaluated reserves associated with one non-performing C&I loan that was fully charged off during the current period, partially offset by a decrease in the balance of loans receivable. By comparison, the provision for credit losses for the six months ended December 31, 2024 was primarily driven by loan growth.
Current wording
Provision for Credit Losses. The provision for credit losses increased $295,000 to $876,000 for the nine months ended March 31, 2026, compared to $581,000 for the nine months ended March 31, 2025. The provision for the nine months ended March 31, 2026 was primarily driven by quantitative risk-factor adjustments and higher reserves on individually evaluated loans, including one non-performing C&I loan that was fully charged off during the period. By comparison, the provision for credit losses for the nine months ended March 31, 2025 was primarily driven by charge-offs and loan growth.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Advertising and marketing expense increased $101,000 to $412,000 for the quarter ended December 31, 2025, from $311,000 for the quarter ended December 31, 2024. The increase primarily reflects normal fluctuations in the timing of campaigns across various advertising formats supporting our loan and deposit growth initiatives.
Previous report — wording carried elsewhere
Equipment and systems expense increased $115,000 to $4.0 million for the quarter ended December 31, 2025, from $3.9 million for the quarter ended December 31, 2024, largely driven by increases in technology expense associated with the Company’s ongoing digital banking initiatives.
Previous report — wording carried elsewhere
Other non-interest expense increased $764,000 to $3.8 million for the quarter ended December 31, 2025, from $3.1 million for the quarter ended December 31, 2024, primarily driven by $242,000 in non-recurring professional fees incurred in the current period associated with our strategic initiative and partnership with The Lab Consulting, higher loan related legal expenses, and a provision for credit losses on off balance sheet commitments in the current period compared to a reversal recorded in the prior period.