Kearny Financial Corp.
For the period ended Jun 30, 2026. Filed Aug 21, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Aug 21, 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-K
Period ended 2025-06-30; filed 2025-08-21.
0001617242-25-000056
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-08-21.
0001617242-26-000020
Item 7. 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 89 previous paragraphs and 86 current paragraphs.
43 unchanged; 33 reworded; 10 added; 13 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 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 (10)
Current report
Net Income. Net income for the year ended June 30, 2026 was $36.3 million, or $0.57 per diluted share, an increase of $10.2 million from net income of $26.1 million, or $0.42 per diluted share, for the year ended June 30, 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.
Current report
Net interest margin increased 30 basis points to 2.18% for the year ended June 30, 2026, from 1.88% for the year ended June 30, 2025. The increase 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.
Current report
Non-Interest Income. Non-interest income increased $3.8 million to $22.8 million for the year ended June 30, 2026, compared to $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.
Current report
Fees and service charges increased $1.7 million to $4.2 million for the year ended June 30, 2026, compared to $2.5 million for the year ended June 30, 2025, primarily reflecting $932,000 of higher deposit and branch related fee income, and higher loan related fee income of $752,000.
Current report
Other income increased $1.9 million to $5.2 million for the year ended June 30, 2026, compared to $3.4 million for the year ended June 30, 2025, primarily driven by non-recurring pre-tax gains of $1.8 million, as discussed above.
Current report
Non-Interest Expense. Non-interest expense increased by $8.4 million to $129.0 million for the year ended June 30, 2026 from $120.6 million for the year ended June 30, 2025, primarily driven by higher salary and benefits expense and other expense.
Current report
Salaries and employee benefits expense increased by $5.9 million to $76.7 million for the year ended June 30, 2026. This increase was primarily driven by higher salary expense and payroll taxes from annual merit increases, higher incentive compensation, non-recurring severance charges of $950,000 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.
Current report
Advertising and marketing expense increased $508,000 to $2.4 million for the year ended June 30, 2026. This increase primarily reflects normal fluctuations in the timing of campaigns across various advertising formats supporting our loan and deposit growth initiatives.
Current report
FDIC insurance premiums decreased $591,000 to $5.3 million for the year ended June 30, 2026, primarily driven by higher capital ratios.
Current report
Other non-interest expense increased $1.8 million to $15.2 million for the year ended June 30, 2026, 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, and higher professional fees, loan related expenses and $264,000 in non-recurring other real estate owned acquisition-related expenses.
Removed paragraphs (13)
Previous report
Goodwill. Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is not amortized, but is tested for impairment at least annually or more frequently if events and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
Previous report
To test goodwill for impairment we elected to perform a goodwill impairment assessment during the fourth quarter of the year ended June 30, 2025. The quantitative goodwill impairment test compares the estimated fair value of the reporting unit with its carrying amount, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. However, if the carrying amount of the reporting unit were to exceed its estimated fair value, and impairment loss would be recorded.
Previous report
The quantitative assessment of goodwill for our single reporting unit was performed utilizing a discounted cash flow analysis (“income approach”) and estimates of selected market information (“market approaches”). The result of the income approach was weighted at 70% and the results of the market approaches comprised the remaining 30% in determining the fair value of our single reporting unit. The fair value of our single reporting unit exceeded its respective carrying value, resulting in no impairment charge required to be recorded for the year ended June 30, 2025. As a result, the Company’s goodwill of $113.5 million remained unchanged from June 30, 2024. Determining fair value of our single reporting unit is subject to uncertainty as it is reliant on projected future cash flows, discount rate assumption, and market estimates. In the future, changes in projected future cash flows, discount rate assumption, or market estimates may result in further impairment of goodwill.
Previous report
Net Income (Loss). Net income for the year ended June 30, 2025 was $26.1 million, or $0.42 per diluted share, an increase of $112.7 million from a net loss of $86.7 million, or $1.39 per diluted share, for the year ended June 30, 2024. Excluding the $95.3 million non-cash goodwill impairment recorded in the prior year, net income increased $17.4 million, reflecting an increase in non-interest income and decreases in the provision for credit losses and income tax expense, partially offset by a decrease in net interest income and an increase in non-interest expense. Net income for the prior year period also included a $12.9 million after-tax net loss on the sale of securities that resulted from the repositioning of our investment securities portfolio in December 2023 and an after-tax net loss of $6.7 million from the previously disclosed BOLI restructure.
Previous report
Net interest margin decreased 6 basis points to 1.88% for the year ended June 30, 2025, from 1.94% for the year ended June 30, 2024. The decrease reflected increases in the cost and average balances of interest-bearing deposits and decreases in the average balances of interest-earning assets, partially offset by higher yields on interest-earning assets and decreases in the average balances of interest-bearing borrowings.
Previous report
Non-Interest Income. Non-interest income increased from a $1.9 million loss for the year ended June 30, 2024 to income of $19.1 million for the year ended June 30, 2025, an improvement of $21.0 million.
Previous report
There were no gains on sale and call of securities during the year ended June 30, 2025 compared to a loss of $18.1 million recorded in the prior year. The loss in the prior year was due to the repositioning of our investment securities portfolio that involved the sale of $122.2 million of available for sale debt securities in December 2023.
Previous report
Gain on sale of loans was $806,000 for the year ended June 30, 2025 compared to a loss of $282,000 during the prior year. The loss in the prior year was primarily the result of the sale of three related nonperforming commercial real estate loans held-for-sale.
Previous report
We recognized a non-recurring loss of $974,000 attributable to the write-down of one other real estate owned (“OREO”) property during the prior year, while there were no such losses recorded in the current year.
Previous report
Income from bank owned life insurance (“BOLI”) increased $1.6 million to $10.7 million for the year ended June 30, 2025. The increase primarily reflected improved income as a result of the BOLI restructure initiated in December 2023, and the absence of non-recurring exchange charges related to the restructure recorded in the prior year.
Previous report
Non-Interest Expense. Non-interest expense decreased by $94.5 million to $120.6 million for the year ended June 30, 2025 from $215.2 million for the year ended June 30, 2024, driven by the absence of a pre-tax, non-cash goodwill impairment of $97.4 million recognized in the prior year period. Excluding the goodwill impairment, non-interest expense increased $2.9 million compared to the prior year period.
Previous report
Salaries and employee benefits expense increased by $1.7 million to $70.9 million for the year ended June 30, 2025, primarily driven by an increase in salary and benefits expense attributable to annual merit increases and higher incentive compensation.
Previous report
Advertising and marketing expense increased $481,000 to $1.9 million for the year ended June 30, 2025. This increase in advertising expense was largely driven by an increase in digital and online advertising campaigns to support our deposit growth initiatives.
Reworded paragraphs (33)
Previous wording
Our accounting policies are integral to understanding the results reported. We describe them in detail in Note 1 to our audited consolidated financial statements. In preparing the audited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the Consolidated Statements of Financial Condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes relate to the determination of the allowance for credit losses and goodwill.
Current wording
Our accounting policies are integral to understanding the results reported. We describe them in detail in Note 1 to our audited consolidated financial statements. In preparing the audited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the Consolidated Statements of Financial Condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates. A material estimate that is particularly susceptible to significant changes relates to the determination of the allowance for credit losses.
Previous wording
Management believes the following information may enable investors to better understand the changes in our ACL. Our ACL totaled $46.2 million and $44.9 million at June 30, 2025 and 2024, respectively. The $1.3 million increase in our ACL was largely attributable to an increase in reserves for individually evaluated loans. The quantitative component of our ACL, which is largely based on the national unemployment rate forecast, decreased $1.2 million. The qualitative component of our ACL, which is largely based on management’s judgment of qualitative loss factors, increased $0.9 million.
Current wording
Management believes the following information may enable investors to better understand the changes in our ACL. Our ACL totaled $45.5 million and $46.2 million at June 30, 2026 and 2025, respectively. The $695,000 decrease in our ACL was largely attributable to net charge-offs of $2.4 million, partially offset by a provision for credit losses of $1.7 million primarily driven by loan growth and an increase in reserves for individually evaluated loans. The quantitative component of our ACL, which is largely based on the national unemployment rate forecast, increased $152,000. The qualitative component of our ACL, which is largely based on management’s judgment of qualitative loss factors, increased $481,000.
Previous wording
Our ACL totaled $46.2 million at June 30, 2025 and the amount allocated to our collectively evaluated multi-family and nonresidential mortgage loans was $30.5 million, of which $21.1 million was attributable to qualitative loss factors. Changes in managements’ judgment of qualitative loss factors could result in a significant change to the ACL. As described in Note 1, qualitative loss factors are applied to each portfolio segment with the amounts judgmentally determined by the relative risk to the most severe loss periods identified in the historical loan charge-offs of a peer group of similar-sized regional banks. At June 30, 2025, the most severe historical loss rate for multi-family and nonresidential mortgages loans was 1.66%.
Current wording
Our ACL totaled $45.5 million at June 30, 2026 and the amount allocated to our collectively evaluated multi-family and nonresidential mortgage loans was $29.3 million, of which $20.4 million was attributable to qualitative loss factors. Changes in management’s judgment of qualitative loss factors could result in a significant change to the ACL. As described in Note 1, qualitative loss factors are applied to each portfolio segment with the amounts judgmentally determined by the relative risk to the most severe loss periods identified in the historical loan charge-offs of a peer group of similar-sized regional banks. At June 30, 2026, the weighted average historical loss rate for multi-family and nonresidential mortgages loans during the most severe peer group loss periods was 1.62%.
Previous wording
Management performed a hypothetical sensitivity analysis to understand the impact of a change in a key input on our ACL. At June 30, 2025, if the four-quarter national unemployment rate forecast had been 9% rather than an average of approximately 4.1%, our ACL as a percent of total loans would have increased 34 basis points from 0.79% to 1.13%. This sensitivity analysis includes the impact to both the quantitative and qualitative components of our ACL. Changes in quantitative inputs and qualitative loss factors may not occur in the same direction or magnitude across all segments of our loan portfolio and deterioration in some quantitative inputs and qualitative loss factors may offset improvement in others. This sensitivity analysis does not represent a change to our expectations of the economic environment but provides a hypothetical result to assess the sensitivity of the ACL to a change in a key input. This sensitivity analysis does not incorporate changes to management’s judgment of qualitative loss factors.
Current wording
Management performed a hypothetical sensitivity analysis to understand the impact of a change in a key input on our ACL. At June 30, 2026, if the four-quarter national unemployment rate forecast had been 9% rather than an average of approximately 4.2%, our ACL as a percent of total loans would have increased 56 basis points from 0.77% to 1.33%. This sensitivity analysis includes the impact to both the quantitative and qualitative components of our ACL. Changes in quantitative inputs and qualitative loss factors may not occur in the same direction or magnitude across all segments of our loan portfolio and deterioration in some quantitative inputs and qualitative loss factors may offset improvement in others. This sensitivity analysis does not represent a change to our expectations of the economic environment but provides a hypothetical result to assess the sensitivity of the ACL to a change in a key input. This sensitivity analysis does not incorporate changes to management’s judgment of qualitative loss factors.
Previous wording
Our ACL on individually analyzed loans is determined on an individual basis using the present value of expected cash flows discounted using the loan’s effective interest rate or, for collateral-dependent loans, the fair value of the collateral, less estimated selling costs, as applicable. Our ACL on individually analyzed loans increased $1.6 million during the year ended June 30, 2025.
Current wording
Our ACL on individually analyzed loans is determined on an individual basis using the present value of expected cash flows discounted using the loan’s effective interest rate or, for collateral-dependent loans, the fair value of the collateral, less estimated selling costs, as applicable. Our ACL on individually analyzed loans decreased $1.3 million during the year ended June 30, 2026.
Previous wording
Executive Summary. Total assets increased by $57.0 million, or 0.7%, to $7.74 billion at June 30, 2025 from $7.68 billion at June 30, 2024. The increase primarily reflected increases in cash and cash equivalents and net loans receivable, partially offset by decreases in investment securities and other assets.
Current wording
Executive Summary. Total assets decreased by $58.2 million, or 0.8%, to $7.68 billion at June 30, 2026 from $7.74 billion at June 30, 2025. The decrease primarily reflected decreases in cash and cash equivalents and investment securities, partially offset by an increase in net loans receivable.
Previous wording
Investment Securities. Investment securities available for sale decreased by $59.9 million to $1.01 billion at June 30, 2025 from $1.07 billion at June 30, 2024. This decrease was largely the result of principal repayments of $183.8 million, partially offset by purchases of $104.9 million and a $18.5 million increase in the fair value of the portfolio.
Current wording
Investment Securities. Investment securities available for sale decreased by $48.6 million to $964.4 million at June 30, 2026 from $1.01 billion at June 30, 2025. This decrease was largely the result of principal repayments of $322.7 million, partially offset by purchases of $258.3 million and a $15.6 million increase in the fair value of the portfolio.
Previous wording
Investment securities held to maturity decreased by $15.5 million to $120.2 million at June 30, 2025 from $135.7 million at June 30, 2024. The decrease was largely the result of principal repayments of $15.6 million.
Current wording
Investment securities held to maturity decreased by $13.4 million to $106.8 million at June 30, 2026 from $120.2 million at June 30, 2025. The decrease was largely the result of principal repayments of $13.5 million.
Previous wording
Loans Held-for-Sale. Loans held-for-sale totaled $5.9 million at June 30, 2025 as compared to $6.0 million at June 30, 2024 and are reported separately from the balance of net loans receivable. Loans held-for-sale consisted of residential mortgage loans of $5.9 million at June 30, 2025 as compared to residential mortgage loans of $6.0 million at June 30, 2024. During the year ended June 30, 2025, we sold $112.1 million of residential mortgage loans, resulting in a net gain on sale of $806,000.
Current wording
Loans Held-for-Sale. Loans held-for-sale totaled $6.0 million at June 30, 2026 as compared to $5.9 million at June 30, 2025 and are reported separately from the balance of net loans receivable. Loans held-for-sale consisted of residential mortgage loans in both respective periods. During the year ended June 30, 2026, we sold $128.2 million of residential mortgage loans, resulting in a net gain on sale of $932,000.
Previous wording
Net Loans Receivable. Net loans receivable increased by $78.9 million, or 1.4%, to $5.77 billion at June 30, 2025 from $5.69 billion at June 30, 2024. Detail regarding the change in the loan portfolio is presented below:
Current wording
Net Loans Receivable. Net loans receivable increased by $63.1 million, or 1.1%, to $5.83 billion at June 30, 2026 from $5.77 billion at June 30, 2025. The increase reflected growth across several lending categories, including commercial and industrial loans and construction loans, partially offset by a decline in multi-family mortgage loans resulting primarily from repayments and payoffs. The resulting shift in portfolio composition is consistent with our ongoing loan portfolio remix strategy and focus on expanding commercial banking relationships. Detail regarding the change in the loan portfolio is presented below:
Previous wording
Commercial loan origination volume for the year ended June 30, 2025 totaled $477.3 million, consisted of $260.3 million of commercial mortgage loan originations, $118.1 million of commercial business loan originations and $98.9 million of construction loan disbursements.
Current wording
Commercial loan origination volume for the year ended June 30, 2026 totaled $439.7 million, consisting of $166.2 million of commercial mortgage loan originations, $118.5 million of commercial and industrial loan originations and $155.1 million of construction loan disbursements. Purchases of commercial business loans totaled $93.8 million for the same period.
Previous wording
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $144.3 million for the year ended June 30, 2025 and was supplemented with loan purchases totaling $730,000. Home equity loan and line of credit origination volume for the same period totaled $29.7 million.
Current wording
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $154.0 million for the year ended June 30, 2026 and was supplemented with loan purchases totaling $65.6 million. Home equity loan and line of credit origination volume for the same period totaled $43.5 million.
Previous wording
Nonperforming loans. Nonperforming loans increased by $5.7 million to $45.6 million, or 0.79% of total loans, at June 30, 2025 from $39.9 million, or 0.70% of total loans, at June 30, 2024. The increase in nonperforming loans was largely attributable to an increase of $8.3 million in nonperforming multi-family mortgage loans, partially offset by a decrease of $4.1 million in nonperforming nonresidential mortgage loans.
Current wording
Nonperforming Assets. Nonperforming assets increased $7.8 million to $53.4 million, or 0.70% of total assets, at June 30, 2026 from $45.6 million, or 0.59% of total assets, at June 30, 2025. The increase in nonperforming assets was largely attributable to two foreclosed properties with an aggregate carrying value of $5.5 million that were transferred into other real estate owned. The remaining change was primarily 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. At June 30, 2025, the ACL totaled $46.2 million, or 0.79% of total loans, reflecting an increase of $1.3 million from $44.9 million, or 0.78% of total loans, at June 30, 2024. The increase was largely attributable to a provision for credit losses of $2.4 million, primarily driven by an increase in the provision for individually evaluated loans, partially offset by net charge-offs of $1.1 million.
Current wording
Allowance for Credit Losses. At June 30, 2026, the ACL totaled $45.5 million, or 0.77% of total loans, reflecting a decrease of $695,000 from $46.2 million, or 0.79% of total loans, at June 30, 2025. The decrease was largely attributable to net charge-offs of $2.4 million, partially offset by a provision for credit losses of $1.7 million.
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, deferred income taxes, OREO and other assets, decreased by $49.8 million to $667.3 million at June 30, 2025 from $717.1 million at June 30, 2024. The decrease in other assets largely reflected a decrease in the market value of interest rate derivatives and a decrease in FHLB stock, 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, deferred income taxes, OREO and other assets, decreased by $7.0 million to $660.3 million at June 30, 2026 from $667.3 million at June 30, 2025. The decrease in other assets largely reflected a decrease in the market value of interest rate derivatives and a decrease in FHLB stock, partially offset by an increase in BOLI and the transfer of two foreclosed properties to other real estate owned. The remaining change generally reflected normal operating fluctuations within these line items.
Previous wording
Deposits. Total deposits increased by $517.1 million, or 10.0%, to $5.68 billion at June 30, 2025 from $5.16 billion at June 30, 2024. Included in total deposits are brokered certificates of deposits (“CDs”) of $757.7 million and $408.2 million at June 30, 2025 and 2024, respectively. The increase was driven by a reallocation from FHLB advances into brokered CDs and growth in deposits from our branch network and digital channels. The following table sets forth the distribution of, and changes in, deposits, by type, at the dates indicated:
Current wording
Deposits. Total deposits increased by $34.4 million, or 0.6%, to $5.71 billion at June 30, 2026 from $5.68 billion at June 30, 2025. Included in total deposits are brokered certificates of deposits (“CDs”) of $757.2 million and $757.7 million at June 30, 2026 and 2025, respectively. The increase was driven by growth in deposits from our branch network and digital channels. Deposit balances at June 30, 2026 reflect a migration of $239.9 million from a consumer interest bearing product to a non-interest bearing product as part of the Company’s repricing strategy. The following table sets forth the distribution of, and changes in, deposits, by type, at the dates indicated:
Previous wording
Uninsured deposits totaled $1.99 billion as of June 30, 2025, compared to $1.77 billion as of June 30, 2024. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $813.8 million, or 14.3% of total deposits, at June 30, 2025 compared to $764.4 million, or 14.8% of total deposits, at June 30, 2024.
Current wording
Uninsured deposits totaled $2.25 billion as of June 30, 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 $851.0 million, or 14.9% of total deposits, at June 30, 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 $453.3 million, or 26.5%, to $1.26 billion at June 30, 2025 from $1.71 billion at June 30, 2024 which included overnight borrowings totaling $150.0 million and $175.0 million at June 30, 2025 and 2024, respectively. The decrease was primarily driven by a net decrease in FHLB and other borrowings as a result of the increase in brokered CDs, as noted above.
Current wording
Borrowings. The balance of borrowings decreased by $106.5 million, or 8.5%, to $1.15 billion at June 30, 2026 from $1.26 billion at June 30, 2025 which included overnight borrowings totaling $200.0 million and $150.0 million at June 30, 2026 and 2025, respectively. The decrease was primarily driven by a net decrease in FHLB and other borrowings.
Previous wording
Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, increased by $802,000 to $62.8 million at June 30, 2025 from $62.0 million at June 30, 2024. The change in the balance of other liabilities generally reflected normal operating fluctuations within these line items.
Current wording
Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, decreased by $6.9 million to $55.9 million at June 30, 2026 from $62.8 million at June 30, 2025. The change in the balance of other liabilities generally reflected normal operating fluctuations within these line items.
Previous wording
Stockholders’ Equity. Stockholders’ equity decreased by $7.6 million to $746.0 million at June 30, 2025 from $753.6 million at June 30, 2024. The decrease in stockholders’ equity during the year ended June 30, 2025 largely reflected $27.7 million in cash dividends and an $8.8 million after-tax other comprehensive loss, partially offset by net income of $26.1 million. The other comprehensive loss during the year ended June 30, 2025 was driven by a decrease in the fair value of our derivatives portfolio, partially offset by an increase in the fair value of our available for sale securities.
Current wording
Stockholders’ Equity. Stockholders’ equity increased by $20.7 million to $766.7 million at June 30, 2026 from $746.0 million at June 30, 2025. The increase in stockholders’ equity during the year ended June 30, 2026 largely reflected net income of $36.3 million and $9.1 million in after-tax other comprehensive income, partially offset by $28.0 million in cash dividends. Other comprehensive income during the year ended June 30, 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
Book value per share decreased by $0.15 to $11.55 at June 30, 2025 while tangible book value per share decreased by $0.13 to $9.77 at June 30, 2025. These decreases were driven by the decrease in stockholders’ equity, as described above.
Current wording
Book value per share increased by $0.29 to $11.84 at June 30, 2026 while tangible book value per share increased by $0.30 to $10.07 at June 30, 2026. These increases were driven by the increase in stockholders’ equity, as described above.
Previous wording
Net Interest Income. Net interest income decreased by $7.7 million to $134.9 million for the year ended June 30, 2025. The decrease between the comparative periods resulted from a decrease of $4.4 million in interest income and an increase of $3.3 million in interest expense. Included in net interest income for the years ended June 30, 2025 and 2024, respectively, was purchase accounting accretion of $2.4 million and $2.6 million and loan prepayment penalty income of $783,000 and $879,000.
Current wording
Net Interest Income. Net interest income increased by $20.3 million to $155.3 million for the year ended June 30, 2026. The increase between the comparative periods resulted from a decrease of $20.5 million in interest expense, partially offset by a decrease of $163,000 in interest income. 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.
Previous wording
Details surrounding the composition of, and changes to, net interest income are presented in the table below which reflects the components of the average balance sheet and of net interest income for the periods indicated. We derived the average yields and costs by dividing income or expense by the average balance of assets or liabilities, respectively, for the years presented with daily balances used to derive average balances. No tax equivalent adjustments have been made to yield or costs. Non-accrual loans were included in the calculation of average balances, however interest receivable on these loans has been fully reserved for and therefore not included in interest income. The yields and costs set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense and exclude the impact of prepayment penalties, which are recorded to non-interest income.
Current wording
Details surrounding the composition of, and changes to, net interest income are presented in the table below which reflects the components of the average balance sheet and of net interest income for the periods indicated. We derived the average yields and costs by dividing income or expense by the average balance of assets or liabilities, respectively, for the years presented with daily balances used to derive average balances. No tax equivalent adjustments have been made to yield or costs. Non-accrual loans were included in the calculation of average balances, however interest receivable on these loans has been fully reserved for and therefore not included in interest income. The yields and costs set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.
Previous wording
(4)Includes average balances of non-interest-bearing deposits of $597.2 million, $595.3 million and $644.5 million for the years ended June 30, 2025, 2024 and 2023, respectively.
Current wording
(4)Includes average balances of non-interest-bearing deposits of $649.3 million, $597.2 million and $595.3 million for the years ended June 30, 2026, 2025 and 2024, respectively.
Previous wording
Provision for Credit Losses. The provision for credit losses decreased by $3.9 million to $2.4 million for the year ended June 30, 2025, compared to $6.2 million for the year ended June 30, 2024. The provision for credit losses for the year ended June 30, 2025 was largely attributable to charge-offs, loan growth, and increased reserves on individually evaluated loans. The provision for credit losses for the year ended June 30, 2024 was largely attributable to charge-offs of three related commercial real estate loans and the charge-off of one non-performing commercial and industrial loan relationship.
Current wording
Provision for Credit Losses. The provision for credit losses decreased by $668,000 to $1.7 million for the year ended June 30, 2026, compared to $2.4 million for the year ended June 30, 2025. The provision for credit losses for the year ended June 30, 2026 was largely attributable to loan growth and increased reserves on individually evaluated loans. The provision for credit losses for the year ended June 30, 2025 was largely attributable to charge-offs, loan growth, and increased reserves on individually evaluated loans.
Previous wording
Net occupancy expense of premises increased by $491,000 to $11.5 million for the year ended June 30, 2025. This increase was primarily driven by higher snow removal expenses due to abnormally harsh winter conditions.
Current wording
Net occupancy expense of premises increased by $796,000 to $12.3 million for the year ended June 30, 2026. This increase was primarily driven by a non-recurring pre-tax expense of $250,000 associated with the consolidation of three branches, non-recurring branch maintenance expenses of $102,000, and higher snow removal expenses of $223,000.
Previous wording
Equipment and systems expense increased $480,000 to $15.7 million for the year ended June 30, 2025. This increase was largely attributable to increases in technology expense associated with the Company’s ongoing digital banking initiatives.
Current wording
Equipment and systems expense increased $104,000 to $15.8 million for the year ended June 30, 2026. This increase was largely attributable to increases in technology expense associated with the Company’s ongoing digital banking initiatives.
Previous wording
Provision for Income Taxes. Provision for income taxes decreased by $1.0 million to $4.9 million for the year ended June 30, 2025, from $5.9 million for the year ended June 30, 2024. The decrease in income tax expense was primarily driven by the absence of a $5.7 million tax expense related to the surrender of BOLI policies in the prior year period, partially offset by higher pre-tax income in the current year period.
Current wording
Provision for Income Taxes. Provision for income taxes increased by $6.2 million to $11.1 million for the year ended June 30, 2026, from $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 period and the establishment of a valuation allowance of $1.6 million against a deferred tax asset related to certain legacy stock-based compensation awards.
Previous wording
Liquidity, at June 30, 2025, included $167.3 million of short-term cash and equivalents and $1.01 billion of investment securities available for sale which can readily be sold or pledged as collateral, if necessary. In addition, we have the capacity to borrow additional funds from the FHLB, FRB or via unsecured overnight borrowings. As of June 30, 2025, we had the capacity to borrow additional funds totaling $695.0 million and $1.19 billion from the FHLB and FRB, respectively, without pledging additional collateral. We had the ability to pledge additional securities to borrow an additional $337.3 million at June 30, 2025. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $845.0 million, of which none was outstanding.
Current wording
Liquidity, at June 30, 2026, included $114.8 million of short-term cash and equivalents and $964.4 million of investment securities available for sale which can readily be sold or pledged as collateral, if necessary. In addition, we have the capacity to borrow additional funds from the FHLB, FRB or via unsecured overnight borrowings. As of June 30, 2026, we had the capacity to borrow additional funds totaling $351.6 million and $1.30 billion from the FHLB and FRB, respectively, without pledging additional collateral. We had the ability to pledge additional securities to borrow an additional $702.5 million at June 30, 2026. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $835.0 million, of which none was outstanding.
Previous wording
Deposits increased $517.1 million to $5.68 billion at June 30, 2025 from $5.16 billion at June 30, 2024. The increase in deposit balances reflected a $533.4 million increase in interest-bearing deposits, partially offset by a $16.3 million decrease in non-interest-bearing deposits. Borrowings from the FHLB and other sources are generally available to supplement our liquidity position or to replace maturing deposits. As of June 30, 2025, our outstanding balance of FHLB advances, excluding fair value adjustments, totaled $1.11 billion. As of the same date, we had $150.0 million outstanding via our overnight line of credit with the FHLB.
Current wording
Deposits increased $34.4 million to $5.71 billion at June 30, 2026 from $5.68 billion at June 30, 2025. The increase in deposit balances reflected a $171.6 million decrease in interest-bearing deposits, partially offset by a $206.0 million increase in non-interest-bearing deposits. Borrowings from the FHLB and other sources are generally available to supplement our liquidity position or to replace maturing deposits. As of June 30, 2026, our outstanding balance of FHLB advances, excluding fair value adjustments, totaled $950 million. As of the same date, we had $200.0 million outstanding via our overnight line of credit with the FHLB.
Previous wording
In addition to the loan commitments noted above, the pipeline of loans held for sale included $11.1 million of in process loans whose terms included interest rate locks to borrowers that were paired with a best-efforts commitment to sell the loan to a buyer at a fixed price and within a predetermined timeframe after the sale commitment is established.
Current wording
In addition to the loan commitments noted above, the pipeline of loans held for sale included $19.1 million of in process loans whose terms included interest rate locks to borrowers that were paired with a best-efforts commitment to sell the loan to a buyer at a fixed price and within a predetermined timeframe after the sale commitment is established.
Previous wording
In addition to the commitments noted above, we are party to standby letters of credit totaling approximately $160,000 at June 30, 2025 through which we guarantee certain specific business obligations of our commercial customers.
Current wording
In addition to the commitments noted above, we are party to standby letters of credit totaling approximately $138,000 at June 30, 2026 through which we guarantee certain specific business obligations of our commercial customers.
Previous wording
At June 30, 2025, outstanding loan commitments relating to loans held in portfolio totaled $319.1 million compared to $280.9 million at June 30, 2024. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. For additional information regarding our outstanding lending commitments at June 30, 2025, see Note 16 to the audited consolidated financial statements.
Current wording
At June 30, 2026, outstanding loan commitments relating to loans held in portfolio totaled $489.0 million compared to $319.1 million at June 30, 2025. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. For additional information regarding our outstanding lending commitments at June 30, 2026, see Note 16 to the audited consolidated financial statements.