Kearny Financial (KRNY) has just reported Q3 2026 results with quarterly revenue in the low US$40 million range and basic EPS of about US$0.15, set against a trailing twelve month EPS of US$0.52 that reflects the shift back into profitability. Over recent periods, revenue has moved from US$36.96 million in Q1 2025 to US$42.97 million in Q2 2026, while quarterly EPS has stepped from roughly US$0.10 to just over US$0.15. This gives investors a clearer read on how earnings now sit relative to the past year. With a reported net interest margin of 2.14% in the latest quarter, the focus this season is on how efficiently Kearny is turning its loan book into income.

See our full analysis for Kearny Financial.

With the headline numbers set, the next step is to see how these results line up with the widely held narratives about Kearny's earnings quality, risk profile, and long term potential.

Net interest margin holds near 2.1%

• Net interest margin sits at 2.14% in Q3 2026, up from 1.8% to 1.9% across the 2025 quarters, while trailing twelve month net interest margin was 1.88% as of Q4 2025.
• What stands out for a more bullish take is that margin improvement sits alongside trailing twelve month net income of US$32.37 million and EPS of US$0.52, which contrasts with the earlier twelve month loss of US$90.42 million and EPS of about US$1.45 loss in early 2025.
  • Supporters of a constructive view might point to quarterly net income moving from roughly US$6.1 million in Q1 2025 to around US$9.4 million in Q3 2026 as evidence that profitability has stabilised against that earlier loss period.
  • At the same time, the five year record still shows average annual earnings decline of 44.3%, so the recent net interest margin level and profits sit against a longer stretch of weaker reported earnings.

Non performing loans up to US$51.3 million

• Non performing loans are reported at US$51.31 million in Q3 2026, compared with US$37.68 million to US$45.60 million across the 2025 quarters, while the allowance for bad loans is described as 88% over the last twelve months.
• Bears argue that credit quality and reserves are a weak spot, and the data here supports parts of that concern while softening others.
  • Critics highlight the combination of higher non performing loans in recent quarters and a relatively low reported allowance coverage of 88% as a key risk for a lender with a sizeable loan book of about US$5.75 billion.
  • On the other hand, the shift from a trailing twelve month net loss of US$70.02 million to US$90.42 million in early 2025 to trailing twelve month net income of US$32.37 million by Q3 2026 shows that reported profitability has recovered even as non performing loans and allowance metrics remain an area to watch.

On a cautious view around credit risk, skeptics may want to see how the full bear case stacks up against these earnings trends 🐻 Kearny Financial Bear Case.

P/E of 15.6x versus 11.7x industry

• The trailing P/E ratio of 15.6x sits above the US Banks industry average of 11.7x and peer average of 12x, while the current share price is US$8.05, and this multiple is below the broader US market P/E of 19.7x.
• What is interesting for a more upbeat angle is that this richer P/E versus bank peers is based on a period where the company has just moved from loss making twelve month earnings to US$32.37 million of trailing twelve month net income and EPS of roughly US$0.52.
  • Supporters of a bullish stance can point out that the market is willing to pay a premium to sector P/E levels even though the company reported an average 44.3% yearly earnings decline over the last five years.
  • At the same time, the unstable dividend record and the low 88% allowance for bad loans mean that some of the usual comfort factors for bank investors, such as income reliability and high reserve coverage, are not fully present alongside that P/E premium.

If you want to see how other investors connect these valuation numbers with the recent return to profitability, it is worth checking out the wider community discussion 📊 Read the what the Community is saying about Kearny Financial..

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Kearny Financial's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

With sentiment split between the recent return to profitability and the concerns around credit quality and valuation, it makes sense to look at the underlying data yourself, decide where you stand, and then weigh both sides by checking the 2 key rewards and 3 important warning signs.

Explore Alternatives

The combination of higher non performing loans at US$51.31 million, modest 88% allowance coverage, and a richer 15.6x P/E suggests a mix of credit and valuation risk.

If you want ideas that lean toward stronger financial resilience and potentially steadier loan books, start comparing this profile with the solid balance sheet and fundamentals stocks screener (42 results) to see what stands out.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.