Financial Position - Total assets increased by $32.1 million, or 3.1%, to $1.05 billion at September 30, 2024, from $1.02 billion at June 30, 2024, primarily driven by new loan originations [115] - Total liabilities rose by $31.1 million, or 3.8%, to $852.4 million at September 30, 2024, primarily due to a $20.0 million advance borrowing and a $12.7 million increase in deposits [119] - Total equity increased by $1.1 million, or 0.5%, to $200.5 million at September 30, 2024, driven by net earnings of $1.4 million [122] - Cash and cash equivalents rose by $1.4 million, or 3.0%, to $47.3 million at September 30, 2024, due to increases in deposits and borrowings [116] - The company had outstanding borrowings of $20.0 million as of September 30, 2024, compared to no borrowings at June 30, 2024 [189] Loan Portfolio - Loans receivable, net, increased by $35.9 million, or 4.9%, to $767.7 million at September 30, 2024, with a $25.6 million, or 14.2%, increase in multi-family loans and an $11.5 million, or 2.9%, increase in residential mortgage loans [117] - The total loan portfolio reached $770.6 million at September 30, 2024, with a net deferred loan origination fee of $2.2 million [125] - Residential mortgage loans comprised 52.7% of the total loan portfolio, while commercial loans accounted for 45.8% as of September 30, 2024 [123] - The company intends to focus on increasing its share of commercial loan originations in its primary market area going forward [124] - Outstanding loan commitments were $64.2 million and unused lines of credit were $36.1 million as of September 30, 2024 [185] Credit Quality - The allowance for credit losses is determined based on the evaluation of the loan portfolio's size and risk characteristics, past events, and economic forecasts [106] - Total non-performing loans decreased from $50,000 to $9,000, representing a reduction of 82% [134] - The total allowance for credit losses included $1,889,000 for multi-family loans and $1,839,000 for residential mortgage loans [137] - The allowance for credit losses (ACL) was maintained at $5,075,000, reflecting management's best estimate of probable losses [137] - The total non-performing assets to total assets ratio remained at 0.00% as of September 30, 2024 [134] Income and Expenses - Net income increased by $11.9 million to $1.4 million for the three months ended September 30, 2024, compared to a net loss of $10.5 million for the same period in 2023 [157] - Interest income rose by $5.9 million, or 106.9%, to $11.5 million for the three months ended September 30, 2024, driven by a 163 basis point increase in yield on interest-earning assets and a $343.2 million increase in average loan balances [158] - Net interest income increased by $3.4 million, or 83.2%, to $7.6 million for the three months ended September 30, 2024, with net interest margin rising 80 basis points to 3.21% [160] - Total noninterest expense decreased by $6.1 million, or 47.3%, to $6.8 million for the three months ended September 30, 2024, from $12.9 million for the same period in 2023 [169] - Noninterest income increased by $288,000, or 56.1%, to $801,000 for the three months ended September 30, 2024, from $513,000 for the same period in 2023 [168] Deposits and Funding - Deposits increased by $12.3 million, or 1.5%, to $819.4 million at September 30, 2024, with 12.5% of total deposits being noninterest-bearing [120] - The aggregate amount of uninsured deposits was $137.6 million as of September 30, 2024, compared to $109.7 million as of June 30, 2024 [155] - The total amount of uninsured certificates of deposit was $24.0 million as of September 30, 2024, up from $21.9 million as of June 30, 2024 [155] - The average balance of certificates of deposit increased by $100.9 million, or 57.3%, to $276.9 million for the three months ended September 30, 2024 [159] - The company raised interest rates on certain deposit products to remain competitive, contributing to the increase in interest-bearing checking accounts [188] Risk Management - The company is subject to various risks including economic conditions, interest rate changes, and competition among financial institutions [100] - The Bank has implemented strategies to manage interest rate risk, including growing transaction deposit accounts and rebalancing the loan portfolio [172] - The estimated economic value of equity (EVE) would decrease by 17.87% with a 200 basis point increase in interest rates as of September 30, 2024 [177] - As of September 30, 2024, net interest income (NII) is forecasted to decrease by 8.21% with a 200 basis point increase in market interest rates, and by 6.64% with a 200 basis point decrease [179] Regulatory Compliance - Somerset Regal Bank exceeded all regulatory capital requirements and is considered "well capitalized" as of September 30, 2024 [190] - The company plans to delay the adoption of new accounting pronouncements applicable to public companies until they are made applicable to private companies [104]

Financial Performance - Net income for the three months ended September 30, 2024, was $1.4 million, a significant increase of $11.9 million, or 113.0%, compared to a net loss of $10.5 million for the same period in 2023[1][5] - The company reported a net income of $1,367 thousand for the three months ended September 30, 2024, compared to a net loss of $10,498 thousand for the same period in 2023[29] - The return on average assets improved to 0.53% for the three months ended September 30, 2024, from a loss of 5.74% in the same period last year[30] - The efficiency ratio significantly improved to 81.23% for the three months ended September 30, 2024, compared to 277.74% for the same period in 2023[30] Asset and Loan Growth - Total assets increased by $32.1 million, or 3.1%, to $1.05 billion at September 30, 2024, driven by new loan originations[2][15] - Net loans rose by $35.9 million, or 4.9%, to $767.7 million at September 30, 2024, with multi-family loans increasing by $25.6 million, or 14.2%[2][18] - Total assets increased to $1,052,960 thousand as of September 30, 2024, compared to $1,020,844 thousand as of June 30, 2024, reflecting a growth of 3.3%[28] Deposit Growth - Total deposits increased by $12.3 million, or 1.5%, to $819.4 million at September 30, 2024, with $114.3 million, or 13.9%, consisting of noninterest-bearing deposits[2][20] - Total deposits increased to $819,384 thousand as of September 30, 2024, from $807,100 thousand as of June 30, 2024, marking a growth of 1.6%[28] Interest Income and Expenses - Interest income surged by $5.9 million, or 106.9%, to $11.5 million for the three months ended September 30, 2024, primarily due to a 163 basis point increase in yield on interest-earning assets[6] - Net interest income increased by $3.4 million, or 83.2%, to $7.6 million for the three months ended September 30, 2024, with net interest margin rising to 3.21%[8] - Net interest income for the three months ended September 30, 2024, was $7,594 thousand, up 83.5% from $4,145 thousand for the same period in 2023[29] - The company recorded total interest income of $11,467 thousand for the three months ended September 30, 2024, compared to $5,543 thousand for the same period in 2023, representing a growth of 106.5%[29] - Noninterest income rose by $288,000, or 56.1%, to $801,000 for the three months ended September 30, 2024, driven by increased service charges and fees[12] - Noninterest expense decreased by $6.1 million, or 47.3%, to $6.8 million for the three months ended September 30, 2024, primarily due to a prior year's charitable contribution[13] Credit Quality - The provision for credit losses recorded a recovery of $154,000 for the three months ended September 30, 2024, compared to a provision of $4.2 million for the same period in 2023[11] - The allowance for credit losses on loans as a percentage of total gross loans was 0.66% as of September 30, 2024, down from 0.77% a year earlier[30] - Non-performing loans as a percentage of total gross loans remained at 0.00% as of September 30, 2024, compared to 0.02% in the same period last year[30] Equity and Book Value - Equity increased by $1.1 million, or 0.5%, to $200.5 million at September 30, 2024, primarily due to net earnings of $1.4 million[22] - Tangible book value per common share increased to $18.17 as of September 30, 2024, from $17.35 a year earlier[30]

Loan Portfolio and Asset Quality - The company offers unsecured personal loans up to $5,000 and rehabilitation loans up to $10,000, with rehabilitation loans subject to a 70% loan-to-value limit [37]. - As of June 30, 2024, the company had loan participations of $4.9 million and purchased $41.5 million of loans from mortgage brokers for its portfolio, compared to $42.6 million in the previous year [39]. - The maximum amount that can be lent to one borrower is limited to 15% of stated capital and reserves, which equates to $29.9 million as of June 30, 2024 [41]. - Total non-performing loans amounted to $50, with a non-performing loans to total loans ratio of 0.01% as of June 30, 2024, compared to 0.06% in the previous year [48]. - The company reported total past due loans of $734,355,000 and total current loans of $735,017,000 as of June 30, 2024 [44]. - The delinquency status for residential mortgages showed 572 loans past due for 30-59 days, with a total of 394,723 current loans [44]. - The company had no troubled debt restructurings as of June 30, 2024, indicating stable asset quality [47]. - The Management Loan Committee can approve residential and commercial loans up to $1.0 million and $3.0 million respectively, with larger loans requiring Board approval [40]. - The company has a loan policy limit of $15.0 million for one borrower and $20.0 million for related borrowers [41]. - As of June 30, 2024, the company had no real estate owned, indicating effective management of foreclosures [49]. - As of June 30, 2024, the company had $50,000 in loans classified as substandard, a decrease from $145,000 as of June 30, 2023, with no assets classified as doubtful or loss [51]. - The allowance for credit losses (ACL) as of June 30, 2024, was $5,229,000, reflecting a comprehensive assessment of probable and estimable losses in the loan portfolio [59]. - The ACL allocated to owner-occupied commercial real estate loans was $1,331,000, representing 25.46% of the total allocated allowance [59]. - The company has established a methodology for determining the allowance for credit losses, which is subject to review by regulatory agencies [52]. Investment Portfolio - The company sold $35.4 million in lower-yielding investment securities during the year ended June 30, 2024, resulting in a pre-tax realized loss of approximately $4.4 million [64]. - The redeployment of $30.9 million from the sale of securities into residential and commercial real estate mortgages is expected to generate an additional $1.4 million in pre-tax earnings annually [64]. - The investment portfolio as of June 30, 2024, consisted primarily of U.S. government-sponsored enterprises totaling $145.7 million, with additional investments in subordinated debentures and collateralized mortgage obligations [63]. - The weighted average yield of the investment securities portfolio was 1.73% as of June 30, 2024, with various maturities contributing to the overall yield [66]. - The company maintains an investment in Federal Home Loan Bank of New York stock as part of its regulatory requirements [63]. - The company aims to maximize portfolio yield while minimizing risk and meeting liquidity needs through its investment policy [61]. Deposits and Funding - As of June 30, 2024, total deposits amounted to $807.1 million, a significant increase from $503.9 million in 2023, representing a growth of 59.9% [74]. - Non-interest-bearing demand deposits increased to $108.0 million (13.39% of total deposits) from $40.7 million (8.07% of total deposits) in 2023 [74]. - Interest-bearing deposits rose to $252.9 million (31.33% of total deposits) with an average interest rate of 1.13%, compared to $137.5 million (27.29%) at an average rate of 0.06% in 2023 [74]. - Time deposits increased to $272.8 million (33.80% of total deposits) with an average interest rate of 3.81%, up from $159.5 million (31.65%) at an average rate of 2.22% in 2023 [74]. - The aggregate amount of uninsured deposits grew to $109.7 million in 2024 from $21.2 million in 2023, indicating a substantial rise in higher-value deposits [74]. - The company had access to Federal Home Loan Bank advances of up to $100.0 million based on unused qualifying collateral as of June 30, 2024 [77]. Employee and Organizational Structure - As of June 30, 2024, the company had 116 full-time employees and two part-time employees, with no union representation [78]. - The company offers a competitive total rewards package, including a 401(k) plan with matching contributions and an Employee Stock Ownership Plan [80]. - The company maintains a strong commitment to employee development, providing access to various training programs and resources [81]. - Somerset Regal Bank, the company's only subsidiary, operates three additional subsidiaries focused on real estate and investment management [83]. Capital and Regulatory Compliance - Somerset Regal Bank exceeded all capital requirements as of June 30, 2024, and was classified as a "well capitalized" institution [95]. - The bank maintains a common equity Tier 1 capital ratio of 7.0%, a Tier 1 capital ratio of 8.5%, and a total capital ratio of 10.5% due to the capital conservation buffer [94]. - Somerset Regal Bank opted into the community bank leverage ratio framework, requiring a leverage ratio greater than 9% to satisfy regulatory capital requirements [95]. - The FDIC assesses institutions with less than $10 billion in total assets at rates ranging from 24.5 to 32 basis points of total assets less tangible capital [104]. - Somerset Regal Bank's most recent FDIC CRA rating, dated May 31, 2022, was "Satisfactory" [108]. - The bank is a member of the Federal Home Loan Bank System and was in compliance with capital stock requirements as of June 30, 2024 [109]. - The FDIC has the authority to establish higher capital requirements for individual institutions deemed necessary [95]. - Somerset Regal Bank's capital distributions and discretionary bonus payments are limited if it does not hold the required capital conservation buffer [94]. - The bank's loans to insiders must follow stringent credit underwriting procedures and are subject to specific limitations [103]. - The FDIC may terminate deposit insurance if the institution engages in unsafe practices or violates applicable laws [105]. - SR Bancorp has consolidated assets of less than $3 billion, thus not subject to consolidated regulatory capital requirements unless advised by the Federal Reserve [112]. - As of June 30, 2024, Somerset Regal Bank had approximately $3.6 million in federal net operating loss carryovers and approximately $7.2 million in state net operating loss carryovers [124]. - At June 30, 2024, Somerset Regal Bank had approximately $2.5 million in capital loss carryovers [125]. - The Corporation Business Tax rate in New Jersey is 9% on adjusted entire net income, with reduced rates for corporations with lower income levels [126]. - SR Bancorp qualifies as an "emerging growth company" under the JOBS Act, allowing it to take advantage of certain reporting exemptions [121]. - Federal Reserve policies dictate that dividends should only be paid out of current earnings and if consistent with the organization's capital needs [115]. - SR Bancorp's common stock is registered with the SEC, subjecting it to various regulatory requirements under the Exchange Act [119]. - The Federal Reserve requires prior written notice for stock repurchases if the gross consideration equals 10% or more of the company's consolidated net worth [114]. - Federal law mandates that bank holding companies act as a source of financial and managerial strength to their subsidiary depository institutions [113]. - SR Bancorp has no plans to elect "financial holding company" status at this time [112].

Financial Performance - The Company reported a net loss of $3.0 million for the three months ended June 30, 2024, compared to a net income of $1.1 million for the previous quarter, marking a decrease of 385.2%[3] - SR Bancorp, Inc. reported a net loss of $10.9 million for the year ended June 30, 2024, compared to a net income of $1.6 million for the year ended June 30, 2023[26] - Noninterest income decreased by $4.4 million, or 852.9%, resulting in a loss of $3.9 million for the three months ended June 30, 2024, primarily due to a loss on the sale of investment securities[32] - The company incurred $4.4 million in merger-related expenses during the year, impacting overall financial performance[26] - The efficiency ratio deteriorated to 162.78% for the three months ended June 30, 2024, compared to 86.19% in the previous quarter, indicating increased operational costs[44] - Basic and diluted earnings per share were both reported at $(0.34) for the three months ended June 30, 2024, compared to $0.12 in the previous quarter[43] Assets and Deposits - Total assets increased by $369.4 million, or 56.7%, to $1.02 billion as of June 30, 2024, compared to $651.5 million a year earlier[6] - Total deposits increased by $303.2 million, or 60.2%, to $807.1 million as of June 30, 2024, driven by the assumption of Regal Bank's deposits[16] - Total assets increased to $1,020,844 thousand as of June 30, 2024, compared to $651,486 thousand in the previous year, representing a growth of 56.5%[40] - Total deposits rose to $807,100 thousand, up from $503,917 thousand year-over-year, reflecting a significant increase of 59.9%[40] Loans and Credit Losses - Net loans rose by $369.6 million, or 102.0%, to $731.9 million as of June 30, 2024, primarily due to the acquisition of Regal Bank's loan portfolio[15] - The Company recorded a provision for credit losses of $153,000 for the three months ended June 30, 2024, reflecting loan growth during the period[12] - The provision for credit losses was $4.2 million for the year ended June 30, 2024, reflecting the company's strategy related to the acquisition of Regal Bancorp[26] - Non-performing loans as a percentage of total gross loans remained low at 0.01% as of June 30, 2024, compared to 0.03% in the previous quarter[44] - The allowance for credit losses on loans as a percentage of non-performing loans was exceptionally high at 10,458.00%[44] Equity and Capital - Equity increased by $77.4 million, or 63.4%, to $199.5 million as of June 30, 2024, largely due to $86.9 million in net proceeds from the Company's initial public offering[17] - Goodwill and intangible assets were recorded at $28.1 million as of June 30, 2024, resulting from the merger with Regal Bancorp[36] Interest Income and Expenses - Net interest income decreased by $329,000, or 4.0%, to $7.9 million for the three months ended June 30, 2024, with a net interest margin of 3.22%[11] - Total interest income increased to $40.9 million for the year ended June 30, 2024, up from $16.1 million in the previous year, representing a growth of 153.5%[22] - Net interest income after provision for credit losses was $25.3 million for the year ended June 30, 2024, compared to $13.7 million in the previous year[22] - Total noninterest expense rose to $34.6 million for the year ended June 30, 2024, up from $13.2 million in the previous year, indicating increased operational costs[22] - Net interest income after provision for credit losses was $7,786 thousand for the three months ended June 30, 2024, down from $8,410 thousand in the previous quarter, a decrease of 7.4%[43] - The net interest margin decreased to 3.22% for the three months ended June 30, 2024, down from 3.31% in the previous quarter[44] Mergers and Acquisitions - The merger with Regal Bancorp was completed on September 19, 2023, resulting in significant increases in assets and deposits[7] - The Company closed two retail branch locations in New Jersey due to proximity to other branches following the merger[8]

(State or Other Jurisdiction of Incorporation) Maryland 001-41808 92-2601722 (Commission File No.) (I.R.S. Employer UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Identification No.) FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): May 23, 2024 SR BANCORP, INC. (Exact Name of Registrant as Specified in Charter) ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 2 ...

Core Viewpoint - SR Bancorp, Inc. has completed a balance sheet repositioning strategy by selling lower-yielding investment securities to enhance future earnings potential [1][2]. Financial Performance - The company sold $35.4 million in book value of investment securities, incurring a pre-tax realized loss of approximately $4.4 million [2]. - The anticipated proceeds of $30.9 million from the sale will be redeployed into residential and commercial real estate mortgages, expected to generate an additional $1.4 million in pre-tax earnings annually, with a positive spread differential of approximately 465 basis points [2]. - The loss from the sale is projected to be recouped within approximately 3.27 years [2]. Capital Position - The loss on the sale of securities had a minimal impact on shareholders' equity and the company's book value per share [3]. - Somerset Regal Bank's capital levels remain well above the requirements to be categorized as well-capitalized following the sale [3]. Future Outlook - The repositioning strategy is expected to be accretive to earnings, net interest margin, and return on assets in future periods [3]. Company Overview - Somerset Regal Bank, a full-service commercial bank headquartered in Bound Brook, New Jersey, operates 15 branches across several counties [4]. - As of March 31, 2024, the bank reported total assets of $1.05 billion, net loans of $698.9 million, deposits of $838.0 million, and total equity of $199.3 million [4].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________ Commission File Number: 001-41808 SR Bancorp, Inc. (Exact Name of Registrant as Specified in its Charter) Maryland 92-2601722 (St ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements reflect significant asset growth and a six-month net loss, primarily driven by the stock conversion and merger with Regal Bancorp, Inc [Condensed Consolidated Statements of Financial Condition](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Total assets increased by **65.0%** to **$1.07 billion**, primarily due to the Regal Bancorp acquisition, which significantly boosted loans, deposits, and stockholders' equity Consolidated Statement of Financial Condition (Unaudited) | Account | Dec 31, 2023 ($ in thousands) | June 30, 2023 ($ in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total cash and cash equivalents | 90,238 | 42,449 | 112.6% | | Loans receivable, net | 695,751 | 362,252 | 92.1% | | Goodwill and intangible assets | 29,032 | — | N/A | | **Total assets** | **1,074,940** | **651,486** | **65.0%** | | Total deposits | 843,311 | 503,917 | 67.4% | | **Total liabilities** | **876,959** | **529,402** | **65.7%** | | **Total stockholders' equity** | **197,981** | **122,084** | **62.2%** | [Condensed Consolidated Statements of (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20(Loss)%20Income) The company reported a **$1.6 million** net income for the three months ended December 31, 2023, but a **$8.9 million** net loss for the six-month period, primarily due to increased credit loss provisions and noninterest expenses including merger-related costs Financial Performance Summary (Unaudited) | Metric ($ in thousands) | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | 9,019 | 3,451 | 13,164 | 6,878 | | Provision (Credit) for Credit Losses | (107) | — | 4,055 | — | | Total Noninterest Income | 365 | 353 | 878 | 701 | | Total Noninterest Expense | 7,476 | 3,329 | 20,413 | 6,705 | | **Net Income (Loss)** | **1,607** | **399** | **(8,891)** | **753** | | **Diluted EPS** | **$0.18** | **N/A** | **($1.81)** | **N/A** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate actions including the mutual-to-stock conversion, IPO, and Regal Bancorp merger, which impacted accounting, loan portfolio composition, and regulatory capital status - On September 19, 2023, the company completed its conversion from a mutual to a stock organization, sold **9,055,172 shares** at **$10.00 per share**, and began trading on Nasdaq as 'SRBK'[23](index=23&type=chunk)[24](index=24&type=chunk) - Immediately following the conversion, the company acquired Regal Bancorp, Inc. for **$23.00 per share** in cash, accounted for using the acquisition method, resulting in goodwill of **$20.5 million** and a core deposit intangible of **$9.1 million**[25](index=25&type=chunk)[91](index=91&type=chunk) - The company adopted ASC 326 (CECL) on July 1, 2023, resulting in a cumulative effect adjustment that decreased retained earnings by **$34,000**[36](index=36&type=chunk)[87](index=87&type=chunk) - Post-merger, commercial loans constituted **44.8%** of total loans as of December 31, 2023, a significant increase from pre-merger levels[110](index=110&type=chunk)[111](index=111&type=chunk) - The Bank is considered 'well capitalized' as of December 31, 2023, with a Tier 1 capital to average total assets ratio of **16.19%**, exceeding the **9.00%** requirement[141](index=141&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes significant financial changes to the September 2023 stock conversion and Regal Bancorp merger, resulting in substantial asset growth, a six-month net loss due to one-time expenses, and enhanced liquidity and capital - The increase in total assets by **$423.5 million** to **$1.07 billion** was primarily due to the acquisition of Regal Bancorp, which had **$428.0 million** in assets, and net proceeds of **$86.9 million** from the stock offering[175](index=175&type=chunk) - The loan portfolio grew by **$333.5 million (92.1%)**, mainly from the **$336.0 million** in loans acquired from Regal, shifting the commercial loan mix to **44.83%** of total loans at December 31, 2023[179](index=179&type=chunk) - The six-month net loss of **$8.9 million** was driven by one-time expenses, including a **$5.4 million** charitable contribution, a **$4.2 million** provision for credit losses, and **$3.9 million** in merger expenses, which, if excluded, would have resulted in a **$1.2 million** net income[202](index=202&type=chunk)[203](index=203&type=chunk) - Net interest income for the three months ended December 31, 2023, increased **161.3%** to **$9.0 million**, with the net interest margin expanding to **3.56%** from **2.28%** year-over-year, reflecting the higher-yielding acquired loan portfolio[191](index=191&type=chunk) - Liquidity was significantly boosted by the net proceeds from the stock offering, with the company maintaining sufficient liquidity, evidenced by a liquid assets to total deposits ratio of **10.7%** at December 31, 2023[226](index=226&type=chunk)[235](index=235&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with sensitivity analysis indicating that a **200 basis point** increase in rates would decrease Economic Value of Equity by **17.71%** and Net Interest Income by **6.59%** Economic Value of Equity (EVE) Sensitivity Analysis (Dec 31, 2023) | Change in Interest Rates (bps) | Estimated Decrease in EVE (%) | | :--- | :--- | | +400 | (37.84)% | | +300 | (28.98)% | | +200 | (17.71)% | | +100 | (7.47)% | | -100 | 4.93% | | -200 | 7.66% | Net Interest Income (NII) Sensitivity Analysis - Year 1 (Dec 31, 2023) | Change in Interest Rates (bps) | Year 1 Change From Level (%) | | :--- | :--- | | +400 | (18.80)% | | +300 | (14.21)% | | +200 | (6.59)% | | +100 | 1.89% | | -100 | (4.26)% | | -200 | (8.80)% | [Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[239](index=239&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended December 31, 2023, that materially affected, or are reasonably likely to materially affect, the company's internal controls[240](index=240&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company is not party to any pending legal proceedings that are expected to have a material adverse effect on its financial condition, results of operations, or cash flows - The company reports no pending legal proceedings that would have a material adverse effect on its financial condition or operations[243](index=243&type=chunk) [Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes in the risk factors applicable to the company from those disclosed in its Annual Report on Form 10-K for the fiscal year ended June 30, 2023 - No material changes to risk factors have occurred since the last Annual Report on Form 10-K[244](index=244&type=chunk) [Other Information Items](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities, no defaults upon senior securities, and no other material information for the reporting period - The company reports no unregistered sales of equity securities, defaults upon senior securities, or other information for the period[245](index=245&type=chunk) [Exhibits](index=66&type=section&id=Item%206.%20Exhibits) The report lists the exhibits filed, which include CEO and CFO certifications pursuant to the Sarbanes-Oxley Act (Sections 302 and 906) and Inline XBRL data files - Exhibits filed with the report include certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, along with XBRL data files[246](index=246&type=chunk)

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the period ended September 30, 2023 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, reflecting the impact of the September 2023 conversion and merger [Condensed Consolidated Statements of Financial Condition](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Total assets increased to $1.11 billion, driven by the Regal Bancorp acquisition and common stock issuance | Financial Metric | September 30, 2023 (Unaudited) (in Thousands) | June 30, 2023 (in Thousands) | | :--- | :--- | :--- | | **Total Assets** | **$1,108,452** | **$651,486** | | Total cash and cash equivalents | $121,111 | $42,449 | | Loans receivable, net | $692,403 | $362,252 | | Goodwill and intangible assets | $29,487 | $0 | | **Total Liabilities** | **$913,973** | **$529,402** | | Total deposits | $877,294 | $503,917 | | **Total Stockholders' Equity** | **$194,479** | **$122,084** | [Condensed Consolidated Statements of (Loss) Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20%28Loss%29%20Income) The company reported a $10.5 million net loss for Q3 2023, driven by credit loss provisions and increased noninterest expenses | Metric (in Thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net Interest Income | $4,145 | $3,427 | | Provision for Credit Losses | $(4,162) | $0 | | Total Noninterest Income | $513 | $341 | | Total Noninterest Expense | $12,937 | $3,369 | | (Loss) Income Before Income Tax | $(12,441) | $399 | | **Net (Loss) Income** | **$(10,498)** | **$354** | | **Diluted EPS** | **$(10.03)** | **N/A** | [Condensed Consolidated Statements of Comprehensive (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29) Total comprehensive loss reached $11.56 million in Q3 2023, including net loss and other comprehensive losses | Metric (in Thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net (Loss) Income | $(10,498) | $354 | | Total other comprehensive loss | $(1,063) | $(774) | | **Total comprehensive loss** | **$(11,561)** | **$(420)** | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased to $194.5 million, primarily due to common stock issuance, partially offset by net loss - Common stock issued in the quarter amounted to **9,507,930 shares**, contributing **$91.6 million** to equity[14](index=14&type=chunk) - The net loss for the quarter reduced retained earnings by **$10.5 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased by $78.7 million, primarily from financing activities including common stock issuance | Cash Flow Activity (in Thousands) | Three Months Ended Sep 30, 2023 | | :--- | :--- | | Net cash (used in) provided by operating activities | $(6,080) | | Net cash used in investing activities | $(571) | | Net cash provided by financing activities | $85,313 | | **Net increase in cash and cash equivalents** | **$78,662** | - The company received **$84.0 million** in proceeds from the issuance of common stock as part of its conversion and stock offering[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes on accounting policies and significant events, including the September 2023 conversion and merger - On September 19, 2023, the company completed its conversion to a stock organization, sold **9,055,172 shares** at **$10.00 per share**, and merged with Regal Bancorp, Inc[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - The company adopted the CECL standard (ASU 2016-13) on July 1, 2023, resulting in a cumulative effect adjustment that decreased retained earnings by **$34,000**[31](index=31&type=chunk)[82](index=82&type=chunk) - The acquisition of Regal Bancorp resulted in the recognition of **$20.5 million** in goodwill and a **$9.0 million** core deposit intangible asset[88](index=88&type=chunk) - As of September 30, 2023, the Bank was categorized as 'well capitalized' under regulatory framework, with a Tier 1 capital to average assets ratio of **15.32%**[137](index=137&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, highlighting the impact of the September 2023 conversion and merger - The company completed its conversion to a stock organization and merger with Regal Bancorp on September 19, 2023, with the income statement for the quarter including only **11 days** of combined operations[152](index=152&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Total assets increased by **$457.0 million (70.1%)** to **$1.11 billion**, primarily due to the **$429.4 million** in assets acquired from Regal Bancorp and net proceeds from the stock offering[174](index=174&type=chunk) - A net loss of **$10.5 million** was recorded for Q3 2023, compared to a **$354,000** net income in Q3 2022, driven by a **$5.4 million** charitable contribution, a **$4.2 million** provision for credit losses, and **$3.9 million** in other merger-related costs[182](index=182&type=chunk) - The loan portfolio composition shifted significantly post-merger, with residential mortgage loans decreasing from **97.8%** to **52.2%** of total loans, while commercial loans increased to **46.1%** of the portfolio[178](index=178&type=chunk)[179](index=179&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Assesses market risk, primarily interest rate risk, and its estimated impact on Economic Value of Equity and Net Interest Income | Change in Interest Rates (bps) | Estimated Change in EVE | Estimated Change in NII (Year 1) | | :--- | :--- | :--- | | +200 | (17.27)% | (1.8)% | | +100 | (6.82)% | +3.0% | | -100 | +4.37% | (4.9)% | | -200 | +6.45% | (10.2)% | [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[221](index=221&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[222](index=222&type=chunk) [PART II. OTHER INFORMATION](index=50&type=section&id=PART%20II.%20OTHER%20INFORMATION) Provides additional information including legal proceedings, risk factors, and equity security sales [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no pending legal proceedings with a material adverse effect on its financials - The company reports no pending legal proceedings that would have a material adverse effect on its financial condition or operations[224](index=224&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported compared to the prior fiscal year's Form 10-K - No material changes in risk factors were reported compared to the Form 10-K for the year ended June 30, 2023[225](index=225&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No unregistered sales of equity securities, use of proceeds, or issuer purchases were reported - None reported[226](index=226&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-41808 SR Bancorp, Inc. (Exact name of Registrant as specified in its Charter) Maryland 92-2601722 (State or other jurisdiction of incorpo ...