SR Bancorp(SRBK) - 2025 Q4 - Annual Results

Financial Highlights SR Bancorp achieved significant financial recovery in FY2025, marked by a return to profitability and robust asset growth Quarterly Results (Q4 2025) SR Bancorp reported a Q4 2025 net income of $823,000, a significant turnaround from a $3.0 million net loss in Q4 2024, primarily due to the absence of prior year's securities sale loss | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Income (Loss) | $823,000 | ($3.0 million) | | EPS (Basic & Diluted) | $0.10 | N/A | | Adjusted Net Income (Loss) | $515,000 | ($499,000) | Annual Results (FY 2025) For FY2025, the company achieved $3.7 million net income, a substantial improvement from a $10.9 million net loss in FY2024, driven by reduced one-time expenses | Metric | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :--- | :--- | :--- | | Net Income (Loss) | $3.7 million | ($10.9 million) | | EPS (Basic & Diluted) | $0.44 | N/A | | Adjusted Net Income | $1.7 million | $1.0 million | Balance Sheet Summary As of June 30, 2025, total assets grew 6.1% to $1.08 billion, fueled by an 8.9% increase in net loans and a 4.8% rise in deposits | Balance Sheet Item | June 30, 2025 | June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Assets | $1.08 billion | $1.02 billion | +6.1% | | Net Loans | $797.3 million | $731.9 million | +8.9% | | Total Deposits | $846.0 million | $807.1 million | +4.8% | Corporate Developments The company successfully completed its mutual-to-stock conversion and integrated Regal Bancorp, enhancing its organizational structure Completed Stock Offering and Merger The company completed its mutual-to-stock conversion and a $90.55 million stock offering on September 19, 2023, followed by the merger with Regal Bancorp - Completed the conversion from mutual to stock form and a related stock offering on September 19, 2023[5] - Successfully merged with Regal Bancorp and its subsidiary Regal Bank, subsequently renaming the combined bank entity to Somerset Regal Bank[6] Comparison of Operating Results Operating results show a significant turnaround in profitability, despite some net interest margin compression, driven by reduced one-time costs For the Three Months Ended June 30, 2025 and 2024 Net income for Q4 2025 improved to $823,000 from a $3.0 million loss, primarily due to the absence of a $4.4 million securities sale loss, despite a 6.1% decrease in net interest income | Metric | Q4 2025 | Q4 2024 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $7.5 million | $7.9 million | -6.1% | | Net Interest Rate Spread | 2.33% | 2.69% | -36 bps | | Net Interest Margin | 2.90% | 3.22% | -32 bps | - Provision for credit losses was $81,000, reflecting loan growth. The bank had no charge-offs and no non-performing loans at quarter-end[13] - Noninterest income increased by $4.4 million, primarily because the prior-year period included a $4.4 million loss on the sale of available-for-sale securities[14] - Noninterest expense rose 3.3% to $6.8 million, mainly due to higher salaries and professional fees, partially offset by lower data processing costs post-merger[15] For the Year Ended June 30, 2025 and 2024 FY2025 net income reached $3.7 million from a $10.9 million loss in FY2024, primarily due to a $7.5 million decrease in noninterest expenses, despite a 26 basis point decline in net interest margin | Metric | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $29.6 million | $29.4 million | +0.7% | | Net Interest Rate Spread | 2.35% | 2.73% | -38 bps | | Net Interest Margin | 2.93% | 3.19% | -26 bps | - A recovery for credit losses of $24,000 was recorded for the year, compared to a $4.1 million provision in the prior year, which was related to the Regal Bancorp acquisition[21] - Noninterest income increased by $4.7 million, primarily due to the absence of the prior year's $4.4 million loss on securities sales[22] - Noninterest expense decreased by 21.8% to $27.1 million, mainly because the prior year included a $5.4 million charitable contribution and higher one-time merger-related costs[24] Comparison of Financial Condition The company's financial condition improved with asset growth funded by increased deposits and new borrowings, while equity saw a slight decrease due to stock repurchases Assets Total assets grew 6.1% to $1.08 billion as of June 30, 2025, driven by an 8.9% increase in net loans, partially offset by a decrease in securities | Asset Category | June 30, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $1.08 billion | $1.02 billion | +$62.2M | | Cash & Cash Equivalents | $57.8 million | $45.9 million | +$11.9M | | Securities | $141.8 million | $156.1 million | -$14.3M | | Net Loans Receivable | $797.3 million | $731.9 million | +$65.5M | Liabilities and Equity Asset growth was funded by a 4.8% increase in total deposits to $846.0 million and $30.0 million in new FHLB borrowings, while total equity decreased 3.6% due to stock repurchases - Total deposits increased by $38.9 million (4.8%) to $846.0 million, driven by competitive rates on interest-bearing products[29] - The Bank borrowed $30.0 million from the FHLB of New York during the year to fund loan growth; no borrowings were outstanding at the prior year-end[30] - Total equity decreased by $7.1 million (3.6%) to $192.4 million, mainly due to $11.3 million in stock repurchases[31] Financial Statements Detailed financial statements reflect the company's improved financial health, showing increased assets, deposits, and a return to profitability Consolidated Statements of Financial Condition As of June 30, 2025, the balance sheet shows total assets of $1.08 billion, supported by $846.0 million in deposits and $192.4 million in stockholders' equity, with net loans as the largest asset Balance Sheet Summary (in thousands) | Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Assets | $1,083,016 | $1,020,844 | | Total cash and cash equivalents | $57,779 | $45,909 | | Loans receivable, net | $797,324 | $731,859 | | Total Liabilities | $890,625 | $821,361 | | Total deposits | $846,022 | $807,100 | | Borrowings | $30,000 | $0 | | Total Stockholders' Equity | $192,391 | $199,483 | Consolidated Statements of Income (Quarterly) For Q4 2025, the company reported $11.7 million in total interest income and $7.5 million in net interest income, resulting in a net income of $823,000 after expenses and taxes Quarterly Income Statement Summary (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Interest Income | $7,452 | $7,939 | | Provision for Credit Losses | $81 | $153 | | Total noninterest income (loss) | $522 | ($3,885) | | Total noninterest expense | $6,815 | $6,599 | | Net Income (Loss) | $823 | ($3,032) | Consolidated Statements of Income (Annual) For FY2025, the company generated $46.3 million in total interest income and $29.6 million in net interest income, achieving a net income of $3.7 million due to credit loss recovery and lower expenses Annual Income Statement Summary (in thousands) | Metric | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :--- | :--- | :--- | | Net Interest Income | $29,581 | $29,371 | | (Credit) Provision for Credit Losses | ($24) | $4,066 | | Total noninterest income (loss) | $2,228 | ($2,491) | | Total noninterest expense | $27,055 | $34,583 | | Net Income (Loss) | $3,747 | ($10,860) | Key Financial Ratios and Non-GAAP Measures Key financial ratios demonstrate improved profitability and strong asset quality, with non-GAAP adjustments providing a clearer view of core performance Selected Ratios FY2025 profitability significantly improved with ROA at 0.35% and ROE at 1.95%, while net interest margin compressed to 2.93%, and asset quality remained excellent with 0.00% non-performing loans Key Ratios | Ratio | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :--- | :--- | :--- | | Return on average assets (ROA) | 0.35% | (1.10)% | | Return on average equity (ROE) | 1.95% | (5.93)% | | Net interest margin | 2.93% | 3.19% | | Non-performing loans / total gross loans | 0.00% | 0.01% | | Tangible book value per share | $18.67 | $18.02 | Non-GAAP Financial Information Non-GAAP adjusted net income for FY2025 was $1.7 million, up from $950,000 in the prior year, providing a clearer view of core operational performance by excluding non-recurring items Non-GAAP Net Income Reconciliation (in thousands) | Metric | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :--- | :--- | :--- | | Net Income (Loss) - GAAP | $3,747 | ($10,860) | | One-time merger related expenses | $0 | $4,390 | | Provision for credit losses (acquired) | $0 | $4,165 | | Sale of AFS securities | $0 | $4,446 | | Net accretion/amortization | ($2,824) | ($4,131) | | Charitable contribution | $0 | $5,433 | | Tax impact of adjustments | ($794) | $2,493 | | Net Income, adjusted (Non-GAAP) | $1,717 | $950 |