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].
SR BANCORP, INC. ANNOUNCES BALANCE SHEET REPOSITIONING