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SR Bancorp, Inc. Reports Quarterly Earnings

On October 30, 2025, SR Bancorp, Inc., the parent company of Somerset Regal Bank, revealed its financial results for the quarter ending September 30, 2025. The report highlighted several key figures that depict the organization's performance during this period.

Financial Overview

In the specified quarter, SR Bancorp recorded a net income of $693,000, translating to $0.09 per share. This figure represents a decline of 49.3% compared to $1.4 million for the same period in the previous year. Notably, this income incorporates net accretion income from the recent acquisition of Regal Bank, amounting to $303,000. Without this adjustment, the adjusted net income would have been $475,000 for Q3 2025, in stark contrast to $627,000 from Q3 2024.

The total assets of SR Bancorp saw an increase, reaching $1.11 billion, a rise of $25.7 million or 2.4% from the preceding quarter. This surge was attributed primarily to a notable growth in net loans and deposits.

Details on Loans and Deposits

The total sum of net loans climbed by 3.7%, amounting to $826.4 million, up $29.2 million from $797.2 million at the end of June 2025. This growth can be linked to strong demand for both residential and commercial loans, with the former seeing a rise of $12.5 million and the latter an increase of $16.0 million. Furthermore, total deposits grew by $23.6 million or 2.8%, bringing the total to $869.6 million. This increase showcases the bank’s strategy of raising interest rates on select deposit products, aimed at remaining competitive in the market.

During this quarter, the bank also borrowed an additional $5.0 million from the Federal Home Loan Bank to bolster liquidity for lending purposes.

Operating Income and Expenses

From an operational perspective, interest income rose by 4.1%, totaling $11.9 million, influenced by a 5.9% growth in interest income on loans. However, there was a marginal decline in interest income related to interest-bearing deposits and securities. This increase in overall interest income, despite an elevated total interest expense of $4.3 million, allowed for a consistent net interest income of $7.6 million, unchanged from the same quarter last year.

As for non-interest income, SR Bancorp faced a 29.5% decline, settling at $565,000 compared to $801,000 previously. This downturn was due to reduced service charges and a decrease in other incomes related to account fees and card charges, reflecting lower transaction volumes.

Conversely, non-interest expenses increased by 4.0%, reaching $7.1 million, largely propelled by a marked rise in salaries and benefits expenses driven by stock-based compensation recognition.

Credit Loss Provisioning and Asset Quality

In terms of credit risk management, SR Bancorp established a provision for credit losses amounting to $171,000, driven by the loan growth in the quarter. Despite this, the bank reported no charge-offs or non-performing loans, maintaining a solid position with the allowance for credit losses standing at 0.67% of total loans.

Future Perspectives

In summary, while SR Bancorp's quarterly earnings reflect a mix of both growth and challenges, the company remains committed to maintaining its competitive edge in a rapidly evolving market. The rise in total assets and loans is promising, despite the noted declines in net income and non-interest revenue. Going forward, careful management of expenses and strategic decision-making will be essential for sustaining growth and navigating future fiscal landscapes.

With its commitment to community banking across New Jersey via its network of 14 branches, Somerset Regal Bank aims to leverage these results to inform its strategic planning and operational adjustments, ensuring they remain a key player in the local banking sector.