SR Bancorp Reports 9.7% Asset Growth and Merger with Regal Bancorp

SR Bancorp, Inc. reported a total asset increase of 9.7% to $1.19 billion as of June 30, 2026, compared to $1.09 billion the previous year. The company’s deposits rose by 9.5% to $926.4 million, driven by a significant increase in interest-bearing demand accounts, which grew by 21.9%. However, net income decreased by $1.8 million to $3.4 million, influenced by a lack of extraordinary gains that had bolstered the previous year's earnings, including $1.5 million from life insurance proceeds. The company’s net interest income increased by 5.6% to $31.2 million, attributed to a rise in interest income from loans, which was partially offset by higher interest expenses.

The fiscal year saw SR Bancorp complete a significant merger with Regal Bancorp, enhancing its market presence in New Jersey. This merger, finalized on September 19, 2023, allowed SR Bancorp to expand its operations into Essex, Morris, and Union Counties, while also increasing its commercial lending capabilities. The merger was part of a mutual-to-stock conversion that raised $90.5 million through the sale of 9,055,172 shares at $10 each. The company also contributed shares and cash to the Somerset Regal Charitable Foundation, further solidifying its community engagement.

Operationally, SR Bancorp's loan portfolio composition shifted post-merger, with residential mortgage loans comprising 52.6% and commercial loans 45.7% of total loans as of June 30, 2026. The company reported no non-performing loans, reflecting a stable credit quality. The allowance for credit losses was maintained at 0.65% of total loans, indicating a cautious approach to potential credit risks. The company’s employee headcount stood at 115 full-time employees, with no labor union representation, suggesting a stable workforce environment.

Looking ahead, SR Bancorp aims to leverage its expanded market presence and enhanced commercial lending capabilities to drive growth. The company plans to focus on increasing its core deposits and transaction accounts while continuing to provide superior customer service. Additionally, it intends to utilize its SBA preferred lender status to boost commercial lending activity, which could generate additional noninterest income. The management remains vigilant regarding market conditions and competition, particularly in light of ongoing economic uncertainties and regulatory changes that could impact operations.