SR Bancorp, Inc. reported its financial results for the three months ending September 30, 2025, revealing a net income of $693,000, a decrease of 49.3% from $1.4 million in the same period last year. The decline in profitability was attributed to a significant reduction in net accretion income related to fair value adjustments from the acquisition of Regal Bank, which contributed $303,000 in the current quarter compared to $1 million in the prior year. Total interest income increased by 4.1% to $11.9 million, driven by a rise in the average balance of interest-earning assets, although the yield on these assets decreased slightly.
Total assets for SR Bancorp increased by $25.7 million, or 2.4%, to $1.11 billion as of September 30, 2025, primarily due to a $29.2 million increase in loans receivable, which rose to $826.4 million. This growth was supported by strong demand for residential and commercial loans. However, the company experienced a $3.6 million decrease in securities held-to-maturity, which fell to $138.2 million. Total liabilities also rose, increasing by $27.5 million, or 3.1%, to $918.2 million, largely due to a $23.6 million increase in deposits.
In terms of operational metrics, SR Bancorp's total deposits reached $869.6 million, reflecting a 2.8% increase from the previous quarter. The growth in deposits was attributed to competitive interest rates on certain time deposit accounts. The company’s borrowings from the Federal Home Loan Bank increased to $35 million, up from $30 million, to enhance liquidity for funding new loans. The allowance for credit losses was adjusted to $5.5 million, representing 0.67% of total loans, indicating a cautious approach to potential credit risks amid loan growth.
Strategically, SR Bancorp continues to focus on expanding its commercial lending capabilities following the acquisition of Regal Bank in September 2023. The company aims to increase its market share in commercial loan originations while maintaining a balanced portfolio that includes a significant portion of residential mortgage loans. Looking ahead, management expressed confidence in the bank's ability to navigate market conditions and maintain its capital adequacy, as it remains classified as "well capitalized" under regulatory guidelines.
Overall, while SR Bancorp faced challenges in profitability and noninterest income, it demonstrated resilience through asset growth and strategic positioning in the lending market. The company is committed to enhancing its operational efficiency and capitalizing on market opportunities as it moves forward.
About SR Bancorp, Inc.
SR Bancorp, Inc. is a Maryland-based holding company for Somerset Regal Bank, offering banking services in New Jersey. It provides a range of deposit and loan products, including residential, commercial real estate, multi-family, and consumer loans. The company focuses on community banking, commercial and residential lending, and investment securities, serving diverse markets with competitive banking solutions and regulatory compliance.
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