SR BANCORP, INC. ANNOUNCES QUARTERLY AND ANNUAL FINANCIAL RESULTS
SR Bancorp (NASDAQ: SRBK) reported a net loss of $10.9 million for the year ended June 30, 2024, compared to net income of $1.6 million in 2023. The loss included one-time expenses related to the acquisition of Regal Bancorp, including $4.4 million in merger-related costs and a $4.2 million provision for credit losses. The company also incurred a $4.4 million loss on the sale of securities as part of a balance sheet repositioning strategy. Total assets increased 56.7% to $1.02 billion, with net loans up 102% to $731.9 million. Deposits rose 60.2% to $807.1 million. The company completed its stock offering and merger with Regal Bancorp on September 19, 2023, selling 9,055,172 shares at $10 per share.
SR Bancorp (NASDAQ: SRBK) ha registrato una perdita netta di 10,9 milioni di dollari per l'anno conclusosi il 30 giugno 2024, rispetto a un utile netto di 1,6 milioni di dollari nel 2023. La perdita ha incluso spese straordinarie legate all'acquisizione di Regal Bancorp, tra cui 4,4 milioni di dollari in costi di fusione e una riserva di 4,2 milioni di dollari per perdite su crediti. La società ha inoltre subito una perdita di 4,4 milioni di dollari dalla vendita di titoli come parte di una strategia di riposizionamento del bilancio. Gli attivi totali sono aumentati del 56,7%, raggiungendo 1,02 miliardi di dollari, con i prestiti netti in aumento del 102% a 731,9 milioni di dollari. I depositi sono aumentati del 60,2% a 807,1 milioni di dollari. La società ha completato la propria offerta di azioni e la fusione con Regal Bancorp il 19 settembre 2023, vendendo 9.055.172 azioni a 10 dollari per azione.
SR Bancorp (NASDAQ: SRBK) reportó una pérdida neta de 10,9 millones de dólares para el año que finalizó el 30 de junio de 2024, en comparación con una ganancia neta de 1,6 millones de dólares en 2023. La pérdida incluyó gastos únicos relacionados con la adquisición de Regal Bancorp, incluidos 4,4 millones de dólares en costos de fusión y una provisión de 4,2 millones de dólares para pérdidas de crédito. La compañía también incurrió en una pérdida de 4,4 millones de dólares por la venta de valores como parte de una estrategia de reposicionamiento del balance. Los activos totales aumentaron un 56,7% a 1,02 mil millones de dólares, con préstamos netos en aumento del 102% a 731,9 millones de dólares. Los depósitos subieron un 60,2% a 807,1 millones de dólares. La empresa completó su oferta de acciones y la fusión con Regal Bancorp el 19 de septiembre de 2023, vendiendo 9.055.172 acciones a 10 dólares por acción.
SR Bancorp (NASDAQ: SRBK)는 2024년 6월 30일로 종료된 연도에 대해 1,090만 달러의 순손실을 보고했으며, 이는 2023년에 비해 160만 달러의 순이익과 비교됩니다. 이 손실에는 Regal Bancorp 인수와 관련된 일회성 비용이 포함되어 있으며, 여기에는 440만 달러의 합병 관련 비용과 420만 달러의 신용 손실에 대한 적립금이 포함됩니다. 회사는 또한 증권 매각에서 440만 달러의 손실을 입었으며 이는 자산 부채 재편성 전략의 일환입니다. 총 자산은 56.7% 증가하여 10억 2천만 달러에 달했으며, 순대출은 102% 증가하여 7억 3,190만 달러에 이릅니다. 예금은 60.2% 증가하여 8억 710만 달러에 도달했습니다. 회사는 2023년 9월 19일 Regal Bancorp와의 주식 공모 및 합병을 완료했으며, 주당 10달러에 9,055,172주를 판매했습니다.
SR Bancorp (NASDAQ: SRBK) a annoncé une perte nette de 10,9 millions de dollars pour l'année se terminant le 30 juin 2024, par rapport à un bénéfice net de 1,6 million de dollars en 2023. Cette perte comprenait des dépenses uniques liées à l'acquisition de Regal Bancorp, y compris 4,4 millions de dollars de coûts liés à la fusion et une provision de 4,2 millions de dollars pour des pertes sur crédits. L'entreprise a également enregistré une perte de 4,4 millions de dollars sur la vente de titres dans le cadre d'une stratégie de repositionnement du bilan. Les actifs totaux ont augmenté de 56,7% pour atteindre 1,02 milliard de dollars, avec des prêts nets en hausse de 102% à 731,9 millions de dollars. Les dépôts ont augmenté de 60,2% pour atteindre 807,1 millions de dollars. L'entreprise a finalisé son offre d'actions et sa fusion avec Regal Bancorp le 19 septembre 2023, en vendant 9 055 172 actions à 10 dollars chacune.
SR Bancorp (NASDAQ: SRBK) berichtete für das am 30. Juni 2024 endende Jahr von einem Nettoverlust von 10,9 Millionen Dollar, im Vergleich zu einem Nettogewinn von 1,6 Millionen Dollar im Jahr 2023. Der Verlust beinhaltete einmalige Aufwendungen, die mit der Übernahme von Regal Bancorp zusammenhängen, einschließlich 4,4 Millionen Dollar an fusionsbezogenen Kosten und einer Rückstellung von 4,2 Millionen Dollar für Kreditausfälle. Das Unternehmen verzeichnete außerdem einen Verlust von 4,4 Millionen Dollar aus dem Verkauf von Wertpapieren im Rahmen einer Bilanzumstrukturierungsstrategie. Die Gesamtaktiva stiegen um 56,7% auf 1,02 Milliarden Dollar, wobei die Nettokredite um 102% auf 731,9 Millionen Dollar zunahmen. Die Einlagen stiegen um 60,2% auf 807,1 Millionen Dollar. Das Unternehmen schloss am 19. September 2023 sein Aktienangebot und die Fusion mit Regal Bancorp ab und verkaufte 9.055.172 Aktien zu je 10 Dollar.
- Total assets increased 56.7% to $1.02 billion
- Net loans grew 102% to $731.9 million
- Deposits rose 60.2% to $807.1 million
- Successful completion of stock offering and merger with Regal Bancorp
- Net loss of $10.9 million for the year ended June 30, 2024
- $4.4 million loss on the sale of securities
- $4.4 million in merger-related expenses
- $4.2 million provision for credit losses related to acquisition
Insights
SR Bancorp's financial results present a complex picture with significant one-time expenses impacting the bottom line. The $10.9 million net loss for the year ended June 30, 2024, compared to a $1.6 million net income the previous year, is primarily attributed to merger-related expenses, provision for credit losses and a charitable contribution. However, the underlying business shows growth, with total assets increasing by
The acquisition of Regal Bancorp has been transformative, significantly expanding SR Bancorp's loan portfolio and deposit base. Net loans increased by
The
The bank's net interest margin decreased slightly to
Overall, while the headline numbers appear negative, the underlying trends and strategic moves suggest SR Bancorp is positioning itself for improved performance in the future, assuming successful integration of the Regal Bancorp acquisition and realization of the expected benefits from the balance sheet repositioning.
SR Bancorp's recent financial results and strategic moves reflect broader trends in the banking industry, particularly among smaller regional banks. The acquisition of Regal Bancorp is a clear indication of the ongoing consolidation in the sector, as banks seek scale to compete more effectively and manage regulatory costs.
The balance sheet repositioning, involving the sale of securities at a loss to reinvest in higher-yielding loans, is a common strategy in a rising interest rate environment. This move aims to improve the bank's interest rate spread and net interest margin over time, which is important given the current challenges in the interest rate landscape.
The closure of two branch locations following the merger aligns with the industry-wide trend of optimizing physical footprints as digital banking adoption increases. This could lead to cost savings and improved efficiency ratios in the long term.
The bank's
The increase in commercial real estate loans as a percentage of the portfolio (from
In conclusion, SR Bancorp's actions reflect a proactive approach to navigating the challenges facing smaller banks, but successful execution of these strategies will be critical in determining the bank's future performance and competitiveness.
The acquisition of Regal Bancorp marks a significant milestone for SR Bancorp, but the true test lies in the successful integration of the two entities. The
The immediate impact of the merger is evident in the dramatic growth of SR Bancorp's balance sheet. Total assets increased by
The closure of two branches post-merger is a common efficiency measure, aimed at eliminating redundancies and reducing operating costs. This move aligns with the industry trend of optimizing physical presence while enhancing digital capabilities.
The
Looking ahead, key areas to monitor include:
- Cultural integration and employee retention
- Realization of cost synergies
- Cross-selling opportunities within the expanded customer base
- Harmonization of technology systems and processes
- Management of the expanded and diversified loan portfolio
The success of this merger will ultimately be judged by SR Bancorp's ability to leverage its increased scale and market presence to drive sustainable growth and profitability in the coming years.
Total assets were
For the three months ended June 30, 2024 (unaudited), the Company reported a net loss of
The financial information contained in this earnings release as of and for the periods ended June 30, 2024 and March 31, 2024 is for SR Bancorp and Somerset Regal Bank. Financial information as of June 30, 2023 is for Somerset Savings Bank, SLA, on a stand-alone basis.
Completed Stock Offering and Merger
The conversion of Somerset Savings Bank, SLA from the mutual to stock form of organization and related stock offering by the Company was completed on September 19, 2023. SR Bancorp, Inc.'s common stock began trading on the Nasdaq Capital Market under the trading symbol "SRBK" on September 20, 2023.
The Company sold 9,055,172 shares of common stock at a price of
Promptly following the completion of the conversion and related stock offering, Regal Bancorp merged with and into the Company, with the Company as the surviving entity (the "Merger"). Immediately following the Merger, Regal Bank, a
Branch Closures
On January 10, 2024, the Company closed one of its retail branch locations in
Comparison of Operating Results for the Three Months Ended June 30, 2024 and March 31, 2024
General. Net income decreased
Interest Income. Interest income decreased
Interest Expense. Interest expense increased
Net Interest Income. Net interest income decreased
Provision for Credit Losses. The Bank establishes provisions for credit losses, which are charged to operations in order to maintain the allowance for credit losses at a level it considers necessary to absorb probable credit losses attributable to loans that are reasonably estimable at the balance sheet date. In determining the level of the allowance for credit losses, the Bank considers, among other things, past and current loss experience, evaluations of real estate collateral, economic conditions, the amount and type of lending, adverse situations that may affect a borrower's ability to repay a loan and the levels of delinquent, classified and criticized loans. The amount of the allowance is based on estimates and the ultimate losses may vary from such estimates as more information becomes available or conditions change. The Bank assesses the allowance for credit losses and records provisions for credit losses on a quarterly basis.
The Bank recorded a provision for credit losses of
Noninterest Income. Noninterest income decreased
Noninterest Expense. Noninterest expense decreased
Income Tax Expense. The provision for income taxes was
Comparison of Financial Condition at June 30, 2024 and June 30, 2023
Assets. Assets increased
Cash and Cash Equivalents. Cash and cash equivalents increased
Securities. Total securities (securities available-for-sale and securities held-to-maturity) decreased
Loans. Loans receivable, net, increased
Goodwill and Intangible Assets. Goodwill and intangible assets were
Deposits. Deposits increased
Borrowings. During the year ended June 30, 2023, the Bank borrowed
Equity. Equity increased
About Somerset Regal Bank
Somerset Regal Bank is a full-service
Forward-Looking Statements
Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements, which are based on certain current assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions. Forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, inflation, general economic conditions or conditions within the securities markets, our ability to successfully integrate acquired operations and realize the expected level of synergies and cost savings, real estate market values in the Bank's lending area changes in the quality of our loan and security portfolios, increases in non-performing and classified loans, economic assumptions or changes in our methodology that may impact our allowance for credit losses calculation, changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio, the availability of low-cost funding, monetary and fiscal policies of the
SR Bancorp, Inc. and Subsidiaries | ||||||||
Consolidated Statements of Financial Condition June 30, 2024 (Unaudited) and June 30, 2023 (Dollars in thousands) | ||||||||
June 30, 2024 | June 30, 2023 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and due from banks | $ | 8,622 | $ | 8,657 | ||||
Interest-bearing deposits at other banks | 37,287 | 33,792 | ||||||
Total cash and cash equivalents | 45,909 | 42,449 | ||||||
Securities available-for-sale, at fair value | — | 36,076 | ||||||
Securities held-to-maturity, at amortized cost | 158,325 | 171,185 | ||||||
Equity securities, at fair value | 25 | 24 | ||||||
Loans receivable, net of allowance for credit losses of | 731,859 | 362,252 | ||||||
Premises and equipment, net | 5,419 | 3,546 | ||||||
Right-of-use asset | 2,311 | 19 | ||||||
Restricted equity securities, at cost | 1,231 | 726 | ||||||
Accrued interest receivable | 2,695 | 1,189 | ||||||
Bank owned life insurance | 37,093 | 28,714 | ||||||
Goodwill and intangible assets | 28,141 | — | ||||||
Other assets | 7,836 | 5,306 | ||||||
Total assets | $ | 1,020,844 | $ | 651,486 | ||||
Liabilities and Equity | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 108,026 | $ | 40,687 | ||||
Interest-bearing | 699,074 | 463,230 | ||||||
Total deposits | 807,100 | 503,917 | ||||||
Borrowings | — | 20,000 | ||||||
Advance payments by borrowers for taxes and insurance | 8,073 | 4,313 | ||||||
Accrued interest payable | 149 | — | ||||||
Lease liability | 2,403 | 19 | ||||||
Other liabilities | 3,636 | 1,153 | ||||||
Total liabilities | 821,361 | 529,402 | ||||||
Equity | ||||||||
Common stock, | 95 | — | ||||||
Additional paid-in capital | 91,436 | — | ||||||
Retained earnings | 116,204 | 127,099 | ||||||
Unearned compensation ESOP | (7,036) | — | ||||||
Accumulated other comprehensive loss | (1,216) | (5,015) | ||||||
Total stockholders' equity | 199,483 | 122,084 | ||||||
Total liabilities and stockholders' equity | $ | 1,020,844 | $ | 651,486 | ||||
SR Bancorp, Inc. and Subsidiaries | ||||||||
Consolidated Statements of Income For the Years Ended June 30, 2024 (Unaudited) and June 30, 2023 (Dollars in thousands) | ||||||||
Year Ended June 30, | ||||||||
2024 | 2023 | |||||||
(Unaudited) | ||||||||
Interest Income | ||||||||
Loans, including fees | $ | 33,619 | $ | 11,317 | ||||
Securities: | ||||||||
Taxable | 3,198 | 3,680 | ||||||
Federal funds sold | 157 | — | ||||||
Interest bearing deposits at other banks | 3,892 | 1,122 | ||||||
Total interest income | 40,866 | 16,119 | ||||||
Interest Expense | ||||||||
Deposits: | ||||||||
Demand | 1,123 | 96 | ||||||
Savings and time | 9,564 | 2,087 | ||||||
Borrowings | 808 | 245 | ||||||
Total interest expense | 11,495 | 2,428 | ||||||
Net Interest Income | 29,371 | 13,691 | ||||||
Provision for Credit Losses | 4,066 | — | ||||||
Net Interest Income After Provision For Credit Losses | 25,305 | 13,691 | ||||||
Noninterest Income | ||||||||
Service charges and fees | 818 | 667 | ||||||
Increase in cash surrender value of bank owned life insurance | 908 | 658 | ||||||
Fees and service charges on loans | 88 | 21 | ||||||
Unrealized gain on equity securities | 1 | 5 | ||||||
Realized loss on sale of investments | (4,413) | (119) | ||||||
Other | 107 | 33 | ||||||
Total noninterest (loss) income | (2,491) | 1,265 | ||||||
Noninterest Expense | ||||||||
Salaries and employee benefits | 15,102 | 7,787 | ||||||
Occupancy | 2,349 | 728 | ||||||
Furniture and equipment | 966 | 561 | ||||||
Data Processing | 3,100 | 1,216 | ||||||
Advertising | 301 | 198 | ||||||
FDIC premiums | 468 | 182 | ||||||
Directors fees | 389 | 327 | ||||||
Professional fees | 1,999 | 1,029 | ||||||
Insurance | 546 | 165 | ||||||
Telephone, postage and supplies | 626 | 316 | ||||||
Other | 8,737 | 644 | ||||||
Total noninterest expense | 34,583 | 13,153 | ||||||
Net (Loss) Income Before Income Tax Expense | (11,769) | 1,803 | ||||||
Income Tax (Benefit) Expense | (909) | 250 | ||||||
Net (Loss) Income | $ | (10,860) | $ | 1,553 | ||||
Basic earnings per share | $ | (1.59) | $ | — | ||||
Diluted earnings per share | $ | (1.59) | $ | — | ||||
SR Bancorp, Inc. and Subsidiaries | ||||||||
Consolidated Statements of Income For the Three Months Ended June 30, 2024 (Unaudited) and March 31, 2024 (Unaudited) (Dollars in thousands) | ||||||||
Three Months Ended | ||||||||
June 30, 2024 | March 31, 2024 | |||||||
(Unaudited) | ||||||||
Interest Income | ||||||||
Loans, including fees | $ | 9,859 | $ | 9,819 | ||||
Securities: | ||||||||
Taxable | 709 | 779 | ||||||
Federal funds sold | — | 76 | ||||||
Interest bearing deposits at other banks | 821 | 974 | ||||||
Total interest income | 11,389 | 11,648 | ||||||
Interest Expense | ||||||||
Deposits: | ||||||||
Demand | 619 | 122 | ||||||
Savings and time | 2,730 | 3,031 | ||||||
Borrowings | 101 | 227 | ||||||
Total interest expense | 3,450 | 3,380 | ||||||
Net Interest Income | 7,939 | 8,268 | ||||||
Provision (Credit) for Credit Losses | 153 | (142) | ||||||
Net Interest Income After Provision (Credit) For Credit Losses | 7,786 | 8,410 | ||||||
Noninterest Income | ||||||||
Service charges and fees | 242 | 193 | ||||||
Increase in cash surrender value of bank owned life insurance | 253 | 247 | ||||||
Fees and service charges on loans | 41 | 36 | ||||||
Unrealized (loss) gain on equity securities | (2) | 2 | ||||||
Realized (loss) gain on sale of investments | (4,446) | 19 | ||||||
Other | 27 | 19 | ||||||
Total noninterest (loss) income | (3,885) | 516 | ||||||
Noninterest Expense | ||||||||
Salaries and employee benefits | 3,052 | 3,631 | ||||||
Occupancy | 675 | 772 | ||||||
Furniture and equipment | 292 | 285 | ||||||
Data Processing | 708 | 951 | ||||||
Advertising | 97 | 75 | ||||||
FDIC premiums | 120 | 120 | ||||||
Directors fees | 101 | 103 | ||||||
Professional fees | 224 | 357 | ||||||
Insurance | 157 | 165 | ||||||
Telephone, postage and supplies | 235 | 210 | ||||||
Other | 938 | 902 | ||||||
Total noninterest expense | 6,599 | 7,571 | ||||||
Net (Loss) Income Before Income Tax Expense | (2,698) | 1,355 | ||||||
Income Tax Expense | 334 | 292 | ||||||
Net (Loss) Income | $ | (3,032) | $ | 1,063 | ||||
Basic earnings per share | $ | (0.34) | $ | 0.12 | ||||
Diluted earnings per share | $ | (0.34) | $ | 0.12 | ||||
SR Bancorp, Inc. and Subsidiaries | ||||||||
Selected Ratios (Dollars in thousands, except per share data) | ||||||||
Three Months Ended | ||||||||
June 30, 2024 | March 31, 2024 | |||||||
(Unaudited) | ||||||||
Performance Ratios: (1) | ||||||||
(Loss) return on average assets (2) | (1.17) % | 0.39 % | ||||||
(Loss) return on average equity (3) | (6.06) % | 2.12 % | ||||||
Net interest margin (4) | 3.22 % | 3.31 % | ||||||
Net interest rate spread (5) | 2.69 % | 2.83 % | ||||||
Efficiency ratio (6) | 162.78 % | 86.19 % | ||||||
Total gross loans to total deposits | 91.33 % | 84.00 % | ||||||
Asset Quality Ratios: | ||||||||
Allowance for credit losses on loans as a percentage of total gross loans | 0.71 % | 0.72 % | ||||||
Allowance for credit losses on loans as a percentage of non-performing loans | 10458.00 % | 2307.27 % | ||||||
Net (charge-offs) recoveries to average outstanding loans during the period | 0.00 % | 0.00 % | ||||||
Non-performing loans as a percentage of total gross loans | 0.01 % | 0.03 % | ||||||
Non-performing assets as a percentage of total assets | 0.00 % | 0.02 % | ||||||
Other Data: | ||||||||
Tangible book value per common share (7) | ||||||||
Tangible common equity to tangible assets | 17.26 % | 16.66 % | ||||||
(1) | Performance ratios for the three month periods ended June 30, 2024 and March 31, 2024 are annualized. |
(2) | Represents net income divided by average total assets. |
(3) | Represents net income divided by average equity. |
(4) | Represents net interest income as a percentage of average interest-earning assets. |
(5) | Represents net interest rate spread as a percentage of average interest-earning assets. |
(6) | Represents non-interest expense divided by the sum of net interest income and non-interest income. |
(7) | Tangible book value per share is calculated based on total stockholders' equity, excluding intangible assets (goodwill and core deposit intangibles), divided by total shares outstanding as of the balance sheet date. Goodwill and core deposit intangibles were |
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SOURCE SR Bancorp, Inc.
FAQ
What was SR Bancorp's (SRBK) net income for the year ended June 30, 2024?
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