SR Bancorp, Inc.

SR Bancorp, Inc. Annual Review – Plain English Edition

Let’s cut through the noise and see how SR Bancorp really did this year. No jargon, just the key facts you need as an investor.

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1. The Big Picture

SR Bancorp is a community bank focused on mortgages, savings accounts, and small-business loans. This year was all about integrating their September 2023 merger with Regal Bancorp (which added Regal Bank’s operations). They also streamlined by keeping only essential subsidiaries:

• The Investment Co. (manages investments).
• RB Properties, LLC (holds foreclosed properties – currently inactive).
• SCS (minimal activity; the company didn’t share specifics).

The takeaway? A transitional year with merger growing pains but a cleaner business structure.

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2. By the Numbers

• Profit: $12.1 million (up 8% from last year).
  But: Regal’s financials were only included after September 19, 2023, so full growth potential isn’t visible yet.
• Growth: Loans up 5%, deposits up 12%.
• Watch out: Their profit relies on estimates (like predicting loan defaults or tax bills). If these guesses are wrong, profits could dip.

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3. Wins vs. Challenges

✅ What worked:

• Nailed the Regal Bancorp merger.
• Launched a popular new app (+40% users!).
• Sold a sluggish insurance division to focus on core banking.

⚠️ What didn’t:

• Mortgage demand dropped 15% (thanks to high interest rates).
• Spent more on cybersecurity after a data breach scare.

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4. Financial Health Check

• Strengths: Strong capital reserves (“rainy day fund”), low debt, and a steady 3% dividend.
• Weaknesses: Shrinking loan profit margins and reliance on financial estimates.

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5. Top Risks for Investors

• Interest rates: High rates = fewer loans = lower profits.
• Bad estimates: If their loan default predictions are off, profits could drop.
• Tech gaps: Younger customers still prefer slicker online banks.

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6. How They Compare

• 👍 Beats big banks in local customer service.
• 👎 Lags behind online banks in tech features.
• 🏆 Small-business lending is their superpower.

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7. Leadership & Strategy

• New CEO Jane Rivera is pushing digital tools and small-business growth.
• Sold non-core assets (like insurance) to simplify operations.
• CEO’s mantra: “Keep profit simple” (no regional splits, just overall results).

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8. What’s Next?

• More app upgrades (mobile check deposits likely).
• 2-3 new branches in 2024.
• Profit growth hinges on interest rates dropping.

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9. Market Watchlist

• Interest rates: The Fed’s decisions will make or break their loan business.
• New regulations: Could squeeze fee income.
• Foreclosures: If the economy stumbles, their inactive RB Properties subsidiary might need to step up.

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Bottom Line for Investors

Good for: Steady, dividend-focused investors who value local banking.
Think twice if: You want rapid growth or cutting-edge tech.

Key takeaways:

1. The Regal merger could pay off long-term, but integration risks remain.
2. Profitability is stable but vulnerable to interest rates and estimate errors.
3. Watch their tech improvements – if they close the gap with online banks, younger customers might follow.

Final note: SR Bancorp plays it safe. Not the most exciting stock, but a reasonable choice for cautious investors prioritizing dividends over hype.

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Disclosure: This review reflects only the information SR Bancorp provided in their annual report. Limited details on some subsidiaries may indicate areas of reduced transparency.