8-K: SR Bancorp Reports Q1 2026 Results, Shareholder Votes

SR Bancorp announced its Q1 2026 financial results, including asset and loan growth, alongside the re-election of directors and ratification of its independent auditor at its annual meeting.

Summary

• The Annual Meeting of Stockholders of SR Bancorp, Inc. was held on November 19, 2025.
• Robert Mustard was elected as a director for a one-year term.
• Marc Lebovitz, Douglas M. Sonier, and William P. Taylor were elected as directors for three-year terms.
• The appointment of Baker Tilly US, LLP as the independent registered public accounting firm for the fiscal year ending June 30, 2026, was ratified by stockholders.
• Total assets grew to $1,110.1 million in Q1 2026 (ended September 30, 2025), up from $1,084.4 million in FY 2025.
• Net loans increased to $826.4 million in Q1 2026 from $797.2 million in FY 2025.
• Deposits reached $869.6 million in Q1 2026, up from $846.0 million in FY 2025.
• GAAP Net Income for Q1 2026 was $693,000, with Core Net Income at $475,000.
• The company completed an initial stock repurchase program on August 4, 2025, at an average price of $12.09 per share.
• An additional repurchase program for 886,137 shares (approximately 10% of outstanding shares) was approved on July 8, 2025, with 198,310 shares repurchased at an average price of $14.71 during Q1 2026.
• The company's stock (SRBK) has significantly underperformed major indices since its IPO on September 20, 2023, with a -51.5% return compared to S&P 500's +53.0% as of November 14, 2025.

Sentiment

Score: 3

Explanation: While the company shows strong asset quality and growth in assets, loans, and deposits, the significant decline in net income and return on assets for the most recent quarter (Q1 2026) compared to the previous fiscal year is a negative indicator. Furthermore, the substantial underperformance of the stock price relative to market and banking indices since its IPO raises serious concerns about investor confidence and future prospects.

Positives

• Consistent asset and loan growth, with total assets reaching $1.11 billion and net loans $826.4 million in Q1 2026.
• Strong asset quality with Non-Performing Assets at $0 for FY 2025 and Q1 2026, and NPLs / Gross Loans at 0.00% for the same periods.
• Net Interest Margin increased to 3.19% in Q1 2026 from 3.05% in FY 2025.
• Successful completion of an initial stock repurchase program and approval of a new one, demonstrating commitment to shareholder value.
• Cost of Deposits decreased to 1.63% in Q1 2026 from 2.15% in FY 2025.
• No exposure to New York City commercial real estate.

Negatives

• GAAP Net Income for Q1 2026 was $693,000, and Core Net Income was $475,000, which is significantly lower than FY 2025 figures ($5,136,000 GAAP; $3,106,000 Core).
• GAAP ROAA for Q1 2026 was 0.06%, and Core ROAA was 0.04%, significantly lower than FY 2025 (0.49% GAAP; 0.29% Core).
• The company's stock (SRBK) has experienced a significant decline of 51.5% since its IPO on September 20, 2023, severely underperforming the S&P 500 (+53.0%), Nasdaq Bank (+40.9%), and KBW Nasdaq Regional Bank (+32.5%) as of November 14, 2025.
• Noninterest Expense / Avg Assets slightly increased to 2.60% in Q1 2026 from 2.56% in FY 2025.
• Tier 1 Capital to average total assets and Tangible Equity to Tangible Assets have shown a slight downward trend from FY 2024 to Q1 2026.

Risks

• Increased competitive pressures.
• Changes in the interest rate environment.
• Inflation and general economic conditions, including potential recessionary conditions.
• Impact of any federal government shutdown.
• Fluctuations in real estate market values in the Bank's lending area.
• Changes in the quality of loan and security portfolios, including increases in non-performing and classified loans.
• Economic assumptions or changes in methodology that may impact the allowance for credit losses calculation.
• Changes in liquidity, including the size and composition of the deposit portfolio and the percentage of uninsured deposits, and the availability of low-cost funding.
• Monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System.
• Imposition of tariffs or other domestic or international governmental policies and retaliatory responses.
• Failure in or breach of the Company's operational or security systems or infrastructure, including cyber attacks.
• Failure to maintain current technologies.
• Failure to retain or attract employees.
• Legislative, accounting, and regulatory changes that could adversely affect the business.

Future Outlook

The company's forward-looking statements indicate that future plans, strategies, and expectations are subject to significant business, economic, and competitive uncertainties, including changes in interest rates, inflation, general economic conditions, real estate market values, and regulatory changes. The company does not undertake to publicly release revisions to any forward-looking statements unless required by law.

Management Comments

• Assets grew since the merger with Regal Bank in September 2023.
• Strong loan growth fueled 1st quarter 2026 asset growth.
• 2.70% of our commercial loans are office. We have no NYC exposure!

Industry Context

SR Bancorp operates as a New Jersey chartered commercial bank with 14 branches in northern and central New Jersey. The regional banking sector faces ongoing challenges from interest rate fluctuations, competitive pressures, and economic uncertainties, including potential recessionary conditions. While SR Bancorp demonstrates strong asset quality and loan growth, its significant stock underperformance compared to broader market and banking indices suggests it is currently struggling to capture investor confidence within the prevailing industry landscape.

Comparison to Industry Standards

• SR Bancorp's stock performance since its IPO on September 20, 2023, shows a decline of 51.5% as of November 14, 2025. This significantly underperforms the S&P 500 (+53.0%), Nasdaq Bank (+40.9%), and KBW Nasdaq Regional Bank Index (+32.5%) over the same period, indicating a substantial disconnect between the company's internal growth metrics and its market valuation relative to peers and the broader market.
• The company's asset quality, with Non-Performing Assets at $0 and NPLs/Gross Loans at 0.00% for FY 2025 and Q1 2026, appears to be exceptionally strong, potentially outperforming many regional banks that may carry some level of non-performing assets.
• The company's explicit statement of 'no NYC exposure' for commercial real estate loans positions it favorably compared to some larger regional banks that have faced concerns regarding their exposure to potentially troubled urban commercial real estate markets.

Corporate Governance

Stakeholder Impact

• Shareholders are directly impacted by the stock repurchase programs, which aim to enhance shareholder value by reducing outstanding shares. However, the significant stock price underperformance since IPO indicates negative sentiment. The election of directors and ratification of auditors provide governance stability.
• Employees are not directly impacted by this filing, but the risk section mentions 'failure to retain or attract employees' as a potential challenge.
• Customers are not directly impacted by this filing, but the bank's operations in New Jersey communities and focus on loan and deposit growth suggest continued service.
• Creditors benefit from the bank's strong asset quality (zero non-performing assets) and capital ratios (Tier 1 Capital at 15.5%), which suggest a stable financial position.

Next Steps

• Continue to operate 14 full-service branch locations in northern and central New Jersey.
• Execute the approved additional stock repurchase program for 886,137 shares.
• Baker Tilly US, LLP will serve as the independent registered public accounting firm for the fiscal year ending June 30, 2026.

Key Dates

Recommendation

While SR Bancorp exhibits strong asset quality, consistent loan and deposit growth, and an increasing net interest margin, the significant decline in Q1 2026 profitability metrics (GAAP and Core Net Income, ROAA) compared to the previous fiscal year is a concern. The stock's severe underperformance since its IPO, despite share repurchase programs, indicates a lack of investor confidence. The company's strong balance sheet and commitment to shareholder returns through buybacks provide some support, but the recent dip in earnings and persistent market underperformance suggest a 'hold' position until there is clearer evidence of sustained profitability improvement and a reversal in market sentiment.

Keywords

SR Bancorp, SRBK, Banking, Financial Services, Regional Bank, New Jersey, SEC Filing, 8-K, Annual Meeting, Director Election, Auditor Ratification, Financial Results, Q1 2026, Loan Growth, Deposit Growth, Asset Quality, Net Interest Margin, Stock Repurchase, Shareholder Value, Corporate Governance