SR Bancorp (SRBK) Q3 2024 earnings summary

Executive summary

• Net income of $1.4 million for Q3 2024, reversing a $10.5 million loss in Q3 2023, with EPS of $0.16 per share, driven by higher net interest income and lower noninterest expense after merger-related charges.

• Excluding $1.0 million net accretion income, adjusted net income was $627,000 for Q3 2024.

• Total assets increased 3.1% to $1.05 billion at September 30, 2024, mainly from new loan originations and higher deposits.

• Deposits rose 1.5% to $819.4 million, and borrowings increased to $20.0 million to support loan growth.

• Completed branch closure in Livingston, NJ, and continued integration post-merger.

Financial highlights

• Net interest income grew 83.2% year-over-year to $7.6 million, with net interest margin up to 3.21% from 2.41%.

• Interest income rose 106.9% to $11.5 million, mainly from a larger and higher-yielding loan portfolio.

• Noninterest income increased 56.1% to $801,000, led by higher service charges and bank-owned life insurance income.

• Noninterest expense fell 47.3% to $6.8 million, reflecting the absence of prior year’s $5.4 million charitable contribution, $3.9 million merger costs, and reduced salaries.

• Allowance for credit losses was 0.66% of total loans, with a $154,000 recovery in Q3 2024 versus a $4.2 million provision in Q3 2023.

Outlook and guidance

• Management expects continued focus on commercial loan growth and maintaining strong capital and liquidity positions.

• The company believes it has sufficient liquidity and capital to meet short- and long-term needs, with no material changes in risk factors since the last annual report.

• Forward-looking statements are subject to risks including integration of acquired operations, interest rate changes, and economic conditions.