BOUND
BROOK, N.J., May 23, 2024
/PRNewswire/ -- SR BANCORP, INC. (the "Company") (NASDAQ: SRBK),
the holding company for Somerset Regal Bank (the "Bank"), announced
the completion of a balance sheet repositioning strategy related to
its investment securities portfolio.
The Company sold $35.4 million in
book value of its lower-yielding investment securities for a
pre-tax realized loss of approximately $4.4
million. These securities represented the vast majority of
the Bank's available-for-sale portfolio. The Bank anticipates that
the $30.9 million of proceeds from
the sale of these securities will be redeployed into approximately
the same amount of residential and commercial real estate
mortgages. Assuming such loans are originated consistent with the
rates existing on the Bank's current loan pipeline, it is
anticipated that the loans will have a positive spread differential
of approximately 465 basis points over the securities that were
sold, which is expected to result in $1.4
million in additional pre-tax earnings, on an annualized
basis. Under those assumptions, the Company estimates that the loss
on the sale of securities will be recouped within approximately
3.27 years.
The loss on the sale of securities had a minimal impact on
shareholders' equity and the Company's book value per share.
Somerset Regal Bank's capital levels remain well in excess of those
required to be categorized as well-capitalized following the sale
of securities. This repositioning is projected to be accretive to
earnings, net interest margin and return on assets in future
periods.
About Somerset Regal Bank
SR Bancorp, Inc. is the holding company for Somerset Regal Bank.
Somerset Regal Bank is a full-service New
Jersey commercial bank headquartered in Bound Brook, New Jersey that operates 15
branches in Essex, Hunterdon,
Middlesex, Morris, Somerset and Union Counties, New
Jersey. At March 31, 2024,
Somerset Regal Bank had $1.05 billion
in total assets, $698.9 million in
net loans, $838.0 million in deposits
and total equity of $199.3 million.
Additional information about Somerset Regal Bank is available on
its website, www.somersetregalbank.com.
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, potential
recessionary conditions, 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 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 U.S. Government
including policies of the U.S. Treasury and the Board of Governors
of the Federal Reserve System, a failure in or breach of the
Company's operational or security systems or infrastructure,
including cyber attacks, the failure to maintain current
technologies, failure to retain or attract employees and
legislative, accounting and regulatory changes that could adversely
affect the business in which the Company and the Bank are engaged.
Our actual future results may be materially different from the
results indicated by these forward-looking statements. Except as
required by applicable law or regulation, we do not undertake, and
we specifically disclaim any obligation, to release publicly the
results of any revisions that may be made to any forward-looking
statement.
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SOURCE SR Bancorp, Inc.