SR Bancorp is a Bound Brook holding company whose latest fiscal year finally shows core profit rising even as the reported line falls. The September conversion that created the public company, and the same-day cash purchase of Regal Bank, left Somerset Regal Bank with more equity than a fourteen-branch New Jersey franchise currently turns into a respectable return. For the year ended June 30, 2026 the bank earned more after stripping purchase-accounting accretion and a prior-year life-insurance death benefit. Reported profit was $3.4 million for the year. That figure still declined because those two items were large last year and almost gone this year.
The operating engine underneath that mix shift is a loan book that grew at a double-digit pace while the net interest margin sat just above three percent. Share repurchases retired nearly one million shares at a cost of $16 million. Management answered the excess-capital problem the way converted thrifts usually do: a third repurchase authorization in May and a twenty percent lift in the quarterly dividend in June. Those actions shrink the share count and advertise confidence. They do not, by themselves, fix an efficiency ratio that still consumes more than four fifths of revenue.
The market prices the stock near tangible book and at a high multiple of trailing earnings, which is another way of saying investors are paying for capital, not for the current return on that capital. The debate is whether buybacks and a slightly wider margin can lift return on equity enough to justify a higher multiple before a single real-estate credit spoils a book that still shows no nonperforming loans. The next several quarters resolve that question through the margin, the expense ratio, and the pace of the third repurchase program.