Executive Summary

Q1 FY2025 net income was $0.54M ($0.06 EPS), down 49.5% YoY on lower net interest income and tighter spread/margin; efficiency ratio worsened to 91.4% from 86.2% YoY as higher funding costs outpaced earning-asset yields .
Net interest margin compressed to 2.82% (vs 2.88% in Q4 FY2024 and 3.31% in Q1 FY2024) as deposit repricing and competitive funding conditions lifted liability costs; spread fell to 2.25% YoY from 2.83% .
Credit quality remained pristine with zero non-performing loans and no charge-offs; ACL/loans stood at 0.65% and provision was modest ($0.04M) to reflect loan growth .
Capital returns accelerated: initial quarterly cash dividend of $0.05/share (paid April 15, 2025) and another $0.05/share declared for payment July 15, 2025; buybacks totaled ~627K shares ($7.3M) FYTD through March 31, 2025—supporting TBV/share of $18.29 .
Potential stock catalysts: sustained dividend program and continued credit outperformance, offset by NIM/efficiency trajectory pending deposit costs and funding mix normalization .

What Went Well and What Went Wrong

What Went Well
- Credit pristine: no NPLs, no charge-offs; ACL/loans 0.65% with just $0.04M provision despite loan growth .
- Balance sheet growth with funding access: net loans +$48.9M since June 30, 2024; added $30M of FHLB borrowings to fund originations .
- Shareholder returns reinstituted: initiated $0.05 dividend (Apr 15) and maintained another $0.05 (July 15); management emphasized financial strength enabling the dividend: “We are pleased to be in a strong financial position giving us the ability to pay a cash dividend.” – CEO William P. Taylor (Mar 20) and Executive Chairman David Orbach (Jun 20) .
What Went Wrong
- Margin compression: NIM fell to 2.82% (Q1) from 3.31% YoY and 2.88% QoQ; spread fell to 2.25% YoY amid competitive deposit repricing .
- Net interest income declined 13% YoY to $7.18M as deposit costs rose; efficiency ratio deteriorated to 91.41% vs 86.19% YoY .
- Interest expense climbed 27% YoY to $4.30M, driven by higher rates on interest-bearing deposits and higher average balances; demand deposit interest expense +$1.2M YoY as cost of interest-bearing deposits rose to 1.75% from 0.69% .

Financial Results

Quarterly P&L (USD, $ Millions except per-share and %). Periods ordered oldest → newest.

Metric	Q3 FY2024 (Sep 30, 2024)	Q4 FY2024 (Dec 31, 2024)	Q1 FY2025 (Mar 31, 2025)
Interest Income	$11.47	$11.55	$11.48
Interest Expense	$3.87	$4.31	$4.30
Net Interest Income	$7.59	$7.24	$7.18
Provision for Credit Losses	($0.15)	$0.01	$0.04
Noninterest Income	$0.80	$0.63	$0.54
Noninterest Expense	$6.82	$6.51	$7.06
Pre-tax Income	$1.73	$1.35	$0.63
Income Tax Expense	$0.36	$0.32	$0.09
Net Income	$1.37	$1.02	$0.54
Diluted EPS ($)	$0.16	$0.12	$0.06
Net Interest Margin (%)	3.21%	2.88%	2.82%
Net Interest Rate Spread (%)	2.70%	2.27%	2.25%
Efficiency Ratio (%)	81.23%	82.75%	91.41%

YoY and QoQ changes (directional context)

Metric	YoY (Q1 FY2025 vs Q1 FY2024)	QoQ (Q1 FY2025 vs Q4 FY2024)
Net Income	-49.5% to $0.54M	-47% from $1.02M to $0.54M
Diluted EPS	$0.06 vs $0.12	$0.06 vs $0.12
Net Interest Income	$7.18M vs $8.27M	$7.18M vs $7.24M
NIM	2.82% vs 3.31%	2.82% vs 2.88%
Efficiency Ratio	91.41% vs 86.19%	91.41% vs 82.75%

Non-GAAP/Adjusted (company-described accretion/merger effects)

Metric	Q1 FY2025	Q1 FY2024
Reported Net Income ($M)	$0.54	$1.06
Net Accretion Income ($M)	$0.58	$1.40
Merger-related Costs ($M)	—	$0.24
Company-described “Excluding” Net Income ($M)	$0.12 (excl. accretion)	$0.26 (excl. merger costs, net accretion)

Balance Sheet & KPIs

KPI	Q3 FY2024	Q4 FY2024	Q1 FY2025
Total Assets ($B)	$1.053	$1.065	$1.074
Net Loans ($B)	$0.768	$0.776	$0.781
Total Deposits ($B)	$0.819	$0.824	$0.836
Noninterest-bearing Deposits ($B, % of total)	$0.114 (13.9%)	$0.095 (11.5%)	$0.106 (12.7%)
Uninsured Deposits ($B, % of total)	$0.138 (16.8%)	$0.128 (15.6%)	$0.134 (16.0%)
Borrowings ($M)	$20	$30	$30
Tangible Book Value/Share ($)	$18.17	$18.45	$18.29
ACL / Loans (%)	0.66%	0.65%	0.65%
NPLs / Loans (%)	0.00%	0.00%	0.00%

Notes:

Management attributes higher interest expense to raising deposit rates to remain competitive; cost of interest-bearing deposits rose to 1.75% in Q1 FY2025 (from 0.69% YoY) .
Loan growth was funded by deposits and $30M FHLB borrowings .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (revenue/margins/OpEx/tax)	Q2 FY2025 and beyond	None provided	None provided	Maintained (no formal guidance)
Dividend per share	Q1 FY2025	None	$0.05 payable Apr 15, 2025 (record Mar 31, 2025)	Initiated
Dividend per share	Q2 FY2025	$0.05	$0.05 payable Jul 15, 2025 (record Jun 30, 2025)	Maintained
Share repurchases	FY2025 YTD through Mar 31, 2025	Ongoing	627,461 shares for $7.3M (since Jun 30, 2024)	Continued capital return

No quantitative earnings guidance was issued in the Q1 FY2025 materials .

Earnings Call Themes & Trends

No Q1 FY2025 earnings call transcript was found in the document set (no earnings-call-transcript returned in the catalog) . Themes below are based on company press releases.

Topic	Prior Mentions (Q3 FY2024, Q4 FY2024)	Current Period (Q1 FY2025)	Trend
Deposit pricing and competition	Raised rates on interest-bearing deposits; cost on CDs rose with competitive market; demand deposit costs up; IBD cost to 1.36–1.75% in Q3/Q4	Cost on interest-bearing deposits 1.75%; demand deposit interest expense +$1.2M YoY as balances/costs rose	Continued pressure on funding costs
Balance sheet repositioning	Sold $35.4M lower-yielding securities in FY2024 Q4 to reposition; reduced securities balances	Lower average securities balances and lower securities income persisted; slight yield uptick from mix	Carryover impact; mix shift to loans
Loan growth & funding mix	Net loans +$35.9M (Q3); FHLB $20M added	Net loans +$48.9M since Jun-24; FHLB $30M outstanding	Growth continues; wholesale funding usage elevated
Credit quality	NPLs ~0%, no charge-offs; ACL ~0.65–0.66%	NPLs 0%, no charge-offs; ACL 0.65%	Stable/pristine
Expense discipline	Material YoY declines in salaries/data processing post-merger one-offs (Q3/Q4)	Noninterest expense down YoY; lower data processing/occupancy offset by higher professional fees	Mixed; efficiency worsened on lower NII
Capital return	No dividend in Q3; buybacks ongoing	Initiated $0.05 dividend (Apr), maintained in June; TBV/share $18.29	Positive shareholder return momentum

Management Commentary

“We are pleased to be in a strong financial position giving us the ability to pay a cash dividend.” – William P. Taylor, CEO, on initiating the quarterly dividend (Mar 20, 2025) .
“We are pleased to be in a strong financial position giving us the ability to pay a cash dividend.” – David Orbach, Executive Chairman, on declaring the subsequent dividend (Jun 20, 2025) .
Management narrative highlights deposit rate actions to remain competitive, with higher costs across interest-bearing deposits driving interest expense; FHLB borrowings provided liquidity for loan growth .

Q&A Highlights

No Q1 FY2025 earnings call transcript or Q&A was available in the document catalog; therefore, no Q&A themes or guidance clarifications to report .

Estimates Context

We attempted to retrieve Wall Street consensus estimates (EPS, revenue) from S&P Global for the last three quarters; the request failed due to a daily request limit being exceeded. As a result, we cannot include a vs-consensus comparison for Q1 FY2025 at this time [Values retrieved from S&P Global unavailable due to access limits].
Given the lack of estimates data, post-quarter estimate revisions are not assessed. If consensus becomes available, key focal points for revisions would be NIM trajectory, funding costs, and efficiency ratio.

Key Takeaways for Investors

Margin pressure remains the central debate: NIM declined to 2.82% and efficiency ratio rose to 91.4%, reflecting liability cost pressures outpacing asset yields; watch deposit betas and remix of funding .
Credit quality provides downside protection: 0% NPLs, no charge-offs, and ACL/loans at 0.65% underpin limited credit losses in a still-uncertain macro backdrop .
Balance sheet growth is intact, funded with deposits and FHLB borrowings; trajectory suggests continued loan expansion but with higher funding costs unless deposit mix improves .
Capital return is now part of the story: dividend initiated and maintained; buybacks ongoing, with TBV/share resilient at $18.29—supporting valuation under a normalized ROE path .
Near-term trading setup hinges on signs of funding cost stabilization and any recovery in NIM; any incremental deposit mix shifts (toward noninterest-bearing) could be a positive catalyst .
Medium-term thesis: Execution on cost control and operating leverage—while maintaining pristine credit—can support steady EPS and dividend capacity as merger-related noise fades .
Monitor disclosures for further balance sheet repositioning and the pace of repurchase activity as capital deployment levers in lieu of outsized loan growth .

Citations:

Q1 FY2025 results press release (three months ended March 31, 2025):
Q4 FY2024 results press release (three months ended December 31, 2024):
Q3 FY2024 results press release (three months ended September 30, 2024):
Dividend announcements: initial dividend (Mar 20, 2025) ; subsequent dividend (Jun 20, 2025)

Document availability notes:

No Item 2.02 8-K or earnings call transcript for Q1 FY2025 was found in the catalog during the covered period; analysis is based on the company’s quarterly financial results press release and related press releases .

SR Bancorp, Inc. (SRBK)·Q1 2025 Earnings Summary