Executive Summary

Q2 2025 (quarter ended June 30, 2025) was profitable with corrected net income of $2.21M and diluted EPS of $0.27 driven by $1.49M life insurance proceeds; underlying core earnings remained modest as net interest margin compressed and funding costs rose .
Net interest margin fell 32 bps YoY to 2.90% and spread fell 36 bps as deposit costs and new FHLB borrowings outpaced asset yield, partially offset by loan growth; efficiency ratio improved sharply to 71.9% on higher noninterest income and cost control .
Balance sheet growth continued: net loans +8.9% YoY to $797.2M and deposits +4.8% YoY to $846.0M; nonperforming loans were 0.00% and ACL/loans was 0.67% at quarter-end, underscoring pristine credit .
Capital return became a clearer catalyst: the Board declared $0.05/share dividends (initiated in March and paid again in July) and authorized a second repurchase program up to 10% of shares in July, supporting TBV/share ($18.83) and TCE/TA (15.8%) .

What Went Well and What Went Wrong

What Went Well
- Noninterest income rebounded to $2.03M from a $(3.89)M loss YoY, powered by $1.49M gains from life insurance proceeds and the absence of prior-year securities losses; efficiency ratio improved to 71.9% from 162.8% YoY .
- Loan and deposit growth remained healthy YoY (+8.9% and +4.8%, respectively), with uninsured deposits at a manageable 17.2% and noninterest-bearing deposits at 13.5% of total .
- Shareholder returns advanced: Company initiated and continued a $0.05 quarterly dividend and adopted a second 10% repurchase authorization; “We are pleased to be in a strong financial position giving us the ability to pay a cash dividend.” — CEO/Executive Chairman .
What Went Wrong
- Core spread and NIM remained under pressure as interest-bearing deposit costs rose 88 bps YoY and borrowings increased ($30M FHLB), reducing net interest income YoY despite loan growth .
- Net interest income declined to $7.45M from $7.94M YoY, with net interest-earning assets slightly lower; cost of liabilities rose faster than asset yields amid competitive pricing .
- Reported quarterly earnings benefited from nonrecurring items (life insurance proceeds, FV accretion); adjusted net income was $0.41M, highlighting still-subdued core profitability .

Financial Results

Quarterly comparisons (oldest → newest)

Metric	Q4 2024 (Dec 31, 2024)	Q1 2025 (Mar 31, 2025)	Q2 2025 (Jun 30, 2025, corrected)
Total interest income ($M)	$11.545	$11.483	$11.708
Net interest income ($M)	$7.239	$7.184	$7.452
Provision for credit losses ($M)	$0.012	$0.038	$0.238
Noninterest income ($M)	$0.627	$0.542	$2.028
Noninterest expense ($M)	$6.509	$7.062	$6.815
Net income ($M)	$1.021	$0.537	$2.212
Diluted EPS ($)	$0.12	$0.06	$0.27
Net interest margin (%)	2.88%	2.82%	2.90%
Net interest rate spread (%)	2.27%	2.25%	2.33%
Efficiency ratio (%)	82.75%	91.41%	71.89%
Adjusted net income ($M)	N/A	N/A	$0.412

YoY markers for the June quarter:

Q2 2025 vs Q2 2024: Net income $2.212M vs $(3.032)M; NIM 2.90% vs 3.22%; noninterest income $2.028M vs $(3.885)M (prior year had $4.446M securities loss) .

KPIs and balance sheet (period-end)

KPI	Q4 2024 (Dec 31, 2024)	Q1 2025 (Mar 31, 2025)	Q2 2025 (Jun 30, 2025, corrected)
Net loans ($M)	$775.8	$780.8	$797.2
Total deposits ($M)	$824.1	$835.6	$846.0
Borrowings ($M)	$30.0	$30.0	$30.0
Noninterest-bearing deposits (% of total)	11.5%	12.7%	13.5%
Uninsured deposits (% of total)	15.6%	16.0%	17.2%
ACL / loans (%)	0.65%	0.65%	0.67%
NPLs / loans (%)	0.00%	0.00%	0.00%
Tangible BV/share ($)	$18.45	$18.29	$18.83
TCE / TA (%)	16.46%	16.05%	15.80%
Equity ($M)	$198.1	$195.1	$193.8

Notes:

SRBK issued a corrected release on Sept 12 updating Q2 2025 results to include $1.49M life insurance gains and a $0.157M incremental provision; the corrected figures above supersede the July 31 release .

Guidance Changes

SRBK does not provide formal revenue/EPS/expense guidance in the releases reviewed. Capital return actions and dividends are summarized below.

Metric	Period	Previous Guidance	Current Guidance/Action	Change
Quarterly dividend	Payable Jul 15, 2025	$0.05 initiated (paid Apr 15, 2025)	$0.05 declared Jun 20, 2025	Maintained
Share repurchase authorization	Announced Jul 8, 2025	First program nearing completion (13,802 shares remaining)	Second program up to 10% of outstanding shares (886,137)	Raised capacity

Earnings Call Themes & Trends

No Q2 2025 call transcript found. Key themes inferred from quarterly materials.

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Net interest margin/spread	NIM 2.88%; spread 2.27%; pressure from higher deposit costs	NIM 2.82%; spread 2.25%; continued pressure	NIM 2.90%; spread 2.33%; modest sequential uptick but still below YoY	Stabilizing QoQ; pressured YoY
Deposit pricing/competition	Demand deposit cost up; CDs repricing higher	Demand deposit cost +106 bps YoY; CDs +18 bps	Demand deposit cost +88 bps YoY; continued competitive pricing	Still pressured
Loan growth/mix	Loans +$43.9M since Jun 30; CRE mix rising	Loans +$48.9M since Jun 30	Loans +$65.3M YoY; residential +$32.6M, multi-family +$40.0M	Positive
Liquidity/funding	Initiated $30M FHLB borrowing	$30M FHLB remained outstanding	$30M FHLB outstanding	Neutral
Credit quality	NPLs 0.00%; ACL/loans 0.65%	NPLs 0.00%; ACL/loans 0.65%	NPLs 0.00%; ACL/loans 0.67%	Strong/stable
Capital return	—	Dividend initiated $0.05 (announced Mar 20)	Second repurchase program; dividend maintained	Increasing

Management Commentary

Strategy/tone: Management emphasized balance sheet repositioning benefits (runoff/sale of lower-yield securities, redeployment into loans), steady loan growth, and disciplined cost control amid rate headwinds; the corrected release highlighted nonrecurring life insurance gains in Q2 2025 .
Capital return focus: “We are pleased to be in a strong financial position giving us the ability to pay a cash dividend.” — William P. Taylor, CEO (Mar 20) and Executive Chairman (Jun 20) .
Credit/ALM: Allowance methodology updated to reflect merged banks’ historical loss factors; despite loan growth and model update, ACL/loans held at 0.67% with no charge-offs or NPLs at quarter end .

Q&A Highlights

No Q2 2025 earnings call transcript was found; no Q&A highlights or guidance clarifications available in our source set [List search returned none for earnings-call-transcript in period].

Estimates Context

S&P Global (Capital IQ) consensus for Q2 2025 EPS and revenue was unavailable at the time of this analysis (tool returned an access/limit error). As a result, we cannot quantify beats/misses vs consensus for this quarter. We attempted to pull “Primary EPS Consensus Mean” and “Revenue Consensus Mean” for the latest reported quarter but did not receive data.

Key Takeaways for Investors

Core profitability still constrained by deposit repricing and higher funding costs despite solid loan growth; watch for further NIM stabilization as deposit betas normalize .
Reported Q2 EPS benefited from nonrecurring life insurance gains and fair value accretion; adjusted net income of ~$0.41M better reflects underlying run-rate .
Credit quality remains a differentiator (NPLs 0.00%, no charge-offs), allowing management to pursue growth and capital return without credit drag .
Capital return is accelerating (second 10% buyback; $0.05 quarterly dividend), which can support TBV/share and provide downside protection if shares trade below TBV .
Funding mix improvements (higher noninterest-bearing deposit share, though still modest) and controlled expense trajectory (improving efficiency ratio) are the levers to monitor for operating leverage .
Balance sheet growth is being partly funded via FHLB borrowings; pace of loan growth versus deposit growth and cost of funds will drive forward NIM outcomes .
Near-term trading set-up: clean credit and capital returns are supportive; the swing factor is margin trajectory—any evidence of deposit cost inflection or further balance sheet remix could catalyze re-rating.

Appendix: Additional Q2 2025 Items and Prior Quarters

Correction notice: On Sept 12, SRBK revised Q2 2025 to include $1.49M gains from life insurance proceeds and a $0.157M higher provision; net income increased to $2.21M (diluted EPS $0.27) from $0.10 previously; efficiency ratio improved to 71.9% .
Prior quarters for trend: Q4 2024 net income $1.02M; Q1 2025 net income $0.54M; Q2 2025 net income $2.21M (corrected). NIM: 2.88% → 2.82% → 2.90% .
Dividend and buyback cadence: Dividend initiated March ($0.05), maintained June; second 10% repurchase program announced July .

SR Bancorp, Inc. (SRBK)·Q2 2025 Earnings Summary