Executive Summary

Q3 2024 returned to profitability: net income $1.37M and $0.16 EPS, versus Q2 2024 loss of $3.03M and Q3 2023 loss of $10.50M; adjusted for $1.0M FV accretion, Q3 adjusted net income was $0.63M .
Net interest margin improved sharply year-over-year to 3.21% (+80 bps) with spread at 2.70% (+58 bps), as asset yields outpaced liability costs .
Balance sheet grew sequentially: loans +$35.9M to $767.7M, deposits +$12.3M to $819.4M; added $20.0M FHLB borrowing to fund growth .
Credit quality remained strong: no charge-offs; non-performing loans $9K; ACL at 0.66% of loans .
Capital deployment catalyst: 9/20/24 authorization to repurchase up to 950,793 shares (~10% of float) .

What Went Well and What Went Wrong

What Went Well

Profitability inflection with cleaner quarter: net income $1.37M ($0.16 EPS); adjusted net income $0.63M excluding $1.0M accretion .
NIM and spread expanded YoY to 3.21% and 2.70% as deposit costs rose slower than asset yields; net interest income +83% YoY to $7.59M .
Credit metrics pristine: zero charge-offs; NPLs $9K; ACL 0.66% of loans; non-performing loans/total gross loans ~0.00% .
Management capital return stance: “We are pleased to have a strong capital position giving us the ability to purchase our common stock.” — CEO William P. Taylor (repurchase authorization) .

What Went Wrong

Funding pressure persists: interest expense +177% YoY to $3.87M; CDs cost 3.99% (+152 bps YoY) with balances up ~$100.9M; interest-bearing DDA cost up to 1.36% (+123 bps YoY) .
Efficiency ratio remains elevated at 81.23% (better YoY from 277.74% but still high for a small bank), indicating more operating leverage work to do .
Earnings quality reliance: $1.0M accretion income boosted GAAP; adjusted net income $0.63M underscoring normalized earnings power still modest .

Financial Results

Quarterly P&L and Margins (oldest → newest)

Metric	Q1 2024	Q2 2024	Q3 2024
Total Interest Income ($USD Millions)	$11.648	$11.389	$11.467
Net Interest Income ($USD Millions)	$8.268	$7.939	$7.594
(Credit) Provision for Credit Losses ($USD Millions)	($0.142)	$0.153	($0.154)
Noninterest Income ($USD Millions)	$0.516	($3.885)	$0.801
Noninterest Expense ($USD Millions)	$7.571	$6.599	$6.819
Net Income ($USD Millions)	$1.063	($3.032)	$1.367
Diluted EPS ($USD)	$0.12	($0.34)	$0.16
Net Interest Margin (%)	3.31%	3.22%	3.21%
Net Interest Rate Spread (%)	2.83%	2.69%	2.70%
Efficiency Ratio (%)	86.19%	162.78%	81.23%

Year-over-Year Comparison (Q3 2023 vs Q3 2024)

Metric	Q3 2023	Q3 2024
Total Interest Income ($USD Millions)	$5.543	$11.467
Net Interest Income ($USD Millions)	$4.145	$7.594
Net Income ($USD Millions)	($10.498)	$1.367
Diluted EPS ($USD)	($10.03)	$0.16
Net Interest Margin (%)	2.41%	3.21%
Net Interest Rate Spread (%)	2.12%	2.70%
Noninterest Expense ($USD Millions)	$12.937	$6.819
(Credit) Provision for Credit Losses ($USD Millions)	$4.162	($0.154)

Balance Sheet and KPIs (quarter-end, oldest → newest)

KPI	Q1 2024	Q2 2024	Q3 2024
Total Assets ($USD Billions)	$1.053	$1.021	$1.053
Net Loans ($USD Millions)	$698.9	$731.9	$767.7
Total Deposits ($USD Millions)	$838.0	$807.1	$819.4
Borrowings ($USD Millions)	$0.0	$0.0	$20.0
Tangible Book Value/Share ($USD)	$17.95	$18.02	$18.17
NPLs / Total Loans (%)	0.03%	0.01%	0.00%
ACL / Total Loans (%)	0.72%	0.71%	0.66%
Total Gross Loans / Total Deposits (%)	84.00%	91.33%	94.31%

Selected Portfolio Moves (Q3 2024)

Item	Q3 2024
Multi-Family loans change (QoQ)	+$25.6M
Residential mortgage loans change (QoQ)	+$11.5M
Securities HTM change (QoQ)	($3.6M)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Earnings impact from securities repositioning (pre-tax)	Forward periods	N/A	~$1.4M per year expected; loss recoup ~3.27 years	Established projection
Stock repurchase authorization	Open-ended (initiated 9/20/24)	None	Up to 950,793 shares (~10% of common)	New authorization
Branch network optimization	9/25/24	N/A	Livingston branch closed due to proximity	Operational change

Note: No formal quantitative revenue/EPS margin guidance ranges were provided in the Q3 2024 materials .

Earnings Call Themes & Trends

Transcript not available in our document set; themes inferred from sequential press releases.

Topic	Previous Mentions (Q1 and Q2)	Current Period (Q3 2024)	Trend
Deposit pricing competition	Q1: stable DDA cost 0.69%, CD rates rising; Q2: IB DDA cost up to 0.94%, CDs ~3.98%; competitive market cited	IB DDA cost 1.36%; CDs 3.99%; deposit balances up; competition persists	Upward cost pressure continues
Accretion income reliance	Q1 accretion $1.4M; Q2 accretion $1.2M	Q3 accretion $1.0M; adjusted NI $0.63M	Declining accretion contribution
Balance sheet repositioning	May: sale of $35.4M AFS, pre-tax loss $4.4M; expected +$1.4M pre-tax/yr	Benefits show via loan redeployment, securities down; NIM/NI supported	Strategy execution ongoing
Branch rationalization	Q1: Summit and Somerville closures	Q3: Livingston closure	Continued footprint optimization
Credit quality	Q1/Q2: no charge-offs; NPLs $220K→$50K; ACL ~0.71–0.72%	Q3: no charge-offs; NPLs $9K; ACL 0.66%	Further improvement

Management Commentary

“We are pleased to have a strong capital position giving us the ability to purchase our common stock.” — William P. Taylor, CEO, on adoption of initial stock repurchase program .
Company reiterated that NIM/spread expansion stemmed from asset yields rising faster than liability costs; deposit rate actions and mix shifts drove expense increases while securities repositioning reduced lower-yield assets .

Q&A Highlights

No Q3 2024 earnings call transcript was found; press releases/8-K did not include Q&A detail .

Estimates Context

Wall Street consensus estimates via S&P Global were unavailable due to a request-limit error at the time of retrieval; therefore, we cannot assess beat/miss versus consensus for Q3 2024 (S&P Global data unavailable).

Key Takeaways for Investors

Sequential and year-over-year earnings recovery with strong credit metrics; normalized (ex-accretion) earnings power remains modest but improving as repositioning benefits accrue .
NIM expansion year-over-year to 3.21% as asset yields repriced; monitor deposit cost trajectory (IB DDA 1.36%, CDs 3.99%) for margin sustainability .
Loan growth concentrated in multi-family and residential mortgages; continued redeployment from securities should support NII and ROA over time .
Capital deployment optionality via repurchase authorization (~10% of shares); TBV/share trending up to $18.17, offering potential support for per-share metrics .
Efficiency ratio improved vs prior year but remains high; expect operating leverage focus via branch rationalization and scale benefits .
With pristine credit (no charge-offs; NPLs near zero), earnings variability will hinge more on funding mix and accretion normalization than on credit costs .
Near-term trading lens: catalysts include continued NIM resilience, loan growth momentum, and tangible execution of repurchase activity; risks center on deposit repricing pressure and fading accretion tailwind .

SR Bancorp, Inc. (SRBK)·Q3 2024 Earnings Summary