Company Overview
SR Bancorp, Inc. operates as the holding company for Somerset Regal Bank, which delivers retail and commercial banking services to individuals, businesses, and local municipalities within Essex, Hunterdon, Middlesex, Morris, Somerset, and Union counties in New Jersey. The company functions within the Financial Services sector, specifically the Banks - Regional industry, positioning it as a community-focused institution rather than a large national bank. As of the latest data, the company holds a market capitalization of $133.97M, generates annual revenue of $31.75M, and employs 119 individuals. These valuation and operational metrics indicate that SRBK is a mid-sized regional entity with a relatively small footprint compared to major national banks, reflecting its localized service area and limited scale.
Financial Health
The company reports a trailing twelve-month revenue of $31.75M and a net income of $4.28M, while EBITDA is not available for this specific reporting period. The gap between the reported revenue and net income reveals a cost structure where operating expenses, including cost of goods sold and administrative costs, consume 92.5% of total revenue, which is typical for banking institutions where gross margins are often negligible. Free cash flow is not reported, suggesting that cash generation is either fully utilized for operations or that the company does not report non-GAAP cash flow metrics in a way that distinguishes them from net income in this dataset. The company maintains a cash balance of $81.84M against total debt of $52.78M, indicating a conservative balance sheet posture where liquid assets exceed total liabilities. While the debt-to-equity ratio is not available, the absolute comparison of cash to debt suggests the firm is not highly leveraged and retains significant liquidity for operational needs. The current ratio is not available, so liquidity regarding short-term obligations cannot be quantified via this specific metric. Return on Equity stands at 2.2% and Return on Assets is 0.4%, metrics that reveal management effectiveness in generating returns relative to the capital invested and total assets held, respectively.
Valuation Assessment
The trailing twelve-month P/E ratio is 31.54, while the forward P/E is 20.77, implying that the market expects earnings growth that would bridge this significant valuation gap over the coming year. The price-to-book ratio is 0.69, indicating that the market values the company at a discount to its tangible book value, which often suggests a conservative valuation or concerns regarding asset quality. Alternative valuation metrics include a price-to-sales ratio of 4.22 and an EV/EBITDA that is not available, suggesting that revenue multiples are the primary tool for comparing this bank against peers. The stock has traded between a 52-week low of $11.38 and a 52-week high of $18.04, providing a range within which the current trading price must be evaluated relative to historical volatility. The beta is 0.55, meaning the stock price exhibits lower volatility than the broader market, moving roughly 45% less than the market average during periods of price fluctuation.
Growth & Income
Revenue growth year-over-year is 6.0%, whereas earnings growth year-over-year is -7.5%, indicating that earnings are declining at a faster rate than revenue, which may signal rising operational costs or compression in net interest margins. The company offers a dividend yield of 1.2% with a payout ratio of 37.0%, a level that appears sustainable given the current earnings trajectory and the conservative nature of regional banking payouts. Since the earnings growth rate is negative, the payout ratio must be scrutinized to ensure dividends are not being funded by cash reserves rather than organic earnings growth. The overall growth and income profile presents a scenario of modest revenue expansion offset by declining profitability, supported by a stable but low-yield dividend strategy.