As filed with the United States Securities and Exchange Commission on March 13, 2023

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

SR Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Maryland	6036	92-2601722
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

220 West Union Avenue

Bound Brook, New Jersey 08805

(732) 560-1700

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

William P. Taylor

Chairman and Chief Executive Officer

220 West Union Avenue

Bound Brook, New Jersey 08805

(732) 560-1700

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

John J. Gorman, Esq. Marc P. Levy, Esq. Luse Gorman, PC 5335 Wisconsin Avenue, N.W., Suite 780 Washington, D.C. 20015 (202) 274-2000 Edward G. Olifer, Esq. Stephen F. Donahoe, Esq. Kilpatrick Townsend & Stockton LLP 607 14^th Street Suite 900 Washington, DC 20005

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  ☒

If this Form is filed to register additional shares for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.  ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Prospectus Supplement

Interests in

SOMERSET SAVINGS BANK, SLA 401(k) SAVINGS AND INVESTMENT PLAN

Offering of Participation Interests of up to 1,146,810 Shares of

SR BANCORP, INC.

Common Stock

In connection with the mutual to stock conversion of Somerset Savings Bank, SLA, a New Jersey-chartered mutual savings association (the “Somerset Savings”), SR Bancorp, Inc., a newly-formed Maryland corporation and the to be holding company of the Bank, is offering shares of its common stock for sale at $10.00 per share. Following the offering, it is expected that shares of SR Bancorp, Inc. common stock will be listed on the Nasdaq Capital Markets under the symbol “SRBK.”

In connection with the stock offering, Somerset Savings is allowing participants in the Somerset Savings Bank, SLA Savings and Investment Plan (the “401(k) Plan”) to invest a portion of their account balances in SR Bancorp common stock. This prospectus supplement relates to the election of 401(k) Plan participants to direct the trustees of the 401(k) Plan to invest up to 50% of their account balance in the 401(k) Plan in SR Bancorp, Inc. Common Stock at the time of the stock offering. Based upon the value of the 401(k) Plan assets at December 31, 2022, the trustees of the 401(k) Plan could purchase up to 1,146,810 shares of SR Bancorp common stock on behalf of participants, at the purchase price of $10.00 per share, in the stock offering.

Before you consider investing, you should read the prospectus of SR Bancorp, dated May ___, 2023, which is attached to this prospectus supplement. It contains detailed information regarding the conversion, the stock offering of SR Bancorp and the financial condition, results of operations and business of Somerset Savings. This prospectus supplement provides information regarding the 401(k) Plan. You should read this prospectus supplement together with the prospectus and keep both for future reference.

For a discussion of risks that you should consider, see “Risk Factors” beginning on page 19 of the attached prospectus, and “Notice of Your Rights Concerning Employer Securities” in this prospectus supplement.

The interests in the Plan and the offering of shares of SR Bancorp common stock have not been approved or disapproved by the Federal Deposit Insurance Corporation, the New Jersey Department of Banking and Insurance, the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission or any other federal or state agency. Any representation to the contrary is a criminal offense.

The securities offered by this prospectus supplement are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

This prospectus supplement may be used only in connection with offers and sales by SR Bancorp in the stock offering of SR Bancorp common stock that may be acquired within the 401(k) Plan. No one may use this prospectus supplement to reoffer or resell interests in shares of SR Bancorp common stock acquired through the 401(k) Plan.

You should rely only on the information contained in this prospectus supplement and the attached prospectus. SR Bancorp, Somerset Savings and the 401(k) Plan have not authorized anyone to provide you with different information.

This prospectus supplement does not constitute an offer to sell or solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make an offer or solicitation in that jurisdiction. Neither the delivery of this prospectus supplement and the attached prospectus nor any sale of SR Bancorp common stock shall under any circumstances imply that there has been no change in the affairs of SR Bancorp, Somerset Savings or the 401(k) Plan since the date of this prospectus supplement, or that the information contained in this prospectus supplement or incorporated by reference is correct as of any time after the date of this prospectus supplement.

The date of this prospectus supplement is [date].

TABLE OF CONTENTS

THE OFFERING	1
Securities Offered	1
Election to Purchase SR Bancorp, Inc. Common Stock	1
Purchase Priorities	2
Purchases in the Offering and Oversubscriptions	3
Composition of the SR Bancorp, Inc. Stock Fund	3
Minimum and Maximum Investment	3
Value of the Plan Assets	4
How to Order Stock in the Offering	4
Order Deadline	5
Irrevocability of Transfer Direction	5
Future Direction to Purchase and Sell Common Stock	6
Voting Rights of Common Stock	6
DESCRIPTION OF THE 401(k) PLAN	7
Introduction	7
Eligibility and Participation	7
Contributions under the Plan	7
Limitations on Contributions	8
Benefits under the Plan	8
Investment of Contributions and Account Balances	8
Performance History	9
Description of the Investment Funds	9
SR Bancorp, Inc. Stock Fund	11
Withdrawals from the Plan	11
Administration of the Plan	12
Amendment and Termination	12
Merger, Consolidation or Transfer	12
Federal Income Tax Consequences	12
Notice of Your Rights Concerning Employer Securities	13
Additional ERISA Considerations	14
Securities and Exchange Commission Reporting and Short-Swing Profit Liability	14
Financial Information Regarding Plan Assets	15
LEGAL OPINION	15

THE OFFERING
Securities Offered	Somerset Savings Bank, SLA is offering participants in the 401(k) Plan the opportunity to purchase participation interests in shares of SR Bancorp, Inc. common stock through the 401(k) Plan. A “participation interest” represents your indirect ownership of a share of SR Bancorp, Inc. common stock that is acquired by the 401(k) Plan and is equivalent to one share of SR Bancorp common stock. In this prospectus supplement, “participation interests” are referred to as shares of  SR Bancorp common stock. At the stock offering purchase price of  $10.00 per share and allowing participants to use up to 50% of their account balances, the 401(k) Plan may acquire up to 1,146,810 shares of SR Bancorp, Inc. common stock in the stock offering, based on the approximate fair market value of the 401(k) Plan’s assets as of December 31, 2022. Only employees of Somerset Savings may become participants in the 401(k) Plan and only participants may purchase shares of SR Bancorp common stock through the 401(k) Plan. However, your investment in shares of SR Bancorp common stock in connection with the stock offering is subject to the purchase priorities listed below. Information regarding to the 401(k) Plan is contained in this prospectus supplement and information with respect to the financial condition, results of operations and business of SR Bancorp and the Somerset Savings is contained in the accompanying prospectus. The address of the corporate/main office of SR Bancorp and Somerset Savings is 220 West Union Avenue, Bound Brook, New Jersey 08805 and the telephone number at this address is (732) 560-1700. Address questions about this prospectus supplement to Dana DePace, VP, Human Resources Manager, Somerset Savings Bank, SLA, 220 West Union Avenue, Bound Brook, New Jersey 08805; telephone number (732) 893-1770; email:d_depace@somersetsavings.com. Direct all questions about the stock offering, the prospectus, or obtaining a stock order form to purchase stock in the offering outside the 401(k) Plan to the Stock Information Center at [telephone #] (toll-free), Monday through Friday, [10:00 a.m. through 5:00 p.m.], Eastern time. The Stock Information Center will be closed on bank holidays.
Election to Purchase SR Bancorp, Inc. Common Stock	In connection with the stock offering, you may elect to designate a portion (up to 50%) of your 401(k) account balance to a money market fund called “Stock Purchase,” which will be used to subscribe for SR Bancorp common stock in the stock offering. In making this designation, you should carefully read the prospectus and this prospectus supplement and consider the information set forth on page [#] of this prospectus supplement under “Notice of Your Rights Concerning Employer Securities — The Importance of Diversifying Your Retirement Savings.” The trustees of the SR Bancorp, Inc. Stock Fund will subscribe for the purchase of SR Bancorp common stock at $10.00 per share in accordance with your directions. However, your directions are subject to the purchase priorities and purchase limitations, as described below.

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Purchase Priorities All 401(k) Plan participants are eligible to elect to subscribe for SR Bancorp common stock in the stock offering. However, the elections are subject to the purchase priorities in the Plan of Conversion of Somerset Savings Bank, SLA, which provides for a subscription offering and a community offering. In the stock offering, the purchase priorities are as follows and apply in case more shares of SR Bancorp common stock are ordered than are available for sale (an “oversubscription):   Subscription Offering:   (1)   Each person with $50 or more on deposit at Somerset Savings as of the close of business on June 30, 2021, has first priority.   (2)   Somerset Savings’ tax-qualified plans, including the employee stock ownership plan and the 401(k) Plan, have second priority.   (3)   Each person with $50 or more on deposit at Somerset Savings as of the close of business on [•], 2023, has third priority.   (4)   Each Person with a deposit account at Somerset Savings at the close of business on the [Voting Record Date], has fourth priority.   Community Offering:   Shares of SR Bancorp common stock not purchased in the subscription offering may be offered for sale to the general public in a “community offering,” with a preference given to natural persons (including trusts of natural persons) in the New Jersey Counties of Hunterdon, Middlesex and Somerset.   If you fall into subscription offering categories (1), (3) or (4) above, you have subscription rights to purchase SR Bancorp common stock in the subscription offering and you may use funds (up to 50% of your account balance) in the 401(k) Plan to pay for the SR Bancorp common stock. You may also be able to purchase shares of SR Bancorp common stock in the subscription offering even though you are ineligible to purchase through subscription offering categories (1), (3) or (4) through subscription offering category (2), reserved for the Somerset Savings’ tax-qualified employee plans.   If you fall into purchase priority (1), (3) or (4), you will separately receive offering materials in the mail, including a stock order form. You may use the stock order form to purchase shares of SR Bancorp common stock outside the 401(k) Plan.   Additionally, instead of  (or in addition to) placing an order outside the 401(k) Plan using the stock order form, you may place an order for the purchase of SR Bancorp common stock through the 401(k) Plan in the manner described below under “How to Order Common Stock in the Stock Offering Through the Plan.”

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Purchases in the Offering and Oversubscriptions	The trustees of the 401(k) Plan will subscribe for SR Bancorp common stock in the stock offering in accordance with your directions. Once you make your election, the amount that you elect to transfer from your existing investment options for the purchase of SR Bancorp common stock will be sold from your existing investment options and the proceeds will be transferred to the Stock Purchase option (which will be invested in a money market fund during the offering period) pending the completion of the stock offering several weeks later. After the end of the stock offering period, we will determine whether all or any portion of your order will be filled (if the offering is oversubscribed you may not receive any or all of your order, depending on your purchase priority, as described above). The amount that can be used toward your order will be applied to the purchase of SR Bancorp common stock. Following the closing of the stock offering, your purchased shares of SR Bancorp common stock will be transferred to the 401(k) Plan and will be reflected in your 401(k) Plan account as soon as practicable thereafter. In the event the stock offering is oversubscribed, and the trustees are unable to use the full amount allocated by you to purchase SR Bancorp common stock in the stock offering, the amount that cannot be invested in shares of SR Bancorp common stock, and any interest earned on that amount, will be transferred from the Stock Purchase option and reinvested in the existing funds of the 401(k) Plan, in accordance with your then existing investment election (in proportion to your investment direction for future contributions). The prospectus describes the allocation procedures in the event of an oversubscription. If you choose not to direct the investment of your account balances towards the purchase of SR Bancorp common stock in connection with the stock offering, your account balances will remain in the investment funds of the 401(k) Plan as previously directed by you.
Composition of the SR Bancorp, Inc. Stock Fund	Shares of SR Bancorp common stock purchased by the 401(k) Plan in the stock offering will be transferred to the 401(k) Plan and held in the SR Bancorp, Inc. Stock Fund. The SR Bancorp, Inc. Stock Fund is neither a mutual fund nor a diversified or managed investment option. Rather, it is merely a recordkeeping mechanism established by the 401(k) Plan custodian to track the shares purchased by the participants in the stock offering through the Plan. The SR Bancorp, Inc. Stock Fund will consist solely of shares of SR Bancorp common stock purchased by participants in the 401(k) Plan, which will be initially valued at $10.00 per share (i.e., the purchase price). Following the stock offering, each day the aggregate value of SR Bancorp, Inc. Stock Fund will be determined by dividing the total market value of the fund at the end of the day by the total number of shares held in the fund by all participants as of the previous day’s end. The change in share value reflects the day’s change in stock price of SR Bancorp common stock, and the value of each participation interest should be the same as one share of SR Bancorp common stock. Investment in SR Bancorp common stock involves risks common to investments in shares of stock. For a discussion of material risks you should consider, see the “Risk Factors” section of the accompanying prospectus and the section of the prospectus supplement called “Notice of Your Rights Concerning Employer Securities” (see below). The portion of your 401(k) Plan account invested in the SR Bancorp, Inc. Stock Fund will be reported to you on your regular 401(k) Plan participant statements. You can also go online at any time to www.principal.com or call 1-800-547-7754 to review your account balances.
Minimum and Maximum Investment	In connection with the stock offering, the 401(k) Plan will permit you to use up to 50% of your 401(k) Plan account balance for the purchase of SR Bancorp common stock in the stock offering. The trustees of the 401(k) Plan will subscribe for shares of SR Bancorp common stock offered for sale in the stock offering, in accordance with each participant’s direction. The trustee will pay $10.00 per share, which will be the same price paid by all other persons who purchase shares in the stock offering. To purchase SR Bancorp common stock through the 401(k) Plan, the minimum investment is $250, which will purchase 25 shares. No individual may purchase more than $250,000 (25,000 shares) of SR Bancorp common stock. Furthermore, no person or entity, together with associates or persons acting in concert with such person or entity, may purchase more than $250,000 (25,000 shares) of SR Bancorp common stock in all categories of the stock offering combined. Please see the prospectus for further details regarding additional maximum purchase limits for investors in the stock offering.

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Value of the Plan Assets

As of December 31, 2022, the market value of the assets of the 401(k) Plan attributable to active and former employees of Somerset Savings was approximately $11,468,106.

How to Order Stock in the Offering

•  You can elect to transfer (in whole dollar amounts) all or a portion of your account balance in the Plan to the Stock Purchase option, which will be used by the 401(k) Plan trustees to purchase shares of SR Bancorp common stock. This is done by following the procedures described below. Please note the following conditions concerning this election: •  You can elect to transfer up to 50% of your current 401(k) Plan account balance to the Stock Purchase option. •  Your election is subject to a minimum purchase of 25 shares of common stock, which equals $250. Your election, plus any order you placed outside the 401(k) Plan, are together subject to a maximum purchase limit of no more than 25,000 shares of SR Bancorp common stock, which equals $250,000. The prospectus describes an additional purchase limitation of 25,000 shares of SR Bancorp common stock, which equals $250,000, for an individual, together with associates or persons acting in concert with such individual. •  The election period for the Plan purchases ends at 4:00 p.m., Eastern Time, on June ___, 2023 (the “Plan Purchase Period”). •  Your election to purchase common stock in the offering through the 401(k) Plan will be accepted by Principal Financial Group, the recordkeeper of the 401(k) Plan. After your election is accepted by Principal Financial Group, it will be rounded down to the closest dollar amount divisible by $10.00, and will be used by the trustees to purchase shares of SR Bancorp common stock sold in the stock offering. This difference will remain in the Stock Purchase option until the completion of the stock offering, which is expected to be several weeks after the Plan Purchase Period ends. At that time, the SR Bancorp common stock purchased based on your election will be transferred to the 401(k) Plan and any remaining funds will be transferred out of the Stock Purchase option for investment in other funds under the 401(k) Plan, based on your election currently on file for future contributions. •  The amount you elect to transfer to the Stock Purchase option will be held separately until the completion of the stock offering. Therefore, this money is not available for distributions, loans, or withdrawals until the stock offering is completed, which is expected to be several weeks after the 401(k) Plan Purchase Period ends. •  Following the completion of the stock offering, your purchased shares of SR Bancorp common stock will be reflected in your 401(k) Plan account through the SR Bancorp, Inc. Stock Fund. Follow these steps to make your election to use your account balance in the 401(k) Plan to purchase shares of SR Bancorp, Inc. common stock in the stock offering. You are allowed only one election to transfer funds to the Stock Purchase option.

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	•  Go to www.principal.com and log into your 401(k) Plan account. In Account Login, click on drop down and choose “Personal,” then “GO.” Enter your Username and Password. If you haven’t established your Username and Password, click on the link “Establish your Username and Password” and follow the prompts. •  On your Personal Summary Page, choose the line for the Somerset Savings, SLA 401(k) Savings and Investment Plan. •  When you reach “Your Account Overview,” click on “Investments” across the top navigation of the screen, and then click on “Change Investments.” •  When you reach the “Change Investments” screen, click on the box titled “Move Balances.” Then click on Make a Transfer.” •  Click on “Advanced Transfer Features” and choose “dollars,” then enter the amount you would like to transfer “From” each investment. When you have completed transferring “From” each investment, choose “Continue.” •  Enter the dollars that you will be transferring into the Stock Purchase account. The Stock Purchase account is a money market investment that will hold the funds until the stock offering is concluded. All of the funds that you transferred “From” other investments must be transferred to another investment. All of the dollars must be transferred “To” another investment. When you have completed the “To” portion of the transaction, click “Continue.” You will be taken to a confirmation page. Please review your transaction for accuracy. If you need to make changes, click on “Cancel” or “Start Over” or “Previous” to make changes. If the information is correct, click on the box, “I confirm the information above and authorize Principal Life Insurance Company to process this request.” You will receive a communication in your Message Center confirming your transaction. After you completed your online election, you will also need to complete the Stock Information Form and return it either using the self-addressed pre-paid envelope, emailing it to d_depace@somersetsavings.com or by delivering it in person, to be received by Dana DePace, VP, Human Resources Manager, Somerset Savings Bank, SLA, 220 West Union Avenue, Bound Brook, New Jersey 08805; telephone number (732) 893-1770.
Order Deadline	You must make your election online at www.principal.com and return your Stock Information Form in the pre-paid envelope, by emailing to d_depace@somersetsavings.com or by delivering it in person to Dana DePace, VP, Human Resources Manager, Somerset Savings Bank, SLA, 220 West Union Avenue, Bound Brook, New Jersey 08805; telephone number (732) 893-1770; to be received no later than [time] p.m., Eastern Time, on June ___, 2023.
Irrevocability of Transfer Direction	Once you make an election to transfer amounts to the Stock Purchase option to be used by the trustee to purchase SR Bancorp common stock in connection with the stock offering, you may not change your election.

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	Your election is irrevocable. You will, however, continue to have the ability to transfer amounts not directed towards the purchase of SR Bancorp common stock among all of the other investment funds on a daily basis.
Future Direction to Purchase and Sell Common Stock	You will be able to purchase SR Bancorp common stock after the stock offering through the 401(k) Plan by investing your future contributions through the SR Bancorp, Inc. Stock Fund, provided, that no more than 50% of your future contributions (both employer and employee) may be invested in the SR Bancorp, Inc. Stock Fund. Additionally, after the stock offering, you will be able to transfer no more than 50% of your account balance to the SR Bancorp, Inc. Stock Fund. After the stock offering, to the extent that shares are available, the trustee of the 401(k) Plan will acquire shares of SR Bancorp common stock at your election in open market transactions at the prevailing price, which may be less than or more than $10.00 per share. In addition, a brokerage commission of  $0.05 per share of stock purchased will be charged. You may change your investment allocation on a daily basis. However, please be advised that your ability to buy or sell SR Bancorp common stock within the 401(k) Plan largely depends upon the existence of an active market for the stock. If SR Bancorp common stock is illiquid (meaning there are a low number of buyers and sellers of the stock) on the date you elect to buy or sell SR Bancorp common stock within the 401(k) Plan, your election may not be immediately processed. As a result, the prevailing price for SR Bancorp, Inc. common stock may be less or more than its fair market value on the date of your election. Special restrictions may apply to purchasing shares of SR Bancorp common stock by the participants who are subject to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, relating to the purchase and sale of securities by officers, directors and principal stockholders of SR Bancorp. Please note that if you are an officer of the Somerset Savings who is restricted by regulation from selling shares of SR Bancorp common stock acquired in the stock offering for one year, the SR Bancorp common stock that you purchased in the stock offering will not be tradable until the one-year trading restriction has lapsed.
Voting Rights of Common Stock	You may direct the trustee as to how to vote your shares of SR Bancorp common stock held in the SR Bancorp, Inc. Stock Fund, if permitted by Somerset Savings. If the trustee does not receive your voting instructions, the trustee will be directed by Somerset Savings to vote your shares in the same proportion as the voting instructions received from other participants related to their shares of SR Bancorp common stock held by the 401(k) Plan, provided that such vote is made in accordance with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). All voting instructions will be kept confidential.

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DESCRIPTION OF THE 401(k) PLAN

Introduction

Somerset Savings originally adopted the 401(k) Plan effective as of January 1, 1984. In connection with the mutual-to-stock conversion of Somerset Savings, SR Bancorp and Somerset Savings desire to allow participants to purchase common stock of SR Bancorp in their accounts in the 401(k) Plan. The 401(k) Plan is a tax-qualified plan with a cash or deferred compensation feature established in accordance with the requirements under Section 401(a) and Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”).

Somerset Savings intends that the 401(k) Plan, in operation, will comply with the requirements under Section 401(a) and Section 401(k) of the Code. Somerset Savings will adopt any amendments to the 401(k) Plan that may be necessary to ensure the continuing qualified status of the 401(k) Plan under the Code and applicable Treasury Regulations.

ERISA. The 401(k) Plan is an “individual account plan” other than a “money purchase pension plan” within the meaning of ERISA. As such, the 401(k) Plan is subject to all of the provisions of Title I (Protection of Employee Benefit Rights) and Title II (Amendments to the Code Relating to Retirement Plans) of ERISA, except to the funding requirements contained in Part 3 of Title I of ERISA, which by their terms do not apply to an individual account plan (other than a money purchase plan). The 401(k) Plan is not subject to Title IV (Plan Termination Insurance) of ERISA. The funding requirements contained in Title IV of ERISA are not applicable to participants or beneficiaries under the 401(k) Plan.

Reference to Full Text of Plan. The following portions of this prospectus supplement summarize certain provisions of the 401(k) Plan. They are not complete and are qualified in their entirety by the full text of the 401(k) Plan. Copies of the 401(k) Plan are available to all employees by filing a request with the 401(k) Plan Administrator c/o Somerset Savings, Attn: Dana DePace, VP, Human Resources Manager, Somerset Savings Bank, SLA, 220 West Union Avenue, Bound Brook, New Jersey 08805; telephone number (732) 893-1770; email:d_depace@somersetsavings.com.

Eligibility and Participation

As an employee of Somerset Savings, you are eligible to become a participant in the 401(k) Plan on the entry date coinciding with or immediately following completion of six months of service and attainment of age 21. The entry dates under the 401(k) Plan are the first day of the month on or after you meet these requirements.

As of December 31, 2022, there were approximately 89 active and former employees with account balances in the 401(k) Plan.

Contributions under the Plan

Elective Deferrals. You may defer up to 100% of your compensation as of the date you become a participant in the 401(k) Plan, but may choose a different percentage or choose not to defer at all. You are automatically enrolled to defer 2% of your compensation.

You are permitted to defer up to 100% of your compensation, subject to certain restrictions imposed by the Code, and to have that amount contributed to the 401(k) Plan on your behalf. Your elective deferrals are subject to certain restrictions imposed by the Code, and for 2023, you may defer up to $22,500 and you may defer an additional $7,500 if you qualify for catch-up contributions as described in the next paragraph. The Compensation of each participant taken into account under the Plan is limited by the Code, and for 2023 the limit is $330,000 (this limit may change on an annual basis). Canceling or changing your contribution percentage can be accomplished by going to www.Principal.com.

Catch-up Contributions. If you have made the maximum amount of elective deferrals allowed by the 401(k) Plan or other legal limits and you have attained at least age 50 (or will reach age 50 prior to the end of the tax year, which is December 31), you are also eligible to make an additional catch-up contribution. In 2023, the maximum catch-up contribution is $7,500. You may authorize your employer to withhold a specified dollar amount of your compensation for this purpose.

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Employer Contributions. Somerset Savings currently makes a contribution equal to 3% of your contribution.

Limitations on Contributions

Contribution Limits. For the tax year beginning January 1, 2023, the amount of your elective deferrals may not exceed $22,500 per calendar year, or $30,000, if you are eligible to make catch-up contributions. Contributions in excess of this limit are known as excess deferrals. If you defer amounts in excess of this limitation, your gross income for federal income tax purposes will include the excess in the year of the deferral. In addition, unless the excess deferral is distributed before April 15 of the following year, it will be taxed again in the year distributed. Income on the excess deferral distributed by April 15 of the immediately succeeding year will be treated, for federal income tax purposes, as earned and received by you in the tax year in which the contribution is made.

The total amount of contributions that you make and any contribution your employer makes on your behalf to your account in one year is generally limited to the lesser of 100% of your compensation or $66,000 (for 2023), or if applicable, $73,500 (for 2023) including catch-up contributions.

Rollovers. You may make a rollover contribution of an eligible rollover distribution from any other qualified retirement plan or an individual retirement arrangement (IRA). These funds will be maintained in a separate rollover account in which you will have a nonforfeitable vested interest.

Benefits under the Plan

Vesting. At all times, you have a fully vested, nonforfeitable interest in the portion of your account balance attributable to elective deferrals and employer contributions under the 401(k) Plan.

Distribution at Termination of Employment. You will be entitled to receive a distribution of the vested amounts in your account when your employment terminates for any reason. Your benefit will be equal to the vested balance of your account. The Plan will make involuntary cash-out distributions of vested account balances in accordance with the Plan. If you are not a 5% or more owner of your employer, your required benefit commencement date is the April 1^st following the close of the year in which the later occurs: you attain age 72 ¹⁄₂ or you terminate employment.

Distribution after Death of Participant. In the event of your death, the value of your entire account will be payable to your beneficiary in accordance with the 401(k) Plan.

Investment of Contributions and Account Balances

All amounts credited to your accounts under the 401(k) Plan are held in the 401(k) Plan trust (the “Trust”), which is administered by the trustee of the 401(k) Plan. Prior to the effective date of the offering, you were provided the opportunity to direct the investments of your account into one of the investment options described below.

Morley Stable Value Class 80-I Fund

Loomis Sayles Core Plus Bond Y Fund

American Funds American Balanced R6 Fund

JP Morgan SmartRetirement 2020 A Fund

JP Morgan SmartRetirement 2030 A Fund

JP Morgan SmartRetirement 2040 A Fund

JP Morgan SmartRetirement 2050 A Fund

JP Morgan SmartRetirement 2060 A Fund

American Funds Washington Mutual Investors R6 Fund

JP Morgan Large Cap Growth A Fund

MidCap S&P 400 Index Separate Account

American Century Small Cap Value R6 Fund

Vanguard Global Equity Investor Fund

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Performance History

The following table provides performance data with respect to the investment funds in the Plan:

	Average Annual Total Return (as of 12/31/2022 year end)
Investment Option Name	1-Year	3-Year	5-Year	10-Year
Morley Stable Value Class 80-I Fund	1.14%	1.14%	1.28%	1.00%
Loomis Sayles Core Plus Bond Y Fund	-12.75%	-1.64%	0.58%	1.70%
American Funds American Balanced R6 Fund	-11.83%	4.42%	5.84%	8.59%
JP Morgan SmartRetirement 2020 A Fund	-14.26%	-0.08%	1.70%	4.58%
JP Morgan SmartRetirement 2030 A Fund	-16.82%	1.02%	2.72%	6.17%
JP Morgan SmartRetirement 2040 A Fund	-17.98%	2.78%	3.93%	7.37%
JP Morgan SmartRetirement 2050 A Fund	-18.54%	3.18%	4.23%	7.54%
JP Morgan SmartRetirement 2060 A Fund	-18.47%	3.19%	4.29%	N/A
American Funds Washington Mutual Investors R6 Fund	-8.18%	8.55%	9.41%	12.25%
JP Morgan Large Cap Growth A Fund	-25.59%	11.03%	13.69%	14.96%
MidCap S&P 400 Index Separate Account	-13.10%	7.14%	6.62%	10.68%
American Century Small Cap Value R6 Fund	-14.52%	8.70%	7.44%	10.72%
Vanguard Global Equity Investor Fund	-22.64%	2.31%	4.61%	8.52%

Description of the Investment Funds

Morley Stable Value Class 80-I Fund. The Fund primarily consists of a diversified portfolio of Stable Value Investment Contracts (Investment Contracts) issued by life insurance companies, banks and other financial institutions, the performance of which may be predicated on underlying fixed income investments. The principal value of these assets is designed to remain stable regardless of stock and bond market fluctuations. The Fund is typically appropriate for investors who desire low volatility, stable principal value, and returns commensurate with a capital preservation objective for a component of their retirement savings. The Fund is designed for long-term retirement investing.

Loomis Sayles Core Plus Bond Y Fund. The investment seeks high total investment return through a combination of current income and capital appreciation. Under normal market conditions, the fund will invest at least 80% of its net assets (plus any borrowings made for investment purposes) in bonds, which include debt securities of any maturity. In addition, it will invest at least 65% of its net assets in investment grade securities. The fund will generally seek to maintain an effective duration of +/- 2 years relative to the Bloomberg U.S. Aggregate Bond Index

American Funds American Balanced R6 Fund. The investment seeks conservation of capital, current income and long-term growth of capital and income. The fund uses a balanced approach to invest in a broad range of securities, including common stocks and investment-grade bonds. It also invests in securities issued and guaranteed by the U.S. government and by federal agencies and instrumentalities. In addition, the fund may invest a portion of its assets in common stocks, most of which have a history of paying dividends, bonds and other securities of issuers domiciled outside the United States.

JP Morgan SmartRetirement 2020 A Fund. The investment seeks high total return with a shift to current income and some capital appreciation over time as the fund approaches and passes the target retirement date. The fund is intended for investors who retired on or around the year 2020 and plan to withdraw their investment in the fund throughout retirement. It is designed to provide exposure to equity, fixed income and cash/cash equivalent asset classes by investing in mutual funds and ETFs within the same group of investment companies, passive ETFs that are managed by unaffiliated investment advisers in certain limited instances and/or direct investments in other financial instruments.

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JP Morgan SmartRetirement 2030 A Fund. The investment seeks high total return with a shift to current income and some capital appreciation over time as the fund approaches and passes the target retirement date. The fund is generally intended for investors who plan to retire around the year 2030 and then withdraw their investment in the fund throughout retirement. It is designed to provide exposure to equity, fixed income and cash/cash equivalent asset classes by investing in mutual funds and ETFs within the same group of investment companies, passive ETFs that are managed by unaffiliated investment advisers in certain limited instances and/or direct investments in other financial instruments.

JP Morgan SmartRetirement 2040 A Fund. The investment seeks high total return with a shift to current income and some capital appreciation over time as the fund approaches and passes the target retirement date. The fund is generally intended for investors who plan to retire around the year 2040 and then withdraw their investment in the fund throughout retirement. It is designed to provide exposure to equity, fixed income and cash/cash equivalent asset classes by investing in mutual funds and ETFs within the same group of investment companies, passive ETFs that are managed by unaffiliated investment advisers in certain limited instances and/or direct investments in other financial instruments.

JP Morgan SmartRetirement 2050 A Fund. The investment seeks high total return with a shift to current income and some capital appreciation over time as the fund approaches and passes the target retirement date. The fund is generally intended for investors who plan to retire around the year 2050 and then withdraw their investment in the fund throughout retirement. It is designed to provide exposure to equity, fixed income and cash/cash equivalent asset classes by investing in mutual funds and ETFs within the same group of investment companies, passive ETFs that are managed by unaffiliated investment advisers in certain limited instances and/or direct investments in other financial instruments.

JP Morgan SmartRetirement 2060 A Fund. The investment seeks high total return with a shift to current income and some capital appreciation over time as the fund approaches and passes the target retirement date. The fund is generally intended for investors who plan to retire around the year 2060 and then withdraw their investment in the fund throughout retirement. It is designed to provide exposure to equity, fixed income and cash/cash equivalent asset classes by investing in mutual funds and ETFs within the same group of investment companies, passive ETFs that are managed by unaffiliated investment advisers in certain limited instances and/or direct investments in other financial instruments.

American Funds Washington Mutual Investors R6 Fund. The investment seeks to produce income and to provide an opportunity for growth of principal consistent with sound common stock investing. The fund invests primarily in common stocks of established companies that are listed on, or meet the financial listing requirements of, the New York Stock Exchange and have a strong record of earnings and dividends. Its advisor strives to maintain a fully invested, diversified portfolio, consisting primarily of high-quality common stocks.

JP Morgan Large Cap Growth A Fund. The investment seeks long-term capital appreciation. Under normal circumstances, at least 80% of the fund’s assets will be invested in the equity securities of large, well-established companies. “Assets” means net assets, plus the amount of borrowings for investment purposes. Large, well-established companies are companies with market capitalizations equal to those within the universe of the Russell 1000(R) Growth Index at the time of purchase.

MidCap S&P 400 Index Separate Account. The investment option normally invests the majority of assets in common stocks of companies that compose the S&P MidCap 400 Index. Management attempts to mirror the investment performance of the index by allocating assets in approximately the same weightings as the S&P MidCap 400 Index. Over the long-term, management seeks a very close correlation between the performance of the Separate Account before expenses and that of the S&P MidCap 400 Index.

American Century Small Cap Value R6 Fund. The investment seeks long-term capital growth; income is a secondary consideration. Under normal market conditions, the portfolio managers will invest at least 80% of the fund’s net assets in small cap companies. The portfolio managers consider small cap companies to include those with market capitalizations no larger than that of the largest company in the S&P Small Cap 600(R) Index or the Russell 2000(R) Index.

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Vanguard Global Equity Investor Fund. The investment seeks long-term capital appreciation. The fund invests primarily in U.S. and foreign equity securities chosen mainly on the basis of bottom-up stock analysis. It typically invests across a wide range of industries, and its holdings are expected to represent a mix of value and growth stocks, as well as a mix of developed and emerging markets stocks, across the capitalization spectrum. Under normal circumstances, at least 80% of the fund’s assets will be invested in equity securities. The fund uses multiple investment advisors. Each advisor independently selects and maintains a portfolio of common stocks and other investments for the fund.

An investment in any of the funds listed above is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund investment, there is always a risk that you may lose money on your investment in any of the funds listed above.

SR Bancorp, Inc. Stock Fund

In connection with the stock offering, the 401(k) Plan now offers the SR Bancorp, Inc. Stock Fund as an additional choice to the investment options described above. The SR Bancorp, Inc. Stock Fund invests primarily in the shares of common stock of SR Bancorp. In connection with the stock offering, you may, in the manner described earlier, direct the trustee to invest up to 50% of your 401(k) Plan account in the SR Bancorp, Inc. Stock Fund.

As of the date of this prospectus supplement, there is no established market for SR Bancorp common stock. Accordingly, there is no record of the historical performance of the SR Bancorp, Inc. Stock Fund. Performance of the SR Bancorp, Inc. Stock Fund depends on a number of factors, including the financial condition and profitability of SR Bancorp and Somerset Savings and market conditions for shares of SR Bancorp common stock generally.

Investments in the SR Bancorp, Inc. Stock Fund involve special risks common to investments in the shares of common stock of SR Bancorp. In making a decision to invest a part of your account balance in the SR Bancorp, Inc. Stock Fund, you should carefully consider the information set forth on page [#] of this prospectus supplement under “Notice of Your Rights Concerning Employer Securities – The Importance of Diversifying Your Retirement Savings.”

For a discussion of material risks you should consider, see “Risk Factors” beginning on page [19] of the attached prospectus and the section of this prospectus supplement called “Notice of Your Rights Concerning Employer Securities” below.

Withdrawals from the Plan

Applicable federal law requires the Plan to impose substantial restrictions on the right of a 401(k) Plan participant to withdraw amounts held for his or her benefit under the 401(k) Plan prior to the participant’s termination of employment with Somerset Savings. A substantial federal tax penalty may also be imposed on withdrawals made prior to the participant’s attainment of age 59 ¹⁄₂, regardless of whether the withdrawal occurs during his or her employment with Somerset Savings or after termination of employment.

Withdrawal from your Account prior to Retirement. Once you have attained age 59 ¹⁄₂, you may request distribution of all or part of the amounts credited to your accounts attributable to elective deferrals, nonelective contributions and matching contributions.

Hardship Withdrawals. If you incur a financial hardship, you may request a withdrawal from the portion of your account attributable to your pre-tax and after-tax elective deferrals.

Rollover Contributions. You may withdraw amounts you contributed to the 401(k) Plan as a rollover contribution at any time.

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Loan. You may request a loan from your account pursuant to the procedures established in the 401(k) Plan.

Administration of the Plan

The Trustee. The trustee of the Plan is Principal Trust Company. Principal Trust Company serves as trustee for all the investments funds under the Plan, except that William P. Taylor, Christopher J. Pribula and Dana DePace will serve as trustees of the SR Bancorp, Inc. Stock Fund only during the stock offering period.

Plan Administrator. Pursuant to the terms of the Plan, the Plan is administered by the Plan administrator. The address of the Plan administrator is Somerset Savings, 220 West Union Avenue, Bound Brook, New Jersey 08805. The Plan administrator is responsible for the administration of the Plan, interpretation of the provisions of the Plan, prescribing procedures for filing applications for benefits, preparation and distribution of information explaining the Plan, maintenance of plan records, books of account and all other data necessary for the proper administration of the Plan, preparation and filing of all returns and reports relating to the Plan which are required to be filed with the U.S. Department of Labor and the Internal Revenue Service, and for all disclosures required to be made to participants, beneficiaries and others under Sections 104 and 105 of ERISA.

Reports to Plan Participants. The 401(k) Plan administrator will furnish you a statement at least quarterly showing the balance in your account as of the end of that period, the amount of contributions allocated to your account for that period, and any adjustments to your account to reflect earnings or losses (if any). In addition, you can go on-line to principal.com or call 1-(800) 547-7754 at any time to review your account balances.

Amendment and Termination

It is the intention of Somerset Savings to continue the 401(k) Plan indefinitely. Nevertheless, Somerset Savings may terminate the 401(k) Plan at any time. If the 401(k) Plan is terminated in whole or in part, then regardless of other provisions in the 401(k) Plan, you will have a fully vested interest in your accounts. Somerset Savings reserves the right to make any amendment or amendments to the 401(k) Plan which do not cause any part of the trust to be used for, or diverted to, any purpose other than the exclusive benefit of participants or their beneficiaries; provided, however, that Somerset Savings may make any amendment it determines necessary or desirable, with or without retroactive effect, to comply with ERISA.

Merger, Consolidation or Transfer

In the event of the merger or consolidation of the 401(k) Plan with another plan, or the transfer of the trust assets to another plan, the 401(k) Plan requires that you would receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit you would have been entitled to receive immediately before the merger, consolidation or transfer.

Federal Income Tax Consequences

The following is a brief summary of the material federal income tax aspects of the 401(k) Plan. You should not rely on this summary as a complete or definitive description of the material federal income tax consequences relating to the 401(k) Plan. Statutory provisions change, as do their interpretations, and their application may vary in individual circumstances. Finally, the consequences under applicable state and local income tax laws may not be the same as under the federal income tax laws. Please consult your tax advisor with respect to any distribution from the 401(k) Plan and transactions involving the 401(k) Plan.

As a “tax-qualified retirement plan,” the Code affords the 401(k) Plan special tax treatment, including:

(1) the sponsoring employer is allowed an immediate tax deduction for the amount contributed to the Plan each year;

(2) participants pay no current income tax on amounts contributed by the employer on their behalf; and

(3) earnings of the 401(k) Plan are tax-deferred, thereby permitting the tax-free accumulation of income and gains on investments.

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Somerset Savings will administer the 401(k) Plan to comply with the requirements of the Code as of the applicable effective date of any change in the law.

Lump-Sum Distribution. A distribution from the 401(k) Plan to a participant or the beneficiary of a participant will qualify as a lump-sum distribution if it is made within one taxable year, on account of the participant’s death, disability or separation from service, or after the participant attains age 59 ¹⁄₂, and consists of the balance credited to participants under the 401(k) Plan and all other profit sharing plans (and in some cases all other stock bonus plans), if any, maintained by Somerset Savings. The portion of any lump-sum distribution required to be included in your taxable income for federal income tax purposes consists of the entire amount of the lump-sum distribution, less the amount of after-tax contributions, if any, you have made to this 401(k) Plan and any other profit sharing plans maintained by Somerset Savings, which is included in the distribution.

SR Bancorp, Inc. Common Stock Included in Lump-Sum Distribution. If a lump-sum distribution includes SR Bancorp common stock, the distribution generally will be taxed in the manner described above, except that the total taxable amount may be reduced by the amount of any net unrealized appreciation with respect to SR Bancorp common stock, that is, the excess of the value of SR Bancorp common stock at the time of the distribution over its cost or other basis of the securities to the trust. The tax basis of SR Bancorp common stock, for purposes of computing gain or loss on its subsequent sale, equals the value of SR Bancorp common stock at the time of distribution, less the amount of net unrealized appreciation. Any gain on a subsequent sale or other taxable disposition of SR Bancorp common stock, to the extent of the amount of net unrealized appreciation at the time of distribution, will constitute long-term capital gain, regardless of the holding period of SR Bancorp common stock. Any gain on a subsequent sale or other taxable disposition of SR Bancorp common stock, in excess of the amount of net unrealized appreciation at the time of distribution, will be considered long-term capital gain. The recipient of a distribution may elect to include the amount of any net unrealized appreciation in the total taxable amount of the distribution, to the extent allowed by regulations to be issued by the Internal Revenue Service.

Distributions: Rollovers and Direct Transfers to Another Qualified Plan or to an IRA. You may roll over virtually all distributions from the 401(k) Plan to another qualified plan or to an individual retirement account (IRA) in accordance with the terms of the other plan or account.

Notice of Your Rights Concerning Employer Securities

There has been an important change in Federal law that provides specific rights concerning investments in employer securities, such as SR Bancorp common stock. Because you may in the future have investments in SR Bancorp, Inc. Stock Fund under the Plan, you should take the time to read the following information carefully.

Your Rights Concerning Employer Securities. The 401(k) Plan must allow you to elect to move any portion of your account that is invested in the SR Bancorp, Inc. Stock Fund from that investment into other investment alternatives under the 401(k) Plan. You may contact the 401(k) Plan Administrator shown above for specific information regarding this new right, including how to make this election. In deciding whether to exercise this right, you will want to give careful consideration to the information below that describes the importance of diversification. All of the investment options under the Plan are available to you if you decide to diversify out of the SR Bancorp, Inc. Stock Fund.

The Importance of Diversifying Your Retirement Savings. To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security, to perform poorly. If you invest more than 20% of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk.

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In deciding how to invest your retirement savings, you should take into account all of your assets, including any retirement savings outside of the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerance for risk. Therefore, you should carefully consider the rights described here and how these rights affect the amount of money that you invest in SR Bancorp common stock through the 401(k) Plan.

It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the 401(k) Plan to help ensure that your retirement savings will meet your retirement goals.

Additional ERISA Considerations

As noted above, the 401(k) Plan is subject to certain provisions of ERISA, including special provisions relating to control over the 401(k) Plan’s assets by participants and beneficiaries. The 401(k) Plan’s feature that allows you to direct the investment of your account balances is intended to satisfy the requirements of Section 404(c) of ERISA relating to control over plan assets by a participant or beneficiary. The effect of this is two-fold. First, you will not be deemed a “fiduciary” because of your exercise of investment discretion. Second, no person who otherwise is a fiduciary, such as Somerset Savings, the 401(k) Plan Administrator, or the 401(k) Plan’s trustee is liable under the fiduciary responsibility provision of ERISA for any loss which results from your exercise of control over the assets in your Plan account.

Because you will be entitled to invest all or a portion of your account balance in the Plan in SR Bancorp common stock, the regulations under Section 404(c) of ERISA require that the 401(k) Plan establish procedures that ensure the confidentiality of your decision to purchase, hold, or sell employer securities, except to the extent that disclosure of such information is necessary to comply with federal or state laws not preempted by ERISA. These regulations also require that your exercise of voting and similar rights with respect to the common stock be conducted in a way that ensures the confidentiality of your exercise of these rights.

Securities and Exchange Commission Reporting and Short-Swing Profit Liability

Section 16 of the Securities Exchange Act of 1934, as amended, imposes reporting and liability requirements on officers, directors, and persons beneficially owning more than 10% of public companies such as SR Bancorp. Section 16(a) of the Securities Exchange Act of 1934 requires the filing of reports of beneficial ownership. Within 10 days of becoming an officer, director or person beneficially owning more than 10% of the shares of SR Bancorp, the individual must fill out a Form 3 reporting initial beneficial ownership and file it with the Securities and Exchange Commission. Changes in beneficial ownership, such as purchases, sales and gifts generally must be reported periodically, either on a Form 4 within two business days after the change occurs, or annually on a Form 5 within 45 days after the close of SR Bancorp’s fiscal year. Discretionary transactions in and beneficial ownership of the common stock through the SR Bancorp, Inc. Stock Fund of the Plan by officers and persons beneficially owning more than 10% of the common stock of SR Bancorp generally must be reported to the Securities and Exchange Commission by such individuals.

In addition to the reporting requirements described above, Section 16(b) of the Securities Exchange Act of 1934, as amended, provides for the recovery by SR Bancorp of profits realized by an officer, director or any person beneficially owning more than 10% of SR Bancorp’s common stock resulting from non-exempt purchases and sales of SR Bancorp common stock within any six-month period.

The Securities and Exchange Commission has adopted rules that provide exemptions from the profit recovery provisions of Section 16(b) for all transactions in employer securities within an employee benefit plan, provided certain requirements are met. These requirements generally involve restrictions upon the timing of elections to acquire or dispose of employer securities for the accounts of Section 16(b) persons.

Except for distributions of common stock due to death, disability, retirement, termination of employment or under a qualified domestic relations order, persons affected by Section 16(b) are required to hold shares of common stock distributed from the Plan for six months following such distribution and are prohibited from directing additional purchases within the SR Bancorp, Inc. Stock Fund for six months after receiving such a distribution.

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Financial Information Regarding Plan Assets

Financial information representing the net assets available for 401(k) Plan benefits and the change in net assets available for 401(k) Plan benefits is available upon written request to the Plan Administrator at the address shown above.

LEGAL OPINION

The validity of the issuance of the common stock has been passed upon by Luse Gorman, PC, Washington, D.C., which firm acted as special counsel to SR Bancorp in connection with SR Bancorp’s stock offering.

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PROSPECTUS

SR Bancorp, Inc.

(Proposed Holding Company for Somerset Savings Bank, SLA)

Up to 11,500,000 Shares of Common Stock Offered to the Public

This is the initial public offering of shares of common stock of SR Bancorp, Inc., a Maryland corporation. SR Bancorp is offering its shares in connection with the mutual to stock conversion of Somerset Savings Bank, SLA. We expect that our shares of common stock will be listed on the Nasdaq Capital Market under the symbol “SRBK.” We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

We are offering up to 11,500,000 shares of common stock for sale on a best efforts basis, subject to certain conditions. We must sell a minimum of 8,500,000 shares to complete the offering. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, the independent appraiser determines our market value has increased, we may sell up to 13,225,000 shares without giving you further notice or the opportunity to change or cancel your order. Additionally, we will contribute up to $1.2 million in cash and up to 575,000 shares of SR Bancorp stock, which, together, represents 6.0% of the value of the common stock issued in the offering, to Somerset Regal Charitable Foundation, Inc., a charitable foundation to be formed in connection with the stock offering. We must sell a minimum of 8,500,000 shares to complete the offering.

The shares of common stock are first being offered for sale in a subscription offering to eligible depositors of Somerset Savings Bank, SLA and the tax-qualified employee benefit plans of Somerset Savings Bank, SLA. Shares not purchased in the subscription offering may be offered for sale to the general public in a community offering, with a preference given to natural persons (including trusts of natural persons) residing in the New Jersey Counties of Hunterdon, Middlesex and Somerset. Any shares of common stock not purchased in the subscription offering or the community offering may be offered for sale to the public through a syndicate of broker-dealers, referred to as the “syndicated community offering” throughout this prospectus. However, no shares purchased in the subscription offering or the community offering will be issued until the completion of any syndicated community offering. We may sell up to 13,225,000 shares of common stock because of demand for the shares of common stock or changes in market conditions, without resoliciting subscribers.

At present, all of our depositors have voting rights in Somerset Savings Bank as to all matters requiring depositor action. Upon completion of the conversion and related stock offering, depositors will no longer have voting rights. Upon completion of the conversion and related stock offering, all voting rights in Somerset Savings Bank will be vested in SR Bancorp as the sole shareholder of Somerset Savings Bank. The shareholders of SR Bancorp will possess exclusive voting rights with respect to SR Bancorp common stock. Accordingly, only depositors who purchase SR Bancorp common stock will continue to have voting rights following the conversion.

The subscription offering is scheduled to terminate at 2:00 p.m., Eastern time, on [offering deadline]. We may extend this termination date without notice to you until [extension date]. Funds received before completion of the offering will be maintained in a segregated account at Somerset Savings Bank, SLA. All subscriptions received will earn interest at our passbook savings rate, which is currently 0.05% per annum.

The minimum purchase is 25 shares. Generally, no individual, or individuals acting through a single qualifying account held jointly, may purchase more than 25,000 shares ($250,000) of common stock, and no person or entity, together with associates or persons acting in concert with such person or entity, may purchase more than 25,000 shares ($250,000) of common stock in all categories of the stock offering combined. Once submitted, orders are irrevocable unless the stock offering is terminated or extended beyond [extension date]. If we extend the stock offering beyond [extension date], we will give subscribers an opportunity to change, cancel or maintain their stock orders. If we terminate the stock offering because we fail to sell the minimum number of shares, or for any other reason, we will promptly return your funds with interest at our passbook savings rate.

Following completion of the conversion and related stock offering, pursuant to an Agreement and Plan of Merger, dated July 25, 2022, by and among Somerset Savings Bank, SLA, SR Bancorp, Inc., Regal Bancorp, Inc. and Regal Bank, as amended on March 7, 2023, we intend to acquire Regal Bancorp. In connection with the proposed merger of Regal Bancorp, Inc. with and into SR Bancorp, Inc., each shareholder of Regal Bancorp, Inc. will receive $23.00 in cash in exchange for each share of Regal Bancorp, Inc. common stock that they own. If we are unable to complete the conversion, including the related stock offering, we will terminate the merger.

Keefe, Bruyette & Woods, Inc. will use its best efforts to assist us in our selling efforts, but is not required to purchase any of the common stock that is offered for sale. Purchasers will not pay a commission to purchase shares of common stock in the offering. All shares offered for sale are offered at a price of $10.00 per share.

This investment involves a degree of risk, including the possible loss of principal.

Please read “Risk Factors” beginning on page 19.

OFFERING SUMMARY

Price Per Share: $10.00

	Minimum		Midpoint		Maximum		Adjusted Maximum
Number of shares offered for sale		8,500,000		10,000,000		11,500,000		13,225,000
Gross offering proceeds(1)	$	85,000,000	$	100,000,000	$	115,000,000	$	132,250,000
Estimated offering expenses, excluding selling agent fees and expenses(1)(2)	$	2,202,000	$	2,202,000	$	2,202,000	$	2,202,000
Selling agent fees and expenses(1)	$	1,135,000	$	1,285,000	$	1,435,000	$	1,607,500
Estimated net proceeds	$	81,663,000	$	96,513,000	$	111,363,000	$	128,440,500
Estimated net proceeds per share	$	9.61	$	9.65	$	9.68	$	9.71

(1) See “The Conversion and Stock Offering—Plan of Distribution; Selling Agent and Underwriter Compensation” for a discussion of Keefe, Bruyette & Woods, Inc.’s compensation for the stock offering and the compensation to be received by Keefe, Bruyette & Woods, Inc. and the other broker-dealers that may participate in any syndicated community offering.

(2) Excludes records agent fees and expenses payable to Keefe, Bruyette & Woods, Inc., which are included in estimated offering expenses. See “The Conversion and Stock Offering—Records Management.”

These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

Neither the Securities and Exchange Commission, the Board of Governors of the Federal Reserve System, the New Jersey Department of Banking and Insurance, the Federal Deposit Insurance Corporation, nor any state securities regulator has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

For assistance, please contact our Stock Information Center at (    )     - .

The date of this prospectus is [Prospectus Date]

SOMERSET SAVINGS287 80 80 Roseland Livingston 95 NEW JERSEY West Orange Manhattan Florham Park 287 Millburn Summit Spring eld 78 Brooklyn 78 78 Whitehouse Bound NEW YORK Somerville Brook Middlesex 95 Raritan 287 Manville Somerset Flemington 95Somerset Savings Bank O_cesBound Brook (Headquarters)220 West Union AvenueFlemington141 Broad Street Manville41 South Main StreetMiddlesex1305 Bound Brook RoadRaritan802 Somerset Street Somerville64 West End AvenueWhitehouse410 Route 22 WestRegal Bank O_ces(1)Livingston (Headquarters)570 West Mt. Pleasant AvenueLivingston66 W Mount Pleasant AvenueRoseland180 Eagle Rock AvenueFlorham Park30 Columbia TurnpikeMillburn290 Millburn AvenueWest Orange641 Eagle Rock AvenueSummit360 Spring_eld AvenueSomerset464B Elizabeth AvenueSpring_eld899 Mountain AvenueSomerville151 N Adamsville RoadN E W J E R S E Y(1)On July 25, 2022, Somerset Savings Bank, SLA and SR Bancorp, Inc. entered into an Agreement and Plan of Merger with Regal Bancorp, Inc. and Regal Bank. The Merger Agreement was subsequently amended on March 7, 2023. Pursuant to the Merger Agreement, as amended, promptly following the completion of the conversion and related stock o_ering, SRB Interim Corporation, a wholly-owned subsidiary of SR Bancorp, will merge with and into Regal Bancorp, a New Jersey corporation, followed by the merger of Regal Bancorp with and into SR Bancorp, with SR Bancorp as the surviving entity. In connection with the proposed Merger, Regal Bancorp shareholders will exchange each of their shares of Regal Bancorp common stock for $23.00 in cash. Immediately following the Merger, Regal Bank, a New Jersey chartered commercial bank headquartered in Livingston, New Jersey and wholly-owned subsidiary of Regal Bancorp, will merge with and into Somerset Savings Bank, which will convert to a commercial bank charter and be renamed Somerset Regal Bank. The Regal Bank o_ces listed above will become branches of Somerset Savings Bank upon the closing of the Bank Merger.

Table of Contents

	Page
Summary		1
Risk Factors		19
Forward-Looking Statements		32
Selected Consolidated Financial and Other Data of Somerset Savings Bank, SLA		34
Selected Consolidated Financial and Other Data of Regal Bancorp		36
How We Intend to Use the Proceeds From the Stock Offering		38
Our Dividend Policy		40
Market for the Common Stock		40
Capitalization		41
Historical and Pro Forma Regulatory Capital Compliance		43
Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Proposed Merger		44
Comparison of Independent Valuation and Pro Forma Financial Information With and Without the Foundation		67
Management’s Discussion and Analysis of Financial Condition and Results of Operations of SR Bancorp		69
Business of SR Bancorp and Somerset Savings Bank, SLA		87
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Regal Bancorp		100
Business of Regal Bancorp and Regal Bank		111
Management of SR Bancorp		114
Executive Compensation		118
Subscriptions by Executive Officers and Directors		125
Regulation and Supervision		126
Taxation		133
The Proposed Merger with Regal Bancorp		134
The Conversion and Stock Offering		150
Somerset Regal Charitable Foundation		168
Restrictions on Acquisition of SR Bancorp and Somerset Savings Bank, SLA		171
Description of SR Bancorp Capital Stock		175
Transfer Agent and Registrar		176
Legal Matters		176
Experts		176
Where You Can Find Additional Information		176
Index to Consolidated Financial Statements of Somerset Savings Bank, SLA		F-1
Index to Consolidated Financial Statements of Regal Bancorp, Inc.		G-1

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SUMMARY

This summary highlights material information from this document and may not contain all the information that is important to you. To understand the conversion, the stock offering and the merger fully, you should read this entire prospectus carefully, including the consolidated financial statements and the notes to the consolidated financial statements. For assistance, please call our Stock Information Center [toll free] at (     )     - .

THE COMPANIES

SR Bancorp, Inc.

Somerset Savings Bank, SLA

220 West Union Avenue

Bound Brook, New Jersey 08805

(732) 560-1700

SR Bancorp, Inc. (“SR Bancorp”) is a new Maryland corporation that was formed by Somerset Savings Bank, SLA (“Somerset Savings Bank”) to be the holding company of Somerset Savings Bank upon completion of its conversion from the mutual to stock form of organization. SR Bancorp has had no operations to date and has never issued any capital stock. This stock offering is being made by SR Bancorp. Upon completion of the conversion and related stock offering, SR Bancorp will own all of Somerset Savings Bank’s capital stock.

Somerset Savings Bank is a New Jersey-chartered mutual savings association that operates from seven branches in Hunterdon, Middlesex and Somerset Counties, New Jersey. Somerset Savings Bank offers a variety of deposit and loan products to individuals and small businesses, most of which are located in our primary market. The acquisition of Regal Bancorp, Inc. (“Regal Bancorp”) and its wholly owned subsidiary, Regal Bank, will expand our market presence into Essex, Morris and Union Counties, New Jersey and enhance our market presence in Somerset County, New Jersey. At December 31, 2022, Somerset Savings Bank had total assets of $649.5 million, deposits of $522.8 million and total equity of $118.1 million. As part of this transaction, Somerset Savings Bank will convert its charter to a New Jersey-chartered commercial bank.

Our executive offices are located at 220 West Union Avenue, Bound Brook, New Jersey 08805. Our telephone number at this address is (732) 560-1700.

Our website address is www.somersetsavings.com. Information on our website should not be considered a part of this prospectus.

Proposed Merger with Regal Bancorp

On July 25, 2022, Somerset Savings Bank and SR Bancorp entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Regal Bancorp, Inc. and Regal Bank. The Merger Agreement was subsequently amended on March 7, 2023. Pursuant to the Merger Agreement, as amended, promptly following the completion of the conversion and related stock offering, SRB Interim Corporation, a wholly-owned subsidiary of SR Bancorp, formed solely to facilitate the merger, will merge with and into Regal Bancorp, a New Jersey corporation, followed by the merger of Regal Bancorp with and into SR Bancorp, with SR Bancorp as the surviving entity (the “Merger”). In connection with the proposed Merger, Regal Bancorp shareholders will exchange each of their shares of Regal Bancorp common stock for $23.00 in cash. The aggregate cash consideration is approximately $69.5 million.

Immediately following the Merger, Regal Bank, a New Jersey chartered commercial bank headquartered in Livingston, New Jersey and wholly-owned subsidiary of Regal Bancorp, will merge with and into Somerset Savings Bank (the “Bank Merger”), which will convert to a commercial bank charter and be renamed Somerset Regal Bank.

Upon closing of the proposed Merger, the Executive Chairman of the Board of Directors of Regal Bancorp, David M. Orbach, and two other current Regal Bancorp board members, will join the Boards of Directors of SR Bancorp and Somerset Regal Bank. Mr. Orbach will serve as Executive Chairman of the Board of Directors of SR Bancorp and as Executive Vice Chairman of the Board of Directors of Somerset Regal Bank. William P. Taylor will continue as Chief Executive Officer and Chairman of the Board of Directors of Somerset Regal Bank and will serve as Chief Executive Officer and a director of SR Bancorp. Christopher J. Pribula will continue as President, Chief

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Operating Officer and a director of Somerset Regal Bank and SR Bancorp. In addition, Messrs. Orbach, Taylor and Pribula entered into employment agreements with SR Bancorp and Somerset Savings Bank at the time of execution of the Merger Agreement, which will become effective as of the effective date of the mutual-to-stock conversion for Messrs. Taylor and Pribula and will becomes effective as of the closing of the proposed Merger for Mr. Orbach.

Regal Bank is a full-service commercial bank that serves the banking needs of small-to medium-sized businesses, professional entities, and individuals primarily in its market area of Essex, Hudson, Morris, Somerset and Union Counties, New Jersey. Regal Bank’s primary business is offering a variety of insured deposit accounts and using such funds as well as borrowings to originate commercial mortgage loans. At December 31, 2022, Regal Bancorp had total consolidated assets of $495.7 million, deposits of $426.0 million and total equity of $49.1 million.

The proposed Merger will increase the combined banks’ deposit base and its loan portfolio, provide Somerset Savings Bank with greater commercial lending expertise and access to commercial loan customers and provide Regal Bank with greater residential lending expertise and access to residential loan customers.

SR Bancorp intends to conduct its offering at the same time Regal Bancorp is soliciting the approval of the proposed Merger from its shareholders and Somerset Savings Bank is soliciting the approval of the offering from its voting members. The failure to complete the offering will result in the termination of the proposed Merger, but the failure to complete the proposed Merger will not necessarily result in the termination of the offering, but would mostly likely require the establishment of a new offering range and require a resolicitation of subscribers if SR Bancorp determined to complete the offering under these circumstances.

Our Business Strategy

The business strategy of the combined entity is to operate and grow a profitable community-oriented financial institution. Following completion of the conversion and related stock offering and the proposed Merger, the combined entity plans to achieve this by:

• leveraging the residential lending expertise of Somerset Savings Bank and the commercial lending expertise of Regal Bank to pursue new opportunities to increase lending in our primary market area and expand its existing loan relationships;

• continuing to use prudent underwriting practices to maintain the high quality of its loan portfolio;

• increasing transaction deposit accounts and deposit balances;

• building profitable business and consumer relationships through enhanced product offerings and by continuing to provide superior customer service;

• continuing to leverage technology to maintain efficient operations and enhance customer service; and

• expanding our franchise through acquisitions (including the Merger with Regal Bancorp) and other possible transactions in its primary market area.

Please see “Risk Factors—Risk Related to Growth” and “Risk Related to Lending Activities” for a discussion of certain risks associated with our business strategy.

Market Area

We are headquartered in Bound Brook, New Jersey. We operate seven full-service branch offices throughout Hunterdon, Middlesex and Somerset Counties, New Jersey. Regal Bank operates ten branches in Essex, Morris, Somerset and Union Counties, New Jersey. We currently consider our New Jersey market area to include the counties of Hunterdon, Middlesex and Somerset. The acquisition of Regal Bancorp will expand our market presence into Essex, Morris and Union Counties and enhance our market presence in Somerset County. The economy in this market area has benefitted from being varied and diverse, with a broad economic base. Employment in service industries, education, healthcare and social services account for the largest employment sectors, with pharmaceutical, financial services and retail companies among the largest employers in the primary market area served by Somerset Savings Bank and Regal Bank. Population and household data indicate that the market areas served by Somerset Savings Bank and Regal Bank are a mix of urban and suburban markets, with Middlesex County

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as the most populous county with a total 2022 population of 861,000, and Hunterdon County as the least populous county with a total 2022 population of 130,000. Income measures indicate that the counties of Hunterdon, Morris and Somerset are relatively affluent markets, with household and per capita income measures above the comparable U.S. and New Jersey measures. Hunterdon, Morris and Somerset Counties maintain higher percentages of households with incomes above $100,000 compared to the U.S. and New Jersey.

Regulation and Supervision

SR Bancorp will be subject to regulation, supervision and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Somerset Savings Bank is and will remain subject to regulation by the New Jersey Department of Banking and Insurance (the “NJDBI”) and the Federal Deposit Insurance Corporation (the “FDIC”).

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THE STOCK OFFERING

Reasons for the Conversion, Stock Offering and Merger

Somerset Savings Bank’s primary reasons for the conversion and the stock offering are to:

• raise capital to provide the funds necessary to acquire Regal Bancorp;

• raise capital to support growth;

• enhance existing products and services, and support the development of new products and services to support growth and enhance customer service;

• attract and retain qualified directors, management and employees through equity ownership and stock-based compensation plans;

• raise capital to make necessary capital investments in facilities and technology to support our internal growth;

• increase philanthropic endeavors to the communities served by Somerset Regal Bank through the formation and funding of a charitable foundation;

• facilitate future mergers and acquisitions; and

• use the additional capital for other general corporate purposes.

The following diagram shows our current organizational structure as a mutual savings association with no shareholders:

SOMERSET SAVINGS BANK, SLA

(a New Jersey-chartered mutual savings association)

After the conversion, offering, charter conversion and Merger are completed, we will be organized as a fully public stock holding company, as follows:

PUBLIC SHAREHOLDERS

(including charitable foundation)

100%

SR BANCORP, INC.

(a Maryland corporation)

100%

SOMERSET REGAL BANK

(a New Jersey-chartered stock commercial bank)

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Terms of the Offering

We are offering for sale between 8,500,000 and 11,500,000 shares of SR Bancorp common stock in this offering. The amount of common stock being sold is based on an appraisal of Somerset Savings Bank. With regulatory approval, we may increase the number of shares to be issued by 15% to 13,225,000 shares without giving you further notice or the opportunity to change or cancel your order. In considering whether to increase the offering size, the NJDBI and the FDIC will consider the amount of subscriptions received, the views of our independent appraiser, our financial condition and results of operations and changes in market conditions.

The purchase price is $10.00 per share. You will not pay a commission to buy any shares in the offering. Keefe, Bruyette & Woods, Inc. (“KBW”), our financial advisor in connection with the conversion, will use its best efforts to assist us in selling our shares of common stock, but KBW is not obligated to purchase any shares in the offering.

How We Determined the Offering Range and the $10.00 Purchase Price

Our decision to offer between 8,500,000 and 11,500,000 shares, which is our offering range, is based on an independent appraisal of our pro forma market value prepared by RP Financial, LC (“RP Financial”), an appraisal firm experienced in appraisals of financial institutions. RP Financial is of the opinion that as of February 21, 2023, the estimated pro forma market value of the common stock offering of SR Bancorp was $100.0 million. Based on shares to be issued in the conversion and applicable regulations, this market value forms the midpoint of an offering range with a minimum of $85.0 million and a maximum of $115.0 million.

Our Board of Directors determined that the common stock should be sold at $10.00 per share. The $10.00 per share price was selected primarily because it is the price most commonly used in stock conversion offerings by savings banks. Therefore, based on the valuation range, the number of shares of SR Bancorp common stock that will be sold in the offering will range from 8,500,000 shares to 11,500,000 shares. If demand for the shares or market conditions warrant, our appraised value can be increased by up to 15%, which would result in an offering of $132.25 million and an offering of 13,225,000 shares of common stock.

In preparing its appraisal, RP Financial considered the information in this prospectus, including our consolidated financial statements, as well as the impact of the Merger and the impact of the contribution of shares of SR Bancorp and cash to Somerset Regal Charitable Foundation, Inc. (“Somerset Regal Charitable Foundation”). RP Financial also considered the following factors, among others:

• our historical, present and projected operating results and financial condition and the economic and demographic characteristics of our market area on a combined basis factoring in completion of the Merger;

• the effect of the capital raised in the offering on our net worth and earnings potential; and

• a comparative evaluation of the operating and financial statistics of Somerset Savings Bank with a peer group of 10 publicly traded savings banks and savings bank holding companies that RP Financial considers comparable to SR Bancorp on a pro forma basis.

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The appraisal peer group consists of the following companies, all of which are traded on the Nasdaq Stock Market. Unless otherwise indicated, total assets are as of December 31, 2022.

Company Name	Ticker Symbol	Headquarters	Total Assets
			(Dollars in millions)
Affinity Bancshares, Inc.	AFBI	Covington, GA	$ 791
ESSA Bancorp, Inc.	ESSA	Stroudsburg, PA	1,927
HMN Financial, Inc.	HMNF	Rochester, MN	1,096
Home Federal Bancorp, Inc. of Louisiana	HFBL	Shreveport, LA	577
IF Bancorp, Inc.	IROQ	Watseka, IL	824
HV Bancorp, Inc.(1)	HVBC	Doylestown, PA	616
Magyar Bancorp, Inc.	MGYR	New Brunswick, NJ	822
Northeast Community Bancorp, Inc.	NECB	White Plains, NY	1,425
Provident Bancorp, Inc.	PVBC	Amesbury, MA	1,636
William Penn Bancorporation	WMPN	Bristol, PA	871

(1) Subsequently eliminated from peer group due to announced sale-of-control.

In determining the valuation, RP Financial considered adjustments to the pro forma market value based on a comparison of SR Bancorp with the peer group. RP Financial advised the Board of Directors that the valuation conclusion included the following adjustments relative to the peer group:

RP Financial considered adjustments to the pro forma market value based on a comparison of SR Bancorp with the peer group. RP Financial advised the Board of Directors that the valuation analysis took into consideration that relative to the peer group a slight downward adjustment was applied for profitability, growth and viability of earnings and a slight downward adjustment was applied for marketing of the issue. Additionally, RP Financial made slight upward adjustments for SR Bancorp’s financial condition and asset growth in comparison to the peer group’s characteristics for those valuation parameters. RP Financial made no adjustments for primary market area, dividends, liquidity of the shares, management and the effect of government regulations and regulatory reform.

The downward adjustment applied for profitability, growth and viability of earnings took into consideration SR Bancorp’s lower pro forma return on equity and less favorable efficiency ratio. The downward adjustment for marketing of the issue took into consideration the decline in the broader stock market, which included a general selloff in financial shares during the past twelve months. The upward adjustment applied for financial condition was due to SR Bancorp’s more favorable credit quality measures, greater balance sheet liquidity and stronger pro forma capital position. The upward adjustment applied for asset growth was due to SR Bancorp’s stronger historical asset growth as the result of the acquisition of Regal Bancorp and greater leverage capacity as the result of the capital that will be raised in the offering.

The independent appraisal will be updated before we complete the conversion. If the pro forma market value of the common stock offering at that time is either below $85.0 million or above $132.25 million, then SR Bancorp, after consulting with the Federal Reserve, may terminate the plan of conversion and return all funds promptly with interest; extend or hold a new subscription or community offering, or both; establish a new offering range and commence a resolicitation of subscribers; or take such other actions as may be permitted by the Federal Reserve and the Securities and Exchange Commission. If we resolicit subscribers in this instance, then all funds delivered to us to purchase shares of common stock in the subscription and community offerings will be returned promptly with interest.

SR Bancorp intends to conduct its offering at the same time Regal Bancorp is soliciting the approval of the proposed Merger from its shareholders and Somerset Savings Bank is soliciting the approval of the offering from its voting members. The failure to complete the offering will result in the termination of the proposed Merger, but the failure to complete the proposed Merger will not necessarily result in the termination of the offering, but would mostly likely require the establishment of a new offering range and require a resolicitation of subscribers if SR Bancorp determined to complete the offering under these circumstances.

Two measures that investors use to analyze an issuer’s stock are the ratio of the offering price to the issuer’s tangible book value and the ratio of the offering price to the issuer’s annual net income. RP Financial considered these ratios, among other factors, in preparing its appraisal. Tangible book value is the same as total equity, less intangible assets.

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The following table presents a summary of selected pricing ratios for the peer group companies and for SR Bancorp that RP Financial used in its appraisal. The ratios for SR Bancorp are based on pro forma core earnings for the 12 months ended December 31, 2022 including the proposed Merger and pro forma book value as of December 31, 2022. The ratios for the peer group are based on estimated core earnings for the 12 months ended December 31, 2022 and book value as of December 31, 2022 (using stock prices as of February 21, 2023).

	Price to Earnings Multiple		Price to Book Value Ratio			Price to Tangible Book Value Ratio
SR Bancorp (pro forma):
Minimum		9.49x		47.37	%		57.08	%
Midpoint		11.06x		52.11	%		61.96	%
Maximum		12.59x		56.31	%		66.23	%
Adjusted Maximum		14.32x		60.50	%		70.32	%
Peer group companies as of February 21, 2023:
Average		10.74x		93.52	%		96.61	%
Median		9.89x		94.22	%		97.45	%

Compared to the median pricing ratios of the peer group at the maximum of the offering range, our stock would be priced at a premium of 27.3% to the peer group on a price-to-earnings basis, a discount of 40.2% to the peer group on a price-to-book basis, and a discount of 32.0% to the peer group on a price-to-tangible book basis. This means that, at the maximum of the offering range, a share of our common stock would be more expensive than the peer group based on a core earnings per share basis and less expensive than the peer group based on a book value per share basis and a tangible book value per share basis.

The independent appraisal does not indicate market value. You should not assume or expect that the valuation described above means that our common stock will trade at or above the $10.00 purchase price after the offering. Furthermore, the pricing ratios presented in the appraisal were used by RP Financial to estimate our pro forma appraised value for regulatory purposes and not to compare the relative value of shares of our common stock with the value of the capital stock of the peer group. The value of the capital stock of a particular company may be affected by a number of factors such as financial performance, asset size and market location.

How We Will Use the Proceeds of this Offering

The following table summarizes how we will use the proceeds of this offering, based on the sale of shares at the minimum and maximum of the offering range.

(Dollars in thousands)	8,500,000 Shares at $10.00 per Share			11,500,000 Shares at $10.00 per Share
Gross offering proceeds	$	85,000		$	115,000
Less: offering expenses		(3,337	)		(3,637	)
Net offering proceeds	$	81,663		$	111,363
Less:
Proceeds contributed to Somerset Savings Bank		(40,832	)		(55,682	)
Proceeds used for loan to employee stock ownership plan		(7,140	)		(9,660	)
Proceeds contributed to Somerset Regal Charitable Foundation		(850	)		(1,150	)
Proceeds remaining for SR Bancorp	$	32,842		$	44,872

Initially, SR Bancorp intends to use the proceeds, along with other funds, including capital funds held by Regal Bancorp, to pay the merger consideration to the shareholders of Regal Bancorp. Remaining proceeds, if any, may initially be invested in short-term liquid investments. In the future, SR Bancorp may use the portion of the proceeds that it retains, if any, to, among other things, invest in securities, pay cash dividends or repurchase shares of common stock, subject to regulatory restrictions. Somerset Regal Bank intends to invest the proceeds it receives for investment in short-term liquid investments and, at a later date, anticipates using a portion of the proceeds it receives to fund new loans, purchase securities and expand its business activities. SR Bancorp and Somerset Regal Bank may also use the proceeds of the offering to diversify their businesses and acquire other companies, although we have no specific plans to do so at this time other than our proposed Merger with Regal Bancorp.

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Possible Change in the Offering Range

RP Financial will update its appraisal before we complete the offering. If, as a result of demand for the shares, regulatory considerations, or changes in market conditions, RP Financial determines that our pro forma market value has increased, we may sell up to 13,225,000 shares in the offering without further notice to you. If our pro forma market value of the offering at that time is either below $85.0 million or above $132.25 million, then, after consulting with Federal Reserve, the NJDBI and the FDIC we may:

• terminate the stock offering and promptly return all funds;

• set a new offering range and give all subscribers the opportunity to confirm, modify or rescind their purchase orders for shares of SR Bancorp’s common stock; or

• take such other actions as may be permitted by Federal Reserve, the NJDBI, the FDIC and the Securities and Exchange Commission (the “SEC”).

If we set a new offering range, we will promptly return funds, with interest at 0.05% for funds received in the offering, cancel deposit account withdrawal authorizations and commence a resolicitation. In connection with the resolicitation, we will notify subscribers of their right to place a new stock order for a specified period of time.

Possible Termination of the Offering

We must sell a minimum of 8,500,000 shares to complete the offering. If we terminate the offering because we fail to sell the minimum number of shares or for any other reason, we will promptly return your funds with interest at our passbook savings rate and we will cancel deposit account withdrawal authorizations. If we terminate the offering, we will also terminate the Merger.

Conditions to Completing the Offering

We are conducting the offering under the terms of our plan of conversion from mutual to stock form of organization. We cannot complete the offering unless:

• we sell at least the minimum number of shares offered;

• we receive approval of our voting members; and

• we receive the final regulatory approval to complete the offering and to form SR Bancorp to become the bank holding company of Somerset Savings Bank.

Federal Reserve, NJDBI or FDIC approval does not constitute a recommendation or endorsement of an investment in our stock.

We Will Form Somerset Regal Charitable Foundation

To further our commitment to the communities we serve, we intend to establish a charitable foundation to be named “Somerset Regal Charitable Foundation, Inc.” as part of the conversion and stock offering. The charitable foundation will be dedicated exclusively to supporting charitable causes and community development activities in the communities in which we operate. Assuming we receive approval of our voting members to establish the charitable foundation, we will contribute cash ranging from $850,000 at the minimum of the valuation range to $1,322,500 at the adjusted maximum of the valuation range and shares of our common stock (which, together, represents 6.0% of the value of the common stock issued in the offering). The number of shares contributed to our charitable foundation will range from 425,000 shares at the minimum of the valuation range to 661,250 shares at the adjusted maximum of the valuation range, which shares will have a value of $4.3 million at the minimum of the valuation range and $6.6 million at the adjusted maximum of the valuation range, based on the $10.00 per share offering price. As a result of the issuance of shares and the contribution of cash to the charitable foundation, we will record an after-tax expense of approximately $3.8 million at the minimum of the valuation range and of approximately $6.0 million at the adjusted maximum of the valuation range, during the quarter in which the conversion and offering are completed.

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Issuing shares of common stock to the charitable foundation will:

• dilute the voting interests of purchasers of shares of our common stock in the stock offering; and

• result in an expense, and a reduction in earnings, during the quarter in which the contribution is made, equal to the full amount of the contribution to the charitable foundation, offset in part by a corresponding tax benefit.

The establishment and funding of the charitable foundation has been approved by the Board of Directors of SR Bancorp and Somerset Savings Bank and is subject to approval by Somerset Savings Bank’s voting members. If the voting members do not approve the charitable foundation, we may, in our discretion, complete the conversion and offering without the inclusion of the charitable foundation and without resoliciting subscribers. We may also determine, in our discretion, not to complete the conversion and offering if the voting members do not approve the establishment and funding of the charitable foundation.

The amount of common stock that we would offer for sale would be greater if the offering were to be completed without the formation of Somerset Regal Charitable Foundation. For a further discussion of the financial impact of the charitable foundation, including its effect on those who purchase shares in the offering and on the shares issued to shareholders of SR Bancorp, see “Risk Factors—The Contribution to the Charitable Foundation Will Dilute Your Ownership Interest and Adversely Affect Net Income in 2023” and “Comparison of Independent Valuation and Pro Forma Financial Information With and Without the Foundation.”

Benefits of the Offering to Management and Potential Dilution to Shareholders Following the Conversion

We intend to adopt the benefit plans described below, which will result in additional compensation expense. The actual expense will depend on the market value of SR Bancorp’s common stock. As indicated under “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Proposed Merger,” based upon assumptions set forth therein, the annual pre-tax expense related to the employee stock ownership plan and the stock-based benefit plan (including stock options and stock awards) would be $600,000 and $2.5million, respectively, assuming shares are sold in the offering at the adjusted maximum of the offering range and shares have a value of $10.00 per share. See “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Proposed Merger” for a detailed analysis of the expenses of each of these plans.

Employee Stock Ownership Plan. We intend to establish an employee stock ownership plan that will purchase shares equal to 8.0% of the total shares of common stock issued in the stock offering, including shares contributed to the charitable foundation, or 966,000 shares of common stock, assuming we sell the maximum number of the shares in the offering. This plan is a tax-qualified retirement plan for the benefit of all our employees. Purchases by the employee stock ownership plan will be included in determining whether the required minimum number of shares has been sold in the offering. The employee stock ownership plan will use the proceeds from a 20-year loan from SR Bancorp to purchase these shares. As the loan is repaid and shares are released from collateral, the shares will be allocated to the accounts of employee participants. Allocations will be based on a participant’s compensation as a percentage of total plan compensation. Non-employee directors are not eligible to participate in the employee stock ownership plan. Assuming the employee stock ownership plan purchases 966,000 shares in the offering, we will recognize additional pre-tax compensation expense of $9.7 million over a 20-year period, assuming the shares of common stock have a fair market value of $10.00 per share. If, in the future, the shares of common stock have a fair market value greater or less than $10.00, the compensation expense will increase or decrease accordingly. See “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Proposed Merger” for an illustration of the effects of this plan.

Stock-Based Benefit Plan. In addition to shares purchased by the employee stock ownership plan, we intend to grant stock options and stock awards under one or more stock-based benefit plans that we intend to implement no sooner than six months after the completion of the conversion and related stock offering. Shareholder approval of these plans will be required. If adopted within 12 months following the completion of the conversion and related stock offering, the stock-based benefit plan will reserve shares of restricted stock and stock options equal to 4.0% and 10.0% of the shares issued in the offering, respectively, including shares contributed to our charitable foundation, or up to 483,000 shares and 1,207,500 shares of common stock at the maximum of the offering range,

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respectively, for awards to employees and directors, at no cost to the recipients. If the stock-based benefit plan is adopted after one year from the date of the completion of the conversion and related stock offering, the 4.0% and 10.0% limitations described above will no longer apply. We have not yet determined whether we will present any such plan for shareholder approval before or after 12 months following the completion of the conversion and related stock offering.

The following additional restrictions would apply to our stock-based benefit plan only if such plan is adopted within one year after the conversion and offering:

• non-employee directors in the aggregate may not receive more than 30% of the options and shares of restricted common stock authorized under the plan;

• no non-employee director may receive more than 5% of the options and shares of restricted common stock authorized under the plan;

• no individual may receive more than 25% of the options and shares of restricted common stock authorized under the plan;

• options and shares of restricted common stock may not vest more rapidly than 20% per year, beginning on the first anniversary of stockholder approval of the plan; and

• accelerated vesting is not permitted except for death, disability or upon a change in control of Somerset Regal Bank or SR Bancorp.

The following table summarizes the stock benefits that our officers, directors and employees may receive following the conversion, at the adjusted maximum of the offering range and assuming that our employee stock ownership plan purchases 8.0% of the common stock issued in the offering (including shares contributed to the charitable foundation) and that we implement a stock-based benefit plan granting options to purchase 10.0% of the total shares of common stock of SR Bancorp issued in connection with the offering (including shares contributed to the charitable foundation) and awarding shares of restricted common stock equal to 4.0% of the total shares of common stock of SR Bancorp issued in connection with the offering (including shares contributed to the charitable foundation).

Plan	Individuals Eligible to Receive Awards		As a Percent of Common Stock Outstanding			Value of Benefits Based on Adjusted Maximum of Offering Range (Dollars in Thousands)
Employee stock ownership plan		All employees		8.0	%	$	11,109
Stock awards		Directors, officers and employees		4.0			5,555
Stock options		Directors, officers and employees		10.0			6,971	(1)
Total				22.0	%	$	23,635

(1) The actual value of restricted stock grants will be determined based on their fair value as of the date grants are made. Fair value is assumed to be the same as the offering price of $10.00 per share. The fair value of stock options has been estimated at $5.02 per option using the Black-Scholes option pricing model with the following assumptions: a grant-date share price and option exercise price of $10.00; dividend yield of 0%; an expected option life of 10 years; a risk free interest rate of 3.88%; and a volatility rate of 31.47% based on an index of publicly traded bank and thrift institutions. The actual expense of the stock option plan will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted which may or may not be Black-Scholes.

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The value of the shares of common stock will be based on the price per share of our common stock at the time those shares are granted. The following table presents the total value of all shares of common stock to be available for award and issuance under the stock-based benefit plan, assuming the stock-based benefit plan award shares of common stock equal to 4.0% of the common stock issued in the offering, including shares contributed to the charitable foundation, and the shares for the plans are purchased or issued in a range of market prices from $8.00 per share to $14.00 per share.

Share Price	357,000 Shares Awarded at Minimum of Offering Range	420,000 Shares Awarded at Midpoint of Offering Range	483,000 Shares Awarded at Maximum of Offering Range	555,450 Shares Awarded at Maximum of Offering Range, As Adjusted
(In thousands, except share price information)
$8.00	2,856	3,360	3,864	4,444
10.00	3,570	4,200	4,830	5,555
12.00	4,284	5,040	5,796	6,665
14.00	4,998	5,880	6,762	7,776

The grant-date fair value of the options granted under the stock-based benefit plan will be based, in part, on the price per share of our common stock at the time the options are granted. The value will also depend on the various assumptions utilized in the option-pricing model ultimately adopted. The following table presents the total estimated value of the options to be available for grant under the stock-based benefit plan, assuming the stock-based benefit plan awards options equal to 10.0% of the outstanding shares of common stock after completion of the conversion and related stock offering, including shares contributed to the foundation, assuming the range of market prices for the shares are $8.00 per share to $14.00 per share at the time of the grant. The Black-Scholes option pricing model provides an estimate only of the fair value of the options. The actual value of the options may differ significantly from the value set forth in the table.

Exercise Price	Grant-Date Fair Value Per Option	892,500 Options at Minimum of Offering Range	1,050,000 Options at Midpoint of Offering Range	1,207,500 Options at Maximum of Offering Range	1,388,625 Options at Maximum of Offering Range, As Adjusted
(In thousands, except share price information)
$8.00	4.02	3,588	4,221	4,854	5,582
10.00	5.02	4,480	5,271	6,062	6,971
12.00	6.02	5,373	6,321	7,269	8,360
14.00	7.03	6,274	7,382	8,489	9,762

Tax Consequences

Somerset Savings Bank and SR Bancorp have received an opinion of counsel, Luse Gorman, PC, regarding the material federal income tax consequences of the conversion, including an opinion that it is more likely than not that the fair market value of the non-transferable subscription rights to purchase the common stock will be zero and, accordingly, no gain or loss will be recognized by members upon the distribution to them of the non-transferable subscription rights to purchase the common stock and no taxable income will be realized by members as a result of the exercise of the nontransferable subscription rights. Somerset Savings Bank and SR Bancorp have also received an opinion of Baker Tilly US, LLP regarding the material New Jersey state tax consequences of the conversion. As a general matter, the conversion will not be a taxable transaction for purposes of federal or state income taxes to Somerset Savings Bank, SR Bancorp, or persons eligible to subscribe in the subscription offering. See the section of this prospectus entitled “Taxation” for additional information regarding taxes.

Persons Who Can Order Stock in the Offering

We have granted rights to subscribe for shares of SR Bancorp common stock in a “subscription offering” to the following persons in the following order of priority:

1. Persons with $50 or more on deposit at Somerset Savings Bank as of the close of business on June 30, 2021 (“Eligible Account Holders”).

2. The tax-qualified employee benefit plans of Somerset Savings Bank (including our employee stock ownership plan and 401(k) plan).

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3. Persons with $50 or more on deposit at Somerset Savings Bank as of the close of business on [•], 2023 (“Supplemental Eligible Account Holders”).

4. Persons with a deposit account at Somerset Savings Bank at the close of business on the [Voting Record Date] (“Voting Members”).

If we receive subscriptions for more shares than are to be sold in this stock offering, we may be unable to fill or may only partially fill your order. Shares will be allocated in order of the priorities described above under a formula outlined in the plan of conversion. See “The Conversion and Stock Offering—Subscription Offering and Subscription Rights” for a description of the allocation priorities and procedures.

We may offer shares not sold in the subscription offering to the general public in a “community offering” that can begin concurrently with, during or immediately following the subscription offering. Orders received in the community offering will be subordinate to subscription offering orders. Natural persons and trustees of natural persons residing in the following counties in the State of New Jersey: Hunterdon, Middlesex and Somerset will have first preference to purchase shares in the community offering and remaining shares will be available to the general public. Shares of common stock not purchased in the subscription offering or the community offering may be offered for sale through a “syndicated community offering” managed by KBW. We have the right to accept or reject, in whole or in part, in our sole discretion, orders we receive in the community offering and syndicated community offering.

You May Not Sell or Transfer Your Subscription Rights

Applicable regulations prohibit you from transferring your subscription rights. If you order shares of common stock in the subscription offering, you will be required to certify that you are purchasing the common stock for yourself and that you have no agreement or understanding to sell or transfer your subscription rights or the shares that you are purchasing. We intend to take legal action, including reporting persons to federal or state agencies, against anyone who we believe has sold or transferred his or her subscription rights. We will not accept your order if we have reason to believe you have sold or transferred your subscription rights. On the stock order form, you cannot add the names of others for joint stock registration who do not have subscription rights or who qualify only in a lower subscription offering priority than you do. Doing so may jeopardize your subscription rights. You may only add those who were eligible to purchase shares of common stock in the subscription offering at your date of eligibility. In addition, the stock order form requires that you list all deposit accounts, giving all names on each account and the account number at the applicable eligibility date. Failure to provide this information, or providing incomplete or incorrect information, may result in a loss of part or all of your share allocation if there is an oversubscription.

How to Purchase Common Stock

In the subscription offering and the community offering, you may pay for your shares by:

1. Personal check, bank check or money order, from the purchaser, made payable directly to SR Bancorp; or

2. authorizing us to withdraw available funds (without any early withdrawal penalty) from your Somerset Savings Bank deposit account(s), other than checking accounts or individual retirement accounts (“IRAs”). To use funds from accounts with check writing privileges, please submit a check. To use IRA funds, please see “—Using IRA Funds to Purchase Shares in the Offering” below.

Somerset Savings Bank is not permitted to knowingly lend funds (including funds drawn on a Somerset Savings Bank line of credit) to anyone for the purpose of purchasing shares of common stock in the offering. Also, payment may not be made by cash or wire transfer. Additionally, you may not use any type of third party check to pay for shares of common stock.

Checks and money orders will be immediately cashed, so the funds must be available within the account when we receive your original stock order form and check. The funds will be deposited by us into a Somerset Savings Bank segregated account, or at our discretion, at another insured depository institution. We will pay interest at Somerset Savings Bank’s passbook savings rate from the date those funds are processed until completion or

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termination of the offering. Withdrawals from certificates of deposit at Somerset Savings Bank for the purpose of purchasing common stock in the offering may be made without incurring an early withdrawal penalty. All funds authorized for withdrawal from deposit accounts with Somerset Savings Bank must be available within the deposit accounts at the time the stock order form is received. A hold will be placed on the amount of funds designated on your stock order form. Those funds will be unavailable to you during the offering; however, the funds will not be withdrawn from the accounts until the stock offering is completed and will continue to earn interest at the applicable contractual deposit account rate until the completion of the stock offering. If, upon a withdrawal from a certificate of deposit account, the balance falls below the minimum balance requirement, the remaining funds will earn interest at the current passbook savings rate.

You may submit your original stock order form in one of three ways: (1) by mail, using the order reply envelope provided; (2) by paying for overnight courier to the address indicated on the stock order form; or (3) by hand delivery to Somerset Savings Bank’s office, located at 220 West Union Avenue, Bound Brook, New Jersey 08805. Stock order forms may not be hand-delivered to our banking offices. Our banking offices will not have offering materials on hand. Once submitted, your order is irrevocable. We are not required to accept copies or facsimiles of stock order forms.

Using IRA Funds to Purchase Shares in the Offering

You may be able to subscribe for shares of common stock using funds in your IRA, or other retirement account. If you wish to use some or all of the funds in your Somerset Savings Bank IRA or other retirement account, the applicable funds must be transferred to a self-directed account maintained by an independent trustee, such as a brokerage firm, and the purchase must be made through that account. If you do not have such an account, you will need to establish one before placing your stock order, which may require the payment of a one-time and/or annual administrative fee to the independent trustee. Because individual circumstances differ and the processing of retirement fund orders takes additional time, we recommend that you contact our Stock Information Center promptly, preferably at least two weeks before the [offering deadline] offering deadline, for assistance with purchases using your individual retirement account or other retirement account you may have at Somerset Savings Bank or elsewhere. Whether you may use such funds to purchase shares in the stock offering may depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

Purchase Limitations

The minimum number of shares of common stock that may be purchased is 25. Generally, no individual, or individuals exercising subscription rights through a single qualifying deposit account held jointly, may purchase more than 25,000 shares ($250,000) of common stock. If any of the following persons purchases shares of common stock, their purchases, when combined with your purchases, cannot exceed 25,000 shares ($250,000) in all categories of the offering, combined:

• Any person who is related by blood or marriage to you and who lives in your home;

• Companies or other entities in which you are an officer or partner or have a 10% or greater beneficial ownership interest;

• Trusts or other estates in which you have a substantial beneficial interest or as to which you serve as a trustee or in another fiduciary capacity; and

• Any other persons who may be your associates or persons acting in concert with you.

We may, in our sole discretion and without further notice to or solicitation of subscribers or other prospective purchasers, increase the maximum purchase limitation to 9.9% of the number of shares sold in the offering, provided that the total number of shares purchased by persons, their associates and those persons with whom they are acting in concert, to the extent such purchases exceed 5% of the shares sold in the offering, shall not exceed, in the aggregate, 10% of the total number of the shares sold in the offering.

Unless we determine otherwise, persons having the same address and persons exercising subscription rights through qualifying deposit accounts registered to the same address will be subject to this overall purchase limitation. We have the right to determine, in our sole discretion, whether prospective purchasers are “associates” or “acting in concert.”

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Subject to regulatory approval, we may increase or decrease the purchase limitations at any time. Our tax-qualified employee benefit plans, including our employee stock ownership plan, are authorized to purchase up to 10.0% of the shares issued in the offering, including shares contributed to our charitable foundation, without regard to these purchase limitations.

Delivery of Prospectus

To ensure that each person receives a prospectus at least 48 hours before the deadline for orders for common stock, we may not mail prospectuses any later than five days before such date or hand-deliver prospectuses later than two days before that date. Stock order forms may only be delivered if accompanied or preceded by a prospectus. We are not obligated to deliver a prospectus or stock order form by means other than U.S. mail. Execution of a stock order form will confirm receipt of delivery of a prospectus in accordance with SEC Rule 15c2-8.

We will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights. The subscription offering and all subscription rights will expire at 2:00 p.m., Eastern time, on [expiration date], whether or not we have been able to locate each person entitled to subscription rights.

Once Submitted, Your Stock Purchase Order May Not Be Revoked Except Under Certain Circumstances

Funds that you submit to purchase shares of our common stock in the stock offering will be held in a segregated account until the termination or completion of the offering, including any extension of the expiration date. Because completion of the conversion is subject to the receipt of all required regulatory approvals, including an update of the independent appraisal, among other factors, there may be one or more delays in the completion of the conversion. Any orders that you submit to purchase shares of our common stock in the offering are irrevocable, and you will not have access to subscription funds unless the offering is terminated, or extended beyond [extension date], or the number of shares to be sold in the stock offering is increased to more than 13,225,000 shares or decreased to fewer than 8,500,000 shares.

Purchases and Stock Elections by Directors and Executive Officers

We expect that our directors and executive officers, together with their associates, will subscribe for approximately 123,500 shares, which equals 1.4% of the total shares of SR Bancorp that would be outstanding following the stock offering at the minimum of the offering range, the contribution of shares of SR Bancorp stock to the charitable foundation. Our directors and executive officers will pay the same $10.00 per share price as everyone else who purchases shares in the stock offering. Like all of our eligible depositor purchasers, our directors and executive officers have subscription rights based on their deposits and, in the event of an oversubscription, their orders will be subject to the allocation provisions set forth in our plan of conversion. Purchases by our directors and executive officers will count towards the minimum number of shares we must sell to close the offering.

Market for SR Bancorp’s Common Stock

We have never issued capital stock and there is no established market for our common stock. We anticipate that our shares of common stock will be listed on the Nasdaq Capital Market under the symbol “SRBK.” KBW currently intends to become a market maker in the common stock, but it is under no obligation to do so.

SR Bancorp’s Dividend Policy

We have not determined whether we will pay dividends on shares of our common stock. After the offering, we will consider a policy of paying regular cash dividends. Our ability to pay dividends will depend on a number of factors, including capital requirements, regulatory limitations, tax considerations, general economic conditions and our operating results and financial condition. Initially, our ability to pay dividends will be limited to the net proceeds of the offering retained by SR Bancorp and earnings from the investment of such proceeds. At the maximum of the offering range, SR Bancorp will retain approximately $44.9 million of the net offering proceeds. Additionally, Somerset Savings Bank could dividend cash to SR Bancorp, subject to regulatory limitations described in more detail in “Our Dividend Policy.”

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Restrictions on the Acquisition of SR Bancorp and Somerset Savings Bank

Federal regulations, as well as provisions contained in the certificate of incorporation, articles of incorporation and bylaws of SR Bancorp and Somerset Savings Bank restrict the ability of any person, firm or entity to acquire SR Bancorp, Somerset Savings Bank, or their respective capital stock. These restrictions include the requirement that a potential acquirer of common stock obtain the prior approval of the Federal Reserve, the FDIC and/or the NJDBI before acquiring in excess of 10% of the voting stock of SR Bancorp or Somerset Savings Bank, as well as a provision in SR Bancorp’s articles of incorporation that provides that any shares acquired in excess of 10% of the voting stock of SR Bancorp would not be entitled to be voted and would not be counted as voting stock in connection with any matters submitted to the shareholders for a vote. Under regulations applicable to the conversion, for a period of three years following completion of the conversion, no person may acquire beneficial ownership of more than 10% of our common stock without prior approval of the Federal Reserve.

Steps We May Take if We Do Not Receive Orders for the Minimum Number of Shares

If we do not receive orders for at least 8,500,000 shares of common stock, we may take several steps to sell the minimum number of shares of common stock in the offering range. Specifically, we may:

• increase the purchase limitations;

• seek regulatory approval to extend the stock offering beyond [extension date], so long as we resolicit subscribers who previously submitted subscriptions in the stock offering; and/or

• reduce the valuation and offering range, provided that any such extension or reduction will require us to resolicit subscriptions received in the offering and provide subscribers with the opportunity to increase, decrease or cancel their subscriptions.

If we extend the offering past [extension date], all subscribers will be notified and given an opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will cancel your stock order and promptly return your funds with interest for funds received in the subscription and community offering or cancel your deposit account withdrawal authorization. If one or more purchase limitations are increased, subscribers in the subscription offering who ordered the maximum amount and checked the box on the stock order form, will be, and, in our sole discretion, some other large purchasers may be, given the opportunity to increase their subscriptions up to then-applicable limit. If the number of shares to be sold in the stock offering is increased to more than 13,225,000 shares or decreased to less than 8,500,000 shares, we will resolicit subscribers, and all funds delivered to us to purchase shares of common stock in the subscription and community offerings will be returned promptly with interest.

Delivery of Shares of Common Stock

All shares of common stock sold will be issued in book entry form. Stock certificates will not be issued. A statement reflecting ownership of shares of common stock issued in the subscription and community offerings will be mailed by our transfer agent to the persons entitled thereto at the registration address noted by them on their stock order forms as soon as practicable following consummation of the conversion and related stock offering. We expect trading in the stock to begin on the day of completion of the conversion and related stock offering or the next business day. Until a statement reflecting ownership of shares of common stock is available and delivered to purchasers, purchasers might not be able to sell the shares of common stock that they ordered, even though the shares of common stock will have begun trading. Your ability to sell the shares of common stock before receiving your statement will depend on arrangements you may make with a brokerage firm.

Emerging Growth Company Status

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as we are an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies.

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See “Risk Factors—Risks Related to the Offering—We are an emerging growth company and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors” and “Regulation and Supervision—Emerging Growth Company Status.”

An emerging growth company may elect to use an extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the company is first required to file a registration statement. Such an election is irrevocable during the period a company is an emerging growth company. We have elected to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.

Important Risks in Owning SR Bancorp, Inc.’s Common Stock

An investment in our common stock involves substantial risks and uncertainties. Investors should carefully consider all of the information in this prospectus, including the detailed discussion of these and other risks under “Risk Factors” beginning on page 19, before investing in our common stock. Some of the more significant risks include the following:

• The COVID-19 pandemic could continue to pose risks to our business, our results of operations and the future prospects of SR Bancorp;

• Regulatory approvals for the proposed Merger may not be received, may take longer than expected, or may impose conditions that are not presently anticipated, cannot be met or that could have an adverse effect on the resulting company following the Merger;

• The Merger Agreement may be terminated in accordance with its terms and the proposed Merger may not be completed;

• Somerset Savings Bank may be unable to effectively integrate Regal Bank’s operations;

• We could potentially recognize goodwill impairment charges after the proposed Merger;

• Unanticipated costs related to the Merger could reduce SR Bancorp’s future earnings;

• A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings;

• An economic recession could result in increases in our level of non-performing loans and/or reduce demand for our products and services, which would lead to lower revenue, higher loan losses and lower earnings;

• The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in our local market area;

• Changes in interest rates or the shape of the yield curve may adversely affect our profitability and financial condition;

• Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively;

• New lines of business or new products and services may subject us to additional risks;

• Almost all of our loans are secured by real estate, and a downturn in the local real estate market could negatively impact our profitability;

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• Our, and Regal Bank’s, reliance on third parties to originate certain loans may negatively impact our financial results if such relationships are discontinued;

• Because we intend to increase our multi-family and commercial real estate and commercial loan originations, our lending risk will increase;

• If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings and capital could decrease;

• If our non-performing assets increase, our earnings will be adversely affected;

• Strong competition within our market area may limit our growth and profitability;

• We face significant operational risks because the nature of the financial services business involves a high volume of transactions;

• Cyber-attacks or other security breaches could adversely affect our operations, net income or reputation;

• Risks associated with system failures, interruptions, or breaches of security could negatively affect our earnings;

• The cost of additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements will increase our expenses;

• We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance;

• Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses;

• Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations;

• Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions;

• Monetary policies and regulations of the Federal Reserve could adversely affect our business, financial condition and results of operations;

• We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors;

• We are also a smaller reporting company, and even if we no longer qualify as an emerging growth company, any decision on our part to comply only with certain related reporting and disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors;

• Changes in accounting standards could affect reported earnings;

• Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results;

• The future price of the shares of common stock may be less than the $10.00 purchase price per share in the stock offering;

• Our failure to effectively deploy the net proceeds from the offering may have an adverse effect on our financial performance;

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• Our return on equity will be low following the stock offering. This could negatively affect the trading price of our shares of common stock;

• Our stock-based benefit plan will increase our expenses and reduce our income;

• The implementation of our stock-based benefit plan may dilute your ownership interest;

• Various factors may make takeover attempts more difficult to achieve;

• There may be a limited trading market in our shares of common stock, which would hinder your ability to sell our common stock and may lower the market price of our common stock;

• You may not revoke your decision to purchase SR Bancorp common stock in the subscription or community offerings after you send us your order;

• The distribution of subscription rights could have adverse income tax consequences;

• The contribution to the charitable foundation will dilute your ownership interest and adversely affect net income in 2023; and

• Our contribution to the charitable foundation may not be tax deductible, which could reduce our profits.

How You Can Obtain Additional Information—Stock Information Center

Our banking personnel may not, by law, assist with investment-related questions about the stock offering. If you have any questions regarding the conversion or offering, please call our Stock Information Center toll free, at [Stock center number]. The Stock Information Center is open Monday through Friday between 10:00 a.m. and 4:00 p.m., Eastern time. The Stock Information Center will be closed on bank holidays.

Following the Completion of the Conversion and Related Stock Offering, Shares of Regal Bancorp Common Stock Will be Exchanged for $23.00 in Cash

Following the completion of the conversion and related stock offering and upon the completion of the proposed Merger, each outstanding share of Regal Bancorp common stock will automatically be converted into the right to receive $23.00 in cash.

Conditions to Completing the Proposed Merger

We cannot complete the proposed Merger unless:

• the conversion and stock offering are completed;

• we receive the approval of the NJDBI, the FDIC and Federal Reserve (or the waiver of any required notice or application); and

• Regal Bancorp’s shareholders approve the Merger Agreement.

SR Bancorp intends to conduct its offering at the same time Regal Bancorp is soliciting the approval of the proposed Merger from its shareholders and Somerset Savings Bank is soliciting the approval of the offering from its voting members. The failure to complete the offering will result in the termination of the proposed Merger, but the failure to complete the proposed Merger will not necessarily result in the termination of the offering, but would mostly likely require the establishment of a new offering range and require a resolicitation of subscribers if SR Bancorp determined to complete the offering under these circumstances.

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RISK FACTORS

You should consider carefully the following risk factors in evaluating an investment in the shares of common stock.

Risks Related to COVID-19

The COVID-19 pandemic could continue to pose risks to our business, our results of operations and the future prospects of SR Bancorp.

The COVID-19 pandemic has adversely impacted the global and national economy and certain industries and geographies in which our clients operate. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on the business of SR Bancorp, its clients, employees and third-party service providers. The extent of such impact will depend on future developments, which are highly uncertain. Additionally, the responses of various governmental and non-governmental authorities and consumers to the pandemic may have material long-term effects on SR Bancorp and its clients which are difficult to quantify in the near-term or long-term.

Risks Related to the Proposed Merger

Regulatory approvals for the proposed Merger may not be received, may take longer than expected, or may impose conditions that are not presently anticipated, cannot be met or that could have an adverse effect on the resulting company following the Merger.

Before the Merger and the bank merger may be completed, SR Bancorp and Regal Bancorp must obtain certain regulatory approvals. The approvals could be delayed or not obtained at all and, if they are granted, may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the resulting company’s business or require changes to the terms of the transactions contemplated by the Merger Agreement. Any such conditions, limitations, obligations or restrictions could delay or prevent the completion of the transactions contemplated by the Merger Agreement, impose additional material costs on or materially limit the revenues of the resulting company following the Merger or otherwise reduce the anticipated benefits of the Merger.

The Merger Agreement may be terminated in accordance with its terms and the proposed Merger may not be completed.

The Merger Agreement is subject to a number of conditions which must be fulfilled in order to complete the proposed Merger. These conditions include, but are not limited to, (i) approval by Regal Bancorp shareholders and Somerset Savings Bank voting members, (ii) the receipt of all regulatory approvals, (iii) the absence of any order, decree, injunction or proceeding by a governmental entity that prohibits the proposed Merger being in effect, and no law, statute, rule or regulation having been enacted, promulgated or enforced by any governmental entity which would prohibit the completion of the proposed Merger and (iv) certain other customary closing conditions. These conditions to completing the proposed Merger may not be fulfilled in a timely manner or at all, and, accordingly, the proposed Merger may not be completed. In addition, the parties can mutually decide to terminate the Merger Agreement at any time and may elect to terminate the Merger Agreement in certain other circumstances.

SR Bancorp intends to conduct its offering at the same time Regal Bancorp is soliciting the approval of the proposed Merger from its shareholders and Somerset Savings Bank is soliciting the approval of the offering from its voting members. The failure to complete the offering will result in the termination of the proposed Merger, but the failure to complete the proposed Merger will not necessarily result in the termination of the offering, but would mostly likely require the establishment of a new offering range and require a resolicitation of subscribers if SR Bancorp determined to complete the offering under these circumstances.

Somerset Savings Bank may be unable to effectively integrate Regal Bank’s operations.

The proposed Merger involves the integration of Regal Bank into Somerset Savings Bank. The difficulties of integrating the operations of these two institutions include, among other things:

• integrating personnel with diverse business backgrounds;

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• combining different corporate cultures; and

• retaining key employees.

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of SR Bancorp, Somerset Savings Bank, and Regal Bank and the loss of key personnel. The integration of Regal Bank will require the experience and expertise of certain key employees of Regal Bank who are expected to be retained by Somerset Savings Bank. However, there can be no assurances that Somerset Savings Bank will be successful in retaining these employees for the period necessary to successfully integrate Regal Bank’s operations. The diversion of management’s attention and any delays or difficulties encountered in connection with the proposed Merger, along with Regal Bank’s integration, could have an adverse effect on the business and results of operations of Regal Bancorp and SR Bancorp.

We could potentially recognize goodwill impairment charges after the proposed Merger and conversion.

Our merger with Regal Bancorp will be accounted for using the purchase method of accounting. In accordance with applicable accounting principles, SR Bancorp estimates that, as a result of the proposed Merger, total intangible assets of $32.1 million, including goodwill totaling $23.9 million, will be recorded under Statement of Financial Accounting Standard No. 142 (“SFAS No. 142”). As a result, at the maximum of the offering range, goodwill will equal approximately 10.4% of the $229.2 million of pro forma consolidated total shareholders’ equity at December 31, 2022. Pursuant to the provisions of SFAS No. 142, SR Bancorp will annually review the fair value of its investment in Regal Bancorp to determine that such fair value equals or exceeds the carrying value of its investment, including goodwill. If the fair value of our investment in Regal Bancorp does not equal or exceed its carrying value, we will be required to record goodwill impairment charges, which may adversely affect our future earnings. The fair value of a banking franchise can fluctuate downward based on a number of factors that are beyond management’s control, e.g. adverse trends in interest rates and increased loan losses. If our banking franchise value declines after consummation of the conversion and the proposed Merger, there may be goodwill impairment charges to operations, which would adversely affect our future earnings.

Unanticipated costs relating to the proposed Merger could reduce SR Bancorp’s future earnings.

Somerset Savings Bank and SR Bancorp believe they have reasonably estimated the likely costs of integrating the operations of Regal Bancorp and Regal Bank and the incremental costs of operating as a combined company. However, it is possible that unexpected transaction costs such as taxes, fees, professional expenses or unexpected future operating expenses, such as increased personnel costs or increased taxes, as well as other types of unanticipated adverse developments, could have a material adverse effect on the results of operations and financial condition of SR Bancorp and/or Somerset Savings Bank after the proposed Merger. If unexpected costs are incurred, the proposed Merger could have a dilutive effect on SR Bancorp’s earnings. In other words, if the proposed Merger is completed and SR Bancorp and/or Somerset Savings Bank incurs unexpected costs and expenses as a result of the proposed Merger, SR Bancorp’s earnings could be less than anticipated.

Risks Related to Economic Conditions

A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings.

Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans. A deterioration in economic conditions, especially local conditions, could have the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations, and could more negatively affect us compared to a financial institution that operates with more geographic diversity:

• demand for our products and services may decline;

• loan delinquencies, problem assets and foreclosures may increase;

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• collateral for loans, especially real estate, may decline in value, thereby reducing customers’ future borrowing power, and reducing the value of assets and collateral associated with existing loans; and

• the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.

Moreover, a significant decline in general economic conditions caused by inflation, recession, acts of terrorism, civil unrest, an outbreak of hostilities or other international or domestic calamities, an epidemic or pandemic, unemployment or other factors beyond our control could further impact these local economic conditions and could further negatively affect the financial results of our banking operations. In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance.

An economic recession could result in increases in our level of non-performing loans and/or reduce demand for our products and services, which would lead to lower revenue, higher loan losses and lower earnings.

Our business activities and earnings are affected by general business conditions in the United States and in our local market area. These conditions include short-term and long-term interest rates, inflation, unemployment levels, real estate values, monetary supply, consumer confidence and spending, fluctuations in both debt and equity capital markets, and the strength of the economy in the United States generally and in our market area in particular. If the national economy experiences a recession, which might include rising unemployment levels, declines in real estate values and/or an erosion in consumer confidence, the ability of our borrowers to repay their loans in accordance with their terms could be impaired. Nearly all of our loans are secured by real estate or made to businesses in the counties in which we have offices in New Jersey. As a result of this concentration, a prolonged or more severe downturn in the local economy, could result in significant increases in non-performing loans, negatively impacting our interest income and resulting in higher provisions for loan losses. An economic downturn could also result in reduced demand for credit, which would lessen our revenues.

The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in our local market area.

Our loan portfolio is concentrated primarily in North Central New Jersey. This makes us vulnerable to a downturn in the local economy and real estate markets, although our local market area has not experienced any recent material declines in real estate value, nor have we experienced a material increase in the number of foreclosures during the preceding twelve months. Adverse conditions in the local economy such as unemployment, recession, a catastrophic event or other factors beyond our control could impact the ability of our borrowers to repay their loans, which could impact our net interest income. Decreases in local real estate values caused by economic conditions, changes in tax laws or other events could adversely affect the value of the property used as collateral for our loans, which could cause us to realize a loss in the event of a foreclosure. Further, deterioration in local economic conditions could increase our allowance for loan losses, which in turn could necessitate an increase in our provision for loan losses and a resulting reduction to our earnings and capital.

Risks Related to Interest Rates

Changes in interest rates or the shape of the yield curve may adversely affect our profitability and financial condition.

We derive our income mainly from the difference or spread between the interest earned on loans, securities and other interest-earning assets and the interest paid on deposits, borrowings and other interest-bearing liabilities. In general, the larger the spread, the more we earn. When market interest rates change, the interest we receive on our assets and the interest we pay on our liabilities will fluctuate. This can cause decreases in our spread and can adversely affect our income.

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In response to rising inflation, the Federal Reserve’s Federal Open Market Committee has significantly increased market interest rates, with the expectation of continued market interest rates increases. Our net interest spread and net interest margin may have decreased and may continue to decrease due to potential increases in our cost of funds that may outpace any increases in our yield on interest-earnings assets. The rates we earn on our assets and the rates we pay on our liabilities are generally fixed for a contractual period of time. Like many financial institutions, our liabilities generally have shorter contractual maturities than our assets. This is exacerbated due to our historical focus on one- to four-family residential real estate loans, the substantial majority of which have fixed interest rates. This imbalance can create significant earnings volatility because market interest rates change over time. In a period of rising interest rates, the interest income we earn on our assets may not increase as rapidly as the interest we pay on our liabilities. For example, during the six month periods ended December 31, 2022 and 2021, Somerset Savings Bank experienced an increase in certificates of deposits and a decrease in lower-cost savings accounts reflecting the decision of many depositors to take advantage of increased interest rates being paid on certificates of deposits. In addition, the estimated fair value of the available-for-sale debt securities portfolio may change depending changes in interest rates, among other factors. Stockholders’ equity is increased or decreased by the amount of the change in the unrealized gain or loss (difference between the estimated fair value and the amortized cost) of the available-for-sale debt securities portfolio, under the category of accumulated other comprehensive income (loss). During the six months ended December 31, 2022 and the year ended June 30, 2022, we incurred other comprehensive losses of $1.1 million and $5.6 million, respectively, related to net changes in unrealized holding losses in the available-for-sale investment securities portfolio. Interest rates also affect how much money we lend. For example, when interest rates rise, the cost of borrowing increases and loan originations tend to decrease. In addition, changes in interest rates can affect the average life of loans and securities. For example, an increase in interest rates generally results in decreased prepayments of loans and mortgage-backed securities, as borrowers are less likely to refinance their debt. Changes in market interest rates also impact the value of our interest-earning assets and interest-bearing liabilities. In particular, the unrealized gains and losses on securities available for sale are reported, net of tax, in accumulated other comprehensive income, which is a component of shareholders’ equity. Consequently, declines in the fair value of these instruments resulting from changes in market interest rates have, and may continue to, adversely affect shareholders’ equity.

Risks Related to Growth

Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.

Our business strategy includes growth in assets, deposits and the scale of our operations. Achieving our growth targets will require us to attract customers that currently bank at other financial institutions in our market, thereby increasing our share of the market, and to expand the size of our market area. Our ability to successfully grow will depend on a variety of factors, including our ability to attract and retain experienced bankers, the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market area and our ability to manage our growth. Growth opportunities may not be available or we may not be able to manage our growth successfully. If we do not manage our growth effectively, our financial condition and operating results could be negatively affected. Furthermore, there can be considerable costs involved in expanding lending capacity, and generally a period of time is required to generate the necessary revenues to offset these costs, especially in areas in which we do not have an established presence. Accordingly, any such business expansion can be expected to negatively impact our earnings until certain economies of scale are reached.

New lines of business or new products and services may subject us to additional risks.

From time to time, we may implement new lines of business or offer new products and services within existing lines of business. In addition, we will continue to invest in research, development, and marketing for new products and services. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources. Initial timetables for the development and introduction of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible. Furthermore, if customers do not perceive our new offerings as providing significant value, they may fail to accept our new products and services. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. Furthermore, the burden on management and our information technology in introducing any new line of business and/or new product or service could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, financial condition and results of operations.

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Risks Related to Lending Activities

Almost all of our loans are secured by real estate, and a downturn in the local real estate market could negatively impact our profitability.

At December 31, 2022, our entire total loan portfolio was secured by real estate, most of which is located in our primary lending market area of Hunterdon, Middlesex and Somerset Counties, New Jersey and surrounding areas. Future declines in real estate values in our primary lending markets and surrounding markets because of an economic downturn could significantly impair the value of the particular collateral securing our loans and our ability to sell the collateral upon foreclosure for an amount necessary to satisfy the borrower’s obligations to us. This could require us to increase our allowance for loan losses to address the decrease in the value of the real estate securing our loans, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Unlike larger financial institutions that are more geographically diversified, our profitability depends primarily on the general economic conditions in our primary market area. Local economic conditions have a significant impact on our residential real estate and other types of lending, including, the ability of borrowers to repay these loans and the value of the collateral securing these loans.

Moreover, a significant decline in general economic conditions, caused by inflation, acts of terrorism, an outbreak of hostilities or other international or domestic calamities or other factors beyond our control could further impact these local economic conditions and could further negatively affect our financial performance. In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance.

Our, and Regal Bank’s, reliance on third parties to originate certain loans may negatively impact our financial results if such relationships are discontinued.

We purchase residential mortgage loans from third-party brokers. Such purchases represented $63.4 million, or 71.0%, of our residential mortgage loan purchases and originations for the six months ended December 31, 2022. Similarly, Regal Bank relies on third-party brokers to refer to it multi-family real estate loans. Such referrals represented $18.4 million, or 48.8%, of Regal Bank’s multi-family loan originations at December 31, 2022 and $16.7 million, or 70.3%, of Regal Bank’s multi-family loan originations at December 31, 2021. These third parties are used to supplement the originations made by in-house staff. In each case, we and Regal Bank separately underwrite each loan before it is either purchased or closed. Should these broker relationships be discontinued or we or Regal Bank are otherwise unable to use these companies in the future, our ability to originate residential mortgage loans or multi-family real estate loans may be disrupted unless and until we are able to find a suitable replacement or have the capability to originate such loans through our lending staff. If we have to add more staff, our compensation expense would increase. Our income may be negatively affected if our residential mortgage lending or multi-family residential lending operations are disrupted.

Because we intend to increase our multi-family and commercial real estate and commercial loan originations, our lending risk will increase.

Multi-family and commercial real estate and commercial loans generally have more risk than residential mortgage loans. Because the repayment of multi-family and commercial real estate and commercial loans depends on the successful management and operation of the borrower’s properties or related businesses, repayment of such loans can be affected by adverse conditions in the real estate market or the local economy. Multi-family and commercial real estate and commercial loans may also involve relatively large loan balances to individual borrowers or groups of related borrowers. A downturn in the real estate market or the local economy could adversely impact the value of properties securing the loan or the revenues from the borrower’s business thereby increasing the risk of

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non-performing loans. Also, many multi-family and commercial real estate and commercial business borrowers can have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a residential mortgage loan. Further, unlike residential mortgages or multi-family and commercial real estate loans, commercial and industrial loans may be secured by collateral other than real estate, such as inventory and accounts receivable, the value of which may be more difficult to appraise, may be more susceptible to fluctuation in value at default, and may be more difficult to realize upon enforcement of our remedies. As our multi-family and commercial real estate and commercial loan portfolios increase, the corresponding risks and potential for losses from these loans may also increase.

If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings and capital could decrease.

We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for our loans. In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and we evaluate other factors including, among other things, current economic conditions. If our assumptions are incorrect, or if delinquencies or non-performing loans increase, our allowance for loan losses may not be sufficient to cover probable and incurred losses inherent in our loan portfolio, which would require additions to our allowance, that could materially decrease our net income. Our allowance for loan losses was 0.31% of total loans at December 31, 2022.

The Financial Accounting Standards Board has delayed the effective date of the implementation of Current Expected Credit Losses (“CECL”) standard. CECL will be effective for SR Bancorp on July 1, 2023. CECL will require financial institutions to determine periodic estimates of lifetime expected credit losses on loans, and recognize the expected credit losses as allowances for credit losses. This will change the current method of providing allowances for loan losses that are incurred or probable, which would likely require us to increase our allowance for credit losses, and to greatly increase the types of data we would need to collect and review to determine the appropriate level of the allowance for credit losses.

In addition, bank regulators periodically review our allowance for loan losses and, based on their judgments and information available to them at the time of their review, may require us to increase our allowance for loan losses or recognize further loan charge-offs. An increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities may reduce our net income and our capital, which may have a material adverse effect on our financial condition and results of operations.

If our non-performing assets increase, our earnings will be adversely affected.

At December 31, 2022, we had $150,000 in non-performing assets, which consisted of $150,000 in non-performing loans and no other real estate owned. Non-performing assets adversely affect our net income in various ways:

• we record interest income only on the cash basis or cost-recovery method for non-accrual loans and we do not record interest income for other real estate owned;

• we must provide for probable loan losses through a current period charge to the provision for loan losses;

• noninterest expense increases when we write down the value of properties in our other real estate owned portfolio to reflect changing market values;

• there are legal fees associated with the resolution of problem assets, as well as carrying costs, such as taxes, insurance, and maintenance fees; and

• the resolution of non-performing assets requires the active involvement of management, which can distract them from more profitable activity.

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If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our non-performing assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations.

Risks Related to Competition

Strong competition within our market area may limit our growth and profitability.

Competition in the banking and financial services industry is intense. In our market area, we compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere. Many of our competitors have greater name recognition, market presence and substantially more resources that benefit them in attracting business, and offer certain services that we do not or cannot provide. Our smaller asset size also makes it more difficult to compete, as many of our competitors are larger and can more easily afford to invest in the marketing and technologies needed to attract and retain customers. In addition, larger competitors may be able to price loans and deposits more aggressively than we do, which could affect our ability to grow and remain profitable on a long-term basis. Our profitability depends upon our continued ability to successfully compete in our market area. If we must raise interest rates paid on deposits or lower interest rates charged on our loans, our net interest margin and profitability could be adversely affected. Competition also makes it increasingly difficult and costly to attract and retain qualified employees. For additional information see “Business of SR Bancorp and Somerset Savings Bank—Competition.”

The financial services industry could become even more competitive as a result of continuing legislative, regulatory and technological changes and continued industry consolidation. Banks, securities firms and insurance companies can merge under the umbrella of a financial holding company, which can offer virtually any type of financial service, including banking, securities underwriting, insurance (both agency and underwriting) and merchant banking. Also, technology has lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems. Many of our competitors have fewer regulatory constraints and may have lower cost structures. Additionally, due to their size, many Competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services than we can as well as better pricing for those products and services.

Risks Related to Operations and Security

We face significant operational risks because the nature of the financial services business involves a high volume of transactions.

We operate in diverse markets and rely on the ability of our employees and systems to process a high number of transactions. Operational risk is the risk of loss resulting from our operations, including but not limited to, the risk of fraud by employees or persons outside our company, the execution of unauthorized transactions by employees, errors relating to transaction processing and technology, breaches of our internal control systems and compliance requirements. Insurance coverage may not be available for such losses, or where available, such losses may exceed insurance limits. This risk of loss also includes potential legal actions that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards, adverse business decisions or their implementation, or customer attrition due to potential negative publicity. In the event of a breakdown in our internal control systems, improper operation of systems or improper employee actions, we could suffer financial loss, face regulatory action, and/or suffer damage to our reputation.

Cyber-attacks or other security breaches could adversely affect our operations, net income or reputation.

We regularly collect, process, transmit and store significant amounts of confidential information regarding our customers, employees and others and concerning our own business, operations, plans and strategies. In some cases, this confidential or proprietary information is collected, compiled, processed, transmitted or stored by third parties on our behalf.

Information security risks have generally increased in recent years because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial and other transactions and the increased sophistication and activities of perpetrators of cyber-attacks and mobile phishing. Mobile

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phishing, a means for identity thieves to obtain sensitive personal information through fraudulent e-mail, text or voice mail, is an emerging threat targeting the customers of financial entities. A failure in or breach of our operational or information security systems, or those of our third-party service providers, as a result of cyber-attacks or information security breaches or due to employee error, malfeasance or other disruptions could adversely affect our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and/or cause losses.

Although we employ a variety of physical, procedural and technological safeguards to protect this confidential and proprietary information from mishandling, misuse or loss, these safeguards do not provide absolute assurance that mishandling, misuse or loss of the information will not occur, and that if mishandling, misuse or loss of information does occur, those events will be promptly detected and addressed. Similarly, when confidential or proprietary information is collected, compiled, processed, transmitted or stored by third parties on our behalf, our policies and procedures require that the third party agree to maintain the confidentiality of the information, establish and maintain policies and procedures designed to preserve the confidentiality of the information, and permit us to confirm the third party’s compliance with the terms of the agreement. As information security risks and cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities.

If this confidential or proprietary information were to be mishandled, misused or lost, we could be exposed to significant regulatory consequences, reputational damage, civil litigation and financial loss.

Risks associated with system failures, interruptions, or breaches of security could negatively affect our earnings.

Information technology systems are critical to our business. We use various technology systems to manage our customer relationships, general ledger, securities, deposits, and loans. We have established policies and procedures to prevent or limit the impact of system failures, interruptions, and security breaches, but such events may still occur and may not be adequately addressed if they do occur. In addition, any compromise of our systems could deter customers from using our products and services. Although we rely on security systems to provide the security and authentication necessary to effect the secure transmission of data, these precautions may not protect our systems from compromises or breaches of security.

In addition, we outsource a majority of our data processing to third-party providers. If these third-party providers encounter difficulties, or if we have difficulty communicating with them, our ability to adequately process and account for transactions could be affected, and our business operations could be adversely affected. Threats to information security also exist in the processing of customer information through various other vendors and their personnel.

The occurrence of any system failures, interruptions, or breaches of security could damage our reputation and result in a loss of customers and business, subject us to additional regulatory scrutiny or expose us to litigation and possible financial liability. Any of these events could have a material adverse effect on our financial condition and results of operations.

The cost of additional finance and accounting systems, procedures and controls to satisfy our new public company reporting requirements will increase our expenses.

As a result of the completion of the offering, we will become a public reporting company. The obligations of being a public company, including the substantial public reporting obligations, will require significant expenditures and place additional demands on our management team. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes Oxley Act”) requires annual management assessments of the effectiveness of our internal control over financial reporting, starting with the second annual report that we would expect to file with the SEC. Any failure to achieve and maintain an effective internal control environment could have a material adverse effect on our business. In addition, we may need to hire additional compliance, accounting and financial staff with appropriate public company experience and technical knowledge, and we may not be able to do so in a timely fashion. As a result, we may need to rely on outside consultants to provide these services for us until qualified personnel are hired. These obligations will increase our operating expenses and could divert our management’s attention from our operations.

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We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance.

We are a community bank and our reputation is one of the most valuable components of our business. A key component of our business strategy is to rely on our reputation for customer service and knowledge of local markets to expand our presence by capturing new business opportunities from existing and prospective customers in our market area and contiguous areas. As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers. If our reputation is negatively affected by the actions of our employees, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, or otherwise, our business and operating results may be materially adversely affected.

Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses.

Our risk management framework is designed to minimize risk and loss to us. We seek to identify, measure, monitor, report and control our exposure to risk, including strategic, market, liquidity, compliance and operational risks. While we use broad and diversified risk monitoring and mitigation techniques, these techniques are inherently limited because they cannot anticipate the existence or future development of currently unanticipated or unknown risks. Recent economic conditions and heightened legislative and regulatory scrutiny of the financial services industry, among other developments, have increased our level of risk. Accordingly, we could suffer losses if we fail to properly anticipate and manage these risks.

Risks Related to Regulatory Matters

Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations.

We are subject to extensive regulation, supervision and examination by our banking regulators. Such regulation and supervision govern the activities in which a financial institution and its holding company may engage and are intended primarily for the protection of insurance funds and the depositors and borrowers of Somerset Savings Bank rather than for the protection of our shareholders. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the ability to impose restrictions on our operations, classify our assets and determine the level of our allowance for loan losses. These regulations, along with the currently existing tax, accounting, securities, deposit insurance and monetary laws, rules, standards, policies, and interpretations, control the methods by which financial institutions conduct business, implement strategic initiatives, and govern financial reporting and disclosures. As a smaller institution, we are disproportionately affected by the ongoing increased costs of compliance with banking and other regulations. Any change in such regulation and oversight, whether in the form of regulatory policy, new regulations, legislation or supervisory action, may have a material impact on our operations. Further, changes in accounting standards can be both difficult to predict and involve judgment and discretion in their interpretation by us and our independent accounting firm. These changes could materially impact, potentially retroactively, how we report our financial condition and results of operations.

Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.

The USA PATRIOT and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions, including restrictions on conducting acquisitions or establishing new branches. The policies and procedures we have adopted that are designed to assist in compliance with these laws and regulations may not be effective in preventing violations of these laws and regulations.

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Monetary policies and regulations of the Federal Reserve could adversely affect our business, financial condition and results of operations.

In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve. An important function of the Federal Reserve is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve to implement these objectives are open market purchases and sales of U.S. government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.

The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of financial institutions in the past and are expected to continue to do so in the future. The effects of such policies upon our business, financial condition and results of operations cannot be predicted.

We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

We are an emerging growth company, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As an emerging growth company, we also will not be subject to Section 404(b) of the Sarbanes-Oxley Act, which would require that our independent auditors review and attest as to the effectiveness of our internal control over financial reporting. We have also elected to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.

We are also a smaller reporting company, and even if we no longer qualify as an emerging growth company, any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors.

In addition to qualifying as an emerging growth company, SR Bancorp qualifies as a “smaller reporting company” under the federal securities laws. For as long as it continues to be a smaller reporting company, it may choose to take advantage of exemptions from various reporting requirements applicable to public companies that are not available to companies that are not smaller reporting companies, including, but not limited to, reduced financial disclosure obligations and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.

Risks Related to Accounting Matters

Changes in accounting standards could affect reported earnings.

The bodies responsible for establishing accounting standards, including the Financial Accounting Standards Board, the Securities and Exchange Commission and other regulatory bodies, periodically change the financial accounting and reporting guidance that govern the preparation of our financial statements. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply new or revised guidance retroactively.

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Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results.

In preparing this prospectus as well as periodic reports we will be required to file under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management is and will be required under applicable rules and regulations to make estimates and assumptions as of specified dates. These estimates and assumptions are based on management’s best estimates and experience at such times and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known. Areas requiring significant estimates and assumptions by management include our evaluation of the adequacy of our allowance for loan losses, the determination of our deferred income taxes, our fair value measurements, our determination of goodwill impairment, and our evaluation of our defined benefit pension plan obligations.

Risks Related to the Stock Offering

The future price of the shares of common stock may be less than the $10.00 purchase price per share in the stock offering.

If you purchase shares of common stock in the stock offering, you may not be able to sell them later at or above the $10.00 purchase price in the stock offering. The aggregate purchase price of the shares of common stock sold in the stock offering will be based on an independent appraisal. The independent appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock. The independent appraisal is based on certain estimates, assumptions and projections, all of which are subject to change from time to time. After the shares begin trading, the trading price of our common stock will be determined by the marketplace, and may be influenced by many factors, including prevailing interest rates, economic conditions, changes in federal tax laws, new regulations, investor perceptions of SR Bancorp and the outlook for the financial services industry in general. Price fluctuations in our common stock may be unrelated to our operating performance.

Our failure to effectively deploy the net proceeds may have an adverse effect on our financial performance.

We intend to invest between $40.8 million and $55.7 million of the net proceeds of the stock offering (or $64.2 million at the adjusted maximum of the offering range) in Somerset Savings Bank. We will use a portion of the net proceeds we retain to fund the merger consideration, to fund a loan to our employee stock ownership plan to purchase shares of common stock in the stock offering and to fund the charitable foundation. We may use the remaining net proceeds to invest in short-term investments and for general corporate purposes, including repurchasing shares of our common stock and paying dividends. Somerset Savings Bank intends to use the net proceeds it receives to fund new loans, purchase securities, expand its retail banking franchise by acquiring other financial institutions or other financial services companies, or for other general corporate purposes. However, with the exception of paying the merger consideration, funding the loan to the employee stock ownership plan and funding the charitable foundation, we have not allocated specific amounts of the net proceeds for any of these purposes, and we will have significant flexibility in determining the amount of the net proceeds we apply to different uses and when we apply or reinvest such proceeds. Also, certain of these uses, such as acquiring other financial institutions, may require the approval of the NJDBI, the FDIC or the Federal Reserve. We have not established a timetable for investing the net proceeds, and we cannot predict how long we will require to invest the net proceeds. Our failure to reinvest these funds effectively would reduce our profitability and may adversely affect the value of our common stock.

Our return on equity will be low following the stock offering. This could negatively affect the trading price of our shares of common stock.

Net income divided by average shareholders’ equity, known as “return on equity,” is a ratio many investors use to compare the performance of financial institutions. Our return on equity will be low until we are able to profitably leverage the additional capital we receive from the offering. Our return on equity also will be negatively affected by added expenses associated with our employee stock ownership plan and the stock-based benefit plan we intend to adopt sometime following the conversion and offering. Until we can increase our net interest income and noninterest income and leverage the capital raised in the offering, we expect our return on equity to be low, which may reduce the market price of our shares of common stock.

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Our stock-based benefit plan will increase our expenses and reduce our income.

We intend to adopt a stock-based benefit plan after the conversion, subject to shareholder approval, which will increase our annual compensation and benefit expenses related to the stock options and stock awards granted to participants under the stock-based benefit plan. The amount of these stock-related compensation and benefit expenses will depend on the number of options and stock awards granted, the fair market value of our stock or options on the date of grant, the vesting period, and other factors that we cannot predict at this time. If we adopt a stock-based benefit plan within 12 months following the conversion, the shares of common stock reserved for issuance pursuant to awards of restricted stock and grants of options under such plans would be limited to 4.0% and 10.0%, respectively, of the total shares of our common stock outstanding following the offering. If we adopt a stock-based benefit plan more than 12 months after the completion of the conversion, we may award restricted shares of common stock or grant options in excess of these amounts, which would further increase costs.

In addition, we will recognize expense for our employee stock ownership plan when shares are committed to be released to participants’ accounts. The cost of acquiring the shares of common stock for the employee stock ownership plan is estimated to be between $7.1 million at the minimum of the offering range and $11.1 million at the adjusted maximum of the offering range (assuming we are able to purchase all of such shares in the offering). We will record annual employee stock ownership plan expenses in an amount equal to the fair value of shares of common stock committed to be released to employees. We will also recognize expense for restricted stock awards and stock options over the vesting period of awards made to recipients. The expense in the first year following the stock offering for our new stock-based benefit plan is estimated to be approximately $2.5 million ($2.1 million after tax) at the adjusted maximum of the stock offering range as set forth in the pro forma financial information under “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Proposed Merger,” assuming the $10.00 per share purchase price as fair market value. Actual expenses, however, may be higher or lower, depending on the price of our common stock. For further discussion of our proposed stock-based plan, see “Management—Benefits to be Considered Following Completion of the Stock Offering.”

The implementation of our stock-based benefit plan may dilute your ownership interest.

We intend to adopt a stock-based benefit plan following the conversion and offering. This plan may be funded either through open market purchases of our common stock or from the issuance of authorized but unissued shares of common stock. Our ability to purchase shares of our common stock to fund this plan will be subject to many factors, including the availability of stock in the market, the trading price of the stock, our capital levels, alternative uses for our capital and our financial performance. While we may elect to fund the stock-based benefit plan through open market purchases, shareholders would experience a 12.28% dilution in ownership interest if newly issued shares of our common stock are used to fund the exercise of stock options and the grant of shares of restricted common stock equal to 10% and 4%, respectively, of the shares outstanding following the offering, and all such stock options are exercised. Such dilution would also reduce our future earnings per share.

Various factors may make takeover attempts more difficult to achieve.

Certain provisions of our articles of incorporation and bylaws and state and federal banking laws, including regulatory approval requirements, could make it more difficult for a third party to acquire control of SR Bancorp without our Board of Directors’ approval. Under regulations applicable to the conversion, for a period of three years following completion of the conversion, no person may acquire beneficial ownership of more than 10% of our common stock without prior approval of the Federal Reserve. Under federal law, subject to certain exemptions, a person, entity or group must notify the Federal Reserve before acquiring control of a bank holding company. There also are provisions in our articles of incorporation and bylaws that may be used to delay or block a takeover attempt, including a provision that prohibits any person from voting more than 10% of our outstanding shares of common stock. Taken as a whole, these statutory provisions and provisions in our articles of incorporation and bylaws could result in our being less attractive to a potential acquirer and thus could adversely affect the market price of our common stock.

For additional information, see “Restrictions on Acquisition of SR Bancorp” and “Management—Benefits to be Considered Following Completion of the Stock Offering.”

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There may be a limited trading market in our shares of common stock, which would hinder your ability to sell our common stock and may lower the market price of our common stock.

We have never issued capital stock and there is no established market for our common stock. We expect that our common stock will be traded on the Nasdaq Capital Market under the symbol “SRBK” upon conclusion of the offering. The development of an active trading market depends on the existence of willing buyers and sellers, the presence of which is not within our control, or that of any market maker. The number of active buyers and sellers of the shares of common stock at any particular time may be limited. Under such circumstances, you could have difficulty selling your shares of common stock on short notice, and, therefore, you should not view the shares of common stock as a short-term investment. If you purchase shares of common stock, you may not be able to sell them at or above $10.00 per share. Purchasers of common stock in the offering should have long-term investment intent and should recognize that there will be a limited trading market in the common stock. This may make it difficult to sell the common stock after the offering and may have an adverse impact on the price at which the common stock can be sold.

You may not revoke your decision to purchase SR Bancorp common stock in the subscription or community offerings after you send us your order.

Funds submitted or automatic withdrawals authorized in connection with the purchase of shares of common stock in the subscription and community offerings will be held by us until the completion or termination of the conversion and offering, including any extension of the expiration date and consummation of a syndicated community offering or firm commitment underwritten public offering. Because completion of the conversion and related stock offering will be subject to regulatory approvals and an update of the independent appraisal prepared by RP Financial, LC., among other factors, there may be a delay in completing the conversion and offering. Orders submitted in the subscription and community offerings are irrevocable, and purchasers will have no access to their funds unless the offering is terminated, or extended beyond [extension date], or the number of shares to be sold in the offering is increased to more than 13,225,000 shares or decreased to fewer than 8,500,000 shares.

The distribution of subscription rights could have adverse income tax consequences.

If the subscription rights granted to certain current or former depositors of Somerset Savings Bank are deemed to have an ascertainable value, receipt of such rights may be taxable in an amount equal to such value. Whether subscription rights are considered to have ascertainable value is an inherently factual determination. We have received an opinion of counsel, Luse Gorman, PC, that it is more likely than not that such rights have no value; however, such opinion is not binding on the Internal Revenue Service.

Risks Related to the Charitable Foundation

The contribution to the charitable foundation will dilute your ownership interest and adversely affect net income in 2023.

We intend to establish and fund a new charitable foundation in connection with the offering. We intend to contribute to the charitable foundation up to 661,250 shares of our common stock and $1.3 million in cash (which, together, represents 6.0% of the value of the common stock at the maximum of the offering). The contribution will have an adverse effect on our net income for the quarter and year in which we make the contribution. The after-tax expense of the contribution is expected to reduce net income for the year ended June 30, 2023 by approximately $6.0 million. In addition, persons purchasing shares in the offering will have their ownership and voting interests in SR Bancorp diluted by up to 4.6% due to the contribution of shares of common stock to the charitable foundation.

Our contribution to the charitable foundation may not be tax deductible, which could reduce our profits.

We may not have sufficient profits to be able to fully use the tax deduction from our contribution to the charitable foundation. Under the Internal Revenue Code, an entity is permitted to deduct up to 10% of its taxable income (generally income before federal income taxes and charitable contributions expense) in any one year for charitable contributions. Any contribution in excess of the 10% limit may be deducted for federal income tax purposes over each of the five years following the year in which the charitable contribution is made. Accordingly, a charitable contribution could, if necessary, be deducted over a six-year period and expires thereafter.

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FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “would,” “should,” “could” or “may,” and words of similar meaning. These forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans, prospects, growth and operating strategies;

• statements regarding the quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations, which are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statements. These factors include the following:

• our ability to successfully consummate our proposed Merger with Regal Bancorp and integrate Regal Bancorp’s operations into our operations;

• inflation and fluctuations in interest rates and a decline in the level of our interest rate spread;

• general economic and business conditions nationally and in those areas in which we operate;

• volatility and deterioration in the credit and equity markets;

• changes in consumer spending, borrowing and savings habits;

• demographic changes;

• competition for loans and deposits and failure to attract or retain loans and deposits;

• the failure to successfully integrate acquired operation and realize expected synergies;

• the ability to maintain relationships with the third parties we utilize to supplement our loan originations;

• a failure to maintain adequate levels of capital and liquidity to support our operations;

• the current or anticipated impact of military conflict, terrorism or other geopolitical events;

• risks of natural disasters;

• a failure in or breach of our operational or security systems or infrastructure, including cyberattacks;

• the failure to maintain current technologies;

• the inability to successfully implement future information technology enhancements;

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• difficult business and economic conditions that can adversely affect our industry and business, including competition, fraudulent activity and negative publicity;

• failure to attract or retain key employees;

• our ability to access cost-effective funding;

• fluctuations in real estate values;

• changes in accounting policies and practices;

• changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums;

• the continuing impact of the COVID-19 pandemic on our business and results of operation;

• the adequacy of our allowance for loan losses;

• our credit quality and the effect of credit quality on our credit losses expense and allowance for loan losses;

• changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements;

• our ability to control expenses;

• changes in securities markets; and

• risks as it relates to cyber security against our information technology and those of our third-party providers and vendors.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Please see “Risk Factors” beginning on page 19. Except as required by applicable law or regulation, we do not undertake, and we specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF

SOMERSET SAVINGS BANK, SLA

The information presented below at or for each of the periods is only a summary, and should be read in conjunction with our consolidated financial statements and notes beginning on page F-1 of this prospectus. The information at June 30, 2022 and 2021 and for each of the years then ended is derived in part from the audited consolidated financial statements that appear in this prospectus. The information at December 31, 2022 and for the six months ended December 31, 2022 and 2021 is not audited, but, in the opinion of management, includes all adjustments necessary for a fair presentation. All of these adjustments are normal and recurring. The results of operations for the six months ended December 31, 2022 are not necessarily indicative of the results of operations that may be expected for the entire year or for any other period.

	At December 31, 2022		At June 30,
			2022		2021
	(In thousands)
Selected Financial Condition Data:
Total assets	$	649,513	$	648,631	$	639,358
Cash and cash equivalents		27,135		35,344		56,751
Securities available for sale		41,062		47,857		47,098
Securities held-to-maturity		183,753		192,903		193,252
Loans, net of allowance for loan losses		357,616		334,558		306,798
Bank-owned life insurance		28,384		28,056		27,441
Deposits		522,762		522,072		509,993
Federal Home Loan Bank advances		—		—		—
Equity		118,071		118,231		121,943

	For the Six Months Ended December 31,				For the Years Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Selected Operating Data:
Interest income	$	7,610	$	6,540	$	13,432	$	13,180
Interest expense		732		905		1,535		2,415
Net interest income		6,878		5,635		11,897		10,765
Provision for loan losses		—		—		—		—
Net interest income after provision for loan losses		6,878		5,635		11,897		10,765
Noninterest income		694		691		1,351		1,212
Noninterest expense		6,698		5,449		11,014		10,582
Income before income taxes		874		877		2,234		1,395
Income tax expense		121		114		363		145
Net income	$	753	$	763	$	1,871	$	1,250

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	At or For the Six Months Ended December 31,						At or For the Years Ended June 30,
	2022			2021			2022			2021
Performance Ratios:
Return on average assets		0.23	%		0.24	%		0.29	%		0.20	%
Return on average equity		1.28	%		1.25	%		1.54	%		1.04	%
Interest rate spread(1)		2.22	%		1.77	%		1.89	%		1.74	%
Net interest margin(2)		2.28	%		1.86	%		1.96	%		1.85	%
Noninterest income to average assets		0.21	%		0.21	%		0.21	%		0.20	%
Noninterest expense to average assets		2.07	%		1.68	%		1.70	%		1.70	%
Efficiency ratio(3)		88.46	%		86.14	%		83.14	%		88.35	%
Average interest-earning assets to average interest-bearing liabilities		126.62	%		127.66	%		127.77	%		128.03	%
Capital Ratios:
Average equity to average assets		18.19	%		18.87	%		18.71	%		19.40	%
Tier 1 capital to average assets		19.51	%		19.23	%		19.36	%		19.90	%
Asset Quality Ratios:
Allowance for loan losses as a percentage of total loans		0.31	%		0.37	%		0.33	%		0.36	%
Allowance for loan losses as a percentage of non-performing loans		743.55	%		N/A			N/A			424.09	%
Net (charge-offs) recoveries to average outstanding loans during the year		—	%		—	%		—	%		—	%
Non-performing loans as a percentage of total loans		0.04	%		—	%		—	%		0.09	%
Non-performing loans as a percentage of total assets		0.02	%		—	%		—	%		0.04	%
Total non-performing assets as a percentage of total assets		0.02	%		—	%		—	%		0.04	%
Other:
Number of offices		7			7			7			7
Number of full-time equivalent employees		66			64			64			65

(1) Represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(2) Represents net interest income as a percentage of average interest-earning assets.

(3) Represents noninterest expense divided by the sum of net interest income and noninterest income.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF REGAL BANCORP

The information presented below at or for each of the periods is only a summary and should be read in conjunction with the Regal Bancorp consolidated financial statements and notes beginning on page G-1 of this prospectus. The information as of December 31, 2022 and 2021 and for each of the years then ended is derived in part from the audited consolidated financial statements of Regal Bancorp that appear in this prospectus.

	At or for the Year Ended December 31,
	2022			2021
	(Dollars in thousands, except per share data)
Financial Condition Data:
Total assets	$	495,679		$	573,772
Cash and cash equivalents		106,847			167,834
Time deposits in other financial institutions		12,640			16,568
Securities available for sale		15,477			15,463
Securities held-to-maturity		2,592			2,591
Loans, net of allowance for loan losses		339,259			356,009
Deposits:
Noninterest-bearing	$	105,652			124,507
Interest-bearing		320,356			385,085
Total deposits		426,008			509,592
Federal Home Loan Bank advances		5,000			5,000
Subordinated debt		9,915			9,900
Total Stockholders’ equity		49,143			46,697
Asset Quality Data:
Nonaccrual loans	$	541		$	216
Foreclosed real estate		—			—
Accruing troubled debt restructures		—			—
Loans 90 days past due sand still accruing		—			—
Loan charge-offs		—			(12	)
Loan recoveries		—			—
Operations Data
Total interest income	$	18,274		$	17,979
Total interest expense		2,244			3,332
Net Interest Income		16,030			14,647
Provision (credit) for Loan Losses		—			45
Net interest income after provision for loan losses		16,030			14,602
Noninterest income		756			969
Noninterest expenses		12,298			11,549
Income Before Income Tax Expense		4,488			4,022
Income Tax Expense		1,394			1,125
Net Income	$	3,094		$	2,897
Per Common Share Data:
Net Income Per Share–- Basic	$	1.02		$	0.96
Net Income Per Share–- Diluted		1.02		$	0.96
Cash dividends per share		—			—
Performance Ratios
Return on average assets		0.62	%		0.51	%
Return on average equity		5.33	%		5.28	%
Noninterest income to average assets		0.15	%		0.17	%
Net interest spread		2.93	%		2.42	%
Net interest margin		3.11	%		2.64	%
Noninterest expense to average assets		0.02	%		2.03	%
Efficiency ratio		73.00	%		74.00	%
Dividend payout ratio		—	%		—	%
Capital Ratios:
Average equity to average assets		11.73	%		9.63	%
Tier 1 capital to total assets		11.72	%		9.62	%
Asset Quality Ratios:
Allowance for loan losses as a percentage of total loans		1.63	%		1.58	%

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Allowance for loan losses as a percentage of total non-performing loans	1,039	%	2,598	%
Net (charge-offs) recoveries to average outstanding loans during the year	—	%	—	%
Non-performing loans as a percentage of total loans	0.16	%	0.06	%
Non-performing loans as a percentage of total assets	0.11	%	0.04	%
Total non-performing assets as a percentage of total assets	0.11	%	0.04	%
Other:
Number of offices	10		10
Number of full-time equivalents	66		72

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HOW WE INTEND TO USE THE PROCEEDS FROM THE STOCK OFFERING

Although we cannot determine what the actual net proceeds from the sale of the shares of common stock will be until the offering is completed, we anticipate that the net proceeds will be between $81.7 million and $111.4 million, or $128.4 million if the offering range is increased by 15%.

We intend to distribute the net proceeds as follows:

	Based Upon the Sale at $10.00 Per Share of
	8,500,000 Shares						10,000,000 Shares						11,500,000 Shares						13,225,000(1) Shares
	Amount			Percent of Net Proceeds			Amount			Percent of Net Proceeds			Amount			Percent of Net Proceeds			Amount			Percent of Net Proceeds
	(Dollars in thousands)
Offering proceeds	$	85,000					$	100,000					$	115,000					$	132,250
Less offering expenses		(3,337	)					(3,487	)					(3,637	)					(3,810	)
Net offering proceeds	$	81,663			100.0	%	$	96,513			100.0	%	$	111,363			100.0	%	$	128,440			100.0	%
Distribution of net proceeds:
To Somerset Savings Bank	$	(40,832	)		(50.0	)%	$	(48,257	)		(50.0	)%	$	(55,682	)		(50.0	)%	$	(64,220	)		(50.0	)%
To fund loan to employee stock ownership plan(2)		(7,140	)		(8.7	)%		(8,400	)		(8.7	)%		(9,660	)		(8.7	)%		(11,109	)		(8.7	)%
Cash contribution to the charitable foundation		(850	)		(1.0	)%		(1,000	)		(1.0	)%		(1,150	)		(1.0	)%		(1,323	)		(1.0	)%
Retained by SR Bancorp	$	32,842			40.3	%	$	38,857			40.3	%	$	44,872			40.3	%	$	51,789			40.3	%

(1) As adjusted to give effect to an increase in the number of shares, which could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.

(2) The employee stock ownership plan (“ESOP”) will purchase up to 8.0% of shares of common stock of SR Bancorp offered in the stock offering and the shares contributed to the charitable foundation, with the ESOP obtaining the funds to purchase the shares from a loan made available by SR Bancorp to the ESOP. The loan will be repaid principally through Somerset Savings Bank’s contribution to the ESOP over the anticipated 20-year term of the loan. The interest rate for the ESOP loan is expected to be equal to the prime rate, as published in The Wall Street Journal, on the closing date of the conversion and offering.

Payments for shares of common stock made through withdrawals from existing deposit accounts will not result in the receipt of new funds for investment but will result in a reduction of Somerset Savings Bank’s deposits. The net proceeds may vary because total expenses relating to the offering may be more or less than our estimates. For example, our expenses would increase if all shares were not sold in the subscription and community offerings and a portion of the shares were sold in a syndicated community offering or firm commitment underwritten public offering. Somerset Savings Bank will receive the net proceeds of the offering.

SR Bancorp may use the proceeds it retains from the offering:

• to fund the proposed Merger;

• to invest in securities;

• to pay cash dividends to shareholders;

• to repurchase shares of our common stock;

• to finance the potential acquisition of financial institutions or financial services companies, although we do not currently have any agreements or understandings regarding any specific acquisition transaction other than our proposed Merger with Regal Bancorp; and

• for other general corporate purposes.

See “Our Dividend Policy” for a discussion of our expected dividend policy following the completion of the conversion. Under current federal regulations, we may not repurchase shares of our common stock during the first year following the completion of the conversion, except when extraordinary circumstances exist and with prior regulatory approval, or except to fund the granting of restricted stock awards (which would require notification to the Federal Reserve).

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Somerset Regal Bank may use proceeds that it receives from SR Bancorp from the stock offering:

• to fund new loans;

• to enhance existing products and services, hire additional employees and support growth and develop new products and services;

• to expand its retail banking franchise by acquiring other financial institutions or other financial services companies as opportunities arise, although we do not currently have any understandings or agreements to acquire a financial institution or other entity other than our proposed merger with Regal Bank;

• to invest in securities; and

• for other general corporate purposes.

Initially, a substantial portion of the net proceeds will be invested in short-term investments, investment-grade debt obligations and mortgage-backed securities. We have not determined specific amounts of the net proceeds that would be used for the purposes described above. The use of the proceeds outlined above may change based on many factors, including, but not limited to, changes in interest rates, equity markets, laws and regulations affecting the financial services industry, the attractiveness and availability of potential acquisitions to expand our operations, and overall market conditions. The use of the proceeds may also change depending on our ability to receive regulatory approval to acquire other financial institutions.

We expect our return on equity to be low until we are able to reinvest effectively the additional capital raised in the offering. See “Risk Factors—Risks Related to the Stock Offering—Our failure to effectively deploy the net proceeds may have an adverse effect on our financial performance” and “—Our return on equity will be low following the offering. This could negatively affect the trading price of our shares of common stock.”

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OUR DIVIDEND POLICY

No decision has been made with respect to the amount, if any, and timing of any dividend payments following the completion of the conversion and related stock offering and of the proposed Merger. The amount of dividends to be paid, if any, will be subject to our capital requirements, our financial condition and results of operations, tax considerations, statutory and regulatory limitations, and general economic conditions. We cannot assure you that we will pay dividends in the future, or that, if dividends are paid, any such dividends will not be reduced or eliminated in the future. The source of dividends will depend on the net proceeds retained by SR Bancorp and earnings thereon, and dividends from Somerset Regal Bank. In addition, SR Bancorp will be subject to state law limitations and federal bank regulatory policy on the payment of dividends.

After the completion of the conversion and the proposed Merger, Somerset Regal Bank will not be permitted to pay dividends on its capital stock to SR Bancorp, its sole shareholder, if Somerset Regal Bank’s shareholders’ equity would be reduced below the amount of the liquidation account established in connection with the conversion. In addition, Somerset Regal Bank will not be permitted to make a capital distribution if, after making such distribution, it would be undercapitalized.

Under New Jersey law and applicable regulations, Somerset Regal Bank may declare and pay a dividend on its capital stock only to the extent that the payment of the dividend would not impair the capital stock of the bank. In addition, a stock bank may not pay a dividend unless the bank would, after the payment of the dividend, have a surplus of not less than 50% of its capital stock, or alternatively, the payment of the dividend would not reduce the surplus.

Any payment of dividends by Somerset Regal Bank to SR Bancorp that would be deemed to be drawn from Somerset Regal Bank’s bad debt reserves established prior to 1988, if any, would require a payment of taxes at then-current tax rate by Somerset Regal Bank on the amount of earnings deemed to be removed from the pre-1988 bad debt reserves for such distribution. Somerset Regal Bank does not intend to make any distribution that would create such a federal tax liability. For further information concerning additional federal law and regulations regarding the ability of Somerset Regal Bank to make capital distributions, including the payment of dividends to SR Bancorp, see “Taxation—Federal Taxation.”

We will file a consolidated federal tax return with Somerset Regal Bank. Accordingly, it is anticipated that any cash distributions made by us to our shareholders would be treated as cash dividends and not as a non-taxable return of capital for federal tax purposes. Additionally, during the three-year period following the conversion, we will not be permitted to make any capital distribution to shareholders that would be treated by recipients as a tax-free return of capital for federal income tax purposes.

MARKET FOR THE COMMON STOCK

We have never publicly issued capital stock and there is no established market for our shares of common stock. We expect that our shares of common stock will be listed on the Nasdaq Capital Market under the symbol “SRBK,” subject to completion of the offering and compliance with certain listing conditions, including the presence of at least three registered and active market makers. KBW has advised us that it intends to make a market in shares of our common stock following the offering, but it is not obligated to do so or to continue to do so once it begins. While we will attempt before completion of the offering to obtain commitments from at least two other broker-dealers to make a market in shares of our common stock, there can be no assurance that we will be successful in obtaining such commitments.

The development and maintenance of a public market, having the desirable characteristics of depth, liquidity and orderliness, depends on the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active buyers and sellers of shares of our common stock at any particular time may be limited, which may have an adverse effect on the price at which shares of our common stock can be sold. There can be no assurance that persons purchasing the shares of common stock will be able to sell their shares at or above the $10.00 offering purchase price per share.

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CAPITALIZATION

The following table presents the historical capitalization of Somerset Savings Bank and Regal Bancorp at December 31, 2022 and the capitalization of SR Bancorp after giving effect to the receipt of the offering proceeds and the proposed Merger (referred to as “pro forma” information). The table depicts adjustments to capitalization resulting first from the offering and then from the proposed Merger only at the minimum of the offering range and then depicts SR Bancorp’s capitalization following the offering and the proposed Merger at the minimum, midpoint, maximum and adjusted maximum, of the offering range. The pro forma capitalization gives effect to the assumptions listed under “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Proposed Merger.”

				Offering Adjustments: 8,500,000 at Minimum of Offering Range												Pro Forma Capitalization Based Upon the Sale of
	Somerset Savings Bank						Somerset Bancorp Post-offering			Regal Bancorp			Merger Adjustments			8,500,000 Shares at $10.00 per share			10,000,000 Shares at $10.00 per share			11,500,000 Shares at $10.00 per share			13,225,000 Shares at $10.00 per share (1)
	(Dollars in thousands, except per share amounts)
Deposits (2)	$	522,762		$	—		$	522,762		$	426,008		$	(1,607	)	$	947,163		$	947,163		$	947,163		$	947,163
Borrowings		—			—			—			14,915			—	(6)		14,915			14,915			5,000	(6)		5,000	(6)
Total deposits and borrowed funds	$	522,762		$	—		$	522,762		$	440,923		$	(1,607	)	$	962,078		$	962,078		$	952,163		$	952,163
Shareholders’ equity:
Preferred stock	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Common stock (3)		—			89			89			—			—			89			105			121			139
Additional paid-in capital		—			85,824			85,824			34,358			(34,358	)		85,824			101,408			116,992			134,914
Retained earnings		126,299			—			126,299			15,411			(16,431	)		125,279			125,279			125,279			125,279
Accumulated other comprehensive income		(8,228	)		—			(8,228	)		(626	)		626			(8,228	)		(8,228	)		(8,228	)		(8,228	)
Less:
After tax cost of contribution to the charitable foundation		—			(3,825	)		(3,825	)		—			—			(3,825	)		(4,500	)		(5,175	)		(5,951	)
Common stock acquired by employee stock ownership plan (4)		—			(7,140	)		(7,140	)		—			—			(7,140	)		(8,400	)		(9,660	)		(11,109	)
Common stock acquired by stock-based incentive plan (5)		—			(3,570	)		(3,570	)		—			—			(3,570	)		(4,200	)		(4,830	)		(5,555	)
Total shareholders’ equity	$	118,071		$	71,378		$	189,449		$	49,143		$	(50,163	)	$	188,429		$	201,464		$	214,499		$	229,489
Pro Forma Shares Outstanding
Total shares outstanding		—			8,925,000			8,925,000			—			—			8,925,000			10,500,000			12,075,000			13,886,250
Shares offered for sale in the conversion		—			8,500,000			8,500,000			—			—			8,500,000			10,000,000			11,500,000			13,225,000
Shares contributed to the charitable foundation		—			425,000			425,000			—			—			425,000			500,000			575,000			661,250
Total shareholders’ equity as a percentage of pro forma total assets		18.18	%		—			26.28	%		9.91	%		—			16.18	%		17.10	%		18.16	%		19.19	%
Tangible shareholders’ equity as a percentage of pro forma tangible assets		18.18	%		—			26.28	%		9.72	%		—			13.80	%		14.78	%		15.88	%		16.96	%

(1) As adjusted to give effect to an increase in the number of shares, which increase could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.

(2) Does not reflect withdrawals from deposit accounts at Somerset Savings Bank to purchase common stock in the offering. These withdrawals will reduce pro forma deposits by the amounts of the withdrawals.

(footnotes continue on next page)

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(footnotes continued from previous page)

(3) No effect has been given to the issuance of additional shares of common stock pursuant to the exercise of options under a stock-based benefit plan. If the plan is implemented within the first year after the closing of the offering, an amount up to 10.0% of the shares of common stock of SR Bancorp offered in the stock offering and the shares issued contributed to the charitable foundation will be reserved for issuance upon the exercise of options under the plans.

(4) Assumes that 8.0% of the shares of common stock of SR Bancorp offered in the stock offering and shares contributed to the charitable foundation will be acquired by the employee stock ownership plan financed by a loan from SR Bancorp. The loan will be repaid principally from Somerset Savings Bank’s contributions to the employee stock ownership plan. Since SR Bancorp will finance the employee stock ownership plan debt, this debt will be eliminated through consolidation and no liability will be reflected on SR Bancorp’s consolidated balance sheet. Accordingly, the number of shares of common stock acquired by the employee stock ownership plan is shown in this table as a reduction of total shareholders’ equity.

(5) Assumes a number of shares of common stock equal to 4.0% of the shares of common stock of SR Bancorp offered in the offering and at the completion of the offering (including shares contributed to the charitable foundation) will be purchased for grant by a stock-based benefit plan. The funds to be used by such plan to purchase shares will be provided by SR Bancorp. The dollar amount of common stock to be purchased is based on the $10.00 per share offering price and represents unearned compensation. This amount does not reflect possible increases or decreases in the value of common stock relative to the offering price. SR Bancorp will accrue compensation expense to reflect the vesting of shares granted pursuant to such stock-based benefit plan and will credit capital in an amount equal to the charge to operations. Implementation of such plan will require shareholder approval.

(6) Assumes the redemption of subordinated debt at the closing of the proposed Merger, with such redemption occurring only if the offering closes at the maximum or adjusted maximum of the offering range.

42

HISTORICAL AND PRO FORMA REGULATORY CAPITAL COMPLIANCE

At December 31, 2022, Somerset Savings Bank exceeded all regulatory capital requirements. The following table presents Somerset Savings Bank’s regulatory capital position relative to the regulatory capital requirements at December 31, 2022, on a historical and a pro forma basis, assuming completion of the proposed Merger and the offering. The table reflects receipt by Somerset Regal Bank of 50% of the net proceeds of the offering. For a discussion of the assumptions underlying the pro forma capital calculations presented below, see “Use of Proceeds,” “Capitalization” and “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Proposed Merger.” For a discussion of the capital standards applicable to Somerset Savings Bank and Regal Bank, see “Regulation and Supervision—Federal Bank Regulation.”

	Somerset Savings Bank Historical at December 31, 2022					Pro Forma at December 31, 2022, Based Upon the Sale in the Stock Offering of (1)
						8,500,000 shares(2)					8,250,000 shares(2)					11,500,000 shares(2)					13,225,000 shares(2)
	Amount		Percent of Assets(1)			Amount		Percent of Assets(2)			Amount		Percent of Assets(2)			Amount		Percent of Assets(2)			Amount		Percent of Assets(2)
	(Dollars in thousands)
Capital under generally accepted accounting principals	$	118,071		18.18	%	$	184,747		16.40	%	$	189,652		16.73	%	$	194,557		17.05	%	$	200,198		17.41	%
Tier 1 leverage capital
Actual	$	126,299		19.57	%	$	160,900		14.28	%	$	165,805		14.62	%	$	170,710		14.96	%	$	176,351		15.34	%
Requirement		32,276		5.00	%		56,322		5.00	%		56,693		5.00	%		57,064		5.00	%		57,491		5.00	%
Excess	$	94,023		14.57	%	$	104,578		9.28	%	$	109,112		9.62	%	$	113,646		9.96	%	$	118,860		10.34	%

(1) Shown as a percent of assets under generally accepted accounting principles and total assets for leverage ratio.

(2) Reconciliation of capital adjustment for Somerset Savings Bank:

	Minimum			Midpoint			Maximum			Maximum, as Adjusted
	(In thousands)
Gross offering proceeds	$	85,000		$	100,000		$	115,000		$	132,250
Less: offering expenses	$	(3,337	)	$	(3,487	)	$	(3,637	)	$	(3,810	)
Net conversion proceeds	$	81,663		$	96,513		$	111,363		$	128,440
Equity adjustments
Infused into the Bank (50% of net proceeds)	$	40,832		$	48,257		$	55,682		$	64,220
Less: ESOP adjustment at bank	$	(7,140	)	$	(8,400	)	$	(9,660	)	$	(11,109	)
Net increase from offering	$	33,692		$	39,857		$	46,022		$	53,111
Plus: Merger Adjustments
Regal Bank Historical Capital	$	58,295		$	58,295		$	58,295		$	58,295
Regal Pre-Closing Dividend	$	(36,793	)	$	(36,793	)	$	(36,793	)	$	(36,793	)
Fair Value Push-Down Accounting	$	18,623		$	18,623		$	18,623		$	18,623
ESOP contra at bank level	$	(7,140	)	$	(8,400	)	$	(9,660	)	$	(11,109	)
Increase in GAAP capital	$	66,676		$	71,581		$	76,486		$	82,127
Less: increase in disallowed intangible assets	$	(32,075	)	$	(32,075	)	$	(32,075	)	$	(32,075	)
Increase in Tier 1 capital	$	34,601		$	39,506		$	44,411		$	50,052
Asset adjustments
Regal Bank Historical Assets	$	491,935		$	491,935		$	491,935		$	491,935
Infused into the Bank (50% of net proceeds)	$	40,832		$	48,257		$	55,682		$	64,220
Regal Pre-Closing Dividends	$	(36,793	)	$	(36,793	)	$	(36,793	)	$	(36,793	)
Fair Value and Push-Down Accounting	$	17,016		$	17,016		$	17,016		$	17,016
Increase in GAAP assets	$	512,989		$	520,414		$	527,839		$	536,378
Less: Increase in disallowed intangible assets	$	(32,075	)	$	(32,075	)	$	(32,075	)	$	(32,075	)
Increase in leverage assets	$	480,914		$	488,339		$	495,764		$	504,303

43

PRO FORMA UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS GIVING

EFFECT TO THE CONVERSION AND PROPOSED MERGER

The following pro forma unaudited condensed consolidated statements of financial condition and the pro forma unaudited consolidated statements of income give effect to the proposed offering and the proposed Merger, based on the assumptions set forth below. As a result, the pro forma data assumes the completion of the offering and the proposed Merger. The condensed pro forma unaudited consolidated financial statements are based, in part, on the audited consolidated financial statements of Somerset Savings Bank for the year ended June 30, 2022 and Regal Bancorp for the year ended December 31, 2022, respectively, and the unaudited consolidated financial statements of Somerset Savings Bank for the six months ended December 31, 2022. The pro forma unaudited condensed consolidated financial statements give effect to the offering at historical cost and the proposed Merger using the purchase method of accounting as required by accounting principles generally accepted in the United States of America.

The pro forma adjustments in the tables assume the issuance of 8,500,000 shares, which is the minimum of the offering range, and 13,225,000 shares, which is the maximum of the offering range, as adjusted, in the offering. Regal Bancorp shareholders will receive $23.00 in cash for their shares of Regal Bancorp. For a more detailed discussion of how many shares will be issued in connection with the offering, see “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Proposed Merger —Analysis of Pro Forma Outstanding Shares of SR Bancorp Common Stock.” The purchase price for purposes of the pro forma presentation for Regal Bancorp was calculated as follows:

	December 31, 2022			June 30, 2022
	(In thousands)
Net assets acquired (not adjusted for purchase accounting)	$	49,143		$	47,776
Purchase accounting adjustments:
Estimated non-tax deductible merger costs	$	(3,962	)	$	(3,962	)
Loans receivable, net(1)		(7,737	)		(7,737	)
Deposits(1)		1,607			1,607
Core deposit intangible(2)		8,141			8,141
Tax impact of purchase accounting adjustments at 25%		(503	)		(503	)
Goodwill		22,849			24,216
Purchase price, net	$	69,537		$	69,537

(1) Fair value adjustments are calculated using discounted cash flow analysis using a comparison of portfolio rates to market rates as of December 31, 2022, with such adjustments applied to the December 31, 2022 balances. Fair value adjustments are amortized using the estimated lives of the respective assets and liabilities.

(2) Core deposit intangible reflects the present value benefit to SR Bancorp of utilizing the acquired core deposits as a funding source relative to wholesale funding costs based on the rates of Federal Home Loan Bank advances. The core deposit intangible is calculated using deposit balances and interest rates as of December 31, 2022. Costs of the acquired core deposits include interest costs, plus estimated operating expenses, less estimated noninterest income to be derived from the core deposits. The acquired core deposits are projected to decay based on the upper quartile of attrition rates pursuant to a survey conducted by the Office of the Comptroller of the Currency of community and midsize banks. . The yield benefit for each period is discounted to present value using a weighted average cost of capital. The core deposit intangibles are amortized over the estimated lives of the core deposits using a straight line amortization method.

The net proceeds are based upon the following assumptions:

• SR Bancorp will sell all shares of common stock offered in the subscription offering;

• SR Bancorp’s employee stock ownership plan will purchase, with a loan from SR Bancorp, a number of shares equal to 8.0% of the total number of conversion shares of SR Bancorp, which includes shares sold in the offering and shares contributed to Somerset Regal Charitable Foundation. The loan will be repaid in substantially equal payments of principal and interest over a 20-year period;

• total expenses of the offering, other than fees and commissions paid to KBW, will be $2.2 million;

• 5.0% of the value of the common stock issued in the offering and cash equal to 1.0% of the common stock issued in the offering (for a total of 6.0%) will be contributed to Somerset Regal Charitable Foundation; and

44

• KBW will receive fees equal to 1.0% of the aggregate purchase price of the shares of stock sold in the offering, excluding any shares contributed to Somerset Regal Charitable Foundation.

The expenses of the offering may vary from those estimated. These items, net of income tax effects, are shown as a reduction in shareholders’ equity in the following tables, but are not shown as a reduction in net income for the periods shown in the following tables.

We calculated the pro forma consolidated net income of SR Bancorp for the year as if the shares of common stock had been sold at the beginning of the year and the net proceeds had been invested at 3.99% (2.99% on an after-tax basis), which is equal to the yield on the five-year U.S. Treasury Note as of December 31, 2022. In light of current interest rates, we consider this rate to more accurately reflect the pro forma reinvestment rate than the arithmetic average method, which assumes reinvestment of the net proceeds at a rate equal to the average of the yield on interest-earning assets and the cost of deposits for those periods.

We further believe that the reinvestment rate is factually supportable because:

• the yield on the U.S. Treasury Note can be determined and/or estimated from third-party sources; and

• we believe that U.S. Treasury securities are not subject to credit losses due to a U.S. Government guarantee of payment of principal and interest.

We calculated historical and pro forma per share amounts by dividing historical and pro forma amounts of net income and shareholders’ equity by the indicated number of shares of common stock. For pro forma calculations, we adjusted these figures to give effect to the shares of common stock purchased by the employee stock ownership plan. We computed per share amounts for each period as if the common stock was outstanding at the beginning of the periods, but we did not adjust per share historical or pro forma shareholders’ equity to reflect the earnings on the estimated net proceeds.

The pro forma tables give effect to the implementation of a stock-based benefit plan. We have assumed that the stock-based benefit plan will acquire an amount of common stock equal to 4.0% of the shares of common stock of SR Bancorp offered in the stock offering and the shares contributed to the charitable foundation at the same price for which they were sold in the offering. We assume that shares of common stock are granted under the plan in awards that vest over a five-year period.

We have also assumed that the stock-based benefit plan will grant options to acquire common stock equal to 10.0% of the shares of common stock of SR Bancorp offered in the stock offering and the shares contributed to the charitable foundation. In preparing the following table, we also assumed that stockholder approval was obtained, that the exercise price of the stock options and the market price of the stock at the date of grant were $10.00 per share and that the stock options had a term of ten years and vested over five years. We applied the Black-Scholes option pricing model to estimate a grant-date fair value of $5.02 for each option. In addition to the terms of the options described above, the Black-Scholes option pricing model incorporated an estimated volatility rate of 31.47% for the common stock based on an index of publicly traded thrifts, no dividend yield, an expected option life of 10 years and a risk-free interest rate of 3.88%.

As disclosed under “How We Intend to Use the Proceeds from the Stock Offering,” SR Bancorp intends to contribute 50% of the net proceeds from the offering to Somerset Regal Bank. SR Bancorp will contribute up to $1.3 million to the charitable foundation, will use a portion of the proceeds it retains to fund the cash portion of the merger consideration, use a portion of the proceeds it retains to make a loan to the employee stock ownership plan and retain the rest of the proceeds for future use.

The pro forma table does not give effect to:

• withdrawals from deposit accounts for the purpose of purchasing shares of common stock in the offering;

• SR Bancorp’s results of operations after the offering;

45

• increased fees and expenses that we would pay KBW and other broker-dealers if we conducted a community or syndicated offering; or

• changes in the market price of the shares of common stock after the offering.

The unaudited condensed consolidated pro forma balance sheets assume the offering and the proposed Merger were consummated on December 31, 2022.

The pro forma unaudited statements are provided for informational purposes only. The pro forma financial information presented is not necessarily indicative of the actual results that would have been achieved had the offering and the Merger been consummated on December 31, 2022 at the beginning of the periods presented, and is not indicative of future results. The pro forma unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto of Somerset Savings Bank and Regal Bancorp contained elsewhere in this prospectus.

The shareholders’ equity represents the resulting book value of the common shareholders’ ownership of SR Bancorp and Regal Bancorp computed in accordance with accounting principles generally accepted in the United States of America. Pro forma shareholders’ equity and book value are not intended to represent the fair market value of the common stock and, due to the existence of the tax bad debt reserve and intangible assets, may be different than amounts that would be available for distribution to shareholders in the event of liquidation.

The unaudited pro forma net earnings and common shareholders’ equity derived from the above assumptions are qualified by the statements set forth under this caption and should not be considered indicative of the market value of SR Bancorp common stock or the actual results of operations of SR Bancorp and Regal Bancorp for any period. Such pro forma data may be materially affected by the actual gross proceeds from the sale of shares of SR Bancorp in the offering and the actual expenses incurred in connection with the offering and the proposed Merger.

Pro forma merger adjustments to net income include entries to reflect the estimated fair value adjustments on financial assets and liabilities and the amortization of identifiable intangible assets created in the proposed Merger. Excluded from the calculation of pro forma net income are any adjustments to reflect the estimated interest income to be earned on the net proceeds of the offering, the estimated interest income to be foregone on the cash required to fund the proposed Merger and related expenses, and other estimated expense reductions from consolidating the operations of Regal Bancorp with those of SR Bancorp.

46

PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

DECEMBER 31, 2022

The following table presents pro forma balance sheet information at December 31, 2022 at the minimum of the offering range assuming the issuance of 8,500,000 shares in the offering, and the contribution of 425,000 shares and $850,000 of cash to Somerset Regal Charitable Foundation.

	SR Bancorp Historical			Offering Adjustments (1)			SR Bancorp Pro Forma as Converted			Regal Bancorp Historical			Merger Adjustments (2)			SR Bancorp Pro Forma Consolidated
	(In thousands)
Assets
Cash and cash equivalents	$	7,385		$	70,103	(3)	$	77,488		$	13,014		$	(74,860	)(11)	$	15,642
Interest bearing-deposits in other financial institutions		19,750			—			19,750			106,473			—			126,223
Securities available for sale		41,062			—			41,062			15,477			—			56,539
Securities held to maturity		183,753			—			183,753			2,592			—			186,345
Equity securities at fair value		21			—			21			—			—			21
Loans receivable, net		357,616			—			357,616			339,259			(7,737	)(12)		689,138
Premises and equipment, net		3,597			—			3,597			1,819			—			5,416
Federal Home Loan Bank stock, at cost		702			—			702			784			—			1,486
Bank owned life insurance (BOLI)		28,384			—			28,384			7,346			—			35,730
Goodwill		—			—			—			1,085			22,849	(13)		23,934
Core deposit intangible		—			—			—			—			8,141	(14)		8,141
Other		7,243			1,275	(4)		8,518			7,830			(163	)(15)		16,185
Total assets	$	649,513		$	71,378		$	720,891		$	495,679		$	(51,770	)	$	1,164,800
Liabilities
Deposits	$	522,762		$	—		$	522,762		$	426,008		$	(1,607	)(16)	$	947,163
FHLB advances		—			—	(5)		—			5,000			—			5,000
Subordinated debt		—			—			—			9,915			—	(17)		9,915
Other liabilities		8,680			—			8,680			5,613			—			14,293
Total liabilities	$	531,442			—		$	531,442		$	446,536		$	(1,607	)	$	976,371
Shareholders’ equity
Common stock	$	—		$	89	(6)	$	89		$	—		$	—		$	89
Additional paid-in capital		—			85,824	(7)		85,824			34,358			(34,358	)(18)		85,824
Retained earnings		126,299			(3,825	)(8)		122,474			15,411			(16,431	)(19)		121,454
Accumulated other comprehensive loss		(8,228	)		—			(8,228	)		(626	)		626	(18)		(8,228	)
Employee stock ownership plan		—			(7,140	)(9)		(7,140	)		—			—			(7,140	)
Stock-based incentive plan		—			(3,570	)(10)		(3,570	)		—			—			(3,570	)
Total equity	$	118,071			71,378			189,449			49,143			(50,163	)		188,429
Total liabilities and equity	$	649,513		$	71,378		$	720,891		$	495,679		$	(51,770	)	$	1,164,800

(1) Shows the effect of the offering, assuming gross proceeds of $85.0 million at the minimum of the offering range, offering expenses of $3.3 million, establishment of an ESOP and granting of stock awards under a stock-based incentive plan that will acquire 8.0% and 4.0% of total offering and foundation shares outstanding, respectively, and a contribution of cash and common stock equal to 6% of the shares issued in the stock offering to Somerset Regal Charitable Foundation. The ESOP will purchase its shares in the offering and possibly open market purchases. The stock-based incentive plan will purchase shares in the open market after receiving shareholder approval to adopt the plan. Open market purchases by the ESOP and stock-based incentive plan are assumed at $10.00 per share.

(2) Reflects the purchase accounting and acquisition adjustments related to the acquisition of Regal Bancorp for a price of $23.00 per share in cash.

(footnotes continued on next page)

47

(footnotes continued from previous page)

(3) Calculated as follows:

	(In thousands)
Gross proceeds of offering	$	85,000
Estimated expenses		(3,337	)
Contribution of cash to Somerset Regal Charitable Foundation		(850	)
Common stock acquired by ESOP		(7,140	)
Common stock acquired by stock-based incentive plan		(3,570	)
Pro forma adjustment	$	70,103

(4) Deferred tax asset recorded to reflect the $5.1 million cash and stock contribution to Somerset Regal Charitable Foundation an effective tax rate of 25%.

(5) The ESOP loan is funded internally with a loan from SR Bancorp, thus no borrowing liability is recorded on the consolidated balance sheet of SR Bancorp.

(6) Par value $0.01 per share and the issuance of 8,500,000 shares in the offering and 425,000 shares contributed to Somerset Regal Charitable Foundation.

(7) Calculated as follows:

	(In thousands)
Net proceeds of offering	$	81,663
Contribution of stock to Somerset Regal Charitable Foundation		4,250
Less: par value (Footnote 6)		(89	)
Pro forma adjustment	$	85,824

(8) After tax expense of the cash and stock contribution to the foundation and a marginal tax rate of 25%.

(9) Contra-equity account established to reflect the obligation to repay the loan to the ESOP.

(10) Contra-equity account established to reflect the stock-based incentive plan.

(11) Includes the cash merger consideration paid to shareholders of Regal Bancorp, non-tax-deductible transaction expenses and tax deductible transaction expenses.

	(In thousands)
Cash merger consideration	$	69,537
Somerset merger costs expensed (pre-tax)		1,360
Regal Bancorp merger costs included in goodwill (after tax)		3,962
Retire Regal Bancorp subordinated debt [see footnote 17]		—
Total cash adjustment	$	74,860

(12) Reflects the reversal of the December 31, 2022 allowance for loan and lease losses of Regal Bancorp and a fair value adjustment applied to the acquired loans. The fair value adjustment includes a credit component and a yield component. The credit component include the estimated credit losses embedded in the acquired loans as of December 31, 2022. The yield component reflects the differences between market and portfolio yields as of June 30, 2022. The fair value adjustment will be accreted into income over the lives of the related loans.

	(In thousands)
Reversal of Regal Bancorp allowances	$	5,611
Fair value – credit component		(5,326	)
Fair value – yield component		(8,022	)
Pro forma adjustment	$	(7,737	)

(footnotes continued on next page)

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(footnotes continued from previous page)

(13) Goodwill is an intangible asset that is not subject to amortization. The goodwill balance will be tested annually for impairment. Goodwill is calculated as:

	Goodwill
	(In thousands, except share data)
Purchase price per share ($)				$	23.00
Number of Regal Bancorp shares acquired					3,023,369
Purchase price, net				$	69,537
Fair value of net assets
Acquired shareholders’ equity	$	49,143
Regal merger costs (after tax)		(3,962	)
Taxable purchase accounting adjustments:
Fair value adjustment for acquired certificates of deposits		1,607
Fair value adjustment for acquired loans		(13,348	)
Reverse allowance for loan losses		5,611
Core deposit intangible		8,141
Tax effect at the marginal tax rate of 25%	$	(503	)
Less: fair value of net assets				$	46,689
Goodwill adjustment				$	22,849

(14) Core deposit intangible is an identifiable intangible asset representing the economic value of the acquired Regal Bancorp core deposit base calculated as the present value benefit of funding operations with the acquired core deposit base versus using an alternative wholesale funding source. The core deposit intangible asset is amortized into expense over the estimated life of the core deposit base.

(15) Deferred tax entry consists for fair value adjustments $503,000 and Somerset merger costs $340,000.

(16) Fair value adjustment to reflect the difference between portfolio costs and market rates as of December 31, 2022 for time deposits acquired in the Merger. Yield adjustment is estimated using present value analysis and the fair value adjustment is amortized into expense over the lives of the related time deposits.

(17) Assumes the redemption of subordinated debt at the closing of the proposed Merger, with such redemption occurring only if the offering closes at the maximum or adjusted maximum of the offering range

(18) Adjustment to eliminate the historical Regal Bancorp capital account entries.

(19) Adjustment to retained earnings as follows:

	(In thousands)
Eliminate historical Regal Bancorp retained earnings	$	(15,411	)
Somerset merger costs pre-tax		(1,360	)
Deferred tax adjustment		340
Adjustment to paid-in capital	$	(16,431	)

49

PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

JUNE 30, 2022

The following table presents pro forma balance sheet information at June 30, 2022 at the minimum of the offering range assuming the issuance of 8,500,000 shares in the offering, and the contribution of 425,000 shares and $850,000 of cash to Somerset Regal Charitable Foundation.

	SR Bancorp Historical			Offering Adjustments (1)			SR Bancorp Pro Forma as Converted			Regal Bancorp Historical			Merger Adjustments (2)			SR Bancorp Pro Forma Consolidated
	(In thousands)
Assets
Cash and cash equivalents	$	7,557		$	70,103	(3)	$	77,660		$	151,755		$	(74,860	)(11)	$	154,555
Interest bearing-deposits in other financial institutions		27,787			—			27,787			14,656			—			42,443
Securities available for sale		47,857			—			47,857			15,591			—			63,448
Securities held to maturity		192,903			—			192,903			2,581			—			195,484
Equity securities at fair value		19			—			19			—			—			19
Loans receivable, net		334,558			—			334,558			338,707			(7,737	)(12)		665,528
Premises and equipment, net		3,443			—			3,443			1,987			—			5,430
Federal Home Loan Bank stock, at cost		702			—			702			784			—			1,486
Bank owned life insurance (BOLI)		28,056			—			28,056			7,270			—			35,326
Goodwill		—			—			—			1,094			24,216	(13)		25,310
Core deposit intangible		—			—			—			—			8,141	(14)		8,141
Other		5,749			1,275	(4)		7,024			3,751			(163	)(15)		10,612
Total assets	$	648,631		$	71,378		$	720,009		$	538,176		$	(50,403	)	$	1,207,782
Liabilities
Deposits	$	522,072		$	—		$	522,072		$	473,702		$	(1,607	)(16)	$	994,167
FHLB advances		—			—	(5)		—			5,000			—			5,000
Subordinated debt		—			—			—			9,909			—	(17)		9,909
Other liabilities		8,328			—			8,328			1,789			—			10,117
Total liabilities	$	530,400			—		$	530,400		$	490,400		$	(1,607	)	$	1,019,193
Shareholders’ equity
Common stock	$	—		$	89	(6)	$	89		$	—		$	—		$	89
Additional paid-in capital		—			85,824	(7)		85,824			34,358			(34,358	)(18)		85,824
Retained earnings		125,546			(3,825	)(8)		121,721			13,882			(14,902	)(19)		120,701
Accumulated other comprehensive loss		(7,315	)		—			(7,315	)		(464	)		464	(18)		(7,315	)
Employee stock ownership plan		—			(7,140	)(9)		(7,140	)		—			—			(7,140	)
Stock-based incentive plan		—			(3,570	)(10)		(3,570	)		—			—			(3,570	)
Total equity	$	118,231			71,378			189,609			47,776			(48,796	)		188,589
Total liabilities and equity	$	648,631		$	71,378		$	720,009		$	538,176		$	(50,403	)	$	1,207,782

(1) Shows the effect of the offering, assuming gross proceeds of $85.0 million at the minimum of the offering range, offering expenses of $3.3 million, establishment of an ESOP and granting of stock awards under a stock-based incentive plan that will acquire 8.0% and 4.0% of total offering and foundation shares outstanding, respectively, and a contribution of cash and common stock equal to 6% of the shares issued in the stock offering to Somerset Regal Charitable Foundation. The ESOP will purchase its shares in the offering and possibly open market purchases. The stock-based incentive plan will purchase shares in the open market after receiving shareholder approval to adopt the plan. Open market purchases by the ESOP and stock-based incentive plan are assumed at $10.00 per share.

(2) Reflects the purchase accounting and acquisition adjustments related to the acquisition of Regal Bancorp for a price of $23.00 per share in cash.

(footnotes continued on next page)

50

(footnotes continued from previous page)

(3) Calculated as follows:

	(In thousands)
Gross proceeds of offering	$	85,000
Estimated expenses		(3,337	)
Contribution of cash to Somerset Regal Charitable Foundation		(850	)
Common stock acquired by ESOP		(7,140	)
Common stock acquired by stock-based incentive plan		(3,570	)
Pro forma adjustment	$	70,103

(4) Deferred tax asset recorded to reflect the $5.1 million cash and stock contribution to Somerset Regal Charitable Foundation an effective tax rate of 25%.

(5) The ESOP loan is funded internally with a loan from SR Bancorp, thus no borrowing liability is recorded on the consolidated balance sheet of SR Bancorp.

(6) Par value $0.01 per share and the issuance of 8,500,000 shares in the offering and 425,000 shares contributed to Somerset Regal Charitable Foundation.

(7) Calculated as follows:

	(In thousands)
Net proceeds of offering	$	81,663
Contribution of stock to Somerset Regal Charitable Foundation		4,250
Less: par value (Footnote 6)		(89	)
Pro forma adjustment	$	85,824

(8) After tax expense of the cash and stock contribution to the foundation and a marginal tax rate of 25%.

(9) Contra-equity account established to reflect the obligation to repay the loan to the ESOP.

(10) Contra-equity account established to reflect the stock-based incentive plan.

(11) Includes the cash merger consideration paid to shareholders of Regal Bancorp, non-tax-deductible transaction expenses and tax deductible transaction expenses.

	(In thousands)
Cash merger consideration	$	69,537
Somerset merger costs expensed (pre-tax)		1,360
Regal Bancorp merger costs included in goodwill (after tax)		3,962
Retire Regal Bancorp subordinated debt [see footnote 17]		—
Total cash adjustment	$	74,860

(12) Reflects the reversal of the December 31, 2022 allowance for loan and lease losses of Regal Bancorp and a fair value adjustment applied to the acquired loans. The fair value adjustment includes a credit component and a yield component. The credit component include the estimated credit losses embedded in the acquired loans as of December 31, 2022. The yield component reflects the differences between market and portfolio yields as of June 30, 2022. The fair value adjustment will be accreted into income over the lives of the related loans.

	(In thousands)
Reversal of Regal Bancorp allowances	$	5,611
Fair value – credit component		(5,326	)
Fair value – yield component		(8,022	)
Pro forma adjustment	$	(7,737	)

(footnotes continued on next page)

51

(footnotes continued from previous page)

(13) Goodwill is an intangible asset that is not subject to amortization. The goodwill balance will be tested annually for impairment. Goodwill is calculated as:

	Goodwill
	(In thousands, except share data)
Purchase price per share ($)				$	23.00
Number of Regal Bancorp shares acquired					3,023,369
Purchase price, net				$	69,537
Fair value of net assets
Acquired shareholders’ equity	$	47,776
Regal merger costs (after tax)		(3,962	)
Taxable purchase accounting adjustments:
Fair value adjustment for acquired certificates of deposits		1,607
Fair value adjustment for acquired loans		(13,348	)
Reverse allowance for loan losses		5,611
Core deposit intangible		8,141
Tax effect at the marginal tax rate of 25%	$	(503	)
Less: fair value of net assets				$	45,322
Goodwill adjustment				$	24,216

(14) Core deposit intangible is an identifiable intangible asset representing the economic value of the acquired Regal Bancorp core deposit base calculated as the present value benefit of funding operations with the acquired core deposit base versus using an alternative wholesale funding source. The core deposit intangible asset is amortized into expense over the estimated life of the core deposit base.

(15) Deferred tax entry consists for fair value adjustments $503,000 and Somerset merger costs $340,000.

(16) Fair value adjustment to reflect the difference between portfolio costs and market rates as of December 31, 2022 for time deposits acquired in the Merger. Yield adjustment is estimated using present value analysis and the fair value adjustment is amortized into expense over the lives of the related time deposits.

(17) Assumes the redemption of subordinated debt at the closing of the proposed Merger, with such redemption occurring only if the offering closes at the maximum or adjusted maximum of the offering range.

(18) Adjustment to eliminate the historical Regal Bancorp capital account entries.

(19) Adjustment to retained earnings as follows:

	(In thousands)
Eliminate historical Regal Bancorp retained earnings	$	(13,882	)
Somerset merger costs pre-tax		(1,360	)
Deferred tax adjustment		340
Adjustment to paid-in capital	$	(14,902	)

52

PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

DECEMBER 31, 2022

The following table presents pro forma balance sheet information at December 31, 2022 at the adjusted maximum of the offering range assuming the issuance of 13,225,000 shares in the offering, and the contribution of 661,250 shares and $1.3 million of cash to Somerset Regal Charitable Foundation.

	SR Bancorp Historical			Offering Adjustments (1)			SR Bancorp Pro Forma as Converted			Regal Bancorp Historical			Merger Adjustments (2)			SR Bancorp Pro Forma Consolidated
	(In thousands)
Assets
Cash and cash equivalents	$	7,385		$	110,454	(3)	$	117,839		$	13,014		$	(84,775	)(11)	$	46,078
Interest-bearing deposits in other financial institutions		19,750			—			19,750			106,473			—			126,223
Securities available for sale		41,062			—			41,062			15,477			—			56,539
Securities held to maturity		183,753			—			183,753			2,592			—			186,345
Equity securities at fair value		21			—			21			—			—			21
Loans receivable, net		357,616			—			357,616			339,259			(7,737	)(12)		689,138
Premises and equipment, net		3,597			—			3,597			1,819			—			5,416
Federal Home Loan Bank stock, at cost		702			—			702			784			—			1,486
Bank owned life insurance (BOLI)		28,384			—			28,384			7,346			—			35,730
Goodwill		—			—			—			1,085			22,849	(13)		23,934
Core deposit intangible		—			—			—			—			8,141	(14)		8,141
Other		7,243			1,984	(4)		9,227			7,830			(163	)(15)		16,894
Total assets	$	649,513		$	112,438		$	761,951		$	495,679		$	(61,685	)	$	1,195,945
Liabilities
Deposits	$	522,762		$	—		$	522,762		$	426,008		$	(1,607	)(16)	$	947,163
FHLB advances		—			—	(5)		—			5,000			—			5,000
Subordinated debt		—			—			—			9,915			(9,915	)(17)		—
Other liabilities		8,680			—			8,680			5,613			—			14,293
Total liabilities	$	531,442		$	—		$	531,442		$	446,536		$	(11,522	)	$	966,456
Shareholders’ equity
Common stock	$	—		$	139	(6)	$	139		$	—		$	—		$	139
Additional paid-in capital		—			134,914	(7)		134,914			34,358			(34,358	)(18)		134,914
Retained earnings		126,299			(5,951	)(8)		120,348			15,411			(16,431	)(19)		119,328
Accumulated other comprehensive loss		(8,228	)		—			(8,228	)		(626	)		626	(18)		(8,228	)
Employee stock ownership plan		—			(11,109	)(9)		(11,109	)		—			—			(11,109	)
Equity incentive plan		—			(5,555	)(10)		(5,555	)		—			—			(5,555	)
Total equity	$	118,071		$	112,438		$	230,509		$	49,143		$	(50,163	)	$	229,489
Total liabilities and equity	$	649,513		$	112,438		$	761,951		$	495,679		$	(61,685	)	$	1,195,945

(1) Shows the effect of the offering, assuming gross proceeds of $132.2 million at the adjusted maximum of the valuation range, offering expenses of $3.8 million, establishment of an ESOP and granting of stock awards under a stock-based incentive plan that will acquire 8.0% and 4.0% of total offering and foundation shares outstanding, respectively, and a contribution of cash and common stock equal to 6% of the shares issued in the offering to Somerset Regal Charitable Foundation. The ESOP will purchase its shares in the offering and possibly open market purchases. The stock-based incentive plan will purchase shares in the open market after receiving shareholder approval to adopt the plan. Open market purchases by the ESOP and equity incentive plan are assumed at $10.00 per share.

(2) Reflects the purchase accounting and acquisition adjustments related to the acquisition of Regal Bancorp for a price of $23.00 per share in cash and authorized but unissued shares of common stock.

(footnotes continued on next page)

53

(footnotes continued from previous page)

(3) Calculated as follows:

	(In thousands)
Gross proceeds of offering	$	132,250
Estimated expenses		(3,810	)
Contribution of cash to Foundation		(1,323	)
Common stock acquired by ESOP		(11,109	)
Common stock acquired by equity incentive plan		(5,555	)
Pro forma adjustment	$	110,454

(4) Deferred tax asset recorded to reflect the $7.9 million cash and stock contribution to Somerset Regal Charitable Foundation and a marginal tax rate of 25%.

(5) The ESOP loan is funded internally with a loan from SR Bancorp, thus no borrowing liability is recorded on the consolidated balance sheet of SR Bancorp.

(6) Par value $0.01 per share and the issuance of 13,225,000 shares in the offering and 661,250 shares contributed to Somerset Regal Charitable Foundation.

(7) Calculated as follows:

	(In thousands)
Net proceeds of offering	$	128,440
Contribution of stock to Foundation		6,613
Less: par value (Footnote 6)		(139	)
Pro forma adjustment	$	134,914

(8) After tax expense of the cash and stock contribution to the foundation and a tax rate of 25%.

(9) Contra-equity account established to reflect the obligation to repay the loan to the ESOP.

(10) Contra-equity account established to reflect the stock-based incentive plan.

(11) Includes the cash consideration paid to shareholders of Regal Bancorp, non-tax-deductible transaction expenses and tax deductible transaction expenses.

	(In thousands)
Cash consideration	$	69,537
Somerset merger costs expensed (pre tax)		1,360
Regal Bancorp merger costs included in goodwill (after tax)		3,962
Retire Regal Bancorp subordinated debt		9,915
Total cash adjustment	$	84,775

(12) Reflects the reversal of the December 31, 2022 allowance for loan and lease losses of Regal Bancorp and a fair value adjustment applied to the acquired loans. The fair value adjustment includes a credit component and a yield component. The credit component includes the estimated credit losses embedded in the acquired loans as of December 31, 2022. The yield component reflects the differences between market and portfolio yields as of December 31, 2022. The fair value adjustment will be accreted into income over the lives of the related loans.

	(In thousands)
Reversal of Regal Bancorp allowances	$	5,611
Fair value – credit component		(5,326	)
Fair value – yield component		(8,022	)
Pro forma adjustment	$	(7,737	)

(footnotes continued on next page)

54

(footnotes continued from previous page)

(13) Goodwill is an intangible asset that is not subject to amortization. The goodwill balance will be tested annually for impairment. Goodwill is calculated as:

	Goodwill
	(In thousands, except per share data)
Purchase price per share ($)				$	23.00
Number of Regal shares acquired					3,023,369
Purchase price, net				$	69,537
Fair value of net assets
Acquired shareholders’ equity	$	49,143
Regal merger costs (after tax)		(3,962	)
Taxable purchase accounting adjustments:
Fair value adjustment for acquired certificates of deposits s		1,607
Fair value adjustment for acquired loans		(13,348	)
Reverse allowance for loan losses		5,611
Core deposit intangible		8,141
Tax effect at the marginal tax rate of 25%	$	(503	)
Less: fair value of net assets				$	46,689
Goodwill adjustment				$	22,849

(14) Core deposit intangible is an identifiable intangible asset representing the economic value of the acquired Regal Bancorp core deposit base, calculated as the present value benefit of funding operations with the acquired core deposit base versus using an alternative wholesale funding source. The core deposit intangible asset is amortized into expense over the estimated life of the core deposit base.

(15) Deferred tax entry consists for fair value adjustments $503,000 and Somerset merger costs $340,000.

(16) Fair value adjustment to reflect the difference between portfolio costs and market rates as of December 31, 2022 for time deposits acquired in the Merger. Yield adjustment is estimated using present value analysis and the fair value adjustment is amortized into expense over the lives of the related time deposits.

(17) Assumes the redemption of subordinated debt at the closing of the proposed Merger, with such redemption occurring only if the offering closes at the maximum or adjusted maximum of the offering range.

(18) Adjustment to eliminate the historical Regal Bancorp capital account entries.

(19) Adjustment to paid-in capital is calculated as follows:

	(In thousands)
Eliminate historical Regal Bancorp retained earnings	$	(15,411	)
Somerset merger costs pre-tax		(1,360	)
Deferred tax adjustment		340
Adjustment to paid-in capital	$	(16,431	)

55

PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

JUNE 30, 2022

The following table presents pro forma balance sheet information at June 30, 2022 at the adjusted maximum of the offering range assuming the issuance of 13,225,000 shares in the offering, and the contribution of 661,250 shares and $1.3 million of cash to Somerset Regal Charitable Foundation.

	SR Bancorp Historical		Offering Adjustments (1)			SR Bancorp Pro Forma as Converted		Regal Bancorp Historical		Merger Adjustments (2)			SR Bancorp Pro Forma Consolidated
	(In thousands)
Assets
Cash and cash equivalents	$	7,557	$	110,454	(3)	$	118,011	$	151,755	$	(84,769	)(11)	$	184,997
Interest-bearing deposits in other financial institutions		27,787		—			27,787		14,656		—			42,443
Securities available for sale		47,857		—			47,857		15,591		—			63,448