Financial Advisory Assignments

Somerset Savings Bank to Conduct Conversion and Merge with Regal Bancorp, Inc.

Bound Brook, New Jersey and Livingston, New Jersey — (July 25, 2022) Somerset Savings Bank, SLA (“Somerset Savings”) announced today that its Board of Directors has adopted a plan of conversion to convert from the mutual to stock form of organization. SR Bancorp, Inc., a newly formed Maryland corporation (“SR Bancorp” or the “Company”), has been organized to facilitate the conversion and offer shares of common stock to certain depositors of Somerset Savings and others in a subscription and community offering. The number and price of the shares to be issued in the conversion offering will be based on an independent appraisal that has yet to be performed. In addition, and to further support the communities in which Somerset Savings operates, it is intended that a charitable foundation will be established and funded with conversion stock and cash as part of the transaction.

In connection with the conversion, the Boards of Directors of Somerset Savings and SR Bancorp entered into a definitive agreement to merge with Regal Bancorp, Inc. (“Regal Bancorp”) and its subsidiary Regal Bank. In the merger, Regal Bancorp will merge with and into SR Bancorp, with SR Bancorp as the surviving entity, and Regal Bank will merge with and into Somerset Savings, with Somerset Savings as the surviving institution under the name Somerset Regal Bank. In connection with the conversion and merger, Somerset Savings also intends to convert to a New Jersey chartered commercial bank.

Pursuant to the terms of the merger agreement, Regal Bancorp shareholders may elect to receive 1.93 shares of SR Bancorp, Inc. common stock (based on a $10.00 per share offering price) or $19.30 in cash for each share of Regal Bancorp common stock, subject to the allocation and proration procedures set forth in the merger agreement, which require that 80% of the merger consideration be Company common stock and 20% of the merger consideration be cash. If SR Bancorp issues a number of shares of its common stock in its conversion stock offering that is above the midpoint of the offering range established in the independent appraisal, then the aggregate stock portion of the merger consideration will be increased to 90%. The aggregate transaction value of the merger is approximately $58.4 million.

Commenting on the transaction, David Orbach, Executive Chairman of Regal Bancorp, Inc. stated “Regal shares a like-minded philosophy with the executives of Somerset in their management style and adherence to sound principles. We are very excited to be partnering with an outstanding community bank that has a long history of providing quality financial products and services to the communities and markets it serves. I look forward to working together on the future growth and success of the combined institution.”

Thomas Lupo, President and CEO of Regal Bank, stated: “The merger represents a great opportunity for our shareholders, customers and employees. It will benefit the customers of both institutions, allowing us to offer our commercial lending products and knowledge to Somerset customers, while Regal customers will benefit from Somerset’s residential lending products and experience.”

Regal Bancorp was advised by The Kafafian Group, Inc. and Windels Marx Lane & Mittendorf, LLP.