Hanover Bancorp, Inc. (“Hanover” or “the Company”
– NASDAQ: HNVR), the holding company for Hanover
Community Bank (“the Bank”), today reported results for
the quarter ended December 31, 2023 and the declaration of a
$0.10 per share cash dividend on both common and Series A
preferred shares payable on February 14, 2024 to stockholders
of record on February 7, 2024.
Earnings Summary for the
Quarter Ended December 31, 2023
The Company reported net income for the
quarter ended December 31, 2023 of $3.8 million or
$0.51 per diluted share (including Series A preferred shares),
versus $5.3 million or $0.72 per diluted share (including
Series A preferred shares) in the comparable period a year ago
and $3.5 million or $0.48 per diluted share (including
Series A preferred shares) for the quarter ended
September 30, 2023. The Company recorded adjusted (non-GAAP)
net income (excluding severance expense) of $4.0 million or
$0.54 per diluted share for the quarter ended
December 31, 2023, versus net income of $5.3 million or
$0.72 per diluted share in the comparable 2022 quarter (which
included no adjustments) and adjusted (non-GAAP) net income
(excluding litigation settlement payment) of $2.8 million or
$0.38 per diluted share for the quarter ended
September 30, 2023, an increase of 43.4% over the linked
quarter. Returns on average assets and average stockholders’ equity
were 0.69% and 8.10%, respectively, in the quarter ended
December 31, 2023, versus 1.18% and 12.04%, respectively, in
the comparable quarter of 2022, and 0.66% and 7.58%, respectively,
in the quarter ended September 30, 2023. Adjusted
(non-GAAP) returns on average assets and average stockholders’
equity were 0.74% and 8.61%, respectively, in the
quarter ended December 31, 2023, versus 1.18% and 12.04%,
respectively, in the comparable quarter of 2022, and 0.53% and
6.00%, respectively, in the quarter ended September 30,
2023.
The reduction in net income recorded in the
fourth calendar quarter of 2023 from the comparable 2022 quarter
resulted from two primary factors. The first was a decrease in net
interest income primarily related to the rapid rise in interest
rates driven by the Federal Reserve as the cost of interest bearing
deposits rose faster that the yield on interest earning assets. The
second was an increase in non-interest expense largely due to
growth related increases in compensation and benefits, occupancy
and equipment, federal deposit insurance premiums and other
operating expenses, which were partially offset by a decrease in
the provision for credit losses and an increase in non-interest
income. In addition, the Company’s effective tax rate increased to
25.4% in the fourth calendar quarter of 2023 from 22.7% in the
comparable 2022 period due to increased business in other states,
related to our SBA and USDA lending program, coupled with lower
pre-tax income.
Net interest income was $12.7 million for
the quarter ended December 31, 2023, a decrease of
$2.6 million, or 17.1% versus the comparable 2022 period due
to compression of the Company’s net interest margin to 2.40% in the
2023 quarter from 3.49% in the comparable 2022 quarter. The yield
on interest earning assets increased to 5.91% in the 2023 quarter
from 5.17% in the comparable 2022 quarter, an increase of
74 basis points, offset by a 211 basis point increase in
the cost of interest-bearing liabilities to 4.19% in 2023 from
2.08% in the fourth calendar quarter of 2022. The rapid rise in
interest rates driven by the Federal Reserve and, to a lesser
extent, the Company’s decision to maintain increased liquidity
resulted in the higher cost of funds. Net interest income on a
linked quarter basis increased $0.9 million or 7.29%.
Michael P. Puorro, Chairman and Chief Executive
Officer, commented on the Company’s quarterly results: “We are
extremely pleased with our fourth calendar quarter results
highlighted by a 42% increase in adjusted diluted EPS, driven by
margin expansion and increasing returns from our investments in SBA
and C&I Banking. Together with our sustained focus on cost
management, these new initiatives will enhance earnings and capital
growth into the future. We continue to focus on increasing fee
income and cost management while we further build our business
verticals. We believe the composition of our balance sheet, coupled
with our growing initiatives, positions us well for the favorable
interest rate environment in 2024 anticipated by economists for the
financial sector.”
Balance Sheet Highlights
Total assets at December 31, 2023 were
$2.27 billion versus $2.15 billion at September 30,
2023. Total securities available for sale at December 31, 2023
was $61.4 million, an increase of $50.5 million from
September 30, 2023, primarily driven by growth in
collateralized loan obligations (“CLO”). These CLOs are
adjustable-rate investments tied to three-month SOFR, purchased at
a weighted average yield of 7.05%. Total deposits at
December 31, 2023 increased to $1.90 billion compared to
$1.74 billion at September 30, 2023. During the quarter
ended December 31, 2023, total deposits increased
$169.5 million or 9.8% from September 30, 2023. This
deposit growth has enabled us to lessen our reliance on higher cost
wholesale borrowings while also lowering our loan to deposit ratio
from 108% at September 30, 2023 to 103% at December 31,
2023.
The Company had $528.1 million in total
municipal deposits at December 31, 2023, at a weighted average
rate of 4.62% versus $313.2 million at a weighted average rate
of 4.53% at September 30, 2023. The Company’s municipal
deposit program is built on long-standing relationships developed
in the local marketplace. This core deposit business will continue
to provide a stable source of funding for the Company’s lending
products at costs lower than those of consumer deposits and
market-based borrowings. The Company continues to broaden its
municipal deposit base and currently services 37 customer
relationships.
Overall borrowings declined $50.9 million
or 28.3% from September 30, 2023. Total borrowings at
December 31, 2023 were $129.0 million, including
$2.3 million in Federal Reserve Paycheck Protection Program
Liquidity Facility advances, with a weighted average rate and term
of 3.59% and 31 months, respectively. At December 31,
2023 and September 30, 2023, the Company had
$126.7 million of term FHLB advances outstanding. The Company
had $49.0 million of FHLB overnight borrowings outstanding at
September 30, 2023 and none at December 31, 2023. The
Company utilizes a number of strategies to manage interest rate
risk, including interest rate swap agreements which currently
provide a benefit to net interest income.
Stockholders’ equity was $184.8 million at
December 31, 2023 compared to $185.9 million at
September 30, 2023. The $1.1 million decrease was
primarily due to an increase of $1.1 million in accumulated
other comprehensive loss and a decrease of $0.1 million in
retained earnings. The decrease in retained earnings was due
primarily to a $4.0 million, or $3.2 million net of tax,
one-time adjustment related to the implementation of the CECL
accounting standard on October 1, 2023 and $0.7 million
of dividends declared, which was offset by net income of
$3.8 million for the quarter ended December 31,
2023. The CECL adjustment included $4.1 million additional
allowance for credit losses on the loan portfolio and a
$0.1 million reduction of allowance for credit losses on
unfunded commitments. There was no adjustment recognized related to
the securities portfolio. The accumulated other comprehensive loss
at December 31, 2023 was 1.33% of total equity and was
comprised of a $1.5 million after tax net unrealized loss on
the investment portfolio and a $1.0 million after tax net
unrealized loss on derivatives.
Loan Portfolio Growth, Asset Quality and
Allowance for Credit Losses
On a linked quarter basis, the Company exhibited
net loan growth of $82.6 million, a 17.6% increase on an
annualized basis. For the twelve months ended
December 31, 2023, the Bank’s loan portfolio grew to
$1.96 billion, for an increase of 12.0%. Year over year growth
was concentrated primarily in residential, SBA and
C&I loans. At December 31, 2023, the Company’s
residential loan portfolio (including home equity) amounted to
$714.8 million, with an average loan balance of
$488 thousand and a weighted average loan-to-value ratio of
57%. Commercial real estate and multifamily loans totaled
$1.13 billion at December 31, 2023, with an average loan
balance of $1.5 million and a weighted average loan-to-value
ratio of 60%. The Company’s commercial real estate concentration
ratio decreased to 432% of capital at December 31, 2023 versus
448% of capital at September 30, 2023, with loans secured by
office space accounting for 2.4% of the total loan portfolio and
totaling $47.8 million. The Company’s loan pipeline at
December 31, 2023 is approximately $272 million, with
approximately 93% being niche-residential, conventional C&I and
SBA and USDA lending opportunities.
Historically, the Bank has generated additional
income by strategically originating and selling residential and
government guaranteed loans to other financial institutions at
premiums, while also retaining servicing rights in some sales.
However, due to the pace of interest rate increases since 2022, the
Bank’s secondary market sale activity for residential loans remains
less active, and the Bank continues originating residential loans
for its own portfolio. During the quarter ended
December 31, 2023 and 2022, the Company sold SBA loans of
$29.7 million and $8.0 million, respectively and recorded
gain on sale of loans held-for-sale of $2.3 million and
$0.6 million.
The Bank’s asset quality ratios remain strong
and among the best in its peer group of community banks. At
December 31, 2023, the Company reported $14.5 million in
non-performing loans which represented 0.74% of total loans
outstanding. Of the non-performing loans, $8.2 million are
legacy Savoy Bank originated loans that were either written down to
fair value at the acquisition date or are 100% guaranteed by the
SBA. Non-performing loans were $15.1 million at
September 30, 2023. In October 2023, a $1.1 million
non-performing non-owner occupied residential loan paid in full.
During the fourth calendar quarter of 2023, the Bank recorded a
provision for credit losses expense of $0.2 million. The
December 31, 2023, allowance for credit losses balance was
$19.7 million versus $14.7 million at September 30,
2023. The increase in the allowance for credit losses on loans is
mostly attributable to the $4.1 million adjustment made upon
adoption of ASU 2016-13, Financial Instruments-Credit
Losses (Topic 326), and additional provisioning related
to increased loan volume. The allowance for credit losses as a
percent of total loans was 1.00% at December 31, 2023 versus
0.78% at September 30, 2023.
Net Interest Margin
The Bank’s net interest margin increased to
2.40% for the quarter ended December 31, 2023 from 2.29% in
the September 30, 2023 quarter. The increase from the
prior linked quarter was primarily related to the increase in the
average yield on loans and decrease in the average cost of
borrowings, partially offset by the increase in the average cost of
deposits. The Bank’s net interest margin was 3.49% in the
December 31, 2022 quarter. The decrease from the prior year
quarter was primarily related to the increase in the total cost of
funds, partially offset by the increase in the average yield on
loans and to a lesser extent, the Company’s decision to increase
liquidity as a result of the recent industry events. The year over
year margin compression reflects the effects of the rapid and
significant rise in interest rates and the competitive deposit
environment. We believe the Company is well positioned for the
favorable interest rate environment anticipated by economic
forecasts.
Fiscal Year Change
In October 2023, the Company’s Board of
Directors approved a change in the Company’s fiscal year end from
September 30 to December 31. Accordingly, the Company is
reporting a transition quarter that runs from October 1, 2023
through December 31, 2023. The Company’s next full fiscal year
began on January 1, 2024. This change will help our
shareholders in reviewing our financial results and evaluating our
performance. The change in the Company’s fiscal year had no impact
on the Company’s historical consolidated financial position,
results of operations, or cash flows.
About Hanover Community Bank and Hanover
Bancorp, Inc.
Hanover Bancorp, Inc. (NASDAQ: HNVR), is the
bank holding company for Hanover Community Bank, a community
commercial bank focusing on highly personalized and efficient
services and products responsive to client needs. Management and
the Board of Directors are comprised of a select group of
successful local businesspeople who are committed to the success of
the Bank by knowing and understanding the metro-New York area’s
financial needs and opportunities. Backed by state-of-the-art
technology, Hanover offers a full range of financial services.
Hanover employs a complete suite of consumer, commercial, and
municipal banking products and services, including multi-family and
commercial mortgages, residential loans, business loans and lines
of credit. Hanover also offers its customers access to 24-hour ATM
service with no fees attached, free checking with interest,
telephone banking, advanced technologies in mobile and internet
banking for our consumer and business customers, safe deposit boxes
and much more. The Company’s corporate administrative office is
located in Mineola, New York where it also operates a full-service
branch office along with additional branch locations in Garden City
Park, Hauppauge, Forest Hills, Flushing, Sunset Park, Rockefeller
Center and Chinatown, New York, and Freehold, New Jersey.
Hanover Community Bank is a member of the
Federal Deposit Insurance Corporation and is an Equal Housing/Equal
Opportunity Lender. For further information, call
(516) 548-8500 or visit the Bank’s website at
www.hanoverbank.com.
Non-GAAP Disclosure
This discussion includes non-GAAP financial
measures, including the Company’s adjusted net income, adjusted
returns on average assets and shareholders’ equity, adjusted
operating efficiency ratio, and tangible common equity. A non-GAAP
financial measure is a numerical measure of historical or future
performance, financial position or cash flows that excludes or
includes amounts that are required to be disclosed in the most
directly comparable measure calculated and presented in accordance
with generally accepted accounting principles in the United States
(“U.S. GAAP”). The Company’s management believes that the
presentation of non-GAAP financial measures provides both
management and investors with a greater understanding of the
Company’s operating results and trends in addition to the results
measured in accordance with GAAP, and provides greater
comparability across time periods. While management uses non-GAAP
financial measures in its analysis of the Company’s performance,
this information is not meant to be considered in isolation or as a
substitute for the numbers prepared in accordance with U.S. GAAP or
considered to be more important than financial results determined
in accordance with U.S. GAAP. The Company’s non-GAAP financial
measures may not be comparable to similarly titled measures used by
other financial institutions.
With respect to the calculations of adjusted net
income and adjusted operating efficiency ratio for the periods
presented in this discussion, reconciliations to the most
comparable U.S. GAAP measures are provided in the tables that
follow.
Forward-Looking Statements
This release may contain certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and may be identified by
the use of such words as "may," "believe," "expect," "anticipate,"
"should," "plan," "estimate," "predict," "continue," and
"potential" or the negative of these terms or other comparable
terminology. Examples of forward-looking statements include, but
are not limited to, estimates with respect to the financial
condition, results of operations and business of Hanover Bancorp,
Inc. Any or all of the forward-looking statements in this release
and in any other public statements made by Hanover Bancorp, Inc.
may turn out to be incorrect. They can be affected by inaccurate
assumptions that Hanover Bancorp, Inc. might make or by known or
unknown risks and uncertainties, including those discussed in our
Annual Report on Form 10-K under Item 1A - Risk Factors, as updated
by our subsequent filings with the Securities and Exchange
Commission. Further, the adverse effect of the COVID-19 pandemic on
the Company, its customers, and the communities where it operates
may adversely affect the Company’s business, results of operations
and financial condition for an indefinite period of time.
Consequently, no forward-looking statement can be guaranteed.
Hanover Bancorp, Inc. does not intend to update any of the
forward-looking statements after the date of this release or to
conform these statements to actual events.
This release does not constitute an offer of any
securities for sale.
Investor and Press Contact:Lance P. BurkeChief
Financial Officer(516) 548-8500
HANOVER BANCORP, INC. |
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STATEMENTS OF CONDITION (unaudited) |
|
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|
|
|
|
(dollars in thousands) |
|
|
|
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|
|
|
|
|
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|
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|
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|
December
31, |
|
September
30, |
|
December
31, |
|
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
177,207 |
|
|
$ |
192,624 |
|
|
$ |
152,298 |
|
|
Securities-available for sale, at fair value |
|
61,419 |
|
|
|
10,889 |
|
|
|
12,151 |
|
|
Investments-held to maturity |
|
4,041 |
|
|
|
4,108 |
|
|
|
4,336 |
|
|
Loans held for sale |
|
8,332 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Loans, net of deferred loan fees and costs |
|
1,957,199 |
|
|
|
1,874,562 |
|
|
|
1,746,810 |
|
|
Less: allowance for credit losses(1) |
|
(19,658 |
) |
|
|
(14,686 |
) |
|
|
(14,404 |
) |
|
Loans, net |
|
1,937,541 |
|
|
|
1,859,876 |
|
|
|
1,732,406 |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
19,168 |
|
|
|
19,168 |
|
|
|
19,168 |
|
|
Premises & fixed assets |
|
15,886 |
|
|
|
16,057 |
|
|
|
14,886 |
|
|
Operating lease assets |
|
9,754 |
|
|
|
10,193 |
|
|
|
11,409 |
|
|
Other assets |
|
36,712 |
|
|
|
36,620 |
|
|
|
37,038 |
|
|
|
Assets |
$ |
2,270,060 |
|
|
$ |
2,149,535 |
|
|
$ |
1,983,692 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
Core deposits |
$ |
1,382,397 |
|
|
$ |
1,204,994 |
|
|
$ |
1,128,394 |
|
|
Time deposits |
|
522,198 |
|
|
|
530,076 |
|
|
|
389,256 |
|
|
Total deposits |
|
1,904,595 |
|
|
|
1,735,070 |
|
|
|
1,517,650 |
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
128,953 |
|
|
|
179,849 |
|
|
|
238,273 |
|
|
Subordinated debentures |
|
24,635 |
|
|
|
24,621 |
|
|
|
24,581 |
|
|
Operating lease liabilities |
|
10,459 |
|
|
|
10,899 |
|
|
|
12,063 |
|
|
Other liabilities |
|
16,588 |
|
|
|
13,189 |
|
|
|
13,497 |
|
|
|
Liabilities |
|
2,085,230 |
|
|
|
1,963,628 |
|
|
|
1,806,064 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
184,830 |
|
|
|
185,907 |
|
|
|
177,628 |
|
|
|
Liabilities and stockholders' equity |
$ |
2,270,060 |
|
|
$ |
2,149,535 |
|
|
$ |
1,983,692 |
|
|
|
|
|
|
|
|
|
|
(1) CECL was adopted effective 10/1/23. Prior periods were
based on the incurred loss methodology. |
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|
HANOVER BANCORP, INC. |
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CONSOLIDATED STATEMENTS OF INCOME (unaudited) |
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(dollars in thousands, except per share data) |
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Three Months Ended |
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|
|
12/31/2023 |
|
12/31/2022 |
|
|
|
|
|
|
|
Interest income |
$ |
31,155 |
|
$ |
22,572 |
|
Interest expense |
|
18,496 |
|
|
7,308 |
|
|
Net interest income |
|
12,659 |
|
|
15,264 |
|
Provision for credit losses(1) |
|
200 |
|
|
1,500 |
|
|
Net
interest income after provision for credit losses |
|
12,459 |
|
|
13,764 |
|
|
|
|
|
|
|
Loan servicing and fee income |
|
778 |
|
|
678 |
|
Service charges on deposit accounts |
|
85 |
|
|
63 |
|
Gain on sale of loans held-for-sale |
|
2,326 |
|
|
578 |
|
Other operating income |
|
65 |
|
|
92 |
|
|
Non-interest income |
|
3,254 |
|
|
1,411 |
|
|
|
|
|
|
|
Compensation and benefits |
|
5,242 |
|
|
4,332 |
|
Occupancy and equipment |
|
1,746 |
|
|
1,477 |
|
Data processing |
|
530 |
|
|
418 |
|
Professional fees |
|
729 |
|
|
683 |
|
Federal deposit insurance premiums |
|
375 |
|
|
158 |
|
Other operating expenses |
|
2,048 |
|
|
1,203 |
|
|
Non-interest expense |
|
10,670 |
|
|
8,271 |
|
|
|
|
|
|
|
|
Income before income taxes |
|
5,043 |
|
|
6,904 |
|
Income tax expense |
|
1,280 |
|
|
1,566 |
|
|
|
|
|
|
|
|
Net
income |
$ |
3,763 |
|
$ |
5,338 |
|
|
|
|
|
|
|
Earnings per share ("EPS"):(2) |
|
|
|
|
Basic |
$ |
0.51 |
|
$ |
0.73 |
|
Diluted |
$ |
0.51 |
|
$ |
0.72 |
|
|
|
|
|
|
|
Average shares outstanding for basic EPS(2)(3) |
|
7,324,133 |
|
|
7,292,940 |
|
Average shares outstanding for diluted EPS(2)(3) |
|
7,383,529 |
|
|
7,387,938 |
|
|
|
|
|
|
|
(1) CECL was adopted effective 10/1/23. Prior periods were
based on the incurred loss methodology. |
|
(2) Calculation includes common stock and Series A preferred
stock. |
|
(3) Average shares outstanding before subtracting
participating securities. |
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|
Note: Prior period information has been
adjusted to conform to current period presentation. |
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HANOVER BANCORP, INC. |
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|
|
CONSOLIDATED STATEMENTS OF INCOME (unaudited) |
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|
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|
QUARTERLY TREND |
|
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|
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|
(dollars in thousands, except per share data) |
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|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
3/31/2023 |
|
12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
31,155 |
|
$ |
28,952 |
|
$ |
28,459 |
|
$ |
25,060 |
|
$ |
22,572 |
|
Interest expense |
|
18,496 |
|
|
17,153 |
|
|
14,954 |
|
|
11,136 |
|
|
7,308 |
|
|
Net interest income |
|
12,659 |
|
|
11,799 |
|
|
13,505 |
|
|
13,924 |
|
|
15,264 |
|
Provision for credit losses(1) |
|
200 |
|
|
500 |
|
|
500 |
|
|
932 |
|
|
1,500 |
|
|
Net
interest income after provision for credit losses |
|
12,459 |
|
|
11,299 |
|
|
13,005 |
|
|
12,992 |
|
|
13,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan servicing and fee income |
|
778 |
|
|
681 |
|
|
811 |
|
|
539 |
|
|
678 |
|
Service charges on deposit accounts |
|
85 |
|
|
75 |
|
|
70 |
|
|
67 |
|
|
63 |
|
Gain on sale of loans held-for-sale |
|
2,326 |
|
|
1,468 |
|
|
1,052 |
|
|
995 |
|
|
578 |
|
Other operating income |
|
65 |
|
|
1,483 |
|
|
41 |
|
|
155 |
|
|
92 |
|
|
Non-interest income |
|
3,254 |
|
|
3,707 |
|
|
1,974 |
|
|
1,756 |
|
|
1,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
5,242 |
|
|
5,351 |
|
|
5,405 |
|
|
5,564 |
|
|
4,332 |
|
Occupancy and equipment |
|
1,746 |
|
|
1,758 |
|
|
1,587 |
|
|
1,537 |
|
|
1,477 |
|
Data processing |
|
530 |
|
|
516 |
|
|
576 |
|
|
441 |
|
|
418 |
|
Professional fees |
|
729 |
|
|
800 |
|
|
781 |
|
|
881 |
|
|
683 |
|
Federal deposit insurance premiums |
|
375 |
|
|
386 |
|
|
357 |
|
|
358 |
|
|
158 |
|
Other operating expenses |
|
2,048 |
|
|
1,506 |
|
|
1,860 |
|
|
1,786 |
|
|
1,203 |
|
|
Non-interest expense |
|
10,670 |
|
|
10,317 |
|
|
10,566 |
|
|
10,567 |
|
|
8,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
5,043 |
|
|
4,689 |
|
|
4,413 |
|
|
4,181 |
|
|
6,904 |
|
Income tax expense |
|
1,280 |
|
|
1,166 |
|
|
1,319 |
|
|
972 |
|
|
1,566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
3,763 |
|
$ |
3,523 |
|
$ |
3,094 |
|
$ |
3,209 |
|
$ |
5,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share ("EPS"):(2) |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.51 |
|
$ |
0.48 |
|
$ |
0.42 |
|
$ |
0.44 |
|
$ |
0.73 |
|
Diluted |
$ |
0.51 |
|
$ |
0.48 |
|
$ |
0.42 |
|
$ |
0.43 |
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding for basic EPS(2)(3) |
|
7,324,133 |
|
|
7,327,345 |
|
|
7,332,090 |
|
|
7,324,036 |
|
|
7,292,940 |
|
Average shares outstanding for diluted EPS(2)(3) |
|
7,383,529 |
|
|
7,407,483 |
|
|
7,407,613 |
|
|
7,406,933 |
|
|
7,387,938 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) CECL was
adopted effective 10/1/23. Prior periods were based on the incurred
loss methodology. |
|
(2) Calculation
includes common stock and Series A preferred stock. |
|
(3) Average
shares outstanding before subtracting participating
securities. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Prior period information has been
adjusted to conform to current period presentation. |
|
|
|
|
|
|
|
|
|
|
|
|
|
HANOVER BANCORP, INC. |
|
|
|
|
|
|
CONSOLIDATED NON-GAAP FINANCIAL INFORMATION
(1) (unaudited) |
|
|
|
(dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
|
|
|
|
|
|
|
ADJUSTED NET INCOME: |
|
|
|
|
|
|
Net income, as reported |
$ |
3,763 |
|
|
$ |
3,523 |
|
|
$ |
5,338 |
|
|
Adjustments: |
|
|
|
|
|
|
Litigation
settlement payment |
|
- |
|
|
|
(975 |
) |
|
|
- |
|
|
Severance
expense |
|
321 |
|
|
|
- |
|
|
|
- |
|
|
Total adjustments, before income taxes |
|
321 |
|
|
|
(975 |
) |
|
|
- |
|
|
Adjustment
for reported effective income tax rate |
|
81 |
|
|
|
(243 |
) |
|
|
- |
|
|
Total adjustments, after income taxes |
|
240 |
|
|
|
(732 |
) |
|
|
- |
|
|
Adjusted net income |
$ |
4,003 |
|
|
$ |
2,791 |
|
|
$ |
5,338 |
|
|
Basic
earnings per share - adjusted |
$ |
0.55 |
|
|
$ |
0.38 |
|
|
$ |
0.73 |
|
|
Diluted
earnings per share - adjusted |
$ |
0.54 |
|
|
$ |
0.38 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
ADJUSTED OPERATING EFFICIENCY RATIO: |
|
|
|
|
|
|
Operating
efficiency ratio, as reported |
|
67.05 |
% |
|
|
66.53 |
% |
|
|
49.60 |
% |
|
Adjustments: |
|
|
|
|
|
|
Litigation
settlement payment |
|
0.00 |
% |
|
|
4.47 |
% |
|
|
0.00 |
% |
|
Severance
expense |
|
-2.02 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
Adjusted operating efficiency ratio |
|
65.03 |
% |
|
|
71.00 |
% |
|
|
49.60 |
% |
|
|
|
|
|
|
|
|
ADJUSTED RETURN ON AVERAGE ASSETS |
|
0.74 |
% |
|
|
0.53 |
% |
|
|
1.18 |
% |
|
ADJUSTED RETURN ON AVERAGE EQUITY |
|
8.61 |
% |
|
|
6.00 |
% |
|
|
12.04 |
% |
|
|
|
|
|
|
|
|
(1) A non-GAAP
financial measure is a numerical measure of historical or future
financial performance, financial position or cash flows that
excludes or includes amounts that are required to be disclosed in
the most directly comparable measure calculated and presented in
accordance with generally accepted accounting principles in the
United States (“U.S. GAAP”). The Company’s management believes the
presentation of non-GAAP financial measures provide investors with
a greater understanding of the Company’s operating results in
addition to the results measured in accordance with U.S. GAAP.
While management uses non-GAAP measures in its analysis of the
Company’s performance, this information should not be viewed as a
substitute for financial results determined in accordance with U.S.
GAAP or considered to be more important than financial results
determined in accordance with U.S. GAAP. |
|
|
|
|
|
|
|
HANOVER BANCORP, INC. |
|
|
|
SELECTED FINANCIAL DATA (unaudited) |
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
12/31/2023 |
|
12/31/2022 |
Profitability: |
|
|
|
Return on average assets |
|
0.69 |
% |
|
|
1.18 |
% |
Return on average equity(1) |
|
8.10 |
% |
|
|
12.04 |
% |
Return on average tangible equity(1) |
|
9.06 |
% |
|
|
13.54 |
% |
Pre-provision net revenue to average assets |
|
0.97 |
% |
|
|
1.86 |
% |
Yield on average interest-earning assets |
|
5.91 |
% |
|
|
5.17 |
% |
Cost of average interest-bearing liabilities |
|
4.19 |
% |
|
|
2.08 |
% |
Net interest rate spread(2) |
|
1.72 |
% |
|
|
3.09 |
% |
Net interest margin(3) |
|
2.40 |
% |
|
|
3.49 |
% |
Non-interest expense to average assets |
|
1.97 |
% |
|
|
1.83 |
% |
Operating efficiency ratio |
|
67.05 |
% |
|
|
49.60 |
% |
|
|
|
|
Average balances: |
|
|
|
Interest-earning assets |
$ |
2,090,839 |
|
|
$ |
1,733,739 |
|
Interest-bearing liabilities |
|
1,751,330 |
|
|
|
1,391,875 |
|
Loans |
|
1,910,409 |
|
|
|
1,681,460 |
|
Deposits |
|
1,767,753 |
|
|
|
1,472,982 |
|
Borrowings |
|
170,793 |
|
|
|
123,149 |
|
|
|
|
|
|
|
|
|
(1) Includes common stock and Series A preferred stock. |
|
|
(2) Represents the difference between the yield on average
interest-earning assets and the cost of average interest-bearing
liabilities. |
(3) Represents net interest income divided by average
interest-earning assets. |
|
|
|
|
HANOVER BANCORP, INC. |
|
|
|
|
|
|
|
SELECTED FINANCIAL DATA (unaudited) |
|
|
|
|
|
|
|
(dollars in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the Three Months Ended |
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
3/31/2023 |
Asset quality: |
|
|
|
|
|
|
|
Provision for credit losses |
$ |
200 |
|
|
$ |
500 |
|
|
$ |
500 |
|
|
$ |
932 |
|
Net (charge-offs)/recoveries |
|
677 |
|
|
|
(1,183 |
) |
|
|
(10 |
) |
|
|
(457 |
) |
Allowance for credit losses |
|
19,658 |
|
|
|
14,686 |
|
|
|
15,369 |
|
|
|
14,879 |
|
Allowance for credit losses to total loans(1) |
|
1.00 |
% |
|
|
0.78 |
% |
|
|
0.84 |
% |
|
|
0.83 |
% |
Non-performing loans(2)(3)(4) |
$ |
14,451 |
|
|
$ |
15,061 |
|
|
$ |
10,785 |
|
|
$ |
11,031 |
|
Non-performing loans/total loans |
|
0.74 |
% |
|
|
0.80 |
% |
|
|
0.59 |
% |
|
|
0.62 |
% |
Non-performing loans/total assets |
|
0.64 |
% |
|
|
0.70 |
% |
|
|
0.51 |
% |
|
|
0.53 |
% |
Allowance for credit losses/non-performing loans |
|
136.03 |
% |
|
|
97.51 |
% |
|
|
142.50 |
% |
|
|
134.88 |
% |
|
|
|
|
|
|
|
|
Capital (Bank only): |
|
|
|
|
|
|
|
Tier 1 Capital |
$ |
193,324 |
|
|
$ |
190,928 |
|
|
$ |
188,568 |
|
|
$ |
185,449 |
|
Tier 1 leverage ratio |
|
9.08 |
% |
|
|
9.16 |
% |
|
|
9.16 |
% |
|
|
9.79 |
% |
Common equity tier 1 capital ratio |
|
13.09 |
% |
|
|
13.55 |
% |
|
|
13.16 |
% |
|
|
12.88 |
% |
Tier 1 risk based capital ratio |
|
13.09 |
% |
|
|
13.55 |
% |
|
|
13.16 |
% |
|
|
12.88 |
% |
Total risk based capital ratio |
|
14.22 |
% |
|
|
14.60 |
% |
|
|
14.24 |
% |
|
|
13.93 |
% |
|
|
|
|
|
|
|
|
Equity data: |
|
|
|
|
|
|
|
Shares outstanding(5) |
|
7,345,012 |
|
|
|
7,320,419 |
|
|
|
7,334,120 |
|
|
|
7,331,092 |
|
Stockholders' equity |
$ |
184,830 |
|
|
$ |
185,907 |
|
|
$ |
182,806 |
|
|
$ |
180,522 |
|
Book value per share(5) |
|
25.16 |
|
|
|
25.40 |
|
|
|
24.93 |
|
|
|
24.62 |
|
Tangible common equity(5) |
|
165,351 |
|
|
|
166,412 |
|
|
|
163,294 |
|
|
|
160,992 |
|
Tangible book value per share(5) |
|
22.51 |
|
|
|
22.73 |
|
|
|
22.26 |
|
|
|
21.96 |
|
Tangible common equity ("TCE") ratio(5) |
|
7.35 |
% |
|
|
7.81 |
% |
|
|
7.77 |
% |
|
|
7.84 |
% |
|
|
|
|
|
|
|
|
(1) Calculation
excludes loans held for sale. |
(2) Includes $0.1
million of Purchased Credit Impaired loans 90 days past due and
still accruing and $0.4 million of loans fully guaranteed by
the SBA at 9/30/23. |
|
(3) Includes $0.1
million of Purchased Credit Impaired loans 90 days past due and
still accruing and $0.2 million of loans fully guaranteed by
the SBA at 6/30/23. |
|
(4) Includes $0.7
million of Purchased Credit Impaired loans 90 days past due and
still accruing and $0.2 million of loans fully guaranteed by
the SBA at 3/31/23. |
|
(5) Includes common
stock and Series A preferred stock. |
|
|
|
|
|
|
|
|
Note: Prior period information has been
adjusted to conform to current period presentation. |
|
|
|
|
HANOVER BANCORP, INC. |
|
|
|
|
|
|
|
|
STATISTICAL SUMMARY |
|
|
|
|
|
|
|
|
QUARTERLY TREND |
|
|
|
|
|
|
|
|
(unaudited, dollars in thousands, except share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
3/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
Loan
distribution(1): |
|
|
|
|
|
|
|
|
Residential mortgages |
$ |
689,211 |
|
|
$ |
630,374 |
|
|
$ |
598,747 |
|
|
$ |
567,106 |
|
|
Multifamily |
|
|
572,849 |
|
|
|
578,895 |
|
|
|
583,837 |
|
|
|
588,244 |
|
|
Commercial real estate |
|
561,183 |
|
|
|
550,334 |
|
|
|
546,120 |
|
|
|
541,924 |
|
|
Commercial & industrial |
|
107,912 |
|
|
|
87,575 |
|
|
|
67,918 |
|
|
|
59,184 |
|
|
Home equity |
|
25,631 |
|
|
|
26,959 |
|
|
|
26,517 |
|
|
|
30,664 |
|
|
Consumer |
|
|
413 |
|
|
|
425 |
|
|
|
364 |
|
|
|
243 |
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
$ |
1,957,199 |
|
|
$ |
1,874,562 |
|
|
$ |
1,823,503 |
|
|
$ |
1,787,365 |
|
|
|
|
|
|
|
|
|
|
|
|
Sequential quarter growth rate |
|
4.41 |
% |
|
|
2.80 |
% |
|
|
2.02 |
% |
|
|
2.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
Loans sold during the quarter |
$ |
29,740 |
|
|
$ |
18,403 |
|
|
$ |
12,610 |
|
|
$ |
12,756 |
|
|
|
|
|
|
|
|
|
|
|
|
Funding distribution: |
|
|
|
|
|
|
|
|
Demand |
|
$ |
207,781 |
|
|
$ |
185,731 |
|
|
$ |
180,303 |
|
|
$ |
178,592 |
|
|
N.O.W. |
|
|
661,276 |
|
|
|
503,704 |
|
|
|
480,108 |
|
|
|
627,102 |
|
|
Savings |
|
|
47,608 |
|
|
|
54,502 |
|
|
|
67,626 |
|
|
|
79,414 |
|
|
Money market |
|
465,732 |
|
|
|
461,057 |
|
|
|
409,097 |
|
|
|
391,314 |
|
|
Total core deposits |
|
1,382,397 |
|
|
|
1,204,994 |
|
|
|
1,137,134 |
|
|
|
1,276,422 |
|
|
Time |
|
|
522,198 |
|
|
|
530,076 |
|
|
|
456,505 |
|
|
|
430,852 |
|
|
Total deposits |
|
1,904,595 |
|
|
|
1,735,070 |
|
|
|
1,593,639 |
|
|
|
1,707,274 |
|
|
Borrowings |
|
128,953 |
|
|
|
179,849 |
|
|
|
293,849 |
|
|
|
136,962 |
|
|
Subordinated debentures |
|
24,635 |
|
|
|
24,621 |
|
|
|
24,608 |
|
|
|
24,594 |
|
|
|
|
|
|
|
|
|
|
|
|
Total funding sources |
$ |
2,058,183 |
|
|
$ |
1,939,540 |
|
|
$ |
1,912,096 |
|
|
$ |
1,868,830 |
|
|
|
|
|
|
|
|
|
|
|
|
Sequential quarter growth rate - total deposits |
|
9.77 |
% |
|
|
8.87 |
% |
|
|
-6.66 |
% |
|
|
12.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
Period-end core deposits/total deposits ratio |
|
72.58 |
% |
|
|
69.45 |
% |
|
|
71.35 |
% |
|
|
74.76 |
% |
|
|
|
|
|
|
|
|
|
|
|
Period-end demand deposits/total deposits ratio |
|
10.91 |
% |
|
|
10.70 |
% |
|
|
11.31 |
% |
|
|
10.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
(1) Excluding loans held for sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HANOVER BANCORP, INC. |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION
OF NON-GAAP FINANCIAL
MEASURES(1)(unaudited) |
|
|
|
|
|
(dollars in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
3/31/2023 |
|
12/31/2022 |
|
Tangible common equity |
|
|
|
|
|
|
|
|
|
|
Total equity(2) |
$ |
184,830 |
|
|
$ |
185,907 |
|
|
$ |
182,806 |
|
|
$ |
180,522 |
|
|
$ |
177,628 |
|
|
Less:
goodwill |
|
(19,168 |
) |
|
|
(19,168 |
) |
|
|
(19,168 |
) |
|
|
(19,168 |
) |
|
|
(19,168 |
) |
|
Less: core
deposit intangible |
|
(311 |
) |
|
|
(327 |
) |
|
|
(344 |
) |
|
|
(362 |
) |
|
|
(381 |
) |
|
Tangible common equity(2) |
$ |
165,351 |
|
|
$ |
166,412 |
|
|
$ |
163,294 |
|
|
$ |
160,992 |
|
|
$ |
158,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity ("TCE") ratio |
|
|
|
|
|
|
|
|
|
Tangible
common equity(2) |
$ |
165,351 |
|
|
$ |
166,412 |
|
|
$ |
163,294 |
|
|
$ |
160,992 |
|
|
$ |
158,079 |
|
|
Total
assets |
|
2,270,060 |
|
|
|
2,149,632 |
|
|
|
2,121,783 |
|
|
|
2,071,720 |
|
|
|
1,983,692 |
|
|
Less:
goodwill |
|
(19,168 |
) |
|
|
(19,168 |
) |
|
|
(19,168 |
) |
|
|
(19,168 |
) |
|
|
(19,168 |
) |
|
Less: core
deposit intangible |
|
(311 |
) |
|
|
(327 |
) |
|
|
(344 |
) |
|
|
(362 |
) |
|
|
(381 |
) |
|
Tangible assets |
$ |
2,250,581 |
|
|
$ |
2,130,137 |
|
|
$ |
2,102,271 |
|
|
$ |
2,052,190 |
|
|
$ |
1,964,143 |
|
|
TCE ratio(2) |
|
7.35 |
% |
|
|
7.81 |
% |
|
|
7.77 |
% |
|
|
7.84 |
% |
|
|
8.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per share |
|
|
|
|
|
|
|
|
|
|
Tangible
equity(2) |
$ |
165,351 |
|
|
$ |
166,412 |
|
|
$ |
163,294 |
|
|
$ |
160,992 |
|
|
$ |
158,079 |
|
|
Shares
outstanding(2) |
|
7,345,012 |
|
|
|
7,320,419 |
|
|
|
7,334,120 |
|
|
|
7,331,092 |
|
|
|
7,299,000 |
|
|
Tangible book value per share(2) |
$ |
22.51 |
|
|
$ |
22.73 |
|
|
$ |
22.26 |
|
|
$ |
21.96 |
|
|
$ |
21.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) A non-GAAP
financial measure is a numerical measure of historical or future
financial performance, financial position or cash flows that
excludes or includes amounts that are required to be disclosed in
the most directly comparable measure calculated and presented in
accordance with generally accepted accounting principles in the
United States (“U.S. GAAP”). The Company’s management believes the
presentation of non-GAAP financial measures provide investors with
a greater understanding of the Company’s operating results in
addition to the results measured in accordance with U.S. GAAP.
While management uses non-GAAP measures in its analysis of the
Company’s performance, this information should not be viewed as a
substitute for financial results determined in accordance with U.S.
GAAP or considered to be more important than financial results
determined in accordance with U.S. GAAP. |
|
|
|
|
|
|
|
|
|
|
|
|
(2) Includes
common stock and Series A preferred stock. |
|
|
|
HANOVER BANCORP, INC. |
|
|
|
|
|
|
|
|
|
|
|
NET
INTEREST INCOME ANALYSIS |
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31, 2023 and
2022 |
|
|
|
|
|
|
|
|
|
|
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Average |
|
|
|
Average |
|
Average |
|
|
|
Average |
|
Balance |
|
Interest |
|
Yield/Cost |
Balance |
|
Interest |
|
Yield/Cost |
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
1,910,409 |
|
$ |
28,394 |
|
5.90 |
% |
|
$ |
1,681,460 |
|
$ |
21,979 |
|
5.19 |
% |
Investment
securities |
|
56,834 |
|
|
940 |
|
6.56 |
% |
|
|
16,509 |
|
|
212 |
|
5.09 |
% |
Interest-earning cash |
|
114,033 |
|
|
1,570 |
|
5.46 |
% |
|
|
29,281 |
|
|
275 |
|
3.73 |
% |
FHLB stock
and other investments |
|
9,563 |
|
|
251 |
|
10.41 |
% |
|
|
6,489 |
|
|
106 |
|
6.48 |
% |
Total
interest-earning assets |
|
2,090,839 |
|
|
31,155 |
|
5.91 |
% |
|
|
1,733,739 |
|
|
22,572 |
|
5.17 |
% |
Non
interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
Cash and due
from banks |
|
7,429 |
|
|
|
|
|
|
10,614 |
|
|
|
|
Other
assets |
|
50,677 |
|
|
|
|
|
|
52,493 |
|
|
|
|
Total
assets |
$ |
2,148,945 |
|
|
|
|
|
$ |
1,796,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings,
N.O.W. and money market deposits |
$ |
1,039,062 |
|
$ |
11,547 |
|
4.41 |
% |
|
$ |
910,732 |
|
$ |
4,764 |
|
2.08 |
% |
Time
deposits |
|
541,475 |
|
|
5,231 |
|
3.83 |
% |
|
|
357,994 |
|
|
1,547 |
|
1.71 |
% |
Total
savings and time deposits |
|
1,580,537 |
|
|
16,778 |
|
4.21 |
% |
|
|
1,268,726 |
|
|
6,311 |
|
1.97 |
% |
Borrowings |
|
146,167 |
|
|
1,392 |
|
3.78 |
% |
|
|
98,576 |
|
|
663 |
|
2.67 |
% |
Subordinated
debentures |
|
24,626 |
|
|
326 |
|
5.25 |
% |
|
|
24,573 |
|
|
334 |
|
5.39 |
% |
Total
interest-bearing liabilities |
|
1,751,330 |
|
|
18,496 |
|
4.19 |
% |
|
|
1,391,875 |
|
|
7,308 |
|
2.08 |
% |
Demand
deposits |
|
187,216 |
|
|
|
|
|
|
204,256 |
|
|
|
|
Other
liabilities |
|
26,031 |
|
|
|
|
|
|
24,793 |
|
|
|
|
Total
liabilities |
|
1,964,577 |
|
|
|
|
|
|
1,620,924 |
|
|
|
|
Stockholders' equity |
|
184,368 |
|
|
|
|
|
|
175,922 |
|
|
|
|
Total
liabilities & stockholders' equity |
$ |
2,148,945 |
|
|
|
|
|
$ |
1,796,846 |
|
|
|
|
Net interest
rate spread |
|
|
|
|
1.72 |
% |
|
|
|
|
|
3.09 |
% |
Net
interest income/margin |
|
|
$ |
12,659 |
|
2.40 |
% |
|
|
|
$ |
15,264 |
|
3.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Hanover Bancorp (NASDAQ:HNVR)
過去 株価チャート
から 4 2024 まで 5 2024
Hanover Bancorp (NASDAQ:HNVR)
過去 株価チャート
から 5 2023 まで 5 2024