Hanover Bancorp, Inc. Reports Third Quarter 2024 Results and Declares $0.10 Quarterly Cash Dividend
Third Quarter Performance Highlights
- Net Income: Net income for the quarter ended
September 30, 2024 totaled$3 .5 million or$0.48 per diluted share (including Series A preferred shares). Adjusted (non-GAAP) net income (excluding severance and retirement expenses) was$3 .7 million or$0.50 per diluted share for the quarter endedSeptember 30, 2024 . - Record Non-interest Income: The Company reported record non-interest income of
$4 .0 million for the quarter endedSeptember 30, 2024 , an increase of$0 .3 million or 9.17% from the quarter endedJune 30, 2024 and$0 .2 million or 6.66% from the quarter endedSeptember 30, 2023 . - Net Interest Income: Net interest income was
$13 .1 million for the quarter endedSeptember 30, 2024 , an increase of$1 .3 million, or 11.04% from theSeptember 30, 2023 quarter. - Net Interest Margin: The Company’s net interest margin during the quarter ended
September 30, 2024 increased to 2.37% from 2.29% in the quarter endedSeptember 30, 2023 . - Strong Liquidity Position: At
September 30, 2024 , undrawn liquidity sources, which include cash and unencumbered securities and secured and unsecured funding capacity, totaled$637 .1 million or approximately 240% of uninsured deposit balances. - Deposit Activity: Core deposits, consisting of Demand, NOW, Savings and Money Market, increased
$71 .0 million or 5.14% fromDecember 31, 2023 . Total deposits increased$52 .9 million or 2.78% fromDecember 31, 2023 . Insured and collateralized deposits, which include municipal deposits, accounted for approximately 86% of total deposits atSeptember 30, 2024 . - Loan Growth: Loans totaled
$2 .01 billion, a net increase of$48 .6 million or 3.31% annualized, fromDecember 31, 2023 . The Company’s commercial real estate concentration ratio continued to improve, decreasing to 397% of capital atSeptember 30, 2024 from 432% of capital atDecember 31, 2023 and 448% of capital atSeptember 30, 2023 . The Company continues to focus loan growth primarily in residential loan products originated for sale to specific buyers in the secondary market, C&I and SBA loans, which strategically enhances our management of liquidity and capital while producing additional non-interest income. - Asset Quality: At
September 30, 2024 , the Bank’s asset quality remained solid with non-performing loans totaling$15 .5 million, representing 0.77% of the total loan portfolio, and the allowance for credit losses equaling 1.17% of total loans. Loans secured by office space accounted for 2.27% of the total loan portfolio with a total balance of$45 .5 million, of which less than 1% is located inManhattan . - Banking Initiatives: At
September 30, 2024 , the Company’s banking initiatives reflected continuing momentum:- SBA & USDA Banking: Gains on sale of SBA loans totaled
$2 .4 million for the quarter endedSeptember 30, 2024 , representing a 63.83% increase over the comparable 2023 quarter. Total SBA loans sold were$27 .1 million for the quarter endedSeptember 30, 2024 , representing a 47.00% increase over the comparable 2023 quarter. Premiums earned on the sale of SBA loans increased to 9.59% for the quarter endedSeptember 30, 2024 from 8.66% for the quarter endedSeptember 30, 2023 . C&I Banking/Hauppauge Business Banking Center : The C&I Banking Team and theHauppauge Business Banking Center increased deposits to$96 .0 million as ofSeptember 30, 2024 from$36 .1 million atSeptember 30, 2023 . Loan originations tied to this office were $8 million during the quarter. Momentum continues to build with current deposits of $105 million and deposit and C&I loan pipelines related to this office of $43 million and $104 million, respectively.- Residential Lending: The Bank continues to originate loans for its portfolio while developing the flow origination program launched in late 2023. Of the
$27 .3 million in closed loans originated in the quarter endedSeptember 30, 2024 ,$7 .4 million were originated for the Bank’s portfolio and reflected a weighted average yield of 7.59% before origination and other fees, which average 50-100 bps per loan, and a weighted average LTV of 61%.
- SBA & USDA Banking: Gains on sale of SBA loans totaled
- Tangible Book Value Per Share: Tangible book value per share (including Series A preferred shares) was
$23.28 atSeptember 30, 2024 compared to$22.51 atDecember 31, 2023 . - Quarterly Cash Dividend: The Company’s Board of Directors approved a
$0.10 per share cash dividend on both common and Series A preferred shares payable onNovember 13, 2024 to stockholders of record onNovember 6, 2024 . Port Jefferson Branch: The Company has received regulatory approval for the opening of a full-service branch in Port Jefferson, New York. Business development staff have already joined the Company in anticipation of the opening of this location. The Bank expects this site to be fully operational in the first quarter of 2025.
Earnings Summary for the Quarter Ended
The Company reported net income for each of the quarters ended
While net interest income and non-interest income increased during the quarter ended
Net interest income was
Earnings Summary for the Nine Months Ended
For the nine months ended
The decrease in net income recorded for the nine months ended
Net interest income was
Balance Sheet Highlights
Total assets at
Total deposits at
Although core deposits, comprised of Demand, NOW, Savings and Money Market, grew to
The Company had
Total borrowings at
Stockholders’ equity was
Loan Portfolio
For the nine months ended
Historically, the Bank 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, with the rapid increases in interest rates in recent years, the appetite among the Bank’s purchasers of residential loans for acquiring pools of loans declined, eliminating the Bank’s ability to sell residential loans in its portfolio on desirable terms. Commencing in late 2023, the Bank initiated development of a flow origination program under which the Bank originates individual loans for sale to specific buyers, thereby positioning the Bank to resume residential loan sales and generate fee income to complement sale premiums earned from the sale of the guaranteed portion of SBA loans. During the quarter ended
The Bank’s investment in government guaranteed lending continues to yield results. During the quarters ended
Commercial Real Estate Statistics
A significant portion of the Bank’s commercial real estate portfolio consists of loans secured by Multi-Family and CRE-Investor owned real estate that are predominantly subject to fixed interest rates for an initial period of 5 years. The Bank’s exposure to Land/Construction loans is minor at
Multi-Family Market Rent Portfolio Fixed Rate Reset/Maturity Schedule | Multi-Family Stabilized Rent Portfolio Fixed Rate Reset/Maturity Schedule | |||||||||||||||||||||||
Calendar Period (loan data as of 9/30/24) |
# Loans |
Total ( omitted) |
Avg O/S ( omitted) |
Avg Interest Rate |
Calendar Period (loan data as of 9/30/24) |
# Loans |
Total ( omitted) |
Avg O/S ( omitted) |
Avg Interest Rate |
|||||||||||||||
2024 | 3 | $ | 1,861 | $ | 620 | 7.07 | % | 2024 | 4 | $ | 4,014 | $ | 1,004 | 5.43 | % | |||||||||
2025 | 9 | 15,977 | 1,775 | 4.16 | % | 2025 | 14 | 19,438 | 1,388 | 4.57 | % | |||||||||||||
2026 | 36 | 119,170 | 3,310 | 3.66 | % | 2026 | 20 | 43,147 | 2,157 | 3.67 | % | |||||||||||||
2027 | 72 | 178,368 | 2,477 | 4.31 | % | 2027 | 53 | 125,417 | 2,366 | 4.22 | % | |||||||||||||
2028 | 18 | 29,980 | 1,666 | 6.16 | % | 2028 | 11 | 9,966 | 906 | 7.12 | % | |||||||||||||
2029+ | 8 | 5,647 | 706 | 7.32 | % | 2029+ | 5 | 2,326 | 465 | 6.40 | % | |||||||||||||
Fixed Rate | 146 | 351,003 | 2,404 | 4.30 | % | Fixed Rate | 107 | 204,308 | 1,909 | 4.33 | % | |||||||||||||
Floating Rate | 3 | 457 | 152 | 9.56 | % | Floating Rate | 1 | 1,804 | 1,804 | 6.25 | % | |||||||||||||
Total | 149 | $ | 351,460 | $ | 2,359 | 4.32 | % | Total | 108 | $ | 206,112 | $ | 1,908 | 4.34 | % |
CRE Investor Portfolio Fixed Rate Reset/Maturity Schedule | |||||||||||
Calendar Period (loan data as of 9/30/24) |
# Loans |
Total ( |
Avg O/S ( |
Avg Interest Rate |
|||||||
2024 | 18 | $ | 30,965 | $ | 1,720 | 5.56 | % | ||||
2025 | 27 | 18,259 | 676 | 5.11 | % | ||||||
2026 | 33 | 45,806 | 1,388 | 4.85 | % | ||||||
2027 | 87 | 149,261 | 1,716 | 4.75 | % | ||||||
2028 | 32 | 32,826 | 1,026 | 6.65 | % | ||||||
2029+ | 16 | 6,519 | 407 | 6.15 | % | ||||||
Fixed Rate | 213 | 283,636 | 1,332 | 5.13 | % | ||||||
Floating Rate | 3 | 12,368 | 4,123 | 8.80 | % | ||||||
Total CRE-Inv. | 216 | $ | 296,004 | $ | 1,370 | 5.28 | % |
Rental breakdown of Multi-Family portfolio
The table below segments our portfolio of loans secured by Multi-Family properties based on rental terms and location. As shown below, 63% of the combined portfolio is secured by properties subject to free market rental terms, the dominant tenant type, and both the Market Rent and Stabilized Rent segments of our portfolio present very similar average borrower profiles. The portfolio is primarily located in the
Multi-Family Loan Portfolio - Loans by Rent Type | ||||||||||||||||||
Rent Type | # of Notes | Outstanding Loan Balance |
% of Total Multi-Family |
Avg Loan Size |
LTV | Current DSCR |
Avg # of Units |
|||||||||||
( |
( |
|||||||||||||||||
Market | 149 | $ | 351,460 | 63 | % | $ | 2,359 | 61.8 | % | 1.40 | 11 | |||||||
Location | ||||||||||||||||||
7 | $ | 17,911 | 3 | % | $ | 2,559 | 52.0 | % | 1.63 | 15 | ||||||||
Other NYC | 94 | $ | 246,140 | 44 | % | $ | 2,619 | 61.5 | % | 1.39 | 10 | |||||||
Outside NYC | 48 | $ | 87,409 | 16 | % | $ | 1,821 | 64.8 | % | 1.40 | 12 | |||||||
Stabilized | 108 | $ | 206,112 | 37 | % | $ | 1,908 | 63.1 | % | 1.38 | 11 | |||||||
Location | ||||||||||||||||||
7 | $ | 10,892 | 2 | % | $ | 1,556 | 53.5 | % | 1.49 | 15 | ||||||||
Other NYC | 89 | $ | 176,115 | 32 | % | $ | 1,979 | 63.5 | % | 1.38 | 11 | |||||||
Outside NYC | 12 | $ | 19,105 | 3 | % | $ | 1,592 | 64.7 | % | 1.40 | 16 |
Office Property Exposure
The Bank’s exposure to the Office market is minor at $45 million (2% of all loans), has a 1.8x weighted average DSCR, a 54% weighted average LTV and less than $400 thousand of exposure in
Asset Quality and Allowance for Credit Losses
The Bank’s asset quality ratios remain solid. At
During the third quarter of 2024, the Bank recorded a provision for credit losses expense of
Net Interest Margin
The Bank’s net interest margin increased to 2.37% for the quarter ended
About
Non-GAAP Disclosure
This discussion, including the financial statements attached thereto, includes non-GAAP financial measures which include the Company’s adjusted net income, adjusted basic and diluted earnings per share, adjusted return on average assets, adjusted return on average equity, tangible common equity (“TCE”) ratio, TCE, tangible assets, tangible book value per share, return on average tangible equity and efficiency ratio. 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
With respect to the calculations of and reconciliations of adjusted net income, TCE, tangible assets, TCE ratio and tangible book value per share, 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
STATEMENTS OF CONDITION (unaudited) | ||||||||||||
(dollars in thousands) | ||||||||||||
2024 | 2024 | 2023 | ||||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 141,231 | $ | 141,115 | $ | 177,207 | ||||||
Securities-available for sale, at fair value | 98,359 | 98,813 | 61,419 | |||||||||
Investments-held to maturity | 3,828 | 3,902 | 4,041 | |||||||||
Loans held for sale | 16,721 | 11,615 | 8,904 | |||||||||
Loans, net of deferred loan fees and costs | 2,005,813 | 2,012,954 | 1,957,199 | |||||||||
Less: allowance for credit losses | (23,406 | ) | (23,644 | ) | (19,658 | ) | ||||||
Loans, net | 1,982,407 | 1,989,310 | 1,937,541 | |||||||||
19,168 | 19,168 | 19,168 | ||||||||||
Premises & fixed assets | 16,373 | 16,541 | 15,886 | |||||||||
Operating lease assets | 8,776 | 9,210 | 9,754 | |||||||||
Other assets | 40,951 | 41,424 | 36,140 | |||||||||
Assets | $ | 2,327,814 | $ | 2,331,098 | $ | 2,270,060 | ||||||
Liabilities and stockholders' equity | ||||||||||||
Core deposits | $ | 1,453,444 | $ | 1,477,824 | $ | 1,382,397 | ||||||
Time deposits | 504,100 | 464,105 | 522,198 | |||||||||
Total deposits | 1,957,544 | 1,941,929 | 1,904,595 | |||||||||
Borrowings | 125,805 | 148,953 | 128,953 | |||||||||
Subordinated debentures | 24,675 | 24,662 | 24,635 | |||||||||
Operating lease liabilities | 9,472 | 9,911 | 10,459 | |||||||||
Other liabilities | 17,979 | 15,571 | 16,588 | |||||||||
Liabilities | 2,135,475 | 2,141,026 | 2,085,230 | |||||||||
Stockholders' equity | 192,339 | 190,072 | 184,830 | |||||||||
Liabilities and stockholders' equity | $ | 2,327,814 | $ | 2,331,098 | $ | 2,270,060 |
CONSOLIDATED STATEMENTS OF INCOME (unaudited) | |||||||||||||
(dollars in thousands, except per share data) | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
Interest income | $ | 34,113 | $ | 28,952 | $ | 99,965 | $ | 82,471 | |||||
Interest expense | 21,011 | 17,153 | 60,681 | 43,243 | |||||||||
Net interest income | 13,102 | 11,799 | 39,284 | 39,228 | |||||||||
Provision for credit losses (1) | 200 | 500 | 4,540 | 1,932 | |||||||||
Net interest income after provision for credit losses | 12,902 | 11,299 | 34,744 | 37,296 | |||||||||
Loan servicing and fee income | 960 | 681 | 2,709 | 2,031 | |||||||||
Service charges on deposit accounts | 123 | 75 | 333 | 212 | |||||||||
Gain on sale of loans held-for-sale | 2,834 | 1,468 | 7,926 | 3,515 | |||||||||
Gain on sale of investments | - | - | 4 | - | |||||||||
Other operating income | 37 | 1,483 | 180 | 1,679 | |||||||||
Non-interest income | 3,954 | 3,707 | 11,152 | 7,437 | |||||||||
Compensation and benefits | 6,840 | 5,351 | 18,901 | 16,320 | |||||||||
Occupancy and equipment | 1,799 | 1,758 | 5,412 | 4,882 | |||||||||
Data processing | 547 | 516 | 1,560 | 1,533 | |||||||||
Professional fees | 762 | 800 | 2,297 | 2,462 | |||||||||
Federal deposit insurance premiums | 360 | 386 | 1,043 | 1,101 | |||||||||
Other operating expenses | 1,930 | 1,506 | 5,499 | 5,152 | |||||||||
Non-interest expense | 12,238 | 10,317 | 34,712 | 31,450 | |||||||||
Income before income taxes | 4,618 | 4,689 | 11,184 | 13,283 | |||||||||
Income tax expense | 1,079 | 1,166 | 2,740 | 3,457 | |||||||||
Net income | $ | 3,539 | $ | 3,523 | $ | 8,444 | $ | 9,826 | |||||
Earnings per share ("EPS"):(2) | |||||||||||||
Basic | $ | 0.48 | $ | 0.48 | $ | 1.14 | $ | 1.34 | |||||
Diluted | $ | 0.48 | $ | 0.48 | $ | 1.14 | $ | 1.33 | |||||
Average shares outstanding for basic EPS (2)(3) | 7,411,064 | 7,327,345 | 7,395,758 | 7,327,836 | |||||||||
Average shares outstanding for diluted EPS (2)(3) | 7,436,068 | 7,407,483 | 7,420,415 | 7,407,954 | |||||||||
(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. |
CONSOLIDATED STATEMENTS OF INCOME (unaudited) | |||||||||||||||
QUARTERLY TREND | |||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||
Three Months Ended | |||||||||||||||
Interest income | $ | 34,113 | $ | 33,420 | $ | 32,432 | $ | 31,155 | $ | 28,952 | |||||
Interest expense | 21,011 | 20,173 | 19,497 | 18,496 | 17,153 | ||||||||||
Net interest income | 13,102 | 13,247 | 12,935 | 12,659 | 11,799 | ||||||||||
Provision for credit losses (1) | 200 | 4,040 | 300 | 200 | 500 | ||||||||||
Net interest income after provision for credit losses | 12,902 | 9,207 | 12,635 | 12,459 | 11,299 | ||||||||||
Loan servicing and fee income | 960 | 836 | 913 | 778 | 681 | ||||||||||
Service charges on deposit accounts | 123 | 114 | 96 | 85 | 75 | ||||||||||
Gain on sale of loans held-for-sale | 2,834 | 2,586 | 2,506 | 2,326 | 1,468 | ||||||||||
Gain on sale of investments | - | 4 | - | - | - | ||||||||||
Other operating income | 37 | 82 | 61 | 65 | 1,483 | ||||||||||
Non-interest income | 3,954 | 3,622 | 3,576 | 3,254 | 3,707 | ||||||||||
Compensation and benefits | 6,840 | 6,499 | 5,562 | 5,242 | 5,351 | ||||||||||
Occupancy and equipment | 1,799 | 1,843 | 1,770 | 1,746 | 1,758 | ||||||||||
Data processing | 547 | 495 | 518 | 530 | 516 | ||||||||||
Professional fees | 762 | 717 | 818 | 729 | 800 | ||||||||||
Federal deposit insurance premiums | 360 | 365 | 318 | 375 | 386 | ||||||||||
Other operating expenses | 1,930 | 1,751 | 1,818 | 2,048 | 1,506 | ||||||||||
Non-interest expense | 12,238 | 11,670 | 10,804 | 10,670 | 10,317 | ||||||||||
Income before income taxes | 4,618 | 1,159 | 5,407 | 5,043 | 4,689 | ||||||||||
Income tax expense | 1,079 | 315 | 1,346 | 1,280 | 1,166 | ||||||||||
Net income | $ | 3,539 | $ | 844 | $ | 4,061 | $ | 3,763 | $ | 3,523 | |||||
Earnings per share ("EPS"):(2) | |||||||||||||||
Basic | $ | 0.48 | $ | 0.11 | $ | 0.55 | $ | 0.51 | $ | 0.48 | |||||
Diluted | $ | 0.48 | $ | 0.11 | $ | 0.55 | $ | 0.51 | $ | 0.48 | |||||
Average shares outstanding for basic EPS (2)(3) | 7,411,064 | 7,399,816 | 7,376,227 | 7,324,133 | 7,327,345 | ||||||||||
Average shares outstanding for diluted EPS (2)(3) | 7,436,068 | 7,449,110 | 7,420,926 | 7,383,529 | 7,407,483 | ||||||||||
(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. |
CONSOLIDATED NON-GAAP FINANCIAL INFORMATION (1) (unaudited) | |||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
ADJUSTED NET INCOME: | |||||||||||||||
Net income, as reported | $ | 3,539 | $ | 3,523 | $ | 8,444 | $ | 9,826 | |||||||
Adjustments: | |||||||||||||||
Litigation settlement payment | - | (975 | ) | - | (975 | ) | |||||||||
Severance and retirement expenses | 219 | - | 219 | 456 | |||||||||||
Total adjustments, before income taxes | 219 | (975 | ) | 219 | (519 | ) | |||||||||
Adjustment for reported effective income tax rate | 55 | (243 | ) | 55 | (138 | ) | |||||||||
Total adjustments, after income taxes | 164 | (732 | ) | 164 | (381 | ) | |||||||||
Adjusted net income | $ | 3,703 | $ | 2,791 | $ | 8,608 | $ | 9,445 | |||||||
Basic earnings per share - adjusted | $ | 0.50 | $ | 0.38 | $ | 1.16 | $ | 1.29 | |||||||
Diluted earnings per share - adjusted | $ | 0.50 | $ | 0.38 | $ | 1.16 | $ | 1.27 | |||||||
ADJUSTED OPERATING EFFICIENCY RATIO(2): | |||||||||||||||
Operating efficiency ratio, as reported | 71.75 | % | 66.53 | % | 68.83 | % | 67.39 | % | |||||||
Adjustments: | |||||||||||||||
Litigation settlement payment | 0.00 | % | 4.47 | % | 0.00 | % | 1.44 | % | |||||||
Severance and retirement expenses | -1.28 | % | 0.00 | % | -0.43 | % | -0.98 | % | |||||||
Adjusted operating efficiency ratio | 70.47 | % | 71.00 | % | 68.40 | % | 67.85 | % | |||||||
ADJUSTED RETURN ON AVERAGE ASSETS | 0.65 | % | 0.53 | % | 0.51 | % | 0.62 | % | |||||||
ADJUSTED RETURN ON AVERAGE EQUITY | 7.69 | % | 6.00 | % | 6.04 | % | 6.93 | % | |||||||
ADJUSTED RETURN ON AVERAGE TANGIBLE EQUITY | 8.56 | % | 6.71 | % | 6.73 | % | 7.77 | % | |||||||
(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 |
|||||||||||||||
(2) Excludes gain on sale of securities available for sale. |
SELECTED FINANCIAL DATA (unaudited) | |||||||||||||||
(dollars in thousands) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
Profitability: | |||||||||||||||
Return on average assets | 0.62 | % | 0.66 | % | 0.50 | % | 0.64 | % | |||||||
Return on average equity (1) | 7.35 | % | 7.58 | % | 5.93 | % | 7.21 | % | |||||||
Return on average tangible equity (1) | 8.19 | % | 8.47 | % | 6.60 | % | 8.08 | % | |||||||
Pre-provision net revenue to average assets | 0.85 | % | 0.98 | % | 0.94 | % | 1.00 | % | |||||||
Yield on average interest-earning assets | 6.17 | % | 5.61 | % | 6.14 | % | 5.58 | % | |||||||
Cost of average interest-bearing liabilities | 4.53 | % | 3.95 | % | 4.45 | % | 3.50 | % | |||||||
Net interest rate spread (2) | 1.64 | % | 1.66 | % | 1.69 | % | 2.08 | % | |||||||
Net interest margin (3) | 2.37 | % | 2.29 | % | 2.41 | % | 2.65 | % | |||||||
Non-interest expense to average assets | 2.15 | % | 1.94 | % | 2.08 | % | 2.06 | % | |||||||
Operating efficiency ratio (4) | 71.75 | % | 66.53 | % | 68.83 | % | 67.39 | % | |||||||
Average balances: | |||||||||||||||
Interest-earning assets | $ | 2,201,068 | $ | 2,046,502 | $ | 2,175,478 | $ | 1,975,584 | |||||||
Interest-bearing liabilities | 1,847,177 | 1,723,235 | 1,822,613 | 1,653,908 | |||||||||||
Loans | 2,019,384 | 1,840,900 | 2,006,142 | 1,802,349 | |||||||||||
Deposits | 1,891,132 | 1,638,777 | 1,835,862 | 1,644,964 | |||||||||||
Borrowings | 150,770 | 259,549 | 181,445 | 186,187 | |||||||||||
(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. | |||||||||||||||
(4) Represents non-interest expense divided by the sum of net interest income and non-interest income excluding gain on sale of securities available for sale. |
SELECTED FINANCIAL DATA (unaudited) | |||||||||||||||
(dollars in thousands, except share and per share data) | |||||||||||||||
At or For the Three Months Ended | |||||||||||||||
Asset quality: | |||||||||||||||
Provision for credit losses - loans (1) | $ | 200 | $ | 3,850 | $ | 300 | $ | 200 | |||||||
Net (charge-offs)/recoveries | (438 | ) | (79 | ) | (85 | ) | 677 | ||||||||
Allowance for credit losses | 23,406 | 23,644 | 19,873 | 19,658 | |||||||||||
Allowance for credit losses to total loans (2) | 1.17 | % | 1.17 | % | 0.99 | % | 1.00 | % | |||||||
Non-performing loans | $ | 15,469 | $ | 15,828 | $ | 14,878 | $ | 14,451 | |||||||
Non-performing loans/total loans | 0.77 | % | 0.79 | % | 0.74 | % | 0.74 | % | |||||||
Non-performing loans/total assets | 0.66 | % | 0.68 | % | 0.64 | % | 0.64 | % | |||||||
Allowance for credit losses/non-performing loans | 151.31 | % | 149.38 | % | 133.57 | % | 136.03 | % | |||||||
Capital (Bank only): | |||||||||||||||
Tier 1 Capital | $ | 198,196 | $ | 195,703 | $ | 195,889 | $ | 193,324 | |||||||
Tier 1 leverage ratio | 8.85 | % | 8.89 | % | 8.90 | % | 9.08 | % | |||||||
Common equity tier 1 capital ratio | 12.99 | % | 12.78 | % | 12.99 | % | 13.17 | % | |||||||
Tier 1 risk based capital ratio | 12.99 | % | 12.78 | % | 12.99 | % | 13.17 | % | |||||||
Total risk based capital ratio | 14.24 | % | 14.21 | % | 14.19 | % | 14.31 | % | |||||||
Equity data: | |||||||||||||||
Shares outstanding (3) | 7,428,366 | 7,402,163 | 7,392,412 | 7,345,012 | |||||||||||
Stockholders' equity | $ | 192,339 | $ | 190,072 | $ | 189,543 | $ | 184,830 | |||||||
Book value per share (3) | 25.89 | 25.68 | 25.64 | 25.16 | |||||||||||
Tangible common equity (3) | 172,906 | 170,625 | 170,080 | 165,351 | |||||||||||
Tangible book value per share (3) | 23.28 | 23.05 | 23.01 | 22.51 | |||||||||||
Tangible common equity ("TCE") ratio (3) | 7.49 | % | 7.38 | % | 7.43 | % | 7.35 | % | |||||||
(1) Excludes |
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(2) Calculation excludes loans held for sale. | |||||||||||||||
(3) Includes common stock and Series A preferred stock. | |||||||||||||||
Note: Prior period information has been adjusted to conform to current period presentation. |
STATISTICAL SUMMARY | |||||||||||||||
QUARTERLY TREND | |||||||||||||||
(unaudited, dollars in thousands, except share data) | |||||||||||||||
Loan distribution (1): | |||||||||||||||
Residential mortgages | $ | 719,037 | $ | 733,040 | $ | 730,017 | $ | 689,211 | |||||||
Multifamily | 557,634 | 562,503 | 568,043 | 572,849 | |||||||||||
Commercial real estate | 529,948 | 549,725 | 556,708 | 561,183 | |||||||||||
Commercial & industrial | 171,899 | 139,209 | 123,419 | 107,912 | |||||||||||
Home equity | 26,825 | 27,992 | 26,879 | 25,631 | |||||||||||
Consumer | 470 | 485 | 449 | 413 | |||||||||||
Total loans | $ | 2,005,813 | $ | 2,012,954 | $ | 2,005,515 | $ | 1,957,199 | |||||||
Sequential quarter growth rate | -0.35 | % | 0.37 | % | 2.47 | % | 4.41 | % | |||||||
CRE concentration ratio | 397 | % | 403 | % | 416 | % | 432 | % | |||||||
Loans sold during the quarter | $ | 43,537 | $ | 35,302 | $ | 26,735 | $ | 29,740 | |||||||
Funding distribution: | |||||||||||||||
Demand | $ | 206,327 | $ | 199,835 | $ | 202,934 | $ | 207,781 | |||||||
N.O.W. | 621,880 | 661,998 | 708,897 | 661,276 | |||||||||||
Savings | 53,024 | 44,821 | 48,081 | 47,608 | |||||||||||
Money market | 572,213 | 571,170 | 493,123 | 465,732 | |||||||||||
Total core deposits | 1,453,444 | 1,477,824 | 1,453,035 | 1,382,397 | |||||||||||
Time | 504,100 | 464,105 | 464,227 | 522,198 | |||||||||||
Total deposits | 1,957,544 | 1,941,929 | 1,917,262 | 1,904,595 | |||||||||||
Borrowings | 125,805 | 148,953 | 148,953 | 128,953 | |||||||||||
Subordinated debentures | 24,675 | 24,662 | 24,648 | 24,635 | |||||||||||
Total funding sources | $ | 2,108,024 | $ | 2,115,544 | $ | 2,090,863 | $ | 2,058,183 | |||||||
Sequential quarter growth rate - total deposits | 0.80 | % | 1.29 | % | 0.67 | % | 9.77 | % | |||||||
Period-end core deposits/total deposits ratio | 74.25 | % | 76.10 | % | 75.79 | % | 72.58 | % | |||||||
Period-end demand deposits/total deposits ratio | 10.54 | % | 10.29 | % | 10.58 | % | 10.91 | % | |||||||
(1) Excluding loans held for sale |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (1) (unaudited) | |||||||||||||||||||
(dollars in thousands, except share and per share amounts) | |||||||||||||||||||
Tangible common equity | |||||||||||||||||||
Total equity (2) | $ | 192,339 | $ | 190,072 | $ | 189,543 | $ | 184,830 | $ | 185,907 | |||||||||
Less: goodwill | (19,168 | ) | (19,168 | ) | (19,168 | ) | (19,168 | ) | (19,168 | ) | |||||||||
Less: core deposit intangible | (265 | ) | (279 | ) | (295 | ) | (311 | ) | (327 | ) | |||||||||
Tangible common equity (2) | $ | 172,906 | $ | 170,625 | $ | 170,080 | $ | 165,351 | $ | 166,412 | |||||||||
Tangible common equity ("TCE") ratio | |||||||||||||||||||
Tangible common equity (2) | $ | 172,906 | $ | 170,625 | $ | 170,080 | $ | 165,351 | $ | 166,412 | |||||||||
Total assets | 2,327,814 | 2,331,098 | 2,307,508 | 2,270,060 | 2,149,632 | ||||||||||||||
Less: goodwill | (19,168 | ) | (19,168 | ) | (19,168 | ) | (19,168 | ) | (19,168 | ) | |||||||||
Less: core deposit intangible | (265 | ) | (279 | ) | (295 | ) | (311 | ) | (327 | ) | |||||||||
Tangible assets | $ | 2,308,381 | $ | 2,311,651 | $ | 2,288,045 | $ | 2,250,581 | $ | 2,130,137 | |||||||||
TCE ratio (2) | 7.49 | % | 7.38 | % | 7.43 | % | 7.35 | % | 7.81 | % | |||||||||
Tangible book value per share | |||||||||||||||||||
Tangible equity (2) | $ | 172,906 | $ | 170,625 | $ | 170,080 | $ | 165,351 | $ | 166,412 | |||||||||
Shares outstanding (2) | 7,428,366 | 7,402,163 | 7,392,412 | 7,345,012 | 7,320,419 | ||||||||||||||
Tangible book value per share (2) | $ | 23.28 | $ | 23.05 | $ | 23.01 | $ | 22.51 | $ | 22.73 | |||||||||
(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 |
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(2) Includes common stock and Series A preferred stock. |
NET INTEREST INCOME ANALYSIS | |||||||||||||||||
For the Three Months Ended |
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(unaudited, dollars in thousands) | |||||||||||||||||
2024 |
2023 |
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Average | Average | Average | Average | ||||||||||||||
Balance | Interest | Yield/Cost | Balance | Interest | Yield/Cost | ||||||||||||
Assets: | |||||||||||||||||
Interest-earning assets: | |||||||||||||||||
Loans | $ | 2,019,384 | $ | 31,356 | 6.18 | % | $ | 1,840,900 | $ | 26,059 | 5.62 | % | |||||
Investment securities | 103,870 | 1,619 | 6.20 | % | 15,232 | 198 | 5.16 | % | |||||||||
Interest-earning cash | 69,204 | 934 | 5.37 | % | 176,884 | 2,391 | 5.36 | % | |||||||||
FHLB stock and other investments | 8,610 | 204 | 9.43 | % | 13,486 | 304 | 8.94 | % | |||||||||
Total interest-earning assets | 2,201,068 | 34,113 | 6.17 | % | 2,046,502 | 28,952 | 5.61 | % | |||||||||
Non interest-earning assets: | |||||||||||||||||
Cash and due from banks | 9,360 | 6,700 | |||||||||||||||
Other assets | 50,730 | 53,638 | |||||||||||||||
Total assets | $ | 2,261,158 | $ | 2,106,840 | |||||||||||||
Liabilities and stockholders' equity: | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||
Savings, N.O.W. and money market deposits | $ | 1,209,030 | $ | 13,941 | 4.59 | % | $ | 985,625 | $ | 10,186 | 4.10 | % | |||||
Time deposits | 487,377 | 5,546 | 4.53 | % | 478,061 | 4,060 | 3.37 | % | |||||||||
Total savings and time deposits | 1,696,407 | 19,487 | 4.57 | % | 1,463,686 | 14,246 | 3.86 | % | |||||||||
Borrowings | 126,104 | 1,198 | 3.78 | % | 234,936 | 2,604 | 4.40 | % | |||||||||
Subordinated debentures | 24,666 | 326 | 5.26 | % | 24,613 | 303 | 4.88 | % | |||||||||
Total interest-bearing liabilities | 1,847,177 | 21,011 | 4.53 | % | 1,723,235 | 17,153 | 3.95 | % | |||||||||
Demand deposits | 194,725 | 175,091 | |||||||||||||||
Other liabilities | 27,826 | 23,994 | |||||||||||||||
Total liabilities | 2,069,728 | 1,922,320 | |||||||||||||||
Stockholders' equity | 191,430 | 184,520 | |||||||||||||||
Total liabilities & stockholders' equity | $ | 2,261,158 | $ | 2,106,840 | |||||||||||||
Net interest rate spread | 1.64 | % | 1.66 | % | |||||||||||||
Net interest income/margin | $ | 13,102 | 2.37 | % | $ | 11,799 | 2.29 | % | |||||||||
NET INTEREST INCOME ANALYSIS | |||||||||||||||||
For the Nine Months Ended |
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(unaudited, dollars in thousands) | |||||||||||||||||
2024 | 2023 | ||||||||||||||||
Average | Average | Average | Average | ||||||||||||||
Balance | Interest | Yield/Cost | Balance | Interest | Yield/Cost | ||||||||||||
Assets: | |||||||||||||||||
Interest-earning assets: | |||||||||||||||||
Loans | $ | 2,006,142 | $ | 92,217 | 6.14 | % | $ | 1,802,349 | $ | 75,581 | 5.61 | % | |||||
Investment securities | 99,363 | 4,610 | 6.20 | % | 15,837 | 594 | 5.01 | % | |||||||||
Interest-earning cash | 60,202 | 2,445 | 5.42 | % | 147,423 | 5,673 | 5.14 | % | |||||||||
FHLB stock and other investments | 9,771 | 693 | 9.47 | % | 9,975 | 623 | 8.35 | % | |||||||||
Total interest-earning assets | 2,175,478 | 99,965 | 6.14 | % | 1,975,584 | 82,471 | 5.58 | % | |||||||||
Non interest-earning assets: | |||||||||||||||||
Cash and due from banks | 8,431 | 8,238 | |||||||||||||||
Other assets | 50,593 | 53,720 | |||||||||||||||
Total assets | $ | 2,234,502 | $ | 2,037,542 | |||||||||||||
Liabilities and stockholders' equity: | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||
Savings, N.O.W. and money market deposits | $ | 1,162,587 | $ | 39,541 | 4.54 | % | $ | 1,026,164 | $ | 27,883 | 3.63 | % | |||||
Time deposits | 478,581 | 15,418 | 4.30 | % | 441,557 | 9,657 | 2.92 | % | |||||||||
Total savings and time deposits | 1,641,168 | 54,959 | 4.47 | % | 1,467,721 | 37,540 | 3.42 | % | |||||||||
Borrowings | 156,792 | 4,744 | 4.04 | % | 161,588 | 4,732 | 3.92 | % | |||||||||
Subordinated debentures | 24,653 | 978 | 5.30 | % | 24,599 | 971 | 5.28 | % | |||||||||
Total interest-bearing liabilities | 1,822,613 | 60,681 | 4.45 | % | 1,653,908 | 43,243 | 3.50 | % | |||||||||
Demand deposits | 194,694 | 177,243 | |||||||||||||||
Other liabilities | 26,944 | 24,253 | |||||||||||||||
Total liabilities | 2,044,251 | 1,855,404 | |||||||||||||||
Stockholders' equity | 190,251 | 182,138 | |||||||||||||||
Total liabilities & stockholders' equity | $ | 2,234,502 | $ | 2,037,542 | |||||||||||||
Net interest rate spread | 1.69 | % | 2.08 | % | |||||||||||||
Net interest income/margin | $ | 39,284 | 2.41 | % | $ | 39,228 | 2.65 | % |
Investor and Press Contact:
Chief Financial Officer
(516) 548-8500
Source: Hanover Bancorp, Inc