|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
||
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Smaller reporting company
|
|
Emerging growth company
|
Page
|
||
Part I.
|
||
Item 1.
|
4
|
|
Item 1A.
|
19 | |
Item 1B.
|
42
|
|
Item 2.
|
42
|
|
Item 3.
|
42
|
|
Item 4.
|
42
|
|
Part II.
|
||
Item 5.
|
43
|
|
Item 6.
|
43
|
|
Item 7.
|
43
|
|
Item 7A.
|
60
|
|
Item 8.
|
61
|
|
Item 9.
|
105
|
|
Item 9A.
|
105
|
|
Item 9B.
|
105
|
|
Part III.
|
||
Item 10.
|
106
|
|
Item 11.
|
113
|
|
Item 12.
|
115
|
|
Item 13.
|
117
|
|
Item 14.
|
117
|
|
Part IV.
|
||
Item 15.
|
118
|
|
Item 16.
|
119
|
|
120
|
• |
Establishment of anti-money laundering compliance programs that includes policies, procedures, and internal controls; the designation of a BSA officer; a training program; and independent testing;
|
• |
Filing of certain reports to Financial Crimes Enforcement Network and law enforcement that are designated to assist in the detection and prevention of money laundering and terrorist financing activities;
|
• |
Establishment of a program specifying procedures for obtaining and maintaining certain records from customers seeking to open new accounts, including verifying the identity of customers;
|
• |
In certain circumstances, compliance with enhanced due diligence policies, procedures and controls designed to detect and report money-laundering, terrorist financing and other suspicious activity;
|
• |
Monitoring account activity for suspicious transactions; and
|
• |
A heightened level of review for certain high-risk customers or accounts.
|
• |
Allowing institutions not to characterize loan modifications relating to the COVID-19 pandemic as a troubled debt restructuring and also allowing them to suspend the corresponding impairment determination for accounting purposes;
|
• |
Temporarily reducing the community bank leverage ratio alternative available to institutions of less than $10 billion of assets to 8%;
|
• |
The establishment of the PPP, a specialized low-interest forgivable loan program funded by the U.S. Treasury Department and administered through the SBA’s 7(a) loan guaranty program to support businesses affected by the COVID-19
pandemic; and
|
• |
The ability of a borrower of a federally-backed mortgage loan (VA, FHA, USDA, Freddie Mac and Fannie Mae) experiencing financial hardship due, directly or indirectly, to the COVID-19 pandemic, to request forbearance from paying their
mortgage by submitting a request to the borrower’s servicer affirming their financial hardship during the COVID-19 emergency. Such a forbearance could be granted for up to 180 days, subject to extension for an additional 180-day period
upon the request of the borrower. During that time, no fees, penalties or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the mortgage contract could accrue on
the borrower’s account. Except for vacant or abandoned property, the servicer of a federally-backed mortgage was prohibited from taking any foreclosure action, including any eviction or sale action, for not less than the 60-day period
beginning March 18, 2020, extended by federal mortgage-backing agencies to September 30, 2021. In addition, New York has placed a moratorium on evictions and foreclosures through January 15, 2022 for those experiencing a hardship related
to COVID-19.
|
• |
The Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;
|
• |
The Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one-to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and
escrow account practices, and prohibiting certain practices that increase the cost of settlement services;
|
• |
The Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing
needs of the community it serves;
|
• |
The Equal Credit Opportunity Act and other fair lending laws, prohibiting discrimination on the basis of race, religion, sex and other prohibited factors in extending credit;
|
• |
The Fair Credit Reporting Act, governing the use of credit reports on consumers and the provision of information to credit reporting agencies;
|
• |
Unfair or Deceptive Acts or Practices laws and regulations;
|
• |
The Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and the rules and regulations of the various federal agencies charged with the responsibility of implementing such
federal laws.
|
• |
The Truth in Savings Act, which specifies disclosure requirements with respect to deposit accounts;
|
• |
The Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records;
|
• |
The Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines
and other electronic banking services;
|
• |
The Check Clearing for the 21st Century Act, which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check;
|
• |
State unclaimed property or escheatment laws; and
|
• |
Cybersecurity regulations, including but not limited to those implemented by DFS.
|
• |
We are subject to risks associated with the COVID-19 pandemic, which could have an adverse effect on our business, financial condition and results of operations.
|
• |
Our reliance on one- to four- family residential mortgage lending and certain niche loan products could expose us to credit risks that may be different than would apply to a more diversified or traditional loan portfolio.
|
• |
Our business and operations are concentrated in the New York metropolitan area, and we are sensitive to adverse changes in the local economy.
|
• |
We are subject to the various risks associated with our banking business and operations, including, among others, credit, market, liquidity, interest rate and compliance risks, which may have an adverse effect on our business, financial
condition and results of operations if we are unable to manage such risks.
|
• |
SBA lending is an increasingly important part our business, and changes to the SBA programs, or the rules governing such programs, and our ability to qualify as a Preferred SBA lender, may adversely affect our profitability.
|
• |
Our liquidity and capital needs, particularly given our growth strategy, may suffer if not managed effectively or if capital is not available on terms acceptable to us.
|
• |
Our ability to continue to grow will diminish if we are unable to continue to make commercially attractive acquisitions, or if we are unable to realize the benefits of prior or future acquisitions in a reasonable timeframe.
|
• |
We operate in a highly competitive market and face increasing competition from traditional and new financial services providers.
|
• |
We are dependent on key personnel and the unexpected loss of their services, or if we are unable to attract new personnel as we execute our growth strategy, will adversely impact our financial condition.
|
• |
We operate in a highly regulated industry, and the current regulatory framework and any future legislative and regulatory changes, may have an adverse effect on our business, financial condition and results of operations.
|
• |
We are subject to risks associated with our dependency on our information technology and telecommunications systems and third-party servicers including exposures to systems failures, interruptions or breaches of security.
|
• |
We do not anticipate paying cash dividends in the near future.
|
•
|
Anti-takeover provisions in our charter and under New York law could limit certain shareholder actions.
|
• |
risks to the capital markets due to the volatility in financial markets that may impact the performance of our investment securities portfolio;
|
• |
effects on key employees, including operational management personnel and those charged with preparing, monitoring and evaluating our financial reporting and internal controls;
|
• |
declines in demand for loans and other banking services and products, as well as increases in our non-performing loans, owing to the effects of COVID-19 in the markets served by the Bank and on the business of borrowers of the Bank;
|
• |
declines in demand resulting from adverse impacts of the virus on businesses deemed to be “non-essential” by governments in the markets served by the Bank;
|
• |
reduced fees as we waive certain fees for our customers impacted by the COVID-19 pandemic; and
|
• |
higher operating costs, increased cybersecurity risks and potential loss of productivity while we work remotely.
|
• |
a decrease in the demand for our loans and other products we offer;
|
• |
a decrease in our deposit balances due to overall reductions in the number or value of client accounts;
|
• |
a decrease in the value of collateral securing our loans;
|
• |
an increase in the level of nonperforming and classified loans;
|
• |
an increase in provisions for credit losses and loan charge-offs;
|
• |
a decrease in net interest income derived from our lending and deposit gathering activities;
|
• |
a decrease in our ability to access the capital markets; and
|
• |
an increase in our operating expenses associated with attending to the effects of certain circumstances listed above.
|
• |
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 OREO;
|
• |
we must provide for probable loan losses through a current period charge to the provision for loan losses;
|
• |
non-interest expense increases when we write down the value of properties in our OREO 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.
|
• |
any business, technology, service or product that we acquire could under-perform relative to our expectations and the price that we paid for it, or not perform in accordance with our anticipated timetable, or we could fail to make such
business profitable;
|
• |
we may incur or assume significant debt in connection with our acquisitions which could cause a deterioration of our credit rating, result in increased borrowing costs and interest expense and diminish our future access to the capital
markets;
|
• |
acquisitions could cause our results of operations to differ from our own or the investment community’s expectations in any given period, or over the long-term;
|
• |
pre-closing and post-closing acquisition-related earnings charges could adversely impact our results of operations in any given period, and the impact may be substantially different from period to period;
|
• |
acquisitions could create demands on our management, operational resources and financial and internal control systems that we are unable to effectively address, or for which we may incur additional costs;
|
• |
we could experience difficulty in integrating personnel, operations, financial and other systems, and in retaining key employees and customers;
|
• |
we may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition;
|
• |
we may assume by acquisition unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting
from the acquired company’s activities. The realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial condition or cause us to fail to meet our public financial reporting
obligations; and
|
• |
as a result of our acquisitions, we have recorded significant goodwill and intangible assets on our balance sheets. If we are not able to realize the value of these assets, we may be required to incur charges relating to the impairment
of these assets, which could materially impact our financial statements.
|
• |
failures of technological systems or breaches of security measures, including, but not limited to, those resulting from computer viruses or cyber-attacks;
|
• |
unsuccessful or difficult implementation of computer systems upgrades;
|
• |
human errors or omissions, including failures to comply with applicable laws or corporate policies and procedures;
|
• |
theft, fraud or misappropriation of assets, whether arising from the intentional actions of internal personnel or external third parties;
|
• |
breakdowns in processes, breakdowns in internal controls or failures of the systems and facilities that support our operations;
|
• |
deficiencies in services or service delivery;
|
• |
negative developments in relationships with key counterparties, third-party vendors, or employees in our day-to-day operations; and
|
• |
external events that are wholly or partially beyond our control, such as pandemics, geopolitical events, political unrest, natural disasters or acts of terrorism.
|
• |
Headquarters and Mineola Branch — 80 East Jericho Turnpike, Mineola, New York — this building has a branch on the first floor and Hanover’s corporate and administrative offices on the second and third floors.
|
• |
Garden City Park Branch — 2131 Jericho Turnpike, Garden City Park, New York — this one-story building houses the Bank’s original branch as well as its Loan Servicing Department.
|
• |
Flushing Branch — 138-29 39th Avenue, Flushing, New York — this is a ground floor branch opened in 2019.
|
• |
Forest Hills Branch — 71-15 Austin Street, Forest Hills, New York — this is a ground floor branch opened in 2017.
|
• |
Sunset Park Branch — 5512 8th Avenue, Brooklyn, New York — this three-story building has a branch on the ground floor and administrative offices on the second and third floors.
|
• |
Bowery Branch — 109 Bowery, New York, New York — this three-story building has a branch on the ground floor and administrative offices on the second and third floors.
|
• |
Rockefeller Center Branch — 600 5th Avenue, New York, New York — this is a branch acquired as part of the Savoy transaction.
|
ITEM 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
September 30,
|
||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
|||||||||
Selected Balance Sheet Data:
|
||||||||||||
Securities available-for-sale, at fair value
|
$
|
7,747
|
$
|
6,035
|
$
|
911
|
||||||
Securities held-to-maturity
|
8,611
|
10,727
|
12,030
|
|||||||||
Loans held for investment
|
1,247,125
|
725,019
|
720,442
|
|||||||||
Total assets
|
1,484,641
|
851,606
|
848,836
|
|||||||||
Total deposits
|
1,164,662
|
664,760
|
650,286
|
|||||||||
Total stockholders' equity
|
122,529
|
78,043
|
848,836
|
|||||||||
Year Ended September 30,
|
||||||||||||
(amounts in thousands)
|
2021
|
2020
|
2019
|
|||||||||
Selected Operating Data:
|
||||||||||||
Total interest income
|
$
|
48,675
|
$
|
40,133
|
$
|
34,497
|
||||||
Total interest expense
|
6,967
|
13,011
|
12,076
|
|||||||||
Net interest income
|
41,708
|
27,122
|
22,421
|
|||||||||
Provision for loan losses
|
1,000
|
1,250
|
650
|
|||||||||
Total non-interest income
|
3,349
|
1,364
|
4,770
|
|||||||||
Total non-interest expense
|
30,005
|
21,022
|
15,887
|
|||||||||
Income before income taxes
|
14,052
|
6,214
|
10,654
|
|||||||||
Income tax expense
|
3,201
|
1,240
|
2,569
|
|||||||||
Net income
|
10,851
|
4,974
|
8,085
|
|||||||||
Selected Financial Data and Other Data:
|
||||||||||||
Return on average equity
|
0.99
|
%
|
0.58
|
%
|
1.16
|
%
|
||||||
Return on average assets
|
11.53
|
%
|
6.63
|
%
|
12.71
|
%
|
||||||
Yield on average interest earning assets
|
4.63
|
%
|
4.87
|
%
|
5.07
|
%
|
||||||
Cost of average interest bearing liabilities
|
0.81
|
%
|
1.87
|
%
|
2.07
|
%
|
||||||
Net interest rate spread
|
3.82
|
%
|
3.00
|
%
|
3.00
|
%
|
||||||
Net interest rate margin
|
3.97
|
%
|
3.29
|
%
|
3.30
|
%
|
||||||
Average equity to average assets
|
8.61
|
%
|
8.80
|
%
|
9.11
|
%
|
Year Ended September 30,
|
||||||||||||||||||||||||||||||||||||
2021
|
2020
|
2019
|
||||||||||||||||||||||||||||||||||
(in thousands)
|
Average Balance
|
Interest
|
Average Rate
|
Average Balance
|
Interest
|
Average Rate
|
Average Balance
|
Interest
|
Average Rate
|
|||||||||||||||||||||||||||
Interest-earning assets
|
||||||||||||||||||||||||||||||||||||
Loans(1)(2)
|
$
|
934,066
|
$
|
47,685
|
5.11
|
%
|
$
|
717,834
|
$
|
38,641
|
5.38
|
%
|
$
|
616,353
|
$
|
32,660
|
5.30
|
%
|
||||||||||||||||||
Investment securities(1)
|
16,845
|
685
|
4.07
|
%
|
13,907
|
523
|
3.76
|
%
|
12,851
|
427
|
3.32
|
%
|
||||||||||||||||||||||||
Interest-earning balances and other
|
99,348
|
305
|
0.31
|
%
|
92,506
|
969
|
1.05
|
%
|
51,209
|
1,410
|
2.75
|
%
|
||||||||||||||||||||||||
Total interest-earning assets
|
1,050,259
|
48,675
|
4.63
|
%
|
824,247
|
40,133
|
4.87
|
%
|
680,413
|
34,497
|
5.07
|
%
|
||||||||||||||||||||||||
Other assets
|
42,675
|
27,807
|
17,453
|
|||||||||||||||||||||||||||||||||
Total assets
|
$
|
1,092,934
|
$
|
852,054
|
$
|
697,866
|
||||||||||||||||||||||||||||||
Interest-bearing liabilities
|
||||||||||||||||||||||||||||||||||||
Savings, NOW and money market deposits
|
$
|
333,996
|
$
|
903
|
0.27
|
%
|
$
|
179,106
|
$
|
1,445
|
0.81
|
%
|
$
|
160,073
|
$
|
2,510
|
1.57
|
%
|
||||||||||||||||||
Time deposits
|
380,473
|
3,822
|
1.00
|
%
|
418,384
|
9,180
|
2.19
|
%
|
302,124
|
6,725
|
2.23
|
%
|
||||||||||||||||||||||||
Total interest-bearing deposits
|
714,469
|
4,725
|
0.66
|
%
|
597,490
|
10,625
|
1.78
|
%
|
462,197
|
9,235
|
2.00
|
%
|
||||||||||||||||||||||||
Borrowings
|
121,246
|
955
|
0.79
|
%
|
99,550
|
2,386
|
2.40
|
%
|
120,376
|
2,841
|
2.36
|
%
|
||||||||||||||||||||||||
Subordinated debentures
|
24,088
|
1,287
|
5.34
|
%
|
-
|
-
|
0.00
|
%
|
-
|
-
|
0.00
|
%
|
||||||||||||||||||||||||
Total interest-bearing liabilities
|
859,803
|
6,967
|
0.81
|
%
|
697,040
|
13,011
|
1.87
|
%
|
582,573
|
12,076
|
2.07
|
%
|
||||||||||||||||||||||||
Non-interest-bearing deposits
|
128,540
|
72,007
|
46,132
|
|||||||||||||||||||||||||||||||||
Other liabilities
|
10,519
|
8,031
|
5,573
|
|||||||||||||||||||||||||||||||||
Stockholders' equity
|
94,072
|
74,976
|
63,588
|
|||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
1,092,934
|
$
|
852,054
|
$
|
697,866
|
||||||||||||||||||||||||||||||
Net interest income and interest rate spread
|
3.82
|
%
|
3.00
|
%
|
3.00
|
%
|
||||||||||||||||||||||||||||||
Net interest margin
|
$
|
41,708
|
3.97
|
%
|
$
|
27,122
|
3.29
|
%
|
$
|
22,421
|
3.30
|
%
|
2021 vs. 2020
|
2020 vs. 2019
|
|||||||||||||||||||||||
Increase (decrease) due to change in:
|
||||||||||||||||||||||||
(in thousands)
|
Average volume
|
Average rate
|
Total
|
Average volume
|
Average rate
|
Total
|
||||||||||||||||||
Interest income
|
||||||||||||||||||||||||
Loans
|
$
|
11,127
|
$
|
(2,083
|
)
|
$
|
9,044
|
$
|
5,455
|
$
|
526
|
$
|
5,981
|
|||||||||||
Investment securities
|
117
|
45
|
162
|
37
|
59
|
96
|
||||||||||||||||||
Interest-earning balances and other
|
67
|
(731
|
)
|
(664
|
)
|
539
|
(980
|
)
|
(441
|
)
|
||||||||||||||
Total interest income
|
11,311
|
(2,769
|
)
|
$
|
8,542
|
6,031
|
(395
|
)
|
$
|
5,636
|
||||||||||||||
Interest expense
|
||||||||||||||||||||||||
Savings, NOW and money market deposits
|
$
|
780
|
$
|
(1,322
|
)
|
$
|
(542
|
)
|
$
|
269
|
$
|
(1,334
|
)
|
$
|
(1,065
|
)
|
||||||||
Time deposits
|
(775
|
)
|
(4,583
|
)
|
(5,358
|
)
|
2,553
|
(98
|
)
|
2,455
|
||||||||||||||
Borrowings
|
434
|
(1,865
|
)
|
(1,431
|
)
|
(370
|
)
|
(85
|
)
|
(455
|
)
|
|||||||||||||
Subordinated debentures
|
1,287
|
-
|
1,287
|
-
|
-
|
-
|
||||||||||||||||||
Total interest expense
|
1,726
|
(7,770
|
)
|
(6,044
|
)
|
2,452
|
(1,517
|
)
|
$
|
935
|
||||||||||||||
Net increase in net interest income
|
$
|
9,585
|
$
|
5,001
|
$
|
14,586
|
$
|
3,579
|
$
|
1,122
|
$
|
4,701
|
Year Ended September 30,
|
||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
|||||||||
Loan fees and service charges
|
$
|
703
|
$
|
301
|
$
|
185
|
||||||
Loan servicing income
|
504
|
84
|
160
|
|||||||||
Service charges on deposit accounts
|
127
|
62
|
64
|
|||||||||
Net gain on sale of investments available-for-sale
|
240
|
-
|
-
|
|||||||||
Net gain on sale of loans held-for-sale
|
1,307
|
917
|
4,361
|
|||||||||
Other income
|
468
|
-
|
-
|
|||||||||
Total non-interest income
|
$
|
3,349
|
$
|
1,364
|
$
|
4,770
|
Year Ended September 30,
|
||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
|||||||||
Salaries and employee benefits
|
$
|
15,009
|
$
|
11,182
|
$
|
9,041
|
||||||
Occupancy and equipment
|
4,978
|
4,462
|
2,835
|
|||||||||
Data processing
|
1,280
|
911
|
662
|
|||||||||
Advertising and promotion
|
118
|
296
|
487
|
|||||||||
Acquisition costs
|
4,430
|
450
|
737
|
|||||||||
Professional fees
|
1,706
|
2,070
|
775
|
|||||||||
Other
|
2,484
|
1,651
|
1,350
|
|||||||||
Total non-interest expense
|
$
|
30,005
|
$
|
21,022
|
$
|
15,887
|
Balance at September 30,
|
||||||||||||||||||||||||
2021
|
2020
|
2019
|
||||||||||||||||||||||
(in thousands)
|
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
||||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||||||||||
U.S. GSE residential mortgage-backed securities
|
$
|
722
|
$
|
833
|
$
|
838
|
$
|
962
|
$
|
883
|
$
|
911
|
||||||||||||
Corporate bonds
|
6,700
|
6,914
|
5,000
|
5,073
|
-
|
-
|
||||||||||||||||||
Total investment securities available-for-sale
|
7,422
|
7,747
|
5,838
|
6,035
|
883
|
911
|
||||||||||||||||||
Investment securities held-to-maturity:
|
||||||||||||||||||||||||
U.S. GSE residential mortgage-backed securities
|
2,417
|
2,491
|
4,478
|
4,596
|
5,729
|
5,748
|
||||||||||||||||||
U.S. GSE commercial mortgage-backed securities
|
2,694
|
2,869
|
2,749
|
3,002
|
2,801
|
2,904
|
||||||||||||||||||
Corporate bonds
|
3,500
|
3,505
|
3,500
|
3,533
|
3,500
|
3,539
|
||||||||||||||||||
Total investment securities held-to-maturity
|
8,611
|
8,865
|
10,727
|
11,131
|
12,030
|
12,191
|
||||||||||||||||||
Total investment securities
|
$
|
16,033
|
$
|
16,612
|
$
|
16,565
|
$
|
17,166
|
$
|
12,913
|
$
|
13,102
|
Balance at September 30, 2021
|
||||||||||||||||
Available-for-Sale
|
Held-to-Maturity
|
|||||||||||||||
(in thousands)
|
Amortized Cost
|
Weighted Average Yield
|
Amortized Cost
|
Weighted Average Yield
|
||||||||||||
U.S. GSE residential mortgage-backed securities
|
||||||||||||||||
Due within one year
|
$
|
25
|
-0.99
|
%
|
$
|
-
|
-
|
|||||||||
Due after one year through five years
|
1
|
-3.75
|
%
|
-
|
-
|
|||||||||||
Due after ten years
|
696
|
2.44
|
%
|
2,417
|
2.29
|
%
|
||||||||||
722
|
2.01
|
%
|
2,417
|
2.29
|
%
|
|||||||||||
U.S. GSE commercial mortgage-backed securities
|
||||||||||||||||
Due after one year through five years
|
-
|
-
|
2,694
|
2.68
|
%
|
|||||||||||
-
|
-
|
2,694
|
2.68
|
%
|
||||||||||||
Corporate bonds
|
||||||||||||||||
Due after one year through five years
|
-
|
-
|
1,500
|
5.00
|
%
|
|||||||||||
Due after five years through ten years
|
6,700
|
4.61
|
%
|
2,000
|
5.25
|
%
|
||||||||||
Due after ten years
|
-
|
-
|
-
|
-
|
||||||||||||
6,700
|
4.61
|
%
|
3,500
|
5.14
|
%
|
|||||||||||
Total investment securities
|
$
|
7,422
|
4.36
|
%
|
$
|
8,611
|
3.57
|
%
|
Balance at September 30, 2020
|
||||||||||||||||
Available-for-Sale
|
Held-to-Maturity
|
|||||||||||||||
(in thousands)
|
Amortized Cost
|
Weighted Average Yield
|
Amortized Cost
|
Weighted Average Yield
|
||||||||||||
U.S. GSE residential mortgage-backed securities
|
||||||||||||||||
Due after five years through ten years
|
$
|
-
|
-
|
$
|
-
|
-
|
||||||||||
Due after one year through five years
|
-
|
-
|
-
|
-
|
||||||||||||
Due after ten years
|
838
|
2.73
|
%
|
4,478
|
2.19
|
%
|
||||||||||
838
|
2.73
|
%
|
4,478
|
2.29
|
%
|
|||||||||||
U.S. GSE commercial mortgage-backed securities
|
||||||||||||||||
Due after five years through ten years
|
-
|
-
|
2,749
|
2.68
|
%
|
|||||||||||
-
|
-
|
2,749
|
2.68
|
%
|
||||||||||||
Corporate bonds
|
||||||||||||||||
Due after one year through five years
|
-
|
-
|
-
|
-
|
||||||||||||
Due after five years through ten years
|
5,000
|
5.75
|
%
|
3,500
|
5.79
|
%
|
||||||||||
Due after ten years
|
-
|
-
|
-
|
-
|
||||||||||||
5,000
|
5.75
|
%
|
3,500
|
5.14
|
%
|
|||||||||||
Total investment securities
|
$
|
5,838
|
5.32
|
%
|
$
|
10,727
|
3.49
|
%
|
Balance at September 30,
|
||||||||||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
2018
|
2017
|
|||||||||||||||
Real estate:
|
||||||||||||||||||||
Residential
|
$
|
444,011
|
$
|
454,073
|
$
|
465,422
|
$
|
372,673
|
$
|
238,251
|
||||||||||
Multi-family
|
266,294
|
136,539
|
139,504
|
132,301
|
120,143
|
|||||||||||||||
Commercial
|
348,641
|
113,615
|
108,197
|
48,669
|
59,190
|
|||||||||||||||
Total real estate
|
1,058,946
|
704,227
|
713,123
|
553,643
|
417,584
|
|||||||||||||||
Commercial and industrial
|
172,274
|
21,100
|
7,353
|
6,736
|
5,715
|
|||||||||||||||
Construction
|
15,374
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
11
|
24
|
501
|
24
|
86
|
|||||||||||||||
Gross loans
|
1,246,605
|
725,351
|
720,977
|
560,403
|
423,385
|
|||||||||||||||
Net deferred loan costs (fees)
|
520
|
(332
|
)
|
(535
|
)
|
(1,023
|
)
|
(758
|
)
|
|||||||||||
Total loans held for investment
|
$
|
1,247,125
|
$
|
725,019
|
$
|
720,442
|
$
|
559,380
|
$
|
422,627
|
Balance at September 30, 2021
|
||||||||||||||||
(in thousands)
|
Due within One Year
|
Due After One Year But Within Five Years
|
Due After Five Years
|
Total
|
||||||||||||
By Loan Type:
|
||||||||||||||||
Commercial and industrial
|
$
|
29,689
|
$
|
129,503
|
$
|
13,082
|
$
|
172,274
|
||||||||
Real estate construction
|
8,761
|
2,789
|
3,824
|
15,374
|
||||||||||||
Total
|
$
|
38,450
|
$
|
132,292
|
$
|
16,906
|
$
|
187,648
|
||||||||
By Interest Rate Type:
|
||||||||||||||||
Fixed rate
|
$
|
21,986
|
$
|
123,823
|
$
|
183
|
$
|
145,992
|
||||||||
Variable rate
|
16,464
|
8,469
|
16,723
|
41,656
|
||||||||||||
Total
|
$
|
38,450
|
$
|
132,292
|
$
|
16,906
|
$
|
187,648
|
Balance at September 30, 2020
|
||||||||||||||||
(in thousands)
|
Due within One Year
|
Due After One Year But Within Five Years
|
Due After Five Years
|
Total
|
||||||||||||
By Loan Type:
|
||||||||||||||||
Commercial and industrial
|
$
|
2,322
|
$
|
18,123
|
$
|
655
|
$
|
21,100
|
||||||||
Real estate construction
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
$
|
2,322
|
$
|
18,123
|
$
|
655
|
$
|
21,100
|
||||||||
By Interest Rate Type:
|
||||||||||||||||
Fixed rate
|
$
|
-
|
$
|
17,825
|
$
|
206
|
$
|
18,031
|
||||||||
Variable rate
|
-
|
298
|
449
|
747
|
||||||||||||
Total
|
$
|
-
|
$
|
18,123
|
$
|
655
|
$
|
18,778
|
Balance at September 30,
|
||||||||||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
2018
|
2017
|
|||||||||||||||
Nonaccrual loans
|
$
|
7,028
|
$
|
953
|
$
|
1,613
|
$
|
-
|
$
|
-
|
||||||||||
Loans greater than 90 days past due
|
-
|
296
|
629
|
-
|
-
|
|||||||||||||||
Total nonperforming assets
|
$
|
7,028
|
$
|
1,249
|
$
|
2,242
|
$
|
-
|
$
|
-
|
||||||||||
Performing TDRs
|
$
|
455
|
$
|
454
|
$
|
454
|
$
|
354
|
$
|
562
|
||||||||||
Nonaccrual loans as a percentage of loans held-for-investment
|
0.56
|
%
|
0.13
|
%
|
0.22
|
%
|
0.00
|
%
|
0.00
|
%
|
||||||||||
Non-performing assets as a percentage of total assets
|
0.47
|
%
|
0.15
|
%
|
0.26
|
%
|
0.00
|
%
|
0.00
|
%
|
At September 30,
|
||||||||||||||||||||||||||||||||||||||||
2021
|
2020
|
2019
|
2018
|
2017
|
||||||||||||||||||||||||||||||||||||
(in thousands)
|
Amount
|
% of Gross Loans
|
Amount
|
% of Gross Loans
|
Amount
|
% of Gross Loans
|
Amount
|
% of Gross Loans
|
Amount
|
% of Gross Loans
|
||||||||||||||||||||||||||||||
Residential real estate
|
$
|
4,155
|
0.94
|
%
|
$
|
5,103
|
1.12
|
%
|
$
|
4,647
|
1.00
|
%
|
$
|
4,363
|
1.17
|
%
|
$
|
2,659
|
1.12
|
%
|
||||||||||||||||||||
Multi-family
|
2,433
|
0.91
|
%
|
1,506
|
1.10
|
%
|
1,215
|
0.87
|
%
|
1,478
|
1.12
|
%
|
1,422
|
1.18
|
%
|
|||||||||||||||||||||||||
Commercial real estate
|
1,884
|
0.54
|
%
|
1,221
|
1.07
|
%
|
1,193
|
1.10
|
%
|
500
|
1.03
|
%
|
651
|
1.10
|
%
|
|||||||||||||||||||||||||
Commercial and industrial
|
79
|
0.05
|
%
|
38
|
0.18
|
%
|
75
|
1.02
|
%
|
152
|
2.26
|
%
|
62
|
1.08
|
%
|
|||||||||||||||||||||||||
Construction
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||
Consumer
|
1
|
9.09
|
%
|
1
|
4.17
|
%
|
13
|
2.59
|
%
|
-
|
-
|
1
|
1.16
|
%
|
||||||||||||||||||||||||||
Total allowance for loan losses
|
$
|
8,552
|
0.69
|
%
|
$
|
7,869
|
1.08
|
%
|
$
|
7,143
|
0.99
|
%
|
$
|
6,493
|
1.16
|
%
|
$
|
4,795
|
1.13
|
%
|
Year Ended September 30,
|
||||||||||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
2018
|
2017
|
|||||||||||||||
Beginning balance
|
$
|
7,869
|
$
|
7,143
|
$
|
6,493
|
$
|
4,795
|
$
|
3,419
|
||||||||||
Provision for loan losses
|
1,000
|
1,250
|
650
|
1,698
|
1,376
|
|||||||||||||||
Charge-Offs:
|
||||||||||||||||||||
Residential real estate
|
(267
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Multi-family
|
(32
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Commercial real estate
|
(30
|
)
|
(224
|
)
|
-
|
-
|
-
|
|||||||||||||
Commercial and industrial
|
-
|
(300
|
)
|
-
|
-
|
-
|
||||||||||||||
Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total loan charge-offs
|
(329
|
)
|
(524
|
)
|
-
|
-
|
-
|
|||||||||||||
Recoveries:
|
||||||||||||||||||||
Commercial and industrial
|
12
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total recoveries
|
12
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total net charge-offs
|
(317
|
)
|
(524
|
)
|
-
|
-
|
-
|
|||||||||||||
Ending balance
|
$
|
8,552
|
$
|
7,869
|
$
|
7,143
|
$
|
6,493
|
$
|
4,795
|
||||||||||
Allowance for loan losses to total loans held-for-investment(1)(2)
|
0.69
|
%
|
1.09
|
%
|
0.99
|
%
|
1.16
|
%
|
1.13
|
%
|
||||||||||
Net charge-offs to average loans held-for-investment
|
0.03
|
%
|
0.07
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
Year Ended September 30,
|
||||||||||||||||||||||||
2021
|
2020
|
2019
|
||||||||||||||||||||||
(in thousands)
|
Average
Balance
|
Average
Rate
|
Average
Balance
|
Average
Rate
|
Average
Balance
|
Average
Rate
|
||||||||||||||||||
Non-interest bearing demand
|
$
|
128,540
|
0.00
|
%
|
$
|
72,007
|
0.00
|
%
|
$
|
46,132
|
0.00
|
%
|
||||||||||||
Savings
|
48,995
|
0.20
|
%
|
41,223
|
0.45
|
%
|
25,688
|
1.01
|
%
|
|||||||||||||||
NOW
|
153,595
|
0.26
|
%
|
37,774
|
0.63
|
%
|
40,764
|
0.86
|
%
|
|||||||||||||||
Money market
|
131,406
|
0.30
|
%
|
100,109
|
1.02
|
%
|
93,621
|
2.03
|
%
|
|||||||||||||||
Time deposits
|
380,473
|
1.00
|
%
|
418,384
|
2.19
|
%
|
302,124
|
2.23
|
%
|
|||||||||||||||
Total average deposits
|
$
|
843,009
|
0.56
|
%
|
$
|
669,497
|
1.59
|
%
|
$
|
508,329
|
1.82
|
%
|
September 30,
|
||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
|||||||||
Three months or less
|
$
|
69,530
|
$
|
59,075
|
$
|
38,372
|
||||||
Over three months through six months
|
66,506
|
73,907
|
30,459
|
|||||||||
Over six months through 12 months
|
51,485
|
83,940
|
94,411
|
|||||||||
Over 12 months
|
90,603
|
39,111
|
84,311
|
|||||||||
Total
|
$
|
278,124
|
$
|
256,033
|
$
|
247,553
|
Payments Due by Period
|
||||||||||||||||||||
(in thousands)
|
Less than
One Year |
More Than
One Year but
Less than
Three Years
|
More Than
Three Years but
Less than Five
Years
|
After Five
Years
|
Total
|
|||||||||||||||
Time deposits
|
$
|
277,431
|
$
|
74,307
|
$
|
25,106
|
$
|
992
|
$
|
377,836
|
||||||||||
Subordinated debentures
|
-
|
-
|
-
|
24,513
|
24,513
|
|||||||||||||||
FHLB borrowings
|
4,000
|
30,900
|
7,080
|
-
|
41,980
|
|||||||||||||||
FRB borrowings
|
10,980
|
-
|
106,682
|
-
|
117,662
|
|||||||||||||||
Operating leases
|
1,886
|
3,869
|
3,572
|
4,729
|
14,056
|
|||||||||||||||
Standby letters of credit
|
786
|
-
|
-
|
-
|
786
|
|||||||||||||||
Unused lines of credit(1)
|
5,109
|
266
|
2
|
5,316
|
10,693
|
|||||||||||||||
Total contractual obligations
|
$
|
300,192
|
$
|
109,342
|
$
|
142,442
|
$
|
35,550
|
$
|
587,526
|
September 30,
|
||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
|||||||||
Total capital
|
$
|
132,554
|
$
|
95,079
|
$
|
89,295
|
||||||
Tier 1 capital
|
123,666
|
89,275
|
83,424
|
|||||||||
Common equity tier 1 capital
|
123,666
|
89,275
|
83,424
|
|||||||||
Total capital ratio
|
15.59
|
%
|
20.57
|
%
|
19.07
|
%
|
||||||
Tier 1 capital ratio
|
14.54
|
%
|
19.32
|
%
|
17.81
|
%
|
||||||
Common equity tier 1 capital ratio
|
14.54
|
%
|
19.32
|
%
|
17.81
|
%
|
||||||
Tier 1 leverage ratio
|
9.45
|
%
|
11.22
|
%
|
10.47
|
%
|
Crowe LLP
Independent Member Crowe Global
|
|
|
|
Crowe LLP
|
September 30, |
||||||||
(in thousands, except share and per share data) |
2021
|
2020
|
||||||
ASSETS
|
||||||||
Cash and non-interest-bearing deposits due from banks
|
$
|
|
$
|
|
||||
Interest-bearing deposits due from banks
|
|
|
||||||
Federal funds sold
|
|
|
||||||
Total cash and cash equivalents
|
|
|
||||||
Investment securities, held-to-maturity (fair value of $
|
|
|
||||||
Investment securities, available-for-sale, at fair value
|
|
|
||||||
Loans held for investment
|
|
|
||||||
Allowance for loan losses
|
(
|
)
|
(
|
)
|
||||
Loans held for investment, net
|
|
|
||||||
Premises and equipment, net
|
|
|
||||||
Accrued interest receivable
|
|
|
||||||
Prepaid pension
|
|
|
||||||
Stock in Federal Home Loan Bank, at cost
|
|
|
||||||
Goodwill
|
|
|
||||||
Other intangible assets |
||||||||
Loan servicing rights |
||||||||
Deferred income taxes |
||||||||
Other assets
|
|
|
||||||
TOTAL ASSETS
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Deposits:
|
||||||||
Non-interest bearing demand
|
$
|
|
$
|
|
||||
Savings, NOW and money market
|
|
|
||||||
Time
|
|
|
||||||
Total deposits
|
|
|
||||||
Borrowings
|
|
|
||||||
Note payable
|
|
|
||||||
Subordinated debentures |
||||||||
Accrued interest payable
|
|
|
||||||
Other liabilities
|
|
|
||||||
TOTAL LIABILITIES
|
|
|
||||||
STOCKHOLDERS' EQUITY
|
||||||||
Preferred stock; par value $
|
|
|
||||||
Common stock; par value $
|
|
|
||||||
Capital in excess of par
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive income, net of tax
|
|
|
||||||
TOTAL STOCKHOLDERS' EQUITY
|
|
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
|
$
|
|
|
Year Ended September 30,
|
|||||||
(in thousands, except share and per share data)
|
2021
|
2020
|
||||||
INTEREST INCOME
|
|
|
||||||
Interest on loans
|
$
|
|
$
|
|
||||
Interest and dividends on investment securities
|
|
|
||||||
Federal funds sold
|
|
|
||||||
Other interest income
|
|
|
||||||
Total interest income
|
|
|
||||||
INTEREST EXPENSE
|
|
|
||||||
Savings, NOW and money market deposits
|
|
|
||||||
Time deposits
|
|
|
||||||
Borrowings
|
|
|
||||||
Total interest expense
|
|
|
||||||
Net interest income
|
|
|
||||||
Provision for loan losses
|
|
|
||||||
Net interest income after provision for loan losses
|
|
|
||||||
NON-INTEREST INCOME
|
|
|
||||||
Loan fees and service charges
|
|
|
||||||
Loan servicing income
|
|
|
||||||
Service charges on deposit accounts
|
|
|
||||||
Gain on sale of investment securities available-for-sale, net |
||||||||
Gain on sale of loans held-for-sale
|
|
|
||||||
Other income
|
||||||||
Total non-interest income
|
|
|
||||||
NON-INTEREST EXPENSE
|
|
|
||||||
Salaries and employee benefits
|
|
|
||||||
Occupancy and equipment
|
|
|
||||||
Data processing
|
|
|
||||||
Advertising and promotion
|
|
|
||||||
Acquisition costs
|
|
|
||||||
Professional fees
|
|
|
||||||
Other expenses
|
|
|
||||||
Total non-interest expense
|
|
|
||||||
Income before income tax expense
|
|
|
||||||
Income tax expense
|
|
|
||||||
Net income
|
$
|
|
$
|
|
||||
Earnings per share:
|
|
|
||||||
Basic
|
$
|
|
$
|
|
||||
Diluted
|
$
|
|
$
|
|
||||
Weighted average shares outstanding:
|
||||||||
Basic | ||||||||
Diluted |
Year Ended September 30,
|
||||||||
(in thousands) |
2021
|
2020
|
||||||
Net income
|
$
|
|
$
|
|
||||
Other comprehensive income, net of tax:
|
||||||||
Change in unrealized gain on investment securities available-for-sale, net of tax of $
|
|
|
||||||
Reclassification adjustment for gains realized in net income, net of tax of $
|
( |
) | ||||||
Total other comprehensive income, net of tax
|
|
|
||||||
Total comprehensive income, net of tax
|
$
|
|
$
|
|
(in thousands, except shares)
|
Common stock
(shares)
|
Common stock
|
Capital in excess
of par
|
Retained
Earnings
|
Accumulated other
comprehensive
income
|
Total
stockholders'
equity
|
||||||||||||||||||
Balance at October 1, 2019
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Net income
|
-
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
-
|
|
|
|
|
|
||||||||||||||||||
Stock-based compensation
|
(
|
)
|
|
|
|
|
|
|||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
||||||||||||||||||
Issuance of common stock
|
|
|
|
|
|
|
||||||||||||||||||
Balance at September 30, 2020
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Net income
|
-
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
-
|
|
|
|
|
|
||||||||||||||||||
Common stock issued in purchase of Savoy
|
|
|
|
|
|
|
||||||||||||||||||
Savoy acquisition rollover options
|
|
|
|
|
|
|
||||||||||||||||||
Issuance of common stock
|
|
|
|
|
|
|
||||||||||||||||||
Stock-based compensation, net
|
|
|
|
|
|
|
||||||||||||||||||
Balance at September 30, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Year Ended September 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for loan losses
|
|
|
||||||
Depreciation and amortization
|
|
|
||||||
Originations of loans held for sale
|
|
(
|
)
|
|||||
Proceeds from sales of loans held for sale
|
|
|
||||||
Net gain on sale of loans
|
(
|
)
|
(
|
)
|
||||
Stock-based compensation
|
|
|
||||||
Net gain on sale of securities available for sale
|
(
|
)
|
|
|||||
Net accretion of premiums, discounts and loan fees and costs
|
(
|
)
|
(
|
)
|
||||
Amortization of intangible assets
|
|
|
||||||
Amortization of debt issuance costs
|
|
|
||||||
Loan servicing rights valuation adjustments
|
|
|
||||||
Deferred tax expense
|
|
|
||||||
Decrease (increase) in accrued interest receivable
|
|
(
|
)
|
|||||
Decrease (increase) in other assets
|
|
(
|
)
|
|||||
Decrease in accrued interest payable
|
(
|
)
|
(
|
)
|
||||
Increase (decrease) in other liabilities
|
|
(
|
)
|
|||||
Net cash provided by operating activities
|
|
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of securities available for sale
|
(
|
)
|
(
|
)
|
||||
Purchases of restricted securities
|
(
|
)
|
(
|
)
|
||||
Principal repayments of securities held to maturity
|
|
|
||||||
Principal repayments of securities available for sale
|
|
|
||||||
Redemptions of restricted securities
|
|
|
||||||
Proceeds from sales of loans
|
|
|
||||||
Net decrease (increase) in loans
|
|
(
|
)
|
|||||
Proceeds from sales of securities available for sale
|
|
|
||||||
Purchases of premises and equipment
|
(
|
)
|
(
|
)
|
||||
Cash acquired in business combination
|
|
|
||||||
Cash consideration paid in acquisition
|
(
|
)
|
|
|||||
Net cash provided by (used in) investing activities
|
|
(
|
)
|
Year Ended September 30,
|
||||||||
(n thousands)
|
2021
|
2020
|
||||||
Cash flows from financing activities:
|
||||||||
Net increase in deposits
|
$
|
|
$
|
|
||||
Net decrease in federal funds purchased
|
|
|
||||||
Advances of term FHLB borrowings
|
|
|
||||||
Repayments of Federal Home Loan Bank advances
|
(
|
)
|
(
|
)
|
||||
Advances of FRB borrowings
|
|
|
||||||
Repayments of Federal Reserve Bank borrowings
|
(
|
)
|
(
|
)
|
||||
Proceeds from issuance of subordinated debentures, net of issuance costs
|
|
|
||||||
Repayment of note payable
|
(
|
)
|
|
|||||
Net proceeds from stock options exercised
|
|
|
||||||
Net proceeds from issuance of common stock
|
|
|
||||||
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
Supplemental cash flow information:
|
||||||||
Interest paid
|
$
|
|
$
|
|
||||
Income taxes paid
|
|
|
||||||
Supplemental non-cash disclosures:
|
||||||||
Transfers from portfolio loans to loans held-for-sale
|
$
|
|
$
|
|
||||
Transfers from loans held-for-sale to portfolio loans
|
||||||||
Business combination:
|
||||||||
Fair value of tangible assets acquired
|
|
|
||||||
Goodwill and other intangible assets
|
|
|
||||||
Liabilities assumed
|
|
|
||||||
Common stock issued in business combination
|
|
|
||||||
Stock options rolled over in acquisition
|
|
|
1)
|
Specific allowances are established for impaired loans, generally defined by the Company to be all nonaccrual loans, loans risk rated 8
(Substandard), 9 (Doubtful) or 10 (Loss), and all loans subject to a TDR. The amount of impairment provided for as an allowance is represented by the deficiency, if any, between the present value of expected future cash flows
discounted at the original loan’s effective interest rate or the underlying collateral value (less estimated costs to sell) if the loan is collateral dependent, and the carrying value of the loan. Impaired loans that have no
impairment losses are not considered for general valuation allowances described below.
|
2)
|
General allowances are established for loan losses on a portfolio basis for loans that do not meet the definition of impaired. The portfolio is
grouped into similar risk characteristics, primarily by loan segment and internal credit risk ratings. Historical loss experience is applied to each loan group using a
|
• |
changes in local, regional, national, and international economic and business conditions and developments that affect the collectability of the loan
portfolio, including the condition of various market segments;
|
• |
changes in the nature and volume of the Company’s portfolio and in the terms of the Company’s loans;
|
• |
changes in the experience, ability, and depth of lending management and other relevant staff;
|
• |
changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded
loans;
|
• |
changes in the quality of the Company’s loan review system;
|
• |
changes in lending policies, procedures and strategies;
|
• |
changes in the value of underlying collateral for collateral-dependent loans;
|
•
|
the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and
|
• |
the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s
existing portfolio.
|
(in thousands)
|
As Recorded by Savoy
|
Fair Value Adjustments
|
As Recorded by Hanover
|
||||||||||
Assets
|
|||||||||||||
Cash and due from banks
|
$
|
|
$
|
|
$
|
|
|||||||
Investment securities available-for-sale
|
|
|
|
||||||||||
Loans held for sale
|
|
|
|
||||||||||
Loans held for investment
|
|
|
(a)
|
|
|||||||||
Premises and equipment, net
|
|
(
|
)
|
(b)
|
|
||||||||
Core deposit intangible
|
|
|
(c)
|
|
|||||||||
Accrued interest receivable
|
|
(
|
)
|
(d)
|
|
||||||||
Other assets
|
|
(
|
)
|
(e)
|
|
||||||||
Total assets acquired
|
$
|
|
$
|
|
|
||||||||
Liabilities
|
|||||||||||||
Deposits
|
$
|
|
$
|
|
(f)
|
$
|
|
||||||
Borrowings
|
|
|
(g)
|
|
|||||||||
Accrued interest payable
|
|
|
|
||||||||||
Other liabilities and accrued expenses
|
|
(
|
)
|
(h)
|
|
||||||||
Total liabilities assumed
|
$
|
|
$
|
|
|
||||||||
Net assets acquired
|
|
||||||||||||
Total consideration
|
|
||||||||||||
Goodwill
|
$
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(in thousands, except shares)
|
||||
Common stock issued (
|
$
|
|
||
Cash payments to common shareholders
|
|
|||
Total consideration paid
|
$
|
|
(in thousands)
|
||||
Contractually required principal and interest at acquisition
|
$
|
|
||
Contractual cash flows not expected to be collected (non-accretable discount)
|
(
|
)
|
||
Expected cash flows at acquisition
|
|
|||
Interest component of expected cash flows (accretable discount)
|
(
|
)
|
||
Fair value of acquired purchased credit impaired loans
|
$
|
|
Pro-Forma for Year Ended
September 30,
|
||||||||||||
(in thousands, except share and per share data) |
Actual from Acquisition
Date through
September 30, 2021
|
2021
|
2020
|
|||||||||
Net interest income
|
$ | $ | $ | |||||||||
Non-interest income
|
||||||||||||
Net income
|
||||||||||||
Pro-forma earnings per share:
|
||||||||||||
Basic
|
$ | $ | $ | |||||||||
Diluted
|
$ | $ | $ | |||||||||
Weighted average shares outstanding: |
||||||||||||
Basic
|
||||||||||||
Diluted
|
September 30, 2021
|
||||||||||||||||
(in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
||||||||||||
Available-for-sale:
|
||||||||||||||||
U.S. GSE residential mortgage-backed securities
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Corporate bonds
|
|
|
|
|
||||||||||||
Total available-for-sale
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Held-to-maturity:
|
||||||||||||||||
U.S. GSE residential mortgage-backed securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
U.S. GSE commercial mortgage-backed securities
|
|
|
|
|
||||||||||||
Corporate bonds
|
|
|
(
|
)
|
|
|||||||||||
Total held-to-maturity
|
|
|
(
|
)
|
|
|||||||||||
Total securities
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
September 30, 2020
|
||||||||||||||||
(in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
||||||||||||
Available-for-sale:
|
||||||||||||||||
U.S. GSE residential mortgage-backed securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Corporate bonds
|
|
|
|
|
||||||||||||
Total available-for-sale
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Held-to-maturity:
|
||||||||||||||||
U.S. GSE residential mortgage-backed securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
U.S. GSE commercial mortgage-backed securities
|
|
|
|
|
||||||||||||
Corporate bonds
|
|
|
|
|
||||||||||||
Total held-to-maturity
|
|
|
|
|
||||||||||||
Total securities
|
$
|
|
$
|
|
$
|
|
$
|
|
September 30, 2021
|
||||||||
(in thousands)
|
Amortized
Cost
|
Fair Value
|
||||||
Available-for-sale:
|
||||||||
Due in one year or less
|
$
|
|
$
|
|
||||
Due after one year through five years
|
|
|
||||||
Due after five years through ten years
|
|
|
||||||
Due after ten years
|
|
|
||||||
Residential mortgage-backed securities
|
|
|
||||||
Total available-for-sale
|
$
|
|
$
|
|
||||
Held-to-maturity:
|
||||||||
Due in one year or less
|
$
|
|
$
|
|
||||
Due after one year through five years
|
|
|
||||||
Due after five years through ten years
|
|
|
||||||
Due after ten years
|
|
|
||||||
Residential mortgage-backed securities
|
|
|
||||||
Commercial mortgage-backed securities
|
|
|
||||||
Total held-to-maturity
|
$
|
|
$
|
|
Year Ended September 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Proceeds from sales
|
$
|
|
$
|
|
||||
Gross realized gains on sales
|
$
|
|
$
|
|
||||
Gross realized losses on sales
|
|
|
||||||
Total realized gains, net(1)
|
$
|
|
$
|
|
Less than Twelve Months
|
Twelve Months or Longer
|
Total
|
||||||||||||||||||||||||||
(in thousands, except number of securities)
|
Fair Value
|
Gross Unrealized Losses
|
Fair Value
|
Gross Unrealized Losses
|
Number of Securities
|
Fair Value
|
Gross Unrealized Losses
|
|||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||||||
U.S. GSE residential mortgage-backed securities
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|
$
|
|
$
|
(
|
)
|
|||||||||||||
Total available-for-sale
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|
$
|
|
$
|
(
|
)
|
|||||||||||||
Held-to-maturity:
|
||||||||||||||||||||||||||||
Corporate bonds
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|
$
|
|
$
|
(
|
)
|
|||||||||||||
Total held-to-maturity
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|
$
|
|
$
|
(
|
)
|
|
September 30,
|
|||||||
(in thousands)
|
2021
|
2020
|
||||||
Real estate:
|
|
|
||||||
Residential
|
$ | $ | ||||||
Multi-family
|
||||||||
Commercial
|
||||||||
Total real estate
|
||||||||
Commercial and industrial
|
||||||||
Construction | ||||||||
Consumer
|
||||||||
Deferred loan fees and costs, net
|
( |
) | ||||||
Total loans
|
||||||||
Allowance for loan losses
|
( |
) | ( |
) | ||||
Net loans
|
$ | $ |
(in thousands)
|
||||
Commercial real estate
|
$ | |||
Commercial
and industrial |
||||
Total recorded investment |
$ |
(in thousands)
|
Year Ended
September 30, 2021 |
|||
Balance at beginning of period
|
$ | |||
Accretable differences acquired
|
||||
Accretion | ( |
) | ||
Adjustments to accretable difference due to changes in expected cash flows
|
||||
Ending balance
|
$ |
|
September 30, 2021
|
|||||||||||||||||||
(in thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||
Real Estate:
|
|
|
|
|
|
|||||||||||||||
Residential
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Multi-family
|
|
|
|
|
|
|||||||||||||||
Commercial
|
|
|
|
|
|
|||||||||||||||
Commercial and industrial
|
|
|
|
|
|
|||||||||||||||
Construction |
||||||||||||||||||||
Consumer
|
|
|
|
|
|
|||||||||||||||
Total loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
September 30, 2020
|
|||||||||||||||||||
(in thousands)
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||
Real Estate:
|
|
|
|
|
|
|||||||||||||||
Residential
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Multi-family
|
|
|
|
|
|
|||||||||||||||
Commercial
|
|
|
|
|
|
|||||||||||||||
Commercial and industrial
|
|
|
|
|
|
|||||||||||||||
Construction | ||||||||||||||||||||
Consumer
|
|
|
|
|
|
|||||||||||||||
Total loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
September 30, 2021
|
|||||||||||||||||||||||||||||||
(in thousands)
|
30-59
Days
Past Due
|
60-89
Days
Past Due
|
Greater than
89 days
Past Due
|
Non-accrual |
Total past
due and
Non-accrual
|
Purchased
Credit
Impaired
|
Current
|
Total
Loans
|
||||||||||||||||||||||||
Real Estate:
|
|
|
|
|
|
|||||||||||||||||||||||||||
Residential
|
$
|
|
$
|
|
$
|
|
$ |
(1) |
$
|
|
$ |
$
|
|
$ |
||||||||||||||||||
Multi-family
|
|
|
|
(2) |
|
|
||||||||||||||||||||||||||
Commercial
|
|
|
|
(3)
|
|
|
||||||||||||||||||||||||||
Commercial and industrial
|
|
|
|
|
|
|||||||||||||||||||||||||||
Construction |
||||||||||||||||||||||||||||||||
Consumer
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total loans
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$ |
$
|
|
$ |
(1)
|
|
(2)
|
|
(3)
|
|
|
September 30, 2020
|
|||||||||||||||||||||||||||||||
(in thousands)
|
30-59
Days
Past Due
|
60-89
Days
Past Due
|
Greater than
89 days
Past Due
|
Non-accrual(1) |
Total past
due and
Non-accrual
|
Purchased
Credit
Impaired
|
Current
|
Total
Loans
|
||||||||||||||||||||||||
Real Estate:
|
|
|
|
|
|
|||||||||||||||||||||||||||
Residential
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$ |
$
|
|
$ | |||||||||||||||||||
Multi-family
|
|
|
|
|
|
|||||||||||||||||||||||||||
Commercial
|
|
|
|
|
|
|||||||||||||||||||||||||||
Commercial and industrial
|
|
|
|
|
|
|||||||||||||||||||||||||||
Consumer
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total loans
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$ |
$
|
|
$ |
(1)
|
|
|
September 30, 2021
|
|||||||||||||||||||
(in thousands)
|
Unpaid
Principal
Balance
|
Recorded
Investment
|
Allowance for
Loan Losses
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
|||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Real estate:
|
||||||||||||||||||||
Residential
|
$
|
|
$
|
|
$
|
-
|
$
|
|
$
|
|
||||||||||
Multi-family
|
|
|
-
|
|
|
|||||||||||||||
Commercial
|
|
|
-
|
|
|
|||||||||||||||
Commercial and industrial
|
|
|
-
|
|
|
|||||||||||||||
Total
|
$
|
|
$
|
|
$
|
-
|
$
|
|
$
|
|
|
September 30, 2020
|
|||||||||||||||||||
(in thousands)
|
Unpaid
Principal
Balance
|
Recorded
Investment
|
Allowance for
Loan Losses
|
Interest
Income
Recognized
|
Average
Recorded
Investment |
|||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Real Estate:
|
||||||||||||||||||||
Residential
|
$
|
|
$
|
|
$
|
-
|
$
|
|
$
|
|
||||||||||
Multi-family
|
|
|
-
|
|
|
|||||||||||||||
Commercial
|
|
|
-
|
|
|
|||||||||||||||
Commercial and industrial
|
|
|
-
|
|
|
|||||||||||||||
Total
|
$
|
|
$
|
|
$
|
-
|
$
|
|
$
|
|
|
Year Ended September 30, 2021
|
|||||||||||||||||||||||||||
(in thousands)
|
Residential
Real Estate
|
Multi-
Family
|
Commercial
Real Estate
|
Commercial
and
Industrial
|
Construction |
Consumer
|
Total |
|||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$ |
||||||||||||||||
Provision for loan losses
|
(
|
)
|
|
|
|
|
||||||||||||||||||||||
Loans charged-off
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
( |
) | ||||||||||||||||||
Recoveries
|
|
|
|
|
|
|||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$ |
|
Year Ended September 30, 2020
|
|||||||||||||||||||||||||||
(in thousands)
|
Residential
Real Estate
|
Multi-
Family
|
Commercial
Real Estate
|
Commercial
and
Industrial
|
Construction |
Consumer
|
Total |
|||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$ |
||||||||||||||||
Provision for loan losses
|
|
|
|
|
(
|
)
|
||||||||||||||||||||||
Loans charged-off
|
|
|
(
|
)
|
(
|
)
|
|
( |
) | |||||||||||||||||||
Recoveries
|
|
|
|
|
|
|||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$ |
|
September 30, 2021
|
|||||||||||||||||||||||||||
(in thousands)
|
Residential
Real Estate
|
Multi-
Family
|
Commercial
Real Estate
|
Commercial &
Industrial
|
Construction
|
Consumer
|
Total
|
|||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||
Collectively evaluated for impairment
|
|
|
|
|
|
|
||||||||||||||||||||||
Purchased-credit impaired
|
||||||||||||||||||||||||||||
Total allowance for loan losses
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||
Loans:
|
|
|
|
|
|
|
||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||
Collectively evaluated for impairment
|
|
|
|
|
|
|
||||||||||||||||||||||
Purchased-credit impaired
|
||||||||||||||||||||||||||||
Total loans held for investment
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|
September 30, 2020
|
|||||||||||||||||||||||||||
(in thousands)
|
Residential
Real Estate |
Multi-
Family |
Commercial
Real Estate |
Commercial &
Industrial
|
Construction |
Consumer
|
Total
|
|||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||
Collectively evaluated for impairment
|
|
|
|
|
|
|
||||||||||||||||||||||
Purchased-credit impaired
|
||||||||||||||||||||||||||||
Total allowance for loan losses
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||
Loans:
|
|
|
|
|
|
|
||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||
Collectively evaluated for impairment
|
|
|
|
|
|
|
||||||||||||||||||||||
Purchased-credit impaired
|
||||||||||||||||||||||||||||
Total loans held for investment
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|
September 30,
|
|||||||
(in thousands)
|
2021
|
2020
|
||||||
Land
|
$
|
|
$
|
|
||||
Buildings and improvements
|
|
|
||||||
Leasehold improvements
|
|
|
||||||
Furniture, fixtures and equipment
|
|
|
||||||
Construction in progress
|
|
|
||||||
|
|
|
||||||
Less: Accumulated depreciation and amortization
|
(
|
)
|
(
|
)
|
||||
Premises and equipment, net
|
$
|
|
$
|
|
|
September 30,
|
|||||||
(in thousands)
|
2021
|
2020
|
||||||
Non-interest bearing: |
||||||||
Demand
|
$
|
|
$
|
|
||||
Interest-bearing: |
||||||||
NOW
|
|
|
||||||
Money market
|
|
|
||||||
Savings
|
|
|
||||||
Time deposits $250,000 and greater
|
|
|
||||||
Time deposits less than $250,000
|
|
|
||||||
Total interest-bearing
|
||||||||
Total deposits
|
$
|
|
$
|
|
|
September 30,
|
|||
(in thousands)
|
2021 | |||
2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter |
||||
Total
|
$
|
|
(in thousands) |
Balance
at September 30, 2021
|
|||||||
Contractual Maturity
|
Amount
|
Weighted Average Rate
|
||||||
2022
|
$
|
|
|
%
|
||||
2023
|
|
|
%
|
|||||
2024
|
|
|
%
|
|||||
2025
|
|
|
%
|
|||||
Total
|
$
|
|
|
%
|
Balance at September 30, 2020
|
||||||||
Contractual Maturity
|
Amount
|
Weighted Average Rate
|
||||||
2021
|
$
|
|
|
%
|
||||
2022
|
|
|
%
|
|||||
2023
|
|
|
%
|
|||||
2024
|
|
|
%
|
|||||
Thereafter
|
|
|
%
|
|||||
Total
|
$
|
|
|
%
|
September 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Goodwill at beginning of period
|
$
|
|
$
|
|
||||
Acquisition
|
|
|
||||||
Measurement period adjustment for previous acquisition
|
(
|
)
|
|
|||||
Goodwill at end of period
|
$
|
|
$
|
|
||||
Other intangible assets at beginning of period
|
$
|
|
$
|
|
||||
Acquisition
|
|
|
||||||
Amortization
|
(
|
)
|
(
|
)
|
||||
Other intangible assets at end of period
|
$
|
|
$
|
|
September 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Gross carrying amount
|
$
|
|
$
|
|
||||
Accumulated amortization
|
(
|
)
|
(
|
)
|
||||
Net book value
|
$
|
|
$
|
|
(in thousands)
|
||||
2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter
|
|
|||
Total
|
$
|
|
|
Year Ended September 30,
|
|||||||
(in thousands)
|
2021
|
2020
|
||||||
Current:
|
|
|
||||||
Federal
|
$
|
|
$
|
|
||||
State
|
|
|
||||||
Total current
|
|
|
||||||
Deferred:
|
|
|
||||||
Federal
|
|
|
||||||
State
|
(
|
)
|
(
|
)
|
||||
Total deferred
|
|
(
|
)
|
|||||
Change in valuation allowance
|
|
|
||||||
Total income tax expense
|
$
|
|
$
|
|
|
Year Ended September 30,
|
|||||||||||||||
|
2021
|
2020
|
||||||||||||||
(in thousands)
|
Amount
|
Percentage
of Pre-tax
Earnings
|
Amount
|
Percentage
of Pre-tax
Earnings
|
||||||||||||
Federal income tax expense computed by applying the statutory rate to income before income taxes
|
$
|
|
|
%
|
|
|
|
%
|
||||||||
State taxes, net of federal benefit
|
|
|
%
|
(
|
)
|
-
|
%
|
|||||||||
Non-deductible transaction costs
|
|
|
%
|
|
|
%
|
||||||||||
Other
|
(
|
)
|
-
|
%
|
(
|
)
|
-
|
%
|
||||||||
Valuation allowance
|
|
|
%
|
|
|
%
|
||||||||||
Income tax expense
|
$
|
|
|
%
|
$
|
|
|
%
|
|
September 30,
|
|||||||
(in thousands)
|
2021
|
2020
|
||||||
Deferred tax assets:
|
|
|
||||||
Allowance for loan losses
|
$
|
|
$
|
|
||||
Organizational costs
|
|
|
||||||
Start-up and other costs
|
|
|
||||||
Net operating loss carryforwards
|
|
|
||||||
Accrued SERP
|
|
|
||||||
Purchase accounting fair value adjustments | ||||||||
Other assets
|
|
|
||||||
Total deferred tax assets
|
|
|
||||||
Deferred tax liabilities:
|
|
|
||||||
Depreciation
|
(
|
)
|
(
|
)
|
||||
Deferred loan fees/costs
|
(
|
)
|
(
|
)
|
||||
Purchase accounting fair value adjustments
|
|
(
|
)
|
|||||
Tax bad debt reserve
|
(
|
)
|
(
|
)
|
||||
Mortgage servicing rights
|
(
|
)
|
(
|
)
|
||||
Unrealized gain on securities AFS
|
(
|
)
|
(
|
)
|
||||
Total deferred tax liabilities
|
(
|
)
|
(
|
)
|
||||
Total
|
|
|
||||||
Valuation allowance
|
(
|
)
|
(
|
)
|
||||
Net deferred tax asset
|
$
|
|
$
|
|
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
Weighted
Average
Remaining
Contractual
Term
|
|||||||||
Outstanding, October 1, 2020
|
|
$
|
|
$
|
|
|
|||||||
Converted in Savoy acquisition
|
|
|
|
|
|||||||||
Exercised
|
|
|
|
|
|||||||||
Forfeited
|
|
|
|
|
|||||||||
Outstanding, September 30, 2021 (1)
|
|
$
|
|
$
|
|
|
|
Shares
|
Weighted Average
Grant Date Fair
Value
|
||||||
Unvested, October 1, 2020
|
|
$
|
|
|||||
Granted
|
|
|
|
|||||
Vested
|
(
|
)
|
|
|
||||
Forfeited
|
(
|
)
|
|
|
||||
Unvested, September 30, 2021
|
|
|
|
(in thousands)
|
|
|||
Beginning balance, October 1, 2020
|
$
|
|
||
New loans
|
|
|||
Repayments
|
(
|
)
|
||
Ending balance, September 30, 2021
|
$ |
|
September 30, | ||||||||
(in thousands)
|
2021
|
2020
|
||||||
Standby letters of credit
|
$
|
|
$
|
|
||||
Loan commitments outstanding
|
|
|
||||||
Unused lines of credit
|
|
|
||||||
Total
|
$
|
|
$
|
|
(in thousands)
|
Total
|
|||
2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter
|
|
|||
Total
|
$
|
|
|
September 30, 2021
|
|||||||||||||||||||||||||||||||
|
Actual Capital
|
Minimum Capital
Adequacy Requirement
|
Minimum Capital
Adequacy Requirement
with Capital
Conservation Buffer
|
Minimum To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
|
||||||||||||||||||||||||||||
(in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||||
Tier 1 capital to risk-weighted assets
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Tier 1 capital to average total assets
|
|
|
|
|
N/A
|
N/A
|
|
|
|
September 30, 2020
|
|||||||||||||||||||||||||||||||
|
Actual Capital
|
Minimum Capital
Adequacy Requirement
|
Minimum Capital
Adequacy Requirement
with Capital
Conservation Buffer
|
Minimum To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
|
||||||||||||||||||||||||||||
(in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||||
Tier 1 capital to risk-weighted assets
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Tier 1 capital to average total assets
|
|
|
|
|
N/A
|
N/A
|
|
|
•
|
Level 1: Valuation is based upon unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement
date.
|
•
|
Level 2: Fair value is calculated using significant inputs other than quoted market prices that are directly or indirectly observable for the asset or liability. The valuation may rely on quoted prices
for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability (such as interest rates,
rate volatility, prepayment speeds, credit ratings,) or inputs that are derived principally or corroborated by market data, by correlation, or other means.
|
•
|
Level 3: Inputs for
determining the fair value of the respective assets or liabilities are not observable. Level 3 valuations are reliant upon pricing models and techniques that require significant management judgment or estimation.
|
|
September 30, 2021
|
|||||||||||||||
|
|
Fair Value Measurements Using:
|
||||||||||||||
(in thousands)
|
Carrying
Amount
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Financial assets:
|
|
|
|
|
||||||||||||
Available-for-sale securities:
|
|
|
|
|
||||||||||||
U.S. GSE residential mortgage-backed securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Corporate bonds
|
|
|
||||||||||||||
Mortgage servicing rights
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
|
September 30, 2020
|
|||||||||||||||
|
|
Fair Value Measurements Using:
|
||||||||||||||
(in thousands)
|
Carrying
Amount
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Financial assets:
|
|
|
|
|
||||||||||||
Available-for-sale securities:
|
|
|
|
|
||||||||||||
U.S. GSE residential mortgage-backed securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Corporate bonds
|
||||||||||||||||
Mortgage servicing rights
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Year Ended September 30, | ||||||||
(in thousands)
|
2021
|
2020
|
||||||
Beginning balance
|
$
|
|
$
|
|
||||
Loan servicing rights obtained from acquisition of Savoy | ||||||||
Additions
|
|
|
||||||
Adjustment to fair value
|
(
|
)
|
(
|
)
|
||||
Ending balance
|
$
|
|
$
|
|
|
September 30, 2021
|
|||||||||||||||||||
|
|
Fair Value Measurements Using:
|
||||||||||||||||||
(in thousands)
|
Carrying
Amount
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total Fair
Value
|
|||||||||||||||
Financial assets:
|
|
|
|
|
|
|||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Securities held-to-maturity
|
|
|
|
|
|
|||||||||||||||
Securities available-for-sale
|
|
|
|
|
|
|||||||||||||||
Federal Home Loan Bank stock
|
N/A | N/A | N/A | N/A | ||||||||||||||||
Loans, net
|
|
|
|
|
|
|||||||||||||||
Accrued interest receivable
|
|
|
|
|
|
|||||||||||||||
Financial Liabilities:
|
|
|
|
|
|
|||||||||||||||
Time deposits
|
|
|
|
|
|
|||||||||||||||
Demand and other deposits
|
|
|
|
|
|
|||||||||||||||
Borrowings
|
|
|
|
|
|
|||||||||||||||
Subordinated debentures
|
||||||||||||||||||||
Accrued interest payable
|
|
|
|
|
|
|
September 30, 2020
|
|||||||||||||||||||
|
|
Fair Value Measurements Using:
|
||||||||||||||||||
(in thousands)
|
Carrying
Amount
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total Fair
Value
|
|||||||||||||||
Financial assets:
|
|
|
|
|
|
|||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Securities held-to-maturity
|
|
|
|
|
|
|||||||||||||||
Securities available-for-sale
|
|
|
|
|
|
|||||||||||||||
Federal Home Loan Bank stock
|
N/A | N/A |
N/A |
N/A |
||||||||||||||||
Loans, net
|
|
|
|
|
|
|||||||||||||||
Accrued interest receivable
|
|
|
|
|
|
|||||||||||||||
Financial Liabilities:
|
|
|
|
|
|
|||||||||||||||
Time deposits
|
|
|
|
|
|
|||||||||||||||
Demand and other deposits
|
|
|
|
|
|
|||||||||||||||
Borrowings
|
|
|
|
|
|
|||||||||||||||
Note payable
|
|
|
|
|
|
|||||||||||||||
Accrued interest payable
|
|
|
|
|
|
September 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
ASSETS
|
||||||||
Cash and deposits due from banks
|
$
|
|
$
|
|
||||
Investment in bank
|
|
|
||||||
Other assets
|
|
|
||||||
Total Assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Note payable
|
$
|
|
$
|
|
||||
Subordinated debentures
|
|
|
||||||
Accrued interest payable
|
|
|
||||||
Accrued expenses and other liabilities
|
|
|
||||||
Total Liabilities
|
|
|
||||||
Total Stockholders' equity
|
|
|
||||||
Total Liabilities and Stockholders' Equity
|
$
|
|
$
|
|
September 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Interest income
|
$
|
|
$
|
|
||||
Interest expense
|
|
|
||||||
Loss before income taxes and equity in undistributed earnings of the bank
|
(
|
)
|
(
|
)
|
||||
Income tax benefit
|
|
|
||||||
Equity in undistributed earnings of the bank
|
|
|
||||||
Net Income
|
$
|
|
$
|
|
September 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Equity in undistributed earnings of the bank
|
(
|
)
|
(
|
)
|
||||
Amortization of debt issuance costs
|
|
|
||||||
Increase in other assets
|
(
|
)
|
(
|
)
|
||||
Increase in accrued interest payable
|
|
|
||||||
Increase (decrease) in other liabilities
|
|
(
|
)
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Investment in bank
|
(
|
)
|
|
|||||
Net cash used in investing activities
|
(
|
)
|
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of subordinated debentures, net of issuance costs
|
|
|
||||||
Repayment of note payable
|
(
|
)
|
|
|||||
Net proceeds from stock options exercised
|
|
|
||||||
Net proceeds from issuance of common stock
|
|
|
||||||
Net cash provided by financing activities
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
Supplemental non-cash disclosures:
|
||||||||
Common stock issued in acquisition
|
$
|
|
$
|
|
||||
Stock options rolled over in acquisition
|
|
|
Year Ended September 30,
|
||||||||
(in thousands, except share and per share data)
|
2021
|
2020
|
||||||
Net income
|
$
|
|
$
|
|
||||
Weighted-average common shares - basic
|
|
|
||||||
Add: Dilutive effect of stock options
|
|
|
||||||
Weighted-average common shares - diluted
|
|
|
||||||
Basic earnings per share
|
$
|
|
$
|
|
||||
Diluted earnings per share
|
$
|
|
$
|
|
(in thousands)
|
Unrealized Gains and
Losses on Available-
for-Sale Debt
Securities
|
Total
|
||||||
Balance at October 1, 2020
|
$
|
|
$
|
|
||||
Other comprehensive income, before reclassification
|
|
|
||||||
Amount reclassified from accumulated other comprehensive income
|
(
|
)
|
(
|
)
|
||||
Balance at September 30, 2021
|
$
|
|
$
|
|
(in thousands)
|
Unrealized Gains and
Losses on Available-
for-Sale Debt
Securities
|
Total
|
||||||
Balance at October 1, 2019
|
$
|
|
$
|
|
||||
Other comprehensive income
|
|
|
||||||
Balance at September 30, 2020
|
$
|
|
$
|
|
(in thousands)
|
Amount Reclassified
from Accumulated
Other Comprehensive
Income
|
Affected Line Item in Statement of
Income
|
|||
Realized gains on securities available-for-sale
|
$
|
|
Gain on sale of investment securities available-for-sale, net
|
||
Tax effect
|
(
|
)
|
Income tax expense
|
||
Net of tax
|
$
|
|
|
Year Ended September 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Loan fees and service charges(1)
|
$
|
|
$
|
|
||||
Loan servicing income(1)
|
|
|
||||||
Service charges on deposit accounts
|
|
|
||||||
Net gain on sale of investments available-for-sale(1)
|
|
|
||||||
Net gain on sale of loans held-for-sale(1)
|
|
|
||||||
Other income(2)
|
|
|
||||||
Total non-interest income
|
$
|
|
$
|
|
Name and Position with Hanover
|
Age
|
Principal Occupation for Past Five Years
|
Term of Office
Since-Expires(1) |
|||
Michael P. Puorro, Chairman and CEO
|
62
|
Chairman and CEO of Hanover and Hanover Bank
|
2012 - 2022
|
|||
Varkey Abraham, Director
|
68
|
Owner of Shoe Wholesale/Retail Company and Real Estate Investor
|
2008 - 2024
|
|||
Robert Golden, Director
|
58
|
Founder and CEO of TREO Brands and President of Golden Properties Group LLC
|
2014 - 2024
|
|||
Ahron H. Haspel, Director
|
78
|
Attorney and Certified Public Accountant, Retired Partner of the law firm of Jones Day and KPMG, LLP
|
2012 - 2024
|
|||
Michael Katz, Director
|
83
|
Physician, Former President of Ear Nose and Throat Associates of New York, P.C.
|
2012 - 2023
|
|||
Metin Negrin, Director
|
55
|
Founder, Owner and President of Lexin Capital, a real estate investment, redevelopment and management company, Former Chairman of Savoy
|
2021 - 2022
|
|||
Philip Okun, Director
|
67
|
Former President of Polimeni International and Chief Operating Officer of Skyline Management; Founding Partner of Realty Connect USA, LLC
|
2008 - 2023
|
|||
Elena Sisti, Director
|
66
|
Managing Partner of Durel Associates, Agem LLC, and Riviera Development Corporation, real estate investment and management companies in New Jersey , Former Founder and Director of Savoy
|
2021 - 2022
|
|||
John R. Sorrenti, Director
|
71
|
Architect, Founder and President of JRS Architect, P.C.
|
2012 - 2023
|
Name
|
Age
|
Position with Hanover
|
Term of Office
Since-Expires(1) |
|||
Brian K. Finneran
|
64
|
President
|
2017
|
|||
Lance P. Burke
|
42
|
Executive Vice President, Chief Financial Officer
|
2021
|
|||
Denise Chardavoyne
|
44
|
Executive Vice President, Chief Operations Officer
|
2018
|
|||
Kevin Corbett
|
62
|
Executive Vice President, Chief Credit Officer
|
2020
|
|||
Lisa A. DiIorio
|
58
|
First Senior Vice President, Chief Accounting Officer
|
2016
|
|||
Michael Locorriere
|
53
|
Executive Vice President, Chief Municipal Officer
|
2020
|
|||
Alice Rouse
|
56
|
Executive Vice President, Chief Risk Officer
|
2017
|
|||
McClelland Wilcox
|
50
|
Senior Executive Vice President, Chief Lending & Revenue Officer
|
2021
|
• |
Michael P. Puorro, Chairman and Chief Executive Officer. Mr. Puorro has over thirty years of banking experience, with over twenty-five years as a senior executive. Mr. Puorro previously served as
the President of a Long Island based community bank, and as the Chief Financial Officer of a large, publicly traded thrift holding company. Prior to joining Hanover, Mr. Puorro was the Co-Chairman and President of Madison National
Bancorp, Inc. and Madison National Bank where he was a leading member of Madison’s entrepreneurial group and executive management team. Prior to this, Mr. Puorro served as Executive Vice President and Chief Financial Officer of New York
Community Bancorp, Inc. and as Executive Vice President and Chief Financial Officer of Roslyn Bancorp, Inc. Mr. Puorro is a former Board member of the New York Banker’s Association. Mr. Puorro earned a Bachelor of Business Administration
degree in Accounting from Dowling College’s School of Professional Accountancy, and in addition to being a Certified Public Accountant, is a member of the American Institute of Certified Public Accountants and the New York State Society
of Certified Public Accountants. In May 2012, Mr. Puorro received an Honorary Doctorate Degree in Human Letters from Dowling College. Through his business contacts in our market, Mr. Puorro has been able to attract customers and
investors, and his financial expertise is of great value to the Board. In addition, as our senior executive officer, his insight on our operations is invaluable to the Board.
|
• |
Robert Golden, Lead Independent Director. Mr. Golden’s family is the legacy co-founder of the Snapple Beverage Corporation which produced one of the nation's leading flavored beverages. By the
time the Company was purchased by the Quaker Oats Company in 1994, it produced annual sales revenue of $700 million. Today, Mr. Golden is the Founder and CEO of TREO Brands, an innovative beverage company focused on plant-based hydration.
Mr. Golden is also President of Golden Properties Group LLC which is an active investor in commercial office buildings and retail and residential properties in New York City and the surrounding areas, as well as throughout the Midwest.
Prior to forming Golden Properties Group LLC, Mr. Golden was the owner of one of the largest cleaning and security companies in New York (Golden Mark). His company serviced mainly large office buildings and financial institutions. Mr.
Golden is a contributor to many charitable organizations and is currently on the Nassau County Police Department Foundation Advisory Board. Mr. Golden attended the University of Bridgeport. Through his business activities, Mr. Golden has
a strong sense of business conditions in our market that is invaluable to the Board.
|
• |
Varkey Abraham, Director. Mr. Abraham is a founding director of Hanover Community Bank. Mr. Abraham is the principal owner and Chief Executive Officer of the Eric’s Shoe Stores chain in the
United States, Abraham and Sons Leather Company and VA Smith Shoe Company International. Further, Mr. Abraham is a real estate investor, serves as Chairman of the Pravasi television channel, and is the President of the Queens Village New
York Chamber of Commerce. Mr. Abraham is the former two-term President of the Indo-American Malayalee Chamber of Commerce and also served as a Sabha Council Member for Saint Thomas Mar Thoma Church. Mr. Abraham was born in Kerala, India.
Mr. Abraham’s experience brings to the Board significant management expertise and leadership skills, as well as insight into the experience of locally owned business.
|
• |
Ahron H. Haspel, Director. Mr. Haspel is an active investor and an attorney and CPA specialized in the tax area. He retired from Jones Day in January 2011 where he served as a partner
specializing in the corporate tax and mergers acquisitions area. Prior to joining Jones Day in February 2005, Mr. Haspel was a partner at KPMG and served on its Board of Directors and in a number of leadership positions. While on the
Board of KPMG, Mr. Haspel served on the firm's Audit, Compensation and Strategic Planning Committees. Mr. Haspel serves as a member of the Board and Trustee of North European Oil Royalty Trust (NRT) a New York stock exchange listed
company and serves as Chairman of NRT’s Audit and Compensation Committees. Mr. Haspel is a qualified financial expert for SEC purposes. He earned a Bachelor of Science degree in Accounting from Long Island University, his Juris Doctor
from Brooklyn Law School and his LLM degree in Taxation from New York University School of Law. He is a Certified Public Accountant and an active member of the New York Bar. He is also a member of the Board of a number of philanthropic
organizations. Mr. Haspel’s extensive legal and accounting background and understanding of finance, and experience with public companies, proves invaluable to the Board.
|
• |
Michael Katz, Director. Dr. Katz is an active financial institution investor and highly experienced and accomplished board-certified otolaryngologist. Dr. Katz has been in practice with Ear,
Nose, and Throat Associates of New York, P.C. since 1969. For over 35 years, he served as President of the group practice which is one of the largest multi-specialty practices of its kind with offices located throughout Queens, Nassau,
Suffolk, and the Bronx. While serving as President, Dr. Katz oversaw a growing practice of over 200 employees in multiple locations including over 30 physicians and physician assistants/nurse practitioners, specializing in otolaryngology,
allergy & immunology, facial plastic and reconstructive surgery, audiology, sleep disorders and speech and swallowing disorders. Dr. Katz earned his undergraduate degree from Columbia University and his medical degree from the State
University of New York, Downstate. He went on to complete general surgery training at Kings County Hospital in New York and then did his residency in otolaryngology at Manhattan Eye, Ear and Throat Hospital. He is board certified by the
American Board of Otolaryngology. Dr. Katz was Chief of Ear, Nose and Throat (“ENT”) at Flushing Hospital and was previously Chief of ENT at New York Hospital Medical Center of Queens. Apart from the medical field, Dr. Katz serves as
Co-Chairman of the Fisher Island Condo Board #2, is highly active in the area of environmental issues and is a large contributor to the UJA-Federation of NY. Dr. Katz’ business development capabilities in the Long Island marketplace led
the Board to conclude that Dr, Katz should serve as a director.
|
• |
Metin Negrin, Director. Mr. Negrin is the Founder and President of Lexin Capital, a private investment, development and management company that manages its own capital along with a global client
base and makes direct investments in real estate. The firm has real estate investments in New York City as well as Florida, Maryland, Arizona and Mexico and had also past investments in France. Mr. Negrin is also active making direct
investments in the technology sector, including his investments in Tipalti and Houzz as well as in the banking sector with Savoy Bank. Prior to the sale to Hanover Bank, Mr. Negrin was the Chairman of the Board of Savoy Bank. In addition,
Mr. Negrin is the President of the Board of the Allen-Stevenson School, a boys Kindergarten-8 day school of 400 students on the Upper East Side and founded in 1883, as well as Treasurer and Executive Committee Board Member of the American
Turkish Society. A graduate of Deutsche Schule High School in Istanbul, Mr. Negrin holds a BS in Economics and a MBA in Finance from NYU Stern School of Business. Mr. Negrin’s management and business experience led the Board to conclude
that Mr. Negrin should serve as a director.
|
• |
Philip Okun, Director. Mr. Okun is a founding director of Hanover Community Bank. Additionally, he has been Chairman of the Loan Committee since the Bank’s inception. Mr. Okun has been in the
commercial real estate industry for more than 30 years. As President of Polimeni International, Mr. Okun was responsible for the Company’s development program in Poland, having completed numerous shopping centers throughout the country.
As President of its affiliate company, Skyline Management Corp., he was responsible for the management of a 3,000,000 square foot portfolio of office buildings and shopping centers on Long Island and the east coast. Further, his
experience includes redevelopment, leasing, financing, and brokerage. Mr. Okun is a founding partner of Realty Connect USA, LLC. Realty Connect currently has over 800 sales agents in 14 offices on Long Island and Queens. Mr. Okun is a
licensed real estate broker in New York and Florida. He is author of the book “Make Money On Main Street” and a licensed sea captain. Mr. Okun earned a Bachelor of Arts degree in education from Fairleigh Dickinson University. Mr. Okun’s
experience in the commercial real estate market led the Board to conclude that Mr. Okun should serve as a director.
|
• |
Elena Sisti, Director. Ms. Sisti was the founder and chairperson emeritus of Savoy Bank, only the second New York bank established by a woman. Ms. Sisti founded Savoy Bank following a 25-year
career at Citibank. Savoy Bank was designated as a Community Development Financial Institution by the U.S. Treasury Department and as a preferred lender by the Small Business Administration. Ms. Sisti is the Managing Partner of a New
Jersey based real estate investment and management firm started by her family. She received a B.A. in Economics from Barnard College, Columbia University. Ms. Sisti immigrated to the United States in 1963 from Caracas, Venezuela. Her
multicultural background is derived from a Greek-Romanian father, Spanish mother, and having lived on three continents. Ms. Sisti is married to neurosurgeon Dr. Michael B. Sisti and they have three children. Ms. Sisti’s experience in
banking and financial services, along with her knowledge of our local community will assist us as we continue to grow.
|
• |
John R. Sorrenti, Director. Mr. Sorrenti, FAIA, is Founder and President of JRS Architect, P.C., a full service architectural, interior design and preservation firm serving the greater New York
City region. Since its inception in 1986, the firm has received numerous design awards under his leadership. Mr. Sorrenti has served on many committees both for American Institute of Architects (AIA) and National Council of Architectural
Registration Board (NCARB) rising to the President of the New York State AIA, Vice President of the National AIA and Regional Director for the NCARB’s national board. Mr. Sorrenti chaired the AIA/College of Fellows’ Regional
Representative Program nationally for six years and in 2016 was the Chancellor for the College of Fellows. He remains on the New York State Education Board of Architecture as an Extended Member, previously serving as Chair and is
currently Chair of North Hempstead’s Landmarks Commission. In 1991, Mr. Sorrenti helped to form the guidelines for the Americans with Disabilities Act (ADA) and in 1993 assisted with the New York City ADA Code. Mr. Sorrenti has served on
the National Architectural Accrediting Board Committee for college accreditation and has performed reviews of his peers for the American Council of Engineering Companies. In 2008, Mr. Sorrenti was presented with the Lifetime Achievement
Award from the AIA Long Island Chapter and in 2017 received their Community Service Honor Award. Mr. Sorrenti earned a Bachelor of Architecture degree from New York Institute of Technology (NYIT), a Masters in Architecture from Ohio
University, and an MBA from NYIT. Mr. Sorrenti provides the Board with significant leadership and managerial experience, particularly from the perspective of a locally based business entrepreneur.
|
• |
Brian K. Finneran, President. Mr. Finneran has over forty years of experience in the banking industry. Prior to joining us in 2017, Mr. Finneran was the former Executive Vice President and Chief
Financial Officer and member of the Board of Directors at Suffolk Bancorp.
|
• |
Lance P. Burke, Executive Vice President and Chief Financial Officer. Mr. Burke has over twenty years of experience in the banking industry. Prior to joining our team, Mr. Burke served as Senior
Vice President and Controller of Dime Bank (formerly BNB Bank).
|
• |
Denise Chardavoyne, Executive Vice President and Chief Operations Officer. Ms. Chardavoyne has over twenty years of banking experience. Ms. Chardavoyne previously served as Executive Vice
President and Chief Information Officer of Amalgamated Bank, and Chief Information Officer at Suffolk County National Bank.
|
• |
Kevin Corbett, Executive Vice President and Chief Credit Officer. Mr. Corbett has over thirty-five years of experience in the banking industry. Prior to joining us, Mr. Corbett served as Senior
Vice President and Chief Credit Officer of Dime Community Bank and Senior Vice President and Chief Credit Officer of Astoria Bank.
|
• |
Michael Locorriere, Executive Vice President and Chief Municipal Officer. Mr. Locorriere has more than thirty years of banking and government experience. Mr. Locorriere previously served as
Executive Vice President & Director of Municipal Banking at Empire National Bank.
|
• |
Alice T. Rouse, Executive Vice President and Chief Risk Officer. Ms. Rouse has over twenty-five years of banking experience. Prior to joining our team in 2017, she served in various financial
and audit capacities at Astoria Bank.
|
• |
McClelland (“Mac”) Wilcox, Senior Executive Vice President and Chief Lending & Revenue Officer. Mr. Wilcox was the former President and Chief Executive Officer of Savoy. He has over twenty
years of experience as a banking leader and entrepreneur.
|
• |
Lisa A. DiIorio, First Senior Vice President and Chief Accounting Officer. Ms. DiIorio has over twenty-five years of experience in the banking industry. Prior to joining our team in 2016, Ms.
DiIorio served as Vice President and Principal Accounting Officer at Bridgehampton National Bank.
|
• |
Reviews and assesses the adequacy of our corporate governance guidelines, personal codes of conduct and related internal policies and guidelines; and
|
• |
Assists the Board in interpreting and applying corporate governance guidelines and recommends any proposed changes to the Board of Directors for approval.
|
Name and Principal Position
|
Year
|
Salary ($)
|
Bonus ($)
|
Stock
Awards ($)
|
Option Awards
|
Non-equity Incentive Plan Compensation ($)
|
Change in
Pension Value
and
Non-Qualified
Deferred
Compensation
Earnings (4)
|
All Other
Compensation
(4)
|
Total ($)
|
||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||||||||||||||||||||
Michael P. Puorro, Chairman and Chief Executive Officer
|
2021
|
570,769
|
247,500
|
82,500
|
-
|
-
|
-
|
36,662
|
937,431
|
||||||||||||||||||||||||
2020
|
534,615
|
311,200
|
103,742
|
-
|
-
|
-
|
28,194
|
977,751
|
|||||||||||||||||||||||||
2019
|
486,346
|
304,853
|
669,750
|
-
|
-
|
-
|
24,790
|
1,485,739
|
|||||||||||||||||||||||||
Brian K. Finneran, President
|
2021
|
417,308
|
120,000
|
39,996
|
-
|
-
|
-
|
25,706
|
603,010
|
||||||||||||||||||||||||
2020
|
381,539
|
150,000
|
51,010
|
-
|
-
|
-
|
25,506
|
608,055
|
|||||||||||||||||||||||||
2019
|
331,398
|
138,825
|
280,782
|
-
|
-
|
-
|
25,306
|
776,311
|
|||||||||||||||||||||||||
Kevin Corbett, Executive Vice President and Chief Credit Officer(3)
|
2021
|
295,385
|
66,500
|
21,384
|
-
|
-
|
-
|
14,892
|
398,161
|
||||||||||||||||||||||||
2020
|
204,981
|
-
|
65,370
|
-
|
-
|
-
|
4,823
|
275,174
|
|||||||||||||||||||||||||
2019
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Outstanding Equity Awards at Fiscal Year-End
|
|||||||||
|
Option Awards
|
Stock Awards
|
|||||||
Name
|
Number of
securities
underlying
unexercised
options (#)
exerciseable
|
Number of securities underlying unexercised options (#)
un-exerciseable |
Equity
incentive plan
awards:
Number of
securities
underlying
unexercised
unearned
options
|
Option exercise
price
|
Option
expiration date
|
Number of
shares or units
of stock that
have not vested
|
Market value of
shares or units
of stock that
have not vested
|
Equity incentive
plan awards:
Number of
unearned shares,
units or other
rights that have
not vested
|
Equity
incentive plan
awards
market or
payout value
of unearned
shares, units
or other rights
that have not
vested
|
|
(#)
|
(#)
|
(#)
|
($)
|
(#)
|
(#)
|
($)
|
(#)
|
(#)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Michael P. Puorro
|
71,840
|
-
|
-
|
10.00
|
10/1/2024
|
18,705
|
345,855
|
-
|
-
|
Brian K. Finneran
|
20,000
|
-
|
-
|
16.25
|
7/24/2027
|
8,318
|
153,800
|
-
|
-
|
Kevin Corbett
|
-
|
-
|
-
|
-
|
-
|
2,972
|
54,952
|
-
|
-
|
Director Compensation
|
|||||||
Name
|
Fees
Earned or
Paid in
Cash
|
Stock
Awards
|
Option
Awards
|
Non-equity
Incentive Plan
Compensation
|
Non-Qualified
Deferred
Compensation
Earnings
|
All Other
Compensation
|
Total
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
Varkey Abraham
|
28,000
|
17,400
|
-
|
-
|
-
|
-
|
45,400
|
Frank V. Carone
|
30,000
|
17,400
|
-
|
-
|
-
|
-
|
47,400
|
Robert Golden
|
49,350
|
17,400
|
-
|
-
|
-
|
-
|
66,750
|
Ahron H. Haspel
|
43,900
|
17,400
|
-
|
-
|
-
|
-
|
61,300
|
Michael Katz
|
31,850
|
17,400
|
-
|
-
|
-
|
-
|
49,250
|
Metin Negrin
|
11,800
|
-
|
-
|
-
|
-
|
-
|
11,800
|
Philip Okun
|
33,350
|
17,400
|
-
|
-
|
-
|
-
|
50,750
|
Elena Sisti
|
12,650
|
-
|
-
|
-
|
-
|
-
|
12,650
|
John R. Sorrenti
|
31,350
|
17,400
|
-
|
-
|
-
|
-
|
48,750
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Name
|
Number of
Shares
Beneficially
Owned
|
Percentage of
Class
|
||||||
Directors
|
||||||||
Michael P. Puorro
|
286,236
|
(1)
|
5.08
|
%
|
||||
Varkey Abraham
|
43,363
|
(2)
|
0.78
|
%
|
||||
Robert Golden
|
365,053
|
(3)
|
6.55
|
%
|
||||
Ahron H. Haspel
|
55,218
|
(4)
|
0.99
|
%
|
||||
Michael Katz
|
235,122
|
(5)
|
4.22
|
%
|
||||
Metin Negrin
|
217,507
|
3.91
|
%
|
|||||
Philip Okun
|
30,491
|
(6)
|
0.55
|
%
|
||||
Elena Sisti
|
126,280
|
2.27
|
%
|
|||||
John R. Sorrenti
|
31,569
|
(7)
|
0.57
|
%
|
||||
Executive Officers
|
||||||||
Brian K. Finneran
|
79,280
|
(8)
|
1.43
|
%
|
||||
Denise Chardavoyne
|
7,740
|
(9)
|
0.14
|
%
|
||||
Alice Rouse
|
19,767
|
(10)
|
0.35
|
%
|
||||
Kevin Corbett
|
3,972
|
(11)
|
0.07
|
%
|
||||
McClelland Wilcox
|
100,100
|
(12)
|
1.78
|
%
|
||||
Michael Locorriere
|
5,000
|
(13)
|
0.09
|
%
|
||||
Lance P. Burke
|
6,000
|
(14)
|
0.11
|
%
|
||||
Lisa A. DiIorio
|
14,615
|
(15)
|
0.26
|
%
|
(1) |
Includes 71,840 vested options to purchase shares of Hanover’s common stock. Also includes 18,705 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(2) |
Includes 3,217 vested options to purchase shares of Hanover’s common stock. Also includes 2,887 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(3) |
Includes 10,000 vested options to purchase shares of Hanover’s common stock. Also includes: (i) 3,762 shares of restricted stock subject to future vesting but as to which voting may currently be directed, (ii) 254,461 shares held by
certain trusts, of which the beneficiary is Mr. Golden and his family members, and (iii) 52,771 shares held by limited liability company which Mr. Golden controls.
|
(4) |
Includes 8,139 vested options to purchase shares of Hanover’s common stock. Also includes 3,137 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(5) |
Includes 7,057 vested options to purchase shares of Hanover’s common stock. Also includes 2,928 shares of restricted stock subject to future vesting but as to which voting may currently be directed and 96,760 shares held by various
trusts.
|
(6)
|
Includes 8,139 vested options to purchase shares of Hanover’s common stock. Also includes 2,928 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(7) |
Includes 7,057 vested options to purchase shares of Hanover’s common stock. Also includes 2,679 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(8) |
Includes 20,000 vested options to purchase shares of Hanover’s common stock. Also includes 8,318 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(9) |
Includes 3,107 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(10) |
Includes 6,000 vested options to purchase shares of Hanover’s common stock. Also includes 1,767 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(11) |
Includes 2,972 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(12)
|
Includes 71,900 vested options to purchase shares of Hanover’s common stock.
|
(13)
|
Includes 3,334 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(14)
|
Includes 6,000 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
(15)
|
Includes 6,000 vested options to purchase shares of Hanover’s common stock. Also includes 750 shares of restricted stock subject to future vesting but as to which voting may currently be directed.
|
Equity Compensation Plan Information
|
||||||||||||
Number of securities
|
||||||||||||
Number of securities
|
remaining available
|
|||||||||||
to be issued upon
|
Weighted-average
|
for issuance under
|
||||||||||
exercise of
|
exercise price of
|
equity compensation
|
||||||||||
outstanding options,
|
outstanding options,
|
plans (excluding
|
||||||||||
warrants and rights
|
warrants and rights
|
securities reflected in
|
||||||||||
(A)
|
(B)
|
column (A)) (C)
|
||||||||||
Equity compensation plans approved by shareholders
|
227,406
|
$
|
9.50
|
195,848
|
||||||||
Equity compensation plans not approved by shareholders
|
-
|
-
|
427,500
|
|||||||||
Total
|
227,406
|
$
|
9.50
|
623,348
|
Fiscal Year Ended September 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Audit fees
|
$
|
302
|
$
|
136
|
||||
Audit-related fees
|
114
|
-
|
||||||
Total fees
|
$
|
416
|
$
|
136
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
61
|
Consolidated Statements of Financial Condition
|
62 |
Consolidated Statements of Income
|
63 |
Consolidated Statements of Comprehensive Income
|
64 |
Consolidated Statements of Changes in Stockholders’ Equity
|
65 |
Consolidated Statements of Cash Flows
|
66 |
Notes to Consolidated Financial Statements
|
68 |
(b) |
Exhibits. The following is a list of Exhibits to this annual report.
|
Exhibit
No.
|
Description
|
|
Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(i) to Registration Statement on Form S-4 filed on January 20, 2021)
|
||
Bylaws (incorporated by reference to Exhibit 3.1(ii) to Registration Statement on Form S-4 filed on January 20, 2021)
|
||
Second Amended and Restated Employment Agreement effective as of the 1st day of
January, 2015, by and between Michael P. Puorro and Hanover Community Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 30, 2021)
|
||
Third Amended and Restated Employment Agreement effective as of the 24th day of July, 2017, by and
between Brian Finneran and Hanover Community Bank (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on July 30, 2021)
|
||
Amended and Restated Change in Control Agreement with Kevin Corbett (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on July 30, 2021)
|
||
Hanover Community Bank 2013 Stock Option Plan (incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-4 filed on January 20, 2021)
|
||
Savoy Bank 2013 Stock Option Plan (incorporated by reference to Exhibit 4.2 to Form S-8 filed on June 17, 2021)
|
||
Hanover Community Bank 2015 Restricted Stock Plan (incorporated by reference to Exhibit 10.5 to Registration Statement on Form S-4 filed on January 20, 2021)
|
||
Hanover Community Bank 2016 Stock Option Plan (incorporated by reference to Exhibit 10.6 to Registration Statement on Form S-4 filed on January 20, 2021)
|
Exhibit
No.
|
Description
|
|
2018 Equity Compensation Plan (incorporated by reference to Exhibit 10.7 to Registration Statement on Form S-4 filed on January 20, 2021)
|
||
Hanover Bancorp 2021 Equity Compensation Plan (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed on July 30, 2021)
|
||
Indenture between Hanover Bancorp, Inc. and U.S. Bank, National Association dated October 7, 2020 (incorporated by reference from Exhibit 10.8 to Registration Statement on Form S-4 filed on January 20,
2021)
|
||
First Supplemental Indenture between Hanover Bancorp, Inc. and U.S. Bank National Association dated October 7, 2020 (incorporated by reference from Exhibit 10.9 to Registration Statement on Form S-4 filed
on January 20, 2021)
|
||
Amended and Restated Employment Agreement with McClelland Wilcox (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on July 30, 2021)
|
||
Amended and Restated Change in Control Agreement with Lance P. Burke (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 17, 2021)
|
||
Subsidiaries (incorporated by reference to Exhibit 21.1 to Registration Statement on Form S-4 filed on January 20, 2021)
|
||
Consent of Crowe LLP (filed herewith)
|
||
Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Section 1350 Certification of Chief Executive Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
Section 1350 Certification of Chief Financial Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
101.INS
|
XBRL Instance Document |
|
101.SCH |
XBRL Taxonomy Extension Schema Document
|
|
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document |
|
101.LAB |
XBRL Taxonomy Extension Labels Linkbase Document |
|
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document |
|
101.DEF |
XBRL Taxonomy Extension Definitions Linkbase Document |
|
104
|
Cover Page Interactive Data File (filed herewith)
|
HANOVER BANCORP, INC.
|
|
Registrant
|
December 22, 2021
|
/s/ Michael P. Puorro
|
Michael P. Puorro
|
|
Chairman and Chief Executive Officer
|
December 22, 2021
|
/s/ Lance P. Burke
|
Lance P. Burke
|
|
Executive Vice President and Chief Financial Officer
|
December 22, 2021
|
/s/ Lisa A. Diiorio
|
Lisa A. Diiorio
|
|
Senior Vice President, Chief Accounting Officer
|
December 22, 2021
|
/s/ Varkey Abraham
|
Varkey Abraham
|
|
Director
|
December 22, 2021
|
/s/ Robert Golden
|
Robert Golden
|
|
Director
|
December 22, 2021
|
/s/ Ahron Haspel
|
Ahron Haspel
|
|
Director
|
December 22, 2021
|
/s/ Michael Katz
|
Michael Katz
|
|
Director
|
December 22, 2021
|
/s/ Metin Negrin
|
Metin Negrin
|
|
Director
|
December 22, 2021
|
/s/ Philip Okun
|
Philip Okun
|
|
Director
|
December 22, 2021
|
/s/ Elena Sisti
|
Elena Sisti
|
|
Director
|
December 22, 2021
|
/s/ John Sorrenti
|
John Sorrenti
|
|
Director
|
|
|
|
Crowe LLP |
1.
|
I have reviewed this Annual Report on Form 10-K of Hanover Bancorp, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: December 22, 2021
|
/s/ Michael P. Puorro
|
Michael P. Puorro
|
Chairman & Chief Executive Officer
|
(principal executive officer)
|
1. |
I have reviewed this Annual Report on Form 10-K of Hanover Bancorp, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: December 22, 2021
|
/s/ Lance P. Burke
|
Lance P. Burke
|
Chief Financial Officer
|
(principal financial and accounting officer)
|