• Hanover Bancorp, Inc. Reports Earnings for the Third Fiscal Quarter and Declares $0.10 Quarterly Cash Dividend

    ソース: Nasdaq GlobeNewswire / 27 7 2023 08:00:45   America/New_York

    Third Fiscal Quarter Performance Highlights

    • Net Income: Net income for the quarter ended June 30, 2023 totaled $3.1 million or $0.42 per diluted share (including Series A preferred shares), inclusive of a $0.3 million tax related adjustment and temporary increase in the effective tax rate for the quarter, resulting from increased business in other states, coupled with lower projected pre-tax income. Net income for the quarter ended March 31, 2023 totaled $3.2 million or $0.43 per diluted share (including Series A preferred shares). Pre-tax income for the quarter ended June 30, 2023 totaled $4.4 million, an increase of $0.2 million or 6% versus net income of $4.1 million reported for the quarter ended March 31, 2023.
    • Strong Liquidity Position: At June 30, 2023, liquidity sources, which includes cash and unencumbered securities and secured and unsecured funding capacity, totaled $485.8 million or approximately 165% of uninsured deposit balances.
    • Insured/Collateralized Deposits: Insured and collateralized deposits, which include municipal deposits, accounted for approximately 81% of total deposits at June 30, 2023.
    • Lending Activity: Loans totaled $1.82 billion, a net increase of $36.1 million, or 8.1% annualized, from March 31, 2023, primarily driven by growth in niche-residential, conventional C&I and SBA loans.
    • Hauppauge Banking Center: In May 2023, the Company opened the Bank’s Hauppauge Business Banking Center, the nexus of our expanded commercial lending and deposit activities, that are integral to the ongoing diversification of our balance sheet as we fill the void left by the diminishing number of commercial banks in the NYC Metro area. We are off to a robust start with deposits currently in excess of $17 million and C&I loans closed to date of approximately $34 million.
    • Accumulated Other Comprehensive Loss, Net of Tax, was $1.4 million, reflecting the relatively small size of the Company’s investment portfolio and representing approximately 0.77% of total capital at June 30, 2023.
    • Capital Strength: The Bank’s Tier 1 leverage ratio was 9.16% and its Total Risk-Based capital ratio was 14.24% at June 30, 2023, each significantly above the regulatory minimums for a well-capitalized institution. The Company’s Tangible Common Equity ratio was 7.77% at June 30, 2023, 7.84% at March 31, 2023, and 8.41% at September 30, 2022.
    • Tangible Book Value Per Share: Tangible book value per share (including Series A preferred shares) increased to $22.26 at June 30, 2023 from $21.96 at March 31, 2023 and $21.00 at September 30, 2022.
    • Quarterly Cash Dividend: The Company’s Board of Directors approved a $0.10 per share cash dividend on both common and Series A preferred shares payable on August 16, 2023 to stockholders of record on August 9, 2023.
    • Net Interest Income: Net interest income was $13.5 million for the quarter ended June 30, 2023, a slight decrease of $0.4 million, or 3.0% from the prior linked quarter of 2023 as new loan growth begins to mitigate increased funding costs.
    • Net Interest Margin: The Company’s net interest margin during the quarter ended June 30, 2023 was 2.68% versus 3.04% in the quarter ended March 31, 2023, reflective of the continued rise in funding costs and to a lesser extent, the Company’s decision to increase liquidity as a result of recent industry events.
    • Balance Sheet: Assets totaled $2.12 billion at June 30, 2023 versus $2.07 billion at March 31, 2023 and $1.84 billion at September 30, 2022.

    MINEOLA, N.Y., July 27, 2023 (GLOBE NEWSWIRE) -- Hanover Bancorp, Inc. (“Hanover” or “the Company” – NASDAQ: HNVR), the holding company for Hanover Community Bank (“the Bank”), today reported results for the quarter ended June 30, 2023 and the payment of a $0.10 per share cash dividend on both common and Series A preferred shares payable on August 16, 2023 to stockholders of record on August 9, 2023.

    Earnings Summary for the Quarter Ended June 30, 2023

    The Company reported net income for the quarter ended June 30, 2023 of $3.1 million or $0.42 per diluted share (including Series A preferred shares), versus $5.3 million or $0.80 per diluted share in the comparable period a year ago. In connection with the Company’s initial public offering in May 2022, average shares outstanding increased to 7,332,090 in the 2023 period from 6,596,505 in the comparable period of 2022. Returns on average assets and average stockholders’ equity were 0.60% and 6.82%, respectively, in the quarter ended June 30, 2023, versus 1.41% and 14.05%, respectively, in the comparable quarter of 2022, and 0.68% and 7.24% in the quarter ending March 31, 2023.

    The decline in net income recorded in the third fiscal quarter of 2023 from the comparable 2022 quarter resulted from two primary factors. The first was a decrease in net interest income. The second was an increase in non-interest expense largely due to increases in compensation and benefits, professional fees and regulatory assessments (included in other operating expenses), which were partially offset by a decrease in the provision for loan losses and an increase in non-interest income. Included in compensation and benefits expense in the second quarter of 2023 was expense related to the staffing of the SBA and C&I Banking teams, and lower deferred loan origination costs that were offset by lower incentive compensation expense resulting from reduced lending activity. The increase in non-interest income is reflective of the strengthening of secondary market premiums in connection with sales of SBA loans. In addition, the Company’s effective tax rate increased to 29.9% in the second calendar quarter of 2023 from 22.9% in the comparable year ago period. This increase is primarily related to a $0.3 million tax related adjustment due to increased business in other states, coupled with lower projected pre-tax income. We anticipate the effective tax rate for the remainder of the year to range from 24.5% to 25.5%.

    Net interest income was $13.5 million for the quarter ended June 30, 2023, a decrease of $1.3 million, or 8.9% versus the comparable 2022 period due to compression of the Company’s net interest margin to 2.68% in the 2023 quarter from 4.05% in the comparable 2022 quarter. The yield on interest earning assets increased to 5.65% in the 2023 quarter from 4.45% in the comparable 2022 quarter, an increase of 120 basis points, offset by a 302 basis point increase in the cost of interest-bearing liabilities to 3.52% in 2023 from 0.50% in the third fiscal quarter of 2022. The rapid and significant rise in interest rates driven by the Federal Reserve and, to a lesser extent, the Company’s decision to increase liquidity as a result of recent industry events resulted in the higher cost of funds.

    Earnings Summary for the Nine Months Ended June 30, 2023

    For the nine months ended June 30, 2023, the Company reported net income of $11.6 million or $1.57 per diluted share (including Series A preferred shares), versus $17.7 million or $2.92 per diluted share a year ago. The Company recorded adjusted (non-GAAP) net income (excluding merger-related expenses and severance and retirement expenses) of $12.0 million or $1.62 per diluted share for the nine months ended June 30, 2023, versus adjusted (non-GAAP) net income of $17.9 million or $2.95 per diluted share in the comparable 2022 nine-month period. Excluding the impact of net purchase accounting accretion, the Company’s net income was $10.8 million or $1.46 per diluted share (including Series A preferred shares) for the nine months ended June 30, 2023 versus net income of $15.2 million or $2.50 per diluted share in the comparable 2022 period. In connection with the Company’s initial public offering in May 2022, average shares outstanding increased to 7,316,241 for the nine months ended June 30, 2023 from 5,970,288 in the comparable period of 2022.

    The decline in net income recorded for the nine months ended June 30, 2023 from the comparable 2022 period resulted primarily from a decrease in net interest income, an increase in the provision for loan losses expense due to growth in the loan portfolio, a decrease in gain on sale of loans due to a lower volume of SBA loan sales and depressed secondary market premiums early in the year, a decrease in purchase accounting accretion and an increase in non-interest expense. The increase in non-interest expense was primarily due to increases in occupancy and equipment, data processing, professional fees and regulatory assessments (included in other operating expenses).

    Net interest income was $42.7 million for the nine months ended June 30, 2023, a decrease of $2.1 million, or 4.8% from the comparable 2022 period due to compression of the Company’s net interest margin to 3.05% in the 2023 period from 4.23% in the comparable 2022 period. The year over year decrease in purchase accounting accretion accounted for 25 basis points of the decline in the net interest margin. The yield on interest earning assets increased to 5.44% in the 2023 period from 4.60% in the comparable 2022 period, an increase of 84 basis points that was offset by a 243 basis point increase in the cost of interest-bearing liabilities to 2.90% in 2023 from 0.47% in the comparable 2022 period due to the rapid and significant rise in interest rates.

    Michael P. Puorro, Chairman and Chief Executive Officer, commented on the Company’s quarterly results: “We are pleased to show consistent results in the second quarter of 2023 as we navigate this unprecedented banking environment while investing in our continued diversification and growth. With sound earnings, liquidity and capital, we have a strong foundation on which to expand our existing verticals and develop new opportunities. Deposit and loan growth at our recently launched Hauppauge Business Banking Center, the nexus of our C&I banking strategy, are off to a strong start with core deposits currently in excess of $17 million. Supported by a dynamic team and robust products, services and technology, we look forward to expanding our customer base with these and new pending initiatives as we build for the future.”

    Balance Sheet Highlights

    Total assets at June 30, 2023 were $2.12 billion versus $1.84 billion at September 30, 2022. Total deposits at June 30, 2023 increased to $1.59 billion compared to $1.53 billion at September 30, 2022. During the quarter ended June 30, 2023, total deposits decreased $113.6 million from March 31, 2023 primarily due to the seasonality of municipal deposits.

    The Company had $346.4 million in total municipal deposits at June 30, 2023, at a weighted average rate of 3.79% versus $416.9 million at a weighted average rate of 1.19% at September 30, 2022. The Company’s municipal deposit program is built on long-standing relationships developed in the local marketplace. This core deposit business will continue to provide a stable source of funding for the Company’s lending products at costs lower than those of both consumer deposits and market-based borrowings. The Company continues to broaden its municipal customer deposit base as evidenced by the increase in the number of relationships year over year.

    Total borrowings at June 30, 2023 were $293.8 million, including $4.1 million in Federal Reserve Paycheck Protection Program Liquidity Facility advances, with a weighted average rate and term of 4.47% and 16 months, respectively. At June 30, 2023 and September 30, 2022, the Company had $129.7 million and $37.8 million, respectively, of term FHLB advances outstanding. The Company added $100.7 million of extended duration FHLB term advances in March 2023 to provide additional liquidity and enhance the interest rate sensitivity profile. The Company had $160.0 million and $55.0 million of FHLB overnight borrowings outstanding at June 30, 2023 and September 30, 2022, respectively. The Company utilizes a number of strategies to manage interest rate risk including interest rate swap agreements. During the second quarter of 2023, the Company executed its first pay fixed, receive floating interest rate swap with a notional amount totaling $25.0 million for a four-year term at a fixed rate of 3.89%.

    Stockholders’ equity increased to $182.8 million at June 30, 2023 from $172.6 million at September 30, 2022, resulting in an increase in tangible book value per share (including Series A preferred shares) to $22.26 at June 30, 2023 from $21.00 at September 30, 2022. This increase was primarily due to net income earned during the nine months ended June 30, 2023. The accumulated other comprehensive loss at June 30, 2023 was minimal at 0.77% of total equity and was comprised of $1.5 million after tax net unrealized loss on the investment portfolio that was partially offset by a $0.1 million after tax net unrealized gain on derivatives.

    Loan Portfolio Growth and Allowance for Loan Losses

    On a linked quarter basis, the Company exhibited net loan growth of $36.1 million, an 8.1% increase on an annualized basis. For the twelve months ended June 30, 2023, the Bank’s loan portfolio grew to $1.82 billion, for an increase of 30.3% excluding PPP loans. Year over year growth was concentrated primarily in multi-family, residential and commercial real estate loans. At June 30, 2023, the Company’s residential loan portfolio (including home equity) amounted to $625.3 million, with an average loan balance of $484 thousand and a weighted average loan-to-value ratio of 57%. Commercial real estate and multifamily loans totaled $1.13 billion at June 30, 2023, with an average loan balance of $1.5 million and a weighted average loan-to-value ratio of 60%. The Company’s commercial real estate concentration ratio was 457% of capital at June 30, 2023 versus 467% of capital at March 31, 2023, with loans secured by office space accounting for less than 3.0% of the total loan portfolio and totaling $50.8 million. The Company’s loan pipeline is approximately $157 million, with approximately 90% being niche-residential, conventional C&I and SBA and USDA lending opportunities.

    Historically, the Bank has generated additional income by strategically originating and selling residential and government guaranteed loans to other financial institutions at premiums, while also retaining servicing rights in some sales. However, due to the pace of interest rate increases over the last year, the residential loan sale market remains inactive, and the Bank continues originating residential loans for its own portfolio. During the quarter ended June 30, 2023, the Company sold $12.6 million in SBA loans and recorded gains on the sale of loans held-for-sale of $1.1 million. The Company recorded gains of $0.8 million on the sale of SBA loans in the quarter ended June 30, 2022.

    In the first half of 2023 we largely completed expansions of our SBA & USDA and C&I Banking Teams and anticipate the pace and volume of SBA and USDA guaranteed loan originations and C&I loan originations and deposit production will grow during the second half of 2023.

    During the third fiscal quarter of 2023, the Bank recorded a provision for loan losses expense of $0.5 million. The June 30, 2023, allowance for loan losses balance was $15.4 million versus $12.8 million at September 30, 2022. The allowance for loan losses as a percent of total loans was 0.84% at June 30, 2023 versus 0.79% at September 30, 2022. The allowance for loan losses as a percent of total loans excluding acquired loans (“originated loans”) was 0.95% at June 30, 2023. At June 30, 2023, non-performing loans totaled $10.8 million of which $7.2 million represented legacy Savoy Bank originated loans that were either written down to fair value at the acquisition date or are 100% guaranteed by the SBA.

    Net Interest Margin

    The Bank’s net interest margin was 2.68% during the third fiscal quarter of 2023 versus 4.05% in the comparable 2022 quarter and 3.04% in the March 31, 2023 quarter. The decrease from the prior year quarter and linked quarter was primarily related to the increase in the total cost of funds, partially offset by the increase in the average yield on loans and to a lesser extent, the Company’s decision to increase liquidity as a result of the recent industry events. The margin compression reflects the effects of the rapid and significant rise in interest rates and the competitive deposit environment.

    About Hanover Community Bank and Hanover Bancorp, Inc.

    Hanover Bancorp, Inc. (NASDAQ: HNVR), is a bank holding company for Hanover Community Bank, a community commercial bank focusing on highly personalized and efficient services and products responsive to client needs. Management and the Board of Directors are comprised of a select group of successful local businesspeople who are committed to the success of the Bank by knowing and understanding the metro-New York area’s financial needs and opportunities. Backed by state-of-the-art technology, Hanover offers a full range of financial services. Hanover employs a complete suite of consumer, commercial, and municipal banking products and services, including multi-family and commercial mortgages, residential loans, business loans and lines of credit. Hanover also offers its customers access to 24-hour ATM service with no fees attached, free checking with interest, telephone banking, advanced technologies in mobile and internet banking for our consumer and business customers, safe deposit boxes and much more. The Company’s corporate administrative office is located in Mineola, New York where it also operates a full-service branch office along with additional branch locations in Garden City Park, Hauppauge, Forest Hills, Flushing, Sunset Park, Rockefeller Center and Chinatown, New York, and Freehold, New Jersey.

    Hanover Community Bank is a member of the Federal Deposit Insurance Corporation and is an Equal Housing/Equal Opportunity Lender. For further information, call (516) 548-8500 or visit the Bank’s website at www.hanoverbank.com.

    Non-GAAP Disclosure

    This discussion includes non-GAAP financial measures, including the Company’s adjusted operating earnings, adjusted returns on average assets and shareholders’ equity, and adjusted operating efficiency ratio. A non-GAAP financial measure is a numerical measure of historical or future performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company’s management believes that the presentation of non-GAAP financial measures provides both management and investors with a greater understanding of the Company’s operating results and trends in addition to the results measured in accordance with GAAP, and provides greater comparability across time periods. While management uses non-GAAP financial measures in its analysis of the Company’s performance, this information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP. The Company’s non-GAAP financial measures may not be comparable to similarly titled measures used by other financial institutions.

    With respect to the calculations of adjusted operating net income and adjusted operating efficiency ratio for the periods presented in this discussion, reconciliations to the most comparable U.S. GAAP measures are provided in the tables that follow.

    Forward-Looking Statements

    This release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and may be identified by the use of such words as "may," "believe," "expect," "anticipate," "should," "plan," "estimate," "predict," "continue," and "potential" or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Hanover Bancorp, Inc. Any or all of the forward-looking statements in this release and in any other public statements made by Hanover Bancorp, Inc. may turn out to be incorrect. They can be affected by inaccurate assumptions that Hanover Bancorp, Inc. might make or by known or unknown risks and uncertainties, including those discussed in our Annual Report on Form 10-K under Item 1A - Risk Factors, as updated by our subsequent filings with the Securities and Exchange Commission. Further, the adverse effect of the COVID-19 pandemic on the Company, its customers, and the communities where it operates may adversely affect the Company’s business, results of operations and financial condition for an indefinite period of time. Consequently, no forward-looking statement can be guaranteed. Hanover Bancorp, Inc. does not intend to update any of the forward-looking statements after the date of this release or to conform these statements to actual events.

    Investor and Press Contact:
    Lance P. Burke
    Chief Financial Officer
    (516) 548-8500

     
    HANOVER BANCORP, INC.
    STATEMENTS OF CONDITION (unaudited)
    (dollars in thousands)
           
      June 30, March 31, September 30,
       2023   2023   2022 
    Assets      
    Cash and cash equivalents $211,533  $204,355  $149,947 
    Securities-available for sale, at fair value  11,094   11,849   12,285 
    Investments-held to maturity  4,180   4,263   4,414 
           
    Loans, net of deferred loan fees and costs  1,823,503   1,787,365   1,623,531 
    Less: allowance for loan losses  (15,369)  (14,879)  (12,844)
    Loans, net  1,808,134   1,772,486   1,610,687 
           
    Goodwill  19,168   19,168   19,168 
    Premises & fixed assets  16,256   15,692   14,462 
    Operating lease assets  10,602   11,008   - 
    Other assets  40,816   32,899   29,095 
    Assets $2,121,783  $2,071,720  $1,840,058 
           
    Liabilities and stockholders' equity      
    Core deposits $1,137,134  $1,276,422  $1,189,033 
    Time deposits  456,505   430,852   339,073 
    Total deposits  1,593,639   1,707,274   1,528,106 
           
    Borrowings  293,849   136,962   101,752 
    Subordinated debentures  24,608   24,594   24,568 
    Operating lease liabilities  11,309   11,711   - 
    Other liabilities  15,572   10,657   13,048 
    Liabilities  1,938,977   1,891,198   1,667,474 
           
    Stockholders' equity  182,806   180,522   172,584 
    Liabilities and stockholders' equity $2,121,783  $2,071,720  $1,840,058 



    HANOVER BANCORP, INC.
    CONSOLIDATED STATEMENTS OF INCOME (unaudited)
    (dollars in thousands, except per share data)
             
      Three Months Ended Nine Months Ended
      6/30/2023 6/30/2022 6/30/2023 6/30/2022
             
    Interest income $28,459  $16,259  $76,091  $48,816 
    Interest expense  14,954   1,439   33,398   3,983 
    Net interest income  13,505   14,820   42,693   44,833 
    Provision for loan losses  500   1,000   2,932   2,400 
    Net interest income after provision for loan losses  13,005   13,820   39,761   42,433 
             
    Loan servicing and fee income  811   779   2,028   2,203 
    Service charges on deposit accounts  70   60   200   169 
    Gain on sale of loans held-for-sale  1,052   849   2,625   3,916 
    Gain on sale of investments  -   -   -   105 
    Other operating income  41   140   288   483 
    Non-interest income  1,974   1,828   5,141   6,876 
             
    Compensation and benefits  5,405   4,843   15,301   15,400 
    Occupancy and equipment  1,587   1,394   4,601   4,177 
    Data processing  576   374   1,435   1,133 
    Marketing and advertising  200   112   533   298 
    Acquisition costs  -   250   -   250 
    Professional fees  781   579   2,345   1,718 
    Other operating expenses  2,017   1,178   5,189   3,376 
    Non-interest expense  10,566   8,730   29,404   26,352 
             
    Income before income taxes  4,413   6,918   15,498   22,957 
    Income tax expense  1,319   1,585   3,857   5,227 
             
    Net income $3,094  $5,333  $11,641  $17,730 
             
    Earnings per share ("EPS"): (1)        
    Basic $0.42  $0.81  $1.59  $2.97 
    Diluted $0.42  $0.80  $1.57  $2.92 
             
    Average shares outstanding for basic EPS (1)(2)  7,332,090   6,596,505   7,316,241   5,970,288 
    Average shares outstanding for diluted EPS (1)(2)  7,407,613   6,695,567   7,393,976   6,069,494 
             
    (1) Calculation includes common stock and Series A preferred stock for the three and nine months ended 6/30/23.
    (2) Average shares outstanding before subtracting participating securities.
             
    Note: Prior period information has been adjusted to conform to current period presentation.


    HANOVER BANCORP, INC.
    CONSOLIDATED STATEMENTS OF INCOME (unaudited)
    QUARTERLY TREND
    (dollars in thousands, except per share data)
               
      Three Months Ended
      6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022
               
    Interest income $28,459  $25,060  $22,572  $19,613  $16,259 
    Interest expense  14,954   11,136   7,308   3,191   1,439 
    Net interest income  13,505   13,924   15,264   16,422   14,820 
    Provision for loan losses  500   932   1,500   2,050   1,000 
    Net interest income after provision for loan losses  13,005   12,992   13,764   14,372   13,820 
               
    Loan servicing and fee income  811   539   678   681   779 
    Service charges on deposit accounts  70   67   63   63   60 
    Gain on sale of loans held-for-sale  1,052   995   578   1,227   849 
    Other operating income  41   155   92   24   140 
    Non-interest income  1,974   1,756   1,411   1,995   1,828 
               
    Compensation and benefits  5,405   5,564   4,332   4,265   4,843 
    Occupancy and equipment  1,587   1,537   1,477   1,457   1,394 
    Data processing  576   441   418   496   374 
    Marketing and advertising  200   183   150   50   112 
    Acquisition costs  -   -   -   -   250 
    Professional fees  781   881   683   850   579 
    Other operating expenses  2,017   1,961   1,211   1,713   1,178 
    Non-interest expense  10,566   10,567   8,271   8,831   8,730 
               
    Income before income taxes  4,413   4,181   6,904   7,536   6,918 
    Income tax expense  1,319   972   1,566   1,712   1,585 
               
    Net income $3,094  $3,209  $5,338  $5,824  $5,333 
               
    Earnings per share ("EPS"): (1)          
    Basic $0.42  $0.44  $0.73  $0.80  $0.81 
    Diluted $0.42  $0.43  $0.72  $0.79  $0.80 
               
    Average shares outstanding for basic EPS (1)(2)  7,332,090   7,324,036   7,292,940   7,287,622   6,596,505 
    Average shares outstanding for diluted EPS (1)(2)  7,407,613   7,406,933   7,387,938   7,380,638   6,695,567 
               
    (1) Calculation includes common stock and Series A preferred stock for the quarters ended 6/30/23, 3/31/23 and 12/31/22.
    (2) Average shares outstanding before subtracting participating securities.
               
    Note: Prior period information has been adjusted to conform to current period presentation.


    HANOVER BANCORP, INC.
    CONSOLIDATED NON-GAAP FINANCIAL INFORMATION (1) (unaudited)
    (dollars in thousands, except per share data)
             
      Three Months Ended Nine Months Ended
      6/30/2023 6/30/2022 6/30/2023 6/30/2022
             
    ADJUSTED NET INCOME:        
    Net income, as reported $3,094  $5,333  $11,641  $17,730 
    Adjustments:        
    Merger-related expenses  -   250   -   250 
    Severance and retirement expenses  -   -   456   - 
    Total adjustments, before income taxes  -   250   456   250 
    Adjustment for reported effective income tax rate  -   53   105   53 
    Total adjustments, after income taxes  -   197   351   197 
    Adjusted net income $3,094  $5,530  $11,992  $17,927 
    Basic earnings per share - adjusted $0.42  $0.84  $1.64  $3.00 
    Diluted earnings per share - adjusted $0.42  $0.83  $1.62  $2.95 
             
    ADJUSTED OPERATING EFFICIENCY RATIO(2):        
    Operating efficiency ratio, as reported  68.26%  52.43%  61.47%  51.07%
    Adjustments:        
    Merger-related expenses  0.00%  -1.50%  0.00%  -0.48%
    Severance and retirement expenses  0.00%  0.00%  -0.95%  0.00%
    Adjusted operating efficiency ratio  68.26%  50.93%  60.52%  50.59%
             
    ADJUSTED RETURN ON AVERAGE ASSETS  0.60%  1.46%  0.83%  1.63%
    ADJUSTED RETURN ON AVERAGE EQUITY  6.82%  14.57%  8.95%  17.46%
             
    (1) A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with U.S. GAAP. While management uses non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP.
    (2) Excludes gain on sale of securities available for sale.


    HANOVER BANCORP, INC.
    SELECTED FINANCIAL DATA (unaudited)
    (dollars in thousands)
             
      Three Months Ended Nine Months Ended
      6/30/2023 6/30/2022 6/30/2023 6/30/2022
    Profitability:        
    Return on average assets  0.60%  1.41%  0.81%  1.61%
    Return on average equity(1)  6.82%  14.05%  8.68%  17.27%
    Return on average tangible equity(1)  7.64%  16.12%  9.75%  20.15%
    Pre-provision net revenue to average assets  0.95%  2.09%  1.27%  2.30%
    Yield on average interest-earning assets  5.65%  4.45%  5.44%  4.60%
    Cost of average interest-bearing liabilities  3.52%  0.50%  2.90%  0.47%
    Net interest rate spread (2)  2.13%  3.95%  2.54%  4.13%
    Net interest margin (3)  2.68%  4.05%  3.05%  4.23%
    Non-interest expense to average assets  2.04%  2.30%  2.03%  2.39%
    Operating efficiency ratio (4)  68.26%  52.43%  61.47%  51.07%
             
    Average balances:        
    Interest-earning assets $2,020,393  $1,467,131  $1,870,184  $1,417,742 
    Interest-bearing liabilities  1,702,208   1,149,705   1,542,242   1,123,649 
    Loans  1,798,651   1,323,482   1,748,618   1,283,856 
    Deposits  1,692,045   1,269,123   1,589,092   1,206,207 
    Borrowings  184,678   89,758   140,221   117,737 
             
    (1) Includes common stock and Series A preferred stock for the three and nine months ended 6/30/23.
    (2) Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
    (3) Represents net interest income divided by average interest-earning assets.
    (4) Excludes gain on sale of securities available for sale.


    HANOVER BANCORP, INC.
    SELECTED FINANCIAL DATA (unaudited)
    (dollars in thousands, except share and per share data)
             
      At or For the Three Months Ended
      6/30/2023 3/31/2023 12/31/2022 9/30/2022
    Asset quality:        
    Provision for loan losses $500  $932  $1,500  $2,050 
    Net (charge-offs)/recoveries  (10)  (457)  60   (92)
    Allowance for loan losses  15,369   14,879   14,404   12,844 
    Allowance for loan losses to total loans (1)  0.84%  0.83%  0.82%  0.79%
    Allowance for loan losses to originated loans (1)(5)  0.95%  0.95%  0.95%  0.94%
    Non-performing loans (2)(3)(4) $10,785  $11,031  $11,798  $13,512 
    Non-performing loans/total loans  0.59%  0.62%  0.68%  0.83%
    Non-performing loans/total assets  0.51%  0.53%  0.59%  0.73%
    Allowance for loan losses/non-performing loans  142.50%  134.88%  122.09%  95.06%
             
    Capital (Bank only):        
    Tier 1 Capital $188,568  $185,449  $182,934  $178,340 
    Tier 1 leverage ratio  9.16%  9.79%  10.34%  10.90%
    Common equity tier 1 capital ratio  13.16%  12.88%  14.17%  15.21%
    Tier 1 risk based capital ratio  13.16%  12.88%  14.17%  15.21%
    Total risk based capital ratio  14.24%  13.93%  15.30%  16.32%
             
    Equity data:        
    Shares outstanding (6)  7,334,120   7,331,092   7,299,000   7,285,648 
    Stockholders' equity $182,806  $180,522  $177,628  $172,584 
    Book value per share (6)  24.93   24.62   24.34   23.69 
    Tangible common equity (6)  163,294   160,992   158,079   153,017 
    Tangible book value per share (6)  22.26   21.96   21.66   21.00 
    Tangible common equity ("TCE") ratio (6)  7.77%  7.84%  8.05%  8.41%
             
    (1) Calculation excludes loans held for sale.        
    (2) Includes $0.1 million of Purchased Credit Impaired loans 90 days past due and still accruing and $0.2 million of loans fully guaranteed by the SBA at 6/30/23.
    (3) Includes $0.7 million of Purchased Credit Impaired loans 90 days past due and still accruing and $0.2 million of loans fully guaranteed by the SBA at 3/31/23.
    (4) Includes $1.2 million of Purchased Credit Impaired loans 90 days past due and still accruing and $0.2 million of loans fully guaranteed by the SBA at 12/31/22 and 9/30/22.
    (5) Calculation excludes acquired loans.
    (6) Includes common stock and Series A preferred stock at 6/30/23, 3/31/23 and 12/31/22.
             
    Note: Prior period information has been adjusted to conform to current period presentation.


    HANOVER BANCORP, INC.
    STATISTICAL SUMMARY
    QUARTERLY TREND
    (unaudited, dollars in thousands, except share data)
             
      6/30/2023 3/31/2023 12/31/2022 9/30/2022
             
    Loan distribution (1):        
    Residential mortgages $598,747  $567,106  $550,161  $488,692 
    Multifamily  583,837   588,244   590,530   575,061 
    Commercial real estate  546,120   541,924   533,442   485,891 
    Commercial & industrial  67,918   59,184   46,162   46,285 
    Home equity  26,517   30,664   26,358   27,566 
    Consumer  364   243   157   36 
             
    Total loans $1,823,503  $1,787,365  $1,746,810  $1,623,531 
             
    Sequential quarter growth rate  2.02%  2.32%  7.59%  14.67%
             
    Loans sold during the quarter $12,610  $12,756  $8,047  $19,342 
             
    Funding distribution:        
    Demand $180,303  $178,592  $199,556  $219,225 
    N.O.W.  480,108   627,102   536,092   582,457 
    Savings  67,626   79,414   107,275   128,927 
    Money market  409,097   391,314   285,471   258,424 
    Total core deposits  1,137,134   1,276,422   1,128,394   1,189,033 
    Time  456,505   430,852   389,256   339,073 
    Total deposits  1,593,639   1,707,274   1,517,650   1,528,106 
    Borrowings  293,849   136,962   238,273   101,752 
    Subordinated debentures  24,608   24,594   24,581   24,568 
             
    Total funding sources $1,912,096  $1,868,830  $1,780,504  $1,654,426 
             
    Sequential quarter growth rate - total deposits  -6.66%  12.49%  -0.68%  13.23%
             
    Period-end core deposits/total deposits ratio  71.35%  74.76%  74.35%  77.81%
             
    Period-end demand deposits/total deposits ratio  11.31%  10.46%  13.15%  14.35%
             
    (1) Excluding loans held for sale


    HANOVER BANCORP, INC.
    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(1) (unaudited)
    (dollars in thousands, except share and per share amounts)
               
      6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022
    Tangible common equity          
    Total equity (2) $182,806  $180,522  $177,628  $172,584  $167,391 
    Less: goodwill  (19,168)  (19,168)  (19,168)  (19,168)  (19,168)
    Less: core deposit intangible  (344)  (362)  (381)  (399)  (418)
    Tangible common equity (2) $163,294  $160,992  $158,079  $153,017  $147,805 
               
    Tangible common equity ("TCE") ratio            
    Tangible common equity (2) $163,294  $160,992  $158,079  $153,017  $147,805 
    Total assets  2,121,783   2,071,720   1,983,692   1,840,058   1,609,757 
    Less: goodwill  (19,168)  (19,168)  (19,168)  (19,168)  (19,168)
    Less: core deposit intangible  (344)  (362)  (381)  (399)  (418)
    Tangible assets $2,102,271  $2,052,190  $1,964,143  $1,820,491  $1,590,171 
    TCE ratio (2)  7.77%  7.84%  8.05%  8.41%  9.29%
               
    Tangible book value per share          
    Tangible equity (2) $163,294  $160,992  $158,079  $153,017  $147,805 
    Shares outstanding (2)  7,334,120   7,331,092   7,299,000   7,285,648   7,296,624 
    Tangible book value per share (2) $22.26  $21.96  $21.66  $21.00  $20.26 
               
    (1) A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with U.S. GAAP. While management uses non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP.
    (2) Includes common stock and Series A preferred stock at 6/30/23, 3/31/23 and 12/31/22.


    HANOVER BANCORP, INC.
    NET INTEREST INCOME ANALYSIS
    For the Three Months Ended June 30, 2023 and 2022
    (unaudited, dollars in thousands)
                 
       2023   2022 
      Average   Average Average   Average
      Balance Interest Rate Balance Interest Rate
                 
    Assets:            
    Interest-earning assets:            
    Loans $1,798,651  $25,581  5.70% $1,323,482  $15,842  4.80%
    Investment securities  15,885   198  5.00%  10,752   98  3.66%
    Interest-earning cash  195,883   2,494  5.11%  128,669   272  0.85%
    FHLB stock and other investments  9,974   186  7.48%  4,228   47  4.46%
    Total interest-earning assets  2,020,393   28,459  5.65%  1,467,131   16,259  4.45%
    Non interest-earning assets:            
    Cash and due from banks  8,240       10,035     
    Other assets  53,511       44,858     
    Total assets $2,082,144      $1,522,024     
                 
    Liabilities and stockholders' equity:            
    Interest-bearing liabilities:            
    Savings, N.O.W. and money market deposits $1,080,328  $9,905  3.68% $778,751  $579  0.30%
    Time deposits  437,202   3,214  2.95%  281,196   427  0.61%
    Total savings and time deposits  1,517,530   13,119  3.47%  1,059,947   1,006  0.38%
    Borrowings  160,079   1,501  3.76%  65,213   100  0.62%
    Subordinated debentures  24,599   334  5.45%  24,545   333  5.44%
    Total interest-bearing liabilities  1,702,208   14,954  3.52%  1,149,705   1,439  0.50%
    Demand deposits  174,515       209,176     
    Other liabilities  23,490       10,863     
    Total liabilities  1,900,213       1,369,744     
    Stockholders' equity  181,931       152,280     
    Total liabilities & stockholders' equity $2,082,144      $1,522,024     
    Net interest rate spread     2.13%     3.95%
    Net interest income/margin   $13,505  2.68%   $14,820  4.05%


    HANOVER BANCORP, INC.
    NET INTEREST INCOME ANALYSIS
    For the Nine Months Ended June 30, 2023 and 2022
    (unaudited, dollars in thousands)
                 
       2023   2022 
      Average   Average Average   Average
      Balance Interest Rate Balance Interest Rate
                 
    Assets:            
    Interest-earning assets:            
    Loans $1,748,618  $71,501  5.47% $1,283,856  $47,972  5.00%
    Investment securities  16,268   608  5.00%  12,659   358  3.78%
    Interest-earning cash  97,681   3,558  4.87%  116,709   356  0.41%
    FHLB stock and other investments  7,617   424  7.44%  4,518   130  3.85%
    Total interest-earning assets  1,870,184   76,091  5.44%  1,417,742   48,816  4.60%
    Non interest-earning assets:            
    Cash and due from banks  9,557       8,901     
    Other assets  53,334       47,044     
    Total assets $1,933,075      $1,473,687     
                 
    Liabilities and stockholders' equity:            
    Interest-bearing liabilities:            
    Savings, N.O.W. and money market deposits $1,000,926  $22,461  3.00% $694,429  $1,290  0.25%
    Time deposits  401,095   7,144  2.38%  311,483   1,319  0.57%
    Total savings and time deposits  1,402,021   29,605  2.82%  1,005,912   2,609  0.35%
    Borrowings  115,635   2,792  3.23%  93,213   376  0.54%
    Subordinated debentures  24,586   1,001  5.44%  24,524   998  5.44%
    Total interest-bearing liabilities  1,542,242   33,398  2.90%  1,123,649   3,983  0.47%
    Demand deposits  187,071       200,295     
    Other liabilities  24,522       12,456     
    Total liabilities  1,753,835       1,336,400     
    Stockholders' equity  179,240       137,287     
    Total liabilities & stockholders' equity $1,933,075      $1,473,687     
    Net interest rate spread     2.54%     4.13%
    Net interest income/margin   $42,693  3.05%   $44,833  4.23%

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