AG真人官方

Hanover Bancorp,听Inc. Reports First听Quarter 2025 Results Highlighted by Accelerated Margin Expansion, Improved Credit Quality Metrics & Successful Core Banking System Conversion

First Quarter Performance Highlights

• Net Income: Net income for the quarter听ended March听31, 2025 totaled $1.5听尘颈濒濒颈辞苍 or $0.20 per diluted share (including Series听A preferred shares). Adjusted听(non-GAAP) net income (excluding core system conversion expenses of $2.6听尘颈濒濒颈辞苍, net of tax) increased to $4.1听尘颈濒濒颈辞苍 or $0.55 per diluted share for the quarter听ended March听31, 2025.
• Net Interest Income: Net interest income was $14.6听尘颈濒濒颈辞苍 for the quarter听ended March听31, 2025, an increase of $0.8听尘颈濒濒颈辞苍 or 5.95% from the quarter听ended December听31, 2024 and $1.7听尘颈濒濒颈辞苍, or 13.10% from the quarter听ended March听31, 2024.
• Net Interest Margin Expansion: The Company鈥檚 net interest margin during the quarter听ended March听31, 2025 increased to 2.68% from 2.53% in the quarter听ended December听31, 2024 and 2.41% in the quarter听ended March听31, 2024.
• Strong Liquidity Position: At March听31, 2025, undrawn liquidity sources, which include cash and unencumbered securities and secured and unsecured funding capacity, totaled $679.0听尘颈濒濒颈辞苍, or approximately 322% of uninsured deposit balances. Insured and collateralized deposits, which include municipal deposits, accounted for approximately 89% of total deposits at March听31, 2025.
• Demand Deposits: Demand deposits increased $12.6听尘颈濒濒颈辞苍 or 6.23% from March听31, 2024 and $3.9听尘颈濒濒颈辞苍 or 1.85% from December听31, 2024.
  
• Loan Diversification Strategy: The Company continues to actively manage its Multi-Family and Commercial AG真人官方 Estate portfolios which resulted in a reduction in the commercial real estate concentration ratio to 369% of capital at March听31, 2025 from 385% at December听31, 2024 and 416% at March听31, 2024. The Company continues to focus loan growth primarily in residential loan products originated for sale to specific buyers in the secondary market, C&I and SBA loans. The Company will selectively explore Commercial AG真人官方 Estate opportunities with an emphasis on relationship based Commercial AG真人官方 Estate lending.
  
• Asset Quality: At March听31, 2025, the Bank鈥檚 asset quality improved with non-performing loans decreasing 28.5% to $11.7听尘颈濒濒颈辞苍, representing 0.60% of the total loan portfolio, while the allowance for credit losses increased to 1.17% of total loans.
• Tangible Book Value Per Share: Tangible book value per share (including Series听A preferred shares) was $23.62 at March听31, 2025 (inclusive of one-time core system conversion expenses of $2.6听尘颈濒濒颈辞苍, net of tax, or $0.34 per听share) compared to $23.86 at December听31, 2024.
• Technology & Rebranding: The Company completed its core processing system conversion to FIS Horizon in February 2025. This conversion, coupled with our recently revealed refreshed corporate logo, exemplifies our momentum towards a more technologically advanced, modern and digitally forward-thinking bank.
• Quarterly Cash Dividend: The Company鈥檚 Board of Directors approved a $0.10 per share cash dividend on both common and Series听A preferred shares payable on May听14, 2025 to stockholders of record on May听7, 2025.
  

MINEOLA, N.Y., April 23, 2025 (GLOBE NEWSWIRE) -- Hanover Bancorp, Inc.听(鈥淗anover鈥� or 鈥渢he Company鈥� 鈥撎齆ASDAQ:听HNVR), the holding company for Hanover Community Bank听(鈥渢he听Bank鈥�), today reported results for the quarter听ended March听31, 2025 and the declaration of a $0.10 per share cash dividend on both common and Series听A preferred shares payable on May听14, 2025 to stockholders of record on May听7, 2025.

Earnings Summary for the Quarter听Ended March 31, 2025

The Company reported net income for the quarter听ended March听31, 2025 of $1.5听尘颈濒濒颈辞苍 or $0.20 per diluted share (including Series听A preferred shares), versus $4.1听尘颈濒濒颈辞苍 or $0.55 per diluted share (including Series听A preferred shares) in the quarter听ended March听31, 2024. The Company recorded adjusted听(non-GAAP) net income (excluding core system conversion expenses of $2.6听尘颈濒濒颈辞苍, net of tax) of $4.1听尘颈濒濒颈辞苍 or $0.55 per diluted share in the quarter听ended March听31, 2025, versus net income of $4.1听尘颈濒濒颈辞苍 or $0.55 per diluted share in the comparable 2024 quarter (which included no adjustments). Returns on average assets, average stockholders鈥� equity and average tangible equity were 0.27%, 3.11% and 3.45%, respectively, for the quarter听ended March听31, 2025, versus 0.74%, 8.70% and 9.71%, respectively, for the comparable quarter of 2024. Adjusted听(non-GAAP) returns, exclusive of core system conversion expenses on average assets, average stockholders鈥� equity and average tangible equity were 0.73%, 8.36% and 9.27%, respectively, in the quarter听ended March听31, 2025, versus 0.74%, 8.70% and 9.71%, respectively, in the comparable quarter of 2024.

While net interest income and non-interest income increased during the quarter听ended March听31, 2025 compared to the quarter听ended March听31, 2024, these were partially offset by increases in provision for credit losses and non-interest expenses, particularly compensation and benefits and the one-time core system conversion expenses. The increase in compensation and benefits expense in the first听quarter of 2025 versus the comparable 2024 quarter was primarily related to lower deferred loan origination costs partially offset by lower incentive compensation expense resulting from reduced lending activity. The Company鈥檚 effective tax rate decreased to 13.8% in the first quarter of 2025 from 24.9% both in the linked quarter and the comparable 2024 quarter due to the tax impact of the windfall benefit from expiring stock options that were exercised and vested restricted stock. We expect a normalized run rate of 25.0% for the remainder of the year.

Net interest income was $14.6听尘颈濒濒颈辞苍 for the quarter听ended March听31, 2025, an increase of $1.7听尘颈濒濒颈辞苍, or 13.10% from the comparable 2024听quarter due to improvement of the Company鈥檚 net interest margin to 2.68% in the 2025听quarter from 2.41% in the comparable 2024 quarter. The yield on interest earning assets decreased to 6.01% in the 2025听quarter from 6.03% in the comparable 2024听quarter, a decrease of 2听basis points that was partially offset by a 32听basis point decrease in the cost of interest-bearing liabilities to 4.01% in 2025 from 4.33% in the first听quarter of 2024. Net interest income on a linked听quarter basis increased $0.8听尘颈濒濒颈辞苍 or 5.95%, due to a 15听basis point increase in net interest margin resulting from a 23听basis point decrease in cost of interest-bearing liabilities, partially offset by a 5听basis point decrease on yield on interest earning assets. The increase in the net interest margin was a result of the late 2024 reductions in the Fed Funds effective rate and the liability sensitive nature of the Bank鈥檚 balance sheet.

Michael P. Puorro, Chairman and Chief Executive Officer, commented on the Company鈥檚 quarterly results: 鈥淲e are pleased with our first quarter performance which reflected sizable improvements in Net Interest Income and Net Interest Margin that drove stronger adjusted ROTE and ROA for the period. Specifically, NII increased from $13.8听尘颈濒濒颈辞苍 to $14.6听尘颈濒濒颈辞苍 and NIM from 2.53% to 2.68%, resulting in adjusted ROTE of 9.27% and ROA of 0.73%, confirming a trend away from the restrictive environment of the last couple of years. Building on this positive momentum were improved credit metrics and the completion of our core banking system conversion, a significant achievement that is expected to deliver tangible operational efficiencies and customer benefits while enhancing our commitment to digital banking. In addition to the core banking system conversion, we recently announced our new logo which is representative of our focus on innovation and a digital forward strategy. Moving forward, we remain committed to disciplined development of our core business verticals which include niche residential, SBA and C&I lending. Further, we look forward to a more favorable banking environment and the upcoming potential qualification for the Russell听2000, which should increase institutional ownership and enhance the liquidity of our stock.鈥�

Balance Sheet Highlights

Total assets at March听31, 2025 were $2.29听产颈濒濒颈辞苍 versus $2.31听产颈濒濒颈辞苍 at December听31, 2024. Total securities available for sale at March听31, 2025 were $93.2听尘颈濒濒颈辞苍, an increase of $9.4听尘颈濒濒颈辞苍 from December听31, 2024, primarily driven by growth in collateralized mortgage obligations, collateralized loan obligations and corporate bonds.

Total deposits at March听31, 2025 were $1.94听产颈濒濒颈辞苍, a decrease of $17.8听尘颈濒濒颈辞苍 or 0.91%, compared to $1.95听产颈濒濒颈辞苍 at December听31, 2024. Total deposits increased $19.2听尘颈濒濒颈辞苍 or 1.00% from March听31, 2024. Demand deposits increased $12.6听尘颈濒濒颈辞苍 or 6.23% from March听31, 2024. Our loan to deposit ratio improved to 101% at March听31, 2025 from 102% at December听31, 2024.

The Company had $517.1听尘颈濒濒颈辞苍 in total municipal deposits at March听31, 2025, at a weighted average rate of 3.71% versus $509.3听尘颈濒濒颈辞苍 at a weighted average rate of 3.72% at December听31, 2024 and $576.3听尘颈濒濒颈辞苍 at a weighted average rate of 4.65% at March听31, 2024. The Company鈥檚 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鈥檚 lending products at costs lower than those of consumer deposits and market-based borrowings. The Company continues to broaden its municipal deposit base and currently services 40听customer relationships.

Total borrowings at March听31, 2025 were $107.8听尘颈濒濒颈辞苍, with a weighted average rate and term of 4.11% and 20听months, respectively. At March听31, 2025 and December听31, 2024, the Company had $107.8听尘颈濒濒颈辞苍 of term FHLB advances outstanding. The Company had no FHLB overnight borrowings outstanding at March听31, 2025 and December听31, 2024. The Company had no borrowings outstanding under lines of credit with correspondent banks at March听31, 2025 and December听31, 2024.

Stockholders鈥� equity was $196.6听尘颈濒濒颈辞苍 at both March听31, 2025 and December听31, 2024. Retained earnings increased by $0.8听尘颈濒濒颈辞苍 due primarily to net income of $1.5听尘颈濒濒颈辞苍 for the quarter听ended March听31, 2025, which was offset by $0.7听尘颈濒濒颈辞苍 of dividends declared. The accumulated other comprehensive loss at March听31, 2025 was 0.71% of total equity and was comprised of a $0.9听尘颈濒濒颈辞苍 after tax net unrealized loss on the investment portfolio and a $0.5听尘颈濒濒颈辞苍 after tax net unrealized loss on derivatives. Tangible book value per share (including Series听A preferred shares) was $23.62 at March听31, 2025 (inclusive of one-time core听system conversion expenses of $2.6听尘颈濒濒颈辞苍, net of tax, or $0.34 per share) compared to $23.86 at December听31, 2024.

Loan Portfolio

For the three months听ended March听31, 2025, the Bank鈥檚 loan portfolio decreased $24.9 million to $1.96听产颈濒濒颈辞苍 from December 31, 2024. The decrease resulted primarily from the ongoing management of our commercial real estate and multifamily听loan concentrations. At March听31, 2025, the Company鈥檚 residential loan portfolio (including home听equity) amounted to $733.6听尘颈濒濒颈辞苍, with an average loan balance of $486听迟丑辞耻蝉补苍诲 and a weighted average loan-to-value ratio of 57%. Commercial real estate (including construction) and multifamily loans totaled $1.06听产颈濒濒颈辞苍 at March听31, 2025, with an average loan balance of $1.5听尘颈濒濒颈辞苍 and a weighted average loan-to-value ratio of 59%. As will be discussed below, approximately 37% of the multifamily portfolio is subject to rent regulation. The Company鈥檚 commercial real estate concentration ratio continues to improve, decreasing to 369% of capital at March听31, 2025 from 385% at December听31, 2024 and 416% at March听31, 2024, with loans secured by office space accounting for 2.23% of the total loan portfolio and totaling $43.8听尘颈濒濒颈辞苍 at March听31, 2025. The Company鈥檚 loan pipeline with executed term听sheets at March听31, 2025 is approximately $255.0听尘颈濒濒颈辞苍, with approximately 92% being niche-residential, conventional C&I and SBA lending opportunities.

The Bank remains focused on expanding its core verticals and continues to originate loans for its portfolio and for sale in the secondary market under its residential flow origination program. Of the $48.8听尘颈濒濒颈辞苍 in closed residential loans originated in the quarter听ended March听31, 2025, $27.6听尘颈濒濒颈辞苍 were originated for the Bank鈥檚 portfolio and reflected a weighted average yield of 6.64% before origination and other fees, which average 50-100 bps per loan, and a weighted average LTV of 58%. The remaining $21.2听尘颈濒濒颈辞苍 of closed loans were originated for sale in the secondary market. During the quarter听ended March听31, 2025, the Company sold $18.3听尘颈濒濒颈辞苍 of residential loans under its flow origination program and recorded gains on sale of loans held-for-sale of $0.4听尘颈濒濒颈辞苍 with a premium of 2.38%.

During the quarters听ended March听31, 2025 and 2024, the Company sold approximately $23.4听尘颈濒濒颈辞苍 and $26.7听尘颈濒濒颈辞苍, respectively, in government听guaranteed SBA听loans and recorded gains on sale of loans held-for-sale of $1.9听尘颈濒濒颈辞苍 and $2.5听尘颈濒濒颈辞苍, respectively. SBA loan originations and gains on sale were lower due to a combination of factors, including: lower than expected loan sale premiums due, we believe, to first quarter market turmoil; delays in loan closings resulting from the impact of administrative changes to SBA Standard Operating Procedures; and the inability of certain loans to close because of delays by state regulatory agencies in issuing permit approvals to certain borrowers. As we enter the second听quarter of 2025, we expect to navigate these factors and to increase the volume of origination and loan sale activity throughout the year. The Bank concluded the first quarter of 2025 with C&I loan originations of approximately $16.8听尘颈濒濒颈辞苍. Based on its existing pipeline, the Bank expects C&I lending and deposit activity to grow as the year progresses.

Commercial AG真人官方 Estate Statistics

A significant portion of the Bank鈥檚 commercial real estate portfolio consists of loans secured by Multi-Family and CRE-Investor owned real estate that are predominantly subject to fixed interest rates for an initial period of 5听years. The Bank鈥檚 exposure to Land/Construction loans is minor at $8.0听尘颈濒濒颈辞苍, all at floating interest rates. As shown below, 31% of the loan balances in these combined portfolios will either have a rate reset or mature in 2025 and 2026, with another 56% with rate resets or maturing in 2027.

Rental breakdown of Multi-Family portfolio

The table below segments our portfolio of loans secured by Multi-Family properties based on rental terms and location. As shown below, 63% of the combined portfolio is secured by properties subject to free market rental terms, which is the dominant tenant type. Both the Market Rent and Stabilized Rent segments of our portfolio present very similar average borrower profiles. The portfolio is primarily located in the New York City boroughs of Brooklyn, the Bronx and Queens.

Office Property Exposure

The Bank鈥檚 exposure to the Office market is minor. Loans secured by office space accounted for 2.23% of the total loan portfolio with a total balance of $43.8听尘颈濒濒颈辞苍, of which less than听1% is located in Manhattan. The pool has a 2.32x听weighted average DSCR, a 53%听weighted average听LTV and less than $353,000 of exposure in Manhattan.

Asset Quality and Allowance for Credit Losses

At March听31, 2025, the Bank鈥檚 asset quality metrics improved with non-performing loans totaling $11.7听尘颈濒濒颈辞苍 compared to non-performing loans of $16.4听million at December听31, 2024, a decrease of $4.7 million. This decrease resulted primarily from the contracted sale of non-performing loans totaling $5.0 million, net of a $0.3 million charge-off, during the quarter. At March 31, 2025 non-performing loans were 0.60% of total loans outstanding versus 0.82% at December 31, 2024.

During the first quarter of 2025, the Bank recorded a provision for credit losses expense of $0.6听million. The March听31, 2025 allowance for credit losses was $22.9听million versus $22.8听million at December听31, 2024. The allowance for credit losses as a percentage of total loans was 1.17% at March听31, 2025 and 1.15% at December听31, 2024.

Net Interest Margin

The Bank鈥檚 net interest margin increased to 2.68% for the quarter听ended March听31, 2025 compared to 2.53% in the quarter听ended December听31, 2024 and 2.41% in the quarter听ended March听31, 2024 due to the recent reductions in the Fed Funds effective rate and the liability sensitive nature of the Bank鈥檚 balance sheet.

About Hanover Community Bank and Hanover Bancorp, Inc.

Hanover Bancorp, Inc. (NASDAQ: HNVR), is the bank holding company for Hanover Community Bank, a community commercial bank focusing on highly personalized and efficient services and products responsive to client needs. Management and the Board of Directors are comprised of a select group of successful local businesspeople who are committed to the success of the Bank by knowing and understanding the metro-New York area鈥檚 financial needs and opportunities. Backed by state-of-the-art technology, Hanover offers a full range of financial services. Hanover offers 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鈥檚 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, with a new branch opening in Port Jefferson, New York in mid 2025.

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)听548-8500 or visit the Bank鈥檚 website at .

Non-GAAP Disclosure

This discussion, including the financial statements attached thereto, includes non-GAAP financial measures which include the Company鈥檚 adjusted net income, adjusted basic and diluted earnings per share, adjusted return on average assets, adjusted return on average equity, tangible common equity听(鈥淭CE鈥�)听ratio, TCE, tangible assets, tangible book听value per share, return on average tangible equity and efficiency听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 (鈥淯.S.听GAAP鈥�). The Company鈥檚 management believes that the presentation of non-GAAP financial measures provides both management and investors with a greater understanding of the Company鈥檚 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鈥檚 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鈥檚 non-GAAP financial measures may not be comparable to similarly titled measures used by other financial institutions.

With respect to the calculations of and reconciliations of adjusted net income, TCE, tangible assets, TCE听ratio and tangible book value per share, reconciliations to the most comparable U.S.听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听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,听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听10-K under Item听1A听-听Risk Factors, as updated by our subsequent filings with the Securities and Exchange Commission. Further, the adverse effect of health emergencies or natural disasters on the Company, its customers, and the communities where it operates may adversely affect the Company鈥檚 business, results of operations and financial condition for an indefinite period of time. Consequently, no forward-looking statement can be guaranteed. Hanover Bancorp,听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