Hanover Bancorp(US:HNVR)2024-08-13 20:00Financial Performance - For the three months ended June 30, 2024, the Company reported revenue of $16.9 million, an increase of 9.0% from $15.5 million in the same period of 2023[138]. - Net income for the three months ended June 30, 2024, was $0.8 million, a decrease of 72.7% compared to $3.1 million for the same period in 2023[139]. - The company recorded net income of $0.8 million for the three months ended June 30, 2024, down from $3.1 million in the same period in 2023, reflecting a decrease of approximately 74.2%[168]. - For the six months ended June 30, 2024, net income was $4.9 million, down from $6.3 million in the comparable period in 2023, a decrease of approximately 22.2%[178]. Credit Losses and Provisions - The provision for credit losses increased to $4.0 million for the three months ended June 30, 2024, compared to $0.5 million in the same period of 2023[138]. - Provision for credit losses expense increased to $3.9 million for the three months ended June 30, 2024, compared to $0.5 million in the same period in 2023, marking a significant increase of 680%[173]. - The allowance for credit losses increased by $4.0 million, or 20.3%, to $23.6 million, representing 1.17% of total loans as of June 30, 2024[173]. - The provision for credit losses on loans increased to $4.1 million for the six months ended June 30, 2024, compared to $1.4 million for the same period in 2023[184]. Assets and Liabilities - Total assets as of June 30, 2024, were $2.3 billion, with total deposits of $1.9 billion and total stockholders' equity of $190.1 million[139]. - Total assets of the Company were $2.3 billion as of June 30, 2024, unchanged from December 31, 2023[145]. - Total loans increased by $55.8 million to $2.0 billion as of June 30, 2024[146]. - The aggregate amount of outstanding uninsured deposits was $675.7 million, or 34.8% of total deposits as of June 30, 2024[148]. Non-Interest Income and Expenses - Non-interest income rose by $1.6 million for the three months ended June 30, 2024, driven primarily by a $1.5 million increase in net gain on sale of loans, totaling $2.5 million for the quarter[174]. - Total non-interest expense increased by $1.1 million for the three months ended June 30, 2024, primarily due to higher salaries and employee benefits[176]. - Non-interest income rose by $3.5 million to $XX million for the six months ended June 30, 2024, driven by a $3.0 million increase in net gain on sale of loans, with approximately $54.7 million in SBA loans sold[184]. - Total non-interest expense increased by $1.3 million for the six months ended June 30, 2024, primarily due to higher salaries and employee benefits[185]. Capital and Equity - Total stockholders' equity increased to $190.1 million at June 30, 2024, up from $184.8 million at December 31, 2023[157]. - The Company's tier 1 leverage ratio was 8.89% and total risk-based capital ratio was 14.21% as of June 30, 2024, exceeding regulatory guidelines[158]. Interest Rates and Risk Management - The company's net interest margin compressed to 2.46% in the second quarter of 2024 from 2.68% in the same quarter of 2023, reflecting the impact of rising interest rates[169]. - The yield on interest-earning assets increased to 6.22% in the second quarter of 2024 from 5.65% in the same quarter of 2023, an increase of 57 basis points[169]. - The company has implemented strategies to manage interest rate risk, including diversifying interest-earning assets and liabilities, emphasizing core deposits, and utilizing interest rate swap agreements[191]. - The estimated net interest income (NII) at June 30, 2024, is $56,171 thousand, with a projected decrease of $13,005 thousand (23.2%) if interest rates rise by 400 basis points[193]. Regulatory and Compliance - The company adopted ASU 2016-13 effective October 1, 2023, which involves new controls over financial reporting related to credit losses[195]. - The company’s internal controls over financial reporting have not materially changed during the three months ended June 30, 2024, except for those related to the adoption of ASU 2016-13[195]. - The company is not subject to any legal proceedings that could materially affect its financial condition[196]. Business Development - The Company opened a new business banking center in Hauppauge, New York, in May 2023, to enhance commercial lending and deposit activities[134]. - The Company initiated a flow origination program in late 2023 to resume residential loan sales and generate fee income[136].