Hanover Bancorp(HNVR) - 2024 Q4 - Annual Report

Financial Performance - For the three months ended September 30, 2024, revenue increased to $17.056 million from $15.506 million for the same period in 2023, representing a growth of 10%[164] - Net income for the three months ended September 30, 2024, was $3.539 million, slightly up from $3.523 million in the same period of 2023[164] - The Bank's net income for the nine months ended September 30, 2024, was $8.4 million, offset by $2.2 million in declared dividends[193] - The company recorded net income of $8.4 million for the nine months ended September 30, 2024, down from $9.8 million in the comparable period[216] Asset and Deposit Information - Total assets as of September 30, 2024, were $2.3 billion, with total deposits of $2.0 billion and total stockholders' equity of $192.3 million[166] - Total assets of the Company were $2.3 billion as of September 30, 2024, unchanged from December 31, 2023[174] - Total deposits increased to $2.0 billion at September 30, 2024, reflecting a growth of $52.9 million or 2.8% from $1.9 billion at December 31, 2023[178] - Core deposit balances grew to $1.5 billion as of September 30, 2024, up from $1.4 billion as of December 31, 2023[178] - The Company's outstanding uninsured deposits were $622.1 million or 31.8% of total deposits as of September 30, 2024, down from $771.0 million or 40.5% at December 31, 2023[178] Credit Losses and Loan Information - The provision for credit losses decreased to $200,000 for the three months ended September 30, 2024, compared to $500,000 for the same period in 2023[164] - The allowance for credit losses increased by $3.7 million, or 19.1%, to $23.4 million, representing 1.17% of total loans as of September 30, 2024[209] - The company recorded a provision for credit losses on loans of $4.5 million for the nine months ended September 30, 2024, compared to $1.9 million for the same period in 2023, indicating an increase in credit loss provisions[222] - Total non-accrual loans at September 30, 2024, were $15.4 million, or 0.77% of total loans, compared to 0.80% at September 30, 2023[169] - The company recorded net loan charge-offs of $0.4 million during the three months ended September 30, 2024, compared to $1.2 million for the same period in 2023[227] Interest Income and Margin - The net interest income for the three months ended September 30, 2024, increased by $1.3 million compared to the same period in 2023, with a net interest margin improvement to 2.37% from 2.29%[204][205] - The yield on interest-earning assets rose to 6.17% in the 2024 quarter, an increase of 56 basis points from 5.61% in the comparable 2023 quarter[205] - The company's net interest margin decreased to 2.41% in the 2024 nine-month period from 2.65% in the comparable 2023 period[217] - The yield on interest-earning assets increased to 6.14% in the 2024 nine-month period from 5.58% in the comparable 2023 period, an increase of 56 basis points[217] Non-Interest Income and Expenses - Non-interest income increased by $0.2 million for the three months ended September 30, 2024, driven by a $1.4 million increase in net gain on sale of loans[211] - Non-interest income increased by $3.7 million for the nine months ended September 30, 2024, driven by a $4.4 million increase in net gain on sale of loans, with approximately $81.8 million sold in the government guaranteed portion of SBA loans[222] - Total non-interest expense increased by $1.9 million for the three months ended September 30, 2024, primarily due to higher salaries and employee benefits[213] - Total non-interest expense rose by $3.3 million for the nine months ended September 30, 2024, primarily due to increased salaries and employee benefits for additional staff[223] Capital and Regulatory Ratios - The Bank's tier 1 leverage ratio was 8.85%, and the common equity tier 1 risk-based capital ratio was 12.99% as of September 30, 2024, exceeding regulatory guidelines for a well-capitalized institution[194] - As of September 30, 2024, the Bank had total stockholders' equity of $192.3 million, an increase of $7.5 million from $184.8 million at December 31, 2023, primarily due to a $6.2 million increase in retained earnings[193] Strategic Initiatives - The Company opened a new business banking center in Hauppauge, New York, in May 2023, and plans to open a full-service branch in Port Jefferson by Q1 2025[159] - The Bank initiated a flow origination program for residential loans in late 2023 to resume sales and generate fee income[161] - The Company announced a stock repurchase program allowing the repurchase of up to 366,050 shares, approximately 5% of its outstanding shares, with no repurchases made as of September 30, 2024[195] Interest Rate Risk Management - The Company employs strategies to manage interest rate risk, including diversifying interest-earning assets and liabilities, and utilizing interest rate swap agreements[232] - The Company’s asset/liability management program aims to maximize net interest income while managing overall risk from interest rate fluctuations[231] - The Company’s interest rate risk exposure is assessed based on a 12-month time horizon[233] Other Information - The evaluation of the effectiveness of the Company's disclosure controls concluded they are effective in timely alerting to material information[236] - The Company is not subject to any legal proceedings that could materially impact its financial condition[237] - The EVE and NII measurements are subject to model limitations and may not precisely forecast the effects of interest rate changes[234]