• Hanover Bancorp, Inc. Reports Earnings for the Third Calendar Quarter and Fiscal Year 2022 and Declares $0.10 Quarterly Cash Dividend

    Source: Nasdaq GlobeNewswire / 26 Oct 2022 08:30:01   America/New_York

    Third Calendar Quarter and Fiscal Year Performance Highlights

    • Net Income: Net income for the quarter ended September 30, 2022 totaled $5.8 million or $0.79 per diluted common share, versus $7.1 million or $1.25 per diluted common share in the same period a year ago. Excluding the impact of net purchase accounting accretion, the Company’s net income was $5.4 million or $0.74 per diluted common share in the quarter ended September 30, 2022 versus net income of $4.4 million or $0.79 per diluted common share in the comparable 2021 quarter. In connection with the Company’s initial public offering in May 2022, average common shares outstanding increased to 7,287,622 in the 2022 period from 5,559,818 in the comparable period of 2021. The Company recorded net income for the fiscal year ended September 30, 2022 of $23.6 million or $3.68 per diluted common share, compared to $10.9 million or $2.28 per diluted common share in the comparable 2021 fiscal year. The Company recorded adjusted (non-GAAP) net income (primarily excluding merger-related charges) of $23.8 million or $3.71 per diluted common share for the fiscal year ended September 30, 2022, versus adjusted (non-GAAP) net income of $14.4 million or $3.02 per diluted common share in the comparable 2021 fiscal year.
    • Pre-Provision Net Revenue: Pre-provision net revenue was $9.6 million or 2.28% of average assets for the quarter ended September 30, 2022 versus $9.9 million or 2.64% of average assets in the comparable 2021 quarter and $7.9 million or 2.09% of average assets in the prior linked quarter of 2022.
    • Quarterly Cash Dividend: The Company’s Board of Directors approved a $0.10 per common share cash dividend payable on November 15, 2022 to stockholders of record on November 8, 2022.
    • Financial Performance Metrics: Returns on average total assets and average stockholders’ equity were 1.39% and 13.45%, respectively, in the quarter ended September 30, 2022, versus 1.88% and 23.45% in the comparable 2021 period. Adjusted (non-GAAP) returns on average total assets and average stockholders’ equity (primarily excluding merger-related charges) were 1.39% and 13.45%, respectively, in the quarter ended September 30, 2022, versus 1.92% and 23.95% in the comparable 2021 period. The Company’s return on average tangible common equity was 15.18% in the quarter ended September 30, 2022.
    • Net Interest Income: Net interest income was $16.4 million for the quarter ended September 30, 2022, an increase of $291 thousand, or 1.8%, versus the comparable 2021 quarter, and an increase of $1.6 million, or 10.8% versus the prior linked quarter of 2022.
    • Net Interest Margin: The Company’s net interest margin during the quarter ended September 30, 2022 was 4.04% versus 4.05% in the quarter ended June 30, 2022 and 4.51% in the quarter ended September 30, 2021. Excluding the impact of net purchase accounting accretion, the Company’s net interest margin was 3.93% in the quarter ended September 30, 2022, 3.94% in the quarter ended June 30, 2022 and 3.76% in the quarter ended September 30, 2021.
    • Balance Sheet: Assets totaled $1.84 billion at September 30, 2022 versus $1.61 billion at June 30, 2022 and $1.48 billion at September 30, 2021.
    • Capital Strength: The Bank’s Tier 1 leverage ratio was 10.90% and its Total Risk-Based capital ratio was 16.32% at September 30, 2022, each significantly above the regulatory minimums for a well-capitalized institution. The Company’s Tangible Common Equity ratio was 8.41% at September 30, 2022, 9.29% at June 30, 2022, and 7.02% at September 30, 2021.
    • Tangible Book Value Per Share: Tangible book value per common share increased to $21.00 at September 30, 2022 from $20.26 at June 30, 2022 and $18.49 at September 30, 2021.
    • Strong Lending Activity: On a linked quarter basis, the Company exhibited net loan growth, excluding Paycheck Protection Program (“PPP”) loans, of $217.9 million, a 62.5% increase on an annualized basis. At September 30, 2022, the Company’s loan pipeline was approximately $315 million.

    MINEOLA, N.Y., Oct. 26, 2022 (GLOBE NEWSWIRE) -- Hanover Bancorp, Inc. (“Hanover” or “the Company” – NASDAQ: HNVR), the holding company for Hanover Community Bank (“the Bank”), today reported significant performance achievements for the quarter ended September 30, 2022 highlighted by strong loan growth in addition to record levels of assets, loans, deposits, net interest income and tangible book value per common share. Further, the Company’s Board of Directors approved the payment of a $0.10 per common share cash dividend payable on November 15, 2022 to stockholders of record on November 8, 2022. This is the Company’s fourth consecutive cash dividend.

    Earnings Summary for the Quarter Ended September 30, 2022

    The Company reported net income for the quarter ended September 30, 2022 of $5.8 million or $0.79 per diluted common share, versus $7.1 million or $1.25 per diluted common share in the comparable year ago period, representing a decrease of $1.2 million or 17.5%. Excluding the impact of net purchase accounting accretion, the Company’s net income was $5.4 million or $0.74 per diluted common share in the quarter ended September 30, 2022 versus net income of $4.4 million or $0.79 per diluted common share in the comparable 2021 period. Returns on average assets and average stockholders’ equity were 1.39% and 13.45%, respectively, in the quarter ended September 30, 2022, versus 1.88% and 23.45% in the comparable 2021 quarter. Adjusted (non-GAAP) returns on average total assets and average stockholders’ equity were 1.39% and 13.45%, respectively, in the quarter ended September 30, 2022, versus 1.92% and 23.95% in the comparable 2021 period.

    The decline in net income recorded in the third calendar quarter of 2022 versus the comparable 2021 quarter resulted primarily from an increase in the provision for loan losses expense due to growth in the loan portfolio in the third calendar quarter of 2022, an increase in other operating expenses and a decrease in purchase accounting accretion.

    Earnings Summary for the Fiscal Year Ended September 30, 2022

    For the fiscal year ended September 30, 2022, the Company reported net income of $23.6 million or $3.68 per diluted common share versus $10.9 million or $2.28 per diluted common share a year ago. The Company recorded adjusted (non-GAAP) net income (primarily excluding merger-related charges) of $23.8 million or $3.71 per diluted common share for the fiscal year ended September 30, 2022, versus adjusted (non-GAAP) net income of $14.4 million or $3.02 per diluted common share in the comparable 2021 fiscal year.

    The improved level of earnings in 2022 resulted from a $19.5 million or 46.9% increase in net interest income, principally due to growth in average interest-earning assets of $416.8 million coupled with a 21 basis point widening of the Company’s net interest margin to 4.18% in the fiscal year ended September 30, 2022, and a $5.5 million increase in non-interest income, primarily from gains on the sale of loans held for sale and loan servicing and fee income. Partially offsetting these positive factors was a $3.5 million increase in the provision for loan losses expense due to growth in the loan portfolio, and a $5.2 million increase in total operating expenses, principally resulting from growth in compensation and benefits related to increased headcount. The increase in headcount has resulted from several factors including organic growth, the need to create the infrastructure required for a public reporting company, the opportunistic addition of experienced executives to implement new product initiatives such as expanded commercial real estate and commercial and industrial lending, and an increase in personnel from the May 2021 acquisition of Savoy. The effective tax rate was 22.8% in each of 2022 and 2021.

    Michael P. Puorro, Chairman and Chief Executive Officer, commented on the Company’s quarterly results: “We again demonstrated solid operating results across the board during the third calendar quarter of 2022 - our second as a publicly traded company. Strong organic growth in loans and deposits yielded net income of $5.8 million, earnings per diluted common share of $0.79, and returns on average assets and average stockholders’ equity of 1.39% and 13.45%, respectively, and most importantly, continued growth in tangible book value per common share to $21.00 during the quarter ended September 30, 2022, an increase of 13.6% versus the comparable 2021 date. Our operating efficiency ratio during the quarter was 48.0%, an excellent ratio for a high-growth company. These financial performance metrics place us in the upper echelon of our community bank peer group. We have shown that we possess the ability to build our earning asset base across multiple highly profitable operating verticals funded by strong deposit generating businesses. We are confident that our Freehold branch and our planned Hauppauge location, projected to open in the first quarter of 2023, will each meaningfully contribute to future commercial and industrial and SBA loan growth and low-cost core deposit expansion.”

    Balance Sheet Highlights

    Total assets at September 30, 2022 were $1.84 billion versus $1.48 billion at September 30, 2021. Total deposits at September 30, 2022 increased to $1.53 billion compared to $1.16 billion at September 30, 2021, the result of growth in core deposits (Demand, N.O.W., Savings and Money Market) of $402.2 million (51.1%) from September 30, 2021.

    The Company had $416.9 million in total municipal deposits at September 30, 2022, at a weighted average rate of 1.19% versus $350.5 million at September 30, 2021. 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 significantly lower than both consumer deposits and market-based borrowings.

    Total borrowings at September 30, 2022 were $101.8 million with a weighted average rate and term of 2.29% and 11 months, respectively. At September 30, 2022, the Bank had $37.8 million of term FHLB advances outstanding versus $42.0 million at September 30, 2021. At September 30, 2022, the Company had $55.0 million in FHLB overnight borrowings outstanding at a rate of 3.29%. There were no overnight borrowings outstanding at September 30, 2021. The Company’s Paycheck Protection Program Liquidity Facility advances declined to $9.0 million at September 30, 2022, versus $117.7 million at the comparable 2021 date, as the Company’s PPP loans were forgiven or repaid. The Company also had $183.6 million in additional borrowing capacity from the FHLB at September 30, 2022, and $65 million in Federal funds lines of credit available from correspondent banks.

    Stockholders’ equity increased to $172.6 million at September 30, 2022 from $122.5 million at September 30, 2021, resulting in an increase in tangible book value per share over the past twelve months to $21.00 at September 30, 2022 from $18.49 at the comparable 2021 date. This increase was primarily due to a $27.7 million increase in common stock and surplus from the net proceeds from the public offering of our common stock in May 2022, coupled with net income earned during fiscal year 2022. Common shares outstanding were 7,285,648 and 5,563,426 at September 30, 2022, and 2021, respectively.

    Loan Portfolio Growth and Allowance for Loan Losses

    On a linked quarter basis, the Company exhibited net loan growth, excluding PPP loans, of $217.9 million, a 62.5% increase on an annualized basis. For the twelve months ended September 30, 2022, the Bank’s loan portfolio grew to $1.62 billion. Year over year growth was concentrated primarily in multi-family, commercial real estate and residential loans. At September 30, 2022, the Company’s residential loan portfolio (including home equity) amounted to $516.3 million, with an average loan balance of $484 thousand and a weighted average loan-to-value ratio of 56%. Commercial real estate and multifamily loans totaled $1.06 billion at September 30, 2022, with an average loan balance of $1.45 million and a weighted average loan-to-value ratio of 61%. The Company’s commercial real estate concentration ratio was 453% of capital at September 30, 2022 versus 355% of capital at September 30, 2021. At September 30, 2022, the Company’s loan pipeline was approximately $315 million.

    Historically, the Bank has generated additional income by strategically originating and selling its primary lending products to other financial institutions at premiums, while also retaining servicing rights in some sales. The Bank expects that it will continue to originate loans, for its own portfolio and for sale, which will result in continued growth in interest income while also realizing gains on sale of loans to others and recording servicing income. With respect to the Bank’s current residential growth strategy, management expects to originate more loans to retain in its portfolio as opposed to selling into the secondary market due to the continued projected increase in interest rates. Accordingly, we continue to expect a decrease in secondary market sales on a year-over-year basis in the current interest rate environment. During the quarter ended September 30, 2022, the Company sold $19.3 million in SBA loans and recorded gains on the sale of loans held-for-sale of $1.2 million. The Company recorded gains of $619 thousand on the sale of performing residential and SBA loans in the quarter ended September 30, 2021.

    During the third calendar quarter of 2022, the Bank recorded a provision for loan losses expense of $2.1 million. The September 30, 2022, allowance for loan losses balance was $12.8 million versus $8.6 million at September 30, 2021. The allowance for loan losses as a percent of total loans was 0.79% at September 30, 2022 versus 0.69% at September 30, 2021. The allowance for loan losses as a percent of total loans excluding acquired loans (“originated loans”) was 0.94% at September 30, 2022. At September 30, 2022, non-performing loans totaled $13.5 million of which $9.7 million represented legacy Savoy originated loans that were either written down to fair value at the acquisition date or are 100% guaranteed by the SBA. The remaining $3.8 million of non-performing loans represent primarily Hanover originated residential credits with a weighted average loan-to-value ratio of 55%.

    Net Interest Margin

    The Bank’s net interest margin was 4.04% during the third calendar quarter of 2022 versus 4.51% in the comparable 2021 quarter and 4.05% in the linked 2022 quarter. Excluding the impact of net purchase accounting accretion, the Company’s net interest margin was 3.93% and 3.76% in the quarters ended September 30, 2022, and 2021, respectively, and 3.94% in the linked 2022 quarter.

    Operating Efficiency Ratio

    The Bank’s operating efficiency ratio was 48.0% in the third calendar quarter of 2022 versus 44.6% a year ago. Excluding merger-related charges in each year, these ratios were 48.0% and 43.5%, respectively, in the quarters ended September 30, 2022, and 2021.

    Expansion into Suffolk County, Long Island

    The Company’s recently announced plans to expand its geographic footprint with the opening of an office at 410 Motor Parkway, Hauppauge, New York, continues to move forward. Hanover plans to build its lending and support teams in Hauppauge with local banking talent and operate a full-service, high-tech branch. Lending and support staff have already joined the Company in anticipation of the opening of this flagship location. The Bank expects this site to be fully operational in late first calendar quarter of 2023.

    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 businessmen and women 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, 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 net interest margin, 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, adjusted net interest income, adjusted net interest margin, 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.

    HANOVER BANCORP, INC.     
    STATEMENTS OF CONDITION (unaudited)     
    (dollars in thousands)     
           
           
      September 30, June 30, September 30,
      2022 2022 2021
    Assets      
    Cash and cash equivalents$149,947  $133,974  $166,544 
    Securities-available for sale, at fair value 12,285   6,740   7,747 
    Investments-held to maturity 4,414   4,509   8,611 
           
    Loans, net of deferred loan fees and costs 1,623,531   1,415,777   1,247,125 
    Less: allowance for loan losses (12,844)  (10,886)  (8,552)
    Loans, net 1,610,687   1,404,891   1,238,573 
           
    Goodwill  19,168   19,168   19,168 
    Premises & fixed assets 14,462   14,691   15,003 
    Other assets 29,095   25,784   28,995 
     Assets$1,840,058  $1,609,757  $1,484,641 
           
    Liabilities and stockholders' equity     
    Core deposits$1,189,033  $1,051,277  $786,826 
    Time deposits 339,073   298,272   377,836 
    Total deposits 1,528,106   1,349,549   1,164,662 
           
    Borrowings 101,752   56,963   159,642 
    Subordinated debentures 24,568   24,554   24,513 
    Other liabilities 13,048   11,300   13,295 
     Liabilities 1,667,474   1,442,366   1,362,112 
           
    Stockholders' equity 172,584   167,391   122,529 
     Liabilities and stockholders' equity$1,840,058  $1,609,757  $1,484,641 
           


    HANOVER BANCORP, INC.       
    CONSOLIDATED STATEMENTS OF INCOME (unaudited)      
    (dollars in thousands, except per share data)       
             
      Three Months Ended Fiscal Year Ended
      9/30/2022 9/30/2021 9/30/2022 9/30/2021
             
    Interest income$19,613 $17,760 $68,429 $48,675
    Interest expense 3,191  1,629  7,175  6,967
     Net interest income 16,422  16,131  61,254  41,708
    Provision for loan losses 2,050  700  4,450  1,000
     Net interest income after provision for loan losses 14,372  15,431  56,804  40,708
             
    Loan servicing and fee income 681  584  2,885  1,207
    Service charges on deposit accounts 63  61  232  127
    Gain on sale of loans held-for-sale 1,227  619  5,143  1,307
    Gain on sale of investments -  -  105  240
    Other operating income 24  457  507  468
     Non-interest income 1,995  1,721  8,872  3,349
             
    Compensation and benefits 4,265  4,463  19,665  14,761
    Occupancy and equipment 1,457  1,298  5,633  4,978
    Data processing 496  346  1,629  1,280
    Marketing and advertising 50  33  348  118
    Acquisition costs -  197  250  4,430
    Professional fees 850  616  2,568  1,706
    Other operating expenses 1,713  1,005  5,088  2,732
     Non-interest expense 8,831  7,958  35,181  30,005
             
     Income before income taxes 7,536  9,194  30,495  14,052
    Income tax expense 1,712  2,138  6,939  3,201
             
     Net income$5,824 $7,056 $23,556 $10,851
             
    Earnings per common share ("EPS"):       
    Basic$0.80 $1.27 $3.74 $2.32
    Diluted$0.79 $1.25 $3.68 $2.28
             
    Average common shares outstanding for basic EPS 7,287,622  5,559,818  6,302,328  4,669,009
    Average common shares outstanding for diluted EPS 7,380,638  5,649,048  6,395,305  4,758,669
             
    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
      9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021
               
    Interest income$19,613 $16,259 $15,941 $16,616 $17,760
    Interest expense 3,191  1,439  1,197  1,347  1,629
     Net interest income 16,422  14,820  14,744  15,269  16,131
    Provision for loan losses 2,050  1,000  500  900  700
     Net interest income after provision for loan losses 14,372  13,820  14,244  14,369  15,431
               
    Loan servicing and fee income 681  779  734  690  584
    Service charges on deposit accounts 63  60  46  63  61
    Gain on sale of loans held-for-sale 1,227  849  1,575  1,492  619
    Gain on sale of investments -  -  105  -  -
    Other operating income 24  140  212  130  457
     Non-interest income 1,995  1,828  2,672  2,375  1,721
               
    Compensation and benefits 4,265  4,843  5,618  4,939  4,463
    Occupancy and equipment 1,457  1,394  1,370  1,413  1,298
    Data processing 496  374  392  366  346
    Marketing and advertising 50  112  153  33  33
    Acquisition costs -  250  -  -  197
    Professional fees 850  579  640  499  616
    Other operating expenses 1,713  1,178  1,184  1,014  1,005
     Non-interest expense 8,831  8,730  9,357  8,264  7,958
               
     Income before income taxes 7,536  6,918  7,559  8,480  9,194
    Income tax expense 1,712  1,585  1,699  1,943  2,138
               
     Net income$5,824 $5,333 $5,860 $6,537 $7,056
               
    Earnings per common share ("EPS"):         
    Basic$0.80 $0.81 $1.02 $1.18 $1.27
    Diluted$0.79 $0.80 $1.00 $1.16 $1.25
               
    Average common shares outstanding for basic EPS 7,287,622  6,596,505  5,753,513  5,562,939  5,559,818
    Average common shares outstanding for diluted EPS 7,380,638  6,695,567  5,849,842  5,658,428  5,649,048
               
    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 Fiscal Year Ended
     9/30/2022 9/30/2021 9/30/2022 9/30/2021
            
    ADJUSTED NET INCOME:       
    Net income, as reported$5,824  $7,056  $23,556  $10,851 
    Adjustments:       
    Merger-related expenses -   197   250   4,430 
    Debt extinguishment charges -   -   -   54 
    Total adjustments, before income taxes -   197   250   4,484 
    Adjustment for reported effective income tax rate -   46   53   978 
    Total adjustments, after income taxes -   151   197   3,506 
    Adjusted net income$5,824  $7,207  $23,753  $14,357 
    Basic earnings per share - adjusted$0.80  $1.30  $3.77  $3.07 
    Diluted earnings per share - adjusted$0.79  $1.28  $3.71  $3.02 
            
    ADJUSTED NET INTEREST INCOME:       
    Net interest income, as reported$16,422  $16,131  $61,254  $41,708 
    Adjustments:       
    Debt extinguishment charges -   -   -   54 
    Adjusted net interest income$16,422  $16,131  $61,254  $41,762 
            
    ADJUSTED NET INTEREST MARGIN:       
    Net interest margin, as reported 4.04%  4.51%  4.18%  3.97%
    Adjustments:       
    Debt extinguishment charges -   -   -   0.01%
    Adjusted net interest margin 4.04%  4.51%  4.18%  3.98%
            
    ADJUSTED OPERATING EFFICIENCY RATIO(2):        
    Operating efficiency ratio, as reported 47.95%  44.58%  50.25%  66.95%
    Adjustments:       
    Merger-related expenses 0.00%  -1.10%  -0.36%  -9.87%
    Debt extinguishment charges -   -   -   -0.08%
    Adjusted operating efficiency ratio 47.95%  43.48%  49.89%  57.00%
            
    ADJUSTED RETURN ON AVERAGE ASSETS 1.39%  1.92%  1.56%  1.31%
    ADJUSTED RETURN ON AVERAGE EQUITY 13.45%  23.95%  16.27%  15.26%
            
    (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) Excludes gain on sale of securities available for sale.


    HANOVER BANCORP, INC.       
    SELECTED FINANCIAL DATA (unaudited)      
    (dollars in thousands)       
            
            
     Three Months Ended Fiscal Year Ended
     9/30/2022 9/30/2021 9/30/2022 9/30/2021
    Profitability:       
    Return on average assets 1.39%  1.88%  1.55%  0.99%
    Return on average equity 13.45%  23.45%  16.14%  11.53%
    Return on average tangible equity 15.18%  27.76%  18.64%  12.56%
    Pre-provision net revenue to average assets 2.28%  2.64%  2.30%  1.38%
    Yield on average interest-earning assets 4.82%  4.97%  4.66%  4.63%
    Cost of average interest-bearing liabilities 1.01%  0.55%  0.62%  0.81%
    Net interest rate spread (1) 3.81%  4.42%  4.04%  3.82%
    Net interest margin (2) 4.04%  4.51%  4.18%  3.97%
    Non-interest expense to average assets 2.10%  2.12%  2.31%  2.75%
    Operating efficiency ratio (3) 47.95%  44.58%  50.25%  66.95%
            
    Average balances:       
    Interest-earning assets$1,613,481  $1,419,148  $1,467,079  $1,050,259 
    Interest-bearing liabilities 1,257,504   1,174,266   1,157,387   859,803 
    Loans 1,523,936   1,277,091   1,344,369   934,066 
    Deposits 1,407,629   1,128,956   1,256,976   843,009 
    Borrowings 74,725   225,929   106,895   145,334 
            
            
    (1) Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
    (2) Represents net interest income divided by average interest-earning assets.    
    (3) 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
     9/30/2022 6/30/2022 3/31/2022 12/31/2021
    Asset quality:       
    Provision for loan losses$2,050  $1,000  $500  $900 
    Net (charge-offs)/recoveries (92)  -   -   (66)
    Allowance for loan losses 12,844   10,886   9,886   9,386 
    Allowance for loan losses to total loans (1) 0.79%  0.77%  0.77%  0.73%
    Allowance for loan losses to originated loans (1)(5) 0.94%  1.00%  1.04%  1.08%
    Non-performing loans (2)(3)(4)$13,512  $13,729  $11,953  $8,616 
    Non-performing loans/total loans 0.83%  0.97%  0.93%  0.67%
    Non-performing loans/total assets 0.73%  0.85%  0.81%  0.59%
    Allowance for loan losses/non-performing loans 95.06%  79.29%  82.71%  108.94%
            
    Capital (Bank only):       
    Tier 1 Capital$178,340  $171,753  $139,959  $132,006 
    Tier 1 leverage ratio 10.90%  11.64%  10.06%  9.92%
    Common equity tier 1 capital ratio 15.21%  16.27%  14.76%  14.44%
    Tier 1 risk based capital ratio 15.21%  16.27%  14.76%  14.44%
    Total risk based capital ratio 16.32%  17.32%  15.85%  15.52%
            
    Equity data:       
    Common shares outstanding 7,285,648   7,296,624   5,829,569   5,562,799 
    Stockholders' equity$172,584  $167,391  $134,768  $129,379 
    Book value per common share 23.69   22.94   23.12   23.26 
    Tangible common equity 153,017   147,805   115,162   109,752 
    Tangible book value per common share 21.00   20.26   19.75   19.73 
    Tangible common equity ("TCE") ratio 8.41%  9.29%  7.90%  7.63%
            
    (1) Calculation excludes loans held for sale.       
    (2) 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 9/30/22 and 6/30/22.
    (3) Includes $1.5 million of Purchased Credit Impaired loans 90 days past due and still accruing and $0.5 million of loans fully guaranteed by the SBA at 3/31/22.
    (4) Includes $2.5 million of Purchased Credit Impaired loans 90 days past due and still accruing and $0.5 million of loans fully guaranteed by the SBA at 12/31/21.
    (5) Calculation excludes acquired loans.       
            
    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)      
            
     9/30/2022 6/30/2022 3/31/2022 12/31/2021
            
    Loan distribution (1):       
    Residential mortgages$488,692  $407,328  $400,686  $411,664 
    Multifamily 575,061   479,366   389,262   358,831 
    Commercial real estate 485,891   447,618   402,780   372,282 
    Commercial & industrial 46,285   56,932   72,501   109,718 
    Home equity 27,566   24,520   23,810   24,908 
    Consumer 36   13   2   31 
            
      Total loans$ 1,623,531  $ 1,415,777$ 1,289,041  $ 1,277,434 
            
    Sequential quarter growth rate 14.67%  9.83%  0.91%  2.43%
            
    Loans sold during the quarter$19,342  $9,490  $16,233  $35,212 
            
    Funding distribution:       
    Demand$219,225  $220,357  $197,118  $190,723 
    N.O.W. 582,457   542,391   508,841   437,920 
    Savings 128,927   104,826   65,530   58,526 
    Money market 258,424   183,703   172,506   162,699 
    Total core deposits 1,189,033   1,051,277   943,995   849,868 
    Time 339,073   298,272   286,247   326,883 
    Total deposits 1,528,106   1,349,549   1,230,242   1,176,751 
    Borrowings 101,752   56,963   75,823   113,274 
    Subordinated debentures 24,568   24,554   24,541   24,504 
            
      Total funding sources$ 1,654,426  $ 1,431,066  $ 1,330,606  $ 1,314,529 
            
    Sequential quarter growth rate - total deposits 13.23%  9.70%  4.55%  1.04%
            
    Period-end core deposits/total deposits ratio 77.81%  77.90%  76.73%  72.22%
            
    Period-end demand deposits/total deposits ratio 14.35%  16.33%  16.02%  16.21%
            
    (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)      
              
              
     9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021
    Tangible common equity         
    Total equity$172,584  $167,391  $134,768  $129,379  $122,529 
    Less: goodwill (19,168)  (19,168)  (19,168)  (19,168)  (19,168)
    Less: core deposit intangible (399)  (418)  (438)  (459)  (480)
    Tangible common equity$153,017  $147,805  $115,162  $109,752  $102,881 
              
    Tangible common equity ("TCE") ratio        
    Tangible common equity$153,017  $147,805  $115,162  $109,752  $102,881 
    Total assets 1,840,058   1,609,757   1,476,681   1,458,180   1,484,641 
    Less: goodwill (19,168)  (19,168)  (19,168)  (19,168)  (19,168)
    Less: core deposit intangible (399)  (418)  (438)  (459)  (480)
    Tangible assets$1,820,491  $1,590,171  $1,457,075  $1,438,553  $1,464,993 
    TCE ratio 8.41%  9.29%  7.90%  7.63%  7.02%
              
    Tangible book value per share         
    Tangible common equity$153,017  $147,805  $115,162  $109,752  $102,881 
    Common shares outstanding 7,285,648   7,296,624   5,829,569   5,562,799   5,563,426 
    Tangible book value per share$21.00  $20.26  $19.75  $19.73  $18.49 
              
    (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.
              


    HANOVER BANCORP, INC.           
    NET INTEREST INCOME ANALYSIS           
    For the Three Months Ended September 30, 2022 and 2021         
    (unaudited, dollars in thousands)           
                
                
     2022 2021
     Average   AverageAverage   Average
     Balance Interest Rate Balance Interest Rate
                
    Assets:           
    Interest-earning assets:           
    Loans$1,523,936 $19,033 4.96% $1,277,091 $17,496 5.44%
    Investment securities 13,171  126 3.80%  16,526  162 3.89%
    Interest-earning cash 72,136  386 2.12%  120,080  47 0.16%
    FHLB stock and other investments 4,238  68 6.37%  5,451  55 4.00%
    Total interest-earning assets 1,613,481  19,613 4.82%  1,419,148  17,760 4.97%
    Non interest-earning assets:           
    Cash and due from banks 9,945      18,494    
    Other assets 43,421      49,718    
    Total assets$1,666,847     $1,487,360    
                
    Liabilities and stockholders' equity:           
    Interest-bearing liabilities:           
    Savings, N.O.W. and money market deposits$863,551 $1,876 0.86% $523,257 $360 0.27%
    Time deposits 319,228  889 1.10%  425,080  693 0.65%
    Total savings and time deposits 1,182,779  2,765 0.93%  948,337  1,053 0.44%
    Borrowings 50,165  92 0.73%  201,425  249 0.49%
    Subordinated debentures 24,560  334 5.40%  24,504  327 5.29%
    Total interest-bearing liabilities 1,257,504  3,191 1.01%  1,174,266  1,629 0.55%
    Demand deposits 224,850      180,619    
    Other liabilities 12,730      13,096    
    Total liabilities 1,495,084      1,367,981    
    Stockholders' equity 171,763      119,379    
    Total liabilities & stockholders' equity$1,666,847     $1,487,360    
    Net interest rate spread    3.81%     4.42%
    Net interest income/margin  $ 16,422 4.04%   $ 16,131 4.51%
                


    HANOVER BANCORP, INC.           
    NET INTEREST INCOME ANALYSIS           
    For the Fiscal Years Ended September 30, 2022 and 2021          
    (unaudited, dollars in thousands)           
                
                
     2022 2021
     Average   AverageAverage   Average
     Balance Interest Rate Balance Interest Rate
                
    Assets:           
    Interest-earning assets:           
    Loans$1,344,369 $67,005 4.98% $934,066 $47,685 5.11%
    Investment securities 12,788  484 3.78%  16,845  685 4.07%
    Interest-earning cash 105,474  742 0.70%  94,869  111 0.12%
    FHLB stock and other investments 4,448  198 4.45%  4,479  194 4.33%
    Total interest-earning assets 1,467,079  68,429 4.66%  1,050,259  48,675 4.63%
    Non interest-earning assets:           
    Cash and due from banks 9,164      9,674    
    Other assets 46,131      33,001    
    Total assets$1,522,374     $1,092,934    
                
    Liabilities and stockholders' equity:           
    Interest-bearing liabilities:           
    Savings, N.O.W. and money market deposits$737,057 $3,166 0.43% $333,996 $903 0.27%
    Time deposits 313,435  2,209 0.70%  380,473  3,822 1.00%
    Total savings and time deposits 1,050,492  5,375 0.51%  714,469  4,725 0.66%
    Borrowings 82,362  469 0.57%  121,246  955 0.79%
    Subordinated debentures 24,533  1,331 5.43%  24,088  1,287 5.34%
    Total interest-bearing liabilities 1,157,387  7,175 0.62%  859,803  6,967 0.81%
    Demand deposits 206,484      128,540    
    Other liabilities 12,526      10,519    
    Total liabilities 1,376,397      998,862    
    Stockholders' equity 145,977      94,072    
    Total liabilities & stockholders' equity$1,522,374     $1,092,934    
    Net interest rate spread    4.04%     3.82%
    Net interest income/margin  $ 61,254 4.18%   $ 41,708 3.97%
                

    Investor and Press Contacts:
    Brian K. Finneran
    President

    Lance P. Burke
    Chief Financial Officer
    (516) 548-8500


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