Mineola, NY – August 2, 2024 - Michael P. Puorro, Chairman and Chief Executive Officer
of Hanover Bancorp, Inc. the bank holding company for Hanover Community Bank, today
announced grants to seventeen local not-for-profit organizations as a part of the Federal
Home Loan Bank of New York’s (FHLBNY) Small Business Recovery Grant Program.

Mr. Puorro stated “These organizations are the very heartbeat of the communities we serve,
and we are thrilled that this money will help them in fulfilling their mission. We are
simultaneously so grateful to the Federal Home Loan Bank of New York and their Small
Business Recovery Grant Program for providing these much-needed funds to so many not for-
profit entities that have been adversely affected by the current economic environment.”

The Small Business Recovery Grant Program provides flexible funds to benefit small businesses
and non-profits located in FHLBNY members’ communities. This program
supports the financial security of qualifying organizations that face economic challenges due
to the rate environment, inflation, supply-chain constraints, and/or rising energy costs by
partnering with members to provide grants.

Hanover Bank has participated in this FHLBNY program in the past and we are so grateful to
be partnering with them once again to provide these truly needed funds to seventeen
worthwhile entities. “We are so proud to support these incredible organizations not only
through this grant program but by having many of our team members give their time, talent
and energy to these worthy causes,” concluded Michael P. Puorro.

About Hanover Community Bank and Hanover Bancorp, Inc.

Hanover Bancorp, Inc. (NASDAQ: HNVR), is the bank holding company for Hanover
Community Bank, a commercial community 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 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 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 https://hanoverbank.com.

Second Quarter Performance Highlights

• Net Income: Net income for the quarter ended June 30, 2024 totaled $0.8 million (after giving effect to an allowance for credit loss (“ACL”) on an individually evaluated loan of $2.5 million and a $1.1 million provision resulting from ongoing enhancements to the current expected credit loss (“CECL”) model) or $0.11 per diluted share (including Series A preferred shares), versus $4.1 million or $0.55 per diluted share (including Series A preferred shares) in the prior linked quarter and $3.1 million or $0.42 per diluted share (including Series A preferred shares) in the comparable 2023 quarter.

• Net Interest Income: Net interest income was $13.2 million for the quarter ended June 30, 2024, an increase of $0.3 million, or 2.4% from the prior linked quarter and a decrease of $0.3 million, or 1.9% from the June 30, 2023 quarter.

• Net Interest Margin: The Company’s net interest margin during the quarter ended June 30, 2024 increased to 2.46% from 2.41% in the quarter ended March 31, 2024.

• Strong Non-interest Income: The Company’s non-interest income increased $0.1 million or 1.3% from the quarter ended March 31, 2024 and $1.6 million or 83.5% from the quarter ended June 30, 2023. This quarter’s non-interest income was a record for the Company when considering continuing revenues. Although non-interest income was higher for the quarter ended September 30, 2023, those results included income from a litigation settlement.

• Strong Liquidity Position: At June 30, 2024, undrawn liquidity sources, which include cash and unencumbered securities and secured and unsecured funding capacity, totaled $648.2 million or approximately 254% of uninsured deposit balances.

• Deposit Activity: Core deposits, consisting of Demand, NOW, Savings and Money Market, increased $95.4 million or 6.9% from December 31, 2023 and $24.8 million or 1.7% from March 31, 2024. Total deposits increased $37.3 million or 2.0% from December 31, 2023 and $24.7 million or 1.3% from March 31, 2024. Insured and collateralized deposits, which include municipal deposits, accounted for approximately 87% of total deposits at June 30, 2024.

• Loan Growth: Loans totaled $2.01 billion, a net increase of $7.4 million, or 1.5% annualized, from March 31, 2024, and $55.8 million or 5.7%, annualized from December 31, 2023. The Company’s commercial real estate concentration ratio continued to improve, decreasing to 403% of capital at June 30, 2024 from 432% of capital at December 31, 2023. Current and future loan growth will primarily be in residential loan products originated for sale to specific buyers in the secondary market, C&I and SBA loans, which strategically enhances our management of liquidity and capital while producing additional non-interest income.

• Asset Quality: At June 30, 2024, the Bank’s asset quality remained solid with non-performing loans totaling $15.8 million, representing 0.79% of the total loan portfolio, and the allowance for credit losses equaling 1.17% of total loans. Loans secured by office space accounted for approximately 2.3% of the total loan portfolio with a total balance of $46.2 million, of which less than 1% is located in Manhattan. During July, non-performing loans decreased $1.2 million to $14.6 million as a result of the full payoff of a residential investor loan.

• Banking Initiatives: At June 30, 2024, the Company’s banking initiatives reflected continuing momentum:

o SBA & USDA Banking: Gains on sale of SBA loans totaled $2.5 million for the quarter ended June 30, 2024, representing a 139% increase over the comparable 2023 quarter. Total SBA loans sold were $28.0 million for the quarter ended June 30, 2024, representing a 122% increase over the comparable 2023 quarter. Premiums earned on the sale of SBA loans continued to increase during the current quarter to 9.80% from 9.56% in the linked quarter and 8.72% for the quarter ended June 30, 2023.

o C&I Banking/Hauppauge Business Banking Center: Having recently marked its one-year anniversary, the Hauppauge Business Banking Center hit $73 million in deposits in the first year of operations. Loan originations tied to this office were $30 million during the quarter. Momentum continues to build with deposit and C&I loan pipelines related to this office of $59 million and $106 million, respectively.

o Residential Lending: The Bank continues to originate loans for its portfolio while developing the flow origination program launched in late 2023. Of the $24.2 million in closed loans originated in the quarter ended June 30, 2024, $21.2 million were originated for its portfolio and reflected a weighted average yield of 7.62% before origination and other fees, which average 50-100 bps per loan, and a weighted average LTV of 60%.

• Tangible Book Value Per Share: Tangible book value per share (including Series A preferred shares) was $23.05 at June 30, 2024 compared to $22.51 at December 31, 2023 (inclusive of a one-time CECL implementation adjustment of $3.2 million, net of tax, or $0.43 per share, recorded on October 1, 2023) and $22.26 at June 30, 2023.

• 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 14, 2024 to stockholders of record on August 7, 2024.

• Further Expansion into Long Island Markets: The Company will once again be expanding its geographic footprint with the opening of a full-service branch in Port Jefferson, New York. Business development staff have already joined the Company in anticipation of the opening of this location. Subject to regulatory approvals, the Bank expects this site to be fully operational in the fourth quarter of 2024.

Read full report here

Long Island Business News announced that our very own Michael Puorro is among their 2024 Executive Circle Awards Winners!

"The Executive Circle Awards celebrate C-suites, directors and other senior-level executives who consistently demonstrate leadership skills, integrity, values, vision, commitment to excellence, company performance, community service and diversity. The honorees were selected by the editorial staff of Long Island Business News."

Click here to read the full post.