1. 29. 2025

Hanover Bancorp, Inc. Reports 2024 Full Year and Fourth Quarter Results Highlighted by Fourth Quarter Robust Margin Expansion and Record Non-Interest Income

Fourth Quarter Performance Highlights:

Net Income: Net income for the quarter ended December 31, 2024 totaled $3.9 million or $0.52 per diluted share (including Series A preferred shares).
Record Non-interest Income: The Company reported record non-interest income of $4.2 million for the quarter ended December 31, 2024, an increase of $0.2 million or 5.89% from the quarter ended September 30, 2024 and $0.9 million or 28.67% from the quarter ended December 31, 2023.
Net Interest Income: Net interest income was $13.8 million for the quarter ended December 31, 2024, an increase of $0.7 million or 5.39% from the quarter ended September 30, 2024 and $1.1million, or 9.08% from the quarter ended December 31, 2023.
Net Interest Margin: The Company’s net interest margin during the quarter ended December 31, 2024 increased to 2.53% from 2.37% in the quarter ended September 30, 2024 and 2.40% in the quarter ended December 31, 2023.
Strong Liquidity Position: At December 31, 2024, undrawn liquidity sources, which include cash and unencumbered securities and secured and unsecured funding capacity, totaled $713.1 million, or approximately 283% of uninsured deposit balances.
Deposit Activity: Core deposits, consisting of Demand, NOW, Savings and Money Market, increased $3.1 million or 0.84% annualized from September 30, 2024 and $74.1 million or 5.36% from December 31, 2023. Demand deposits increased $5.3 million or 10.33% annualized from September 30, 2024 and $3.9 million or 1.86% from December 31, 2023. Total deposits increased $49.7 million or 2.61% from December 31, 2023. Insured and collateralized deposits, which include municipal deposits, accounted for approximately 87% of total deposits at December 31, 2024.
Loan Diversification Strategy: The continued success in loan diversification resulted in C&I loans increasing by $61.0 million, or 56.52%, year over year, increasing to 8.51% of total loans at December 31, 2024. In addition, the commercial real estate concentration ratio improved, declining from 432% of capital at December 31, 2023 to 385% of capital at December 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, which strategically enhances our management of liquidity and capital while producing additional non- interest income.
Asset Quality: At December 31, 2024, the Bank’s asset quality remained solid with non-performing loans totaling $16.4 million, representing 0.82% of the total loan portfolio, while the allowance for credit losses was 1.15% of total loans. Loans secured by office space accounted for 2.45% of the total loan portfolio with a total balance of $48.7 million, of which less than 1% is located in Manhattan.
Banking Initiatives: At December 31, 2024, the Company’s banking initiatives reflected continuing momentum:
- BA & USDA Banking: Gains on sale of SBA loans totaled $2.5 million for the quarter ended December 31, 2024, representing a 9.76% increase over the comparable 2023 quarter. Total SBA loans sold were $30.9 million for the quarter ended December 31, 2024, representing a 3.98% increase over the comparable 2023 quarter. Premiums earned on the sale of SBA loans increased to 9.06% for the quarter ended December 31, 2024 from 8.26% for the quarter ended December 31, 2023.
- C&I Banking/Hauppauge Business Banking Center: The C&I Banking Team and the Hauppauge Business Banking Center increased deposits to $96.4 million as of December 31, 2024 from $44.9 million at December 31, 2023. This growth has continued since year end, with these deposits reaching $104 million at January 27, 2025. Loan originations tied to this office were $33.5 million during the fourth quarter of 2024 and $88.4 million for the full year. Momentum continues to build with deposit and C&I loan pipelines related to this office of $43 million and $112 million, respectively.
- Residential Lending: The Bank continues to originate loans for its portfolio and for sale in the secondary market under its recently developed flow origination program. Of the $26.1 million in closed loans originated in the quarter ended December 31, 2024, $11.7 million were originated for the Bank’s portfolio and reflected a weighted average yield of 6.88% before origination and other fees, which average 50-100 bps per loan, and a weighted average LTV of 62%. The remaining $14.4 million of closed loans were originated for sale in the secondary market. Under this program, the Bank produced total gains of $0.5 million and a resulting premium of 2.42% in the fourth quarter of 2024.
Technology: The Company expects to complete a core processing system conversion from its existing provider to FIS Horizon on or about February 15, 2025. This conversion is expected to deliver immediate and tangible benefits to the Bank’s operations and customers, offering material improvements in user interfaces, functionality and efficiency that will better support our commitment to a digital forward future on better financial terms.
Tangible Book Value Per Share: Tangible book value per share (including Series A preferred shares) was $23.86 at December 31, 2024, an increase of 9.97% annualized from $23.28 at September 30, 2024 and 6.00% from $22.51 at December 31, 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 February 19, 2025 to stockholders of record on February 12, 2025.