Performance Highlights

  • Record Earnings: Net income for the quarter ended March 31, 2018 improved by 157.2% to a record $1.4 million or $0.42 per diluted common share, versus $554 thousand or $0.20 per diluted common share recorded in the comparable 2017 period. The Company recorded net income for the six months ended March 31, 2018 of $1.3 million or $0.42 per diluted common share, representing a 26.1% increase from 2017.  Core operating net income for the six months ended March 31, 2018, which excludes the impact of non-recurring deferred tax asset and debt restructuring charges recorded during the fourth quarter of 2017, was $2.3 million or $0.70 per diluted common share, a 113.3% improvement over the prior year period.
  • Balance Sheet Growth: Assets totaled $566.1 million at March 31, 2018, up $24.9 million, or 4.6%, from December 31, 2017 and up $153.4 million, or 37.2%, from March 31, 2017 due to continued strong loan growth.
  • Continued Capital Strength: The Bank’s Tier 1 capital ratio was 10.82% and its Total Risk-Weighted Capital Ratio was 20.01% at March 31, 2018, each significantly above the regulatory minimums for a well-capitalized institution.
  • Robust Year-over-Year Loan Growth: Total loans outstanding at March 31, 2018, were $499.8 million or 88.3% of total assets, an increase of $25.1 million, or 5.3%, from December 31, 2017 and up $159.3 million or 46.8%, from March 31, 2017 as the Bank continues to successfully leverage its capital into prudent loan originations.  For the quarter ended March 31, 2018, loan originations were $56.8 million, an increase of 19.3% over the prior year quarter.
  • Excellent Asset Quality: At March 31, 2018, the Bank’s asset quality remained pristine and class leading among all financial institutions as the loan portfolio, for the thirteenth consecutive quarter, possessed no non-performing loans.
  • Net Interest Income Growth: Net interest income grew to a record $4.3 million for the quarter ended March 31, 2018, an increase of $1.3 million, or 43.9%, from the comparable 2017 quarter.
  • Strong Core Net Interest Margin: The Company’s core net interest margin for the quarter ended March 31, 2018 was 3.30% versus 3.35% in the quarter ended December 30, 2017 and 3.22% in the quarter ended March 31, 2017.
  • New Branch Locations:  The Company has received all required regulatory approvals to open a new branch in Flushing, Queens, N.Y., which is expected to open during this upcoming summer.  Management is currently identifying potential locations in Brooklyn for an additional branch in 2019.

MINEOLA, N.Y., April 16, 2018 (GLOBE NEWSWIRE) -- Hanover Bancorp, Inc. (“Hanover” or “the Company”), the holding company for Hanover Community Bank (“the Bank”) today reported significant performance achievements for the quarter ended March 31, 2018, highlighted by record net income, continued momentum in year-over-year loan growth, outstanding asset quality, and record net interest income.

Earnings Summary for the Quarter Ended March 31, 2018

The Company recorded record net income for the quarter ended March 31, 2018 of $1.4 million or $0.42 per diluted common share, versus $554 thousand or $0.20 per diluted common share in the comparable 2017 quarter, which represents an increase of $871 thousand, or 157.2%.

The significant improvement in net income achieved in the quarter ended March 31, 2018 resulted principally from a $1.3 million or 43.9% increase in net interest income versus the comparable 2017 period.  A strong year-over-year increase in average interest-earning assets (up $153.8 million or 40.5%) resulting from robust growth in average total loans of $151.8 million or 45.3%, coupled with an eight basis point widening of the net interest margin to 3.30% in the first quarter of 2018, accounted for the improvement in net interest income. An increase in non-interest income of $528 thousand or 220.9%, resulting from significant growth in gains on the sale of loans held-for-sale, and a lower effective tax rate in 2018, also contributed to the increase in earnings. Partially offsetting the foregoing improvements were increases in non-interest expenses (up $846 thousand) and the provision for loan losses (up $25 thousand).  The increase in non-interest expenses resulted principally from growth in compensation and benefits, occupancy and equipment and professional fees in connection with an increase in staff to support ongoing growth and operations, additional branch locations and risk and compliance costs.

Earnings Summary for the Six Months Ended March 31, 2018

For the six months ended March 31, 2018, the Company reported GAAP net income of $1.3 million or $0.42 per diluted common share versus $1.1 million or $0.39 per diluted common share a year ago. Excluding non-recurring deferred tax asset and debt restructuring charges totaling $931 thousand, the Company reported record core operating net income of $2.3 million in the six months ended March 31, 2018, an increase of 113.3% from $1.1 million in the prior year period. Core operating earnings per diluted common share were $0.70 in 2018 versus $0.39 in 2017.

The increase in core operating earnings in 2018 was due to significant improvements in net interest income (up $2.8 million) and noninterest income (up $585 thousand) coupled with a lower effective tax rate in 2018 (28.7% versus 36.9% a year ago).  Partially offsetting the foregoing positive factors were higher operating expenses (up $1.5 million) and an increase in the provision for loan losses (up $350 thousand) in 2018.

Michael P. Puorro, Chairman, President and Chief Executive Officer, commented on the Company’s results, “Over the past year we have achieved asset growth exceeding $153 million and we continue to expand our ability to generate non-interest income which has led to another quarter of record earnings and net interest income.  In the past year, we have been able to achieve a 157.2% increase in net income and a corresponding increase of 110.0% in earnings per common share while we continue to invest in the Company’s future through talent acquisition, franchise building and the recent opening of our new corporate administrative office in Mineola.  Further, we have achieved year-over-year net interest income growth of 43.9%, loan growth of 46.8% and deposit growth of 30.6%.  As we remain steadfastly selective in our loan underwriting, our growth story continues to be highlighted by industry leading asset quality.  At March 31, 2018, for the thirteenth consecutive quarter, our loan portfolio had no non-performing loans.  We believe that our growth outlook remains robust as evidenced by our most recent quarter-end originations of $56.8 million and our current loan pipeline of $69.7 million.  In addition, we are pleased to report that the Company expects to open our fourth branch in Flushing, Queens, N.Y. this summer and we are currently identifying a potential additional location in Brooklyn, N.Y.

Mr. Puorro further noted, “Our ability to generate shareholder value is reflected by our success to date in each capital raising effort at successively higher stock prices coupled with robust growth in book value per share which increased by $1.22, or 9.6%, to $13.91 per share at March 31, 2018 from the comparable 2017 date. We achieved these results while maintaining a core operating efficiency ratio that is also class-leading amongst peers our size.”

Strong Balance Sheet Growth

Total assets for the quarter ended March 31, 2018 amounted to $566.1 million, an increase of $153.4 million from the comparable 2017 date as the Bank continued to expand its loan portfolio (up $159.3 million) without sacrificing asset quality. The year-over-year balance sheet growth was funded by increases in total deposits (up $95.3 million), borrowings (up $39.8 million) and shareholders’ equity (up $11.9 million).

Total deposits at March 31, 2018 grew by 30.6% to $406.9 million, an increase of $95.3 million versus March 31, 2017, the result of an increase in time certificates of deposit of $122.2 million. Management remains pro-active in securing longer-term certificates of deposit and Federal Home Loan Bank of New York (“FHLB”) advances to fund loan growth at prevailing favorable rates in the early to middle stages of a sustained rising rate environment. Management has been successful in expanding its FHLB borrowing capacity which is strategically utilized to enhance both the Bank’s liquidity position and its interest rate risk profile by providing the flexibility to borrow from the FHLB for terms of two to four years. When prudent to do so, the Bank will be pro-active in securing longer-term advances from the FHLB at favorable rates as management believes it will better protect and enhance future earnings during the anticipated rising interest rate cycle in the years ahead. This strategy is being used selectively to supplement management’s ongoing effort to build low cost core deposit balances through relationship banking at each of its branch locations. Total FHLB borrowings at March 31, 2018 were $94.7 million with a weighted average rate and term of 1.64% and 28 months, respectively. At March 31, 2018, the Bank had $33.0 million of additional borrowing capacity from the FHLB.

Shareholders’ equity grew by $11.9 million to $46.8 million at March 31, 2018 from $34.9 million at the comparable 2017 date resulting in a $1.22 or 9.6% increase in book value per share over the past twelve months to $13.91 at March 31, 2018.  The Company’s executive management team and Board of Directors remain focused on continued enhancement of shareholder value through prudent asset growth, effective expense management and the development of long-term customer relationships in its primary markets.  Insiders continue to make significant investments of their own capital into Hanover Bancorp, Inc. Such ownership investments represent approximately 27% of total shares outstanding at March 31, 2018.

The Company’s average cost of interest-bearing liabilities increased to 1.68% for the quarter ended March 31, 2018, from 1.42% a year ago and 1.63% on a linked quarter basis. This increase primarily relates to a combination of higher interest rates in 2018, intense competition for deposits in the Bank’s core geographic area and management’s strategic objective of obtaining longer term certificates of deposit funding in anticipation of even higher rates expected in the future.  Offsetting the 26 basis point increase in the Company’s average cost of interest-bearing deposits from the March 2017 quarter was a corresponding 31 basis point improvement in the average yield on interest-earning assets to 4.79% during the first quarter of 2018, primarily driven by higher loan yields and a change in the loan portfolio mix in 2018.

Strong Loan Portfolio and Industry Leading Asset Quality

For the twelve month period ended March 31, 2018, the Bank’s loan portfolio grew by $159.3 million, or 46.8%, with the growth concentrated primarily in adjustable-rate two-to-four family residential loans and multi-family loans. Management employs a strategy of concentrating its loan growth in these products with shorter durations, which provides the Bank with traditionally safe credit quality at acceptable credit spreads, greater liquidity and an enhanced interest-rate-risk profile. Over the past twelve months, originations of our niche adjustable-rate residential product amounted to $165.4 million with an average loan balance of approximately $523 thousand and a weighted average loan-to-value ratio of 56%. At March 31, 2018, the Company’s residential loan portfolio amounted to $309.4 million, with an average loan balance of $421 thousand and a weighted average loan-to-value ratio of 53%. During the same twelve month period, the Bank originated $51.2 million in commercial real estate loans, inclusive of multi-family loans, with an average loan balance of approximately $1.1 million and a weighted average loan-to-value ratio of 61%. Commercial real estate loans totaled $182.9 million at March 31, 2018, with an average loan balance of $941 thousand and a weighted average loan-to-value ratio of 58%. The Company’s commercial real estate concentration ratio was 275% at March 31, 2018 versus 350% at the comparable 2017 date.

Through its strong asset generation capabilities, the Bank has been able to generate additional income by strategically originating and selling its primary lending products to other financial institutions at premiums, while in certain transactions, also retaining servicing rights. 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. During the quarter ended March 31, 2018, gains on the sale of loans held-for-sale amounted to $665 thousand versus $370 thousand in the quarter ended December 31, 2017 and $168 thousand in the quarter ended March 31, 2017.

The Bank’s asset quality ratios remain pristine and class leading among its peer group of community banks. At March 31, 2018, the loan portfolio, for the thirteenth consecutive quarter, had no non-performing loans. During the quarter ended March 31, 2018, the Bank’s provision for loan losses was $250 thousand and the March 31, 2018 allowance for loan losses balance was $5.60 million versus $3.87 million a year ago. The Bank continues to record a quarterly provision for loan losses expense due to the ongoing growth in the loan portfolio. The allowance for loan losses as a percent of total loans was 1.12% at March 31, 2018 versus 1.14% at March 31, 2017. 

Net Interest Margin

The Bank’s core net interest margin remained strong for the quarter ended March 31, 2018 at 3.30% versus 3.22% in the comparable 2017 quarter and 3.35% in the quarter ended December 30, 2017. The eight basis point increase in the Bank’s net interest margin versus 2017 was primarily attributable to a 31 basis point increase in the yield on average interest-earning assets to 4.79% from 4.48% a year ago.  This improvement was largely the result of a 20 basis point increase in the average loan yield to 5.00% in 2018. The Company’s average cost of interest-bearing liabilities rose by 26 basis points to 1.68% in the first quarter of 2018 as the result of an increased reliance on non-core funding sources, principally time certificates of deposit and FHLB borrowings.

About Hanover Community Bank and Hanover Bancorp, Inc.

Hanover Bancorp, Inc., is a locally owned and operated privately held stock bank holding company for Hanover Community Bank, a community commercial bank focusing on highly personalized and efficient services and products responsive to local 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 modern financial services. Hanover employs a complete suite of consumer and commercial banking products and services, including multi-family and commercial mortgages, residential loans, business loans and lines of credit. Hanover also offers customers 24-hour ATM service with no fees attached, free checking with interest, telephone banking, the most advanced technologies in mobile and internet banking for our consumer and business customers, safe deposit boxes and much more. The Company recently moved its corporate administrative office to Mineola, New York where it operates a full service branch location along with branch locations in Garden City Park, N.Y. and Forest Hills, Queens, N.Y.

Hanover Community Bank is a member of the Federal Deposit Insurance Corporation and is an Equal Housing/Equal Opportunity Lender. For further information, call 516-248-4868 or visit the Bank’s website at www.hanovercommunitybank.com.

Non-GAAP Disclosure

This discussion includes non-GAAP financial measures of the Company’s core operating earnings, core net interest margin, core returns on average assets and shareholders’ equity, and core 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 provide 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.  While management uses these 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 GAAP or considered to be more important than financial results determined in accordance with 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 core operating net income, core net interest income, core net interest margin and core 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 Hanover Bancorp, Inc. might make or by known or unknown risks and uncertainties. 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.

Contact:
Brian K. Finneran, EVP & Chief Financial Officer
Michelle Mihas, VP & Corporate Secretary
516-548-8500 

      
HANOVER BANCORP, INC.     
STATEMENTS OF CONDITION (unaudited)     
(dollars in thousands)     
       
       
  March 31, December 31, March 31,
   2018   2017   2017 
Assets      
Cash and cash equivalents$35,025  $35,502  $24,998 
Securities-available for sale, at fair value 222   260   - 
Investments-held to maturity 13,399   13,607   14,311 
Loans held for sale -   -   17,773 
       
Loans, net of deferred loan fees and costs 499,802   474,670   340,469 
Less:  allowance for loan losses (5,595)  (5,345)  (3,870)
Loans, net 494,207   469,325   336,599 
       
Other assets 23,221   22,513   19,009 
 Assets$566,074  $541,207  $412,690 
       
Liabilities and stockholders' equity     
Core deposits$120,910  $132,540  $147,775 
Time deposits 285,977   262,780   163,797 
Total deposits 406,887   395,320   311,572 
       
Borrowings 94,718   83,767   54,886 
Note payable 14,977   14,976   8,410 
Other liabilities 2,736   3,181   2,943 
 Liabilities 519,318   497,244   377,811 
       
Stockholders' equity 46,756   43,963   34,879 
 Liabilities and stockholders' equity$566,074  $541,207  $412,690 
       


HANOVER BANCORP, INC.       
CONSOLIDATED STATEMENTS OF INCOME (unaudited)    
(dollars in thousands, except per share data)      
         
  Three Months Ended Six Months Ended
  3/31/2018 3/31/2017 3/31/2018 3/31/2017
         
Interest income$6,301 $4,189 $12,276 $8,102
Interest expense 1,961  1,173  3,708  2,306
 Net interest income 4,340  3,016  8,568  5,796
Provision for loan losses 250  225  800  450
 Net interest income after provision for loan losses 4,090  2,791  7,768  5,346
         
Loan fees and service charges 43  6  77  18
Mortgage servicing income 52  -  53  76
Service charges on deposit accounts 7  5  15  8
Mortgage banking income -  60  -  147
Gain on sale of investments -  -  20  -
Gain on sale of loans held-for-sale 665  168  1,035  366
 Non-interest income 767  239  1,200  615
         
Compensation and benefits 1,707  1,267  3,162  2,425
Occupancy and equipment 564  297  1,069  564
Data processing 125  100  238  192
Marketing and advertising 47  58  128  122
Professional fees 307  201  635  428
Other operating expenses 248  229  540  538
 Non-interest expense 2,998  2,152  5,772  4,269
         
 Income before income taxes 1,859  878  3,196  1,692
Income tax expense 434  324  918  624
 Core operating net income (1) 1,425  554  2,278  1,068
         
Non-recurring charges, net of tax -  -  931  -
         
 Net income$1,425 $554 $1,347 $1,068
         
Basic earnings per share-Core$0.43 $0.21 $0.70 $0.40
Diluted earnings per share-Core$0.42 $0.20 $0.70 $0.39
         
Basic earnings per share-GAAP basis$0.43 $0.21 $0.42 $0.40
Diluted earnings per share-GAAP basis$0.42 $0.20 $0.42 $0.39
         
         
Note: Prior period information has been adjusted to conform to current period presentation.  
         
(1) Core operating earnings is a non-GAAP financial measure.  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 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 GAAP or considered to be more important than financial results determined in accordance with GAAP.
     


HANOVER BANCORP, INC.         
CONSOLIDATED STATEMENTS OF INCOME (unaudited)      
QUARTERLY TREND          
(dollars in thousands, except per share data)        
           
  Quarter
Ended
 Quarter
Ended
 Quarter
Ended
 Quarter
Ended
 Quarter
Ended
  3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017
           
Interest income$6,301 $5,975  $5,312 $4,746 $4,189
Interest expense 1,961  1,747   1,583  1,391  1,173
 Net interest income 4,340  4,228   3,729  3,355  3,016
Provision for loan losses 250  550   450  475  225
 Net interest income after provision for loan losses 4,090  3,678   3,279  2,880  2,791
           
Loan fees and service charges 43  34   26  20  6
Mortgage servicing income 52  1   40  75  -
Service charges on deposit accounts 7  8   11  4  5
Mortgage banking income -  -   14  168  60
Gain on sale of investments -  20   -  -  -
Gain on sale of loans held-for-sale 665  370   316  255  168
 Non-interest income 767  433   407  522  239
           
Compensation and benefits 1,707  1,455   1,451  1,280  1,267
Occupancy and equipment 564  505   477  365  297
Data processing 125  113   110  104  100
Marketing and advertising 47  81   91  86  58
Professional fees 307  328   169  181  201
Other operating expenses 248  292   260  291  229
 Non-interest expense 2,998  2,774   2,558  2,307  2,152
           
 Income before income taxes 1,859  1,337   1,128  1,095  878
Income tax expense 434  484   425  417  324
 Core operating net income (1) 1,425  853   703  678  554
           
Non-recurring charges, net of tax -  931   -  297  -
           
 Net income (loss)$1,425 $(78) $703 $381 $554
           
Basic earnings per share-Core$0.43 $0.27  $0.24 $0.24 $0.21
Diluted earnings per share-Core$0.42 $0.27  $0.24 $0.23 $0.20
           
Basic earnings (loss) per share-GAAP basis$0.43 $(0.02) $0.24 $0.14 $0.21
Diluted earnings (loss) per share-GAAP basis$0.42 $(0.02) $0.24 $0.13 $0.20
           
Note: Prior period information has been adjusted to conform to current period presentation.   
           
(1) Core operating earnings is a non-GAAP financial measure.  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 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 GAAP or considered to be more important than financial results determined in accordance with GAAP.
           


HANOVER BANCORP, INC.       
SELECTED FINANCIAL DATA (unaudited)       
(dollars in thousands, except per share data)       
        
        
 3/31/2018 12/31/2017 9/30/2017 6/30/2017
Asset quality:       
Allowance for loan losses$5,595  $5,345  $4,795  $4,345 
Allowance for loan losses to total loans (1) 1.12%   1.13%   1.13%   1.13% 
Non-performing loans$-  $-  $-  $- 
Non-performing loans/total loans N/A   N/A   N/A   N/A 
Non-performing loans/total assets N/A   N/A   N/A   N/A 
Allowance for loan losses/ non-performing loans N/A   N/A   N/A   N/A 
        
Capital  (Bank only):       
Tier 1 Capital$59,300  $56,731  $48,953  $43,618 
Tier 1 leverage ratio 10.82%   10.99%   10.06%   9.82% 
Common equity tier 1 capital ratio 18.75%   18.56%   16.56%   15.58% 
Tier 1 risk based capital ratio 18.75%   18.56%   16.56%   15.58% 
Total risk based capital ratio 20.01%   19.81%   17.82%   16.83% 
        
Equity data:       
Common shares outstanding 3,360,941   3,255,669   3,115,907   2,855,113 
Stockholders' equity$46,756  $43,963  $41,778  $36,960 
Book value per common share 13.91   13.50   13.41   12.95 
Tangible common equity 46,375   43,620   41,434   36,627 
Tangible book value per common share 13.80   13.40   13.30   12.83 
        
(1) Calculation excludes loans held for sale.       
        
Note: Prior period information has been adjusted to conform to current period presentation  
N/A:  Such ratios are not applicable as the Bank has no non-performing loans and assets  
        


HANOVER BANCORP, INC.       
SELECTED FINANCIAL DATA (unaudited)       
(dollars in thousands, except per share data)      
        
        
 Three Months Ended Six Months Ended
 3/31/2018 3/31/2017 3/31/2018 3/31/2017
Profitability:       
Return on average assets 1.05%   0.57%   0.86% (1) 0.56% 
Return on average equity 12.66%   6.80%   10.30% (1) 6.53% 
Yield on average interest earning assets 4.79%   4.48%   4.77%   4.39% 
Cost of average interest bearing liabilities 1.68%   1.42%   1.62%   1.42% 
Net interest rate spread (3) 3.11%   3.06%   3.15% (2) 2.97% 
Net interest margin (4) 3.30%   3.22%   3.33% (2) 3.14% 
Non-interest expense to average assets 2.22%   2.22%   2.18%   2.24% 
Operating efficiency ratio 58.72%   66.12%   59.21% (2) 66.59% 
        
Average balances:       
Interest-earning assets$533,224  $379,416  $516,545  $370,348 
Interest-bearing liabilities 473,476   334,375   459,584   325,079 
Loans 487,273   335,425   472,352   325,073 
Deposits 394,272   295,896   387,410   286,872 
Borrowings 89,215   51,952   84,299   51,919 
        
        
(1) Calculation excludes a non-recurring deferred tax asset charge of $876,000 and a $55,000 after-tax debt restructuring charge.
(2) Calculation excludes a non-recurring pre-tax debt restructuring charge of $83,000.    
(3) Net interest rate spread represents the difference between the yield on average interest-earning   
assets and the cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.   
        
Note: Prior period information has been adjusted to conform to current period presentation  
N/A:  Such ratios are not applicable as the Bank has no non-performing loans and assets  
        


HANOVER BANCORP, INC.           
NON-GAAP DISCLOSURE (unaudited)           
(dollars in thousands)           
Reconciliation of As Reported (GAAP) and Non-GAAP Financial Measures        
             
             
  Quarter
Ended
  Quarter
Ended
  Quarter
Ended
  Quarter
Ended
 
Core operating net income3/31/2018  12/31/2017  9/30/2017  6/30/2017 
             
Net income (loss), as reported$1,425   $(78)  $703   $381  
             
Adjustments:           
Non-recurring accrued severance charge -    -    -    450  
Non-recurring debt restructure charge -    83    -    -  
 Total adjustments, before income taxes -    83    -    450  
Adjustment for reported effective tax rate -    28    -     
 Subtotal adjustments, after income taxes -    55    -    450  
Non-recurring deferred tax asset charge -    876    -    (153) 
 Total adjustments, after income taxes -    931    -    297  
             
Core operating net income$  1,425    $  853    $  703    $  678   
             
             
  Quarter
Ended 
  Quarter
Ended 
  Quarter
Ended 
  Quarter
Ended 
 
Core operating expenses3/31/2018  12/31/2017  9/30/2017  6/30/2017 
             
Operating expenses$2,998   $2,774   $2,558   $2,757  
Adjustments:           
Non-recurring accrued severance charge -    -    -    (450) 
Core operating expenses 2,998    2,774    2,558    2,307  
             
Non-interest income 767    433    407    522  
             
Net-interest income 4,340    4,145    3,729    3,355  
Adjustments:           
Non-recurring debt restructure charge -    83    -    -  
Core net interest income 4,340    4,228    3,729    3,355  
             
Core operating efficiency ratio           
             
Core net-interest income 4,340    4,228    3,729    3,355  
Non-interest income 767    433    407    522  
Adjust for net gain on sale of securities available for sale -    (20)   -    -  
Core total revenue 5,107    4,641    4,136    3,877  
             
Core operating efficiency ratio 58.72%    59.76%    61.84%    59.50%  
             
             
  Quarter Ended Quarter Ended Quarter Ended Quarter Ended
Core net interest income / margin3/31/2018 12/31/2017 9/30/2017 6/30/2017
             
Net interest income / margin$4,340 3.30% $4,145 3.29% $3,729 3.14% $3,355 3.12%
Non-recurring debt restructure charge - 0.00%  83 0.06%  - 0.00%  - 0.00%
             
Core net interest income / margin$  4,340  3.30% $  4,228  3.35% $  3,729  3.14% $  3,355  3.12%
             


HANOVER BANCORP, INC.     
NON-GAAP DISCLOSURE (unaudited)     
(dollars in thousands)     
Reconciliation of As Reported (GAAP) and Non-GAAP Financial Measures   
       
  Six Months Ended  Six Months Ended 
Core operating net income3/31/2018  3/31/2017 
       
Net income, as reported$1,347   $1,068  
Adjustments:     
Non-recurring debt restructure charge 83    -  
 Total adjustments, before income taxes 83    -  
Adjustment for reported effective tax rate 28    -  
 Subtotal adjustments, after income taxes 55    -  
Non-recurring deferred tax asset charge 876    -  
 Total adjustments, after income taxes 931    -  
       
Core operating net income$  2,278    $  1,068   
       
  Six Months Ended  Six Months Ended 
Core operating expenses3/31/2018  3/31/2017 
       
Operating expenses$5,772   $4,269  
       
Non-interest income 1,200    615  
       
Net-interest income 8,485    5,796  
Adjustments:     
Non-recurring debt restructure charge 83    -  
Core net interest income 8,568    5,796  
       
Core operating efficiency ratio     
       
Core net-interest income 8,568    5,796  
Non-interest income 1,200    615  
Adjust for net gain on sale of securities available for sale (20)   -  
Core total revenue 9,748    6,411  
       
Core operating efficiency ratio 59.21%   66.59% 
       
       
  Six Months Ended  Six Months Ended
  
Core net interest income / margin3/31/2018  3/31/2017 
       
Net interest income / margin$8,485 3.29% $5,796 3.14%
Non-recurring debt restructure charge 83 0.04%  - 0.00%
       
Core net interest income / margin$  8,568  3.33% $  5,796  3.14%
       


HANOVER BANCORP, INC.         
(unaudited, dollars in thousands)         
          
Net Interest Income Analysis
For the Three Months Ended March 31, 2018 and 2017
          
  2018   2017 
 Average  Average Average  Average
 BalanceInterest Rate BalanceInterest Rate
          
Assets:         
Interest-earning assets:         
Loans$487,273$6,007 5.00% $335,425$3,969 4.80%
Investment securities 13,702 112 3.32%  13,695 112 3.32%
Interest-earning cash 27,621 102 1.50%  27,423 57 0.84%
FHLB stock and other investments 4,628 80 7.01%  2,873 51 7.20%
Total interest earning assets 533,224 6,301 4.79%  379,416 4,189 4.48%
Non interest-earning assets:         
Cash and due from banks 2,624     1,750   
Other assets 12,469     11,294   
Total assets$548,317    $392,460   
          
Liabilities and stockholders' equity:         
Interest-bearing liabilities:         
Savings, N.O.W and money market deposits$100,086$252 1.02% $126,989$336 1.07%
Time deposits 269,199 1,139 1.72%  147,026 537 1.48%
Total savings and time deposits 369,285 1,391 1.53%  274,015 873 1.29%
Fed funds purchased & FHLB advances 89,215 350 1.59%  51,952 175 1.37%
Note payable 14,976 220 5.96%  8,408 125 6.03%
Total interest-bearing liabilities 473,476 1,961 1.68%  334,375 1,173 1.42%
Demand deposits 24,987     21,881   
Other liabilities 4,209     3,165   
Total liabilities 502,672     359,421   
Stockholders' equity 45,645     33,039   
Total liabilities & stockholders' equity$548,317    $392,460   
Net interest rate spread   3.11%    3.06%
Net interest income/margin $  4,340  3.30%  $  3,016  3.22%
          


HANOVER BANCORP, INC.         
(unaudited, dollars in thousands)         
          
Net Interest Income Analysis
For the Six Months ended March 31 2018 and 2017
          
  2018   2017 
 Average  Average Average  Average
 BalanceInterest Rate BalanceInterest Rate
          
Assets:         
Interest-earning assets:           
Loans$472,352$11,731 4.98% $325,073$7,735 4.77%
Investment securities 13,934 229 3.30%  9,868 167 3.39%
Interest-earning cash 25,853 176 1.37%  32,582 109 0.67%
FHLB stock and other investments 4,406 140 6.37%  2,825 91 6.46%
Total interest earning assets 516,545 12,276 4.77%  370,348 8,102 4.39%
Non interest-earning assets:         
Cash and due from banks 2,513     1,741   
Other assets 13,100     10,922   
Total assets$532,158    $383,011   
          
Liabilities and stockholders' equity:         
Interest-bearing liabilities:         
Savings, N.O.W and money market deposits$106,296$548 1.03% $125,587$672 1.07%
Time deposits 257,221 2,156 1.68%  139,166 1,029 1.48%
Total savings and time deposits 363,517 2,704 1.49%  264,753 1,701 1.29%
Fed funds purchased & FHLB advances 84,299 652 1.55%  51,919 353 1.36%
Note payable 11,768 352 6.00%  8,407 252 6.01%
Total interest-bearing liabilities 459,584 3,708 1.62%  325,079 2,306 1.42%
Demand deposits 23,893     22,119   
Other liabilities 4,306     3,021   
Total liabilities 487,783     350,219   
Stockholders' equity 44,375     32,792   
Total liabilities & stockholders' equity$532,158    $383,011   
Net interest rate spread   3.15%    2.97%
Net interest income/margin $  8,568  3.33%  $  5,796  3.14%