Source of net interest income $13. 2 million for the 3 months ended June 30, 2024, down $0. 3 million, or 1. 9%, compared to the same quarter in 2023 due to margin compression The Company’s net interest rate to 2. 46% in the quarter of 2024, compared to 2. 68% in the previous quarter, the same quarter of 2023. The yield on interest-bearing assets increased to 6. 22% in the 2024 quarter from 5. 65% in the same quarter of 2023, an accumulation of 57 core issues that are offset by a 96 basis point increase in the interest-bearing debt rate to 4. 48% in 2023. 2024, compared to 3. 52% in the second quarter of 2023. Source of net interest income in the same quarter The accrual increased $0. 3 million, or 2. 41%, due to a five basis point accrual in the net interest margin as a result of a 19 basis point accretion in the return on interest-bearing assets, partially offset through a 15 basis point accretion in the interest-bearing debt charge.
Summary of effects for the semester ended June 30, 2024
For the six months ended June 30, 2024, the Company reported a net revenue source of $4. 9 million, or $0. 66 consistent with diluted percentage (including Series A preferred stock), compared to $6. 3 million parent or $0. 85 consistent with diluted percentage (including Series A Preferred Stock), for the comparable six-month period of 2023 in the same period.
The reduction in net profit recorded during the six months ended June 30, 2024 compared to the comparable six months of 2023 is due to the points discussed above. The Company’s effective tax rate was minimized to 25. 3% for the six months ended June 30, 2024, compared to 26. 7% for the comparable period of 2023.
Michael P. Puorro, President and CEO, commented on the company’s quarterly results: “The temporary quarterly results were affected by credit-related issues that we are insulated by nature and do not reflect the quality of our portfolio. Regardless of those impacts, our underlying functionality remains strong, as evidenced by higher non-interest income, an expanding net interest margin and loan yields exceeding deposit charges. To ensure our sustained success, we have proactively pursued relief measures. of positions aimed at maximizing the power and support our continued strategic expansion and the integration of the most sensible professionals With a committed team and our diversified business sectors, we are well placed for the future The interest rate relief anticipated by the. economists will create even greater opportunities due to the composition of our balance sheet. and our ability to expand our key profit drivers into new markets.
Blade highlights.
Total assets as of June 30, 2024 were $2. 33 billion, compared to $2. 27 billion as of December 31, 2023. Total securities available for sale as of June 30, 2024 was 98. 8 million, an increase of $37. 4 million from December 31. 2023, mainly due to expansion in the United States. Treasury securities, corporate bonds and mortgage-backed securities.
Total deposits as of June 30, 2024 increased to $1. 94 billion from $1. 90 billion as of December 31, 2023. Total deposits for the six months ended June 30, 2024, increased to $37. 3 million , or 2. 0%, compared to December 31, 2023. . Our loan-to-deposit ratio is 104% as of June 30, 2024 and 103% as of December 31, 2023.
The Company had a total of $452. 6 million in municipal deposits as of June 30, 2024, at a weighted average rate of 4. 61%, to $528. 1 million at a weighted average rate of 4. 62% as of 31 December 2023. The Corporation’s municipal deposit program is based on long-term municipal deposits. Long-lasting relationships were developed in the local market. This core deposit business will continue to provide a strong source of investment for the Company’s credit products at lower prices than retail deposits and market loans. The company continues to expand its base of municipal warehouses and lately maintains 39 relationships with visitors.
Total indebtedness as of June 30, 2024 was $149. 0 million, with a weighted average rate and weighted average term of 3. 96% and 21 months, respectively. As of June 30, 2024 and December 31, 2023, the Company had $121. 7 million and $126. 7 million in notable FHLB term advances, respectively. The Company had $25. 0 million of notable FHLB overnight loans as of June 30, 2024 and none as of December 31, 2023. The Company had no notable loans under lines of credit with correspondent banks as of June 30, 2024 and as of December 31, 2023. December 2023. The Company uses a number of methods to manage interest rate risk, adding interest rate pass-through agreements that currently provide further upside to net interest income.
Shareholders’ equity $190. 1 million as of June 30, 2024, compared to $184. 8 million as of December 31, 2023. The $5. 2 million accrual is primarily due to an increase of $3. 4 million in retained earnings and a $1. 1 million reduction in accumulated other comprehensive sources of profit. The buildup in retained earnings was primarily due to a net profit of $4. 9 million for the six months ended June 30, 2024, which was offset by $1. 5 million in dividends declared. As of June 30, 2024, accumulated other comprehensive source of income represented 0. 70% of shareholders’ overall fair value and consisted of a $1. 4 million after-tax net unrealized loss on the investment portfolio, partially offset through an unrealized net gain of $0. 1 million after taxes. on derivatives.
Loan portfolio
Historically, the Bank has generated additional profits by strategically originating and promoting residential and government-guaranteed loans to other financial institutions at premiums, while retaining servicing rights on secured sales. However, with interest rates rising in recent years, the appetite of buyers of the Bank’s residential loans to obtain pools of loans has diminished, thereby undoing the Bank’s ability to sell residential residential loans from its portfolio. under advantageous conditions. Since the end of 2023, the Bank has initiated the advancement of a cash flow generation program under which the Bank issues individual loans for sale to quick investors, allowing it to resume residential loan sales and generate a source of profits. by commissions to complement the sales bonuses generated. through the origination of the SBA. ready. During the quarter ended June 30, 2024, the Company sold $2. 9 million in residential loans under this program and recorded gains on the sale of loans held for sale of $0. 1 million. We expect activity volume to increase as the year progresses and our pipeline pipeline continues to grow. As we continue to prioritize liquidity and capital management, new business progression is largely focused on cash flow generation rather than portfolio growth.
The Bank’s investments in State-guaranteed loans continue to bear fruit. During the quarters ended June 30, 2024 and 2023, the Company sold $28. 0 million and $12. 6 million of SBA loans, respectively, and recorded gains from the sale of held-for-sale loans of $2. 5 million and $1. 1 million, respectively.
Commercial Real Estate Statistics
A significant portion of the Bank’s advertising real estate portfolio is comprised of loans secured through multifamily real estate and owned by CRE investors that are primarily subject to constant interest rates for an initial period of five years. The Bank’s exposure to land and construction loans is lower, at $10 million, all at variable interest rates, and loans made through CRE homeowners have a significant mix of variable rates. As shown below, those two portfolios hold 11% of loans maturing between 2024 and 2025, and 54% maturing in 2027 parent
Income breakdown of the Multi-family portfolio
The following table segments our multifamily secured loan portfolio based on rental terms and location. As shown below, 63% of the combined portfolio is secured through housing subject to flexible rental conditions in the market, the dominant tenant type and the market. The rental and rent stabilized segments of our portfolio have very similar average borrower profiles. The portfolio is primarily located in the New York neighborhoods of Brooklyn, the Bronx and Queens.
Office PropertyExhibition
The Bank’s exposure to the market is lower, at $46 million (2% of all loans), with a weighted average DSCR of 1. 8x, a weighted average LTV of 56% and an exposure of less than $400 thousand in Manhattan. It has no vices, defects or modifications.
The Bank’s asset quality indices remain strong. As of June 30, 2024, the company reported $15. 8 million in non-performing loans, which represented 0. 79% of total notable loans. Non-performing loans were $14. 5 million as of December 31, 2023 and $14. 9 million as of March 31, 2024. During the quarter, $4. 4 million of delinquent advertising real estate insurance was sold and a $1. 2 million delinquent residential loan was paid in full. This advertising real estate loan is the Bank’s largest non-performing asset. These decreases were offset by the addition of a $3. 8 million loan consisting of two SBA loans of $1. 3 million (unsecured portion) and a $2. 5 million advertising loan. After June 30, a residential loan with no outstanding investor loan was paid in full, bringing our existing delinquent loans to $14. 6 million.
During the second quarter of 2024, the Bank recorded a provision for credit losses of $4. 0 million. The balance of the provision for credit losses as of June 30, 2024 was $23. 6 million compared to $19. 7 million as of December 31, 2023 and $15. 4 million as of June 30, 2023. Accrual in the provision for credit losses on loans is attributable to an LCA on a separately assessed amount. $2. 5 million and $1. 1 million loan similar to CECL-style continuing innovations in the June 2024 quarter. Provision for credit losses as a percentage of total loans 1. 17% as of June 30, 2024 compared to 1. 00% as of December 31, 2023.
Net margin
The Bank’s net interest margin accumulation increased to 2. 46% for the quarter ended June 30, 2024 from 2. 41% for the quarter ended March 31, 2024. The accumulation during the subsequent corresponding quarter was basically similar to the accumulation of the average loan yield. , partly offset by the accumulation of the average burden of deposits and borrowings. The Bank’s net interest margin stood at 2. 68% during the quarter ended June 30, 2023. The reduction compared to the previous fiscal quarter was primarily due to the accumulation of the general funds charge, partially offset by the accumulation of the average loan. performance and, to a lesser extent, the Company’s resolution to increase its liquidity following industry events over the past two years. Year-over-year margin compression reflects the effects of the immediate and significant increase in interest rates and the competitive deposit environment. We, the Company, are well placed to weather the existing or more favorable interest rate environment.
Hanover Bancorp, Inc. (NASDAQ: HNVR), is the bank holding company for Hanover Community Bank, a network advertising bank targeting effective, under-advertised facilities and products that satisfy visitor desires. The control and board of directors are comprised of a select organization of fortunate local businessmen who are committed to the good fortune of the bank through knowledge and understanding of the monetary desires and opportunities of the New York metropolitan area. York. Backed by cutting-edge technology, Hannover offers a wide diversity of monetary services. Hannover offers a full range of private, advertising and municipal banking products and facilities, including multifamily and advertising mortgages, residential loans, commercial loans and lines of credit. Hanover also provides its consumers with access to 24-hour fee-free ATM service, interest-free checking, telephone banking, complex mobile and web banking technologies for our private and business customers, Array safes and much more. The company’s administrative office is located in Mineola, New York, where it also operates a full-service branch office, as well as additional branches in Garden City Park, Hauppauge, Forest Hills, Flushing, Sunset Park, Rockefeller Center, and Chinatown, New YorkArray. and Freehold, New Jersey.
Hanover Community Bank is a member of the Federal Deposit Insurance Corporation and is an equal housing and equal opportunity lender. For more information, call (516) 548-8500 or the bank’s online page in www. hanoverbank. com.
Non-GAAP Information
This discussion includes non-GAAP monetary measures, aggregating the Company’s tangible equity (“TCE”) ratio, TCE, tangible assets, tangible e-book price consistent with the stock, return on average tangible equity, and power ratio. A non-GAAP monetary measure is a numerical measure of consistent past or long-term performance, monetary position or cash flows that excludes or includes amounts that are required to be disclosed to the maximum extent directly comparable, calculated and presented in accordance with GAAP. accounting principles sometimes accepted in the United States (“U. S. GAAP”). The Company’s control believes that the presentation of non-GAAP monetary measures allows control and investors to better perceive the effects and trends of the Company in addition to those measured in accordance with GAAP, and provides greater comparison between consistent periods. Although Control uses non-GAAP monetary measures in its investigation of the Company’s consistent compliance, such data is not intended to be considered in isolation or as a replacement for figures prepared in accordance with U. S. Standards. GAAP or that are considered more significant. as we decide monetary effects in accordance with US GAAP. The Company’s non-GAAP monetary measures may not be comparable to the aforementioned measures used through other monetary institutions.
Forward-looking statements
This release would likely involve certain “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995 and could be known by the use of words such as “possibly,” “believe,” “expect,” “anticipate. ” “, “should”, “plan”, “estimate”, “predict”, “continue” and “potential” or the negative of those terms or any other comparable terminology. Examples of forward-looking announcements include, but are not limited to, estimates relating to the monetary condition, the effects of the operations and business of Hanover Bancorp, Inc. Any or all of the forward-looking statements involved in this release and any other public documents made through Hanover Bancorp, Inc. could possibly prove to be incorrect. due to erroneous assumptions that Hanover Bancorp, Inc. would possibly make or due to known or unknown dangers and uncertainties, adding those discussed in our Annual Report on Form 10-K in Item 1A – Risk Factors, as above to date through. of our upcoming filings with the Securities and Exchange Commission. Additionally, the negative effect of the COVID-19 pandemic on the Company, its consumers and the communities in which it operates may also harm the Company’s business, the effects of the operations and monetary effects. condition for an era of time. indeterminate. Therefore, no vision of the future can be guaranteed. Hanover Bancorp, Inc. does not intend to update any forward-looking information after the date of this release or to conform such information to actual events.
Investor & Media Contact: Lance P. Burke Chief Financial Officer (516) 548-8500