MINEOLA, N.Y. - Hanover Bancorp, Inc. (NASDAQ:HNVR), the parent company of Hanover Community Bank, has reported its second-quarter financial results, which showed a net income of $0.8 million, or $0.11 per diluted share, a decrease from the previous year's $3.1 million, or $0.42 per diluted share.
This decline was attributed to a $2.5 million allowance for credit losses on a specific loan and a $1.1 million provision related to enhancements to the current expected credit loss model.
The bank's net interest income for the quarter was $13.2 million, a slight increase from the prior quarter but a decrease from the same period in 2023. The net interest margin improved to 2.46% from 2.41% in the prior quarter. Non-interest income for the quarter rose to a record level for the company, excluding income from a litigation settlement in the previous year.
Hanover Bancorp also reported strong liquidity, with undrawn liquidity sources totaling $648.2 million. Core deposits grew by 6.9% since December 2023, and total deposits increased by 2.0% in the same period. The bank experienced loan growth, with loans totaling $2.01 billion, marking a net increase from the previous quarter and a 5.7% annualized increase from December 2023.
Asset quality remained solid, with non-performing loans representing 0.79% of the total loan portfolio. The bank's allowance for credit losses equaled 1.17% of total loans. Additionally, the company announced a $0.10 per share cash dividend payable in August 2024.
The bank continues to focus on expanding its footprint, with plans to open a full-service branch in Port Jefferson, New York, expected to be operational in the fourth quarter of 2024.
This analysis is based on a press release statement and reflects the company's financial performance for the quarter ended June 30, 2024.
In other recent news, Hanover Bancorp has announced a new employment agreement with its Executive Vice President and Chief Financial Officer, Lance P. Burke. The agreement, set to take effect on July 18, 2024, details Burke's compensation, benefits, and employment conditions. Burke's annual salary will be $350,000, subject to review by the company's Board of Directors, and he will also receive an automobile allowance of up to $800 per month.
The contract, which has a three-year term with the potential for an additional year, provides for severance payment should the company terminate Burke without "cause" or if Burke resigns under certain conditions.
In the event of a change in control at Hanover Bancorp, Burke is set to receive a payment equal to twice the sum of his base salary, the highest bonus of the last three years, and his annual automobile allowance.
These are recent developments, as indicated by a recent SEC filing by Hanover Bancorp. The agreement also includes standard confidentiality and non-solicitation clauses, emphasizing the company's commitment to maintaining its business integrity.
InvestingPro Insights
Amid the financial results reported by Hanover Bancorp, Inc. (NASDAQ:HNVR), several metrics and InvestingPro Tips provide a deeper understanding of the company's current market position and future prospects. The company's market capitalization stands at a modest $126.8 million, reflecting its size within the banking sector. With a P/E ratio of 8.3, the bank trades at a valuation that could be considered reasonable in comparison to earnings, though it is worth noting that the adjusted P/E ratio for the last twelve months as of Q2 2024 is slightly higher at 9.15.
InvestingPro Tips suggest that Hanover Bancorp suffers from weak gross profit margins, which may concern investors looking for strong profitability. Still, it is not all bleak as analysts predict the company will be profitable this year, and it has been profitable over the last twelve months. Moreover, the bank's stock price often moves in the opposite direction of the market, indicating a potential for counter-cyclical investment opportunities.
Key financial metrics from the last twelve months as of Q2 2024 show that Hanover Bancorp experienced a slight revenue decline of 0.05%, yet managed a quarterly revenue growth of 9.92% in Q2 2024. Operating income margin stood at a robust 34.48%, which is a strong indicator of operational efficiency. Shareholders have also seen a dividend yield of 2.29%, with the ex-date of the last dividend being May 7, 2024.
For investors considering Hanover Bancorp as an investment, there are additional InvestingPro Tips available that could provide further insights into the bank's performance and potential. Utilize the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and uncover the wealth of information that could guide your investment decisions.
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