Hanover Bancorp, Inc. Completes $35 Million Private Placement of Subordinated Notes

Rhea-AI Summary

Hanover Bancorp (NASDAQ: HNVR) completed a private placement of $35 million fixed-to-floating subordinated notes due 2036 on March 12, 2026. The Notes pay 7.25% semi-annually until March 15, 2031, then reset quarterly to SOFR+386 bps. They received a BBB+ rating and are intended to qualify as Tier 2 capital. Net proceeds will redeem $25 million of outstanding subordinated notes and support general corporate purposes, including contributing equity to Hanover Community Bank.

Positive

• $35M subordinated notes issued due 2036
• Notes intended to qualify as Tier 2 capital
• Proceeds will redeem $25M existing subordinated notes
• Notes received a BBB+ rating

Negative

• Initial fixed coupon of 7.25% through March 15, 2031
• Post-2031 rate resets quarterly to SOFR+386 bps

Key Figures

Private placement size: $35 million Initial interest rate: 7.25% per annum Spread over SOFR: 386 basis points +5 more

8 metrics

Private placement size $35 million Aggregate principal amount of subordinated notes due 2036

Initial interest rate 7.25% per annum Fixed rate on notes until March 15, 2031

Spread over SOFR 386 basis points Floating rate margin over three-month SOFR from March 15, 2031

Maturity year 2036 Subordinated notes legal maturity

Existing notes redeemed $25 million Aggregate principal amount of subordinated notes to be redeemed

Interest payment frequency Semi-annual Coupon payments on subordinated notes during fixed-rate period

Capital classification Tier 2 capital Regulatory capital treatment of subordinated notes

Credit rating BBB+ Egan-Jones rating on subordinated notes

Market Reality Check

Price: $20.60 Vol: Volume 7,188 is 0.92x its...

normal vol

$20.60 Last Close

Volume Volume 7,188 is 0.92x its 20-day average of 7,801, showing no unusual trading ahead of the announcement. normal

Technical Shares at $20.73 are below the 200-day MA of $22.30 and about 14.9% under the 52-week high of $24.36.

Peers on Argus

HNVR was down 1.52% while peers were mixed: BVFL +1.73%, CBFV +0.56%, CFBK +0.56...

HNVR was down 1.52% while peers were mixed: BVFL +1.73%, CBFV +0.56%, CFBK +0.56%, MRBK +0.78%, LARK -1.58%. This points to a stock-specific move rather than a coordinated sector reaction.

Historical Context

4 past events · Latest: Jan 29 (Positive)

Pattern 4 events

Date	Event	Sentiment	Move	Catalyst
Jan 29	Executive appointment	Positive	-3.5%	Named a new Chief Commercial Real Estate Lending Officer to bolster CRE platform.
Jan 29	Earnings and dividend	Positive	-3.5%	Reported 2025 results and declared a $0.10 quarterly cash dividend.
Oct 30	Quarterly earnings	Positive	+0.2%	Posted Q3 2025 earnings with dividend and solid balance sheet metrics.
Sep 25	Digital platform update	Positive	-0.6%	Launched a redesigned website enhancing digital banking capabilities.

Pattern Detected

Recent positive corporate updates have often coincided with flat-to-negative next-day moves, suggesting a tendency for the stock to underreact or sell off on good news.

Recent Company History

Over the past several months, Hanover reported multiple milestones, including Q3 2025 results with net income of $3.5M and a $0.10 quarterly dividend, website modernization, and the appointment of a new Chief Commercial Real Estate Lending Officer on Jan 29, 2026. Despite these generally constructive developments, 24-hour reactions were negative in three of four cases. Today’s private placement of $35M subordinated notes to refinance existing debt and bolster Tier 2 capital fits into this balance-sheet-focused, growth-oriented trajectory.

Market Pulse Summary

This announcement details a $35 million private placement of fixed-to-floating subordinated notes du...

Analysis

This announcement details a $35 million private placement of fixed-to-floating subordinated notes due 2036, rated BBB+, intended as Tier 2 capital. Proceeds are earmarked to redeem $25 million of existing subordinated notes and support general corporate purposes, including bank-level capital. In light of prior earnings and strategic updates, investors may focus on how this new debt affects net interest margin, regulatory capital ratios, and the bank’s capacity to fund balance sheet growth.

Key Terms

private placement, subordinated notes, fixed-to-floating rate, secured overnight financing rate (SOFR), +4 more

8 terms

private placement financial

"completed the private placement of $35 million in aggregate principal amount"

A private placement is a way for companies to raise money by selling securities directly to a small group of investors instead of through a public offering. This process is often quicker and less regulated, making it similar to offering a special, exclusive investment opportunity to select individuals or institutions. For investors, it can provide access to unique investment options that are not available on public markets.

subordinated notes financial

"aggregate principal amount of fixed-to-floating rate subordinated notes due 2036"

Subordinated notes are loans companies issue that rank below other debts for repayment, meaning holders get paid only after higher-priority creditors if the issuer runs into trouble. Because they act like being farther back in line at a buffet, they usually offer higher interest to compensate for greater risk, so investors watch them for potential higher returns but also increased chance of loss and sensitivity to the issuer’s financial health.

fixed-to-floating rate financial

"aggregate principal amount of fixed-to-floating rate subordinated notes"

A fixed-to-floating rate is a type of loan or investment that starts with a fixed interest rate for a certain period, meaning the payments stay the same, then switches to a variable rate that can change over time based on market conditions. This matters because it offers the stability of fixed payments initially, but also the flexibility to benefit if interest rates drop later.

secured overnight financing rate (SOFR) financial

"reset quarterly to the then current three-month secured overnight financing rate (SOFR)"

A secured overnight financing rate (SOFR) is the interest rate on very short, one‑day loans that are backed by high‑quality collateral (like government bonds), so lenders face less risk. Investors care because SOFR is a widely used benchmark that sets the cost of borrowing and the pricing of loans, bonds and derivatives; think of it as a trusted yardstick for short‑term interest costs that influences returns and valuations across markets.

Tier 2 capital regulatory

"intended to qualify as Tier 2 capital for regulatory capital purposes"

Tier 2 capital is the secondary cushion a bank holds to absorb losses after its core capital is used, made up of items like long-term subordinated debt and certain reserves. Think of it as a backup battery that kicks in only after the main battery fails; it matters to investors because its size and quality affect a bank’s regulatory strength, creditworthiness, and the safety of dividends and bond payments under stress.

basis points financial

"three-month secured overnight financing rate (SOFR) plus 386 basis points"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

Federal Deposit Insurance Corporation regulatory

"Hanover Community Bank is a member of the Federal Deposit Insurance Corporation"

A U.S. government agency that insures customer deposits at member banks up to a set limit, acting like a safety net so people don’t lose their cash if a bank fails. It matters to investors because it helps maintain confidence in the banking system, reduces the chance of sudden withdrawals or bank runs, and can influence the stability and share prices of banks and financial markets.

forward-looking statements regulatory

"This release may contain certain "forward-looking statements" within the meaning"

Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.

AI-generated analysis. Not financial advice.

MINEOLA, N.Y., March 12, 2026 (GLOBE NEWSWIRE) -- Hanover Bancorp, Inc. (NASDAQ: HNVR) (“Hanover” or “the Company”), parent company of Hanover Community Bank, is pleased to announce that the Company has completed the private placement of $35 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2036 (the “Notes”) to certain qualified institutional buyers and accredited investors.

The Notes will initially bear interest, payable semi-annually, at the rate of 7.25% per annum, until March 15, 2031. From and including March 15, 2031, to but excluding the maturity date or early redemptions date, the interest rate applicable to the outstanding principal amount due will reset quarterly to the then current three-month secured overnight financing rate (SOFR) plus 386 basis points. The Notes received a BBB+ rating from Egan-Jones Ratings Company and are intended to qualify as Tier 2 capital for regulatory capital purposes for the Company.

The Company intends to use the net proceeds to redeem the Company’s outstanding $25 million in aggregate principal amount of subordinated notes and for general corporate purposes, including contributing equity capital to Hanover Community Bank, the Company’s wholly owned commercial bank subsidiary.

“We are pleased with the success of this transaction which enhances our financial flexibility and positions us to continue to compete in an exciting marketplace and to execute upon our longer-term strategic goals,” said Michael Puorro, Hanover’s Chairman and CEO. “This new capital will allow us to retire our existing subordinated notes at a lower interest rate, enhance our capital base, support balance sheet growth and further strengthen our business model.”

Piper Sandler & Co. acted as lead placement agent, with Hovde Group, LLC acting as co-placement agent. Kilpatrick Townsend & Stockton LLP served as legal counsel to Hanover and Luse Gorman, PC served as legal counsel to the placement agents.

About Hanover Community Bank and Hanover Bancorp, Inc.

Hanover Bancorp, Inc. (NASDAQ: HNVR), is the bank holding company for Hanover Community Bank, a community commercial 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 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 financial services. Hanover offers a complete suite of consumer, commercial, and municipal banking products and services, including multifamily 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 located in Mineola, New York where it also operates a full-service branch office along with additional branch locations in Garden City Park, Hauppauge, Port Jefferson, Forest Hills, Flushing, Sunset Park, Rockefeller Center and Bowery, 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 www.hanoverbank.com.

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," “intend,” 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 as a result of inaccurate assumptions that Hanover Bancorp, Inc. might make or by known or unknown risks and uncertainties. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) the impact of a pandemic or other health crises and the government’s response to such pandemic or crises on our operations as well as those of our customers and on the economy generally and in our market area specifically, (2) competitive pressures among depository institutions may increase significantly; (3) changes in the interest rate environment may reduce interest margins; (4) loan origination and sale volumes, charge-offs and credit loss provisions may vary substantially from period to period; (5) general economic conditions may be less favorable than expected; (6) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (7) legislative or regulatory changes or actions may adversely affect the businesses in which Hanover Bancorp, Inc. is engaged; (8) the impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts; (9) changing political conditions and the outcome of federal, state, and local elections and the resulting economic and other impact on the areas in which we conduct business; (10) changes and trends in the securities markets may adversely impact Hanover Bancorp, Inc.; (11) a delayed or incomplete resolution of regulatory issues could adversely impact our planning; (12) difficulties in integrating any businesses that we may acquire, which may increase our expenses and delay the achievement of any benefits that we may expect from such acquisitions; (13) the impact of the strategic credit cleanup that we implemented during the fourth quarter of 2025; (14) the impact of reputation risk created by the developments discussed above on such matters as business generation and retention, funding and liquidity could be significant; and (15) the outcome of any future regulatory and legal investigations and proceedings may not be anticipated. Further information on other factors that could affect the financial results of Hanover Bancorp, Inc. are included in our Annual Report on Form 10-K under Item 1A - Risk Factors, as updated by our subsequent filings with the Securities and Exchange Commission. 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.

Investor and Press Contact:
Lance P. Burke
Chief Financial Officer
(516) 548-8500

FAQ

What did Hanover Bancorp (HNVR) announce on March 12, 2026 about subordinated notes?

Hanover completed a private placement of $35 million fixed-to-floating subordinated notes due 2036. According to the company, proceeds will redeem $25 million of existing subordinated notes and support general corporate purposes, including capital contributions to the bank.

What is the interest structure of HNVR's new subordinated notes issued March 12, 2026?

The Notes pay 7.25% per annum, payable semi-annually, until March 15, 2031. According to the company, from March 15, 2031 the rate resets quarterly to the then-current three-month SOFR plus 386 basis points.

How will the $35 million note sale affect Hanover Bancorp's capital position (HNVR)?

The offering is intended to qualify as Tier 2 capital, strengthening regulatory capital reserves. According to the company, net proceeds will also retire existing subordinated notes and support balance sheet growth and bank equity contributions.

Who participated in the placement and what rating did HNVR's notes receive?

The placement was led by Piper Sandler with Hovde Group as co-placement agent, and legal counsel named for parties. According to the company, the Notes received a BBB+ rating from Egan-Jones Ratings Company.

What will Hanover Bancorp (HNVR) use the proceeds from the March 12, 2026 private placement for?

Net proceeds will be used to redeem $25 million of outstanding subordinated notes and for general corporate purposes. According to the company, this includes contributing equity capital to Hanover Community Bank to support growth.