Hanover Bancorp Q3 2026 net income rises to $4.35M
Deposits stood at $2.11 billion and loans at $2.08 billion at September 30, 2026, alongside a $0.10 quarterly cash dividend declaration.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Hanover Bancorp, Inc. (HNVR) reported third-quarter 2026 net income of $4.349 million, or $0.60 per diluted share, including Series A preferred shares, versus $3.491 million and $0.47 a year earlier. Net interest income was $17.0 million, up 11.84% year over year, and net interest margin was 3.02% versus 2.74%. For the nine months ended September 30, 2026, net income was $10.287 million versus $7.455 million. Adjusted non-GAAP net income, excluding debt-extinguishment charges and severance expenses in 2026 and core-system conversion expenses in 2025, was $12.616 million versus $10.027 million.
At September 30, total assets were $2.44 billion, deposits were $2.11 billion and loans were $2.08 billion. Non-performing loans were $29.1 million, or 1.40% of total loans, compared with $21.6 million and 1.08% at December 31, 2025. Hanover declared a $0.10-per-share quarterly cash dividend on common and Series A preferred shares, payable November 18, 2026, to stockholders of record November 11, 2026. It repurchased 192,718 common shares for an aggregate cost of $4.8 million during the nine months ended September 30, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNet income: $4.349 million, versus $3.491 million in third quarter 2025.
- Moderate pointNet interest income: $17.0 million, up 11.84% year over year.
Negative
- Moderate pointNon-performing loan ratio: 1.40% versus 1.08% at December 31, 2025.
Filing Explained
In the stress test, eight loans totaling twenty-two million dollars would have debt-service coverage below one times, representing four percent of the total multifamily portfolio.
The 8-K adds detail on existing commercial real-estate credit exposures:
The stress test is pro forma: it recasts stabilized-rent loans with current rates below
Under that scenario, 8 loans totaling
8-K Event Classification
Key Figures
Key Terms
net interest margin financial
Debt Service Coverage Ratio financial
loan to value financial
pre-provision net revenue financial
Earnings Snapshot
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were HNVR’s third-quarter 2026 earnings?
What dividend did HNVR declare, and when is it payable?
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AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 – Results of Operations and Financial Condition
On October 28, 2026, Hanover Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2026.
The press release issued by the Company on October 28, 2026 is furnished herewith as Exhibit 99.1. This information is being “furnished” in accordance with General Instruction B.2. of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 – Financial Statements and Exhibits
(d) Exhibits
Exhibit | | Description |
Exhibit 99.1 | Press release issued by the Company on October 28, 2026 |
Exhibit 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HANOVER BANCORP, INC. | |||
Date: October 28, 2026 | By: | /s/ Lance P. Burke | |
Lance P. Burke | |||
Senior Executive Vice President & Chief Financial Officer | |||
(Principal Financial Officer) | |||
Exhibit 99.1
FOR IMMEDIATE RELEASE
Investor and Press Contact:
Lance P. Burke
Chief Financial Officer
(516) 548-8500
Hanover Bancorp, Inc. Reports Third Quarter 2026
Results Highlighted by Increased Net Interest
Income and Strong Loan Growth
Declares $0.10 Quarterly Cash Dividend
Third Quarter Performance Highlights
| ● | Net Income: Net income for the quarter ended September 30, 2026 totaled $4.3 million or $0.60 per diluted share (including Series A preferred shares), versus $4.1 million or $0.55 per diluted share (including Series A preferred shares) in the quarter ended June 30, 2026 and $3.5 million or $0.47 per diluted share (including Series A preferred shares) in the quarter ended September 30, 2025. |
| ● | Pre-Provision Net Revenue: Pre-provision net revenue (non-GAAP) was $6.9 million or 1.18% of average assets for the quarter ended September 30, 2026, which was the highest level since the fourth quarter of 2022, versus $5.9 million or 1.06% of average assets in the prior linked quarter and $6.0 million or 1.05% of average assets in the third quarter of 2025. |
| ● | Balance Sheet Growth: Total assets were $2.4 billion at September 30, 2026, up $105.2 million, or 4.50%, from June 30, 2026 and up $58.7 million, or 2.46% from December 31, 2025 due to strong loan growth. |
| ● | Strong Loan Growth: Total loans outstanding were $2.1 billion at September 30, 2026, up $86.8 million, or 4.34%, from June 30, 2026 and up $83.9 million, or 4.19% from December 31, 2025, primarily driven by growth in niche-residential and relationship CRE and C&I lending. Loan production for the three months ended September 30, 2026 was $178.7 million, up 69.70% from the linked quarter. |
| ● | Net Interest Income: Net interest income was $17.0 million for the quarter ended September 30, 2026, an increase of $0.3 million, or 1.52% from the quarter ended June 30, 2026 and $1.8 million, or 11.84%, from the quarter ended September 30, 2025, representing a record level. |
| ● | Improved Profitability Metrics: Returns on average assets and average tangible equity increased to 0.75% and 9.32%, respectively, for the quarter ended September 30, 2026 from 0.73% and 8.85%, respectively, for the quarter ended June 30, 2026 and 0.61% and 7.63%, respectively, for the quarter ended September 30, 2025. Efficiency ratio improved to 64.3% for the quarter ended September 30, 2026, versus 69.8% from the quarter ended June 30, 2026 and 66.7% from the quarter ended September 30, 2025. The efficiency ratio improvement on a linked quarter basis is primarily related to a $1.3 million, or 9.18% decrease in non-interest expense, and from the quarter ended September 30, 2025, a $1.8 million or 11.84% increase in net interest income. |
| ● | Demand Deposits: Demand deposits increased $7.3 million or 2.96% to a record $255.1 million at September 30, 2026 from December 31, 2025, driven by the success of our C&I banking relationships and an increase in municipal operating accounts. |
| ● | Book Value Per Share: Book value per share (including Series A preferred shares) was $27.95 at September 30, 2026 compared to $27.66 at June 30, 2026 and $27.02 at December 31, 2025. Tangible book value per share was $25.29 at September 30, 2026 compared to $25.02 at June 30, 2026 and $24.41 at December 31, 2025. Exclusive of Accumulated Other Comprehensive Loss, book value per share and tangible book value per share would have increased by $0.32 and $0.31, respectively, at September 30, 2026. Tangible common equity to tangible assets (“TCE ratio”) was 7.58% at September 30, 2026 compared to 7.91% at June 30, 2026 and 7.65% at December 31, 2025. The decrease in TCE ratio over the linked quarter is primarily related to a $1.8 million increase in after tax net unrealized loss on the investment portfolio and $2.2 million in common stock repurchases. |
| ● | Quarterly Cash Dividend: The Company’s Board of Directors approved a $0.10 per share cash dividend on both common shares and Series A preferred shares payable on November 18, 2026 to stockholders of record on November 11, 2026. |
| ● | Business Banking Center Update: Our newest de novo branches in Hauppauge and Port Jefferson continue to demonstrate robust growth. As of September 30, 2026, the Hauppauge branch achieved $149.1 million in deposits with a 1.64% cost of funds, while the Port Jefferson location reached $52.1 million in deposits with a 1.85% cost of funds. Building on this momentum, our new full-service branch in downtown Riverhead, New York officially opened on September 30, 2026. This strategic expansion enables us to better serve the East End of Long Island with our complete suite of financial and banking services. |
Mineola, NY – October 28, 2026 – Hanover Bancorp, Inc. (“Hanover” or “the Company” – NASDAQ: HNVR), the holding company for Hanover Community Bank (“the Bank”), today reported results for the quarter ended September 30, 2026 and the declaration of a $0.10 per share cash dividend on both common shares and Series A preferred shares payable on November 18, 2026 to stockholders of record on November 11, 2026.
Earnings Summary for the Quarter Ended September 30, 2026
The Company reported net income for the quarter ended September 30, 2026 of $4.3 million or $0.60 per diluted share (including Series A preferred shares) versus $3.5 million or $0.47 per diluted share (including Series A preferred shares) for the quarter ended September 30, 2025 and $4.1 million or $0.55 per diluted share (including Series A preferred shares) for the quarter ended June 30, 2026. Returns on average assets, average stockholders’ equity and average tangible equity were 0.75%, 8.44% and 9.32%, respectively, for the quarter ended September 30, 2026, versus 0.61%, 6.90% and 7.63%, respectively, for the comparable quarter of 2025, and 0.73%, 8.01% and 8.85%, respectively, for the quarter ended June 30, 2026.
The increase in net income recorded in the third quarter of 2026 from the comparable 2025 quarter resulted from an increase in net interest income and a decrease in provision for credit losses. This was partially offset by a decrease in non-interest income, consisting primarily of a decrease in gain on sale of loans held-for-sale due to a lower volume of SBA loan sales, an increase in non-interest expense, and an increase in income tax expense.
The increase in net income recorded over the prior linked quarter resulted from an increase in net interest income and a decrease in non-interest expense. This was partially offset by a decrease in non-interest income, consisting primarily of a decrease in gain on sale of loans held-for-sale and loan servicing and fee income, and increases in the provision for credit losses and income tax expense. The decrease in non-interest expense is primarily related to decreases in compensation and benefits, professional fees (particularly legal), and other operating expenses, primarily SBA broker fees. In the June 30, 2026 quarter, the Company incurred $240 thousand of debt extinguishment charges which were recorded in other operating expenses.
Net interest income was $17.0 million for the quarter ended September 30, 2026, an increase of $1.8 million, or 11.84% from the comparable 2025 quarter. This increase was due to improvement in the Company’s net interest margin to 3.02% in the 2026 quarter from 2.74% in the comparable 2025 quarter. The cost of interest-bearing liabilities decreased to 3.50% in the 2026 quarter from 3.89% in the comparable 2025 quarter, a decrease of 39 basis points. This decrease was partially offset by a 5 basis point decrease in the yield on interest earning assets to 5.89% in the 2026 quarter from 5.94% in the third quarter of 2025. Net interest income on a linked quarter basis increased by $0.3 million or 1.52%.
2
Earnings Summary for the Nine Months Ended September 30, 2026
For the nine months ended September 30, 2026, the Company reported net income of $10.3 million or $1.40 per diluted share (including Series A preferred shares), versus $7.5 million or $1.00 per diluted share (including Series A preferred shares) in the comparable 2025 nine-month period. The Company recorded adjusted (non-GAAP) net income (excluding debt extinguishment charges and severance expenses of $2.3 million, net of tax) of $12.6 million or $1.71 per diluted share in the nine months ended September 30, 2026, versus adjusted (non-GAAP) net income (excluding core system conversion expenses of $2.6 million, net of tax) of $10.0 million or $1.34 per diluted share in the comparable 2025 nine-month period. Returns on average assets, average stockholders’ equity and average tangible equity were 0.60%, 6.75% and 7.46%, respectively, for the nine months ended September 30, 2026, versus 0.44%, 5.00% and 5.54%, respectively, for the comparable 2025 period. Adjusted (non-GAAP) returns, exclusive of debt extinguishment charges and severance expenses, on average assets, average stockholders’ equity and average tangible equity were 0.74%, 8.28% and 9.15%, respectively, in the nine months ended September 30, 2026, versus 0.60%, 6.72% and 7.45%, respectively, in the comparable 2025 period, exclusive of core system conversion expenses.
The increase in net income recorded for the nine months ended September 30, 2026 from the comparable 2025 period is due to an increase in net interest income and a decrease in the provision for credit losses. These were partially offset by a decrease in non-interest income, consisting primarily of a decrease in gain on sale of loans held-for-sale, an increase in income tax expense and an increase in non-interest expenses, particularly compensation and benefits, severance expenses, occupancy and equipment and other operating expenses which included $240 thousand of debt extinguishment charges. In February 2025, the Company incurred $3.2 million of one-time core system conversion expenses. Severance expenses for the nine months ended September 30, 2026 were primarily related to a severance benefit of approximately $2.2 million to the former President of the Company and the Bank whose last day of employment was March 31, 2026.
Net interest income was $50.2 million for the nine months ended September 30, 2026, an increase of $5.5 million, or 12.35% from the comparable 2025 period, due to the improvement of the Company’s net interest margin to 3.03% in the 2026 period from 2.73% in the comparable 2025 period. The cost of interest-bearing liabilities decreased to 3.49% in the nine months ended September 30, 2026 from 3.95% in the comparable 2025 period, a decrease of 46 basis points. This decrease was partially offset by a 9 basis point decrease in the yield on interest earning assets to 5.89% in the 2026 period from 5.98% in the comparable 2025 period.
Michael P. Puorro, Chairman and Chief Executive Officer, commented on the Company’s quarterly results: "Our third quarter performance demonstrates the powerful momentum across our franchise, highlighted by record net interest income and our highest pre-provision net revenue since 2022. Driven by strong loan growth, net income rose to $4.3 million, or $0.60 per diluted share, for the third quarter of 2026. Our balance sheet eclipsed $2.4 billion in total assets this quarter, fueled by the deepening of our niche-residential lending and CRE and C&I banking relationships, which propelled demand deposits to a record $255.1 million and loan production to $178.7 million.
We remain highly committed to delivering robust shareholder returns, as reflected in our improved returns on average assets and tangible equity, our ongoing share repurchase program, and the declaration of our $0.10 per share quarterly cash dividend. Looking ahead, we are incredibly excited about our new full-service Riverhead branch, which opened on September 30th. This expansion marks a pivotal step in bringing our comprehensive suite of banking services closer to our clients on the East End of Long Island, positioning us well for continued, disciplined growth."
Balance Sheet Highlights
Total assets were $2.44 billion at September 30, 2026 versus $2.38 billion at December 31, 2025. Total securities available for sale (“AFS”) at September 30, 2026 were $138.2 million, an increase of $38.7 million from December 31, 2025, primarily driven by growth in U.S. GSE residential mortgage-backed securities, collateralized loan obligations and corporate bonds, offset by decreases in U.S. Treasury securities and collateralized mortgage obligations.
Total deposits were $2.11 billion at September 30, 2026 versus $2.03 billion at December 31, 2025. Our loan to deposit ratio was 99% both at September 30, 2026 and December 31, 2025.
3
Borrowings at September 30, 2026 were $59.8 million, with a weighted average rate and term of 3.49% and 48 months, respectively. At September 30, 2026 and December 31, 2025, the Company had $59.8 million (net of $410 thousand deferred prepayment penalty) and $100.7 million, respectively, of term FHLB advances outstanding. The Company had no FHLB overnight borrowings outstanding at September 30, 2026 and December 31, 2025. The Company had no borrowings outstanding under lines of credit with correspondent banks at September 30, 2026 and December 31, 2025.
Stockholders’ equity was $202.9 million at September 30, 2026 as compared to $200.3 million at December 31, 2025. Retained earnings increased by $8.1 million due primarily to net income of $10.3 million for the nine months ended September 30, 2026, which was offset by $2.2 million of dividends declared. The accumulated other comprehensive loss at September 30, 2026 was 1.13% of total equity and was comprised of a $2.3 million after tax net unrealized loss on the investment portfolio that was partially offset by a $0.1 million after tax net unrealized gain on derivatives. During the nine months ended September 30, 2026, the Company repurchased 192,718 shares of its common stock at an aggregate cost of $4.8 million. Book value per share (including Series A preferred shares) increased to $27.95 at September 30, 2026 from $27.02 at December 31, 2025. Tangible book value per share (including Series A preferred shares) increased to $25.29 at September 30, 2026 from $24.41 at December 31, 2025.
Loan Portfolio
The Bank’s loan portfolio was $2.08 billion at September 30, 2026 and $2.0 billion at December 31, 2025. At September 30, 2026, the Company’s residential loan portfolio (including home equity) amounted to $806.5 million, with an average loan balance of $494 thousand and a weighted average loan-to-value ratio of 56%. Commercial real estate (including construction) and multifamily loans totaled $1.12 billion at September 30, 2026, with an average loan balance of $1.6 million and a weighted average loan-to-value ratio of 58%. As discussed below, approximately 34% of the multifamily portfolio is subject to rent regulation. The Company’s commercial real estate concentration ratio decreased to 358% of capital at September 30, 2026 from 362% at December 31, 2025, with loans secured by office space accounting for 2% of the total loan portfolio and totaling $41.2 million at September 30, 2026. The Company’s loan pipeline at September 30, 2026 is approximately $221.1 million.
The Bank originates loans for its portfolio and for sale in the secondary market under a residential flow origination program. During the quarters ended September 30, 2026 and 2025, the Company sold $18.7 million and $21.4 million, respectively, of residential loans under its flow origination program and recorded gains on sale of loans held-for-sale of $0.5 million and $0.5 million, respectively. Residential loan originations were $110 million for the quarter ended September 30, 2026.
During the quarters ended September 30, 2026 and 2025, the Company sold approximately $1.3 million and $11.4 million, respectively, of government guaranteed SBA loans and recorded gains on sale of loans held-for-sale of $0.1 million and $0.9 million, respectively. SBA loan originations and gains on sale continue to be lower due to a less favorable economic outlook for many business owners along with the Bank’s ongoing prudent decision to tighten credit. Together, these factors contributed to lower SBA loan volume, approval levels, and related gain-on-sale income.
4
Commercial Real Estate Statistics
A significant portion of the Bank’s commercial real estate portfolio consists of loans secured by Multifamily and CRE Investor-owned real estate that are predominantly subject to fixed interest rates for an initial period of 5 years. The Bank’s exposure to Land/Construction loans as of September 30, 2026 is not significant at $10.7 million, all of which are at floating interest rates. As shown below, as of September 30, 2026, 12% of the loan balances in these combined portfolios will either have a scheduled rate reset or mature in 2026, with another 51% with scheduled rate resets or maturing in 2027.
Multifamily Market Rent Portfolio Fixed Rate Reset/Maturity Schedule | | Multifamily Stabilized Rent Portfolio Fixed Rate Reset/Maturity Schedule | ||||||||||||||||||||||
Calendar Period (Loan Data as of 9/30/2026) |
| # Loans | | Total O/S ($000's omitted) | | Avg O/S ($000's omitted) | | Avg Interest Rate | | Calendar Period (Loan Data as of 9/30/2026) | | # Loans | | Total O/S ($000's omitted) | | Avg O/S ($000's omitted) | | Avg Interest Rate | ||||||
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| |
| | |
| | |
| | |
| |
| | | | |
| | | | | |
2026 | | 16 | | $ | 52,999 | | $ | 3,312 | | 3.59 | % | | 2026 | | 10 | | $ | 24,390 | | $ | 2,439 | | 3.97 | % |
2027 | | 70 | | | 182,428 | | | 2,606 | | 4.40 | % | | 2027 | | 52 | | | 126,803 | | | 2,439 | | 4.32 | % |
2028 | | 15 | | | 20,398 | | | 1,360 | | 6.13 | % | | 2028 | | 10 | | | 8,272 | | | 827 | | 6.84 | % |
2029 | | 7 | | | 11,081 | | | 1,583 | | 6.58 | % | | 2029 | | 4 | | | 4,212 | | | 1,053 | | 6.38 | % |
2030 | | 8 | | | 20,023 | | | 2,503 | | 6.19 | % | | 2030 | | 7 | | | 13,398 | | | 1,914 | | 6.32 | % |
2031+ | | 28 | | | 92,369 | | | 3,299 | | 6.48 | % | | 2031+ | | 8 | | | 15,229 | | | 1,904 | | 7.05 | % |
Fixed Rate | | 144 | | | 379,298 | | | 2,634 | | 5.04 | % | | Fixed Rate | | 91 | | | 192,304 | | | 2,113 | | 4.78 | % |
Floating Rate | | 2 | | | 1,333 | | | 667 | | 8.34 | % | | Floating Rate | | 1 | | | 456 | | | 456 | | 9.00 | % |
Total | | 146 | | $ | 380,631 | | $ | 2,607 | | 5.06 | % | | Total | | 92 | | $ | 192,760 | | $ | 2,095 | | 4.80 | % |
CRE Investor Portfolio Fixed Rate Reset/Maturity Schedule | |||||||||||
Calendar Period (Loan Data as of 9/30/2026) |
| # Loans | | Total O/S ($000's omitted) | | Avg O/S ($000's omitted) | | Avg Interest Rate | |||
|
| |
| | |
| | |
| | |
2026 | | 11 | | $ | 27,620 | | $ | 2,511 | | 6.46 | % |
2027 | | 81 | | | 125,336 | | | 1,547 | | 4.75 | % |
2028 | | 27 | | | 28,417 | | | 1,052 | | 6.66 | % |
2029 | | 7 | | | 23,587 | | | 3,370 | | 6.53 | % |
2030 | | 14 | | | 13,229 | | | 945 | | 6.98 | % |
2031+ | | 32 | | | 49,344 | | | 1,542 | | 6.77 | % |
Fixed Rate | | 172 | | | 267,533 | | | 1,555 | | 5.77 | % |
Floating Rate | | 7 | | | 5,397 | | | 771 | | 8.18 | % |
Total CRE-Inv. | | 179 | | $ | 272,930 | | $ | 1,525 | | 5.82 | % |
5
Stabilized Multifamily Pro Forma Stress Results
The table below reflects a pro forma stressed evaluation of the Bank’s Multifamily stabilized loan portfolio as of September 30, 2026, using the primary assumption for a revised Debt Service Coverage Ratio (“DSCR”) calculation, for all loans where the current interest rate is below 6.75%. The current balance for these loans is recast at 6.75% with a 30-year amortization. The chart below reflects the impact of these adjustments on the portfolio. The projected loan to value (“LTV”) assumption resets all loans using a 6.25% cap rate and the last reported property net operating income (“NOI”) to determine an implied property valuation and based on the current loan balance, the resultant LTV.
Multifamily Stabilized Rent Portfolio (Loan Data as of 9/30/2026) | ||||||||||||||
DSCR Range |
| # Loans | | Total O/S ($000's omitted) | | % of Total MF Portfolio | | Current Weighted Average LTV | | Projected Weighted Average LTV | ||||
|
| |
| | |
| | | | |
| | | |
< 1.0 | | 8 | | $ | 21,739 | | 4 | % | | 62 | % | | 98 | % |
1.0 < x <1.2 | | 18 | | | 57,734 | | 10 | % | | 63 | % | | 73 | % |
1.2 < x <1.3 | | 16 | | | 36,518 | | 6 | % | | 64 | % | | 66 | % |
1.3 < x <1.5 | | 21 | | | 44,929 | | 8 | % | | 58 | % | | 59 | % |
1.5 < x <2.0 | | 19 | | | 26,055 | | 5 | % | | 61 | % | | 52 | % |
x > 2.0 | | 10 | | | 5,785 | | 1 | % | | 39 | % | | 29 | % |
Total | | 92 | | $ | 192,760 | | 34 | % | | 61 | % | | 67 | % |
As reflected above, as of September 30, 2026, only 8 loans totaling $22 million in the multifamily rent stabilized portfolio would have a pro forma DSCR less than 1x, which represents 4% of the total multifamily portfolio. The remainder of this portfolio, totaling $171 million and representing 30% of the entire multifamily portfolio, would possess pro forma DSCR’s greater than 1x while maintaining a projected weighted average LTV well within our policy guidelines. Additionally, as of September 30, 2026, 72% of the rent stabilized loans and 74% of the entire multifamily portfolio are further enhanced with personal guarantees from the principals of the borrowers. Based on the maturities and rate resets in the previous 12 months, we believe the overall demand for multifamily housing in our market will allow our borrowers to address any adverse impact proactively. The Bank continues to successfully manage multifamily loans with scheduled rate repricing or maturities. Matured loans that qualified for renewal have been retained while others have paid off in full through refinances. The majority of the rate resetting loans remain as performing loans at the new higher interest rate.
6
Rental breakdown of the Multifamily portfolio
The table below segments our portfolio of loans secured by Multifamily properties based on rental terms and location as of September 30, 2026. As shown below, 66% of the combined portfolio is secured by properties subject to free market rental terms, which is the dominant tenant type. Both the Market Rent and Stabilized Rent segments of our portfolio present very similar average borrower profiles. The portfolio is primarily located in the New York City boroughs of Brooklyn, the Bronx and Queens.
Multifamily Loan Portfolio - Loans by Rent Type (Loan Data as of 9/30/2026) | ||||||||||||||||||
Rent Type |
| # Notes | | Outstanding Loan Balance | | % of Total Multifamily | | Avg Loan Size | | LTV | | Current DSCR | | Avg # of Units | ||||
|
| |
| ($000's omitted) |
| | | | ($000's omitted) |
| | |
| | | | ||
| | | | | | | | | | | | | | | | | | |
Market | | 146 | | $ | 380,631 | | 66 | % | | $ | 2,607 | | 60.8 | % | | 1.38 | | 11 |
Location | | | | | | | | | | | | | | | | | | |
Manhattan | | 7 | | $ | 24,263 | | 4 | % | | $ | 3,466 | | 62.5 | % | | 1.33 | | 13 |
Other NYC | | 97 | | $ | 274,357 | | 48 | % | | $ | 2,828 | | 60.3 | % | | 1.35 | | 9 |
Outside NYC | | 42 | | $ | 82,011 | | 14 | % | | $ | 1,953 | | 62.2 | % | | 1.50 | | 14 |
| | | | | | | | | | | | | | | | | | |
Stabilized | | 92 | | $ | 192,760 | | 34 | % | | $ | 2,095 | | 60.8 | % | | 1.43 | | 12 |
Location | | | | | | | | | | | | | | | | | | |
Manhattan | | 7 | | $ | 10,022 | | 2 | % | | $ | 1,432 | | 49.6 | % | | 1.64 | | 19 |
Other NYC | | 74 | | $ | 165,978 | | 29 | % | | $ | 2,243 | | 61.4 | % | | 1.40 | | 11 |
Outside NYC | | 11 | | $ | 16,760 | | 3 | % | | $ | 1,524 | | 61.6 | % | | 1.62 | | 14 |
Office Property Exposure
The Bank’s exposure to the Office market is not significant. Loans secured by office space accounted for 2% of the total loan portfolio at September 30, 2026, with a total balance of $41.2 million, of which less than 1% is located in Manhattan. The pool has a 2.94x weighted average DSCR and a 55% weighted average LTV as of September 30, 2026.
Asset Quality and Allowance for Credit Losses
At September 30, 2026, the Bank reported $29.1 million in non-performing loans compared to $28.3 million at June 30, 2026 and $21.6 million at December 31, 2025. Excluding the portion that is government guaranteed by the SBA, non-performing loans were $22.1 million at September 30, 2026 compared to $21.3 million at June 30, 2026 and $17.9 million at December 31, 2025. At September 30, 2026 non-performing loans were 1.40% of total loans outstanding versus 1.08% at December 31, 2025. Excluding the SBA guaranteed portion, non-performing loans were 1.06% of total loans outstanding at September 30, 2026 versus 0.90% at December 31, 2025.
During the third quarter of 2026, the Bank recorded a provision for credit losses of $1.1 million. The allowance for credit losses was $19.9 million at September 30, 2026 versus $18.7 million at December 31, 2025. The allowance for credit losses as a percentage of total loans was 0.96% at September 30, 2026 and 0.93% at December 31, 2025.
Net Interest Margin
The Bank’s net interest margin increased to 3.02% for the quarter ended September 30, 2026 compared to 2.74% in the quarter ended September 30, 2025. The Bank’s net interest margin was 3.10% in the quarter ended June 30, 2026. The decrease from the prior linked quarter was primarily related to an increase in the average cost of deposits due to the anticipated Federal Reserve interest rate hike and the competitive deposit environment. Any further increases in cost of funds are expected to be mitigated by higher yielding loan production and rate resets.
7
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, Riverhead, 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.
Non-GAAP Disclosure
This discussion, including the financial statements attached thereto, includes non-GAAP financial measures which include the Company’s adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average equity, pre-provision net revenue (“PPNR”), PPNR return on average assets, adjusted PPNR, adjusted PPNR return on average assets, return on average tangible equity, adjusted return on average tangible equity, adjusted non-interest expense to average assets, efficiency ratio, adjusted efficiency ratio, tangible common equity (“TCE”) ratio, TCE, tangible assets and tangible book value per share. 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 provides 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 and provides greater comparability across time periods. While management uses 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 U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. 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 and reconciliations of the aforementioned non-GAAP financial measures, reconciliations to the most comparable U.S. GAAP measures are provided in the tables that follow.
8
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 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 relating to rent regulation and housing, including recent legislative action in New York City to freeze rents on certain rent-regulated properties; (11) changes and trends in the securities markets may adversely impact Hanover Bancorp, Inc.; (12) a delayed or incomplete resolution of regulatory issues could adversely impact our planning; (13) 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; (14) the impact of the strategic credit cleanup that we implemented during the fourth quarter of 2025 and the wholesale funding restructuring we implemented during the first quarter of 2026; (15) 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; (16) our ability to hire and retain key personnel; and (17) 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.
9
HANOVER BANCORP, INC.
STATEMENTS OF CONDITION (unaudited)
(dollars in thousands)
| | September 30, | | June 30, | | December 31, | |||
| | 2026 | | 2026 | | 2025 | |||
Assets | | | | | | | | | |
Cash and cash equivalents | | $ | 142,579 | | $ | 141,243 | | $ | 208,904 |
Securities-available for sale, at fair value | | | 138,215 | | | 135,043 | | | 99,552 |
Investments-held to maturity | | | 865 | | | 912 | | | 1,017 |
Loans held for sale | | | 3,615 | | | 2,928 | | | 6,407 |
| | | | | | | | | |
Loans, net of deferred loan fees and costs | | | 2,084,650 | | | 1,997,893 | | | 2,000,749 |
Less: allowance for credit losses | | | (19,917) | | | (19,139) | | | (18,694) |
Loans, net | | | 2,064,733 | | | 1,978,754 | | | 1,982,055 |
| | | | | | | | | |
Goodwill | | | 19,168 | | | 19,168 | | | 19,168 |
Premises & fixed assets | | | 13,891 | | | 14,052 | | | 14,313 |
Operating lease assets | | | 6,698 | | | 7,006 | | | 9,855 |
Bank Owned life Insurance ("BOLI") | | | 15,157 | | | — | | | — |
Other assets | | | 36,896 | | | 37,524 | | | 41,825 |
Assets | | $ | 2,441,817 | | $ | 2,336,630 | | $ | 2,383,096 |
| | | | | | | | | |
Liabilities and stockholders’ equity | | | | | | | | | |
Core deposits | | $ | 1,601,591 | | $ | 1,506,501 | | $ | 1,518,491 |
Time deposits | | | 509,317 | | | 506,338 | | | 509,896 |
Total deposits | | | 2,110,908 | | | 2,012,839 | | | 2,028,387 |
| | | | | | | | | |
Borrowings | | | 59,840 | | | 59,810 | | | 100,725 |
Subordinated debentures | | | 34,266 | | | 34,229 | | | 24,743 |
Operating lease liabilities | | | 7,324 | | | 7,628 | | | 10,567 |
Other liabilities | | | 26,564 | | | 19,377 | | | 18,408 |
Liabilities | | | 2,238,902 | | | 2,133,883 | | | 2,182,830 |
| | | | | | | | | |
Stockholders’ equity | | | 202,915 | | | 202,747 | | | 200,266 |
Liabilities and stockholders’ equity | | $ | 2,441,817 | | $ | 2,336,630 | | $ | 2,383,096 |
10
HANOVER BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(dollars in thousands, except per share data)
| | Three Months Ended | | | Nine Months Ended | ||||||||
| | 9/30/2026 | | 9/30/2025 | | | 9/30/2026 | | 9/30/2025 | ||||
Interest income | | $ | 33,201 | | $ | 32,994 | | | $ | 97,559 | | $ | 97,880 |
Interest expense | | | 16,175 | | | 17,771 | | | | 47,400 | | | 53,233 |
Net interest income | | | 17,026 | | | 15,223 | | | | 50,159 | | | 44,647 |
Provision for credit losses | | | 1,100 | | | 1,325 | | | | 2,130 | | | 4,282 |
Net interest income after provision for credit losses | | | 15,926 | | | 13,898 | | | | 48,029 | | | 40,365 |
| | | | | | | | | | | | | |
Loan servicing and fee income | | | 960 | | | 1,057 | | | | 3,166 | | | 3,221 |
Service charges on deposit accounts | | | 146 | | | 237 | | | | 515 | | | 516 |
Gain on sale of loans held-for-sale | | | 550 | | | 1,451 | | | | 3,370 | | | 6,101 |
BOLI Income | | | 157 | | | — | | | | 157 | | | — |
Other operating income | | | 441 | | | 40 | | | | 586 | | | 240 |
Non-interest income | | | 2,254 | | | 2,785 | | | | 7,794 | | | 10,078 |
| | | | | | | | | | | | | |
Compensation and benefits | | | 6,919 | | | 6,774 | | | | 22,074 | | | 21,009 |
Severance expenses | | | — | | | — | | | | 2,340 | | | — |
Conversion expenses | | | — | | | — | | | | — | | | 3,180 |
Occupancy and equipment | | | 2,075 | | | 1,960 | | | | 6,155 | | | 5,706 |
Data processing | | | 481 | | | 313 | | | | 1,334 | | | 1,414 |
Professional fees | | | 687 | | | 732 | | | | 2,490 | | | 2,397 |
Federal deposit insurance premiums | | | 324 | | | 334 | | | | 1,050 | | | 1,036 |
Other operating expenses | | | 1,909 | | | 1,900 | | | | 6,206 | | | 5,883 |
Non-interest expense | | | 12,395 | | | 12,013 | | | | 41,649 | | | 40,625 |
| | | | | | | | | | | | | |
Income before income taxes | | | 5,785 | | | 4,670 | | | | 14,174 | | | 9,818 |
Income tax expense | | | 1,436 | | | 1,179 | | | | 3,887 | | | 2,363 |
| | | | | | | | | | | | | |
Net income | | $ | 4,349 | | $ | 3,491 | | | $ | 10,287 | | $ | 7,455 |
| | | | | | | | | | | | | |
Earnings per share ("EPS"):(1) | | | | | | | | | | | | | |
Basic | | $ | 0.60 | | $ | 0.47 | | | $ | 1.40 | | $ | 1.00 |
Diluted | | $ | 0.60 | | $ | 0.47 | | | $ | 1.40 | | $ | 1.00 |
| | | | | | | | | | | | | |
Average shares outstanding for basic EPS (1)(2) | | | 7,292,462 | | | 7,477,647 | | | | 7,373,819 | | | 7,480,737 |
Average shares outstanding for diluted EPS (1)(2) | | | 7,292,462 | | | 7,483,319 | | | | 7,373,819 | | | 7,486,459 |
| (1) | Calculation includes common stock and Series A preferred stock. |
| (2) | Average shares outstanding before subtracting participating securities. |
11
HANOVER BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
QUARTERLY TREND
(dollars in thousands, except per share data)
| | Three Months Ended | |||||||||||||
| | 9/30/2026 | | 6/30/2026 | | 3/31/2026 | | 12/31/2025 | | 9/30/2025 | |||||
Interest income | | $ | 33,201 | | $ | 32,066 | | $ | 32,292 | | $ | 32,599 | | $ | 32,994 |
Interest expense | | | 16,175 | | | 15,295 | | | 15,930 | | | 16,769 | | | 17,771 |
Net interest income | | | 17,026 | | | 16,771 | | | 16,362 | | | 15,830 | | | 15,223 |
Provision for credit losses | | | 1,100 | | | 500 | | | 530 | | | 6,100 | | | 1,325 |
Net interest income after provision for credit losses | | | 15,926 | | | 16,271 | | | 15,832 | | | 9,730 | | | 13,898 |
| | | | | | | | | | | | | | | |
Loan servicing and fee income | | | 960 | | | 1,164 | | | 1,042 | | | 1,049 | | | 1,057 |
Service charges on deposit accounts | | | 146 | | | 119 | | | 250 | | | 234 | | | 237 |
Gain on sale of loans held-for-sale | | | 550 | | | 1,377 | | | 1,443 | | | 1,244 | | | 1,451 |
Gain on sale of investments | | | — | | | — | | | — | | | 215 | | | — |
BOLI Income | | | 157 | | | — | | | — | | | — | | | — |
Other operating income | | | 441 | | | 136 | | | 9 | | | 23 | | | 40 |
Non-interest income | | | 2,254 | | | 2,796 | | | 2,744 | | | 2,765 | | | 2,785 |
| | | | | | | | | | | | | | | |
Compensation and benefits | | | 6,919 | | | 7,333 | | | 7,822 | | | 6,877 | | | 6,774 |
Severance expenses | | | — | | | 35 | | | 2,305 | | | — | | | — |
Occupancy and equipment | | | 2,075 | | | 2,012 | | | 2,068 | | | 2,036 | | | 1,960 |
Data processing | | | 481 | | | 431 | | | 422 | | | 339 | | | 313 |
Professional fees | | | 687 | | | 897 | | | 906 | | | 752 | | | 732 |
Federal deposit insurance premiums | | | 324 | | | 364 | | | 362 | | | 352 | | | 334 |
Other operating expenses | | | 1,909 | | | 2,576 | | | 1,721 | | | 2,003 | | | 1,900 |
Non-interest expense | | | 12,395 | | | 13,648 | | | 15,606 | | | 12,359 | | | 12,013 |
| | | | | | | | | | | | | | | |
Income before income taxes | | | 5,785 | | | 5,419 | | | 2,970 | | | 136 | | | 4,670 |
Income tax expense | | | 1,436 | | | 1,355 | | | 1,096 | | | 103 | | | 1,179 |
| | | | | | | | | | | | | | | |
Net income | | $ | 4,349 | | $ | 4,064 | | $ | 1,874 | | $ | 33 | | $ | 3,491 |
| | | | | | | | | | | | | | | |
Earnings per share ("EPS"):(1) | | | | | | | | | | | | | | | |
Basic | | $ | 0.60 | | $ | 0.55 | | $ | 0.25 | | $ | — | | $ | 0.47 |
Diluted | | $ | 0.60 | | $ | 0.55 | | $ | 0.25 | | $ | — | | $ | 0.47 |
| | | | | | | | | | | | | | | |
Average shares outstanding for basic EPS (1)(2) | | | 7,292,462 | | | 7,396,444 | | | 7,434,107 | | | 7,443,861 | | | 7,477,647 |
Average shares outstanding for diluted EPS (1)(2) | | | 7,292,462 | | | 7,396,444 | | | 7,439,004 | | | 7,447,556 | | | 7,483,319 |
| (1) | Calculation includes common stock and Series A preferred stock. |
| (2) | Average shares outstanding before subtracting participating securities. |
12
HANOVER BANCORP, INC.
CONSOLIDATED NON-GAAP FINANCIAL INFORMATION (1) (unaudited)
(dollars in thousands, except per share data)
| | Three Months Ended (2) | | | Nine Months Ended (2) | | ||||||||
| | 9/30/2026 | | 9/30/2025 | | | 9/30/2026 | | 9/30/2025 | | ||||
| | | | | | | | | | | | | | |
Net income, as reported | | $ | 4,349 | | $ | 3,491 | | | $ | 10,287 | | $ | 7,455 | |
Adjustments: | | | | | | | | | | | | | | |
Debt extinguishment charges | | | — | | | — | | | | 240 | | | — | |
Conversion expenses | | | — | | | — | | | | — | | | 3,180 | |
Severance expenses | | | — | | | — | | | | 2,340 | | | — | |
Total adjustments, before income taxes | | | — | | | — | | | | 2,580 | | | 3,180 | |
Income tax effect of adjustments | | | — | | | — | | | | 251 | | | 608 | |
Total adjustments, after income taxes | | | — | | | — | | | | 2,329 | | | 2,572 | |
Adjusted net income (non-GAAP) | | $ | 4,349 | | $ | 3,491 | | | $ | 12,616 | | $ | 10,027 | |
| | | | | | | | | | | | | | |
Diluted earnings per share (3) | | $ | 0.60 | | $ | 0.47 | | | $ | 1.40 | | $ | 1.00 | |
Adjustments for non-recurring charges, net of tax | | | — | | | — | | | | 0.31 | | | 0.34 | |
Adjusted diluted earnings per share (non-GAAP) (3) | | $ | 0.60 | | $ | 0.47 | | | $ | 1.71 | | $ | 1.34 | |
| | | | | | | | | | | | | | |
Efficiency ratio (non-GAAP) (4) | | | 64.29 | % | | 66.71 | % | | | 71.87 | % | | 74.23 | % |
Adjustments: | | | | | | | | | | | | | | |
Debt extinguishment charges | | | — | % | | — | % | | | (0.41) | % | | — | % |
Conversion expenses | | | — | % | | — | % | | | — | % | | (5.81) | % |
Severance expenses | | | — | % | | — | % | | | (4.04) | % | | — | % |
Adjusted efficiency ratio (non-GAAP) | | | 64.29 | % | | 66.71 | % | | | 67.42 | % | | 68.42 | % |
| | | | | | | | | | | | | | |
Return on average assets | | | 0.75 | % | | 0.61 | % | | | 0.60 | % | | 0.44 | % |
Adjustments for non-recurring charges, net of tax | | | — | % | | — | % | | | 0.14 | % | | 0.16 | % |
Adjusted return on average assets (non-GAAP) | | | 0.75 | % | | 0.61 | % | | | 0.74 | % | | 0.60 | % |
| | | | | | | | | | | | | | |
Return on average equity (3) | | | 8.44 | % | | 6.90 | % | | | 6.75 | % | | 5.00 | % |
Adjustments for non-recurring charges, net of tax | | | — | % | | — | % | | | 1.53 | % | | 1.72 | % |
Adjusted return on average equity (non-GAAP) (3) | | | 8.44 | % | | 6.90 | % | | | 8.28 | % | | 6.72 | % |
| | | | | | | | | | | | | | |
Return on average tangible equity (non-GAAP) (3)(5) | | | 9.32 | % | | 7.63 | % | | | 7.46 | % | | 5.54 | % |
Adjustments for non-recurring charges, net of tax | | | — | % | | — | % | | | 1.69 | % | | 1.91 | % |
Adjusted return on average tangible equity (non-GAAP) (3) | | | 9.32 | % | | 7.63 | % | | | 9.15 | % | | 7.45 | % |
| | | | | | | | | | | | | | |
Non-interest expense to average assets | | | 2.13 | % | | 2.10 | % | | | 2.44 | % | | 2.41 | % |
Adjustments for non-recurring charges | | | — | % | | — | % | | | (0.15) | % | | (0.19) | % |
Adjusted non-interest expense to average assets (non-GAAP) | | | 2.13 | % | | 2.10 | % | | | 2.29 | % | | 2.22 | % |
| (1) | 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 provides investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with U.S. 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 U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP. |
| (2) | Ratios for the three and nine months ended September 30, 2026 and 2025 are annualized. |
| (3) | Includes common stock and Series A preferred stock. |
| (4) | Represents non-interest expense divided by the sum of net interest income and non-interest income. |
| (5) | Represents net income divided by average total equity after deducting average goodwill and average core deposit intangible. |
Note: Prior period information has been adjusted to conform with current period presentation.
13
HANOVER BANCORP, INC.
CONSOLIDATED NON-GAAP FINANCIAL INFORMATION (1) (unaudited) (continued)
(dollars in thousands, except per share data)
| | Three Months Ended (2) | | | Nine Months Ended (2) | | ||||||||
| | 9/30/2026 | | 9/30/2025 | | | 9/30/2026 | | 9/30/2025 | | ||||
| | | | | | | | | | | | | | |
Net income, as reported | | $ | 4,349 | | $ | 3,491 | | | $ | 10,287 | | $ | 7,455 | |
Add: Provision for credit losses | | | 1,100 | | | 1,325 | | | | 2,130 | | | 4,282 | |
Add: Provision for income taxes | | | 1,436 | | | 1,179 | | | | 3,887 | | | 2,363 | |
Pre-provision net revenue (non-GAAP) | | $ | 6,885 | | $ | 5,995 | | | $ | 16,304 | | $ | 14,100 | |
| | | | | | | | | | | | | | |
Pre-provision net revenue return on average assets (non-GAAP) | | | 1.18 | % | | 1.05 | % | | | 0.95 | % | | 0.84 | % |
| | | | | | | | | | | | | | |
Pre-provision net revenue (non-GAAP) | | $ | 6,885 | | $ | 5,995 | | | $ | 16,304 | | $ | 14,100 | |
Adjustments: | | | | | | | | | | | | | | |
Debt extinguishment charges | | | — | | | — | | | | 240 | | | — | |
Conversion expenses | | | — | | | — | | | | — | | | 3,180 | |
Severance expenses | | | — | | | — | | | | 2,340 | | | — | |
Adjusted pre-provision net revenue (non-GAAP) | | $ | 6,885 | | $ | 5,995 | | | $ | 18,884 | | $ | 17,280 | |
| | | | | | | | | | | | | | |
Adjusted pre-provision net revenue return on average assets (non-GAAP) | | | 1.18 | % | | 1.05 | % | | | 1.11 | % | | 1.03 | % |
| (1) | 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 provides investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with U.S. 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 U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP. |
| (2) | Ratios for the three and nine months ended September 30, 2026 and 2025 are annualized. |
14
HANOVER BANCORP, INC.
SELECTED FINANCIAL DATA (unaudited)
(dollars in thousands)
| | Three Months Ended | | | Nine Months Ended | | ||||||||
| | 9/30/2026 | | 9/30/2025 | | | 9/30/2026 | | 9/30/2025 | | ||||
Profitability: | | | | | | | | | | | | | | |
Return on average assets | | | 0.75 | % | | 0.61 | % | | | 0.60 | % | | 0.44 | % |
Return on average equity (1) | | | 8.44 | % | | 6.90 | % | | | 6.75 | % | | 5.00 | % |
Return on average tangible equity (non-GAAP) (1)(5) | | | 9.32 | % | | 7.63 | % | | | 7.46 | % | | 5.54 | % |
Pre-provision net revenue return on average assets (non-GAAP) (6) | | | 1.18 | % | | 1.05 | % | | | 0.95 | % | | 0.84 | % |
Yield on average interest-earning assets | | | 5.89 | % | | 5.94 | % | | | 5.89 | % | | 5.98 | % |
Cost of average interest-bearing liabilities | | | 3.50 | % | | 3.89 | % | | | 3.49 | % | | 3.95 | % |
Net interest rate spread (2) | | | 2.39 | % | | 2.05 | % | | | 2.40 | % | | 2.03 | % |
Net interest margin (3) | | | 3.02 | % | | 2.74 | % | | | 3.03 | % | | 2.73 | % |
Non-interest expense to average assets | | | 2.13 | % | | 2.10 | % | | | 2.44 | % | | 2.41 | % |
Efficiency ratio (non-GAAP) (4) | | | 64.29 | % | | 66.71 | % | | | 71.87 | % | | 74.23 | % |
| | | | | | | | | | | | | | |
Average balances: | | | | | | | | | | | | | | |
Interest-earning assets | | $ | 2,235,698 | | $ | 2,203,326 | | | $ | 2,215,852 | | $ | 2,189,689 | |
Interest-bearing liabilities | | | 1,835,752 | | | 1,812,278 | | | | 1,817,345 | | | 1,803,446 | |
Loans | | | 2,039,760 | | | 1,978,375 | | | | 2,012,379 | | | 1,982,194 | |
Deposits | | | 1,971,562 | | | 1,904,262 | | | | 1,929,949 | | | 1,887,491 | |
Borrowings | | | 104,877 | | | 131,586 | | | | 120,944 | | | 135,987 | |
| (1) | Includes common stock and Series A preferred stock. |
| (2) | Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. |
| (3) | Represents net interest income divided by average interest-earning assets. |
| (4) | Represents non-interest expense divided by the sum of net interest income and non-interest income. |
| (5) | Represents net income divided by average total equity after deducting average goodwill and average core deposit intangible. |
| (6) | Refer to Consolidated Non-GAAP Financial Information for calculation. |
15
HANOVER BANCORP, INC.
SELECTED FINANCIAL DATA (unaudited)
(dollars in thousands, except share and per share data)
| | At or For the Three Months Ended | | ||||||||||
| | 9/30/2026 | | 6/30/2026 | | 3/31/2026 | | 12/31/2025 | | ||||
Asset quality: | | | | | | | | | | | | | |
Provision for credit losses - loans (1) | | $ | 1,100 | | $ | 500 | | $ | 500 | | $ | 5,925 | |
Net (charge-offs)/recoveries | | | (322) | | | (510) | | | (45) | | | (9,585) | |
Allowance for credit losses | | | 19,917 | | | 19,139 | | | 19,149 | | | 18,694 | |
Allowance for credit losses to total loans (2) | | | 0.96 | % | | 0.96 | % | | 0.96 | % | | 0.93 | % |
| | | | | | | | | | | | | |
Non-performing loans | | | | | | | | | | | | | |
Non-guaranteed portion | | $ | 22,074 | | $ | 21,283 | | $ | 17,749 | | $ | 17,934 | |
Guaranteed portion (4) | | | 7,034 | | | 7,057 | | | 6,837 | | | 3,670 | |
Total | | $ | 29,108 | | $ | 28,340 | | $ | 24,586 | | $ | 21,604 | |
| | | | | | | | | | | | | |
Non-performing loans/total loans | | | 1.40 | % | | 1.42 | % | | 1.23 | % | | 1.08 | % |
Non-performing loans, excluding guaranteed/total loans | | | 1.06 | % | | 1.07 | % | | 0.89 | % | | 0.90 | % |
Non-performing loans/total assets | | | 1.19 | % | | 1.21 | % | | 1.04 | % | | 0.91 | % |
Non-performing loans, excluding guaranteed/total assets | | | 0.90 | % | | 0.91 | % | | 0.75 | % | | 0.75 | % |
Allowance for credit losses/non-performing loans | | | 68.42 | % | | 67.53 | % | | 77.89 | % | | 86.53 | % |
Allowance for credit losses/non-performing loans, excluding guaranteed | | | 90.23 | % | | 89.93 | % | | 107.89 | % | | 104.24 | % |
| | | | | | | | | | | | | |
Capital (Bank only): | | | | | | | | | | | | | |
Tier 1 Capital | | $ | 215,721 | | $ | 215,650 | | $ | 210,222 | | $ | 204,431 | |
Tier 1 leverage ratio | | | 9.43 | % | | 9.76 | % | | 9.20 | % | | 9.05 | % |
Common equity tier 1 capital ratio | | | 12.85 | % | | 13.59 | % | | 13.32 | % | | 12.90 | % |
Tier 1 risk based capital ratio | | | 12.85 | % | | 13.59 | % | | 13.32 | % | | 12.90 | % |
Total risk based capital ratio | | | 14.07 | % | | 14.84 | % | | 14.57 | % | | 14.06 | % |
| | | | | | | | | | | | | |
Equity data: | | | | | | | | | | | | | |
Shares outstanding (3) | | | 7,259,409 | | | 7,330,424 | | | 7,431,661 | | | 7,410,403 | |
Stockholders’ equity | | $ | 202,915 | | $ | 202,747 | | $ | 201,441 | | $ | 200,266 | |
Book value per share (3) | | | 27.95 | | | 27.66 | | | 27.11 | | | 27.02 | |
Tangible common equity (3) | | | 183,587 | | | 183,408 | | | 182,089 | | | 180,902 | |
Tangible book value per share (3) | | | 25.29 | | | 25.02 | | | 24.50 | | | 24.41 | |
Tangible common equity (“TCE”) ratio (3) | | | 7.58 | % | | 7.91 | % | | 7.74 | % | | 7.65 | % |
| (1) | Excludes $0, $0, $30 thousand and $175 thousand provision for credit losses on unfunded commitments for the quarters ended 9/30/26, 6/30/26, 3/31/26 and 12/31/25, respectively. |
| (2) | Calculation excludes loans held for sale. |
| (3) | lncludes common stock and Series A preferred stock. |
| (4) | Guaranteed by the SBA. |
16
HANOVER BANCORP, INC.
STATISTICAL SUMMARY
QUARTERLY TREND
(unaudited, dollars in thousands, except share data)
| | 9/30/2026 | | 6/30/2026 | | 3/31/2026 | | 12/31/2025 | | ||||
Loan distribution (1): | | | | | | | | | | | | | |
Residential mortgages | | $ | 778,102 | | $ | 737,226 | | $ | 737,692 | | $ | 751,536 | |
Multifamily | | | 573,391 | | | 565,879 | | | 550,739 | | | 541,083 | |
Commercial real estate - OO | | | 273,717 | | | 272,413 | | | 271,692 | | | 275,747 | |
Commercial real estate - NOO | | | 268,768 | | | 244,574 | | | 257,787 | | | 260,903 | |
Commercial & industrial | | | 161,850 | | | 150,403 | | | 147,929 | | | 145,591 | |
Home equity | | | 28,388 | | | 26,949 | | | 26,439 | | | 25,459 | |
Consumer | | | 434 | | | 449 | | | 416 | | | 430 | |
| | | | | | | | | | | | | |
Total loans | | $ | 2,084,650 | | $ | 1,997,893 | | $ | 1,992,694 | | $ | 2,000,749 | |
| | | | | | | | | | | | | |
Sequential quarter growth rate | | | 4.34 | % | | 0.26 | % | | (0.40) | % | | 0.61 | % |
| | | | | | | | | | | | | |
CRE concentration ratio | | | 358 | % | | 346 | % | | 354 | % | | 362 | % |
| | | | | | | | | | | | | |
Loans sold during the quarter | | $ | 20,020 | | $ | 35,527 | | $ | 41,523 | | $ | 39,114 | |
| | | | | | | | | | | | | |
Funding distribution: | | | | | | | | | | | | | |
Demand | | $ | 255,119 | | $ | 254,270 | | $ | 237,346 | | $ | 247,786 | |
N.O.W. | | | 771,118 | | | 708,329 | | | 772,318 | | | 781,681 | |
Savings | | | 55,658 | | | 42,382 | | | 44,307 | | | 58,475 | |
Money market | | | 519,696 | | | 501,520 | | | 450,954 | | | 430,549 | |
Total core deposits | | | 1,601,591 | | | 1,506,501 | | | 1,504,925 | | | 1,518,491 | |
Time | | | 509,317 | | | 506,338 | | | 517,421 | | | 509,896 | |
Total deposits | | | 2,110,908 | | | 2,012,839 | | | 2,022,346 | | | 2,028,387 | |
Borrowings | | | 59,840 | | | 59,810 | | | 59,780 | | | 100,725 | |
Subordinated debentures | | | 34,266 | | | 34,229 | | | 59,021 | | | 24,743 | |
| | | | | | | | | | | | | |
Total funding sources | | $ | 2,205,014 | | $ | 2,106,878 | | $ | 2,141,147 | | $ | 2,153,855 | |
| | | | | | | | | | | | | |
Sequential quarter growth rate - total deposits | | | 4.87 | % | | (0.47) | % | | (0.30) | % | | 2.71 | % |
| | | | | | | | | | | | | |
Period-end core deposits/total deposits ratio | | | 75.87 | % | | 74.84 | % | | 74.41 | % | | 74.86 | % |
| | | | | | | | | | | | | |
Period-end demand deposits/total deposits ratio | | | 12.09 | % | | 12.63 | % | | 11.74 | % | | 12.22 | % |
| (1) | Excluding loans held for sale |
17
HANOVER BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (1) (unaudited)
(dollars in thousands, except share and per share amounts)
| | 9/30/2026 | | 6/30/2026 | | 3/31/2026 | | 12/31/2025 | | 9/30/2025 | | |||||
Tangible common equity | | | | | | | | | | | | | | | | |
Total equity (2) | | $ | 202,915 | | $ | 202,747 | | $ | 201,441 | | $ | 200,266 | | $ | 201,833 | |
Less: goodwill | | | (19,168) | | | (19,168) | | | (19,168) | | | (19,168) | | | (19,168) | |
Less: core deposit intangible | | | (160) | | | (171) | | | (184) | | | (196) | | | (209) | |
Tangible common equity (non-GAAP) (2) | | $ | 183,587 | | $ | 183,408 | | $ | 182,089 | | $ | 180,902 | | $ | 182,456 | |
| | | | | | | | | | | | | | | | |
Tangible common equity (“TCE”) ratio | | | | | | | | | | | | | | | | |
Tangible common equity (2) | | $ | 183,587 | | $ | 183,408 | | $ | 182,089 | | $ | 180,902 | | $ | 182,456 | |
Total assets | | | 2,441,817 | | | 2,336,630 | | | 2,370,949 | | | 2,383,096 | | | 2,331,580 | |
Less: goodwill | | | (19,168) | | | (19,168) | | | (19,168) | | | (19,168) | | | (19,168) | |
Less: core deposit intangible | | | (160) | | | (171) | | | (184) | | | (196) | | | (209) | |
Tangible assets (non-GAAP) | | $ | 2,422,489 | | $ | 2,317,291 | | $ | 2,351,597 | | $ | 2,363,732 | | $ | 2,312,203 | |
TCE ratio (non-GAAP) (2)(3) | | | 7.58 | % | | 7.91 | % | | 7.74 | % | | 7.65 | % | | 7.89 | % |
| | | | | | | | | | | | | | | | |
Tangible book value per share | | | | | | | | | | | | | | | | |
Tangible common equity (2) | | $ | 183,587 | | $ | 183,408 | | $ | 182,089 | | $ | 180,902 | | $ | 182,456 | |
Shares outstanding (2) | | | 7,259,409 | | | 7,330,424 | | | 7,431,661 | | | 7,410,403 | | | 7,467,390 | |
Tangible book value per share (non-GAAP) (2) | | $ | 25.29 | | $ | 25.02 | | $ | 24.50 | | $ | 24.41 | | $ | 24.43 | |
| (1) | 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 provides investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with U.S. 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 U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP. |
| (2) | Includes common stock and Series A preferred stock. |
| (3) | TCE ratio is calculated by dividing tangible common equity by tangible assets. |
18
HANOVER BANCORP, INC.
NET INTEREST INCOME ANALYSIS
For the Three Months Ended September 30, 2026 and 2025
(unaudited, dollars in thousands)
| | 2026 | | 2025 | | ||||||||||||||
| | Average | | | | | Average | | Average | | | | | Average | | ||||
| | Balance | | Interest | | Yield/Cost | | Balance | | Interest | | Yield/Cost | | ||||||
| | | | | | | | | | | | | | | | | | | |
Assets: | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 2,039,760 | | | 30,683 | | | 5.97 | % | $ | 1,978,375 | | $ | 29,951 | | | 6.01 | % |
Investment securities | | | 133,891 | | | 1,907 | | | 5.65 | % | | 99,816 | | | 1,604 | | | 6.38 | % |
Interest-earning cash | | | 56,123 | | | 526 | | | 3.72 | % | | 117,314 | | | 1,311 | | | 4.43 | % |
FHLB stock and other investments | | | 5,924 | | | 85 | | | 5.69 | % | | 7,821 | | | 128 | | | 6.49 | % |
Total interest-earning assets | | | 2,235,698 | | | 33,201 | | | 5.89 | % | | 2,203,326 | | | 32,994 | | | 5.94 | % |
Non interest-earning assets: | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 11,509 | | | | | | | | | 10,083 | | | | | | | |
Other assets | | | 62,428 | | | | | | | | | 53,860 | | | | | | | |
Total assets | | $ | 2,309,635 | | | | | | | | $ | 2,267,269 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Liabilities and stockholders’ equity: | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
Savings, N.O.W. and money market deposits | | $ | 1,264,508 | | | 10,381 | | | 3.26 | % | $ | 1,186,968 | | $ | 11,207 | | | 3.75 | % |
Time deposits | | | 466,367 | | | 4,502 | | | 3.83 | % | | 493,724 | | | 5,097 | | | 4.10 | % |
Total savings and time deposits | | | 1,730,875 | | | 14,883 | | | 3.41 | % | | 1,680,692 | | | 16,304 | | | 3.85 | % |
Borrowings | | | 70,636 | | | 636 | | | 3.57 | % | | 106,866 | | | 1,141 | | | 4.24 | % |
Subordinated debentures | | | 34,241 | | | 656 | | | 7.60 | % | | 24,720 | | | 326 | | | 5.23 | % |
Total interest-bearing liabilities | | | 1,835,752 | | | 16,175 | | | 3.50 | % | | 1,812,278 | | | 17,771 | | | 3.89 | % |
Demand deposits | | | 240,687 | | | | | | | | | 223,570 | | | | | | | |
Other liabilities | | | 28,647 | | | | | | | | | 30,622 | | | | | | | |
Total liabilities | | | 2,105,086 | | | | | | | | | 2,066,470 | | | | | | | |
Stockholders’ equity | | | 204,549 | | | | | | | | | 200,799 | | | | | | | |
Total liabilities & stockholders’ equity | | $ | 2,309,635 | | | | | | | | $ | 2,267,269 | | | | | | | |
Net interest rate spread | | | | | | | | | 2.39 | % | | | | | | | | 2.05 | % |
Net interest income/margin | | | | | $ | 17,026 | | | 3.02 | % | | | | $ | 15,223 | | | 2.74 | % |
19
HANOVER BANCORP, INC.
NET INTEREST INCOME ANALYSIS
For the Nine Months Ended September 30, 2026 and 2025
(unaudited, dollars in thousands)
| | 2026 | | 2025 | | ||||||||||||||
| | Average | | | | | Average | | Average | | | | | Average | | ||||
| | Balance | | Interest | | Yield/Cost | | Balance | | Interest | | Yield/Cost | | ||||||
| | | | | | | | | | | | | | | | | | | |
Assets: | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 2,012,379 | | | 90,089 | | | 5.99 | % | $ | 1,982,194 | | $ | 89,720 | | | 6.05 | % |
Investment securities | | | 118,264 | | | 4,928 | | | 5.57 | % | | 95,086 | | | 4,223 | | | 5.94 | % |
Interest-earning cash | | | 78,518 | | | 2,184 | | | 3.72 | % | | 104,452 | | | 3,488 | | | 4.46 | % |
FHLB stock and other investments | | | 6,691 | | | 358 | | | 7.15 | % | | 7,957 | | | 449 | | | 7.54 | % |
Total interest-earning assets | | | 2,215,852 | | | 97,559 | | | 5.89 | % | | 2,189,689 | | | 97,880 | | | 5.98 | % |
Non interest-earning assets: | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 11,225 | | | | | | | | | 9,603 | | | | | | | |
Other assets | | | 56,069 | | | | | | | | | 51,254 | | | | | | | |
Total assets | | $ | 2,283,146 | | | | | | | | $ | 2,250,546 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Liabilities and stockholders’ equity: | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
Savings, N.O.W. and money market deposits | | $ | 1,220,782 | | | 29,062 | | | 3.18 | % | $ | 1,176,852 | | $ | 33,311 | | | 3.78 | % |
Time deposits | | | 475,619 | | | 13,807 | | | 3.88 | % | | 490,607 | | | 15,475 | | | 4.22 | % |
Total savings and time deposits | | | 1,696,401 | | | 42,869 | | | 3.38 | % | | 1,667,459 | | | 48,786 | | | 3.91 | % |
Borrowings | | | 86,007 | | | 2,444 | | | 3.80 | % | | 111,280 | | | 3,469 | | | 4.17 | % |
Subordinated debentures | | | 34,937 | | | 2,087 | | | 7.99 | % | | 24,707 | | | 978 | | | 5.29 | % |
Total interest-bearing liabilities | | | 1,817,345 | | | 47,400 | | | 3.49 | % | | 1,803,446 | | | 53,233 | | | 3.95 | % |
Demand deposits | | | 233,548 | | | | | | | | | 220,032 | | | | | | | |
Other liabilities | | | 28,572 | | | | | | | | | 27,677 | | | | | | | |
Total liabilities | | | 2,079,465 | | | | | | | | | 2,051,155 | | | | | | | |
Stockholders’ equity | | | 203,681 | | | | | | | | | 199,391 | | | | | | | |
Total liabilities & stockholders’ equity | | $ | 2,283,146 | | | | | | | | $ | 2,250,546 | | | | | | | |
Net interest rate spread | | | | | | | | | 2.40 | % | | | | | | | | 2.03 | % |
Net interest income/margin | | | | | $ | 50,159 | | | 3.03 | % | | | | $ | 44,647 | | | 2.73 | % |
20