Hanover Bancorp (HNVR) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $1.5 million ($0.20 per diluted share), down from $4.1 million ($0.55 per share) in Q1 2024, primarily due to higher non-interest expenses, including $3.2 million in core system conversion costs; adjusted net income (excluding $2.6M–$3.2M in conversion expenses) was $4.1 million, matching prior year adjusted results.

• Total assets stood at $2.3 billion, total deposits at $1.9 billion, and total stockholders' equity at $196.6 million as of March 31, 2025.

• The company completed a core processing system conversion to FIS Horizon in February 2025, incurring significant non-recurring expenses and rebranding with a new logo.

• The bank continues to expand its commercial lending and deposit activities, with a new branch expected to open in Port Jefferson, NY in mid-2025.

• Board declared a $0.10/share cash dividend payable May 14, 2025.

Financial highlights

• Revenue for Q1 2025 was $18.4 million, up from $16.5 million in Q1 2024.

• Net interest income rose to $14.6 million, up 13.1% year-over-year, with net interest margin expanding to 2.68% from 2.41%.

• Non-interest expense rose by $5.2 million, mainly due to system conversion costs and higher salaries/benefits.

• Provision for credit losses was $0.6 million, up from $0.3 million in Q1 2024.

• Return on average assets was 0.27% (reported), 0.73% (adjusted); return on average equity was 3.11% (reported), 8.36% (adjusted).

Outlook and guidance

• Management expects to increase origination and loan sale activity throughout 2025, particularly in C&I and SBA lending, as market and regulatory headwinds are navigated.

• A normalized effective tax rate of 25% is anticipated for the remainder of the year.

• Potential qualification for Russell 2000 index could enhance stock liquidity and institutional ownership.