Hanover Bancorp (HNVR) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $2.4 million, or $0.33 per diluted share, up from $0.8 million ($0.11 per share) in Q2 2024, driven by higher net interest income and lower provision for credit losses, partially offset by increased non-interest expenses and income tax expense.

• The company completed a core processing system conversion in February 2025 and was added to the Russell 2000 Index in June 2025.

• Opened a new branch in Port Jefferson, NY, and expanded business banking services to the legal cannabis industry in NY and NJ.

• Pre-provision net revenue reached $5.7 million, with a return on average assets of 1.04%, the highest since Q1 2023.

Financial highlights

• Total assets were $2.31 billion at June 30, 2025, unchanged from December 31, 2024; total deposits were $1.95 billion.

• Net interest income for Q2 2025 was $14.8 million, up from $13.2 million in Q2 2024; net interest margin improved to 2.76% from 2.46%.

• Provision for credit losses decreased to $2.4 million in Q2 2025 from $4.0 million in Q2 2024.

• Non-interest expense increased to $12.6 million in Q2 2025 from $11.7 million in Q2 2024, mainly due to higher salaries and professional fees.

• For the six months ended June 30, 2025, net income was $4.0 million ($0.53 per share), down from $4.9 million ($0.66 per share) in the prior year; adjusted net income excluding core system conversion expenses was $6.5 million ($0.87 per share).

Outlook and guidance

• Management expects higher C&I and SBA loan originations in the second half of 2025, supported by an expanded business development team.

• SBA loan originations are anticipated to improve as market conditions stabilize and credit standards are adjusted.

• Normalized effective tax rate expected to be 25% for the remainder of 2025.

• Continued focus on expanding in underserved Eastern Long Island markets and broadening municipal deposit base.