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Hanover Bancorp, Inc. /NY (HNVR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 EPS of $0.33 missed S&P Global consensus of $0.54; “Revenue” (NII after provision + non-interest income) was $16.00M vs $19.30M consensus, driven by higher credit costs and softer fee income from SBA loan sales, despite continued NIM expansion to 2.76% . EPS est/actual and revenue est/actual values marked with asterisks are from S&P Global estimates and actuals.*
  • Pre-provision net revenue rose to $5.7M; PPNR ROA reached 1.04% (best since Q1’23), as the liability-sensitive balance sheet benefited from late-2024 Fed funds rate declines; net interest income increased to $14.8M and NIM to 2.76% .
  • Funding quality improved: demand deposits grew $28.1M (13% q/q), insured/collateralized deposits were ~87% of total, and undrawn liquidity totaled $686.5M (~274% of uninsured deposits) .
  • Strategic updates: added to the Russell 2000 in late June (potential liquidity/ownership catalyst), opened Port Jefferson branch (Suffolk County) in June, and declared a $0.10 dividend payable Aug 13, 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • Net interest margin expanded to 2.76% from 2.68% in Q1 and 2.46% in Q2’24; net interest income rose to $14.8M (+11.7% y/y) .
    • Core deposit momentum: demand deposits +$28.1M q/q (+13.0%), supporting lower funding costs and better mix; insured/collateralized deposits ~87% of total .
    • Risk mix and concentration trending better: CRE concentration ratio reduced to 368% of capital (385% at 12/31/24; 403% at 6/30/24); office exposure modest at 2.48% of loans with 2.48x DSCR and 53% LTV .
    • Quote: “Our second quarter performance reflects... strong non-interest bearing deposit growth... and continued improvement in our Net Interest Margin.” — Michael P. Puorro, Chairman & CEO .

  • What Went Wrong

    • EPS and revenue missed Street: EPS $0.33 vs $0.54*; “Revenue” $16.00M* vs $19.30M*; drivers included higher provision ($2.36M) and lower-than-expected SBA gains on sale amid macro headwinds .*
    • SBA production softness: SBA loan originations and gains on sale were pressured by “higher-for-longer” rates, tariff uncertainty, and intentional credit tightening; SBA gains were $1.8M vs $2.5M in Q2’24 .
    • Credit costs elevated: provision $2.36M; net charge-offs $3.52M (incl. $2.5M charge-off of a prior specific reserve) .

Financial Results

GAAP results vs prior quarters

MetricQ4 2024Q1 2025Q2 2025
Diluted EPS ($)0.52 0.20 0.33
Net Income ($M)3.90 1.52 2.44
Net Interest Income ($M)13.81 14.63 14.80
Non-Interest Income ($M)4.19 3.73 3.56
Provision for Credit Losses ($M)0.40 0.60 2.36
Net Interest Margin (%)2.53 2.68 2.76
ROA (%)0.70 0.27 0.44

S&P Global consensus vs actuals (Primary EPS; “Revenue” = NII after provision + non-interest income)

MetricQ4 2024Q1 2025Q2 2025
EPS Consensus Mean ($)0.48*0.475*0.54*
EPS Actual ($)0.52*0.55*0.33*
Revenue Consensus Mean ($M)18.00*18.80*19.30*
Revenue Actual ($M)17.60*17.76*16.00*

Values marked with * retrieved from S&P Global.

KPIs and balance sheet

KPIQ4 2024Q1 2025Q2 2025
Demand Deposits ($M)211.66 215.57 243.66
Demand/Total Deposits (%)10.83 11.13 12.49
Insured & Collateralized Deposits (% total)87 89 87
Undrawn Liquidity ($M)713.1 679.0 686.5
NPLs ($M)16.37 11.70 12.65
NPLs/Total Loans (%)0.82 0.60 0.64
ACL/Loans (%)1.15 1.17 1.10
Net Charge-offs ($M)1.03 0.45 3.52
CRE Concentration (% of Capital)385 369 368

Loan distribution (period-end, $M)

CategoryQ4 2024Q1 2025Q2 2025
Residential Mortgages702.83 708.65 715.42
Multifamily550.57 535.43 539.57
CRE – Owner-Occupied——267.22
CRE – Non-Owner-Occupied——271.55
Total CRE (OO + NOO)536.29 520.81 538.78
Commercial & Industrial168.91 170.44 148.91
Home Equity26.42 24.91 23.36
Total Loans1,985.52 1,960.67 1,966.45

Note: Q2 category breakouts include both CRE-OO and CRE-NOO as provided; Q4 and Q1 present “Commercial real estate” aggregate .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Effective Tax Rate (normalized)FY 2025 (remainder)~25% (Q1 2025 commentary) ~25% (reaffirmed) Maintained
Dividend per ShareQ2 2025$0.10 (Q1 declaration) $0.10 (payable Aug 13, 2025) Maintained
Quantitative Guidance (revenue/margins/OpEx)N/ANone providedNone provided—

Management reiterated an expected normalized tax rate of ~25% for the remainder of 2025; no formal quantitative guidance ranges were provided for revenue, margins, or OpEx. Dividend maintained at $0.10/share .

Earnings Call Themes & Trends

No earnings call transcript was available in our document system for Q2 2025 despite targeted searches; analysis relies on company press releases and 8-Ks.

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Net Interest Margin & balance sheet sensitivityNIM expanded to 2.53% in Q4 on liability-sensitive balance sheet and late-2024 rate cuts ; NIM further to 2.68% in Q1 NIM reached 2.76% (+8 bps q/q); cost of interest-bearing liabilities fell 7 bps q/q Improving
Deposits & liquidityCore deposit growth; insured/collateralized ~87% at YE’24; undrawn liquidity $713.1M Demand deposits +$28.1M q/q; insured/collateralized ~87%; undrawn liquidity $686.5M Healthy mix/liquidity
SBA production & gains on saleStrong Q4 SBA gains ($2.5M) Q1 impacted by market turbulence and SOP changes Q2 pressured by “higher-for-longer,” tariffs, and tighter credit; gains $1.8M
CRE concentration & office exposureCRE concentration 385% at YE’24; office 2.45% of loans CRE concentration 369% in Q1 368% in Q2; office 2.48% of loans, 2.48x DSCR, 53% LTV
Technology & brandCore system conversion planned for Feb 2025 Conversion completed; rebrand/logo refresh noted Conversion benefits referenced; operating normal
Capital markets profileCEO flagged potential Russell 2000 qualification Added to Russell 2000 in late June Liquidity/ownership catalyst

Management Commentary

  • “Our second quarter performance reflects a number of high notes, including increased Pre-Provision Net Revenue of $5.7 million, strong non-interest bearing deposit growth of $28.1 million... and continued improvement in our Net Interest Margin.” — Michael P. Puorro, Chairman & CEO .
  • “We are pleased with our first quarter performance which reflected sizable improvements in Net Interest Income and Net Interest Margin... completion of our core banking system conversion... expected to deliver tangible operational efficiencies and customer benefits.” — Michael P. Puorro (Q1) .
  • “Notable increases in net interest margin, tangible book value, returns... complemented further improvement in our CRE concentration ratio and sound credit quality... pending core system conversion... and potential qualification for the Russell 2000...” — Michael P. Puorro (Q4) .

Q&A Highlights

No Q2 2025 earnings call transcript was found in the document system (we searched for “earnings-call-transcript” and related transcript types for 2025); therefore, no Q&A themes or clarifications are available from a call.

Estimates Context

  • EPS: Q2 actual $0.33 vs $0.54 consensus (miss); Q1 actual $0.55 vs $0.475 (beat); Q4 actual $0.52 vs $0.48 (beat). Primary EPS (SPGI) likely reflects adjusted/normalized EPS in Q1 (conversion expenses excluded) [S&P Global, see table above].*
  • Revenue: Q2 actual $16.00M vs $19.30M consensus (miss); Q1 actual $17.76M vs $18.80M (miss); Q4 actual $17.60M vs $18.00M (miss). “Revenue” per SPGI equals NII after provision + non-interest income (matches company figures) .*
  • Implications: Given higher provisions and softer SBA fee income (macro, tariffs, credit tightening), near-term Street revenue/EPS estimates may drift lower, partially offset by further NIM tailwinds if funding costs continue to decline and deposit mix improves .*

Values marked with * retrieved from S&P Global.

Other Q2 2025 Press Releases

  • Branch expansion: Opened the Port Jefferson branch (10th branch), extending presence in Suffolk County and supporting C&I deposit/lending growth strategy .
  • The Q2 8-K/press release also notes Russell 2000 index inclusion and dividend declaration (see Executive Summary) .

Key Takeaways for Investors

  • EPS/revenue miss despite NIM expansion: Watch the balance between improving margin and near-term credit costs/fee income; sustained NIM gains could rebuild earnings power if provisions normalize .
  • Funding mix and liquidity position are strengths (DDAs +13% q/q; 87% insured/collateralized; liquidity 274% of uninsured deposits), reducing tail risk and supporting growth in core C&I relationships .
  • SBA outlook conservative near term; bank is adding BDOs to re-accelerate volume into 2026—monitor loan sale premiums and close rates as macro/tariff uncertainty evolves .
  • CRE de-risking progress continues (368% concentration; modest office exposure with solid DSCR/LTV), which can aid capital/liquidity optics and regulatory comfort .
  • Tax rate normalized at ~25% for 2H’25; dividend maintained at $0.10/share—signals capital stability amidst growth investments .
  • Stock catalysts: Russell 2000 inclusion may broaden ownership and trading liquidity; incremental deposit wins (municipal/C&I) and NIM stabilization could improve sentiment .
  • Watch list: provision trajectory, NCOs (one large charged reserve now flowed through), SBA fee momentum, and deposit pricing discipline vs policy rate path .

Sources:

  • Q2 2025 8-K/Press Release and financial tables .
  • Q1 2025 8-K/Press Release and financial tables .
  • Q4 2024 8-K/Press Release and financial tables .
  • Additional press release: Port Jefferson branch opening .
  • Estimates (EPS and “Revenue”) are from S&P Global; values marked with * denote SPGI data.