Executive Summary

EPS was $0.47, essentially in line with consensus $0.473, while revenue came in below consensus ($16.68M vs $18.75M) as SBA loan sale volumes remained soft; NIM improved YoY and expenses declined sequentially . EPS estimate and revenue estimate values retrieved from S&P Global.*
Net interest income grew 16.2% YoY to $15.2M with NIM at 2.74% (vs 2.37% a year ago), aided by lower cost of interest-bearing liabilities; non-interest income declined YoY on lower gains on loan sales .
Asset quality mixed: NPLs rose to $17.2M (0.86% of loans) from $12.7M in Q2, though allowance coverage increased to 1.12% of loans; management cited residential mortgage additions to NPLs with strong collateral .
Management reiterated a normalized 25% tax rate for the remainder of 2025 and declared a $0.10 dividend; tone constructive on NIM tailwinds from expected FOMC cuts and an improved yield curve .

What Went Well and What Went Wrong

What Went Well

NIM expansion and NII growth: Net interest income rose to $15.2M (+16.19% YoY), NIM reached 2.74% (vs 2.37% in Q3’24); monthly NIM for September was 2.83% .
Pre-provision earnings and cost control: PPNR was $6.0M with PPNR ROA of 1.05%, and non-interest expense fell $0.6M sequentially on lower incentive comp, data processing, and professional fees .
Strategic focus and growth: Loans increased $22.2M QoQ (to $1.99B), with growth in niche-residential and conventional C&I; book value per share rose to $27.03 and TBV/share to $24.43 .

Quote: “Continuing performance should be positively influenced by further FOMC rate decreases and an improved yield curve, positively impacting our liability sensitive balance sheet and potentially increasing lending opportunities.” — Michael P. Puorro, Chairman & CEO .

What Went Wrong

Revenue miss and softer non-interest income: Gains on sale of loans declined YoY ($1.45M vs $2.83M), driven by lower SBA loan sales; total non-interest income fell to $2.79M (vs $3.95M) .
SBA pressure persists: SBA loan sales fell to ~$11.4M (vs $27.1M in Q3’24) with lower gains; management cited “higher-for-longer” rates, tariff uncertainty, and tighter credit standards .
Asset quality uptick: NPLs increased to $17.2M (0.86% of loans) from $12.7M in Q2 (0.64%); ACL/loans rose to 1.12% from 1.10% .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
EPS ($)	$0.48	$0.33	$0.47
Net Interest Income ($USD Millions)	$13.10	$14.80	$15.22
Non-Interest Income ($USD Millions)	$3.95	$3.56	$2.79
Net Interest Margin (%)	2.37%	2.76%	2.74%
Return on Average Assets (%)	0.62%	0.44%	0.61%
Return on Average Equity (%)	7.35%	4.93%	6.90%
Revenue ($USD Millions)	$16.86*	$16.00*	$16.68*

Values retrieved from S&P Global.*

Q3 2025 versus Wall Street consensus:

Metric	Actual	Consensus	Surprise
EPS ($)	$0.47*	$0.473*	-0.7%*
Revenue ($USD Millions)	$16.68M*	$18.75M*	-11.0%*

Values retrieved from S&P Global.*

Segment/portfolio mix (loans, $USD Millions):

Segment	12/31/2024	6/30/2025	9/30/2025
Residential mortgages	$702.8	$715.4	$725.9
Multifamily	$550.6	$539.6	$537.3
CRE – Owner Occupied	$261.2	$267.2	$267.1
CRE – Non-Owner Occupied	$298.5	$271.6	$271.2
Commercial & Industrial	$145.5	$148.9	$161.2
Home Equity	$26.4	$23.4	$25.6
Consumer	$0.5	$0.4	$0.4

Key KPIs:

KPI	Q3 2024	Q2 2025	Q3 2025
PPNR ROA (%)	0.85%	1.04%	1.05%
NPL / Total Loans (%)	0.77%	0.64%	0.86%
ACL / Total Loans (%)	1.17%	1.10%	1.12%
Book Value per Share ($)	$25.89	$26.52	$27.03
Tangible Book Value per Share ($)	$23.28	$23.94	$24.43

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Effective tax rate	Remainder of FY2025	~25% normalized	~25% normalized	Maintained
Dividend per share	Q3 2025	$0.10 declared for Q2	$0.10 declared for Q3	Maintained
C&I lending activity	FY2025	Expects growth as year progresses	Expects growth as year progresses	Maintained
SBA loan originations	2H 2025 → 2026	Anticipates higher volumes as transition to 2026	Lower-than-expected originations and gains; outlook cautious	Lowered/Uncertain
NIM outlook	FY2025	Tailwind from late-2024 rate cuts	Positive influence from expected FOMC rate decreases and improved curve	Constructive bias

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available; themes compiled from company earnings materials.

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Interest rates/NIM	NIM rose to 2.68% in Q1; 2.76% in Q2; liability-sensitive balance sheet benefits from rate cuts	NIM 2.74% (Sept monthly 2.83%); expects further tailwinds from FOMC cuts and curve steepening	Improving
SBA originations/sales	Q1: $23.4M sold, premiums impacted by market/SOP changes ; Q2: $22.3M sold, headwinds from rates/tariffs/tighter credit	Q3: $11.4M sold; gains down; same headwinds reiterated	Softening
C&I growth	Q1: $16.8M originations ; Q2: $29.3M originations and growing pipeline	Q3: $24.1M originations; expects lending/deposits to grow	Gradual growth
Asset quality	Q1: NPLs down to $11.7M (0.60%) ; Q2: NPLs $12.7M (0.64%)	Q3: NPLs up to $17.2M (0.86%), largely residential mortgages with ~58% LTV; ACL to 1.12%	Mixed
Technology/efficiency	Core conversion to FIS Horizon completed; expected operational benefits	Lower data processing costs contribute to opex decline QoQ	Efficiency tailwind
Regional expansion	Port Jefferson branch opened in Q2; municipal deposits relationships at 40	Municipal relationships up to 42; deposits +$20.5M YTD; liquidity strong	Expanding

Management Commentary

“Our third quarter performance reflects positive notes, including increased Pre-Provision Net Revenue of $6.0 million driven by an increase in net interest income and lower operating expenses.” — Michael P. Puorro, Chairman & CEO .
“Continuing performance should be positively influenced by further FOMC rate decreases and an improved yield curve, positively impacting our liability sensitive balance sheet and potentially increasing lending opportunities.” — Michael P. Puorro .
Liquidity and deposits remain strong: undrawn liquidity sources were $712.2M (~253% of uninsured deposits), with insured/collateralized deposits ~86% of total .

Q&A Highlights

No Q3 2025 earnings call transcript was available; therefore, Q&A highlights and any live guidance clarifications cannot be provided for this quarter.

Estimates Context

EPS printed essentially in line with consensus ($0.47 vs $0.473), suggesting net interest performance offset lower non-interest income; revenue missed materially ($16.68M vs $18.75M), primarily on lower SBA loan sales and gains . EPS and revenue consensus values retrieved from S&P Global.*
Given persistent SBA headwinds (rates, tariffs, tighter credit) and QoQ decline in non-interest income, revenue estimates may need to drift lower until loan sale activity normalizes or other fee lines offset .

Key Takeaways for Investors

NIM tailwinds and cost discipline supported EPS stability despite non-interest income pressure; watch for continued liability cost relief and curve dynamics into Q4 .
Revenue miss driven by SBA softness; monitor loan sale volumes and premiums as a swing factor for quarterly revenue variability .
Asset quality mixed with higher NPLs (residential) but strong collateral and increased ACL/loans to 1.12%; track resolution pace and coverage adequacy .
C&I momentum and niche-residential growth underpin loan expansion; pipeline at ~$179M with emphasis on niche-residential/SBA/USDA .
Capital and book value accretion continue (BVPS $27.03, TBVPS $24.43); dividend maintained at $0.10, offering a stable capital return profile .
Liquidity robust (~$712M capacity, 253% of uninsured deposits), insulating funding amidst deposit mix shifts; insured/collateralized deposits ~86% .
Near-term trading: in-line EPS plus revenue miss suggests headlines could focus on fee income weakness; medium-term thesis hinges on NIM tailwinds, efficiency gains post-core conversion, and resumed SBA activity as macro headwinds abate .

Hanover Bancorp, Inc. /NY (HNVR)·Q3 2025 Earnings Summary