Hanover Bancorp, Inc. /MD
For the period ended Mar 31, 2025. Filed May 9, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
HNVR$21.84+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001558370-24-015516
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001558370-25-007164
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 76 current paragraphs.
31 unchanged; 36 reworded; 6 added; 19 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 37 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
The Company completed its core processing system conversion to FIS Horizon in February 2025. This conversion, coupled with our recently refreshed corporate logo, exemplifies our momentum towards a more technologically advanced, modern and digitally forward-thinking bank.
Current report
The Bank remains focused on expanding its core verticals and continues to originate loans for its portfolio and for sale in the secondary market under its residential flow origination program. Of the $48.8 million in closed residential loans originated in the quarter ended March 31, 2025, $27.6 million were originated for the Bank’s portfolio. The remaining $21.2 million of closed loans were originated for sale in the secondary market. During the quarter ended March 31, 2025, the Company sold $18.3 million of residential loans under its flow origination program and recorded gains on sale of loans held-for-sale of $0.4 million with a premium of 2.38%.
Current report
During the quarters ended March 31, 2025 and 2024, the Company sold approximately $23.4 million and $26.7 million, respectively, in government guaranteed SBA loans and recorded gains on sale of loans held-for-sale of $1.9 million and $2.5 million, respectively. SBA loan originations and gains on sale were lower in 2025 due to a combination of factors, including: lower than expected loan sale premiums due, we believe, to first quarter market turmoil; delays in loan closings resulting from the impact of administrative changes to SBA Standard Operating Procedures; and the inability of certain loans to close because of delays by state regulatory agencies in issuing permit approvals to certain borrowers. As we enter the second quarter of 2025, we expect to navigate these factors and to increase the volume of origination and loan sale activity throughout the year. The Bank concluded the first quarter of 2025 with C&I loan originations of approximately $16.8 million. Based on its existing pipeline, the Bank expects C&I lending and deposit activity to grow as the year progresses.
Current report
The Company continues to actively manage its Multi-Family and Commercial Real Estate portfolios which resulted in a reduction in the commercial real estate concentration ratio to 369% of capital at March 31, 2025 from 385% at December 31, 2024. The Company will selectively explore Commercial Real Estate opportunities with an emphasis on relationship based Commercial Real Estate lending.
Current report
Non-interest income increased by $0.2 million for the three months ended March 31, 2025 versus the comparable 2024 period. The increase in non-interest income is primarily related to the increases in loan servicing and fee income and other income which were partially offset by a decrease in the net gain on sale of loans held for sale.
Current report
Total non-interest expense increased by $5.2 million for the three months ended March 31, 2025 versus the comparable 2024 quarter. The increase in non-interest expense was primarily related to core system conversion expenses as well as increases in salaries and employee benefits. The increase in salaries and employee benefits expense in the first quarter of 2025 versus the comparable 2024 quarter was primarily related to lower deferred loan origination costs partially offset by lower incentive compensation expense resulting from reduced lending activity.
Removed paragraphs (19)
Previous report
We expect the volume of activity to increase as the year progresses and our flow pipeline continues to build. Because we continue to prioritize the management of liquidity and capital, new business development is largely focused on flow originations over portfolio growth.
Previous report
During the quarter ended September 30, 2024, net interest income increased $1.3 million, non-interest income increased $0.2 million, provision for credit losses decreased $0.3 million and income tax expense decreased $0.1 million compared to the September 30, 2023 quarter. These were offset by an increase of $1.9 million in non-interest expenses, particularly salaries and employee benefits, resulting in flat earnings between these periods.
Previous report
Commencing on October 1, 2023 the Company adopted CECL which changed the Company’s critical accounting policies and estimates from policies regarding the calculation of the allowance for loan losses to policies regarding the calculation of an allowance for credit losses.
Previous report
Allowance for Credit Losses
Previous report
On October 1, 2023, the Company adopted ASU 2016-13 (Topic 326), which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit. The allowance for credit losses is a valuation allowance for management’s estimate of expected credit losses in the loan portfolio. The process to determine expected credit losses utilizes analytic tools and judgment and is reviewed on a quarterly basis. When management is reasonably certain that a loan balance is not fully collectable, an analysis is completed and an allowance may be established or a full or partial charge off could be recorded against the allowance. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance via a quantitative analysis which considers available information from internal and external sources related to past loan loss and prepayment experience and current conditions, as well as the incorporation of reasonable and supportable forecasts. Management evaluates a variety of factors including available published economic information in arriving at its forecast. Expected credit losses are estimated over the contractual term of the loans and adjusted for expected prepayments when appropriate. Also included in the allowance for credit losses are qualitative reserves that are expected, but, in management’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above. Factors may include changes in lending policies and procedures, size and composition of the portfolio, experience and depth of lending management and the effect of external factors such as competition, legal and regulatory requirements, among others. The allowance is available for any loan that, in management’s judgment, should be charged off. Although management uses the best information available, the level of the allowance for credit losses remains an estimate, which is subject to significant judgment and short-term change. Various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for credit losses. Such agencies may require the Company to make additional provisions for credit losses based upon information available to them at the time of their examination. The Bank considers its primary lending area to be the New York metro area. A substantial portion of the Bank’s loans are secured by real estate in this area. Accordingly, the ultimate collectability of the loan portfolio is susceptible to changes in market and economic conditions in this region. Future adjustments to the provision for credit losses and allowance for credit losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company’s control.
Previous report
Results of Operations – Comparison of the Three Months Ended September 30, 2024 and 2023 – The Company recorded net income of $3.5 million for each of the three months ended September 30, 2024 and 2023. During the quarter ended September 30, 2024, net interest income increased $1.3 million, non-interest income increased $0.2 million, provision for credit losses decreased $0.3 million and income tax expense decreased $0.1 million compared to the September 30, 2023 quarter. These were offset by an increase of $1.9 million in non-interest expenses, particularly salaries and employee benefits, resulting in flat earnings between these periods.
Previous report
The Company recorded a $0.2 million provision for credit losses expense on loans for the three months ended September 30, 2024, versus $0.5 million recorded for the comparable period in 2023. The allowance for credit losses increased by $3.7 million, or 19.1%, to $23.4 milion, or 1.17% of total loans at September 30, 2024, from $19.7 million, or 1.00% of total loans at December 31, 2023. The increase in the allowance for credit losses on loans is attributable to an ACL on an individually evaluated loan of $2.5 million and $1.1 million related to ongoing enhancements to the CECL model during the June 2024 quarter. (See also Critical Accounting Policies, Judgments and Estimates and Asset Quality contained herein.)
Previous report
Non-interest income increased by $0.2 million for the three months ended September 30, 2024 versus the comparable 2023 period. The Bank’s investment in government guaranteed lending continues to yield results. This increase was driven by a $1.4 million increase in net gain on sale of loans reflecting the strengthening of secondary market premiums for sales of SBA loans. For the three months ended September 30, 2024 and 2023, the Company sold the government guaranteed portion of SBA loans totaling approximately $27.1 million and $18.4 million, respectively, recognizing net gain on sale of loans held for sale of $2.4 million and $1.5 million, respectively. During the quarter ended September 30, 2024, the Company sold $16.5 million of residential loans under the flow origination program and recorded net gain on sale of loans held for sale of $0.4 million. Partially offsetting this increase was a decrease in other income, reflecting that in the September 30, 2023 quarter, the Company settled ongoing litigation and received a settlement payment of $1.0 million which was recorded in other income.
Previous report
For the three and nine months ended September 30, 2024 and 2023
Previous report
Total non-interest expense increased by $1.9 million for the three months ended September 30, 2024 versus the comparable 2023 quarter. The increase in non-interest expense was primarily in salaries and employee benefits related to additional staff for the SBA, C&I Banking and Operations teams and severance payments in August 2024 paid in connection with a loan personnel restructuring initiative.
Previous report
For the three and nine months ended September 30, 2024 and 2023
Previous report
Net Interest Income and Margin
Previous report
Net interest income was $39.3 million for the nine months ended September 30, 2024, a slight increase of $0.1 million from the comparable 2023 period. The Company’s net interest margin was 2.41% in the 2024 nine month period from 2.65% in the comparable 2023 period. The yield on interest earning assets increased to 6.14% in the 2024 nine month period from 5.58% in the comparable 2023 period, an increase of 56 basis points. This increase was offset by a 95 basis point increase in the cost of interest-bearing liabilities to 4.45% in 2024 from 3.50% in the 2023 nine month period due to the rapid and significant rise in interest rates and the competitive deposit environment and, to a lesser extent, the Company’s decision to increase liquidity as a result of the industry events over the last two years. Together, this resulted in the higher cost of funds.
Previous report
NET INTEREST INCOME ANALYSIS
Previous report
For the Nine Months Ended September 30, 2024 and 2023
Previous report
Non-interest Income
Previous report
Non-interest income increased by $3.7 million for the nine months ended September 30, 2024 versus the comparable 2023 period. This increase was driven by a $4.4 million increase in net gain on sale of loans reflecting the strengthening of secondary market premiums for sales of SBA loans. For the nine months ended September 30, 2024 and 2023, the Company sold approximately $81.8 million and $43.8 million, respectively in the government guaranteed portion of SBA loans, recognizing net gains of $7.4 million and $3.5 million, respectively. During the nine months ended September 30, 2024, the Company sold $19.4 million of residential loans under the flow origination program and recorded net gains of $0.5 million.
Previous report
Non-interest Expense
Previous report
Total non-interest expense increased by $3.3 million for the nine months ended September 30, 2024 versus the comparable 2023 period. The increase in non-interest expense was primarily in salaries and employee benefits attributed to additional staff for the SBA, C&I Banking and Operations teams.
Reworded paragraphs (36)
Previous wording
Factors that may cause actual results or earnings to differ materially from such forward-looking statements include those set forth in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023, as updated by the Company’s subsequent filings with the SEC and, among others, the following:
Current wording
Factors that may cause actual results or earnings to differ materially from such forward-looking statements include those set forth in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as updated by the Company’s subsequent filings with the SEC and, among others, the following:
Previous wording
The Bank operates as a locally headquartered, community-oriented bank, serving customers throughout the New York metro area from offices in Nassau, Suffolk, Queens, Kings (Brooklyn) and New York (Manhattan) Counties, New York and Freehold in Monmouth County, New Jersey. We opened the Bank’s Hauppauge Business Banking Center in Hauppauge, Suffolk County, New York in May 2023. This location is the nexus of our expanded commercial lending and deposit activities that are integral to the ongoing diversification of our balance sheet as we fill the void left by the diminishing number of commercial banks in the NYC Metro area. The Bank has received regulatory approval for the opening of a full-service branch in Port Jefferson, New York. Business development staff have already joined the Bank in anticipation of the opening of this location. The Bank expects this site to be fully operational in the first quarter of 2025. During the fourth calendar quarter of 2023, we began offering business banking services to the legal, licensed cannabis industry in New York and other states in which cannabis is legally licensed under applicable state laws. We offer personal and business loans on a secured and unsecured basis, SBA and USDA guaranteed loans, revolving lines of credit, commercial mortgage loans, and one- to four-family non-qualified mortgages secured by primary and secondary residences that may be owner occupied or investment properties, home equity loans, bridge loans and other personal purpose loans.
Current wording
The Bank operates as a locally headquartered, community-oriented bank, serving customers throughout the New York metro area from offices in Nassau, Suffolk, Queens, Kings (Brooklyn) and New York (Manhattan) Counties, New York and Freehold in Monmouth County, New Jersey. We opened the Bank’s Hauppauge Business Banking Center in Hauppauge, Suffolk County, New York in May 2023. This location is the nexus of our expanded commercial lending and deposit activities that are integral to the ongoing diversification of our balance sheet as we fill the void left by the diminishing number of commercial banks in the NYC Metro area. The Bank has received regulatory approval to open a full-service branch in Port Jefferson, New York. Business development staff have already joined the Bank in anticipation of the opening of this location. The Bank expects this site to be fully operational in mid 2025. During the fourth calendar quarter of 2023, we began offering business banking services to the legal, licensed cannabis industry, initially in New York state. We now offer these services in New Jersey and may in the future consider opening accounts for licensed entities in other states. We offer personal and business loans on a secured and unsecured basis, SBA and USDA guaranteed loans, revolving lines of credit, commercial mortgage loans, and one- to four-family non-qualified mortgages secured by primary and secondary residences that may be owner occupied or investment properties, home equity loans, bridge loans and other personal purpose loans.
Previous wording
Historically, the Bank has generated additional income by strategically originating and selling residential and government guaranteed loans to other financial institutions at premiums, while also retaining servicing rights in some sales. However, with the rapid increases in interest rates in recent years, the appetite among the Bank’s purchasers of residential loans for pools of loans declined, eliminating the Bank’s ability to sell residential loans in its portfolio on desirable terms. Commencing in late 2023, the Bank initiated development of a flow origination program under which the Bank originates individual loans for sale to specific buyers, thereby positioning the Bank to resume residential loan sales and generate fee income to complement sale premiums earned from the sale of the guaranteed portion of SBA loans. The Bank is an approved SBA Preferred Lender, enabling the Bank to process SBA applications under delegated authority from the SBA and enhancing the Bank’s ability to compete more effectively for SBA lending opportunities.
Current wording
Historically, the Bank has generated additional income by strategically originating and selling residential and government guaranteed loans to other financial institutions at premiums, while also retaining servicing rights in some sales. However, with the rapid and significant rise in market interest rates in recent years, the appetite among the Bank’s purchasers of residential loans for pools of loans declined, eliminating the Bank’s ability to sell residential loans in its portfolio on desirable terms. In response, the Bank developed a flow origination program under which the Bank originates individual loans for sale to specific buyers, thereby positioning the Bank to resume residential loan sales and generate fee income to complement sale premiums earned from the sale of the guaranteed portion of SBA loans. The Bank is an approved SBA Preferred Lender, enabling the Bank to process SBA applications under delegated authority from the SBA and enhancing the Bank’s ability to compete more effectively for SBA lending opportunities.
Previous wording
As of or for the three and nine months ended September 30, 2024 and 2023
Current wording
As of or for the three months ended March 31, 2025 and 2024
Previous wording
At September 30, 2024 the Company, on a consolidated basis, had total assets of $2.3 billion, total deposits of $2.0 billion and total stockholders’ equity of $192.3 million. The Company recorded net income for each of the three months ended September 30, 2024 and 2023 of $3.5 million, or $0.48 per diluted share (including Series A preferred shares).
Current wording
At March 31, 2025 the Company, on a consolidated basis, had total assets of $2.3 billion, total deposits of $1.9 billion and total stockholders’ equity of $196.6 million. The Company recorded net income of $1.5 million, or $0.20 per diluted share (including Series A preferred shares) for the three months ended March 31, 2025 compared to net income of $4.1 million, or $0.55 per diluted share (including Series A preferred shares), for the same period in 2024.
Previous wording
Provision for Credit Losses on Loans
Current wording
The $2.5 million decrease in earnings for the three months ended March 31, 2025, versus the comparable 2024 period resulted from a $5.2 million increase in non-interest expenses, including core system conversion expenses of $3.2 million, an increase in salaries and employee benefits of $1.7 million and a $0.3 million increase in provision for credit losses. These were partially offset by a $1.7 million increase in net interest income, a $0.2 million increase in non-interest income and a $1.1 million decrease in income tax expense.
Previous wording
The Company’s return on average assets and return on average stockholders’ equity were 0.62% and 7.35%, respectively, for the three months ended September 30, 2024, versus 0.66% and 7.58%, respectively, for the comparable 2023 period.
Current wording
The Company’s return on average assets and return on average stockholders’ equity were 0.27% and 3.11%, respectively, for the three months ended March 31, 2025, versus 0.74% and 8.70%, respectively, for the comparable 2024 period.
Previous wording
Total non-accrual loans at September 30, 2024 were $15.4 million, or 0.77% of total loans, compared to $14.5 million, or 0.74% of total loans at December 31, 2023 and $14.9 million, or 0.80% of total loans, at September 30, 2023. The allowance for credit losses as a percentage of total non-accrual loans amounted to 152%, 136% and 98% at September 30, 2024, December 31, 2023 and September 30, 2023, respectively.
Current wording
Total non-accrual loans at March 31, 2025 were $11.7 million, or 0.60% of total loans, compared to $16.4 million, or 0.82% of total loans at December 31, 2024 and $14.9 million, or 0.74% of total loans, at March 31, 2024. The allowance for credit losses as a percentage of total non-accrual loans amounted to 196%, 139% and 134% at March 31, 2025, December 31, 2024 and March 31, 2024, respectively.
Previous wording
The Company’s operating efficiency ratio was 71.8% for the three months ended September 30, 2024, versus 66.5% in the year ago period. The increase in the operating efficiency ratio was due to the increase in non-interest expense, which was partially offset by increases in net interest income and non-interest income.
Current wording
The Company’s operating efficiency ratio was 87.1% for the three months ended March 31, 2025, versus 65.4% in the March 31, 2024 quarter. The increase in the operating efficiency ratio was due to the increase in non-interest expense, which was partially offset by increases in net interest income and non-interest income.
Previous wording
Critical Accounting Policies, Judgments and Estimates - To prepare financial statements in conformity with U.S. GAAP, the Company’s management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. Critical accounting estimates are accounting estimates where (a) the nature of the estimate is material due to levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and (b) the impact of the estimate on financial condition or operating performance is material. Significant accounting policies followed by the Company are presented in Note 1 – Summary of Significant Accounting Policies, to the Audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023, and in Note 1 – Accounting Policies of this Form 10-Q.
Current wording
Critical Accounting Policies, Judgments and Estimates - To prepare financial statements in conformity with U.S. GAAP, the Company’s management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. Critical accounting estimates are accounting estimates where (a) the nature of the estimate is material due to levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and (b) the impact of the estimate on financial condition or operating performance is material. At March 31, 2025, there have been no material changes to the Company’s critical accounting policies as compared to the critical accounting policies disclosed in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
Financial Condition – Total assets of the Company were $2.3 billion at September 30, 2024 and at December 31, 2023. Total securities available for sale at September 30, 2024 was $98.4 million, an increase of $36.9 million from December 31, 2023, primarily driven by growth in U.S. Treasury securities, corporate bonds and mortgage-backed securities. Total loans at September 30, 2024 and December 31, 2023 were $2.0 billion. Total deposits were $2.0 billion and $1.9 billion at September 30, 2024 and at December 31, 2023, respectively. Total borrowings and subordinated debt at September 30, 2024 were $150.5 million, including $125.8 million of outstanding FHLB advances, compared to $153.6 million at December 31, 2023.
Current wording
Financial Condition – Total assets of the Company were $2.3 billion at March 31, 2025 and at December 31, 2024. Total securities available for sale at March 31, 2025 were $93.2 million, an increase of $9.4 million from December 31, 2024, primarily driven by growth in collateralized mortgage obligations, collateralized loan obligations and corporate bonds. Total loans at March 31, 2025 and December 31, 2024 were $2.0 billion. Total deposits were $1.9 billion and $2.0 billion at March 31, 2025 and December 31, 2024, respectively. Total borrowings and subordinated debt at March 31, 2025 and December 31, 2024 were $132.5 million, including $107.8 million of outstanding FHLB advances.
Previous wording
At September 30, 2024, the residential loan portfolio amounted to $745.9 million, or 37.2% of total loans. Commercial real estate loans, including multi-family loans and construction and land development loans, totaled $1.1 billion or 54.2% of total loans at September 30, 2024. Commercial and industrial loans totaled $171.9 million or 8.6% of total loans.
Current wording
At March 31, 2025, the residential loan portfolio amounted to $733.6 million, or 37.4% of total loans. Commercial real estate loans, including multi-family loans and construction and land development loans, totaled $1.1 billion or 53.9% of total loans at March 31, 2025. Commercial and industrial loans totaled $170.4 million or 8.7% of total loans.
Previous wording
Total deposits at September 30, 2024 were $2.0 billion, reflecting an increase of $52.9 million or 2.8%, compared to $1.9 billion at December 31, 2023. Our loan to deposit ratio was 102% at September 30, 2024 and 103% at December 31, 2023. Core deposit balances, which consist of demand, NOW, savings and money market deposits, represented 74.2% and 72.6% of total deposits at September 30, 2024 and December 31, 2023, respectively. At those dates, demand deposit balances represented 10.5% and 10.9% of total deposits. Although core deposits grew to $1.5 billion as of September 30, 2024 from $1.4 billion as of December 31, 2023, demand deposit balances decreased from $207.8 million to $206.3 million during the same period. This decrease was confined to deposits made by residential loan borrowers in anticipation of residential loan closings. These funds comprise the equity residential borrowers are required to contribute to residential loan closings. The volume of these deposits rise and fall in proportion to the volume of anticipated residential loan closings. As the pace of residential lending increases, the volume of demand deposits will increase accordingly. Demand deposits, net of balances related to residential loan closings, grew to $181.8 million as of September 30, 2024 from $166.4 million as of December 31, 2023, an increase of 9.3%. The Company’s municipal deposit program is built on long-standing relationships developed in the local marketplace. This core deposit business will continue to provide a stable source of funding for the Company’s lending products at costs lower than both consumer deposits and market-based borrowings. The Company continues to broaden its municipal deposit base and currently services 39 customer relationships. At September 30, 2024, total municipal deposits were $366.2 million, representing 18.7% of total deposits, compared to $528.1 million at December 31, 2023, representing 27.7% of total deposits. Total municipal deposits decreased by $161.9 million or 30.7% from December 31, 2023 primarily due to seasonal variations. The weighted average rate on the municipal deposit portfolio was 4.24% at September 30, 2024. The aggregate amount of the Company’s outstanding uninsured deposits was $622.1 million or 31.8% of total deposits as of September 30, 2024 and $771.0 million or 40.5% of total deposits as of December 31, 2023.
Current wording
Total deposits at March 31, 2025 were $1.9 billion, reflecting a decrease of $17.8 million or 0.9%, compared to $2.0 billion at December 31, 2024. Our loan to deposit ratio was 101% at March 31, 2025 and 102% at December 31, 2024. Core deposit balances, which consist of demand, NOW, savings and money market deposits, represented 73.2% and 74.5% of total deposits at March 31, 2025 and December 31, 2024, respectively. At those dates, demand deposit balances represented 11.1% and 10.8% of total deposits. The Company’s municipal deposit program is built on long-standing relationships developed in the local marketplace. This core deposit business will continue to provide a stable source of funding for the Company’s lending products at costs lower than both consumer deposits and market-based borrowings. The Company continues to broaden its municipal deposit base and currently services 40 customer relationships. At March 31, 2025, total municipal deposits were $517.1 million, representing 26.7% of total deposits, compared to $509.3 million at December 31, 2024, representing 26.1% of total deposits. The weighted average rate on the municipal deposit portfolio was 3.71% at March 31, 2025. The aggregate amount of the Company’s outstanding uninsured deposits was $210.9 million or 10.9% of total deposits as of March 31, 2025 and $252.0 million or 12.9% of total deposits as of December 31, 2024.
Previous wording
Borrowings at September 30, 2024 were $125.8 million, versus $129.0 million, including $2.3 million in PPPLF funding, at December 31, 2023. At September 30, 2024, the Company had $125.8 million of outstanding FHLB advances as compared to $126.7 million at December 31, 2023. The Company had no borrowings outstanding under lines of credit with correspondent banks at September 30, 2024 and December 31, 2023. The Company utilizes a number of strategies to manage interest rate risk, including interest rate swap agreements, which currently provide a benefit to net interest income.
Current wording
Borrowings at March 31, 2025 and December 31, 2024 were $107.8 million, comprised of outstanding FHLB advances. The Company had no borrowings outstanding under lines of credit with correspondent banks at March 31, 2025 and December 31, 2024.
Previous wording
The Company’s commercial real estate concentration ratio continued to improve, decreasing to 397% of capital at September 30, 2024 from 432% of capital at December 31, 2023. A significant portion of the Bank’s commercial real estate portfolio consists of loans secured by Multi-Family 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 is minor at $9.5 million, all at floating interest rates, and CRE-owner occupied loans have a sizable mix of floating rates. As shown below, these two portfolios represent 11% combined of loans maturing through the balance of 2024 and 2025, with 55% maturing in 2027 alone.
Current wording
A significant portion of the Bank’s commercial real estate portfolio consists of loans secured by Multi-Family 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 is minor at $8.0 million, all at floating interest rates. As shown below, 31% of the loan balances in these combined portfolios will either have a rate reset or mature in 2025 and 2026, with another 56% with rate resets or maturing in 2027.
Previous wording
The table below segments our portfolio of loans secured by Multi-Family properties based on rental terms and location. As shown below, 63% of the combined portfolio is secured by properties subject to free market rental terms, the dominant tenant type, and 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.
Current wording
The table below segments our portfolio of loans secured by Multi-Family properties based on rental terms and location. As shown below, 63% 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.
Previous wording
The Bank’s exposure to the Office market is minor at $45.5 million (2.3% of total loans), has a 1.8x weighted average DSCR, a 54% weighted average LTV and less than $400 thousand of exposure in Manhattan. The portfolio has no delinquencies, defaults or modifications.
Current wording
The Bank’s exposure to the Office market is minor. Loans secured by office space accounted for 2.23% of the total loan portfolio with a total balance of $43.8 million, of which less than 1% is located in Manhattan. The pool has a 2.32x weighted average DSCR, a 53% weighted average LTV and less than $353,000 of exposure in Manhattan.
Previous wording
Liquidity and Capital Resources – Liquidity management is defined as the ability of the Company and the Bank to meet their financial obligations on a continuous basis without material loss or disruption of normal operations. These obligations include the withdrawal of deposits on demand or at their contractual maturity, the repayment of borrowings as they mature, funding new and existing loan commitments and the ability to take advantage of business opportunities as they arise. Asset liquidity is provided by short-term investments, such as fed funds sold, the marketability of securities available for sale and interest-bearing deposits due from the Federal Reserve, FHLB and correspondent banks, which totaled $141.2 million and $177.2 million at September 30, 2024 and December 31, 2023, respectively. These liquid assets may include assets that have been pledged primarily against municipal deposits or borrowings. Liquidity is also provided by the maintenance of a base of core deposits, cash and non-interest-bearing deposits due from banks, the ability to sell or pledge marketable assets and access to lines of credit. At September 30, 2024, liquidity sources, which include cash and unencumbered securities and secured and unsecured funding capacity, totaled $637.1 million.
Current wording
Liquidity and Capital Resources – Liquidity management is defined as the ability of the Company and the Bank to meet their financial obligations on a continuous basis without material loss or disruption of normal operations. These obligations include the withdrawal of deposits on demand or at their contractual maturity, the repayment of borrowings as they mature, funding new and existing loan commitments and the ability to take advantage of business opportunities as they arise. Asset liquidity is provided by short-term investments, such as fed funds sold, the marketability of securities available for sale and interest-bearing deposits due from the Federal Reserve Bank of New York, FHLB and correspondent banks, which totaled $253.4 million and $246.6 million at March 31, 2025 and December 31, 2024, respectively. These liquid assets may include assets that have been pledged primarily against municipal deposits or borrowings. Liquidity is also provided by the maintenance of a base of core deposits, cash and non-interest-bearing deposits due from banks, the ability to sell or pledge marketable assets and access to lines of credit. At March 31, 2025, undrawn liquidity sources, which include cash and unencumbered securities and secured and unsecured funding capacity, totaled $679.0 million or approximately 322% of uninsured deposit balances.
Previous wording
The Company’s primary sources of funds are cash provided by deposits, which may include brokered and listing service deposits, borrowings, proceeds from maturities and sales of securities and cash provided by operating activities. At September 30, 2024, total deposits were $2.0 billion, of which $491.9 million were time deposits scheduled to mature within the next 12 months. Based on historical experience, the Company expects to be able to replace a substantial portion of those maturing deposits with comparable deposit products. Insured and collateralized deposits, which include municipal deposits, accounted for approximately 86% of total deposits at September 30, 2024. At September 30, 2024 and December 31, 2023, the Company had $125.8 million and $129.0 million, respectively, in borrowings outstanding.
Current wording
The Company’s primary sources of funds are cash provided by deposits, which may include brokered and listing service deposits, borrowings, proceeds from maturities and sales of securities and cash provided by operating activities. At March 31, 2025, total deposits were $2.0 billion, of which $505.3 million were time deposits scheduled to mature within the next 12 months. Based on historical experience, the Company expects to be able to replace a substantial portion of those maturing deposits with comparable deposit products. Insured and collateralized deposits, which include municipal deposits, accounted for approximately 89% of total deposits at March 31, 2025. At March 31, 2025 and December 31, 2024, the Company had $107.8 million in borrowings outstanding.
Previous wording
The Liquidity and Wholesale Funding Policy of the Bank establishes specific policies and operating procedures governing liquidity levels to assist management in developing plans to address future and current liquidity needs. Management monitors the rates and cash flows from loan and investment portfolios while also examining the maturity structure and volatility characteristics of liabilities to develop an optimum asset/liability mix. Available funding sources include retail, commercial and municipal deposits, purchased liabilities and stockholders’ equity. Daily, management receives a current cash position update to ensure that all obligations are satisfied. On a weekly basis, appropriate senior management receives a current liquidity position report and a ninety day forecasted cash flow to ensure that all short-term obligations will be met and there is sufficient liquidity available. At September 30, 2024, the Bank had a total borrowing capacity of $692.0 million at the Federal Home Loan Bank of New York, of which $368.1 million was used to collateralize municipal deposits and $125.8 million was utilized for overnight and term advances. At September 30, 2024, the Bank had a $263.7 million collateralized line of credit from the Federal Reserve Bank of New York’s discount window with no outstanding borrowings. At September 30, 2024, the Bank had access to approximately $92 million in unsecured lines of credit extended by correspondent banks, if needed, for short-term funding purposes. No borrowings were outstanding under lines of credit with correspondent banks at September 30, 2024.
Current wording
The Liquidity and Wholesale Funding Policy of the Bank establishes specific policies and operating procedures governing liquidity levels to assist management in developing plans to address future and current liquidity needs. Management monitors the rates and cash flows from loan and investment portfolios while also examining the maturity structure and volatility characteristics of liabilities to develop an optimum asset/liability mix. Available funding sources include retail, commercial and municipal deposits, purchased liabilities and stockholders’ equity. Daily, management receives a current cash position update to ensure that all obligations are satisfied. On a weekly basis, appropriate senior management receives a current liquidity position report and a ninety day forecasted cash flow to ensure that all short-term obligations will be met and there is sufficient liquidity available. At March 31, 2025, the Bank had a total borrowing capacity of $698.0 million at the Federal Home Loan Bank of New York, of which $504.3 million was used to collateralize municipal deposits and $107.8 million was utilized for term advances. At March 31, 2025, the Bank had a $239.9 million collateralized line of credit from the Federal Reserve Bank of New York’s discount window with no outstanding borrowings. At March 31, 2025, the Bank had access to approximately $92 million in unsecured lines of credit extended by correspondent banks, if needed, for short-term funding purposes. No borrowings were outstanding under lines of credit with correspondent banks at March 31, 2025.
Previous wording
Our sources of wholesale funding included brokered certificates of deposit, listing service certificates of deposit and insured cash sweep (“ICS”) reciprocal deposits in excess of 20% of total liabilities, which balances totaled approximately $87.6 million, $4.4 million and $56.7 million, or 4.5%, 0.2% and 2.9% of total deposits, respectively, at September 30, 2024. We utilized brokered certificates of deposit and listing service certificates of deposit as alternatives to other forms of wholesale funding, including borrowings, when interest rates and market conditions favor the use of such deposits. For a portion of our brokered certificates of deposit, we utilized interest rate swap contracts to effectively extend their duration and to fix their cost.
Current wording
Our sources of wholesale funding included brokered certificates of deposit, listing service certificates of deposit and insured cash sweep (“ICS”) reciprocal deposits in excess of 20% of total liabilities, which balances totaled approximately $108.3 million, $2.4 million and $20.4 million, or 5.6%, 0.1% and 1.1% of total deposits, respectively, at March 31, 2025. We utilized brokered certificates of deposit and listing service certificates of deposit as alternatives to other forms of wholesale funding, including borrowings, when interest rates and market conditions favor the use of such deposits. For a portion of our brokered certificates of deposit, we utilized interest rate swap contracts to effectively extend their duration and to fix their cost.
Previous wording
The Company strives to maintain an efficient level of capital, commensurate with its risk profile, on which a competitive rate of return to stockholders will be realized over the short and long terms. Capital is managed to enhance stockholder value while providing flexibility for management to act opportunistically in a changing marketplace. Management continually evaluates the Company’s capital position in light of current and future growth objectives and regulatory guidelines. Total stockholders’ equity was $192.3 million at September 30, 2024 compared to $184.8 million at December 31, 2023. The $7.5 million increase was primarily due to an increase of $6.2 million in retained earnings and a decrease of $0.3 million in accumulated other comprehensive loss. The increase in retained earnings was due primarily to net income of $8.4 million for the nine months ended September 30, 2024, which was offset by $2.2 million of dividends declared. The accumulated other comprehensive loss at September 30, 2024 was 1.1% of total equity and was comprised of a $1.0 million after tax net unrealized loss on the investment portfolio and a $1.1 million after tax net unrealized loss on derivatives.
Current wording
The Company strives to maintain an efficient level of capital, commensurate with its risk profile, on which a competitive rate of return to stockholders will be realized over the short and long terms. Capital is managed to enhance stockholder value while providing flexibility for management to act opportunistically in a changing marketplace. Management continually evaluates the Company’s capital position in light of current and future growth objectives and regulatory guidelines. Total stockholders’ equity was $196.6 million at March 31, 2025 and December 31, 2024. Retained earnings increased by $0.8 million due primarily to net income of $1.5 million for the quarter ended March 31, 2025, which was offset by $0.7 million of dividends declared. The accumulated other comprehensive loss at March 31, 2025 was 0.71% of total equity and was comprised of a $0.9 million after tax net unrealized loss on the investment portfolio and a $0.5 million after tax net unrealized loss on derivatives.
Previous wording
The Bank is subject to regulatory capital requirements. The Bank’s tier 1 leverage, common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratios were 8.85%, 12.99%, 12.99% and 14.24%, respectively, at September 30, 2024, exceeding all regulatory guidelines for a well-capitalized institution, the highest regulatory capital category. Moreover, capital rules also place limits on capital distributions and certain discretionary bonus payments if a banking organization does not maintain a buffer of common equity tier 1 capital above the minimum capital requirements. At September 30, 2024, the Bank’s capital buffer was in excess of requirements.
Current wording
The Bank is subject to regulatory capital requirements. The Bank’s tier 1 leverage, common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratios were 8.95%, 13.37%, 13.37% and 14.62%, respectively, at March 31, 2025, exceeding all regulatory guidelines for a well-capitalized institution, the highest regulatory capital category. Moreover, capital rules also place limits on capital distributions and certain discretionary bonus payments if a banking organization does not maintain a buffer of common equity tier 1 capital above the minimum capital requirements. At March 31, 2025, the Bank’s capital buffer was in excess of requirements.
Previous wording
On October 5, 2023, the Company announced that the Board of Directors approved a new stock repurchase program. Under the new repurchase program, the Company may repurchase up to 366,050 shares of its common stock, or approximately 5% of its then outstanding shares. The repurchase program permits shares to be repurchased in the open market as conditions allow, or in privately negotiated transactions, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission. The Company has not made any stock repurchases under the program. The remaining buyback authority under the share repurchase program therefore remained at 366,050 shares as of September 30, 2024.
Current wording
On October 5, 2023, the Company announced that the Board of Directors approved a stock repurchase program. Under the repurchase program, the Company may repurchase up to 366,050 shares of its common stock, or approximately 5% of its then outstanding shares. The repurchase program permits shares to be repurchased in the open market as conditions allow, or in privately negotiated transactions, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission. The Company has not made any stock repurchases under the
Previous wording
The Company’s total stockholders’ equity to total assets ratio and tangible common equity to tangible assets ratio (“TCE ratio”) were 8.26% and 7.49%, respectively, at September 30, 2024, versus 8.14% and 7.35%, respectively, at December 31, 2023 and 8.65% and 7.81%, respectively, at September 30, 2023. The TCE ratio is a non-GAAP ratio. The ratio of total stockholders’ equity to total assets is the most comparable U.S. GAAP measure to this non-GAAP ratio. The ratio of tangible common equity to tangible assets, or TCE ratio, is calculated by dividing total stockholders’ equity by total assets, after reducing both amounts by intangible assets. The TCE ratio is not required by U.S. GAAP or by applicable bank regulatory requirements, but is a metric used by management to evaluate the adequacy of our capital levels. Since there is no authoritative requirement to calculate the TCE ratio, our TCE ratio is not necessarily comparable to similar capital measures disclosed or used by other companies in the financial services industry. Tangible common equity and tangible assets are non-GAAP financial measures and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with U.S. GAAP. Set forth below are the reconciliations of tangible common equity to U.S. GAAP total stockholders’ equity and tangible assets to U.S. GAAP total assets at September 30, 2024 (in thousands). (See also Non-GAAP Disclosure contained herein.)
Current wording
The Company’s total stockholders’ equity to total assets ratio and tangible common equity to tangible assets ratio (“TCE ratio”) were 8.58% and 7.80%, respectively, at March 31, 2025, versus 8.50% and 7.73%, respectively, at December 31, 2024. The TCE ratio is a non-GAAP ratio. The ratio of total stockholders’ equity to total assets is the most comparable U.S. GAAP measure to this non-GAAP ratio. The ratio of tangible common equity to tangible assets, or TCE ratio, is calculated by dividing total stockholders’ equity by total assets, after reducing both amounts by intangible assets. The TCE ratio is not required by U.S. GAAP or by applicable bank regulatory requirements, but is a metric used by management to evaluate the adequacy of our capital levels. Since there is no authoritative requirement to calculate the TCE ratio, our TCE ratio is not necessarily comparable to similar capital measures disclosed or used by other companies in the financial services industry. Tangible common equity and tangible assets are non-GAAP financial measures and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with U.S. GAAP. Set forth below are the reconciliations of tangible common equity to U.S. GAAP total stockholders’ equity and tangible assets to U.S. GAAP total assets at March 31, 2025 (in thousands). (See also Non-GAAP Disclosure contained herein.)
Previous wording
Commitments to extend credit are agreements to lend to customers provided there are no violations of material conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the customer. Collateral required varies, but may include accounts receivable, inventory, equipment, real estate and income-producing commercial properties. At September 30, 2024 and December 31, 2023, commitments to originate loans and commitments under unused lines of credit for which the Bank is obligated amounted to approximately $123 million and $147 million, respectively.
Current wording
Commitments to extend credit are agreements to lend to customers provided there are no violations of material conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the customer. Collateral required varies, but may include accounts receivable, inventory, equipment, real estate and income-producing commercial properties. At March 31, 2025 and December 31, 2024, commitments to originate loans and commitments under unused lines of credit for which the Bank is obligated amounted to approximately $140.5 million and $130.3 million, respectively.
Previous wording
Letters of credit are conditional commitments guaranteeing payments of drafts in accordance with the terms of the letter of credit agreements. Commercial letters of credit are used primarily to facilitate trade or commerce and are also issued to support public and private borrowing arrangements, bond financings and similar transactions. Collateral may be required to support letters of credit based upon management’s evaluation of the creditworthiness of each customer. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At September 30, 2024 and December 31, 2023, letters of credit outstanding were approximately $0.8 million and $3.9 million, respectively.
Current wording
Letters of credit are conditional commitments guaranteeing payments of drafts in accordance with the terms of the letter of credit agreements. Commercial letters of credit are used primarily to facilitate trade or commerce and are also issued to support public and private borrowing arrangements, bond financings and similar transactions. Collateral may be required to support letters of credit based upon management’s evaluation of the creditworthiness of each customer. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At March 31, 2025 and December 31, 2024, letters of credit outstanding were approximately $0.2 million and $0.8 million, respectively.
Previous wording
Results of Operations – Comparison of the Nine Months Ended September 30, 2024 and 2023 – The Company recorded net income of $8.4 million during the nine months ended September 30, 2024, versus net income of $9.8 million in the comparable nine-month period a year ago. The decrease in earnings for the nine months ended September 30, 2024 from the comparable 2023 period resulted from a $2.6 million increase in the provision for credit losses expense and a $3.2 million increase in non-interest expense, which were partially offset by a $3.7 million increase in non-interest income, consisting primarily of gain on sale of loans held-for-sale, and a $0.7 million decrease in income tax expense.
Current wording
Results of Operations – Comparison of the Three Months Ended March 31, 2025 and 2024 – The Company recorded net income of $1.5 million during the three months ended March 31, 2025, versus net income of $4.1 million in the comparable 2024 quarter. The decrease in earnings for the three months ended March 31, 2025, versus the comparable 2024 quarter resulted from a $5.2 million increase in non-interest expenses, including core system conversion expenses, increases in salaries and employee benefits and a $0.3 million increase in provision for credit losses. These were partially offset by a $1.7 million increase in net interest income, a $0.2 million increase in non-interest income and a $1.1 million decrease in income tax expense.
Previous wording
The $1.3 million increase in net interest income for the three months ended September 30, 2024, versus the comparable 2023 quarter was due to improvement of the Company’s net interest margin to 2.37% in the 2024 quarter from 2.29% in the comparable 2023 quarter. The yield on interest earning assets increased to 6.17% in the 2024 quarter from 5.61% in the comparable 2023 quarter, an increase of 56 basis points. This increase was partially offset by a 58 basis point increase in the cost of interest-bearing liabilities to 4.53% in 2024 from 3.95% in the third quarter of 2023.
Current wording
The $1.7 million increase in net interest income for the three months ended March 31, 2025, versus the comparable 2024 quarter was due to improvement of the Company’s net interest margin to 2.68% in the 2025 quarter from 2.41% in the comparable 2024 quarter. The yield on interest earning assets decreased to 6.01% in the 2025 quarter from 6.03% in the comparable 2024 quarter, a decrease of 2 basis points that was partially offset by a 32 basis point decrease in the cost of interest-bearing liabilities to 4.01% in 2025 from 4.33% in the first quarter of 2024. The increase in the net interest margin was a result of the late 2024 reductions in the Fed Funds effective rate and the liability sensitive nature of the Bank’s balance sheet.
Previous wording
The Company recorded a $4.5 million provision for credit losses expense on loans for the nine months ended September 30, 2024, versus $1.9 million recorded for the comparable period in 2023. The increase was related to matters discussed above under the comparison of results for the three-month period. (See also Critical Accounting Policies, Judgments and Estimates and Asset Quality contained herein.)
Current wording
The Company recorded a $0.6 million provision for credit losses expense on loans for the three months ended March 31, 2025, versus $0.3 million recorded for the comparable period in 2024. The March 31, 2025 allowance for credit losses was $22.9 million versus $22.8 million at December 31, 2024. The allowance for credit losses as a percentage of total loans was 1.17% at March 31, 2025 and 1.15% at December 31, 2024. (See also Critical Accounting Policies, Judgments and Estimates and Asset Quality contained herein.)
Previous wording
The Company maintains a reserve, recorded in other liabilities, associated with unfunded loan commitments accepted by borrowers. The amount of the reserve was $0.3 million at September 30, 2024 and $0.1 million at December 31, 2023. This reserve is determined based upon the outstanding volume of loan commitments at each period end. Any increases or reductions in this reserve are recognized in provision for credit losses.
Current wording
The Company maintains a reserve, recorded in other liabilities, associated with unfunded loan commitments accepted by borrowers. The amount of the reserve was $0.3 million at March 31, 2025 and December 31, 2024. This reserve is determined based upon the outstanding volume of loan commitments at the end of each period. Any increases or reductions in this reserve are recognized in the provision for credit losses.
Previous wording
The Company recorded income tax expense of $1.1 million for an effective tax rate of 23.4% for the three months ended September 30, 2024, versus income tax expense of $1.2 million for an effective tax rate of 24.9% in the comparable 2023 period.
Current wording
The Company recorded income tax expense of $0.2 million for an effective tax rate of 13.8% for the three months ended March 31, 2025, versus income tax expense of $1.3 million for an effective tax rate of 24.9% in the comparable 2024 period. The decrease in the effective tax rate was due to the tax impact of the tax benefit from stock options that were exercised and the vesting of restricted stock. We expect a normalized run rate of 25.0% for the remainder of the year.
Previous wording
Asset Quality - Total non-accrual loans at September 30, 2024 were $15.4 million, or 0.77% of total loans, compared to $14.5 million, or 0.74% of total loans at December 31, 2023 and $14.9 million, or 0.80% of total loans, at September 30, 2023. The allowance for credit losses as a percentage of total non-accrual loans amounted to 152%, 136% and 98% at September 30, 2024, December 31, 2023 and September 30, 2023, respectively.
Current wording
Asset Quality - Total non-accrual loans at March 31, 2025 were $11.7 million, or 0.60% of total loans, compared to $16.4 million, or 0.82% of total loans at December 31, 2024. The decrease resulted primarily from the sale of non-performing loans totaling $5.0 million, net of a $0.3 million charge-off, during the quarter ended March 31, 2025. The allowance for credit losses as a percentage of total non-accrual loans amounted to 196%, 139% and 134% at March 31, 2025, December 31, 2024 and March 31, 2024, respectively.
Previous wording
Total loans having credit risk ratings of Special Mention and Substandard were $43.8 million at September 30, 2024, versus $42.4 million at December 31, 2023. The Company’s Special Mention and Substandard loans were comprised of residential real estate, multi-family, commercial real estate loans, commercial and industrial loans (including SBA facilities) and construction and land development loans at September 30, 2024. The Company had no loans with a credit risk rating of Doubtful for the periods presented. All loans not having credit risk ratings of Special Mention, Substandard or Doubtful are considered pass loans.
Current wording
Total loans having credit risk ratings of Special Mention and Substandard were $43.9 million at March 31, 2025, versus $40.8 million at December 31, 2024. The Company’s Special Mention and Substandard loans were comprised of residential real estate, multi-family, commercial real estate loans, commercial and industrial loans (including SBA facilities) and construction and land development loans at March 31, 2025. The Company had no loans with a credit risk rating of Doubtful for the periods presented. All loans not having credit risk ratings of Special Mention, Substandard or Doubtful are considered pass loans.
Previous wording
At September 30, 2024, the Company’s allowance for credit losses amounted to $23.4 million or 1.17% of period-end total loans outstanding. The allowance as a percentage of loans outstanding was 1.00% at December 31, 2023 and 0.78% at September 30, 2023. The Company recorded net loan charge-offs of $0.4 million during the three months ended September 30, 2024 versus net loan charge-offs of $1.2 million during the three months ended September 30, 2023.
Current wording
At March 31, 2025, the Company’s allowance for credit losses amounted to $22.9 million or 1.17% of period-end total loans outstanding. The allowance as a percentage of loans outstanding was 1.15% at December 31, 2024 and 0.99% at March 31, 2024. The Company recorded net loan charge-offs of $0.5 million during the three months ended March 31, 2025 versus net loan charge-offs of $0.1 million during the three months ended March 31, 2024.
Previous wording
The Company recorded a $0.2 million provision for credit losses expense on loans for the three months ended September 30, 2024, versus $0.5 million recorded for the comparable period in 2023. Additional information regarding the ACL and the associated provisions recognized during the quarters ended September 30, 2024 and 2023 is presented in Note 4 to the unaudited consolidated financial statements. (See also Critical Accounting Policies, Judgments and Estimates contained herein).
Current wording
The Company recorded a $0.6 million provision for credit losses expense on loans for the three months ended March 31, 2025, versus $0.3 million recorded for the comparable period in 2024. Additional information regarding the ACL and the associated provisions recognized during the quarters ended March 31, 2025 and 2024 is presented in Note 4 to the unaudited consolidated financial statements. (See also Critical Accounting Policies, Judgments and Estimates contained herein).
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
program. The remaining buyback authority under the share repurchase program therefore remained at 366,050 shares as of March 31, 2025.
Current report — wording carried from elsewhere
For the three months ended March 31, 2025 and 2024
Current report — wording carried from elsewhere
For the three months ended March 31, 2025 and 2024
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following table, “Net Interest Income Analysis”, presents for the nine months ended September 30, 2024 and 2023, the Company’s average assets, liabilities and stockholders’ equity. The Company’s net interest income, net interest spread and net interest margin are also reflected.
Previous report — wording carried elsewhere
The Company recorded income tax expense of $8.4 million for an effective tax rate of 24.5% for the nine months ended September 30, 2024, versus income tax expense of $3.5 million for an effective tax rate of 26.0% in the comparable 2023 period.