Hanover Bancorp reported a significant decline in net income for Q4 2025 compared to the prior year, primarily driven by a substantial increase in the provision for credit losses and a decrease in non-interest income. Despite these challenges, the company saw improvements in pre-provision net revenue, net interest income, and its operating efficiency ratio, alongside steady deposit growth.
Pre-provision net revenue (PPNR) reached its highest level since Q4 2022 at $6.2 million, or 1.08% of average assets.
positiveNet interest income increased by 14.64% year-over-year to $15.8 million, driven by a net interest margin expansion to 2.84%.
positiveOperating efficiency ratio improved to 66.46%, the lowest level since Q1 2024, indicating better expense management.
positiveTotal deposits increased by 3.79% year-over-year to $2.03 billion, with demand deposits showing strong growth.
positiveThe company repurchased 56,711 shares of common stock during the quarter.
neutralA quarterly cash dividend of $0.10 per share was declared.
neutralNet income for Q4 2025 plummeted to $33 thousand, a significant decrease from $3.9 million in Q4 2024, largely due to a $6.1 million provision for credit losses.
negativeNon-performing loans increased to 1.08% of total loans outstanding ($21.6 million) at December 31, 2025, up from 0.82% ($16.4 million) at December 31, 2024.
negativeNet charge-offs for the quarter were $9.6 million, including a $4.0 million partial charge-off on a C&I loan that deteriorated to non-performing status.
negativeGain on sale of loans held-for-sale decreased significantly to $1.2 million in Q4 2025 from $3.0 million in Q4 2024.
attentionFull-year 2025 net income was $7.5 million ($1.00/diluted share), down from $12.3 million ($1.66/diluted share) in 2024, impacted by higher provisions and conversion expenses.
negativeThe cost of interest-bearing liabilities decreased by 57 basis points year-over-year, but the yield on interest-earning assets also decreased by 22 basis points.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
Fourth quarter core performance, as evidenced by our steadily increasing NIM, expanding commercial deposit base, diversifying verticals and strong Pre-Provision Net Revenue of $6.2 million, underscored the strength of our growing opportunity.
With the decision in the fourth quarter to address the impact of certain challenging credits through proactive and focused NPL resolution, we have positioned the Bank for what we believe will be sustained performance in 2026.
Strong loan pipelines, opportunistic relationship-based CRE lending in and around Long Island, while continuing to pro-actively manage our concentration ratio and expanding our commercial branch footprint all point to Hanover Bank as the bank of choice for business owners across Long Island and the broader New York Metro area.
Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.
Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.