HV Bancorp, Inc. (the “Company”) (Nasdaq Capital Market: HVBC), the
holding company of Huntingdon Valley Bank (the “Bank”), reported
results for the Company for the quarter ended December 31, 2020.
At quarter end, the Company held total assets of $861.6
million (143.0% over prior year), total deposits of $730.8 million
(157.5% increase over prior year) and total equity of $38.9 million
(15.8% increase over prior year). Highlights in the quarter
include a record 895% growth in net earnings over the same period
in 2019 of $2.1 million, or $1.02 per basic and diluted share, vs.
net earnings of $207,000, or $0.10 per basic and diluted share in
2019. For the year ended December 31, 2020, net earnings
increased 471% over the same period in 2019 of $5.8 million, or
$2.84 per basic and diluted share vs. net income of $1.0 million,
or $0.49 per basic and diluted share. For the quarter end
December 31, 2020, ROA and ROE totaled 1.54% and 23.74%,
respectively. Shareholders’ equity increased 15.8% from $33.6
million at December 31, 2019, to $38.9 million at December 31,
2020, which increased book value for the Company from $14.81 per
share to $17.78 per share over the same period.
Travis J. Thompson, Esq., Chairman, President
& CEO, commented, “HVB achieved record performance for the
quarter and the year in spite of the unprecedented health and
economic challenges in the wake of the Covid-19 pandemic that
impacted our customers, employees and our community. The HVB team
continues to approach their work with dedication and perseverance,
consistently striving to deliver a superior experience. While I am
incredibly proud of our employees and what they have accomplished
this year, we remain acutely focused on the execution of our
strategic plan that began in 2017, with the conversion of a mutual
to a high performing stock bank.”
Highlights for the quarter and year ended December 31,
2020 include:
- Net income for the quarter was up
895% to $2.1 million compared to $207,000 from the same period in
2019. For the year ended 2020, net income was up 471% to $5.8
million compared to $1.0 million in the same period in 2019.
- Book value per share increased from
$14.81 at December 31, 2019, to $17.78 at December 31, 2020.
- Total combined revenue, comprising
interest and non-interest income, for the quarter ended December
31, 2020, was $8.5 million, an increase of $3.8 million or 80.9%
versus the same period in 2019. For the year ended December 31,
2020, total interest and non-interest income was $30.7 million, an
increase of $12.1 million or 65.1% versus the same period in
2019.
- Net interest income increased $1.1
million and $2.5 million to $3.2 million and $10.7 million,
respectively for the three months and year ended December 31, 2020
from $2.1 million and $8.2 million, respectively for the three
months and year ended December 31, 2019.
- Non-interest income increased $3.0
million and $10.2 million to $4.6 million and $16.9 million,
respectively for the three months and year ended December 31, 2020,
from $1.6 million and $6.7 million, respectively for the three
months and year ended December 31, 2019.
COVID-19 Update:
- Through participation in the SBA’s
Paycheck Protection Program (“PPP”), the Company processed over 450
applications from new and existing customers with an aggregate
outstanding balance of $64.4 million as of December 31, 2020, in
the first round of PPP loans. The forgiveness process of the first
round of PPP loans began in the fourth quarter of 2020 with
approximately $21.4 million in PPP forgiveness received to date. In
January 2021, the Company processed an additional 148 applications
with an outstanding balance of $23.0 million in the second round of
PPP loans.
- In December 2020, the Company
participated in the Federal Reserve’s Main Street Loan Program
funding approximately $31.1 million in loans.
- The Company utilized the Federal
Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”)
to fund a portion of PPP loans during the second and third quarter
of 2020. As of December 31, 2020, the Company had $48.7 million in
PPPLF advances outstanding.
- As of December 31, 2020, the
Company had accommodated 73 loan requests of payment deferrals for
certain borrowers that were impacted by COVID-19. As of December
31, 2020, there were two loans with an outstanding balance of $1.2
million in payment deferral. There was one residential loan with an
outstanding balance of $589,000 and one commercial real estate loan
with an outstanding balance of $596,000 in payment deferral.
- The Company continues to monitor
its liquidity and capital. As of December 31, 2020, our capital
ratios exceeded “well- capitalized” requirements (see selected
consolidated financial data and other data). As of December 31,
2020, the Company maintained $414.6 million, or 48.1% of total
assets, of cash and cash equivalents and $180.7 million, or 21.0%
of total assets, of available borrowing capacity. The $180.7
million of available borrowing capacity consisted of unused
borrowing capacity of $161.1 million at the Federal Home Loan Bank
of Pittsburgh, (“FHLB”), $15.7 million of borrowing capacity with
the PPPLF, $3.0 million of borrowing capacity from the Atlantic
Community Bankers Bank and a $923,000 line of credit at the Federal
Reserve Bank of Philadelphia.
Balance Sheet: December 31, 2020, compared to December
31, 2019
Total assets increased $507.0 million, or 143.0%, to $861.6
million at December 31, 2020, from $354.6 million at December 31,
2019. The growth in total assets was primarily due to increases of
$394.0 million in cash and cash equivalents $58.8 million in loans
receivable, $45.7 million in loans held for sale, $2.4 million in
available-for-sale securities, $2.0 million increase in mortgage
servicing right, $1.7 million in operating lease right-of-use asset
and $1.7 million in mortgage banking derivatives. In December 2020,
the Company experienced an increase in cash as a result of an
increase in core deposits from certain accounts which it
anticipates to be temporary and that a significant portion will be
dispersed during the first quarter of 2021.
Total liabilities increased $501.7 million, or
156.3%, to $822.7 million at December 31, 2020, from $321.0 million
at December 31, 2019. The increase in total liabilities was
primarily from a $447.0 million increase in deposits, $48.7 million
increase in advances from the PPPLF, $4.3 million in other
liabilities and $1.9 million increase in operating lease
liabilities. Deposits increased $447.0 million from December 31,
2020, to December 31, 2019, primarily as a result of a $453.2
million increase in our core deposits offset by $6.2 million
decrease in certificate of deposits. As discussed above, there was
an increase in core deposits from certain accounts which we
anticipate to be temporary and that a significant portion will be
dispersed during the first quarter of 2021. Our core deposits
(consisting of demand deposits, money market deposit accounts,
passbook and statement savings accounts, and checking accounts)
increased $453.2 million, or 210.3%, to $668.7 million at December
31, 2020, from $215.5 million at December 31, 2019. Offsetting this
increase, was a decrease of $6.2 million, or 9.1% in certificates
of deposit to $62.1 million at December 31, 2020, from $68.3
million at December 31, 2019.
Total shareholders’ equity increased $5.3
million, or 15.8%, to $38.9 million at December 31, 2019, compared
to $33.6 million at December 31, 2020. The increase was
primarily due to net income of $5.8 million, $256,000 increase in
other comprehensive income due to the fair value adjustments, net
of deferred tax, on the investment securities available-for-sale
portfolio combined with $244,000 increase in share-based
compensation expense and ESOP shares committed to be released of
$125,000. Offsetting these increases was $1.1 million in treasury
stock repurchases primarily as part of the stock repurchase plan
approved in April 2019.
Income Statement: December 31, 2020,
compared to December 31, 2019
Net Interest Income:
Net interest income increased $1.1 million to
$3.2 million for the quarter ended December 31, 2020, from $2.1
million for quarter ended December 31, 2019. The increase reflected
a $21.6 million increase in our net interest-earning assets, which
increased to $70.4 million for the quarter ended December 31, 2020,
from $48.8 million for the quarter ended December 31, 2019. Net
interest income increased $2.5 million to $10.7 million for the
year ended December 31, 2020, from $8.2 million for the year ended
December 31, 2019. Our net interest-earning assets increased 35.6%
to $66.3 million for the year ended December 31, 2020, from $48.9
million for the year ended December 31, 2019.
Provision for loan losses:
Provision for loan losses increased by $85,000
to $123,000 for the quarter ended December 31, 2020, from $38,000
during the quarter ended December 31, 2019. During the quarter
ended December 31, 2020, we recorded net charge-offs of $15,000
compared to net recoveries of $66,000 received for the quarter
ended December 31, 2019. Provision for loan losses increased by
$298,000 to $1.1 million for the year ended December 31, 2020, from
$810,000 during the year ended December 31, 2019, primarily because
of net charge-offs of $529,000 related to the medical education
loans. During the year ended December 31, 2020, total charge-offs
of $530,000 were recorded and $1,000 of recoveries were received
compared to total charge-offs of $425,000 were recorded and $97,000
of recoveries were received during the year ended December 31,
2019. Due to continued uncertainty of the economic conditions
resulting from the COVID-19 pandemic, the Company increased the
qualitative factors in the calculation of the allowance for loan
losses. The Company will continue to monitor and additional
adjustment to the allowance for loan losses may be
necessary.
Non-Interest Income:
Non-interest income was $4.6 million and $16.9
million for the quarter and year ended December 31, 2020,
respectively, compared to $1.6 million and $6.7 million for the
same periods in 2019. The increase in non-interest income of $3.0
million to $4.6 million for the quarter ended December 31, 2020,
compared to $1.6 million for the same period in 2019 was primarily
due to a $4.4 million increase in gain on sales of loans, net
offset by ($993,000) in change of fair value of loans held-for-sale
and an increase in the loss from derivative instruments of
($391,000). The increase in non-interest income of $10.2 million to
$16.9 million for the year ended December 31, 2020, from $6.7
million for the year ended December 31, 2019, was primarily a $8.4
million increase in the gain on sales of loans, net and a $942,000
increase in change of fair value of loans held-for-sale and an
increase in the gain from derivative instruments of $747,000.
Non-Interest Expense:
Total non-interest expense increased $1.5
million, or 45.5% to $4.8 million for the quarter ended December
31, 2020 from $3.3 million for the quarter ended December 31, 2019,
and increased $5.7 million, or 44.5% to $18.5 million for the year
ended December 31, 2020 from $12.8 million for the year ended
December 31, 2019. The increase for the quarter ended December 31,
2020, compared to the quarter ended December 31, 2019, was
primarily a result of increases of $1.1 million in salaries and
employee benefits, $154,000 in data processing related operations
and $104,000 in occupancy expense. Salaries and employee benefits
increased as full time equivalent (FTE) employees increased to
one-hundred twenty-six as of December 31, 2020, from ninety-seven
as of December 31, 2019, primarily as a result of the expansion of
the Company’s lending and business banking operations. For the year
period ended December 31, 2020, the increase was primarily a result
of additional salaries and employee benefits of $3.9 million,
professional fees and other expenses of $990,000, data processing
related operations of $370,000, and $289,000 in occupancy
expense.
Income Taxes:
Income tax expense was $781,000 and $2.2 million for the quarter
and year ended ending December 31, 2020, respectively compared to
$82,000 and $285,000 during the quarter and year ended ending
December 31, 2019. The increase in income tax expense for the
quarter and year period ended December 31, 2020, respectively
compared to the same periods a year ago reflected an increase in
income before taxes.
Net Income & Book
Value:
Net income increased $1.9 million to $2.1
million, approximately $1.02 cents per basic and diluted share for
the quarter ended December 31, 2020, as compared to 207,000, or
approximately $0.10 cents per basic and diluted share for the
quarter ended December 31, 2019. Net income increased $4.8 million
to $5.8 million, approximately $2.84 cents per basic and diluted
share for the year ended December 31, 2020, as compared to $1.0
million, or approximately $0.49 cents per basic and diluted share
for the year ended December 31, 2019. Book value per share
increased from $14.81 at December 31, 2019, to $17.78 at December
31, 2020.
Asset quality:
At December 31, 2020, the Company’s
non-performing assets totaled $2.3 million, or 0.26% of total
assets compared to $3.7 million or 1.05% at December 31, 2019.
Non-performing assets decreased $1.4 million primarily because of
decreases in non-performing loans of $754,000 in non-performing
one-to four-family residential real estate loans, $388,000 in
medical education loans and $308,000 decrease in non-performing
home equity and HELOCs loans as compared to December 31, 2019.
There were no non-accruing troubled debt restructurings at December
31, 2020 and 2019.
The allowance for loan losses totaled $2.0
million, or 0.64% of total loans and 89.5% of total non-performing
loans at December 31, 2020 as compared to $1.4 million, or 0.56% of
total loans of total loans and 38.8% of total non-performing loans
at December 31, 2019.
About HV Bancorp, Inc.
HV Bancorp, Inc. (Nasdaq Capital Market: HVBC)
is a bank holding company headquartered in Doylestown, PA. Through
its wholly owned subsidiary Huntingdon Valley Bank, we primarily
serve communities located in Montgomery, Bucks and Philadelphia
Counties in Pennsylvania, New Castle County in Delaware, and
Burlington County in New Jersey from our executive office, six full
service bank offices and one limited service bank office. We also
operate four loan production offices in our geographical
footprint.
Forward-Looking Statements Certain statements
contained herein are "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such forward-looking
statements may be identified by reference to a future period or
periods, or by the use of forward looking terminology, such as
"may," "will," "believe," "expect," "estimate," "anticipate,"
"continue," or similar terms or variations on those terms, or the
negative of those terms. Such forward-looking statements are
subject to risk and uncertainties described in our SEC filings,
which could cause actual results to differ materially from those
currently anticipated due to a number of factors, which include,
but are not limited to, the negative impact of severe wide-ranging
and continuing disruptions caused by the spread of coronavirus
COVID-19 on current operations, customers and the economy in
general, changes in interest rate environment, increases in
nonperforming loans, legislative and regulatory changes that
adversely affect the business of the Company and the Bank, and
changes in the securities markets. Except as required by law, the
Company does not undertake any obligation to update any
forward-looking statements to reflect changes in belief,
expectations or event.
|
|
Selected Consolidated Financial and Other Data
(Unaudited) |
|
|
|
|
|
|
|
At December 31, 2020 |
|
At December 31, 2019 |
|
At June 30, 2019 |
(In thousands) |
|
|
|
|
|
|
|
|
Financial Condition
Data: |
|
|
|
|
|
|
|
|
Total assets |
$ |
861,621 |
|
$ |
354,586 |
|
$ |
344,195 |
Cash and cash equivalents |
|
414,590 |
|
|
20,625 |
|
|
20,234 |
Investment securities
available-for-sale, at fair value |
|
23,518 |
|
|
21,156 |
|
|
35,236 |
Equity securities |
|
500 |
|
|
500 |
|
|
500 |
Loans held for sale at fair
value |
|
83,549 |
|
|
37,876 |
|
|
33,748 |
Loans receivable, net |
|
313,811 |
|
|
255,032 |
|
|
240,786 |
Deposits |
|
730,826 |
|
|
283,767 |
|
|
275,130 |
Federal Home Loan Bank
advances |
|
26,269 |
|
|
27,000 |
|
|
28,000 |
Federal Reserve's PPPLF
advances |
|
48,682 |
|
|
— |
|
|
— |
Securities sold under
agreements to repurchase |
|
— |
|
|
— |
|
|
3,789 |
Total liabilities |
|
822,694 |
|
|
320,987 |
|
|
311,515 |
Total shareholders’
equity |
|
38,927 |
|
|
33,599 |
|
|
32,680 |
|
|
For the Three Months Ended |
|
For the Year Ended |
|
|
December 31 |
|
December 31 |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
(In thousands except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
Operating Data: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
3,930 |
|
$ |
3,151 |
|
$ |
13,823 |
|
$ |
11,849 |
Interest expense |
|
|
732 |
|
|
1,062 |
|
|
3,143 |
|
|
3,671 |
Net interest income |
|
|
3,198 |
|
|
2,089 |
|
|
10,680 |
|
|
8,178 |
Provision for loan losses |
|
|
123 |
|
|
38 |
|
|
1,108 |
|
|
810 |
Net interest income after
provision for loan losses |
|
|
3,075 |
|
|
2,051 |
|
|
9,572 |
|
|
7,368 |
Gain on sale of loans,
net |
|
|
6,315 |
|
|
1,936 |
|
|
13,315 |
|
|
4,913 |
Other non-interest (loss)
income |
|
|
(1,729 |
) |
|
(368 |
) |
|
3,555 |
|
|
1,790 |
Non-interest income |
|
|
4,586 |
|
|
1,568 |
|
|
16,870 |
|
|
6,703 |
Non-interest expense |
|
|
4,820 |
|
|
3,330 |
|
|
18,470 |
|
|
12,776 |
Income before income
taxes |
|
|
2,841 |
|
|
289 |
|
|
7,972 |
|
|
1,295 |
Income tax expense |
|
|
781 |
|
|
82 |
|
|
2,204 |
|
|
285 |
Net income |
|
$ |
2,060 |
|
$ |
207 |
|
$ |
5,768 |
|
$ |
1,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share-Basic |
|
$ |
1.02 |
|
$ |
0.10 |
|
$ |
2.84 |
|
$ |
0.49 |
Earnings per share
-Diluted |
|
$ |
1.02 |
|
$ |
0.10 |
|
$ |
2.84 |
|
$ |
0.49 |
Average common shares
outstanding- Basic |
|
|
2,012,806 |
|
|
2,045,734 |
|
|
2,033,083 |
|
|
2,041,527 |
Average common shares
outstanding- Diluted |
|
|
2,015,115 |
|
|
2,045,734 |
|
|
2,033,083 |
|
|
2,046,296 |
Shares outstanding end of
period |
|
|
2,189,408 |
|
|
2,268,917 |
|
|
2,189,408 |
|
|
2,268,917 |
Book value per share |
|
$ |
17.78 |
|
$ |
14.81 |
|
$ |
17.78 |
|
$ |
14.81 |
|
|
For the Three Months Ended December 31, |
|
For the Year Ended December 31, |
|
|
|
|
2020 |
|
|
2019 |
|
2020 |
|
|
2019 |
|
|
Performance
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(1) |
|
1.54 |
|
% |
0.23 |
|
% |
1.33 |
|
% |
0.29 |
|
% |
Return on average
equity(1) |
|
23.74 |
|
|
2.54 |
|
|
16.83 |
|
|
3.11 |
|
|
Interest rate spread (2) |
|
2.40 |
|
|
2.27 |
|
|
2.43 |
|
|
2.26 |
|
|
Net interest margin (3) |
|
2.49 |
|
|
2.48 |
|
|
2.57 |
|
|
2.45 |
|
|
Efficiency ratio (4) |
|
61.92 |
|
|
91.06 |
|
|
67.04 |
|
|
85.85 |
|
|
Average interest-earning
assets to average interest-bearing liabilities |
|
115.85 |
|
|
116.98 |
|
|
119.01 |
|
|
117.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios
(5): |
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets as a
percent of total assets |
|
0.26 |
|
% |
1.05 |
|
% |
0.26 |
|
% |
1.05 |
|
% |
Non-performing loans as a
percent of total loans |
|
0.71 |
|
|
1.45 |
|
|
0.71 |
|
|
1.45 |
|
|
Allowance for loan losses as a
percent of non-performing loans |
|
89.49 |
|
|
38.80 |
|
|
89.49 |
|
|
38.80 |
|
|
Allowance for loan losses as a
percent of total loans |
|
0.64 |
|
|
0.56 |
|
|
0.64 |
|
|
0.56 |
|
|
Net (recoveries) charge-offs
to average outstanding loans during the period |
|
0.00 |
|
|
(0.03 |
) |
|
0.18 |
|
|
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios:
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital
(to risk weighted assets) |
|
12.70 |
|
% |
14.02 |
|
% |
12.70 |
|
% |
14.02 |
|
% |
Tier 1 leverage (core) capital
(to adjusted tangible assets) |
|
7.37 |
|
|
8.52 |
|
|
7.37 |
|
|
8.52 |
|
|
Tier 1 risk-based capital (to
risk weighted assets) |
|
12.70 |
|
|
14.02 |
|
|
12.70 |
|
|
14.02 |
|
|
Total risk-based capital (to
risk weighted assets) |
|
13.41 |
|
|
14.70 |
|
|
13.41 |
|
|
14.70 |
|
|
Average equity to average
total assets (7) |
|
6.49 |
|
|
9.24 |
|
|
7.91 |
|
|
9.33 |
|
|
__________________
(1) |
Annualized for
the three months ended December 31, 2020 and 2019. |
(2) |
Represents the difference between the weighted-average yield on
interest-earning assets and the weighted-average cost of
interest-bearing liabilities for the period. |
(3) |
The net interest margin represents net interest income as a
percent of average interest-earning assets for the period. |
(4) |
The efficiency ratio represents non-interest expense dividend
by the sum of the net interest income and non-interest income. |
(5) |
Asset quality ratios are period ratios. |
(6) |
Capital ratios are for Huntingdon Valley Bank. |
(7) |
Represents consolidated average equity to average total
assets. |
Contact: Joseph C. O’Neill, Jr.,EVP/ Chief Financial
Officer(267) 280-4000
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