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 March 31, 2021.
At quarter end March 31, 2021, the Company held total assets
of $595.7 million (67.5% over first quarter 2020), total deposits
of $477.2 million (71.5% increase over first quarter 2020) and
total equity of $39.9 million (18.0% increase over first quarter
2020). Highlights in the first quarter of 2021 include net
earnings of $1.3 million, or $0.66 per basic share and $0.65 per
diluted share, vs. net earnings of $149,000, or $0.07 per basic and
diluted share in 2020. For the quarter end March 31, 2021,
ROA and ROE was 0.78% and 13.79%, respectively. Shareholders’
equity increased 18.0% from $33.8 million at March 31, 2020, to
$39.9 million at March 31, 2021, which increased book value for the
Company from $14.97 per share to $18.32 per share over the same
period.
Travis J. Thompson, Esq., Chairman, President
& CEO, commented, “HVB’s outstanding first quarter underscores
the successful execution of the Bank’s growth strategy resulting in
strong performance in both net-interest and non-interest income.
Residential Mortgage originations continued its robust pace while
the Business Banking team successfully originated over 340 second
round PPP loans totaling $48.1 million. The dedication demonstrated
by the HVB team since the onset of the COVID-19 pandemic has been
remarkable as the Bank continues to attract new relationships by
delivering a superior customer experience.”
Finally, Mr. Thompson noted, “Our Residential
and Commercial lending pipelines are increasing as customer
sentiment on the economic recovery following the COVID-19 pandemic
and its effects continues to improve. With our newest locations in
Mt Laurel, NJ and the South Philadelphia Banking Office opening
this summer, HVB is well positioned to capitalize on market
opportunities over a greater geography.”
Highlights for the quarter ended March 31, 2021
include:
- Net income for the quarter was $1.3
million compared to $149,000 from the same period in 2020.
- Book value per share increased from
$14.97 at March 31, 2020, to $18.32 at March 31, 2021.
- Total combined revenue, comprising
interest and non-interest income, for the quarter ended March 31,
2021, was $7.9 million, an increase of $2.7 million or 52.9% versus
the same period in 2020.
- Net interest income increased $1.2
million to $3.3 million for the three months ended March 31, 2021
from $2.1 million for the three months ended March 31, 2020.
- Non-interest income increased $2.0
million to $4.1 million for the three months ended March 31, 2021,
from $2.1 million for the three months ended March 31, 2020.
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 $50.7 million as of March 31, 2021, 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 $30.9 million in PPP forgiveness received to date. In
the first quarter of 2021, the Company processed over 340
applications with an outstanding balance of $48.1 million in the
second round of PPP loans.
- As of March 31, 2021, the Company
had accommodated 75 residential and commercial loan requests of
payment deferrals for borrowers that were impacted by COVID-19. As
of March 31, 2021, there were two borrowers with an aggregate
outstanding balance of $1.0 million in residential loans in payment
deferral.
- The Company continues to monitor
its liquidity and capital. As of March 31, 2021, our capital ratios
exceeded “well- capitalized” requirements (see selected
consolidated financial data and other data). As of March 31, 2021,
the Company maintained $138.2 million, or 23.2% of total assets, of
cash and cash equivalents and $211.0 million, or 35.4% of total
assets, of available borrowing capacity. The $211.0 million of
available borrowing capacity consisted of unused borrowing capacity
of $143.8 million at the Federal Home Loan Bank of Pittsburgh,
$63.4 million of borrowing capacity with the PPPLF, $3.0 million of
borrowing capacity from the Atlantic Community Bankers Bank and a
$783,000 line of credit at the Federal Reserve Bank of
Philadelphia.
Balance Sheet: March 31, 2021, compared to December 31,
2020
Total assets decreased $265.9 million to $595.7 million at March
31, 2021 from $861.6 million at December 31, 2020. The decrease was
primarily the result of decreases of $276.4 million in cash and
cash equivalents and $24.6 million in loans held for sale, offset
by increases of $28.2 million in loans receivable, $4.3 million in
investment securities, $1.7 million in right-of-use asset and
$760,000 in mortgage servicing rights. Cash and cash equivalents
decreased $276.4 million to $138.2 million at March 31, 2021 from
$414.6 million at December 31, 2020 as a result of anticipated
outflows of retail deposits in our core deposit from certain
accounts.
Total liabilities decreased $266.8 million, or
32.4%, to $555.9 million at March 31, 2021, from $822.7 million at
December 31, 2020. The decrease in total liabilities was primarily
from a $253.6 million decrease in deposits, $13.4 million decrease
in advances from the PPPLF, $1.0 million decrease in other
liabilities offset by a $1.7 million increase in operating lease
liabilities. Deposits decreased $253.6 million, or 34.7%, to $477.2
million at March 31, 2021 from $730.8 million at December 31, 2020.
Our core deposits (consisting of demand deposits, money market,
passbook and statement and checking accounts) decreased $250.7
million, or 37.5%, to $418.0 million at March 31, 2021 from $668.7
million at December 31, 2020. As previously discussed, there was an
anticipated decrease in certain retail accounts in our core
deposits during the first quarter of 2021. Certificates of deposit
decreased $2.9 million, or 4.7%, to $59.2 million at March 31, 2021
from $62.1 million at December 31, 2020. The decrease in
certificates of deposit was primarily the result of a decrease in
retail growth of certificates of deposit.
Total shareholders’ equity increased $1.0
million to $39.9 million at March 31, 2021 compared to $38.9
million at December 31, 2020 primarily as a result of net income of
$1.3 million for the three months ended March 31, 2021, share based
compensation expense of $61,000, ESOP shares committed to be
released of $36,000 and a stock option exercise of $21,000.
Offsetting these increases was other comprehensive loss of $232,000
due to the fair value adjustments, net of deferred tax, on the
investment securities available-for-sale portfolio and $263,000 in
treasury stock repurchases primarily as part of the stock
repurchase plan approved in April 2019.
Income Statement: March 31, 2021,
compared to March 31, 2020
Net Interest Income:
Net interest income increased $1.2 million to
$3.3 million for the three months ended March 31, 2021, from $2.1
million for three months ended March 31, 2020. The increase
reflected a $32.7 million increase in our net interest-earning
assets from $52.8 million for the three months ended March 31, 2020
to $85.5 million for the three months ended March 31, 2021.
Provision for loan losses:
Provision for loan losses increased by $37,000
to $148,000 for the three months ended March 31, 2021, from
$111,000 during the three months ended March 31, 2020. During the
three months ended March 31, 2021, we recorded net charge-offs of
$172,000 compared to net recoveries of $1,000 received for the
three months ended March 31, 2020. 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 adjustments to the allowance for loan losses may be
necessary.
Non-Interest Income:
Non-interest income increased $2.0 million to
$4.1 million for the three months ended March 31, 2021 from $2.1
million for the three months ended March 31, 2020. The gain on sale
of loans, net increased $3.3 million to $4.9 million for the three
months ended March 31, 2021 compared to $1.6 million for the three
months ended March 31, 2020. The increase was primarily a result of
higher loan sales which increased $125.6 million from $79.4 million
for the three months ended March 31, 2020 to $205.0 million for the
three months ended March 31, 2021. The change in fair value of
loans held for sale decreased $715,000 to a loss of ($709,000) for
the three months end March 31, 2021 compared to a gain of $6,000 in
same period in 2020. There was a loss on derivatives instruments,
net of ($236,000) for the three months end March 31, 2021 compared
to a gain of $384,000 in same period in 2020.
Non-Interest Expense:
Total non-interest expense increased $1.5
million, or 38.5% to $5.4 million for the three months ended March
31, 2021 from $3.9 million for the three months ended March 31,
2020. The increase for the three months ended March 31,
2021 compared to the three months of March 31, 2020 was primarily a
result of increases of $1.1 million in salaries and employee
benefits, $174,000 in data processing related operations costs and
$166,000 in Federal deposit insurance premiums. Salaries and
employee benefits increased as full time equivalent (FTE) employees
increased to one-hundred thirty-nine as of March 31, 2021, from
one-hundred one as of March 31, 2020, primarily a result of the
expansion of the Company’s lending and business banking
operations.
Income Taxes:
Income tax expense was $488,000 and $48,000 for
the three months ended March 31, 2021 and March 31, 2020,
respectively. The increase in income tax expense for the three
months ended March 31, 2021 compared to the same period a year ago
reflected an increase in income before taxes at an effective tax
rate of 27.3%.
Net Income & Book
Value:
Net income increased $1.2 million to $1.3
million, approximately $0.66 cents per basic share and $0.65 per
diluted share for the three months ended March 31, 2021, as
compared to $149,000, or approximately $0.07 cents per basic and
diluted share for the three months ended March 31, 2020. Book value
per share increased from $14.97 at March 31, 2020 to $18.32 at
March 31, 2021.
Asset quality:
At March 31, 2021, the Company’s non-performing
assets totaled $2.9 million, or 0.49% of total assets compared
to $2.3 million, or 0.26% at December 31, 2020. Non-performing
loans increased $692,000, or 30.7% as a result of an increase of
$731,000 in non-performing one-to four-family residential real
estate loans offset by a decrease $39,000 in non-performing medical
education loans as compared to December 31, 2020. There were no
non-accruing troubled debt restructurings at March 31, 2021 and
December 31, 2020.
The allowance for loan losses totaled $2.0
million, or 0.58% of total loans and 67.65% of total non-performing
loans at March 31, 2021 as compared to $2.0 million, or 0.64% of
total loans and 89.49% of total non-performing loans at December
31, 2020.
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, seven
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 March 31, 2021 |
|
|
At December 31, 2020 |
|
|
At March 31, 2020 |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Financial Condition
Data: |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
595,730 |
|
|
$ |
861,607 |
|
|
$ |
355,586 |
|
Cash and cash equivalents |
|
138,151 |
|
|
|
414,590 |
|
|
|
20,515 |
|
Investment securities
available-for-sale, at fair value |
|
27,848 |
|
|
|
23,518 |
|
|
|
23,200 |
|
Equity securities |
|
500 |
|
|
|
500 |
|
|
|
500 |
|
Loans held for sale, at fair
value |
|
58,868 |
|
|
|
83,549 |
|
|
|
37,368 |
|
Loans receivable, net |
|
342 042 |
|
|
|
313,811 |
|
|
|
252,704 |
|
Deposits |
|
477,188 |
|
|
|
730,826 |
|
|
|
278,185 |
|
Federal Home Loan Bank
advances |
|
26,309 |
|
|
|
26,269 |
|
|
|
32,000 |
|
Federal Reserve PPPLF
advances |
|
35,278 |
|
|
|
48,682 |
|
|
|
— |
|
Total liabilities |
|
555,878 |
|
|
|
822,680 |
|
|
|
321,773 |
|
Total shareholders’
equity |
|
39,852 |
|
|
|
38,927 |
|
|
|
33,813 |
|
|
|
For the Three Months Ended |
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
Operating
Data: |
|
|
|
|
|
|
|
|
Interest income |
|
$ |
3,803 |
|
|
$ |
3,026 |
|
Interest expense |
|
|
536 |
|
|
|
933 |
|
Net interest income |
|
|
3,267 |
|
|
|
2,093 |
|
Provision for loan losses |
|
|
148 |
|
|
|
111 |
|
Net interest income after
provision for loan losses |
|
|
3,119 |
|
|
|
1,982 |
|
Gain on sale of loans,
net |
|
|
4,892 |
|
|
|
1,629 |
|
Other non-interest (loss)
income |
|
|
(789 |
) |
|
|
515 |
|
Non-interest income |
|
|
4,103 |
|
|
|
2,144 |
|
Non-interest expense |
|
|
5,432 |
|
|
|
3,929 |
|
Income before income
taxes |
|
|
1,790 |
|
|
|
197 |
|
Income tax expense |
|
|
488 |
|
|
|
48 |
|
Net income |
|
$ |
1,302 |
|
|
$ |
149 |
|
|
|
|
|
|
|
|
|
|
Earnings per share-Basic |
|
$ |
0.66 |
|
|
$ |
0.07 |
|
Earnings per share
-Diluted |
|
$ |
0.65 |
|
|
$ |
0.07 |
|
Average common shares
outstanding- Basic |
|
|
1,985,799 |
|
|
|
2,053,689 |
|
Average common shares
outstanding- Diluted |
|
|
2,013,560 |
|
|
|
2,053,764 |
|
Shares outstanding end of
period |
|
|
2,175,548 |
|
|
|
2,259,052 |
|
Book value per share |
|
$ |
18.32 |
|
|
$ |
14.97 |
|
|
|
For the Three Months Ended March 31, |
|
|
|
2021 |
|
|
2020 |
|
Performance Ratios: |
|
|
|
|
|
|
|
|
Return on average
assets(1) |
|
|
0.78 |
% |
|
|
0.17 |
% |
Return on average
equity(1) |
|
|
13.79 |
|
|
|
1.78 |
|
Interest rate spread (2) |
|
|
1.97 |
|
|
|
2.31 |
|
Net interest margin (3) |
|
2.02 |
|
|
2.52 |
|
Efficiency ratio (4) |
|
|
73.70 |
|
|
92.73 |
|
Average interest-earning
assets to average interest-bearing liabilities |
|
115.23 |
|
|
118.93 |
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios
(5): |
|
|
|
|
|
|
|
|
Non-performing assets as a
percent of total assets |
|
|
0.49 |
% |
|
|
1.06 |
% |
Non-performing loans as a
percent of total loans |
|
0.85 |
|
|
|
1.50 |
|
Allowance for loan losses as a
percent of non-performing loans |
|
|
67.65 |
|
|
|
40.94 |
|
Allowance for loan losses as a
percent of total loans |
|
0.58 |
|
|
0.61 |
|
Net charge-offs (recoveries)
to average outstanding loans during the period |
|
0.05 |
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
Capital Ratios:
(6) |
|
|
|
|
|
|
|
|
Common equity tier 1 capital
(to risk weighted assets) |
|
|
13.37 |
% |
|
|
13.14 |
% |
Tier 1 leverage (core) capital
(to adjusted tangible assets) |
|
5.81 |
|
|
8.74 |
|
Tier 1 risk-based capital (to
risk weighted assets) |
|
|
13.37 |
|
|
13.14 |
|
Total risk-based capital (to
risk weighted assets) |
|
|
14.08 |
|
|
|
13.81 |
|
Average equity to average
total assets (7) |
|
5.65 |
|
|
9.61 |
|
__________________(1) Annualized for the three
months ended March 31, 2021 and
2020.(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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