HV Bancorp, Inc. (the “Company” or “HVB”) (Nasdaq Capital Market:
HVBC), the holding company of Huntingdon Valley Bank (the “Bank”),
reported operating results for the year ended December 31, 2021.
Net income for the year ended December 31, 2021, was $4.1 million
($2.04 per basic share of common stock and $1.98 per diluted share
of common stock) versus net income of $5.8 million ($2.84 per basic
and diluted shares of common stock) for the year ended December 31,
2020. This resulted in shareholders’ equity increasing 9.5% from
$38.9 million at December 31, 2020, to $42.6 million at December
31, 2021, and book value per share increasing from $17.78 per share
of common to 19.64 per share of common stock over the same period.
Net income for the quarter ended December 31, 2021 was $351,000
($0.18 per basic share of common stock and $0.17 diluted share of
common stock) versus $1.1 million ($0.56 per basic share of common
stock and $0.54 per diluted share of common stock) compared to the
prior quarter. For the year ended December 31, 2021, Net Interest
Income was $14.5 million, representing an increase 36% over the
prior year.
Travis J. Thompson, Esq., Chairman & CEO,
commented, “We are pleased to announce our year end results for
2021. As government intervention in the banking system through
accommodative monetary policy and fiscal policy begins to
normalize, HVB continued to deliver strong performance and
increased its presence in the Greater Philadelphia Market. Our
Business Banking Division successfully facilitated $104.7 million
in Payment Protection Program (PPP) loan forgiveness, while adding
$153 million in new commercial loan originations. HVB continues to
expand its Business Banking Division with the addition of new
President, Bob Marino, and the announcement of a new C&I
lending team.”
Mr. Thompson further commented, “Our Residential
Mortgage Division closed 2,412 new loans totaling $636 million
despite the uptick in interest rates combined with reduced housing
inventory. HVB continues to be a leader in the Greater Philadelphia
Residential Mortgage industry. Our Business Banking and Residential
Mortgage divisions are now complimenting each other and both adding
to HVB’s superior customer experience resulting in sustained
growth.”
Highlights for the quarter and year ended December 31,
2021 include:
- Bob Marino, Vice-Chairman, joined
the Bank’s executive leadership team as President, effective
December 1, 2021. The addition of Mr. Marino will enable the Bank
to capitalize upon his knowledge, contacts, and experience, as the
Bank expands its Business Banking Division throughout the Greater
Philadelphia Market.
- HVB’s Business Banking Division
announced the addition of a new Commercial Lending team to led by
Allan Burkley, which will be located in Media, PA, HVB’s first
office in Delaware County.
- For the quarter and year ended
December 31, 2021, Net Interest Income was $3.7 million and $14.5
million, an increase of 16% and 36% from the same periods in
2020. The increase in Net Interest Income was due to
significant growth in the commercial loan portfolio, offset by PPP
forgiveness and a decrease in one-to-four family loans held for
sale.
- Non-interest income decreased $2.5
million from the quarter ended December 31, 2020, and $3.5 million
for the year ended December 31, 2020, as a result of reductions in
mortgage banking revenues, which is consistent with recent market
conditions as available homes for sale tightened and mortgage loan
refinance opportunities declined due to an uptick in interest
rates.
- Net Interest Margin continues to
improve, increasing from 2.49% for the three months ended December
31, 2020, to 2.83% for the three months ended December 31, 2021,
representing a 13.7% increase primarily due to the expansion of the
commercial loan portfolio.
- Shareholders’ equity increased 9.5% from $38.9 million at
December 31, 2020, to $42.6 million at December 31, 2021.
- Book value per share increased from
$17.78 per share of common stock at December 31, 2020, to $19.64
per share of common stock at December 31, 2021.
- The Company repurchased 5,133
shares of its common stock in the fourth quarter of 2021, at an
average price of $22.68 and 20,911 shares of its common stock, at
an average price of $18.67 for the year ended December 31,
2021.
COVID-19 Update:
- The Company participated in two
rounds of the United States Small Business Administration’s (“SBA”)
Paycheck Protection Program (“PPP”), successfully processing over
800 applications totaling approximately $126.0 million. The
forgiveness process remains on target with an outstanding PPP
balance of just $22.9 million at December 31, 2021. We recognized
approximately $478,000 and $3.2 million in fee income for the
quarter and year ended December 31, 2021, respectively.
- As of December 31, 2021, there were
no borrowers in payment deferral under the CARES act.
Balance Sheet: December 31, 2021, compared to December
31, 2020
Total assets decreased $301.5 million to $560.1
million at December 31, 2021, from $861.6 million at December 31,
2020. The decrease was primarily the result of decreases of $293.8
million in cash and cash equivalents and $43.0 million in net loans
held for sale, offset by increases of $21.0 million in investment
securities, $11.4 million in loans receivable, net, $1.4 million in
mortgage servicing rights, $1.0 million in right-of-use assets, and
$1.5 million in other assets. Cash and cash equivalents decreased
$293.8 million to $120.8 million at December 31, 2021, from $414.6
million at December 31, 2020, as a result of anticipated outflows
of retail deposits from certain accounts.
Total liabilities decreased $305.2 million, or
37.1%, to $517.5 million at December 31, 2021, from $822.7 million
at December 31, 2020. The decrease in total liabilities was
primarily from a $266.8 million decrease in deposits, $45.6 million
decrease in advances from the Federal Reserve's Paycheck Protection
Program liquidity facility ("PPPLF"), $2.3 million decrease in
other liabilities offset by the issuance of a $10.0 million
subordinated note and $1.1 million increase in operating lease
liabilities. Deposits decreased $266.8 million, or 36.5%, to $464.0
million at December 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
$236.9 million, or 35.4%, to $431.8 million at December 31, 2021,
from $668.7 million at December 31, 2020, as there was an
anticipated decrease in certain retail accounts in our core
deposits during the first quarter of 2021. Certificates of deposit
decreased $29.9 million, or 48.1%, to $32.2 million at December 31,
2021, from $62.1 million at December 31, 2020, because of decreases
of $10.0 million of certificates of deposit issued through brokers
and $19.9 million in retail certificates of deposit.
Total shareholders’ equity increased $3.7
million to $42.6 million at December 31, 2021, from
$38.9 million at December 31, 2020, primarily as a result of
net income of $4.1 million for the year ended December 31, 2021,
share based compensation expense of $240,000 and ESOP shares
committed to be released of $166,000 and stock option exercises of
$28,000. Offsetting these increases was other comprehensive loss of
$386,000 due to fair value adjustments, net of deferred tax, on the
investment securities available-for-sale portfolio and $391,000 in
treasury stock repurchases primarily as part of the stock
repurchase plan approved in April 2019.
Income Statement: For the quarter and
year ended December 31, 2021, compared to December 31,
2020
Net Interest Income:
Net interest income increased $512,000 to $3.7
million for the three months ended December 31, 2021, from $3.2
million for the three months ended December 31, 2020. Our net
interest-earning assets increased $31.1 million to $101.5 million
for the three months ended December 31, 2021, from $70.4 million
for the three months ended December 31, 2020. Net interest income
increased $3.8 million to $14.5 million for the year ended December
31, 2021, from $10.7 million for the year ended December 31, 2020.
Our net interest-earning assets increased $39.6 million to $105.9
million for the year ended December 31, 2021, from $66.3 million
for the year ended December 31, 2020.
(Credit) Provision for loan
losses:
Credit for loan losses was $91,000 for the
quarter ended December 31, 2021, compared to a provision of loan
losses of $123,000 for the quarter ended December 31, 2020. The
negative provision of $91,000 reflects improvement in economic
factors previously impacted by COVID-19. During the quarter ended
December 31, 2021, there were no net charge-offs recorded compared
to $15,000 of net charge-offs recorded during the quarter ended
December 31, 2020. Provision for loan losses decreased by $555,000
to $553,000 for the year ended December 31, 2021, from $1.1 million
for the year ended December 31, 2020. During the year ended
December 31, 2021 and 2020, net charge-offs of $202,000 and
$528,000 were recorded.
Non-Interest Income:
Non-interest income was $2.1 million and $13.4
million for the quarter and year ended December 31, 2021,
respectively, compared to $4.6 million and $16.9 million for the
same periods in 2020. Non-interest income decreased $2.5 million
for the quarter ended December 31, 2021, compared to the same
period in 2020 primarily due to a $2.6 million decrease in gain on
sale of loans and an increase of $291,000 in loss on derivative
instruments offset by a $154,000 increase in fees for customer
service. The decrease of $3.5 million in non-interest income for
the year ended December 31, 2021, compared to the same period in
2020 was primarily due to decreases of $2.8 million in change in
fair value of loans held-for-sale and $2.7 million on loss in
derivative instruments offset by increases of $1.5 million increase
in the gain on sale of loans and $349,000 in fees for customer
services.
Non-Interest Expense:
Total non-interest expense increased $700,000,
or 14.5%, to $5.5 million for the quarter ended December 31, 2021,
from $4.8 million for the quarter ended December 31, 2020 and
increased $3.4 million, or 18.4%, to $21.9 million for the year
ended December 31, 2021 from $18.5 million for the year ended
December 31, 2020. The increase for the quarter ended December 31,
2021, compared to the quarter of December 31, 2020, was primarily a
result of increases of $421,000 in salaries and employee benefits,
$191,000 in other expenses, and $115,000 in occupancy expenses. For
the year ended December 31, 2021, the increase in non-interest
expense was primarily as a result of increases of $2.1 million in
salaries and employee benefits, $424,000 in occupancy expenses,
$304,000 in data processing-related operations costs, $224,000 in
federal deposit insurance premiums and $190,000 in professional
fees. Salaries increased as full time equivalent (FTE) employees
increased to one-hundred forty-three as of December 31, 2021, from
one-hundred twenty-six as of December 31, 2020, primarily as a
result of the expansion of the Company’s lending and business
banking operations.
Income Taxes:
Income tax expense was $70,000 and $1.5 million
for the quarter and year ended December 31, 2021, respectively,
compared to $781,000 and $2.2 million during the same periods in
fiscal year 2020. The decrease in income tax expense for the
quarter and year ended December 31, 2021, compared to the same
period a year ago reflected a decrease in income before taxes. The
effective tax rates were 16.6% and 26.5% for the quarter and year
ended December 31, 2021, respectively, compared to 27.5% and 27.6%
during the same periods in fiscal year 2020.
Net Income & Book
Value:
Net income was $351,000, approximately $0.18
cents per basic share and $0.17 cents per diluted share for the
three months ended December 31, 2021, as compared to $2.1 million,
or approximately $1.02 per basic and diluted shares for the three
months ended December 31, 2020. Net income was $4.1 million,
approximately $2.04 per basic share and $1.98 per diluted share for
the year ended December 31, 2021, as compared to $5.8 million, or
approximately $2.84 per basic and diluted shares for the year ended
December 31, 2020. Book value per share increased from $17.78 at
December 31, 2020, to $19.64 at December 31, 2021.
Asset quality:
At December 31, 2021, the Company’s
non-performing assets totaled $3.8 million, or 0.67% of total
assets, compared to $2.3 million or 0.26% at December 31,
2020. Non-performing loans increased $1.5 million as a result of an
increase of $1.2 million as a result of construction loans, a
$132,000 increase in one-to four-family residential real estate
loans and a $95,000 increase in commercial business loans compared
to December 31, 2020. There were no non-accruing troubled debt
restructurings, at December 31, 2021, and December 31, 2020.
The allowance for loan losses totaled $2.4
million, or 0.72% of total loans and 63.10% of total non-performing
loans at December 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 six loan production and sales 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 31,2021 |
|
|
At December 31,2020 |
|
|
At December 31,2019 |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Financial Condition
Data: |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
560,124 |
|
|
$ |
861,607 |
|
|
$ |
354,586 |
|
Cash and cash equivalents |
|
120,788 |
|
|
|
414,590 |
|
|
|
20,625 |
|
Investment securities
available-for-sale, at fair value |
|
44,512 |
|
|
|
23,518 |
|
|
|
21,156 |
|
Equity securities |
|
500 |
|
|
|
500 |
|
|
|
500 |
|
Loans held for sale, at fair
value |
|
40,480 |
|
|
|
83,549 |
|
|
|
37,876 |
|
Loans receivable, net |
|
325,203 |
|
|
|
313,811 |
|
|
|
255,032 |
|
Deposits |
|
463,989 |
|
|
|
730,826 |
|
|
|
283,767 |
|
Federal Home Loan Bank
advances |
|
26,431 |
|
|
|
26,269 |
|
|
|
27,000 |
|
Federal Reserve PPPLF
advances |
|
3,119 |
|
|
|
48,682 |
|
|
|
— |
|
Subordinated debt |
|
9,996 |
|
|
|
— |
|
|
|
— |
|
Total liabilities |
|
517,488 |
|
|
|
822,680 |
|
|
|
320,987 |
|
Total shareholders’
equity |
|
42,636 |
|
|
|
38,927 |
|
|
|
33,599 |
|
|
|
For the Three MonthsEnded December
31, |
|
For the YearEndedDecember 31, |
|
|
|
2021 |
|
|
2020 |
|
2021 |
|
|
2020 |
|
(In thousands except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
4,268 |
|
|
$ |
3,930 |
|
$ |
16,708 |
|
|
$ |
13,823 |
|
Interest expense |
|
|
558 |
|
|
|
732 |
|
|
2,213 |
|
|
|
3,143 |
|
Net interest income |
|
|
3,710 |
|
|
|
3,198 |
|
|
14,495 |
|
|
|
10,680 |
|
(Credit) provision for loan
losses |
|
|
(91 |
) |
|
|
123 |
|
|
553 |
|
|
|
1,108 |
|
Net interest income after
provision for loan losses |
|
|
3,801 |
|
|
|
3,075 |
|
|
13,942 |
|
|
|
9,572 |
|
Gain on sale of loans,
net |
|
|
3,683 |
|
|
|
6,315 |
|
|
14,853 |
|
|
|
13,315 |
|
Other non-interest (loss)
income |
|
|
(1,543 |
) |
|
|
(1,729 |
) |
|
(1,429 |
) |
|
|
3,555 |
|
Non-interest income |
|
|
2,140 |
|
|
|
4,586 |
|
|
13,424 |
|
|
|
16,870 |
|
Non-interest expense |
|
|
5,520 |
|
|
|
4,820 |
|
|
21,850 |
|
|
|
18,470 |
|
Income before income
taxes |
|
|
421 |
|
|
|
2,841 |
|
|
5,516 |
|
|
|
7,972 |
|
Income tax expense |
|
|
70 |
|
|
|
781 |
|
|
1,464 |
|
|
|
2,204 |
|
Net income |
|
$ |
351 |
|
|
$ |
2,060 |
|
$ |
4,052 |
|
|
$ |
5,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of common
stock- Basic |
|
$ |
0.18 |
|
|
$ |
1.02 |
|
$ |
2.04 |
|
|
$ |
2.84 |
|
Earnings per share of common
stock -Diluted |
|
$ |
0.17 |
|
|
$ |
1.02 |
|
$ |
1.98 |
|
|
$ |
2.84 |
|
Average common shares
outstanding- Basic |
|
|
1,990,449 |
|
|
|
2,012,806 |
|
|
1,984,430 |
|
|
|
2,033,083 |
|
Average common shares
outstanding- Diluted |
|
|
2,068,410 |
|
|
|
2,015,115 |
|
|
2,045,077 |
|
|
|
2,033,083 |
|
Shares outstanding of common
stock end of period |
|
|
2,170,397 |
|
|
|
2,189,408 |
|
|
2,170,397 |
|
|
|
2,189,408 |
|
Book value per share |
|
$ |
19.64 |
|
|
$ |
17.78 |
|
$ |
19.64 |
|
|
$ |
17.78 |
|
|
|
For the Three MonthsEndedDecember
31, |
|
|
For the YearEndedDecember 31, |
|
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets(1) |
|
|
0.25 |
|
% |
|
1.54 |
|
% |
|
0.69 |
|
% |
|
1.33 |
|
% |
Return on average
equity(1) |
|
|
3.60 |
|
|
|
23.74 |
|
|
|
10.37 |
|
|
|
16.83 |
|
|
Interest rate spread (2) |
|
|
2.73 |
|
|
|
2.40 |
|
|
|
2.48 |
|
|
|
2.43 |
|
|
Net interest margin (3) |
|
|
2.83 |
|
|
2.49 |
|
|
2.57 |
|
|
2.57 |
|
|
Efficiency ratio (4) |
|
|
94.36 |
|
|
|
61.92 |
|
|
|
78.26 |
|
|
67.04 |
|
|
Average interest-earning
assets to average interest-bearing liabilities |
|
124.05 |
|
|
115.85 |
|
|
123.17 |
|
|
119.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios
(5): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets as a
percent of total assets |
|
|
0.67 |
|
% |
|
0.26 |
|
% |
|
0.67 |
|
% |
|
0.26 |
|
% |
Non-performing loans as a
percent of total loans |
|
1.14 |
|
|
|
0.71 |
|
|
1.14 |
|
|
|
0.71 |
|
|
Allowance for loan losses as a
percent of non-performing loans |
|
|
63.10 |
|
|
|
89.49 |
|
|
|
63.10 |
|
|
|
89.49 |
|
|
Allowance for loan losses as a
percent of total loans |
|
0.72 |
|
|
|
0.64 |
|
|
0.72 |
|
|
|
0.64 |
|
|
Net charge-offs to average
outstanding loans during the period |
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.06 |
|
|
|
0.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios:
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital
(to risk weighted assets) |
|
|
12.46 |
|
% |
|
12.70 |
|
% |
|
12.46 |
|
% |
|
12.70 |
|
% |
Tier 1 leverage (core) capital
(to adjusted tangible assets) |
|
8.24 |
|
|
7.37 |
|
|
8.24 |
|
|
7.37 |
|
|
Tier 1 risk-based capital (to
risk weighted assets) |
|
|
12.46 |
|
|
|
12.70 |
|
|
|
12.46 |
|
|
|
12.70 |
|
|
Total risk-based capital (to
risk weighted assets) |
|
|
13.11 |
|
|
|
13.41 |
|
|
|
13.11 |
|
|
|
13.41 |
|
|
Average equity to average
total assets (7) |
|
7.03 |
|
|
6.49 |
|
|
6.62 |
|
|
7.91 |
|
|
_______________(1) Annualized for the three months and
year ended December 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 end ratios.(6) Capital ratios are for
Huntingdon Valley Bank.(7) Represents consolidated average
equity to average consolidated total assets.
Contact: Joseph C. O’Neill, Jr.,EVP/ Chief Financial
Officer(267) 280-4000
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