Hanover Bancorp, Inc.

What they do

Hanover Community Bank takes deposits and makes loans through branches in Nassau, Suffolk, Queens, Kings (Brooklyn) and New York (Manhattan) Counties, New York, and Freehold, New Jersey. It offers consumer, commercial and municipal banking products, including multifamily and commercial mortgages, government guaranteed loans, residential loans and business lines of credit. Lending is diversified by customer, product and geography, with a residential niche in non-conforming one- to four-family mortgages. The bank had 194 full-time equivalent employees at December 31, 2025.

Revenue drivers

• Net interest income — The primary revenue source, earned on a $2.00 billion loan portfolio funded by $2.03 billion of deposits at December 31, 2025; it reached a record $16.8 million in Q2 2026.
• Commercial and multifamily lending — Commercial mortgages, multifamily loans, C&I loans and lines of credit are core lending products; management cited C&I banking relationships as a driver of demand deposit growth.
• SBA and government guaranteed lending — SBA and USDA guaranteed loans are part of the product set, a capability expanded by the 2021 Savoy Bank acquisition; gains on loan sales are subject to assumptions per the risk factors.
• Residential non-conforming mortgages — A niche one- to four-family segment focused on non-qualified mortgages, primarily owner-occupied and investment properties, described as appealing to Asian American borrowers in the New York City boroughs.

Recent performance

For the quarter ended June 30, 2026, net income was $4.1 million, or $0.55 per diluted share, versus $1.9 million or $0.25 in Q1 2026 and $2.4 million or $0.33 in Q2 2025. Net interest income was $16.8 million, up 2.50% from Q1 2026 and 13.36% from Q2 2025, a record level. Net interest margin rose to 3.10% from 2.96% in Q1 2026 and 2.76% in Q2 2025. Demand deposits increased $16.9 million, or 7.13%, to a record $254.3 million from March 31, 2026. Full-year net income declined from $10.9 million in 2021 to $7.5 million in 2025, with diluted EPS falling from $3.68 in 2022 to $1 in 2025.

Strategy

Management completed a core processing conversion to FIS Horizon in February 2025 and refreshed the corporate logo, which it describes as moving toward a more technologically advanced bank. It is expanding its footprint: a Port Jefferson branch opened in June 2025, and a Riverhead, New York branch is expected to open in Q3 2026 after a temporary office was expected to be operational by the end of Q1 2026. The bank repurchased 112,346 common shares in Q2 2026 at a weighted average price of $23.54, leaving 171,729 shares available under the program as of June 30, 2026. It pays a $0.10 per share quarterly dividend on common and Series A preferred shares. Kevin O'Connor became President of the Company and the Bank effective July 27, 2026.

Risks

• New York metro concentration — The 10-K states a substantial portion of business is in the New York metro area, making results particularly vulnerable to an economic downturn in that primary market.
• Real estate collateral exposure — The 10-K notes a significant number of loans are secured by real estate, so a downturn in the local real estate market could negatively impact profitability.
• SBA program dependence — The 10-K states the SBA lending program depends on the U.S. federal government, and the retained non-guaranteed portion of SBA loans exposes the company to credit and default risk.
• Multifamily regulation — The 10-K states performance of New York multifamily real estate loans could be adversely impacted by regulation.

Outlook

The Q2 2026 release states the Riverhead, New York full-service branch remains on schedule and is expected to open in the third quarter of 2026 to serve the East End of Long Island. Management reported record Q2 2026 net interest income, margin expansion to 3.10%, and record demand deposits of $254.3 million. The company declared a $0.10 per share quarterly cash dividend on common and Series A preferred shares payable August 13, 2026.