Hanover Bancorp Reports $4.1 Million Net Income for Q2 2026, Driven by Increased Net Interest Income

Hanover Bancorp, Inc. reported a net income of $4.1 million, or $0.55 per diluted share, for the three months ended June 30, 2026, marking a significant increase from the $2.4 million, or $0.33 per diluted share, recorded in the same period of 2025. The company's total revenue for the quarter was $19.6 million, up from $18.4 million year-over-year. This growth was primarily driven by a $2.0 million increase in net interest income, which rose to $16.8 million, alongside a decrease in the provision for credit losses, which fell to $500,000 from $2.4 million in the prior year. The net interest margin improved to 3.10% from 2.76%, reflecting a decrease in the cost of interest-bearing liabilities.

In terms of overall financial health, Hanover Bancorp's total assets decreased to $2.3 billion as of June 30, 2026, down from $2.4 billion at the end of 2025. Total loans remained stable at approximately $2.0 billion, while total deposits also held steady at $2.0 billion. The company’s allowance for credit losses was $19.1 million, representing 0.96% of total loans, compared to 0.93% at the end of 2025. The ratio of non-accrual loans increased to 1.42% of total loans, up from 1.08% at the end of the previous year.

Strategically, Hanover Bancorp has been active in optimizing its funding structure. In February 2026, the company restructured $60.3 million in Federal Home Loan Bank (FHLB) advances, reducing the weighted average borrowing cost from 4.27% to 3.47%. Additionally, on March 12, 2026, the company issued $35 million in subordinated notes to support growth and redeem higher-cost debt. The company also opened a new business banking center in Hauppauge, New York, in May 2023, and plans to open a full-service branch in Riverhead, New York, in the third quarter of 2026.

Looking ahead, Hanover Bancorp aims to continue expanding its core lending activities while managing its asset quality. The company has developed a flow origination program to facilitate the sale of residential loans, which is expected to enhance fee income. However, the outlook for SBA loan originations remains cautious due to economic uncertainties. The company is also focused on maintaining a strong capital position, with a Tier 1 leverage ratio of 9.76% and a total risk-based capital ratio of 14.84%, both exceeding regulatory requirements.