QUINCY, Mass., July 27, 2022 (GLOBE NEWSWIRE) -- Randolph Bancorp, Inc. (the "Company") (NASDAQ Global Market: RNDB), the holding company for Envision Bank (the "Bank"), today announced net income of $248,000, or $0.05 per basic and diluted share, for the three months ended June 30, 2022 compared to a net loss of $235,000, or $0.05 per basic and diluted share, for the three months ended March 31, 2022 and net income of $1.6 million, or $0.32 per basic share and $0.31 per diluted share, for the three months ended June 30, 2021. Excluding $357,000 in merger expenses, net income on a non-GAAP basis was $605,000, or $0.12 per diluted share, for the three months ended June 30, 2022. Excluding $240,000 in severance expenses, $588,000 in merger expenses, and $290,000 for the reversal of a cease use liability, net income on a non-GAAP basis was $318,000, or $0.06 per diluted share, for the three months ended March 31, 2022. Excluding $145,000 in severance expenses, $71,000 in other outsourcing expenses, and $29,000 in losses on disposals of fixed assets, net income on a non-GAAP basis was $1.8 million, or $0.34 per diluted share, for the three months ended June 30, 2021. Please see the tables attached hereto for a reconciliation of these and other non-GAAP financial measures.
For the six months ended June 30, 2022, net income was $13,000 or $0.00 per basic and diluted share, compared to net income of $5.7 million, or $1.14 per basic share and $1.10 per diluted share, for the six months ended June 30, 2021. Net income on a non-GAAP basis, excluding certain nonrecurring items, was $923,000, or $0.18 per diluted share, for the six months ended June 30, 2022, compared to net income on a non-GAAP basis, excluding other certain nonrecurring items, of $5.9 million, or $1.15 per diluted share, for the six months ended June 30, 2021. Please see the tables attached hereto for a reconciliation of these and other non-GAAP financial measures.
At June 30, 2022, total assets amounted to $774.8 million, compared to $770.3 million at March 31, 2022, an increase of $4.5 million, or 0.6%. Total loans increased by $78.1 million, or 13.3%, to $662.9 million at June 30, 2022 from $584.8 million at March 31, 2022, and loans held for sale decreased by $13.0 million to $9.7 million at June 30, 2022 from $22.7 million at March 31, 2022. Cash and cash equivalents decreased to $14.9 million at June 30, 2022, a decrease of $56.2 million, or 79.0% from $71.1 million as of March 31, 2022, as a result of loan growth and a decrease in Federal Home Loan Bank of Boston ("FHLB") borrowings of $12.1 million, partially offset by a decrease in loans held for sale. Compared to June 30, 2021, total assets grew $30.6 million, or 4.1%, from $744.1 million. The growth from the prior year period was driven by an increase in total loans of $116.5 million, or 21.3%, partially offset by a decrease in loans held for sale of $64.5 million, or 86.9% and a decrease in cash and cash equivalents of $20.0 million, or 57.3%.
William M. Parent, President and Chief Executive Officer, stated, "During the quarter, we were pleased to obtain shareholder approval for the proposed merger with Hometown Financial Group, Inc. ("Hometown"). We are excited to be joining Hometown and becoming part of a larger organization. I want to thank our employees for their dedication and hard work during this time of transition as we maintain a business-as-usual environment for our customers."
Second Quarter Operating Results
Net interest income increased by $744,000, or 14.1%, to $6.0 million for the three months ended June 30, 2022 from $5.3 million for the three months ended March 31, 2022. This increase was primarily due to a 16.6% increase in average balances of 1-4 family residential loans and a 14 basis point improvement in the average yield earned on these loans. The yield earned on interest-earning assets increased by 53 basis points from the prior quarter, and the rate paid on interest-bearing liabilities decreased by 1 basis point from the prior quarter. The net interest margin increased by 53 basis points to 3.39% for the second quarter from 2.86% for the first quarter.
Net interest income increased by $812,000, or 15.6%, to $6.0 million for the three months ended June 30, 2022, from $5.2 million in the same period in the prior year. Relative to the prior year quarter, the net interest margin increased by 38 basis points to 3.39% from 3.01%. The improvement reflects average loan growth of $41.3 million from the prior year quarter and an increase of 18 basis points in the average yield earned on loans, while the cost of interest-bearing liabilities decreased by 10 basis points.
The Company recognized a provision for loan losses of $269,000 for the quarter ended June 30, 2022, driven by loan growth of $78.1 million from the prior quarter. The allowance for loan losses as a percentage of total loans was 1.00%, 1.09% and 1.19% at June 30, 2022, March 31, 2022 and June 30, 2021, respectively, and was 237.4%, 237.2% and 101.9% of non-performing assets at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
Non-interest income decreased $367,000, or 16.7%, to $1.8 million for the quarter ended June 30, 2022 from $2.2 million in the quarter ended March 31, 2022, due to a decrease of $780,000 in the net gain on loan origination and sale activities. Sold mortgages totaled $56.8 million in the second quarter of 2022, compared to $129.9 million in the first quarter of 2022. The second quarter of 2022 ended with a mortgage pipeline of $10.9 million, compared to a pipeline of $42.7 million at the end of the first quarter of 2022, and loans held for sale were $9.7 million as of June 30, 2022, compared to $22.7 million as of March 31, 2022. The decrease in the mortgage banking pipeline and loans held for sale, reflecting rising interest rates and lower margins on loans sold, contributed to the erosion in the gain on loan origination and sale activities from the prior quarter. Mortgage servicing fees increased $161,000, or 46.3%, to $509,000 for the second quarter of 2022 from $348,000 in the first quarter of 2022 because of a positive fair value adjustment of $286,000 in the second quarter of 2022, compared to a positive fair value adjustment of $135,000 for the first quarter of 2022, given declining prepayment speeds.
Non-interest income decreased $5.0 million, or 73.2%, to $1.8 million for the quarter ended June 30, 2022, from $6.8 million for the quarter ended June 30, 2021, principally due to a decrease of $5.3 million in the net gain on loan origination and sale activities. Sold mortgage loans totaled $56.8 million in the second quarter of 2022, compared to sold mortgage loans of $342.8 million during the second quarter of 2021. The second quarter of 2022 ended with a mortgage pipeline of $10.9 million, compared to a pipeline of $139.7 million at the end of the second quarter of 2021. Mortgage servicing fees increased $128,000 in the quarter ended June 30, 2022, principally due to a positive valuation adjustment to mortgage servicing rights of $286,000 in the quarter ended June 30, 2022.
Non-interest expenses decreased $1.2 million, or 14.0%, to $7.5 million in the quarter ended June 30, 2022 from $8.7 million in the quarter ended March 31, 2022. The decrease was due to a decrease in salaries and employee benefits expense of $740,000, or 14.4%, primarily attributed to lower headcount and the absence of severance expenses related to the reduction in force in the mortgage banking operation completed in the quarter ended March 31, 2022. In addition, professional fees and other non-interest expenses decreased by $707,000 from the prior quarter.
Non-interest expenses decreased $3.1 million to $7.5 million in the quarter ended June 30, 2022 from $10.6 million in the quarter ended June 30, 2021. The decrease was principally due to a decrease in salaries and employee benefits of $2.9 million, primarily attributed to lower commissions and incentives associated with lower residential loan production and reduced headcount.
The income tax benefit was $165,000 for the three months ended June 30, 2022, compared to $1.1 million for the three months ended March 31, 2022 and $162,000 for the three months ended June 30, 2021.
Year-to-Date Operating Results
Net interest income increased by $1.0 million, or 9.6%, to $11.3 million for the six months ended June 30, 2022 from $10.3 million for the six months ended June 30, 2021. The change reflects loan growth and higher average yields earned on loans, as well as the downward pricing and improved composition of funding liabilities. An increase in the average balance of loans of $16.9 million, or 2.8%, and an 11 basis point improvement in loan yields contributed to a $678,000 improvement in total interest and dividend income. The composition of our funding base improved with an increase of $21.3 million, or 18.4%, in the average balance of non-interest bearing deposits and a decrease of $21.5 million, or 35.1%, in the average balance of borrowings. The composition change contributed to a 15 basis point decrease in the cost of interest-bearing liabilities.
The Company recognized a provision for loan losses of $340,000 for the six months ended June 30, 2022 compared to a credit for loan losses of $240,000 in the prior year period. For the six months ended June 30, 2022, loan growth was the primary contributor to the provision for loan losses.
Non-interest income decreased $15.2 million, or 79.1%, to $4.0 million for the six months ended June 30, 2022 from $19.2 million in the prior year period, principally due to a decrease of $15.0 million in the net gain on loan origination and sale activities, and a decrease in mortgage servicing fees, net, of $303,000. Mortgage loans sold were $186.6 million during the six months ended June 30, 2022, compared to $846.0 million during the prior year period. Net gain on loan origination and sale activities decreased as a result of both lower volume and margin on loan sales and the impact of a shrinking mortgage banking pipeline during the first six months of 2022. Mortgage servicing fees decreased $303,000 for the six months ended June 30, 2022 to $857,000 from $1.2 million for the six months ended June 30, 2021, primarily due to the recording of sub-servicer expenses during the six months ended June 30, 2022 of $620,000.
Non-interest expenses decreased $6.4 million, or 28.3%, to $16.2 million for the six months ended June 30, 2022 from $22.6 million for the six months ended June 30, 2021. Salaries and benefits decreased $6.2 million, or 39.2%, to $9.6 million, as a result of lower commissions and incentives associated with a normalization of residential loan production and reduced headcount. Included in salaries and benefits were severance expenses of $240,000 and $254,000 in the six months ended June 30, 2022 and 2021, respectively, relating to a reduction in force in the mortgage banking operation in 2022 and the outsourcing of residential loan servicing in 2021. Occupancy and equipment expenses decreased $441,000 as compared to the prior year period, as the Company migrated to a hybrid work environment and reduced its overall real estate footprint by closing six loan production offices and reducing the office space for the Bank's headquarters and loan operations since the prior year, and decreased COVID-19 pandemic related spending.
The income tax benefit was $1.2 million for the six months ended June 30, 2022 compared to income tax expense of $1.5 million for the six months ended June 30, 2021. Non-qualified stock option exercises during the six months ended June 30, 2022 contributed to the income tax benefit, in addition to the pre-tax loss generated during the period.
Balance Sheet
At June 30, 2022, total assets amounted to $774.8 million, compared to $770.3 million at March 31, 2022, an increase of $4.5 million, or 0.6%. A $78.1 million increase in total loans from the prior quarter was partially offset by a $13.0 million decrease in loans held for sale and a $56.2 million decrease in total cash and cash equivalents. Deposits increased by $16.7 million, or 2.7%, in the quarter, whereas FHLB advances decreased by $12.1 million, or 26.8%.
Total assets at June 30, 2022 increased $30.6 million, or 4.1%, from $744.1 million at June 30, 2021. Contributing to asset growth was an increase of $117.0 million in net loans to $657.6 million at June 30, 2022 from $540.7 million at June 30, 2021. Commercial real estate loans increased by $21.6 million, or 12.9%, as we focused on diversifying our loan mix. Cash and cash equivalents decreased by $20.0 million, or 57.3%, to $14.9 million at June 30, 2022 from $34.9 million at June 30, 2021, principally due to loan growth. FHLB advances decreased by $17.1 million to $32.9 million at June 30, 2022, from $50.0 million at June 30, 2021.
Total stockholders' equity was $89.3 million at June 30, 2022 compared to $88.5 million at March 31, 2022. The increase of $800,000 reflects net income of $248,000 and earned ESOP compensation and the commitment of ESOP shares to be released of $946,000, and net proceeds from the exercise of stock options of $272,000, partially offset by other comprehensive losses, of $915,000.
Total stockholders' equity was $89.3 million at June 30, 2022 compared to $100.7 million at June 30, 2021. The decrease of $11.4 million relates mainly to share repurchases of $4.9 million and dividend payments of $12.0 million, partially offset by net income from the previous twelve months of $3.9 million.
Proposed Transaction with Hometown Financial
On March 28, 2022, the Company and Hometown Financial Group, Inc. ("Hometown") entered into an Agreement and Plan of Merger (the "merger agreement") pursuant to which, through a series of transactions, Hometown will acquire the Company (the "merger") in a cash transaction for total consideration valued at approximately $146.5 million. Under the terms of the merger agreement, Company shareholders will receive $27.00 for each share of Company common stock. The shareholders of the Company approved the proposed merger at a special meeting of shareholders held on June 29, 2022. The merger is expected to close in the fourth quarter of 2022 and is subject to regulatory approvals and customary closing conditions.
About Randolph Bancorp, Inc.
Randolph Bancorp, Inc. is the holding company for Envision Bank and its Envision Mortgage Division. Envision Bank is a full-service community bank with five retail branch locations, loan operations centers in North Attleboro and Quincy, Massachusetts, three loan production offices located in Massachusetts and one loan production office in Southern New Hampshire.
Forward Looking Statements
Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the SEC, in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words "believe", "expect", "anticipate", "intend", "estimate", "assume", "outlook", "will", "should", and other expressions that predict or indicate future events and trends and which do not relate to historical matters. Forward-looking statements involve risks and uncertainties. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among others, failure to obtain necessary regulatory approvals for the proposed transaction with Hometown; failure to satisfy any of the conditions to the proposed transaction with Hometown on a timely basis or at all or other delays in completing the merger; the risk that the merger agreement may be terminated in certain circumstances; the outcome of any legal proceedings that may be instituted against the Company and/or others related to the merger agreement or the merger; disruptions to the Company's business as a result of the announcement and pendency of the merger; the reputational risks and the reaction of Randolph's customers to the proposed transaction; ongoing disruptions due to the COVID-19 pandemic and the measures taken to contain its spread on the Company's employees, customers, business operations, credit quality, financial position, liquidity and results of operations; changes in the general business and economic conditions on a national basis and in the local markets in which the Company operates, including changes that adversely affect borrowers' ability to service and repay the Company's loans; changes in interest rates; competition; inflation; changes in consumer behavior due to changing political, business and economic conditions or legislative or regulatory initiatives; reputational risk relating to the Company's participation in pandemic-related legislative and regulatory initiatives and programs; ongoing turbulence in the capital and debt markets and the impact of such conditions on the Company's business activities; and the risk factors described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the SEC. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures, such as return on average assets, return on average equity, the efficiency ratio, profit percentage, tangible book value per share, non-interest income to total income and, where applicable, as adjusted for non-recurring items. These non-GAAP financial measures provide information for investors to effectively analyze financial trends of on-going business activities, and to enhance comparability with peers across the financial services sector.
Randolph Bancorp, Inc.
Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
| % Change | ||||||||||||||||||||
| June 30, | March 31, | June 30, | Jun 2022 vs. | Jun 2022 vs. | ||||||||||||||||
| 2022 | 2022 | 2021 | Mar 2022 | Jun 2021 | ||||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 14,891 | $ | 71,072 | $ | 34,876 | (79.0 | )% | (57.3 | )% | ||||||||||
| Securities available for sale, at fair value | 47,142 | 48,836 | 50,212 | (3.5 | )% | (6.1 | )% | |||||||||||||
| Loans held for sale, at fair value | 9,736 | 22,698 | 74,277 | (57.1 | )% | (86.9 | )% | |||||||||||||
| Loans: | ||||||||||||||||||||
| 1-4 family residential | 354,922 | 271,755 | 263,992 | 30.6 | % | 34.4 | % | |||||||||||||
| Home equity | 65,210 | 58,501 | 50,555 | 11.5 | % | 29.0 | % | |||||||||||||
| Commercial real estate | 189,334 | 199,255 | 167,691 | (5.0 | )% | 12.9 | % | |||||||||||||
| Construction | 33,877 | 32,544 | 29,140 | 4.1 | % | 16.3 | % | |||||||||||||
| Total real estate loans | 643,343 | 562,055 | 511,378 | 14.5 | % | 25.8 | % | |||||||||||||
| Commercial and industrial | 13,162 | 15,478 | 25,826 | (15.0 | )% | (49.0 | )% | |||||||||||||
| Consumer | 6,353 | 7,267 | 9,194 | (12.6 | )% | (30.9 | )% | |||||||||||||
| Total loans | 662,858 | 584,800 | 546,398 | 13.3 | % | 21.3 | % | |||||||||||||
| Allowance for loan losses | (6,602 | ) | (6,357 | ) | (6,523 | ) | 3.9 | % | 1.2 | % | ||||||||||
| Net deferred loan costs and fees, and purchase premiums | 1,362 | 1,148 | 785 | 18.6 | % | 73.5 | % | |||||||||||||
| Loans, net | 657,618 | 579,591 | 540,660 | 13.5 | % | 21.6 | % | |||||||||||||
| Federal Home Loan Bank of Boston stock, at cost | 1,778 | 2,734 | 2,855 | (35.0 | )% | (37.7 | )% | |||||||||||||
| Accrued interest receivable | 1,699 | 1,434 | 1,523 | 18.5 | % | 11.6 | % | |||||||||||||
| Mortgage servicing rights, net | 15,093 | 15,378 | 15,375 | (1.9 | )% | (1.8 | )% | |||||||||||||
| Premises and equipment, net | 7,669 | 7,718 | 5,115 | (0.6 | )% | 49.9 | % | |||||||||||||
| Bank-owned life insurance | 8,865 | 8,824 | 8,703 | 0.5 | % | 1.9 | % | |||||||||||||
| Other assets | 10,262 | 11,999 | 10,546 | (14.5 | )% | (2.7 | )% | |||||||||||||
| Total assets | $ | 774,753 | $ | 770,284 | $ | 744,142 | 0.6 | % | 4.1 | % | ||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Non-interest bearing | $ | 146,635 | $ | 142,793 | $ | 124,683 | 2.7 | % | 17.6 | % | ||||||||||
| Savings accounts | 195,107 | 196,145 | 190,584 | (0.5 | )% | 2.4 | % | |||||||||||||
| NOW accounts | 51,928 | 53,329 | 51,059 | (2.6 | )% | 1.7 | % | |||||||||||||
| Money market accounts | 98,331 | 92,769 | 73,967 | 6.0 | % | 32.9 | % | |||||||||||||
| Term certificates | 102,002 | 106,515 | 74,631 | (4.2 | )% | 36.7 | % | |||||||||||||
| Interest bearing brokered | 47,361 | 33,128 | 57,059 | 43.0 | % | (17.0 | )% | |||||||||||||
| Total deposits | 641,364 | 624,679 | 571,983 | 2.7 | % | 12.1 | % | |||||||||||||
| Federal Home Loan Bank of Boston advances | 32,946 | 45,000 | 50,016 | (26.8 | )% | (34.1 | )% | |||||||||||||
| Mortgagors' escrow accounts | 2,546 | 2,773 | 1,783 | (8.2 | )% | 42.8 | % | |||||||||||||
| Post-employment benefit obligations | 2,055 | 2,064 | 2,226 | (0.4 | )% | (7.7 | )% | |||||||||||||
| Other liabilities | 6,564 | 7,290 | 17,424 | (10.0 | )% | (62.3 | )% | |||||||||||||
| Total liabilities | 685,475 | 681,806 | 643,432 | 0.5 | % | 6.5 | % | |||||||||||||
| Stockholders' Equity: | ||||||||||||||||||||
| Common stock | 52 | 52 | 52 | 0.0 | % | 0.0 | % | |||||||||||||
| Additional paid-in capital | 45,501 | 44,904 | 46,740 | 1.3 | % | (2.7 | )% | |||||||||||||
| Retained earnings | 49,290 | 49,042 | 57,378 | 0.5 | % | (14.1 | )% | |||||||||||||
| ESOP-Unearned compensation | (2,651 | ) | (3,521 | ) | (3,662 | ) | (24.7 | )% | (27.6 | )% | ||||||||||
| Accumulated other comprehensive income (loss), net of tax | (2,914 | ) | (1,999 | ) | 202 | 45.8 | % | (1542.6 | )% | |||||||||||
| Total stockholders' equity | 89,278 | 88,478 | 100,710 | 0.9 | % | (11.4 | )% | |||||||||||||
| Total liabilities and stockholders' equity | $ | 774,753 | $ | 770,284 | $ | 744,142 | 0.6 | % | 4.1 | % | ||||||||||
Randolph Bancorp, Inc.
Consolidated Balance Sheet Trend
(Dollars in thousands)
(Unaudited)
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 14,891 | $ | 71,072 | $ | 115,449 | $ | 12,876 | $ | 34,876 | ||||||||||
| Securities available for sale, at fair value | 47,142 | 48,836 | 51,666 | 51,725 | 50,212 | |||||||||||||||
| Loans held for sale, at fair value | 9,736 | 22,698 | 44,766 | 75,400 | 74,277 | |||||||||||||||
| Loans: | ||||||||||||||||||||
| 1-4 family residential | 354,922 | 271,755 | 236,364 | 265,561 | 263,992 | |||||||||||||||
| Home equity | 65,210 | 58,501 | 57,295 | 56,124 | 50,555 | |||||||||||||||
| Commercial real estate | 189,334 | 199,255 | 197,423 | 185,100 | 167,691 | |||||||||||||||
| Construction | 33,877 | 32,544 | 33,961 | 34,479 | 29,140 | |||||||||||||||
| Total real estate loans | 643,343 | 562,055 | 525,043 | 541,264 | 511,378 | |||||||||||||||
| Commercial and industrial | 13,162 | 15,478 | 17,242 | 19,896 | 25,826 | |||||||||||||||
| Consumer | 6,353 | 7,267 | 7,552 | 8,860 | 9,194 | |||||||||||||||
| Total loans | 662,858 | 584,800 | 549,837 | 570,020 | 546,398 | |||||||||||||||
| Allowance for loan losses | (6,602 | ) | (6,357 | ) | (6,289 | ) | (6,432 | ) | (6,523 | ) | ||||||||||
| Net deferred loan costs and fees, and purchase premiums | 1,362 | 1,148 | 1,073 | 1,031 | 785 | |||||||||||||||
| Loans, net | 657,618 | 579,591 | 544,621 | 564,619 | 540,660 | |||||||||||||||
| Federal Home Loan Bank of Boston stock, at cost | 1,778 | 2,734 | 2,940 | 3,239 | 2,855 | |||||||||||||||
| Accrued interest receivable | 1,699 | 1,434 | 1,500 | 1,763 | 1,523 | |||||||||||||||
| Mortgage servicing rights, net | 15,093 | 15,378 | 15,616 | 15,402 | 15,375 | |||||||||||||||
| Premises and equipment, net | 7,669 | 7,718 | 7,684 | 6,462 | 5,115 | |||||||||||||||
| Bank-owned life insurance | 8,865 | 8,824 | 8,784 | 8,744 | 8,703 | |||||||||||||||
| Other assets | 10,262 | 11,999 | 10,252 | 10,867 | 10,546 | |||||||||||||||
| Total assets | $ | 774,753 | $ | 770,284 | $ | 803,278 | $ | 751,097 | $ | 744,142 | ||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Non-interest bearing | $ | 146,635 | $ | 142,793 | $ | 145,666 | $ | 134,058 | $ | 124,683 | ||||||||||
| Savings accounts | 195,107 | 196,145 | 191,712 | 188,346 | 190,584 | |||||||||||||||
| NOW accounts | 51,928 | 53,329 | 53,996 | 53,804 | 51,059 | |||||||||||||||
| Money market accounts | 98,331 | 92,769 | 90,544 | 73,562 | 73,967 | |||||||||||||||
| Term certificates | 102,002 | 106,515 | 106,112 | 73,519 | 74,631 | |||||||||||||||
| Interest bearing brokered | 47,361 | 33,128 | 50,117 | 50,116 | 57,059 | |||||||||||||||
| Total deposits | 641,364 | 624,679 | 638,147 | 573,405 | 571,983 | |||||||||||||||
| Federal Home Loan Bank of Boston advances | 32,946 | 45,000 | 50,000 | 62,900 | 50,016 | |||||||||||||||
| Mortgagors' escrow accounts | 2,546 | 2,773 | 2,128 | 1,905 | 1,783 | |||||||||||||||
| Post-employment benefit obligations | 2,055 | 2,064 | 2,222 | 2,182 | 2,226 | |||||||||||||||
| Other liabilities | 6,564 | 7,290 | 9,878 | 10,108 | 17,424 | |||||||||||||||
| Total liabilities | 685,475 | 681,806 | 702,375 | 650,500 | 643,432 | |||||||||||||||
| Stockholders' Equity: | ||||||||||||||||||||
| Common stock | 52 | 52 | 50 | 50 | 52 | |||||||||||||||
| Additional paid-in capital | 45,501 | 44,904 | 44,078 | 43,574 | 46,740 | |||||||||||||||
| Retained earnings | 49,290 | 49,042 | 60,524 | 60,504 | 57,378 | |||||||||||||||
| ESOP-Unearned compensation | (2,651 | ) | (3,521 | ) | (3,568 | ) | (3,615 | ) | (3,662 | ) | ||||||||||
| Accumulated other comprehensive income (loss), net of tax | (2,914 | ) | (1,999 | ) | (181 | ) | 84 | 202 | ||||||||||||
| Total stockholders' equity | 89,278 | 88,478 | 100,903 | 100,597 | 100,710 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 774,753 | $ | 770,284 | $ | 803,278 | $ | 751,097 | $ | 744,142 | ||||||||||
Randolph Bancorp, Inc.
Consolidated Statements of Operations
(Dollars in thousands except per share amounts)
(Unaudited)
| Three Months Ended | % Change | |||||||||||||||||||
| June 30, | March 31, | June 30, | Jun 2022 vs. | Jun 2022 vs. | ||||||||||||||||
| 2022 | 2022 | 2021 | Mar 2022 | Jun 2021 | ||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||
| Loans | $ | 6,182 | $ | 5,467 | $ | 5,505 | 13.1 | % | 12.3 | % | ||||||||||
| Securities-taxable | 221 | 216 | 223 | 2.3 | % | (0.9 | )% | |||||||||||||
| Securities-tax exempt | 4 | 4 | 6 | 0.0 | % | (33.3 | )% | |||||||||||||
| Interest-bearing deposits and certificates of deposit | 45 | 42 | 8 | 7.1 | % | 462.5 | % | |||||||||||||
| Total interest and dividend income | 6,452 | 5,729 | 5,742 | 12.6 | % | 12.4 | % | |||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 342 | 315 | 345 | 8.6 | % | (0.9 | )% | |||||||||||||
| Borrowings | 99 | 147 | 198 | (32.7 | )% | (50.0 | )% | |||||||||||||
| Total interest expense | 441 | 462 | 543 | (4.5 | )% | (18.8 | )% | |||||||||||||
| Net interest income | 6,011 | 5,267 | 5,199 | 14.1 | % | 15.6 | % | |||||||||||||
| Provision (credit) for loan losses | 269 | 71 | (27 | ) | 278.9 | % | (1096.3 | )% | ||||||||||||
| Net interest income after provision (credit) for loan losses | 5,742 | 5,196 | 5,226 | 10.5 | % | 9.9 | % | |||||||||||||
| Non-interest income: | ||||||||||||||||||||
| Customer service fees | 372 | 365 | 419 | 1.9 | % | (11.2 | )% | |||||||||||||
| Gain on loan origination and sale activities, net | 484 | 1,264 | 5,740 | (61.7 | )% | (91.6 | )% | |||||||||||||
| Mortgage servicing fees, net | 509 | 348 | 381 | 46.3 | % | 33.6 | % | |||||||||||||
| Increase in cash surrender value of life insurance | 41 | 40 | 41 | 2.5 | % | 0.0 | % | |||||||||||||
| Other | 419 | 175 | 235 | 139.4 | % | 78.3 | % | |||||||||||||
| Total non-interest income | 1,825 | 2,192 | 6,816 | (16.7 | )% | (73.2 | )% | |||||||||||||
| Non-interest expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 4,414 | 5,154 | 7,310 | (14.4 | )% | (39.6 | )% | |||||||||||||
| Occupancy and equipment | 559 | 365 | 621 | 53.2 | % | (10.0 | )% | |||||||||||||
| Data processing | 378 | 345 | 301 | 9.6 | % | 25.6 | % | |||||||||||||
| Professional fees | 578 | 1,025 | 323 | (43.6 | )% | 78.9 | % | |||||||||||||
| Marketing | 151 | 157 | 200 | (3.8 | )% | (24.5 | )% | |||||||||||||
| FDIC insurance | 62 | 58 | 54 | 6.9 | % | 14.8 | % | |||||||||||||
| Other non-interest expenses | 1,342 | 1,602 | 1,818 | (16.2 | )% | (26.2 | )% | |||||||||||||
| Total non-interest expenses | 7,484 | 8,706 | 10,627 | (14.0 | )% | (29.6 | )% | |||||||||||||
| Income (loss) before income taxes | 83 | (1,318 | ) | 1,415 | (106.3 | )% | (94.1 | )% | ||||||||||||
| Income tax expense (benefit) | (165 | ) | (1,083 | ) | (162 | ) | (84.8 | )% | 1.9 | % | ||||||||||
| Net income (loss) | $ | 248 | $ | (235 | ) | $ | 1,577 | (205.5 | )% | (84.3 | )% | |||||||||
| Net income (loss) per share: | ||||||||||||||||||||
| Basic | $ | 0.05 | $ | (0.05 | ) | $ | 0.32 | |||||||||||||
| Diluted | $ | 0.05 | $ | (0.05 | ) | $ | 0.31 | |||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 4,839,796 | 4,815,325 | 4,921,182 | |||||||||||||||||
| Diluted | 5,076,181 | 5,014,538 | 5,135,582 | |||||||||||||||||
| Dividends declared per share | $ | - | $ | 2.15 | $ | - | ||||||||||||||
Randolph Bancorp, Inc.
Consolidated Statements of Operations
(Dollars in thousands except per share amounts)
(Unaudited)
| Year to Date | % Change | |||||||||||
| June 30, | June 30, | Jun 2022 vs. | ||||||||||
| 2022 | 2021 | Jun 2021 | ||||||||||
| Interest and dividend income: | ||||||||||||
| Loans | $ | 11,649 | $ | 11,013 | 5.8 | % | ||||||
| Securities-taxable | 437 | 463 | (5.6 | )% | ||||||||
| Securities-tax exempt | 8 | 12 | (33.3 | )% | ||||||||
| Interest-bearing deposits and certificates of deposit | 87 | 15 | 480.0 | % | ||||||||
| Total interest and dividend income | 12,181 | 11,503 | 5.9 | % | ||||||||
| Interest expense: | ||||||||||||
| Deposits | 657 | 783 | (16.1 | )% | ||||||||
| Borrowings | 246 | 430 | (42.8 | )% | ||||||||
| Total interest expense | 903 | 1,213 | (25.6 | )% | ||||||||
| Net interest income | 11,278 | 10,290 | 9.6 | % | ||||||||
| Provision (credit) for loan losses | 340 | (240 | ) | (241.7 | )% | |||||||
| Net interest income after provision (credit) for loan losses | 10,938 | 10,530 | 3.9 | % | ||||||||
| Non-interest income: | ||||||||||||
| Customer service fees | 737 | 786 | (6.2 | )% | ||||||||
| Gain on loan origination and sale activities, net | 1,748 | 16,733 | (89.6 | )% | ||||||||
| Mortgage servicing fees, net | 857 | 1,160 | (26.1 | )% | ||||||||
| Increase in cash surrender value of life insurance | 81 | 81 | 0.0 | % | ||||||||
| Other | 594 | 479 | 24.0 | % | ||||||||
| Total non-interest income | 4,017 | 19,239 | (79.1 | )% | ||||||||
| Non-interest expenses: | ||||||||||||
| Salaries and employee benefits | 9,568 | 15,747 | (39.2 | )% | ||||||||
| Occupancy and equipment | 924 | 1,365 | (32.3 | )% | ||||||||
| Data processing | 723 | 564 | 28.2 | % | ||||||||
| Professional fees | 1,603 | 884 | 81.3 | % | ||||||||
| Marketing | 308 | 370 | (16.8 | )% | ||||||||
| FDIC insurance | 120 | 108 | 11.1 | % | ||||||||
| Other non-interest expenses | 2,944 | 3,540 | (16.8 | )% | ||||||||
| Total non-interest expenses | 16,190 | 22,578 | (28.3 | )% | ||||||||
| Income (loss) before income taxes | (1,235 | ) | 7,191 | (117.2 | )% | |||||||
| Income tax expense (benefit) | (1,248 | ) | 1,502 | (183.1 | )% | |||||||
| Net income | $ | 13 | $ | 5,689 | (99.8 | )% | ||||||
| Net income per share: | ||||||||||||
| Basic | $ | 0.00 | $ | 1.14 | ||||||||
| Diluted | $ | 0.00 | $ | 1.10 | ||||||||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 4,827,628 | 4,988,283 | ||||||||||
| Diluted | 5,046,444 | 5,193,643 | ||||||||||
| Dividends declared per share | $ | 2.15 | $ | - | ||||||||
Randolph Bancorp, Inc.
Consolidated Statements of Operations Trend
(Dollars in thousands except per share amounts)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||
| Loans | $ | 6,182 | $ | 5,467 | $ | 5,923 | $ | 6,226 | $ | 5,505 | ||||||||||
| Securities-taxable | 221 | 216 | 217 | 219 | 223 | |||||||||||||||
| Securities-tax exempt | 4 | 4 | 4 | 4 | 6 | |||||||||||||||
| Interest-bearing deposits and certificates of deposit | 45 | 42 | 13 | 4 | 8 | |||||||||||||||
| Total interest and dividend income | 6,452 | 5,729 | 6,157 | 6,453 | 5,742 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 342 | 315 | 308 | 299 | 345 | |||||||||||||||
| Borrowings | 99 | 147 | 155 | 178 | 198 | |||||||||||||||
| Total interest expense | 441 | 462 | 463 | 477 | 543 | |||||||||||||||
| Net interest income | 6,011 | 5,267 | 5,694 | 5,976 | 5,199 | |||||||||||||||
| Provision (credit) for loan losses | 269 | 71 | (108 | ) | (90 | ) | (27 | ) | ||||||||||||
| Net interest income after provision (credit) for loan losses | 5,742 | 5,196 | 5,802 | 6,066 | 5,226 | |||||||||||||||
| Non-interest income: | ||||||||||||||||||||
| Customer service fees | 372 | 365 | 422 | 410 | 419 | |||||||||||||||
| Gain on loan origination and sale activities, net | 484 | 1,264 | 3,723 | 7,229 | 5,740 | |||||||||||||||
| Mortgage servicing fees, net | 509 | 348 | 257 | 274 | 381 | |||||||||||||||
| Increase in cash surrender value of life insurance | 41 | 40 | 41 | 41 | 41 | |||||||||||||||
| Other | 419 | 175 | 92 | 195 | 235 | |||||||||||||||
| Total non-interest income | 1,825 | 2,192 | 4,535 | 8,149 | 6,816 | |||||||||||||||
| Non-interest expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 4,414 | 5,154 | 6,084 | 6,381 | 7,310 | |||||||||||||||
| Occupancy and equipment | 559 | 365 | 713 | 714 | 621 | |||||||||||||||
| Data processing | 378 | 345 | 237 | 367 | 301 | |||||||||||||||
| Professional fees | 578 | 1,025 | 325 | 490 | 323 | |||||||||||||||
| Marketing | 151 | 157 | 245 | 134 | 200 | |||||||||||||||
| FDIC insurance | 62 | 58 | 55 | 54 | 54 | |||||||||||||||
| Other non-interest expenses | 1,342 | 1,602 | 1,562 | 1,719 | 1,818 | |||||||||||||||
| Total non-interest expenses | 7,484 | 8,706 | 9,221 | 9,859 | 10,627 | |||||||||||||||
| Income (loss) before income taxes | 83 | (1,318 | ) | 1,116 | 4,356 | 1,415 | ||||||||||||||
| Income tax expense (benefit) | (165 | ) | (1,083 | ) | 330 | 1,230 | (162 | ) | ||||||||||||
| Net income (loss) | $ | 248 | $ | (235 | ) | $ | 786 | $ | 3,126 | $ | 1,577 | |||||||||
| Net income (loss) per share: | ||||||||||||||||||||
| Basic | $ | 0.05 | $ | (0.05 | ) | $ | 0.17 | $ | 0.64 | $ | 0.32 | |||||||||
| Diluted | $ | 0.05 | $ | (0.05 | ) | $ | 0.16 | $ | 0.62 | $ | 0.31 | |||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 4,839,796 | 4,815,325 | 4,743,833 | 4,869,155 | 4,921,182 | |||||||||||||||
| Diluted | 5,076,181 | 5,014,538 | 4,993,750 | 5,074,676 | 5,135,582 | |||||||||||||||
| Dividends declared per share | $ | - | $ | 2.15 | $ | 0.15 | $ | - | $ | - | ||||||||||
Randolph Bancorp, Inc.
Average Balances/Yields
(Dollars in thousands)
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | |||||||||||||||||||||||||||||||||
| Average | Interest | Average | Average | Interest | Average | Average | Interest | Average | |||||||||||||||||||||||||||
| Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ | |||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Paid | Rate (7) | Balance | Paid | Rate (7) | Balance | Paid | Rate (7) | ||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||
| Loans: | |||||||||||||||||||||||||||||||||||
| 1-4 family residential (1) | $ | 320,545 | $ | 2,941 | 3.68 | % | $ | 274,883 | $ | 2,400 | 3.54 | % | $ | 319,087 | $ | 2,763 | 3.47 | % | |||||||||||||||||
| Home equity | 62,406 | 574 | 3.69 | % | 57,046 | 470 | 3.34 | % | 49,789 | 412 | 3.32 | % | |||||||||||||||||||||||
| Commercial real estate | 197,928 | 2,025 | 4.10 | % | 197,330 | 1,921 | 3.95 | % | 159,423 | 1,666 | 4.19 | % | |||||||||||||||||||||||
| Construction | 32,095 | 314 | 3.92 | % | 32,734 | 296 | 3.67 | % | 29,902 | 289 | 3.88 | % | |||||||||||||||||||||||
| Total real estate loans | 612,974 | 5,854 | 3.83 | % | 561,993 | 5,087 | 3.67 | % | 558,201 | 5,130 | 3.69 | % | |||||||||||||||||||||||
| Commercial and industrial | 14,123 | 234 | 6.65 | % | 16,631 | 277 | 6.75 | % | 25,497 | 266 | 4.18 | % | |||||||||||||||||||||||
| Consumer | 6,924 | 94 | 5.45 | % | 7,617 | 103 | 5.48 | % | 9,052 | 109 | 4.83 | % | |||||||||||||||||||||||
| Total loans | 634,021 | 6,182 | 3.91 | % | 586,241 | 5,467 | 3.78 | % | 592,750 | 5,505 | 3.73 | % | |||||||||||||||||||||||
| Investment securities(2) (3) | 49,426 | 226 | 1.83 | % | 52,930 | 221 | 1.69 | % | 55,376 | 230 | 1.67 | % | |||||||||||||||||||||||
| Interest-earning deposits | 27,803 | 45 | 0.65 | % | 107,866 | 42 | 0.16 | % | 43,888 | 8 | 0.07 | % | |||||||||||||||||||||||
| Total interest-earning assets | 711,250 | 6,453 | 3.64 | % | 747,037 | 5,730 | 3.11 | % | 692,014 | 5,743 | 3.33 | % | |||||||||||||||||||||||
| Noninterest-earning assets | 41,971 | 41,939 | 40,257 | ||||||||||||||||||||||||||||||||
| Total assets | $ | 753,221 | $ | 788,976 | $ | 732,271 | |||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Savings accounts | 194,944 | 76 | 0.16 | % | 194,120 | 72 | 0.15 | % | 192,434 | 89 | 0.19 | % | |||||||||||||||||||||||
| NOW accounts | 52,890 | 49 | 0.37 | % | 62,039 | 43 | 0.28 | % | 69,730 | 38 | 0.22 | % | |||||||||||||||||||||||
| Money market accounts | 98,813 | 79 | 0.32 | % | 93,174 | 36 | 0.16 | % | 72,469 | 43 | 0.24 | % | |||||||||||||||||||||||
| Term certificates | 141,279 | 138 | 0.39 | % | 143,320 | 164 | 0.46 | % | 104,604 | 175 | 0.67 | % | |||||||||||||||||||||||
| Total interest-bearing deposits | 487,926 | 342 | 0.28 | % | 492,653 | 315 | 0.26 | % | 439,237 | 345 | 0.32 | % | |||||||||||||||||||||||
| FHLBB and FRB advances | 31,058 | 99 | 1.28 | % | 48,333 | 147 | 1.23 | % | 51,502 | 198 | 1.54 | % | |||||||||||||||||||||||
| Total interest-bearing liabilities | 518,984 | 441 | 0.34 | % | 540,986 | 462 | 0.35 | % | 490,739 | 543 | 0.44 | % | |||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 133,915 | 140,454 | 124,656 | ||||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 10,642 | 11,559 | 13,606 | ||||||||||||||||||||||||||||||||
| Total liabilities | 663,541 | 692,999 | 629,001 | ||||||||||||||||||||||||||||||||
| Total stockholders' equity | 89,680 | 95,977 | 103,270 | ||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 753,221 | $ | 788,976 | $ | 732,271 | |||||||||||||||||||||||||||||
| Net interest income | $ | 6,012 | $ | 5,268 | $ | 5,200 | |||||||||||||||||||||||||||||
| Interest rate spread(4) | 3.30 | % | 2.76 | % | 2.89 | % | |||||||||||||||||||||||||||||
| Net interest-earning assets(5) | $ | 192,266 | $ | 206,051 | $ | 201,275 | |||||||||||||||||||||||||||||
| Net interest margin(6) | 3.39 | % | 2.86 | % | 3.01 | % | |||||||||||||||||||||||||||||
| Cost of deposits (8) | 0.22 | % | 0.20 | % | 0.25 | % | |||||||||||||||||||||||||||||
| Cost of funds (9) | 0.27 | % | 0.27 | % | 0.35 | % | |||||||||||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 137.05 | % | 138.09 | % | 141.01 | % | |||||||||||||||||||||||||||||
(1) Includes nonaccruing loan balances and interest received on such loans, in addition to loans held for sale.
(2) Includes carrying value of securities classified as available-for-sale and FHLBB stock.
(3) Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $1,000, $1,000 and $1,000 for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively.
(4) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.
(7) During the fourth quarter of 2021, the Company changed the yield calculation method from the "30/360" to the "Actual/Actual" method. Management believes that the "Actual/Actual" method provides a more consistent and relevant metric for yield performance comparisons.
(8) Cost of deposits represents the total interest paid on deposits, divided by total interest-bearing deposits plus total noninterest-bearing deposits.
(9) Cost of funds represents the total interest paid on liabilities, divided by total interest-bearing liabilities plus total noninterest-bearing deposits.
Randolph Bancorp, Inc.
Average Balances/Yields
(Dollars in thousands)
(Unaudited)
| Year to Date | |||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
| Average | Interest | Average | Average | Interest | Average | ||||||||||||||||||
| Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ | ||||||||||||||||||
| (Dollars in thousands) | Balance | Paid | Rate (7) | Balance | Paid | Rate (7) | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||
| Loans: | |||||||||||||||||||||||
| 1-4 family residential (1) | $ | 297,840 | $ | 5,341 | 3.62 | % | $ | 327,897 | $ | 5,737 | 3.53 | % | |||||||||||
| Home equity | 59,740 | 1,044 | 3.52 | % | 49,090 | 845 | 3.47 | % | |||||||||||||||
| Commercial real estate | 197,631 | 3,946 | 4.03 | % | 153,088 | 3,072 | 4.05 | % | |||||||||||||||
| Construction | 32,413 | 610 | 3.80 | % | 30,125 | 584 | 3.91 | % | |||||||||||||||
| Total real estate loans | 587,624 | 10,941 | 3.75 | % | 560,200 | 10,238 | 3.69 | % | |||||||||||||||
| Commercial and industrial | 15,370 | 511 | 6.70 | % | 23,689 | 540 | 4.60 | % | |||||||||||||||
| Consumer | 7,268 | 197 | 5.47 | % | 9,493 | 235 | 4.99 | % | |||||||||||||||
| Total loans | 610,262 | 11,649 | 3.85 | % | 593,382 | 11,013 | 3.74 | % | |||||||||||||||
| Investment securities(2) (3) | 51,168 | 447 | 1.76 | % | 56,590 | 477 | 1.70 | % | |||||||||||||||
| Interest-earning deposits | 67,613 | 87 | 0.26 | % | 39,713 | 15 | 0.08 | % | |||||||||||||||
| Total interest-earning assets | 729,043 | 12,183 | 3.37 | % | 689,685 | 11,505 | 3.36 | % | |||||||||||||||
| Noninterest-earning assets | 41,958 | 41,146 | |||||||||||||||||||||
| Total assets | $ | 771,001 | $ | 730,831 | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||
| Savings accounts | 194,535 | 148 | 0.15 | % | 191,379 | 187 | 0.20 | % | |||||||||||||||
| NOW accounts | 57,439 | 92 | 0.32 | % | 69,621 | 86 | 0.25 | % | |||||||||||||||
| Money market accounts | 96,009 | 115 | 0.24 | % | 74,222 | 97 | 0.26 | % | |||||||||||||||
| Term certificates | 142,294 | 302 | 0.43 | % | 100,812 | 413 | 0.83 | % | |||||||||||||||
| Total interest-bearing deposits | 490,277 | 657 | 0.27 | % | 436,034 | 783 | 0.36 | % | |||||||||||||||
| FHLBB and FRB advances | 39,648 | 246 | 1.25 | % | 61,126 | 430 | 1.42 | % | |||||||||||||||
| Total interest-bearing liabilities | 529,925 | 903 | 0.34 | % | 497,160 | 1,213 | 0.49 | % | |||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||
| Noninterest-bearing deposits | 137,167 | 115,841 | |||||||||||||||||||||
| Other noninterest-bearing liabilities | 11,098 | 14,486 | |||||||||||||||||||||
| Total liabilities | 678,190 | 627,487 | |||||||||||||||||||||
| Total stockholders' equity | 92,811 | 103,344 | |||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 771,001 | $ | 730,831 | |||||||||||||||||||
| Net interest income | $ | 11,280 | $ | 10,292 | |||||||||||||||||||
| Interest rate spread(4) | 3.03 | % | 2.87 | % | |||||||||||||||||||
| Net interest-earning assets(5) | $ | 199,118 | $ | 192,525 | |||||||||||||||||||
| Net interest margin(6) | 3.12 | % | 3.01 | % | |||||||||||||||||||
| Cost of deposits (8) | 0.21 | % | 0.29 | % | |||||||||||||||||||
| Cost of funds (9) | 0.27 | % | 0.40 | % | |||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 137.57 | % | 138.72 | % | |||||||||||||||||||
(1) Includes nonaccruing loan balances and interest received on such loans, in addition to loans held for sale.
(2) Includes carrying value of securities classified as available-for-sale and FHLBB stock.
(3) Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $2,000 and $2,000 for the six months ended June 30, 2022 and 2021, respectively.
(4) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.
(7) During the fourth quarter of 2021, the Company changed the yield calculation method from the "30/360" to the "Actual/Actual" method. Management believes that the "Actual/Actual" method provides a more consistent and relevant metric for yield performance comparisons.
(8) Cost of deposits represents the total interest paid on deposits, divided by total interest-bearing deposits plus total noninterest-bearing deposits.
(9) Cost of funds represents the total interest paid on liabilities, divided by total interest-bearing liabilities plus total noninterest-bearing deposits.
Randolph Bancorp, Inc.
Average Balances Trend
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans: | ||||||||||||||||||||
| 1-4 family residential | $ | 320,545 | $ | 274,883 | $ | 319,855 | $ | 345,576 | $ | 319,087 | ||||||||||
| Home equity | 62,406 | 57,046 | 57,183 | 53,345 | 49,789 | |||||||||||||||
| Commercial real estate | 197,928 | 197,330 | 186,943 | 174,319 | 159,423 | |||||||||||||||
| Construction | 32,095 | 32,734 | 34,246 | 32,690 | 29,902 | |||||||||||||||
| Total real estate loans | 612,974 | 561,993 | 598,227 | 605,930 | 558,201 | |||||||||||||||
| Commercial and industrial | 14,123 | 16,631 | 18,311 | 22,693 | 25,497 | |||||||||||||||
| Consumer | 6,924 | 7,617 | 8,313 | 12,820 | 9,052 | |||||||||||||||
| Total loans | 634,021 | 586,241 | 624,851 | 641,443 | 592,750 | |||||||||||||||
| Investment securities | 49,426 | 52,930 | 54,314 | 54,229 | 55,376 | |||||||||||||||
| Interest-earning deposits | 27,803 | 107,866 | 41,161 | 11,002 | 43,888 | |||||||||||||||
| Total interest-earning assets | 711,250 | 747,037 | 720,326 | 706,674 | 692,014 | |||||||||||||||
| Non-interest earning assets | 41,971 | 41,939 | 43,478 | 44,614 | 40,257 | |||||||||||||||
| Total assets | $ | 753,221 | $ | 788,976 | $ | 763,804 | $ | 751,288 | $ | 732,271 | ||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Savings accounts | $ | 194,944 | $ | 194,120 | $ | 191,464 | $ | 189,254 | $ | 192,434 | ||||||||||
| NOW accounts | 52,890 | 62,039 | 62,838 | 61,951 | 69,730 | |||||||||||||||
| Money market accounts | 98,813 | 93,174 | 77,140 | 73,662 | 72,469 | |||||||||||||||
| Term certificates | 141,279 | 143,320 | 135,406 | 113,787 | 104,604 | |||||||||||||||
| Total interest-bearing deposits | 487,926 | 492,653 | 466,848 | 438,654 | 439,237 | |||||||||||||||
| FHLBB and FRB advances | 31,058 | 48,333 | 53,592 | 64,047 | 51,502 | |||||||||||||||
| Total interest-bearing liabilities | 518,984 | 540,986 | 520,440 | 502,701 | 490,739 | |||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing deposits | 133,915 | 140,454 | 127,486 | 126,165 | 124,656 | |||||||||||||||
| Other noninterest-bearing liabilities | 10,642 | 11,559 | 13,305 | 19,021 | 13,606 | |||||||||||||||
| Total liabilities | 663,541 | 692,999 | 661,231 | 647,887 | 629,001 | |||||||||||||||
| Total stockholders' equity | 89,680 | 95,977 | 102,573 | 103,401 | 103,270 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 753,221 | $ | 788,976 | $ | 763,804 | $ | 751,288 | $ | 732,271 | ||||||||||
Randolph Bancorp, Inc.
Interest Earned and Paid Trend
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans: | ||||||||||||||||||||
| 1-4 family residential | $ | 2,941 | $ | 2,400 | $ | 2,790 | $ | 3,021 | $ | 2,763 | ||||||||||
| Home equity | 574 | 470 | 480 | 475 | 412 | |||||||||||||||
| Commercial real estate | 2,025 | 1,921 | 1,880 | 1,809 | 1,666 | |||||||||||||||
| Construction | 314 | 296 | 331 | 310 | 289 | |||||||||||||||
| Total real estate loans | 5,854 | 5,087 | 5,481 | 5,615 | 5,130 | |||||||||||||||
| Commercial and industrial | 234 | 277 | 331 | 493 | 266 | |||||||||||||||
| Consumer | 94 | 103 | 111 | 118 | 109 | |||||||||||||||
| Total loans | 6,182 | 5,467 | 5,923 | 6,226 | 5,505 | |||||||||||||||
| Investment securities | 226 | 221 | 222 | 224 | 230 | |||||||||||||||
| Interest-earning deposits | 45 | 42 | 13 | 4 | 8 | |||||||||||||||
| Total interest-earning assets | 6,453 | 5,730 | 6,158 | 6,454 | 5,743 | |||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Savings accounts | $ | 76 | $ | 72 | $ | 72 | $ | 76 | $ | 89 | ||||||||||
| NOW accounts | 49 | 43 | 29 | 23 | 38 | |||||||||||||||
| Money market accounts | 79 | 36 | 36 | 41 | 43 | |||||||||||||||
| Term certificates | 138 | 164 | 171 | 159 | 175 | |||||||||||||||
| Total interest-bearing deposits | 342 | 315 | 308 | 299 | 345 | |||||||||||||||
| FHLBB and FRB advances | 99 | 147 | 155 | 178 | 198 | |||||||||||||||
| Total interest-bearing liabilities | 441 | 462 | 463 | 477 | 543 | |||||||||||||||
| Net interest income | 6,012 | 5,268 | 5,695 | 5,977 | 5,200 | |||||||||||||||
Randolph Bancorp, Inc.
Average Yield Trend(1)
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans: | ||||||||||||||||||||
| 1-4 family residential | 3.68 | % | 3.54 | % | 3.46 | % | 3.47 | % | 3.47 | % | ||||||||||
| Home equity | 3.69 | % | 3.34 | % | 3.33 | % | 3.53 | % | 3.32 | % | ||||||||||
| Commercial real estate | 4.10 | % | 3.95 | % | 3.99 | % | 4.12 | % | 4.19 | % | ||||||||||
| Construction | 3.92 | % | 3.67 | % | 3.83 | % | 3.76 | % | 3.88 | % | ||||||||||
| Total real estate loans | 3.83 | % | 3.67 | % | 3.63 | % | 3.68 | % | 3.69 | % | ||||||||||
| Commercial and industrial | 6.65 | % | 6.75 | % | 7.17 | % | 8.62 | % | 4.18 | % | ||||||||||
| Consumer | 5.45 | % | 5.48 | % | 5.30 | % | 3.65 | % | 4.83 | % | ||||||||||
| Total loans | 3.91 | % | 3.78 | % | 3.76 | % | 3.85 | % | 3.73 | % | ||||||||||
| Investment securities | 1.83 | % | 1.69 | % | 1.62 | % | 1.64 | % | 1.67 | % | ||||||||||
| Interest-earning deposits | 0.65 | % | 0.16 | % | 0.13 | % | 0.14 | % | 0.07 | % | ||||||||||
| Total interest-earning assets | 3.64 | % | 3.11 | % | 3.39 | % | 3.62 | % | 3.33 | % | ||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Savings accounts | 0.16 | % | 0.15 | % | 0.15 | % | 0.16 | % | 0.19 | % | ||||||||||
| NOW accounts | 0.37 | % | 0.28 | % | 0.18 | % | 0.15 | % | 0.22 | % | ||||||||||
| Money market accounts | 0.32 | % | 0.16 | % | 0.19 | % | 0.22 | % | 0.24 | % | ||||||||||
| Term certificates | 0.39 | % | 0.46 | % | 0.50 | % | 0.55 | % | 0.67 | % | ||||||||||
| Total interest-bearing deposits | 0.28 | % | 0.26 | % | 0.26 | % | 0.27 | % | 0.32 | % | ||||||||||
| FHLBB and FRB advances | 1.28 | % | 1.23 | % | 1.15 | % | 1.10 | % | 1.54 | % | ||||||||||
| Total interest-bearing liabilities | 0.34 | % | 0.35 | % | 0.35 | % | 0.38 | % | 0.44 | % | ||||||||||
| Interest rate spread | 3.30 | % | 2.76 | % | 3.04 | % | 3.24 | % | 2.89 | % | ||||||||||
| Net interest rate margin | 3.39 | % | 2.86 | % | 3.14 | % | 3.36 | % | 3.01 | % | ||||||||||
| Cost of deposits | 0.22 | % | 0.20 | % | 0.21 | % | 0.21 | % | 0.25 | % | ||||||||||
| Cost of funds | 0.27 | % | 0.27 | % | 0.28 | % | 0.30 | % | 0.35 | % | ||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 137.05 | % | 138.09 | % | 138.41 | % | 140.58 | % | 141.01 | % | ||||||||||
(1) During the fourth quarter of 2021, the Company changed the yield calculation method from the "30/360" to the "Actual/Actual" method. Management believes that the "Actual/Actual" method provides a more consistent and relevant metric for yield performance comparisons.
Randolph Bancorp, Inc.
Rate/Volume Analysis
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||
| June 30, 2022 vs. March 31, 2022 | ||||||||||||
| Increase (Decrease) | Total | |||||||||||
| Due to Changes in | Increase | |||||||||||
| Volume | Rate | (Decrease) | ||||||||||
| Interest-earning assets: | ||||||||||||
| Loans: | ||||||||||||
| 1-4 family residential | $ | 360 | $ | 181 | 541 | |||||||
| Home equity | 39 | 65 | 104 | |||||||||
| Commercial real estate | 4 | 100 | 104 | |||||||||
| Construction | (5 | ) | 23 | 18 | ||||||||
| Total real estate loans | 398 | 369 | 767 | |||||||||
| Commercial and industrial | (39 | ) | (4 | ) | (43 | ) | ||||||
| Consumer | (8 | ) | (1 | ) | (9 | ) | ||||||
| Total loans | 351 | 364 | 715 | |||||||||
| Investment securities | (14 | ) | 19 | 5 | ||||||||
| Interest-earning deposits | (12 | ) | 15 | 3 | ||||||||
| Total interest-earning assets | 325 | 398 | 723 | |||||||||
| Interest-bearing liabilities: | ||||||||||||
| Savings accounts | - | 4 | 4 | |||||||||
| NOW accounts | (5 | ) | 11 | 6 | ||||||||
| Money market accounts | 2 | 41 | 43 | |||||||||
| Term certificates | (2 | ) | (24 | ) | (26 | ) | ||||||
| Total interest-bearing deposits | (5 | ) | 32 | 27 | ||||||||
| FHLBB and FRB advances | (53 | ) | 5 | (48 | ) | |||||||
| Total interest-bearing liabilities | (58 | ) | 37 | (21 | ) | |||||||
| Change in net interest income | $ | 383 | $ | 361 | $ | 744 | ||||||
Randolph Bancorp, Inc.
Rate/Volume Analysis
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||
| June 30, 2022 vs. 2021 | ||||||||||||
| Increase (Decrease) | Total | |||||||||||
| Due to Changes in | Increase | |||||||||||
| Volume | Rate | (Decrease) | ||||||||||
| Interest-earning assets: | ||||||||||||
| Loans: | ||||||||||||
| 1-4 family residential | $ | 13 | $ | 165 | 178 | |||||||
| Home equity | 96 | 66 | 162 | |||||||||
| Commercial real estate | 395 | (36 | ) | 359 | ||||||||
| Construction | 21 | 4 | 25 | |||||||||
| Total real estate loans | 525 | 199 | 724 | |||||||||
| Commercial and industrial | (89 | ) | 57 | (32 | ) | |||||||
| Consumer | (24 | ) | 9 | (15 | ) | |||||||
| Total loans | 412 | 265 | 677 | |||||||||
| Investment securities | (24 | ) | 20 | (4 | ) | |||||||
| Interest-earning deposits | (2 | ) | 39 | 37 | ||||||||
| Total interest-earning assets | 386 | 324 | 710 | |||||||||
| Interest-bearing liabilities: | ||||||||||||
| Savings accounts | 1 | (14 | ) | (13 | ) | |||||||
| NOW accounts | (7 | ) | 18 | 11 | ||||||||
| Money market accounts | 13 | 23 | 36 | |||||||||
| Term certificates | 50 | (87 | ) | (37 | ) | |||||||
| Total interest-bearing deposits | 57 | (60 | ) | (3 | ) | |||||||
| FHLBB and FRB advances | (69 | ) | (30 | ) | (99 | ) | ||||||
| Total interest-bearing liabilities | (12 | ) | (90 | ) | (102 | ) | ||||||
| Change in net interest income | $ | 398 | $ | 414 | $ | 812 | ||||||
Randolph Bancorp, Inc.
Rate/Volume Analysis
(Dollars in thousands)
(Unaudited)
| Year to Date | ||||||||||||
| June 30, 2022 vs. 2021 | ||||||||||||
| Increase (Decrease) | Total | |||||||||||
| Due to Changes in | Increase | |||||||||||
| Volume | Rate | (Decrease) | ||||||||||
| Interest-earning assets: | ||||||||||||
| Loans: | ||||||||||||
| 1-4 family residential | $ | (516 | ) | $ | 120 | (396 | ) | |||||
| Home equity | 180 | 19 | 199 | |||||||||
| Commercial real estate | 889 | (15 | ) | 874 | ||||||||
| Construction | 43 | (17 | ) | 26 | ||||||||
| Total real estate loans | 596 | 107 | 703 | |||||||||
| Commercial and industrial | (152 | ) | 123 | (29 | ) | |||||||
| Consumer | (51 | ) | 13 | (38 | ) | |||||||
| Total loans | 393 | 243 | 636 | |||||||||
| Investment securities | (45 | ) | 15 | (30 | ) | |||||||
| Interest-earning deposits | 5 | 67 | 72 | |||||||||
| Total interest-earning assets | 353 | 325 | 678 | |||||||||
| Interest-bearing liabilities: | ||||||||||||
| Savings accounts | 3 | (42 | ) | (39 | ) | |||||||
| NOW accounts | (13 | ) | 19 | 6 | ||||||||
| Money market accounts | 26 | (8 | ) | 18 | ||||||||
| Term certificates | 132 | (243 | ) | (111 | ) | |||||||
| Total interest-bearing deposits | 148 | (274 | ) | (126 | ) | |||||||
| FHLBB and FRB advances | (138 | ) | (46 | ) | (184 | ) | ||||||
| Total interest-bearing liabilities | 10 | (320 | ) | (310 | ) | |||||||
| Change in net interest income | $ | 343 | $ | 645 | $ | 988 | ||||||
Randolph Bancorp, Inc.
Quarterly Trend in Mortgage Banking Income
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
| Gain on loan origination and sale activities, net | ||||||||||||||||||||
| Gain on sale of mortgages and realized gain from derivative financial instruments, net | $ | 632 | $ | 3,093 | $ | 4,818 | $ | 6,339 | $ | 6,545 | ||||||||||
| Net change in fair value of loans held for sale and portfolio loans accounted for at fair value | 218 | (1,559 | ) | (1,360 | ) | 549 | 1,091 | |||||||||||||
| Capitalized residential mortgage loan servicing rights | 160 | 377 | 942 | 783 | 1,476 | |||||||||||||||
| Net change in fair value of derivative loan commitments and forward loan sale commitments | (526 | ) | (647 | ) | (677 | ) | (442 | ) | (3,372 | ) | ||||||||||
| Gain on loan origination and sales activities, net | $ | 484 | $ | 1,264 | $ | 3,723 | $ | 7,229 | $ | 5,740 | ||||||||||
| Mortgage servicing fees, net | ||||||||||||||||||||
| Residential mortgage loan servicing fees | $ | 1,259 | $ | 1,277 | $ | 1,355 | $ | 1,282 | $ | 1,205 | ||||||||||
| Amortization of residential mortgage loan servicing rights | (731 | ) | (749 | ) | (831 | ) | (795 | ) | (759 | ) | ||||||||||
| Release (provision) to the valuation allowance of mortgage loan servicing rights | 286 | 135 | 43 | 39 | (65 | ) | ||||||||||||||
| Sub-servicer expenses (1) | (305 | ) | (315 | ) | (310 | ) | (252 | ) | - | |||||||||||
| Mortgage servicing fees, net | $ | 509 | $ | 348 | $ | 257 | $ | 274 | $ | 381 | ||||||||||
| Total gain on loan origination and sales activities and mortgage servicing fees | $ | 993 | $ | 1,612 | $ | 3,980 | $ | 7,503 | $ | 6,121 | ||||||||||
| Principal balance of loans originated for sale | $ | 71,626 | $ | 110,371 | $ | 222,644 | $ | 260,519 | $ | 309,033 | ||||||||||
| Principal balance of loans sold | $ | 56,752 | $ | 129,858 | $ | 297,316 | $ | 260,473 | $ | 342,762 | ||||||||||
| Ending notional amount of derivative loan commitments | $ | 10,913 | $ | 42,678 | $ | 85,887 | $ | 158,085 | $ | 139,748 | ||||||||||
| Loans held for sale, at fair value | $ | 9,736 | $ | 22,698 | $ | 44,766 | $ | 75,400 | $ | 74,277 | ||||||||||
| Margin on loans sold (2) | 1.40 | % | 2.67 | % | 1.94 | % | 2.73 | % | 2.34 | % | ||||||||||
(1) Sub-servicer expenses were first incurred during the three months ended September 30, 2021, due to a conversion of the Company's mortgage loan servicing activities. Previously, all expenses related to servicing mortgage loans serviced for others were included in non-interest expenses.
(2) Margin on loans sold is calculated as the sum of the gain on sale of mortgages and realized gain from derivative financial instruments, net, plus capitalized residential mortgage loan servicing rights divided by the principal balance of loans sold.
Randolph Bancorp, Inc.
Year-to-Date Trend in Mortgage Banking Income
(Dollars in thousands)
(Unaudited)
| Year-to-Date | |||||||||
| June 30, | June 30, | ||||||||
| 2022 | 2021 | ||||||||
| Gain on loan origination and sale activities, net | |||||||||
| Gain on sale of mortgages and realized gain from derivative financial instruments, net | $ | 3,725 | $ | 22,421 | |||||
| Net change in fair value of loans held for sale and portfolio loans accounted for at fair value | (1,341 | ) | (2,725 | ) | |||||
| Capitalized residential mortgage loan servicing rights | 537 | 4,273 | |||||||
| Net change in fair value of derivative loan commitments and forward loan sale commitments | (1,173 | ) | (7,236 | ) | |||||
| Gain on loan origination and sales activities, net | $ | 1,748 | $ | 16,733 | |||||
| Mortgage servicing fees, net | |||||||||
| Residential mortgage loan servicing fees | $ | 2,536 | $ | 2,375 | |||||
| Amortization of residential mortgage loan servicing rights | (1,480 | ) | (1,571 | ) | |||||
| Release (provision) to the valuation allowance of mortgage loan servicing rights | 421 | 356 | |||||||
| Sub-servicer expenses (1) | (620 | ) | - | ||||||
| Mortgage servicing fees, net | $ | 857 | $ | 1,160 | |||||
| Total gain on loan origination and sales activities and mortgage servicing fees | $ | 2,605 | $ | 17,893 | |||||
| Principal balance of loans originated for sale | $ | 181,997 | $ | 796,708 | |||||
| Principal balance of loans sold | $ | 186,610 | $ | 846,047 | |||||
| Ending notional amount of derivative loan commitments | $ | 10,913 | $ | 139,748 | |||||
| Loans held for sale, at fair value | $ | 9,736 | $ | 74,277 | |||||
| Margin on loans sold (2) | 2.28 | % | 3.16 | % | |||||
(1) Sub-servicer expenses were first incurred during the three months ended September 30, 2021, due to a conversion of the Company's mortgage loan servicing activities. Previously, all expenses related to servicing mortgage loans serviced for others were included in non-interest expenses.
(2) Margin on loans sold is calculated as the sum of the gain on sale of mortgages and realized gain from derivative financial instruments, net, plus capitalized residential mortgage loan servicing rights divided by the principal balance of loans sold.
Randolph Bancorp, Inc.
Segment Information
(Dollars in thousands)
(Unaudited)
| For the Three Months Ended June 30, 2022 | ||||||||||||
| Envision Bank | Envision Mortgage | Consolidated Total | ||||||||||
| Net interest income | $ | 5,741 | $ | 270 | $ | 6,011 | ||||||
| Provision for loan losses | 269 | - | 269 | |||||||||
| Net interest income after provision for loan losses | 5,472 | 270 | 5,742 | |||||||||
| Non-interest income: | ||||||||||||
| Customer service fees | 365 | 7 | 372 | |||||||||
| Gain on loan origination and sale activities, net (1) | - | 1,920 | 1,920 | |||||||||
| Mortgage servicing fees, net | (240 | ) | 749 | 509 | ||||||||
| Other | 369 | 91 | 460 | |||||||||
| Total non-interest income | 494 | 2,767 | 3,261 | |||||||||
| Non-interest expenses: | ||||||||||||
| Salaries and employee benefits | 1,831 | 2,583 | 4,414 | |||||||||
| Occupancy and equipment | 447 | 112 | 559 | |||||||||
| Other non-interest expenses(2) | 1,357 | 1,154 | 2,511 | |||||||||
| Total non-interest expenses | 3,635 | 3,849 | 7,484 | |||||||||
| Income (loss) before income taxes and elimination of inter-segment profit | $ | 2,331 | $ | (812 | ) | 1,519 | ||||||
| Elimination of inter-segment profit | (1,436 | ) | ||||||||||
| Income before income taxes | 83 | |||||||||||
| Income tax expense (benefit) | (165 | ) | ||||||||||
| Net income | $ | 248 | ||||||||||
(1) Before elimination of inter-segment profit.
(2) Other non-interest expenses include $357,000 of merger expenses. The full amount of merger expenses was allocated to Envision Bank.
The information above was derived from the internal management reporting system used to measure performance of the segments.
Randolph Bancorp, Inc.
Segment Information
(Dollars in thousands)
(Unaudited)
| For the Three Months Ended March 31, 2022 | ||||||||||||
| Envision Bank | Envision Mortgage | Consolidated Total | ||||||||||
| Net interest income | $ | 5,011 | $ | 256 | $ | 5,267 | ||||||
| Provision for loan losses | 71 | - | 71 | |||||||||
| Net interest income after provision for loan losses | 4,940 | 256 | 5,196 | |||||||||
| Non-interest income: | ||||||||||||
| Customer service fees | 355 | 10 | 365 | |||||||||
| Gain on loan origination and sale activities, net (1) | - | 1,991 | 1,991 | |||||||||
| Mortgage servicing fees, net | (205 | ) | 553 | 348 | ||||||||
| Other | 99 | 116 | 215 | |||||||||
| Total non-interest income | 249 | 2,670 | 2,919 | |||||||||
| Non-interest expenses: | ||||||||||||
| Salaries and employee benefits | 1,935 | 3,219 | 5,154 | |||||||||
| Occupancy and equipment | 512 | (147 | ) | 365 | ||||||||
| Other non-interest expenses(2) | 1,911 | 1,276 | 3,187 | |||||||||
| Total non-interest expenses | 4,358 | 4,348 | 8,706 | |||||||||
| Income (loss) before income taxes and elimination of inter-segment profit | $ | 831 | $ | (1,422 | ) | (591 | ) | |||||
| Elimination of inter-segment profit | (727 | ) | ||||||||||
| Income (loss) before income taxes | (1,318 | ) | ||||||||||
| Income tax expense (benefit) | (1,083 | ) | ||||||||||
| Net income (loss) | $ | (235 | ) | |||||||||
(1) Before elimination of inter-segment profit.
(2) Other non-interest expenses include $588,000 of merger expenses. The full amount of merger expenses was allocated to Envision Bank.
The information above was derived from the internal management reporting system used to measure performance of the segments.
Randolph Bancorp, Inc.
Segment Information
(Dollars in thousands)
(Unaudited)
| For the Three Months Ended June 30, 2021 | ||||||||||||
| Envision Bank | Envision Mortgage | Consolidated Total | ||||||||||
| Net interest income | $ | 4,535 | $ | 664 | $ | 5,199 | ||||||
| Provision (credit) for loan losses | (27 | ) | - | (27 | ) | |||||||
| Net interest income after provision for loan losses | 4,562 | 664 | 5,226 | |||||||||
| Non-interest income: | ||||||||||||
| Customer service fees | 393 | 26 | 419 | |||||||||
| Gain on loan origination and sale activities, net (1) | - | 6,558 | 6,558 | |||||||||
| Mortgage servicing fees, net | (94 | ) | 475 | 381 | ||||||||
| Other | 158 | 118 | 276 | |||||||||
| Total non-interest income | 457 | 7,177 | 7,634 | |||||||||
| Non-interest expenses: | ||||||||||||
| Salaries and employee benefits | 1,746 | 5,564 | 7,310 | |||||||||
| Occupancy and equipment | 407 | 214 | 621 | |||||||||
| Other non-interest expenses | 1,265 | 1,431 | 2,696 | |||||||||
| Total non-interest expenses | 3,418 | 7,209 | 10,627 | |||||||||
| Income (loss) before income taxes and elimination of inter-segment profit | $ | 1,601 | $ | 632 | 2,233 | |||||||
| Elimination of inter-segment profit | (818 | ) | ||||||||||
| Income before income taxes | 1,415 | |||||||||||
| Income tax expense (benefit) | (162 | ) | ||||||||||
| Net income | $ | 1,577 | ||||||||||
(1) Before elimination of inter-segment profit.
The information above was derived from the internal management reporting system used to measure performance of the segments.
Randolph Bancorp, Inc.
Segment Information
(Dollars in thousands)
(Unaudited)
| For the Six Months Ended June 30, 2022 | ||||||||||||
| Envision Bank | Envision Mortgage | Consolidated Total | ||||||||||
| Net interest income | $ | 10,751 | $ | 527 | $ | 11,278 | ||||||
| Provision (credit) for loan losses | 340 | - | 340 | |||||||||
| Net interest income after provision (credit) for loan losses | 10,411 | 527 | 10,938 | |||||||||
| Non-interest income: | ||||||||||||
| Customer service fees | 720 | 17 | 737 | |||||||||
| Gain on loan origination and sale activities, net (1) | - | 3,911 | 3,911 | |||||||||
| Mortgage servicing fees, net | (445 | ) | 1,302 | 857 | ||||||||
| Other | 468 | 207 | 675 | |||||||||
| Total non-interest income | 743 | 5,437 | 6,180 | |||||||||
| Non-interest expenses: | ||||||||||||
| Salaries and employee benefits | 3,766 | 5,802 | 9,568 | |||||||||
| Occupancy and equipment | 959 | (35 | ) | 924 | ||||||||
| Other non-interest expenses(2) | 3,268 | 2,430 | 5,698 | |||||||||
| Total non-interest expenses | 7,993 | 8,197 | 16,190 | |||||||||
| Income before income taxes and elimination of inter-segment profit | $ | 3,161 | $ | (2,233 | ) | 928 | ||||||
| Elimination of inter-segment profit | (2,163 | ) | ||||||||||
| Income before income taxes | (1,235 | ) | ||||||||||
| Income tax expense | (1,248 | ) | ||||||||||
| Net income | $ | 13 | ||||||||||
(1) Before elimination of inter-segment profit.
(2) Other non-interest expenses include $945,000 of merger expenses. The full amount of merger expenses was allocated to Envision Bank.
The information above was derived from the internal management reporting system used to measure performance of the segments.
Randolph Bancorp, Inc.
Segment Information
(Dollars in thousands)
(Unaudited)
| For the Six Months Ended June 30, 2021 | ||||||||||||
| Envision Bank | Envision Mortgage | Consolidated Total | ||||||||||
| Net interest income | $ | 8,736 | $ | 1,554 | $ | 10,290 | ||||||
| Provision (credit) for loan losses | (240 | ) | - | (240 | ) | |||||||
| Net interest income after provision for loan losses | 8,976 | 1,554 | 10,530 | |||||||||
| Non-interest income: | ||||||||||||
| Customer service fees | 733 | 53 | 786 | |||||||||
| Gain on loan origination and sale activities, net (1) | - | 18,232 | 18,232 | |||||||||
| Mortgage servicing fees, net | (189 | ) | 1,349 | 1,160 | ||||||||
| Other | 309 | 251 | 560 | |||||||||
| Total non-interest income | 853 | 19,885 | 20,738 | |||||||||
| Non-interest expenses: | ||||||||||||
| Salaries and employee benefits (2) | 3,548 | 12,199 | 15,747 | |||||||||
| Occupancy and equipment | 851 | 514 | 1,365 | |||||||||
| Other non-interest expenses | 2,349 | 3,117 | 5,466 | |||||||||
| Total non-interest expenses | 6,748 | 15,830 | 22,578 | |||||||||
| Income (loss) before income taxes and elimination of inter-segment profit | $ | 3,081 | $ | 5,609 | 8,690 | |||||||
| Elimination of inter-segment profit | (1,499 | ) | ||||||||||
| Income before income taxes | 7,191 | |||||||||||
| Income tax expense | 1,502 | |||||||||||
| Net income | $ | 5,689 | ||||||||||
(1) Before elimination of inter-segment profit.
The information above was derived from the internal management reporting system used to measure performance of the segments.
Randolph Bancorp, Inc.
Reconciliation of GAAP to Non-GAAP Net Income
(in thousands, except per share amounts)
Unaudited
| Quarter Ended | ||||||||||||||||||
| June 30, 2022 | ||||||||||||||||||
| Adjustments | Income Statement Section | Income Before Taxes | Provision (Credit) for Income Taxes | Net Income | Earnings per Share (diluted) | |||||||||||||
| GAAP basis | $ | 83 | $ | (165 | ) | $ | 248 | $ | 0.05 | |||||||||
| Merger expenses(1) | Non-interest expense | 357 | - | 357 | 0.07 | |||||||||||||
| Non-GAAP basis | $ | 440 | $ | (165 | ) | $ | 605 | $ | 0.12 | |||||||||
| Quarter Ended | ||||||||||||||||||
| March 31, 2022 | ||||||||||||||||||
| Adjustments | Income Statement Section | Income (Loss) Before Taxes | Provision (Credit) for Income Taxes | Net Income (Loss) | Earnings (Loss) per Share (diluted) | |||||||||||||
| GAAP basis | $ | (1,318 | ) | $ | (1,083 | ) | $ | (235 | ) | $ | (0.05 | ) | ||||||
| Merger expenses(1) | Non-interest expense | 588 | - | 588 | 0.12 | |||||||||||||
| Reversal of cease use liability | Non-interest expense | (290 | ) | (89 | ) | (201 | ) | (0.04 | ) | |||||||||
| Severance expenses | Non-interest expense | 240 | 74 | 166 | 0.03 | |||||||||||||
| Non-GAAP basis | $ | (780 | ) | $ | (1,098 | ) | $ | 318 | $ | 0.06 | ||||||||
| Quarter Ended | ||||||||||||||||||
| December 31, 2021 | ||||||||||||||||||
| Adjustments | Income Statement Section | Income Before Taxes | Provision for Income Taxes | Net Income | Earnings per Share (diluted) | |||||||||||||
| GAAP basis | $ | 1,116 | $ | 330 | $ | 786 | $ | 0.16 | ||||||||||
| Loss on disposal of fixed assets | Non-interest income | 55 | 16 | 39 | 0.01 | |||||||||||||
| Accrued severance expenses | Non-interest expense | 26 | 7 | 19 | - | |||||||||||||
| Non-GAAP basis | $ | 1,197 | $ | 353 | $ | 844 | $ | 0.17 | ||||||||||
| Quarter Ended | ||||||||||||||||||
| September 30, 2021 | ||||||||||||||||||
| Adjustments | Income Statement Section | Income Before Taxes | Provision for Income Taxes | Net Income | Earnings per Share (diluted) | |||||||||||||
| GAAP basis | $ | 4,356 | $ | 1,230 | $ | 3,126 | $ | 0.62 | ||||||||||
| Accrued severance expenses | Non-interest expense | 139 | 40 | 99 | 0.02 | |||||||||||||
| Other outsourcing expenses | Non-interest expense | 190 | 54 | 136 | 0.03 | |||||||||||||
| Non-GAAP basis | $ | 4,685 | $ | 1,324 | $ | 3,361 | $ | 0.67 | ||||||||||
| Quarter Ended | ||||||||||||||||||
| June 30, 2021 | ||||||||||||||||||
| Adjustments | Income Statement Section | Income Before Taxes | Provision (Credit) for Income Taxes | Net Income | Earnings per Share (diluted) | |||||||||||||
| GAAP basis | $ | 1,415 | $ | (162 | ) | $ | 1,577 | $ | 0.31 | |||||||||
| Loss on disposal of fixed assets | Non-interest expense | 29 | 8 | 21 | - | |||||||||||||
| Accrued severance expenses | Non-interest expense | 145 | 41 | 104 | 0.02 | |||||||||||||
| Other outsourcing expenses | Non-interest expense | 71 | 20 | 51 | 0.01 | |||||||||||||
| Non-GAAP basis | $ | 1,660 | $ | (93 | ) | $ | 1,753 | $ | 0.34 | |||||||||
(1) Merger expenses are not tax deductible and therefore no provision for income taxes is calculated in the table.
Randolph Bancorp, Inc.
Reconciliation of GAAP to Non-GAAP Net Income
(in thousands, except per share amounts)
(Unaudited)
| Year to Date | ||||||||||||||||||
| June 30, 2022 | ||||||||||||||||||
| Adjustments | Income Statement Section | Income (Loss) Before Taxes | Provision (Credit) for Income Taxes | Net Income (Loss) | Earnings (Loss) per Share (diluted) | |||||||||||||
| GAAP basis | $ | (1,235 | ) | $ | (1,248 | ) | $ | 13 | $ | - | ||||||||
| Merger expenses(1) | Non-interest expense | 945 | - | 945 | 0.19 | |||||||||||||
| Reversal of cease use liability | Non-interest expense | (290 | ) | (89 | ) | (201 | ) | (0.04 | ) | |||||||||
| Severance expenses | Non-interest expense | 240 | 74 | 166 | 0.03 | |||||||||||||
| Non-GAAP basis | $ | (340 | ) | $ | (1,263 | ) | $ | 923 | $ | 0.18 | ||||||||
| Year to Date | ||||||||||||||||||
| June 30, 2021 | ||||||||||||||||||
| Adjustments | Income Statement Section | Income Before Taxes | Provision for Income Taxes | Net Income | Earnings per Share (diluted) | |||||||||||||
| GAAP basis | $ | 7,191 | $ | 1,502 | $ | 5,689 | $ | 1.10 | ||||||||||
| Loss on disposal of fixed assets | Non-interest expense | 29 | 8 | 21 | - | |||||||||||||
| Accrued severance expenses | Non-interest expense | 254 | 72 | 182 | 0.04 | |||||||||||||
| Other outsourcing expenses | Non-interest expense | 71 | 20 | 51 | 0.01 | |||||||||||||
| Non-GAAP basis | $ | 7,545 | $ | 1,602 | $ | 5,943 | $ | 1.15 | ||||||||||
(1) Merger expenses are not tax deductible and therefore no provision for income taxes is calculated in the table.
Randolph Bancorp, Inc.
Selected Financial Highlights
(Unaudited)
| At or for the Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
| Return on average assets: (1, 5) | ||||||||||||||||||||
| GAAP | 0.13 | % | (0.12 | %) | 0.41 | % | 1.66 | % | 0.86 | % | ||||||||||
| Non-GAAP (2) | 0.32 | % | 0.16 | % | 0.44 | % | 1.79 | % | 0.96 | % | ||||||||||
| Return on average equity: (1, 6) | ||||||||||||||||||||
| GAAP | 1.11 | % | (0.98 | %) | 3.07 | % | 12.09 | % | 6.11 | % | ||||||||||
| Non-GAAP (2) | 2.70 | % | 1.33 | % | 3.29 | % | 13.00 | % | 6.79 | % | ||||||||||
| Net interest margin (10) | 3.39 | % | 2.86 | % | 3.14 | % | 3.36 | % | 3.01 | % | ||||||||||
| Non-interest income to total income: | ||||||||||||||||||||
| GAAP | 23.29 | % | 29.39 | % | 44.33 | % | 57.69 | % | 56.73 | % | ||||||||||
| Non-GAAP (2) | 23.29 | % | 29.39 | % | 44.63 | % | 57.69 | % | 56.83 | % | ||||||||||
| Profit percentage (9) | ||||||||||||||||||||
| GAAP | 4.49 | % | (16.72 | %) | 9.85 | % | 30.20 | % | 11.55 | % | ||||||||||
| Non-GAAP (2) | 9.05 | % | (9.51 | %) | 10.59 | % | 32.53 | % | 13.56 | % | ||||||||||
| Efficiency ratio: (7) | ||||||||||||||||||||
| GAAP | 95.51 | % | 116.72 | % | 90.15 | % | 69.80 | % | 88.45 | % | ||||||||||
| Non-GAAP (2) | 90.95 | % | 109.51 | % | 89.41 | % | 67.47 | % | 86.44 | % | ||||||||||
| Tier 1 capital to average assets (3) | 12.24 | % | 11.47 | % | 13.23 | % | 13.38 | % | 13.72 | % | ||||||||||
| Non-performing assets as a percentage of total assets (4) | 0.36 | % | 0.37 | % | 0.33 | % | 0.20 | % | 0.86 | % | ||||||||||
| Allowance for loan losses as a percentage of total loans (4) | 1.00 | % | 1.09 | % | 1.14 | % | 1.13 | % | 1.19 | % | ||||||||||
| Allowance for loan losses as a percentage of total loans, excluding SBA PPP Loans (4) | 1.00 | % | 1.09 | % | 1.15 | % | 1.14 | % | 1.22 | % | ||||||||||
| Allowance for loan losses as a percentage of non-performing assets | 237.40 | % | 237.17 | % | 239.67 | % | 427.66 | % | 101.89 | % | ||||||||||
| Allowance for loan losses as a percentage of non-performing loans | 237.40 | % | 237.17 | % | 239.67 | % | 427.66 | % | 101.89 | % | ||||||||||
| Tangible book value per share (8) | $ | 17.18 | $ | 17.07 | $ | 19.73 | $ | 19.71 | $ | 19.16 | ||||||||||
| Outstanding shares | 5,197,680 | 5,180,670 | 5,113,825 | 5,103,619 | 5,254,522 | |||||||||||||||
(1) Annualized for quarterly periods presented.
(2) See page 26 – Reconciliation of GAAP to Non-GAAP Net Income.
(3) Average assets calculated on a quarterly basis for all periods presented.
(4) Total loans exclude loans held for sale but includes net deferred loan costs and fees.
(5) This non-GAAP measure represents net income divided by average total assets.
(6) This non-GAAP measure represents net income divided by average stockholders' equity.
(7) This non-GAAP measure represents total non-interest expenses divided by net interest income and non-interest income.
(8) This non-GAAP measure represents total stockholders' equity, minus intangible assets of $0, $22,000, $24,000, $26,000, and $28,000 at June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and June 30, 2021, respectively, divided by outstanding shares at period end. The Company recorded a full impairment of intangible assets during the second quarter of 2022.
(9) This non-GAAP measure represents net interest income plus noninterest income less non-interest expense divided by net interest income plus non-interest income.
(10) During the fourth quarter of 2021, the Company changed the yield calculation method from the "30/360" to the "Actual/Actual" method. Management believes that the "Actual/Actual" method provides a more consistent and relevant metric for yield performance comparisons.
Randolph Bancorp, Inc.
Selected Financial Highlights
(Unaudited)
| At or for the Six Months Ended | ||||||||
| June 30, | June 30, | |||||||
| 2022 | 2021 | |||||||
| Return on average assets: (1, 5) | ||||||||
| GAAP | 0.00 | % | 1.56 | % | ||||
| Non-GAAP (2) | 0.24 | % | 1.63 | % | ||||
| Return on average equity: (1, 6) | ||||||||
| GAAP | 0.03 | % | 11.01 | % | ||||
| Non-GAAP (2) | 1.99 | % | 11.50 | % | ||||
| Net interest margin (10) | 3.12 | % | 2.98 | % | ||||
| Non-interest income to total income: | ||||||||
| GAAP | 26.26 | % | 65.15 | % | ||||
| Non-GAAP (2) | 26.26 | % | 65.19 | % | ||||
| Profit percentage (9) | ||||||||
| GAAP | (5.85 | %) | 23.54 | % | ||||
| Non-GAAP (2) | 0.00 | % | 24.71 | % | ||||
| Efficiency ratio: (7) | ||||||||
| GAAP | 105.85 | % | 76.46 | % | ||||
| Non-GAAP (2) | 100.00 | % | 75.29 | % | ||||
| Tier 1 capital to average assets (3) | 12.24 | % | 13.72 | % | ||||
| Non-performing assets as a percentage of total assets (4) | 0.36 | % | 0.86 | % | ||||
| Allowance for loan losses as a percentage of total loans (4) | 1.00 | % | 1.19 | % | ||||
| Allowance for loan losses as a percentage of total loans, excluding SBA PPP Loans (4) | 1.00 | % | 1.22 | % | ||||
| Allowance for loan losses as a percentage of non-performing assets | 237.40 | % | 101.89 | % | ||||
| Allowance for loan losses as a percentage of non-performing loans | 237.40 | % | 101.89 | % | ||||
| Tangible book value per share (8) | $ | 17.18 | $ | 19.16 | ||||
| Outstanding shares | 5,197,680 | 5,254,522 | ||||||
(1) Annualized for quarterly periods presented.
(2) See page 27 – Reconciliation of GAAP to Non-GAAP Net Income.
(3) Average assets calculated on an annual basis for all periods presented.
(4) Total loans exclude loans held for sale but includes net deferred loan costs and fees.
(5) This non-GAAP measure represents net income divided by average total assets.
(6) This non-GAAP measure represents net income divided by average stockholders' equity.
(7) This non-GAAP measure represents total non-interest expenses divided by net interest income and non-interest income.
(8) This non-GAAP measure represents total stockholders' equity, minus intangible assets of $0 and $28,000 at June 30, 2022 and June 30, 2021, respectively, divided by outstanding shares at period end.
(9) This non-GAAP measure represents net interest income plus noninterest income less non-interest expense divided by net interest income plus non-interest income.
(10) During the fourth quarter of 2021, the Company changed the yield calculation method from the "30/360" to the "Actual/Actual" method. Management believes that the "Actual/Actual" method provides a more consistent and relevant metric for yield performance comparisons.
For More Information, Contact:
William M. Parent, President and Chief
Executive Officer (617-925-1955)
