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Analogy 1:

Think of it as the local, community-focused equivalent of a large regional bank like PNC Bank or U.S. Bank, tailored for its specific New York markets.

Analogy 2:

It's like a neighborhood-specific version of a national bank such as Bank of America or Chase, providing comprehensive banking services with a strong emphasis on local relationships and community engagement.

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• Deposit Accounts: Hanover Bancorp offers various deposit products including checking, savings, money market, and certificates of deposit to individuals and businesses.
• Lending Services: The company provides a range of loans, primarily focusing on commercial real estate, residential mortgages, and commercial & industrial loans.
• Treasury Management Services: For businesses, Hanover Bancorp delivers solutions such as remote deposit capture, ACH services, and wire transfers to facilitate efficient cash management.

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Hanover Bancorp (symbol: HNVR) operates as a bank holding company, primarily providing financial services through its subsidiary, Hanover Bank. As such, it sells directly to a diverse base of customers rather than to other companies. Its major customer categories include:

• Individual/Retail Customers: These include individuals and families seeking personal banking services such as checking and savings accounts, certificates of deposit (CDs), mortgages, home equity loans, and various personal loans.
• Small to Medium-Sized Business (SMB) Customers: This category encompasses local and regional businesses requiring business checking and savings accounts, lines of credit, term loans, Small Business Administration (SBA) loans, and treasury management services.
• Commercial Real Estate (CRE) Customers: This segment includes developers, investors, and property owners seeking financing for commercial properties, including multi-family residential, office, retail, and industrial properties.

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Names of suppliers:

• KPMG LLP

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Michael P. Puorro, Chairman & Chief Executive Officer

Mr. Puorro has over 35 years of banking experience, developing and leading successful financial institutions. He was appointed CEO of Hanover Bancorp in January 2016 and also became head of the Bank's holding company in 2016. Under his leadership, Hanover Bancorp completed its Initial Public Offering (IPO) in May 2022. Prior to Hanover, Mr. Puorro served as Co-Chairman and President of Madison National Bancorp, Inc. and Madison National Bank, where he was part of an entrepreneurial team that raised $32.5 million in capital from a private placement. He also held positions as Executive Vice President and Chief Financial Officer at New York Community Bancorp, Inc., a thrift with over $24 billion in assets, and Roslyn Bancorp, Inc., where he helped coordinate growth from under $1 billion to over $12 billion in assets.

Lance P. Burke, Executive Vice President & Chief Financial Officer

Mr. Burke joined Hanover Bancorp in May 2021, bringing over 20 years of experience in the banking industry with expertise in accounting, operations, and mergers and acquisitions. He is responsible for all aspects of financial management for the Company and the Bank, as well as investor relations and facilities management. Before joining Hanover, Mr. Burke was Senior Vice President & Controller of Dime Bank (formerly BNB Bank) for 12 years, where he was instrumental in three acquisitions and one merger of equals. He began his career in banking at New York Community Bank, serving as Assistant Vice President of Financial Reporting.

Mac Wilcox, President

Mr. Wilcox serves as the President of Hanover Bancorp.

Joseph F. Burns, Executive Vice President & Chief Lending Officer

Mr. Burns is the Executive Vice President and Chief Lending Officer at Hanover Bancorp.

Kevin Corbett, Executive Vice President & Chief Credit Officer

Mr. Corbett holds the position of Executive Vice President and Chief Credit Officer at Hanover Bancorp.

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The key risks to Hanover Bancorp's business include its vulnerability to interest rate fluctuations, credit quality challenges within its loan portfolios, and the inherent difficulties of operating in a highly competitive and regulated industry.

1. Interest Rate Risk and Net Interest Margin Vulnerability: Hanover Bancorp operates with a liability-sensitive balance sheet, meaning its net interest margin (NIM) is particularly susceptible to changes in interest rates. While this structure can benefit from falling deposit costs, it can limit profitability when rates are rising or remain elevated. The company's NIM of 2.76% in Q2 2025 lags behind the industry average, and elevated deposit costs continue to pressure its NIM.
2. Credit Quality Risks: The company faces ongoing pressures related to the credit quality of its loan portfolios. Specifically, delinquencies in consumer loans and potential stress within the Commercial Real Estate (CRE) office sector could negatively impact its margins. A significant portion of its CRE and multi-family loan portfolios are scheduled to reset or mature in 2025–2026, which, while mitigating immediate refinancing risks, could affect NIM expansion in a prolonged low-rate environment.
3. Operating in a Highly Competitive and Regulated Environment: Hanover Bancorp operates within a fiercely competitive market, facing challenges from both traditional and emerging financial service providers. Additionally, as a financial institution, it is subject to a complex and evolving regulatory framework. Changes in these laws and regulations, or the inability to adapt to them, could adversely affect its business operations, financial condition, and results.

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The increasing prominence of fintech companies and neobanks represents a clear emerging threat to Hanover Bancorp. These digital-first financial institutions and service providers leverage advanced technology to offer banking, lending, and payment solutions with often superior user experiences, lower fees, and greater convenience compared to traditional brick-and-mortar banks. This trend directly challenges Hanover Bancorp's ability to attract and retain deposits and loan customers, as consumers increasingly opt for digital channels and specialized financial products that bypass traditional banking relationships, similar to how streaming services disrupted physical video rentals or ride-sharing apps impacted traditional taxi services.

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Hanover Bancorp (symbol: HNVR) primarily operates as a community commercial bank, offering a comprehensive suite of consumer, commercial, and municipal banking products and services. Its core offerings include residential and commercial real estate mortgages, commercial and industrial loans, and Small Business Administration (SBA) loans. The bank's operations are concentrated in the Long Island, greater New York metropolitan area, and Freehold, New Jersey regions of the United States.

Based on available data, the addressable markets for Hanover Bancorp's main products and services in the U.S. are as follows:

• U.S. Residential Mortgage Market: The total outstanding balances for residential mortgages in the United States reached approximately $12.85 trillion in 2023.
• U.S. Commercial Real Estate (CRE) Mortgage Market: The total outstanding commercial and multifamily mortgage debt in the U.S. increased to $4.79 trillion in the fourth quarter of 2024.
• U.S. Small Business Lending Market: The small business loan market in the U.S. was valued at an estimated $2.5 trillion in 2023.

Additionally, the U.S. community banking market, which encompasses Hanover Bancorp's broader operational scope, was valued at approximately $6.35 billion in 2024.

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Hanover Bancorp (HNVR) is expected to drive future revenue growth over the next 2-3 years through several key strategic initiatives and market dynamics:

1. Loan Diversification and Growth in Residential, C&I, and SBA Lending: Hanover Bancorp is actively focusing on diversifying its loan portfolio, particularly by increasing its emphasis on residential loan products, Commercial & Industrial (C&I) loans, and Small Business Administration (SBA) loans. The company has been strategically managing its Commercial Real Estate (CRE) portfolio, reducing its concentration, and selectively pursuing relationship-based CRE lending opportunities while prioritizing growth in these other loan categories. For instance, the loan portfolio grew to $1.99 billion in 2024, with growth concentrated in residential, SBA, and C&I loans.
2. Expansion of C&I and Municipal Banking Verticals: The company has demonstrated success in expanding its C&I and municipal banking segments. The C&I Banking Team and the Hauppauge Business Banking Center have significantly increased deposits and loan originations. This focus on C&I and municipal banking verticals is a key contributor to overall deposit growth and is expected to continue supporting revenue expansion.
3. Improved Net Interest Margin (NIM) Driven by Interest Rate Environment: Hanover Bancorp has experienced an expansion in its net interest margin, which has been positively impacted by recent reductions in the Federal Funds effective rate and the bank's liability-sensitive balance sheet. Management anticipates that further rate decreases by the Federal Open Market Committee (FOMC) will continue to positively affect lending opportunities and contribute to margin expansion.
4. Enhanced Digital Banking Capabilities and Operational Efficiencies: The company's transition to FIS Horizon, a new core processing system, is a significant strategic initiative aimed at enhancing digital banking capabilities and improving operational efficiencies. This conversion is expected to position the bank to compete more effectively, meet customer expectations for technological capabilities, and realize operational savings, all of which should support continued growth and profitability.
5. Growth in Non-Interest Income: Hanover Bancorp has reported record non-interest income in recent quarters, indicating a strategic focus on increasing fee-based revenue. This diversification of revenue streams beyond traditional interest income is a driver for overall revenue growth and stability.

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Share Repurchases

• A Share Repurchase Program was approved on October 5, 2023.
• Under this program, Hanover Bancorp is authorized to repurchase up to 366,050 shares, representing approximately 5% of its outstanding common stock.

Share Issuance

• Diluted weighted average shares outstanding increased from approximately 5.1 million in September 2021 to around 7.3 million in September 2023.
• As of December 18, 2023, there were 7,333,895 shares of common stock outstanding.
• The number of shares outstanding increased by 0.77% in the last 12 months (prior to late 2024/early 2025).

Capital Expenditures

• Capital expenditures for the last 12 months (prior to late 2024/early 2025) were $142,000.
• The company opened a new Hauppauge Branch in May 2023.
• The Rockefeller Center Branch was acquired as part of the Savoy transaction.