HV Bancorp Earnings 2020-09-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

10-Q 1 hvbc-10q_20200930.htm 10-Q hvbc-10q_20200930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to to

Commission file number: 001-37981

HV BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Pennsylvania

46-4351868

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

2005 South Easton Road, Suite 304, Doylestown, Pennsylvania 18901

(Address of Principal Executive Offices and Zip Code)

(267) 280-4000

(Registrant's Telephone Number, Including Area Code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	HVBC	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company” or an “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of November 10, 2020, there were 2,221,745 outstanding shares of the issuer’s common stock.

INDEX

PART I – FINANCIAL INFORMATION				2

		Item 1 – Consolidated Financial Statements – Unaudited		2

			Notes to Unaudited Consolidated Financial Statements	8

		Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations		39

		Item 3 – Quantitative and Qualitative Disclosures about Market Risk		58

		Item 4 – Controls and Procedures		59

	PART II OTHER INFORMATION			59

		Item 1 – Legal Proceedings		59

		Item 1A – Risk Factors		59

		Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		59

		Item 3 – Defaults upon Senior Securities		60

		Item 4 – Mine Safety Disclosures		60

		Item 5 – Other Information		60

		Item 6 – Exhibits		60

SIGNATURES				61

PART I – FINANCIAL INFORMATION

Item 1 – Consolidated Financial Statements – Unaudited

HV BANCORP, INC. AND SUBSIDIARY

Unaudited Consolidated Statements of Financial Condition as of September 30, 2020 and December 31, 2019 (Dollars in thousands, except share and per share data)

	At September 30,			At December 31,
	2020			2019
Assets
Cash and due from banks	$	1,747		$	1,473
Interest-earning deposits with banks		43,229			19,152
Federal funds sold		2,150			—
Cash and cash equivalents		47,126			20,625
Investment securities available-for-sale, at fair value		17,961			21,156
Equity securities		500			500
Loans held for sale, at fair value		100,101			37,876
Loans receivable, net of allowance for loan losses of $1,909 at September 30, 2020 and $1,437 at December 31, 2019		315,823			255,032
Bank-owned life insurance		6,370			6,255
Restricted investment in bank stock		1,714			1,552
Premises and equipment, net		2,813			2,501
Operating lease right-of-use assets		7,867			5,979
Accrued interest receivable		1,278			967
Mortgage banking derivatives		3,820			1,204
Mortgage servicing rights		1,127			—
Other assets		1,239			939
Total Assets	$	507,739		$	354,586

Liabilities and Shareholders' Equity

Liabilities
Deposits	$	371,116		$	283,767
Advances from the Federal Home Loan Bank		26,228			27,000
Advances from the Federal Reserve's Paycheck Protection Program liquidity facility ("PPPLF")		57,714			—
Operating lease liabilities		8,119			6,023
Advances from borrowers for taxes and insurance		1,561			2,138
Deferred income taxes, net		1,009			97
Other liabilities		4,757			1,962
Total Liabilities		470,504			320,987

Shareholders’ Equity
Preferred Stock, $0.01 par value, 2,000,000 shares authorized; no shares issued and outstanding as of June 30, 2020 and December 31, 2019		—			—
Common Stock, $0.01 par value, 20,000,000 shares authorized; 2,270,725 and 2,269,125 shares issued as of September 30, 2020 and December 31, 2019, respectively; 2,222,802 and 2,268,917 shares outstanding as of September 30, 2020 and December 31, 2019, respectively		23			23
Treasury Stock, at cost (47,923 shares at September 30, 2020 and 208 shares at December 31, 2019)		(585	)		(3	)
Additional paid-in capital		20,952			20,740
Retained earnings		18,681			14,973
Accumulated other comprehensive income (loss)		189			(18	)
Unearned Employee Stock Option Plan		(2,025	)		(2,116	)
Total Shareholders' Equity		37,235			33,599
Total Liabilities and Shareholders' Equity	$	507,739		$	354,586

See Notes to the Unaudited Consolidated Financial Statements

HV BANCORP, INC. AND SUBSIDIARY

Unaudited Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2020 and 2019; (Dollars in thousands, except per share data)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2020		2019		2020		2019
Interest Income
Interest and fees on loans	$	3,383	$	2,789	$	9,329	$	7,639
Interest and dividends on investments:
Taxable		101		104		289		325
Nontaxable		7		70		30		214
Interest on mortgage-backed securities and collateralized mortgage obligations		25		53		117		241
Interest on interest-earning deposits and federal funds sold		23		95		128		279
Total Interest Income		3,539		3,111		9,893		8,698
Interest Expense
Interest on deposits		567		877		1,919		2,287
Interest on advances from the Federal Home Loan Bank		104		158		424		319
Interest on advances from the Federal Reserve PPPLF		49		—		68		—
Interest on securities sold under agreements to repurchase		—		1		—		3
Total Interest Expense		720		1,036		2,411		2,609
Net interest income		2,819		2,075		7,482		6,089
Provision for Loan Losses		424		244		985		772
Net interest income after provision for loan losses		2,395		1,831		6,497		5,317
Non-Interest Income
Fees for customer services		41		51		111		119
Increase in cash surrender value of bank-owned life insurance		39		41		115		120
Gain on sale of loans, net		3,044		1,680		7,000		2,977
Gain on sale of available-for-sale securities, net		—		211		141		219
Gain from derivative instruments, net		1,015		177		2,479		1,341
Change in fair value of loans held-for-sale		1,988		40		2,281		346
Other		68		5		157		13
Total Non-Interest Income		6,195		2,205		12,284		5,135
Non-Interest Expense
Salaries and employee benefits		3,720		2,192		8,501		5,696
Occupancy		473		465		1,356		1,171
Federal deposit insurance premiums		69		4		189		119
Data processing related operations		331		214		806		590
Professional fees		186		169		522		450
Other expenses		963		558		2,276		1,420
Total Non-Interest Expense		5,742		3,602		13,650		9,446
Income before income taxes		2,848		434		5,131		1,006
Income Tax Expense		785		101		1,423		203
Net Income	$	2,063	$	333	$	3,708	$	803
Net Income per share:
Basic	$	1.02	$	0.16	$	1.82	$	0.39
Diluted	$	1.02	$	0.16	$	1.82	$	0.39
See Notes to the Unaudited Consolidated Financial Statements

HV BANCORP, INC. AND SUBSIDIARY

Unaudited Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2020 and 2019 (Dollars in thousands)

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2020		2019			2020			2019
Comprehensive Income, Net of Taxes
Net Income	$	2,063	$	333		$	3,708		$	803
Other comprehensive income, net of tax:
Unrealized gain on available-for-sale securities (pre-tax $44 and $66, and $127 and $885, respectively)		31		61			306			685
Reclassification for gains included in income (pre-tax ($(0) and ($211) and ($141) and ($219), respectively) (1)		—		(162	)		(99	)		(168	)
Other comprehensive income (loss)		31		(101	)		207			517
Comprehensive Income	$	2,094	$	232		$	3,915		$	1,320

(1)	Amounts are included in gain on sale of available-for-sale securities on the Consolidated Statements of Income as a separate element within non-interest income. Income tax expense is included in the Consolidated Statements of Income.

See Notes to the Unaudited Consolidated Financial Statements

HV BANCORP, INC. AND SUBSIDIARY

Unaudited Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended September 30, 2020 and 2019 (Dollars in thousands, except per share data)

	Common Stock Shares			Common Stock Amount		Treasury Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Unearned ESOP Shares			Total
Balance, July 1, 2020		2,239,253		$	23	$	(379	)	$	20,893		$	16,618	$	158	$	(2,056	)	$	35,257
ESOP shares committed to be released		—			—		—			(1	)		—		—		31			30
Treasury stock purchased		(16,451	)		—		(206	)		—			—		—		—			(206	)
Stock option expense		—			—		—			15			—		—		—			15
Restricted stock expense		—			—		—			45			—		—		—			45
Net income		—			—		—			—			2,063		—		—			2,063
Other comprehensive income		—			—		—			—			—		31		—			31
Balance, September 30, 2020		2,222,802		$	23	$	(585	)	$	20,952		$	18,681	$	189	$	(2,025	)	$	37,235

	Common Stock Shares		Common Stock Amount		Treasury Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Unearned ESOP Shares			Total
Balance, July 1, 2019		2,268,917	$	23	$	(3	)	$	20,611	$	14,156	$	70		$	(2,177	)	$	32,680
ESOP shares committed to be released		—		—		—			4		—		—			30			34
Treasury stock purchased		—		—		—			—		—		—			—			—
Stock option expense		—		—		—			15		—		—			—			15
Restricted stock expense		—		—		—			46		—		—			—			46
Net income		—		—		—			—		333		—			—			333
Adoption of ASU 2016-02, Leases		—		—		—			—		277		—			—			277
Other comprehensive loss		—		—		—			—		—		(101	)		—			(101	)
Balance, September 30, 2019		2,268,917	$	23	$	(3	)	$	20,676	$	14,766	$	(31	)	$	(2,147	)	$	33,284


	Common Stock Shares			Common Stock Amount		Treasury Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Unearned ESOP Shares			Total
Balance, January 1, 2020		2,268,917		$	23	$	(3	)	$	20,740	$	14,973	$	(18	)	$	(2,116	)	$	33,599
ESOP shares committed to be released		—			—		—			4		—		—			91			95
Treasury stock purchased (47,424 shares)		(47,715	)		—		(582	)		—		—		—			—			(582	)
Stock option exercise		1,600			—		—			24		—		—			—			24
Stock option expense		—			—		—			45		—		—			—			45
Restricted stock expense		—			—		—			139		—		—			—			139
Net income		—			—		—			—		3,708		—			—			3,708
Other comprehensive income		—			—		—			—		—		207			—			207
Balance, September 30, 2020		2,222,802		$	23	$	(585	)	$	20,952	$	18,681	$	189		$	(2,025	)	$	37,235

Common Stock Shares

Common Stock Amount

Treasury Stock

Additional Paid-In Capital

Retained Earnings

Price	14.76	EPS	0
Shares	2	P/E	36
MCap	33	P/FCF	-2
Net Debt	-27	EBIT	4
TEV	6	TEV/EBIT	1
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-09-30	Filed 2020-11-13
10-Q	2020-06-30	Filed 2020-08-13
10-Q	2020-03-31	Filed 2020-05-14
10-Q	2019-09-30	Filed 2019-11-14
10-K	2019-06-30	Filed 2019-09-26
10-Q	2019-03-31	Filed 2019-05-14
10-Q	2018-12-31	Filed 2019-02-14
10-Q	2018-09-30	Filed 2018-11-14
10-K	2018-06-30	Filed 2018-09-27
10-Q	2018-03-31	Filed 2018-05-14
10-Q	2017-12-31	Filed 2018-02-13
10-Q	2017-09-30	Filed 2017-11-13
10-K	2017-06-30	Filed 2017-09-28
10-Q	2017-03-31	Filed 2017-05-12
10-Q	2016-12-31	Filed 2017-02-14
10-Q	2016-09-30	Filed 2016-12-22

8-K	2020-11-06
8-K	2020-08-19
8-K	2020-08-06
8-K	2020-05-20
8-K	2020-05-01
8-K	2020-02-28
8-K	2019-11-20
8-K	2019-11-18
8-K	2019-11-08
8-K	2019-08-21
8-K	2019-08-15
8-K	2019-07-17
8-K	2019-05-03
8-K	2019-04-17
8-K	2018-11-21
8-K	2018-08-17
8-K	2018-06-13
8-K	2018-05-16
8-K	2018-02-21
8-K	2018-02-21
8-K	2018-01-16

EX-31.1	hvbc-ex311_8.htm
EX-31.2	hvbc-ex312_7.htm
EX-32	hvbc-ex32_6.htm

HVBC 10Q Quarterly Report

HV Bancorp Earnings 2020-09-30