Hanover Bancorp (HNVR) has laid out its FY 2025 scorecard with fiscal third quarter revenue of US$16.7 million and EPS of US$0.47, alongside trailing twelve month revenue of US$68.0 million and EPS of US$1.52, giving investors a clear read on recent earnings power. Over the past year, the company has seen revenue move from US$59.8 million to US$68.0 million on a trailing basis, while trailing EPS shifted from US$1.66 to US$1.52. This sets the backdrop for a conversation about how its 16.2% net margin and current earnings profile line up with the risks and rewards in the story.
See our full analysis for Hanover Bancorp.With the latest results on the table, the next step is to see how these margins and earnings trends compare with the widely held narratives around Hanover Bancorp and where investors may want to update their views.
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Cost efficiency swings with 66.7% cost to income
- Hanover Bancorp reported a cost to income ratio of 66.71% in FY 2025 Q3 compared with 68.73% in Q2 and 87.1% in Q1. This shows how much of its US$16.7 million in Q3 revenue is being absorbed by operating expenses versus earlier in the year.
- What stands out for a bullish view is that this lower cost to income ratio in Q3 sits alongside net income of US$3.4 million and basic EPS of US$0.47. This supports the idea that the bank can convert revenue into profit when costs are kept in check.
- Compared with Q1 net income of US$1.5 million on higher revenue of US$17.8 million, Q3 shows more earnings coming through to the bottom line even on slightly lower revenue.
- Trailing 12 month net profit of US$11.0 million on US$68.0 million of revenue also lines up with the 16.2% net margin. This suggests that periods of better cost control like Q3 matter for the bullish argument about earnings quality.
Loan book steady while non performing loans rise to US$20.5 million
- Total loans were US$1.99b at FY 2025 Q3 versus US$1.97b in Q2 and US$1.96b in Q1, while non performing loans moved from US$11.7 million in Q1 to US$17.3 million in Q2 and US$20.5 million in Q3.
- Bears argue that asset quality can be a pressure point for a regional bank, and the step up in non performing loans through the year gives them concrete figures to point to even though total loans have stayed close to US$2.0b.
- The trailing 12 month view also reflects this, with non performing loans listed at US$20.5 million alongside net income of US$11.0 million, so credit issues are a visible part of the recent profile.
- Critics highlight that this rise in non performing loans occurs at the same time as trailing net margin eased from 19.2% a year earlier to 16.2%. They see this as a sign that profitability and credit quality are both under watch.
Margins, valuation and high quality earnings story
- The bank’s net interest margin in FY 2025 has been reported at 2.68% in Q1, 2.76% in Q2 and 2.74% in Q3, while the trailing net profit margin is 16.2% and the shares trade on a trailing P/E of 15.5x versus a DCF fair value of US$26.21 and a share price of US$23.10.
- Supporters of a more positive narrative highlight that earnings are described as high quality and the share price sits about 11.9% below the DCF fair value. At the same time, the same data also show negative earnings growth over the past year and a net margin that has slipped from 19.2% to 16.2%, which keeps the discussion balanced rather than one sided.
- The 15.5x P/E is higher than both the 12.4x peer average and the 11.8x US Banks industry average, so investors are paying more per dollar of trailing earnings even though the latest year did not deliver earnings growth.
- On the other hand, trailing 12 month EPS of US$1.52 alongside net income of US$11.0 million and no substantial insider selling in the past three months fit with the idea that the quality of those earnings, rather than just their growth rate, is what some investors focus on.
Next Steps
Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Hanover Bancorp's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.
See What Else Is Out There
Hanover Bancorp’s rising non performing loans, combined with a lower net margin and a P/E above peers, indicates that both credit quality and valuation are pressure points.
If you want more comfort around asset quality and balance sheet resilience, use our solid balance sheet and fundamentals stocks screener (390 results) today to focus on companies built to handle stress more confidently.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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