Randolph Bancorp, Inc. Announces Fourth Quarter and Year-to-Date 2020 Financial Results

Quincy, Massachusetts, UNITED STATES


STOUGHTON, Mass., Feb. 16, 2021 (GLOBE NEWSWIRE) -- Randolph Bancorp, Inc. (the “Company”) (NASDAQ Global Market: RNDB), the holding company for Envision Bank (the “Bank”), today announced net income of $5.3 million, or $1.03 per basic share and $1.01 per diluted share, for the three months ended December 31, 2020 compared to net income of $0.8 million, or $0.16 per basic and diluted share, for the three months ended December 31, 2019. Excluding one-time charges of $294,000 related to the closing of a residential lending office and $69,000 in severance expenses, earnings were $5.6 million, or $1.06 per diluted share for the three months ended December 31, 2020. Net income for the year ended December 31, 2020 was $19.9 million, or $3.89 per basic share and $3.86 per diluted share, compared to net income of $3.4 million, or $0.64 per basic and diluted share, for the year ended December 31, 2019. Excluding one-time charges of $1.4 million related to the retirement of senior executives, operating expenses of $229,000 related to addressing the COVID-19 pandemic, $294,000 in expenses related to the closing of a residential lending office and $69,000 in severance expenses, earnings were $21.5 million, or $4.15 per diluted share, for the year ended December 31, 2020.

At December 31, 2020, total assets amounted to $721.1 million, compared to $723.0 million at September 30, 2020, a decrease of $1.9 million, or 0.3%. An increase in loans held for sale of $31.3 million was offset by a decrease in cash and cash equivalents of $35.3 million relative to the prior quarter.

William M. Parent, President and Chief Executive Officer, stated, “The fourth quarter was another strong quarter in earnings for our Company. We are very pleased with our performance, especially our mortgage banking operations, which maintained high levels of productivity and efficiency throughout our loan origination and sales activities. We continue to identify and implement opportunities to streamline and improve our operational efficiency. In that regard, we have initiated a plan to outsource our residential loan servicing activities, which will improve our customer service experience and our operational and financial efficiency in the year ahead.”

Fourth Quarter Operating Results
Net interest income increased by $649,000, or 14.8%, to $5.0 million for the three months ended December 31, 2020 from $4.4 million the same period in the prior year. This increase was primarily due to an increase in the proportion of non-maturity deposits and a decline in the proportion of term certificates from the same period in the prior year. The average balance of savings accounts in the fourth quarter of 2020 increased $61.3 million, or 50.9%, from the prior year quarter and the average balance of term certificates decreased $87.9 million, or 43.9%, from the prior year quarter, contributing to an 87 basis point decrease in the cost of interest-bearing liabilities. Net interest margin increased in the fourth quarter of 2020 to 3.02%, from 2.88% in the fourth quarter of 2019. The change reflects the shortening and downward pricing of deposit liabilities as well as the forgiveness of Paycheck Protection Program loans (“SBA PPP Loans”) during the quarter of $4.4 million resulting in the accretion of deferred loan origination fees into interest income.

The Company recognized a provision for loan losses of $215,000 for the quarter ended December 31, 2020, largely driven by commercial real estate loan originations. The allowance for loan losses was 1.38% and 0.90% of total loans at December 31, 2020 and December 31, 2019, respectively, and was 94.6% and 131.4% of non-performing assets at December 31, 2020 and December 31, 2019, respectively.

Non-interest income increased $9.5 million, or 155.9%, to $15.6 million for the quarter ended December 31, 2020 from $6.1 million in the quarter ended December 31, 2019, principally due to an increase of $9.2 million in the net gain on loan origination and sale activities. Sold mortgage loans totaled $426.5 million in the fourth quarter of 2020. Mortgage servicing fees increased $243,000 in the quarter ended December 31, 2020, principally due to an impairment of mortgage servicing rights of $284,000 in the quarter ended December 31, 2019.

Non-interest expenses increased $3.4 million to $12.9 million in the quarter ended December 31, 2020 from $9.5 million in the quarter ended December 31, 2019. The increase is principally due to an increase in salaries and employee benefits of $2.3 million, mainly related to higher commissions and incentives associated with increased residential loan production.

Occupancy and equipment expenses increased $339,000 in the quarter ended December 31, 2020 over the prior year period due to the closing of a residential lending office, as the bank consolidates its office space in light of prolonged remote working arrangements, resulting in a charge of $294,000 in the quarter.

Other non-interest expenses comprising professional fees, marketing, FDIC insurance and other non-interest expenses increased by $758,000 in the quarter ended December 31, 2020 versus the prior year period, as elevated mortgage loan production costs were partially offset by a decrease in discretionary marketing expenses. In addition, other non-interest expenses in the quarter ended December 31, 2020 included $584,000 to establish a reserve for unfunded loan commitments.

Year-End Operating Results
Net interest income increased by $1.0 million, or 5.8%, for the year ended December 31, 2020 compared to the same period in the prior year. This increase was driven by a $19.5 million increase in average net-interest earning assets, partially offset by a 5 basis point decline in net interest margin as the reduction in deposit costs lagged the impact of the lower interest rate environment on our interest earning asset yield.

The Company recognized a provision for loan losses of $2.6 million for the year ended December 31, 2020 compared to no provision in the prior year period.

Non-interest income increased $33.7 million, or 155.8%, to $55.4 million for the year ended December 30, 2020 from $21.7 million in the year ended December 31, 2019, principally due to an increase of $35.3 million in the net gain on loan origination and sale activities. Mortgage loans sold were $1.5 billion for the year ended December 31, 2020. The increase in the gain on loan origination and sale activities was partially offset by a decrease in net mortgage servicing fees due to a fair value adjustment for mortgage servicing rights of $2.1 million in the year ended December 31, 2020, given expectations of higher prepayments. The fair value adjustment for mortgage servicing rights was $920,000 in the year ended December 31, 2019.

Non-interest expenses increased $10.4 million, or 28.8%, to $46.3 million for the year ended December 31, 2020 from $36.0 million for the year ended December 31, 2019. Non-interest expenses for the year ended December 31, 2020 included one-time charges of $1.4 million related to the retirement of senior executives, $229,000 of COVID-19 pandemic-related expenses, $294,000 in expenses related to the closing of a residential lending office and $69,000 in severance expenses related to the planned outsourcing of residential loan servicing.

Salaries and employee benefits increased $8.3 million, including one-time charges of $1.4 million for the retirement of senior executives, higher commissions and incentives associated with higher residential loan production, and COVID-19 pandemic-related compensation of $101,000 for front-line and quarantined employees during the year ended December 31, 2020.

Occupancy and equipment expenses increased $762,000 in the year ended December 31, 2020 over the prior year period, partly as a result of increased spending on cleaning and supplies related to the COVID-19 pandemic of $125,000, $294,000 in expenses related to the closing of a residential lending office, as well as increased depreciation of furniture, fixtures and equipment that are expected to be retired as we consolidate our administrative office space in light of prolonged remote working arrangements for certain back-office staff.

Professional fees for the year ended 2020 increased $92,000 over the prior year period, primarily related to management succession planning costs. Spending on marketing during the year ended December 31, 2020 was $278,000 less than in the prior year, due to fewer marketing campaigns while communities were subject to stay-at-home orders. The increase of $1.5 million in other non-interest expenses during the year ended 2020 was driven mainly by costs related to higher mortgage loan production and the establishment of a reserve for unfunded loan commitments.

Income tax expense of $5.5 million for the year ended December 31, 2020 consists of both federal and state income taxes, as the Company’s net operating loss carryforward of $12.0 million from prior years was fully absorbed during the third quarter.

Balance Sheet
At December 31, 2020, total assets amounted to $721.1 million compared to $631.0 million at December 31, 2019, an increase of $90.1 million, or 14.3%. Contributing to asset growth was a $14.5 million increase in net loans to $483.6 million at December 31, 2020 from $469.1 million at December 31, 2019, mainly driven by the issuance of SBA PPP Loans, which had a balance of $10.9 million at December 31, 2020. Cash and cash equivalents increased by $5.5 million during the year to $13.8 million at December 31, 2020 from $8.3 million at December 31, 2019, mainly as a result of strong core growth in deposits and the timing of cash proceeds from loan sales. Loans held for sale increased by $56.3 million to $119.1 million at December 31, 2020 from $62.8 million at December 31, 2019.

The increase in total assets was funded by deposit growth. Non-brokered deposits totaled $496.6 million at December 31, 2020, increasing by $90.4 million, or 22.3%, during the year ended December 31, 2020 from $406.2 million at December 31, 2019. Driving the growth in non-brokered deposits were customers’ receipt of government stimulus and our focus on deposit gathering prior to the onset of the COVID-19 pandemic. Brokered deposits declined by $59.1 million to $31.7 million at December 31, 2020, from $90.9 million at December 31, 2019. Federal Home Loan Bank of Boston (“FHLBB”) and Federal Reserve Bank advances increased by $28.9 million to $73.3 million at December 31, 2020, from $44.4 million at December 31, 2019, as a result of the funding of our SBA PPP Loans and other loans with FHLBB and Federal Reserve Bank advances.

Total stockholders’ equity was $99.8 million at December 31, 2020 compared to $78.5 million at December 31, 2019. The increase of $21.4 million relates mainly to net income in the period of $19.9 million and an increase in the fair value of available-for-sale securities, net of taxes, of $1.5 million. In addition, the Company repurchased $1.7 million of shares during the year ended December 31, 2020, and equity adjustments related to the 2017 Stock Option and Incentive Plan and the employee stock ownership plan amounted to $1.5 million during the period.

COVID-19 Impact
In response to the impact of the COVID-19 pandemic on our customers and our business, the Company implemented a series of measures through the date of this release, including participation in the Small Business Administration’s Paycheck Protection Program, for which we funded $15.4 million of SBA PPP Loans through December 31, 2020, and granting payment deferrals for residential mortgage, home equity and certain commercial borrowers who were current in their payments at the time the deferral was requested. Depending on the circumstances of the borrowers, the forbearance calls for a reduced or full deferral of payment. Please refer to the Loan Payment Deferrals and COVID-19 Most Impacted Sections for statistics on loan payment deferrals and the commercial loan sectors we believe could be exposed to the economic impact of the COVID-19 pandemic.

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 Stoughton, Massachusetts, four loan production offices located throughout Massachusetts and two loan production offices 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. 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, the negative impacts and disruptions of the COVID-19 pandemic and the measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; the length and extent of economic contraction as a result of the COVID-19 pandemic; the effects of continued deterioration in employment levels, 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 consumer behavior due to changing political, business and economic conditions or legislative or regulatory initiatives; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; 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 Securities and Exchange Commission. 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, 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 Sheets
(Dollars in thousands)
(Unaudited)

  December 31,  December 31, 
  2020  2019 
         
Assets 
Cash and due from banks $4,206  $4,371 
Interest-bearing deposits  9,568   3,881 
Total cash and cash equivalents  13,774   8,252 
         
Certificates of deposit  -   490 
Securities available for sale, at fair value  55,366   57,503 
Loans held for sale, at fair value  119,112   62,792 
Loans, net of allowance for loan losses of $6,784 in 2020 and $4,280 in 2019  483,644   469,131 
Federal Home Loan Bank of Boston stock, at cost  3,576   2,417 
Accrued interest receivable  1,562   1,393 
Mortgage servicing rights, net  12,377   8,556 
Premises and equipment, net  4,781   5,748 
Bank-owned life insurance  8,622   8,441 
Foreclosed real estate, net  132   - 
Other assets  18,126   6,281 
         
Total assets $721,072  $631,004 
         
Liabilities and Stockholders' Equity 
Deposits:        
Non-interest bearing $96,731  $61,603 
Interest bearing  399,847   344,581 
Brokered  31,729   90,858 
Total deposits  528,307   497,042 
         
Federal Reserve Bank advances  11,431   - 
Federal Home Loan Bank of Boston advances  61,895   44,403 
Mortgagors' escrow accounts  2,338   2,052 
Post-employment benefit obligations  2,382   2,464 
Other liabilities  14,900   6,581 
Total liabilities  621,253   552,542 
         
Stockholders' Equity:        
Common stock  54   56 
Additional paid-in capital  50,937   51,127 
Retained earnings  51,689   31,757 
ESOP-Unearned compensation  (3,756)  (3,944)
Accumulated other comprehensive income (loss), net of tax  895   (534)
Total stockholders' equity  99,819   78,462 
         
Total liabilities and stockholders' equity $721,072  $631,004 
         

Randolph Bancorp, Inc.
Consolidated Statements of Operations
(Dollars in thousands except per share amounts)
(Unaudited)

  Three Months Ended December 31,  Twelve Months Ended December 31, 
  2020  2019  2020  2019 
Interest and dividend income:                
Loans $5,532  $5,841  $22,212  $23,631 
Other interest and dividend income  296   378   1,376   1,600 
Total interest and dividend income  5,828   6,219   23,588   25,231 
                 
Interest expense  788   1,828   4,721   7,398 
                 
Net interest income  5,040   4,391   18,867   17,833 
Provision (credit) for loan losses  215   144   2,553   - 
Net interest income after provision for loan losses  4,825   4,247   16,314   17,833 
                 
Non-interest income:                
Customer service fees  381   353   1,283   1,407 
Gain on loan origination and sale activities, net  14,620   5,462   54,236   18,900 
Mortgage servicing fees, net  275   32   (1,153)  394 
Other  311   245   1,045   962 
Total non-interest income  15,587   6,092   55,411   21,663 
Non-interest expenses:                
Salaries and employee benefits  8,722   6,382   33,161   24,896 
Occupancy and equipment  1,150   811   3,545   2,783 
Professional fees  389   366   1,277   1,185 
Marketing  231   322   689   967 
FDIC insurance  51   77   187   168 
Other non-interest expenses  2,384   1,532   7,457   5,951 
Total non-interest expenses  12,927   9,490   46,316   35,950 
Income before income taxes  7,485   849   25,409   3,546 
Income tax expense  2,211   21   5,477   118 
                 
Net income $5,274  $828  $19,932  $3,428 
                 
                 
Net income per share:                
Basic $1.03  $0.16  $3.89  $0.64 
Diluted $1.01  $0.16  $3.86  $0.64 
                 
Weighted average shares outstanding:                
Basic  5,135,069   5,248,021   5,126,561   5,383,617 
Diluted  5,244,414   5,248,021   5,163,042   5,383,617 
                 
                 

Randolph Bancorp, Inc.
Average Balances/Yields
(Dollars in thousands)
(Unaudited)

 For the Three Months Ended December 31, 
 2020  2019 
 Average  Interest  Average  Average  Interest  Average 
 Outstanding  Earned/  Yield/  Outstanding  Earned/  Yield/ 
(Dollars in thousands)Balance  Paid  Rate  Balance  Paid  Rate 
Interest-earning assets:                       
Loans (1)$580,002  $5,532   3.82% $554,972  $5,841   4.21%
Investment securities(2) (3) 58,329   290   1.99%  50,290   367   2.92%
Interest-earning deposits 30,573   8   0.10%  5,038   13   1.03%
Total interest-earning assets 668,904   5,830   3.49%  610,300   6,221   4.08%
Noninterest-earning assets 45,015           32,250         
Total assets$713,919          $642,550         
Interest-bearing liabilities:                       
Savings accounts 181,653   142   0.31%  120,343   223   0.74%
NOW accounts 59,005   43   0.29%  38,389   50   0.52%
Money market accounts 75,106   62   0.33%  80,623   241   1.20%
Term certificates 112,260   293   1.04%  200,123   1,068   2.13%
Total interest-bearing deposits 428,024   540   0.50%  439,478   1,582   1.44%
FHLBB and FRB advances 77,584   247   1.27%  50,444   246   1.95%
Total interest-bearing liabilities 505,608   787   0.62%  489,922   1,828   1.49%
Noninterest-bearing liabilities:                       
Noninterest-bearing deposits 94,540           62,674         
Other noninterest-bearing liabilities 13,539           9,337         
Total liabilities 613,687           561,933         
Total stockholders' equity 100,232           80,617         
Total liabilities and stockholders' equity$713,919          $642,550         
Net interest income    $5,043          $4,393     
Interest rate spread(4)         2.87%          2.58%
Net interest-earning assets(5)$163,296          $120,378         
Net interest margin(6)         3.02%          2.88%
                        
Ratio of interest-earning assets to interest-bearing liabilities 132.30%          124.57%        
                        

(1) Includes nonaccruing loan balances and interest received on such loans.
(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 and $2,000 for the three months ended December 31, 2020 and 2019, 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.

Randolph Bancorp, Inc.
Average Balances/Yields
(Dollars in thousands)
(Unaudited)

 For the Year Ended December 31, 
 2020  2019 
 Average  Interest  Average  Average  Interest  Average 
 Outstanding  Earned/  Yield/  Outstanding  Earned/  Yield/ 
(Dollars in thousands)Balance  Paid  Rate  Balance  Paid  Rate 
Interest-earning assets:                       
Loans (1)$561,912  $22,212   3.95% $547,454  $23,632   4.32%
Investment securities(2) (3) 58,233   1,306   2.24%  52,953   1,521   2.87%
Interest-earning deposits 30,277   76   0.25%  5,109   90   1.76%
Total interest-earning assets 650,422   23,594   3.63%  605,516   25,243   4.17%
Noninterest-earning assets 39,396           27,903         
Total assets$689,818          $633,419         
Interest-bearing liabilities:                       
Savings accounts 161,502   831   0.51%  108,483   560   0.52%
NOW accounts 55,396   185   0.33%  39,197   194   0.49%
Money market accounts 71,817   456   0.63%  69,362   955   1.38%
Term certificates 147,655   2,305   1.56%  178,901   3,619   2.02%
Total interest-bearing deposits 436,370   3,777   0.87%  395,943   5,328   1.35%
FHLBB and FRB advances 71,661   943   1.32%  86,724   2,070   2.39%
Total interest-bearing liabilities 508,031   4,720   0.93%  482,667   7,398   1.53%
Noninterest-bearing liabilities:                       
Noninterest-bearing deposits 80,957           62,314         
Other noninterest-bearing liabilities 12,384           8,845         
Total liabilities 601,372           553,826         
Total stockholders' equity 88,445           79,593         
Total liabilities and stockholders' equity$689,817          $633,419         
Net interest income    $18,874          $17,845     
Interest rate spread(4)         2.70%          2.64%
Net interest-earning assets(5)$142,391          $122,849         
Net interest margin(6)         2.90%          2.95%
                        
Ratio of interest-earning assets to interest-bearing liabilities 128.03%          125.45%        
                        

(1) Includes nonaccruing loan balances and interest received on such loans.
(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 $5,000 and $12,000 for the year ended December 31, 2020 and 2019, 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.

Randolph Bancorp, Inc.
Rate/Volume Analysis
(Dollars in thousands)
(Unaudited)

 Three Months Ended 
 December 31, 2020 vs. 2019 
 Increase (Decrease)  Total 
 Due to Changes in  Increase 
 Volume  Rate  (Decrease) 
Interest-earning assets:           
Loans$253  $(562) $(309)
Investment securities 52   (129)  (77)
Interest-earning deposits 16   (21)  (5)
Total interest-earning assets 321   (712)  (391)
Interest-bearing liabilities:           
Savings accounts 83   (164)  (81)
NOW accounts 20   (27)  (7)
Money market accounts (15)  (164)  (179)
Term certificates (358)  (417)  (775)
Total interest-bearing deposits (270)  (772)  (1,042)
FHLBB and FRB advances 106   (104)  2 
Total interest-bearing liabilities (164)  (876)  (1,040)
            
Change in net interest income$485  $164  $649 
            


 Year Ended 
 December 31, 2020 vs. 2019 
 Increase (Decrease)  Total 
 Due to Changes in  Increase 
 Volume  Rate  (Decrease) 
Interest-earning assets:           
Loans$(95) $(1,324) $(1,419)
Investment securities (14)  (200)  (214)
Interest-earning deposits 22   (35)  (13)
Total interest-earning assets (87)  (1,559)  (1,646)
Interest-bearing liabilities:           
Savings accounts 265   5   270 
NOW accounts 11   (21)  (10)
Money market accounts (15)  (484)  (499)
Term certificates (570)  (744)  (1,314)
Total interest-bearing deposits (309)  (1,244)  (1,553)
FHLBB and FRB advances (315)  (812)  (1,127)
Total interest-bearing liabilities (624)  (2,056)  (2,680)
            
Change in net interest income$537  $497  $1,034 
            

Randolph Bancorp, Inc.
Segment Information
(Dollars in thousands)
(Unaudited)

  For the Three Months Ended December 31, 2020 
  Envision Bank  Envision Mortgage  Consolidated Total 
Net interest income $4,265  $775  $5,040 
Provision for loan losses  215   -   215 
             
Net interest income after provision for loan losses  4,050   775   4,825 
             
Non-interest income:            
Customer service fees  353   28   381 
Gain on loan origination and sale activities, net (1)  -   15,062   15,062 
Mortgage servicing fees, net  (100)  375   275 
Other  147   164   311 
Total non-interest income  400   15,629   16,029 
             
Non-interest expenses:            
Salaries and employee benefits  2,178   6,544   8,722 
Occupancy and equipment  465   685   1,150 
Other non-interest expenses  1,942   1,113   3,055 
Total non-interest expenses  4,585   8,342   12,927 
             
Income (loss) before income taxes and elimination of inter-segment profit $(135) $8,062   7,927 
             
Elimination of inter-segment profit          (442)
Income before income taxes          7,485 
             
Income tax expense          2,211 
Net income         $5,274 
             

(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 Three Months Ended December 31, 2019 
  Envision Bank  Envision Mortgage  Consolidated Total 
Net interest income $3,862  $529  $4,391 
Provision for loan losses  144   -   144 
             
Net interest income after credit for loan losses  3,718   529   4,247 
             
Non-interest income:            
Customer service fees  320   33   353 
Gain on loan origination and sale activities, net (1)  -   5,808   5,808 
Mortgage servicing fees, net  (90)  122   32 
Other  132   113   245 
Total non-interest income  362   6,076   6,438 
             
Non-interest expenses:            
Salaries and employee benefits  1,773   4,609   6,382 
Occupancy and equipment  390   421   811 
Other non-interest expenses  1,354   943   2,297 
Total non-interest expenses  3,517   5,973   9,490 
             
Income before income taxes and elimination of inter-segment profit $563  $632   1,195 
             
Elimination of inter-segment profit          (346)
Loss before income taxes          849 
             
Income tax expense          21 
Net income         $828 
             

(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 Year Ended December 31, 2020 
  Envision Bank  Envision Mortgage  Consolidated Total 
Net interest income $16,235  $2,632  $18,867 
Provision for loan losses  2,553   -   2,553 
             
Net interest income after provision for loan losses  13,682   2,632   16,314 
             
Non-interest income:            
Customer service fees  1,180   103   1,283 
Gain on loan origination and sale activities, net (1)  -   55,729   55,729 
Mortgage servicing fees, net  (381)  (772)  (1,153)
Other  465   580   1,045 
Total non-interest income  1,264   55,640   56,904 
             
Non-interest expenses:            
Salaries and employee benefits (2)  9,161   24,000   33,161 
Occupancy and equipment  1,770   1,775   3,545 
Other non-interest expenses  5,228   4,382   9,610 
Total non-interest expenses  16,159   30,157   46,316 
             
Income (loss) before income taxes and elimination of inter-segment profit $(1,213) $28,115   26,902 
             
Elimination of inter-segment profit          (1,493)
Income before income taxes          25,409 
             
Income tax expense          5,477 
Net income         $19,932 
             

(1) Before elimination of inter-segment profit.
(2) Salaries and benefits include the severance and vested stock acceleration costs related to the retirement of the CEO and CFO of the Bank. The total cost of this event was $1.38 million, of which $1.03 million was allocated to the Bank segment and the remainder, $344,000, was allocated to the mortgage segment.


Randolph Bancorp, Inc.
Segment Information
(Dollars in thousands)
(Unaudited)

  For the Year Ended December 31, 2019 
  Envision Bank  Envision Mortgage  Consolidated Total 
Net interest income $15,985  $1,848  $17,833 
Provision for loan losses  -   -   - 
             
Net interest income after credit for loan losses  15,985   1,848   17,833 
             
Non-interest income:            
Customer service fees  1,268   139   1,407 
Gain on loan origination and sale activities, net (1)  -   19,851   19,851 
Mortgage servicing fees, net  (363)  757   394 
Other  596   366   962 
Total non-interest income  1,501   21,113   22,614 
             
Non-interest expenses:            
Salaries and employee benefits  7,065   17,831   24,896 
Occupancy and equipment  1,527   1,256   2,783 
Other non-interest expenses  4,789   3,482   8,271 
Total non-interest expenses  13,381   22,569   35,950 
             
Income (loss) before income taxes and elimination of inter-segment profit $4,105  $392   4,497 
             
Elimination of inter-segment profit          (951)
Income before income taxes          3,546 
             
Income tax expense          118 
Net income         $3,428 
             

(1)   Before elimination of inter-segment profit.

Randolph Bancorp, Inc.
Reconciliation of GAAP to Non-GAAP Net Income
(in thousands)
(Unaudited)

  Quarter Ended 
  December 31, 2020 
  Income Before
Taxes
  Provision for
Income Taxes
  Net Income  Earnings per
Common Share
(diluted)
 
GAAP basis $7,485  $2,211  $5,274  $1.01 
Non-interest expense adjustments:                
Residential lending office closure  294   63   231  $0.04 
Accrued severance expenses  69   15   54  $0.01 
Non-GAAP basis $7,848  $2,289  $5,559  $1.06 
                 
  December 31, 2019 
  Income Before
Taxes
  Provision for
Income Taxes
  Net Income  Earnings per
Common Share
(diluted)
 
GAAP basis $849  $21  $828  $0.16 
                 
Non-GAAP basis $849  $21  $828  $0.16 
                 
  Year-to-Date 
  December 31, 2020 
  Income Before
Taxes
  Provision for
Income Taxes
  Net Income  Earnings per
Common Share
(diluted)
 
GAAP basis $25,409  $5,477  $19,932  $3.86 
Non-interest expense adjustments:                
Retirement salary and benefits compensation  692   149   543   0.11 
Accelerated vesting of stock-based compensation  683   147   536   0.10 
COVID-19 related expenses  229   49   180   0.03 
Residential lending office closure  294   63   231   0.04 
Accrued severance expenses  69   15   54   0.01 
Non-GAAP basis $27,376  $5,900  $21,476  $4.15 
                 
  December 31, 2019 
  Income Before
Taxes
  Provision for
Income Taxes
  Net Income  Earnings per
Common Share
(diluted)
 
GAAP basis $3,546  $118  $3,428  $0.64 
                 
Non-GAAP basis $3,546  $118  $3,428  $0.64 
                 

Randolph Bancorp, Inc.
Selected Financial Highlights
(Unaudited)

  At or for the  At or for the 
  Three Months Ended December 31,  Twelve Months Ended December 31, 
  2020  2019  2020  2019 
                 
Return on average assets: (1, 5)                
GAAP  2.95%  0.52%  2.89%  0.54%
Non-GAAP (2)  3.11%  0.52%  3.11%  0.54%
                 
Return on average equity: (1, 6)                
GAAP  21.05%  4.11%  22.54%  4.31%
Non-GAAP (2)  22.18%  4.11%  24.28%  4.31%
                 
Net interest margin  3.02%  2.88%  2.90%  2.95%
                 
Non-interest income to total income:                
GAAP  75.57%  49.48%  74.60%  46.20%
                 
Efficiency ratio: (7)                
GAAP  62.67%  90.53%  62.35%  91.02%
Non-GAAP (2)  60.91%  90.53%  59.71%  91.02%
                 
Tier 1 capital to average assets (3)  13.85%  11.30%  13.85%  11.30%
                 
Non-performing assets as a percentage of total assets (4)  1.01%  0.52%  1.01%  0.52%
                 
Allowance for loan losses as a percentage of total loans (4)  1.38%  0.90%  1.38%  0.90%
Allowance for loan losses as a percentage of total loans, excluding SBA PPP Loans (4)  1.41%  0.90%  1.41%  0.90%
                 
Allowance for loan losses as a percentage of non-performing assets  94.58%  131.37%  94.58%  131.37%
Allowance for loan losses as a percentage of non-performing loans  92.87%  131.37%  92.87%  131.37%
                 
Tangible book value per share (8) $18.16  $14.06  $18.16  $14.06 
Outstanding shares  5,495,514   5,576,855   5,495,514   5,576,855 

(1) Annualized for quarterly periods presented.
(2) See page 14 – 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 $33,000, divided by outstanding shares at period end.

Randolph Bancorp, Inc.
COVID-19 Supplemental Disclosure
(Unaudited)

Loan Payment Deferrals

  As of January 18, 2021 
  Commercial loans  Residential
loans
  Residential
loans serviced
for others
 
    
  (Dollars in thousands) 
Balance outstanding $175,046  $364,041  $1,786,888 
             
COVID-19 related loan payment deferrals: (1)            
Loans in COVID-19-related loan payment deferral $6,544  $5,033  $18,672 
Loans in deferral as a percentage of category loans  3.7%  1.4%  1.0%
Loans with suspended payment $6,544  $4,535  $10,342 
Loans with reduced payment  -   498   8,330 
             
Loans which obtained a COVID-19-related payment deferral but            
have since resumed payment $31,845  $13,796  $49,846 
Loans reinstated (borrower paid any unpaid principal and interest)  -   2,732   8,318 
Loans on a repayment plan  -   -   1,363 
Loans which resumed payment but deferred principal and/or            
interest payments to maturity (2)  27,029   8,451   34,896 
Loans which were paid off completely  4,816   1,687   3,903 
Other loans  -   926   1,366 

(1)   Includes commercial loans that have been approved for loan payment deferral but for which documentation is closing or pending.
(2)   Includes commercial loan for which maturity was extended.

Randolph Bancorp, Inc.
COVID-19 Supplemental Disclosure
(Unaudited)

COVID-19 Highly Impacted Sectors

  As of December 31, 2020 
  Exposure Balance  Exposure by Risk Weighting     
                          Balance 
      Real  Commercial              with 
      Estate  &              Deferred 
Industry (1) Total  Secured  Industrial  Construction  Pass  Criticized  Payments 
  (Dollars in thousands) 
Group home/care facility $1,091   $1,091   $-   $-   $1,091  $-  $- 
Hotels/hospitality  9,679    9,604    75    -    75   9,604   3,543 
Restaurants/food service  2,786    1,582    1,204    -    2,786   -   - 
Retail/shopping center  20,134    16,472    -    3,662    17,446   2,687   2,058 
Other sectors (2)  10,720    9,990    130    600    9,768   953   640 
Total loans in COVID-19 impacted sectors $44,410   $38,739   $1,409   $4,262   $31,166  $13,244  $6,241 
Percentage of commercial loans outstanding 25.3%  26.9%  7.0%  36.5%             
Commercial loans outstanding $175,822   $143,893   $20,259   $11,670              
Loan to value secured by real estate (3)     45.5%      57.3%             
                             
                             

(1)   This disclosure focuses on industries with balances that are significant to the portfolio at December 31, 2020 and omits industries affected by the COVID-19 pandemic (oil and gas, transportation, etc.) to which the Company has minimal or no exposure. This disclosure also excludes SBA PPP Loans, given their government guarantee.
(2)   Includes customers operating in various sectors which have been impacted by COVID-19.
(3)   Loan to value secured by real estate equals the exposure balance divided by the most recent appraised value.

For More Information, Contact:
William M. Parent,
President and Chief Executive Officer
(617-925-1955)