Randolph Bancorp, Inc. Announces Second Quarter 2022 Financial Results

Quincy, Massachusetts, UNITED STATES


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) 



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