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Section 1: 8-K (8-K)

rndb-8k_20200428.htm

 

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 28, 2020

 

Randolph Bancorp, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Massachusetts

001-37780

81-1844402

(State or Other Jurisdiction

of Incorporation)

(Commission
File Number)

(IRS Employer

Identification No.)

10 Cabot Place, Stoughton, Massachusetts 02072

(Address of principal executive offices)

(781) 963-2100

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ]Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of Each Class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.01 per share

RNDB

The NASDAQ Stock Market LLC

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company [X]

 

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

 

 

 

 

 


 

Item 2.02

Results of Operations and Financial Condition.

On April 28, 2020, Randolph Bancorp, Inc. (the “Company”), the holding company for Envision Bank, issued a press release announcing its financial results for the three months ended March 31, 2020. The Company’s press release is included as Exhibit 99.1 to this report.

The information set forth in this Item 2.02 and in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

 

 

 

Exhibit

  

Description

99.1

  

Press release dated April 28, 2020

 

 

 

 


 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

 

 

 

 

 

 

 

Randolph Bancorp, Inc.

 

 

 

 

 

 

 

 

By:

 

/s/ William M. Parent

 

 

 

 

Name:

Title:

 

William M. Parent

President and Chief Executive Officer

Date: April 28, 2020

 

 

 

 

 

 

 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

rndb-ex991_6.htm

Exhibit 99.1

10 Cabot Place, Stoughton, MA 02072

News Release

For Immediate Release

April 28, 2020

For More Information, Contact:

William M. Parent, President and Chief Executive Officer (617-925-1955)

 

 

RANDOLPH BANCORP, INC. ANNOUNCES FIRST QUARTER 2020 FINANCIAL RESULTS

 

STOUGHTON, Massachusetts, April 28, 2020 – Randolph Bancorp, Inc. (the “Company”) (NASDAQ Global Market: RNDB), the holding company for Envision Bank (the “Bank”), today announced a net loss of $818,000, or $0.16 per share, for the first quarter of 2020 compared to a net loss of $51,000, or $0.01 per share, for the first quarter of 2019. Excluding one-time charges of $1,375,000 related to the retirement of senior executives, provision expense of $357,000 related to the COVID-19 pandemic, and operating expenses of $18,000 related to addressing the COVID-19 pandemic, earnings were $932,000, or $0.18 per share, for the first quarter of 2020.

 

At March 31, 2020, total assets amounted to $652.9 million compared to $631.0 million at December 31, 2019, an increase of $21.9 million, or 3.5%. Contributing to asset growth was a $7.1 million increase in net loans, as well as a $13.0 million increase in cash and cash equivalents held in anticipation of funding loans.

 

William M. Parent, President and Chief Executive Officer, stated, “The first quarter of 2020 was a very eventful period for our Company. We are very pleased with the strong performance of our mortgage banking operations during this low interest rate environment. Meeting the demands of our customers, we realized record levels of mortgage banking revenue from loan sales and origination activity during the quarter. We also continued our focused growth in core deposits, growing our non-brokered deposit base at a 13% annualized rate. With the onset of the COVID-19 pandemic, we moved quickly to protect our employees, shifting 90% of them to working remotely while still meeting the service expectations of our customers through augmented business operations and our digital platform. Lastly, we transitioned our leadership with the retirement of Jim McDonough as CEO and Mike Devlin as CFO and we thank them for their trusted stewardship of the Company. With a strong balance sheet and capital position, the Company is ready to manage our continued evolution through whatever challenges lie ahead.”

 

First Quarter Operating Results

Net interest income increased by $47,000, or 1.1%, to $4.4 million for the three months ended March 31, 2020 compared to the same period in the prior year. This increase was primarily due to an increase in average interest-earning assets between periods of $32.2 million, or 5.6%, as the Company continued to leverage its strong capital base. The net interest margin decreased in the first quarter of 2020 to 2.91%, from 3.04% in the first quarter of 2019, due to deposit repricing lagging the decreasing interest-earning asset yields in a declining interest rate environment.

 

The Company recognized a provision for loan losses of $724,000 for the quarter ended March 31, 2020 compared to no provision in the prior year quarter. The provision in the quarter ended March 31, 2020 included a $357,000 increase to the general component of the allowance for loan losses to represent the estimate of probable incurred losses as of March 31, 2020, associated with the impact of COVID-19 pandemic and the measures taken to control its spread on the Company’s loan portfolio. At March 31, 2020, higher loss factors were assigned to each major loan portfolio category based on their level of risk. In addition, the increase in the provision reflected loan portfolio growth of $7.8 million since December 31, 2019 as well as higher risk ratings assigned to certain commercial loans. The allowance for loan losses was 1.04% and


0.90% of total loans at March 31, 2020 and December 31, 2019, respectively, and was 152.6% and 131.4% of non-performing loans at March 31, 2020 and December 31, 2019, respectively.

 

Non-interest income increased $3.1 million to $6.5 million for the quarter ended March 31, 2020 from $3.4 million in the quarter ended March 31, 2019, principally due to an increase of $4.6 million, or 176.0%, in the net gain on loan origination and sale activities. 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 $1.6 million given expectations of higher prepayments.

 

Non-interest expenses increased $3.1 million to $11.0 million in the first quarter ended March 31, 2020 from $7.9 million in the first quarter ended March 31, 2019. Non-interest expenses in the first quarter of 2020 included one-time charges of $1,375,000 related to the retirement of senior executives as well as $18,000 of COVID-19 pandemic-related expenses. Excluding these unusual items, non-interest expenses in the first quarter of 2020 increased $1.7 million compared to the prior year period, principally due to an increase in salaries and employee benefits of $1.3 million. This increase is principally related to higher commissions and incentives associated with increased residential loan production, partially offset by a decrease in bonuses paid to new loan originators hired in the prior year.

 

Professional fees in the first quarter of 2020 increased $137,000 over the prior year period, primarily related to management succession planning costs. Spending on marketing in the first quarter of 2020 was $36,000 less than the prior year period due to fewer marketing campaigns while our communities are subject to a stay-at-home order due to the COVID-19 pandemic. The increase of $224,000 in other non-interest expenses in the first quarter of 2020 was driven mainly by costs related to higher loan production.

 

Income tax expense of $11,000 for the quarter ended March 31, 2020 consists solely of a state income tax provision which is based on the projected effective state tax rate for the year.

 

The Company has a net operating loss carryforward (“NOL”) for federal tax purposes of $12.0 million. Since 2014, the NOL as well as other deferred tax assets have been subject to a full valuation allowance, which totaled $2.3 million at March 31, 2020. We evaluate the tax valuation allowance on a quarterly basis. Based primarily on an assessment of historical operating results, we concluded that the valuation allowance should be maintained at March 31, 2020.

 

Balance Sheet

Total assets were $652.9 million at March 31, 2020 compared to $631.0 million at December 31, 2019, increasing by $21.9 million, or 3.5%. This growth primarily resulted from an increase in cash and cash equivalents of $13.0 million, which reflects the need to fund mortgage loans that are in our production pipeline. In addition, net loans increased $7.1 million, with increases mainly in residential and commercial real estate loans, partially offset by decreases in consumer and commercial and industrial loans. Loans held for sale declined by $4.0 million, to $58.8 million at March 31, 2020 from $62.8 million at December 31, 2019, principally because of high loan sale volumes which reached $215.0 million in the first quarter of 2020.

 

The increase in total assets was funded by deposit growth, driven by an increase in non-brokered deposits of $12.9 million in the first quarter of 2020, representing 12.7% annualized growth. Brokered deposits declined by $4.9 million to $86.0 million at March 31, 2020, from $90.9 million at December 31, 2019. In contrast, FHLB advances increased by $7.6 million to $52.0 million at March 31, 2020, from $44.4 million at December 31, 2019, given that FHLB advances have been a relatively cheaper source of wholesale funding.

 

Total stockholders’ equity was $79.0 million at March 31, 2020 compared to $78.5 million at December 31, 2019. The increase of $494,000 occurred despite net losses of $818,000 in the first quarter of 2020, principally as a result of an increase in the fair value of available-for-sale securities, net of taxes, of $1.6 million and equity adjustments of $947,000 related to the stock benefit plan and employee stock ownership plan. These increases were partially offset by stock repurchases of $1.2 million as the Company repurchased shares during the first quarter of 2020.

 

877-963-2100 • www.envisionbank.com                                                                                       Member FDIC • Member DIF

2


 

COVID-19 Impact

As previously noted, the COVID-19 pandemic impacted our communities in March 2020. Though at March 31, 2020 it was too early to detect increases in delinquencies and non-performing loans because of the pandemic, a provision was made to the allowance for loan losses based on management’s best estimate of the impact of the pandemic on the ability of borrowers to repay their loans as of March 31, 2020. Management will continue to carefully assess the exposure of the portfolios to COVID-19-related factors, economic trends and their effect on credit quality.

 

In response to the pandemic’s effects on our customers, the Company implemented a series of measures through the date of this release, including participation in the Small Business Administration’s Paycheck Protection Program, of which we funded $8.8 million of loans through April 24, 2020, and granting 3-month payment deferrals for residential mortgage, home equity and certain commercial borrowers who were current in their payments. 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 Sectors for statistics on mortgage 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, eight loan production offices located throughout Massachusetts and one loan production office in Southern New Hampshire.

 

Randolph Bancorp, Inc. is the sole member of Envision Bank Foundation, Inc. (the “Foundation”), a nonprofit corporation organized in 2016 to financially support community projects that improve the quality of life in markets served by Envision Bank. Since inception, the Foundation has funded projects focused on support of military veterans and their families, and education.

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 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 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; continued 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, non-interest income to total income, the efficiency ratio, tangible book value per share 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.

877-963-2100 • www.envisionbank.com                                                                                       Member FDIC • Member DIF

3


Randolph Bancorp, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Assets

 

Cash and due from banks

 

$

4,589

 

 

$

4,371

 

Interest-bearing deposits

 

 

16,656

 

 

 

3,881

 

Total cash and cash equivalents

 

 

21,245

 

 

 

8,252

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

490

 

 

 

490

 

Securities available for sale, at fair value

 

 

55,465

 

 

 

57,503

 

Loans held for sale, at fair value

 

 

58,781

 

 

 

62,792

 

Loans, net of allowance for loan losses of $4,996 in 2020 and $4,280 in 2019

 

 

476,226

 

 

 

469,131

 

Federal Home Loan Bank of Boston stock, at cost

 

 

2,873

 

 

 

2,417

 

Accrued interest receivable

 

 

1,397

 

 

 

1,393

 

Mortgage servicing rights, net

 

 

7,488

 

 

 

8,556

 

Premises and equipment, net

 

 

5,667

 

 

 

5,748

 

Bank-owned life insurance

 

 

8,486

 

 

 

8,441

 

Foreclosed real estate, net

 

 

132

 

 

 

-

 

Other assets

 

 

14,636

 

 

 

6,281

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

652,886

 

 

$

631,004

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

Deposits:

 

 

 

 

 

 

 

 

Non-interest bearing

 

$

65,017

 

 

$

61,603

 

Interest bearing

 

 

354,051

 

 

 

344,581

 

Brokered

 

 

85,951

 

 

 

90,858

 

Total deposits

 

 

505,019

 

 

 

497,042

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank of Boston advances

 

 

52,013

 

 

 

44,403

 

Mortgagors' escrow accounts

 

 

2,074

 

 

 

2,052

 

Post-employment benefit obligations

 

 

2,329

 

 

 

2,464

 

Other liabilities

 

 

12,495

 

 

 

6,581

 

Total liabilities

 

 

573,930

 

 

 

552,542

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

 

 

Common stock

 

 

55

 

 

 

56

 

Additional paid-in capital

 

 

50,832

 

 

 

51,127

 

Retained earnings

 

 

30,939

 

 

 

31,757

 

ESOP-Unearned compensation

 

 

(3,897

)

 

 

(3,944

)

Accumulated other comprehensive income (loss), net of tax

 

 

1,027

 

 

 

(534

)

Total stockholders' equity

 

 

78,956

 

 

 

78,462

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

652,886

 

 

$

631,004

 

877-963-2100 • www.envisionbank.com                                                                                       Member FDIC • Member DIF

4


Randolph Bancorp, Inc.

Consolidated Statements of Operations

(Dollars in thousands except per share amounts)

(Unaudited)

 

 

Three Months Ended March 31,

 

 

 

2020

 

 

2019

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Loans

 

$

5,620

 

 

$

5,588

 

Other interest and dividend income

 

 

433

 

 

 

428

 

Total interest and dividend income

 

 

6,053

 

 

 

6,016

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

1,628

 

 

 

1,638

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

4,425

 

 

 

4,378

 

Provision for loan losses

 

 

724

 

 

 

-

 

Net interest income after provision for loan losses

 

 

3,701

 

 

 

4,378

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

Customer service fees

 

 

306

 

 

 

329

 

Gain on loan origination and sale activities, net

 

 

7,144

 

 

 

2,588

 

Mortgage servicing fees, net

 

 

(1,254

)

 

 

319

 

Other

 

 

255

 

 

 

177

 

Total non-interest income

 

 

6,451

 

 

 

3,413

 

Non-interest expenses:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

8,126

 

 

 

5,412

 

Occupancy and equipment

 

 

698

 

 

 

656

 

Professional fees

 

 

405

 

 

 

268

 

Marketing

 

 

152

 

 

 

188

 

Other non-interest expenses

 

 

1,578

 

 

 

1,354

 

Total non-interest expenses

 

 

10,959

 

 

 

7,878

 

Loss before income taxes

 

 

(807

)

 

 

(87

)

Income tax expense (benefit)

 

 

11

 

 

 

(36

)

 

 

 

 

 

 

 

 

 

Net loss

 

$

(818

)

 

$

(51

)

 

 

 

 

 

 

 

 

 

Net loss per share (basic and diluted)

 

$

(0.16

)

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

5,158,294

 

 

 

5,478,544

 


877-963-2100 • www.envisionbank.com                                                                                       Member FDIC • Member DIF

5


Randolph Bancorp, Inc.

Averages Balances/Yields

(Dollars in thousands)

(Unaudited)

 

Average Balance and Yields

 

 

For the Three Months Ended March 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)

$

531,141

 

 

$

5,620

 

 

 

4.23

%

 

$

516,454

 

 

$

5,588

 

 

 

4.33

%

  Investment securities(2) (3)

 

58,799

 

 

 

379

 

 

 

2.58

%

 

 

55,155

 

 

 

404

 

 

 

2.93

%

  Interest-earning deposits

 

18,458

 

 

 

56

 

 

 

1.21

%

 

 

4,550

 

 

 

28

 

 

 

2.46

%

Total interest-earning assets

 

608,398

 

 

 

6,055

 

 

 

3.98

%

 

 

576,159

 

 

 

6,020

 

 

 

4.18

%

Noninterest-earning assets

 

31,774

 

 

 

 

 

 

 

 

 

 

 

25,151

 

 

 

 

 

 

 

 

 

Total assets

$

640,172

 

 

 

 

 

 

 

 

 

 

$

601,310

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Savings accounts

 

134,843

 

 

 

284

 

 

 

0.84

%

 

 

101,976

 

 

 

82

 

 

 

0.32

%

  NOW accounts

 

39,049

 

 

 

51

 

 

 

0.52

%

 

 

40,571

 

 

 

48

 

 

 

0.47

%

  Money market accounts

 

78,394

 

 

 

197

 

 

 

1.01

%

 

 

71,407

 

 

 

228

 

 

 

1.28

%

  Term certificates

 

188,654

 

 

 

893

 

 

 

1.89

%

 

 

163,668

 

 

 

802

 

 

 

1.96

%

Total interest-bearing deposits

 

440,940

 

 

 

1,425

 

 

 

1.29

%

 

 

377,622

 

 

 

1,160

 

 

 

1.23

%

  FHLBB advances

 

47,102

 

 

 

203

 

 

 

1.72

%

 

 

76,153

 

 

 

478

 

 

 

2.51

%

Total interest-bearing liabilities

 

488,042

 

 

 

1,628

 

 

 

1.33

%

 

 

453,775

 

 

 

1,638

 

 

 

1.44

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Noninterest-bearing deposits

 

62,718

 

 

 

 

 

 

 

 

 

 

 

61,748

 

 

 

 

 

 

 

 

 

  Other noninterest-bearing liabilities

 

9,549

 

 

 

 

 

 

 

 

 

 

 

7,632

 

 

 

 

 

 

 

 

 

Total liabilities

 

560,309

 

 

 

 

 

 

 

 

 

 

 

523,155

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

79,863

 

 

 

 

 

 

 

 

 

 

 

78,155

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

$

640,172

 

 

 

 

 

 

 

 

 

 

$

601,310

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

4,427

 

 

 

 

 

 

 

 

 

 

$

4,382

 

 

 

 

 

Interest rate spread(4)

 

 

 

 

 

 

 

 

 

2.65

%

 

 

 

 

 

 

 

 

 

 

2.74

%

Net interest-earning assets(5)

$

120,356

 

 

 

 

 

 

 

 

 

 

$

122,384

 

 

 

 

 

 

 

 

 

Net interest margin(6)

 

 

 

 

 

 

 

 

 

2.91

%

 

 

 

 

 

 

 

 

 

 

3.04

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of interest-earning assets to interest-bearing liabilities

 

124.66

%

 

 

 

 

 

 

 

 

 

 

126.97

%

 

 

 

 

 

 

 

 

 

(1) Includes nonaccruing loan balances and interest received on such loans.

(2) Includes carrying value of securities classified as available-for-sale and FHLB of Boston stock

(3) Includes tax equivalent adjustments for municipal securities, based on an effective tax rate of 21%, of $2,000 and $4,000 for the three months ended March 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.

877-963-2100 • www.envisionbank.com                                                                                       Member FDIC • Member DIF

6


Randolph Bancorp, Inc.

Rate/Volume Analysis

(Dollars in thousands)

(Unaudited)

 

 

Three Months Ended

 

 

March 31, 2020 v. 2019

 

 

Increase (Decrease)

 

 

Total

 

 

Due to Changes in

 

 

Increase

 

 

Volume

 

 

Rate

 

 

(Decrease)

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

  Loans

$

157

 

 

$

(125

)

 

$

32

 

  Investment securities

 

26

 

 

 

(51

)

 

 

(25

)

  Interest-earning deposits

 

48

 

 

 

(20

)

 

 

28

 

           Total interest-earning assets

 

231

 

 

 

(196

)

 

 

35

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

 

34

 

 

 

168

 

 

 

202

 

NOW accounts

 

(2

)

 

 

5

 

 

 

3

 

Money market accounts

 

21

 

 

 

(52

)

 

 

(31

)

Term certificates

 

119

 

 

 

(28

)

 

 

91

 

           Total interest-bearing deposits

 

172

 

 

 

93

 

 

 

265

 

FHLBB advances

 

(151

)

 

 

(124

)

 

 

(275

)

           Total interest-bearing liabilities

 

21

 

 

 

(31

)

 

 

(10

)

 

 

 

 

 

 

 

 

 

 

 

 

Change in net interest income

$

210

 

 

$

(165

)

 

$

45

 


877-963-2100 • www.envisionbank.com                                                                                       Member FDIC • Member DIF

7


Randolph Bancorp, Inc.

Segment Information

(Dollars in thousands)

(Unaudited)

 

 

 

For the Three Months Ended March 31, 2020

 

 

 

Envision Bank

 

 

Envision Mortgage

 

 

Consolidated Total

 

Net interest income

 

$

3,994

 

 

$

431

 

 

$

4,425

 

Provision (credit) for loan losses

 

 

724

 

 

 

-

 

 

 

724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income after provision (credit) for loan losses

 

 

3,270

 

 

 

431

 

 

 

3,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

273

 

 

 

33

 

 

 

306

 

Gain on loan origination and sale activities, net (1)

 

 

-

 

 

 

7,472

 

 

 

7,472

 

Mortgage servicing fees, net

 

 

(87

)

 

 

(1,167

)

 

 

(1,254

)

Other

 

 

140

 

 

 

115

 

 

 

255

 

Total non-interest income

 

 

326

 

 

 

6,453

 

 

 

6,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

3,098

 

 

 

5,028

 

 

 

8,126

 

Occupancy and equipment

 

 

404

 

 

 

294

 

 

 

698

 

Other non-interest expenses

 

 

1,145

 

 

 

990

 

 

 

2,135

 

Total non-interest expenses

 

 

4,647

 

 

 

6,312

 

 

 

10,959

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes and elimination of inter-segment profit

 

$

(1,051

)

 

$

572

 

 

 

(479

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of inter-segment profit

 

 

 

 

 

 

 

 

 

 

(328

)

Loss before income taxes

 

 

 

 

 

 

 

 

 

 

(807

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

11

 

Net loss

 

 

 

 

 

 

 

 

 

$

(818

)

 

(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.

The information above was derived from the internal management reporting system used by management to measure performance of the segments.

 


877-963-2100 • www.envisionbank.com                                                                                       Member FDIC • Member DIF

8


Randolph Bancorp, Inc.

Segment Information

(Dollars in thousands)

(Unaudited)

 

 

 

For the Three Months Ended March 31, 2019

 

 

 

Envision Bank

 

 

Envision Mortgage

 

 

Consolidated Total

 

Net interest income

 

$

4,181

 

 

$

197

 

 

$

4,378

 

Provision for loan losses

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income after credit for loan losses

 

 

4,181

 

 

 

197

 

 

 

4,378

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

295

 

 

 

34

 

 

 

329

 

Gain on loan origination and sale activities, net (1)

 

 

-

 

 

 

2,744

 

 

 

2,744

 

Mortgage servicing fees, net

 

 

(88

)

 

 

407

 

 

 

319

 

Other

 

 

125

 

 

 

52

 

 

 

177

 

Total non-interest income

 

 

332

 

 

 

3,237

 

 

 

3,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

1,539

 

 

 

3,873

 

 

 

5,412

 

Occupancy and equipment

 

 

400

 

 

 

256

 

 

 

656

 

Other non-interest expenses

 

 

954

 

 

 

856

 

 

 

1,810

 

Total non-interest expenses

 

 

2,893

 

 

 

4,985

 

 

 

7,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes and elimination of inter-segment profit

 

$

1,620

 

 

$

(1,551

)

 

 

69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of inter-segment profit

 

 

 

 

 

 

 

 

 

 

(156

)

Loss before income taxes

 

 

 

 

 

 

 

 

 

 

(87

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

(36

)

Net loss

 

 

 

 

 

 

 

 

 

$

(51

)

 

(1) Before elimination of inter-segment profit

The information above was derived from the internal management reporting system used by management to measure performance of the segments.

 


877-963-2100 • www.envisionbank.com                                                                                       Member FDIC • Member DIF

9


Randolph Bancorp, Inc.

Reconciliation of GAAP to Non-GAAP Net Income (Loss)

(in thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Net loss - GAAP basis

 

$

(818

)

 

$

(51

)

 

 

 

 

 

 

 

 

 

Allowance for loans and lease losses related to COVID-19

 

 

357

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Non-interest expense adjustments:

 

 

 

 

 

 

 

 

Retirement salary and benefits compensation

 

 

692

 

 

 

-

 

Accelerated vesting of stock-based compensation

 

 

683

 

 

 

-

 

COVID-19 related expenses

 

 

18

 

 

 

-

 

Net income (loss) - Non-GAAP basis

 

$

932

 

 

$

(51

)

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss) per share (basic and diluted)

 

$

0.18

 

 

$