Randolph Bancorp, Inc. Announces Second Quarter 2022 Financial Results

Jul 27th, 2022 8:17 EST

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 ResultsNet 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 ResultsNet 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 SheetAt 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 FinancialOn 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 StatementsCertain 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 MeasuresThe 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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