Hanover Bancorp Secures $35M in Subordinated Notes to Strengthen Capital Base
Hanover Bancorp, Inc. has completed a private placement of $35 million in subordinated notes. The move aims to strengthen the company's financial position while supporting its banking operations across New York and New Jersey. The notes carry a fixed interest rate of 7.25% until 2031 before adjusting to market conditions.
The subordinated notes were issued with a BBB+ rating from Egan-Jones Ratings Company. They qualify as Tier 2 capital, providing a stable funding source for the company. Proceeds will be used to redeem existing notes and fund general corporate needs, including equity injections into Hanover Community Bank.
Piper Sandler & Co. led the placement as the primary agent, with Hovde Group, LLC serving as co-placement agent. The transaction was finalised under the guidance of Chief Financial Officer Lance P. Burke, who also acts as the company's investor and press contact. Michael Puorro, Chairman and CEO of Hanover Bancorp, highlighted the deal's role in boosting financial flexibility. He noted that the funds would support balance sheet growth, reinforcing the bank's ability to serve its customers. Hanover Community Bank, a subsidiary of the company, operates branches in New York and New Jersey, with its administrative headquarters in Mineola, New York. The notes will pay a fixed 7.25% interest rate until 2031. After that, the rate will reset quarterly, based on the Secured Overnight Financing Rate (SOFR) plus 386 basis points. Hanover Bancorp's stock continues to trade on the NASDAQ under the symbol HNVR.
The $35 million placement provides Hanover Bancorp with additional capital for redeeming debt and expanding operations. The funds will also contribute to the equity base of its subsidiary bank, ensuring continued support for consumer, commercial, and municipal banking services. The company's stock remains listed on the NASDAQ as HNVR.
