Randolph Bancorp, Inc. Announces Fourth Quarter 2021 Financial Results and Declares Quarterly and Special Cash Dividends

Wednesday, 26. January 2022 01:12

QUINCY, Mass., Jan. 25, 2022 (GLOBE NEWSWIRE) -- Randolph Bancorp, Inc. (NASDAQ: RNDB) Randolph Bancorp, Inc. (the “Company”) (NASDAQ Global Market: RNDB), the holding company for Envision Bank (the “Bank”), today announced net income of $786,000, or $0.17 per basic share and $0.16 per diluted share, for the three months ended December 31, 2021 compared to net income of $3.1 million, or $0.64 per basic and $0.62 per diluted share, for the three months ended September 30, 2021 and net income of $5.3 million, or $1.03 per basic share and $1.01 per diluted share, for the three months ended December 31, 2020. Excluding one-time events of $26,000 in severance expenses and $55,000 in loss of disposal of fixed assets, net income on a non-GAAP basis was $844,000, or $0.17 per diluted share, for the three months ended December 31, 2021. Excluding one-time events of $139,000 in severance expenses and $190,000 in other outsourcing expenses, net income on a non-GAAP basis was $3.4 million, or $0.67 per diluted share, for the three months ended September 30, 2021. Excluding one-time charges of $294,000 related to the closing of a residential lending office and $69,000 in severance expenses, net income on a non-GAAP basis for the three months ended December 31, 2020 was $5.6 million, or $1.06 per diluted share.

For the year ended December 31, 2021, net income was $9.6 million, or $1.96 per basic share and $1.88 per diluted share, compared to net income of $19.9 million, or $3.89 per basic and $3.86 per diluted share, for the year ended December 31, 2020. Net income on a non-GAAP basis, excluding certain nonrecurring items, was $10.1 million, or $1.99 per diluted share, for the year ended December 31, 2021, compared to net income on a non-GAAP basis, excluding other certain nonrecurring items, of $21.5 million, or $4.15 per diluted share, for the year ended December 31, 2020.

The Company announced that its Board of Directors declared a regular quarterly dividend of $0.15 per common share and a one-time special dividend of $2.00 per share. Both dividends will be payable on or about February 22, 2022, to shareholders of record as of February 8, 2022.

The Company also announced a modification to its stock repurchase program (the “Program”), previously announced on October 26, 2021. The modification changes the Program so that the Company may purchase up to 62,000 shares, or approximately 1% of the Company’s outstanding common stock. The Company repurchased 4,337 shares through the Program as of December 31, 2021.

At December 31, 2021, total assets amounted to $803.3 million, compared to $751.1 million at September 30, 2021, an increase of $52.2 million, or 6.9%. Total loans decreased by $20.2 million, or 3.5%, to $549.8 million at December 31, 2021 from $570.0 million at September 30, 2021, and loans held for sale decreased by $30.6 million to $44.8 million at December 31, 2021 from $75.4 million at September 30, 2021. Cash and cash equivalents increased to $115.4 million at December 31, 2021, an increase of $102.6 million, or 796.6% from $12.9 million as of September 30, 2021, as a result of deposit growth of $64.7 million in the quarter, a 1-4 family residential portfolio loan sale of $35.6 million during the quarter, and the decrease in loans held for sale of $30.6 million. Compared to December 31, 2020, total assets grew $82.2 million, or 11.4%, from $721.1 million. The growth from the prior year period was driven by an increase in total loans of $60.5 million, or 12.4%, and cash and cash equivalents of $101.7 million, or 738.2%, partially offset by a decrease in loans held for sale of $74.3 million, or 62.4%.

William M. Parent, President and Chief Executive Officer, stated, “The fourth quarter was a transitional quarter as our mortgage banking business continued to be negatively impacted by declining origination volumes. During the quarter, we were able to grow our commercial lending business and increase and extend our low-cost funding, while also repositioning our fixed-rate residential mortgage loan portfolio. This significantly increased our liquidity and prospects for improving net interest margin in anticipation of loan growth into a higher interest rate environment in 2022. We are continuing to transition our mortgage banking operations and in the first quarter of 2022 initiated a reduction in force, reflecting lower mortgage loan production levels. Our decision to declare a special dividend that returns approximately $10 million in capital to our shareholders, reflects the impact of low stock trading volume on the pace of our stock buybacks and our commitment to actively manage our strong capital position. We look forward to 2022 with strong prospects for growth in our community bank that should generate continued operating leverage and stronger recurring earnings.”

Fourth Quarter Operating Results
Net interest income decreased by $282,000, or 4.7%, to $5.7 million for the three months ended December 31, 2021 from $6.0 million for the three months ended September 30, 2021. This decrease was primarily due to a 7.4% decrease in average balances of 1-4 family residential loans, as a result of the $35.6 million sale from portfolio, a $160,000 decline in fee accretion earned from the Small Business Administration’s Paycheck Protection Program (“SBA PPP”) to $158,000 in the fourth quarter of 2021 and a $99,000 decrease in interest income from the downgrade of three loans that were previously granted COVID-19 related forbearances to nonaccrual status. The yield earned on interest-earning assets decreased by 23 basis points from the prior quarter, and the rate paid on interest-bearing liabilities decreased by 3 basis points from the prior quarter. Accordingly, the net interest margin decreased by 22 basis points, to 3.14% in the fourth quarter from 3.36% in the third quarter.

Net interest income increased by $654,000, or 13.0%, to $5.7 million for the three months ended December 31, 2021, from $5.0 million in the same period in the prior year. Relative to the prior year quarter, the net interest margin increased by 14 basis points to 3.14%, from 3.00%. The improvement reflects average loan growth of $44.8 million from the prior year quarter, while the cost of interest-bearing liabilities decreased by 27 basis points.

The Company recognized a credit for loan losses of $108,000 for the quarter ended December 31, 2021, driven by changes in the qualitative factors related to improving commercial lending trends, in addition to a decline in total loan balances of $20.2 million from the prior quarter. The allowance for loan losses was 1.14%, 1.13% and 1.39% of total loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively, and was 239.7%, 427.7% and 94.6% of non-performing assets at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

Non-interest income decreased $3.6 million, or 44.3%, to $4.5 million for the quarter ended December 31, 2021 from $8.1 million in the quarter ended September 30, 2021, due to a decrease of $3.5 million in the net gain on loan origination and sale activities. Sold mortgages totaled $297.3 million in the fourth quarter of 2021, compared to $260.5 million in the third quarter of 2021. The fourth quarter of 2021 ended with a mortgage pipeline of $85.9 million, compared to a pipeline of $158.1 million at the end of the third quarter of 2021, and loans held for sale were $44.8 million as of December 31, 2021, compared to $75.4 million as of September 30, 2021. The decrease in the mortgage banking pipeline and loans held for sale, reflecting rising interest rates and seasonality, were key contributors to the erosion in the gain on loan origination and sale activities from the prior quarter. Mortgage servicing fees decreased $17,000, or 6.2%, to $257,000 for the fourth quarter of 2021 from $274,000 in the third quarter of 2021 as a result of a full quarter of expenses paid to the bank’s new mortgage sub-servicer of $310,000 for the quarter, partially offset by a positive fair value adjustment of $43,000 in the fourth quarter of 2021, compared to a positive fair value adjustment of $39,000 for the third quarter of 2021, based on an increase in mortgage interest rates.

Non-interest income decreased $11.1 million, or 70.9%, to $4.5 million for the quarter ended December 31, 2021 from $15.6 million for the quarter ended December 31, 2020, principally due to a decrease of $10.9 million in the net gain on loan origination and sale activities. Sold mortgage loans totaled $297.3 million in the fourth quarter of 2021, compared to sold mortgage loans of $426.5 million during the fourth quarter of 2020. The fourth quarter of 2021 ended with a mortgage pipeline of $85.9 million, compared to a pipeline of $396.6 million at the end of the fourth quarter of 2020. Mortgage servicing fees decreased $18,000 in the quarter ended December 31, 2021, principally due to $310,000 in sub-servicer expenses incurred during the fourth quarter of 2021, partially offset by a positive valuation adjustment to mortgage servicing rights of $43,000 in the quarter ended December 31, 2021 compared to an impairment charge of $87,000 in the quarter ended December 31, 2020 and increases in residential mortgage loan servicing fees, net of amortization, of $162,000 from the prior year quarter.

Non-interest expenses decreased $638,000, or 6.5%, to $9.2 million in the quarter ended December 31, 2021 from $9.9 million in the quarter ended September 30, 2021. The decrease was due to a decrease in salaries and employee benefits expense of $297,000, or 4.7%, primarily attributed to lower commissions and incentives associated with a normalization of residential loan production and by reductions in headcount related to the bank’s outsourcing of mortgage loan servicing, in addition to decreases in data processing, professional fees and other non-interest expenses from the prior quarter totaling $452,000.

Non-interest expenses decreased $3.7 million to $9.2 million in the quarter ended December 31, 2021 from $12.9 million in the quarter ended December 31, 2020. The decrease is principally due to a decrease in salaries and employee benefits of $2.6 million, primarily attributed to lower commissions and incentives associated with a normalization of residential loan production and reduced headcount, and decreases of $437,000 in occupancy and equipment expenses, as the Company has significantly decreased its operating footprint over the past twelve months.

The income tax expense was $330,000 for the three months ended December 31, 2021, compared to $1.2 million for the three months ended September 30, 2021 and $2.2 million for the three months ended December 31, 2020.

Year-to-Date Operating Results
Net interest income increased by $3.1 million, or 16.4%, to $22.0 million for the year ended December 31, 2021 from $18.9 million for the year ended December 31, 2020. The change reflects the downward pricing and improved composition of deposit liabilities, as well as loan growth. The composition of our funding base improved with an increase of $48.9 million, or 50.6%, of non-interest bearing deposits and a decrease of $23.3 million, or 31.8%, of borrowings. The composition change resulted in a 50 basis point decrease in the cost of interest-bearing liabilities. Average loan growth of $51.5 million, or 9.2%, from the prior year more than offset a 17 basis point decline in loan yields.

The Company recognized a credit for loan losses of $438,000 for the year ended December 31, 2021 compared to a provision of $2.6 million in the prior year. At December 31, 2021, improvements to qualitative factors related to the impact of the COVID-19 pandemic, the economic outlook, commercial lending and credit quality trends all helped to generate the credit for loan losses, partially offset by provisions for loan growth.

Non-interest income decreased $23.5 million, or 42.4%, to $31.9 million for the year ended December 31, 2021 from $55.4 million in the prior year, principally due to a decrease of $26.6 million in the net gain on loan origination and sale activities, partially offset by an increase in mortgage servicing fees, net, of $2.8 million. Mortgage loans sold were $1.4 billion in 2021, compared to $1.5 billion in the prior year. Net gain on loan origination and sale activities decreased, as a result of both lower loan sales and the impact of a shrinking mortgage banking pipeline during 2021, compared to an increasing mortgage banking pipeline during 2020. Mortgage servicing fees increased $2.8 million for the year ended December 31, 2021 to $1.7 million from a loss of $1.2 million in the year ended December 31, 2020, primarily due to positive fair value adjustments of $438,000 for the year ended December 31, 2021 compared to impairment charges of $2.1 million in the year ended December 31, 2020.

Non-interest expenses decreased $4.7 million, or 10.1%, to $41.7 million for the year ended December 31, 2021 from $46.3 million for the year ended December 31, 2020. Non-interest expenses in the year ended December 31, 2020 included one-time charges of $1,375,000 related to the retirement of senior executives as well as $229,000 of COVID-19 pandemic-related expenses. Occupancy and equipment expenses decreased $753,000 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 office since the prior year, and reduced COVID-19 pandemic related spending. These decreases were partially offset by increases in other non-interest expenses of $307,000, related to one-time conversion expenses for the bank’s new mortgage sub-servicer, and increases to board fees and stock-based compensation paid to new members of the bank’s Board of Directors.

Income tax expenses decreased to $3.1 million for the year ended December 31, 2021 from $5.5 million for the year ended December 31, 2020. The current period included a reversal of a charitable contribution carryforward valuation allowance, and the prior period included the utilization of net operating loss carryforwards.

Balance Sheet
At December 31, 2021, total assets amounted to $803.3 million, compared to $755.1 million at September 30, 2021, an increase of $52.2 million, or 6.9%. A $102.6 million increase in cash and cash equivalents from the prior quarter was partially offset by a $30.6 million decrease in loans held for sale and a $20.2 million decrease in total loans. The decrease in total loans was primarily the result of a $35.6 million sale of 1-4 family residential loans from portfolio during the quarter, partially offset by an increase of $12.3 million, or 6.7%, in commercial real estate loans. Deposits increased by $64.7 million, or 11.3%, in the quarter, including an increase of $11.6 million in non-interest bearing deposits and $32.6 million in term certificates, as the Company looked to lengthen the duration of its funding base in anticipation of rising interest rates.

Total assets at December 31, 2021 increased $82.2 million, or 11.4%, from $721.1 million at December 31, 2020. Contributing to asset growth was a $61.0 million increase in net loans to $544.6 million at December 31, 2021 from $483.6 million at December 31, 2020. Cash and cash equivalents increased by $101.7 million, or 738.2%, to $115.4 million at December 31, 2021 from $13.8 million at December 31, 2020, principally due an increase of $109.8 million, or 20.8%, of deposits. Commercial real estate loans increased by $53.5 million, or 37.2%, as we focus on diversifying our loan mix. Federal Home Loan Bank of Boston (“FHLBB”) advances decreased by $11.9 million to $50.0 million at December 31, 2021, from $61.9 million at December 31, 2020, and Federal Reserve Bank of Boston (“Federal Reserve Bank”) advances decreased by $11.4 million.

Total stockholders’ equity was $100.9 million at December 31, 2021 compared to $100.6 million at September 30, 2021. The increase of $306,000 reflects net income of $786,000, proceeds from the exercise of options of $255,000 and stock-based compensation of $359,000, partially offset by repurchases during the period of $144,000 and dividend payments of $765,000.

Total stockholders’ equity was $100.9 million at December 31, 2021 compared to $99.8 million at December 31, 2020. The increase of $1.1 million relates mainly to net income from the previous twelve months of $9.6 million, partially offset by share repurchases of $8.5 million.

Subsequent Events
Subsequent to December 31, 2021, the Company announced a reduction in force to its residential lending back-office operations of approximately 30%. The Company estimates that this reduction in force will reduce salaries and benefits expense by approximately $1.4 million on an annualized basis. Through this reduction in force, the elimination of overtime and temporary staffing costs associated with the mortgage origination process and the outsourcing residential loan servicing operations, which occurred in 2021, the Company will have reduced related costs by $3.3 million, or 15% of Envision Mortgage’s 2021 salaries and benefits expense.

COVID-19 Impact
In response to the impact of the COVID-19 pandemic on our customers and our business, the Company implemented a series of measures through the date of this release, including participation in the SBA PPP, through which we funded $26.2 million of SBA PPP Loans through December 31, 2021, and granting payment deferrals for residential mortgage, home equity and certain commercial borrowers who were current in their payments at the time the deferral was requested. Depending on the circumstances of the borrowers, the forbearance calls for a reduced or full deferral of payment. Please refer to the Loan Payment Deferrals and COVID-19 Highly Impacted Sectors for statistics on loan payment deferrals and the commercial loan sectors we believe could continue to 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 Quincy, Massachusetts, three loan production offices located in Massachusetts and one loan production office in Southern New Hampshire.

Forward Looking Statements
Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission (“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, 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 consumer behavior due to changing political, business and economic conditions or legislative or regulatory initiatives; reputational risk relating to the Company’s participation in the SBA PPP and other pandemic-related legislative and regulatory initiatives and programs; turbulence in the capital and debt markets and the impact of such conditions on the Company’s business activities; and the risk factors described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the SEC. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures, such as return on average assets, return on average equity, the efficiency ratio, profit percentage, tangible book value per share, non-interest income to total income and, where applicable, as adjusted for non-recurring items. These non-GAAP financial measures provide information for investors to effectively analyze financial trends of on-going business activities, and to enhance comparability with peers across the financial services sector.

Category: Earnings

Source: Randolph Bancorp, Inc. and Envision Bank

CONTACT:

Envision Bank
William M. Parent
President and Chief Executive Officer
617.925.1955
wparent@envisionbank.com


Randolph Bancorp, Inc.
Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)

              % Change 
  December 31,  September 30,  December 31,  Dec 2021 vs.  Dec 2021 vs. 
   2021   2021   2020  Sep 2021  Dec 2020 
Assets                    
Cash and cash equivalents $115,449  $12,876  $13,774   796.6%  738.2%
Securities available for sale, at fair value  51,666   51,725   55,366   (0.1)%  (6.7)%
Loans held for sale, at fair value  44,766   75,400   119,112   (40.6)%  (62.4)%
Loans:                    
1-4 family residential  236,364   265,561   235,648   (11.0)%  0.3%
Home equity  57,295   56,124   48,166   2.1%  19.0%
Commercial real estate  197,423   185,100   143,893   6.7%  37.2%
Construction  33,961   34,479   31,050   (1.5)%  9.4%
Total real estate loans  525,043   541,264   458,757   (3.0)%  14.4%
Commercial and industrial  17,242   19,896   20,259   (13.3)%  (14.9)%
Consumer  7,552   8,860   10,289   (14.8)%  (26.6)%
Total loans  549,837   570,020   489,305   (3.5)%  12.4%
Allowance for loan losses  (6,289)  (6,432)  (6,784)  (2.2)%  (7.3)%
Net deferred loan costs and fees, and purchase premiums  1,073   1,031   1,123   4.1%  (4.5)%
Loans, net  544,621   564,619   483,644   (3.5)%  12.6%
Federal Home Loan Bank of Boston stock, at cost  2,940   3,239   3,576   (9.2)%  (17.8)%
Accrued interest receivable  1,500   1,763   1,562   (14.9)%  (4.0)%
Mortgage servicing rights, net  15,616   15,402   12,377   1.4%  26.2%
Premises and equipment, net  7,684   6,462   4,781   18.9%  60.7%
Bank-owned life insurance  8,784   8,744   8,622   0.5%  1.9%
Foreclosed real estate, net  -   -   132  -%  (100.0)%
Other assets  10,252   10,867   18,126   (5.7)%  (43.4)%
Total assets $803,278  $751,097  $721,072   6.9%  11.4%
                     
Liabilities and Stockholders' Equity                    
Deposits:                    
Non-interest bearing $145,666  $134,058  $96,731   8.7%  50.6%
Savings accounts  191,712   188,346   185,481   1.8%  3.4%
NOW accounts  53,996   53,804   53,530   0.4%  0.9%
Money market accounts  90,544   73,562   77,393   23.1%  17.0%
Term certificates  106,112   73,519   83,444   44.3%  27.2%
Interest bearing brokered  50,117   50,116   31,728   0.0%  58.0%
Total deposits  638,147   573,405   528,307   11.3%  20.8%
Federal Reserve Bank advances  -   -   11,431  -%  (100.0)%
Federal Home Loan Bank of Boston advances  50,000   62,900   61,895   (20.5)%  (19.2)%
Mortgagors' escrow accounts  2,128   1,905   2,338   11.7%  (9.0)%
Post-employment benefit obligations  2,222   2,182   2,382   1.8%  (6.7)%
Other liabilities  9,878   10,108   14,900   (2.3)%  (33.7)%
Total liabilities  702,375   650,500   621,253   8.0%  13.1%
Stockholders' Equity:                    
Common stock  50   50   54   0.0%  (7.4)%
Additional paid-in capital  44,078   43,574   50,937   1.2%  (13.5)%
Retained earnings  60,524   60,504   51,689   0.0%  17.1%
ESOP-Unearned compensation  (3,568)  (3,615)  (3,756)  (1.3)%  (5.0)%
Accumulated other comprehensive income (loss), net of tax  (181)  84   895   (315.5)%  (120.2)%
Total stockholders' equity  100,903   100,597   99,819   0.3%  1.1%
Total liabilities and stockholders' equity $803,278  $751,097  $721,072   6.9%  11.4%
 
 

Randolph Bancorp, Inc.
Consolidated Balance Sheet Trend
(Dollars in thousands)
(Unaudited)

  December 31,  September 30,  June 30,  March 31,  December 31, 
   2021   2021   2021   2021   2020 
Assets                    
Cash and cash equivalents $115,449  $12,876  $34,876  $54,950  $13,774 
Securities available for sale, at fair value  51,666   51,725   50,212   54,148   55,366 
Loans held for sale, at fair value  44,766   75,400   74,277   93,176   119,112 
Loans:                    
1-4 family residential  236,364   265,561   263,992   239,190   235,648 
Home equity  57,295   56,124   50,555   49,073   48,166 
Commercial real estate  197,423   185,100   167,691   146,930   143,893 
Construction  33,961   34,479   29,140   29,975   31,050 
Total real estate loans  525,043   541,264   511,378   465,168   458,757 
Commercial and industrial  17,242   19,896   25,826   23,869   20,259 
Consumer  7,552   8,860   9,194   8,724   10,289 
Total loans  549,837   570,020   546,398   497,761   489,305 
Allowance for loan losses  (6,289)  (6,432)  (6,523)  (6,563)  (6,784)
Net deferred loan costs and fees, and purchase premiums  1,073   1,031   785   785   1,123 
Loans, net  544,621   564,619   540,660   491,983   483,644 
Federal Home Loan Bank of Boston stock, at cost  2,940   3,239   2,855   3,576   3,576 
Accrued interest receivable  1,500   1,763   1,523   1,501   1,562 
Mortgage servicing rights, net  15,616   15,402   15,375   14,744   12,377 
Premises and equipment, net  7,684   6,462   5,115   4,709   4,781 
Bank-owned life insurance  8,784   8,744   8,703   8,662   8,622 
Foreclosed real estate, net  -   -   -   132   132 
Other assets  10,252   10,867   10,546   10,607   18,126 
Total assets $803,278  $751,097  $744,142  $738,188  $721,072 
                     
Liabilities and Stockholders' Equity                    
Deposits:                    
Non-interest bearing $145,666  $134,058  $124,683  $118,623  $96,731 
Savings accounts  191,712   188,346   190,584   192,712   185,481 
NOW accounts  53,996   53,804   51,059   62,772   53,530 
Money market accounts  90,544   73,562   73,967   78,236   77,393 
Term certificates  106,112   73,519   74,631   75,690   83,444 
Interest bearing brokered  50,117   50,116   57,059   32,225   31,728 
Total deposits  638,147   573,405   571,983   560,258   528,307 
Federal Reserve Bank advances  -   -   -   -   11,431 
Federal Home Loan Bank of Boston advances  50,000   62,900   50,016   60,024   61,895 
Mortgagors' escrow accounts  2,128   1,905   1,783   1,924   2,338 
Post-employment benefit obligations  2,222   2,182   2,226   2,235   2,382 
Other liabilities  9,878   10,108   17,424   12,888   14,900 
Total liabilities  702,375   650,500   643,432   637,329   621,253 
Stockholders' Equity:                    
Common stock  50   50   52   53   54 
Additional paid-in capital  44,078   43,574   46,740   48,613   50,937 
Retained earnings  60,524   60,504   57,378   55,801   51,689 
ESOP-Unearned compensation  (3,568)  (3,615)  (3,662)  (3,709)  (3,756)
Accumulated other comprehensive income (loss), net of tax  (181)  84   202   101   895 
Total stockholders' equity  100,903   100,597   100,710   100,859   99,819 
Total liabilities and stockholders' equity $803,278  $751,097  $744,142  $738,188  $721,072 
 
 

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

  Three Months Ended  % Change 
  December 31,  September 30,  December 31,  Dec 2021 vs.  Dec 2021 vs. 
  2021  2021  2020  Sep 2021  Dec 2020 
Interest and dividend income:                    
Loans $5,923  $6,226  $5,532   (4.9)%  7.1%
Securities-taxable  217   219   283   (0.9)%  (23.3)%
Securities-tax exempt  4   4   6   0.0%  (33.3)%
Interest-bearing deposits and certificates of deposit  13   4   7   225.0%  85.7%
Total interest and dividend income  6,157   6,453   5,828   (4.6)%  5.6%
                     
Interest expense:                    
Deposits  308   299   541   3.0%  (43.1)%
Borrowings  155   178   247   (12.9)%  (37.2)%
Total interest expense  463   477   788   (2.9)%  (41.2)%
                     
Net interest income  5,694   5,976   5,040   (4.7)%  13.0%
Provision (credit) for loan losses  (108)  (90)  215   20.0%  (150.2)%
Net interest income after provision (credit) for loan losses  5,802   6,066   4,825   (4.4)%  20.2%
                     
Non-interest income:                    
Customer service fees  422   410   381   2.9%  10.8%
Gain on loan origination and sale activities, net  3,723   7,229   14,620   (48.5)%  (74.5)%
Mortgage servicing fees, net  257   274   275   (6.2)%  (6.5)%
Increase in cash surrender value of life insurance  41   41   45   0.0%  (8.9)%
Other  92   195   266   (52.8)%  (65.4)%
Total non-interest income  4,535   8,149   15,587   (44.3)%  (70.9)%
Non-interest expenses:                    
Salaries and employee benefits  6,084   6,381   8,722   (4.7)%  (30.2)%
Occupancy and equipment  713   714   1,150   (0.1)%  (38.0)%
Data processing  237   367   280   (35.4)%  (15.4)%
Professional fees  325   490   389   (33.7)%  (16.5)%
Marketing  245   134   231   82.8%  6.1%
FDIC insurance  55   54   51   1.9%  7.8%
Other non-interest expenses  1,562   1,719   2,104   (9.1)%  (25.8)%
Total non-interest expenses  9,221   9,859   12,927   (6.5)%  (28.7)%
Income before income taxes  1,116   4,356   7,485   (74.4)%  (85.1)%
Income tax expense  330   1,230   2,211   (73.2)%  (85.1)%
Net income $786  $3,126  $5,274   (74.9)%  (85.1)%
                     
Net income per share:                    
Basic $0.17  $0.64  $1.03         
Diluted $0.16  $0.62  $1.01         
                     
Weighted average shares outstanding:                    
Basic  4,743,833   4,869,155   5,135,069         
Diluted  4,993,750   5,074,676   5,244,414         
                     
Regular dividends declared per share $0.15  $-  $-         
                     
                     

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

  Year to Date  % Change 
  December 31,  December 31,  Dec 2021 vs. 
  2021  2020  Dec 2020 
Interest and dividend income:            
Loans $23,162  $22,212   4.3%
Securities-taxable  899   1,273   (29.4)%
Securities-tax exempt  20   28   (28.6)%
Interest-bearing deposits and certificates of deposit  32   75   (57.3)%
Total interest and dividend income  24,113   23,588   2.2%
             
Interest expense:            
Deposits  1,390   3,778   (63.2)%
Borrowings  763   943   (19.1)%
Total interest expense  2,153   4,721   (54.4)%
             
Net interest income  21,960   18,867   16.4%
Provision (credit) for loan losses  (438)  2,553   (117.2)%
Net interest income after provision (credit) for loan losses  22,398   16,314   37.3%
             
Non-interest income:            
Customer service fees  1,618   1,283   26.1%
Gain on loan origination and sale activities, net  27,685   54,236   (49.0)%
Mortgage servicing fees, net  1,691   (1,153)  (246.7)%
Increase in cash surrender value of life insurance  163   181   (9.9)%
Other  766   864   (11.3)%
Total non-interest income  31,923   55,411   (42.4)%
Non-interest expenses:            
Salaries and employee benefits  28,212   33,161   (14.9)%
Occupancy and equipment  2,792   3,545   (21.2)%
Data processing  1,168   943   23.9%
Professional fees  1,699   1,277   33.0%
Marketing  749   689   8.7%
FDIC insurance  217   187   16.0%
Other non-interest expenses  6,821   6,514   4.7%
Total non-interest expenses  41,658   46,316   (10.1)%
Income before income taxes  12,663   25,409   (50.2)%
Income tax expense  3,062   5,477   (44.1)%
Net income $9,601  $19,932   (51.8)%
             
Net income per share:            
Basic $1.96  $3.89     
Diluted $1.88  $3.86     
             
Weighted average shares outstanding:            
Basic  4,896,641   5,126,561     
Diluted  5,108,738   5,163,042     
             
Regular dividends declared per share $0.15  $-     
             
             

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

  Three Months Ended 
  December 31,  September 30,  June 30,  March 31,  December 31, 
  2021  2021  2021  2021  2020 
Interest and dividend income:                    
Loans $5,923  $6,226  $5,505  $5,508  $5,532 
Securities-taxable  217   219   223   240   283 
Securities-tax exempt  4   4   6   6   6 
Interest-bearing deposits and certificates of deposit  13   4   8   7   7 
Total interest and dividend income  6,157   6,453   5,742   5,761   5,828 
                     
Interest expense:                    
Deposits  308   299   345   438   541 
Borrowings  155   178   198   232   247 
Total interest expense  463   477   543   670   788 
                     
Net interest income  5,694   5,976   5,199   5,091   5,040 
Provision (credit) for loan losses  (108)  (90)  (27)  (213)  215 
Net interest income after provision (credit) for loan losses  5,802   6,066   5,226   5,304   4,825 
                     
Non-interest income:                    
Customer service fees  422   410   419   367   381 
Gain on loan origination and sale activities, net  3,723   7,229   5,740   10,993   14,620 
Mortgage servicing fees, net  257   274   381   779   275 
Increase in cash surrender value of life insurance  41   41   41   40   45 
Other  92   195   235   244   266 
Total non-interest income  4,535   8,149   6,816   12,423   15,587 
Non-interest expenses:                    
Salaries and employee benefits  6,084   6,381   7,310   8,437   8,722 
Occupancy and equipment  713   714   621   744   1,150 
Data processing  237   367   301   263   280 
Professional fees  325   490   323   561   389 
Marketing  245   134   200   170   231 
FDIC insurance  55   54   54   54   51 
Other non-interest expenses  1,562   1,719   1,818   1,722   2,104 
Total non-interest expenses  9,221   9,859   10,627   11,951   12,927 
Income before income taxes  1,116   4,356   1,415   5,776   7,485 
Income tax expense (benefit)  330   1,230   (162)  1,664   2,211 
Net income $786  $3,126  $1,577  $4,112  $5,274 
                     
Net income per share:                    
Basic $0.17  $0.64  $0.32  $0.81  $1.03 
Diluted $0.16  $0.62  $0.31  $0.78  $1.01 
                     
Weighted average shares outstanding:                    
Basic  4,743,833   4,869,155   4,921,182   5,056,165   5,135,069 
Diluted  4,993,750   5,074,676   5,135,582   5,254,907   5,244,414 
                     
Regular dividends declared per share $0.15  $-  $-  $-  $- 
                     
                     

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

 Three Months Ended 
 December 31, 2021  September 30, 2021  December 31, 2020 
 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)$319,855  $2,790   3.46% $345,576  $3,021   3.47% $332,349  $3,027   3.62%
Home equity 57,183   480   3.33%  53,345   475   3.53%  47,844   436   3.63%
Commercial real estate 186,943   1,880   3.99%  174,319   1,809   4.12%  134,766   1,342   3.96%
Construction 34,246   331   3.83%  32,690   310   3.76%  32,101   325   4.03%
Total real estate loans 598,227   5,481   3.63%  605,930   5,615   3.68%  547,060   5,130   3.73%
Commercial and industrial 18,311   331   7.17%  22,693   493   8.62%  21,378   258   4.80%
Consumer 8,313   111   5.30%  12,820   118   3.65%  11,564   144   4.95%
Total loans 624,851   5,923   3.76%  641,443   6,226   3.85%  580,002   5,532   3.79%
Investment securities(2) (3) 54,314   222   1.62%  54,229   224   1.64%  58,329   290   1.98%
Interest-earning deposits 41,161   13   0.13%  11,002   4   0.14%  30,573   7   0.09%
Total interest-earning assets 720,326   6,158   3.39%  706,674   6,454   3.62%  668,904   5,829   3.47%
Noninterest-earning assets 43,478           44,614           45,015         
Total assets$763,804          $751,288          $713,919         
Interest-bearing liabilities:                                   
 Savings accounts 191,464   72   0.15%  189,254   76   0.16%  181,653   142   0.31%
 NOW accounts 62,838   29   0.18%  61,951   23   0.15%  59,005   43   0.29%
 Money market accounts 77,140   36   0.19%  73,662   41   0.22%  75,106   62   0.33%
 Term certificates 135,406   171   0.50%  113,787   159   0.55%  112,260   294   1.04%
Total interest-bearing deposits 466,848   308   0.26%  438,654   299   0.27%  428,024   541   0.50%
 FHLBB and FRB advances 53,592   155   1.15%  64,047   178   1.10%  77,584   247   1.27%
Total interest-bearing liabilities 520,440   463   0.35%  502,701   477   0.38%  505,608   788   0.62%
Noninterest-bearing liabilities:                                   
 Noninterest-bearing deposits 127,486           126,165           94,540         
 Other noninterest-bearing liabilities 13,305           19,021           13,539         
Total liabilities 661,231           647,887           613,687         
Total stockholders' equity 102,573           103,401           100,232         
Total liabilities and stockholders' equity$763,804          $751,288          $713,919         
Net interest income    $5,695          $5,977          $5,041     
Interest rate spread(4)         3.04%          3.24%          2.85%
Net interest-earning assets(5)$199,886          $203,973          $163,296         
Net interest margin(6)         3.14%          3.36%          3.00%
Cost of deposits (8)         0.21%          0.21%          0.41%
Cost of funds (9)         0.28%          0.30%          0.52%
Ratio of interest-earning assets to interest-bearing liabilities 138.41%          140.58%          132.30%        

(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 December 31, 2021, September 30, 2021 and December 31, 2020, 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 
 December 31, 2021  December 31, 2020 
 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)$330,326  $11,548   3.50% $318,332  $12,142   3.81%
Home equity 52,202   1,800   3.45%  44,577   1,766   3.96%
Commercial real estate 166,973   6,761   4.05%  132,948   5,366   4.04%
Construction 31,810   1,225   3.85%  34,408   1,449   4.21%
Total real estate loans 581,311   21,334   3.67%  530,265   20,723   3.91%
Commercial and industrial 22,082   1,364   6.18%  17,848   781   4.38%
Consumer 10,034   464   4.62%  13,799   708   5.13%
Total loans 613,427   23,162   3.78%  561,912   22,212   3.95%
Investment securities(2) (3) 55,421   923   1.67%  58,233   1,306   2.24%
Interest-earning deposits 32,841   32   0.10%  30,277   76   0.25%
Total interest-earning assets 701,689   24,117   3.44%  650,422   23,594   3.63%
Noninterest-earning assets 42,608           39,395         
Total assets$744,297          $689,817         
Interest-bearing liabilities:                       
Savings accounts 190,865   335   0.18%  161,502   831   0.51%
NOW accounts 65,978   138   0.21%  55,396   185   0.33%
Money market accounts 74,816   174   0.23%  71,817   456   0.63%
Term certificates 112,802   743   0.66%  147,655   2,305   1.56%
Total interest-bearing deposits 444,461   1,390   0.31%  436,370   3,777   0.87%
FHLBB and FRB advances 59,963   763   1.27%  71,661   943   1.32%
Total interest-bearing liabilities 504,424   2,153   0.43%  508,031   4,720   0.93%
Noninterest-bearing liabilities:                       
 Noninterest-bearing deposits 121,378           80,957         
 Other noninterest-bearing liabilities 15,331           12,384         
Total liabilities 641,133           601,372         
Total stockholders' equity 103,164           88,445         
Total liabilities and stockholders' equity$744,297          $689,817         
Net interest income    $21,964          $18,874     
Interest rate spread(4)         3.01%          2.70%
Net interest-earning assets(5)$197,265          $142,391         
Net interest margin(6)         3.13%          2.90%
Cost of deposits (8)         0.25%          0.73%
Cost of funds (9)         0.34%          0.80%
Ratio of interest-earning assets to interest-bearing liabilities 139.11%          128.03%        

(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 $4,000 and $5,000 for the years ended December 31, 2021 and 2020, 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 
  December 31,  September 30,  June 30,  March 31,  December 31, 
  2021  2021  2021  2021  2020 
Interest-earning assets:                    
Loans:                    
1-4 family residential $319,855  $345,576  $319,087  $336,805  $332,349 
Home equity  57,183   53,345   49,789   48,383   47,844 
Commercial real estate  186,943   174,319   159,423   146,683   134,766 
Construction  34,246   32,690   29,902   30,350   32,101 
Total real estate loans  598,227   605,930   558,201   562,221   547,060 
Commercial and industrial  18,311   22,693   25,497   21,860   21,378 
Consumer  8,313   12,820   9,052   9,940   11,564 
Total loans  624,851   641,443   592,750   594,021   580,002 
Investment securities  54,314   54,229   55,376   57,818   58,329 
Interest-earning deposits  41,161   11,002   43,888   35,492   30,573 
Total interest-earning assets  720,326   706,674   692,014   687,331   668,904 
Non-interest earning assets  43,478   44,614   40,257   42,045   45,015 
Total assets $763,804  $751,288  $732,271  $729,376  $713,919 
                     
Interest-bearing liabilities:                    
Savings accounts $191,464  $189,254  $192,434  $190,313  $181,653 
NOW accounts  62,838   61,951   69,730   69,511   59,005 
Money market accounts  77,140   73,662   72,469   75,994   75,106 
Term certificates  135,406   113,787   104,604   96,978   112,260 
Total interest-bearing deposits  466,848   438,654   439,237   432,796   428,024 
FHLBB and FRB advances  53,592   64,047   51,502   70,857   77,584 
Total interest-bearing liabilities  520,440   502,701   490,739   503,653   505,608 
Noninterest-bearing liabilities:                    
Noninterest-bearing deposits  127,486   126,165   124,656   106,929   94,540 
Other noninterest-bearing liabilities  13,305   19,021   13,606   15,375   13,539 
Total liabilities  661,231   647,887   629,001   625,957   613,687 
Total stockholders' equity  102,573   103,401   103,270   103,419   100,232 
Total liabilities and stockholders' equity $763,804  $751,288  $732,271  $729,376  $713,919 
 
 

Randolph Bancorp, Inc.
Interest Earned and Paid Trend
(Dollars in thousands)
(Unaudited)

  Three Months Ended 
  December 31,  September 30,  June 30,  March 31,  December 31, 
  2021  2021  2021  2021  2020 
Interest-earning assets:                    
Loans:                    
1-4 family residential $2,790  $3,021  $2,763  $2,974  $3,027 
Home equity  480   475   412   433   436 
Commercial real estate  1,880   1,809   1,666   1,406   1,342 
Construction  331   310   289   295   325 
Total real estate loans  5,481   5,615   5,130   5,108   5,130 
Commercial and industrial  331   493   266   274   258 
Consumer  111   118   109   126   144 
Total loans  5,923   6,226   5,505   5,508   5,532 
Investment securities  222   224   230   247   290 
Interest-earning deposits  13   4   8   7   7 
Total interest-earning assets  6,158   6,454   5,743   5,762   5,829 
                     
Interest-bearing liabilities:                    
Savings accounts $72  $76  $89  $98  $142 
NOW accounts  29   23   38   48   43 
Money market accounts  36   41   43   54   62 
Term certificates  171   159   175   238   294 
Total interest-bearing deposits  308   299   345   438   541 
FHLBB and FRB advances  155   178   198   232   247 
Total interest-bearing liabilities  463   477   543   670   788 
                     
Net interest income  5,695   5,977   5,200   5,092   5,041 
  
  

Randolph Bancorp, Inc.
Average Yield Trend(1)
(Dollars in thousands)
(Unaudited)

  Three Months Ended 
  December 31,  September 30,  June 30,  March 31,  December 31, 
  2021  2021  2021  2021  2020 
Interest-earning assets:                    
Loans:                    
1-4 family residential  3.46%  3.47%  3.47%  3.58%  3.62%
Home equity  3.33%  3.53%  3.32%  3.63%  3.63%
Commercial real estate  3.99%  4.12%  4.19%  3.89%  3.96%
Construction  3.83%  3.76%  3.88%  3.94%  4.03%
     Total real estate loans  3.63%  3.68%  3.69%  3.68%  3.73%
Commercial and industrial  7.17%  8.62%  4.18%  5.08%  4.80%
Consumer  5.30%  3.65%  4.83%  5.14%  4.95%
Total loans  3.76%  3.85%  3.73%  3.76%  3.79%
Investment securities  1.62%  1.64%  1.67%  1.73%  1.98%
Interest-earning deposits  0.13%  0.14%  0.07%  0.08%  0.09%
Total interest-earning assets  3.39%  3.62%  3.33%  3.40%  3.47%
                     
Interest-bearing liabilities:                    
Savings accounts  0.15%  0.16%  0.19%  0.21%  0.31%
NOW accounts  0.18%  0.15%  0.22%  0.28%  0.29%
Money market accounts  0.19%  0.22%  0.24%  0.29%  0.33%
Term certificates  0.50%  0.55%  0.67%  1.00%  1.04%
Total interest-bearing deposits  0.26%  0.27%  0.32%  0.41%  0.50%
FHLBB and FRB advances  1.15%  1.10%  1.54%  1.33%  1.27%
Total interest-bearing liabilities  0.35%  0.38%  0.44%  0.54%  0.62%
                     
Interest rate spread  3.04%  3.24%  2.89%  2.86%  2.85%
Net interest rate margin  3.14%  3.36%  3.01%  3.00%  3.00%
Cost of deposits  0.21%  0.21%  0.25%  0.33%  0.41%
Cost of funds  0.28%  0.30%  0.35%  0.45%  0.52%
Ratio of interest-earning assets to interest-bearing liabilities  138.41%  140.58%  141.01%  136.47%  132.30%

(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 
  December 31, 2021 vs. September 30, 2021 
  Increase (Decrease)  Total 
  Due to Changes in  Increase 
  Volume  Rate  (Decrease) 
Interest-earning assets:            
Loans:            
1-4 family residential $(224) $(7)  (231)
Home equity  33   (28)  5 
Commercial real estate  128   (57)  71 
Construction  15   6   21 
     Total real estate loans  (48)  (86)  (134)
Commercial and industrial  (86)  (76)  (162)
Consumer  (32)  26   (6)
Total loans  (166)  (136)  (302)
Investment securities  -   (3)  (3)
Interest-earning deposits  10   (1)  9 
Total interest-earning assets  (156)  (140)  (296)
Interest-bearing liabilities:            
Savings accounts  1   (5)  (4)
NOW accounts  -   6   6 
Money market accounts  2   (7)  (5)
Term certificates  28   (16)  12 
     Total interest-bearing deposits  31   (22)  9 
FHLBB and FRB advances  (28)  5   (23)
     Total interest-bearing liabilities  3   (17)  (14)
Change in net interest income $(159) $(123) $(282)
 
 

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

  Three Months Ended 
  December 31, 2021 vs. 2020 
  Increase (Decrease)  Total 
  Due to Changes in  Increase 
  Volume  Rate  (Decrease) 
Interest-earning assets:            
Loans:            
1-4 family residential $(108) $(129)  (237)
Home equity  81   (37)  44 
Commercial real estate  512   26   538 
Construction  22   (16)  6 
     Total real estate loans  507   (156)  351 
Commercial and industrial  (33)  106   73 
Consumer  (38)  6   (32)
Total loans  436   (44)  392 
Investment securities  (19)  (50)  (69)
Interest-earning deposits  2   4   6 
Total interest-earning assets  419   (90)  329 
Interest-bearing liabilities:            
Savings accounts  8   (78)  (70)
NOW accounts  3   (17)  (14)
Money market accounts  2   (28)  (26)
Term certificates  52   (175)  (123)
     Total interest-bearing deposits  65   (298)  (233)
FHLBB and FRB advances  (71)  (21)  (92)
     Total interest-bearing liabilities  (6)  (319)  (325)
Change in net interest income $425  $229  $654 
 
 

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

  Year to Date 
  December 31, 2021 vs. 2020 
  Increase (Decrease)  Total 
  Due to Changes in  Increase 
  Volume  Rate  (Decrease) 
Interest-earning assets:            
Loans:            
1-4 family residential $445  $(1,039)  (594)
Home equity  280   (246)  34 
Commercial real estate  1,368   27   1,395 
Construction  (105)  (119)  (224)
     Total real estate loans  1,988   (1,377)  611 
Commercial and industrial  157   426   583 
Consumer  (179)  (65)  (244)
Total loans  1,966   (1,016)  950 
Investment securities  (60)  (323)  (383)
Interest-earning deposits  6   (50)  (44)
Total interest-earning assets  1,912   (1,389)  523 
Interest-bearing liabilities:            
Savings accounts  130   (626)  (496)
NOW accounts  31   (78)  (47)
Money market accounts  18   (300)  (282)
Term certificates  (453)  (1,109)  (1,562)
     Total interest-bearing deposits  (274)  (2,113)  (2,387)
FHLBB and FRB advances  (150)  (30)  (180)
     Total interest-bearing liabilities  (424)  (2,143)  (2,567)
Change in net interest income $2,336  $754  $3,090 
  
  

Randolph Bancorp, Inc.
Quarterly Trend in Mortgage Banking Income
(Dollars in thousands)
(Unaudited)

  Three Months Ended 
  December 31,  September 30,  June 30,  March 31,  December 31, 
  2021  2021  2021  2021  2020 
Gain on loan origination and sale activities, net                    
Gain on sale of mortgages and realized gain from derivative financial instruments, net $4,818  $6,339  $6,545  $15,876  $12,907 
Net change in fair value of loans held for sale and portfolio loans accounted for at fair value  (1,360)  549   1,091   (3,816)  896 
Capitalized residential mortgage loan servicing rights  942   783   1,476   2,797   2,296 
Net change in fair value of derivative loan commitments and forward loan sale commitments  (677)  (442)  (3,372)  (3,864)  (1,479)
Gain on loan origination and sales activities, net $3,723  $7,229  $5,740  $10,993  $14,620 
                     
Mortgage servicing fees, net                    
Residential mortgage loan servicing fees $1,355  $1,282  $1,205  $1,170  $1,143 
Amortization of residential mortgage loan servicing rights  (831)  (795)  (759)  (812)  (781)
Release (provision) to the valuation allowance of mortgage loan servicing rights  43   39   (65)  421   (87)
Sub-servicer expenses (1)  (310)  (252)  -   -   - 
Mortgage servicing fees, net $257  $274  $381  $779  $275 
Total gain on loan origination and sales activities and mortgage servicing fees $3,980  $7,503  $6,121  $11,772  $14,895 
                     
Principal balance of loans originated for sale $222,644  $260,519  $309,033  $487,675  $443,948 
Principal balance of loans sold $297,316  $260,473  $342,762  $503,285  $426,485 
Ending notional amount of derivative loan commitments $85,887  $158,085  $139,748  $239,509  $396,551 
Loans held for sale, at fair value $44,766  $75,400  $74,277  $93,176  $119,112 
Margin on loans sold (2)  1.94%  2.73%  2.34%  3.71%  3.56%

(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
  December 31,  December 31, 
  2021  2020 
Gain on loan origination and sale activities, net        
Gain on sale of mortgages and realized gain from derivative financial instruments, net $33,578  $34,203 
Net change in fair value of loans held for sale and portfolio loans accounted for at fair value  (3,536)  3,263 
Capitalized residential mortgage loan servicing rights  5,998   8,428 
Net change in fair value of derivative loan commitments and forward loan sale commitments  (8,355)  8,342 
Gain on loan origination and sales activities, net $27,685  $54,236 
         
Mortgage servicing fees, net        
Residential mortgage loan servicing fees $5,012  $3,458 
Amortization of residential mortgage loan servicing rights  (3,197)  (2,543)
Release (provision) to the valuation allowance of mortgage loan servicing rights  438   (2,068)
Sub-servicer expenses (1)  (562)  - 
Mortgage servicing fees, net $1,691  $(1,153)
Total gain on loan origination and sales activities and mortgage servicing fees $29,376  $53,083 
         
Principal balance of loans originated for sale $1,279,871  $1,556,587 
Principal balance of loans sold $1,403,836  $1,497,643 
Ending notional amount of derivative loan commitments $85,887  $396,551 
Loans held for sale, at fair value $44,766  $119,112 
Margin on loans sold (2)  2.82%  2.85%

(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 December 31, 2021 
  Envision Bank  Envision Mortgage  Consolidated Total 
Net interest income $4,916  $778  $5,694 
Provision (credit) for loan losses  (108)  -   (108)
Net interest income after provision (credit) for loan losses  5,024   778   5,802 
             
Non-interest income:            
Customer service fees  413   9   422 
Gain on loan origination and sale activities, net (1)  -   4,190   4,190 
Mortgage servicing fees, net  (213)  470   257 
Other  16   117   133 
Total non-interest income  216   4,786   5,002 
             
Non-interest expenses:            
Salaries and employee benefits  1,741   4,343   6,084 
Occupancy and equipment  500   213   713 
Other non-interest expenses  1,038   1,386   2,424 
Total non-interest expenses  3,279   5,942   9,221 
             
Income (loss) before income taxes and elimination of inter-segment profit $1,961  $(378)  1,583 
             
Elimination of inter-segment profit          (467)
Income before income taxes          1,116 
             
Income tax expense          330 
Net income         $786 

(1) Before elimination of inter-segment profit.

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


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

  For the Three Months Ended September 30, 2021 
  Envision Bank  Envision Mortgage  Consolidated Total 
Net interest income $5,243  $733  $5,976 
Provision (credit) for loan losses  (90)  -   (90)
Net interest income after provision (credit) for loan losses  5,333   733   6,066 
             
Non-interest income:            
Customer service fees  394   16   410 
Gain on loan origination and sale activities, net (1)  -   7,925   7,925 
Mortgage servicing fees, net  (222)  496   274 
Other  105   131   236 
Total non-interest income  277   8,568   8,845 
             
Non-interest expenses:            
Salaries and employee benefits  1,742   4,639   6,381 
Occupancy and equipment  473   241   714 
Other non-interest expenses  1,046   1,718   2,764 
Total non-interest expenses  3,261   6,598   9,859 
             
Income before income taxes and elimination of inter-segment profit $2,349  $2,703   5,052 
             
Elimination of inter-segment profit          (696)
Income before income taxes          4,356 
             
Income tax expense          1,230 
Net income         $3,126 

(1) Before elimination of inter-segment profit.

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

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

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

(1) Before elimination of inter-segment profit.

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


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

  For the Year Ended December 31, 2021 
  Envision Bank  Envision Mortgage  Consolidated Total 
Net interest income $18,894  $3,066  $21,960 
Provision (credit) for loan losses  (438)  -   (438)
Net interest income after provision (credit) for loan losses  19,332   3,066   22,398 
             
Non-interest income:            
Customer service fees  1,538   80   1,618 
Gain on loan origination and sale activities, net (1)  -   30,347   30,347 
Mortgage servicing fees, net  (622)  2,313   1,691 
Other  428   501   929 
Total non-interest income  1,344   33,241   34,585 
             
Non-interest expenses:            
Salaries and employee benefits  7,031   21,181   28,212 
Occupancy and equipment  1,825   967   2,792 
Other non-interest expenses  4,435   6,219   10,654 
Total non-interest expenses  13,291   28,367   41,658 
             
Income before income taxes and elimination of inter-segment profit $7,385  $7,940   15,325 
             
Elimination of inter-segment profit          (2,662)
Income before income taxes          12,663 
             
Income tax expense          3,062 
Net income         $9,601 

(1) Before elimination of inter-segment profit.

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


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

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

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

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 
    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 income  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 
                   
    Quarter Ended 
    March 31, 2021 
Adjustments Income Statement Section Income Before
Taxes
  Provision for
Income Taxes
  Net Income  Earnings per
Share (diluted)
 
GAAP basis   $5,776  $1,664  $4,112  $0.78 
Accrued severance expenses Non-interest expense  109   31   78   0.01 
Non-GAAP basis   $5,885  $1,695  $4,190  $0.79 
                   
    Quarter Ended 
    December 31, 2020 
Adjustments Income Statement Section Income (Loss)
Before Taxes
  Provision for
Income Taxes
  Net Income  Earnings per
Share (diluted)
 
GAAP basis   $7,485  $2,211  $5,274  $1.01 
Residential lending office closure Non-interest expense  294   63   231   0.04 
COVID-19 related expenses Non-interest expense  69   15   54   0.01 
Non-GAAP basis   $7,848  $2,289  $5,559  $1.06 
  
  

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

    Year to Date 
    December 31, 2021 
Adjustments Income Statement Section Income
Before Taxes
  Provision for
Income
Taxes
  Net Income  Earnings per
Share
(diluted)
 
GAAP basis   $12,663  $3,062  $9,601  $1.88 
Loss on disposal of fixed assets Non-interest income  84   24   60   0.01 
Accrued severance expenses Non-interest expense  419   120   299   0.06 
Other outsourcing expenses Non-interest expense  261   75   186   0.04 
Non-GAAP basis   $13,427  $3,281  $10,146  $1.99 
                   
    Year to Date 
    December 31, 2020 
Adjustments Income Statement Section Income
Before Taxes
  Provision for
Income
Taxes
  Net Income  Earnings per
Share
(diluted)
 
GAAP basis   $25,409  $5,477  $19,932  $3.86 
Retirement salary and benefits compensation Non-interest expense  692   149   543   0.11 
Accelerated vesting of stock-based compensation Non-interest expense  683   147   536   0.10 
COVID-19 related expenses Non-interest expense  229   49   180   0.03 
Residential lending office closure Non-interest expense  294   63   231   0.04 
Accrued severance expenses Non-interest expense  69   15   54   0.01 
Non-GAAP basis   $27,376  $5,900  $21,476  $4.15 
 
 

Randolph Bancorp, Inc.
Selected Financial Highlights
(Unaudited)

  At or for the Three Months Ended 
  December 31,  September 30,  June 30,  March 31,  December 31, 
  2021  2021  2021  2021  2020 
Return on average assets: (1, 5)                    
GAAP  0.41%  1.66%  0.86%  2.26%  2.95%
Non-GAAP (2)  0.44%  1.79%  0.96%  2.30%  3.11%
                     
Return on average equity: (1, 6)                    
GAAP  3.07%  12.09%  6.11%  15.90%  21.05%
Non-GAAP (2)  3.29%  13.00%  6.79%  16.21%  22.18%