Malvern Bancorp : Reports First Quarter Operating Results - Form 8-K

Malvern Bancorp, Inc. Reports First Quarter Operating Results

PAOLI, PA., February 8, 2022 - Malvern Bancorp, Inc. (NASDAQ: MLVF) (the "Company"), the parent company of Malvern Bank, National Association (the "Bank"), today reported operating results for the first fiscal quarter ended December 31, 2021. Net income for the quarter ended December 31, 2021 amounted to $2.0 million, or $0.27 per fully diluted common share, compared with $2.3 million, or $0.30 per fully diluted common share, for the quarter ended December 31, 2020. Annualized return on average assets ("ROAA") was 0.69 percent for the quarter ended December 31, 2021, compared to 0.74 percent for the quarter ended December 31, 2020, and annualized return on average equity ("ROAE") was 5.61 percent for the quarter ended December 31, 2021, compared with 6.38 percent for the quarter ended December 31, 2020.

"I am pleased to report improved business results for the first fiscal quarter versus last quarter, including increases in net income and net interest margin and improvements to other key metrics. We believe the actions taken in the fourth fiscal quarter to improve asset quality were important to managing future risk, protecting capital, and positioning Malvern Bank for future earnings. With continued momentum, we anticipate an upswing in business opportunities and an environment in which businesses can rebound further. We believe we are well positioned for steady and measured growth throughout fiscal year 2022," commented Anthony C. Weagley, President and Chief Executive Officer.

Statement of Income Highlights at December 31, 2021

•

Net interest margin ("NIM") increased 16 basis points to 2.78 percent for the quarter ended December 31, 2021, compared to 2.62 percent for the quarter ended December 31, 2020. The increase was driven by a reduction in interest expense, partially offset by a decrease in interest-earning assets.

•

Total interest expense decreased $1.6 million, or 49.4 percent, to $1.7 million for the quarter ended December 31, 2021, compared to $3.3 million for the quarter ended December 31, 2020, which resulted primarily from the reduction of costs on interest-bearing deposits.

•

The Company did not record a provision for loan losses during the quarter ended December 31, 2021, compared to a $550,000 provision for loan losses for the quarter ended December 31, 2020.

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Linked Quarter Financial Ratios

(unaudited)

As of or for the quarter ended:	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Return on average assets (1)		0.69	%		(2.06	%)		0.53	%		0.73	%		0.74	%
Return on average equity (1)		5.61	%		(16.59	%)		4.35	%		6.14	%		6.38	%
Net interest margin (1)		2.78	%		2.61	%		2.70	%		2.54	%		2.62	%
Loans / deposits ratio		95.06	%		97.41	%		104.84	%		108.14	%		111.33	%
Shareholders' equity / total assets		12.54	%		11.76	%		12.50	%		12.09	%		11.73	%
Efficiency ratio		66.30	%		68.67	%		73.62	%		63.53	%		58.30	%
Book value per common share	$	18.97		$	18.65		$	19.44		$	19.17		$	18.83

(1)

Annualized.

Linked Quarter Income Statement Data

(unaudited)

(in thousands, except share and per share data)

For the quarter ended:	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Net interest income	$	7,158		$	6,825		$	7,129		$	6,802		$	7,304
Provision for loan losses		-			10,626			-			-			550
Net interest income (loss) after provision for loan losses		7,158			(3,801	)		7,129			6,802			6,754
Other income		727			579			793			1,167			1,224
Other expense		5,228			5,084			5,832			5,063			4,972
Income (loss) before income tax expense		2,657			(8,306	)		2,090			2,906			3,006
Income tax expense (benefit)		640			(2,116	)		489			682			733
Net income (loss)	$	2,017		$	(6,190	)	$	1,601		$	2,224		$	2,273
Earnings (loss) per common share
Basic		0.27			(0.82	)		0.21			0.30			0.30
Diluted		0.27			(0.82	)		0.21			0.30			0.30
Weighted average common shares outstanding
Basic		7,551,606			7,548,958			7,545,371			7,529,408			7,525,808
Diluted		7,553,208			7,550,766			7,546,200			7,530,151			7,526,376

Net Interest Income

Net interest income was $7.2 million for the quarter ended December 31, 2021, a decrease of $146,000, or 2.0 percent, from $7.3 million for the quarter ended December 31, 2020. The decrease reflected a decrease in interest income of $1.8 million, primarily related to loans, partially offset by $1.7 million decrease in interest paid on deposits and borrowings. The average yield on interest-earning assets declined 33 basis points for the quarter ended December 31, 2021, to 3.48 percent when compared to the same period in 2020 primarily due to the decrease in average loan balances and average yield on loans. The average rate on interest-bearing liabilities fell 61 basis points to 0.69 percent compared to the quarter ended December 31, 2020 due to decreases in market rates of interest. The net interest margin increased to 2.78 percent for the quarter ended December 31, 2021 from 2.62 percent for the comparable period in 2020. The margin improvement experienced in the current period in large part reflected the decline in interest-bearing liabilities partially offset by the decline in yield earned on interest-earning assets.

Other Income

Other income decreased $497,000, or 40.6 percent, during the quarter ended December 31, 2021, compared to the quarter ended December 31, 2020. The decrease in other income was primarily due to a decrease in net gains on sale of investments and loans of $707,000 to $52,000 for quarter ended December 31, 2021 compared to $759,000 for the quarter ended December 31, 2020. This decrease was partially offset by an increase in loan fees of $207,000 to $454,000 during quarter ended December 31, 2021, from $247,000 for the quarter ended December 31, 2020.

Other Expense

Other expense for the quarter ended December 31, 2021, increased $256,000 or 5.1 percent, to $5.2 million when compared to the quarter ended December 31, 2020. The increase was primarily due to increases of $392,000 in professional fees associated with additional work related to fiscal year-end September 30, 2021 and the preparation and filing of the Company's annual report on Form 10-K.

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Income Taxes

TheCompanyrecorded income tax expense of $640,000 during the quarter ended December 31, 2021, compared to $733,000 for the quarter ended December 31, 2020.TheeffectivetaxratefortheCompanyforthe quarters ended December 31, 2021 and December 31, 2020were 24.1 percent and 24.4 percent, respectively.

Statement of Condition Highlights at December 31, 2021

•

Completion of previously announced sale of three problem loans totaling $18.9 million during the quarter ended December 31, 2021. The Company had previously classified these loans as held-for-sale and marked them to fair value at the fiscal year ended September 30, 2021.

•

Non-performing assets ("NPAs") were 0.59 percent and 0.72 percent of total assets at December 31, 2021, and September 30, 2021, respectively.

•

Non-performing loans or NPLs were 0.20 percent and 0.40 percent of total loans at December 31, 2021, and September 30, 2021, respectively.

•

Total assets were $1.2 billion at December 31, 2021, a decrease of $55.9 million, or 4.6 percent, compared to September 30, 2021. The decrease was primarily due to a $44.8 million decline in loans receivable driven by payoffs, paydowns during the quarter and a $19.6 million decrease in loans held-for-sale that were sold during the quarter.

•

Total liabilities were $1.0 billion at December 31, 2021, a decrease of $58.3 million, or 5.5 percent, compared to September 30, 2021. The decrease was primarily due to the repayment of a $30.0 million FHLB advance and a decrease of $25.5 million in total deposits.

•

Book value per common share amounted to $18.97 at December 31, 2021, compared to $18.65 at September 30, 2021.

Linked Quarter Statement of Condition Data

(in thousands, unaudited)

At the quarter ended:	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Cash and due from depository institutions	$	104,568		$	99,670		$	90,441		$	99,358		$	83,764
Interest bearing deposits in depository institutions		30,336		$	36,920			14,513			9,556			25,458
Investment securities, available for sale, at fair value		41,718			40,813			34,502			28,899			35,224
Equity Securities		1,491			1,500		-		-		-
Investment securities held to maturity		39,045			28,507			31,795			25,834			14,161
Restricted stock, at cost		6,294			7,776			7,896			8,891			9,327
Loans Held-for-sale		13,616			33,199		-		-		-
Loans receivable, net of allowance for loan losses		858,204			902,981			940,735			974,596			990,346
Other real estate owned		4,961			4,961			4,961			5,796			5,796
Accrued interest receivable		3,394			3,512			3,370			3,598			4,051
Operating lease right-of-use-assets		1,663			1,796			2,168			2,322			2,479
Property and equipment, net		5,635			5,777			5,902			6,040			6,154
Deferred income taxes, net		3,461			3,530			3,389			3,535			3,601
Bank-owned life insurance		26,224			26,056			25,889			25,725			25,564
Other assets		12,590			12,145			20,183			12,269			14,999
Total assets	$	1,153,200		$	1,209,143		$	1,185,744		$	1,206,419		$	1,220,924
Deposits	$	912,688		$	938,159		$	907,704		$	912,213		$	900,465
FHLB advances		60,000			90,000			90,000			110,000			130,000
Other borrowings	-		-		-		-			5,000
Subordinated debt		24,974			24,934			24,895			24,855			24,816
Operating lease liabilities		1,691			1,830			2,204			2,357			2,512
Other liabilities		9,290			12,052			12,749			11,143			14,865
Shareholders' equity		144,557			142,168			148,192			145,851			143,266
Total liabilities and shareholders' equity	$	1,153,200		$	1,209,143		$	1,185,744		$	1,206,419		$	1,220,924

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Condensed Consolidated Average Statement of Condition

(in thousands, unaudited)

For the quarter ended:	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Investment securities	$	82,126		$	75,004		$	71,811		$	58,559		$	59,135
Interest-bearing cash accounts		32,775			26,339			16,914			21,506			21,690
Loans		913,587			945,457			967,615			990,913			1,032,483
Allowance for loan losses		(14,157	)		(11,730	)		(12,603	)		(13,037	)		(12,462	)
All other assets		163,118			165,439			164,288			165,942			123,919
Total assets	$	1,177,448		$	1,200,509		$	1,208,025		$	1,223,883		$	1,224,765
Non-interest-bearing deposits		54,092			51,534			52,799			50,327			48,152
Interest-bearing deposits		876,270			869,914			868,099			866,153			854,649
FHLB advances		66,848			90,000			99,505			116,889			130,000
Other short-term borrowings		120			-			-			3,111			5,918
Subordinated debt		24,952			24,917			24,877			24,835			24,794
Other liabilities		11,407			14,907			15,399			17,751			18,689
Shareholders' equity		143,760			149,237			147,346			144,817			142,563
Total liabilities and shareholders' equity	$	1,177,448		$	1,200,509		$	1,208,025		$	1,223,883		$	1,224,765

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Deposits

Total deposits decreased $25.5 million, or 2.7 percent, from $938.2 million at September 30, 2021 to $912.7 million at December 31, 2021. The decrease was in the money market and interest-bearing demand categories declining $40.7 million and was driven by the Company's efforts to reduce higher costing money market funds. The decrease was offset in part by increases in non-interest bearing, savings and time categories of approximately $15.3 million.

The following table reflects the composition of the Company's deposits as of the dates indicated.

(in thousands, unaudited)
At quarter ended:	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Demand:
Non-interest-bearing	$	60,320		$	53,849		$	53,365		$	54,210		$	49,264
Interest-bearing		335,411			336,645			329,372			313,865			303,535
Savings		56,342			50,582			51,011			49,601			46,531
Money market		346,023			385,480			359,040			338,100			303,796
Time		114,592			111,603			114,916			156,437			197,339
Total deposits	$	912,688		$	938,159		$	907,704		$	912,213		$	900,465

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Loans

Total net loans amounted to $858.2 million at December 31, 2021, compared to $903.0 million at September 30, 2021, resulting in a net decrease of $44.8 million, or 5.0 percent, for the period driven by higher loan payoffs and paydowns during the period primarily in the commercial loan category. Loans held-for-sale amounted to $13.6 million at December 31, 2021, compared to $33.2 million at September 30, 2021. The decline was primarily related to the sale of three commercial loans totaling $18.9 million with no gains or losses recognized on the sale. Average loan balances for the quarter ended December 31, 2021 totaled $913.6 million as compared to $945.5 million for the quarter ended September 30, 2021, representing a decrease of $31.9 million or 3.4 percent.

At December 31, 2021, gross loans, which excludes loans held-for-sale, remained weighted toward two primary components: the commercial and residential mortgage portfolios, with commercial loans accounting for 69.2 percent and single-family residential real estate loans accounting for 21.6 percent of the gross loan portfolio at such date. Construction and development loans amounted to 6.8 percent and consumer loans represented 2.4 percent of the gross loan portfolio at such date. The decrease in the gross loan portfolio at December 31, 2021, compared to September 30, 2021, primarily reflected decreases of $29.5 million in commercial loans, $11.2 million in residential mortgage loans, and $4.7 million in construction and development loans.

The following table reflects the Company's loan portfolio composition, excluding loans held-for-sale.

(in thousands, unaudited)
At quarter ended:	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Residential mortgage	$	187,516		$	198,710		$	201,737		$	218,165		$	232,481
Construction and Development:
Residential and commercial		56,876			61,492			61,484			76,257			73,000
Land		2,138			2,204			2,253			3,596			3,648
Total construction and development		59,014			63,696			63,737			79,853			76,648
Commercial:
Commercial real estate		416,248			426,915			478,032			482,611			478,808
Farmland		15,582			10,297			10,335			7,344			7,378
Multi-family		54,448			66,332			66,725			67,122			67,457
Commercial and industrial		106,493			115,246			97,955			94,706			101,852
Other		7,433			10,954			10,896			9,927			10,010
Total commercial		600,204			629,744			663,943			661,710			665,505
Consumer:
Home equity lines of credit		13,174			13,491			12,822			15,936			16,389
Second mortgages		5,384			5,884			7,039			8,114			9,097
Other		2,282			2,299			2,372			2,650			2,388
Total consumer		20,840			21,674			22,233			26,700			27,874
Total loans		867,574			913,824			951,650			986,428			1,002,508
Deferred loan costs, net		667		629		685		769		873
Allowance for loan losses		(10,037	)		(11,472	)		(11,600	)		(12,601	)		(13,035	)
Loans Receivable, net	$	858,204		$	902,981		$	940,735		$	974,596		$	990,346

At December 31, 2021, the Company had $133.6 million in overall undisbursed loan commitments, which consisted primarily of available usage from active construction facilities, unused commercial lines of credit, and home equity lines of credit.

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Asset Quality

Non-accrual loans totaled $1.8 million at December 31, 2021, and $3.7 million at September 30, 2021. The decrease in non-accrual loans was primarily due a partial charge down of $1.4 million related to one non-accrual commercial and industrial loan. This loan had a specific allocation of $1.5 million previously reported at September 30, 2021. The partial charge-off was the result of the ongoing monitoring and evaluation of classified loan values and is reflective of the change in current market and economic conditions of the borrower. Performing troubled debt restructured ("TDR")loans were $6.2 million at December 31, 2021, and $17.6 million at September 30, 2021. The decrease is primarily related to two TDR commercial real estate loans totaling $11.4 million that were sold during the period, with no gains or losses recognized on the sale, as part of the note sale previously announced and mentioned above.

At December 31, 2021, NPAs totaled $6.8 million, or 0.59 percent of total assets, as compared with $8.7 million, or 0.72 percent of total assets, at September 30, 2021. The decrease in NPAs is due to the decrease in non-accrual loans as described above. Other real estate owned or OREO, which is comprised of one commercial real estate property, totaled $5.0 million for quarters ended December 31, 2021 and September 30, 2021.

Non-Performing Asset and Other Asset Quality Data:

(dollars in thousands, unaudited)
As of or for the quarter ended:	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Non-accral loans(2)	$	1,790		$	3,697		$	23,547		$	22,281		$	16,240
Loans 90 days or more past due and still accruing		-			-		212		765		775
Total non-performing loans		1,790			3,697			23,759			23,046			17,015
OREO		4,961			4,961			4,961			5,796			5,796
Total NPAs	$	6,751		$	8,658		$	28,720		$	28,842		$	22,811
Performing TDR loans	$	6,310		$	17,601		$	23,352		$	22,697		$	16,229
NPAs / total assets		0.59	%		0.72	%		2.42	%		2.39	%		1.87	%
Non-performing loans / total loans		0.21	%		0.40	%		2.50	%		2.34	%		1.70	%
Net charge-off (recoveries)		1,436			10,754			1,001			434			(52	)
Net charge-offs (recoveries) /average loans(1)		0.63	%		4.55	%		0.41	%		0.18	%		-0.02	%
Allowance for loan losses / total loans		1.16	%		1.26	%		1.22	%		1.28	%		1.30	%
Allowance for loan losses / non-performing loans		560.7	%		310.3	%		48.8	%		54.7	%		76.6	%
Total assets		1,153,200			1,209,143			1,185,744			1,206,419			1,220,924
Total gross loans		867,574			913,824			951,650			986,428			1,002,508
Average loans		913,587			945,457			967,615			990,913			1,032,483
Allowance for loan losses		10,037			11,472			11,600			12,601			13,035

(1)

Annualized.

(2)

Non-accrual loans do not include any loans classified as held-for-sale.

The allowance for loan losses at December 31, 2021 amounted to approximately $10.0 million, or 1.16 percent of total gross loans, compared to $11.5 million, or 1.26 percent of total gross loans, at September 30, 2021. The Company did not record a provision for loan losses for the quarter ended December 31, 2021, compared to $10.6 million provision for loan losses for the quarter ended September 30, 2021. The decrease in the allowance for loan losses of $1.4 million or 12.5 percent reflects the Company's improved asset quality and, more specifically, improvement in non-performing loans which declined $1.9 million, or 22.0 percent compared to September 30, 2021.

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Capital

At December 31, 2021 the Company's total shareholders' equity amounted to $144.6 million, or 12.5 percent of total assets, compared to $142.2 million, or 11.8 percent of total assets at September 30, 2021, which continues to exceed all regulatory capital guidelines. At December 31, 2021, the Bank's common equity Tier 1 capital ratio was 17.14 percent, Tier 1 leverage ratio was 13.61 percent, Tier 1 risk-based capital ratio was 17.14 percent and the total risk-based capital ratio was 18.22 percent. At September 30, 2021, the Bank's common equity Tier 1 capital ratio was 16.13 percent, Tier 1 leverage ratio was 13.14 percent, Tier 1 risk-based capital ratio was 16.13 percent and the total risk-based capital ratio was 17.32 percent.

About Malvern Bancorp, Inc.

Malvern Bancorp, Inc. is the holding company for Malvern Bank, National Association ("Malvern Bank"), an institution that was originally organized in 1887 as a federally-chartered savings bank. Malvern Bank now serves as one of the oldest banks headquartered on the Philadelphia Main Line. For more than a century, Malvern Bank has been committed to helping people build prosperous communities as a trusted financial partner, forging lasting relationships through teamwork, respect, and integrity.

Malvern Bank conducts business from its headquarters in Paoli, Pennsylvania, a suburb of Philadelphia, and through its nine other banking locations in Chester and Delaware counties, Pennsylvania, Morristown, New Jersey, its New Jersey regional headquarters and Palm Beach Florida. The Bank also maintains representative offices in Wellington, Florida, and Allentown, Pennsylvania. The Bank's primary market niche is providing personalized service to its client base.

Malvern Bank, through its Private Banking division, provides personalized investment advisory services to individuals, families, businesses, and non-profits. These services include banking, liquidity management, investment services, 401(k) accounts and planning, custody, tailored lending, wealth planning, trust and fiduciary services, family wealth advisory services and philanthropic advisory services.

The Bank offers insurance services though Malvern Insurance Associates, LLC, which provides clients a rich array of financial services, including commercial and personal insurance and commercial and personal lending.

For further information regarding Malvern Bancorp, Inc., please visit our web site at http://ir.malvernbancorp.com. For information regarding Malvern Bank, please visit our web site at http://www.mymalvernbank.com.

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements based on management's current expectations and beliefs concerning future developments and their potential effects on the Company, including, without limitation, plans, strategies and goals, and statements about the Company's expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, and shareholder value creation.

Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the effects of, and changes in, trade, monetary and fiscal policies and laws, including changes in interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the impact of competition and the acceptance of the Company's products and services by new and existing customers; the impact of changes in financial services policies, laws and regulations; technological changes; any oversupply of inventory and deterioration in values of real estate in the markets in which the Company operates, both residential and commercial; the effect of changes in accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the Securities and Exchange Commission ("SEC"), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible other-than-temporary impairment of securities held by the company; the effects of the Company's lack of a widely-diversified loan portfolio, including the risks of geographic and industry concentrations; ability to attract deposits and other sources of liquidity; changes in the competitive environment among financial and bank holding companies and other financial service providers; unanticipated regulatory or judicial proceedings; and the Company's ability to manage the risk involved in the foregoing. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's Annual Report Filed on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC and available at the SEC's Internet site (http://www.sec.gov).

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Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic, including the outbreak of its variants on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus and its variants can be controlled, the effects on general economic conditions, and when and how the economy may be fully reopened, and when and how it will remain as such. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we are subject to any of the following risks, any of which could continue to have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; the economy , and particularly commercial real estate markets may be affected; there may be high levels of unemployment , loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; if the economy is unable to continue to substantially reopen, and there are high levels of unemployment for extended periods of time, loan delinquencies, problem assets, and foreclosures may increase resulting in increased charges and reduced income; collateral for loans, especially commercial real estate, may continue to decline in value, which could cause loan losses to increase; our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; due to fluctuation in interest rates, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our NIM and spread and reducing net income; our cyber security risks are increased as the result of an increase in the number of employees working remotely; and FDIC premiums may increase if the agency experiences additional resolution costs.

The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, unless required by law.

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MALVERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	December 31, 2021			September 30, 2021
(in thousands, except for share and per share data)	(unaudited)
ASSETS
Cash and due from depository institutions	$		104,568			$		99,670
Interest bearing deposits in depository institutions			30,336					36,920
Total cash and cash equivalents			134,904					136,590
Investment securities available for sale, at fair value (amortized cost of $41,810 and $40,756 at December 31, 2021 and September 30, 2021, respectively)			41,718					40,813
Equity Securities (amortized cost of $1,500 at December 2021 & September 2021)			1,491					1,500
Investment securities held to maturity (fair value of $39,316 and $28,913 at December 31, 2021 and September 30, 2021, respectively)			39,045					28,507
Restricted stock, at cost			6,294					7,776
Loans Held-for-sale			13,616					33,199
Loans receivable, net of allowance for loan losses ($10,037 at December 2021 & $11,472 at September 2021)			858,204					902,981
Other real estate owned			4,961					4,961
Accrued interest receivable			3,394					3,512
Operating lease right-of-use-assets			1,663					1,796
Property and equipment, net			5,635					5,777
Deferred income taxes, net			3,461					3,530
Bank-owned life insurance			26,224					26,056
Other assets			12,590					12,145
Total assets	$		1,153,200			$		1,209,143
LIABILITIES
Deposits:
Non-interest bearing	$		60,320			$		53,849
Interest-bearing			852,368					884,310
Total deposits			912,688					938,159
FHLB advances			60,000					90,000
Subordinated debt			24,974					24,934
Advances from borrowers for taxes and insurance			1,583					1,022
Accrued interest payable		779				572
Operating lease liabilities			1,691					1,830
Other liabilities			6,928					10,458
Total liabilities			1,008,643					1,066,975
SHAREHOLDERS' EQUITY
Common stock, $0.01 par value, 50,000,000 shares authorized; 7,816,832 and 7,621,100 issued and outstanding, respectively, at December 31, 2021, and 7,816,832 and 7,622,316 issued and outstanding, respectively, at September 30, 2021			76					76
Additional paid in capital			85,599					85,524
Retained earnings			62,313					60,296
Unearned Employee Stock Ownership Plan (ESOP) shares			(865	)				(901	)
Accumulated other comprehensive income			297					36
Treasury stock, at cost: 194,516 shares at December 31, 2021 and September 30, 2021			(2,863	)				(2,863	)
Total shareholders' equity			144,557					142,168
Total liabilities and shareholders' equity	$		1,153,200			$		1,209,143

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MALVERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

		Three Months Ended December 31,
(in thousands, except for share data)			2021				2020
(unaudited)
Interest and Dividend Income
Loans, including fees		$		8,228			$		10,076
Investment securities, taxable				455					347
Investment securities, tax-exempt				36					24
Dividends, restricted stock				91					141
Interest-bearing cash accounts				13					8
Total Interest and Dividend Income				8,823					10,596
Interest Expense
Deposits				1,045					2,257
Short-term borrowings				-					45
Long-term borrowings				237					607
Subordinated debt				383					383
Total Interest Expense				1,665					3,292
Net interest income				7,158					7,304
Provision for Loan Losses				-					550
Net Interest Income after Provision for Loan Losses				7,158					6,754
Other Income
Service charges and other fees				454					247
Rental income-other				52					54
Net gains on sale of investments				-					355
Net gains on sale of loans				52					404
Earnings on bank-owned life insurance				169					164
Total Other Income				727					1,224
Other Expense
Salaries and employee benefits				2,295					2,272
Occupancy expense				515					542
Federal deposit insurance premium				76					76
Advertising				32					32
Data processing				320					328
Professional fees				1,055					663
Net other real estate owned expense				5					28
Pennsylvania shares tax				170					170
Other operating expenses				760					861
Total Other Expense				5,228					4,972
Income before income tax expense				2,657					3,006
Income tax expense				640					733
Net Income		$		2,017			$		2,273
Earnings per common share
Basic		$		0.27			$		0.30
Diluted		$		0.27			$		0.30
Weighted Average Common Shares Outstanding
Basic				7,551,606					7,525,808
Diluted				7,553,208					7,526,376

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MALVERN BANCORP, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

	Three Months Ended			Three Months Ended			Three Months Ended
(in thousands, except for share and per share data) (annualized where applicable)		12/31/2021				9/30/2021				12/31/2020
(unaudited)
Statements of Operations Data
Interest income	$		8,823			$		8,862			$		10,596
Interest expense			1,665					2,037					3,292
Net interest income			7,158					6,825					7,304
Provision for loan losses			-					10,626					550
Net interest income (loss) after provision for loan losses			7,158					(3,801	)				6,754
Other income			727					579					1,224
Other expense			5,228					5,084					4,972
Income (loss) before income tax expense (benefit)			2,657					(8,306	)				3,006
Income tax expense (benefit)			640					(2,116	)				733
Net income (loss)	$		2,017			$		(6,190	)		$		2,273
Earnings (loss) per Common Share
Basic	$		0.27			$		(0.82	)		$		0.30
Diluted	$		0.27			$		(0.82	)		$		0.30
Statements of Condition Data (Period-End)
Equity Securities	$		1,491			$		1,500			$		1,520
Investment securities available for sale, at fair value	$		41,718			$		40,813			$		33,704
Investment securities held to maturity (fair value of $39,316, $28,913, and $14,745, respectively)			39,045					28,507					14,161
Loans Held-for-sale			13,616					33,199					-
Loans, net of allowance for loan losses			858,204					902,981					990,346
Total assets			1,153,200					1,209,143					1,220,924
Deposits			912,688					938,159					900,465
FHLB advances			60,000					90,000					130,000
Subordinated debt			24,974					24,934					24,816
Shareholders' equity			144,557					142,168					143,266
Common Shares Dividend Data
Cash dividends	$		-			$		-			$		-
Weighted Average Common Shares Outstanding
Basic			7,551,606					7,537,408					7,525,808
Diluted			7,553,208					7,538,116					7,526,376
Operating Ratios
Return on average assets			0.69	%				(2.06	%)				0.74	%
Return on average equity			5.61	%				(16.59	%)				6.38	%
Average equity / average assets			12.21	%				12.43	%				11.64	%
Book value per common share (period-end)	$		18.97			$		18.65			$		18.83
Non-Financial Information (Period-End)
Common shareholders of record			376					379					388
Full-time equivalent staff			79					81					80

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