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Press Release

Randolph Bancorp, Inc. Announces Second Quarter and Year-to-Date 2019 Financial Results

Company Release - 7/23/2019 6:42 PM ET

STOUGHTON, Mass., July 23, 2019 (GLOBE NEWSWIRE) -- Randolph Bancorp, Inc. (the “Company”) (NASDAQ Global Market: RNDB), the holding company for Envision Bank (the “Bank”), today announced net income of $1,506,000, or $0.28 per share, for the three months ended June 30, 2019 compared to a net loss of $1,010,000, or $0.18 per share, for the three months ended June 30, 2018. Net income for the six months ended June 30, 2019 was $1,455,000, or $0.27 per share, compared to a net loss of $1,717,000, or $0.31 per share, for the six months ended June 30, 2018.  

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At June 30, 2019, total assets amounted to $652.6 million compared to $614.3 million at March 31, 2019, an increase of $38.3 million, or 6.2%. During this quarterly period, loans held for sale increased by $60.9 million while portfolio loans decreased by $32.0 million. These changes were affected by management’s decision to transfer $28.6 million in residential mortgage portfolio loans to loans held for sale.

James P. McDonough, President and Chief Executive Officer, stated, “The decrease in mortgage rates over the past several months has provided homeowners the opportunity to realize a meaningful reduction in their monthly mortgage payments and has also provided home buyers increased opportunities to purchase a home. With our expanded team of loan originators, we were able to capitalize on the resulting market growth for residential mortgages. During the second quarter of 2019, we originated $226.2 million in residential mortgages compared to $145.9 million in the prior year quarter, an increase of 55%. Refinanced loans accounted for $60.8 million, or 75%, of this increase. The surge in residential mortgage loan production combined with the continuing flow of borrower applications resulted in a $3.2 million, or 173%, increase in the gain on loan origination and sales activities in the second quarter of 2019 compared to the prior year quarter. We are optimistic that this higher production level will continue in the third quarter.”

Mr. McDonough added, “With the decline in interest rates, we also saw an opportunity to reduce our portfolio of lower-yielding residential mortgage loans. With the transfer of $28.6 million of such loans from portfolio to loans held for sale, we positioned the portfolio for future growth of both commercial and residential real estate loans.”

Second Quarter Operating Results
Net interest income increased by $456,000, or 11.3%, to $4.5 million for the three months ended June 30, 2019 compared to the same period in the prior year. This increase was due to an increase in average interest-earning assets between periods of $100.9 million, or 19.5%, as the Company continued to leverage the capital raised in its 2016 initial public offering. The net interest margin decreased in the second quarter of 2019 to 2.91% from 3.12% in the second quarter of 2018 due primarily to greater utilization of wholesale funding to support loan growth, the rising cost of both deposits and borrowings due to a series of increases in the federal funds rate throughout 2018, and a continuing flattening of the yield curve.

The Company recognized a credit of $144,000 to the allowance for loan losses for the three months ended June 30, 2019 compared to a credit of $90,000 for the three months ended June 30, 2018. The credit to the allowance in the 2019 period was primarily due to decreases in the loan portfolio attributable to the transfer of residential mortgages loans to loans held for sale and the repayment of a large commercial and industrial loan. In the second quarter of 2018, management reduced the general component of the allowance for loan losses for both commercial real estate loans and home equity loans which lead to the credit to the provision of $90,000. The allowance for loan losses was 0.91% of total loans at June 30, 2019 and December 31, 2018 and was 179.4% of non-performing loans at June 30, 2019 compared to 121.1% at December 31, 2018.

Non-interest income increased $3.1 million to $5.9 million for the three months ended June 30, 2019 from $2.8 million for the three months ended June 30, 2018 due entirely to an increase of $3.2 million, or 173.4%, in the gain on loan origination and sale activities. This increase was volume related due to the addition of nearly 20 loan originators over the past twelve months and the favorable interest rate environment. Beginning in the first quarter of 2019, interest rates on mortgage loans began to decline which lead to the first significant increase in loan refinancing activity experienced in nearly three years. Together these factors resulted in a 77.7% increase in loans sold during the second quarter of 2019 as compared to the prior year period, and a fourfold increase in the pipeline of interest rate lock agreements with customers at June 30, 2019 as compared to June 30, 2018.  The increase in the gain on loan origination and sale activities was partially offset by a decrease in net loan servicing fees due to a fair value adjustment for mortgage servicing rights of $114,000 as loan prepayment speeds were adjusted higher to reflect lower interest rates.

Non-interest expenses increased $951,000, or 12.0%, to $8.9 million for the three months ended June 30, 2019 from $7.9 million for the three months ended June 30, 2018.  Salaries and employee benefits increased $1.1 million, or 22.4%, between periods due to an increase in loan originator commissions and other compensation of $568,000 attributable to Envision Mortgage’s increased loan production. Also contributing to the increase in salaries and employee benefits was $307,000 in additional incentive compensation and loan officer transition payments, and $366,000 in additional employee compensation largely related to Envision Mortgage’s increased loan production. These increases were partially offset by an increase in deferred loan origination costs and fees of $225,000.

Due to the sale of the Boston branch and the partial closure of the Andover operations center in the fourth quarter of 2018, occupancy and equipment costs declined by $86,000 for the three months ended June 30, 2019 compared to the same period in the prior year. In addition, spending on marketing and professional services were reduced by $141,000 and $33,000, respectively, between periods. The savings in marketing expenses was caused by advertising in the prior year associated with the re-branding to Envision Bank. The increase in other non-interest expenses was driven by the increase in Envision Mortgage’s loan production.

The provision for income taxes for the three months ended June 30, 2019 includes a state income tax provision of $82,000 and reversal of the federal tax benefit recognized in the first quarter of 2019. The state tax provision is based on the projected effective state tax rate for the year. The reversal of the federal tax benefit recognized was fully offset by a tax benefit included in other comprehensive income.

The Company has a net operating loss carryforward (“NOL”) for federal tax purposes of $13.6 million. Since 2014, the NOL as well as other deferred tax assets have been subject to a full valuation allowance, which totaled $2.7 million at June 30, 2019. The valuation allowance for net deferred tax assets was reduced in 2019 due to the impact of the Company’s earnings on the NOL. We evaluate the tax valuation allowance on a quarterly basis. Based on recent operating results, we concluded that the valuation allowance should be maintained at June 30, 2019.

Year-to-Date Operating Results
Net interest income increased by $853,000, or 10.6%, for the six months ended June 30, 2019 compared to the same period in the prior year. This increase was due to an increase in average interest-earning assets between periods of $88.8 million, or 17.5%, as the Company continued to leverage the capital raised in its 2016 initial public offering.  The net interest margin decreased in the first half of 2019 to 2.97% from 3.16% in the first half of 2018 due primarily to greater utilization of wholesale funding to support loan growth, the rising cost of both deposits and borrowings due to a series of increases in the federal funds rate throughout 2018 and a continuing flattening of the yield curve.

The Company recognized a credit of $144,000 to the allowance for loan losses for the six months ended June 30, 2019 compared to a provision of $5,000 for the six months ended June 30, 2018. The credit to the allowance in the 2019 period was primarily due to decreases in the loan portfolio attributable to the transfer of residential mortgages loans to loans held for sale and the repayment of a large commercial and industrial loan. In the second quarter of 2018, management reduced the unallocated portion of the allowance for loan losses for both commercial real estate loans and home equity loans. The unallocated reserve for consumer loans was increased slightly during the quarter. Together these changes reduced the amount that would have been provided based on growth in the loan portfolio by $265,000.

Non-interest income increased $4.1 million to $9.3 million for the six months ended June 30, 2019 from $5.2 million for the six months ended June 30, 2018 due entirely to an increase of $4.3 million, or 125.1%, in the gain on loan origination and sale activities. This increase was volume related due to the addition of nearly 20 loan originators over the past twelve months and the favorable interest rate environment. Beginning in the first quarter of 2019, interest rates on mortgage loans began to decline which lead to the first significant increase in loan refinancing activity experienced in nearly three years. Together these factors resulted in a 36.6% increase in loans sold during the first half of 2019 as compared to the prior year period, and a fourfold increase in the pipeline of interest rate lock agreements with customers at June 30, 2019 as compared to June 30, 2018. The increase in the gain on loan origination and sale activities was partially offset by a decrease in net loan servicing fees due to a fair value adjustment for mortgage servicing rights of $114,000 as loan prepayment speeds were adjusted higher to reflect lower interest rates.

Non-interest expenses increased $1.8 million, or 12.3%, to $16.7 million for the six months ended June 30, 2019 from $14.9 million for the six months ended June 30, 2018. Salaries and employee benefits increased $2.1 million, or 22.2%, between periods due to an increase in loan originator commissions and other compensation of $940,000 attributable to Envision Mortgage’s increased loan production. Also contributing to the increase in salaries and employee benefits was $617,000 in additional incentive compensation and loan officer transition payments, and $563,000 in additional employee compensation largely related to Envision Mortgage’s increased loan production. These increases were partially offset by an increase in deferred loan origination costs and fees of $357,000.

Due to the sale of the Boston branch and the partial closure of the Andover operations center in the fourth quarter of 2018, occupancy and equipment costs declined by $128,000 for the six months ended June 30, 2019 compared to the same period in the prior year. In addition, spending on marketing was reduced by $255,000 between periods. The savings in marketing expenses was caused by advertising in the prior year associated with the re-branding to Envision Bank. The increase in other non-interest expenses was driven by the increase in Envision Mortgage’s loan production.

State income taxes of $83,000 and $8,000 were provided during the six months ended June 30, 2019 and 2018, respectively.

Balance Sheet
Total assets were $652.6 million at June 30, 2019 compared to $614.3 million at December 31, 2018, an increase of $38.2 million, or 6.2%. This growth resulted from an increase of $64.3 million in loans held for sale, partially offset by a decrease of $32.0 million in portfolio loans. These changes were significantly impacted by management’s decision in the second quarter of 2019 to transfer $28.6 million in residential mortgage loans from portfolio to loans held for sale. All except $2.2 million of these loans are currently under agreement to be sold with an expected closing date in the first half of August. The decision to sell these loans was made in light of favorable market conditions caused by a reduction in long-term interest rates. The increase in loans held for sale was also affected by the $80.3 million, or 55.0%, increase in Envision Mortgage’s loan production in the second quarter of 2019 as compared to the prior year period. The increase in total assets was largely funded by an increase of $32.5 million in advances from the Federal Home Loan Bank of Boston.

Net loans totaled $451.9 million at June 30, 2019, a decrease of $32.0 million, or 6.6%, from December 31, 2018.  This decrease occurred across all categories of real estate secured loans and was primarily the result of the aforementioned transfer of residential mortgage loans to loans held for sale. Commercial and industrial loans decreased by $6.7 million during the first half of 2019 due in large part to a $4.7 million payoff of a loan participation with a super-regional bank. No new loan participations were purchased during the first half of 2019. Consumer loans, which consist primarily of purchased loans, decreased by a total of $1.9 million during the first half of 2019 as loan repayments exceeded loan purchases during the period. 

Deposits increased $4.5 million, or 1.0%, to $441.6 million at June 30, 2019 from $437.1 million at December 31, 2018. Included in this increase was $2.1 million of brokered deposits. Non-brokered deposits increased $2.4 million during the first half of 2019. In December 2018, we closed our Boston branch. During the first half of 2019, the Bank experienced $7.5 million of deposit run-off with customers associated with this former branch which has adversely affected deposit growth.

Total stockholders’ equity was $79.4 million at June 30, 2019 compared to $78.0 million at December 31, 2018. The increase of $1.4 million during the first half of 2019 was due to net income of $1.5 million, an increase in the fair value of available-for-sale securities of $1.4 million and equity adjustments of $598,000 related to the stock benefit plan and employee stock ownership plan. These increases were partially offset by stock repurchases of $2.0 million as the Company repurchased 136,923 of its shares during the first half of 2019. The Company’s tier one capital to average assets was 12.4% at June 30, 2019 compared to 14.1% at December 31, 2018. The Bank exceeded all regulatory capital requirements at June 30, 2019. 

About Randolph Bancorp, Inc.
Randolph Bancorp, Inc. is the holding company for Envision Bank and its Envision Mortgage Division. Envision Bank is a full-service community bank with five retail branch locations, loan operations centers in North Attleboro and Stoughton, Massachusetts, eight loan production offices located throughout Massachusetts and one loan production office in Southern New Hampshire.

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

Forward Looking Statements
Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risk factors described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

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


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

  June 30,  December 31, 
  2019  2018 
       
Assets  
Cash and due from banks $  3,614  $  3,451 
Interest-bearing deposits   7,561    3,667 
Total cash and cash equivalents   11,175    7,118 
       
Certificates of deposit   2,205    2,205 
Securities available for sale, at fair value   48,851    50,556 
Loans held for sale, at fair value   102,784    38,474 
Loans, net of allowance for loan losses of $4,154 in 2019 and $4,437 in 2018   451,870    483,846 
Federal Home Loan Bank of Boston stock, at cost   5,375    4,700 
Accrued interest receivable   1,665    1,504 
Mortgage servicing rights, net   8,201    7,786 
Premises and equipment, net    6,162    6,368 
Bank-owned life insurance   8,349    8,256 
Foreclosed real estate, net   90    65 
Other assets   5,842    3,462 
       
Total assets $  652,569  $  614,340 
       
Liabilities and Stockholders' Equity  
Deposits:      
Non-interest bearing $  65,420  $  64,229 
Interest bearing   313,584    312,321 
Brokered   62,649    60,580 
Total deposits   441,653    437,130 
       
Federal Home Loan Bank of Boston advances   121,553    89,036 
Mortgagors' escrow accounts   1,863    2,129 
Post-employment benefit obligations   2,424    2,551 
Other liabilities    5,723    5,533 
Total liabilities   573,216    536,379 
       
Stockholders' Equity:      
Common stock   58    60 
Additional paid-in capital   54,083    55,608 
Retained earnings    29,784    28,329 
ESOP-Unearned compensation   (4,038)   (4,132)
Accumulated other comprehensive loss, net of tax   (534)   (1,904)
Total stockholders' equity   79,353    77,961 
       
Total liabilities and stockholders' equity $  652,569  $  614,340 


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

  Three Months Ended
June 30, 
  Six Months Ended
June 30,
 
  2019  2018  2019  2018 
Interest and dividend income:            
Loans $  6,058  $  4,586  $  11,646  $  8,881 
Other interest and dividend income   396    453    824    885 
Total interest and dividend income   6,454    5,039    12,470    9,766 
             
Interest expense   1,965  1,006    3,602  1,751 
             
Net interest income   4,489    4,033    8,868    8,015 
Provision (credit) for loan losses    (144)   (90)   (144)   5 
             
Net interest income after provision (credit) for loan losses   4,633    4,123    9,012    8,010 
             
Non-interest income:            
Customer service fees   362  439    691  739 
Gain on loan origination and sale activities, net   5,068    1,854    7,656    3,401 
Mortgage servicing fees, net   224    291    543    625 
Gain on sales of securities   -    -    -    49 
Other   201    199    378    376 
Total non-interest income   5,855    2,783    9,268    5,190 
             
Non-interest expenses:            
Salaries and employee benefits    6,092    4,979    11,504    9,415 
Occupancy and equipment    643    729    1,299    1,427 
Professional fees   287    320    555    572 
Marketing   180    321    369    624 
Other non-interest expenses   1,661    1,563    3,015    2,871 
Total non-interest expenses   8,863    7,912    16,742    14,909 
             
Income (loss) before income taxes   1,625    (1,006)   1,538    (1,709)
Income tax expense   119    4    83    8 
             
Net income (loss) $  1,506  $  (1,010) $  1,455  $  (1,717)
             
Net income (loss) per share (basic and diluted) $  0.28  $  (0.18) $  0.27  $  (0.31)
             
Weighted average shares outstanding   5,455,679    5,577,683    5,467,057    5,592,809 


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

 Average Balance and Yields
 For the Three Months Ended June 30,
 2019
 2018
 Average   Interest Average   Average  Interest Average  
 Outstanding  Earned/ Yield/   Outstanding  Earned/ Yield/ 
(Dollars in thousands)Balance  Paid Rate  Balance  Paid Rate 
Interest-earning assets:               
  Loans (1)$  558,643  $  6,058 4.34% $  448,060  $  4,586 4.09%
  Investment securities(2) (3)  53,947    373 2.77%   60,290    425 2.82%
  Interest-earning deposits  5,915    26 1.76%   9,240    34 1.47%
Total interest-earning assets  618,505    6,457 4.18%   517,590    5,045 3.90%
Noninterest-earning assets  23,820         29,660      
Total assets$  642,325       $  547,250      
Interest-bearing liabilities:               
  Savings accounts  103,849    106 0.41%   104,470    45 0.17%
  NOW accounts  39,130    49 0.50%   43,113    58 0.54%
  Money market accounts  61,361    232 1.51%   69,626    161 0.92%
  Term certificates  169,740    834 1.97%   125,973    466 1.48%
Total interest-bearing deposits  374,080    1,221 1.31%   343,182    730 0.85%
  FHLB advances  118,364    744 2.51%   57,562    276 1.92%
Total interest-bearing liabilities  492,444    1,965 1.60%   400,744    1,006 1.00%
Noninterest-bearing liabilities:               
  Noninterest-bearing deposits  62,377         60,524      
  Other noninterest-bearing liabilities  8,270         6,340      
Total liabilities  563,091         467,608      
Total stockholders' equity  79,234         79,642      
Total liabilities and stockholders' equity$  642,325       $  547,250      
Net interest income   $  4,492       $  4,039   
Interest rate spread(4)     2.58%      2.90%
Net interest-earning assets(5)$  126,061       $  116,846      
Net interest margin(6)     2.91%      3.12%
                
Ratio of interest-earning assets to interest-bearing liabilities125.60%      129.16%     


(1)Includes nonaccruing loan balances and interest received on such loans.
(2)Includes carrying value of securities classified as available-for-sale and FHLB of Boston stock
(3)Includes tax equivalent adjustments for municipal securities, based on an effective tax rate of 21%, of $3,000 and $6,000 for the three months ended June 30, 2019 and 2018, 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. 


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

 Average Balance and Yields
 For the Six Months Ended June 30,
 2019
 2018
 Average   Interest Average   Average  Interest Average  
 Outstanding  Earned/ Yield/   Outstanding  Earned/ Yield/ 
(Dollars in thousands)Balance  Paid Rate  Balance  Paid Rate 
Interest-earning assets:               
  Loans (1)$  537,549  $  11,646 4.33% $  439,069  $  8,881 4.05%
  Investment securities(2) (3)  54,551    777 2.85%   60,906    844 2.77%
  Interest-earning deposits  5,258    54 2.05%   8,563    64 1.49%
Total interest-earning assets  597,358    12,477 4.18%   508,538    9,789 3.85%
Noninterest-earning assets  24,462         29,498      
Total assets$  621,820       $  538,036      
Interest-bearing liabilities:               
  Savings accounts  102,912    188 0.37%   104,305    87 0.17%
  NOW accounts  39,851    97 0.49%   43,666    111 0.51%
  Money market accounts  66,384    461 1.39%   68,670    276 0.80%
  Term certificates  166,704    1,634 1.96%   113,060    736 1.30%
Total interest-bearing deposits  375,851    2,380 1.27%   329,701    1,210 0.73%
  FHLB advances  97,259    1,222 2.51%   62,010    541 1.74%
Total interest-bearing liabilities  473,110    3,602 1.52%   391,711    1,751 0.89%
Noninterest-bearing liabilities:               
  Noninterest-bearing deposits  62,063         59,809      
  Other noninterest-bearing liabilities  7,952         6,049      
Total liabilities  543,125         457,569      
Total stockholders' equity  78,695         80,467      
Total liabilities and stockholders' equity$  621,820       $  538,036      
Net interest income   $  8,875       $  8,038   
Interest rate spread(4)     2.65%      2.96%
Net interest-earning assets(5)$  124,248       $  116,827      
Net interest margin(6)     2.97%      3.16%
                
Ratio of interest-earning assets to interest-bearing liabilities126.26%      129.82%     


(1)Includes nonaccruing loan balances and interest received on such loans.
(2)Includes carrying value of securities classified as available-for-sale and FHLB of Boston stock
(3)Includes tax equivalent adjustments for municipal securities, based on an effective tax rate of 21%, of $7,000 and $23,000 for the six months ended June 30, 2019 and 2018, 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.


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


 3 Months Ended
 
 June 30, 2019 v. 2018
 
 Increase (Decrease) 
 Total  
 Due to Changes in
 Increase  
 Volume  Rate  (Decrease) 
Interest-earning assets:        
  Loans $  1,186  $  286  $  1,472 
  Investment securities  (44)   (8)   (52)
  Interest-earning deposits  (14)   6    (8)
  Total interest-earning assets  1,128    284    1,412 
Interest-bearing liabilities:        
Savings accounts  -     61    61 
NOW accounts  (5)   (4)   (9)
Money market accounts  (21)   92    71 
Term certificates  190    178    368 
  Total interest-bearing deposits  164    327    491 
FHLBB advances  362    106    468 
  Total interest-bearing liabilities  526    433    959 
         
Change in net interest income$  602  $  (149) $  453 
         
 6 Months Ended
 
 June 30, 2019 v. 2018
 
 Increase (Decrease) 
  Total  
 Due to Changes in
  Increase  
 Volume  Rate  (Decrease) 
Interest-earning assets:        
  Loans $  2,100  $  665  $  2,765 
  Investment securities  (90)   23    (67)
  Interest-earning deposits  (30)   20    (10)
  Total interest-earning assets  1,980    708    2,688 
Interest-bearing liabilities:        
Savings accounts  (1)   102    101 
NOW accounts  (9)   (5)   (14)
Money market accounts  (9)   194    185 
Term certificates  435    463    898 
  Total interest-bearing deposits  416    754    1,170 
FHLBB advances  384    297    681 
  Total interest-bearing liabilities  800    1,051    1,851 
         
Change in net interest income$  1,180  $  (343) $  837 

 

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

  For the Three Months Ended June 30, 2019 
  Envision
Bank
  Envision Mortgage Consolidated Total 
Net interest income $  4,161  $  328 $  4,489 
Credit for loan losses    (144)   -   (144)
         
Net interest income after credit for loan losses   4,305    328   4,633 
         
Non-interest income:        
Customer service fees   322    40   362 
Gain on loan origination and sale activities, net (1)   -    5,289   5,289 
Mortgage servicing fees, net   (92)   316   224 
Other   97    104   201 
Total non-interest income   327    5,749   6,076 
         
Non-interest expenses:        
Salaries and employee benefits    1,786    4,306   6,092 
Occupancy and equipment    370    273   643 
Other non-interest expenses   1,298    830   2,128 
Total non-interest expenses   3,454    5,409   8,863 
         
Income before income taxes and elimination of inter-segment profit $  1,178  $  668   1,846 
         
Elimination of inter-segment profit        (221)
Income before income taxes        1,625 
         
Income tax expense        119 
Net income      $  1,506 


(1)Before elimination of inter-segment profit

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

  For the Three Months Ended June 30, 2018 
  Envision
Bank
  Envision Mortgage  Consolidated Total 
Net interest income $  3,800  $  233  $  4,033 
Credit for loan losses    (90)   -    (90)
          
Net interest income after credit for loan losses   3,890    233    4,123 
          
Non-interest income:         
Customer service fees 410  29    439 
Gain on loan origination and sale activities, net (1)   -    2,265    2,265 
Mortgage servicing fees, net   (73)   364    291 
Other   114    85    199 
Total non-interest income   451    2,743    3,194 
          
Non-interest expenses:         
Salaries and employee benefits    1,612    3,367    4,979 
Occupancy and equipment    373    356    729 
Other non-interest expenses   1,227    977    2,204 
Total non-interest expenses   3,212    4,700    7,912 
          
Income (loss) before income taxes and elimination of inter-segment profit $  1,129  $  (1,724)   (595)
          
Elimination of inter-segment profit         (411)
Loss before income taxes         (1,006)
          
Income tax expense         4 
Net loss       $  (1,010)


(1)Before elimination of inter-segment profit

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

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

  For the Six Months Ended June 30, 2019 
  Envision
Bank
  Envision Mortgage  Consolidated Total 
Net interest income $  8,343  $  525  $  8,868 
Credit for loan losses    (144)   -    (144)
          
Net interest income after credit for loan losses   8,487    525    9,012 
          
Non-interest income:         
Customer service fees   617    74    691 
Gain on loan origination and sale activities, net (1)   -    8,033    8,033 
Mortgage servicing fees, net   (180)   723    543 
Other   222    156    378 
Total non-interest income   659    8,986    9,645 
          
Non-interest expenses:         
Salaries and employee benefits    3,325    8,179    11,504 
Occupancy and equipment    770    529    1,299 
Other non-interest expenses   2,252    1,687    3,939 
Total non-interest expenses   6,347    10,395    16,742 
          
Income (loss) before income taxes and elimination of inter-segment profit $  2,799  $  (884)   1,915 
          
Elimination of inter-segment profit         (377)
Income before income taxes         1,538 
          
Income tax expense         83 
Net income       $  1,455 
          
Total Assets June 30, 2019 $  512,162  $  140,407  $  652,569 


(1)Before elimination of inter-segment profit

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

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

  For the Six Months Ended June 30, 2018 
  Envision
Bank
  Envision Mortgage  Consolidated Total 
Net interest income $  7,539  $  476  $  8,015 
Provision for loan losses    5    -    5 
          
Net interest income after provision for loan losses   7,534    476    8,010 
          
Non-interest income:         
Customer service fees 711  28    739 
Gain on loan origination and sale activities, net (1)   -    4,085    4,085 
Mortgage servicing fees, net   (141)   766    625 
Other   248    177    425 
Total non-interest income   818    5,056    5,874 
          
Non-interest expenses:         
Salaries and employee benefits    3,248    6,167    9,415 
Occupancy and equipment    773    654    1,427 
Other non-interest expenses   2,238    1,829    4,067 
Total non-interest expenses   6,259    8,650    14,909 
          
Income (loss) before income taxes and elimination of inter-segment profit $  2,093  $  (3,118)   (1,025)
          
Elimination of inter-segment profit         (684)
Loss before income taxes         (1,709)
          
Income tax expense         8 
Net loss       $  (1,717)
          
Total Assets June 30, 2018 $  489,214  $  76,695  $  565,909 


(1)Before elimination of inter-segment profit

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


Randolph Bancorp, Inc.
Selected Financial Highlights
(Unaudited)

  Three Months Ended
June 30, 
  Six Months Ended June 30, 
  2019  2018  2019  2018 
             
Return on average assets (1) 0.94% (0.74%) 0.47% (0.64%)
             
Return on average equity (1) 7.60% (5.07%) 3.70% (4.27%)
             
Net interest margin 2.91% 3.12% 2.97% 3.16%
             
Non-interest income to total income 47.57% 35.58% 42.64% 34.70%
             
Efficiency ratio 85.68% 116.08% 92.31% 112.90%
             
Tier 1 capital to average assets (2) 12.41% 14.76% 12.41% 14.76%
             
Nonperforming assets as a percentage of total assets 0.37% 0.35% 0.37% 0.35%
             
Allowance for loan losses as a percentage of total loans (3) 0.91% 0.87% 0.91% 0.87%
             
Allowance for loan losses as a percentage of non-performing loans  179.44% 186.54% 179.44% 186.54%
             
Tangible book value per share   13.70    13.11    13.70    13.11 


(1)Annualized for quarterly and year-to-date periods presented.
(2)Average assets calculated on a quarterly basis for all periods presented
(3)Total loans excludes loans held for sale but includes net deferred loan costs and fees

Source: Envision Bank