Hanover Bancorp, Inc. /MD 10-K

Item 9A. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports filed or submitted pursuant to the Securities Exchange Act of 1934, as amended (“Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that information required to be disclosed by the Company in its Exchange Act reports is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of its management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) and 15d-15(e) as of September 30, 2022. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of such date. (b) Management’s Report on Internal Control over Financial Reporting The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) of the Exchange Act. The Company’s internal control system is a process designed to provide reasonable assurance to the Company’s management, Board of Directors and shareholders regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on our financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As part of the Company’s program to comply with Section 404 of the Sarbanes-Oxley Act of 2002, our management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2022 (the “Assessment”). In making this Assessment, management used the control criteria framework of the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission published in its report entitled Internal Control - Integrated Framework (2013). Management’s Assessment included an evaluation of the design of the Company’s internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Management reviewed the results of its Assessment with the Audit Committee. Based on this Assessment, management determined that, as of September 30, 2022, the Company’s internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. 100 Table of Contents There has been no change in the Company’s internal control over financial reporting during the quarter ended September 30, 2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. ​ This Annual Report does not include an attestation report of the independent registered public accounting firm because Hanover Bancorp, Inc. is an emerging growth company. ​ Item 9B. Other Information None. ​ 101 Table of Contents ​ Part III Item 10. Directors, Executive Officers and Corporate Governance The information regarding Directors, Executive Officers and Corporate Governance will be set forth in the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on February 21, 2023 and is incorporated herein by reference thereto. ​ Item 11. Executive Compensation The information regarding Executive Compensation will be set forth in the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on February 21, 2023 and is incorporated herein by reference thereto. ​ ​ ​ Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information regarding Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters will be set forth in the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on February 21, 2023 and is incorporated herein by reference thereto. ​ The following table provides information with respect to the equity securities that are authorized for issuance under the Company’s equity compensation plans as of September 30, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity Compensation Plan Information ​ ​ ​ ​ Number of securities ​ ​ ​ Number of securities ​ ​ ​ remaining available ​ ​ to be issued upon ​ Weighted-average ​ for issuance under ​ ​ exercise of ​ exercise price of ​ equity compensation ​ ​ outstanding options, ​ outstanding options, ​ plans (excluding ​ ​ warrants and rights ​ warrants and rights ​ securities reflected in ​ ​ (A) ​ (B) ​ column (A)) (C) Equity compensation plans approved by shareholders ​ 227,406 ​ $ 9.50 ​ 36,935 Equity compensation plans not approved by shareholders ​ — ​ — ​ 284,472 Total ​ 227,406 ​ $ 9.50 ​ 321,407 ​ ​ Item 13. Certain Relationships and Related Transactions, and Director Independence The information regarding Certain Relationships and Related Transactions, and Director Independence will be set forth in the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on February 21, 2023 and is incorporated herein by reference thereto. ​ Item 14. Principal Accounting Fees and Services The information regarding the Company’s independent registered public accounting firm’s fees and services will be set forth in the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on February 21, 2023 and is incorporated herein by reference thereto. ​ ​ 102 Table of Contents ​ Part IV Item 15. Exhibits, Financial Statement Schedules (a) Financial Statements and Schedules: The following financial statements and supplementary data are filed as part of this annual report: ​ ​ ​ Page Report of Independent Registered Public Accounting Firm (PCAOB ID 173 ) 57 Consolidated Statements of Financial Condition 58 Consolidated Statements of Income 59 Consolidated Statements of Comprehensive Income 60 Consolidated Statements of Changes in Stockholders’ Equity 61 Consolidated Statements of Cash Flows 62 Notes to Consolidated Financial Statements 63 (b) Exhibits. The following is a list of Exhibits to this annual report. Exhibit ​ ​ ​ ​ No. Description ​ ​ ​ 3.1 ​ Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(i) to Registration Statement on Form S-4 filed on January 20, 2021) 3.1(i) ​ Certificate of Amendment to Certificate of Incorporation designation the of Series A Convertible Perpetual Preferred Stock filed with the New York Secretary of State on October 25, 2022 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-k filed on October 31, 2022) 3.1(ii) ​ Bylaws (incorporated by reference to Exhibit 3.1(ii) to Registration Statement on Form S-4 filed on January 20, 2021) 10.1 ​ Second Amended and Restated Employment Agreement effective as of the 1st day of January, 2015, by and between Michael P. Puorro and Hanover Community Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 30, 2021) 10.2 ​ Third Amended and Restated Employment Agreement effective as of the 24th day of July, 2017, by and between Brian Finneran and Hanover Community Bank (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on July 30, 2021) 10.3 ​ Amended and Restated Change in Control Agreement with Kevin Corbett (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on July 30, 2021) 10.4 ​ Hanover Community Bank 2013 Stock Option Plan (incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-4 filed on January 20, 2021) 10.5 ​ Savoy Bank 2013 Stock Option Plan (incorporated by reference to Exhibit 4.2 to Form S-8 filed on June 17, 2021) 10.6 ​ Hanover Community Bank 2015 Restricted Stock Plan (incorporated by reference to Exhibit 10.5 to Registration Statement on Form S-4 filed on January 20, 2021) 10.7 ​ Hanover Community Bank 2016 Stock Option Plan (incorporated by reference to Exhibit 10.6 to Registration Statement on Form S-4 filed on January 20, 2021) 10.8 ​ 2018 Equity Compensation Plan (incorporated by reference to Exhibit 10.7 to Registration Statement on Form S-4 filed on January 20, 2021) 10.9 ​ Hanover Bancorp 2021 Equity Compensation Plan (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8- K filed on July 30, 2021) 10.10 ​ Indenture between Hanover Bancorp, Inc. and U.S. Bank, National Association dated October 7, 2020 (incorporated by reference from Exhibit 10.8 to Registration Statement on Form S-4 filed on January 20, 2021) 103 Table of Contents 10.11 ​ First Supplemental Indenture between Hanover Bancorp, Inc. and U.S. Bank National Association dated October 7, 2020 (incorporated by reference from Exhibit 10.9 to Registration Statement on Form S-4 filed on January 20, 2021) 10.12 ​ Amended and Restated Employment Agreement with McClelland Wilcox (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on July 30, 2021) 10.13 ​ Amended and Restated Change in Control Agreement with Lance P. Burke (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 17, 2021) 10.14 ​ Retirement and Transition Agreement (Certain confidential portions (as indicated therein) of this exhibit have been omitted.) (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-k filed on October 17, 2022) 10.15 ​ Exchange Agreement dated October 28, 2022 with Castle Creek Partners VIII, L.P. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 31, 2022) 10.16 ​ Board Observer Agreement dated October 28, 2022 with Castle Creek Partners VIII, L.P. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on October 31, 2022) 21.1 ​ Subsidiaries (incorporated by reference to Exhibit 21.1 to Registration Statement on Form S-4 filed on January 20, 2021) 23.1 ​ Consent of Crowe LLP (filed herewith) 31.1 ​ Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 31.2 ​ Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002. 32.1 ​ Section 1350 Certification of Chief Executive Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 ​ Section 1350 Certification of Chief Financial Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS ​ XBRL Instance Document 101.SCH ​ XBRL Taxonomy Extension Schema Document 101.CAL ​ XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB ​ XBRL Taxonomy Extension Labels Linkbase Document 101.PRE ​ XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF ​ XBRL Taxonomy Extension Definitions Linkbase Document 104 ​ Cover Page Interactive Data File (filed herewith) ​ ​ Item 16. Form 10-K Summary None. ​ 104 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ HANOVER BANCORP, INC. ​ Registrant ​ ​ December 22, 2022 /s/ Michael P. Puorro ​ Michael P. Puorro ​ Chairman and Chief Executive Officer ​ ​ December 22, 2022 /s/ Lance P. Burke ​ Lance P. Burke ​ Executive Vice President and Chief Financial Officer ​ ​ December 22, 2022 /s/ Lisa A. Diiorio ​ Lisa A. Diiorio ​ Senior Vice President, Chief Accounting Officer ​ ​ ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ​ ​ ​ December 22, 2022 /s/ Varkey Abraham ​ Varkey Abraham ​ Director ​ ​ December 22, 2022 /s/ Robert Golden ​ Robert Golden ​ Director ​ ​ December 22, 2022 /s/ Ahron Haspel ​ Ahron Haspel ​ Director ​ ​ December 22, 2022 /s/ Michael Katz ​ Michael Katz ​ Director ​ ​ December 22, 2022 /s/ Metin Negrin ​ Metin Negrin ​ Director ​ ​ December 22, 2022 /s/ Philip Okun ​ Philip Okun ​ Director ​ ​ December 22, 2022 /s/ Elena Sisti ​ Elena Sisti ​ Director ​ ​ December 22, 2022 /s/ John Sorrenti ​ John Sorrenti ​ Director ​ ​ ​ ​ ​ ​ 105