Malvern Bancorp, Inc. Reports Fourth Quarter and Fiscal Year End Operating Results

Malvern Bancorp, Inc.

PAOLI, Pa., Dec. 02, 2022 (GLOBE NEWSWIRE) -- Malvern Bancorp, Inc. (NASDAQ: MLVF) (the “Company”), the parent company of Malvern Bank, National Association (the “Bank”), today reported operating results for the fourth fiscal quarter and year ended September 30, 2022. Net income amounted to $2.6 million, or $0.34 per fully diluted common share, compared with a net loss of ($6.2) million, or ($0.82) per fully diluted common share, for the quarter ended September 30, 2021. Annualized return on average assets (“ROAA”) was 1.01% for the quarter ended September 30, 2022, compared to (2.06%) for the quarter ended September 30, 2021, and annualized return on average equity (“ROAE”) was 7.08% for the quarter ended September 30, 2022, compared with (16.59%) for the quarter ended September 30, 2021.

For the fiscal year ended September 30, 2022, net income amounted to $7.0 million, or $0.92 per fully diluted common share, compared with a net loss of ($92,000), or ($0.01) per fully diluted common share, for the fiscal year ended September 30, 2021. ROAA was 0.63% for the fiscal year ended September 30, 2022, compared to (0.01%) for the fiscal year ended September 30, 2021, and ROAE was 4.79% for the fiscal year ended September 30, 2022, compared with (0.06%) for the fiscal year ended September 30, 2021.

“In our fourth quarter we earned $2.6 million in net income and net revenue of $8.5 million with improved returns on average assets and average equity of 1.01% and 7.08% respectively. Results for the period were driven by growth in net interest income supported by stable levels of loans and deposits. Overall our businesses continued to benefit from good underlying consumer and business conditions as well as new business at a measured pace and by continuing to deepen and expand existing relationships, said Anthony C. Weagley, President & CEO. “Credit quality improved during the period and remains stable; during the quarter our net charge-off ratio improved compared to the same period in 2021. We continue to focus on maintaining a sound balance sheet supported by strong capital and liquidity positions. In light of the shifting economic environment and broader macro factors, we continue to plan for continued volatility and the resultant possible outcomes and will continue to manage the Bank in a conservative, disciplined manner, continued Mr. Weagley.

Statement of Operations Highlights for the three months and year ended September 30, 2022

• Net interest margin (“NIM”) increased 65 basis points to 3.26% for the quarter ended September 30, 2022, compared to 2.61% for the quarter ended September 30, 2021. The increase was primarily driven by a reduction in total interest expense.
  
  

• Total interest expense decreased $4.7 million, or 45.1%, to $5.7 million for the fiscal year ended September 30, 2022, compared to $10.4 million for the fiscal year ended September 30, 2021, which resulted primarily from a decrease in average rate and volume of interest-bearing liabilities.
  
  

• Net interest income increased $1.3 million, or 4.5%, to $29.3 million for the fiscal year ended September 30, 2022, compared to $28.1 million for the fiscal year ended September 30, 2021, which resulted from a decrease in average rate and volume of interest-bearing liabilities.
  
  

• The Company did not record a provision for loan losses during the quarter or fiscal year ended September 30, 2022.
  

Linked Quarter Financial Ratios
(unaudited)
As of or for the quarter ended:	9/30/2022			6/30/2022			3/31/2022			12/31/2021			9/30/2021
Return on average assets (1)		1.01	%		0.69	%		0.18	%		0.69	%		(2.06	%)
Return on average equity (1)		7.08	%		5.06	%		1.43	%		5.61	%		(16.59	%)
Net interest margin (1)		3.26	%		2.97	%		2.81	%		2.78	%		2.61	%
Loans / deposits ratio		103.19	%		102.91	%		94.57	%		95.06	%		97.41	%
Shareholders' equity / total assets		14.02	%		14.11	%		13.11	%		12.54	%		11.76	%
Efficiency ratio (2)		62.1	%		70.0	%		91.1	%		66.3	%		68.7	%
Book value per common share	$	19.18		$	19.03		$	18.95		$	18.97		$	18.65

(1)   Annualized.
(2)   3/31/2022 quarter includes the impact of a valuation allowance adjustment related to a held-for-sale commercial real estate loan.

Linked QuarterIncome Statement Data
(unaudited)
(in thousands, except share and per share data)
For the quarter ended:	9/30/2022			6/30/2022			3/31/2022			12/31/2021			9/30/2021
Net interest income	$	7,909		$	7,293		$	6,954		$	7,158		$	6,825
Provision for loan losses		-			-			-			-			10,626
Net interest income (loss) after provision for loan losses		7,909			7,293			6,954			7,158			(3,801	)
Other income		557			482			561			727			579
Other expense		5,254			5,439			6,845			5,228			5,084
Income (loss) before income tax expense		3,212			2,336			670			2,657			(8,306	)
Income tax expense (benefit)		634			502			148			640			(2,116	)
Net income (loss)	$	2,578		$	1,834		$	522		$	2,017		$	(6,190	)
Earnings (loss) per common share
Basic		0.34			0.24			0.07			0.27			(0.82	)
Diluted		0.34			0.24			0.07			0.27			(0.82	)
Weighted average common shares outstanding
Basic		7,574,870			7,569,806			7,554,955			7,551,606			7,548,958
Diluted		7,581,105			7,574,266			7,556,194			7,553,208			7,550,766

Net Interest Income

Net interest income was $7.9 million for the quarter ended September 30, 2022, an increase of $1.1 million, or 15.9%, from $6.8 million for the quarter ended September 30, 2021. For the quarter ended September 30, 2022, NIM increased by 65 basis points to 3.26%, as compared to 2.61% for the quarter ended September 30, 2021. This increase was primarily driven by a reduction in total interest expense as the cost of interest-bearing liabilities decreased by 14 basis points, driven by lower interest rates and average balances of deposits and borrowings, compared to the quarter ended September 30, 2021.

Net interest income was $29.3 million for the fiscal year ended September 30, 2022, an increase of $1.3 million, or 4.5%, from $28.1 million for the fiscal year ended September 30, 2021. For the fiscal year ended September 30, 2022, NIM increased by 33 basis points to 2.95%, as compared to 2.62% for the fiscal year ended September 30, 2021. Consistent with the current quarter, this increase was primarily driven by the decrease in cost of interest-bearing liabilities compared to the fiscal year ended September 30, 2021.

Interest Income

For the quarters ended September 30, 2022 and September 30, 2021, total interest income was $9.3 million and $8.9 million, respectively. Total interest income increased $453,000, or 5.1% for the quarter ended September 30, 2022, compared to the quarter ended September 30, 2021, primarily due to rising interest rates resulting in additional interest income from net loans and investment securities partially offset by lower average loans and investment securities.

For the fiscal year ended September 30, 2022, total interest income was $35.0 million, a decrease of $3.4 million or 8.9%, from $38.4 for the fiscal year ended September 30, 2021. The decrease was driven by a decline in interest earning assets of $78.9 million, resulting from a $129.3 million, or 13.1%, decline in average loans partially offset by an increase of $38.4 million, or 65.5%, of investment securities for the fiscal year ended September 30, 2022, as compared to the same period in fiscal year 2021. During the fiscal year ended September 30, 2022, compared to the same period in fiscal year 2021, the volume-related factors during the period contributed to a decrease in interest income on loans of $4.8 million, while the rate-related factors increased interest income on loans by $247,000.

Interest Expense

For the quarter ended September 30, 2022, interest expense decreased by $631,000, or 31.0%, to $1.4 million, compared to $2.0 million for the quarter ended September 30, 2021. The decrease in interest expense is attributable to lower interest rates and lower average deposits during the comparable period. Total interest-bearing liabilities declined $172.8 million, or 17.6%, to $812.0 million, and the average rate on interest-bearing liabilities fell 14 basis points to 0.69%, compared to 0.83%, during the fiscal year ended September 30, 2022 compared to the same period in fiscal year 2021.

Total interest expense decreased by $4.7 million, or 45.1%, to $5.7 million for the fiscal year ended September 30, 2022, compared to $10.4 million for the fiscal year ended September 30, 2021. Similar to the quarter ended September 30, 2022, the decrease in interest expense is attributable to lower interest rates and lower average deposits and borrowings. The annualized average rate on total interest-bearing liabilities decreased to 0.64% for the fiscal year ended September 30, 2022, from 1.03% for the fiscal year ended September 30, 2021. This decrease primarily reflects a decrease in the average rate of interest-bearing deposits of 0.34% and a decrease in the average rate of borrowings of 0.23%. The decrease in the average rate of interest-bearing deposits consisted of a 40 basis points decrease in the average rate of certificates of deposit, a 22 basis points decrease in the average rate of money market accounts, and a 39 basis points decrease in average rate of other interest-bearing deposit accounts.

Other Income

Other income decreased $22,000, or 3.8%, during the quarter ended September 30, 2022, compared to the quarter ended September 30, 2021. The decrease in other income was primarily due to a decrease in net gains on sale of loans by $23,000 to $22,000 for quarter ended September 30, 2022, compared to $45,000 for the quarter ended September 30, 2021.

For the fiscal year ended September 30, 2022, total other income decreased $1.4 million, or 38.2%, to $2.3 million compared to $3.8 million for the fiscal year ended September 30, 2021. This decrease was primarily the result of a $1.5 million decrease in net gains on sale of investment securities and mortgage loans.

Other Expense

Other expense for the quarter ended September 30, 2022 increased $170,000, or 3.3%, to $5.3 million when compared to the quarter ended September 30, 2021. The increase was primarily due to an increase of $108,000 in other operating expense, primarily related to ongoing real estate taxes paid on one loan held for sale, and a $65,000 increase in professional fees.

Other expense for the fiscal year ended September 30, 2022 increased $1.8 million, or 8.7%, to $22.8 when compared to the fiscal year ended September 30, 2021. The increase was primarily due to $1.5 million of real estate tax expense and $359,000 valuation allowance adjustment on a $13.3 million loan held for sale. Professional fees increased by $653,000 to $3.8 million at September 30, 2022, from $3.2 million at September 30, 2021, primarily due to legal fees associated with loan workouts and related matters concerning nonperforming loans. These increases were offset by a decrease in other real estate owned (“OREO”) expenses of $561,000 to $305,000 at September 30, 2022, when compared to $866,000 for the fiscal year ended September 30, 2021.

Income Taxes

The Company recorded income tax expense of $634,000 during the quarter ended September 30, 2022, compared to an income tax benefit of $2.1 million for the quarter ended September 30, 2021. The effective tax rates for the Company for the quarters ended September 30, 2022 and September 30, 2021 were 19.74% and 25.48%, respectively.

For the fiscal year ended September 30, 2022 income tax expense increased by $2.1 million, to $1.9 million from an income tax benefit of $212,000 for the fiscal year ended September 30, 2021. The effective tax rates for the Company for the fiscal years ended September 30, 2022 and 2021 were 21.68% and 69.74%, respectively.

Statement of Financial Condition Highlights at September 30, 2022

• Non-performing assets (“NPAs”) were 0.12% and 0.72% of total assets at September 30, 2022 and September 30, 2021, respectively.
  
  

• Non-performing loans (“NPLs”) were 0.12% and 0.40% of total loans at September 30, 2022 and September 30, 2021, respectively.
  
  

• The Bank disposed of one $4.7 million other real estate owned property at carrying value and recorded one new $259,000 other real estate owned property, during the September 30, 2022 quarter end period.
  
  

• Total assets were $1.0 billion at September 30, 2022, a decrease of $164.8 million, or 13.6%, compared to September 30, 2021.   The decrease was primarily due to a $101.1 million decline in net loans receivable driven by payoffs and pay downs during the fiscal year period, and $95.0 million decline in cash and due from depository institutions.
  
  

• Total liabilities were $897.9 million at September 30, 2022, a decrease of $169.1 million, or 15.8%, compared to September 30, 2021. The decrease was primarily due to a decrease of $152.8 million in total deposits, and the repayment of a $10.0 million FHLB advance.
  
  

• Book value per common share amounted to $19.18 at September 30, 2022, compared to $18.65 at September 30, 2021.
  

Linked Quarter Statement of Condition Data
(in thousands, unaudited)
At the quarter ended:	9/30/2022		6/30/2022		3/31/2022		12/31/2021		9/30/2021
Cash and due from depository institutions	$	4,677	$	9,560	$	49,674		104,568	$	99,670
Interest bearing deposits in depository institutions		48,590		30,199		72,349		30,336		36,920
Investment securities, available for sale, at fair value		49,844		53,080		54,183		41,718		40,813
Equity securities		1,374		1,412		1,445		1,491		1,500
Investment securities held to maturity, at amortized cost		58,767		52,350		48,512		39,045		28,507
Restricted stock, at cost		7,104		6,027		6,462		6,294		7,776
Loans held-for-sale		13,780		13,863		13,244		13,616		33,199
Loans receivable, net of allowance for loan losses		801,854		805,957		799,310		858,203		902,981
Other real estate owned		259		4,763		4,961		4,961		4,961
Accrued interest receivable		4,252		3,671		3,478		3,394		3,512
Property and equipment, net		5,231		5,365		5,486		5,635		5,777
Deferred income taxes, net		3,722		3,975		3,632		3,461		3,530
Bank-owned life insurance		26,233		26,063		25,896		26,224		26,056
Other assets		18,673		13,268		14,964		14,254		13,941
Total assets	$	1,044,360	$	1,029,553	$	1,103,596	$	1,153,200	$	1,209,143
Deposits	$	785,323	$	791,694	$	854,437	$	912,688	$	938,159
FHLB advances		80,000		60,000		60,000		60,000		90,000
Subordinated debt		25,000		25,000		25,000		24,974		24,934
Other liabilities		7,592		7,569		19,609		10,981		13,882
Shareholders’ equity		146,445		145,290		144,550		144,557		142,168
Total liabilities and shareholders’ equity	$	1,044,360	$	1,029,553	$	1,103,596	$	1,153,200	$	1,209,143

Condensed Consolidated
Average Statement of Condition
(in thousands, unaudited)
For the quarter ended:	9/30/2022		6/30/2022		3/31/2022		12/31/2021		9/30/2021
Investment securities	$	116,004	$	113,539	$	97,697	$	82,126	$	75,004
Interest-bearing cash accounts		26,581		48,161		36,452		32,775		26,339
Loans, net of allowance for loan losses		817,938		811,829		846,420		899,430		933,727
All other assets		62,134		93,481		148,374		163,117		165,439
Total assets	$	1,022,657	$	1,067,010	$	1,128,943	$	1,177,448	$	1,200,509
Non-interest-bearing deposits	$	57,195	$	57,479	$	54,501	$	54,092	$	51,534
Interest-bearing deposits		718,760		767,843		829,050		876,269		869,914
FHLB advances		67,174		60,000		60,000		66,847		90,000
Other short-term borrowings		1,087		-		-		120		-
Subordinated debt		25,000		25,000		24,990		24,952		24,917
Other liabilities		7,762		11,658		14,250		11,408		14,907
Shareholders’ equity		145,678		145,030		146,152		143,760		149,237
Total liabilities and shareholders’ equity	$	1,022,657	$	1,067,010	$	1,128,943	$	1,177,448	$	1,200,509

Deposits

Total deposits decreased $152.8 million, or 16.3%, from $938.2 million at September 30, 2021 to $785.3 million at September 30, 2022. The decrease in deposits was primarily related to a reduction of $105.8 million in money market deposits and $95.8 million in interest-bearing deposits, partially offset by an increase of $39.9 million in time deposits.

The Company continues to focus on the maintenance and development of its deposit base strategically with its funding requirements and liquidity needs, with an emphasis on serving the needs of its communities to provide a long-term relationship base to efficiently compete for and retain deposits in its market.

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

(in thousands, unaudited)
At quarter ended:	9/30/2022		6/30/2022		3/31/2022		12/31/2021		9/30/2021
Demand:
Non-interest-bearing	$	58,014	$	56,731	$	54,712	$	60,320	$	53,849
Interest-bearing		240,819		270,532		302,468		335,411		336,645
Savings		55,288		54,184		54,074		56,342		50,582
Money market		279,699		301,165		328,324		346,023		385,480
Time		151,503		109,082		114,859		114,592		111,603
Total deposits	$	785,323	$	791,694	$	854,437	$	912,688	$	938,159

Loans

Total net loans amounted to $801.9 million at September 30, 2022, compared to $903.0 million at September 30, 2021, resulting in a net decrease of $101.1 million, or 11.2%, for the period, driven by higher loan payoffs and paydowns during the period primarily in the commercial and construction and development loan categories. Loans held-for-sale amounted to $13.8 million at September 30, 2022, compared to $33.2 million at September 30, 2021. The decline in loans held-for-sale was primarily related to the sale in the December 31, 2021 quarter of three commercial loans totaling $18.9 million. Average loan balances for the year ended September 30, 2022 totaled $854.8 million as compared to $984.1 million for the same period ending September 30, 2021, representing a decrease of $129.3 million or 13.1%.

At September 30, 2022, gross loans, which excludes loans held-for-sale, remained weighted toward two primary components: the commercial and core residential portfolios, with commercial loans accounting for 72.8% and single-family residential real estate loans accounting for 21.7% of the gross loan portfolio at such date. Construction and development loans amounted to 3.1% and consumer loans represented 2.4% of the gross loan portfolio at such date. The decrease in the gross loan portfolio at September 30, 2022, compared to September 30, 2021, primarily reflected decreases of $40.0 million in commercial loans, $22.8 million in residential mortgage loans, and $38.8 million in construction and development loans.

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

Loans
(in thousands, unaudited)
At quarter ended:	9/30/2022			6/30/2022			3/31/2022			12/31/2021			9/30/2021
Residential mortgage	$	175,957		$	176,499		$	177,669		$	187,516		$	198,710
Construction and Development:
Residential and commercial		24,362			20,459			25,558			56,876			61,492
Land		550			2,054			4,603			2,138			2,204
Total construction and development		24,912			22,513			30,161			59,014			63,696
Commercial:
Commercial real estate		406,914			407,783			400,974			416,248			426,915
Farmland		11,506			15,348			15,624			15,582			10,297
Multi-family		55,295			54,879			54,788			54,448			66,332
Commercial and industrial		102,703			104,504			101,354			106,493			115,246
Other		13,356			13,955			7,978			7,433			10,954
Total commercial		589,774			596,469			580,718			600,204			629,744
Consumer:
Home equity lines of credit		13,233			12,432			12,283			13,174			13,491
Second mortgages		4,395			4,605			4,969			5,384			5,884
Other		2,136			2,182			2,237			2,282			2,299
Total consumer		19,764			19,219			19,489			20,840			21,674
Total loans		810,407			814,700			808,037			867,574			913,824
Deferred loan costs, net		537			566			574			667			629
Allowance for loan losses		(9,090	)		(9,309	)		(9,301	)		(10,037	)		(11,472	)
Loans Receivable, net	$	801,854		$	805,957		$	799,310		$	858,204		$	902,981

At September 30, 2022 the Company had $139.6 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.

Asset Quality

Non-accrual loans, excluding loans held-for-sale, totaled $753,000 at September 30, 2022, and $3.7 million at September 30, 2021. The decrease in non-accrual loans was primarily due a charge-off of $2.4 million related to one non-accrual commercial and industrial loan during the fiscal year and then transferred to OREO at a carrying value of $259,000. The decrease in OREO of $4.7 million at September 30, 2022, compared to September 30, 2021, was attributed to a sale at carrying value and the transfer of a new commercial and industrial loan to OREO during the quarter totaling $259,000. Excluding the OREO property, NPAs totaled $1.0 million, or 0.10% of total assets, at September 30, 2022, and $3.7 million, or 0.31% of total assets, at September 30, 2021.

Performing troubled debt restructured (“TDR”) loans were $4.8 million at September 30, 2022, 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 December 31, 2021 period.

At September 30, 2022, NPAs totaled $1.3 million, or 0.12% of total assets, as compared with $8.7 million, or 0.72% of total assets, at September 30, 2021. The decrease in NPAs is due to the decrease in non-accrual loans and OREO as described above.

Non-Performing Asset and Other Asset Quality Data:
(dollars in thousands, unaudited)
As of or for the quarter ended:	9/30/2022			6/30/2022			3/31/2022			12/31/2021			9/30/2021
Non-accrual loans	$	753		$	1,075		$	1,101		$	1,790		$	3,697
Loans 90 days or more past due and still accruing		243			401			3			-			-
Total non-performing loans		996			1,476			1,104			1,790			3,697
OREO		259			4,763			4,961			4,961			4,961
Total NPAs	$	1,255		$	6,239		$	6,065		$	6,751		$	8,658
Performing TDR loans	$	4,810		$	5,753		$	5,787		$	6,310		$	17,601
NPAs / total assets		0.12	%		0.61	%		0.55	%		0.59	%		0.72	%
Non-performing loans / total loans		0.12	%		0.18	%		0.14	%		0.21	%		0.40	%
Net charge-offs	$	215		$	(8	)	$	736		$	1,436		$	10,754
Net charge-offs /average loans(1)		0.11	%		(0.00	%)		0.35	%		0.63	%		4.61	%
Allowance for loan losses / total loans		1.12	%		1.14	%		1.15	%		1.16	%		1.26	%
Allowance for loan losses / non-performing loans		912.7	%		630.7	%		842.5	%		560.7	%		310.3	%
Total assets	$	1,044,360		$	1,029,553		$	1,103,596		$	1,153,200		$	1,209,143
Total gross loans		810,407			814,700			808,037			867,574			913,824
Average net loans		817,938			811,829			846,420			899,430			933,727
Allowance for loan losses		9,090			9,309			9,301			10,037			11,472

________________
(1)   Annualized.

The allowance for loan losses at September 30, 2022 amounted to $9.1 million, or 1.12% of total gross loans, compared to $11.5 million, or 1.26% of total gross loans, at September 30, 2021. The Company did not record a provision for loan losses for the quarter ended September 30, 2022, compared to $10.6 million provision for loan losses for the quarter ended September 30, 2021. The decline reflects the overall improvement in asset quality and decline in total loans of $101.1 million at September 30, 2022 compared to September 30, 2021.

Capital

At September 30, 2022 the Company’s total shareholders’ equity amounted to $146.4 million, or 14.0% of total assets, compared to $142.2 million, or 11.8% of total assets at September 30, 2021, which continues to exceed all regulatory capital requirements. At September 30, 2022, the Bank’s common equity Tier 1 capital ratio was 19.27%, Tier 1 leverage ratio was 16.30%, Tier 1 risk-based capital ratio was 19.27% and the total risk-based capital ratio was 20.34%. At September 30, 2021, the Bank’s common equity Tier 1 capital ratio was 16.13%, Tier 1 leverage ratio was 13.14%, Tier 1 risk-based capital ratio was 16.13% and the total risk-based capital ratio was 17.32%.

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 a representative office in 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 or outcomes in such proceedings; the impact of any change in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; 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).

Further, it is difficult to predict the full impact of COVID-19 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 and the effects on general economic conditions. 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.

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.

MALVERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
	September 30, 2022				September 30, 2021
(in thousands, except for share data)	(unaudited)
ASSETS
Cash and due from depository institutions	$	4,677			$	99,670
Interest bearing deposits in depository institutions		48,590				36,920
Total cash and cash equivalents		53,267				136,590
Investment securities available for sale, at fair value		49,844				40,813
Equity securities, at fair value		1,374				1,500
Investment securities held to maturity, at amortizing cost		58,767				28,507
Restricted stock, at cost		7,104				7,776
Loans held-for-sale		13,780				33,199
Loans receivable, net of allowance for loan losses		801,854				902,981
Other real estate owned		259				4,961
Accrued interest receivable		4,252				3,512
Property and equipment, net		5,231				5,777
Deferred income taxes, net		3,722				3,530
Bank-owned life insurance		26,233				26,056
Other assets		18,673				13,941
Total assets	$	1,044,360			$	1,209,143
LIABILITIES
Deposits:
Non-interest bearing	$	58,014			$	53,849
Interest-bearing		727,309				884,310
Total deposits		785,323				938,159
FHLB advances		80,000				90,000
Subordinated debt		25,000				24,934
Advances from borrowers for taxes and insurance		1,002				1,022
Accrued interest payable		543				572
Other liabilities		6,047				12,288
Total liabilities		897,915				1,066,975
SHAREHOLDERS’ EQUITY
Common stock, $0.01 par value, 50,000,000 shares authorized; 7,828,344 and 7,633,828 issued and outstanding, respectively, at September 30, 2022, and 7,816,832 and 7,622,316 issued and outstanding, respectively, at September 30, 2021		76				76
Additional paid in capital		85,917				85,524
Retained earnings		67,247				60,296
Unearned Employee Stock Ownership Plan (ESOP) shares		(756	)			(901	)
Accumulated other comprehensive (loss) income		(3,176	)			36
Treasury stock, at cost: 194,516 shares at September 30, 2022 and September 30, 2021		(2,863	)			(2,863	)
Total shareholders’ equity		146,445				142,168
Total liabilities and shareholders’ equity	$	1,044,360			$	1,209,143

MALVERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
		Three Months Ended September 30,								Twelve Months Ended September 30,
(in thousands, except for share data)			2022				2021				2022				2021
(unaudited)
Interest and Dividend Income
Loans, including fees		$	8,323			$	8,330			$	31,832			$	36,370
Investment securities, taxable			617				403				2,181				1,449
Investment securities, tax-exempt			153				30				394				107
Dividends, restricted stock			96				89				342				459
Interest-bearing deposits			126				10				250				31
Total Interest and Dividend Income			9,315				8,862				34,999				38,416
Interest Expense
Deposits			849				1,240				3,534				6,748
Short-term borrowings			4				-				4				48
Long-term borrowings			198				415				776				2,029
Subordinated debt			355				382				1,371				1,531
Total Interest Expense			1,406				2,037				5,685				10,356
Net interest income			7,909				6,825				29,314				28,060
Provision for Loan Losses			-				10,626				-				11,176
Net Interest Income after Provision for			7,909				(3,801	)			29,314				16,884
Loan Losses
Other Income
Service charges and other fees			316				313				1,237				1,323
Rental income			48				54				196				217
Net gains on sale and call of investments			-				-				-				779
Net gains on sale of loans			22				45				100				788
Earnings on bank-owned life insurance			171				167				794				656
Total Other Income			557				579				2,327				3,763
Other Expense
Salaries and employee benefits			2,401				2,337				9,393				9,143
Occupancy expense			535				542				2,138				2,198
Federal deposit insurance premium			62				77				277				313
Advertising			32				33				129				109
Data processing			275				332				1,259				1,267
Professional fees			855				790				3,831				3,178
Other real estate owned expense, net			56				-				305				866
Pennsylvania shares tax			126				169				592				678
Other operating expenses			912				804				4,842				3,199
Total Other Expense			5,254				5,084				22,766				20,951
Income (loss) before income tax expense (benefit)			3,212				(8,306	)			8,875				(304	)
Income tax expense (benefit)			634				(2,116	)			1,924				(212	)
Net Income (loss)		$	2,578			$	(6,190	)		$	6,951			$	(92	)
Earnings (loss) per common share
Basic		$	0.34			$	(0.82	)		$	0.92			$	(0.01	)
Diluted		$	0.34			$	(0.82	)		$	0.92			$	(0.01	)
Weighted Average Common Shares Outstanding
Basic			7,574,870				7,548,958				7,563,648				7,537,408
Diluted			7,581,105				7,550,766				7,564,212				7,538,116

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 data) (annualized where applicable)		9/30/2022					6/30/2022					9/30/2021
(unaudited)
Statements of Operations Data
Interest income	$		9,315			$		8,557			$		8,862
Interest expense			1,406					1,264					2,037
Net interest income			7,909					7,293					6,825
Provision for loan losses			-					-					10,626
Net interest income (loss) after provision for loan losses			7,909					7,293					(3,801	)
Other income			557					482					579
Other expense			5,254					5,439					5,084
Income (loss) before income tax expense (benefit)			3,212					2,336					(8,306	)
Income tax expense (benefit)			634					502					(2,116	)
Net income (loss)	$		2,578			$		1,834			$		(6,190	)
Earnings (Loss) (per Common Share)
Basic	$		0.34			$		0.24			$		(0.82	)
Diluted	$		0.34			$		0.24			$		(0.82	)
Statements of Financial Condition Data (Period-End)
Equity securities	$		1,374			$		1,412			$		1,500
Investment securities available for sale, at fair value			49,844					53,080					40,813
Investment securities held to maturity			58,767					52,350					28,507
Loans held-for-sale			13,780					13,863					33,199
Loans, net of allowance for loan losses			801,854					805,957					902,981
Total assets			1,044,360					1,029,553					1,209,143
Deposits			785,323					791,694					938,159
FHLB advances			80,000					60,000					90,000
Subordinated debt			25,000					25,000					24,934
Shareholders' equity			146,445					145,290					142,168
Common Shares Dividend Data
Cash dividends	$		-			$		-			$		-
Weighted Average Common Shares Outstanding
Basic			7,574,870					7,569,806					7,548,958
Diluted			7,581,105					7,574,266					7,550,766
Operating Ratios
Return on average assets			1.01	%				69.00	%				(2.06	%)
Return on average equity			7.08	%				5.06	%				(16.59	%)
Average equity / average assets			14.25	%				13.59	%				12.43	%
Book value per common share (period-end)		$	19.18				$	19.03				$	18.65
Non-Financial Information (Period-End)
Common shareholders of record			369					371					379
Full-time equivalent staff			77					76					81

Investor Contacts:
Joseph D. Gangemi
610-695-3676

Media Contact:
Nathanial Jordan
610-695-3646