Randolph Bancorp, Inc. Announces Fourth Quarter and Year-to-Date 2020 Financial Results

Rhea-AI Summary

Randolph Bancorp, Inc. (RNDB) reported a strong Q4 2020 net income of $5.3 million ($1.03 per share), up from $0.8 million in Q4 2019. For the full year, net income rose to $19.9 million ($3.89 per share) from $3.4 million in 2019. Excluding one-time charges, adjusted earnings hit $5.6 million for Q4 and $21.5 million for the year. Total assets were $721.1 million, reflecting a 14.3% increase year-over-year, driven by deposit growth. Non-interest income surged 155.9% to $15.6 million in Q4, primarily from loan originations.

Positive

• Q4 2020 net income of $5.3 million, up from $0.8 million in Q4 2019
• Full year net income rose to $19.9 million, compared to $3.4 million in 2019
• Non-interest income increased 155.9% to $15.6 million in Q4 2020
• Total assets grew 14.3% year-over-year to $721.1 million
• Adjusted earnings of $5.6 million in Q4, excluding one-time charges

Negative

• Increase in provision for loan losses to $215,000 in Q4 2020 from no provision in Q4 2019
• Non-interest expenses rose 28.8% to $46.3 million for the year ended December 31, 2020

STOUGHTON, Mass., Feb. 16, 2021 (GLOBE NEWSWIRE) -- Randolph Bancorp, Inc. (the “Company”) (NASDAQ Global Market: RNDB), the holding company for Envision Bank (the “Bank”), today announced net income of $5.3 million, or $1.03 per basic share and $1.01 per diluted share, for the three months ended December 31, 2020 compared to net income of $0.8 million, or $0.16 per basic and diluted share, for the three months ended December 31, 2019. Excluding one-time charges of $294,000 related to the closing of a residential lending office and $69,000 in severance expenses, earnings were $5.6 million, or $1.06 per diluted share for the three months ended December 31, 2020. Net income for the year ended December 31, 2020 was $19.9 million, or $3.89 per basic share and $3.86 per diluted share, compared to net income of $3.4 million, or $0.64 per basic and diluted share, for the year ended December 31, 2019. Excluding one-time charges of $1.4 million related to the retirement of senior executives, operating expenses of $229,000 related to addressing the COVID-19 pandemic, $294,000 in expenses related to the closing of a residential lending office and $69,000 in severance expenses, earnings were $21.5 million, or $4.15 per diluted share, for the year ended December 31, 2020.

At December 31, 2020, total assets amounted to $721.1 million, compared to $723.0 million at September 30, 2020, a decrease of $1.9 million, or 0.3%. An increase in loans held for sale of $31.3 million was offset by a decrease in cash and cash equivalents of $35.3 million relative to the prior quarter.

William M. Parent, President and Chief Executive Officer, stated, “The fourth quarter was another strong quarter in earnings for our Company. We are very pleased with our performance, especially our mortgage banking operations, which maintained high levels of productivity and efficiency throughout our loan origination and sales activities. We continue to identify and implement opportunities to streamline and improve our operational efficiency. In that regard, we have initiated a plan to outsource our residential loan servicing activities, which will improve our customer service experience and our operational and financial efficiency in the year ahead.”

Fourth Quarter Operating Results
Net interest income increased by $649,000, or 14.8%, to $5.0 million for the three months ended December 31, 2020 from $4.4 million the same period in the prior year. This increase was primarily due to an increase in the proportion of non-maturity deposits and a decline in the proportion of term certificates from the same period in the prior year. The average balance of savings accounts in the fourth quarter of 2020 increased $61.3 million, or 50.9%, from the prior year quarter and the average balance of term certificates decreased $87.9 million, or 43.9%, from the prior year quarter, contributing to an 87 basis point decrease in the cost of interest-bearing liabilities. Net interest margin increased in the fourth quarter of 2020 to 3.02%, from 2.88% in the fourth quarter of 2019. The change reflects the shortening and downward pricing of deposit liabilities as well as the forgiveness of Paycheck Protection Program loans (“SBA PPP Loans”) during the quarter of $4.4 million resulting in the accretion of deferred loan origination fees into interest income.

The Company recognized a provision for loan losses of $215,000 for the quarter ended December 31, 2020, largely driven by commercial real estate loan originations. The allowance for loan losses was 1.38% and 0.90% of total loans at December 31, 2020 and December 31, 2019, respectively, and was 94.6% and 131.4% of non-performing assets at December 31, 2020 and December 31, 2019, respectively.

Non-interest income increased $9.5 million, or 155.9%, to $15.6 million for the quarter ended December 31, 2020 from $6.1 million in the quarter ended December 31, 2019, principally due to an increase of $9.2 million in the net gain on loan origination and sale activities. Sold mortgage loans totaled $426.5 million in the fourth quarter of 2020. Mortgage servicing fees increased $243,000 in the quarter ended December 31, 2020, principally due to an impairment of mortgage servicing rights of $284,000 in the quarter ended December 31, 2019.

Non-interest expenses increased $3.4 million to $12.9 million in the quarter ended December 31, 2020 from $9.5 million in the quarter ended December 31, 2019. The increase is principally due to an increase in salaries and employee benefits of $2.3 million, mainly related to higher commissions and incentives associated with increased residential loan production.

Occupancy and equipment expenses increased $339,000 in the quarter ended December 31, 2020 over the prior year period due to the closing of a residential lending office, as the bank consolidates its office space in light of prolonged remote working arrangements, resulting in a charge of $294,000 in the quarter.

Other non-interest expenses comprising professional fees, marketing, FDIC insurance and other non-interest expenses increased by $758,000 in the quarter ended December 31, 2020 versus the prior year period, as elevated mortgage loan production costs were partially offset by a decrease in discretionary marketing expenses. In addition, other non-interest expenses in the quarter ended December 31, 2020 included $584,000 to establish a reserve for unfunded loan commitments.

Year-End Operating Results
Net interest income increased by $1.0 million, or 5.8%, for the year ended December 31, 2020 compared to the same period in the prior year. This increase was driven by a $19.5 million increase in average net-interest earning assets, partially offset by a 5 basis point decline in net interest margin as the reduction in deposit costs lagged the impact of the lower interest rate environment on our interest earning asset yield.

The Company recognized a provision for loan losses of $2.6 million for the year ended December 31, 2020 compared to no provision in the prior year period.

Non-interest income increased $33.7 million, or 155.8%, to $55.4 million for the year ended December 30, 2020 from $21.7 million in the year ended December 31, 2019, principally due to an increase of $35.3 million in the net gain on loan origination and sale activities. Mortgage loans sold were $1.5 billion for the year ended December 31, 2020. The increase in the gain on loan origination and sale activities was partially offset by a decrease in net mortgage servicing fees due to a fair value adjustment for mortgage servicing rights of $2.1 million in the year ended December 31, 2020, given expectations of higher prepayments. The fair value adjustment for mortgage servicing rights was $920,000 in the year ended December 31, 2019.

Non-interest expenses increased $10.4 million, or 28.8%, to $46.3 million for the year ended December 31, 2020 from $36.0 million for the year ended December 31, 2019. Non-interest expenses for the year ended December 31, 2020 included one-time charges of $1.4 million related to the retirement of senior executives, $229,000 of COVID-19 pandemic-related expenses, $294,000 in expenses related to the closing of a residential lending office and $69,000 in severance expenses related to the planned outsourcing of residential loan servicing.

Salaries and employee benefits increased $8.3 million, including one-time charges of $1.4 million for the retirement of senior executives, higher commissions and incentives associated with higher residential loan production, and COVID-19 pandemic-related compensation of $101,000 for front-line and quarantined employees during the year ended December 31, 2020.

Occupancy and equipment expenses increased $762,000 in the year ended December 31, 2020 over the prior year period, partly as a result of increased spending on cleaning and supplies related to the COVID-19 pandemic of $125,000, $294,000 in expenses related to the closing of a residential lending office, as well as increased depreciation of furniture, fixtures and equipment that are expected to be retired as we consolidate our administrative office space in light of prolonged remote working arrangements for certain back-office staff.

Professional fees for the year ended 2020 increased $92,000 over the prior year period, primarily related to management succession planning costs. Spending on marketing during the year ended December 31, 2020 was $278,000 less than in the prior year, due to fewer marketing campaigns while communities were subject to stay-at-home orders. The increase of $1.5 million in other non-interest expenses during the year ended 2020 was driven mainly by costs related to higher mortgage loan production and the establishment of a reserve for unfunded loan commitments.

Income tax expense of $5.5 million for the year ended December 31, 2020 consists of both federal and state income taxes, as the Company’s net operating loss carryforward of $12.0 million from prior years was fully absorbed during the third quarter.

Balance Sheet
At December 31, 2020, total assets amounted to $721.1 million compared to $631.0 million at December 31, 2019, an increase of $90.1 million, or 14.3%. Contributing to asset growth was a $14.5 million increase in net loans to $483.6 million at December 31, 2020 from $469.1 million at December 31, 2019, mainly driven by the issuance of SBA PPP Loans, which had a balance of $10.9 million at December 31, 2020. Cash and cash equivalents increased by $5.5 million during the year to $13.8 million at December 31, 2020 from $8.3 million at December 31, 2019, mainly as a result of strong core growth in deposits and the timing of cash proceeds from loan sales. Loans held for sale increased by $56.3 million to $119.1 million at December 31, 2020 from $62.8 million at December 31, 2019.

The increase in total assets was funded by deposit growth. Non-brokered deposits totaled $496.6 million at December 31, 2020, increasing by $90.4 million, or 22.3%, during the year ended December 31, 2020 from $406.2 million at December 31, 2019. Driving the growth in non-brokered deposits were customers’ receipt of government stimulus and our focus on deposit gathering prior to the onset of the COVID-19 pandemic. Brokered deposits declined by $59.1 million to $31.7 million at December 31, 2020, from $90.9 million at December 31, 2019. Federal Home Loan Bank of Boston (“FHLBB”) and Federal Reserve Bank advances increased by $28.9 million to $73.3 million at December 31, 2020, from $44.4 million at December 31, 2019, as a result of the funding of our SBA PPP Loans and other loans with FHLBB and Federal Reserve Bank advances.

Total stockholders’ equity was $99.8 million at December 31, 2020 compared to $78.5 million at December 31, 2019. The increase of $21.4 million relates mainly to net income in the period of $19.9 million and an increase in the fair value of available-for-sale securities, net of taxes, of $1.5 million. In addition, the Company repurchased $1.7 million of shares during the year ended December 31, 2020, and equity adjustments related to the 2017 Stock Option and Incentive Plan and the employee stock ownership plan amounted to $1.5 million during the period.

COVID-19 Impact
In response to the impact of the COVID-19 pandemic on our customers and our business, the Company implemented a series of measures through the date of this release, including participation in the Small Business Administration’s Paycheck Protection Program, for which we funded $15.4 million of SBA PPP Loans through December 31, 2020, and granting payment deferrals for residential mortgage, home equity and certain commercial borrowers who were current in their payments at the time the deferral was requested. Depending on the circumstances of the borrowers, the forbearance calls for a reduced or full deferral of payment. Please refer to the Loan Payment Deferrals and COVID-19 Most Impacted Sections for statistics on loan payment deferrals and the commercial loan sectors we believe could be exposed to the economic impact of the COVID-19 pandemic.

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

Forward Looking Statements
Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 negative impacts and disruptions of the COVID-19 pandemic and the measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; the length and extent of economic contraction as a result of the COVID-19 pandemic; the effects of continued deterioration in employment levels, general business and economic conditions on a national basis and in the local markets in which the Company operates, including changes that adversely affect borrowers’ ability to service and repay the Company’s loans; changes in consumer behavior due to changing political, business and economic conditions or legislative or regulatory initiatives; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; turbulence in the capital and debt markets and the impact of such conditions on the Company’s business activities; and the risk factors described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the 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, 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)

		December 31,				December 31,
		2020				2019
Assets
Cash and due from banks		$	4,206			$	4,371
Interest-bearing deposits			9,568				3,881
Total cash and cash equivalents			13,774				8,252
Certificates of deposit			-				490
Securities available for sale, at fair value			55,366				57,503
Loans held for sale, at fair value			119,112				62,792
Loans, net of allowance for loan losses of $6,784 in 2020 and $4,280 in 2019			483,644				469,131
Federal Home Loan Bank of Boston stock, at cost			3,576				2,417
Accrued interest receivable			1,562				1,393
Mortgage servicing rights, net			12,377				8,556
Premises and equipment, net			4,781				5,748
Bank-owned life insurance			8,622				8,441
Foreclosed real estate, net			132				-
Other assets			18,126				6,281
Total assets		$	721,072			$	631,004
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing		$	96,731			$	61,603
Interest bearing			399,847				344,581
Brokered			31,729				90,858
Total deposits			528,307				497,042
Federal Reserve Bank advances			11,431				-
Federal Home Loan Bank of Boston advances			61,895				44,403
Mortgagors' escrow accounts			2,338				2,052
Post-employment benefit obligations			2,382				2,464
Other liabilities			14,900				6,581
Total liabilities			621,253				552,542
Stockholders' Equity:
Common stock			54				56
Additional paid-in capital			50,937				51,127
Retained earnings			51,689				31,757
ESOP-Unearned compensation			(3,756	)			(3,944	)
Accumulated other comprehensive income (loss), net of tax			895				(534	)
Total stockholders' equity			99,819				78,462
Total liabilities and stockholders' equity		$	721,072			$	631,004

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

		Three Months Ended December 31,								Twelve Months Ended December 31,
		2020				2019				2020				2019
Interest and dividend income:
Loans		$	5,532			$	5,841			$	22,212			$	23,631
Other interest and dividend income			296				378				1,376				1,600
Total interest and dividend income			5,828				6,219				23,588				25,231
Interest expense			788				1,828				4,721				7,398
Net interest income			5,040				4,391				18,867				17,833
Provision (credit) for loan losses			215				144				2,553				-
Net interest income after provision for loan losses			4,825				4,247				16,314				17,833
Non-interest income:
Customer service fees			381				353				1,283				1,407
Gain on loan origination and sale activities, net			14,620				5,462				54,236				18,900
Mortgage servicing fees, net			275				32				(1,153	)			394
Other			311				245				1,045				962
Total non-interest income			15,587				6,092				55,411				21,663
Non-interest expenses:
Salaries and employee benefits			8,722				6,382				33,161				24,896
Occupancy and equipment			1,150				811				3,545				2,783
Professional fees			389				366				1,277				1,185
Marketing			231				322				689				967
FDIC insurance			51				77				187				168
Other non-interest expenses			2,384				1,532				7,457				5,951
Total non-interest expenses			12,927				9,490				46,316				35,950
Income before income taxes			7,485				849				25,409				3,546
Income tax expense			2,211				21				5,477				118
Net income		$	5,274			$	828			$	19,932			$	3,428
Net income per share:
Basic		$	1.03			$	0.16			$	3.89			$	0.64
Diluted		$	1.01			$	0.16			$	3.86			$	0.64
Weighted average shares outstanding:
Basic			5,135,069				5,248,021				5,126,561				5,383,617
Diluted			5,244,414				5,248,021				5,163,042				5,383,617

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

	For the Three Months Ended December 31,
	2020												2019
	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)	$	580,002			$	5,532				3.82	%		$	554,972			$	5,841				4.21	%
Investment securities(2) (3)		58,329				290				1.99	%			50,290				367				2.92	%
Interest-earning deposits		30,573				8				0.10	%			5,038				13				1.03	%
Total interest-earning assets		668,904				5,830				3.49	%			610,300				6,221				4.08	%
Noninterest-earning assets		45,015												32,250
Total assets	$	713,919											$	642,550
Interest-bearing liabilities:
Savings accounts		181,653				142				0.31	%			120,343				223				0.74	%
NOW accounts		59,005				43				0.29	%			38,389				50				0.52	%
Money market accounts		75,106				62				0.33	%			80,623				241				1.20	%
Term certificates		112,260				293				1.04	%			200,123				1,068				2.13	%
Total interest-bearing deposits		428,024				540				0.50	%			439,478				1,582				1.44	%
FHLBB and FRB advances		77,584				247				1.27	%			50,444				246				1.95	%
Total interest-bearing liabilities		505,608				787				0.62	%			489,922				1,828				1.49	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits		94,540												62,674
Other noninterest-bearing liabilities		13,539												9,337
Total liabilities		613,687												561,933
Total stockholders' equity		100,232												80,617
Total liabilities and stockholders' equity	$	713,919											$	642,550
Net interest income					$	5,043											$	4,393
Interest rate spread(4)										2.87	%											2.58	%
Net interest-earning assets(5)	$	163,296											$	120,378
Net interest margin(6)										3.02	%											2.88	%
Ratio of interest-earning assets to interest-bearing liabilities		132.30	%											124.57	%

(1) Includes nonaccruing loan balances and interest received on such loans.
(2) Includes carrying value of securities classified as available-for-sale and FHLBB stock.
(3) Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $1,000 and $2,000 for the three months ended December 31, 2020 and 2019, 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.
Average Balances/Yields
(Dollars in thousands)
(Unaudited)

	For the Year Ended December 31,
	2020												2019
	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)	$	561,912			$	22,212				3.95	%		$	547,454			$	23,632				4.32	%
Investment securities(2) (3)		58,233				1,306				2.24	%			52,953				1,521				2.87	%
Interest-earning deposits		30,277				76				0.25	%			5,109				90				1.76	%
Total interest-earning assets		650,422				23,594				3.63	%			605,516				25,243				4.17	%
Noninterest-earning assets		39,396												27,903
Total assets	$	689,818											$	633,419
Interest-bearing liabilities:
Savings accounts		161,502				831				0.51	%			108,483				560				0.52	%
NOW accounts		55,396				185				0.33	%			39,197				194				0.49	%
Money market accounts		71,817				456				0.63	%			69,362				955				1.38	%
Term certificates		147,655				2,305				1.56	%			178,901				3,619				2.02	%
Total interest-bearing deposits		436,370				3,777				0.87	%			395,943				5,328				1.35	%
FHLBB and FRB advances		71,661				943				1.32	%			86,724				2,070				2.39	%
Total interest-bearing liabilities		508,031				4,720				0.93	%			482,667				7,398				1.53	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits		80,957												62,314
Other noninterest-bearing liabilities		12,384												8,845
Total liabilities		601,372												553,826
Total stockholders' equity		88,445												79,593
Total liabilities and stockholders' equity	$	689,817											$	633,419
Net interest income					$	18,874											$	17,845
Interest rate spread(4)										2.70	%											2.64	%
Net interest-earning assets(5)	$	142,391											$	122,849
Net interest margin(6)										2.90	%											2.95	%
Ratio of interest-earning assets to interest-bearing liabilities		128.03	%											125.45	%

(1) Includes nonaccruing loan balances and interest received on such loans.
(2) Includes carrying value of securities classified as available-for-sale and FHLBB stock.
(3) Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $5,000 and $12,000 for the year ended December 31, 2020 and 2019, 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)

	Three Months Ended
	December 31, 2020 vs. 2019
	Increase (Decrease)								Total
	Due to Changes in								Increase
	Volume				Rate				(Decrease)
Interest-earning assets:
Loans	$	253			$	(562	)		$	(309	)
Investment securities		52				(129	)			(77	)
Interest-earning deposits		16				(21	)			(5	)
Total interest-earning assets		321				(712	)			(391	)
Interest-bearing liabilities:
Savings accounts		83				(164	)			(81	)
NOW accounts		20				(27	)			(7	)
Money market accounts		(15	)			(164	)			(179	)
Term certificates		(358	)			(417	)			(775	)
Total interest-bearing deposits		(270	)			(772	)			(1,042	)
FHLBB and FRB advances		106				(104	)			2
Total interest-bearing liabilities		(164	)			(876	)			(1,040	)
Change in net interest income	$	485			$	164			$	649

	Year Ended
	December 31, 2020 vs. 2019
	Increase (Decrease)								Total
	Due to Changes in								Increase
	Volume				Rate				(Decrease)
Interest-earning assets:
Loans	$	(95	)		$	(1,324	)		$	(1,419	)
Investment securities		(14	)			(200	)			(214	)
Interest-earning deposits		22				(35	)			(13	)
Total interest-earning assets		(87	)			(1,559	)			(1,646	)
Interest-bearing liabilities:
Savings accounts		265				5				270
NOW accounts		11				(21	)			(10	)
Money market accounts		(15	)			(484	)			(499	)
Term certificates		(570	)			(744	)			(1,314	)
Total interest-bearing deposits		(309	)			(1,244	)			(1,553	)
FHLBB and FRB advances		(315	)			(812	)			(1,127	)
Total interest-bearing liabilities		(624	)			(2,056	)			(2,680	)
Change in net interest income	$	537			$	497			$	1,034

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

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

(1)   Before elimination of inter-segment profit.

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

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

		For the Three Months Ended December 31, 2019
		Envision Bank				Envision Mortgage				Consolidated Total
Net interest income		$	3,862			$	529			$	4,391
Provision for loan losses			144				-				144
Net interest income after credit for loan losses			3,718				529				4,247
Non-interest income:
Customer service fees			320				33				353
Gain on loan origination and sale activities, net (1)			-				5,808				5,808
Mortgage servicing fees, net			(90	)			122				32
Other			132				113				245
Total non-interest income			362				6,076				6,438
Non-interest expenses:
Salaries and employee benefits			1,773				4,609				6,382
Occupancy and equipment			390				421				811
Other non-interest expenses			1,354				943				2,297
Total non-interest expenses			3,517				5,973				9,490
Income before income taxes and elimination of inter-segment profit		$	563			$	632				1,195
Elimination of inter-segment profit											(346	)
Loss before income taxes											849
Income tax expense											21
Net income										$	828

(1)   Before elimination of inter-segment profit.

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

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

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

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

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

		For the Year Ended December 31, 2019
		Envision Bank				Envision Mortgage				Consolidated Total
Net interest income		$	15,985			$	1,848			$	17,833
Provision for loan losses			-				-				-
Net interest income after credit for loan losses			15,985				1,848				17,833
Non-interest income:
Customer service fees			1,268				139				1,407
Gain on loan origination and sale activities, net (1)			-				19,851				19,851
Mortgage servicing fees, net			(363	)			757				394
Other			596				366				962
Total non-interest income			1,501				21,113				22,614
Non-interest expenses:
Salaries and employee benefits			7,065				17,831				24,896
Occupancy and equipment			1,527				1,256				2,783
Other non-interest expenses			4,789				3,482				8,271
Total non-interest expenses			13,381				22,569				35,950
Income (loss) before income taxes and elimination of inter-segment profit		$	4,105			$	392				4,497
Elimination of inter-segment profit											(951	)
Income before income taxes											3,546
Income tax expense											118
Net income										$	3,428

(1)   Before elimination of inter-segment profit.

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

		Quarter Ended
		December 31, 2020
		Income Before Taxes				Provision for Income Taxes				Net Income				Earnings per Common Share (diluted)
GAAP basis		$	7,485			$	2,211			$	5,274			$	1.01
Non-interest expense adjustments:
Residential lending office closure			294				63				231			$	0.04
Accrued severance expenses			69				15				54			$	0.01
Non-GAAP basis		$	7,848			$	2,289			$	5,559			$	1.06
		December 31, 2019
		Income Before Taxes				Provision for Income Taxes				Net Income				Earnings per Common Share (diluted)
GAAP basis		$	849			$	21			$	828			$	0.16
Non-GAAP basis		$	849			$	21			$	828			$	0.16
		Year-to-Date
		December 31, 2020
		Income Before Taxes				Provision for Income Taxes				Net Income				Earnings per Common Share (diluted)
GAAP basis		$	25,409			$	5,477			$	19,932			$	3.86
Non-interest expense adjustments:
Retirement salary and benefits compensation			692				149				543				0.11
Accelerated vesting of stock-based compensation			683				147				536				0.10
COVID-19 related expenses			229				49				180				0.03
Residential lending office closure			294				63				231				0.04
Accrued severance expenses			69				15				54				0.01
Non-GAAP basis		$	27,376			$	5,900			$	21,476			$	4.15
		December 31, 2019
		Income Before Taxes				Provision for Income Taxes				Net Income				Earnings per Common Share (diluted)
GAAP basis		$	3,546			$	118			$	3,428			$	0.64
Non-GAAP basis		$	3,546			$	118			$	3,428			$	0.64

Randolph Bancorp, Inc.
Selected Financial Highlights
(Unaudited)

		At or for the								At or for the
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2020				2019				2020				2019
Return on average assets: (1, 5)
GAAP			2.95	%			0.52	%			2.89	%			0.54	%
Non-GAAP (2)			3.11	%			0.52	%			3.11	%			0.54	%
Return on average equity: (1, 6)
GAAP			21.05	%			4.11	%			22.54	%			4.31	%
Non-GAAP (2)			22.18	%			4.11	%			24.28	%			4.31	%
Net interest margin			3.02	%			2.88	%			2.90	%			2.95	%
Non-interest income to total income:
GAAP			75.57	%			49.48	%			74.60	%			46.20	%
Efficiency ratio: (7)
GAAP			62.67	%			90.53	%			62.35	%			91.02	%
Non-GAAP (2)			60.91	%			90.53	%			59.71	%			91.02	%
Tier 1 capital to average assets (3)			13.85	%			11.30	%			13.85	%			11.30	%
Non-performing assets as a percentage of total assets (4)			1.01	%			0.52	%			1.01	%			0.52	%
Allowance for loan losses as a percentage of total loans (4)			1.38	%			0.90	%			1.38	%			0.90	%
Allowance for loan losses as a percentage of total loans, excluding SBA PPP Loans (4)			1.41	%			0.90	%			1.41	%			0.90	%
Allowance for loan losses as a percentage of non-performing assets			94.58	%			131.37	%			94.58	%			131.37	%
Allowance for loan losses as a percentage of non-performing loans			92.87	%			131.37	%			92.87	%			131.37	%
Tangible book value per share (8)		$	18.16			$	14.06			$	18.16			$	14.06
Outstanding shares			5,495,514				5,576,855				5,495,514				5,576,855

(1) Annualized for quarterly periods presented.
(2) See page 14 – Reconciliation of GAAP to Non-GAAP Net Income.
(3) Average assets calculated on a quarterly basis for all periods presented.
(4) Total loans exclude loans held for sale but includes net deferred loan costs and fees.
(5) This non-GAAP measure represents net income divided by average total assets.
(6) This non-GAAP measure represents net income divided by average stockholders’ equity.
(7) This non-GAAP measure represents total non-interest expenses divided by net interest income and non-interest income.
(8) This non-GAAP measure represents total stockholders’ equity, minus intangible assets of $33,000, divided by outstanding shares at period end.

Randolph Bancorp, Inc.
COVID-19 Supplemental Disclosure
(Unaudited)

Loan Payment Deferrals

		As of January 18, 2021
		Commercial loans				Residential loans				Residential loans serviced for others
		(Dollars in thousands)
Balance outstanding		$	175,046			$	364,041			$	1,786,888
COVID-19 related loan payment deferrals: (1)
Loans in COVID-19-related loan payment deferral		$	6,544			$	5,033			$	18,672
Loans in deferral as a percentage of category loans			3.7	%			1.4	%			1.0	%
Loans with suspended payment		$	6,544			$	4,535			$	10,342
Loans with reduced payment			-				498				8,330
Loans which obtained a COVID-19-related payment deferral but
have since resumed payment		$	31,845			$	13,796			$	49,846
Loans reinstated (borrower paid any unpaid principal and interest)			-				2,732				8,318
Loans on a repayment plan			-				-				1,363
Loans which resumed payment but deferred principal and/or
interest payments to maturity (2)			27,029				8,451				34,896
Loans which were paid off completely			4,816				1,687				3,903
Other loans			-				926				1,366

(1)   Includes commercial loans that have been approved for loan payment deferral but for which documentation is closing or pending.
(2)   Includes commercial loan for which maturity was extended.

Randolph Bancorp, Inc.
COVID-19 Supplemental Disclosure
(Unaudited)

COVID-19 Highly Impacted Sectors

		As of December 31, 2020
		Exposure Balance																				Exposure by Risk Weighting
																														Balance
							Real					Commercial																		with
							Estate					&																		Deferred
Industry (1)		Total					Secured					Industrial					Construction					Pass				Criticized				Payments
		(Dollars in thousands)
Group home/care facility		$	1,091				$	1,091				$	-				$	-				$	1,091			$	-			$	-
Hotels/hospitality			9,679					9,604					75					-					75				9,604				3,543
Restaurants/food service			2,786					1,582					1,204					-					2,786				-				-
Retail/shopping center			20,134					16,472					-					3,662					17,446				2,687				2,058
Other sectors (2)			10,720					9,990					130					600					9,768				953				640
Total loans in COVID-19 impacted sectors		$	44,410				$	38,739				$	1,409				$	4,262				$	31,166			$	13,244			$	6,241
Percentage of commercial loans outstanding		25.3		%			26.9		%			7.0		%			36.5		%
Commercial loans outstanding		$	175,822				$	143,893				$	20,259				$	11,670
Loan to value secured by real estate (3)							45.5		%								57.3		%

(1)   This disclosure focuses on industries with balances that are significant to the portfolio at December 31, 2020 and omits industries affected by the COVID-19 pandemic (oil and gas, transportation, etc.) to which the Company has minimal or no exposure. This disclosure also excludes SBA PPP Loans, given their government guarantee.
(2)   Includes customers operating in various sectors which have been impacted by COVID-19.
(3)   Loan to value secured by real estate equals the exposure balance divided by the most recent appraised value.

For More Information, Contact:
William M. Parent,
President and Chief Executive Officer
(617-925-1955)

FAQ

What were Randolph Bancorp's earnings for Q4 2020?

Randolph Bancorp reported a net income of $5.3 million, or $1.03 per share, for Q4 2020.

How did Randolph Bancorp perform in 2020 compared to 2019?

In 2020, Randolph Bancorp's net income grew to $19.9 million from $3.4 million in 2019.

What contributed to the increase in non-interest income for RNDB?

Non-interest income surged 155.9% due to an increase of $9.2 million in net gains from loan originations and sales.

What was the total asset value for RNDB as of December 31, 2020?

Total assets for Randolph Bancorp amounted to $721.1 million as of December 31, 2020.

What was the provision for loan losses for Q4 2020 for RNDB?

The provision for loan losses was $215,000 for Q4 2020.