MLVF Malvern Bancorp Inc

Malvern Bancorp, Inc. (NASDAQ: MLVF) (the “Company”), the parent company of Malvern Bank, National Association (the “Bank”), today reported operating results for the second fiscal quarter ended March 31, 2022. Net income amounted to $522,000, or $0.07 per fully diluted common share, compared with $2.2 million, or $0.30 per fully diluted common share, for the quarter ended March 31, 2021. Annualized return on average assets (“ROAA”) was 0.18 percent for the quarter ended March 31, 2022, compared to 0.73 percent for the quarter ended March 31, 2021, and annualized return on average equity (“ROAE”) was 1.43 percent for the quarter ended March 31, 2022, compared with 6.14 percent for the quarter ended March 31, 2021.

For the six months ended March 31, 2022, net income amounted to $2.5 million, or $0.34 per fully diluted common share, compared with net income of $4.5 million, or $0.60 per fully diluted common share, for the six months ended March 31, 2021. The annualized ROAA was 0.44 percent for the six months ended March 31, 2022, compared to 0.73 percent for the six months ended March 31, 2021, and the annualized ROAE was 3.50 percent for the six months ended March 31, 2022, compared with 6.26 percent for the six months ended March 31, 2021.

The decrease in net income and diluted earnings per share from the second quarter of 2021 were primarily due to the recording of a $1.7 million valuation allowance adjustment on a $13.6 million commercial real estate loan classified as impaired and held for sale. The valuation allowance adjustment in the current quarter is the result of the ongoing monitoring and evaluation of the loan’s value in light of indications of interest received with respect to the note. The valuation allowance adjustment consists of approximately $395,000 in reduced value and approximately $1.3 million in real estate tax payments. The Bank paid real estate taxes in arrears to improve the marketability of the note. The loan’s carrying value at March 31, 2022 is $11.9 million.  

This non-accrual loan, secured by commercial real estate in New York City, was transferred to held for sale with an aggregate book balance of $13.6 million at September 30, 2021, reflecting the Bank’s intent to sell the loan. There can be no assurances that a sale can be consummated, or that a sale can be consummated at the carrying value of the loan, as market and sales prices are subject to various factors. Tax payments will continue in the approximate amount of $274,000 annually, unless and until the property is sold. If this loan is sold at an amount less than the carrying value of the loan, such sale would result in a loss and impact the Company’s operating results.

“Management has prioritized and will continue to prioritize asset quality and balance sheet strength in taking what we believe are the necessary steps to improve credit quality and strengthen our balance sheet. We are making progress with our asset quality issues and near term these actions have elevated our expenses and overshadow net earnings.” commented Anthony C. Weagley, President and Chief Executive Officer.

Statement of Income Highlights at March 31, 2022

• Net interest margin (“NIM”) increased 27 basis points to 2.81 percent for the quarter ended March 31, 2022, compared to 2.54 percent for the quarter ended March 31, 2021. The increase was driven by a reduction in interest expense, partially offset by a decrease in interest-earning assets.
• Total interest expense decreased $1.4 million, or 50.7 percent, to $1.4 million for the quarter ended March 31, 2022, compared to $2.7 million for the quarter ended March 31, 2021, which resulted primarily from the reduction of costs on interest-bearing deposits.
• The Company did not record a provision for loan losses during the quarter ended March 31, 2022, or the quarter ended March 31, 2021.

Linked Quarter Financial Ratios
(unaudited)
As of or for the quarter ended:	3/31/2022			12/31/2021		9/30/2021			6/30/2021			3/31/2021
Return on average assets(1)		0.18	%	0.69	%		(2.06	%)		0.53	%		0.73	%
Return on average equity(1)		1.43	%	5.61	%		(16.59	%)		4.35	%		6.14	%
Net interest margin(1)		2.81	%	2.78	%		2.61	%		2.70	%		2.54	%
Loans / deposits ratio		94.57	%	95.06	%		97.41	%		104.84	%		108.14	%
Shareholders' equity / total assets		13.11	%	12.54	%		11.76	%		12.50	%		12.09	%
Efficiency ratio(2)		91.1	%	66.3	%		68.7	%		73.6	%		63.5	%
Book value per common share	$	18.95		18.97		$	18.65		$	19.44		$	19.17
____________
(1)   Annualized
(2)   3/31/2022 Quarter includes the impact of the valuation allowance adjustment related to the above mentioned HFS commercial real estate loan.

Linked Quarter Income Statement Data
(unaudited)
(in thousands, except share and per share data)
For the quarter ended:	3/31/2022			12/31/2021			9/30/2021			6/30/2021				3/31/2021
Net interest income	$	6,954		$	7,158		$	6,825		$	7,129		$	6,802
Provision for loan losses		-			-			10,626			-			-
Net interest income (loss) after provision for loan losses		6,954			7,158			(3,801	)		7,129			6,802
Other income		561			727			579			793			1,167
Other expense		6,845			5,228			5,084			5,832			5,063
Income before income tax expense		670			2,657			(8,306	)		2,090			2,906
Income tax expense (benefit)		148			640			(2,116	)		489			682
Net income (loss)	$	522		$	2,017		$	(6,190	)	$	1,601		$	2,224
Earnings (loss) per common share
Basic		0.07			0.27			(0.82	)		0.21			0.30
Diluted		0.07			0.27			(0.82	)		0.21			0.30
Weighted average common shares outstanding
Basic		7,554,955			7,551,606			7,548,958			7,545,371			7,529,408
Diluted		7,556,194			7,553,208			7,550,766			7,546,200			7,530,151

Net Interest Income

Net interest income was $7.0 million for the quarter ended March 31, 2022, an increase of $152,000, or 2.2 percent, from $6.8 million for the quarter ended March 31, 2021. The increase was driven by a decrease in interest paid on deposits and borrowings of $1.4 million, partially offset by decreased interest income of $1.2 million, primarily related to a decline in average loans. The average yield on interest-earning assets declined 21 basis points for the quarter ended March 31, 2022, to 3.35 percent, when compared to the same period in 2021 primarily due to the decrease in average loan balances and average yield on loans. The average rate on interest-bearing liabilities fell 49 basis points to 0.59 percent compared to the quarter ended March 31, 2021, due to decreases in market rates of interest. Net interest margin increased to 2.81 percent for the quarter ended March 31, 2022, from 2.54 percent for the same period in 2021. The margin improvement in the current period, in large part reflected the decline in interest-bearing liabilities partially offset by the decline in yield earned on interest-earning assets.

Net interest income was $14.1 million for the six months ended March 31, 2022, and a slight increase compared to the six months ended March 31, 2021. Consistent with the quarter, the slight increase was primarily driven by a reduction in interest expense as the cost of interest-bearing deposits decreased by 50 basis points compared to the six months ended March 31, 2021. The cost of interest-bearing liabilities decreased by 55 basis points compared to the six months ended March 31, 2021.

Other Income

Other income decreased $606,000, or 51.9 percent, during the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021. The decrease in other income was primarily due to a decrease in net gains on sale of investments and loans of $522000 to $11,000 for the quarter ended March 31, 2022, compared to $533,000 for the quarter ended March 31, 2021. This decrease was partially offset by an increase in earnings on bank-owned life insurance of $122,000 during quarter ended March 31, 2022.  

Similar to the quarter, other income for the six months ended March 31, 2022, decreased by $1.1 million mainly due to reductions in the net gains on sale of investments and loans of $1.2 million.

Other Expense

Other expense for the quarter ended March 31, 2022, increased $1.8 million to $6.8 million when compared to the quarter ended March 31, 2021. This increase was primarily due to a $1.7 million valuation allowance recorded on one loan held for sale, discussed above.

For the six months ended March 31, 2022, other expenses amounted to $12.1 million, an increase of $2.0 million, compared to the six months ended March 31, 2021. The primary components of the increase were the aforementioned valuation allowance and increased professional fees.

Income Taxes

The Company recorded income tax expense of $148,000 during the quarter ended March 31, 2022, compared to $682,000 for the quarter ended March 31, 2021. The effective tax rate for the Company for the quarters ended March 31, 2022 and March 31, 2021 were 22.1 percent and 23.5 percent, respectively. The reduction in the tax rate was due to the tax free income received from the additional bank-owned life insurance.

For the six months ended March 31, 2022, the Company recorded income tax expense of $788,000, compared to $1.4 million for the six months ended March 31, 2021.

Statement of Condition Highlights at March 31, 2022

• Non-performing assets (“NPAs”) were 0.55 percent and 0.72 percent of total assets at March 31, 2022, and September 30, 2021 respectively.
• Non-performing loans (“NPLs”) were 0.14 percent and 0.40 percent of total loans at March 31, 2022, and September 30, 2021, respectively.
• Total assets were $1.1 billion at March 31, 2022, a decrease of $106.9 million, or 8.9 percent, compared to September 30, 2021. The decrease was primarily due to a $103.7 million decline in loans receivable driven by payoffs and pay downs during the period and a $21.3 million decrease in loans held-for-sale, mainly loans that were sold during the period.
• Total liabilities were $1.0 billion at March 31, 2022, a decrease of $109.2 million, or 10.2 percent, compared to September 30, 2021. The decrease was primarily due to the repayment of a $30.0 million FHLB advance and a decrease of $83.7 million in total deposits.
• Book value per common share amounted to $18.95 at March 31, 2022, compared to $18.65 at September 30, 2021.

Linked Quarter Statement of Condition Data
(in thousands, unaudited)
At the quarter ended:	3/31/2022		12/31/2021		9/30/2021		6/30/2021		3/31/2021
Cash and due from depository institutions	$	49,674		104,568	$	99,670	$	90,441	$	99,358
Interest bearing deposits in depository institutions		72,349		30,336	$	36,920		14,513		9,556
Investment securities, available for sale, at fair value		54,183		41,718		40,813		34,502		28,899
Equity Securities		1,445		1,491		1,500		—		—
Investment securities held to maturity		48,512		39,045		28,507		31,795		25,834
Restricted stock, at cost		6,462		6,294		7,776		7,896		8,891
Loans Held-for-sale		11,933		13,616		33,199		—		—
Loans receivable, net of allowance for loan losses		799,310		858,203		902,981		940,735		974,596
Other real estate owned		4,961		4,961		4,961		4,961		5,796
Accrued interest receivable		3,478		3,394		3,512		3,370		3,598
Operating lease right-of-use-assets		1,523		1,663		1,796		2,168		2,322
Property and equipment, net		5,486		5,635		5,777		5,902		6,040
Deferred income taxes, net		3,632		3,461		3,530		3,389		3,535
Bank-owned life insurance		25,896		26,224		26,056		25,889		25,725
Other assets		13,441		12,591		12,145		20,183		12,269
Total assets	$	1,102,285	$	1,153,200	$	1,209,143	$	1,185,744	$	1,206,419
Deposits	$	854,437		912,688	$	938,159	$	907,704	$	912,213
FHLB advances		60,000		60,000		90,000		90,000		110,000
Subordinated debt		25,000		24,974		24,934		24,895		24,855
Operating lease liabilities		1,556		1,691		1,830		2,204		2,357
Other liabilities		16,742		9,290		12,052		12,749		11,143
Shareholders’ equity		144,550		144,557		142,168		148,192		145,851
Total liabilities and shareholders’ equity	$	1,102,285	$	1,153,200	$	1,209,143	$	1,185,744	$	1,206,419

Condensed Consolidated
Average Statement of Condition
(in thousands, unaudited)
For the quarter ended:	3/31/2022		12/31/2021		9/30/2021		6/30/2021		3/31/2021
Investment securities	$	97,697	$	82,126	$	75,004	$	71,811	$	58,559
Interest-bearing cash accounts		36,452		32,775		26,339		16,914		21,506
Loans, net of allowance for loan losses		846,420		899,430		933,727		955,012		977,876
All other assets		148,374		163,117		165,439		164,288		165,942
Total assets	$	1,128,943	$	1,177,448	$	1,200,509	$	1,208,025	$	1,223,883
Non-interest-bearing deposits	$	54,501		54,092		51,534		52,799		50,327
Interest-bearing deposits		829,050		876,269		869,914		868,099		866,153
FHLB advances		60,000		66,847		90,000		99,505		116,889
Other short-term borrowings		-		120		-		-		3,111
Subordinated debt		24,990		24,952		24,917		24,877		24,835
Other liabilities		14,250		11,408		14,907		15,399		17,751
Shareholders’ equity		146,152		143,760		149,237		147,346		144,817
Total liabilities and shareholders’ equity	$	1,128,943	$	1,177,448	$	1,200,509	$	1,208,025	$	1,223,883

Deposits

Total deposits decreased $83.7 million, or 8.9 percent, from $938.2 million at September 30, 2021 to $854.4 million at March 31, 2022. The decrease in deposits was primarily related to a reduction of $57.2 million in money market deposits and a reduction of $34.2 million in interest bearing demand deposits, partially offset by increases of $7.6 million in the Savings, Time, and non-interest bearing deposit categories collectively.

The Company continues to focus on the maintenance, development, and expansion of its deposit base. Management believes that the emphasis on serving the needs of our communities will provide a long-term relationship base which in turn will allow the Company 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:	3/31/2022		12/31/2021		9/30/2021		6/30/2021		3/31/2021
Demand:
Non-interest-bearing	$	54,712	$	60,320	$	53,849	$	53,365	$	54,210
Interest-bearing		302,468		335,411		336,645		329,372		313,865
Savings		54,074		56,342		50,582		51,011		49,601
Money market		328,324		346,023		385,480		359,040		338,100
Time		114,859		114,592		111,603		114,916		156,437
Total deposits	$	854,437	$	912,688	$	938,159	$	907,704	$	912,213

Loans

Total net loans amounted to $799.3 million at March 31, 2022, compared to $903.0 million at September 30, 2021, resulting in a net decrease of $103.7 million, or 11.5 percent, for the period and was driven primarily by higher commercial loan payoffs and paydowns during the period. Loans held-for-sale amounted to $11.9 million at March 31, 2022, compared to $33.2 million at September 30, 2021. This decline was primarily related to the sale of three commercial loans. Average gross loan balances for the quarter ended March 31, 2022, totaled $856.9 million as compared to $945.5 million for the quarter ended September 30, 2021, representing a decrease of $88.6 million, or 9.4 percent.

At March 31, 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 71.9 percent and single-family residential real estate loans accounting for 22.0 percent of the gross loan portfolio at such date. Construction and development loans amounted to 3.7 percent and consumer loans represented 2.4 percent of the gross loan portfolio at such date. The decrease in the gross loan portfolio at March 31, 2022, compared to September 30, 2021, primarily reflected decreases of $48.3 million in commercial loans, $21.0 million in residential mortgage loans, and 33.5 million in construction and development loans.

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

(in thousands, unaudited)
At quarter ended:	03/31/2022			12/31/2021			9/30/2021			6/30/2021			3/31/2021
Residential mortgage	$	177,669		$	187,516		$	198,710		$	201,737		$	218,165
Construction and Development:
Residential and commercial		25,558			56,876			61,492			61,484			76,257
Land		4,603			2,138			2,204			2,253			3,596
Total construction and development		30,161			59,014			63,696			63,737			79,853
Commercial:
Commercial real estate		400,974			416,248			426,915			478,032			482,611
Farmland		15,624			15,582			10,297			10,335			7,344
Multi-family		54,788			54,448			66,332			66,725			67,122
Commercial and industrial		101,354			106,493			115,246			97,955			94,706
Other		7,978			7,433			10,954			10,896			9,927
Total commercial		580,718			600,204			629,744			663,943			661,710
Consumer:
Home equity lines of credit		12,283			13,174			13,491			12,822			15,936
Second mortgages		4,969			5,384			5,884			7,039			8,114
Other		2,237			2,282			2,299			2,372			2,650
Total consumer		19,489			20,840			21,674			22,233			26,700
Total loans		808,037			867,574			913,824			951,650			986,428
Deferred loan costs, net		574			667			629			685			769
Allowance for loan losses		(9,301	)		(10,037	)		(11,472	)		(11,600	)		(12,601	)
Loans Receivable, net		799,310		$	858,204		$	902,981		$	940,735		$	974,596

At March 31, 2022, the Company had $142.3 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 $1.1 million at March 31, 2022, and $3.7 million at September 30, 2021. The decrease in non-accrual loans was primarily due to partial charge downs totaling $2.2 million taken during the six month period ended March 31, 2022 related to one non-accrual commercial and industrial loan. Performing troubled debt restructured (“TDR”) loans were $5.8 million at March 31, 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 period, as part of the note sale consummated during the December 31, 2021 period end.

At March 31, 2022, NPAs totaled $6.1 million, or 0.55 percent of total assets, as compared with $8.7 million, or 0.72 percent of total assets, at September 30, 2021. The decrease in NPAs is due to the decrease in non-accrual loans as described above. Other real estate owned or OREO, which is comprised of one commercial real estate property, totaled $5.0 million as of quarters ended March 31, 2022 and September 30, 2021.

Non-Performing Asset and Other Asset Quality Data:

As of or for the quarter ended:	3/31/2022			12/31/2021			9/30/2021			6/30/2021			3/31/2021
Non-accrual loans	$	1,101		$	1,790		$	3,697		$	23,547		$	22,281
Loans 90 days or more past due and still accruing		3			-			-			212			765
Total non-performing loans		1,104			1,790			3,697			23,759			23,046
OREO		4,961			4,961			4,961			4,961			5,796
Total NPAs	$	6,065		$	6,751		$	8,658		$	28,720		$	28,842
Performing TDR loans	$	5,787		$	6,310		$	17,601		$	23,352		$	22,697
NPAs / total assets		0.55	%		0.59	%		0.72	%		2.42	%		2.39	%
Non-performing loans / total loans		0.14	%		0.21	%		0.40	%		2.50	%		2.34	%
Net charge-offs		736			1,436			10,754			1,001			434
Net charge-offs /average loans(1)		0.40	%		0.63	%		4.55	%		0.41	%		0.18	%
Allowance for loan losses / total loans		1.15	%		1.16	%		1.26	%		1.22	%		1.28	%
Allowance for loan losses / non-performing loans		842.5	%		560.7	%		310.3	%		48.8	%		54.7	%
Total assets		1,102,285			1,153,200			1,209,143			1,185,744			1,206,419
Total gross loans		808,037			867,574			913,824			951,650			986,428
Average net loans		846,420			913,587			945,457			967,615			990,913
Allowance for loan losses		9,301			10,037			11,472			11,600			12,601
___________________________
(1)   Annualized.

The allowance for loan losses at March 31, 2022 amounted to approximately $9.3 million, or 1.15 percent of total gross loans, compared to $11.5 million, or 1.26 percent of total gross loans, at September 30, 2021. The decline reflected the $2.2 million charge off described above and the overall decline in total loans at March 31, 2022 of $106.1 million compared to September 30, 2021. The Company did not record a provision for loan losses for the quarter ended March 31, 2022, compared to $550,000 provision for loan losses for the quarter ended March 31, 2021.  

Capital

At March 31, 2022, the Company’s total shareholders’ equity amounted to $144.6 million, or 13.1 percent of total assets, compared to $142.2 million, or 11.8 percent of total assets at September 30, 2021, which continues to exceed all regulatory capital guidelines. At March 31, 2022, the Bank’s common equity Tier 1 capital ratio was 18.27 percent, Tier 1 leverage ratio was 14.29 percent, Tier 1 risk-based capital ratio was 18.27 percent and the total risk-based capital ratio was 19.34 percent. At September 30, 2021, the Bank’s common equity Tier 1 capital ratio was 16.13 percent, Tier 1 leverage ratio was 13.14 percent, Tier 1 risk-based capital ratio was 16.13 percent, and the total risk-based capital ratio was 17.32 percent.

About Malvern Bancorp, Inc.

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

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

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

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

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

Forward-Looking Statements

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

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

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

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

MALVERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
	March 31, 2022				September 30, 2021
(in thousands, except for share and per share data)	(unaudited)
ASSETS
Cash and due from depository institutions	$	49,674			$	99,670
Interest bearing deposits in depository institutions		72,349				36,920
Total cash and cash equivalents		122,023				136,590
Investment securities available for sale, at fair value (amortized cost of $56,863 and $40,756 atMarch 31, 2022 and September 30, 2021, respectively)		54,183				40,813
Equity Securities (amortized cost of $1,500 at March 2022 & September 2021)		1,445				1,500
Investment securities held to maturity (fair value of $45,716 and $28,913 at March31, 2022 and September 30, 2021, respectively)		48,512				28,507
Restricted stock, at cost		6,462				7,776
Loans Held-for-sale		11,933				33,199
Loans receivable, net of allowance for loan losses		799,310				902,981
Other real estate owned		4,961				4,961
Accrued interest receivable		3,478				3,512
Operating lease right-of-use-assets		1,523				1,796
Property and equipment, net		5,486				5,777
Deferred income taxes, net		3,632				3,530
Bank-owned life insurance		25,896				26,056
Other assets		13,441				12,145
Total assets	$	1,102,285			$	1,209,143
LIABILITIES
Deposits:
Non-interest bearing	$	54,712			$	53,849
Interest-bearing		799,725				884,310
Total deposits		854,437				938,159
FHLB advances		60,000				90,000
Subordinated debt		25,000				24,934
Advances from borrowers for taxes and insurance		1,841				1,022
Accrued interest payable		352				572
Operating lease liabilities		1,556				1,830
Other liabilities		14,549				10,458
Total liabilities		957,735				1,066,975
SHAREHOLDERS’ EQUITY
Common stock, $0.01 par value, 50,000,000 shares authorized; 7,819,627 and 7,625,111 issued and outstanding, respectively, at March 31, 2022, and 7,816,832 and 7,622,316 issued and outstanding, respectively, at September 30, 2021		76				76
Additional paid in capital		85,678				85,524
Retained earnings		62,835				60,296
Unearned Employee Stock Ownership Plan (ESOP) shares		(829	)			(901	)
Accumulated other comprehensive (loss) income		(347	)			36
Treasury stock, at cost: 194,516 shares at March 31, 2022 and September 30, 2021		(2,863	)			(2,863	)
Total shareholders’ equity		144,550				142,168
Total liabilities and shareholders’ equity	$	1,102,285			$	1,209,143

MALVERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
		Three Months Ended March 31,								Six Months Ended March 31,
(in thousands, except for share data)			2022				2021				2022				2021
(unaudited)
Interest and Dividend Income
Loans, including fees		$	7,628			$	9,069			$	15,856			$	19,145
Investment securities, taxable			521				321				976				668
Investment securities, tax-exempt			64				23				100				47
Dividends, restricted stock			75				119				166				260
Interest-bearing cash accounts			16				7				29				15
Total Interest and Dividend Income			8,304				9,539				17,127				20,135
Interest Expense
Deposits			828				1,805				1,873				4,062
Short-term borrowings			-				3				-				48
Long-term borrowings			183				546				420				1,153
Subordinated debt			339				383				722				766
Total Interest Expense			1,350				2,737				3,015				6,029
Net interest income			6,954				6,802				14,112				14,106
Provision for Loan Losses			-				-				-				550
Net Interest Income after Provision for			6,954				6,802				14,112				13,556
Loan Losses
Other Income
Service charges and other fees			219				419				673				666
Rental income			48				54				100				108
Net gains on sale and call of investments			-				259				-				614
Net gains on sale of loans			11				274				63				678
Earnings on bank-owned life insurance			283				161				452				325
Total Other Income			561				1,167				1,288				2,391
Other Expense
Salaries and employee benefits			2,347				2,275				4,642				4,547
Occupancy expense			546				568				1,061				1,110
Federal deposit insurance premium			71				83				147				159
Advertising			32				32				64				64
Data processing			359				306				679				634
Professional fees			868				884				1,923				1,547
Net other real estate owned expense, net			-				3				5				31
Pennsylvania shares tax			169				169				339				339
Other operating expenses			2,453				743				3,213				1,604
Total Other Expense			6,845				5,063				12,073				10,035
Income before income tax expense			670				2,906				3,327				5,912
Income tax expense			148				682				788				1,415
Net Income		$	522			$	2,224			$	2,539			$	4,497
Earnings per common share
Basic		$	0.07			$	0.30			$	0.34			$	0.60
Diluted		$	0.07			$	0.30			$	0.34			$	0.60
Weighted Average Common Shares Outstanding
Basic			7,554,955				7,529,408				7,553,262				7,527,588
Diluted			7,556,194				7,530,151				7,554,459				7,528,189

MALVERN BANCORP, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
	Three Months Ended					Three Months Ended					Three Months Ended
(in thousands, except for share and per share data) (annualized where applicable)	3/31/2022					12/31/2021					3/31/2021
(unaudited)
Statements of Operations Data
Interest income	$		8,304			$		8,823			$		9,539
Interest expense			1,350					1,665					2,737
Net interest income			6,954					7,158					6,802
Provision for loan losses			-					-					-
Net interest income after provision for loan losses			6,954					7,158					6,802
Other income			561					727					1,167
Other expense			6,845					5,228					5,063
Income before income tax expense			670					2,657					2,906
Income tax expense			148					640					682
Net income	$		522			$		2,017			$		2,224
Earnings (per Common Share)
Basic	$		0.07			$		0.27			$		0.30
Diluted	$		0.07			$		0.27			$		0.30
Statements of Condition Data (Period-End)
Equity Securities	$		1,445			$		1,491			$		1,502
Investment securities available for sale, at fair value			54,183					41,718					27,397
Investment securities held to maturity (fair value of $45,716, $39,316, and $26,367, respectively)			48,512					39,045					25,834
Loans Held-for-sale			11,933					13,616					-
Loans, net of allowance for loan losses			799,310					858,203					974,596
Total assets			1,102,285					1,153,200					1,206,419
Deposits			854,437					912,688					912,213
FHLB advances			60,000					60,000					110,000
Subordinated debt			25,000					24,974					24,855
Shareholders' equity			144,550					144,557					145,851
Common Shares Dividend Data
Cash dividends	$		-			$		-			$		-
Weighted Average Common Shares Outstanding
Basic			7,554,955					7,551,606					7,529,408
Diluted			7,556,194					7,553,208					7,530,151
Operating Ratios
Return on average assets			0.18	%				0.69	%				0.73	%
Return on average equity			1.43	%				5.61	%				6.14	%
Average equity / average assets			12.95	%				12.21	%				11.83	%
Book value per common share (period-end)		$	18.95				$	18.97				$	19.17
Non-Financial Information (Period-End)
Common shareholders of record			373					376					381
Full-time equivalent staff			79					79					81

Investor Contacts:Joseph D. GangemiCorporate Investor Relations610-695-3676

Investor Relations Contact:Nathanial Jordan610-695-3646