# EDGAR Filing Document

**Accession Number:** 0001550603
**File Stem:** 0001437749-23-002912
**Filing Date:** 2023-2
**Character Count:** 42635
**Document Hash:** dc9fc614e4e434271f60c87985a2d02e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-002912.hdr.sgml**: 20230209

**ACCESSION NUMBER**: 0001437749-23-002912

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230208

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230209

**DATE AS OF CHANGE**: 20230209

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MALVERN BANCORP, INC.
- **CENTRAL INDEX KEY:** 0001550603
- **STANDARD INDUSTRIAL CLASSIFICATION:** SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035]
- **IRS NUMBER:** 455307782
- **STATE OF INCORPORATION:** PA
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-54835
- **FILM NUMBER:** 23607426

**BUSINESS ADDRESS:**
- **STREET 1:** 42 EAST LANCASTER AVENUE
- **CITY:** PAOLI
- **STATE:** PA
- **ZIP:** 19301
- **BUSINESS PHONE:** 610-644-9400

**MAIL ADDRESS:**
- **STREET 1:** 42 EAST LANCASTER AVENUE
- **CITY:** PAOLI
- **STATE:** PA
- **ZIP:** 19301

mlvf20230209_8k.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM **8-K**

**CURRENT REPORT**

**PURSUANT TO SECTION 13 OR 15(d) OF THE** 

**SECURITIES EXCHANGE ACT OF 1934**

Date of Report (Date of earliest event reported): February 9, 2023 (February 8, 2023)

**<u>MALVERN BANCORP, INC.</u>**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| Pennsylvania | 000-54835 | 45-5307782 |
| (State or other jurisdiction of | (Commission file number) | (IRS Employer |
| incorporation or organization) |  | Identification No.) |

---

<u>42 East Lancaster Avenue</u><u>, <u>Paoli</u>, <u>Pennsylvania</u> <u>19301</u></u>

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: <u>(<u>610</u>) <u>644-9400</u></u>

<u>N/A</u>

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
| Common Stock | MLVF | NASDAQ |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

**Item 2.02 Results of Operations and Financial Condition**

On February 8, 2023, Malvern Bancorp, Inc. (the "Company"), the holding company for Malvern Bank, National Association, issued a press release setting forth its results of operations for its first fiscal quarter ended December 31, 2022. A copy of the Company's press release is attached hereto as Exhibit 99.1 and is hereby incorporated by reference.

The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.

**Item 9.01 Financial Statements and Exhibits**

(d) Exhibits

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Press release, dated February 8, 2023.](ex_473447.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | MALVERN BANCORP, INC. | MALVERN BANCORP, INC. |
| Dated: February 9, 2023 | By: | /s/ Joseph D. Gangemi |
|  |  | Joseph D. Gangemi |
|  |  | Executive Vice President and Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

---

| | |
|:---|:---|
| <br> ![ex_473447img001.jpg](ex_473447img001.jpg)<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NEWS RELEASE<br>|

---

42 E. Lancaster Avenue Paoli, Pennsylvania 19301 \| 610-644-9400 \| <u>http://ir.malvernbancorp.com</u>

**Investor Contacts**:

Joseph D. Gangemi

610-695-3676

**Media Contact**:

Nathanial Jordan

610-695-3646

**Malvern Bancorp, Inc. Reports First Fiscal Quarter Operating Results**

**PAOLI, PA., February 8, 2023** – **Malvern Bancorp, Inc. (NASDAQ: MLVF)** (the "Company"), the parent company of Malvern Bank, National Association (the "Bank"), today reported operating results for the first fiscal quarter ended December 31, 2022. Net income amounted to $1.9 million, or $0.25 per fully diluted common share, compared with a net income of $2.0 million, or $0.27 per fully diluted common share, for the first fiscal quarter ended December 31, 2021. Annualized return on average assets ("ROAA") was 0.75% for the quarter ended December 31, 2022, compared to 0.69% for the quarter ended December 31, 2021, and annualized return on average equity ("ROAE") was 5.14% for the quarter ended December 31, 2022, compared with 5.61% for the quarter ended December 31, 2021.

On a non-GAAP basis, core net income, which excludes merger-related expenses related to the pending merger with First Bank N.J. ("First Bank"), as detailed in the non-GAAP section of this earnings release, was $2.3 million, or $0.30 per fully diluted common shares, for the three months ended December 31, 2022. There were no meaningful non-core income or expense items for the three months ended December 31, 2021. Management believes the core net income measure is important in evaluating the Company's performance on a more comparable basis between periods.

"We are pleased with the start of fiscal year 2023, posting another quarter of solid earnings and strong core performance," commented Anthony C. Weagley, President and Chief Executive Officer. "We look forward to the rest of the year as we work to complete our pending merger with First Bank and strive to deliver strong results", continued Mr. Weagley.

**Statement of Operations Highlights for the three months ended December 31, 2022**

● Net interest margin ("NIM") increased 41 basis points to 3.19% for the quarter ended December 31, 2022, compared to 2.78% for the quarter ended December 31, 2021. The increase was primarily driven by an 84 basis point increase on the yield on loans.

● Total interest expense increased $931,000, or 55.9%, to $2.6 million for the three months ended December 31, 2022, compared to $1.7 million for the three months ended December 31, 2021, which resulted primarily from an increase in average rate of interest-bearing liabilities.

● Net interest income increased $596,000, or 8.3%, to $7.8 million for the three months ended December 31, 2022, compared to $7.2 million for the three months ended December 31, 2021, which resulted from an increase in the average rate of interest earning assets partially offset by an increase in average rate of interest-bearing liabilities.

● The Company did not record a provision for loan losses during the three months ended December 31, 2022 and 2021.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Linked Quarter Financial Ratios** |  |  |  |  |  |
| **(unaudited)** |  |  |  |  |  |
| <u>**As of or for the quarter ended:**</u> | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Return on average assets <sup>(1)</sup> | 0.75% | 1.01% | 0.69% | 0.18% | 0.69% |
| Return on average equity <sup>(1)</sup> | 5.14% | 7.08% | 5.06% | 1.43% | 5.61% |
| Net interest margin <sup>(1)</sup> | 3.19% | 3.26% | 2.97% | 2.81% | 2.78% |
| Loans / deposits ratio | 109.49% | 103.19% | 102.91% | 94.57% | 95.06% |
| Shareholders' equity / total assets | 14.61% | 14.02% | 14.11% | 13.11% | 12.54% |
| Efficiency ratio <sup>(2)</sup> | 69.9% | 62.1% | 70.0% | 91.1% | 66.3% |
| Book value per common share | $19.48 | $19.18 | $19.03 | $18.95 | $18.97 |

---

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Linked Quarter Income Statement Data** |  |  |  |  |  |
| **(unaudited)** |  |  |  |  |  |
| **(in thousands, except share and per share data)** |  |  |  |  |  |
| <u>**For the quarter ended:**</u> | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Net interest income | $7754 | $7909 | $7293 | $6954 | $7158 |
| Provision for loan losses |  |  |  |  |  |
| Net interest income after provision for loan losses | 7754 | 7909 | 7293 | 6954 | 7158 |
| Other income | 485 | 557 | 482 | 561 | 727 |
| Other expense | 5762 | 5254 | 5439 | 6845 | 5228 |
| Income before income tax expense | 2477 | 3212 | 2336 | 670 | 2657 |
| Income tax expense | 569 | 634 | 502 | 148 | 640 |
| Net income | $1908 | $2578 | $1834 | $522 | $2017 |
| Earnings per common share |  |  |  |  |  |
| Basic | 0.25 | 0.34 | 0.24 | 0.07 | 0.27 |
| Diluted | 0.25 | 0.34 | 0.24 | 0.07 | 0.27 |
| Weighted average common shares outstanding |  |  |  |  |  |
| Basic | 7578873 | 7574870 | 7569806 | 7554955 | 7551606 |
| Diluted | 7580788 | 7581105 | 7574266 | 7556194 | 7553208 |

---

**Net Interest Income**

Net interest income was $7.8 million for the quarter ended December 31, 2022, an increase of $596,000, or 8.3%, from $7.2 million for the quarter ended December 31, 2021. For the quarter ended December 31, 2022, NIM increased by 41 basis points to 3.19%, as compared to 2.78% for the quarter ended December 31, 2021. The increase in NIM during the three months ended December 31, 2022, compared to the same period in 2021 was primarily due to an improvement in rate related factors in interest earning assets which was partially offset by an increase in average rates in interest bearing liabilities by 59 basis points.

------

**Interest Income**

For the quarters ended December 31, 2022 and December 31, 2021, total interest income was $10.3 million and $8.8 million, respectively. Total interest income increased $1.5 million or 17.3% for the quarter ended December 31, 2022, compared to the quarter ended December 31, 2021, primarily due to rising interest rates resulting in additional interest income from net loans and investment securities partially offset by lower average loans.

**Interest Expense**

For the quarter ended December 31, 2022, interest expense increased by $931,000, or 55.9%, to $2.6 million, compared to $1.7 million for the quarter ended December 31, 2021. The increase in interest expense is attributable to higher interest rates on deposits and borrowings during the comparable period. Total average interest-bearing liabilities declined $159.1 million, or 16.4%, to $809.1 million, and the average rate on interest-bearing liabilities increased 59 basis points to 1.28%, compared to 0.69%, for the quarters ended December 31, 2022 and December 31, 2021, respectively.

**Other Income**

Other income decreased $242,000, or 33.3%, to $485,000 for the quarter ended December 31, 2022, compared to $727,000 for the quarter ended December 31, 2021. The decrease in other income was primarily due to a decrease in prepayment penalties and service charges of $277,000 for the quarter ended December 31, 2022 as compared to the quarter ended December 31, 2021.

**Other Expense**

Other expenses for the quarter ended December 31, 2022 increased $534,000, or 10.2%, to $5.8 million when compared to the quarter ended December 31, 2021. The increase was primarily due to an increase of $511,000 in merger related expenses for the three months ended December 31, 2022. These expenses primarily consisted of legal and professional fees.

**Income Taxes**

The Company recorded income tax expense of $569,000 during the quarter ended December 31, 2022, compared to income tax expense of $640,000 for the quarter ended December 31, 2021. The effective tax rates for the Company for the quarters ended December 31, 2022 and December 31, 2021 were 23.0% and 24.1%, respectively. The effective tax rate includes discrete tax items related to non-deductible merger-related expenses recognized in the first quarter of fiscal year 2023.

**Statement of Financial Condition Highlights at December 31, 2022** 

● Non-performing assets ("NPAs") were 0.22% and 0.12% of total assets at December 31, 2022 and September 30, 2022, respectively.

● Non-performing loans ("NPLs") were 0.24% and 0.12% of total loans at December 31, 2022 and September 30, 2022, respectively.

● Total assets were $1.0 billion at December 31, 2022, a decrease of $26.6 million, or 2.5%, compared to September 30, 2022. The decrease was primarily due to a $18.3 million decline in total cash and cash equivalents, a $5.1 million reduction in other assets and $3.0 million decline in loans driven by payoff and paydowns during the year.

● Total liabilities were $869.1 million at December 31, 2022, a decrease of $28.9 million, or 3.2%, compared to September 30, 2022. The decrease was primarily due to a $48.0 million decline in total deposits, partially offset by an increase of $18.0 million in FHLB advances and other borrowings.

● Book value per common share amounted to $19.48 at December 31, 2022, compared to $19.18 at September 30, 2022.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Linked Quarter Statement of Condition Data** |  |  |  |  |  |
| **(in thousands, unaudited)** |  |  |  |  |  |
| <u>**At the quarter ended:**</u> | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Cash and due from depository institutions | $1901 | $4677 | $9560 | $49674 | 104568 |
| Interest bearing deposits in depository institutions | 33106 | 48590 | 30199 | 72349 | 30336 |
| Investment securities available for sale, at fair value | 50385 | 49844 | 53080 | 54183 | 41718 |
| Equity securities | 1376 | 1374 | 1412 | 1445 | 1491 |
| Investment securities held to maturity, at amortized cost | 58147 | 58767 | 52350 | 48512 | 39045 |
| Restricted stock, at cost | 7060 | 7104 | 6027 | 6462 | 6294 |
| Loans held-for-sale | 13232 | 13780 | 13863 | 13244 | 13616 |
| Loans receivable, net of allowance for loan losses | 798862 | 801854 | 805957 | 799310 | 858203 |
| Other real estate owned | 259 | 259 | 4763 | 4961 | 4961 |
| Accrued interest receivable | 4675 | 4252 | 3671 | 3478 | 3394 |
| Property and equipment, net | 5134 | 5231 | 5365 | 5486 | 5635 |
| Deferred income taxes, net | 3649 | 3722 | 3975 | 3632 | 3461 |
| Bank-owned life insurance | 26407 | 26233 | 26063 | 25896 | 26224 |
| Other assets | 13599 | 18673 | 13268 | 14964 | 14254 |
| Total assets | $1017792 | $1044360 | $1029553 | $1103596 | $1153200 |
| Deposits | $737422 | $785323 | $791694 | $854437 | $912688 |
| FHLB advances | 80000 | 80000 | 60000 | 60000 | 60000 |
| Other borrowings | 18000 |  |  |  |  |
| Subordinated debt | 25000 | 25000 | 25000 | 25000 | 24974 |
| Other liabilities | 8635 | 7592 | 7569 | 19609 | 10981 |
| Shareholders' equity | 148735 | 146445 | 145290 | 144550 | 144557 |
| Total liabilities and shareholders' equity | $1017792 | $1044360 | $1029553 | $1103596 | $1153200 |

---

---

| |
|:---|
| **Condensed Consolidated**  |
| **Average Statement of Condition** |
| **(in thousands, unaudited)** |

---

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **<u>For the quarter ended:</u>** | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Investment securities | $116982 | $116004 | $113539 | $97697 | $82126 |
| Interest-bearing cash accounts | 30650 | 26581 | 48161 | 36452 | 32775 |
| Loans, net of allowance for loan losses | 815240 | 817938 | 811829 | 846420 | 899430 |
| All other assets | 59824 | 62134 | 93481 | 148374 | 163117 |
| Total assets | $1022696 | $1022657 | $1067010 | $1128943 | $1177448 |
| Non-interest-bearing deposits | $56755 | $57195 | $57479 | $54501 | $54092 |
| Interest-bearing deposits | 703280 | 718760 | 767843 | 829050 | 876269 |
| FHLB advances | 80000 | 67174 | 60000 | 60000 | 66847 |
| Other short-term borrowings | 837 | 1087 |  |  | 120 |
| Subordinated debt | 25000 | 25000 | 25000 | 24990 | 24952 |
| Other liabilities | 8460 | 7763 | 11658 | 14250 | 11408 |
| Shareholders' equity | 148364 | 145678 | 145030 | 146152 | 143760 |
| Total liabilities and shareholders' equity | $1022696 | $1022657 | $1067010 | $1128943 | $1177448 |

---

------

**Deposits**

Total deposits decreased $47.9 million, or 6.1%, from $785.3 million at September 30, 2022 to $737.4 million at December 31, 2022. The decrease in deposits was primarily related to a reduction of $28.8 million in money market deposits and $7.2 million in interest-bearing demand deposits, $7.0 million decline in non-interest-bearing deposits and a decrease of $3.4 million in time deposits. Non-interest-bearing core deposits; interest-bearing core deposits, savings and money market; and time deposits represent approximately 7%, 73%, and 20%, respectively, of total deposits as of December 31, 2022.

The Company continues to focus on the maintenance and development of its deposit base to align with its funding requirements and liquidity needs, but 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.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in thousands, unaudited)** |  |  |  |  |  |
| <u>**At quarter ended:**</u> | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Demand: |  |  |  |  |  |
| Non-interest-bearing | $51066 | $58014 | $56731 | $54712 | $60320 |
| Interest-bearing | 233635 | 240819 | 270532 | 302468 | 335411 |
| Savings | 53655 | 55288 | 54184 | 54074 | 56342 |
| Money market | 250936 | 279699 | 301165 | 328324 | 346023 |
| Time | 148130 | 151503 | 109082 | 114859 | 114592 |
| Total deposits | $737422 | $785323 | $791694 | $854437 | $912688 |

---

**Loans**

Total net loans amounted to $798.9 million at December 31, 2022, compared to $801.9 million at September 30, 2022, resulting in a net decrease of $3.0 million, or 0.4%, for the period, driven by loan payoffs and paydowns during the period, primarily in the construction and development and commercial loan categories. Loans held-for-sale amounted to $13.2 million at December 31, 2022, compared to $13.8 million at September 30, 2022.

At December 31, 2022, gross loans remained weighted toward two primary components: the commercial and core residential portfolios, with commercial loans accounting for 72.9% and single-family residential real estate loans accounting for 21.8% of the gross loan portfolio at such date. Construction and development loans amounted to 2.9% and consumer loans represented 2.4% of the gross loan portfolio at such date.

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

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in thousands, unaudited)** |  |  |  |  |  |
| <u>**At quarter ended:**</u> | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| **Residential mortgage** | $176207 | $175957 | $176499 | $177669 | $187516 |
| **Construction and Development:** |  |  |  |  |  |
| Residential and commercial | 22871 | 24362 | 20459 | 25558 | 56876 |
| Land | 545 | 550 | 2054 | 4603 | 2138 |
| Total construction and development | 23416 | 24912 | 22513 | 30161 | 59014 |
| **Commercial:** |  |  |  |  |  |
| Commercial real estate | 408671 | 406914 | 407783 | 400974 | 416248 |
| Farmland | 11435 | 11506 | 15348 | 15624 | 15582 |
| Multi-family | 50004 | 55295 | 54879 | 54788 | 54448 |
| Commercial and industrial | 105345 | 102703 | 104504 | 101354 | 106493 |
| Other | 13192 | 13356 | 13955 | 7978 | 7433 |
| Total commercial | 588647 | 589774 | 596469 | 580718 | 600204 |
| **Consumer:** |  |  |  |  |  |
| Home equity lines of credit | 12849 | 13233 | 12432 | 12283 | 13174 |
| Second mortgages | 4024 | 4395 | 4605 | 4969 | 5384 |
| Other | 2252 | 2136 | 2182 | 2237 | 2282 |
| Total consumer | 19125 | 19764 | 19219 | 19489 | 20840 |
| Total loans | 807395 | 810407 | 814700 | 808037 | 867574 |
| Deferred loan costs, net | 566 | 537 | 566 | 574 | 667 |
| Allowance for loan losses | (9099) | (9090) | (9309) | (9301) | (10037) |
| Loans Receivable, net | $798862 | $801854 | $805957 | $799310 | $858204 |

---

At December 31, 2022, the Company had $131.4 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**

At December 31, 2022, NPAs, consisting of non-accrual loans, loans 90 days past due and still accruing and other real estate owned ("OREO") totaled $2.2 million, or 0.22% of total assets, as compared with $6.8 million, or 0.59% of total assets, at December 31, 2021. The decrease in NPAs is primarily due to a decrease in OREO of $4.7 million. The decrease in OREO was attributed to a sale of OREO reported previously in the third fiscal quarter of 2022. During the current quarter ended December 31, 2022, a new commercial and industrial loan totaling $259,000 was transferred to OREO.

Non-accrual loans totaled $1.3 million at December 31, 2022, and $753,000 at September 30, 2022. The increase in non-accrual loans was attributable to two new residential loan with a combined carrying value of $573,000 being classified as non-accrual.

Troubled debt restructured ("TDR") loans were $10.9 million at December 31, 2022, and $6.1 million at September 30, 2022. The increase is primarily related to one new $4.8 million commercial and industrial loan that was modified during the period. The loan is currently performing under its modified terms.

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The following table reflects the composition of the Company's NPAs and other asset quality data as of the dates indicated.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(dollars in thousands, unaudited)** |  |  |  |  |  |
| <u>**As of or for the quarter ended:**</u> | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Non-accrual loans | $1277 | $753 | $1075 | $1101 | $1790 |
| Loans 90 days or more past due and still accruing | 675 | 243 | 401 | 3 |  |
| Total non-performing loans | 1952 | 996 | 1476 | 1104 | 1790 |
| OREO | 259 | 259 | 4763 | 4961 | 4961 |
| Total NPAs | $2211 | $1255 | $6239 | $6065 | $6751 |
| NPAs / total assets | 0.22% | 0.12% | 0.61% | 0.55% | 0.59% |
| Non-performing loans / total loans | 0.24% | 0.12% | 0.18% | 0.14% | 0.21% |
| Net charge-offs | $- | $215 | $(8) | $736 | $1436 |
| Net charge-offs /average loans<sup>(1)</sup> | 0.00% | 0.11% | 0.00% | 0.35% | 0.63% |
| Allowance for loan losses / total loans | 1.13% | 1.12% | 1.14% | 1.15% | 1.16% |
| Allowance for loan losses / non-performing loans | 466.2% | 912.7% | 630.7% | 842.5% | 560.7% |
| Total assets | $1017792 | $1044360 | $1029553 | $1103596 | $1153200 |
| Total gross loans | 807395 | 810407 | 814700 | 808037 | 867574 |
| Average net loans | 815240 | 817938 | 811829 | 846420 | 899430 |
| Allowance for loan losses | 9099 | 9090 | 9309 | 9301 | 10037 |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Annualized.

The allowance for loan losses amounted to $9.1 million for both periods ending December 31, 2022 and September 30, 2022. The allowance to total gross loans was 1.13% at December 31, 2022, compared to 1.12% of total gross loans at September 30, 2022. The Company did not record a provision for loan losses for the quarter ended December 31, 2022 or September 30, 2022.

**Capital**

At December 31, 2022, the Company's total shareholders' equity amounted to $148.7 million, or 14.6% of total assets, compared to $146.4 million, or 14.0% of total assets at September 30, 2022, which continues to exceed all regulatory capital requirements. At December 31, 2022, the Bank's common equity Tier 1 capital ratio was 19.69%, Tier 1 leverage ratio was 16.53%, Tier 1 risk-based capital ratio was 19.69% and the total risk-based capital ratio was 20.77%. 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%.

**Non-GAAP Financial Measures**

The Company's management believes that the supplemental non-GAAP information provided in this press release is utilized by market analysts and others to evaluate a company's financial condition and, therefore, that such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures presented by other companies.

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The Company's net income, including non-core income and expense items is presented in the table below.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(dollars in thousands except per share data)** |  |  |  |  |  |
| <u>**For the quarter ended**</u> | **12/31/22** | **9/30/22** | **6/30/22** | **3/31/22** | **12/31/21** |
| Net income as reported under GAAP | $1908 | $2578 | $1834 | $522 | $2017 |
| Less: Non-core items, net of tax (1) | 394 |  |  |  |  |
| Core net income non-GAAP | 2302 | 2578 | 1834 | 522 | 2017 |
| Earnings per common share | $0.30 | $0.34 | $0.24 | $0.07 | $0.27 |
| Weighted diluted average common shares outstanding | 7580788 | 7581105 | 7574266 | 7556194 | 7553208 |

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(1) Non-core items for the quarter ended December 31, 2022, include expenses, net of related tax benefits of $117,000, related to the previously announced pending merger of the Company with and into First Bank.<br>

"Efficiency ratio" is a non-GAAP financial measure and is defined as other expense, excluding certain non-core items, as a percentage of net interest income plus other income, calculated as follows:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(dollars in thousands)** |  |  |  |  |  |
| <u>**For the quarter ended**</u> | **12/31/22** | **9/30/22** | **6/30/22** | **3/31/22** | **12/31/21** |
| Other expense as reported under GAAP | $5762 | $5254 | $5439 | $6845 | $5228 |
| Less: Non-core items(1) | (511) |  |  |  |  |
| Other expense, excluding non-core items, non-GAAP | 5251 | 5254 | 5439 | 6845 | 5228 |
| Net interest income (2) | 7754 | 7909 | 7293 | 6954 | 7158 |
| Other income | 485 | 557 | 482 | 561 | 727 |
| Total | $8239 | $8466 | $7775 | $7515 | $7885 |
| Efficiency ratio, non-GAAP | 63.7% | 62.1% | 70.0% | 91.1% | 66.3% |

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| |
|:---|
| (1) Non-core items for the quarter ended December 31, 2022, include expenses related to the previously announced pending merger of the Company with and into First Bank. |
| (2) No tax equivalent adjustments have been made as the amounts are not meaningful. |

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**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. Malvern Bank also maintains a representative office in Allentown, Pennsylvania. Malvern 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.

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

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**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, the Company*'*s pending merger with First Bank, 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 ability of the Company and First Bank to obtain regulatory approvals and meet other closing conditions to the pending merger, including approval by First Bank*'*s and the Company*'*s shareholders, on the expected terms and schedule, as well as any delay or related problems with respect to closing the pending merger, 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; regulatory or judicial proceedings or unknown 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 (<u>http://www.sec.gov</u>).*

*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 completely 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 remain open, 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.* 

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| |
|:---|
| **MALVERN BANCORP, INC. AND SUBSIDIARIES** |
| **CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION** |

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| | | |
|:---|:---|:---|
|  | **December 31, 2022** | **September 30, 2022** |
| (**in thousands, except for share data)** | **(unaudited)** | **(unaudited)** |
| **ASSETS** |  |  |
| Cash and due from depository institutions | $1901 | $4677 |
| Interest bearing deposits in depository institutions | 33106 | 48590 |
| Total cash and cash equivalents | 35007 | 53267 |
| Investment securities available for sale, at fair value | 50385 | 49844 |
| Equity securities, at fair value | 1376 | 1374 |
| Investment securities held to maturity, at amortizing cost | 58147 | 58767 |
| Restricted stock, at cost | 7060 | 7104 |
| Loans held-for-sale | 13232 | 13780 |
| Loans receivable, net of allowance for loan losses | 798862 | 801854 |
| Other real estate owned | 259 | 259 |
| Accrued interest receivable | 4675 | 4252 |
| Property and equipment, net | 5134 | 5231 |
| Deferred income taxes, net | 3649 | 3722 |
| Bank-owned life insurance | 26407 | 26233 |
| Other assets | 13599 | 18673 |
| **Total assets** | $1017792 | $1044360 |
| **LIABILITIES** |  |  |
| Deposits: |  |  |
| Non-interest bearing | $51066 | $58014 |
| Interest-bearing | 686356 | 727309 |
| Total deposits | 737422 | 785323 |
| FHLB advances | 80000 | 80000 |
| Other borrowings | 18000 |  |
| Subordinated debt | 25000 | 25000 |
| Advances from borrowers for taxes and insurance | 1510 | 1002 |
| Accrued interest payable | 1068 | 543 |
| Other liabilities | 6057 | 6047 |
| **Total liabilities** | 869057 | 897915 |
| **SHAREHOLDERS**' **EQUITY** |  |  |
| Common stock, $0.01 par value, 50,000,000 shares authorized; 7,831,102 and 7,636,586 issued and outstanding, respectively, at December 31, 2022 and 7,828,344 and 7,633,828 issued and outstanding, respectively, at September 30, 2022 | 76 | 76 |
| Additional paid in capital | 85988 | 85917 |
| Retained earnings | 69155 | 67247 |
| Unearned Employee Stock Ownership Plan (ESOP) shares | (718) | (756) |
| Accumulated other comprehensive loss | (2903) | (3176) |
| Treasury stock, at cost: 194,516 shares at December 31, 2022 and September 30, 2022 | (2863) | (2863) |
| **Total shareholders**' **equity** | 148735 | 146445 |
| **Total liabilities and shareholders**' **equity** | $1017792 | $1044360 |

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| |
|:---|
| **MALVERN BANCORP, INC. AND SUBSIDIARIES** |
| **CONSOLIDATED STATEMENTS OF OPERATIONS** |

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| | | |
|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
| **(in thousands, except for share data)** | **2022** | **2021** |
| **(unaudited)** |  |  |
| **Interest and Dividend Income** |  |  |
| Loans, including fees | $9150 | $8228 |
| Investment securities, taxable | 669 | 455 |
| Investment securities, tax-exempt | 151 | 36 |
| Dividends, restricted stock | 113 | 91 |
| Interest-bearing deposits | 267 | 13 |
| **Total Interest and Dividend Income** | 10350 | 8823 |
| **Interest Expense** |  |  |
| Deposits | 1830 | 1045 |
| Short-term borrowings | 9 |  |
| Long-term borrowings | 327 | 237 |
| Subordinated debt | 430 | 383 |
| **Total Interest Expense** | 2596 | 1665 |
| **Net interest income** | 7754 | 7158 |
| Provision for Loan Losses |  |  |
| **Net Interest Income after Provision for Loan Losses** | 7754 | 7158 |
| **Other Income** |  |  |
| Service charges and other fees | 177 | 454 |
| Rental income | 49 | 52 |
| Net gains on sale of loans | 8 | 52 |
| Earnings on bank-owned life insurance | 173 | 169 |
| Other real estate owned income, net | 78 |  |
| **Total Other Income** | 485 | 727 |
| **Other Expense** |  |  |
| Salaries and employee benefits | 2582 | 2295 |
| Occupancy expense | 537 | 515 |
| Federal deposit insurance premium | 64 | 76 |
| Advertising | 32 | 32 |
| Data processing | 275 | 320 |
| Professional fees | 763 | 1055 |
| Pennsylvania shares tax | 127 | 170 |
| Merger related expense | 511 |  |
| Other operating expenses | 871 | 765 |
| **Total Other Expense** | 5762 | 5228 |
| **Income before income tax expense** | 2477 | 2657 |
| Income tax expense | 569 | 640 |
| **Net Income** | $1908 | $2017 |
| **Earnings per common share** |  |  |
| Basic | $0.25 | $0.27 |
| Diluted | $0.25 | $0.27 |
| **Weighted Average Common Shares Outstanding** |  |  |
| Basic | 7578873 | 7551606 |
| Diluted | 7580788 | 7553208 |

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| |
|:---|
| **MALVERN BANCORP, INC. AND SUBSIDIARIES** |
| **SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA** |

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| | | | |
|:---|:---|:---|:---|
|  | **At or for the three months ended** | **At or for the three months ended** | **At or for the three months ended** |
| **(in thousands, except for share data) (annualized where applicable)** | **12/31/2022** | **9/30/2022** | **12/31/2021** |
| **(unaudited)** |  |  |  |
| **Statements of Operations Data** |  |  |  |
| Interest income | $10350 | $9315 | $8823 |
| Interest expense | 2596 | 1406 | 1665 |
| Net interest income | 7754 | 7909 | 7158 |
| Provision for loan losses |  |  |  |
| Net interest income after provision for loan losses | 7754 | 7909 | 7158 |
| Other income | 485 | 557 | 727 |
| Other expense | 5762 | 5254 | 5228 |
| Income before income tax expense | 2477 | 3212 | 2657 |
| Income tax expense | 569 | 634 | 640 |
| Net income | $1908 | $2578 | $2017 |
| **Earnings (per Common Share)** |  |  |  |
| Basic | $0.25 | $0.34 | $0.27 |
| Diluted | $0.25 | $0.34 | $0.27 |
| **Statements of Financial Condition Data (Period-End)** |  |  |  |
| Equity securities | $1376 | $1374 | $1491 |
| Investment securities available for sale, at fair value | 50385 | 49844 | 41718 |
| Investment securities held to maturity | 58147 | 58767 | 39045 |
| Loans held-for-sale | 13232 | 13780 | 13616 |
| Loans, net of allowance for loan losses | 798862 | 801854 | 858204 |
| Total assets | 1017792 | 1044360 | 1153200 |
| Deposits | 737422 | 785323 | 912688 |
| FHLB advances | 80000 | 80000 | 60000 |
| Other Borrowings | 18000 |  |  |
| Subordinated debt | 25000 | 25000 | 24974 |
| Shareholders' equity | 148735 | 146445 | 144577 |
| **Common Shares Dividend Data** |  |  |  |
| Cash dividends | $- | $- | $- |
| **Weighted Average Common Shares Outstanding** |  |  |  |
| Basic | 7578873 | 7574870 | 7551606 |
| Diluted | 7580788 | 7581105 | 7553208 |
| **Operating Ratios** |  |  |  |
| Return on average assets | 0.75% | 1.01% | 0.69% |
| Return on average equity | 5.14% | 7.08% | 5.61% |
| Average equity / average assets | 14.51% | 14.25% | 12.21% |
| Book value per common share (period-end) | $19.48 | $19.18 | $18.97 |
| **Non-Financial Information (Period-End)** |  |  |  |
| Common shareholders of record | 367 | 369 | 376 |
| Full-time equivalent staff | 76 | 77 | 79 |

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