Malvern Bancorp, Inc. Reports Additional Impairment To Previously Announced Impaired Loan And Anticipated Filing Of Amended 10-K; Increase In Provision Reduces Net Income For Sept. 30 Qtr From $(0.07) To $(0.46)

Author: Benzinga Newsdesk | February 16, 2021 04:46pm

PAOLI, Pa., Feb. 16, 2021 (GLOBE NEWSWIRE) -- Malvern Bancorp, Inc. (NASDAQ:MLVF) (the "Company"), the parent company of Malvern Bank, National Association, today announced an additional impairment with respect to a previously announced impaired commercial real estate loan. As reported in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on January 29, 2021 (the "10-K"), the Company partially charged-off a $13.5 million New York City commercial real estate loan (the "Loan"), and classified the Loan as "non-accruing" as of September 30, 2020. The partial charge off, as reported in the 10-K, amounted to approximately $2.9 million and resulted in a specific reserve of approximately $581,000, pending the receipt of a third-party appraisal. As disclosed in the 10-K, further impairment of the Loan could be warranted following receipt of the appraisal report.
 

Subsequent to the filing of the 10-K, the Company received the third-party appraisal report dated February 11, 2021, that provides a collateral value materially less than the Company's previously reported estimate as of September 30, 2020, indicating an additional $3.1 million impairment. The variance to the Company's previously reported estimate is primarily due to the COVID-19 pandemic's impact on, and dislocation within, the New York City real estate market. Based upon the third-party appraisal and resulting impairment, the Company has determined to record an additional $3.95 million provision for loan losses for the three months ended September 30, 2020. Accordingly, the Company plans to amend and restate the 10-K, and therefore investors should no longer rely on the consolidated financial statements contained in the 10-K.

The increase in the provision for loan losses reduces the Company's net income for the quarter ended September 30, 2020 from a previously reported net loss of $546,000, or $0.07 per diluted share, to a net loss of $3.5 million or $0.46 per diluted share. For the fiscal year ended September 30, 2020, the Company's net income is reduced from $3.6 million, or $0.47 per fully diluted share, as previously reported, to $644,000 or $0.08 per fully diluted share.

Posted In: MLVF