NEW YORK, Jan. 30, 2024 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., (the "Company") (NASDAQ: PDLB), the holding company for Ponce Bank (the "Bank"), today announced results for the fourth quarter of 2023.
Fourth Quarter 2023 Highlights (Compared to Prior Periods):
- Net income of $0.5 million, or $0.02 per diluted share for the three months ended December 31, 2023, as compared to net income of $2.6 million, or $0.12 per diluted share for the three months ended September 30, 2023 and net loss of ($9.2) million, or ($0.40) per diluted share for the three months ended December 31, 2022.
- Included in the $0.5 million of net income for the fourth quarter of 2023 results is $35.0 million in interest and dividend income and $1.3 million in non-interest income, offset by $17.9 million in non-interest expense and $17.8 million in interest expense.
- Net interest income of $17.2 million for the fourth quarter of 2023 increased $0.7 million, or 3.96%, from the prior quarter and increased $1.0 million, or 6.38%, from the same quarter last year.
- Net interest margin was 2.66% for the fourth quarter of 2023, increased from 2.58% for the prior quarter and decreased from 2.97% for the same quarter last year.
Full Year 2023 Highlights (Compared to 2022):
- Net income of $3.4 million, or $0.15 per diluted share for the year ended December 31, 2023, as compared to a net loss of ($30.0) million, or ($1.32) per diluted share for the year ended December 31, 2022.
- Net interest income for the year ended December 31, 2023 was $65.3 million, decreased $1.3 million, or 2.01%, compared to $66.6 million for the year ended December 31, 2022.
- Non-interest income for the year ended December 31, 2023 was $10.2 million, increased $3.8 million, or 59.26%, compared to $6.4 million for the year ended December 31, 2022.
- Non-interest expense for the year ended December 31, 2023 was $68.7 million, decreased $17.2 million, or 19.99%, compared to $85.8 million for the year ended December 31, 2022.
- Net interest margin was 2.66% for the year ended December 31, 2023, decreased from 3.66% for the same period last year.
- Cash and equivalents were $139.2 million as of December 31, 2023, increased $84.8 million, or 156.05%, from December 31, 2022, as we decided to keep ample sources of liquidity at hand while taking advantage of the positive spread between our interest bearing overnight deposits at the Fed and borrowing costs under the Bank Term Funding Program ("BTFP").
- Securities totaled $581.7 million as of December 31, 2023, decreased $58.7 million, or 9.16%, from December 31, 2022 primarily due to a call on one of the securities amounting to $10.0 million and regular principal payments.
- Net loans receivable were $1.90 billion as of December 31, 2023, increased $402.8 million, or 26.97%, from December 31, 2022.
- Deposits were $1.51 billion as of December 31, 2023, increased $255.2 million, or 20.38%, from December 31, 2022.
President and Chief Executive Officer's Comments
Carlos P. Naudon, Ponce Financial Group's President and CEO, stated "We were pleased to see continued improvement during the quarter: Net interest income grew for the third quarter in a row and, despite the challenging operating environment, net interest income was also up quarter over quarter. Book value per share was $11.20 at year-end, up $0.21 quarter over quarter and up $0.43 versus last year. Total equity per share now stands at $20.66. Additionally, in order to better manage our interest risk, during the fourth quarter, we entered into two pay fixed, receiver SOFR swaps, one with notional amount of $150 million for 2 years and one with notional amount of $100 million for 3 years.
We continue to show strong levels of capital and liquidity. On the capital front, our total capital ratio at Ponce Bank stands at 23.30%, well in excess of regulatory requirements. In terms of liquidity, our liquid assets plus borrowing capacity at the Federal Home Loan Bank of New York ("FHLBNY") stands at $778.8 million, two times of our uninsured deposits of $389.4 million.
We remain committed to the communities we serve, our Minority Depository Institution ("MDI")/Community Development Financial Institutions ("CDFI") status and continuing to invest in our people and in technology to improve our efficiency".
Executive Chairman's Comment
Steven A. Tsavaris, Ponce Financial Group's Executive Chairman added "We were able to grow both loans and deposits by over $100 million this quarter. We continue to see resiliency of our client base, but we'll prioritize sound underwriting practices and balance sheet management even at the expense of loan growth."
Selected performance metrics are as follows (refer to "Key Metrics" for additional information):
| At or for the Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| Performance Ratios (Annualized): | 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| Return on average assets (1) | 0.08 | % | 0.39 | % | (0.01 | %) | 0.06 | % | (1.62 | %) | ||||||||||
| Return on average equity (1) | 0.42 | % | 2.11 | % | (0.07 | %) | 0.27 | % | (7.28 | %) | ||||||||||
| Net interest rate spread (1) (2) | 1.63 | % | 1.58 | % | 1.66 | % | 1.78 | % | 2.13 | % | ||||||||||
| Net interest margin (1) (3) | 2.66 | % | 2.58 | % | 2.65 | % | 2.75 | % | 2.97 | % | ||||||||||
| Non-interest expense to average assets (1) | 2.66 | % | 2.58 | % | 2.65 | % | 2.79 | % | 2.78 | % | ||||||||||
| Efficiency ratio (4) | 96.83 | % | 78.11 | % | 96.15 | % | 95.88 | % | 94.95 | % | ||||||||||
| Average interest-earning assets to average interest- bearing liabilities | 137.49 | % | 137.92 | % | 141.14 | % | 148.20 | % | 152.30 | % | ||||||||||
| Average equity to average assets | 18.25 | % | 18.32 | % | 19.21 | % | 20.91 | % | 22.32 | % | ||||||||||
| At or for the Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| Capital Ratios (Annualized): | 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| Total capital to risk weighted assets (Bank only) | 23.30 | % | 25.10 | % | 26.30 | % | 27.54 | % | 30.53 | % | ||||||||||
| Tier 1 capital to risk weighted assets (Bank only) | 22.05 | % | 23.85 | % | 25.05 | % | 26.28 | % | 29.26 | % | ||||||||||
| Common equity Tier 1 capital to risk-weighted assets (Bank only) | 22.05 | % | 23.85 | % | 25.05 | % | 26.28 | % | 29.26 | % | ||||||||||
| Tier 1 capital to average assets (Bank only) | 17.49 | % | 17.51 | % | 17.95 | % | 19.51 | % | 20.47 | % | ||||||||||
| At or for the Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| Asset Quality Ratios (Annualized): | 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| Allowance for loan losses as a percentage of total loans | 1.36 | % | 1.51 | % | 1.64 | % | 1.77 | % | 2.27 | % | ||||||||||
| Allowance for loan losses as a percentage of nonperforming loans | 152.99 | % | 169.49 | % | 167.06 | % | 149.73 | % | 252.33 | % | ||||||||||
| Net (charge-offs) recoveries to average outstanding loans (1) | (0.24 | %) | (0.34 | %) | (0.41 | %) | (0.57 | %) | (0.85 | %) | ||||||||||
| Non-performing loans as a percentage of total gross loans | 0.89 | % | 0.89 | % | 0.98 | % | 1.18 | % | 0.90 | % | ||||||||||
| Non-performing loans as a percentage of total assets | 0.62 | % | 0.62 | % | 0.63 | % | 0.76 | % | 0.59 | % | ||||||||||
| Total non-performing assets as a percentage of total assets | 0.62 | % | 0.62 | % | 0.63 | % | 0.76 | % | 0.59 | % | ||||||||||
| Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5) | 0.81 | % | 0.82 | % | 0.83 | % | 0.93 | % | 0.78 | % | ||||||||||
(1) Annualized where appropriate.
(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average total interest-earning assets.
(4) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
(5) For periods in 2023, balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings. For the period in 2022, the balances only include troubled debt restructurings.
Summary of Results of Operations
Net income for the three months ended December 31, 2023 was $0.5 million compared to net income of $2.6 million for the three months ended September 30, 2023 and a net loss of ($9.2) million for the three months ended December 31, 2022. The decrease of net income for the three months ended December 31, 2023 compared to the three months ended September 30, 2023 was attributed mainly to a decrease in non-interest income and an increase in non-interest expense, partially offset by a decrease in provision for income taxes and, increases in a benefit for credit losses and net interest income. The increase of net income for the three months ended December 31, 2023 compared to the three months ended December 31, 2022 was largely due to increases in benefit for credit losses, net interest income and non-interest income, partially offset by increases in provision for income taxes and non-interest expense.
Net income for the year ended December 31, 2023 was $3.4 million compared to a net loss of ($30.0) million for the year ended December 31, 2022. The increase in net income was attributable to an increase in benefit for credit losses and a decrease in non-interest expense and an increase in non-interest income, partially offset by an increase in provision for income taxes and a decrease in net interest income.
Net Interest Income and Net Margin
Net interest income for the three months ended December 31, 2023, increased $0.7 million, or 3.96%, to $17.2 million compared to $16.5 million for the three months ended September 30, 2023 and increased $1.0 million, or 6.38%, compared to $16.2 million for the three months ended December 31, 2022.
Net interest margin was 2.66% for the three months ended December 31, 2023 compared to 2.58% for the prior quarter, an increase of 8bps and 2.97% for the same period last year, a decrease of 31bps. The decrease in net interest margin for the three months ended December 31, 2023 when compared to the same period last year was a result of an increase in the cost of funds driven by higher interest rates.
Non-interest Income
Non-interest income for the three months ended December 31, 2023, was $1.3 million, a decrease of $4.3 million, or 77.16%, compared to the three months ended September 30, 2023 and an increase of $0.8 million, or 194.05%, compared to the three months ended December 31, 2022.
The $4.3 million decrease in non-interest income for the three months ended December 31, 2023 compared to the three months ended September 30, 2023 was largely attributable to a grant of $3.7 million received in the third quarter of 2023 from the U.S. Treasury, partially offset by a smaller grant of $0.4 million received in the fourth quarter of 2023 from the U.S. Treasury. The decrease in non-interest income was also impacted by decreases of $0.6 million in other non-interest income and $0.5 million in late and prepayment charges.
Non-interest income for the year ended December 31, 2023, was $10.2 million, an increase of $3.8 million, or 59.26%, compared to $6.4 million for the year ended December 31, 2022. The $3.8 million increase from the year ended December 31, 2022 was attributable to two grants totaled $4.2 million received from the U.S. Treasury and an increase of $1.7 million in late and prepayment charges, partially offset by decreases of $1.3 million in loan origination and $0.9 million in brokerage commission.
Non-interest Expense
Non-interest expense for the three months ended December 31, 2023, was $17.9 million, an increase of $0.6 million, or 3.36%, compared to $17.3 million for the three months ended September 30, 2023 and an increase of $2.1 million, or 13.52%, compared to $15.8 million for the three months ended December 31, 2022.
The $2.1 million increase from the three months ended December 31, 2022 was mainly attributable to increases of $1.8 million in compensation and benefits, $0.9 million in provision for contingencies and $0.5 million in professional fees, partially offset by a decrease of $0.9 million in other operating expense.
Non-interest expense for the year ended December 31, 2023 was $68.7 million, a decrease of $17.2 million, or 19.99%, compared to $85.8 million for the year ended December 31, 2022. The $17.2 million decrease of non-interest expense from the year ended December 31, 2022 was attributable to $17.9 million Grain consumer microloan write-off during 2022 compared with $1.5 million of Grain consumer microloan recoveries recognized during the current period. The decrease in non-interest expense was also impacted by a $5.0 million contribution to the Ponce De Leon Foundation during 2022, partially offset by increases of $2.8 million in compensation and benefits, $2.2 million in provision for contingencies, $1.3 million in data processing expenses and $1.2 million in professional fees.
Balance Sheet Summary
Total assets increased $438.7 million, or 18.98%, to $2.75 billion as of December 31, 2023 from $2.31 billion as of December 31, 2022. The increase in total assets is largely attributable to increases of $402.8 million in net loans receivable, $84.8 million in cash and cash equivalents, $10.7 million in other assets and $8.0 million in mortgage loans held for sale, partially offset by decreases of $49.1 million in held-to-maturity securities, $9.6 million in available-for-sale securities and $5.3 million in Federal Home Loan Bank of New York stock.
Total liabilities increased $440.0 million, or 24.19%, to $2.26 billion as of December 31, 2023 from $1.82 billion as of December 31, 2022. The increase in total liabilities was largely attributable to increases of $255.2 million in deposits, $167.0 million in borrowings, $10.6 million in accrued interest payable and $8.0 million in other liabilities.
Total stockholders' equity decreased $1.3 million, or 0.26%, to $491.4 million as of December 31, 2023, from $492.7 million as of December 31, 2022. This decrease in stockholders' equity was largely attributable to $11.0 million in share repurchases during 2023 and $2.2 million in other comprehensive loss, offset by $3.4 million in net income, $1.9 million impact to additional paid in capital as a result of share-based compensation, $1.1 million as a result of implementation of CECL and $1.1 million from release of ESOP shares.
About Ponce Financial Group, Inc.
Ponce Financial Group, Inc. is the holding company for Ponce Bank. Ponce Bank is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank's business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those funds, together with funds generated from operations and borrowings, in mortgage loans, consisting of 1-4 family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties, construction and land, and, to a lesser extent, in business and consumer loans. Ponce Bank also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises, as well as, mortgage-backed securities, corporate bonds and obligations, and Federal Home Loan Bank stock.
Forward Looking Statements
Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as "believes," "will," "would," "expects," "project," "may," "could," "developments," "strategic," "launching," "opportunities," "anticipates," "estimates," "intends," "plans," "targets" and similar expressions. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which Ponce Bank operates, including changes that adversely affect borrowers' ability to service and repay Ponce Bank's loans; anticipated losses with respect to the Company's investment in Grain; changes in the value of securities in the investment portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; changes in government regulation; changes in accounting standards and practices; the risk that intangibles recorded in the financial statements will become impaired; demand for loans in Ponce Bank's market area; Ponce Bank's ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that Ponce Financial Group, Inc. may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in Ponce Financial Group, Inc.'s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the "SEC"), which are available at the SEC's website, www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Ponce Financial Group, Inc. disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as may be required by applicable law or regulation.
Ponce Financial Group, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(Dollars in thousands, except for share data)
| As of | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks: | |||||||||||||||||||
| Cash | $ | 28,930 | $ | 26,046 | $ | 31,162 | $ | 26,951 | $ | 31,977 | |||||||||
| Interest-bearing deposits | 110,260 | 90,966 | 212,627 | 157,736 | 22,383 | ||||||||||||||
| Total cash and cash equivalents | 139,190 | 117,012 | 243,789 | 184,687 | 54,360 | ||||||||||||||
| Available-for-sale securities, at fair value | 119,902 | 116,753 | 123,720 | 128,320 | 129,505 | ||||||||||||||
| Held-to-maturity securities, at amortized cost (1) | 461,748 | 471,065 | 481,952 | 491,649 | 510,820 | ||||||||||||||
| Placement with banks | 249 | 996 | 996 | 1,245 | 1,494 | ||||||||||||||
| Mortgage loans held for sale, at fair value | 9,980 | 14,103 | 10,070 | 2,987 | 1,979 | ||||||||||||||
| Loans receivable, net | 1,895,886 | 1,787,607 | 1,695,047 | 1,614,428 | 1,493,127 | ||||||||||||||
| Accrued interest receivable | 18,010 | 16,624 | 16,054 | 15,435 | 15,049 | ||||||||||||||
| Premises and equipment, net | 16,053 | 16,453 | 16,856 | 17,215 | 17,446 | ||||||||||||||
| Right of use assets | 31,272 | 32,110 | 32,435 | 33,147 | 33,423 | ||||||||||||||
| Federal Home Loan Bank of New York stock (FHLBNY), at cost | 19,377 | 18,870 | 19,195 | 19,209 | 24,661 | ||||||||||||||
| Deferred tax assets | 14,332 | 15,984 | 15,924 | 15,413 | 16,137 | ||||||||||||||
| Other assets | 24,723 | 16,286 | 15,919 | 15,799 | 13,988 | ||||||||||||||
| Total assets | $ | 2,750,722 | $ | 2,623,863 | $ | 2,671,957 | $ | 2,539,534 | $ | 2,311,989 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||
| Deposits | $ | 1,507,620 | $ | 1,401,132 | $ | 1,442,013 | $ | 1,336,877 | $ | 1,252,412 | |||||||||
| Operating lease liabilities | 32,684 | 33,459 | 33,716 | 34,308 | 34,532 | ||||||||||||||
| Accrued interest payable | 11,965 | 8,385 | 4,704 | 1,767 | 1,390 | ||||||||||||||
| Advance payments by borrowers for taxes and insurance | 10,778 | 13,743 | 12,402 | 14,902 | 9,724 | ||||||||||||||
| Borrowings | 684,421 | 675,100 | 682,100 | 648,375 | 517,375 | ||||||||||||||
| Other liabilities | 11,859 | 6,986 | 6,540 | 7,264 | 3,856 | ||||||||||||||
| Total liabilities | 2,259,327 | 2,138,805 | 2,181,475 | 2,043,493 | 1,819,289 | ||||||||||||||
| Commitments and contingencies | |||||||||||||||||||
| Stockholders' Equity: | |||||||||||||||||||
| Preferred stock, $0.01 par value; 100,000,000 shares authorized | 225,000 | 225,000 | 225,000 | 225,000 | 225,000 | ||||||||||||||
| Common stock, $0.01 par value; 200,000,000 shares authorized | 249 | 249 | 249 | 249 | 249 | ||||||||||||||
| Treasury stock, at cost | (9,747 | ) | (10,975 | ) | (5,202 | ) | (2 | ) | (2 | ) | |||||||||
| Additional paid-in-capital | 207,106 | 207,626 | 207,287 | 206,883 | 206,508 | ||||||||||||||
| Retained earnings | 97,420 | 96,902 | 94,312 | 94,399 | 92,955 | ||||||||||||||
| Accumulated other comprehensive loss | (15,649 | ) | (20,468 | ) | (17,597 | ) | (16,629 | ) | (17,860 | ) | |||||||||
| Unearned compensation - ESOP | (12,984 | ) | (13,276 | ) | (13,567 | ) | (13,859 | ) | (14,150 | ) | |||||||||
| Total stockholders' equity | 491,395 | 485,058 | 490,482 | 496,041 | 492,700 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 2,750,722 | $ | 2,623,863 | $ | 2,671,957 | $ | 2,539,534 | $ | 2,311,989 | |||||||||
(1) Included for the quarterly period ended December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023 were $0.4 million, $0.6 million, $0.9 million and $0.8 million, respectively, related to the allowance for credit loss on held-to-maturity securities.
Ponce Financial Group, Inc. and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
| Three Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| Interest and dividend income: | |||||||||||||||||||
| Interest on loans receivable | $ | 27,814 | $ | 25,276 | $ | 23,015 | $ | 19,700 | $ | 18,550 | |||||||||
| Interest on deposits due from banks | 990 | 1,969 | 1,817 | 197 | 199 | ||||||||||||||
| Interest and dividend on securities and FHLBNY stock | 6,146 | 6,261 | 6,223 | 6,459 | 6,184 | ||||||||||||||
| Total interest and dividend income | 34,950 | 33,506 | 31,055 | 26,356 | 24,933 | ||||||||||||||
| Interest expense: | |||||||||||||||||||
| Interest on certificates of deposit | 5,103 | 4,362 | 3,881 | 3,225 | 1,786 | ||||||||||||||
| Interest on other deposits | 5,706 | 5,639 | 4,413 | 2,812 | 3,649 | ||||||||||||||
| Interest on borrowings | 6,944 | 6,963 | 6,479 | 5,074 | 3,332 | ||||||||||||||
| Total interest expense | 17,753 | 16,964 | 14,773 | 11,111 | 8,767 | ||||||||||||||
| Net interest income | 17,197 | 16,542 | 16,282 | 15,245 | 16,166 | ||||||||||||||
| (Benefit) provision for credit losses | (375 | ) | 535 | 987 | (174 | ) | 12,641 | ||||||||||||
| Net interest income after provision (benefit) for credit losses | 17,572 | 16,007 | 15,295 | 15,419 | 3,525 | ||||||||||||||
| Non-interest income: | |||||||||||||||||||
| Service charges and fees | 498 | 516 | 481 | 491 | 481 | ||||||||||||||
| Brokerage commissions | 13 | 17 | 35 | 15 | 180 | ||||||||||||||
| Late and prepayment charges | 365 | 899 | 372 | 729 | 263 | ||||||||||||||
| Income on sale of mortgage loans | 244 | 173 | 82 | 99 | 7 | ||||||||||||||
| Loan origination (1) | - | - | - | - | (557 | ) | |||||||||||||
| Grant income | 438 | 3,718 | - | - | - | ||||||||||||||
| Other | (273 | ) | 304 | 522 | 485 | 63 | |||||||||||||
| Total non-interest income | 1,285 | 5,627 | 1,492 | 1,819 | 437 | ||||||||||||||
| Non-interest expense: | |||||||||||||||||||
| Compensation and benefits | 8,262 | 7,566 | 7,425 | 7,446 | 6,501 | ||||||||||||||
| Occupancy and equipment | 3,686 | 3,588 | 3,724 | 3,570 | 3,928 | ||||||||||||||
| Data processing expenses | 1,101 | 1,582 | 1,208 | 1,192 | 1,114 | ||||||||||||||
| Direct loan expenses | 497 | 369 | 345 | 412 | 454 | ||||||||||||||
| Provision for contingencies | 418 | 391 | 517 | 985 | (440 | ) | |||||||||||||
| Insurance and surety bond premiums | 250 | 255 | 248 | 265 | 270 | ||||||||||||||
| Office supplies, telephone and postage | 294 | 301 | 489 | 399 | 375 | ||||||||||||||
| Professional fees | 2,040 | 1,693 | 1,904 | 1,455 | 1,571 | ||||||||||||||
| Grain (recoveries) and write-off | (152 | ) | (69 | ) | (346 | ) | (914 | ) | (515 | ) | |||||||||
| Marketing and promotional expenses | 146 | 248 | 303 | 128 | 256 | ||||||||||||||
| Directors fees and regulatory assessment | 173 | 169 | 160 | 155 | 196 | ||||||||||||||
| Other operating expenses | 1,182 | 1,223 | 1,112 | 1,268 | 2,055 | ||||||||||||||
| Total non-interest expense | 17,897 | 17,316 | 17,089 | 16,361 | 15,765 | ||||||||||||||
| Income (loss) before income taxes | 960 | 4,318 | (302 | ) | 877 | (11,803 | ) | ||||||||||||
| Provision (benefit) for income taxes | 442 | 1,728 | (215 | ) | 546 | (2,589 | ) | ||||||||||||
| Net income (loss) | $ | 518 | $ | 2,590 | $ | (87 | ) | $ | 331 | $ | (9,214 | ) | |||||||
| Earnings (loss) per common share: | |||||||||||||||||||
| Basic | $ | 0.02 | $ | 0.12 | $ | (0.00 | ) | $ | 0.01 | $ | (0.40 | ) | |||||||
| Diluted | $ | 0.02 | $ | 0.12 | $ | (0.00 | ) | $ | 0.01 | $ | (0.40 | ) | |||||||
| Weighted average common shares outstanding: | |||||||||||||||||||
| Basic | 22,224,945 | 22,272,076 | 23,208,168 | 23,293,013 | 23,168,097 | ||||||||||||||
| Diluted | 22,406,102 | 22,349,217 | 23,208,168 | 23,324,532 | 23,168,097 | ||||||||||||||
(1) Amounts for the quarterly period ended December 31, 2022 include the reversal of $0.8 million of loan origination income that had been taken upfront in prior quarters of 2022 (as opposed to deferred over the life of ?the loan)?.
Ponce Financial Group, Inc. and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
| For the Years Ended December 31, | ||||||||||||||||
| 2023 | 2022 | Variance $ | Variance % | |||||||||||||
| Interest and dividend income: | ||||||||||||||||
| Interest on loans receivable | $ | 95,805 | $ | 69,865 | $ | 25,940 | 37.13 | % | ||||||||
| Interest on deposits due from banks | 4,973 | 713 | 4,260 | 597.48 | % | |||||||||||
| Interest and dividend on securities and FHLBNY stock | 25,089 | 12,174 | 12,915 | 106.09 | % | |||||||||||
| Total interest and dividend income | 125,867 | 82,752 | 43,115 | 52.10 | % | |||||||||||
| Interest expense: | ||||||||||||||||
| Interest on certificates of deposit | 16,571 | 4,148 | 12,423 | 299.49 | % | |||||||||||
| Interest on other deposits | 18,570 | 5,802 | 12,768 | 220.06 | % | |||||||||||
| Interest on borrowings | 25,460 | 6,199 | 19,261 | 310.71 | % | |||||||||||
| Total interest expense | 60,601 | 16,149 | 44,452 | 275.26 | % | |||||||||||
| Net interest income | 65,266 | 66,603 | (1,337 | ) | (2.01 | %) | ||||||||||
| Provision for credit losses | 973 | 24,046 | (23,073 | ) | (95.95 | %) | ||||||||||
| Net interest income after provision for credit losses | 64,293 | 42,557 | 21,736 | 51.08 | % | |||||||||||
| Non-interest income: | ||||||||||||||||
| Service charges and fees | 1,986 | 1,830 | 156 | 8.52 | % | |||||||||||
| Brokerage commissions | 80 | 1,020 | (940 | ) | (92.16 | %) | ||||||||||
| Late and prepayment charges | 2,365 | 623 | 1,742 | 279.61 | % | |||||||||||
| Income on sale of mortgage loans | 598 | 741 | (143 | ) | (19.30 | %) | ||||||||||
| Loan origination | - | 1,286 | (1,286 | ) | (100.00 | %) | ||||||||||
| Grant income | 4,156 | - | 4,156 | - | % | |||||||||||
| Loss on sale of premises and equipment | - | (436 | ) | 436 | (100.00 | %) | ||||||||||
| Other | 1,038 | 1,355 | (317 | ) | (23.39 | %) | ||||||||||
| Total non-interest income | 10,223 | 6,419 | 3,804 | 59.26 | % | |||||||||||
| Non-interest expense: | ||||||||||||||||
| Compensation and benefits | 30,699 | 27,914 | 2,785 | 9.98 | % | |||||||||||
| Occupancy and equipment | 14,568 | 13,968 | 600 | 4.30 | % | |||||||||||
| Data processing expenses | 5,083 | 3,779 | 1,304 | 34.51 | % | |||||||||||
| Direct loan expenses | 1,623 | 2,487 | (864 | ) | (34.74 | %) | ||||||||||
| Provision for contingencies | 2,311 | 126 | 2,185 | 1,734.13 | % | |||||||||||
| Insurance and surety bond premiums | 1,018 | 870 | 148 | 17.01 | % | |||||||||||
| Office supplies, telephone and postage | 1,483 | 1,555 | (72 | ) | (4.63 | %) | ||||||||||
| Professional fees | 7,092 | 5,904 | 1,188 | 20.12 | % | |||||||||||
| Contribution to the Ponce De Leon Foundation | - | 4,995 | (4,995 | ) | (100.00 | %) | ||||||||||
| Grain (recoveries) and write-off | (1,481 | ) | 17,940 | (19,421 | ) | (108.26 | %) | |||||||||
| Marketing and promotional expenses | 825 | 593 | 232 | 39.12 | % | |||||||||||
| Directors fees and regulatory assessment | 657 | 705 | (48 | ) | (6.81 | %) | ||||||||||
| Other operating expenses | 4,785 | 4,986 | (201 | ) | (4.03 | %) | ||||||||||
| Total non-interest expense | 68,663 | 85,822 | (17,159 | ) | (19.99 | %) | ||||||||||
| Income (loss) before income taxes | 5,853 | (36,846 | ) | 42,699 | (115.89 | %) | ||||||||||
| Provision (benefit) for income taxes | 2,501 | (6,845 | ) | 9,346 | (136.54 | %) | ||||||||||
| Net income (loss) | $ | 3,352 | $ | (30,001 | ) | $ | 33,353 | (111.17 | %) | |||||||
| Earnings (loss) per common share: | ||||||||||||||||
| Basic | $ | 0.15 | $ | (1.32 | ) | $ | 1.47 | (111.15 | %) | |||||||
| Diluted | $ | 0.15 | $ | (1.32 | ) | $ | 1.47 | (111.11 | %) | |||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 22,745,317 | 22,690,943 | 54,374 | 0.24 | % | |||||||||||
| Diluted | 22,822,313 | 22,690,943 | 131,370 | 0.58 | % | |||||||||||
Ponce Financial Group, Inc. and Subsidiaries
Key Metrics
| At or for the Three Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| Performance Ratios: | |||||||||||||||||||
| Return on average assets (1) | 0.08 | % | 0.39 | % | (0.01 | %) | 0.06 | % | (1.62 | %) | |||||||||
| Return on average equity (1) | 0.42 | % | 2.11 | % | (0.07 | %) | 0.27 | % | (7.28 | %) | |||||||||
| Net interest rate spread (1) (2) | 1.63 | % | 1.58 | % | 1.66 | % | 1.78 | % | 2.13 | % | |||||||||
| Net interest margin (1) (3) | 2.66 | % | 2.58 | % | 2.65 | % | 2.75 | % | 2.97 | % | |||||||||
| Non-interest expense to average assets (1) | 2.66 | % | 2.58 | % | 2.65 | % | 2.79 | % | 2.78 | % | |||||||||
| Efficiency ratio (4) | 96.83 | % | 78.11 | % | 96.15 | % | 95.88 | % | 94.95 | % | |||||||||
| Average interest-earning assets to average interest- bearing liabilities | 137.49 | % | 137.92 | % | 141.14 | % | 148.20 | % | 152.30 | % | |||||||||
| Average equity to average assets | 18.25 | % | 18.32 | % | 19.21 | % | 20.91 | % | 22.32 | % | |||||||||
| Capital Ratios: | |||||||||||||||||||
| Total capital to risk weighted assets (Bank only) | 23.30 | % | 25.10 | % | 26.30 | % | 27.54 | % | 30.53 | % | |||||||||
| Tier 1 capital to risk weighted assets (Bank only) | 22.05 | % | 23.85 | % | 25.05 | % | 26.28 | % | 29.26 | % | |||||||||
| Common equity Tier 1 capital to risk-weighted assets (Bank only) | 22.05 | % | 23.85 | % | 25.05 | % | 26.28 | % | 29.26 | % | |||||||||
| Tier 1 capital to average assets (Bank only) | 17.49 | % | 17.51 | % | 17.95 | % | 19.51 | % | 20.47 | % | |||||||||
| Asset Quality Ratios: | |||||||||||||||||||
| Allowance for credit losses on loans as a percentage of total loans | 1.36 | % | 1.51 | % | 1.64 | % | 1.77 | % | 2.27 | % | |||||||||
| Allowance for credit losses on loans as a percentage of nonperforming loans | 152.99 | % | 169.49 | % | 167.06 | % | 149.73 | % | 252.33 | % | |||||||||
| Net (charge-offs) recoveries to average outstanding loans (1) | (0.24 | %) | (0.34 | %) | (0.41 | %) | (0.57 | %) | (0.85 | %) | |||||||||
| Non-performing loans as a percentage of total gross loans | 0.89 | % | 0.89 | % | 0.98 | % | 1.18 | % | 0.90 | % | |||||||||
| Non-performing loans as a percentage of total assets | 0.62 | % | 0.62 | % | 0.63 | % | 0.76 | % | 0.59 | % | |||||||||
| Total non-performing assets as a percentage of total assets | 0.62 | % | 0.62 | % | 0.63 | % | 0.76 | % | 0.59 | % | |||||||||
| Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5) | 0.81 | % | 0.82 | % | 0.83 | % | 0.93 | % | 0.78 | % | |||||||||
| Other: | |||||||||||||||||||
| Number of offices | 18 | 19 | 19 | 19 | 19 | ||||||||||||||
| Number of full-time equivalent employees | 237 | 243 | 244 | 251 | 253 | ||||||||||||||
(1) Annualized where appropriate.
(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average total interest-earning assets.
(4) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
(5) For periods in 2023, balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings. For the period in 2022, the balances only include troubled debt restructurings.
Ponce Financial Group, Inc. and Subsidiaries
Securities Portfolio
| December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||
| Gross | Gross | Gross | Gross | |||||||||||||||||||||||||||||
| Amortized | Unrealized | Unrealized | Fair | Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||||||||||
| Cost | Gains | Losses | Value | Cost | Gains | Losses | Value | |||||||||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
| Available-for-Sale Securities: | ||||||||||||||||||||||||||||||||
| U.S. Government Bonds | $ | 2,990 | $ | - | $ | (206 | ) | $ | 2,784 | $ | 2,985 | $ | - | $ | (296 | ) | $ | 2,689 | ||||||||||||||
| Corporate Bonds | 25,790 | - | (2,122 | ) | 23,668 | 25,824 | - | (2,465 | ) | 23,359 | ||||||||||||||||||||||
| Mortgage-Backed Securities: | ||||||||||||||||||||||||||||||||
| Collateralized Mortgage Obligations (1) | 39,375 | - | (6,227 | ) | 33,148 | 44,503 | - | (6,726 | ) | 37,777 | ||||||||||||||||||||||
| FHLMC Certificates | 10,163 | - | (1,482 | ) | 8,681 | 11,310 | - | (1,676 | ) | 9,634 | ||||||||||||||||||||||
| FNMA Certificates | 61,359 | - | (9,842 | ) | 51,517 | 67,199 | - | (11,271 | ) | 55,928 | ||||||||||||||||||||||
| GNMA Certificates | 104 | - | - | 104 | 122 | - | (4 | ) | 118 | |||||||||||||||||||||||
| Total available-for-sale securities | $ | 139,781 | $ | - | $ | (19,879 | ) | $ | 119,902 | $ | 151,943 | $ | - | $ | (22,438 | ) | $ | 129,505 | ||||||||||||||
| Held-to-Maturity Securities: | ||||||||||||||||||||||||||||||||
| U.S. Agency Bonds | $ | 25,000 | $ | - | $ | (181 | ) | $ | 24,819 | $ | 35,000 | $ | - | $ | (380 | ) | $ | 34,620 | ||||||||||||||
| Corporate Bonds | 82,500 | - | (2,691 | ) | 79,809 | 82,500 | 57 | (3,819 | ) | 78,738 | ||||||||||||||||||||||
| Mortgage-Backed Securities: | ||||||||||||||||||||||||||||||||
| Collateralized Mortgage Obligations (1) | 212,093 | 104 | (5,170 | ) | 207,027 | 235,479 | 192 | (5,558 | ) | 230,113 | ||||||||||||||||||||||
| FHLMC Certificates | 3,897 | - | (244 | ) | 3,653 | 4,120 | - | (268 | ) | 3,852 | ||||||||||||||||||||||
| FNMA Certificates | 118,944 | - | (4,088 | ) | 114,856 | 131,918 | - | (5,227 | ) | 126,691 | ||||||||||||||||||||||
| SBA Certificates | 19,712 | 166 | - | 19,878 | 21,803 | 34 | - | 21,837 | ||||||||||||||||||||||||
| Allowance for Credit Losses | (398 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
| Total held-to-maturity securities | $ | 461,748 | $ | 270 | $ | (12,374 | ) | $ | 450,042 | $ | 510,820 | $ | 283 | $ | (15,252 | ) | $ | 495,851 | ||||||||||||||
(1) Comprised of Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA") and Ginnie Mae ("GNMA") issued securities.
The following table presents the activity in the allowance for credit losses for held-to-maturity securities.
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Beginning balance | $ | - | $ | - | ||||
| CECL adoption | 662 | - | ||||||
| Provision for credit losses | (264 | ) | - | |||||
| Allowance for credit losses on securities | $ | 398 | $ | - | ||||
Ponce Financial Group, Inc. and Subsidiaries
Loan Portfolio
| As of | ||||||||||||||||||||||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
| Mortgage loans: | ||||||||||||||||||||||||||||||||||||||||
| 1-4 family residential | ||||||||||||||||||||||||||||||||||||||||
| Investor Owned | $ | 343,689 | 17.89 | % | $ | 347,082 | 19.13 | % | $ | 351,754 | 20.43 | % | $ | 354,559 | 21.60 | % | $ | 343,968 | 22.54 | % | ||||||||||||||||||||
| Owner-Occupied | 152,311 | 7.93 | % | 151,866 | 8.37 | % | 154,116 | 8.94 | % | 149,481 | 9.10 | % | 134,878 | 8.84 | % | |||||||||||||||||||||||||
| Multifamily residential | 550,559 | 28.65 | % | 553,694 | 30.52 | % | 550,033 | 31.94 | % | 553,430 | 33.71 | % | 494,667 | 32.42 | % | |||||||||||||||||||||||||
| Nonresidential properties | 342,343 | 17.81 | % | 321,472 | 17.71 | % | 317,416 | 18.43 | % | 314,560 | 19.17 | % | 308,043 | 20.19 | % | |||||||||||||||||||||||||
| Construction and land | 503,925 | 26.22 | % | 411,383 | 22.67 | % | 315,843 | 18.34 | % | 235,157 | 14.33 | % | 185,018 | 12.13 | % | |||||||||||||||||||||||||
| Total mortgage loans | 1,892,827 | 98.50 | % | 1,785,497 | 98.40 | % | 1,689,162 | 98.08 | % | 1,607,187 | 97.91 | % | 1,466,574 | 96.12 | % | |||||||||||||||||||||||||
| Non-mortgage loans: | ||||||||||||||||||||||||||||||||||||||||
| Business loans (1) | 19,779 | 1.03 | % | 18,416 | 1.02 | % | 21,041 | 1.22 | % | 19,890 | 1.21 | % | 39,965 | 2.62 | % | |||||||||||||||||||||||||
| Consumer loans (2) | 8,966 | 0.47 | % | 10,416 | 0.58 | % | 11,958 | 0.70 | % | 14,227 | 0.88 | % | 19,129 | 1.26 | % | |||||||||||||||||||||||||
| Total non-mortgage loans | 28,745 | 1.50 | % | 28,832 | 1.60 | % | 32,999 | 1.92 | % | 34,117 | 2.09 | % | 59,094 | 3.88 | % | |||||||||||||||||||||||||
| Total loans, gross | 1,921,572 | 100.00 | % | 1,814,329 | 100.00 | % | 1,722,161 | 100.00 | % | 1,641,304 | 100.00 | % | 1,525,668 | 100.00 | % | |||||||||||||||||||||||||
| Net deferred loan origination costs | 468 | 692 | 1,059 | 2,099 | 2,051 | |||||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans | (26,154 | ) | (27,414 | ) | (28,173 | ) | (28,975 | ) | (34,592 | ) | ||||||||||||||||||||||||||||||
| Loans, net | $ | 1,895,886 | $ | 1,787,607 | $ | 1,695,047 | $ | 1,614,428 | $ | 1,493,127 | ||||||||||||||||||||||||||||||
(1) As of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, business loans include $1.0 million, $1.1 million, $3.2 million, $3.6 million and $20.0 million, respectively, of PPP loans.
(2) As of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, consumer loans include $8.0 million, $9.3 million, $11.2 million, $13.4 million and $18.2 million, respectively, of loans originated by the Bank pursuant to its arrangement with Grain.
Ponce Financial Group, Inc. and Subsidiaries
Grain Loan Exposure
| Grain Technologies, Inc. ("Grain") Total Exposure as of December 31, 2023 | ||||
| (in thousands) | ||||
| Receivable from Grain | ||||
| Microloans originated - put back to Grain (inception-to-December 31, 2023) | $ | 24,104 | ||
| Write-downs, net of recoveries (inception-to-date as of December 31, 2023) | (15,459 | ) | ||
| Cash receipts from Grain (inception-to-December 31, 2023) | (6,819 | ) | ||
| Grant/reserve | (1,826 | ) | ||
| Net receivable as of December 31, 2023 | $ | - | ||
| Microloan receivables from Grain Borrowers | ||||
| Grain originated loans receivable as of December 31, 2023 | $ | 7,985 | ||
| Allowance for credit losses on loans as of December 31, 2023 (1) | (7,026 | ) | ||
| Microloans, net of allowance for credit losses on loans as of December 31, 2023 | $ | 959 | ||
| Investments | ||||
| Investment in Grain | $ | 1,000 | ||
| Investment in Grain write-off in Q3 2022 | (1,000 | ) | ||
| Investment in Grain as of December 31, 2023 | - | |||
| Total exposure related to Grain as of December 31, 2023 (2) | $ | 959 | ||
(1) Includes $0.3 million for allowance for unused commitments on the $2.4 million of unused commitments available to Grain originated borrowers reported in other liabilities in the accompanying Consolidated Statements of Financial Conditions. Excludes $1.6 million of security deposits by Grain originated borrowers reported in deposits in the accompanying Consolidated Statements of Financial Conditions.
(2) Total remaining exposure to Grain borrowers. These loans are now serviced by the Bank.
On November 1, 2023, Ponce Financial Group, Inc. and Grain signed a Perpetual Software License Agreement in order for the Bank to assume the servicing of the remaining Grain loans. In order to facilitate the transfer of the servicing responsibilities to the Bank, Grain granted the Bank a perpetual right and license to use the Grain software, including the source code to service the remaining loans.
Ponce Financial Group, Inc. and Subsidiaries
Allowance for Credit Losses on Loans
| For the Three Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Allowance for credit losses on loans at beginning of the period | $ | 27,414 | $ | 28,173 | $ | 28,975 | $ | 34,592 | $ | 25,108 | |||||||||
| Provision (benefit) for credit losses on loans | (126 | ) | 750 | 934 | (321 | ) | 12,641 | ||||||||||||
| Adoption of CECL | - | - | - | (3,090 | ) | - | |||||||||||||
| Charge-offs: | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residences | |||||||||||||||||||
| Investor owned | - | - | - | - | - | ||||||||||||||
| Owner occupied | - | - | - | - | - | ||||||||||||||
| Multifamily residences | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | - | - | - | - | - | ||||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | (63 | ) | - | - | - | - | |||||||||||||
| Consumer | (1,135 | ) | (1,592 | ) | (1,931 | ) | (2,569 | ) | (3,659 | ) | |||||||||
| Total charge-offs | (1,198 | ) | (1,592 | ) | (1,931 | ) | (2,569 | ) | (3,659 | ) | |||||||||
| Recoveries: | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residences | |||||||||||||||||||
| Investor owned | - | - | - | - | - | ||||||||||||||
| Owner occupied | - | - | - | - | - | ||||||||||||||
| Multifamily residences | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | - | - | - | - | - | ||||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | - | 3 | - | - | - | ||||||||||||||
| Consumer | 64 | 80 | 195 | 363 | 502 | ||||||||||||||
| Total recoveries | 64 | 83 | 195 | 363 | 502 | ||||||||||||||
| Net (charge-offs) recoveries | (1,134 | ) | (1,509 | ) | (1,736 | ) | (2,206 | ) | (3,157 | ) | |||||||||
| Allowance for credit losses on loans at end of the period | $ | 26,154 | $ | 27,414 | $ | 28,173 | $ | 28,975 | $ | 34,592 | |||||||||
Ponce Financial Group, Inc. and Subsidiaries
Deposits
| As of | ||||||||||||||||||||||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
| Demand | $ | 243,384 | 16.14 | % | $ | 265,862 | 18.98 | % | $ | 266,545 | 18.48 | % | $ | 282,741 | 21.15 | % | $ | 289,149 | 23.08 | % | ||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||
| NOW/IOLA accounts | 19,676 | 1.31 | % | 22,519 | 1.61 | % | 22,754 | 1.57 | % | 21,735 | 1.63 | % | 24,349 | 1.94 | % | |||||||||||||||||||||||||
| Money market accounts (1) | 432,735 | 28.70 | % | 370,500 | 26.44 | % | 387,970 | 26.91 | % | 293,140 | 21.93 | % | 236,143 | 18.86 | % | |||||||||||||||||||||||||
| Reciprocal deposits | 96,860 | 6.42 | % | 82,670 | 5.90 | % | 100,919 | 7.00 | % | 109,649 | 8.20 | % | 114,049 | 9.11 | % | |||||||||||||||||||||||||
| Savings accounts | 114,139 | 7.57 | % | 117,870 | 8.41 | % | 119,635 | 8.30 | % | 127,731 | 9.55 | % | 130,432 | 10.41 | % | |||||||||||||||||||||||||
| Total NOW, money market, reciprocal and savings accounts | 663,410 | 44.00 | % | 593,559 | 42.36 | % | 631,278 | 43.78 | % | 552,255 | 41.31 | % | 504,973 | 40.32 | % | |||||||||||||||||||||||||
| Certificates of deposit of $250K or more (1) | 132,153 | 8.77 | % | 122,353 | 8.73 | % | 120,043 | 8.32 | % | 113,955 | 8.52 | % | 106,336 | 8.49 | % | |||||||||||||||||||||||||
| Brokered certificates of deposit (2) | 98,729 | 6.55 | % | 98,729 | 7.05 | % | 98,729 | 6.85 | % | 98,754 | 7.39 | % | 98,754 | 7.89 | % | |||||||||||||||||||||||||
| Listing service deposits (2) | 14,433 | 0.96 | % | 15,180 | 1.08 | % | 20,258 | 1.40 | % | 28,417 | 2.13 | % | 35,813 | 2.86 | % | |||||||||||||||||||||||||
| All other certificates of deposit less than $250K (1) | 355,511 | 23.58 | % | 305,449 | 21.80 | % | 305,160 | 21.17 | % | 260,755 | 19.50 | % | 217,387 | 17.36 | % | |||||||||||||||||||||||||
| Total certificates of deposit | 600,826 | 39.86 | % | 541,711 | 38.66 | % | 544,190 | 37.74 | % | 501,881 | 37.54 | % | 458,290 | 36.60 | % | |||||||||||||||||||||||||
| Total interest-bearing deposits | 1,264,236 | 83.86 | % | 1,135,270 | 81.02 | % | 1,175,468 | 81.52 | % | 1,054,136 | 78.85 | % | 963,263 | 76.92 | % | |||||||||||||||||||||||||
| Total deposits | $ | 1,507,620 | 100.00 | % | $ | 1,401,132 | 100.00 | % | $ | 1,442,013 | 100.00 | % | $ | 1,336,877 | 100.00 | % | $ | 1,252,412 | 100.00 | % | ||||||||||||||||||||
(1) As of June 30, 2023, March 31, 2023 and December 31, 2022, $150.6 million, $115.3 million and $81.7 million, respectively, of SaveBetter deposits were reclassified from money market accounts to certificates of deposits. $36.4 million, $37.1 million and $36.2 million, respectively, were reclassified to Certificates of deposits of $250K or more and $114.2 million, $78.2 million and $45.5 million, respectively, were reclassified to certificates of deposit less than $250K.
(2) As of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, there were $0.3 million, $0.3 million, $3.3 million, $9.5 million and $13.6 million, respectively, in individual listing service deposits amounting to $250,000 or more. All brokered certificates of deposit individually amounted to less than $250,000.
Ponce Financial Group, Inc. and Subsidiaries
Borrowings
| December 31, | December 31, | ||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Scheduled Maturity | Redeemable at Call Date | Weighted Average Rate | Scheduled Maturity | Redeemable at Call Date | Weighted Average Rate | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Overnight line of credit advance | $ | - | $ | - | - | % | $ | 6,000 | $ | 6,000 | 4.61 | % | |||||||||||
| Term advances ending: | |||||||||||||||||||||||
| 2023 | $ | - | $ | - | - | $ | 178,375 | $ | 178,375 | 4.32 | |||||||||||||
| 2024 | 363,321 | 363,321 | 4.55 | 50,000 | 50,000 | 4.75 | |||||||||||||||||
| 2025 | 50,000 | 50,000 | 4.41 | 50,000 | 50,000 | 4.41 | |||||||||||||||||
| 2026 | - | - | - | - | - | - | |||||||||||||||||
| 2027 | 212,000 | 212,000 | 3.44 | 183,000 | 183,000 | 3.25 | |||||||||||||||||
| 2028 | 9,100 | 9,100 | 3.84 | - | - | - | |||||||||||||||||
| Thereafter | 50,000 | 50,000 | 3.35 | 50,000 | 50,000 | 3.35 | |||||||||||||||||
| $ | 684,421 | $ | 684,421 | 4.10 | % | $ | 517,375 | $ | 517,375 | 3.90 | % | ||||||||||||
Ponce Financial Group, Inc. and Subsidiaries
Nonperforming Assets
| As of Three Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Non-accrual loans: | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||
| Investor owned | $ | 793 | $ | 396 | $ | 296 | $ | 2,836 | $ | 2,844 | |||||||||
| Owner occupied | 1,682 | 1,685 | 2,363 | 2,245 | 961 | ||||||||||||||
| Multifamily residential | 2,979 | 1,444 | 1,435 | - | - | ||||||||||||||
| Nonresidential properties | - | - | - | - | - | ||||||||||||||
| Construction and land | 10,759 | 11,721 | 11,721 | 11,906 | 7,567 | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | 19 | 209 | - | 40 | - | ||||||||||||||
| Consumer | 146 | - | - | - | - | ||||||||||||||
| Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty) (1) | $ | 16,378 | $ | 15,455 | $ | 15,815 | $ | 17,027 | $ | 11,372 | |||||||||
| Non-accruing modifications to borrowers experiencing financial difficulty (1): | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||
| Investor owned | $ | 270 | $ | 270 | $ | 209 | $ | 213 | $ | 217 | |||||||||
| Owner occupied | 447 | 449 | 840 | 2,020 | 2,027 | ||||||||||||||
| Multifamily residential | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | - | - | - | 91 | 93 | ||||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | - | - | - | - | - | ||||||||||||||
| Consumer | - | - | - | - | - | ||||||||||||||
| Total non-accruing modifications to borrowers experiencing financial difficulty (1) | 717 | 719 | 1,049 | 2,324 | 2,337 | ||||||||||||||
| Total non-accrual loans | $ | 17,095 | $ | 16,174 | $ | 16,864 | $ | 19,351 | $ | 13,709 | |||||||||
| Accruing modifications to borrowers experiencing financial difficulty (1): | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||
| Investor owned | $ | 2,112 | $ | 2,131 | $ | 2,161 | $ | 2,185 | $ | 2,207 | |||||||||
| Owner occupied | 2,313 | 2,335 | 2,353 | 1,310 | 1,328 | ||||||||||||||
| Multifamily residential | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | 757 | 765 | 783 | 701 | 708 | ||||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | - | - | - | - | - | ||||||||||||||
| Consumer | - | - | - | - | - | ||||||||||||||
| Total accruing modifications to borrowers experiencing financial difficulty (1) | $ | 5,182 | $ | 5,231 | $ | 5,297 | $ | 4,196 | $ | 4,243 | |||||||||
| Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty (1) | $ | 22,277 | $ | 21,405 | $ | 22,161 | $ | 23,547 | $ | 17,952 | |||||||||
| Total non-performing loans to total gross loans | 0.89 | % | 0.89 | % | 0.98 | % | 1.18 | % | 0.90 | % | |||||||||
| Total non-performing assets to total assets | 0.62 | % | 0.62 | % | 0.63 | % | 0.76 | % | 0.59 | % | |||||||||
| Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (1) | 0.81 | % | 0.82 | % | 0.83 | % | 0.93 | % | 0.78 | % | |||||||||
(1) For periods in 2023, balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings. For the period in 2022, the balances only include troubled debt restructurings.
Ponce Financial Group, Inc. and Subsidiaries
Average Balance Sheets
| For the Three Months Ended December 31, | |||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||
| Average | Average | ||||||||||||||||||||
| Outstanding | Average | Outstanding | Average | ||||||||||||||||||
| Balance | Interest | Yield/Rate (1) | Balance | Interest | Yield/Rate (1) | ||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Loans (2) | $ | 1,884,301 | $ | 27,814 | 5.86 | % | $ | 1,478,308 | $ | 18,550 | 4.98 | % | |||||||||
| Securities (3) | 582,563 | 5,715 | 3.89 | % | 636,457 | 5,931 | 3.70 | % | |||||||||||||
| Other (4) (5) | 96,070 | 1,421 | 5.87 | % | 47,069 | 452 | 3.81 | % | |||||||||||||
| Total interest-earning assets | 2,562,934 | 34,950 | 5.41 | % | 2,161,834 | 24,933 | 4.58 | % | |||||||||||||
| Non-interest-earning assets (5) | 107,305 | 87,861 | |||||||||||||||||||
| Total assets | $ | 2,670,239 | $ | 2,249,695 | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| NOW/IOLA | $ | 20,210 | $ | 8 | 0.16 | % | $ | 25,349 | $ | 22 | 0.34 | % | |||||||||
| Money market (6) | 474,306 | 5,668 | 4.74 | % | 437,813 | 3,619 | 3.28 | % | |||||||||||||
| Savings | 116,600 | 28 | 0.10 | % | 139,115 | 8 | 0.02 | % | |||||||||||||
| Certificates of deposit (6) | 559,713 | 5,103 | 3.62 | % | 434,368 | 1,786 | 1.63 | % | |||||||||||||
| Total deposits | 1,170,829 | 10,807 | 3.66 | % | 1,036,645 | 5,435 | 2.08 | % | |||||||||||||
| Advance payments by borrowers | 15,033 | 2 | 0.05 | % | 12,942 | - | - | % | |||||||||||||
| Borrowings | 678,235 | 6,944 | 4.06 | % | 369,832 | 3,332 | 3.57 | % | |||||||||||||
| Total interest-bearing liabilities | 1,864,097 | 17,753 | 3.78 | % | 1,419,419 | 8,767 | 2.45 | % | |||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||
| Non-interest-bearing demand | 267,150 | - | 325,616 | - | |||||||||||||||||
| Other non-interest-bearing liabilities | 51,764 | - | 2,424 | - | |||||||||||||||||
| Total non-interest-bearing liabilities | 318,914 | - | 328,040 | - | |||||||||||||||||
| Total liabilities | 2,183,011 | 17,753 | 1,747,459 | 8,767 | |||||||||||||||||
| Total equity | 487,228 | 502,236 | |||||||||||||||||||
| Total liabilities and total equity | $ | 2,670,239 | 3.78 | % | $ | 2,249,695 | 2.45 | % | |||||||||||||
| Net interest income | $ | 17,197 | $ | 16,166 | |||||||||||||||||
| Net interest rate spread (7) | 1.63 | % | 2.13 | % | |||||||||||||||||
| Net interest-earning assets (8) | $ | 698,837 | $ | 742,415 | |||||||||||||||||
| Net interest margin (9) | 2.66 | % | 2.97 | % | |||||||||||||||||
| Average interest-earning assets to interest-bearing liabilities | 137.49 | % | 152.30 | % | |||||||||||||||||
(1) Annualized where appropriate.
(2) Loans include loans and mortgage loans held for sale, at fair value.
(3) Securities include available-for-sale securities and held-to-maturity securities.
(4) Includes FHLBNY demand account, FHLBNY stock dividends and FRB demand deposits.
(5) FRB demand deposits for prior period have been reclassified for consistency.
(6) Includes reclassification of $65.5 million average outstanding balances and $0.5 million of interest expenses from money market to certificates of deposit for the three months ended December 31, 2022.
(7) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(8) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(9) Net interest margin represents net interest income divided by average total interest-earning assets.
Ponce Financial Group, Inc. and Subsidiaries
Average Balance Sheets
| For the Years Ended December 31, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Average | Average | ||||||||||||||||||||||
| Outstanding | Average | Outstanding | Average | ||||||||||||||||||||
| Balance | Interest | Yield/Rate (1) | Balance | Interest | Yield/Rate | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||
| Loans (2) | $ | 1,730,275 | $ | 95,805 | 5.54 | % | $ | 1,375,723 | $ | 69,865 | 5.08 | % | |||||||||||
| Securities (3) | 606,815 | 23,342 | 3.85 | % | 357,446 | 11,709 | 3.28 | % | |||||||||||||||
| Other (4) (5) | 119,923 | 6,720 | 5.60 | % | 84,133 | 1,178 | 1.40 | % | |||||||||||||||
| Total interest-earning assets | 2,457,013 | 125,867 | 5.12 | % | 1,817,302 | 82,752 | 4.55 | % | |||||||||||||||
| Non-interest-earning assets (5) | 115,760 | 124,351 | |||||||||||||||||||||
| Total assets | $ | 2,572,773 | $ | 1,941,653 | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||
| NOW/IOLA | $ | 22,168 | $ | 33 | 0.15 | % | $ | 30,151 | $ | 65 | 0.22 | % | |||||||||||
| Money market (6) | 424,160 | 18,413 | 4.34 | % | 367,838 | 5,604 | 1.52 | % | |||||||||||||||
| Savings | 121,550 | 116 | 0.10 | % | 138,137 | 128 | 0.09 | % | |||||||||||||||
| Certificates of deposit (6) | 528,999 | 16,571 | 3.13 | % | 407,739 | 4,148 | 1.02 | % | |||||||||||||||
| Total deposits | 1,096,877 | 35,133 | 3.20 | % | 943,865 | 9,945 | 1.05 | % | |||||||||||||||
| Advance payments by borrowers | 14,869 | 8 | 0.05 | % | 11,514 | 5 | 0.04 | % | |||||||||||||||
| Borrowings | 633,116 | 25,460 | 4.02 | % | 206,969 | 6,199 | 3.00 | % | |||||||||||||||
| Total interest-bearing liabilities | 1,744,862 | 60,601 | 3.47 | % | 1,162,348 | 16,149 | 1.39 | % | |||||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||||
| Non-interest-bearing demand | 290,335 | - | 344,505 | - | |||||||||||||||||||
| Other non-interest-bearing liabilities | 45,858 | - | 33,225 | - | |||||||||||||||||||
| Total non-interest-bearing liabilities | 336,193 | - | 377,730 | - | |||||||||||||||||||
| Total liabilities | 2,081,055 | 60,601 | 1,540,078 | 16,149 | |||||||||||||||||||
| Total equity | 491,718 | 401,575 | |||||||||||||||||||||
| Total liabilities and total equity | $ | 2,572,773 | 3.47 | % | $ | 1,941,653 | 1.39 | % | |||||||||||||||
| Net interest income | $ | 65,266 | $ | 66,603 | |||||||||||||||||||
| Net interest rate spread (7) | 1.65 | % | 3.16 | % | |||||||||||||||||||
| Net interest-earning assets (8) | $ | 712,151 | $ | 654,954 | |||||||||||||||||||
| Net interest margin (9) | 2.66 | % | 3.66 | % | |||||||||||||||||||
| Average interest-earning assets to | |||||||||||||||||||||||
| interest-bearing liabilities | 140.81 | % | 156.35 | % | |||||||||||||||||||
(1) Annualized where appropriate.
(2) Loans include loans and mortgage loans held for sale, at fair value.
(3) Securities include available-for-sale securities and held-to-maturity securities.
(4) Includes FHLBNY demand account, FHLBNY stock dividends and FRB demand deposit.
(5) FRB demand deposits for prior period have been reclassified for consistency.
(6) Includes reclassification of $25.7 million average outstanding balances and $0.7 million of interest expenses from money market to certificates of deposit for the year ended December 31, 2022.
(7) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(8) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(9) Net interest margin represents net interest income divided by average total interest-earning assets.
Ponce Financial Group, Inc. and Subsidiaries
Other Data
| As of | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| Other Data | |||||||||||||||||||
| Common shares issued | 24,886,711 | 24,886,711 | 24,886,711 | 24,865,476 | 24,861,329 | ||||||||||||||
| Less treasury shares | 1,101,191 | 1,233,111 | 617,924 | 1,976 | 1,976 | ||||||||||||||
| Common shares outstanding at end of period | 23,785,520 | 23,653,600 | 24,268,787 | 24,863,500 | 24,859,353 | ||||||||||||||
| Book value per common share | $ | 11.20 | $ | 10.99 | $ | 10.94 | $ | 10.90 | $ | 10.77 | |||||||||
| Tangible book value per common share | $ | 11.20 | $ | 10.99 | $ | 10.94 | $ | 10.90 | $ | 10.77 | |||||||||
Contact:
Frank Perez
frank.perez@poncebank.net
718-981-9000
