NEW YORK, Oct. 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 third quarter of 2024.
Third Quarter 2024 Highlights (Compared to Prior Periods):
- Net income available to common stockholders was $2.2 million, or $0.10 per diluted share for the three months ended September 30, 2024, as compared to net income available to common stockholders of $3.1 million, or $0.14 per diluted share for the three months ended June 30, 2024 and net income available to common stockholders of $2.6 million, or $0.12 per diluted share for the three months ended September 30, 2023. Total net income for the three months ended September 30, 2024 was $2.4 million. The Company paid dividends of $0.3 million on its preferred stock during the quarter ended September 30, 2024.
- Included in the $2.2 million of net income available to common stockholders for the third quarter of 2024 results is $41.3 million in interest and dividend income and $1.2 million in non-interest income, offset by $22.3 million in interest expense, $16.3 million in non-interest expense, $0.8 million in provision for credit losses, $0.6 million in provision for income taxes and $0.3 million in dividends on preferred shares.
- Net interest income of $19.0 million for the third quarter of 2024 increased $1.1 million, or 6.25%, from the prior quarter and increased $2.5 million, or 15.00%, from the same quarter last year.
- Net interest margin was 2.65% for the third quarter of 2024, versus 2.62% for the prior quarter and versus 2.58% for the same quarter last year.
Nine Months 2024 Highlights (Compared to 2023):
- Net income available to common stockholders was $7.7 million, or $0.34 per diluted share for the nine months ended September 30, 2024, as compared to net income available to common stockholders of $2.8 million, or $0.12 per diluted share for the nine months ended September 30, 2023. Total net income for the nine months ended September 30, 2024, prior to the payment of $0.4 million in dividends on preferred shares, was $8.0 million.
- Net interest income for the nine months ended September 30, 2024 was $55.8 million, an increase of $7.7 million, or 15.98%, compared to $48.1 million for the nine months ended September 30, 2023.
- Non-interest income for the nine months ended September 30, 2024 was $5.1 million, a decrease of $3.8 million, or 42.76%, from $8.9 million for the nine months ended September 30, 2023. The decrease was primarily driven by a $3.7 million in grants that were received in the prior year.
- Non-interest expense for the nine months ended September 30, 2024 was $49.4 million, a decrease of $1.4 million, or 2.67%, compared to $50.8 million for the nine months ended September 30, 2023.
- Cash and equivalents were $155.8 million as of September 30, 2024, an increase of $16.6 million, or 11.94%, from $139.2 million as of December 31, 2023.
- Securities totaled $514.7 million as of September 30, 2024, a decrease of $66.9 million, or 11.50%, from $581.7 million as of December 31, 2023 primarily due to regular principal payments, maturity of one available-for-sale security in the amount of $4.0 million and call of one held-to-maturity security in the amount of $25.0 million.
- Net loans receivable were $2.18 billion as of September 30, 2024, an increase of $284.4 million, or 15.00%, from $1.90 billion as of December 31, 2023.
- Deposits were $1.87 billion as of September 30, 2024, an increase of $362.7 million, or 24.06%, from $1.51 billion as of December 31, 2023.
President and Chief Executive Officer's Comments
Carlos P. Naudon, Ponce Financial Group's President and CEO, stated, "We continue to make progress quarter over quarter both in terms of our economic performance as well as serving our communities. Book value per share continues to grow and is now $11.74 (up $0.75 vs last year) and total equity per common share stands at $21.18. Our levels of liquidity and capital remain strong. Our net interest income grew quarter over quarter, and we're well positioned for a decline in interest rates. We reduced our borrowings during the quarter, paying off the entirety of our Bank Term Funding Program Loan, while lowering the overall cost and extending our maturities. We remain committed to the communities we serve and our status as a Minority Depository Institution ("MDI")/Community Development Financial Institution ("CDFI"), and we continue 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, "During the quarter, the US Treasury Department issued proposed guidelines under which it may sell their ECIP investment back to the issuers or related non-profit affiliates. We believe the adoption of the proposed regulations would be greatly beneficial to Ponce Financial Group, although there can be no assurance that the proposed regulations will be adopted, or that that will be adopted in their current form. Most of our loan growth of $157.6 million this quarter is explained by our desire to ensure qualification under the proposed regulations, if adopted. Deposits also grew significantly during the quarter including $35.0 million from the Banking Development District program of New York."
Selected performance metrics are as follows (refer to "Key Metrics" for additional information):
| At or for the Three Months Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| Performance Ratios (Annualized): | 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| Return on average assets (1) | 0.33 | % | 0.45 | % | 0.33 | % | 0.08 | % | 0.39 | % | ||||||||||
| Return on average equity (1) | 1.93 | % | 2.59 | % | 1.97 | % | 0.42 | % | 2.11 | % | ||||||||||
| Net interest rate spread (1) (2) | 1.77 | % | 1.72 | % | 1.82 | % | 1.74 | % | 1.68 | % | ||||||||||
| Net interest margin (1) (3) | 2.65 | % | 2.62 | % | 2.71 | % | 2.66 | % | 2.58 | % | ||||||||||
| Non-interest expense to average assets (1) | 2.19 | % | 2.28 | % | 2.35 | % | 2.66 | % | 2.58 | % | ||||||||||
| Efficiency ratio (4) | 80.87 | % | 80.09 | % | 82.56 | % | 96.83 | % | 78.11 | % | ||||||||||
| Average interest-earning assets to average interest- bearing liabilities | 128.35 | % | 129.73 | % | 129.69 | % | 133.50 | % | 134.49 | % | ||||||||||
| Average equity to average assets | 16.97 | % | 17.41 | % | 17.00 | % | 18.25 | % | 18.32 | % | ||||||||||
| At or for the Three Months Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| Capital Ratios (Annualized): | 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| Total capital to risk-weighted assets (Bank only) | 21.61 | % | 22.47 | % | 22.79 | % | 23.30 | % | 25.10 | % | ||||||||||
| Tier 1 capital to risk-weighted assets (Bank only) | 20.45 | % | 21.24 | % | 21.54 | % | 22.05 | % | 23.85 | % | ||||||||||
| Common equity Tier 1 capital to risk-weighted assets (Bank only) | 20.45 | % | 21.24 | % | 21.54 | % | 22.05 | % | 23.85 | % | ||||||||||
| Tier 1 capital to average assets (Bank only) | 16.19 | % | 16.70 | % | 16.26 | % | 17.49 | % | 17.51 | % | ||||||||||
| At or for the Three Months Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| Asset Quality Ratios (Annualized): | 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| Allowance for loan losses as a percentage of total loans | 1.09 | % | 1.18 | % | 1.23 | % | 1.36 | % | 1.51 | % | ||||||||||
| Allowance for loan losses as a percentage of nonperforming loans | 139.52 | % | 130.28 | % | 140.90 | % | 152.99 | % | 169.49 | % | ||||||||||
| Net (charge-offs) recoveries to average outstanding loans (1) | (0.17 | %) | (0.10 | %) | (0.25 | %) | (0.24 | %) | (0.34 | %) | ||||||||||
| Non-performing loans as a percentage of total gross loans | 0.78 | % | 0.89 | % | 0.87 | % | 0.89 | % | 0.89 | % | ||||||||||
| Non-performing loans as a percentage of total assets | 0.57 | % | 0.65 | % | 0.62 | % | 0.62 | % | 0.62 | % | ||||||||||
| Total non-performing assets as a percentage of total assets | 0.57 | % | 0.65 | % | 0.62 | % | 0.62 | % | 0.62 | % | ||||||||||
| Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5) | 0.73 | % | 0.82 | % | 0.79 | % | 0.81 | % | 0.82 | % | ||||||||||
| (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 cost 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) | 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. | |
Summary of Results of Operations
Net income for the three months ended September 30, 2024 was $2.4 million compared to net income of $3.2 million for the three months ended June 30, 2024 and net income of $2.6 million for the three months ended September 30, 2023.
The decrease of net income for the three months ended September 30, 2024 compared to the three months ended June 30, 2024 was attributed mainly to an increase of $1.2 million in provision for credit losses, a decrease of $1.1 million in non-interest income, an increase of $0.2 million in non-interest expense, partially offset by an increase of $1.1 million in net interest income and a decrease of $0.6 million in provision for income taxes.
The decrease of net income for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was largely due to a decrease of $4.5 million in non-interest income as a result of a $3.7 million grant reported in the third quarter of 2023 and an increase of $0.3 million in provision for credit losses, partially offset by an increase of $2.5 million in net interest income and decreases of $1.1 million in provision for income taxes and $ 1.0 million in non-interest expense.
Net income for the nine months ended September 30, 2024 was $8.0 million compared to a net income of $2.8 million for the nine months ended September 30, 2023. The increase of $5.2 million in net income was attributable to an increase of $7.7 million in net interest income, a decrease of $1.3 million in non-interest expense and a decrease of $1.1 million in provision for credit losses, partially offset by a decrease of $3.8 million in non-interest income and an increase of $1.1 million in provision for income taxes.
Net Interest Income and Net Margin
Net interest income for the three months ended September 30, 2024, increased $1.1 million, or 6.25%, to $19.0 million compared to $17.9 million for the three months ended June 30, 2024 and increased $2.5 million, or 15.00%, compared to $16.5 million for the three months ended September 30, 2023.
Net interest income for the nine months ended September 30, 2024, increased $7.7 million, or 15.98%, to $55.8 million, compared to $48.1 million for the nine months ended September 30, 2023. The increase of $7.7 million of net interest income was attributable to an increase of $28.8 million in total interest and dividend income, offset by an increase of $21.1 million in total interest expense.
For the nine months ended September 30, 2024, provision for credit losses amounted to $0.2 million consisting of a provision for credit losses on loans in the amount of $0.4 million and a benefit for credit losses on held-to-maturity securities in the amount of $0.2 million. The $0.4 million provision for credit losses on loans for the nine months ended September 30, 2024 resulted from a benefit of $2.1 million related to microloans offset by a provision of $2.5 million related to non-microloans.
Net interest margin was 2.65% for the three months ended September 30, 2024 compared to 2.62% for the prior quarter, an increase of 3bps and 2.58% for the same period last year, an increase of 7bps.
Net interest margin was 2.66% for the nine months ended September 30, 2024 compared to 2.65% for the nine months ended September 30, 2023, an increase of 1bp.
Non-interest Income
Non-interest income for the three months ended September 30, 2024, was $1.2 million, a decrease of $1.1 million, or 49.03%, compared to $2.3 million the three months ended June 30, 2024 and a decrease of $4.5 million, or 79.55%, compared to $5.6 million the three months ended September 30, 2023.
The $1.1 million decrease in non-interest income for the three months ended September 30, 2024 compared to the three months ended June 30, 2024 was largely attributable to decreases of $0.7 million in other non-interest income related to the mark to market adjustments on a private equity fund investment and $0.3 million in late and prepayment charges.
The $4.5 million decrease in non-interest income for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was largely attributable to $3.7 million in grants received in the third quarter of 2023 and a decrease of $0.8 million in late and prepayment charges.
Non-interest income for the nine months ended September 30, 2024, was $5.1 million, a decrease of $3.8 million, or 42.76%, compared to $8.9 million for the nine months ended September 30, 2023. The decrease was largely attributable to $3.7 million related to grants received in the third quarter of 2023 and a decrease of $1.1 million in late and prepayment charges, partially, offset by increases of $0.6 million in other non-interest income and $0.4 million in income on sale of mortgage loans.
Non-interest Expense
Non-interest expense for the three months ended September 30, 2024, was $16.3 million, an increase of $0.2 million, or 1.03%, compared to $16.1 million for the three months ended June 30, 2024 and a decrease of $1.0 million, or 5.79%, compared to $17.3 million for the three months ended September 30, 2023.
The $0.2 million increase from the three months ended September 30, 2024 compared to the three months ended June 30, 2024 was mainly attributable to a decrease of $0.2 million in benefit for contingencies and an increase of $0.2 million in occupancy and equipment, partially offset by a decrease of $0.3 million in other operating expense.
The $1.0 million decrease from the three months ended September 30, 2023 compared to the three months ended September 30, 2023 was mainly attributable to decreases of $0.6 million in provision for contingencies, $0.5 million in data processing expenses and $0.3 million in professional fees, partially offset by increases of $0.2 million in direct loan expenses, $0.2 million in occupancy and equipment and $0.1 million in compensation and benefits.
Non-interest expense for the nine months ended September 30, 2024, was $49.4 million, a decrease of $1.4 million, or 2.67%, compared to $50.8 million for the nine months ended September 30, 2023. The $1.4 million decrease from the nine months ended September 30, 2023 was mainly attributable to decreases of $2.5 million in provision for contingencies, $0.7 million in data processing expenses, $0.6 million in professional fees and $0.5 million in office supplies, telephone and postage, partially offset by a decrease of $1.2 million in microloans recoveries and increases of $0.8 million in compensation and benefits and $0.8 million in direct loan expenses.
Balance Sheet Summary
Total assets increased $265.2 million, or 9.64%, to $3.02 billion as of September 30, 2024 from $2.75 billion as of December 31, 2023. The increase in total assets is largely attributable to increases of $284.4 million in net loans receivable, $26.7 million in other assets, $16.6 million in cash and cash equivalents, $9.1 million in Federal Home Loan Bank of New York stock and $0.8 million in net premises and equipment, partially offset by decreases of $58.0 million in held-to-maturity securities, $8.9 million in available-for-sale securities, $2.5 million in deferred tax assets, $1.5 million in right of use assets, $1.1 million in accrued interest receivable and $0.4 million in mortgage loans held for sale.
Total liabilities increased $252.1 million, or 11.16%, to $2.51 billion as of September 30, 2024 from $2.26 billion as of December 31, 2023. The increase in total liabilities was largely attributable to an increase of $362.7 million in deposits, $3.0 million in advance payments by borrowers for taxes and insurance and $0.8 million in other liabilities, partially offset by decreases of $104.0 million in borrowings, $9.0 million in accrued interest payable and $1.4 million in operating lease liabilities.
Total stockholders' equity increased $13.2 million, or 2.69%, to $504.6 million as of September 30, 2024, from $491.4 million as of December 31, 2023. This increase in stockholders' equity was largely attributable to $8.0 million in net income, $3.0 million in other comprehensive income, $1.6 million impact to additional paid in capital as a result of share-based compensation and $1.0 million from release of ESOP shares, offset by $0.4 million in preferred stock dividend for shares issued pursuant to the ECIP.
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; 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 | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks: | |||||||||||||||||||
| Cash | $ | 32,061 | $ | 23,128 | $ | 29,972 | $ | 28,930 | $ | 26,046 | |||||||||
| Interest-bearing deposits | 123,751 | 80,038 | 104,752 | 110,260 | 90,966 | ||||||||||||||
| Total cash and cash equivalents | 155,812 | 103,166 | 134,724 | 139,190 | 117,012 | ||||||||||||||
| Available-for-sale securities, at fair value | 111,005 | 113,125 | 116,044 | 119,902 | 116,753 | ||||||||||||||
| Held-to-maturity securities, at amortized cost | 403,736 | 442,113 | 452,955 | 461,748 | 471,065 | ||||||||||||||
| Placement with banks | 249 | 249 | 249 | 249 | 996 | ||||||||||||||
| Mortgage loans held for sale, at fair value | 9,566 | 37,764 | 7,860 | 9,980 | 14,103 | ||||||||||||||
| Loans receivable, net | 2,180,331 | 2,022,173 | 1,981,428 | 1,895,886 | 1,787,607 | ||||||||||||||
| Accrued interest receivable | 16,890 | 17,441 | 18,063 | 18,010 | 16,624 | ||||||||||||||
| Premises and equipment, net | 16,843 | 16,976 | 17,396 | 16,053 | 16,453 | ||||||||||||||
| Right of use assets | 29,785 | 30,349 | 31,021 | 31,272 | 32,110 | ||||||||||||||
| Federal Home Loan Bank of New York stock (FHLBNY), at cost | 28,515 | 23,972 | 23,892 | 19,377 | 18,870 | ||||||||||||||
| Deferred tax assets | 11,845 | 13,172 | 13,919 | 14,332 | 15,984 | ||||||||||||||
| Other assets | 51,392 | 21,507 | 21,151 | 24,723 | 16,286 | ||||||||||||||
| Total assets | $ | 3,015,969 | $ | 2,842,007 | $ | 2,818,702 | $ | 2,750,722 | $ | 2,623,863 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||
| Deposits | $ | 1,870,323 | $ | 1,606,097 | $ | 1,585,784 | $ | 1,507,620 | $ | 1,401,132 | |||||||||
| Operating lease liabilities | 31,343 | 31,861 | 32,486 | 32,684 | 33,459 | ||||||||||||||
| Accrued interest payable | 2,918 | 6,820 | 4,218 | 11,965 | 8,385 | ||||||||||||||
| Advance payments by borrowers for taxes and insurance | 13,733 | 10,838 | 13,245 | 10,778 | 13,743 | ||||||||||||||
| Borrowings | 580,421 | 680,421 | 680,421 | 684,421 | 675,100 | ||||||||||||||
| Other liabilities | 12,642 | 8,313 | 8,866 | 11,859 | 6,986 | ||||||||||||||
| Total liabilities | 2,511,380 | 2,344,350 | 2,325,020 | 2,259,327 | 2,138,805 | ||||||||||||||
| 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 | (9,445 | ) | (9,519 | ) | (9,702 | ) | (9,747 | ) | (10,975 | ) | |||||||||
| Additional paid-in-capital | 208,478 | 207,934 | 207,584 | 207,106 | 207,626 | ||||||||||||||
| Retained earnings | 105,103 | 102,951 | 99,834 | 97,420 | 96,902 | ||||||||||||||
| Accumulated other comprehensive loss | (12,686 | ) | (16,557 | ) | (16,590 | ) | (15,649 | ) | (20,468 | ) | |||||||||
| Unearned compensation - ESOP | (12,110 | ) | (12,401 | ) | (12,693 | ) | (12,984 | ) | (13,276 | ) | |||||||||
| Total stockholders' equity | 504,589 | 497,657 | 493,682 | 491,395 | 485,058 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,015,969 | $ | 2,842,007 | $ | 2,818,702 | $ | 2,750,722 | $ | 2,623,863 | |||||||||
Ponce Financial Group, Inc. and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
| Three Months Ended | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| Interest and dividend income: | |||||||||||||||||||
| Interest on loans receivable | $ | 32,945 | $ | 31,281 | $ | 30,664 | $ | 27,814 | $ | 25,276 | |||||||||
| Interest on deposits due from banks | 2,430 | 1,542 | 2,911 | 990 | 1,969 | ||||||||||||||
| Interest and dividend on securities and FHLBNY stock | 5,918 | 5,969 | 6,091 | 6,146 | 6,261 | ||||||||||||||
| Total interest and dividend income | 41,293 | 38,792 | 39,666 | 34,950 | 33,506 | ||||||||||||||
| Interest expense: | |||||||||||||||||||
| Interest on certificates of deposit | 6,926 | 6,358 | 6,380 | 5,103 | 4,362 | ||||||||||||||
| Interest on other deposits | 8,519 | 7,389 | 6,540 | 5,706 | 5,639 | ||||||||||||||
| Interest on borrowings | 6,825 | 7,141 | 7,923 | 6,944 | 6,963 | ||||||||||||||
| Total interest expense | 22,270 | 20,888 | 20,843 | 17,753 | 16,964 | ||||||||||||||
| Net interest income | 19,023 | 17,904 | 18,823 | 17,197 | 16,542 | ||||||||||||||
| Provision (benefit) for credit losses | 789 | (374 | ) | (180 | ) | (375 | ) | 535 | |||||||||||
| Net interest income after provision (benefit) for credit losses | 18,234 | 18,278 | 19,003 | 17,572 | 16,007 | ||||||||||||||
| Non-interest income: | |||||||||||||||||||
| Service charges and fees | 508 | 492 | 473 | 498 | 516 | ||||||||||||||
| Brokerage commissions | - | 9 | 8 | 13 | 17 | ||||||||||||||
| Late and prepayment charges | 77 | 426 | 359 | 365 | 899 | ||||||||||||||
| Income on sale of mortgage loans | 218 | 274 | 302 | 244 | 173 | ||||||||||||||
| Grant income | - | - | - | 438 | 3,718 | ||||||||||||||
| Other | 348 | 1,057 | 565 | (273 | ) | 304 | |||||||||||||
| Total non-interest income | 1,151 | 2,258 | 1,707 | 1,285 | 5,627 | ||||||||||||||
| Non-interest expense: | |||||||||||||||||||
| Compensation and benefits | 7,674 | 7,724 | 7,844 | 8,262 | 7,566 | ||||||||||||||
| Occupancy and equipment | 3,786 | 3,564 | 3,667 | 3,686 | 3,588 | ||||||||||||||
| Data processing expenses | 1,099 | 1,013 | 1,127 | 1,101 | 1,582 | ||||||||||||||
| Direct loan expenses | 573 | 633 | 732 | 497 | 369 | ||||||||||||||
| (Benefit) provision for contingencies | (252 | ) | (493 | ) | 164 | 418 | 391 | ||||||||||||
| Insurance and surety bond premiums | 292 | 263 | 253 | 250 | 255 | ||||||||||||||
| Office supplies, telephone and postage | 222 | 233 | 249 | 294 | 301 | ||||||||||||||
| Professional fees | 1,351 | 1,369 | 1,723 | 2,040 | 1,693 | ||||||||||||||
| Microloans recoveries | (54 | ) | (65 | ) | (53 | ) | (152 | ) | (69 | ) | |||||||||
| Marketing and promotional expenses | 180 | 145 | 100 | 146 | 248 | ||||||||||||||
| Directors fees and regulatory assessment | 178 | 176 | 179 | 173 | 169 | ||||||||||||||
| Other operating expenses | 1,265 | 1,585 | 965 | 1,182 | 1,223 | ||||||||||||||
| Total non-interest expense | 16,314 | 16,147 | 16,950 | 17,897 | 17,316 | ||||||||||||||
| Income before income taxes | 3,071 | 4,389 | 3,760 | 960 | 4,318 | ||||||||||||||
| Provision for income taxes | 638 | 1,197 | 1,346 | 442 | 1,728 | ||||||||||||||
| Net income | $ | 2,433 | $ | 3,192 | $ | 2,414 | $ | 518 | $ | 2,590 | |||||||||
| Dividends on preferred shares | 281 | 75 | - | - | - | ||||||||||||||
| Net income available to common stockholders | $ | 2,152 | $ | 3,117 | $ | 2,414 | $ | 518 | $ | 2,590 | |||||||||
| Earnings per common share: | |||||||||||||||||||
| Basic | $ | 0.10 | $ | 0.14 | $ | 0.11 | $ | 0.02 | $ | 0.12 | |||||||||
| Diluted | $ | 0.10 | $ | 0.14 | $ | 0.11 | $ | 0.02 | $ | 0.12 | |||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||
| Basic | 22,446,009 | 22,409,803 | 22,353,492 | 22,224,945 | 22,272,076 | ||||||||||||||
| Diluted | 22,612,028 | 22,419,309 | 22,366,728 | 22,406,102 | 22,349,217 | ||||||||||||||
Ponce Financial Group, Inc. and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
| For the Nine Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance $ | Variance % | |||||||||||||
| Interest and dividend income: | ||||||||||||||||
| Interest on loans receivable | $ | 94,890 | $ | 67,991 | $ | 26,899 | 39.56 | % | ||||||||
| Interest on deposits due from banks | 6,883 | 3,983 | 2,900 | 72.81 | % | |||||||||||
| Interest and dividend on securities and FHLBNY stock | 17,978 | 18,943 | (965 | ) | (5.09 | %) | ||||||||||
| Total interest and dividend income | 119,751 | 90,917 | 28,834 | 31.71 | % | |||||||||||
| Interest expense: | ||||||||||||||||
| Interest on certificates of deposit | 19,664 | 11,468 | 8,196 | 71.47 | % | |||||||||||
| Interest on other deposits | 22,448 | 12,864 | 9,584 | 74.50 | % | |||||||||||
| Interest on borrowings | 21,889 | 18,516 | 3,373 | 18.22 | % | |||||||||||
| Total interest expense | 64,001 | 42,848 | 21,153 | 49.37 | % | |||||||||||
| Net interest income | 55,750 | 48,069 | 7,681 | 15.98 | % | |||||||||||
| Provision for credit losses | 235 | 1,348 | (1,113 | ) | (82.57 | %) | ||||||||||
| Net interest income after provision for credit losses | 55,515 | 46,721 | 8,794 | 18.82 | % | |||||||||||
| Non-interest income: | ||||||||||||||||
| Service charges and fees | 1,473 | 1,488 | (15 | ) | (1.01 | %) | ||||||||||
| Brokerage commissions | 17 | 67 | (50 | ) | (74.63 | %) | ||||||||||
| Late and prepayment charges | 862 | 2,000 | (1,138 | ) | (56.90 | %) | ||||||||||
| Income on sale of mortgage loans | 794 | 354 | 440 | 124.29 | % | |||||||||||
| Grant income | - | 3,718 | (3,718 | ) | (100.00 | %) | ||||||||||
| Other | 1,970 | 1,311 | 659 | 50.27 | % | |||||||||||
| Total non-interest income | 5,116 | 8,938 | (3,822 | ) | (42.76 | %) | ||||||||||
| Non-interest expense: | ||||||||||||||||
| Compensation and benefits | 23,242 | 22,437 | 805 | 3.59 | % | |||||||||||
| Occupancy and equipment | 11,017 | 10,882 | 135 | 1.24 | % | |||||||||||
| Data processing expenses | 3,239 | 3,982 | (743 | ) | (18.66 | %) | ||||||||||
| Direct loan expenses | 1,938 | 1,126 | 812 | 72.11 | % | |||||||||||
| (Benefit) provision for contingencies | (581 | ) | 1,893 | (2,474 | ) | (130.69 | %) | |||||||||
| Insurance and surety bond premiums | 808 | 768 | 40 | 5.21 | % | |||||||||||
| Office supplies, telephone and postage | 704 | 1,189 | (485 | ) | (40.79 | %) | ||||||||||
| Professional fees | 4,443 | 5,052 | (609 | ) | (12.05 | %) | ||||||||||
| Microloans recoveries | (172 | ) | (1,329 | ) | 1,157 | (87.06 | %) | |||||||||
| Marketing and promotional expenses | 425 | 679 | (254 | ) | (37.41 | %) | ||||||||||
| Directors fees and regulatory assessment | 533 | 484 | 49 | 10.12 | % | |||||||||||
| Other operating expenses | 3,815 | 3,603 | 212 | 5.88 | % | |||||||||||
| Total non-interest expense | 49,411 | 50,766 | (1,355 | ) | (2.67 | %) | ||||||||||
| Income before income taxes | 11,220 | 4,893 | 6,327 | 129.31 | % | |||||||||||
| Provision for income taxes | 3,181 | 2,059 | 1,122 | 54.49 | % | |||||||||||
| Net income | $ | 8,039 | $ | 2,834 | $ | 5,205 | 183.66 | % | ||||||||
| Dividends on preferred shares | 356 | - | 356 | 100.00 | % | |||||||||||
| Net income available to common stockholders | $ | 7,683 | $ | 2,834 | $ | 4,849 | 171.10 | % | ||||||||
| Earnings per common share: | ||||||||||||||||
| Basic | $ | 0.34 | $ | 0.12 | $ | 0.22 | 177.36 | % | ||||||||
| Diluted | $ | 0.34 | $ | 0.12 | $ | 0.22 | 177.10 | % | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 22,403,258 | 22,920,680 | (517,422 | ) | (2.26 | %) | ||||||||||
| Diluted | 22,466,178 | 22,962,956 | (496,778 | ) | (2.16 | %) | ||||||||||
Ponce Financial Group, Inc. and Subsidiaries
Key Metrics
| At or for the Three Months Ended | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| Performance Ratios: | |||||||||||||||||||
| Return on average assets (1) | 0.33 | % | 0.45 | % | 0.33 | % | 0.08 | % | 0.39 | % | |||||||||
| Return on average equity (1) | 1.93 | % | 2.59 | % | 1.97 | % | 0.42 | % | 2.11 | % | |||||||||
| Net interest rate spread (1) (2) | 1.77 | % | 1.72 | % | 1.82 | % | 1.74 | % | 1.68 | % | |||||||||
| Net interest margin (1) (3) | 2.65 | % | 2.62 | % | 2.71 | % | 2.66 | % | 2.58 | % | |||||||||
| Non-interest expense to average assets (1) | 2.19 | % | 2.28 | % | 2.35 | % | 2.66 | % | 2.58 | % | |||||||||
| Efficiency ratio (4) | 80.87 | % | 80.09 | % | 82.56 | % | 96.83 | % | 78.11 | % | |||||||||
| Average interest-earning assets to average interest- bearing liabilities | 128.35 | % | 129.73 | % | 129.69 | % | 133.50 | % | 134.49 | % | |||||||||
| Average equity to average assets | 16.97 | % | 17.41 | % | 17.00 | % | 18.25 | % | 18.32 | % | |||||||||
| Capital Ratios: | |||||||||||||||||||
| Total capital to risk-weighted assets (Bank only) | 21.61 | % | 22.47 | % | 22.79 | % | 23.30 | % | 25.10 | % | |||||||||
| Tier 1 capital to risk-weighted assets (Bank only) | 20.45 | % | 21.24 | % | 21.54 | % | 22.05 | % | 23.85 | % | |||||||||
| Common equity Tier 1 capital to risk-weighted assets (Bank only) | 20.45 | % | 21.24 | % | 21.54 | % | 22.05 | % | 23.85 | % | |||||||||
| Tier 1 capital to average assets (Bank only) | 16.19 | % | 16.70 | % | 16.26 | % | 17.49 | % | 17.51 | % | |||||||||
| Asset Quality Ratios: | |||||||||||||||||||
| Allowance for credit losses on loans as a percentage of total loans | 1.09 | % | 1.18 | % | 1.23 | % | 1.36 | % | 1.51 | % | |||||||||
| Allowance for credit losses on loans as a percentage of nonperforming loans | 139.52 | % | 130.28 | % | 140.90 | % | 152.99 | % | 169.49 | % | |||||||||
| Net (charge-offs) recoveries to average outstanding loans (1) | (0.17 | %) | (0.10 | %) | (0.25 | %) | (0.24 | %) | (0.34 | %) | |||||||||
| Non-performing loans as a percentage of total gross loans | 0.78 | % | 0.89 | % | 0.87 | % | 0.89 | % | 0.89 | % | |||||||||
| Non-performing loans as a percentage of total assets | 0.57 | % | 0.65 | % | 0.62 | % | 0.62 | % | 0.62 | % | |||||||||
| Total non-performing assets as a percentage of total assets | 0.57 | % | 0.65 | % | 0.62 | % | 0.62 | % | 0.62 | % | |||||||||
| Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5) | 0.73 | % | 0.82 | % | 0.79 | % | 0.81 | % | 0.82 | % | |||||||||
| Other: | |||||||||||||||||||
| Number of offices | 19 | 18 | 18 | 18 | 19 | ||||||||||||||
| Number of full-time equivalent employees | 228 | 227 | 233 | 237 | 243 | ||||||||||||||
| (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 non-interest income. | |
| (5) | 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. | |
Ponce Financial Group, Inc. and Subsidiaries
Securities Portfolio
| September 30, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||
| Gross | Gross | Gross | Gross | |||||||||||||||||||||||||||||
| Amortized | Unrealized | Unrealized | Amortized | Unrealized | Unrealized | |||||||||||||||||||||||||||
| Cost | Gains | Losses | Fair Value | Cost | Gains | Losses | Fair Value | |||||||||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
| Available-for-Sale Securities: | ||||||||||||||||||||||||||||||||
| U.S. Government Bonds | $ | 2,993 | $ | - | $ | (124 | ) | $ | 2,869 | $ | 2,990 | $ | - | $ | (206 | ) | $ | 2,784 | ||||||||||||||
| Corporate Bonds | 21,766 | - | (1,438 | ) | 20,328 | 25,790 | - | (2,122 | ) | 23,668 | ||||||||||||||||||||||
| Mortgage-Backed Securities: | ||||||||||||||||||||||||||||||||
| Collateralized Mortgage Obligations (1) | 35,620 | - | (4,976 | ) | 30,644 | 39,375 | - | (6,227 | ) | 33,148 | ||||||||||||||||||||||
| FHLMC Certificates | 9,310 | - | (1,119 | ) | 8,191 | 10,163 | - | (1,482 | ) | 8,681 | ||||||||||||||||||||||
| FNMA Certificates | 57,345 | - | (8,463 | ) | 48,882 | 61,359 | - | (9,842 | ) | 51,517 | ||||||||||||||||||||||
| GNMA Certificates | 91 | - | - | 91 | 104 | - | - | 104 | ||||||||||||||||||||||||
| Total available-for-sale securities | $ | 127,125 | $ | - | $ | (16,120 | ) | $ | 111,005 | $ | 139,781 | $ | - | $ | (19,879 | ) | $ | 119,902 | ||||||||||||||
| Held-to-Maturity Securities: | ||||||||||||||||||||||||||||||||
| U.S. Agency Bonds | $ | 25,000 | $ | - | $ | (49 | ) | $ | 24,951 | $ | 25,000 | $ | - | $ | (181 | ) | $ | 24,819 | ||||||||||||||
| Corporate Bonds | 57,500 | - | (618 | ) | 56,882 | 82,500 | - | (2,691 | ) | 79,809 | ||||||||||||||||||||||
| Mortgage-Backed Securities: | ||||||||||||||||||||||||||||||||
| Collateralized Mortgage Obligations (1) | 193,440 | 454 | (2,946 | ) | 190,948 | 212,093 | 104 | (5,170 | ) | 207,027 | ||||||||||||||||||||||
| FHLMC Certificates | 3,441 | - | (169 | ) | 3,272 | 3,897 | - | (244 | ) | 3,653 | ||||||||||||||||||||||
| FNMA Certificates | 108,577 | 22 | (1,967 | ) | 106,632 | 118,944 | - | (4,088 | ) | 114,856 | ||||||||||||||||||||||
| SBA Certificates | 15,985 | 153 | - | 16,138 | 19,712 | 166 | - | 19,878 | ||||||||||||||||||||||||
| Allowance for Credit Losses | (207 | ) | - | - | - | (398 | ) | - | - | - | ||||||||||||||||||||||
| Total held-to-maturity securities | $ | 403,736 | $ | 629 | $ | (5,749 | ) | $ | 398,823 | $ | 461,748 | $ | 270 | $ | (12,374 | ) | $ | 450,042 | ||||||||||||||
| (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.
| For the Nine | For the | |||||||
| Months Ended | Year Ended | |||||||
| September 30, 2024 | December 31, 2023 | |||||||
| Allowance for credit losses on securities at beginning of the period | $ | 398 | $ | - | ||||
| CECL adoption | - | 662 | ||||||
| Benefit for credit losses | (191 | ) | (264 | ) | ||||
| Allowance for credit losses on securities at end of the period | $ | 207 | $ | 398 | ||||
Ponce Financial Group, Inc. and Subsidiaries
Loan Portfolio
| As of | ||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | ||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
| Mortgage loans: | ||||||||||||||||||||||||||||||||||||||||
| 1-4 family residential | ||||||||||||||||||||||||||||||||||||||||
| Investor Owned | $ | 332,380 | 15.09 | % | $ | 337,292 | 16.49 | % | $ | 339,331 | 16.92 | % | $ | 343,689 | 17.89 | % | $ | 347,082 | 19.13 | % | ||||||||||||||||||||
| Owner-Occupied | 145,065 | 6.59 | % | 147,485 | 7.21 | % | 150,842 | 7.52 | % | 152,311 | 7.93 | % | 151,866 | 8.37 | % | |||||||||||||||||||||||||
| Multifamily residential | 678,029 | 30.78 | % | 545,323 | 26.66 | % | 545,825 | 27.22 | % | 550,559 | 28.65 | % | 553,694 | 30.52 | % | |||||||||||||||||||||||||
| Nonresidential properties | 383,277 | 17.40 | % | 337,583 | 16.51 | % | 327,350 | 16.32 | % | 342,343 | 17.81 | % | 321,472 | 17.71 | % | |||||||||||||||||||||||||
| Construction and land | 631,461 | 28.67 | % | 641,879 | 31.39 | % | 608,665 | 30.35 | % | 503,925 | 26.22 | % | 411,383 | 22.67 | % | |||||||||||||||||||||||||
| Total mortgage loans | 2,170,212 | 98.53 | % | 2,009,562 | 98.26 | % | 1,972,013 | 98.33 | % | 1,892,827 | 98.50 | % | 1,785,497 | 98.40 | % | |||||||||||||||||||||||||
| Non-mortgage loans: | ||||||||||||||||||||||||||||||||||||||||
| Business loans | 28,499 | 1.29 | % | 30,222 | 1.48 | % | 26,664 | 1.33 | % | 19,779 | 1.03 | % | 18,416 | 1.02 | % | |||||||||||||||||||||||||
| Consumer loans (1) | 4,021 | 0.18 | % | 5,305 | 0.26 | % | 6,741 | 0.34 | % | 8,966 | 0.47 | % | 10,416 | 0.58 | % | |||||||||||||||||||||||||
| Total non-mortgage loans | 32,520 | 1.47 | % | 35,527 | 1.74 | % | 33,405 | 1.67 | % | 28,745 | 1.50 | % | 28,832 | 1.60 | % | |||||||||||||||||||||||||
| Total loans, gross | 2,202,732 | 100.00 | % | 2,045,089 | 100.00 | % | 2,005,418 | 100.00 | % | 1,921,572 | 100.00 | % | 1,814,329 | 100.00 | % | |||||||||||||||||||||||||
| Net deferred loan origination costs | 1,565 | 1,145 | 674 | 468 | 692 | |||||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans | (23,966 | ) | (24,061 | ) | (24,664 | ) | (26,154 | ) | (27,414 | ) | ||||||||||||||||||||||||||||||
| Loans, net | $ | 2,180,331 | $ | 2,022,173 | $ | 1,981,428 | $ | 1,895,886 | $ | 1,787,607 | ||||||||||||||||||||||||||||||
| (1) | As of September 30, 2024, June 30,2024, March 31, 2024, December 31, 2023, and September 30, 2023, consumer loans include $3.0 million, $4.3 million, $5.7 million, $8.0 million, and $9.3 million, respectively, of microloans originated by the Bank. | |
Ponce Financial Group, Inc. and Subsidiaries
Microloans Exposure (previously originated by the Bank under its arrangement with Grain)
| Total Microloans Exposure as of September 30, 2024 | ||||
| (in thousands) | ||||
| Microloans Receivable from Grain | ||||
| Microloans originated - put back (inception-to-September 30, 2024) | $ | 23,932 | ||
| Write-downs, net of recoveries (inception-to-date as of September 30, 2024) | (15,287 | ) | ||
| Cash receipts (inception-to-September 30, 2024) | (6,819 | ) | ||
| Grant/reserve | (1,826 | ) | ||
| Net receivable as of September 30, 2024 | $ | - | ||
| Microloans Receivables from Borrowers | ||||
| Microloans receivable as of September 30, 2024 | $ | 3,033 | ||
| Allowance for credit losses on loans as of September 30, 2024 (1) | (2,570 | ) | ||
| Microloans, net of allowance for credit losses on loans as of September 30, 2024 | $ | 463 | ||
| Investments | ||||
| Investment in Grain | $ | 1,000 | ||
| Investment write-off in Q3 2022 | (1,000 | ) | ||
| Net investment as of September 30, 2024 | - | |||
| Total exposure related to microloans as of September 30, 2024 (2) | $ | 463 | ||
| (1) | Excludes $1.5 million of security deposits by microloans originated borrowers reported in deposits in the accompanying Consolidated Statements of Financial Conditions. | |
| (2) | Total remaining exposure to microloan borrowers. These loans are now serviced by the Bank. | |
On November 1, 2023, Ponce Financial Group, Inc. and Grain Technologies, Inc. ("Grain") signed a Perpetual Software License Agreement in order for the Bank to assume the servicing of the remaining microloans. 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 microloans.
Ponce Financial Group, Inc. and Subsidiaries
Allowance for Credit Losses on Loans
| For the Three Months Ended | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Allowance for credit losses on loans at beginning of the period | $ | 24,061 | $ | 24,664 | $ | 26,154 | $ | 27,414 | $ | 28,173 | |||||||||
| Provision (benefit) for credit losses on loans | 801 | (120 | ) | (255 | ) | (126 | ) | 750 | |||||||||||
| Charge-offs: | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residences | |||||||||||||||||||
| Investor owned | - | - | - | - | - | ||||||||||||||
| Owner occupied | - | - | - | - | - | ||||||||||||||
| Multifamily residences | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | (7 | ) | - | - | - | - | |||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | (450 | ) | - | (52 | ) | (63 | ) | - | |||||||||||
| Consumer | (634 | ) | (747 | ) | (1,302 | ) | (1,135 | ) | (1,592 | ) | |||||||||
| Total charge-offs | (1,091 | ) | (747 | ) | (1,354 | ) | (1,198 | ) | (1,592 | ) | |||||||||
| Recoveries: | |||||||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | 1 | 7 | 1 | - | 3 | ||||||||||||||
| Consumer | 194 | 257 | 118 | 64 | 80 | ||||||||||||||
| Total recoveries | 195 | 264 | 119 | 64 | 83 | ||||||||||||||
| Net (charge-offs) recoveries | (896 | ) | (483 | ) | (1,235 | ) | (1,134 | ) | (1,509 | ) | |||||||||
| Allowance for credit losses on loans at end of the period | $ | 23,966 | $ | 24,061 | $ | 24,664 | $ | 26,154 | $ | 27,414 | |||||||||
Ponce Financial Group, Inc. and Subsidiaries
Deposits
| As of | ||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | ||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
| Demand (1) | $ | 182,737 | 9.78 | % | $ | 178,125 | 11.09 | % | $ | 191,541 | 12.07 | % | $ | 185,151 | 12.28 | % | $ | 214,326 | 15.30 | % | ||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||
| NOW/IOLA accounts (1) | 71,445 | 3.82 | % | 81,178 | 5.05 | % | 73,202 | 4.62 | % | 77,909 | 5.17 | % | 74,055 | 5.29 | % | |||||||||||||||||||||||||
| Money market accounts | 660,168 | 35.30 | % | 502,255 | 31.27 | % | 482,344 | 30.42 | % | 432,735 | 28.70 | % | 370,500 | 26.44 | % | |||||||||||||||||||||||||
| Reciprocal deposits | 94,145 | 5.03 | % | 109,945 | 6.85 | % | 97,718 | 6.16 | % | 96,860 | 6.42 | % | 82,670 | 5.90 | % | |||||||||||||||||||||||||
| Savings accounts | 108,941 | 5.82 | % | 109,694 | 6.83 | % | 112,713 | 7.11 | % | 114,139 | 7.57 | % | 117,870 | 8.41 | % | |||||||||||||||||||||||||
| Total NOW, money market, reciprocal and savings accounts | 934,699 | 49.97 | % | 803,072 | 50.00 | % | 765,977 | 48.31 | % | 721,643 | 47.86 | % | 645,095 | 46.04 | % | |||||||||||||||||||||||||
| Certificates of deposit of $250K or more | 174,053 | 9.31 | % | 156,224 | 9.73 | % | 146,296 | 9.23 | % | 132,153 | 8.77 | % | 122,353 | 8.73 | % | |||||||||||||||||||||||||
| Brokered certificates of deposit (2) | 94,531 | 5.05 | % | 94,614 | 5.89 | % | 94,689 | 5.97 | % | 98,729 | 6.55 | % | 98,729 | 7.05 | % | |||||||||||||||||||||||||
| Listing service deposits (2) | 7,376 | 0.39 | % | 9,361 | 0.58 | % | 12,688 | 0.80 | % | 14,433 | 0.96 | % | 15,180 | 1.08 | % | |||||||||||||||||||||||||
| All other certificates of deposit less than $250K | 476,927 | 25.50 | % | 364,701 | 22.71 | % | 374,593 | 23.62 | % | 355,511 | 23.58 | % | 305,449 | 21.80 | % | |||||||||||||||||||||||||
| Total certificates of deposit | 752,887 | 40.25 | % | 624,900 | 38.91 | % | 628,266 | 39.62 | % | 600,826 | 39.86 | % | 541,711 | 38.66 | % | |||||||||||||||||||||||||
| Total interest-bearing deposits | 1,687,586 | 90.22 | % | 1,427,972 | 88.91 | % | 1,394,243 | 87.93 | % | 1,322,469 | 87.72 | % | 1,186,806 | 84.70 | % | |||||||||||||||||||||||||
| Total deposits | $ | 1,870,323 | 100.00 | % | $ | 1,606,097 | 100.00 | % | $ | 1,585,784 | 100.00 | % | $ | 1,507,620 | 100.00 | % | $ | 1,401,132 | 100.00 | % | ||||||||||||||||||||
| (1) | As of December 31, 2023 and September 30, 2023 $58.2 million and $51.5 million, respectively, were reclassified from demand to NOW/IOLA accounts. | |
| (2) | As of December 31, 2023, and September 30, 2023, there were $0.3 million and $0.3 million, respectively, in individual listing service deposits amounting to $250,000 or more. As of September 30, 2024, there were no 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
| September 30, | December 31, | ||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Scheduled Maturity | Redeemable at Call Date | Weighted Average Rate | Scheduled Maturity | Redeemable at Call Date | Weighted Average Rate | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Term advances ending: | |||||||||||||||||||||||
| 2024 | $ | 59,321 | $ | 59,321 | 4.00 | % | $ | 363,321 | $ | 363,321 | 4.55 | % | |||||||||||
| 2025 | 50,000 | 50,000 | 4.41 | 50,000 | 50,000 | 4.41 | |||||||||||||||||
| 2026 | 200,000 | 200,000 | 4.25 | - | - | - | |||||||||||||||||
| 2027 | 212,000 | 212,000 | 3.44 | 212,000 | 212,000 | 3.44 | |||||||||||||||||
| 2028 | 9,100 | 9,100 | 3.84 | 9,100 | 9,100 | 3.84 | |||||||||||||||||
| Thereafter | 50,000 | 50,000 | 3.35 | 50,000 | 50,000 | 3.35 | |||||||||||||||||
| $ | 580,421 | $ | 580,421 | 3.86 | % | $ | 684,421 | $ | 684,421 | 4.10 | % | ||||||||||||
Ponce Financial Group, Inc. and Subsidiaries
Nonperforming Assets
| As of Three Months Ended | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Non-accrual loans: | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||
| Investor owned | $ | 436 | $ | 436 | $ | 399 | $ | 793 | $ | 396 | |||||||||
| Owner occupied | 1,423 | 1,423 | 1,426 | 1,682 | 1,685 | ||||||||||||||
| Multifamily residential | 4,685 | 5,754 | 4,098 | 2,979 | 1,444 | ||||||||||||||
| Nonresidential properties | 824 | 828 | 441 | - | - | ||||||||||||||
| Construction and land | 8,907 | 8,907 | 10,277 | 10,759 | 11,721 | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | 180 | 396 | 146 | 165 | 209 | ||||||||||||||
| Consumer | - | - | - | - | - | ||||||||||||||
| Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty) (1) | $ | 16,455 | $ | 17,744 | $ | 16,787 | $ | 16,378 | $ | 15,455 | |||||||||
| Non-accruing modifications to borrowers experiencing financial difficulty (1): | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||
| Investor owned | $ | 278 | $ | 277 | $ | 270 | $ | 270 | $ | 270 | |||||||||
| Owner occupied | 444 | 448 | 447 | 447 | 449 | ||||||||||||||
| Multifamily residential | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | - | - | - | - | - | ||||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | - | - | - | - | - | ||||||||||||||
| Consumer | - | - | - | - | - | ||||||||||||||
| Total non-accruing modifications to borrowers experiencing financial difficulty (1) | 722 | 725 | 717 | 717 | 719 | ||||||||||||||
| Total non-accrual loans (2) | $ | 17,177 | $ | 18,469 | $ | 17,504 | $ | 17,095 | $ | 16,174 | |||||||||
| Accruing modifications to borrowers experiencing financial difficulty (1): | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||
| Investor owned | $ | 1,821 | $ | 1,830 | $ | 1,850 | $ | 2,112 | $ | 2,131 | |||||||||
| Owner occupied | 2,116 | 2,171 | 2,288 | 2,313 | 2,335 | ||||||||||||||
| Multifamily residential | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | 672 | 707 | 748 | 757 | 765 | ||||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | 222 | - | - | - | - | ||||||||||||||
| Consumer | - | - | - | - | - | ||||||||||||||
| Total accruing modifications to borrowers experiencing financial difficulty (1) | $ | 4,831 | $ | 4,708 | $ | 4,886 | $ | 5,182 | $ | 5,231 | |||||||||
| Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty (1) | $ | 22,008 | $ | 23,177 | $ | 22,390 | $ | 22,277 | $ | 21,405 | |||||||||
| Total non-performing loans to total gross loans | 0.78 | % | 0.89 | % | 0.87 | % | 0.89 | % | 0.89 | % | |||||||||
| Total non-performing assets to total assets | 0.57 | % | 0.65 | % | 0.62 | % | 0.62 | % | 0.62 | % | |||||||||
| Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (1) | 0.73 | % | 0.82 | % | 0.79 | % | 0.81 | % | 0.82 | % | |||||||||
| (1) | 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. | |
| (2) | Includes nonperforming mortgage loans held for sale. | |
Ponce Financial Group, Inc. and Subsidiaries
Average Balance Sheets
| For the Three Months Ended September 30, | |||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||
| Average | Average | ||||||||||||||||||||
| Outstanding | Average | Outstanding | Average | ||||||||||||||||||
| Balance | Interest | Yield/Rate (1) | Balance | Interest | Yield/Rate (1) | ||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Loans (2) | $ | 2,096,592 | $ | 32,945 | 6.25 | % | $ | 1,777,585 | $ | 25,276 | 5.64 | % | |||||||||
| Securities (3) | 548,708 | 5,324 | 3.86 | % | 599,573 | 5,821 | 3.85 | % | |||||||||||||
| Other (4) | 210,057 | 3,024 | 5.73 | % | 169,570 | 2,409 | 5.64 | % | |||||||||||||
| Total interest-earning assets | 2,855,357 | 41,293 | 5.75 | % | 2,546,728 | 33,506 | 5.22 | % | |||||||||||||
| Non-interest-earning assets | 107,153 | 111,771 | |||||||||||||||||||
| Total assets | $ | 2,962,510 | $ | 2,658,499 | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| NOW/IOLA (5) (6) | $ | 74,690 | $ | 174 | 0.93 | % | $ | 69,935 | $ | 141 | 0.80 | % | |||||||||
| Money market (6) | 711,385 | 8,318 | 4.65 | % | 485,042 | 5,468 | 4.47 | % | |||||||||||||
| Savings | 109,571 | 25 | 0.09 | % | 118,095 | 29 | 0.10 | % | |||||||||||||
| Certificates of deposit | 655,562 | 6,926 | 4.20 | % | 527,302 | 4,362 | 3.28 | % | |||||||||||||
| Total deposits | 1,551,208 | 15,443 | 3.96 | % | 1,200,374 | 10,000 | 3.31 | % | |||||||||||||
| Advance payments by borrowers | 13,151 | 2 | 0.06 | % | 14,537 | 1 | 0.03 | % | |||||||||||||
| Borrowings | 660,312 | 6,825 | 4.11 | % | 678,676 | 6,963 | 4.07 | % | |||||||||||||
| Total interest-bearing liabilities | 2,224,671 | 22,270 | 3.98 | % | 1,893,587 | 16,964 | 3.55 | % | |||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||
| Non-interest-bearing demand (5) | 185,543 | - | 231,299 | - | |||||||||||||||||
| Other non-interest-bearing liabilities | 49,702 | - | 46,643 | - | |||||||||||||||||
| Total non-interest-bearing liabilities | 235,245 | - | 277,942 | - | |||||||||||||||||
| Total liabilities | 2,459,916 | 22,270 | 2,171,529 | 16,964 | |||||||||||||||||
| Total equity | 502,594 | 486,970 | |||||||||||||||||||
| Total liabilities and total equity | $ | 2,962,510 | 3.98 | % | $ | 2,658,499 | 3.55 | % | |||||||||||||
| Net interest income | $ | 19,023 | $ | 16,542 | |||||||||||||||||
| Net interest rate spread (7) | 1.77 | % | 1.67 | % | |||||||||||||||||
| Net interest-earning assets (8) | $ | 630,686 | $ | 653,141 | |||||||||||||||||
| Net interest margin (9) | 2.65 | % | 2.58 | % | |||||||||||||||||
| Average interest-earning assets to interest-bearing liabilities | 128.35 | % | 134.49 | % | |||||||||||||||||
| (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 FRBNY demand deposits. | |
| (5) | Includes reclassification of $47.1 million average outstanding balances from non-interest bearing demand to NOW/IOLA for the three months ended September 30, 2023. | |
| (6) | Includes $0.1 million of interest expense reclassified from money market to NOW/IOLA for the three months ended September 30, 2023. | |
| (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 Nine Months Ended September 30, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Average | Average | ||||||||||||||||||||||
| Outstanding | Average | Outstanding | Average | ||||||||||||||||||||
| Balance | Interest | Yield/Rate (1) | Balance | Interest | Yield/Rate | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||
| Loans (2) | $ | 2,038,879 | $ | 94,890 | 6.22 | % | $ | 1,678,369 | $ | 67,991 | 5.42 | % | |||||||||||
| Securities (3) | 562,451 | 16,429 | 3.90 | % | 614,987 | 17,627 | 3.83 | % | |||||||||||||||
| Other (4) | 196,668 | 8,432 | 5.73 | % | 127,961 | 5,299 | 5.54 | % | |||||||||||||||
| Total interest-earning assets | 2,797,998 | 119,751 | 5.72 | % | 2,421,317 | 90,917 | 5.02 | % | |||||||||||||||
| Non-interest-earning assets | 106,500 | 118,609 | |||||||||||||||||||||
| Total assets | $ | 2,904,498 | $ | 2,539,926 | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||
| NOW/IOLA (5) (6) | $ | 76,817 | $ | 543 | 0.94 | % | $ | 69,331 | $ | 1,133 | 2.18 | % | |||||||||||
| Money market (6) | 618,725 | 21,819 | 4.71 | % | 403,171 | 11,637 | 3.86 | % | |||||||||||||||
| Savings | 111,636 | 80 | 0.10 | % | 123,218 | 88 | 0.10 | % | |||||||||||||||
| Certificates of deposit | 640,369 | 19,664 | 4.10 | % | 522,740 | 11,468 | 2.93 | % | |||||||||||||||
| Total deposits | 1,447,547 | 42,106 | 3.89 | % | 1,118,460 | 24,326 | 2.91 | % | |||||||||||||||
| Advance payments by borrowers | 13,660 | 6 | 0.06 | % | 14,814 | 6 | 0.05 | % | |||||||||||||||
| Borrowings | 703,775 | 21,889 | 4.15 | % | 617,912 | 18,516 | 4.01 | % | |||||||||||||||
| Total interest-bearing liabilities | 2,164,982 | 64,001 | 3.95 | % | 1,751,186 | 42,848 | 3.27 | % | |||||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||||
| Non-interest-bearing demand (5) | 191,087 | - | 251,645 | - | |||||||||||||||||||
| Other non-interest-bearing liabilities | 51,061 | - | 43,864 | - | |||||||||||||||||||
| Total non-interest-bearing liabilities | 242,148 | - | 295,509 | - | |||||||||||||||||||
| Total liabilities | 2,407,130 | 64,001 | 2,046,695 | 42,848 | |||||||||||||||||||
| Total equity | 497,368 | 493,231 | |||||||||||||||||||||
| Total liabilities and total equity | $ | 2,904,498 | 3.95 | % | $ | 2,539,926 | 3.27 | % | |||||||||||||||
| Net interest income | $ | 55,750 | $ | 48,069 | |||||||||||||||||||
| Net interest rate spread (7) | 1.77 | % | 1.74 | % | |||||||||||||||||||
| Net interest-earning assets (8) | $ | 633,016 | $ | 670,131 | |||||||||||||||||||
| Net interest margin (9) | 2.66 | % | 2.65 | % | |||||||||||||||||||
| Average interest-earning assets to | |||||||||||||||||||||||
| interest-bearing liabilities | 129.24 | % | 138.27 | % | |||||||||||||||||||
| (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 FRBNY demand deposits. | |
| (5) | Includes reclassification of $46.5 million average outstanding balances from non-interest bearing demand to NOW/IOLA for the nine months ended September 30, 2023. | |
| (6) | Includes $1.1 million of interest expense reclassified from money market to NOW/IOLA for the nine months ended September 30, 2023. | |
| (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 | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| Other Data | |||||||||||||||||||
| Common shares issued | 24,886,711 | 24,886,711 | 24,886,711 | 24,886,711 | 24,886,711 | ||||||||||||||
| Less treasury shares | 1,067,248 | 1,074,979 | 1,096,214 | 1,101,191 | 1,233,111 | ||||||||||||||
| Common shares outstanding at end of period | 23,819,463 | 23,811,732 | 23,790,497 | 23,785,520 | 23,653,600 | ||||||||||||||
| Book value per common share | $ | 11.74 | $ | 11.45 | $ | 11.29 | $ | 11.20 | $ | 10.99 | |||||||||
| Tangible book value per common share | $ | 11.74 | $ | 11.45 | $ | 11.29 | $ | 11.20 | $ | 10.99 | |||||||||
Contact:
Sergio Vaccaro
sergio.vaccaro@poncebank.net
718-931-9000
