NEW YORK, April 26, 2023 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., (the "Company") (NASDAQ: PDLB), the holding company for Ponce Bank (the "Bank"), today announced results for the first quarter of 2023.
First Quarter 2023 Highlights (Compared to Prior Periods):
- Net income of $0.3 million or $0.01 per diluted share, for the three months ended March 31, 2023, as compared to net loss of ($9.2) million, or ($0.40) per diluted share for the three months ended December 31, 2022 and net loss of ($6.8) million, or ($0.31) per diluted share for the three months ended March 31, 2022.
- Included in the $0.3 million of net income for the first quarter of 2023 results is $15.2 million in net interest income and $1.8 million in non-interest income, offset by a $16.4 million in non-interest expense.
- Net interest income of $15.2 million for the first quarter of 2023 decreased $0.9 million, or 5.70%, from the prior quarter and $2.1 million, or 12.07%, from the same quarter last year, largely due to an increase in funding costs driven by the significant increase in interest rates during the quarter.
- Net interest margin was 2.75% for the first quarter of 2023, a decrease from 2.98% for the prior quarter and from 4.68% for the same quarter last year.
- Cash and equivalents were $184.7 million as of March 31, 2023, an increase of $130.3 million, or 239.75%, from December 31,2022 as we were able to take advantage of borrowing rates below what we collect on our interest bearing overnight deposit with banks.
- Securities totaled $620.0 million as of March 31, 2023, a decrease of $20.4 million, or 3.18%, from December 31, 2022 due to a call on one of the securities and changes in principal.
- Net loans receivable were $1.61 billion as of March 31, 2023, an increase of $121.3 million, or 8.12%, from December 31, 2022.
- Deposits were $1.34 billion as of March 31, 2023, an increase of $84.5 million, or 6.74%, from December 31, 2022.
President and Chief Executive Officer's Comments
Carlos P. Naudon, Ponce Financial Group's President and CEO, stated, "Although the U.S. economy continues to show strength, we saw plenty of volatility as well as a continuation of rate increases during the quarter. Despite that backdrop we were able to grow our loan and deposit base while keeping plenty of liquidity available - our liquid assets (cash and equivalents plus unpledged securities) stand at $573 million, almost double the level of our uninsured deposits of approximately $317 million. Our capital levels continue to be industry leading and multiples of regulatory requirements. We were also able to regain profitability and grow our book value per share. During the quarter we implemented Current Expected Credit Losses ("CECL") which slightly reduced our allowance for credit losses but increased our reserve for contingent exposures (which are booked as operating expenses). On the quarterly provision, we booked a net recovery as the $1.5 million charge due to loan increases and the $0.1 million related to the investment portfolio, offset by recoveries on the micro consumer loan portfolio of $1.8 million as the portfolio paid off significantly during the quarter. We also booked $0.9 million in recoveries related to the micro consumer loan receivable given our cash collections during the quarter.
"While we continue to prepare for different scenarios and it's reasonable to expect further volatility, we remain committed to invest in our people and in technology to make us more efficient. Our commitment is also to the communities we serve and to our MDI/CDFI status - as an example, we announced on April 17, 2023 that we were awarded a grant of $3.7 million from the U.S. Treasury as part of the CDFI Equitable Recovery Program."
Executive Chairman's Comment
Steven A. Tsavaris, Ponce Financial Group's Executive Chairman added, "Despite a challenging environment, we were able to organically add over $140 million to our real estate loan portfolio across most categories during the quarter while reducing our exposure related to consumer micro loans. We achieved this growth, without sacrificing quality - we will never choose loan growth over safe and sound underwriting practices. Our prudence has served us well over the years and it will continue to do so for years to come."
Selected performance metrics are as follows (refer to "Key Metrics" for additional information):
| At or for the Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| Performance Ratios (Annualized): | 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Return on average assets (1) | 0.06 | % | (1.62 | %) | (2.80 | %) | 0.17 | % | (1.55 | %) | ||||||||||
| Return on average equity (1) | 0.27 | % | (7.28 | %) | (11.25 | %) | 1.01 | % | (10.06 | %) | ||||||||||
| Net interest rate spread (1) (2) | 1.79 | % | 2.14 | % | 3.12 | % | 3.86 | % | 4.48 | % | ||||||||||
| Net interest margin (1) (3) | 2.75 | % | 2.98 | % | 3.62 | % | 4.10 | % | 4.68 | % | ||||||||||
| Non-interest expense to average assets (1) | 2.79 | % | 2.78 | % | 4.83 | % | 3.73 | % | 6.39 | % | ||||||||||
| Efficiency ratio (4) | 95.88 | % | 94.95 | % | 132.46 | % | 93.77 | % | 143.50 | % | ||||||||||
| Average interest-earning assets to average interest- bearing liabilities | 147.75 | % | 151.73 | % | 161.30 | % | 151.98 | % | 145.54 | % | ||||||||||
| Average equity to average assets | 20.91 | % | 22.32 | % | 24.90 | % | 17.32 | % | 15.76 | % | ||||||||||
| At or for the Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| Capital Ratios (Annualized): | 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Total capital to risk weighted assets (Bank only) | 27.54 | % | 30.53 | % | 33.39 | % | 36.00 | % | 23.27 | % | ||||||||||
| Tier 1 capital to risk weighted assets (Bank only) | 26.28 | % | 29.26 | % | 32.13 | % | 34.75 | % | 22.02 | % | ||||||||||
| Common equity Tier 1 capital to risk-weighted assets (Bank only) | 26.28 | % | 29.26 | % | 32.13 | % | 34.75 | % | 22.02 | % | ||||||||||
| Tier 1 capital to average assets (Bank only) | 19.51 | % | 20.47 | % | 22.91 | % | 28.79 | % | 14.88 | % | ||||||||||
| At or for the Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| Asset Quality Ratios (Annualized): | 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Allowance for loan losses as a percentage of total loans | 1.77 | % | 2.27 | % | 1.77 | % | 1.31 | % | 1.28 | % | ||||||||||
| Allowance for loan losses as a percentage of nonperforming loans | 149.73 | % | 252.33 | % | 118.43 | % | 94.05 | % | 106.84 | % | ||||||||||
| Net (charge-offs) recoveries to average outstanding loans (1) | (0.57 | %) | (0.85 | %) | (0.52 | %) | (0.05 | %) | (0.22 | %) | ||||||||||
| Non-performing loans as a percentage of total gross loans | 1.18 | % | 0.90 | % | 1.50 | % | 1.39 | % | 1.20 | % | ||||||||||
| Non-performing loans as a percentage of total assets | 0.76 | % | 0.59 | % | 0.97 | % | 0.90 | % | 0.97 | % | ||||||||||
| Total non-performing assets as a percentage of total assets | 0.76 | % | 0.59 | % | 0.97 | % | 0.90 | % | 0.97 | % | ||||||||||
| Total non-performing assets and accruing troubled debt restructured loans as a percentage of total assets | 0.93 | % | 0.78 | % | 1.16 | % | 1.14 | % | 1.30 | % | ||||||||||
- Annualized where appropriate.
- 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.
- Net interest margin represents net interest income divided by average total interest-earning assets.
- Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
Summary of Results of Operations
Net income for the three months ended March 31, 2023, was $0.3 million compared to a net loss of ($9.2) million for the three months ended December 31, 2022 and net loss of ($6.8) million for the three months ended March 31, 2022. The increase of net income for the three months ended March 31, 2023 compared to the three months ended December 31, 2022 was attributed mainly to Grain Technology, Inc. ("Grain")'s net provision recovery this quarter versus a large Grain-related provision charge the prior quarter. The increase of net income for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was largely due to charges related to Grain and a contribution to the Ponce De Leon Foundation in the first quarter of 2022.
Net Interest Income and Net Margin
Net interest income for the three months ended March 31, 2023, was $15.2 million compared to $16.2 million for the three months ended December 31, 2022 and $17.3 million for the three months end March 31, 2022. This decrease is largely explained by increases in interest expenses due to higher interest rates, offset by increases in interest and dividend income.
Net interest margin was 2.75% for the three months ended March 31, 2023 compared to 2.98% for the prior quarter, a decrease of 23bps and 4.68% for the same period last year, a decrease of 193bps. The decrease in net interest margin 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 March 31, 2023, was $1.8 million, an increase of $1.4 million, or 316.25%, compared to the three months ended December 31, 2022 and a decrease of $0.4 million, or 18.28%, compared to the three months ended March 31, 2022.
The $1.4 million increase in non-interest income for the three months ended March 31, 2023 compared to the three months ended December 31, 2022 was impacted by the reversal of loan origination income that had been taken upfront (as opposed to deferred) last quarter and increases in late and prepayment charges and other non-interest income this quarter.
The $0.4 million decrease in non-interest income for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was attributable to decreases of $0.6 million in loan origination fees, $0.3 million in income on sale of mortgage loans and $0.3 million in brokerage commission, partially offset by increases of $0.7 million in late and prepayment charges and $0.1 million in other non-interest income.
Non-interest Expense
Non-interest expense for the three months ended March 31, 2023, was $16.4 million, an increase of $0.6 million, or 3.78%, compared to the three months ended December 31, 2022 and a decrease of $11.7 million, or 41.72%, compared to the three months ended March 31, 2022.
The $0.6 million increase from the three months ended December 31, 2022 was mainly attributable to increases of $1.4 million in provision for contingencies (mostly due to CECL implementation) and $0.9 million in compensation and benefits expense, offset by decreases of $0.8 million in other expenses, $0.4 million in Grain recoveries and $0.4 million in occupancy and equipment.
The $11.7 million decrease from the three months ended March 31, 2022 was attributable to a $9.0 million decrease in Grain write-off and write-down, as well as a $5.0 million contribution to the Ponce De Leon Foundation last year, partially offset by a higher provision for contingencies of $1.0 million (due to higher volumes and CECL implementation).
Balance Sheet Summary
Total assets increased $227.5 million, or 9.84%, to $2.54 billion as of March 31, 2023 from $2.31 billion as of December 31, 2022. The increase in total assets is largely attributable to increases of $130.3 million in cash and cash equivalents, $121.3 million in net loans receivable (inclusive of a $16.5 million net decrease in PPP loans) and $1.8 million in other assets, offset by decreases of $19.2 million in held-to-maturity securities and $5.5 million in Federal Home Loan Bank of New York stock.
Total liabilities increased $224.2 million, or 12.32%, to $2.04 billion as of March 31, 2023 from $1.82 billion as of December 31, 2022. The increase in total liabilities was largely attributable to increases of $131.0 million in borrowings and $84.5 million in deposits.
Total stockholders' equity increased $3.3 million, or 0.68%, to $496.0 million as of March 31, 2023, from $492.7 million as of December 31, 2022. This increase in stockholders' equity was largely attributable to $1.2 million in other comprehensive income related to improved valuation of securities, $1.1 million as a result of implementation of CECL, $0.4 million in share-based compensation, $0.3 million in net income and $0.3 million in ESOP.
About Ponce Financial Group, Inc.
Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, 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 | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks: | |||||||||||||||||||
| Cash | $ | 83,670 | $ | 34,074 | $ | 37,235 | $ | 53,544 | $ | 32,168 | |||||||||
| Interest-bearing deposits in banks | 101,017 | 20,286 | 25,286 | 221,262 | 37,127 | ||||||||||||||
| Total cash and cash equivalents | 184,687 | 54,360 | 62,521 | 274,806 | 69,295 | ||||||||||||||
| Available-for-sale securities, at fair value | 128,320 | 129,505 | 131,977 | 140,044 | 154,799 | ||||||||||||||
| Held-to-maturity securities, at amortized cost (1) | 491,649 | 510,820 | 494,297 | 211,517 | 927 | ||||||||||||||
| Placement with banks | 1,245 | 1,494 | 2,490 | 2,490 | 2,490 | ||||||||||||||
| Mortgage loans held for sale, at fair value | 2,987 | 1,979 | 3,357 | 9,234 | 7,972 | ||||||||||||||
| Loans receivable, net | 1,614,428 | 1,493,127 | 1,392,553 | 1,324,320 | 1,300,446 | ||||||||||||||
| Accrued interest receivable | 15,435 | 15,049 | 14,063 | 13,255 | 12,799 | ||||||||||||||
| Premises and equipment, net | 17,215 | 17,446 | 17,759 | 18,945 | 19,279 | ||||||||||||||
| Right of use assets | 33,147 | 33,423 | 34,121 | 34,416 | 35,179 | ||||||||||||||
| Federal Home Loan Bank of New York stock (FHLBNY), at cost | 19,209 | 24,661 | 14,272 | 16,429 | 5,420 | ||||||||||||||
| Deferred tax assets | 15,413 | 16,137 | 13,822 | 9,658 | 7,440 | ||||||||||||||
| Other assets | 15,799 | 13,988 | 11,170 | 21,585 | 13,730 | ||||||||||||||
| Total assets | $ | 2,539,534 | $ | 2,311,989 | $ | 2,192,402 | $ | 2,076,699 | $ | 1,629,776 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||
| Deposits | $ | 1,336,877 | $ | 1,252,412 | $ | 1,351,189 | $ | 1,148,728 | $ | 1,181,165 | |||||||||
| Operating lease liabilities | 34,308 | 34,532 | 35,081 | 35,217 | 35,821 | ||||||||||||||
| Accrued interest payable | 1,767 | 1,390 | 854 | 158 | 223 | ||||||||||||||
| Advance payments by borrowers for taxes and insurance | 14,902 | 9,724 | 10,589 | 8,668 | 10,161 | ||||||||||||||
| Borrowings | 648,375 | 517,375 | 286,375 | 334,375 | 93,375 | ||||||||||||||
| Warehouse lines of credit | - | - | - | - | 753 | ||||||||||||||
| Other liabilities | 7,264 | 3,856 | 7,631 | 31,471 | 8,699 | ||||||||||||||
| Total liabilities | 2,043,493 | 1,819,289 | 1,691,719 | 1,558,617 | 1,330,197 | ||||||||||||||
| Commitments and contingencies | |||||||||||||||||||
| Stockholders' Equity: | |||||||||||||||||||
| Preferred stock, $0.01 par value; 100,000,000 shares authorized | 225,000 | 225,000 | 225,000 | 225,000 | - | ||||||||||||||
| Common stock, $0.01 par value; 200,000,000 shares authorized | 249 | 249 | 247 | 247 | 247 | ||||||||||||||
| Treasury stock, at cost | (2 | ) | (2 | ) | - | - | - | ||||||||||||
| Additional paid-in-capital | 206,883 | 206,508 | 206,092 | 205,669 | 205,243 | ||||||||||||||
| Retained earnings | 94,399 | 92,955 | 102,169 | 116,907 | 116,136 | ||||||||||||||
| Accumulated other comprehensive loss | (16,629 | ) | (17,860 | ) | (18,420 | ) | (15,032 | ) | (7,035 | ) | |||||||||
| Unearned compensation - ESOP | (13,859 | ) | (14,150 | ) | (14,405 | ) | (14,709 | ) | (15,012 | ) | |||||||||
| Total stockholders' equity | 496,041 | 492,700 | 500,683 | 518,082 | 299,579 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 2,539,534 | $ | 2,311,989 | $ | 2,192,402 | $ | 2,076,699 | $ | 1,629,776 | |||||||||
(1) Included for the quarterly period ended March 31, 2023 was $0.8 million 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 | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Interest and dividend income: | |||||||||||||||||||
| Interest on loans receivable | $ | 19,700 | $ | 18,550 | $ | 17,058 | $ | 16,057 | $ | 18,200 | |||||||||
| Interest on deposits due from banks | 197 | 199 | 346 | 132 | 36 | ||||||||||||||
| Interest and dividend on securities and FHLBNY stock | 6,459 | 6,184 | 4,230 | 978 | 782 | ||||||||||||||
| Total interest and dividend income | 26,356 | 24,933 | 21,634 | 17,167 | 19,018 | ||||||||||||||
| Interest expense: | |||||||||||||||||||
| Interest on certificates of deposit | 1,871 | 1,310 | 687 | 677 | 803 | ||||||||||||||
| Interest on other deposits | 4,166 | 4,125 | 1,543 | 521 | 284 | ||||||||||||||
| Interest on borrowings | 5,074 | 3,332 | 1,793 | 481 | 593 | ||||||||||||||
| Total interest expense | 11,111 | 8,767 | 4,023 | 1,679 | 1,680 | ||||||||||||||
| Net interest income | 15,245 | 16,166 | 17,611 | 15,488 | 17,338 | ||||||||||||||
| (Benefit) provision for credit losses | (174 | ) | 12,641 | 9,330 | 817 | 1,258 | |||||||||||||
| Net interest income after (benefit) provision for credit losses | 15,419 | 3,525 | 8,281 | 14,671 | 16,080 | ||||||||||||||
| Non-interest income: | |||||||||||||||||||
| Service charges and fees | 491 | 481 | 464 | 445 | 440 | ||||||||||||||
| Brokerage commissions | 15 | 180 | 288 | 214 | 338 | ||||||||||||||
| Late and prepayment charges | 729 | 263 | 109 | 193 | 58 | ||||||||||||||
| Income on sale of mortgage loans | 99 | 7 | 116 | 200 | 418 | ||||||||||||||
| Loan origination (1) | - | (557 | ) | 522 | 696 | 625 | |||||||||||||
| (Loss) gain on sale of premises and equipment | - | - | (436 | ) | - | - | |||||||||||||
| Other | 485 | 63 | 514 | 431 | 347 | ||||||||||||||
| Total non-interest income | 1,819 | 437 | 1,577 | 2,179 | 2,226 | ||||||||||||||
| Non-interest expense: | |||||||||||||||||||
| Compensation and benefits | 7,446 | 6,501 | 7,377 | 6,911 | 7,125 | ||||||||||||||
| Occupancy and equipment | 3,570 | 3,928 | 3,611 | 3,237 | 3,192 | ||||||||||||||
| Data processing expenses | 1,192 | 1,114 | 994 | 824 | 847 | ||||||||||||||
| Direct loan expenses | 412 | 454 | 654 | 505 | 874 | ||||||||||||||
| Provision for contingencies | 985 | (440 | ) | 519 | 30 | 17 | |||||||||||||
| Insurance and surety bond premiums | 265 | 270 | 297 | 156 | 147 | ||||||||||||||
| Office supplies, telephone and postage | 399 | 375 | 369 | 406 | 405 | ||||||||||||||
| Professional fees | 1,455 | 1,571 | 1,251 | 1,748 | 1,334 | ||||||||||||||
| Contribution to the Ponce De Leon Foundation | - | - | - | - | 4,995 | ||||||||||||||
| Grain (recoveries) and write-off | (914 | ) | (515 | ) | 8,881 | 1,500 | 8,074 | ||||||||||||
| Marketing and promotional expenses | 128 | 256 | 214 | 52 | 71 | ||||||||||||||
| Directors fees and regulatory assessment | 155 | 196 | 188 | 167 | 154 | ||||||||||||||
| Other operating expenses | 1,268 | 2,055 | 1,061 | 1,031 | 839 | ||||||||||||||
| Total non-interest expense | 16,361 | 15,765 | 25,416 | 16,567 | 28,074 | ||||||||||||||
| Income (loss) before income taxes | 877 | (11,803 | ) | (15,558 | ) | 283 | (9,768 | ) | |||||||||||
| Provision (benefit) for income taxes | 546 | (2,589 | ) | (820 | ) | (488 | ) | (2,948 | ) | ||||||||||
| Net income (loss) | $ | 331 | $ | (9,214 | ) | $ | (14,738 | ) | $ | 771 | $ | (6,820 | ) | ||||||
| Earnings (loss) per common share: | |||||||||||||||||||
| Basic | $ | 0.01 | $ | (0.40 | ) | $ | (0.64 | ) | $ | 0.03 | $ | (0.31 | ) | ||||||
| Diluted | $ | 0.01 | $ | (0.40 | ) | $ | (0.64 | ) | $ | 0.03 | $ | (0.31 | ) | ||||||
| Weighted average common shares outstanding: | |||||||||||||||||||
| Basic | 23,293,013 | 23,168,097 | 23,094,859 | 23,056,559 | 21,721,113 | ||||||||||||||
| Diluted | 23,324,532 | 23,168,097 | 23,094,859 | 23,128,911 | 21,721,113 | ||||||||||||||
(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 Three Months Ended March 31, | ||||||||||||||||
| 2023 | 2022 | Variance $ | Variance % | |||||||||||||
| Interest and dividend income: | ||||||||||||||||
| Interest on loans receivable | $ | 19,700 | $ | 18,200 | $ | 1,500 | 8.24 | % | ||||||||
| Interest on deposits due from banks | 197 | 36 | 161 | 447.22 | % | |||||||||||
| Interest and dividend on securities and FHLBNY stock | 6,459 | 782 | 5,677 | 725.96 | % | |||||||||||
| Total interest and dividend income | 26,356 | 19,018 | 7,338 | 38.58 | % | |||||||||||
| Interest expense: | ||||||||||||||||
| Interest on certificates of deposit | 1,871 | 803 | 1,068 | 133.00 | % | |||||||||||
| Interest on other deposits | 4,166 | 284 | 3,882 | 1,366.90 | % | |||||||||||
| Interest on borrowings | 5,074 | 593 | 4,481 | 755.65 | % | |||||||||||
| Total interest expense | 11,111 | 1,680 | 9,431 | 561.37 | % | |||||||||||
| Net interest income | 15,245 | 17,338 | (2,093 | ) | (12.07 | %) | ||||||||||
| (Benefit) provision for credit losses | (174 | ) | 1,258 | (1,432 | ) | (113.83 | %) | |||||||||
| Net interest income after (benefit) provision for credit losses | 15,419 | 16,080 | (661 | ) | (4.11 | %) | ||||||||||
| Non-interest income: | ||||||||||||||||
| Service charges and fees | 491 | 440 | 51 | 11.59 | % | |||||||||||
| Brokerage commissions | 15 | 338 | (323 | ) | (95.56 | %) | ||||||||||
| Late and prepayment charges | 729 | 58 | 671 | 1,156.90 | % | |||||||||||
| Income on sale of mortgage loans | 99 | 418 | (319 | ) | (76.32 | %) | ||||||||||
| Loan origination | - | 625 | (625 | ) | (100.00 | %) | ||||||||||
| Other | 485 | 347 | 138 | 39.77 | % | |||||||||||
| Total non-interest income | 1,819 | 2,226 | (407 | ) | (18.28 | %) | ||||||||||
| Non-interest expense: | ||||||||||||||||
| Compensation and benefits | 7,446 | 7,125 | 321 | 4.51 | % | |||||||||||
| Occupancy and equipment | 3,570 | 3,192 | 378 | 11.84 | % | |||||||||||
| Data processing expenses | 1,192 | 847 | 345 | 40.73 | % | |||||||||||
| Direct loan expenses | 412 | 874 | (462 | ) | (52.86 | %) | ||||||||||
| Provision for contingencies | 985 | 17 | 968 | 5,694.12 | % | |||||||||||
| Insurance and surety bond premiums | 265 | 147 | 118 | 80.27 | % | |||||||||||
| Office supplies, telephone and postage | 399 | 405 | (6 | ) | (1.48 | %) | ||||||||||
| Professional fees | 1,455 | 1,334 | 121 | 9.07 | % | |||||||||||
| Contribution to the Ponce De Leon Foundation | - | 4,995 | (4,995 | ) | (100.00 | %) | ||||||||||
| Grain (recoveries) and write-off | (914 | ) | 8,074 | (8,988 | ) | (111.32 | %) | |||||||||
| Marketing and promotional expenses | 128 | 71 | 57 | 80.28 | % | |||||||||||
| Directors fees and regulatory assessment | 155 | 154 | 1 | 0.65 | % | |||||||||||
| Other operating expenses | 1,268 | 839 | 429 | 51.13 | % | |||||||||||
| Total non-interest expense | 16,361 | 28,074 | (11,713 | ) | (41.72 | %) | ||||||||||
| Income (loss) before income taxes | 877 | (9,768 | ) | 10,645 | (108.98 | %) | ||||||||||
| Provision (benefit) for income taxes | 546 | (2,948 | ) | 3,494 | (118.52 | %) | ||||||||||
| Net income (loss) | $ | 331 | $ | (6,820 | ) | $ | 7,151 | (104.85 | %) | |||||||
| Earnings (loss) per common share: | ||||||||||||||||
| Basic | $ | 0.01 | $ | (0.31 | ) | $ | 0.33 | (104.53 | %) | |||||||
| Diluted | $ | 0.01 | $ | (0.31 | ) | $ | 0.33 | (104.52 | %) | |||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 23,293,013 | 21,721,113 | 1,571,900 | 7.24 | % | |||||||||||
| Diluted | 23,324,532 | 21,721,113 | 1,603,419 | 7.38 | % | |||||||||||
Ponce Financial Group, Inc. and Subsidiaries
Key Metrics
| At or for the Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Performance Ratios: | |||||||||||||||||||
| Return on average assets (1) | 0.06 | % | (1.62 | %) | (2.80 | %) | 0.17 | % | (1.55 | %) | |||||||||
| Return on average equity (1) | 0.27 | % | (7.28 | %) | (11.25 | %) | 1.01 | % | (10.06 | %) | |||||||||
| Net interest rate spread (1) (2) | 1.79 | % | 2.14 | % | 3.12 | % | 3.86 | % | 4.48 | % | |||||||||
| Net interest margin (1) (3) | 2.75 | % | 2.98 | % | 3.62 | % | 4.10 | % | 4.68 | % | |||||||||
| Non-interest expense to average assets (1) | 2.79 | % | 2.78 | % | 4.83 | % | 3.73 | % | 6.39 | % | |||||||||
| Efficiency ratio (4) | 95.88 | % | 94.95 | % | 132.46 | % | 93.77 | % | 143.50 | % | |||||||||
| Average interest-earning assets to average interest- bearing liabilities | 147.75 | % | 151.73 | % | 161.30 | % | 151.98 | % | 145.54 | % | |||||||||
| Average equity to average assets | 20.91 | % | 22.32 | % | 24.90 | % | 17.32 | % | 15.76 | % | |||||||||
| Capital Ratios: | |||||||||||||||||||
| Total capital to risk weighted assets (Bank only) | 27.54 | % | 30.53 | % | 33.39 | % | 36.00 | % | 23.27 | % | |||||||||
| Tier 1 capital to risk weighted assets (Bank only) | 26.28 | % | 29.26 | % | 32.13 | % | 34.75 | % | 22.02 | % | |||||||||
| Common equity Tier 1 capital to risk-weighted assets (Bank only) | 26.28 | % | 29.26 | % | 32.13 | % | 34.75 | % | 22.02 | % | |||||||||
| Tier 1 capital to average assets (Bank only) | 19.51 | % | 20.47 | % | 22.91 | % | 28.79 | % | 14.88 | % | |||||||||
| Asset Quality Ratios: | |||||||||||||||||||
| Allowance for credit losses on loans as a percentage of total loans | 1.77 | % | 2.27 | % | 1.77 | % | 1.31 | % | 1.28 | % | |||||||||
| Allowance for credit losses on loans as a percentage of nonperforming loans | 149.73 | % | 252.33 | % | 118.43 | % | 94.05 | % | 106.84 | % | |||||||||
| Net (charge-offs) recoveries to average outstanding loans (1) | (0.57 | %) | (0.85 | %) | (0.52 | %) | (0.05 | %) | (0.22 | %) | |||||||||
| Non-performing loans as a percentage of total gross loans | 1.18 | % | 0.90 | % | 1.50 | % | 1.39 | % | 1.20 | % | |||||||||
| Non-performing loans as a percentage of total assets | 0.76 | % | 0.59 | % | 0.97 | % | 0.90 | % | 0.97 | % | |||||||||
| Total non-performing assets as a percentage of total assets | 0.76 | % | 0.59 | % | 0.97 | % | 0.90 | % | 0.97 | % | |||||||||
| Total non-performing assets and accruing troubled debt restructured loans as a percentage of total assets | 0.93 | % | 0.78 | % | 1.16 | % | 1.14 | % | 1.30 | % | |||||||||
| Other: | |||||||||||||||||||
| Number of offices | 19 | 19 | 19 | 19 | 19 | ||||||||||||||
| Number of full-time equivalent employees | 251 | 253 | 257 | 253 | 223 | ||||||||||||||
- Annualized where appropriate.
- 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.
- Net interest margin represents net interest income divided by average total interest-earning assets.
- Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
Ponce Financial Group, Inc. and Subsidiaries
Securities Portfolio
| March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||
| 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 | $ | 2,987 | $ | - | $ | (241 | ) | $ | 2,746 | $ | 2,985 | $ | - | $ | (296 | ) | $ | 2,689 | ||||||||||||||
| Corporate Bonds | 25,816 | - | (2,639 | ) | 23,177 | 25,824 | - | (2,465 | ) | 23,359 | ||||||||||||||||||||||
| Mortgage-Backed Securities: | ||||||||||||||||||||||||||||||||
| Collateralized Mortgage Obligations (1) | 43,421 | - | (6,030 | ) | 37,391 | 44,503 | - | (6,726 | ) | 37,777 | ||||||||||||||||||||||
| FHLMC Certificates | 11,036 | - | (1,490 | ) | 9,546 | 11,310 | - | (1,676 | ) | 9,634 | ||||||||||||||||||||||
| FNMA Certificates | 65,819 | - | (10,474 | ) | 55,345 | 67,199 | - | (11,271 | ) | 55,928 | ||||||||||||||||||||||
| GNMA Certificates | 117 | - | (2 | ) | 115 | 122 | - | (4 | ) | 118 | ||||||||||||||||||||||
| Total available-for-sale securities | $ | 149,196 | $ | - | $ | (20,876 | ) | $ | 128,320 | $ | 151,943 | $ | - | $ | (22,438 | ) | $ | 129,505 | ||||||||||||||
| Held-to-Maturity Securities: | ||||||||||||||||||||||||||||||||
| U.S. Agency Bonds | $ | 25,000 | $ | - | $ | (206 | ) | $ | 24,794 | $ | 35,000 | $ | - | $ | (380 | ) | $ | 34,620 | ||||||||||||||
| Corporate Bonds | 82,500 | - | (4,158 | ) | 78,342 | 82,500 | 57 | (3,819 | ) | 78,738 | ||||||||||||||||||||||
| Mortgage-Backed Securities: | ||||||||||||||||||||||||||||||||
| Collateralized Mortgage Obligations (1) | 230,531 | 853 | (2,457 | ) | 228,927 | 235,479 | 192 | (5,558 | ) | 230,113 | ||||||||||||||||||||||
| FHLMC Certificates | 4,008 | - | (245 | ) | 3,763 | 4,120 | - | (268 | ) | 3,852 | ||||||||||||||||||||||
| FNMA Certificates | 128,968 | - | (3,695 | ) | 125,273 | 131,918 | - | (5,227 | ) | 126,691 | ||||||||||||||||||||||
| SBA Certificates | 21,451 | 71 | - | 21,522 | 21,803 | 34 | - | 21,837 | ||||||||||||||||||||||||
| Total held-to-maturity securities (2) | $ | 492,458 | $ | 924 | $ | (10,761 | ) | $ | 482,621 | $ | 510,820 | $ | 283 | $ | (15,252 | ) | $ | 495,851 | ||||||||||||||
- Comprised of Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA") and Ginnie Mae ("GNMA") issued securities.
- Excludes $0.8 million related to allowance for credit losses on securities.
The following table presents the activity in the allowance for credit losses for held-to-maturity securities.
| For the Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Beginning balance | $ | - | $ | - | ||||
| CECL adoption | 662 | - | ||||||
| Provision for credit losses | 147 | - | ||||||
| Allowance for credit losses on securities | $ | 809 | $ | - | ||||
Ponce Financial Group, Inc. and Subsidiaries
Loan Portfolio
| As of | ||||||||||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
| Mortgage loans: | ||||||||||||||||||||||||||||||||||||||||
| 1-4 family residential | ||||||||||||||||||||||||||||||||||||||||
| Investor Owned | $ | 354,559 | 21.60 | % | $ | 343,968 | 22.54 | % | $ | 336,667 | 23.79 | % | $ | 321,671 | 24.02 | % | $ | 323,442 | 24.59 | % | ||||||||||||||||||||
| Owner-Occupied | 149,481 | 9.10 | % | 134,878 | 8.84 | % | 112,749 | 7.97 | % | 100,048 | 7.47 | % | 95,234 | 7.24 | % | |||||||||||||||||||||||||
| Multifamily residential | 553,430 | 33.71 | % | 494,667 | 32.42 | % | 421,917 | 29.81 | % | 396,470 | 29.60 | % | 368,133 | 27.98 | % | |||||||||||||||||||||||||
| Nonresidential properties | 314,560 | 19.17 | % | 308,043 | 20.19 | % | 282,642 | 19.97 | % | 279,877 | 20.90 | % | 251,893 | 19.14 | % | |||||||||||||||||||||||||
| Construction and land | 235,157 | 14.33 | % | 185,018 | 12.13 | % | 197,437 | 13.95 | % | 165,425 | 12.35 | % | 144,881 | 11.01 | % | |||||||||||||||||||||||||
| Total mortgage loans | 1,607,187 | 97.91 | % | 1,466,574 | 96.12 | % | 1,351,412 | 95.49 | % | 1,263,491 | 94.34 | % | 1,183,583 | 89.96 | % | |||||||||||||||||||||||||
| Non-mortgage loans: | ||||||||||||||||||||||||||||||||||||||||
| Business loans (1) | 19,890 | 1.21 | % | 39,965 | 2.62 | % | 41,398 | 2.92 | % | 45,720 | 3.41 | % | 100,253 | 7.62 | % | |||||||||||||||||||||||||
| Consumer loans (2) | 14,227 | 0.88 | % | 19,129 | 1.26 | % | 22,563 | 1.59 | % | 30,198 | 2.25 | % | 31,899 | 2.42 | % | |||||||||||||||||||||||||
| Total non-mortgage loans | 34,117 | 2.09 | % | 59,094 | 3.88 | % | 63,961 | 4.51 | % | 75,918 | 5.66 | % | 132,152 | 10.04 | % | |||||||||||||||||||||||||
| Total loans, gross | 1,641,304 | 100.00 | % | 1,525,668 | 100.00 | % | 1,415,373 | 100.00 | % | 1,339,409 | 100.00 | % | 1,315,735 | 100.00 | % | |||||||||||||||||||||||||
| Net deferred loan origination costs | 2,099 | 2,051 | 2,288 | 2,446 | 1,604 | |||||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans | (28,975 | ) | (34,592 | ) | (25,108 | ) | (17,535 | ) | (16,893 | ) | ||||||||||||||||||||||||||||||
| Loans, net | $ | 1,614,428 | $ | 1,493,127 | $ | 1,392,553 | $ | 1,324,320 | $ | 1,300,446 | ||||||||||||||||||||||||||||||
- As of March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, business loans include $3.6 million, $20.0 million, $24.7 million, $30.8 million and $86.0 million, respectively, of PPP loans.
- As of March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, consumer loans include $13.4 million, $18.2 million, $21.5 million, $28.3 million and $31.0 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 March 31, 2023 | ||||
| (in thousands) | ||||
| Receivable from Grain | ||||
| Microloans originated - put back to Grain (inception-to-March 31, 2023) | $ | 25,057 | ||
| Write-downs, net of recoveries (inception-to-date as of March 31, 2023) | (16,541 | ) | ||
| Cash receipts from Grain (inception-to-March 31, 2023) | (6,690 | ) | ||
| Grant/reserve | (1,826 | ) | ||
| Net receivable as of March 31, 2023 | $ | - | ||
| Microloan receivables from Grain Borrowers | ||||
| Grain originated loans receivable as of March 31, 2023 | $ | 13,365 | ||
| Allowance for credit losses on loans as of March 31, 2023 (1) | (11,597 | ) | ||
| Microloans, net of allowance for credit losses on loans as of March 31, 2023 | $ | 1,768 | ||
| Investments | ||||
| Investment in Grain | $ | 1,000 | ||
| Investment in Grain write-off in Q3 2022 | (1,000 | ) | ||
| Investment in Grain as of March 31, 2023 | - | |||
| Total exposure to Grain as of March 31, 2023 | $ | 1,768 | ||
(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 $1.2 million of security deposits by Grain originated borrowers reported in deposits in the accompanying Consolidated Statements of Financial Conditions.
Ponce Financial Group, Inc. and Subsidiaries
Allowance for Credit Losses on Loans
| For the Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Allowance for credit losses on loans at beginning of the period | $ | 34,592 | $ | 25,108 | $ | 17,535 | $ | 16,893 | $ | 16,352 | |||||||||
| (Benefit) provision for credit losses on loans | (321 | ) | 12,641 | 9,330 | 817 | 1,258 | |||||||||||||
| 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 | - | - | - | - | - | ||||||||||||||
| Consumer | (2,569 | ) | (3,659 | ) | (1,799 | ) | (450 | ) | (751 | ) | |||||||||
| Total charge-offs | (2,569 | ) | (3,659 | ) | (1,799 | ) | (450 | ) | (751 | ) | |||||||||
| Recoveries: | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residences | |||||||||||||||||||
| Investor owned | - | - | - | 156 | - | ||||||||||||||
| Owner occupied | - | - | 39 | - | - | ||||||||||||||
| Multifamily residences | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | - | - | - | - | - | ||||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | - | - | 1 | 91 | 2 | ||||||||||||||
| Consumer | 363 | 502 | 2 | 28 | 32 | ||||||||||||||
| Total recoveries | 363 | 502 | 42 | 275 | 34 | ||||||||||||||
| Net (charge-offs) recoveries | (2,206 | ) | (3,157 | ) | (1,757 | ) | (175 | ) | (717 | ) | |||||||||
| Allowance for credit losses on loans at end of the period | $ | 28,975 | $ | 34,592 | $ | 25,108 | $ | 17,535 | $ | 16,893 | |||||||||
Ponce Financial Group, Inc. and Subsidiaries
Deposits
| As of | ||||||||||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
| Demand | $ | 282,741 | 21.15 | % | $ | 289,149 | 23.08 | % | $ | 288,654 | 21.37 | % | $ | 284,462 | 24.77 | % | $ | 281,132 | 23.81 | % | ||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||
| NOW/IOLA accounts | 21,735 | 1.63 | % | 24,349 | 1.94 | % | 28,799 | 2.13 | % | 28,597 | 2.49 | % | 33,010 | 2.79 | % | |||||||||||||||||||||||||
| Money market accounts | 408,404 | 30.55 | % | 317,815 | 25.38 | % | 360,293 | 26.66 | % | 181,156 | 15.77 | % | 169,847 | 14.38 | % | |||||||||||||||||||||||||
| Reciprocal deposits | 109,649 | 8.20 | % | 114,049 | 9.11 | % | 162,858 | 12.05 | % | 151,264 | 13.17 | % | 160,510 | 13.59 | % | |||||||||||||||||||||||||
| Savings accounts | 127,731 | 9.55 | % | 130,432 | 10.41 | % | 140,055 | 10.37 | % | 139,244 | 12.12 | % | 133,966 | 11.34 | % | |||||||||||||||||||||||||
| Total NOW, money market, reciprocal and savings accounts | 667,519 | 49.93 | % | 586,645 | 46.84 | % | 692,005 | 51.21 | % | 500,261 | 43.55 | % | 497,333 | 42.10 | % | |||||||||||||||||||||||||
| Certificates of deposit of $250K or more | 76,893 | 5.75 | % | 70,113 | 5.60 | % | 61,900 | 4.58 | % | 65,157 | 5.67 | % | 75,130 | 6.36 | % | |||||||||||||||||||||||||
| Brokered certificates of deposit (1) | 98,754 | 7.39 | % | 98,754 | 7.89 | % | 98,760 | 7.31 | % | 62,650 | 5.45 | % | 79,282 | 6.71 | % | |||||||||||||||||||||||||
| Listing service deposits (1) | 28,417 | 2.13 | % | 35,813 | 2.86 | % | 40,964 | 3.03 | % | 48,953 | 4.26 | % | 53,876 | 4.56 | % | |||||||||||||||||||||||||
| All other certificates of deposit less than $250K | 182,553 | 13.65 | % | 171,938 | 13.73 | % | 168,906 | 12.50 | % | 187,245 | 16.30 | % | 194,412 | 16.46 | % | |||||||||||||||||||||||||
| Total certificates of deposit | 386,617 | 28.92 | % | 376,618 | 30.08 | % | 370,530 | 27.42 | % | 364,005 | 31.68 | % | 402,700 | 34.09 | % | |||||||||||||||||||||||||
| Total interest-bearing deposits | 1,054,136 | 78.85 | % | 963,263 | 76.92 | % | 1,062,535 | 78.63 | % | 864,266 | 75.23 | % | 900,033 | 76.19 | % | |||||||||||||||||||||||||
| Total deposits | $ | 1,336,877 | 100.00 | % | $ | 1,252,412 | 100.00 | % | $ | 1,351,189 | 100.00 | % | $ | 1,148,728 | 100.00 | % | $ | 1,181,165 | 100.00 | % | ||||||||||||||||||||
(1) As of March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, there were $9.5 million, $13.6 million, $13.8 million, $18.5 million, and $19.0 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
| March 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 | 4.6 | % | |||||||||||
| Term advances ending: | |||||||||||||||||||||||
| 2023 | $ | 24,775 | $ | 24,775 | 2.81 | $ | 178,375 | $ | 178,375 | 4.32 | |||||||||||||
| 2024 | 302,500 | 302,500 | 4.51 | 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 | % | ||||||||||||||||
| Thereafter | 59,100 | 59,100 | 3.43 | 50,000 | 50,000 | 3.35 | % | ||||||||||||||||
| $ | 648,375 | $ | 648,375 | 3.99 | % | $ | 517,375 | $ | 517,375 | 3.90 | % | ||||||||||||
Ponce Financial Group, Inc. and Subsidiaries
Nonperforming Assets
| As of Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Non-accrual loans: | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||
| Investor owned | $ | 2,836 | $ | 2,844 | $ | 5,902 | $ | 3,460 | $ | 3,596 | |||||||||
| Owner occupied | 2,245 | 961 | 971 | 1,140 | 962 | ||||||||||||||
| Multifamily residential | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | - | - | 778 | 1,162 | 1,166 | ||||||||||||||
| Construction and land | 11,906 | 7,567 | 10,660 | 10,817 | 7,567 | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | 40 | - | 359 | - | - | ||||||||||||||
| Consumer | - | - | - | - | - | ||||||||||||||
| Total non-accrual loans (not including non-accruing troubled debt restructured loans) | $ | 17,027 | $ | 11,372 | $ | 18,670 | $ | 16,579 | $ | 13,291 | |||||||||
| Non-accruing troubled debt restructured loans: | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||
| Investor owned | $ | 213 | $ | 217 | $ | 221 | $ | 224 | $ | 230 | |||||||||
| Owner occupied | 2,020 | 2,027 | 2,215 | 1,746 | 2,192 | ||||||||||||||
| Multifamily residential | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | 91 | 93 | 95 | 96 | 98 | ||||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | - | - | - | - | - | ||||||||||||||
| Consumer | - | - | - | - | - | ||||||||||||||
| Total non-accruing troubled debt restructured loans | 2,324 | 2,337 | 2,531 | 2,066 | 2,520 | ||||||||||||||
| Total non-accrual loans | $ | 19,351 | $ | 13,709 | $ | 21,201 | $ | 18,645 | $ | 15,811 | |||||||||
| Accruing troubled debt restructured loans: | |||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||
| Investor owned | $ | 2,185 | $ | 2,207 | $ | 2,228 | $ | 2,246 | $ | 2,269 | |||||||||
| Owner occupied | 1,310 | 1,328 | 1,254 | 2,019 | 2,313 | ||||||||||||||
| Multifamily residential | - | - | - | - | - | ||||||||||||||
| Nonresidential properties | 701 | 708 | 715 | 725 | 726 | ||||||||||||||
| Construction and land | - | - | - | - | - | ||||||||||||||
| Non-mortgage loans: | |||||||||||||||||||
| Business | - | - | - | - | - | ||||||||||||||
| Consumer | - | - | - | - | - | ||||||||||||||
| Total accruing troubled debt restructured loans | $ | 4,196 | $ | 4,243 | $ | 4,197 | $ | 4,990 | $ | 5,308 | |||||||||
| Total non-performing assets and accruing troubled debt restructured loans | $ | 23,547 | $ | 17,952 | $ | 25,398 | $ | 23,635 | $ | 21,119 | |||||||||
| Total non-performing loans to total gross loans | 1.18 | % | 0.90 | % | 1.50 | % | 1.39 | % | 1.20 | % | |||||||||
| Total non-performing assets to total assets | 0.76 | % | 0.59 | % | 0.97 | % | 0.90 | % | 0.97 | % | |||||||||
| Total non-performing assets and accruing troubled debt restructured loans to total assets | 0.93 | % | 0.78 | % | 1.16 | % | 1.14 | % | 1.30 | % | |||||||||
Ponce Financial Group, Inc. and Subsidiaries
Average Balance Sheets
| For the Three Months Ended March 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) | $ | 1,572,148 | $ | 19,700 | 5.08 | % | $ | 1,325,433 | $ | 18,200 | 5.57 | % | |||||||||
| Securities (3) | 631,138 | 6,075 | 3.90 | % | 138,095 | 717 | 2.11 | % | |||||||||||||
| Other (4) | 41,643 | 581 | 5.66 | % | 38,253 | 101 | 1.07 | % | |||||||||||||
| Total interest-earning assets | 2,244,929 | 26,356 | 4.76 | % | 1,501,781 | 19,018 | 5.14 | % | |||||||||||||
| Non-interest-earning assets | 129,837 | 225,006 | |||||||||||||||||||
| Total assets | $ | 2,374,766 | $ | 1,726,787 | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| NOW/IOLA | $ | 23,334 | $ | 9 | 0.16 | % | $ | 33,083 | $ | 16 | 0.20 | % | |||||||||
| Money market | 449,206 | 4,124 | 3.72 | % | 319,806 | 235 | 0.30 | % | |||||||||||||
| Savings | 128,876 | 30 | 0.09 | % | 135,404 | 32 | 0.10 | % | |||||||||||||
| Certificates of deposit | 381,362 | 1,871 | 1.99 | % | 419,104 | 803 | 0.78 | % | |||||||||||||
| Total deposits | 982,778 | 6,034 | 2.49 | % | 907,397 | 1,086 | 0.49 | % | |||||||||||||
| Advance payments by borrowers | 12,919 | 3 | 0.09 | % | 9,808 | 1 | 0.04 | % | |||||||||||||
| Borrowings | 523,705 | 5,074 | 3.93 | % | 114,688 | 593 | 2.10 | % | |||||||||||||
| Total interest-bearing liabilities | 1,519,402 | 11,111 | 2.97 | % | 1,031,893 | 1,680 | 0.66 | % | |||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||
| Non-interest-bearing demand | 316,803 | - | 372,433 | - | |||||||||||||||||
| Other non-interest-bearing liabilities | 42,038 | - | 47,562 | - | |||||||||||||||||
| Total non-interest-bearing liabilities | 358,841 | - | 419,995 | - | |||||||||||||||||
| Total liabilities | 1,878,243 | 11,111 | 1,451,888 | 1,680 | |||||||||||||||||
| Total equity | 496,523 | 274,899 | |||||||||||||||||||
| Total liabilities and total equity | $ | 2,374,766 | 2.97 | % | $ | 1,726,787 | 0.66 | % | |||||||||||||
| Net interest income | $ | 15,245 | $ | 17,338 | |||||||||||||||||
| Net interest rate spread (5) | 1.79 | % | 4.48 | % | |||||||||||||||||
| Net interest-earning assets (6) | $ | 725,527 | $ | 469,888 | |||||||||||||||||
| Net interest margin (7) | 2.75 | % | 4.68 | % | |||||||||||||||||
| Average interest-earning assets to interest-bearing liabilities | 147.75 | % | 145.54 | % | |||||||||||||||||
- Annualized where appropriate.
- Loans include loans and mortgage loans held for sale, at fair value.
- Securities include available-for-sale securities and held-to-maturity securities.
- Includes FHLBNY demand account and FHLBNY stock dividends.
- 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.
- Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
- Net interest margin represents net interest income divided by average total interest-earning assets.
Ponce Financial Group, Inc. and Subsidiaries
Other Data
| As of | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Other Data | |||||||||||||||||||
| Common shares issued | 24,865,476 | 24,861,329 | 24,728,460 | 24,724,274 | 24,724,274 | ||||||||||||||
| Less treasury shares | 1,976 | 1,976 | - | - | - | ||||||||||||||
| Common shares outstanding at end of period | 24,863,500 | 24,859,353 | 24,728,460 | 24,724,274 | 24,724,274 | ||||||||||||||
| Book value per common share | $ | 10.90 | $ | 10.77 | $ | 11.15 | $ | 11.85 | $ | 12.12 | |||||||||
| Tangible book value per common share | $ | 10.90 | $ | 10.77 | $ | 11.15 | $ | 11.85 | $ | 12.12 | |||||||||
