EX-99.1 2 tm2131447d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

NORTHEAST COMMUNITY BANCORP, INC. REPORTS RESULTS

FOR THE QUARTER ENDED SEPTEMBER 30, 2021

 

White Plains, New York, October 29, 2021 – NorthEast Community Bancorp, Inc. (Nasdaq: NECB) (the “Company”), the parent holding company of NorthEast Community Bank (the “Bank”), reported net income of $730,000 and $7.7 million, or $0.05 and $0.48 per basic and diluted common share, for the three months and nine months ended September 30, 2021, respectively, compared to net income of $3.1 million and $8.9 million, or $0.26 and $0.74 per basic and diluted common share, for the three months and nine months ended September 30, 2020, respectively.

 

Kenneth A. Martinek, NorthEast Community Bancorp’s Chairman of the Board and Chief Executive Officer, stated “Although we generated net income of $730,000 for the quarter, we are pleased to report that the performance of our loan portfolio remains strong with no loans past due and in foreclosure at September 30, 2021. Throughout the COVID-19 pandemic, loan demand remained strong with originations and outstanding commitments increasing quarter over quarter. Our commitments, loans-in-process, and standby letters of credit outstanding totaled $779.1 million as of September 30, 2021. At this time, we have two loans on deferral as a result of the COVID-19 pandemic, both with conservative loan to value ratios. As has been in the past, construction lending for affordable housing units in homogeneous high demand high absorption areas continues to be our focus.”

 

Highlights for the three and nine months ended and at September 30, 2021 are as follows:

 

·During the nine months ended September 30, 2021, the Company recorded net income of $7.7 million, or $0.48 per basic and diluted share.

 

·Net interest income increased by $1.1 million, or 11.3%, for the three months ended September 30, 2021 compared to the same period in the prior year.

 

·Asset quality metrics continued to remain strong with non-performing assets to total assets of 0.18% as of September 30, 2021 compared to 0.58% as of December 31, 2020. Our allowance for loan losses totaled $5.2 million, or 0.58% of total loans as of September 30, 2021 compared to $5.1 million, or 0.62% of total loans as of September 30, 2020.

 

·In accordance with the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) since March 2020, we have granted pandemic-related loan payment deferrals to 196 loans totaling $190.9 million at the time payment deferral was requested. As of September 30, 2021, we had two loans totaling $8.9 million still in deferral status.

 

Balance Sheet

 

Total assets increased by $139.8 million, or 14.4%, to $1.1 billion at September 30, 2021, from $968.2 million at December 31, 2020. The increase in assets was primarily due to increases in net loans of $84.8 million, cash and cash equivalents of $38.8 million, investment securities held-to-maturity of $6.0 million, premises and equipment of $4.9 million, and investment in equity securities of $4.8 million.

 

Cash and cash equivalents increased by $38.8 million, or 56.1%, to $108.0 million at September 30, 2021 from $69.2 million at December 31, 2020. The increase in cash can primarily be attributed to an increase in deposits of $45.1 million and an increase in stockholders’ equity primarily due to the completion of the second-step conversion offering that increased stockholders’ equity by $88.4 million, net of conversion costs, partially offset by an increase in loans of $84.8 million, an increase in investment securities held-to-maturity of $6.0 million, an increase in equity securities of $4.8 million, an increase in property and equipment of $4.9 million due primarily to the purchase of property for a new branch office, and cash dividends of $1.3 million.

 

Equity securities increased by $4.8 million, or 46.3%, to $15.1 million at September 30, 2021 from $10.3 million at December 31, 2020. The increase in equity securities was primarily attributed to the purchase of equity securities totaling $5.0 million, partially offset by market depreciation of $215,000.

 

 

 

 

Securities held-to-maturity increased by $6.0 million, or 81.8%, to $13.4 million at September 30, 2021 from $7.4 million at December 31, 2020. The increase was primarily due to the purchase of investment securities totaling $10.3 million, partially offset by maturities and pay-downs of $4.3 million.

 

Loans, net of the allowance for loan losses, increased by $84.8 million, or 10.3%, to $904.6 million at September 30, 2021 from $819.7 million at December 31, 2020. The increase in loans, net of the allowance for loan losses, was primarily due to a net increase in construction loans of $87.5 million, commercial and industrial loans of $13.2 million, and multi-family loans of $612,000. The increases were partially offset by decreases in non-residential loans of $8.6 million, mixed-use loans of $6.1 million, and one- to four-family loans of $1.4 million, coupled with normal pay-downs and principal reductions.

 

Premises and equipment increased by $4.9 million, or 26.1%, to $23.5 million at September 30, 2021 from $18.7 million at December 31, 2020 due to the acquisition of property for a new branch site located in Monsey, New York.

 

Foreclosed real estate was $2.0 million at both September 30, 2021 and December 31, 2020.

 

Right of use assets — operating, recognized in accordance with Accounting Standards Codification 842 “Leases”, decreased by $397,000, or 12.8%, to $2.7 million at September 30, 2021 from $3.1 million at December 31, 2020, primarily due to amortization.

 

Other assets increased by $286,000, or 5.7%, to $5.3 million at September 30, 2021 from $5.1 million at December 31, 2020 due to an increase in tax assets of $347,000 and an increase in prepaid expense of $233,000, partially offset by a decrease in suspense accounts of $351,000.

 

Total deposits increased by $45.1 million, or 5.8%, to $816.8 million at September 30, 2021, from $771.7 million at December 31, 2020. The increase was primarily due to an increase in non-interest bearing demand deposits of $85.3 million, or 38.5%, and an increase in NOW/money market accounts of $17.1 million, or 17.0%, from December 31, 2020 to September 30, 2021. These increases were partially offset by a decrease in certificates of deposit of $53.2 million, or 15.3%, and a decrease in savings account balances of $4.1 million, or 4.0%, from December 31, 2020 to September 30, 2021.

 

Federal Home Loan Bank advances were $28.0 million at both September 30, 2021 and December 31, 2020.

 

Accounts payable and accrued expenses increased by $232,000, or 2.6%, to $9.1 million at September 30, 2021 from $8.8 million at December 31, 2020 due primarily to an increase in deferred compensation of $439,000, partially offset by a decrease in accrued expenses of $177,000.

 

Stockholders’ equity increased by $94.9 million, or 61.7% to $248.7 million at September 30, 2021, from $153.8 million at December 31, 2020. The increase in stockholders’ equity was primarily a result of the completion of the second-step conversion offering that increased stockholders’ equity by $88.4 million, net of conversion costs. The second-step conversion also reduced stockholders’ equity by the addition of new unearned employee stock ownership plan shares totaling $7.8 million and increased stockholders’ equity by the retirement of treasury shares totaling $7.0 million.

 

The increase in stockholders’ equity was also due to net income of $7.7 million for the nine months ended September 30, 2021 and a reduction of $693,000 in unearned employee stock ownership plan shares, partially offset by dividends paid of $1.3 million and $8,000 in other comprehensive loss.

 

Net Interest Income

 

Net interest income totaled $10.9 million for the three months ended September 30, 2021, as compared to $9.8 million for the three months ended September 30, 2020. The increase in net interest income of $1.1 million, or 11.3%, was primarily due to an increase in interest income combined with a decrease in interest expense.

 

The increase in interest income is attributed to increases in loans, investment securities, equity securities, and interest-bearing deposits as we continued to deploy the proceeds raised in the second-step conversion. The decrease in interest expense is consistent with the decrease in interest rates in response to the COVID-19 pandemic and its impact on the economy and interest rate environment.

 

 

 

 

In this regard, interest and dividend income increased by $93,000, or 0.8%, to $12.1 million for the three months ended September 30, 2021 from $12.0 million for the three months ended September 30, 2020 due to an increase in the average balance of interest earning assets of $136.1 million, or 15.3%, to $1.0 billion for the three months ended September 30, 2021 from $888.6 million for the three months ended September 30, 2020, partially offset by a decrease in the yield on interest earning assets by 68 basis points from 5.40% for the three months ended September 30, 2020 to 4.72% for the three months ended September 30, 2021.

 

Interest expense decreased by $1.0 million, or 46.1%, to $1.2 million for the three months ended September 30, 2021 from $2.2 million for the three months ended September 30, 2020 due to a decrease in average interest bearing liabilities of  $50.6 million, or 8.5%, to $547.9 million for the three months ended September 30, 2021 from $598.6 million for the three months ended September 30, 2020 and a decrease in the cost of interest bearing liabilities by 61 basis points from 1.47% for the three months ended September 30, 2020 to 0.86% for the three months ended September 30, 2021.

 

Net interest margin decreased by 15 basis points, or 3.4%, during the three months ended September 30, 2021 to 4.26% compared to 4.41% during the three months ended September 30, 2020.

 

Net interest income totaled $31.6 million for the nine months ended September 30, 2021, as compared to $28.8 million for the nine months ended September 30, 2020. The increase in net interest income of $2.9 million, or 10.0%, was primarily due to the decrease in interest expense that exceeded a decrease in interest income.

 

In a manner consistent with the decrease in interest rates in response to the COVID-19 pandemic, our cost of interest bearing liabilities decreased much greater than our yield on interest earning assets as our interest bearing liabilities repriced much faster to lower rates than our yield on interest earning assets. In this regard, our cost of interest bearing liabilities decreased by 85 basis points from 1.78% for the nine months ended September 30, 2020 to 0.93% for the nine months ended September 30, 2021. Our yield on interest earning assets decreased by 65 basis points from 5.64% for the nine months ended September 30, 2020 to 4.99% for the nine months ended September 30, 2021.

 

Net interest margin increased by 5 basis points, or 1.1%, during the nine months ended September 30, 2021 to 4.44% compared to 4.39% during the nine months ended September 30, 2020.

 

Provision for Loan Losses 

 

The Company recorded a loan loss provision of $3.6 million for the three months ended September 30, 2021 compared to a loan loss provision of $229,000 for the three months ended September 30, 2020. We charged-off a total of $3.6 million and $7,000 during the three months ended September 30, 2021 and September 30, 2020, respectively.

 

The provision recorded for the three months ended September 30, 2021 was primarily attributed to the previously disclosed charge-off of $3.6 million during the three months ended September 30, 2021 regarding a non-residential bridge loan secured by real estate with a balance of $3.6 million. The loan is secured by commercial real estate located in Greenwich, Connecticut and guaranteed by the two borrowers. The loan was originated in 2016 as a two-year bridge loan and, upon the borrower’s failure to satisfy the loan at the maturity date, the loan was accelerated and a foreclosure action was instituted. The loan remains in foreclosure but is subject to Connecticut’s continuing foreclosure backlog. The property securing the loan is subject to a parking easement and based on a recently updated appraisal showing the property’s value with the parking easement to be zero, the Company has determined to write off the $3.6 million loan as a non-cash charge against the allowance for loan losses.

 

The Company intends to aggressively seek recovery of all amounts due from the personal guarantors of the loan. However, the recovery process is uncertain and might take an extended period of time to resolve this matter. In the event the Company is successful against the guarantors, any recovery received would be added back to the allowance for loan losses and an analysis will be performed at that time to determine the appropriateness of the recovery into income.

 

We also charged-off $3,000 and $7,000 during the three months ended September 30, 2021 and September 30, 2020, respectively, against various unpaid overdrafts in our demand deposit accounts. We recorded recoveries of $151,000 and $1,000 during the three months ended September 30, 2021 and September 30, 2020, respectively.

 

The Company recorded a loan loss provision of $3.6 million for the nine months ended September 30, 2021 compared to a loan loss provision of $762,000 for the nine months ended September 30, 2020.

 

The provision recorded for the nine months ended September 30, 2021 was primarily attributed to the charge-off of the aforementioned non-residential bridge loan with a balance of $3.6 million secured by commercial real estate located in Greenwich, Connecticut.

 

 

 

 

The provision recorded for the nine months ended September 30, 2020 was primarily attributed to the perceived potential credit risk associated with the COVID-19 pandemic, although no specific or probable losses were identified at that time. Although the COVID-19 pandemic and the resulting recession has impacted the local economy, we have not experienced any significant deterioration of our borrowers’ ability to keep current in accordance with the terms of their obligations.

 

We also charged-off $23,000 and $10,000 during the nine months ended September 30, 2021 and September 30, 2020, respectively, against various unpaid overdrafts in our demand deposit accounts. We recorded recoveries of $160,000 and $25,000 during the nine months ended September 30, 2021 and September 30, 2020, respectively.

 

Non-Interest Income

 

Non-interest income for the three months ended September 30, 2021 was $532,000 compared to non-interest income of $527,000 for the three months ended September 30, 2020. The increase in total non-interest income was primarily due to an increase of $130,000 in other loan fees and service charges, an increase of $27,000 in investment advisory fees, and a net loss of $2,000 on the sale of fixed assets that occurred during the three months ended September 30, 2020 compared to none during the three months ended September 30, 2021. These increases were partially offset by unrealized loss on equity securities of $154,000 during the three months ended September 30, 2021 compared to none during the three months ended September 30, 2020.

 

Non-interest income for the nine months ended September 30, 2021 was $1.8 million compared to non-interest income of $2.0 million for the nine months ended September 30, 2020. The decrease in total non-interest income was primarily due to an unrealized loss of $215,000 in our equity securities in the 2021 period compared to an unrealized gain of $299,000 in the comparable period in 2020, a decrease of $120,000 in other non-interest income, and a decrease of $10,000 in bank owned life insurance income. These were partially offset by an increase of $374,000 in other loan fees and service charges, an increase of $63,000 in investment advisory fees, and a net gain of $7,000 on the sale of fixed assets in the 2021 period compared to a net loss of $2,000 on the sale of fixed assets in the 2020 period.

 

Non-Interest Expense

 

Non-interest expense increased by $839,000, or 13.9%, to $6.9 million for the three months ended September 30, 2021 from $6.0 million for the three months ended September 30, 2020. The increase resulted primarily from increases of $889,000 in salaries and employee benefits, $37,000 in equipment expense, $15,000 in other operating expense, $9,000 in advertising expense, and $9,000 in occupancy expense, partially offset by decreases of $54,000 in outside data processing expense, $50,000 in impairment loss on goodwill, and $16,000 in real estate owned expense.

 

Non-interest expense increased by $1.3 million, or 7.3%, to $19.7 million for the nine months ended September 30, 2021 from $18.4 million for the nine months ended September 30, 2020. The increase resulted primarily from increases of $1.2 million in salaries and employee benefits, $210,000 in other operating expense, $114,000 in equipment expense, and $98,000 in occupancy expense, partially offset by decreases of $90,000 in real estate owned expense, $80,000 in outside data processing expense, $61,000 in advertising expense, and $50,000 in impairment loss on goodwill.

 

Income Taxes

 

We recorded income tax expense of $265,000 and $956,000 for the three months ended September 30, 2021 and 2020, respectively. For the three months ended September 30, 2021, we had approximately $185,000 in tax exempt income, compared to approximately $166,000 in tax exempt income for the three months ended September 30, 2020. Our effective income tax rates were 26.6% and 23.4% for the three months ended September 30, 2021 and 2020, respectively.

 

We recorded income tax expense of $2.4 million and $2.7 million for the nine months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021, we had approximately $522,000 in tax exempt income, compared to approximately $337,000 in tax exempt income for the nine months ended September 30, 2020. Our effective income tax rates were 23.6% and 23.4% for the nine months ended September 30, 2021 and 2020, respectively.

 

Asset Quality

 

During the nine months ended September 30, 2021, non-performing assets decreased by $3.6 million, or 64.2%, to $2.0 million from $5.6 million as of December 31, 2020. The decrease in non-performing assets was primarily due to the previously disclosed charge-off of $3.6 million on a non-accrual, non-residential bridge loan during 2021. We had no non-performing loans at September 30, 2021 compared to one non-performing loan at December 31, 2020. Our ratio of non-performing assets to total assets remained low at 0.18% as of September 30, 2021 compared to 0.58% as of December 31, 2020.

 

 

 

 

Based on a review of the loans that were in the loan portfolio at September 30, 2021, management believes that the allowance is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.

 

Our allowance for loan losses totaled $5.2 million, or 0.58% of total loans as of September 30, 2021, compared to $5.1 million, or 0.62% of total loans as of December 31, 2020.

 

Capital

 

The Bank’s capital position remains strong relative to current regulatory requirements and is considered a well-capitalized institution under the Prompt Corrective Action framework. As of September 30, 2021, the Bank had a tier 1 leverage capital ratio of 17.07% and a total risk-based capital ratio of 15.91%. The Company’s total stockholder’s equity to assets was 22.45% as of September 30, 2021. At September 30, 2021, the Company had the ability to borrow $39.0 million from the Federal Home Loan Bank of New York.

 

About NorthEast Community Bancorp

 

NorthEast Community Bancorp, headquartered at 325 Hamilton Avenue, White Plains, New York 10601, is the holding company for NorthEast Community Bank, which conducts business through its ten branch offices located in Bronx, New York, Orange, and Rockland Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts and three loan production offices located in New City, New York, White Plains, New York, and Danvers, Massachusetts. For more information about NorthEast Community Bancorp and NorthEast Community Bank, please visit www.necb.com.

 

Forward Looking Statement

 

This press release contains certain forward-looking statements. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include, but are not limited to, changes in market interest rates, regional and national economic conditions, the effect of the COVID-19 pandemic (including its impact on NorthEast Community Bank’s business operations and credit quality, on our customers and their ability to repay their loan obligations and on general economic and financial market conditions), legislative and regulatory changes, monetary and fiscal policies of the United States government, including policies of the United States Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in NorthEast Community Bank’s market area, changes in the real estate market values in NorthEast Community Bank’s market area and changes in relevant accounting principles and guidelines. Additionally, other risks and uncertainties may be described in our annual and quarterly reports filed with the U.S. Securities and Exchange Commission (the “SEC”), which are available through the SEC’s website located at www.sec.gov. These risks and uncertainties should be considered in evaluating any forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

 

CONTACT:Kenneth A. Martinek

Chairman and Chief Executive Officer

PHONE:(914) 684-2500

 

 

 

 

NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

 

   September 30,   December 31, 
   2021   2020 
   (In thousands, except share 
   and per share amounts) 
ASSETS          
Cash and amounts due from depository institutions  $6,728   $7,613 
Interest-bearing deposits   101,285    61,578 
Total Cash and cash equivalents   108,013    69,191 
Certificates of deposit   100    100 
Equity securities   15,117    10,332 
Securities available-for-sale, at fair value   2    2 
Securities held-to-maturity (fair value of  $13,083 and $7,519, respectively)   13,422    7,382 
Loans receivable   909,466    824,708 
Deferred loan costs, net   326    113 
Allowance for loan losses   (5,242)   (5,088)
Net loans   904,550    819,733 
Premises and equipment, net   23,544    18,675 
Investments in restricted stock, at cost   1,569    1,595 
Bank owned life insurance   25,138    24,691 
Accrued interest receivable   4,034    3,838 
Goodwill   651    651 
Real estate owned   1,996    1,996 
Property held for investment   1,491    1,518 
Right of Use Assets – Operating   2,697    3,094 
Right of Use Assets – Financing   360    363 
Other assets   5,346    5,060 
Total assets  $1,108,030   $968,221 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Liabilities:          
Deposits:          
Non-interest bearing  $306,645   $221,371 
Interest bearing   510,190    550,335 
Total deposits   816,835    771,706 
Advance payments by borrowers for taxes and insurance   2,184    2,258 
Federal Home Loan Bank advances   28,000    28,000 
Lease Liability – Operating   2,736    3,115 
Lease Liability – Financing   487    460 
Accounts payable and accrued expenses   9,089    8,857 
Total liabilities   859,331    814,396 
           
Stockholders’ equity:          
Preferred stock, $0.01 and $0.01 par value; 25,000,000 shares and 1,340,000 shares authorized; none issued or outstanding, respectively   —    — 
Common stock, $0.01 and $0.01 par value; 75,000,000 shares and 25,460,000 shares authorized; 16,377,936 shares and 17,721,500 shares issued; and 16,377,936 shares and 16,340,779 shares outstanding, respectively¹  $164   $132 
Additional paid-in capital   145,315    56,901 
Unearned Employee Stock Ownership Plan (“ESOP”) shares   (8,518)   (1,296)
Treasury stock – at cost, 0 and 1,380,721 shares, respectively¹   -    (7,032)
Retained earnings   111,932    105,305 
Accumulated other comprehensive loss   (194)   (185)
Total stockholders’ equity   248,699    153,825 
Total liabilities and stockholders’ equity  $1,108,030   $968,221 

 

¹Shares amounts related to periods prior to the July 12, 2021 closing of the conversion offering have been restated to give retroactive recognition to the 1.34 exchange ratio applied in the conversion offering.

 

 

 

 

NORTHEAST COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2021   2020   2021   2020 
   (In thousands, except per share amounts) 
INTEREST INCOME:                    
Loans  $11,935   $11,882   $35,237   $36,323 
Interest-earning deposits   53    15    74    346 
Securities   104    102    277    325 
Total Interest Income   12,092    11,999    35,588    36,994 
INTEREST EXPENSE:                    
Deposits   995    2,007    3,390    7,692 
Borrowings   178    178    528    509 
Financing lease   9    9    27    27 
Total Interest Expense   1,182    2,194    3,945    8,228 
Net Interest Income   10,910    9,805    31,643    28,766 
Provision for loan loss   3,593    229    3,610    762 
Net Interest Income after Provision for Loan Losses   7,317    9,576    28,033    28,004 
NON-INTEREST INCOME:                    
Other loan fees and service charges   381    251    1,095    721 
Gain (loss) on disposition of equipment   —    (2)   7    (2)
Earnings on bank owned life insurance   152    152    447    457 
Investment advisory fees   139    112    381    318 
Unrealized gain (loss) on equity securities   (154)   -    (215)   299 
Other   14    14    38    157 
Total Non-Interest Income   532    527    1,753    1,950 
NON-INTEREST EXPENSES:                    
Salaries and employee benefits   4,054    3,165    11,223    10,031 
Occupancy expense   489    480    1,534    1,436 
Equipment   229    192    718    604 
Outside data processing   395    449    1,218    1,298 
Advertising   36    27    83    144 
Impairment loss on goodwill   -    50    -    50 
Real estate owned expense   18    34    85    175 
Other   1,633    1,618    4,857    4,647 
Total Non-Interest Expenses   6,854    6,015    19,718    18,385 
INCOME BEFORE PROVISION FOR INCOME TAXES   995    4,088    10,068    11,569 
PROVISION FOR INCOME TAXES   265    956    2,372    2,703 
NET INCOME  $730   $3,132   $7,696   $8,866 

 

 

 

 

NORTHEAST COMMUNITY BANCORP, INC.

SELECTED CONSOLIDATED FINANCIAL DATA

(Unaudited)

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2021   2020   2021   2020 
   (In thousands, except per share amounts)   (In thousands, except per share amounts) 
Per share data:                    
Earnings per share - basic and diluted¹  $0.05   $0.19   $0.48   $0.55 
Weighted average shares outstanding - basic and diluted¹   15,572    16,154    15,973    16,146 
Performance ratios/data:                    
Return on average total assets   0.27%   1.32%   1.01%   1.26%
Return on average shareholders' equity   1.31%   8.37%   5.72%   8.05%
Net interest income  $10,910   $9,805   $31,643   $28,766 
Net interest margin   4.26%   4.41%   4.44%   4.39%
Efficiency ratio   59.90%   58.50%   59.04%   59.95%
Net charge-off ratio   1.60%   0.00%   0.55%   0.00%
                     
Loan portfolio composition:             September 30, 2021    December 31, 2020 
One-to-four family            $4,766   $6,170 
Multi-family             91,118    90,506 
Mixed-use             24,440    30,508 
Total residential real estate             120,324    127,184 
Non-residential real estate             52,020    60,665 
Construction             633,263    545,788 
Commercial and industrial             103,808    90,577 
Overdrafts             14    452 
Consumer             37    42 
Gross loans             909,466    824,708 
Deferred loan (fees) costs, net             326    113 
Total loans            $909,792   $824,821 
Asset quality data:                    
Loans past due over 90 days and still accruing            $-   $- 
Non-accrual loans             -    3,572 
OREO property             1,996    1,996 
Total non-performing assets            $1,996   $5,568 
                     
Allowance for loan losses to total loans             0.58%   0.62%
Allowance for loan losses to non-performing loans             NA    142.44%
Non-performing loans to total loans             0.00%   0.43%
Non-performing assets to total assets             0.18%   0.58%
                     
Bank's Regulatory Capital ratios:                    
Common equity tier 1 capital to risk-weighted assets             15.91%   13.72%
Total capital to risk-weighted assets             15.48%   13.23%
Tier 1 capital to risk-weighted assets             15.48%   13.23%
Tier 1 leverage ratio             17.07%   14.79%

 

¹Shares amounts related to periods prior to the July 12, 2021 closing of the conversion offering have been restated to give retroactive recognition to the 1.34 exchange ratio applied in the conversion offering.

 

 

 

 

NORTHEAST COMMUNITY BANCORP, INC.

NET INTEREST MARGIN ANALYSIS

(Unaudited)

 

   Three Months Ended September 30, 2021   Three Months Ended September 30, 2020 
   Average   Interest   Average   Average       Average 
   Balance   and dividend   Yield   Balance   Interest   Yield 
   (In thousands, except yield/cost information)   (In thousands, except yield/cost information) 
Loan receivable Gross  $862,796   $11,935    5.53%  $807,465   $11,882    5.89%
Securities (1)   27,208    104    1.53%   20,190    102    2.02%
Other interest-earning assets   134,680    53    0.16%   60,974    15    0.10%
Total interest-earning assets   1,024,684    12,092    4.72%   888,629    11,999    5.40%
Allowance for loan losses   (5,181)             (5,167)          
Non-interest-earning assets   73,990              65,773           
Total assets  $1,093,493             $949,235           
                               
Interest-bearing demand deposit  $117,329   $183    0.62%  $100,287   $151    0.60%
Savings and club accounts   97,556    48    0.20%   102,065    84    0.33%
Certificates of deposit   305,057    764    1.00%   368,220    1,772    1.92%
Total interest-bearing deposits   519,942    995    0.77%   570,572    2,007    1.41%
Borrowed money   28,000    187    2.67%   28,000    187    2.67%
Total interest-bearing liabilities   547,942    1,182    0.86%   598,572    2,194    1.47%
Non-interest-bearing demand deposit   281,499              188,616           
Other non-interest-bearing liabilities   41,992              12,336           
Total liabilities   871,433              799,524           
Equity   222,060              149,711           
Total liabilities and equity  $1,093,493             $949,235           
                               
Net interest income / interest spread       $10,910    3.86%       $9,805    3.93%
Net interest rate margin             4.26%             4.41%
Net interest earning assets  $476,742             $290,057           
Average interest-earning assets                              
to interest-bearing liabilities   187.01%             148.46%          

 

 

(1)Includes Federal Home Loan Bank of New York stock.

 

 

 

  

   Nine Months Ended September 30, 2021   Nine Months Ended September 30, 2020 
   Average   Interest   Average   Average       Average 
   Balance   and dividend   Yield   Balance   Interest   Yield 
   (In thousands, except yield/cost information)   (In thousands, except yield/cost information) 
Loan receivable Gross  $843,850   $35,237    5.57%  $793,002   $36,323    6.11%
Securities (1)   22,636    277    1.63%   20,519    325    2.11%
Other interest-earning assets   84,465    74    0.12%   61,044    346    0.76%
Total interest-earning assets   950,951    35,588    4.99%   874,565    36,994    5.64%
Allowance for loan losses   (5,125)             (4,891)          
Non-interest-earning assets   71,449              67,146           
Total assets  $1,017,275             $936,820           
                               
Interest-bearing demand deposit  $113,370   $503    0.59%  $106,721   $615    0.77%
Savings and club accounts   100,431    174    0.23%   102,130    542    0.71%
Certificates of deposit   321,956    2,712    1.12%   380,777    6,535    2.29%
Total interest-bearing deposits   535,757    3,389    0.84%   589,628    7,692    1.74%
Borrowed money   28,000    556    2.65%   26,391    536    2.71%
Total interest-bearing liabilities   563,757    3,945    0.93%   616,019    8,228    1.78%
Non-interest-bearing demand deposit   247,258              162,278           
Other non-interest-bearing liabilities   26,762              11,595           
Total liabilities   837,777              789,892           
Equity   179,498              146,928           
Total liabilities and equity  $1,017,275             $936,820           
                               
Net interest income / interest spread       $31,643    4.06%       $28,766    3.86%
Net interest rate margin             4.44%             4.39%
Net interest earning assets  $387,194             $258,546           
Average interest-earning assets                              
to interest-bearing liabilities   168.68%             141.97%          

 

 

(1)Includes Federal Home Loan Bank of New York stock.