EX-99.1 2 pdlb-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

Ponce Financial Group, Inc. Reports Third Quarter 2022 Results

 

NEW YORK, October 28, 2022 - Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), today announced results for the third quarter of 2022.

Third Quarter Highlights (Compared to Prior Periods):

•
Net loss of ($14.7) million or ($0.64) per diluted share, for the three months ended September 30, 2022, as compared to net income of $771,000, or $0.03 per diluted share for the three months ended June 30, 2022 and net income of $2.1 million, or $0.12 per diluted share for the three months ended September 30, 2021.
•
Included in the ($14.7) million 2022 third quarter results are $17.5 million of pre-tax charges related to Grain Technologies, Inc. (“Grain”) inclusive of the following: $7.9 million in additional write-offs of the receivable for loans put back to Grain; $8.6 million increase in provision for loan loss reserves/unused commitments to Grain-originated microloan portfolio and write-off of $1.0 million equity investment in Grain. In addition to pre-tax charges related to Grain, the Company also recognized a one-time $436,000 loss on equipment sales as it moved to implement ATMs as a service.
•
Net interest income of $17.6 million for the 2022 third quarter increased $2.1 million, or 13.71%, from the prior quarter and $2.2 million, or 14.06%, from the same quarter last year, largely due to increases in the Company's securities portfolio.
•
Net interest margin was 3.62% for the 2022 third quarter, a decrease from 4.10% for the prior quarter and from 4.13% for the same quarter last year. The reduction was largely attributable to an increase of lower yielding securities in the Company's portfolio and to an increase in the cost of funds.
•
Securities totaled $626.3 million as of September 30, 2022, an increase of $512.0 million from December 31, 2021.
•
Net loans receivable were $1.39 billion as of September 30, 2022, an increase of $87.5 million, or 6.70%, from December 31, 2021. The increase of $87.5 million was attributable to a $199.5 million net increase in non-PPP loans partially offset by a $112.0 million decrease in PPP loans.
•
Deposits were $1.35 billion as of September 30, 2022, an increase of 12.16%, from December 31, 2021.

 

President and Chief Executive Officer’s Comments

Carlos P. Naudon, Ponce Financial Group’s President and CEO, stated, “Last quarter we announced the purchase of $225 million of preferred stock by the U.S. Department of the Treasury, resulting in the company having $500 million in stockholders' equity with which to add value for our stakeholders – our communities, customers, employees and shareholders. In the third quarter, we continued to implement our capital leveraging strategy by growing our securities portfolio. Moving forward, given the significant volatility in interest rates, we will be taking a more measured approach to putting our excess capital to work. Through continued investments in our people, technology and customers and utilizing our strong capital base, we are focused on management's goal to more than double the size of our loan business over the next several years”.

 

Mr. Naudon continued, “Our reported results this quarter, were impacted by additional action we took to more aggressively ring fence our overall exposure to Grain, recognizing pre-tax charges totaling $17.5 million as we moved to put ourselves in a position to minimize future losses from the microloan portfolio. Importantly, we remain well capitalized as we evaluate all means of delivering value to our stakeholders, including using all available capital management tools. As we grow our business, we will continue to leverage our existing partnerships, our strong core loan growth, and our status as a nationally recognized MDI and CDFI lending institution that has a strong asset growth capacity.”

 

Executive Chairman’s Comment

Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman, added, “This quarter, we continued the growth in our more traditional and focused areas of lending, including both qualified and non-qualified mortgages, the latter of which represents an important area of focus for Ponce. This portfolio continues to show resiliency in a challenging economic environment. With our abundant capital base and balance sheet liquidity, we are focused on significant growth opportunities across the historic communities we have served for over six decades in the New York City area, as well as expanding opportunities in other similarly underserved communities.”

 

1

 

Selected performance metrics are as follows (refer to “Key Metrics” for additional information):

 

 

For the Three Months Ended,

Performance Ratios (Annualized):

September 30, 2022

June 30, 2022

March 31, 2022

December 31, 2021

September 30, 2021

Return on average assets

 (2.85%)

0.18%

(1.60%)

3.69%

0.52%

Return on average stockholders’ equity

(11.25%)

1.01%

(10.06%)

31.46%

4.59%

Net interest rate spread

 3.12%

3.86%

4.48%

4.32%

3.92%

Net interest margin

 3.62%

4.10%

4.68%

4.51%

4.13%

Non-interest expense to average assets

 4.91%

3.84%

6.59%

3.90%

3.72%

Efficiency ratio

 132.46%

93.77%

143.50%

44.10%

78.89%

Average interest-earning assets to average interest- bearing liabilities

 161.30%

151.98%

145.54%

138.10%

138.89%

Average equity to average assets

 25.31%

17.66%

15.92%

11.71%

11.27%

 

 

 

For the Three Months Ended,

Capital Ratios (Annualized):

September 30, 2022

June 30, 2022

March 31, 2022

December 31, 2021

September 30, 2021

Total Capital to risk weighted assets

 33.39%

36.00%

23.27%

17.23%

16.15%

Tier 1 Capital to risk weighted assets

 32.13%

34.75%

22.02%

15.98%

14.90%

Common equity Tier 1 capital to risk-weighted assets

 32.13%

34.75%

22.02%

15.98%

14.90%

Tier 1 capital to average assets

 22.91%

28.79%

14.88%

10.95%

9.98%

 

 

 

For the Three Months Ended,

Asset Quality Ratios (Annualized):

September 30, 2022

June 30, 2022

March 31, 2022

December 31, 2021

September 30, 2021

Allowance for loan losses as a percentage of total loans

 1.77%

1.31%

1.28%

1.24%

1.21%

Allowance for loan losses as a percentage of nonperforming loans

118.43%

94.05%

106.84%

142.90%

157.17%

Net (charge-offs) recoveries to average outstanding loans

 (0.52%)

(0.05%)

(0.22%)

(0.18%)

(0.13%)

Non-performing loans as a percentage of total gross loans

 1.50%

1.39%

1.20%

0.87%

0.77%

Non-performing loans as a percentage of total assets

 0.98%

0.91%

0.99%

0.69%

0.65%

Total non-performing assets as a percentage of total assets

 0.98%

0.91%

0.99%

0.69%

0.65%

 

 

Summary of Results of Operations

 

Net loss for the nine months ended September 30, 2022, was ($20.8) million compared to net income of $10.4 million for the nine months ended September 30, 2021. This variance was largely due to charges related to Grain and a contribution to the Ponce De Leon Foundation this year, gains on property sales last year versus a loss on equipment sale this year, higher compensation and occupancy expenses and a reduction on the income on sale of mortgage loans.

 

Net Interest Income and Net Margin

 

Net interest income for the nine months ended September 30, 2022, was $50.4 million compared to $42.1 million for the nine months ended September 30, 2021. This increase is largely explained by the increase in the securities and loan portfolios.

 

Net interest margin was 4.09% for the nine months ended September 30, 2022 compared to 3.99% for the same period last year, an increase of 10bps. The increase in net interest margin was a result of an increase in net interest-earning assets as well as higher yields.

 

Non-interest Income

 

Non-interest income for the three months ended September 30, 2022, was $1.6 million, a decrease of $602,000, or 27.63%, compared to the three months ended June 30, 2022 and a decrease of $1.7 million, or 51.24%, compared to the three months ended September 30, 2021.

 

2

 

The $602,000 decrease in non-interest income for the three months ended September 30, 2022 compared to the three months ended June 30, 2022 was impacted by a one-time $436,000 loss on sale of equipment and a decrease of $174,000 in loan origination fees.

 

The $1.7 million decrease in non-interest income for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was attributable to a decrease of $1.1 million in income on sale of mortgage loans, a one-time $436,000 loss on sale of equipment, and decreases of $220,000 in late and prepayment charges and $103,000 in loan origination fees, offset by an increase of $173,000 in other non-interest income.

 

Non-interest income for the nine months ended September 30, 2022, decreased $9.5 million, or 61.33%, to $6.0 million compared to $15.5 million for the nine months ended September 30, 2021. The decrease is due to the loss on sale of equipment this year versus gains on sale of property last year and reductions in income on sale of mortgage loans, late and prepayment charges and loan origination fees.

 

Non-interest Expense

 

Non-interest expense for the three months ended September 30, 2022, was $25.4 million, an increase of $8.8 million, or 53.41%, compared to the three months ended June 30, 2022 and of $10.7 million, or 72.52%, compared to the three months ended September 30, 2021. The $8.8 million increase from the three months ended June 30, 2022 was mainly attributable to the Grain write-off and write-down and to a lesser extent, the increases in other operating expenses, compensation and benefits and occupancy and equipment. These factors also explain the $10.7 million increase in non-interest expense versus the same quarter last year.

 

Non-interest expense for the nine months ended September 30, 2022, was $70.1 million, an increase of $28.8 million or 69.68%, compared to the nine months ended September 30, 2021. The $28.8 million increase in non-interest expense was attributable to the $18.5 million Grain write-off and write-down, $5.0 million contribution to the Ponce De Leon Foundation, and increases of $5.1 million in compensation and benefits, $1.7 million in occupancy and equipment expenses, $421,000 in data processing expenses and $396,000 in other operating expenses. These items were partially offset by decreases of $1.6 million in professional fees and $823,000 in direct loan expenses.

 

 

Balance Sheet Summary

 

Total assets increased $504.8 million, or 30.53%, to $2.16 billion as of September 30, 2022 from $1.65 billion as of December 31, 2021. The increase in total assets is largely attributable to an increase of $493.4 million resulting from the purchases in held-to-maturity securities utilizing the $225.0 million received from the issuance of preferred stock to the U.S. Treasury pursuant to its Emergency Capital Investment Program. The increase in total assets is further impacted by an increase of $87.5 million in net loans receivable (inclusive of a $112.0 million net decrease in PPP loans), partially offset by a decrease of $91.4 million in cash and equivalents.

 

Total liabilities increased $193.3 million, or 13.20%, to $1.66 billion as of September 30, 2022 from $1.46 billion as of December 31, 2021. The increase in total liabilities was largely attributable to increases of $180.1 million in advances from FHLBNY and $146.5 million in deposits, offset by a decrease of $122.0 million in subscription liabilities related to the conversion of the mutual holding company to a stock company held as of December 31, 2021 pending the closing of the conversion and reorganization on January 27, 2022.

 

Total stockholders’ equity increased $311.4 million, or 164.55%, to $500.7 million as of September 30, 2022, from $189.3 million as of December 31, 2021. This increase in stockholders’ equity was largely attributable to the $225.0 million issuance of preferred stock to the U.S. Department of the Treasury pursuant to its Emergency Capital Investment Program and the $118.0 million received as a result of the sale of common stock in the conversion of the mutual holding company to a stock company.

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.

3

 

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; the anticipated impact of the COVID-19 pandemic and Ponce Bank’s attempts at mitigation; 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.

 

4

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, 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,

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

$

37,235

 

 

$

53,544

 

 

$

32,168

 

 

$

98,954

 

 

$

29,365

 

Interest-bearing deposits in banks

 

25,286

 

 

 

221,262

 

 

 

37,127

 

 

 

54,940

 

 

 

33,673

 

Total cash and cash equivalents

 

62,521

 

 

 

274,806

 

 

 

69,295

 

 

 

153,894

 

 

 

63,038

 

Available-for-sale securities, at fair value

 

131,977

 

 

 

140,044

 

 

 

154,799

 

 

 

113,346

 

 

 

104,358

 

Held-to-maturity securities, at amortized cost

 

494,297

 

 

 

211,517

 

 

 

927

 

 

 

934

 

 

 

1,437

 

Placement with banks

 

2,490

 

 

 

2,490

 

 

 

2,490

 

 

 

2,490

 

 

 

2,490

 

Mortgage loans held for sale, at fair value

 

3,357

 

 

 

9,234

 

 

 

7,972

 

 

 

15,836

 

 

 

13,930

 

Loans receivable, net

 

1,392,553

 

 

 

1,324,320

 

 

 

1,300,446

 

 

 

1,305,078

 

 

 

1,302,238

 

Accrued interest receivable

 

14,063

 

 

 

13,255

 

 

 

12,799

 

 

 

12,362

 

 

 

13,360

 

Premises and equipment, net

 

17,759

 

 

 

18,945

 

 

 

19,279

 

 

 

19,617

 

 

 

34,081

 

Federal Home Loan Bank of New York stock (FHLBNY), at cost

 

14,272

 

 

 

16,429

 

 

 

5,420

 

 

 

6,001

 

 

 

6,001

 

Deferred tax assets

 

13,822

 

 

 

9,658

 

 

 

7,440

 

 

 

3,820

 

 

 

4,826

 

Other assets

 

11,170

 

 

 

21,585

 

 

 

13,730

 

 

 

20,132

 

 

 

14,793

 

Total assets

$

2,158,281

 

 

$

2,042,283

 

 

$

1,594,597

 

 

$

1,653,510

 

 

$

1,560,552

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

1,351,189

 

 

$

1,148,728

 

 

$

1,181,165

 

 

$

1,204,716

 

 

$

1,249,261

 

Accrued interest payable

 

854

 

 

 

158

 

 

 

223

 

 

 

228

 

 

 

238

 

Advance payments by borrowers for taxes and insurance

 

10,589

 

 

 

8,668

 

 

 

10,161

 

 

 

7,657

 

 

 

9,118

 

Advances from the FHLBNY and others

 

286,375

 

 

 

334,375

 

 

 

93,375

 

 

 

106,255

 

 

 

106,255

 

Warehouse lines of credit

 

—

 

 

 

—

 

 

 

753

 

 

 

15,090

 

 

 

11,261

 

Mortgage loan fundings payable

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,136

 

Mutual holding company conversion subscription liabilities

 

—

 

 

 

—

 

 

 

—

 

 

 

122,000

 

 

 

—

 

Other liabilities

 

8,591

 

 

 

32,272

 

 

 

9,341

 

 

 

8,308

 

 

 

9,396

 

Total liabilities

 

1,657,598

 

 

 

1,524,201

 

 

 

1,295,018

 

 

 

1,464,254

 

 

 

1,386,665

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 100,000,000 shares authorized

 

225,000

 

 

 

225,000

 

 

 

—

 

 

 

—

 

 

 

—

 

Common stock, $0.01 par value; 200,000,000 shares authorized

 

247

 

 

 

247

 

 

 

247

 

 

 

185

 

 

 

185

 

Treasury stock, at cost

 

—

 

 

 

—

 

 

 

—

 

 

 

(13,687

)

 

 

(15,069

)

Additional paid-in-capital

 

206,092

 

 

 

205,669

 

 

 

205,243

 

 

 

85,601

 

 

 

86,360

 

Retained earnings

 

102,169

 

 

 

116,907

 

 

 

116,136

 

 

 

122,956

 

 

 

107,977

 

Accumulated other comprehensive loss

 

(18,420

)

 

 

(15,032

)

 

 

(7,035

)

 

 

(1,456

)

 

 

(621

)

Unearned compensation ─ ESOP

 

(14,405

)

 

 

(14,709

)

 

 

(15,012

)

 

 

(4,343

)

 

 

(4,945

)

Total stockholders' equity

 

500,683

 

 

 

518,082

 

 

 

299,579

 

 

 

189,256

 

 

 

173,887

 

Total liabilities and stockholders' equity

$

2,158,281

 

 

$

2,042,283

 

 

$

1,594,597

 

 

$

1,653,510

 

 

$

1,560,552

 

 

 

 

 

5

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, 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,

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on loans receivable

$

17,058

 

 

$

16,057

 

 

$

18,200

 

 

$

18,013

 

 

$

16,991

 

Interest on deposits due from banks

 

346

 

 

 

132

 

 

 

36

 

 

 

7

 

 

 

9

 

Interest and dividend on securities and FHLBNY stock

 

4,230

 

 

 

978

 

 

 

782

 

 

 

632

 

 

 

425

 

Total interest and dividend income

 

21,634

 

 

 

17,167

 

 

 

19,018

 

 

 

18,652

 

 

 

17,425

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on certificates of deposit

 

687

 

 

 

677

 

 

 

803

 

 

 

907

 

 

 

1,010

 

Interest on other deposits

 

1,543

 

 

 

521

 

 

 

284

 

 

 

309

 

 

 

354

 

Interest on borrowings

 

1,793

 

 

 

481

 

 

 

593

 

 

 

654

 

 

 

621

 

Total interest expense

 

4,023

 

 

 

1,679

 

 

 

1,680

 

 

 

1,870

 

 

 

1,985

 

Net interest income

 

17,611

 

 

 

15,488

 

 

 

17,338

 

 

 

16,782

 

 

 

15,440

 

Provision for loan losses

 

9,330

 

 

 

817

 

 

 

1,258

 

 

 

873

 

 

 

572

 

Net interest income after provision for loan losses

 

8,281

 

 

 

14,671

 

 

 

16,080

 

 

 

15,909

 

 

 

14,868

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and fees

 

464

 

 

 

445

 

 

 

440

 

 

 

468

 

 

 

494

 

Brokerage commissions

 

288

 

 

 

214

 

 

 

338

 

 

 

401

 

 

 

270

 

Late and prepayment charges

 

109

 

 

 

193

 

 

 

58

 

 

 

336

 

 

 

329

 

Income on sale of mortgage loans

 

116

 

 

 

200

 

 

 

418

 

 

 

1,294

 

 

 

1,175

 

Loan origination

 

522

 

 

 

696

 

 

 

625

 

 

 

886

 

 

 

625

 

(Loss) gain on sale of premises and equipment

 

(436

)

 

 

—

 

 

 

—

 

 

 

15,431

 

 

 

—

 

Other

 

514

 

 

 

431

 

 

 

347

 

 

 

353

 

 

 

341

 

Total non-interest income

 

1,577

 

 

 

2,179

 

 

 

2,226

 

 

 

19,169

 

 

 

3,234

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

7,377

 

 

 

6,911

 

 

 

7,125

 

 

 

6,959

 

 

 

6,427

 

Occupancy and equipment

 

3,611

 

 

 

3,237

 

 

 

3,192

 

 

 

3,007

 

 

 

2,849

 

Data processing expenses

 

994

 

 

 

824

 

 

 

847

 

 

 

771

 

 

 

917

 

Direct loan expenses

 

654

 

 

 

505

 

 

 

874

 

 

 

1,032

 

 

 

696

 

Insurance and surety bond premiums

 

297

 

 

 

156

 

 

 

147

 

 

 

149

 

 

 

147

 

Office supplies, telephone and postage

 

369

 

 

 

406

 

 

 

405

 

 

 

552

 

 

 

626

 

Professional fees

 

1,251

 

 

 

1,748

 

 

 

1,334

 

 

 

1,700

 

 

 

1,765

 

Contribution to the Ponce De Leon Foundation

 

—

 

 

 

—

 

 

 

4,995

 

 

 

—

 

 

 

—

 

Grain write-off and write-down

 

8,881

 

 

 

1,500

 

 

 

8,074

 

 

 

—

 

 

 

—

 

Marketing and promotional expenses

 

214

 

 

 

52

 

 

 

71

 

 

 

69

 

 

 

51

 

Directors fees

 

89

 

 

 

96

 

 

 

71

 

 

 

80

 

 

 

67

 

Regulatory assessment

 

99

 

 

 

71

 

 

 

83

 

 

 

69

 

 

 

74

 

Other operating expenses

 

1,580

 

 

 

1,061

 

 

 

856

 

 

 

1,466

 

 

 

1,113

 

Total non-interest expense

 

25,416

 

 

 

16,567

 

 

 

28,074

 

 

 

15,854

 

 

 

14,732

 

(Loss) income before income taxes

 

(15,558

)

 

 

283

 

 

 

(9,768

)

 

 

19,224

 

 

 

3,370

 

(Benefit) provision for income taxes

 

(820

)

 

 

(488

)

 

 

(2,948

)

 

 

4,245

 

 

 

1,318

 

Net (loss) income

$

(14,738

)

 

$

771

 

 

$

(6,820

)

 

$

14,979

 

 

$

2,052

 

(Loss) earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.64

)

 

$

0.03

 

 

$

(0.31

)

 

$

0.90

 

 

$

0.12

 

Diluted

$

(0.64

)

 

$

0.03

 

 

$

(0.31

)

 

$

0.89

 

 

$

0.12

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

23,094,859

 

 

 

23,056,559

 

 

 

21,721,113

 

 

 

16,864,929

 

 

 

16,823,731

 

Diluted

 

23,094,859

 

 

 

23,128,911

 

 

 

21,721,113

 

 

 

16,924,785

 

 

 

16,914,833

 

 

 

6

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

 

 

 

For the Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

Variance $

 

 

Variance %

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on loans receivable

 

$

51,315

 

 

$

47,519

 

 

$

3,796

 

 

 

7.99

%

Interest on deposits due from banks

 

 

514

 

 

 

13

 

 

 

501

 

 

 

3,853.85

%

Interest and dividend on securities and FHLBNY stock

 

 

5,990

 

 

 

914

 

 

 

5,076

 

 

 

555.36

%

Total interest and dividend income

 

 

57,819

 

 

 

48,446

 

 

 

9,373

 

 

 

19.35

%

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on certificates of deposit

 

 

2,167

 

 

 

3,337

 

 

 

(1,170

)

 

 

(35.06

%)

Interest on other deposits

 

 

2,348

 

 

 

1,118

 

 

 

1,230

 

 

 

110.02

%

Interest on borrowings

 

 

2,867

 

 

 

1,927

 

 

 

940

 

 

 

48.78

%

Total interest expense

 

 

7,382

 

 

 

6,382

 

 

 

1,000

 

 

 

15.67

%

Net interest income

 

 

50,437

 

 

 

42,064

 

 

 

8,373

 

 

 

19.91

%

Provision for loan losses

 

 

11,405

 

 

 

1,844

 

 

 

9,561

 

 

 

518.49

%

Net interest income after provision for loan losses

 

 

39,032

 

 

 

40,220

 

 

 

(1,188

)

 

 

(2.95

%)

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and fees

 

 

1,349

 

 

 

1,189

 

 

 

160

 

 

 

13.46

%

Brokerage commissions

 

 

840

 

 

 

923

 

 

 

(83

)

 

 

(8.99

%)

Late and prepayment charges

 

 

360

 

 

 

871

 

 

 

(511

)

 

 

(58.67

%)

Income on sale of mortgage loans

 

 

734

 

 

 

3,971

 

 

 

(3,237

)

 

 

(81.52

%)

Loan origination

 

 

1,843

 

 

 

2,135

 

 

 

(292

)

 

 

(13.68

%)

(Loss) gain on sale of premises and equipment

 

 

(436

)

 

 

4,812

 

 

 

(5,248

)

 

 

(109.06

%)

Other

 

 

1,292

 

 

 

1,567

 

 

 

(275

)

 

 

(17.55

%)

Total non-interest income

 

 

5,982

 

 

 

15,468

 

 

 

(9,486

)

 

 

(61.33

%)

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

21,413

 

 

 

16,303

 

 

 

5,110

 

 

 

31.34

%

Occupancy and equipment

 

 

10,040

 

 

 

8,321

 

 

 

1,719

 

 

 

20.66

%

Data processing expenses

 

 

2,665

 

 

 

2,244

 

 

 

421

 

 

 

18.76

%

Direct loan expenses

 

 

2,033

 

 

 

2,856

 

 

 

(823

)

 

 

(28.82

%)

Insurance and surety bond premiums

 

 

600

 

 

 

436

 

 

 

164

 

 

 

37.61

%

Office supplies, telephone and postage

 

 

1,180

 

 

 

1,502

 

 

 

(322

)

 

 

(21.44

%)

Professional fees

 

 

4,333

 

 

 

5,929

 

 

 

(1,596

)

 

 

(26.92

%)

Contribution to the Ponce De Leon Foundation

 

 

4,995

 

 

 

—

 

 

 

4,995

 

 

 

—

%

Grain write-off and write-down

 

 

18,455

 

 

 

—

 

 

 

18,455

 

 

 

—

%

Marketing and promotional expenses

 

 

337

 

 

 

137

 

 

 

200

 

 

 

145.99

%

Directors fees

 

 

256

 

 

 

205

 

 

 

51

 

 

 

24.88

%

Regulatory assessment

 

 

253

 

 

 

254

 

 

 

(1

)

 

 

(0.39

%)

Other operating expenses

 

 

3,497

 

 

 

3,101

 

 

 

396

 

 

 

12.77

%

Total non-interest expense

 

 

70,057

 

 

 

41,288

 

 

 

28,769

 

 

 

69.68

%

(Loss) income before income taxes

 

 

(25,043

)

 

 

14,400

 

 

 

(39,443

)

 

 

(273.91

%)

(Benefit) provision for income taxes

 

 

(4,256

)

 

 

3,964

 

 

 

(8,220

)

 

 

(207.37

%)

Net (loss) income

 

$

(20,787

)

 

$

10,436

 

 

$

(31,223

)

 

 

(299.19

%)

(Loss) earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.92

)

 

$

0.62

 

 

N/A

 

 

N/A

 

Diluted

 

$

(0.92

)

 

$

0.62

 

 

N/A

 

 

N/A

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

22,524,477

 

 

 

16,703,997

 

 

N/A

 

 

N/A

 

Diluted

 

 

22,524,477

 

 

 

16,746,554

 

 

N/A

 

 

N/A

 

 

 

7

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Key Metrics

 

At or for the Three Months Ended

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

(2.85

%)

 

 

0.18

%

 

 

(1.60

%)

 

 

3.69

%

 

 

0.52

%

Return on average equity (1)

 

(11.25

%)

 

 

1.01

%

 

 

(10.06

%)

 

 

31.46

%

 

 

4.59

%

Net interest rate spread (1) (2)

 

3.12

%

 

 

3.86

%

 

 

4.48

%

 

 

4.32

%

 

 

3.92

%

Net interest margin (1) (3)

 

3.62

%

 

 

4.10

%

 

 

4.68

%

 

 

4.51

%

 

 

4.13

%

Non-interest expense to average assets (1)

 

4.91

%

 

 

3.84

%

 

 

6.59

%

 

 

3.90

%

 

 

3.72

%

Efficiency ratio (4)

 

132.46

%

 

 

93.77

%

 

 

143.50

%

 

 

44.10

%

 

 

78.89

%

Average interest-earning assets to average interest- bearing liabilities

 

161.30

%

 

 

151.98

%

 

 

145.54

%

 

 

138.10

%

 

 

138.89

%

Average equity to average assets

 

25.31

%

 

 

17.66

%

 

 

15.92

%

 

 

11.71

%

 

 

11.27

%

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital to risk weighted assets (Bank only)

 

33.39

%

 

 

36.00

%

 

 

23.27

%

 

 

17.23

%

 

 

16.15

%

Tier 1 capital to risk weighted assets (Bank only)

 

32.13

%

 

 

34.75

%

 

 

22.02

%

 

 

15.98

%

 

 

14.90

%

Common equity Tier 1 capital to risk-weighted assets (Bank only)

 

32.13

%

 

 

34.75

%

 

 

22.02

%

 

 

15.98

%

 

 

14.90

%

Tier 1 capital to average assets (Bank only)

 

22.91

%

 

 

28.79

%

 

 

14.88

%

 

 

10.95

%

 

 

9.98

%

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses as a percentage of total loans

 

1.77

%

 

 

1.31

%

 

 

1.28

%

 

 

1.24

%

 

 

1.21

%

Allowance for loan losses as a percentage of nonperforming loans

 

118.43

%

 

 

94.05

%

 

 

106.84

%

 

 

142.90

%

 

 

157.17

%

Net (charge-offs) recoveries to average outstanding loans (1)

 

(0.52

%)

 

 

(0.05

%)

 

 

(0.22

%)

 

 

(0.18

%)

 

 

(0.13

%)

Non-performing loans as a percentage of total gross loans

 

1.50

%

 

 

1.39

%

 

 

1.20

%

 

 

0.87

%

 

 

0.77

%

Non-performing loans as a percentage of total assets

 

0.98

%

 

 

0.91

%

 

 

0.99

%

 

 

0.69

%

 

 

0.65

%

Total non-performing assets as a percentage of total assets

 

0.98

%

 

 

0.91

%

 

 

0.99

%

 

 

0.69

%

 

 

0.65

%

Total non-performing assets and accruing troubled debt restructured loans as a percentage of total assets

 

1.18

%

 

 

1.16

%

 

 

1.32

%

 

 

1.07

%

 

 

1.05

%

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of offices

 

18

 

 

 

18

 

 

 

18

 

 

 

19

 

 

 

19

 

Number of full-time equivalent employees

 

257

 

 

 

253

 

 

 

223

 

 

 

217

 

 

 

230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
Annualized where appropriate.
(2)
Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(3)
Net interest margin represents net interest income divided by average total interest-earning assets.
(4)
Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

 

 

 

8

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Securities Portfolio

 

 

 

September 30, 2022

 

 

December 31, 2021

 

 

 

 

 

 

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

 

$

2,984

 

 

$

—

 

 

$

(325

)

 

$

2,659

 

 

$

2,981

 

 

$

—

 

 

$

(47

)

 

$

2,934

 

Corporate Bonds

 

 

25,833

 

 

 

—

 

 

 

(2,475

)

 

 

23,358

 

 

 

21,243

 

 

 

144

 

 

 

(203

)

 

 

21,184

 

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations (1)

 

 

45,727

 

 

 

—

 

 

 

(6,362

)

 

 

39,365

 

 

 

18,845

 

 

 

—

 

 

 

(497

)

 

 

18,348

 

FHLMC Certificates

 

 

11,614

 

 

 

—

 

 

 

(1,821

)

 

 

9,793

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

FNMA Certificates

 

 

68,840

 

 

 

—

 

 

 

(12,166

)

 

 

56,674

 

 

 

71,930

 

 

 

—

 

 

 

(1,231

)

 

 

70,699

 

GNMA Certificates

 

 

129

 

 

 

—

 

 

 

(1

)

 

 

128

 

 

 

175

 

 

 

6

 

 

 

—

 

 

 

181

 

Total available-for-sale securities

 

$

155,127

 

 

$

—

 

 

$

(23,150

)

 

$

131,977

 

 

$

115,174

 

 

$

150

 

 

$

(1,978

)

 

$

113,346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-Maturity Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Agency Bonds

 

$

25,000

 

 

$

—

 

 

$

(308

)

 

$

24,692

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Corporate Bonds

 

 

80,500

 

 

 

—

 

 

 

(3,242

)

 

 

77,258

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Mortgage-Backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collateralized Mortgage Obligations (1)

 

 

227,257

 

 

 

—

 

 

 

(5,184

)

 

 

222,073

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

FHLMC Certificates

 

 

4,146

 

 

 

—

 

 

 

(272

)

 

 

3,874

 

 

 

934

 

 

 

—

 

 

 

(20

)

 

 

914

 

FNMA Certificates

 

 

135,178

 

 

 

—

 

 

 

(6,076

)

 

 

129,102

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

SBA Certificates

 

 

22,216

 

 

 

87

 

 

 

—

 

 

 

22,303

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total held-to-maturity securities

 

$

494,297

 

 

$

87

 

 

$

(15,082

)

 

$

479,302

 

 

$

934

 

 

$

—

 

 

$

(20

)

 

$

914

 

 

 

(1)
Comprised of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Ginnie Mae (“GNMA”) issued securities.

 

 

 

 

 

9

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Loan Portfolio

 

 

 

As of

 

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

 

 

(Dollars in thousands)

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor Owned

 

$

336,667

 

 

 

23.79

%

 

$

321,671

 

 

 

24.02

%

 

$

323,442

 

 

 

24.59

%

 

$

317,304

 

 

 

24.01

%

 

$

319,346

 

 

 

24.14

%

Owner-Occupied

 

 

112,749

 

 

 

7.97

%

 

 

100,048

 

 

 

7.47

%

 

 

95,234

 

 

 

7.24

%

 

 

96,947

 

 

 

7.33

%

 

 

97,493

 

 

 

7.37

%

Multifamily residential

 

 

421,917

 

 

 

29.81

%

 

 

396,470

 

 

 

29.60

%

 

 

368,133

 

 

 

27.98

%

 

 

348,300

 

 

 

26.34

%

 

 

317,575

 

 

 

24.01

%

Nonresidential properties

 

 

282,642

 

 

 

19.97

%

 

 

279,877

 

 

 

20.90

%

 

 

251,893

 

 

 

19.14

%

 

 

239,691

 

 

 

18.13

%

 

 

211,075

 

 

 

15.96

%

Construction and land

 

 

197,437

 

 

 

13.95

%

 

 

165,425

 

 

 

12.35

%

 

 

144,881

 

 

 

11.01

%

 

 

134,651

 

 

 

10.19

%

 

 

133,130

 

 

 

10.07

%

Total mortgage loans

 

 

1,351,412

 

 

 

95.49

%

 

 

1,263,491

 

 

 

94.34

%

 

 

1,183,583

 

 

 

89.96

%

 

 

1,136,893

 

 

 

86.00

%

 

 

1,078,619

 

 

 

81.55

%

Non-mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business loans (1)

 

 

41,398

 

 

 

2.92

%

 

 

45,720

 

 

 

3.41

%

 

 

100,253

 

 

 

7.62

%

 

 

150,512

 

 

 

11.38

%

 

 

207,859

 

 

 

15.72

%

Consumer loans (2)

 

 

22,563

 

 

 

1.59

%

 

 

30,198

 

 

 

2.25

%

 

 

31,899

 

 

 

2.42

%

 

 

34,693

 

 

 

2.62

%

 

 

36,095

 

 

 

2.73

%

Total non-mortgage loans

 

 

63,961

 

 

 

4.51

%

 

 

75,918

 

 

 

5.66

%

 

 

132,152

 

 

 

10.04

%

 

 

185,205

 

 

 

14.00

%

 

 

243,954

 

 

 

18.45

%

Total loans, gross

 

 

1,415,373

 

 

 

100.00

%

 

 

1,339,409

 

 

 

100.00

%

 

 

1,315,735

 

 

 

100.00

%

 

 

1,322,098

 

 

 

100.00

%

 

 

1,322,573

 

 

 

100.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net deferred loan origination costs

 

 

2,288

 

 

 

 

 

 

2,446

 

 

 

 

 

 

1,604

 

 

 

 

 

 

(668

)

 

 

 

 

 

(4,327

)

 

 

 

Allowance for losses on loans

 

 

(25,108

)

 

 

 

 

 

(17,535

)

 

 

 

 

 

(16,893

)

 

 

 

 

 

(16,352

)

 

 

 

 

 

(16,008

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net

 

$

1,392,553

 

 

 

 

 

$

1,324,320

 

 

 

 

 

$

1,300,446

 

 

 

 

 

$

1,305,078

 

 

 

 

 

$

1,302,238

 

 

 

 

 

(1)
As of September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, business loans include $24.7 million, $30.8 million, $86.0 million, $136.8 million and $195.9 million, respectively, of PPP loans.
(2)
As of September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, consumer loans include $21.5 million, $28.3 million, $31.0 million, $33.9 million and $35.5 million, respectively, of loans originated by the Bank pursuant to its arrangement with Grain.

 

 

10

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Grain Loan Exposure

 

Grain Technologies, Inc. ("Grain") Total Exposure as of September 30, 2022

 

(in thousands)

 

Receivable from Grain

 

 

 

Microloans originated - put back to Grain (inception-to-September 30, 2022)

 

$

25,467

 

Write-downs (year to date as of September 30, 2022)

 

 

(17,455

)

Cash receipts from Grain (inception-to-September 30, 2022)

 

 

(6,186

)

Grant/reserve

 

 

(1,826

)

Net receivable as of September 30, 2022

 

$

—

 

Microloan receivables

 

 

 

Grain originated loans receivable as of September 30, 2022

 

$

21,507

 

Allowance for loan losses as of September 30, 2022 *

 

 

(8,213

)

Microloans, net of allowance for loan losses as of September 30, 2022

 

$

13,294

 

Investments

 

 

 

Investment in Grain as of June 30, 2022

 

$

1,000

 

Investment in Grain write-off in Q3 2022

 

 

(1,000

)

Investment in Grain as of September 30, 2022

 

 

—

 

Total exposure to Grain as of September 30, 2022

 

$

13,294

 

 

* Includes $460,000 for allowance for unused commitments on the $15.3 million of unused commitments available to Grain borrowers reported in other liabilities in the accompanying Consolidated Statements of Financial Conditions

 

 

11

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Allowance for Loan Losses

 

 

For the Three Months Ended

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

 

(Dollars in thousands)

 

Allowance for loan losses at beginning of the period

$

17,535

 

 

$

16,893

 

 

$

16,352

 

 

$

16,008

 

 

$

15,875

 

Provision for loan losses

 

9,330

 

 

 

817

 

 

 

1,258

 

 

 

873

 

 

 

572

 

Charge-offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residences

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor owned

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Owner occupied

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Multifamily residences

 

—

 

 

 

—

 

 

 

—

 

 

 

(38

)

 

 

—

 

Nonresidential properties

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction and land

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Non-mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer

 

(1,799

)

 

 

(450

)

 

 

(751

)

 

 

(560

)

 

 

(510

)

Total charge-offs

 

(1,799

)

 

 

(450

)

 

 

(751

)

 

 

(598

)

 

 

(510

)

Recoveries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residences

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor owned

 

—

 

 

 

156

 

 

 

—

 

 

 

8

 

 

 

—

 

Owner occupied

 

39

 

 

 

—

 

 

 

—

 

 

 

45

 

 

 

—

 

Multifamily residences

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonresidential properties

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction and land

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Non-mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

1

 

 

 

91

 

 

 

2

 

 

 

15

 

 

 

69

 

Consumer

 

2

 

 

 

28

 

 

 

32

 

 

 

1

 

 

 

2

 

Total recoveries

 

42

 

 

 

275

 

 

 

34

 

 

 

69

 

 

 

71

 

Net (charge-offs) recoveries

 

(1,757

)

 

 

(175

)

 

 

(717

)

 

 

(529

)

 

 

(439

)

Allowance for loan losses at end of the period

$

25,108

 

 

$

17,535

 

 

$

16,893

 

 

$

16,352

 

 

$

16,008

 

 

 

12

 

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Deposits

 

 

 

As of

 

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

 

 

(Dollars in thousands)

 

Demand

 

$

288,654

 

 

 

21.37

%

 

$

284,462

 

 

 

24.77

%

 

$

281,132

 

 

 

23.81

%

 

$

274,956

 

 

 

22.83

%

 

$

297,777

 

 

 

23.85

%

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW/IOLA accounts

 

 

28,799

 

 

 

2.13

%

 

 

28,597

 

 

 

2.49

%

 

 

33,010

 

 

 

2.79

%

 

 

35,280

 

 

 

2.93

%

 

 

28,025

 

 

 

2.24

%

Money market accounts

 

 

360,293

 

 

 

26.66

%

 

 

181,156

 

 

 

15.77

%

 

 

169,847

 

 

 

14.38

%

 

 

186,893

 

 

 

15.51

%

 

 

199,758

 

 

 

15.99

%

Reciprocal deposits

 

 

162,858

 

 

 

12.05

%

 

 

151,264

 

 

 

13.17

%

 

 

160,510

 

 

 

13.59

%

 

 

143,221

 

 

 

11.89

%

 

 

147,226

 

 

 

11.79

%

Savings accounts

 

 

140,055

 

 

 

10.37

%

 

 

139,244

 

 

 

12.12

%

 

 

133,966

 

 

 

11.34

%

 

 

134,887

 

 

 

11.20

%

 

 

142,851

 

 

 

11.43

%

Total NOW, money market, reciprocal and savings accounts

 

 

692,005

 

 

 

51.21

%

 

 

500,261

 

 

 

43.55

%

 

 

497,333

 

 

 

42.10

%

 

 

500,281

 

 

 

41.53

%

 

 

517,860

 

 

 

41.45

%

Certificates of deposit of $250K or more

 

 

61,900

 

 

 

4.58

%

 

 

65,157

 

 

 

5.67

%

 

 

75,130

 

 

 

6.36

%

 

 

78,454

 

 

 

6.51

%

 

 

70,996

 

 

 

5.68

%

Brokered certificates of deposit (1)

 

 

98,760

 

 

 

7.31

%

 

 

62,650

 

 

 

5.45

%

 

 

79,282

 

 

 

6.71

%

 

 

79,320

 

 

 

6.58

%

 

 

83,505

 

 

 

6.68

%

Listing service deposits (1)

 

 

40,964

 

 

 

3.03

%

 

 

48,953

 

 

 

4.26

%

 

 

53,876

 

 

 

4.56

%

 

 

66,411

 

 

 

5.51

%

 

 

66,340

 

 

 

5.31

%

All other certificates of deposit less than $250K

 

 

168,906

 

 

 

12.50

%

 

 

187,245

 

 

 

16.30

%

 

 

194,412

 

 

 

16.46

%

 

 

205,294

 

 

 

17.04

%

 

 

212,783

 

 

 

17.03

%

Total certificates of deposit

 

 

370,530

 

 

 

27.42

%

 

 

364,005

 

 

 

31.68

%

 

 

402,700

 

 

 

34.09

%

 

 

429,479

 

 

 

35.64

%

 

 

433,624

 

 

 

34.70

%

Total interest-bearing deposits

 

 

1,062,535

 

 

 

78.63

%

 

 

864,266

 

 

 

75.23

%

 

 

900,033

 

 

 

76.19

%

 

 

929,760

 

 

 

77.17

%

 

 

951,484

 

 

 

76.15

%

Total deposits

 

$

1,351,189

 

 

 

100.00

%

 

$

1,148,728

 

 

 

100.00

%

 

$

1,181,165

 

 

 

100.00

%

 

$

1,204,716

 

 

 

100.00

%

 

$

1,249,261

 

 

 

100.00

%
(1)
As of September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, and September 30, 2021, there were $13.8 million, $18.5 million, $19.0 million, $29.0 million, and $28.9 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.

 

 

13

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Nonperforming Assets

 

 

As of Three Months Ended

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

 

(Dollars in thousands)

 

Non-accrual loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor owned

$

5,902

 

 

$

3,460

 

 

$

3,596

 

 

$

3,349

 

 

$

1,669

 

Owner occupied

 

971

 

 

 

1,140

 

 

 

962

 

 

 

1,284

 

 

 

1,090

 

Multifamily residential

 

—

 

 

 

—

 

 

 

—

 

 

 

1,200

 

 

 

2,577

 

Nonresidential properties

 

778

 

 

 

1,162

 

 

 

1,166

 

 

 

2,163

 

 

 

1,388

 

Construction and land

 

10,660

 

 

 

10,817

 

 

 

7,567

 

 

 

917

 

 

 

922

 

Non-mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

359

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total non-accrual loans (not including non-accruing troubled debt restructured loans)

$

18,670

 

 

$

16,579

 

 

$

13,291

 

 

$

8,913

 

 

$

7,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accruing troubled debt restructured loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor owned

$

221

 

 

$

224

 

 

$

230

 

 

$

234

 

 

$

238

 

Owner occupied

 

2,215

 

 

 

1,746

 

 

 

2,192

 

 

 

2,196

 

 

 

2,200

 

Multifamily residential

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonresidential properties

 

95

 

 

 

96

 

 

 

98

 

 

 

100

 

 

 

101

 

Construction and land

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Non-mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total non-accruing troubled debt restructured loans

 

2,531

 

 

 

2,066

 

 

 

2,520

 

 

 

2,530

 

 

 

2,539

 

Total non-accrual loans

$

21,201

 

 

$

18,645

 

 

$

15,811

 

 

$

11,443

 

 

$

10,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing troubled debt restructured loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor owned

$

2,228

 

 

$

2,246

 

 

$

2,269

 

 

$

3,089

 

 

$

3,121

 

Owner occupied

 

1,254

 

 

 

2,019

 

 

 

2,313

 

 

 

2,374

 

 

 

2,396

 

Multifamily residential

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonresidential properties

 

715

 

 

 

725

 

 

 

726

 

 

 

732

 

 

 

738

 

Construction and land

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Non-mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total accruing troubled debt restructured loans

$

4,197

 

 

$

4,990

 

 

$

5,308

 

 

$

6,195

 

 

$

6,255

 

Total non-performing assets and accruing troubled debt restructured loans

$

25,398

 

 

$

23,635

 

 

$

21,119

 

 

$

17,638

 

 

$

16,440

 

Total non-performing loans to total gross loans

 

1.50

%

 

 

1.39

%

 

 

1.20

%

 

 

0.87

%

 

 

0.77

%

Total non-performing assets to total assets

 

0.98

%

 

 

0.91

%

 

 

0.99

%

 

 

0.69

%

 

 

0.65

%

Total non-performing assets and accruing troubled debt restructured loans to total assets

 

1.18

%

 

 

1.16

%

 

 

1.32

%

 

 

1.07

%

 

 

1.05

%

 

 

14

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Average Balance Sheets

 

 

For the Three Months Ended September 30,

 

2022

 

2021

 

Average

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

Outstanding

 

 

 

 

 

Average

 

Outstanding

 

 

 

 

 

Average

 

Balance

 

 

Interest

 

 

Yield/Rate (1)

 

Balance

 

 

Interest

 

 

Yield/Rate (1)

 

(Dollars in thousands)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (2)

$

1,379,029

 

 

$

17,058

 

 

4.91%

 

$

1,356,130

 

 

$

16,991

 

 

4.97%

Securities (3)

 

492,337

 

 

 

4,153

 

 

3.35%

 

 

72,960

 

 

 

355

 

 

1.93%

Other (4)

 

57,646

 

 

 

423

 

 

2.91%

 

 

53,182

 

 

 

79

 

 

0.59%

Total interest-earning assets

 

1,929,012

 

 

 

21,634

 

 

4.45%

 

 

1,482,272

 

 

 

17,425

 

 

4.66%

Non-interest-earning assets

 

124,738

 

 

 

 

 

 

 

 

90,110

 

 

 

 

 

 

Total assets

$

2,053,750

 

 

 

 

 

 

 

$

1,572,382

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW/IOLA

$

29,939

 

 

$

13

 

 

0.17%

 

$

30,221

 

 

$

23

 

 

0.30%

Money market

 

409,947

 

 

 

1,471

 

 

1.42%

 

 

323,840

 

 

 

294

 

 

0.36%

Savings

 

141,200

 

 

 

57

 

 

0.16%

 

 

137,078

 

 

 

36

 

 

0.10%

Certificates of deposit

 

353,822

 

 

 

687

 

 

0.77%

 

 

448,191

 

 

 

1,010

 

 

0.89%

Total deposits

 

934,908

 

 

 

2,228

 

 

0.95%

 

 

939,330

 

 

 

1,363

 

 

0.58%

Advance payments by borrowers

 

10,918

 

 

 

2

 

 

0.07%

 

 

10,061

 

 

 

1

 

 

0.04%

Borrowings

 

250,112

 

 

 

1,793

 

 

2.84%

 

 

117,824

 

 

 

621

 

 

2.09%

Total interest-bearing liabilities

 

1,195,938

 

 

 

4,023

 

 

1.33%

 

 

1,067,215

 

 

 

1,985

 

 

0.74%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand

 

321,556

 

 

 

—

 

 

 

 

 

317,727

 

 

 

—

 

 

 

Other non-interest-bearing liabilities

 

16,377

 

 

 

—

 

 

 

 

 

10,154

 

 

 

—

 

 

 

Total non-interest-bearing liabilities

 

337,933

 

 

 

—

 

 

 

 

 

327,881

 

 

 

—

 

 

 

Total liabilities

 

1,533,871

 

 

 

4,023

 

 

 

 

 

1,395,096

 

 

 

1,985

 

 

 

Total equity

 

519,879

 

 

 

 

 

 

 

 

177,286

 

 

 

 

 

 

Total liabilities and total equity

$

2,053,750

 

 

 

 

 

1.33%

 

$

1,572,382

 

 

 

 

 

0.74%

Net interest income

 

 

 

$

17,611

 

 

 

 

 

 

 

$

15,440

 

 

 

Net interest rate spread (5)

 

 

 

 

 

 

3.12%

 

 

 

 

 

 

 

3.92%

Net interest-earning assets (6)

$

733,074

 

 

 

 

 

 

 

$

415,057

 

 

 

 

 

 

Net interest margin (7)

 

 

 

 

 

 

3.62%

 

 

 

 

 

 

 

4.13%

Average interest-earning assets to interest-bearing liabilities

 

 

 

 

 

 

161.30%

 

 

 

 

 

 

 

138.89%

 

 

(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 and FHLBNY stock dividends.
(5)
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.
(6)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(7)
Net interest margin represents net interest income divided by average total interest-earning assets.

 

 

15

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Average Balance Sheets

 

 

 

For the Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

Average

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

Outstanding

 

 

 

 

 

Average

 

 

Outstanding

 

 

 

 

 

Average

 

 

Balance

 

 

Interest

 

 

Yield/Rate (1)

 

 

Balance

 

 

Interest

 

 

Yield/Rate

 

 

(Dollars in thousands)

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (2)

$

1,341,151

 

 

$

51,315

 

 

 

5.12

%

 

$

1,309,765

 

 

$

47,519

 

 

 

4.85

%

Securities (3)

 

263,421

 

 

 

5,778

 

 

 

2.93

%

 

 

45,749

 

 

 

701

 

 

 

2.05

%

Other (4)

 

45,940

 

 

 

726

 

 

 

2.11

%

 

 

53,425

 

 

 

226

 

 

 

0.57

%

Total interest-earning assets

 

1,650,512

 

 

 

57,819

 

 

 

4.68

%

 

 

1,408,939

 

 

 

48,446

 

 

 

4.60

%

Non-interest-earning assets

 

187,333

 

 

 

 

 

 

 

 

 

73,493

 

 

 

 

 

 

 

Total assets

$

1,837,845

 

 

 

 

 

 

 

 

$

1,482,432

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW/IOLA

$

31,769

 

 

$

43

 

 

 

0.18

%

 

$

31,215

 

 

$

93

 

 

 

0.40

%

Money market

 

356,576

 

 

 

2,180

 

 

 

0.82

%

 

 

300,594

 

 

 

909

 

 

 

0.40

%

Savings

 

137,808

 

 

 

120

 

 

 

0.12

%

 

 

131,849

 

 

 

113

 

 

 

0.11

%

Certificates of deposit

 

386,446

 

 

 

2,167

 

 

 

0.75

%

 

 

428,653

 

 

 

3,337

 

 

 

1.04

%

Total deposits

 

912,599

 

 

 

4,510

 

 

 

0.66

%

 

 

892,311

 

 

 

4,452

 

 

 

0.67

%

Advance payments by borrowers

 

11,033

 

 

 

5

 

 

 

0.06

%

 

 

10,020

 

 

 

3

 

 

 

0.04

%

Borrowings

 

152,084

 

 

 

2,867

 

 

 

2.52

%

 

 

122,203

 

 

 

1,927

 

 

 

2.11

%

Total interest-bearing liabilities

 

1,075,716

 

 

 

7,382

 

 

 

0.92

%

 

 

1,024,534

 

 

 

6,382

 

 

 

0.83

%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand

 

350,871

 

 

 

—

 

 

 

 

 

 

275,865

 

 

 

—

 

 

 

 

Other non-interest-bearing liabilities

 

43,606

 

 

 

—

 

 

 

 

 

 

12,182

 

 

 

—

 

 

 

 

Total non-interest-bearing liabilities

 

394,477

 

 

 

—

 

 

 

 

 

 

288,047

 

 

 

—

 

 

 

 

Total liabilities

 

1,470,193

 

 

 

7,382

 

 

 

 

 

 

1,312,581

 

 

 

6,382

 

 

 

 

Total equity

 

367,652

 

 

 

 

 

 

 

 

 

169,851

 

 

 

 

 

 

 

Total liabilities and total equity

$

1,837,845

 

 

 

 

 

 

0.92

%

 

$

1,482,432

 

 

 

 

 

 

0.83

%

Net interest income

 

 

 

$

50,437

 

 

 

 

 

 

 

 

$

42,064

 

 

 

 

Net interest rate spread (5)

 

 

 

 

 

 

 

3.76

%

 

 

 

 

 

 

 

 

3.77

%

Net interest-earning assets (6)

$

574,796

 

 

 

 

 

 

 

 

$

384,405

 

 

 

 

 

 

 

Net interest margin (7)

 

 

 

 

 

 

 

4.09

%

 

 

 

 

 

 

 

 

3.99

%

Average interest-earning assets to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

interest-bearing liabilities

 

 

 

 

 

 

 

153.43

%

 

 

 

 

 

 

 

 

137.52

%

 

 

(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 and FHLBNY stock dividends.
(5)
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.
(6)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(7)
Net interest margin represents net interest income divided by average total interest-earning assets.

 

 

16

 

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Other Data

 

 

As of

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares issued

 

24,728,460

 

 

 

24,724,274

 

 

 

24,724,274

 

 

 

18,463,028

 

 

 

18,463,028

 

Less treasury shares

 

—

 

 

 

—

 

 

 

—

 

 

 

1,037,041

 

 

 

1,132,086

 

Common shares outstanding at end of period

 

24,728,460

 

 

 

24,724,274

 

 

 

24,724,274

 

 

 

17,425,987

 

 

 

17,330,942

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share

$

11.15

 

 

$

11.85

 

 

$

12.12

 

 

$

10.86

 

 

$

10.03

 

Tangible book value per common share

$

11.15

 

 

$

11.85

 

 

$

12.12

 

 

$

10.86

 

 

$

10.03

 

 

 

 

17