• Ponce Financial Group, Inc. Reports First Quarter 2024 Results

    Source: Nasdaq GlobeNewswire / 30 Apr 2024 16:11:43   America/Chicago

    NEW YORK, April 30, 2024 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), today announced results for the first quarter of 2024.

    First Quarter 2024 Highlights (Compared to Prior Periods):

    • Net income of $2.4 million, or $0.11 per diluted share for the three months ended March 31, 2024, as compared to net income of $0.5 million, or $0.02 per diluted share for the three months ended December 31, 2023 and net income of $0.3 million, or $0.01 per diluted share for the three months ended March 31, 2023.
    • Included in the $2.4 million of net income for the first quarter of 2024 results is $39.7 million in interest and dividend income, $1.7 million in non-interest income and $0.2 million in benefit for credit losses, offset by $20.8 million in interest expense and $17.0 million in non-interest expense.
    • Net interest income of $18.8 million for the first quarter of 2024 increased $1.6 million, or 9.46%, from the prior quarter and increased $3.6 million, or 23.47%, from the same quarter last year.
    • Net interest margin was 2.71% for the first quarter of 2024, increased from 2.66% for the prior quarter and decreased from 2.75% for the same quarter last year.
    • Non-interest income for the three months ended March 31, 2024 was $1.7 million, increased $0.4 million, or 32.84%, from $1.3 million for the three months ended December 31, 2023 and decreased $0.1 million, or 6.16%, from $1.8 million for the three months ended March 31, 2023.
    • Non-interest expense for the three months ended March 31, 2024 was $17.0 million, decreased $0.9 million, or 5.29%, compared to $17.9 million for the three months ended December 31, 2023 and increased $0.6 million, or 3.60% compared to $16.4 million for the three months ended March 31, 2023.
    • Cash and equivalents were $134.7 million as of March 31, 2024, decreased $4.5 million, or 3.21%, from December 31, 2023.
    • Securities totaled $569.0 million as of March 31, 2024, decreased $12.7 million, or 2.18%, from December 31, 2023 primarily due to regular principal payments.
    • Net loans receivable were $1.98 billion as of March 31, 2024, increased $85.5 million, or 4.51%, from December 31, 2023.
    • Deposits were $1.59 billion as of March 31, 2024, increased $78.2 million, or 5.18%, from December 31, 2023.

    President and Chief Executive Officer’s Comments

    Carlos P. Naudon, Ponce Financial Group’s President and CEO, stated “Despite the challenging operating environment, we continue to make progress: net interest income grew for the fourth quarter in a row, and net interest margin grew for the second quarter in a row. Book value per share is now $11.29 (up $0.39 vs last year) and total equity per share stands at $20.75. We’re also making progress on the expense side and have reduced headcount by 7% year over year. We continue to show strong levels of capital and liquidity. On the capital front, our total capital ratio at Ponce Bank stands at 23.33%, well in excess of regulatory requirements. In terms of liquidity, our liquid assets plus borrowing capacity at the Federal Home Loan Bank of New York ("FHLBNY") stands at $724.1 million, approximately 1.7 times of our uninsured deposits of $416.9 million. We remain committed to the communities we serve, our Minority Depository Institution (“MDI”)/Community Development Financial Institutions ("CDFI") status and continuing to invest in our people and in technology to improve our efficiency."

    Executive Chairman’s Comment

    Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman added “We continue to grow both loans and deposits while maintaining credit quality. While we see resiliency in our client base, our prudent approach might result in lower growth in the coming quarters as we prioritize sound underwriting practices and balance sheet management over loan growth.” 

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

      At or for the Three Months Ended 
      March 31,  December 31,  September 30,  June 30,  March 31, 
    Performance Ratios (Annualized): 2024  2023  2023  2023  2023 
    Return on average assets (1)  0.33%  0.08%  0.39%  (0.01%)  0.06%
    Return on average equity (1)  1.97%  0.42%  2.11%  (0.07%)  0.27%
    Net interest rate spread (1) (2)  1.82%  1.74%  1.68%  1.75%  1.88%
    Net interest margin (1) (3)  2.71%  2.66%  2.58%  2.65%  2.75%
    Non-interest expense to average assets (1)  2.35%  2.66%  2.58%  2.65%  2.79%
    Efficiency ratio (4)  82.56%  96.83%  78.11%  96.15%  95.88%
    Average interest-earning assets to average interest- bearing liabilities  129.69%  133.50%  134.49%  137.67%  143.62%
    Average equity to average assets  17.00%  18.25%  18.32%  19.21%  20.91%


      At or for the Three Months Ended 
      March 31,  December 31,  September 30,  June 30,  March 31, 
    Capital Ratios (Annualized): 2024  2023  2023  2023  2023 
    Total capital to risk-weighted assets (Bank only)  22.79%  23.30%  25.10%  26.30%  27.54%
    Tier 1 capital to risk-weighted assets (Bank only)  21.54%  22.05%  23.85%  25.05%  26.28%
    Common equity Tier 1 capital to risk-weighted assets (Bank only)  21.54%  22.05%  23.85%  25.05%  26.28%
    Tier 1 capital to average assets (Bank only)  16.26%  17.49%  17.51%  17.95%  19.51%


      At or for the Three Months Ended 
      March 31,  December 31,  September 30,  June 30,  March 31, 
    Asset Quality Ratios (Annualized): 2024  2023  2023  2023  2023 
    Allowance for loan losses as a percentage of total loans  1.23%  1.36%  1.51%  1.64%  1.77%
    Allowance for loan losses as a percentage of nonperforming loans  140.90%  152.99%  169.49%  167.06%  149.73%
    Net (charge-offs) recoveries to average outstanding loans (1)  (0.25%)  (0.24%)  (0.34%)  (0.41%)  (0.57%)
    Non-performing loans as a percentage of total gross loans  0.87%  0.89%  0.89%  0.98%  1.18%
    Non-performing loans as a percentage of total assets  0.62%  0.62%  0.62%  0.63%  0.76%
    Total non-performing assets as a percentage of total assets  0.62%  0.62%  0.62%  0.63%  0.76%
    Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5)  0.79%  0.81%  0.82%  0.83%  0.93%
     

    (1)  Annualized where appropriate.
    (2)  Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
    (3)  Net interest margin represents net interest income divided by average total interest-earning assets.
    (4)  Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
    (5)  Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.

    Summary of Results of Operations

    Net income for the three months ended March 31, 2024 was $2.4 million compared to net income of $0.5 million for the three months ended December 31, 2023 and net income of $0.3 million for the three months ended March 31, 2023.

    The increase of net income for the three months ended March 31, 2024 compared to the three months ended December 31, 2023 was attributed mainly to an increase in net interest income, a decrease in non-interest expense and an increase in non-interest income, partially offset by an increase in provision for income taxes and a decrease in benefit for credit losses.

    The increase of net income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was largely due to increases in net interest income, partially offset by increases in provision for income taxes and non-interest expense and a decrease in non-interest income.

    Net Interest Income and Net Margin

    Net interest income for the three months ended March 31, 2024, increased $1.6 million, or 9.46%, to $18.8 million compared to $17.2 million for the three months ended December 31, 2023 and increased $3.6 million, or 23.47%, compared to $15.2 million for the three months ended March 31, 2023. Included in this increase was a recovery of $1.0 million in interest income from a construction loan that was previously nonperforming.

    For the three months ended March 31, 2024, benefit for credit losses amounted to $0.2 million consists of a benefit for credit losses on loans in the amount of $0.3 million and a provision on credit losses on held-to-maturity securities in the amount of $0.1 million. The $0.3 million benefit for credit losses on loans for the three months ended March 31, 2024 resulted from a benefit of $0.8 million related to micro loans originated by Grain and a provision of $0.5 million related to non-micro loans.

    Net interest margin was 2.71% for the three months ended March 31, 2024 compared to 2.66% for the prior quarter, an increase of 5bps and 2.75% for the same period last year, a decrease of 4bps. The decrease in net interest margin for the three months ended March 31, 2024 when compared to the same period last year was a result of an increase in the cost of funds driven by higher interest rates.

    Non-interest Income

    Non-interest income for the three months ended March 31, 2024, was $1.7 million, an increase of $0.4 million, or 32.84%, compared to the three months ended December 31, 2023 and a decrease of $0.1 million, or 6.16%, compared to the three months ended March 31, 2023.

    The $0.4 million increase in non-interest income for the three months ended March 31, 2024 compared to the three months ended December 31, 2023 was largely attributable to an increase of $0.8 million in other non-interest income partially offset by a grant of $0.4 million received in the fourth quarter of 2023 from the U.S. Treasury. No grants were received in the first quarter of 2024.

    The $0.1 million decrease in non-interest income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was largely attributable to a decrease of $0.4 million in late and prepayment charges, partially offset by increases of $0.2 million in income on sale of mortgage loans and $0.1 million in other non-interest income.

    Non-interest Expense

    Non-interest expense for the three months ended March 31, 2024, was $17.0 million, a decrease of $0.9 million, or 5.29%, compared to $17.9 million for the three months ended December 31, 2023 and an increase of $0.6 million, or 3.60%, compared to $16.4 million for the three months ended March 31, 2023.

    The $0.9 million decrease from the three months ended December 31, 2023 was mainly attributable to decreases of $0.4 million in compensation and benefits, $0.3 million in provision for contingencies, $0.3 million in professional fees and $0.2 million in other operating expense, partially offset by an increase of $0.3 million in direct loan expense.

    The $0.6 million increase from the three months ended March 31, 2023 was mainly attributable to a decrease of $0.9 million in Grain recoveries, increases of $0.4 million in compensation and benefits, $0.3 million in direct loan expenses and $0.3 million in professional fees, partially offset by decreases of $0.8 million in provision for contingencies, $0.3 million in other operating expense  and $0.2 million in office supplies, telephone and postage.

    Balance Sheet Summary

    Total assets increased $68.0 million, or 2.47%, to $2.82 billion as of March 31, 2024 from $2.75 billion as of December 31, 2023.  The increase in total assets is largely attributable to increases of $85.5 million in net loans receivable, $4.5 million in Federal Home Loan Bank of New York stock and $1.3 million in premises and equipment, partially offset by decreases of $8.8 million in held-to-maturity securities, $4.5 million in cash and cash equivalents, $3.9 million in available-for-sale securities. $3.6 million in other assets and $2.1 million in mortgage loans held for sale.

    Total liabilities increased $65.7 million, or 2.91%, to $2.33 billion as of March 31, 2024 from $2.26 billion as of December 31, 2023. The increase in total liabilities was largely attributable to increases of $78.2 million in deposits and $2.5 million in advance payments by borrowers for taxes and insurance, partially offset by decreases of $7.7 million in accrued interest payable, $4.0 million in borrowings and $3.0 million in other liabilities.

    Total stockholders’ equity increased $2.3 million, or 0.47%, to $493.7 million as of March 31, 2024, from $491.4 million as of December 31, 2023. This increase in stockholders’ equity was largely attributable to $2.4 million in net income, $0.5 million impact to additional paid in capital as a result of share-based compensation and $0.3 million from release of ESOP shares, offset by $0.9 million in other comprehensive loss.

    About Ponce Financial Group, Inc.

    Ponce Financial Group, Inc. is the holding company for Ponce Bank. Ponce Bank is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank’s business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those funds, together with funds generated from operations and borrowings, in mortgage loans, consisting of 1-4 family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties, construction and land, and, to a lesser extent, in business and consumer loans. Ponce Bank also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises, as well as, mortgage-backed securities, corporate bonds and obligations, and Federal Home Loan Bank stock.

    Forward Looking Statements

    Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which Ponce Bank operates, including changes that adversely affect borrowers’ ability to service and repay Ponce Bank’s loans; anticipated losses with respect to the Company's investment in Grain; changes in the value of securities in the investment portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; changes in government regulation; changes in accounting standards and practices; the risk that intangibles recorded in the financial statements will become impaired; demand for loans in Ponce Bank’s market area; Ponce Bank’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that Ponce Financial Group, Inc. may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in Ponce Financial Group, Inc.’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Ponce Financial Group, Inc. disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as may be required by applicable law or regulation.


    Ponce Financial Group, Inc. and Subsidiaries
    Consolidated Statements of Financial Condition
    (Dollars in thousands, except for share data)

                   
     As of 
     March 31,  December 31,  September 30,  June 30,  March 31, 
     2024  2023  2023  2023  2023 
    ASSETS              
    Cash and due from banks:              
    Cash$29,972  $28,930  $26,046  $31,162  $26,951 
    Interest-bearing deposits 104,752   110,260   90,966   212,627   157,736 
    Total cash and cash equivalents 134,724   139,190   117,012   243,789   184,687 
    Available-for-sale securities, at fair value 116,044   119,902   116,753   123,720   128,320 
    Held-to-maturity securities, at amortized cost 452,955   461,748   471,065   481,952   491,649 
    Placement with banks 249   249   996   996   1,245 
    Mortgage loans held for sale, at fair value 7,860   9,980   14,103   10,070   2,987 
    Loans receivable, net 1,981,428   1,895,886   1,787,607   1,695,047   1,614,428 
    Accrued interest receivable 18,063   18,010   16,624   16,054   15,435 
    Premises and equipment, net 17,396   16,053   16,453   16,856   17,215 
    Right of use assets 31,021   31,272   32,110   32,435   33,147 
    Federal Home Loan Bank of New York stock (FHLBNY), at cost 23,892   19,377   18,870   19,195   19,209 
    Deferred tax assets 13,919   14,332   15,984   15,924   15,413 
    Other assets 21,151   24,723   16,286   15,919   15,799 
    Total assets$2,818,702  $2,750,722  $2,623,863  $2,671,957  $2,539,534 
    LIABILITIES AND STOCKHOLDERS' EQUITY              
    Liabilities:              
    Deposits$1,585,784  $1,507,620  $1,401,132  $1,442,013  $1,336,877 
    Operating lease liabilities 32,486   32,684   33,459   33,716   34,308 
    Accrued interest payable 4,218   11,965   8,385   4,704   1,767 
    Advance payments by borrowers for taxes and insurance 13,245   10,778   13,743   12,402   14,902 
    Borrowings 680,421   684,421   675,100   682,100   648,375 
    Other liabilities 8,866   11,859   6,986   6,540   7,264 
    Total liabilities 2,325,020   2,259,327   2,138,805   2,181,475   2,043,493 
    Commitments and contingencies              
    Stockholders' Equity:              
    Preferred stock, $0.01 par value; 100,000,000 shares authorized 225,000   225,000   225,000   225,000   225,000 
    Common stock, $0.01 par value; 200,000,000 shares authorized 249   249   249   249   249 
    Treasury stock, at cost (9,702)  (9,747)  (10,975)  (5,202)  (2)
    Additional paid-in-capital 207,584   207,106   207,626   207,287   206,883 
    Retained earnings 99,834   97,420   96,902   94,312   94,399 
    Accumulated other comprehensive loss (16,590)  (15,649)  (20,468)  (17,597)  (16,629)
    Unearned compensation ─ ESOP (12,693)  (12,984)  (13,276)  (13,567)  (13,859)
    Total stockholders' equity 493,682   491,395   485,058   490,482   496,041 
    Total liabilities and stockholders' equity$2,818,702  $2,750,722  $2,623,863  $2,671,957  $2,539,534 
     


    Ponce Financial Group, Inc. and Subsidiaries

    Consolidated Statements of Operations
    (Dollars in thousands, except per share data)

      
     Three Months Ended 
     March 31,  December 31,  September 30,  June 30,  March 31, 
     2024  2023  2023  2023  2023 
    Interest and dividend income:              
    Interest on loans receivable$30,664  $27,814  $25,276  $23,015  $19,700 
    Interest on deposits due from banks 2,911   990   1,969   1,817   197 
    Interest and dividend on securities and FHLBNY stock 6,091   6,146   6,261   6,223   6,459 
    Total interest and dividend income 39,666   34,950   33,506   31,055   26,356 
    Interest expense:              
    Interest on certificates of deposit 6,380   5,103   4,362   3,881   3,225 
    Interest on other deposits 6,540   5,706   5,639   4,413   2,812 
    Interest on borrowings 7,923   6,944   6,963   6,479   5,074 
    Total interest expense 20,843   17,753   16,964   14,773   11,111 
    Net interest income 18,823   17,197   16,542   16,282   15,245 
    (Benefit) provision for credit losses (180)  (375)  535   987   (174)
    Net interest income after (benefit) provision for credit losses 19,003   17,572   16,007   15,295   15,419 
    Non-interest income:              
    Service charges and fees 473   498   516   481   491 
    Brokerage commissions 8   13   17   35   15 
    Late and prepayment charges 359   365   899   372   729 
    Income on sale of mortgage loans 302   244   173   82   99 
    Grant income    438   3,718       
    Other 565   (273)  304   522   485 
    Total non-interest income 1,707   1,285   5,627   1,492   1,819 
    Non-interest expense:              
    Compensation and benefits 7,844   8,262   7,566   7,425   7,446 
    Occupancy and equipment 3,667   3,686   3,588   3,724   3,570 
    Data processing expenses 1,127   1,101   1,582   1,208   1,192 
    Direct loan expenses 732   497   369   345   412 
    Provision for contingencies 164   418   391   517   985 
    Insurance and surety bond premiums 253   250   255   248   265 
    Office supplies, telephone and postage 249   294   301   489   399 
    Professional fees 1,723   2,040   1,693   1,904   1,455 
    Grain recoveries (53)  (152)  (69)  (346)  (914)
    Marketing and promotional expenses 100   146   248   303   128 
    Directors fees and regulatory assessment 179   173   169   160   155 
    Other operating expenses 965   1,182   1,223   1,112   1,268 
    Total non-interest expense 16,950   17,897   17,316   17,089   16,361 
    Income (loss) before income taxes 3,760   960   4,318   (302)  877 
    Provision (benefit) for income taxes 1,346   442   1,728   (215)  546 
    Net income (loss)$2,414  $518  $2,590  $(87) $331 
    Earnings per common share:              
    Basic$0.11  $0.02  $0.12  $(0.00) $0.01 
    Diluted$0.11  $0.02  $0.12  $(0.00) $0.01 
    Weighted average common shares outstanding:              
    Basic 22,353,492   22,224,945   22,272,076   23,208,168   23,293,013 
    Diluted 22,366,728   22,406,102   22,349,217   23,208,168   23,324,532 
     


    Ponce Financial Group, Inc. and Subsidiaries
    Consolidated Statements of Operations
    (Dollars in thousands, except per share data)

     
      For the Three Months Ended March 31, 
      2024  2023  Variance $  Variance
    %
     
    Interest and dividend income:            
    Interest on loans receivable $30,664  $19,700  $10,964   55.65%
    Interest on deposits due from banks  2,911   197   2,714   1,377.66%
    Interest and dividend on securities and FHLBNY stock  6,091   6,459   (368)  (5.70%)
    Total interest and dividend income  39,666   26,356   13,310   50.50%
    Interest expense:            
    Interest on certificates of deposit  6,380   3,225   3,155   97.83%
    Interest on other deposits  6,540   2,812   3,728   132.57%
    Interest on borrowings  7,923   5,074   2,849   56.15%
    Total interest expense  20,843   11,111   9,732   87.59%
    Net interest income  18,823   15,245   3,578   23.47%
    Benefit for credit losses  (180)  (174)  (6)  3.45%
    Net interest income after benefit for credit losses  19,003   15,419   3,584   23.24%
    Non-interest income:            
    Service charges and fees  473   491   (18)  (3.67%)
    Brokerage commissions  8   15   (7)  (46.67%)
    Late and prepayment charges  359   729   (370)  (50.75%)
    Income on sale of mortgage loans  302   99   203   205.05%
    Other  565   485   80   16.49%
    Total non-interest income  1,707   1,819   (112)  (6.16%)
    Non-interest expense:            
    Compensation and benefits  7,844   7,446   398   5.35%
    Occupancy and equipment  3,667   3,570   97   2.72%
    Data processing expenses  1,127   1,192   (65)  (5.45%)
    Direct loan expenses  732   412   320   77.67%
    Provision for contingencies  164   985   (821)  (83.35%)
    Insurance and surety bond premiums  253   265   (12)  (4.53%)
    Office supplies, telephone and postage  249   399   (150)  (37.59%)
    Professional fees  1,723   1,455   268   18.42%
    Grain recoveries  (53)  (914)  861   (94.20%)
    Marketing and promotional expenses  100   128   (28)  (21.88%)
    Directors fees and regulatory assessment  179   155   24   15.48%
    Other operating expenses  965   1,268   (303)  (23.90%)
    Total non-interest expense  16,950   16,361   589   3.60%
    Income before income taxes  3,760   877   2,883   328.73%
    Provision for income taxes  1,346   546   800   146.52%
    Net income $2,414  $331  $2,083   629.31%
    Earnings per common share:            
    Basic $0.11  $0.01  $0.09   659.96%
    Diluted $0.11  $0.01  $0.09   660.54%
    Weighted average common shares outstanding:            
    Basic  22,353,492   23,293,013   (939,521)  (4.03%)
    Diluted  22,366,728   23,324,532   (957,804)  (4.11%)
     


    Ponce Financial Group, Inc. and Subsidiaries

    Key Metrics

     
     At or for the Three Months Ended 
     March 31,  December 31,  September 30,  June 30,  March 31, 
     2024  2023  2023  2023  2023 
    Performance Ratios:              
    Return on average assets (1) 0.33%  0.08%  0.39%  (0.01%)  0.06%
    Return on average equity (1) 1.97%  0.42%  2.11%  (0.07%)  0.27%
    Net interest rate spread (1) (2) 1.82%  1.74%  1.68%  1.75%  1.88%
    Net interest margin (1) (3) 2.71%  2.66%  2.58%  2.65%  2.75%
    Non-interest expense to average assets (1) 2.35%  2.66%  2.58%  2.65%  2.79%
    Efficiency ratio (4) 82.56%  96.83%  78.11%  96.15%  95.88%
    Average interest-earning assets to average interest- bearing liabilities 129.69%  133.50%  134.49%  137.67%  143.62%
    Average equity to average assets 17.00%  18.25%  18.32%  19.21%  20.91%
    Capital Ratios:              
    Total capital to risk-weighted assets (Bank only) 22.79%  23.30%  25.10%  26.30%  27.54%
    Tier 1 capital to risk-weighted assets (Bank only) 21.54%  22.05%  23.85%  25.05%  26.28%
    Common equity Tier 1 capital to risk-weighted assets (Bank only) 21.54%  22.05%  23.85%  25.05%  26.28%
    Tier 1 capital to average assets (Bank only) 16.26%  17.49%  17.51%  17.95%  19.51%
    Asset Quality Ratios:              
    Allowance for credit losses on loans as a percentage of total loans 1.23%  1.36%  1.51%  1.64%  1.77%
    Allowance for credit losses on loans as a percentage of nonperforming loans 140.90%  152.99%  169.49%  167.06%  149.73%
    Net (charge-offs) recoveries to average outstanding loans (1) (0.25%)  (0.24%)  (0.34%)  (0.41%)  (0.57%)
    Non-performing loans as a percentage of total gross loans 0.87%  0.89%  0.89%  0.98%  1.18%
    Non-performing loans as a percentage of total assets 0.62%  0.62%  0.62%  0.63%  0.76%
    Total non-performing assets as a percentage of total assets 0.62%  0.62%  0.62%  0.63%  0.76%
    Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5) 0.79%  0.81%  0.82%  0.83%  0.93%
    Other:              
    Number of offices 18   18   19   19   19 
    Number of full-time equivalent employees 233   237   243   244   251 
                   

    (1)  Annualized where appropriate.
    (2)  Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
    (3)  Net interest margin represents net interest income divided by average total interest-earning assets.
    (4)  Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
    (5)  Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.


    Ponce Financial Group, Inc. and Subsidiaries
    Securities Portfolio

      March 31, 2024  December 31, 2023 
         Gross  Gross        Gross  Gross    
      Amortized  Unrealized  Unrealized     Amortized  Unrealized  Unrealized    
      Cost  Gains  Losses  Fair Value  Cost  Gains  Losses  Fair Value 
      (in thousands)  (in thousands) 
    Available-for-Sale Securities:                        
    U.S. Government Bonds $2,991  $  $(211) $2,780  $2,990  $  $(206) $2,784 
    Corporate Bonds  25,782      (2,262)  23,520   25,790      (2,122)  23,668 
    Mortgage-Backed Securities:                        
    Collateralized Mortgage Obligations (1)  38,183      (6,229)  31,954   39,375      (6,227)  33,148 
    FHLMC Certificates  9,903      (1,424)  8,479   10,163      (1,482)  8,681 
    FNMA Certificates  60,158      (10,948)  49,210   61,359      (9,842)  51,517 
    GNMA Certificates  102      (1)  101   104         104 
    Total available-for-sale securities $137,119  $  $(21,075) $116,044  $139,781  $  $(19,879) $119,902 
                             
    Held-to-Maturity Securities:                        
    U.S. Agency Bonds $25,000  $  $(289) $24,711  $25,000  $  $(181) $24,819 
    Corporate Bonds  82,500      (2,211)  80,289   82,500      (2,691)  79,809 
    Mortgage-Backed Securities:                        
    Collateralized Mortgage Obligations (1)  207,079      (7,468)  199,611   212,093   104   (5,170)  207,027 
    FHLMC Certificates  3,819      (253)  3,566   3,897      (244)  3,653 
    FNMA Certificates  116,085      (5,263)  110,822   118,944      (4,088)  114,856 
    SBA Certificates  18,945   169      19,114   19,712   166      19,878 
    Allowance for Credit Losses  (473)           (398)         
    Total held-to-maturity securities $452,955  $169  $(15,484) $438,113  $461,748  $270  $(12,374) $450,042 
     

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

    The following table presents the activity in the allowance for credit losses for held-to-maturity securities.

      For the Three  For the 
      Months Ended  Year Ended 
      March 31, 2024  December 31, 2023 
    Allowance for credit losses on securities at beginning of the period $398  $ 
    CECL adoption     662 
    Provision for credit losses  75   (264)
    Allowance for credit losses on securities at end of the period $473  $398 
     



    Ponce Financial Group, Inc. and Subsidiaries

    Loan Portfolio

      As of 
      March 31,  December 31,  September 30,  June 30,  March 31, 
      2024  2023  2023  2023  2023 
      Amount  Percent  Amount  Percent  Amount  Percent  Amount  Percent  Amount  Percent 
      (Dollars in thousands) 
    Mortgage loans:                              
    1-4 family residential                              
    Investor Owned $339,331   16.92% $343,689   17.89% $347,082   19.13% $351,754   20.43% $354,559   21.60%
    Owner-Occupied  150,842   7.52%  152,311   7.93%  151,866   8.37%  154,116   8.94%  149,481   9.10%
    Multifamily residential  545,825   27.22%  550,559   28.65%  553,694   30.52%  550,033   31.94%  553,430   33.71%
    Nonresidential properties  327,350   16.32%  342,343   17.81%  321,472   17.71%  317,416   18.43%  314,560   19.17%
    Construction and land  608,665   30.35%  503,925   26.22%  411,383   22.67%  315,843   18.34%  235,157   14.33%
    Total mortgage loans  1,972,013   98.33%  1,892,827   98.50%  1,785,497   98.40%  1,689,162   98.08%  1,607,187   97.91%
    Non-mortgage loans:                              
    Business loans  26,664   1.33%  19,779   1.03%  18,416   1.02%  21,041   1.22%  19,890   1.21%
    Consumer loans (1)  6,741   0.34%  8,966   0.47%  10,416   0.58%  11,958   0.70%  14,227   0.88%
    Total non-mortgage loans  33,405   1.67%  28,745   1.50%  28,832   1.60%  32,999   1.92%  34,117   2.09%
    Total loans, gross  2,005,418   100.00%  1,921,572   100.00%  1,814,329   100.00%  1,722,161   100.00%  1,641,304   100.00%
    Net deferred loan origination costs  674      468      692      1,059      2,099    
    Allowance for credit losses on loans  (24,664)     (26,154)     (27,414)     (28,173)     (28,975)   
    Loans, net $1,981,428     $1,895,886     $1,787,607     $1,695,047     $1,614,428    
     

    (1)  As of March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, consumer loans include $5.7 million, $8.0 million, $9.3 million, $11.2 million and $13.4 million, respectively, of loans originated by the Bank pursuant to its arrangement with Grain.


    Ponce Financial Group, Inc. and Subsidiaries
    Grain Loan Exposure

    Grain Technologies, Inc. ("Grain") Total Exposure as of March 31, 2024 
    (in thousands) 
    Receivable from Grain   
    Microloans originated - put back to Grain (inception-to-March 31, 2024) $24,051 
    Write-downs, net of recoveries (inception-to-date as of March 31, 2024)  (15,406)
    Cash receipts from Grain (inception-to-March 31, 2024)  (6,819)
    Grant/reserve  (1,826)
    Net receivable as of March 31, 2024 $ 
    Microloan receivables from Grain Borrowers   
    Grain originated loans receivable as of March 31, 2024 $5,731 
    Allowance for credit losses on loans as of March 31, 2024 (1)  (4,868)
    Microloans, net of allowance for credit losses on loans as of March 31, 2024 $863 
    Investments   
    Investment in Grain $1,000 
    Investment in Grain write-off in Q3 2022  (1,000)
    Investment in Grain as of March 31, 2024   
    Total exposure related to Grain as of March 31, 2024 (2) $863 
     

    (1) Excludes $1.6 million of security deposits by Grain originated borrowers reported in deposits in the accompanying Consolidated Statements of Financial Conditions.
    (2) Total remaining exposure to Grain borrowers. These loans are now serviced by the Bank.

    On November 1, 2023, Ponce Financial Group, Inc. and Grain signed a Perpetual Software License Agreement in order for the Bank to assume the servicing of the remaining Grain loans. In order to facilitate the transfer of the servicing responsibilities to the Bank, Grain granted the Bank a perpetual right and license to use the Grain software, including the source code to service the remaining loans.


    Ponce Financial Group, Inc. and Subsidiaries
    Allowance for Credit Losses on Loans

      For the Three Months Ended 
      March 31,  December 31,  September 30,  June 30,  March 31, 
      2024  2023  2023  2023  2023 
      (Dollars in thousands) 
    Allowance for credit losses on loans at beginning of the period $26,154  $27,414  $28,173  $28,975  $34,592 
    (Benefit) provision for credit losses on loans  (255)  (126)  750   934   (321)
    Adoption of CECL              (3,090)
    Charge-offs:               
    Mortgage loans:               
    1-4 family residences               
    Investor owned               
    Owner occupied               
    Multifamily residences               
    Nonresidential properties               
    Construction and land               
    Non-mortgage loans:               
    Business  (52)  (63)         
    Consumer  (1,302)  (1,135)  (1,592)  (1,931)  (2,569)
    Total charge-offs  (1,354)  (1,198)  (1,592)  (1,931)  (2,569)
    Recoveries:               
    Mortgage loans:               
    1-4 family residences               
    Investor owned               
    Owner occupied               
    Multifamily residences               
    Nonresidential properties               
    Construction and land               
    Non-mortgage loans:               
    Business  1      3       
    Consumer  118   64   80   195   363 
    Total recoveries  119   64   83   195   363 
    Net (charge-offs) recoveries  (1,235)  (1,134)  (1,509)  (1,736)  (2,206)
    Allowance for credit losses on loans at end of the period $24,664  $26,154  $27,414  $28,173  $28,975 
     



    Ponce Financial Group, Inc. and Subsidiaries
    Deposits

      As of 
      March 31,  December 31,  September 30,  June 30,  March 31, 
      2024  2023  2023  2023  2023 
      Amount  Percent  Amount  Percent  Amount  Percent  Amount  Percent  Amount  Percent 
      (Dollars in thousands) 
    Demand (1) $191,541   12.07% $185,151   12.28% $214,326   15.30% $225,106   15.61% $236,120   17.67%
    Interest-bearing deposits:                              
    NOW/IOLA accounts (1)  73,202   4.62%  77,909   5.17%  74,055   5.29%  64,193   4.45%  68,356   5.11%
    Money market accounts (2)  482,344   30.42%  432,735   28.70%  370,500   26.44%  387,970   26.91%  293,140   21.93%
    Reciprocal deposits  97,718   6.16%  96,860   6.42%  82,670   5.90%  100,919   7.00%  109,649   8.20%
    Savings accounts  112,713   7.11%  114,139   7.57%  117,870   8.41%  119,635   8.30%  127,731   9.55%
    Total NOW, money market, reciprocal and savings accounts  765,977   48.31%  721,643   47.86%  645,095   46.04%  672,717   46.66%  598,876   44.79%
    Certificates of deposit of $250K or more (2)  146,296   9.23%  132,153   8.77%  122,353   8.73%  120,043   8.32%  113,955   8.52%
    Brokered certificates of deposit (3)  94,689   5.97%  98,729   6.55%  98,729   7.05%  98,729   6.85%  98,754   7.39%
    Listing service deposits (3)  12,688   0.80%  14,433   0.96%  15,180   1.08%  20,258   1.40%  28,417   2.13%
    All other certificates of deposit less than $250K (2)  374,593   23.62%  355,511   23.58%  305,449   21.80%  305,160   21.16%  260,755   19.50%
    Total certificates of deposit  628,266   39.62%  600,826   39.86%  541,711   38.66%  544,190   37.73%  501,881   37.54%
    Total interest-bearing deposits  1,394,243   87.93%  1,322,469   87.72%  1,186,806   84.70%  1,216,907   84.39%  1,100,757   82.33%
    Total deposits $1,585,784   100.00% $1,507,620   100.00% $1,401,132   100.00% $1,442,013   100.00% $1,336,877   100.00%
     

    (1)  As of December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, $58.2 million, $51.5 million, $41.4 million and $46.6 million, respectively, were reclassified from demand to NOW/IOLA accounts.
    (2)  As of June 30, 2023 and March 31, 2023, $150.6 million and $115.3 million, respectively, of SaveBetter deposits were reclassified from money market accounts to certificates of deposits. $36.4 million and $37.1 million, respectively, were reclassified to Certificates of deposits of $250K or more and $114.2 million and $78.2 million, respectively, were reclassified to certificates of deposit less than $250K.
    (3)  As of March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, there were $1.5 million, $0.3 million, $0.3 million, $3.3 million and $9.5 million, respectively, in individual listing service deposits amounting to $250,000 or more. All brokered certificates of deposit individually amounted to less than $250,000.


    Ponce Financial Group, Inc. and Subsidiaries
    Borrowings

     March 31,  December 31, 
     2024  2023 
     Scheduled
    Maturity
      Redeemable
    at Call Date
      Weighted
    Average
    Rate
      Scheduled
    Maturity
      Redeemable
    at Call Date
      Weighted
    Average
    Rate
     
     (Dollars in thousands) 
    Term advances ending:                 
    2024$109,321  $109,321   5.15% $363,321  $363,321   4.55%
    2025 250,000   250,000   4.69   50,000   50,000   4.41 
    2026 50,000   50,000   4.83          
    2027 212,000   212,000   3.44   212,000   212,000   3.44 
    2028 9,100   9,100   3.84   9,100   9,100   3.84 
    Thereafter 50,000   50,000   3.35   50,000   50,000   3.35 
     $680,421  $680,421   4.28% $684,421  $684,421   4.10%
     


    Ponce Financial Group, Inc. and Subsidiaries

    Nonperforming Assets

     As of Three Months Ended 
     March 31,  December 31,  September 30,  June 30,  March 31, 
     2024  2023  2023  2023  2023 
     (Dollars in thousands) 
    Non-accrual loans:              
    Mortgage loans:              
    1-4 family residential              
    Investor owned$399  $793  $396  $296  $2,836 
    Owner occupied 1,426   1,682   1,685   2,363   2,245 
    Multifamily residential 4,098   2,979   1,444   1,435    
    Nonresidential properties 441             
    Construction and land 10,277   10,759   11,721   11,721   11,906 
    Non-mortgage loans:              
    Business 146   165   209      40 
    Consumer              
    Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty) (1)$16,787  $16,378  $15,455  $15,815  $17,027 
                   
    Non-accruing modifications to borrowers experiencing financial difficulty (1):              
    Mortgage loans:              
    1-4 family residential              
    Investor owned$270  $270  $270  $209  $213 
    Owner occupied 447   447   449   840   2,020 
    Multifamily residential              
    Nonresidential properties             91 
    Construction and land              
    Non-mortgage loans:              
    Business              
    Consumer              
    Total non-accruing modifications to borrowers experiencing financial difficulty (1) 717   717   719   1,049   2,324 
    Total non-accrual loans (2)$17,504  $17,095  $16,174  $16,864  $19,351 
                   
    Accruing modifications to borrowers experiencing financial difficulty (1):              
    Mortgage loans:              
    1-4 family residential              
    Investor owned$1,850  $2,112  $2,131  $2,161  $2,185 
    Owner occupied 2,288   2,313   2,335   2,353   1,310 
    Multifamily residential              
    Nonresidential properties 748   757   765   783   701 
    Construction and land              
    Non-mortgage loans:              
    Business              
    Consumer              
    Total accruing modifications to borrowers experiencing financial difficulty (1)$4,886  $5,182  $5,231  $5,297  $4,196 
    Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty (1)$22,390  $22,277  $21,405  $22,161  $23,547 
    Total non-performing loans to total gross loans 0.87%  0.89%  0.89%  0.98%  1.18%
    Total non-performing assets to total assets 0.62%  0.62%  0.62%  0.63%  0.76%
    Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (1) 0.79%  0.81%  0.82%  0.83%  0.93%

    (1) Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.
    (2) Includes nonperforming mortgage loans held for sale.


    Ponce Financial Group, Inc. and Subsidiaries
    Average Balance Sheets

     For the Three Months Ended March 31,
     2024
     2023
     Average       Average      
     Outstanding     Average Outstanding     Average
     Balance  Interest  Yield/Rate (1) Balance  Interest  Yield/Rate (1)
     (Dollars in thousands)
    Interest-earning assets:               
    Loans (2)$1,979,263  $30,664  6.23% $1,572,148  $19,700  5.08%
    Securities (3) 576,235   5,619  3.92%  631,138   6,075  3.90%
    Other (4) (5) 238,432   3,383  5.71%  48,473   581  4.86%
    Total interest-earning assets 2,793,930   39,666  5.71%  2,251,759   26,356  4.75%
    Non-interest-earning assets (5) 106,566        123,007      
    Total assets$2,900,496       $2,374,766      
    Interest-bearing liabilities:               
    NOW/IOLA (6) (7)$82,849  $218  1.06% $71,765  $688  3.89%
    Money market (7) (8) 544,563   6,292  4.65%  314,241   2,091  2.70%
    Savings 113,501   28  0.10%  128,876   30  0.09%
    Certificates of deposit (8) 629,528   6,380  4.08%  516,327   3,225  2.53%
    Total deposits 1,370,441   12,918  3.79%  1,031,209   6,034  2.37%
    Advance payments by borrowers 12,886   2  0.06%  12,919   3  0.09%
    Borrowings 771,070   7,923  4.13%  523,705   5,074  3.93%
    Total interest-bearing liabilities 2,154,397   20,843  3.89%  1,567,833   11,111  2.87%
    Non-interest-bearing liabilities:               
    Non-interest-bearing demand (6) 198,862        268,372      
    Other non-interest-bearing liabilities 54,061        42,038      
    Total non-interest-bearing liabilities 252,923        310,410      
    Total liabilities 2,407,320   20,843     1,878,243   11,111   
    Total equity 493,176        496,523      
    Total liabilities and total equity$2,900,496     3.89% $2,374,766     2.87%
    Net interest income   $18,823       $15,245   
    Net interest rate spread (9)      1.82%       1.88%
    Net interest-earning assets (10)$639,533       $683,926      
    Net interest margin (11)      2.71%       2.75%
    Average interest-earning assets to interest-bearing liabilities      129.69%       143.62%

    (1)  Annualized where appropriate.
    (2)  Loans include loans and mortgage loans held for sale, at fair value.
    (3)  Securities include available-for-sale securities and held-to-maturity securities.
    (4)  Includes FHLBNY demand account, FHLBNY stock dividends and FRB demand deposits.
    (5)  FRB demand deposits for prior period have been reclassified for consistency.
    (6)  Includes reclassification of $48.4 million average outstanding balances from non-interest bearing demand to NOW/IOLA for the three months ended March 31, 2023.
    (7)  Include $0.7 million of interest expense reclassified from money market to NOW/IOLA for the three months ended March 31, 2023.
    (8)  Includes reclassification of $135.0 million average outstanding balances and $1.4 million of interest expenses from money market to certificates of deposit for the three months ended March 31, 2023.
    (9)  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.
    (10)  Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
    (11)  Net interest margin represents net interest income divided by average total interest-earning assets.


    Ponce Financial Group, Inc. and Subsidiaries
    Other Data

     As of 
     March 31,  December 31,  September 30,  June 30,  March 31, 
     2024  2023  2023  2023  2023 
    Other Data              
    Common shares issued 24,886,711   24,886,711   24,886,711   24,886,711   24,865,476 
    Less treasury shares 1,096,214   1,101,191   1,233,111   617,924   1,976 
    Common shares outstanding at end of period 23,790,497   23,785,520   23,653,600   24,268,787   24,863,500 
                   
    Book value per common share$11.29  $11.20  $10.99  $10.94  $10.90 
    Tangible book value per common share$11.29  $11.20  $10.99  $10.94  $10.90 
     

    Contact:
    Frank Perez
    frank.perez@poncebank.net
    718-931-9000


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