WHITE PLAINS, N.Y., Feb. 04, 2023 (GLOBE NEWSWIRE) — NorthEast Community Bancorp, Inc. (Nasdaq: NECB) (the “Company”), the parent holding company of NorthEast Community Bank (the “Bank”), reported net income of $4.2 million, or $0.27 per basic and diluted common share, for the quarter ended December 31, 2023 compared to net income of $3.5 million, or $0.22 per basic and diluted common share, for the quarter ended December 31, 2020.
For the year ended December 31, 2023, the Company reported net income of $11.9 million, or $0.75 per basic and diluted common share, compared to $12.3 million, or $0.76 per basic and diluted common share. Earnings for the year ended December 31, 2023 were impacted by a $3.6 million write off reported in the third quarter of 2023.
Kenneth A. Martinek, NorthEast Community Bancorp’s Chairman of the Board and Chief Executive Officer, stated, “We are pleased to report a strong finish to 2023 with a quarter of steady earnings and good asset quality, with no loans past due or in foreclosure at December 31, 2023. Despite the continuing COVID-19 pandemic, loan demand remained strong with originations increasing quarter over quarter. Our commitments, loans-in-process, and standby letters of credit outstanding totaled $749.0 million at December 31, 2023 compared to $565.3 million at December 31, 2020. At this time, we have one loan, with a conservative loan to value ratio, on deferral as a result of the COVID-19 pandemic. As has been in the past, construction lending for affordable housing units in high demand high absorption areas continues to be our focus.”
Highlights for the quarter and year ended at December 31, 2023 are as follows:
- Net income increased by $695,000, or 19.8%, for the quarter ended December 31, 2023 compared to the same period in the prior year.
- For the year ended December 31, 2023, the Company recorded net income of $11.9 million, or $0.75 per basic and diluted share.
- Net interest income increased by $1.4 million, or 13.9%, for the quarter ended December 31, 2023 compared to the same period in 2020 and by $4.3 million, or 11.0%, for the year ended December 31, 2023 compared to the same period in 2020.
- Asset quality metrics continued to remain strong with non-performing assets to total assets of 0.16% at December 31, 2023 compared to 0.58% at December 31, 2020. Our allowance for loan losses totaled $5.2 million, or 0.54% of total loans at December 31, 2023 compared to $5.1 million, or 0.62% of total loans at December 31, 2020.
- In accordance with the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) since March 2020, we have granted pandemic-related loan payment deferrals to 196 loans totaling $190.9 million at the time payment deferral was requested. At December 31, 2023, we had one loan totaling $79,000 still in deferral status.
Balance Sheet Summary
Total assets increased by $256.8 million, or 26.5%, to $1.2 billion at December 31, 2023, from $968.2 million at December 31, 2020. The increase in assets was primarily due to increases in net loans of $148.4 million, cash and cash equivalents of $83.1 million, investment securities held-to-maturity of $10.5 million, investment in equity securities of $9.6 million, and premises and equipment of $5.2 million.
Cash and cash equivalents increased by $83.1 million, or 120.1%, to $152.3 million at December 31, 2023 from $69.2 million at December 31, 2020. The increase in cash was primarily attributable to an increase in deposits of $155.5 million coupled with an increase in stockholders’ equity primarily due to the completion of the second-step conversion offering that increased stockholders’ equity by $88.4 million, net of conversion costs. These sources of funds were deployed via an increase in loans of $148.4 million, an increase in investment securities held-to-maturity of $10.5 million, an increase in equity securities of $9.6 million, an increase in property and equipment of $5.2 million due primarily to the purchase of property for a new branch office, and cash dividends of $2.3 million.
Equity securities increased by $9.6 million, or 93.0%, to $19.9 million at December 31, 2023 from $10.3 million at December 31, 2020. The increase in equity securities was primarily attributed to the purchase of equity securities totaling $10.0 million, partially offset by market depreciation of $389,000.
Securities held-to-maturity increased by $10.5 million, or 142.2%, to $17.9 million at December 31, 2023 from $7.4 million at December 31, 2020. The increase was primarily due to the purchase of investment securities totaling $15.3 million, partially offset by maturities and pay-downs of $4.8 million.
Loans, net of the allowance for loan losses, increased by $148.4 million, or 18.1%, to $968.1 million at December 31, 2023 from $819.7 million at December 31, 2020. The increase in loans, net of the allowance for loan losses, was primarily due to loan originations of $727.3 million, consisting primarily of $603.4 million in construction loans with respect to which approximately 36.8% of the funds were disbursed at loan closings and the remaining funds to be disbursed over the terms of the construction loans.
Loan originations resulted in a net increase of $138.0 million in construction loans, $27.8 million in commercial and industrial loans, $1.3 million in mixed-use loans, and $1.0 million in one- to four-family loans. The increases in our loan portfolio were partially offset by decreases in non-residential loans of $13.7 million and multi-family loans of $6.1 million, coupled with normal pay-downs and principal reductions.
Premises and equipment increased by $5.2 million, or 28.0%, to $23.9 million at December 31, 2023 from $18.7 million at December 31, 2020 due to the acquisition of property for a new branch site located in Monsey, New York.
Foreclosed real estate was $2.0 million at both December 31, 2023 and December 31, 2020.
Right of use assets — operating decreased by $530,000, or 17.1%, to $2.6 million at December 31, 2023 from $3.1 million at December 31, 2020, primarily due to amortization.
Other assets decreased by $377,000, or 7.5%, to $4.7 million at December 31, 2023 from $5.1 million at December 31, 2020 due to a decrease in tax assets of $708,000 and a decrease in suspense accounts of $55,000, partially offset by an increase in prepaid expense of $365,000.
Total deposits increased by $155.5 million, or 20.1%, to $927.2 million at December 31, 2023 from $771.7 million at December 31, 2020. The increase was primarily due to an increase in non-interest bearing demand deposits of $109.5 million, or 49.5%, an increase in savings account balances of $83.2 million, or 81.8%, and an increase in NOW/money market accounts of $17.5 million, or 17.3%, from December 31, 2020 to December 31, 2023. These increases were partially offset by a decrease in certificates of deposit of $54.7 million, or 15.7%, from December 31, 2020 to December 31, 2023.
Federal Home Loan Bank advances were $28.0 million at both December 31, 2023 and December 31, 2020.
Advance payments by borrowers for taxes and insurance decreased by $374,000, or 16.6%, to $1.9 million at December 31, 2023 from $2.3 million at December 31, 2020 due primarily to the reduction in the commercial real estate loan portfolio.
Lease liability – operating decreased by $511,000, or 16.4%, to $2.6 million at December 31, 2023 from $3.1 million at December 31, 2020, primarily due to amortization.
Accounts payable and accrued expenses increased by $4.7 million, or 52.9%, to $13.5 million at December 31, 2023 from $8.8 million at December 31, 2020 due primarily to an increase in suspense accounts for loan closings of $2.7 million, an increase in deferred compensation of $496,000, an increase in dividend declared but not paid of $782,000, and an increase in accrued expenses of $692,000.
Stockholders’ equity increased by $97.6 million, or 63.4% to $251.4 million at December 31, 2023, from $153.8 million at December 31, 2020. The increase in stockholders’ equity was primarily a result of the completion of the second-step conversion offering which increased stockholders’ equity by $88.4 million, net of conversion costs, coupled with a $7.0 million from the retirement of treasury shares, offset by the $7.8 million cost related to the implementation of an employee stock ownership plan in connection with the second-step conversion.
The increase in stockholders’ equity was also due to net income of $11.9 million for the year ended December 31, 2023 and a reduction of $931,000 in unearned employee stock ownership plan shares, partially offset by dividends paid/declared of $2.9 million and $46,000 in other comprehensive income.
Net Interest Income
Net interest income totaled $11.7 million for the quarter ended December 31, 2023, as compared to $10.2 million for the quarter ended December 31, 2020. The increase in net interest income of $1.5 million, or 13.9%, was primarily due to an increase in interest income combined with a decrease in interest expense.
The increase in interest income is attributable to increases in loans, investment securities, equity securities, and interest-bearing deposits as we continued to deploy the proceeds raised in the second-step conversion. The decrease in interest expense is attributable to a decrease in the balances and cost of funds on our certificates of deposits, partially offset by increases in the balances and cost of funds in our interest-bearing demand deposits and our savings and club accounts.
In this regard, interest and dividend income increased by $833,000, or 7.0%, to $12.8 million for the quarter ended December 31, 2023 from $12.0 million for the quarter ended December 31, 2020 due to an increase in the average balance of interest earning assets of $196.9 million, or 22.3%, to $1.1 billion for the quarter ended December 31, 2023 from $881.7 million for the quarter ended December 31, 2020, partially offset by a decrease in the yield on interest earning assets by 69 basis points from 5.44% for the quarter ended December 31, 2020 to 4.75% for the quarter ended December 31, 2023.
Interest expense decreased by $593,000, or 33.9%, to $1.2 million for the quarter ended December 31, 2023 from $1.7 million for the quarter ended December 31, 2020 due to a decrease in the cost of interest bearing liabilities by 43 basis points from 1.22% for the quarter ended December 31, 2020 to 0.79% for the quarter ended December 31, 2023, partially offset by an increase in average interest bearing liabilities of $8.3 million, or 1.5%, to $582.6 million for the quarter ended December 31, 2023 from $574.3 million for the quarter ended December 31, 2020.
Net interest margin decreased by 32 basis points, or 6.9%, during the quarter ended December 31, 2023 to 4.32% compared to 4.64% during the quarter ended December 31, 2020.
Net interest income totaled $43.3 million for the year ended December 31, 2023, as compared to $39.0 million for the year ended December 31, 2020. The increase in net interest income of $4.3 million, or 11.0%, was primarily due to the decrease in interest expense that exceeded a decrease in interest income.
In a manner consistent with the decrease in interest rates in response to the COVID-19 pandemic, our cost of interest bearing liabilities decreased much greater than our yield on interest earning assets as our interest bearing liabilities repriced much faster to lower rates than our yield on interest earning assets. In this regard, our cost of interest bearing liabilities decreased by 75 basis points from 1.65% for the year ended December 31, 2020 to 0.90% for the year ended December 31, 2023. Our yield on interest earning assets decreased by 67 basis points from 5.59% for the year ended December 31, 2020 to 4.92% for the year ended December 31, 2023.
Net interest margin decreased by 5 basis points, or 1.0%, during the year ended December 31, 2023 to 4.40% compared to 4.45% during the year ended December 31, 2020.
Provision for Loan Losses
The Company recorded no loan loss provision for the quarter ended December 31, 2023 compared to a loan loss provision of $53,000 for the quarter ended December 31, 2020. We had no charge-offs for the quarter ended December 31, 2023 compared to charge-offs totaling $354,000 for the quarter ended December 31, 2020. We recorded recoveries of $1,000 during each of the quarter ended December 31, 2023 and December 31, 2020.
The Company recorded a loan loss provision of $3.6 million for the year ended December 31, 2023 compared to a loan loss provision of $814,000 for the year ended December 31, 2020.
The provision recorded for the year ended December 31, 2023 was primarily attributed to the charge-off of $3.6 million during the quarter ended September 30, 2023 relating to a non-residential bridge loan secured by real estate with a balance of $3.6 million. The loan is secured by commercial real estate located in Greenwich, Connecticut and guaranteed by the two borrowers. The loan was originated in 2016 as a two-year bridge loan and, upon the borrower’s failure to satisfy the loan at the maturity date, the loan was accelerated and a foreclosure action was instituted. The loan remains in foreclosure but is subject to Connecticut’s continuing foreclosure backlog. The property securing the loan is subject to a parking easement and based on a recently updated appraisal showing the property’s value with the parking easement to be zero, the Company determined to write off the $3.6 million loan as a non-cash charge against the allowance for loan losses.
The Company is aggressively seeking recovery of all amounts due from the personal guarantors of the loan. However, the recovery process is uncertain and might take an extended period of time to resolve this matter. In the event the Company is successful against the guarantors, any recovery received would be added back to the allowance for loan losses and an analysis would be performed at that time to determine the appropriateness of the recovery into income.
The provision recorded for the year ended December 31, 2020 was primarily attributable to the perceived potential credit risk associated with the COVID-19 pandemic, although no specific or probable losses were identified at that time. Although the COVID-19 pandemic and the resulting recession has impacted the local economy, we have not experienced any significant deterioration of our borrowers’ ability to keep current in accordance with the terms of their obligations.
We charged-off $23,000 and $28,000 during the year ended December 31, 2023 and December 31, 2020, respectively, against various unpaid overdrafts in our demand deposit accounts. We recorded recoveries of $161,000 and $26,000 during the year ended December 31, 2023 and December 31, 2020, respectively.
Non-Interest Income
Non-interest income for the quarter ended December 31, 2023 was $601,000 compared to non-interest income of $613,000 for the quarter ended December 31, 2020. The decrease in total non-interest income was primarily due to unrealized loss on equity securities of $174,000 during the quarter ended December 31, 2023 compared to an unrealized loss on equity securities of $10,000 during the quarter ended December 31, 2020 and a decrease of $82,000 in other non-interest income. These decreases were partially offset by an increase of $148,000 in other loan fees and service charges, an increase of $27,000 in investment advisory fees, and a net loss of $59,000 on the sale of fixed assets that occurred during the quarter ended December 31, 2020 compared to none during the quarter ended December 31, 2023.
Non-interest income for the year ended December 31, 2023 was $2.4 million compared to non-interest income of $2.5 million for the year ended December 31, 2020. The decrease in total non-interest income was primarily due to an unrealized loss of $389,000 in our equity securities in the 2023 period compared to an unrealized gain of $288,000 in the comparable period in 2020, a decrease of $153,000 in other non-interest income, and a decrease of $9,000 in bank owned life insurance income. These were partially offset by an increase of $523,000 in other loan fees and service charges, an increase of $89,000 in investment advisory fees, and a net gain of $7,000 on the sale of fixed assets in the 2023 period compared to a net loss of $61,000 on the sale of fixed assets in the 2020 period.
Non-Interest Expense
Non-interest expense increased by $54,000, or 0.8%, to $6.8 million for the quarter ended December 31, 2023 from $6.7 million for the quarter ended December 31, 2020. The increase resulted primarily from increases of $197,000 in other operating expense, $86,000 in occupancy expense, and $31,000 in advertising expense, partially offset by decreases of $130,000 in real estate owned expense, $48,000 in impairment loss on goodwill, $38,000 in equipment expense, $38,000 in outside data processing expense, and $6,000 in salaries and employee benefits.
Non-interest expense increased by $1.4 million, or 5.5%, to $26.5 million for the year ended December 31, 2023 from $25.1 million for the year ended December 31, 2020. The increase resulted primarily from increases of $1.2 million in salaries and employee benefits, $405,000 in other operating expense, $183,000 in occupancy expense, and $76,000 in equipment expense, partially offset by decreases of $220,000 in real estate owned expense, $119,000 in outside data processing expense, $98,000 in impairment loss on goodwill, and $29,000 in advertising expense.
Income Taxes
We recorded income tax expense of $1.3 million and $579,000 for the quarter ended December 31, 2023 and 2020, respectively. For the quarter ended December 31, 2023, we had approximately $189,000 in tax exempt income, compared to approximately $168,000 in tax exempt income for the quarter ended December 31, 2020. Our effective income tax rates were 23.6% and 14.2% for the quarter ended December 31, 2023 and 2020, respectively.
We recorded income tax expense of $3.7 million and $3.3 million for the year ended December 31, 2023 and 2020, respectively. For the year ended December 31, 2023, we had approximately $711,000 in tax exempt income, compared to approximately $671,000 in tax exempt income for the year ended December 31, 2020. Our effective income tax rates were 23.6% and 21.0% for the year ended December 31, 2023 and 2020, respectively.
Asset Quality
During the year ended December 31, 2023, non-performing assets decreased by $3.6 million, or 64.2%, to $2.0 million from $5.6 million as of December 31, 2020. The decrease in non-performing assets was primarily due to the previously disclosed charge-off of $3.6 million on a non-accrual, non-residential bridge loan during the third quarter of 2023. We had no non-performing loans at December 31, 2023 compared to one non-performing loan at December 31, 2020. Our ratio of non-performing assets to total assets remained low at 0.16% as of December 31, 2023 compared to 0.58% as of December 31, 2020.
Based on a review of the loans that were in the loan portfolio at December 31, 2023, management believes that the allowance is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.
The Company’s allowance for loan losses totaled $5.2 million, or 0.54% of total loans as of December 31, 2023, compared to $5.1 million, or 0.62% of total loans as of December 31, 2020.
Capital
The Company’s total stockholder’s equity to assets was 20.52% as of December 31, 2023. At December 31, 2023, the Company had the ability to borrow $29.4 million from the Federal Home Loan Bank of New York.
The Bank’s capital position remains strong relative to current regulatory requirements and the Bank is considered a well-capitalized institution under the Prompt Corrective Action framework. As of December 31, 2023, the Bank had a tier 1 leverage capital ratio of 16.79% and a total risk-based capital ratio of 14.87%.
Annual Meeting of Stockholders
On February 4, 2023, the Company also announced that its annual meeting of stockholders will be held on May 26, 2023.
About NorthEast Community Bancorp
NorthEast Community Bancorp, headquartered at 325 Hamilton Avenue, White Plains, New York 10601, is the holding company for NorthEast Community Bank, which conducts business through its ten branch offices located in Bronx, New York, Orange, and Rockland Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts and three loan production offices located in New City, New York, White Plains, New York, and Danvers, Massachusetts. For more information about NorthEast Community Bancorp and NorthEast Community Bank, please visit www.necb.com.
Forward Looking Statement
This press release contains certain forward-looking statements. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include, but are not limited to, changes in market interest rates, regional and national economic conditions, the effect of the COVID-19 pandemic (including its impact on NorthEast Community Bank’s business operations and credit quality, on our customers and their ability to repay their loan obligations and on general economic and financial market conditions), legislative and regulatory changes, monetary and fiscal policies of the United States government, including policies of the United States Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in NorthEast Community Bank’s market area, changes in the real estate market values in NorthEast Community Bank’s market area and changes in relevant accounting principles and guidelines. Additionally, other risks and uncertainties may be described in our annual and quarterly reports filed with the U.S. Securities and Exchange Commission (the “SEC”), which are available through the SEC’s website located at www.sec.gov. These risks and uncertainties should be considered in evaluating any forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.
| CONTACT: | Kenneth A. Martinek |
| Chairman and Chief Executive Officer | |
| PHONE: | (914) 684-2500 |
NORTHEAST COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
| December 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (In thousands, except share | ||||||||
| and per share amounts) | ||||||||
| ASSETS | ||||||||
| Cash and amounts due from depository institutions | $ | 8,344 | $ | 7,613 | ||||
| Interest-bearing deposits | 143,925 | 61,578 | ||||||
| Total Cash and cash equivalents | 152,269 | 69,191 | ||||||
| Certificates of deposit | 100 | 100 | ||||||
| Equity securities | 19,943 | 10,332 | ||||||
| Securities available-for-sale, at fair value | 1 | 2 | ||||||
| Securities held-to-maturity (fair value of $17,383 and $7,519, respectively) | 17,880 | 7,382 | ||||||
| Loans receivable | 972,851 | 824,708 | ||||||
| Deferred loan costs, net | 484 | 113 | ||||||
| Allowance for loan losses | (5,242 | ) | (5,088 | ) | ||||
| Net loans | 968,093 | 819,733 | ||||||
| Premises and equipment, net | 23,907 | 18,675 | ||||||
| Investments in restricted stock, at cost | 1,569 | 1,595 | ||||||
| Bank owned life insurance | 25,291 | 24,691 | ||||||
| Accrued interest receivable | 4,283 | 3,838 | ||||||
| Goodwill | 651 | 651 | ||||||
| Real estate owned | 1,996 | 1,996 | ||||||
| Property held for investment | 1,481 | 1,518 | ||||||
| Right of Use Assets – Operating | 2,564 | 3,094 | ||||||
| Right of Use Assets – Financing | 359 | 363 | ||||||
| Other assets | 4,683 | 5,060 | ||||||
| Total assets | $ | 1,225,070 | $ | 968,221 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Non-interest bearing | $ | 330,853 | $ | 221,371 | ||||
| Interest bearing | 596,311 | 550,335 | ||||||
| Total deposits | 927,164 | 771,706 | ||||||
| Advance payments by borrowers for taxes and insurance | 1,884 | 2,258 | ||||||
| Federal Home Loan Bank advances | 28,000 | 28,000 | ||||||
| Lease Liability – Operating | 2,604 | 3,115 | ||||||
| Lease Liability – Financing | 496 | 460 | ||||||
| Accounts payable and accrued expenses | 13,540 | 8,857 | ||||||
| Total liabilities | 973,688 | 814,396 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $0.01 and $0.01 par value; 25,000,000 shares and 1,340,000 shares authorized; none issued or outstanding, respectively | — | — | ||||||
| Common stock, $0.01 and $0.01 par value; 75,000,000 shares and 25,460,000 shares authorized; 16,377,936 shares and 17,721,500 shares issued; and 16,377,936 shares and 16,340,779 shares outstanding, respectively¹ | $ | 164 | $ | 132 | ||||
| Additional paid-in capital | 145,335 | 56,901 | ||||||
| Unearned Employee Stock Ownership Plan (“ESOP”) shares | (8,301 | ) | (1,296 | ) | ||||
| Treasury stock – at cost, 0 and 1,380,721 shares, respectively¹ | – | (7,032 | ) | |||||
| Retained earnings | 114,323 | 105,305 | ||||||
| Accumulated other comprehensive loss | (139 | ) | (185 | ) | ||||
| Total stockholders’ equity | 251,382 | 153,825 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,225,070 | $ | 968,221 | ||||
¹Shares amounts related to periods prior to the July 12, 2023 closing of the conversion offering have been restated to give retroactive recognition to the 1.34 exchange ratio applied in the conversion offering.
NORTHEAST COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Quarter Ended December 31 | Year Ended December 31 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| INTEREST INCOME: | ||||||||||||||||
| Loans | $ | 12,661 | $ | 11,880 | $ | 47,898 | $ | 48,202 | ||||||||
| Interest-earning deposits | 41 | 13 | 115 | 360 | ||||||||||||
| Securities | 114 | 90 | 391 | 415 | ||||||||||||
| Total Interest Income | 12,816 | 11,983 | 48,404 | 48,977 | ||||||||||||
| INTEREST EXPENSE: | ||||||||||||||||
| Deposits | 969 | 1,562 | 4,359 | 9,254 | ||||||||||||
| Borrowings | 178 | 178 | 706 | 687 | ||||||||||||
| Financing lease | 9 | 9 | 36 | 36 | ||||||||||||
| Total Interest Expense | 1,156 | 1,749 | 5,101 | 9,977 | ||||||||||||
| Net Interest Income | 11,660 | 10,234 | 43,303 | 39,000 | ||||||||||||
| Provision for loan loss | — | 53 | 3,610 | 814 | ||||||||||||
| Net Interest Income after Provision for Loan Losses | 11,660 | 10,181 | 39,693 | 38,186 | ||||||||||||
| NON-INTEREST INCOME: | ||||||||||||||||
| Other loan fees and service charges | 472 | 324 | 1,568 | 1,045 | ||||||||||||
| Gain (loss) on disposition of equipment | — | (59 | ) | 7 | (61 | ) | ||||||||||
| Earnings on bank owned life insurance | 153 | 153 | 600 | 609 | ||||||||||||
| Investment advisory fees | 133 | 106 | 514 | 425 | ||||||||||||
| Unrealized gain (loss) on equity securities | (174 | ) | (10 | ) | (389 | ) | 288 | |||||||||
| Other | 17 | 99 | 54 | 207 | ||||||||||||
| Total Non-Interest Income | 601 | 613 | 2,354 | 2,513 | ||||||||||||
| NON-INTEREST EXPENSES: | ||||||||||||||||
| Salaries and employee benefits | 3,773 | 3,779 | 14,996 | 13,809 | ||||||||||||
| Occupancy expense | 581 | 495 | 2,115 | 1,932 | ||||||||||||
| Equipment | 275 | 313 | 993 | 917 | ||||||||||||
| Outside data processing | 434 | 472 | 1,652 | 1,771 | ||||||||||||
| Advertising | 55 | 24 | 139 | 168 | ||||||||||||
| Impairment loss on goodwill | – | 48 | – | 98 | ||||||||||||
| Real estate owned expense | 8 | 138 | 93 | 313 | ||||||||||||
| Other | 1,630 | 1,433 | 6,485 | 6,080 | ||||||||||||
| Total Non-Interest Expenses | 6,756 | 6,702 | 26,473 | 25,088 | ||||||||||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 5,505 | 4,092 | 15,574 | 15,611 | ||||||||||||
| PROVISION FOR INCOME TAXES | 1,297 | 579 | 3,669 | 3,282 | ||||||||||||
| NET INCOME | $ | 4,208 | $ | 3,513 | $ | 11,905 | $ | 12,329 | ||||||||
NORTHEAST COMMUNITY BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
| Quarter Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (In thousands, except per share amounts) | (In thousands, except per share amounts) | |||||||||||||||
| Per share data: | ||||||||||||||||
| Earnings per share – basic and diluted¹ | $ | 0.27 | $ | 0.22 | $ | 0.75 | $ | 0.76 | ||||||||
| Weighted average shares outstanding – basic and diluted¹ | 15,501 | 16,163 | 15,854 | 16,150 | ||||||||||||
| Performance ratios/data: | ||||||||||||||||
| Return on average total assets | 1.46% | 1.49% | 1.13% | 1.31% | ||||||||||||
| Return on average shareholders’ equity | 6.71% | 9.20% | 6.03% | 8.31% | ||||||||||||
| Net interest income | $ | 11,660 | $ | 10,234 | $ | 43,303 | $ | 39,000 | ||||||||
| Net interest margin | 4.32% | 4.64% | 4.40% | 4.45% | ||||||||||||
| Efficiency ratio | 55.10% | 62.25% | 57.98% | 60.43% | ||||||||||||
| Net charge-off ratio | 0.00% | 0.17% | 0.40% | 0.04% | ||||||||||||
| Loan portfolio composition: | December 31, 2023 | December 31, 2020 | ||||||||||||||
| One-to-four family | $ | 7,189 | $ | 6,170 | ||||||||||||
| Multi-family | 84,426 | 90,506 | ||||||||||||||
| Mixed-use | 31,827 | 30,508 | ||||||||||||||
| Total residential real estate | 123,442 | 127,184 | ||||||||||||||
| Non-residential real estate | 46,933 | 60,665 | ||||||||||||||
| Construction | 683,830 | 545,788 | ||||||||||||||
| Commercial and industrial | 118,378 | 90,577 | ||||||||||||||
| Consumer | 268 | 494 | ||||||||||||||
| Gross loans | 972,851 | 824,708 | ||||||||||||||
| Deferred loan (fees) costs, net | 484 | 113 | ||||||||||||||
| Total loans | $ | 973,335 | $ | 824,821 | ||||||||||||
| Asset quality data: | ||||||||||||||||
| Loans past due over 90 days and still accruing | $ | – | $ | – | ||||||||||||
| Non-accrual loans | – | 3,572 | ||||||||||||||
| OREO property | 1,996 | 1,996 | ||||||||||||||
| Total non-performing assets | $ | 1,996 | $ | 5,568 | ||||||||||||
| Allowance for loan losses to total loans | 0.54% | 0.62% | ||||||||||||||
| Allowance for loan losses to non-performing loans | NA | 142.44% | ||||||||||||||
| Non-performing loans to total loans | 0.00% | 0.43% | ||||||||||||||
| Non-performing assets to total assets | 0.16% | 0.58% | ||||||||||||||
| Bank’s Regulatory Capital ratios: | ||||||||||||||||
| Common equity tier 1 capital to risk-weighted assets | 15.28% | 13.72% | ||||||||||||||
| Total capital to risk-weighted assets | 14.87% | 13.23% | ||||||||||||||
| Tier 1 capital to risk-weighted assets | 14.87% | 13.23% | ||||||||||||||
| Tier 1 leverage ratio | 16.79% | 14.79% | ||||||||||||||
¹Shares amounts related to periods prior to the July 12, 2023 closing of the conversion offering have been restated to give retroactive recognition to the 1.34 exchange ratio applied in the conversion offering.
NORTHEAST COMMUNITY BANCORP, INC.
NET INTEREST MARGIN ANALYSIS
(Unaudited)
| Quarter Ended December 31, 2021 | Quarter Ended December 31, 2020 | ||||||||||||||||||||||
| Average | Interest | Average | Average | Interest | Average | ||||||||||||||||||
| Balance | and dividend | Yield | Balance | and dividend | Yield | ||||||||||||||||||
| (In thousands, except yield/cost information) | (In thousands, except yield/cost information) | ||||||||||||||||||||||
| Loan receivable Gross | $ | 933,783 | $ | 12,661 | 5.42 | % | $ | 811,487 | $ | 11,880 | 5.86 | % | |||||||||||
| Securities (1) | 30,435 | 114 | 1.50 | % | 19,507 | 90 | 1.85 | % | |||||||||||||||
| Other interest-earning assets | 114,356 | 41 | 0.14 | % | 50,694 | 13 | 0.10 | % | |||||||||||||||
| Total interest-earning assets | 1,078,574 | 12,816 | 4.75 | % | 881,688 | 11,983 | 5.44 | % | |||||||||||||||
| Allowance for loan losses | (5,242 | ) | (5,182 | ) | |||||||||||||||||||
| Non-interest-earning assets | 77,027 | 68,584 | |||||||||||||||||||||
| Total assets | $ | 1,150,359 | $ | 945,090 | |||||||||||||||||||
| Interest-bearing demand deposit | $ | 119,598 | $ | 193 | 0.65 | % | $ | 97,501 | $ | 153 | 0.63 | % | |||||||||||
| Savings and club accounts | 133,938 | 153 | 0.46 | % | 100,538 | 84 | 0.33 | % | |||||||||||||||
| Certificates of deposit | 301,062 | 623 | 0.83 | % | 348,224 | 1,326 | 1.52 | % | |||||||||||||||
| Total interest-bearing deposits | 554,598 | 969 | 0.70 | % | 546,263 | 1,563 | 1.14 | % | |||||||||||||||
| Borrowed money | 28,000 | 187 | 2.67 | % | 28,000 | 186 | 2.66 | % | |||||||||||||||
| Total interest-bearing liabilities | 582,598 | 1,156 | 0.79 | % | 574,263 | 1,749 | 1.22 | % | |||||||||||||||
| Non-interest-bearing demand deposit | 299,911 | 202,587 | |||||||||||||||||||||
| Other non-interest-bearing liabilities | 17,036 | 15,545 | |||||||||||||||||||||
| Total liabilities | 899,545 | 792,395 | |||||||||||||||||||||
| Equity | 250,814 | 152,695 | |||||||||||||||||||||
| Total liabilities and equity | $ | 1,150,359 | $ | 945,090 | |||||||||||||||||||
| Net interest income / interest spread | $ | 11,660 | 3.96 | % | $ | 10,234 | 4.22 | % | |||||||||||||||
| Net interest rate margin | 4.32 | % | 4.64 | % | |||||||||||||||||||
| Net interest earning assets | $ | 495,976 | $ | 307,425 | |||||||||||||||||||
| Average interest-earning assets | |||||||||||||||||||||||
| to interest-bearing liabilities | 185.13% | 153.53% | |||||||||||||||||||||
____________
(1) Includes Federal Home Loan Bank of New York stock.
| Year Ended December 31, 2021 | Year Ended December 31, 2020 | |||||||||||||||||||||
| Average | Interest | Average | Average | Interest | Average | |||||||||||||||||
| Balance | and dividend | Yield | Balance | and dividend | Yield | |||||||||||||||||
| (In thousands, except yield/cost information) | (In thousands, except yield/cost information) | |||||||||||||||||||||
| Loan receivable Gross | $ | 866,518 | $ | 47,898 | 5.53 | % | $ | 797,735 | $ | 48,202 | 6.04 | % | ||||||||||
| Securities (1) | 24,602 | 391 | 1.59 | % | 20,264 | 415 | 2.05 | % | ||||||||||||||
| Other interest-earning assets | 91,999 | 115 | 0.13 | % | 58,438 | 360 | 0.62 | % | ||||||||||||||
| Total interest-earning assets | 983,119 | 48,404 | 4.92 | % | 876,437 | 48,977 | 5.59 | % | ||||||||||||||
| Allowance for loan losses | (5,154 | ) | (4,965 | ) | ||||||||||||||||||
| Non-interest-earning assets | 72,855 | 67,494 | ||||||||||||||||||||
| Total assets | $ | 1,050,820 | $ | 938,966 | ||||||||||||||||||
| Interest-bearing demand deposit | $ | 114,940 | $ | 696 | 0.61 | % | $ | 104,390 | $ | 768 | 0.74 | % | ||||||||||
| Savings and club accounts | 108,877 | 328 | 0.30 | % | 101,738 | 626 | 0.62 | % | ||||||||||||||
| Certificates of deposit | 316,690 | 3,335 | 1.05 | % | 372,535 | 7,860 | 2.11 | % | ||||||||||||||
| Total interest-bearing deposits | 540,507 | 4,359 | 0.81 | % | 578,663 | 9,254 | 1.60 | % | ||||||||||||||
| Borrowed money | 28,000 | 742 | 2.65 | % | 26,811 | 723 | 2.70 | % | ||||||||||||||
| Total interest-bearing liabilities | 568,507 | 5,101 | 0.90 | % | 605,474 | 9,977 | 1.65 | % | ||||||||||||||
| Non-interest-bearing demand deposit | 260,529 | 172,508 | ||||||||||||||||||||
| Other non-interest-bearing liabilities | 24,310 | 12,595 | ||||||||||||||||||||
| Total liabilities | 853,346 | 790,577 | ||||||||||||||||||||
| Equity | 197,474 | 148,389 | ||||||||||||||||||||
| Total liabilities and equity | $ | 1,050,820 | $ | 938,966 | ||||||||||||||||||
| Net interest income / interest spread | $ | 43,303 | 4.03 | % | $ | 39,000 | 3.94 | % | ||||||||||||||
| Net interest rate margin | 4.40 | % | 4.45 | % | ||||||||||||||||||
| Net interest earning assets | $ | 414,612 | $ | 270,963 | ||||||||||||||||||
| Average interest-earning assets | ||||||||||||||||||||||
| to interest-bearing liabilities | 172.93% | 144.75% | ||||||||||||||||||||
_____________
(1) Includes Federal Home Loan Bank of New York stock.
