NorthEast Community Bancorp, Inc. (Nasdaq: NECB) (the
“Company”), the parent holding company of NorthEast Community Bank
(the “Bank”), reported net income of $730,000 and $7.7 million, or
$0.05 and $0.48 per basic and diluted common share, for the
three months and nine months ended September 30, 2021,
respectively, compared to net income of $3.1 million and $8.9
million, or $0.26 and $0.74 per basic and diluted common share, for
the three months and nine months ended September 30, 2020,
respectively.
Kenneth A. Martinek, NorthEast Community Bancorp’s Chairman of
the Board and Chief Executive Officer, stated “Although we
generated net income of $730,000 for the quarter, we are pleased to
report that the performance of our loan portfolio remains strong
with no loans past due and in foreclosure at September 30, 2021.
Throughout the COVID-19 pandemic, loan demand remained strong with
originations and outstanding commitments increasing quarter over
quarter. Our commitments, loans-in-process, and standby letters of
credit outstanding totaled $779.1 million as of September 30, 2021.
At this time, we have two loans on deferral as a result of the
COVID-19 pandemic, both with conservative loan to value ratios. As
has been in the past, construction lending for affordable housing
units in homogeneous high demand high absorption areas continues to
be our focus.”
Highlights for the three and nine months ended and at September
30, 2021 are as follows:
- During the nine months ended
September 30, 2021, the Company recorded net income of $7.7
million, or $0.48 per basic and diluted share.
- Net interest income increased by
$1.1 million, or 11.3%, for the three months ended September
30, 2021 compared to the same period in the prior year.
- Asset quality metrics continued to
remain strong with non-performing assets to total assets of 0.18%
as of September 30, 2021 compared to 0.58% as of December 31, 2020.
Our allowance for loan losses totaled $5.2 million, or 0.58% of
total loans as of September 30, 2021 compared to $5.1 million, or
0.62% of total loans as of September 30, 2020.
- In accordance with the provisions
of the Coronavirus Aid, Relief, and Economic Security Act (the
“CARES Act”) since March 2020, we have granted pandemic-related
loan payment deferrals to 196 loans totaling $190.9 million at the
time payment deferral was requested. As of September 30, 2021, we
had two loans totaling $8.9 million still in deferral status.
Balance SheetTotal assets increased by
$139.8 million, or 14.4%, to $1.1 billion at September 30,
2021, from $968.2 million at December 31, 2020. The
increase in assets was primarily due to increases in net loans of
$84.8 million, cash and cash equivalents of $38.8 million,
investment securities held-to-maturity of $6.0 million, premises
and equipment of $4.9 million, and investment in equity securities
of $4.8 million.
Cash and cash equivalents increased by $38.8 million, or
56.1%, to $108.0 million at September 30, 2021 from
$69.2 million at December 31, 2020. The increase in cash
can primarily be attributed to an increase in deposits of $45.1
million and an increase in stockholders’ equity primarily due to
the completion of the second-step conversion offering that
increased stockholders’ equity by $88.4 million, net of conversion
costs, partially offset by an increase in loans of $84.8 million,
an increase in investment securities held-to-maturity of $6.0
million, an increase in equity securities of $4.8 million, an
increase in property and equipment of $4.9 million due primarily to
the purchase of property for a new branch office, and cash
dividends of $1.3 million.
Equity securities increased by $4.8 million, or 46.3%, to $15.1
million at September 30, 2021 from $10.3 million at December 31,
2020. The increase in equity securities was primarily attributed to
the purchase of equity securities totaling $5.0 million, partially
offset by market depreciation of $215,000.
Securities held-to-maturity increased by $6.0 million, or 81.8%,
to $13.4 million at September 30, 2021 from $7.4 million
at December 31, 2020. The increase was primarily due to the
purchase of investment securities totaling $10.3 million, partially
offset by maturities and pay-downs of $4.3 million.
Loans, net of the allowance for loan losses, increased by
$84.8 million, or 10.3%, to $904.6 million at September
30, 2021 from $819.7 million at December 31, 2020. The
increase in loans, net of the allowance for loan losses, was
primarily due to a net increase in construction loans of
$87.5 million, commercial and industrial loans of $13.2
million, and multi-family loans of $612,000. The increases were
partially offset by decreases in non-residential loans of
$8.6 million, mixed-use loans of $6.1 million, and one-
to four-family loans of $1.4 million, coupled with normal pay-downs
and principal reductions.
Premises and equipment increased by $4.9 million, or 26.1%, to
$23.5 million at September 30, 2021 from $18.7 million at
December 31, 2020 due to the acquisition of property for a new
branch site located in Monsey, New York.
Foreclosed real estate was $2.0 million at both September
30, 2021 and December 31, 2020.
Right of use assets — operating, recognized in accordance with
Accounting Standards Codification 842 “Leases”, decreased by
$397,000, or 12.8%, to $2.7 million at September 30, 2021 from
$3.1 million at December 31, 2020, primarily due to
amortization.
Other assets increased by $286,000, or 5.7%, to
$5.3 million at September 30, 2021 from $5.1 million at
December 31, 2020 due to an increase in tax assets of $347,000
and an increase in prepaid expense of $233,000, partially offset by
a decrease in suspense accounts of $351,000.
Total deposits increased by $45.1 million, or 5.8%, to
$816.8 million at September 30, 2021, from $771.7 million
at December 31, 2020. The increase was primarily due to an
increase in non-interest bearing demand deposits
of $85.3 million, or 38.5%, and an increase in NOW/money
market accounts of $17.1 million, or 17.0%, from December 31,
2020 to September 30, 2021. These increases were partially offset
by a decrease in certificates of deposit of $53.2 million, or
15.3%, and a decrease in savings account balances of $4.1 million,
or 4.0%, from December 31, 2020 to September 30, 2021.
Federal Home Loan Bank advances were $28.0 million at both
September 30, 2021 and December 31, 2020.
Accounts payable and accrued expenses increased by $232,000, or
2.6%, to $9.1 million at September 30, 2021 from $8.8 million at
December 31, 2020 due primarily to an increase in deferred
compensation of $439,000, partially offset by a decrease in accrued
expenses of $177,000.
Stockholders’ equity increased by $94.9 million, or 61.7%
to $248.7 million at September 30, 2021, from
$153.8 million at December 31, 2020. The increase in
stockholders’ equity was primarily a result of the completion of
the second-step conversion offering that increased stockholders’
equity by $88.4 million, net of conversion costs. The second-step
conversion also reduced stockholders’ equity by the addition of new
unearned employee stock ownership plan shares totaling $7.8 million
and increased stockholders’ equity by the retirement of treasury
shares totaling $7.0 million.
The increase in stockholders’ equity was also due to net income
of $7.7 million for the nine months ended September 30,
2021 and a reduction of $693,000 in unearned employee stock
ownership plan shares, partially offset by dividends paid of $1.3
million and $8,000 in other comprehensive loss.
Net Interest IncomeNet interest income totaled
$10.9 million for the three months ended September
30, 2021, as compared to $9.8 million for
the three months ended September 30, 2020. The increase
in net interest income of $1.1 million, or 11.3%, was primarily due
to an increase in interest income combined with a decrease in
interest expense.
The increase in interest income is attributed to increases in
loans, investment securities, equity securities, and
interest-bearing deposits as we continued to deploy the proceeds
raised in the second-step conversion. The decrease in interest
expense is consistent with the decrease in interest rates in
response to the COVID-19 pandemic and its impact on the economy and
interest rate environment.
In this regard, interest and dividend income increased by
$93,000, or 0.8%, to $12.1 million for the three months ended
September 30, 2021 from $12.0 million for the three months ended
September 30, 2020 due to an increase in the average balance of
interest earning assets of $136.1 million, or 15.3%, to $1.0
billion for the three months ended September 30, 2021 from $888.6
million for the three months ended September 30, 2020, partially
offset by a decrease in the yield on interest earning assets by 68
basis points from 5.40% for the three months ended September 30,
2020 to 4.72% for the three months ended September 30, 2021.
Interest expense decreased by $1.0 million, or 46.1%, to
$1.2 million for the three months ended September 30, 2021 from
$2.2 million for the three months ended September 30, 2020 due to a
decrease in average interest bearing liabilities of
$50.6 million, or 8.5%, to $547.9 million for the three months
ended September 30, 2021 from $598.6 million for the three months
ended September 30, 2020 and a decrease in the cost of interest
bearing liabilities by 61 basis points from 1.47% for the three
months ended September 30, 2020 to 0.86% for the three months ended
September 30, 2021.
Net interest margin decreased by 15 basis points, or 3.4%,
during the three months ended September 30, 2021 to 4.26%
compared to 4.41% during the three months ended September 30,
2020.
Net interest income totaled $31.6 million for the nine
months ended September 30, 2021, as compared to $28.8 million
for the nine months ended September 30, 2020. The increase in
net interest income of $2.9 million, or 10.0%, was primarily due to
the decrease in interest expense that exceeded a decrease in
interest income.
In a manner consistent with the decrease in interest rates in
response to the COVID-19 pandemic, our cost of interest bearing
liabilities decreased much greater than our yield on interest
earning assets as our interest bearing liabilities repriced much
faster to lower rates than our yield on interest earning assets. In
this regard, our cost of interest bearing liabilities decreased by
85 basis points from 1.78% for the nine months ended September 30,
2020 to 0.93% for the nine months ended September 30, 2021. Our
yield on interest earning assets decreased by 65 basis points from
5.64% for the nine months ended September 30, 2020 to 4.99% for the
nine months ended September 30, 2021.
Net interest margin increased by 5 basis points, or 1.1%, during
the nine months ended September 30, 2021 to 4.44% compared to
4.39% during the nine months ended September 30, 2020.
Provision for Loan LossesThe Company recorded a
loan loss provision of $3.6 million for the three months ended
September 30, 2021 compared to a loan loss provision of $229,000
for the three months ended September 30, 2020. We charged-off a
total of $3.6 million and $7,000 during the three months ended
September 30, 2021 and September 30, 2020, respectively.
The provision recorded for the three months ended September 30,
2021 was primarily attributed to the previously disclosed
charge-off of $3.6 million during the three months ended September
30, 2021 regarding a non-residential bridge loan secured by real
estate with a balance of $3.6 million. The loan is secured by
commercial real estate located in Greenwich, Connecticut and
guaranteed by the two borrowers. The loan was originated in 2016 as
a two-year bridge loan and, upon the borrower’s failure to satisfy
the loan at the maturity date, the loan was accelerated and a
foreclosure action was instituted. The loan remains in foreclosure
but is subject to Connecticut’s continuing foreclosure backlog. The
property securing the loan is subject to a parking easement and
based on a recently updated appraisal showing the property’s value
with the parking easement to be zero, the Company has determined to
write off the $3.6 million loan as a non-cash charge against the
allowance for loan losses.
The Company intends to aggressively seek recovery of all amounts
due from the personal guarantors of the loan. However, the recovery
process is uncertain and might take an extended period of time to
resolve this matter. In the event the Company is successful against
the guarantors, any recovery received would be added back to the
allowance for loan losses and an analysis will be performed at that
time to determine the appropriateness of the recovery into
income.
We also charged-off $3,000 and $7,000 during the three months
ended September 30, 2021 and September 30, 2020, respectively,
against various unpaid overdrafts in our demand deposit accounts.
We recorded recoveries of $151,000 and $1,000 during the three
months ended September 30, 2021 and September 30, 2020,
respectively.
The Company recorded a loan loss provision of $3.6 million for
the nine months ended September 30, 2021 compared to a loan loss
provision of $762,000 for the nine months ended September 30,
2020.
The provision recorded for the nine months ended September 30,
2021 was primarily attributed to the charge-off of the
aforementioned non-residential bridge loan with a balance of $3.6
million secured by commercial real estate located in Greenwich,
Connecticut.
The provision recorded for the nine months ended September 30,
2020 was primarily attributed to the perceived potential credit
risk associated with the COVID-19 pandemic, although no specific or
probable losses were identified at that time. Although the COVID-19
pandemic and the resulting recession has impacted the local
economy, we have not experienced any significant deterioration of
our borrowers’ ability to keep current in accordance with the terms
of their obligations.
We also charged-off $23,000 and $10,000 during the nine months
ended September 30, 2021 and September 30, 2020, respectively,
against various unpaid overdrafts in our demand deposit accounts.
We recorded recoveries of $160,000 and $25,000 during the nine
months ended September 30, 2021 and September 30, 2020,
respectively.
Non-Interest IncomeNon-interest income for the
three months ended September 30, 2021 was $532,000 compared to
non-interest income of $527,000 for the three months ended
September 30, 2020. The increase in total non-interest income was
primarily due to an increase of $130,000 in other loan fees and
service charges, an increase of $27,000 in investment advisory
fees, and a net loss of $2,000 on the sale of fixed assets that
occurred during the three months ended September 30, 2020 compared
to none during the three months ended September 30, 2021. These
increases were partially offset by unrealized loss on equity
securities of $154,000 during the three months ended September 30,
2021 compared to none during the three months ended September 30,
2020.
Non-interest income for the nine months ended September 30, 2021
was $1.8 million compared to non-interest income of $2.0 million
for the nine months ended September 30, 2020. The decrease in total
non-interest income was primarily due to an unrealized loss of
$215,000 in our equity securities in the 2021 period compared to an
unrealized gain of $299,000 in the comparable period in 2020, a
decrease of $120,000 in other non-interest income, and a decrease
of $10,000 in bank owned life insurance income. These were
partially offset by an increase of $374,000 in other loan fees and
service charges, an increase of $63,000 in investment advisory
fees, and a net gain of $7,000 on the sale of fixed assets in the
2021 period compared to a net loss of $2,000 on the sale of fixed
assets in the 2020 period.
Non-Interest ExpenseNon-interest expense
increased by $839,000, or 13.9%, to $6.9 million for
the three months ended September 30, 2021 from
$6.0 million for the three months ended September
30, 2020. The increase resulted primarily from increases of
$889,000 in salaries and employee benefits, $37,000 in equipment
expense, $15,000 in other operating expense, $9,000 in advertising
expense, and $9,000 in occupancy expense, partially offset by
decreases of $54,000 in outside data processing expense, $50,000 in
impairment loss on goodwill, and $16,000 in real estate owned
expense.
Non-interest expense increased by $1.3 million, or 7.3%, to
$19.7 million for the nine months ended September 30,
2021 from $18.4 million for the nine months ended
September 30, 2020. The increase resulted primarily from increases
of $1.2 million in salaries and employee benefits, $210,000 in
other operating expense, $114,000 in equipment expense, and $98,000
in occupancy expense, partially offset by decreases of $90,000 in
real estate owned expense, $80,000 in outside data processing
expense, $61,000 in advertising expense, and $50,000 in impairment
loss on goodwill.
Income TaxesWe recorded income tax expense
of $265,000 and $956,000 for the three months ended
September 30, 2021 and 2020, respectively. For
the three months ended September 30, 2021, we had
approximately $185,000 in tax exempt income, compared to
approximately $166,000 in tax exempt income for
the three months ended September 30, 2020. Our effective
income tax rates were 26.6% and 23.4% for
the three months ended September 30, 2021 and 2020,
respectively.
We recorded income tax expense of $2.4 million and $2.7 million
for the nine months ended September 30, 2021 and 2020,
respectively. For the nine months ended September 30, 2021, we
had approximately $522,000 in tax exempt income, compared to
approximately $337,000 in tax exempt income for the nine
months ended September 30, 2020. Our effective income tax rates
were 23.6% and 23.4% for the nine months ended September 30,
2021 and 2020, respectively.
Asset QualityDuring the nine months ended
September 30, 2021, non-performing assets decreased by $3.6
million, or 64.2%, to $2.0 million from $5.6 million as
of December 31, 2020. The decrease in non-performing assets
was primarily due to the previously disclosed charge-off of $3.6
million on a non-accrual, non-residential bridge loan during 2021.
We had no non-performing loans at September 30, 2021 compared to
one non-performing loan at December 31, 2020. Our ratio of
non-performing assets to total assets remained low at 0.18% as of
September 30, 2021 compared to 0.58% as of December 31, 2020.
Based on a review of the loans that were in the loan portfolio
at September 30, 2021, management believes that the allowance is
maintained at a level that represents its best estimate of inherent
losses in the loan portfolio that were both probable and reasonably
estimable.
Our allowance for loan losses totaled $5.2 million, or 0.58% of
total loans as of September 30, 2021, compared to $5.1 million, or
0.62% of total loans as of December 31, 2020.
CapitalThe Bank’s capital position remains
strong relative to current regulatory requirements and is
considered a well-capitalized institution under the Prompt
Corrective Action framework. As of September 30, 2021, the Bank had
a tier 1 leverage capital ratio of 17.07% and a total risk-based
capital ratio of 15.91%. The Company’s total stockholder’s equity
to assets was 22.45% as of September 30, 2021. At September 30,
2021, the Company had the ability to borrow $39.0 million from the
Federal Home Loan Bank of New York.
About NorthEast Community BancorpNorthEast
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 StatementThis 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.
NORTHEAST COMMUNITY
BANCORP, INC.CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION(Unaudited)
|
|
September 30, |
|
December 31, |
|
|
2021 |
|
|
2020 |
|
|
|
(In thousands, except share |
|
|
and per share amounts) |
ASSETS |
|
|
|
|
|
|
Cash and amounts due from depository institutions |
|
$ |
6,728 |
|
|
$ |
7,613 |
|
Interest-bearing deposits |
|
|
101,285 |
|
|
|
61,578 |
|
Total Cash and cash equivalents |
|
|
108,013 |
|
|
|
69,191 |
|
Certificates of deposit |
|
|
100 |
|
|
|
100 |
|
Equity securities |
|
|
15,117 |
|
|
|
10,332 |
|
Securities available-for-sale,
at fair value |
|
|
2 |
|
|
|
2 |
|
Securities held-to-maturity
(fair value of $13,083 and $7,519, respectively) |
|
|
13,422 |
|
|
|
7,382 |
|
Loans receivable |
|
|
909,466 |
|
|
|
824,708 |
|
Deferred loan costs, net |
|
|
326 |
|
|
|
113 |
|
Allowance for loan losses |
|
|
(5,242 |
) |
|
|
(5,088 |
) |
Net loans |
|
|
904,550 |
|
|
|
819,733 |
|
Premises and equipment,
net |
|
|
23,544 |
|
|
|
18,675 |
|
Investments in restricted
stock, at cost |
|
|
1,569 |
|
|
|
1,595 |
|
Bank owned life insurance |
|
|
25,138 |
|
|
|
24,691 |
|
Accrued interest
receivable |
|
|
4,034 |
|
|
|
3,838 |
|
Goodwill |
|
|
651 |
|
|
|
651 |
|
Real estate owned |
|
|
1,996 |
|
|
|
1,996 |
|
Property held for
investment |
|
|
1,491 |
|
|
|
1,518 |
|
Right of Use
Assets – Operating |
|
|
2,697 |
|
|
|
3,094 |
|
Right of Use
Assets – Financing |
|
|
360 |
|
|
|
363 |
|
Other assets |
|
|
5,346 |
|
|
|
5,060 |
|
Total assets |
|
$ |
1,108,030 |
|
|
$ |
968,221 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Non-interest bearing |
|
$ |
306,645 |
|
|
$ |
221,371 |
|
Interest bearing |
|
|
510,190 |
|
|
|
550,335 |
|
Total deposits |
|
|
816,835 |
|
|
|
771,706 |
|
Advance payments by borrowers
for taxes and insurance |
|
|
2,184 |
|
|
|
2,258 |
|
Federal Home Loan Bank
advances |
|
|
28,000 |
|
|
|
28,000 |
|
Lease
Liability – Operating |
|
|
2,736 |
|
|
|
3,115 |
|
Lease
Liability – Financing |
|
|
487 |
|
|
|
460 |
|
Accounts payable and accrued
expenses |
|
|
9,089 |
|
|
|
8,857 |
|
Total liabilities |
|
|
859,331 |
|
|
|
814,396 |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock, $0.01 and $0.01 par value; 25,000,000 shares and
1,340,000 shares authorized; none issued or outstanding,
respectively |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 and $0.01 par value; 75,000,000 shares and
25,460,000 shares authorized; 16,377,936 shares and 17,721,500
shares issued; and 16,377,936 shares and 16,340,779 shares
outstanding, respectively¹ |
|
$ |
164 |
|
|
$ |
132 |
|
Additional paid-in capital |
|
|
145,315 |
|
|
|
56,901 |
|
Unearned Employee Stock Ownership Plan (“ESOP”) shares |
|
|
(8,518 |
) |
|
|
(1,296 |
) |
Treasury stock – at cost, 0 and 1,380,721 shares,
respectively¹ |
|
|
- |
|
|
|
(7,032 |
) |
Retained earnings |
|
|
111,932 |
|
|
|
105,305 |
|
Accumulated other comprehensive loss |
|
|
(194 |
) |
|
|
(185 |
) |
Total stockholders’ equity |
|
|
248,699 |
|
|
|
153,825 |
|
Total liabilities and stockholders’ equity |
|
$ |
1,108,030 |
|
|
$ |
968,221 |
|
|
|
|
|
|
|
|
¹Shares amounts related to periods prior to the July 12, 2021
closing of the conversion offering have been restated to give
retroactive recognition to the 1.34 exchange ratio applied in the
conversion offering.
NORTHEAST COMMUNITY
BANCORP, INC.CONSOLIDATED STATEMENTS OF
INCOME(Unaudited)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
(In thousands, except per share amounts) |
INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
11,935 |
|
|
$ |
11,882 |
|
|
$ |
35,237 |
|
|
$ |
36,323 |
|
Interest-earning deposits |
|
|
53 |
|
|
|
15 |
|
|
|
74 |
|
|
|
346 |
|
Securities |
|
|
104 |
|
|
|
102 |
|
|
|
277 |
|
|
|
325 |
|
Total Interest Income |
|
|
12,092 |
|
|
|
11,999 |
|
|
|
35,588 |
|
|
|
36,994 |
|
INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
995 |
|
|
|
2,007 |
|
|
|
3,390 |
|
|
|
7,692 |
|
Borrowings |
|
|
178 |
|
|
|
178 |
|
|
|
528 |
|
|
|
509 |
|
Financing lease |
|
|
9 |
|
|
|
9 |
|
|
|
27 |
|
|
|
27 |
|
Total Interest Expense |
|
|
1,182 |
|
|
|
2,194 |
|
|
|
3,945 |
|
|
|
8,228 |
|
Net Interest Income |
|
|
10,910 |
|
|
|
9,805 |
|
|
|
31,643 |
|
|
|
28,766 |
|
Provision for loan
loss |
|
|
3,593 |
|
|
|
229 |
|
|
|
3,610 |
|
|
|
762 |
|
Net Interest Income after Provision for Loan
Losses |
|
|
7,317 |
|
|
|
9,576 |
|
|
|
28,033 |
|
|
|
28,004 |
|
NON-INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Other loan fees and service charges |
|
|
381 |
|
|
|
251 |
|
|
|
1,095 |
|
|
|
721 |
|
Gain (loss) on disposition of equipment |
|
|
— |
|
|
|
(2 |
) |
|
|
7 |
|
|
|
(2 |
) |
Earnings on bank owned life insurance |
|
|
152 |
|
|
|
152 |
|
|
|
447 |
|
|
|
457 |
|
Investment advisory fees |
|
|
139 |
|
|
|
112 |
|
|
|
381 |
|
|
|
318 |
|
Unrealized gain (loss) on equity securities |
|
|
(154 |
) |
|
|
- |
|
|
|
(215 |
) |
|
|
299 |
|
Other |
|
|
14 |
|
|
|
14 |
|
|
|
38 |
|
|
|
157 |
|
Total Non-Interest Income |
|
|
532 |
|
|
|
527 |
|
|
|
1,753 |
|
|
|
1,950 |
|
NON-INTEREST
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
4,054 |
|
|
|
3,165 |
|
|
|
11,223 |
|
|
|
10,031 |
|
Occupancy expense |
|
|
489 |
|
|
|
480 |
|
|
|
1,534 |
|
|
|
1,436 |
|
Equipment |
|
|
229 |
|
|
|
192 |
|
|
|
718 |
|
|
|
604 |
|
Outside data processing |
|
|
395 |
|
|
|
449 |
|
|
|
1,218 |
|
|
|
1,298 |
|
Advertising |
|
|
36 |
|
|
|
27 |
|
|
|
83 |
|
|
|
144 |
|
Impairment loss on goodwill |
|
|
- |
|
|
|
50 |
|
|
|
- |
|
|
|
50 |
|
Real estate owned expense |
|
|
18 |
|
|
|
34 |
|
|
|
85 |
|
|
|
175 |
|
Other |
|
|
1,633 |
|
|
|
1,618 |
|
|
|
4,857 |
|
|
|
4,647 |
|
Total Non-Interest Expenses |
|
|
6,854 |
|
|
|
6,015 |
|
|
|
19,718 |
|
|
|
18,385 |
|
INCOME BEFORE
PROVISION FOR INCOME TAXES |
|
|
995 |
|
|
|
4,088 |
|
|
|
10,068 |
|
|
|
11,569 |
|
PROVISION FOR INCOME
TAXES |
|
|
265 |
|
|
|
956 |
|
|
|
2,372 |
|
|
|
2,703 |
|
NET
INCOME |
|
$ |
730 |
|
|
$ |
3,132 |
|
|
$ |
7,696 |
|
|
$ |
8,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORTHEAST COMMUNITY
BANCORP, INC.SELECTED CONSOLIDATED FINANCIAL
DATA(Unaudited)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
(In thousands, except per share amounts) |
|
(In thousands, except per share amounts) |
Per share
data: |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic and diluted¹ |
|
$ |
0.05 |
|
|
$ |
0.19 |
|
|
$ |
0.48 |
|
|
$ |
0.55 |
|
Weighted average shares outstanding - basic and diluted¹ |
|
|
15,572 |
|
|
|
16,154 |
|
|
|
15,973 |
|
|
|
16,146 |
|
Performance
ratios/data: |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average total assets |
|
|
0.27 |
% |
|
|
1.32 |
% |
|
|
1.01 |
% |
|
|
1.26 |
% |
Return on average shareholders' equity |
|
|
1.31 |
% |
|
|
8.37 |
% |
|
|
5.72 |
% |
|
|
8.05 |
% |
Net interest income |
|
$ |
10,910 |
|
|
$ |
9,805 |
|
|
$ |
31,643 |
|
|
$ |
28,766 |
|
Net interest margin |
|
|
4.26 |
% |
|
|
4.41 |
% |
|
|
4.44 |
% |
|
|
4.39 |
% |
Efficiency ratio |
|
|
59.90 |
% |
|
|
58.50 |
% |
|
|
59.04 |
% |
|
|
59.95 |
% |
Net charge-off ratio |
|
|
1.60 |
% |
|
|
0.00 |
% |
|
|
0.55 |
% |
|
|
0.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan portfolio
composition: |
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
December 31, 2020 |
One-to-four family |
|
|
|
|
|
|
|
$ |
4,766 |
|
|
$ |
6,170 |
|
Multi-family |
|
|
|
|
|
|
|
|
91,118 |
|
|
|
90,506 |
|
Mixed-use |
|
|
|
|
|
|
|
|
24,440 |
|
|
|
30,508 |
|
Total residential real estate |
|
|
|
|
|
|
|
|
120,324 |
|
|
|
127,184 |
|
Non-residential real estate |
|
|
|
|
|
|
|
|
52,020 |
|
|
|
60,665 |
|
Construction |
|
|
|
|
|
|
|
|
633,263 |
|
|
|
545,788 |
|
Commercial and industrial |
|
|
|
|
|
|
|
|
103,808 |
|
|
|
90,577 |
|
Overdrafts |
|
|
|
|
|
|
|
|
14 |
|
|
|
452 |
|
Consumer |
|
|
|
|
|
|
|
|
37 |
|
|
|
42 |
|
Gross loans |
|
|
|
|
|
|
|
|
909,466 |
|
|
|
824,708 |
|
Deferred loan (fees) costs, net |
|
|
|
|
|
|
|
|
326 |
|
|
|
113 |
|
Total loans |
|
|
|
|
|
|
|
$ |
909,792 |
|
|
$ |
824,821 |
|
Asset quality
data: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans past due over 90 days and still accruing |
|
|
|
|
|
|
|
$ |
- |
|
|
$ |
- |
|
Non-accrual loans |
|
|
|
|
|
|
|
|
- |
|
|
|
3,572 |
|
OREO property |
|
|
|
|
|
|
|
|
1,996 |
|
|
|
1,996 |
|
Total non-performing
assets |
|
|
|
|
|
|
|
$ |
1,996 |
|
|
$ |
5,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to
total loans |
|
|
|
|
|
|
|
|
0.58 |
% |
|
|
0.62 |
% |
Allowance for loan losses to
non-performing loans |
|
|
|
|
|
|
|
|
NA |
|
|
|
142.44 |
% |
Non-performing loans to total
loans |
|
|
|
|
|
|
|
|
0.00 |
% |
|
|
0.43 |
% |
Non-performing assets to total
assets |
|
|
|
|
|
|
|
|
0.18 |
% |
|
|
0.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank's Regulatory
Capital ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital to risk-weighted assets |
|
|
|
|
|
|
|
|
15.91 |
% |
|
|
13.72 |
% |
Total capital to risk-weighted assets |
|
|
|
|
|
|
|
|
15.48 |
% |
|
|
13.23 |
% |
Tier 1 capital to risk-weighted assets |
|
|
|
|
|
|
|
|
15.48 |
% |
|
|
13.23 |
% |
Tier 1 leverage ratio |
|
|
|
|
|
|
|
|
17.07 |
% |
|
|
14.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
¹Shares amounts related to periods prior to the July 12, 2021
closing of the conversion offering have been restated to give
retroactive recognition to the 1.34 exchange ratio applied in the
conversion offering.
NORTHEAST COMMUNITY
BANCORP, INC.NET INTEREST MARGIN
ANALYSIS(Unaudited)
|
|
Three Months Ended
September 30, 2021 |
|
Three Months Ended September 30, 2020 |
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
|
|
Average |
|
|
Balance |
|
and dividend |
|
Yield |
|
Balance |
|
Interest |
|
Yield |
|
|
(In thousands, except yield/cost
information) |
|
(In thousands, except yield/cost
information) |
Loan receivable Gross |
|
$ |
862,796 |
|
|
$ |
11,935 |
|
|
5.53 |
% |
|
$ |
807,465 |
|
|
$ |
11,882 |
|
|
5.89 |
% |
Securities (1) |
|
|
27,208 |
|
|
|
104 |
|
|
1.53 |
% |
|
|
20,190 |
|
|
|
102 |
|
|
2.02 |
% |
Other interest-earning
assets |
|
|
134,680 |
|
|
|
53 |
|
|
0.16 |
% |
|
|
60,974 |
|
|
|
15 |
|
|
0.10 |
% |
Total interest-earning assets |
|
|
1,024,684 |
|
|
|
12,092 |
|
|
4.72 |
% |
|
|
888,629 |
|
|
|
11,999 |
|
|
5.40 |
% |
Allowance for loan losses |
|
|
(5,181 |
) |
|
|
|
|
|
|
|
|
(5,167 |
) |
|
|
|
|
|
|
Non-interest-earning
assets |
|
|
73,990 |
|
|
|
|
|
|
|
|
|
65,773 |
|
|
|
|
|
|
|
Total assets |
|
$ |
1,093,493 |
|
|
|
|
|
|
|
|
$ |
949,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposit |
|
$ |
117,329 |
|
|
$ |
183 |
|
|
0.62 |
% |
|
$ |
100,287 |
|
|
$ |
151 |
|
|
0.60 |
% |
Savings and club accounts |
|
|
97,556 |
|
|
|
48 |
|
|
0.20 |
% |
|
|
102,065 |
|
|
|
84 |
|
|
0.33 |
% |
Certificates of deposit |
|
|
305,057 |
|
|
|
764 |
|
|
1.00 |
% |
|
|
368,220 |
|
|
|
1,772 |
|
|
1.92 |
% |
Total interest-bearing deposits |
|
|
519,942 |
|
|
|
995 |
|
|
0.77 |
% |
|
|
570,572 |
|
|
|
2,007 |
|
|
1.41 |
% |
Borrowed money |
|
|
28,000 |
|
|
|
187 |
|
|
2.67 |
% |
|
|
28,000 |
|
|
|
187 |
|
|
2.67 |
% |
Total interest-bearing liabilities |
|
|
547,942 |
|
|
|
1,182 |
|
|
0.86 |
% |
|
|
598,572 |
|
|
|
2,194 |
|
|
1.47 |
% |
Non-interest-bearing
demand deposit |
|
|
281,499 |
|
|
|
|
|
|
|
|
|
188,616 |
|
|
|
|
|
|
|
Other
non-interest-bearing liabilities |
|
|
41,992 |
|
|
|
|
|
|
|
|
|
12,336 |
|
|
|
|
|
|
|
Total liabilities |
|
|
871,433 |
|
|
|
|
|
|
|
|
|
799,524 |
|
|
|
|
|
|
|
Equity |
|
|
222,060 |
|
|
|
|
|
|
|
|
|
149,711 |
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,093,493 |
|
|
|
|
|
|
|
|
$ |
949,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income / interest spread |
|
|
|
|
$ |
10,910 |
|
|
3.86 |
% |
|
|
|
|
$ |
9,805 |
|
|
3.93 |
% |
Net interest rate margin |
|
|
|
|
|
|
|
|
4.26 |
% |
|
|
|
|
|
|
|
|
4.41 |
% |
Net interest earning assets |
|
$ |
476,742 |
|
|
|
|
|
|
|
|
$ |
290,057 |
|
|
|
|
|
|
|
Average interest-earning assets to interest-bearing
liabilities |
|
|
187.01 |
% |
|
|
|
|
|
|
|
|
148.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________(1) Includes Federal Home Loan Bank of New York
stock.
|
|
Nine Months Ended
September 30, 2021 |
|
Nine Months Ended
September 30, 2020 |
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
|
|
Average |
|
|
Balance |
|
and dividend |
|
Yield |
|
Balance |
|
Interest |
|
Yield |
|
|
(In thousands, except yield/cost
information) |
|
(In thousands, except yield/cost
information) |
Loan receivable Gross |
|
$ |
843,850 |
|
|
$ |
35,237 |
|
|
5.57 |
% |
|
$ |
793,002 |
|
|
$ |
36,323 |
|
|
6.11 |
% |
Securities (1) |
|
|
22,636 |
|
|
|
277 |
|
|
1.63 |
% |
|
|
20,519 |
|
|
|
325 |
|
|
2.11 |
% |
Other interest-earning
assets |
|
|
84,465 |
|
|
|
74 |
|
|
0.12 |
% |
|
|
61,044 |
|
|
|
346 |
|
|
0.76 |
% |
Total interest-earning assets |
|
|
950,951 |
|
|
|
35,588 |
|
|
4.99 |
% |
|
|
874,565 |
|
|
|
36,994 |
|
|
5.64 |
% |
Allowance for loan losses |
|
|
(5,125 |
) |
|
|
|
|
|
|
|
|
(4,891 |
) |
|
|
|
|
|
|
Non-interest-earning
assets |
|
|
71,449 |
|
|
|
|
|
|
|
|
|
67,146 |
|
|
|
|
|
|
|
Total assets |
|
$ |
1,017,275 |
|
|
|
|
|
|
|
|
$ |
936,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposit |
|
$ |
113,370 |
|
|
$ |
503 |
|
|
0.59 |
% |
|
$ |
106,721 |
|
|
$ |
615 |
|
|
0.77 |
% |
Savings and club accounts |
|
|
100,431 |
|
|
|
174 |
|
|
0.23 |
% |
|
|
102,130 |
|
|
|
542 |
|
|
0.71 |
% |
Certificates of deposit |
|
|
321,956 |
|
|
|
2,712 |
|
|
1.12 |
% |
|
|
380,777 |
|
|
|
6,535 |
|
|
2.29 |
% |
Total interest-bearing deposits |
|
|
535,757 |
|
|
|
3,389 |
|
|
0.84 |
% |
|
|
589,628 |
|
|
|
7,692 |
|
|
1.74 |
% |
Borrowed money |
|
|
28,000 |
|
|
|
556 |
|
|
2.65 |
% |
|
|
26,391 |
|
|
|
536 |
|
|
2.71 |
% |
Total interest-bearing liabilities |
|
|
563,757 |
|
|
|
3,945 |
|
|
0.93 |
% |
|
|
616,019 |
|
|
|
8,228 |
|
|
1.78 |
% |
Non-interest-bearing
demand deposit |
|
|
247,258 |
|
|
|
|
|
|
|
|
|
162,278 |
|
|
|
|
|
|
|
Other
non-interest-bearing liabilities |
|
|
26,762 |
|
|
|
|
|
|
|
|
|
11,595 |
|
|
|
|
|
|
|
Total liabilities |
|
|
837,777 |
|
|
|
|
|
|
|
|
|
789,892 |
|
|
|
|
|
|
|
Equity |
|
|
179,498 |
|
|
|
|
|
|
|
|
|
146,928 |
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,017,275 |
|
|
|
|
|
|
|
|
$ |
936,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income / interest spread |
|
|
|
|
$ |
31,643 |
|
|
4.06 |
% |
|
|
|
|
$ |
28,766 |
|
|
3.86 |
% |
Net interest rate margin |
|
|
|
|
|
|
|
|
4.44 |
% |
|
|
|
|
|
|
|
|
4.39 |
% |
Net interest earning assets |
|
$ |
387,194 |
|
|
|
|
|
|
|
|
$ |
258,546 |
|
|
|
|
|
|
|
Average interest-earning assets to interest-bearing
liabilities |
|
|
168.68 |
% |
|
|
|
|
|
|
|
|
141.97 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________(1) Includes Federal Home Loan Bank of New York
stock.
CONTACT: Kenneth A. Martinek
Chairman and Chief Executive Officer
PHONE: (914) 684-2500
NorthEast Community Banc... (NASDAQ:NECB)
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NorthEast Community Banc... (NASDAQ:NECB)
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