Ponce Bank Exceeds ECIP Targets and Qualifies for 0.5% Preferred Stock Dividend Rate
June 20 2024 - 10:20AM
Ponce Financial Group, Inc., (the “Company”) (NASDAQ: PDLB), the
holding company for Ponce Bank (the “Bank”), today reported that
the Bank exceeded the dividend rate reduction threshold for
Qualified Lending targets designated by the U.S. Treasury
Department pursuant to the Emergency Capital Investment Program
("ECIP"). The Bank's “qualified lending” as measured pursuant to
ECIP totaled $1.162 billion from June 8, 2023 through March 31,
2024. This critical milestone of the ECIP program reduces the
dividend obligation on Ponce Financial Group’s $225.0 million
Senior Non-Cumulative Perpetual Preferred Stock payable to the U.S.
Treasury Department from 2.0% to 0.50% for the quarterly dividends
payable through June 2025, resulting in a one-year annualized
savings of $3.375 million.
The Bank achieved this milestone during the
first official reporting period of the program with $717.73 million
in Qualified Lending and of which $445.08 million were also Deep
Impact Lending. Under ECIP, Deep Impact Lending is given double
credit, bringing the amount to $890.15 million, and total
“qualified lending” as measured pursuant to the ECIP to $1.162
billion. The ECIP program was created to encourage low- and
moderate-income community financial institutions to augment their
efforts to support the small businesses and consumers in their
communities that often struggle to find support from larger
institutions.
The Bank's President and Chief Executive Officer
Carlos P. Naudon noted, “Despite a myriad of systemic pressures,
our nation’s community banks, particularly those designated CDFI
and MDI, continue to deliver impact far above their weight. We are
engines of economic equity operating in an environment often skewed
against it. We’re seeing more and more recognition of this fact,
and we hope that the U.S. Government, our regulators, shareholders,
and especially depositors, continue to recognize the positive
impact their support has on systemically critical institutions like
Ponce Bank.”
He went on to note “How proud I am of our Ponce
People who worked tirelessly throughout the pandemic and continue
to do so, as they prove how right the forward-looking folks at
Treasury were to put these funds into the hands of our institution
so we can prove how adept we are at providing loans and financial
services in areas that provide the most systemic impact.”
Backing up Naudon’s comments, Ponce Bank’s
analysis on its Community Reinvestment Act performance reflected
that out of 579 mortgage lenders in the Bank’s assessment area,
Ponce Bank ranked in the top 3% for lending within low- to
moderate-income tracts based on total dollars originated and ranked
in the top 5% in lending to minority borrowers.
By achieving these stellar results during the
first ECIP assessment period, Ponce Bank secures the maximum
dividend reduction possible for the coming year.
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; 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.
Contact:Sergio
VaccaroSergio.vaccaro@poncebank.net718-931-9000
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