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PDL Community Bancorp Announces 2018 First Quarter Results
YORK, May 09, 2018 (GLOBE NEWSWIRE) -- PDL Community Bancorp, (the “Company”) (NASDAQ:PDLB), the holding company for Ponce Bank (the “Bank”), reported net income of $941,000, or $0.05 per basic and diluted share for the quarter ended March 31, 2018 compared to net income of $563,000 for the same period in 2017. The Company was formed on September 29, 2017 in conjunction with the reorganization of Ponce De Leon Federal Bank, Ponce Bank’s predecessor, into Ponce Bank Mutual Holding Company, a mutual holding company. Accordingly, the Company’s financial results of prior periods are solely those of Ponce Bank.
“As we head into our first full calendar year as a public company, we are heartened that the key initiatives we have focused on are delivering expected results, and more,” said Steven A. Tsavaris, Executive Chairman. Carlos P. Naudon, President and CEO, noted that “we are pleased to report $24.3 million in internal loan growth during the first quarter of 2018, or a 12.3% annualized rate of growth.”
Net Interest Income
Net interest income was $8.7 million for the quarter ended March 31, 2018, up $1.4 million, or 19.2%, from $7.3 million for the quarter ended March 31, 2017. The increase in net interest income for the quarter ended March 31, 2018 compared to the same period in 2017 reflects a $1.9 million, or 21.8%, increase in total interest and dividend income offset by an increase of $537,000, or 35.9%, in total interest expense. The net interest rate spread and net interest margin were 3.61% and 3.95%, respectively, for the quarter ended March 31, 2018 compared to 3.88% and 4.09%, respectively, for the same period in 2017. The increase in interest and dividend income is primarily due to growth in the investor-owned one-to-four family, multifamily, nonresidential, and construction and land loans, that provided an increase in average outstanding loans of $154.3 million or 23.3%, for the quarter ended March 31, 2018 compared to the same period in 2017. The yield on loans decreased to 5.16% for the quarter ended March 31, 2018 from 5.26% for the same period in 2017. The increase in interest expense is primarily due to an increase in average certificates of deposits of $67.8 million or 18.7% for the quarter ended March 31, 2018 compared to the same period in 2017. The cost on certificates of deposits increased to 1.65% for the quarter ended March 31, 2018 from 1.47% for the same period in 2017. The cost of all interest-bearing liabilities increased to 1.26% for the quarter ended March 31, 2018 from 1.05% for the same period in 2017.
Noninterest Income
Noninterest income was $885,000 for the quarter ended March 31, 2018, up $127,000, or 16.8%, from $758,000 for the same period in 2017. The increase is mainly attributed to gains of $176,000 on loans sold combined with an increase of $28,000 in prepayment charges related to mortgage loans offset by decreases in late charges on loans of $23,000, brokerage commission income of $21,000, and line of credit fees $16,000.
Noninterest Expense
Noninterest expenses were $8.3 million for the quarter ended March 31, 2018, up $1.2 million, or 16.9%, from $7.1 million for the same period in 2017. The increase is mainly attributed to an increase of $629,000 in total compensation and benefits expense which included $189,000 in Employee Stock Ownership Plan expense and an increase of $425,000 in professional services.
Asset Quality
Nonperforming assets decreased to $9.3 million or 0.98% of total assets at March 31, 2018 from $11.4 million or 1.23% of total assets at December 31, 2017. The decrease is mainly attributed to decrease in nonaccruals of $847,000 in investor-owned one-to-four family residential, a decrease of $383,000 in owner-occupied one-to-four family residential, a decrease of $521,000 in multifamily residential properties, a decrease of $272,000 in nonresidential properties and a decrease of $117,000 in business loans. Additionally, 3 non-accruing loans totaling $1.8 million were sold for a net gain of $142,000 during the quarter. One of the loans sold included a recovery of $170,000.
Provision for loan losses was $94,000 for the quarter ended March 31, 2018, compared to $52,000 for the same period in 2017. The allowance for loan losses was $11.4 million, or 1.37%, of total loans at March 31, 2018, compared to $11.1 million, or 1.37%, of total loans at December 31, 2017. Net charge-offs totaled $5,000 for the quarter ended March 31, 2018, compared to $10,000 for the same period in 2017.
Balance Sheet
Total assets increased $24.1 million, or 2.6%, to $949.6 million at March 31, 2018 from $925.5 million at December 31, 2017. Net loans increased $24.3 million, or 3.0%, to $823.0 million at March 31, 2018 from $798.7 million at December 31, 2017. The increase in net loans was primarily attributed to increases of $15.9 million in multifamily residential and $7.3 million in nonresidential properties.
Total deposits increased $38.3 million, or 5.4%, to $752.3 million at March 31, 2018 from $714.0 million at December 31, 2017. The increase in deposits was primarily attributed to increases in certificates of deposits of $26.9 million and an increase of $7.0 million in demand deposits.
Total stockholders’ equity was $165.7 million at March 31, 2018 compared to $164.8 million at December 31, 2017. The Company and the Bank exceeded all regulatory capital requirements to be deemed well-capitalized at March 31, 2018. The Bank’s total capital to risk-weighted assets ratio was 20.55%, the tier 1 capital to risk-weighted assets ratio and the common equity tier 1 capital ratio was 19.29%, the tier 1 capital to total assets ratio was 14.27% at March 31, 2018 compared to 20.73%, 19.48%, and 14.67% at December 31, 2017 respectively.
The Annual Meeting of Stockholders of PDL Community Bancorp will be held at our administrative office located at 2244 Westchester Avenue, Bronx, New York 10462 on May 10, 2018, at 10:00 am, local time.
About PDL Community Bancorp
PDL Community Bancorp is the holding company for Ponce Bank. The Bank’s business primarily consists of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in mortgage loans, consisting of one-to-four family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties and construction and land, and, to a lesser extent, in business and consumer loans. The Bank also invests in securities, which have historically consisted of U.S. Government and federal agency securities and securities issued by government-sponsored or -owned enterprises, as well as, mortgage-backed securities and Federal Home Loan Bank stock. The Bank offers a variety of deposit accounts, including demand, savings, money market and certificates of deposit.
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 the Company’s 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 the Company’s 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 the Company operates, including changes that adversely affect borrowers’ ability to service and repay the Company’s loans; changes in the value of securities in the Company’s 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 Company’s financial statements will become impaired; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company 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 the prospectus 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. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, PDL Community Bancorp’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company 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.
PDL Community Bancorp and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except for share data)
As of
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
ASSETS
Cash and due from banks:
Cash
$
6,570
$
24,746
$
4,716
$
4,096
$
4,557
Interest-bearing deposits in banks
52,409
34,978
51,629
5,400
11,947
Total cash and cash equivalents
58,979
59,724
56,345
9,496
16,504
Available-for-sale securities, at fair value
28,422
28,897
29,312
29,668
51,937
Loans held for sale
—
—
—
2,143
2,143
Loans receivable, net
823,014
798,703
767,721
732,520
677,525
Accrued interest receivable
3,202
3,335
3,132
2,917
2,749
Premises and equipment, net
27,684
27,172
25,729
25,599
25,687
Federal Home Loan Bank Stock (FHLB), at cost
1,673
1,511
1,448
1,288
2,089
Deferred tax assets
3,801
3,909
5,563
3,378
3,378
Other assets
2,848
2,271
3,013
5,987
4,241
Total assets
$
949,623
$
925,522
$
892,263
$
812,996
$
786,253
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
$
752,267
$
713,985
$
698,655
$
702,406
$
655,882
Accrued interest payable
61
42
32
31
26
Advance payments by borrowers for taxes and insurance
6,999
5,025
5,967
4,661
5,670
Advances from the Federal Home Loan Bank and others
20,000
36,400
15,000
8,000
28,000
Other liabilities
4,582
5,285
4,101
3,224
3,201
Total liabilities
783,909
760,737
723,755
718,322
692,779
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued
Common stock, $0.01 par value; 50,000,000 shares authorized; 18,463,028 shares issued and outstanding
185
185
185
—
—
Additional paid-in-capital
84,419
84,351
84,099
—
—
Retained earnings
95,796
94,855
97,719
100,929
99,805
Accumulated other comprehensive loss
(8,052
)
(7,851
)
(6,257
)
(6,255
)
(6,331
)
Unearned compensation - ESOP
(6,634
)
(6,755
)
(7,238
)
—
—
Total stockholders' equity
165,714
164,785
168,508
94,674
93,474
Total liabilities and stockholders' equity
$
949,623
$
925,522
$
892,263
$
812,996
$
786,253
PDL Community Bancorp and Subsidiaries
Consolidated Statements of Income (Loss)
(Dollars in thousands, except per share data)
For the Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
Interest and dividend income:
Interest on loans receivable
$
10,386
$
10,106
$
9,893
$
9,581
$
8,592
Interest and dividends on investment securities and FHLB stock
324
221
271
123
202
Total interest and dividend income
10,710
10,327
10,164
9,704
8,794
Interest expense:
Interest on certificates of deposit
1,750
1,599
1,574
1,428
1,316
Interest on other deposits
185
168
176
161
151
Interest on borrowings
98
83
66
32
29
Total interest expense
2,033
1,850
1,816
1,621
1,496
Net interest income
8,677
8,477
8,348
8,083
7,298
Provision for loan losses
94
1,219
238
207
52
Net interest income after provision for loan losses
8,583
7,258
8,110
7,876
7,246
Noninterest income:
Service charges and fees
223
224
231
225
229
Brokerage commissions
96
94
167
168
118
Late and prepayment charges
211
207
157
235
211
Other
355
169
213
256
200
Total noninterest income
885
694
768
884
758
Noninterest expense:
Compensation and benefits
4,458
5,104
4,220
3,956
3,829
Occupancy expense
1,491
1,588
1,412
1,400
1,425
Data processing expenses
408
293
316
413
448
Direct loan expenses
155
171
189
184
195
Insurance and surety bond premiums
89
64
44
79
82
Office supplies, telephone and postage
300
317
250
282
254
FDIC deposit insurance assessment
68
4
122
58
66
Charitable foundation contributions
—
—
6,293
—
—
Other operating expenses
1,290
1,195
884
623
797
Total noninterest expense
8,259
8,736
13,730
6,995
7,096
Income (loss) before income taxes
1,209
(784
)
(4,852
)
1,765
908
Provision for income taxes (benefit)
268
2,081
(1,643
)
641
345
Net income (loss)
$
941
$
(2,865
)
$
(3,209
)
$
1,124
$
563
Earnings per share for the period:
Basic
$
0.05
$
(0.16
)
N/A
N/A
N/A
Diluted
$
0.05
$
(0.16
)
N/A
N/A
N/A
PDL Community Bancorp and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share data)
For the Three Months Ended March 31,
2018
2017
$
%
Interest and dividend income:
Interest on loans receivable
$
10,386
$
8,592
$
1,794
20.88
%
Interest and dividends on investment securities and FHLB stock
324
202
122
60.40
%
Total interest and dividend income
10,710
8,794
1,916
21.79
%
Interest expense:
Interest on certificates of deposit
1,750
1,316
434
32.98
%
Interest on other deposits
185
151
34
22.52
%
Interest on borrowings
98
29
69
237.93
%
Total interest expense
2,033
1,496
537
35.90
%
Net interest income
8,677
7,298
1,379
18.90
%
Provision for loan losses
94
52
42
80.77
%
Net interest income after provision for loan losses
8,583
7,246
1,337
18.45
%
Noninterest income:
Service charges and fees
223
229
(6
)
(2.62
%)
Brokerage commissions
96
118
(22
)
(18.64
%)
Late and prepayment charges
211
211
-
0.00
%
Other
355
200
155
77.50
%
Total noninterest income
885
758
127
16.75
%
Noninterest expense:
Compensation and benefits
4,458
3,829
629
16.43
%
Occupancy expense
1,491
1,425
66
4.63
%
Data processing expenses
408
448
(40
)
(8.93
%)
Direct loan expenses
155
195
(40
)
(20.51
%)
Insurance and surety bond premiums
89
82
7
8.54
%
Office supplies, telephone and postage
300
254
46
18.11
%
FDIC deposit insurance assessment
68
66
2
3.03
%
Other operating expenses
1,290
797
493
61.86
%
Total noninterest expense
8,259
7,096
1,163
16.39
%
Income before income taxes
1,209
908
301
33.15
%
Provision for income taxes
268
345
(77
)
(22.32
%)
Net income
$
941
$
563
$
378
67.14
%
Earnings per share for the period:
Basic
$
0.05
N/A
N/A
N/A
Diluted
$
0.05
N/A
N/A
N/A
PDL Community Bancorp and Subsidiaries
Key Metrics
At or for the Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
Performance Ratios:
Return on average assets
0.41
%
(1.27
%)
(1.43
%)
0.57
%
0.30
%
Return on average equity
2.30
%
(6.74
%)
(12.93
%)
4.75
%
2.43
%
Net interest rate spread (1)
3.61
%
3.54
%
3.58
%
4.07
%
3.88
%
Net interest margin (2)
3.95
%
3.88
%
3.86
%
4.29
%
4.09
%
Noninterest expense to average assets
3.61
%
3.86
%
6.11
%
3.56
%
3.80
%
Efficiency ratio (3)
86.37
%
95.26
%
150.61
%
78.02
%
88.08
%
Average interest-earning assets to average interest- bearing liabilities
135.79
%
139.76
%
133.72
%
125.73
%
124.86
%
Average equity to average assets
17.91
%
18.77
%
11.05
%
12.03
%
12.38
%
Capital Ratios:
Total capital to risk weighted assets (bank only)
20.52
%
20.73
%
21.41
%
17.34
%
18.16
%
Tier 1 capital to risk weighted assets (bank only)
19.26
%
19.48
%
20.15
%
16.09
%
16.91
%
Common equity Tier 1 capital to risk-weighted assets ( bank only)
19.26
%
19.48
%
20.15
%
16.09
%
16.91
%
Tier 1 capital to average assets (bank only)
14.25
%
14.67
%
14.91
%
12.70
%
13.08
%
Asset Quality Ratios:
Allowance for loan losses as a percentage of total loans
1.37
%
1.37
%
1.43
%
1.43
%
1.51
%
Allowance for loan losses as a percentage of nonperforming loans
122.81
%
97.05
%
118.32
%
138.27
%
134.92
%
Net (charge-offs) recoveries to average outstanding loans during the year
0.12
%
(0.64
%)
0.13
%
0.04
%
0.07
%
Non-performing loans as a percentage of total loans
1.11
%
1.41
%
1.21
%
1.04
%
1.12
%
Non-performing loans as a percentage of total assets
0.98
%
1.23
%
1.06
%
0.95
%
0.98
%
Total non-performing assets as a percentage of total assets
0.98
%
1.23
%
1.06
%
0.95
%
0.98
%
Total non-performing assets, accruing loans past due 90 days or more, and accruing troubled debt restructured loans as a percentage of total assets
2.25
%
2.72
%
2.61
%
3.05
%
3.29
%
Other:
Number of offices
14
14
14
14
14
Number of full-time equivalent employees
192
177
171
178
177
(1)
Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of average interest-bearing liabilities.
(2)
Net interest margin represents net interest income divided by average total interest-earning assets.
(3)
Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
Key metrics calculated on income statement items were annualized where appropriate.
PDL Community Bancorp and Subsidiaries
Loan Portfolio
For the Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in thousands)
Mortgage loans:
1-4 family residential
Investor Owned
$
290,509
34.86
%
$
287,158
35.51
%
$
279,275
35.90
%
$
256,989
34.62
%
$
237,904
34.62
%
Owner-Occupied
96,943
11.63
%
100,854
12.47
%
99,661
12.81
%
99,901
13.46
%
96,085
13.98
%
Multifamily residential
204,474
24.54
%
188,550
23.31
%
177,181
22.78
%
172,167
23.19
%
161,833
23.55
%
Nonresidential properties
158,525
19.03
%
151,193
18.69
%
152,692
19.63
%
155,670
20.97
%
140,501
20.45
%
Construction and land
67,971
8.16
%
67,240
8.31
%
52,483
6.75
%
42,116
5.67
%
37,610
5.47
%
Total mortgage loans
818,422
98.21
%
794,995
98.30
%
761,292
97.87
%
726,843
97.91
%
673,933
98.07
%
Nonmortgage loans:
Business loans
13,925
1.67
%
12,873
1.59
%
15,600
2.01
%
14,654
1.97
%
12,434
1.81
%
Consumer loans
975
0.12
%
886
0.11
%
943
0.12
%
850
0.11
%
796
0.12
%
Total nonmortgage loans
14,900
1.79
%
13,759
1.70
%
16,543
2.13
%
15,504
2.09
%
13,230
1.93
%
833,322
100.00
%
808,754
100.00
%
777,835
100.00
%
742,347
100.00
%
687,163
100.00
%
Net deferred loan origination costs
1,101
1,020
1,033
828
732
Allowance for losses on loans
(11,409
)
(11,071
)
(11,147
)
(10,655
)
(10,370
)
Loans, net
$
823,014
$
798,703
$
767,721
$
732,520
$
677,525
PDL Community Bancorp and Subsidiaries
Nonperforming Assets
For the Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
(Dollars in thousands)
Nonaccrual loans:
Mortgage loans:
1-4 family residential
Investor owned
$
209
$
1,034
$
402
$
571
$
573
Owner occupied
1,951
2,624
2,630
2,463
1,723
Multifamily residential
—
521
—
—
—
Nonresidential properties
633
1,387
653
867
1,606
Construction and land
1,097
1,075
1,075
1,008
1,142
Nonmortgage loans:
Business
30
147
12
12
12
Consumer
—
—
—
—
—
Total nonaccrual loans (not including non-accruing troubled debt restructured loans)
$
3,920
$
6,788
$
4,772
$
4,921
$
5,056
Non-accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned
$
1,122
$
1,144
$
1,168
$
1,190
$
1,214
Owner occupied
2,983
2,693
2,698
810
636
Multifamily residential
—
—
—
—
—
Nonresidential properties
1,265
783
783
785
780
Construction and land
—
—
—
—
—
Nonmortgage loans:
Business
—
—
—
—
—
Consumer
—
—
—
—
—
Total non-accruing troubled debt restructured loans
5,370
4,620
4,649
2,785
2,630
Total nonaccrual loans
$
9,290
$
11,408
$
9,421
$
7,706
$
7,686
Real estate owned:
Mortgage loans:
1-4 family residential
Investor owned
$
—
$
—
$
—
$
—
$
—
Owner occupied
Multifamily residential
—
—
—
—
—
Nonresidential properties
—
—
—
—
—
Construction and land
—
—
—
—
—
Nonmortgage loans:
Business
—
—
—
—
—
Consumer
—
—
—
—
—
Total real estate owned
—
—
—
—
—
Total nonpeforming assets
$
9,290
$
11,408
$
9,421
$
7,706
$
7,686
Accruing loans past due 90 days or more:
Mortgage loans:
1-4 family residential
Investor owned
$
—
$
7
$
—
$
—
$
—
Owner occupied
—
—
—
—
—
Multifamily residential
—
—
—
—
—
Nonresidential properties
—
—
—
—
—
Construction and land
—
—
—
—
—
Nonmortgage loans:
Business
—
—
—
—
—
Consumer
—
—
—
—
—
Total accruing loans past due 90 days or more
$
—
$
7
$
—
$
—
$
—
Accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned
$
5,738
$
6,559
$
6,594
$
7,108
$
6,385
Owner occupied
4,424
4,756
4,784
5,439
7,232
Multifamily residential
—
—
—
—
—
Nonresidential properties
1,468
1,958
1,968
4,009
4,036
Construction and land
—
—
—
—
—
Nonmortgage loans:
Business
454
477
501
516
546
Consumer
—
—
—
—
—
Total accruing troubled debt restructured loans
$
12,084
$
13,750
$
13,847
$
17,072
$
18,199
Total nonperforming assets, accruing loans past due 90 days or more and accruing troubled debt restructured loans
$
21,374
$
25,165
$
23,268
$
24,778
$
25,885
Total nonperforming loans to total loans
1.11
%
1.41
%
1.21
%
1.04
%
1.12
%
Total nonperforming assets to total assets
0.98
%
1.23
%
1.06
%
0.95
%
0.98
%
Total nonperforming assets, accruing loans past due 90 days or more and accruing troubled debt restructured loans to total assets
2.25
%
2.72
%
2.61
%
3.05
%
3.29
%
Source: PDL Community Bancorp