PDL Community Bancorp Announces 2020 Second Quarter Results

Ponce Bank Jul 31, 2020 12:00:00 AM

YORK, July 31, 2020 (GLOBE NEWSWIRE) -- PDL Community Bancorp (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), reported a net loss of ($571,000), or ($0.03) per basic and diluted share, for the second quarter of 2020, compared to a net loss of ($1.2 million), or ($0.07) per basic and diluted share, for the prior quarter and net income of $950,000, or $0.05 per basic and diluted share, for the second quarter of 2019.

Carlos P. Naudon, the Company’s President and CEO, noted “2020 continues to be a year of investing – in the safety of our people and the future of our organization and our communities – with the clear goal of enhancing stakeholder values. Although the COVID-19 pandemic slowed our business, we continued our implementation of GPS, our Salesforce based CRM; we attended to the needs of Ponce Bankers by maintaining their jobs and temporarily enhancing their benefits; we responded to the needs of our communities by handling over 1,000 applications for Paycheck Protection Program (“PPP”) loans from customers and non-customers alike, allowing loan forbearances upon requests and ensuring that we publicly stood by our commitment to fairness and justice for all; we enhanced our asset quality by significantly increasing reserves; and, we increased our shareholders’ value by resuming repurchases of our shares. Although these steps resulted in a loss per share of ($0.11) for the six months ended June 30, 2020, we remain confident that our investments in the first half of the year, coupled with the closing of the Mortgage World Bankers, Inc. transaction in July as well as other initiatives, will continue to build stakeholder value.”

Steven A. Tsavaris, the Company’s Executive Chairman, added “It is gratifying that our commitment to our communities was recognized by the National Community Investment Fund in their Banking Industry Peer Group report for the first quarter of 2020. Ponce Bank was ranked 11th nationally in total assets and 7th in total loans among the 140 banks that also are CDFIs. Among the 20 largest, we were ranked 1st in our housing focus, 2nd in our lending in LMI areas and 6th in the proportion of branches in LMI areas. This data is not an anomaly; we are consistently a top performer in their Social Performance Metrics.”

Net Income (Loss)

The $571,000 net loss for the three months ended June 30, 2020 is $642,000 less than the $1.2 million net loss for the three months ended March 31, 2020 and is primarily the result of an $875,000, or 76.4%, decrease in provision for loan losses, a $387,000, or 3.6%, decrease in noninterest expense and a $234,000, or 7.5%, decrease in interest expense, offset by a $637,000, or 4.9%, decrease in interest and dividend income, a $169,000, or 80.9%, decrease in benefit for income taxes and a $48,000, or 7.7%, decrease in noninterest income.

The $571,000 net loss for the quarter ended June 30, 2020 compared to $950,000 in net income for the second quarter of 2019 reflects a $1.7 million, or 19.8%, increase in noninterest expense, a $271,000 increase in provision for loan losses, a $112,000, or 16.3%, decrease in noninterest income and a $21,000, or 0.2%, decrease in interest and dividend income, offset by a $413,000, or 110.7%, decrease in provision for income taxes and a $198,000, or 6.4%, decrease in interest expense.

The $1.8 million net loss for the six months ended June 30, 2020 compared to $1.6 million in net income for the six months ended June 30, 2019 reflects a $3.5 million, or 19.4%, increase in noninterest expense, a $1.3 million increase in provision for loan losses and a $243,000, or 16.9%, decrease in noninterest income, offset by a $929,000, or 136.6%, decrease in provision for income taxes, a $627,000, or 2.5%, increase in interest and dividend income and a $12,000, or 0.2%, decrease in interest expense.

Net Interest Margin

Net interest margin decreased by 42 basis points to 3.45% for the three months ended June 30, 2020 from 3.87% for the three months ended March 31, 2020, while the net interest rate spread decreased by 38 basis points to 3.13% from 3.51% for the same periods. Average interest-earning assets increased by $77.7 million, or 7.5%, mainly as a result of $30.3 million in average outstanding Payment Protection Program (“PPP”) loans, to $1,109.7 million for the three months ended June 30, 2020 from $1,031.9 million for the three months ended March 31, 2020. The average yield on interest-earning assets decreased by 58 basis points to 4.49% from 5.07%, for the same periods. Average interest-bearing liabilities increased by $49.9 million, or 6.2%, mainly as a result of $48.9 million in average net PPP funding, to $848.9 million for the three months ended June 30, 2020 from $799.0 million for the three months ended March 31, 2020. The weighted average rate on interest-bearing liabilities decreased by 20 basis points to 1.36% from 1.56% for the same periods.

Net interest margin decreased by 30 basis points to 3.45% for the three months ended June 30, 2020 from 3.75% for the three months ended June 30, 2019, while the net interest rate spread decreased by 21 basis points to 3.13% from 3.34% for the same periods. Average interest-earning assets increased by $110.2 million, or 11.0%, mainly as a result of $30.3 million in average outstanding PPP loans, to $1,109.7 million, for the three months ended June 30, 2020 from $999.4 million for the three months ended June 30, 2019. The average yield on interest-earning assets decreased by 49 basis points to 4.49% from 4.98%, for the same periods. Average interest-bearing liabilities increased by $98.5 million, or 13.1%, mainly as a result of $48.9 million in average net PPP funding, to $848.9 million, for the three months ended June 30, 2020 from $750.3 million for the three months ended June 30, 2019. The average rate on interest-bearing liabilities decreased by 28 basis points to 1.36% from 1.64% for the same periods.

Noninterest Income

Noninterest income was $574,000 for the three months ended June 30, 2020, down $48,000, or 7.7%, from $622,000 for the three months ended March 31, 2020. The decrease was attributable to decreases of $106,000, or 89.1%, in late and prepayment charges related to mortgage loans, $103,000, or 41.5%, in service charges and fees and $28,000, or 56.0%, in brokerage commissions, offset by an increase of $189,000, or 92.2%, in other noninterest income, of which $163,000 were fees related to PPP loans.

Noninterest income was $574,000 for the three months ended June 30, 2020, down $112,000, or 16.3%, from $686,000 for the three months ended June 30, 2019. The decrease was mainly attributable to decreases of $249,000, or 95.0%, in late and prepayment charges related to mortgage loans, $83,000, or 36.4%, in service charges and fees and $2,000, or 8.3%, in brokerage commissions, offset by an increase of $222,000, or 129.1%, in other noninterest income, of which $163,000 were fees related to PPP loans.

Noninterest Expense

Total noninterest expense decreased $387,000, or 3.6%, to $10.4 million for the three months ended June 30, 2020 compared to $10.8 million for the three months ended March 31, 2020. Compensation and benefits decreased $363,000, which primarily includes $256,000 of deferred compensation expenses related to PPP loan originations. Other decreases in noninterest expense at June 30, 2020 from March 31, 2020 are $291,000 of professional services, $89,000 of marketing and promotional expenses and $13,000 in direct loan expenses. The decrease in noninterest expense was offset by increases of $260,000 in occupancy and equipment, $67,000 in other noninterest expenses, $29,000 in data processing expenses, $10,000 in regulatory dues and $7,000 in insurance and surety bond premiums. Included in noninterest expense for the three months ended June 30, 2020 is $475,000 of additional expenses incurred as a result of the COVID-19 pandemic.

Total noninterest expense increased $1.7 million, or 19.8%, to $10.4 million for the three months ended June 30, 2020, compared to $8.7 million for the three months ended June 30, 2019. The increase in noninterest expense was attributable to increases of $603,000 in professional fees, $545,000 in occupancy and equipment expense mainly due to investments in software licenses, $169,000 in compensation and benefits, $140,000 in other operating expenses mainly due to employment agency fees, $98,000 in marketing and promotional expenses, $65,000 in data processing expenses as a result of system enhancements and implementation charges related to software upgrades, $45,000 in insurance and surety bond premiums, $41,000 in office supplies, telephone and postage and $17,000 in direct loan expenses. The increase of $603,000 in professional fees is mainly attributable to increases in consulting fees of $250,000 and professional services of $344,000 related to the document imaging project adopted in late 2019.

Asset Quality

Total nonperforming assets were $11.6 million, or 0.95% of total assets, at June 30, 2020, an increase of $1.9 million from $9.7 million, or 0.85% of total assets, at March 31, 2020 and remain comparable with total nonperforming assets of $11.6 million, or 1.10% of total assets, at December 31, 2019. Comparing nonperforming assets at June 30, 2020 to March 31, 2020, total nonaccruals inclusive of TDRs related to nonresidential loans increased by $1.1 million and 1-4 family residential loans increased by $707,000. Comparing nonperforming assets at June 30, 2020 to December 31, 2019, total nonaccruals inclusive of TDRs related to construction and land loans decreased by $1.1 million, nonresidential loans increased by $810,000 and 1-4 family residential loans increased by $285,000.

The Company continues to assess the economic impact of the COVID-19 pandemic on borrowers and believes that it is likely that it will be a detriment to their ability to repay in the short-term and that the likelihood of long-term detrimental effects will depend significantly on the resumption of normalized economic activities, a factor not yet determinable. The allowance for loan losses was $13.8 million, or 1.27% of total loans (total loans include $83.6 million of PPP loans) at June 30, 2020, compared to $12.3 million, or 1.28% of total loans, at December 31, 2019 and $12.5 million, or 1.32% of total loans, at June 30, 2019. Excluding PPP loans, the allowance for loan losses is 1.38% of total loans. Net recoveries totaled $6,000 for the quarter ended June 30, 2020, $9,000 for the quarter ended March 31, 2020 and $11,000 for the quarter ended June 30, 2019.

As of July 21, 2020, there were 421 loans aggregating $384.0 million, in forbearance primarily consisting of the deferral of principal, interest, and escrow payments for a period of three months. Of the 421 loans in forbearance, 329 loans aggregating $297.4 million have not requested, and 92 loans in the amount of $86.6 million have requested, up-to-an-additional three-month forbearance extension at the conclusion of their initial three-month forbearance period. All of these loans had been performing in accordance with their contractual obligations prior to the granting of the initial forbearance. The Company actively monitors the business activities of borrowers in forbearance and seeks to determine their capacity to resume payments as contractually obligated upon the termination of the forbearance period. Under the current economic conditions and based upon available data, the Company is unable to conclusively determine the repayment capacity, if any, of most of such borrowers. The initial and extended forbearances are short-term modifications made on a good faith basis in response to the COVID-19 pandemic and in furtherance of governmental policies.

Balance Sheet

Total assets increased $166.5 million, or 15.8%, to $1,220.2 million at June 30, 2020 from $1,053.8 million at December 31, 2019. The increase in total assets is mainly attributable to increases in net loans receivable of $116.7 million, mainly due to $83.6 million in PPP loans, cash and cash equivalents of $49.0 million, other assets of $4.2 million, accrued interest receivable of $3.7 million, FHLBNY stock of $687,000 and deferred taxes of $604,000, offset by decreases in available-for-sale securities of $7.7 million and premises and equipment, net of $644,000.

Cash and cash equivalents at June 30, 2020 increased $49.0 million from December 31, 2019 due to increases of $154.2 million in net deposits, of which $65.1 million related to net PPP funding, $16.4 million from sales and maturities of available-for-sale securities and $12.9 million increase in net advances from FHLBNY, offset by increases of $116.7 million in net loans and $9.1 million purchases of available-for-sale securities.

Net loans receivable at June 30, 2020 increased $116.7 million from December 31, 2019 primarily due to increases of $82.5 million, or 758.6%, in business loans, mainly due to $83.6 million in PPP loans, $24.4 million, or 9.8%, in multifamily residential loans, $11.2 million, or 2.8%, in 1-4 family residential loans, $1.8 million, or 0.9%, in nonresidential properties loans, $347,000, or 28.2%, in consumer loans and $286,000, or 14.5%, in net deferred loan origination costs, offset by a decrease of $2.5 million, or 2.5%, in construction and land loans and an increase in the allowance for losses on loans of $1.4 million substantially related to the COVID-19 pandemic.

Total deposits increased $154.2 million, or 19.7%, to $936.2 million at June 30, 2020 from $782.0 million at December 31, 2019. The increase in deposits was mainly attributable to increases of $85.3 million, or 30.1%, in NOW, money market, reciprocal deposits and savings accounts, $82.9 million, or 75.7%, in demand deposits, of which $65.1 million related to net PPP funding, offset by a decrease of $14.0 million, or 3.6 %, in total certificates of deposit, which includes brokered certificates of deposit and listing service deposits. The $85.3 million increase in NOW, money market, reciprocal deposits and savings accounts was mainly attributable to increases of $49.3 million, or 103.4%, in reciprocal deposits, $38.9 million, or 44.9%, in money market accounts, $3.5 million, or 3.1%, in savings accounts offset by a decrease of $6.4 million, or 19.4%, in NOW/IOLA accounts.

Net advances from the FHLBNY increased $12.9 million, or 12.3%, to $117.3 million at June 30, 2020 from $104.4 million at December 31, 2019. The net increase in advances was due to a new FHLBNY advance of $12.9 million, at a weighted average rate of 0.9%.

Total stockholders’ equity decreased $3.4 million, or 2.1%, to $155.0 million at June 30, 2020, from $158.4 million at December 31, 2019. The decrease in stockholders’ equity was mainly attributable to $2.7 million of stock repurchases and a net loss of $1.8 million, offset by increases of $698,000 related to restricted stock units and stock options, $247,000 related to the Company’s Employee Stock Ownership Plan and $130,000 related to unrealized gains on available-for-sale securities.

The Company adopted a share repurchase program effective March 25, 2019 which expired on September 24, 2019. Under the repurchase program, the Company was permitted to repurchase up to 923,151 shares of the Company’s stock, or approximately 5% of the Company’s then current issued and outstanding shares. On November 13, 2019, the Company adopted a second share repurchase program. Under this second program, the Company was permitted to repurchase up to 878,835 shares of the Company’s stock, or approximately 5% of the Company’s then current issued and outstanding shares. The Company’s share repurchase program was terminated on March 27, 2020. On June 1, 2020, the Company adopted a third share repurchase program. Under this third program, the Company is permitted to repurchase up to 864,987 shares of the Company’s stock, or approximately 5% of the Company’s then current issued and outstanding shares. The repurchase program may be suspended or terminated at any time without prior notice, and it will expire no later than November 30, 2020.

As of June 30, 2020, the Company had repurchased a total of 1,318,872 shares under the repurchase programs at a weighted average price of $13.99 per share, which were reported as treasury stock. Of the 1,318,872 shares of treasury stock, 90,135 shares have been granted to directors and executive officers under the Company’s 2018 Long-Term Incentive Plan pursuant to restricted stock units which vested on December 4, 2019. As of June 30, 2020, 1,228,737 shares are reported as treasury stock in the Company’s consolidated statement of financial condition.

About PDL Community Bancorp

PDL Community Bancorp is the financial holding company for Ponce Bank. Ponce Bank is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. The Bank’s business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those deposits, 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 and construction and land, and, to a lesser extent, in business and consumer loans. The 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 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; the anticipated impact of the COVID-19 novel coronavirus pandemic and the Company’s attempts at mitigation; 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.

Contact:

Frank Perez

frank.perez@poncebank.net

718-931-9000

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except for share data)

As of

June 30,

March 31,

December 31,

September 30,

June 30,

2020

2019

ASSETS

Cash and due from banks:

Cash

15,875

13,165

6,762

6,425

6,003

Interest-bearing deposits in banks

60,756

90,795

20,915

40,965

47,007

Total cash and cash equivalents

76,631

103,960

27,677

47,390

53,010

Available-for-sale securities, at fair value

13,800

19,140

21,504

51,966

22,154

Loans held for sale

1,030

—

Loans receivable, net of allowance for losses

1,072,417

972,979

955,737

948,548

934,236

Accrued interest receivable

7,677

4,198

3,982

3,893

3,773

Premises and equipment, net

32,102

32,480

32,746

32,805

32,205

Other real estate owned

—

Federal Home Loan Bank of New York stock (FHLBNY), at cost

6,422

7,889

5,735

8,659

4,609

Deferred tax assets

4,328

4,140

3,724

3,925

3,913

Other assets

5,824

5,127

1,621

2,802

2,158

Total assets

1,220,231

1,150,943

1,053,756

1,099,988

1,056,116

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits

936,219

829,741

782,043

757,845

802,408

Accrued interest payable

Advance payments by borrowers for taxes and insurance

6,007

8,295

6,348

7,780

6,059

Advances from the Federal Home Loan Bank of New York and others

117,284

152,284

104,404

169,404

79,404

Other liabilities

5,674

4,794

2,462

4,324

2,954

Total liabilities

1,065,232

995,200

895,354

939,434

890,913

Commitments and contingencies

Stockholders' Equity:

Preferred stock, $0.01 par value; 10,000,000 shares authorized

—

Common stock, $0.01 par value; 50,000,000 shares authorized

185

Treasury stock, at cost

(17,172

)

(16,490

)

(14,478

)

(12,663

)

(6,798

)

Additional paid-in-capital

85,481

85,132

84,777

85,750

85,357

Retained earnings

91,904

92,475

93,688

101,140

100,431

Accumulated other comprehensive income (loss)

150

110

(7,947

)

(7,941

)

Unearned compensation - ESOP

(5,549

)

(5,669

)

(5,790

)

(5,911

)

(6,031

)

Total stockholders' equity

154,999

155,743

158,402

160,554

165,203

Total liabilities and stockholders' equity

1,220,231

1,150,943

1,053,756

1,099,988

1,056,116

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share data)

For the Quarters Ended

June 30,

March 31,

December 31,

September 30,

June 30,

2020

2019

Interest and dividend income:

Interest on loans receivable

12,162

12,782

12,488

12,663

12,060

Interest on deposits due from banks

117

278

Interest and dividend on available-for-sale securities and FHLBNY stock

228

182

181

173

Total interest and dividend income

12,393

13,030

12,742

12,953

12,414

Interest expense:

Interest on certificates of deposit

1,730

1,827

1,921

1,896

1,904

Interest on other deposits

534

692

616

759

821

Interest on borrowings

608

587

643

533

345

Total interest expense

2,872

3,106

3,180

3,188

3,070

Net interest income

9,521

9,924

9,562

9,765

9,344

Provision for loan losses

271

1,146

—

Net interest income after provision for loan losses

9,250

8,778

9,467

9,751

9,344

Noninterest income:

Service charges and fees

145

248

266

247

228

Brokerage commissions

Late and prepayment charges

119

204

150

262

Other

394

205

152

146

172

Total noninterest income

574

622

665

579

686

Noninterest expense:

Compensation and benefits

4,645

5,008

4,726

4,667

4,476

Loss on termination of pension plan

—

9,930

—

Occupancy and equipment

2,277

2,017

2,026

1,943

1,732

Data processing expenses

496

467

394

398

431

Direct loan expenses

199

212

171

183

182

Insurance and surety bond premiums

128

121

102

146

Office supplies, telephone and postage

312

316

281

271

Professional fees

1,336

1,627

1,038

956

733

Marketing and promotional expenses

145

234

Directors fees

Regulatory dues

Other operating expenses

772

705

606

575

632

Total noninterest expense

10,435

10,822

19,475

9,334

8,707

Income (loss) before income taxes

(611

)

(1,422

)

(9,343

)

996

1,323

Provision (benefit) for income taxes

(40

)

(209

)

(1,891

)

287

373

Net income (loss)

(571

)

(1,213

)

(7,452

)

709

950

Earnings (loss) per share:

Basic

(0.03

)

(0.07

)

(0.43

)

0.04

0.05

Diluted

(0.03

)

(0.07

)

(0.43

)

0.04

0.05

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share data)

For the Six Months Ended June 30,

2020

2019

Variance $

Variance %

Interest and dividend income:

Interest on loans receivable

24,944

24,155

789

3.27

Interest on deposits due from banks

478

(409

)

(85.56

Interest and dividend on available-for-sale securities and FHLBNY stock

410

163

247

151.53

Total interest and dividend income

25,423

24,796

627

2.53

Interest expense:

Interest on certificates of deposit

3,557

3,860

(303

)

(7.85

Interest on other deposits

1,226

1,452

(226

)

(15.56

Interest on borrowings

1,195

678

517

76.25

Total interest expense

5,978

5,990

(12

)

(0.20

Net interest income

19,445

18,806

639

3.40

Provision for loan losses

1,417

149

1,268

851.01

Net interest income after provision for loan losses

18,028

18,657

(629

)

(3.37

Noninterest income:

Service charges and fees

393

458

(65

)

(14.19

Brokerage commissions

133

(61

)

(45.86

Late and prepayment charges

132

401

(269

)

(67.08

Other

599

447

152

34.00

Total noninterest income

1,196

1,439

(243

)

(16.89

Noninterest expense:

Compensation and benefits

9,653

9,490

163

1.72

Occupancy and equipment

4,294

3,643

651

17.87

Data processing expenses

963

784

179

22.83

Direct loan expenses

411

338

21.60

Insurance and surety bond premiums

249

166

50.00

Office supplies, telephone and postage

628

588

6.80

Professional fees

2,963

1,243

1,720

138.37

Marketing and promotional expenses

379

306

419.18

Directors fees

138

156

(18

)

(11.54

Regulatory dues

102

103

)

(0.97

Other operating expenses

1,477

1,214

263

21.66

Total noninterest expense

21,257

17,798

3,459

19.43

Income (loss) before income taxes

(2,033

)

2,298

(4,331

)

(188.47

Provision (benefit) for income taxes

(249

)

680

(929

)

(136.62

Net income (loss)

(1,784

)

1,618

(3,402

)

(210.26

Earnings (loss) per share:

Basic

(0.11

)

0.09

N/A

Diluted

(0.11

)

0.09

N/A

PDL Community Bancorp and Subsidiaries

Key Metrics

At or for the Quarters Ended

June 30,

March 31,

December 31,

September 30,

June 30,

2020

2019

Performance Ratios:

Return on average assets

(0.20

(0.46

(2.79

0.27

0.37

Return on average equity

(1.47

(3.07

(18.24

1.71

2.26

Net interest rate spread (1)

3.13

3.51

3.34

3.44

3.34

Net interest margin (2)

3.45

3.87

3.71

3.83

3.75

Noninterest expense to average assets

3.57

4.07

7.30

3.54

3.38

Efficiency ratio (3)

103.37

102.62

190.43

90.24

86.81

Average interest-earning assets to average interest- bearing liabilities

130.72

129.16

130.64

131.38

133.20

Average equity to average assets

13.30

14.85

15.32

15.71

16.27

Capital Ratios:

Total capital to risk weighted assets (bank only)

17.52

17.84

18.62

19.29

19.54

Tier 1 capital to risk weighted assets (bank only)

16.26

16.59

17.36

18.03

18.29

Common equity Tier 1 capital to risk-weighted assets (bank only)

16.26

16.59

17.36

18.03

18.29

Tier 1 capital to average assets (bank only)

11.63

12.76

12.92

13.62

13.64

Asset Quality Ratios:

Allowance for loan losses as a percentage of total loans

1.27

1.37

1.28

1.27

1.32

Allowance for loan losses as a percentage of nonperforming loans

118.89

138.47

106.30

117.72

123.50

Net (charge-offs) recoveries to average outstanding loans

0.01

0.00

0.03

(0.15

0.00

Non-performing loans as a percentage of total loans

1.08

1.00

1.20

1.09

1.08

Non-performing loans as a percentage of total assets

0.95

0.85

1.10

0.94

0.96

Total non-performing assets as a percentage of total assets

0.95

0.85

1.10

0.94

0.96

Total non-performing assets, accruing loans past due 90 days or more, and accruing troubled debt restructured loans as a percentage of total assets

1.51

1.49

1.92

1.73

1.82

Other:

Number of offices

Number of full-time equivalent employees

179

184

183

187

183

____________

(1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(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

As of

June 30,

March 31,

December 31,

September 30,

June 30,

2020

2019

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

(Dollars in thousands)

Mortgage loans:

1-4 family residential

Investor Owned

317,055

29.25

308,206

31.31

305,272

31.60

309,065

32.23

302,428

32.00

Owner-Occupied

91,345

8.43

93,887

9.54

91,943

9.52

90,843

9.47

92,904

9.83

Multifamily residential

274,641

25.34

259,326

26.35

250,239

25.90

244,644

25.51

238,974

25.28

Nonresidential properties

209,068

19.29

210,225

21.36

207,225

21.45

195,952

20.43

197,367

20.88

Construction and land

96,841

8.93

100,202

10.18

99,309

10.28

106,124

11.07

100,995

10.69

Total mortgage loans

988,950

91.24

971,846

98.74

953,988

98.75

946,628

98.72

932,668

98.68

Nonmortgage loans:

Business loans (1)

93,394

8.62

11,183

1.13

10,877

1.12

11,040

1.15

11,373

1.20

Consumer loans

1,578

0.14

1,288

0.13

1,231

0.13

1,252

0.13

1,151

0.12

Total nonmortgage loans

94,972

8.76

12,471

1.26

12,108

1.25

12,292

1.28

12,524

1.32

Total loans, gross

1,083,922

100.00

984,317

100.00

966,096

100.00

958,920

100.00

945,192

100.00

Net deferred loan origination costs

2,256

2,146

1,970

1,788

1,562

Allowance for losses on loans

(13,761

)

(13,484

)

(12,329

)

(12,160

)

(12,518

)

Loans, net

1,072,417

972,979

955,737

948,548

934,236

(1) As of June 30, 2020, business loans include $83.6 million of PPP loans.

PDL Community Bancorp and Subsidiaries

Deposits

As of

June 30,

March 31,

December 31,

September 30,

June 30,

2020

2019

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

(Dollars in thousands)

Demand (1)

192,429

20.55

110,801

13.35

109,548

14.01

104,181

13.75

115,262

14.36

Interest-bearing deposits:

NOW/IOLA accounts

26,477

2.83

31,586

3.81

32,866

4.20

28,600

3.77

23,018

2.87

Money market accounts

125,631

13.42

121,629

14.66

86,721

11.09

98,707

13.02

105,632

13.16

Reciprocal deposits

96,915

10.35

62,384

7.52

47,659

6.09

42,292

5.58

52,686

6.57

Savings accounts

119,277

12.74

112,318

13.53

115,751

14.80

115,402

15.23

126,746

15.80

Total NOW, money market, reciprocal and savings accounts

368,300

39.34

327,917

39.52

282,997

36.18

285,001

37.60

308,082

38.40

Certificates of deposit of $250K or more

81,786

8.74

81,486

9.82

84,263

10.77

86,498

11.41

82,767

10.31

Brokered certificates of deposit

55,878

5.97

51,661

6.23

76,797

9.82

58,570

7.73

58,570

7.30

Listing service deposits

54,370

5.81

55,842

6.73

32,400

4.14

22,458

2.96

28,688

3.58

Certificates of deposit less than $250K

183,456

19.59

202,034

24.35

196,038

25.08

201,137

26.55

209,039

26.05

Total certificates of deposit

375,490

40.11

391,023

47.13

389,498

49.81

368,663

48.65

379,064

47.24

Total interest-bearing deposits

743,790

79.45

718,940

86.65

672,495

85.99

653,664

86.25

687,146

85.64

Total deposits

936,219

100.00

829,741

100.00

782,043

100.00

757,845

100.00

802,408

100.00

(1) As of June 30, 2020, included in demand deposits are $65.1 million related to net PPP funding.

PDL Community Bancorp and Subsidiaries

Nonperforming Assets

For the Quarters Ended

June 30,

March 31,

December 31,

September 30,

June 30,

2020

2019

(Dollars in thousands)

Nonaccrual loans:

Mortgage loans:

1-4 family residential

Investor owned

2,767

2,327

2,312

1,281

1,299

Owner occupied

1,327

1,069

1,009

1,052

479

Multifamily residential

—

Nonresidential properties

4,355

3,228

3,555

3,099

3,288

Construction and land

—

1,118

1,292

1,327

Nonmortgage loans:

Business

—

Consumer

—

Total nonaccrual loans (not including non-accruing troubled debt restructured loans)

8,449

6,624

7,994

6,724

6,402

Non-accruing troubled debt restructured loans:

Mortgage loans:

1-4 family residential

Investor owned

272

276

467

471

493

Owner occupied

2,198

2,185

2,491

2,488

2,499

Multifamily residential

—

Nonresidential properties

656

653

646

647

742

Construction and land

—

Nonmortgage loans:

Business

—

Consumer

—

Total non-accruing troubled debt restructured loans

3,126

3,114

3,604

3,606

3,734

Total nonaccrual loans

11,575

9,738

11,598

10,330

10,136

Total nonperforming assets

11,575

9,738

11,598

10,330

10,136

Accruing troubled debt restructured loans:

Mortgage loans:

1-4 family residential

Investor owned

3,730

5,191

5,226

5,267

Owner occupied

2,348

2,359

2,090

2,114

2,493

Multifamily residential

—

Nonresidential properties

762

1,300

1,306

1,317

1,330

Construction and land

—

Nonmortgage loans:

Business

—

Consumer

—

Total accruing troubled debt restructured loans

6,840

7,389

8,601

8,692

9,127

Total nonperforming assets and accruing troubled debt restructured loans

18,415

17,127

20,199

19,022

19,263

Total nonperforming loans to total net loans

1.08

1.00

1.20

1.09

1.08

Total nonperforming assets to total assets

0.95

0.85

1.10

0.94

0.96

Total nonperforming assets and accruing troubled debt restructured loans to total assets

1.51

1.49

1.92

1.73

1.82

PDL Community Bancorp and Subsidiaries

Average Balance Sheets

For the Three Months Ended June 30,

2020

2019

Average

Outstanding

Balance

Interest

Average

Yield/Rate (1)

Average

Outstanding

Balance

Interest

Average

Yield/Rate (1)

(Dollars in thousands)

Interest-earning assets:

Loans (2)

1,024,019

12,162

4.78

928,806

12,060

5.21

Available-for-sale securities

16,750

146

3.50

22,127

1.38

Other (3)

68,900

0.50

48,512

278

2.30

Total interest-earning assets

1,109,669

12,393

4.49

999,445

12,414

4.98

Non-interest-earning assets

65,829

35,130

Total assets

1,175,498

1,034,575

Interest-bearing liabilities:

NOW/IOLA

29,692

0.51

25,306

0.41

Money market

196,707

458

0.94

140,239

755

2.16

Savings

117,166

0.13

121,423

0.13

Certificates of deposit

375,708

1,730

1.85

400,317

1,904

1.91

Total deposits

719,273

2,263

1.27

687,285

2,724

1.59

Advance payments by borrowers

8,947

0.04

9,566

0.04

Borrowings

120,647

608

2.03

53,474

345

2.59

Total interest-bearing liabilities

848,867

2,872

1.36

750,325

3,070

1.64

Non-interest-bearing liabilities:

Non-interest-bearing demand

165,161

—

112,069

—

Other non-interest-bearing liabilities

5,165

—

3,819

—

Total non-interest-bearing liabilities

170,326

—

115,888

—

Total liabilities

1,019,193

2,872

866,213

3,070

Total equity

156,305

168,362

Total liabilities and total equity

1,175,498

1.36

1,034,575

1.64

Net interest income

9,521

9,344

Net interest rate spread (4)

3.13

3.34

Net interest-earning assets (5)

260,802

249,120

Net interest margin (6)

3.45

3.75

Average interest-earning assets to interest-bearing liabilities

130.72

133.20

____________

(1) Annualized where appropriate.

(2) Loans include loans and loans held for sale.

(3) Includes FHLBNY demand account and FHLBNY stock dividends.

(4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(6) Net interest margin represents net interest income divided by average total interest-earning assets.

PDL Community Bancorp and Subsidiaries

Average Balance Sheets

For the Six Months Ended June 30,

2020

2019

Average

Outstanding

Balance

Interest

Average

Yield/Rate (1)

Average

Outstanding

Balance

Interest

Average

Yield/Rate

(Dollars in thousands)

Interest-earning assets:

Loans (2)

999,758

24,944

5.02

932,323

24,155

5.22

Available-for-sale securities

17,484

229

2.63

22,954

163

1.43

Other (3)

53,560

250

0.93

41,155

478

2.34

Total interest-earning assets

1,070,802

25,423

4.77

996,432

24,796

5.02

Non-interest-earning assets

51,647

34,785

Total assets

1,122,449

1,031,217

Interest-bearing liabilities:

NOW/IOLA

29,359

0.53

26,848

0.40

Money market

178,589

1,075

1.21

113,893

1,318

2.33

Savings

115,438

0.13

121,988

0.13

Certificates of deposit

377,431

3,557

1.90

422,638

3,860

1.84

Total deposits

700,817

4,781

1.37

685,367

5,310

1.56

Advance payments by borrowers

8,464

0.05

8,643

0.05

Borrowings

114,643

1,195

2.10

52,030

678

2.63

Total interest-bearing liabilities

823,924

5,978

1.46

746,040

5,990

1.62

Non-interest-bearing liabilities:

Non-interest-bearing demand

136,903

—

111,360

—

Other non-interest-bearing liabilities

4,065

—

4,434

—

Total non-interest-bearing liabilities

140,968

—

115,794

—

Total liabilities

964,892

5,978

861,834

5,990

Total equity

157,557

169,383

Total liabilities and total equity

1,122,449

1.46

1,031,217

1.62

Net interest income

19,445

18,806

Net interest rate spread (4)

3.31

3.40

Net interest-earning assets (5)

246,878

250,392

Net interest margin (6)

3.65

3.81

Average interest-earning assets to

interest-bearing liabilities

129.96

133.56

____________

(1) Annualized where appropriate.

(2) Loans include loans and loans held for sale.

(3) Includes FHLBNY demand account and FHLBNY stock dividends.

(4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(6) Net interest margin represents net interest income divided by average total interest-earning assets.

Source: PDL Community Bancorp

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