(GLOBE NEWSWIRE) -- PDL Community Bancorp (the “Company”) (NASDAQ: PDLB), the financial holding company for Ponce Bank (the “Bank”) and Mortgage World Bankers, Inc. (“Mortgage World”), reported net income of $4.0 million, or $0.24 per basic and diluted share, for the third quarter of 2020, compared to a net loss of ($571,000), or ($0.03) per basic and diluted share, for the prior quarter and net income of $709,000, or $0.04 per basic and diluted share, for the third quarter of 2019.
Ponce Bank is a federal stock savings association with 13 branches in the New York City metropolitan area, including one in Union City, New Jersey. The Bank is designated a Minority Depository Institution, a Community Development Financial Institution and a certified U.S. Small Business Administration lender. Mortgage World is a licensed mortgage lender in five states. As a Federal Housing Administration (“FHA”) approved Title II lender, Mortgage World originates and sells to investors single family loans that are guaranteed by the FHA, as well as conventional mortgages.
The Company’s net income for the nine months ended September 30, 2020 was $2.2 million, or $0.13 per basic and diluted share, compared to net income of $2.3 million, or $0.13 per basic and diluted share, for the nine months ended September 30, 2019. This represented a decrease in net income of (4.4%).
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. Much of this investment consists of one-time, non-recurring expenditures. Although COVID-19 pandemic constrained us, we were able to grow our Company to $1.3 billion in assets, and continue our key investments: the implementation of GPS, our Salesforce based CRM, spending $1.3 million in one-time costs; meeting the needs of Ponce Bankers by incurring non-recurring costs of $852,000 to maintain their jobs, temporarily enhance their benefits and protect them from COVID-19 pandemic; advancing our ability to operate electronically, without paper, by investing $982,000 in electronic imaging; and, in addition to the foregoing non-recurring expenses, protecting our asset quality by increasing ALLL by $2.0 million in response to plausible COVID-19 pandemic repercussions. We were able to offset the combined one-time expenses and the increase in ALLL of $5.1 million with the $4.4 million gain recognized from the sale of the real property associated with a former branch, as we further unlock the hidden values in our assets.”
Steven A. Tsavaris, the Company’s Executive Chairman, added “the closing of the Company’s $1.8 million acquisition of Mortgage World in July and its contribution to our earnings of $599,000 in third quarter of 2020 reflects the Company’s potential quick payback, although the results do not reflect the expected integration of the Bank’s and Mortgage World’s operations and sales capabilities. We are pleased to continue to build shareholders’ value by repurchasing shares. As of October 28, 2020 a total of 360,184 shares have been repurchased in 2020.”
Net Income (Loss)
Net income for the three months ended September 30, 2020 was $4.0 million, compared to $571,000 net loss for the three months ended June 30, 2020. The increase in net income reflects a $6.7 million increase in non-interest income, mainly as a result of a $4.4 million gain recognized from the sale of real property, a $1.2 million, or 9.8%, increase in interest and dividend income, a $120,000, or 4.2%, decrease in interest expense, offset by a $1.9 million, or 18.1%, increase in non-interest expense, a $1.2 million increase in provision for income taxes and a $349,000, increase in provision for loan losses.
Net income for the quarter ended September 30, 2020 was $4.0 million, compared to $709,000 in net income for the third quarter of 2019. The increase in net income reflects a $6.7 million increase in non-interest income, mainly as a result of a $4.4 million gain recognized from the sale of real property, a $650,000, or 5.0%, increase in interest and dividend income and a $436,000, or 13.7%, decrease in interest expense, offset by a $3.0 million, or 32.1%, increase in non-interest expense, a $860,000, increase in provision for income taxes and a $606,000 increase in provision for loan losses.
Net income for the nine months ended September 30, 2020 was $2.2 million, compared to $2.3 million in net income for the nine months ended September 30, 2019. The change in net income reflects a $6.4 million, or 318.6%, increase in non-interest income, mainly as a result of a $4.4 million gain on the sale of real property, a $1.3 million, or 3.4%, increase in interest and dividend income, a $448,000, or 4.9%, decrease in interest expense and a $69,000, decrease in provision for income taxes, offset by a $6.5 million, or 23.8%, increase in non-interest expense and a $1.9 million increase in provision for loan losses in response to the COVID-19 pandemic.
Net Interest Margin
Net interest margin increased by 20 basis points to 3.65% for the three months ended September 30, 2020 from 3.45% for the three months ended June 30, 2020, while the net interest rate spread increased by 20 basis points to 3.33% from 3.13% for the same periods. Average interest-earning assets increased by $73.9 million, or 6.7%, mainly as a result of $85.1 million in average outstanding PPP loans, to $1.2 billion for the three months ended September 30, 2020 from $1.1billion for the three months ended June 30, 2020. The average yield on interest-earning assets increased by 8 basis points to 4.57% from 4.49%, for the same periods. Average interest-bearing liabilities increased by $32.1 million, or 3.8%, to $881.0 million for the three months ended September 30, 2020 from $848.9 million for the three months ended June 30, 2020. The average rate on interest-bearing liabilities decreased by 12 basis points to 1.24% from 1.36% for the same periods.
Net interest margin decreased by 18 basis points to 3.65% for the three months ended September 30, 2020 from 3.83% for the three months ended September 30, 2019, while the net interest rate spread decreased by 11 basis points to 3.33% from 3.44% for the same periods. Average interest-earning assets increased by $172.7 million, or 17.1%, mainly as a result of $85.1 million in average outstanding PPP loans, to $1.2 billion, for the three months ended September 30, 2020 from $1.0 billion for the three months ended September 30, 2019. The average yield on interest-earning assets decreased by 51 basis points to 4.57% from 5.08%, for the same periods. Average interest-bearing liabilities increased by $111.5 million, or 14.5%, to $881.0 million, for the three months ended September 30, 2020 from $769.4 million for the three months ended September 30, 2019. The average rate on interest-bearing liabilities decreased by 40 basis points to 1.24% from 1.64% for the same periods.
Non-interest Income
Total non-interest income increased $6.7 million to $7.3 million for the three months ended September 30, 2020 from $574,000 for the three months ended June 30, 2020. The increase in non-interest income for the three months ended September 30, 2020 compared to the three months ended June 30, 2020 was due to a $4.4 million gain on the sale of real property, combined with $2.2 million in gain on sale of mortgage loans, loan origination fees, brokerage commissions and other non-interest income attributable to Mortgage World. Other increases in non-interest income were $132,000 in late and prepayment charges related to mortgage loans and $91,000 in service charges and fees. The increase in non-interest income was offset by a decrease of $23,000 in other non-interest income.
Total non-interest income increased $6.7 million to $7.3 million for the three months ended September 30, 2020 from $579,000 for the three months ended September 30, 2019. The increase in non-interest income for the three months ended September 30, 2020 compared to the three months ended September 30, 2019 was due to a $4.4 million gain on the sale of real property, combined with $2.2 million in gain on sale of mortgage loans, loan origination fees, brokerage commissions and other non-interest income attributable to Mortgage World. The increase in non-interest income was slightly offset by a decrease of $16,000 in late and prepayment charges related to mortgage loans, service charges and fees.
Non-interest Expense
Total non-interest expense increased $1.9 million, or 18.1%, to $12.3 million for the three months ended September 30, 2020, compared to $10.4 million for the three months ended June 30, 2020. The increase in non-interest expense was primarily attributable to an increase of $909,000 in compensation and benefits expense, of which $817,000 was attributable to Mortgage World. Other increases in non-interest expense were $307,000 in occupancy and equipment expense due to new software licenses and security services, $238,000 in direct loan expenses, $217,000 in professional fees, $100,000 in data processing expenses as a result of system enhancements and implementation charges related to new software upgrades, $74,000 in office supplies, telephone and postage, $62,000 in other operating expenses mainly due to employment agency fees and $10,000 in insurance and surety bond premiums. The increase in non-interest expense was offset by decreases of $18,000 in marketing and promotional expenses and $7,000 in regulatory dues. The increase of $217,000 in professional fees was mainly attributable to an increase in consulting fees of $288,000 and an increase in legal fees of $81,000, offset by a decrease in professional services of $134,000 related to the document imaging project adopted in late 2019. Included in non-interest expense for the three months ended September 30, 2020 is $330,000 of additional expenses incurred as a result of the COVID-19 pandemic.
Total non-interest expense increased $3.0 million, or 32.1%, to $12.3 million for the three months ended September 30, 2020, compared to $9.3 million for the three months ended September 30, 2019. The increase in non-interest expense was primarily attributable to an increase of $887,000 in compensation and benefits expense, of which $817,000 was attributable to Mortgage World. Other increases in non-interest expenses were $641,000 in occupancy and equipment expense due to new software licenses and security services, $597,000 in professional fees, $259,000 in other operating expenses mainly due to employment agency fees, $254,000 in direct loan expenses, $198,000 in data processing expenses as a result of system enhancements and implementation charges related to new software upgrades, $105,000 in office supplies, telephone and postage and $81,000 in marketing and promotional expenses, offset by decreases of $21,000 in regulatory dues and $8,000 in insurance and surety bond premiums. The increase of $597,000 in professional fees was mainly attributable to increases in consulting fees of $434,000 and professional services of $50,000 related to the document imaging project adopted in late 2019. Included in non-interest expense for the three months ended September 30, 2020 is $330,000 of additional expenses incurred as a result of the COVID-19 pandemic. Excluding $1.6 million in non-interest expense related to Mortgage World, total non-interest expense increased $1.4 million, or 15.4%, to $10.8 million for the three months ended September 30, 2020 compared to the three months ended September 30, 2019.
Asset Quality
Total non-performing assets were $11.0 million, or 0.86% of total assets, at September 30, 2020, a decrease of $597,000 from $11.6 million, or 0.95% of total assets, at June 30, 2020 and a decrease of $620,000 from $11.6 million, or 1.10% of total assets, at December 31, 2019. Comparing non-performing assets at September 30, 2020 to June 30, 2020, total non-accruals inclusive of troubled debt restructured (“TDR”) loans related to nonresidential loans decreased by $526,000 and 1-4 family residential loans decreased by $281,000. Comparing nonperforming assets at September 30, 2020 to December 31, 2019, total non-accruals inclusive of TDR loans related to nonresidential loans increased by $284,000, offset by a decrease in construction and land loans of $1.1 million.
The Company continues to assess the economic impact of the COVID-19 pandemic on borrowers and believes that it is likely that the pandemic 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 $14.4 million, or 1.28% of total loans (total loans include $86.2 million of PPP loans) at September 30, 2020, compared to $13.8 million, or 1.27% of total loans, at June 30, 2020 and $12.3 million, or 1.28% of total loans, at December 31, 2019. Excluding PPP loans, the allowance for loan losses was 1.39% of total loans at September 30, 2020 and 1.38% of total loans at June 30, 2020. Net recoveries totaled $1,000 for the quarter ended September 30, 2020, $6,000 for the quarter ended June 30, 2020 and $74,000 for the quarter ended December 31, 2019.
Through October 20, 2020, 419 loans aggregating $381.7 million had requested forbearance primarily consisting of the deferral of principal, interest, and escrow payments for a period of three months. Of those 419 loans, 323 loans aggregating $290.7 million are no longer in deferment and are now performing. Of the 419 loans, 96 in the amount of $91.0 million remained in deferment. Of the 96 loans in deferment, 92 loans in the amount of $87.1 million are in renewed forbearance and four loans in the amount of $3.9 million are in their original forbearance. All of these loans had been performing in accordance with their contractual obligations prior to the granting of the initial forbearance. Forbearance periods currently do not extend into 2021. 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. 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 $223.6 million, or 21.2%, to $1.3 billion at September 30, 2020 from $1.1 billion at December 31, 2019. The increase in total assets is mainly attributable to increases in net loans receivable and mortgage loans held for sale at fair value of $165.3 million, of which $86.2 million related to PPP loans, cash and cash equivalents of $48.4 million, other assets of $8.2 million, accrued interest receivable of $6.0 million, investments in other banks of $2.7 million and FHLBNY stock of $679,000, offset by decreases in available-for-sale securities of $7.0 million, $633,000 in net premises and equipment and deferred taxes of $138,000.
Cash and cash equivalents increased $48.4 million, or 174.9%, to $76.1 million at September 30, 2020, compared to $27.7 million at December 31, 2019. The increase in cash and cash equivalents was primarily the result of increases of $191.2 million in net deposits, of which $41.9 million is related to net PPP funding, $17.3 million from maturities and calls of available-for-sale securities, $12.9 million in net advances from FHLBNY and $4.7 million proceeds from the sale of real property. The increase in cash and cash equivalents was offset by increases of $165.3 million in net loans receivable and mortgage loans held for sale at fair value, of which $86.2 million related to PPP loans, $10.1 million in purchases of available-for-sale securities and the $1.8 million purchase price related to the acquisition of Mortgage World.
Net loans receivable at September 30, 2020 increased $153.2 million, or 16.0%, to $1.1 billion from $ 955.7 million at December 31, 2019. The increase was primarily due to increases of $85.8 million, or 789.0%, in business loans, of which $86.2 million related to PPP loans, $34.5 million, or 13.8%, in multifamily residential loans, $16.6 million, or 4.2%, in 1-4 family residential loans, $10.5 million, or 5.1%, in nonresidential properties loans, $8.6 million, or 696.6%, in consumer loans and $412,000, or 0.4%, in construction and land loans. The increase in net loans receivable was offset by a decrease of $1.2 million, or 60.1%, in net deferred loan origination costs. The increase in the allowance for losses on loans of $2.1 million, substantially related to the COVID-19 pandemic, also decreased net loans receivable.
Total deposits increased $191.2 million, or 24.4%, to $973.2 million at September 30, 2020 from $782.0 million at December 31, 2019. The increase in deposits was mainly attributable to increases of $124.7 million, or 44.1%, in NOW, money market, reciprocal deposits and savings accounts, $76.8 million, or 70.1%, in demand deposits, of which $41.9 million is related to net PPP funding, offset by a decrease of $10.3 million, or 2.7%, in total certificates of deposit, which includes brokered certificates of deposit and listing service deposits. The $124.7 million increase in NOW, money market, reciprocal deposits and savings accounts was mainly attributable to increases of $62.2 million, or 71.7%, in money market accounts, $60.7 million, or 127.4%, in reciprocal deposits and a $5.1 million, or 4.4%, in savings accounts, offset by a decrease of $3.2 million, or 9.9%, in NOW/IOLA accounts.
Net advances from the FHLBNY increased $12.9 million, or 12.3%, to $117.3 million at September 30, 2020 from $104.4 million at December 31, 2019. The net increase in FHLBNY advances has a weighted average rate of 0.9%.
Total stockholders’ equity remained substantially the same, $158.4 million at September 30, 2020 and December 31, 2019. The $28,000 decrease in stockholders’ equity was mainly attributable to $3.8 million in stock repurchases, offset by increases of $2.2 million in net income, $1.0 million related to restricted stock units and stock options, $353,000 related to the Company’s Employee Stock Ownership Plan and $148,000 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 second 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 September 30, 2020, the Company had repurchased a total of 1,436,814 shares under the repurchase programs at a weighted average price of $13.62 per share, of which 1,346,679 are reported as treasury stock. Of the 1,436,814 shares repurchased, 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.
About PDL Community Bancorp
PDL Community Bancorp is the financial holding company for Ponce Bank and Mortgage World Bankers, Inc. 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. Mortgage World Bankers, Inc. is a licensed mortgage lender in five states. As a Federal Housing Administration (“FHA”)-approved Title II lender, Mortgage World Bankers, Inc. originates and sells to investors single family mortgage loans guaranteed by the FHA, as well as conventional mortgages.
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
September 30,
June 30,
March 31,
December 31,
September 30,
2020
2020
2020
2019
2019
ASSETS
Cash and due from banks:
Cash
$
14,302
$
15,875
$
13,165
$
6,762
$
6,425
Interest-bearing deposits in banks
61,790
60,756
90,795
20,915
40,965
Total cash and cash equivalents
76,092
76,631
103,960
27,677
47,390
Available-for-sale securities, at fair value
14,512
13,800
19,140
21,504
51,966
Investments in other banks
2,739
—
—
—
—
Mortgage loans held for sale, at fair value
13,100
1,030
1,030
1,030
—
Loans receivable, net
1,108,956
1,072,417
972,979
955,737
948,548
Accrued interest receivable
9,995
7,677
4,198
3,982
3,893
Premises and equipment, net
32,113
32,102
32,480
32,746
32,805
Federal Home Loan Bank of New York stock (FHLBNY), at cost
6,414
6,422
7,889
5,735
8,659
Deferred tax assets
3,586
4,328
4,140
3,724
3,925
Other assets
9,844
5,824
5,127
1,621
2,802
Total assets
$
1,277,351
$
1,220,231
$
1,150,943
$
1,053,756
$
1,099,988
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
$
973,244
$
936,219
$
829,741
$
782,043
$
757,845
Accrued interest payable
58
48
86
97
81
Advance payments by borrowers for taxes and insurance
7,739
6,007
8,295
6,348
7,780
Advances from the Federal Home Loan Bank of New York and others
117,283
117,284
152,284
104,404
169,404
Warehouse lines of credit
9,065
—
—
—
—
Mortgage loan fundings payable
1,457
—
—
—
—
Other liabilities
10,131
5,674
4,794
2,462
4,324
Total liabilities
1,118,977
1,065,232
995,200
895,354
939,434
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
185
185
185
185
Treasury stock, at cost
(18,281
)
(17,172
)
(16,490
)
(14,478
)
(12,663
)
Additional paid-in-capital
85,817
85,481
85,132
84,777
85,750
Retained earnings
95,913
91,904
92,475
93,688
101,140
Accumulated other comprehensive income (loss)
168
150
110
20
(7,947
)
Unearned compensation ─ ESOP
(5,428
)
(5,549
)
(5,669
)
(5,790
)
(5,911
)
Total stockholders' equity
158,374
154,999
155,743
158,402
160,554
Total liabilities and stockholders' equity
$
1,277,351
$
1,220,231
$
1,150,943
$
1,053,756
$
1,099,988
PDL Community Bancorp and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share data)
For the Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2020
2020
2020
2019
2019
Interest and dividend income:
Interest on loans receivable
$
13,375
$
12,162
$
12,782
$
12,488
$
12,663
Interest on deposits due from banks
5
3
66
73
117
Interest and dividend on available-for-sale securities and FHLBNY stock
223
228
182
181
173
Total interest and dividend income
13,603
12,393
13,030
12,742
12,953
Interest expense:
Interest on certificates of deposit
1,597
1,730
1,827
1,921
1,896
Interest on other deposits
500
534
692
616
759
Interest on borrowings
655
608
587
643
533
Total interest expense
2,752
2,872
3,106
3,180
3,188
Net interest income
10,851
9,521
9,924
9,562
9,765
Provision for loan losses
620
271
1,146
95
14
Net interest income after provision for loan losses
10,231
9,250
8,778
9,467
9,751
Non-interest income:
Service charges and fees
236
145
248
266
247
Brokerage commissions
447
22
50
43
36
Late and prepayment charges
145
13
119
204
150
Gain on sale of mortgage loans
1,372
—
—
—
—
Loan origination
269
—
—
—
—
Gain on sale of real property
4,412
—
—
—
—
Other
371
394
205
152
146
Total non-interest income
7,252
574
622
665
579
Non-interest expense:
Compensation and benefits
5,554
4,645
5,008
4,726
4,667
Loss on termination of pension plan
—
—
—
9,930
—
Occupancy and equipment
2,584
2,277
2,017
2,026
1,943
Data processing expenses
596
496
467
394
398
Direct loan expenses
437
199
212
171
183
Insurance and surety bond premiums
138
128
121
102
146
Office supplies, telephone and postage
386
312
316
316
281
Professional fees
1,553
1,336
1,627
1,038
956
Marketing and promotional expenses
127
145
234
39
46
Directors fees
69
69
69
69
69
Regulatory dues
49
56
46
58
70
Other operating expenses
834
772
705
606
575
Total non-interest expense
12,327
10,435
10,822
19,475
9,334
Income (loss) before income taxes
5,156
(611
)
(1,422
)
(9,343
)
996
Provision (benefit) for income taxes
1,147
(40
)
(209
)
(1,891
)
287
Net income (loss)
$
4,009
$
(571
)
$
(1,213
)
$
(7,452
)
$
709
Earnings (loss) per share:
Basic
$
0.24
$
(0.03
)
$
(0.07
)
$
(0.43
)
$
0.04
Diluted
$
0.24
$
(0.03
)
$
(0.07
)
$
(0.43
)
$
0.04
PDL Community Bancorp and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share data)
For the Nine Months Ended September 30,
2020
2019
Variance $
Variance %
Interest and dividend income:
Interest on loans receivable
$
38,319
$
36,818
$
1,501
4.08
%
Interest on deposits due from banks
74
498
(424
)
(85.14
%)
Interest and dividend on available-for-sale securities and FHLBNY stock
633
433
200
46.19
%
Total interest and dividend income
39,026
37,749
1,277
3.38
%
Interest expense:
Interest on certificates of deposit
5,154
5,756
(602
)
(10.46
%)
Interest on other deposits
1,726
2,211
(485
)
(21.94
%)
Interest on borrowings
1,850
1,211
639
52.77
%
Total interest expense
8,730
9,178
(448
)
(4.88
%)
Net interest income
30,296
28,571
1,725
6.04
%
Provision for loan losses
2,037
163
1,874
*
Net interest income after provision for loan losses
28,259
28,408
(149
)
(0.52
%)
Non-interest income:
Service charges and fees
629
705
(76
)
(10.78
%)
Brokerage commissions
519
169
350
207.10
%
Late and prepayment charges
277
551
(274
)
(49.73
%)
Gain on sale of mortgage loans
1,372
—
1,372
—
%
Loan origination
269
—
269
—
%
Gain on sale of real property
4,412
—
4,412
—
%
Other
970
593
377
63.58
%
Total non-interest income
8,448
2,018
6,430
318.63
%
Non-interest expense:
Compensation and benefits
15,207
14,157
1,050
7.42
%
Occupancy and equipment
6,878
5,586
1,292
23.13
%
Data processing expenses
1,559
1,182
377
31.90
%
Direct loan expenses
848
521
327
62.76
%
Insurance and surety bond premiums
387
312
75
24.04
%
Office supplies, telephone and postage
1,014
869
145
16.69
%
Professional fees
4,516
2,199
2,317
105.37
%
Marketing and promotional expenses
506
119
387
325.21
%
Directors fees
207
225
(18
)
(8.00
%)
Regulatory dues
151
173
(22
)
(12.72
%)
Other operating expenses
2,311
1,789
522
29.18
%
Total non-interest expense
33,584
27,132
6,452
23.78
%
Income before income taxes
3,123
3,294
(171
)
(5.19
%)
Provision for income taxes
898
967
(69
)
(7.14
%)
Net income
$
2,225
$
2,327
$
(102
)
(4.38
%)
Earnings per share:
Basic
$
0.13
$
0.13
$
—
—
%
Diluted
$
0.13
$
0.13
$
—
—
%
*Indicates more than 500%.
PDL Community Bancorp and Subsidiaries
Key Metrics
At or for the Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2020
2020
2020
2019
2019
Performance Ratios:
Return on average assets
1.28
%
(0.20
%)
(0.46
%)
(2.79
%)
0.27
%
Return on average equity
9.95
%
(1.47
%)
(3.07
%)
(18.24
%)
1.71
%
Net interest rate spread (1)
3.33
%
3.13
%
3.51
%
3.34
%
3.44
%
Net interest margin (2)
3.65
%
3.45
%
3.87
%
3.71
%
3.83
%
Non-interest expense to average assets
3.95
%
3.57
%
4.07
%
7.30
%
3.54
%
Efficiency ratio (3)
68.09
%
103.37
%
102.62
%
190.43
%
90.24
%
Average interest-earning assets to average interest- bearing liabilities
134.35
%
130.72
%
129.16
%
130.64
%
131.38
%
Average equity to average assets
12.90
%
13.30
%
14.85
%
15.32
%
15.71
%
Capital Ratios:
Total capital to risk weighted assets (bank only)
16.93
%
17.52
%
17.84
%
18.62
%
19.29
%
Tier 1 capital to risk weighted assets (bank only)
15.68
%
16.26
%
16.59
%
17.36
%
18.03
%
Common equity Tier 1 capital to risk-weighted assets (bank only)
15.68
%
16.26
%
16.59
%
17.36
%
18.03
%
Tier 1 capital to average assets (bank only)
11.46
%
11.63
%
12.76
%
12.92
%
13.62
%
Asset Quality Ratios:
Allowance for loan losses as a percentage of total loans
1.28
%
1.27
%
1.37
%
1.28
%
1.27
%
Allowance for loan losses as a percentage of nonperforming loans
131.00
%
118.89
%
138.47
%
106.30
%
117.72
%
Net (charge-offs) recoveries to average outstanding loans
0.00
%
0.01
%
0.00
%
0.03
%
(0.15
%)
Non-performing loans as a percentage of total loans
0.98
%
1.08
%
1.00
%
1.20
%
1.09
%
Non-performing loans as a percentage of total assets
0.86
%
0.95
%
0.85
%
1.10
%
0.94
%
Total non-performing assets as a percentage of total assets
0.86
%
0.95
%
0.85
%
1.10
%
0.94
%
Total non-performing assets, accruing loans past due 90 days or more, and accruing troubled debt restructured loans as a percentage of total assets
1.36
%
1.51
%
1.49
%
1.92
%
1.73
%
Other:
Number of offices (4)
20
14
14
14
14
Number of full-time equivalent employees (5)
230
179
184
183
187
(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.
(4) Number of offices at September 30, 2020 included 6 offices due to acquisition of Mortgage World.
(5) Number of full-time equivalent employees at September 30, 2020 included 44 employees due to acquisition of Mortgage World.
Key metrics calculated on income statement items were annualized where appropriate.
PDL Community Bancorp and Subsidiaries
Loan Portfolio
As of
September 30,
June 30,
March 31,
December 31,
September 30,
2020
2020
2020
2019
2019
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in thousands)
Mortgage loans:
1-4 family residential
Investor Owned
$
320,438
28.55
%
$
317,055
29.25
%
$
308,206
31.31
%
$
305,272
31.60
%
$
309,065
32.23
%
Owner-Occupied
93,340
8.31
%
91,345
8.43
%
93,887
9.54
%
91,943
9.52
%
90,843
9.47
%
Multifamily residential
284,775
25.37
%
274,641
25.34
%
259,326
26.35
%
250,239
25.90
%
244,644
25.51
%
Nonresidential properties
217,771
19.40
%
209,068
19.29
%
210,225
21.36
%
207,225
21.45
%
195,952
20.43
%
Construction and land
99,721
8.89
%
96,841
8.93
%
100,202
10.18
%
99,309
10.28
%
106,124
11.07
%
Total mortgage loans
1,016,045
90.52
%
988,950
91.24
%
971,846
98.74
%
953,988
98.75
%
946,628
98.72
%
Non-mortgage loans:
Business loans (1)
96,700
8.61
%
93,394
8.62
%
11,183
1.13
%
10,877
1.12
%
11,040
1.15
%
Consumer loans
9,806
0.87
%
1,578
0.14
%
1,288
0.13
%
1,231
0.13
%
1,252
0.13
%
Total non-mortgage loans
106,506
9.48
%
94,972
8.76
%
12,471
1.26
%
12,108
1.25
%
12,292
1.28
%
Total loans, gross
1,122,551
100.00
%
1,083,922
100.00
%
984,317
100.00
%
966,096
100.00
%
958,920
100.00
%
Net deferred loan origination costs
786
2,256
2,146
1,970
1,788
Allowance for losses on loans
(14,381
)
(13,761
)
(13,484
)
(12,329
)
(12,160
)
Loans, net
$
1,108,956
$
1,072,417
$
972,979
$
955,737
$
948,548
(1) As of September 30, 2020, business loans include $86.2 million of PPP loans.
PDL Community Bancorp and Subsidiaries
Deposits
As of
September 30,
June 30,
March 31,
December 31,
September 30,
2020
2020
2020
2019
2019
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in thousands)
Demand
$
186,328
19.15
%
$
192,429
20.55
%
$
110,801
13.35
%
$
109,548
14.01
%
$
104,181
13.75
%
Interest-bearing deposits:
NOW/IOLA accounts
29,618
3.04
%
26,477
2.83
%
31,586
3.81
%
32,866
4.20
%
28,600
3.77
%
Money market accounts
148,877
15.30
%
125,631
13.42
%
121,629
14.66
%
86,721
11.09
%
98,707
13.02
%
Reciprocal deposits
108,367
11.13
%
96,915
10.35
%
62,384
7.52
%
47,659
6.09
%
42,292
5.58
%
Savings accounts
120,883
12.42
%
119,277
12.74
%
112,318
13.53
%
115,751
14.80
%
115,402
15.23
%
Total NOW, money market, reciprocal and savings accounts
407,745
41.89
%
368,300
39.34
%
327,917
39.52
%
282,997
36.18
%
285,001
37.60
%
Certificates of deposit of $250K or more
80,403
8.26
%
81,786
8.74
%
81,486
9.82
%
84,263
10.77
%
86,498
11.41
%
Brokered certificates of deposit
55,878
5.74
%
55,878
5.97
%
51,661
6.23
%
76,797
9.82
%
58,570
7.73
%
Listing service deposits
49,342
5.07
%
54,370
5.81
%
55,842
6.73
%
32,400
4.14
%
22,458
2.96
%
Certificates of deposit less than $250K
193,548
19.89
%
183,456
19.59
%
202,034
24.35
%
196,038
25.08
%
201,137
26.55
%
Total certificates of deposit
379,171
38.96
%
375,490
40.11
%
391,023
47.13
%
389,498
49.81
%
368,663
48.65
%
Total interest-bearing deposits
786,916
80.85
%
743,790
79.45
%
718,940
86.65
%
672,495
85.99
%
653,664
86.25
%
Total deposits
$
973,244
100.00
%
$
936,219
100.00
%
$
829,741
100.00
%
$
782,043
100.00
%
$
757,845
100.00
%
(1) As of September 30, 2020, included in demand deposits are $41.9 million related to net PPP funding.
PDL Community Bancorp and Subsidiaries
Nonperforming Assets
For the Quarters Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2020
2020
2020
2019
2019
(Dollars in thousands)
Non-accrual loans:
Mortgage loans:
1-4 family residential
Investor owned
$
2,750
$
2,767
$
2,327
$
2,312
$
1,281
Owner occupied
1,075
1,327
1,069
1,009
1,052
Multifamily residential
210
—
—
—
Nonresidential properties
3,830
4,355
3,228
3,555
3,099
Construction and land
—
—
—
1,118
1,292
Non-mortgage loans:
Business
—
—
—
—
—
Consumer
—
—
—
—
—
Total non-accrual loans (not including non-accruing troubled debt restructured loans)
$
7,865
$
8,449
$
6,624
$
7,994
$
6,724
Non-accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned
$
267
$
272
$
276
$
467
$
471
Owner occupied
2,191
2,198
2,185
2,491
2,488
Multifamily residential
—
—
—
—
—
Nonresidential properties
655
656
653
646
647
Construction and land
—
—
—
—
—
Non-mortgage loans:
Business
—
—
—
—
—
Consumer
—
—
—
—
—
Total non-accruing troubled debt restructured loans
3,113
3,126
3,114
3,604
3,606
Total non-accrual loans
$
10,978
$
11,575
$
9,738
$
11,598
$
10,330
Total non-performing assets
$
10,978
$
11,575
$
9,738
$
11,598
$
10,330
Accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned
$
3,396
$
3,730
$
3,730
$
5,191
$
5,226
Owner occupied
2,177
2,348
2,359
2,090
2,114
Multifamily residential
—
—
—
—
—
Nonresidential properties
759
762
1,300
1,306
1,317
Construction and land
—
—
—
—
—
Non-mortgage loans:
Business
—
—
—
14
35
Consumer
—
—
—
—
—
Total accruing troubled debt restructured loans
$
6,332
$
6,840
$
7,389
$
8,601
$
8,692
Total non-performing assets and accruing troubled debt restructured loans
$
17,310
$
18,415
$
17,127
$
20,199
$
19,022
Total non-performing loans to total loans
0.98
%
1.08
%
1.00
%
1.20
%
1.09
%
Total non-performing assets to total assets
0.86
%
0.95
%
0.85
%
1.10
%
0.94
%
Total non-performing assets and accruing troubled debt restructured loans to total assets
1.36
%
1.51
%
1.49
%
1.92
%
1.73
%
PDL Community Bancorp and Subsidiaries
Average Balance Sheets
For the Three Months Ended September 30,
2020
2019
Average
Average
Outstanding
Average
Outstanding
Average
Balance
Interest
Yield/Rate (1)
Balance
Interest
Yield/Rate (1)
(Dollars in thousands)
Interest-earning assets:
Loans (2)
$
1,109,799
$
13,375
4.79
%
$
957,987
$
12,663
5.24
%
Available-for-sale securities
13,741
132
3.81
%
22,415
81
1.43
%
Other (3)
60,068
96
0.64
%
30,460
209
2.72
%
Total interest-earning assets
1,183,608
13,603
4.57
%
1,010,862
12,953
5.08
%
Non-interest-earning assets
58,493
35,840
Total assets
$
1,242,101
$
1,046,702
Interest-bearing liabilities:
NOW/IOLA
$
29,687
$
40
0.54
%
$
28,183
$
35
0.49
%
Money market
224,339
422
0.75
%
144,666
685
1.88
%
Savings
121,355
37
0.12
%
118,308
38
0.13
%
Certificates of deposit
371,094
1,597
1.71
%
379,915
1,896
1.98
%
Total deposits
746,475
2,096
1.12
%
671,072
2,654
1.57
%
Advance payments by borrowers
7,756
1
0.05
%
7,991
1
0.05
%
Borrowings
126,729
655
2.06
%
90,361
533
2.34
%
Total interest-bearing liabilities
880,960
2,752
1.24
%
769,424
3,188
1.64
%
Non-interest-bearing liabilities:
Non-interest-bearing demand
191,269
—
109,491
—
Other non-interest-bearing liabilities
9,607
—
3,402
—
Total non-interest-bearing liabilities
200,876
—
112,893
—
Total liabilities
1,081,836
2,752
882,317
3,188
Total equity
160,265
164,385
Total liabilities and total equity
$
1,242,101
1.24
%
$
1,046,702
1.64
%
Net interest income
$
10,851
$
9,765
Net interest rate spread (4)
3.33
%
3.44
%
Net interest-earning assets (5)
$
302,648
$
241,438
Net interest margin (6)
3.65
%
3.83
%
Average interest-earning assets to interest-bearing liabilities
134.35
%
131.38
%
(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 Nine Months Ended September 30,
2020
2019
Average
Average
Outstanding
Average
Outstanding
Average
Balance
Interest
Yield/Rate (1)
Balance
Interest
Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Loans (2)
$
1,036,706
$
38,319
4.94
%
$
940,971
$
36,818
5.23
%
Available-for-sale securities
16,227
361
2.97
%
22,772
244
1.43
%
Other (3)
55,746
346
0.83
%
37,551
687
2.45
%
Total interest-earning assets
1,108,679
39,026
4.70
%
1,001,294
37,749
5.04
%
Non-interest-earning assets
53,945
35,142
Total assets
$
1,162,624
$
1,036,436
Interest-bearing liabilities:
NOW/IOLA
$
29,469
$
117
0.53
%
$
27,298
$
86
0.42
%
Money market
193,951
1,497
1.03
%
124,263
2,004
2.16
%
Savings
117,424
109
0.12
%
120,748
118
0.13
%
Certificates of deposit
375,303
5,154
1.83
%
408,241
5,756
1.89
%
Total deposits
716,147
6,877
1.28
%
680,550
7,964
1.56
%
Advance payments by borrowers
8,226
3
0.05
%
8,423
3
0.05
%
Borrowings
118,701
1,850
2.08
%
64,947
1,211
2.49
%
Total interest-bearing liabilities
843,074
8,730
1.38
%
753,920
9,178
1.63
%
Non-interest-bearing liabilities:
Non-interest-bearing demand
155,158
—
110,730
—
Other non-interest-bearing liabilities
5,927
—
4,087
—
Total non-interest-bearing liabilities
161,085
—
114,817
—
Total liabilities
1,004,159
8,730
868,737
9,178
Total equity
158,465
167,699
Total liabilities and total equity
$
1,162,624
1.38
%
$
1,036,436
1.63
%
Net interest income
$
30,296
$
28,571
Net interest rate spread (4)
3.32
%
3.41
%
Net interest-earning assets (5)
$
265,605
$
247,374
Net interest margin (6)
3.65
%
3.81
%
Average interest-earning assets to
interest-bearing liabilities
131.50
%
132.81
%
(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