PDL Community Bancorp Announces 2021 Second Quarter Results

Ponce Bank Aug 5, 2021 12:00:00 AM

(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 $5.9 million, or $0.35 per basic and diluted share, for the second quarter of 2021, compared to net income of $2.5 million, or $0.15 per basic and diluted share, for the prior quarter and a net loss of ($571,000), or ($0.03) per basic and diluted share, for the second quarter of 2020.

Second Quarter Highlights

Net interest income of $13.7 million for the current quarter increased $840,000, or 6.5%, from prior quarter and increased $4.2 million, or 44.2%, from same quarter last year.

Income before income taxes of $7.8 million for the current quarter increased $4.7 million, or 146.5%, from prior quarter and increased $8.5 million from a loss of ($611,000) for the same quarter last year.

Cost of interest-bearing deposits was 0.67% for the current quarter, a decrease from 0.77% for the prior quarter and from 1.27% for the same quarter last year.

Net interest margin was 3.84% for the current quarter, a decrease from 4.00% for the prior quarter and an increase from 3.45% for the same quarter last year.

Net interest rate spread was 3.60% for the current quarter, a decrease from 3.76% for the prior quarter and an increase from 3.13% for the same quarter last year.

Efficiency ratio was 61.80% for the current quarter compared to 76.94% for the prior quarter and 103.37% for the same quarter last year.

Non-performing loans of $9.0 million decreased $2.5 million year-over-year and equates to 0.66% of total loans receivable as of June 30, 2021.

Net loans receivable were $1.34 billion at June 30, 2021, an increase of $184.9 million, or 16.0%, from December 31, 2020.

Deposits were $1.24 billion at June 30, 2021, an increase of $206.6 million, or 20.1%, from December 31, 2020.

President and Chief Executive Officer’s Comments

Carlos P. Naudon, the Company’s President and CEO, noted “We are pleased to have added to the great start we had for 2021; we continue executing well on all fronts. Our deposit growth is well centered on new customer acquisition while lowering our cost of funds; likewise, our loan portfolio expansion continues with little adverse effect on our net interest margin and ALLL. Importantly, our growth in PPP loans, a large but not the sole source of our growth, has had a very positive impact on our communities. GPS, our Salesforce initiative, has begun to tangibly demonstrate its value while we focus on lowering our operating expenses and increasing profitability. On June 15, 2021, Ponce Bank was approved by the United States Department of the Treasury to receive $1.8 million in federal Economic Relief Funds for Small Businesses. This is further evidence that we are well positioned to benefit from the rediscovery of the important role MDIs and CDFIs like us have in remediating the disparate effects of the pandemic, and the wealth and financial gaps present, in our communities.”

Executive Chairman’s Comments

Steven A. Tsavaris, the Company’s Executive Chairman, added “As we cross the first anniversary of our acquisition, we are pleased that Mortgage World continues to contribute to our product expansion and diversification; its integration with Ponce Bank branches will be enhanced by the renovation of our banking facilities.

Loan Payment Deferrals

Through June 30, 2021, 417 loans aggregating $385.0 million had received forbearance, primarily consisting of the deferral of principal, interest, and escrow payments for a period of three months, of which 23 loans have since been paid-off by borrowers as of June 30, 2021. As of June 30, 2021, 353 loans aggregating $318.7 million were no longer in forbearance and continue performing pursuant to their terms and 41 loans in the amount of $47.8 million remained in forbearance as a result of renewed forbearance for a period of three months. Of the 41 loans receiving renewed forbearance, 27 loans, totaling $23.3 million are related to one-to-four family residential real estate. 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. 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.

Results of Operations Summary

Net income for the three months ended June 30, 2021 was $5.9 million, compared to $2.5 million of net income for the three months ended March 31, 2021 and a ($571,000) net loss for the three months ended June 30, 2020.

The $3.5 million increase in net income for the three months ended June 30, 2021 compared to the three months ended March 31, 2021 is due to an increase of $4.4 million in non-interest income primarily due to an increase of $3.5 million, net of expenses, in gain on sale of real property. The increase in net income was also attributable to an increase of $840,000 in net interest income, a decrease of $100,000 in provision for loan losses, offset by increases of $1.2 million in provision for income taxes and $726,000 in non-interest expense.

The $6.5 million increase in net income for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 is due to an increase of $7.8 million in non-interest income primarily due to an increase of $4.2 million, net of expenses, in gain on sale of real property and $1.3 million in income on sale of mortgage loans attributable to Mortgage World. The increase in net income was also attributable to $4.2 million in net interest income. The increase in net income was offset by increases of $3.2 million in non-interest expense, $2.0 million in provision for income taxes, and $315,000 in provision for loan losses.

Net income for the six months ended June 30, 2021 was $8.4 million, compared to a ($1.8 million) net loss for the six months ended June 30, 2020. The change from the six months ended June 30, 2020 is primarily due to an $11.0 million increase in non-interest income primarily due to $4.8 million, net of expenses, in gain on sale of real property, $2.8 million in income on sale of mortgage loans and $1.5 million in income from loan originations attributable to Mortgage World. The increase in net income was also attributable to a $7.2 million increase in net interest income and a decrease of $145,000 in provision for loan losses. The increase in net income was offset by increases of $5.3 million in non-interest expense and $2.9 million in provision for income taxes.

Net interest income for the three months ended June 30, 2021 was $13.7 million, an increase of $840,000, or 6.5%, compared to the three months ended March 31, 2021 and an increase of $4.2 million, or 44.2%, compared to the three months ended June 30, 2020. The increase of $840,000 in net interest income compared to the three months ended March 31, 2021 was attributable to an increase of $667,000 in interest and dividend income and a decrease of $173,000 in interest expense. The increase of $4.2 million in net interest income for the three months ended June 30, 2021 compared to three months ended June 30, 2020 was attributable to an increase of $3.5 million in interest and dividend income and a decrease of $760,000 in interest expense.

Net interest income for the six months ended June 30, 2021 was $26.6 million, an increase of $7.2 million, or 36.9%, compared to the six months ended June 30, 2020. The increase in net interest income was attributable to an increase of $5.6 million in interest and dividend income and a decrease of $1.6 million in interest expense.

Net interest margin was 3.84% for the three months ended June 30, 2021, a decrease of 16 basis points from 4.00% for the three months ended March 31, 2021 and an increase of 39 basis points from 3.45% for the three months ended June 30, 2020.

Net interest rate spread decreased by 16 basis points to 3.60% for the three months ended June 30, 2021 from 3.76% for the three months ended March 31, 2021 and increased by 47 basis points from 3.13% for the three months ended June 30, 2020. The decrease in the net interest rate spread for the three months ended March 31, 2021 was primarily due to a decrease in the average yields on interest-earning assets of 27 basis points to 4.43% for the three months ended June 30, 2021 from 4.70% for the three months ended March 31, 2021, offset by a decrease on the average rates on interest-bearing liabilities of 11 basis points to 0.83% for the three months ended June 30, 2021 from 0.94% for the three months ended March 31, 2021. The increase in the net interest rate spread for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily due to a decrease on the average rates on interest-bearing liabilities of 53 basis points to 0.83% for the three months ended June 30, 2021 from 1.36% for the three months ended June 30, 2020, offset by a slight decrease in the average yields on interest-earning assets of 6 basis points to 4.43% for the three months ended June 30, 2021 from 4.49% for the three months ended June 30, 2020.

Non-interest income increased $4.4 million to $8.3 million for the three months ended June 30, 2021 from $3.9 million for the three months ended March 31, 2021 and increased $7.8 million from $574,000 for the three months ended June 30, 2020.

The increase in non-interest income for the three months ended June 30, 2021 compared to the three months ended March 31, 2021 was primarily due to increases of $3.5 million, net of expenses, from gain on the sale of real property recognized in the second quarter of 2021, $432,000 in loan origination fees, $425,000 in other non-interest income and $207,000 in brokerage commissions, offset by a decrease of $220,000 in income on sale of mortgage loans attributable to Mortgage World operations.

The increase in non-interest income for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily due to increases of $4.2 million, net of expenses, from gain on the sale of real property, $1.3 million in income on sale of mortgage loans, $971,000 in loan origination fees, $418,000 in other non-interest income, $408,000 in brokerage commissions, $285,000 in late and prepayment charges and $221,000 service charges and fees.

Non-interest income increased $11.0 million to $12.2 million for the six months ended June 30, 2021 from $1.2 million for the six months ended June 30, 2020. The increase in non-interest income for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was primarily due to increases of $4.8 million, net of expenses, from gain on the sale of real property, $2.8 million on sale of mortgage loans and $1.5 million in loan originations attributable to Mortgage World. Other increases in non-interest income are $600,000 in other non-interest income, $581,000 in brokerage commissions, $410,000 in late and prepayment charges and $302,000 in service charges and fees.

Non-interest expense increased $726,000, or 5.6%, to $13.6 million for the three months ended June 30, 2021, from $12.9 million for the three months ended March 31, 2021 and increased $3.2 million from $10.4 million for the three months ended June 30, 2020.

The increase in non-interest expense for the three months ended June 30, 2021, compared to the three months ended March 31, 2021 was attributable to increases of $1.6 million in professional fees, primarily attributable to an increase of $1.0 million in consulting expenses related to a third-party service provider that provided loan origination services related to the PPP loans, $204,000 in occupancy and equipment, $142,000 in direct loan expenses, and $139,000 in data processing expenses, offset by a decrease of $1.5 million in compensation and benefits, which was specifically related to the allocable portion of employee expenses related to the origination of PPP loans, netted against PPP loan origination fees received from the SBA.

The increase in non-interest expense for the three months ended June 30, 2021, compared to the three months ended June 30, 2020 primarily reflects increases of $1.6 million in professional fees, primarily attributable to an increase of $1.2 million in consulting expenses related to a third-party service provider that provided loan origination services related to PPP loans, $952,000 in direct loan expenses, $561,000 in occupancy and equipment, and $237,000 in data processing expenses, offset by a decrease of $433,000 in compensation and benefits, which was specifically related to the allocable portion of employee expenses related to the origination of PPP loans, netted against PPP loan origination fees received from the SBA.

Non-interest expense increased $5.3 million, or 24.9%, to $26.6 million for the six months ended June 30, 2021, compared to $21.3 million for the six months ended June 30, 2020. The increase in non-interest expense for the six months ended June 30, 2021, compared to the six months ended June 30, 2020 was attributable to increases of $1.7 million in direct loan expenses, $1.2 million in occupancy and equipment, $1.2 million in professional fees, primarily due to an increase in consulting expenses related to a third-party service provider that provided loan origination services related to PPP loans, $364,000 in data processing expenses and $511,000 in other operating expenses.

Balance Sheet Summary

Total assets increased $192.4 million, or 14.2%, to $1.55 billion at June 30, 2021 from $1.36 billion at December 31, 2020. The increase in total assets is attributable to increases of $184.9 million in net loans receivable, including $156.2 million increases in PPP loans, $31.0 million in available-for-sale securities, $2.0 million in premises and equipment, net, $1.7 million in accrued interest receivable and $837,000 in deferred taxes. The increase in total assets was reduced by decreases of $20.1 million in mortgage loans held for sale, at fair value, $6.0 million in cash and cash equivalents, $1.8 million in other assets, and $270,000 in FHLBNY stock.

Total liabilities increased $180.0 million, or 15.1%, to $1.38 billion at June 30, 2021 from $1.20 billion at December 31, 2020. The increase in total liabilities was mainly attributable to increases of $206.6 million in deposits and $663,000 in advance payments by borrowers for taxes and insurance, offset by decreases of $16.9 million in warehouse lines of credit, $8.0 million in advances from FHLBNY and $1.6 million in other liabilities.

Total stockholders’ equity increased $12.4 million, or 7.8%, to $171.9 million at June 30, 2021 from $159.5 million at December 31, 2020. The $12.4 million increase in stockholders’ equity was mainly attributable to $8.4 million in net income, $3.1 million in net treasury stock activity, $704,000 related to restricted stock units and stock options, $298,000 related to the Company’s Employee Stock Ownership Plan offset by $176,000 related to unrealized loss on available-for-sale securities.

As of June 30, 2021, the Company had repurchased a total of 1,670,619 shares under the repurchase programs at a weighted average price of $13.22 per share, of which 1,135,086 were reported as treasury stock. Of the 1,670,619 shares repurchased, 186,960 shares have been used for grants awarded to directors, executive officers and non-executive officers under the Company’s 2018 Long-Term Incentive Plan pursuant to restricted stock units which vested on December 4, 2020 and 2019. Of these 186,960 shares, 166 shares were retained to satisfy a recipient’s taxes and other withholding obligations and these shares remain as part of treasury stock. In addition, 348,739 shares were sold to Banc of America Strategic Investments Corporation in a privately negotiated transaction.

About PDL Community Bancorp

PDL Community Bancorp is the financial holding company for Ponce Bank and Mortgage World Bankers, Inc. Ponce Bank is a federally chartered stock savings association. Ponce Bank is designated a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank’s business primarily consists of taking deposits from the general public and to a lesser extent from 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. Ponce Bank also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises as well as mortgage-backed securities, corporate bonds and obligations, and Federal Home Loan Bank stock. Mortgage World Bankers, Inc. is a mortgage lender operating in five states and is subject to the regulation and examination of the New York State Department of Financial Services. 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 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 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. 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 Statements of Financial Condition

(Dollars in thousands, except for share data)

As of

June 30,

March 31,

December 31,

September 30,

June 30,

2021

2020

ASSETS

Cash and due from banks:

Cash

32,541

13,551

26,936

14,302

15,875

Interest-bearing deposits in banks

33,551

76,571

45,142

61,790

60,756

Total cash and cash equivalents

66,092

90,122

72,078

76,092

76,631

Available-for-sale securities, at fair value

48,536

30,929

17,498

14,512

13,800

Held-to-maturity securities, at amortized cost

1,720

1,732

1,743

—

Placement with banks

2,739

—

Mortgage loans held for sale, at fair value

15,308

13,725

35,406

13,100

1,030

Loans receivable, net

1,343,578

1,230,458

1,158,640

1,108,956

1,072,417

Accrued interest receivable

13,134

12,547

11,396

9,995

7,677

Premises and equipment, net

34,057

33,625

32,045

32,113

32,102

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

6,156

6,057

6,426

6,414

6,422

Deferred tax assets

5,493

4,569

4,656

3,586

4,328

Other assets

10,837

7,204

12,604

9,844

5,824

Total assets

1,547,650

1,433,707

1,355,231

1,277,351

1,220,231

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits

1,236,161

1,138,546

1,029,579

973,244

936,219

Accrued interest payable

Advance payments by borrowers for taxes and insurance

7,682

9,264

7,019

7,739

6,007

Advances from the FHLBNY and others

109,255

117,255

117,283

117,284

Warehouse lines of credit

13,084

11,664

29,961

9,065

—

Mortgage loan fundings payable

743

676

1,483

1,457

—

Other liabilities

8,780

3,032

10,330

10,131

5,674

Total liabilities

1,375,760

1,272,503

1,195,687

1,118,977

1,065,232

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

(15,069

)

(19,285

)

(18,114

)

(18,281

)

(17,172

)

Additional paid-in-capital

85,956

85,470

85,105

85,817

85,481

Retained earnings

105,925

99,993

97,541

95,913

91,904

Accumulated other comprehensive income

(41

)

135

168

150

Unearned compensation ─ ESOP

(5,066

)

(5,187

)

(5,308

)

(5,428

)

(5,549

)

Total stockholders' equity

171,890

161,204

159,544

158,374

154,999

Total liabilities and stockholders' equity

1,547,650

1,433,707

1,355,231

1,277,351

1,220,231

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

Three Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

2021

2020

(Dollars in thousands, except share and per share data)

Interest and dividend income:

Interest on loans receivable

15,603

14,925

14,070

13,375

12,162

Interest on deposits due from banks

Interest and dividend on securities and FHLBNY stock

239

250

233

223

228

Total interest and dividend income

15,844

15,177

14,313

13,603

12,393

Interest expense:

Interest on certificates of deposit

1,108

1,219

1,422

1,597

1,730

Interest on other deposits

382

448

500

534

Interest on borrowings

622

684

769

655

608

Total interest expense

2,112

2,285

2,639

2,752

2,872

Net interest income

13,732

12,892

11,674

10,851

9,521

Provision for loan losses

586

686

406

620

271

Net interest income after provision for loan losses

13,146

12,206

11,268

10,231

9,250

Non-interest income:

Service charges and fees

366

329

263

236

145

Brokerage commissions

430

223

455

447

Late and prepayment charges

298

244

145

Income on sale of mortgage loans

1,288

1,508

2,748

1,372

—

Loan origination

971

539

656

269

—

Gain on sale of real property

4,176

663

—

4,412

—

Other

812

387

596

371

394

Total non-interest income

8,341

3,893

4,799

7,252

574

Non-interest expense:

Compensation and benefits

4,212

5,664

6,846

5,554

4,645

Occupancy and equipment

2,838

2,634

2,686

2,584

2,277

Data processing expenses

733

594

578

596

496

Direct loan expenses

1,151

1,009

599

437

199

Insurance and surety bond premiums

143

146

166

138

128

Office supplies, telephone and postage

467

409

385

386

312

Professional fees

2,902

1,262

1,533

1,553

1,336

Marketing and promotional expenses

—

127

145

Directors fees

Regulatory dues

120

Other operating expenses

958

1,030

1,034

834

772

Total non-interest expense

13,641

12,915

13,955

12,327

10,435

Income (loss) before income taxes

7,846

3,184

2,112

5,156

(611

)

Provision (benefit) for income taxes

1,914

732

484

1,147

(40

)

Net income (loss)

5,932

2,452

1,628

4,009

(571

)

Earnings (loss) per share:

Basic

0.35

0.15

0.10

0.24

(0.03

)

Diluted

0.35

0.15

0.10

0.24

(0.03

)

Weighted average shares outstanding:

Basic

16,737,037

16,548,196

16,558,576

16,612,205

16,723,449

Diluted

16,773,606

16,548,196

16,558,576

16,612,205

16,723,449

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

Six Months Ended June 30,

2021

2020

Variance $

Variance %

(Dollars in thousands, except share and per share data)

Interest and dividend income:

Interest on loans receivable

30,528

24,944

5,584

22.39

Interest on deposits due from banks

(65

)

(94.20

Interest and dividend on securities and FHLBNY stock

489

410

19.27

Total interest and dividend income

31,021

25,423

5,598

22.02

Interest expense:

Interest on certificates of deposit

2,327

3,557

(1,230

)

(34.58

Interest on other deposits

764

1,226

(462

)

(37.68

Interest on borrowings

1,306

1,195

111

9.29

Total interest expense

4,397

5,978

(1,581

)

(26.45

Net interest income

26,624

19,445

7,179

36.92

Provision for loan losses

1,272

1,417

(145

)

(10.23

Net interest income after provision for loan losses

25,352

18,028

7,324

40.63

Non-interest income:

Service charges and fees

695

393

302

76.84

Brokerage commissions

653

581

Late and prepayment charges

542

132

410

310.61

Income on sale of mortgage loans

2,796

—

2,796

—

Loan origination

1,510

—

1,510

—

Gain on sale of real property

4,839

—

4,839

—

Other

1,199

599

600

100.17

Total non-interest income

12,234

1,196

11,038

Non-interest expense:

Compensation and benefits

9,876

9,653

223

2.31

Occupancy and equipment

5,472

4,294

1,178

27.43

Data processing expenses

1,327

963

364

37.80

Direct loan expenses

2,160

411

1,749

425.55

Insurance and surety bond premiums

289

249

16.06

Office supplies, telephone and postage

876

628

248

39.49

Professional fees

4,164

2,963

1,201

40.53

Marketing and promotional expenses

379

(293

)

(77.31

Directors fees

138

—

Regulatory dues

180

102

76.47

Other operating expenses

1,988

1,477

511

34.60

Total non-interest expense

26,556

21,257

5,299

24.93

Income (loss) before income taxes

11,030

(2,033

)

13,063

Provision (benefit) for income taxes

2,646

(249

)

2,895

Net income (loss)

8,384

(1,784

)

10,168

Earnings (loss) per share:

Basic

0.50

(0.11

)

N/A

Diluted

0.50

(0.11

)

N/A

Weighted average shares outstanding:

Basic

16,643,138

16,761,993

N/A

Diluted

16,661,423

16,761,993

N/A

*Exceeds 500%

PDL Community Bancorp and Subsidiaries

Key Metrics

At or for the Three Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

2021

2020

Performance Ratios:

Return on average assets (1)

1.59

0.72

0.50

1.28

(0.20

Return on average equity (1)

13.95

6.16

4.03

9.95

(1.47

Net interest rate spread (1) (2)

3.60

3.76

3.50

3.33

3.13

Net interest margin (1) (3)

3.84

4.00

3.78

3.65

3.45

Non-interest expense to average assets (1)

3.65

3.82

4.29

3.95

3.57

Efficiency ratio (4)

61.80

76.94

84.71

68.09

103.37

Average interest-earning assets to average interest- bearing liabilities

140.13

133.25

132.04

134.35

130.72

Average equity to average assets

11.37

11.77

12.44

12.90

13.30

Capital Ratios:

Total capital to risk weighted assets (bank only)

16.08

15.80

15.95

16.93

17.52

Tier 1 capital to risk weighted assets (bank only)

14.83

14.54

14.70

15.68

16.26

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

14.83

14.54

14.70

15.68

16.26

Tier 1 capital to average assets (bank only)

10.22

10.78

11.19

11.46

11.63

Asset Quality Ratios:

Allowance for loan losses as a percentage of total loans

1.16

1.24

1.27

1.28

1.27

Allowance for loan losses as a percentage of nonperforming loans

175.63

126.07

127.28

131.00

118.89

Net (charge-offs) recoveries to average outstanding loans (1)

(0.07

(0.02

0.03

0.00

0.01

Non-performing loans as a percentage of total gross loans

0.66

0.99

1.00

0.98

1.08

Non-performing loans as a percentage of total assets

0.58

0.86

0.95

Total non-performing assets as a percentage of total assets

0.58

0.86

0.95

Total non-performing assets, accruing loans past due 90

days or more, and accruing troubled debt restructured loans

as a percentage of total assets

1.01

1.32

1.35

1.36

1.51

Other:

Number of offices (5)

Number of full-time equivalent employees (6)

231

236

227

230

179

(1)

Annualized where appropriate.

(2)

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.

(3)

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

(4)

Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

(5)

Number of offices included 5 offices for the three months ended June 30, 2021, and included 6 offices for the three months ended March 31, 2021, December 31, 2020 and September 30, 2020 due to the acquisition of Mortgage World.

(6)

Subsequent to July 10, 2020, number of full-time equivalent employees includes full-time equivalent employees related to Mortgage World.

PDL Community Bancorp and Subsidiaries

Loan Portfolio

As of

June 30,

March 31,

December 31,

September 30,

June 30,

2021

2020

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

(Dollars in thousands)

Mortgage loans:

1-4 family residential

Investor Owned

325,409

23.82

317,895

25.51

319,596

27.27

320,438

28.55

317,055

29.25

Owner-Occupied

98,839

7.24

99,985

8.02

98,795

8.43

93,340

8.31

91,345

8.43

Multifamily residential

318,579

23.33

315,078

25.28

307,411

26.23

284,775

25.37

274,641

25.34

Nonresidential properties

211,181

15.46

215,340

17.28

218,929

18.68

217,771

19.40

209,068

19.29

Construction and land

125,265

9.17

119,339

9.57

105,858

9.03

99,721

8.88

96,841

8.93

Total mortgage loans

1,079,273

79.02

1,067,637

85.66

1,050,589

89.64

1,016,045

90.52

988,950

91.24

Non-mortgage loans:

Business loans (1)

253,935

18.59

142,135

11.40

94,947

8.10

96,700

8.61

93,394

8.62

Consumer loans (2)

32,576

2.39

36,706

2.94

26,517

2.26

9,806

0.87

1,578

0.14

Total non-mortgage

loans

286,511

20.98

178,841

14.34

121,464

10.36

106,506

9.48

94,972

8.76

Total loans, gross

1,365,784

100.00

1,246,478

100.00

1,172,053

100.00

1,122,551

100.00

1,083,922

100.00

Net deferred loan

origination costs

(6,331

)

(512

)

1,457

786

2,256

Allowance for losses

on loans

(15,875

)

(15,508

)

(14,870

)

(14,381

)

(13,761

)

Loans, net

1,343,578

1,230,458

1,158,640

1,108,956

1,072,417

(1)

As of June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, business loans include $241.5 million, $132.5 million, $85.3 million, $86.2 million and $83.6 million, respectively, of PPP loans.

(2)

As of June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, consumer loans include $32.0 million, $35.9 million, $25.5 million and $8.7 million, respectively, of loans originated by the Bank pursuant to its arrangement with Grain Technologies, LLC.

PDL Community Bancorp and Subsidiaries

Deposits

As of

June 30,

March 31,

December 31,

September 30,

June 30,

2021

2020

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

(Dollars in thousands)

Demand (1)

320,404

25.91

242,255

21.28

189,855

18.44

186,328

19.15

192,429

20.55

Interest-bearing deposits:

NOW/IOLA accounts

28,996

2.35

32,235

2.83

39,296

3.82

29,618

3.04

26,477

2.83

Money market accounts

172,925

13.99

157,271

13.81

136,258

13.23

148,877

15.30

125,631

13.42

Reciprocal deposits

151,443

12.25

137,402

12.07

131,363

12.76

108,367

11.13

96,915

10.35

Savings accounts

130,430

10.55

130,211

11.44

125,820

12.22

120,883

12.42

119,277

12.74

Total NOW, money

market, reciprocal and

savings accounts

483,794

39.14

457,119

40.15

432,737

42.03

407,745

41.89

368,300

39.34

Certificates of deposit of

$250K or more

74,941

6.06

77,418

6.80

78,435

7.62

80,403

8.26

81,786

8.74

Brokered certificates of

deposit (2)

83,506

6.76

86,004

7.55

52,678

5.12

55,878

5.74

55,878

5.97

Listing service deposits (2)

66,518

5.38

61,133

5.37

39,476

3.83

49,342

5.07

54,370

5.81

All other certificates of

deposit less than $250K

206,998

16.75

214,617

18.85

236,398

22.96

193,548

19.89

183,456

19.59

Total certificates of

deposit

431,963

34.95

439,172

38.57

406,987

39.53

379,171

38.96

375,490

40.11

Total interest-bearing deposits

915,757

74.09

896,291

78.72

839,724

81.56

786,916

80.85

743,790

79.45

Total deposits

1,236,161

100.00

1,138,546

100.00

1,029,579

100.00

973,244

100.00

936,219

100.00

(1)

As of June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, included in demand deposits are deposits related to net PPP funding.

(2)

As of June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020 there were $28.9 million, $28.8 million, $27.0 million, $26.9 million and $26.8 million in individual listing service deposits amounting to $250,000 or more. All brokered certificates of deposit individually amounted to less than $250,000.

PDL Community Bancorp and Subsidiaries

Nonperforming Assets

Three Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

2021

2020

(Dollars in thousands)

Non-accrual loans:

Mortgage loans:

1-4 family residential

Investor owned

1,983

2,907

2,808

2,750

2,767

Owner occupied

1,593

1,585

1,053

1,075

1,327

Multifamily residential

955

946

210

—

Nonresidential properties

1,408

3,761

3,776

3,830

4,355

Construction and land

—

Non-mortgage loans:

Business

—

Consumer

—

Total non-accrual loans (not including non-accruing

troubled debt restructured loans)

5,939

9,199

8,583

7,865

8,449

Non-accruing troubled debt restructured loans:

Mortgage loans:

1-4 family residential

Investor owned

242

246

249

267

272

Owner occupied

2,199

2,195

2,197

2,191

2,198

Multifamily residential

—

Nonresidential properties

659

661

654

655

656

Construction and land

—

Non-mortgage loans:

Business

—

Consumer

—

Total non-accruing troubled debt restructured loans

3,100

3,102

3,100

3,113

3,126

Total non-accrual loans

9,039

12,301

11,683

10,978

11,575

Total non-performing assets

9,039

12,301

11,683

10,978

11,575

Accruing troubled debt restructured loans:

Mortgage loans:

1-4 family residential

Investor owned

3,347

3,362

3,378

3,396

3,730

Owner occupied

2,431

2,466

2,505

2,177

2,348

Multifamily residential

—

Nonresidential properties

755

750

754

759

762

Construction and land

—

Non-mortgage loans:

Business

—

Consumer

—

Total accruing troubled debt restructured loans

6,533

6,578

6,637

6,332

6,840

Total non-performing assets and accruing troubled debt

restructured loans

15,572

18,879

18,320

17,310

18,415

Total non-performing loans to total gross loans

0.66

0.99

1.00

0.98

1.08

Total non-performing assets to total assets

0.58

0.86

0.95

Total non-performing assets and accruing troubled debt

restructured loans to total assets

1.01

1.32

1.35

1.36

1.51

PDL Community Bancorp and Subsidiaries

Average Balance Sheets

For the Three Months Ended June 30,

2021

2020

Average

Outstanding

Average

Outstanding

Average

Balance

Interest

Yield/Rate (1)

Balance

Interest

Yield/Rate (1)

(Dollars in thousands)

Interest-earning assets:

Loans (2)

1,332,808

15,603

4.70

1,024,019

12,162

4.78

Securities (3)

41,218

170

1.65

16,750

146

3.50

Other (4)

60,439

0.47

68,900

0.50

Total interest-earning assets

1,434,465

15,844

4.43

1,109,669

12,393

4.49

Non-interest-earning assets

66,240

65,829

Total assets

1,500,705

1,175,498

Interest-bearing liabilities:

NOW/IOLA

30,370

0.42

29,692

0.51

Money market

300,326

311

0.42

196,707

458

0.94

Savings

131,397

0.12

117,166

0.13

Certificates of deposit

431,324

1,108

1.03

375,708

1,730

1.85

Total deposits

893,417

1,489

0.67

719,273

2,263

1.27

Advance payments by borrowers

11,086

0.04

8,947

0.04

Borrowings

119,162

622

2.09

120,647

608

2.03

Total interest-bearing liabilities

1,023,665

2,112

0.83

848,867

2,872

1.36

Non-interest-bearing liabilities:

Non-interest-bearing demand

293,626

—

165,161

—

Other non-interest-bearing liabilities

12,848

—

5,165

—

Total non-interest-bearing liabilities

306,474

—

170,326

—

Total liabilities

1,330,139

2,112

1,019,193

2,872

Total equity

170,566

156,305

Total liabilities and total equity

1,500,705

0.83

1,175,498

1.36

Net interest income

13,732

9,521

Net interest rate spread (5)

3.60

3.13

Net interest-earning assets (6)

410,800

260,802

Net interest margin (7)

3.84

3.45

Average interest-earning assets to interest-bearing liabilities

140.13

130.72

(1)

Annualized where appropriate.

(2)

Loans include loans and mortgage loans held for sale, at fair value.

(3)

Securities include available-for-sale securities and held-to-maturity securities.

(4)

Includes FHLBNY demand account and FHLBNY stock dividends.

(5)

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.

(6)

Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(7)

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,

2021

2020

Average

Outstanding

Average

Outstanding

Average

Balance

Interest

Yield/Rate(1)

Balance

Interest

Yield/Rate (1)

(Dollars in thousands)

Interest-earning assets:

Loans (2)

1,286,226

30,528

4.79

999,758

24,944

5.02

Securities (3)

31,919

346

2.19

17,484

229

2.63

Other (4)

53,548

147

0.55

53,560

250

0.93

Total interest-earning assets

1,371,693

31,021

4.56

1,070,802

25,423

4.77

Non-interest-earning assets

65,102

51,647

Total assets

1,436,795

1,122,449

Interest-bearing liabilities:

NOW/IOLA

31,720

0.45

29,359

0.53

Money market

288,779

615

0.43

178,589

1,075

1.21

Savings

129,191

0.12

115,438

0.13

Certificates of deposit

418,722

2,327

1.12

377,431

3,557

1.90

Total deposits

868,412

3,089

0.72

700,817

4,781

1.37

Advance payments by borrowers

9,999

0.04

8,464

0.05

Borrowings

124,429

1,306

2.12

114,643

1,195

2.10

Total interest-bearing liabilities

1,002,840

4,397

0.88

823,924

5,978

1.46

Non-interest-bearing liabilities:

Non-interest-bearing demand

254,588

—

136,903

—

Other non-interest-bearing liabilities

13,297

—

4,065

—

Total non-interest-bearing liabilities

267,885

—

140,968

—

Total liabilities

1,270,725

4,397

964,892

5,978

Total equity

166,070

157,557

Total liabilities and total equity

1,436,795

0.88

1,122,449

1.46

Net interest income

26,624

19,445

Net interest rate spread (5)

3.68

3.31

Net interest-earning assets (6)

368,853

246,878

Net interest margin (7)

3.91

3.65

Average interest-earning assets to

interest-bearing liabilities

136.78

129.96

(1)

Annualized where appropriate.

(2)

Loans include loans and mortgage loans held for sale, at fair value.

(3)

Securities include available-for-sale securities and held-to-maturity securities.

(4)

Includes FHLBNY demand account and FHLBNY stock dividends.

(5)

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.

(6)

Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(7)

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

PDL Community Bancorp and Subsidiaries

Other Data

As of

June 30,

March 31,

December 31,

September 30,

June 30,

2021

2020

(Dollars in thousands, except share and per share data)

Other Data

Common shares issued

18,463,028

Less treasury shares

1,135,086

1,444,776

1,337,059

1,346,679

1,228,737

Common shares outstanding at end of period

17,327,942

17,018,252

17,125,969

17,116,349

17,234,291

Book value per share

9.92

9.47

9.32

9.25

8.99

Tangible book value per share

9.92

9.47

9.32

9.25

8.99

Contact:

Frank Perez

frank.perez@poncebank.net

718-931-9000

Source: PDL Community Bancorp

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