Ponce Financial Group, Inc. Reports First Quarter 2025 Results

Ponce Bank Apr 25, 2025 12:00:00 AM

YORK, April 25, 2025 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), today announced results for the first quarter of 2025.

First Quarter 2025 Highlights (Compared to Prior Periods):

Net income available to common stockholders was $5.7 million, or $0.25 per diluted share for the three months ended March 31, 2025, as compared to net income available to common stockholders of $2.7 million, or $0.12 per diluted share for the three months ended December 31, 2024 and net income available to common stockholders of $2.4 million, or $0.11 per diluted share for the three months ended March 31, 2024. Total net income for the three months ended March 31, 2025 was $6.0 million. The Company paid dividends of $0.3 million on its preferred stock during the three months ended March 31, 2025.

Included in the $5.7 million of net income available to common stockholders for the first quarter of 2025 results is $44.0 million in interest and dividend income, $2.4 million in non-interest income and $0.3 million in benefit for credit losses, offset by $21.8 million in interest expense, $16.9 million in non-interest expense, $2.0 million in provision for income taxes and $0.3 million in dividends on preferred shares.

Net interest income of $22.2 million for the first quarter of 2025 increased $1.5 million, or 7.11%, from the prior quarter and increased $3.4 million, or 17.96%, from the same quarter last year.

Net interest margin was 2.98% for the first quarter of 2025, versus 2.80% for the prior quarter and 2.71% for the same quarter last year.

Non-interest income for the three months ended March 31, 2025 was $2.4 million, an increase of $0.3 million, or 13.54%, from $2.1 million for the three months ended December 31, 2024, and an increase of $0.7 million, or 39.48%, from $1.7 million for the three months ended March 31, 2024.

Non-interest expense for the three months ended March 31, 2025 was $16.9 million, a decrease of $0.6 million, or 3.30%, from $17.5 million for the three months ended December 31, 2024, and an increase of $0.1 million, or 0.61%, compared to $16.8 million for the three months ended March 31, 2024.

Cash and equivalents were $129.9 million as of March 31, 2025, a decrease of $9.9 million, or 7.11%, from $139.8 million as of December 31, 2024.

Securities totaled $461.6 million as of March 31, 2025, a decrease of $11.3 million, or 2.39%, from $472.9 million as of December 31, 2024 primarily due to regular principal payments and the call of one available-for-sale security in the amount of $1.0 million.

Net loans receivable were $2.37 billion as of March 31, 2025, an increase of $84.3 million, or 3.69%, from $2.29 billion as of December 31, 2024.

Deposits were $2.00 billion as of March 31, 2025, an increase of $120.1 million, or 6.37%, from $1.88 billion as of December 31, 2024.

President and Chief Executive Officer’s Comments

Carlos P. Naudon, Ponce Financial Group, Inc.’s President and CEO, stated “We continued executing well our strategy of focusing on net interest margin, operating expenses and fee income, which translated into several positive trends this quarter. Our net interest margin this quarter increased by 18 basis points, reflecting both our high-yielding construction loans and our decreasing borrowing costs. In fact, our loan yields rose by 9 basis points while our cost of funds decreased by 10 basis points. Our operating expenses have decreased quarter over quarter, and our non-interest income compares favorably to prior periods. All-in-all, a very good quarter in these turbulent and uncertain times."

Executive Chairman’s Comment

Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman added “Most of our high-yielding construction lending has an additional benefit – it qualifies as Deep Impact lending under the U.S. Treasury’s Emergency Capital Investment Program and serves to lower the dividends payable on our preferred stock to the U.S. Treasury. Importantly, our construction initiatives also reflect our conservative underwriting, high developer equity requirements and short duration. Of our 64 on-going projects, more than 43 percent already have at least a temporary certificate of occupancy and 80 percent are at least halfway through construction.”

The table below indicate the Key Metrics at or for the three months ended:

At or for the Three Months Ended

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

Performance Ratios:

Return on average assets(1)

0.77

0.38

0.33

0.45

0.33

Return on common equity(1)

7.97

3.76

3.06

4.60

3.61

Net interest margin(1) (2)

2.98

2.80

2.65

2.62

2.71

Non-interest expense to average assets(1)

2.19

2.25

2.19

2.28

2.35

Efficiency ratio(3)

68.70

75.63

80.87

80.09

82.56

Capital Ratios:

Total capital to risk-weighted assets (Ponce Financial Group)

22.84

22.98

22.87

23.86

24.47

Common equity Tier 1 capital to risk-weighted assets (Ponce Financial Group)

12.51

12.44

12.28

12.71

12.98

Tier 1 capital to total assets (Ponce Financial Group)

16.84

17.70

17.81

17.88

17.59

Total capital to risk-weighted assets (Bank only)

21.38

21.47

21.61

22.47

22.79

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

20.35

20.40

20.45

21.24

21.54

Tier 1 capital to total assets (Bank only)

15.61

15.81

16.19

16.70

16.26

Asset Quality Ratios:

Allowance for credit losses on loans as a percentage of total loans

0.96

0.97

1.09

1.18

1.23

Allowance for credit losses on loans as a percentage of nonperforming loans

84.15

82.29

139.52

130.28

140.90

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

(0.04

(0.45

(0.17

(0.10

(0.25

Non-performing loans as a percentage of total assets

0.88

0.90

0.57

0.65

0.62

Other:

Number of offices

Number of full-time equivalent employees

211

218

228

227

233

(1) Annualized where appropriate.

(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.

Summary of Results of Operations

Net income for the three months ended March 31, 2025 was $6.0 million compared to net income of $2.9 million for the three months ended December 31, 2024 and net income of $2.4 million for the three months ended March 31, 2024.

The $3.0 million increase of net income for the three months ended March 31, 2025 compared to the three months ended December 31, 2024 was attributed mainly to increases of $1.5 million in net interest income, an increase of $1.2 million in benefit for credit losses, a decrease of $0.6 million in non-interest expense and an increase of $0.3 million in non-interest income; partially offset by an increase of $0.5 million in provision for income taxes.

The $3.5 million increase of net income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was largely due to increases of $3.4 million in net interest income, $0.7 million in non-interest income and $0.3 million in benefit for credit losses, partially offset by increases of $0.7 million in provision for income taxes and $0.1 million in non-interest expense

Net Interest Income and Net Margin

Net interest income for the three months ended March 31, 2025, increased $1.5 million, or 7.11%, to $22.2 million compared to $20.7 million for the three months ended December 31, 2024 and increased $3.4 million, or 17.96%, compared to $18.8 million for the three months ended March 31, 2024.

The $1.5 million increase in net interest income from the three months ended December 31, 2024 was attributable to an increase of $1.1 million in total interest and dividend income and a decrease of $0.4 million in total interest expense.

The $3.4 million increase in net interest income from the three months ended March 31, 2024 was attributable to an increase of $4.3 million in total interest and dividend income, offset by an increase of $0.9 million in total interest expense.

For the three months ended March 31, 2025, benefit for credit losses amounted to $0.3 million, compared to $0.9 million in provision for credit losses for the prior quarter and a credit loss benefit on loans of less than $0.1 million during the first quarter of 2024.

Net interest margin was 2.98% for the three months ended March 31, 2025 compared to 2.80% for the prior quarter, an increase of 18bps and 2.71% for the same period last year, an increase of 27bps.

Non-interest Income

Non-interest income for the three months ended March 31, 2025, was $2.4 million, an increase of $0.3 million, or 13.54%, compared to $2.1 million for the three months ended December 31, 2024 and an increase of $0.7 million, or 39.48%, compared to $1.7 million for the three months ended March 31, 2024.

The $0.3 million increase in non-interest income from the three months ended December 31, 2024 was largely attributable to increases of $0.4 million in late and prepayment charges and $0.3 million in income on sale of SBA loans, partially offset by decreases of $0.2 million in other non-interest income and $0.1 million in income on sale of mortgage loans.

The $0.7 million increase in non-interest income from the three months ended March 31, 2024 was largely attributable to increases of $0.4 million in income on sale of SBA loans and $0.3 million in late and prepayment charges, partially offset by a decrease of $0.2 million in income on the sale of mortgage loans.

Non-interest Expense

Non-interest expense for the three months ended March 31, 2025, was $16.9 million, a decrease of $0.6 million, or 3.30%, compared to $17.5 million for the three months ended December 31, 2024 and an increase of $0.1 million, or 0.61%, compared to $16.8 million for the three months ended March 31, 2024.

The $0.6 million decrease in non-interest expense from the three months ended December 31, 2024 was mainly attributable to decreases of $0.3 million in professional fees, $0.2 million in marketing and promotional expenses, $0.2 million in direct loan expenses, $0.1 million in office supplies, telephone and postage, partially offset by an increase of $0.1 million in compensation and benefits.

The $0.1 million increase in non-interest expense from the three months ended March 31, 2024 was mainly attributable to increases of $0.5 million in other operating expense and $0.2 million in occupancy and equipment, partially offset by decreases of $0.4 million in professional fees and $0.3 million in direct loan expenses.

Credit Quality:

Non-performing loans were $32.0 million at March 31, 2025 compared to $32.1 million at December 31, 2024 and $22.4 million at March 31, 2024.

During the three months ended March 31, 2025, a credit loss benefit of $0.3 million on loans was recorded, consisting of $0.7 million charged on the funded portion and a benefit of $1.0 million on the unfunded portion on loans. During the three months ended December 31, 2024, a credit loss provision of $0.9 million on loans were recorded, consisting of $1.1 million charged on the funded portion and a benefit of $0.2 million on unfunded portion on loans. During the three months ended March 31, 2024, a credit loss benefit of $0.1 million on loans were recorded, consisting of $0.3 million benefit on the funded portion and a $0.2 million charged on the on unfunded portion on loans.

Balance Sheet Summary

Total assets increased $49.9 million, or 1.64%, to $3.09 billion as of March 31, 2025 from $3.04 billion as of December 31, 2024. The increase in total assets is largely attributable to increases of $84.3 million in net loans receivable, $1.2 million in accrued interest receivable and $0.4 million in right of use assets, partially offset by decreases of $9.9 million in cash and cash equivalents, $9.9 million in held-to-maturity securities, $8.4 million in other assets, $3.4 million in Federal Home Loan Bank of New York stock, $2.2 million in mortgage loans held for sale and $1.4 million in available-for-sale securities.

Total liabilities increased $41.5 million, or 1.64%, to $2.58 billion as of March 31, 2025 from $2.53 billion as of December 31, 2024. The increase in total liabilities was largely attributable to an increase of $120.1 million in deposits, $2.6 million in advance payments by borrowers for taxes, $0.9 million in accrued interest payable, $0.4 million in operating lease liabilities, partially offset by decreases of $75.0 million in borrowings and $7.5 million in other liabilities.

Total stockholders’ equity increased $8.4 million, or 1.66%, to $513.9 million as of March 31, 2025, from $505.5 million as of December 31, 2024. The $8.4 million increase in stockholders’ equity was largely attributable to $6.0 million in net income, $1.8 million in other comprehensive income, $0.5 million impact to additional paid in capital as a result of share-based compensation and $0.4 million from release of ESOP shares, offset by $0.3 million in dividends on preferred shares.

About Ponce Financial Group, Inc.

Ponce Financial Group, Inc. is the holding company for Ponce Bank. Ponce Bank is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank’s business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those funds, together with funds generated from operations and borrowings, in mortgage loans, consisting of 1-4 family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties, construction and land, and, to a lesser extent, in business and consumer loans. Ponce Bank also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises, as well as, mortgage-backed securities, corporate bonds and obligations, and Federal Home Loan Bank stock.

Forward Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which Ponce Bank operates, including changes that adversely affect borrowers’ ability to service and repay Ponce Bank’s loans; changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, and their related impacts on the economy; changes in the value of securities in the investment portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; changes in government regulation; changes in accounting standards and practices; the risk that intangibles recorded in the financial statements will become impaired; demand for loans in Ponce Bank’s market area; Ponce Bank’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that Ponce Financial Group, Inc. may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in Ponce Financial Group, Inc.’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Ponce Financial Group, Inc. disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as may be required by applicable law or regulation.

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except for share data)

As of

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

ASSETS

Cash and due from banks:

Cash

32,113

35,478

32,061

23,128

29,972

Interest-bearing deposits

97,780

104,361

123,751

80,038

104,752

Total cash and cash equivalents

129,893

139,839

155,812

103,166

134,724

Available-for-sale securities, at fair value

103,570

104,970

111,005

113,125

116,044

Held-to-maturity securities, at amortized cost

358,024

367,938

403,736

442,113

452,955

Placement with banks

249

Mortgage loans held for sale, at fair value

8,567

10,736

9,566

37,764

7,860

Loans receivable, net

2,370,931

2,286,599

2,180,331

2,022,173

1,981,428

Accrued interest receivable

19,008

17,771

16,890

17,441

18,063

Premises and equipment, net

16,417

16,794

16,843

16,976

17,396

Right of use assets

29,496

29,093

29,785

30,349

31,021

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

25,807

29,182

28,515

23,972

23,892

Deferred tax assets

11,629

12,074

11,845

13,172

13,919

Other assets

16,245

24,693

51,392

21,507

21,151

Total assets

3,089,836

3,039,938

3,015,969

2,842,007

2,818,702

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits

2,004,947

1,884,864

1,870,323

1,606,097

1,585,784

Operating lease liabilities

31,126

30,696

31,343

31,861

32,486

Accrued interest payable

4,628

3,712

2,918

6,820

4,218

Advance payments by borrowers for taxes and insurance

12,901

10,349

13,733

10,838

13,245

Borrowings

521,100

596,100

580,421

680,421

Other liabilities

1,248

8,717

12,642

8,313

8,866

Total liabilities

2,575,950

2,534,438

2,511,380

2,344,350

2,325,020

Commitments and contingencies

Stockholders' Equity:

Preferred stock, $0.01 par value; 100,000,000 shares authorized

225,000

Common stock, $0.01 par value; 200,000,000 shares authorized

249

Treasury stock, at cost

(7,641

)

(7,707

)

(9,445

)

(9,519

)

(9,702

)

Additional paid-in-capital

207,888

207,319

208,478

207,934

207,584

Retained earnings

113,432

107,754

105,103

102,951

99,834

Accumulated other comprehensive loss

(13,515

)

(15,297

)

(12,686

)

(16,557

)

(16,590

)

Unearned compensation ─ ESOP

(11,527

)

(11,818

)

(12,110

)

(12,401

)

(12,693

)

Total stockholders' equity

513,886

505,500

504,589

497,657

493,682

Total liabilities and stockholders' equity

3,089,836

3,039,938

3,015,969

2,842,007

2,818,702

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

Three Months Ended

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

Interest and dividend income:

Interest on loans receivable

37,136

35,622

32,945

31,281

30,664

Interest on deposits due from banks

1,668

1,783

2,430

1,542

2,911

Interest and dividend on securities and FHLBNY stock

5,193

5,481

5,918

5,969

6,091

Total interest and dividend income

43,997

42,886

41,293

38,792

39,666

Interest expense:

Interest on certificates of deposit

7,754

8,104

6,926

6,358

6,380

Interest on other deposits

8,554

8,476

8,519

7,389

6,540

Interest on borrowings

5,486

5,576

6,825

7,141

7,923

Total interest expense

21,794

22,156

22,270

20,888

20,843

Net interest income

22,203

20,730

19,023

17,904

18,823

(Benefit) provision for credit losses(1)

(285

)

897

537

(867

)

(16

)

Net interest income after (benefit) provision for credit losses

22,488

19,833

18,486

18,771

18,839

Non-interest income:

Service charges and fees

525

500

508

492

473

Brokerage commissions

—

Late and prepayment charges

697

318

426

359

Income on sale of mortgage loans

148

254

218

274

302

Income on sale of SBA loans

404

148

—

Other

603

833

348

1,057

565

Total non-interest income

2,381

2,097

1,151

2,258

1,707

Non-interest expense:

Compensation and benefits

7,780

7,668

7,674

7,724

7,844

Occupancy and equipment

3,913

3,863

3,786

3,564

3,667

Data processing expenses

1,152

1,143

1,099

1,013

1,127

Direct loan expenses

388

617

573

633

732

Insurance and surety bond premiums

315

293

292

263

253

Office supplies, telephone and postage

170

294

222

233

249

Professional fees

1,364

1,703

1,351

1,369

1,723

Microloans recoveries

—

(29

)

(54

)

(65

)

(53

)

Marketing and promotional expenses

289

180

145

100

Federal deposit insurance and regulatory assessment(2)

461

418

392

428

389

Other operating expenses(2)

1,262

1,206

1,051

1,333

755

Total non-interest expense(1)

16,888

17,465

16,566

16,640

16,786

Income before income taxes

7,981

4,465

3,071

4,389

3,760

Provision for income taxes

2,022

1,532

638

1,197

1,346

Net income

5,959

2,933

2,433

3,192

2,414

Dividends on preferred shares

281

282

281

—

Net income available to common stockholders

5,678

2,651

2,152

3,117

2,414

Earnings per common share:

Basic

0.25

0.12

0.10

0.14

0.11

Diluted

0.25

0.12

0.10

0.14

0.11

Weighted average common shares outstanding:

Basic

22,662,916

22,528,160

22,446,009

22,409,803

22,353,492

Diluted

22,876,740

22,807,644

22,612,028

22,419,309

22,366,728

(1) For the three months ended December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, (benefit) provision for contingencies in the amounts of ($0.2 million), ($0.3 million), ($0.5 million) and $0.2 million were reclassified from total non-interest expense to (benefit) provision for credit losses.

(2) For the three months ended September 30, 2024, June 30, 2024, and March 31, 2024, $0.3 million of federal deposit insurance was reclassified from other operating expenses to federal deposit insurance and regulatory assessments and $0.1 million of directors' fees were reclassified from federal deposit insurance and regulatory assessments to other operating expenses for each periods.

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

For the Three Months Ended March 31,

2025

2024

Variance $

Variance %

Interest and dividend income:

Interest on loans receivable

37,136

30,664

6,472

21.11

Interest on deposits due from banks

1,668

2,911

(1,243

)

(42.70

Interest and dividend on securities and FHLBNY stock

5,193

6,091

(898

)

(14.74

Total interest and dividend income

43,997

39,666

4,331

10.92

Interest expense:

Interest on certificates of deposit

7,754

6,380

1,374

21.54

Interest on other deposits

8,554

6,540

2,014

30.80

Interest on borrowings

5,486

7,923

(2,437

)

(30.76

Total interest expense

21,794

20,843

951

4.56

Net interest income

22,203

18,823

3,380

17.96

Benefit for credit losses (1)

(285

)

(16

)

(269

)

1,681.25

Net interest income after benefit for credit losses

22,488

18,839

3,649

19.37

Non-interest income:

Service charges and fees

525

473

10.99

Brokerage commissions

)

(50.00

Late and prepayment charges

697

359

338

94.15

Income on sale of mortgage loans

148

302

(154

)

(50.99

Income on sale of SBA loans

404

—

404

—

Other

603

565

6.73

Total non-interest income

2,381

1,707

674

39.48

Non-interest expense:

Compensation and benefits

7,780

7,844

(64

)

(0.82

Occupancy and equipment

3,913

3,667

246

6.71

Data processing expenses

1,152

1,127

2.22

Direct loan expenses

388

732

(344

)

(46.99

Insurance and surety bond premiums

315

253

24.51

Office supplies, telephone and postage

170

249

(79

)

(31.73

Professional fees

1,364

1,723

(359

)

(20.84

Microloans recoveries

—

(53

)

(100.00

Marketing and promotional expenses

100

(17

)

(17.00

Federal deposit insurance and regulatory assessments (2)

461

389

18.51

Other operating expenses (2)

1,262

755

507

67.15

Total non-interest expense (1)

16,888

16,786

102

0.61

Income before income taxes

7,981

3,760

4,221

112.26

Provision for income taxes

2,022

1,346

676

50.22

Net income

5,959

2,414

3,545

146.85

Dividends on preferred shares

281

—

281

—

Net income available to common stockholders

5,678

2,414

3,264

135.21

Earnings per common share:

Basic

0.25

0.11

0.14

127.27

Diluted

0.25

0.11

0.14

127.27

Weighted average common shares outstanding:

Basic

22,662,916

22,353,492

309,424

1.38

Diluted

22,876,740

22,366,728

510,012

2.28

(1) For the three months ended March 31, 2024, provision for contingencies in the amount of $0.2 million were reclassified from total non-interest expense to benefit for credit losses.

(2) For the three months ended March 31, 2024, $0.3 million of federal deposit insurance was reclassified from other operating expenses to federal deposit insurance and regulatory assessments and $0.1 million of directors' fees were reclassified from federal deposit insurance and regulatory assessments to other operating expenses.

Ponce Financial Group, Inc. and Subsidiaries

Loans Receivable excluding Mortgage Loans Held for Sale

As of

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

(Dollars in thousands)

Mortgage loans:

1-4 family residential

Investor Owned

325,866

13.62

330,053

14.30

332,380

15.09

337,292

16.49

339,331

16.92

Owner-Occupied

137,676

5.75

142,363

6.17

145,065

6.59

147,485

7.21

150,842

7.52

Multifamily residential

675,541

28.24

670,159

29.04

678,029

30.78

545,323

26.66

545,825

27.22

Nonresidential properties

390,681

16.33

389,898

16.89

383,277

17.40

337,583

16.51

327,350

16.32

Construction and land

815,425

34.08

733,660

31.79

631,461

28.67

641,879

31.39

608,665

30.35

Total mortgage loans

2,345,189

98.02

2,266,133

98.19

2,170,212

98.53

2,009,562

98.26

1,972,013

98.33

Non-mortgage loans:

Business loans

46,329

1.94

40,849

1.77

28,499

1.29

30,222

1.48

26,664

1.33

Consumer loans(1)

997

0.04

1,038

0.04

4,021

0.18

5,305

0.26

6,741

0.34

Total non-mortgage loans

47,326

1.98

41,887

1.81

32,520

1.47

35,527

1.74

33,405

1.67

Total loans, gross

2,392,515

100.00

2,308,020

100.00

2,202,732

100.00

2,045,089

100.00

2,005,418

100.00

Net deferred loan origination costs

1,390

1,081

1,565

1,145

674

Allowance for credit losses on loans

(22,974

)

(22,502

)

(23,966

)

(24,061

)

(24,664

)

Loans, net

2,370,931

2,286,599

2,180,331

2,022,173

1,981,428

(1) As of September 30, 2024, June 30, 2024, and March 31, 2024, consumer loans include $3.0 million, $4.3 million, and $5.7 million, respectively, of microloans originated by the Bank. As of December 31, 2024, these microloans were charged-off.

Ponce Financial Group, Inc. and Subsidiaries

Allowance for Credit Losses on Loans

For the Three Months Ended

March 31,

December 31,

September 30,

June 30,

March 31,

2024

(Dollars in thousands)

Allowance for credit losses on loans at beginning of the period

22,502

23,966

24,061

24,664

26,154

Provision (benefit) for credit losses on loans

731

1,090

801

(120

)

(255

)

Charge-offs:

Mortgage loans:

1-4 family residences

Investor owned

(38

)

—

Owner occupied

—

Multifamily residences

—

Nonresidential properties

—

)

—

Construction and land

—

Non-mortgage loans:

Business

(222

)

(232

)

(450

)

—

(52

)

Consumer

)

(2,465

)

(634

)

(747

)

(1,302

)

Total charge-offs

(263

)

(2,697

)

(1,091

)

(747

)

(1,354

)

Recoveries:

Non-mortgage loans:

Business

—

Consumer

—

143

194

257

118

Total recoveries

143

195

264

119

Net (charge-offs) recoveries

(259

)

(2,554

)

(896

)

(483

)

(1,235

)

Allowance for credit losses on loans at end of the period

22,974

22,502

23,966

24,061

24,664

Ponce Financial Group, Inc. and Subsidiaries

Deposits

As of

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

(Dollars in thousands)

Demand

212,139

10.58

169,178

8.98

182,737

9.78

178,125

11.09

191,541

12.07

Interest-bearing deposits:

NOW/IOLA accounts

74,430

3.71

62,616

3.32

71,445

3.82

81,178

5.05

73,202

4.62

Money market accounts

692,753

34.55

636,219

33.75

660,168

35.30

502,255

31.27

482,344

30.42

Reciprocal deposits

141,838

7.07

130,677

6.93

94,145

5.03

109,945

6.85

97,718

6.16

Savings accounts

106,122

5.29

105,870

5.62

108,941

5.82

109,694

6.83

112,713

7.11

Total NOW, money market, reciprocal and savings accounts

1,015,143

50.62

935,382

49.62

934,699

49.97

803,072

50.00

765,977

48.31

Certificates of deposit of $250K or more(1)

219,721

10.96

204,293

10.84

210,262

11.25

189,683

11.82

183,478

11.57

Brokered certificates of deposit(2)

84,531

4.22

94,531

5.02

94,531

5.05

94,614

5.89

94,689

5.97

Listing service deposits(2)

6,140

0.31

7,376

0.39

7,376

0.39

9,361

0.58

12,688

0.80

All other certificates of deposit less than $250K(1)

467,273

23.31

474,104

25.15

440,718

23.56

331,242

20.62

337,411

21.28

Total certificates of deposit

777,665

38.80

780,304

41.40

752,887

40.25

624,900

38.91

628,266

39.62

Total interest-bearing deposits

1,792,808

89.42

1,715,686

91.02

1,687,586

90.22

1,427,972

88.91

1,394,243

87.93

Total deposits

2,004,947

100.00

1,884,864

100.00

1,870,323

100.00

1,606,097

100.00

1,585,784

100.00

(1) As of September 30, 2024, June 30, 2024 and March 31, 2024, $36.2 million, $33.5 million and $37.2 million, respectively, were reclassified from all other certificates of deposit less than $250K to certificates of deposit of $250K or more.

(2) There were no individual listing service deposits amounting to $250,000 or more. There was one brokered certificates of deposit in the amount of $1.5 million amounting to $250,000 or more. All other brokered certificates of deposit individually amounted to less than $250,000.

Ponce Financial Group, Inc. and Subsidiaries

Nonperforming Assets

As of Three Months Ended

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

(Dollars in thousands)

Non-accrual loans:

Mortgage loans:

1-4 family residential

Investor owned

1,052

436

399

Owner occupied

1,423

1,426

Multifamily residential

9,788

10,271

4,685

5,754

4,098

Nonresidential properties

—

824

828

441

Construction and land

14,159

14,158

8,907

10,277

Non-mortgage loans:

Business

170

343

180

396

146

Consumer

—

Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty)(1)

26,592

26,631

16,455

17,744

16,787

Non-accruing modifications to borrowers experiencing financial difficulty(1):

Mortgage loans:

1-4 family residential

Investor owned

279

278

277

270

Owner occupied

431

435

444

448

447

Multifamily residential

—

Nonresidential properties

—

Construction and land

—

Non-mortgage loans:

Business

—

Consumer

—

Total non-accruing modifications to borrowers experiencing financial difficulty(1)

710

714

722

725

717

Total non-accrual loans(2)

27,302

27,345

17,177

18,469

17,504

Accruing modifications to borrowers experiencing financial difficulty (1):

Mortgage loans:

1-4 family residential

Investor owned

1,792

1,807

1,821

1,830

1,850

Owner occupied

2,038

2,062

2,116

2,171

2,288

Multifamily residential

—

Nonresidential properties

644

652

672

707

748

Construction and land

—

Non-mortgage loans:

Business

209

215

222

—

Consumer

—

Total accruing modifications to borrowers experiencing financial difficulty(1)

4,683

4,736

4,831

4,708

4,886

Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty(1)

31,985

32,081

22,008

23,177

22,390

Total non-performing assets to total assets

0.88

0.90

0.57

0.65

0.62

(1) Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.

(2) Includes nonperforming mortgage loans held for sale.

Ponce Financial Group, Inc. and Subsidiaries

Average Balance Sheets

For the Three Months Ended March 31,

2025

2024

Average

Outstanding

Average

Outstanding

Average

Balance

Interest

Yield/Rate(1)

Balance

Interest

Yield/Rate(1)

(Dollars in thousands)

Interest-earning assets:

Loans(2)

2,369,433

37,136

6.36

1,979,263

30,664

6.23

Securities(3)

467,560

4,521

3.92

576,235

5,619

3.92

Other(4)

186,021

2,340

5.10

238,432

3,383

5.71

Total interest-earning assets

3,023,014

43,997

5.90

2,793,930

39,666

5.71

Non-interest-earning assets

109,166

106,566

Total assets

3,132,180

2,900,496

Interest-bearing liabilities:

NOW/IOLA

72,354

115

0.64

82,849

218

1.06

Money market

827,948

8,411

4.12

544,563

6,292

4.65

Savings

105,171

0.10

113,501

0.10

Certificates of deposit

794,270

7,754

3.96

629,528

6,380

4.08

Total deposits

1,799,743

16,306

3.67

1,370,441

12,918

3.79

Advance payments by borrowers

12,445

0.07

12,886

0.06

Borrowings

568,601

5,486

3.91

771,070

7,923

4.13

Total interest-bearing liabilities

2,380,789

21,794

3.71

2,154,397

20,843

3.89

Non-interest-bearing liabilities:

Non-interest-bearing demand

196,627

—

198,862

—

Other non-interest-bearing liabilities

43,915

—

54,061

—

Total non-interest-bearing liabilities

240,542

—

252,923

—

Total liabilities

2,621,331

21,794

2,407,320

20,843

Total equity

510,849

493,176

Total liabilities and total equity

3,132,180

3.71

2,900,496

3.89

Net interest income

22,203

18,823

Net interest rate spread(5)

2.19

1.82

Net interest-earning assets(6)

642,225

639,533

Net interest margin(7)

2.98

2.71

Average interest-earning assets to interest-bearing liabilities

126.98

129.69

(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, FHLBNY stock dividends and FRBNY demand deposits.

(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.

Ponce Financial Group, Inc. and Subsidiaries

Other Data

As of

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

Other Data

Common shares issued

24,886,711

Less treasury shares

920,520

925,497

1,067,248

1,074,979

1,096,214

Common shares outstanding at end of period

23,966,191

23,961,214

23,819,463

23,811,732

23,790,497

Book value per common share

12.05

11.71

11.74

11.45

11.29

Tangible book value per common share

12.05

11.71

11.74

11.45

11.29

Contact:

Sergio J. Vaccaro

sergio.vaccaro@poncebank.net

718-931-9000

Source: Ponce Financial Group, Inc.

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