Ponce Financial Group, Inc. Reports Third Quarter 2025 Results

Ponce Bank Oct 24, 2025 12:00:00 AM

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

Third Quarter 2025 Highlights (Compared to Prior Periods):

Net income available to common stockholders was $6.2 million, or $0.27 per diluted share for the three months ended September 30, 2025, as compared to net income available to common stockholders of $5.8 million, or $0.25 per diluted share for the three months ended June 30, 2025 and net income available to common stockholders of $2.2 million, or $0.10 per diluted share for the three months ended September 30, 2024. Total net income for the three months ended September 30, 2025 was $6.5 million. The Company paid dividends of $0.3 million on its preferred stock during the three months ended September 30, 2025.

Included in the $6.2 million of net income available to common stockholders for the third quarter of 2025 results is $46.8 million in interest and dividend income and $1.5 million in non-interest income, offset by $21.6 million in interest expense, $16.6 million in non-interest expense, $2.3 million in provision for income taxes, $1.5 million in provision for credit losses and $0.3 million in dividends on preferred shares.

Net interest income of $25.2 million for the third quarter of 2025 increased $0.8 million, or 3.37%, from the prior quarter and increased $6.2 million, or 32.72%, from the same quarter last year.

Net interest margin was 3.30% for the third quarter of 2025, versus 3.27% for the prior quarter and 2.65% for the same quarter last year.

Nine Months 2025 Highlights (Compared to 2024):

Net income available to common stockholders was $17.7 million, or $0.77 per diluted share for the nine months ended September 30, 2025, as compared to net income available to common stockholders of $7.7 million, or $0.34 per diluted share for the nine months ended September 30, 2024. Total net income for the nine months ended September 30, 2025 was $18.6 million. The Company paid dividends of $0.8 million on its preferred stock during the nine months ended September 30, 2025.

Net interest income for the nine months ended September 30, 2025 was $71.9 million, an increase of $16.1 million, or 28.93%, compared to $55.8 million for the nine months ended September 30, 2024.

Non-interest income for the nine months ended September 30, 2025 was $5.9 million, an increase of $0.8 million, or 15.97%, from $5.1 million for the nine months ended September 30, 2024.

Non-interest expense for the nine months ended September 30, 2025 was $50.4 million, an increase of $0.4 million, or 0.77%, compared to $50.0 million for the nine months ended September 30, 2024.

Cash and equivalents were $146.6 million as of September 30, 2025, an increase of $6.7 million, or 4.82%, from $139.8 million as of December 31, 2024.

Securities totaled $379.9 million as of September 30, 2025, a decrease of $93.0 million, or 19.66%, from $472.9 million as of December 31, 2024 primarily due to regular principal payments, the call of three available-for-sale securities in the total amount of $7.0 million and the maturity/call of three held-for-sale securities in the amount of $50.0 million.

Net loans receivable were $2.49 billion as of September 30, 2025, an increase of $203.4 million, or 8.90%, from $2.29 billion as of December 31, 2024.

Deposits were $2.06 billion as of September 30, 2025, an increase of $167.9 million, or 8.86%, from $1.90 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 “In these uncertain times, we continue to execute on our long-term strategy of increasing margin through yield improvement and controlled cost of funds and operating expenses. We are very pleased with the results. We note our incremental profitability year-on-year and the consistency of our earnings. Our diluted earnings per share of $0.77 for the nine months ended September 30, 2025, more than doubled from the same period last year, driven by incremental net interest and non-interest income, achieved while keeping non-interest expenses almost flat. Our net interest margin this quarter increased by 3 basis points compared to the prior quarter, reflecting our decreasing funding costs. We were also busy working on the future and opened a new branch in the Inwood neighborhood of Manhattan and modernized our charter, becoming both a financial holding company and a bank holding company while Ponce Bank converted to a national bank. These developments should enhance our funding sources and level our playing fields."

Executive Chairman’s Comment

Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman added “We continue to make progress towards our commitments under the U.S. Treasury’s Emergency Capital Investment Program. Our strong level of loan originations from April 2025 to September 2025 ensures that our dividend yield will continue at the 0.50% level in the next dividend period starting in 2026. Also, we’re mindful of our percentage of deep impact lending, as we need to be at 60% or above for 16 quarters cumulatively, as a condition to buy the preferred stock back. After 13 quarters, including the quarter ended September 30, 2025, we are at 81% deep impact lending.”

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

At or for the Three Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

2025

2024

Performance Ratios:

Return on average assets (1)

0.82

0.79

0.77

0.38

0.33

Return on common equity (1)

8.10

7.88

7.97

3.76

3.06

Net interest margin (1) (2)

3.30

3.27

2.98

2.80

2.65

Non-interest expense to average assets (1)

2.10

2.18

2.19

2.25

2.19

Efficiency ratio (3)

62.15

63.69

68.70

75.63

80.87

Capital Ratios:

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

24.08

22.65

22.84

22.98

22.87

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

13.39

12.49

12.51

12.44

12.28

Tier 1 capital to total assets (Ponce Financial Group)

17.33

17.13

16.84

17.70

17.81

Total capital to risk-weighted assets (Bank only)

21.79

21.22

21.38

21.47

21.61

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

20.66

20.15

20.35

20.40

20.45

Tier 1 capital to total assets (Bank only)

16.08

15.99

15.61

15.81

16.19

Asset Quality Ratios:

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

0.98

0.97

0.96

0.97

1.09

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

88.88

101.01

84.15

82.29

139.52

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

(0.03

(0.04

(0.45

(0.17

Non-performing loans as a percentage of total assets

0.88

0.76

0.88

0.90

0.57

Other:

Number of offices

Number of full-time equivalent employees

209

206

211

218

228

(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 September 30, 2025 was $6.5 million compared to net income of $6.1 million for the three months ended June 30, 2025 and net income of $2.4 million for the three months ended September 30, 2024.

The $0.4 million increase of net income for the three months ended September 30, 2025 compared to the three months ended June 30, 2025 was attributed mainly to an increase of $0.8 million in net interest income and decreases of $0.3 million in provision for credit losses and $0.3 million in non-interest expense, offset by a decrease of $0.6 million in non-interest income and an increase of $0.4 million in provision for income taxes.

The $4.1 million increase of net income for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was largely due to increases of $6.2 million in net interest income and $0.3 million in non-interest income, offset by increases of $1.6 million in provision for income taxes and $0.8 million in provision for credit losses while remain flat on non-interest expense

Net income for the nine months ended September 30, 2025 was $18.6 million compared to net income of $8.0 million for the nine months ended September 30, 2024. The $10.5 million increase of net income for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was attributed mainly to increases of $16.1 million in net interest income and $0.8 million in non-interest income, partially offset by increases of $3.1 million in provision for credit losses, $2.9 million in provision for income taxes and $0.4 million in non-interest expense.

Net Interest Income and Net Interest Margin

Net interest income for the three months ended September 30, 2025, increased $0.8 million, or 3.37%, to $25.2 million compared to $24.4 million for the three months ended June 30, 2025 and increased $6.2 million, or 32.72%, compared to $19.0 million for the three months ended September 30, 2024.

The $0.8 million increase in net interest income from the three months ended June 30, 2025 was attributable to an increase of $1.0 million in total interest and dividend income, offset by an increase of $0.2 million in total interest expense. The $6.2 million increase in net interest income from the three months ended September 30, 2024 was attributable to an increase of $5.6 million in total interest and dividend income and a decrease of $0.7 million in total interest expense.

Net interest income for the nine months ended September 30, 2025, increased $16.1 million, or 28.93%, to $71.9 million compared to $55.8 million for the nine months ended September 30, 2024. The $16.1 million increase in net interest income was attributable to an increase of $17.0 million in total interest and dividend income, offset by an increase of $0.8 million in total interest expense.

Net interest margin was 3.30% for the three months ended September 30, 2025 compared to 3.27% for the prior quarter, an increase of 3bps and 2.65% for the same period last year, an increase of 65bps.

Net interest margin was 3.18% for the nine months ended September 30, 2025 compared to 2.66% for the nine months ended September 30, 2024, an increase of 52bps.

Non-interest Income

Non-interest income for the three months ended September 30, 2025, was $1.5 million, a decrease of $0.6 million, or 27.57%, compared to $2.1 million for the three months ended June 30, 2025 and an increase of $0.3 million, or 29.63%, compared to $1.2 million for the three months ended September 30, 2024.

The $0.6 million decrease in non-interest income from the three months ended June 30, 2025 was largely attributable to decreases of

$0.5 million in other non-interest income attributable to the Bank's investment in Oaktree SBIC Fund, L.P. ("Oaktree") as a result of a loss from Oaktree's investment and $0.1 million in late and prepayment charges.

The $0.3 million increase in non-interest income from the three months ended September 30, 2024 was largely attributable to increases of $0.4 million in grant income and $0.3 million in late and prepayment charges, partially offset by a decrease of $0.4 million in other non-interest income attributable to the Bank's investment in Oaktree as a result of a loss from Oaktree's investment.

Non-interest income for the nine months ended September 30, 2025, was $5.9 million, an increase of $0.8 million, or 15.97%, compared to $5.1 million for the nine months ended September 30, 2024. The $0.8 million increase in non-interest income was largely attributable to increases of $0.9 million in grant income, $0.8 million in late and prepayment charges and $0.4 million in income on sale of SBA loans, partially offset by decreases of $1.0 million in other non-interest income attributable to the Bank's investment in Oaktree as a result of a loss from Oaktree's investment and $0.3 million in income on the sale of mortgage loans.

Non-interest Expense

Non-interest expense for the three months ended September 30, 2025 was $16.6 million, a decrease of $0.3 million, or 1.49%, compared to $16.9 million for the three months ended June 30, 2025 and remained flat at $16.6 million when compared to the three months ended September 30, 2024.

The $0.3 million decrease in non-interest expense from the three months ended June 30, 2025 was mainly attributable to decreases of $0.3 million in federal deposit insurance and regulatory assessment, $0.2 million in other non-interest expense, partially offset by an increase of $0.2 million in compensation and benefits.

Non-interest expense for the nine months ended September 30, 2025, was $50.4 million, an increase of $0.4 million, or 0.77%, compared to $50.0 million for the nine months ended September 30, 2024. The $0.4 million increase in non-interest expense was mainly attributable to increases of $0.7 million in occupancy and equipment, $0.4 million in data processing expenses and $0.4 million in other operating expense, partially offset by decreases of $1.2 million in direct loan expenses and $0.3 million in professional fees.

Credit Quality:

Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty were $32.4 million at September 30, 2025 compared to $28.5 million at June 30, 2025 and $22.0 million at September 30, 2024.

During the three months ended September 30, 2025, a credit loss provision of $1.4 million on loans was recorded, consisting of $0.9 million charged on the funded portion and $0.5 million charged on the unfunded portion on loans. During the three months ended June 30, 2025, a credit loss provision of $1.6 million on loans was recorded, consisting of $1.3 million charged on the funded portion and $0.3 million charged on the unfunded portion on loans. During the three months ended September 30, 2024, a credit loss provision of $0.5 million on loans was recorded, consisting of $0.8 million charged on the funded portion on loans and a benefit of $0.3 million on the unfunded portion on loans.

During the nine months ended September 30, 2025, a credit loss provision of $2.7 million on loans was recorded, consisting of $2.9 million charged on the funded portion and a benefit of $0.2 million on the unfunded portion on loans. During the nine months ended September 30, 2024, a credit loss benefit of $0.2 million on loans was recorded, consisting of $0.4 million charged on the funded portion on loans and a benefit of $0.6 million on unfunded portion on loans.

Balance Sheet Summary

Total assets increased $117.1 million, or 3.85%, to $3.16 billion as of September 30, 2025 from $3.04 billion as of December 31, 2024. The increase in total assets is largely attributable to increases of $203.4 million in net loans receivable, $8.1 million in other assets, $6.7 million in cash and cash equivalents, $1.1 million in accrued interest receivable and $0.3 million in deferred tax asset, partially offset by decreases of $82.8 million in held-to-maturity securities, $10.1 million in available-for-sale securities, $4.9 million in mortgage loans held for sale, $3.2 million in Federal Home Loan Bank of New York stock, $0.8 million in right of use asset and $0.7 million in premises and equipment, net.

Total liabilities increased $92.8 million, or 3.66%, to $2.63 billion as of September 30, 2025 from $2.53 billion as of December 31, 2024. The increase in total liabilities was largely attributable to increases of $164.0 million in deposits, $3.9 million in advance payments by borrowers for taxes and insurance and $0.7 million in accrued interest payable, partially offset by decreases of $75.0 million in borrowings and $0.7 million in operating lease liabilities.

Total stockholders’ equity increased $24.3 million, or 4.81%, to $529.8 million as of September 30, 2025, from $505.5 million as of December 31, 2024. The $24.3 million increase in stockholders’ equity was largely attributable to $18.6 million in net income, $3.7 million in other comprehensive income, $1.4 million impact to additional paid in capital as a result of share-based compensation, $1.4 million from release of ESOP shares and $0.1 million from exercise of stock options, offset by $0.8 million in dividends on preferred shares.

About Ponce Financial Group, Inc.

Ponce Financial Group, Inc. is the holding company for Ponce Bank, N.A.. Ponce Bank, N.A. is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank, N.A.’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. N.A. 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, Federal Home Loan Bank stock and Federal Reserve 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, N.A. operates, including changes that adversely affect borrowers’ ability to service and repay Ponce Bank, N.A.’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, N.A.’s market area; Ponce Bank, N.A.’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

September 30,

June 30,

March 31,

December 31,

September 30,

2025

2024

ASSETS

Cash and due from banks:

Cash

29,296

35,767

32,113

35,478

32,061

Interest-bearing deposits

117,283

90,872

97,780

104,361

123,751

Total cash and cash equivalents

146,579

126,639

129,893

139,839

155,812

Available-for-sale securities, at fair value

94,822

96,562

103,570

104,970

111,005

Held-to-maturity securities, at amortized cost

285,125

336,879

358,024

367,938

403,736

Placement with banks

249

Mortgage loans held for sale, at fair value

5,794

5,703

8,567

10,736

9,566

Loans receivable, net

2,490,046

2,458,712

2,370,931

2,286,599

2,180,331

Accrued interest receivable

18,903

19,126

19,008

17,771

16,890

Premises and equipment, net

16,129

16,067

16,417

16,794

16,843

Right of use assets

28,295

28,806

29,496

29,093

29,785

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

25,945

26,620

25,807

29,182

28,515

Deferred tax assets

12,402

12,143

11,629

12,074

11,845

Other assets

32,790

26,363

16,245

24,693

51,392

Total assets

3,157,079

3,153,869

3,089,836

3,039,938

3,015,969

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits (1)

2,063,081

2,053,151

2,017,848

1,895,213

1,884,056

Operating lease liabilities

30,028

30,501

31,126

30,696

31,343

Accrued interest payable

4,372

4,161

4,628

3,712

2,918

Borrowings

521,100

536,100

521,100

596,100

580,421

Other liabilities

8,663

8,868

1,248

8,717

12,642

Total liabilities

2,627,244

2,632,781

2,575,950

2,534,438

2,511,380

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

(7,270

)

(7,404

)

(7,641

)

(7,707

)

(9,445

)

Additional paid-in-capital

208,909

208,275

207,888

207,319

208,478

Retained earnings

125,477

119,250

113,432

107,754

105,103

Accumulated other comprehensive loss

(11,586

)

(13,047

)

(13,515

)

(15,297

)

(12,686

)

Unearned compensation ─ ESOP

(10,944

)

(11,235

)

(11,527

)

(11,818

)

(12,110

)

Total stockholders' equity

529,835

521,088

513,886

505,500

504,589

Total liabilities and stockholders' equity

3,157,079

3,153,869

3,089,836

3,039,938

3,015,969

(1) As of June 30, 2025, March 31. 2025, December 31, 2024 and September 30, 2024, Advance payments by borrowers for taxes and insurance in the amounts of $10.9 million, $12.9 million, $10.3 million and $13.7 million, respectively, were reclassified to Deposits.

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

Three Months Ended

September 30,

June 30,

March 31,

December 31,

September

30,

2025

2024

Interest and dividend income:

Interest on loans receivable

41,486

40,291

37,136

35,622

32,945

Interest on deposits due from banks

978

807

1,668

1,783

2,430

Interest and dividend on securities and FHLBNY stock

4,383

4,762

5,193

5,481

5,918

Total interest and dividend income

46,847

45,860

43,997

42,886

41,293

Interest expense:

Interest on certificates of deposit

6,553

7,382

7,754

8,104

6,926

Interest on other deposits

9,996

9,058

8,554

8,476

8,519

Interest on borrowings

5,050

4,994

5,486

5,576

6,825

Total interest expense

21,599

21,434

21,794

22,156

22,270

Net interest income

25,248

24,426

22,203

20,730

19,023

Provision (benefit) for credit losses (1)

1,364

1,626

(285

)

897

537

Net interest income after provision (benefit) for credit losses

23,884

22,800

22,488

19,833

18,486

Non-interest income:

Service charges and fees

539

511

525

500

508

Brokerage commissions

—

Late and prepayment charges

385

530

697

318

Income on sale of mortgage loans

166

169

148

254

218

Income on sale of SBA loans

—

404

148

—

Grant income

429

428

—

Other

(35

)

422

603

833

348

Total non-interest income

1,492

2,060

2,381

2,097

1,151

Non-interest expense:

Compensation and benefits

7,868

7,627

7,780

7,668

7,674

Occupancy and equipment

3,934

3,907

3,913

3,863

3,786

Data processing expenses

1,296

1,188

1,152

1,143

1,099

Direct loan expenses

155

241

388

617

573

Insurance and surety bond premiums

318

297

315

293

292

Office supplies, telephone and postage

170

174

170

294

222

Professional fees

1,409

1,367

1,364

1,703

1,351

Microloans recoveries

—

(29

)

(54

)

Marketing and promotional expenses

184

266

289

180

Federal deposit insurance and regulatory assessment (2)

266

546

461

418

392

Other operating expenses (2)

1,018

1,256

1,262

1,206

1,051

Total non-interest expense (1)

16,618

16,869

16,888

17,465

16,566

Income before income taxes

8,758

7,991

7,981

4,465

3,071

Provision for income taxes

2,250

1,891

2,022

1,532

638

Net income

6,508

6,100

5,959

2,933

2,433

Dividends on preferred shares

281

282

281

282

281

Net income available to common stockholders

6,227

5,818

5,678

2,651

2,152

Earnings per common share:

Basic

0.27

0.26

0.25

0.12

0.10

Diluted

0.27

0.25

0.12

0.10

Weighted average common shares outstanding:

Basic

22,766,195

22,716,615

22,662,916

22,528,160

22,446,009

Diluted

23,135,448

22,947,769

22,876,740

22,807,644

22,612,028

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

(2) For the three months ended September 30, 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 of the periods.

Ponce Financial Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

For the Nine Months Ended September 30,

2025

2024

Variance $

Variance %

Interest and dividend income:

Interest on loans receivable

118,913

94,890

24,023

25.32

Interest on deposits due from banks

3,453

6,883

(3,430

)

(49.83

Interest and dividend on securities and FHLBNY stock

14,338

17,978

(3,640

)

(20.25

Total interest and dividend income

136,704

119,751

16,953

14.16

Interest expense:

Interest on certificates of deposit

21,689

19,664

2,025

10.30

Interest on other deposits

27,608

22,448

5,160

22.99

Interest on borrowings

15,530

21,889

(6,359

)

(29.05

Total interest expense

64,827

64,001

826

1.29

Net interest income

71,877

55,750

16,127

28.93

Provision (benefit) for credit losses

2,705

(346

)

3,051

(881.79

Net interest income after provision (benefit) for credit losses

69,172

56,096

13,076

23.31

Non-interest income:

Service charges and fees

1,575

1,473

102

6.92

Brokerage commissions

)

(29.41

Late and prepayment charges

1,612

862

750

87.01

Income on sale of mortgage loans

483

794

(311

)

(39.17

Income on sale of SBA loans

404

—

404

—

Grant income

857

—

857

—

Other

990

1,970

(980

)

(49.75

Total non-interest income

5,933

5,116

817

15.97

Non-interest expense:

Compensation and benefits

23,275

23,242

0.14

Occupancy and equipment

11,754

11,017

737

6.69

Data processing expenses

3,636

3,239

397

12.26

Direct loan expenses

784

1,938

(1,154

)

(59.55

Insurance and surety bond premiums

930

808

122

15.10

Office supplies, telephone and postage

514

704

(190

)

(26.99

Professional fees

4,140

4,443

(303

)

(6.82

Microloans recoveries

—

(172

)

172

(100.00

Marketing and promotional expenses

533

425

108

25.41

Federal deposit insurance and regulatory assessments

1,273

1,209

5.29

Other operating expenses

3,536

3,139

397

12.65

Total non-interest expense

50,375

49,992

383

0.77

Income before income taxes

24,730

11,220

13,510

120.41

Provision for income taxes

6,163

3,181

2,982

93.74

Net income

18,567

8,039

10,528

130.96

Dividends on preferred shares

844

356

488

137.08

Net income available to common stockholders

17,723

7,683

10,040

130.68

Earnings per common share:

Basic

0.78

0.34

0.44

129.41

Diluted

0.77

0.34

0.43

126.47

Weighted average common shares outstanding:

Basic

22,715,620

22,403,258

312,362

1.39

Diluted

22,992,655

22,466,178

526,477

2.34

Ponce Financial Group, Inc. and Subsidiaries

Loans Receivable excluding Mortgage Loans Held for Sale

As of

September 30,

June 30,

March 31,

December 31,

September 30,

2025

2024

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

(Dollars in thousands)

Mortgage loans:

1-4 family residential

Investor Owned

311,728

12.39

317,488

12.78

325,866

13.62

330,053

14.30

332,380

15.09

Owner-Occupied

132,874

5.28

134,862

5.43

137,676

5.75

142,363

6.17

145,065

6.59

Multifamily residential

688,574

27.39

693,670

27.96

675,541

28.24

670,159

29.04

678,029

30.78

Nonresidential properties

436,175

17.35

404,512

16.30

390,681

16.33

389,898

16.89

383,277

17.40

Construction and land

886,369

35.25

883,462

35.59

815,425

34.08

733,660

31.79

631,461

28.67

Total mortgage loans

2,455,720

97.66

2,433,994

98.06

2,345,189

98.02

2,266,133

98.19

2,170,212

98.53

Non-mortgage loans:

Business loans

58,012

2.31

47,372

1.91

46,329

1.94

40,849

1.77

28,499

1.29

Consumer loans (1)

727

0.03

840

0.03

997

0.04

1,038

0.04

4,021

0.18

Total non-mortgage loans

58,739

2.34

48,212

1.94

47,326

1.98

41,887

1.81

32,520

1.47

Total loans, gross

2,514,459

100.00

2,482,206

100.00

2,392,515

100.00

2,308,020

100.00

2,202,732

100.00

Net deferred loan origination costs

351

606

1,390

1,081

1,565

Allowance for credit losses on loans

(24,764

)

(24,100

)

(22,974

)

(22,502

)

(23,966

)

Loans, net

2,490,046

2,458,712

2,370,931

2,286,599

2,180,331

(1)

As of September 30, 2024, consumer loans include $3.0 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

September 30,

June 30,

March 31,

December 31,

September 30,

2025

2024

(Dollars in thousands)

Allowance for credit losses on loans at beginning of the period

24,100

22,974

22,502

23,966

24,061

Provision for credit losses on loans

864

1,348

731

1,090

801

Charge-offs:

Mortgage loans:

1-4 family residences

Investor owned

—

(38

)

—

Owner occupied

—

Multifamily residences

—

Nonresidential properties

—

)

Construction and land

—

Non-mortgage loans:

Business

(200

)

(222

)

(222

)

(232

)

(450

)

Consumer

—

)

(2,465

)

(634

)

Total charge-offs

(200

)

(222

)

(263

)

(2,697

)

(1,091

)

Recoveries:

Non-mortgage loans:

Business

—

Consumer

—

143

194

Total recoveries

—

143

195

Net (charge-offs) recoveries

(200

)

(222

)

(259

)

(2,554

)

(896

)

Allowance for credit losses on loans at end of the period

24,764

24,100

22,974

22,502

23,966

Ponce Financial Group, Inc. and Subsidiaries

Deposits

As of

September 30,

June 30,

March 31,

December 31,

September 30,

2025

2024

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

(Dollars in thousands)

Demand

192,595

9.34

197,671

9.63

212,139

10.51

169,178

8.93

182,737

9.71

Interest-bearing deposits:

NOW/IOLA accounts

75,051

3.64

63,626

3.10

74,430

3.69

62,616

3.30

71,445

3.79

Money market accounts

821,844

39.84

790,939

38.52

692,753

34.33

636,219

33.57

660,168

35.04

Reciprocal deposits

154,548

7.49

136,693

6.66

141,838

7.03

130,677

6.90

94,145

5.00

Savings accounts (1) (2)

117,401

5.69

113,701

5.54

119,023

5.90

116,219

6.13

122,674

6.51

Total NOW, money market, reciprocal and savings accounts

1,168,844

56.66

1,104,959

53.82

1,028,044

50.95

945,731

49.90

948,432

50.34

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

209,819

10.17

220,671

10.75

219,721

10.89

204,293

10.78

210,262

11.17

Brokered certificates of deposit (3)

67,952

3.29

69,531

3.39

84,531

4.19

94,531

4.99

94,531

5.02

Listing service deposits (3)

4,150

0.20

6,140

0.30

6,140

0.30

7,376

0.39

7,376

0.39

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

419,721

20.34

454,179

22.12

467,273

23.16

474,104

25.02

440,718

23.39

Total certificates of deposit

701,642

34.00

750,521

36.56

777,665

38.54

780,304

41.18

752,887

39.97

Total interest-bearing deposits

1,870,486

90.66

1,855,480

90.38

1,805,709

89.49

1,726,035

91.08

1,701,319

90.31

Total deposits

2,063,081

100.00

2,053,151

100.01

2,017,848

100.00

1,895,213

100.01

1,884,056

100.02

(1)

As of September 30, 2024, $36.2 million, respectively, were reclassified from all other certificates of deposit less than $250K to certificates of deposit of $250K or more.

(2)

As of June 30, 2025, March 31. 2025, December 31, 2024 and September 30, 2024, Advance payments by borrowers for taxes and insurance in the amounts of $10.9 million, $12.9 million, $10.3 million and $13.7 million, respectively, were reclassified to Deposits.

(3)

There were no individual listing service deposits or brokered certificates of deposit amounting to $250,000 or more.

Ponce Financial Group, Inc. and Subsidiaries

Nonperforming Assets

As of Three Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

2025

2024

(Dollars in thousands)

Non-accrual loans:

Mortgage loans:

1-4 family residential

Investor owned

2,527

1,859

1,052

436

Owner occupied

649

—

1,423

Multifamily residential

14,202

11,703

9,788

10,271

4,685

Nonresidential properties

—

405

—

824

Construction and land

8,907

14,159

14,158

8,907

Non-mortgage loans:

Business

880

276

170

343

180

Consumer

—

Total non-accrual loans (not including non-accruing

modifications to borrowers experiencing financial difficulty) (1)

27,165

23,150

26,592

26,631

16,455

Non-accruing modifications to borrowers experiencing

financial difficulty (1):

Mortgage loans:

1-4 family residential

Investor owned

284

279

278

Owner occupied

414

424

431

435

444

Multifamily residential

—

Nonresidential properties

—

Construction and land

—

Non-mortgage loans:

Business

—

Consumer

—

Total non-accruing modifications to borrowers

experiencing financial difficulty (1)

698

708

710

714

722

Total non-performing assets (2)

27,863

23,858

27,302

27,345

17,177

Accruing modifications to borrowers experiencing financial

difficulty (1):

Mortgage loans:

1-4 family residential

Investor owned

1,766

1,779

1,792

1,807

1,821

Owner occupied

1,959

2,012

2,038

2,062

2,116

Multifamily residential

—

Nonresidential properties

629

655

644

652

672

Construction and land

—

Non-mortgage loans:

Business

196

203

209

215

222

Consumer

—

Total accruing modifications to borrowers

experiencing financial difficulty (1)

4,550

4,649

4,683

4,736

4,831

Total non-performing assets and accruing modifications

to borrowers experiencing financial difficulty (1)

32,413

28,507

31,985

32,081

22,008

Total non-performing assets to total assets

0.88

0.76

0.87

0.90

0.57

(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 September 30,

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)

2,499,268

41,486

6.59

2,096,592

32,945

6.25

Securities (3)

418,513

3,913

3.71

548,708

5,324

3.86

Other (4)

119,262

1,448

4.82

210,057

3,024

5.73

Total interest-earning assets

3,037,043

46,847

6.12

2,855,357

41,293

5.75

Non-interest-earning assets

96,095

107,153

Total assets

3,133,138

2,962,510

Interest-bearing liabilities:

NOW/IOLA

78,526

137

0.69

74,690

174

0.93

Money market

958,277

9,831

4.07

711,385

8,318

4.65

Savings (5)

119,159

0.09

122,722

0.09

Certificates of deposit

698,019

6,553

3.72

655,562

6,926

4.20

Total deposits

1,853,981

16,549

3.54

1,564,359

15,445

3.93

Borrowings

521,100

5,050

3.84

660,312

6,825

4.11

Total interest-bearing liabilities

2,375,081

21,599

3.61

2,224,671

22,270

3.98

Non-interest-bearing liabilities:

Non-interest-bearing demand

199,922

—

185,543

—

Other non-interest-bearing liabilities

31,406

—

49,702

—

Total non-interest-bearing liabilities

231,328

—

235,245

—

Total liabilities

2,606,409

21,599

2,459,916

22,270

Total equity

526,729

502,594

Total liabilities and total equity

3,133,138

3.61

2,962,510

3.98

Net interest income

25,248

19,023

Net interest rate spread (6)

2.51

1.77

Net interest-earning assets (7)

661,962

630,686

Net interest margin (8)

3.30

2.65

Average interest-earning assets to interest-bearing liabilities

127.87

128.35

(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)

For the three months ended September 30, 2024, Advance payments by borrowers for taxes and insurance in the amounts of $13.2 million, were reclassified to Savings.

(6)

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.

(7)

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

(8)

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

Ponce Financial Group, Inc. and Subsidiaries

Average Balance Sheets

Nine Months Ended September 30,

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)

2,439,280

118,913

6.52

2,038,879

94,890

6.22

Securities (3)

445,130

12,680

3.81

562,451

16,429

3.90

Other (4)

135,600

5,111

5.04

196,668

8,432

5.73

Total interest-earning assets

3,020,010

136,704

6.05

2,797,998

119,751

5.72

Non-interest-earning assets

103,059

106,500

Total assets

3,123,069

2,904,498

Interest-bearing liabilities:

NOW/IOLA

73,034

352

0.64

76,817

543

0.94

Money market

884,115

27,172

4.11

618,725

21,819

4.71

Savings (5)

118,656

0.09

125,296

0.09

Certificates of deposit

754,531

21,689

3.84

640,369

19,664

4.10

Total deposits

1,830,336

49,297

3.60

1,461,207

42,112

3.85

Borrowings

536,851

15,530

3.87

703,775

21,889

4.15

Total interest-bearing liabilities

2,367,187

64,827

3.66

2,164,982

64,001

3.95

Non-interest-bearing liabilities:

Non-interest-bearing demand

199,978

—

191,087

—

Other non-interest-bearing liabilities

37,206

—

51,061

—

Total non-interest-bearing liabilities

237,184

—

242,148

—

Total liabilities

2,604,371

64,827

2,407,130

64,001

Total equity

518,698

497,368

Total liabilities and total equity

3,123,069

3.66

2,904,498

3.95

Net interest income

71,877

55,750

Net interest rate spread (6)

2.39

1.77

Net interest-earning assets (7)

652,823

633,016

Net interest margin (8)

3.18

2.66

Average interest-earning assets to

interest-bearing liabilities

127.58

129.24

(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)

For the nine months ended September 30, 2024, Advance payments by borrowers for taxes and insurance in the amounts of $13.7 million, were reclassified to Savings.

(6)

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.

(7)

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

(8)

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

Ponce Financial Group, Inc. and Subsidiaries

Other Data

As of

September 30,

June 30,

March 31,

December 31,

September 30,

2025

2024

Other Data

Common shares issued

24,886,711

Less treasury shares

885,586

901,911

920,520

925,497

1,067,248

Common shares outstanding at end of period

24,001,125

23,984,800

23,966,191

23,961,214

23,819,463

Book value per common share

12.70

12.34

12.05

11.71

11.74

Tangible book value per common share

12.70

12.34

12.05

11.71

11.74

Contact:

Sergio J. Vaccaro

sergio.vaccaro@poncebank.net

718-931-9000

Source: Ponce Financial Group, Inc.

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