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NorthEast Community Bancorp, Inc. Reports Results for the Three Months and Year Ended December 31, 2022

NorthEast Community Bancorp, Inc.
NorthEast Community Bancorp, Inc.

WHITE PLAINS, N.Y., Jan. 31, 2023 (GLOBE NEWSWIRE) -- NorthEast Community Bancorp, Inc. (Nasdaq: NECB) (the “Company”), the parent holding company of NorthEast Community Bank (the “Bank”), reported net income of $8.3 million, or $0.54 per basic and diluted common share, for the three months ended December 31, 2022 compared to net income of $4.2 million, or $0.27 per basic and diluted common share for the three months ended December 31, 2021.

For the year ended December 31, 2022, the Company reported net income of $24.8 million, or $1.61 and $1.58 per basic and diluted common share, compared to net income of $11.9 million, or $0.75 per basic and diluted common share, for the year ended December 31, 2021.

Kenneth A. Martinek, NorthEast Community Bancorp’s Chairman of the Board and Chief Executive Officer, stated, “We are pleased to report another quarter of strong earnings due to the strong performance of our loan portfolio. Despite the lingering effects of the COVID-19 pandemic and the recent increase in interest rates, loan demand remained strong with originations and outstanding commitments remaining robust. As has been in the past, construction lending for affordable housing units in high demand-high absorption areas continues to be our focus.”

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Highlights for the year ended December 31, 2022 are as follows:

  • Net income increased by $4.1 million and $12.9 million, or 96.4% and 108.7%, respectively, for the three months and year ended December 31, 2022 compared to the same periods in the prior year.

  • Net interest income increased by $9.3 million and $20.6 million, or 79.6% and 47.5%, for the three months and year ended December 31, 2022 compared to the same periods in 2021.

  • Our commitments, loans-in-process, and standby letters of credit outstanding totaled $1.0 billion at December 31, 2022 compared to $749.0 million at December 31, 2021.

  • The performance of our loan portfolio remains strong with no non-accrual loans. At this time, we have no loans on deferral as a result of the COVID-19 pandemic.

Balance Sheet Summary
Total assets increased by $200.0 million, or 16.3%, to $1.4 billion at December 31, 2022, from $1.2 billion at December 31, 2021. The increase in assets was primarily due to increases in net loans of $244.1 million, securities held-to-maturity of $8.5 million, accrued interest receivable of $4.3 million, and premises and equipment of $2.2 million, partially offset by decreases in cash and cash equivalents of $57.0 million and equity securities of $1.9 million.

Cash and cash equivalents decreased by $57.0 million, or 37.4%, to $95.3 million at December 31, 2022 from $152.3 million at December 31, 2021. The decrease in cash and cash equivalents was a result of cash being deployed to fund an increase in net loans of $244.1 million, an increase in securities held-to-maturity of $8.5 million, an increase in property and equipment of $2.2 million due primarily to the purchase of property and equipment for a new branch office, and a reduction in FHLB advances of $7.0 million.

Equity securities decreased by $1.9 million, or 9.5%, to $18.0 million at December 31, 2022 from $19.9 million at December 31, 2021. The decrease in equity securities was attributable to market depreciation of $1.9 million as market interest rates increased during the year ended December 31, 2022.

Securities held-to-maturity increased by $8.5 million, or 47.6%, to $26.4 million at December 31, 2022 from $17.9 million at December 31, 2021 due primarily to the purchases of securities, partially offset by maturities and pay-downs.

Loans, net of the allowance for loan losses, increased by $244.1 million, or 25.2%, to $1.2 billion at December 31, 2022 from $968.1 million at December 31, 2021.   The increase in loans, net of the allowance for loan losses, was primarily due to loan originations of $700.1 million during the year ended December 31, 2022, consisting primarily of $580.7 million in construction loans with respect to which approximately 31.3% of the funds were disbursed at loan closings, with the remaining funds to be disbursed over the terms of the construction loans.

Loan originations resulted in a net increase of $246.8 million in construction loans, $33.3 million in multi-family loans, and $277,000 in consumer loans. The increase in our loan portfolio was partially offset by decreases in non-residential loans of $19.1 million, commercial and industrial loans of $8.3 million, mixed-use loans of $6.8 million, and residential loans of $1.7 million, coupled with normal pay-downs and principal reductions.

Premises and equipment increased by $2.2 million, or 9.0%, to $26.1 million at December 31, 2022 from $23.9 million at December 31, 2021 due to the acquisition of property and equipment for a new branch site located in Bloomingburg, New York.

Investments in Federal Home Loan Bank stock decreased by $331,000, or 21.1%, to $1.2 million at December 31, 2022 from $1.6 million at December 31, 2021 due primarily to a reduction in mandatory Federal Home Loan Bank stock in connection with the maturity of $7.0 million in advances during the quarter ended March 31, 2022.

Accrued interest receivable increased by $4.3 million, or 100.7%, to $8.6 million at December 31, 2022 from $4.3 million at December 31, 2021 due to an increase in the loan portfolio and seven interest rate increases in 2022 that resulted in an increase in the interest rates on loans in our construction loan portfolio.

Foreclosed real estate decreased by $540,000, or 27.1%, to $1.5 million at December 31, 2022 from $2.0 million at December 31, 2021 due to a write down on the fair market value of the property because the increase in interest rates caused an increase in the capitalization rate thereby resulting in a reduction in the calculated fair market value of the property.

Right of use assets — operating decreased by $252,000, or 9.8%, to $2.3 million at December 31, 2022 from $2.6 million at December 31, 2021, primarily due to amortization.

Other assets increased by $730,000, or 15.6%, to $5.4 million at December 31, 2022 from $4.7 million at December 31, 2021 due to increases in suspense accounts of $641,000, tax assets of $98,000, and prepaid expense of $12,000, partially offset by decreases in securities and principal receivables of $19,000 and miscellaneous assets of $2,000.

Total deposits increased by $194.8 million, or 21.0%, to $1.1 billion at December 31, 2022 from $927.2 million at December 31, 2021. The increase was primarily due to increases in certificates of deposit of $90.7 million, or 31.0%, savings account balances of $88.9 million, or 48.1%, and non-interest bearing demand deposits of $45.4 million, or 13.7%. These increases were partially offset by a decrease in NOW/money market accounts of $30.3 million, or 25.6%, from December 31, 2021 to December 31, 2022.

Federal Home Loan Bank advances decreased by $7.0 million, or 25.0%, to $21.0 million at December 31, 2022 from $28.0 million at December 31, 2021 due to maturity of borrowings.

Advance payments by borrowers for taxes and insurance increased by $485,000, or 25.7%, to $2.4 million at December 31, 2022 from $1.9 million at December 31, 2021 due primarily to the accumulation of tax payments from borrowers.

Lease liability – operating decreased by $241,000, or 9.3%, to $2.4 million at December 31, 2022 from $2.6 million at December 31, 2021, primarily due to amortization.

Accounts payable and accrued expenses increased by $1.2 million, or 9.0%, to $14.8 million at December 31, 2022 from $13.5 million at December 31, 2021 due primarily to an increase in accrued bonus expense of $1.1 million for employees.

Stockholders’ equity increased by $10.7 million, or 4.2% to $262.1 million at December 31, 2022, from $251.4 million at December 31, 2021. The increase in stockholders’ equity was due to net income of $24.8 million for the year ended December 31, 2022, a reduction of $869,000 in unearned employee stock ownership plan shares coupled with an increase of $206,000 in earned employee stock ownership plan shares, $369,000 in other comprehensive income, and $208,000 in the amortization of restricted stocks and stock options awarded in connection with the Equity Incentive Plan, partially offset by stock repurchases totaling $9.3 million and dividends paid and declared of $6.5 million.

Net Interest Income
Net interest income totaled $20.9 million for the three months ended December 31, 2022, as compared to $11.7 million for the three months ended December 31, 2021. The increase in net interest income of $9.3 million, or 79.6%, was primarily due to an increase in interest income offset by an increase in interest expense.

The increase in interest income is attributable to increases in loans and investment securities, offset slightly by a decrease in interest-bearing deposits. The increase in interest income is also attributable to a rising interest rate environment as a result of the Federal Reserve’s interest rate increases during the year ended December 31, 2022.

The increase in market interest rates during the year subsequent to December 31, 2021 also caused an increase in our interest expense. As a result, the increase in interest expense for the three months ended December 31, 2022 was due to an increase in the cost of funds on our deposits and an increase in the balances on our savings and club balances and our certificates of deposits, partially offset by a decrease in the balances on our interest-bearing demand deposits and a decrease in our borrowed money’s cost of funds and balances.

Total interest and dividend income increased by $11.7 million, or 91.2%, to $24.5 million for the three months ended December 31, 2022 from $12.8 million for the three months ended December 31, 2021. The increase in interest and dividend income was due to an increase in the average balance of interest earning assets of $182.6 million, or 16.9%, to $1.3 billion for the three months ended December 31, 2022 from $1.1 billion for the three months ended December 31, 2021 and an increase in the yield on interest earning assets by 302 basis points from 4.75% for the three months ended December 31, 2021 to 7.77% for the three months ended December 31, 2022.

Interest expense increased by $2.4 million, or 207.9%, to $3.6 million for the three months ended December 31, 2022 from $1.2 million for the three months ended December 31, 2021. The increase in interest expense was due to an increase in the cost of interest bearing liabilities by 122 basis points from 0.79% for the three months ended December 31, 2021 to 2.01% for the three months ended December 31, 2022, and an increase in average interest bearing liabilities of $124.4 million, or 21.4%, to $707.0 million for the three months ended December 31, 2022 from $582.6 million for the three months ended December 31, 2021.

Net interest margin increased by 232 basis points, or 53.7%, during the three months ended December 31, 2022 to 6.64% compared to 4.32% during the three months ended December 31, 2021.

Net interest income totaled $63.9 million for the year ended December 31, 2022, as compared to $43.3 million for the year ended December 31, 2021. The increase in net interest income of $20.6 million, or 47.5%, was primarily due to an increase in interest income offset by an increase in interest expense.

The increase in interest income is attributable to increases in loans and investment securities, offset by decreases in interest-bearing deposits and Federal Home Loan Bank stock, as we continued to grow the Company by leveraging the proceeds raised in our July 2021 second-step conversion. The increase in interest income is also due, in large part, to the increase in interest rates attributable to the Federal Reserve’s rate increases during the year ended December 31, 2022.

The increase in market interest rates during the year ended December 31, 2022 also caused an increase in our interest expense. As a result, the increase in interest expense for the year ended December 31, 2022 is attributable to an increase in the cost of funds on our deposits and an increase in the balances on our savings and club balances, partially offset by decreases in the balances on our certificates of deposits and interest-bearing demand deposits and decreases in the cost of funds and balances on our borrowed money.

In this regard, interest and dividend income increased by $23.6 million, or 48.8%, to $72.0 million for the year ended December 31, 2022 from $48.4 million for the year ended December 31, 2021. The increase in interest and dividend income was due to an increase in the average balance of interest earning assets of $217.5 million, or 22.1%, to $1.2 billion for the year ended December 31, 2022 from $985.1 million for the year ended December 31, 2021 and an increase in the yield on interest earning assets by 108 basis points from 4.92% for the year ended December 31, 2021 to 6.00% for the year ended December 31, 2022.

Interest expense increased by $3.0 million, or 59.3%, to $8.1 million for the year ended December 31, 2022 from $5.1 million for the year ended December 31, 2021. The increase in interest expense was due to an increase in the cost of interest bearing liabilities of 36 basis points from 0.90% for the year ended December 31, 2021 to 1.26% for the year ended December 31, 2022 and an increase in average interest bearing liabilities of $76.6 million, or 13.5%, to $645.1 million for the year ended December 31, 2022 from $568.5 million for the year ended December 31, 2021.

Net interest margin increased by 92 basis points, or 20.9%, during the year ended December 31, 2022 to 5.32% compared to 4.40% during the year ended December 31, 2021.

Provision for Loan Losses
The Company recorded loan loss provision of $439,000 for the three months ended December 31, 2022 compared to no loan loss provision for the three months ended December 31, 2021. We charged-off $426,000 during the three months ended December 31, 2022 comprised of a $328,000 charge-off against one construction project in connection with the sale of the project’s two non-performing loans to a third party precipitated by legal action between the two partners/borrowers in the project, an $86,000 charge-off against two mixed-use loans to a borrower in connection with the sale of the two performing troubled debt restructured loans to a third party, and a $12,000 charge-off against various unpaid overdrafts in our demand deposit accounts. We had no charge-offs during the three months ended December 31, 2021.

The provision recorded for the three months ended December 31, 2022 was primarily attributed to the afore-mentioned charge-off of $426,000 during the three months ended December 31, 2022.

We recorded no recoveries during the three months ended December 31, 2022 compared to recoveries of $1,000 during the three months ended December 31, 2021.

The Company recorded loan loss provision of $439,000 for the year ended December 31, 2022 compared to a loan loss provision of $3.6 million for the year ended December 31, 2021. The provision recorded for the year ended December 31, 2022 was primarily attributable to the afore-mentioned charge-offs totaling $414,000 against the sale of four loans and charge-off of $34,000 against various unpaid overdrafts in our demand deposit accounts.

The provision recorded for the year ended December 31, 2021 was primarily attributed to the charge-off of the previously disclosed non-residential bridge loan with a balance of $3.6 million secured by commercial real estate located in Greenwich, Connecticut. The loan is secured by commercial real estate located in Greenwich, Connecticut and guaranteed by the two borrowers. The loan originated in 2016 as a two-year bridge loan and, upon the borrower’s failure to satisfy the loan at the maturity date, the loan was accelerated and a foreclosure action was instituted. Although the loan was fully charged-off, the loan remains in foreclosure and management and the borrower negotiated a standstill agreement which allows the borrowers to retain, at their own expense, the zoning and planning consultants necessary to obtain re-approvals from the town to proceed with the original planned residential condominium development. The Company intends to aggressively seek recovery of all amounts due from the personal guarantors of the loan. If successful against the guarantors, any recovery received would be added back to the allowance for loan losses and an analysis will be performed at that time to determine the appropriateness of the recovery into income. There has been no change in the status of the recovery action during the fourth quarter ended December 31, 2022.

We also charged-off $23,000 during the year ended December 31, 2021 against various unpaid overdrafts in our demand deposit accounts.

We recorded recoveries of $242,000 during the year ended December 31, 2022 comprised of recoveries of $146,000 regarding a previously charged-off multi-family property, $53,000 regarding a previously charged-off non-residential property, and $43,000 regarding a previously charged-off mixed-use property. We recorded recoveries of $160,000 during the year ended December 31, 2021 comprised primarily of recoveries of $150,000 regarding a previously charged-off multi-family property.

Non-Interest Income
Non-interest income for the three months ended December 31, 2022 was $779,000 compared to non-interest income of $601,000 for the three months ended December 31, 2021. The increase in total non-interest income was primarily due to a one-time capital gains distribution of $329,000 from our equity securities, partially offset by an unrealized loss of $267,000 on equity securities, resulting in a net unrealized gain on equity securities of $62,000 during the three months ended December 31, 2022 compared to an unrealized loss of $174,000 on equity securities during the three months ended December 31, 2021. The unrealized loss of $267,000 on equity securities during the 2022 period was due to a rising interest rate environment and the Federal Reserve’s interest rate increases during the December 31, 2022 quarter.

The increase in total non-interest income was also due to increases of $3,000 in other non-interest income and $2,000 in bank-owned life insurance income, partially offset by decreases of $40,000 in other loan fees and service charges and $23,000 in investment advisory fees.

Non-interest income for the year ended December 31, 2022 was $1.7 million compared to non-interest income of $2.4 million for the year ended December 31, 2021. The decrease in total non-interest income was primarily due to an unrealized loss of $1.9 million on equity securities, partially offset by a one-time capital gains distribution of $329,000 from our equity securities resulting in a net unrealized loss on equity securities of $1.6 million during the year ended December 31, 2022 compared to an unrealized loss of $389,000 on equity securities during the year ended December 31, 2021. The unrealized loss of $1.9 million on equity securities during the 2022 period was due to a rising interest rate environment and the Federal Reserve’s interest rate increases during the year ended December 31, 2022.

The decrease in total non-interest income was also due to a decrease of $40,000 in investment advisory fees, partially offset by an increase of $426,000 in other loan fees and service charges, an increase of $91,000 on gain from the sale of fixed assets, an increase of $31,000 in other non-interest income, and an increase of $5,000 in bank-owned life insurance income.

Non-Interest Expense
Non-interest expense increased by $1.9 million, or 27.9%, to $8.6 million for the three months ended December 31, 2022 from $6.8 million for the three months ended December 31, 2021. The increase resulted primarily from increases of $497,000 in other operating expense, $451,000 in goodwill impairment loss, $363,000 in real estate owned expense, $357,000 in salaries and employee benefits, $84,000 in occupancy expense, $63,000 in outside data processing expense, $60,000 in advertising expense, and $8,000 in equipment expense.

Non-interest expense increased by $4.2 million, or 15.9%, to $30.7 million for the year ended December 31, 2022 from $26.5 million for the year ended December 31, 2021. The increase resulted primarily from increases of $1.9 million in other operating expense, $553,000 in salaries and employee benefits, $530,000 in real estate owned expense, $451,000 in goodwill impairment loss, $313,000 in occupancy expense, $234,000 in outside data processing expense, $160,000 in advertising expense, and $114,000 in equipment expense.

Income Taxes
We recorded income tax expense of $4.4 million and $1.3 million for the three months ended December 31, 2022 and 2021, respectively. For the three months ended December 31, 2022 and 2021, we had approximately $186,000 and $189,000, respectively, in tax exempt income. Our effective income tax rates were 34.7% and 23.6% for the three months ended December 31, 2022 and 2021, respectively.

We recorded income tax expense of $9.6 million and $3.7 million for the year ended December 31, 2022 and 2021, respectively. For the year ended December 31, 2022, we had approximately $740,000 in tax exempt income, compared to approximately $711,000 in tax exempt income for the year ended December 31, 2021. Our effective income tax rates were 27.8% and 23.6% for the year ended December 31, 2022 and 2021, respectively.

Asset Quality
Non-performing assets totaled $1.5 million at December 31, 2022 compared to $2.0 million at December 31, 2021. We had no non-performing loans at December 31, 2022 and 2021. Our non-performing assets consisted of one foreclosed property at December 31, 2022 and 2021. Our ratio of non-performing assets to total assets remained low at 0.10% at December 31, 2022 and at 0.16% at December 31, 2021.

The Company’s allowance for loan losses totaled $5.5 million, or 0.45% of total loans as of December 31, 2022, compared to $5.2 million, or 0.54% of total loans as of December 31, 2021.   Based on a review of the loans that were in the loan portfolio at December 31, 2022, management believes that the allowance for loan losses is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.

Capital
The Company’s total stockholder’s equity to assets was 18.39% as of December 31, 2022. At December 31, 2022, the Company had the ability to borrow $31.5 million from the Federal Home Loan Bank of New York.

The Bank’s capital position remains strong relative to current regulatory requirements and the Bank is considered a well-capitalized institution under the Prompt Corrective Action framework. As of December 31, 2022, the Bank had a tier 1 leverage capital ratio of 16.49% and a total risk-based capital ratio of 13.49%.

Equity Incentive Plan
At a special shareholders meeting held on September 29, 2022, our shareholders approved the Company’s 2022 Equity Incentive Plan whereby 1,369,771 shares of the Company’s common stock have been reserved from authorized but unissued shares for purposes of grants of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, performance shares and performance units to selected employees and non-employee directors of the Company.

At September 30, 2022, 86,880 shares of restricted stock and 217,206 nonqualified stock options in the aggregate were granted to six non-employee directors of the Company as set forth in the 2022 Equity Incentive Plan. The aggregate value of the restricted stock and nonqualified stock options granted to the non-employee directors totaled $1.1 million and $843,000, respectively, at the date of the grant. The restricted stock and nonqualified stock options granted to the non-employee directors vest at a rate of 20% per year from the date of the grant.

At November 17, 2022, 265,157 shares of restricted stock and 662,891 nonqualified stock options in the aggregate were granted to 17 employees of the Company under the 2022 Equity Incentive Plan. The aggregate value of the restricted stock and nonqualified stock options granted to the employees totaled $3.7 million and $3.0 million, respectively, at the date of the grant. The restricted stock and nonqualified stock options granted to the employees vest at a rate of 20% per year from the date of the grant.

About NorthEast Community Bancorp
NorthEast Community Bancorp, headquartered at 325 Hamilton Avenue, White Plains, New York 10601, is the holding company for NorthEast Community Bank, which conducts business through its eleven branch offices located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts and three loan production offices located in New City, New York, White Plains, New York, and Danvers, Massachusetts. For more information about NorthEast Community Bancorp and NorthEast Community Bank, please visit www.necb.com.

Forward Looking Statement
This press release contains certain forward-looking statements. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include, but are not limited to, changes in market interest rates, regional and national economic conditions (including higher inflation and its impact on regional and national economic conditions), the effect of the COVID-19 pandemic (including its impact on NorthEast Community Bank’s business operations and credit quality, on our customers and their ability to repay their loan obligations and on general economic and financial market conditions), legislative and regulatory changes, monetary and fiscal policies of the United States government, including policies of the United States Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in NorthEast Community Bank’s market area, changes in the real estate market values in NorthEast Community Bank’s market area and changes in relevant accounting principles and guidelines. Additionally, other risks and uncertainties may be described in our annual and quarterly reports filed with the U.S. Securities and Exchange Commission (the “SEC”), which are available through the SEC’s website located at www.sec.gov. These risks and uncertainties should be considered in evaluating any forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.



NORTHEAST COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

    

2022

 

    

2021

 

 

 

(In thousands, except share

 

 

and per share amounts)

ASSETS

 

 

 

 

 

 

Cash and amounts due from depository institutions

 

$

13,210

 

 

$

8,344

 

Interest-bearing deposits

 

 

82,098

 

 

 

143,925

 

     Total Cash and cash equivalents

 

 

95,308

 

 

 

152,269

 

Certificates of deposit

 

 

100

 

 

 

100

 

Equity securities

 

 

18,041

 

 

 

19,943

 

Securities available-for-sale, at fair value

 

 

1

 

 

 

1

 

Securities held-to-maturity (fair value of $22,865 and $17,620, respectively)

 

 

26,395

 

 

 

17,880

 

Loans receivable

 

 

1,217,321

 

 

 

972,851

 

  Deferred loan costs, net

 

 

372

 

 

 

484

 

  Allowance for loan losses

 

 

(5,475

)

 

 

(5,242

)

      Net loans

 

 

1,212,218

 

 

 

968,093

 

Premises and equipment, net

 

 

26,063

 

 

 

23,907

 

Investments in restricted stock, at cost

 

 

1,238

 

 

 

1,569

 

Bank owned life insurance

 

 

25,896

 

 

 

25,291

 

Accrued interest receivable

 

 

8,597

 

 

 

4,283

 

Goodwill

 

 

200

 

 

 

651

 

Real estate owned

 

 

1,456

 

 

 

1,996

 

Property held for investment

 

 

1,444

 

 

 

1,481

 

Right of Use Assets – Operating

 

 

2,312

 

 

 

2,564

 

Right of Use Assets – Financing

 

 

355

 

 

 

359

 

Other assets

 

 

5,413

 

 

 

4,683

 

Total assets

 

$

1,425,037

 

 

$

1,225,070

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

  

 

 

  

Liabilities:

 

 

  

 

 

  

Deposits:

 

 

  

 

 

  

Non-interest bearing

 

$

376,302

 

 

$

330,853

 

Interest bearing

 

 

745,653

 

 

 

596,311

 

Total deposits

 

 

1,121,955

 

 

 

927,164

 

Advance payments by borrowers for taxes and insurance

 

 

2,369

 

 

 

1,884

 

Federal Home Loan Bank advances

 

 

21,000

 

 

 

28,000

 

Lease Liability – Operating

 

 

2,363

 

 

 

2,604

 

Lease Liability – Financing

 

 

533

 

 

 

496

 

Accounts payable and accrued expenses

 

 

14,754

 

 

 

13,540

 

Total liabilities

 

 

1,162,974

 

 

 

973,688

 

 

 

 

  

 

 

  

Stockholders’ equity:

 

 

  

 

 

  

Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding

 

$

 

 

$

 

Common stock, $0.01 par value; 75,000,000 shares authorized; 16,049,454 shares and 16,377,936 shares outstanding, respectively

 

 

161

 

 

 

164

 

Additional paid-in capital

 

 

136,434

 

 

 

145,335

 

Unearned Employee Stock Ownership Plan (“ESOP”) shares

 

 

(7,432

)

 

 

(8,301

)

Retained earnings

 

 

132,670

 

 

 

114,323

 

Accumulated other comprehensive gain (loss)

 

 

230

 

 

 

(139

)

Total stockholders’ equity

 

 

262,063

 

 

 

251,382

 

Total liabilities and stockholders’ equity

 

$

1,425,037

 

 

$

1,225,070

 

 

 

 

 

 

 

 



NORTHEAST COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31

 

Year Ended December 31,

 

 

  

2022

  

2021

 

  

2022

 

  

2021

 

 

 

 

(In thousands, except per share amounts)

 

INTEREST INCOME:

 

 

  

 

 

  

 

 

  

 

 

  

 

Loans

 

$

23,748

 

$

12,661

 

 

$

69,992

 

 

$

47,898

 

 

Interest-earning deposits

 

 

542

 

 

41

 

 

 

1,260

 

 

 

115

 

 

Securities

 

 

216

 

 

114

 

 

 

750

 

 

 

391

 

 

Total Interest Income

 

 

24,506

 

 

12,816

 

 

 

72,002

 

 

 

48,404

 

 

INTEREST EXPENSE:

 

 

  

 

 

  

 

 

  

 

 

  

 

Deposits

 

 

3,421

 

 

969

 

 

 

7,544

 

 

 

4,359

 

 

Borrowings

 

 

129

 

 

178

 

 

 

546

 

 

 

706

 

 

Financing lease

 

 

9

 

 

9

 

 

 

37

 

 

 

36

 

 

Total Interest Expense

 

 

3,559

 

 

1,156

 

 

 

8,127

 

 

 

5,101

 

 

Net Interest Income

 

 

20,947

 

 

11,660

 

 

 

63,875

 

 

 

43,303

 

 

Provision for loan loss

 

 

439

 

 

 

 

 

439

 

 

 

3,610

 

 

Net Interest Income after Provision for Loan Losses

 

 

20,508

 

 

11,660

 

 

 

63,436

 

 

 

39,693

 

 

NON-INTEREST INCOME:

 

 

  

 

 

  

 

 

  

 

 

  

 

Other loan fees and service charges

 

 

432

 

 

472

 

 

 

1,994

 

 

 

1,568

 

 

Gain on disposition of equipment

 

 

 

 

 

 

 

98

 

 

 

7

 

 

Earnings on bank owned life insurance

 

 

155

 

 

153

 

 

 

604

 

 

 

600

 

 

Investment advisory fees

 

 

110

 

 

133

 

 

 

474

 

 

 

514

 

 

Realized and unrealized gain (loss) on equity securities

 

 

62

 

 

(174

)

 

 

(1,573

)

 

 

(389

)

 

Other

 

 

20

 

 

17

 

 

 

86

 

 

 

54

 

 

Total Non-Interest Income

 

 

779

 

 

601

 

 

 

1,683

 

 

 

2,354

 

 

NON-INTEREST EXPENSES:

 

 

  

 

 

  

 

 

  

 

 

  

 

Salaries and employee benefits

 

 

4,130

 

 

3,773

 

 

 

15,549

 

 

 

14,996

 

 

Occupancy expense

 

 

665

 

 

581

 

 

 

2,428

 

 

 

2,115

 

 

Equipment

 

 

283

 

 

275

 

 

 

1,107

 

 

 

993

 

 

Outside data processing

 

 

497

 

 

434

 

 

 

1,886

 

 

 

1,652

 

 

Advertising

 

 

115

 

 

55

 

 

 

299

 

 

 

139

 

 

Impairment loss on goodwill

 

 

451

 

 

-

 

 

 

451

 

 

 

-

 

 

Real estate owned expense

 

 

371

 

 

8

 

 

 

623

 

 

 

93

 

 

Other

 

 

2,127

 

 

1,630

 

 

 

8,347

 

 

 

6,485

 

 

Total Non-Interest Expenses

 

 

8,639

 

 

6,756

 

 

 

30,690

 

 

 

26,473

 

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

 

12,648

 

 

5,505

 

 

 

34,429

 

 

 

15,574

 

 

PROVISION FOR INCOME TAXES

 

 

4,385

 

 

1,297

 

 

 

9,586

 

 

 

3,669

 

 

NET INCOME

 

$

8,263

 

$

4,208

 

 

$

24,843

 

 

$

11,905

 

 



NORTHEAST COMMUNITY BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31

 

Year Ended December 31,

 

 

  

2022

 

  

2021

 

  

2022

 

  

2021

 

 

 

 

(In thousands, except per share amounts)

 

(In thousands, except per share amounts)

 

Per share data:

 

 

  

 

 

  

 

 

  

 

 

  

 

Earnings per share - basic

 

$

0.54

 

 

$

0.27

 

 

$

1.61

 

 

$

0.75

 

 

Earnings per share - diluted

 

 

0.54

 

 

 

NA

 

 

1.58

 

 

 

NA

 

Weighted average shares outstanding - basic

 

 

15,187

 

 

 

15,501

 

 

 

15,433

 

 

 

15,854

 

 

Weighted average shares outstanding - diluted

 

 

15,330

 

 

 

NA

 

 

15,726

 

 

 

NA

 

Performance ratios/data:

 

 

 

 

 

 

 

 

  

 

 

  

 

Return on average total assets

 

 

2.47

%

 

 

1.46

%

 

 

1.95

%

 

 

1.13

%

 

Return on average shareholders' equity

 

 

12.50

%

 

 

6.71

%

 

 

9.60

%

 

 

6.03

%

 

Net interest income

 

$

20,947

 

 

$

11,660

 

 

$

63,875

 

 

$

43,303

 

 

Net interest margin

 

 

6.64

%

 

 

4.32

%

 

 

5.32

%

 

 

4.40

%

 

Efficiency ratio

 

 

39.76

%

 

 

55.10

%

 

 

46.81

%

 

 

57.98

%

 

Net charge-off ratio

 

 

0.15

%

 

 

0.00

%

 

 

0.02

%

 

 

0.40

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan portfolio composition:

 

 

 

 

 

 

 

 

December 31, 2022

 

 

December 31, 2021

 

One-to-four family

 

 

 

 

 

 

 

$

5,467

 

 

$

7,189

 

 

Multi-family

 

 

 

 

 

 

 

 

117,760

 

 

 

84,425

 

 

Mixed-use

 

 

 

 

 

 

 

 

21,902

 

 

 

28,744

 

 

Total residential real estate

 

 

 

 

 

 

 

 

145,129

 

 

 

120,358

 

 

Non-residential real estate

 

 

 

 

 

 

 

 

30,949

 

 

 

50,016

 

 

Construction

 

 

 

 

 

 

 

 

930,628

 

 

 

683,830

 

 

Commercial and industrial

 

 

 

 

 

 

 

 

110,069

 

 

 

118,378

 

 

Consumer

 

 

 

 

 

 

 

 

546

 

 

 

269

 

 

Gross loans

 

 

 

 

 

 

 

 

1,217,321

 

 

 

972,851

 

 

Deferred loan (fees) costs, net

 

 

 

 

 

 

 

 

372

 

 

 

484

 

 

Total loans

 

 

 

 

 

 

 

$

1,217,693

 

 

$

973,335

 

 

Asset quality data:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans past due over 90 days and still accruing

 

 

 

 

 

 

 

$

-

 

 

$

-

 

 

Non-accrual loans

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

OREO property

 

 

 

 

 

 

 

 

1,456

 

 

 

1,996

 

 

Total non-performing assets

 

 

 

 

 

 

 

$

1,456

 

 

$

1,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

 

 

 

 

 

 

 

0.45

%

 

 

0.54

%

 

Allowance for loan losses to non-performing loans

 

 

 

 

 

 

 

 

NA

 

 

NA

 

Non-performing loans to total loans

 

 

 

 

 

 

 

 

0.00

%

 

 

0.00

%

 

Non-performing assets to total assets

 

 

 

 

 

 

 

 

0.10

%

 

 

0.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank's Regulatory Capital ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital to risk-weighted assets

 

 

 

 

 

 

 

 

13.49

%

 

 

15.28

%

 

Common equity tier 1 capital to risk-weighted assets

 

 

 

 

 

 

 

 

13.16

%

 

 

14.87

%

 

Tier 1 capital to risk-weighted assets

 

 

 

 

 

 

 

 

13.16

%

 

 

14.87

%

 

Tier 1 leverage ratio

 

 

 

 

 

 

 

 

16.49

%

 

 

16.79

%

 



NORTHEAST COMMUNITY BANCORP, INC.
NET INTEREST MARGIN ANALYSIS
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31, 2022

 

Quarter Ended December 31, 2021

 

 

 

Average

 

Interest

 

Average

 

Average

 

Interest

 

Average

 

 

  

Balance

  

and dividend

  

Yield

  

Balance

  

and dividend

  

Yield

 

 

 

(In thousands, except yield/cost information)

 

(In thousands, except yield/cost information)

 

Loan receivable Gross

 

$

1,160,736

 

 

$

23,748

 

 

8.18

%

 

$

933,783

 

 

$

12,661

 

 

5.42

%

 

Securities

 

 

44,825

 

 

 

196

 

 

1.75

%

 

 

28,866

 

 

 

97

 

 

1.34

%

 

Federal Home Loan Bank stock

 

 

1,238

 

 

 

20

 

 

6.46

%

 

 

1,569

 

 

 

17

 

 

4.33

%

 

Other interest-earning assets

 

 

54,339

 

 

 

542

 

 

3.99

%

 

 

114,356

 

 

 

41

 

 

0.14

%

 

Total interest-earning assets

 

 

1,261,138

 

 

 

24,506

 

 

7.77

%

 

 

1,078,574

 

 

 

12,816

 

 

4.75

%

 

Allowance for loan losses

 

 

(5,462

)

 

 

 

 

 

 

 

 

(5,242

)

 

 

 

 

 

 

 

Non-interest-earning assets

 

 

83,687

 

 

 

 

 

 

 

 

 

77,027

 

 

 

 

 

 

 

 

Total assets

 

$

1,339,363

 

 

 

 

 

 

 

 

$

1,150,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposit

 

$

95,448

 

 

$

317

 

 

1.33

%

 

$

119,598

 

 

$

193

 

 

0.65

%

 

Savings and club accounts

 

 

262,994

 

 

 

1,347

 

 

2.05

%

 

 

133,938

 

 

 

153

 

 

0.46

%

 

Certificates of deposit

 

 

327,551

 

 

 

1,757

 

 

2.15

%

 

 

301,062

 

 

 

623

 

 

0.83

%

 

Total interest-bearing deposits

 

 

685,993

 

 

 

3,421

 

 

1.99

%

 

 

554,598

 

 

 

969

 

 

0.70

%

 

Borrowed money

 

 

21,000

 

 

 

138

 

 

2.63

%

 

 

28,000

 

 

 

187

 

 

2.67

%

 

Total interest-bearing liabilities

 

 

706,993

 

 

 

3,559

 

 

2.01

%

 

 

582,598

 

 

 

1,156

 

 

0.79

%

 

Non-interest-bearing demand deposit

 

 

349,991

 

 

 

 

 

 

 

 

 

299,911

 

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

18,034

 

 

 

 

 

 

 

 

 

17,036

 

 

 

 

 

 

 

 

Total liabilities

 

 

1,075,018

 

 

 

 

 

 

 

 

 

899,545

 

 

 

 

 

 

 

 

Equity

 

 

264,345

 

 

 

 

 

 

 

 

 

250,814

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

1,339,363

 

 

 

 

 

 

 

 

$

1,150,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income / interest spread

 

 

 

 

$

20,947

 

 

5.76

%

 

 

 

 

$

11,660

 

 

3.96

%

 

Net interest rate margin

 

 

 

 

 

 

 

 

6.64

%

 

 

 

 

 

 

 

 

4.32

%

 

Net interest earning assets

 

$

554,145

 

 

 

 

 

 

 

 

$

495,976

 

 

 

 

 

 

 

 

Average interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to interest-bearing liabilities

 

 

178.38

%

 

 

 

 

 

 

 

 

185.13

%

 

 

 

 

 

 

 



NORTHEAST COMMUNITY BANCORP, INC.
NET INTEREST MARGIN ANALYSIS
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2022

 

Year Ended December 31, 2021

 

 

Average

 

Interest

 

Average

 

Average

 

Interest

 

Average

 

    

Balance

    

and dividend

    

Yield

 

Balance

    

and dividend

    

Yield

 

 

(In thousands, except yield/cost information)

 

(In thousands, except yield/cost information)

Loan receivable Gross

 

$

1,054,577

 

 

$

69,992

 

 

6.64

%

 

$

866,518

 

 

$

47,898

 

 

5.53

%

Securities

 

 

42,771

 

 

 

681

 

 

1.59

%

 

 

23,026

 

 

 

320

 

 

1.39

%

Federal Home Loan Bank stock

 

 

1,299

 

 

 

69

 

 

5.31

%

 

 

1,576

 

 

 

71

 

 

4.51

%

Other interest-earning assets

 

 

101,999

 

 

 

1,260

 

 

1.24

%

 

 

91,999

 

 

 

115

 

 

0.13

%

Total interest-earning assets

 

 

1,200,646

 

 

 

72,002

 

 

6.00

%

 

 

983,119

 

 

 

48,404

 

 

4.92

%

Allowance for loan losses

 

 

(5,387

)

 

 

 

 

 

 

 

 

(5,154

)

 

 

 

 

 

 

Non-interest-earning assets

 

 

79,835

 

 

 

 

 

 

 

 

 

72,855

 

 

 

 

 

 

 

Total assets

 

$

1,275,094

 

 

 

 

 

 

 

 

$

1,050,820

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposit

 

$

108,077

 

 

$

918

 

 

0.85

%

 

$

114,940

 

 

$

696

 

 

0.61

%

Savings and club accounts

 

 

228,811

 

 

 

2,688

 

 

1.17

%

 

 

108,877

 

 

 

328

 

 

0.30

%

Certificates of deposit

 

 

285,991

 

 

 

3,938

 

 

1.38

%

 

 

316,690

 

 

 

3,335

 

 

1.05

%

Total interest-bearing deposits

 

 

622,879

 

 

 

7,544

 

 

1.21

%

 

 

540,507

 

 

 

4,359

 

 

0.81

%

Borrowed money

 

 

22,247

 

 

 

583

 

 

2.62

%

 

 

28,000

 

 

 

742

 

 

2.65

%

Total interest-bearing liabilities

 

 

645,126

 

 

 

8,127

 

 

1.26

%

 

 

568,507

 

 

 

5,101

 

 

0.90

%

Non-interest-bearing demand deposit

 

 

355,118

 

 

 

 

 

 

 

 

 

260,529

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

16,137

 

 

 

 

 

 

 

 

 

24,310

 

 

 

 

 

 

 

Total liabilities

 

 

1,016,381

 

 

 

 

 

 

 

 

 

853,346

 

 

 

 

 

 

 

Equity

 

 

258,713

 

 

 

 

 

 

 

 

 

197,474

 

 

 

 

 

 

 

Total liabilities and equity

 

$

1,275,094

 

 

 

 

 

 

 

 

$

1,050,820

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income / interest spread

 

 

 

 

$

63,875

 

 

4.74

%

 

 

 

 

$

43,303

 

 

4.02

%

Net interest rate margin

 

 

 

 

 

 

 

 

5.32

%

 

 

 

 

 

 

 

 

4.40

%

Net interest earning assets

 

$

555,520

 

 

 

 

 

 

 

 

$

414,612

 

 

 

 

 

 

 

Average interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to interest-bearing liabilities

 

 

186.11

%

 

 

 

 

 

 

 

 

172.93

%

 

 

 

 

 

 


CONTACT: CONTACT:         Kenneth A. Martinek Chairman and Chief Executive Officer PHONE:         (914) 684-2500