NEW YORK, March 02, 2022 (GLOBE NEWSWIRE) -- Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, (the "Company") (NASDAQ:PDLB), the financial holding company for Ponce Bank (the "Bank"), reported net income of $15.0 million, or $0.90 per basic share and $0.89 per diluted share, for the fourth quarter of 2021, compared to net income of $2.1 million, or $0.12 per basic and diluted share, for the prior quarter and net income of $1.6 million, or $0.10 per basic and diluted share, for the fourth quarter of 2020.

Fourth Quarter Highlights

Net interest income of $16.8 million for the fourth quarter increased $1.3 million, or 8.7%, from the prior quarter and $5.1 million, or 43.8%, from the same quarter last year.
Income before income taxes of $19.2 million for the fourth quarter increased $15.9 million, or 470.4%, from the prior quarter and $17.1 million, or 810.2%, from the same quarter last year. Included in the fourth quarter was a net gain of $15.4 million resulting from the sale of real properties.
Average cost of interest-bearing deposits was 0.51% for the fourth quarter, a decrease from 0.58% for the prior quarter and from 0.94% for the same quarter last year.
Net interest margin was 4.51% for the fourth quarter, an increase from 4.13% for the prior quarter and from 3.78% for the same quarter last year.
Net interest rate spread was 4.32% for the fourth quarter, an increase from 3.92% for the prior quarter and from 3.50% for the same quarter last year.
Efficiency ratio was 44.10% for the fourth quarter compared to 78.89% for the prior quarter and 84.71% for the same quarter last year.
Non-performing loans of $11.4 million as of December 31, 2021 decreased $240,000 year-over-year and was 0.87% of total gross loans receivable at December 31, 2021.
Net loans receivable were $1.31 billion at December 31, 2021, an increase of $146.4 million, or 12.6%, from December 31, 2020.
Deposits were $1.20 billion at December 31, 2021, an increase of $175.1 million, or 17.0%, from December 31, 2020.

President and Chief Executive Officer's Comments

Carlos P. Naudon, President & CEO, stated that "2021 was truly a transformational year, thanks to the efforts of our people and the leadership of our Board of Directors: we raised over $132.0 million in additional capital through our conversion and reorganization; we realized approximately $20.0 million in net gain while freeing up approximately $40.0 million in investable funds through our sale-and-leaseback initiative; we provided $261.6 million in PPP loans to over 5,000 small businesses in our hard-hit communities; and we had record earnings. Now, as we consider additional capital from ECIP funding, we are poised to deliver further and farther on our core mission: using our resources to provide impactful financial services to underserved but deserving communities while building value for our stakeholders."

Executive Chairman's Comments

Steven A. Tsavaris, Executive Chairman, noted that "from our humble beginnings in the turbulent South Bronx over 60 years ago, we have survived and flourished. In 2021 we reached critical milestones: our strongest-ever capital position – and getting even stronger; our largest loan portfolio at $1.3 billion; our impeccable asset quality; and, our improved loan origination capabilities. Now, as Ponce Financial Group, we will continue to responsibly deploy our capital."

Loan Payment Deferrals

As of December 31, 2021, four loans in the amount of $8.0 million remained in forbearance as a result of renewed forbearance. Of the four loans receiving renewed forbearance, one loan in the amount of $6.6 million is related to construction real estate, two loans, totaling $1.0 million are related to one-to-four family residential real estate and one loan in the amount of $391,000 is related to non-residential properties. All of these loans had been performing in accordance with their contractual obligations prior to the granting of the initial forbearance.

Results of Operations Summary

Net income for the three months ended December 31, 2021 was $15.0 million, compared to $2.1 million of net income for the three months ended September 30, 2021 and $1.6 million of net income for the three months ended December 31, 2020.

The $12.9 million increase in net income for the three months ended December 31, 2021 compared to the three months ended September 30, 2021 was due substantially to an increase of $15.9 million in non-interest income primarily resulting from an increase of $15.4 million in gains, net of expenses, on sale of real properties. The increase in net income was also attributable to an increase of $1.3 million in net interest income, offset by increases of $2.9 million in provision for income taxes, $1.1 million in non-interest expense and $301,000 in provision for loan losses.

The $13.4 million increase in net income for the three months ended December 31, 2021 compared to the three months ended December 31, 2020 was due substantially to an increase of $14.4 million in non-interest income primarily resulting from an increase of $15.4 million in gains, net of expenses, on sale of real properties, offset by a $1.5 million decrease in income on sale of mortgage loans. The increase in net income was also attributable to an increase of $5.1 million in net interest income, offset by increases of $3.8 million in provision for income taxes, $1.9 million in non-interest expense and $467,000 in provision for loan losses.

Net income for the year ended December 31, 2021 was $25.4 million, compared to $3.9 million of net income for the year ended December 31, 2020. The change from the year ended December 31, 2020 is primarily due to a $21.4 million increase in non-interest income resulting from increases of $16.1 million in gains, net of expenses, on sale of real properties, $2.1 million in loan origination fees and $1.1 million in sale of mortgage loans. The increase in net income was also attributable to a $16.9 million increase in net interest income, offset by increases of $9.6 million in non-interest expense, $6.8 million in provision for income taxes and a $274,000 in provision for loan losses.

Net interest income for the three months ended December 31, 2021 was $16.8 million, an increase of $1.3 million, or 8.7%, compared to the three months ended September 30, 2021 and an increase of $5.1 million, or 43.8%, compared to the three months ended December 31, 2020. The increase of $1.3 million in net interest income for the three months ended December 31, 2021 compared to the three months ended September 30, 2021 was attributable to an increase of $1.2 million in interest and dividend income and a decrease of $115,000 in interest expense. The increase of $5.1 million in net interest income for the three months ended December 31, 2021 compared to the three months ended December 31, 2020 was attributable to an increase of $4.3 million in interest and dividend income and a decrease of $769,000 in interest expense.

Net interest income for the year ended December 31, 2021 was $58.8 million, an increase of $16.9 million, or 40.2%, compared to the year ended December 31, 2020. The increase in net interest income was attributable to an increase of $13.8 million in interest and dividend income and a decrease of $3.1 million in interest expense.

Net interest margin was 4.51% for the three months ended December 31, 2021, an increase of 38 basis points from 4.13% for the three months ended September 30, 2021 and an increase of 73 basis points from 3.78% for the three months ended December 31, 2020.

Net interest rate spread increased by 40 basis points to 4.32% for the three months ended December 31, 2021 from 3.92% for the three months ended September 30, 2021 and increased by 82 basis points from 3.50% for the three months ended December 31, 2020. The increase in the net interest rate spread for the three months ended December 31, 2021 compared to the three months ended September 30, 2021 was primarily due to an increase in the average yields on interest-earning assets of 35 basis points to 5.01% for the three months ended December 31, 2021 from 4.66% for the three months ended September 30, 2021, and a decrease on the average rates on interest-bearing liabilities of 5 basis points to 0.69% for the three months ended December 31, 2021 from 0.74% for the three months ended September 30, 2021. The increase in the net interest rate spread for the three months ended December 31, 2021 compared to the three months ended December 31, 2020 was primarily due to an increase in the average yields on interest-earning assets of 38 basis points to 5.01% for the three months ended December 31, 2021 from 4.63% for the three months ended December 31, 2020 and by a decrease on the average rates on interest-bearing liabilities of 44 basis points to 0.69% for the three months ended December 31, 2021 from 1.13% for the three months ended December 31, 2020.

Non-interest income increased $15.9 million to $19.2 million for the three months ended December 31, 2021 from $3.2 million for the three months ended September 30, 2021 and increased $14.4 million from $4.8 million for the three months ended December 31, 2020. Excluding the $15.4 million gain, net of expense, from sale of real properties, non-interest income increased $504,000 to $3.7 million for the three months ended December 31, 2021 compared to the three months ended September 30, 2021 and decreased $1.1 million compared to the three months ended December 31, 2020.

The increase of $15.9 million in non-interest income for the three months ended December 31, 2021 compared to the three months ended September 30, 2021 was due to increases of $15.4 million in gain, net of expenses, from the sale of real properties recognized in the fourth quarter of 2021, $261,000 in loan origination fees, $131,000 in brokerage commissions, $119,000 in income on sale of mortgage loans, $12,000 in other non-interest income and $7,000 in late and prepayment charges offset by a decrease of $26,000 in service charges and fees.

The increase of $14.4 million in non-interest income for the three months ended December 31, 2021 compared to the three months ended December 31, 2020 was primarily due to increases of $15.4 million in gain, net of expenses, from the sale of real properties recognized in the fourth quarter of 2021, $255,000 in late and prepayment charges, $230,000 in loan origination fees, $205,000 in service charges and fees, offset by decreases of $1.5 million in income on sale of mortgage, $243,000 in other non-interest income, and $54,000 in brokerage commissions.

Non-interest income increased $21.4 million to $34.6 million for the year ended December 31, 2021 from $13.2 million for the year ended December 31, 2020. The increase in non-interest income for the year ended December 31, 2021 compared to the year ended December 31, 2020 was primarily due to increases of $16.1 million in gain, net of expenses, from the sale of real properties, $2.1 million in loan origination fees and $1.1 million on sale of mortgage loans. Other increases include $849,000 in late and prepayment charges, $765,000 in service charges and fees, $350,000 in brokerage commissions and $92,000 in other non-interest income. Excluding the $16.1 million increase in gain, net of expense, from the sale of real properties, non-interest income increased $5.3 million to $14.4 million for the year ended December 31, 2021 compared to $9.1 million for the year ended December 31, 2020.

Non-interest expense increased $1.1 million, or 7.6%, to $15.9 million for the three months ended December 31, 2021, from $14.7 million for the three months ended September 30, 2021 and increased $1.9 million from $14.0 million for the three months ended December 31, 2020.

The increase of $1.1 million in non-interest expense for the three months ended December 31, 2021, compared to the three months ended September 30, 2021, was attributable to an increase of $532,000 in compensation and benefits, primarily attributable to $700,000 of ESOP expenses attributable to an additional 48,250 shares to be released as of December 31, 2021, offset by decreases of $102,000 in bonuses and $111,000 in employer's portion of social security. Other increases in non-interest expense were $353,000 in other operating expenses, $336,000 in direct loan expenses, $158,000 in occupancy and equipment, offset by a decrease of $146,000 in data processing expenses.

The increase of $1.9 million in non-interest expense for the three months ended December 31, 2021, compared to the three months ended December 31, 2020 primarily reflects increases of $433,000 in direct loan expenses, $432,000 in other operating expenses, $321,000 in occupancy and equipment, $193,000 in data processing expenses, $167,000 in office supplies, telephone and postage, $167,000 in professional fees and $113,000 in compensation and benefits. The $113,000 increase in compensation and benefits was primarily attributable to $748,000 of ESOP expenses of which $700,000 was attributable to an additional 48,250 shares to be released as of December 31, 2021, offset by decreases of $463,000 in bonuses and $109,000 in employer's portion of social security.

Non-interest expense increased $9.6 million, or 20.2%, to $57.1 million for the year ended December 31, 2021, compared to $47.5 million for the year ended December 31, 2020. The increase in non-interest expense for the year ended December 31, 2021, compared to the year ended December 31, 2020 was attributable to increases of $2.4 million in direct loan expenses, $1.8 million in occupancy and equipment, $1.6 million in professional fees, primarily due to an increase in consulting expenses related to a third-party service provider that provided loan origination services related to PPP loans and $1.2 million in compensation and benefits. Other increases in non-interest expense include $1.2 million in other operating expenses, $878,000 in data processing expenses, $655,000 in office supplies, telephone and postage and $113,000 in regulatory dues, offset by a decrease of $282,000 in marketing and promotional expenses. The $1.2 million increase in compensation and benefits was primarily attributable to $867,000 of ESOP expenses of which $700,000 was attributable to an additional 48,250 shares to be released as of December 31, 2021 and $334,000 in bonuses.

Balance Sheet Summary

Total assets increased $298.3 million, or 22.0%, to $1.65 billion at December 31, 2021 from $1.36 billion at December 31, 2020. The increase in total assets is attributable to increases of $146.4 million in net loans receivable, including $51.4 million net increase in PPP loans, $95.8 million in available-for-sale securities, $81.8 million in cash and cash equivalents, $7.5 million in other assets and $966,000 in accrued interest receivable. The increase in total assets was reduced by decreases of $19.6 million in mortgage loans held for sale, at fair value, $12.4 million, net, in premises and equipment, $836,000 in deferred tax assets, $809,000 in held-to-maturity securities, $425,000 in FHLBNY stock, and $249,000 in placement with banks.

Total liabilities increased $268.6 million, or 22.5%, to $1.46 billion at December 31, 2021 from $1.20 billion at December 31, 2020. The increase in total liabilities was mainly attributable to increases of $175.1 million in deposits, of which $122.0 million were related to conversion and reorganization, $638,000 in advance payments by borrowers for taxes and insurance and $168,000 in accrued interest payable, offset by decreases of $14.9 million in warehouse lines of credit, $11.0 million in advances from FHLBNY and others, $2.0 in other liabilities and $1.5 million of mortgage loan fundings payable.

Total stockholders' equity increased $29.7 million, or 18.6%, to $189.3 million at December 31, 2021 from $159.5 million at December 31, 2020. This increase in stockholders' equity was mainly attributable to $25.4 million in net income, $3.1 million in net treasury stock activity, related to PDL Community Bancorp, $1.4 million related to share-based compensation and $1.3 million related to the Company's ESOP, offset by $1.6 million related to unrealized loss on available-for-sale securities.

Pursuant to the conversion and reorganization, PDL Community Bancorp treasury stock was extinguished on January 27, 2022. The Ponce Financial Group, Inc. has no treasury stock.

About Ponce Financial Group, Inc.

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

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; the anticipated impact of the COVID-19 pandemic and Ponce Bank's attempts at mitigation; 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 PDL Community Bancorp'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., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except for share data)


	As of
	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
ASSETS
Cash and due from banks:
Cash	$	98,954		$	29,365		$	32,541		$	13,551		$	26,936
Interest-bearing deposits in banks		54,940			33,673			33,551			76,571			45,142
Total cash and cash equivalents		153,894			63,038			66,092			90,122			72,078
Available-for-sale securities, at fair value		113,346			104,358			48,536			30,929			17,498
Held-to-maturity securities, at amortized cost		934			1,437			1,720			1,732			1,743
Placement with banks		2,490			2,490			2,739			2,739			2,739
Mortgage loans held for sale, at fair value		15,836			13,930			15,308			13,725			35,406
Loans receivable, net		1,305,078			1,302,238			1,343,578			1,230,458			1,158,640
Accrued interest receivable		12,362			13,360			13,134			12,547			11,396
Premises and equipment, net		19,617			34,081			34,057			33,625			32,045
Federal Home Loan Bank of New York stock (FHLBNY), at cost		6,001			6,001			6,156			6,057			6,426
Deferred tax assets		3,820			4,826			5,493			4,569			4,656
Other assets		20,132			14,793			10,837			7,204			12,604
Total assets	$	1,653,510		$	1,560,552		$	1,547,650		$	1,433,707		$	1,355,231
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits	$	1,204,716		$	1,249,261		$	1,236,161		$	1,138,546		$	1,029,579
Accrued interest payable		228			238			55			66			60
Advance payments by borrowers for taxes and insurance		7,657			9,118			7,682			9,264			7,019
Advances from the FHLBNY and others		106,255			106,255			109,255			109,255			117,255
Warehouse lines of credit		15,090			11,261			13,084			11,664			29,961
Mortgage loan fundings payable		—			1,136			743			676			1,483
Second step liabilities		122,000			—			—			—			—
Other liabilities		8,308			9,396			8,780			3,032			10,330
Total liabilities		1,464,254			1,386,665			1,375,760			1,272,503			1,195,687
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized		—			—			—			—			—
Common stock, $0.01 par value; 50,000,000 shares authorized		185			185			185			185			185
Treasury stock, at cost		(13,687	)		(15,069	)		(15,069	)		(19,285	)		(18,114	)
Additional paid-in-capital		85,601			86,360			85,956			85,470			85,105
Retained earnings		122,956			107,977			105,925			99,993			97,541
Accumulated other comprehensive income		(1,456	)		(621	)		(41	)		28			135
Unearned compensation ─ ESOP		(4,343	)		(4,945	)		(5,066	)		(5,187	)		(5,308	)
Total stockholders' equity		189,256			173,887			171,890			161,204			159,544
Total liabilities and stockholders' equity	$	1,653,510		$	1,560,552		$	1,547,650		$	1,433,707		$	1,355,231

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

	Three Months Ended
	December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020
Interest and dividend income:
Interest on loans receivable	$	18,013	$	16,991	$	15,603	$	14,925	$	14,070
Interest on deposits due from banks		7		9		2		2		10
Interest and dividend on securities and FHLBNY stock		632		425		239		250		233
Total interest and dividend income		18,652		17,425		15,844		15,177		14,313
Interest expense:
Interest on certificates of deposit		907		1,010		1,108		1,219		1,422
Interest on other deposits		309		354		382		382		448
Interest on borrowings		654		621		622		684		769
Total interest expense		1,870		1,985		2,112		2,285		2,639
Net interest income		16,782		15,440		13,732		12,892		11,674
Provision for loan losses		873		572		586		686		406
Net interest income after provision for loan losses		15,909		14,868		13,146		12,206		11,268
Non-interest income:
Service charges and fees		468		494		366		329		263
Brokerage commissions		401		270		430		223		455
Late and prepayment charges		336		329		298		244		81
Income on sale of mortgage loans		1,294		1,175		1,288		1,508		2,748
Loan origination		886		625		971		539		656
Gain on sale of real property		15,431		—		4,176		663		—
Other		353		341		812		387		596
Total non-interest income		19,169		3,234		8,341		3,893		4,799
Non-interest expense:
Compensation and benefits		6,959		6,427		4,212		5,664		6,846
Occupancy and equipment		3,007		2,849		2,838		2,634		2,686
Data processing expenses		771		917		733		594		578
Direct loan expenses		1,032		696		1,151		1,009		599
Insurance and surety bond premiums		149		147		143		146		166
Office supplies, telephone and postage		552		626		467		409		385
Professional fees		1,700		1,765		2,902		1,262		1,533
Marketing and promotional expenses		69		51		48		38		—
Directors fees		80		67		69		69		69
Regulatory dues		69		74		120		60		59
Other operating expenses		1,466		1,113		958		1,030		1,034
Total non-interest expense		15,854		14,732		13,641		12,915		13,955
Income before income taxes		19,224		3,370		7,846		3,184		2,112
Provision for income taxes		4,245		1,318		1,914		732		484
Net income	$	14,979	$	2,052	$	5,932	$	2,452	$	1,628
Earnings per share:
Basic	$	0.90	$	0.12	$	0.35	$	0.15	$	0.10
Diluted	$	0.89	$	0.12	$	0.35	$	0.15	$	0.10
Weighted average shares outstanding:
Basic		16,864,929		16,823,731		16,737,037		16,548,196		16,558,576
Diluted		16,924,785		16,914,833		16,773,606		16,548,196		16,558,576

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

	For the Years Ended December 31,
	2021		2020		Variance $			Variance %
Interest and dividend income:
Interest on loans receivable	$	65,532	$	52,389	$	13,143			25.09	%
Interest on deposits due from banks		20		84		(64	)		(76.19	%)
Interest and dividend on securities and FHLBNY stock		1,546		866		680			78.52	%
Total interest and dividend income		67,098		53,339		13,759			25.80	%
Interest expense:
Interest on certificates of deposit		4,244		6,576		(2,332	)		(35.46	%)
Interest on other deposits		1,427		2,174		(747	)		(34.36	%)
Interest on borrowings		2,581		2,619		(38	)		(1.45	%)
Total interest expense		8,252		11,369		(3,117	)		(27.42	%)
Net interest income		58,846		41,970		16,876			40.21	%
Provision for loan losses		2,717		2,443		274			11.22	%
Net interest income after provision for loan losses		56,129		39,527		16,602			42.00	%
Non-interest income:
Service charges and fees		1,657		892		765			85.76	%
Brokerage commissions		1,324		974		350			35.93	%
Late and prepayment charges		1,207		358		849			237.15	%
Income on sale of mortgage loans		5,265		4,120		1,145			27.79	%
Loan origination		3,021		925		2,096			226.59	%
Gain on sale of real property		20,270		4,177		16,093			385.28	%
Other		1,893		1,801		92			5.11	%
Total non-interest income		34,637		13,247		21,390			161.47	%
Non-interest expense:
Compensation and benefits		23,262		22,053		1,209			5.48	%
Occupancy and equipment		11,328		9,564		1,764			18.44	%
Data processing expenses		3,015		2,137		878			41.09	%
Direct loan expenses		3,888		1,447		2,441			168.69	%
Insurance and surety bond premiums		585		553		32			5.79	%
Office supplies, telephone and postage		2,054		1,399		655			46.82	%
Professional fees		7,629		6,049		1,580			26.12	%
Marketing and promotional expenses		206		488		(282	)		(57.79	%)
Directors fees		285		276		9			3.26	%
Regulatory dues		323		210		113			53.81	%
Other operating expenses		4,567		3,363		1,204			35.80	%
Total non-interest expense		57,142		47,539		9,603			20.20	%
Income before income taxes		33,624		5,235		28,389			542.29	%
Provision for income taxes		8,209		1,382		6,827			493.99	%
Net income	$	25,415	$	3,853	$	21,562			559.62	%
Earnings per share:
Basic	$	1.52	$	0.23	N/A			N/A
Diluted	$	1.51	$	0.23	N/A			N/A
Weighted average shares outstanding:
Basic		16,744,561		16,673,193	N/A			N/A
Diluted		16,791,443		16,682,584	N/A			N/A

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Key Metrics

	At or for the Three Months Ended
	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Performance Ratios:
Return on average assets ⁽¹⁾		3.69	%		0.52	%		1.59	%		0.72	%		0.50	%
Return on average equity ⁽¹⁾		31.46	%		4.59	%		13.95	%		6.16	%		4.03	%
Net interest rate spread ^{(1) (2)}		4.32	%		3.92	%		3.60	%		3.76	%		3.50	%
Net interest margin ^{(1) (3)}		4.51	%		4.13	%		3.84	%		4.00	%		3.78	%
Non-interest expense to average assets ⁽¹⁾		3.90	%		3.72	%		3.65	%		3.82	%		4.29	%
Efficiency ratio ⁽⁴⁾		44.10	%		78.89	%		61.80	%		76.94	%		84.71	%
Average interest-earning assets to average interest-bearing liabilities		138.10	%		138.89	%		140.13	%		133.25	%		132.04	%
Average equity to average assets		11.71	%		11.27	%		11.37	%		11.77	%		12.44	%
Capital Ratios:
Total capital to risk weighted assets (bank only)		17.23	%		16.15	%		16.08	%		15.80	%		15.95	%
Tier 1 capital to risk weighted assets (bank only)		15.98	%		14.90	%		14.83	%		14.54	%		14.70	%
Common equity Tier 1 capital to risk-weighted assets (bank only)		15.98	%		14.90	%		14.83	%		14.54	%		14.70	%
Tier 1 capital to average assets (bank only)		10.95	%		9.98	%		10.22	%		10.78	%		11.19	%
Asset Quality Ratios:
Allowance for loan losses as a percentage of total loans		1.24	%		1.21	%		1.16	%		1.24	%		1.27	%
Allowance for loan losses as a percentage of nonperforming loans		142.90	%		157.17	%		175.63	%		126.07	%		127.28	%
Net (charge-offs) recoveries to average outstanding loans ⁽¹⁾		(0.18	%)		(0.13	%)		(0.07	%)		(0.02	%)		0.03	%
Non-performing loans as a percentage of total gross loans		0.87	%		0.77	%		0.66	%		0.99	%		1.00	%
Non-performing loans as a percentage of total assets		0.69	%		0.65	%		0.58	%		0.86	%		0.86	%
Total non-performing assets as a percentage of total assets		0.69	%		0.65	%		0.58	%		0.86	%		0.86	%
Total non-performing assets, accruing loans past due 90 days or more, and accruing troubled debt restructured loans as a percentage of total assets		1.07	%		1.05	%		1.01	%		1.32	%		1.35	%
Other:
Number of offices	19			19			19			20			20
Number of full-time equivalent employees	217			230			231			236			227

(1)	Annualized where appropriate.
(2)	Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(3)	Net interest margin represents net interest income divided by average total interest-earning assets.
(4)	Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Loan Portfolio

	As of
	December 31, 2021						September 30, 2021						June 30, 2021						March 31, 2021						December 31, 2020
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent
	(Dollars in thousands)
Mortgage loans:
1-4 family residential
Investor Owned	$	317,304			24.01	%	$	319,346			24.14	%	$	325,409			23.83	%	$	317,895			25.51	%	$	319,596			27.27	%
Owner-Occupied		96,947			7.33	%		97,493			7.37	%		98,839			7.24	%		99,985			8.02	%		98,795			8.43	%
Multifamily residential		348,300			26.34	%		317,575			24.01	%		318,579			23.33	%		315,078			25.28	%		307,411			26.23	%
Nonresidential properties		239,691			18.13	%		211,075			15.96	%		211,181			15.46	%		215,340			17.28	%		218,929			18.68	%
Construction and land		134,651			10.19	%		133,130			10.07	%		125,265			9.17	%		119,339			9.57	%		105,858			9.03	%
Total mortgage loans		1,136,893			86.00	%		1,078,619			81.55	%		1,079,273			79.02	%		1,067,637			85.66	%		1,050,589			89.64	%
Non-mortgage loans:
Business loans (1)		150,512			11.38	%		207,859			15.72	%		253,935			18.59	%		142,135			11.40	%		94,947			8.10	%
Consumer loans (2)		34,693			2.62	%		36,095			2.73	%		32,576			2.39	%		36,706			2.94	%		26,517			2.26	%
Total non-mortgage loans		185,205			14.00	%		243,954			18.45	%		286,511			20.98	%		178,841			14.34	%		121,464			10.36	%
Total loans, gross		1,322,098			100.00	%		1,322,573			100.00	%		1,365,784			100.00	%		1,246,478			100.00	%		1,172,053			100.00	%

Net deferred loan origination costs		(668	)					(4,327	)					(6,331	)					(512	)					1,457
Allowance for losses on loans		(16,352	)					(16,008	)					(15,875	)					(15,508	)					(14,870	)

Loans, net	$	1,305,078					$	1,302,238					$	1,343,578					$	1,230,458					$	1,158,640

(1)	As of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, business loans include $136.8 million, $195.9 million, $241.5 million, $132.5 million, and $85.3 million, respectively, of PPP loans.
(2)	As of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, consumer loans include $33.9 million, $35.5 million, $32.0 million, $35.9 million and $25.5 million, respectively, of loans originated by the Bank pursuant to its arrangement with Grain Technologies, LLC.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Deposits

	As of
	December 31, 2021					September 30, 2021					June 30, 2021					March 31, 2021					December 31, 2020
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent
	(Dollars in thousands)
Demand⁽¹⁾	$	274,956		22.83	%	$	297,777		23.85	%	$	320,404		25.91	%	$	242,255		21.28	%	$	189,855		18.44	%
Interest-bearing deposits:
NOW/IOLA accounts		35,280		2.93	%		28,025		2.24	%		28,996		2.35	%		32,235		2.83	%		39,296		3.82	%
Money market accounts		186,893		15.51	%		199,758		15.99	%		172,925		13.99	%		157,271		13.81	%		136,258		13.23	%
Reciprocal deposits		143,221		11.89	%		147,226		11.79	%		151,443		12.25	%		137,402		12.07	%		131,363		12.76	%
Savings accounts		134,887		11.20	%		142,851		11.43	%		130,430		10.55	%		130,211		11.44	%		125,820		12.22	%
Total NOW, money market, reciprocal and savings accounts		500,281		41.53	%		517,860		41.45	%		483,794		39.14	%		457,119		40.15	%		432,737		42.03	%
Certificates of deposit of $250K or more		78,454		6.51	%		70,996		5.68	%		74,941		6.06	%		77,418		6.80	%		78,435		7.62	%
Brokered certificates of deposit ⁽²⁾		79,320		6.58	%		83,505		6.68	%		83,506		6.76	%		86,004		7.55	%		52,678		5.12	%
Listing service deposits ⁽²⁾		66,411		5.51	%		66,340		5.31	%		66,518		5.38	%		61,133		5.37	%		39,476		3.83	%
All other certificates of deposit less than $250K		205,294		17.04	%		212,783		17.03	%		206,998		16.75	%		214,617		18.85	%		236,398		22.96	%
Total certificates of deposit		429,479		35.64	%		433,624		34.70	%		431,963		34.95	%		439,172		38.57	%		406,987		39.53	%
Total interest-bearing deposits		929,760		77.17	%		951,484		76.15	%		915,757		74.09	%		896,291		78.72	%		839,724		81.56	%
Total deposits	$	1,204,716		100.00	%	$	1,249,261		100.00	%	$	1,236,161		100.00	%	$	1,138,546		100.00	%	$	1,029,579		100.00	%

(1)	Included in demand deposits are deposits related to net PPP funding.
(2)	As of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, there were $29.0 million, $28.9 million, $28.9 million, $28.8 million and $27.0 million, respectively, in individual listing service deposits amounting to $250,000 or more. All brokered certificates of deposit individually amounted to less than $250,000.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Nonperforming Assets

	As of Three Months Ended
	December 31, 2021			September 31, 2021			June 30, 2021			March 31, 2021			December 31, 2020
	(Dollars in thousands)
Non-accrual loans:
Mortgage loans:
1-4 family residential
Investor owned	$	3,349		$	1,669		$	1,983		$	2,907		$	2,808
Owner occupied		1,284			1,090			1,593			1,585			1,053
Multifamily residential		1,200			2,577			955			946			946
Nonresidential properties		2,163			1,388			1,408			3,761			3,776
Construction and land		917			922			—			—			—
Non-mortgage loans:
Business		—			—			—			—			—
Consumer		—			—			—			—			—
Total non-accrual loans (not including non-accruing troubled debt restructured loans)	$	8,913		$	7,646		$	5,939		$	9,199		$	8,583

Non-accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned	$	234		$	238		$	242		$	246		$	249
Owner occupied		2,196			2,200			2,199			2,195			2,197
Multifamily residential		—			—			—			—			—
Nonresidential properties		100			101			659			661			654
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		—			—			—			—			—
Consumer		—			—			—			—			—
Total non-accruing troubled debt restructured loans		2,530			2,539			3,100			3,102			3,100
Total non-accrual loans	$	11,443		$	10,185		$	9,039		$	12,301		$	11,683
Total non-performing assets	$	11,443		$	10,185		$	9,039		$	12,301		$	11,683

Accruing troubled debt restructured loans:
Mortgage loans:
1-4 family residential
Investor owned	$	3,089		$	3,121		$	3,347		$	3,362		$	3,378
Owner occupied		2,374			2,396			2,431			2,466			2,505
Multifamily residential		—			—			—			—			—
Nonresidential properties		732			738			755			750			754
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		—			—			—			—			—
Consumer		—			—			—			—			—
Total accruing troubled debt restructured loans	$	6,195		$	6,255		$	6,533		$	6,578		$	6,637
Total non-performing assets and accruing troubled debt restructured loans	$	17,638		$	16,440		$	15,572		$	18,879		$	18,320
Total non-performing loans to total gross loans		0.87	%		0.77	%		0.66	%		0.99	%		1.00	%
Total non-performing assets to total assets		0.69	%		0.65	%		0.58	%		0.86	%		0.86	%
Total non-performing assets and accruing troubled debt restructured loans to total assets		1.07	%		1.05	%		1.01	%		1.32	%		1.35	%

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Average Balance Sheets

	For the Three Months Ended December 31,
	2021						2020
	Average						Average
	Outstanding				Average		Outstanding				Average
	Balance		Interest		Yield/Rate ⁽¹⁾		Balance		Interest		Yield/Rate ⁽¹⁾
	(Dollars in thousands)
Interest-earning assets:
Loans ⁽²⁾	$	1,320,635	$	18,013	5.41	%	$	1,164,323	$	14,070	4.81	%
Securities ⁽³⁾		113,826		566	1.97	%		17,205		154	3.56	%
Other ⁽⁴⁾		43,346		73	0.67	%		47,541		89	0.74	%
Total interest-earning assets		1,477,807		18,652	5.01	%		1,229,069		14,313	4.63	%
Non-interest-earning assets		134,798						63,771
Total assets	$	1,612,605					$	1,292,840
Interest-bearing liabilities:
NOW/IOLA	$	29,771	$	16	0.21	%	$	30,752	$	36	0.47	%
Money market		340,334		259	0.30	%		247,669		372	0.60	%
Savings		137,383		33	0.10	%		123,518		39	0.13	%
Certificates of deposit		433,571		907	0.83	%		391,107		1,422	1.45	%
Total deposits		941,059		1,215	0.51	%		793,046		1,869	0.94	%
Advance payments by borrowers		10,361		1	0.04	%		9,168		1	0.04	%
Borrowings		118,692		654	2.19	%		128,617		769	2.38	%
Total interest-bearing liabilities		1,070,112		1,870	0.69	%		930,831		2,639	1.13	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		320,074		—				192,542		—
Other non-interest-bearing liabilities		33,506		—				8,623		—
Total non-interest-bearing liabilities		353,580		—				201,165		—
Total liabilities		1,423,692		1,870				1,131,996		2,639
Total equity		188,913						160,844
Total liabilities and total equity	$	1,612,605			0.69	%	$	1,292,840			1.13	%
Net interest income			$	16,782					$	11,674
Net interest rate spread ⁽⁵⁾					4.32	%					3.50	%
Net interest-earning assets ⁽⁶⁾	$	407,695					$	298,238
Net interest margin ⁽⁷⁾					4.51	%					3.78	%
Average interest-earning assets to interest-bearing liabilities					138.10	%					132.04	%

(1)	Annualized where appropriate.
(2)	Loans include loans and mortgage loans held for sale, at fair value.
(3)	Securities include available-for-sale securities and held-to-maturity securities.
(4)	Includes FHLBNY demand account and FHLBNY stock dividends.
(5)	Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(6)	Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(7)	Net interest margin represents net interest income divided by average total interest-earning assets.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Average Balance Sheets

	For the Years Ended December 31,
	2021							2020
	Average							Average
	Outstanding				Average			Outstanding				Average
	Balance		Interest		Yield/Rate			Balance		Interest		Yield/Rate
	(Dollars in thousands)
Interest-earning assets:
Loans⁽¹⁾	$	1,312,505	$	65,532		4.99	%	$	1,068,785	$	52,389		4.90	%
Securities ⁽²⁾		62,908		1,267		2.01	%		16,473		515		3.13	%
Other ⁽³⁾		51,156		299		0.58	%		53,683		435		0.81	%
Total interest-earning assets		1,426,569		67,098		4.70	%		1,138,941		53,339		4.68	%
Non-interest-earning assets		89,152							56,415
Total assets	$	1,515,721						$	1,195,356
Interest-bearing liabilities:
NOW/IOLA	$	30,851	$	109		0.35	%	$	29,792	$	153		0.51	%
Money market		310,611		1,168		0.38	%		207,454		1,869		0.90	%
Savings		133,244		146		0.11	%		118,956		148		0.12	%
Certificates of deposit		430,164		4,244		0.99	%		379,276		6,576		1.73	%
Total deposits		904,870		5,667		0.63	%		735,478		8,746		1.19	%
Advance payments by borrowers		10,106		4		0.04	%		8,463		4		0.05	%
Borrowings		121,319		2,581		2.13	%		121,193		2,619		2.16	%
Total interest-bearing liabilities		1,036,295		8,252		0.80	%		865,134		11,369		1.31	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		287,008		—					164,555		—
Other non-interest-bearing liabilities		17,763		—					6,603		—
Total non-interest-bearing liabilities		304,771		—					171,158		—
Total liabilities		1,341,066		8,252					1,036,292		11,369
Total equity		174,655							159,064
Total liabilities and total equity	$	1,515,721				0.80	%	$	1,195,356				1.31	%
Net interest income			$	58,846						$	41,970
Net interest rate spread⁽⁴⁾						3.90	%						3.37	%
Net interest-earning assets ⁽⁵⁾	$	390,274						$	273,807
Net interest margin ⁽⁶⁾						4.13	%						3.69	%
Average interest-earning assets to
interest-bearing liabilities						137.66	%						131.65	%

(1)	Loans include loans and mortgage loans held for sale, at fair value.
(2)	Securities include available-for-sale securities and held-to-maturity securities.
(3)	Includes FHLBNY demand account and FHLBNY stock dividends.
(4)	Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(5)	Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6)	Net interest margin represents net interest income divided by average total interest-earning assets.

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, and Subsidiaries

Other Data

	As of

	December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020
Other Data
Common shares issued		18,463,028		18,463,028		18,463,028		18,463,028		18,463,028
Less treasury shares		1,037,041		1,132,086		1,135,086		1,444,776		1,337,059
Common shares outstanding at end of period		17,425,987		17,330,942		17,327,942		17,018,252		17,125,969

Book value per share	$	10.86	$	10.03	$	9.92	$	9.47	$	9.32
Tangible book value per share	$	10.86	$	10.03	$	9.92	$	9.47	$	9.32

Contact:

Frank Perez

frank.perez@poncebank.net

718-931-9000

Ponce Financial Group, Inc., as the successor by merger with PDL Community Bancorp, Announces 2021 Fourth Quarter Results